Efficiency Rating

Efficiency Rating refers to a performance metric used in both vehicle evaluations and dealership operations to measure how effectively a process, system, or individual converts input into productive output. In the automotive industry, this term carries two primary meanings: vehicle efficiency and employee or departmental efficiency. Both are crucial to dealership performance and profitability.

For dealerships, understanding efficiency ratings helps improve both how vehicles are marketed and how internal operations are managed.

Efficiency Rating in Vehicles

In automotive terms, Efficiency Rating commonly refers to how economically a vehicle uses fuel or energy to deliver performance. For gasoline vehicles, this is measured in miles per gallon (MPG), and for electric vehicles, it’s measured in miles per kilowatt-hour (mi/kWh) or MPGe (miles per gallon equivalent).

Efficiency ratings provide consumers with a standardized way to compare models and make informed decisions.

Major Components Influencing Vehicle Efficiency 

• Engine Technology: Turbocharging, hybrid systems, and direct injection all improve combustion efficiency. 
• Transmission Design: Continuously Variable Transmissions (CVTs) and multi-gear automatics reduce energy loss.
• Aerodynamics: Smoother shapes reduce drag, improving highway performance.
• Vehicle Weight: Lighter materials such as aluminum and carbon composites increase efficiency.
• Tire Design: Low-rolling-resistance tires can improve fuel economy by up to 4%.
• Driving Behavior: Aggressive acceleration and braking reduce real-world efficiency even in high-rated vehicles.

Dealerships often rely on these ratings to highlight value, reduce objections about fuel costs, and position models competitively.

Government and Industry Efficiency Standards

Efficiency ratings are standardized to ensure transparency across brands and vehicle types.

• EPA Ratings (U.S.): The Environmental Protection Agency tests vehicles for city, highway, and combined MPG or MPGe.
• WLTP (Worldwide Harmonized Light Vehicles Test Procedure): Used internationally to assess emissions and efficiency in standardized conditions.
• Manufacturer Estimates: Automakers may also provide internal data, but official EPA or WLTP figures carry the most credibility. 

Dealerships should always present verified, published figures to customers and avoid overstating performance claims. 

Real-World vs. Rated Efficiency

Customers often notice discrepancies between advertised and real-world fuel economy. Reasons include:

• Traffic patterns and stop-and-go driving.
• Climate control use (A/C or heating).
• Tire inflation and load weight.
• Driving habits and terrain.

Sales professionals who can explain these variables honestly help manage expectations and build trust with informed buyers.

Efficiency Rating in Dealership Operations

Beyond vehicle fuel economy, efficiency rating is also a major concept in dealership management. Here, it measures how effectively departments or employees turn resources into results, for example, how many sales are made per lead, or how many hours a technician bills compared to hours worked.

This operational view of efficiency is just as important as vehicle performance ratings because it directly impacts dealership profitability.

Examples of Dealership Efficiency Ratings 

• Sales Efficiency: Ratio of closed deals to total leads received.
• Service Efficiency: Ratio of billed hours to actual technician hours (also known as productivity rate).
• Marketing Efficiency: Cost per lead or cost per sale from advertising spend.
• Inventory Efficiency: Average days in stock before a vehicle sells.
• Finance Efficiency: Approval-to-funding turnaround time or finance penetration rate.

Each metric helps managers identify bottlenecks, reduce waste, and improve workflow.

Measuring Sales Efficiency

Sales efficiency metrics evaluate how well dealership teams convert leads and showroom traffic into completed deals.

Major indicators include:

• Closing Ratio: The percentage of leads or ups that result in sales.
• Response Time: How quickly internet or phone leads are handled.
• Appointment Show Rate: The number of customers who show up after scheduling visits.
• Sales Cycle Time: Average time from first contact to deal closure.

Improving these metrics often requires better communication, training, and accountability systems.

Measuring Service Department Efficiency

In service operations, efficiency is often expressed through three major metrics:

• Productivity: Hours billed ÷ hours worked.
• Efficiency: Standard job hours ÷ actual time taken.
• Utilization: Billed hours ÷ total available hours.

A high efficiency rating indicates that technicians are performing jobs quickly and accurately while maintaining quality. Dealerships with consistently high service efficiency ratings typically enjoy better profitability and customer satisfaction.

Improving Dealership Efficiency Ratings

To raise efficiency across departments, dealerships can adopt structured strategies:

• Streamline Communication: Eliminate gaps between sales, finance, and service departments.
• Use Data Analytics: Review KPIs weekly to identify trends or inefficiencies.
• Automate Repetitive Tasks: CRMs and DMS systems help reduce manual errors.
• Set Benchmarks: Define clear performance goals by department.
• Continuous Training: Regular coaching improves consistency and output.

Automotive Training Network helps dealerships identify inefficiencies that limit performance, whether in sales, service, or F&I. Through hands-on workshops and real-world coaching, ATN helps your team streamline processes, improve KPIs, and increase profitability without sacrificing customer experience. Contact ATN today to learn how to make every department operate smarter.