How it is computed
Take the cost of the vehicles sold over the year. Divide by the average inventory at cost over the same year. A store that sold twenty-four million dollars of cost on an average inventory of three million turned eight times. Days supply is the same idea upside down: three hundred sixty-five divided by the turn.
Why it matters
Turn is velocity in one number. Every additional turn is the same capital doing one more round of work, and the carrying cost of the lot is spread over one more set of deals.
It is the number that puts the buying desk and the finance office in the same conversation. A slow turn is paid for in floorplan interest before anyone on the floor feels it.
How operators read it
- Read it with front gross per unit. Turn and gross trade against each other, and the right balance is a house decision; the wrong one is low turn and low gross at the same time.
- Separate new from used. New-car turn is shaped by allocation and incentives; used-car turn is the one the desk owns.
- Watch the average inventory, not only the sales. A store can improve its turn by selling more or by owning less, and the second is often the faster fix.
Questions people ask
What is the difference between turn and days supply?
The same relationship stated two ways. A turn of twelve is about thirty days of supply; a turn of six is about sixty. Operators tend to use days supply on the lot and turn on the statement.
Should recon units count in inventory?
They are capital the store owns, so yes for the turn calculation. For days supply on the retail line, many stores count only units that are ready to sell, and say so.
How A.D.A.M. reads it
A.D.A.M. reads turn and days supply as one velocity story, from summed bases and never from averaged averages, and pairs velocity with gross before it says a word about either. 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.