NEW YORK -- By streamlining its inspection process, Manheim has cut by one-third the time that vehicles owned by commercial customers stay on its auction lots before being sold.
Manheim CEO Dean Eisner said vehicles consigned to the auction company by commercial and rental fleets and finance companies stay on its lots an average of 20 days. That's down from 30 days about 18 months ago.
Eisner said the goal is to reduce the number of days to 15 or 16.
Selling a vehicle faster improves the selling owner's cash flow and lets the buying dealer start the sales process sooner.
"On average, it was on our lot for 30 days. Some are 45, some are 50, and some are 16," Eisner said during an interview at the National Auto Auction Association convention here. "We started looking at every single process."
The auction giant began its efforts to cut delays about a year and a half ago. Eisner hasn't set a date for achieving the 15-day goal. "It's a long-term thing. We're going to make sure we nail whatever" process might affect the days a vehicle is waiting to sell, he said.
For example, Manheim has reduced the holding time required to check in a vehicle from four days to one, Eisner said.
He said an auction site might have received, say, 200 vehicles in one day from a single consigner. The owner of those vehicles might have required the auction to test drive each vehicle after inspecting specific components such as wheels and brakes. Those inspection requirements varied with each vehicle owner.
Sometimes an auction site would have only a handful of inspectors approved to inspect a certain owner's vehicles. If a large shipment of Mercedes-Benz vehicles arrived, swamping that brand's inspectors, a Ford-brand inspector could not pitch in. That added time to the check-in process.
To streamline things, Manheim worked with vehicle owners to standardize the way it inspects vehicles.
"Three days savings times $10 to $20 per car a day times 2 million cars, and we can save the industry'' millions of dollars, Eisner said. "And that was our goal."
Another way Manheim speeded the process was by putting vehicles on sale online sooner. About 18 months ago, Manheim began holding online auctions on Mondays.
Monday traditionally is the slowest day for auction sales, even though dealers, coming off weekend sales, have "a big demand to replenish inventory," Eisner said.
Some owners had vehicles waiting at multiple Manheim auction sites around the country, in part because of a limited number of personnel able to attend auctions representing the seller. Now those owners are able to consolidate those vehicles into a single online sale.
Eisner said some vehicle owners are selling more than 15 percent of their inventory at auction at a given time.