In the heady days of 2021, average GPUs of £2,000 were normal, boosted by a market valuation increase of £500 per car in the average 60 days that it was in stock. That was an extra 0.5M profit growth for every 1,000 cars that were sold.
2022 is looking different. In Q2, we are now looking at a typical £300 - £700 depreciation on each car in the typical 70 days between buying and selling. This means GPUs are now tracking 1000-1500 per car and on less volume.
In this video below, you can see this tracked in real time:
Here we have 4 recommendations for dealer groups to maximise your used car margins for 2022:
- Maximise your stockturn, especially on cars with low retail ratings. Aged stocks are not your friends in a declining market.
- Continue to maximise your margins on the cars with a high retail rating.
- Maximise your upsells with good processes, training & league tables
- Buy your cars based on future values, not current values.
If this is a strategy that you would want to execute on this year, then RWA’s PriceSmart tool is specifically designed to take your used car business to the next level. With this, you can profile your whole forecourt in 60 seconds and:
- Understand how the market movements are affecting you
- Develop a data led pricing strategy
- Execute very effectively on the strategy
- Save time (6 mins per vehicle) on Autotrader Portal by only looking at exceptions.
How to generate a Pricing Strategy? Click here to watch
The used car marketplace is extremely dynamic – each car’s desirability and valuation change every single day. Business Intelligence (BI) solutions like RWA PriceSmart provide insights on used car sales to your group as to how you are performing against the market and what opportunity is currently available within your current stock. It helps you automate the process to get your price right and sell fast using your data on Autotrader. Dealers who are utilising this module have gained an extra £300 per car after implementation and after allowing for the market movements.
About RWA Automotive
RWA Automotive provides a cloud-based Business Intelligence (BI) solution that helps you become a complete data-driven dealer group. By bringing all your data into one place and delivering actionable insights to different levels in the business, everyone has the right information at the right time to do their job efficiently. The management will be presented with executive dashboards where they can drill down to the details for further investigation. Your managers in the outlets get reports such as DOCs delivered to them automatically so that they can action issues on the spot. The solution is designed to help you stay on top of your business with all the information you need at your fingertips.