Improve Recon to Profit in a Tougher Used Car Market

It has been more challenging to maintain gross profit margins on used cars than it was last year. This isn’t news. Vehicle depreciation normalization, increased new car availability, slowing sales, rising interest rates, and pesky inflation are just some of the macroeconomic factors at play. The question is, what essential process do all dealers have control over? Reconditioning.

Here are two simple ways to improve recon:

1.)   Get control of the process

Use a simple software tool like ReconCloud to streamline your recon department. All stages, times, and jobs need to be modeled to create efficiency and metrics to improve work time. Yes, your team may push back when you suggest a new software tool in their department. That’s why it must be simple and not require much interaction.

2.)   Buy lot-ready vehicles

Internet-based dealer-to-dealer markets have been around for over 18 years now. How do I know?  We invented the first one in 2005. There is no better way to improve your lot ready times and take pressure off your recon staff than acquiring a front-line ready vehicle from another dealer. Sure, you will pay above auction, but how much do you save on labor, parts, and supplies while you recon it at your dealership. Dealerslink is the preferred method to acquire lot ready vehicles.

Once you have these two strategies in place at your store, you will increase average lot ready times across the board and reduce your overall inventory age, thus reducing exposure to depreciation and historic high flooring costs.

It may be awhile before flooring interest rates go down. Every dealership MUST find operational efficiencies to preserve profit. We find that recon is often the most inefficient and neglected process in dealerships. 2023 is the year to get a handle on your recon.


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