PURCHASING & INVENTORY MANUAL
I. PURCHASING AND INVENTORY MANAGEMENT.................................................................... 3
II. PURCHASING.................................................................................................................................... 3
PURCHASING OBJECTIVES...........................................................................................................................3
ROLE OF THE PURCHASE AGENT ................................................................................................................4
PURCHASING CRITERIA AND GUIDELINES ....................................................................................4
RETAILING REPOSSESSIONS..............................................................................................................5
VEHICLE EVALUATION ................................................................................................................................5
EXTERIOR WALK AROUND...............................................................................................................5
UNDER THE HOOD ............................................................................................................................5
INTERIOR ..........................................................................................................................................6
TEST DRIVE EVALUATION................................................................................................................6
VEHICLE IDENTIFICATION (VIN)................................................................................................................6
BLACKBOOK .................................................................................................................................................7
NEGOTIATION STRATEGIES AND TECHNIQUES ........................................................................................7
PURCHASE AGREEMENT..............................................................................................................................7
SOURCE MANAGEMENT...............................................................................................................................8
WEEKLY ROUTE SCHEDULES......................................................................................................................8
III. INVENTORY MANAGEMENT ..................................................................................................... 8
STORE INCOMING VEHICLE CHECKLIST ...................................................................................................8
INDIVIDUAL/NEW VENDOR CHECKLIST .....................................................................................................9
W-9 ...................................................................................................................................................9
INVENTORY MAINTENANCE ........................................................................................................................9
WEEKLY ATTENTION CHECKLIST ....................................................................................................9
FLUID CHECKLIST...........................................................................................................................10
DETAILING PROCEDURES ..........................................................................................................................10
15 STEP DETAIL PROCESS (RETAIL UNITS) ....................................................................................10
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ROUGH CLEANS..............................................................................................................................10
NEW VEHICLE ARRIVALS ...............................................................................................................11
HIGH INVENTORY MANAGEMENT ............................................................................................................11
HIGH INVENTORY PROCEDURES.....................................................................................................11
PURCHASING AGENT EVALUATING HIGH INVENTORY ..................................................................11
COMMON REASONS A VEHICLE BECOMES HIGH INVENTORY .......................................................12
VEHICLE TRANSFERS.................................................................................................................................12
IV. EXPENSE MANAGEMENT ......................................................................................................... 12
REPAIR AUTHORIZATION POLICY ............................................................................................................12
CUSTOMER REPAIRS..................................................................................................................................13
SERVICE CONTRACT ..................................................................................................................................13
EXPENSE MINDSET.....................................................................................................................................13
REPAIR LOG ...............................................................................................................................................14
SHOP SET UP...............................................................................................................................................14
DETAIL CHEMICALS ..................................................................................................................................14
BATTERIES..................................................................................................................................................15
BACK LOT ORGANIZATION .......................................................................................................................15
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PURCHASING & INVENTORY MANUAL
This manual is intended to provide a comprehensive view of Purchasing and Inventory
Management policies and procedures from the point of purchase to the time the customer pays the
contract in full. When customers view our inventory, it must be clean, merchandised correctly, and most
importantly – mechanically sound.
By managing our inventory according to the guidelines set forth in this manual, we will enhance
our sales volume and increase customer satisfaction. Further training on topics within this manual can
be found in Litmos or by clicking on any of the training videos included throughout this manual.
Inventory management begins at the time a vehicle is first purchased. In fact, purchasing a
quality vehicle is arguably the most crucial step in our business as it impacts every other part of the
business. The policies and procedures outlined within this section cover all necessary components of
acquiring quality inventory at reasonable prices, both of which are essential to the success of our
dealerships and valued Customers. Best practices and further information on how to effectively
perform many of the topics within this section can found by clicking on the video icons displayed or
referencing the online learning system (Litmos) using the keyword “Purchasing”.
To maintain a consistent replenishment of inventory that meets the needs of each dealership
we must have a healthy flow of new inventory. Our need for inventory should never compromise our
expectation of quality. All vehicles considered for purchase should be evaluated following the same
inspection routine and meet, if not exceed, our inventory expectations. If a vehicle falls below this
standard, then we must be able to recognize this
and willing to walk away.
For a vehicle to be considered an
acceptable purchase, it must pass the criteria of
four different objectives: Quality, Cosmetic
Appeal (Look), Price, and Need. These
objectives are the foundation of inventory
replenishment and should be taken into
consideration on every vehicle we purchase.
