Used Car Process for Auto Group Advice Needed

[Marc McGurren]

Afternoon DR! Hope the month is finishing strong. I am need of some help and advice. We are in the process of taking our used car photography “in house.†With that said I have some not so normal obstacles to overcome.

Here’s the Cliff’s notes version of how we are set up:
- We have 8 buildings and 5 brands setup within a mile of each other
- All used cars reconditioning gets done at our Hyundai dealership (monster service building)
- Used Car Detail is done at our Toyota Dealership and our GM Used Car Buildings
- 3 Separate Used Car Lots
- We don’t have a central location to take pics
- Once cars are traded in they are taken to Hyundai and our Pre-Owned Director decides which cars go to which lot
- Approximately 300-350 total used cars in stock

One thing we are about to start implementing on the advice of Len Critcher from eCarlist is to detail up our cars first, then send through service. This way we are getting our cars marketed anywhere from 2-5 days faster rather having them get stuck in service…then wait on my lot service to take pics.

So…here’s where I need advice. I am spread out and need to be as efficient as possible. We will be staging our cars at each dealerships building to take the pics so here is the current workflow I am thinking.

Car traded → delivered to Hyundai → Pre-owned Director decides which dealership they go to → Car Taken to appropriate detail → Car then put in “holding tank†for photographer to come by and take pics each day → Photographer takes pics and adds window stickers → Car priced & marketed online → Car delivered immediately to service after pics taken → Car goes through service → Back to appropriate dealership lot for sale

If I were in one location this would be 10x easier. If I had one place to take pics (ie. centralized photo-booth) – this would be 8x easier. I am working with what I have and trying to minimize confusion and headaches.

So does anyone see any pitfalls in my workflow? Any suggestions you guys and gals have for me that you would help me overcome making this transition? Any better ideas? Am I an idiot for trying to do this over 40 acres of dealerships?

Any and all help, advice, critiques, or ANY words of wisdom - please don't hesitate to help a DR brutha out!

 

[JeremySmith]

Are you only stocking trade-ins? What is the process for purchased units? What tools are you using for inventory management? I'm assuming you take the photos yourself? or do you have a third party? I have some ideas that may be useful but I am curious to know your response to these questions.

 

[Marc McGurren]

Are you only stocking trade-ins? What is the process for purchased units? What tools are you using for inventory management? I'm assuming you take the photos yourself? or do you have a third party? I have some ideas that may be useful but I am curious to know your response to these questions.

Jeremy - thanks for any and all feedback you can provide me with.

Inventory management is eCarlist. We are currently using Dealer Specialties to do our used car pics - but will be taking them in house here in about 1-2 weeks.

My DMS will feed all of my used car inventory (both wholesale and retail b/c I don't have the ability to do that in my DMS) to an "in process bucket" inside of eCarlist. My photographer will then take the pics of the cars that are in process or are in the "holding tank" at each detail shop.

Purchased units all go to Hyundai service as well. Our used car director then chooses which of the 3 dealerships those units go to.

Hope that helps clarify a bit....

 

[JeremySmith]

It does, thank you. While my operation is not nearly as complex as yours seems to be I think that some of our best practices may be able to help you in one way or another.

We decided that the best way to address the ever ticking clock problem with our merchandising process was to do a quick wash and vacuum on every trade in and have the respective dealership assign someone to shoot 7 to 10 quick photos the instant we took the car into inventory.

We then manually entered the vehicle into our inventory management tool as a retail unit and uploaded the quick photos at that time. This meant that our trade-ins were visible almost immediately or, worst case scenario, within 24 hours with a price, desscription, and a few photos.

What we found was that sometimes our idea of what was retail and what was wholesale differed from what our customers thought, based on the volume of inquiries on any particular vehicle.

With Auction vehicles it was even easier. 90% of the cars that we purchase come with condition reports and at least 7 photos. We began creating folders with the photos saved to them from the pics provided within the CR's, and entering the vehicles manually in the same manner as the trade-ins. In several cases we have sold the vehicles before they even arrived at the dealership from auction.

Of course the vehicle is reshot, as soon as is possible, by our photographer since the photos aren't great. But it's better than stock photos and certainly better than nothing at all.

All of the work can be delegated to yout most able, lowest paid personnel. That should make your Used Car Director and Managers happy and help with buy-in.

I hope this helps.

 

[Christopher Hawley]

Not sure I completely understand the situation, which obviously affects your proposed solution, so please take this with a grain of salt as I am just trying to help.

With respect to Len, I disagree with the decision to detail first and then photograph the vehicle before going through service. My reason being that properly detailing a vehicle and then having it sit for service, then have a tech crawl all through it, will result in a lot of re-details. Secondly, until service has at least safety checked the vehicle, it shouldn't be technically for sale.

