As part of its ongoing commitment to digitise the car buying journey, and to help retailers navigate the challenges of COVID-19, Auto Trader is introducing a Guaranteed Part-Exchange (GPX) function on its marketplace.
Set to launch fully in early 2021, GPX is designed to provide retailers with better qualified buyers and a more profitable route to sourcing stock, whilst offering consumers a guaranteed part-exchange price for their current vehicle. The price will be underwritten by Manheim Auction Services, a part of Cox Automotive UK, using a combination of Auto Trader’s award winning valuations and current auction data.
Better qualified buyers who are ready to convert
As well as helping retailers resupply their forecourts with a continuous flow of part-exchanges, GPX will create valuable sales opportunities, attracting highly qualified buyers who are ready to purchase. As highlighted in a recent survey of 1,320 consumers on Auto Trader’s marketplace, nearly three quarters (73%) said they would be more likely to visit a dealership if they had a guaranteed part-exchange agreed in advance. What’s more, the same research revealed almost 1 in 3 (29%) deals break down over part-exchange negotiations, not only resulting in lost sales, but also in lost time and effort.
To help refine the product prior to launch in early 2021, GPX is currently undergoing important beta testing with circa 100 retailer partners but will increase significantly throughout the testing phase.
A low risk and more profitable route to sourcing stock
GPX marks an important step to improve the digital car buying experience, which is becoming ever more important in the current climate as consumers look to complete more of the journey online. The product will initially be accessible via a retailers’ advert but will expand across the Auto Trader platform.
Once the consumer has answered a series of questions to determine the condition of their car, they’ll be provided with a guaranteed part-exchange price, which is calculated using Auto Trader’s award-winning valuations, as well as Manheim’s own industry-leading algorithms to reflect condition and current trade price fluctuations. In a separate study of over 1,000 car buyers, because of the strength of its brand, Auto Trader was identified as the most trusted website for valuations, and by some margin.
Once the consumer has their guaranteed price, they can send their details to the retailer and progress the deal, subject to the car being accurately described. Importantly, because the guaranteed price is underwritten, it provides limited risk to retailers. 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.
Commenting on GPX, Karolina Edwards-Smajda, 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 through providing insights and guidance and developing innovative product solutions such as Guaranteed Part-Exchange. 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.”
Retailers can request to join the GPX early adopters list by contacting their Auto Trader account manager or by completing this short form.