Online Vehicle Exchange announced recently that they are opening up their services to independent auctions. This fits in nicely with their philosophy of being “market agnostic”, essentially providing a technology platform to power online remarketing.
I’ve used VB2, ATCOpen, Adesa something and Online Vehicle Exchange. My favorite, so far, has been OVE, although I think the condition reports and pictures are better on ATCOpen. OVE is my favorite because it has the most vehicles available at any one time, from a variety of sellers. More auctions will mean more cars, in more areas, and a wider variety of sellers.
The potential downside is lower quality vehicles or less accurate condition reports. I’m sure systems, terms, and standards will be put in place as a requirement to use OVE, but ultimately OVE’s brand name bears the risk.
This will create a moral hazard situation where the Independent Auctions have motivation, in the short-term, to misrepresent cars in order to increase sell-through-rates. I’m sure the standard OVE policies will apply so that the auction will still be liable for major issues, but Manheim will have to act as the guarantor of last resort in all cases.
This also might signal that OVE’s car listing growth has not kept pace with internal projections so OVE has turned towards other, external sources of car inventory.
Ultimately though, the decision will mean more cars for dealers, more sales channels for auctions, and make the remarketing marketplace more efficient.