Independent dealers are facing a slew of new challenges as they head into the second half of the year—tight inventory, shrinking margins, and affordability concerns that are reshaping how consumers shop. While used vehicle sales are forecasted to be up this year, compared to last year, the path to profitability is anything but straightforward. 

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If there’s one thing I’ve learned in my years working at dealerships and with dealers across the country, it’s this: the best opportunities are often right under your nose. And right now, that opportunity is sitting in your service drive. 

The post From the Service Drive to the Sales Lot: Why Dealers Must Rethink Vehicle Sourcing Now appeared first on vAuto.

The Tariff Landscape

Tariffs, essentially taxes imposed on imported goods, have become a hot topic in the automotive sector. The recent announcements and expectations of tariffs have created a buzz and a strong surge in late March of new and used vehicle sales. Further ahead, however, dealers and manufacturers are trying to gauge their potential impact. A near-universal expectation: Prices of new and used vehicles will continue to rise, just as they largely have since the initial tariff announcements.

Impact on New Car Inventory

Analysts expect tariffs may crimp supply of new vehicles, given that 50 percent of retail sales

in the U.S. are import vehicles that face tariffs, and many other vehicles include parts imported from countries that could be affected if the parts tariff takes effect. Manufacturers face the challenge of deciding how to absorb or pass on these additional costs. Some may choose to spread the cost across their entire range of  vehicles, while others might focus on specific models. This decision-making process can lead to fluctuations in new car prices, affecting consumer demand and dealer strategies.

A key for dealers: Tagging tariff-impacted new vehicles to delineate them from other inventory that may not see the cost impact of tariffs as much, if at all. Likewise, it’ll be important for dealers to continue to turn their inventory to earn allocations and mitigate the profit-draining impact of high floorplan expense.

Challenges in Used Car Inventory

The used car market is not immune to the ripple effects of tariffs. As new car prices potentially rise due to tariffs, consumers may shift their focus to used cars, increasing demand in this segment.

Says Patrick Janes, associate vice president for Cox Automotive and vAuto: “The minute you introduce sensitivity around affordability, such as tariffs for new cars, you might suddenly see a shift into the used car market. Unfortunately, we have significant challenges in supply in the used car market.”

The supply constraints flow from the lingering effects of the COVID-19 pandemic, the dramatic reduction in new vehicle lease activations and relatively strong demand for available used vehicles. This imbalance between supply and demand is already driving up wholesale and retail prices, making it challenging for dealers to maintain a profitable inventory.

A key for dealers: Keeping a close eye on live market demand/supply data to know if a vehicle’s price position is aligned to the current market, in the competitive position you prefer to achieve your gross and/or volume objectives.

Acquisition Strategies

With the supply-constrained used vehicle environment, acquisition strategies become more critical than ever. Dealers need to be proactive and innovative in sourcing inventory. Traditional methods, such as auctions, remain important, but there is a growing need to explore non-traditional channels to find more profit-favorable inventory. Utilizing live market insights and real-time consumer data can help dealers identify and acquire the right inventory at competitive prices from customers who, thanks to awareness of vehicle values, are often clear-eyed about their vehicle’s value.

A key for dealers: Adopting a multi-channel sourcing strategy that taps acquisition opportunities from your service customers and your local market through private party listings.

Profitability Considerations

While March proved to be a healthier month than other recent months in terms of profitability, industry analysts expect dealership profitability may be challenged if the economic impacts of tariffs—higher costs for consumer goods, high interest rates and diminished investment portfolios—cause a reduction in retail demand. Some have compared the current environment to 2021 and 2022, when dealers emerged from the pandemic and achieved record-high profitability while selling fewer new and used vehicles overall.

A key for dealers: Optimize your marketing efforts to ensure they target the right consumers with the right vehicles in the right places. Personalizing the consumer experience and utilizing data-driven insights can enhance vehicle display page (VDP) views and lead conversions. Additionally, maintaining a balanced approach to pricing and inventory turnover is essential to navigate the challenges of margin compression and affordability concerns.

