Leveraging New Tech for Better Key, Vehicle Management

Key management is a crucial aspect of running a smooth and secure dealership operation, securing vehicles on the lot and helping dealerships operate efficiently.

But all too often, key management is lacking or even missing at dealerships. The missed precaution results in unnecessary expenses and lost sales that erode dealerships’ profitability, says Patrick Hauert, senior vice president of product and marketing at Kudelski IoT.

When a key or key fob is lost, key-replacement costs can run from $12 to $220 per key and $49 to $550 per key fob. The cumulative cost of losing those can add up. A dealership that loses 10 keys in a single month might spend up to $5,500 to replace them, Hauert explains.

To avoid such an unnecessary expense, dealerships need an effective key-management program that includes:

• Maintaining a detailed and organized inventory of all keys, including keys for vehicles on the lot, the service department, offices and other areas
• Labeling or tagging each key with clear information about the associated vehicle, including make, model, vehicle identification number and stock number
• Keeping keys in a secure and locked location, like a key cabinet, safe or designated key room, accessible only to authorized personnel
• Logging and tracking key access in a detailed record of key check-outs and check-ins, including the name of the employee, date, time and reason for key use

However, even with such measures are in place, dealerships still may regularly lose keys, Hauert says. 

“The No. 1 problem in many dealerships is finding keys,” he says. “We have talked to dealerships that were losing four to five set of keys a week, which gets quite expensive when you consider the replacement costs. Then there is the time staff spends looking for those keys. It can take up to a half hour or more to locate a missing set of keys, if they are lucky. This lost time means they are also missing out on the sale because the customer may move to another car or, more likely, another dealership.”

The knowledge that dealerships can lose thousands in profits annually due to key loss led Kudelski IoT on a quest for a tech solution. The result of its efforts was a key tag – RecovR for Keys—that leverages the Internet of Things to ease the common problem. The new technology, he says, improves dealership key management, enhances the customer experience, and offers dealers a valuable technology solution and key-replacement program.

Dennis Gingrich, sales and finance director for Sacramento, Calif. luxury car dealership Niello Company, adopted RecovR for Keys after its October release and says he quickly reaped the benefits.

“The time saved on locating keys and the reduced costs of key replacements have transformed our operations,” he says. “From a customer standpoint, the difference is also palpable. Test drives start quicker, vehicle turnaround times are reduced, and overall, the purchase process is smoother and more enjoyable.”

RecovR for Keys, Gingrich says, reduces the time his staff spends looking for keys. Now Niello Company employees know exactly where keys are at all times.

Lost

Kudelski IoT discovered the need for better key recovery as the company worked to help dealerships address issues with stolen vehicles.

“During the deployment of early-stage technology at an Audi dealership, we discovered the biggest challenge was locating keys to open cars and install GPS trackers,” Hauert says. “We quickly realized we needed to do something about dealerships’ key-management problem, as well address auto theft concerns.”

He says the company added RecovR for Keys to its existing product line, including the RecovR for Vehicles GPS device, which helps manage dealership inventory and retrieve stolen cars fast. Both products rely on a wireless, battery-operated locator device that can be installed in vehicles or on keys and that the company says lasts for years.

The new RecovR for Keys devices operate much like Apple AirTags or Tile Trackers, which use IoT technology to help people find phones, keys and other personal items.

“Most people are familiar with AirTag or Tile Trackers. Both of these solutions work with an app on a mobile phone,” he says. “But they were not designed as a commercial solution. AirTag and Tile won’t work with 500 to 1,000 keys across multiple locations. We have designed a product that works at scale to handle a large volume of devices in a small area.”

Tile and AirTag trackers also work only a mobile phone, while the RecovR for Keys and RecovR for Vehicles devices work across multiple platforms and dealership systems, Hauert says. “You have more gateways and collection points to receive RecovR information.”

Though many dealerships have modern key-storage solutions in place, Hauert says keys and key fobs still end up in staff desk drawers, pockets and even homes, which can cause significant delays or even make it impossible to sell cars. Security systems exist, but vehicles still get stolen off dealership lots.

