Trended Valuations is here: All you need to know
As we launch Trended Valuations to the market this week, read on to understand why this is important and how you can use the data.
We aim to give you the confidence to act in changing times through the power of our data, tools and insight so that no retailer is left behind.
As the market becomes increasingly complex with many variances by segment, you can no longer apply a forecourt-level one-size fits all strategy. Making decisions on a vehicle-by-vehicle approach, combining your market knowledge with our retail market data is the route to success in the current market.
Find your next profit opportunity with Trended Valuations
Trended Valuations unlocks the power of our valuations in a whole new way, adding a 6-month view of both historic retail price movements with a forecast of retail values 6 months into the future.
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Understand margin opportunity and risk from prep to sale. Buy vehicles with value at the point of sale in mind, not just point of purchase.
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Set your entry price with pricing trends in mind. Understand whether the market has been holding steady or not. Get more margin out of vehicles with a strong valuation trend.
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Identify margin opportunities or risks sooner to make the right call between retail and trading out.
How do you calculate your future valuations?
It’s important that you understand how we calculate our valuation forecasts, knowing what is and isn’t factored in. As ever with our valuations, we are purely data-driven. We don’t apply any editorial or try and predict what might happen with market dynamics. We forecast based on known factors such as current market trends, pricing and seasonal observations. We wouldn’t ever try and predict future consumer behaviour, industry dynamics or economic impacts as there are too many unknowns.
How accurate are your future valuations?
A forecast can never be 100% accurate, especially when there are so many external factors which can impact the price of a vehicle. What we’re looking for is a high degree of confidence that the forecast is accurate enough so it can be relied upon and give confidence in decision-making.
We’ve been producing and perfecting our future forecast valuations over several years now, and the data has been used by leading finance companies, banks, insurers and fleet & leasing companies to manage the risk of their investments. We analysed our future valuations over the last 12 months to look at the accuracy of each forecast over a 1, 3 and 6-month period, comparing the actual retail value to our forecasts. Here’s how the results stacked up:
1-month: 99% accurate
3-month: 97% accurate
6-month: 95% accurate
This means that on average the retail price 1 month out is within 1% of our forecast across the millions of vehicles we forecast and analysed. On each Trended Valuations graph in Portal, you’ll see a range around the prediction which shows a typical margin of error. So if we forecast a VW Golf TDI to be worth £17,699 in 1 month time, the actual value would typically fall somewhere between £17,522 and £17,876.
Now, given these are averages, there will be some outliers, typically driven by a large market change. A good example of this is the Tesla new car price drops last year. We could not have predicted that Tesla would reduce their RRPs so drastically and the impact this would have on the used EV market. However, our valuation forecasts quickly adjusted for this once the change had happened.
How do I access Trended Valuations?
Trended Valuations data will be integrated into several existing key retailer workflows so that the data is there when and where you need it. You’ll find valuation trends now in the following areas in Portal: Retail Check; both out-of-stock and in-stock journeys, complete with an updated customer view to help you manage part-exchange conversations with customers. Vehicle Edit; under a new “Valuation and pricing” tab.
Retail Check appraisal
Trended Valuations will be integrated into Retail Check so that this data is accessible as part of your existing workflow. To perform a Retail Check for a vehicle you don’t currently have in stock, simply lookup the VRM and click “Retail Check”. For a vehicle on your forecourt, click on the three dots next to a vehicle in your stock list and click “Retail Check”.
Vehicle Edit
You can also find valuations trends on a new tab in Vehicle Edit, “Valuation and pricing”
Online learning to build this insight into your day-to-day
We’ve just launched a series of new insight masterclass content to support you in understanding how to use this data alongside our other insights in Portal. Watch now to understand more about how to use valuation forecasts when sourcing and pricing and how to understand this alongside other metrics.
If you want to know more about how valuation forecasts can help your business and have a review of your forecourt to maximise your Auto Trader return, please reach out now for your free forecourt review.