Trust us, there’s a great deal going on in secondhand cars
Peer-to-peer vehicle finance venture by RCS joins a busy field dominated by AutoTrader and WeBuyCars
The surge in demand for used cars as buyers become more price conscious makes the business of financing secondhand cars a plausible one for unsecured lender RCS. The consumer finance company introduced peer-to-peer vehicle finance late in 2018.
It’s too early to tell how much the venture will increase RCS’s minuscule market share. But what is already certain is that there is a big market out there.
Online car trading platforms such as AutoTrader are dominated by dealer adverts – which made up 98.8% of the 64,164 cars listed on Thursday last week. Yet on online classifieds site Gumtree, private sellers make up almost a third of listed cars. And on OLX there were twice as many cars listed by private owners as those listed by dealers.
Many other players have identified the opportunity in used cars. Naspers’s online portal WeBuyCars has cleaned up the reputation of the secondhand car trade market. The site offers secure transactions as well as much-needed inspection and verification of a vehicle’s documentation. It is well capitalised after Naspers invested R1.4bn in the venture in 2018.
RCS’s model differs in that it focuses purely on peer-to-peer sales. It does not buy cars to resell, as the likes of WeBuyCars do. RCS may be hoping to secure the part of the market that predominantly used personal loans to finance car purchases, but time will tell if its offering will stand out from the rest. After all, the big banks are also getting the hang of financing peer-to-peer car sales.