What does it cost a dealer when a car sits in stock?
Every day a car stays unsold costs money even if nobody notices it: the cash or stocking finance tied up in it, the value it loses as it ages, and the space and advertising it uses. Work it out per car per day, with your own figures, and compare it with the price cut that would sell the car. A car that has been in stock for 90 days has often cost more in holding than the reduction the dealer refused to make in week three.
Where the cost comes from
- Money tied up. If the car is on stocking finance, you pay interest every day. If it was bought with your own cash, that cash cannot buy the next car, which is a cost too.
- Falling value. Used cars lose value with time and mileage, and a car that has been advertised for months also loses appeal: buyers notice the date and assume something is wrong.
- Advertising and listing costs that keep running while the car is listed.
- Space. A forecourt or showroom space taken by a slow car is a space a faster car cannot use.
- Attention. Slow cars get washed, moved, re-photographed and discussed again and again.
A worked example
Take a car bought for €15,000 on stocking finance at 8% a year. Interest alone is €15,000 × 8% ÷ 365 = about €3.29 a day, roughly €99 a month. Assume the car's market value falls by 1.5% a month: €225 a month, about €7.40 a day. Before advertising and space, that car costs around €10.70 a day, or about €324 a month, just to keep.
Those rates are assumptions for the example. Use your own finance rate and look at how prices for that model have moved, but do the sum. At around €324 a month, a €500 reduction in the first month is cheaper than holding the car for another two.
What to watch every week
- Days in stock for every car, counted from the day you bought it, not from the day the advert went live.
- Which cars are past your own limit, for example 45 or 60 days.
- Enquiries per car. A car with views and no enquiries usually has a price or photo problem; a car with enquiries and no sale usually has a follow-up problem.
- The real margin left after preparation costs, VAT and holding cost, so a price cut is judged against what is actually left.
What to do about a slow car
- Check the listing first: price against similar cars, number and quality of photos, and whether the description answers the obvious questions.
- Re-check the enquiries the car already had. Someone who asked about it three weeks ago is the cheapest buyer to win back.
- Reduce the price in clear steps rather than small nudges that nobody notices.
- Put it in front of new buyers: catalogue ads, social posts, a mention to customers looking for that type of car.
- Decide in advance when a car goes to trade or auction instead of sitting for another month.
How 10X Dealership shows it
In 10X Dealership every car shows how many days it has been in stock, counted from the purchase date, on the vehicle card and in the stock list, and the dashboard shows the cars that have been in stock too long. Costs are recorded against each car, and profit is shown after VAT, so the effect of a price change on what is actually left is visible before you make it. Enquiries are attached to the car, so a slow car's interest, or lack of it, is on the same screen.
Related questions
How long should a used car stay in stock?
There is no single right number; it depends on the car and your margin. Set your own limit, such as 45 or 60 days, count from the purchase date, and review every car that passes it.
Is it better to reduce the price or wait for the right buyer?
Work out what waiting costs per month and compare it with the reduction. When the holding cost of another month or two is more than the reduction, the reduction is usually the cheaper choice.
Should days in stock count from the purchase date or the advert date?
From the purchase date. The money is tied up from the day you buy the car, whether or not it is advertised yet.
