As used cars crowd lots, dealers look for easier ways to make hard decisions
The automotive industry has yet to feel the full effects of the COVID-19 pandemic, but a recent trend of new car sales has left some dealers scratching their heads over what to do with an influx of used cars. With much of the country still shopping from home to help stop the spread of COVID-19, and fresh financing incentives available on new car purchases, it’s no surprise that customers are choosing to buy new vehicles in favor of pre-owned. And when it comes to deciding what to do with their current cars, more and
A healthy used car inventory can normally be a good thing, but what happens when things aren’t so normal? Changes in the market environment have analysts at JPMorgan predicting that used car prices could plunge more than 15 as demand for vehicles plummets**. Dealers need to take a closer look at the cars that are being traded in to allow for the full potential of getting those used vehicles sold faster. Being able to value and price used car inventory quickly and accurately will help dealers decide whether to keep the car on their lot or send it to auction. By failing to make the right pricing and stocking decisions, they could see yet another stream of revenue dry up.
in helping dealers determine pricing and stocking decisions. Trusting your gut to value and price inventory isn’t going to work in today’s unprecedented times. Appraisals need to happen fast to keep a sale moving along. They also need to be accurate to help determine if a vehicle should stay on the lot or head to auction.
Dealers must also account for the cost of reconditioning the trade-in vehicle as part of the overall value.has become a part of reconditioning a car, as well as part of the test drive process. Alleviating customers’ worries builds upon the customer relationship and experience at a time you need it most.
The market competition for used cars is sure to heat up. Dealers need multiple resources for data to price and move cars because of the volatility and uncertainty. Reviewing current inventory, historical data, and competitive market statistics is crucial for dealers when evaluating trade-ins — especially when sending a higher volume of cars to auction may no longer be as lucrative an option.
For dealers looking to send cars to auction, speed is an asset. The ability to instantly launch vehicles into a virtual auction and receive bids within minutes of taking a trade-in helps dealerships sell more cars and get customers the value they want. Reviewing trade-in data and comparing it with historical data from Manheim and Adessa is important for dealers looking to optimize their approach to pricing auction sales.
In order to keep up with the number of used cars coming on to dealerships’ lots, the vehicles that are being traded in must be tightly valued.Without using competitive, historical and auction data to help determine the price, and willingness to keep a vehicle on the lot, dealers can end up buried in vehicles with slow turnaround times and decreased profits. If you’re looking to turn lemons into lemonade this spring and summer, you need to start with solutions that allow for more mobility. Anyone on your team needs to be able to easily go to a customer’s home and take photos. Access to comparison data needs to be right in your pocket. Maintaining competitiveness and protecting profits may not come easy during this time, but with the right tools you can get the help you need to make the right decisions.