Auctions

Typical fall trends make their way into the lanes

LAWRENCEVILLE, Ga. - 

With fall officially arriving, dealer behavior is changing accordingly based on the data and observations included in the latest Black Book Market Insights report.

Along with more perspective on hurricane-related buying, editors shared in this week’s rundown that truck segments performed much better than car segments. Three vehicle categories within the truck segments increased in value last week, including compact crossovers, compact vans and small pickups.

“Depreciation was steep on luxury cars and sporty cars while smaller cars, SUVs and pickup trucks held their values relatively well last week,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics.

Volume-weighted, Black Book indicated that overall car segment values decreased by 0.38 percent last week, close to the average weekly drop of 0.33 percent in values registered during the previous four weeks.

Editors noticed midsize, compact and sub-compact cars performed well, while prestige luxury car and premium sporty car segments declined the most.

Again volume-weighted, Black Book found that overall truck segment values (including pickups, SUVs and vans) softened by 0.17 percent last week, similar to the average weekly decrease of 0.14 percent in values spotted during the previous four weeks.

Editors mentioned the full-size luxury crossover/SUV and minivan segments dropped the most among truck segments by 0.43 percent and 0.46 percent, respectively.

Turning next to what Black Book’s representatives in the lanes reported back to headquarters, various auctions are involved in how dealers impacted by hurricanes are responding.

From Texas: “Consignment was off a little today, but the prices are holding steady.”

Another anecdote from the Lone Star State added: “The rental lanes are doing well with compact cars experiencing strong sales. The price point on those vehicles makes them popular as flood-replacement vehicles.”

And from Florida: “Buyers are being cautious and only purchasing vehicles as replacements for previous retail sales.”

Up North where the leaves are likely already turning to red and gold, dealers are bracing for when it turns cold and shopper behavior changes accordingly.

From Michigan: “Retail is just OK in the area. Two wheel drive SUVs and pickups have begun their seasonal dip in values.”

From Massachusetts: “The change in weather has prompted the usual shift in dealer buying. There is more caution and hesitation in the bidding process.”



KAR acquires remaining interest in TradeRev

CARMEL, Ind. - 

TradeRev now is completely part of the KAR Auction Services family of companies.

KAR announced on Tuesday morning that it has acquired the remaining interest in Nth Gen Software, better known as TradeRev, which is a mobile app and desktop solution that facilitates real-time dealer-to-dealer vehicle auctions.

KAR purchased a 50-percent stake in TradeRev in 2014 and acquired the remaining interest for $50 million in cash and an additional $75 million over the next four years contingent on certain terms and conditions including TradeRev performance.

Company officials highlighted that TradeRev brings mobile and digital technology to KAR’s portfolio of 250 whole car and salvage auctions, floorplan financing solutions and other ancillary and related services.

KAR explained that it will further integrate those capabilities into TradeRev to expand its digital business and strengthen its share in the dealer-to-dealer market representing more than 10 million annual transactions.

“The digital revolution in remarketing has begun, and the acquisition of TradeRev ensures that KAR will maintain its strong leadership position in the mobile app and online auction space,” KAR chairman and chief executive officer Jim Hallett said.

“As a former dealer, I believe TradeRev is the most powerful and innovative mobile app for dealers on the market,” Hallett continued. “By injecting TradeRev with the full force of KAR’s technology, data, financing and service offerings, we plan to accelerate growth across North America and around the globe.”

The acquisition also triggered a variety of executive personnel changes.

KAR indicated TradeRev will be led by Becca Polak, who for the last 10 years has served as KAR’s executive vice president, general counsel and corporate secretary. As president of TradeRev, she will focus on diversifying TradeRev’s product and service offerings and expanding TradeRev’s market footprint.

The company added Polak will also be promoted to the position of chief legal officer and secretary for KAR where she will retain oversight responsibility for KAR’s enterprise legal and corporate communications functions.

“This is a transformative moment for dealers, as KAR and TradeRev combine to deliver a more convenient, efficient and cost-effective alternative to traditional auction sales,” Polak said.

