Leading industry analysts are reviewing more than 20+ years of SmartAcution to see if this platform is making it easier for dealerships or making it worse, to do their business.
SmartAuction was launched in 2000 by Ally Financial (formerly GMAC), a financial services company that provides auto financing, insurance, and other services to automotive dealers and consumers.
For the first initial decade of its growth, it was regarded as a valuable platform for dealerships, especially newer dealerships, as well as pre-owned car dealerships. It helped them to simplify and streamline the wholesale vehicle auction process, allowing the newer dealerships to quickly purchase the vehicles they need for their inventory.
Since its launch, SmartAuction has grown to become one of the largest online remarketing platforms in the automotive industry, with thousands of participating dealerships and manufacturers across North America.
But things never stay the same, not for too long. SmartAuction has had issues with its platform and how dealerships are experiencing ineffective costs which make it unprofitable.
The strength of this platform was its ability to offer a wide selection of vehicles, including cars, trucks, SUVs, and even specialty vehicles like motorcycles and RVs. The platform provided a secure and transparent bidding process, with real-time updates and alerts to keep dealerships informed of auction activity and their bid status.
This made it much easier to look at demand and valuation of cars at a much more nationwide basis. Truthfully, it was quite valuable to know what cars are being purchased across the country based on what consumers wanted. The dealerships who intend to deliver the cars that car buyers want, would tell you a lot about what the car buyers are wanting and how much they are willing to pay for the car they want.
To make things even more useful, SmartAuction to help dealerships even more by providing advanced analytics and reporting tools to help general managers better understand market trends and make informed buying decisions on behalf of their business.
With its easy-to-use interface and powerful features, SmartAuction quickly became a popular choice for automotive dealerships and manufacturers looking to streamline their wholesale vehicle buying and selling process.
But things never stay the same, not for too long.
While SmartAuction is generally well-regarded by automotive dealerships, more and more dealers are encountering issues and problems that are being unanswered by the platform.
Limited Inventory
While SmartAuction offers a wide selection of vehicles, various features to keep users up-to-date, and other useful valuation metrics, there are too many times when the platform does not have the specific make or model that a dealership is looking for to provide for its car buyers.
Even when dealerships use SmartAuction’s “vehicle locator” feature, which allows them to post a request for a specific vehicle they are looking for, there is disappointment in finding the inventory they are looking for.
The feature is useful because the request is sent to all participating dealerships and manufacturers on the platform, and if a vehicle matching the request becomes available, the dealership will be notified. But, these days, most often this feature does not offer the vehicle on time for sale to car buyers, before they change their mind and go elsewhere.
When dealerships contact their local SmartAuction representative to get help finding specific vehicles or to set up a custom search alert for vehicles that meet their specific criteria, this leads to price gauging by current owners and make it non-profitable and less likely that the feature will increase their chances of finding the vehicles they need.
Competition for bids
Because SmartAuction is used by thousands of dealerships, there can be a lot of competition for the same vehicles, which can drive up prices and make it difficult to win bids.
When there are inventory problems nationwide, bidding competition can drive up prices and make it more difficult for dealerships to win bids on the platform.
Many dealerships are complaining that they cannot find value in using SmartAuction as part of their overall remarketing strategy.
SmartAuction advantage was always a wide selection and type of vehicles. If it cannot offer this any longer, then it sets doubt on the value of the platform to make it easier for dealerships to find the specific vehicles they need for their inventory, at a reasonable price that is profitable.
Technical issues
As with any technical online platform, SmartAuction can experience technical issues or downtime that may disrupt the auction process.
There have been quite a few technical issues including server outages, website crashes, or other technical glitches that prevented dealerships from accessing the platform or bidding on vehicles.
While SmartAcution has a dedicated support team to minimize the impact of technical issues or downtime, at times it has been frustrating for dealerships to get help and troubleshoot problems and resolve any issues that arise. Additionally, SmartAuction regular updates make it difficult for dealerships to avoid re-learning the platform or its new features which leads to more technical issues and frustration.
Dealerships are now exploring other platforms and taking steps to mitigate the risk of disruption by using multiple remarketing platforms and developing contingency plans in case of technical issues on any particular platform.
Learning curve associate to SmartAuction
This platform has grown over the years and has many new and advanced features and analytics tools which require some training or learning to fully utilize, which can be a challenge for users who are not familiar with the platform.
The owners of SmartAuction admit that it is true that the platform’s advanced features and analytics tools require formal training or learning to fully utilize, which can be a challenge for most users who are not familiar with the platform. This learning curve can be a barrier to entry for new users, particularly smaller dealerships or those without dedicated remarketing staff.
Dealership staff don’t often have time to spend on online training modules, instructional videos, and user guides – especially if they have to repeat, frequently for newer features. Training is almost always inherently expensive, in time and money.
Fees associated to SmartAuction are substantial
SmartAuction charges fees for using its platform, which can add to the cost of purchasing vehicles for dealerships.
The specific fees charged can vary depending on the type of vehicle being purchased, the winning bid amount, and other factors.
Their fee structure is described as: Buyer’s fees, Transportation fees, Late payment fees, and what is classified as Other fees.
It is important for dealerships to be aware of the fees associated with using SmartAuction and to factor them into their purchasing decisions.
More and more, many dealerships find the platform to be an expensive and occasionally ineffective way to purchase wholesale vehicles, as the overall cost is often higher than purchasing vehicles through traditional auction channels or what car buyers are willing to pay.
Other platforms being used by dealerships
SmartAuction is one of several online auction platforms that dealerships can use to purchase wholesale vehicles. Some of the major competitors to SmartAuction include:
- Manheim
- ADESA
- ACV Auctions
- CarsArrive Network
- OVE
These are just a few examples of the major competitors to SmartAuction in the wholesale vehicle auction market. Each platform has its own unique features and strengths, and dealerships often choose to use multiple platforms depending on their specific needs and preferences.
