a profit focused game plan for better auction purchases
TRANSCRIPT
Majd G. SabouraDirector of Wholesale Business Development, vAuto
A Profit-Focused Game plan For Better Auction Purchases
Poll #1
How has your auction sourcing process changed in the last 12- 18 months? (please select one)
A. We’re going to more auctions than we used to.
B. We’re buying a few more cars online than we used to.
C. We don’t go to physical auctions; we only buy online.
D. Our process really hasn’t changed.
The wholesale landscape is becoming increasingly
complex
Wholesale Market TrendsIncreasing supply
NAAA Member Auction Volumes
Monthly Lease Penetration Rates
Source: Edmunds.com
Wholesale Market Volumes
Off-Lease Units Driving Supply Increase(units in millions)
Wholesale Market TrendsPrice Volatility Or A New Normal?
“Almost everyone is expecting that prices will decline. To get to what we’ve expected for 2016, we’re going to have to have a steeper fall off.”
- Thomas Webb, Chief Economist, Manheim
Retail Market TrendStrong Market—Record-Setting CPO Sales
Retail Market TrendMore “near-new” used vehicle inventory
Retail Market TrendMargin Compression Continues
Two Take-Aways From Trends
NEED TO “BUY RIGHT”TO MAXIMIZE
FRONT-END GROSS
INCREASEDINCREASEDCOMPETITION
FORTHE
AUCTION VEHICLES
“RIGHT”
Two Common Auction Complaints
1. Tough To Find Right Cars
2. Tough To Buy Right CarsOn The Money
16
With more wholesale supply why is it so hard to get the right auction vehicles at the
right prices?
Two Responses To Auction Sourcing Challenge Look Harder Look Smarter
Experience/Instinct Driveno Not using tools and technologyo Not using market/scarcity reports
Preference For In-Lane Purchaseso Visiting 1 or 2 auctions – maybe?
Look Harder, Dealers
More effort/time with less rewardo On average review 100 to buy 1o 40+ hours a week
researching/prepare
More frustration/greater risk o Need to replace sold inventory with
somethingo Greater risk of aged inventory (e.g.,
buying wrong car/over-paying)
Look Harder, Dealers
Look Smarter, Dealers Less time researching, more
time buying 85% discipline / 15% instinct Increased focus on right vehicle for
their market—not cars they’ll never buy
Look Smarter, Dealers Online emphasis for efficiency
Expand Auction sources – on average 7-10 auctions
More online vs. in-lane – 60/40? 70/30?
Look Smarter, Dealers Data-driven, disciplined
Assess profit up-front then condition/history
Stick to data/metrics to guide profit-focused purchase
Look Smarter, Dealers Total Gross Mindset
Complete view of all data points Sell more, faster, to combat margin
compression Give up front end gross to gain total
gross (F&I, etc…)
26
Biggest complaint today is overpaying for vehicles at auctions!
Look smarter dealers redefine overpayment…
Look smarter dealers redefine overpayment…
Biggest complaint today is overpaying for vehicles at auctions!
Crystal Ball• More technology used in lanes and online• Shift toward online purchasing than in-lane• Ongoing margin compression• Continued pressure to increase auction effectiveness and
efficiency
Poll #2How has your front-end gross profit changed on auction-purchased vehicles in the past year?(Please select one)
A. It’s the same.
B. It’s worse than it used to be.
C. It’s better than ever.
D. I’m not sure.
Poll #3How can vAuto help you develop your auction game plan? (Choose all that apply)
A. Send me an auction sourcing best practice e-book.
B. Demo vAuto’s latest auction sourcing tool.
C. Contact me for a consultation.
D. I appreciate the offer. I’m good for now.