Cole Reiken on Using Diagnostics to Protect Used Car Margins

Cole Reiken, managing director of BlueDriver MAX, joins Driving Solutions to explain how professional-grade diagnostics are changing the way dealers appraise and acquire used vehicles. As higher-mileage vehicles become a larger part of dealer inventory, Reiken outlines why visual inspections and basic scan tools are no longer enough to protect margins and maintain customer trust.

The conversation explores how BlueDriver MAX delivers VIN-specific diagnostics, expanded OEM module coverage, and actionable repair insights that help dealers uncover hidden issues before purchase. Reiken also discusses how standardized diagnostic workflows can improve reconditioning efficiency, reduce unexpected repair costs, and create consistency across dealership locations. With real-time auction insights, seamless integrations, and measurable financial impact, diagnostic-driven appraisals are becoming a critical advantage in today’s used vehicle market.

Key discussion points:

• Why accurate diagnostics matter more as used vehicles age and mileage rises
• How BlueDriver MAX supports smarter appraisals and acquisition decisions
• Using real-time diagnostic data in auctions and at the dealership
• Reducing reconditioning costs and protecting used vehicle gross
• Standardizing appraisal workflows across multiple rooftops
• Integrating diagnostics with inventory and appraisal platforms

Driving Solutions is the go-to podcast for dealership professionals who want to stay sharp, informed, and ahead of the curve. Hosted by Jim Fitzpatrick and powered by CBT News, each episode brings you real strategies, smart tools, and expert insights to help you run a more profitable operation.

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Transcript

Why Diagnostics Matter In Appraisals

Announcer 0:04

This is Driving Solutions exclusively on cbtnews.com.

Jim Fitzpatrick 0:09

From keeping appraisal values consistent to navigating online options, dealers need tools that help simplify these processes. And that's where Blue Driver Max comes in. Today we are diving into Blue Driver Max and how it's transforming dealership operations and driving real results with Cole Ricken, who is the managing director of Blue Driver Max. Thanks so much, Cole, for joining us on the show today.

SPEAKER_00 0:33

Thanks, Jim. Great to be back.

Jim Fitzpatrick 0:35

Sure. So how has Blue Driver Max uh business been since we last talked in September? I know you guys are on fire out there working with dealers. So give us an update.

SPEAKER_00 0:45

Yeah, fire is a good way to describe it. Uh it's been a very, very strong past couple of months. We're seeing uh growth across all segments of our business, really. The auction business, we've seen clients up as much as 34% on a year-over-year basis in the last quarter. Um, and we're seeing a lot of that spill over into our growth and uh utilization at the dealership level. Um, you know, our our core message is of helping dealers, you know, uh understand what they're buying before they buy it, you know, scan before you buy uh really is is hitting home with them. Uh our growth has been really fantastic, and we're and we're hearing not only the growth part of it, but the the stories we're getting from our new clients and the immediate impact they're getting in the first couple of months is really hitting home. You know, overall it's it's been an extremely, extremely positive trend. And, you know, that for me, the most important part is dealers are really, you know, telling us that it helps them avoid big mistakes uh and giving them the confidence to appraise vehicles accurately.

Jim Fitzpatrick 1:45

Yes, since uh being introduced to it in our last conversation, um I'm was like, where was this product when I was running dealerships? It could have saved me a whole lot of heartache and a whole lot of money at the same time. So give us an overview for those that might have missed our last conversation here on CBT News. Um, talk to us about uh and tell our audience about Blue Driver Max and what solutions that it does, in fact, um uh you know provide.

