Vehicle auction buyers relying on condition reports for online sales
Skip to main content
Sister Publication Links
  • Automotive News Canada
  • Automotive News Europe
  • Automotive News China
  • Automobilwoche
AN-LOGO-BLUE
Subscribe
  • Subscribe
  • Account
  • login
  • HOME
  • NEWS
    • Dealers
    • Automakers & Suppliers
    • News by Brand
    • Cars & Concepts
    • Coronavirus Coverage
    • China
    • Shift
    • Mobility Report
    • Special Reports
    • Digital Edition Archive
    • This Week's Issue
    • VW badges rtrs web.jpg
      VW Group operating profit drops by half in 2020
      Washington Auto Show postponed amid ongoing COVID-19 pandemic
      Subaru expands Feeding America donation, advertising
      Mass. dealership group to pay $1 million in unemployment scheme settlement
    • Audi to build EVs at new company majority owned by VW Group
      European Chamber rules out American, European export curbs as cause of chip shortage
      Used-vehicle market posts first contraction in 2020
      Tight chip supplies could persist for as long as a decade
    • Detroit Aerial Panorama during sunset
      Developing future workers to fuel growth in mobility
      Getting around in Las Vegas often involves long waits for a crowded monorail ride, below, or taking escalators up and down to cross elevated pedestrian walkways along the Strip.
      Las Vegas offers best and worst in transportation challenges
      Where is transportation headed?
      In pandemic environment, RV industry ‘roaring back'
    • Crashes involving electric vehicles, such as that of a Tesla Model X in California in 2018, pose battery-fire concerns for first responders.
      NTSB says automakers need to better arm emergency responders
      An EVgo electric vehicle charging station
      Charging network EVgo near merger to go public, report says
      The Cruise AV autonomous vehicle, based on the Chevy Bolt
      Honda taps GM's Cruise to bring new mobility to Japan
      Aurora teams with PACCAR on self-driving truck development
    • Elon Musk interview
      Tesla’s Model Y, on sale since March, is a showcase of EV technologies competitors will benchmark.
      Technologies of Electrification
      Cadillac’s Lyriq EV will be unveiled Aug. 6.
      Future Product Pipeline
      A CALL TO ACTION
    • GM, Unifor go from strife to ‘right solutions’
      Crashes involving electric vehicles, such as that of a Tesla Model X in California in 2018, pose battery-fire concerns for first responders.
      NTSB says automakers need to better arm emergency responders
      The Toyota C+Pod’s interior has a stripped-down, minimalistic feel, with big knobs and buttons.
      EV design for Japan's tight turns
      Genesis' delayed relaunch back on track with new crossovers, upcoming EV
    • Access F&I
    • Fixed Ops Journal
    • Marketing
    • Used Cars
    • Retail Technology
    • Sales
    • Best Practices
    • Dealership Buy/Sell
    • NADA
    • NADA Show
    • Automakers
    • Manufacturing
    • Suppliers
    • Regulations & Safety
    • Executives
    • Talk From The Top
    • Leading Women Network
    • Guide to Economic Development
    • PACE Awards
    • Management Briefing Seminars
    • World Congress
    • Aston Martin
    • BMW
      • Mini
      • Rolls-Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Fiat Chrysler
      • Alfa Romeo
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Maserati
      • Ram
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
      • Holden
    • Honda
      • Acura
    • Hyundai
      • Genesis
      • Kia
    • Mazda
    • McLaren
    • Mitsubishi
    • Nissan
      • Infiniti
    • PSA
      • Citroen
      • Opel
      • Peugeot
    • Renault
    • Subaru
    • Suzuki
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
      • Seat
      • Skoda
    • Volvo
    • (Discontinued Brands)
    • Virtual reveals (Sponsored)
      • GENESIS: 2021 GV80
      • KIA: 2021 K5
      • LEXUS: 2021 IS
      • NISSAN: 2021 Rogue
      • TOYOTA: 2021 Venza and 2021 Sienna
    • Auto Shows
      • Detroit Auto Show
      • New York Auto Show
      • Los Angeles Auto Show
      • Chicago Auto Show
      • Geneva Auto Show
      • Paris Auto Show
      • Frankfurt Auto Show
      • Toronto Auto Show
      • Tokyo Auto Show
      • Shanghai Auto Show
      • Beijing Auto Show
    • Future Product Pipeline
    • Photo Galleries
    • Car Cutaways
    • Design
  • OPINION
    • Blogs
    • Cartoons
    • Keith Crain
    • Automotive Views with Jason Stein
    • Columnists
    • China Commentary
    • Editorials
    • Letters to the Editor
    • Send us a Letter
    • Nikon turns lens on auto factory, build quality
      Bosch_information_domain_computer web.jpg
      Bosch, Continental battle to supply the brain of the connected car
      A victory lap for Detroit car design
      Stellantis_logo_blue_background web.jpg
