![How to plan and track the budget of your used auto sales dealership [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-1_6e087fe8-6c71-4880-8aa6-9d18a34e1145.png?v=1715856359&width=1100)
If you don’t plan and track your used car dealership's budget properly, you're setting yourself up for failure.
When we developed our strategy pack for auto 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 sales.
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 auto dealerships
Most auto dealership owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for auto dealerships
Here is an example of a (very) detailed budget for a used auto sales dealership, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for dealership lot and office space | $6,000 | $72,000 |
| Electricity | Power consumption for office and lot lighting | $500 | $6,000 |
| Water | Water usage for office and car washing | $150 | $1,800 |
| Internet & Phone | Internet service and business phone | $200 | $2,400 |
| Waste Removal | Garbage and recycling services | $100 | $1,200 |
| Insurance | Property and liability insurance | $600 | $7,200 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Sales Manager | 1 | $5,000 | $5,000 | $60,000 |
| Sales Associates | 3 | $3,000 | $9,000 | $108,000 |
| Mechanic | 1 | $4,000 | $4,000 | $48,000 |
| Detailer | 1 | $2,500 | $2,500 | $30,000 |
| Office Administrator | 1 | $3,000 | $3,000 | $36,000 |
3. Vehicle Inventory Costs
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Vehicle Purchases | Cost of acquiring used vehicles | $50,000 | $600,000 |
| Vehicle Reconditioning | Repairs and detailing for resale | $5,000 | $60,000 |
| Vehicle Transport | Shipping and transport costs | $1,000 | $12,000 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $500 | $6,000 |
| Social Media Management | Managing social media accounts | $300 | $3,600 |
| Print Advertising | Flyers, posters, newspaper ads | $200 | $2,400 |
| Website Maintenance | Hosting, domain, updates | $100 | $1,200 |
| Email Marketing | Email campaigns and newsletters | $150 | $1,800 |
| Promotional Events | Special events and promotions | $200 | $2,400 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of office and lot equipment | $300 | $3,600 |
| Uniforms | Staff uniforms and name tags | $100 | $1,200 |
| Licenses & Permits | Business licenses and permits | $150 | $1,800 |
| POS System | Point of Sale software and hardware | $200 | $2,400 |
| Contingency Fund | Emergency repairs and unexpected costs | $500 | $6,000 |
| Office Supplies | Stationery, pens, printer ink, etc. | $100 | $1,200 |
| Staff Training | Training programs and materials | $200 | $2,400 |
Some auto dealerships make 5x more profit than you!
We have studied the strategies of the best auto dealerships in the world. Replicate them now!
What are the biggest expenses for a used auto sales dealership?
Be careful with these pitfalls. Here are five major costs every used auto sales dealership owner needs to consider, along with some tips on how to handle them wisely.
- Vehicle acquisition costsThese can take up a significant portion of your budget. You're dealing with fluctuating market prices, auction fees, and transportation costs. To keep these expenses in check, focus on buying vehicles that have a high resale value, negotiate better deals with suppliers, and minimize transportation costs. Finally, it's easy to overspend by purchasing too many vehicles or opting for high-end models that don’t sell quickly.
- Staff 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 good service and keep things 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 service.
- Rent and utilities of your dealershipPrime locations come with high rent, but they can attract more customers. Utilities like electricity, water, and internet 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.
- Maintenance and repair costsThis includes everything from vehicle repairs to maintaining your dealership's facilities. These are expensive because quality repairs and regular maintenance are crucial for smooth operations and customer satisfaction. Optimize by investing in durable, reliable 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 used auto sales dealership?
Here are practical tips to help you, as a used auto sales dealership owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Vehicle Acquisition | Partner with local auctions and trade-in programs to acquire quality vehicles at lower prices. |
| 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 offices. |
| 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 and maintain vehicle presentation. |
| Equipment Maintenance | Set up a maintenance log for regular checks and servicing of diagnostic tools and other 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 contract 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 to keep staff updated on sales techniques and product knowledge. |
| Waste Management | Implement a recycling program for office waste and vehicle parts to minimize waste and reduce disposal costs. |
| Technology | Invest in multi-functional diagnostic tools and utilize dealership management software for inventory and customer relationship management. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals. |
| Transportation | Plan vehicle delivery routes to maximize efficiency and reduce fuel costs. |
| Inventory Management | Use inventory management software to track stock levels and reduce overstocking. |
| Customer Amenities | Offer cost-effective amenities like free Wi-Fi and coffee to enhance customer experience without breaking the bank. |
| 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 auto dealerships in the world!
There are auto dealerships that make way more money than you do. We have studied their tactics. Get them now!
Expenses that are just useless for a used auto sales dealership
Yes, some expenses for your used auto sales 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 lavish showroom decorations don't necessarily attract more buyers and can be a drain on the budget. |
| High-End Coffee Machines | Unless you are a luxury 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. |
| Top-Tier Office Equipment | High-end office equipment is not always necessary and can be cost-prohibitive. |
| Traditional Print Advertising | Traditional print 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. |
| Overstaffing | 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 vehicle models can inflate costs and complicate inventory management. |
| Costly Office Furniture | High-end office furniture is not always appreciated by customers and can be a significant expense. |
| Custom Printed Stationery | Personalized stationery is a minor detail that most customers overlook, and it 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 and office layout can be costly and disrupt operations. |
| Expensive Showroom Centerpieces | Elaborate centerpieces 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 Materials | 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 used auto sales dealership!
Managing a budget for a used auto sales dealership when funds are tight can feel like a nightmare. It's like being stuck in a rut where any unexpected expense can derail your entire operation.
This constant pressure makes it nearly impossible to invest in growth opportunities, leaving you always scrambling to cover costs. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, scraping together every dollar 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 increasing your revenue. More income means more breathing room and more money to reinvest in your business.
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 boost your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of dealerships just like yours. Get them now!
Make your used auto sales dealership more profitable
We have studied the strategies of the best auto dealerships in the world. All their tactics are explained in our pack!
