"We gain their trust, and then they cut us loose to buy cars for them," he said.
Hammer said the store-level data on dealership inventory and sales differs from other types of products that predict "the right cars that work well in a particular market." ADESA's unnamed buying service is able to make decisions some dealers may overlook, he said.
"A lot of times when dealers sell cars — it's like if I sell a 2016 Honda Accord, then I go get another 2016 Honda Accord because it works," Hammer said. "But that doesn't mean that that Accord is the next best car for me. There might be something that I either hadn't thought of or that I do well with and I just could use more of in inventory."
The program will search across ADESA's national footprint, and DRIVIN's algorithms will consider transport costs. So ADESA can let dealers know the total price for purchase and transport. That means a dealership might consider a vehicle located outside its normal buying area if the auction company could purchase and move it for a low-enough price.
Hammer declined to say how many dealerships are involved in the pilot. ADESA is still testing the service, "seeing good success" and expects expansion this year, he said.
There is no premium charged for the service, Hammer said.
"It's just like buying the cars [at auction], except we do it for them," he said. "We look at it as just generating the wheels of commerce in the auction. We're using it as a service to [dealers] to drive them to more cars from our sellers."
