Reynolds and Reynolds has made its first foray into used-vehicle sales with a "significant" investment in Appraisal Lane, a tiny, online dealer-to-dealer used-vehicle trade network.
It's all part of the giant dealership management system provider's ongoing push to help dealers make more money, the company said. That's in addition to helping them keep track of their finances, financing and inventory.
A Reynolds spokesman said the Dayton, Ohio, company continues to invest in its own product development and that the equity stake in the Austin, Texas, startup is more about making "strategic, targeted investments" than moving into online used-vehicle sales.
"We currently offer a number of used-vehicle inventory management and equity calculator tools for dealers as part of the dealership management system," the spokesman said. "This is an additional initiative in the used-vehicle space."
The spokesman said the company is always on the lookout for investments that make smart strategic sense and Appraisal Lane fits that category.
Still, the move also allows Reynolds to dip its toe into used-vehicle sales to dealers, a market dominated by Cox Automotive's Manheim, KAR Auction Services Inc.'s ADESA, and, online, Ally Financial's SmartAuction.
Conversely, Cox leaped with both feet into Reynolds' territory when it acquired Dealertrack, a well-established provider of digital retailing and lending tools for dealerships, in 2015.
Robert Burnett, senior vice president of corporate development at Reynolds, said the minority stake in Appraisal Lane is an example of Reynolds' commitment to help dealers operate more efficiently and profitably while improving the overall car-buying experience for dealership customers.
"We're excited to partner with the Appraisal Lane team in offering an effective platform that helps automotive retailers streamline the used-car appraisal process and obtain real-time access to expert, trustworthy cash offers for trade-in vehicles," Burnett said in a statement.
Neither company disclosed terms of the deal. Andrew Iorgulescu, president of Appraisal Lane, said Reynolds' investment is "significant enough that we were willing to give Reynolds two of our [five] board seats."
Iorgulescu, also a co-founder of Appraisal Lane, said he and the three other co-founders will maintain control of the business.