openlane/ara recovery remarketing program what it is how you

ARA Recovery Remarketing Program

OPENLANE/ARA – Recovery Remarketing Program• What it is• How you benefit• How to sell it to your lenders

CONFIDENTIAL

[1]

ARA Recovery Remarketing Program [2]

Why are we doing this?

We want to work WITH you, the ARA recovery service

provider, to provide lenders with a transparent, and

efficient “one stop shop” – from repossession to

remarketing.


Summary

• OPENLANE is a leader in the remarketing industry

• OPENLANE has a large base of buyers ready to buy repos

• You can make more $$ offering remarketing to your lenders

• You can retain and attract new repo business

• Your lenders will save money in the remarketing process

• Your lenders will get more $$ in the sale of the vehicle

• The whole process is 100% transparent - creating trust

• OPENLANE is here to support your sales and marketing efforts

• Try it… we’re putting our $$ where our mouth is!

[3]

Try us in June – sell your first car and get $500 from OPENLANE!


Agenda

• Background on OPENLANE

• Why sell repos online?

• How the process works

• Benefits to the agent

• Benefits to the lenders

• How to sell it to your lenders

• Next steps…

• Summary

[4]


Background on OPENLANE

[5]


OPENLANE Business Overview

• North America’s largest and most diversified online wholesale

auction company for automotive dealers to purchase and sell used

vehicles.

• Doing business since 1999

– 90%+ of all franchise dealers are a customer of OPENLANE

– Over 6,000 dealers purchase a vehicle from OPENLANE every month

– Operating in United States and Canada

• Delivering a full suite of services for the entire remarketing process

– From managing inspections to post-sale payment & title settlement

– Tens of thousands of transactions monthly)

[6]


Large and Growing Customer Base

Sellers: Leading Automotive, Finance and Rental Brands, Including:

Buyers: Over 30,000 Automotive Dealers, Including:

[7]

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OPENLANE Partners with the Remarketing Industry

[8]


Despite the Difficult Market: A Strong Year for OPENLANE

• Solid Sales and growth

– OPENLANE sold 365k units in 2009 (on track to exceed in 2010)

– OPENLANE demonstrated strong growth of 40% in 2009

• Dealer Participation

– Registered dealers: 37,000 (up from 32,000 in 2008)

– Total unique dealers purchasing: 15,000 (up from 12,000 in 2008)

• New repo consignors launched in 2008/2009/2010

– 4000+ repos sold in first half of 2010

>700% monthly repo

sales increase since

January 2009

[9]


Why should I (and my lender) sell repos online?

[10]


Why should I remarket cars?

• Retain, Attract, Grow your lender base

– Have another reason to call for their business

– Differentiate yourself from your competition

– Show that you’re forward thinking

• Make more $$$

– You can charge a service fee

– OPENLANE will pay you a rev-share

– You will get more recovery business

• Benefit your lenders

– Their cars will get more attention and get better prices

– They will reduce their remarketing expenses

– Cars will sell quickly with full transparency in a trusted marketplace

[11]

Standing still is falling behind!


Why OPENLANE?

• Our interests are aligned with ARA

– Physical auctions have taken the remarketing business from RSP’s

– The recovery service has been devalued, margins have been cut

– Physical auctions, forwarders are all going after the repo business

• We’ve taken the time to understand your business

– Working with Les McCook, Joe McOwen, Jim Hall, Chris Dunleavy

– Attended and sponsored conferences with you (Repo Summit, ARA

Convention, Credit Union shows)

– Visited yards, talked with members…

– We’re experts – and work with the best

– OPENLANE is the leader in online vehicle remarketing

– OPENLANE has partnered with AiM (Alliance Inspection Management) to provide expert third-party validation of condition and equipment

– Existing data integrations allow for rapid program start-up

[12]

This is a “win-win” for us all


Cool, but will I have to change my process? Tell me

how it works…

[13]


1. Sign up (Remarketing Agreement, POA, list of users, ACH form)

2. Pitch to your lenders – get commitment

3. Order inspections

4. Get prices from lender

5. List cars for sale and manage the auction

6. For sold units, send OPENLANE the title

7. OPENLANE funds the agent via ACH

8. Agent nets fees out of proceeds from OPENLANE and pays lender

9. For no-sales, consider re-pricing and relisting

10. Carrier will pick up the sold cars

It’s a change, but it’s easy…

[14]


Vehicle Assigned to Recovery Agent

Vehicle Recovered

Vehicle Inspected

Vehicles Priced and

Offered for Sale

Vehicles Sold

1. Ensure

vehicles are

recovered

2:

Inspections

completed

accurately

and on-time

3: Vehicles

reviewed,

priced and

listed online

4:

OPENLANE

maximizes

dealer traffic,

actively

manages

online auction

Result = maximize and optimize channel utilization

How it works

[15]


The system (User Interface)

Quickly and easily manage units

1. Generate inspection requests

2. Set pricing

3. View vehicle interest from buyers

4. Counter “If-Bids” to maximize sales


Sounds great, but what do I get from doing this?

