SmartAuction, an online remarketing channel, is testing a program that gives a dealer who buys a vehicle listed on its Web site five additional days to file damage claims if the purchased vehicle is 400 miles or more from the dealership. The change is one of several recent refinements to the SmartAuction site.
The five extra days give dealers confidence to purchase vehicles longer distances from their dealerships, get the vehicles transported to their stores and still have time to challenge undisclosed damage through arbitration should they find any, says Steve Kapusta, vice president of SmartAuction.
"In the auction business, it's safe to say, 'It's all about arbitration,' but it's even more about arbitration in the Internet space," he says. "You don't get to touch and feel that vehicle."
The pilot program extends the deadline for damage claims -- which are subject to arbitration -- for vehicles that are longer distances away to 19 days from the date of purchase, up from 14 now. The program started July 1 and will end Dec. 31.
Sam Slaughter, owner of Sellers Buick-GMC in Farmington Hills, Mich., says he buys 30 to 40 vehicles a month from SmartAuction and rarely finds a problem. Still, he likes knowing the safeguards are there.
"For 99 percent of the transactions on SmartAuction, you don't have to worry about that. They understand that representing the car fairly works better for everybody," Slaughter says. "But the longer time you have to get the car [to the dealership] is definitely helpful."
SmartAuction is owned and operated by Ally Financial Services Inc. Kapusta would not say how many vehicles have been sold by the online remarketing site this year, but he says sales are flat compared with last year.
Kapusta says damage claims generally go to arbitration only if a vehicle has a single instance of damage valued at $250 or more or if it has several instances of damage that add up to at least $500 in value.
He says results of the test program have been positive so far, but the company will make a decision at the end of the year about whether to continue the program.
SmartAuction also has enhanced its year-old Dealer eVantage tool, which sends e-mail alerts to dealers containing specific purchase recommendations based on dealers' bidding and purchase histories and local retail and wholesale data.
Kapusta says the tool has been tweaked to integrate dealers' current "saved" searches into the algorithm. That means saved vehicle searches by a dealer one day will result in e-mail alerts the next day that include vehicles matching the saved searches.
Additionally, SmartAuction has expanded the e-mails to offer dealers lists of vehicles that are similar in body style and price to what they typically purchase.
For example, a dealership that typically buys Toyota Camrys will get e-mails containing listings for vehicles such as the Honda Accord, Chevrolet Malibu, Chrysler 200 and Hyundai Sonata.
Also new: The alerts can be accessed from smartphones and other mobile devices.