Every additional day a vehicle spends in your service bays costs the dealership. Streamlining this process is one of your best ways to save time and money and sell cars fast.
When your dealership buys a used vehicle to resell, it always requires some work to get it into top selling condition. The hope is that each vehicle moves quickly from recon to the sales floor, where it can recoup the money you put into it. The faster you turn new inventory around, the better your chances for a profitable sale.
But new inventory doesn’t always get through recon when you were hoping they would, and that’s a problem. After all, cars sitting in your service department aren’t making any money, and, worse, they cost money and see sale value erode.
Luckily, there are some actions you can take to improve your time to turn, saving you money in the process. Here’s a look at five tips you can utilize to keep the pressure off your service department and reduce time to turn.
1. Practice acquisition discipline
The first step to taking the stress off your service department is practicing acquisition disciple. Exercise caution when purchasing vehicles at auction and don’t invest in cars that could require excessive repairs.
To accomplish acquisition discipline, you’ll have to avoid vehicles that need a lot of work, including vehicles with extensive CARFAX reports. Even a fully repaired and reconditioned vehicle with multiple past incidences might have underlying damage that you’ll have to address before getting it to market, and that could still reduce its sale value.
It’s also important to cut your losses if you do make a poor decision. Putting thousands of dollars into repairs that you probably won’t earn back through the sale increases your turnaround time and expenses.
If a repair costs too much, walk away and learn from your mistake.
2. Limit bodywork repairs
As your service department is repairing a vehicle, some jobs will be mandatory and others optional. Many pre-owned cars require some level of bodywork, but you can limit your turnaround time by focusing on buying vehicles that won’t require significant labor.
That’s not to say that every used car you buy will be in immaculate condition. But selecting vehicles that your service staff can quickly repair and get onto the lot is essential to improving your turnaround time.
3. Source inexpensive parts
To save money on your repairs, you might look at sourcing less expensive parts. While there’s something to be said for using OEM parts, including their guaranteed quality, aftermarket parts are increasingly viable for multiple reasons.
First, aftermarket parts cost less and allow you to shop around. You’ll find that the quality varies, but you can find a high-quality manufacturer that meets your needs if you put in the effort. You might even find that the aftermarket parts are of better quality than OEM.
Availability is another reason to go with aftermarket parts because you won’t have to order them directly from the manufacturer or distributor. You can often source aftermarket parts locally, speeding up the repair process even further.
4. Avoid outsourcing vendors
Outsourcing specific jobs is convenient, particularly if you don’t have the equipment required for that job or your service department is overwhelmed. However, you’ll want to handle most of your repairs on-site to avoid delays that are outside of your control.
It’s also worth noting that you can negotiate prices with third-party vendors to drive costs down as much as possible. If you can secure favorable pricing and only outsource work when necessary, third-party vendors can be advantageous.
5. Improve communication between departments
Finally, your job as a manager is to oversee the entire operation from start to finish and avoid overwhelming any department within your dealership. Highlighting the importance of communication to those teams is crucial because it keeps your sales and services teams on the same page.
If the sales team wants a particular vehicle on the lot immediately, that car should become the service staff’s priority. But if the service department doesn’t have this information, it’s unlikely to come through.
By encouraging communication between departments, you ensure that everyone has the pertinent information to maximize efficiency and reduce turnaround times.
Technology can make the difference
We live in an exciting time for used car dealerships because technologies we’ve never had before are now available to reduce costs and reconditioning turnaround time.
We mentioned that CARFAX could provide valuable insight into a vehicle’s history, helping you avoid cars with extensive damages in their past. Just as important, new workflow solutions can automatically track a vehicle’s service progress in real-time and share the information between departments. That way, team members stay in constant communication, but it doesn’t interrupt their work or slow down operations.
ReconVelocity has a tool that dealerships can use to track and manage the entire reconditioning process. This software automates workflows, reducing the time and money every recon takes. Call (850) 616-6294 to speak with one of our recon experts or request a product demo today.