How Much Is Ageing Vehicle Stock Costing Your Dealership?

Ageing vehicle stock can have a significant impact on dealership profitability. The longer a vehicle remains unsold, the greater the opportunity for depreciation, funding costs and other expenses to reduce the margin available when it eventually sells.

Having clear visibility of your vehicle stock can help you identify ageing vehicles earlier and make informed decisions about pricing, advertising and stock management.

Where Can Ageing Vehicle Stock Cost You Money?

The cost of holding ageing stock is not always one obvious expense. Instead, several costs can build up while a vehicle remains unsold.

These can include:

• Depreciation, as the value of a vehicle can decrease over time.
• Stock funding costs, which can continue for as long as the vehicle remains in stock.
• Insurance, security and forecourt space, which all contribute towards the cost of holding a vehicle.
• Preparation and advertising costs, alongside any price reductions required to help generate interest in the vehicle.

Keeping track of these costs can give dealers a better understanding of how ageing stock is affecting vehicle margins and overall dealership profitability.

Keeping Track of Ageing Stock

Knowing which vehicles have been in stock for the longest is an important part of effective stock management.

When vehicle information is managed across spreadsheets, manual stock books or separate systems, it can be more difficult to maintain a clear and up-to-date view of your stock.

Having your vehicle information available in one place makes it easier to identify stock that has been held for longer than expected and take action where required.

How Can a Dealer Management System Help?

A dealer management system can bring important areas of your dealership together, including vehicle stock, sales, customer information, accounts and reporting.

With DragonDMS, dealers can manage their vehicle stock alongside other areas of their day-to-day dealership operations, helping provide greater visibility of stock information and performance.

Rather than relying on separate spreadsheets or manual records, having this information within your DMS can make it easier to monitor your stock and identify vehicles that may require attention.

What Should Dealers Monitor?

There are several areas worth considering when reviewing ageing vehicle stock, including:

• How long individual vehicles have been in stock.
• The average age of stock across your dealership.
• The costs associated with individual vehicles.
• The amount of capital currently tied up in vehicle stock.
• Changes to vehicle prices and the potential impact on margin.
• The enquiries being generated by individual vehicles.

Looking at this information together can provide a clearer picture of how your stock is performing and help highlight vehicles that may require further action.

Take Control of Your Vehicle Stock

Keeping on top of ageing stock starts with having access to the right information.

Identifying ageing vehicles earlier gives dealers more opportunity to review their approach, whether that means adjusting the price, reviewing how a vehicle is being advertised or considering other ways to generate additional interest.

DragonDMS gives dealers the tools to manage their vehicle stock alongside their wider dealership operations, helping them keep important information in one place and make informed decisions based on their data.

To find out whether DragonDMS is suitable for your business, book a free demonstration with the sales team today on 01327 222 333 or at sales@dragon2000.co.uk.

Dragon2000 have been helping vehicle dealers and garages drive their businesses forward since 1995. As an established dealership software and car dealer website provider, we help customers increase profits and reduce costs through our dealer management system, dealer websites and mobile apps. Contact our sales team today to find out more.