Digital Wholesale Auctions Affected by COVID-19 Have Created Ravenous Demand for More Precise Data

* Digital wholesale platforms that emerged during 2020 have proven to be fast, efficient and are here to stay. The landscape of 2021—and beyond—will see the new digital platforms coexist with a controlled return to traditional in-person live auctions.

* The effect of the pandemic on the wholesale automotive market has created long-term demand for more precise vehicle data that will affect digital wholesale platforms as well as traditional in-person auctions.
By: J.D. Power
 
J.D. Power
J.D. Power
MCLEAN, Va. - May 12, 2021 - PRLog -- The pandemic fundamentally disrupted the automotive secondary market. In doing so, it introduced important transformations that are rapidly maturing digital processes when it comes to purchasing wholesale vehicles.

"While traditional 'live' auctions are not likely to go away altogether, the digital automotive auction platforms that emerged in 2020 have proven fast, efficient, and are here to stay," says David Paris, Executive Analyst with the Valuations Services team at J.D. Power.

According to Paris, the detail and transparency that was created in the shift to virtual automotive auction activities have emerged as competitive requirements in all aspects of wholesale operations.

"This is because digital auctions elevated the need for working with extremely granular and accurate data on vehicles that are often being purchased sight unseen," Paris says. "Having been exposed to more data, the industry is now hooked. As a result,  the level of data detail that has been introduced in the virtual auctions is going to affect the way traditional live auction sites are operated."

Demand for Access to Robust, Accurate Data Crosses Automotive Ecosystem

Dealerships making wholesale purchases are not the only participants in the automotive ecosystem that have noted the value of working with more and better data.

"Every other player in the community of interest—from banks and credit unions to OEMs, auto dealers, and even insurance companies—have come to recognize the importance of capturing as much information as possible about any given vehicle to optimize margins and mitigate risks in today's volatile automotive marketplace," Paris explains.

In the early days of the pandemic, the rush to virtual auctions revealed a spectrum of practices when it came to providing details about vehicles that were on the block. The market quickly began to reward those venues and channels that provided more information and insight on auction offerings.

"In retrospect, it makes total sense," Paris says. "Buyers could not peek under the hood or look inside the vehicle. They could only rely on the description provided by the wholesale channel. Throughout 2020, virtual wholesale auction organizers discovered they could attract more players to their channels when more robust descriptions, higher-quality photos and more complete data were provided."

As markets return to some semblance of normal, buyers are bringing data-access expectations with them to traditional live auctions. In other words, the appetite for detailed and accurate data is no longer restricted to virtual channels. To address the emerging need, J.D. Power has unveiled a new data service called VIN Precision+.

"This new offering provides buyers, bankers, underwriters and other value-chain participants with access to accurate and complete details about the features and packages associated with a specific vehicle as it left the assembly line," Paris says. "The tool effectively eliminates the guesswork associated with traditional VIN decoding, which is frequently incomplete and can result in imprecise valuations."

Beyond supporting live and digital wholesale purchasing, VIN Precision+ introduces a higher level of precision for:
  • Appraising Customer Trade-ins
  • Setting Asking and Retail Prices
  • Loan Origination and Underwriting
  • Portfolio Valuations
  • Remarketing
  • Total Loss Valuations
  • VIN Authentication

Find out More
Please contact us at the numbers below to schedule an interview with David Paris, Executive Analyst with the Valuation Services team at J.D. Power to learn more about the underlying research.

Media Contacts
Wendi Sheridan; East Coast; 424-903-3644; wsheridan@pacificcommunicationsgroup.com
Geno Effler, J.D. Power; West Coast; 714-621-6224; media.relations@jdpa.com

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Tags:Digital Wholesale Auctions, Data Analytics, VIN Precision+
Industry:Automotive
Location:McLean - Virginia - United States
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