Gone are the days when a dealers only choice was to leave their dealership and spend hours in the auction lanes each week. Although there still is a time and place for physical auctions-and always will be-more and more dealers are beginning to embrace technology that enables them to speed up the process of buying and selling wholesale vehicles. Its now possible for a dealer to sit down at his desk with a cup of coffee, log on to any number of online wholesale vehicle service providers, scan through up-to-the-minute stock, and with the push of a couple of buttons, hes filled his used vehicle inventory needs for the day-never having to leave the dealership.

Furthermore, dealers are also beginning to warm to the idea of using rapidly advancing technology in the F&-I department. Its now possible for dealership F&-I employees to access dozens of lenders, shop a deal for a customer, and seal the car deal in a radically shortened amount of time-with just the push of a few buttons on the keyboard and the click of the mouse.

Wholesale buying online

Companies like Online Vehicle Exchange (OVE.com), a wholly-owned subsidiary of Manheim, and ATC-Onlane (atc-onlane.com) are providing dealers with an efficient upstream online channel for vehicle wholesaling and inventory management. And many dealers are engaging the technology. The supply of vehicles at these sites is typically filled by sources such as manufacturers, off-lease, off-rental, finance, captive finance companies and, of course, other dealers.

Dealers obviously need routine access to vehicles, says OVE.com president, Jim McKnight. The online tool is an additional channel for buying and selling and, not only gives dealers access to cars upstream before they get shipped to the traditional auction, but offers dealers an incredible variety of vehicles to choose from because these cars are literally nationwide.

Andrew Iorgulescu, vice president, business development for ATC-Onlane agrees with McKnight and adds, The online wholesale channel also removes the need for time-consuming travel by dealers from auction to auction, historically involving routine out of state travel. Iorgulescu notes the obvious benefit of this enormous virtual marketplace and how the technology can enable dealers to turn inventory more quickly and thereby add dollars to the bottom line. And he says that dealers spending more time at the dealership will have more time to sell and oversee more of the day-to-day operational details of the dealership. Of course, both agree that online auctions dont replace physical auctions- they simply enhance them by giving dealers another alternative for managing inventory.

The technology and a number of providers have been around for a few years now, but Iorgulescu estimates the dealer population is still only about halfway through the curve of fully embracing the regular use of such technology. One of those dealers riding the wave is Kayla Hilbert, the used car manager for Apple Acura Subaru in York, Pennsylvania.

Ive really come to rely on this service, she says of the OVE.com site. Im online with it everyday. Hilbert says her dealership buys more than $100,000 worth of vehicles online each month. Theres no question that buying and selling cars this way saves me time and money.

Often, some of the first questions dealers have when they consider buying vehicles online is vehicle quality and, in general, the overall integrity and credibility of the systems. McKnight understands those concerns and says thats why OVE.com has security built into the system to manage fund transfers, condition reporting, and arbitration. Every sale is covered by Manheims policies for pre and post-sale inspections and arbitration, he says. And frankly, as with any physical auction, any word of recurring problems with any buyer/supplier is going to spread quickly throughout the buying and selling community, leading to some degree of self-regulation.

Hilbert says one of her favorite parts of the whole online process are the vehicle inspection reports she gets. The condition reports and post-sale inspection reports are great- they prevent mistakes and are an added security feature for me.

Iorgulescu explains how ATC-Onlane offers both open and closed sales to its registered dealers. We hold closed sales for a number of manufacturers. Its really a private auction marketplace where, for example, we can brand a Chrysler site that allows Chrysler dealers exclusive access to the companys vehicles, he says. And there are open sales where any registered dealer has access to all the vehicles-perhaps even some of those cars that the Chrysler dealers didnt buy. And we can handle the front-end marketing and training needs for the dealers, as well as provide back-end solutions such as paperwork, titles, and transportation needs, says Iorgulescu.

McKnight and Iorgulescu also emphasize how dealers can benefit from what some call the virtual inventory of online wholesale auctions. ATC-Onlane offered more than 1 million vehicles for sale online last year, so the sites are ready-made for the selection required by special order customers.

With such a large inventory of vehicles available online, its very practical to locate and procure a vehicle just exactly as the customer specifies, and the deal can be quickly turned, says Iorgulescu. Thats just what Tom Wilson does. Wilson is the pre-owned manager for Bluff City Jaguar in Memphis, Tennessee. In addition to using ATC-Onlane to fill some of his regular inventory needs, he uses the system for special orders. I know that if a customer comes into our dealership and they are looking for a specific make, model, and year, I can log into the ATC system and find what I need for them there, he says.

