Online sales of used vehicles in the wholesale market likely exceeded 2 million in 2018, as remarketing technology made it easier for dealers to evaluate, bid, and buy vehicles beyond physical auction locations. The sales came from upstream remarketing, simulcast sales, and online listings.
The three digital channels were fed by more than 1 million in upstream sales, another 1 million from simulcast sales, and more than 100,000 from static sites.
"There are many innovations taking place in the auction industry today due to the need for dealers and remarketers to gain access to inventory anytime, anywhere," said Anil Goyal, executive vice president of operations for Black Book. "Physical auctions will remain an important part of the industry as many professionals continue to want to see vehicles in person for their inventory needs. However, dealers and remarketers are now leveraging online auctions more as a way to build even more precision into their inventory needs for the overall dealership as well as specific retail and end-user demands."
An array of mobile apps from Cox Automotive's Manheim, KAR Auction Services ADESA, and other remarketing technology providers is driving the growth, experts told Vehicle Remarketing.
Digital sales are counted from three areas, including so-called upstream sales from digital portals with vehicle listings offered to franchise and independent dealers. Upstream sales from KAR's ADESA.com and TradeRev, Manheim's RMS Automotive, and others accounted for more than 1 million vehicles in 2018, estimated Tom Kontos, KAR's chief economist.
Other digital channels include simulcast sales, where an online buyer wins a bid on a vehicle that is appearing in the lanes at a physical auction. Those sales from Manheim Simulcast, ADESA's LiveBlock and others could add close to another 1 million for 2018, according to Kontos.
The last category comes from sales of vehicles that are listed on a website before or after the physical auction. There were more than 100,000 of these sales from Manhiem's OVE, ADESA's DealerBlock, and others in 2018, estimated Kontos.
"All three of those pieces are growing," Kontos said. "Because so many cars are coming back these last few years as off-lease units, the upstream channel probably has had the biggest growth, because so many of the cars lent themselves to being sold that way. Many vehicles still lend themselves to being remarketed through physical auctions, especially those vehicles that require reconditioning."
Manheim's digital sales saw a healthy boost in December, said Zach Hallowell, vice president of Manheim Digital Marketplace. Digital-only transactions increase 20% from December 2017, while Simulcast transactions increased 8%.
"Dealers are increasingly buying wholesale vehicles in digital channels because the cost and time efficiencies can't be beat," said Hallowell. "New tools are also giving them more confidence in buying online, with the ability to capture 360-degree views of the car and clear disclosures around key dealer concerns; better vehicle information through enhanced condition reports, more data and advanced imaging; and purchase protection guarantees that make it easy for them to return vehicles."
Originally posted on Vehicle Remarketing