The AIM Group’s Jonathan Turpin discusses the opportunities available for autos-focused businesses at AutosBuzz.

“One of the most important segments is the finance piece. It’s integral to the purchase of a car,” he believes.

Transactions have changed over the last five years with the advent of Carvana and other digital dealers, but can they use transaction as a disruptive model?

Jonathan Turpin, AIM Group Principal

Jonathan Turpin Aim Group Principal

Private seller envy

The dilemma is how can marketplaces bring dealers to transact on their own sites or how do you get OEMs and dealers to integrate rather than hold the transaction themselves?

One option is private-seller transactions, which show dealers and OEMs how well marketplaces can transact and get them to buy into that vision.

With c-to-c sales, consumer can expect to get a 15% reduction in possible sale price.

There is an opportunity for marketplaces and we are seeing some companies moving to gain a foothold in this area.

Delivering private seller transactions has four main factors linked to it: car condition, contract, payment and registration.

“CarGurus have added more detail on private seller information, which increases trust and transparency to make it a better consumer experience,” said Turpin. “However, different companies have a different approach to doing this.

“Marketplaces are not doing it all in one go, but picking a set of pieces, working on them separately and bringing them together gradually. One of the most important segments is the finance piece. It’s integral to the purchase of a car.”

Car finance – why is it so important?

Around 90% of new cars are financed, and 30-40% for used cars.

“New and used cars need a different approach and there is a hugely diverse set of ideas globally,” said Turpin.

Captive finance in many areas is a key tool for OEMs in selling cars and, as finance develops in emerging markets, they are likely to follow the same route.

“In used car finance globally, this is one of the most diverse areas of activity,” said Turpin.

In emerging markets, there is more focus on metal margin. In more developed markets, margin is more closely linked to add-on sales, insurance and finance.

Marketplaces need to balance dealer and consumer needs by delivering a proposition that is good for consumer as they now have more options and alternatives.

The new car schmooze

Buyers are less brand loyal, they are exploring new brands. Manufacturer websites have been poor in this area, which offers an opportunity for marketplaces.

Auto Trader is strong in this area and focusing on bridging the new- and used-car crossover. Scout24 has moved into subscription marketplaces, which we think is the first to add this to its business.

“It’s significant because of the pain-points in the car-owning process,” he said. “So, it suggests consumers want to move away from that to an all-inclusive package.”

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