RAC Cars, the used car classified advertising service, has announced its listings are now free of charge to all dealers and consumers.

It has made the move after four months of planning in a bid to "revolutionise" the car classified websites market and to boost its use by dealers, who it says could save thousands of pounds annually in the medium term. Its car advertising portal will be promoted in the RAC's mass media marketing strategy from today.

Rupert Keane, chairman of RAC Cars, said: "With just a few dominant players in the online used car advertising market, sellers feel like they are being held to ransom and paying top dollar to advertise.

"As the motorists champion, the RAC wants to break the mould and offer something different that will benefit dealers and private motorists alike."

Currently the UK market leader Auto Trader charges dealers advertising up to 100 cars a stock advertising charge of £8.80 or £9.80 per car per week depending on when the dealer became a customer, according to its stock market prospectus. Dealers advertising more cars negotiate a volume discount with Auto Trader.

Keane said it is possible for the RAC enable free car advertising because it will be able to unintrusively present to consumers at various points in their journey its vehicle inspections, history checks, warranties, finance and recovery services and generate the money it would have made from dealers. It only needs to cover its costs, he said.

"How do you create a massive retail outlet and make yourself the number one in the marketplace with more than 500,000 vehicles? You need to have a whole lot of stock on site, and to make that happen you need to not charge people to put their stock on site.

"It then becomes a no regrets move from a dealer perspective.

"If I was a dealer I'd be paying my existing suppliers as I currently am, I'd be coming onto RAC Cars as quickly as I can, and I'd be watching the volume of traffic and sales I can get via RAC Cars, and when I've done the maths I'd be working out at what point I can turn off my advertising elsewhere because I don't need it any longer.

The pay-for model disappears

"We've seen it in different marketplaces, where somebody comes along and offers it for free the pay-for model disappears."

He said there are around 600,000 visitors a month to the RAC Cars website, but that is being moved into the main RAC website which will mean it will receive around 2.5 million visitors each month.

Keane said the operation will not need to match the 11 million monthly visits Auto Trader records, because it does not have fees to justify and despite such high traffic claims the UK's used car market volume remains at about 600,000 to 700,000 sales per month.

Nevertheless, he said that with marketing, SEO generated by other RAC activities, email communications to the RAC's seven million members, brand associations and consumer advertising "the number one in the marketplace now has something to think about".

The RAC does not expect an overnight transition, but will keep pushing the message to the consumer that there is now a bigger place to go to with more cars than ever before and all the tools needed to confidently buy a car.