Top market trends car dealers need to focus on in Q4

Welcome to this week’s episode of Used Cars Weekly, the original CBT News show dedicated to bringing car dealers best practices and tips for the used car department, in-depth dealer interviews, hands-on dealership strategies, as well as vendor analysis. Today, host Jasen Rice, founder of Lotpop, discusses current market trends going into Q4.

Rice says it’s going to get tricky, moving forward. Going into December, most markets have dropped 30 to 40% in shopper engagement, where people have gone online searching for used cars. Used car listings have stayed the same across the board. As shopper engagement slows down and inventory levels stay the same, the market is going to be crunched.

Profit margins are going to be shrinking again, says Rice. The upcoming tax season for next year might be limited. Consumers are likely not going to get a big tax return in the upcoming season. Rice says don’t just look at your current inventory and sale rates, but remember to keep your inventory moving. Everything car dealers currently buy will be aged in December, going into January.

A lot of dealerships are running thin on their used vehicles. Rice says he’s seeing bulks of inventory being bought, with hopes of the retailers being able to hold on and have that inventory. He says you need to learn how to acquire cars from a private seller.

New car inventory is starting to trickle up. Rice says to focus on private party acquisitions because you can’t be too reliant on trade-ins and auctions. Also, middle bucket management, which comes to the 31 to 60 day selling period, to prevent bleed-through. He says you need to be selling 5% or more than what inventory is sitting there. These next two to four months are what’s going to make or break your store going into 2022.

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