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Photo by Obi Onyeador on Unsplash 

Eric Burney, CEO of Automatic USA, is fond of saying the used car industry stopped evolving around 2001.

That’s why he and his colleagues launched the company’s software platform allowing potential dealerships to find all the data they need to secure vehicle financing for their customers in a matter of minutes — versus the usual several hours historically needed.

But, a number of more recent macro trends are making the rollout of the platform even more necessary, the company said.

COVID – Challenge Turns to Opportunity?

COVID has also helped lead to supply issues which has helped push used car prices higher, so there is more upside for Automatic now. With restrictions also lifted in the states the company currently operates in, there is now a growing need to hire more agents to expand the dealership network.

To say car prices are higher is an understatement. Automatic even says used cars are actually in some cases increasing in value, describing the situation in August as “one of the most aggressive used car markets in history.” 

The pandemic is behind some of the price hike issues because it has had significant effects on the supply chain as well as on inflation. With the government reacting to the pandemic by printing money, inflation is also rising. And there is pent-up demand for cars generally after so many months of restrictions, both new and used.

“This increase in new car prices because of inflation, increased demand, and limited supply passes down to used cars,” the company said. “This presents a good opportunity in the industry for companies that can use these increasing prices to their advantage, like Automatic.”

Weather Plays Part, Too

Even the weather has played its part this summer. While a constant threat to inventory levels, the summer storm season is casting a bigger than average pall over the used car industry this year given the extreme nature of a generally low used car supply and the higher vehicle prices.

While in some cases used car prices were perhaps beginning to flatten out, overhanging weather threats could put a wrench in that.

“Just as used car pricing had begun to level out, the storm surges of late (and those expected to come) exacerbate market conditions,” the company said in late September. To make things easier for everyone, on September 27th, Automatic 2.0 launched - re-engaging all 940 dealerships on the platform. Everything from pre-qualification to funds being released just got that much quicker.

As of September 29, the WeFunder program set up to boost growth in Automatic USA’s platform had raised $1.3 million.