Before making the final decision to purchase a
vehicle, always ensure the vehicles passes all 4
aspects of the Purchasing Objectives.
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The Purchase Agent works as the eyes and ears of our Store Mangers within designated trade
territories, developing and maintaining sources to purchase inventory from. Reporting directly to the
Store Manager, they represent the stores they service and are always to represent themselves and
Car-Mart with the highest level of professionalism and integrity.
The responsibility of the Purchase Agent is
to seek out quality, affordable transportation for
purchase that can be prepared for sale to our
valuable customers. Purchase Agents work directly
with the public and within the automotive industry
developing multiple purchasing sources to maintain
a consistent flow of inventory that meets the needs
of stores they service. Please reference the video
clip listed or Litmos to quickly reference best
practices on managing and the role of the Purchase
Agent
Purchasing Criteria are in place to keep us competitive in the market place while maintaining
quality inventory for our valued customers. We want to buy quality inventory that is desirable for our
customers. We must buy what will sell and, more importantly, what our customers will pay off. To
increase the success rate for each of these areas the Company has designed Purchasing Guidelines
(UltiPro) taking into consideration vehicle type, age, mileage and cost points. The guidelines take each
of these factors and optimize them to identify the ideal ranges for vehicle purchases to maximize
success potential, for both the business and customer. As result, only vehicles that fall within the
Purchasing Criteria and Guidelines should be purchased for retail purposes.
Due to potential challenges selling, common mechanical trends, or other factors, some vehicle
types are listed on the “Caution List” which requires Manager consultation and
approval before purchasing. Purchasing a vehicle on this list should be approached
with a high level of caution and done so only after our thorough, due-diligence has
been completed in inspecting the vehicle. Vehicles on the “Caution List” can be
found within the Purchasing Criteria document. Please review Litmos to reference
best practices on the Purchasing Caution List.
Some vehicles have historically shown trends of mechanical problems, common issues, and
reliability concerns. Others have also proven to be difficult in finding the availability of needed parts for
repairs or simply a high markup for routine maintenance expenses. As result, these vehicles have
been assigned to the “Units Not Recommended for Purchase” list found within the Purchasing
Criteria document and should be avoided.
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When making the decision to retail a repossession, the vehicle must fall within the purchasing
criteria to be eligible for retail. For a repossession that fits within the purchasing criteria
to be retail eligible, it must then be thoroughly evaluated using our standard vehicle
inspection process, including completing an incoming unit checklist. These
units are to be priced fairly for our customers and held to the same level of
quality as all other retail units.
It is important to approach every vehicle considered with a consistent, thorough evaluation
outlined in the Vehicle Inspection Checklist (UltiPro). This list is not all inclusive and at times other
cosmetic and mechanical factors you find can play a role in the decision to purchase a vehicle.
Inspecting a vehicle can be broken down into 4 key steps and should be completed in this order:
Exterior Walk Around, Under the Hood, Interior, and Test Drive.
If at any point an issue is found that would prevent us from purchasing the vehicle then it would
no longer be necessary to complete any remaining steps. Often, items are found during the inspection
that need corrected, but do not necessarily mean the vehicle should be removed from consideration. In
fact, that is the purpose of the inspection – to find any issues that need negotiated into the purchase of
the vehicle. If a vehicle makes it through each of the first 3 steps of the vehicle inspection then, and
only then, does it move forward in the evaluation process to the Test Drive.
The first step in a vehicle inspection involves a
thorough Walk Around of the vehicle exterior looking
for any issues that give insight on the vehicle’s history,
condition, or concerns. Follow the same routine with
each vehicle, walking entirely around the vehicle and
thoroughly reviewing all the exterior. Areas to review
during this step are wheels, tires, suspension, paint,
body lines, areas of rust, lights, windows, windshield,
and the vehicle body itself. For best practices on how
to inspect these areas, please reference the video clip
listed.
After inspecting the vehicle exterior, the next
step is checking Under the Hood compartment.
Carefully review all items under the hood of the vehicle
to identify any potential issues with the vehicle. When
inspecting under the hood include be mindful of smells,
parts condition, the battery, wires and fluids. For best
practices on inspecting under the hood, please
reference the video clip listed.
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Once the components under the hood have
been inspected, evaluate the Interior of the vehicle.
