Do the used car price guides help you keep on top of profitability in used cars?
The majority of dealers are not using price guides to help keep on top of profitability on used cars, but not all are willing to disregard them completely.
The variations on prices between different guides and the speed at which they can take effect on fast moving markets where some of the reasons against their use as a profitability tracker.
One dealer said: “Used cars are now priced via online sales channels , predominantly the ones who have us in a stranglehold.”
Another dealer said: “They rely too heavily on past trends and use too many statistics. They should network more comprehensively to gain an understanding of today’s market, which has changed. You only have to look at the vast differences in values to see they are out of touch.”
Traditional print cycles were also blamed for incorrect prices, however products from Glass’s like Radar and Auto Trader’s Profit Indicator dealer portal app were both highlighted as going some way reveal “real time prices”.
Response from the guides
Mike Hind, CAP communications manager, told AM: “The poll results are no surprise to CAP because they go to the heart of why we have developed Black Book Live.
“Pricing information that is only published 12 times a year is inevitably out of date as soon as the market moves in either direction.”
Hind said CAP recognises that today’s market demands today’s information.
He said: “We have long recognised the importance of satisfying that demand, which is why we moved several years ago to daily updates in new vehicle data.
The principle is the same for pricing. Our customers demand more timely information than ever before so, from May, customers who subscribe to Black Book Live will have real time access to the latest researched CAP prices without having to wait for the next book.”
Hind said that the Black Book live process would help to release CAP’s editors to spend more time and get closer to the marketplace.
Vik Barodia, Glass’s dealer director, told AM: “Glass’s has recognised that there is a shift in the way dealers are doing business – in that the retail value of any vehicle is gaining greater prominence. To this end, Glass’s is overhauling the way we value vehicles and dramatically changing its offering.
“We’re already live with GlassNet Radar – an online tool that offers the accurate retail spot pricing in, based on a multitude of retail price observations.
“In addition, spot prices are updated daily, and because of this, GlassNet Radar can provide detailed insight into what is really happening in the used car market in a dealer’s local area, allowing them to compare their own prices against competitors, locally and nationally, right down to the detail of how long the car has been on the market and how many price changes it’s had.”
Barodia said Glass’s had sold nearly 1,000 licenses in the last three months, confirming there was “very real demand for spot pricing”.
He also said it was important to remember that guide values are part of a chain of transactions, whether a dealer is acquiring or remarketing a vehicle.
Glass’s will be “overhauling” its valuation engine and Barodia said the impacts of that work will be seen in its products later in the year.