What Blue Driver Max Actually Does

SPEAKER_00 2:12

Sure. So Blue Driver Max is a uh professional grade diagnostic tool uh built specifically to help dealers and that at the appraisal or acquisition of vehicles. Uh this is not a consumer gadget that's been applied to you know the commercial field. This is purpose-built for the use case of helping dealers understand what they're buying before they buy it. It really provides them uh VIN level specific diagnostics uh with enhanced OEM module coverage. And that's that's really important because that's going to be where more of the uh expensive repairs actually happen. Oh, yeah. We cover 90 plus percent of OEMs across the vehicle car park that are out there. And we support, you know, being a f uh a uh pro product or a commercial product, you know, we we support all the B, C, U, and P uh as well as the non-standard OEM modules uh that are out there, um, giving you a full understanding of each vehicle uh that that you know you're being prevented with and knowing before you buy that vehicle. Yeah, we offer multiple scan types through the system that it makes it flexible enough depending on your workflow and the way you want to go about appraising each vehicle and and the depth of level if you want to understand the mechanical condition of that. We have multiple scan types to help you uh manage through that and conform uh or work with the process that you want to put in place, you know, at your body, at your shop itself. The key difference, you know, I guess across the board is that Max um looks not just at you know the current system here, it understands you know that what has previously uh happened with that vehicle, what's potential to happen with that vehicle, um, and and it helps you make an informed decision. It's not just giving you codes, but it's through our providing of you know estimated cost of repair uh and the parts and the labor that's involved with that. We can actually help provide guidance or help you make an informed decision, not just throw back some codes and say, here, we got issues with this car. We can actually go a little further, provide you insights into what potassium potential repairs are required with that vehicle, and then help you in make an informed decision.

Jim Fitzpatrick 4:23

Yeah, that's a that's a huge advantage. I spoke to one of your clients in anticipation of today's uh conversation, and they said that's really where the rubber meets the road is getting a clear understanding and a comprehensive understanding of the issues with that car. And I know as a former used car manager, you know, that that's not something you want to find out later when that vehicle is either dropped off, pulled up, whatever the case might be, to go, oh my gosh, what have I purchased here? It is a major gonna, it's gonna be a project car, right? So, how how has the the success of Blue Driver Max in online auctions impacted adoption among dealers?

Auction Success Spilling Into Dealerships

SPEAKER_00 4:56

Well, it's an interesting question. Uh, so we're I I'd say we're we're our coverage across the auction universe right now uh is is quite substantial. And we're starting to see um you know an over uh you know uh uh tailwinds coming into the dealer world where dealers are actually seeing our data or devices being used at the auctions, empowering condition reports and understanding of the reconditioning that happens at the dealership level. And that data that is being transferred into condition reports and other areas of the auction business are coming through uh on the dealer side. Now, and dealers are actually, you know, I've heard a couple of them re in the last few months of like, I see it being used at you know blank auction. And then uh, you know, I I want to have that same level of diagnostic capabilities. Is that something you can help us with? Uh and that's exactly the same device that are used across the auction, the same data analytics that are provided are being used through Blue Driver Max at the at the dealership level.

Announcer 5:50

Yeah.

SPEAKER_00 5:51

Not only at the trade-in level, um, but but also at uh you know, when they're out uh off-site looking at vehicles to acquire as well. And there's a lot happening with that um through the retail channels out there, customer homes, yeah, for sure, service lane, uh, off-site uh locations that we see Blue Driver Macs being used for to help them understand before they go further with any transaction.

Jim Fitzpatrick 6:14

Yeah, that that's fantastic. Last time we met, um, we discussed how Blue Driver was providing dealers with these solutions. Have you heard any news stories from the front lines? You just kind of mentioned a couple of them, but uh, what else do you hear out there from dealers? What kind of feedback?

