In today’s modern world of data analytics, the more information at a business’ disposal, the better positioned it is to tap into valuable insights that lay the groundwork for strategic and informed decision-making. The value of data is evident, yet with all the aggregate industry and manufacturer-specific data sources available, there is still a gap when it comes to pricing – the most critical area of the auto purchasing journey for buyers and sellers alike.
Widely available sales data tells us that after years of record sales in the Canadian auto sector, sales volume has been moderating for the past year and a half. But what about vehicle pricing trends? Where are they going and what do they tell us about what is happening in the market?
It’s no secret that pricing has a large impact on the automotive buying and selling process. Having a credible view to how much Canadians are spending on which types of vehicles, and where, can help dealers and manufacturers work together to develop marketing and promotional strategies that leverage pricing trends and minimize the risk of pricing that is out of sync with actual market data.
That’s why autoTRADER.ca – which collects and analyzes automotive pricing data from more than 400,000 listings – developed a monthly price index that tracks the Canadian market and provides a wealth of data on new and used vehicle pricing for dealers, OEMs and consumers. Providing a national lens, as well as insights from different regional markets across Canada, the autoTRADER.ca Price Index tracks price variations across different body types, manufacturer origin and top searched models. This helps dealers and OEMs distill a macro understanding of the Canadian automotive market into digestible insights that can be funnelled down into day-to-day decision-making.
By helping educate Canadians about price fluidity, and why the cost of vehicles is going up or down, and provide much-needed context around what is found on most marketplaces these days, the Price Index aims to make the vehicle buying process more rewarding for everyone involved. After their home, the car is typically the next biggest purchase for many Canadians, so just as it’s important for homebuyers to stay informed on real estate market trends, it’s important to be in the know on the automotive landscape. At the end of the day, the more realistic understanding a consumer has about vehicle pricing trends in their market, the more confident they will be to make the purchase when presented with a fair deal.
The benefit to dealers is that a better-informed consumer is also likely to be a more reasonable consumer, less likely to demand unrealistic discounts that are impossible to satisfy given current margins. This leads to less friction, bridging a stronger relationship between buyer and seller. By offering a lens into new and used vehicle pricing across Canada, the introduction of a reliable source of monthly national and regional automotive price data should strip away much of the uncertainty that often acts as a barrier between buyers and sellers.
Beyond its utility as a consumer and seller tool, this data can provide analysts with a real-time snapshot of the health of the automotive market. Combined with known sales data, it can help validate a spectrum of insights on the automotive landscape, informing a broader view of the Canadian economy, especially when it comes to issues such as consumer inflation, disposable income and manufacturing supply and demand.
As we look forward, it is our hope that providing greater access to pricing trends will lead to more informed decision making and spark greater understanding and dialogue between buyer and seller. The state of automotive is constantly evolving, setting us up for new challenges and opportunities, but it all starts with the data.
– Matt Lawson, vice-president, dealer software and OEM with autoTRADER.ca