XLerate Buyers Prefer Onsite Sales

By Staff Writer March 02, 2021

XLerate Group, a nationwide auction and remarketing facilitation company, announced its dealer expectations for the coming year. A recent survey of XLerate’s dealer base suggests a return to in-person automotive auctions in 2021, following a COVID-19 year in which digital-only auctions experienced a surge in volume.

Dealers told XLerate during the survey that:

  • They can make a much better assessment of the vehicle’s condition when they are on-site.
  • They can spot unexpected deals when walking the lot that they could not have known to look for in an online environment.
  • Inaccurate condition reports invariably lead to a heightened risk of time-consuming and costly arbitration over the vehicle price.

Online auto auctions perform an important role in this industry. In 2020, online auction sales increased by 30 percent, or more, at some of XLerate’s locations, as the company and its customers navigated the pandemic.

XLerate Group CEO Cam Hitchcock

At the same time, customers have expressed an eagerness for the industry to resume selling cars live. When XLerate reached out to the dealers and commercial consignors for feedback on online vs. in-person auctions, an overwhelming majority of customers expressed a strong preference for transacting in-person over the alternative digital-only auctions.

While the safety of employees and customers remains XLerate’s top concern, and as the nation slowly begins to emerge from the one-year shutdown, the company predicts the industry will largely return to its traditional business model by the end of 2021, with much of the industry returning to buying used vehicles at in-person auto auctions.

“Last year, many within our industry predicted that 2020 would be the year that put an end to physical auto auctions. Last year put the effectiveness of in-person automotive auctions through a stress test that was far more difficult than anything we could have imagined,” said XLerate Group CEO Cam Hitchcock. “But as the year came to a close, it remained clearer than ever that the dealers who preferred to buy vehicles online before COVID-19 hit still prefer to buy vehicles online, while dealers who preferred to buy vehicles in person at our auction sites still prefer to buy vehicles in person.

“Digital, used car auto auctions have been an important tool in our industry for many years, and we expect the demand for this service to continue because of the convenience it provides for many of our customers. That said, we believe that early predictions that in-person auto auctions would fade away were premature. In-person auto auctions continue to offer advantages for buyers that cannot be fully replaced with software and video – no matter how good that technology purports to be.”

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Last modified on Wednesday, 10 March 2021 12:42