      In 'merger of equals,' PSA is buying FCA, Stellantis prospectus says
    • view gallery
      1 photos
      A New GM
      view gallery
      1 photos
      The Bridge
      view gallery
      12 photos
      Leo Michael's best of 2020
      view gallery
      1 photos
      UAW Deal
    • Shifting gears away from the stick shift
      SEMA still a wonderful circus
      Penske still has plenty of races to win
      Ford's turn in the hot seat
    • January 19, 2021 | Small car part causes big problem
      January 12, 2021 | Automotive industry shined in 2020
      December 8, 2020 | In a year that lacked luster, All-Stars showed how to shine
      November 24, 2020 | Female talent in automotive is expanding
    • Dan Shine
      Don't totally ‘forget about 2020'
      Jamie Butters
      Big auto show era truly over
      John Possumato
      Missing piece to the mobility puzzle: Helping carless people
      A show we love to hate ... but hate to miss
    • How Tesla, GM transformed EV market in 2020
      Is sales recovery nearing an end?
      Beijing's uphill battle to boost EV sales
      Nasdaq-like Star Board poised to become key finance platform
    • EV charging
      Time for U.S. to embrace the EV
      Ford's ‘Finish Strong' ad sets right tone for '21
      UAW settlement brings justice, voting rights
      Dealers should be treated as partners in EVs
    • Is banning ICEs in our best interests?
      GM should share EV risk with dealers
      Ready to buy Mirai, but where to fuel?
      From Toyota store to hydrogen highway
  • DATA CENTER
  • VIDEO
    • AutoNews Now
    • First Shift
    • Special Video Reports
    • Weekend Drive
    • AutoNews Now: Tavares to have 38 direct reports at Stellantis
      AutoNews Now: VW to take 'radical, new approach' with flagship electric sedan
      AutoNews Now: Biden to revisit fuel efficiency rules
      AutoNews Now: Tavares: Stellantis needs to be 'great rather than big'
    • First Shift: Ford prices Takata recall at $610M
      First Shift: Honda to test Cruise AV in Japan
      First Shift: Trump pardons former Google self-driving engineer Levandowski
      First Shift: GM's surprise path to building electric delivery vans in Canada
    • N.J. dealer helps position peers for ‘electric revolution’
      DCH Millburn Audi
      'Finding the diamond in the rough': How 2020's No. 1 dealership retains talent
      Don Johnson Motors
      'Distinctive culture' cuts turnover, carves career paths at Wis. dealership group
      Why 2020 could be a record year for buy-sells
    • Why the pickup is the auto industry's 'battleground'
      Carlos Ghosn's quest to restore his reputation
      Why Ford must execute to avoid 'deep trouble'
      Why Honda is 'locked and loaded' for 2020
  • EVENTS & AWARDS
    • Events
    • Awards
    • Congress Conversations
    • Retail Forum: NADA
    • Canada Congress
    • Europe Congress Conversations
    • Leading Women Conference
    • Fixed Ops Journal Forum
    • ANE Shift
    • Shift: Mobility at a Crossroads
    • Shift: The Future of Mobility (CES)
    • 100 Leading Women
    • 40 Under 40 Retail
    • All-Stars
    • Best Dealerships To Work For
    • PACE Program
    • Rising Stars
    • Europe Rising Stars
  • JOBS
  • AN Solutions
  • +MORE
    • Leading Women Network
    • Podcasts
    • Webinars
    • In the Driver's Seat
    • Publishing Partners
    • Classifieds
    • Companies on the Move
    • People on the Move
    • Newsletters
    • Contact Us
    • Media Kit
    • RSS Feeds
    • Shift: A Podcast About Mobility
    • Special Reports Podcasts
    • Daily Drive Podcasts
    • AAM
    • Gentex
    • Reputation.com
    • Ricardo
    • Ricardo
    • Allstate: Want more from your F&I?
    • Ally: Navigating the future of automotive retailing
    • Amazon Web Services: Any place, any time, any channel
    • Amazon Web Services: The power of the cloud
    • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
    • Epic Games: Transforming the auto industry with digital assets
    • FTI Consulting: Crisis as a catalyst for change
    • Google: 5 trends shaping the auto industry's approach to a new normal
    • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
    • IHS Markit: Autonomous vehicles: Automotive and transportation disruption
    • IHS Markit: COVID-19: The future mobility delusion
    • IHS Markit: The battery electric vehicle (BEV)
    • Level5: 2020 Automotive E-Commerce Report
    • Naked Lime: Bring social reputation together as part of big-picture marketing
    • Wells Fargo Auto: Switching gears from LIBOR to SOFR
    • Ally: Do It Right
    • DealerSocket
    • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
    • Facebook: The road to a zero-friction future
    • Guide To Economic Development
    • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
MENU
Breadcrumb
  1. Home
  2. Retail
August 29, 2020 12:00 AM