The new solutions give dealerships access to a smartphones application integrated with their dealer management systems. The technology helps staff efficiently locate keys and vehicles from their phones or desktop computers. “The technology frees staff to focus on what really matters, sales and customer satisfaction,” Hauert says.

With RecovR for Vehicles and RecovR for Keys, GPS locators and key fobs are equipped with long-range tracking devices that monitor whereabouts at all times, Hauert says. When keys are lost or vehicles are stolen, employees can see their last known location on screen. To find missing keys, they simply push a button to activate a flashing light and audio signal on the key tag to help track them down. Activating “Theft Recovery Mode” on the RecovR GPS device allows the dealership or the car owner to share tracking information directly with law enforcement to aid in recovery.

ROI on Recovery Tools

Combined, the products offer an attractive return on investment for dealers and consumers, Hauert says. Consumers gain access to a key-replacement program, stolen vehicle recovery program, and roadside assistance.

Dealers can profit from selling both options to customers, making it a new revenue stream. They set the price that their brands and markets will support, and customers usually pay $700 to $1000 on average for RecovR for Vehicles and $500 to $800 for RecovR for Keys. Kudelski IoT shares in those profits.

The program is free of charge for the dealerships, more than 900 of which Hauert says would deploy RecovR for Keys by the end of 2023. Kudelski IoT's payment is dependent on dealerships selling the company's products to customers.

“We monitor their penetration rates and look for dealerships that should have a fairly high percentage of penetration,” he says. “As long as they maintain the agreed penetration rate, then it’s free to them.”

Kudelski IoT provides training to dealerships on selling and using the products. “Because dealership rotation can be high, we return to retrain their employees regularly to ensure they understand how to use the products for their own benefit and to keep their penetration rates high.”

He said the RecovR app and portal allow consumers and dealerships to see all of their cars and keys in a single glance. The only difference is that dealerships can see hundreds of vehicles or keys at the same time, while consumers can access only their own keys and vehicles.

Bundled With Vehicle Recovery

When consumers buy both products bundled with roadside assistance and a key-replacement program, they drive away knowing that should their vehicle be stolen or they lose their keys, they will be recovered or the replacement paid for.

RecovR for Vehicles is an easy sell to many customers because vehicle thefts were up about 34% year-over-year in the first half of 2023, Hauert said, citing a Council for Criminal Justice statistic based on data gathered from police departments. “In fact,” he says, “major cities like Chicago have seen a 139% increase in the past two years, with dealerships and service centers being a prime target.”

Of those stolen vehicles, Statistica 2022 research finds that just 46% are ever recovered. But 94% of stolen vehicles equipped with RecovR for Vehicles devices are recovered within two days of being stolen, according to Hauert. And the RecovR limited warranty offers customers $6,000 toward a replacement vehicle if recovery efforts fail.

RecovR for Vehicles also installs easily, he says. The global positioning system tracker operates on its own battery, which has a five-year warranty, so it isn’t necessary to wire anything into the vehicle. Other devices on the market must be wired into the vehicle because they derive their power from the vehicle battery.

“You don’t void any warranties because you are not touching the car,” Hauert says. “You scan the barcode on the back of the device, then scan the VIN code, place it in the car, and you’re ready to locate the vehicle whenever you need to. If a customer suspects their vehicle has been stolen, they can trigger Theft Recovery Mode, which triggers more aggressive communication with the device. Our theft recovery team then helps track the asset and locate the vehicle, even coordinating with law enforcement if needed.”

If customers opt out of the service, dealers can easily extract the device and put it in another vehicle on the lot. “One of the main inhibitors of these devices in the past was the costs and time to wire them into the vehicles,” Hauert says. “We’ve removed that concern because you can install or remove it in less than 30 seconds.”

Both dealerships and consumers benefit from the tool, he says. “Dealerships tend to reach out to us after they’ve had a car stolen by thieves, often by organized crime,” he says. “But it’s better if they call us before it’s too late. For one of our customers in Colorado, we were about to successfully recover eight out of nine stolen vehicles for them in their first year with us. Combined with the money they made from RecovR, we think that’s a pretty convincing value proposition.”

Ronnie Wendt is an editor at F&I and Showroom.

Originally posted on F&I and Showroom