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If you don’t plan and track your car dealership budget properly, you're setting yourself up for failure.
When we developed our strategy pack for car dealership owners, we saw a lot of dealership owners struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial revenue.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your dealership's finances around and set you on the path to success!
Get the budget tracker tailored for car dealerships
Most car dealership owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for car dealerships
Here is an example of a (very) detailed budget for a car dealership, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for dealership space | $8,000 | $96,000 |
| Electricity | Power consumption for showroom & offices | $1,200 | $14,400 |
| Water | Water usage | $300 | $3,600 |
| Gas | Gas for heating | $400 | $4,800 |
| Internet & Phone | Internet service and business phone | $200 | $2,400 |
| Waste Removal | Garbage and recycling services | $150 | $1,800 |
| Pest Control | Monthly pest control services | $75 | $900 |
| Insurance | Property and liability insurance | $600 | $7,200 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| General Manager | 1 | $6,000 | $6,000 | $72,000 |
| Sales Manager | 1 | $5,000 | $5,000 | $60,000 |
| Sales Associates | 5 | $3,000 | $15,000 | $180,000 |
| Finance Manager | 1 | $4,500 | $4,500 | $54,000 |
| Service Technicians | 3 | $3,500 | $10,500 | $126,000 |
| Receptionist | 1 | $2,500 | $2,500 | $30,000 |
| Detailers | 2 | $2,000 | $4,000 | $48,000 |
3. Vehicle Inventory Costs
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| New Vehicles | Cost of new cars from manufacturers | $200,000 | $2,400,000 |
| Used Vehicles | Cost of pre-owned cars | $100,000 | $1,200,000 |
| Parts Inventory | Spare parts and accessories | $10,000 | $120,000 |
| Detailing Supplies | Cleaning and detailing products | $500 | $6,000 |
| Office Supplies | Stationery, printer ink, etc. | $300 | $3,600 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $1,000 | $12,000 |
| Social Media Management | Managing social media accounts | $800 | $9,600 |
| Print Advertising | Flyers, posters, newspaper ads | $500 | $6,000 |
| Website Maintenance | Hosting, domain, updates | $150 | $1,800 |
| Email Marketing | Email campaigns and newsletters | $200 | $2,400 |
| Promotional Events | Special events and promotions | $300 | $3,600 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of service equipment | $600 | $7,200 |
| Uniforms | Staff uniforms and name tags | $250 | $3,000 |
| Licenses & Permits | Business licenses, dealer permits, etc. | $150 | $1,800 |
| POS System | Point of Sale software and hardware | $200 | $2,400 |
| Contingency Fund | Emergency repairs and unexpected costs | $700 | $8,400 |
| Staff Training | Training programs and materials | $300 | $3,600 |
Some car dealerships make 5x more profit than you!
We have studied the strategies of the best car dealerships in the world. Replicate them now!
What are the biggest expenses for a car dealership?
Be careful with these pitfalls. Here are five major costs every car dealership owner needs to consider, along with some tips on how to handle them wisely.
- Vehicle Inventory CostsThese can consume a significant portion of your budget. You're dealing with high-value items, and prices can fluctuate based on market demand, manufacturer incentives, and model popularity. To keep these costs in check, focus on maintaining an optimal inventory level, negotiate better terms with manufacturers, and minimize holding costs. Finally, it's easy to overspend by stocking too many vehicles or opting for high-end models that don’t sell quickly.
- Staffing at Your DealershipYour staff is your backbone, but paying for their wages, benefits, and training can be expensive. This cost is always high because you need a certain number of employees to provide excellent service and keep operations running smoothly. You can optimize labor costs by scheduling efficiently, cross-training staff, and monitoring productivity. However, be careful not to underpay or overwork your staff, as this can lead to high turnover and poor customer service.
- Rent and Utilities of Your DealershipPrime locations come with high rent, but they can attract more customers. Utilities like electricity, gas, and water are essential but add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient appliances and lighting. Overspending often happens when you choose a location that's too big or too fancy for your needs.
- MarketingYou need to get the word out about your dealership, but advertising can be pricey, whether it's online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective methods like the ones we give in our pack. Overspending can happen if you invest in flashy campaigns without a clear return on investment.
- Showroom and Maintenance CostsThis includes everything from showroom decor to service equipment. These are expensive because quality facilities and regular maintenance are crucial for smooth operations and customer satisfaction. Optimize by investing in durable, energy-efficient equipment and maintaining it regularly to avoid costly breakdowns. You can overspend by going for the latest high-tech gadgets you don’t really need.
