Consumers are typically accepting significantly lower offers for their cars than originally expected, according to the new direct-to-dealer car selling service, Wizzle.
Wizzle was launched in August by the condition appraisal experts AUTOi, promising dealers the most transparently described cars available direct from consumers.
Already more than 2,000 cars have been uploaded to the service, which is monitored by around 3,500 dealer buyers who bid privately for stock that best suits their needs.
Analysis of several hundred completed transactions so far by AUTOi reveals that consumers are generally prepared to accept values between CAP ‘average’ and CAP ‘below’, even for cars closer to clean condition.
For dealers it means there is a potentially greater margin in cars bought directly from consumers through Wizzle than the business originally expected.
The Wizzle cash for car model is focused on transparency for both dealers and consumers, with emphasis on detailed condition descriptions supported by multiple images.
Consumer confidence is encouraged by the exposure of their cars to multiple dealers in a blind auction process.
And because condition is key to a reliable valuation, the emphasis on detailed appraisal aims to reassure dealers they know exactly what they are bidding on.
But the business has been surprised to find that most consumers using the service are satisfied with offers significantly below condition-adjusted CAP values, while still reporting satisfaction with the service.
Sellers are also more willing to accept an early bid rather than hold out for stronger offers, than Wizzle originally expected.
Wizzle founder, AUTOi’s Sébastien Duval, said: “Our experience so far goes against the received wisdom in the trade that today’s consumers are extremely savvy on the value of their car and determined to get the best possible price.
“We expected our main hurdle would be people having unrealistically high expectations around the value of their car. But the experience of our first six weeks of trading suggests that convenience and a good experience of the process may be even more important than the final price.
“Wizzle is primarily pitched to dealers as a source of clearly described quality stock they can feel safe to bid on rather than just a channel for cheap cars.
“But consumers using the service so far have been satisfied with values somewhere between CAP ‘average’ and ‘below’, even for clean cars.
“Many are also agreeing to sell more quickly than we originally anticipated, the most extreme examples being within a few hours rather than waiting for the full five-day listing period to end.
“Our marketing message to consumers is that they are more likely to get a ‘fair’ price with Wizzle than other cash for car services.
“But their feedback to us has been more focused on the convenience and overall positive experience of using the Wizzle service than about achieving what they saw as a fair price.”