BHPH and Service Operations
In BHPH you are primarily in the collections business. You are selling vehicles to consumers that have issues with their credit. Most of these vehicles are previously driven, pre-owned, and maybe recently abused by another used car dealer or previous owner. This means you need to deal with reconditioning and repairs.
I have always had full-service shops in all the operations I have been involved in. There are different ways of handling vehicle repairs and maintenance in BHPH that you should consider. I advocate for a full-service shop in-house, with your own technicians and equipment. And yes, it comes with some headaches and expenses like every other way of making repairs, but at least you have control of what customers are told and what repairs are made.
Other dealers have different mixtures of repair capabilities. Some do in-house recon but not repairs for customers. Others have Franchise dealerships and pay full retail to their already existing shops for repairs. I have seen a couple of guys working under an awning outback doing minor maintenance and a few repairs. What you do depends on you but there are ways to run a full shop and make money, even in BHPH.
In BHPH 101 plus I talk about some options of how to set up a shop and make repairs. I discuss some of the other options and the pitfalls of all ways. I talk about third-party Service Contracts and Reinsurance as options. I talk about doing things in a way where most of the repairs you do are paid for by the customer in some way.
How do you hire and pay technicians? How do you account for parts and repairs done on the vehicles? How best to maximize use of a third party service contract or warranty? How much recon should you do and why?
I can come to your dealership and help you set up or streamline a service operation. You are going to deal with repairs in some fashion. In doing so, you will spend money getting the repairs done. Why not set up your procedures, front to back, so that the customers are paying for repairs you know will be happening? This way you have something else to market to customers, “We Service our Cars Here”. You also have the opportunity to help people with repair issues quicker and more in your control so your customers are happier.
Another aspect of having a shop in-house is doing minor body repairs. How about spending $1200 and charging an insurance company $4000? I have generated tens of thousands of profit dollars in our shops doing body repairs without spraying any paint! Let me show you how.
Like collections, repairs and maintenance of these vehicles is a vital part of your BHPH success. Get it under your control and either save or make some money while taking better care of the portfolio.