A new corporate sibling to auction giant Manheim is helping dealers buy, at wholesale prices, other dealers' used vehicles that are listed for retail sale on AutoTrader.com with no transaction fees, no contracts and no physical or online auctions.
The company, DealerMatch, is owned by Cox Enterprises Inc., parent of Manheim and AutoTrader.com. It offers an app that allows dealer subscribers to buy as many vehicles as they want for a flat monthly subscription fee. The introductory price of $249 a month is scheduled to rise to $400 after the pilot period ends in early 2014. A typical fee to buy a single vehicle at an auction is about $300.
Buyers determine how much they want to offer sellers for vehicles, but DealerMatch recommends about 10 to 15 percent below retail.
Helping dealers buy and sell vehicles directly to one another conflicts with the traditional auction model, which puts companies such as Manheim squarely in the middle of such transactions.
That's why DealerMatch is a separate company from Manheim, says DealerMatch President Greg Easterly.
"I worked at Manheim six or seven years, and we found that some of the decisions to help dealers trade faster and more cost effectively among themselves would conflict with an auction's core business model," says Easterly, former vice president of marketplace management at Manheim.