Conclusion

The automotive industry is no stranger to disruption, and tariffs are the latest challenge dealers must face. By understanding the impact on new and used car inventory, refining acquisition strategies, and focusing on profitability, dealers can turn these challenges into opportunities. As always, staying informed and adaptable will be key to thriving in this dynamic market.

For more insights and strategies, tune into our latest podcast and learning series, where industry experts share their perspectives on navigating the current landscape.

The post Automotive Tariffs: How Dealers Can Optimize Inventory and Profit appeared first on vAuto.

Cox Automotive estimates that the tariffs, which affect import vehicles making up 50 percent of the new vehicle market, have raised the average cost of new vehicles by several thousand dollars, depending on the segment. With the average new vehicle price nearing $50,000, many buyers are finding new vehicles unaffordable.

Cox Automotive senior economist Charlie Chesbrough notes, “Dealers and OEMs are pulling back on incentives as the rush to sell existing inventory declines. The value of an unsold vehicle on a dealer’s lot has increased since its replacement cost is now much higher. Future supply availability may also be vulnerable, shifting the motivation to sell away from the buyer’s favor.”

A critical question now is how OEMs will address the impact of tariffs through rebates and incentives. While manufacturer incentives at the end of 2024 helped boost new vehicle sales, it remains unclear how much incentive-related support dealers will receive as new vehicle costs continue to climb.

This blog explores best practices for mastering rebates and incentives, helping dealers accurately capture and apply them to the right vehicles when available.

Incentive Trends in the New Car Market

In February 2025, the average blended incentive amount is $4,830, which is down $550 since December but still $150 higher than the beginning of Q4 2024. Incentives play a crucial role in the automotive market, helping dealers attract customers and close sales. The types of incentives include VIN-specific incentives, manufacturer-financing cash, and APR incentives. These incentives help dealers target slow-moving vehicles with tailored rebates, ensuring each vehicle receives the maximum allowable incentives.

As 2025 unfolds, analysts expect the mixed nature of rebates and incentives will continue. vAuto’s Conquest helps dealers efficiently apply and promote available incentives as they list new vehicles for sale online:

•    VIN-Specific Incentives: These incentives typically apply to slower-moving vehicles. With Conquest, dealers can efficiently apply and “stack” VIN-specific rebates and incentives on the right vehicles to ensure each vehicle receives the maximum allowable. 
•    Manufacturer-Financing Cash and APR Incentives: Dealers can now automatically apply these incentives to their advertised prices, simplifying the pricing process and making it more attractive for customers looking for financing options.
•    Auto-Apply Maximum Allowable Incentives: This new configuration setting in Conquest eliminates the risk of either incorrectly applying an incentive to the wrong vehicle or missing an available incentive that results in a less-competitive offering for potential buyers.

Benefits of Rebates, Incentive Management Mastery

By effectively managing rebates and incentives, dealers can enjoy several benefits:

•    Enhanced Customer Experience: Prominently featuring each vehicle’s discounts and promotions in the VDP photo carousel helps attract more customers and close more sales.

•    Increased Efficiency: Automated rebate application and real-time pricing optimization save time and allow dealers to focus on selling cars.

Success Story: Chris Morris and Hello Auto Group
Chris Morris, VP of Operations at California-based Hello Auto Group, relies on vAuto’s Conquest solution to manage his new vehicle inventory efficiently and make market-informed decisions. With Conquest, Morris knows how his dealership days supply compares to the market, and where his market share for specific models, trimlines and segments may be ahead of or behind the competition.

By analyzing extensive competitor information and accessing data, Chris improves his dealership’s new vehicle sales performance, profit, and turn.

Conclusion

Effective management of rebates and incentives is crucial for dealers looking to offer competitive deals and maximize their sales potential. By simplifying the application of these financial benefits and providing real-time data, vAuto’s Conquest supports dealers in making informed decisions and enhancing the customer experience.

For more information on Conquest and our latest updates, visit here.

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That’s how some dealers now regard the art and science of used car inventory management. The comment reflects how AI and predictive data science, when used to determine each used vehicle’s investment value potential, fundamentally changes how dealers acquire, appraise and price their used vehicles compared to the ways they’ve handled these mission critical decisions in the past.

