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Old 02-02-2017, 01:46 PM   #2
mryan55
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Join Date: Mar 2013
Posts: 595
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These are just some quick thoughts since I don't have much time right now. I can definitely respect wanting to go out and do your own thing. I have been at that stage a few times in my career and even did give it a try for a while.

I am not sure what part of the country you call home, but in my area the overhead for renting a place much smaller than your plan details would be prohibitive if you have this size inventory and gross $1,000 PUVR. Figure at an average of $1,000 gross per unit retailed and a 60 day turn rate on a 40 car inventory, and you might only gross $20,000 in a month. Obviously it's hard to guess what expenses might be like in your case, but it's walking a tightrope. Unless you get repeat customers coming back for customer pay service, you can't really consider a customer-facing service department, and doing the reconditioning in-house would be difficult, especially at $20,000/mo gross.

$3,000 cars break down. Some people will get upset. You might end up spending money to fix a car after the fact. It's good to do right by the customer, but I have lived through struggles of a 30-40 unit used car department in a new car store that struggled with turn and gross on an average cost of $15,000.

I think that the best approach would be to very, very frugal. Maybe even start out smaller. Hard telling. Used "B" lots aren't really my specialty, so hope others will chime in.
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