“The speed and ease of TradeRev’s mobile app is already fueling sales for thousands of dealers in the U.S., Canada and the United Kingdom,” she continued. “Over the next several months, we’ll continue expanding into new markets and begin leveraging KAR’s data analytical capabilities to enhance the TradeRev buying and selling experience.”

TradeRev was launched in 2009 by CEO and co-founder Mark Endras along with co-founders Wade Chia, Jae Pak and James Tani, all of whom will retain leadership roles at TradeRev.

Endras will remain a member of the TradeRev senior leadership team reporting to Polak and will focus on enhancing TradeRev’s in-app experience and product development pipeline.

Endras will also take on the role of chief innovation officer for KAR reporting to Tom Fisher, KAR’s chief information officer. In this capacity, Endras will focus on advancing KAR’s innovation agenda and establishing new KAR innovation lab centers in Toronto, Chicago and Carmel, Ind.

“KAR has an incredible entrepreneurial culture and a proven track record of fostering disruptive innovation across their businesses,” Endras said.

“By applying a start-up philosophy to KAR’s development pipeline, we’ll be able to deploy new solutions more quickly than ever before,” he went on to say. “I look forward to delivering the next generation of innovative remarketing technology, products and services to KAR’s global customer-base.”

TradeRev has approximately 200 employees across office locations in Toronto, Chicago and Carmel, Ind., and field staff located in markets across the U.S. and Canada.

TradeRev offers dealers what it contends is fast, convenient access to high quality trade-in and commercial consignment inventory before it reaches wholesale physical auctions. The TradeRev mobile app can mimic the physical auction setting, enabling dealers to launch and participate in live, one-hour auctions directly from their smartphone, tablet or desktop.

Winning TradeRev bidders can complete the entire transaction within the app, including optional inspection, title and arbitration services and financing and transportation through KAR’s AFC and CarsArrive brands.

“I am thrilled for KAR, TradeRev and all of our employees,” Polak said. “Today marks a significant milestone in the digitization of vehicle remarketing and the beginning of a bright new era of innovation for our company. I am honored and humbled to lead TradeRev and this incredible team into the future.”



From mobile sale to Manheim Wilmington: Building an auction

WILMINGTON, N.C.  - 

A mid-September morning in Wilmington, N.C., feels a lot like AuSM’s previous visit to the D&E Mitsubishi grounds back in January

Sunny skies, pleasantly warm.

Auto dealers milling about, bidding on and buying cars from the Manheim auto auction sale happening on the property.

Except this time around, instead of cars running through an outdoor, asphalt lane adjacent to a satellite-equipped trailer, the cars are passing through a two-lane, covered auction arena.

That morning of Sept. 15 was grand opening sale at Manheim Wilmington, the culmination of converting a mobile sale to a permanent auction site.

What had been a traditional mobile auction for a decade is now a two-lane permanent auction facility. 

The launch of Manheim Wilmington was part of a larger local and mobile growth strategy for Manheim, which announced six new physical auctions in July, including the Wilmington site. 

The new sites are smaller, one- to four-lane facilities. At that time, the company also said it would be expanding its mobile and digital services to new areas of the U.S.

In a September news release on the Wilmington location, Manheim said its local and mobile growth strategy is “designed to meet the needs of a variety of sellers—from independent dealers to franchise and commercial consignors, enabling them to do business when and where they need”.

Matt Laughridge, who is director of mobile auctions at Manheim, said in the same release: “Our expansion decisions are always driven by our clients. We have worked closely with our dealer clients throughout the region to identify opportunities to provide a marketplace that often delivers greater net value than traditional dealer-to-dealer sales.

“And with the Manheim Simulcast and OVE platforms, we can extend the buyer base and help our sellers achieve even greater success.”

‘That looks like an auction building’

In April 2016, Kevin Cook was the newly minted general manager of Manheim North Carolina and attending his first-ever mobile sale, which was taking place at this very location.

“And I’m standing there in front of our trailer, enjoying the scene, enjoying the experience, and I look to my right and I see this building.  It’s vacant. (I’m) like, ‘That looks like an auction building,” Cook said, referring to the building in which Manheim Wilmington is now housed.

