By Zach Hallowell, Business Line Director, OPENLANE
Selling repossessed vehicles from a recovery yard is nothing new. In fact, years ago, most repossessions were sold directly from the recovery yard to local dealers, helping to earn the recovery company a steady stream of revenue. But over the last few decades, that’s become increasingly rare. Used vehicle auctions started getting into the business due to “commercially reasonableness” in the UCC code that effectively meant each vehicle had to be sold in a standardized manner with open bidding. With that entrance, physical auctions also started getting into the repossession business, picking up voluntary repos and offering lenders reduced storage fees to have the car dropped on their lot instead of being stored at the recovery company lot. All of which cost repossession companies revenue. According to ARA member Gary Purdom President and Owner of Mo Kan Central Recovery in Kansas City, Mo., “recovered vehicles used to be the lifeblood for the recovery business. It’s a shame we haven’t had a better way in the past to get back into helping lenders to sell cars more effectively.”
Not until recently at least. Now that groups like the American Recovery Association (ARA) are working with online auction companies such as OPENLANE, member recovery agents like Purdom can get “back in the ballgame” and offer the vehicles they recover to dealers directly online—adding a new revenue stream to their recovery business and a new service offering for their clients at the same time that is much more efficient and profitable than the old way of transporting and selling them at the physical auction.
Like many recovery agents, Purdom is no stranger to the remarketing process. Having been in the business for 50 years, Purdom has often sold the vehicles he recovered directly to Kansas City area dealers over the years, particularly during the 1960s and 1970s. In fact, Purdom says that many of the local dealers he’s worked with for years have recently signed on to OPENLANE since getting his endorsement.
Also taking a keen interest in Purdom’s new online remarketing service are his clients. Online auctions offer a number of benefits that really appeal to lenders that need to off-load repossessions at the lowest cost. According to Purdom, the fact that the vehicles don’t have to be transported to and from the physical auctions is one big selling point, as is having a one-stop shop for remarketing and not having to deal with the auction companies themselves. Having a nationwide buying audience is also a huge selling point for lenders, especially when they need to sell repossessed vehicles that are more suited to a particular climate, such as convertibles.
“Having nationwide coverage is really great, particularly in Kansas City where the economy isn’t doing well. Now we can sell anywhere in the country and in areas where the economy might be doing better than ours. Being able to sell nationwide is a huge advantage for clients.”
Sweetening the deal for lenders are the prices that Purdom has been able to get for the vehicles he’s been selling online. Because OPENLANE’s sales reps work directly with agents to sell their vehicles and help get the best price for them, Purdom and his clients have quickly learned to work with the bidding process to get the right price for vehicles, rather than taking the first bid that comes along. The ability to have inspections done on the vehicles also helps, according to Purdom, because it increases the level of trust between all parties involved. And the chance to make clients more money makes for happier clients.
“We’re thrilled to have something new to offer our clients and have the chance to sell lots of cars through the online auction at OPENLANE,” said Purdom. “Everyone is really interested in the service. We’re happy, they’re thrilled and are getting great prices. What more could we ask for?”