‘Middlemen’ in the online used car market are adding at least an average £1,200 costs to the price a consumer pays for a vehicle. And buyers are, largely, oblivious.
The assertion comes in a YouGov survey, commissioned by Carsnip, published today and called the ‘2016 Car Buyers’ Census’.
It says: “ Car buyers often complain about vehicles losing value the minute they’re driven off the forecourt, but that’s not down to dealers’ profit. It’s the artificially high costs they’ve paid to acquire the stock in the first place.
“This practise is now commonplace.”
The survey revealed 78% of buyers were unaware of this.
Using BCA used car market figures, Carsnip calculated that ‘middlemen’ (car classified sites and sites that sell to auctions or auctions themselves) add at least £1,200 on average to the cost of each used car sale in the UK.
“Our calculation of £1,214 is a conservative estimate,” said Nik Chotai, Carsnip’s chief financial officer. “The real cost of middlemen could be as high as £1,625, and that’s just an average.
“The figure is indicative, but it highlights a growing problem with the current car sales marketplace.”
It also suggests up to 2.1 million cars could have been purchased without the use of online classified sites, meaning a potential £14 billion market remains untapped by dealers (at an average unit price of £6,500).
Jim Reid, director of Jim Reid Vehicle Sales, is quoted in the survey findings: “We have customers of all ages buying from us, and not everyone is tech savvy.
“Most people aren’t ‘car people’ either, so searching using the traditional methods can be hard for them, especially when not all of the UK’s used cars are advertised on the two big classified sites due to cost. Customers are often missing out.”
Carsnip commissioned the independent YouGov poll: 2,092 took part.