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to buy vehicles that don't need new tires. "The cost of tires, rubber, has gone up … so much that it's a factor in buying a car or not. When we look at them online, we look at the tread depth, and if it's too skinny you've got to add money to the car [for recon] or you just don't buy it." To supplement the cars he buys at auction, he also keeps as many trades as he can, but said he doesn't get many (something he attributed to being an in- dependent dealer). The trades he keeps typically go to his "budget lot," which houses cars that retail for up to $5,000. About 20 percent of the vehicles on the budget lot are trades. His other two lots stock vehicles that retail in the $5,000 to $30,000 range, and he shared some insight into what's performing well. "The crossover section has been particularly strong, the Aca- dias and Enclaves … That's probably the hottest market right now. Surprisingly, even with the high gas prices, we're selling an awful lot of … H2 Hummers and trucks with Hemis … It baffles me because nationally, it's looking like small cars are everything. Maybe it's our Midwest area." Keeping an Eye on the Bigger Picture At Grogan's Towne Chrysler Jeep Dodge in Toledo, Ohio, the store might sell a used vehicle and only gross $200 on the front end, and Marc Ray (partner and general sales manager) is OK with that. He explained that front-end gross isn't the end-all, be-all number to look at. "I'm going to finance it. I'm going to service it. I'm going to get a trade-in. I'm looking at how much money I'm making per transaction. … I do $750 in finance. I make $300 or $400 in [inter- nal] service [work]. I get a $250 doc fee. I get a customer back in my service department, for life, hopefully. Then, I take in a nice trade-in … and that's the one that I make the money on." While he'll accept a lower front-end gross from time to time, it's not a regular occurrence. On the occasions it happens, though, Ray doesn't stress about it. He takes a bigger-picture approach and focuses on inventory turn. "You've just got to make decisions quick … and move on," he said. As of mid-May, the dealership was on a 28-day inventory turn, which means the dealership will turn its inventory more than 12 times in 2012, provided it maintains that average. The dealership does gross less per vehicle than before Ray adopted this new philosophy, but the dealership easily makes up for it (and then some) by selling a lot more cars than it did in the past. He said gross per vehicle is down by about one-third, but the store is selling 300 percent more vehicles. Even still, his grosses are nothing to blink at; the year-to-date average total gross (front- and back-end) per used vehicle retailed at Grogan's Towne Chrysler Jeep Dodge is between $1,800 and $2,000. NADA Data's March 2012 Dealership Financial Profile revealed that dealers are averaging $2,180 per used vehicle retailed in gross profit. While he said some dealers may think his strategy is nuts, the bigger-picture approach Ray adheres to is paying off very well—and not just in the used-car department. Granted, the dealership has had a couple of record-breaking months this year in the used-car de- partment; however, internal service work and parts sales have jumped as a natural result of stocking and selling more used cars. Getting back to inventory acquisition, he said, "There are so many different things we've tried and so many different things that you can do." He acquires the bulk of the store's inventory via online auctions. "We've averaged about 75 purchases a month for the last 12 months … and a couple months, [my buyer] purchased 100." He conceded, "I understand everybody's complaints when they're talking about [having trouble] getting inventory, and we've found some ways to acquire inventory and still be able to turn it." He's one of many dealers who swear by vAuto and recently began using the company's Provision tool to help with acquisition. The tool assigns a letter grade (A, B, C, D or F) to each car in the dealership's market based on demand, interest, volume in market, market day's 31 supply, profitability, availability, and the dealership's past experience with the car. Ray targets vehicles by letter grade. For example, he tells his buyer to only look at vehicles with a grade of B- or better. Once his buyer started buying only those vehicles, the dealership's inventory became much more popular on AutoTrader.com, with cars turning up on more searches and getting more click-throughs to vehicle-detail pages. The real kicker is he also saw an increase in sales as a result. The store is selling about 150 used vehicles a month, and he hopes to continue to grow that and claim the top spot in his market for used vehicle sales. He said, "We're number two in the city of Toledo now." The number- one dealership sold 230 used vehicles in April 2012 to Grogan's Towne's 148. Prior to adopting its current inventory management strategy in early 2011, the top store outsold Grogan's Towne four to one. Now the spread is much closer (around 1.5 to one), and he's made it a goal to claim the top spot. "I'm going to catch those guys." With so many vehicles coming in, it's a challenge to stay organized. He keeps everything straight by tagging keys with three different-colored zip-strips, each signifying a different part of the intake process (one for photos, one for service and one for detail). Once a car has been through each phase of the process, the corresponding tag is cut from the key ring. Ray explained, "Any time I look at my keys, I can see what needs done on a car." In most cases, the process of getting vehicles front-line ready takes four or five days. Much of the work is done in-house, but he'll send out 20 to 30 vehicles a week for detailing to ensure cars are not sitting on the lot waiting if the detail department gets overloaded.