Watch For These Used Vehicle Trends Through 2019

 > Sales mostly flat

 > New vehicle prices spur more Used vehicle shoppers

 > Increased Used inventory means larger depreciation

Much like the year before, 2019’s new and used vehicle market is moving apace. Sales have been decent enough – with no real jumps in profits. However, analysts still warn of the impact of higher vehicle prices on the auto industry in general, which may mean greater margins for used car dealers.

With many in the industry voicing their concerns, there are a few used vehicle trends you should plan for in 2019.

 

Sales Will Mostly Be Flat

Plenty of organizations are predicting flat sales. Both NADA and other economists expect the new car sales to be lower than 2018’s 17.3 million. Beyond that, according to Automotive News’, David Muller, senior economist at Cox Automotive, Charlie Cox, said:

“We estimate the market to be around 39 million and a half on the used side in total.”

In 2018, used cars saw a slight increase in sales in comparison to the new market. However, this year, they don’t expect the sales to increase by any substantial measure – which would end the 5-year gain the used market had been experiencing.

 

Increased Vehicle Costs Will Turn Customers To The Used Car Market

As manufacturing prices continue to rise, so will new dealership prices, and therefore use vehicle prices. However, the key difference here is that used vehicles will ultimately be the cheapest option for consumers.

The chief economist at Cox Automotive, Jonathan Smoke said: “The fundamentals remain solid; used-vehicle demand is at a peak. Wholesales supply is now post-peak and starting a gradual decline. The used market is the answer to the affordability challenges in the new market.”

 

Lease Maturities Will Peak

In 2019 alone, Automotive News’, David Muller, says more than 300,00 vehicles will come off lease in 2019 in comparison to last year. According to Cox, maturities are expected to peak around 4.1 million units– which comes three years after new light-vehicle sales hit a record of 17.6 million.

Executive Vice President and Chief Economist at ADESA Analytical Services, Tom Kontos said: “So With a high percentage of purchases happening upstream, there were comparatively fewer vehicles working their way downstream into physical auctions.” Which assisted in keeping prices from falling fast.

 

There Will Be Larger Depreciation

Since there will be an increase in supply, there’s an expected increase in the rate of depreciation as well. According to President of Operations at Black Book, Anil Goyal, the rate of depreciation for 2018 was 12.4%. However, he said the rate will go up to 15% in 2019.

 

There Will Be An Increase Of SUVs In The Market

Companies, such as Ford, are going all in with trucks and SUVs. According to Tom Kontos, “Even if supply growth in total is fairly moderate, the growth in crossovers and SUVs is going to be fairly significant.”

 

Bottom line: Used vehicle sales will be close to last year’s peak levels, which is good news. Demand will remain steady, partly fueled by higher new car pricing. SUVs and Crossovers continue to dominate consumer interest, and vehicle inventories should generally match their needs.

8 Common Challenges in Small/Mobile Wheel Repair Operations

Wheel RepairWheel Repair shops can range in size from 1 or 2-person garage-based or mobile services to large multi-site franchise and remanufacturing facilities.  We know this because we have clients across the spectrum. While the very large operators have some unique challenges that we discuss elsewhere, the larger number of businesses offering wheel repair today share common business management issues, and our software offers some great solutions. Below are 8 examples of how AMT’s ReconPro or Repair360 mobile software helps turn your challenges into accomplishments:

Primary Pain Point

AMT Product Feature That Solves It

  • Still on paper
Easy-to-use digital estimates and electronic invoicing (No more handwritten invoices).
  • Documenting which vehicle you are repairing
VIN scanning will scan and decode Year, Make, Model for each vehicle, and carry that information through to estimates, work orders, and invoices.
  • Need to limit liability and “That wasn’t there before”
Organized mobile app documentation can include photos or videos attached to every job to verify vehicle condition.
  • Getting Approvals
Electronic approvals via quick link or signature on your mobile screen.
  • Getting Paid
Electronic PO’s, and/or credit card processing from your device.
  • Getting your invoices into your accounting systems
Accounting integration with QuickBooks and other popular programs. No need to type in the information again.
  • Taking time to crunch the numbers on employee pay
Payroll & Employee Timesheets keep track of everyone and every penny, and can even calculate shared jobs and commission splits. 
  • Getting an invoice copy to your customer, or finding your own copy.
Digital records are always organized. Print, Fax, or Email your invoice from your device or your back office computer.

