used car recon

[dew23456]

I have a sales manager that feels like his used car operation would profit from having hourly paid tech's to do all of their work.
He feels that we are charging to much to recon the vehicles.

We are Cadillac-GMC dealer. Used cars run in cycles, we may get 8-10 auction cars at a time. Most of those need repairs. I feel we are very light in recon expense from what I have seen in past dealers, most under $500.00, some near $1K, but a lot below $300.00.

Who is using used car teams/technicians? Does it work for you? What kind of used car volume do you have?

[btk]

Sales will certainly benefit from using hourly rate technicians but that only helps the sales manager and salespeople. You still have a fixed cost that the rack needs to generate a certain gross profit to pay for itself and then some. Sales sells from cost anyway so to save them 300.00 on reconditioning really doesnt make sense. They wont sell anymore cars because of the lower reconditioning costs, they will just make more gross which will be paid out to management and salespeople anyway. When in theory, the service department will retain 75 % gross profit on those repairs.Your G.M. should realize what he will lose if he allows hourly used car technicians to perform work. My sales manager has been trying to get the same thing at our dealership for years but the owner will never have it. It doesnt pencil!!We sell about 100 used cars a month.

[Old Irish]

BTK is 100% correct.

Besides, how they techs are *paid* doesn't really enter into the situation, does it? You are buying labor, be it flat rate or clock-hourly, and reselling it for whatever you see fit.

We treat u/c dept like a walk-in customer. Same pricing--including specials. In other words, if we are running a special on, let's say, brake jobs, then u/c dept gets the "special price" just as a walk-in would. OTOH, if a walk-in customer would pay full pop for "xyz" job, so does u/c dept.

If they are jammed up on a car we'll work with them on pricing so everyone walks away happy.

Your sales managers are not up-to-speed on present day conventions or philosophies on the subject.

Cheers
DD

[GMFXDOPSMGR]

I'll go with btk & Old Irish. We do things for UCD the same way. No UC leaves the lot for repairs...short of body.. and we will help if needed occasionally.



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Tom Edwards