Click & Drive

Author: Matthias Gaul

May 10, 2023 Digitalization

The increasing shift of the automotive business to digital channels is reflected in the growth of online platforms for used cars. If desired, the registered vehicles can be delivered straight to the customer’s door.

In the past, everything used to be so simple: Potential buyers of used cars would look at dealer advertisements in daily newspapers and trade magazines, get in touch with and then go to the dealership to look at the vehicle and possibly buy it on the spot. This scenario still exists in principle, but digitization is making massive progress in this industry. On the one hand, most dealers have discovered “digital car dealership” for themselves. To the same extent, this also applies to providers who sell lease returns or rent out vehicles online. On the other hand, the number of online platforms is growing steadily, with start-ups springing up like mushrooms. It remains to be seen how many of them will survive. But the market is booming.
For example, AUTO1 GROUP, which calls itself Europe’s leading digital automotive platform for buying and selling used cars online, sold almost 650,000 vehicles via its websites and apps in more than 30 countries in 2022. This compares to 420,000 in 2017 – an increase of close to 55 percent. In the same period, the Aramis Group, which is now active in France, Spain, Belgium, Austria, Italy, and the United Kingdom due to acquisitions, increased the number of vehicles sold online from around 36,000 to about 82,000.
For the period from 2020 to 2025, a study published in April 2021 by management consultants Roland Berger predicted growth in used vehicle online sales of 13 percent in the USA and 18 percent in Europe. In Germany alone, according to a market growth forecast from management consultancy McKinsey, the revenue for online sales of used cars is expected to increase to around 10 billion euros by 2025. And one final number: A team of analysts from major Swiss bank UBS expects the internet to account for half of all car sales by 2030 – with used vehicles likely accounting for a considerable piece of the pie.
Due diligence is a top priority
For the most part, the various online platforms keep their purchasing procedure simple. In these online stores, you can filter out the cars according to brand, model, initial registration, mileage, drive type, and many other criteria from an often giant selection. In further steps, aspects such as financing, registration, and delivery are clarified. When the car finally arrives, customers have time to test it first. If they do not like it, the provider usually grants the right to return it within 14 or 21 days. In this case, however, buyers need to clarify beforehand how many kilometers they are allowed to drive during the “test phase”.
As with all online transactions, fraud cannot be ruled out when buying a used car with the click of a button. That is why in Germany for example, the ADAC, the police, as well as the Autoscout24, mobile.de, and Ebay Kleinanzeigen platforms are working together on the “Initiative Sicherer Autokauf im Internet”, or “Initiative for Safe Car Purchasing Online”. The goal is to sensitize users of online car exchanges to safety issues relating to buying and selling cars, to provide comprehensive information and concrete assistance. According to the initiative, there are plenty of fraudulent methods. To name just one example, buyers need to be careful with unexpectedly cheap import vehicles. The car could be an import from the US, where it was declared as no longer roadworthy and therefore may not be sold there anymore. According to the initiative, vehicles with accident damage are sometimes exported to Europe, repaired as cheaply and unprofessionally as possible in countries such as Poland or Lithuania, and then resold as “bargains”. In such cases, the prospects of redress are zero. But it does not have to come to that if you have done your due diligence. In this interview with Michael Tziatzios, Head of Used Car Management at DEKRA Automobil GmbH, find out what buyers of used vehicles need to pay particular attention to.
Three questions for Michael Tziatzios
Mr. Tziatzios, what should people watch out for when buying a used car online?
Tziatzios: Since it is usually not possible to inspect the vehicle on site and in person when buying online, and a test drive is usually not possible in advance, you are to a certain extent buying blind. However, reputable providers usually document the vehicles in great detail with photos and descriptions of condition and defects or signs of use. Ideally, the vehicle also has a quality seal from an independent expert organization. For example, the DEKRA seal for used vehicles is a sign that the vehicle’s condition has been precisely and objectively inspected. A service, by the way, that we offer nationwide.
What are the essential contents of such a vehicle evaluation?
Tziatzios: In addition to general vehicle data such as model, first registration, or mileage, as well as standard and optional equipment, including driver assistance systems, it also includes information on value enhancing factors as well as necessary repairs due to wear and tear of safety relevant parts. Repaired accident damage should also be listed. A critical examination of the interior, engine compartment, trunk, and body, as well as a check of the underside with chassis, a functional check of equipment parts, and finally a test drive should not be omitted.
The number of used battery electric vehicles on these platforms is also likely to increase in the future. This could raise the question of the remaining battery capacity for the buyer.
Tziatzios: Absolutely correct. However, the seller can dispel any concerns by having a battery test carried out beforehand, as DEKRA has been offering since the end of 2022. During this quick test at our branches, we read various battery data such as currents and voltages under load – i.e. during a brief acceleration – via the on-board diagnostic interface. We then classify the measured values using a highly complex algorithm and an elaborately maintained database. The type-specific parameters are used to determine the battery’s “state of health”. Currently, our type list is comprised of around 80 vehicle models. This already covers a large part of the battery electric and hybrid vehicles in Germany. However, more models are being added all the time.