Successful business owners understand that efficiency is key to maximum growth and maximum profits. AMT software helps you to stay efficient on your administrative tasks so you can spend more time growing the business. You can download our free basic product, Repair360, directly from the Apple App Store (f0r iOS devices) or Google Play Store (for Android devices). For more information or a demo of our flagship ReconPro software, click here.

How Reconditioning Software Reduces Your Time To Market

Recon management whiteboard

Yesterday’s recon management dashboard. Don’t rub it the wrong way!

With each year, more and more dealerships are adapting to the latest and greatest technology. They’re doing this to increase their inventory turn times, but to also anticipate the likelihood of selling outside of those time spans. There are a lot of things to consider as a used car dealership, but one thing for sure is that each day a vehicle is being reconditioned, you’re losing money.

So, let’s approach time to market with an example. Let’s say your turn time is 50 days, but it takes you a total of 9 days to recondition the vehicle from auction to the frontline. With that turn time alone, you’re already reducing the vehicle’s chance of getting sold by 18%. Beyond that, if you wait too long, you may have to send it back into auction or reduce the price significantly to make any profit from it. The longer you have a vehicle in inventory that isn’t driveable by a potential customer, the less likely it’ll get sold.

Because of an inefficient recon operation, problems with morale can develop between your different departments. The business relies on the sales force selling vehicles as soon as possible, but if the technicians in the service department are taking too long, there will inevitably be some friction. At the end of the day, time to market relies the most on the reconditioning process pushing out vehicles as fast as possible for the sales team.

If you create a standardized process for your back-office, service department, vendors, and front-end sales, your time to market will drastically reduce. One of the biggest bottlenecks for used car operations and the reconditioning process is communication. Reconditioning management software can bridge the gap between all of the departments– making it easier for information to be accessed, knowing who’s accountable for delays, and getting approvals as fast as possible. It can even reduce friction between departments, by enabling your Fixed Ops department to set Sales department expectations with reliable delivery times for each vehicle.

To make sure all of your vehicles are frontline-ready as soon as possible, reconditioning software is an absolute must in this market. It enforces a much more organized approach when it comes to back-office information, vehicle reconditioning, sales, and customer satisfaction, and all the relevant information is available at the touch of a button on your computer or mobile device.

AutoMobile Technologies Can Help

AMT offers software solutions designed to make your reconditioning business more efficient, provide you with better visibility, and give you peace of mind knowing that your back-office is always up-to-date and your reconditioned vehicles are delivered at speed.

ReconMonitor is a state of the art workflow automation software for dealerships, auctions, and auto remarketing companies. ReconMonitor dealership software decreases reconditioning cycle time and increases your control and profitability.

Tariffs Are Still The Biggest Threat To New Car Dealerships In 2019

With the agreement between the United States, Mexico, and Canada (USMCA), some of the previous tariffs’ impact has been erased. However, according to NADA News, Section 232 of the Trade Expansion Act of 1962 will still have negative effects with tariffs on automobiles and vehicle parts. A report by the Center for Automotive Research (CAR) says vehicle prices will go up– trickling down from the manufacturers to new/used car dealerships, and then to the consumers.

Back in July 2018, CAR’s research concluded that the tariffs would lead to a considerable increase in vehicle prices. It also showed manufacturers and dealerships would see a decline in annual new-vehicle sales and industry jobs. In CAR’s latest report, they created a total of ten different scenarios using U.S trade policies, Section 232 autos, auto parts tariffs (steel/aluminum as well), the USMCA agreement, and Section 301 tariffs involving Chinese imports.

According to NADA News, if the USMCA agreement is launched in its current state, CAR anticipates that:

  • Up to 366,900 U.S (77,000 of which are franchised dealerships) will be lost.
  • The average price of U.S. light-duty vehicle prices will go up by up to $2,750.
  • New U.S. light-vehicle sales will see a decline of up to 1.3 million units per year.
  • Consumers will be forced into the used car market.
  • Vehicle repair and maintenance costs will drastically increase for consumers.

CAR estimates that Section 232’s tariffs on automobiles and vehicle parts will be responsible for roughly 90% of the total economic problems that result from collective trade policies. In its conclusion, the most recent CAR report notes, “While the trade restrictions adopted or under consideration are intended to assist U.S. workers, these policies are likely to be extremely disruptive to and negative for the U.S. economy.”

