By Dennis McGinn, Founder, CEO Rapid Recon

In 2019, at least two new companies have stepped into the vehicle reconditioning arena to transition dealers out of their old manual and costly ways of processing used cars.

The objective behind automated recon workflow software is to improve time to line (T2L) and thus drive turn performance, cost savings and better sale margins.

New market entrants endorse the value T2L software brings to the used car department. Dealers, fleets, rental companies and remarketers all benefit by jumping on the T2L bandwagon.

What’s to Lose?

Nothing is lost by improving how fast cars get reconditioned --- ability to process cars more quickly from acquisition to the front line is vital to any dealer selling used cars! Recon driven by T2L continuous process improvement is critical if you want to “amp up” speed to sale.

This core idea is that by removing waste, costs and delay from reconditioning — primarily in the recon-repair approval process — dealers will get cars ready for sale in three to five days, far surpassing the average dealership’s T2L of 10 to 21 days!

From the financial side, T2L and speed to sale are the GM’s most productive profit-making tools.  GMs who are focused on these making these metrics happen in their store get cars get from acquisition to the sale line in hours, not days so that they can be sold, and that revenue used to pay overhead and commissions and buy more cars.

When cars languish on their way to sale-ready, nothing good happens.

Unsold cars mean floorplan interest continues to accumulate. Holding cost depreciation — each car’s share of general overhead — continues to pile up at the rate of $35 to $85 per day, depending on the brand, and as they age, their value approaches zero.

Much to Gain

The automation and art of rapid reconditioning has come a long way since the first T2L recon workflow software hit the market in 2010. A few dealers gave the software a try, chatted it up at 20 Groups, and the demand took off.

Yet there is more to creating and managing a faster recon shop than getting cars through those processes faster. Dealers tell us their T2L, driven by a unified speed to sale culture among fixed ops, recon and the used car department, motivates efficiency up and down the line, because steps, processes and people are driven by accountability to meet specific time-centric performance goals.  

With the right recon automation in place, a manager building high-performance teams is better equipped to bring everyone involved in recon into tighter agreement of what needs to be done, by whom, and when. The right events, the right vehicles, the right next steps are communicated clearly –and annotated so incidents of “I forgot,” or “It’s not my responsibility,” and “I thought I’d done that” no longer drive others crazy or cause undue speed delays or drive up holding costs during the actual reconditioning steps.

The use of the right recon software starts recon performance improvement - and gives teams the tools to nurture a culture of improved communications, cooperation and multi-department focus.

Dealers, pay attention to the new entrants into the recon automation marketplace – their presence is a sure sign they smell opportunity and so they should; too many of you continue to plug away at your used car department without recognizing the need for speed to sale to increase turn and sales margin.

The entire industry is better off when unnecessary costs and delays are removed from recon time to line.

If you doubt, we’d be happy to put into your hands the T2L bible, Recon T2L, the Starting Line for Reversing Margin Compression, which discusses precise guideline for how to drive more revenue from your used car operation.

Just recently, a Honda dealership principal called Keith Brice, our Virginia-based performance manager, to inform him he’d read the book and was requesting six more copies for his management team. For more substantial groups, we’ve shipped boxes of the book to their managers at the request of their senior-level executives because they understand the implications of running an efficient recon department(s) that gets cars sale-ready in three to five days to:

Increase inventory turn – one turn for every 2.5 days faster recon

• Get cars sale-ready having nearly 86% of their prime retail days remaining, not 52% when routine recon typically consumes 10 days of a car’s primary retail window.

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• Deliver a ROI – a payback – of $50 for every $1 spent for the recon automation

It’s tempting to assign competition to the category of flattery. Perhaps…but instead, let’s use a more accurate description of other companies’ rush to imitate success, provided by Gospel musician Cheryl James. She once said, “The best form of flattery is to be admired, respected and imitated.”

We’re all three now.

Dennis McGinn is founder and chief executive officers for Rapid Recon, the standard in automated recon workflow software. www.rapidrecon.com