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#437 - When Recon Goes Sideways
#437 - When Recon Goes Sideways
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About this episode
Recon doesn’t go sideways because dealers “didn’t spend enough”—it goes sideways when staffing, inspection consistency, and approval/process control break down. The hosts benchmark recon using metrics like “hours per RO” and efficiency, then connect overspending to comebacks, cash-flow problems, and even bad reviews or “AG complaints.” They also walk through practical workflow ideas: centralized recon, standardized inspection sheets, final drive/monitor checks, and tracking comeback costs with spreadsheets and dashboards.
Topics:
billable hours
bodywork
Brenner car credit
check engine light
digital inspections
electronic check-in process
final drive
Harrisburg
performance improvement plan
recon
In this episode of the Independent Dealer Podcast, Luke Godwin takes the stage at an industry conference to break down one of the most expensive — and most ignored — problems in the buy here pay here business: recon. Joined by Sam Brenner of Brenner Car Credit, a five-location BHPH operation out of the Harrisburg, Pennsylvania area, Luke walks a room full of dealers through exactly what's bleeding their shops dry, why hiring more techs is almost never the answer, and what a real recon process actually looks like.
What You'll Learn:
Why having a recon facility often makes the business harder to run — and what that means for how you structure your shop
How Sam's shop was running 22+ labor hours per recon unit at over $2,200 a car — and what one process change cut that nearly in half within 30 days
Why your techs are costing you double what you think if you're not tracking hours turned versus hours paid
The internal inventory manager role that most dealers don't have — and why one person owning the car from auction to front line changes everything
How a push-pull system between an inspector and an inventory manager eliminated bloated ROs without a single increase in comebacks or customer complaints
What comeback cost per car sold should actually look like — and what it tells you when you're over-reconning or under-reconning
Why flat rate techs will manage you if you don't manage them first — and how to know if your salaried techs are actually worth what you're paying
If you're a buy here pay here or independent dealer who suspects your recon shop is costing you more than it should — but you don't have the numbers to prove it yet — this one will change the way you look at your shop floor.
Support the businesses that support the podcast:
Buckeye Risk Services - Reinsurance and wealth strategies for independent dealers. https://theindependentdealer.com/buckeye
Blytz - BHPH payment processing with fast funding and text-to-pay. https://theindependentdealer.com/blytz
Ituran GPS - Asset protection and customer management for BHPH and retail dealers.
https://theindependentdealer.com/ituran
Follow & Connect:
Website: www.theindependentdealer.com
Facebook Group: @independentautogroup
Luke Godwin: @lukegodwin
Jeff Watson: /sendtojeffw
Like, subscribe, and share this with a dealer who needs to hear it.
Filter:
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Technical
Too Afraid to Ask
Term
RO
"I love that, hours per RO, anybody? Can anybody tell me how many hours per RO, [362.6s] recon you have right now?"
“RO” is a dealer paperwork term. It generally means the job sheet that lists what work a car needs and helps track the time/cost for that job.
In dealer operations, “RO” usually means a repair order (or reconditioning order). It’s the internal document that tracks the work to be done on a specific vehicle and how long it takes.
Term
recon
"Can anybody tell me how many hours per RO, [362.6s] recon you have right now? [366.9s] Nobody?"
“Recon” means getting a used car ready to sell. It’s the shop work that fixes issues and makes the car presentable and sale-ready.
“Recon” is short for reconditioning—work done to prepare a used vehicle for sale. In this context, they’re discussing how many labor hours it takes per repair order.
Term
body work
"I can tell you historically we are 5.6 hours. [386.3s] That does not include body work. [387.9s] Who in here does body work for recon?"
“Body work” is the repair work on the car’s outer parts—like fixing dents and repainting. It’s different from other mechanical reconditioning and can take a lot more time.
“Body work” refers to collision/appearance repairs like dents, panels, and paint correction. They note that their recon hours metric does not include body work, implying it can be a separate, often larger labor category.
Company
Brenner car credit
"So, this is my friend Sam Brenner. [404.0s] He owns Brenner car credit in Pennsylvania. [409.0s] Harrisburg?"
“Brenner car credit” is the company Sam Brenner runs. They’re using it as an example of how many hours their shop spends on reconditioning cars.
“Brenner car credit” is the dealer/financing business the speaker’s friend Sam Brenner owns. The discussion uses it to ground the recon labor-hour benchmarking in a real operator’s network.
Place
Harrisburg
"He owns Brenner car credit in Pennsylvania. [409.0s] Harrisburg? [409.8s] Harrisburg area."
Harrisburg is a city in Pennsylvania. They’re saying the dealer is near that area, so it gives you a sense of where the business is located.
Harrisburg is the capital city of Pennsylvania, and the “Harrisburg area” is being used to describe where the dealer operates. It’s a geographic reference for the business’s local footprint.
Term
final drive
"for the process to do the final drive. [1296.0s] A sales person doing it is really good"
The final drive is the drivetrain’s last set of gears. It helps the car move with the right amount of pulling power and speed.
The final drive is the last gear reduction in a car’s drivetrain, typically involving the differential and ring-and-pinion gears. It multiplies torque and helps determine how fast the car can go at a given engine speed.