Auction buyers relying on condition reports for online sales

David Muller
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    A vehicle inspector at a Manheim auction center demonstrates the process.
    DAVID MULLER

    A vehicle inspector at a Manheim auction center demonstrates the process.

    The coronavirus pandemic dramatically altered the automotive ecosystem this spring as plants shut down, many dealerships temporarily closed their showrooms and the two largest U.S. wholesale auction companies made a near-overnight switch to digital sales.

    Since the height of the virus crisis in March and April, manufacturing has restarted and dealerships have reopened.

    But Cox Automotive's Manheim and KAR Global's ADESA auction units continue to sell mostly via digital. Even where physical auctions have resumed, buyers have gravitated to buying wholesale cars and trucks online.

    With the shift, condition reports on vehicles — the documentation many buyers rely on to make their bidding decisions — have become all the more crucial. And those buyers, along with some auction executives, say the reports must improve and become more reliable.

    "We have to be better at condition reports, which we're working really hard at, and we're investing in," Cox Automotive CEO Sandy Schwartz said in June. "We have to be better at representation of cars, which I feel we've done over last year and we're working really hard at today."

    The improvements need to include better pictures and descriptions of the cars, Schwartz said, as well as better guarantees that would allow buyers, when they purchase vehicles that prove to be not what they thought, to be able "to unravel that sale."

    KAR also is underscoring the importance of good condition reports.

    Fisher: Driving for consistency

    "It's something the entire industry has always done, but it's completely changed with this transformation to digital marketplaces," said Tom Fisher, KAR's executive vice president and chief digital officer.

    Making changes

    To that end, KAR and Manheim are investing millions of dollars to make the digital vehicle-wholesaling process more transparent. With improved information on the vehicles comes greater confidence for potential buyers — and higher sales conversion rates.

    KAR invested $100 million-plus in artificial intelligence, better imaging and other enhanced condition-report technology last year.

    Cox Automotive said it plans to spend $40 million over the next two years to update technology related to its condition reports.

    Some of these upgrades had been in the works while others — both technological and operational — were implemented in the wake of the coronavirus outbreak and the subsequent switch to digital auctions in mid-March.

    Following that switch, KAR moved to unify its approximately 1,500 vehicle inspectors in a common Center for Excellence unit. Some inspectors have been stationed at physical auctions while others were working in the field for KAR's mobile auction unit TradeRev.

    The goal of coordinating their activities through the new center is to eliminate some of the natural subjectivity from inspector to inspector and to create a more uniform process for inspections and condition reports.

    "The biggest piece of feedback that we've gotten from our buyers in particular is that the inspections are inconsistent," Fisher said. "And so we've made a massive technology investment into that platform to drive that consistency."

    Improving consistency is a key goal for Manheim, too. It has increased its inspectors' training regimen to ensure a more uniform process, quadrupled the number of audits it does on inspectors' reports and created a condition-report advisory board to get direct feedback from customers.

    One of Manheim's immediate moves in the aftermath of the switch to all-digital sales was to increase the number of images in condition reports for at-auction, dealer-consignment vehicles, upping the count to 18 photos — depending on vehicle size — from the previous seven.

    Car condition

    A look at the details

    Condition reports, designed to give wholesale buyers a detailed status of a vehicle, have become crucial to digital sales. Here are some items that could be included:

    • A description and overview of the vehicle
    • A list of any potential missing parts
    • Any added features on the vehicle that aren’t standard
    • A summary of visual body damage and any known mechanical problems
    • Information about the condition of the tires
    • Images of the vehicle
    • Video of the vehicle

    Source: ACV Auctions

     

    Tech abounds

    Manheim has had a more-involved inspection and condition-report process for its Manheim Express mobile trading platform. The Manheim Express report — geared to vehicles being off-site — includes video footage, audio of engine noises, 360-degree images of the exterior and interior, an undercarriage survey for rust and a scan of the vehicle's OBD-II, or on-board diagnostic, port.

