Auto Trader has launched its Guaranteed Part-Exchange service following a successful beta trial to circa 1,000 retailers. This launch is part of its strategy to enable retailers to sell more cars, more profitability, with more of the buying journey completed online.
Now available to all its partners, the service provides retailers with better qualified buyers with high purchase intent and a more profitable route to sourcing stock. It provides consumers the confidence of a guaranteed part-exchange price for their vehicle and the convenience of completing the process from home. The condition-based valuation will be underwritten by Manheim Auction Services, part of Cox Automotive UK, acting as an insurance policy for unwanted part-exchanges. The valuation is determined using a combination of Auto Trader’s award-winning[i] valuations and current auction data.
Utilising trust and convenience to convert buyers faster
Auto Trader research highlights just how common missed opportunities from part-exchanges are, often as a result of a mistrust in the process. Circa 70% of buyers have a car to part-exchange as part of their next car purchase, however, 16%[ii] said having to haggle over the price with a dealer is the most annoying point. And with 48%[iii] believing retailers will offer them less for their car than the valuation they’ve received online, it’s no surprise 29%[iv] of car buyers were prepared to walk away from a deal if they were offered less than what they were expecting.
This service utilises the strength and trust in the Auto Trader brand, which in a study of over 1,000[v] car buyers was identified as the most trusted website for valuations. The service can help retailers reduce lost sales, save time, and speed up cash flow by attracting highly qualified buyers who are ready to purchase. In fact, nearly two out of three (61%) [vi] consumers are more likely to purchase from retailers who can guarantee the part-exchange price.
The service also helps retailers source stock more cost-effectively, by resupplying their forecourts with a continuous flow of part-exchanges, which in doing so, not only reduces a reliance on potentially costly auctions, but also keeps stock among retailers. 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.
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% said agreeing a part-exchange was the most difficult task.
Karolina 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.”
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 of Auto Trader’s car retailer partners can now sign up to get their first 60 days of Guaranteed Part-Exchange free here.
[i] Used Car Valuations Provider of the Year, Car Dealer Power Awards 2020 and 2019
[ii] Auto Trader Car Buyers Tracker August 2020
[iii] Auto Trader On-site survey, 1st – 14th September 2020
[iv] Auto Trader on-site survey of 1,334 consumers, September 2020
[v] Auto Trader Car Buyers Tracker, August 2020
[vi] Auto Trader on-site survey of 983 consumers, September 2020