Term
Check engine light
"[1323.8s] They'll still come on. [1325.3s] Check engine light will still come on [1326.6s] as soon as you sell it, as soon as it sits a lot. [1329.7s] Why does that happen, Mark?"
The check engine light is a warning that the car’s computer noticed a problem. Sometimes it turns on after the car sits because the computer runs tests and finds an issue.
The check engine light is the dashboard warning that the car’s engine management system has detected a fault. It can come on after the car sits, after a change in conditions, or when a sensor/monitor runs and finds something out of spec.
Term
electronic check-in process
"Who out here uses a electronic check-in process where they're? What software are you using, Andres?"
An electronic check-in process is how a shop records a car when it arrives using software. It usually starts the inspection and keeps everything organized for the next steps.
An “electronic check-in process” is the digital intake workflow used when a car arrives at a dealer or shop. It typically includes logging the vehicle, starting the inspection, and capturing standardized notes so the recon team can work from the same baseline each time.
Term
digital inspections
"OK, all of these, these softwares have built-in digital inspections, right? And that's what I encourage you to use."
Digital inspections mean checking a car’s condition using a computer or app instead of a paper checklist. It helps the shop record the same kind of information every time.
“Digital inspections” are vehicle condition checklists done using software instead of paper forms. In a dealer or recon workflow, they standardize what gets recorded (damage, wear, and notes) and can tie the results to the car’s check-in process.
Term
tire depths
"You walk to the right front wheel and you start there with your tire depths. That's how specific I want you to be."
Tire depth is how much tread is left on the tires. Shops measure it because it affects grip and helps decide what needs to be done before selling the car.
“Tire depths” refers to measuring tread depth on the tires, usually with a gauge. Dealers track it because tread wear affects traction, safety, and how much value the car has for resale or reconditioning decisions.
Term
performance improvement plan
"Super important. [2575.9s] A performance improvement plan. [2578.7s] If your tech is not producing the right amount of hours,"
A “performance improvement plan” is a formal plan a workplace uses when someone isn’t meeting expectations. In this episode, it’s about getting technicians to improve how much work they produce and how they’re scheduled on jobs.
A “performance improvement plan” (PIP) is a structured process used by employers to address underperformance. Here, it’s being applied to technicians’ productivity—specifically whether they’re generating the right number of billable hours and being assigned to the right jobs.
Term
tech
"[2575.9s] A performance improvement plan. [2578.7s] If your tech is not producing the right amount of hours, [2581.6s] we may have them on the wrong jobs."
“Tech” here means the mechanic or repair technician working in the shop. They’re being evaluated based on how much work they’re producing and what jobs they’re assigned to.
In a dealer service context, “tech” is shorthand for technician—someone working on repairs and diagnostics. The discussion ties technician output to job assignment and productivity tracking (hours produced).
Concept
billable hours
"[2575.9s] A performance improvement plan. [2578.7s] If your tech is not producing the right amount of hours, [2581.6s] we may have them on the wrong jobs."
“Billable hours” are the labor hours a shop charges to a customer or warranty for work performed. The host is using billable-hour output as a proxy for whether a technician is effectively assigned and producing the expected amount of work.
Term RO
1 mention · 06:44Term recon
1 mention · 06:47Term body work
1 mention · 07:13Company Brenner car credit
1 mention · 07:31Place Harrisburg
1 mention · 07:36Term final drive
1 mention · 22:19Term Check engine light
1 mention · 22:52Term electronic check-in process
1 mention · 28:51Term digital inspections
1 mention · 29:12Term tire depths
1 mention · 29:42Term performance improvement plan
1 mention · 43:42Term tech
1 mention · 43:45Concept billable hours
1 mention · 43:45
Select text to request an explanation
The thing here is, if y'all were not getting the amount
of cars y'all went through recon,
what would be your first idea?
I need to hire more techs, right?
That's what Sam's organization was telling Sam.
We need to hire more techs.
Well, maybe you do, maybe you don't.
But he needed to get 100 cars ready a month.
When I showed up, the front line was almost nonexistent.
And there's stores where he didn't have any cars on the lot.
Just because you're spending a lot of money
and you got a lot of hours in a recon process,
doesn't mean you're getting a better car.
Hello and welcome to the independent dealer podcast.
Luke, how you doing, buddy?
I'm good. How are you, Jeffrey?
Good, good, good.
It's been a couple of weeks,
but we've recovered from Buy Hair, Pay Hair United.
And we've let our producers recover
and get all of the content put together
to put out today's episode.
Ton of content we get out there.
And I'm so happy to go place like that
and do it, it's so much fun.
But today, what we have is a session,
I did Jeff and actually maybe in the future
we're gonna do the session you did because it was great.
Yeah, yeah.
And I think maybe next week
or the week after we'll do mine.
This'll be Luke's or maybe vice versa.
Maybe mine came out before yours.
We don't know how they're gonna do it.
We don't know.
But the beauty is that you didn't have to go to Vegas.
So unfortunately, we kind of undercut our own selves, right?
Luke, we tell everyone to go to Vegas to see us
and listen to us.
And then we end up publishing the podcasts.
We have the sessions on the podcast
and everyone's like, well, great.
I didn't have to spend the money on Vegas.
But what if three,
even the people that were there in Vegas
that listened to it,
they weren't able to record it, Jeff.