Cook, who is general manager of both Manheim North Carolina and Manheim Wilmington, readily acknowledges he wasn’t the first person to think of that idea. It had been discussed over the years. But the idea planted the seed for a goal to make that conversion.

And discussions with D&E Mitsubishi then started and continued over the next six months to get more input on expansion of the sale.

In early 2017, they locked in an agreement, and then in the spring, Cook, Laughridge and Manheim North Carolina dealer services supervisor Justin Rogerson walked the facility and started brainstorming plans. They drew up a blueprint of sorts, utilized some capital from Manheim and D&E, and got to work.

The technology infrastructure was a big part of transition, and the auction worked with corporate headquarters in Atlanta on that project, Cook said. The team worked with local contractors on the design and construction of the new space during June and July.

Before remodeling, the arena looked like a “garage,” Cook said.

The team replaced the insulation and installed new doors on either side. They also added a barrier from the dealership, since D&E will still be using the showroom space, counters, fireproof safes and Simulcast screens and more.

“It was really starting a brand new auction from scratch,” Cook said.

He has had experience doing this before, dating back to his days working to getting Manheim Nashville launched in 2001.

 “This was as complicated to me as that was,” Cook said.

Down to everything from renovating bathrooms to ensuring security measures and taking care of the tech infrastructure.

“Those kind of things you forget,” Cook said. “It’s not just opening up a garage. You have to build an auction.”

Other facilities across US

There are 14 of these smaller Manheim facilities in the U.S., Laughridge said, including another N.C. location across the state in Charlotte.

“It’s an evolution that we have to go through,” Laughridge said, “They almost have to have a proving ground of the more traditional mobile auction and then grow to it. We don’t often (have a) ‘build it and they will come’ philosophy. We want to partner with a dealer or two or multiples and grow it organically.”

Some dealers find that a more boutique approach can be less intimidating than a massive auction facility and provides a more personalized service, he said.

If there are 350 vehicles, there will likely be 350 buyers at these types of sales. And 60 percent or more of those buyers will be online, Laughridge said, meaning the 25 staff/personnel will have less than 150 folks to work with on site.

“That gives us a really good ratio for being able to work hand-in-hand with the buyers,” Laughridge said.

Those buyers hail from all over the East Coast, Cook said. As far as the sellers, there’s a good mix here at Wilmington, as well. That includes eight to 10 larger franchised dealers, Triangle Auto Sales, independent dealers and wholesalers.

Typically, there’s an average of 25 sellers at this location, with cars averaging a $6,300 price point.

‘Work hand-in-hand with buyers’

One of the benefits to having a permanent place is the ability to secure the lot and allow sellers to bring cars on site Mondays and Tuesdays for the Friday sale instead of a “surge” of vehicle drop-offs Wednesday through Friday, Cook said.

And for the sellers, that also means the car can be checked in quicker and posted online three to four days earlier, as well.  Buyers can come check out the cars earlier, as well.

With the full-service office now on site, folks can drop off titles and receive payments on Monday, as well, instead of waiting until Friday or go through the mail, for example.

“And we invested in (Manheim Wilmington) having its own inventory management system here, which is a pretty extensive process,” Laughridge said.

So instead of it being under the inventory system of Manheim North Carolina (which had run the mobile sale), it has its own, letting the auction post cars on OVE, facilitate transactions and thus give customers more of “full-service offering,” Laughridge said.

Plus, it gives the auction its own identity, he added.

Cook said, “I think the word he used, ‘identity,’ is probably the biggest change.” 



BSC America’s new Bel Air auction hosts 1st sale

BEL AIR, Md. - 

BSC America hosted its first regular sale at its new Bel Air Auto Auction facility last month.

Several county and elected officials, including Harford County executive Barry Glassman joined the Nichols family for a formal ribbon cutting event just before the auction opened the doors for its first sale.

Following the sale, the Nichols Family also hosted a special customer preview and happy hour event for guests in celebration of Bel Air Auto Auction's 70-year history.

The new location includes a new 75,000 square foot, 10-lane auction facility and a 50,000 square-foot Vehicle Enhancement Center that includes a mechanical shop, body shop, recon center, paint booths and imaging center.

It is located in Riverside Business Park at 4805 Philadelphia Road, Belcamp, Md. 

