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Used Cars: Simple guide to keeping all your staff focused on cash flow

Jeff SmithJeff Smith
Author of The KPI Book
Insight Training & Development Ltd
web site:
Telephone 01384 371432



Many used vehicle programmes fail to take the peaks and troughs of seasonality and depreciation into account.

They work on a ‘one size fits all basis’ and the industry just does not work like that. Here is a very simple shortlist of things you can do with your used vehicles to keep everyone focused on cash flow.

  1. Have your finance companies paid out on all of your finance documents; better still, do you get them paid out prior to handover?
  2. Have all of your customers paid their deposits and all outstanding amounts; better still, do you get them paid out prior to handover?
  3. If you have underwritten any part- exchanges within the trade, have you contacted the traders to notify them to collect their vehicles? Don’t allow trade vehicles to hang around for days on end.
  4. If you are sending vehicles to auction make sure you have all the information necessary so there are no delays.
  5. Do you have all of the V5Cs and other documentation in your possession for all the part-exchanges you have taken in?
  6. Take a look at your used vehicle stock list; is every vehicle ready for sale or, at the very least, booked into the workshop and valeting bay?
  7. Review your used vehicle advertising for this week. Have you included all of your recent part-exchange stock and is everything priced correctly?
  8. Have you updated your website with all of the recent part-exchanges?
  9. Are all of your prices consistent across all media – it is a legal offence to have differing prices.
  10. Review your used vehicle ‘wanted list’ with each of your salespeople cross-referencing your used vehicle stock.
  11. Remember, the law states: “A vehicle must be legal and roadworthy before it is offered for sale.”
  12. Don’t be tempted under any circumstances to offer any of your part- exchanges ’for sale’ until they have been into the workshop and you know that they are legal and roadworthy; it is against the law. Take care because ‘awaiting preparation’ stickers fixed on the vehicle will not protect you.
  13. Walk round your used vehicle display area every single day. Is it neat and tidy, is everything priced correctly, do you have a good enough product mix and is there enough circulation space around each vehicle for the customers to inspect them adequately? 

Profitability is all very important but most businesses do not go bust because they run out of profit, they go bust because they run out of cash.

The checklist will help you to focus on cash that is due to you and focus your mind on getting your part-exchanges out on the front and ready to sell so that you speed up the time from when they land in stock to the point of sale.


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