Times have changed over the past three years. 2020 – the year that showed us how a virus could bring the world to its knees economically. 2021 – the year where society tried to normalize, but it was fresh off the heels of 2020. 2021 – the new normal; an economy where the laws of supply and demand were turned upside-down. Now that we are in 2022, how has this affected the subprime auto industry? Shortages in new models due to supply chain issues directly contributed to a marked increase in demand for used subprime vehicles.

Four years ago, it was difficult to sell a used car with a blemish or ding let alone selling a car to a customer without a test drive. Now customers are flocking to dealerships just to get the best deal on whatever is available at the time, often foregoing the “nice to haves” over the “must haves”. Proof of this trend can be seen in book rates. Take a Toyota RAV4, for example. New stock goes for $31,500 on average, whereas the demand for used condition stock now goes for $34,400. That’s almost a $3,000 difference! Customers are now willing to pay more for what’s available even if the vehicle is in subprime condition.

The potential for profit has never been greater, but a dealership still needs to control costs to maximize its margins. Carefully looking at its reconditioning programs is the first step to a solid program. Some questions to ask are:

• How much does it cost on average to recondition a vehicle?
• What are my customers looking for besides just a drivable vehicle?
• What is the average turn around for a “lot ready” vehicle?

Carefully managed, these factors can be handled and controlled to a point that gives a dealer the best chance for ROI that sustains itself over the long term. How can you manage the variables and tailor a DMS to your dealership?

Deal Pack helps you, the dealer, take the guess work out of the accounting for your reconditioning programs. With its integrated accounting software, Deal Pack has the capability to track any type of reconditioning program from start to finish while giving you real-time data to measure your ROI. Deal Pack allows you to enter invoices directly for specific inventory, or if you have a service department, Deal Pack’s optional Service and Parts module offers the capability to enter sublet invoices or details of your own inhouse work directly on a vehicle. Each step is recorded in double entry fashion to avoid unneeded entries or errors. Deal Pack also offers a variety of reports customized to the dealership’s unique needs.

ABCoA provides powerful tools that can maximize the profits and ROI of dealerships of all shapes and sizes. Contact us at 1-800-526-5832 to schedule a demo to see how Deal Pack can work for your business now and for years to come.