Autopro Marketing, Inc.
Is Mobile Service the Answer to Higher Recall Completion Rates?
Recall completion percentages have been increasing, but despite increased communication attempts, that increase is hitting a plateau.
A recent trend reveals that many vehicle owners are very interested in mobile services. Currently, the percentage of independent repair shops that offer mobile services dramatically outweighs franchised dealers. Are dealers losing their customer service edge to independents who are willing to go the extra mile to win the business?
According to an article in Automotive News, the majority of services offered are valet services, where the dealer comes to the house, picks up the vehicle, completes the work, and then returns it. 28% of dealers offer valet service, while only 6% provide mobile service, which is performed at the customer's location, home, or work.
However, a 2018 study by Cox Automotive reported that 39% of consumers prefer mobile service over valet services, which came in at 36%. While that disparity may not seem significant, when it comes to recalls, those numbers could be even higher.
Now, I can imagine what many of you are thinking; that it can be detrimental if the customer does not visit the dealership. They then fail to get the full experience that dealers work so hard to achieve. Or, perhaps you may feel you will be unable to upsell effectively when the customer is not at the store. You can also lose out on any equity mining opportunities to trade the customer into another vehicle. All can certainly be true. However, consumer demand does tend to be a driving factor. And, as demand for these type of services increase, it is certainly worth taking a look at to stay competitive. It is just a segment of your customers that desire this type of service.
Also, if you think that offering mobile services can be costly and that it would be impractical to perform recall work at a consumer’s location, according to the Automotive News article, that is not always the case. Many recalls can be completed at the consumer's location, similar to the ease of quick lubes. While any recall requiring a lift will need to be done at the dealership, dealers can fix many recalls, including airbags on site. Many OEMs are testing and implementing mobile service programs with their dealers, including Toyota, Ford, and BMW.
Independents may currently have the lead when it comes to mobile service implementation, but it wouldn’t be that hard for a dealer to gain back market share rapidly. And the benefits are worth it. Today’s consumers are all about convenience, and independents can't perform recall repairs. Consider a customer in need of a recall repair who calls your dealership for mobile service. Is it that hard to imagine upselling them to have an oil change or other service done at the same time?
The most significant complaint from consumers regarding recall repair is that, while they want to have it done, they don't have time to come into the dealership. They are also nervous about losing access to their vehicles for some time. It is perhaps worth considering what services you could provide at the customer’s location and what recall repairs you can do off-site along with oil changes, tire replacements, and more. By offering these services in addition to a recall repair, your dealership could increase service revenue without having to upgrade facilities with additional service bays.
With mobile service, you could capture market share away from independents, and, at the same time, build a new customer base by conquesting customers from independent service repair facilities. In so doing, it can be possible to employ more technicians without needing more bays. You can also increase your customer base through conquest, increase recall and warranty work, and boost your recall completion rates.
Mobile services can offer your dealership a way to help solve the problems that have driven customers away from your store and towards an independent. And give you a competitive advantage that independents cannot combat. That would be an excellent way to recapture service business (especially routine maintenance) while showing the customer that service at your dealership can be just as convenient.
I realize it is probably not a practical solution for some of you. But according to the Automotive News article, it may at least be worth a look … it's always good to be ahead of the curve and on top of anything that can keep you winning in this highly competitive market!
Autopro Marketing, Inc.
Where Oh Where Do We Find More Techs?
With the increasing demand for service repairs, dealers are scrambling to recruit more technicians. At the same time, the pool of experienced technicians is dwindling, as not enough new technicians are entering the workforce -- and demand will only increase.
Regardless of how much money your dealership may spend to expand your facilities to accommodate more work, if there aren’t technicians in the bays to do it, it’s a losing proposition. In fact, many dealers are aggressively recruiting technicians from other dealerships, offering increased pay and better working conditions. But don’t throw in the towel just yet. Winning the war for talent could be within your reach, with a little thinking outside-the-box.
