Wholesale auctions were once places for dealers looking for quality used vehicles to sell to kick the tires, walk around and look for dents and dings and decide whether to bid . The Covid-19 pandemic put a temporary end to that sending most auctions online leaving dealers to rely on so-called condition reports provided by the wholesaler.
Some in-person auctions have resumed but dealers are now demanding much more reliable and detailed information about each vehicle whether or not they’re bidding online or on-site. That’s driven wholesalers to rely on everything from artificial intelligence to virtual lifts to give dealers the assurance they require before bidding on a used car or truck.
Leading wholesaler Manheim Auctions saw an immediate change once the pandemic hit North America full force. According to Zach Hallowell, Senior Vice President, Manheim Digital Solutions, the company saw its digital sales soar from about 52% to 100% on March 13 when on-site auctions were discontinued out of health concerns.
“Covid was the accelerator,” said Hallowell in an interview. “What Covid has done has caused us to really step back and look at the total customer experience,” he said. “How do we deliver everything a dealer gets when they physically visit at car, how do they get that same level of exposure through digital.”
The company has enhanced its condition reports with what it calls 360 imaging and adding video and audio.
“Enhanced imaging,” said Ed Berkowitz, Vice President of Product Management for Manheim parent company Cox Automotive. “We do an exterior 360. The technology is incredible in that it knows exactly where you are on the car. It quickly evolves towards doing damage detection as well. With audio and video… you can hear that the engine is sick or not sick.”
Manheim also using undercarriage imaging at a few of its locations. Indeed, dealers’ appetite for what’s in the belly of the automotive beast is being sated by innovation such as what ACV Auctions calls its “Virtual Lift.”
A team provided a demonstration at a Detroit-area park, laying down the Virtual Lift equipment in the parking lot then drove over it in a 2019 Subaru Ascent.
“It’s not very often that someone is going to climb underneath the vehicles before it goes through an auction block to look at every single bolt every single piece of rust so this is going to give you a complete view of the undercarriage of the vehicle,” said ACV territory manager Rob Mullins. “So you can see if there’s anything missing, or a hole in the muffler, are the cats (catalytic converters)gone. You can zoom in on a bolt.”
The composite of more than 300 photos taken by the Virtual Lift is included as part of the overall condition report.
On Tuesday, the Israeli tech company UVeye announced Cumming, Ga.-based V.I.P. Auctions would become the first U.S. remarketing group to use its drive-through vehicle inspection systems.
UVeye’s Artemis system checks just about every characteristic of a vehicle’s tires including air pressure, tread depth, sidewall damage, size, load and speed ratings, while the Helios system uses high-resolution cameras to generate thousands of images per second of a vehicle’s undercarriage.
“Helios and Artemis will be key elements in establishing future standards related to certainty and transparency for vehicle inspections, not only at vehicle auctions, but also at dealerships, fleets and independent service garages,” said Glenn Hemminger, managing director for UVeye’s North American operations in a statement.
As vehicle sales—both wholesale and retail-have gone increasingly digital, the need has only grown for in-depth and accurate information about pre-owned vehicles.
“It used to be retailers would advertise what was great about a car. But dealers have had to change because now, with digital delivery, on the condition report of the vehicle they have to expose the damages, the dents the dings,” said Cox Automotive’s Ed Berkowitz. “Because if they actually have to drive over to my house to deliver a car and I see an undisclosed dent, I’m gonna send it back.”
Manheim’s Zach Hallowell says his company is actually providing high res images to dealers to use to promote used vehicles bought at auction now on their lots. Dealers are also depending on the availability of detailed information on vehicles on the auction blocks to better target their purchases.
“What we have seen dealers do is use our online marketplace almost like a virtual inventory,” said Hallowell. “Instead of having to carry stock inventory on speculation they were able to use a digital channel as a way of sourcing cars for customers. So they could engage with a customer, find out what they needed and source it from a digital market.”
The move to more automated, sophisticated imaging is likely to accelerate. Berkowitz said Manheim is working on an electric vehicle battery health report to give buyers an indication of the battery’s condition and expected life. The company is also mining data from vehicles’ electronic diagnostic systems that will help inspectors “understand how the car is feeling on the inside,” said Berkowitz. “It will tell you about the safety system, whether a sensor on the back bumper is off, it will tell you how the engine is operating.”
The industry was likely headed this way, but now it’s sprinting and not ambling due to a deadly pandemic that’s changed just about everything.
Says Manheim’s Zach Hallowell, “We see future being more and more digital. We see Covid having accelerated it by about two or three years.”