Price hike tipped to lift Carsales revenue
Shares in Carsales.com have risen after the online car classifieds company said it will charge private sellers higher prices to list cars, a move which analysts say will boost private ad revenue.
Carsales has confirmed that, under recent changes, prices for ads for cars worth more than $15,000 now increase with the value of the vehicle.
The change represents a near 40 per cent lift in the price of an ad for a $30,000 car.
The standard price for all vehicles over $15,000 jumped 10.3 per cent, while the price for vehicles worth over $20,000 was increased by 25 per cent.
Prices for standard ads for cars under $15,000 are not subject to the new scales.
While listing prices for cars worth over $15,000 have climbed, Carsales will continue to offer free listings for cars under $5,000 and will keep its premium ad prices unchanged.
The company's shares were 1.6 per cent higher at $12.47 at 1552 on Tuesday.
Analysts at Citi expect the change in advertising rates, which came into effect on July 17, will boost Carsales' private ad revenue by 10 per cent in the 2018 financial year.
Citi upgraded the company's stock target price to $13.75 a share, based on the changes.
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