In 2019, more than 44 million retail used vehicle transactions occurred through various channels including consumer-to-consumer, franchise and independent dealer sales. These vehicles are sourced often at wholesale within the digital and physical auction space—in the lanes or online.
This is where KAR Global comes in—we build the products and solutions to move these vehicles through the remarketing lifecycle, an intentional and precise process that funnels vehicles from one driver to the next. Moving metal is what we do—and we do it extremely well, to the tune of 3.5 million used vehicle sales annually.
Unprecedented Industry Volumes
In my more than 30 years in the auto industry, I believe now is the most exciting time to power the remarketing journey. That’s because the industry is moving historically high quantities of used vehicles through the wholesale space. Couple that with KAR’s advances in technology enabling vehicles to move through the channels with more efficiency and speed—resulting in better experiences for buyers and sellers.
The used vehicle industry is seeing an extraordinary number of off-lease vehicles due to record-setting lease origination volumes during the back half of 2016. Lease originations rose dramatically from a low point in 2009 at 1.41 million to spike at an all-time high in 2016 at 4.48 million. These vehicles have now entered the remarketing lifecycle.
Consumers generally experience only two points of interaction within this space—when they turn in their leased vehicle and when they go to buy or lease their next vehicle. But between those two consumer transactions are hundreds of touchpoints capturing thousands of datapoints—touchpoints that drive smarter decisions about how the vehicle is priced, re-conditioned and marketed for future sale.
Quality Vehicle Inspections—Faster
The initial entry point into the remarketing lifecycle occurs just prior to or after the lease agreement ends when vehicles are inspected. High-quality, comprehensive and accurate inspections by specialized inspectors like those at KAR business unit AutoVIN ensure both sellers and buyers have access to reliable, actionable information about the condition and value of a vehicle. This is especially important as more vehicles are increasingly sold upstream via a “digital-first” strategy and broadcast via simulcast technology for online bidding during sale at physical auction. The more reliable and accurate the information about the vehicle, the more trust and confidence an online or mobile buyer will have when assessing potential value and bidding.
More than half of KAR’s vehicle transactions in the third quarter of 2019 were completed through our online channels. Thus, KAR is investing heavily in technology to offer more diverse inspection options. We’re prioritizing the development of self-inspection applications and enhancing offerings to create trusted inspections that provide pertinent information to both buyers and sellers. Our digital inspection technology can be used to visually represent vehicle conditions such as collision damage and panel detection that add greater transparency into any transaction.
Actionable, Data-Driven Insights
After the inspection, sellers, including OEMs, financial institutions and fleet lease companies—must determine their optimal pricing and selling strategy. How much? Which channel? When? Which ancillary services—like detailing, bodywork, mechanical services or paintless dent repair—will yield a higher ROI? KAR’s state-of-the-art analytics algorithms utilize more than tens-of-millions of data points to generate accurate predictive models for determining the appropriate market channel, timing and price at the VIN level—helping sellers achieve their remarketing financial objectives and targeted conversion rates.
A recent Wall Street Journal article highlights KAR’s data-driven artificial intelligence capabilities and their resounding impact on dealer’s purchasing decisions on the other side of the marketplace equation.
KAR leverages this data to deliver vehicle recommendations to buyers based on lot supply, recent successful purchases, vehicle detail page views and market conditions such as price and supply. We’ve gotten to a point where our recommendations are effective and sophisticated enough that we can now offer automated fulfillment services to buyers.
Always Looking Forward
When I think about the future of the industry, there’s no one process or decision that won’t be powered by data. Through innovative, digital technologies, KAR is disrupting our legacy processes and the traditional view of the auto remarketing industry. Our aim is to make every vehicle journey through the remarketing lifecycle a smooth ride.