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In today’s competitive usedcar market, dealerships can’t afford to rely on guesswork during vehicle appraisals. Missing a mechanical issue or overlooking a key feature from a window sticker can lead to profit losses. While window stickers show visible features, mechanical issues are often hidden and can be profit killers.
Tracking T2L allows dealerships to pinpoint delays, whether in mechanical reconditioning, detailing or the approvals process, enabling them to make targeted improvements. Reconditioning isn’t just about fixing cars; it’s about refining processes to be as efficient and effective as possible.
Margin compression affects every department of your dealership, notably usedcar reconditioning and usedcar appraisals. UsedCar Reconditioning A reconditioning speed of three to five days, from acquisition to frontline readiness, is the efficiency gold standard. How do you manage margin compression here?
This stands in sharp contrast to dealers who often face the challenge of uncertainties in usedcar acquisitions due to a lack of comprehensive data. Modern technology offers a solution, providing tools designed specifically for the dealership industry that mirror those used by stock investors.
Lack of Recon Visibility Up Front During the appraisal process, you have little insight into the mechanical condition of the vehicle you’re appraising or exact reconditioning costs. Your walk around, test drive and the Carfax report can only give you so much.
Since the dealership often handles these repairs under the service contract, it ensures that any needed work stays within the dealerships service drive rather than going to a third-party mechanic. By securing a VSC post-sale, dealers can lock in this relationship, encouraging repeat business for future car purchases.
But I do because my company’s products and services interface with the GM at a crucial point: usedcar profitability. I know enough GMs, fixed ops directors and usedcar managers in all sizes of dealerships and groups to understand how important vendor and product trust is to them.
According to Cox Automotive’s June 2024 Auto Market Report, the average new car loan interest rate is 10.1% for usedcar loans. This is a significant increase from two years ago, when the average new car interest rate was 4.1% for usedcar loans, according to Car and Driver.
If you want to manage inventory holding costs and bolster your earnings per share, consider how your usedcar reconditioning operates. Cars get sale-ready within three to five days of acquisition. You’re buying the wrong cars if this isn’t consistently happening. When recon is run well, it is dialed in and efficient.
in reconditioning mechanical parts and labor costs, and the scan takes less than 60 seconds. New VIN-scan tools that integrate with reconditioning software can provide deep, rich mechanical systems data and accurate reconditioning parts and labor costs for the vehicle make, model and year.
Additionally, a rise in used EV sales continues to make headlines. Over 7% of new car sales in 2023 were battery EVs (BEVs), which will lead to an increase of used EV inventory in the coming years. Therefore, F&I offerings for these types of vehicles remain critical.
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