CARY, N.C. -

Record auction sales volumes are expected this year (9.7 million units) and next (10 million) thanks to continued gains in commercial consignment, according to National Auto Auction Association chief economist Ira Silver.

In a July webinar, Silver explained that unlike dealer consignment — a metric that more immediately reflects the new-car environment, which has slowed — commercial consignment growth is still moving higher.

It tends to follow new-vehicle sales trends from prior years — which, in this case, were stronger.

Dealer consignment may decline, Silver said, but it won’t be enough to counteract the impact from volume-heavy commercial consignment.

“Those cars are out there,” he said during the webinar, referring to commercial consignment. “They’ve got to come back sooner or later — and they will. And there’s enough of them out there to offset the small decline in dealer consignment that I expect.”

This is exemplified fairly well, appropriately enough, right in the middle of the U.S.

At Missouri Auto Auction, general manager and co-owner Kevin Brown says commercial volume is up, while dealer volume is somewhat flat in the Columbia, Mo., lanes.

Off-lease cars are coming back, he said. So are off-rental units from Avis Budget Group. Volume from commercial accounts like ARI are up.

And that’s a good thing for an auction. More cars, more opportunity for business.

But it also underscores some important reminders, said Brown, who is also president of the ServNet independent auction group.

“The big hurdle right now is just making sure you're staying up on the compliance. It’s really, really important to our commercial accounts — the compliance side of it — and we’re just one leg of that compliance,” Brown said. “So, with the CFPB dictating how the financial companies have to do everything — which I’m not saying is wrong — they rely on the auctions to make sure that’s happening, as well.

“You take a redemption, for example. Let’s say you have a repossessed vehicle. And they’re letting the auctions and the repossessors be part of that process. And we have to make sure that we do a great job for that financial institution,” he said. “ …  if we’re not treating their customer with respect and handling them the way they should be handled, and there are complaints, it’s going to be a problem not only for the auction, but it’s going to be a problem for that financial institution, as well.

“So that is one hurdle that everybody needs to stay up on … You’ve just got to make sure that you’re doing everything you can to protect that financial institution and the person that is financing the car. That’s really what it’s all about,” he said.

This message of compliance has also been a consistent part of ServNet’s efforts as an organization, Brown said. He pointed to ServNet chair Patty Stanley as a “big, big advocate of compliance” who has dug deep into researching the issues to help the group’s members stay compliant. 

For more on this issue, see Auto Remarketing's recent story on how auctions navigate the complex world of compliance.