One way to increase technician availability is by recruiting inexperienced young people and providing them with on-the-job training. They can start with routine quick-service type ROs including tire rotation, changing out windshield wipers, checking fluids, and lamp replacements. While this can help provide more useful hands, it also takes years for a brand-new technician to gain enough knowledge to be on par with the already experienced technicians. And, as new technology continues to dominate vehicles, even the most experienced technicians can essentially be forced to go back to school to learn how to repair today’s highly advanced vehicles.
According to an article in Automotive News, there is perhaps a more practical way to access technicians who can immediately perform and increase service revenue. That is by recruiting military veterans. And that makes perfect sense.
Frequently, when businesses actively recruit military veterans, it is because they want to reward these patriots for their service to our country. However, let’s not forget that many military veterans simply did their four years of service, learned a trade, and left. Many were fixing multi-million-dollar aircraft, tanks, military transport vehicles, and other machinery that are, in fact, vehicles. These veterans leave the military with a skill set that may even surpass many dealership technicians, except for the OEM specific knowledge. This potential pool of candidates already has an extremely sophisticated knowledge-set, and it can be much easier (and quicker) to get them productive.
It might, at the very least, be good food for thought.
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Autopro Marketing, Inc.
Who’s the Baby? Recalls and Infants
When people think of recalls, at least in our industry, most think about vehicles. For many consumers, merely contemplating spending their time at a dealership waiting for a recall to be repaired or losing the use of their car for some time, seems draining and inconvenient. But most consumers probably don’t consider the potential risks recalls can pose to their families.
A recent article in Consumer Reports reviews recalls related to child-safety seats and sleeping infants. While the report focused on the seats, it did mention proper installation. That installation typically involves the LATCH safety system installed by car manufacturers, which anchors the child safety seat to the vehicle's frame.
I’m willing to bet that upon hearing the news of a child safety seat recall, most parents would rush to the closest retailer to exchange it for a safe one. Would that be inconvenient? Absolutely. But they would do it because parental instinct and family preservation are ingrained in our DNA.
However, consider the consumer reaction should a vehicle's LATCH system have a recall. While the consumer may have the safest car seat in the market, without a properly operating anchor, the infant’s life safety is at risk. But would parents rush to their local car dealership to get that defective anchor repaired? My guess is that they would not. Is an anchor system explicitly designed to hold in and secure a child seat, even something that could be recalled? Absolutely! In 2018, Cadillac CT6 sedans were recalled for issues with the LATCH system, which made it harder to install a car seat correctly. Also, in 2018, 55,000 Volkswagen Atlas models were recalled for a design flaw with their LATCH system, which couldn't accommodate wider car seat bases. In 2016, almost 200,000 BMW X3s and X4s were recalled because the anchors could break while in use.
The point I am trying to get across here is that, no matter what the recall is, an unsafe vehicle is unsafe for everyone inside. It does, however, hit much closer to home and make it more real when a baby’s life is in danger.
Being more specific about the recall itself helps to create emotions that cause consumers to act. Generalities don't always motivate people, but start talking about injury to their child? Now they're listening.
How does all this apply to recalls in general?
Many dealerships do their best to reach out to and inform consumers in their PMA of any existing recalls, as do manufacturers. The problem is that far too often, these messages don’t get read because they are trashed or go into a spam folder. Our industry needs to deliver impactful messages to make an impact on recall completion rates,
My point is that consumers not only NEED to know about existing recalls, but they sincerely WANT to, as long as they understand the impending dangers. It's easier to track down existing customers, but that second or third-generation vehicle owner is much more elusive. There are ways, of course. But sometimes it may seem too much of a project for a dealership to tackle due to costs and the investment of time.
