Vendors say transparency benefits both buyers, dealers

The more information dealers provide to shoppers about the used vehicles on their lots, the quicker their sales will be — and often at higher prices.

That's the pitch emerging from leaders of several companies who argue that the less-is-more approach to used-vehicle sales is antiquated in today's digital age. In other words, not only should a used vehicle's flaws not be hidden, they should be readily detailed for online consumers, along with everything else known about the vehicle.

Such transparency is especially valuable with the shift to digital retailing that accelerated during the coronavirus pandemic.

"A majority of people are online, and they're looking around, and they want to get all the information they can online before they decide where they want to go," said David Maus Jr., vice president of the four-store Maus Family Automotive in Florida. "So the more information you give your consumer, the higher on a consideration chart you are."

The dealership group, started by Maus' father, has always erred on the side of providing as much information on vehicles to customers as possible, so the new era is not a difficult one for the retailer, Maus said.

But Maus Family Automotive decided to opt for a digital boost, adding SureSale, a company started by longtime auto industry entrepreneurs Jeffrey Schwartz and Donny Hall, to its roster of vendors to provide detailed information on vehicles' past and present conditions.

SureSale promises 170-point inspections, road test results and history checks for all vehicles. It produces a vehicle report dubbed the Factfile, which follows the vehicle online, similar to a CarFax or AutoCheck report.

"With digital retailing and the ability to be able to at least start the transaction online, if not complete it, having a condition report and having a quality celebration of a particular vehicle is that much more important to consumers," said Sean Peoples, SureSale's vice president of sales.

It's important to dealers, too, Peoples said, "as they look to a pretty competitive landscape [in which companies] like Carvana have really changed the playing field."

Peoples touted SureSale's reports as helping vehicles sell faster and for more money. He estimated that they sell seven days sooner on average and deliver $300 more in profit.

A year ago, shortly after it closed on $7 million in venture capital funding, SureSale was focused on delivering a vehicle certification program to dealers. That's still part of the game plan, Peoples said. But now the company also encourages retailers to offer condition reports on older, more beat-up cars and trucks.

"A dealer should want to sell every car on the lot," he said.

SureSale declined to share how many dealerships it's working with but said customers are located across the country. Last month, the company announced a partnership with AAA Club Alliance through which SureSale powers a program called AAA Inspected in Kansas and Oklahoma.

SureSale is by no means the only vendor selling transparency to dealers and others.

Hugh Hathcock, who launched Recon Velocity in 2019 after a successful run in the customer relationship management business, has turned his sights to giving dealership customers more information on vehicles. He launched Velocity Engage, a used-car merchandising tool that adds original vehicle window stickers, history reports and current-condition reports to dealership websites, in January.

Hathcock founded ELEAD1ONE and before selling it to CDK Global Inc. in 2018, he ran one of the largest call centers in the country, handling by his count a half billion customers on the phone over 25 years.

"Now people don't talk on the phone; they talk digitally," Hathcock said. "So we wanted to get in that business where we were helping dealers engage more and make that process faster and easier."

Velocity Engage — which also includes video walkarounds and lead submissions — is part of a rebranding at Hathcock's company. It's now called Velocity Automotive Solutions and oversees both the Recon Velocity and Velocity Engage products. Hathcock said he expects to set up between 1,000 and 2,000 dealerships with Velocity Engage this year. More than 300 have already signed on, he said.

He likened the tool to a bridge that gets customers into buying mode quicker because it gives them all the information they don't know, but want to, about the vehicle.

"The customer wants to know everything about service records; they want to see the original window sticker," Hathcock said. "If you don't show them those things, they don't feel good about it, and they don't buy it."

ACV Auctions is creating a retail brand around transparency that its CEO hopes will come to be recognized by consumers. The fast-growing online auction company, which is slated to go public this month, is being rebranded as ACV, reflecting its business offerings beyond auctions, CEO George Chamoun said.

With more than 1 million vehicles inspected for its sales, gathering data in the process, ACV has created True360 reports. They are pitched to retailer clients for use on dealerships' website vehicle display pages, but ACV also is sharing the reports to the CarFax and AutoCheck vehicle history programs. True360 includes third-party inspections and can offer dealers and ultimately consumers information on vehicles that have been in accidents, Chamoun said.

When dealers offer this level of information on vehicles, they can appeal to location-agnostic buyers, a growing group in the digital age, he said.

"It's not just that people are willing to drive 30 miles to a dealership," Chamoun said. "More transparency will be more reach. More reach will be more velocity for dealers. We're starting to see dealers that use True360 are selling cars two weeks faster than dealers who are not."

Said Chamoun: "If you believe in the concept of transparency to your consumers … everyone wins."