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What is the CARS24 Business Model, and How Does it Work?

Imagine a situation where you find a good deal to trade in your old car, but decide not to go through with the agreement since you don’t know what the prices are and how the process works. Even if you know the negotiated, you might hesitate because of the fear of getting stuck with a terrible deal. There is a solution to this problem, and it’s
called Cars24.

The Cars24 platform allows users to buy or sell a used car within an hour by visiting one of the platform’s branches. It also allows end-to-end transactions and handles paperwork. Businesses in India dealing with pre-owned cars can purchase these cars online through the firm’s online auction platform.

Cars24 Business Model

It is Cars24’s selling methods, or perhaps more appropriately put, its auction interface, that ensures a seamless experience for its customers. A central component of the business model is using an online auction system that anyone can take part in and place a bid within a time frame.

Upon placing these bids, the platform notifies bidders of the highest bidder, and the bid amount won. Once the completion of the bidding process, the highest bidder promptly receives the car.

In short, Cars24 picks up your vehicle, inspects it thoroughly, estimates a fair starting bid, starts the bidding, completes the bidding, announces the highest bidder, and delivers your vehicle to the highest bidder. Each year, it sells over 150,000 cars through this extensive process. It essentially removes every nuance of the buyer-seller relationship and guarantees a new customer experience.

Cars24 Sources of Revenue

With its current revenue streams, Cars24 has made a lot of money. Cars24 earn money primarily from two sources. That’s through commissions and loans.

  • Commissions

Each transaction made on Cars24’s platform generates a commission between 4-5%. The company operates a model that uses assets first and then launches a bidding campaign. It is an ideal strategy to mitigate some company’s risks when purchasing a used car, but it also means more customers for them, which is a significant plus.

If you intend to participate in bidding on the platform, you also have to pay a small fee. Even this amount can be a significant part of Cars24’s revenue.

  • Loans

Our claim that Cars24 offers seamless buying and selling experiences isn’t a fable. When customers get a car through the company, they see that they get what they want. For those who are looking to purchase a used vehicle, Cars24 offers loans with interest attached. Despite being some of the lowest rates in the market, they are a significant part of the business’s cash flow, with interest rates at 8% and higher.

Conclusion

Cars24 will soon become one of India’s most prominent auto startups ever after Maruti. In the past few years, the company has grown beyond anyone’s wildest expectations.

Having revealed its trump card – a bidding system – Cars24’s competitors won’t be long in adopting it, so they’ll have to come up with something new and exciting soon. Despite this, we are cautiously optimistic about Cars24’s growth, as they have four brains at the top willing to try out new ideas.

An android fan and A Computer Engineer who fell in love with the world of Internet Marketing. Worked on different SEO techniques for small to large Internet properties at Initial days of my Career. I am in love with my passion for Blogging and running several blogs in variety of category.

Filed in: AUTOMOBILE, Random

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