Automotive

All Things Used Cars EP.48 "Perfecting Your Appraisal Process"

Leads are meant to be followed, yall.
No items found.
All Things Used Cars EP.48 "Perfecting Your Appraisal Process"

Week after week, All Things Used Cars' host David Long invites voices from across the industry to share their experience and expertise with dealers. This week we are taking on the topic of perfecting your appraisal process with guest George Magda

You can listen to a full replay on Clubhouse.

The Opportunities

George started by sharing what he sees around the industry as the pain: 

Dealers are not performing their appraisals. 

30% perform first appraisals, with fewer than 30% completing a 2nd before buying a car. This practice leaves the vehicle's actual value ambiguous and, therefore, an unnecessary risk. 

Sometimes VIN/TAG-based appraisals are not accurate. 

Flat recon prices. 

Without a thorough appraisal, it is impossible to know what recondition costs. The second appraisal is useless without a good first one.

A second look is required. A system for having a second opinion on everything should be developed and maintained. 

Lead follow-through. 

Data shows vehicles overlooked by one dealership are eventually appraised, acquired, and sold by another. If you want to appraise the car, you have to contact the customer. 

Are the leads bad or underworked?

The Solutions

George offered some solutions to establish a solid Lead - appraisal - acquisition rhythm:

Data and metrics.

Use KPI to determine the number of appraises performed and work to increase it. 

Use profit on in-house-appraised cars vs. others as a metric for implementation success. 

Measure the projected recon costs vs. the actual and adjust accordingly. 

Communicate. 

A good appraisal plan is more than just looking at vehicles and running numbers. It requires following leads and getting cars in the dealership. Getting in touch with customers quicker and with more accurate numbers will ensure they don't get a better deal somewhere else, costing you inventory and reputation with the customer. 

Plan. Execute. Evaluate. 

Create a plan easy enough for your whole team to follow. Get leads in the building, complete first appraisals, and report those findings to the manager for the second appraisal. 

Everybody should know the process and be able to follow it on a busy day. 

Do not skip the second appraisal. 

The 2nd set of eyes will increase margins by entire percent points. 

The Wrap 

Perfecting your appraisal process will increase profits, help fine-tune inventory, and avoid wholesales that should have been retail. It starts with increasing the number of vehicles we get in the store and appraising. With time the data will lead to the next area of easy improvement. 

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.