Your dealership’s appraisal process ultimately determines the profit potential of each vehicle on your lot. If the car appraisal is wrong, you’re more likely to lose money on the sale. A reliable process in key for your dealership to optimize profit on every vehicle.
Auto Appraisals Can Vary
Appraisal variability is a common problem in dealerships. Individuals often have different approaches to evaluating vehicle condition, purchase price, and recon costs. Different approaches can mean different calculations.
Reasons Behind Car Appraisal Variability
1. Skills and Training – The level of expertise and industry knowledge between individual appraisers can vary drastically.
2. Time Crunch – Appraisers may need to make decisions in a short amount of time.
3. Dealership best Practices – Rules, guidelines, and metrics that are important to the dealership can vary.
4. Individual Vehicles – Vehicles may have unique circumstances that impact the appraisal.
5. Lack of Insight – The person pricing the car may not know all of the details of the appraisal. Impacting the vehicle’s retail outcome.
While some of these factors are out of your control, you do have a chance to mitigate them by implementing a more consistent appraisal process.
Making Auto Appraisals More Consistent
The key to a more consistent approach is to use a process that targets your profit and volume goals. This way, appraisers can work from a range of car prices to determine the appraisal value. When the appraisal and pricing processes are connected, you are going to make more profit on each vehicle. In the long run, a more consistent approach will result in more profit overall!
Finding the Right Appraisal Tools
Leveraging technology can help your dealership have a consistent, strategy-based approach for appraising cars. Carketa’s pricing & appraisal tools bring live market data and comps from dealerships across North America together to help you and your team make appraisal and pricing decisions that drive profit.
