CAP launches Black Book Live - real time access to dynamic used car trade values

MAY 1 2012 – FOR IMMEDIATE RELEASE

CAP HAS LAUNCHED Black Book Live, the first fully researched independent used car valuation system to publish trade price changes as soon as they are identified.

Black Book Live solves the problem of uncertainty around changes in vehicle values between the publication dates of a ‘traditional’ monthly price guide.

CAP believes this will enable Black Book Live users to be more confident in their trading decisions on a day to day basis and remove the ‘wait and see’ caution that can emerge several days before publication of a monthly guide.

It will help car retailers and traders to improve profit per unit and enable fleet disposers to fine tune de-fleet activity to potentially maximise returns.

Black Book Live is researched by a team of expert editors, each specialising in their own vehicle sectors. This granular focus on the market will enable CAP’s editors to maintain the greatest possible accuracy. As soon as an editor is satisfied that sufficient evidence is available to justify a price alteration, the new value is published – together with a brief editorial commentary explaining the rationale behind the price change.

The monthly version of Black Book continues in all its current formats. However, accuracy and relevance will be enhanced for monthly Black Book customers due to a later production deadline. This has been enabled by new database systems and more efficient processes introduced to create Black Book Live.

CAP Chief Editor Chris Crow said: “We have introduced Black Book Live because today’s market demands the most accurate and timely valuation information possible. The elephant in the room for the traditional monthly guides is that they are inevitably out of date as soon as the market moves in either direction and Black Book Live solves that problem.

“Analysis of ‘real world’ trading conditions reveals that even where values change little on a month to month basis, the real time dynamic of the market can see variations in values of several percentage points at different stages in a given month. This can amount to several hundred pounds. Black Book Live offers genuine insight into those subtleties in a way which will enable dealers to improve their profit per unit and fleet disposers to maximise their returns.

“Real-time access to dynamic business-critical data is not a new experience for CAP customers. We have long recognised the importance of timeliness as well as accuracy, breadth and depth. That is why we moved several years ago to daily updates in New Vehicle Data. The principle is the same for pricing information.

“Nonetheless, it is necessary to also recognise that a fully independent monthly pricing benchmark will remain important to many operators across the automotive sector. The good news for those customers is that our launch of Black Book Live will enable a much later ‘snapshot’ of the market to be taken for the regular Black Book publication than our previous deadlining process allowed.”

Customers can register their interest in Black Book Live by visiting http://www.cap.co.uk/BBlive/

ends

Further details of Black Book Live are outlined in the following FAQ.

Black Book Live – media briefing

May 2012

In May 2012 CAP will launch ‘Black Book Live’, a real time used car trade valuation system. This briefing is designed to bring you up to date on the purpose of the Black Book Live and answer frequently asked questions on its implications for customers.

What is Black Book Live?

Black Book Live is a system for valuing trade vehicle in real time, launched by CAP in May 2012.

Does Black Book Live replace the monthly Black Book guide?

No, the monthly version of Black Book data will continue to be published in all its current formats.

How will valuations in Black Book Live differ from current CAP used car valuations?

Current CAP used car valuations are published on a monthly basis. Valuations in Black Book Live will change as soon as sufficient evidence is gathered to indicate that the market value of a vehicle has changed.

Will values change on a daily basis?

This is extremely unlikely. Valuations will only be adjusted when sufficient evidence is gathered from the marketplace to provide a sound basis for changing the published valuation for a vehicle.

Will published values be adjusted automatically by the Black Book Live system?

No. A team of editors will use their own market expertise to investigate pricing evidence for all model ranges, as they do at present. Only when an editor is satisfied that sufficient evidence is available to justify a price alteration will a published value be altered.

Why is that?

Much of CAP’s pricing evidence from the marketplace is formed of ‘raw transaction’ data received from auctions. CAP’s research policy is to use this as a basis for additional investigation rather than a basis for automatic adjustments. This is because a clearer understanding of the disposal circumstances is necessary, including vehicle condition and specification and volumes at individual sales, before adjusting a published price.

Will ‘CAP Clean’ be retained as a benchmark?

Yes. CAP Clean is a unique and vitally important independent benchmark for both parties in a transaction and will remain the industry standard for valuing vehicles that meet specific condition and other criteria. Valuation at CAP’s 3 condition points of Clean, Average and Below Average will continue.

