How to Process Sale or Return Vehicles

Sale or Return (SOR) vehicles are vehicles provided to a dealership by a third party, typically a manufacturer or another dealership, with an agreement that the receiving dealership will either sell the vehicle or return it if it remains unsold within a specified period.

Key Characteristics of SOR Vehicles:

1. No Upfront Purchase Cost: The dealership doesn’t purchase the vehicle outright. Instead, they hold the vehicle in their inventory under a consignment arrangement.

2. Profit on Sale: The dealership earns a margin on the vehicle once it is sold, usually based on a pre-agreed price with the third party.

3. Return if Unsold: If the vehicle doesn’t sell within the agreed timeframe, the dealership has the option to return it to the supplier rather than bearing the cost of unsold inventory.

4. Flexible Inventory Management: SOR arrangements provide a flexible inventory option, allowing dealerships to offer a broader range of vehicles without significant financial risk.

To process Sale or Return (SOR) vehicles in Navigator, follow these steps:

1. Purchase the Vehicle with a Zero Value: Enter the vehicle into stock as you would a regular purchase, but set the purchase value to zero. This keeps the vehicle on your stock list without creating nominal entries until it is sold and invoiced.

2. Update Expected Costs Before Invoicing: Before finalising and invoicing the deal, go to the Purchase tab and enter the expected cost of the vehicle. This step is essential to accurately calculate the profit margin and marginal VAT, so make sure it isn’t overlooked.

3. If the Vehicle Is Not Sold: If the vehicle remains unsold, reverse any associated costs. Invoice these costs to an internal sales ledger account and cancel the deal to remove it from active inventory.