Dealer glossary
Days supply
How long the current inventory would last at the recent rate of sale, expressed in days.
Definition
Also called market days supply, MDS
Days supply is inventory divided by sales rate. Thirty units and a sale a day is a thirty-day supply. It is the standard way to answer whether a store has too much of something.
Market days supply applies the same idea to the wider market rather than one store: how many of this year, make and model are listed for sale relative to how fast they are selling in the area. A low market days supply means a car is scarce relative to demand, which is a pricing signal.
Both versions matter for a different decision. Store days supply tells you what to stop buying; market days supply tells you what to price aggressively and what you can hold.
Related terms.
Aged inventory →
Vehicles that have been in stock longer than the store target, usually measured in days since acquisition.
Appraisal →
Determining what a dealership should pay for a vehicle, whether taken in trade or bought at auction.
Floor plan →
A revolving line of credit a dealership uses to buy inventory, secured by the vehicles themselves and paid off when each unit sells.
See how this works in one system.
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