In the business world, people use stock market data to see how businesses are doing. If profits for a business are going up, they will invest in those businesses and buy shares. If the profits go down, they might stay away from buying a share. This is similar to car dealers using auto market data when looking to buy vehicles.
Although Big Valley Auto Auction isn’t an expert in the stock market, we’ve been experts in the automotive market for over 15 years.
In this article, you’re going to learn what key points of market data dealers should focus on before buying, the importance of each point, what patterns to look for, and the apps available to help you keep up with market data.
What Key Points of Market Data Should Dealers Focus On?
Dealers should focus on five key data points to make informed buying decisions:
- Year
- Make
- Model
- Miles
- Condition
How Do These Data Points Help Dealers?
Understanding these points helps dealers in 3 ways:
- Market Trend Knowledge
- Pricing Strategy
- Inventory Management
Market Trend Knowledge
Keeping up with current market trends helps dealers decide which vehicles to buy and which to avoid. This is good for determining the potential resale value and demand for certain vehicles.
Pricing Strategy
Current numbers help dealers prepare a pricing strategy to prevent overpaying for vehicles and potentially lose profit.
Inventory Management
Market data helps dealers manage their inventory effectively. For example, if a dealer bought inventory one week and it hasn’t sold for 2-3 weeks, they may end up with a large part of their lot occupied by undesirable inventory.
What Market Patterns Should Dealers Pay Attention To?
Dealers should pay attention to 3 main market patterns:
- Book value
- Components that fit their program
- Economy
Book Value
Book value is the current market value of vehicles determined by industry standards.
Components That Fit Their Program
Different types of dealerships, such as Buy Here Pay Here dealerships and Finance Only dealerships, need to understand patterns that are specific to their business models. (This is like an exercise plan. A program for someone trying to lose weight should keep track of different result patterns than someone trying to gain muscle.)
Economy
Dealers should pay attention to patterns in the economy. Fluctuations in the economy can significantly impact vehicle sales and market demand. The most recent example is the 2020 pandemic. A major factor like a pandemic can scramble all future market data.
Another economic factor to look out for are gas prices. Changes in gas prices affect consumer preferences. For example, if gas prices were low last year but have increased since then, dealers may avoid purchasing gas-guzzling vehicles.
What Apps Can Dealers Use to Track Market Data?
There are 2 types of apps available to help dealers track current market information:
- Dealer-Only apps
- Free apps
Dealer-Only Apps
Apps such as MMR (Manheim Market Report) and NADA (National Automobile Dealers Association) are available for registered dealers. These apps provide comprehensive market data but require a paid subscription.
Free Apps
Kelly Blue Book is a free app that offers reliable market value information. There is no paid subscription required and available to both dealers and the public.
Do I Understand How Data Can Help Me Make More Informed Buying Decisions?
Just like business people follow current data and information in the business world to buy stocks, car dealers can do the same when deciding to buy vehicles.
If you’re a registered dealer looking for inventory, you can click the button below to speak with our dealer registration specialist to get you registered with Big Valley Auto Auction.
Not ready to talk? That’s okay! First, learn more about what it’s like to buy and sell at Big Valley Auto Auction by clicking the image below:
