I don’t mean to squeeze more juice from an already tired cliché, but time is money in used car reconditioning. Get used inventory spiffed up and to the sales line in three days, consistently, and that’s the sound of money.
For years I have been promoting Time-to-Market (TTM) workflow as the measurement of exceptional reconditioning results. That’s still true, but we’ve discovered an even better way to talk about how to make recon operations more profitable: Average Days in Recon, or ADR.
New analytics solutions now give dealership general managers much deeper insight into how much gross is being lost through their used car reconditioning processes.
By using reconditioning software that creates daily reports on fundamental reconditioning benchmarks, GMs have at hand the data at the same actionable level they use for other decisions for controlling costs and improving gross. The benchmark metrics this reporting provides are vital if GMs are to effectively manage reconditioning holding costs.
Understanding holding cost and knowing how to minimize this expense propels the manager’s ability to manage dealership cash liquidity. Managing liquidity is important because cash is the fuel that runs the dealership engine — and when times are hard, liquidity is the safety net that keeps the doors open.
The process of reconditioning used vehicles is a costly, but necessary, undertaking for dealerships. Thanks to new technology, there are now tools and systems available to help dealerships get the best value for their recon dollar. A new tool that is trending with dealership vehicle reconditioning is the Master Vendor Program (MVP) concept. This program focuses on centralizing vendors (i.e. wheel scrapes, dents, touch-up, interior repair, etc.) into a single reconditioning operation under the direction of a master vendor.