top of page

Rewarding Appraisers Using Cost and Speed Benchmark Metrics

Press Play To Listen To This Post. On Mobile Select "Play From Browser"

The Better the Appraisal Effectiveness, the More You Can Improve the "Turn and Earn" of your Used Vehicles!

Compensation Idea for Acquisition Appraisers

Compensate for an emphasis on appraisal “effectiveness”

Appraisal effectiveness (“look to book”) is the number of vehicles taken in as a percentage of the number of appraisals performed.

Consider a bonus that rewards individual "look to book."

Since appraisal conversion is vital for maintaining inventory quality, what does an appraisal policy look like?

Appraisal Policy Process & Execution

Ensure that you have a sound process, supported by documentation, for each trade appraisal and for each purchased unit.

Consistent use of appraisal technology

The Sales Management Team performs a daily review of both traded and non-traded used vehicle appraisals.

Appraiser Evaluation Metrics

Have your compensation incentive kick in when:

  • Look-to-Book is 80% or higher

  • Your Acquisition Cost to market: 80%

  • Reconditioning RO totals should vary from the reconditioning estimates by no more than 10%

  • Since how long it takes to recondition vehicles can drastically affect how well vehicles sell, cycle time is of critical importance. Incentivize when the vehicle gets on the line in less than 72 hours.

This is just one Compensation Idea of many featured in

the DealersEdge Guide - Pay Plan Strategies... centered on the ideas and experience of a number of DealersEdge Contributors... all commenting on Pay Plan formulas for Key Managers. Details below.


DealersEdge asked a number of our Subject Matter Experts to offer their views on the evolution of Pay Pans in the 21st Century Auto Dealership.

Specifically we asked them to address on the changing landscape of retail automotive and how they would design Pay Plans that deliver consistent results while making sure everyone is treated fairly and feels lucky to be working for your organization.

50 views0 comments


bottom of page