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Performing an Appraisal

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Performing appraisals using integrated book provider values and competitive market data is an important step in both making smart acquisitions for your inventory and optimizing your profit on deals. 

Note:  Autosoft's Appraisal tool is part of our Inventory Management product. If you do not have a subscription to Autosoft Inventory Management, you will not have access to the Appraisal tool. 

You can begin an appraisal in three ways. For detailed instructions on the three methods for beginning an appraisal, see the Knowledge Base article, "Starting an Appraisal." No matter how you begin the appraisal, you perform the appraisal in the same way.

Step 1. Once you've started the appraisal, enter the vehicle's current mileage in the Odometer field and click Get Values

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Note:  You can begin an appraisal quickly by simply entering the VIN, or if you don't have the VIN, the year, make, and model of the appraisal vehicle. However, assigning an Appraisal Name and/or Customer, Acquisition Type, Acquisition Source, Salesperson, and Phone Number in the card on the top-right of the Appraisal screen will save you time when it comes time to complete the appraisal and start a new deal.  

Step 2. The book provider and Autosoft Market Analysis cards will populate based on the VIN and mileage you enter. The example below includes all the options available to you: the Autosoft Market Analysis card, NADA Used Car Guide, Manheim Market Report, Black Book, and Kelley Blue Book book provider cards. However, your view will differ based on the book providers you subscribe to and have selected to use for appraisals. You can also set a default order for the provider cards in the Setup application. 

Note:  Your dealership will likely subscribe to only one or two book providers for appraisal purposes. Autosoft's screenshots in these how-to articles feature all the book provider cards simply to demonstrate the information returned by each book provider. 

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Check any applicable Optional Equipment or Adds/Deducts in the book provider cards to hone in on the most accurate values based on the vehicle's equipment. 

Important:  In some cases, the book provider may not be able to decode trim, and you will need to use the Trim options drop-down in the provider cards to select trim. You may also need to select a region. This will ensure the book values the providers return are as accurate as possible. In the case of Manheim Market Report, choosing the vehicle's Color and Grade will return the most accurate values. 

Step 3. Set up the Autosoft Market Analysis (AMA) card at this point to assist as you build the appraisal. The AMA tool allows you to review similar vehicles in the radius you've set as a default in Setup or using the Distance field in the AMA card. To get a larger sampling, expand the mileage and vice versa. To hone in on the most similar vehicles, use the Trim, Odometer Range, Certified, Transmission, Engine, Drivetrain, Body Type, and Body Sub-Type fields.

Click Details to view a detailed competitive list of vehicles. Each vehicle listing includes the vehicle's trim package and VIN, selling dealership and its distance from your dealership, odometer reading, whether it's certified, its days on market, and its pricing (list price, the difference between the vehicle price and the average market price, and percentage of market average). 

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Review the listings to get a sense of the competitive market. What are their list prices? How many times have the prices been adjusted (click the list icon to the right of a vehicle's age to see its listing history)? Sort by distance to see vehicles closest to you or by odometer to see how others with vehicles with odometers like yours have priced them. Click on the blue vehicle link to go to the actual vehicle listing page. This information will help as you appraise the vehicle for trade and resale.  

Step 4. Review the values returned by your book provider/s. You'll use these values as comparisons for the vehicle you're appraising. For a vehicle you are likely to retail, the Appraisal column's Comparison Book Value field should be populated with the book provider value type and condition against which you would most likely compare your retail-ready inventory accounting cost. In other words, for a vehicle you will likely sell retail, you may use a value that represents the total investment you'll have to make in the vehicle for resale purposes instead of the value for the vehicle's current condition. If you intend to sell the vehicle wholesale, it's best to use the value that best represents the vehicle's actual condition and value type.

Click a value in a provider card. A pop-up will open, where you will select Appraisal or Retail

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The value you select as the Comparison Appraisal Book Value will be highlighted in orange and will populate the Appraisal column of the Appraisal Worksheet's Book Value line. The value you select as the Comparison Retail Book Value will be highlighted in green and will populate the Retail column of the Book Value line. Under the Appraisal Worksheet's column headings, the choices you selected for the comparison appraisal and retail book values will be listed, respectively. 

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Note:  You can also enter the Comparison Appraisal and Comparison Retail Book Values manually.  

Step 5. In the Appraisal Worksheet, use the Base Appraised Value line to enter your estimate of the vehicle's appraisal and retail values based on its features and condition. Enter what you believe to be the vehicle's ACV (actual cash value) in the Appraisal column and your estimated selling price in the Retail column based on the AMA and book data. 

Step 6. Use the Adjustments line to enter positive or negative values to adjust the appraisal and retail base appraised values. These adjustments are designed to itemize any direct effects to the initial Appraised Value you wish to document, such as exceptionally high or low mileage, the need to match a competitor offer, or a negative vehicle history report. You can choose whether to include the adjustments in both the Appraisal and Retail columns. The figures will be added to the Base Appraised Value figures to reach the Appraisal and Retail Appraised Value

Step 7. Any appraisal defaults established in the Setup application will auto-populate the Reconditioning, Certification, Transportation, Auction, and Other fields. You can override these figures or enter values (if default values weren't assigned) by typing them directly in the fields. If you've set itemized Reconditioning or Other defaults, you can use the pop-out icons to the right of the field labels to open the itemized list and adjust any pricing and add or remove items. To remove an item, simply clear the description field and enter 0 (zero) in the item's Appraisal column. 

