When I was asked recently for my view on where values in the used car market would be in May I couldn’t give a simple answer.
It is never straightforward as the market is both complex and rapidly changing.
Trading conditions on forecourts are inconsistent and generally tougher than Q1, resulting in only very clean vehicles making guide values at auction.
Good news is likely to be sparse in the coming weeks and therefore I expect sales conversion rates to continue to perform below Q1 by between 15% and 20%.
The number one issue in the vehicle remarketing world is how to achieve best value for our sellers in terms of best price and speed of sale.
Put this in the context of a very difficult market and the critical questions that our sellers are asking are; how do we value the vehicle inventory and therefore set reserve values and when is the optimum time to sell?
Unfortunately, there is no silver bullet for this conundrum.
Knowledge, in the form of accurate inventory information that includes general and vehicle specific market data, best bid, vehicle condition and stock ageing will provide a context for setting a market based and vehicle specific adjusted reserve value rather than the alternative of relying on a general guide price.
The more fluid the process, the more accurately each vehicle can be priced.
Additionally, I believe it is increasingly important that vehicles are positioned in the remarketing channels that maximise exposure of the vehicle to the most attractive buyer segments and that should now include physical auction, live auction and internet sale.
However, this requires constant monitoring that can be fed back to the seller, ensuring they keep control of their inventory.
It also requires their remarketing partner to facilitate the process with robust infrastructure – systems, data and insights that enable sellers to augment their own systems, providing an information loop that reflects the market conditions, real-time.
It isn’t a silver bullet but it is a solution that offers the most flexible, responsive vehicle remarketing strategy to a complex and rapidly-changing market.
by Tim Hudson, managing director, Aston Barclay