A Buyer's Market For Used Cars
Silver-linings come in different shapes and sizes, but if you’re a dealer selling Used vehicles, your silver-lining may be right around the corner.
Amidst the coronavirus pandemic, there has been an increase in demand for Used vehicles, but what does this mean for dealers?
A buyer’s market for Used vehicles.
While dealerships have learned to swerve around their usual way of conducting New vehicle sales with remote selling, Used vehicle buyers typically prefer to view Used and Pre-Owned vehicles in person given the nature of the vehicle. With the restrictions in place due to the pandemic, they’re unable to do so, which means fewer sales, resulting in Used inventory overload especially in the coming months.
The price of wholesale Used vehicles dropped 11.8% in the first 15 days of April 2020, compared to the entire month of March, according to The Manheim Used Vehicle Value Index, a prominent benchmark for Used vehicle values.
Where does that leave dealers? Currently, the retail prices buyers are seeing have not reflected the fall of wholesale prices – yet. But, industry analysts are predicting Used vehicle prices dropping in the next few months.
Enter the buyer’s market.
The shutdown has affected New vehicle production facilities, designs, engineering, and testing. It has even caused marketing interruptions, leading to a delay in New vehicle arrivals in the marketplace.
While the New vehicle shipments are slow, the Used vehicle market is likely to become flooded with inventory. What can you do to leverage your Used vehicle inventory? With the global-wide shutdown, many lessees could not return their vehicles in March and April, and these vehicles are projected to enter the Used vehicle market once the economy opens back up.
Analysts are recommending for buyers to put their feelers out now, as Used vehicles will fall into a much more affordable space, compared to a New vehicle, in the upcoming months. With the combination of a lull in New vehicle shipments and a projected jump in Used vehicle inventory, the global-wide pandemic is also leaving buyers in a strained financial situation, making the marketing of your Used inventory more crucial than ever.
What strategies can you put in place to get more eyes on your Used inventory? Gone are the days of traditional third-party classifieds. Buyers want instant gratification while scrolling through social media feeds. The digital solution you need is iStreamSM. Sell Used vehicles and increase profitability instantly.