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Trade Cycles
Dive into Powersports Trade Cycles and how it is important to any powersports dealership.
Danny: When I think about this on like a car which may have a 3, 4, 5 year buying cycle; if you sell someone a car one month and their spouse comes in and buys another one 2 months later, you're not exactly going to sell them another vehicle for a while. But I would think that with Powersports, these new things come out; you mention accessories and even primary equipment. It's an opportunity to be a little more aggressive than you could be with retail Automotive Sales.
DIFFERENCE
Larry: Yeah, ironically, that was another big, I guess, difference for me is. I really thought that in Powersports you saw much more discretionary income people. You saw much longer sale cycles and a longer cycle in general. That powersports trade cycle it's actually quite the opposite. The trade cycle is much shorter, there's a lot of negative equity that has to be overcome. Powersports amazingly enough... the thing about it is, people will overcome it to get that new toy. They will do more to get that new toy then they will to get that car. It's amazing, but it's true. Yeah, you see? That's a big difference in Powersports. That trade cycle is about 2 years. That’s what the car business would love to have, right? They would love to have a trade cycle every 2 years.
INVENTORY TURNING
But about every 2 years you're turning these vehicles over and sometimes you're financing some of these things 4 or 5 years so there's lots to overcome and of course the value of the vehicles plummet hard, right? So it's hard to overcome that negative equity, because there's a lot there. Powersports trade cycles are huge! So there's a lot going on right now to try and fix some of that and I think, you know, when you look at things like a lot of Powersports stores really aren't into used vehicles. And it's very hard to get into used vehicles from a Powersports perspective, simply because Powersports Vehicles get used up.
Danny: Sure, Sure
GOOD TRADES
Larry: A lot of people are beating on them. But there are still some good trades that come out of it. Just like in automotive, there's a lot of used interest, a ton of used interest. It's almost 1 to 1 on the websites, we're seeing.
Danny: Ok.
Larry: For every 1 customer that wants to look at a new one, they're also trying to look at a used. That interest is there, it's just that the inventory is not.
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