“When you have a clear understanding of whether you’ve got an earner or a turner on Day 1, it changes how you manage each vehicle,” says Derek Hansen, vice president of operations for vAuto and Cox Automotive. “Furthermore, the understanding of each vehicle’s unique investment value helps shape strategic, ROI-focused objectives for all mission-critical aspects of used vehicle management.” 

This blog discusses how predictive data science is changing how dealers regard and treat individual used vehicles, and the solutions dealers use, to optimize used car profitability and sales at a time when the market is less forgiving and more profit-challenged than it has been in recent years. 

A Classic, Common “Test” for Every Used Vehicle

Historically, every dealer has faced the same test with every used vehicle: If I acquire it for $X today, how should I price to make the gross profit I expect to make when the vehicle sells?

Like individual students in a classroom, dealers answered the test question in their own way. Some price up from cost, marking up a vehicle high enough to leave room for discounting and gross. Some assess the retail market for the answer, picking a retail price point they believe offers the best opportunity to move the vehicle and deliver gross. Some use the retail market to price aggressively, choosing price points that position a vehicle to sell faster than the competition.

Despite the different methods dealers use as they take the test with each vehicle, two things

 are the same and true:

First, it takes time for dealers to know if they answered the test correctly. To be sure, you have some vehicles where a buyer is waiting for the used vehicle you just acquired. In most cases, however, it takes time for a vehicle at a certain price to get attention and interest from potential buyers that leads to an inquiry.  

Second, no dealer has ever aced the test with every vehicle. It’s a bold claim, but the fact that almost every dealer’s inventory includes a share of vehicles that should have retailed sooner suggests room for test-taking improvement. 

How vAuto Tapped Predictive Data Science to Helps Dealers

In the years prior to the 2020 pandemic, dealers were often selling record numbers of used vehicles and making less money. In some cases, used vehicle departments were losing money despite record-setting volumes. 

The trend of declining profitability led vAuto data scientists to attempt to answer a question: How can we help dealers know each used vehicle’s profit or ROI potential on Day 1, so they are better prepared to take the test with every used vehicle they appraise, acquire and price? 

The team developed advanced algorithms and applied them to a decade-worth of used vehicles and related transactions, and thousands of vehicles currently in dealers’ inventories. After much testing, the team was able to predict probability of sale of any vehicle at any price in a seven-day timeframe, with more than 90 percent certainty. 

With this understanding of pricing probability, the team began building predictive pricing models, which became the basis for a new inventory management system, ProfitTime GPS, that’s built to help dealers optimize the ROI for every vehicle using predictive data science to drive acquisition, appraising and pricing recommendations. 

The predictive data science behind ProfitTime GPS allows dealers to manage beyond what seems right in the moment—the equivalent of knowing the answers to a test before you take it. This unique capability provides dealers with one-of-a-kind foresight into the likely outcomes of every decision they make.

vAuto’s Investment-Minded Used Car Management Innovation

If you’ve got predictive data science-driven insights about every vehicle’s investment potential available on Day 1, you are now able to truly manage each used vehicle to achieve its optimal profitability or ROI outcome. This ability fundamentally changes how dealers regard used car inventory management: You effectively switch from managing cars or merchandise to managing your inventory like it’s an investment portfolio. 

At vAuto, we call this the Variable Management strategy. It encourages dealers to establish their used vehicle investment strategy—are you going for volume, gross or a blend of both?—and then calibrate ProfitTime GPS, and the predictive data science that drives it, to help execute the investment strategy as dealership teams acquire, appraise and price vehicles. 

How Predictive Data Science Enables ROI-minded Used Car Management
 
One of the key ways predictive data science helps dealers successfully take the used car test more effectively with each individual vehicle owes to them now knowing if a vehicle’s an earner, a turner or something in between on Day 1. 
At California-based Hello Auto Group, such investment value insights have helped GM Joe Seppa and his team adopt a used car management strategy through ProfitTime GPS that helps them manage each vehicle according to its risk and reward profile.

