In a comparative analysis of transaction costs between traditional and online auctions, the fundamental difference is that physical auction charge buyers a considerable fee, around two-thirds of the total transaction cost.
Selling dealers pay the remaining third, but will often be offered a volume rebate to bring this down below £100 per unit. It’s the buyer’s costs that stand out and which will directly influence the price paid.
A regular buyer will pay over £200 for a car worth £3000 and £250 for cars over £5000. Volume brands achieve average selling prices around £3000 per unit for trade cars, prestige cars up to double that. All dealer stock is therefore expensive to buy at auction and there is every probability the buyer will pay more in fees than the selling dealer will achieve in profit.
Matthew Hall of MSH Ltd, one of our 5294 registered buyers, says “I am more likely to buy from FullAuction than from its competitors because it allows me to cap my budget when bidding so I can avoid eroding my margins. Unlike other users who may be retailers with a large forecourt holding lots of stock, I have a quick turnaround and therefore my margin is much tighter”.
The online model works, buyers like it, they can bid on the move and do so with confidence.