One challenge many dealerships face is lowering costs to save money in the long run, but many may be leaving a lot of money on the table by overlooking reconditioning estimates during the appraisal process. Today, we’re discussing steps dealerships can take to increase appraisal accuracy and shave days off the reconditioning process with the Founder of iRecon and Senior Director of Business Enablement, Mike Boyd.
Recent Cox Automotive data suggests used-vehicle prices and supply levels are beginning to normalize for both retail and wholesale. Inventory levels have returned to 2019 levels before the coronavirus pandemic hit the U.S. It currently stands around a 45-day supply, so now dealers are focused on controlling inventory, understanding their true costs, and maintaining profitability. So the question becomes – how can dealers do this?
Recon starts at the appraisal according to Boyd. This is where dealers can develop a great understanding of what it takes to get a vehicle front-line ready in terms of time and cost. In order to sell cars profitably, dealers need to understand what it costs them to get a car through the process. Overlooking reconditioning estimates during the appraisal process means that dealers will miss opportunities at auction.
Many dealers are leaving money on the table. Boyd says dealers should be on the lookout for the following signs in order to make the best deals:
- Look to book: compare how many times there are opportunities for a good deal vs how many times you actually acquire the vehicle
- Monitor the performance of the individual appraiser – are they missing anything?
- Evaluate the appraisal as a team
Did you enjoy this interview with iRecon founder Mike Boyd? Please share your thoughts, comments, or questions regarding this topic with host Jim Fitzpatrick at email@example.com.