You can choose to pass all or a portion of the Certification and Other costs onto retail customers by entering the full value, a portion of it (in the case of Certification), or a greater retail value (for Other adjustments) in the respective field in the Retail column.

Step 8. The area of the Appraisal Worksheet highlighted in green allows you to secure your cost, profit, and list pricing on an appraisal. This section uses the values entered in the fields above, as well as the information returned by the Autosoft Market Analysis to fine-tune the appraisal.

You can lock the Projected Cost, Projected List, and Projected Profit values to protect the values. Locking one value will unlock the other two and will make particular fields in the green section available. By default, the Projected Cost field is locked (signified by the closed red lock icon to the right of the line label). However, if you lock the Projected List or Projected Profit fields, the Projected Cost will be unlocked (signified by an open green lock). 

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The Projected Cost field in the Appraisal column is calculated by adding the Appraised Value, Reconditioning, Certification, Transportation, Auction, and Other values. To the right of the Projected Cost value, the worksheet will display the price above or below the Comparison Appraisal Book Value. If the Projected Cost is more than the Comparison Appraisal Book Value, the difference will be red; if it's below, the difference will be green and will be preceded by a negative symbol. 

When this field is unlocked, you can manually edit the Projected Cost, Projected Profit, % Book and % Market fields in the Appraisal column.

The Projected List value is the Retail Appraised Value plus the retail Certification and Other values (if you've entered any). 

When this field is locked, you can edit the Projected Cost, Projected Profit, % Book and % Market fields in the Appraisal column.

The Projected Profit value in the Appraisal column is calculated by subtracting the Projected Cost value from the Projected List value. 

When this field is locked, you can edit the Projected Cost in the Appraisal column, the Projected List in the Retail column, the % Book and % Market in both the Appraisal and Retail columns, and the Projected Ranking.

Step 9. The green area of the Appraisal Worksheet also calculates the percentage of book value (% Book) and percentage of market value (% Market) for both the appraisal and retail figures. In the Appraisal column, the % Book is calculated by dividing the Projected Cost value by the Comparison Appraisal Book Value; the Retail % Book is the Projected List value divided by the Comparison Retail Book Value.

Manually entering the Appraisal and Retail % Book figure changes the Projected Cost and Projected List to reflect the new percentage. 

Step 10. The Appraisal and Retail % Market calculations use the information returned by the AMA tool. These figures are calculated by dividing the Projected Cost or Projected List value by the Average Market Price listed both at the bottom of the green section of the Appraisal Worksheet and the top of the AMA card.

Manually editing the Appraisal %Market field changes the Projected Cost and Projected Profit values, while manually entering the Retail %Market field alters the Projected List and Projected Profit values. 

Step 11. To change your appraisal values based on the projected market ranking, review the AMA card's  Competitive List (click Details in the card) and simply enter the rank you'd like your vehicle to be in using the Projected Ranking field in the Appraisal Worksheet card. For example, if you want the vehicle to be listed third among all the competitive vehicles, just type "3" in the field. This will change the Projected Cost and Projected List values to reflect that market ranking. You can continue to enter different rankings until you arrive at projected cost and list values that you feel allow you to move the vehicle quickly while still making a profit.

Note:  Based on the field you have locked, different values will be affected by changing the ranking.

Step 12. Based on the numbers you're seeing in the Appraisal Worksheet, you may decide that you don't want to put as much money into a trade vehicle and decide to cut back on some of the reconditioning. Adjust any the necessary figures to make the trade work for you and the vehicle's owner. 

Note:  If you believe the trade will lose you money if you attempt to sell it retail, you may want to instead sell it wholesale. If you've set the vehicle Disposition default to Retail in the Setup application, Retail will be selected in the Disposition line at the bottom of the Appraisal Worksheet. You can override that default and select Wholesale

Step 13. When you're done adjusting the appraisal, type the value you want to offer the vehicle's owner in the Customer Offer field at the bottom of the Appraisal Worksheet card. The Over/Under Allowance value (O/U Allow $XXX) will appear to the right of the field. If the figure is preceded by a negative sign, your offer is under the appraised value. If the figure is positive, the offer is over the trade allowance provided by the appraisal. 

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Step 14. Click Save to save the appraisal and continue working or Save and Close to save and close the appraisal. A green "Success" message verifies that your changes have been saved. You can continue editing the appraisal until it's complete. However, once you complete the appraisal, you can no longer edit it. 

Marking an appraisal "Complete" creates a vehicle record, attaches it to the associated customer, and gives you the option to add the vehicle to inventory and start a deal. 

Important:  For users with an integrated CRM, only a completed appraisal will attach to a pushed deal based on a VIN match to the trade.

For step-by-step directions on completing an appraisal, see the Knowledge Base article, "Completing an Appraisal."

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