Holding cost calculator for used car dealers
Every day a car sits, it costs you interest on the money in it plus a share of the yard. Put in the car’s cost and your rates to see the cost per day, and how much margin is gone at 30, 45, 60 and 90 days.
Using the number
Price drops are cheaper than waiting
If a car costs you $30 a day, a $500 price drop that sells it three weeks sooner pays for itself. The trap is that holding cost never shows on the car, so it feels free. Put a daily number on it and the decision gets easy.
Bring the daily figure into the car margin calculator to see the true net on a sold car.
In the app, accruing daily
carassessments.com.au accrues holding cost on every car from the day it’s bought, shows days in recon and days to frontline, and raises aging alerts at 30, 45, 60 and 90 days with a suggested price drop. When a car hits your aging target it can flag it for wholesale. See inventory management.
Questions dealers ask
What is holding cost on a used car?
Everything a car costs you while it sits unsold: interest on the floor plan or the return your own cash could earn elsewhere, a share of yard rent, insurance and other running costs. It accrues every day, so a car that takes 90 days to sell can lose most of its margin before it goes.
What rate should I use for my own cash?
If you fund stock from a floor plan, use its interest rate. If it’s your own money, use what that money costs you or could earn elsewhere, for example your overdraft or business loan rate. Leaving it at zero makes slow cars look free.
When should I drop the price?
Many yards review price at 30, 45, 60 and 90 days. The table shows how much of your margin is gone at each point; once holding cost has eaten a big share, a price drop that sells the car this week usually beats waiting.
Does consignment stock have a holding cost?
Less of one: you didn’t pay for the car, so there’s no interest on its purchase price. Yard space, insurance and advertising still cost you, and a slow consignment car ties up a spot an owned car could fill.
Stop doing this in a spreadsheet.
The app works this out on every car automatically, from appraisal to settlement. Leave your email and we’ll show you on one of yours.
More free calculators and templates, or see pricing.