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Every dealer says fresh inventory makes the most money. So why does the middle bucket fill up every fall? On this episode of LotTalk, Chris Keene, John Anderson, and Renaldo Leonard dig into CarMax’s latest quarter (gross per unit down $111, retail units up 13.8%, dealer purchases up 53.7%) and what it says about trading margin for volume. John explains why a “loose” 60-day aging policy isn’t a policy, Chris makes the case that used car pay plans are built to create aged inventory, and Renaldo breaks down why taking $29,000 on a 12-day-old car listed at $30,000 is often the smartest deal on the board. Plus: the customer-merchandising-price order for working aged units, the 45-day hard stop, Q4 age bucket benchmarks (61+ under 10%, 31 to 60 under 20%), and why raising lease penetration today solves your acquisition problem in 2029. Powered by Lotpop and LotWalk.
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What is LotTalk Podcast powered by Lotpop?
LotTalk powered by Lotpop, explores timely topics in the automotive industry with weekly updates and features guests from various sectors of the automotive world. Learn more at www.lottalkpodcast.com
Chris Keene (00:04)
And we are back.
This is Lot Talk Powered by Lot Pop. I'm Chris Keene, one of the co-hosts, joined by the Crummudgeon himself, Mr. John Anderson. And throwing it way back like Cadillac seats, Mr. Ronaldo Leonard. Gentlemen, good morning. Are you ready to fire this off?
John Anderson (00:24)
Absolutely. Let's roll.
Renaldo Leonard (00:24)
Yes, yes, sir.
Chris Keene (00:27)
Well let's let's roll, let's fire it off, John. really the last couple days in some kind of one-off conversations, and of course this morning while we were backstage for a few minutes before we came on, like always, I mean we are in the trenches each and every week, each and every day, and we're we're seeing all the latest things coming up.
I shouldn't say all. We see a lot of latest things coming up. And we're with our dealer partners. We are with the automotive community in the trenches. So we get a firsthand look at what the headlines say. Are they translating inside the retail dealerships? What do these things look like from
You know, the indirect side of the automotive industry that we sit on, you know, with Lop Pop. All of these things coming across the waves, John. What are some of the most recent headlines that are floating around out there that we can actually validate or that we should, as an industry, be really thinking about?
John Anderson (01:36)
Well it's always great to be on with you guys, first and foremost. And and you know what, I'm gonna start I'm gonna start this out with a question that we always ask our new dealer partners before I get to what you asked me about, Chris. and that is can do can we all agree that the best time to make
the
most money or the highest amount of profit, gross profit and net profit is when our inventory sells in the first fifteen to thirty days.
'Cause I I we've asked
Chris Keene (02:10)
W without a shadow of without a shadow of doubt, yeah.
John Anderson (02:12)
we've asked that question all three of us to dealers and I don't know about you guys, I'll ask you guys, have you ever heard a dealer disagree with that?
Renaldo Leonard (02:20)
Nope.
Chris Keene (02:21)
Naldo.
Renaldo Leonard (02:21)
I haven't. Well, not
verbally. Their actions
Chris Keene (02:26)
Yeah.
Renaldo Leonard (02:27)
would disagree with it.
Chris Keene (02:28)
Well.
Renaldo Leonard (02:28)
However, yeah, just posing that question. One hundred percent. One hundred percent. Selling that fresh inventory. Yeah.
John Anderson (02:35)
Chris, you ever heard of you ever heard anybody
at at a dealership ever disagree with that? Have you ever heard somebody say I don't agree with that?
Chris Keene (02:42)
Not like Ronaldo said directly. Here's what you will hear though. Well but but hold on
John Anderson (02:45)
Right, I'm No, no, no, no.
Chris Keene (02:47)
to to that point though. Here's what yeah, yeah, 100%. You your fresh inventory is gonna make your most money. But you know, you do get those unicorns out there that, you know, you can't replace the car.
Actually, you can. Okay. So just let you know, you can replace the car. And for any of y'all that are sitting there thinking of that unicorn right now, but Chris, we traded for a nineteen ninety-nine four fifty-four SS regular cab with eighteen thousand original miles on it, go replace that car. Well, number one, I don't want to. Just go ahead and tell you that now, because what you paid for that car.
I'm not drawing a quality trade. I'm not getting FI income. I can take the same money for that vehicle and go buy two more vehicles to get me two more customers, which by the way, you can't replace customers, but you can replace vehicles. So, yes, John, they all emphatically say they agree with it, with conditions.
John Anderson (03:50)
Yeah, I think I'm a I think every week we do the podcast, I think I'm gonna start with I'm gonna start with this question just so that I remind everybody, right, of what they say, right. And so my my my then my question is dealers and and managers, listeners and viewers, look at your inventory right now.
And how is it sitting by age bucket? And why would you why would you why would you ever have inventory sitting over 60 days? In today's in today's economy, why would you ever have inventory sitting over past 60 days? Right. And then look back, look back in the history of that unit and did how many deals did you refuse because it was early on and you thought you could make more gross on it?
Or did
Chris Keene (04:36)
Mm-hmm.
John Anderson (04:37)
you forget about that car? So my point being is in today's economy, it it don't let inventory age. sell it fast, turn it fast. because there are far more benefits to that than you can ever convince me of holding on to a vehicle. So I guess what I'm saying in today's economy, be the Buffalo Bills, not the Dallas Cowboys.
Chris Keene (05:01)
Whoa, now you get personal. Damn. Wow.
Renaldo Leonard (05:03)
Cut low, cut low dude. That ain't
right.
John Anderson (05:07)
I went all
the way around the bar I went all the way around the barn to get that in there. So hope you guys appreciate that. Cause the Buffalo Bill the Buffalo Bills
Renaldo Leonard (05:12)
Yeah. And then when you got there you delivered a hammer.
Chris Keene (05:13)
Yeah.
John Anderson (05:17)
score scored an average of fifty six seconds. so they turn they turn it fast. So be buff be the Buffalo Bills of the car industry. So with that being said
Chris Keene (05:26)
Wow.
John Anderson (05:27)
So with that being said, what what
Chris Keene (05:30)
Don't be a Dallas Cowboy.
John Anderson (05:33)
what jumped out what jumped out at me this week is CarMax. We talk about Car Max a lot on here, but there's a reason, right? And so the when I pulled up some just looking for this week some things to bring to the table and to s discuss, and Chris, I asked you to remind me about a term that I that I heard this week.
dialed in, right? And so
Chris Keene (05:58)
Mm-hmm. Mm-hmm.
John Anderson (05:59)
w when I read this off, Carmax
CarMAC's latest quarter, so it ended August thirty first, shows retailer trading trading margin for share. So their overall, their used unit per fell by one hundred and eleven dollars per unit to twenty one five. and they're up
38% as of the end of the second quarter. So you we talk on here a lot, and and I just started this out by talking, you know, talking about focusing on volume and you know here's the here's the one of the largest retailers in the country on used vehicles, and
Chris Keene (06:45)
Mm-hmm.
