Days supply
What is days supply: days supply explained
Days supply is how long a dealership's current stock would last at its recent selling rate, expressed in days. It is calculated as units in inventory divided by the average number of units sold per day, with the sales rate taken from a trailing window of usually 30 or 60 days.
Also written days' supply, or expressed the other way round as turn rate. The two are inverses: 30 days supply is 12 turns a year, 45 days supply is roughly 8.
How is days supply calculated?
Units in stock divided by the average daily sales rate. The sales rate comes from a trailing window, and which window you choose changes the answer:
- A 30 day window reacts fast to a change in demand, and overreacts to one unusual month.
- A 60 day window smooths seasonality but lags a genuine turn in the market by several weeks.
There is a second choice hiding inside the formula: calendar days or selling days. NADA's own formula for used-vehicle days supply in units is the number of used vehicles in inventory divided by the average number sold per month, multiplied by the number of working days per month. That produces a different figure from the calendar-day version most market reports quote, and the two are not comparable.
Days supply: a worked example
A used department holds 180 vehicles and sold 90 units last month. On a calendar basis that is 3 units a day, so 180 divided by 3 gives 60 days supply.
Run the same stock through NADA's working-day version with 25 selling days in the month and you get 180 divided by 90, multiplied by 25, which is 50 days. Same cars, same sales, a ten day difference. Whichever version you use, use it consistently, and say which one you mean when you quote it.
What does a healthy days supply look like?
NADA's dealership productivity guide sets the working targets: 45 days on new-vehicle inventory, which is 8 turns a year, and 30 days on used-vehicle inventory, which is 12 turns. It adds two operational rules that matter more than the headline target: no used units over 60 days, and reconditioning turnaround inside 3 days.
At market level, NADA Data 2025 reported new-vehicle days supply at the end of 2025 of 47 days on domestic brands and 41 days on imports, across a total new-vehicle inventory of 2,577,974 units. The same series recorded 26 domestic and 22 import in 2021, and 76 domestic back in 2018. Days supply is a market condition as much as a management decision.
Why healthy days supply differs by segment
A single target across a whole store is the most common mistake, because the right number depends on what is being sold.
- New versus used. New stock is replenishable from the factory on a known lead time. A used unit is unique and depreciating, which is why NADA's used target is 30 days against 45 on new.
- Domestic versus import. NADA Data's 47 against 41 in 2025 is not a performance gap. Import allocation models and supply chains simply run leaner.
- Luxury versus mainstream. Low-volume, high-value units carry higher days supply by design, because you need breadth of specification on the lot to close a sale at all.
- Body style and season. Convertibles in November and four-wheel drives in June behave nothing like the store average.
- Fast movers. A popular trim can run at 15 days supply and still be undersupplied, because the sale you never got to have is invisible.
The honest problem with a store-level average
A dealership average of 45 days supply usually means nothing of the sort in practice. It is often a blend of a fast-moving core running at 20 days and a tail of aged units sitting at 120 days and beyond, and the two cancel out into a number that looks fine on the report.
That average is the reason aged stock survives. Nobody raises it, because the headline is healthy, and meanwhile the aged units keep accruing floorplan interest and depreciation while the fast movers subsidise them. NADA's "no used units over 60 days" rule exists precisely because a target set on the average does not force the tail to move.
So stop reading one number. Segment days supply by body style, by price band and by age bucket, and look at the age distribution rather than the mean. Then read it against unit sales, since the denominator is your own sales rate, and against gross profit per unit, since gross held too long is gross given back. What lands on the lot in the first place is set by trade-in appraisal discipline and reconditioning speed, weeks before days supply ever shows the problem.
