Closing the Appraisal Gap

Closing the Appraisal Gap

A new OBD II enriched with VIN-centric reconditioning cost data, not estimates, is now integrated into workflow software to eliminate intentionally overlooked or ignored yet authentic reconditioning exposure at appraisal.

Dealers today enjoy more predictable used car results because they leverage strategic reconditioning software’s robust efficiency metrics called time-to-line or T2L, a process we introduced to the market in 2010.

The latest advancement in the reconditioning revolution in which we have written about for 14 years is predictable profit per vehicle — zero sales cost due to little or no disparity between estimated and actual reconditioning costs.

The profitability of used cars has been, until now, primarily determined by demand and availability. Time-to-line brought a speed element to profitability by getting cars from acquisition to frontline-ready in three to five days. Longer recon cycles erode profitability due to accumulating holding costs losses and vehicles not getting to the frontline until well into their 30-day optimum margin window.

But that isn’t the complete story. Dealers lost incalculable dollars during trade appraisals by lacking information that otherwise would enable them to calculate predictable reconditioning costs per VIN.

Today’s OBD II or onboard diagnostics provide valuable diagnostic data but fall short of providing the information most helpful to a fair appraisal where neither party takes it on the chin. The first-generation OBD arrived in the late 1980s to help technicians identify and resolve air pollution issues in fossil fuel engines. As vehicles have become networks on wheels, second-generation or OBD II scanners are essential for translating a typical vehicle’s 11,000 trouble codes into actionable information and providing estimated costs to correct them.

The service department and some appraisal tools use this type of scanning. However, a new OBD II enriched with VIN-centric reconditioning cost data, not estimates, is now integrated into strategic time-to-line workflow software to eliminate intentionally overlooked or ignored yet authentic reconditioning exposure at appraisal.

What is this exposure? It is the unfortunate and costly gap between the appraised vehicle’s reconditioning costs, as estimated by the appraiser, and the actual costs, as determined by technician inspection, and true reconditioning labor and parts costs for the make and model extracted from the reconditioning system.

GMs who understand this advantage will insist that appraisers use the tool for every purchase opportunity — and for coaching appraiser effectiveness.

The following best describes the benefits — closing the risk gap on appraisals — and starts with every person appraising having their own personal engraved scanner in their pocket:

  • Creates and equips appraisers as trusted advisors who use this data to build customers’ trust in your trade-in process;
  • Delivers transparency to neutralize trade concerns so you deliver a hospitality culture;
  • Increases profits from parts, customer-pay services and used cars; and
  • Strengthens your individual leadership mark on staff discipline, process consistency and store profitability.

“The used car market is as volatile as ever, and this transparency into profit per vehicle eliminates appraisal guesswork. All used car managers across the United States of America share a big fear — we don’t want to make a mistake,” said Jared Ricart, president of the Ricart Automotive Group, whose used car operation sells 600 to 800 used cars monthly. “This profit per vehicle strategy couldn’t have come at a better time.”

Visit Rapid Recon at NADA 2024, Booth 3363W.

You May Also Like

Unlocking Your Dealership’s Hidden Revenue: The Power of Warranty Reimbursements

Partnering with a qualified vendor to ensure you receive what you’re legally owed is more than just advantageous — it’s a necessity.

Unlocking Your Dealership's Hidden Revenue: The Power of Warranty Reimbursements

For as long as there have been franchised auto dealers, the battle over factory reimbursements for warranty work has raged on. It's a crucial revenue stream, yet dealerships often receive only a fraction of what they are owed. However, the law is clear: auto dealers are entitled to reimbursement by automakers for warranty work at their retail rate. Partnering with a qualified vendor to ensure you receive what you’re legally owed is more than just advantageous — it’s a necessity.

PRT Launches 22 Complete Strut Assemblies

The release represents more than 12 million vehicles in new coverage.

PRT Launches 22 Complete Strut Assembly New Products
Autel, MOTOR Partner to Bring OEM Data to Ultra Series Tablets

Autel Ultra series tablet users can access automotive service and repair content within days of it being published by the OEM.

Autel scan tools, diagnostic tools
Top 3 Ways to Avoid Warranty Audit Headaches in 2024

Avoiding warranty claim debits can be a daunting task, fraught with complicated processes and procedures.

warranty audit headaches
ASE Workshops at NADA to Focus on EV Safety, Technician Recruitment and Retention

Learn strategies to better attract and retain entry-level technicians as well as how to develop and maintain a safe work environment and skill set for your extended EV team members.

Automotive Service Excellence logo - ASE logo

Other Posts

Rapid Recon, Velocity Automotive Close the Trade Appraisal Gap

Appraisers at dealerships using the recon software and VINSight now have quantifiable data to make more informed trade offers.

Repair OnDemand Launches Solutions to Diagnose, Recondition and Repair Used Vehicles

Using BlueDriver Max, dealers will be able to plug the device into vehicles at auction, private trade-in and other acquisition touchpoints to quickly read diagnostic codes for an accurate understanding of the condition of the vehicle.  

The Road to Success: Car Sales Training to Ignite Your Career

What can you do to overcome customer objections and close more deals?

sales training
Leading the Race: The Imperative of Being First

An extension of reconditioning software, the DVP is a versatile customer-facing digital evidence manual or portfolio that warmly welcomes customers and presents your vehicles concisely and professionally.

Leading the Race: The Imperative of Being First - Velocity Automotive