Wholesale selling online

Indeed, buying vehicles is only one part of the equation for some dealers. These online vehicle wholesaling companies can offer another convenience for dealers and shave time off the vehicle turn time, be it from a slow moving unit that just needs to go, or customer trade-ins that dont fit the dealers inventory mix.

Most dealers have an inventory turn time, whether it is 45 or 60 days, whatever. The benefit of the online tool is that dealers can quickly post and sell these non-moving vehicles, says Iorgulescu. And the exposure they get online is significantly more than the dozen or so guys standing in the lane at the auction. He offers the example of a Lexus dealer who gets a Chrysler in trade. Hes probably not going to have a place for that and will need to get that vehicle off the lot ASAP.

McKnight concurs with Iorgulescu and adds, The online selling function also reduces a dealers transportation fees to and from the physical auction. He says it really just offers another convenience function when a dealer doesnt have the time or interest to take the vehicle to the auction.

Its one function Hilbert has used. She doesnt allow vehicles to stay on her lot past 55 days and she has used the OVE.com site to unload slow movers.

Like a snowball, as this online buying and selling technology is explored by more and more dealers, the potential group of buyers and sellers for vehicles continues to grow at a significant rate.

For the most part, online auction companies charge very similar buy and sell fees as their physical auction counterparts. As for the mechanics of the online buying and selling process, dealers can generally set a buy now firm price or have the vehicle go through the traditional bidding process like a typical auction. As mentioned, the service providers can handle most necessary paperwork, inspections, arbitration, and transportation, and look for further integration with dealer DMS systems in the near future.

Web-based F&-I solutions

A steady supply of vehicles is certainly the cornerstone of successful inventory management strategies. But getting those cars funded and out on the street as quickly as possible, is another critical component. Thats what companies like DealerTrack and RouteOne are doing for dealers through their Web-based software and technology products.

Automating the credit application process has really changed the way dealers conduct business, says Raj Sundaram, senior VP, dealer solutions for DealerTrack. Dealers now have access to more potential sources of lending and can get the deals funded much faster than before-often in hours.

Thats been one of the goals of DealerTracks online credit application processing product. The software enables dealers to receive consumer leads, compare financing and leasing options, sell insurance, and other aftermarket products, all while managing document compliance, and executing financing contracts electronically.

Dealers are really looking for providers who offer lots of functionality and tools in their systems, says Sundaram. The DealerTrack system can integrate with existing dealership DMS, and allow presentation of a full arsenal of aftermarket accessory and menu items to customers. And the system allows dealers to pull all credit bureaus and book-out sources via Blackbook, NADA Guide Book, and Kelley Bluebook, all without leaving the system.

Brad Rogers, VP of sales and marketing for RouteOne, agrees on the idea of more tools and functionality and says, Our technology can help dealers select lenders, create credit apps, access credit bureaus, and easily integrate with a wide variety of dealer management systems. He also touts the RouteOne reporting feature, which allows dealers to track finance department and lender performance and pinpoint new opportunities for growth and profit.

Rogers says one of his companys goals is to create a one-stop shop for credit applications. You shouldnt have to go in an out of multiple systems just to get quotes. He says the system can help dealers finance any customer, regardless of credit, finance virtually any car and streamline the entire process. And he says the company routinely seeks feedback from its dealer customers so they can continue to improve and enhance the products offered.

Paperless F&-I contracting, or eContracting, has been an especially hot topic. RouteOne has been doing its part to help dealers eliminate unnecessary paperwork. Reducing paperwork reduces time and margin for error, says Rogers. Although he admits, it may yet be another couple of years before this process reaches critical mass with dealerships. However, there are many advantages for those who are embracing it. Rogers points to the fact that with any car deal there could be ten to 15 different paper documents to accurately complete, maintain, and track. By going paperless, the process is automated and simplified.

Like RouteOnes system, DealerTrack's eContracting solution, which is integrated with its online credit application network, also enables dealers to pre-populate, complete, and submit retail installment sales contracts electronically to various financing sources. This is a revolutionary process because historically, this paper-intensive process required overnight mailing, cross-checking, re-contracting, and finally funding a retail contract, which could take days. But as Sundaram explains, eContracting results in faster, more accurate completion of contracts, and quick funding for the dealer.

And faster funding leads to improved cash flow for dealers and happier customers behind the wheel. The system gives dealers access to 325 different lending sources an, by its nature, can get deals funded days sooner, sometimes in just a few hours, than was possible in the past, says Sundaram.

Ultimately, say Sundaram and Rogers its all about efficiencies, both for the customer and the dealer.