LAS VEGAS -- With the number of off-lease vehicles returning to the market expected to rise steadily and sharply over the next several years, automakers say it is crucial to have programs that enable them and their dealers to sell used vehicles quickly and for as much money as possible.
General Motors relies on its FrontLine Ready reconditioning program, said Dan Kennedy, GM's remarketing manager. For Subaru of America Inc., it's all about the data, said John Manchin, national fleet remarketing manager. The managers spoke last week during a panel on used-vehicle trends at the Used Car Week conference here sponsored by Auto Remarketing magazine.
Kennedy said GM's FrontLine Ready offers vehicles in retail-ready condition. That means dealers who buy those vehicles can sell them under GM's certified used-vehicle program as soon as they get them home.
FrontLine Ready means "we've done the 172-point inspection on that vehicle and they don't have to do anything but put a label on it and put a price on it and it's ready to go," Kennedy said.
He said GM also offers Sponsored Plus vehicles that have undergone cosmetic reconditioning before being offered for sale to dealers.
At Subaru, Manchin uses analytical wholesale price data going back to 2009 to help him set the price for each vehicle at each auction. His goal: Sell every off-lease Subaru at auction for the highest possible price.
Manchin said he sets goal prices rather than floor prices. Goal prices are calculated by tracking the average price and average miles of every vehicle sold at every auction, and analyzing those prices regionally. He also considers vehicle transaction prices for the previous month and other historical trend data.
That enables him to set prices based on the local market and with a fair amount of accuracy, he said.
"I'd rather aim high and miss than aim low and hit," Manchin said.
"Instead of me setting a floor price of $21,000 and having the auctioneer just trying to get to $21,000, I'd rather say $21,500," he said. "I don't make those numbers up. Those numbers come from empirical data. If the auctioneer gets to $21,300 I'm still better than telling him to get me $21,000."
But once the bidding starts, he may shift gears. If after several attempts, Manchin fails to get his goal price on certain makes and vehicles, he will drop the price -- "within reason" -- in line with the market, he said. He said that his goal prices typically are between 98.5 percent and 101.5 percent of his predicted value.
"Whatever the market tells me, I will adjust, within reason," he said. "If the market tells me it's a thousand dollars below what I think it's worth, I'm not selling."