AM Online

Are online car auctions the key to dealer profits?

By Debbie Kirlew

When used car stock was particularly scarce during the economic downturn, dealers held on to non-franchised vehicles for their own retail operation. While profiting from rather than simply disposing of non-franchised stock is now standard, many dealers achieve both through online auctions.

Online auctions provide a fast and straightforward way to dispose of part-exchange vehicles, but also appear to be stimulating vehicle repatriation as well as proving to be a good revenue source. The digital era means dealers can off-load part-exchanges cost-effectively while still making a profit.

Milton Keynes Hyundai and Milton Keynes Kia

Remarketing partners – Dealer Auction.com

After switching from a handful of local traders to Dealer Auction.com, the remarketing process at these two sibling dealerships has become so successful that managing director Steve Turney has opened a specialist remarketing site. Two staff manage the disposal of its non-franchise part-exchanges, making on average £200 more per unit and disposing of about 100 cars per month.

“Our first car sold via the online auction realised £600 more than we wanted, so we changed the company policy to dispose of vehicles purely through this channel. We had viewed the part-exchanges as simply cars we had to get out of, but now it’s a profit generator,” said Turney.

He introduced his remarketing strategy two years ago and the disposal facility has been operating since January last year. Additional benefits include the easing of congestion at both sites.

“Everything runs extremely smoothly,” said Turney. “I think we have a good reputation with the traders, which certainly helps; our descriptions are accurate, so they know they can trust us, and if there is ever a problem, which is rare, they know we will sort it out immediately.”

 

Blackshaws, Alnwick, Northumberland (single site, dual-franchise Nissan and Suzuki)

Remarketing partners – Autotrade-mail, Dealer Auction.com and Buying Buddy

Online remarketing enables Blackshaws to focus on their franchises while still making a profit from non-franchised vehicles.

Retailing about 50 used cars at any one time, 600-700 cars are remarketed a year earning an average of £100 per unit. Used car manager Alistair Protheroe uses three online disposal methods, in order of preference: Autotrade-mail, Dealer Auction.com and Buying Buddy.

Autotrade-mail, a database of dealers who can buy and sell cars among themselves, operates on a monthly subscription and provides the most cost-effective channel for Blackshaws. The £35 fee per car sold charged by the Manheim-owned Dealer Auction.com can soon add up if several cars are disposed of this way. Buying Buddy matches cars to buyers, but, with a £120 fee, it is used by Protheroe for specialist and more expensive vehicles.



Click here for digital marketing best practice and procurement insight

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest


Login  /  Register

Comments

  • R Connor - 15/07/2014 14:19

    I would not buy a car from RRG if they were the last place around

    Reply as guest

    Login  /  Register