The Importance of Speed and Accuracy in Vehicle Diagnostics

The Importance of Speed and Accuracy in Vehicle Diagnostics

By Robert J. Gorincen

Dealers are constantly looking for ways to streamline their processes and maximize profitability. One of the most essential tools in the modern dealership’s arsenal is the OBD (On-Board Diagnostics) adapter, which allows for fast and detailed vehicle diagnostics. When used effectively, an OBD scan can provide crucial insights into a vehicle’s health, ensuring quick and accurate appraisals that compliments information in your inventory management platform.

The speed of an OBD during appraisal isn’t everything; only by combining speed and accuracy can dealers ensure a complete, precise diagnostic and an accurate cost-to-market metric. Rushing through a diagnostic can lead to costly errors. Below are essential elements for combining speed and accuracy in diagnostics and three strategies to optimize the appraisal process.

Speed Matters: More Appraisal Opportunities & Customer Satisfaction

The faster a dealership can assess a vehicle’s condition, the more appraisal opportunities they can take on. A rapid diagnostic scan enables dealers to process more vehicles each day, increasing their potential revenue from used car sales. Speed in the diagnostic process also plays a significant role in customer satisfaction. When dealers can quickly assess a vehicle and provide a prompt offer, they can build a reputation for efficiency, which leads to positive word-of-mouth and repeat business.

For customers, a quick diagnostic scan means less time waiting and greater confidence in a dealer's expertise. In a world where speed is highly valued, a fast diagnostic process directly contributes to higher conversion rates and enhances customer trust.

Accuracy is Essential: Avoiding Costly Errors in Appraisals

While speed is important, accuracy is crucial. If an OBD scan is not comprehensive, dealers could miss code resets and potential repairs. For instance, overlooking an engine or transmission issue could lead to the dealership overpaying for the vehicle. Once these issues become apparent in later inspections, the cost of repairs eats into the dealer’s profit margin, possibly causing a loss on the resale.

Let’s put this into perspective with an example: missing a transmission issue could cost a dealer $3,000 to $4,000 in unexpected repair costs. Similarly, a hidden problem with the catalytic converter could add up to $1,000 in parts and labor. Such oversights can quickly turn a profitable deal with an 85% cost-to-market into a financial setback, underscoring the need for diagnostic accuracy.

Financial Impact: How Inaccuracy Can Affect Profitability

If a dealer misdiagnoses even a small percentage of appraisals, it can lead to thousands of dollars in losses. For example, let’s say a dealer appraises 200 vehicles a month, and 5% of these diagnostics are inaccurate, resulting in an average loss of $3,000 per vehicle. This would amount to $30,000 in preventable losses monthly. Over a year, this could total an astonishing $360,000 in lost revenue. Clearly, accuracy is not just a bonus—it’s a critical factor that directly impacts a dealership’s bottom-line.

Three Takeaways Dealers Can Ensure Speed, Accuracy and Consistency in When Running Diagnostics on an Appraised Vehicle

1. Use a Consistent Process

One of the most effective ways to improve both speed and accuracy in OBD diagnostics is to ensure that staff members are well-trained, ensuring a consistent result. It’s common knowledge that if 10different appraisers evaluate a vehicle, 10 different outcomes are likely. Incorporating OBD diagnostic codes into the vehicle appraisal process can significantly reduce the time needed to complete an accurate scan with a consistent result. Additionally, a consistent appraisal process using complete and consistent vehicle diagnostics can quickly identify when an issue needs further investigation, avoiding costly errors.

2. Use Diagnostic Tools with Real-Time Updates

Engineering vehicles are continuously evolving, and so are diagnostic codes and standards. Dealers should choose OBD adapters that offer real-time updates or automatic software upgrades. This ensures that their diagnostic tools are always aligned with the latest manufacturer data, increasing both the speed and accuracy of diagnostics. Up-to-date diagnostic tools reduce the risk of missing new fault codes or incorrectly interpreting outdated ones.

3. Implement a Double-Check System for High-Value Appraisals

For high-value vehicles or those with potential red flags in their initial diagnostics, a double-check process can help mitigate errors. This could involve having a second technician review the diagnostic results or performing a second scan if any anomalies appear. While this may slightly extend the time for certain appraisals, it offers a balance between speed and accuracy for vehicles where errors could lead to substantial financial losses.

Conclusion

In the automotive appraisal industry, speed and accuracy in vehicle diagnostics are both essential for maximizing appraisal opportunities and minimizing costly mistakes. A fast diagnostic process enhances customer satisfaction and allows dealerships to take on more appraisals daily. However, accuracy is equally important, as misdiagnoses can lead to significant financial losses. By investing in staff training, using updated diagnostic tools, and implementing a double-check system for high-value appraisals, dealers can optimize their diagnostic processes. This balance of speed and accuracy can help ensure that appraisals are both efficient and reliable, directly benefiting a dealership’s profitability and customer reputation.