John Anderson (06:46)
they have they're focusing on selling more more inventory, and it's working for them.
Right. A hundred and eleven dollars doesn't sound like a lot. but I believe a hundred and ninety-seven thousand vehicles were sold by them. Yeah, so yeah, yeah, so t so t
Renaldo Leonard (07:04)
What that was their total for the for the year, year over year.
John Anderson (07:09)
times that times one eleven, right? I know eleven one eleven per unit doesn't sound like much, but but again I'm they're up
Thirty eight percent. And here was the here was probably the most shocking thing that I read.
CarMax also bought 53.6, let's call it 54% more vehicles from dealers than a year ago. They've purchased 50,000 units so far this year from dealers.
Chris Keene (07:37)
Wow.
Renaldo Leonard (07:38)
Mm-hmm. That
You know what that brings to mind to me, John? And it's something that I I think Chris might have coined the phrase getting lift in both volume and gross simultaneously. And when so many of the dealers that we have conversations with are focused on front end gross and telling us that, you know, after a certain amount of time their grosses are down, but they don't recognize the fact that the number of units that they're selling is going up.
Overall, that's a good thing. You're managing both gross and volume. and that's a that's a tremendous validation of how that works out. What you you said, a hundred and one dollars per copy.
Chris Keene (08:16)
Yeah. Mm-hmm.
John Anderson (08:17)
Hundred eleven.
Hundred eleven. Right. And that that's
Renaldo Leonard (08:18)
Yeah. To to pick up.
John Anderson (08:20)
why I want that's why I wanted to point out the total amount of units, right? Because on its own, a hundred eleven doesn't sound like that much. But when you times that times units, right, that they're that they're moving, that's a
Chris Keene (08:30)
How many units was that again, John?
John Anderson (08:32)
hundred and ninety seven thousand.
Renaldo Leonard (08:33)
ninety seven thousand. And
Chris Keene (08:37)
Wee wee wee.
Renaldo Leonard (08:37)
if you put it if you put it to a dealer that way, would you give up a hundred and eleven dollars of gross in order to pick up was it thirty eight percent more volume?
John Anderson (08:46)
Thirty eight yeah, thirty eight percent year over year up in up in volume, yeah. Yeah. it as at the end of the Q two, up thirty eight percent. And it and said it expects Q
Chris Keene (08:56)
But but but by the way, ja by
the way, Joe, that's twenty two million dollars just in case anybody didn't do
John Anderson (09:01)
Yeah.
Chris Keene (09:02)
the math.
John Anderson (09:02)
Yeah.
Renaldo Leonard (09:02)
Well
we don't I mean we don't need to get it the big numbers. But if
Chris Keene (09:06)
Well, why would we?
Renaldo Leonard (09:07)
if you put that in front of the you know, the average dealer in that context, what would they s what would they say? I'd be all in on it.
But from week to week.
Chris Keene (09:15)
Course they will.
John Anderson (09:15)
Why that
then guys it goes back to it goes back to this question that then then I don't I this is the thing with with and I know we've talked about this for several weeks in a row. we're hitting on this same stuff, but I look we're we're headed in you know, we're headed into that time of year where the shopper index is
always lower and and
Chris Keene (09:41)
Mm-hmm.
John Anderson (09:41)
inventory inventory at least inventory tracking it on third party like auto trader and cars dot com the units that are being displayed on those third parties are are usually always up and so and and I know we talk about this a lot but the reason why I bring it up or we bring it up a lot is I
you know, what is it at what point and what is it gonna take? And listen, viewers and listeners, we always say this. If you disagree with this, please, and and I and I'm serious about this, join us on the podcast. Cause I and it's and it's not from listen, I I assure you that I'm not gonna I assure you I'm not gonna to to you know
try to be pushy on you or anything like I I just it w with everything in my in my fiber, I truly want to understand because I I just there there must be something I'm missing and that's what I'm trying to figure out, right? Is what am I missing that year over year and I again I've been here for over ten years now just year over year, dealer after dealer
that that I get in the it it it's just i there's always an issue with this time of year with bleed through into the middle bucket and then it it leads into aging past sixty days. Now I say always an issue. It's not with every dealer. We have some dealers that are blowing it out of the water and that that that they they pay attention to every detail
I'm not gonna name
Chris Keene (11:20)
Yes.
John Anderson (11:21)
names but but they're consistently they're consistently selling eighty, ninety percent of their inventory out of the first thirty days. And they're blowing volume, they're blowing up
Chris Keene (11:30)
John John, there's but
there's there's there's one word for it thinking about that Nick Saban special. There's one word for it. And when you think about in that special so far, he's you know, he talked about that that transition that he made as a coach, and I think it was like halfway through the year when he was at Michigan State. And then he took it when he went to Alabama, and it was one word process.
Process.
No matter what, every single detail they trust the process and they continue to run the play until they take that detail and perfect it to where it's second nature.
But in our industry, John, to the defense of salespeople, BDC, sales managers, GMs, owners, to the defense of those folks, you got talking heads like us out there saying you should go this way, you should go that way, you should go up, you should go down, you should go in circles, you should go backwards, you should go forward.
One of the biggest things right now that everybody is screaming, man, we gotta get lean, we gotta get lean, we gotta get lean. Okay, well, if you're a high performing dealer right now, and if you buy into that, we gotta get lean, you're gonna be crying the blues because you are not stocking what you're selling.
Well, but there's less there's less in market shoppers, Chris. Okay, but your activity is still increasing. So what does it matter what the rest of the market's doing? What are you doing? That that's John, what I hear when you say, you know, the these disciplines and whatnot. It that's the number one thing I hear. And it's like I said, it's driving me nuts. But go ahead and finish your thought. I'm sorry, because I had to jump that in and say that.
John Anderson (13:08)
No, you're f
that's what this format's all about for us to jump in and have conversation 'cause I don't I I you know, guys, I listen, I'm just I'm just explaining
Look, without going too far off track here, my my my responsibility for our company is is basically around two areas.
dealer relations or dealer care. I like to call it dealer care and I am working with several dealers. We all are
Chris Keene (13:36)
Mm-hmm.
John Anderson (13:36)
as a as a performance engineer. So I'm on
Chris Keene (13:39)
Mm-hmm.
John Anderson (13:39)
weekly I'm on weekly meetings with them and
And some of these some of the dealers that that I'm working with and some of the dealers that I regularly jump on calls with that are being handled by our other performance engineers, week after week that that I'm on those calls, I I see the same struggle over and over again. And so I you know I I think I'm always looking for a way to to try to
To try to communicate better. Cause I I take
Chris Keene (14:06)
Mm-hmm.
John Anderson (14:06)
it personal, right? I take it personal when I see a dealer struggling and with the same thing over and over again. I it where's the break in communication, right? you know, I'll tell you something else that resonated with me in in that documentary with Sabin is when he made the decision at halftime to to go with Tua instead of Jalen Hurts.
And and the coaches were freaking out. Well, who's gonna tell him? You gonna tell him?
Chris Keene (14:34)
Ha ha ha.
