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June 7, 2004 – Dealer profit 6.5% in April

June 7, 2004
Filed under Features

April profit margin for Top Gun dealers nationwide was 6.5%, down from 8.8% in March, and off from 9.1% in April 2003. Year to date profit margin was 6.3%, off slightly from the 6.6% recorded through the first three months of the year. For

the first four months of 2003, the profit margin was 8.1%

Showroom traffic was up 2% over the same month last year.

Gross profit per vehicle financed was $487 in April, up from $476 the previous month and up from $368 in April 2003. psb

Gross Profit Per Hour

To calculate Gross Profit per effort hour, take the total gross profit generated by your P&A department for a given month or pay period. Divide that number by the total number of hours worked (clock hours) for all members of the P&A team, regardless of title, for the same period. If someone works in P&A as well as another department, estimate the number of hours they worked in Parts.

Average Invoice To Walk-in P&A customers

To see how you compare, determine your total gross sales to walk-in customers. Be sure to exclude all wholesale, mail-order, service through repair orders, and P&A sold with major unit sales. Then divide your gross sales by the number of transactions to those walk-in customers.

OEM Parts Sales Compared To Accessory Sales.

If your accessory sales dollars do not equal your total OEM parts business, your customers are buying from sources other than you.

Service Effective Labor Rate

                                                                                                                                                                                                                                                               Floor traffic at participating dealerships is determined by analyzing Guest Logs, information sheets filled out by visiting consumers. The percentage change is the difference a month and the same month the previous year.</p>
<p>Average Gross Profit per Vehicle Financed is based on the profits from all extended service agreements, the commissions on insurance policies and 50% of service maintenance programs, sold for at least three years. 2003 does not include DOC fees.This represents net profit as a percentage of sales before depreciation and with all owner salaries adjusted to reflect the true value of the job performed. Rent amounts are also adjusted to reflect true market value of the facility when it is shareholder owned and leased back to a corporation.
To determine your effective labor rate, take the total Service team effort hours (techs and all support personnel, including porters) and divide that amount into your gross labor sales for the same period.

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