Ford launches new digital marketplace for used vehicles
Ford Motor Co. on Thursday launched Ford Blue Advantage, a new digital marketplace that will allow its dealers to list and sell certified used vehicles on a single platform — a response to customers looking for a digital shopping experience and an attempt to reclaim market share from upstart digital retailers that have eaten into dealers' slice of the used-car pie.
The website, FordBlueAdvantage.com, allows shoppers to filter for features they are looking for in a vehicle, as well as by options such as home delivery, at-home test driving and video walk-arounds. And in response to feedback from customers about price transparency, the site's listings include dealer-guaranteed selling prices.
Ford partnered with Cox Automotive's Autotrader to power the platform and incorporate the relevant algorithm and search technology used by the popular third-party car listings brand. Ford Blue Advantage also features the Kelley Blue Book Price Advisor to inform customers of "good" and "great" deals.
In developing the program with its national dealer council, Ford says it came away with some key takeaways about the used-car shopping concerns of consumers.
As much as today's consumers want parts of the process to be digital, for example, many still want to see, touch and smell a used vehicle before committing to a purchase. Ford executives and dealers see their ability to combine the two experiences as an advantage over competitors such as Carvana and CarMax.
Aside from the digital retail component, Blue Advantage also includes an expansion of Ford's certified used-vehicle program.
All vehicles listed on the platform are inspected by technicians and come backed with warranty coverage. And in addition to the "gold" certification that has long been offered, dealers can now offer a lower-level, "blue" certification for older, higher-mileage vehicle.
"What Ford Blue Advantage does for customers is it addresses some of the major pain points that we learned through our journey, and a lot of that is around this lack of trust and fear of a lemon," said Andrew Ashman, Ford's U.S. used vehicle manager.
Dealers can gold-certify vehicles up to six years old and with fewer than 80,000 miles. Gold-certified vehicles have passed a 172-point inspection and come with a 12-month/12,000-mile (whichever comes first) comprehensive limited warranty, and a seven-year/100,000-mile (whichever comes first) powertrain limited warranty.
Dealers will now be able to offer certified Ford and non-Ford vehicles alike that are 10 years old or newer and have 120,000 miles or fewer. Blue-certified vehicles pass a 139-point inspection and come with a 90-day/4,000-mile (whichever comes first) comprehensive limited warranty.
"There are many customers in the market that aren't looking for that rich of a warranty coverage," said Ashman. "They really just want to make sure that the vehicle has been thoroughly inspected, and they want coverage for a short period after they purchase the vehicle."
Additionally, all vehicles certified under the new program come with 24/7 roadside assistance and FordPass rewards points for future service visits at dealerships.
Andy Mohr, who operates a large automotive group that includes a Ford dealership outside Indianapolis, sees this as a significant piece of the program because it could help dealers create new and longer-lasting ties to used-car buyers.
"Maybe 20 years ago you wouldn't buy an 80,000-mile car; today, a lot of people buy an 80,000-mile car," he said. "What this Ford program does now, it gives them peace of mind that what they’re buying is covered under warranty, and B, it gives them the avenue to be able to come back to the dealership, because they get one of their first services free on the older model.”
For dealers, the used-vehicle market already represents a major chunk of their business, and one where they see opportunities for growth.
"In sales, I need to make the funnel as wide as I can at the top, because that makes more people eligible to work their way down and eventually conduct a transaction with me," said Tim Hovik, chairman of Ford's national dealer council and owner of San Tan Ford in Gilbert, Ariz. "And the used car funnel is about three times what the new car funnel is."
But over the last five years, Ford dealers' used-vehicle market share has dropped from 39% to 33%.
"We need to arrest the decline," said Ashman. "One of the major reasons we launched this initiative is because we know that more and more customers have choice, and we want to make sure that our dealers are highlighted and recognized as a great place to buy a used vehicle."
Ford reports that more than half its U.S. dealers, or about 1,600, already are signed up to participate.
"I think when this year is done, we're going to see a significant change in the trajectory of losing a little bit of market share," said Hovik. "We're going to spin around and our share of the used-car market is going to go right back up where it should be."