Real Dealer Wins And Cost Avoidance

SPEAKER_00 6:28

Yeah, we I I I smile because we hear feedback all the time. Most of it's after a couple months. You know, my my more recent uh last time we started, I gave you an example of a client, a recent client that came to us because he got burnt on a transmission. Um, and we're seeing this um, you know, continue on. But more recently, uh literally last week, I was on uh with a with a Hyundai dealer that recently uh added Blue Driver Max. Uh he was second month in as a client. Uh, he came back for answer some questions around uh some training uh for his team on on the process, but he was relating to me that he recently got um Blue Driver helped them uh avoid an issue with an ABS system. Uh the ABS system caught um a uh uh a code, a DTC, uh that had a failure in the hydraulic pump motor circuit out of all, you know, it's like he would never have seen, you know, in his words, like I would never have been able to understand what the impact that was, let alone know that that was approximately a 20, a$2,000 repair to the ABS system. Yes, the the ABS light was on, but without that further understanding of really what was wrong with that vehicle and being able to get that immediate scan it, get that code back, and understand the the repair side of that to help them inform that conversation with that customer. So we you know that that is fresh off, you know, that is like literally last week uh conversation with the dealer. Um and we we hear uh other dealers, you know, after a few months is is really when they start seeing the impact to the bottom line. The first months or month or so, it's kind of like they get used and up and running. The second month they're making part of their process. And by the third month, uh we often see and hear from dealers, they are actually starting to see the impact to the bottom line when they're scanning every vehicle. When they are scanning every vehicle and they're catching those large mechanical issues, even the the Tucson example I just provided a second ago, you know, in in the previous world, that potentially wouldn't have been caught, would have gone to the bottom line as a$2,000 or so impact. Oh, yeah. Uh they missed.

Jim Fitzpatrick 8:38

Yeah. There goes the gross profit on that deal.

SPEAKER_00 8:40

That's exactly. And what we're seeing, what we're hearing is by the third month now is that dealers are coming back to us. It's like I'm actually seeing the impact of the bottom line. Yeah. When I start looking back on a historical basis, I'm not, you know, uh, there's less getting uh uh through the gaps in those what gets through is when because we didn't scan or we missed a step in our recon in our appraisal process. So it's nice to hear that you know uh the product market fit really resonates with dealers and that we are having uh meaningful impact, not only on a deal-to-deal basis, but longer term on the financial operations of that used car.

Jim Fitzpatrick 9:18

This is this is this is really a used car manager's and a buyer's best friend. Because as you know, that you know, you don't want to hear once that car comes through and it goes through the service center for a you know a full safety inspection or full you know checkout that you know, oh man, this car's got problems. It's like, what have I? It's really a reflection on that particular uh buyer or that used car manager that's running that department. Um like, how come you didn't know this? What you know, you you just bought a car that's got major problems with it. And no manager I've ever worked with, including myself, you know, out there uh purchasing vehicles wants to hear that. So I would imagine that it's it's it's really incredible. Now let me ask you, obviously, you go through NADA, dealers are buying tools you know all day long for them to run their businesses better. This isn't just another tool, right, to add to the list.

Integrations That Streamline Workflows

SPEAKER_00 10:08

No, uh it's not. Like we really pride ourselves on our level of integration and the ecosystem of data that we're able to share. Um, you know, be it our relationships with uh an AccuTrade or a V Auto and our ability to pass diagnostic data into their systems for appraisal purposes. We have a number of new um uh partnerships in the pipeline where the companies are looking to partner with us to actually take the scan data and ingest it into the workflow systems andor the appraisal tools that exist out there, the inventory management tools uh that exist out there. Um I'm looking forward uh for NADA to be announcing a bunch of these new partnerships that we have coming out. Um but it's very exciting to see the adoption that we have here. And my, you know, my goal through this is not only to make dealers more profitable and help them solve problems that are actually in their business, but not to have it as another step in the tech stack or the tool stack that they use, but to be able to use the data and integrate it with other systems that they use. I want this to be the first point of uh getting that data as part of that appraisal process and using that data throughout other systems so that they can make more informed decisions. It's it's a one step of data input and it carries through to help them run their operations. Uh so it becomes a real integration uh an ecosystem of data for dealers to operate their business. That's what I'm driving for through this. You know, I um ultimately it comes back to if they're scanning, the data can be used uh across the board. It can work in their workflow, it can work with the other systems or softwares that they use to manage their business. And we want to make it seamless for them across the entire work stream that they have to go through.

Jim Fitzpatrick 11:56

What early wins, financial, operational, or from a cultural standpoint in a dealership have you seen when dealerships adopt a mobile-first diagnostic approach in the acquisition process?

