Why Is My Demo Vehicle Showing a Loss in Profit Analysis?

A demonstrator sale often appears to show a "loss" in the Profit Analysis screen when manufacturer bonus support or specific demo support has not been correctly reflected in the vehicle's standing cost.

Why This Matters

• Informed Decision Making: A "false loss" can lead to incorrect pricing decisions or missed sales opportunities.

• Month-End Accuracy: Discrepancies between reported and actual profit cause significant disputes during the month-end reconciliation process.

Typical Causes of "False Losses"

• Bonus Holding Pots The bonus support is sitting in a separate holding account and has not yet been applied to the specific vehicle's cost.

• Wholesale vs. Net Cost The vehicle was brought into Navigator at the full wholesale net cost, failing to account for the demo-specific bonus reduction.

• VAT vs. Net Cost Treatment The vehicle is treated as "qualifying" and VAT is handled correctly, but the underlying net cost remains too high for a demo disposal.

What to Check: Step-by-Step

Step 1. Confirm Actual Cost in Navigator

1. Open the specific vehicle record.

2. Navigate to Profit Analysis.

3. Focus: Always look at the Actual Cost line, not the Expected Cost.

Step 2. Confirm the True Standing Value after Support

1. Cross-reference with your source system or Bonus Allocation Workbook.

2. Identify the True Net Standing Value (the figure after the demo support/bonus has been applied).

Step 3. Compare Navigator to Source Data

• If Navigator displays the pre-support net cost, your profit will automatically appear lower than it truly is by the exact amount of the missing £ support.

Step 4. Confirm Support Application

• Determine if the support was intended to reduce the vehicle's standing cost directly or if it was meant to remain as a separate balance on the ledger.

What to Do Next

• Pause and Verify: If support exists but is not currently reducing the standing cost in Navigator, stop the process.

• Consult Management: Confirm the intended accounting treatment with the individual managing bonus allocations.

• Adjust Costing: Once confirmed, the standing cost approach should be adjusted so the vehicle reflects the correct Net Cost before the deal is finalised.

Key Rules for Accuracy

• Net Figures Only: Profit Analysis always uses Net figures. VAT is handled separately and is never part of the profit lines.

• Identify the Source: A loss tied specifically to a support payment is almost always a Standing Cost issue, not a sales performance issue.