John Anderson (14:35)
Right? And
Renaldo Leonard (14:36)
Yeah.
John Anderson (14:37)
his point to that was he had to make a hard
Chris Keene (14:37)
He big he's a big boy.
John Anderson (14:39)
he he had to make a hard he had to make a hell of a hard decision and he had to make it quickly. Right. And so,
Chris Keene (14:45)
Yeah.
John Anderson (14:46)
You know, when you're looking at a when you're looking at a unit in inventory that's
that just jumped that just w we call bucket jumpers. It just jumped out of your sixteen to thirty day inventory and into your thirty one to forty five. And you're looking at that car and it's still in inventory. It doesn't have any active leads on it. and we're we're already facing an eleven hundred and sixteen dollar negative front end profit.
There's
some hard decisions to be need to be made on that car. Are you willing to make Right? Are you willing
Renaldo Leonard (15:17)
Dude.
John Anderson (15:18)
to make those kind of hard decisions?
Chris Keene (15:18)
You know, John
Renaldo Leonard (15:19)
But John, let me let me ask you this. Yeah.
Chris Keene (15:20)
Go ahead. Go ahead, Ronaldo. Go ahead, go ahead.
Renaldo Leonard (15:22)
Is it really a hard decision?
John Anderson (15:24)
It shouldn't be.
Renaldo Leonard (15:25)
Mm.
John Anderson (15:25)
It shouldn't be.
Chris Keene (15:25)
Well,
but hang on. I I'm gonna be devil's advocate here and I'm gonna be on the side of the guys on the front line. So for y'all that think I'm always beating up on you, I'm on your side. I'm gonna be
Renaldo Leonard (15:38)
We're all on your side. Yeah.
Chris Keene (15:40)
No, I mean y'all definitely are, but sometimes they think I'm beating up on you because John's
Renaldo Leonard (15:44)
Yeah.
Chris Keene (15:44)
got the hate mail. I mean, like, y'all just call me. I'm a big boy. I could I got thick skin, I could take it. But
Renaldo Leonard (15:51)
You got back
channels.
John Anderson (15:52)
Hate mail,
hate mail, I get hate calls. What are you talking about? Hate mail? They just call me.
Chris Keene (15:56)
Yeah,
John did John did have to take like a 48-minute phone call ripping his ass about me. So so yeah, but but on the side of the dealer, so to the defense of the sales managers, the GSMs, yeah, they do have to sit there.
And dismiss it.
And it's by design.
John Anderson (16:17)
What do you mean? T what are you talking about? Dismiss it. What do you mean?
Chris Keene (16:21)
They have to
dismiss and they're gonna let that engineer the inventory keep aging on them because they are under an enormous amount of pressure from their dealer principals and general managers or C-suite folks. You know, if you're a publicly owned company, your your all your regional vice presidents and vice presidents and everything else, because we're saying you need to run.
fourteen hundred dollars a copy on the front and twenty two hundred dollars a copy on the back.
John Anderson (16:50)
Yeah. Yeah. Now I now I see what yeah.
Chris Keene (16:51)
And here's it
yeah, so here's the problem. Owners, GMs, you you can't sit there and say, Well, last year at this time, in the fourth quarter of of 2025, we ran thirty one hundred dollars a copy in twenty twenty-six.
For the first nine months of this year, for the first three quarters of this year, we've been running thirty four hundred dollars a copy.
Well, guess what, folks? The economics has changed from last year and from the last nine months. The economics has changed that makes some of those things preventative. Now, there's some of y'all out there going, Chris, I don't want to tell you you're talking about because for the last five years now, for the last 10 years now, we've ran $3,500 a copy. And if I let up off of them, I'm gonna lose money. No, you're not. No, you're not.
Not one bit. Because if you stock what you sell, you will sell what you stock. And the more you sell in the first 30, dealer principles, GMs, the more you sell in the first 30, the more you're going to have run back through your shop.
And the less holding costs you're going to be paying. And if you're running more through your shop and your $2,000 average RO on your recon on your internals, and if you're just a measly 60% net to gross, you're netting $1,200 a car.
By running more through your shop, your profit goes up.
Renaldo Leonard (18:20)
Are you talking about service absorption rights?
Chris Keene (18:22)
Maybe so. So I mean, but is so you want to fix that problem? You want to fix the aging problem? Compensate your people on the behavior that you're asking them to have. If you're telling them don't have aged inventory, but there's nothing within their compensation plan besides.
well you get you you get penalized for wholesale loss. Okay.
Right. When when I say compensate them on the behavior you're trying to foster.
Compensate them on how much inventory they sell in the first 30. Compensate them of how much inventory they're carrying in the first 30. Compensate them on how much inventory doesn't bleed through.
And to add another layer to that, I hate spiffs, but it's a necessary evil in our industry because it's kind of like toothpaste. You squeeze the shit out the tube and you can't put it back in. So we can't take and get rid of spiffs. But why am I going to spiff a salesperson to sell a 68-day-old or a 98-day old unit? Do the same thing with your salespeople. Why wouldn't you spiff them?
on how many units they can sell out the first thirty this weekend.
I
mean yeah, it it's it's a problem that can be solved, John Ronaldo. It can be solved.
Renaldo Leonard (19:40)
Reason it.
Reason it.
Chris Keene (19:42)
If we would just reward people for the behavior that we want.
So yeah. I need to wear a blood pressure cuff during these calls.
John Anderson (19:52)
This this top this
this topic this topic continues to I was I was you know, I was on and I know you were too, Chris, I was on the clubhouse this yeah,
Chris Keene (20:02)
The the clubhouse called us last week.
John Anderson (20:04)
clubhouse this morning because our CEO was hosting it. all things used cars. By the way, n listeners, viewers, if if you don't if you're not aware of that, I would
Chris Keene (20:14)
But hit the replay on it.
John Anderson (20:15)
yeah, I would definitely encourage you to to tune into that. There's a lot of
There's a lot of excellent minds in that room and a lot of good information shared on a weekly basis. But this is this topic we're talking about today is it's just it's it's always present. It there's it's there's always discussion about this topic. So it
Chris Keene (20:41)
Okay.
John Anderson (20:41)
doesn't seem to ever it doesn't seem to ever go away. and so
I d I just and and especially going into this time of year, I think it's extremely important, at least from my perspective, for us to keep it in front of our viewers and listeners because it's something you have to be, to use though that terminology again, dialed in on right now. I all the little stuff,
Chris Keene (21:03)
Mm-hmm. Okay.
John Anderson (21:04)
all the small stuff that
I've gotta I've gotta look at every possible thing right now in my used or new car operation. I can't I can't afford to I can't afford to sit back and relax no matter what situation I'm in. Even if I'm even if I'm even if I'm sitting extremely good with my inventory, right? which would be, you know, eighty percent of my used car inventory that
I have in stock is sitting in the first 30 days. You know, 10%
Chris Keene (21:35)
Mm-hmm.
