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Reconditioning is Mining Your Inventory for Margin - Don't Walk Away From It

Oct 30, 2018
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First Name
Ted
I read a comment recently in one of the other online forums for Used Car dealers. The poster, a dealer principal, wrote: “With reconditioning cost through the roof these days I prefer to buy as ready as possible. I feel my money is better spent on the frontline ready car..”

Really? Of course it’s great if you can score a vehicle where all you need to do is wash it and go, and no buyer should pass on those rare opportunities. But limiting yourself to only those gems can put you behind your competitors and leave money on the table.
View attachment 5368
If you’re shying away from vehicles that need some reconditioning because of the cost, then you need to take a hard look at your recon process. Reconditioning should be one of the most profitable parts of your operation, allowing you to acquire at lower costs and selling at higher margins. When you buy a frontline-ready vehicle, chances are that someone else has done the reconditioning, and is marking up your cost in the process.

So don't walk away from profit. Improve your reconditioning operation to become more efficient and you'll sell more cars at higher margins. Check out the full article
here.
 
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Reactions: Dan Sayer
Jan 13, 2021
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Awards
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First Name
Sam
I read a comment recently in one of the other online forums for Used Car dealers. The poster, a dealer principal, wrote: “With reconditioning cost through the roof these days I prefer to buy as ready as possible. I feel my money is better spent on the frontline ready car..”

Really? Of course it’s great if you can score a vehicle where all you need to do is wash it and go, and no buyer should pass on those rare opportunities. But limiting yourself to only those gems can put you behind your competitors and leave money on the table.
View attachment 5368
If you’re shying away from vehicles that need some reconditioning because of the cost, then you need to take a hard look at your recon process. Reconditioning should be one of the most profitable parts of your operation, allowing you to acquire at lower costs and selling at higher margins. When you buy a frontline-ready vehicle, chances are that someone else has done the reconditioning, and is marking up your cost in the process.

So don't walk away from profit. Improve your reconditioning operation to become more efficient and you'll sell more cars at higher margins. Check out the full article
here.
First and foremost the link you attached isn't working, and I'd love to see what you were referring too.

Secondly, I don't think in today's competitive wholesale grind that anyone is straying away from cars that need reasonable recon...That said, everyone's business model is different, but again, not impervious to the recon bug.

CAPITAL IS KING, and ultimately the demographic you target dictates the level of recon your store should incorporate.

Your logic obviously has merit to it, but recon is only one facet to getting a great deal. It's important to remember that CR score is relative to the amount of transactions that year/make/model has within that auction. For example you have two brand new 2021 whatevers.....one is flawless 5.0... the other has a few rock chips, a check engine due to an 02 sensor, and maybe some aftermarket wheels/radio. ....Well because the latter of the two units is the first for it's year/make/model to report anything besides a 5/5....whatever score it ends up compiling will drastically affect the adjusted wholesale value....Think about the "damages I mentioned"....from a cost perspective your taking 500 bucks maybe....but because of the lack of transactions that 3.0/5.0 (or whatever they give the second car) will drastically lower the wholesale value of the car far beyond the cost of those repairs.....


BEING A GOOD BUYER IS ABOUT MANIPULATING THE DATA, UNDERSTANDING WHERE THE LACK OF DATA LIES AND HOW TO UTILIZE THAT UNDERSTANDING AS FINANCIAL LEVERGE.
 
Mar 10, 2021
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First Name
Mark
Unfortunately, your link did not open for me.
And also I believe that nowadays, rarely anyone shies away from such cars. That is, only those who either do not really understand this, or the one who simply does not want to waste time on this.