Automotive Dealers have done very well over the past 18 months in the Used Car market. We are seeing used car retail values at their highest and each month the year-on-year valuations continue to increase at circa 5%. Dealers who have capitalised on this opportunity are making very good margins from their used car sales.
The following graphic demonstrates the pace that the market is moving at, e.g. On Petrol cars, year on year growth for October of 26% has been surpassed again by 29% for November. Its very hard for dealers’ sales managers then to stay with the market and maximise the profit opportunity that is available to them. One of the main causes of this is the availability of accurate market data that can be translated into actionable insight. For a dealer group or used car supermarket carrying a large quantity of stock this missed opportunity is amplified due to volumes of stock and the time and resources required to review prices.
What is RWA PriceSmart?
RWA PriceSmart provides insight on used cars to group and dealer sales managers as to how they are performing against the market and also what opportunity is currently available within their current stock.
RWA have been working closely with Auto Trader to make their data more actionable for sales managers. Auto Trader’s Retail Accelerator product provides retail metrics for every vehicle that is uploaded onto their portal. Some key metrics available include:
- Retail Rating – Desirability of a vehicle at variant and plate level
- Retail Valuation both nationally and locally (50-mile radius of advertising dealer)
- Average Days to Sell both nationally and locally
- Performance Rating of the vehicles ads
Dealer groups typically apply a strategic pricing policy across their stock primarily using the Local Retail Rating. This can be based on adjusted for the dealership location, brand, age of vehicle, days in stock or a combination of all. RWA can overlay this pricing policy over the retail valuations and current advertised price to ensure your vehicles are priced accordingly.
How does RWA PriceSmart increase my profit margins?
Having actionable information made available to the right people at the right time ensures that no opportunity slips through the cracks. RWA provide two ways for information to be consumed, one is via interactive dashboards that allows a user to review their Sales performance versus the market and analyse the opportunity that is available from their current stock holding. Users can then drill down to the required level of detail in order to make an informed decision on pricing a vehicle.
The second is via exception reports that are automatically shipped to your dealers. These exception reports serve up a list of vehicles that are either under or overpriced by a certain threshold. With managers having to spin so many plates, these exception reports highlight any vehicles are out of kilter with their policy price and a decision can be made on these vehicles and a manager can be confident that all other vehicles are correctly priced to sell without needing to check them each day.
What about when the market begins to slow down?
A historical view is available to see how vehicles are trending in terms of their valuations and their retail ratings. Using this information, we can see when valuations are beginning to cool at various levels, Total Market, Brand, Model, derivative and plate. Not only can this information be used for reviewing market trends, but also assist with decisions around purchasing of vehicles.
If you would like to find out more about how RWA PriceSmart is helping dealer groups maximising their used cars opportunities, please contact us or email email@example.com / call 0808 1890 617.
About Real World Analytics
Real World Analytics 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.