a profit focused game plan for better auction purchases
TRANSCRIPT
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Majd G. SabouraDirector of Wholesale Business Development, vAuto
A Profit-Focused Game plan For Better Auction Purchases
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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.
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The wholesale landscape is becoming increasingly
complex
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Wholesale Market TrendsIncreasing supply
NAAA Member Auction Volumes
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Monthly Lease Penetration Rates
Source: Edmunds.com
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Wholesale Market Volumes
Off-Lease Units Driving Supply Increase(units in millions)
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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
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Retail Market TrendStrong Market—Record-Setting CPO Sales
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Retail Market TrendMore “near-new” used vehicle inventory
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Retail Market TrendMargin Compression Continues
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Two Take-Aways From Trends
NEED TO “BUY RIGHT”TO MAXIMIZE
FRONT-END GROSS
INCREASEDINCREASEDCOMPETITION
FORTHE
AUCTION VEHICLES
“RIGHT”
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Two Common Auction Complaints
1. Tough To Find Right Cars
2. Tough To Buy Right CarsOn The Money
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With more wholesale supply why is it so hard to get the right auction vehicles at the
right prices?
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Two Responses To Auction Sourcing Challenge Look Harder Look Smarter
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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
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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
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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
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Look Smarter, Dealers Online emphasis for efficiency
Expand Auction sources – on average 7-10 auctions
More online vs. in-lane – 60/40? 70/30?
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Look Smarter, Dealers Data-driven, disciplined
Assess profit up-front then condition/history
Stick to data/metrics to guide profit-focused purchase
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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…)
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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!
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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
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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.
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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.