Automotive dealer management systems, are you using your tools correctly
Automotive dealerships, no matter the size of your enterprise, all have one thing in common. Regardless of whether you are just closing a couple vehicles or have hundreds to oversee on any given day, you rely on a dealership management system to run your business. This software is designed for automaker-supplied data and inventory transfers into an accounting system. Whether you are running the entire store or just a few cars around town, it’s important to understand what makes these systems work so that yours doesn’t derail your plans.
In this post we'll explore what kinds of software systems and services are available for dealerships and reviewing how they can help maximize productivity without straining budget too much.
The basics of vehicle management
Vehicle information is stored in the manufacturer’s data systems: VIN numbers, service history, pending recall notices and the like—a computerized record of every aspect of a vehicle’s life. Access to those records allows dealers to better manage the inventory delivered to your store through true transparency. As long as all vehicles are accounted for in one central location, it becomes easier for you to see where problems arise and how best to repair them.
Inventory management is another essential portion of this software. Most states require that vehicles be documented as they arrive at your lot and then again when they leave via paper forms or an online system. The latter is often done in a dealer-specific system which offers the option of printing out (or uploading) transaction information for each sale.
Finding the balance between inventory systems and dealer management tools
There are two basic types of inventory management systems: document based and transactional. Document-based systems can handle a lot more detail, but require a lot more employee time to maintain. You’ll want to choose a system that meets your specific needs while remaining manageable and within budget. Also consider whether you’d like to control that process yourself or let the dealership’s management staff manage the data—and how much those two options vary in cost.
When it comes to the dealership management side of things, we encourage you to look for a system that allows you to manage your inventory as well. There are specific programs designed for call center and service department management, but unless you have a sales team or will soon be expanding into those areas, most of these features won’t be necessary.
For sales departments, the important aspects of your software will be those that allow you to quickly find a vehicle and take an offer—or even place an order—to customers. You want a tool that fits with the way your store runs while leaving enough room for growth.
The process of getting a dealership management system
The installation and configuration of this software is usually done by dealership management staff, but it will be important to get that department on board with the new system as much as possible. They’ll have a say in what options you’re offered and must also be comfortable with any new software diagrams that lay out the various features you can use right away. Always inform them what features are coming in the future and when they may be available.
Down to business: Making a business case for why you need an automotive dealer management system
There are a number of options for dealerships looking to make the switch. While it will be important to consider your own specific needs, look for a system that offers the following features:
Wraps around the manufacturing-provided information to provide more transparency when it comes to inventory.
Manages vehicle data including VIN numbers, recall notices and vehicle health records.
Provides user access for sales and service departments, as well as your accounting staff. This can also include a back-end dashboard for security and backup purposes.
Sends automatic alerts to users for any reasons you deem necessary (such as pending recalls). These can come in the form of emails or text messages, or both.
Provides options for expiring inventory. This can be done with user-defined alerts as well.
Offers a dealer-specific service record system (such as shop orders and work orders). This is usually kept in the dealership management tool.
Tells you what vehicles aren’t selling (and lets you know why). Compiles these by vehicle age, make and model, and mileage. You can also look at this information by salesperson, or even hours of the day.
Helps you to minimize downtime on your vehicles through real-time reports for parts availability and service delivery times. These are also assembled by make, model, year and vehicle health status.
Reports on the status of vehicles that are in need of repair, as well as their vendors and costs.
Manages critical parts and inventory to help you avoid downtime when needed. For example, if a customer has purchased an extended warranty that notifies you via email, you can use this system to automatically order the parts needed for repairs.
Doesn’t force you to purchase its own services or software right away—instead, it suggests other products into your budget that may be cheaper or more effective with little fuss. You can always change things later as well if they don’t meet your needs now.
Too many options or expectations put on a dealership has a way of screwing up and straining the budget. If you work with an accounting software company, let them help you choose what’s best for your business. They can often create a customized package that works with your specific needs and can also help you build that idea into a plan so all your staff members feel confident they're getting everything they need while remaining within budget.
The best ways to start using VMI’s auto dealer management software
We've completed the development process on our current solution, which handles all of our dealership needs at present. It's not a straight-up VMI system, but it incorporates all of the features we require to keep our business running smoothly.
We’re also conducting tests on a new system which will be released to the public in a couple of months. It includes factory vehicle data, but also integrates with our back office and live KPI dashboards. And while this isn't necessarily meant for small dealerships just yet, we've received numerous requests to develop something that can work across the board.
Conclusion
Automotive dealerships in the United States generate over $600 billion in revenue each year. That’s a lot of money to play with, and a great number of it is generated by the sales of vehicles to customers. That’s why you need to make sure that your dealership management system is up-to-date, easy to use and free from any security vulnerabilities. Use services like VMI to find the best solutions for your business. Our system is built with dealerships that are ready for growth in mind, so use our expert advice as you discover which features are right for you.