In my last article; A Public Service Announcement For The Owners Of High Performance And Specialist Cars!
I explored the folly of trying to sell a specialist high performance car on Autotrader; or any other retailing portal for that matter. It is fair to say that it generated quite a lot of comment and debate, so much so that I was asked to explore and expand upon the subject in greater detail.
So in this article I will strip bare the process involved and explain why I think the very last thing portals like Autotrader are bothered about is actually the sale of your car; if they were the business would operate very differently. But before launching into the article itself let me add some context; I have never worked for any of the companies that I will reference, (in the main Autotrader - because I think they are the worst culprit), and I respect that it is everyone’s right to try and dispose of their car in the way they see most fit.
The purpose of this article is to expose the flaws, the misrepresentations and to encourage some forethought in the owners of specialist high performance cars; so off we go!
As explored in the article above, (not to be revisited here – please follow the link above to find the article on my Used Car Business Development Blog), the process of trying to sell any expensive car via Autotrader (or PistonHeads for that matter) is highly flawed. Now I know that there will be some reading this article who have managed it, but I want to look specifically at premium, specialist and high performance market, and those owners with a car to sell within these markets.
So aside from the market dynamics let’s look at the process involved in selling a car on Autotrader and let’s get one thing straight; in my opinion Autotrader aren’t bothered whether you sell your car or not! Now most of you may struggle with this concept until that is, you realise that Autotrader is a data collection company first, not a sales portal. Collecting information and data that you supply and that Autotrader charges you for.
So if my suspicions are correct those who advertise on the portal are paying to grow the business, by supplying what it most covets; data and personal information. But for the moment let’s look at the process of selling your car via Autotrader, and this is how it works. Go onto the Autotrader website and will find that it will cost £84:95 to advertise your car as a private seller on Autotrader; if the selling price is over £10,000, as all will be in these markets.
Although there are cheaper time specific sales options available, this is their most cost effective package because it continues to advertise your car until it is sold. Now to put in to context just how much money Autotrader is making from market naïve private sellers; on the day of writing this article (30th March) there were 3,259 BMW’s being sold by private sellers, priced at over £10,000. That’s (3,259 X £84:95) £276,852 in revenue; provided of course they all paid for “The Advertise Until Sold” option.
From this page you are then invited to enter the details of the car you have for sale, registration number and mileage. Now in order to offer a representative commentary I didn’t opt for a highly specialised, expensive high performance car; this would be both unfair to Autotrader and not representative of most potential customers. So with this in mind I entered the details of a Mercedes Benz.
Once you have supplied this information Autotrader will advise you on what price to advertise the car for! Now this is an important point and one that I must ask all reading this to sink in. This is Autotrader and their data algorithm telling people what to advertise a car for; they then go on to confirm just how much more their recommended sale price is, when compared to what I would be offered in part exchange or from, and I quote, a “Quick Sale Website!”
It is important to appreciate at this point that Autotrader is not a used car retailer and/or business; nor is it a business that employs, (from what I can see on their company page on LinkedIn), any senior professionals with any experience of growing successful used car businesses. So I have to ask the obvious question; how do they think they can advise on market values? And to add context, let’s explore the market for the car I put through their algorithm on 30th March; a 2019 Mercedes Benz A180d SE, with under 11,000 miles.
Autotrader advised that the retail price for the car was £19,440 and went on to confirm that this figure was “At least £1,530 more than I would be offered in part exchange or from a quick sale website.” Quite frankly this is utter crap and misleading! Autotrader have no idea what I would be offered in part exchange; a figure determined by many things. The car I am purchasing, the underwrite obtained, the margin across the car I am looking to purchase and the commercial pressure the selling dealer is under to sell. All of which Autotrader has no idea of!
Now one area where they were right, although they have no access to the offers made by quick sale websites, was that their recommended retail price was at least £1,530 more than the £16,770 offered on the same day by We Buy Any Car; a quick sale website. But the difference between the two prices of £2,670 is worrying because average margins like this are unrealistic on stock of this profile.
Now although I have my criticisms of We Buy Any Car, unlike Autotrader they do deliver on what’s written on the tin; they do purchase cars; Autotrader do not! Ergo one of the prices must be wrong; I would hasten to add that it is not the one offered by We Buy Any Car. So I decided that, should I decide to follow the questionable advice from Autotrader, how would my car fit into the market? Well the answer wasn’t very promising.
