America’s used-vehicle market is huge — US$650 billion ($904.6 billion) worth were sold last year — and incredibly fragmented. Ideally, an industry like that would be ripe for disruption and one or two large players would run away with the prize, but so far the used-car sector’s switch to online sales has been disappointing. Used-car business soaks up a lot of cash and online platforms need to raise more money to acquire scale to help pave their path to profitability. While online used-car platforms are steadily growing their share of the market, they currently account for under 10% of the total used-car sales in the country. Americans may be doing a lot more things digitally than ever before, but when it comes to buying cars they still like heading to a used car lot, kicking tyres of cars they fancy and haggling with used-car salesmen over price.
Having just returned from a six week trip to Europe and Asia, I wanted to tackle something I heard a lot about during my sojourn overseas: used-cars sales, particularly the roaring business they did at the start of the pandemic, and ironically, the plummeting stocks of online used-car platforms in recent months. In Southeast Asia, I learnt about the sudden yanking of the much awaited dual listing in Singapore and New York of Carsome Group, the region’s largest used-car online marketplace, ostensibly because of volatile market conditions and deteriorating economies in its key markets.
All car owners, even those who only ever buy new cars, have stories to tell about their experience of selling their used car. It isn’t just the hassle of trying to sell the car, but wondering if you have really got a fair price for your car. People have been buying stuff online for over 27 years. How difficult would it be to sell your own old car, or indeed buy a used vehicle, from the comfort of your living room sofa? The promise of online used-car platforms was simple: You don’t need to spend too much time googling to figure out what the car you are selling or buying is actually worth. You don’t need to haggle with fast-talking, pushy used-car salesmen who wants you to quickly make up your mind about whatever is on offer. The platform’s algorithms take care of everything. Without compromising on the price, you could still walk away knowing that you got the fairest bid possible for your car, whether you bought or sold one.