NADA CEO, Peter Welch, says: “This analysis confirms that broad Section 232 tariffs on autos and auto parts still present the biggest trade-policy threat to consumers and the U.S. economy. NADA understands and appreciates the Administration’s attempts to level the trade playing field and eliminate unfair trade practices, but expensive Section 232 auto tariffs are the wrong tool for the job because they will lead to dramatic price increases, depressed vehicle sales, and job losses.”

In July, Welch spoke before the Department of Commerce and requested the Administration abstain from applying the broad-based tariffs on automobiles and vehicle parts.

“We should continue to work together to address genuine trade concerns, but without hurting American consumers, and small businesses in the process.”

PDR Estimate and Invoicing Software on different devices

3 Best Perks of PDR Software in Your Back-Office Operations

hand holding mobile device displaying the same charts page as the laptop behind itEven in 2019, there are still quite a few PDR businesses out there that rely on out-of-date processes in their back-office. It may be because they’re skeptical of change, or simply because they feel like things work well enough as-is. However, with the PDR business developing as rapidly as it is, you’ll need a way to keep up with the competition and make your life easier.

For many of you in the PDR business, you may not even realize how much faster and easier your back-office operations could be. Anyone who’s familiar with running a PDR operation knows just how much time they spend on things like invoicing, commissions, customer accounts, and more. It’s a lot of work, and you’ve probably spent hours on a daily basis stuck with a pile of paperwork.

Fortunately, each year, technology becomes better, faster, and more efficient– which means the PDR software of today can take all of that time stuck with back-office work, and turn it into just a few minutes of attention each day.

While there are plenty of benefits to a software solution for your PDR business, here are 3 of the best perks of PDR software on your back-office operations:

Increase Operational Efficiency, Enhance Customer Service, and Save You Time (and Money)

Since most everything related to your operation can be put into PDR software in real-time and in just a few minutes, everyone from the front-end to the back-office can keep things moving. Having a quick and efficient back-office means that your front-end work won’t need to sit around and wait for things like information or approvals to continue working.

Your PDR technicians can process customer estimates, transactions, and more all at the click of a few buttons– keeping your back-office constantly updated with all of the relevant information already filled out and accessible. With PDR software solutions, your back-office tasks can go from hours of your time to minutes– impacting your entire operation’s speed and efficiency for the better.

With the ability to track every bit of your PDR business in real-time, you’ll be able to focus more on the part of the business that makes you the money.

You Can Review All Operational Details Privately, Anywhere, and Anytime

PDR software stores all of your operational information in one spot. This means that as the owner or operational executive, you can keep track of your business from anywhere at any time, privately. No matter what business you’re in, there’s sensitive data that you may not want other employees or customers to access. So with a PDR software solution, you can keep track of the essentials comfortably and without worry.

PDR Software Can Be Used Anywhere, Even Without Internet

Because the information is collected through a native mobile application and synched to your back-office, all the information is available to you on your desktop, and any information stored on a mobile device can be accessed with or without internet access. This provides you with quite a bit of flexibility and the comfort of knowing that you can monitor your PDR business wherever you are. It allows you to better manage your PDR business, track sales information, check accounts, review job statuses, and be alerted of any delays or problems in real-time. So if you have a team of technicians out on the road, you can see exactly what they’re doing and any issues there may be, all on your mobile device.

AutoMobile Technologies Can Help

AMT offers software solutions designed to make your PDR business more efficient, provide you with better visibility, and give you peace of mind knowing that your back-office is always up-to-date. Let us show you how we can help.

ReconPro is the industry’s most versatile and powerful software solution built for auto recon professionals. With essential tools for performing PDR estimates, hail and insurance matrixes, parts management, paint code lookups, integrations with body shop crash systems and accounting systems, too. ReconPro manages the details of running your business so you can focus on growing your business.

CLICK HERE to get in touch.

Auto Dealerships Will Be Just Fine In 2019

New & Pre-Owned Sales signAccording to NADA News, Senior Economist for NADA, Patrick Manzi, said trends are looking good for both new and used vehicles in 2019.

He continued on and said in a recent speech in San Francisco: “The current posture of the U.S. economy is strong. A tight labor market continues to put upward pressure on wages, which are rising. Consumer spending, a significant contributor to GDP, remains solid. It’s a positive sign that consumers are spending money.”

In 2019, NADA expects there to be roughly 16.8 million sales in light trucks and new cars– a 3% decrease from 2018’s fourth straight year of 17 million units.

However, Manzi warned that the rising interest rates for auto loans will impact the affordability of vehicles for consumers in the coming year. With rates and monthly payments expected to rise, he says younger consumers will shift to the used car market. “This is a great opportunity for dealers to get these customers into nearly new certified-pre-owned vehicles.”

