ACV Auctions has matured well beyond the startup stage, and points to the April 24 sale of a 2017 Mercedes-Benz G550 for a cool $239,500 as proof.
ACV, founded in June 2014, lets dealers buy wholesale vehicles via 20-minute auctions on their mobile phones.
Through ACV, dealers select types of vehicles they would like to bid on. When one of those vehicles becomes available, the dealer receives an alert on his or her phone that a 20-minute digital auction for that vehicle is beginning.
It is one of many used-vehicle trade network companies using data, analytics and technology to help dealers buy and sell used vehicles among themselves. Most are regional, with a limited national presence although they may offer to ship a purchased vehicle anywhere.
For several years, these challengers to established online auctions occupied a not-quite-Goldilocks niche. Buyers were wary of vehicles that were too old, even if inexpensive, due to worries that the condition report might not include all of the vehicle's problems. And sellers sent younger, pricier vehicles to auctions in hopes of attracting more sellers and thus a higher price.
But as more buyers have come to trust ACV's condition reports and its multiple online photos, including undercarriage shots, of vehicles for sale, the range of cars and trucks sold on its auctions has increased, said CEO George Chamoun.
Two years ago, he said, the Buffalo, N.Y., auction company's average transaction price was in the $4,500 range. Last year, it rose to the $5,500 range. Now, the average is closer to $7,000, with vehicles being sold at prices ranging from $500 to $27,000 "every day." In April, volume topped 6,000 units, he said.
"We have thousands of vehicles registered" and "ready to go," Chamoun said. "We have over 3,000 unique bidders, all dealers, bidding on cars this month. That's a ferocious beast. The beast needs to be fed. We've got this buyer base that needs cars."
Over the last couple of weeks, he said, ACV has seen sales of more than 15 units for prices over $50,000, and a handful over $100,000, including a 2013 Ferrari for $200,000, and a Bentley Flying Spur for $215,000. Those are vehicles more commonly associated with event-style auctions, such as Barrett-Jackson Auction Co.'s.
Chamoun declined to identify the buyer or seller of the G550. But he said most such exotic sales result from one of three types of sellers:
1. A vehicle, however attractive, sat on the lot too long without attracting a buyer, and ran afoul of the dealership's maximum- age policy.
2. The dealership may be overstocked with a particular nameplate or trim level. If the store has three 2015 Porsche 911s, and takes a fourth in trade, it might decide to wholesale No. 4 immediately.
3. A dealership does a "live appraisal." Imagine that "somebody pulls up with a 911 with a few thousand miles" on the odometer, and tells the Mercedes-Benz store that she wants $100,000 for the 911 as a trade-in. The dealership, unsure, offers it on ACV to see if the vehicle can attract a buyer at that price, and thus determines whether it can do that deal.
If a buyer offers to pay the $100,000, ACV guarantees that price to the dealer for three days.
"Sometimes the retail deal gets put together, sometimes not," Chamoun said. "We're on the hook for three days."