CARY, N.C. -

Auto Remarketing has launched a new series this year called “Consignor Connection,” in which we catch up with a leading remarketing executive at a different consignor each month.

In a Q&A format, we talk about best practices, auction industry trends and more. The latest in this series features Jeannie Chiaromonte, vice president/national remarketing manager at Bank of America.

Auto Remarketing: How is consignment volume trending this year for Bank of America and what have been some of the stronger performing segments for you?

Jeannie Chiaromonte: Bank of America's repossession volumes have been steady year-over-year. We are expecting a slight uptick in volume going into next year on the auto portfolio. That said, we are starting to see a vintage change in our auto portfolio as our average vehicle in the lane is a more recent model year.

The bank is currently utilizing our own brand recognition for the certification program, not having yet adopted the NAAA certification program. We have brand certification program consisting of our 14-day, which is mechanically sound and as close to front-line ready as possible.

Our seven-day certification program now consists of mechanically sound vehicles with no severe collision damage. Interestingly enough, we changed our seven-day program years ago and widened the cosmetic portion, allowing for some minor collision damage which would be quick and easy for the buyer to fix.

Both programs are based with model-year as well as mileage criteria. Our seven-day certification program performed better this year as the buyers were making those needed cosmetic repairs.

The continued focus at Bank of America is our customers' satisfaction and getting the most for our customers' vehicles, thus reducing their bottom line deficiency balance owed. Equally important on the back end is our buyers in the Bank lane has the confidence they can return the vehicle within the timeframe allowed in our certification programs.

We are focused on the buyers' needs, thus drawing them to our lanes.

I would be remiss not to mention our Specialty Portfolio consisting of motor home, fifth wheels, etc., and marine product. With the limited supply of marine product in the wholesale market, our boat values have remained in demand. We also experienced a lift in values for our diesel motor home segment.

 

AR: How has the increase in volume, particularly off-lease units, impacted the auction industry in 2015?

JC: With an increase in late-model vehicles in the lanes, buyers have the option to be selective. Increased inventory in this segment created downward pressure on our 14-day certified products —basically a retail-ready vehicle, Grade 3 and higher. More online sales and upstream selling puts product in dealers' hands before auction sales in the lane.

We will rely on our business partners to deliver the continued level of service during these times, which may present a challenge with increased volumes, while we continue to focus heavily on days to sell.

The key to this being a continued success for all is communication. Communicate our needs as well as the auctions to communicate theirs. Being a national consignor, understanding where the vehicle saturation will be. Online buyers will continue to be critical to the success during this time, increasing bidding, thus boosting prices.

 

AR: How does your company strike a balance when it comes to choosing how your cars are sold, be it auction sales, online sales, open/closed sales, etc.?

JC: Bank of America has a varied mix of year, make and model vehicles. Due to our entire portfolio consisting of repossessed vehicles, we opt for physical auction sales (open sales only) that also have the Internet sales channel available on sale day. We post all no sales from the auction lanes on the Internet awaiting our next sale date often utilize event sales.

The Bank has had some success in exposing our vehicles to buyers in other markets by offering product via "postcard" on sale day. While the collateral is not physically at the sale, it is offered via condition report and pictures in a virtual format. We have a Bank representative attending all sales in person or rep on-line for lower volume sales if needed.

 

AR: What importance does Bank of America put on condition reports when selling in the wholesale lanes?

JC: The industry has come a long way when it comes to condition reports. As the newest president of IARA (International Automotive Remarketers Association), myself as well as all the volunteers on our board have found the importance in helping remarketers voice their concerns and working with our auction partners to ensure we all strive for excellence.

As most consignors do, Bank of America relies heavily on the quality of condition reports including quality control assessments in our presale review. Our remarketing process begins with the information and pictures documented on condition reports. Accuracy is key! Equally, we rely on our auction partners to update information once identified or when repairs are completed.

Our goal is to provide the most accurate condition report reflective of vehicle condition and accurate announcements at time of sale. Full disclosure to the dealer is the Bank's ultimate goal to ensure their satisfaction and to reduce the likelihood of arbitrations.

While the physical auction continues to be our first most source of disposal, the internet buyer continues to play a critical part in sales and well as playing a huge part in increased bidding. Might I add, with Auto Grade implementation at all of our auction sites, we are finding the importance of Post Recon Grade updates, as dealers have become more familiar with the industry's grading scale. Many buyers now use the Grade as part of their criteria to source product.

AR: What have been some of the biggest challenges (and opportunities) in the auction market for consignors this year?

JC: While speaking from a repossession only consignor, taking possession of collateral without keys has been a huge concern. No-keys on repossessions have caused delays in transporting collateral and obtaining miles for title work when required.

Since our focus is on days to sell, as most, this continues to be a hurdle in addition to "one off" transport assignments while trying to reduce transport costs. Vehicles under warranty are a small concern in ensuring they are fixed quickly if need be. Recalls have had little impact on us at this time however will continue to remain a watch item.

As a consignor that does a good amount of reconditioning, there continues to be opportunities in condition report writing with respect to consistency. Once reconditioning is completed it is critical for timely updates to the condition reports as well as new and accurate grade values being updated in the system of record.

Target marketing for consignors that have smaller portfolios is another. With a smaller portfolio, trying to determine the best run time and lane along with which weeks to run are a challenge being a consignor who reps in person.

Working diligently with our business partners on the repossession side, transporters and the auctions has been and will continue to be the key to the continued success for us all. Timely communication is a critical component for not just the consignor's success but the industry's success.