After making a big splash earlier this month with news that Cars.com founder and former president Mitch Golub had joined its board of directors, DRIVIN appointed a veteran of KAR Auction Services and the co-founder of CarBuyCo as its vice president of partnerships.
DRIVIN, a recently launched online solution that aims to help dealers secure pre-owned cars at wholesale prices, named Leslie Vander Baan to the position.
Vander Baan will report directly to DRIVIN chief executive officer Kayne Grau and will head up all developing, managing and expanding partnerships throughout the business.
Her background includes starting CarBuyCo, a KAR company that provided a virtualized car-buying program, and eventually expanded from a pilot operation to 50 locations in less than a year.
She also founded Automotive Consignment, a consignment-based automotive buying and selling service.
Before moving to DRIVIN, Vander Baan was with Automotive Finance Corp., another KAR company.
“As a recognized leader and visionary in the auto sector, I am extremely happy to have Leslie within our company. She brings with her an extensive and impressive background in the automotive industry that will be a key component in our growth over the next year,” said Grau.
“We look forward to drawing on her expertise as we expand into new markets,” he added.
Vander Baan added: “DRIVIN is changing the face of the used car industry by helping dealers source and manage their inventory faster and more efficiently. The opportunity to positively impact dealers within one of their most critical profit centers is substantial. I'm thrilled to be joining the dynamic team at DRIVIN during such an exciting time.”
Through its research and focus groups in recent years, Cars.com has found an interesting and extremely prevalent pain point among consumers who are trying to sell their cars.
And it's perhaps a misconceived perception by the consumer, at that — but one that gives dealers an opportunity to boost their used-car operations.
“What (consumers) overwhelmingly said was, they felt there was really only one retail location for them to sell a vehicle to … and that was CarMax,” said Joe Oliveri, senior director of product management at Cars.com.
“So, outside of CarMax, they really didn't know that the dealer down the street was willing to buy their vehicle for cash without any obligation to buy another car,” he said. “So I think the biggest pain point has been, from their perspective, that they don't have an option outside of selling it themselves through Craigslist or going to CarMax.”
And for many consumers, Oliveri said, selling a car can be a scary proposition.
That's where an upcoming product from Cars.com comes into play.
Auto Remarketing sat down with Oliveri at the company's Chicago headquarters last month to talk about Sell & Trade, which Cars.com hopes to launch nationally by the end of the year.
At the time of the interview, Cars.com had been piloting the multi-tier product for roughly six months.
As Cars.com explains it, the aim of one tier is “capturing the attention of car shoppers by promoting that dealerships will buy used cars for cash as consumers shop for a replacement vehicle,” with the other tier honing in on “building a dealership's car-buying program as car owners choose from multiple ways to sell.”
The company shared some statistics that illustrate just how important this segment is for dealers.
For one, almost one out of every five customers plans to divest a vehicle in the next six months, the company said.
The 2014 “Establishing Credibility Through Online Sell and Trade” study from Cars.com and C+R Research indicates that 42 percent of consumers will consider selling their ride to a non-CarMax dealer; however, just 10 percent follow through with that.
Not to mention, of the consumers who consider trading their car in, less than half actually make good on it, the same study found.
Why Cars.com is entering this space
Oliveri explained the company's approach to the consumer selling dynamic in more detail.
“It makes sense from our perspective to get into the space because we've been a shopping- focused site for many years. We rolled out Service last year, and now we've got Sell. So: Shop, Sell, Service. It rounds out those options for the consumer, which is really good from our perspective to continue to put the consumer first. So, anywhere within that ownership cycle, they can come to Cars.com,” he said.
“So, it was a bit of a natural extension for us on the consumer side. And then from the dealer's perspective, we know that they need more used cars,” Oliveri explained. “Profitability has shrunk over the years at the dealership, but we know that the used-car department continues to see stronger profits than, say, new. And anything we can do to help them acquire more used vehicles, the better.”
He said that Cars.com took the approach of letting the consumer “divest of their vehicle in the means that best suits them.”
If the shopper wants to sell their car on his or her own, there’s the Sell It Yourself channel that Cars.com has had for quite some time. But if the shopper wants to sell to a dealer and set up a face-to-face meeting with the dealer, there's that option, too.
Then, the third option is called QuickOffer, which is a mid-tier feature of Sell & Trade.
