In this episode of FWRD, hosts Corey Smith and Erick Jauregui speak with Eric Meahan, Managing Director of Repair360, about the declining profitability of used cars at dealerships.
Meahan explains that gross profit per unit has dropped over 12% year-over-year due to inflated acquisition costs post-COVID, parts shortages, and increased reconditioning expenses.
He emphasizes that dealerships must shift from viewing reconditioning as an afterthought to treating it as their supply chain. Key strategies discussed include improving vehicle appraisal processes, implementing better communication systems, tracking leading indicators rather than just cycle time, and establishing clear accountability in the recon process.
Meahan recommends dealerships focus on getting vehicles retail-ready within five days, implement daily recon huddles, and measure KPIs like idle time, parts waiting periods, and rework.
The conversation highlights how proper reconditioning management can turn used cars back into a profitable center for dealerships, with practical advice for immediate implementation.