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Hidden Expenses - A 'Key' Pre-Owned Best Practice

One of the most avoidable hidden expenses in operating a pre-owned department is often overlooked by dealerships - Keys! 

Informing your potential sellers and buyers about bringing their second set of keys along with their title and other necessary paperwork is an excellent best practice.  Unfortunately, it doesn’t always happen.  Once the consumer arrives at the dealership the focus is on finding the right vehicle and making the guest experience something to remember favorably.  At first glance, it appears this aspect of completing the sale is a minor oversight. But it's not!

When vehicles come in from trade or purchase from a private seller, consumers don’t often think about bringing their second set of keys for the vehicle to the dealership.  Consumers might not think twice about this.  After all, what's a spare key in the grand scheme of things?

The Real Cost of Missing Keys

Professionals in the pre-owned arena understand the cost of replacing a key for a modern vehicle with security chips, keyless entry and push button start.  It’s not uncommon to pay upwards of three hundred dollars to have a modern key fob replaced.
A missing key may seem like a small expense until you break down the cost of missing keys over the course of a month. Using an average cost of $300 for each key that needs to be replaced in a pre-owned department that averages 100 sales per month and replaces 25% of the second keys, costs can easily equate to a total monthly expense of over $7,500.  Multiplied over an entire year the expense can reach $90,000! No small expense!

How Dealerships Can Address the 'Key' Budget

During the transaction, if the customer doesn’t have the extra key we kindly asked them to send it to us at the dealership.  Provide the customer with a self-addressed, paid-postage padded envelope.  Inside the envelope is the key tag of the vehicle with the stock number and all of the necessary vehicle information.  This ensures that when the key arrives we know what vehicle it belongs to.  On the outside of each traded or acquired deal bag we add ‘1 key’.
When the vehicle is stocked digitally using an inventory management solution, add a tag option in settings of ‘1 key’ for these vehicles or ‘2 keys’ for trades with multiple keys.  You can also create a simple report in the trade appraisals field with a tag of ‘1key’, customer’s info, year, make, model, sales representative, days in stock and set up a filter of 0-15 days.
The report can be scheduled to be delivered automatically to the person in charge of administrative tasks in the department.  They can set the report to be delivered Monday through Friday at 9am and will reach out to the customer kindly asking to drop the key in the mail.
The keys are mailed by the customers to the dealership regularly saving the dealership thousands of dollars a month.  It’s a really simple process that requires cooperation from the sales consultants taking the vehicles in trade, the administrative person reaching out to the customers and the individual stocking vehicles in vAuto.
It seems like a simple thing - a spare set of keys.  Some families never even use the spare set - they simply sit in a drawer or on a hook, a forgotten but important security net.  When they come to trade in their car, it's simple thing to overlook.  But what seems minor on a single sale can quickly add up to a major line item in your pre-owned department's operating budget.
By taking a proactive approach to informing customer's about the importance of this detail and managing inventory to make matching keys with cars easy, pre-owned departments can achieve two important goals.
The first is creating an open and transparent relationship with customers.  By giving them the information they need - including the items they need to bring with them in order to get the best value for their trade-in - customers feel empowered and your dealership is seen as a source of information and help.  Secondly, your dealership can cut costs by eliminating the expense of making spare keys.  It's a clear win-win.