EXECUTIVES at sealed bid auction specialist Cars Direct predict that e-commerce will play a bigger role in used car sales in the near future.

As the company officially opened its new £1 million headquarters at Corby in Northamptonshire, chairman Graham Johnstone said an increasing number of private buyers and dealers were less inclined to want to see a used car 'in the metal' before they made a purchase.

He said: 'The surge in internet sales has not happened as quickly as many people had imagined, but over the next 12 to 18 months it will grow for used car sales.'

Cars Direct's new four-acre site on the outskirts of Corby includes facilities for the refurbishment and sale of ex-fleet and lease cars and includes state-of-the-art equipment for showing cars online and indoor showrooms.

The company said its client base included many of the UK's top fleets, leasing and finance houses.

It hosts a password-protected dedicated website for energy supplier National Grid to sell defleeted vehicles to its staff and is consulting with other fleets to offer a similar service.

Details listed on the National Grid site feature vehicle specification and photographs. Staff can visit the new Corby site to inspect potential purchases but out of 80 online sales so far only five customers have done so.

'Our clients say the internet descriptions were accurate and they were very happy to get these vehicles at trade prices,' Johnstone said.

National Grid employees can bid for the cars online and also buy extra services including finance brokering and insurance. The company disposes of about 250 cars a year with Cars Direct.

Johnstone said the fleet managers' role when disposing of end-of-contract cars had changed greatly over the past few years.

He said: 'Fleets had to inspect each car individually before they were defleeted but that has changed. We now collect the car, bring it here and we use a Palm Pilot to assess the car's condition. This information, along with photographs of the car, is then added to the website.'

Cars Direct's biggest customers are leasing companies and, ironically, they are also its biggest competitors, as Cars Direct managing director Roger Woodward explained.

'Many leasing companies are buying up dealer groups and launching their own internet sales channels so it is a concern to us. We also see it as a backhanded compliment because many of those customers are using online services similar to ours.

'It means we have to source cars from smaller players who don't have the technology to set up rival sites.'

The company said it had made significant investment in a bespoke software package and that in the future it could sell the software under licence to leasing companies launching their own online operations.

Cars Direct holds two sales a week and accepts sealed bids for the cars from buyers - typically dealers, although private individuals are welcome.

Only National Grid employees can currently make their bids online but it is likely others will be able to do so in the near future.

Cars Direct has also used a new service called fixed price stock locator which it is currently trialing with a small number of dealers.

The company says it offers dealers a 'virtual' showroom of cars which they can make available to their customers.

'The cars are refurbished and ready to go and come at a set price. The dealers can show their customers photographs of the cars and an accurate description. Once ordered, the car is delivered 48 hours later.'