On the day that Autotrader advised me to advertise my car for £19,440 you could purchase an identical car from a Mercedes Benz approved retailer for only £548 more; £19,998. Now I am sorry but the idea that a customer would come to my driveway with no legal protection, to purchase the same car to save only £538, (when compared to the same car supplied by a Mercedes Benz franchised dealer), is laughable.
Even more so when you consider that there appears to be an oversupply problem for this model at the moment. When looking at Autotrader itself and on the Mercedes Benz Approved Used Car Locator, there were an additional 186 and 67 similar age and mileage examples to choose from. That is a lot of competition and a very challenging retail market to be entering as a private seller with no experience.
Then we come to another problem; any potential customers searching on Autotrader will be (very helpfully) guided on the price that the car is advertised for. Now rather duplicitously Autotrader will make an ill-judged and ill-informed comment on the prices being asked for by trade retailers, in terms of their pricing. It wouldn’t (so doesn’t) do this on the private seller adverts but by default does so, because all the comparable cars can be listed in with all the trade adverts; priced lowest to highest.
Now I have a got a lot to say about this (probably for another article) but in the interests of brevity let me explain what I think is happening here. Autotrader, (the data collation company masquerading as an advertising portal), is using data from its own site (data from customers who have paid for the privilege), to then masquerade as a pricing portal; all whilst having no senior and/or genuinely successful used car professionals to call upon. It then uses this data to incorrectly value your car and take your money!
From there, and having taken your money, it then comments on the prices of all the competition your car is up against, (from adverts in the trade), because it wants to be seen as the consumers friend. In my opinion you can’t be both the consumers and the sellers friend, there is a conflict of interest; a circle that is impossible to square.
But your money is the lifeblood of Autotrader, so this conflict of interest isn’t mentioned. I think those about to spend their money to advertise their car should be warned about this feature; the reason why they are not is because you probably wouldn’t want to advertise your car, if you knew the realities.
Then we move on to contact details and how Autotrader refuses to put you in direct contact with anyone expressing an interest in your car, via hiding both of your contact details. Now this really gets my back up and I know exactly what is happening here; Autotrader never wants you to have the direct contact details of interested parties. Despite paying to advertise your car?
Now Autotrader will tell you that this is for your own protection; just think about that for a moment. Autotrader are trying to protect you from what? And if they know you need protection from something, why are they taking your money to put you in that position? In truth these are not my questions to answer, they are for the CEO of Autotrader (Nathan Coe) to answer.
I suspect that the real reason for this is to keep you spending money, if you haven’t already paid for their “The Advertise Until Sold” option. The last thing they want is for either party to be able to contact each other once an advert has run its course. This quite frankly is outrageous; they take your money then make it very difficult/impossible to get in direct contact with interested parties.
It would be reasonable to think that with the levels of income outlined above, it would be in Autotrader’s best interest for you to sell your car; and if it is, my question to Autotrader is why they then make the process, (one that they know is flawed for all the reasons explored in last week’s article), so onerous, misinformed, difficult and clandestine?
In reality though these are not my questions to answer, just issues to comment on. I will leave all this commentary with potential customers to assess the value in what they are getting for their £84.95. If I am wrong on these points I willingly invite the CEO of Autotrader (Nathan Coe) to contact me directly; when I will gladly review their data sources with him and publish an article to put the record straight; should that be required?
But in the meantime, where to turn for the owners of specialist high performance cars looking for the right expertise and experience, that required to facilitate in the immediate liquidation of their car; a process requiring skill, expertise, the utmost discretion and excellence in execution.
Well with unrivalled experience in liquidating specialist cars and the contacts base within the trading community, (both franchised dealers and the most knowledgeable independent specialists), you could contact me for a market consultation. However I am not going to promise you for one moment that I work with every car that is offered, or with every owner that contacts me.
In truth I choose to advise and help everyone but only work actively with 10% of the owners who contact me; and their associated cars. Offering immediate cash purchase, (should circumstances dictate), or the facility to act as your trusted facilitator and conduit to the market, delivering the best return for your specialist high performance car; I am the ultimate solution provider for those looking to dispose of their vehicle.
Please feel free to reach out to me directly via LinkedIn should you wish to arrange a consultation call.
Andrew.
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