Seppa likes how ProfitTime GPS helps him bucket inventory by risk and opportunity, allowing used cars in each bucket to sell in distinct, investment-optimized timeframes to ensure each vehicle sells more efficiently and profitably in accord with its investment profile.
For example, Seppa notes, that “the cars you buy at auction are higher-risk cars. You need to buy them, but you need to manage them differently than any other inventory because it presents the highest risk.” 
Predictive data science insights with ProfitTime GPS also help Joshua Clinton, general sales manager at Cape Coral (FL) Chrysler, Dodge Jeep Ram, innovate his used car management strategy. For example, he now aims to align his used vehicle pricing to ProfitTime GPS’ data science-driven recommendations 90 percent of the time. 
“We’ve found that’s been a positive for our store,” Clinton says. “It helps us turn vehicles faster and make more money.”

Conclusion
Dealers who put a greater level of trust in AI and predictive data science are better able to navigate the current used vehicle market, where profitability continues to be challenged by limited used vehicle supply and volatility across distinct vehicle segments. Put another way, ProfitTime GPS and the predictive data science that enable the Variable Management strategy, can help you successfully take, and pass, the used vehicle test every time. 

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Every dealer’s aware that, thanks to the disruption the COVID-19 pandemic created for new vehicle production in recent years, the supply of available used vehicles is constrained. Further, retail demand for used vehicles has been strong. Cox Automotive reports that dealers saw gains in retail used vehicle sales in 2024 compared to 2023, and the outlook’s favorable for even more sales in 2025: “The retail used-vehicle market is also forecast to expand year over year in 2025, despite tight inventory. Used retail sales will likely hit 20.1 million next year, delivering the best year since 2021,” according to the Cox Automotive “Five for 2025” forecast.

For dealers, their ability to grow their used vehicle sales and profitability will rest with their used vehicle sourcing team. In this vAuto blog, we’ll share an overview and pointers to help dealers thrive in what has become a more complex used vehicle inventory management and sourcing environment.

A Critical Post-Pandemic Shift in Used Vehicle Sourcing

For dealerships, the used vehicle market’s inventory supply and demand dynamics have spurred a reevaluation of traditional sourcing strategies and the adoption of innovative approaches to acquire vehicles and maintain, if not grow, their competitive edge.

You can see the effects of the reevaluation and response in dealership data from the National Automobile Dealers Association (NADA). In 2019, dealers sourced 27 percent of their used vehicle inventory from auctions, with about 63 percent coming from trade-ins with new or used vehicle purchase. The balance came from off-street/other purchases. In 2023, NADA reports auction-based inventory sourcing declined to about 18 percent, and street/other purchases accounted for 13 percent of inventory. Meanwhile, trade-ins accounted for roughly 67 percent—a sign that dealers are working harder to take in trade-ins as often as they can, rather than relying on auction-sourced vehicles as part of their inventory management strategy. 

The rise of non-traditional sourcing channels creates two challenges—creating a multi-channel used vehicle sourcing forecast and strategy to maintain the optimal number and mix, and ensuring your acquisition teams can operate as efficiently as possible to optimize used vehicle sourcing across multiple channels.   

Elevating Your Game: Maintaining Your Optimal Inventory Number and Mix

In today’s multi-channel environment, it’s important for dealers to create a used vehicle sourcing strategy that will help you consistently maintain the proper number and mix of vehicles in your inventory. Dealers know that having too few vehicles typically slows sales volume, and too many vehicles diminishes profitability. vAuto’s Global Search tool inside ProfitTime GPS helps dealers create and execute a used vehicle sourcing strategy.

The strategy-setting starts by asking key questions: What are your sales goals for the year, accounting for seasonal fluctuations and your business objectives? Based on your sales goals, and your past history of used vehicle sourcing across multiple channels, how many vehicles, or what share of vehicles, are you most likely to acquire from each channel? Based on your sales history, and current live market data, what vehicle segments and price points make the most sense for you to pursue?

