MOTOM brings a low-cost digital platform to the sector that promises to reimagine how motor vehicles are wholesaled and accelerate the buying and selling process from hours to minutes.

The IMDA was formed to represent, support and become ‘the voice’ of the independent car and LCV dealers and independent franchise dealers across the UK.

Today the Association represents over 900 independent dealers and is growing its partner programme to increase its support capabilities.

Julian Humphreys, CEO of MOTOM, said, “In a market challenged on almost every front, we see the IMDA as the true voice of the independent motor dealer.

"The team at the IMDA have impressed with their passion and commitment to developing standards and enhancing the reputation of independent car dealers through communication and information share, new product partner introductions, and government lobbying, among many other activities. 

"Innovation, engagement, and support form the DNA of the IMDA and MOTOM is delighted to be associated with the team.”

Umesh Samani, Chairman of the IMDA said, “The IMDA continues to look for ways to support its members through meaningful partnerships with product and service providers.

"With the fast-paced world of technology, it is ever more important that we engage with class-leading partners that can evolve with the ever-changing demands placed on our members. MOTOM offered us a robust, functional and feature-rich platform to showcase to our members.”

>>Discover how MOTOM can support your vehicle trading activities

And, as if this weren’t enough, the switch to electric vehicles has created a whole new segment in the used car market, with dealers left playing catch-up on how best to fulfil its needs.

Consumers are also better informed today than ever, with access to limitless online information they can use when buying a used car. Similarly, the amount of choice available to customers has also exploded in terms of how and where to buy.

This all points to a need for agility in vehicle sourcing, stock management, marketing, sales, and customer experience. In this article, we’ll look at how used car dealers are becoming nimbler and how new technologies are helping.

Dealer to dealer trading

The retail car market moves quickly and never sleeps; buyers and sellers are active 24/7, and transactions can occur in the blink of an eye. The idea that the wholesale market should be any different seems outdated. Why should vehicle trading between dealers or dealerships within the same group be any less agile than the retail market?

The growing number of online wholesale marketplaces allow dealers to research vehicles, connect with trade sellers and transact quickly and securely at any time.

The best platforms go beyond providing an online auction facility and actively promote new connections between wholesale buyers and sellers. As with other online marketplaces, the ability to provide feedback to and rate traders makes it quicker to select new partners and begin trading with them.

Relationships with other dealers are crucial, particularly for independents, in accessing the vehicle stock they need and remaining competitive against bigger businesses.

Defining your network

Taking control of how widely you cast your wholesale buying net is a key part of dealer decision-making. Do you stick with a limited number of trusted partners or draw on an entire marketplace to access a broader range of buying options? In today’s market, and with online wholesale trading, the latter is becoming much more commonplace.

However, the best digital solutions allow the dealer to determine whether they want to trawl the entire marketplace or restrict their search to a narrower range of suppliers, depending on their preferences and specific requirements.

Never miss an attractive vehicle

Used car dealers are busy people, and any time that can be saved in sourcing vehicles is more time that can be spent selling. Online wholesale marketplaces that allow dealers to set up alerts for vehicles that meet their requirements mean that they can safely focus on other aspects of running their business without the fear of missing out on vehicles that they need.

The more sophisticated the search filters available in the platform, the more useful the alert system, and the more agile trading becomes. The days of spending hours at physical auctions or on the phone securing used vehicle deals would seem to be numbered.

Linking with stock management

Online stock management systems are now commonplace in the used car dealer world and can bring a wide range of benefits to the business, including:

• Giving a clear understanding of the location, condition, value and sales status of every vehicle in stock
• Providing accurate stock information to the sales team and customers using online sales channels
• Delivering insights on the best performing categories of vehicles and changing customer preferences
• Providing creditors, particularly stock-funders, and regulators, with confidence through regular audits and up-to-date management information

However, the effectiveness of any stock management system is limited by the quality of the data that gets put into it. With traditional vehicle acquisition methods, this can mean time-consuming manual data input, with the inaccuracies and opportunities for human error and fraud that go along with that.

Good online vehicle sourcing channels provide the opportunity to export data directly to the stock management system, ensuring that every car acquired is accounted for and the information about them is complete and up to date.

Streamlining and safeguarding this part of the stock management process means much greater control as vehicle turnaround times shrink.

