How do today’s top dealers stay those crucial few steps ahead of their competition?
Two words: better data.
Better data allows dealers to buy the right inventory, price it competitively, and still maintain their profit margins. It’s the key to achieving high gross and high turn — the new winning strategy for modern dealers.
Without better data, dealers are left guessing and competing in a race to the bottom on price.
Better data isn’t just comprehensive, but updated in real-time, too. Dealers should look for a market intelligence tool that gives them the breadth and depth of insights they need.
Below, we’ll look at some of the critical insights that dealers can draw from these tools. We’ll also look at how VinCue, one of the most comprehensive platforms on the market, delivers this data.
- Inventory Turn Rate
- Real-Time Appraisal
- Optimized Sourcing
- Poach Report
- Best-Selling Vehicles
- Local Market Supply & Demand
- Precision Advertising
Inventory Turn Rate
Inventory turn rate is one of the most important indicators of a dealership’s health. Dealers want to keep their inventory as fresh as possible, which means keeping their inventory turn rate low. The ideal turn rate is 30 days.
If a dealer’s inventory turn rate is too long, it means that something is not right with the business model. It could be that your marketing is off, or that you’re not stocking the right vehicles.
VinCue lets dealers stay on top of this by displaying the average turn rate of both their new and used vehicles. Users can see how long their inventory has been on the market, and how long it’s remained at its current price. This helps dealers accelerate their turn by identifying slow-moving vehicles.
Accurate vehicle appraisal is critical to the success of any used car program. Because of its impact on a dealer’s bottom-line, a flawed appraisal strategy can mean serious trouble in the long-run.
Dealers should evaluate each vehicle based on it’s expected turn rate and desired margin. To accomplish this, it’s important to factor in every pricing variable. These include:
- Average Clean Market Price
- Odometer and Condition
- Trim Level
- Reconditioning Costs
- Price & Turn of Similar Vehicles in Your Area
Many dealers still rely on major pricing books for appraisal. However, this information can be inconsistent and varies between markets. The strongest approach to appraisal is one that relies on real-time market data.
VinCue’s appraisal tool gives dealers access to real-time wholesale and retail pricing based on hyper-local sales data. This makes it easy to determine the optimal price point that maximizes margin and turn rate.
Real-time appraisal data can help you acquire vehicles at the right price, but how do you know which vehicles you actually need? That’s where inventory data becomes critical.
You first need to look at your own inventory history — are you sourcing vehicles based on market demand? You should always have just enough of each vehicle in stock. If you find yourself with a surplus in one model and a shortage in another, then something is off with your sourcing strategy.
However, sourcing based on your inventory history is only half the solution. You also need to look at what’s happening in your market.
With VinCue, dealers can see supply and demand metrics for their entire market. VinCue shows you what the competition is stocking, along with their recent sales, pricing, and inventory age.
When sourcing, it’s important to look at your own dealership as well as your entire market. When you’re ready to acquire vehicles, you can bid on cars online directly through VinCue.
Unfortunately, you’ll always end up losing the occasional trade-in deal to your competitors. You can’t win them all — but you can learn a lot from the deals you miss out on.
Sometimes you’re outbid, and sometimes deals end up slipping through the cracks. Whatever the case, it’s important to look at the type of vehicles you’re losing and where they’re ending up.
Dealers can use VinCue to see if lost deals were poached by competitors, along with the vehicle type, make, and which dealership they went to. Sometimes you’ll see that you dodged a bullet. Other times, you’ll learn something about your market that helps you improve your appraisal strategy.
Your Best-Selling Vehicles
Not every vehicle is created equal when it comes to sales. Some cars are more valuable to a dealership than others.
Dealers want to identify their cash crops: the vehicles that are most profitable for their dealership. Your most valuable vehicles are those with the best combination of market demand, strong sales, and high gross margin. Once you identify your most valuable vehicles, you can double down on your niche.
VinCue highlights top-selling vehicles, weekly sales numbers, and sales by brand market share. This lets dealers increase their front-end gross by helping them stock their best performing vehicles.
Local Market Supply & Demand
We mentioned market demand in the previous section, but let’s take a closer look.
Market demand tells us which vehicles sell best in a given area. Dealers want to stock popular vehicles, but that doesn’t always mean they should stock the most popular. These vehicles (The Ford F-150, for example) are also the most competitive. That’s why it’s important to look at your own best selling vehicles as well.
In a competitive market, it’s important to differentiate from other dealers in the area. Look for niches that are underserved in your market. A shortage (or oversupply) of a certain vehicle type in your area is something you can work to your advantage.
VinCue lets dealers view the sales velocity of specific vehicles, their average inventory age, how many are on the market, how many are up for auction, and how many are in your inventory. This allows dealers to find gaps in the market that translate into big wins for their dealership.
Once you’ve identified your best-selling vehicles, you’ll want to start marketing them through online advertising.
Unfortunately, third-party car sites are becoming more expensive and less effective at generating leads. That means dealers need to focus on more fruitful ways of connecting with customers in their area.
VinCue provides precision advertising that uses dealers’ inventory data to optimize ad placement. VinCue identifies and suggests which vehicles could use a boost based on demand, pricing changes, and web traffic to that listing page. VinCue also makes marketing easier by automatically generating ads based on details from your inventory data.
Getting the Most Out of Inventory Data
Inventory data tells us way more than just how many vehicles we have on the lot. In the right hands, it can be the key to accelerating turn and earning more with each sale.
When it comes to gathering this information, no other market pricing platform gives dealers the depth and breadth of data that VinCue does. VinCue analyzes 40,000 dealerships websites and 7 million vehicle listings in real-time, giving dealers the most accurate local market data available.
Interested in seeing what better data can do for your dealership? Sign up for a free demo today.