By establishing an inventory strategy, dealers create baseline expectations for where they expect to source inventory and the types of vehicles they expect to source from distinct channels. 

Use Technology to Make Multi-Channel Used Vehicle Sourcing Easier, More Efficient

General manager Joshua Clinton at Cape Coral (FL) CDJR has made efficient used vehicle sourcing across multiple channels a high priority. With Global Search inside vAuto’s ProfitTime GPS system, Clinton says the job’s much easier than it used to be. 

“Global Search has reduced the complexity and time-consuming part of finding cars,” he says. “Global Search has really helped us narrow down and focus down on the cars we want, the cars we need and the cars that have the greatest income potential for us.”

For example, through Global Search’s integration with Kelley Blue Book Instant Cash Offer, Clinton has a better way to purchase vehicles his inventory needs directly from customers and prospects. “With Global Search and KBB, I can “hand over a list of 30 cars to my BDC and say, ‘I want you to focus on getting appointments on these 30 cars. It’s so much more intentional. It’s so much more focused. And, when you get a list of 30 vehicles, get appointments on 15 of them, and buy 10 of the vehicles I really wanted, that’s a difference maker.”

Clinton also uses Global Search to zero in on desirable vehicles in other channels, including auctions and trade-ins, particularly those they appraised and missed. “With Global Search, we can easily go to our missed appraisals and see vehicles we had in the showroom three days ago,” he says. “It’s a way to focus on the vehicles we need and can get right now.”

Managing Your Multi-Channel Used Vehicle Sourcing Proficiency

Another operational challenge related to the need for dealers to conduct used vehicle sourcing across multiple channels rests with ensuring how the vehicles you appraise and bring into your inventory across the channels fits your inventory strategy and business objectives. 

Global Search also helps Clinton and other dealers measure and manage how well their inventory strategy is working across individual sourcing channels. The system offers Look to Book, Investment Value and other metrics to help dealers identify when the acquisition volume expectations they set in their strategy need attention and coaching to improve outcomes. 

In addition, Global Search and ProfitTime GPS help dealers establish what the “right money” for any used vehicle should be and manage their appraisal teams to achieve the objective. With the tools, dealers can see which appraisers work best in each channel, and which channel tends to produce the most investment- and/or volume-optimal opportunity. 

The end result of linking your used vehicle sourcing efforts to a clearly defined, and objective-based strategy, and then managing the execution of your strategy across multiple channels, is a used vehicle inventory that’s positioned to win in today’s ever-changing market. 

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The Challenge: Deciphering OEM Incentive Programs

With rebates and incentives back on the rise, it’s crucial to make sure you’re promoting the latest offers, so your inventory stands out amongst your competition. But many dealerships often face significant hurdles in making the most of OEM incentive programs.

The challenges:

• Identifying applicable incentives for each vehicle
• Integrating these into pricing strategies
• Staying updated with rapidly changing offers

Without having a plan in place, dealerships risk posting inconsistent prices to their website and third-party sites, which can mislead customers and potentially have them looking to buy from your competition. 

With new-vehicle inventory in early August higher by more than 40% year over year, consumers enjoyed more choices last month and, in many cases, notably higher incentive levels. (SOURCE: Cox Automotive, September data 2024)

vAuto’s Conquest: Streamlining the Process

By automating incentive updates, vAuto Conquest eliminates the risk of human error and dramatically reduces the time spent on manually tracking changes. And with floor plan costs rising, it’s important to have your most up to date OEM incentives applied to your inventory. 

Using vAuto’s insights, dealers can access market trends that allow them to tailor their strategies based on data-driven predictions, optimizing their incentive applications to attract target demographics effectively. For example, a dealership in a cost-sensitive region might prioritize cash rebates, while one in a more affluent area could emphasize exclusive lease arrangements.

Harnessing the Power of Performance Managers

At the heart of vAuto’s approach is the dedicated support of Performance Managers. These industry experts play an essential role in helping dealerships unlock the full potential of their OEM programs. By offering personalized guidance and training, Performance Managers ensure that sales teams are well-equipped to leverage incentives effectively and consistently.

