Online buying and selling has been a part of the UK motor trade in new and used cars for many years now, offering an alternative to buying trade magazines or visiting car dealer after car dealer. With the launch of CarGurus, those in the market for a used vehicle have another option available to find and compare used car prices.
CarGurus launched in 2007 in the United States. The US website receives 15.5 million visitors every month, and CEO Langley Steinert
is confident that he can repeat the success of the brand in the UK. This will mean coming up against Autotrader, currently the dominant online car sales website. Steinert plans to place CarGurus in the number one spot by providing a good service, rather than through advertising.
There is a precedent. Steinert is also the founder of TripAdvisor, which has risen to become the internet’s most visited travel site thanks to its system of allowing customers to rate and review destinations, tourist attractions, hotels, and other services. Similarly, CarGurus encourages users to review dealers, who will then be ranked according to their rating.
Buyers can see at a glance not only which dealers are offering the best prices, but which provide the best customer service. The length of time an ad has been on the site, and any changes to the asking price, are prominently displayed, promoting dealer transparency and allowing buyers to judge how likely an offer is to be accepted.
The website also uses algorithms to work out the Instant Market Value of a particular make and model by comparing prices, features, and mileages, allowing customers to spot the best deals.
The appeal to customers is obvious, but will the dealers come on board? Steinert’s plan is to build the consumer audience first, making the site a more attractive prospect for sellers as it grows. Currently, dealers are being enticed to sign up with an offer of free stock listings. Removing the expense of advertising leaves dealers with more money to spare for motor trade insurance, trade plates, and other necessary costs.
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For dealers, the site offers the opportunity to reach a much wider range of customers, since buyers are often prepared to travel in order to secure a good deal on their dream car. And because the system rewards not only the sellers whose prices are lowest, but those who are best at customer service, smaller dealers who can’t offer a large discount can still afford to get noticed.