Through QuickOffer, the consumer punches in detailed information on his or her vehicle, enters a VIN, posts up to 12 photos, answers various questions and then submits the car to be sold along with their contact information, Oliveri explained. That is then sent to up to four dealers for competitive bidding.
“We see the majority of consumers going down that path,” Oliveri said of option No.3, “so it tells us that consumers want convenience. They want transparency, in terms of getting multiple offers on their car. And they certainly like the idea of doing it all, really, from their mobile device.”
The consumer can download an app to do just that. The app has a VIN scanner and uses native features of the phone. Oliveri points out that about 60 percent of traffic for product has come from the mobile device.
Lower acquisition cost & a new audience for dealers
A big piece of this is to lower vehicle acquisition costs for dealers, Oliveri said. “Ultimately, that's what we want to do: provide more cars to dealers and at a lower cost,” he said.
He added: “The other piece is, we're giving them access to an audience they typically never have access to. And that's a real big piece of this product. They typically only have access to consumers who are looking to shop for cars, and now (there's) a whole new audience that they have access to. And it's real consumers looking to sell cars, so they typically did not have this before.”
They remind dealers that it's more of a vehicle acquisition product than a trade-in product.
“And there's a pretty big nuance between the two. So, we're not pushing this as trade-in, trade-in, trade-in; it's much more about acquiring cars,” Oliveri said.
And the message to the consumer reflects as much: it focuses on being a way for consumers to sell their cars.
Speaking of which, Cars.com is currently doing some online promotion via keyword purchases and targeted banner ads to drive traffic to its sell channel in the test markets. The goal is to begin the more mass consumer marketing in early 2016.
Dealer pain point
On the dealer side of the vehicle acquisition dynamic, the biggest pain point has been “access to good cars,” Oliveri said.
“This is a way for them to access a new audience that they typically wouldn't have access to, and really they're going to have to have access to. There's a lot of other companies in the space that are vying for consumer audience in terms of purchasing cars,” he added, referring to such players as Beepi and Carvana that source vehicles directly from consumers.
“Dealers are going to have to get into this space, and they really welcome Cars.com doing so because you have the strong brand and already a good reputation with dealers.”
Dealer logistics
So, how does the dealer price the car with this product?
Oliveri explains that there's an app that allows them to put a number on the car. They're notified when they have a car to put a bid on, and through the app, they can log in to access MMR, Carfax, AutoCheck, plus Black Book value, and they are able to see all the photos.
And before the consumer starts down the path to sell his or her car, Oliveri said, they have to enter year/make/model/trim. The consumer is provided a Black Book value, which helps “set the expectation,” he explained.
“And we heard this from dealers in our research. They said that they would like the consumers to have a frame of reference, so that when they get a number from us, they at least have an idea of what that number is and what the deal is worth,” Oliveri added.
In closing, Oliveri had this point to add: “It has to be the right dealer in order to purchase the product. You need to have a process in place in order to handle these vehicles as they come in.”
The consumer, particularly with the QuickOffer path, is expecting multiple offers — and ones that are fair.
Dealers are in control, Cars.com emphasizes, but through the Black Book value the company provides the consumer, Cars.com is educating the customer on what the car is worth so that expectations are set.
Former president and founder of Cars.com Mitch Golub has joined the board of directors at DRIVIN, a recently launched online solution that aims to help dealers secure pre-owned cars at wholesale prices.
Golub, also an investor in DRIVIN, was president of Cars.com for 17 years before retiring from the company last fall.
“Mitch is an experienced leader and pioneer in the automotive and digital industries and we are thrilled to welcome him to DRIVIN's board of directors," said Kayne Grau, chief executive officer of DRIVIN and a former chief technology officer at Cars.com.
“His experience and counsel will be invaluable across all areas of our business as we grow quickly, creating disruption across the used-car market, adding dealer partners and launching new markets. I know he will have an important and positive impact on our company,” Grau added.
Golub, currently the president of the MFG Digital investment and consulting firm, said: “DRIVIN brings together data-driven technology with a highly personalized service model to help dealers find and buy the right used cars, at the right price, for their local market.
“The industry is ready for a new way to find and source quality, used vehicles. I'm happy to be joining the board of directors at such an exciting time.”
Another big industry move announced Monday morning came from Hyundai, where Dean Evans was named chief marketing officer.
The Appraisal Lane (TAL), a trade network and communications platform for used-vehicle dealers, announced Tuesday it has hired TrueCar’s former vice president of dealer development.
