The automotive retail landscape has dramatically changed over the last several years, and traditional car sales methods of vehicle sales aren’t enough to get your dealership noticed. Maintaining a modern, sophisticated car pricing strategy is just as important as attracting and retaining customers.
Using real-time data to understand broad automotive market trends and more local customer preferences helps dealerships develop a pricing approach geared toward sales volume and profitability. This allows you to respond to changing market conditions and consumer expectations without missing a step.
Assessing Your Vehicle Pricing Strategy
Developing an effective vehicle pricing strategy begins with a comprehensive self-assessment. Evaluate your current approach by answering a few key questions:
- Are your decisions based on data or intuition? Gut instinct is helpful, but it should always be balanced with facts, logic, and data.
- Do your inventory selections align with regional sales trends? Trends can be tricky since they can be significantly different whether you’re looking locally, statewide, or nationally.
- What strategies are you implementing to move slow-selling vehicles? Price adjustments based on days-in-inventory metrics that balance profitability, and sales speed can provide the solutions you’re looking for.
- Can customers easily access and explore your inventory online? Comprehensive online listings that have high-quality photos and detailed descriptions can help move cars off your lot that much sooner.
- Are your current software and systems effectively supporting your business goals? Technological integration is a necessity for dealerships as they adapt to changing market conditions, find ways to save time on complicated tasks, and provide quality service to scale their businesses.
Exploring innovative strategies can transform a dealership’s performance, which is why many owners rely on ACV MAX’s market valuation tools, wholesale and auction marketplace integration system, and AI-powered pricing recommendations to optimize their pricing strategy and enhance sales figures.
4 Ways to Optimize Your Car Pricing Strategy
Consider What Buyers Are Looking For
Market concerns have a way of altering what buyers are looking for when shopping for a car. For instance, high inflation, high interest rates, and increasing gas prices are currently sticking issues. That’s why 54% of shoppers currently prioritize affordability and fuel efficiency when shopping for a new ride¹.
Meanwhile, there are plenty of other consumers who prefer cars with slower depreciation rates². Knowing what your customers are looking for is key to maintaining and growing your dealership’s business.
Account for the Modern Car Buying Landscape
Increased digitization isn’t just limited to vehicle sellers. Modern car buyers are highly sophisticated, spending nearly 14 hours researching the right vehicles online³. This level of research has led to dealerships offering greater transparency with their pricing strategies, making comprehensive car information—like original OEM packages and MSRP—more visible.
Dealers are also giving insight into pricing benchmarks derived from valuation guides (i.e. J.D. Power, etc) and market averages (data on comparable vehicles sold in the area). Providing this data upfront streamlines the sales process by reducing or eliminating the back-and-forth of price negotiations. This transparency also helps build trust, which can benefit your dealership’s reputation.
Don’t Overlook the Used Vehicle Market
Not so long ago, consumers were more likely to purchase certified pre-owned vehicles and late-model used cars. Recent pressures have affected customer buying patterns. These days, buyers are looking for older models of used cars4.
While late-model used cars have also increased in price over the last five years, they’re still more likely to be in the buyer’s price range5. Additionally, given that mass transit isn’t really an option in most places across the US, it looks like this trend could be sticking around for a while. In turn, it’s incumbent on dealers to identify the models most likely to sell.
Adopt an Integrated Inventory Management System
To truly optimize your pricing strategy, invest in a robust inventory management system. ACV MAX provides advanced analytics, real-time market insights, and supports data-driven pricing decisions.
ACV MAX’s Inventory Management Platform helps dealers stock, appraise, and price vehicles strategically. Our comprehensive platform makes it easier to combine market intelligence with sophisticated pricing analytics thanks to real-time insights and seamless inventory management tools.
Imagine decreasing the amount of time cars spend on the lot while improving gross profits.
Whether you’re looking to optimize your used car inventory, maximize profit margins, or streamline your pricing approach, ACV MAX’s integrated technology is always ready.
Stay Ahead of the Pricing Curve With ACV MAX’s Inventory Management Software
Today’s car buyers are savvier than ever. Can your pricing strategy keep up with the amount of information at their fingertips? Our software bridges the gap between market intelligence and strategic pricing, so you can attract more buyers and turn inventory faster. With ACV MAX’s platform on your side, you can also gain the competitive edge you need to thrive in the modern automotive market. Reach out to us today to schedule a free demo.
Sources:
- Vigderman, A. (September 24, 2024). Car Shoppers Are Prioritizing Affordability and Fuel Efficiency Over Safety Features, Make, or Model. AutoInsurance.com. Retrieved on November 26, 2024, from https://www.autoinsurance.com/articles/what-are-consumers-looking-for-in-new-cars/
- Threewitt, C. (July 23, 2024). Cars With the Slowest Depreciation. Cars.usnews.com. Retrieved on November 26, 2024, from https://cars.usnews.com/cars-trucks/advice/cars-with-the-slowest-depreciation
- Andersen, D. (February 5, 2024). 44 Statistics Automotive Marketers Need to Know in 2024. Invoca. Retrieved on November 26, 2024, from https://www.invoca.com/blog/automotive-marketing-statistics
- Hughes, S. (Sep 11, 2024). Some consumers are shifting to older models of used cars. Marketplace.org. Retrieved on November 26, 2024, from https://www.marketplace.org/2024/09/11/some-consumers-are-shifting-to-older-models-of-used-cars/
- Used cars and trucks in U.S. city average, all urban consumers, seasonally adjusted. Bureau of Labor Statistics (BLS). Retrieved on November 26, 2024, from https://data.bls.gov/timeseries/CUSR0000SETA02