Performance Managers also help dealerships refine their operational strategies, promoting a culture of continuous improvement and strategic alignment. Their expert insights can transform the way dealerships approach inventory management, pushing them to not only meet but exceed their sales targets.

Practical Tips for Dealership Success

1.    Invest in Training: Regularly update your sales team on the latest incentives and make sure they understand how to communicate these effectively to customers.

2.    Utilize Technology: Implement solutions like vAuto Conquest to streamline incentive management and reduce manual errors.

3.    Engage with Customers: Use digital platforms to communicate current incentives, creating a transparent and engaging buying experience.

4.    Leverage Data Analytics: Use data-driven insights to predict market trends and tailor your incentive strategies accordingly.

5.    Collaborate with Experts: Partner with Performance Managers to optimize your dealership’s approach and maximize the impact of incentive programs.

Conclusion: Innovate with vAuto

Navigating the complexities of OEM incentive programs doesn’t have to be a daunting task. With vAuto Conquest and the support of dedicated Performance Managers, dealerships can transform challenges into opportunities. By embracing innovation, prioritizing customers, and continually adapting to market shifts, dealerships can remain at the forefront of the industry. For those ready to take the leap, the path to enhanced profitability and customer satisfaction is clear—partner with vAuto and redefine your dealership’s success.

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This blog explores how dealers can build stronger connections with customers to sell more vehicles and deliver better experiences that seed future business. The blog draws insights from Cox Automotive’s 2023 Car Buyer Journey study and shows how vAuto and other solutions providers are helping dealers meet specific consumer expectations and needs.

Understanding the Modern Car Buyer

Cox Automotive’s study helps you understand the diversity of today’s vehicle buyers. They span multiple generations, bring different motivations to the table, and possess varying financial profiles—all of which shape their distinct needs and expectations. Some study highlights:

• Traditional new car buyers average 50 years old.

• Electric vehicle (EV) buyers tend to skew younger, with an average age closer to 41.

• Millennials represent a significant share of buyers overall, with Gen Z emerging as a key demographic for EV purchases.

• Income levels of EV buyers far exceed traditional buyers, averaging around $140K per year.

Understanding these demographic and financial nuances isn’t just an academic exercise; it’s how forward-thinking dealers shape tailored strategies to meet a wide range of preferences. per

Why Drivers Buy Today

Consumer behavior has always been influenced by economic pressures and personal needs, but the triggers for making a vehicle purchase vary among buyers. For example, new car buyers are motivated by milestones like aging vehicles and higher maintenance/repair costs (25%), the desire for more up-to-date technology and features (23%), or lifestyle changes that necessitate a new type of car (20%). Used car buyers, on the other hand, often cite vehicle reliability concerns or needing a new type of vehicle as primary drivers.

However, the rise of alternative market segments such as EV buyers reshapes buyer motivations. EV buyers are largely tech-savvy, engaged online, and driven by environmental benefits or government incentives for clean energy vehicles.

Each buyer’s underlying motivations offer insights into how dealers can craft messages and purchase experiences that connect directly to the drivers behind each consumer’s decision to purchase a vehicle.

The Digital Evolution of Car Buying

Technology’s role in reshaping consumers expectations of an optimal car-buying experience cannot be overstated. Gone are the days when browsing dealership lots effectively served as every buyer’s default first step. Today, 79% of car buyers visit dealership websites as part of their research, cementing the online domain as a front line in the buying experience.

Today’s buyers seek out transparent pricing, interactive vehicle display options, and online financing tools. Their interest in these technology-driven experiences owes to a desire to feel confident, informed and in control.

One area where dealers can meet customers where they are in the car buying process relates to vehicle valuations. Today, more consumers seek out values for their current vehicle, as well as one they’re looking to purchase, online.

Solutions like Kelley Blue Book® Instant Cash Offer help dealers serve this need by giving customers a more direct, transparent role in determining the value of their current vehicle and providing an initial offer that’s backed by a brand consumers trust. In turn, dealers benefit by using Kelley Blue Book® Instant Cash Offer as a means to engage customers in the digital manner they prefer and provide the start of a more time-efficient and customer-focused buying experience that results in lasting loyalty.