Taking on the position of vice president of sales for TAL is Kenneth Potter, bringing experience from a variety of other well-known organizations, including positions such as the general manager of CarMax, the vice president of sales for Greenlight.com, the vice president and general manager of CarsDirect.com, and the chief revenue officer at SureSale.com.
Andrew Iorgulescu, TAL’s co-founder and president, as well as the former co-founder of OPENLANE, welcomes Potter to his team.
“Ken has built lasting relationships in the industry, with a proven track record of successfully growing sales and driving expansion efforts for businesses like ours,” Iorgulescu said. “He joins our team at a critical time, since we are actively rolling out our platform to targeted automotive markets offering significant growth opportunities. It’s an exciting time for the team.”
TAL’s real-time used-vehicle trade network gives dealers within its available markets the ability to post pre-owned inventory and receive cash offers within 10 minutes that remain good for seven days or 300 miles. At present time, the company’s services are available in Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee and Texas.
“I’m excited to join The Appraisal Lane team and I look forward to the possibilities for growth in – and enhancements to – our industry,” Potter said. “Based on our analysis, over 36 million vehicles will be appraised this year, but until now, the wholesale used-car appraisal and acquisition process was inefficient. We’re transforming this process by sourcing wholesale experts to provide dealers with the most accurate offers quickly and easily through a fully mobile-optimized platform. The end result is improved business operations and, ultimately, more car sales for dealers.”
Stay tuned to further editions of Auto Remarketing as we delve further into the operations behind The Appraisal Lane.
Auto Remarketing has learned that General Motors and GM Financial are consolidating their remarketing organizations in the U.S. under the GM Financial brand.
GM Financial sent an overview of the consolidation to Auto Remarketing on Wednesday, in which it explained the alignment in great detail. GM Financial will continue to sell vehicles at Manheim, ADESA and independent auctions, as well as through the GMFDealerSource.com online channel.
The latter is a platform built exclusively for GM dealers where they can track upcoming maturities, get payoff quotes, ground returning cars and buy off-lease units.
The company will have closed, open and open online sales; there will be 33 closed sales locations where GM franchised buyers can make purchases.
Sale dates and locations can be found at auctions.gmfinancial.com and gmonlineauctions.com.
As far the reasons for the change, the overview notes that consolidating their remarketing organizations “allows us to better serve dealers with consistent inventory and more volume at auctions across the country.”
It also pointed out: “Unified operations and marketing efforts under one brand will create operational and cost efficiencies for both companies and will enhance the ease of doing business for our dealers and auction partners.”
GM Financial assumed the responsibility for both organization’s remarketing sales operations on July 1, which are led by Dan Heinrich, senior vice president of remarketing solutions at GM Financial, the company said. Brad Bollman, who is GM Financial’s vice president of remarketing solutions, will continue to report to Heinrich and will assume responsibilities for all realigned auctions
They added that GM Remarketing retains the responsibility for the rental account relationships, distribution centers, and administrative functions; these report to Jennifer Costabile, who is the general director of rental sales, marketing, advertising and used-vehicle activities at General Motors. Dan Kennedy will continue to report to Costabile.
July 1 was the effective date for all changes with auction locations and reporting structures, the company noted.
“GM Remarketing and GM Financial Remarketing were operating as separate organizations and, as such, had a large footprint of participating auctions across the country with varied vehicle offerings, different marketing efforts and individual operating procedures,” said Heinrich.
“By combining GM Remarketing and GM Financial Remarketing, we’re able to consolidate our auction footprint while providing more vehicles at each auction, increasing operational efficiency by aligning our platforms and standards, and offering consistent vehicles to our dealers,” he added. “Ultimately, we’re offering dealers a unified and simpler buying experience supported by even better inventory.”
The overview also explains how this move will impact dealers, listing these benefits:
- Consolidating to fewer auction locations will create a broader offering of year, make and model mix for dealers.
- Working with one company under one unified brand simplifies the buying experience for dealers.
- It allows for continued and consistent quality standards on vehicles.
Additionally, the overview mentions these overall benefits to consolidation:
- Consolidating the number of auctions, thus aggregating inventory, allows for more vehicles at each auction.
- Consolidating the number of auctions improves multiple efficiencies for GM and GM Financial.
- Consolidating operations eliminates redundancy
- Centralized marketing efforts allow us to target the right buyers for the right vehicles and enhance collaboration with auction partners with a focus on dealer satisfaction.
