From the 1930s to the 1960s, jazz music ruled the world. But when the 1960s began, The Beatles started a new mainstream trend in music, replacing jazz as the latest craze. The popularity was measured by looking at the songs on top of the music charts and the best selling albums. That’s the same relationship market reports have with vehicles in the automotive industry.
For nearly 2 decades, Big Valley Auto Auction has sold a variety of vehicles to registered dealers. Throughout these years, we’ve seen multiple trends in the auto industry and how it impacts a dealer’s interest in a specific make or model. To help keep dealers up to date, we’ve used market reports in our pricing, buying, and selling process.
Let’s take a look at what a market report is, why it’s important for auto dealers, the role it plays in pricing your inventory, and how you can get access to one.
Once you finish reading this article, you’ll have the information needed to decide if a market report will, or will not, be a useful tool for your next auto auction.
An auto market report is a compilation of the value of vehicles, based on current trends. This gives dealers an idea of what their inventory is worth. Market reports determine a vehicle’s worth using factors such as a vehicle’s make, model, trim level, mileage, condition report grade, and region. If you bring in a vehicle that’s listed as $8,000 on a market report, it’s because that’s how much that specific model has recently sold for. Its current value is $8,000 and that’s what most bidders would be willing to pay for it.
This is helpful for buyers because it prepares them when setting a budget. If a buyer knows beforehand what a vehicle is worth, they’ll have an idea of how much they’re going to need in their account.
Market reports also help sellers in knowing when and where they can get a better deal on their inventory. If sports cars are popular at the moment and you have some on your lot, that would be the best time to sell. Sellers can also use market reports to accurately price their vehicles. Knowing the market value of a vehicle will allow them to set a realistic price on their inventory.
Market reports play a role in pricing a vehicle by determining its current value, based on recent purchases of similar vehicles. Another factor considered when using market reports to price your vehicles are the time of year and the region you’re located in. For example, Summer months like June through August are slow periods for auto auctions. During this period, prices for vehicles might not be as high as you’d hope, due to people not buying as many vehicles as other months. But once August begins, dealers begin to stock up on inventory for winter.
Location is a factor because certain types of vehicles sell better in certain parts of the country. If you’re from Florida, but you’re looking to buy a pickup truck, chances are you’ll find a bigger selection of trucks at a Texas auto auction, where trucks are very popular. A real-life example of the importance of using a market report was when a dealership in Hawaii shipped vehicles all the way to Florida, just because the vehicle’s market value was higher in that state. Knowing the vehicles would sell for more than in their home state, the dealer was willing to ship some inventory across the country.
The market goes up and down, but the value of your vehicle slowly depreciates the longer it doesn’t sell. If you’re trying to sell a 2019 Ford, it’s going to be worth the 2019 price. It’s also best to sell as soon as possible. If you get a bid that’s close to the market report listing, it’s best to accept it. Holding on to the vehicle for too long and running it more than once would potentially lead to lower offers, costing you a profit.
You should also keep in mind that market report information is one week behind. The prices they display for vehicles are based on what those vehicles sold for the week before. While market reports are a good tool to gauge a vehicle’s worth, they’re more of a prediction than a guarantee.
One way to access an auto market report is by using Manheim Market Report (MMR). This tool is the most trusted in the auto auction industry, and is used by all NAAA auto auctions, as well as Big Valley Auto Auction. We use MMR to calculate the price of each vehicle brought in, to inform dealers how much their inventory is worth.
A website such as Used Car News keeps dealers up to date with what’s going on in the auto industry. The website features informative stories regarding vehicle recalls, pricing dips, economic updates and financial news.
Magazines like Texas Dealer and Auto Remarketing are also good sources of current auto information. They discuss trends in the market, issues in vehicle production or supply chain, predictions, and insight from other top dealers in the automotive industry.
Signing up for Big Valley Auto Auction’s mailing list can also give you access to a weekly market report, which will keep you updated with market trends, inventory selection, and pricing.
If you believe your inventory consists of the latest trends in vehicles and they’re what everybody wants, then a market report may not be of much importance to you. However, if you want to be sure how popular your vehicles are in your area, and how much they’re worth, then market reports are your best friend.
Whether you’re new to auto auctions or you’re preparing for your next, you can use this article as a guide to help decide if using a market report will benefit you.
Now that you know what a market report is and its importance in the automotive industry, learn what other factors dealers consider when pricing their vehicles.