When will car auction sites reopen, how different will they be and will car auctions remain digital for August? – Magazine of car dealers
As UK car dealerships reopened in June, the story was different in the world of car auctions.
Doors to auction rooms were closed during the lockdown, with major players holding online-only sales.
Many dealers have voiced concerns on the Auto Dealer Forum that sales during the foreclosure have been “crazy” with cars making massive amounts of money and reporting problems getting the cars sold to the forecourt. dealers.
But with auction houses being such a key part of the auto trade, will they ever reopen or has the scales shifted to an exclusively digital future? We asked the big players in remarketing to understand what was going on.
When will physical auction sites reopen?
Most auction companies will continue to sell online for the foreseeable future and at least in August. All of the companies we spoke to said they were assessing the situation week by week.
Cox Automotive says “it is constantly reviewed” while G3 Remarketing says it is “not entirely satisfied that the safety of the team and our customers is protected by opening the room to a large gathering of people” . We recognize that other centers have already opened their doors, but since the government always advises against mass events, we believe that having a full auction and welcoming over 250 physical buyers really doesn’t follow this advice.
BCA COO Stuart Pearson said: “All sales currently remain online for commercial account holders only and we follow the latest government guidelines to protect our staff, customers and suppliers. We will seek to restart physical auctions if necessary.
Aston Barclay Managing Director Martin Potter told the car dealership: “Currently our sites are open for collection, payment and preview of pre-sale inventory. Return of physical buyers and cars driven in stores. hallways is constantly under review, as we believe as a business leader that we should not be encouraging gatherings of people at this time to keep the “R” number as low as possible. ” [The R number represents how many people to whom one infected person can spread the virus.]
However, G3 has indicated that it is considering introducing one-on-one visitation appointments to help buyers who wish to visit and evaluate vehicles prior to a sale.
How different will the sites be when they reopen?
The actual car purchase will be the same but just like your local supermarket or pub it will be a little different.
G3 says they set up a strict one-way system in the parking lot via reception and in the lobby, then returning through a newly installed gate to complete the loop back to the parking lot. In addition to hand sanitizing points, he has also created “safe auction hot spots” where bidders can keep a social distance but stay in the eye of auctioneers.
Cox Automotive claims to have all necessary safety precautions in place and in some cases go beyond requirements. “The feedback from team members has been overwhelmingly positive,” he said.
Aston Barclay allows a limited number of buyers on site prior to an auction to view vehicles. The company says that each person must sign an online form and confirm the sale they wish to see, and that all buyers must report to the auction reception and are only allowed to enter after the process has been completed. registration completed. It also works by appointment, and deliveries and collections are spaced out throughout the day.
Are all sites going to reopen or have online auctions put the future of some physical sites in danger of shutting down?
Not all of the businesses we spoke to answered this question, but those that did insisted they would reopen and largely for the same reasons.
G3 Remarketing believes that physical auction houses have “a huge influence in the market,” and said it “will continue to invest in our auction room offering for buyers to see, touch and listen to vehicles. “. We recognize that there is a need to update and redesign physical premises to embrace this evolving market and this is something G3 will continue to do in the years to come.
Martin Potter of Aston Barclay said: “Our business model since 2017 has been to develop cutting-edge digital routes to market, supported by a first-class auction network and that will not change.
“Our physical locations have been very busy after the lockdown, inspecting and imaging vehicles before they are uploaded to the Internet for buyers to bid and view online. The main difference at the site is that used cars don’t run through the halls, but the on-site inspection, valets and logistics teams are all busy. ‘
Interestingly, G3 also believes that some vehicles still sell better at physical auctions rather than online and “although we have seen some extraordinary price increases over the past few months, we believe they are not sustainable and that the return of physical events will help to reinforce values. for older and more damaged stocks as the market cools, ”a spokesperson said.
How have the online auctions been going since March?
It’s crazy, frankly. G3 Remarketing broke all previous records with a 246% increase in lot auctions in April, May and June year over year, over 300 constant buyers logged in for every sale – up 100% from last year – while individual vehicle pages still average over 200 views each as a sale nears, representing a 76% increase year over year ‘other.
Aston Barclay has also seen 300 to 400 buyers connecting and buying online, with many new buyers signing up to buy online for the first time. As of June 15, the company has been running a full weekly online auction program of around 28 sales, which reflects what it was physically performing before the lockdown.
“Our online auction prices increased by 20% in the young dealer parts industry (55-78 months) during the second quarter and, overall, more parts exchange shares. old-timers saw the strongest bids after the lockdown, “Aston boss Barclay said. Martin Potter.
“Even budget stock over 126 months old rose 15% to £ 1,200 in the second quarter, reinforcing the fact that dealers should consider trading in older used cars for parts. Diesel prices rose 31.3% (£ 2,386) in the second quarter, while fleet prices rose 9.6% (£ 965) thanks to the increase.
BCA said it had expanded its online remarketing program “significantly to meet demand” and made up to 20 parallel sales at any one time. Surprisingly enough, the company sees daily entries “regularly” exceeding 5,000 vehicles and “ahead of what we would typically see at this time of year,” and it has had “as many as 1,500 buyers logging in for some. individual sales ”.
Cox Automotive has been running online-only auctions since June and said, “We have recorded online auctions with over 300 active buyers and even saw 200 live bidders at evening auctions. In addition, we are seeing strong conversions for the first time which are increasing year on year and the performance of CAP Clean exceeding the 2019 performance by 4.3% (97.06% of CAP Clean as of July 17). ‘
Moving the stock has been a problem, hasn’t it?
This has been a problem for dealers for months, with many complaining that they’ve fought – and often paid more than they expected – for the stock, only to find they can’t afford it. bring them to their empty courts.
Auction companies are now saying these issues are resolved and the logistics side is doing better. G3 Remarketing, for example, has increased the number of partners it works with to create more delivery options, with most deliveries now taking 72 hours, and it also offered a click-and-collect service.
Likewise, at BCA, any reseller picking up inventory must contact the company first, and they have created additional niches to meet demand. “We are launching a new digital service soon to support this part of the customer journey, which will give the customer better control and allow us to flexibly create more niches based on demand,” said Stuart Pearson of BCA .
Cox Automotive said it had not encountered any issues, while Aston Barclay said: “Things have been a bit more difficult due to the volumes and the supply chain operating with limited driver activity. plates due to distancing regulations, but the issue is industry-wide. and customers are willing to work with a slight delay on schedule. ‘
Auction fever: we see firsthand crazy used car prices at auction when selling online from a franchised car dealership
- Do you have a problem with your car manufacturer? Do you like your suppliers? Tell us why in our Survey the power of car dealers here.
- Get the latest updates from our WhatsApp group. Broadcast only, titles directly to your phone. Send us a message and ask to join here.
- There is a brand new design and exclusive content for Car Dealer! Download issue # 149 for free here.
The featured image at the top of this story is of an auction taking place before the foreclosure