Best practices for used car management with Kelly Automotive’s Chris Saraceno

Welcome to this week’s episode of Used Cars Weekly, the original CBT News show dedicated to bringing car dealers best practices and tips for the used car department, in-depth dealer interviews, hands-on dealership strategies, as well as vendor analysis. Today, host Jasen Rice, founder of Lotpop, is joined by Chris Saraceno, Vice President and Partner at Kelly Automotive Group and frequent CBT contributor.

Chris Saraceno starting selling right out of college in 1984. He joined Kelly Automotive Group in 1989 and was promoted to General Manager two years later. From there, he became the Vice President, and in 2008, when the company separated, he became a partner of nine stores. Saraceno is also the author of the Amazon best-seller, The Theory of 5. The book has sold over 10,000 copies and it is inspired by the idea that every person is an average of the five people they spend the most time with.

Saraceno has opened 14 stores thus far in his career, so Rice asks about the most common problems he’s encountered. He says the most common problem has to do with training the people. Employees are the most precious commodities, and he says, “When you get the right people around you, all of the sudden life becomes easier.”

Saraceno adds that of course, inventory has become a challenged, but typically, it comes down to whether or not you have the right people in the right roles.

When it comes to used car inventory management, Rice asks hows Kelly Automotive Group is currently maintaining its inventory. Saraceno says first, they make sure they have a strict 60-day turn. At the end of 60 days, his managers have the option to buy that vehicle at market value before it goes to wholesale auction. While it is not a mandate, they strongly encourage it. Saraceno says that Kelly Automotive has always been strong in used car sales. Annually, they average 1.5 used car sales to 1 new car sale.

Kelly Automotive also has a strict policy regarding reconditioning. They have a maximum of 72 hours from when the trade comes in, to get it back on the lot. They also make sure that every store has used car technician specialists. They share detailed notes of every single  150-point inspection with customers, including repair orders.

While it took some time for the staff at their latest store to buy-in to the changes, the dealership has broken all of its previous sales records in the last four months of purchase from Kelly Automotive. Another one of their dealerships broke its annual gross profit record in just one month. Saraceno says that these are unique times and he knows other dealers having the same results.

While used cars do move internally from dealership to dealership, either Saraceno or one of the Kellys is involved in it. However, the clock doesn’t start over for the car at the new dealership. They continue to bind it to their 60-day policy. In order to track these metrics and monitor them, Saraceno says he’s a big fan of vAuto.

Saraceno and Rice end the conversation by discussing dealership culture and training. He says, “We do believe iron sharpens iron.” When you have one store doing well, you need to share the why behind it and best practices with your other stores so they can gain that knowledge too.

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