As we wrap up Q4, automotive dealers face a rapidly changing market. In a recent webinar, Micah Tindor, Assistant Vice President of Consumer Vehicle Disposal at Cox Automotive, shared actionable strategies to help dealerships navigate inventory volatility, affordability challenges, and evolving consumer expectations.
Key Market Trends
- The pace of new and used car sales is slowing, driven by inventory shortages, rising prices, and the end of EV tax credits. While fleet sales have helped offset declines, retail and CPO sales are trending downward1.
- Affordability is a growing concern. According to Kelley Blue Book data, average transaction prices (ATP) for new cars have surpassed $50,000, and used car ATPs are climbing2, outpacing consumer earnings growth. More buyers are stretching loan terms, with nearly 20% opting for 84-month loans and 17.5% paying over $1,000 monthly3.
- Negative equity is on the rise. Over 25% of consumers are now underwater on their trade-ins, with average negative equity amounts increasing significantly3. This trend is expected to worsen, with projections of 50% underwater trades in the next few years.
Proactive Acquisition Strategies
- Dealers should diversify inventory sourcing across the seven acquisition channels – auction, group transfer, off-lease, missed appraisal follow-up, trade, private seller and service lane – tracking efficiency and gross profit for each. Building a portfolio approach helps buffer against market shifts and auction volume declines.
- Mining dealership data to understand the long-tail ROI of trade-ins can reveal opportunities for additional revenue through repeat trades and service work.
- Focus on controlling the controllables: identify which channels deliver the best ROI and incentivize teams to target those sources.
Scalable Solutions from Kelley Blue Book Instant Cash Offer
- The Counteroffer tool empowers consumers to start conversations when they’re underwater on their loans, increasing close rates and building trust. Data shows that dealers were able to close 11.6% of all consumers who engage with Counteroffer – a clear signal that engagement leads to inventory5.
- 72% of consumers are more likely to accept an offer when they understand how it was calculated4. Offering transparent trade valuations, including adjustments for mileage, condition, and market factors, boosting customer confidence and increasing likelihood to convert.
- Coming soon: AI-powered damage detection for sight-unseen appraisals, streamlining the trade-in process and meeting consumer demand for digital experiences.
Looking Ahead
As the New Year approaches, dealers who embrace data-driven strategies and prioritize customer-centric solutions will be best positioned to adapt and succeed. Leveraging Kelley Blue Book Instant Cash Offer tools helps bridge the gap between consumer expectations and dealership goals, ensuring a strong finish to the year.
To learn more, click to watch the full webinar.
To see these solutions in action, visit the Kelley Blue Book Instant Cash Offer booth at NADA!
Source:
1. Cox Automotive data
3. Edmunds
4. Cox Automotive Q4 2024 Vehicle Disposer Research
5. ICO Attribution Dashboard May – August 2025
