Auctions are the lifeblood of the independent dealer. It’s the place where most stock is sourced and often the first port of call if a vehicle isn’t selling.
BCA sells a million cars in the UK annually at 24 locations around the country, with full online access for every sale through BCA Live Online. The firm’s MD for UK remarketing Stuart Pearson said: “As sourcing good quality stock becomes ever more competitive for dealers, identifying and acquiring those retail quality cars is essential.”
Cartotrade.com, the trade-to-trade website set up by the former management team of Autotrade-mail, offers its members a monthly subscription of £40 and no buying or selling fees and turns away around 30% of applicants who don’t meet its trade standards.
Co-founder Kevin Watson said: “Cars are bought, sold and delivered without the dealer leaving their screen. A third of cars are sold within three hours of being listed.”
Today’s auction house is also a digital hive and dealers looking to adopt best practices should be looking at how remarketing companies integrate digital to make it easier to buy and sell.
As well as enabling auction participation online, BCA operates bespoke e-auctions and its ‘Bid Now & Buy Now’ channels provide digital purchasing 24/7. Searches and alerts can also be set up using its ‘Auction View’ feature.
Cartotrade dealers receive tailored notifications of stock within minutes of the cars being advertised, using tools such as a live CAP valuation, while linking with Movex for delivery.
Aston Barclay is developing its digital offering and has already released its Buyer App, which can be downloaded from the App Store, to improve the speed and ease with which buyers can connect to used stock via their smartphone.
Online auction company Autorola is launching its INDICATA real time used vehicle market insights system, which includes a module for single site used car businesses of up to 25 cars. Featuring an appraisal tool, dealers can determine the demand and pricing for a part exchange in their locality.
Jon Mitchell, Autorola UK’s group sales director, said: “This is helpful on a make and model of used car that a dealer isn’t familiar with. If it’s in high demand locally the dealer can immediately offer more for the part exchange and secure the deal. If the part exchange isn’t desirable then they can price the vehicle down. It will also help when determining which used cars to purchase to put on their forecourt.”
Images and descriptions
In the same way dealers present vehicles in the best possible light, with a variety of images and extensive descriptions on their own websites to appeal to buyers, they must do the same when disposing of stock at auction.
BCA vehicles include a standard set of digital images (and video appraisals for light commercials), a vehicle appraisal report, an independent multi-point check carried out by the AA on vehicles under eight years old and a trade-only pricing guide.
Watson said: “Detail is key as far as buying dealers are concerned, right down to the smallest of scratches – it shows you know this vehicle well and you are presenting an accurate description. Images are valuable too; many online buyers take comfort from seeing what they might be buying. Don’t be afraid to say what money you would like to get too, but perhaps leave the door open for discussion.”
Alex Wright, managing director of Shoreham Vehicle Auctions, said: “Always declare any problems with the car, however small, as this also helps build trust as the buyer will bid on that car according to its condition. Don’t ever consider auction as a way of getting rid of your problem vehicles – this will come back to bite you.
“Always include any supporting paperwork or information with the car so when the auctioneer is selling it he can list it on the rostrum – this includes standard paperwork such as service history, spare key, MOT, condition of tyres and number of owners.
“Dealers must work with their auction partner and put their name on their vehicles so the buyer knows where the car is coming from” he said. “The more trust a dealer can build in its disposals, the higher the demand for those cars.”
Buyers should check stock online before visiting an auction and the vendors who are selling it, Wright advises. If using an online auction with no charges for online bidding, he urges dealers to understand the buyer fees.
Martin Potter, Aston Barclay’s group operations director, said: “Every auction will run a valeting service and we would recommend every car is cleaned prior to running through the auction hall. The better a car looks, the more chance of it maximising its value. Ensuring the car has all its documentation intact – such as MOT certificate and service book fully stamped along with spare keys – will also help maximise its value.”
Sourcing the right stock
Pearson warned: “The non-retail part-ex cars at your dealership, or the sales team that was over-optimistic in order to clinch a deal, can lead to issues if not dealt with promptly and professionally.”
Wright added: “If you have a part exchange that you want help valuing, your auction contact should always be happy to help you to ensure you set the correct reserve to give the vehicle the best chance for it to sell first time.”
BCA’s Dealer Pro is its cloud-based iPad tool, designed to help dealerships manage part-exchanges including standardising appraisals and providing market valuations. Guy Thomas, group head of product for BCA, said: “Dealer Pro is all about getting information out there as early as possible to help the whole disposal process. This speeds things up by around five days when compared to the way things used to be done.”
Customer research carried out by Aston Barclay found quick and efficient access to stock was one of buyers’ most important criteria when purchasing used vehicles.
Potter said: “Buyers can do a lot of homework before they even visit a physical auction. Stock is always available to view online prior to a sale, plus watch lists can be set up online to automatically identify specific stock you are interested in.”
Sometimes dealers need to locate a specific vehicle to meet a customer’s needs or trade out of a car that’s not selling. Cartotrade’s ‘request a car’ advert feature sends requests to a tailored audience of professional dealers who are likely to have such a car in stock.
Watson said: “We see a lot of successful responses to these adverts. The more specific your advert, the better to pin your customer down to anything that is essential (colour, transmission etc). Be flexible with budget – making a few hundred quid less is better than making nothing, and potentially secures an incremental retail customer for repeat purchases.”
Dealers need to assure themselves their auction partner has a support network to ensure processes run smoothly and can handle issues which may arise. BCA offers dealers a ‘MyBCA’ card which can include access to online bidding, payments and account management and the facility to leave commission bids. With a field team of buyer development executives and its customer services department, BCA also provides partner finance to help fund the purchase of vehicles at its auctions.
Aston Barclay’s team supports dealers by helping set a reserve price, promises payment in 48 hours to improve cash flow and runs its own transporter fleet that includes combining collection and delivery to save on costs.