Vehicles under $10,000 are turning quickly, with vAuto data showing just a 33-day supply in May, the lowest of any price segment. The good news for dealers is that new Manheim data shows there’s a steady supply of vehicles in that price range hitting the auction block.
Driving the news: A new report from Manheim shows the auction averages 150,000 transactions per month for vehicles under $10,000.
The supply is mainly represented by vehicles between 7 and 15 years old.
The inventory includes models from Ford, Chevrolet, Toyota, and Honda.
Widening the search: While there is a steady supply of inventory, dealers will need to expand their search and scope of vehicles, according to Mark Allers, AVP of Business Intelligence for Manheim.
Registration data mined by Manheim shows many vehicles end up hundreds of miles away, and often states away from where they are sold.
“It’s helpful to look across the nation or in other locations, and to open your funnel to more model years,” Allers said. “The cars are there. The volume speaks for itself.”
Hitting the market more: To find the right mix of vehicles in the lower price range, Connie Suozzo, VP of Manheim Digital, suggests dealers adjust their strategy.
Dealers need to consistently get into the marketplace by looking at all vehicle channels, both online and at physical auctions.
“The inventory is there. It’s about diversifying the channels you use, whether you do physical and maybe expand into digital and vice versa,” Suozzo said.
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Generating more leads: Adding the vehicles in the lower price range is not just about moving that inventory. Allers said it helps to drive traffic to a dealer's website.
“That inventory is good to have just in generating search traffic,” Allers said. “It’ll bring people in to peek and get people to your lot. You want those cars in that lower price point when people are searching. You might be able to help that consumer find a car that’s a better fit for them that might be in a higher price point.”
Takeaway for dealers: In Cox Automotive’s Q2 Dealer Sentiment survey, independent dealers expressed a three-year low in confidence on used-vehicle inventory. The new data shows the vehicles are available, but dealers must be willing to put in a little more effort to get the vehicles.
“It’s about consistency in the schedule, expanding your markets and leveraging the tools that are out there,” Suozzo said.
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