8:57 am, September 11, 2022
The results of the recent Car Dealer Magazine investigation into dealer sentiment about Auto Trader should really come as no surprise given the binary nature of the world today.
It seemed that opinion was well and truly split between the for and against.
Speaking personally, I wrote a vitriolic piece about Auto Trader more than a decade ago in which I highlighted that the platform was nothing more than a conduit between dealer and customer and that any would-be tech disruptor could challenge its pricing model.
I also wrote a more recent article in which I said Cazoo founder Alex Chesterman would have been better served targeting Auto Trader instead of retail car sales.
I understand why so many independent and franchise dealers alike view the company with so much contempt, but what has become clear to me (and many others, no doubt) is that Auto Trader is no longer an advertising medium to attract customers; it is a data analytics company that has a much greater impact on used car sales than many think.
By profiling cars using the desirability rating and giving customers tangible pricing information as to the competitiveness of each car, Auto Trader has been driving many advocates of the product to solely use the tools provided in the dealer portal suite to target certain models.
Auto Trader has been at this for a long time and I for one was slow to see the benefits of the old i-control system, which predated the current technology, but I speak to many dealers who claim the software has revolutionised their business.
However, in the spirit of someone who still appreciates nuance in arguments and can accept that both sides can be right, I would urge caution to those staunch supporters of Auto Trader that sole reliance on cars with large margins or high performance scores is fraught with danger.
Many traditional brick-based retailers, independent or franchised, shouldn’t dismiss the benefit of their capital-intensive retail environments.
In my work with dealers over the years, you see many consumers search for a used car online and then look for locality as a number one criteria.
A used car purchase is still a highly emotive purchase, and while Cazoo and Cinch will say they sell thousands of cars, one can only imagine that with a robust stock selection, customer-focused sales process and high preparation standards, many of these buyers would have stayed local.
Then there is the competition for these high-margin, high-performance cars, particularly for those dealers with more captive purchase environments such as independents buying from BCA using its Partner Finance or franchised dealers supporting manufacturer used car initiatives.
As an example, grocery retailers (an equally competitive market) find different retained margins in a huge variety of products and car dealers need to consider a balance and profile to stock.
Used car retailing from 2022 and beyond needs a blended focus on stock acquisition, preparation standard, video and image quality, and sales process.
It is possible to be a successful business with or without Auto Trader, but if a hard look in the mirror reveals flaws in any of the above, at least Auto Trader can help cut some corners.
This column appears in the current edition of Car Dealer – issue 174 – along with news, reviews, features and much more. Click here to read and download it for free!
