Automotive Inventory Trends Affecting Today’s Dealer

The best content from industry veterans to inform dealers and solve their toughest challenges.

Why Dealers Should Adopt Variable-based Used Car Management

Strong retail demand and limited used vehicle supplies effectively eliminated the perennial worry of aged inventory for dealers. But depreciation returned when the average days supply of vehicles in dealer inventories hovered near 50 days, meaning some dealers had inventory they’d acquired 45 or 60 days earlier at the top of the market.

Used Vehicle Depreciation Is Back

Cox Automotive data suggests that June 2022 will be remembered, and perhaps forgotten, as the month when week-over-week depreciation of wholesale values finally returned to the used vehicle market.

Dealer Must Adapt to Appraising and Pricing Disciplines

The market conditions that coalesced at the mid-point of 2022 affirmed what Cox Automotive analysts and vAuto founder Dale Pollak were suggesting—that the back-half of 2022 would require dealers to re-exert the appraising and pricing disciplines they followed in the years prior to COVID-19.

Retail Shelf-Life of Used Vehicles Has Dramatically Shortened

“That is, if it used to take 60 days for a vehicle to reach a Cost to Market percentage of 90 percent, our analysis showed that vehicles now hit this Cost to Market threshold in 30 to 45 days.” vAuto founder Dale Pollak found.

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After nearly two years of an environment where used vehicle values, and retail prices, were largely on the rise, and retail demand showed no signs of slowing down, things are different.

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More Inventory Trend Articles

Read about other major inventory challenges dealerships across the country are facing along with vAuto’s point of view on the state of the industry.

There’s an old saying in the car business that you can’t sell a car you don’t have in hand.

The truth of this statement proved especially true for dealers in the aftermath of the COVID-19 pandemic. Through much of 2020 and 2021, the chief problem dealers faced wasn’t the perennial challenge of selling cars.

Customers Buying Preferences Continue to Evolve

For more than a decade, Cox Automotive has been tracking what consumers appreciate and expect from dealers when the time arrives to purchase a new or used vehicle. From this research, two clear trendlines emerge that hold significant implications for dealers who want to grow their sales volume and profitability of their new and used vehicle departments.

Turn Challenging New Car Inventory Levels into Opportunities

The good news is that while dealers wish they had more new vehicles to sell, they’ve also gained in experience in optimizing the outcomes for their new vehicle departments. The following represent best practices we’ve gleaned to assist dealers to make every new vehicle count at the time of sale and beyond.

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