When you own a business, you want to know all details about it. Dealership owners want to make sure that the decisions about their purchases are done wisely. It affects sales directly. What is more, keeping track of this info gives insight about what can be improved.
There are three main ways dealers obtain new inventory: manufacturers, auctions and trade-ins. In this article we will talk about each channel and what would be expected of the software that keeps track of this info.
Franchised dealers that sell new cars buy their inventory from the manufacturer. This is a different process from the used car lots. Big dealers buy in larger amounts and after a certain date they lose significant value. They become last year’s model. They need to be sold within a certain timeline. What does that mean for the software? Bulk entry. Software used for pre owned vehicles can afford not to have bulk entry. But new vehicles are typically ordered in bulk. The user interface should ask for some common info about the new vehicles and then request a list of VINs.
Independent dealers on the other hand typically deal with used cars and they are typically purchased at auctions. The software package used for keeping track of these vehicles would need to record certain fees paid to the auction. It is part of the costs of a vehicle and needs to be calculated as such.
Nearly all dealers accept trades during the sale of a vehicle and this is the third and final way of getting new inventory. Trade-ins should be recorded in the DMS just like any other vehicle. It is important not to enter the same vehicle twice, though. Traded vehicles should be simply associated and not replicated throughout the system.
The transportation plays an important part in purchase and sales of vehicles. If the vehicle is bought at an auction, almost always dealer would need to have it transported. Occasionally when a trade vehicle is not sold, dealership may decide to sell it at an auction and transportation comes into play there as well. As the number of online dealers increase, shipping cars (and therefore having them transported) is becoming more common. Transportation costs should be recorded in a DMS along with other expenses.
For many dealers, floor planning is a major part of running their business. Floor plan loans are short term inventory loans taken until the sale of a vehicle. Also known as dealer financing, it is offered by certain lenders and they are usually available in auctions. Some dealers also have agreements to regularly get loans from their lenders for their vehicles. These loans have fees, short term interest rates and need to be paid when the vehicle is sold. Late payments result in higher fees. Our DMS helps you with saving these loans and reminding you when they need to be paid. Floor plan fees are part of vehicle costs and need to be treated as such.
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