PHILADELPHIA, PA – DealerMax announced today the downloadable availability of its latest dealership performance directive, Dealership 2020 Guide: Re-engineering Automotive Retail, discussing six essential online sales processes the new online sales retail environment requires.

“The world has changed overnight, and although many dealerships are now closed for onsite sales, many are looking for ways to optimize their remote retail strategies to reach customers online, sell over the phone, and reconfigure their low-tech operations to adapt,” said Jim Maxim, Jr., chief executive officer for the dealership support company.

The DealerMax team of digital retail experts wrote the guide to give dealers an important sense of control and focus as the industry recognizes the urgency to move sales online where consumers increasingly feel more comfortable, safe, and empowered to shop and buy cars. They will prefer dealership’s offering processes that enable them single-source contact, especially in-store, to add layers of safety and comfort.

“In other words, there is a new roadmap to the sale. Meaning, selling cars remotely, and this guide helps dealers to better grasp several of the concrete steps they’re likely to find necessary on their path to successful online, remote car sales,” Maxim said.

To help dealers learn more immediately, DealerMax has developed a series of weekly webinars. Enriched content for each process change module are also being developed.  

Maxim pioneered digital F&I in 2003 as chief executive officer for MaximTrak, which he sold to RouteOne in 2016, so he thoroughly understands the necessity of bringing different sets of customer engagement processes with technology to robust end-to-end online car sales.

“This change can be a hard choice for dealers who, before COVID, were convinced people still wanted to come in, look around, and touch a car, even if they didn’t buy,” Maxim said. 

To best equip dealers to make these process changes, In addition, an immediately available download version, the DealerMax Dealership 2020 Guide: Re-engineering Automotive Retail (click to download) guide discusses:

• How should you retool your people and reconfigure your customer experience?
   
• What are the techniques, technologies, training needed for commerce during a crisis?
   
• What are the critical decisions to make to business processes and sales workflow to transact? 
   
• How will your processes change as you limit your face-to-face time with your customers?
   
• How can you position your dealership to not only survive the moment but to become more influential in a post-pandemic world?

 Click here to download Dealership 2020 Guide: Re-engineering Automotive Retail.

Media Contact:

Steve Forde

215-833-9988

sforde@dealermax.com

PALO ALTO, CA – March 16, 2020 – Rapid Recon, the nation’s most extensive vehicle reconditioning technology company, announced today the temporary suspension of onsite training and the expansion of its online training program. Both decisions help address health concerns for dealership customer personnel and Rapid Recon employees, due to COVID-19 pandemic travel concerns.

To maintain the highest levels of customer performance and support, Rapid Recon expanded its team of process performance management experts by 50%.

“The safety and well-being of our customers’ personnel and of the Rapid Recon team is our top priority, as it has always been,” said Dennis McGinn, Rapid Recon chief executive officer. “We will continue to monitor the circumstances surrounding the coronavirus, and we will be taking necessary precautions to ensure our continued service and support to the automotive industry.”

In addition to the increase in the Rapid Recon online support team, the company also retained the services of several companies specializing in video online training to assist in this expansion.

Over the past 10 years, Rapid Recon has developed a comprehensive online training protocol, which more than 2,000 dealers nationwide and in three countries.

February was a record-breaking sales month for the company, with more than 70 new dealer partners joining Rapid Recon to improve their inventory turn, per-vehicle revenue, and unique sales advantages. At NADA, the company announced two new products, Vendor Advantage and Live Locate, and added six new teammates to meet market demands for its leading vehicle reconditioning software solution.

For more information about Rapid Recon, visit www.rapidrecon.com.

New Integrated Vendor and Sublet Functionality adds Mutually Advantageous Dealer-Vendor Recon Workflow Accountability with new Cost Controls

PALO ALTO, Calif., Feb. 10, 2020 /PRNewswire/ -- Rapid Recon, the creator of time-to-line (T2L) reconditioning solutions for used car departments, will unveil Vendor Advantage at NADA'20 in Las Vegas this month. This new offering gives dealers exceptional oversight of their sublets and vendors to expedite the return of vehicles to reconditioning and for improved cost control.

