March 2010, Business Fleet - Feature
3 Options for Selling Cars Online
As economic conditions have worsened, business owners and fleet managers have been looking for new ways to cut costs. There are three different ways small fleet managers can meet that objective: online auctions, fleet remarketing specialists and Craigslist. The first two solutions reduce the days to sale and expenses associated with selling out-of-service vehicles. The third offers a simple interface and a retail-level transaction. All three are part of an online remarketing revolution that is changing how we buy and sell vehicles.
Small fleet solution: Tap into a large pool of buyers, access third-party services for accurate price listings and inspections and make a quick sale.
Each week, millions of buyers log on to online auction sites such as OPENLANE (www.openlane.com), GMAC's Smart Auction (www.smartauction.com) and Manheim's OVE.com. For fleet managers who want to reach a large pool of potential buyers, online auctions are a good option - especially when time is of the essence.
"You can sell the car and get the proceeds while the engine oil is still warm," says Steve Kapusta, director of operations for Smart Auction.
Auction sites also offer increasingly sophisticated tools to match your vehicles to up-to-the-minute values. OVE.com offers current Black Book and Manheim Market Report data online. Smart Auction offers a tool that allows a user to enter a VIN number and mileage to pull a vehicle sales history report.
Kapusta says his sellers set a list price and a "buy it now" price, but no reserve. "A lot of consignors put a vehicle out there for $10,000 and a 'buy it now' of $10,300 or $10,500," he says. "If your floor price is $10,000 and only one person bids on it for $10,000, it's sold. You can't put it on there for $8,000 when you want $10,000. First bid can buy it."
Listings are free, in most cases, but each site differs in fees charged to the seller or buyer when a deal is closed. Some are online only; others have evolved out of brick-and-mortar auctions. Most offer third-party services such as inspection and certification, which can minimize unexpected objections from buyers. That's especially important if you're taking your vehicles online to break into new markets.
Nagi Palle, vice president of analytics for OPENLANE, says his company offers sellers the option of ordering an inspection through the site or using their own service. "We've found that every seller has their own expectations," Palle says. "If they want to use the service of their choosing, we can accept data from just about any inspection company."
Units sold online don't incur the cost of transportation to an auction site - another major draw for fleet managers. And once a vehicle is sold, buyers have increasingly sophisticated shipping options. A number of providers have partnered directly with the auctions to bid for new business. The sites can display shipping quotes from competing transportation companies instantly. Transporters are becoming more sophisticated in the new marketplace, piecing together shipments from multiple sources and moving beyond their traditional range. This makes it economical for sellers to move smaller batches of cars to a greater number of locations, and farther away.
Sellers should be aware that this is still a wholesale transaction and is similar to a brick-and-mortar auction in regards to sale price. However, the transaction requires little work; the turnaround is quick and the fees surrounding the sale are minimal.