Managing a used car inventory is a complex process, and while data analytics is a powerful tool, relying solely on it may lead to missed opportunities and pitfalls.

I must state, I’m a big fan of data. vAuto and some of the other great tools out there.. In my opinion vAuot is the gold standard of automobile data.

And, I own my own software product called UpYourGross. One of my favorite workshops to teach over the years is “When Common Sense Meets Technology.”

Dealerships should also draw upon their experience, wisdom, knowledge, and common sense to make better decisions. Here are 8 reasons why:

1. Data Can’t Predict Local Market Nuances

While data can show trends in broader markets, it often fails to capture the unique nuances of local markets. Management knows their customer base better than any algorithm. They understand which cars sell quickly in their region, the types of vehicles their clientele prefer, and which models are in high demand at different times of the year.

2. Historical Data Can’t Always Predict Shifting Trends

Used car markets are dynamic and can shift suddenly due to external factors like fuel prices, economic changes, or government regulations. Relying on past data alone might cause dealerships to miss emerging trends.

3. Human Intuition Can Fill Gaps in Data

While data can be comprehensive, it doesn’t always tell the whole story. For example, it might indicate that a specific model is a slow seller nationwide, but a dealership’s intuition and historical knowledge might suggest the opposite due to local preferences or promotions.

4. Experience with Vehicle Condition and Maintenance Costs

Not all used cars are the same, even within the same make and model. A car’s condition, maintenance history, and current mechanical state can significantly affect its resale value. Let me say this a different way; the used car you are looking at is an absolute “one of a kind.” There’s not another one like it in the entire world. Your eyes are on it and you know what you’re dealing with.

 5. Pricing Sensitivity May Vary Across Markets

Data-driven tools may set price recommendations based on averages, but those averages may not apply everywhere. Local economic conditions, competitor pricing, and even customer buying habits can influence what price a dealership can set for a used car. That said, price sells cars.

There’s an old saying about a car bought “right” is half sold. That’s sorta true, but never forget every used car has a price that it will sell for. When you have a car that you can’t sell, often it’s because you haven’t price it “right enough,” to make it go away.

6. Personal Networks and Relationships Matter

Dealership managers often have extensive personal networks and relationships with wholesalers, auction houses, and even other dealerships. These connections can lead to valuable insights and opportunities that are invisible to a purely data-driven approach. There’s lots of knowledge out there. Be smart enough to know what’s good knowledge and what’s not.

7. Gut Instincts Can Lead to Bold, Profitable Moves

There are moments when gut instincts, honed by years of experience, lead to bold decisions that data would never suggest. These instincts are based on accumulated wisdom, market feel, and an understanding of human nature. I once worked with a GM who seemed to have a horseshoe up his butt when it came to guessing the market. He would put on a big used car sale in the middle of a snowstorm and knock it out of the park.

8. Common Sense Helps Avoid Over-reliance on Trends

Data may highlight trends that appear promising but might be short-lived or irrelevant to a specific dealership. Common sense, grounded in real-world experience, can help avoid chasing trends that won’t deliver long-term benefits.

I’ve already mentioned the importance of common sense. Never sell yourself short, but don’t think that you’re so smart that the data doesn’t matter. That’s all I’m gonna say, Tommy Gibbs