Auto Trader is to bring in a guaranteed part-exchange function as it looks to help dealers through the challenges of coronavirus.
The online marketplace said GPX – which is poised to fully launch early in 2021 – would tackle supply problems and boost buyer confidence
The aim is to provide retailers with better qualified buyers and a more profitable way of finding stock at the same time as offering people a guaranteed part-exchange price for their vehicle.
The price will be underwritten by Manheim Auction Services, which is part of Cox Automotive UK.
It not only means that retailers will be able to keep their forecourts supplied with a continuous flow of part-exchanges, said Auto Trader, but valuable sales opportunities will be created, attracting highly qualified buyers.
Auto Trader added that an on-site survey of 1,320 consumers in September showed that nearly three-quarters (73 per cent) said they’d be more likely to visit a dealership if they had a guaranteed part-exchange agreed in advance.
It also revealed that nearly one in three deals (29 per cent) broke down over part-exchange negotiations, which meant lost sales as well as lost time and effort.
GPX is undergoing beta testing with some 100 retailer partners at the moment, which will increase significantly during the trialphase.
Auto Trader said it was an important step in improving the digital car-buying experience – something that was becoming increasingly important.
Karolina Edwards-Smajda, pictured, Auto Trader’s commercial product director, said: ‘Our aim is to create opportunities for dealers to sell more vehicles and to support them to operate as efficiently as possible.
‘Guaranteed part-exchange also improves the online car-buying journey for consumers, the need for which has been accelerated dramatically as a result of the pandemic.
‘Sourcing stock effectively remains a real challenge for many dealers.
‘They’re either having to overpay through constrained traditional channels, competing for shrinking stock, or worse, missing out on potential sales opportunities driven by the exceptional demand in the market.
‘We wanted to create a solution that not only makes the process more efficient, but also keeps the stock among dealers and helps boost their profitability.’
The customer answers questions about their car’s condition fora guaranteed part-exchange price calculated via Auto Trader’s award-winning valuations – Auto Trader was named Used Car Valuations Provider of the Year at the Car Dealer Power Awards for 2020 and 2019 – plus Manheim’s algorithms.
It will reflect condition and current trade price fluctuations, and once they’ve sent their details to the retailer they can take the deal further, subject to an accurate vehicle description.
As the price is underwritten, there is a limited risk to retailers, says Auto Trader.
If the vehicle doesn’t fit their stock profile or if the deal becomes a risk the retailer doesn’t want to take, they can get rid of it via Manheim’s underwritten disposal service.
The car is then paid for and collected from the retailer’s forecourt within five days.