So this gives it posterity and it can go forever.
Big word, right?
Yeah.
And you gotta keep, yeah, yeah.
It just never gets away from you.
Never gets away.
So this one is titled where recon goes sideways
and recon, everybody battles it, Jeff.
I battle it, you battle it.
There's no due out there that it tells me.
Man, I got it.
I got it nailed down.
There's no problem at all.
Yeah. It's a problem.
So you can under recon, you can over recon.
You can spend too many hours per car.
You can do all kinds of different things.
And this one kind of goes to a real life experience
that I consulted on with my friend, Sam Brenner.
And we kind of discussed what happened at his store,
how we fixed it and where people out there
can maybe not do the same things that were done.
Yeah. And speaking of going sideways,
I think at one point in the session, you went sideways.
So I don't know if they're gonna keep that blooper
in there or not, but that'll be interesting.
So if you can spot the point
where Lou gets politically incorrect,
send us an email, let us know that you found it.
Thanks, Jeffrey.
All right guys, here's the episode.
If you can't attend, send somebody.
How do you know what you don't know?
Are you investing in your people?
Are you rolling them?
That's a great avenue to get with Lou.
He is an industry expert and I'm super excited
that we get to start the day with knowledge.
You said wherever you are.
All right, thanks.
The crowd goes, wow, we love it.
That's good.
Everyone knows.
Yeah, I mean, I hope you, hopefully you all know me.
This, I do not like this mic, is it all right?
Turn it on?
It's on, it's on, hello.
I gotta turn off the leg turn
if you're gonna stand there, there's two mics.
Well, I'm not gonna stand here.
So I'll be down here.
I like to walk around.
Okay, you're here because you possibly have
a recon problem.
Can y'all hear me with this mic or is it just my voice?
I'm helping you.
You're doing great.
Okay, all right.
So I'm gonna put that down.
Who in here has a recon problem, they think?
Everybody has a recon problem.
That's probably the right answer.
Recon problems are a thorn in everybody's side.
You think, hey, you know what, I will open my own shop
because if I open my own shop,
I can get recon done so much quicker.
There might be some truth to that
once you get to the right size.
It also may be a hindrance.
As a dealer who's been, our family's been,
I'm third generation, we've been in business
since the 60s and this iteration says 85.
So 41 years, kind of within the same location
that we are now.
Ford store, close the Ford store,
open the Buy Here, Pay Here store.
We went 20 years in the Buy Here, Pay Here business
without a shop.
We made it work by, that's a bit of a story,
that's a bit of a lie.
Without a true recon facility for a long time,
then we had a recon facility for the last 15 or 18 years.
But I found it easier when I didn't have a recon facility.
It was just an easier business to run.
Who in here feels like that?
Who in here doesn't have a recon facility?
Who in here has a recon facility?
Okay, was your life easier or harder
after you got your recon facility?
Harder, harder.
A lot of times it's the hardest portion of your business
is recon, but the problem is this,
is recon is the most important part of your business.
Recon can affect many, many things
and that's what we're here to talk about today.
We're gonna talk about what we track.
Who in here wants to talk about what they track
in their recon apartment right now?
Just give me one metric, just scream it out.
Efficiency.
Efficiency, tech efficiency
or just recon efficiency as a whole.
Yeah, love it.
Scream something else out.
Parsh costs, I love that.
What else?
I love that, hours per RO, anybody?
Can anybody tell me how many hours per RO,
recon you have right now?
Nobody?
Oh, Joy?
Two and a half, three and a half hours,
which is really, really low.
Who else?
In the sixes.
There we go, that's a more normal number.
I can tell you historically we are 5.6 hours.
That does not include body work.
Who in here does body work for recon?
11 and a half, 234 maybe?
Okay, that's a whole nother animal
that we're not gonna even get into.
So, this is my friend Sam Brenner.
He owns Brenner car credit in Pennsylvania.
Harrisburg?
Harrisburg area.
Near Harrisburg, how many locations?
We have five stores.
Five locations?
One centralized recondition facility.
One centralized recondition facility.
Probably one of the best facilities I've seen
when it comes to shop cleanliness,
technicians, bays, he had it all,
but he still had a problem.
They were in the new car business for how many years?
Well, it's over a hundred.
We started in 1921, fourth gen.
And your car, for those that times,
in 1990, we finally got out of the car.
And why that's relevant is because my shop
was a former Chevy Ford dealership.
And a lot of the crew were the same people
who worked there, what was a new car dealership.
And they had a mentality,
you had some of the key plans
that worked for new car dealerships.
But all of this is that we're all in here by our bay.
So, I walk into his shop and it's set up
exactly like I wish my shop was set up.
Clean, it's right off the building.
You have a service drive.
I mean, it's just perfect.
And they knew how to do service work,
but he had a problem.
So, recon problems don't start big, right?
It's kind of like the snowball
that Tim talked about yesterday.
It just starts festering and rolling.
And the reason this happens
is because you have inconsistent inspections.
Who in here currently has a inspection sheet
that they do for every car?
Most hands go up, which is very good.
Who does not?
Okay, so either all of you have one or none of you don't.
But see, one guy back there goes, no, we don't.
I like that.
