Mark Foster, executive manager at Walker Cadillac-Buick-GMC in Carrollton, Ga., hasn't taken the profit-sharing step yet, although the dealership has been a Lescota client. But he agrees that money invested in making reconditioning more efficient is well spent.
Foster's dealership employs a full-time reconditioning manager. That hiring decision, Foster says, caused his used-car manager to complain that "all you are doing is making a fortune for fixed ops." But he says the added attention ensures that no aspect of reconditioning is slighted, and identifies where to spend money usefully to improve the process.
What happens, Foster asks rhetorically, when a used-vehicle buyer returns to the dealership for a first oil change and discovers that he or she needs new tires or brake pads because the vehicle was reconditioned badly?
"Is that customer coming back to buy a vehicle from you again?" he asks. "Probably not."
Cox Automotive forecasts U.S. sales of 39.5 million used vehicles this year, compared with 16.7 million new cars and light trucks. Cox predicts that 3.9 million leased vehicles will return to dealerships in 2018, and that the number of lease turn-ins will continue to grow until it peaks at 4.3 million vehicles in 2020.
Because leased vehicles tend to be newer than trade-ins, they generally require less preparation for sale as used cars and trucks. But all require some reconditioning.
Used-vehicle prices are likely to decline in 2018 because of abundant supply, says Tom Kontos, chief economist at ADESA Analytical Services. High-quality reconditioning is an essential way for dealerships to differentiate their used vehicles, he says.
"Otherwise, you will just be following the market down," Kontos says.