Businessman walking away from money

Walking Away from Profit

  • Reconditioning should be among your most profitable investments.
  • Delays and lack of process are profit-killers.
  • Software can help you maximize profits in reconditioning.

I read a comment recently in one of the online forums for Used Car dealers. The poster, a dealer principal, wrote: “With reconditioning cost through the roof these days I prefer to buy as ready as possible. I feel my money is better spent on the frontline ready car.” 

Really? Of course it’s great if you can score a vehicle where all you need to do is wash it and go, and no buyer should pass on those rare opportunities. But limiting yourself to only those gems can put you behind your competition and leave money on the table.

If you’re shying away from vehicles that need some reconditioning because of the cost, then you need to take a hard look at your recon process. Reconditioning should be one of the most profitable parts of your operation, allowing you to acquire at lower costs and selling at higher margins. When you buy a frontline-ready vehicle, chances are that someone else has done the reconditioning, and is marking up your cost in the process.

Rather than avoiding the time and effort to recondition cars, focus on what your reconditioning process looks like. Brining a car from acquisition to frontline shouldn’t take more than 2-3 days. If your average cycle time is greater than that, then there is efficiency to be found in your operation. Are vendors and technicians available to perform the work when they are needed? Is your parts pipeline efficient? Are cars left waiting for work because of parts holds or other delays? All of these common issues can be relieved with better workflow management and integration, and using software like Repair360 can help to streamline your process and integrate all the tasks and contributors in a single management platform, allowing you to know the status of all your inventory in reconditioning and identify and correct issues without picking up a phone or walking to the shop. 

If you avoid reconditioning your acquired vehicles because it’s too expensive, you’re doing it wrong. Well-managed reconditioning should add to the selling price by a factor of 2X or more over your total recon costs, and streamline the operation to knock days off your cycle times so your cars are ready to sell even faster.