However, spending the time and effort to track down same-make vehicle owners in your PMA, designing professional communications that relay WHY the recall needs to be repaired, and utilizing multiple channels of communications to reach them makes a huge difference. You stand a good chance of reaching these consumers and increasing service revenue through recall work and other services that may be discovered during the initial inspection. And you can develop a loyal and robust base of NEW service customers in your area.
It’s hard to imagine a mother (or father) being upset if a dealership were to tell them that the LATCH system on their vehicle could be faulty and could endanger a child, BUT they can quickly fix it at the dealership right now. I think the response would be quite the opposite-- one of gratitude. And I guarantee that they won’t find your service department or communications “inconvenient.”
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Autopro Marketing, Inc.
Leverage Your Marketing to Gain More Service Business!
Retention is vital for long-term profitability and health. Some dealers coast along thinking they have retention covered, when, in fact, nothing could be further from the truth. Sure, offering a great customer experience in service can head you in the right direction. However, it is not just free coffee, donuts, or wi-fi access that bring customers back. Customers come back to the dealership because they trust that their vehicle will be adequately serviced at a fair price and made safe for them to drive.
Customer retention is an activity that is taken to prevent defections (i.e., going to your competition). Retention marketing includes programs and strategies that focus on growth and retention of existing customers through incentives to lure them back into the dealership for subsequent transactions. These ongoing touchpoints prevent your dealership from losing customers to the competition and enable your dealership to save money otherwise spent on customer acquisition tactics. They also increase the likelihood that these retained customers buy their next car from you.
Retention marketing programs can not only help you stay in contact with customers but can also be used to deliver valuable information at the same time. Many dealerships subscribe to and deploy a variety of marketing services designed to keep them top of mind. However, many don’t leverage these to inform customers about recalls. Perhaps they think that recall information is too broad and won’t apply to everyone. I'm sure some perceive recall communication as highlighting a negative situation. The truth is, consumers view recalls as an extension of sound safety practices. Consumers gravitate to organizations that look out for driver safety, have product integrity, and practice proactive problem resolution.
Also, recall awareness communications can elevate your dealership’s profile. Consumers tend to appreciate the effort and reward your dealership by servicing with you.
Many dealerships have an e-newsletter they send to customers. These same e-newsletters can easily include information about existing recalls. They are a channel that dealerships already use to communicate with their customers. By using this existing medium to share information about recalls, you can reinforce your dealership’s commitment to vehicle safety and build consumer trust for your dealer and factory brand.
Another tool your dealership can deploy is an online scheduler. Most service schedulers require (or at least ask) a customer what vehicle they are bringing in. Nobody likes surprises in the service lane. A Service Advisor or Director can quickly review which vehicles are scheduled for the next week or so, identify those with existing recalls and call, text, or email the customer this information prior to their visit. This also helps in scheduling the appointment properly since some recalls take time to fix which means setting up alternate transportation for the customer ahead of time.
Imagine a consumer’s disappointment if your dealership failed to catch a recall during a recent visit, and the consumer then independently discovers its existence from another source. These oversights can chip away at your credibility and the customer’s loyalty.
Provide your customers with valuable recall information that affects the safety of their vehicles. Offer them a convenient time to get the recall handled. And at the same time, offer those service coupons you already had planned. You can easily encourage the customer to allow you to do both.
A few simple customer retention strategies in place can help prevent defection and build loyalty. This can also reduce customer churn without spending thousands of dollars every month in acquisition efforts to replace the customers lost the previous month. Recalls are a unique opportunity to win over new customers, retain existing customers, and drive revenue without any need for discounting.
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Autopro Marketing, Inc.
How Will Robots Affect Driver Safety?
Several manufacturers, including Tesla, have rolled out some “innovative” features that include self-driving technology. At first glance, consumers like this type of vehicle technology because it typically means that these vehicles are fuel-efficient, use advanced technologically and are, frankly, cool. However, there are hazards involved with this advanced technology and, sadly, plenty of accidents (and deaths) are reportedly associated — some caused by human error, and some by a person’s misunderstanding of the technology.
