Page 21 - Fall 2024

Dealerships should also draw upon their experience, wisdom,
knowledge, and common sense to make better decisions.

Here are 8 reasons why:

1. Data Can’t Predict Local Market Nuances

While data can show trends in broader markets, it often fails to capture the unique nuances of local
markets. Management knows their customer base better than any algorithm. They understand which
cars sell quickly in their region, the types of vehicles their clientele prefer, and which models are in high
demand at different times of the year.

2. Historical Data Can’t Always Predict Shifting Trends

Used car markets are dynamic and can shift suddenly due to external factors like fuel prices, economic
changes, or government regulations. Relying on past data alone might cause dealerships to miss
emerging trends.

3. Human Intuition Can Fill Gaps in Data

While data can be comprehensive, it doesn’t always tell the whole story. For example, it might
indicate that a specific model is a slow seller nationwide, but a dealership’s intuition and
historical knowledge might suggest the opposite due to local preferences or promotions.

4. Experience with Vehicle Condition and Maintenance Costs

Not all used cars are the same, even within the same make and model. A car’s condition, maintenance
history, and current mechanical state can significantly affect its resale value. Let me say this a different
way; the used car you are looking at is an absolute “one of a kind.” There’s not another one like it in the
entire world. Your eyes are on it and you know what you’re dealing with.

5. Pricing Sensitivity May Vary Across Markets

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Data-driven tools may set price recommendations based on averages, but those
averages may not apply everywhere. Local economic conditions, competitor pricing,
and even customer buying habits can influence what price a dealership can set for a used car. That said,
price sells cars.

There’s an old saying about a car bought “right” is half sold. That’s sorta true, but never forget every
used car has a price that it will sell for. When you have a car that you can’t sell, often it’s because you
haven’t price it “right enough,” to make it go away.
On The Move 2023