Friday, 11 March 2016

How to Save €1500 in 37 Minutes on your Next Car Purchase

This is a guest post by Vlado Prosenik from Efekto Pro. Efekto Pro are our consultancy partner in Slovenia.  They help customers make purchases more efficiently. 

A few months ago, I realized that it was time to replace my car. I was treating it very well; feeding it with the best fuel and oils, getting it serviced regularly, changing it’s tyres when needed, etc. It was returning my kindness with safe routes, comfort, excellent radio sound, and it was not greedy at all. We were good friends. I thought it would be upset to be sold to a new owner. However, as soon as the first potential buyer showed the money, my friend forgot about me.

Quite sad, my friend left me just because of money. I had to find a new car. Since it served me well, I wanted a new one from the same litter. Since I unfortunately hadn’t won the lottery that week (even now, I cannot understand how I didn’t win!), I started searching for the most economical way to purchase a new car.

I checked the range of vehicles to suit my needs, demands and preferences. I found six such cars. I tested all six, obtained bids and negotiated the price for all of them. Some sellers were friendly, others were professional, some were arrogant, some funny, and some were misleading. Nevertheless, all the cars were beautiful, powerful and clean. For each of them I found both positives and negatives. However, all would give me safety whilst driving and all would bring me to a desired destination at the same time. Provided there is a road to get there, of course.

I found a favourite quickly. The preferable order of the other five was also defined quite soon in my head. I was negotiating the price of my favourite very hard. I even used help of some acquaintances to come up with the best price. At a certain stage, even acquaintances were not able to help me with lowering the price. I said to myself: "That's it." "Unless ... “ “No, stop dreaming, who will participate in an auction for one car, come on, be serious.” “However, it is not a sin if you try!”

Reverse auction! If I can run reverse auctions for my clients, why could I not run a reverse auction for  my car?!

The decision was made. I ran a weighted auction, meaning the winning supplier was chosen for more than providing the cheapest price.  If I had set the only criteria of price, I would most likely have not been satisfied with the winning car.

Here are the statistics from the auction:

Invited participants
Participants registered on Market Dojo
Participants that accepted invitation
Qualification bids placed
Number of participants actively bidding
Total bids placed during auction
Auction duration
37 mins

A participant who I had not contacted personally submitted the winning bid. The next day I went to meet the winning bidder and to sign the contract. They were very professional and friendly. I saved about 1500 EUR according to the best offer I have managed to negotiate before the auction. I had received the car more than one month before the promised deadline. And after a few months of driving the new car, we are getting better and better friends.

It is also interesting that quite a few unsuccessful vendors called me after the auction. They were asking which car I bought, and if they can offer the service. Not one negative comment I have received regarding the selection process. Mostly they commented that they could not give a better price and that it was good to have an opportunity to see their rank during the auction.

If I managed to run a reverse auction to purchase a car, for my own personal use (as erratic and tedious as that process can be), then surely there is great opportunity for reverse auctions to bring savings in areas where the competition between providers is developed. You just have to take it the right way!

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