Measuring ROI for Vehicle Movement Software

Most dealer groups can tell you what they spent on moving vehicles last year. Fewer can tell you what each movement cost, how long the car waited before and after it, or how many of those movements went to a subcontractor because nobody could see a free driver. The ROI case for vehicle movement software is won or lost in that gap.

This guide sets out a method for measuring ROI on vehicle movement software: the numbers to collect before you buy, the KPIs to track after go-live, and how to turn movement data into a figure a finance director will accept.

Measuring ROI for vehicle movement software

The formula is the standard one. What makes it hard in vehicle logistics is the gain side, because most of the inputs sit in numbers groups don't currently record.

{ROI} = {annual gain} - {annual software cost}/ {annual software cost}}

The gain comes from operational data: cost per movement, empty mileage, outsourced spend and dwell time. So the first job is a baseline, measured before anything changes.

Start with cost per movement

Cost per movement is the unit that turns operational efficiency into money, and makes every other figure comparable. Add up total spend on moving vehicles over a fixed period, then divide by the number of movements completed. Spend should include in-house driver wages, trade plate costs, fuel, drivers' return travel and outsourced transport invoices.

Split it by movement type where you can. Inter-site transfers, customer deliveries, auction collections and bodyshop runs cost different amounts and fail in different ways.

If you can't produce this figure today, that is a finding in itself. It usually means movements are planned across spreadsheets, group chats and phone calls, and the cost sits in several budget lines nobody adds together. 

Compare manual scheduling with automated routing

A fleet ROI calculation for vehicle movements compares how jobs are planned now with how route optimisation software would plan them. These are the inputs to collect.

Most of the money is in the first two rows. When a driver who drops a car at one site collects another from nearby, empty miles fall and in-house drivers cover work that would otherwise be invoiced by a subcontractor. Both show up directly in cost per movement.

Administrative overhead belongs in the model but rarely carries it. Planner hours are only a saving if they are redeployed, or if the group avoids adding headcount as it adds sites. Count them, and keep them out of the headline.

The KPIs to track after go-live

• Cost per movement, by movement type. The headline figure. Track it monthly against the baseline.

• Vehicle dwell time. Days from a car being ready to move to arriving where it will be prepped or sold. Every one of those days adds stocking cost and depreciation to a car that isn't on sale. More on this in our guide to stock turn and the cost of transport delay.

• Empty mileage per movement. The clearest test of whether driver routes are being optimised or just recorded.

• Share of movements outsourced. If it falls while volume holds, in-house capacity is being used properly.

Quantifying the financial impact with real-time monitoring

The KPIs are only as good as the data behind them. Real-time monitoring closes the gap between the plan and what happened on the road. When drivers record collection and drop-off in a driver app, with timestamps and proof of delivery, dwell time and movement time stop being estimates.

That changes how ROI gets measured. Rather than trusting a projected saving, measure cost per movement and dwell time for three months before go-live and three months after, on the same movement types. Allow for seasonality: a March or September plate-change month won't compare cleanly with a quiet one.

Collecting that data is the job of a transport management system (TMS) for vehicle logistics, which is what Jigcar does for dealer groups and transport providers. The Optimiser plans and sequences each day's routes, the Driver App records what actually happened on every job, and the Strategy Assistant turns that movement history into the before-and-after reporting described above. Planners stay in charge of dispatch. The Optimiser proposes a plan and a person decides what goes out.

In practice, one UK dealer group went from needing 12 in-house drivers to 9 once its movements ran through Jigcar. Because both sides were measured, that shows up in cost per movement as a real figure rather than a projection.

Value proposition for mid-sized dealer groups

For a mid-sized dealer group, vehicle movement software pays back when the number of sites makes manual planning guesswork. A group with two or three sites can often run movements from a whiteboard. Add a bodyshop, a used car hub and an auction buying programme, and the possible combinations of driver, plate and route grow much faster than the number of cars.

A good planner can hold a day's jobs in their head. They can't reliably work out which combination costs least across eight sites, every day, while the phone rings.

Where legacy manual processes cost money

A multi-site group holds hundreds of vehicles across its sites at any one time, and the planning that moves them often still runs on spreadsheets, group chats and phone calls. The cost of those legacy manual processes turns up as:

• Overlapping trips, where two drivers cover much of the same route because neither job was visible to the other planner.

• Cars waiting for a driver after prep is finished, which adds days to stock turn without anyone booking it as a transport cost.

• Outsourcing by default on days when in-house drivers finish early, because nobody could see the spare capacity when the job was booked.

Getting vehicles digitally ready faster

Once a car is bought, the job is to get it online and digitally ready as quickly as possible. A car can't be photographed, prepped or advertised until it is at the right site. Movement is usually the first step in that sequence and the one with the least visibility.

Shorter, planned movements cut the time from acquisition to advert. That is where the inventory turnover gain comes from, and it is measurable with the dwell time KPI above.

The "20 year old software" problem

Vehicle movement is where legacy manual processes hang on longest. Groups that have replaced their website, CRM and DMS in the last few years still tend to plan movements the way they did when the software around them was 20 years old: in spreadsheets and messages.

Vehicle movement software doesn't have to replace the DMS to fix that. A transport management system takes the movements that live in spreadsheets and chats and puts them in one plan. That keeps the switching cost low and the ROI measurement clean, because one process changes and the rest stay put.

A quick test for your group

If two or more of these are true, the ROI case is probably there:

• You can't state cost per movement by movement type.

• Some movements are outsourced on days when in-house drivers finish early.

• Prepped cars regularly wait more than a day for a driver.

• Planning depends on one or two people who know the routes.

You can run your own numbers in our transport cost calculator, see how Jigcar plans vehicle movements, or book a demo and bring your baseline.

Frequently Asked Questions