The valuation benefits of Accu-Trade will be part of the Cars.com platform. This acquisition allows Cars.com to improve dealer inventory.
Accu-Trade is a technology company providing vehicle appraisal and valuation data along with logistics technology. The goal of this new merger is to allow dealers using the Cars.com platform to purchase inventory faster, making this inventory more accessible to customers shopping on this platform. This will certainly improve the overall dealership and customer experience when shopping for cars to drive or sell.
How Much Will Cars.com Pay?
To acquire Accu-Trade, Cars.com will pay an earn-out of $63 million, which has a cash valuation of $65 million. This amount allows Cars.com to purchase 100 percent of the Accu-Trade assets, including Galves Market Data and Made Logistics. For the capabilities that will be added to the parent platform, this seems to be a relatively low price.
What Does Accu-Trade do for Customers?
Accu-Trade was formed in 2015, giving dealership customers the ability to buy and sell vehicles easily. This is done through both dealer-to-dealer and consumer-to-dealer programs. The technology included offers an instant guarantee offer tool along with a VIN-based vehicle valuation and appraisal information, according to Automotive News. These tools will be integrated across the Cars.com spectrum of online vehicle listings offering the capabilities powered by the Dealer Inspire division. The addition of the new Accu-Trade tools will improve the experience for both dealers and shoppers.
Adding a Consumer Aspect to the Wholesale Operation
In an interview with Automotive News, Car.com CEO AlexVetter stated dealers have had to find creative ways to acquire vehicles from consumers to keep their inventory levels up. Typically, the wholesale operation of the car industry operates at a loss, but Accu-Trade dealers have turned that around using the tools provided.
Combining the technology from Accu-Trade with Cars.com allows dealers to know how much each vehicle will cost from the wholesaler or consumer and allow them to turn over the inventory much faster. Vetter admitted the Accu-Trade dealers are running profitable wholesale operations by buying smarter and more precisely.
Adding the Cars.com consumer volume to the mix, the combined forces of the two companies can bring consumers opportunities to the dealers, giving dealers a more efficient way to sell cars. This new process will be data-driven, transparent, and much more streamlined than ever before, allowing consumers and dealers to benefit from a new Cars.com platform.
How Does this New System Work for Dealers?
When the platforms are combined, dealers will have the capability to log into the profile and set up a wish list of vehicles they want to purchase. Wholesalers, consumers, and dealers looking to sell vehicles can list what they have and then allow the system to match up vehicles between buyers and sellers, creating a much more streamlined process.
From all angles, it appears this new acquisition will benefit consumers, wholesalers, and dealers. The merging process should take approximately 30 days, after which a new way of doing business is open for Cars.com.