 



AuctionVcommerce releases new 'basic' online clerk training simulator version

ROCHESTER, N.Y. - 

AuctionVcommerce announced Friday it has introduced a new basic version of its Online ClerkTraining Simulator released in 2015.

In recent years, auctions using the original program have requested a modified solution with minimal investment, according to the company.

“My original vision included the idea that auctions would validate the certification with a new pay structure that would ultimately serve to increase clerk retention, and improve morale. However, it seems that we still have an issue with perception,” AuctionVcommerce president and co-founder Kelly Bianchi said. 

“When you are selling the future, your collateral is simply your belief. I have come to realize that I need to meet the auto auction industry halfway,” she explained.

The new Online Clerk Basics training aims to elevate perspective clerks to a skill level more comparable to a digital version of the auctioneer, according to AuctionVcommerce.

The program includes a guided tutorial, and only requires that participants complete the first level of the full certification training.

Training covers all of the fundamentals for performance, along with additional features that are designed to teach perspective clerks how to effectively incite participation.

“Millennials will not be nostalgic about the way things used to be,” Bianchi added. “We have to re-invent the traditional auction. The industry has not defined standards, or expectations when it comes to online execution. First, and foremost, we need stability.”

Additionally, the new program is also cheaper for auctions. It is roughly half the price of the original version, according to AuctionVcommerce.

Online Clerk Basics is now available on the AuctionVcommerce website.



New RMS, Manheim co-listing tool gives dealers access to open-sale Nissan, Infiniti vehicles

ATLANTA - 

Announced Monday, RMS Automotive and Manheim has given independent U.S. dealers a new co-listing capability that provides access to all open sale vehicles listed on RPM, the Nissan and Infiniti digital sales platform powered by RMS Automotive.

The open sale inventory on RPM will be simultaneously listed on Manheim.com and OVE, Monday through Friday, from 3 p.m. – 6 p.m. (EDT).

With the new offering, both the exposure of the manufacturers’ inventory to Manheim’s digital buying audience is increased, and independent dealers have access to a larger selection of high-quality used vehicles.

Dealers can choose from inventory located nationwide across the Nissan and Infiniti dealer network, and can conveniently move the inventory with transportation options provided by Ready Logistics.

“Obtaining vehicles as cost- and time-efficiently as possible is the name of the game for dealers in today’s competitive used-car market,” Nick Peluso, president of Manheim Digital Marketplace and RMS Automotive said in a news release.

“By offering open sale listings to the largest base of online buyers on Manheim.com and OVE, we can offer dealers early access to thousands of sought-after, pre-auction Nissan and Infiniti vehicles,” he explained.

With this solution, open sale inventory found on the Nissan and Infiniti RPM platform is now included in dealers’ Manheim.com and OVE search results.

Using single sign-on authentication, Manheim and RMS Automotive directs dealers to Nissan and Infiniti’s private label website where they can evaluate, bid, buy and make offers.

“In addition to enabling buyers to access an unprecedented selection of inventory, this digital solution helps manufacturers’ like Nissan and Infiniti drive transaction speed and efficiency by offering the right vehicles to the right dealers at the right time,” Peluso added.

RMS Automotive said Nissan and Infiniti have conducted closed franchise sales and grounding returns on the RPM technology platform with the company since May of last year.



Manheim prepares to gift 5th car to Calif. auto shop students

ATLANTA - 

Manheim California recently announced that it has planned another trip to Valley High School in Santa Ana, Calif. for the third year of its “Flip this Car” project, which shows auto shop students how to recondition cars and auction them off to expand their understanding of career options in the automotive industry.

The program provides students with both the opportunity to learn real-world skills and raise money to support their auto shop programs.

Manheim California developed the program with High School, Inc., a non-profit organization established to help prepare students for the 21st century workforce.

“When you can connect the best of what your organization has to offer with a need in the community, that’s where magic happens,” Manheim California general manager Tom Wemhoff said in a news release. “We’re thrilled to be continuing our partnership with High School, Inc. and working closely with our dealer partners to continue inspiring the next generation of the automotive workforce.”

