At least two networks, ACV Auctions and TradeRev, use their respective apps to let dealers launch online, on-demand, dealer-to-dealer auctions for individual vehicles.
By selling unwanted vehicles through ACV Auctions' 20-minute sales, dealers can eliminate the need to transport the vehicle to a physical auction or pay auction fees, said CEO George Chamoun. He is also co-founder of Synacor, a technology development company for video, Internet and communications providers, device manufacturers and enterprises.
Sellers pay $150 to sell a vehicle on ACV Auctions; buyers pay $50 to $350 to use the service, depending on the vehicle purchase price, Chamoun said. At traditional auctions, dealers pay roughly $300 to $450 to sell a vehicle.
About 1,000 franchise and independent used-car dealers throughout the U.S. buy vehicles on ACV Auctions, but sellers are limited to franchise dealers only. Chamoun would not say how many of ACV Auctions' clients are franchise dealers.
The company started in June 2014.
Vehicles are offered for sale with detailed condition reports and 20 to 30 photos, including images of the vehicle frame and undercarriage.
Buyers tell ACV Auctions the vehicle make, model, mileage and price range they are interested in and get notices on their phones when vehicles meeting their criteria are up for sale. There is no advance notice of sales.
"If you've got the right condition report, you don't need more than 20 minutes," Chamoun said. "We think what we're investing in makes it better for the buyers, which then make it better for the sellers. If buyers are confident to buy on the platform, then the sellers get the money they want."
On TradeRev, vehicles are offered for a little longer than ACV Auctions' 20 minutes -- but not much. Dealers who use TradeRev sell their used vehicles in one-hour auctions, said Keith Crerar, executive director of TradeRev U.S.
Dealers use the app by writing a vehicle description, uploading photos of it, adding walk-around videos and pressing a button on their smartphone. Dealers are encouraged to launch auctions during the sales process so they will know how much to offer a customer for their trade-in.
Crerar said his tool is changing the vehicle trade-in process. "We're adding transparency and efficiency to a process that has been unchanged for a hundred years," he said.
In August 2014, auction giant ADESA, a unit of KAR Auction Services Inc., paid about $30 million in cash to acquire half of TradeRev.