Used Car Sales Also Trending Toward Contactless and Direct Transactions

[Asia Economy Reporter Suyeon Woo] With the activation of online transactions, a new trend is emerging in the used car market, which is a typical 'lemon market' (a market where only low-quality products are traded due to information asymmetry). Due to the novel coronavirus disease (COVID-19), non-face-to-face transactions have become more active, and the trend of direct transactions between the final seller and buyer without going through intermediate distribution stages is taking hold in the market.

According to the automobile industry on the 3rd, the transaction success rate of AJ Sellcar's non-face-to-face online used car competitive bidding service 'Sell My Car' has steadily increased from 29% in April to 35% in May, 38% in June, 42% in July, and 43% in August. This means that 4 out of 10 cars that went through the 'Sell My Car' auction on the online platform were actually sold.

This service allows people who want to sell used cars to conduct competitive bidding online in a non-face-to-face manner to sell their vehicles. Once a vehicle is registered, a professional vehicle appraiser visits at the desired time and place to collect information, which is then disclosed to about 500 member companies at a set time and put up for auction. Customers can sell their vehicles at a fair price without any on-site depreciation since they do not meet dealers directly. The entire purchasing process, including vehicle bidding, online competitive bidding, payment, and delivery, is conducted non-face-to-face.

Conversely, used car sales are also conducted through non-face-to-face online competitive bidding. AutoPlus's premium used car brand 'Reborn Car' offers popular car models with different monthly concepts through online auctions, providing opportunities to purchase at special prices. The vehicles listed for auction are premium used cars with performance levels exceeding 90% of new cars.

AutoPlus also introduced used car listings non-face-to-face through real-time used car live shows on their YouTube channel. The live broadcasts provide detailed introductions of the vehicle's exterior and options, as well as real-time communication to address buyers' questions.

Meanwhile, direct transactions between companies and consumers without going through dealers or online platforms are also gaining popularity in the used car market. This method involves direct transactions with trustworthy companies to eliminate distrust in the typical lemon market of used cars.

Existing online platforms or dealers have only played the role of connecting used car sellers and buyers, which increases intermediate distribution fees and complicates transaction procedures. However, direct-operated used car companies incorporate trustworthy vehicles as company assets first and then conduct one-on-one direct transactions with consumers.

This D2C (Direct to Consumer) transaction method guarantees price transparency by eliminating intermediate distribution stages, increases product reliability, and allows immediate response to consumer demands. The direct-operated used car brand Kcar sells used cars directly through 38 nationwide direct stores and an online site without going through intermediate dealers.

A Kcar representative said, "The direct transaction method has the advantage of no concerns about false listings and operates a fixed price system, ensuring price transparency. Since we directly select high-quality used cars, purchase them, and go through the merchandising process before selling, we can reduce consumers' concerns about quality."

This content was produced with the assistance of AI translation services.