Inspect all areas and components within the interior
section of the vehicle including smells, seat conditions,
upholstery, air conditioning, heat, radio, dash, windows
and all electronic features. For best practices on how
to inspect the interior of a vehicle, please reference the
video clip listed below or Litmos.
The final step in a vehicle inspection, the Test Drive, is arguably the most important and should
be the most extensive. Before test driving the vehicle, let it run in idle 10-15 minutes to get up to
operating temperature – this can be started during the previous step to help speed up the process. A
scan tool should be connected to the vehicle for a quick
diagnostic prior to beginning the test drive.
To get a true evaluation, the vehicle must be
driven at operating temperature and various speed
levels to inspect all transmission gears, vehicle
alignment, engine performance, brakes, and more. Pay
close attention to how well the vehicle cranks, idles,
noises, smells, lights on the dash, delays in
acceleration, bouncing when a bump is hit, vibrations,
pulling one direction, spongy brake pedals and more.
For best practices on how to complete a test drive
inspection, please reference the video clip or Litmos.
The VIN (Vehicle Identification Number) is a standardized 17-character identification used to
identify vehicles, consisting of letters and numbers.
The VIN plate can be found by looking through the
exterior front windshield on the driver side, just to the
right of the steering wheel, where the dash meets the
windshield. This plate is the most reliable VIN location
because it’s the industry standard location and not
easily altered. The VIN can also be found on stickers
inside the driver door jam, glove compartment, or
trunk. Due to the potential these stickers might be
missing, unreadable, or altered, it is a best practice to
verify the VIN on the sticker with the dash plate VIN.
Accurately identifying and recording the VIN is crucial, as the VIN is the legally binding vehicle
identification that appears on the title and all sales related paperwork. Always verify the VIN recording
with the title to ensure we have purchased, or sold, the proper vehicle. Please reference the video clip
listed for best practices on locating and recording the VIN.
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Black Book is a publication that statistically tracks the changing values of used vehicles by basing
its information on used car prices gathered weekly at major auctions throughout the United States. It is
vital to use this publication to arrive at a baseline value of vehicles we buy and can be accomplished by
following 4 important steps to buying a vehicle, found
inside the front cover of the Black Book.
Our goal is to maintain a purchase cost at clean Blackbook
book value or under for vehicles 7 years or older, while
maintaining a purchase cost at average book or under
for vehicles newer than 7 years. The prices included in
Blackbook use guidelines to classify the vehicle as one
of 4 conditions: Extra Clean, Clean, Average and
Rough. This publication is your best tool to value and
purchase vehicles correctly. Please reference the
video clip listed to view best practices on using
Blackbook.
Once a vehicle to purchase has been properly identified, inspected, and valued, any necessary
items to be fixed should be taken into consideration to determine an acceptable offer on the vehicle.
Reference back to the 4 Purchasing Objectives and ensure the vehicle fits all four sections before
agreeing to purchase. A vehicle should be purchased as close to lot ready as
possible to increase inventory process efficiency at the dealership. Known
mechanical or cosmetic deficiencies should be addressed and negotiated into
the purchase of the vehicle. A vehicle with a known issue(s) should not be
purchased with the expectation the dealership can resolve it.
Negotiable items should not be limited to just repairs but should include anything that can help
get the vehicle closer to being lot ready and increase efficiency. Many items, such as oil changes,
details, spare keys, and vehicle delivery can help improve inventory process efficiency as well as
reduce expenses. As result, an attempt to negotiate these items into the purchase should be made on
every vehicle we buy. Often, the seller will initially seek a higher amount than we have in mind and
negotiation skills are necessary to make a deal that is beneficial for both parties. Using negotiation
strategies and techniques are essential to mastering this skill.
Purchase Agreements (UltiPro) are the legal binding agreements between Car-Mart and any
vendors from whom we purchase vehicles. Designed to protect the company on purchases involving
repairs or title issues, each agreement consists of 3 copies filled out by the Purchasing Agent on every
vehicle purchased, except from Auctions. The Purchase Agreement will convert to a Bill of Sale when
the check for title exchange takes place as long as the title is available, and all
listed repairs have been verified as complete within the time frame agreed upon.
If negotiated repairs are not completed, or the title is not available within 30
days of the agreement, the agreement can then be voided at our discretion.
