Heading the online auction field is the TradeRev application developed in Toronto by Mark Endras, a computer science graduate whose family operates several car dealerships.
Endras began coding TradeRev in his free time in 2009 and two years later launched the first version of the app, which backs sales with such services as electronic fund transfers, shipping quotes and inspection and arbitration.
In 2014, auction heavyweight ADESA, part of KAR Auction Services, paid US$30 million for a 50 per cent stake in Endras’s company. With ADESA’s support, TradeRev expanded to the United States in 2015 and to Britain this year.
Endras says he believed from the start that the advantages of programs like TradeRev go beyond convenience.
“We have always thought that real-time market pricing -- supply meeting demand just in time -- would change the fundamentals of the automotive market.”
Another Canadian offering is Selectbidder, founded in Moncton, N.B., by brothers Sean and Stuart Liptay of Great Northern Auction Co. and embraced by Downey Ford and other Maritimes dealers.
Selectbidder too is making inroads in the U.S., signing deals with independent auctions scrambling to offer an online alternative to their physical lanes.
Global wholesale leader Manheim Auctions, meantime, is responding with a barrage of in-house products, including simulcasts of its in-lane auctions that allow long-distance bidding and multiple internet-based programs.
Says Manheim’s Canadian marketing director, Jack Sulymka: “The auction has truly become a place of business 24 hours a day, seven days a week, because it meets the changing needs of our clients.”
While the online share of the market is expected to continue to grow, few think it will ever eliminate the bustling bricks-and-mortar auctions.
“At a live auction, versus being anonymous on a computer screen, you can get some people pretty excited when a car’s live in a lane, so I do think there’s going to be a place for an auction for a long time,” says Matt Francis.
Still, bidders who go by gut instinct are taking on bigger risks, warns Manheim’s North American president, Janet Bernard. In the company’s 2016 Used Car Market Report, she observes that the “increased price transparency” created by online tools for dealers and consumers is narrowing the range of returns on individual transactions.
“Lacking ‘home-run’ (high-gross) deals, dealers can now ill afford the outsized losses associated with buying the wrong car at the wrong price,” Bernard writes.
A different note of caution comes from the executive director of the Used Car Dealers Association of Ontario.
The ease of buying or selling a car on your phone, says Warren Barnard, “still has to be tempered by the fact that at some point somebody has to actually look at the thing and sit in it and drive it to make sure that it runs, and make sure it hasn’t had accidents and that everything that a customer needs to know about that car is going to be disclosed to them.”
— With files from Mark Atkinson