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Used Cars: Approved programmes – a help or hindrance?

Jeff SmithJeff Smith
Author of The KPI Book
Insight Training & Development Ltd
web site: www.askinsight.com
email: jeffsmith@askinsight.com
Telephone 01384 371432

 

 

 

Most new vehicle manufacturers have their own version of an ‘approved used vehicle programme’ and it’s not limited to cars either – trucks and bikes have their own versions.

The question is, why do these programmes exist and do they make a difference to the franchise, the dealer or indeed the customer?

Manufacturers create used vehicle programmes to help their dealer networks generate better results with their used vehicles but many of these approved schemes just don’t work. 

There are good reasons why: they do not lay the foundations of success. 

The foundations for a used vehicle business are like the foundations of a house – they lie hidden below the surface. 

Many approved schemes build only above the surface, creating a structure that is weak and vulnerable to attack by market conditions.

Managing used vehicles is about managing risk and it can be done effectively with a blend of entrepreneurial flair and good foundations. 

Right people with the right knowledge

Good foundations consist of the right people with the right knowledge, sufficient capital to fund the operation, good working practices and structured processes that ensure consistent results.

Above all, it needs in depth understanding of business to deliver high return on investment.

Most of the approved used vehicle programmes do not address any of these fundamental issues; they do not consider the foundations and cover everything with gloss paint so it looks good for the customer. 

The ‘gloss paint’ consists of branded materials such as windscreen stickers, headboards, sun visor pricing units, wheel totems and flags. 

Standards include rules and regulations such as: all vehicles must be subject to a multi-point check, mileage verification and must be issued with the manufacturer’s warranty. 

However, the customer value attached to an approved vehicle scheme can be low.

  • Read this story in full in the 17 October 2008 issue of AM. To subscribe to AM magazine click here or call 01733 468659.

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