When it was launched in 2000, SmartAuction was intended to serve as a means of remarketing off-lease vehicles for GMAC to GM dealers. As it exists today, SmartAuction has grown well beyond its original concept and shows no signs of slowing down. Currently there are roughly 7,700 dealers using SmartAuction to purchase inventory, and while the majority of those are GM dealers, around 2,100 are non-GM franchise and independent dealers. That dealer base will soon see the addition of more than 2,000 Chrysler dealers as GMAC becomes the preferred provider of retail finance and floor planning for Chrysler, bringing the total number of dealers using SmartAuction to about 10,000.
Unfortunately, it still seems to be a little-known fact among many dealers that SmartAuction’s services are not exclusive to GM franchise dealers, and both non-GM franchise and independent dealers are also able to take advantage of the company’s offerings. Mark Newman, vice president of remarketing and managing director of SmartAuction, hopes to eliminate that misconception. “We are open for business to all dealers and all makes,” he stated. “We enjoy a pretty loyal following of GM dealer-buyers on our site … but we also believe that every other dealer make should be on SmartAuction.”
According to Newman, dealers can look forward to a number of improvements coming to SmartAuction later this summer with the launch of their new platform SmartAuction 2.0. “We are working on a number of initiatives to really improve the usability of … the auction, as well as the broader functionality of our Web site and the tools that we’ll be able to offer dealers,” said Newman.
“What we want to do with our online remarketing presence is really think about all of the work flow of a dealer’s used car trade and offer a compelling combination of tools to manage the business,” he added. To that end, one of the tools recently made available to SmartAuction users is QuickTurn, an inventory management tool powered by FirstLook. The program is available exclusively for SmartAuction users at a competitive price—$499 per month with a one-time set up fee of $750—and is tailored to work seamlessly with SmartAuction’s online environment.
“Managing inventory has always been key to improving the return on investment for a used car business,” Newman stated. “It’s even more key in an environment like we have today where credit is scarce and where many floor plan providers curtail funding on cars that are over a certain number of days.” QuickTurn’s analysis of a store’s DMS history and retail listings on competitors’ websites will help used car managers make pricing and wholesale decisions on aging inventory and enable them to list cars on SmartAuction with just a click of the mouse. It will also recommend vehicles that perform well for the store and assist in finding those vehicles on SmartAuction.
Another tool offered by SmartAuction is the Virtual Showroom. This application displays all of the auction’s listings in a retail view, allowing a dealer to show customers the vehicles available without disclosing the wholesale price. This means a dealer can offer customers a bigger selection of used inventory without the carrying cost associated with physically stocking more vehicles. Virtual Showroom is currently available free of charge to most SmartAuction users but will become available to all users with the upcoming launch of SmartAuction 2.0.
The auction is also expanding its network of consignors, which means a greater variety and number of vehicles from around the country available to dealers in one place. “One of the fallacies about SmartAuction is we sell cars only from GM and GMAC,” said Newman. “In fact, we’re now selling more dealer cars than we sell cars consigned by General Motors.”
He added that the company has been aggressively growing its remarketing business in the area of rental car fleets and offers vehicles from companies like Enterprise, Avis and Hertz. SmartAuction also remarkets off-lease vehicles for financial institutions other than GMAC, like U.S. Bank, and Newman hopes to broaden the auction’s already-vibrant repossession market to other financial institutions as well.
Another segment of consignors dealers may not be aware of is the group of roughly 25 large independent auctions offering vehicles through SmartAuction Midstream. Newman expects the number of independent auctions using SmartAuction Midstream as their online venue to increase, further adding to SmartAuction’s appeal as a one-stop solution for used inventory sourcing.
SmartAuction is not just for GM dealers anymore, and with the expansion of available products for its users and the upcoming launch of a new platform, it’s a great time for any franchise or independent dealer to explore what SmartAuction can do for them. They will continue to expand their dealer base, said Newman, and “we’re going to continue to look for tools of the trade that really make the whole dealer and consignor online experience of buying and selling cars … a lot more intuitive.”
Special Finance Insider Vol. 3, Issue 4