- Presents a single message to auction partners and allows for continued quality standards.
- Leveraging GM Financial’s existing sales teams will improve dealer engagement at auctions.
Costabile added: “To better serve our GM dealers, General Motors and GM Financial are taking a 'One Company' approach to remarketing GM-branded vehicles.
“With GM and GM Financial joining forces, we will provide our dealers with an outstanding remarketing experience. This strategic move will provide operational efficiencies, improved dealer inventories and increased strengthening of the GM and GM Financial brands,” she added.
Bollman, noted: “The GM Financial and GM Remarketing teams have been working together over the past several years and recognized the opportunity to align operations and improve overall remarketing operations.
“We’re proud of the GM Financial brand and are excited to continue building visibility for both ourselves and GM. GM and GM Financial have each brought our strengths to the table, and by combining GM company car and rental vehicles with GM Financial’s vehicles in similar sales environments, we will provide a more balanced dealer experience and continue to strengthen the GM Financial brand,” he added.
Stacey Petras, assistant vice president of remarketing solutions, at GM Financial said: “We’re really excited about this influx of inventory on GMF DealerSource because of the purchasing opportunities it will provide dealers. Currently, GMF DealerSource offers a limited amount of vehicles available for purchase, and they’re regionally concentrated in the Northeast.
“A dealer in Texas wanting to purchase from GMF DealerSource has a difficult time sourcing inventory, especially if he or she doesn’t want to pay vehicle transportation costs. Later this year, the volume of vehicles on the site will jump from hundreds to thousands,” Petras added. “Adding GM’s company and rental vehicles to the site will increase buyer traffic and bidding activity. It’s going to be a big opportunity for GM Financial and GM dealers.”
Auction Edge and vAuto finalized a partnership on Monday to enable integration of EDGE Pipeline and EDGE Simulcast with vAuto Genius Labs’ AuctionGenius.
The companies highlighted the partnership enables wholesale buyers to use AuctionGenius as they prepare for and participate in live physical and online sales at independent auctions across the country.
EDGE Pipeline can provide wholesale buyers access to more than 100 independent auctions across the country, allowing them to search inventory across multiple auctions and enter live simulcast sales.
With this integration, AuctionGenius dealers can now use EDGE Pipeline to help them be more effective and efficient researching and preparing for online and physical auctions. The integration also can allow buyers to see all of the critical information they need to make an informed decision while participating in a live sale.
Additionally, the AuctionGenius mobile application for iOS and Android will now display run lists and inventory details for inventory at Auction Edge partner auctions.
“Our partnership with Auction Edge continues our mission to give dealers all the information they need to more easily evaluate and purchase vehicles from the widest array of wholesale auctions,” said Randy Kobat, vAuto vice president and general manager.
“The fact is, today’s highly competitive market requires dealers to go further to find the right wholesale vehicles,” Kobat continued. “Combining the power of AuctionGenius with the breadth of independent inventory available through EDGE Pipeline is a huge win for wholesale buyers.”
Auction Edge president Scott Finkle added, “It makes perfect sense to work together with AuctionGenius. In the end, we are both looking to empower dealers with all the tools and information they need to make informed buying decisions at auctions.”
Dealers can use AuctionGenius’ “heads-up” display, which can combine vehicle condition and valuation information from top industry sources, to evaluate and purchase wholesale vehicles instantly via live and online auctions.
In addition to EDGE Pipeline's network of independent auctions, AuctionGenius integrates with the nation’s largest wholesale auction marketplaces, including Manheim, ADESA, SmartAuction and other independent auctions.
For most auctions, no-sales mean less money, and the numbers of units not selling as they cross the auction block tends to grow as we approach the summer months.
That said, Manheim is now offering what they call a “second chance” for these vehicles.
The company announced the nationwide rollout of 2nd Chance Sale, a mobile app that allows auction customers to access and make offers on unsold vehicles after they are off the auction block and out of the lanes.
“Our goal is to invest in areas within our auctions that make it easier for our customers to conduct business,” said Janet Barnard, president of Manheim North America. “With the 2nd Chance Sale app, we are delivering on our commitment to use technology to redesign and improve processes that offer customers faster, smarter ways to grow their business.”
Here are the details: After an auction ends, unsold vehicles will immediately be listed and available on the new app, which is found within Manheim’s overall mobile application. Buyers can also access it on the Web.
