Page 6 - MIADA-Q2 2021

The Pros and Cons

of Buying Lower

CR Grade Inventory

By Curtis Sampson, Rapid Recon

As the supply of Grade 4 and 5 used cars his dealership, 500 Automotive Chevrolet line. Notify staff they won’t be docked for
continue to dwindle, franchised dealers Buick GMC in Clinton, Indiana. slower time to line results on these units.
will increasingly turn to lower condition
-grade vehicles to supplement their lots. “We’re doing so for two reasons. There are Certain times require a paradigm shift.
fewer bidders on these cars because many Dealers get in a mindset, driven by
“Condition of units [at auction] is dealers don’t know how to recondition customer requests, that a vehicle needs
trending toward the ‘edgier’ side with them efficiently, and they’re more to be near perfect, if not perfect. You’re
damage, dash lights illuminated, and affordable for us to buy,” French said. not restoring used cars, but you are in
vehicles running on red and yellow the business of reconditioning preowned
lights,” Black Book noted recently. “Even in a white-hot market, value ones.
shoppers are still buying. When you can
Can a dealer acquire these cars and still recon lower-grade cars right, they present For edgier condition units that need
recondition them to make a profit? Yes, if as mechanically sound and cosmetically a durable recon process, providing
done smartly. nice, not perfect,” French said. “If you’re bona fide accountability, transparency
using your recon software data correctly, and communication in every step are
Lower condition report (CR) units are you’ll get the answer to the big question, essential, for both inside your operations
not necessarily older, higher-mileage ‘Is there any juice in the squeeze left and with outside vendors. I cannot over
vehicles. They are two to four-year-old based upon what we would have to spend emphasize the importance of having in
cars in rough condition, presenting at the on it in recon?’” place a robust recon process, the key
auction or as lease returns having dents, to creating profitability from lower CR
scratches, bad brakes, torn seats, and Because these cars are likely to require units. n
other evidence of wear. more recon work and thus more time to
get them sale-ready, it is wise to create a Curtis Sampson is a new business manager
Chevrolet dealer and used-car best separate recon time-to-line bucket. Thus, for reconditioning software company Rapid
practices consultant Ed French said he’s these cars’ longer slower recon timed Recon. He is a former dealer principal,
now buying 2.5 to 3.5-grade vehicles for won’t skew the dealer’s typical time to general manager, and used vehicle director.

6 | MIADA MISSISSIPPI DEALER Q2 2021