Dealers lose money on trades that look clean but hide major issues. Losses will mount as the shrinking pool of used cars contributes to uninformed acquisition decisions.
The car business tends to stick to routine, well-honed (and beloved?) practices. The tried-and-true meet-and-greet still builds rapport with prospects and helps salespeople guide the sales process. Keep that practice and hone it often.
But buying trades, auction vehicles, and private party opportunities without first knowing the extensive details of these vehicles’ electro-mechanical systems is counterproductive to profitability.
Appraisers relying on visual checks, quick “diagnostic” drives or gut feel will typically miss the average $700 in reconditioning costs inherent in every presenting vehicle. These common “inspection” methods are too risky and costly.
But you say you’re using a scan code VIN tool to narrow that risk. That is smart, but trials by at least one major VIN technology provider notes commonly used VIN tools miss any presenting and reset codes.
The best of these will diagnose at least 11,000 codes – and indicate code errors a previous owner might have cancelled before offering the vehicle up for trade or sale. Miss these codes or rests and an acquisition offer can quickly become a rock that sinks your margin potential.
As important as using a VIN scan tool offering this depth of diagnostic detail is, using it consistently on every vehicle at every acquisition opportunity makes your appraisal team more profitable for the dealership. By this, I mean setting standards for appraisers that require every vehicle acquired gets the benefit of this depth of electro-mechanical diagnostic. Where not done, margin projections quickly erode or even tank once reconditioning visually inspects and diagnoses these vehicles
The older and higher mileage acquisitions you make through the summer will often be vehicles that lack service records. You want an acquisition system that catches both resets and hidden diagnostic codes – before you purchase them.
It’s not true that conducting a VIN scan at trade delays decisioning that frustrates sellers and appraisers who want to a quick answer. The best of these tools provide detailed digital and printed diagnostic information in as little as 30 seconds. The device is plugged into the under-dash OBD-II reader to:
The best of these tools also provide a detailed overview of reconditioning and labor costs for that make and model. Now, appraisers and your used car teams can be more competitive.
Dealer experience using such VIN technology at appraisal make faster, more informed decisions. Technicians and service staff get ahead of repairs as parts are notified. Parts get readied for technicians to speed service to speed up recon time to line and service time to delivery.
Here’s the formula: Fewer surprises post-acquisition = faster time-to-line, better ROI.