Confessions of a Car Man


Used Car Reconditioning

All Car Men have experienced this situation. You took a cream puff in on trade: low miles, almost new tires, no dents or scratches. It’s the dream trade, a home run for the guy lucky enough to sell it when it hits the lot. A week later the little beauty comes out of detail and is parked on the front line like a sparkling diamond.

The next day you sell it, you lucky bastard! You start calculating the gross in your mind starting with what you took it in for. You estimate reconditioning costs (didn’t need much!), plus the pack and any other charges you can think of that management might tack on. Still, the calculation is good. It’s a God damn three pounder!

Two days later you get your voucher: It’s a mini.

You’ve been screwed my man! Caught up in a little scam called “used car reconditioning”. The recon fraud is as old as the business itself. Some dealers use this opportunity to squeeze out every dime of excess gross they can before the little beauty hits the line. A car comes into inventory and is taken to the shop for safety, smog and detail. The shop attempts to find enough wrong with it to get as much bucks onto the repair order as they can. They’ll try to make the sucker brand new, though many used cars only end up with a huge reconditioning bill and not a lot to show for it.

I once worked at a Dodge dealership whose idea of reconditioning seemed to be just to drive the sled slowly through the shop while the mechanics--strike that, I meant to say technicians--waved at it. I’m not that picky, but its nice when a used car has two working headlights, a spare tire, and power windows that actually go up and down. My nickname for the place was The Evil Empire.

Used cars can be a nice little profit center for a dealer even before they’re parked on the front line. Remember, for every $100 he can tack on to a used car R.O., that’s $100 less gross he has to pay you on. He makes a profit on in the shop, a profit on the car when it’s sold, and a profit on the salesman who sells it. Pretty nifty, huh?

Obviously, not all dealers do this, and I’m not opposed to a little extra recon if it results in a more marketable car. It’s the same as when they make a Hollywood movie and you hear a critic say, “they spent a lot of money, but the results are all up there on the screen.” People will always up money for a nice car.

So, what can you do about the used car recon scam? The answer is simple: nothing. Protesting will probably get you fired. Working at a dealership ultimately comes down to the income vs. bullshit ratio. The more money you make, the more bullshit you should be willing put up with. If you’re making $10K a month, maybe it’s not a good idea to bitch about the money you suspect they’re stealing from you.

But if you’re not making enough money, and its obvious that they are trying everything in their power to keep it that way, maybe it’s time to have a little sales meeting with yourself. In view of today’s market, is it a good idea to rant and rave? If you don’t have another job lined up, I’d bite my tongue for the time being. But if you’re sure you can get a better job, by all means launch!

The perfect situation is to get a job at a place you feel you can trust. I think I wrote something once about dealership personalities. Calm well-run car dealerships will probably be reasonably straight with you. Crazy, unorganized places should set off warning lights in your brain to hang on to your wallet.

Talk to you later,


1 comment:

Anonymous said...

David- good job on this story line. Unfortunately, some dealers spend more time trying to 'get to' their employees than trying earn profit from the consumers! Let's face it, like pregnancy, there's no 'half way' for dealer integrity. Either the operator is honest or he/she is dishonest.

Given the very uncertain times in the car business, the blow out box business has to be tempered with your own 'take' on the marketplace.

For as long as I've worked in the car business, the grass many times looks a LOT greener on the other side of the (dealership) fence. Obviously, selling Hondas is easier than selling Detroit metal. Yet notice how many MORE SALESMEN they have over there on the import lot? And how about their humongous "Internet Department" and "Fleet Department", which oftentimes get the leads instead of YOU getting them.

I guess all a salesperson can do is use their best judgment in evaluating what dealership to work for. It's hard to choose the 'perfect' store because nothing is forever... not even dealer management structures or even brand affiliation, it seems.