Setting team boundaries

If vehicle sourcing responsibilities fall to more than one individual within the business, then it’s important to monitor and control the transactions they are making. Good digital acquisition platforms have the advantage that every purchase is recorded against the employee that made the deal.

This not only means that there is a clear audit trail for all purchase decisions but that managers can track the performance of the individuals responsible and react rapidly to any issues.

The pressure to act quickly when sourcing vehicles and securing sales opportunities is not going to ease, and the most successful dealers will be those agile enough to cope with the new demands. Luckily, there are now tools available that can help transform the wholesale side of the business, allowing the retail operation to perform at its optimum.

MOTOM’s recently launched vehicle remarketing app is specifically designed to make wholesale trades as efficient and rapid as possible. Discover more about buying or selling via this technology platform dedicated to wholesale trading.

How did the new players become so big?

> Parent companies and partner relationships

The new players have signed partnership deals with dozens of national dealers, car supermarkets and other wholesale volume players, such as leasing and hire companies, both as sources of used stock and as routes for disposal.

While their operating models differ – some becoming the shopfront for existing retailers and others buying and selling stock themselves - these operations have tied up a huge volume of vehicles that would previously have been available to other traders.

Many are also part of larger automotive groups with retail and auction subsidiaries, delivering scale and shared resources. 

> Marketing spend and buying power

The sums of money invested in traditional and online advertising have been staggering, including the shirt sponsorship of major domestic and international sports teams. This is a proven strategy for well-funded new market entrants in a bid to rapidly build customer awareness and credibility.

As the companies have grown and proven their ability to trade large volumes of vehicles, the price pressure they have been able to exert on partner businesses has increased, further distorting the market for the rest of the industry.

> The pandemic

The phrase, “it’s an ill wind that blows nobody any good”, comes to mind here. Those online companies coming to market in the lead-up to the pandemic were often able to continue trading throughout the restrictions, and were perfectly placed to cash in on the sales boom that followed the last lockdown.

Consumers also became far more comfortable with making large purchase decisions online, which has turbo-charged this growth.

How are used car dealers responding?

As the competition has increased for wholesale used vehicles, dealers, in particular independent dealers, have had to find new and innovative ways of keeping their stock portfolios filled.

Offering a good range of vehicle options for the private buyer, and even being able to source specific vehicles on demand, have never been more important in the battle to remain competitive.

> Importance of networks

To combat the strength of the very large players, independent dealers have begun to focus on the power that they can muster by forming closer relationships with other dealers.

Creating a close-knit group of trusted partnerships gives dealers greater confidence that they’ll be able to access the vehicles that their customers demand, either from stock they have already acquired or from the stock held by those in their network. It also creates a stronger channel for disposing of vehicles that don’t fit their requirements.

> Focus on being truly independent

From a wholesale perspective, independent traders like to deal with other independents, in the knowledge that they won’t come under the same price pressure that they would dealing with some of the larger groups.

Online wholesale trading enterprises are often part of much larger groups, which can be seen as a negative by smaller dealers wanting to control the sources of their stock and protect their margins.

> Digital solutions

Talk of building bigger and closer independent dealer networks is one thing, having the time and energy required to create and nurture these is something else. Used car dealers are busy individuals, so tools that can help fast-track this effort are becoming very popular.

Technologies, like MOTOM’s recently launched wholesale trading app, allow used car dealers to connect and grow their network in new ways:

• Fostering stronger relationships with existing dealer contacts by increasing the volume and value of wholesale trades in both directions
• Finding new, independent dealer connections with similar business models and vehicle specialisms
• Being able to rate fellow traders to provide greater assurance for others seeking new partners
• Controlling the scope of trades from a select few partners to an entire marketplace
• Trading in real-time and around the clock

The fact that MOTOM, in particular, is entirely independent of any dealer group, auction house or manufacturer adds to the appeal for independent dealers.

The used car market has changed beyond recognition in recent years, and market power has certainly shifted to the larger players with their deep pockets and associated wholesale and retail businesses.

For independent dealers to compete, they are looking for new sources of used stock and new routes to market, both wholesale and retail. With well-established digital retail channels, the focus has switched to the wholesale side of the industry.

For dealers, the question now is, which digital platform, or platforms, are the best fit for their businesses.

If you’re interested in learning how MOTOM’s vehicle remarketing app can help your business thrive, click here to read more or download the free app.

