As consumer belts tighten and the used car market stabilises following the post pandemic highs, dealers need to be confident they are putting the right price tag on vehicles.
Autofinity CEO Andy Whitehair said: “Underprice and profit margins suffer, overprice and vehicles sit around in group stock so getting prices right not just when a vehicle is first retailed but ongoing, is critical to used car retailing success. A more nuanced market demands continual reassessing of used car prices and dealers need to understand the trends impacting particular vehicles not simply the market as a whole.”
Retailers tend to rely on a mix of retail and trade pricing tools, local knowledge and specialist experience to value a used vehicle. However, getting the price wrong or failing to react to even the slightest of market changes could prove costly.
According to latest figures from Auto Trader, dealers are losing around £31 million in profit as a result of under-pricing high value stock. Auto Trader calculates that across 8,000 retailers advertising stock, 47,500 vehicles were priced below the average market price. This despite an increase of 6.9% year-on-year in the volume of searches and advert views in the first two weeks of 2024. Although the figures show a slight improvement on the beginning of the year when Auto Trader data suggested 51,633 vehicles were underpriced, dealers can’t afford to throw profit away.
Whitehair said: “Last year dealers faced used vehicle sourcing challenges on a large scale. This year, the market is already performing well with demand still higher than supply but, as Auto Trader reported, swathes of vehicles advertised at below market prices need to be addressed. We are likely to experience a much more stable market this year, even so, retailing vehicles at the wrong price will impact profits whether that’s because a sale is made below market value or a car is retained in stock longer than necessary.”
With vehicle pricing a delicate balancing act and makes and models affected by differing market factors as well as the broader economic and political climate, retailers need not only access to digital pricing tools but the ability to change their vehicles’ prices quickly and accurately across multiple online channels.
By combining an effective and efficient pricing strategy with a specialist integration platform such as ViHUB which pools vehicle data to create one rich source of information, automatically uploads amendments to online channels and provides exceptional and easily accessible vehicle inventory management, can be a game changer.
Whitehouse added: “Overcoming the issue of multiple systems operating in their own silos each collecting valuable data often fulfilling specific functions has additional benefits beyond creating one information depository which feeds all other channels including improving vehicle price management.”
Double keying, human error and the manual input required to make a single change to a used car vehicle’s listing aside, the ability to overlay the aggregated vehicle data with the retailer’s own pricing ‘rules’, empowers a more sophisticated pricing strategy. An automated red flag when vehicles do not meet any part of the dealer’s criteria whether that’s a pricing issue, lack of images or incomplete vehicle description, further improves vehicle data quality.
With its full visibility of a dealership’s or even a group’s inventory in one place, ViHUB puts dealers in the driving seat whatever factors are affecting the market or a particular make and model.