Expenses Car Dealers Can Reduce Easily in 2022

04 May 2022 Helpful Tips


As a dealer principal your number one priority is to minimise costs and maximise profit. With the Australian Automotive Industry continuing to change, many dealers find themselves working in the dealership instead of on the dealership. When this happens, little things fall through the cracks often resulting in greater costs.

That brings us to the question, what expenses can dealers reduce in 2022? The good news is there are many ways your dealership can reduce expenses and not impact operations or customer service.

Here are 5 Expenses Car Dealers Can Reduce Easily in 2022.

1. Advertising

Advertising has always been one of the most expensive costs for all Motor Dealerships. Let’s face it online advertising is essential, you can’t do without it, but many dealers make the mistake of not reporting on Advertising or paying much more on their vehicle advertising than they should be.

With Vehicle Advertising prices soaring, motor dealers need to strategically plan and allocate fixed budget spends on their vehicle advertising. A great way to reduce your vehicle advertising spend is by setting up ROI reporting. Setting up adequate reporting structure can show you what advertisers are providing value for money and what advertisers are not.

The benefit of having a strong reporting system is it gives you the ability to make strategic decisions that will save your dealership money. With the right information your dealership can instantly stop sending advertisements to advertisers who aren’t generating results and maximise spends on advertisers that do. The less money you spend on advertising, the more money you have to spend elsewhere on your dealership.

Related Article: 5 Car Advertising Tips for Australian Motor Dealers in 2022.

2. Vehicle Costs

It’s no secret that used car prices are going through roof. With that being said many dealerships make the mistake of getting into bidding wars to source new vehicles to sell. The problem with this is you often pay far more then the car is actually worth which ultimately reduces your margins when you go to sell it later.

There are still many opportunities for Australian motor dealers to source high quality used vehicles at the right price. The best way to reduce your Vehicle sourcing costs is by thinking outside of the box. Look at alternative ways to source vehicles that may not be as popular as others. Some simple ways to gain more stock could be to reach out to past customers to see if they have or know anyone who would be willing to sell their current car. To be successful sourcing vehicles in a highly competitive market you need to put in the time and look at avenues that others aren’t already taking advantage of.

Before you consider sourcing cars for your dealership it is highly recommended that you undertake the correct research, understand car valuations, and most importantly understand resale prices. If the car doesn’t make sense from a financial standpoint let it go, there will always be another.

Related article: How Australian Motor Dealers Can Get More Vehicle Stock in 2022.

3. Staff

Staff are always going to be one of the highest expenses for Motor Dealerships. In saying that, there are ways your dealership can minimise staff costs and not impact operations or customer service.

Let’s face it, every business has peak and quiet periods. A way to reduce staff costs is by limiting the staff you roster on during your quiet periods. Many businesses mistakenly roster on too many staff during quiet periods and run at a loss until business picks up in busier months.

Analyse your business data, find out when you are generally busy and when you are quiet and roster on the appropriate number of staff to carter for the demand. There is no point rostering on too many staff and having expenses build if you aren’t getting a return.

Related Article: 5 Opportunities for Motor Dealers in 2022.

4. Utility Costs

A mistake that so many businesses make is remaining satisfied with their current utility providers. The problem with this is there may be cheaper options available that could save your dealership hundreds if not thousands per year.

The quickest and easiest way to reduce your dealerships utility costs is by simply shopping around. Do a quick online search, see what other options are out there, doing a simple shop around could save your dealership thousands. Your dealership should make it a habit of shopping around at least once every six months to see what other providers maybe offering.

5. Unused Equipment

With the Australian Automotive Industry constantly evolving some of the equipment your dealership uses may not be needed or sufficient anymore. Many businesses make the mistake of keeping dated equipment like desktop computers and servers on location and connected to power. The problem with this is it costs your dealership money just having it there.

A great way to reduce expenses is by getting rid of old, dated, and unused equipment. An opportunity that presents itself in this occasion is you may be able to sell the old equipment to someone else who may find some use for it. Your business will remove an expense and gain some extra money in the process, it’s a win, win!

Related Article: Why web-based technology is vital for car dealerships.

Final Word,

There are many ways Australian Car Dealers can minimise expenses and maximise profit in 2022. Reducing your dealerships expenses won’t happen instantly, your dealership needs to have a strategic plan in place, and frequently adapt to market conditions. The 5 expenses mentioned above are a few ways your dealership can reduce costs in 2022.

We hope you enjoyed this article, to read more articles like this visit the EasyCars latest news section here.

About EasyCars

EasyCars by Jeal is an Australian, web-based dealer management system that automates the buying and selling of motor vehicles. Using the latest technologies, EasyCars removes frustrations experienced at the dealership and opens your doors for greater growth.

EasyCars features include Stock Management, Automated Advertising, Integrated Accounting, Government Compliance, Business Reporting, Reviews Management, Dealership Websites and more in the one central application.

To learn more about EasyCars Dealer Management System and to arrange a no-obligation free demo, contact us today on 1300 473 744 or submit the form below.

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