4 Steps to a Good Competitive View Set
One of the many benefits available to DealersLink members is the confidence that comes with having access to the most accurate retail pricing data on any unit in your region. Our tool scans over 50,000 dealerships every day, providing members with the insight to make inventory management decisions with an eye towards profit.
One of our DealersLink Performance Manager details how to harness the power of Competition View:
1. Gather a good competitive set for the vehicle you are apprising: Ideally, you’ll want to have a competitive set of 5-10 Units. While this is not always possible with older or more unique cars, it’s a good general rule of thumb for the majority of units. If you’re struggling to consistently get an adequate number of comparative units, consider:
– Changing the search distance radius from your dealership
– Increasing the mileage band
– Removing the trim filter on the unit and manually remove outliers from the competitive set
2. Evaluate Actual Cash Value (ACV%) as a % of the Retail Market: Once pack and reconditioning are accurately figured into a unit, an ideal starting point target is 80% ACV. However, you should always factor in the letter grade of a unit to arrive at your target ACV%. If the unit is listed as A or B, market could potentially support going higher than 80% if that’s necessary to secure the trade. If the unit is listed at C, D or F, market forces suggest you should stay below 80% and acquire the unit towards the bottom of the market. By doing so, you will be able to more competitively price the vehicle and still allow you to still make a profit.
3. Evaluate retail position in the market: It’s important to understand the local market retail position of each unit in your inventory. Competition View enables you to easily understand what retail price would represent 100% of the market, and what retail price would be required for the unit to be the best price in the market. This allows you to make quick and informed decisions about how to price fast-moving units with a goal of maximizing profit, or how to price slower-moving, problematic units with a goal of moving them out of your inventory.
4. Don’t ignore book values: Book values are still a crucial part of the equation in arriving at ACV. Remember that a majority of units are still financed, and that the bank will determine their lending value of the unit based upon book value, not competitive market data. Failing to consider book value could lead to a price that is not acceptable to a lender.
For DealersLink members looking to maximize the power of Competition View, contact your DealersLink representative a schedule time with a DealersLink.
Not a member and want to learn how DealersLink can help your store with better appraisals contact us at 844-340-2522.