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Drive to Success: The Growing Gap of Margin Compression

by Lindsay Lauck
on October 1, 2018

Have a leaky faucet? There’s an easy fix for that. Fighting margin compression? Well, that’s another story. The problem of combating margin compression at your auto dealership is more like closing an ever-present gap that continues to grow. Selling more cars, having the best sales team on the block, and beating the competition might be within your toolkit, but that can only get you so far. It’s a big enough issue that it’s leveling the playing field. Thought leaders from around the industry are weighing in with advice—that you can implement today—so you can stay ahead. Read on:

1 – Dealer’s Dilemma: Glut of current year’s cars as next year’s models hit lots

Automotive News: Inventory glut, misplaced optimism, and the lingering effects of the recession a decade ago have created a growing imbalance between American automakers and the dealerships who sell their products.

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2 – Turn Rate: Is Your Inventory Invisible?

Digital Dealer: Do your incoming auction and trade-in vehicles remain unseen and invisible? On average, each car that sits on your lot costs the dealership $40 per day. And, in many cases it can take beyond two weeks for these cars to hit the market.

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3 – 3 Ways to Minimize Discounts and Improve Front-End Margins

VAuto: There’s a troubling trend at your dealership. While gross profits are staying static, front-end gross profit averages aren’t keeping up. Here are three things you can do to shift the balance.

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4 – 3 Best Practices to Beat Back Used-Vehicle Margin Compression

Auto Remarketing: The solution to margin compression isn’t going to be quick and easy. However, there are practical best-practices your dealership can follow to overcome what has become a growing issue for auto dealers everywhere.

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5 – 3 Must-Dos to Combat Dealer Margin Declines

Digital Dealer: Dealers who believe they can retail their way to improved profits are probably kidding themselves. There has to be a better way forward that doesn’t simply rely on selling more cars to make more money. And, you can’t just cut costs at every corner until you begin to make a profit.

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Check back next week for more Drive to Success.

 

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