Autotrader Confirms 5.5% Price Rise for Car Dealers in 2024

Autotrader Announces 2024 Price Increases for Car Dealers

Nathan Coe, the Chief Executive Officer of Autotrader, has officially confirmed that car dealers across the UK will see a 5.5% increase in their package prices this year. The new pricing structure is set to take effect from the 1st of April and will apply to all dealer packages on the platform.

Speaking exclusively on the Car Dealer Podcast, which is available on Spotify and Apple Podcasts, Coe described this year's increase as being 'lower than normal'. This is notably less than the 8% hike that was implemented last year, suggesting the company is mindful of current market conditions.

Justification for the Price Rise

Coe stated that the price adjustments are 'justified' due to Autotrader's continued and significant investment in enhancing its advertising platform. He revealed that the business plans to invest approximately £170 million into the marketplace during the current year to improve its services and features for both dealers and car buyers.

Detailing the decision-making process, Coe said, 'There's a whole bunch of stuff that we take into account [when deciding price rises] – how the market's doing, how dealers are doing, what sales rates are looking like, how's our audience doing, what products we've delivered during the year. And we kind of put that all in a bucket. It's a bit of science and it's a bit of art.' He also acknowledged external pressures on retailers, particularly increased labour costs following recent Budget announcements.

Dealers are due to receive official communication regarding the price rises next week, along with details of special offers available to some customers.

Addressing Recent Dealer Discontent

The announcement comes in the wake of significant dealer discontent following the introduction of Autotrader's 'Deal Builder' feature in November, which led to protests from some retailers. Coe acknowledged that this resulted in a number of dealers either downgrading their packages or leaving the platform entirely, confirming the figure was just under 100.

In an effort to soften the impact of the price rise, Autotrader is launching a series of special offers for eligible dealers. These include the choice between a free double stock offer for four weeks, a free package upgrade to the next level, or a free PPC campaign. However, these offers will controversially not be available to dealers on the 'Starter' package tier.

Coe defended this decision by stating, 'It's just a pretty standard thing in business. You pay more, you get more. Starter is stripped back, costs less money, and comes with less stuff.' This has reportedly been perceived as a 'punishment' by some dealers who had downgraded to Starter packages in protest against previous Autotrader actions.

Key Dealer Questions Answered

During the podcast, Coe also addressed several pressing questions from the dealer community. One topic was the recent requirement for car buyers to sign in before making an enquiry. Coe explained that this helps Autotrader track user priorities and create a 'permanent connection between the buyer and seller', adding that asking people to sign in is 'generally how the internet works'. Since its introduction, Coe admitted there has been a 'swing towards calls' instead of emails, but insisted that platform-wide leads have remained 'pretty flat' year-on-year.

Another significant point of discussion was Autotrader's share price, which has fallen by more than 30% in the last six months. Coe was adamant that this was not connected to dealer dissatisfaction. Instead, he attributed the decline to broader investor concerns about the impact of Artificial Intelligence on marketplace businesses globally, citing similar trends for companies like Rightmove and realestate.com.

Listening to Feedback

In response to the fallout from the Deal Builder launch, Autotrader established Customer Advisory Groups. Coe stated that feedback from these groups has been instrumental, leading to tweaks in Deal Builder and changes to the company's product roadmap for the year ahead. Specific changes mentioned include the introduction of optional reservations, adjustments to product pages so Deal Builder is less dominant, and rebranding 'deals' as 'online enquiries' in the dealer Portal.

Coe concluded by encouraging dealers to assess their return on investment mathematically and acknowledged the role of competition, while also highlighting Autotrader's market dominance: 'Eight in 10 people actually use Auto Trader and six out of 10 only use Autotrader.'

Autotrader has announced it will host a webinar on Tuesday, January 27th, at 11 am, where Coe will discuss the latest package changes and take questions from dealers directly.