Recon Work Requires Team Effort

Dealers can end the tug-of-war between car dealership departments when it comes to getting trade-ins ready for resale.

It’s the rare trade-in vehicle that doesn’t need reconditioning before they are sale-ready.

But doing that work can get bogged down if dealership departments – mainly service, parts and used-car sales – aren’t in sync.

Indeed, sometimes they’re working against each other.

“There’s often a tug-of-war between the used-car manager and fixed operations,” says Josh DeYoung, vice president-sales at Velocity Automotive, a provider of software designed to speed up the reconditioning workflow.

“It’s almost like they are fighting against each other,” he says during a recent Ted Ings’ Fixed Ops conference. “It’s best to get the technicians, the fixed operations director and the used-car manager working together.”

Otherwise, it can cost a dealership money.

NCM Associates, an automotive consulting group based in Kansas City, MO, calculates the average per-vehicle holding cost at $40 a day, which accrues from vehicle acquisition to its retail sale. A 10-day recon cycle potentially depreciates a car $400.  

Dealerships that can move cars from the trade-in acquisition to sale-ready stages usually see more inventory turns, higher profits and fresher stock.

Workflow automation is the way to manage a multifaceted operation such as reconditioning, says Dennis McGinn, founder of Rapid Recon, a provider of workflow software.

Fixed operations staffers often aren’t as aware as the used-car department that used cars depreciate daily.

“When we appraise cars, we should be launching the reconditioning process at the same time,” says conference panelist David Simches, group used-car director at the Florida-based Crown Automotive Group. “We want to set work items early so we can launch into it.”

What needs reconditioning on a vehicle should be noted during a trade-in walkaround, says DeYoung. “Many dealers today aren’t doing trade walks. These have to happen. Write down everything needed.” 

Depending on the vehicle, reconditioning can include engine work; tire and brake pad replacements; dent, ding and scuff repairs; and interior restorations.

McGinn sees the reconditioning process getting better as departmental accountability kicks in. “Before, everyone wanted someone else accountable.”

He says time and cost efficiencies are achieved if everyone involved in the process can say, “’I did my part.’”

In a dealership’s internal accounting, reconditioning involves one department (fixed operations) charging another department (sales) for work performed.

“The goal is to recondition at a fair cost,” McGinn says. “Quickly accumulate all needs and how much it will cost.” With an automated system, “all is being watched by the used-car manager, who can say yes or no to items on a detailed list” put together by technicians.

But if the service department is trying to hit a home run off the pre-owned vehicle department by charging too much for reconditioning work, weird things can happen.

Some auto retailing experts tell of times when used-car managers would take a trade-in to a nearby repair facility that charges less than the dealership’s service department.

“That’s about as bad as it gets,” says one industry veteran. “Dealers who discover that happening are typically shocked.”