PALO ALTO, CA, July 24, 2019 — J.D. Power Valuation Services recently reported continued strong used car sales through the first half of 2019. Though the market cooled somewhat in June, the month’s performance was still better than historic June figures.
While this data is good news for franchise and independent used car dealers, the profit potential these sales numbers infer could be better, said a leading proponent of dealership speed-to-sale strategies.
“We see now where used car department profitably improves significantly over status quo where speed-to-sale strategies are applied to reconditioning time-to-line automation,” said Dennis McGinn, founder and CEO of Rapid Recon.
The reality of today’s used car business isn’t just that speed matters — it matters more than ever. Speed to sale enhances the profit potential that dealers expect when using an automated inventory management tool, McGinn said.
“In the car business,” McGinn added, “life begins at a sale. The industry has focused too much on vehicle provisioning, which while important, is a once-a-week event. Selling goes on all day, every day — and to sell more cars faster at higher gross, it is speed to sale, not provisioning that determines success for a used car department.”
Visually, this model looks like this: SELL > adjust > ACQUIRE > adjust > SELL
McGinn said speed to sale either advances or delays how quickly the used car manager approves mechanical and cosmetic services to inventory in the pipeline. “It is this speed of approval that is central to used car departments getting cars from acquisition to sale-ready in three to five days,” McGinn said.
Speed of approval not only promotes inventory turns but influences inventory aging, floorplan expense and wholesale losses. It also makes provisioning tools more effective.
With speed-of-approval and speed-to-sale triggers on mobile devices, used car managers can approve repairs from anywhere, and the sales staff has real-time access to cars in inventory, along with their recon status and costs. Some dealers practicing these strategies retail 40% of incoming inventory off the transport or while the vehicle is in recon.
“These speed tools mean cars are sale-ready having most of their prime 21-day retail window ahead of them,” McGinn said.
Rapid Recon benchmarks and best practices have helped thousands of GMs, used car managers and service managers fine-tune their reconditioning methods. As a result, they achieve faster time-to-market and speed-to-sale rates, allowing them to move more vehicles while retaining gross.