The 55 terms used car managers, GMs, and dealer principals use every day, defined in plain language. From aged unit to water unit, days supply to T1/T2/T3 stocking. Built for dealers, by Lotpop.
The wholesale value of a vehicle, typically used to evaluate trade-ins. ACV is what the unit would bring at auction today, not the appraised retail value. Most dealers anchor trade allowances to ACV plus a fixed reconditioning estimate.
A used vehicle that has been in inventory past the dealership's aging threshold, typically 60 days. Aged units burn floorplan interest, depreciation, and lot space. Reducing aged inventory is one of the highest-leverage activities at any dealership.
A segment of inventory grouped by days in stock. Standard buckets are 0 to 15, 16 to 30, 31 to 45, 46 to 60, and 61 plus. Watching how units flow between buckets is the earliest signal that something is stuck.
A weekly or daily report of every unit approaching the aging threshold, typically units 30 to 45 days old. The at-risk list catches problems early so the cleanup is a $500 reprice instead of a $2,500 wholesale write-down.
The gross profit from F&I products like financing, warranties, GAP, and service contracts. Back gross is sometimes the difference between a breakeven deal and a profitable one, especially on a thin front gross.
The discipline of managing inventory by aging bucket rather than as a single pile. Each bucket gets its own action set, from fresh merchandising at 0 to 15 days to wholesale decisions at 60 plus.
Vehicle history reports that show title issues, accidents, service records, and prior ownership. Most retail buyers expect a clean report posted directly on the VDP, and missing one is a top reason listings underperform.
The daily cost of holding a unit in inventory, including floorplan interest, insurance, lot maintenance, and depreciation. A typical used car carries around $12 to $20 per day. On a 45-car lot at 80 days supply, that is roughly $20,000 per month.
A ratio comparing your acquisition cost to the average retail price of comparable units in your market. Cost-to-market under 85% gives you margin room. Above 95% means you bought the unit too expensive to retail profitably.
A used vehicle certified by the manufacturer or dealer after passing a multi-point inspection. CPO units typically command $1,500 to $2,500 more in gross and turn faster than uncertified comps because they include a warranty.
The number of days it would take to sell every car on your lot at your current sales pace. Formula: total units in inventory divided by average daily sales. The industry target is 30 to 45 days, and segmenting by body style and price band is where the real signal lives. Full guide to days supply.
The core software system that runs the dealership's accounting, F&I, parts, service, and sales records. Common DMS providers include CDK, Reynolds, Dealertrack, and Tekion. Your DMS is the source of truth for cost, deal jacket, and accounting.
The process of identifying current customers whose vehicle has built up positive equity, then proactively offering to trade them up. Equity mining typically produces high-quality trade-ins for the used lot and conquest sales on the new side.
The line of credit a dealer uses to finance inventory. Floorplan providers like NextGear, Westlake, and Ally charge daily interest, which is why aged inventory hurts so much. Every day a car sits is another day of floorplan interest leaking out.
Industry slang for newly stocked inventory, typically units less than 15 days old. Fresh air sells faster and at higher gross than aged metal, which is why dealers chase consistent acquisition velocity.
The gross profit from the sale of the vehicle itself, before F&I products. Front gross equals retail price minus cost minus pack. Healthy used car front gross runs $1,800 to $2,500 per unit retailed.
A used vehicle that has completed reconditioning, photography, and merchandising and is ready to retail. The time from acquisition to front-line ready is called recon time, and most top dealers target 5 to 7 days.
Total gross profit (front plus back) divided by the number of retail units sold. PVR is the cleanest single metric for retail profitability. The industry average is around $4,000 to $4,500 combined on used.
On the new car side, a fixed percentage of MSRP that the OEM rebates to the dealer after the sale. On the used side, the term is sometimes loosely used to describe expected wholesale margin, but technically only applies to franchise relationships.
The total cost of owning a unit until it sells, including floorplan interest, depreciation, insurance, recon, and lot maintenance. Holding cost compounds daily, which is why the highest-margin used car operations push hard on speed of sale.
A daily or weekly list of units the sales floor should push hard. The hot sheet typically combines aged units, units with target gross, and units flagged as high-demand for the market that week.
The composition of your inventory across body styles, price bands, model years, and condition tiers. A balanced mix matches your market's demand by segment. An unbalanced mix is the leading cause of aged inventory.
The speed at which units move from acquisition to sold, measured in days. Velocity is the practical sibling of turn rate. Faster velocity equals lower holding cost and more inventory turns per year.
A widely used valuation source for retail and trade values. KBB is one of three common anchor sources for vehicle valuation alongside NADA and Manheim Market Report (MMR).
A structured physical or digital walk-through of the used car inventory, typically led by the used car manager. The lot walk surfaces aging concerns, merchandising gaps, and price decisions. It is also the namesake of LotWalk by Lotpop, our flagship dealership performance platform.
A wholesale valuation source published by Manheim auctions, widely treated as the industry benchmark for wholesale value. Buyers and wholesalers anchor bids to MMR plus or minus a percentage based on condition.