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Purchase Agents are responsible for filling out all items on the purchase agreement and later,
ensuring all negotiated repairs are completed prior to the check for title exchange. Once verified, the
Purchase Agent must sign off that repairs are completed on the (White) store copy of the purchase
agreement and, if possible, deliver the purchase agreement to store management that day or soon as
possible. Upon receiving, purchase agreements should be entered in ALIS immediately. Once the
vehicle is delivered, the Purchase Agent is authorized to exchange the check for title.
Purchase Agents should be developing new sources and maintaining existing ones daily.
Having many sources to select inventory from provides the Purchase Agent negotiating strength, as
well as a larger assortment of vehicles. The most successful Purchase Agents
purchase from multiple source areas, such as new vehicle stores, wholesalers,
auctions, used vehicle stores and individuals. To maintain an acceptable
number of monthly purchases, a Purchase Agent should have a minimum of at
least fifteen sources.
Our largest failure as managers is not pushing for new source development on a weekly basis,
but instead allowing purchase agents to supply inventory from primary old developed relationships with
wholesalers or auto auctions. Continuously building new and numerous sources is our completive edge
in acquiring inventory.
Route schedules (UltiPro) are used as a form of communication, organization, and provide
managers a list of locations the Purchase Agent visited on a specific day and/or week. Additionally,
they provide the Purchase Agents a contact sheet compiled into one document. It is important for
Purchase Agents to maintain their source information and add, or delete sources, regularly to identify
where their sources’ strengths and weaknesses are. Purchase Agents should submit their updated
route schedule to their General Managers and RIDs at the beginning of every month.
A member of management will drive and assess all
new vehicles. An Incoming Vehicle Checklist (UltiPro)
is used to record any necessary repairs as well as GPS
information. When pricing the vehicle, adherence to the
pricing guide is extremely important as it determines the
sales price, suggested down payment and payment
amounts, as well as the expected rate of return. These
guidelines enhance the profitability and efficiency of your
lot, provided the vehicles have been purchased at a
reasonable price.
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If we overpay for a vehicle, we do not pass our mistake on to the customer by overpricing.
Conversely, if we feel we have an exceptional purchase it is acceptable to adjust the price up. If a price
needs adjusted more than $200.00 up or down it will require approval from the Area Operations
Manager. Please reference the video clip listed for best practices on Incoming Vehicle Checklists.
To set up a new vendor in our accounting system allowing the vendor to be paid, we must
complete the Individual/ New Vendor Checklist (UltiPro) If the purchase is from a New Vendor and
this vehicle is our first purchase from them, you will need the following items: Purchase Agreement,
copy of title (front and back), title attachments, copy of the vehicle lien release, and a copy of the check.
Prior to scanning in these purchasing documents, a W-9 will need to be
completed by the vendor, signed by the General Manager, scanned and processed.
Only once the vendor is set up in our system can you proceed to scan the stack of
purchasing documents. Please reference Litmos for best practices on how to
complete the Individual/New Vendor Checklist.
A W-9 enables Car-Mart to comply with Federal regulations in reporting monies paid to a person
or company for services. All vendors receiving payments should have a current W-9 on file with our
Accounting Department. A blank version of this document can be found on UltiPro. It is our policy to
pay for a vehicle once the title is available through a “Check for Title” exchange. We should never put
ourselves in a position where we are unable to pay the vendor when the title is ready.
Maintaining inventory in a merchantable and mechanically sound condition is one of the most
important components of our business. It is important that we maintain our inventory by performing
daily and weekly tasks as well as identifying deficiencies and correcting them as quickly as possible.
As mentioned, some inventory maintenance actions are required daily, such as starting vehicles each
morning and letting them run for at least 5 minutes (10 minutes during Winter). Others are to occur at
least once a week, such as completing weekly Vehicle Attention Lists, performing a Lot Wash, wiping
down interiors, vacuuming lot inventory, and lot realignment. The Fluid Checklist is to be performed
twice each month, on the 5th and 20th.
Having familiarity and staying engaged with your inventory allows you to quickly identify any
deficiencies and requires quick resolution to prevent the issue from escalating further.
The Vehicle Attention Checklist (UltiPro) is to be completed each week
to ensure inventory is always ready to sell. Each vehicle on the front lot is to be
listed on the checklist and then inspected to ensure they meet our mechanical,
cosmetic, and merchandising standards. Concentrate on what will make the
vehicle sell by looking at the vehicle the way a customer would. The completed
checklist is to be given to the Manager so that any deficiencies identified can be corrected as quickly as
possible. Please reference Litmos for best practices on how to complete a Weekly Attention List.