According to an article in Automotive News, some automakers and ride-sharing companies want to go even further. Not only do they want to create self-driving vehicles, but also plan to remove the very controls that allow a human to intervene when necessary – namely steering wheels and brake pedals!
While self-driving cars are still in their infancy, auto manufacturers are in a race to be the first to market. Several states have limitations and regulations regarding how and if these vehicles can be tested. Most of them still have the infrastructure to allow drivers to take over if needed. The argument state and local governments have put before NHTSA is that the federal government should revise current regulations to ensure vehicles also allow human interaction. Many people want a more relaxing commute and are intrigued by this new technology. However, in removing the steering wheel and brake pedals, consumers are entirely at the mercy of a computer, with no chance to manually intervene. All you can do is watch and (like in the old days of emergencies) duck and cover.
Some of this early technology – even when the driver can interact and take over – is flawed. There are sure to be recalls and technology issues that create dangerous situations. Does any consumer want to put their lives in the hands of a computer? Some already do on a smaller scale. For example, while the world is telling drivers not to text or look at their phones while driving, Tesla has huge interactive screens in some vehicles that can be just as distracting!
By taking away the ABILITY for a person to control a vehicle, manufacturers force consumers to rely on self-driving vehicles to operate safely amongst conventional human-controlled cars. Also, you must admit, they are not always operated by the most safety-conscious drivers!
Yes, technology is cool. However, while this future of vehicle technology may look and sound desirable, there are many hidden safety issues inherent to these vehicles that we should consider. As a society, it may be a good idea to try not to find self-driving technologies quite so alluring – similar to how a mosquito is attracted to a bug-zapper. The warm glow might not be so comforting, after all. The proper balance is to evaluate what technology can do for us while looking at how fail-safe it is. Can we really endure another Takata disaster?
If we fail to proceed cautiously with vehicle safety at the forefront, we could quickly end up with road rage on a robotic level. With vehicles doing their own programmed, pre-determined tasks while each manufacturers’ vehicle has different priorities.
Perhaps not the nirvana of a pleasant commute, but one of helpless commuters staring out their vehicle’s windows helplessly wondering what to do. And that is a commute that is probably not as pleasant as expected.
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Autopro Marketing, Inc.
An Innovative Way to Keep the Roads Safe & Bring in Customers
Have you ever seen a fellow motorist texting while driving? What about eating while driving? Putting on makeup? Turning around to yell at their kids? Yes, all of these happen (and more) daily. Sometimes, all it takes for an unfortunate accident to occur is for a driver to spill that boiling hot Starbucks on their lap while commuting.
Teen drivers follow the examples and lessons their parents and other authority figures teach them when it comes to driving. That driver’s education class can only teach them so much.
There are many dangers young drivers will experience once they get a license and are on their own to face the hazards of the road. In fact, according to the CDC, motor vehicle crashes are the leading cause of death for teenagers; causing six deaths per day for drivers between the ages of 16-19. And they are three times more likely to die in a fatal crash than drivers over the age of 21.
The eight most common causes for these accidents are driver inexperience; driving with teenage passengers; driving at night; failing to use seat belts; distracted driving (Starbucks anyone?); drowsy; and reckless and impaired driving.
In general, it appears that this generation of young drivers is easily distracted from the responsibilities of operating a vehicle. The problem isn’t going away any time soon, but there may be something we can do about it. I’m sure you would agree - parents don’t want to get a phone call informing them that their teenager has been in an accident.
It struck me that, as dealers involved in the local community, perhaps there is something they could do to help with this problem
Many dealerships hold new car and service clinics regularly. Dealers do this because it allows customers to ask questions that they may have forgotten during the delivery process. It is also an excellent opportunity for the dealership to introduce these customers/potential customers to the service department personnel. There is time for a much more in-depth introduction than during the vehicle delivery process. Also, it helps the dealership continue to build that relationship with the community and work towards creating customer loyalty.
