Texas Toyota store finds a source for trade-ins close by: The service lane

Ken Mauldin, fixed ops director at Purdy Auto Group, is a data miner. He’s constantly scanning reports from the service and parts departments of his group’s three Texas Toyota stores. He looks for the missed opportunities that sometimes show up in rows of numbers.

“I get reports emailed to me every night, pretty much everything that goes on in the stores. I dive into the reports, and I watch for trends,” Mauldin told Automotive News. “I manage my trends. If I see something trending off in the wrong direction, at that point I am making a phone call to the right people and saying, ‘Hey, let’s sit down and talk about this. Let’s figure out what happened.’ ”

Mauldin’s analysis led to a small change on the service drive that has seen all three Purdy stores increasing the number of trade-ins coming through the service drive.

Early in 2020, Mauldin was looking at how service customers were using the GoMoto kiosk in the service drive at the company’s South Toyota store in Dallas. Most customers, he noticed, were skipping a question that asked whether they wanted to know what their cars were worth as they checked in their vehicles for tires, oil changes, alignments and other fixes.

Mauldin convened a brainstorming session with his service advisers to see whether they could think of a way to get customers to answer that question. He thought there might be a chance to increase the number of trade-ins acquired through the service department, a move that could have a big impact on the store’s profitability.

Dealers can save a lot of money when they take trade-ins at the store. In-store trades avoid bidding wars at auctions, eliminate auction fees and negate transport costs. And used cars taken in at the dealership get to the front line much quicker, Mauldin says.

Mauldin’s timing couldn’t have been better. The chip shortage was about to reduce the number of new vehicles the Purdy stores stocked. That in turn would cause used-car prices to jump nearly 40 percent for some models.

“Once we realized our verbiage wasn’t quite right, we changed it. Instead of talking about equity or used cars, or anything like that, now it’s just a real simple question at the kiosk: ‘Would you like to know what your car is worth?’ 

Instead of the customer pressing that button on the screen, the service adviser checking in the car at the kiosk asks that question personally. If the customer answers yes, the adviser presses the button on the kiosk’s screen. That sends a text to the sales department, which then gathers the information on the car. On busy mornings, several members of the sales department work in the service drive. The salesperson either meets with the customer in the lounge or calls them with a pitch that is often irresistible: “We can put you in a newer car for the same payment as you are making now.”

South Toyota usually sells around 225 new and used vehicles per month. The service department writes around 3,000 repair tickets per month. Mauldin said the store’s monthly goal is to get 150 service customers to say yes to knowing their car’s value. On average, he said, 150 yeses will lead to trades of between 20 and 30 cars per month from the service lane.

Most of the trade-ins are not leased cars, and most customers don’t trade for a new one. Because of South’s proximity to Toyota Motor North America’s corporate headquarters — about 20 miles — the store gets a lot of gently used vehicles less than a year old from Toyota’s executive fleet, Mauldin said. Many of the rest of the store’s 300 used vehicles are bought at auctions.

“I’ve got 2021s and 2022s that are used. I have ’22s with 200 miles on them that are considered used. Ninety percent of the time, I will have a car here that the customer can drive away in.”

“The service drive is really the backbone of the dealership,” he said. “We see the most customers every single day, and the most opportunity comes through the service drive. Sales is finally starting to figure that out. We now have a couple of salesmen that are assigned to the service lane in the mornings. They’re here if a customer expresses an interest in wanting to look at a car or trade. They are mingling and waiting for those opportunities.”

Mauldin believes used-car trades from the service drive won’t decline when prices for secondhand vehicles return to normal. Before the increase in used-car prices, the store was averaging 15 to 20 trade-ins off the service lane, and that hasn’t changed with the surge in prices.

“Buying a car is an emotional decision. If you catch a customer on the right day, with whatever is going on, and you can say to them: ‘I can put you in a car two to three years newer for the same price. Would you be interested?’ Well, absolutely. Who wouldn’t be?”