Wholesale, Retail & Financial Leaders Navigate Evolving Used-Car Market
When asked by the moderator what she thought had changed the most in the wholesale world since she began leading Ford’s remarketing business, Linda Silverstein pointed to the Internet.
In fact, she admitted that a decade or so ago, she wasn’t so sure this online auction environment would maintain traction.
“I’ve lived long enough to find out that I was wrong,” Silverstein said during Wednesday’s joint keynote session of the Re3 event and National Remarketing Conference at Used Car Week. “But I think a lot has changed to make people feel comfortable buying online.”
Things like more disclosures and detailed vehicle pictures have helped, she said, as well as auction partners offering various services that can help the customer feel more secure about buying in the online wholesale space.
“Those things didn’t exist when I said (online auctions) wouldn’t take off,” Silverstein said.
And, of course, the online wholesale environment certainly has taken off. But as important as the online element is, Silverstein would like to see a balance between the online and in-lane maintained, imploring auction partners to “keep a critical mass” in the physical lanes.
This was just one of many topics Silverstein and her fellow panelists touched on during their keynote address. She was joined by Brent Huisman of Santander Consumer USA, Bill Butterfield of TD Auto Finance, Stephanie Williams of SunTrust Bank and Jack Anderson of West-Herr Automotive Group.
Going back to Silverstein’s point on buyers becoming more comfortable in the online wholesale space, Anderson was asked about his vantage point as a wholesale buyer and what makes him feel more comfortable about buying online.
He emphasized a good condition report, grading system and buying from someone with whom he is comfortable and knows. Anderson said he typically buys between 10 and 15 percent of his used inventory online.
Another arena the dais explored was compliance issues, a topic which was initially talked about by Butterfield as he discussed the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency.
Huisman later would make an interesting point in his closing remarks, saying that some of the compliance regulation on the dealer side of the equation hasn’t yet made it into the auction world, but he believes it will.
“Be prepared for that, please,” Huisman said.
The panel also took a deeper dive into overall wholesale strategy, as well. Williams shared a bit about SunTrust, noting that its remarketing strategy has evolved over the years, particularly since the recession.
While discussing other elements of her company’s practices, she mentioned how SunTrust balances in-lane versus online remarketing. Williams said that everything goes through the physical lane at least once, then if it’s not sold there, it goes online. And if there is still no sell, it goes through the lane again.
In her closing remarks, Williams also stressed the importance of “flexibility in remarketing strategies.” She implored attendees to stay connected with what consumers want, which obviously influences the needs of dealers.
Lastly, in his final takeaway, Butterfield illustrated a very strong picture for the auto market: the seasonally adjusted annualized rate for new-vehicle sales will likely hit 14.5 million this year, then reach 15 million in 2013, risk indicators are low, and short-term interest is expected to be low through 2015.