Autoweb.com, Inc. announced today that it will now offer risk-free used car auctions on its next-generation Web site.
The Santa Clara, California-based online car seller claims that the new channel will eliminate the inherent risk of buying a used car online by offering a 72-hour money-back guarantee, a minimum three-month/3,000 mile limited warranty and factory or dealer quality certification. Consumers will also be given 48 hours to finalize each deal.
Company officials are touting Autoweb.com’s online used-car auction as the first of its kind.
“More than 40 million used cars will be bought and sold this year, and Autoweb now makes it easier for consumers to participate in this market online by creating a virtually risk-free auction environment,” said Dean DeBiase, chief executive of Autoweb.com.
According to Autoweb.com, the used auto channel will be selling 1996 or newer models with less than 60,000 miles. Additionally, all vehicles are certified under the manufacturer or dealer’s written certified program — including special financing packages for those who qualify.
“Consumers are going to love these vehicles,” said Norm Turner, general manager of the auction channel.
The used auto auction channel is now fully operational in California, with inventory slated to expand dramatically over the next several weeks. Autoweb.com said it will continue to roll out additional markets during the fourth quarter.
Rival May Soon Launch
While some industry observers feel that Autoweb.com’s used car auction channel is a timely proposition, they point out that it could soon have a boat load of competition.
It has been reported that Autoweb.com’s chief online rival Autobytel.com (Nasdaq:ABTL) may soon launch a similar channel. Speaking in San Francisco after the close of trading Tuesday, Mark Lorimer, Autobytel’s chief executive, told investors at the BancBoston Robertson Stephens expo that his online car referral service will also launch an auction site for consumers.
The company declined to elaborate, saying only that it expected to make a major announcement at a scheduled press conference in San Francisco Thursday evening.
Big Players Could Join Fray
Additionally, analysts point out that Ford Motor Co.’s recent teaming with Microsoft Corp. could easily be adapted to the auction model — if the concept proves to be successful.
However, experts wonder if enough of the car-buying public will be willing to trade in the tire-kicking ritual of purchasing a vehicle for the point-and-click method of buying a car online.
Autoweb.com (Nasdaq: AWEB) first launched its Web site in 1995. In 1997, venture capital firm Geocapital Partners pumped $5 million (US$) into the company to help fuel its growth.
Today, Autoweb.com, which receives more than 2 million unique visits each month, lets new or used car buyers negotiate for their best deals with a network of about 4,000 car dealers throughout the U.S. and Canada.
The company generates revenue through advertising and the fees it charges to car dealers.
In its fiscal year ending in December, Autoweb.com lost $11.5 million on revenue of $13 million.
Yesterday, its stock was up 3/8 closing at 10 .