CARY, N.C. -

Alex Vetter and the team at CARS believe that “technology’s the great equalizer.” 

And that’s at the core of their goals for the planned acquisition of the Accu-Trade group, as Cars.com looks to “give technology back to the local dealership” through more efficient ways to source used-car inventory.

In this case, those avenues would be dealers sourcing vehicles from private-party sellers and through dealer-to-dealer trades, which the integration of Accu-Trade into the CARS properties can help facilitate.

To recap, Cars.com announced Tuesday it has agreed to buy the Accu-Trade group that includes Accu-Trade, Galves Market Data and MADE Logistics for $65 million cash.

Among other perks, the purchase gives CARS the technology needed to facilitate digital wholesale transactions on its platform.

Dealers will be able to use the CARS platform to buy and sell inventory at scale through both a dealer-to-dealer network and a consumer-to-dealer network. They will also be able to tap into instant guaranteed offer solutions throughout the CARS properties, including the Cars.com marketplace and on websites built by Dealer Inspire.

Dealers will also be able to source used inventory from consumers through the CARS platform via Accu-Trade’s proprietary VIN-specific valuation and appraisal technology.

CARS plans to debut “sell-it-yourself” capabilities for consumers on its marketplace, where private-party sellers can choose to sell to another consumer or a dealer. CARS expects the technology to be integrated with the platform shortly after closing.

Auto Remarketing caught up with Vetter, who is the chief executive officer at CARS, on Tuesday, along with Accu-Trade chief technology officer Jeff Zamora, who is joining CARS’ leadership team, and CARS senior vice president of strategy Julien Schneider.

They provided more details on how the combination of CARS and Accu-Trade technologies can help facilitate more efficient wholeale sourcing for dealers. 

Connecting stores for dealer-to-dealer sales

CARS will be able to layer its retail demand data on top of the Accu-Trade offering and dealer base, giving users of that platform the ability to view consumer demand across the CARS marketplace.

“And then the fact that we’re going to be funneling in private-seller opportunities on top of that only, again, strengthens the value proposition,” Vetter said. “I think as dealers increase how they’re conducting inspections and using the tools of Accu-Trade, obviously it’s not hard for us to connect them to start doing dealer-to-dealer buying.

“Our belief is that technology is going to replace a lot of institutions,” he said. “Because technology’s the great equalizer.”

What’s more, dealers already have the “robust” infrastructure in place that would be required to facilitate such trading.

“They’ve got storage on their lots, they can see each other’s inventory. We really just need to add the ability for them to seamlessly trade amongst themselves and it’s going to be far more efficient than going to an overlord and paying heavy transaction fees only to buy cars that others didn’t want,” Vetter said.

Zamora added that efficiency is the key here.

“Really, what this partnership brings to the table is the ability for dealers to leverage the CARS and Accu-Trade tools to be more efficient in those transactions, with the detail Accu-Trade provides in actually describing units, presenting them more clearly to other potential buyers on the network, by providing tools such as OBD integration to our appraisal process and our detailed VIN condition reporting,” he said

It facilitates an environment, ““where dealers can describe vehicles themselves in a way that other buyers can see them,” Zamora said.

So, it’s not necessarily building out a brand-new wholesale platform, as Accu-Trade already provides much of the technology that  is needed. Rather, it’s about tying together those capabilities with what CARS offers.

As Schneider would describe later in the interview, it's about blending the retail-nature services of CARS with the wholesale-leaning services of Accu-Trade. “And coming up with better signals by looking at those two data sets together,” he said.

For example, the Accu-Trade technology can be used to determine that Dealer X — whose website is built by CARS’ Dealer Inspire platform — has a vehicle on its website that might be better suited for the market of another Dealer Inspire customer, and then recommend a trade.

“That’s exactly what we’re aiming to do,” Zamora said. “Our goal with this is to find the best end user for a vehicle, given whatever parameters that particular user needs.”

Sourcing used cars from private parties

And sometimes that vehicle will come from a private-party seller who is trying to off-load their car.

For that consumer, that process would begin with the sell-your-car function on Cars.com, Schneider explained. The consumer would need to determine if they wanted to wait for another private party to purchase the car, or whether they wanted payment immediately, “in which case you have a dealer who becomes the end user of that vehicle,” he said.

Vetter added: “What we’re seeing dealerships do right now is, with the inventory shortage that every dealer is struggling with, they’re sourcing vehicles through new channels — buying cars directly from the public as a way to accelerate inventory turn and keep their operation humming. And Cars.com organically has close to 20,000 private sellers coming to our platform every month.

“And if we can route those to dealers who are using the Accu-Trade tool to buy cars precisely and accurately and knowing what to pay, they can really solve a pain point for users, while at the same time, replenishing their own stock to buy cars that they can now retail directly,” Vetter said. “Again, that’s turning a cost-center into a profit-center. Progressive dealers are running buying operations today that are bypassing the traditional auction and literally sourcing cars direct from the public. Together with our dealer network, we want to activate that strategy for dealers all across the country.”

And while the focus is on dealer-to-dealer and sourcing inventory from private parties, the CARS team didn’t rule out the possibility of other industry constituents — like commercial sellers — using the technology.

“We all believe the big opportunity is giving private-party inventory to dealers as one big source of value, but we also believe that technology can serve all of the stakeholders that try to move cars at wholesale,” Schneider said.

“There’s plenty to do with getting the private-party (vehicles) to dealers right and create a lot of value there,” he said. “(But) We haven’t limited our thinking to a small part of the pie.”

Connecting the 'disjointed pieces' 

The technology dealers use is often “disjointed pieces,” whereby they may be employing “all kinds of point solutions” that aren’t integrated through technology, Vetter said.

This partnership aims to alleviate some of that, at lease from a used-car sourcing standpoint.

“With our Dealer Inspire business, we’re powering over 5,000 dealer websites. A lot of them are using different trade-in widgets and tools. And oftentimes dealers are being charged big upsells by vendors to use,” Vetter said. “We’re going to be able to integrate our Accu-Trade technology directly into dealer websites, so they can source cars not only from the Cars.com marketplace, but also their own websites as well. 

“And then because we can see the dealers’ inventory, we can recommend to the dealer which vehicles have low retail demand and that they should exit, based on real-time forward-looking demand,” he said. “And so, you can start to see how, we’re not just going to provide software to dealerships, but we’re going to help them run their business more intelligently, using data to guide their decision-making and run their business more profitably.”