Digitisation of the Vehicle Audit Process

We conclude this short series (you can read the previous articles here and here) with a detailed examination of how one particular aspect of dealer businesses, vehicle inventory management, is being transformed through digitisation and the use of artificial intelligence.

Traditionally, inventory audits have been carried out manually, often by trained auto finance provider staff, travelling around dealer sites to gain a snapshot of financed vehicles on site. Then, paperwork is completed and returned to the funder’s headquarters for input into their systems.

This manual process has clear disadvantages:

• The cost (and opportunity cost) of using expensive resource to travel to numerous locations to undertake the audits
• Interruption to dealer BAU as funder staff complete their reviews
• The potential for lengthy gaps between audits carried out on a periodic basis
• The degradation of the information collected before it can be input to funder systems

To overcome this, many auto finance providers have begun to switch to a digitised process carried out in conjunction with dealer groups. Systems, like CheckVentory Audit, replace funder audit visits with cloud-based software accessed through mobile devices. This allows dealer staff members to record stock on-site rapidly and deliver the inventory data instantaneously to the funder’s back office. Solutions like this facilitate more frequent audits and richer, more accurate data to be collected.

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While better quality data is a valuable end in itself, the benefits of audit digitisation for both the funder and the dealer group can be wide-reaching.

Informed Vehicle Acquisition

The data collected through a digital auditing process can easily be transformed into robust management information. One area where this is invaluable is in the acquisition of stock, where a detailed understanding of which vehicles turn over most rapidly and with the highest margin is essential.

In the current market, where used vehicle supply is outstripped by demand, many businesses have begun to hold brands and types of vehicles that they would not previously have considered in order to fill showrooms and provide enhanced choice to eager consumers. Stepping outside of the standard acquisition comfort and experience zone in this way increases the reliance on data-driven insight still further.

Effective Stock Management

Solutions like CheckVentory Audit provide a continual overview of each dealers’ portfolio and credit risk. With this information to hand for both funder and dealer, stock management issues are quickly highlighted and can be effectively remedied. Common examples are:

• Inventories being incomplete, with vehicles being missed due to gaps in the audit process and therefore not included in digital sales channels or sales teams’ stock lists
• Incorrect vehicle locations being recorded, meaning disappointment for potential customers and lost sales
• Inventory information being inconsistent across a number of different data sources
• Degradation of inventory data as stock turnover occurs increasingly rapidly

The shared pain points for auto finance providers and dealerships caused by these errors are wasted sales opportunities, reduced cash flow and limited growth. For funders specifically, these gaps also raise issues related to confidence in further lending and levels of non-compliance and fraud.

Identifying Growth Opportunities

Auto finance providers’ growth is intrinsically tied to growth in their dealer partners’ businesses. For funders, being able to make a well-informed assessment of each dealer groups’ risk profile and their potential for future growth is essential for making good lending decisions. Digital auditing tools can play a crucial role in monitoring dealer finance portfolios and making important decisions about which partners to back and which to avoid. Key elements of insight include:

• Up to date and accurate data on the extent and value of each dealers’ financed portfolio.
• Precise location of all funded assets across multi-site dealer groups at any given time.
• Any changes in a dealer’s risk profile or their overall financial well-being.

With the availability of this insight, the efficiencies to be gained through enhanced stock management, and more resources focused on chasing leads and closing deals, digital audit solutions can significantly contribute to growth.

AI and Machine Learning in Auto Finance

One of the more recent developments in digitised vehicle inventory auditing is the introduction of artificial intelligence and machine learning. While some sectors of the auto financing market have been relatively slow to identify the benefits of this technology, organisations like CheckVentory have been quick to grasp the advantages they can provide.

Perhaps the most obvious benefit that comes with systems capable of self-learning is their ability to detect patterns across vast amounts of data. These patterns can be subtle and extremely difficult to identify, even for the most skilled analyst. With rapidly changing consumer behaviours and ongoing uncertainty in the auto wholesale market, identifying trends in performance across the vehicle inventory as they emerge is paramount for growth.

Added to this, AI-enabled software facilitates the consolidation of data feeds from multiple internal and external data sources. By identifying non-standard factors that can link records and quickly identifying discrepancies where they do exist, a more complete and validated appraisal of the dealer’s stock portfolio is made possible.

Final Thoughts

If the automotive finance sector has been slower than other industries to adopt digitisation in the past, it’s clear that the rate of adoption of new technologies is gathering pace. Dealer groups are increasingly looking to their funder partners to assist them in this transformation, and it’s imperative for these funders to be able to offer the right solutions and provide the necessary support to implement them. By doing this, the best dealerships will survive and thrive, even in the face of competition from online disruptors, and the most agile funders will benefit accordingly.

How CheckVentory Audit Can Help

CheckVentory Audit gives auto finance providers confidence in identifying dealer groups that offer the greatest potential for growth while highlighting areas of risk where they exist. The technology used increases operational efficiency and promotes a collaborative partnership between funder and dealer in understanding and optimising their stock inventories.