"For years, we've worked with dealers to integrate their sublet partners and vendors directly into Rapid Recon workflow software. Those who have selectively accommodated their vendors have reaped the benefits to their overall T2L," said Dennis McGinn, Rapid Recon founder and chief executive officer.

With Vendor Advantage, Rapid Recon takes vendor management to the next level, giving fixed and recon operations managers control and simplicity to:

• Add vendor users with restricted access to Rapid Recon on desktop and mobile – Vendors manage, track and report work in progress through completion like the process used by internal reconditioning
• Explicitly assign and notify vendors when work is available, even outside of steps – Eliminate the back-and-forth frustration of missed phone calls and miscommunications
• Receive notifications on pending approvals – Vendors know immediately when repair needs are approved, preventing false starts, delays, and frustration
• Receive updates when work is completed – Enables transfer of vehicles back into the internal recon flow without delays that otherwise erode time to line efficiency
• Request and manage work estimates – Eliminate paperwork, estimate-tracking complications, and expedites vendor payments
• Message directly with vendors in real-time.

Visit Rapid Recon at NADA '20, Booth 2693C, Central Hall. www.rapidrecon.com

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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•  
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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

BOSTON/PHILADELPHIA, September 26, 2019 — In a joint press release, Hunter Malone, owner of DealerMax, announced today the sale of his firm’s assets to Jim Maxim Jr. and Jim Maxim Sr.

Profit By Design, the Maxim family enterprise out of Wayne, PA, purchased the company assets in a cash sale this week and will use the DealerMax brand to market the company’s dealership training and F&I income development programs to an expanded network of dealerships nationally.

The sale comes as dealerships seek to bolster profitability in a response to downward pressure on vehicle margins.  Hunter Malone, President of DealerMax, concurred, “Now is the right time for this.  Profit By Design and the Maxim team have a great formula for increasing dealer margins in Sales and F&I.  The company offers dealerships some of the most respected F&I training programs on the market today, and I am proud that the name will carry on with a family owned business with integrity.”

Jim Maxim Jr. formally ended his dual role as President of MaximTrak and Chief Digital Officer for RouteOne on August 1, 2019, after a 33-month transition period post-sale.  Maxim intends to build upon his family’s 40-years of history in the automotive industry and grow their company platform.

As CEO of the combined entity, now branded DealerMax, Maxim intends to grow the business and employee base in the greater Philadelphia market and looks to expand operations in major metro markets regionally.  The ‘Profit By Design’ name will live on and become the program name for its F&I Income Development offering as the company looks to expand its services into Digital Retail Consulting and Sales and Management Training.

Jim Maxim Jr. expressed that “The opportunity for growth as well as the talent, and expertise of our people at Profit By Design is what drew me back to the family business.  We have employees that have been with us for over 30-years and it is an honor to lead the company into this new era of growth and expansion.” 

Maxim continued, “The re-imagination of the customer experience that is taking place within the automotive industry right now is very exciting.  Dealers need best practices, proven processes and excellent training for employees to help them transition and succeed with today’s consumer.  We intend to expand our offering to help our dealers thrive in the rapidly changing marketplace.

DealerMax has announced multiple openings in partner markets including Pittsburgh, Boston, Rochester/Syracuse, NY/NJ Metro, Connecticut, Washington D.C. and Baltimore.  Interested candidates can apply at www.dealermax.com/careers.

BURLINGAME, CA, September 23, 2019 – Zonic Design, a certified vendor to CDK Global and Reynolds and Reynolds, is urging auto dealers to begin reviewing their vendors’ privacy and data security measures ahead of the January 1 deadline for compliance with California’s Consumer Protection Act (CCPA).

While CCPA is California-specific legislation, its requirements affect dealers and dealer groups having stores in the state, and many vendors serving auto retailers are domiciled there. CCPA’s comprehensiveness is designed to ensure healthy consumer privacy and data security guidelines for dealers and vendors, wherever located.

