Study Shows 23% Lift in Gross Profit for Carfax 1-Owner Cars
DealerTrack, Inc., a subsidiary of DealerTrack Holdings, Inc. (Nasdaq:
TRAK), a leading provider of on-demand software and data solutions for
the U.S. automotive retail industry, today announced the results of a
study that quantifies the benefits to dealers of marketing used vehicles
that have had only one previous owner. The data underscores the value of
using DealerTrack’s inventory management solution, coupled with
integrated Carfax Vehicle History Reports, as a key step for dealers in
managing their inventories more proactively and evaluating potential
trade-ins.
The study revealed that average gross profit on the Carfax 1-Owner
vehicles was 23 percent more than the average gross profit on vehicles
that had two or more owners. In addition, Carfax 1-Owner vehicles sold
in 26 days on average, five fewer than the 31-day average turn for
multiple-owner vehicles. The study is based on actual used vehicle
transaction data from 2008 for a national dealer group that uses
DealerTrack’s inventory management solution. The data included 49,897
retail or lease transactions involving Carfax 1-Owner vehicles, and
122,970 transactions involving vehicles with two or more previous owners.
“This DealerTrack study proves the value of Carfax data for used car
dealers looking to make more money and sell cars faster,” said Larry
Gamache, communications director at Carfax. “Dealers can run a Carfax
Report at auction or trade-in to identify 1-Owner cars early and cherry
pick their inventory. In today’s economy, used car shoppers are looking
for great values like these.”
Dealers using DealerTrack’s inventory management solution have
integrated, “one-click” access to Carfax Vehicle History Reports. Carfax
reports are derived from more than six billion records in the Carfax
database and can include ownership history, vehicle use, service
records, mileage readings, title brands, and much more.
“While this study highlights the impact of a single vehicle attribute,
it strongly suggests that dealers can realize even greater benefits from
applying analytical tools to manage their inventory more
systematically,” said Tim Zierden, general manager, inventory at
DealerTrack. “Using a robust inventory management solution driven by
transaction-based data can help dealers stock the right vehicles, turn
them faster and focus on profitability.