John Anderson (21:36)
in my 10% in my 31 to 60 and 10% my 61 day plus or 20 and nothing in my 61 day plus. Got I've got I've got a monster inventory sitting there with the abil with the potential ability to make to really squeeze out some excellent gross profit and net profit if I sell that inventory fresh that I have sitting in there, right?
But I but I've I've got to continue to look at everything that is going on out there. Right, Chris, you mentioned you mentioned you know, penalizing for penalizing a manager on on wholesale loss,
Renaldo Leonard (22:16)
Still lost.
Chris Keene (22:16)
Mm-hmm.
John Anderson (22:16)
right? Well think about that. Let's think about that for a second. Let's drill down into that a little bit. If I know as a manager, I'm gonna get penalized on
Chris Keene (22:23)
You you that's one of my
favorite topics, but let's go ahead.
Renaldo Leonard (22:26)
Yeah.
John Anderson (22:26)
Yeah.
You know if I'm gonna get penal penalized if I'm a manager, a used car manager, and I know I'm gonna get penalized on on wholesale loss and I and and I've got a pay plan geared around gross the gross profit I generate for my for my department. And we really don't we have a very loose we have a very loose aging policy.
Well, we ask dealers that all the time. Do you have an aging policy? Y yeah. Well w what's your aging policy? Well, it it's sixty days, but we don't we don't really, you know, it it it it's loo it's
Renaldo Leonard (23:03)
Yeah.
John Anderson (23:04)
loose. We don't really right and and you look at their inventory
Renaldo Leonard (23:06)
No, it
John Anderson (23:07)
and they they got inventory that's, you know, eighty and ninety days old, right? So no, I the answer to that question is no, I really don't have an aging policy. but
Just think about that for a second. We anybody in this industry for any p length of time, we always talk about, well, they're, you know, you give them a big plan, they're gonna work their pay plan. Well, let's think about what we just
Chris Keene (23:25)
Yes.
John Anderson (23:25)
I what what we just said there, right? You're gonna penalize I'm a I'm a used car manager, you're gonna penalize me on wholesale loss, but I get I get paid on the gross profit I
Chris Keene (23:35)
All the gross.
John Anderson (23:35)
generate through my department. Well, what do you think I'm gonna
Chris Keene (23:38)
Mm.
John Anderson (23:38)
do with aging inventory?
Renaldo Leonard (23:40)
Later I
Chris Keene (23:41)
You're gonna sit there and do one of these numbers.
John Anderson (23:43)
Well you yeah, I'll get out of it. I I I we talked about before we got on this podcast. I s I said I used to say it all to myself all the time. I'll get out of it. I'll get out of it. I'll sell my way out of
Chris Keene (23:50)
I'll s I'll sell my way out of it. I'll sell my way out of it.
John Anderson (23:53)
it. Right. And then what happens, right? every every used car manager, every GSM, every management for the most part, we got some major, major players out there that have plenty of people they can throw at everything.
But for the most part, I'm talking about the higher percentage of dealers out there.
w we're wearing we're wearing 15, 20 different hats during a day in a dealership, right? So when you say that vehicle's on my mind and I'll say I'll sell out of it, and let's say I said that a week ago, and a week went by and I had a n I had a thousand things I was focusing on, right? and and
Chris Keene (24:33)
Oops, I forgot.
John Anderson (24:34)
so now another week goes by, another week goes by, and shit. You know, it's the shit.
r moment, right? I'm scrolling through the inventory and I see this vehicle. I said I'll sell out of it. Now it's three weeks older and it's racked up another fifty five dollars a day in holding cost per day. Right. And so again, you j Chris, you mentioned things change year over year. I while you said that, I just looked it up 'cause one of the one of the stats that I pulled up this morning was the average used car listing price this year.
Is now twenty seven thousand two thirty nine. In twenty twenty five, the average used car listing price was
twenty five five.
Chris Keene (25:13)
Yeah.
John Anderson (25:14)
Twenty five five to twenty seven two thirty nine in one year. You think a little bit's changed? Right. And so I'm holding I'm holding the same I'm trying to I'm trying to keep the same the thing same thing year over year, holding my staff accountable to the same thing year over year without making any adjustments when the it when the industry is moving about as fast as it ever has. Right. And so i
Chris Keene (25:37)
Yes.
John Anderson (25:38)
from an from
From an ownership or a general management position,
Chris Keene (25:41)
Mm-hmm.
John Anderson (25:41)
that's one of those little things, man. That's one of those little things I gotta look at. I can't I can't just set it and forget it, right? And I think that's part of the problem. We have these, we have these processes that we haven't revisited in years. We've set it and forget it. And and guess what happens with our inventory? We set it and we forget it. Right. And we're struggling with this used car inventory right now. and the last thing on that.
Is
one of the things that we're seeing across our dealer partners is this increase in middle bucket used car inventory as we're getting in this time of year. Right? It's it's our the first thirty sales have dropped off and that inventory is now sitting in that middle bucket in that thirty one to sixty day, and and at risk of going into that sixty one day plus. So
Chris Keene (26:27)
So with that being said, I mean, Ronaldo, from because you work with a lot of sales managers, very specific with sales managers across you know our clients here at Lot Pop, and you do a lot of one on one with these guys. Now, obviously.
you know, they're get kind of handcuffed because of what we just talked about for the last five, six minutes of you know, the way that we compensate but to what John's talking about right there with that middle bucket management, looking at this time of year, looking at all those challenges.
And some of the things you and I one-on-one have talked about of being able to visualize and see and understand the opportunities that I do get in coming on that first 30 inventory before it goes into that middle bucket and we start depleting the gross. Okay. What are some things that you are telling or giving as best practice?
For these sales managers that are strictly tied to PRU, gross volume, what are some things that you're you're giving them as a strategy that you've been seeing them win with here recently over the last you know 45, 60 days to help curb some of those inventory problems?
Renaldo Leonard (27:49)
Well, y you know, first to start out with the process. And and going back to something that was pivotal in my youth when my old man was was raising me, the first thing he says is you can't be blinded by the butt.
Because when you have that conversation with them, going back to how John opened up the you know the the meeting. When you sell fresh inventory, do you make more money? Yes. But no, don't get blinded by the butt. Let's sell it in the first 30 days. So that no ifs ands or buts. Let's let's focus on selling the first 30 days. And if
We can get that vehicle to the market as fast as we possibly can to open up that the lead pool or have that flow of leads coming in, we're giving ourselves
Chris Keene (28:38)
Uh-huh.
Renaldo Leonard (28:38)
an opportunity to get that accomplished. Okay. So, first thing, let's get it merchandise, let's get a price, let's get it. get it out there for people to find it. And once we accomplish that, let's not be blinded by the butt. It takes me a little bit more time to get that vehicle.
through recon, photo, and all that other stuff. If
Chris Keene (28:58)
Yes.
Renaldo Leonard (28:58)
we if we're going to be handcuffed by that process, getting that vehicle to the market within 48 hours, let's go to take a look to see if we have any folks in our CRM looking for that segment, price a vehicle. Recycle those leads. And work from there as opposed to sitting back and waiting for those those hand raisers to come in who
may find it advertised in the market twenty twenty days from now. So let's be proactive rather than reactive. But we have to have that that line in the sand, 30 days is all we have. Let's generate all the activity that we can that we can on the vehicle and then let's engage with that activity
Chris Keene (29:40)
Mm-hmm.