How to spend less with your car dealership?
Here are practical tips to help you, as a car dealership owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Vehicle Inventory | Partner with multiple manufacturers to get the best deals and diversify your inventory. |
| Labor Costs | Implement a scheduling software to optimize staff hours and reduce overtime. |
| Utilities | Install LED lighting and energy-efficient HVAC systems in your showroom and service areas. |
| Marketing | Run social media contests for your dealership and collaborate with local influencers for free exposure. |
| Cleaning Supplies | Train staff on efficient use of cleaning supplies to reduce waste. |
| Equipment Maintenance | Set up a maintenance log for regular checks and servicing of diagnostic and repair equipment. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider moving to a less expensive location. |
| Insurance | Regularly review insurance policies to ensure they meet current needs and compare rates annually. |
| Office Supplies | Purchase supplies in bulk and go paperless where possible with digital order systems. |
| POS System | Choose a POS system that offers essential features with low transaction fees and integrates with other systems. |
| Staff Training | Conduct regular in-house training sessions and use free online resources. |
| Waste Management | Implement a recycling program for parts and materials to minimize waste. |
| Technology | Invest in multi-functional diagnostic tools and utilize dealership management software for inventory and sales tracking. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals. |
| Transportation | Plan delivery routes to maximize efficiency and reduce fuel costs for vehicle transport. |
| Inventory Management | Use inventory management software to track stock levels and reduce overstocking. |
| Pest Control | Schedule monthly pest control services and maintain cleanliness standards to prevent infestations. |
| Customer Amenities | Use a streaming service for background music in the showroom and offer complimentary refreshments during peak times. |
| Uniforms | Choose durable, easy-to-clean uniforms and offer staff a stipend for maintenance instead of using an external service. |
Copy the tactics of the best car dealerships in the world!
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Expenses that are just useless for a car dealership
Yes, some expenses for your car dealership are just unnecessary. They don't contribute to increasing sales or improving customer satisfaction.
| Dealership Expense | Reason It's Useless |
|---|---|
| Luxury Showroom Decor | Overly extravagant decor doesn't necessarily attract more buyers and can be a drain on the budget. |
| Premium Coffee Brands | Unless you are a high-end dealership, most customers are satisfied with standard coffee options. |
| Excessive Vehicle Inventory | Maintaining a large inventory increases holding costs and can lead to depreciation losses. |
| High-End Office Equipment | Top-of-the-line office equipment is not always necessary and can be cost-prohibitive. |
| Traditional Print Advertising | Paper ads often have a lower return on investment. Don’t include them in the marketing strategy of your dealership. |
| Multiple Uniform Styles | Having various uniform styles increases costs without adding significant value to the customer experience. |
| Excessive Staff | Overstaffing leads to higher labor costs without necessarily improving service quality. |
| Premium Subscription Services | Expensive subscriptions for magazines or streaming services often go unnoticed by customers. |
| Exclusive Vehicle Models | Stocking rare models can inflate costs and complicate inventory management. |
| Costly Furniture | High-end furniture is not always appreciated by customers and can be a significant expense. |
| Custom Printed Materials | Personalized brochures and materials are a minor detail that most customers overlook, and they can be expensive. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Water Brands | Most customers are content with filtered tap water, making expensive bottled water unnecessary. |
| Extra Service Vehicles | Maintaining a larger fleet than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Renovations | Constantly updating the showroom can be costly and disrupt operations. |
| Expensive Showroom Displays | Elaborate displays are often ignored by customers and add to the cost. |
| High-End Office Supplies | Luxury office supplies are prone to damage and expensive to replace, often going unnoticed by customers. |
| Excessive Staff Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Marketing Materials | Frequently redesigning marketing materials is costly and often unnecessary. |
| Unused Promotional Items | Ordering more promotional items than needed leads to waste and unnecessary expense. Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Service Equipment | Specialized service equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your car dealership!
Managing a budget for a car dealership when funds are tight can feel like a nightmare. It's like being stuck in a traffic jam where any unexpected expense can bring your operations to a halt.
This constant pressure makes it nearly impossible to invest in growth projects, leaving you always chasing after expenses. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, scraping together pennies and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on growing your revenue. More income means more breathing room and more money to invest in your dealership.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of car dealerships just like yours. Get them now!
Make your car dealership more profitable
We have studied the strategies of the best car dealerships in the world. All their tactics are explained in our pack!
