Acquiring pre-owned inventory can be a challenge for dealerships, but the service department can be a great source of vehicles. Dozens of cars go in and out of the service department every day, and dealerships can leverage this flow of cars to acquire more inventory. However, traditional service drive appraisal programs have been unsuccessful due to outdated methods that do not resonate with salespeople or customers. Many dealerships have attempted to use salespeople from the showroom to solicit customers in the service department. Unfortunately, this approach doesn’t work for two reasons. First, salespeople work on commission, and the low percentage of service customers who end up buying a car does not justify their time. Secondly, customers who bring their car in for service do not want to be solicited.
Today’s customers are often selling and buying cars separately, as dealerships that are willing to buy their car often don’t have a new car to offer in return. Dealerships are competing against companies like CarMax that offer customers an on-the-spot offer. If dealerships aren’t acquiring vehicles from current customers, they are dependent on auctions that have expensive auction and transport fees and always come with a level of uncertainty regarding its history. Acquiring vehicles from the service department includes a history and service records, making it a more attractive option for potential buyers.
To set up an effective service drive appraisal process, dealerships need an easy-to-use system that incentivizes service advisors to ask for appraisals. The best way to encourage this is by offering spiffs and commissions. By paying advisors to have conversations with their customers, dealerships can identify people who are looking to sell, interested in buying a new car, or curious about the value of their car.
We have developed the “Vehicle Appraisal System” software to help dealerships manage appraisals and spiffs. Service advisors can ask customers if they would like a free appraisal while their car is in for service, and the purchase offer can be ready when they come to pick up their car. If the customer is interested in selling, they can be connected to the Used Car Manager or someone from the sales team. The purchase offer is valid for 7-10 days, giving customers time to make a decision. Using the “Vehicle Appraisal System” has significantly increased the inventory acquisition from the service drive for dealerships. Successful dealerships have a closing percentage of service customers around ten percent, which can generate significant revenue, depending on the volume of service customers.
