How it is computed
Take the unit's total cost: what the store paid plus what it spent to make the car retail-ready. Divide by the current market price for comparable vehicles. A car bought and reconditioned for eighty-six percent of its market price has fourteen points of room before the price has to fall below the market to move it.
Why it matters
It is gross before the car is ever listed. The room between cost and market is the only front gross the store will ever have on that unit, and every day on the lot spends some of it.
By source, it shows where the store buys well. Trades, auction purchases, and service-drive acquisitions arrive at different costs to market, and the pattern is a buying strategy whether or not anyone wrote it down.
How operators read it
- Read it beside price to market. Cost to market is what you have in it; price to market is what you are asking. The distance between them is the gross you are trying to hold, and the market decides how long you can hold it.
- Read it against days to sale by source. A source that produces a low cost to market and a long time to sell is buying the wrong cars cheaply.
- Treat the market price as a moving number. It is an average of what others are asking today, and it drifts; a cost to market computed on last month's market is a memory.
Questions people ask
Is a lower cost to market always better?
Only if the cars sell. A cost to market that looks wonderful on units nobody wants is a parking lot full of cheap mistakes. Read it with velocity.
What goes into cost?
Acquisition, reconditioning, transport, and any pack the store carries. Leaving recon out is the most common way to make a buyer look better than the lot says they are.
How A.D.A.M. reads it
A.D.A.M. computes cost to market from the store's own unit cost and the market price it records, summarized by acquisition source beside days to sale, and treats a missing market price as missing rather than as zero. He reads it beside the numbers it trades against, names what the gap is worth, and leaves the decision where it belongs. What an AI advisor should do, and refuse to do.