Dealer Glossary for New Zealand
Key automotive dealership terms explained for new zealand professionals.
Dealer Management System (DMS)
A Dealer Management System (DMS) is the central software platform that auto dealerships use to manage all core business operations, including vehicle sales processing, service and repair orders, parts inventory, accounting, and reporting. Leading DMS platforms include CDK Global, Reynolds & Reynolds, Tekion, DealerSocket, and DealerTrack. While a DMS records all transactions, it does not natively capture why pricing decisions were made — a gap that dealer intelligence platforms like DealerInt fill.
Automotive CRM
Automotive CRM (Customer Relationship Management) software is a platform designed specifically for car dealerships to manage customer relationships from initial lead contact through purchase and beyond. Automotive CRMs handle lead assignment, follow-up cadences, BDC workflows, appointment scheduling, and customer communication. Popular platforms include VinSolutions, Elead, DealerSocket CRM, and DriveCentric. CRMs track who bought — but do not track the profitability of each deal or why prices were changed.
Pricing Override
A pricing override at a car dealership occurs when a manager authorizes the sale of a vehicle or F&I product at a price below the dealership's baseline or target price. Overrides are a normal part of automotive retail — competitive situations, loyal customers, and month-end urgency all create legitimate override scenarios. The problem is that most overrides are not documented with a structured reason, making it impossible to audit whether overrides are strategic or simply undisciplined. DealerInt captures every override in real time with a mandatory reason code and margin impact calculation.
Front-End Gross
Front-end gross profit is the margin a dealership earns on the sale of a vehicle, calculated as the difference between the sale price and the vehicle's cost basis (invoice plus pack and other variable costs). Front-end gross does not include F&I product revenue, which is called back-end gross. The sum of front-end and back-end gross is total gross per vehicle retailed (PVR). Front-end gross is the first casualty of pricing overrides — every dollar given away at the desk is pure margin loss that cannot be recovered in F&I.
Back-End Gross
Back-end gross profit is the revenue a dealership earns from financing and insurance (F&I) products sold after the vehicle price has been agreed upon. This includes dealer reserve (the markup on loan interest rates), extended warranties (VSC), GAP insurance, tire and wheel protection, paint and fabric protection, and other ancillary products. A well-run F&I department can generate $1,500–$2,500+ in back-end gross per vehicle retailed. Like front-end gross, back-end gross is subject to override loss when F&I managers discount products to close deals.
Holdback
Holdback is an amount paid by a vehicle manufacturer to a dealership after a vehicle is sold. Typically calculated as 1–3% of MSRP (or base invoice), holdback is paid quarterly and represents a hidden profit cushion that exists even when a dealership appears to sell a vehicle at or near invoice. Holdback is separate from dealer incentives, factory-to-dealer cash, and customer rebates. Understanding holdback is important for calculating true vehicle cost and evaluating front-end gross on specific deals.
Dealer Reserve
Dealer reserve (also called finance reserve or dealer participation) is the profit a dealership earns from marking up a customer's interest rate above the rate a lender offers to the dealership. For example, if a bank offers to finance a deal at 5% (the "buy rate"), and the F&I manager presents the customer with a 7% rate, the 2% difference over the life of the loan is paid to the dealership as dealer reserve. Reserve is a significant component of back-end gross for dealerships with strong F&I penetration. Consumer finance regulations have increased scrutiny of dealer reserve practices in recent years.
Pack
Pack is an amount added to the cost of a vehicle (beyond invoice) that a dealership uses to account for overhead, insurance, and operational expenses. Pack creates a baseline cost above invoice, which means a vehicle must sell above invoice + pack to generate positive front-end gross. Packs typically range from $500 to $1,500 per vehicle and vary by dealership, vehicle type, and market. Pack structures are a key variable in understanding dealership profitability and why a vehicle sold "at invoice" may still show a small front-end gross loss.
Recon (Vehicle Reconditioning)
Recon (short for reconditioning) is the process a dealership undertakes to prepare a used vehicle for retail sale after it is acquired. This includes mechanical inspection and repair, safety checks, detail work, paintwork, upholstery, photography, and window sticker preparation. Recon cost and recon time are two critical metrics for used car profitability: high recon costs reduce front-end gross, while long recon cycles increase days-to-market and holding costs. Recon software platforms like Rapid Recon help dealerships manage and track this process.
Reason Code
A reason code is a standardized, structured label used to document why a pricing override was authorized at a car dealership. Common reason codes include "Competitive Match," "Loyalty Discount," "GM Approval," "Month-End Urgency," "Fleet/Volume Deal," and "F&I Product Discount." Unlike freeform notes, reason codes enable consistent analytics — allowing GMs and owners to identify patterns, compare compliance across salespeople, and determine which override types are generating the most margin loss. DealerInt provides a customizable reason code dropdown that appears at the moment of override, capturing structured data before the deal closes.
