As the founder and CEO of a major technology company, my daily focus shifts between multiple demands on my time and attention, peppered by frequent surprise interruptions. As mentally ambidextrous as I want to think I am, I marvel at the responsibilities dealership general managers carry on their shoulders.
So, I ask myself, do the technology solutions GMs buy from us add to their burden? If I were selling motor oil or printer paper, I wouldn’t ask this question. But I do because my company’s products and services interface with the GM at a crucial point: used car profitability.
I know enough GMs, fixed ops directors and used car managers in all sizes of dealerships and groups to understand how important vendor and product trust is to them. No GM wants to be pulled away when something comes off the rails or slammed by unexpected events they thought were being managed by our products.
They count on solutions to “just work,” keeping situations and outcomes predictable, regardless.
This confidence is critical in two phases of used car operations — reconditioning and appraisals. Those two functions might not seem connected, but they are. And the order in which I’ve written them here is the correct sequence.
Reconditioning
GMs often consider vehicle reconditioning a fixed operation function (and opportunity) because that’s where the actual work — and revenue generation, both warranty and customer-pay and internal — is done — in the back.
We agree that the service department’s best customer is the used car department, a variable operation. And though recon is work done in the service department or a separate on-site facility — or by vendors off-site — reconditioning is a variable resource and duty. Reconditioning feeds the used car operation, and it’s a GM’s and their used car manager’s sales and future service revenue pipeline.
Operated as a strategic advantage, dialed-in recon “just works” to keep reconditioning workflow and outcomes predictable and dependable. A GM’s investment in this precision isn’t time-consuming or a distraction — it’s a check-in on the smartwatch, smartphone or other device — where and whenever those details are wanted. That’s less work and more accountability.
This foundation is manifest — reconditioning that captures parts and labor costs for every vehicle’s repair record. A reliable data source for monetizing reconditioning in a new way — where reconditioning intersects with the vehicle appraisal phase.
Appraisal Predictability
Achieving consistency with trade appraisals has long proved difficult. This problem has been — and continues to be — a problem for used car profitability, particularly regarding mechanical repairs. If discovered too late, missed repair needs can kill any profit opportunity for reselling the trade.
In September, some of my team and I hit the road with a new profit-per-vehicle appraisal tool in our pockets, visiting dealerships in Phoenix and Tucson. Those general and used car managers confirmed that its use is mandatory to show the value of all trade candidates transparently.
Some view missed appraisal repair needs as a cost of doing business. However, undiscovered mechanical issues and trouble codes may relegate the car to wholesale, or the gap may hit the cost-to-sales line.
Especially for committed GMs within group organizations — whether two stores or 200 — the consistent practice of this profit per vehicle advantage:
• Creates the perfect opportunity for appraisers to rise to trusted advisor status and close more sales
• Leverages unparalleled transparency to neutralize trade concerns to help you deliver a hospitality experience
• Increases profits from parts, customer-pay services and used cars
• Eliminates chargebacks to sales
“The used car market is volatile — and this month’s demand is for less expensive (and less profitable) cars. So recon cost and speed are crucial,” observed Jared Ricart, the president of the Ricart Automotive Group in Columbus, Ohio. “All used car managers across the United States of America share a big fear — we don’t want to make a mistake.” Our goal is to free America’s dealership GMs from burdens, at least within our patch of responsibility.
