Quick to Front Line: Turn for Profit

Getting acquired inventory accurately appraised and efficiently reconditioned to become front-line ready can be daunting. Especially with the age of our current used car inventory set.

With margins eroding selling vehicles within the first 30 days is one way to combat gross deterioration. In this article, we will look at a few ways dealers can expedite the reconditioning process of appraised cars to ensure they are ready to sell quickly.

• Inspection and Evaluation:??Conduct a thorough inspection of the appraised car to identify any mechanical, cosmetic, or safety issues. This evaluation will help determine the extent of reconditioning required. Measuring appraised-vs-actual in recondition cost by appraiser will help you determine if additional training or tools are needed. Inspect what you expect to maintain a tight process and minimize errors.

• Prioritize Essential Repairs:?Focus on addressing critical repairs and safety concerns first. This includes fixing issues related to the engine, transmission, brakes, tires, and any other mechanical components that may affect the car's performance or safety. With the age of inventory in the market today coupled with the affordability challenge, it may not be wise to repair every vehicle to mint condition but safety and reailabity is a priority. Know your market and income demographics to build the reconditioning strategy that best fit's your market.

• Cosmetic Enhancements:?Attend to any visible cosmetic imperfections such as dents, scratches, or faded paint. Consider paint touch-ups, dent removal, or even professional detailing services to enhance the car's appearance. These are usually the less expensive repairs that make a major difference in the marketability of the vehicle and the price point it will demand.

• Efficient Workflow:?Optimize the reconditioning process by implementing an efficient workflow. Divide tasks among specialized technicians, so they can work concurrently on different aspects of reconditioning. This helps save time and reduces the overall turnaround time. Use recondition software and digital tools that expose bottlenecks in your process before they become an issue.

• Streamlined Parts Procurement:?This is a big one. Maintaining a good relationship with parts suppliers to ensure quick access to the required components is a secret of the best parts managers. Timely parts procurement reduces delays in the reconditioning process and gets your vehicle to the front line faster for its best profit potential. Most of the severe aging we see on dealer lots can be traced back to missed appraisals and parts backorder.

• Collaboration and Communication:?Strong communication between the sales, service, and reconditioning departments helps to ensure smooth coordination, resolve any issues promptly, and keep everyone informed about the progress of reconditioning. In the Automotive Advisor Team's?Retail Optimization Program, we bring the used car leader and service leader together to forge a partnership rooted in transparency with agreed-upon consideration around labor rate, bay utilization, and capacity by showing that working together creates growth for the entire dealership.

• Utilize Technology:?Leverage technology solutions to streamline the reconditioning process. Use digital platforms or software to manage work orders, track progress, and automate communication for transparency with all of the stakeholders. This enhances efficiency and minimizes manual errors that can lead to significant losses..

• Pre-Sale Inspection:?Conduct a final inspection to ensure all repairs and enhancements have been completed satisfactorily. This step helps identify any missed issues and ensures that the car meets the dealership's quality standards. This is a good time to add the service work done to the vehicle pre-sale deal jacket to increase value and justify the price.

• Marketing and Listing:??Promptly market and list the appraised car for sale. Utilize online platforms, social media, and other marketing channels to reach potential buyers quickly. Many tools allow you to take photos and upload descriptions to market your vehicles to potential buyers while they are being reconditioned. The sooner you can get the vehicle on your digital storefront the faster your turn. If capacity is an issue, some auctions will do the reatil reconditioning for you and take the photos to add to your digital storefronts before the vehicle arrives at your dealership.

• Pricing Strategy:?Set a competitive price based on market research, the car's condition after reconditioning, and the supply and demand that YMMT (Year Make Model Trim) has in the market. A well-priced vehicle is more likely to attract potential buyers and sell faster. To price competitively, a good best practice is to appraise to ACV not over-allowing a used trade for a new car deal or adding a pack. The goal in our current market is to achieve a 30day reatil sales rate that produces more profit than if you employ the latter in your appraisal process. If you are missing trades, make sure you aren't under allowing as well.?

By pursuing these steps, dealers can streamline the reconditioning process for appraised cars, ensuring they are ready to sell quickly and maximizing the dealership's profitability.?

Reach out to The Automotive Advisor Team for a deep dive into your operation that impact sales rate by days in stock and your buy plan by acquisition channel to ensure you are making gross and turning your inventory quickly.

The Automotive Advisor Team.

[email protected]