Here’s an idea -- How about adding a class on teenage driving safety? Get your customer’s involved. Tell them that they are welcome to bring their adolescent drivers with them. Blast it all over your social media.
You want to know what the best part is? The CDC has already laid out the entire course. They provide downloadable materials; content syndication; and an event planning guide for you to use through their "Parents Are the Key to Safe Teen Drivers” program!
It can be tough to get a lot of participation in a sales or service clinic. However, reaching out to your community and offering classes to teach them (and their teenage drivers) safe teen driving advice directly from the CDC, is an excellent service for your community and the next generation of car shoppers
If you help save their children from fatal car accidents? Now you have a customer for life.
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Autopro Marketing, Inc.
Getting Service Recommendations Is Child's Play
Customer experience and standing out from the competition by excelling at customer satisfaction is still very much a good business practice today. Time is valuable for today's busy consumers, and many dislike the vehicle service experience at dealerships because of long wait times.
Loaner cars and shuttles help, but they can end up making it more challenging to contact customers for service recommendation approvals. This then leads to phone tag while the vehicle takes up a valuable service bay. If the customer is in your waiting area, you have easy access to the decisions you need to keep operations at an efficient pace.
On the other hand, if a customer stays at the dealership waiting for their vehicle, they tend to get antsy. The longer that they wait, the more irritable they get. This is human nature. Unfortunately, it can also lead to a lot of declines for additional service because the longer wait tests the customer's patience. Dealerships try to alleviate this with more efficient processes, increased service bays, better shop capacity management, and the strategic scheduling of appointments.
According to a recent article in Automotive News, one dealership has an interesting way of handling this problem – a playground. It may sound silly at first, but it keeps service customers at the dealership, which means easy access to discuss recommendations, leading to increased RO approvals.
A dealership in Wisconsin installed a playground between its two franchise stores. It resulted in more customers choosing to wait for full service rather than quick service. Service recommendation approval increased, which drove up service revenue and, as a bonus, improved customer experience, and satisfaction.
In today's highly competitive service market, standing out from the competition with a unique customer benefit helps your store differentiate itself from competing franchise dealers. It is even more critical when it comes to the competition from independent service facilities. While the "Jiffy Lubes" of the world rely on a selling proposition based on price and convenience, this dealership in Wisconsin has turned the table 180 degrees by elevating the customer experience. And at little expense.
No, I am not necessarily suggesting you run out and install a playground. But I do recommend finding some strong differentiator that makes your dealership's service department stand out from the rest. Promoting "FREE WIFI" is not going to cut it anymore.
Consider making your dealership a place where customers don't mind hanging out by providing the amenities they enjoy. Perhaps something such as an espresso bar, shared office workspace, private television monitors, reclining or lounge seating, connected tablets, foot massagers and a host of other conveniences. Make going to the dealership feel more like a day spa and less like a trip to the dentist. This can help negate the "time" advantage independents have ingrained into consumers through their positioning.
Effectively taking away your biggest competitor's one – and only – selling proposition is a pretty compelling advantage. Do that, and you could win customers' business now and for many years into the future.
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Autopro Marketing, Inc.
How Can Your Dealership Win Business from Recall Customers?
A recent article in Wards Auto shares results from a study of 6,200 dealerships conducted by analytics company Marchex. According to the survey, dealerships who use active listening techniques and build rapport with customers on the initial calls are the top-performing 25 percent of dealerships in the study.
These top performers did the following things when communicating with customers: They requested the caller’s name 163% more than bottom performers; provided their direct contact information 40% more; used the words “please” and “thank you” 99% of the time; and laughed on half of the calls, which “kept the calls positive and relaxed the caller.
How effective do you think adopting these traits and practices in your BDC or service department would be, rather than the generic assembly-line processes that some dealerships employ in the service drive?