The estimated days supply of comparable units across your market area, not just your lot. MDS tells you whether your local market is overstocked, balanced, or thin on a given segment. Most pricing tools surface MDS at the VIN level.
Pricing a unit relative to comparable listings in your market rather than relative to your cost. Market-based pricing is the standard for online retail because the buyer is comparing your unit to five others before they ever pick up the phone.
Everything that makes a unit show well online: photos, video, description, equipment list, reason-to-buy line, and price. Strong merchandising can outperform a price cut, especially on aged inventory.
A valuation source from the National Automobile Dealers Association. NADA is sometimes preferred over KBB for trade evaluations because lender funding amounts are often tied to NADA values.
A fixed amount the dealership adds to vehicle cost for accounting purposes, typically to cover overhead and reconditioning. Pack reduces the front gross that sales sees on the deal sheet, even though the dealership still earns it.
A ratio comparing your asking price to the average retail price of comparable units. A 100% price-to-market means you are priced at the market average. Above 100% means the phone stops ringing.
The work done to a used vehicle before it can be retailed: mechanical repairs, detail, body work, and safety inspection. Recon cost is added to the unit's total cost and directly impacts front gross.
The number of days from acquisition to front-line ready. Top operators target 5 to 7 days. Recon time is one of the biggest hidden levers in used car gross because every day in recon is a day of lost selling opportunity.
The regular schedule on which inventory is reviewed and repriced. Best practice is weekly for the full lot and daily for units approaching the aging threshold. Full guide on repricing cadence.
The running tally of units sold in a given period, broken down by salesperson, gross, days to sell, and source. The sold list is the input to most weekly inventory meetings and the basis for stocking decisions.
The activity of acquiring used inventory. Top-performing stores source 50 to 70 percent from trade-ins, with the balance from auction, off-lease, and street purchases. The mix depends on your market and trade volume.
The subprime side of F&I, serving customers with credit challenges. Special finance often requires specific inventory (older, lower-priced units) and dedicated lender relationships. Done well, it can be a meaningful gross center.
Delivering a vehicle to the customer before financing has been fully approved by a lender, on the assumption that the deal will get bought. Spot delivery accelerates sales but creates risk if the deal needs to be unwound.
A written, segment-level plan for what to acquire each week based on days supply, sold history, and target mix. The stocking plan goes to the auction buyer, the trade evaluators, and the wholesale callers so everyone is buying to the same blueprint. Full stocking strategy guide.
A tiered stocking model that classifies inventory by margin and turn expectation. T1 units are highest velocity, T2 are bread-and-butter, and T3 are higher-margin specialty units. The mix is intentional, with weekly stocking pulled across all three tiers.
The expected time between vehicle purchases for a given customer, typically 3 to 5 years. Trade cycle data drives equity mining and retention outreach, especially in service drives.
A structured evaluation of a customer's trade-in, including condition assessment, MMR check, and reconditioning estimate. The trade walk is where most over-allowances happen, which is why a defined process saves real money.
The number of times a dealership sells through its average used inventory in a year. A strong benchmark is 12 to 15 annual turns. Top operators on LotWalk average 22. Full guide on calculating turn rate.
The person responsible for the used car department's performance: stocking, pricing, aging, gross, and merchandising. A strong UCM is the single biggest variable in used car profitability at most rooftops.
A unit whose cost exceeds its current market value, often because the trade allowance was too generous or the market dropped. Underwater units almost always require a wholesale exit. The math rarely works out for retail.
The detailed listing page for a specific vehicle on the dealership website. VDP views are the leading indicator of online interest. Low VDP views on a fresh unit almost always means weak photos, price, or both.
A general term for a report covering a vehicle's title, accident, and service history. Carfax and AutoCheck are the two dominant providers. A clean, posted VHR is now table stakes for online used car retail.
The salesperson-led tour of a vehicle's features and condition during a customer interaction. A strong walk around shifts the buyer's focus from price to value and is the single highest-leverage habit in the showroom.
Dealer slang for an underwater unit. A water unit is one that is going to lose money no matter how it is retailed, usually because of an over-allowance on a trade. The fix is almost always a fast wholesale exit, not a slow retail bleed.
Selling a used vehicle to another dealer, a wholesaler, or at auction rather than retailing it to a consumer. Wholesale is the standard exit for aged units, water units, and inventory that does not fit the store's retail profile.
A live auction lane where used vehicles are sold from one dealer to another. Manheim and ADESA are the two largest wholesale lane operators in the US, with online equivalents like OVE and Auction Edge.
The breakdown of inventory across model years. A balanced year-model mix protects against depreciation cliffs and gives buyers options at multiple price points. Heavy concentration in one model year is a common stocking trap.
Built and ran used car operations before moving into training. Co-hosts the LotTalk podcast and runs weekly 1-on-1 coaching with used car managers across the Lotpop client base. The glossary above is built from the language he hears on dealer calls every week.
More from the Lotpop team →LotWalk is the dealership performance platform built around the daily disciplines in this glossary. Aged inventory alerts, days supply by segment, weekly meeting cadence, and a dedicated coach who works the numbers alongside your team.
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