Online auction platform startup ACV Auctions is expanding into eight additional markets in the eastern U.S., a move the company's CEO says reflects growing demand for digital options in the remarketing world.
ACV, which lets dealers buy wholesale vehicles via 20-minute auctions on their mobile phones, said it will open in markets including Boston, Cincinnati and Nashville, expanding its footprint in the East.
CEO George Chamoun said the latest openings are part of a larger expansion plan that aims to take ACV southward into Florida by year end and to the West Coast by 2019. The company currently operates in upstate New York and western Massachusetts, Washington, D.C., and northern New Jersey, and Pittsburgh and northeast Ohio.
"We've pretty much been working in markets adjacent to the markets we've been working in," Chamoun told Automotive News. "But I'd love to get across the country by early 2019 or late 2018."
ACV's expansion plans show that some startups still seek a niche in the remarketing world, even after the demise of online used-vehicle retailer Beepi Inc. The 2-year-old startup merged with Fair.com last year.
Chamoun said ACV's platform aims to make the auction process much more convenient for dealers. Through ACV, dealers select specific types of vehicles they would like to bid on. When one of those vehicles becomes available, the dealer receives an alert on his or her phone that a 20-minute digital auction for that vehicle is beginning.
Each vehicle undergoes an inspection from ACV, and a condition report is made available to dealers. Dealers can handle title transfers and payment through the mobile app.
"A used-car buyer looking to buy a vehicle at wholesale isn't something we invented. Whether it's us or ADESA or Manheim or an independent auction, they need to buy cars," Chamoun said. "We're just providing that avenue to buy it with a condition report that ACV is supporting and is giving you more details on that car."
Chamoun said vehicles are typically placed onto the ACV platform either during or immediately following the trade-in process. That speed could help vehicles better retain their value at the time of an auction at a time when used-vehicle prices are dropping, Chamoun said.
"If you're going to wait a week or two weeks to bring a car to a physical auction, now you're talking about meaningful percentages that the car could go down in value," he said.
Used-vehicle values have declined this year as a result of a glut of off-lease vehicles returning to market even as new-vehicle inventories and incentives rise. In addition to creating a need to move used vehicles through auctions faster, falling prices create high demand for used vehicles, Chamoun said.
"What we hear from dealers every day is that they need more cars," he said. "And we're being pushed to get more cars because they'd rather buy them via ACV. That's a healthy push for us."