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Strategies & Market Trends : The Financial Collapse of 2001 Unwinding -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (7843)	8/19/2021 9:47:37 AM
From: robert b furman	Respond to of 13807

Hi El, I have no doubt the big winners will be those banks and finance arms that underwrote leases. There is no doubt that the residuals of terminating leases will lead to thousands per vehicle when turned in and disposed of at the auctions. If it was my call, I'd accelerate every lease return and turn it into cash quickly. The market may keep strong, but it will never be better than we're seeing today! Our new vehicle department is crippled with low inventory. Our nonexistent floor plan expense does help offset the lack of gross profit (which is very high on a per unit basis, but low on an accumulated basis). The floor plan credit that is built into the base model cost becomes a new revenue stream. Probably adds 800.to 1000 when a truck is sold just as the carrier delivers it. That being said most new vehicle departments are losing money YTD. The used vehicle departments are making the money. Sell the new to get the trade and both move fast. Buying used vehicles is very hard to find and buy. The delay in chips is expected to be over by this Quarter. That's what I've heard from GM and Ford both. Certainly operating in never before seen times, excepting the WWII production halts. An inventory replenishment appears to now take well into 2022. Northern dealers usually get their reduced winter inventories in September and October, then southern dealers November to December. Those normal shipments happen with a standard 60 to 90 days already on the ground. Since February our Chrysler dealership has seen a 25 units inventory at the start of the month and that same level or lower at the next month. monthly average YTD is 23, with June's sales dropping to 14 - complete lack of new inventory (3/4 and one ton Trucks Ram truck is our staple) Normally it is a new car dealers goal to have used units sales equal new unit sales. Tha requires some off the street or auction purchases. To show you how our of the norm this market is: our used vehicle YTD sales have been 33 a month - a very strong 143% greater than new vehicle unit sales. We have 2 new cars in stock and 21 trucks with used levels at 6 cars and 27 trucks. Our service department is busy fixing every trade we get into retail quality used vehicles. Those with newer used vehicles are busy taking care of the vehicle as it is a very pricey thing to buy new. The factories know they don't need rebates to sell the inventory! Good to hear from you EL! Bob