And as you get more of the deliveries in the 2024 model year, you’re seeing still similar attractive gross margins. And so, I think some of what we saw in the third quarter was transitory. That pressure probably continues and even accelerates, which is what we saw last year, but it’s on a smaller percentage of the overall mix. And so, it’s less relevant. And I think that’s probably the larger piece of the trend. But importantly, and I think you’re exactly right, what I observed in the last 25 years in automotive is a secular decline in front-end gross. And what that meant was you needed to prioritize F&I service and used, taking in trades and trying to accelerate that and really thinking about the velocity of capital. And that’s been a big message we’ve talked to our general managers about, I would rather sell something in 60 days for a smaller front-end than to try to hold out for the really big gross margin and then end up with a couple of more units that are aged that you have to discount aggressively to get rid of.
And so, we’re very focused on the velocity of capital and the gross margin return on investment that comes from accelerating turns. The flip side of that is we need to then drive F&I performance up, which should be plus or minus 10% of your average selling price. And I think in the quarter, we were at 5%. So, the biggest opportunity for us is to really focus on F&I and the used opportunity that comes from the trades as we accelerate the velocity of new. And that’s been a pretty consistent message internally. I wouldn’t say we hit our stride in the third quarter, but it’s a focus area for us.
Operator: [Operator Instructions] Our next question is coming from the line of Mike Swartz with Truist Securities.
Mike Swartz: I just hopped on the call a little late, so I apologize if I’m asking a question the second time. But just in terms of the new vehicle margins, can you give us any color about maybe how that played out through the quarter? Maybe what the exit rate was coming out of the quarter?
John North: Sure. Nice to hear from you, Mike. I think as it was intra-quarter, what we saw is the 2023 is really toggled over. So, most of our towable product tends to flip in like July and you start to really see the ’24s come online. From an industry dynamic, as I mentioned a moment ago, a lot of our competitors have been aggressively discounting 2023s. And if you go online and look, you can see many of them are 35% to 40% off, which is pretty close to cost in many cases. And so, what you’re really focusing on, as you turn those units are, what’s the trade opportunity? What’s the F&I opportunity? What’s your documentation fee? What can you do to try to make a little bit of money and get those turned? And so, as we progressed through the third quarter, I would say, we were very aggressive in terms of discounting those and trying to turn them.
As we mentioned in Kelly’s prepared remarks, 47% of our inventory is 2024s. So, we’re in really good shape. The 2023s that we have are a mix between both towable and motorized. In the motorized, in particular, the Cs and some of those are very scarce. And so, you’re still seeing pretty good margin on those. But I think overall, we’ve been very focused on maintaining the health of inventory versus maintaining the health of growth, and I’m pleased with where we stood and our days supply has come down a bunch. Relative to October, our margins have actually gotten better, they’re up. And that’s because more of the mix is 2024s now. And if half your inventory is that model year, you’re going to see that improve. And we were early to the party last year, for lack of a better term, in terms of discounting 2022s, that was a big focus of what we were working on in Q3, Q4 last year.
