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