Condition Report and Image Impact on Dealer Sales

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1 Condition Report and Image Impact on Dealer Sales October 2017 Manheim Customer Consulting

2 Condition Report and Image Impact on Dealer Sales Introduction Condition Reports (CRs) and Vehicle Images instill buyer confidence and reduce risk in wholesale transactions. As more transactions occur through online channels, Condition Reports provide a useful tool to communicate vehicle information effectively. Buyers can more effectively make purchasing decisions with more information. Dealer sellers continue their adoption of both products. By August 2017, 59% of all dealer units sold at a Manheim location had a Condition Report and 3 had vehicle images.* This study shows that both Condition Reports and Vehicle Images increase dealer sales efficiency and dealer Simulcast sales. Our findings indicate that dealers should consider utilizing Condition Reports or Images on all of their vehicles in order to drive online sales and increase velocity CR and Image Adoption *Vehicle Images include EVI products, Recon images, and Client provided images 2

3 Consignor Benefits from Condition Reports Lane/Simulcast Efficiency% Simulcast Sales Summary of Findings The more information disclosed, the better: CRs drive 5-1 higher Efficiency% and 10-25% higher Simulcast sales, Images drive 1-2% higher Efficiency% and 3-5% higher Simulcast sales Vehicle value plays a role. CRs improve efficiency most on lowvalue vehicles CRs drive Simulcast sales most on highvalue vehicles Methodology January August 2017 Dealer Sales Excludes: OVE, Canadian, TRA/Salvage, Specialty, and DTN transactions National Locations implementing CR policy in 2016: Manheim California, Riverside, North Carolina, Seattle, Georgia, Omaha, Southern California, Statesville, San Francisco Bay, Darlington, Nashville, Mississippi, Tampa, Central Florida, Orlando, Atlanta, Palm Beach, Texas Hobby, Fort Lauderdale *Lane/Simulcast Efficiency% = Net Transactions / Total Offerings 3

4 Consignor Benefits from Condition Reports Lane/Simulcast Efficiency% Simulcast Sales Lane/Simulcast Efficiency%* % Vehicles Sold on Simulcast CR to No CR: +8.7% Lift Image only to no CR: +3.7% Lift CR to No CR: +20.9% Lift Image Only to no CR: +4. Lift *Lane/Simulcast Efficiency% = Net Transactions / Total Offerings 4

5 Lane/Simulcast Efficiency% By Vehicle Value <$2,500 $2,500-$5,000 $5,000-$7,500 $7,500-$10,000 $10,000+ CRs boost a vehicle s likelihood to sell in any price tier Lower value units experience the largest gain at ~1 increase, compared to ~5% for higher value vehicles. Simulcast Sales By Vehicle Value 3 1 <$2,500 $2,500-$5,000 $5,000-$7,500 $7,500-$10,000 $10,000+ CRs drive Simulcast sales among all price tiers, particularly among higher price tiers Images increase the odds to sell on Simulcast by 3 5%; this is not impacted by vehicle value. *Lane/Simulcast Efficiency% = Net Transactions / Total Offerings 5

6 Meet the Authors Nancy Hill Director, Customer Consulting Nancy joined Manheim in 2000 and has over 17 years experience in the automotive remarketing industry. Her experience includes consulting with customers in the bank, rental, captive finance, dealer and commercial fleet segments, leading initiatives to help improve remarketing strategies. Key projects include recon ROI analysis, footprint optimization, and optimal location recommendations. Additionally, Nancy authored several studies, covering topics such as location/sale day consolidation, rental detail ROI, and understanding which vehicles have the highest success rates in online sales. Nancy has a Bachelor of Arts from the University of Georgia and an MBA from Mercer University nancy.hill@coxautoinc.com Allison Downey Manager, Customer Consulting Allison joined Cox Automotive in 2015 and has over five years of data and analytic experience. Prior to joining Cox Automotive, Allison held consulting and project implementation roles in the nonprofit and academic sectors. Allison earned her B.A. in History and Political Science from the University of Georgia, a M.A. in Social Sciences from the University of Chicago, and a M.A. in History from the University of Illinois-Chicago. allisonbertkedowney/ allison.downey@coxautoinc.com Beverly Evans Customer Consultant Beverly joined Cox Automotive in 2015 and has over five years of data and analytic experience in the automotive and political sectors, where she executed consulting and project management initiatives for clients. Beverly earned her B.B.A. in Economics from the Terry Business School at the University of Georgia with a minor in Communications. Beverly-evans / beverly.evans@coxautoinc.com 6

7 Cox Automotive Cox Automotive is transforming the way the world buys, sells and owns cars with industry-leading digital marketing, software, financial, wholesale and e-commerce solutions for consumers, dealers, manufacturers and the overall automotive ecosystem worldwide. Committed to open choice and dedicated to strong partnerships, the Cox Automotive family includes Autotrader, Dealer.com, Dealertrack, Kelley Blue Book, Manheim, NextGear Capital, vauto, Xtime and a host of other brands. The global company has 33,000 team members in more than 200 locations and is partner to more than 40,000 auto dealers, as well as most major automobile manufacturers, while engaging U.S. consumer car buyers with the most recognized media brands in the industry. Cox Automotive is a subsidiary of Cox Enterprises Inc., an Atlanta-based company with revenues of $18 billion and approximately 60,000 employees. Cox Enterprises other major operating subsidiaries include Cox Communications and Cox Media Group. For more information about Cox Automotive, visit 7

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