A glance at the screens above each auction block shows the competition consists of more than dealers present in the lane. A large online audience, participating via Simulcast and mobile, is in on the action remotely.
To make the most of these multi-tasking buyers, condition reports make all the difference and are a highly economical way for sellers to get more money out of sale day.
CRs Help Vehicles Sell Faster
Dealers buying online, whether at a computer or with a mobile device, tend to look at listings with condition reports first, making those vehicles more popular and likely to sell faster. In fact, Manheim research shows that vehicles with condition reports sell four times faster.
Buyers who may be hesitant about buying online, without the opportunity to “kick the tires” on a vehicle before purchase, appreciate the availability of a condition report. Moreover, condition reports reduce potential headaches for sellers and buyers since vehicles that have them show a 37 percent decrease in arbitrations, according to Manheim data.
For less than the cost of a steak dinner, a condition report will more than pay for itself on the auction block, representing a significant return on investment. The proof is in the numbers. Manheim clients are three times more likely to purchase a vehicle with a condition report and vehicles that have a condition report sell for 20 percent more than cars that do not.
While many vehicles listed online for sale may have a photo available, only about half include condition reports. Savvy sellers will use condition reports to their advantage and get better conversion rates for the sale.
Not All CRs Are Created Equal
Not all condition reports are created equal, however. Assessments should cover the vehicle inside and out, from visible frame damage and paint to obvious mechanical damage and tires. The report should always include images, a vehicle description and reconditioning recommendations. Inspection grades should be easy to find and review prior to an auction, and used in conjunction with the full condition report.
Continuously Improving the CR Process
Manheim inspection team members participate in an extensive training certification program. New writers undergo a comprehensive 90-day onboarding process, followed by ongoing training. In addition, Manheim has invested in a new system used by all of its condition writers that utilizes industry and OEM data sources to dynamically populate the vehicle description portion of the condition report. The tool only displays option values that are appropriate to the vehicle being inspected, further reducing the chance for human error. Manheim and AiM formed a strategic alliance in 2015 to collaborate on best practices and standardize inspection technologies across live and online auctions. These recent investments power a robust system that leads to improved accuracy, minimal human error and an arbitration rate of less than one percent. As a result, sellers trusted Manheim to conduct 3.5 million vehicle inspections last year, and this year the company is on track to deliver 4.2 million.
Today, 70 percent of large dealers and 46 percent of small to mid-sized dealers use real-time data about a vehicle’s current condition to make more informed purchasing decisions. As the industry continues to evolve to better meet dealer and seller needs, condition reports will prove to be one of the most useful tools for building dealer confidence in transactions, stimulating sales and driving optimal prices.
Article published in Auto Remarketing on September 7, 2016