[17]


•Make more $$$!!!• Charge a remarketing fee ~$150 per car sold

• Charge for other services - $50 for clean-up, fix tires…

• All cars will need keys …

• OPENLANE pays a rev-share of $25 per car sold

•Retain your existing business• Become their “one stop shop”

• Get more assignments

• Send them proceeds instead of a bill

•Get new business• Go after credit unions and regional lenders to ask for their business

• Lead with remarketing – tell them something they’ve never heard

• Differentiate your services from the competition

What do I get out of it???

[18]

Earn ~ $300 more per car, with very little additional effort


ARA Member Benefits from Remarketing on OPENLANE

$350 $350

$0 $0 $0 $0 $0$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

$400.00

Total Revenue Recovery Fees per unit*

Remarketing Mgt Fee*

Vehicle Clean-up* Service Fee from Auction*

Storage Fees* Key Making*

Current Model

$725

$350

$150

$50$25

$150$0

$100

$200

$300

$400

$500

$600

$700

$800

Total Revenue Recovery Fees per unit*

Remarketing Mgt Fee*

Vehicle Clean-up* Service Fee from OPENLANE

Key Making*

OPENLANE + Recovery Agent Remarketing

BOTTOM LINE:

$375 in additional

revenue to agent

per unit sold

through

OPENLANE

(*Note: Fees charged by recovery agent may vary based on volume and contract with lender.)


So let’s run some #’s…

[20]

40 Cars listed Subtotal$50 Clean-up $2,000

$150 remarketing service fee $6,000 25 Cars sold

$25 Rev-share from OPENLANE $625 $150 key making $3,750

TOTAL$12,375

10 Cars listed Subtotal

$50 Clean-up $500

$150 remarketing service fee $1,500

6 Cars sold

$25 Rev-share from OPENLANE $150

$150 key making $900

TOTAL $3,050

Low end…

Very

achievable

…

This is real – these are actual agent #’s!


So how does my lender benefit – why should they

change?

[21]


Lender benefits from using OPENLANE

• Reduce Remarketing Expense

– Eliminate transport to physical auction ($100 - $500 saved)

– Lower remarketing fees ($25-$100 saved)

– Sell the car faster, reducing depreciation and cost of capital ($100-$2000 saved)

– Offer lower-cost reconditioning ($50+ saved)

• Better Prices

– More eyeballs on every car

– No “bad” lane or run times - 75% of searches online are by make/model

– Vehicles available nationwide – in most attractive markets

• Better treatment

– “Big fish” in your pond

– Personal, local relationships

– Totally transparent – nothing to hide

[22]


Lender Benefits Remarketing with OPENLANE + ARA

$582

$150

$100

$140

$92$20

$80$0.00

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

$700.00

Total Cost Auction Sale Fee Transport to Auction

Depreciation* Cost of Capital* Inspection Fee Vehicle Prep

Physical Auction

$291

$125

$0 $19$12

$85

$50$0

$50

$100

$150

$200

$250

$300

$350

Total Cost OPENLANE Sale Fee

Transport to Auction

Depreciation* Cost of Capital* Inspection Fee Vehicle Prep**

OPENLANE + Recovery Agent Remarketing

BOTTOM LINE:

$291 typical

savings per unit

selling through

OPENLANE

PLUS typically

$100’s in greater

sale values

(*Assumptions: $14K Unit, 15 day redemption period, .03% daily depreciation, 8% cost of capital; Online sale in 4 days, Physical sale in 30 days)

(**Note: Fees charged by recovery agent may vary based on volume and contract with lender.)


