A fantastic method for reconditioning automobiles is not only comprehensive for the sake of the advantages it provides to the final clients, but it must also be lucrative for the sake of the benefits it provides to your company. Our Simple Recon software can help simplify the reconditioning process and benefit your dealership in many ways. You can click on this link to learn more about the software.
IF YOU ADHERE TO THE BEST PRACTICES THAT ARE STATED IN THE FOLLOWING PARAGRAPHS, YOUR DEALERSHIP WILL ALWAYS BE ABLE TO ACHIEVE THAT DELICATE BALANCE:
1. MAKE SURE THAT YOUR DEALERSHIP HAS THE APPROPRIATE VEHICLE:
Examine each used vehicle that comes through your dealership with extreme care and assess the maintenance it requires. Checking the vehicle identification number (VIN) is an easy way to research a vehicle’s background, including its history of collisions, flood damage, frame damage, and even essential service records. Suppose a car can’t live up to your requirements. In that case, you should avoid purchasing it altogether or strategize to rapidly resell it for a profit with as little investment as possible. If you invest the effort to investigate reliable sources inside the industry for condition reports, you will be ahead financially in the long run. Older vehicles with more mileage that need more maintenance might be compensated by purchasing the appropriate second-hand automobiles.
It is not sufficient to look at the vehicle and make educated guesses about what needs to be repaired, readjusted, or replaced. Even the most fundamental oil and lube businesses have checklists to guarantee that everything important is noticed during the service. In other words, inspecting what you anticipate will ensure that your quality standard is maintained consistently. You can implement technology that tracks the inspections, repair orders, and workflow associated with a vehicle as it goes through the reconditioning process. In that case, you will be able to see precisely what you need to know much more quickly.
2. EVALUATE YOUR EXISTING SETTINGS, KEEP EXPENSES STABLE, AND STRIVE TO IMPROVE QUALITY WHILE DOING SO:
Suppose you miscalculated the costs associated with a vehicle purchase, and it turns out that it requires significantly more work than you anticipated. In that case, you can avoid going further into debt by evaluating the extent of the damage and moving on to the next unit, which has the potential to generate a higher gross profit. To compare appraiser estimates of reconditioning costs to suggested work, you should call a stand-up meeting with the team leaders in fixed operations and used vehicle sales.
Evaluate whether or not it is required to replace components from the manufacturer, get new brakes and tires, make repairs to the body, and have third-party bodywork. It is unlikely that you will need to replace the tires if they are still usable after halfway through their lifespan. If a test drive reveals that the vehicle has a stable feel when driven on the road, it may not need a realignment. Whether or whether your dealership offers certified pre-owned cars, the reconditioning work you do must still adhere to the quality standards set out by your business.
3. DETERMINE A SCHEDULE TO ENSURE THE SMOOTHEST POSSIBLE FLOW AND DETERMINE AN EXIT PLAN FOR EACH VEHICLE AS SOON AS POSSIBLE.
The complete reconditioning turnaround time at your dealership might take anywhere from forty-eight hours to ten days on average, depending on your team’s availability and the vehicle’s requirements. If you cut the timeframe too drastically, you risk not fulfilling the quality criteria you have set for the project. If you extend the deadline, you risk having too many old automobiles on your lot.
If you are aware that you are going to be obtaining a vehicle that may have some issues in the future via a trade-in, or if you find out too late that the automobile you just bought is going to cost more to recondition than your parameters will allow, get it off your lot as soon as you possibly can. Most dealers will need to wholesale certain used automobiles to maintain the number of inventory turns and profitability targets they have set for themselves. A vehicle that may not work for your lot might be an excellent match for another dealer. Investing in a platform that facilitates online auctions enables you to interact with a significant number of possible wholesale customers and sell automobiles more rapidly. If you have good inventory management at your dealership, you may avoid dealing with this problem. Selling rugged cars gets much more complex over time.
Aside from this standardized method, the following tips are related to reconditioning activities on your lot that are effective and profitable:
4. ESTABLISH AN INTERNAL VEHICLE RECONDITIONING GROUP:
The special teams in football are critical to the overall gameplay. They are experts at maintaining field positions, creating chances to score, and performing well in urgent situations. Your reconditioning team is your special team; if you set up the plays in such a way that they are sure to succeed, you will win. Your revenue-generating services staff should never be put in a position where they have to choose between attending to a client order or reconditioning an item since this is the last thing you want to do. You may avoid this issue entirely by forming a separate team dedicated only to the reconditioning process.
It is possible to avoid the tug of war for gross profit margins by instituting a monthly incentive plan paid for by the used vehicle and service departments. This plan also compensates the reconditioning team when they reach their newly established goals.
5. RECONDITIONING AT A FLAT CHARGE IS PREFERABLE TO PIECEMEAL WORK:
Your primary objective is to maintain a steady supply of pre-owned vehicles that have been refurbished via your dealership by adhering to a procedure that can be repeated. Let’s imagine that the utmost amount you are willing to spend on reconditioning each vehicle is $2,000. This, of course, is dependent on a number of factors, including the vehicle’s demand, its mileage, and the likelihood that it will be on your lot for a longer period of time than you would want. How can you ensure that the reconditioning is done to the highest possible standard while minimizing expenses? Keeping your reconditioning technicians and detailers on the same page as your fixed operations budget may be accomplished in part by implementing a flat-rate compensation plan, which is one approach to achieving this goal.
There needs to be more than just reasonable pricing to promote repeat business. Customers who are happy with their purchases spend more money and often return to make more purchases. To attract repeat business, dealers must develop a reputation for taking care of clients by maintaining a quality used vehicle inventory. A professional vehicle reconditioning software like Simple Recon may bolster this reputation without breaking the budget. Fill out this form to schedule a free demo of our Recon software.