Renaldo Leonard (29:40)
as often at a high quality level as we can to get that vehicle
out of the inventory. We'll make pricing adjustments
Chris Keene (29:48)
So
Renaldo Leonard (29:49)
if we need to. There's no validity from the market, you know. justifying where we have it priced and with our merchandising. If we don't have that lead activity, make our price adjustments. Find that honey hole where that flow of leads is going to come in. But at the end of the
day, if we go through all of those steps, yeah. Yes, sir.
Chris Keene (30:03)
So with but with that hold hold on let me let me ask let me ask a question here though, Ronaldo. So in that same vein
though, let's let's be let's put our sales manager's hat on and we're the ones penciling and working deals. Okay. And we're
Renaldo Leonard (30:16)
Right. Yeah.
Chris Keene (30:18)
on that fresh piece of inventory. And it's a 13-day old rig.
And we got advertised for $30,000. And whether it's the customer coming in, whipping your rear end with all the data that they looked up, that you know, Edmund said this and Kelly said that, and AutoTrader has 13 of them listed cheaper than you, and all the things that customers come at us with JD Power this.
And I'm a sales manager, I'm working that deal, and it's stickered for $30,000. I got the customer in. And maybe it's not even the customer coming in trying to offer me $29,000 on it. Maybe it's a payment call. And this customer is trying to be at you $575 a month. But I gotta either cut the deal to
$29,000, because that's what it takes to close them, or they're offering me $29,000, whatever the case may be.
But sales managers are looking at these Ronaldo because it's a 12, 13-day old rig. And maybe it's not hitting that gross threshold of $1,500 on the front. And we've seen it time and time and time and time again. That's a 12-day old unit. Tell the customer kick rocks. I'm not cutting it. It's 12 days old. What are some things
Renaldo Leonard (31:36)
Yeah.
Chris Keene (31:36)
they should look out for?
Because of that word you said, don't be blinded by the butt. I love that. I am one hundred percent stealing that. you can't be blinded by the butt. Okay. But
Renaldo Leonard (31:46)
tell you the entire story after we get off of you know, 'cause it may not be appropriate for for
Chris Keene (31:52)
have you d Mr. Appropriate right here?
John Anderson (31:54)
That's why I started laughing.
Chris Keene (31:57)
So
Renaldo Leonard (31:56)
Yeah. I saw your
reaction to that, John, and I it it made my soul smile. Yeah, yeah.
John Anderson (32:00)
That's why I started laughing immediately.
Renaldo Leonard (32:03)
Yeah.
Chris Keene (32:02)
But
as a sales manager, though, those are the things that they face, and those are the things they've been conditioned with, and those are the things that we've instilled in them. Buddy, it's a 12-day old unit. You know, don't do that. Go, salesperson, go close them. It's 30 grand. It's not 29. Here's all the reasons why. Okay. What do we do?
Renaldo Leonard (32:23)
Absolutely. I mean, but if we're following
the if we're following the process, which is to demonstrate value in that vehicle, if somebody comes in, makes an offer on it, what are you going to do? You're going to stand on the value that that vehicle represents and you're going to try to defend that gross. However, you come to a point, a line in the sand, where you have to make a decision. Am I going to roll the dice and let it ride? Or am I going to pick up a retail customer and sell that vehicle?
Right? Can we all agree on that? So if the vehicle's 12
Chris Keene (32:51)
a hundred percent.
Renaldo Leonard (32:51)
days old, yeah, if the vehicle is 12 days old and I have an opportunity to sell it, granted, it may not be with the margin that I brought it to the market with, but
Chris Keene (33:01)
Uh-huh.
Renaldo Leonard (33:02)
it is still going to exceed what I have historically done on that vehicle. Let's say I've got it priced at 100% price to the market, and at $30,000, somebody comes in.
Chris Keene (33:12)
Uh-huh.
Renaldo Leonard (33:13)
makes me an offer and I've got a deal at 29,000 and it is going to exceed where I've historically sold that vehicle, say that might be 94% price of the market, right? If I'm north of that 94%, it's 12 days in, I'm still bringing in gross profit. Why the hell not? Why would I not sell that vehicle and get on down the road?
Watch rents repeat.
Chris Keene (33:37)
So hold on, viewers and listeners, listen to what he just said in the scenario I just painted. It's a 12-day old rig. The customer darkened your doorstep at 30 grand. It takes 29 grand to sell it.
Maybe it's at a hundred percent of the market.
But you've been selling at 95. And if cutting at that thousand dollars to make your deal is still holding you at 97%, isn't that just a stark reality of where your market is? You're still above the rim of where you've been selling.
You're making a decision based upon factual information of how your store and your market with your people have been able to sell. Not it's 12 days old, that vehicle deserves to make more money. Under what pretenses? Replace the customer. You can't.
Renaldo Leonard (34:24)
And and here's something else to think about. When we're
Chris Keene (34:25)
That was my point.
Renaldo Leonard (34:26)
look, yeah, when we're looking at the facts, and if you're transacting a 95% price of the market on this particular type of vehicle, but it takes you 35 days to do it or 40 days to do it, and you've got an opportunity to
Chris Keene (34:38)
And now you can put it at day twelve.
Renaldo Leonard (34:39)
yeah. That that is a and I hate to use this term, no brainer.
Because it it shouldn't take a whole lot
of thought, I mean, to to to pull the trigger on that. And and I
Chris Keene (34:52)
Yeah.
Renaldo Leonard (34:53)
yeah, I
Chris Keene (34:54)
John, what's your thought on that, brother?
John Anderson (34:55)
I
mean I can't I i I it's everything that Ronaldo's talking about, I I again when we talk about when we were talking about the beginning of the earlier on in the call about the all the things that that we've gotta take a look at and take into account. This is exactly what we're talking about. And I you know, it it it's the this is the kind of stuff that
I'm trying to relate it to you know what I I'm trying to relate this 'cause I don't always I don't always relate this to a management thing and and and hear me out. I look, spending most of my career on the dealership side, no by no way, shape or form am I saying that
you gotta sit in front of your computer one hundred percent of the time you're in the store and keep your nose to the grindstone and because that's unrealistic, especially as a GM or a G S right? I've got I've got other responsibilities
Chris Keene (35:50)
Mm-hmm.
John Anderson (35:51)
throughout the store and I've gotta get out and you know, I gotta I gotta meet customers. I got I got other responsibilities. But but my point, my point to this is is exactly what you and Ronaldo have been talking about. That's
That's the kind of stuff that I gotta find. I gotta look at and I gotta take action on. And so I've got when I don't have when I don't have something going on, I I've I've got to get back in there. I've got to I've got to be a student of what is happening at my store. I have
Chris Keene (36:20)
Yes.
John Anderson (36:20)
to be a student of what is happening at my store. Look, there's there's tons of tools out there in the marketplace that help us understand what's happening out in the market. And they're all good.