So again, who does not have an inspection process or sheet?
Okay, there's more.
That's what I thought.
All right.
Who in here lets their technicians
develop the process on each car?
One.
I get it.
So, Joe's being real.
Joe's like, oh, my dad does it.
I like that.
Okay, but that leads to disasters.
No clear approval process for ROs.
Who right now approves each RO?
Just yell it out.
Who?
You?
Litae.
Litae.
There might be a problem.
I just thought it was reconditioning supervisor.
I love this.
This is what you need.
Reconditioning supervisor.
Also, I call it an internal inventory manager.
Over $1,600 you approve.
Over $1,600 you approve.
So you let techs just run it up
all the way to $1,600 each time.
Manager?
Okay.
Cause let me tell you this.
If you don't give techs guidelines,
they're gonna get you.
And I don't purpose this just the way they're made.
Who else has someone else that might approve on our,
if any of y'all say salespeople, I'ma lose my mind.
Service advisor, you let salespeople?
I'm the center.
Yeah, but you're also, you're a part,
you're owner, you're family.
I had two or three shots,
but I personally manic and my other salesperson
has shots, you mess this,
who's been here for 20 years.
He's those two.
I want you to stop that.
I want you to stop that.
But that's all right, we're gonna get to that.
So if you don't have clear approvals
and you have multiple shops,
what are your standards?
Does everybody have a clear standard of recon?
Or is it just in your mind?
It's in your mind probably.
Okay.
Sam, what was going on in your store?
So we had a lot of techs,
we had a dozen techs,
we got the days and got the lifts.
And we were only able to get about 65,
thank you, about 65 bars out a lot.
And that was, it was chillin' us
because we sell a good bit more of that.
And I ain't idle had a ton,
I would never really been in the shop.
Like working shop, I don't know how to start a wrench,
it's not my job, I hope it never becomes my job.
So it's hard for me to surprise the guys
in a real granular way.
And I didn't, I had no idea of what the breakdown was
coming from, I have to tell me,
from my own organization, tell me hi or text.
I knew that couldn't be answered
because I looked at some other organizations,
how they were stopped, what they were putting out.
Then I started digging into some of the metrics.
And the biggest thing to jump out in was ours for aro.
Now, I'm including detail,
I'm including everything you can include,
but it was 20 kL of per aro or re-kai,
which was, I soon realized I was gonna start
looking at that metrics, metric was absurd.
The amount of money we were spending per aro,
I wanna say it was like 22 months or, yeah.
It was a big number.
And the thing here is,
if y'all are not getting the amount of cars y'all
all through recon, what would be your first idea?
I need to hire more texts, right?
So that was what, that's what Sam's organization
was telling Sam, we need to hire more texts.
Well, maybe you do, maybe you don't.
But he needed to get 100 cars ready a month.
When I showed up, the front line was almost nonexistent.
And there's stores where he didn't have any cars on the lot,
so.
83 cars, sell them 85, 95 cars a month
with 23 and a little per that,
345 times a month in your summers.
Which that can be a good thing,
but it also can be a bad thing
because what it was doing, it was costing him issues,
costing him sales.
But it also was creating problems in your store.
Just because you're spending a lot of money
and you got a lot of hours in a recon process,
doesn't mean you're getting a better car or a good car.
Sam, what was going on in the process
where you had 22 hours of labor time
and $2,400 or so in recon expense?
You know, that wasn't good for business,
it wasn't good for cash flow, but what fit.
And I should have predicted this was to create a lock jamp.
You know, my pipeline was so jammed up
that I couldn't take care of warranty vehicles
in a fast way.
I couldn't take care of accounts
with mechanical issues in a fast way.
And we had to completely shut off.
You start or we've got a good amount of retail,
Southside servers.
You've had big bait in that small town for a long time.
People come for their just regular reign
and to art lighter-fated customers.
And so all that was shut off
and we were losing a lot of money in the show.
Yeah, and the problem is,
is the car they thought they were producing,
they weren't producing.
So it was creating collection problems.
It goes, what's the first thing that happens
and buy here, pay here?
When a customer's car doesn't run.
They don't pay, right?
So we're spending too much on recon.
We're trying to get the customer the best car
because that's what we figure we're doing, right?
But then all of a sudden it breaks down.
They don't pay, you got cash flow issues.
The customer experience goes just down the toilet, right?
And next thing you know, you're getting bad, what?
Reviews, right?
Or AG complaints.
Or AG complaints.
So that's a big worry, right?
Nobody wants to hear from the attorney general, right?
Who in here has ever heard from their attorney general
or from the Department of Consumer Affairs in their state?
Ever, ever.
How many has ever heard from it?
I mean, most people have, right?
And unfortunately it's gonna happen.
But what you can't have is it consistently happen.
And if you did your due diligence
and got everything done properly,
you might get one a year, right?
If you're selling 40 cars a month, you might get one a year.
Or if you're selling 60 cars a month,
let's just say you get one and a half year.
But when all of a sudden you're getting one a month,
we got a problem, right?
We gotta get to the bottom of it.
And what happens is when one happens,
then all of a sudden two happens,
then three happens, then four happens.
Because it kinda, I don't know,
maybe they start to search you out.
