How to Remarket Vehicles Using Online Auctions

The evolution of online auctions has been driven by two converging economic forces: the ever-expanding online marketplace and a demand for efficiency in an increasingly sophisticated industry. Every day it takes to sell an out-of-service unit is a day in which that vehicle is not only depreciating in value, but no longer earning money for its RAC. For rental agencies, online auction sites offer the opportunity to begin selling units “upstream,” while they’re still on rent. Whereas the traditional vehicle remarketing process—from end of service to the sold vehicle at the new buyer—could take 24-45 days, an online sale can be completed in one to 10 days. “You can sell the car and get the proceeds while the engine oil is still warm,” says Steve Kapusta, director of operations for GMAC’s SmartAuction. Further, units sold online don’t incur the cost of transportation to an auction site. And, just as important, the Internet allows sellers to reach out to an exponentially larger pool of potential customers. Each week, millions of buyers log on to online auction sites such as OPENLANE, SmartAuction and Manheim’s They’re joined by transportation companies, many of which have partnered directly with the auctions to bid for new business. Auction sites can give shipping quotes from competing transportation companies instantly. They are becoming more sophisticated as well, arranging shipments of sold cars together for multiple buyers and moving beyond their traditional range. This makes it economical for sellers to move smaller batches of cars to a greater number of locations, and farther away. David Pilcher is the executive vice president of Indianapolis-based Arelco Inc., the U.S.’ second-largest National/Alamo franchise, and has been with the company since 1975. Of all the changes to the rental car industry he has witnessed, online remarketing stands out as a game changer. “We could see early on that Internet sales would have as big an impact on the wholesale market as on retail,” Pilcher says. “We’ve seen the evolution and we have not been surprised.” For those new to the concept, here’s a step-by-step guide:

1. Pick Your Provider

Objective: Find the site and price structure that works for you. Strategy: Weigh your options. Listings are free, in most cases, but each of the sites listed earlier differs in fees charged to seller or buyer when a deal is closed. Some are online only; others have evolved out of brick-and-mortar auctions. Pilcher’s Take: “We maintain a balance between our direct sales team, physical auctions and online auctions. It’s the same for the various sites. We want to be actively involved wherever we can. You can have the same vehicle in more than one place online, but you’d better make sure you’ve got the control and structure to support that strategy.”

CONTINUED:  How to Remarket Vehicles Using Online Auctions
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