I have nothing negative to say about them. But when it comes down to it, when the rubber w we were talking about earlier, when you're sitting across the desk at the end of the month and you're doing and you're you've either as a GM, you've either already settled the month in statement or maybe you're in your owner's office and you guys are walking through it together and settling your your financial statement the month in and you've got to answer questions.
All that all that mar all that market stuff that you've been looking at, I'm sorry, fellas, that you know that that's not gonna that's not gonna answer those questions. What's gonna answer those questions is what what am I with the staff that I have in the market that I'm sitting in, what am I doing? What am I doing? And that's really where the rubber meets the road. And that's the kind of stuff you guys were just talking about. I've got to understand.
what's happening so I can take action in the appropriate areas.
Chris Keene (37:24)
Yes.
John Anderson (37:25)
So yeah, I mean, man, I I I I hope this stuff, you know, look, Chris you mentioned earlier, man, talking heads. And and, you know, I've I've I've used that term a thousand times, right? And I and I and I've even told you guys, you know, that was part of my hesitation when I thought, man, I wanted to do it.
I wanted us to do a a podcast and I wanted it to you know, I want it to be real. I want it to be unfiltered. you know, Chris, I know you you you we all have. We've all blown up on this thing and and and you know, yes, we have gotten calls, but but that's okay. I I you know what I enjoyed the I enjoy those calls because I I want it. I want pushback, right? I w I I by by
Chris Keene (38:08)
Yeah, you and me both.
John Anderson (38:10)
no by no shape or form do I think
and I think I can speak for all three of us. Ronaldo, Chris, and myself, there is no way that we think we know it all. We just don't. We don't know it all. but what we but listen, I've said this before. I say this to dealers all the time when I'm on a call with them. There's a lot of things that are up for debate. A lot of things, right? We we can debate a lot of things, right? Where should I go to market on this car? We can look at we can look at VenQ, we can look at Viato.
We can help them through that and go, well, okay, where's where should we go to market on this car? And and so that could be up for debate, right? But when when I start looking at when I start looking at the real data and and what's actually happening at that store, where they're selling at, where's my inventory coming out at? Are my customers getting talked to? Am I taking my customers on my virtual lot like I would on my physical lot? And if the car's been sold, they sent me a lead on, am I putting those
on my virtual lot, am I putting on those on on other inventory like I would if I if if Chris showed up in my dealership today and say, hey, I'm here to see that 2025 RAM and and I w I and I know it's sold. I'm not gonna walk up to Chris and go, Chris, man, appreciate you coming in. I'm sorry it's sold. And then turn around, walk away from Chris and go back to my office. I'm not gonna do that. I'm going, hey Chris.
Renaldo Leonard (39:28)
Good to meet you. Have a good day.
Chris Keene (39:28)
Why not?
John Anderson (39:29)
Hey c hey Chris, come with me. you picked out a great truck, but
But unfortunately, f five or six other people thought so as well. So that truck's already been sold. Hey, listen, man, I got some great options here. Come with me. You you're gonna do that in your physical lot. But how many times, guys, do we don't we just see customers sitting on our virtual lot that that w were interested in our inventory, sent us a lead, the car sold and we're just freaking leaving them alone. We're just sitting there and so d
These are all things that make a huge difference. So when it comes to my store with my people, my customers and my market, I gotta be I got I've gotta be I've gotta be an expert in that field. I've gotta be a too too many
Chris Keene (40:09)
Mm-hmm. Mm-hmm.
John Anderson (40:10)
times I think we focus on the stuff that's going on outside of our of our dealership and not what's going on inside our dealership. Right.
Chris Keene (40:19)
Yes.
Renaldo Leonard (40:19)
Yep.
yeah. Absolutely. Absolutely. And to our detriment.
Chris Keene (40:21)
Yeah, and I I think one thing
John Anderson (40:22)
Hey boss, I know
we had a b hey boss, I know we had a bad day. I called a dealer down the street and they had a bad day too.
Chris Keene (40:28)
throw a chair through the window. So
you know, all that being said, some of you viewers and listeners are probably going, Okay, Uncle, you guys have been whipping our ass for the last months now.
Fine, we'll do a better job with it. Okay, great. Do a better job with it then. But I will tell you now, for all the dealers that we consult with all the time and the new dealers that come on and and people that call us out the blue that may not even be a client of ours.
You you 100% make improvement, but you're not consistent with it. So I would say let's go ahead and start there, you know, the process. But also let's in the last few minutes that we have available here, in the last you know, 11-12 minutes, let's talk about the big pink elephant in the room. You know, the big pink elephant in the room, I mean, what do you think about the new car side of it? You know, SAR says 16 million.
But
your showro doesn't feel like that right now. And both are true. There's a gap inside there. Where's that gap? Well, sorry guys. Goes right back to the lead management because you know we're sitting there driving that opportunity.
We meaning the dealerships, your used car managers, your new car managers, your marketing teams, your GSMs, your GMs, your owners, they're all driving opportunity. And we just fumble in the ball when we get to the goal line about to score. We turn around and start punching each other in the mouth. So there's that problem. There's the challenge we're running into. And I had this, this was John and Ronaldo. I didn't tell about this backstage earlier. I was on the call with the dealer.
And he was like, Chris, man, we're pricing this inventory and and and it's it's back of what wholesale values are. And and we're we're we're what do we do? Your leads are starting to decline. Our sale rate's coming down. Well, did you ever consider the reason why it's back below wholesale markets?
Is because of the amount of leases that finally started maturing. What viewers and listeners hear me close on this. What we have not faced in the last six years, when you think of the average term of a lease, 39 months.
In twenty twenty, twenty one, and twenty two, we had a supply chain issue.
Your rental car companies weren't out buying these rigs. And for most of y'all that don't know, a lot of them will lease them. They're not buying the rigs in that 2021-22 because there were none available. It wasn't until late 2022 and 2023 when leasing ramped back up. So think about what's happening right now. You've got these.
Vehicles that were bought in 2023 that are now coming back into market from residuals from back in 23.
How different is our market, John, from twenty twenty-three to twenty twenty-six?
Economically, globally, locally, our markets are completely different now. They don't match with the residual from back in 23. So you wonder why these values are all over the place. There's a big contributing factor right there. I just did some research for a Subaru dealership.
With this Subaru dealership, I said it to them earlier this morning. With that same Subaru dealership, they're like, man, we do you know, Chris, what are the stats for Subaru? Well, here you go. In 2023, Subaru, new Subaru sold, was over 600,000, 632,000 is what was reported. The least penetration average at 20%.
That's a hundred and twenty-six thousand four hundred vehicles that are now coming back into the market thirty-nine months later from twenty twenty-three till now. How's that gonna impact?
Our go to market strategies. Doesn't it impact it significantly, John?
John Anderson (44:23)
Significantly.
Chris Keene (44:24)
And I'm just talking about Subaru.
John Anderson (44:25)
Yeah, see.
