As wholesale car auctions move online, buyers and sellers can transact with each other anywhere in the U.S. Large fleet managers, such as auto insurance companies, can use insurance auto auctions to find buyers anywhere, even if they are far away from the auction lot. Similarly, dealers can scour the U.S. looking for the best insurance auto auction for their needs. The result is a more efficient, fairer marketplace that makes car buying less expensive and more transparent.
Insurance auto auctions work by selling automobiles or car parts insurance companies own, and then transferring them to resellers and other wholesalers. Typically, insurance auto auctions will go through a third party like openlane.com or smartauction.com, using intelligence from places like ove.com. Once these cars are auctioned, buyers can bid at multiple auctions online, filtering out cars based on make, model year, damage sustained, distance from the buyer, and many other characteristics. While buyers have the option to appear in person at some places, they often use either online bidding or proxy bidding.
Once a car is sold at insurance auto auctions, payment is very similar to any other auction. While the insurance company gets most of the offer price of an insurance auto auction, the platform often gets a commission. In the past, auctioneer commissions have been 10 percent, but online insurance auto auctions often push the price lower. In this way, they work similar to GSA auctions, which sell used cars from federal government fleets.
Insurance auto auctions are great because they allow buyers to scour cars from everywhere. In the past, car buyers were forced to attend insurance auto auctions in person, limiting their options. Today, buyers can scour the country for the best deals at insurance auto auctions. Cars will never become a commodity, but for the first time, there is a truly national market in wholesale cars.
Car auctions, like insurance auto auctions, are increasingly going online, and creating a more efficient marketplace. Thanks to sites provided by companies such as manheim.com, dealers can now buy used cars from anywhere, and then make the most efficient trades possible. Hopefully, this will even lower the cost of used cars.