Throughout the first half of the year, 2022 has been something of a roller coaster ride for financial markets and investors. The Dow Jones Industrial Average opened the year at an all-time high of 37k volume on Jan 4, but plunged below 30k in mid-June. The market has improved since then, but one trend has remained steady throughout the year: Used car sellers, especially those with strong e-commerce platforms, are poised to make big bucks for investors.
At the same time, global trends are driving more diverse interest in high-end vehicles than ever before. Electric vehicle volumes continue to skyrocket, with interest in used EV sales following suit. Even America a new appreciation for motorsport, from F1 to Forumla E, prompting curiosity about high-performance machines. With its unique access to this top-tier vehicle segment, inventory and owner, the duPont Registry is poised to make a splash at the very pinnacle of this untapped market, here’s how.
Let’s start with a discussion of market segments and their relative sizes. The chart above collects data from both government and private sources and helps tell an impressive story about the opportunities surrounding used car sales. In 2019, for example, the used car market was much larger than the new car market, with a delta of more than $200 billion.
Critically, the giant market is also almost entirely untapped. E-commerce solutions exist in so many sectors of our daily lives that it is easy to take them for granted – download or streaming vs. CD or record, Amazon vs. go to the mall, food delivery app vs. called for takeout… and the list went on. However, with a few promising exceptions, getting used cars into potential owners’ driveways is still largely handled in the traditional way. Less than one percent of the used car segment is transacted through e-commerce. Clearly, this is a model that is ready to be disrupted.
Stopping Dealers With Digital
Ask anyone in the auto market (especially used cars) what they don’t like about the buying process and you’ll be greeted with a chorus of incredible “go to the dealer” in some form or fashion. A 2016 report by Dealer Socket showed that 81 percent of customers “did not enjoy” the dealership car buying process.
So a used car retailer has never been a dream destination for American consumers. What’s more, with the advent of click-to-buy technology in so many areas of our lives, the fact that you can’t easily buy a car with your phone or laptop is inherently frustrating.
Companies that became household names like Carvana and Vroom were founded with that idea in mind. Making the car buying process as easy and as close as possible without contact seems not only desirable, but inevitable. Following the investments that have supported the idea over the past decade is an interesting point of evidence.
For those who watch closely, Carvana’s share price (founded in 2012) has been an interesting lesson in hype vs sustainable value. The company’s initial public offering began in 2017 with the stock building momentum from its mid-teens to mid-thirties in its first year of trading.
The arrival of the COVID-19 pandemic in 2020, changed Carvana’s outlook dramatically. With so many Americans suddenly forced into the remote work environment, the e-commerce game has suddenly shifted from a theoretical value to a definite proposition. For Carvana, that means a surge in sales as a result of its social distancing business model – nearly half a million units sold by 2021 – bringing the company’s current market cap to a lucrative $9.6 billion.
The used car market is huge and, frankly inefficient, it has perhaps the greatest chance of being at the top. Selling luxury and exotic vehicles can be a very profitable business, but it’s also much more complicated than selling a $25,000 SUV and pickup – just ask the folks at the duPont Registry.
The duPont Registry brand is synonymous with exotic, luxury, and classic cars; Having been around since 1985, dR is one of the most trusted brands in the world in this segment. Trust is very important, for both buyers and sellers, when large sums of money and very specific vehicles are traded. Critically, the duPont team has also built a tremendous digital reach, with millions of social media followers logging into its online footprint.
In exactly the same way that Carvana, Vroom, et al are just starting to unlock the value of the used car market through digital tools, duPont Registery has a fully online experience to cater to the needs of high-end car buyers, all over the world. dR Marketplace offers 24/7 access to frictionless marketplaces, with the advantages of white glove concierge service that customers expect in this confined space. Tens of thousands of supercar listings also provide an entertaining shopping experience.
And it’s not just about cars. Thanks to an extensive and robust database of private sellers and supercar owners, 100k+, the duPont Registry has the ability to gain data-driven insights that help more people connect with their dream car more easily.
Ultimately, the used car space won’t be able to rely on its traditional sales model for long. The digitalization of our everyday commercial life, the ubiquitous buying of goods on one’s smartphone, and the general reluctance of people to deal with dealer models are all forcing major and positive changes. Whether it’s the Accord or the Aventador, companies like Carvana and the duPont Registry make sure your next vehicle is purchased from the comfort of your couch.