Carwow has defended changes to its dealer auctions after removing customer reserve prices and retiring its Buy It Now feature.
John Veichmanis, chief executive of Carwow, told Automotive Management the changes followed extensive testing and were designed to reflect how dealers calculate bids and buy used cars.
He said: “Based on extensive testing, we have made a series of changes to our auction platform to reflect how our dealer partners typically calculate bids and buy cars on the platform.
“With this in mind, we have adopted a retail-back pricing approach in our consumer-facing valuations, and we now display the Autotrader retail price within the auction along with the prevailing CAP pricing.
“We have removed the shopper reserve price from the auction, as testing has shown this increases the breadth of cars which have bids placed on them and improves each customer and dealer satisfaction.”
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Reserve price removal draws dealer criticism
Carwow continues to agree a reserve price with the vehicle owner, but dealers can not see that figure before submitting a bid.
The change has drawn criticism from some dealers, who argue that it leaves them bidding without knowing the minimum price the vendor has agreed to simply accept.
Dealers have also questioned the usefulness of displaying an estimated retail price because many already use their very own valuation data, vehicle preparation costs and goal margins when calculating bids.
Veichmanis (pictured) said removing the visible reserve didn’t alter the underlying auction process or mean a successful dealer would routinely pay the complete amount bid.
He said: “This alteration doesn’t impact the underlying auction dynamics: if a dealer is the one bidder on a automotive and so they bid above the reserve price, they’ll still only pay the shopper’s reserve.”
Carwow said its testing showed that removing visible reserves increased the range of vehicles attracting bids and improved satisfaction amongst dealers and consumers.
Carwow withdraws Buy It Now option
The corporate has also removed its Buy It Now feature, which allowed dealers to buy cars that had didn’t sell during an auction at a subsequently displayed price.
Veichmanis said: “We now have also retired the ‘Buy It Now’ feature, which enabled dealers to purchase cars that did not sell within the auction at a Buy It Now price.
“We took the choice to remove this because each consumers and dealers were frustrated with the time taken to finish a sale, and we consequently saw high cancellation rates.”
ANPR campaign targets used cars for dealers
The response comes as Carwow launches an automatic number plate recognition (ANPR) promoting campaign intended to extend the availability of retail-ready used cars through its dealer auctions.
The campaign targets cars aged between three and 6 years and valued at greater than £15,000.
Carwow expects greater than 1.1 million targeted digital adverts to be displayed each week between July 13 and August 23.
ANPR technology is getting used to discover qualifying vehicles as they enter participating motorway service stations in London and the South East.
An advert is then displayed encouraging the owner to sell the vehicle through Carwow.
The campaign is concentrated on family cars with not more than two previous owners.
Carwow said it is especially in search of vehicles aged five years or less with fewer than 40,000 miles.
The adverts use break-up phrases including “It’s not you, it’s me” under the campaign title “The Fling”.
Campaign goals to enhance dealer stock supply
Ben Carter, global chief customer, marketing and media officer at Carwow, said the campaign was intended to attach dealers with more consumers trying to change their cars.
He said: “There are over nine million automotive changes yearly within the UK, and we would like to match more of our dealer partners with high-intent consumers.
“Our research shows 68% of sellers experience emotional distress in the course of the selling process.
“By reaching them earlier and offering compelling reasons to sell, including no seller fees, we may also help them move on to their next automotive.
“This can give dealers rapid access to a greater mixture of retail-ready vehicles which might be in high demand.”
The service station activity forms a part of a wider campaign covering consumer and motor trade channels.
Additional promoting will run across Southern and South Western railway services, LeShuttle, social media and motor trade publications.
This Article First Appeared At www.am-online.com
