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Online Used Car Market Could Threaten Dealers' Finance Revenues

10 October 2000

The Online Used Car Market Is on Course to Pass $164 Billion in 2004

    
    FRAMINGHAM, Mass. - The U.S. online used car market is on the brink of 
explosive growth.  IDC estimates online used car sales' share of all used 
car sales will jump from under 3% in 1999 to almost 40% in 2004.  However, IDC 
warns brick-and-mortar car dealers could put up a roadblock in the market's 
development.

    "For the online used car-buying market to reach its full potential, online
used car firms will need to work hard to provide an integrated system and a
full range of vehicle-related services, including financing, insurance, and
trade-in services," said Jonathan Gaw, research manager for IDC's eAuto
program.  "Because traditional car dealers make their largest profits from
finance and insurance services, they may withhold inventory if online auto
dealers threaten this part of their business."

    If the online used car market can steer around this obstacle, IDC believes
its revenues will accelerate from less than $10 billion in 1999 to over $164
billion in 2004.  "Used cars tend to be high-consideration products for
consumers, and the Internet helps to bring clarity to the process and
transparency to the market, which would lend greater efficiency to both buyers
and sellers," Gaw said.

    IDC's new bulletin Online Used Car Sales Market Forecast and Analysis,
1999-2004 (IDC #W23085) forecasts growth in the online used car market and
analyzes the factors driving the market.  To purchase the bulletin, contact
Demetra Georgakopoulos at 1-800-343-4952 extension 4496 or demetra@idc.com.

    About IDC
    IDC is the foremost global market intelligence and advisory firm helping
clients gain insight into technology and ebusiness trends to develop sound
business strategies.  Using a combination of rigorous primary research, in-
depth analysis, and client interaction, IDC forecasts worldwide markets and
trends to deliver dependable service and client advice.  More than 700
analysts in 43 countries provide global research with local content.  IDC's
customers comprise the world's leading IT suppliers, IT organizations,
ebusiness companies, and the financial community.  IDC is a division of IDG, 
the world's leading IT media, research and exposition company.