Australian online car classifieds company, Carsales.com, has announced that it will charge private sellers higher prices to list vehicles worth more than $15,000 on its site. Since this announcement Carsales' shares have risen, and analysts have confirmed that this move will boost private ad revenue.
The change represents an approximate 40% increase in the price of an ad for a vehicle valued at $30,000. The standard price for all cars over $15,000 has been bumped up to 10.3%, whereas the price for vehicles worth over $20,000 went up by 25%.
Rates on standard ads for cars under $15,000 have not been raised, and are not subject to the new scales, and vehicles under $5,000 will be kept at the same unchanged prices.
Carsales' shares went up by 1.6% at $12.47 at 1552 on Tuesday. Analysts at Citi predict the change in ad rates, which was implemented on July 17, will improve the company's private ad revenue by 10% in the 2018 financial year.
Citi has upgraded the Carsales' stock target price to $13.75 a share, based on the changes.