Under an agreement reached with their respective captive finance arms, Ally’s SmartAuction is listing the off-lease vehicles of Nissan and Infiniti.
The agreement between SmartAuction and the two captives (Nissan Motor Acceptance Corp. and Infiniti Financial Services) was announced Tuesday.
The off-lease cars are listed on SmartAuction after first being offered to Nissan and Infiniti dealers.
Dealers registered with SmartAuction can then bid on those vehicles before they are transported to physical auctions.
“We’re thrilled to work with NMAC and IFS to make Nissan and INFINITI vehicles available on SmartAuction nationally,” said Steve Kapusta, vice president of specialized asset management for Ally, in a news release.
“After a successful pilot last year, we’re excited to be a part of their remarketing strategy,” he added.
A podcast with Kapusta, recorded at Used Car Week in November, can be found below.
Industry adapts to off-lease gains
The deal between SmartAuction and the captives from Nissan and Infiniti arrives as off-lease volumes continue to be a big story in the used-car industry.
Companies in the wholesale space have adjusted or fine-tuned their strategies to accomodate what remains a rising pool of cars coming out of leases.
For instance, GM Financial is expanding its volume footprint nationwide — recently opening distribution centers in the Detroit area, Maryland and New York — to help move more vehicles across Southeast and Midwest markets that wouldn't normally get as many off-lease returns, says GM Financial vice president of remarketing, auction operations John Sullivan.
And dealers are feeling the impact, too. During the Q&A portion of the latest AutoNation quarterly earnings call, chief executive Mike Jackson was asked about the vehicle mix among the off-lease volume and whether it was in line with consumer demand.
“That is absolutely off-balance,” Jackson said. “But the way you have to think about it is, these are vehicles that were put in the marketplace three or four years ago, and the shift had already started towards trucks back then and has only accelerated since then. So it’s not ideal, and that then will be reflected in the pricing.
“But still, it’s a value point for consumers and a volume of choice that they never had before.”
As far as the exact numbers, Cox Automotive is anticipating 3.89 million off-lease units in 2018, which would be up from 3.59 million in 2017.
While that’s more than an 8-percent hike, the growth in off-lease volume is slowing down a bit.
Off-lease volume in 2017 was up more than 16 percent, following a more than 22-percent gain in 2016, according to data in a Cox Automotive presentation.
Still, 2018 is expected to be a record year for lease returns, according to Edmunds.
Case in point: There were 4 million vehicle leases written in 2015, the company said in its 2018 Automotive Industry Trends report, which was a 12-percent hike.
The following year was the peak, with just under 4.5 million lease originations, before the market trimmed down below 4 million again in 2017, Edmunds said.
Staff writer Chris Hart-Williams contributed to this report.