The timing for this call could not be better. According to a study from PossibleNOW, 56% of U.S. businesses polled are not likely to “be fully prepared” to meet the January 1 CCPA compliance deadline.  This fact should add urgency to dealers’ sense of timing about reviewing their vendors’ compliance practices.

Likely other states will enact consumer privacy and data security legislation, given the lack of national guidelines and standards. Those laws are sure to be as stringent as is CCPA to protect those states’ residents.

Zonic Design is data-driven service marketing company leveraging auto retailers’ existing and conquest consumer to increase customer retention, revenues and ROI. When a major dealer group reviewed the vendor’s data security during vetting, group security personnel were taken aback at how much more comprehensive Zonic’s security measures were than their own.

“Dealer groups may have up to 20 different vendors tapping into their dealer management or other internal systems which store personal consumer data, so they will want to be certain, and confident those vendors’ data practices are current and stringent,” said Brian Ramphal, Chief Executive Officer, for Zonic Design.

Foremost, he said, dealers must insist their vendors be DMS certified. Other qualifying questions they should ask vendors, though, sometimes go unasked, including:

• Where do vendors store client data once extracted from you, and how is that data protected?
• What cyber liability limits do your vendors carry?
• What processes do vendors use to ensure accurate a safe data transformation and management

To help dealers vet their vendors – and as a guideline for vendors - Zonic has prepared a brief PDF download, Data Compliance Questionnaire, at https://zonicdesign.com/#home-form-section.

Last month the CCPA was amended by the California Senate, with two exemptions relevant to automotive vendors. These exemptions are:

• Loyalty programs, for which “certain prohibitions in the CCPA would not apply
• Warranties and recalls, exempting information retained or stores for purposes of warranty or recall-related vehicle repair.

The International Risk Management Institute notes that the CCPA allows any consumer to demand to see all the information a company has saved on them. This invitation extends to third parties with which this data is shared.  CCPA now requires that companies must have visible website footers offering consumers the option to opt-out of data sharing.

For more information or to download the Data Compliance Questionnaire, visit zonicdesign.com.

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First-of-Its-Kind Reference Guide and User’s Manual from AutoAp Addresses ‘Cancerous Grave Risk’ Overwhelming Auto Industry

BEAVERTON, OR, September 10, 2019 – AutoAp, the foremost vehicle safety-recall, monitoring, intelligence and reporting company, announced today availability of Safety Recalls: Think You’re Covered? – Mitigate Your Liability and Increase Profitability, a most-timely and indispensable reference guide and user’s manual for auto dealers.

“Recalls have become a cancer in the auto industry, presenting a grave risk to consumers and all players in the supply chain, with auto dealers on the front line,” writes David S. Nathanson, managing partner for motormindz, the automotive think tank, in the Foreword to Safety Recalls.

Safety Recalls codifies in one convenient and highly readable guide the problems and challenges of the safety recall ecosystem. For franchised auto dealers, 14.8% of inventory have open-safety recalls, even after checking current recall listing systems, including those provided by OEMs, NHTSA and vehicle history reports.

“Our goal is to make plain to dealers the truth of the liability and loss to profit risk recalls present and remind them not to assume their safety recall identification process is protecting them,” said Mark Paul, AutoAp Founder and CEO, and author of Safety Recalls: Think You’re Covered.

For a copy of Safety Recall: Think You’re Covered, the seminal book bringing sanity to recall madness, visit www.reduceliability.com

“Most dealers, when asked about their recall management practices, tell us, ‘We’re covered.’ We know from our industry analysis this is not reality –hope is not a strategy for dealing with such a dangerous risk,” Paul said.

“When we first process VINs through AutoAp’s Safety Recall Dynamic Recall Management service, the reality is dealers have inventory with open safety recalls that their current recall-identification processes did not catch,” Paul said.  “Safety Recall details why this is so – and why this ‘cancerous’ risk continues to exist.”

