Looking for a way to boost your market share in direct vehicle lending? Consider setting up an online used car emporium either using eBay as the transactional platform (recommended) or programming the site yourself.

Even though you could do it yourself, it would be difficult to match the auction giant's powerful set of FREE buyer protections including (click on inset) including:

• Purchase Protection: Reimburses up to $20,000 for fraud and material misrepresentation after a $100 deductible
• 30-day, 1000-mile Service Agreement: Provides a 30-day warranty on major breakdowns on most cars under nine years old after $500 deductible
• Ebay Feedback Rating: Prospective buyers can review the seller's track record via the eBay feedback system

In addition, users can review the vehicle's history by searching Experian VIN # records via an online link. Cost is $7.99 for a single VIN # search, or $14.99 for up to 10 searches. Finally, buyers can order a pre-purchase inspection of the vehicle for $100.

Financial Institution Opportunities
Here's how a financial institution virtual vehicle site could work:

1. Using eBay programming tools (eg. APIs), create a website that aggregates local vehicles listed on eBay.
2. Buyers would handle the transaction through normal eBay channels, but you would have the first chance to make the loan. In order to maximize the returns, it's recommended that you allow buyers to make purchases from anyone. As you'll see later, the eBay fraud protection programs mitigate much of your risk in making "person-to-person" auto loans.
3. To further boost volume, consider helping sellers market their vehicles in any of the following ways:

• create downloadable FOR SALE signs complete with purchase details and/or referring potential buyers to the online auction (see inset for a version recently distributed by eBay in a direct mail program)
• provide a customizable template for users to create their online auto listing
• integrate customer listings with your own inventory of repossessed autos for sale
• provide "incentive financing" programs that sellers could use
• offer a wide variety of loan options for cars sold through the site

Analysis
The virtual auto emporium would have several marketing and promotional benefits:

1. Creates interest and publicity about your website
2. Drives traffic to your lending area
3. Increases vehicle loan volume
4. Creates an interesting program that could be featured in website, statement, and direct marketing campaigns (see eBay DM samples below)

Addendum: Ebay Direct Mail
Here are close-up views of the recent eBay direct mail received in early July. We may have been targeted due to recent activity, our second eBay Motors vehicle purchase.

This 9x12 inch cardboard sign looks very similar to a sign you might purchase at the local drugstore to stick inside the window to advertise a car for sale. The FOR SALE is in bright orange and includes references to the FREE $20,000 purchase protection and FREE 1,000 mile service agreement (not visible in this scan).

This eBay version is intended to be displayed within the car and highlights the eBay listing number for more information. The back of the sign (click on the image below for a close-up), lists the features and benefits of selling your car through the auction site. It also includes an offer to return the $40 listing fee if the vehicle doesn't sell. Sellers also pay a $40 flat transaction fee ($80 in total) if the vehicle sells.

--JB