Valuing cars in the trade is again proving a challenge when the market is so uncertain. We are again witnessing massive disparity between the two trade heavyweights Glass and CAP only they seem to have completely crossed to the other side compared to the values they were publishing earlier in the year.
Without getting into the specifics there has always been a feeling in the trade that CAP values were a great tool to be able to buy from and Glass the one to sell from. From a customer perspective it really was – and still is – the luck of the draw as to what guide the dealer they visit bases their trade-in valuation on.
This also may be the reason for the large swing of prices a car buyer may encounter when looking at similar cars advertised online. The problem is that with little else to go on they could easily be confused as to what exactly is the best price they can get.
Of course both the guides will tell us that they are just that “a guide” and we can be sure that the data and statistical analysis they use is based on history and factual information, but they both can’t be right can they? They could both be wrong though.
On some cars their opinion of the value can vary by as much as £2-3000, the only difference, according to many car dealers we spoke to, is that it is now seen to be Glasses that is the one to buy with and CAP the one to use for selling, and all this in the matter of a couple of months.
It can’t help that the market is probably more volatile than at any point during the last couple of years but it seems astonishing that two publications reporting on the same market can be so wildly different in many of their valuations.
As one sales manager acknowledged to us you can tell it’s gone mad because in November the valuations in Glasses have hardly moved leading him to suspect that they have been way too hard on certain models which you just have no chance of buying at the valuations stated. On the other hand he said CAP were being unrealistically ambitious on some of their valuations although we suspect that with much of CAP data presumably based on auction prices it is likely that these valuations have some basis in fact.
The one certain thing however is that everybody is finding it difficult to acquire 4wd product and in some cases customer demand is hotting up to the extent where dealers are being asked for nothing else. The likelihood of prices spiralling upwards is already upon us and, I suspect, will easily surpass whatever value the guides put on them.
The industry of course finds much more comfort if the guides are broadly in agreement on most cars, it is easy to set a realistic retail price which will generate footfall if dealers can be happy that everybody is in the same ball park price wise and it usually means the market is steady and therefore easier to plan a stocking strategy. It will certainly be interesting to see what happens with valuations over the next couple of months and, who knows, maybe the guides could maybe even talk to each other where there are such wildly differing opinions on seemingly run of the mill examples (we’re not holding our breath).
How does a car dealer arrive at a price for a used car?
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