It’s no secret that EPA emissions standards have made things harder for the used truck department. As trucks become more reliant on technology, there are more and more opportunities for giant repair bills to insert themselves into the reconditioning process. It’s not unusual to see a $2,500+ bill just for a truck to pass a DOT inspection, which wipes out the chances of making money on a wholesale deal and really squeezes gross profit on the retail side. How do you protect your department and your profit margins? No matter the challenges that your unique market put in your way, there are a few elements that we recommend become a part of your used truck buying process.
- Proper Inspection: Coordinate with and get training from your service department. Get a professional set of eyes on every truck before making an official offer. If there are resource constraints or geographic concerns (eg. customers are using the truck on a work site and can’t bring them to the service department) your appraisers need to be trained on an electronic diagnostic tool to read the ECM and have a well-defined set of required pictures to review with the service department.
- Prepare the customer for “worst-case-scenario” repairs. If time does not allow for a service consultation, buyers should have a list of typical repairs and the costs associated with those repairs to communicate with the customer. Assume that the truck is in the worst condition possible, and let the customer know how much your offer will be increasing if the truck does not require the usual repairs. Giving customers money back tends to be an easier proposition than clawing money back from them once the truck is in your possession.
- Stay current by maintaining regular communication with your service manager. Organize a standing meeting with your service manager at least once a quarter. The goal of the meeting is to learn from the service department any trends they are seeing in the repairs they are performing on trucks that you typically buy. Any new trends
It is impossible to completely remove the risk from buying post-emissions used trucks. However, discipline around these processes and closer coordination with your service department during the buying process can and will decrease your odds of buying a truck that will wipe out your margin for the month. If you’re looking to tighten up your communication with the service department in the buying process, we can help! Reach out to
John@keaadvisors.com to get on the schedule and let’s talk.
