Getting More Out of Used-Car Reconditioning

If you manage a reconditioning operation, how you structure the flow of cars through that workflow makes a significant difference in recon’s contribution to sales.

The objective here is to get used cars to sale-ready quality status quicker to sell more of your vehicles within the first 30 days you own it (Used-car experts tell us that window is now closer to 14 days!) Dealers consistently doing so have achieved a recon time-to-line turn of three to five days.

These principles apply to both manually operated and software-based reconditioning. Either system works best where the workflow is structured by well-defined action steps. This article looks at their importance and why.

Oil the Assembly Line

In reconditioning, the idea is to move newly acquired vehicles to sale-ready status through a minimally disrupted continuum – think of an assembly line. There needs to be checks and balances in this process, but too many slow down the line. When the line slows, time to line and the critical metric it supports, speed to sale, stumble.

When your line stumbles, vehicle output dribbles rather than flows. Dribbling outputs create problems for you – increasing your daily per-car holding cost depreciation, escalating frustration and contributing to missed sales opportunities and weakened grosses.

To evaluate these observations, I studied the reconditioning data of 66 dealerships, half reporting fast time-to-line results, the other 33 showing slower times. These dealerships used reconditioning software. However, these findings apply equally to manual reconditioning. My fundamental discoveries are:

For example, a vehicle repaired and removed from a lift and pushed outside to wait for detail might remain there for hours or days before asked about. Step Notification use would alert the individual responsible for the step in the workflow so the next phase could continue uninterrupted.

Best-Practice Steps

Best Practice workflow steps, in not necessarily this order, are the optimum number that works well for most dealerships:

Detail times are a common bottleneck. My survey revealed that 88% of the slower time-to-line stores had high detail times – 4.7 days per vehicle compared to 1.7 days for faster stores.

Photo time turnaround can be another bottleneck. Few of the 66 stores in my study had in their step lineup a Photos Step. Not having this step put into place seems to be a missed opportunity for time-to-line improvement.

Approval Step

One of the most productive relationships a dealership should be enjoying is between the service department and the used-car manager. Here we’re talking about an automated process to alert the used-car manager or their proxy when repair estimates are complete to gain work approval quickly. Automation puts this step on these individuals’ phones, texts or emails for access and approval 24/7.

Fast Approvals here stimulate repair work speed and contributed to faster overall annual output.

Summary

With this information and data from this report, I would have this layout at my store, a three-store group. Here are my concluding thoughts about workflow efficiency and time-to-line speed:

Modern reconditioning to meet today’s consumer demand, whatever the market, is sound science as well as efficient, transparent and accountable. The system must get cars sale-ready fast to ensure the dealership meets customer demand efficiently and engagingly.

Dustin Jones 2021