AutoSuccess, by Dennis McGinn — If you can’t measure recon speed and maintain process accountability accurately, any cycle time your team offers is just a wild guess. In our experience, most such “estimates” are 10 to 15 days off from reality.
Strive for a three-day average in recon (ADR). For some shops, a consistent seven-day ADR is appropriate, because some events that influence recon speed are beyond the control of the recon department.
Every day a car is in process in recon — from onboarding from trades or auctions until that car hits the sales line — piles on holding cost depreciation. NCM Associates puts this daily erosion per vehicle at $36, a vehicle’s daily share of various overhead expenses. This burden comes right off the “sold” gross. A vehicle in recon 10 days eats $360 in gross. Multiply this across the number of units you recondition in a month and holding cost depreciation becomes a gut punch.
A used car’s magic bullet for sales is the first 30 days you own it. Spend half of those days getting the car to the front line and that sluggishness leaves just 15 days to sell at maximum gross. Profit opportunity slides downhill after that. Go to article