More importantly; to retail detail a vehicle, photograph it and put it online with comments and whatnot before know what, if anything, is wrong with the vehicle is a recipe for disaster in my opinion. In my experience, I never cease to be amazed at what service finds that the appraisal process doesn't. New tires needed, super galactic back order parts or something more major could result in wholesaling the vehicle or at the very least increasing the price, sometimes dramatically.

Plus, if you succeed and the customer does contact you, we all know the first questions are (even if disclosed):

1. Is the car still available? Technically it isn't available yet.
2. Whats the price? You have no idea, because service and parts aren't done with it.

Bottom line; I think you are going to make more work for yourself and your team and not get enough results to offset the difference.

What I would do:

1. Vehicle needs to go into service asap. This "should" take no more than 3 business days. If it does, then that is another issue independent of your process.
2. Immediately upon service being finished, have detail do their thing, including stickers and all that. Once finished, it is my opinion (which it looks like you are making a GREAT move in moving photos in house) to have them photograph the vehicle at that time.
3. Once detail is done, they give you or the manager the keys to be put on the lot. Hopefully at this point the R.O.s are closed and you and/or the manager can put a "real" price online.

Note: If the DMS controls the inventory and pricing export directly or through your CRM/ILM, then it should be online already without a photo or price if it is in the Retail bucket or designation. So technically, the inventory is still getting online quickly, albeit incomplete. With your proposal, it gets on in the same time, but without a price is still incomplete.

Hope this helps! Again, my opinion without knowing all the variables and X factors, so please take and apply (or not) what you will.

 

[JeremySmith]

"In my experience, I never cease to be amazed at what service finds that the appraisal process doesn't. New tires needed, super galactic back order parts or something more major could result in wholesaling the vehicle or at the very least increasing the price, sometimes dramatically."

"2. Whats the price? You have no idea, because service and parts aren't done with it."

"3. Once detail is done, they give you or the manager the keys to be put on the lot. Hopefully at this point the R.O.s are closed and you and/or the manager can put a "real" price online."

These statements imply that what you have invested in the vehicle determines what you sell it for. This philosophy has some major flaws.

1. How much you own a car for has ZERO to do with it's Market Value. (Think about a customer with an astronomical payoff. Does that affect what you put in the vehicle in any way?)

2. Your inventory tool had better have realtime market data in its pricing portal, otherwise you may need a new tool.

3. Cars should be priced to market, otherwise you are leaving its sale up to chance.

If, after a vehicle's reconditioning process, the price you have listed is less than what you own it for, you should learn whatever lessons there are to be learned from the acquisition and disposition decisions that were made and price it to move.

Chances are, by the time you sell it, add back your pack, add in the Doc fee, hold back on a trade, finance it, and sell products for it, that the deal makes money. The alternative is that you price it too high, it gets old, your take it to auction and lose everything you spent on it anyways.


My two cents

 

[Christopher Hawley]

Jeremy,

I agree 100% with what you said. In a "ideal" situation, this should be, or something similar to it; their pricing philosophy.

But, I took the original poster's question and request for feedback based on creating a used car process to get vehicles online in a more efficient way. And, being that it "seems" like he is not the ultimate decision maker as to whether or not to keep a vehicle or wholesale it; it seems like making this "assumption" a part of his process is wise.

Quote:

"One thing we are about to start implementing on the advice of Len Critcher from eCarlist is to detail up our cars first, then send through service. This way we are getting our cars marketed anywhere from 2-5 days faster rather having them get stuck in service…then wait on my lot service to take pics.

So…here’s where I need advice. I am spread out and need to be as efficient as possible. We will be staging our cars at each dealerships building to take the pics so here is the current workflow I am thinking.

Car traded → delivered to Hyundai → Pre-owned Director decides which dealership they go to → Car Taken to appropriate detail → Car then put in “holding tank” for photographer to come by and take pics each day → Photographer takes pics and adds window stickers → Car priced & marketed online → Car delivered immediately to service after pics taken → Car goes through service → Back to appropriate dealership lot for sale"

The bolded part is what I was trying to address, maybe somewhat lazily. Having six steps prior to servicing a vehicle, give you the advantage of having that vehicle online with photos and looking good MAYBE 3 days quicker than doing it as I suggested (albeit poorly).

The pitfalls of doing it this way are (again, in my opinion and experience):

1. You could potentially be marketing a vehicle that after inspection someone else decides to wholesale.
2. You could get a price that after inspection the inventory manager decides to "bump" because of excessive repairs. In an "ideal" situation this shouldn't happen, but the Internet Manager and Inventory manager are not one in the same, which typically leads to disconnects.
3. Service will make the vehicle dirty if they do more than change the oil (and sometimes even then). Granted, you can spruce it up after assuming someone found it before it went on the lot.
4. Customer wants to test drive it, wants best price, wants to know service work done, which is a good problem to have, but gives a lot of openings to sting you.

