Used cars become bigger part of TrueCar’s business
The percentage of TrueCar’s business comprised by used cars is up.
And that’s no accident. Nor is it simply a market function.
“If you look at our business over the past couple of years, you’ve seen used cars grow every quarter,” TrueCar president and chief executive officer Chip Perry said during the company’s quarterly conference call on Thursday.
“What we’ve been doing is both enhancing the quality of the listings and the way in which they’re managed and presented to consumers, and we’ve also improved their access to them through our site and our various tools,” Perry said.
“So, I’d say it’s more a matter of us making changes that enable us to meet the needs of the used-car shoppers who happen to use TrueCar,” he said.
About 30 percent of TrueCar's unit sales were from used cars in the first quarter.
Perry was responding to an analyst asking if gains in the percentage of TrueCar unit sales attributed to used cars was “by design” or a function of market dynamics (i.e. new car sales slowing, used sales potentially cannibalizing them, etc.).
TrueCar defines unit sales as “the number of automobiles purchased by our users from TrueCar Certified Dealers through TrueCar.com and our mobile applications or the car buying sites and mobile applications we maintain for our affinity group marketing partners.”
Granted, Perry said, TrueCar is primarily a new-car destination. But do the numbers: TrueCar gets more than 6 million monthly visitors. (In the first-quarter, there were 6.7 million average monthly visitors — that compares to 5.9 million in the fourth quarter of 2015, 6.6 million in Q3, 5.9 million in Q2 and 5.5 million in Q1 2015.)
With 2.5 to three times as many used-car sales a month industrywide as there are new-car sales, Perry said, “Naturally you’re going to attract a large number of used-car shoppers.
“And we’re happy to serve them, happy to introduce them to our dealers. And it’s been a growing part of our business, and we’re glad to see it,” he added. “We’re going to keep stimulating that side of the marketplace, because we think it has significant growth potential for the future.”
Later in the call, Perry was asked by an analyst about how TrueCar might “further differentiate” itself on the used-car side.
“The whole used-car search experience is fairly standardized now,” Perry said. “And I would say that ours is more in line with all the rest than standing out in a much different way. But we have the ability, because we work with affinity partners like USAA and others, as well as the fact that our dealer network represents dealers who are quite transparency-oriented, we have the ability to, over time, create a differentiated value proposition on the used-car side of our business.
“We’re in, I would say, the research mode on that now, but are excited about the possibilities there.”