Used car shortages on the horizon and how tech can help
February 28, 2025
With industry predictions that this year’s used car market will be down around 500,000-700,000 vehicles after the shortfall of new car registrations during the pandemic, retailers will be looking forward to a buoyant market where demand outstrips supply.
However, such dynamics bring with it another set of problems for used car dealers – sourcing vehicles and the corresponding rising prices in the wholesale market.
Earlier this month [Feb], Auto Trader reported that used car prices remained stable in January compared to a slight dip experienced in the same month last year as a result of used car supply down -3.1% for the same month year-on-year, itself a knock-on effect of the pandemic years. Its figures also showed faster stock turn for vehicles which took an average 38 days to sell compared to 41 in January 2024 although, its report also cites ‘unnecessary under-pricing’ as an issue.
The temptation in a favourable market that is unfolding for used car retailers currently is to enjoy the ride and focus energies on other less well performing areas of the business but Autofinity CEO Andy Whitehair warns this would be a mistake.
He said: “In fact, now is the time to take a forensic look at the used car vehicle processes to identify gaps, ways to improve efficiencies and save costs to ensure dealers further improve stock turn and maximise profits in the current climate. It also means that come what may, dealers will be in the place to negotiate any future headwinds. Auto Trader identifying under pricing as an issue is a concern that dealers also need to tackle now.”
Retailers need easy access to digital pricing tools together with the ability to change their vehicles’ prices quickly and accurately across multiple online channels whilst exercising real-time oversight of their vehicle inventory group wide. Autofinity’s ViHUB, which pools vehicle data to create one rich source of information, automatically uploads amendments to online channels and provides exceptional and easily accessible vehicle inventory management.
The means to overlay the aggregated vehicle data with the retailer’s own pricing ‘rules’, empowers a more sophisticated pricing strategy. An automated red flag when vehicles do not meet any part of the dealer’s criteria whether that’s a pricing issue, lack of images or incomplete vehicle description, further improves vehicle data quality. In addition, the platform provides full visibility of inventory in one place so whether a car is awaiting a part or is out on a test drive. Auto Trader Connect integration means the vehicle rating can be viewed on the same dashboard enabling rapid pricing to market without switching applications.
By combining ViHUB with its new ViSOURCE, retailers can streamline their used car processes even more. ViSOURCE aggregates all wholesale data from multiple vendors into one system making it easy to compare vehicles, prices, spec and condition. Used car buyers can compare vehicles across platforms rather than navigating from one to another.
