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Used cars: Changing face of auctions

Car manufacturers and their franchised dealers have long enjoyed a close relationship with vehicle remarketing firms.

The benefits are two-fold and at opposite ends of the business.

Firstly, and most importantly, the likes of Manheim and BCA stage single-marque closed auctions on behalf of manufacturers.

Guaranteeing dealer access to the best quality used stock, it’s the common sense way of encouraging the public to favour the franchised network over the local independent retailers.

Remarketers can also provide a convenient disposal route for unwanted part-exchange stock.

Older or high-mileage vehicles are transported to open auctions and bought by independent traders.

But a new threat to that business is coming from online operators and one in particular, Full Auction, has recently secured a high-profile new client.

Nationally, only around 200 franchised dealers have used Full Auction since it launched last July.

Peugeot’s retail group Robins & Day has been the biggest customer so far, shifting 1,500 vehicles through its website.

But now sister operation Citroën Retail Group is ending its relationship with BCA and switching to online disposal with Full Auction.

Cutting out the middleman

“We took the decision as we felt the system better reflected our needs and requirements for our future aspirations within the Citroën Retail Group,” said David Peel, chief executive of Peugeot Citroën Retail UK.

“We will concentrate on the commercial benefits of this policy and seek to maximise our return on the trade vehicles we dispose of.”

Full Auction’s appeal is its simplicity. Only franchised dealers can sell cars on it, only VAT-registered independent traders may bid and buy.

It’s cutting out the middleman and the need for costly transportation of cars to and from the auction hub.

Barry Cooper is MD of Cooper Solutions, which owns Full Auction.

He said: “Once you’re registered, it’s easy to use with simple admin and we only charge the seller so there’s no buying fee.

"We even have a delivery service so the buyer knows what it will cost for him to get the car, postcode to postcode.”

Cooper said the disposal business had changed over the years. “Franchised dealers have gone from having a cozy relationship with a few local independent traders, to using large remarketing firms staging physical auctions.

"But we think online is the future.

"We are a small alternative disposal route and it’s very early in the game, but this is going to be huge. We’ve got 1,000 traders registered with us from a standing start last July.”

The other end of the remarketer’s business – closed auctions for dealers to source quality used cars – has also been through an evolution.

The days of daily rental companies buying cars, using them then selling direct to the trade have gone.
 

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