http://acarreport.com/ The ACAR Report - Blog RSS Feed 2.0 en-us Tue, 07 Apr 2026 07:01:39 GMT Tue, 07 Apr 2026 07:01:39 GMT http://acarreport.com/blog/23006/4th-Quarter-will-Make-or-Break-2023---Are-you-Ready- blog Planning for the final quarter of the year is crucial to ensuring that you meet your net profit expectations for 2023. Develop a clear forecast with manager buy-in:   Is gross per unit and gross % of sales high enough, are you letting gross walk out the door? Make sure to set the bar high enough. Are your goals specific, measurable & realistic? Do you have the correct inventory and mix needed to meet goals? Does your current expense structure allow you to achieve the net profit you envision? What changes need to be implemented to achieve your forecast? If you need a fresh perspective on how to build profitability, please do not hesitate to reach out. 1-888-409-ACAR (2227) ACAR's Quarterly Profit Planner quickly assists in producing a road map in building the 4th Quarter plan to meet your 2023 expectations. Wed, 04 Oct 2023 06:00:00 GMT http://acarreport.com/blog/23006/4th-Quarter-will-Make-or-Break-2023---Are-you-Ready- http://acarreport.com/blog/22250/Avoid-Phantom-Floorplan-Assistance-Income--Change-It-Now blog Do you record floorplan assistance when the vehicle is received? If so, with such low inventories, this is the time to change. Traditionally assistance is recorded as income when the vehicle is booked into inventory, sometimes before the vehicle arrives at the dealership.   We recommend realizing income when the vehicle is sold. Individuals paid on that revenue should be rewarded when the sale is made, not by increasing your inventory.  Also, when floorplan assistance is not matched with sales, it makes unfavorable months look more profitable than actual.  Rebates and dealer cash are recorded when you sell the vehicle, so why not interest credits. It is a difficult process to initiate since you usually have high volumes of inventory, which makes for a sizable adjustment to income.  If you normally have 200 new units in inventory and your average floorplan assistance is $450 you have already recorded $90,000 of income without a sale.   With these abnormally low inventories it renders the process painless.  For example: with only 20 new units in inventory with average floorplan assistance of $450 you only have $9,000 of unrealized income, much easier to reverse than $90,000.  See estimated reserves below.  In this example if your inventory goes up 100 vehicles in December you will have $45,000 of income, just because your inventory increased. Switch to recognizing floor plan assistance when you sell the vehicle by taking your unrealized income and setup an interest assistance reserve account with the $9,000 initial adjustment which you offset against floorplan assistance income.  The reserve account can be a contra receivable account setup in assets or a reserve setup as a current liability account.   Whenever you record an invoice, you will record your floorplan interest assistance to that account, and it will have no effect on income.  At the end of the month calculate your reserve balance by multiplying your ending new inventory units by your average inventory assistance.   Take the difference to floorplan assistance income.  Now income will be recognized when you sell the vehicle.  Please discuss with your tax advisor regarding tax issues.  Note â€" your DMS provider may have an automated solution. Once converted to this method, income will be recognized when earned and pay plans will be based on generating profits and not by ordering more inventory.   Tue, 24 Aug 2021 06:00:00 GMT http://acarreport.com/blog/22250/Avoid-Phantom-Floorplan-Assistance-Income--Change-It-Now http://acarreport.com/blog/21855/January-Financial-Statement-Checklist blog Wed, 03 Feb 2021 06:00:00 GMT http://acarreport.com/blog/21855/January-Financial-Statement-Checklist http://acarreport.com/blog/21274/ACAR-Report-Notes-----June blog With early results in, it looks like May is showing a strong rebound. New inventory levels are very low, so make sure you are getting all the gross. As the country opens and PPP wraps up it is time to evaluate our staffing needs thru the end of the year. We suggest building to what an average month will look like. Concerns: Furloughed employees â€" who and when to bring back PPP wrapping up â€" no longer necessary to manage headcounts and compensation   Opportunities: With high unemployment a good time to upgrade your staff Re-Design Pay Plans â€" sales, gross and CSI components Re-Distribute duties Re-Align workspaces, counters, and offices for efficiency Eliminate mediocre employees (unless legal reasons prevent)   In discussion with dealers, the new hours have been very beneficial and are changing staffing needs. Be very thoughtful as you begin increasing hours. If it does not generate gross or market share to cover those additional costs, do not change those hours. Also, with changes in processes and new technologies implemented in the last two months there are shifting expectations. For example, salespeople traditionally need to average at least 11 units per month. Should that now be 15 or 20 with more appointment setting and at home deliveries? Is it time to try a new approach? List duties by position so you can see if the appropriate person is responsible for those duties. I have heard many stories about indispensable employees and once they were furloughed, it turns out they were not needed in the first place. As you break out responsibilities verify that highly compensated employees are only doing high level work. If someone at $14 an hour can perform the duties of an $8,000 a month person, they should be performing those tasks. For example, an “A” tech should not be working on reconditioning. By moving duties to the appropriate position, it will free up managers to be better utilized or allow you to work with fewer managers. As our dealers have been forced to change, they are seeing surprising results and will be changing processes significantly going forward. Make sure you are making a To Do List to keep implementing these changes. As you work thru your new staffing needs please use the Re-Focus Profit Planner for the listing of your employee head counts and compensation. Also, we have templates to inventory all positions in the dealership and compare back to where they are recorded on the statement, you may be surprised. Just give us a call at 1-888-409-2227 if you would like to discuss. Mon, 08 Jun 2020 06:00:00 GMT http://acarreport.com/blog/21274/ACAR-Report-Notes-----June http://acarreport.com/userfiles/1263/images/CosttoSellupdated%2Ejpg http://acarreport.com/ http://acarreport.com/blog/21109/Forecast-Essentials-----It-Costs--2-400-to-Sell-a-Vehicle blog Do you know how much it costs to sell a vehicle in your dealership? Very few dealers realize that the average cost to sell a vehicle is $2,400. In my discussions, I have found that most managers and dealers assume the cost to sell is $600 - $1200. To calculate your cost to sell, take your total new & used expenses on your factory financial statement and divide by total retail units. Depending on the manufacturer, this number has already been reduced by advertising and floor plan credits. Thu, 23 Apr 2020 06:00:00 GMT http://acarreport.com/blog/21109/Forecast-Essentials-----It-Costs--2-400-to-Sell-a-Vehicle