Automotive Fleet Management 101 for Used Car Dealers

Is your dealership fleet costs cutting deep into your bottom line? These automotive fleet management tips can help free up more revenue Running a successful used car dealership requires more than meeting quarterly sales goals. Just like any other bu...

Is your dealership fleet costs cutting deep into your bottom line? These automotive fleet management tips can help free up more revenue

Running a successful used car dealership requires more than meeting quarterly sales goals. Just like any other business, a dealership needs to spend money efficiently to keep a steady work flow and healthy inventory. The vehicles and equipment used to transport your inventory can eat up a significant chunk of your budget. If your fleet vehicles are not properly managed and utilized, these indirect (and direct) costs can worsen over time.yH5BAEAAAAALAAAAAABAAEAAAIBRAA7

Even if your dealership runs a small fleet, it’s important to keep a close eye on the total costs. Smart automotive fleet management can remove wasted spending, improve performance, and optimize utilization of every available asset.

We’ve put together our best practice tips for automotive fleet management. The details and specifics of every dealership are different, and proper implementation of management can be complex, but these tips will give you an overview of what is important.

Managing your fleet assets to minimize cost and optimize effectiveness

1.) Invest in comprehensive management software

Today’s digital technology makes it easier to manage every detail of your business. There are numerous SaaS tools available on the market, but there are two specific software systems a high-performing car dealership needs: 1. a modern fleet management system 2. a comprehensive CRM software.

Utilizing an automotive fleet management software will identify key data that’s difficult to track manually. Just as a quality dealership CRM helps sales teams run more efficient and improve lead conversions, your fleet software should cover all the bases. GPS tracking, maintenance and fuel costs, financial reports, replacement cycles, etc. –access to these key data points will help you run a more efficient operation.

2.) An idle vehicle is money down the drain

It’s easy to assume that a sitting truck breaks even; it’s not making you money, but’s not losing money, either. That logic is a big misconception. You have to consider the “true costs” of your vehicles, both indirect and direct. Here are a few expenses that idle vehicles can cost dealerships: auditing, parking and storage space, security, insurance and liability, preventative maintenance, loss of residual value from depreciation. The list goes on and on.

Make it a point to recycle and rotate vehicles that are not needed. Leasing or renting a vehicle in the short term could prove more effective for some dealerships, depending on your task scheduling and overall reliance on transportation of inventory.

3.) Send the right tool (and person) for the job

Effectively assigning tasks is an important step to better automotive fleet management. If a dealership purchases three mid-size sedans at an auto auction, and then sends a carrier truck to transport those vehicles, the dealer is not running tasks effectively. Don’t send a carrier truck when an extended flatbed will do. The fuel, vehicle depreciation, and resulting maintenance costs for every mismanaged task will add up.

On that note, it’s important to track the performance of personnel properly. Time is money, especially during transport. A GPS tracking system will show how drivers are performing on the road and what unnecessary costs are accumulating as a result.

4.) Create an effective maintenance, rotation, and replacement schedule

Used car dealers have an expert understanding of depreciation values and costs. Take that knowledge and put it use for your automotive fleet management. Setting a concrete schedule for rotation, maintenance and replacement will keep workflow in motion while cutting wasteful costs. Also, knowing when a vehicle’s costs outweigh its performance ability is important to track. Older trucks use significantly more fuel, need frequent repairs and eventually become a hazard on the road. Investing in newer equipment will save time and money down the road.

5.) Always keep your vehicles in compliance

Make sure to adhere to all local, state, and federal regulatory laws. For fleet vehicles, these laws can often change, so be sure keep up-to-date by subscribing to industry newsletters or joining an organization. Things you may have to track: alternative fuel requirements, carbon emissions, fuel usage, licensing, etc. Also, always have your vehicles properly insured, as well as the personnel who drives them.

Keep your automotive fleet management above the fold

Every aspect of a car dealership––true costs, spending, revenues, and opportunities––plays into its success. Utilizing your fleet and managing its costs will help free up money tied into wasteful spending, allowing for re-allocation of funds towards other budgetary concerns. Dealerships should consider hiring or placing a manager to run this side of the business, given the potential gains.

What’s your opinion on managing fleet operations? Can you name another important tip to the conversation? Share your thoughts in the comments!

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Ty W.
Ty W.

Ty was born and raised in the automotive world. He's an enthusiastic expert who writes exquisite content about cars, automotive sales, and dealership best practices. When not writing for AutoRaptor, you'll find Ty on the golf course.