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The Fluid Checklist (UltiPro) is to be completed twice a month - on the 5th and the 20th. This
checklist ensures all fluids are maintained at proper levels and oil changes are done
without fail. While most of the items are self-explanatory, without adequate
experience, some of the conditions of fluids may be open to personal
interpretation. Please reference Litmos for best practices on completing the Fluid
Checklist.
One of the most important responsibilities of a Lot Attendant is detailing vehicles. Our detailing
standards are very high, and everyone must take pride in the condition of our inventory. We strive to
have the cleanest vehicles in the business. Our detailing procedure has been designed to help in your
training. Once you have mastered the basics, you can start improving your speed. Remember, quality
comes first. The average complete detail should take approximately 2.5 hours. However, due to the
cleanliness of the vehicle upon arrival, many vehicles will require far less time than 2.5 hours.
Note: It is Car-Mart policy to wear all required safety gear
All retail units are to undergo our 15 Step Detail checklist to ensure our valued Customer
purchases a vehicle that has been thoroughly cleaned in a manner that exceeds their highest
expectations as well as properly represents our inventory standards to the community while the vehicle
is on the front lot for sale. Both efficient and effective,
the 15 Step Detail process ensures vehicles are
cleaned to our high expectation level and nothing gets
missed, skipped or overlooked.
Our detail process has been designed for all
steps to flow together seamlessly, which prevents
having to repeat previous steps or missing certain
parts. As result, the 15 Step Detail Checklist should be
completed in the sequence as listed on all vehicles.
Please reference the video clip listed for best practices
on how to complete the 15 Step Detail Checklist.
Not all vehicles will require the extensive and thorough cleaning outlined in the
15 Step Detail checklist, such as those liquidated wholesale or at auction. Wholesale
vehicles bring more money in a cleaner condition and in these circumstances a
“Rough Clean” is performed.
A rough clean is a shorter, less extensive version of the 15 Step Detail process that focuses
only on basic, quick impact detailing tasks, such as vacuuming, dash wipe downs, and exterior rinse.
Due to the less extensive nature and reduced steps, a rough clean should only take between 20 to 30
minutes on average. Please reference Litmos for best practices on completing a Rough Clean.
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Often, we receive several vehicles on the same day and it is not possible to give each vehicle a
thorough detail, so we rough clean those vehicles until we can do a complete detail. After completing
the incoming checklist and making spare keys, follow the rough clean procedure and place the vehicle
on the front lot with a For Sale Soon Tag. At the nearest opportunity the vehicle should have a 15 Step
Detail process completed.
The procedure for monitoring long-term inventory vehicles is handled by the Regional Inventory
Directors and Area Operations Managers. However, it is the responsibility of the Manager to take
necessary action to prevent vehicles from going into high inventory status.
Most vehicles arrive on our lots within a couple days of purchase. We have a second
opportunity to check the condition of the vehicle when an associate completes the Incoming Vehicle
Checklist and a member of management drives and evaluates the vehicle. Each of these steps are
crucial to preventing vehicles from becoming high inventory. A unit is considered “High Inventory”
status once it reaches, or exceeds, 60 days in inventory from the date of purchase,
regardless of the title status. Please reference Litmos for best practices and
procedures on High Inventory at your dealership.
For Non-Franchise Stores, any retail inventory over 150 days will be liquidated, allowing for tied
up capital to be re-invested into productive retail inventory. To ensure a unit never reaches 150 days,
GM’s and AOM’s must get aggressive at days 60, 90 and 120. If appropriate, the VPO will be allowed
to approve minimal days over 150 for retail sale. Transfers from store to store will only be allowed to
satisfy an immediate Customer Sale.
Franchise stores will buy the vehicle in at the primary processing store for the check/title
exchange and merchandising. Franchise stores will be allowed one transfer to an appropriate
secondary store for retail sale and to be kept at that location for up to 60 days. If a second transfer is
needed, the vehicle must be evaluated by the AOM to ensure vehicle quality is not the reason it has
moved into high inventory status. A minimum 7.5% vehicle cost reduction is to be applied to help
ensure the vehicle will sale. If the vehicle reaches 150 days in inventory from the initial purchase date,
then it must be sold from the second location or wholesaled. If appropriate, the VPO can approve
minimal days over 150 for retail sale.