Standardizing Process And Training

SPEAKER_00 12:09

Yeah, that's a loaded question. I think um to begin with, we we talked about some of the financials immediately when, you know, uh earlier on with some of the anecdotal stories that I'm hearing from customers coming back here, especially around that two to three month mark when they've been scanning every vehicle, they do start seeing uh the impact on the bottom line. Like there is uh an immediate uptake with that. Um, you know, I think from the the workflow, you know, operationally a workflow perspective, when you we when you start your appraisal process by walking out and plugging Blue Driver Max into the vehicle uh and then doing that uh visual cosmetic inspection while the scan is running uh in parallel to it, you know, our systems are are consistent. And, you know, we are when you train this way for the full appraisal system and you get everybody doing it the system in the same way. The data that's being generated through our back end uh and our reporting capabilities really gives operators an ability to identify where gaps are happening in the appraisal process. We've had one group uh recently in a in a regional situation, he's been able to look at all his dealerships uh across the board. They're all appraising uh and scanning and appraising cars the same way now. They've adopted the same process. They've trained, we've spent hours working with them on training. They can now see the gaps and where things are falling through. And by having that standardized process, you can actually start building, you know, training and reinforced and identifying gaps uh by storage or even individually by some of the data that we are actually providing through our reporting system.

Jim Fitzpatrick 13:47

Oh, that's pretty cool.

SPEAKER_00 13:48

Who's scanning, who's not scanning, yeah, what you know, what's being caught, what isn't being caught. Um, it's actually quite amazing. Yeah, you know, it all comes back to building that using the tool and the process by scanning first. Ultimately, what we see is dealers, you know, having an impact on the bottom line, where uh improving the operational process when they're the when they're going through the workflow that we work with the dealerships to conform with, um, and ultimately it has an uh immediate benefit to that dealership's operations and they start seeing it, you know, really make a meaningful impact two or three months after uh you know they implement the system.

High Mileage Cars And Recon Speed

Jim Fitzpatrick 14:24

And I will tell you this uh that I've asked this question of many uh GMs, dealers, used car managers, and the and the question is for if a customer brings a car in and it's got 95,000 miles on it, and the car is three years old, it's out of warranty, the car's got 95,000 miles on it, but it's in really good shape, other than the mileage, okay? Technology is incredible. Cars are lasting much, much longer. Their technology in them is incredible. What are you going to do with that car? Because every one of them has said, Oh, we're gonna sell that car on the front line. We're gonna it's gonna be part of the used car mix that we're gonna sell. Well, you know, I maybe it's been too long since I've been running dealerships. We would have never kept that car, okay? But that is not the case today. Because of the demand for used cars and because of affordability and everything, every other issue out there, dealers are keeping those high mileage cars and reselling them, and consumers are feeling just as good about buying those cars. Yeah, they might buy an extended service contract, an FI forward, or whatever the case might be. But that means that a product like yours is even that much more important as a tool for used car managers and and uh appraisers to have, right?

SPEAKER_00 15:35

High mileage used cars is a great tool for dealers to help bridge the affordability gap. And part of that is that the cars that are coming into dealerships now are older than what they traditionally or historically have seen. Generally a five or six-year-old vehicle, they're familiar with those vehicles. But when those cars start going to six or eight, eight and a half years that are coming back in, it's been a while since those cars, you know, they a dealership has seen those cars, technologies change, products change. And that's where Blue Driver Max, as well as a consistent uh, you know, uh process of inspecting vehicles, comes into play to help and you know, to help understand what it is that you are getting and what you're gonna need to do to properly recondition that car, to put it back on that front line. And and not only that, Blue Driver Max can help reduce, get using the scan data and help reduce those recon days back to the you know, back to the front line. If you take that data, put it into a reconditioning tool like you know, repair 360, for example, you know, we can actually reduce the number of of recon days it takes to get that car from ingestion, a trade-in point back to the front line again. And part of that is you know, scanning the vehicle first, using consistent, you know, uh uh inspection process that everybody uses. You train it across the board. If someone new comes in, this is how we do things. This is we're gonna scan first, we're gonna do the cosmetic stuff uh second, we're gonna come back, have a standardized look of each used vehicle so we can make an informed decision on buying that vehicle, know what we can expect and plan what the outcome is, even as you're buying that car.

