How Car Dealers Can Optimize Used Vehicle Inventory Performance

September 9, 2016

If you work at a car dealership in 2016, you’re in a good place. The most recent NADA Data Report says that “the past six years have been the longest period of new-vehicle sales growth since the 1920s,” and this year’s outlook shows the trend continuing.

Here are some of the milestones attached to that assessment:

  • Total dealership revenue across all stores in the US reached a new high of $862 billion in 2015, a 6.9 percent increase over 2014.
  • Franchised new-car dealerships sold more than 17.3 million new cars and light trucks.
  • Average selling price of a new car/light truck: $33,419 (2.5 percent increase over 2014)
  • Average selling price of cars from used vehicle inventory: $19,397 (2.9% increase over 2014)

Perhaps more exciting than growth for the auto industry is growth for local economies. Almost 150 new dealerships opened in the past year, and more than 1.1 million people were on a car dealership’s payroll. That’s a 4.3 percent increase over 2014. Dealerships employed 67 people on average last year.

These numbers are compelling, and they say good things about the health of the auto industry overall, but we know that dealers are always looking to do better. Where is the next big opportunity?

This line jumps out to us from the NADA report: “For the fifth straight year, net pretax profit at new-car dealerships as a percent of total sales was 2.2 percent.

If you operate a car dealership or dealer group, you should be asking yourself how you can optimize your used vehicle inventory performance and turnover. As with most of these questions, MAX Digital has your answer.

4 Ways MAX Digital is Improving Used Vehicle Inventory Management

Our regular readers will already know about the steps MAX Digital has taken to improve inventory management for car dealerships around the country. Let’s take a look at how our solutions can help you protect the profitability of your used car inventory.


Success for today’s dealerships is all about stocking the right cars. Our data-driven approach to inventory management helps you determine which cars you need to acquire.

You shouldn’t be buying cars to replace those you sold last month. You need to pay attention to the specifics. When you acquire based on the model, trim level, color, or option package that a customer is looking for, you’re more likely to improve your ROI and boost your margins.

Our used inventory management software sources real-time data from your market as well as your store’s historical data to help you identify the right cars.

Cost-to-Market Appraisal

You might know what the right cars are, but you don’t want to undercut your profits with a bad spread. MAX Digital offers an exclusive cost-to-market appraisal tool that helps you close trade-ins at the best ratio for your dealership.

Appraisal tools and software are also crucial to making your acquisition process more efficient. Our platform lets you perform more accurate appraisals and more appraisals in general, giving you a wider selection of cars to bolster your used inventory. This ensures more of the right cars end up on your lot for your customers to see.

Check out our previous post for an extended look at our cost-to-market appraisal tool and why it matters to your dealership.


Once you have the right cars in hand, you need to find a balance in pricing that will protect your profitability while also attracting buyers. Once again, the tools MAX Digital gives you will source data from your market to give you an answer. We look at the car’s original MSRP, the value of any options and upgrades, and the current market average to help you name a fair price.

The added benefit of using our software is that you and your sales team gain a clearer picture of your overall pricing strategy, which helps your employees stop the drop and eliminate double discounting.

Merchandising and Sales

Finally, the MAX Digital platform lets you merchandise your used inventory more effectively. We help you build out your inventory listings, giving you simple methods to update and manage your website with vehicle photos and real-time pricing. Build vehicle detail pages every bit as robust as those for your new car inventory, with a full list of highlighted features and vehicle history reporting.

The MAX Digital Showroom gives your sales team access to all of this information on the showroom floor, so they can be a walking product expert for any customer that comes in and asks about a car. With more data in the palm of your hand, you’ll be able to close the deals that matter, extend your reach, and grow your business.

MAX Digital Gives You a Leg Up in the Used Auto Market

After years of working in the auto dealer industry, our team has designed and developed tools that can help you streamline processes at your dealership and increase your profit margins. In a time when overall industry growth is so healthy, you need every advantage you can get to gain an edge on your competitors.

The MAX Digital platform is a powerful set of tools that we hope will help you improve the performance of your used vehicle inventory. If you would like to see a demonstration of our software, or if you have other questions about our solutions, don’t hesitate to get in touch with us.