Majd G. SabouraDirector of Wholesale Business Development, vAuto

A Profit-Focused Game plan For Better Auction Purchases

Poll #1

How has your auction sourcing process changed in the last 12- 18 months? (please select one)

A. We’re going to more auctions than we used to.

B. We’re buying a few more cars online than we used to.

C. We don’t go to physical auctions; we only buy online.

D. Our process really hasn’t changed.

The wholesale landscape is becoming increasingly

complex

Wholesale Market TrendsIncreasing supply

NAAA Member Auction Volumes

Monthly Lease Penetration Rates

Source: Edmunds.com

Wholesale Market Volumes

Off-Lease Units Driving Supply Increase(units in millions)

Wholesale Market TrendsPrice Volatility Or A New Normal?

“Almost everyone is expecting that prices will decline. To get to what we’ve expected for 2016, we’re going to have to have a steeper fall off.”

- Thomas Webb, Chief Economist, Manheim

Retail Market TrendStrong Market—Record-Setting CPO Sales

Retail Market TrendMore “near-new” used vehicle inventory

Retail Market TrendMargin Compression Continues

Two Take-Aways From Trends

NEED TO “BUY RIGHT”TO MAXIMIZE

FRONT-END GROSS

INCREASEDINCREASEDCOMPETITION

FORTHE

AUCTION VEHICLES

“RIGHT”

Two Common Auction Complaints

1. Tough To Find Right Cars

2. Tough To Buy Right CarsOn The Money

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With more wholesale supply why is it so hard to get the right auction vehicles at the

right prices?

Two Responses To Auction Sourcing Challenge Look Harder Look Smarter

Experience/Instinct Driveno Not using tools and technologyo Not using market/scarcity reports

Preference For In-Lane Purchaseso Visiting 1 or 2 auctions – maybe?

Look Harder, Dealers

More effort/time with less rewardo On average review 100 to buy 1o 40+ hours a week

researching/prepare

More frustration/greater risk o Need to replace sold inventory with

somethingo Greater risk of aged inventory (e.g.,

buying wrong car/over-paying)

Look Harder, Dealers

Look Smarter, Dealers Less time researching, more

time buying 85% discipline / 15% instinct Increased focus on right vehicle for

their market—not cars they’ll never buy

Look Smarter, Dealers Online emphasis for efficiency

Expand Auction sources – on average 7-10 auctions

More online vs. in-lane – 60/40? 70/30?

Look Smarter, Dealers Data-driven, disciplined

Assess profit up-front then condition/history

Stick to data/metrics to guide profit-focused purchase

Look Smarter, Dealers Total Gross Mindset

Complete view of all data points Sell more, faster, to combat margin

compression Give up front end gross to gain total

gross (F&I, etc…)

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Biggest complaint today is overpaying for vehicles at auctions!

Look smarter dealers redefine overpayment…

Look smarter dealers redefine overpayment…

Biggest complaint today is overpaying for vehicles at auctions!

Crystal Ball• More technology used in lanes and online• Shift toward online purchasing than in-lane• Ongoing margin compression• Continued pressure to increase auction effectiveness and

efficiency

Poll #2How has your front-end gross profit changed on auction-purchased vehicles in the past year?(Please select one)

A. It’s the same.

B. It’s worse than it used to be.

C. It’s better than ever.

D. I’m not sure.

Q & A

Majd SabouraDirector of Wholesale Business Development, vAutomajd.saboura@vAuto.com

Poll #3How can vAuto help you develop your auction game plan? (Choose all that apply)

A. Send me an auction sourcing best practice e-book.

B. Demo vAuto’s latest auction sourcing tool.

C. Contact me for a consultation.

D. I appreciate the offer. I’m good for now.