Manheim California connects with its dealer partners to secure vehicles for the auto shop students and donates the total sale price back to the school once the vehicle is bought at auction.

All proceeds have gone to support Valley High School’s auto shop program for student’s new tools and resources.

Additionally, students can watch the sale from their classroom via Simulcast.

“From the first time I saw the hopefulness and pride in the students’ faces as their first vehicle crossed the auction block, I knew we had something special,” said Wayne Hefft, Manheim’s client solutions executive who has led the partnership for the last two years. “We’re proud of the success these students have achieved and look forward to continuing this great program.”

Manheim California has completed the "Flip This Car" project with four cars, earning a total of $14,000 in two years.

Hefft is currently working with Valley High School and dealer partners to secure the project’s next vehicle, according to Manheim California.

“Our goal at High School, Inc. is to set students up for success in the workforce by enabling them to build the skills and knowledge they need,” added program Director, Shaylin Johnson. “The unique partnership we have built with the Manheim team is exemplary of how local businesses can get involved and help drive students toward brighter futures.”



Units from as far as California and Wisconsin heading for Texas

LAWRENCEVILLE, Ga. - 

While the September used-vehicle sales projection might not show it, dealers are certainly bracing for additional sales stemming from hurricane-damaged vehicles that need to be replaced.

And it’s reflecting in how prices are moving, according to the latest this week’s Black Book Market Insights report. Editors found that prices for both compact cars and crossovers were strong as dealers, especially in Texas, search from long distances for inventory that hasn’t been touched by floodwaters.

“Nearly all segments besides luxury vehicles and sporty cars performed well last week as buyers from Texas bid up prices to acquire replacement vehicles,” said Anil Goyal, Black Boo’s senior vice president of automotive valuation and analytics, who also is one of the many experts on the docket for , which begins on Nov. 13 in Palm Springs, Calif.

Based on volume-weighted data, Black Book determined overall car segment values decreased by 0.19 percent last week, much better than the average weekly decrease of 0.42 percent in values spotted during the previous four weeks.

Editors said, “Compact cars performed the best while sub-compact, midsize, and full-size car values were strong as well with no depreciation last week.”

Again looking at volume-weighted information, Black Book found that the overall truck segment values — including pickups, SUVs, and vans — decreased by 0.10 percent last week; an improvement compared to the average weekly decrease of 0.19 percent in values noticed during the previous four weeks.

Subcompact crossover and compact crossover/SUV segments increased the most among truck segments by 0.46 percent and 0.39 percent, respectively.

Turning next to what Black Book’s representatives noticed in the lanes, observers watched Lone Star State dealers hunt for vehicles. Apparently Texas dealers are looking to auctions in Georgia to find what they need.

“It was a mixed bag at the auction this week. It seemed like there was no in-between as the reps were either selling everything or selling very few. The lanes that were selling were heavily influenced by the Texas online buyers,” said Black Book’s lane watcher stationed in Georgia.

Black Book’s representative stationed in Texas added, “The sales percentages and prices are high as you would expect after Hurricane Harvey. Dealers say that they will have to be diligent in their inspections for the next few months as damaged or damage repaired vehicles will be available.”

Even on the West Coast, hurricane impact can be seen as Black Book’s observer in California mentioned, “Several dealers stated that they are buying vehicles that will be loaded up and transported east to Texas.”

It’s also happening in the Midwest since Black Book learned from Wisconsin, “While local buying is not great, the internet sales are doing quite well due to the replacement vehicles being purchased for Texas.”

Also out of the nation’s midsection, Black Book’s other anecdote from Illinois mentioned, “There was strong bidding here, and the prices continue to hold their own. All in all a pretty good fall market.”



Behind the numbers: 10 charges seen most often at auction

ATLANTA  - 

After a 30-day window of studying auction sales and their associated auction charges earlier this year — a period that included more than 347,000 vehicles sold by clients — AutoIMS was able to determine the 10 most common charges spotted in the auction marketplace.

And while some, like sale fees, transportation and detailing, were reported quite often, the use of many were relatively infrequent.

