An online used-car wholesaler has launched a Web site to help address one of the biggest obstacles to selling new-vehicles over the Internet: the trade-in.
AutoTradeCenter.com Inc. of Scottsdale, Ariz., which had annual revenues of $130 million in 1999, the year it launched its Web site, debuts Tradeincarsonline.com on Wednesday, March 1. The site allows consumers to sell their trade-in vehicles to AutoTradeCenter.com for a guaranteed price. The trade-in service is now available only in Phoenix, but the company plans a gradual nationwide rollout in the next two months.
The National Automobile Dealers Association says that about 50 percent of new-vehicle buyers have a trade-in. Some consumers who arrange to buy a new vehicle online also want the convenience of selling their trade-in over the Internet.
'Some car buyers enjoy the process of running ads to sell their own cars and some people like going to the dealership and interfacing with dealership personnel to sell their trade-ins,' said Mike Stuart, chairman of AutoTradeCenter.com. 'Others don't.'
Although it is initiated online, the process could take a couple of days because the customer has to make an appointment for a vehicle inspection. The consumer completes a request for an inspection on the Tradeincarsonline.com Web site and pays AutoTradeCenter.com $95 to cover the cost of evaluating the vehicle.
AutoTradeCenter.com, which has contracts with inspectors in 300 cities around the country, obtains a title history for the trade-in and sends an inspector to examine the car and take pictures of it. Based on the evaluation, the company offers a bid for the trade-in. If the customer rejects the price, AutoTradeCenter.com still keeps the $95 fee. If the customer accepts the price, the customer turns in his old vehicle when he or she takes delivery of the new vehicle. The new-car dealer then contacts AutoTradeCenter.com to be reimbursed for the amount of the trade-in applied to the purchase price, and to arrange pickup of the traded-in vehicle by AutoTradeCenter.com. If the customer still owes a balance on the trade-in, the new-car dealer pays off the lien and adds that amount to the loan balance on the new car.
'They still get something for their money,' Stuart said. 'They have a title history, guaranteed price and written inspection.'
Vehicles more than 10 years old or with more than 79,000 miles on the odometer are not eligible for the service.
AutoTradeCenter.com's licensed wholesale subsidiary, Auto Network Group, buys the vehicle and wholesales it to one of its more than 500 new and used-car dealer contacts around the country. It also can sell the vehicle through its AutoTradeCenter.com site, which allows licensed dealers to sell used cars to one another over the Internet.