And we don't want, we want to be invisible to agencies
when governing agencies because if we're invisible,
then we don't have to worry about it.
But you start getting bad reviews.
If you don't think your AG looks at car reviews,
car dealership, Google reviews,
you're mistaken yourself, okay?
They wanna find who is the bad player in town
and how can we get them out of business?
Where does it go sideways?
And we've kinda talked about this.
The biggest way it goes sideways
is when you don't have a process.
And some of you say you have a process.
Who in here feels like they have a good process?
All right, what's the first thing you do in your process?
I read you there?
Yes, sir.
Check the car.
We do an inspection sheet.
In every car.
Okay, how far does, he said he checks the car
and he does an inspection sheet on the car.
How far is the car driven during that,
that original inspection sheet?
10 miles.
10 miles.
Anybody here thinks 10 miles is enough?
No, it's not, right?
Okay.
What's the second step in the process?
He read this.
Ha ha, got you on the spot now.
Tap rings and endos will fall on inspection line,
checks everything, seatbelts, windows, everything
on the car, breaking the sheet with a fan rod
and that's what we're gonna say.
Is one person doing that job?
I would appreciate it if our owner built it,
but there's three times.
Three times, and each of those three texts
has the ability to do the inspection.
Two of them, yeah.
Two of them he trusts, but he said three of them do it.
Okay.
Who else has a good process in here?
Who wants to talk?
What's the next step?
Or what's your first step?
Service manager checks the car.
Yeah, that seems like a lot.
Oh, and then he writes up what he wants done.
We change up oil, battery and most tires on every car
that comes in, and unless the tires are great,
you know, come in from where you bought them.
Then they spend, so they charge an hour for the inspections,
they average six and a half hours for recon
and a dollar amount for parts,
and then they, an hour for the DJ.
So you say you change tires on most every car.
Is there a 532, sorry, is there a 30 seconds rule
in your store?
Is there a what?
A 30 second, like how, tire depth?
Good question.
See, it's a good question.
Sir, family would know.
77 30 seconds.
That's, I mean, you're giving somebody a really good tire.
All right.
That's three 30 seconds.
Is it on every car?
Every car, I love that.
Ours is five 30 seconds.
So I know this, and we measure the outside of the tire,
the center of the tire and the inside of the tire
on every tire.
Who does, who goes to that level?
Every tire.
Okay.
But what I'm saying is there's so many different processes.
And somebody might say seven 30 seconds is good.
Somebody might say three 30 seconds is good.
I don't know.
But I know that some state laws say five 30 seconds.
Some state laws say three 30 seconds, right?
As long as you're doing it consistently, it's okay.
Cause it's a process.
Hey, sorry to break into real quick,
but make sure you guys know about Buckeye.
Long time, awesome sponsor of the podcast
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I can't thank them enough for teaching me so much
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My customers have options of warranties
and service contracts, gap.
I guess it's just been great, Jeff.
It's absolutely been a great way for me to build wealth,
put away some money.
So if you are a buyer, pay here, lease here, pay here
or retail dealer, it works for all dealers.
You can set up a reinsurance company.
You can ensure your own stop giving money
to those third party providers
that aren't going to cover your stuff anyways.
Keep it in house, call the guys and girls over at Buckeye,
risk services and get set up ASAP.
Who in here has an internal inventory manager
or one person that follows the car from cradle to grave?
And cradle would be bonnet, grave would be celibate.
One person that's responsible for the process, anybody?
Come on, nobody?
I got one.
You got one now, don't you?
Yeah.
Okay.
We talked about some approval processes earlier.
Anybody have one person that approves every recon R.A.?
One person.
Except the acceptors, he has a limit.
He has a limit, okay.
Maybe two or three of y'all only?
45 okay.
That's probably the most important thing
because you get consistency, right?
That person, do they track data?
Who tracks recon data in your dealership?
Joe does, Joey does, he does, you do.
Service manager, who has service manager tracking that data?
You need to, or as an owner, you need to do it.
Who in here has a final drive after recon's been done?
We do, we do one hour or 60 months.
I love this, one hour or 60 miles.
And I hope more of you have a final drive
because only about a half of y'all raised your hand.
You can complete a cycle.
All monitors are passed, right?
Is the sales person doing that drive okay or?
Could be, yeah.
I don't recommend the person that is responsible
for the process to do the final drive.
A sales person doing it is really good
because sometimes sales people find things
that we don't see, right?
Because they're the ones selling it,
that's actually not bad.
Our three managers have to drive
a different car home every day.
And none of them live close to my dealership.
So they're probably close to 40 miles.
And it's probably been driven more than that since then,
okay?
This is the things that go into a good process.
They'll still come on.
Check engine light will still come on
as soon as you sell it, as soon as it sits a lot.
Why does that happen, Mark?
Nobody knows, right?
You've driven the car.
The worst is when you have your personal car
that you've driven for three years
and then you say it's time to sell it.
Check engine light has never been on,
you sit on it a lot and the check engine light comes on.
Who's ever had that happen?
We call that lot rod.
A lot, lot rod.
No, this is, I've driven it every day for three years.
But as soon as I put it on my lot, it comes on.
I don't know how that happens, but it does.
Ultimately, if you do not have one person handling all this,
you don't have a process.
You're not tracking data and there's no final drive.