From VDPs to Virtual Rolls Royces

When it comes to how consumers shop online for their next vehicle, it’s important to recognize that consumer expectations have changed—they’ve been shaped by the experiences consumers receive when they shop for other retail goods online.

For dealers, a critical focal point for vehicle buyers rests with the way they regard your Vehicle Details Pages (VDPs). The key test: Do they provide the immersive experiences–360-degree views, embedded explainer videos and personalized overlays—buyers want to have a robust understanding of a vehicle before they set foot in a dealership?

vAuto’s merchandising solutions, including Intelligent Promotion, give dealers the means to overhaul these digital touchpoints and tell better stories about each car’s features and value. When VDPs connect better with buyers, dealers are better positioned to capture consumer interest and turn their inventory more quickly.

The Hybrid Customer Journey

Even with the surge of digital tools, the industry remains largely rooted in a hybrid model that combines online resources with physical dealership experiences. The study finds that an overwhelming 93% of purchases in 2023 combined online and in-person steps, reaffirming that the future of car buying depends on omnichannel strategies. Whether it’s scheduling test drives or finalizing pricing conversations, dealerships must offer a seamless bridge between their website and their showroom.

Cox Automotive’s new Retail 360 solution helps dealers provide a more seamless experience as consumers move online to the showroom or complete the entirety of their vehicle purchase process online.

How to Address the Affordability Challenge

Through much of 2023 and 2024, Cox Automotive’s dealer sentiment studies have shown that dealers are concerned about vehicle affordability. The average transaction price of a new vehicle is close to $48,000, and the average listing price of a used vehicle is close to $25,500.

Both averages are far higher than they were just a few short years ago—a fact that consumers understand all too well. The Cox Automotive buyer journey study found that 49 percent of new/used vehicle buyers found that prevailing prices for vehicles where higher than they expected.

Dealers can help today’s vehicle buyers find their best next vehicle and address their affordability concerns by addressing two critical fronts—your inventory strategy and your pricing strategy.

Inventory Strategy: vAuto’s new and used vehicle inventory management solutions help dealers better connect their strategy for stocking their inventories to the vehicles that are currently selling in the market. When stocking decisions do not reflect current market conditions, dealers run the risk of curating new and used vehicle inventories that are out of step with consumer expectations and their concerns about vehicle affordability.

vAuto’s Conquest solution helps dealers align the days supply of new vehicles in their inventories to the Market Days Supply of specific model/trim lines in the local market. Such insights can help dealers understand they may be too heavily stocked in vehicles that may be less affordable than others in the lineup.

vAuto’s Provision and ProfitTime GPS solutions provide similar stocking strategy insights to help dealers fine tune the vehicle segments and price points that will play the best in their local markets.

Pricing Strategy: In a market where affordability is top of mind for many buyers, it’s important for dealers to ensure the prices they ask for their new and used vehicles fall within the ranges that today’s buyers expect, based on the research and shopping they’ve already done online.

As dealers define their pricing strategy, it’s important to recognize that having the lowest price in the market for a new or used vehicle isn’t always necessary if other elements of your consumer engagement, like the appraisal offer and valuation noted above, give buyers a reason to have confidence and trust in the price you’re offering.

That said, however, concerns about vehicle affordability mean that today’s new and used vehicle buyers are price conscious. They will by pass vehicles that, based on their estimation, are priced too high compared to other vehicles.

vAuto’s new and used vehicle solutions help dealers determine the optimal price point for every vehicle, based on their strategic objective to go for volume, gross profit or a combination of both. On the new vehicle side, it’s also important for dealers to make sure their pricing, and related merchandising, captures the latest incentives and rebates to ensure the price an online buyer sees reflects the current price for the vehicle in the current market.

Closing Thoughts

The way customers buy cars has changed. Their expectations haven’t. They still want clarity, fairness, and convenience—achievable only when physical and digital buying methods harmonize. At vAuto, we don’t just help dealers solve today’s challenges—we work to help make your business better and set the stage for your future success.