Volumes down, margins up

The ‘post-COVID’ consumer spike in demand for cars has started to show signs of softening, and how this continues plays out in the coming months as belts are tightened due to the cost-of-living crisis remains to be seen.

Business and fleet demand for new vehicles remains very high, not least because many company car drivers are already long overdue for a replacement vehicle. Car manufacturers’ inclination to push available supply toward the more profitable retail market has not eased this issue for fleet and transport managers.

All this adds to continuing heat in the used car market, a double-edged sword for those in the trade. The strong used values is an obvious bonus for those with access to stock, but sourcing vehicles has never been more of a challenge.

Used car dealers have been employing a range of strategies to overcome supply shortages; some completely reinventing their acquisition model to increase turnover, enhance margins, or, ideally, both. We’ll look at some of these strategies and the increasing role that technology is playing.

Greater flexibility in vehicle acquisition

Almost all dealers have their preferred manufacturers and vehicle types, often from many years of experience and a reputation for specialism in those vehicles. In recent times, dealers of all sizes have had to take a more pragmatic view of vehicle stocking to fill their forecourts and online marketplaces.

This often means stepping outside of the vehicle brands that the dealer is most comfortable with and considering others that would appeal to their customers. In addition, many dealers have begun assessing the value of slightly older, or higher mileage, vehicles that are becoming increasingly desirable in the current market.

For this to work, dealers must have good insight into the needs and wants of their customers and how a broader range of vehicles could meet these without affecting their reputation.

Encouraging part-exchanges

Where a customer is looking to dispose of a vehicle that’s likely to provide quick stock-turn and a healthy margin, encouraging a part-exchange can be a simple way to maintain the portfolio. This may mean being more flexible in terms of either the value quoted for the vehicle being part-exchanged or the margin being made on the sale, but both could be worthwhile, depending on the saleability of the vehicle taken into stock.

In a similar way, taking a more flexible view of how to dispose of vehicles taken in through part-exchange might also be beneficial. Choosing to dispose of a greater proportion of part-exchange vehicles through retail channels rather than wholesale could be a simple way to boost the selection of vehicles on the forecourt.

Meeting niche demands

For the savvy dealer with a good understanding of the used market, there may be some highly profitable niche markets worth considering. These could be unusual vehicles, or cars with unique specifications, that command high prices if marketed in the right way. Sourcing these vehicles on demand for valued customers is another option. 

Obtaining these niche vehicles isn’t necessarily straightforward, but there are specialist wholesale and retail marketplaces, as well as the private-seller market, that can be accessed.

Consider used electric vehicles

The used EV market is currently very hot, with high demand and equally healthy margins. Selling used EVs requires a degree of specialist knowledge, particularly in discussing anticipated maintenance costs and comparing lifetime running costs with traditional vehicles.

Dealers may also be expected to provide recommendations for home-chargepoint installers and advice on selecting the best rapid charge network when away from home.

Expanding the wholesale dealer network

Perhaps the most efficient way to source additional stock is to broaden the network of dealers and other volume sources, such as leasing companies and large fleets, that you work with. Building links with trusted fellow traders can take time and effort, but new online platforms can help short-cut this.

Using technology to facilitate stock sourcing

During the pandemic, strides were made in using technology to bring buyers and retailers together so that transactions could continue without the need for face-to-face contact.

But, until recently, the same trading environments have not existed for the wholesale side of the used car industry.

Instead, dealers have had to rely on tried and trusted stock sources such as trade-ins, which are difficult to control and predict, and auctions, which take time and effort.

Real-time - 24/7 wholesale trading

The new breed of online wholesale trading platform works by connecting dealers and other wholesale traders instantly, allowing a live view of all vehicles available, either in your selected network or across the entire marketplace. By setting filters, dealers can home in on the specific vehicles they are interested in buying and create alerts to notify them of new stock that meets their criteria.

This type of functionality can transform the search for, and purchase of, desirable stock, making dealers more agile and better equipped to meet rapidly shifting customer demands.

Regardless of market conditions, the vehicle acquisition process for used car dealers is shifting to keep pace with the retail world. It’s now a matter of choosing the right digital solution for your business based on the advantages it can deliver in terms of access to the right vehicles, flexibility, and convenience.

Discover more about how MOTOM’s new vehicle remarketing app can help to enhance your dealership’s stock inventory and get the latest used vehicle stock delivered directly to your phone.