The pain points many car dealers are experiencing in wholesale transactions can be solved by Cox Automotive‘s Upside, a whole new way to wholesale. Cox introduced Upside at NADA earlier this year, and today on Inside Automotive, we’ll find out how the solution is performing for its dealer partners.
We’re pleased to have in the studio Zach Hallowell, Senior Vice President of Manheim Digital, and Matt Talbert, Senior Business Operations Director of Upside.
Here we are at almost the midpoint of the year, and the wholesale market is still pretty far from normal. Fundamentally, what Hallowell sees is a new car supply constriction shaping wholesale. When new cars aren’t produced, it puts much more pressure on the used car market resulting in high values. Used vehicles could return to more normal depreciation levels but at a higher base. These conditions will likely stay with the industry for quite some time. It’s always wise to keep your inventory moving, Hallowell explains. It’s tough to time the market, and churning inventory is a great way to avoid locking into any price points.
It’s certainly an interesting time to launch a whole new wholesale solution, and that is precisely what Cox Automotive did with Upside earlier in the year. Upside provides car dealers with a guaranteed outlet for their wholesale outcomes. It starts with the Kelley Blue Book Instant Cash Offer Value, and then Cox provides the dealer with an amount above the offer. The car then flows into the Manheim marketplace through Upside Direct, and the vehicle is offered in an exciting auction format. On the buy-side, there is a lot of selection and opportunities to get deals. Cox will then share with the dealer above that Upside offer, 90% of the value.
Upside is different from other wholesale solutions. It’s a brand new way to wholesale, and there are three things that set Upside apart from other solutions, Talbert says.
- Better than market returns
- Integration with other Cox Automotive tools
- Cox Automotive stands behind every car and every offer
When a car dealer buys a vehicle off of Upside, it should be a worry-free experience, Talbert adds. Most Upside cars also have a ‘Deal Shield,’ meaning that, for any reason, the dealer can return the vehicle within 21 days.
“We can provide [dealers] with confidence that they’re going to make money on every wholesale unit through the Upside process,” says Hallowell.
There are two ways car dealers are going all-in on Upside and driving the best results. The first is Kelley Blue Book’s Instant Cash Offer appraisals, which lock in the price that dealers should acquire the vehicle for and ensure that they get a guaranteed value. The second is when dealers send all of their inventory through the Upside process, they benefit from better market returns across their entire wholesale portfolio.
“We couldn’t be more excited about the results that we’re driving for our clients,” says Talbert.
The level of user engagement is high across a broad spectrum of inventory, including vehicles from one year old to 22 years old with 2,000 miles up to 400,000 miles. In the Atlanta market, core dealers in the last two sales have generated above MMR (Manheim Market Report).
Even as auctions reopen, Cox is maintaining bout 80% digital buyers. Upside fits very well into that segment of where buyers are. Buyers can see the convenience of a digital process. Deal assurance is a big part of that.
To learn more about Upside, schedule your preview here.
Did you enjoy this interview with Zach Hallowell and Matt Talbert? Please share your thoughts, comments, or questions regarding this topic by submitting a letter to the editor here, or connect with us at email@example.com.