8:44 am, January 29, 2024
Auto Trader has announced that its new valuations tool has been made available to all its retail partners after concerns were raised about dealers undervaluing their stock.
Car Dealer reported earlier this month that used car dealers were missing out on £30m, at the time of writing, due to underpricing vehicles on Auto Trader.
Now, just a few weeks on, the firm says its latest software will be rolled out to all dealers in order to help them adapt to an ‘increasingly nuanced market’.
Bosses say that the new data solution – Trended Valuations – will be incorporated standard advertising packages from April, along with the outfit’s newly enhanced Retail Check functionality. The functions are also available now via early access.
It is hoped the two offerings will help retailers to make ‘quicker and more profitable’ sourcing, advertising, and pricing decisions.
Both will be accessible through Auto Trader Portal, or for those already utilising Auto Trader Connect the data, insights and metrics can be seamlessly integrated into their chosen partner systems.
The additions go some way to explaining price rises for dealer packages, which boss Nathan Coe defended to Car Dealer last week.
According to Auto Trader, Trended Valuations shows what a vehicle has been worth over the last six months, and how its value is forecasted to change up to six months into the future.
It’s based on a combination of historic valuations, live market prices, seasonality, and the age of the derivative within the lifecycle of its generation.
Such is the scale and depth of Auto Trader’s data, the forecasts have been proven to be on average within 5% of achieved values up to six months in the future, with this improving to 3% up to three months, and just 1% up to a month forward.
Among those to who will benefit from the software being made available to all is Michael MacDonald, business manager at TrustFord Bristol, who said: ‘Trended Valuations will be hugely powerful for managing part-exchanges, especially where new car lead times can mean the transaction is months away.
‘Having an Auto Trader branded valuation forecast will help us manage consumer expectations. It’ll also help us manage risk and margin when sourcing with a clear view forward, so we don’t get stuck.
‘I’ll also have a much better view of risk value on how long I keep cars in stock and know what’s going to happen to protect margin.’
Andrew Muffett, group used car buyer at Allen Motor Group, added: ‘I think Trended Valuations is essential. As retail and trade markets don’t always move in sync, a point in time trade valuation only tells part of the story when sourcing and puts margin at risk when you hit the retail market.
‘Trended valuations will provide us with a broader view of retail pricing over time, to chart the trajectory of a vehicle’s past performance and, crucially, where it’s forecast to go.’
Auto Trader says its latest decision will ensure that all dealers will have ‘ what they need to drive their success in 2024’ despite a ‘challenging’ year ahead.
Karolina Edwards-Smajda, Auto Trader’s chief product officer, said: ‘Given the complexity in the market, we’ve worked hard and invested to create the solutions and the insights that we believe will best serve our partners, and give them the confidence they need to act in these changing times.
‘We can already see just how powerful and integral our data has become in informing key retail decisions by the fact our valuations data was used over 240 million times last year, which is almost 100 million more than in 2022.
‘Whilst there’s no question that the year ahead will have its challenges, access to this powerful combination of new intelligence will ensure all retailers, regardless of scale, have what they need to drive their success in 2024.’