AutoAp has collected open rate data since 2015 to quantify how extensive this risk is. After “professionalizing” safety recall management – implementing the necessary processes, developing a policy for handling recalls, and having built safety into their culture -- the results, show an 83% reduction in open rates for best-practice dealers.

For a copy of Safety Recall: Think You’re Covered, the seminal book bringing sanity to recall madness, visit www.reduceliability.com.

About AutoAp

AutoAp, Inc. is the auto industry’s number one provider of the most accurate, timely, and comprehensive safety recall-management, reporting, alerting and business intelligence services. AutoAp is available in direct and integrated solutions to help dealers, rental companies and fleet managers reduce liability and increase profitability. AutoAp safety-recall identification technology helps dealers increase customer safety and generate additional parts and labor revenue. www.autoap.com.

Media Contact

Mark Paul, AutoAp, Inc.

503-951-6150

press@autoap.com

Getting used cars ready for resale is so time delicate that even a few hours’ delay tarnishes their value. 

Luxury vehicle dealers in possession of data confirming this reality say they’re working hard to get luxury model trade-ins into mechanical inspection and cosmetic detailing faster, so they are sale-ready as quickly as possible.

Their reasons for getting cars through reconditioning in less time means business, they say:

• Lowers recon-related costs

• Gets cars ready for resale so prime margin potential is retained
• Increases inventory turn to improve used car efficiency

Driving this enhanced used car efficiency and profitability for any dealership is a commitment to applying to the business the most significant commitments determining used car profitability, speed to sale, which proper recon time to line or T2L launches.

“Used vehicle sales are about velocity – sourcing the inventory and getting those vehicles ready for resale as quickly and efficiently as possible,” said Justin Hoisington, pre-owned operations director for Hennessy Jaguar-Land Rover of Duluth, Georgia.

“We’re constantly trying to figure out how to increase our efficiency, and it’s imperative we get used vehicles ready to sell because we don’t have them ready to sell it does no one any good,” said Geoff Meeker, general manager for Mercedes-Benz of Buckhead of Atlanta, Georgia.

Speed to sale

“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 is speed matters – it matters more than ever, and speed to sale enhances the profit potential dealers expect from 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 routinely a once-a-week event, and consists primarily of going back to the same sources Monday or Tuesday and acquiring the same vehicles. 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.”

As speed of sale has its roots in expedient recon, T2L, itself a time-based motivator, is a process discipline that structures, organizes and encourages the multiple steps and people necessary to transform trade-ins, private-party purchases and auction vehicles into eye-appealing, like-new, ready-for-retail vehicles for merchandising online and on the lot.   By implementing T2L technology disciplines as part of used car practice, dealers reduce recon turnaround time from days to hours; a 72-hour turnaround is the ideal.

Time is No Luxury

Dealerships using manual recon management assists such as Google Docs or spreadsheets find those tools too static to help with managing a multi-step, multi-process function such as vehicle reconditioning. Dealers using T2L recon automation typically reduce 10-to-21-day recon cycles.

“The ideal and achievable recon cycle under T2L speed-to-sale practices managed by recon workflow software is 3 to 5 days. T2L may be longer for luxury vehicles, given the often receive the highest level of recon to meet the higher standards the buyers of those brands and from luxury dealerships that sell them,” McGinn said.

In reconditioning, time not only influences recon cycle speed but also how a depreciation value known as holding cost erodes sale margin. Holding cost is defined by dealership benchmarking firm NCM Associates has a $40 per day per car holding cost. Luxury vehicle reconditioning hold costs can be more, by as much as two times the depreciate assigned to non-luxury models.

At a $40 holding cost, a 10-day recon cycle equals a $400 charge against sale gross on every used car the dealer retails. By using reconditioning efficiency tools such as T2L, that 10-day cycle can be reduced to 5 days, reducing holding cost erosion against sale gross by half.

Where faster T2L is at work in recon, the reduction in holding cost erosion to sale gross is evident.