Each week the Purchase Agent will set aside time to review the inventory with a member of their
management staff. Use an Inventory List to keep notes, starting with the oldest and work down to 40
days in inventory. Look at the vehicles without prejudice and question what is needed to do to make it
sell? Changes might include mechanical work, a better detail, or re-pricing. Any needing corrective
action should be taken quickly upon completing the evaluation and discussing the results with the
Manager.
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Management must evaluate all vehicles and take immediate action prior to the vehicle reaching
high inventory status. The most important part of this process is taking immediate action. Many issues
can be identified and corrected early when the Manager drives and evaluates all vehicles per policy.
If a vehicle reaches 40 days, the Manager should re-drive the vehicle with their PA to identify why
the vehicle is not selling and act while there is still time. Following basic inventory maintenance
practices help to maintain the vehicle in good working condition. Please reference the attached
document for common reasons a vehicle becomes high inventory and best practices to prevent
each from occurring.
It is the policy of the Company that vehicle transfers amongst dealerships is reserved only for
situations in which we are accommodating the needs or request of a customer at a different location.
Trade-ins and repossessions are not eligible for transfer under any circumstances and any vehicles
with necessary repairs are not to be transferred.
All transferred vehicles are to be immediately driven and evaluated by the GM just as if it were
any other first buy unit as well as have a 15 Step Detail completed. Unknown repairs that are identified
during the evaluation will have 7 business days to communicate back to the original dealership the
extent of the repair and estimated costs. These costs should then be COICT back to the original
dealership upon the completion of the repair.
A major part of Expense Management is having the right approach and mindset. We are a
“Turn the Lights Off” Company and this approach translates into all parts of our business, including how
we manage expenses. We operate with the mentality that saving a dollar is even more beneficial than
earning a dollar. Benjamin Franklin popularized the expression: “A penny saved is a penny earned.”
However, Ben got this one wrong because a penny saved is much better than a penny earned! Why,
you might ask? The time spent to earn money can be costly, not to mention that all money earned is
considered taxable.
Our culture from the beginning was, and continues to be, based on frugality and we will continue
to thrive if we preserve these values and culture. This is the reason why being frugal is such an
important aspect of being profitable.
Prior to management’s authorization of a customer repair or a service contract repair, the
customer must first sign a Customer Repair Authorization Form (UltiPro) or a Service Contract
Claim Form (UltiPro), whichever is appropriate for the type of repair to be performed. The purpose of
each form is to clearly state our objectives to the customer before repairs are authorized.
The Customer Repair and Service Contract Repair Authorization Forms authorize Car-Mart to
have repairs performed at an independent repair shop on behalf of the customer. These forms
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specifically state that we do not provide any warranty for the repairs performed and that Car-Mart will
not be responsible for damages or other consequential loss.
These forms also serve the purpose of making certain that the customer is aware of their
financial obligations before repairs begin. These obligations include making their regularly scheduled
payments while their vehicle is in the shop, the full reimbursement of the customer repair or all
parts/labor/excess tow expense that is not covered under the service contract, as well as our
expectation for payment of the service contract deductible. By signing the form, the customer agrees
that these obligations must be settled before their vehicle will be released to them.
Our objective should be to always negotiate up front the customer’s monetary commitment
toward the repairs (to either collect the full amount of the repair or portion thereof) before repairs are
authorized. It needs to be made clear to the customer that the difference, if any, will be added to the
balance of their account. Management will not have any discretion to waive these balances. Only the
Manager, Assistant Manager, or the Service Manager has the authority to execute a Customer Repair
Form.
The Service Contract Claim Form provides documentation and a process to
follow when a potential Service Contract repair is brought in. It will provide a
documented process of determination of coverage by verifying the date, time,
mileage and a description of the customer’s concerns. The form then dictates that
we review the current mechanical status of the vehicle and potential problems. It
further clarifies authorization, vendors, and an actual description of the repair.
An important habit in having a frugal mindset is to question every expense. Invoices should be
reviewed daily and vendors should itemize all invoices, so we know exactly how much we are paying
and what for. Just like any other type of business transaction, multiple options benefit the knowledge
and negotiation power of the buyer. For this reason, we require a minimum of 3 different sources
before we purchase any repair part or agree to any expense.
With the advancement of online markets, the internet has become an
extremely valuable source for quickly acquiring multiple quotes on needed parts, or
items, and often at the lowest rates. These can be ordered directly from the online
vendor or even used as leverage to get local parts suppliers to price match. As
result, the internet is quickly becoming the best source for reducing expenses and
should be utilized as one of the required three estimates on all purchases.
