Last year was a record year for recalls; over 50 million vehicles had recalls with over 900 different campaigns. This was the third year in a row that recalls topped 50 million vehicles. Recalls can be good business for dealers if they handle them properly.
What is the best way to handle a recall? The most profitable way to perform a recall is when the vehicle is in stock or already in your shop.
How is it possible that you can sell a new vehicle with a recall? Let’s say that you receive a new vehicle and open up a PDI repair order. Most DMS systems do a background vehicle inquiry to get the vehicle service history and check for open recalls. During the process, some DMS systems like AutoSoft display the recall and ask if you want to import the campaign into your repair order. Other DMS systems like DealerStar automatically add campaigns to the open repair order or appointment. What happens if you receive a new vehicle that has no open recalls, but then during the next few weeks or months, a campaign is issued?
Some DMS systems let you enter that campaign and VIN range into their system and locate vehicles that are affected. But with our busy service departments, this step is often neglected and the sales department delivers a new vehicle with an open campaign.
Many manufacturers punish dealers by withholding their rebate funds or other actions. Some DMS systems out there are helping dealers with this problem by running background vehicle inquires of the vehicle inventory file each night and red-flagging in stock units that have open recalls. In addition, when a new or used vehicle is added to stock or a deal created, another background inquiry is done and a warning is issued in the deal that there is an open campaign.
By completing the recall while the vehicle is still on the lot or in your shop means more profit. First of all, your customer is happy that they don’t have to bring the vehicle back. Nothing is worse than buying a brand-new vehicle and a few weeks later getting a recall notice. For the dealership, you don’t have to give an upset customer a free rental vehicle. With careful planning of your recalls on in-stock vehicles, you can order the parts on stock orders instead of emergency orders saving money on freight and the cost. The service department can easily schedule these in-stock repairs around their daily schedule and dispatch to the best techs rather than having to pick a lesser qualified or more expensive tech to meet a promised time. Of course, it is always easier to repair a vehicle that is sitting on the lot than processing a customer’s vehicle through your shop. How can you miss a recall on a vehicle that is in your shop? Often the repair order is created by a third-party product or weeks in advance by an advisor or scheduler. At that time, the vehicle history might be requested of the factory, but it isn’t done again when the repairs begin weeks later. By running an inquiry each night of all in-stock vehicles and open repair orders, your DMS can flag those missed recalls.
If you are finding that you sold or serviced vehicles with open recalls, then you might want to study the process in your DMS and discover some of the tools available to make discovering a recall before a vehicle leaves your shop or lot possible. These changes can increase profit and improve customer satisfaction.
Author: Sandi Jerome
Sandi Jerome is the owner of Sandi Jerome Computer Consulting. Sandi founded DealerStar, a web-based DMS. She is a former CFO, System Administrator, Fixed Operations Manager, and Controller with over 30 years experience in the auto industry.