Auto Trader launches powerful barometer tool to help maximise profitability

Auto Trader has launched a trended valuations tool to help retailers maximise profitability and navigate an increasingly nuanced market.

Used alongside the online marketplace’s Retail Check functionality, it said that retailers will soon be able to better adapt and respond to changes, enabling them to make quicker and more profitable sourcing, advertising, and pricing decisions.  

Trended Valuations show what a vehicle has been worth over the last six months, and how its value is forecast to change up to six months into the future. Based on a combination of historic valuations, live market prices, seasonality, and age of the derivative within the lifecycle of its generation, it can also be adjusted to cater for expected mileage usage over the forecast period.

Auto Trader said this will provide vital insight into the potential profit opportunity, price sensitivity and margin risk, as a retailer will able to appraise a vehicle prior to purchase - estimating its valuation after preparation, the speed in which it will sell, and the point it becomes overage - as well as managing risk more effectively by identifying potential loss-making vehicles sooner. 

Commenting on the impact the new product will have on their business, Michael MacDonald, business manager at TrustFord Bristol, 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 backed valuation forecast will help us manage consumer expectations. It’ll 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, Allen Motor Group, added: ““I think Trended Valuations is essential, with fluctuating new vehicle lead times we need to be able to give customers an idea of what they can expect for their part exchange when their new car arrives. It also gives valuable insight to your overall stock value as time passes and is a barometer of desirability, stock turn and profitability. 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 vehicles past performance and, crucially, where it’s forecast to go.”

Businesses which are already using Retail Check’s data and metrics including Auto Trader’s unique Retail Rating, are sourcing more confidently with a deeper understanding of market conditions, as well as using its insights to guide their pricing, and to maximise profit opportunities. In addition to monitoring shifts in supply and demand, it provides real-time market valuations, a competitive analysis of price position against similar stock in the market and estimates how fast a vehicle may sell when priced at its market value.

For the first time, this enhanced Retail Check functionality will be available for commercial vehicles, which means retailers will have the same level of confidence making retail decisions for vans, as they do for cars.

Commenting, Auto Trader’s chief product officer, Karolina Edwards-Smajda (pictured), said: “Providing this powerful new combination of Trended Valuations and enhanced market insights marks another important step in our commitment to empowering our partners with the scale of our data and the power of our technology. Given the growing complexity in today’s market and the rapid pace in which it’s moving, we feel this is one of the most effective ways we can drive confidence among Retailers and help them to navigate it profitably.

“Our Valuations data alone was engaged with over 20 million times in September, which highlights just how vital a role our insights play in key retail decisions. We believe this added layer of intelligence will prove to be a game changer for many Retailers, giving them what they need to adapt to a nuanced market and to identify the most profitable opportunities for their forecourts.”

Available as part of all advertising packages from April next year, both Trended Valuations and enhanced Retail Check functionality will be accessible through Auto Trader Portal accounts.

For those retailers already utilising Auto Trader’s suite of API solutions, Auto Trader Connect, the combination of data, insights and metrics can also be integrated into their chosen systems.

Early access to both Trended Valuations and Retail Check via Portal accounts will begin from January 2024, and via Auto Trader Connect from December this year.