“Most vehicle remarketers are responsible for minimizing losses for their organizations, and with an average total charge amount of $385 per vehicle, the most successful clients have found ways to keep auction fee management simple and easily reportable,” AutoIMS said in a  that was released this month.

“Auctions benefit by spending less time on reconciliations, and more time on higher-value activities, to serve clients,” it continued.

According to the whitepaper, the top 10 most common auction charges are the following (along with percent of vehicles bearing those charges).

Sale fee: 84 percent
Transportation: 62 percent
Detail: 43 percent
Appearance/reconditioning: 27 percent
Promotional expenses: 20 percent
Material handling: 15 percent
Live Internet sale: 13 percent
Mechanical work: 12 percent
Miscellaneous: 11 percent
Recon: Keys: 9 percent

AutoIMS pointed out that there are 87 different auction charges in its platform, but most are used sparingly. In fact, only five charges had a usage rate higher than 20 percent.

“While the platform allows for 87 different auction charge types, most clients strive to limit the number in use to simplify the accounting process,” AutoIMS said.

The company later added: “AutoIMS was designed to add transparency and efficiency while offering the flexibility to serve many different indus­try segments, yet auction charges might be an area with too much flexibility.

“Luckily, savvy consignors and auctions have worked with the AutoIMS Client Experience Team to establish guidelines and customizations to enhance their ability to manage charges and other financial reconciliation steps.”

Behind the numbers

Granted, some of the low usage rates for some services/charges — appearance/reconditioning at 27 percent, live Internet sales at 13 percent and mechanical work at 12 percent — might seem surprising.

But there’s more than meets the eye. And the  addresses that. 

Asked what is driving those seemingly low numbers, AutoIMS vice president Joe Miller said there’s a “broad array of Inventory” involved, including many salvage units, so it is possible it’s just low numbers being requested for these services, he said.

“The other thing to think about is just the nature of the data — and large part of what the paper itself addresses — which is the charges might not all mean what they say. Certain reconditioning might just always be assumed and bundled in to the sale fee or detail categories, for instance,” Miller said in an email.

“The ‘live internet sale’ fee, while very common, may not be assessed on every car that sells to an internet bidder depending on the deal each client has struck with each auction,” he said. “These charges are heavily relied upon by the clients to reconcile sales, but at the end of the day, they are used in a very inconsistent and fragmented way.

“It’s one of the reasons I felt comfortable showing this graphic; it’s more a commentary on ‘how’ clients are being charged rather than ‘what,’” Miller said, referring to a graphic in the report detailing the top 10 charges. 

Meanwhile, the transportation charge was one of the higher ones at 62 percent.

“The majority of commercial consignment are ‘pick-up’ orders, where the auctions retrieve the vehicle (as opposed to ‘drop-offs’),” Miller explained. “So it makes sense that it is a common charge, even though the auctions often subsidize this expense.”

After delving into data from two years ago, this figure is also consistent with 2015, Miller said.



Want to show off your auction photos in our NAAA issue?

CARY, N.C. - 

The  — which is held in partnership with the National Remarketing Conference at — is just around the corner.

And Auto Remarketing is celebrating the annual event and the auction industry with our .

One of the special sections in that magazine (our Nov. 1 edition) is the annual “Auction Life” photo spread, where we invite NAAA-member auctions to submit photos of daily auction life from the past year.

If you and your auction(s) would like to participate, please have photo submissions emailed to AuSM staff writer Chris Hart-Williams at [email protected] no later than 5 p.m. (EST) on Oct. 2. 

If you are sending large or multiple pictures, a zip file or a photo-sharing site might work better. An additional option is to upload them to our . Either way you send them, we need to receive them by 5 p.m. (ET) Oct. 2. 

These photos can run the gamut: We want to see everything from the daily business operations and sales days to the life and fun that occurs at your auction (for example: cookouts, special events, holiday parties, team-building activities, etc.)

They will need to be in high-resolution, JPG format.

Please send captions, if they are available, as well. And while we strongly encourage these photo submissions, we won’t be able to print every photo. However, as a bonus, we will also be running some photos in our digital version of the magazine as an Online Extra.

If you need ideas on what kind of photos to send, last year’s photo spreads can be found here:

Thank you, and see you in California for the convention!



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