Online auto marketplace CarsGuide.com.au has today announced a number of measures – including a new pay-per-view business model, supported by a new website, that will make it easier for dealers to attract quality buyers, thanks to a location based app that will be available in October.
The move by CarsGuide, which gets more than 500 000 hits every month – half as many as their direct rival Carsales – is aimed at disrupting the online market.
CarsGuide notes that the reasoning behind the move is due to “the way car sites work today is fundamentally broken”.
“Buyers are unable to see the location of the car until they submit their personal details. These details are then passed on as leads to dealers, regardless of whether that potential buyer is anywhere near their location,” it says in a statement.
According to CarsGuide: “The current model wastes time and money for the dealers, and the buyer loses control of their personal details with dealers able to regularly contact them.
“We are creating greater transparency by removing the ‘blind model’ our competitors still use,” it notes.
CarsGuide chief executive officer Lauren Williams says CarsGuide is prepared to break its business model to reinvent the car marketplace.
“We are sacrificing our lead revenue to deliver a better consumer experience and deliver more qualified buyers to dealers. We had to do something significantly different to provide what customers are demanding and we are prepared to disrupt our business to change our position in the marketplace. Our shareholders, who represent 25% of the automotive market, are all in support,” Williams says.
CarsGuide is half owned by 35 major dealer groups, who have been closely involved in the redevelopment. CarsGuide already has over 95% of the dealer inventory of its largest competitor in most states and is ahead in some states.
“Consumers now have control and no longer need to divulge their personal details to dealers just to see where cars are located. The enquiring buyers are going to be more qualified because they will only contact the dealer when they are genuinely interested in a car,” Williams adds.
The key changes that CarsGuide has introduced include:
● Location-based search: through a new location based search and Trip Planner tool (available from October), buyers will be able to see car locations, plan a route to visit cars that interest them, and only contact dealers if they’re genuinely interested. We know from our dealers that under the existing model, over 30% of leads are wasted due to being outside a buyer’s location.
● New pay-per-view model: instead of charging dealers for leads received, CarsGuide will charge for vehicle views (which will be capped, so dealers won’t pay any more under this new model). This model will come into effect in December 2014.
● Free listings for private sellers: Consumers can list their car for free on CarsGuide.
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