Let’s face it, running a successful motor dealership is tough. Competitors are growing, costs of sourcing stock is rising, and government compliance is becoming stricter and stricter. To add to that, dealers are faced with maintaining customer trust and increasing vehicle sales. With all the responsibilities involved with running a motor dealership there is a high chance of making a mistake.
Like with anything mistakes are common but failing to address and action your mistakes can push your dealership into a cashflow hole that could be so hard to get out of. Here are 5 of the biggest mistake’s car dealers make and how you can solve them.
1. Not reporting on advertising expenses
Advertising is essential for all motor dealers. If you can’t get customers into your dealership, you will quickly close your doors, simple! The biggest mistake many car dealers make is not frequently reporting on and assessing their marketing costs against the leads generated. With some dealerships spending up to $600 dollars per vehicle on advertising, you would want to be sure you are getting the leads to warrant that type of spend.
As you would already know costs per lead on many car classifieds is enormous, to stay ahead of the competition and to minimise cash burn dealers should frequently report on their total advertising spend and contrast that with the leads or enquires you received for that vehicle.
The benefit of frequently reporting on your advertising expenses is if something isn’t generating a return on investment you can make immediate changes and stop the cash burn.
2. Paying too much for stock
We get it, used cars are in demand right now. But just because used cars are in demand doesn’t warrant you paying overs to source new stock. Paying overs for vehicles will result in minimal to no profit margin and stock sitting around in your dealership for longer than intended.
Before investing in new stock, it’s so important to look at the market trends, see what vehicles are selling and at what price they are selling for, then determine how you can source the vehicle and make a healthy profit on it.
For dealers there are valuation tools available to you which helps give you a better understanding of what used cars are worth, how much you should pay and the percentage of return you can get. It’s so important that you understand all the ins and outs and consult all relevant parties before making an investment in new stock to minimise risk.
3. Not having a Dealer Website
Let’s not sugar-coat it we live in an online world now. There isn’t a day that goes by where we don’t use the internet for leisure, research or when we are looking for things to buy. Selling cars is no different. Studies released by Google show that 95% of car buyers in 2020 used the internet as their source of information instead of physically attending the dealership – Proving that dealer websites are more valuable than your yard.
Many dealers believe a website is not essential or not worth the investment but, the statistics don’t lie. If you don’t have a dealership website, you could be potentially losing thousands in sales each month!
There’s no point having a website if the dealer website doesn’t have what customers are looking for. Dealers need to make the sales process easy for car buyers. Website features like car valuations, live chat, car financing and free car history reports make the buying process easy for a customer. It also offers them something different from other competing dealerships.
To learn more about EasyCars Dealer Websites click here
4. Not having a dealer management system
As a dealer there’s a thousand different things to do everyday in such a short space of time. Many dealers have the mindset of if it’s not broken don’t fix it. Selling cars has changed so much in the last 3 years, in saying that, the process you may be currently using, could be impacting your profitability and future growth.
A complete Dealer management system simplifies and automates the day-to-day tasks of running a motor dealership – freeing you up to grow your sales and maximise profit. All essential tasks such as advertising, stock management, government compliance, forms, accounting is completely automated - meaning less time spent on manual data entry and paperwork and more time to focus on selling cars and growing your dealership.
5. Getting the cheapest DMS
The main reason for investing in a DMS is to automate tasks and give you peace of mind. A huge mistake many dealerships make is subscribing to the cheapest dealer management system. Cheap programs mostly indicate a lack of resources, features and might not be able to provide you support when you most need it. Essentially you are getting what you pay for.
It’s so important for dealers to research, compare and ask dealer management system providers as many questions as possible and evaluate what supplier will give you a solution customised to your unique preferences.
Dealers should assess all the features being provided and more importantly what current customers are saying about the system. If dealers are giving great feedback, then chances are the company genuinely looks after its customers and their dealership.
When investing in a dealer management system, put even more emphasis on what you will be getting for the price and the returns or cost savings it will give you. Like most industries the cheapest often is often the worst option and just costs you greater in the long run.
Where EasyCars can help?
EasyCars is a simple and adaptable dealer management system that automates all everyday tasks of running a motor dealership.
EasyCars includes all the features needed to manage your dealership seamlessly. With over 38 years of experience creating solutions for Australian motor dealers we understand your vision and our software is completely customisable to your dealership’s unique preferences.
Over 200 Australian dealers have joined EasyCars in 2021 alone! Call us today on 1300 473 744 or submit the form below for a no-obligation free demo of EasyCars.