SuperSpark features a double-whammy this month as he addresses two issues received from dealers: high aftersales accounts and alternative warranty fund claims.

Agitated Alden from Acornhoek wrote to SuperSpark to complaining about high aftersales accounts, while Worried Warren from Warden raised the issue of claims being made against alternative warranty funds.

SuperSpark responds:

Dear Agitated and Worried,

During my years in the motor retail industry I have purchased many vehicles from customers and wholesalers - I therefore have a fair bit of experience. Some wanted to trade in their vehicle or sell the vehicle out of hand.

During my fly-in visits to dealers, I have often asked them about their purchasing processes on specific vehicles – and have been amazed at Dealers’ purchasing and trading processes when buying stock!

A shocking 85% of Dealers do not use even a basic appraisal or similar document to indicate what kind of potential defects the vehicle may have, let alone document what other re-con (cost to repair) the vehicle may require.

I have also seen some concerning behaviour at some dealerships, where a vehicle is purchased, sent for a Valet/Clean-up and then tendered for sale – without an independent or own workshop inspection report (110 point safety check).

This is the simple explanation for dealers’ high monthly aftersales accounts.

Do take careful note of my recommendations below.

Gotta fly now!

Best,

SuperSpark


SuperSpark recommends

Log in to the IDA website with your password and username.

1. On the home page, click on Download Documents on the top left.
2. Scroll down to "Appraisal Document".
3. Download the document and save.
4. Ensure you and the validator are familiar with the document (especially the disclosure at the bottom where your customer must sign) as this appraisal document will save you a lot of money in the future. This document is actually a disclosure form whereby the client discloses any defects on his/her vehicle. This means that you have some sort of recourse against your client who wants to trade in/ sell the vehicle to you.

• When doing an appraisal, make sure the business owner or the sales manager can coordinate/conduct a proper validation on a vehicle. Ensure it is an experienced person.
• Complete the valuation document in full with al recons and defects on the vehicle when viewing. Remember the vehicle’s tyres, scratches, dents and services.
• Test drive the vehicle for at least five kilometres to see, hear and feel any funny noises (uphill, downhill and circles) for the following: clutch, gearbox, diff, brakes, etc.
• If you have your own workshop do not hesitate to put the vehicle on a lift to view from underneath as you may find some defects, such as oil leaks, that may potentially cost money to repair. Include your Workshop Manager/Mechanic in this process.
• Once you have identified all your cost implications, you can complete your appraisal document and mark all your recons on the form.
• You can now discuss this document with your customer.
• Ask the customer to sign the document.
• The calculations you have made will give you a clear indication of what you can offer as a trade in, as your re-con calculation is included.
• When receiving the trade in, immediately send the trade in vehicle for the necessary recon. Do not take short cuts. Not sending the vehicle for recon will cost you money in the long run.
• Keep all invoices or copies in your deal file as proof.
• You may even disclose all your recons, to your prospective customer for CPA purposes.
• Send your vehicle for a valet and it is ready to sell.
• This process will reduce your recon account by about 80% per month.