Dealership Days' Supply: Formula and Benchmarks
Days' supply is how many days your current inventory would last at your current selling pace. For a franchised store, about 45 days of new and 30 days of used is healthy (Pocket20 benchmark).
The formula
Days' supply = units in stock ÷ (units sold in the period ÷ days in the period)
Use a trailing pace, such as the last 30 or 90 days, not a single slow or busy week.
Example (hypothetical round numbers): 150 new units in stock, 100 new units retailed in the last 30 days. Daily pace is 100 ÷ 30 = 3.33 units. Days' supply is 150 ÷ 3.33 = 45 days.
Benchmarks
New: about 45 days is healthy (roughly 8 turns a year). 30 to 60 days is the healthy range. Above about 60 is heavy (Pocket20 benchmark). Brand and season matter, so read it against your own trailing pace.
Used: 30 days (12 turns a year), and no used units over 60 days (Pocket20 benchmark). Hunt aged dollars in the 60-plus and 90-plus buckets.
Why it matters
Carrying cost. Every day a unit sits, it adds floor plan interest. Past what the factory credit covers, that cost is the store's own. See Floor plan interest.
Used depreciation. A used unit loses value the longer it sits, so aged used units usually end in lower gross or a wholesale loss. See Used car days' supply and aging.
Too thin is a problem too. A very low new days' supply can mean missed sales because the right units aren't on the ground.
How to find it on the statement
Units in stock for new and used print on every factory financial statement, usually on the new and used department pages or the inventory section.
Units retailed for the month and year to date print on the same pages.
Some statements print days' supply directly. If yours does, use that number rather than rebuilding it.
What moves it
New: order to the real sales pace, use the factory's programs on aged units early, and review every unit at 60 days.
Used: price to market from day one, review weekly, and exit any unit before 60 days.
See it on your own statement
Pocket20 reads units in stock and units sold from your statement, measures new and used days' supply against benchmarks, and puts the carrying cost in dollars. Get a free read or see a sample read.