Right. Well, I
Renaldo Leonard (44:25)
Mm-hmm.
John Anderson (44:26)
mean, we talked about this before on here, Chris, right? The the number b at the beginning of the year, and I don't think it's changed, was by the end of twenty twenty six an influx of three hundred thousand return leases coming into the market.
Chris Keene (44:40)
What there's a hundred and twenty six thousand from Subaru. So I mean
John Anderson (44:44)
Right. So I mean it's a subs it
Renaldo Leonard (44:45)
Yeah.
John Anderson (44:47)
it's a sign a substantial number and it's a significant difference, no question.
Chris Keene (44:51)
So, I mean, it's for those responsible for the inventory, those of y'all listening responsible for the inventory, there's things that we we continue to fight to this day. Number one thing that we hear all the time: Ronaldo John, tell me if I'm wrong. Because, well, Chris, you're telling me to stock what I sell. Show me where I can buy it. Acquisition. Okay.
Renaldo Leonard (45:12)
Yeah.
Chris Keene (45:14)
So
I'm gonna steal a I'm gonna steal a terminology from Ford. Build for growth. And that's a terminology they use on the new car side to help build their allocation when they're doing their new car wholesale. Okay. I want you to consider this for a minute, viewers and listeners, and some stuff I pulled up prior to the show.
If
you're a Chrysler Dodge Jeep Ram dealer.
There is capability, and of course, this is an average because in different markets it's you know residuals can change, money factors or interest rate can change on these residual-based finance type loans.
But Jeep Grand Cherokee, Laredo Altitude 4x4, Ram 1500, Bighorn, Crew Cab two Wheel Drive, Wrangler.
Now, don't forget this important fact. People shop by price and they purchase by payment. And those three vehicles I just listed: $389 a month, $409 a month, $389 a month.
General Motors, Silverado, Sierra, Equinox.
Anywhere from two seventy nine to three seventy nine a month across those.
Ford, $399 a month to $499. Maverick, F-150 XLT, 4x4. Toyotas, $289, $229 a month. Honda, $229 a month. Hyundai's. Shit, you can lease a Kona SE for $99 a month. Mercedes-Benz for you Highline dealers that may be on here. A C300.
$439 month, a GLC $300, $449 a month. And every last one of these are on two to three year leases, maybe three and a half. So why am I talking about leasing and saying build for growth? And you're probably going, well, Chris, that doesn't fix the acquisition problem. You're right. In the now moment, it doesn't. But what would happen if you improved your leasing at your store?
And you start meeting the customers where they're at, where they're all squeezed economically. What if you started doing more leasing and you leased 15 vehicles this month? Well, in 36 months, there's 15 vehicles coming back to your dealership with the option for you to purchase the vehicle.
There's 15 vehicles you don't have to worry about. Because when we go to buy our core product to fill a gap, John, I know you did it when you were running that Crasher Jeep Dodge RAM store. And if you looked up and like, damn, we're out of Grand Cherokees. You jumped right on OVE, you jumped on every clothes sale, you went to the auction, you looked at the run list, and you went and paid.
To get that core product back in to fill a gap. And you gave whatever the market value was for it, but your cost of ownership was out of line because you had the plus plus plus with the buy fee, with the transportation, with the PSI. But if we would have just increased.
Our opportunity to see the vehicle back into us three years from now, and you continually to keep that cycle going, what do you have coming into your dealership every single month? Your core product that you don't have to go pay up for, that you don't have to have upside down and lobsided cost of ownerships. So, my my best advice I could give you guys, viewers and listeners.
Improve the penetration in your new car department with any and all residual-based financing type loans. Because you're doing your customer a great service by putting them in a position to beat negative equity.
You're putting yourself in a position to have that customer coming back to your service department for all their general maintenance. You're putting yourself in a better position to retain inventory that I promise you, 36 months from now, you're gonna need.
That helps solve. It's not the, it's not the silver bullet. It's not the 100% fix. But it's one thing you could do better today to help solve a problem of tomorrow.
Feedback gentlemen.
John Anderson (49:08)
think you're setting yourself up for long term success by doing that. So I think it's spot on. It's it you know, it's a part of that it's a part of that dial being dialed in.
Renaldo Leonard (49:18)
Mm-hmm. I and I have yet to find a negative of a dealership seeking to increase their penetration on lease deals off the used cars
Chris Keene (49:29)
Mm-hmm.
Renaldo Leonard (49:29)
or the new car side. And I think from the first time that we started having these conversations on the interwebs in this venue, I've always said lease is going to set you up for success.
Chris Keene (49:42)
Mm-hmm.
Renaldo Leonard (49:42)
Six ways
to Sunday. Six ways to Sunday. And it just takes care of so many issues, not only for the dealership and what you're trying to drive there, but also for your consumer and your prospects that is going to entrench them into you as a place that they go and do business. Think about all of the obstacles that
Chris Keene (50:02)
By the way, you improve C you you you improve CSI
too, Ronaldo.
Renaldo Leonard (50:07)
that's a byproduct. I
Chris Keene (50:09)
Ha ha ha.
Renaldo Leonard (50:11)
but it, you know, it's it and it's one of those things, just like all of the conversations that we have, there is a best practice for every issue that everybody comes up with. And and nobody's
Chris Keene (50:20)
Uh-huh.
Renaldo Leonard (50:21)
come up with a new problem that we've we haven't had a conversation around. Have you guys seen a new problem over the last six weeks for the first time? No. And what we're talking about today with leases.
Takes care of so many issues that dealers are facing and struggling with on a daily basis. So
Chris Keene (50:38)
Mm-hmm. Million percent. Mr. Anderson, anything in closing there?
John Anderson (50:42)
Yeah,
I do. I want to talk about I wanna hear real quick, dealers. if you're a manager and you're responsible for inventory, a couple things I wanna bounce off of you. I'm just asking you to give it some thought. look at your inventory realistically. How is it how is it what does my inventory of my zero to thirty day bucket look like versus my thirty one to sixty versus do I have inventory over sixty one day plus? And then if I'm high, if if
If if I'm high in my 61 day plus inventory and I'm specifically talking about this time of year, going this time of year where you got a ton of inventory out there, less shoppers, okay, what would be high? look at the percentage of your inventory sitting in your 61 day plus. If it's over 10%, it's too high. If it's over 10%, look at the inventory sitting in your 31 to 60. You want to if it's
Chris Keene (51:32)
Mm-hmm.
John Anderson (51:32)
if the 61 day plus is over 10 percent,
You want to manage the 61 the 31 to 60 day inventory down to 20% or less. Get that down there
Chris Keene (51:41)
Mm-hmm.
John Anderson (51:42)
and then and then start working into your zero to thirty day inventory to start selling cars and bringing more gross to the table. When you go when you look at the when you look at these cars, look at it from this perspective. Does it have a customer on it? If it's got a customer on it, stop. Let's exhaust every opportunity we can to set an appointment, get that customer in and sell them a car.
So that means that I've gotta I've gonna I may have to pick up the phone myself as a manager and call the customer. Yeah, that that's what that means. I may have to
Chris Keene (52:07)
John,
there is no May. We need more of that.
