Car Dealer Inventory Management Software

car inventory management in a car lot

Inventory management for car dealers is a broad concept. It can mean the entire functionality of a DMS (dealer management system). The way we are using it here is basically from purchasing to sales, excluding the marketing. This includes:

  • Auctions
  • Manufacturers
  • Trades
  • Floor Planning
  • Transportation
  • Reconditioning (or getting the car ready for sale)
  • Retrieving Specifications (typically via VIN decoder)

Purchasing: Auctions, Trades, Manufacturers

All car dealers sell used cars. Even if they sell mostly new cars, they trade for most of their sales and eventually they need to sell the used cars they got through trades. Even though they could sell it in auctions exclusively and not offer a public used car lot this is extremely rare since it is more profitable to sell them in other avenues. In any case, dealers purchase cars through a few key channels which require different management: auctions, trades, from manufacturer. Read more...

Dealer Floor Planning

Most dealers do not have the capital to fully own all the inventory in their car lots. Most manufacturers have a financing arm that helps with financing for dealers. Likewise, most auction organizers provide financing options at the premises. When dealers finance their purchases it is typically a short term loan that should be paid as soon as the vehicle is sold. Terms may be such that if it is not sold within x days, part of the payment is required. Typically in 90 days if the vehicle is not sold, full payment is required. These inventory loans are known as dealer floor plans or floor planning for short. Read more...


Most dealers go to the auctions near by. However, it is not uncommon for dealers to shop for cars in auctions quite far from their headquarters. This can be due to a special vehicle request or simply a good catch. As dealers grow, this becomes more and more common. Franchised dealers also need to have their cars transported. Transportation costs add up and need to be tracked. This is part of inventory management. Read more...

Reconditioning and Prep Work

Once a car is brought in to the dealer, it needs to be prepared for sale. If it is a used car, this mostly means reconditioning. Vehicles typically go through a mechanic check - sometimes for certification programs. They may need to be repaired, certain parts may need replacement. At the very least they need to be detailed. For new cars, the process is less extensive but some work needs to be done. In any case, reconditioning costs add up and they need to be tracked as well. Read more...

Specifications and VIN Decoder

Also part of getting a car ready for sale is retrieving specifications and equipment info. At the very least this is necessary for marketing. It is good to highlight the best features of your product. But also this is needed for inquiries. When a customer calls and asks what the horse power is, you should be able to give an answer quickly. This is done with a software component called VIN decoder. Read more...

Web Based Dealer Management System by Carsinia