SINGAPORE - Singapore automotive company Dickson Group announced on Friday (May 19) an in-person live auction system for used cars, which it says will give used car sellers a better price for their vehicles.
The system differs from the typical sales process for a used car, which involves selling the vehicle directly to a used-car dealer, or offering it to a used-car sale platform, for example, Sgcarmart, Motorist and CarBuyer.
A vehicle that is sold to a used-car sale platform is auctioned to a pool of used-car dealers who bid behind closed doors, with the highest bid price being passed on to the seller.
Under its live auction system, Dickson purchases the used car from the owner first, and then puts it up for auction.
After a pre-sale inspection, Dickson will offer “a fair quotation based on current market prices and the vehicle’s condition”. If the owner agrees to the offer, that sum will be paid to him first.
If the subsequent auction price exceeds this sum, the now ex-owner will be paid the difference, minus fees. If the auction price is below the agreed price with Dickson, the former owner does not need to pay the difference, since the car had already been sold beforehand.
Kim Wah Boon, founder and CEO of Dickson Group, said: “Vehicle owners often face difficulties in getting the best prices for their pre-owned vehicles. They may be disappointed when a pre-agreed selling price is subsequently reduced when they are ready to sell their vehicle.
“And buyers, on the other hand, may worry that the condition of the vehicle is not up to their expectations when they collect it. These uncertainties and lack of transparency can affect the entire experience.”
The live auctions begin on July 18. Dickson says it plans to hold them every fortnight, with the expected waiting time between sale and auction being a week or two.
Bidders for the vehicle will come from a pool of “over 100 car dealers”, who are given a list of vehicles up for bidding. Dickson representatives said bidding is open only to dealers who are registered with the company.
The auction for each used vehicle lasts for one minute, with the dealers bidding on computers, all in a single auction hall. The vehicle owner can observe the bidding process from a private viewing room behind the hall.
Opinions from consumers and industry observers The Business Times polled were mixed. Some said it could be a value-add for private sellers; others were not sure whether live auctions added that much more transparency to the process.
Ong Xibin, who is looking to sell his seven-year-old European hatchback, said: “The idea of a physical auction sounds interesting. Provided the initial trade-in price quoted by Dickson is good, I won’t say no to the chance of earning more for my car.”
But the operations manager of a used-car agent who spoke to BT said: “From a consumer perspective, it seems win-win if you can secure a good price from (Dickson) that’s competitive, compared with the other services out there. But I’m not sure if the physical auction aspect makes a huge difference to any other bidding system in the end.”
The director of a used-car dealership echoed this sentiment, saying that while the time frame of the auction is different, the actual effectiveness of the live auction for consumers remains to be seen.
Whatever the outcome, innovations like this are an illustration of the increased demand and limited supply of pre-owned cars, say industry observers. High Certificate of Entitlement prices are discouraging new car purchases, which are a key source of used cars from trade-ins, and existing car owners are now holding on to their cars for longer. THE BUSINESS TIMES