Retail vs. Wholesale: 4 Tips for Dealers to Consider When Evaluating Trade-ins

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800.801.0018 | info@automotiveMastermind.com ©2021 automotiveMastermind®. All rights reserved. | A business unit of IHS Markit™ LEARN MORE ABOUT MARKET EYEQ automotiveMastermind.com o What was the average gross of those sales? What is the make/model/trim availability in your market? Does the vehicle include any extra features that increase its consumer appeal? What has the market looked like over the last 60 days for the vehicle? Which makes and models have sat the longest? o Has the BDC received many, or any, recent inquiries for that vehicle (or similar?) 3. Market Factors Aside from simply tracking local, regional and national trends, your team should also consider how these market factors could impact your audience, influencing the kinds of vehicles they buy and the reasons why they're shopping. There are endless small factors unique to different dealerships in various parts of the country, but in general, dealers should consider: What is the vehicle's estimated trade-in value? o How does this compare to the vehicle's current auction value? How does your current inventory on hand compare to your incoming deliveries? Is your dealership experiencing any delivery delays? What are the sales forecasts associated with that model/trim? What is the production forecast associated with new production models? 4. Unique Financing Options As a result of economic challenges and increased interest in pre-owned options, many customers are now looking to finance lower price point vehicles. With older model or high mileage vehicles sometimes presenting lending challenges, your team needs to consider the limits of your lenders while reviewing each trade-in. Consider the following related to the indirect lenders that your dealership utilizes: Does your dealership have an indirect lender that limits loans on vehicles older than five years? Does your indirect lending source have any restrictions related to the mileage of vehicles? Does your dealership work with any smaller credit unions that offer more flexible indirect lending programs? After reviewing trade-ins day in and day out, even the best managers are likely to skip some aspects in analyzing vehicles that could strengthen your dealership's approach. Standardizing this process by defining the prompts your team needs to ask will benefit your entire dealership. Want to learn more about how Market EyeQ can help you maximize your dealership's portfolio management through data-driven sales and acquisitions? Contact us for a free demo.

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