With the used car market’s expected increase, software companies have developed software to make the reconditioning process as efficient as possible to maximize profits. Products like ReconMonitor can help you track each vendor or employee task and identify what order those tasks are being performed. This helps you execute auto remarketing at maximum speed, and ensure you have the stock available to meet consumer demands.

Best Software For PDR Commissions

Running PDR business, you understand how much time it can take to track and calculate commissions. Your back-office has to put in a lot of time and effort to record complete and accurate data. Beyond that, if you’re running your back office manually, you’re probably still using paper documents, dry-erase boards, spreadsheets, and maybe even sticky notes to record information. It demands a lot of time and attention and can even take away from focusing on growing your business.

Management software has become a standard in the auto industry to record information and improve workflow. And the best software for managing commissions?

ReconPro

ReconPro is one of the best management software solutions for PDR businesses. You can create invoices, estimates, approvals, and even track vehicles statuses at the click of a button. The software can also automatically calculate and track commissions from simple splits to complex multi-tiered and team commissions. ReconPro is feature-rich, including access to a number of hail and insurance matrixes, conventional repair costs, parts management, and a host of other useful functionality. It has fully customizable templates for print and email documents, so your business and brand are well supported.

ReconPro is a native software app that allows PDR businesses to keep their back-office running smoothly while also making it easier to access information on the fly, and keep technicians up-to-date on everything they need to know.

Beyond that, ReconPro provides you with visibility and control, eliminates manual and duplicate data entry, automates commissions and vendor payments, offers the most detailed reports on the market, can easily integrate with QuickBooks and crash management systems, and eliminates any need for IT staff to install or maintain– all on your mobile devices and back-office computer.

To speak with a specialist and arrange for a demo of ReconPro, click here.

Why Your Dealership Should Prioritize Convenience And Transparency

Why Your Dealership Should Prioritize Convenience And TransparencyAccording to Dealership News, research from a Cox Automotive Service Industry Study showed dealerships are losing out on roughly $266 billion dollars a year in service revenue. Beyond that, the biggest contributing factor to it all is customer trust and inconvenience. Unfortunately, many dealerships aren’t doing enough for customers to feel completely comfortable with their purchasing process.

Released back in January, the study also showed that 70% of all customers who bought or leased a vehicle from a franchised dealership did not return for continued vehicle service. The reason behind this? Well, they’d rather take their chances with established body shops and independent repair shops. In fact, the study showed customer service satisfaction with dealerships was about on par with the small body shop you may see down the street.

With the average age of vehicles out on the road sitting at around 11.5 years old, it isn’t too surprising that dealership services see a reduction in visits as a car ages. However, on the plus side, dealerships still lead the way against third-party businesses for overall customer visits– but lag in customer service, convenience, and transparency.

Dealership News suggests a few simple fixes for this would be:

  • Providing customers a way to pay online.
  • Schedule appointments with customers via their mobile devices.
  • Picking up and delivering serviced vehicles to and from customer locations.
  • Provide simple repairs to their vehicles outside of the shop setting.
  • Providing customers with information, such as trade-in value, services, price ranges, estimates, and competitive ranges.
  • Give customers a way to monitor their vehicle’s service remotely.

Jim Roche, Vice President of Marketing and Managed Services with Xtime told Fixed Ops Journal: “Dealers have to figure out how to get your vehicle to the service, or the service to your vehicle.” Which is in line with the study that also suggests customers are willing to pay more or travel longer distances if the customer service is great.

 

AutoMobile Technologies

AMT offers software solutions designed to make your dealership more efficient, provide your customers with the information they need, offer you better visibility, and give you peace of mind knowing that your back-office is always up-to-date and you’re building a positive relationship with customers.

ReconMonitor is a state of the art workflow automation software for auto recon, dealerships, and auto marketing companies. ReconMonitor dealership software decreases reconditioning cycle time and increases your control and profitability.

How Finance & Insurance Helped Dealerships In 2018

How Finance & Insurance Helped Dealerships In 2018

It looks like Finance & Insurance were great for dealerships last year. In fact, prepaid maintenance programs (38.9%) and vehicle service contracts (43.9%) were their most profitable sellers.

According to Auto News, Protective Asset Protection created a paid survey in December to look at how well dealerships handled Finance & Insurance (F&I) over 2018.