“Our time to line before Rapid Recon was 8 to 18 days; dealers who think their time to line is faster than that kid themselves. I’ve worked for some whose detailing took 8 days alone!” Hoisington said.

Time is Money

Many managers miss the importance of why faster recon matters because they don’t understand cash flow or its significance to dealership vitality, said Joe Lescota of Joe Lescota Management Education & Training Co.

“Faster turn is paramount for luxury car dealers, especially, given their higher cost of inventory, which means higher floor pan and thus higher inventory holding costs, which is why faster recon is so important – it’s about cash flow,” Lescota said.

His team specializes in providing financial statement analysis, variable operations consulting and training to dealers, concentrating in used vehicle operations.

“Import dealers spend more for reconditioning because their market and their customer demands more, but they often allow more dollars for recon than many of these cars will require,” Lescota said. When that number appears in appraisals, it can mean undervalued trades that cost the dealership business. “This happens because managers don’t look at recon as a return on investment but rather an expense.”

 He pointed out that 58 to 64% of the recon expense the service department will charge the used car department is profit to the dealership, as actual recon hard costs are solely parts and labor. “This is why recon must be kept in-house,” Lescota said.

Other cash flow benefits that recon tools provide dealers include vehicle locators, so vehicles get into recon fast and they give managers near real-time costs related to each car. When the sales department has to wait for R.O. and other recon expenses to be collected to complete a customer transaction, recon expenses can be missed. This can require a wash down charged off as Policy Work on the financial statement. When done, this loss affects the dealership’s profitability but not the manager’s who should have caught those expenses before finalizing the vehicle transaction.

“That recon tool is essential as it allows maximum dollars to be earned for your cars,” Lescota said.

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.

An auto dealership’s reconditioning function helps or hurts the used car department.

Recon is not just a process through which trade-ins and auction vehicles get new brakes and tires and dings repaired. Recon, at its best, is a cross-store profitability tool for auto dealer groups.

This cross-store tool gives corporate-level store managers in one report the level of reconditioning efficiency, time-to-line (T2L) speed, and other vital metrics for managing the individual store and group-wide recon profitability.

As the industry continues to consolidate and produce new competition like Carvana and Shift, it has become critically important from a used-car profitability perspective that groups manage individual store recon process performance, store-to-store, and at the group level.

The goal is to use this insight to mitigate risk and transform the profitably of all group used car departments’ profitability.

From helicopter to sidewalk level, group reporting provides oversight of such Key Performance Indicators as:

Location of every car in the group’s possession

Place and position of those cars within the recon process on their way to sale-ready status

Number of vehicles having safety recalls and whether in recon or already on the lot

Per vehicle parts and labor costs – and whether applied as internal or retail costs

• T2L run rate, from acquisition to sale-ready status
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Average recon cost per vehicle, by store and group

Sublet status – vehicles released to sublets, status, due date

Progress to T2L goal, with two to three days the target; Non-automated recon cycle rates quickly balloon to 10 to 21 days.

• Holding costs, in near-real time

​​​​​​​Total recon cost at current T2L and cost savings as T2L is improved

Attempts at tracking recon workflow and some of the above metrics using whiteboards, Google Docs or Sticky Notes has proven wasteful, positively not helpful for transforming recon into a profit center of the dealership and its group.

Many dealers instead have embrace reconditioning automation and its accurate and real-time recon management and accountability.

The point is money

David Simches is group used car director for Crown Automotive Group. He oversees Florida operations. He reported that by using recon automation and its group reporting tools, his stores’ T2L dropped from an average 12 days to a 4.6-day group average. Among other gains for the business, reducing T2L by nearly 7.5 days means his stores added at least one additional inventory turn a year.

He said the reports help him inform his GMs and corporate executives precisely how well their recon operations – and as a result, their used car departments – are performing.

“I try to make these group and store reports effective tools for change because GMs are good at making the numbers look good to corporate, but the group-level report tells them what’s happening and how fast stores within the group are moving inventory from acquisition to sale-ready. With that, our sales are up, our aging is down, and our wholesale ratios are in check – this is all good stuff that is supposed to happen when cars get sale-ready faster,” Simches said.

