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Are the winds of change finally beginning to blow for Auto Trader?

Automotive retail consultant James Litton thinks his prediction about the online marketplace is finally coming to pass – it’s just taken a bit longer than expected…

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As a young teen with a father in the motor trade, I used to love getting the Auto Trader magazine and circling the cars that I wanted. XR3i, Mk2 Golf GTi, 205 GTi – no hot hatch went without a biro mark.

I’d even highlight the odd XJ6 or Sovereign when I wanted to dream of executive motoring.

Private ads were plentiful and dealers would buy whole blocks of pages, with the centre pages reserved only for the most exotic of retailers.

For decades, Auto Trader was the destination for selling your car privately. As the internet gradually replaced the printed magazine, there were very few competitors for the private punters’ advertising pound.

Auto Trader also held a monopolistic position in the motor trade space – so much so that I wrote a scathing Car Dealer article almost a decade ago decrying its abuse of its monopoly and predicting its downfall once a competitor challenged its dominance.

Luckily, I didn’t commit to a timescale for its demise, and for the past 10 years Auto Trader has been the dominant force in used car advertising.

However, there are signs that my prophecy may finally be coming to pass.

When I first started buying cars from private sellers at the end of 2019, Auto Trader had more than 40,000 privately owned cars listed on its Dealer Auction software. At the time of writing, that number has dwindled to just 29,500.

So, what is behind this significant drop in revenue?

No negative business performance evaluation would be complete without a hand from the Covid card.

It is true that Covid and the knock-on effect in used car supply has meant a shrinkage of the overall market, and it is only natural that Auto Trader would suffer as a result.

However, it is my contention that the evolution of online retailers and buyers has dramatically affected the attitude of private sellers, particularly in a post-pandemic bull market.

There is also fierce competition from free or very low-cost sites such as Marketplace that appeal to cost-conscious advertisers.

When I asked my teacher wife if she would use Auto Trader to sell a car, she replied: ‘God no, it is a masculine thing. I wouldn’t look there or sell there.’

My wife feels comfortable selling things on Marketplace, and this is not exclusive to children’s toys or our broken white goods, and she is not alone.

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Barely a day goes by without being bombarded by Phillip Schofield urging me to sell cars to webuyanycar, a Motorway ad telling me that it will get me £1,000 more for my car than anyone else, or Cazoo polluting the airwaves with its ear-splitting jingle.

This onslaught of marketing is having an effect, and I am not sure that many private sellers will come back to Auto Trader unless it changes its pricing model.

This column appears in issue 164 of Car Dealer which you can read and download for free here – it’s full of news, views, reviews, interviews and more!

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