CarGurus President & COO Sam Zales recently hosted a webinar in partnership with CarOffer’s CEO Bruce Thompson to discuss current industry trends and how dealers can lean on the CarGurus and CarOffer partnership to drive profitability.
Unfortunately, due to a technical problem, the webinar recording is unavailable. You can download the slides here, or take a look at these three essential takeaways:
Vehicle availability and pricing will take some time to normalize
It’s no secret that the US auto industry continues to be buffeted by Covid, and dealers are struggling to adapt to inventory shortages and shifting wholesale and retail prices. A surge in appetite for private mobility has increased sales and coupled with production constraints on new vehicles, significantly reduced inventory availability across the country.
While the decline in used inventory levels has started to level off, that decline has driven up vehicle prices. For example, what was a $20,000 wholesale car in January sold for about $27,000 the first week of June. Vehicle prices will normalize and drop over time, but it’s unlikely to be a cliff, according to Thompson.
Don’t be afraid to test and adopt new strategies and platforms
In the near term and beyond, optimizing wholesale and retail business activity will be key to profitability for dealers. For many, this will mean trying something new—like buying more cars direct from consumers, getting comfortable with a much shorter wholesale turn (think, 18-21 days from when it hits the lot, not including recon), or cycling more cars in and out of inventory rather than allowing them to age. What’s important is that you don’t let fear paralyze your business and you learn to adapt.
As Thompson put it, “you can’t sell what you don’t have—but don’t buy what you can’t sell.” As you test new strategies, you’ll figure out what works best for your dealership and identify the vehicles you can feel confident will retail quickly.
Digital wholesaling is the future
While the increasing adoption of digital retailing among consumers gets more attention, digital wholesaling is headed down the same path. Zales described how CarOffer is leading this department: much like CarGurus disrupted the listings industry, CarOffer is disrupting the traditional wholesale auction model. With its highly sophisticated, automated platform that works much like the stock market, CarOffer provides instant offers for sellers and a far more time-efficient sourcing process for buyers.
That digital wholesaling innovation is also coming soon to more of CarGurus, including:
- Capitalizing on the CarGurus “Sell My Car” page to provide instant offers to sellers and put more cars into the acquisition pipeline for our dealer partners
- Giving dealers more control over inventory in their area by offering local dealers first, exclusive access to vehicles that come in from the “Sell My Car” page
- Powering trade-ins through a designated widget on your own dealership website
It’s currently integrated into the CarGurus Pricing Tool too, so you can stay informed on the value of your inventory and unload aged vehicles quickly, all in one platform.
CarGurus and CarOffer are here to help you optimize your pre-owned pipeline
As digital wholesaling continues to pick up steam and more dealers realize its advantages, CarGurus and CarOffer together will be uniquely positioned to help. Combined, the power of the data and technology that CarOffer and CarGurus provide together can broaden your options, improve your margins, and increase your peace of mind. Layer on CarGurus’ traditional strength in marketing as the largest third-party listings provider and our newer offerings around digital retail, and it’s a comprehensive platform for dealers to build their businesses on.
The vision doesn’t end there, though. We see a future where the playing field has been leveled so dealers can compete and win against the big box and digital retailers, as we help you buy, market, and sell your vehicles.
For more information about CarGurus and CarOffer, download the slides here or contact your rep.