You got chaos.
There's no direction.
And when you don't have any direction,
you just have chaos.
And that's what happens in the process.
Talk about the process before we got there, Sam.
Yeah, sure.
So I have a lot of flat rate guys.
And you know, you really have to manage your flat rate guys
or they will end up managing you.
It costs you a lot of loan, especially if they're
keeping your efficiency, your probability.
And the data has sales for a service manager
and my two riders in my parts guy.
And they were all over the top, gross, the gross of the show.
So that was kind of like a recipe for disaster.
It wanted every RO to be as big as possible.
It wanted to fix as much as possible.
And their objections were not aligned by patents.
They weren't really allowed to buy it.
And I lacked the ability to go in and look at an order
where you share your knowledge and say,
get rid of this, this.
You want me to talk about what we did differently?
No, we'll say that for a second.
Who out here has flat rate techs?
Who pays their techs flat rate?
Anybody?
Flag rate, flat rate, couple people.
Who has salary techs?
OK, can you get the same problems with salary techs?
OK, are you counting every hour that's
turned by your salaried techs?
Anybody?
Jordan is.
Michael is.
I've seen Michael's board.
He's doing it for sure.
Do you know how efficient your shop is, those paying salary?
Kind of, sort of, affordable.
It's horrible.
What is it?
Well, I don't know.
I just know what to add.
OK.
And a lot of us go, it's terrible.
But we don't know how terrible it is.
If you're below 80%, it's terrible.
So what are we going to do?
We're going to figure out the salary techs.
They work 40 hours a week.
How many hours should they turn?
Everybody said out loud.
40, right?
Are they turning 40?
Do you have a way to measure it?
Any of you?
Man, y'all are a sad crowd this morning.
For some you're talking about the job, suit, papers.
Yeah.
So at 80%, what is that?
35 hours or 30 hours, whatever that number is.
Not good at math this early.
32, 32 hours.
So that's at the bare minimum.
If you have techs in your shop that you're paying 40 hour
work week, I expect them to make 40 hours turn labor, right?
The problem is this.
What on average are people paying their salary techs per hour?
Sir, Saturday.
How much?
Oh, what we're paying?
What are you paying?
I pay $1.29.
I got no one at 20.
OK, $2,924.
Who's around that number?
$2,924.
There you go.
$3,540.
$3,540.
It kind of depends on where you are and what level techs you
have.
Is that average, right?
So let's just say it's $30 an hour.
On a 40 hour work week, you're paying them $1,200, right?
Is that right?
$1,200.
What if they are only turning 20 hours?
How much are you paying?
You're paying a lot, right?
You're still paying them $1,200, but you're
getting production of half of that.
So you really could go to another store or shop
and pay $2,400 every week if you're getting that work done.
So what I want you to see is you've
got to know these numbers.
How effective are the techs I have?
In flat rate, those of you using flat rate, which I think
is probably the best method, yes or no?
I'll say that the downside of that is when you're hiring.
You've got to bump your rate up if you're
going to play a flat rate.
He's guys, well, full.
So what he's saying is if you're going to hire flat rate techs
and set them costing you $30 an hour,
it might cost you $40 to $50 an hour, right?
But what if the same guy is turning 40 hours a week compared
to the one you're paying $30 salary is turning 20 hours a week,
you're really paying that guy $60 an hour, OK?
This is what happens.
If we're not measuring, we have to measure that.
And the way we measure, what am I doing here?
OK, what takes us?
I got awful intention.
One owner of the process, like I talked about,
internal inventory manager, you need this one standard.
And this is super easy.
Who out here uses a electronic check-in process where they're?
What software are you using, Andres?
Omnic.
Who uses Omnic?
There's got to be many people out here, right?
Tech metric, some hands are going up, shop, monkey.
OK, all of these, these softwares
have built-in digital inspections, right?
And that's what I encourage you to use.
If you're not that sophisticated, that's fine.
But I want to check-in sheet.
Every car that comes in, the process
is exactly the same every time.
Like I said, you go out to one of our cars
in the inspection process, we know as soon as it comes in,
you're going to turn the wheel all the way to the right.
This is how specific it is.
You turn the wheel all the way to the right.
That way you can get, you walk to the right front wheel
and you start there with your tire depths.
That's how specific I want you to be.
I want you to write it down.
Outside was 7-30 seconds, the inside was 3-30 seconds,
and the middle was 5-30 seconds.
Well, we're going to replace that tire, why?
Because there's uneven tread wear
and it's below our 5-30 seconds specs.
And also, when we note that, we're going to note
that there wasn't uneven tire wear,
so we need to check the alignment.
This is how specific we have to be.
It's one standard, one approval path.
That doesn't mean two or three different sales people
have the ability to approve it.
Only one person does.
One final check.
We're going to drive it, we're going to inspect it,
we're going to write it all down, we're going to order parts,
we're going to fix it, then we're going to drive it,
then we're going to send it to detail,
then we're going to have our final drive, okay?
And one data dashboard for recon.
And what are we going to track?
These things we're going to track,
but we'll come back in a second.
How do we fix your shop?
Okay, so the biggest thing we did was
between inspector and unit tour.
We took a technician who was very bright,
very smart technician,
but he wasn't the most efficient.
