You are here: Home - Household Bills - News -

Online car buying sites over-inflate prices with 60% getting less than quoted

0
Written by: Paloma Kubiak
08/10/2018
Car buying sites are luring sellers in with unrealistically high valuations and then dropping the price on the day of sale, an investigation reveals.

An investigation, carried out by car selling comparison site, Motorway.co.uk, looked at the difference between 4,000 online valuations and the final price sellers received over the past year.

It found 60% of sellers received less money on the day of the sale than they’d initially been quoted.

The probe revealed that ‘price chipping’ is common practice with sellers receiving an average 6% less than the sum quoted. On a £10,000 car, that’s a difference of £600.

But for cars valued under £5,000, the ‘chip down’ was as high as 11%, shedding £500 off the original valuation.

The instant online car buying industry is growing at around 15% a year, according to Motorway.co.uk and professional car buyers have to make reasonable assumptions on the condition and history of a vehicle in order to generate an instant valuation, which is very difficult.

Some changes to online prices are inevitable, but when a car is presented as in fair-to-good condition, buyers may assume the motor’s in a better condition than when it’s seen with  scratches, dents and other usual wear and tear of the vehicle.

However, the investigation found that not all car buying services take the same approach. Motorway.co.uk said some do offer realistic valuations online, which rarely change by much at all on the day of sale.

It has launched a TruePrice tool which lets car sellers compare actual likely sale prices for a car, as well as online offers provided by buyers.

Alex Buttle, director of Motorway.co.uk, said: “Consumers are increasingly looking to sell their car online to car buying sites because the process is quick, hassle-free and there are some great instant deals to be found. Many sellers simply don’t have time to wait for offers on classified sites or to drive between car dealerships to negotiate a good price.

“But speed and convenience should not mean consumers have to accept unnecessary price reductions as part and parcel of selling online. Not all buyers routinely inflate their online valuations, but sadly chipping has become so widespread that many consumers have already accepted it as common practice. Unrealistic online valuations could really damage the reputation of this growing industry if it’s not tackled head-on.”

Related: See YourMoney.com’s guide on selling your car for more information.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • Discover how your pension can be used to make a range of investments with attractive tax advantages. By… https://t.co/LMSAsBt3hb
  • RT @Defaqto: Looking for your first job? We outline our top tips for understanding and improving your credit score. Take a look @YourMoney
  • @YourMoneyUK Biased. People don't look at this stuff rationally. They also would not buy annuities if there ware decent alternatives.

Read previous post:
Cheapest local homes are out of reach for 40% of young adults

At least 40% of young adults would not be able to buy the cheapest homes in their local area, according...

Close