    That expanded condition report is gaining traction with dealer-consigners at traditional auctions, especially for older vehicles.

    "We're really developing what I call segment-specific condition reports that meet the needs of different buyers at different stages," said Zach Hallowell, vice president of Manheim Digital Marketplace and RMS Automotive.

    Some of the upgrades the two auction giants have been implementing are things digital rival ACV Auctions has been offering out of necessity.

    ACV has been an all-digital marketplace since its founding in 2014. The company, which sells 40,000 vehicles per month, has developed products such as Virtual Lift, a tool that provides images of vehicle undercarriages, and Audio Motor Profile, which provides sound clips of a vehicle's running engine. ACV's 700 inspectors also use paint meters, tire-depth readers and OBD-II scanners.

    "Really what the virus has done is accelerated the adoption to digital, and what that does is you now can't debate whether you're going to show more data on the car or not," said ACV Auctions CEO George Chamoun. "Digital requires trust and transparency. Digital requires a trusted condition report. So those two things kind of come together."

    Dealers sometimes report horror stories on social media about vehicles they bought at wholesale that arrived with major condition issues not represented in the condition report. Examples range from dirty interiors to missing parts to prominent scratches or dings.

    All-digital ACV Auctions developed Virtual Lift, a tool that provides images of vehicle undercarriages. “Digital requires a trusted condition report,” says CEO George Chamoun.

    Don't overthink it

    While buyers feel vehicles are sometimes misrepresented, some dealers who purchased via digital auctions well before COVID-19 became part of the American vernacular say they are comfortable with the process.

    Tasca Automotive Group has been buying vehicles online for several years, said David Tasca, the Rhode Island dealership group's general manager. The key to remote wholesale buying, he said, is being able to effectively arbitrate a disputed purchase, if needed, and generally to not overthink the process.

    Condition reports make remote buying easier, Tasca said, as they often list factors that buyers may not be able to discover if they hadn't inspected the vehicle beforehand — such as a vehicle's interior odor.

    "You can't tell me if you were standing in the lane that you opened the door in every car and smelled it as it was driving through the lane," Tasca said, adding, "The condition report tells you in two seconds."

    John Brasher, executive director of the ServNet group of independent auctions, said its auctions have focused on training inspectors to be consistent while also improving photography. Some ServNet auctions have begun using the companies SpinCar and Black Widow for 360-degree vehicle imagery, while others are upgrading the quality of their vehicle photos, Brasher said.

    "A good-quality photograph in some cases is probably more valuable than a condition report," he said.

    ServNet auctions have not seen a rise in arbitration claims as digital transactions have grown, Brasher said.

    ACV and Manheim reported the same. But that could be in part because of a used-vehicle market that has been red hot, with demand for inventory driving wholesale prices to record levels.

    "Whenever the market's really hot and cars are tough to come by, arbitrations drop down to almost nothing," he said. As to whether lower arbitration rates will last well into the increasingly digital future, he said, "The jury's still out."

    RECOMMENDED FOR YOU
    CarGurus promotes finance chief Jason Trevisan to CEO
    Letter
    to the
    Editor

     

     

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    CarGurus promotes finance chief Jason Trevisan to CEO
    CarGurus promotes finance chief Jason Trevisan to CEO
    Alfa Romeo starts life in Stellantis with a promise of growth
    Alfa Romeo starts life in Stellantis with a promise of growth
    Inventory at 3 million for first time since May
    Inventory at 3 million for first time since May
    Sponsored Content: 4 Phone Techniques Top Dealers Use
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    See more newsletter options at autonews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Digital Edition
    Automotive News 1-18-21
    THIS WEEK'S EDITION
    See our archive
    Fixed Ops Journal
    Fixed Ops Journal 12-14-20
    Read the issue
    See our archive
    RETAIL TECHNOLOGY NEWSLETTER: Sign up for our Tuesday afternoon newsletter that breaks down the latest developments in how technology is changing the auto sales landscape.
    WEEKLY NEWSLETTER: Sign up to start your week with the top stories from the latest issue of Automotive News, delivered to your inbox first thing each Monday morning.
    Get Free Newsletters

    Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    Subscribe Now
    Connect With Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Our mission

    The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America.