You know, he didn't turn past hours,
but he really knew cars, he knew the diagos,
segmented or anything like that.
So we checked and then she did the tour manager
and then his job description was,
every car that comes in, he rides around,
I think a quarter to five miles, so fuck that.
And he's got a title, an iPad and it's taking voice notes.
And he's commenting on what is noticing about the car.
It pulls a little this way,
might need a new bearing,
maybe the rotors are good,
the race is changing.
He would just kind of, he had a sheet,
but they would also be additional notes.
Yet the car grows to inspire.
And we already had one guy do all our inspections
at the sanctuary, but he's a very good inspector.
And he was the long years of putting
who was building his real big tickets.
And so those two guys, you know,
I have a great culture in my shop,
I was a little exposed to the right thing,
but he was kind of shopping well first
that his inspection is that the arrows
he was putting together, we're getting picked apart
because we gave the hip into word manager,
the guy who was doing the initial check right,
V took power over those inspections
and the arrows that were being generated
based on those inspections.
And at first it might have been a little adversary,
which is absolutely what we wanted.
We wanted that challenge there,
but now they figured it out and it worked together.
He's not trying to put unnecessary stuff on there.
And then to your managers,
not trying to take it for the reason,
they're really working together to keep these,
these things concise.
And then, you know, it goes out for diagonal care
to one of the other thought technicians we employed.
And that sort of push pull results in the median truck
eventually we would drop even more,
but that very immediate within the first 30 days,
I will say it took about eight hours on our car.
And did you have any customer,
did you get more customer complaints
because you took, took those eight hours off?
No, no, we track comebacks.
Everyone in here should be tracking comebacks.
We did not see it every recent comebacks.
And that's, you're spending at that point,
let's just say your internal rate at my shop is $105.
So if you're taking,
taking a hundred out of eight hours off immediately,
you're saving $800 a recon immediately
and you're not, you're not increasing problems
and you're not decreasing quality, right?
It was all about the kind of money parts.
It was a little hour today,
but it was really like romantically occupied parts.
It wasn't much to be done there.
It was time was how these arrows are big.
That was the big thing for us.
Yeah.
And so you went for about 22 to 24 hours down to 12,
pretty quickly.
Yeah.
And I think we had to, had an eye.
I mean, that's, you know,
these are the things you do by putting processes in place.
Jordan.
I do it on a spreadsheet.
I was at a 20 group this past weekend
and that was one of our homework problems.
It's, it needs to be tracked
and the spreadsheet is the best way to do it.
In my opinion, there might be,
there might be software out there.
I don't know of anything,
but as soon as the car comes back,
what we want to know is first of all,
was the problem noted in an inspection.
Okay.
Because sometimes they are,
and sometimes we decided that we just weren't going to fix it.
Right.
It's not a safety problem.
It's just maybe a cosmetic something
or, or it was noted as a check engine light.
Our tech decided it was X.
We put Y on it and we still had the problem again,
but it didn't show up for another 100 miles.
Right.
So we want to know, was it,
was it noted on the inspection?
Total cost of that comeback,
total ROs for the month on those comeback.
And then what we do is we look at per car sold.
What does that comeback look like?
And you probably need to be around $100 per car sold or less.
If you're, if you're zero, you might be over reconning.
If you're 300, you're under reconning.
Right.
But I also know a guy who's spending $3,000 per car and recon
and his comeback is $330 per car sold.
We're still trying to figure that one out.
It just happened sometimes.
What's up, Andres?
Check engine.
It's all the best.
Check engine light.
I'd say it works.
Does that mean she could go back to stopters?
So.
Our technician and probably will build up people's expectations.
They go to the drive a car and they might hear that,
that quote.
So that,
Oh, that's just,
That's just what I mean.
That's what I mean.
That's right.
That's right.
As your customers, if there anything like my customer,
you know, they hear that quote and they want to prepare it.
Because some of the need to be flexed.
Our technician invited stuff.
Yeah.
Well, you know, it's not going to kill them,
but some of it should have been replaced.
We had our service to find the drive car.
Yep.
I totally agree there.
Okay.
These are the things we want to talk about what we need to track.
Time to line.
Who knows their time to line.
Scream it out right now.
15 days.
Seven.
20.
20.
Solders playing.
Eight hours.
Time to line.
Was everybody know what time to line means?
I love that.
Eight hours or eight months.
Time to line is the time you buy the car to the time it gets to your
frontline.
Okay.
They will.
That's right.
A very good point.
They'll cherry pick the easy ones.
It should be first car,
bolt,
first car in.
Okay.
You should not let someone decide what car goes in next.
First car,
bolt,
first car in.
Second car,
bolt,
second car in.
Look,
what do you think of a good comeback?
It's such a big nip.
The high.
It's such a big nip.
I think 10% is a good number.
Okay.
50% is a bad number.
So it's somewhere in there.
Hey guys,
real quick to interrupt the episode and make sure you know about a great
sponsor and supporter of the podcast,
Blitz.
Blitz.
I love it,
Jeff.
That is kind of like goes from the Facebook to just Facebook.
You're going to reuse that joke, aren't you?
It was funny.
Y'all will get that reference in a future episode,
but Blitz has changed their name a little bit because they're launching more
products.
