Automating multiple elements of digital used car marketing could save dealer groups as much as £1m a year, according to Autofinity.

A million pounds back on the bottom line is a fairly bold claim, but the vehicle inventory platform provider has crunched some numbers to help illustrate the potential efficiency savings afforded by introducing more elements of automation to used car departments.

Autofinity said it undertook an in-depth analysis to highlight the price tag of marketing a used vehicle online while in stock.

A one million pound saving: Show your working out…

Autofinity’s chief solutions officer Chris Banks crunched the numbers following discussions with several dealer groups.

The analysis listed the variety of tasks required by staff to merchandise a vehicle and identified 21 separate tasks including updating prices; validating the vehicle’s price in the market; amending classified portals, the dealer’s own website and the manufacturer website; review market vehicle rating; and manage inbound leads.

Each task was assigned the time taken to complete which could be as little as one minute once a week.

Initial setup such as inputting the vehicle to the DMS, taking and uploading images and video, and putting a vehicle live on various websites and classified portals, was calculated to take 46 minutes.

At an hourly rate of £13, it translated to £20.15 per vehicle. Ongoing weekly maintenance of 142 minutes (two hours and 22 minutes) per vehicle cost £30.77 for dealership staff to complete. 

Once applied to a stock holding of 2,000 vehicles, the initial merchandising set up cost amounted to £40,300. Working on an average 45 days in stock and a turn rate of 8.11, those figures translate to £326,878. 

Factor in ongoing updates and administration costs while vehicles remain in stock and marketed on websites and portals, the cost spirals to £61,533 per week (for a stock of 2,000 vehicles) or £266,644 per month. The annual cost is £3,199,733.  

Automation can make a quick impact

Banks said: “We were conservative in our estimates of the time to complete a task and how often these are undertaken over the course of the vehicle in stock.

“We liaised with our dealer group partners to check the authenticity of our figures.

“When we showed our analysis, the feedback was almost a resigned realisation that the cost to the business both in terms of resourcing and pounds and pence was so high.”

Banks said the point of this number crunching exercise is to show in granular detail the expenditure on one part of the business and explain how automation can improve efficiency to save costs, as well as free up time.

He said: “Even we were shocked. 

“On the positive side, automation can very quickly make an impact and using the same modelling we have calculated that a dealer group could save more than £1 million a year.”

Autofinity said it can provide a tailored analysis of a dealership or dealer group’s potential savings by applying its modelling and overlaying specific tasks and timings.