By Micah Tindor, Assistant Vice President, Consumer Vehicle Disposal, Cox Automotive
As dealers head into the final stretch of the year, the automotive market is anything but predictable. Inventory swings, affordability pressures, and shifting consumer behaviors are creating a complex environment—one that demands smarter, more agile strategies. In this blog, I’ll share insights from our recent Auto News webinar on how dealers can navigate these challenges, capitalize on seasonal opportunities, and build scalable systems that drive long-term success. Whether you’re managing trade-in complexities or rethinking your acquisition strategy, the tools and tactics we’ll explore can help you stay ahead of the curve.
Navigating Today’s Trade-In Market: Trends and Challenges
Inventory pressures and trade-in challenges aren’t going away anytime soon. Trade-ins are more essential than ever, and dealers need to pay close attention to three key areas: EV values, affordability, and the growing number of consumers who are “underwater” on their loans.
On the EV front, the removal of the EV tax credit for used vehicles means dealers must be sharp and careful when valuing EVs.
Affordable inventory is tighter than ever. In September, the average transaction price (ATP) hit $50,080—the highest ever1. Meanwhile, APRs remain high—over 13% for used vehicles and 9% for new—making it harder for consumers to find lower-cost vehicles2.
Many consumers who paid above MSRP during the pandemic are now underwater on their loans. Currently, 26.6% of consumers are in this position, up from 24.1% at the end of last year3.
Seasonal Shifts: Opportunities and Risks in Q4
As we finish out Q4, dealers should be watching sales pace versus inventory levels. Through September, the used car sales rate slowed by 3.9%, and CPO sales dropped by 19.3%4. On the new car side, days supply has increased to 77 days—a normal seasonal trend, but one that requires close monitoring4.
Dealers need to be aware of several factors impacting the market:
- Tariffs are starting to show up, with OEMs unable to absorb the costs indefinitely.
- The impact of EV tax credits going away.
- The effect of the recent Fed rate cut, which hasn’t moved auto APRs.
Every market is unique, so it’s critical for dealers to closely watch their own inventory levels and adjust acquisition plans to make the most of holiday and year-end buying trends.
Building a Proactive Acquisition Strategy
A proactive acquisition strategy starts with understanding your data—knowing which vehicles to target and their total ROI. There are seven acquisition channels at a dealership:
- Auction
- Group transfer
- Off-lease
- Missed appraisal follow-up
- Trade
- Private seller
- Service lane
Dealers need to analyze their channel blend, gross ROI, and the effort required for each channel. The goal is to identify which acquisitions create a virtuous cycle of revenue generation and aggressively go after those vehicles. Dealers must know which channels to pursue, which cars deliver the most value, and then compensate their teams to drive success—creating a scalable acquisition system. Considering 5 of the 7 channels involve consumers, dealers also need to turn to solutions that help them acquire direct from consumer inventory more efficiently and effectively.
Turn to Scalable Solutions
Scalable solutions like Kelley Blue Book® Instant Cash Offer empower dealers to source more vehicles directly from consumers, delivering superior look-to-book and cost-to-market outcomes compared to the competition.
Our new Offer Accelerator add-on allows dealers to increase their acquisition pipeline to align with their goals and objectives. Dealers can flex up during less stable inventory periods or in advance of campaigns—without a long-term commitment.
Closing Thoughts
Smart strategies and scalable solutions are the keys to thriving amid inventory swings and seasonal shifts. To learn more about how Kelley Blue Book® Instant Cash Offer and new tools like Offer Accelerator can help your dealership win in Q4 and beyond, request a demo today.
SOURCE:
- Kelley Blue Book
- Wards Auto
- Edmunds
- Cox Automotive data
Micah Tindor – Assistant Vice President of Consumer Vehicle Disposal, Cox Automotive
Micah Tindor leads the strategic direction and execution of the Consumer Vehicle Disposal portfolio within Cox Automotive, including Kelley Blue Book Instant Cash Offer (KBB ICO), focused on providing the best trade-in solution for Dealers, Consumers, OEMs, and Partners.
Micah has 15 years in the automotive industry. Prior to his current role, Micah co-founded and served as COO of vAuto’s used car reconditioning software, iRecon. He held multiple Mobility leadership positions for Goodyear Tire & Rubber Company. Micah earned a bachelor’s degree at The Ohio State University and holds an MBA in Strategy from the Fisher School of Business.