You know,
they're not just a payment platform,
not just a processor,
but they're also a collections platform and analytics platform.
And who knows what else Robin and the team are going to get into,
but they've got the technology.
They've got the know how to help dealers in a lot of aspects of their
business.
Yeah.
Data is hard to process from just everyday dealers,
but Blitz is going to harness that.
They're going to harness AI and they're going to combine that with
payment platforms and payment process,
which is amazing.
So if you need a payment processor,
you need a friend in the industry or a partner,
Blitz is the only company I would recommend.
Okay.
There's nothing worse than selling a car this morning at 10 a.m.
and seeing it tomorrow morning at 10 a.m.
Right?
Nothing worse,
but it happens.
Unfortunately.
I feel about setting a goal as far as how many business we want to get out
from the shop this month and who would enjoy that bonus.
Would that help?
I want to take some of the cherry picking we're going to see.
I think it needs to be bonus.
Your inventory manager needs to have particulars in place.
Their pay structure should be based on these five metrics.
Time to line costs per unit.
Somebody said $1,600, I think.
And then somebody else has to approve it.
There should be a metric.
I would say let's call it $1,200 and anything over $1,200 and we
start to have problems.
Either the buyer is the problem or the recon is the problem, right?
You need to worry about hours per RO.
We talked about that earlier.
It's super, super important.
You need to track that.
You need to know about heart.
Go back if you can to start tracking that.
Anything under six hours might be too little.
Anything over 12 is too much.
Okay.
Parts cost per RO.
This can be a big problem.
And you really need to look at it.
Track it because you may have, I know none of your service
managers do this, but you may have a service manager getting
kicked back from one of the parts stores that you may not know
about.
And so they consistently use a certain part store.
Be very aware of things like that.
They're shopping.
When I got to, when I had to Sam's place, they were consistently
getting the parts from the same supplier because the integration
within their service software was clunky.
Who uses parts tech in here?
Does anybody know what parts tech is?
No.
Parts tech integrates into most softwares.
And what it does is it brings up all your local distributors.
Every time you click on a part, it's going to bring up all the
parts distributors.
And it'll tell you who's got the best price, who has it in stock.
And you use that to make sure you're sourcing the right part.
Go to your parts companies and get them down on price.
Because it's super, super important.
And track post-sell repair comebacks.
Spreadsheets, super easy, y'all.
Do it.
Track it.
Yes, sir.
Eric, comment on the parts.
We've, we did buy a lot of parts on the Amazon.
And it beats local parts houses there.
And we've had good luck.
I mean, the quality's been buying.
It's probably the same part as you're getting from the parts warehouse.
I mean, it's a little slower.
It's a little slower.
It's a huge, different surprise.
And if you build using eBay or Amazon into your recon process to account
for how many days it takes to get them there, then, then build that into your process.
Yes, sir.
Do you say 12 hours per hour?
That would be my max.
Say, who's the detail?
It depends on how your shop's set up.
But do you only talk about how many hours do you get per detail?
So, on average, we would give four hours per detail.
And no, that's one of those things you can put in or put out of that.
Just know what it is.
Recon isn't where you, you fix cars.
It's where you control your dealership.
Because everything can go haywire if you don't have a good process in place.
We've got just maybe a minute or two for questions and I can stick around afterwards.
How do you mix and repose this priori, Mr. Kit White?
This is a great question.
How do we mix and repose?
You mix it in.
As soon as it's reposed, it's like you just bought it at the auction.
Because it's cash.
It's exactly the same as the car you bought at the auction.
Alright.
Jake.
Do you drop cars off the lock?
Or do you need that lock?
I'm a pre-Madonna, no.
But some of you probably should.
It depends.
For years, I did.
For years, I drove a different car home almost every night.
But I got to the point in my life that I just wouldn't do it anymore.
You drop different cars.
And that's exactly what you should do.
The ones that are going into detail.
Yep.
Post repair.
Any time you can drive a car, you should do it.
As owners, you should really do it.
Because you get a feeling of what you're buying and what you're reconning.
Super important.
A performance improvement plan.
If your tech is not producing the right amount of hours,
we may have them on the wrong jobs.
You may think you hire an A-Tech when you hire a C-Tech.
So you got to move things around.
You got to make sure they're not on their phone.
You got to prod them.
These are the things you have to get done.
Your high, high end techs, if they're doing a lot of diagnosis,
their hours are not going to look as good.
But if you have a parts hanger, they should be 100% to 120% to 140% effect.
Okay, one last question, Mark.
Flat rate or hourly?
That's the best way to go.
This is an age old question.
If you're able to manage your techs really well,
salary is fine.
For years I said salary was the only way to make it happen.
I think I've moved to flat rate.
Or a hybrid between the two.
Which you can create a hybrid that gives them salary
because some people don't want to work without a salary.
To give them salary, then a bonus on the hours they hit.
So that might be the best way.
I don't know.
Are we done?
We have a minute?
What do we have?
We're out of time.
We're out of time.
I will stick around though.
Hey, listen guys, if you don't have loops contacting information,
you guys need to have these two.
You can be able to ask these guys questions.
So when you leave here then, if you don't have it,
give with loop.
Educate yourselves.
Thank you guys.
Let's give it up for them.
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