Analysing valuations: Used car market intelligence

Data, created by customers during their buying journey, is a gold mine of information. Over the last seven months we have been analysing data created by customers through our NetDirector CAP Valuations tool to gain insight into how the market is performing and identify trends within it. And it’s a rich seam of high-value information.

01-07-15-CAP Valuations AnalysisWe studied 59 different motor retailers of varying shapes and sizes, and almost 90,000 unique valuations. Through these we can understand everything from the makes and models of vehicles valued, to the valuations themselves and even the gender of the individual carrying it out (click on our infographic to the left for more).

How much are people’s cars worth?

Our vehicle value data comes straight from CAP, so any fluctuations in the values broadly reflect wider market activity. However, dealers can add a plus or minus deviation against CAP figures, so this is another dimension to consider.

Reflecting the thoughts of commentators such as CAP’s own Philip Nothard, our data shows used car values have fallen significantly since late 2014. Clean values delivered in May 2015 were down 10% on November last year; average down 9% and below average 8.5%. Mileage is obviously a contributing factor, but the average was 58,840 in November compared to 55,153 this May – a fall of almost 7%.

Are dealers opting to deliver lower values though?

Obviously, a dealer won’t want to give a consumer a valuation that simply doesn’t reflect what they would pay. Most dealers therefore tend to put a small negative deviation on CAP values.

However, we have observed that the negative deviation has been heading towards zero rather than getting bigger. Back in November, the average deviation was -2.1% when values returned were higher, yet by May this has changed to -1.6%. This indicates that the downward trend in vehicle values via the NetDirector CAP Valuations system is very much market-driven, rather than dealers increasing potential margin.

Darren Martin, Black Book Live Senior Editor, said recently; “Continued downward pricing movements are likely across the board, with volumes in the market not likely to decline any time soon. However, these downward movements are only likely to be in-line with the movements over the last 2 months and are nothing untoward or unexpected.”

Diesel vs. petrol

On average, 58.17% of valuations are for petrol cars, the remaining 41.83% being diesel. At its lowest, just 39.24% of valuations were for diesel variants – this occurring during February and March. December 2014 saw the highest share for the black stuff, claiming 44.4%.

It’s difficult to pin down the reasons behind these fluctuations, but it’s interesting to note that the high-profile news about diesel’s impact on the environment at the end of February coincided with a dip in valuations. What’s more likely is simply that there are more petrol cars on the road, and with increases in the efficiency and cleanliness of new petrol engines, people are looking to change. SMMT figures reflect this resurgence in petrol since diesel’s peak back in 2012.

Being ‘always on’

So many digital agencies are now banging the ‘always on’ drum – us for longer than most – and the data from valuations simply adds to this.

Our figures show that between 6 and 10pm 28% of daily valuations occur, demonstrating how important evening cover of enquiry lines is these days (e.g. Live Chat, phone and email). Stretching things a bit further, 41.2% of valuations take place ‘overnight’ between 6pm and 8am. The remainder are within normal working hours. Robust follow-up with these leads is the key to converting them, and in our experience the best at doing so can consistently convert around 20% to sale.

Who’s doing the valuations?

The gender divide in car buying is regularly documented. Various studies show that female car owners dislike the confrontational nature of traditional sales process, and this is backed up by the fact that at Rockar Hyundai, where tradition has been thrown out of the window, 60% of purchases have been made by women.

Our figures show that back in November 2014, just 16.2% of valuations were undertaken by women, however in the run-up to, and during the all-important plate change (February, March and April), this significantly increased, maxing out at 26.41%. This is a proportional increase much higher than might otherwise be expected, indicating that women are more engaged in purchasing around plate change than at any other time of the year.

Conclusion

Any user of NetDirector CAP Valuations can download the data it creates and analyse it for trends which can be exploited by their businesses. Whether it’s the cars that people want to dispose of or even the proportion of those engaging online who are women, dealers should be looking to personalise how they deal with the people on a case-by-case basis. Finally, understanding market conditions can be improved by looking at them on an ultra-local basis. Doing so makes it possible to market in the right places at the right times in the area most relevant to a retailer and its customer base.

About GForces

GForces is Europe’s leading provider of digital solutions to the automotive industry. Working with more of the UK Top 200 dealer groups, more OEMs and more international businesses than any rival, we help our clients navigate and maximise their online presence across mobile and desktop platforms.
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Author: GForces (611 Articles)

GForces is Europe’s leading provider of digital solutions to the automotive industry. Working with more of the UK Top 200 dealer groups, more OEMs and more international businesses than any rival, we help our clients navigate and maximise their online presence across mobile and desktop platforms.