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New Auto Trader platform to offer direct-to-trade sales

Date: 25 July 2018   |   Author: Jack Carfrae

A bold new initiative from Auto Trader could allow leasing companies to sell their vehicles directly to dealers via auction-style sales. Jack Carfrae examines what we know so far via his secret source.

Auto Trader is said to have developed an online defleet platform that allows leasing companies to sell used vehicles directly to dealers.  

The system is believed to offer an auction-style facility, whereby contract hire companies could arrange bespoke defleet events or merge vehicles with those sold by other leasing companies, both of which would be open to trade buyers.  

A senior manager at a contract hire company who has been approached by Auto Trader to adopt the initiative explained it to granitekitchen: "You could have a leasing company sale - like a fleet-direct sale - and it would work like eBay, so it would be a mini auction within Auto Trader. "The idea is that leasing companies put it on there - the vehicle could be anywhere - and it goes straight to their buyer base, who buy it direct. 

"They've never, ever done it before. You can have your own online platform, your own sale, or you could add it in with somebody else's. You could have it like a physical auction where it's your brand, your company, and then somebody else's before you and after you. There are a couple of different ideas behind it and I saw it in its very early stages." 

In addition to the sales facility, the platform is also said to offer dealers the ability to replace recently-sold used vehicles with near-identical stock sourced from leasing companies. It is believed  the service would bolt on to existing accounts and offer traders the opportunity to purchase second-hand vehicles when they update their stock lists by presenting them with links to available models of similar ages, specifications and mileages, among other elements. The company has been canvassing potential customers and is said to be selling the service to leasing clients on the strength of its buyer base. 

Our source explained further: "Let's say the main dealers, for instance, go on there every morning and price-check or change their stock. What they don't do is buy many things at that level, because the Auto Trader [platform] is not really for main dealer direct cars, they're normally bought at the auctions. 

"What Auto Trader is trying to do is say, 'we've got all the branch managers logging in every morning saying a car is now sold, take it off stock,' and then the system will ping them a replacement vehicle. Saying something like, 'you know that white Focus at 17,000 miles, here's another one similar and available. Push the button to select it.'"

The service to which our source was granted early access was said to be in beta form and did not have a fully operational payment system. It is believed the finished platform will include a function where users can buy and sell vehicles via online transactions, although the payment system, in its initial form, was said to be an issue. "What they wanted us to do was chase the buyer for the funds," they continued. "That was where it fell down for me. We'd sell one of our vehicles and then Auto Trader would say 'To get your £8,750 - or whatever you've sold it for - you need to speak to Joe Bloggs, because that's who we've sold it to.'" 

Our source added that the potential to market vehicles to a larger number of trade buyers was valuable, but expressed concern  the service was targeting only high-quality, low-mileage used cars. 

"Due to their buyer base, it really intrigued me," they said. "If you go to an auction, there might be 40 or 50 people milling about, but there might be 55 to 100 online. On the low-mileage stuff, I can see how it would work, but due to our profile - older vehicles, genuine contract hire - we're not talking about 8,000-mile ex-demos. We will have them, but a lot of it is higher mileage. I went to a sale yesterday and our average mileage was 70,000." 

When granitekitchen asked an Auto Trader spokesperson to comment, they would not disclose any details, but said the company was due to make an imminent announcement. 

We'll endeavour to bring you more news on this as we discover it.



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