The latest results from the NextGear Capital survey have revealed that dealers are combining instinct with valuation tools to identify the best stock.
The results show that two thirds of dealers are relying on a mix of business instincts and valuation tools to ensure they source the right stock at the right price in a competitive used car market.
Last week AM reported on Cap HPI valuation data that suggested that retailers’ efforts to acquire affordable used cars for their forecourts have driven the sector’s vehicles to their highest February value growth since 2012.
And NextGear's latest survey demonstrated that dealers are not wholly relying on market data to make their stock buying decisions.
More than two thirds of dealers said they used company data or trusted valuation guides such as Cap HPI or Glass to inform their pricing decisions.
The survey also found that the most popular valuation guide is Auto Trader, with eight-out-of-ten dealers surveyed ranking the platform highest amongst the tools most regularly used. On the contrary, competitor websites and trade to trade platforms scored the lowest of the tools used.
Pam Halliday, NextGear Capital sales and marketing director, said: “It is encouraging to see dealers using a mix of valuation tools to complement their business instincts when determining stock sourcing and pricing decisions.
“While dealers know their own businesses better than anyone else, relying solely on instinct to be profitable is a risky strategy.
"Most dealers surveyed understand this and are using established tools such as Auto Trader and other valuation guides to gain the clearest possible picture when pricing and buying stock.”
The dealers surveyed said they are combining instinct with valuation tools in order to gain a ‘clearer picture’ on pricing, NextGear found.
Halliday said: “By taking this approach, dealers can obtain valuable insight on vehicle price, trends and supply that will enable them to source the best possible stock at the best possible price.
“It is also interesting to see how trade to trade online platforms are scoring low on the list of valuation tools used. This is not unsurprising given their relative infancy in the market and we expect to see increased uptake as they become more familiar with such platforms.
“Overall, dealers using data led strategies, including valuation tools, to understand both the market and their own business are most successful in generating the maximum profitability.”