Dealers call for more auction houses to restart physical sales, but has the industry changed forever?

11:57 am, August 26, 2020

An independent car dealer duo have set up a petition calling for more car auctions to reopen physical sales.

Nicki Rodriguez and partner Ray Walker, who run Epping-based dealer Car Wise, say buying used cars in online sales is far ‘too stressful’ and wants to be able to attend car auctions in person again.

Walker says his stock is down from his usual 30 cars to just three as he struggles to buy them via his normal channels.

He said many car dealer friends are experiencing similar problems and the ‘aggravation’ of buying online and not being able to hear a car running is ‘ruining good businesses’.

The leading auction houses are still holding the majority of their sales online as they feel Covid-19 Secure restrictions make physical sales hard to put on.

Many are experiencing more buyers attending the online sales than ever before and while some smaller auction houses are starting up physical sales again, many others are likely to continue online for some time to come – if not for good.

Rodriguez said: ‘Buying vehicles online has become far too stressful where you are buying a vehicle you have not seen.

‘Trying to arrange collection of a vehicle is also taking weeks which would usually only take a few hours.

‘[Auctions taking place online] has affected hundreds of used car dealerships all over the country where stock is incredibly hard to buy and many businesses are now going under financially.

‘This situation is causing stress, creating mental health issues and above all else, ruining the used car industry.’

BCA and Manheim, the two biggest auction houses, are currently sticking to online sales.

It is thought they believe Covid-19 Secure guidelines would be hard to meet if they didn’t.

Both have been approached for comment.

Aston Barclay said most of their sites are allowing physical viewings prior to sales, provided customers have an appointment and that they are ‘reviewing the situation regularly’.

A spokesperson said they believed the only buyers ever wanting to return will be those looking at sub-£3k cars who ‘want to hear the engine running’.

It appears some independent auction houses are managing to get buyers in, though.

Michael Tomalin, chief executive of City Auction Group, said the National Association of Motor Auctions has been advised by the government that sales can take place with social distancing in place.

‘We opened lanes immediately when we learned this and are now back to normal attendance in the auction lanes with motor industry professionals purchasing well and adhering very positively to our requests for social distancing measures,’ he said.

Shoreham Vehicle Auctions boss Alex Wright said most of his sales were being attended by around 50 buyers who are adhering to social distancing guidelines.

Wright said: ‘Physical buyers have played a big part in getting Shoreham’s auction up and running during the past month and complement our online buyers.

‘Not only have they added vibrancy to sales but also helped provide each other with confidence to bid and buy in this very manic and high price market.

‘The response has been very positive, and I know we have attracted buyers from other auctions that are only currently trading online.’

The coronavirus pandemic has given auction houses the opportunity to look at their entire operations and many were already making the transition to online sales – Covid-19 has merely accelerated the change.

BCA recently reported its highest ever number of cars for sale online. On August 19, some 7,400 cars were being sold in purely online sales.

Most auction houses are finding just as many buyers – if not more – are registering for sales online and with used car demand high, and supply slow, most auction houses are reaping the rewards in fees.

If they can do that without the expense of more staff required for physical sales – and then further down the line via one or two huge auction centre hubs, rather than individual sites, they’ll be able to cut their costs even further.

Umesh Samani, chairman of the Independent Motors Dealers Association, said his members were reporting similar struggles to get hold of good quality stock and were getting ‘caught out by poor quality cars’.

He added: ‘Auctions seem very happy as the conversion rate is high, prices are high so good commission for them, but dealers are suffering with buying blind.

‘My guess is auctions won’t be rushing to open live auctions while this frenzy is on – for them it’s easy money and less overheads.’

What the auctions houses are planning for the future remains anyone’s guess, but few would bet against them changing their businesses for good following the pandemic.

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