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Tag Archive: Auto Inventory

NCM Institute

#AskNCM: What’s the connection between low gross profits and aged inventory?

NCM expert, Robin Cunningham, explains the connection between reduced profits and aged inventory and how above-market used vehicle pricing leads to invisibility online.

Internet pricing isn’t a race to the bottom, Robin says, but a tool to help you move inventory faster. See how: 

Can you sell a used vehicle in fewer than 30 days? Discover more solutions for aged used vehicle inventory issues.

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Lee Michaelson

What do I do with today’s bucket jumpers?


Bucket jumpers—vehicles that reach 16, 31 or 43 days in inventory—pose a huge strain on your dealership. Make certain your bucket jumpers get all the attention required to reduce inventory aging issues and improve turn.

Investigate the vehicle

A vehicle becomes a bucket jumper by sitting too long in your inventory. The first thing you need to do is check on how much interest the vehicle is generating on the internet.

Prior to the stock walk process, analyze how much prospect activity garnered attention on each vehicle. Here’s what I suggest you evaluate:

  1. The number of times the vehicle appeared on a search results page (SRP)
  2. How often prospects clicked through to the vehicle details page (VDP)
  3. The vehicle’s VDP conversion percentage (Divide VDP by SRP)
  4. Confirm the number of inbound phone calls received on each vehicle
  5. Check the number of emails received requesting information for each

Once you have a sense of how much interest the bucket jumper has generated, inspect it in person:

  1. Open all of the doors, the hood and the trunk; identify any issues that require correction.
  2. Start the vehicle. Does it operate properly? Check all systems such as climate, navigation and audio. Open the sunroof, and make certain the windows, locks and seats are in proper working order.
  3. Inspect the exterior for problems that require correction.
  4. Determine if the vehicle needs detailed again.
  5. Keep a list of the vehicles you identify that need additional reconditioning, and make certain the reconditioning is completed in a timely manner.

Involve your staff

The most important question about a bucket jumper is: Why haven’t we sold it? Ask your staff how many opportunities you’ve had on lingering inventory and how many of those opportunities went on a demonstration drive. Get their feedback about the vehicles, especially any comments they remember from customers.

Once you’ve gathered all the information—how much interest the car is generating, its condition and how many people have seen or test driven the car—it’s time to implement your action plan.

Address the problems

Typically, there are three possible resolutions to the bucket jumper problem. The vehicle needs additional reconditioning—arrange for the repairs immediately or wholesale the unit. The vehicle is priced too high—keep it, but adjust the price immediately. It’s not a good vehicle for retail—wholesale the vehicle and redeploy the cash.

Selling the bucket jumper list

Be aware that the decision to keep a bucket jumper means a commitment to more work. Not only will you likely need to adjust its price, but you’ll need to evaluate its marketing and merchandising. Once these are addressed, you should see movement; if not, it’s time to reevaluate.

Are the bucket jumpers in your inventory slowing your sales? Share your experiences below. 

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Dennis Kane

When it Rains it Pours and Sometimes Causes Flood Damage

Guest contributor Dennis Kane offers Up To Speed readers insights into the complexities of flood insurance for their dealerships. Dennis is the president of SeaFire Insurance Services, which provides exclusive property and casualty solutions to the auto industry.   

storm, flooding, insuranceDespite the notorious drought plaguing the Midwest, there has been a recent trend of frequency and severity in hail and flood losses.  This makes insuring auto inventory very challenging. Many car dealers are seeing increasing hail and flood deductibles and in some cases, insurers have introduced flood exclusions for the first time.

Most insurance companies use outside vendors to evaluate flood exposure to your auto inventory. These outside vendor services have improved their capabilities over the years and are providing the underwriters better and better information to evaluate the exposures to flood.

One fundamental factor that goes into the risk equation is the flood zone assessment.  It is critical to understand that this risk IS NOT based solely on the street address of your dealership.  The more important and dispositive factor is the position of auto inventory relative to flood zones.  In other words, while a dealership itself may not reside within a flood zone; sections of the parking lot where the auto inventory is parked may  exist within a flood zone.  When this situation arises many insurance companies are issuing flood exclusions and transferring the risks of loss to your balance sheet. Even if the insurance company is willing to accept the risk with a deductible the loss to the dealership in the event of flooding can be significant.

Here’s what you should do:

  • Ask your agent to review the flood report including overlaying the flood zones to all of your dealership properties, premises and operations.  If any part of your dealership is in a flood zone, you need to take precautions to eliminate or minimize flood exposure. Your insurance agent should be able to make recommendations.
  • If you are developing an evacuation plan, review the alternative locations exposure to flood with your insurance agent to ensure that location isn’t exposed to flood.
  • If you are considering acquiring a dealership or additional property review the flood reports prior to closing.

Here’s what you should know:

It is critical that property owners do not abandon flood considerations after a loan closing. Flood plains are frequently reevaluated to reflect evolving climate changes and man-made influences.  Failure to continually re-assess zone designations is a dangerous game.  A business that exists in a minimal flood zone at the time of closing could find itself located in significant flood zone several years later — without having moved an inch — and as a result insurance may no longer respond because the policy has a flood exclusion for autos.

By all accounts finding competitive inventory coverage is getting more challenging. I would expect this trend to continue.  As a dealer, you should take the time to educate yourself about your potential exposures so there are no surprises come renewal time – or when it rains.

How are you educating yourself about your potential exposures?  Do you talk with other dealers on a regular basis about how they’re handling similar issues in their stores?  Members of NCM Associates‘ many independent, franchised, and Buy Here, Pay Here 20 Groups enjoy the benefit of discussing these types of operational issues with their group peers.  Learn more at or call us at 877.803.3631.

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