Automotive Dealer Benchmark Guide

Daily Benchmarking Items

Sales Department

• New and Used Unit Volume Tracking for the Month: Monitor the number of new and used vehicles sold to ensure you are meeting your sales targets.
• New and Used Gross Tracking for the Month: Track the gross profit from new and used vehicle sales to assess profitability.
• Previous Day’s Deliveries: Review the profit margins, types of vehicles sold (new/used), and customer addresses to analyze sales performance.
• Sales Appointments for the Day: Keep track of scheduled sales appointments to manage customer flow and sales team productivity.
• Previous Day’s Sales Appointments: Evaluate the number of appointments, shows, and sales to understand conversion rates and identify areas for improvement.

Fixed Operations

• Fixed Gross Tracking: Monitor the gross profit from service and parts operations to ensure a healthy fixed absorption rate.
• Number of Service Department Appointments for the Day: Track the scheduled service appointments to optimize the service department’s workflow.
• Previous Day’s Service Appointments No-Shows: Identify no-shows to improve appointment scheduling and customer follow-up processes.

Cash Flow Monitoring

• CIT (Contracts in Transit): Regularly review contracts in transit to ensure timely funding and cash flow management.

Weekly Benchmarking

Used Vehicle Inventory Management

• Pricing Accuracy: Evaluate whether your used vehicles are priced correctly to remain competitive.
• Wholesale Units: Identify which units are being wholesaled to manage inventory effectively.
• Recon Process: Monitor old units caught up in reconditioning to expedite the process.
• Overage Inventory Concerns: Address inventory that has been on the lot for too long to avoid depreciation.

New Vehicle Management

• Manufacturer Allocation and Ordering: Ensure proper allocation and timely ordering of new vehicles to meet demand.
• Customer Satisfaction Index (CSI): Track CSI scores to maintain high customer satisfaction and loyalty.

Finance and Insurance (F&I) Performance

• PVR (Per Vehicle Retail): Monitor finance and cash deals to maximize profitability per vehicle sold.
• PPD (Products Per Deal): Track the number of products sold per deal to enhance F&I revenue.
• Average VSC Gross: Evaluate the gross profit from vehicle service contracts.
• Product Penetrations: Assess the penetration rates of various F&I products to identify sales opportunities.

Website Management

• Picture Updates: Ensure that vehicle photos are up to date to attract online shoppers.
• Overall Check-Up: Regularly review the website for any issues that could affect user experience or lead generation.

Service Department Efficiency

• Technician Hours Turned: Monitor technician productivity to optimize labor utilization.
• Shop Hours Turned: Track overall shop efficiency to improve service throughput.
• Dollars per Repair Order (RO): Evaluate the average revenue per RO to identify upsell opportunities.
• Customer Satisfaction Index (CSI): Maintain high CSI scores to retain customers and attract new ones.
• Number of New Customers: Track the number of new customers to gauge service department growth.

Parts Department Management

• Returns: Monitor parts returns to manage inventory and reduce costs.
• Special Order Parts: Keep track of special-order parts to ensure timely fulfillment and customer satisfaction.

Accounting and HR Management

• Title Problems: Address any title issues promptly to avoid delays in vehicle delivery.
• HR/Payroll Concerns: Regularly review HR and payroll processes to ensure compliance and employee satisfaction.
• Cash/Floorplan Management: Monitor cash flow and floorplan financing to maintain financial stability.

Monthly Benchmarking

Financial Performance

• Net Profit: Analyze net profit as a percentage of gross and sales to assess overall profitability.
• Return on Investment (ROI): Evaluate ROI to measure the effectiveness of your investments.
• Aged Receivables: Monitor aged receivables to manage cash flow and reduce bad debt.
• Clean Schedules: Ensure that all financial schedules are accurate and up to date to reflect true financial performance.
• Any Departure from Normal on a Financial Statement: Identify and investigate any anomalies in the financial statement to address potential issues.

Sales Performance

• New Vehicle Unit Sales vs. Competition: Compare your sales performance against competitors to identify strengths and weaknesses.
• Location of Sales: Analyze where your customers live to optimize marketing strategies and sales efforts.

Advertising Effectiveness

• Advertising Spend ROI by Vendor: Assess the return on investment for each advertising vendor to allocate budget effectively.

Employee Management

• Employee Wages vs. Average Wage: Compare employee wages against industry averages to ensure competitive compensation and attract top talent.

Are Your Efforts Paying Off?

Benchmarking is an indispensable tool for car dealerships looking to improve performance, profitability, and customer satisfaction. By regularly tracking and analyzing key metrics, you can identify areas of improvement, set realistic goals, and implement effective strategies. Whether you focus on daily, weekly, or monthly benchmarks, the insights gained from benchmarking will help your dealership stay competitive and achieve sustained growth.

Partnering with a specialized business accounting firm can provide additional financial insights and strategies needed to maximize your benchmarking efforts and drive success. Contact us today to learn more about our dealership services and how we can help you achieve your business goals.