If you treat ALL service customers in the same manner that these top-performing dealers treat their sales customers, you just might achieve similar results. And, when it comes to warranty and recall customers, they are much more likely to call the dealership with a heightened sense of anxiety. By relaying more understanding and empathy, you’ll win over new service customers. You can also increase service revenue and build a relationship that extends past the service drive and into the sales department.
Recall customers tend to differ from regular service customers, and it helps to ensure excellent communication skills when interacting with them. Sales processes have changed in the last decade with the advent of new technology and enlightened and informed customers. However, service processes have primarily remained the same. Check them in, perform an MPI, contact the customer with any recommended service, complete the work, and then send them on their way. It’s time to upgrade that approach
Perhaps a little empathy, understanding, and following the lead of these top-performing dealerships can elevate service revenue to the next level and win sales indirectly. Why wouldn't you want to treat your service customers with the same politeness, gratitude, and appreciation?
Winning customers is not solely a feat of the sales department. Dealerships have many more opportunities to accomplish that same goal in the service department than they will ever have in the sales department.
Take a look at your service department. Is it time to up your communication and listening skills and be more empathetic with your customers? Your customers will not only pay you a visit, but they will return for future visits.
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Autopro Marketing, Inc.
A Tidal Wave of Change May Be on Its Way to Dealerships
Federal law currently prohibits dealerships from selling any new vehicle with an open safety recall to consumers. And now, Democratic Senators Richard Blumenthal (Democrat - Connecticut) and Edward Markey (Democrat - Minnesota) have reintroduced legislation that also prohibits the sale of used cars with open safety recalls, according to Automotive News.
If this legislation passes, it will have huge ramifications, not only for franchise and independent dealers but also for car shoppers. Whether you agree with this piece of legislation or are vehemently opposed to it, the industry’s practice of selling used cars with recalls has drawn the attention of lawmakers in recent years. Legislative analysts on Capitol Hill don't predict its passage. However, support could grow if there is a change in the administration or if voters rally their Congressional representatives.
Here is what I predict will happen over time:
1. Consumers will see less value for their off-brand vehicle trade-ins
Consumer opinion (and rightfully so) is that they should leave the dealership with not only a fair trade-in value but also a vehicle that is safe to drive. To date, dealerships have not been required to repair open safety recalls before selling a used vehicle. If this new legislation passes, any consumer whose vehicle has an open safety recall will find a lower trade-in value at an off-brand dealership than at a same-brand dealership. Because the off-brand dealership will have to hold onto the vehicle longer while they wait for the recall repair to be completed at what could be a competitor. Consumers, however, don’t care what the financial repercussions are for the dealership. They only care that they get a fair value for their trade and that the vehicle they are buying is safe.
2. Dealerships will find off-brand used vehicles more expensive to acquire
Front-line ready used vehicles at auction have become increasingly expensive. This legislation could easily segregate bidders and their strategies. A used Ford with an open safety recall will be more desirable to a Ford dealership than an off-brand vehicle for the simple reason that the Ford dealership can complete the open safety recall and recon it quickly. While the competing off-brand dealership is entirely reliant upon the speed at which the competitor can fix it. If you’re a Mazda dealership and a customer trades a used Toyota with an open safety recall, you may end up at the bottom of that dealership’s priority list, behind their loyal customers and even new customers who need recall repairs. The longer you have to hold on to that Toyota before selling it, the more expensive it is.
3. Dealerships will find same-make vehicles more attractive as trades and at auctions
The opposite is also true in that when presented with a customer who has a same-brand trade, dealerships will be more motivated to acquire that vehicle for their inventory than they would an off-brand trade. It has always been less expensive to take trades from existing customers than at auction and dealerships will become more aggressive with same-brand vehicle trades and at auctions than ever before.