If I use a product that is updated in real time from Black Book Live, how will I know why you have adjusted a vehicle’s value?

Every price adjustment will have an editorial comment attached, detailing the evidence and rationale for the change.

Who will be responsible for making price alteration decisions?

Black Book editors, who are specialists in specific vehicle sectors and manufacturers. Pricing alteration decisions will be made by the relevant market expert, overseen by the Chief Editor, who holds ultimate responsibility for the integrity of the database and the products derived from it.

How will the Black Book editors operate? Are they just databasers and analysts?

The job of a Black Book Editor is to investigate the marketplace on a daily basis. This is achieved by speaking to operators in the marketplace, including buyers and sellers, attending vehicle sales, investigating the condition of vehicles sold and thereby identifying trends in pricing. Black Book editors will therefore spend the bulk of their time observing marketplace activity, gathering opinion and evidence which can then be interpreted in light of the raw pricing information gathered by CAP. Pricing decisions will therefore be made (as they are at present) using the editorial team’s trade expertise, marketplace understanding and evidence interpretation skills. Black Book Live will enable this team to spend significantly more research time out in the marketplace than it can at present. This is because there will no longer be a need to remain office-based for one week in each month conducting the ‘pricing meeting’.

Will all values change over the course of a month?

Almost certainly, yes, on the basis of evidence gathered. Where sufficient volumes of data and strong anecdotal/interpretive evidence exists, values will be adjusted more often, where appropriate.

If you are valuing vehicles in real time, what values will be published in CAP’s monthly pricing products?

A snapshot of the Black Book Live system will be taken to establish prices for monthly valuation products.

Will this change the quality or accuracy of existing monthly valuation products?

Yes, existing product quality will improve. The monthly ‘snapshot’ will be taken later in the month than the previous editorial production process allowed. Therefore monthly published valuations will be more up to date when products are released. The integrity of all CAP valuations will therefore be enhanced.

You cannot possibly research every single model and derivative on a daily basis. How will you ensure all values are adjusted appropriately?

The Black Book Live system is designed to intelligently flag the requirement for further investigation when sufficient evidence arises from raw transaction data received. Where little volume has been transacted in the marketplace and therefore little, if any, evidence of change has been monitored, seasonal and sector level adjustments will be made where appropriate, exactly as they are at present.

Does this mean an end to the monthly Black Book in print, Windows format and other data packages?

No. Monthly used car valuation products and services will continue to be published with no change to frequency or the need for alterations to customer systems. Additional new products will be developed, in consultation with customers, to enable those who wish to benefit from real time valuations to take full advantage of Black Book Live. All existing data formats will also be retained, so there will be no impact on customer systems when we switch our internal system to Black Book Live.

I like the idea of real time valuations, but won’t they distort the market by – for example – making people reluctant to commit to sale/purchase in a moving market, anticipating very quick changes in values?

We believe Black Book Live encourages a more responsible approach to transacting, which may actually smooth out the spikes and dips which are inevitably caused by the use of a monthly pricing system. For example, it will remove any incentive to ‘wait and see what the new book’ will show which currently exists toward the end of a month. It is important to understand that because Black Book Live is not an automated system, but personally managed by editorial market experts, the sudden appearance of unusual data will not lead to ‘knee jerk’ changes in published values. CAP believes the transition to real time pricing reduces potential influence on the market from an independent provider of data and insight and strengthens the integrity and accuracy of CAP’s pricing products.

Is Black Book Live just for cars?

Initially, yes. Research is still on-going into the feasibility of a version for commercial vehicles.

Will Black Book Live affect Monitor forecast values?

No. Monitor forecast values will continue to be published only on a monthly basis.

For further information contact Mike Hind, Communications Manager, CAP – a 4C Service on 0113 222 2044 / 07710 152030

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Used car pricing and technical information from CAP has been trusted by motor trade professionals for more than 30 years. The company provides trusted and accurate pricing and technical information on cars, vans, motorcycles and trucks to the UK automotive industry every day. As well as helping dealers, fleet operators, insurers, vehicle manufacturers and finance providers, CAP information also operates at the heart of many leading vehicle marketing websites and car sales portals, including Britain’s largest – AutoTrader – helping consumers safely make the best informed decisions about their purchase choices.

CAP – a 4C Service, Capitol House, Bond Court, Leeds LS1 5EZ
Telephone: 0113 222 2000 Facsimile: 0113 222 2001 www.cap.co.uk

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