F&I (Finance & Insurance)
F&I stands for Finance and Insurance, the department within an auto dealership responsible for arranging customer financing and presenting a menu of ancillary products after the vehicle sale price is agreed upon. The F&I manager (also called a business manager) works with lenders to secure customer financing (earning dealer reserve on rate markups) and sells products including extended warranties (VSC), GAP insurance, tire and wheel protection, paint/fabric protection, and prepaid maintenance. F&I profit is called back-end gross and can represent $1,500–$2,500+ per vehicle retailed for high-performing stores.
VSC (Vehicle Service Contract)
A Vehicle Service Contract (VSC), commonly called an extended warranty, is a service contract sold by the F&I department that covers repair costs on a vehicle beyond the manufacturer's warranty period. VSCs are typically offered by the dealership on behalf of a third-party warranty administrator and represent one of the highest-margin F&I products. A well-priced VSC can generate $800–$1,500 in back-end gross. When F&I managers discount VSCs to close deals, this represents a direct override of back-end gross that DealerInt can capture and report.
GAP Insurance
GAP insurance (Guaranteed Asset Protection) is an F&I product that covers the difference between what a vehicle is worth (actual cash value) and what the customer still owes on their auto loan in the event the vehicle is totaled or stolen. Because vehicles depreciate faster than loans pay down in the first few years, customers can owe more than their car is worth — a situation known as being "underwater" on the loan. GAP insurance is one of the most commonly sold F&I products and can generate $300–$700+ in back-end gross per deal.
BDC (Business Development Center)
A Business Development Center (BDC) is a dedicated team within a car dealership — or an outsourced service — that manages inbound customer contacts, follows up with leads, and sets appointments for the sales and service departments. BDC staff work from automotive CRM platforms to manage lead queues, respond to internet inquiries, make outbound follow-up calls, and track appointment show rates. The BDC is the funnel that feeds the sales floor — but does not influence the profitability of deals that close. BDC effectiveness is measured by appointment show rate and lead conversion, while deal profitability is tracked separately.
Days to Market
Days to market (DTM) is a key used car performance metric that measures the number of days between when a vehicle is acquired (purchased at auction, traded in, or received from a lease return) and when it is photographed, priced, and listed for sale. Faster days-to-market means more selling days and less holding cost per unit. Industry best practices target sub-3 day DTM for top-performing used car operations. Days to market is directly controlled by the efficiency of the reconditioning (recon) process — the faster a vehicle moves through inspection, repair, and detail, the sooner it can generate gross.
Inventory Turn
Inventory turn (or inventory turnover rate) is a metric that measures how frequently a dealership sells and replaces its vehicle inventory over a given period. A high inventory turn rate indicates that vehicles are selling quickly, minimizing holding costs, aging inventory, and margin deterioration from price reductions. Most dealerships aim for used vehicle inventory turns of 10–15 times per year (roughly every 24–36 days). Vehicles that sit beyond 45–60 days typically require significant price reductions to move, directly cutting into front-end gross. Inventory management platforms like vAuto help dealers optimize pricing to maintain healthy turns.
Desking
Desking refers to the process of structuring a vehicle deal at the sales desk — working out the numbers on price, trade-in allowance, financing terms, monthly payment, and F&I product inclusion. The "desk" refers to both the physical desk where managers work deals and the software tools used to calculate and present payment options to customers. Desking software helps managers structure deals quickly and present multiple payment scenarios. It's at the desking stage that most pricing overrides happen — when a manager approves a price change to close the deal. This is the exact moment DealerInt captures override data.
Audit Trail
An audit trail is a chronological, tamper-proof record of decisions, actions, and changes made within a business system. In automotive retail, a deal-level audit trail documents every pricing change, override authorization, reason code, and approval event during the sale process. Audit trails are critical for compliance reporting, regulatory review, and internal accountability. Most DMS platforms do not provide a native override audit trail — they record final transaction values but not the decision history that led to them. DealerInt creates a complete, timestamped audit trail for every override event, accessible for board-level reporting and compliance review.
Override Compliance
Override compliance is a performance metric that measures the percentage of pricing override events at a dealership that were documented with a structured reason code before the deal closed. A 100% compliance rate means every override had a documented reason. A 60% rate means 40% of override decisions went completely unrecorded — creating a profitability blind spot and compliance risk. DealerInt tracks override compliance as a core dashboard metric, comparing it across salespeople, managers, locations, and time periods. Top-performing stores using DealerInt typically achieve 90%+ compliance within 60 days of deployment.
Dealer Group
A dealer group (also called an automotive group or dealer chain) is a company that owns and operates multiple car dealerships under one corporate structure. Dealer groups range from small regional operators (2–5 rooftops) to large national organizations (100+ locations). Managing a dealer group presents unique challenges in performance analytics: how do you compare profitability, compliance, and override rates across different stores, brands, and markets? DealerInt's portfolio view is designed specifically for dealer group owners and executives who need cross-rooftop visibility without building custom reports.