Utilizing the internet to find the best prices on parts can drastically help reduce expenses,
however it is only one of many best practices that fall within a frugal approach towards expense
management. Please reference Litmos for best practices on how to reduce expenses and what items
to question.
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A repair tracking log (UltiPro)is to be used at all dealerships to track
ongoing vehicle repairs, for both customer and inventory vehicles. The purpose of
this log helps maintain organization and awareness of all vehicles in the shop,
budget status, and identify common trends. The repair log also serves as an
excellent Customer service tool by providing a list of Customer vehicles in the
shop and the duration they have been without their vehicle. It is Company policy that any Customer
whose vehicle is in the shop receives a daily update on the status of their repair. Please reference
Litmos for best practices on how to effectively use the Repair Log at your dealership.
While we have various shop sizes and layouts at our different dealerships, the concept behind
how each is set up remains the same: maximize efficiency and productivity. This is accomplished by
keeping a clean and orderly work environment. Tools, equipment, and chemicals should all have a
designated storage area and be returned promptly once they are no longer being
used for a task. Shops should only contain equipment and items that are
necessary to complete routine tasks. Over accumulating tools, spare parts, and
supplies increase clutter while reducing efficiency. A good rule of thumb is if it
hasn’t been used in the last 3 months then it likely doesn’t belong.
The final 30 minutes of each day should be spent cleaning and restoring the shop to the
condition in which the day started and ensuring everything is back in the correct location. A dirty,
unorganized shop is a management issue and if a high expectation on maintaining order is set, our
Associates will achieve them. Please reference Litmos for best practices on how to properly set up
and maintain your shop to achieve the greatest level of efficiency.
Detailing vehicles and other routine tasks will often require specific cleaning chemicals. While
these chemicals are necessary for the specific tasks, they can pose a safety hazard if not managed or
used correctly. For this reason, the Company allows only exclusive chemicals to be used from
authorized vendors – either Car-Brite or Auto Detail Supplies, depending on your dealership’s location.
Chemicals not provided by these vendors are prohibited and not to be used.
All chemicals must be properly stored, labeled, and listed in the MSDS
Reference Binder (UltiPro). Chemical spray bottles must also be correctly labeled
and are not to be interchanged. Any bottles that do not have the correct label,
have a label that is unreadable, or has been used with a chemical that is
inconsistent with its label must be properly disposed. Chemicals can be a costly
expense if not properly managed.
Only order chemicals that are needed and maintain a limited supply at any given time.
Stockpiling chemicals unnecessarily ties up money and often results in waste as most chemicals will
dilute if they sit for long periods, or even expire in some cases. All chemicals that are on hand must be
stored correctly in a safe, dry location – this helps reduce costs, but also keep Associates safe. Please
reference Litmos for best practices on how to properly use and maintain chemicals efficiently.
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Unauthorized use or distribution strictly prohibited.
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PURCHASING & INVENTORY MANUAL
Batteries are one of the most common expenses. These can be drastically minimized by
following best practices on how to buy, exchange, and store batteries at the dealership. Each lot
should adhere to a 3-Rack battery system, one for each: 1) New batteries and cores,
2) Batteries needing tested or charged, and 3) Batteries that have been charged and
are now serviceable.
Before any low or dead battery is placed on Rack #1 as a core, it should first
be tested and charged to see if it is still a serviceable battery. A battery trickle charger
should be utilized during all working hours unless Rack #2 is empty, however never leave a battery
charger plugged up to run overnight or anytime there is not supervision at the lot. Please reference
Litmos for best practices on how to set up and maintain battery racks at your dealership.
The designated area for storing incoming vehicles and wholesales, often the back lot, is to be
kept in an organized manner that is efficient and professional in appearance. All vehicles should be
properly marked and listed in accordance with policy and parked in designated sections by status type
– wholesale, first buy, pending repossession, etc. All vehicles should be moved to the
intended destination as efficiently as possible by following a consistent routine with a
sense of urgency. The grounds are on the back lot are to be well maintained and
free of debris, trash, and clutter. Please reference Litmos for best practices on how
to organize and maintain the back lot at your dealership.
15 | P a g e Proprietary and confidential information of America’s Car-Mart, Inc.™
Unauthorized use or distribution strictly prohibited.
6/10/2019