John Anderson (52:11)
Well,
you're right. But where I was where I was going with that, the reason why I said may, Chris, is first off, I want to have a conversation with that salesperson and go, what do you got going? Or get don't if you don't want to have a conversation, go into the CRM, look at the conversation between the salesperson and the customer. Right. Is
Chris Keene (52:26)
Yes.
John Anderson (52:26)
it is it quality? Is is the customer responding? If the customer's responding, let's get with the salesperson and try to help them get that appointment set. If the customer's not responding, then to your point, Chris, pick up the phone and call yourself, right? My
Chris Keene (52:39)
Yes.
John Anderson (52:40)
point is
Our point is if you got a customer on a car, stop. Don't keep changing the price because the customer's gonna wait you out. They're gonna see you're changing it every seven days, and that's why they're holding off on setting an appointment. They're waiting for you to get it to a price they want to pay. Stop doing that. If you got a customer on a call,
Renaldo Leonard (52:54)
long are gonna go?
John Anderson (52:56)
right, right. If you got a customer on a car, work the customer until the customer says, Okay, I'll set an appointment or leave me the hell alone. Don't call me again. Right. and I know I'm exaggerating there, but I'm really not exaggerating. Two.
If if I don't have a customer on a car, look at the merchandising. How do I how do I look on my website and third party photo wise and description wise? Don't go immediately do what we've always done and change the price. Hear what we're saying here, guys. Yes, we are saying this. The last thing you want to do is change the price. It's not always about changing the price. So I I'm just trying to
Renaldo Leonard (53:28)
Last resort, right?
John Anderson (53:29)
Right. And I'm just trying to because that's what we've always done and that's the race to the bottom, right? That shrinks our margins. So I'm just trying to give you guys
And and final thoughts here, some things that you can do if you're not already doing them that will help you, that will help you immediately. So manage your middle bucket inventory if you're too high in your age and you're 61 day plus. Manage that. Get it down to 20% and then
Chris Keene (53:52)
Uh-huh.
John Anderson (53:52)
start working your f start working your fresh inventory. Right. And then customer first. If the car doesn't have a customer on it, merchandising next. And then at the last, at the last thing, if we have to, change the price.
That's my final thoughts.
Renaldo Leonard (54:05)
So, okay,
John, let me let me ask you something. So in that in that middle bucket, and here's something that I had a I had a conversation about earlier this week. In that middle bucket, you got a vehicle that's between 31 days and let's say 45 days. Because 45 is the new, what is it, 60? Yeah.
Chris Keene (54:21)
Sixty. Mm-hmm.
Renaldo Leonard (54:23)
it's something that I I I mentioned, and it was almost like, yeah, the dealer I was having that conversation with.
They'd seem fire for the first time. If you come to that 45-day mark, you don't have a lead on a vehicle, and we have a strong, a hard stop on 45 days for that vehicle in inventory.
Chris Keene (54:41)
Uh-huh.
Renaldo Leonard (54:42)
Are we not going to have a better opportunity to avoid a huge wholesale loss if we get rid of that vehicle at 45 days?
Okay. I just you know me. I I want to validate how I'm thinking because I do think a little differently.
John Anderson (54:53)
One hundred percent. Right.
one hundred percent. Right. If I was sitting in if
Renaldo Leonard (54:57)
Okay. Yeah. What's the downside?
John Anderson (55:00)
I was still sitting in the chair and I had a vehicle that was in my middle bucket and and and maybe I had some leads on it, but we're not going anywhere with them, or maybe I don't have leads on it, right? I know I've I I've checked my merchandising, my photos are on point, my arrangements good, I've got good I've got good
description where I've got good s search terms in there. And so my merchandising's on point, then I'm gonna I'm gonna I'm gonna look at where we sell that vehicle at. If I'm above that, I'm gonna get it and and it again, here, if my average selling day is twenty-eight days and my average selling price to market is ninety-eight percent, but I got a forty-four-day old vehicle that I'm that
my my predictor w where I've typically sold like vehicles at is at 97%, but I'm at day 44. I got to be more aggressive than 97% because that my average sale day has already passed. That car's already gone past that. So the 97% that I've sold in an average of 28 days ain't gonna work anymore. I'm too late in the process. I got to get ahead of the market. So to your point, Ronaldo, I'm gonna figure out look,
What's the what do I feel like I can get at that thing at the sale? And I'm gonna cut to the chase and I'm gonna put it on there because I want to get a customer, I want to get F and I, and I wanna get a trade. And I don't want to send that thing to the auction. So I want to get rid of it and then I'll replace it with something that I sell better. But to your point, no, I yeah, I d I don't listen cut right to the chase and get the inventory moving. Now, for some of you guys, that's a hard decision, right? Because I got the boss screaming at me, we got to make thirty five hundred dollars a cop.
Well, listen, he entrusted you to be a used car manager or a general sales manager or a general manager. He entrusted you with that. And so some of these things you're gonna have to push back on. Cause the number one responsibility I've got, I can't let my inventory age. I I get it, boss. You won't make thirty five hundred dollars a copy, but this car's forty-four days old. It's gotta go. It's gotta find a home and I don't want to send it to auction. And those are some of those hard decisions. Look, are you gonna stand are you gonna stand on what you stand for?
As a as a manager in the car business, or are you gonna be excuse my terminology, are you gonna be a yes man? Yes mans don't win in this industry. Yes men don't win in this
Chris Keene (57:24)
Nope.
John Anderson (57:24)
industry. They don't. So that's my final thoughts, men.
Chris Keene (57:28)
Well, there we have it. There you go. I mean, we threw quite a bit of context out there. As always, you can hit the replay on this and watch it on YouTube. I highly, highly, highly, highly recommend that when you're on that YouTube and you get to our channel.
Make sure to save it. Make sure you set your alerts up so that way you don't miss an episode. Because I have a sneaky suspicion thinking about some things changing in the market the way they're changing, as fast as they've been changing, with the overwhelming amount of sales management and coaching and really just overall follow-up.
That we're seeing in the industry that could use a little bit of sharpening of the blade. I foresee in the very near future some very, very compelling experts when it comes to opportunity management, lead management, sales management, follow-up. I foresee some pretty cool guests coming on board here soon, and you don't want to miss out on that. So
Go to the Spotify, go to the YouTube, go to the the the podcast on your on your Apple device there, make sure to subscribe to it, make sure to like it, make sure you got your alert set up so you don't miss out. And make sure you go back into these episodes, peel out the pieces that apply to you, peel out the pieces that you love, reach out to us for the things that you hate, and we always invite you.
To be a part of the show. We always invite you to push back on us.
Renaldo Leonard (59:08)
Okay.
Chris Keene (59:09)
And we always invite you to reach out to us for any help that we could possibly give you. We are here for you. We love this industry and we want to continue to give back to it. On behalf of Mr. Anderson, Mr. Leonard, and all of our Lop Pop family, we thank you for tuning in. And as always, wishing you nothing but the most success. We out.