Reduce reconditioning time to reduce costs and increase profits

Like other dealers, Tom Dunn, general manager of Fred Martin Superstore, Barberton, OH, wants to move every used acquisition into the field to maximize profits.

Still, Dunn, who has been in the used-car retail business for 30 years, says miscalculations slowed down the reconditioning process at his dealership.

“We were asked how long it takes us on average to get a used car ready for the lot,” Dunn told Wards. Although the estimate was four days, “we put it to the test, and it was 8 and a half days.”

This idea prompted him to become a customer of Rapid Recon, a dealership software system that monitors reconditioning workflows. The system has brought several benefits to the Dunn dealer, including cutting the reconditioning time in half.

Such miscalculations are not unusual, says Dennis McGinn, CEO of Rapid Recon. McGinn started the company after realizing that dealers didn’t know exactly how long it took to recondition each used car.

“None of them really knew what the number was,” McGinn says. “They said, it’s two or three days and I don’t really have a problem. We found that the average is really 18 days.

Not only did dealerships lose money because every car was missing from the lot, but they found many instances where technicians were not handling their liability.

“The result was that no one believed the numbers, and there were accusations,” McGinn says. “This system allows (managers) to see where the cars are, who is working on them and what is being done.”

A dealership’s inventory is entered into the system through a data feed, although customers can manually add vehicles. Rapid Recon customizes workflow software for each dealership.

Used car managers can use mobile phones, tablets or computers to view every reconditioning step on each car. This speeds up work approval without requiring managers to spend too much time working on sales contracts.

At Dunn’s dealership, reconditioning is a 20-point process from acquisition to vehicle completion.

“Our process is quite extensive,” he says. “Our timer starts when the vehicle reaches the parking lot. Each time the car moves (through the system), time is counted in steps.

As valuable as Dunn finds this process, he notes that another important benefit of Rapid Recon is the resulting data that allows the dealership to identify inefficiencies and system failures, manage vendors and increase productivity.

“Every car has a time to market and, based on the ACV (actual cash value), has a cost to market,” Dunn explains. “Each matrix I have looked at shows the maximum amount of money that can be earned between day 1 and day 10 (from acquisition). It is extremely important that you do not waste time.

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