Dealers mixing valuation tools with instinct to source the best stock
In an increasingly competitive market, it’s important for dealers to use every tool at their disposal to source the right stock.
One of the key factors for turning a profit is sourcing the right stock at the right price. We explore the tools available to dealers and discover how they are combining data-led solutions with their own business instincts to achieve the best results.
The days of dealers solely relying on their instincts to achieve the best sale on a vehicle are long gone, or at least they should be. Relying on intuition can only take you so far. With many different forces at play in the used car market, it can be difficult to keep track of prices, demand, and changing consumer trends.
However, with an increasing array of valuation tools and data-led resources available to help make smarter choices when buying stock, there is little reason for not taking a more informed view when making pricing decisions.
Dealers see the benefit in valuation tools
Our latest sentiment survey results show that dealers are taking valuation tools on board. Around two-thirds who we surveyed said they rely on a mix of their instincts and valuation tools to source the right stock for the right price.
The most popular valuation tool used was Auto Trader, which is a great example of how digitally based, data-driven platforms can offer a goldmine of information to dealers. Over 80% surveyed reported regular use of this platform.
As the UK’s largest digital automotive marketplace for new and used cars, Auto Trader is a key strategic platform. When it comes to pricing and sourcing stock it provides valuable insight for dealers, both within their own locality and across regional territories.
It gives dealers instant and comparative pricing across a range of vehicle models and helps to supplement their own local market knowledge when making pricing decisions.
There is also news, car reviews and insightful commentary from a range of automotive and industry experts, that when viewed collectively help further inform dealer knowledge of the market.
Trusted industry guides remain popular
While Auto Trader topped the charts as the most popular valuation tool, company data or trusted valuation guides such as Cap HPI or Glass also scored well with dealers.
Both Cap HPI and Glass’s Guide have well-established reputations as the industry’s benchmark for used car prices and so it’s reassuring to see the majority of dealers utilising them.
One interesting result from the survey was the relatively low number of dealers using trade to trade online platforms, with only around one in ten dealers going down this route.
This is not surprising, given the relative infancy of platforms such as Dealer Auction. Launched last month, Dealer Auction draws on the real-time data capabilities of its two partners Cox Automotive UK and Auto Trader to provide dealers comprehensive insights into the vehicles available and desirable in wholesale and retail markets.
It’s expected to achieve more than 190,000 used car trade transactions this year. The platform’s functions include estimated retail margin and a ‘retail rating’ of desirability with a 50-mile radius of the buyer, all pulled from Auto Trader’s market data.
Once dealers become more familiarised with such online trade platforms, their usage is expected to increase as dealers realise how valuable they can be.
Data plus business instincts equal profitability
Dealers are increasingly using valuation tools to help inform their pricing decisions as they combine a data-driven approach with their own business instincts and knowledge. It’s a sharp approach, as for a relatively modest investment, valuation tools can deliver a competitive edge.