Vehicles sold at public car auctions often are beaters that have been around the block many times. In contrast, used vehicles offered at wholesale auctions are newer and in better shape.
But the public is barred from attending wholesale auctions. They are limited to dealers and their agents, at least in the U.S.
“Wholesale and public auctions in Europe used to be separate, but no more,” says Cheryl Munce, a consultant for remarketing service provider Alteso.
She’s not suggesting U.S. auto auctions welcome the masses, but she proposes a hybrid “whole-tail” system. It would allow online car shoppers to go to dealership websites to see what wholesale vehicles are going up for bid.
Alteso is exploring the development and use of technology to enable that, Munce says at the National Remarketing Conference in Las Vegas. “We’re talking about it conceptually.”
Currently, car shoppers don’t know what’s available at wholesale auctions. With Alteso’s proposed system, they would know. But restrictions would apply.
For instance, consumers wouldn’t join in the bidding. Nor would they know the wholesale price of vehicles.
However, if they wanted to buy a particular auction vehicle they saw on a listing, they would notify the dealer who would then bid on it for them. Delivery could occur the next day.
“It’s that simple,” says Mark Buffa, Alteso’s vice president-business development. “This gives dealers tools to put that car in front of the consumer who wants to buy that car.”
It essentially puts the retail transaction ahead of the wholesale transaction, Munce says.
“Dealers buying vehicles at auction wouldn’t be guessing what people want. They’d know.”
She adds, “Dealers readily buy shiny used auction cars in good condition, but a customer may not mind if a car is scratched or dented if it's for, say, a kid going off to college.”
Getting the technology up and running first requires clearing a few hurdles, she says. For instance, dealers would need to make it clear to customers that an auction car is not in the store’s inventory. Dealers would need a process to assess the condition of a car and determine a profit margin before getting too far along.
In some states, including New York, dealers cannot sell vehicles they don’t possess, Munce says. “But where and when it makes sense, this is the way to go.”
Some conference attendees play devil’s advocate.
“A customer may think they are getting one thing, and then get another,” says one attendee. Another says, “The only thing that would scare me is double-selling a car.”
It’s not all worked out yet, Munce acknowledges. “We’re just getting you thinking.”