General managers, fixed ops directors, and used car managers tell me that lacking automation to account for recon-related events most T2L estimates are guesswork. They were speechless; they said when they realized that accurate T2L measurement showed their shops’ were taking from 10 to 21 days to get cars to the sales lot.

Dealers cannot operate a profitable used car department when inventory is already aging out before it hits the sales lot (or even online). When inefficient recon consumes 10 days of a premium 21-day margin window to get cars ready to sell, holding cost and market depreciation has burned up any potential profit left in those cars.

On the other hand, highly efficient recon operations will complete all recon steps within three to five days of their acquisition from trade or auction. A three-to-five-day T2L keeps cars’ premium retail window open longer. The margin on fresh cars is always stronger than on those for which repricing is needed every few days to get them sold.

In other words, how does a group, whether it comprises three stores or 300, manage its many recon operations so T2L is low in every store and thus inventory hits sale-ready status having cars still so fresh the sales team circles like sharks.

Science applied

Years ago, Dennis McGinn was an entrepreneurial-minded and earnest young fellow working for Hewlett-Packard, part of a team learning and using quality disciplines known as Six Sigma and Continuous Process Improvement to build efficiency and accountability into enterprise resource systems for major automotive OEMs.

In 2010, he founded the reconditioning workflow software company Rapid Recon, for which he is chief executive officer. This software brings continuous process improvement disciplines to one of the most neglected and undervalued activities of the modern auto dealership.

“We know from our work with hundreds of dealer groups - from small group operators to the major public groups – who, having adopted group-level recon practices, report more profitable used-car departments,” McGinn said.

One example is Larry H. Miller Automotive. Rod Rowley is senior vice president responsible for nine franchise and five used car operations in Utah, plus group-wide used car operations. “Group reporting enables me to look at all my stores in one view, which makes it clear to us clear who needs help in their recon processes,” Rowley said.

These group-level metrics extracted recently from three dealer groups’ group-level reports (none from dealers interviewed for this article) show how a focus on cross-store recon can drive better results.

The annual savings for each group shown in this table originate from multiple gains:

• * Overall savings in time, labor and materials accumulating from improved recon efficiencies the elimination of such T2L killers as lost, misplaced or neglected on dealership lots or at sublets.

• * Faster T2L translating into reduced holding costs; NCM Associates calculates the average daily per vehicle holding cost at $40, which accrues from vehicle acquisition to its sale. For clarification, a 10-day recon cycle depreciates a car $400.

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• The actual sale margin erodes by that much. 
• Application of T2L automation, reducing the recon cycle; two additional turns on 100 cars at $1,500 gross equals $300,000 a year or $25,000 a month — a remarkable ROI for a monthly T2L workflow software cost of around $500 per store.

Anthony Martinez, Group Performance Manager for Rapid Recon, explained other considerations that more structured and monitored reconditioning resolves for groups.

“A few examples may include capacity issues in the recon center, inefficiencies dispatching cars to the right tech, delays working with outside vendors, difficulty in getting approvals or a slow down in getting cars into recon caused by delays in title or transportation, to name a few,” Martinez said.

Elaborating on the table data, Martinez said, “When this information is presented in a group report, managers easily spot trends. Cross-store reporting details help build peer recon center competitiveness. Discussions that evolve from the reported data often evolve into a rich conversation across the stores about best practices, lessons, and problem-solving.”

This friendly rivalry at Morrie’s Automotive Group has helped Jerry Heinecke, General Manager and former director, Used Car Operations, manage a more profitable three days’ average days in recon for the Group’s seven dealerships around metro Minneapolis, and in Chippewa Valley, Wisconsin.

“This group-level snapshot gives me the metrics to track, monitor, and manage essential benchmarks. Comparing one store’s performance to another is an excellent way to create a competitive environment,” Heinecke shared.

Jim Leman has been writing about automotive retail operations since 1992. Contact him at Jimleman@gmail.com