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Module of the Quarter: Car Dealership Profitability

Used car dealership profitability

Used Cars has become an extremely dynamic marketplace with prices increasing significantly and a considerable move to on-line. Whilst the sales skills & know-how of the sales team can apply as much to online as to the showroom or forecourt, there is a knowledge gap appearing between how the Cazoo & Cinch type retailers and the traditional franchise & independent dealers are doing business to the detriment of the traditional dealer.

This knowledge gap is around data, and how data can drive success in terms of demand, supply & profitability in used cars sales in a way that was not possible before. Data takes much of the guesswork out, what to buy & how much to price each vehicle in order to maximise profit and stockturn.

How improve profitability of used cars?

Let’s take Buying first. Your data knows how much you make on each model/variant, how many days it takes to sell and then how much profit per day you make on each vehicle. From this, a shopping list can be deduced of what models/variants should be at the top to drive profitability. As any retailer in any sector will tell you, buying the right kind of stock is very much the first priority. How to improve profitability of used cars?

Now that you have a very good mix of saleable stock, its time to set your prices that maximise your profitability per vehicle. Those of you on AutoTrader and on its Accelerator program will know the valuation of that vehicle and can price accordingly. It is quite amazing how dealers with so many spinning plates are not using this dataset to execute on optimum pricing.

Fortunately, AutoTrader has an API which Real World Analytics (RWA) has integrated with to collate your DMS stock with the AutoTrader data and shows by exception which vehicles are not correctly priced according to the market valuations, either too low or too high. Not only can you at Head office see this in dashboard format, but this is also shipped to each branch each day to the sales managers to highlight where they need to take action. For a dealership, these easy & simple actions will add a 5 digit increase to their bottom line. Learn more about used car dealership profitability.

Maximizing used car profits

Let's find out more about maximizing used car profits. To turn up the power more, you may be spending money on campaigns to drive traffic to your websites and particular models or vehicles. How to improve profitability of used cars? RWA is now using the power of soon to be released Google Analytics 4 to harness all this data to present you with simple dashboards on your web activities, not only views but real engagements on a car-by-car basis and highlights of which campaigns are working and which are not. Knowing what prospects are searching for is very valuable intelligence for the car buyer.

RWA pulls all the data described above into simple dashboards that highlight exceptions & drill down into the necessary detail. This subscription service is new to the market and will be a game changer to those dealerships that are interested in really driving their used car business in a market of unprecedented dynamics.

Find out more about dealership profitability and data analyst in automotive industry.

About Real World Analytics

Real World Analytics provides a cloud-based Business Intelligence (BI) solution that helps you become a complete data-driven dealer group. By bringing all your data into one place and delivering actionable insights to different levels in the business, everyone has the right information at the right time to do their job efficiently. The management will be presented with executive dashboards where they can drill down to the details for further investigation. Your managers in the outlets get reports such as DOCs delivered to them automatically so that they can action issues on the spot. The solution is designed to help you stay on top of your business with all the information you need at your fingertips.

To find out more, visit our Automotive BI Solution page or email us at