CarOffer, the fast-growing pre-owned vehicle trading innovator and part of the CarGurus network (Nasdaq: CARG), announced it has launched the first national non-affiliated online pre-owned vehicle exchange desk, PremiumXchange (PX). PX will allow dealers to exchange vehicles with one another across the country at prices set by the dealers themselves. Utilizing CarGurus’ proprietary Instant Market Value (IMV) technology, dealers can capitalize on market disparity across regions. Differing regional demand and market dynamics greatly affect inventory value from one dealership to another. Identifying these trade scenarios instantly from a pool of hundreds of thousands of vehicles will give dealers a powerful new tool to manage their inventories.
PremiumXchange digitizes and automates dealer-to-dealer vehicle exchange on a national scale. The platform will allow dealers to purchase retail-ready inventory, which could help yield favorable profit margins with quick turn times in their markets. At the same time, these dealers will be selling or exchanging front line vehicles that haven’t performed well for them because of unfavorable local market dynamics. Trading this market disparity enables both dealers involved in the exchange to benefit, as each receives a vehicle much more likely to perform well in their specific markets. PX will help eliminate aged inventory issues and mitigate substantial wholesale losses.
There is tremendous regional price disparity in today’s pre-owned vehicle industry – retail values, day supply and demand can vary significantly from market to market. With PremiumXchange, dealers can trade on that market disparity, giving them instant inventory controls and trading power. This offering automates and enhances the manual and inefficient old-school way of facilitating dealer trades by leveraging the CarOffer dealer network. PX’s ability to instantly analyze hundreds of thousands of vehicles can produce thousands of exchange scenarios that are beneficial to both parties.
Large dealer groups in the U.S. who own multiple dealerships have utilized group trade strategies for years. Using market and historical sales intelligence and affiliated group trade or exchange allows these groups to move a vehicle to the location where it’s likely to sell for the most amount of money in the quickest period of time. Non-affiliated dealers are disadvantaged, forced to manage inventory turn by simply sending their underperforming aged units to auction, realizing significant wholesale losses as a result. PremiumXchange immediately changes this situation for thousands of dealers across the U.S.
“CarOffer is leveraging its unique platform with more than 10,000 enrolled dealer partners to create the largest non-affiliated online pre-owned vehicle exchange desk/platform in the U.S. The largest dealer groups in the country have less than 400 locations, so PremiumXchange’s 10,000+ will have no rival,” said Bruce Thompson, CarOffer CEO and Founder.
PremiumXchange is designed to allow dealers a soft landing in rapidly declining or depreciating markets; conversely, in a stable market, a dealer can optimize wholesale profits on aged units by capitalizing on market disparity. Either way, the size and scale of PremiumXchange will give dealers more options than they’ve ever had to manage pre-owned inventory.
“My team and I created the very first group trade tools in 2001 with the launch of American Auto Exchange (AAX),” said Thompson. “PremiumXchange represents a totally new level of capability. Our scale and national footprint of over 10,000 enrolled dealer locations, combined with CarGurus’ unique market pricing insight, IMV, are the key elements that make PX so powerful and virtually impossible to emulate. In my opinion, PremiumXchange has the potential to be transformative,” Thompson concluded.