The post Doing Business the Way Today’s Customers Prefer appeared first on vAuto.

• “Invested” introduces the new Variable Management strategy, which brings investment management principles to used vehicle operations, upending the fundamental beliefs and best practices that have shaped the industry for more than a century. 

• Launching at NADA 2025, “Invested” is Pollak’s seventh book that explores how implementing the Variable Management strategy helps dealers address current operational deficiencies that accelerate ongoing ROI erosion. 

• “Invested” encourages used vehicle dealers and managers to reframe the way they view themselves and their used vehicle investments in the market today and for the future.

 
ATLANTA—Jan. 8, 2025—Cox Automotive Inc.’s, Executive Vice President and vAuto founder, Dale Pollak, has released “Invested: The New Science, Strategy & System of Used Vehicle Investment Management,” his latest book that challenges the fundamental beliefs and assumptions of used vehicle operations that have shaped the industry for more than a century. “Invested” is a new kind of playbook that offers dealers a path forward to profitability and success amid a historically challenging market. 
 
“I set foot in this industry 56 years ago, driven by a desire to innovate and create solutions that not only streamline operations, but transform how we perceive value and success for used vehicle departments,” stated Pollak. “’Invested’ is not just a manual for managing used car operations; it is a testament to the enduring principles of investment and an exploration of how strategic thinking and innovative management can yield significant returns.” 
 
For dealers looking to redefine their used vehicle operations so they remain relevant and profitable in the years to come, “Invested” details how: 

The post vAuto Founder Dale Pollak Releases New Book, “Invested” appeared first on vAuto.

My work on Invested, along with co-author Lance Helgeson,

began about a year ago after we hosted vAuto’s Access: Innovation event in Chicago. While there, we talked about how the used vehicle market is returning to the levels of price and value efficiency that we saw in the years immediately preceding the pandemic. I’m sure many readers felt this reality in their financials for 2024—you probably sold more used vehicles than you did in 2023, but the net profit those vehicles delivered to the bottom line of your used vehicle department likely looks more like it did in 2019.

Invested examines some of the root causes of this dynamic, which we discovered by applying predictive data science to help us understand where common inventory management practices may fall short and how they might be improved. The data science revealed a few surprises, two of which I’ll share here:

1. Dealers often manage used vehicles as merchandise, not investments. We came to this conclusion after using data science to help us know a) the investment potential of every used vehicle is unique and b) dealers often treat every vehicle the same, despite the inherent differences in each vehicle’s ROI potential. This “sameness” manifests as dealers apply the same mark-ups as they price vehicles and they often give distressed inventory too much time to find a buyer, resulting in less-than-optimal ROI outcomes. At the same time, dealers tend to short-sell their best investments, which is something the best financial advisors and investment portfolio managers avoid.
2. Individual beliefs and biases play an outsize role in used vehicle decision-making. Invested reveals how the absence of a dealer-established investment strategy, across acquisition, appraising and pricing decisions, gives decision-makers a lot of latitude to do what they think is right for each vehicle. The book details how such latitude tends to serve the best interests of the individual, not the bottom line of the used vehicle department or the dealership.

I devote the bulk of Invested to helping dealers understand how they can turn the power of predictive data science to their advantage. In short, the book serves as the operations manual for dealers to establish and execute their preferred investment management strategy. The book also details how the vAuto team and I have built and enhanced our ProfitTime GPS solution to help dealers execute this strategy, and measure/monitor its effectiveness in real time, with every acquisition, appraising and pricing decision.

My work on the book, and the success I’ve seen with dealers who’ve fully adopted an investment management strategy to guide their used vehicle departments, leaves me convinced that this new approach will serve as a kind of Great Divide: If you’re on the investment management path in used vehicles, you trust the predictive data science that drives it and you follow the principles, you’ll sell more and make more than tradition-minded dealers, who’ll remain trapped in today’s ROI spiral.

Stop by vAuto’s booth at NADA (#2506) where you can pick up your copy of Invested and chart your own new way forward. See you in New Orleans!

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