Following their visits to NADA last month, we have a more thankful nation of car dealers. For many reasons, optimism is strong for a healthy 2025.
S&P Global Mobility projects 16.2 million new-vehicle sales for the year, up 1.2% from last year. BEV (Battery Electric Vehicles) growth is estimated to grow, interest rates are becoming more favorable for consumers, and an optimistic economy bodes well. At the same time, without process improvement, the PPV of the used car (profitability per vehicle) will continue to evaporate.
The aging fleet promises strong service sales. According to the Bureau of Transportation Statistics (BTS) and Hedges & Company estimates, the average age of vehicles on the road is projected to be 14.5 million by the end of the decade, up from 13.9 million last year.
Another area for optimism is the end of the Scan-and-Pray trade-in process.
Scan-and-pray practices leave risk unrecognized when assessing a vehicle’s trade value. Your discussion with vendors of these devices at NADA may have led you to a similar conclusion.
Every acquisition in this used car market must lead to a profit per vehicle outcome. This is the age of knowing your parts and labor costs to bring trade and purchased vehicles to retail ready. You want to know your necessary recon costs before you make your trade offer.
Now, the used car department can factor a retail or wholesale disposition strategy into acquisitions.
Consider why basic scan-and-pray scan tools are not sophisticated enough to maximize used car PPV.
Not having precise parts and labor cost data for your offer can turn per-vehicle profit projections on their heads. Our work with these VIN scan practices reveals that while the average identified parts and labor costs for most vehicles are around $700, the range is from zero dollars to $10,000.
Another advantage of this scan type is that it captures all reconditioning data that details parts and labor costs. It compares thousands of vehicles of the same make, model, and age within a national reconditioning database. This same repair detail can be automatically supplied to the parts and reconditioning departments so these cars can flow from acquisition directly into reconditioning. Cars that enter recon from trade hit the sale lot earlier. Shaving a day off recon increases turns and commands more sales associates and customer attention.
As dealership service departments recognize, vehicles older than 10 years often require engine work, suspension issues, and brake system replacements. “Prioritizing engine performance and transmission assessments, along with routine checks of exhaust systems and emissions controls, is vital,” notes the consumer-centric website Automotive Quest.
The right trade-in VIN-scan protocol delivers deeply detailed vehicle and repair cost diagnostics. This comprehensive information builds objectivity into every appraisal – impartiality you need to maximize PPV on each transaction, earn customers’ confidence in your offer, and move reconditioning forward. You’ll want to use this appraisal practice at every trade as you build profit per vehicle across the board this year.
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
