New businesses seek share of online used car sales market

New businesses are aiming to take advantage of the UK’s used car market with an online only presence.

The CarGurus site, set up by the team behind TripAdvisor, plus Carspring, Tootle and Carsnip are among those vying for a slice of the market which deals with around seven million second hand car sales annually. Auto Trader is also now an online only publication.

Signing up your dealership with an online selling portal can be a useful extra marketing tool but it’s important to remember the bricks and mortar part of your business in a digital world. Make sure you have the right levels of motor trade insurance to cover your building and its contents, plus a decent road risks insurance policy.

The used car market is around three times the size of the new car market, with the average vehicle changing hands for £6,500, according to figures from BCA marketplace. It is growing as more people use finance deals to pay for used cars, and interest among UK buyers to find their next car online increases compared to other European countries, the Financial Times reported.

Peter Baumgart, co-founder and managing director of Carspring, said: “Germans are more emotional about their cars — they want to smell the leather. Here [in the UK], people are more convenience orientated.”

Auto Trader is by far the biggest player in the market, with an estimated two-thirds of all used car adverts in the UK appearing online on its site. Around 70 per cent of the searches carried out on the site are via mobile devices.

New companies are trying different approaches. For example, Carsnip does not charge dealers to list their stock on its site and instead uses its technology to search the internet for listings. It is aiming to become a Google-type search engine for people looking for their next used car.