South Africa’s first price rating tool for used cars goes live
How is that used car priced? SA’s first price rating tool goes live
When shopping for a used car, it’s hard to know how its price compares to those of similar vehicles. Well, until now. For the first time in South Africa, AutoTrader's all-new Price Ratings will provide in-market car shoppers with a definitive answer to this all-important question: how is the car I am interested in priced in relation to similar cars in the market?
This first for South African car marketplaces provides a simple way for car buyers to determine whether the car they are looking at boasts a great, fair, low or high price rating. Significantly, the rating is highly scientific – because it’s based on live market data and utilises an industry-first machine learning algorithm designed specifically for the used car market in South Africa.
AutoTrader’s CEO George Mienie, explains that Price Ratings has come about thanks to the company’s ability to track every interaction (supply and demand) on every search filter a consumer uses. This pertains to every car at virtually every auto dealership nationwide.
“This serves as an ideal proxy for live market data, which is very important because it helps consumers make an informed decision based on market activity in real time. Our data – pertaining to both supply and demand – is constantly updated according to the most recent market activity. This particularly helps dealers make informed business decisions relating to pricing and stocking,” he explains.
Every day, AutoTrader combines and analyses data from millions of cars and takes into account factors such as make, model, variant or trim specification, registration year, mileage and finally transmission and fuel types – and then affords each car a great, fair, low or high price rating.
If a car has a “great price” rating, this means the car is priced below the market average of similar cars. A “fair price” rating means that the car is priced in line with or slightly above similar cars in the market.
In the case of cars with a “low price” rating, AutoTrader recommends that in-market car shoppers take a closer look – because a car with this rating is priced much lower than similar cars. This could be a great deal – but it does flag the car for further inspection.
And what about a car with a “high price” rating? Should it be avoided? Not necessarily. While this vehicle is priced higher than the market average, it may not necessarily be a bad deal. “There are valid reasons why a car could show a ‘high price’ rating,” explains Mienie. “The vehicle may be in exceedingly good condition or have considerably lower mileage than its peers. It may be a highly sought-after model with limited stock availability. There could be additional benefits such as optional extras, special features and/or upgrades to the car or it could come with value-added products such as extended warranties.”
Irrespective of the rating, this innovation will mean something very important: AutoTrader will be providing more transparency to the car shopper – and Mienie says that this is vital.
“Consumers value trust and transparency in the car buying process in order to help them make informed decisions - something that car sellers and the industry cannot ignore.By transparency, we mean unbiased access to proprietary information that influences decision-making and therefore also supports dealerships in closing a sale.Access to this information is provided to both parties in the transaction, and not exclusively given to the seller.By doing this, trust is built with the buyer/consumer,” he points out.
AutoTrader believes that Price Ratings will bring consumers closer to dealers due to the transparency of the value offered to the consumer. “There is research that indicates that the more transparency you provide to the consumer, the better the experience, the higher the trust of the consumer is to the dealership and the higher the chance of converting search and research into a sale,” Mienie reveals.
Additionally, AutoTrader has also launched its condition ratings on car advertisements, which provide dealer ratings on the condition of the cars listed. This covers exterior condition, interior condition, as well as mechanical and electrical condition. The overall condition of the car will be displayed on both the Search Engine Results Page (SERP) and the Consumer Advert View (CAV). AutoTrader has done this to add further transparency to car buyers.
“Price Ratings and condition ratings add value to consumers and dealers alike. Accordingly, we are very proud to introduce more South African firsts,” Mienie concludes.