More than 150 dealerships opted in, completed the survey, and reported their gross margins were unchanged from the previous year (35% of dealerships said the same thing). However, 32% of sellers reported their F&I revenue had increased by 10%. While another 30% reported increases between 5% and 10% in comparison to the previous year. Beyond that, 42% of dealerships reported that vehicle service contracts (VSC) and maintenance programs were their biggest hits.

As we move more and more into 2019, experts suggest VSCs will continue to grow in popularity as consumers shift towards purchasing used vehicles. According to NADA, used vehicle sales were 39 million in 2018. Whereas new vehicles sales were 17.3 million. However, the expectation is for new vehicle sales to drop down to 16.6 million. With this change, consumers will need VSCs and other maintenance programs for taking care of their trucks and SUVs.

Senior Vice President of Protective Asset Protection, Rick Kurtz, says: “We believe the demand for many F&I products will continue to grow in the upcoming years, especially as more consumers use pre-owned vehicles to combat the affordability of new automobiles. What’s more, the continued trend of off-lease volume will place additional focus on used vehicles, where VSCs and maintenance programs will significantly help to ensure consumers keep their automobiles on the road and running. Also, we all see dealer-owned warranty company applications, in particular, helping dealers offer top quality F&I products designed to satisfy the needs of their customers.”

With the increase in F&I business, now is the time to evaluate how your business handles service contracts, and what systems you have in place to manage the work. AMT can help. If you’re working with F&I contracts, ReconPro can help you initiate a claim, schedule a repair, and maintain all records associated with the Service Contract. Apply Service Contract terms directly into vehicle records to create correct invoicing and improve customer satisfaction.

Four Tips to Keep Customers Coming Back to Your Dealership

In 2019, dealerships have a lot of competition when it comes to returning buyers, servicing, and simple repairs. However, if you focus on the customer experience first, you’ll keep them coming back for years to come. Nowadays, it’s not just their time at your dealership that counts, but also their convenience when visiting your website or waiting for their vehicle to be serviced.

The auto industry is evolving every day, and the way your customers experience your business is changing, too. Below, we have four tips that will keep customers coming back to your dealership.

 

Prioritize A Simple, Effective, & Informative Online Experience

Obviously, smartphones are everywhere. We all know it, and because of this fact, the way customers experience your business begins with a Google search. Typically, they’ll see a list of businesses (on Google My Business)  in their area that match what they typed in. They’ll go through, read reviews, look at pictures you upload, and then they’ll go to your website.

Customer service begins at first touch– your website. If it’s easy to navigate, provides useful information, and puts simplifying the customer experience first, then you’re much more likely to gain their business– and keep it.

 

Be Transparent With Customers

First and foremost, this will gain your customer trust. People know when salesmen are just trying to close a deal. It’s also safe to say many dealerships believe front end sales are where all of their money is made. However, in today’s market, it’s not so simple.

If you treat a customer well and prioritize their comfort, they’ll be more likely to come back for business and refer you. Beyond that, when you set expectations,  provide exact costs, estimates, rebates, and work with them through every step of the process, you’ll develop a positive relationship.

However, as you’ll probably guess, this transparency doesn’t end with the in-person meetings. The best dealerships have software in place that will calculate everything a customer needs to know, instantly, for their purchase– including all of the things (and more) that we listed above. Whether it’s for service, or simply offering information, you can send out automated text alerts for customers to stay updated, giving them another easy way to connect with you.

 

Keep In Touch With Customers

Whether it’s through emails, texts, or phone calls, it’s important to check in with customers every now and then. This isn’t to suggest you should pester them on a regular basis (don’t do that), but sending out promotions every now and then is never a bad idea. Beyond that, if you have a social media page, that can be a great way to stay in contact with customers and provide updates on anything you’re doing that they may be interested in.

 

Have A Management Software System In Place

We touched on it a little bit above, but it’s crucial to have a system in place that helps make the customer experience as easy and informative as possible. In 2019, the majority of the most successful dealerships have a software system in place that not only increases operational efficiency, but also can create custom forms, email templates for promotions, provide customers with text message updates on services, and inform them of pricing and estimates on the fly.

 

AutoMobile Technologies

AMT offers software solutions designed to make your dealership more efficient, provide your customers with the information they need, offer you better visibility, and give you peace of mind knowing that your back-office is always up-to-date and you’re building a positive relationship with customers.

ReconMonitor is a state of the art workflow automation software for auto recon, dealerships, and auto marketing companies. ReconMonitor dealership software decreases reconditioning cycle time and increases your control and profitability.