Roadmap, Arbitration Flags, OEM Data

Jim Fitzpatrick 17:10

That's that's that is fantastic. I don't want you to tip your mid too much before we get to NADA, but uh, is there anything new on the horizon for Blue Driver Max?

How To Get A Demo And Next Steps

SPEAKER_00 17:20

We have we have our roadmap roadmap is very full uh right now. I'm not not so much on, you know, I won't give away uh improvements and new stuff we're gonna bring for NADA, but I we have made uh significant improvements to our diagnostic report recently that's helping uh dealerships understand what's coming in, and we're gonna continue to evolve on that space as well, based on feedback from our customers that we're asking to see more. Um, one of the one of the more recent uh uh exciting parts that we're having lots of positive feedback on that we're asking to do more with is um we have an arbitration flag that happens through the diagnostic pool. So uh using NAA standards, we've been able to go back and map to uh identifying if there's an arbitration uh issue with that vehicle even before that. So part of the planning of knowing the exit of that vehicle, if it's going to retail or go to the auction, you know, you can make informed decisions about that and understand what has to happen with that car as you're ingesting it uh through there. We've uh recently launched um as we do uh a number, you know, each quarter we work to keep up to date with the car park and specifically the data we're getting from the OEMs. Our databases are built off of the libraries, the DTC libraries that come right from the OEMs. Wow. And they're constantly updating what's happening there. So we keep up to date with what's happening with their new protocols come out for the you know, the 25 and 26 vehicles, new library updates. It's quite amazing that kind of what we're doing that. And I alluded to a little bit earlier. We've done uh you know, foreshadowed a little bit, we've been working deeply with a bunch of partners. That's a bunch of new integrations to keep that data, you know, scanned once and be able to use that data across appraisal tools or inventory management systems or other software systems that are interested in that data. So we've been working a lot on that side of the world as well.

Jim Fitzpatrick 19:06

That that is great. Hey, before we close, what is the next step for dealers that you want uh, you know, if they want additional information for the dealers that are listening to us, have this discussion today?

SPEAKER_00 19:16

Thanks, Jimmy. Uh uh always uh blue drivermax.com or website. You can contact us through there. Uh if you'd like to schedule a demo or have one of us uh you know touch base with you. Sales at blue drivermax.com is the email address. Uh, you know, as we talked about in our last uh uh conversation together, literally we, you know, 15 minutes on the phone with us and we can walk you through um, you know, the the entire value proposition, how it works, and kind of what you can realistically expect when you integrate Blue Driver Max into your process and you scan first, you will see how it works. And you know, for those customers that use a V Auto or an AccuTrader, things like that, we can also help walk you through the integration and how it's going to show up in there. You know, uh at the end of the day, we will help you, you know, explain. demonstrate to you how the benefit you know is gonna play out for your dealership and how you will actually save yourself on each individual vehicle and then you know save that bottom line for you.

Jim Fitzpatrick 20:11

Yeah that that is fantastic. 25 years running car dealerships as many of as many of you know that watch my show and stay tuned to CBT News. I'm a car guy uh through and through and I've been in a position in my career many times running stores without I'm putting numbers on cars whether a used car manager new car as a new car manager as you know sometimes that's the case as well as a buyer and uh uh and I will tell you this tool I'm so impressed with if you do not contact Cole and his team shame on you not me because you've been told here about Blue Driver Max so thank you so much Cole for joining us on the show very much appreciated uh look forward to seeing you at NADA uh and uh catching up with you there blue driver max folks you can thank me later uh uh you send me some emails and let me know what you think of the product once you get it so thanks so much really appreciate it Cole thanks again thanks for watching Driving Solutions exclusively on cbtnews.com