How Projected Rates of Depreciation Will Affect Your Used Car Sales in 2017


In 2016, we saw used vehicle depreciation rates rise above the 15% projected previously. This year, they’re projected to reach 20% or higher for used cars and up to 18% for used trucks. Your profit margins are determined in large part by these rates of depreciation, so it’s important to be cognisant of this while evaluating your used car reconditioning processes.
​Why They’re Depreciating

Over the last year we’ve seen an increase in the volume of available used cars, which directly affects both the value of your used vehicle stock and the prices consumers are willing to pay for them. With higher used car volume comes more options for consumers, which means that you may need to offer more financial incentives in order to get your cars off the lot. This will cut into your profit margin, especially if vehicles spent substantial time going through the reconditioning process before making it out onto the lot.

The Role of Your Reconditioning Process
The used vehicle market is flush with vehicles that are certified pre-owned, newer, lower mileage, under warranty or off-lease maturities . As more high-quality used cars and trucks continue to come onto the market, the value of your used car stock will continue to decrease. This is why it’s extremely important to keep your newly purchased used cars flowing through the reconditioning process. That way you aren’t stuck with a vehicle that is depreciating and cutting into your profit margin.

How ReconTRAC Can Help
There are many ways to ensure that your reconditioning process is as efficient as possible. The most important thing you can do to streamline your recon is to thoroughly and accurately evaluate the processes you already have in place. When you take a hard look and evaluate the data, you’ll likely find many places where there’s substantial room for improvement. This will allow you to create better processes moving forward.

In order to process the large volume of data associated with the recon process, your dealership needs a product like ReconTRAC. It will track the entire reconditioning process from start to finish, giving you an accurate look at what’s working and what isn’t. Using our program will allow your reconditioning departments to push vehicles to each other with minimal management involvement, allowing managers the time to focus on other aspects of their job.

Contact us today to learn more about how Green Cloud products can help you improve your used car Time to Market, and to schedule a demonstration.