Appraisal programs crucial to win used cars in service lane

Dealerships have long known that the service lane, where existing customers roll up in aging vehicles, is a good place to prospect for trade-ins. Throw in a lack of new-vehicle inventory, and the service drive becomes a logical place to acquire highly coveted used cars.

But Darren Militscher, a strategic growth manager for software provider DealerSocket, says the service drive is often ill-equipped to properly handle this. There usually is a lack of a process, with an unenthusiastic salesperson stationed on the drive.

"Service customers aren't looking to be solicited," Militscher says.

Instead, a proper service drive appraisal program requires processes specific to service, a dedicated employee to manage them and buy-in from advisers.

Militscher helped design an appraisal program with these features at Reedman-Toll Auto Group, of Langhorne, Pa., in 2013. The current climate of severe vehicle shortages and high retail prices has spurred more inquiries about how to manage this component of the service drive, he says.

At Lester Glenn Chrysler-Dodge-Jeep-Ram-Fiat in Toms River, N.J., Christina Petrolito — a veteran of Internet sales and business development centers — runs what the store calls its Vehicle Exchange Program.

"I act as a bridge between the service and sales staff," says Petrolito, whose desk sits in the customer lounge adjacent to the service drive.

Before a customer arrives for a scheduled appointment, Petrolito prepares a packet that includes a letter thanking the customer for their business, a free Carfax report on the customer's vehicle, marketplace pricing for it and a corresponding trade-in offer. With new-vehicle inventory short, the packets now include outright offers to buy.

For service customers who wait, exchange program signs are posted in the lounge, and Petrolito has a whiteboard that outlines ways customers can reduce their payments on a new vehicle. QR codes for the program website even adorn the vending machines. Customers can visit the site or text to inquire about an appraisal.

Petrolito says customers can consider the offer information and investigate the program at their own pace. This, she says, prompts customers to come to her instead of being approached, which puts them in control.

"We want them to know that this is an informational process and not feel pressured," she says.

After-hours drop-off customers get the same packets left on the driver's seat, and Petrolito says it's not uncommon for customers to call a few days later. When they do, she says, "You've got permission to talk further or hand them to a salesperson."

Lester Glenn's exchange program began in March and brought in 20 deals that first month. Petrolito says the total is now around 30 per month, and she hopes to grow that to 50 by the fall.

Militscher acknowledges that current conditions have made these deals more attractive to customers than in normal times. But the process is more important than the prices, he says. Reedman-Toll sources more than 100 vehicles a month through its program — numbers similar to those in pre-pandemic times.

At both Lester Glenn and Reedman-Toll, service advisers are the ones who ensure informational packets reach their destinations, and advisers play an important role in identifying customers who may be well served by a trade. Lester Glenn advisers are paid a small bonus for every deal they generate.

"In the beginning, we just talked to the service advisers to see who might be interested in an offer," says Reedman-Toll used-car manager Ross DiMaria. "But over time, their role got more proactive, bringing people with expensive repairs or unique situations to our attention."

Militscher and DiMaria agree that the process works best when the exchange employee has strong support from advisers and everyone is patient.

"That first mention of the program by the adviser and the packet are often just planting a seed," DiMaria says. "It puts the idea of a trade into their head, and a week or two later, they may return to do a deal."