Wake up and check the prices – Indicata is warning that one in four used cars are being sold at prices lower than they should be reaching. The real-time market analyst firm says that a lack of re-pricing as the market fluctuates means that used cars are leaving the forecourt bring in less profit than they could.
A simple re-pricing exercise could fix this, especially if a car’s price has been reduced but the market then rises. In some cases vehicles are being left at the reduced price when they could fetch more.
Indicata even warns that cars priced lower than a customer expects can put the buyer off.
As Jon Mitchell, Indicata’s group sales director, says: “From a consumer’s perspective when a used car looks too cheap during an online search, they immediately think it has been wrongly described, or it is likely to have been sold.
“Dealers have to stay in tune with current market prices to help build consumer confidence with online buyers.
“And for the past few weeks that has meant checking market values daily and then increasing rather than reducing prices.”
Indicata reported a Ford Fiesta listed at £6,995 – that was 94% of its market price after 35 days in stock. The dealer planned to reduce it but the average market price had risen to £7,436 so Indicata advised them to increase the price by £500. It sold quickly at the higher price.
Similarly, aBMW 5-Series listed at £29,500 was reduced four times during its 50 days in stock to £27,000. But the market price had risen back up to £29,500, so Indicata advised it was re-priced upwards and it sold within days.
In a market that, according to Auto Trader, has risen over 8% year-to-date, Indicata’s warning is timely and serious.