Use OfferUp to shape your pricing strategy
The events of the last couple of years, from Covid to chip shortages, have had immense effects on the auto industry and specifically the price of used vehicles. The good news is, that prices seem to be trending in a better direction after the first quarter of 2022. According to Cox Automotive, "the average list price for a used vehicle last month stood at $27,246. While this was 28 percent higher than in March of 2021, it was down from February’s average of $27,609. Used car prices are also down from December’s record high of $28,193.” With that said, Charlie Chesbrough, a Cox Automotive senior economist, noted that “the anniversary of the chip shortage – when prices started to skyrocket – is approaching. Year-over-year growth rates will come back to earth. However, prices will not go negative. Rather they should return to more normal growth trends but from a higher base”
What does that mean for you? It’s important to stay on top of price trends and make sure you are priced competitively to help maximize profit margins and move inventory efficiently and effectively. With thousands of car dealerships and private sellers on the platform, OfferUp and OfferUp Motors can be a tool to help you do both. Below we have outlined a few tips to use the app “shop your competition” and help influence pricing strategy decisions.
Periodically check various vehicles on your lot against others in the market. Make sure you are comparing similar mileage, years, and trim level when looking at pricing. Take note of pricing trends and where your vehicle pricing may not be competitive with comp listings and adjust accordingly.
Be sure to set your search category to “cars and trucks” to help funnel your search.
Edit your zip code and local distance to tailor search results. You can also change your search zip code to gather data from nearby cities or markets similar to your own or markets you regularly compete with.
Use filters to set price ranges for your shopping searches. Pay attention to pricing thresholds where there seems to be an increase or drop off in local inventory for particular vehicles. For example, a vehicle priced at $9999 versus $10,001 will receive all the search views from anyone that sets a price max of $10,000.
Using this strategy will help you get the most out of your listings by understanding what else is out there. When your inventory is getting traffic and views, consider that car shoppers are also clicking on a similar vehicle and comparing themselves.
A Year-Long Tax Season?
Tax season has always been one of the most fruitful parts of the calendar year for the auto industry. In many ways, it’s the “Black Friday” of Auto Sales. It’s also like that for us here at OfferUp. For dealers, it’s supposed to be the busiest time of the year. All across the country, big car lots and independent stores gear up for people to come in and upgrade their rides with their Tax Refunds.
So why doesn’t it feel like that for many dealers?
Here are several factors that have contributed to a slow tax season thus far.
Tax returns, according to many financial experts, are expected to be lower for many people, predominantly because of 2 factors:
Advanced Child Tax Credits - Many families with children qualified to receive tax “refunds” monthly in the form of an advanced payout due to the covid pandemic. This means that the large sum of money they would normally expect to receive would have already been distributed. That being said, proper planning for a bigger purchase during tax time could have become a challenge.
No Student Loan Payments: Because the government has also waived the need for student loan participants to make their payments, it also means, they have not paid any interest on student loans, which in years past, has been a source of $1,000s of dollars worth of money that they are not going to see.
IRS backlog: The IRS has been several weeks behind with issuing tax refunds
Through April 1st, 2022; 49% of refunds have been issued compared to 77% this same week in 2019
Auto industry experts estimate a stronger end to April and into May as refunds continue to flow in
So what does that mean for your dealership?
Remember, people still need vehicles! Student Loan borrowers were given the chance to save their money instead of paying off student debt, and Parents have ALREADY received refunds for their kids, in the form of monthly checks. That being said, this tax season may look like a marathon, rather than a “fun run”. Several dealers we’ve talked to expect an extended Tax Season, much different from years past.
Here are some tips:
Look for fuel-efficient inventory - With the current state of high gasoline prices, car shoppers are now more than ever looking at fuel-efficient/electric vehicles
Help the customer build confidence in the sale - As many consumers have not received larger refunds, they may be hesitant to pull the trigger on a purchase. However, with the offer of warranties, trade-in value, acknowledgment of your understanding of their situation, and affordable monthly payments, you can help the customer feel like they are getting a good deal and not getting ripped off.
COMMUNICATE: Everyone and every business is under stress right now. The more you can share about the current market, the more they will come to understand you and your business. Over-communication is impossible, and GOOD communication can only help build a solid relationship with your customers.
Work EVERY lead: Because tax season may be stretched throughout the year, there may be more of a steady stream of interests as opposed to high peak seasons. In order to limit the volatility that your dealership experiences, be sure to take every lead seriously. Each inquiry, no matter what is said, if worked well, could mean the difference in order to “Keep the lights on”.
Re-work old leads: Everyone appreciates following up. They may not have been interested during the initial engagement but may be more serious today.
The need for vehicles has increased and businesses are gearing up for the summer travel months.
reference articles: https://www.autocreditexpress.com/blog/tax-refunds-could-be-delayed-in-2022/
SocialDealer Joins OfferUp as Newest Motors Partner
This month, OfferUp added a new value-added reseller. SOCIALDEALER is a full-service agency and development center for the automotive vertical. They utilize a vast knowledge of social media applications and technology, as well as dealership and OEM operations to facilitate success for clients and partners. With a staff of Facebook Blueprint and a Facebook Community Manager certified team, SOCIALDEALER continues to set best practices for all social media channels. Using data to drive social success, their ads are highly effective when it comes to quality operating at an average of 99% efficiency rating. OfferUp is excited to work alongside this leading provider of social media marketing and reputation management solutions for the automotive industry.
If you are interested in learning more about OfferUp Motors VAR program, simply use the "signup" button on the top right corner to start.
Webinar: Car buyer trends for 2022 and beyond
In this webinar, OfferUp Motors joined Auto Remarketing to share key insights and takeaways from the recent tax season and look at what matters most to car buyers when it comes to purchasing a used vehicle in 2022. With hundreds of thousands of cars sold and millions of engagements between buyers and dealers since the new year, OfferUp can show you what is working for dealers, what isn’t, and will help you outline an advertising strategy that puts your used vehicle listings in front of the right buyers at the right time.
Learn how buyers are finding used vehicles when their preferred choice isn’t readily available
What are the most frequent questions dealers are getting from car buyers during the first engagement and the top 5 responses that are converting
See why price doesn’t matter as much as the buyer experience when it comes to buying a vehicle today
What are the top user searches in OfferUp’s vehicles category
Learn which vehicles and features are generating the most interest
Did you know: this month in auto history
On April 17, 1964, Ford introduced the first Mustang at the World’s Fair in New York. On the day they were unveiled, 22,000 Mustangs were sold at a base price of $2,368. Since then, the Ford Mustang is one of only a few cars to be released consistently in a new model every year for over 50 years.