What a unit costs per day on the ground
Every floored unit has a daily carrying cost you can actually compute: interest on its floor-plan payable, its share of rent, insurance and utilities, and the quiet market depreciation of the vehicle itself while it waits. We put that number in front of dealer principals because it turns the aging report from wallpaper into a bill, and it is the denominator under every pricing and exit decision that follows.
Curtailments turn the cost into cash events. On the lender's schedule, principal goes out against a unit whether it has sold or not, and a handful of curtailments landing in the same week can squeeze an otherwise healthy month. Our Fractional CFO work keeps a curtailment calendar inside a rolling 13-week cash flow, so those dates are planned for rather than discovered.
Days-on-lot is the discipline that protects gross
Aging is managed weekly or not at all. We run the lot in buckets, 0 to 30, 31 to 60, 61 to 90 and beyond, with price moves on a set cadence and a hard exit rule: by a chosen day the unit is retailed, wholesaled or run through the lane, with no exceptions for favourites. The first loss is the cheapest one on offer, because the unit that finally delivers at day 110 grosses less and consumed interest and ground the entire time it sat.
Turn is the payoff. A lot that turns its inventory dollars eight times a year earns materially more than the same lot turning five at identical per-unit gross, with no extra capital and no extra headcount. Days-on-lot discipline is how five becomes eight, and it is a management habit before it is a finance concept.
The buckets also set the buying plan. Replacing what sells inside 30 days, rather than whatever the lane happens to offer cheap, keeps the rows stocked with units that have already proven they move, and it gives the buyer a target list instead of a mood.
Per-unit gross, front and back, and the recon question
Front-end gross only means something measured against all-in cost, and the useful cut is by source and price band: auction lanes against street buys against trades, budget rows against the premium line. That view tells you where the next buying dollar should go, which no statement-level gross figure ever will. It also exposes the appraiser and the desk to the same arithmetic, which tends to end arguments.
The back end gets the same per-unit lens. Product penetration and reserve per retail deal show whether the desk is converting or coasting, and back-end gross is what carries a thin front end through a soft market. Reconditioning is judged as an investment: each recon dollar has to buy either gross or speed, and past a point it buys neither. Sublet queues belong in that math too, because a unit waiting two weeks for paint is aging before it ever reaches the front line.
A scoreboard the principal and the lender can both read
| Metric | The question it answers |
|---|---|
| Days on lot, by bucket | Which units are eating interest and ground |
| Front-end gross per unit, all-in | Whether buying and pricing actually make money |
| Back-end gross per retail unit | Whether the desk converts financing and products |
| Recon spend and recon days per unit | Whether reconditioning buys gross or just delay |
| Floor-plan interest per unit sold | What carrying the lot costs each delivery |
| Inventory turn, annualized | How hard the same capital is working |
The same package answers the lender. Line utilization, equity in inventory and interest as a share of front-end gross are the numbers a floor-plan account manager reads at renewal, and units financed above what the lane would bring today get flagged as the first ones to move. When volume outgrows the line, or the line's pricing, our Business Financing Advisory work builds the case for the increase in the lender's own language.
This is a few focused hours a month, not a hire. We build the scoreboard from your DMS and your books, review it with you on a set rhythm, and hold the lot to the rules it produces, for dealers across Mississauga and the GTA. Fees are quoted in writing after a free 15-minute discovery call.
