A Quick Clarifier on How To Think About “Bronze” Vehicles

I appreciated a dealership GM’s comment the other day that he views Bronze vehicles as the equivalent of vanilla ice cream. That is, like vanilla ice cream, Bronze cars are common, available from any dealer, just as vanilla ice cream’s available at any reputable ice cream shop.

But as I noted to the GM, the comparison between vanilla ice cream and Bronze vehicles only tells part of the story. It’s not necessarily reflective of the reasons a vehicle receives a Bronze designation in ProfitTime GPS.

A quick refresher: Like all the precious metal categories in ProfitTime GPS, the Bronze designation reflects a vehicle’s investment potential. This potential is shaped in part by the overall supply of a vehicle in a local market. If a vehicle’s got a high Market Days Supply, which indicates there are plenty of them out there in the market, it could be a Bronze vehicle.

But the availability of a vehicle in a market, or its Market Days Supply, is only one factor that determines a vehicle’s investment potential. To calculate a vehicle’s investment potential, ProfitTime GPS system weighs a vehicle’s Market Days Supply, Cost to Market and retail sales volume, along with a host of other factors.

Therefore, you could have a high Market Days Supply vehicle that, because you own it really right and it’s a fast-mover in the market, earns a Platinum or Gold designation, indicating a higher investment return potential. On the flip side, you could also have a low Market Days Supply vehicle that’s a fast-mover that you own for too much money, making it Bronze, despite the fact that it’s a high-demand, low-supply unit.

To reiterate, a vehicle’s investment potential isn’t solely driven by the fact that it’s effectively available at any dealership in your market. This distinction isn’t lost on dealers and managers who regard their vehicles as investments rather than viewing them as merchandise.

To his credit, the GM fully understands that handling or treating Bronze vehicles, once you own them, is somewhat like eating ice cream—the faster you move them, the less likely you’ll experience the dissatisfaction of seeing your profit potential melt away.

The post A Quick Clarifier on How To Think About “Bronze” Vehicles appeared first on Dale Pollak.