Used Car Success Can Be As Predictable As the Weather
  • Cullen Crane

Used Car Success Can Be As Predictable As the Weather

Working from home in Atlanta for a company based in Phoenix means two things, number one, I essentially only wear workout gear and number two, I have to travel quite a bit. When I do travel, as I did a few weeks ago for Used Car Week, I typically wait until the last minute to pack, like the night before I leave. I, like most of you, when going to a different city check the weather forecast so that I can plan my wardrobe accordingly. Can you imagine a world where the weather was so uncertain that you had to pack for every possible outcome? Hold that thought.


This may come as a shock to some of you but I am not an anthropologist, I know, take a minute to gather yourself, I’ll wait….


I am fascinated by who we were in the very distant past and how that sometimes, even subtly, impacts us today. How we make decisions in the face of uncertainty is one of those areas. Simply put, we suck at it. When we are given too little information and asked to make a critical decision we make increasingly irrational decisions, we become extremely risk averse. In a time when you were coming out of a cave and you heard a rustling in the bushes this makes total sense, just run back inside and ask questions later. But today, when you are attempting to make a business decision with imprecise information, jumping under your desk and hiding may raise a few eyebrows.


So where are you going with this, Cullen? Great question. I’m saying this, if you built a software company in the automotive space and you were not confident about your ability to provide a precise recommendation for the next vehicle each user would appraise, you would probably build a tool that allowed them to survey the entire used car universe.

If you couldn’t provide explicit guidance on exactly how to reprice a unit you would give users a “live” look at all others in an area and allow them to decide if that is a true representation of their competition.


If you didn’t have the knowledge of what exact vehicle to purchase at auction next you would give broad, segmented and price point suggestions.


And if you couldn’t predict the right moment and place to liquidate a vehicle that has reached a point of wholesale disposal then you may not provide any advice at all. This is packing for every weather outcome. This is decision making in the face of extreme uncertainty. This is silly.


Ten day weather forecasts today are 80% more accurate than 3 day forecasts were only 20 years ago. Through the use of ground radar, weather balloons, aircraft, satellites and ocean buoys three-dimensional observations are generated that power the current machine learning models. Research has shown that with increased and more accurate data the prediction capabilities are not near the mathematical limits.

With advancements in data collection, normalization, combined with proper modeling we can now provide dealers the same predictive capabilities. It’s time to be precise, time to be certain. Contact me or someone at Drivably today to learn how.

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