When Rocky Hauhe launched Legacy Auto Auction last year, he aimed to keep three practices followed by the two previous generations of the family-owned auction business.
First, get rid of hassles and fees; conduct sales with handshakes and respect; build trust in condition reports; and use a fair scoring system that all parties can understand. Hauhe finds these old school values relayed by his grandfather and uncle still apply in the age of digital, real-time auctions and transactions.
“We want an auction where dealers are friends and work together for the greater good,” Hauhe said. “We learn from the past to improve the future.”
Hauhe draws those values from his grandfather Floyd Hauhe, who started St. Louis Auto Auction in 1959, and then later ran it with his son and Rocky’s uncle, Dutch Hauhe, until 1993 when it was sold to Manheim. Dutch Hauhe then oversaw the Manheim operation until he retired in 2006. Floyd Hauhe, who was also a founding member of the National Auto Auction Association, retired in 1991 and passed away in 2010. Dutch passed away in 2018.
Their deaths motivated Rocky Hauhe to start Legacy Auto Auction in April 2021 after he owned and ran a dealership for 10 years called Pinnacle Automotive, which he still owns. He looked at potential properties for five years before finding one in early 2020. But the COVID pandemic delayed the build out and opening.
Now with 30 years of experience since childhood, Rocky Hauhe has fulfilled a longtime plan to restore his family’s legendary reputation in the St. Louis area auction business.
“Friends stop in here every week to tell Floyd and Dutch stories,” Hauhe said. “I grew up in the business starting out as a 10-12-year-old helping the body shop getting cars prepped, detailing, and observing operations firsthand,” he recalled.
Among the principles Rocky has learned from his grandfather are to treat all customers the same and respect their finances.
“Whether you sell 300 cars or one car, the customers are equally important,” Hauhe said. “You do business fair and honest and it keeps people coming back. This industry has sometimes gotten shady through the years, where no one trusts anyone, everyone is a number, and there is no value in handshakes. We’ve gotten away from the old values businesses used to run on.”
With that firsthand experience and observation, Hauhe now sees his auction as a place to address the problems and challenges he sees in the industry.
Hauhe cites the increase in fees associated with auction transactions. “The fees have gotten ridiculous. Everyone complains about them. We’re not trying to be a Manheim. We’re trying to service our market and help dealers purchase vehicles without paying corporate prices. We just want to bring back that local handshake auction where everyone is on a first name basis.”
Flat Fees, Shared Profits
So far, about 32,000 dealers have registered with Legacy as buyers to purchase vehicles online through a simulcast.
Legacy charges a flat $250 auction fee for buyers and a $99 flat fee for sellers, regardless of the prices of the vehicle. “That way people can come in and buy retail ready cars without giving up all their profit before it ever leaves the auction,” he said.
Buyers and sellers can typically save anywhere from $5,000 to $10,000 per month on auction fees, depending on the volume, he said. “We cap auctioned vehicles at 200 per week. We keep it small. If we get bigger, it will cost customers more money and we lose that one-on-one experience.”
The location serves customers mostly in a 100-mile radius in Missouri and Illinois. Transport fees have risen as well, with fees from Nashville, for example, rising from $250 to $400 per vehicle due to fuel costs, increased demand, and COVID-related driver shortages, Hauhe said. “Even if you pay more for a pick-up, it’s not as quick as it used to be.”
Tech & Transparency
To be transparent, Legacy tries to stay out front in resolving disputes by relying on a third-party vendor for condition reports. The auction uses R8tr, a nationwide CR company and vehicle inspections service, that Hauhe also owns as a separate entity.
The company belongs to Auction Edge, a major national independent auction network. “It was an expensive jump, but it’s what we felt like we needed to do to service dealers.”
The company keeps a small business atmosphere and uses Auction Edge’s Pipeline platform to complement old auction approach with more efficiency. “We let the tech do the work and streamline the process,” Hauhe said.
Legacy uses vehicle raters onsite equipped with a mobile app to assess any vehicle issues or damage. Each vehicle gets 30+ photos, which are included on the mobile app listings.
Another way Legacy departs from standard auction practices is it avoids a scoring system for vehicles. “On the CR side, no one understands a 5.0 versus 4.5,” Hauhe said. “You can’t achieve a defined answer. We won’t do a grade, so the buyer is not getting any false information.”
The Legacy reports accurately list and notate assessment and flaws, but don’t rank or score the vehicle. Instead of such an overall condition, the reports list each aspect noted about the vehicle as fair, good, better, or excellent.
“We’ve bought cars with a 3.0 condition that should have been a 2 or 2.2,” Hauhe said. “We give dealers all info they need to make their own decision on the true condition of car.”
Legacy also has moved into the digital marketplace with simulcasts from the lanes that allow remote, real-time bids from any location. “We go live from the lane so buyers can bid as if onsite.”
But the operation ensures the traditional way is always an option alongside the digital.
“A lot of the old school dealers still want to walk around and touch the cars themselves,” Hauhe said. “Some can’t trust what they see online. They’ve been burned so many times, based on volume."
“We do all the stuff big guys do without all the fees and expense passed on to dealers,” Hauhe added. “We want dealers to still make money on the car after they have taken it out to the auction. We want customers to leave here not upset or broke.”
Hauhe looks forward the fourth generation of his auction family now that his 10-year-old son runs the golf cart for drivers and shows enthusiasm for the operation. He wants to keep it a two-lane, 200-vehicle per week auction.
“I would like to stay as a boutique family owned and family feel auction,” he said. I don’t want to get to six, seven lanes. We want to service local as well as national buyers in a way dealers can retain profit on vehicles rather than corporate salaries, and have my son take over and grow the family.
Originally posted on Vehicle Remarketing