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8 Key KPIs for Auto Dealership Success


Is your auto dealership firing on all cylinders? To build and maintain a successful dealership, use these key performance indicators (KPIs) to guide the way.

Your auto dealership strives to keep its customers happy and sales high, but could it be better? Where is there room for improvement? Do you know how to find out? If you understand your dealership’s strengths and weaknesses, and how to track them, you can achieve the best results possible for your business and its customers.

KPIs provide measuring sticks for your dealership’s success. They help you make sense of the huge volume of information your dealership collects and identify ways to improve.

What KPIs does your dealership need to track and evaluate?

There is no shortage of KPIs that auto dealerships can track and evaluate, but not all of them deliver equal value. Let’s look at eight KPIs that can help you build and maintain a successful dealership.   

1. Used-to-new ratio

Used-to-new ratio gives you a glimpse into the condition of the vehicles in your inventory. Typically, a successful dealership has a used-to-new vehicle ratio of 1:1 or higher. If you find the volume of used cars exceeds the volume of new ones, you may want to revamp your reconditioning and retail processes. On the other hand, if you discover the volume of new cars is higher than the volume of used ones, you may want to adjust your pricing and marketing strategies. 

2. Price to market

Price to market is built on supply and demand. If you understand the demand for a car, you can determine the appropriate price for it. Plus, you can decide how aggressively to price a car and ensure you consistently price vehicles at rates that fall in line with customer expectations and allow you to maximize your profits

3. Inventory turnover rate

With inventory turn rate, you can compare in-stock inventory to monthly sales. Generally, if your dealership is successful, you’ll have a turn rate of about 20 days or fewer. A successful dealership knows how to price its cars and market them appropriately, so it keeps the inventory turn rate as low as possible. It may also have a seamless recon process to help improve its inventory turn rate.  

4. Gross return on investment (GROI)

GROI is calculated as a portion of a car sale multiplied by turn rate. For instance, if you sell a car for $10,000 at a profit of $1,000, you generate 10% GROI. You must also account for the length of time it takes to sell a car relative to GROI, too. So, the ideal GROI is 120, based on a 12-turn equivalent; this figure would account for selling a car in one month.

5. Cost to market

Cost to market involves a comparison of the retail value of a car and the total investment in the vehicle. The KPI accounts for acquisition, transportation, and recon costs, along with any other expenses used to sell a car. Successful dealers can use cost to market to uncover ways to reduce the costs required to get a car ready to sell and optimize its inventory. 

6. Aged wholesale loss

Auto dealerships want to sell every car as soon as it becomes available. But there may be times when a car lingers in your inventory and you’re forced to take a loss. Successful dealerships evaluated aged wholesale loss to determine how much they lose due to inventory that goes unsold for an extended period of time. With aged wholesale loss, the lower the percentage, the better. If you find your aged wholesale loss exceeds 5%, you may want to reconsider how you can enhance your cars to drive more consumer interest. 

7. Web response time

Most successful dealerships have websites that let consumers shop for cars online. If you do as well, it’s important to monitor your website performance. If your dealership wants to succeed online, it must find out how web shoppers engage with its brand. This will require understanding the number of visitors who view different pages, how often visitors check out your site, and other pertinent data. 

8. Recon time

The ability to recondition a car quickly and efficiently is a key profit consideration for any dealership. Successful dealerships have a straightforward process that they can use to get a used car ready and make it available to consumers without delay. 

By tracking your recon time, you can identify any bottlenecks in the recon process that are keeping your cars off the sale lot any longer than is necessary. This insight also helps you find ways to enhance your existing recon process and keep vendors accountable for their service times. 

Want to get your cars retail-ready faster than ever before? ReconVelocity can help

Tracking all of these KPIs will help you get visibility into the operation of your dealership and improve processes to sell cars faster. But it’s a lot of information to track by hand, and some KPIs are nearly impossible to track without tools like GPS vehicle tracking, which lets you know exactly where a car at all times. 

ReconVelocity is the best-in-class auto recon solution to make your recon process fast and efficient. Our solution can be configured specifically to your dealership — and we guarantee it will improve your turn rate and profitability. To see ReconVelocity in action, request a demo today. Or, to learn more about our solutions or to talk to a recon expert, call us at (850) 616-6294.

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