Today’s independent dealer has more inventory sources available than ever before. From your typical physical auction to salvage auctions to trade-ins and beyond, the more you know, the better prepared you are to take advantage of every opportunity.
One inventory source that’s seen a lot of growth in the past five years is the online auto auction. Let’s talk about why they’re a great option for an independent auto dealer, and how you can find the right auction for your needs.
Growth of the online auto auction
Between the evolution of technology and the effects of the COVID-19 pandemic, the online auction has expanded over the past several years. COVID restrictions forced independent dealers to migrate from auction lanes to the online marketplace. While things are largely back to normal at physical auctions nationwide, online vehicle auctions still work—for buyers and sellers alike—and they’ve gone from a temporary necessity to an important part of the inventory sourcing portfolio for dealers of all kinds.
Why buy from an online auto auction?
There are a number of benefits that online auction sites have over a physical auction. First, they offer similar service offerings and fee schedules to in-person auctions. Post-sale inspections, transportation services, and reconditioning are typically offered. Fees tend to be similar—in fact, some hybrid and online auctions offer promotions you won’t find in-person. And the financing lines that you use in-person (including AFC floorplan financing) are typically also available for online purchases—meaning your first experience will be smooth, even if you haven’t purchased online before.
Also, online vehicle auctions offer greater flexibility than traditional physical auctions. Online, a dealer can browse vehicles and purchase from anywhere, as long as there’s an internet connection. It’s more convenient and more efficient than having to be at a specific place at a specific time, allowing dealers to buy more freely without interrupting their daily routine.
There’s more variety available online than in-person, too. A physical auction is limited to the vehicles on their lot that are ready to run in the lanes on sale day. But many online auction sites allow sellers to sell from their own lot—meaning a greater range of vehicle options. An online auto auction can also speed up the purchase process for dealers. With live online auctions, dealers can instantly purchase vehicles when they identify a need and fill the gaps on their lots.
What are some of the online auto auctions dealers can purchase from?
If you’re eager to get started, there are many online options for dealers to purchase inventory. Many of the major physical auctions now offer options to purchase online. But there are also a number of specialized online-only platforms to choose from, each with their own unique benefits. Let’s look at a few.
OPENLANE US (formerly BacklotCars)
The all-new OPENLANE US brings a fully digital and highly efficient dealer-to-dealer platform featuring a 24/7 “bid-ask” marketplace, along with exclusive access to off-lease inventory not available on other marketplaces. OPENLANE US offers seamless integration not only with AFC floorplans (or floor plans), but also with vehicle inspections and transportation.
OPENLANE Canada (formerly TradeRev and ADESA Canada)
With their mobile app that mimics the physical auction setting, OPENLANE Canada allows dealers in Canada to launch and participate in 45-minute live online auctions in real-time, directly from their device. Within the marketplace app, users can complete the entire transaction, including inspection, title and arbitration services, instant live bids at appraisal, transportation—and floorplan financing (or “floor plan financing”) through AFC or other providers. OPENLANE Canada is focused on transparency and speed—learn what you need to know to make a purchase decision, and buy inventory fast.
With over 75+ physical locations nationwide running 1-2 live online auctions a week, CarMax Auctions bridges the gap between the physical and online auction. With over 75 locations across the country, the chances are good that for most dealers, there’s an auction site nearby—and since they report a sales rate of 97-100% at every auction, most cars get sold the first time. CarMax owns all the cars they sell—no selling on consignment—and they offer the ability to arbitrate on pickup, so there are no major mechanical surprises. CarMax offers a variety of payment options, including dealer floorplans from providers like AFC, check, certified funds, and cash.
ACV Auctions utilizes the capabilities of modern technology to change the way online auctions are run. They offer condition reports, transparent pricing, and in-app transportation as is standard in the industry.
But they also include a number of tools to help dealers determine whether the car on sale is the car they want. ACV’s Audio Motor Profile (AMP™) captures a high-quality recording of a vehicle’s engine, meaning a dealer can listen to and analyze it remotely. And with Virtual Lift™, dealers get a high-definition image of the undercarriage of the vehicle, so you can examine it without having to climb underneath—or even be in the same area code. ACV’s Fast Action Panel shows the live online auctions you’re watching, bidding on, and about to win all in one place, making the dealer’s auction experience easy to manage in the moment.
Online auction sites can be a priority inventory source
While the online auto auction is a relatively new concept, it’s one that dealers should feel confident in exploring and using. Any source, if properly vetted, can provide access to amazing inventory for your dealership.
Disclaimer: Use of auction sources is subject to third-party agreements. AFC does not guarantee the ability to use any auctions and examples are for illustrative purposes only. Dealers should consult their own advisors to make independent business decisions regarding inventory sources. AFC, OPENLANE Canada, TradeRev, and BacklotCars are all part of the OPENLANE (formerly KAR Global) family of brands.