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Used Vehicle Stock Ageing

Used Vehicle Stock Ageing

Stock Age Profile of Units in Stock

Guideline: Own Policy

Description:

This information is really four Key Performance Indicators all rolled in to one. They assess your total units in stock and separate them into age categories expressed as a percentage.

Example:

A) Units between 01-30 Days = 36 - 60%
B)
Units between 31-60 Days = 15 - 25%
C) Units between 61-90 Days = 6 - 10%
D) Units over 90 Days = 3 - 5%
E) Total Units in Stock = 60 - 100%

Discussion:

This example shows that 5% of the units that are in stock are over 90 days old. What it does not tell you is how much older than 90 days they are.

Related Terminology:

See also % Value of Stock Over 90 Days.


Used Vehicle Stock Value

Used Vehicle Stock Value

Value of Used Vehicle Stock at Stand In Value

Guideline: See Stock Turn, Used Vehicles

Description:

This statistic simply provides you with the value of your used vehicle stock at any one moment in time.

The figure is usually taken directly from your Balance Sheet from which your used vehicle stock can be found within the section labelled Current Assets.

The used vehicle stock value takes into account all stock write down that has taken place within the current year and it is this figure that is used for the calculation of KPI's such as used vehicle Stock Turn.

Example:

Discussion:

It is important to note that this figure is reported as a monetary value and reflects the stand in value as opposed to the retail selling price or the original purchase price.

The information that you really want to know here is how much stock should you be holding at any one moment in time? The answer to this question lies in the KPI used vehicle Stock Turn.

Related Terminology:

Used Vehicle Stocking Plan

Used Vehicle Stocking Plan

Special Loan Provided For Used Vehicle Stock

Benchmark: 80% of Stock Value

Description:

A Used Vehicle Stocking Plan is a unique type of funding where your dealership usually pays the interest on the loan and the principle loan value can vary from month to month according to the value of your used vehicle stock.

Let's say that you have an agreement to hold R250,000 of used vehicle stock at any one time. Your loan provider, usually your franchise manufacturer or their finance company, will provide you with up to 80% of that value.

Finance companies usually advance up to 80% of the agreed stock value because the 20% difference gives them cover for depreciation if they have to liquidate the vehicles.

Example:

A) Agreed Stock Value = R250,000
B) Stocking Plan = R200,000 (A X 80 ÷ 100)

Discussion:

An Auditor visits your dealership every month to value your stock against one of the industry guides and your stock value must exceed this figure.

If the stock valuation is above the agreed R250,000 then everything carries on as normal. However, if your stock is valued less than the agreed limit, you have to write a cheque to make up the difference of the shortfall.

Related Terminology:

Used Vehicle Write Down

Used Vehicle Write Down

Depreciation of Used Vehicle Stock

Guideline: Vehicle Specific

Description:

If there is one thing that is certain about used vehicles, it is that their value changes on a monthly basis and unfortunately for us, it's usually in a downward direction.

The top performing Sales Managers within our industry re-evaluate their used vehicle stock every month, and where depreciation has taken hold, the effects are shown within Used Vehicle Write Down.

The value of Used Vehicle Write Down represents the amount of depreciation that has been suffered. Typically, this value can be found within the Semi-Fixed Expenses of your management accounts.

The value of Used Vehicle Write Down is usually deducted from the stand in value of the used vehicles that have depreciated so that the screen price can be reduced.

Example:

A) Current Used Stock Value = R324,500
B) Revaluation of used stock = R320,700
C) Used Vehicle Write Down = R3,800 (A - B)

Discussion:

This process serves to maintain a competitive pricing strategy for used vehicles within your marketplace without the loss of Gross Profit.

It provides you with the true trading status of your business as opposed to hiding behind lower margins.

Related Terminology:

Used: New Retail Ratio

Used: New Retail Ratio

Used Retail Units Sold ÷ New Retail Units Sold

Baseline: >1:1

Description:

This KPI is specifically for retail vehicles and excludes all fleet sales. The statistic establishes the relationship between the number of used vehicles that you retail and the number of new vehicles that you retail

This example shows that for every new vehicle that you retail, you sell 1.75 used retail vehicles. Take the time to understand what you are reading on your reports as some manufacturers show this ratio in reverse. (New:Used)

Example:

A) Used Retail Sales = 960
B) New Retail Sales = 548
C) Used:New Retail Ratio = 1.75:1 (A ÷ B)

Discussion:

It is not possible to provide an industry benchmark for this performance as it is influenced by the franchise that you operate, your overall trading strategy, the ability of the Sales Manager and the sales team.

Related Terminology:

Utilisation % (Bodyshop)

Utilisation % (Bodyshop)

Hours Worked ÷ Hours Attended (x100)

Benchmark: 85% x 95%

Description:

This statistic tells you how much of the Productives attended time is actually spent working productively.

In more simplistic terms, each Productives usually clocks in and is available for eight hours each day, but how much of that time is spent spray-gun-in-hand or panel beating, working on hours that can be charged out to the customer? Utilisation gives you the answer to this question.

Utilisation

Example:

A) Hours Worked = 957
B) Hours Attended = 1,040
C) Utilisation = 92% (A ÷ B X 100)

Discussion:

This example shows that the Productives have attended 1,040 hours at the dealership of which 92% of that time has been spent working productively. The remaining 8% will be shown in your expenses as Idle Time.

Related Terminology:

This KPI is also known as Labour Efficiency, Labour Utilisation and Selling Effiency.


Utilisation % (Service Department)

Utilisation % (Service Department)

Hours Worked ÷ Hours Attended (x100)

Benchmark: 85% to 95%

Description:

This statistic tells you how much of the Technicians attended time is actually spent working productively.

In more simplistic terms, each Technician usually clocks in and is available for eight hours each day, but how much of that time is spent spanner-in-hand, head-under-bonnet, working on hours that can be charged out to the customer? Utilisation gives you the answer to this question.

Utilisation

Example:

A) Hours Worked = 957
B) Hours Attended = 1,040
C) Utilisation = 92% (A ÷ B X 100)

Discussion:

This example shows that the Technicians have attended 1,040 hours at the dealership of which 92% of that time has been spent working productively. The remaining 8% will be shown in your expenses as Idle Time.

Related Terminology:

This KPI is also known as Labour Efficiency, Labour Utilisation and Selling Effiency.