Summary Of OPENLANE Repo Sold Units

[24]

0%

1%

2%

3%

4%

5%

6%

7%

8%

47% Sale Price / BB Avg

53%Sale Price / BB Avg

Price Variance: Sale Price Relative to Blackbook Wholesale Average

Share of Sold Units

Median : 99%

Summary of Units

Total Volume 3089

Average Age of Vehicle 3.6 years

Average Mileage 52,641 miles

Average Damage Amount $933

Average Sale Price $11,950

Average BB Wholesale AvgValue

$11,966

Sale Price / BB Avg 100%

Date Range: Jan 1 2010 – Apr 29 2010

Average : 100%

• More than half of the units sold were

sold for greater than the Blackbook

Wholesale Avg value

• Nearly one-third of the units (27%) were

sold for greater than 10% above BB

Wholesale Avg

27%

We’ve had great success getting strong prices for repos


Sample Repo Performance

Strong performance across a variety of portfolios and measures

* All days Calendar Days (inc weekends and holidays). Seller paid via ACH on day title received by OPENLANE

Row Labels #Listings # Sold Avg # Bids Avg # Bidders Avg Time to Pay*BankB 53 45 6.2 1.8 5.6

CreditUnion+ARA A 5 3 22.7 5.7 3.7

CreditUnion+ARA B 10 8 2.8 1.1 5.1

CreditUnion+ARA C 4 3 8.3 2.0 4.0

CreditUnion+ARA D 6 6 5.2 2.0 5.5

CreditUnion+ARA E 7 6 2.5 1.2 5.8

CreditUnion+ARA F 30 21 4.7 1.8 3.0

CreditUnion+ARA G 21 18 4.8 1.9 3.7

CreditUnion+ARA H 80 61 13.4 2.5 2.6Grand Total 216 171 8.6 2.1 3.9


OK, so I’m interested… how do I sell it?

[26]


• Small lenders not treated well by physical auctions

– Poor run times (late in day, not a lot of dealers left)

– Poor lanes (running with all the “junk”)

– High fees, bad customer service

• Current remarketing process is inefficient

– Vehicles moved twice, first to repo yard, then to auction

– Consignor depend on aggregating vehicles to attract buyers

– Time to sale can be 30 days – or more

• Sale prices not maximized due to limited exposure

– Local market may not be best for all cars

– Credit unions and small sellers treated poorly by physical auctions –

bad run times, bad lanes

– Prices only as good as the # of bidders in lanes, types of dealers,

weather – too many variables

Get to know the core value proposition


Steps to selling…

[28]

1. Create a list of prospects

– Current clients vs. new clients

– Cars with titles

– Lenders with remarketing challenges

2. Make the “call”

– A new excuse to call every client

– “How are you doing at your physical sale- do they treat you well?”

– Get ONE car, use it to demonstrate success

3. Pitch to their concerns

– Poor prices OPENLANE does better

– Poor treatment YOU will treat them better

– Auction too far Sell cars from your desk

4. Get OPENLANE involved – we’ll help pitch it

– On the phone or online meeting (WebEx)

– In-person meeting/lunch with lender(s)

– Help in production of collateral, ads, online banners

You don’t get what you don’t ask for – so keep asking…


Sales angles

[29]

Look for “low hanging fruit”

– Cars you have title for in-hand

– Cars sitting on your lot for weeks/months

– Lenders who ask “what auction should I use”

Target Credit Unions (not national lenders)

– CU’s make decisions quicker, can take action

– National lenders sales cycle long, need national solution (we’re working on them too!!)

– Go after both current and new accounts

Get creative!

– Lead with the remarketing … then get the repo business

– A “green” way to sell

– Host a meeting with several CU’s in one place

Success begets success – use one “win” to capture others


Example of Co-Marketing

[30]


Summary

• OPENLANE is a leader in the remarketing industry

• OPENLANE has a large base of buyers ready to buy repos

• You can make more $$ offering remarketing to your lenders

• You can retain and attract new repo business

• Your lenders will save money in the remarketing process

• Your lenders will get more $$ in the sale of the vehicle

• The whole process is 100% transparent - creating trust

• OPENLANE is here to support your sales and marketing efforts

• Try it… we’re putting our $$ where our mouth is!

[31]

Try us in June – sell one car and get $500!


Next Steps

1. Get signed up, if you aren’t already (e-mail

[email protected])

2. Get trained on the site (our account manager will reach out to you)

3. Get your target lender list and attack it

4. Get PAID!

[32]

Try us in June – sell your first car and get $500 from OPENLANE!

mailto:[email protected]


Questions?

[33]

openlane/ara recovery remarketing program what it is how you

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