Car dealers should not ignore the part-ex profit potential

Mark Llewellyn, managing director of Revive, the network of franchised SMART technicians, recalled the time when dealers put off minor repairs until the car had been sold. “The attitude was ‘why waste money when it may not sell?’, but that’s no longer acceptable. It puts the salesman on the back foot, with the customer asking ‘what else is wrong that I haven’t spotted?’ ”

Using SMART repair to aid customer retention

With SMART work now a routine part of the used car prep procedure, Llewellyn said his company was looking for extended collaboration with dealers. “Customers who have suffered minor damage would be encouraged to return to the dealer. It not only adds value to the SMART proposition, but aids customer retention.”

In broad terms, Neil Marcus, marketing director of Selsia’s 90-strong network of accident repair centres, said SMART repairs would be appropriate for a lower-value, non-prestige marque with more than 70,000 miles on the clock. Higher value cars up to three years’ old with a mileage up to 50,000 would be more deserving of bodyshop attention.

“If we’re talking about light accident and cosmetic bodywork damage on, say, two to three panels, Selsia has a same-day service costing on average around £300 plus VAT,” said Marcus. “Volume discounts are available to dealers.”

Dealers can go online and highlight bodywork damage on the schematics relating to the make, model and style of any vehicle that generates an instant estimate. “With this information, they can make an immediate judgement on the (part-exchange) they can allow to the customer and its retail value,” said Marcus.

Peter Isted, managing director of Lifestyle Europe, said it was imperative to run used and new car businesses as separate departments. “A manager looking after both runs the risk of dropping the ball on used to focus on new,” he said.

Lifestyle sells about 6,000 used cars a year through nine sites, 70% of which is part-exchange, 10% to 15% sourced through auction and the remainder pre-reg. Part-exchanges undergo a 55-point appraisal, with body and mechanical work typically costing £350, plus valeting.

“We don’t look at this in terms of what value it adds to the car; it’s what the customer expects, but it would be reasonable to say it’s worth £200 to £230 more,” said Isted.

Most unwanted vehicles are disposed of through Manheim’s physical and digital auctions. “With space at a premium, you can’t afford to have unsold stock sitting around,” said Isted.