The price of used vehicles can vary by as much as $1,000 depending on the market.
To help dealers zero in on the right pricing for vehicles in their market, JD Power has enhanced its VIN-specific pricing in its products.
Driving the news: JD Power says its research shows prices for the same used vehicle can differ by $100 to $1,000 based on ZIP code.
With wholesale prices remaining above seasonal levels and recon costs elevated, dealers need to be able to price vehicles competitively and correctly in their market rather than using national averages.
JD Power found 84% of dealers wanted DMA-level valuations.
Zooming in: Jonathan Banks, vice president of retail product portfolio at JD Power, told CDG News they have used their data to hone in on their pricing by location.
Banks said they use data on what vehicles sold for from its coverage area, which is 40% of franchise dealers, and the listing prices.
With that data and AI, they produce multiple combinations of models to determine the best price for an area.
“Just a more sophisticated way of doing things that enables us to have confidence that we can put out a value at a DMA level that we can actually QA and feel comfortable with,” Banks said. “About 30% of the values actually get adjusted for a DMA. And out of that 30%, about 40% have an adjustment over a thousand bucks.”
Jonathan Banks
Why it matters: The data on what vehicles in a market sold for expands past previous modeling based on listings, Banks explained.
He added it will aid dealers not only with selling vehicles at the right price, but also in the competitive acquisition process.
“It's a highly competitive market to get those wholesale vehicles,” Banks said. “So a lot of times dealers should know that maybe they can pay more, and maybe a vehicle is risky if they pay at a national price.”
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Also available: Along with the hyperlocal VIN-specific pricing, JD Power has extended its depreciation forecasts to 36 months.
JD Power said 70% of dealers sought access to the forecasts.
Access to the data is available in JD Power’s Values Online, MarketValues app, and REST API, and it is being worked into several inventory management solutions provided by different providers, according to Banks.
Bottom line: No matter the company, dealers need to find models that provide accurate pricing for sales and acquisition in today’s competitive market; a hyperlocal option could unlock additional revenue.
“Inventory from a historical perspective is still pretty tight,” Banks said. “We're getting more lease maturities, which is great, but it's a highly competitive market, especially with where prices are, even though they're flattening out… Every decision counts. It's kind of stressful if you're competing in a market where a lot of people are bidding on the same attractive used vehicle. Really understanding a precise price for what you're gonna get when you sell at retail is super important.”
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