Used cars predicted to lead online sales growth

He said: “The reports that we hear from official and unofficial channels are that the online direct sales sites established by manufacturers have only generated a trickle of new car sales so far.

“They all suffer from one key problem – in a market where virtually every new car is available at a substantial discount from a dealer or broker, new cars sold online by manufacturers are offered at list price.

“Unlike any other online retail model you could think of, it is more expensive to buy a new car online direct from the manufacturer than to pop out to your local retailer. Until this issue is resolved, these enterprises are severely compromised.”

By contrast, used car retailers have already established themselves as the leaders in generating significant numbers of sales online because they are able to adapt to the pricing expectations of customers, Tew argued.

He said: “Used car operations do not suffer from this structural pricing problem and are not caught up in the politics of manufacturer-dealer relationships.”

Used car dealers tend to focus on practical issues, he said, such as the preferred method for handling part-exchanges, their panel of lenders and the sale of value-added products.

Tew added: “We deal with a wide range of types of dealer and it is the used operations that are gearing up to take online motor retail to the next level. They are often simply more digitally aware and have a more pragmatic attitude about how to deliver sales.”

iVendi will launch the next release of its platform in 2018 which can be ‘plugged-in’ to existing websites.

A trial version of the platform has been in operation with 500 dealers and is currently handling sales of more than £2m per month.

Tew said: “To anyone who still says that online motor finance doesn’t have a role to play, we can point at this very substantial figure, one which is growing month-on-month. This is a genuine market satisfying genuine customers.

“However, nearly all of these are used car sales. While we expect that the new car market will resolve its issues, it could potentially lag some years behind used in adopting this technology.”