Omaha, Neb., September 15, 2011 – Auto dealers are increasingly turning to online sources to find inventory for their lots as the supply of wholesale used vehicles remains tight, according to a recent ShipCarsNow survey. With more efficient and cost-effective auto transport options available, the pre-owned vehicle industry has expanded from a local to a nationwide market as more dealers source pre-owned cars online.
ShipCarsNow conducted its third annual dealer survey as part of its market research into dealer attitudes about online used car trading and how auto transport options impact purchase decisions. Survey respondents included U.S. franchise (65 percent) and independent (35 percent) auto dealers with a balanced mix of small-, medium- and large-volume businesses. About half of the respondents were Used Car Managers/Buyers for their dealerships.
Continued Decline in Wholesale Supply Forces Dealers Online
According to industry analysts and survey respondents, the flow of used cars into the wholesale market from trade-ins, consumer lease returns, and fleet/rental cars continued to decline through the first half of 2011. With fewer cars to choose from locally, more dealers are going online and sourcing vehicles from wholesale auto auctions, often hundreds of miles outside their normal trading zones. In 2011, 91 percent of dealers reported they purchased vehicles online, up 14 percent from 2009, which marked the beginning of the wholesale shortage.
Dealers Expand Trading Zones
"As it becomes easier for dealers to buy and ship a car from anywhere in the U.S., the origination of the vehicle becomes less relevant," said Roland Fortner, president of ShipCarsNow. "It is more about getting the right vehicle at the right price at the right time. At ShipCarsNow, we believe that reliable and affordable auto transport options make it easier for dealers to shop nationwide."
According to survey data,75 percent of pre-owned dealers in 2009 reported they purchased most of their inventory locally, within 200 miles of their dealership. In just two years, that pattern has nearly reversed. In 2011, only 35 percent of dealers surveyed restricted their online purchases to vehicles within 200 miles, and 65 percent of dealers surveyed in 2011 were actually searching farther to buy vehicles. More than half of those dealers said they were buying vehicles nationwide regardless of distance.
Auto Transport Critical to Success of Online Trading
As dealers buy more cars online, the need has increased for quality, affordable, nationwide auto transporters. In addition, 63 percent of survey respondents said they would like to see online auto auctions improve their transportation options, and 72 percent said they would buy more vehicles online if auctions offered better shipping choices, especially for less-than-truckload volumes.
Among the top improvements for auto auction transport, dealers ranked displaying shipping costs during the bidding process as their number one choice, followed by display cost savings for multiple vehicle shipments and the ability to track vehicle shipments for status and estimated time of arrival. Other improvements that resonated with dealers were the ability to co-load their vehicles with other dealers' purchases being shipped to similar destination, and mobile apps that include transportation quotes.
ShipCarsNow Auto Transport Solutions
In response to the expansion of the pre-owned vehicle market, ShipCarsNow is working with online auto auctions and used car dealers to offer multimodal auto transport that includes flexible truck and rail options. As part of Union Pacific, ShipCarsNow has an established nationwide delivery network and vehicle logistics technology that allows used car dealers - even those shipping single units - to take advantage of rail's economies of scale. Rail transport offers lower cost, higher efficiency and less damage over longer distances, and is more environmentally friendly than truck transportation. Rail is almost four times more fuel efficient and three times cleaner than trucks, according to the U.S. Environmental Protection Agency.
"We help auto dealers expand their trading radius beyond the 200 to 500 mile range," said Jeff Grandstaff, general manager of ShipCarsNow. "We make it easy and affordable to ship cars nationwide so auto dealers can expand their reach and buy the cars they need, wherever they can get the best deal. This allows dealers to be more strategic with their pre-owned business and less reactive to economic pressures."
ShipCarsNow provides the used car industry with affordable multimodal auto shipping services. Established by Union Pacific in 2006, ShipCarsNow delivers vehicles in the U.S. and around the world through a multimodal auto transport network that includes truck, enclosed rail transport, driveaway shuttles, and ocean-going vessels. The company brings global resources and technology to dealers and auto remarketers as a natural extension of Union Pacific's automotive logistics and transportation operations for new car distribution. ShipCarsNow.com provides used car shippers with a fast and easy way to book affordable auto transport online.
For more information or a copy of the 2011 Dealer Survey Report, visit http://www.ShipCarsNow.com or contact ShipCarsNow Toll Free (866) 207-3360. Follow ShipCarsNow on Facebook and Twitter.