The First and Most Crucial Step to Profitable Used Cars

By Dennis McGinn, Founder and CEO of Rapid Recon

AutoSuccess, September 2024

In today’s evolving automotive industry, efficient reconditioning is more essential than ever for maximizing profitability. Rising interest rates and shifting inventory dynamics make it critical for dealerships to streamline their Recon processes. While many have relied on manual methods or disjointed systems, there's a growing trend toward adopting digital Recon tools designed to optimize operations and reduce costs. However, the key to success lies not just in adopting these tools, but in ensuring their simplicity and seamless integration into existing workflows.

Tracking and measuring performance is essential for a successful Recon process. The adage "You can’t improve what you don’t track" holds particularly true here. Yet, many dealerships continue to use spreadsheets or fragmented systems that fail to communicate across departments, leading to inefficiencies, miscommunication, and missed opportunities. For instance, when a car is acquired via auction or trade, the service department often remains uninformed, preventing them from making timely decisions about capacity and work prioritization. This lack of visibility delays the car's journey to the sales lot, increasing holding costs and reducing potential profit. Every day a vehicle waits for reconditioning is a day of lost revenue.

Digital Recon tools are designed to bridge these communication gaps by digitizing existing processes rather than overhauling them. When all departments, sales, service, and management, have access to real-time information, the guesswork and finger-pointing disappear. For example, in many dealerships, there’s often tension between service and sales, with each side blaming the other for delays. Well-integrated digital systems document every action, providing clarity on where bottlenecks occur and fostering a culture of accountability.

Implementing a Recon tool often reveals that actual time-to-line (T2L)—the time it takes for a vehicle to become frontline ready—is far longer than initially estimated. Dealerships might believe their T2L is around 5 days, only to find it’s closer to 20 or 25 days. [RA2] This discrepancy significantly impacts profitability. Tracking T2L allows dealerships to pinpoint delays, whether in mechanical reconditioning, detailing, or the approvals process, enabling them to make targeted improvements. Every day saved translates to increased revenue.

Reconditioning isn’t just about fixing cars; it’s about refining processes to be as efficient and effective as possible. Dealerships that excel in this area view Recon as an ongoing opportunity for improvement rather than a one-time task. This involves continuously reviewing and adjusting workflows, adopting new technologies, and aligning employee incentives with dealership goals. Some dealerships are experimenting with pay plans that reward employees based on the speed of reconditioning rather than traditional compensation methods. Accurate data on turnaround times, provided by a comprehensive digital tool, is crucial for implementing these incentive plans effectively.  

Ultimately, the goal for any dealership should be to make the Recon process as simple and streamlined as possible. Simplicity ensures consistent system use, clean data collection, and alignment among all departments toward common objectives. As the automotive industry continues to evolve, the dealerships that thrive will be those that embrace digital tools, track key metrics, and continuously seek improvement opportunities. In the end, what gets measured gets managed, and it’s this approach that will drive long-term success.

About Rapid Recon

Reconditioning workflow automation from Rapid Recon is the industry standard in time-to-line inventory turn and speed-to-sale vehicle revenue enhancement for automotive retailers. Benchmarking data based on 13 million vehicles processed uniquely positions Rapid Recon to advise dealers on how to improve their store’s profitability. Used by more than 2,000 dealerships, Rapid Recon ensures the accountability of processes, property, and people. Hence, dealers know answers quickly, find assets anywhere, and sell vehicles promptly to grow dealership profitability. www.rapidrecon.com CALL US: +650-999-0497