Used Car Recon

Brandon Moore
I'm currently in the process of starting a pre-owned dealership. I'm torn on how to handle the reconditioning process. I don't have a ton of capital and from both a profit and cost standpoint is it better to: A: Do all my reconditioning in house (i.e. buy equipment and hire techs) B: Let the auctions handle it. C: Sublet to local shops I'm trying to keep overhead as low as possible, and by reconditioning I mean tune ups, brake jobs, body work etc. What would be the best course of action for a new dealer?
Phillip Mova
Hi Brandon, I can relate as I've just launched one myself. Limited capital was an issue for me as well so in-house reconditioning just wasn't possible. Luckily, I built relationships with several local shops in close proximity to one another and I always pin them against each to get the best quote possible.. Obviously not practical for bigger dealerships but it works for me as we only have nine units available at the moment. The biggest challenge I've faced is choosing the most efficient and cost effective DMS.. with SEO, Website, and PPC campaigns overhead takes a nasty hit...
Mark Miller
2 years ago I was hired by a used car dealer to build a service department as they wanted to bring recon in house. The first 18 months they sublet all of it which allowed them to keep start up costs down while building the business. What they learned as, even at the best deal, they were spending more to recon the cars. They leased a large building so space was never the issue, but as they learned, equipping a shop is expensive. Doing it all in house does allow for control and you can feel confident standing behind the work. Subletting it does allow for a higher volume, but also a higher cost and you are now putting your name behind someone else work. I have no experience with allowing the auction to do it, but I'm not sure how that's different from subletting it. You are faced with a lot of start-up costs, so subletting it for the immediate future may be easiest. I would advise you to research shops very well, hopefully you know some of the owners already. Make sure their parts and labor warranties will apply to the future owner of the car once sold. One key is to use a tracking system, sublet cars can get lost in the mix easily and cost you more money. Even though we did recon in house, we sublet cars for warranty work and more than once they got forgotten about. We offer just a tool for that, we can customize it to track a car from the moment you buy it at auction through the entire recon process (not just service, detail and pictures too). We can even set it up to allow your sublet shops to have access to their portion to easy communication. If your interested let me know.
Megan Barto
Find high school kids who detail cars. I'm not kidding - at least in my area, there's a ton of high school kids/early 20 somethings who are trying to set up their own detail shops. They'll be cheap & will do a good job because they want to prove themselves and make a name for themselves.

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