Dealers & Lenders See Benefits to Integrating Repo Vehicles with Online Auctions

Over the past decade, there has been a significant shift toward migrating the wholesale vehicle remarketing process online. There are many reasons for this growth.

The online channel offers numerous benefits for the remarketing process, such as reduced expense and time to sale, less need to transport vehicles, travel cost savings to and from the physical auction and greater visibility for vehicles via a nationwide marketplace.

Due to the popularity of online auctions within the dealer community, there is also a need for additional wholesale inventory sources to augment the numbers of vehicle turn-ins, off-lease and off-rental vehicles that make up the majority of the wholesale market.

The variety of consignors selling vehicles through online auctions is impressive, ranging from dealers, to rental car fleets, motor credit companies, banks and more.

But one area, in particular, that is gaining incredible traction is the sale of repossessed vehicles online.

The reasons for this delay were numerous. There had been concerns about the “commercial reasonableness” of selling repossessions online,  title issues often slowed the sale process down and the remarketing approach largely relied on physical auctions picking up vehicles directly from recovery yards, leaving little opportunity or financial incentive for online sale.

More recently, however, recovery companies have begun to adapt their business to the new technology and data-driven environment expected by their customers. With this change, recovery companies have begun to capitalize on new opportunities to restore their status as “full service” providers who can help lenders both recovery and remarket their collateral.

One of the biggest opportunities in the repossession industry right now is the adoption of online auction companies as a valued partner for achieving this goal.

In addition, by integrating both online auctions and recovery assignment software packages into the process, agents can now make and receive recovery assignments and remarket vehicles at one location. For recovery agents and lenders alike, the most compelling part of this model is time saved — the average recovery-to-liquidation time online is just 15 days — including the redemption period (typically 10 days) — less than half the time of the traditional physical auction model, according to a recent survey conducted by Credit Union National Association.

The many benefits to consignors, ranging from reduced cost of capital and vehicle depreciation to placement within a nationwide inventory, are invaluable for anyone that is streamlining their automotive business to remain competitive in this current economy.

Partnerships with recovery agents and technology providers benefit dealers directly as well. Although many dealers may have existing relationships with local recovery agents, bringing online auctions into the mix not only provides an additional and broader source of used vehicles to choose from, but also opens the possibility of sourcing nationwide.