CARMEL, Ind. -

More of the consignment at ADESA has moved toward the commercial side, and that has led to an increase in the revenue that company generates from each unit — whether that car is being sold online or in the auction lane.

That’s according to comments made by Jim Hallett, chief executive officer of parent company KAR Auction Services, during KAR’s third-quarter earnings conference call on Friday.

ADESA pulled in $441.6 million in revenue during Q3, up from $351.4 million a year earlier.

Total revenue per unit was $603, compared to $561 in the third quarter of 2015.  Cars in the auction lane generated an average revenue of $758 (up from $699), with online-only revenue per unit climbing from $110 to $127.

Overall volume for ADESA was up 17 percent (6 percent excluding acquisitions). Physical volume climbed 15 percent (1 percent excluding acquisitions) and online-only volume was up 23 percent.

And while dealer consignment was up 10 percent overall, it was actually down 4 percent when acquisitions were excluded.

Dealer consignment’s share went from 52 percent in Q3 2015 to 50 percent in the most recent quarter.

“With the shift in mix to more commercial vehicles, we saw RPU increases both at the physical auctions and in our online-only venues,” Hallett said during the call. “And you may ask, ‘what's contributing to the lower dealer consignment numbers?’ I would say, there are a number of things that I would point to.”

For starters, Hallett said, lease penetration has gone up, so the number of trade-ins dealers take has likely gone down. Dealers are also seeing static retail used-car sales, he added.

“And I would also draw your attention to the comp that we had from the previous year,” Hallett said. “We had a difficult comp, where last year, the volumes were up 10 percent in the third quarter. And, as we talked about previously, we are likely seeing a high number of commercial vehicles displacing some of the dealer consignment vehicles in the lanes.” 

That shift Hallett referred to appears to be happening industry wide. 

In a July webinar, National Auto Auction Association chief economist Ira Silver explained that dealer consignment may decline, 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.”