Tackling the challenges of vehicle prep
As any retailer knows, vehicle preparation is one of the most crucial elements in the car-selling process. A well-prepped car is easier to sell, attracts more attention and gives a great reflection on a retailer.
However, vehicle preparation is getting more challenging. How much more challenging? Well in a recent survey of almost 1000 retailers, we found vehicle preparation is one of the biggest challenges retailers now face.
“Selling Cars is the easiest part of the job, prepping them is the hardest.””
Over 51% of retailers surveyed stated that vehicles are taking longer to prep than they were just 6 to 12 months earlier. And costs are rising as well. Almost 80% of retailers are now having to budget more for vehicle prep that they were 6 to 12 months earlier with half of retailers spending up to £500 on vehicle prep and 37% spending up to £1000.
Why is prep more of a challenge?
One of the reasons prep is taking longer is that the car parc, and retailer stock is ageing. This is due to the dearth of new cars entering the market throughout the pandemic years with the result being that the number of under five-year-old cars in the car parc is at its lowest level in 30 years. The lack of newer vehicles on the market and rising prices mean that many consumers are also now actively seeking older vehicles, with over 40% of all advert views on Auto Trader in the last 12 months being for cars over seven years old. You can find out more about the UK car parc and our projections on our Car Parc Hub.
As Ben Dewar, general manager at independent retailer Redgate Lodge highlighted in our recent webinar, these older vehicles often require more prep work with such vehicles frequently having bodywork issues which take far longer to rectify than other prep work.
The strength of the used car market, and specifically the rapid speed of sale we are now seeing is also putting pressure on retailers' prep teams. Craig Vladimirovs, general manager of Car Quay stated on our recent webinar that in an ideal world they would have over 80% of their stock prepped on their forecourt and ready to be driven away. However, the rapid speed of sale the market is currently enjoying, with used cars selling on average in just 29 days in July, means that Craig and his team must prioritise prepping sold vehicles rather than those that they have just added to their inventory. This is creating a backlog in prep work that is not unique to Car Quay, with Ben also stating that the team at Redgate Lodge are experiencing this issue as are many other retailers.
Ben also points to the backlog of part availability as a challenge , with longer wait times for parts further exacerbating the backlog in prep work.
How can retailers tackle these challenges?
There is no silver bullet to fixing the issues retailers are facing with vehicle prep. But Ben and Craig both believe that managing customer expectations should be the first port of call when it comes to easing the pressures on prep.
Both Ben and Craig agree that if their stock isn’t online for buyers to see, it really isn’t for sale and so despite the pressures on prep they advocate for putting all stock online. But by managing expectations, preparation can be better managed. Craig highlights when a car is bought or reserved online that may have just come into stock the team will advise the buyer that viewing is best in 7 days. This is to allow the team time to prep the vehicle and ensure it's in the best possible condition for the buyer and that the buyer isn’t wasting a journey to see an un-prepped vehicle.
This also applies when there are delays in preparation due to a wait time on a required part. Ben and his team will only use OEM quality parts when prepping a vehicle and this can sometimes lead to delays in preparation. But by communicating with the buyer, highlighting the level of preparation being undertaken and offering things like a courtesy car, buyers' expectations can be managed.
Of course, sourcing stock that is of a high standard can mitigate the need for extensive preparation. But with an aging car parc and increasing competition for younger vehicles, there will always be instances of stock needing preparation. Ben points to the need to invest in preparation and specifically investing in bringing in more techs and equipment to help accelerate the preparation of modern vehicles. This is something Car Quay are also investing in with the motivations of accelerating prep times but also bringing costs down. These investments, whilst costly have the huge benefit of negating the need for vehicles in need of programming to be taken to a main dealer for the required tech work. Both Craig and Ben believe such investments are key to addressing the challenges of prepping vehicles and ensure longer term profitability.
“Once the prep challenges are addressed, the impact will be felt across the business and we’ll be able to sell more cars.”
Want to learn more? Then check out our recent webinar featuring Ben and Craig where they go into more detail around tackling the challenges of vehicle prep.