If you followed your pricing philosophy, but made sure the vehicle is a retail-able unit FIRST and then followed the exact same steps he laid out after that, it is my opinion that the process will "flow better". The only thing you lose in this scenario is pictures for a max of three days if the CRM and/or DMS "pushes" the inventory to all sources. Customers will still call and e-mail because with a stock photo many will assume it is a new arrival or maybe your vendors automatically display this anyways.

So to put it in context, my process, not philosophy would be:

Car traded → delivered to Hyundai → Car goes through service -> Pre-owned Director decides which dealership they go to → Car Taken to appropriate detail → Car then put in “holding tank” for photographer to come by and take pics each day (or have the detailers take the photos)→ Photographer takes pics and adds window stickers → Car priced & marketed online → Back to appropriate dealership lot for sale

My 2 cents.

 

[ed.brooks]

These statements imply that what you have invested in the vehicle determines what you sell it for. This philosophy has some major flaws.

1. How much you own a car for has ZERO to do with it's Market Value. (Think about a customer with an astronomical payoff. Does that affect what you put in the vehicle in any way?)

2. Your inventory tool had better have realtime market data in its pricing portal, otherwise you may need a new tool.

3. Cars should be priced to market, otherwise you are leaving its sale up to chance.

If, after a vehicle's reconditioning process, the price you have listed is less than what you own it for, you should learn whatever lessons there are to be learned from the acquisition and disposition decisions that were made and price it to move.

Chances are, by the time you sell it, add back your pack, add in the Doc fee, hold back on a trade, finance it, and sell products for it, that the deal makes money. The alternative is that you price it too high, it gets old, your take it to auction and lose everything you spent on it anyways.


My two cents

I certainly agree with all three of Jeremy's points and can add slightly to them. Most dealers practicing a market-based pricing strategy will have the highest Price to Market on the freshest inventory (on average). This gives you a little added cushion if the shop comes in with a higher bill on recon. But the market is still dictating the asking price of the car!

I also absolutely agree with Len on the benefits of getting the car online as soon as possible.

As to the specific process question, we're seeing a number of dealers grab a few quick shots at the time of acquisition on a vehicle. While not every car brought in for trade or run thru the auction looks perfect, many look pretty darn good. These quick snapshots can be put online immediately with a price, so the car can start generating opportunities for a sale - From Day One.

Once the car has made it through the shop and detail, the original "quick and dirty" photos are replaced. This would sure save you some time shuttling cars around Marc!

 

[Marc McGurren]

Thank you all for the feedback. I actually spoke with Jeremy and his suggestion was to have a porter to a quick wash and vaccum and then have the porter take 7-10 pics - then send it through service - then to detail - then to lot.

That keeps it from getting dirty in service while getting everything squared away in detail afterwards.

To me - losing 3 days is not acceptable and 3 days is a "good day". I would assume our average time from trade to service is 4-5. Sits in service for 2-3 days and then we have been waiting for our lot service to come take pics and upload them 2-3x a week. So in reality - it could take 10-15 days for a fresh unit to get marketed - hence why i wanting to get cars marketed online immediately.

I think we can average our average cost on our used cars and add that in to our true cost when considering pricing the vehicle. Once the DMS pushes the RO back into True Target (our inventory mgmt solution) - it will then update our true cost. But as Jeremy said we will be looking at the market to see where we will be pricing the car.

We are fairly large volume store and to be able to shave off what I would call 7-10 days off of our time to market will make a HUGE impact on our bottom line. I know there will be kinks along the way - but just trying to figure out the best way possible to minimize any bumps in the road.

My used car guys are pushing towards doing the full detail first - so we will see how that goes. I am leaning towards a quick wash and vac. I know this will be an ever moving target and will evolve and as I can prove how well this will help us - I might be able to talk my way into a photo studio!!!

Thank you again for any and all feedback and if anyone else has anymore feedback - please let me know!

 

[AutoArchitech]

There are a few issues with taking photos of an unfinished car to upload with the "better" photos coming later.

1. Most websites will not automatically update the photos, so the "OK" ones are all the consumer sees.
2. You have 1 chance to make a good first impression. If a consumer sees the "OK" photos and does not like how the car looks, they don't visit that car again in a few day to see if it got better. They scratch it off the list
3. If a consumer is on the site and sees any car with a dirty photo it makes them wonder about the condition of any car at the dealership.

I think having a car online before it is actually able to be sold is a strange move. If someone comes to buy it and they can't because it is still in service, there is a better chance of them buying somewhere else that day because they are in the "buying mode". Are you better off having them see your car online on Tuesday, deciding to come see it on Tuesday, not being able to buy it and go somewhere else because they left the house to buy a car, or having them see it online on Friday, ready to go?

The issue to me is not getting them photographed faster, it is getting them ready to be sold faster. I am amazed by the number of cars I see in the system for weeks that are not inspected or clean. If they are not inspected in MD you can't sell them, photos or no photos....