    AN-LOGO-BLUE
    Contact Us

    1155 Gratiot Avenue
    Detroit, Michigan
    48207-2997

    (877) 812-1584

    Email us

    Automotive News
    ISSN 0005-1551 (print)
    ISSN 1557-7686 (online)

    Fixed Ops Journal
    ISSN 2576-1064 (print)
    ISSN 2576-1072 (online)

    Resources
    • About us
    • Contact Us
    • Media Kit
    • Subscribe
    • Manage your account
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • NEWS
      • Dealers
        • Access F&I
        • Fixed Ops Journal
        • Marketing
        • Used Cars
        • Retail Technology
        • Sales
        • Best Practices
        • Dealership Buy/Sell
        • NADA
        • NADA Show
      • Automakers & Suppliers
        • Automakers
        • Manufacturing
        • Suppliers
        • Regulations & Safety
        • Executives
        • Talk From The Top
        • Leading Women Network
        • Guide to Economic Development
        • PACE Awards
        • Management Briefing Seminars
        • World Congress
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls-Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Fiat Chrysler
          • Alfa Romeo
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Maserati
          • Ram
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
          • Holden
        • Honda
          • Acura
        • Hyundai
          • Genesis
          • Kia
        • Mazda
        • McLaren
        • Mitsubishi
        • Nissan
          • Infiniti
        • PSA
          • Citroen
          • Opel
          • Peugeot
        • Renault
        • Subaru
        • Suzuki
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
          • Seat
          • Skoda
        • Volvo
        • (Discontinued Brands)
      • Cars & Concepts
        • Virtual reveals (Sponsored)
          • GENESIS: 2021 GV80
          • KIA: 2021 K5
          • LEXUS: 2021 IS
          • NISSAN: 2021 Rogue
          • TOYOTA: 2021 Venza and 2021 Sienna
        • Auto Shows
          • Detroit Auto Show
          • New York Auto Show
          • Los Angeles Auto Show
          • Chicago Auto Show
          • Geneva Auto Show
          • Paris Auto Show
          • Frankfurt Auto Show
          • Toronto Auto Show
          • Tokyo Auto Show
          • Shanghai Auto Show
          • Beijing Auto Show
        • Future Product Pipeline
        • Photo Galleries
        • Car Cutaways
        • Design
      • Coronavirus Coverage
      • China
      • Shift
      • Mobility Report
      • Special Reports
      • Digital Edition Archive
      • This Week's Issue
    • OPINION
      • Blogs
      • Cartoons
      • Keith Crain
      • Automotive Views with Jason Stein
      • Columnists
      • China Commentary
      • Editorials
      • Letters to the Editor
      • Send us a Letter
    • DATA CENTER
    • VIDEO
      • AutoNews Now
      • First Shift
      • Special Video Reports
      • Weekend Drive
    • EVENTS & AWARDS
      • Events
        • Congress Conversations
        • Retail Forum: NADA
        • Canada Congress
        • Europe Congress Conversations
        • Leading Women Conference
        • Fixed Ops Journal Forum
        • ANE Shift
        • Shift: Mobility at a Crossroads
        • Shift: The Future of Mobility (CES)
      • Awards
        • 100 Leading Women
        • 40 Under 40 Retail
        • All-Stars
        • Best Dealerships To Work For
        • PACE Program
        • Rising Stars
        • Europe Rising Stars
    • JOBS
    • AN Solutions
    • +MORE
      • Leading Women Network
      • Podcasts
        • Shift: A Podcast About Mobility
        • Special Reports Podcasts
        • Daily Drive Podcasts
      • Webinars
      • In the Driver's Seat
        • AAM
        • Gentex
        • Reputation.com
        • Ricardo
        • Ricardo
      • Publishing Partners
        • Allstate: Want more from your F&I?
        • Ally: Navigating the future of automotive retailing
        • Amazon Web Services: Any place, any time, any channel
        • Amazon Web Services: The power of the cloud
        • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
        • Epic Games: Transforming the auto industry with digital assets
        • FTI Consulting: Crisis as a catalyst for change
        • Google: 5 trends shaping the auto industry's approach to a new normal
        • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
        • IHS Markit: Autonomous vehicles: Automotive and transportation disruption
        • IHS Markit: COVID-19: The future mobility delusion
        • IHS Markit: The battery electric vehicle (BEV)
        • Level5: 2020 Automotive E-Commerce Report
        • Naked Lime: Bring social reputation together as part of big-picture marketing
        • Wells Fargo Auto: Switching gears from LIBOR to SOFR
        • Ally: Do It Right
        • DealerSocket
        • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
        • Facebook: The road to a zero-friction future
        • Guide To Economic Development
        • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
      • Classifieds
      • Companies on the Move
      • People on the Move
      • Newsletters
      • Contact Us
      • Media Kit
      • RSS Feeds