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AA hits 'untapped' online sales sector

The AA intends to focus more on used car sales than new after launching its Buyacar internet and phone car buying service. It believes there is a gap in the market for an online used car business.

The £4m joint venture with Inchcape plc will need to overcome retail buyers' reluctance to purchase used cars unseen – a failing of similar operations – if it is to succeed.

Richard Williams, AA Buyacar managing director, believes the AA's strong brand will give it a competitive edge over rival sites.

“People trust us because we have decades of experience in inspecting, financing and giving advice on used vehicles,” he said.

“The AA website gets more than 10m visitors a year. This move is the first step in a long-term strategy to create a new standard for the way used cars are sold.”

AA Buyacar will initially offer cars up to one-year old, with 20,000 miles on the clock. By spring, the AA intends to be selling cars up to four years old and up to 80,000 miles. Bespoke new cars, ordered to the customer's specification, and special offers will also be available. This service is likely to be extended to fleets.

Buyers will be offered a full range of financing offers, including PCPs, and a service, maintenance and repair package, via the AA's own repair network, for a fixed monthly fee.

Inchcape, which will hold 30% of the equity, will be responsible for sourcing cars, refurbishment of used vehicles and logistics.

“In the UK, 70% of cars sold each year aren't new and we believe it is a potentially huge market which has up to now not been tapped by internet dealers,” said Mr Williams.

He expects to launch later this year a product that will allow the business to accept part-exchange cars.

The AA, which last year paid Boots £5.75m for 129 Halfords service/repair centres, intends to expand the network to 157 outlets this year.

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