As we've noted repeatedly here, the coronavirus pandemic has caused a huge shift for most car dealers. We've focused a lot on the need for auto retailers to be able to sell cars and trucks online.
Now, with demand high but vehicle supply low, the other side of the digital auto retail coin is becoming shinier — that is, the ability to easily buy cars online from customers.
CarMax, often an industry leader in innovation, has made the importance of this crystal clear.
The largest used-vehicle retailer in the U.S., in noting last week that it was fully acquiring vehicle listings and research firm Edmunds, highlighted its installation of an online appraisal-and-offer tool as a successful early aspect of the two companies' partnership. Edmunds has been testing it on its site since June, and CarMax completed its rollout in February, CarMax CEO Bill Nash said in an earnings call Thursday.
There will be other components to the deal, which valued Edmunds at $404 million. But the appraisal-and-offer piece goes toward what Nash said was the retailer's stated goal of becoming "the largest online buyer of used autos from consumers" in the U.S.
Carvana meanwhile is on its own buying spree, as we noted previously. Online upstarts Vroom, Shift and CarLotz are all looking to get customers' cars, too.
In scouring for prime used-vehicle inventory, dealers have one major advantage — they typically get first crack at off-lease vehicles. But after that, a huge portion of the estimated 40 million used vehicles sold each year are out in the wild, many of them moving through private-party transactions.
Lately, when I go to dealership websites, I've been looking for one item before anything else: A "We'll Buy Your Car" or some kind of equivalent button featured prominently. There seems to be an increasing number of such buttons, often in bright colors.
And rightfully so. Dealers who don't have some kind of breezy, digital invitation for consumers to sell their cars to them could be ceding some badly needed used-vehicle inventory to those who do.