Then, buyers can view and sort vehicles that suit their needs by criteria such as year, make, model, condition reports and auction lane. Customers can make offers directly through the app.
“This not only offers customers a second chance to quickly fulfill their inventory needs, but also enables sellers to immediately market their unsold vehicles to buyers on auction day instead of waiting for them to run again another week or be listed on OVE.com,” Manheim management pointed out.
On top of offering customers more buying opportunities and sellers more changes to turn vehicles, Manheim also announced last week it is working to improve vehicle delivery time for buyers.
It has introduced a new gate pass process, through which the company can deliver gate passes to customers digitally using Manheim.com.
Customers can use the “My Purchases” tab on Manheim.com and can now download, view, print or email a gate pass directly to transport carriers, without having to spend time waiting in line on auction day to collect passes.
“New services such as our 2nd Chance Sale app and gate pass process not only provide an easier, more consistent customer experience, but also enables our employees to deliver the type of service our customers have come to expect,” said Barnard.
If you or anyone on your dealership’s staff is a newcomer to online wholesale buying and selling, the folks at ADESA have four recommendations to help you ease into this increasingly important avenue of remarketing.
In a post to the company’s Overdrive blog — titled “Just Starting in the Online Auction World? Here’s What You Should Do First” — ADESA’s Keith Crerar outlines four suggestions for dealers just getting their feet wet in online auctions.
The first tip listed in the blog emphasizes the importance of grasping the basic differences between online auctions and brick-and-mortar auctions.
“The main difference between online and in-lane auctions is the ability to touch, smell and feel the vehicle you are purchasing. You’ll use condition reports and photos to educate yourself about a vehicle sold online, though it might not be that same level of detail that a hands-on experience in the lane would give you,” Crerar said in the post.
“But, there are so many advantages to online sales: More inventory available, better protection for your purchases through arbitration and the flexibility to bid from anywhere are just a few of the positive parts of buying online,” he added.
The other three tips and more advice about online auctions can be found in the full blog post on Overdrive.
The AutoWurld subscription-based wholesale network now has transportation services available.
The company has partnered with United Road, adding auto transport to the list of third-party volume-priced support services that AutoWurld member dealers receive at a discounted rate.
That list also includes warranty and inspection services.
The launch of AutoWurld was announced in early March, and the company has since added Prime Auto Care and One Guard to provide those warranty and inspection services, respectively.
“Last year, United Road impressively delivered more than 3 million vehicles for over 10,000 unique customers,” said AutoWurld founder and chief executive officer Troy Mack.
“With a network of over 6,000 company owned and carrier partner trucks that operate out of numerous terminals across North America, we are pleased to extend United Road’s diverse service offering, highly trained driving professionals, expansive geographic footprint, proven safety record and patented technology to our members at a discounted rate,” Mack added.
Liza Nuernberg, United Road’s director of business development for the Midwest, said: “One of our key differentiators is our proprietary OVISS (Online Vehicle Information Shipping Solution) management logistics information system.
“Our patented technology gives customers real time GPS order visibility, event reporting and car delivery confirmation,” she added. “The status of a customer’s auto transport is never more than a click away. We have a trusted reputation in the industry and are pleased to partner with AutoWurld.”
ADESA has rolled out several enhancements to its website that aim to make buying and selling through ADESA.com easier.
Among the main changes listed by the company include the following, as listed by ADESA in its news release:
— Direct link from the homepage to inventory eligible for ADESA Assurance, enabling customers to quickly view off-lease and rental vehicles eligible for a 30-day, no-questions-asked return guarantee
— Watch List improvements, including new Watch List filtering menus on the website and the mobile-optimized site; the ability to remove Watch List vehicles directly from the Search Results page and more
—Search enhancements, including making salvage units searchable using free-form text search; Specialty search page; the addition of Condition Report icons to search results to indicate if a report is available; a new default sort order for search results showing nearest inventory first and more
—Vehicle Details page enhancements, including the addition of AutoGrade pop-up windows; seller invoice links and new window sticker section
— Enhancements to the ADESA Market Guide trim level search capabilities
“We frequently speak to our customers for feedback on how we can enhance our website and offer more online solutions to help them run their business more efficiently and more effectively,” said ADESA president and chief executive officer Stéphane St-Hilaire. “We will continue to develop and implement new features and additions that streamline their experience and create more value for our customers.”
