We can't stress enough how much car dealerships need inventory management to thrive. When done right, inventory management ensures you have the right vehicles available to meet current customer demand. Overstocking or running out of in-demand cars impacts profitability.
Given the importance of inventory management, many dealerships dedicate a considerable amount of time and resources to this process. But there's a better way: using an automated inventory management system. Making the switch from a manual to an automated system will help your dealership hit new heights. Consider these five benefits of implementing an automated inventory management system at your dealership.
1. Quicker Car Inventory Turnover
According to 2024 Q3 data, the industry-wide average number of days to turnover a used car was 48 days1. Shorter inventory turnover is a good sign. It shows your dealership is selling vehicles quickly and replacing those sold vehicles with new inventory to keep up with demand.
Implementing an automated inventory management system can help you improve your inventory turnover by ensuring you stock vehicles that your customers want to buy. These systems can automatically analyze market data and recommend vehicles to add to your inventory based on current customer demand. Stocking these in-demand vehicles will lead to more sales and faster inventory turnover.
2. Insights into Your Dealership Sales History
Do you know which vehicle is your dealership's top seller, fastest mover, or most profitable? With automated inventory management software, you never have to wonder. The system will regularly analyze your dealership's sales history to determine which vehicles are selling well and which aren't.
You can then use those insights to shape your inventory management strategy going forward. The software may show that you should buy more specific vehicles and fewer of others so your inventory mix best reflects what your customers actually want to buy right now. If your sales data changes, the software can adjust and offer new recommendations.
3. Better Demand Forecasting
It takes time to purchase vehicles for your dealership, transport them, and add them to your inventory. So, when you're shopping for vehicle inventory, those decisions are based on your idea of what customers will want in the future—not necessarily what they want right now. You need to predict which vehicles customers will want to buy and how high the demand for them will be.
Inventory management software can analyze market data and your sales history to perform demand forecasting on your behalf. The software will analyze seasonal vehicle purchasing data, other market trends, and current customer purchasing patterns to predict future demand as accurately as possible. Then, you can take those insights and purchase inventory that matches the forecasted demand.
4. Improved Vehicle Pricing
The average price of a used car in the U.S. is $25,547 as of April 20252. The average new car is selling for nearly $50,0002, but are those the correct prices for the vehicles in your inventory?
One of the trickiest tasks for car dealership management is setting vehicle prices. If you price your vehicles too high, customers will look to other dealerships for better deals. If you price your vehicles too low, you're missing out on potential profit. You have to strike the perfect balance.
An automated inventory management system like the one from ACV MAX can help you do exactly that. ACV MAX's inventory management tool utilizes real-time market data, OEM build data, and other relevant information to generate precise and accurate prices for each vehicle in your inventory. It even includes pricing proof points supported by JD Power, Carfax, and Kelley Blue Book.
5. Increased Dealership Profitability
Overstocking your dealership, not buying enough vehicles, or even stocking the wrong vehicles—these are all costly mistakes. An automated inventory management system will help you avoid them by providing data-based insights into your inventory. With a solid system in place, you can make more informed decisions about which vehicles to buy and how many to stock. This way, you don't run into expensive inventory management mistakes.
Supercharge Your Dealership’s Inventory Management
Automating your inventory management will save your dealership time, money, and effort, giving you a competitive edge. Just ensure you select the right system to reap all the benefits.
ACV MAX's inventory management tool uses real-time market data and your dealership's sales history to provide accurate, actionable insights. The system will help you select the right vehicles to stock, manage your inventory levels, and price your vehicles for optimized sales. Schedule a demo to see ACV MAX in action today.
Sources:
- Van Bramer, J. (13 September 2024). Used-vehicle turnover rate rises 8% YoY. Auto Finance News. Retrieved May 30, 2025, from https://www.autofinancenews.net/allposts/risk-management/used-vehicle-turnover-rate-rises-8-yoy/
- Tucker, S. (20 May 2025). Is Now the Time to Buy, Sell, or Trade in a Car? Kelley Blue Book. Retrieved May 27, 2025, from https://www.kbb.com/car-advice/is-now-the-time-to-buy-sell-or-trade-in-a-used-car/
