ATLANTA – A new alliance between Manheim, the largest automotive remarketing company, and TitleAuctions, a leading developer of retail Internet auction platforms, has given credit unions nationwide the opportunity to seamlessly leverage the retail and wholesale remarketing channels to optimize repossessed vehicle resale results. TitleAuction's Mark Coleman, president and CEO, said in conversations he'd had with credit unions prior to the alliance, they'd spoken with him about the need for convenience in the remarketing process and also the need for a “unified retail-to-wholesale” solution. Credit unions often struggle to find qualified recovery and remarketing agents and quality representation in the wholesale lane, as well as accurate vehicle reports, he explained. What's more, for those credit unions trying to retail a vehicle out-of-state, they often have difficulty with managing title transfer requirements. As a result of the partnership between TitleAuction and Manheim, credit unions now have the ability to seamlessly integrate the retail-to-wholesale solution so they can first market their vehicles to members through TitleAuction's retail Internet platform. Those that don't sell in the predetermined timeframe will be moved to the Online Vehicle Exchange, Manheim's Web-based hub for wholesale used vehicle sale. The vehicles that don't sell online will then be moved to the physical auction site where dealers will attend either in-person or via the Web on Simulcast, Manheim's real-time auction services. Coleman said he and Jon Schrock, national accounts director for Manheim, began talking about the alliance last year when the two were joint presenters at a breakout session during the CU Direct Symposium. “Jon was talking the wholesale side, and I was talking retail. We realized there might be some common interest to serve credit unions,” said Coleman. A privately held company founded in 2002, the Portland, Ore.-based TitleAuctions works with 60 credit unions in 19 states – Alabama, California, Delaware, Florida, Idaho, Illinois, Kentucky, Louisiana, Maryland, Missouri, North Carolina, Nevada, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia and Washington. Manheim handled nearly 10 million used vehicles and sold more than 5 million in 2005, representing more than $50 billion in value. Its subsidiary companies provide value-added remarketing products and services including paintless dent removal through Dent Wizard, Auto Body Repair and salvage vehicle remarketing through Total Resource Auctions. The company has 124 U.S. and international auction locations including 85 in almost every major market area in the U.S. Both Manheim and TitleAuctions are strategic partners of CU Direct Corp., Through its existing CU Direct relationships, Manheim will coordinate and brand special sales in credit union-dedicated auction lanes, that will feature CUDL and other credit union vehicles to draw large numbers of buyers and maximize returns for CUs. TitleAuctions power the retail Internet auction available to credit unions through CU Direct's AutoSMART program. Schrock said the goal of Remarketing Solutions, a wholly-owned subsidiary of Manheim, is to get credit unions to remarket their repossessed vehicles collectively. “The remarketing business is a huge industry with a lot of well trained professionals,” he explained. “Credit unions individually don't have the volume to warrant having a remarketing professional themselves. You need thousands of vehicles to cost justify having one. The liquidation of vehicle assets is a huge industry and credit unions have a huge portion of the industry collectively, but not individually.” Schrock said credit unions are gradually beginning to grasp the value of selling repossessed vehicles at auctions and the results have been good as far as the price credit unions get for the vehicles sold. But CUs are still going through an education process, he said. “Every credit union has its own notion of what an auction is, and they may use it as a last resort choice after they unsuccessfully try to sell the repossessed vehicle off their parking lot,” said Schrock, noting that the returns on selling a vehicle off a lot “are lousy.” He explained that, “To get your best return you have to know what generates that return, and to get the best return at an auction you have to know what's specific to that market that's going to get you the best return. What are the dealers looking for? It's not just enough to wash the car and put it out on a lot to sell.” Coleman agreed, saying credit unions will sometimes hold on to repossessed vehicles sometimes for months “believing they've recover the entire value of the vehicle.” To those credit unions, he said, “we tell them where repossession is concerned, time is their enemy. They shouldn't hold on to the vehicle, they need to auction if off quickly.” According to Coleman, some credit unions as an alternative to doing dealer options, have their own Internet-based auction tools. He said there are several software packages a credit union can buy off the shelf and adapt. “What they miss though is the opportunity to remarket their vehicles to other credit union members and consumers, as well as dealers,” he said. Coleman is also aware of some credit unions that have successfully experimented with selling high end and exotic cars on eBay Motors. But what about the trucks and lower end vehicles that get repossessed, he asked. “A few credit unions get the auto auction idea and the ones that do tend to have a person working at the credit union who was raised in the car business, they either managed or owned a dealership in a previous career or they come from the auto auction community. But those are the exceptions. The majority of credit unions still struggle to understand the basic ideas of the remarketing industry,” said Coleman. The alliance between Manheim and TitleAuctions “delivers an exceptional value to credit unions that want to optimize their mix of remarketing channels while at the same time maintaining a high degree of convenience,” said Coleman. It also allows CUs to select certain vehicles for sale on the retail or wholesale outlet only in order maximize efficiency and potential profit. “Remarketing is a very different animal from auto lending,” said Coleman. “Credit unions have done an excellent job servicing their auto loans with their members. But remarketing is very different. If you look at the major multi-national banks, they have a high degree of expertise in remarketing. Then along comes a credit union with a handful of repossessions and nobody on their staff with the necessary expertise. How are credit unions going to compete? Through education credit unions can get better at remarketing and using auctions,” he added. -

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