A used car marketplace is a website or app where buyers browse, compare and price new and used cars and bikes, and where owners and dealers list vehicles for sale. In India, such websites also give buyers reviews and price guides.
Take, for example, a buyer in Hyderabad who wants a three-year-old hatchback under ₹6,00,000. She opens the marketplace and filters by price, make and kilometres driven. She compares two cars side by side: their year, owners, kilometres and photos. The site shows her what similar cars have recently sold for, so she can tell whether a price is fair. She sends an enquiry. The seller, a dealer, calls her to arrange a visit.
The sellers are owners and dealers. A dealer's cars often come from its own part-exchange, or from an online car auction. A listing needs good pictures. So many sellers use AI car photography, which turns a phone photo into a studio-style picture. The price guide is built from automotive market data, which records registrations and the history of vehicles.
Buyers worry most about whether a used car is what the seller says. A marketplace tries to reduce this worry with the number of owners, the kilometres shown, and the price guide. The dealer pays the marketplace for listing cars and for the enquiries it receives. Advertisements from carmakers on the new-car pages may also pay for the site.
Marketplaces gain from a network effect. More listings attract more buyers. More buyers attract more dealers and owners, who add more listings. That is why a few large sites dominate this business. A new site finds it hard to get started, because buyers go where the cars are.
How is it different from online classifieds? In classifieds, the seller posts a short advertisement and the two sides close the deal themselves. A used car marketplace adds price guides, comparisons and dealer tools on top. A new-car buyer can also use the marketplace to try the car configurator.