Press release
Toomey Group’s used car business continues to go from strength to strength with the help of INDICATA’s used car pricing insights platform
Lee Pembroke, Toomey Motor Group’s brand director shares with us how INDICATA is playing a major part in the growth and profitability of its used car business.
Lee Pembroke, Toomey Motor Group’s brand director shares with us how INDICATA is playing a major part in the growth and profitability of its used car business.
The visibility of used car prices on INDICATA ensures we always position a used car at the right price – it enables us to maximise profitability across our eight car franchises spread across three sites in Essex. In the past year we have been using INDICATA, our stock turnover and profit have risen while our overage stock has reduced.
It has presented us with an interesting challenge in that we have been putting an extra strain on our refurb and smart repair team as we have been turning our used stock more quickly. We typically sell around 6,000 used cars across the group, so we have invested some of our disposal profits on scaling up our refurb facilities.
Daily used car pricing review
We review used car pricing daily but depending on the local market we can re-price cars up or down at least three times per week.
Our typical stock turn is between 30-45 days, so the entire group’s 500 vehicle stock is turned at least every 45 days. Speed of stock turn has become even more important over the past six-nine months when interest rates have risen quite dramatically.
INDICATA has been extremely valuable when selling used cars, but it is also of huge benefit when we buy vehicles. We look on the dashboard of when stock is selling quickly in a 60-100-mile radius of our dealers as well as avoiding the stock that is in plentiful supply locally. If INDICATA’s Market Days’ Supply is scored at 200 that suggests there is too much stock of that model locally while an MDS of between 20 and 35 is where we like to buy.
Helping manage the price we pay for part exchanges
Whether we are buying from the trade or whether we are taking in a part exchange we use INDICATA to help us manage the price we pay. Around 60% of stock comes from part exchanges, while 40% is purchased from external trade channels.
If the MDS is low and we know a car is selling, we can afford to pay an extra £500 in the knowledge that we are going to sell it quickly. Increasing our trade in price gives extra peace of mind to the customer that we are treating the part exchange valuation fairly, and we know we are making data-led decisions rather than taking educated guesses.
We can also make sure we don’t get caught out by paying too much for a car as INDICATA identifies very carefully on model facelifts and pricing differentials between a new and old model. This has been extremely valuable with Toomey Car Store our car supermarket as we are typically buying and selling models from OEMs we don’t have as much experience with across the group. INDICATA data gives us peace of mind when buying and selling for this business.
Maintaining used car profitability
We have been in a market which has been artificially buoyant for some time but by studying the rise in new car registrations and how it is impacting used prices we are preparing ourselves for when the market changes. We want to maintain profitability and the INDICATA data puts us in control of our own destiny.
EVs is a good example of a changing market as they are not following a logical price trend. Their pricing has been very volatile, and they have yet to reach a balance point. You would be hard pushed to value cars without the help of INDICATA data because of the speed of change in this sector.
Monthly meeting to review pricing
Since we have been having monthly stock reviews with Charlotte our customer success manager, we get the opportunity to review our pricing against the market from an independent set of eyes when analysing profitability, stock turn and stock profiles. It keeps me and my used car managers on our toes which is never a bad thing particularly in Q3 and 4 2023 when the market was moving on a daily basis.
Overall, the whole INDICATA on boarding process plus the support we get along the way means it has been at the forefront of the continued success of our used car business. When there are so many changes in the new car retailing landscape it is important the group continues to run a profitable and growing used car business.