Every dealer wants to grow used car profits but it is a challenge to execute. It involves sourcing enough cars to meet your stock budgets at a cost to market price that ensures a strong return profit. It’s crucial to be ruthlessly efficient in prepping, pricing, and selling within your target days to minimize depreciation and interest costs that will eat into your profit. It sounds simple but delivering this consistently is easier said than done.
The UK dealer network has transformed how it maximises used car profitability in recent years. They have achieved this through the utilization of pricing policies; primarily based on Autotrader retail ratings, days to sell, location and BEV/ICE. There is still further opportunity to drive additional profits within many AM100 dealer groups by implementing and revising policies more frequently. Many have seen incredible results from adopting pricing policies. For example, Steven Eagell sold their vehicles at £3M above the AutoTrader valuations in one year after using our used car tool, PriceSmart. PriceSmart equips dealers with the information they need to boost their used car profitability by utilizing pricing policies.
Sourcing cars effectively could almost qualify as an Olympic sport! Demand continues to outweigh supply, so empowering your teams to be prepared and investing in data analytics will deliver a needed competitive advantage. PriceSmart’s new Buyer’s Module simplifies used car buying for dealerships. It facilitates an easier process for acquiring stock by combining multiple data sources. You’ll be able to check a vehicle against market valuations, AutoTrader Retail Ratings and your own pricing policy. This will enable your team to see the likely selling price of a vehicle should you acquire it. By empowering your team with this data, purchasing the right stock with the right margin percentage will become the norm.
Our newest module first identifies a shopping list based on the dealership’s own sales history. It will create a supplementary list of cars that have sold fast or have higher retail ratings which the dealership could sell.
The best source of used cars is part exchanges. Our data benchmarks tell us that between 70-75% of new and used cars sold should have a trade-in. This should be set as your target. Our new part exchange analysis feature will keep track of what you’ve got coming in through trade-ins, showing you the price paid, and alerting you should you need to trade it on early to recoup costs.
We will also look at the local market to identify any relevant low stock available, always applying your policy so you know where you will start day one. Your team will receive daily opportunities to pursue, saving them hours of manual searches on AutoTrader for under priced vehicles.
What about cars available via auction? Upload a bulk list and filter against your requirements, based on how much you can afford to pay to make your target profit. It will also take your pricing policies into account. No more late nights pouring over auction catalogues! On top of this, we’ll show you all service customers due in, making it easy to identify if an offer should be made directly to the customer to acquire their vehicle. If you already know what performs best, vehicles due in for service become a targetable shopping list for your sales team.
As the leading innovator partner in this space, we understand that maximizing used car profits has many moving parts. This is why a sophisticated but easy to understand data driven approach will deliver the best results. We facilitate policies on over 110,000 cars each year, of which about 75% of these are sold very efficiently on policy. You’re already in planning mode for 2025. The game plan is to track trade-in percentage and cost of market percentage across each sourcing point. Track delivery and prep days / costs to optimize days to sell with sophisticated pricing policies.
On top of all this, you need to ensure that these are effectively implemented to a 75% pricing policy compliance. This is the key to mastering the volitile used car market. Remember, if vehicles are bought at the right price, you should be more protected should the market drop severely. Finding the balance is far easier to acquire and maintain with a business intelligence tool like PriceSmart as it uses all data at your disposal to empower your team to make the right buying decisions and exceed your 2025 targets.
Interested to learn more?
Interested to learn more?