There will be pockets of brands bidding on same brand vehicles, and it will become a part of the trade-in values/appraisals process and auction bidding prices. Because, while the winning bid price may be higher, the dealership knows it can repair the safety recall, recon the car and have it ready for sale faster than an off-brand dealership can.
4. Independents will struggle
Huge independents, including CarMax, will become entirely dependent upon franchise dealers to service any vehicles with an open recall that they buy or take on trade. Unlike franchise dealers, they can't "pick and choose" vehicles from customers. This legislation could completely change their business model. While the used car market has been hot, most independents are frustrated with the increased competition from franchised dealerships looking to acquire same-brand vehicles at auction. The increased demand for used cars has caused independents to drop prices to compete with franchised dealerships, which are perceived as more credible to the consumer.
This Blumenthal legislation is, of course, being lobbied aggressively by state ADAs and IADAs, along with just about everyone in the automotive industry. Consumers (the voters) will most definitely be in favor of it. And that is who politicians pay the most attention to. Aside from any political arguments, the need for open recall safety information will become increasingly crucial to all dealerships, both franchise, and independents. It’s hard to argue that consumer safety won’t win out in the long run, which should give all dealerships fair warning about what is to come.
The good news is that the endgame here is that vehicles, passengers, and the roads will be safer for everyone. And we're all for that outcome.
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Autopro Marketing, Inc.
What’s the Silver Lining in this New Car Sales Slump We’re In?
According to an article in Automotive News, dealerships are in a new car sales slump and have to increasingly rely on used car sales and service revenue to drive profits. Industry experts recognize that used cars are typically more profitable to a dealership than new.
Competing predominantly on price, dealerships moving new vehicles frequently end up with low front-end margins. However, when it comes used vehicle buying or trading, there is more opportunity to make a profit. But, due to increased demand for used vehicles, auction prices have risen, as have used vehicle values. Some dealers now have to travel longer distances to stock their inventory. In addition, many can no longer place as much emphasis on used vehicle acquisitions from customer trade-ins.
According to the article, the competition for used vehicles is so fierce that dealers are taking to classified ad platforms such as Craigslist to attract consumers looking to sell their used vehicles. This practice reduces industry competition for inventory and allows the dealer to hold more gross profit after reconditioning and detailing. This benefits customers in the market for a vehicle as they can buy a used car that has already been hit with a large depreciation, making it more affordable. Dealers win as well as these used cars, in general, provide higher front-end profit.
But there is a whole other way this used car sales trend benefits consumers… recalls!
Unlike a new car, it is illegal for a dealership to sell a used car with an open recall. Now, private sellers and dealers must consider whether vehicles plagued with open recalls run the risk of devaluation…Ouch! Because of this, dealers looking to purchase these vehicles have to factor in the costs involved with performing any needed recall repairs prior to sale.
If the used vehicle is of the same brand as the acquiring dealership, the recall can easily be repaired at the dealership with no additional cost, as the manufacturer pays for the labor and parts. It’s a strategy deployed at several dealerships nationwide, but primarily born out of reconditioning efficiencies.
Recalls add another layer complexity for dealerships looking to acquire off-brand vehicles. Profit margins can dramatically fall during the reconditioning process due to delays when repairs must be performed at a neighboring franchise dealership that is authorized to make such repairs.
The search for used car inventory could be right in your back yard in the form of recalls. Recall repairs are not only the right thing to do but may turn out to be a smart tactic for replenishing your used car inventory.
In addition, about 50% of consumers opt for additional repairs to keep their vehicle operating at an acceptable level of performance. The other 50% may be open to an offer to sell their vehicle to you.
Those dealers who successfully acquire inventory through private parties will, more than likely, end up with a profitable sale. And there is the added benefit to society as we end up with vehicles sold by dealers that are safe for the consumer and their fellow drivers.
While a decline is new car sales is certainly not an event worthy of applause, perhaps the silver lining is that the rise in used car sales can assist in the overall recall repair completion rates and increase dealership profits.
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