Auto Trader has launched its Guaranteed Part-Exchange service giving used car buyers an agreed price and dealers a cost efficient supply of stock.
The firm has now rolled out the service to all of its partners following a successful beta trial involving around 1,000 dealers.
Auto Trader says the launch is part of its strategy ‘to enable retailers to sell more cars, more profitability, with more of the buying journey completed online’.
Dealers using the service will have access to ‘better qualified buyers with higher purchasing intent’, according to Auto Trader.
Consumers will receive a guaranteed part-exchange price for their vehicle – all online and without having to leave their home.
The condition-based valuation will be underwritten by Manheim Auction Services acting as an insurance policy for unwanted part-exchanges. The valuation is determined using a combination of Auto Trader’s valuations and current auction data.
The launch comes off the back of research carried out by Auto Trader which highlighted how common missed opportunities from part-exchanges are, often as a result of a mistrust in the process.
Auto Trader’s Car Buyers Tracker showed around 70 per cent of buyers have a car to part-exchange as part of their next car purchase, however, 16 per cent said having to haggle over the price with a dealer is the most annoying point.
The firm also found 48 per cent of on-site users believe retailers will offer them less for their car than the valuation they’ve received online.
Another on-site survey of 1,334 consumers revealed 29 per cent of car buyers were prepared to walk away from a deal if they were offered less than what they were expecting.
Auto Trader said the new service will help dealers source stock more cost-effectively, by resupplying their forecourts with a continuous flow of part-exchanges.
In the recent beta test, retailers went on to advertise stock acquired through the tool with an average profit margin of over £2,000 per unit, according to Auto Trader.
If the vehicle doesn’t fit their stock profile or if the deal represents a risk the retailer isn’t willing to take, they can simply dispose of it through the Manheim underwritten disposal service.
The car will be paid for and collected from a retailer’s forecourt within five days of the disposal being accepted by Manheim.
Auto Trader’s commercial product director, Karolina Edwards-Smajda, said: ‘The part-exchange process represents a common pain-point for both retailers and consumers, which often results in wasted time and energy, as well as missed sales opportunities.
‘Our objective was to create a more efficient solution which significantly improves the consumer user experience, and in doing so, helps retailers sell more vehicles, more profitability. In effect, we wanted to convert what is for many retailers a challenging process into a sales-channel within its own right.’
Auto Trader’s research also revealed that for those retailers operating buy online services, such as click-and-collect, and home delivery, 54 per cent said agreeing a part-exchange was the most difficult task.
Edwards-Smajda added: ‘The service marks an important step in our commitment to support retailers with their digital retailing ambitions and complements the blended retailing experience many consumers have come to expect.
‘Throughout testing, we saw that retailers got the most value when they fully embedded the tool into their entire part-exchange process, using it with all enquiry types, whether the customer was online, on the forecourt, local or buying from a distance.’
Auto Trader says whilst the service will be included in participating retailers’ adverts for consumers to engage with, the valuation appraisal software is also built into Portal accounts, enabling retailers to use it with any enquiry type, whenever a deal includes a part-exchange.
All dealers can sign up now and get their first 60 days free.