May 28, 2023

Mechanic Escape

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Dealer Auction launches new profit calculator tool

Dealer Auction launches new profit calculator tool

Dealer Auction has launched a profit calculator to help dealers understand the financial upside of trading vehicles digitally.

It estimates a typical franchise dealership operating in the north of England selling c. 20 trade vehicles each month, achieving on average a trade profit of £140 per vehicle, stands to achieve an additional £81,118 in trade profits by switching.

A dealer with comparable trade volumes in the south of England – where operational costs are slightly higher – can expect to achieve an additional £85,487.

The calculator considers several factors including labour time and operational costs, while comparing the average trade profit achieved via Dealer Auction against that of traditional auction channels.

Dealer Auction’s marketplace director, Kieran TeeBoon, said: “Weak supply and inconsistent consumer demand means the profit earned per vehicle has never been more important. Dealers are looking to extract every penny they can from every asset, with more emphasis being placed on the performance of their remarketing channels.

“Many dealers are still trading their unwanted part-ex and overage stock through traditional channels. From start to end, the process can include transportation to the sales destination, inspection, refurbishment, valeting, imaging, and allocating to an auction. Unsurprisingly, selling a vehicle this way takes time, meaning slower returns and potentially less profit.

“With Dealer Auction, it takes just 2.9 days to sell a vehicle on average. This means dealers can get cash back into their pockets faster, beat any losses caused by depreciation, and free up more space for vehicles that will earn a greater margin at retail. Not only that, but vehicles also sell for 4% more on average through our platform compared to traditional remarketing routes.”