Four Tips to Help Dealers Increase their Profit while Reconditioning

Four Tips to Help Dealers Increase their Profit while Reconditioning

The reconditioning process followed by a dealership impacts its bottomline by a significant amount. Similar patterns are repeated a number of times, and this can lead to either savings or additional expenses for the dealership. Maximization of profit on each reconditioned vehicle is only possible by minimizing the turnaround. This can be accomplished by a well-organized plan that allows the dealership to complete all necessary jobs within the least possible time. On the other hand, poor planning not only leads to wastage of time and money, but also keeps the entire workforce busy without sufficient return.

Effective Buying:
An efficient and well planned reconditioning process starts with purchasing the right kind of cars. In many instances, the dealerships tend to buy vehicles in haste so that they can fill their inventory quickly. While doing this, they often forget to research the history of the vehicles. It can be extremely useful to get reports from services such as CarFax, VinAudit, AutoCheck, and VINCheck because these reports reveal important information relating to the vehicle. With information received from these services, it becomes much easier for the dealers to make an informed decision. It is important that a dealership must avoid all vehicles that require a higher amount of reconditioning jobs to be done. Such lengthy reconditioning work represents money that may not be recovered while it is sold. Moreover, a higher wok volume also means a higher time involvement for the workers.

Offsite Centers for Reconditioning:
Some of the larger car dealerships have experienced great results by opening dedicated centers off their property for reconditioning and dedicated dialing. By doing this, they have been able to increase the efficiency of their overall reconditioning process. In some cases, these dedicated offsite centers have done well to service, detail, and display a vehicle within just one day. Auto dealerships have reported that since the start of his off-site detailing operations office, they have been able to reduce their reconditioning time to four days or less from a previous reconditioning time of more than five days. Instead of having to rely on guesswork, dealerships now have a clear understanding of its true cost for the reconditioning of each vehicle. Moreover, they now has plenty of free service bays available to handle the regular customers’ work.

Reduce Your Cost of Reconditioning:
Always be mindful of the fact that the reconditioning cost of a vehicle can get out of your hands very easily. As soon as this happens, the dealership’s opportunity to make money from the same starts reducing. This is why a dealership must make a conscious effort to reduce cost wherever they can without compromising on the vehicles’ safety features. One good way to reduce costs is to use non-OEM parts on everything starting from wiper blades to brake pads. Many dealerships also spend excessive amounts on outside vendors that fix dents, recondition the upholstery, and perform other similar jobs. Keep a close vigil so that the expenses don’t remain unchecked.

Dedicated Plan for all Vehicles:
In order to determine the retail prospect of the vehicles, it is important to quickly evaluate each of them. This evaluation process must also cover trade-ins that can be discussed on a daily basis so that the correct volume of work is received. Dealerships may also establish a range of expenses for most of the reconditioning tasks to streamline the process. Vehicles with a reconditioning cost within this range can be processes as per plans. However, the dealership must try to ensure fast approvals or rejections for vehicles beyond this expense range.
Continuous monitoring of the reconditioning process is necessary to ensure its smooth functioning. This will also help the dealership improve the bottomline by making adjustments to the process as required.    

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