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UCW Recap: Opportunity Through Chaos

At Used Car Week 2020, I talked with Zach Hallowell from Manheim Digital Solutions about both the challenges and opportunities we observed and experienced across the auto lending and repo industries during COVID-19.

One key factor we discussed was how much the pandemic has changed buyer behavior. Zach talked about how, virtually overnight, Manheim decided to transition to all digital sales as a “massive wave of volume” came into the auction space. In addition to online sales, both wholesale and retail auto sales had to shift quickly to accommodate the new contactless way of doing business that consumers were demanding. This meant coming up with new solutions including home test drives, home delivery and digital retailing. Zach noted that, pre-COVID, 52% of Manheim’s sales were to digital customers. At the time of UCW, they were at about 80% even with dealer locations open again. He believes this fundamental change in buyer behavior isn’t going away, but that the industry has shown great resilience, flexibility and creativity throughout the crisis and will be better for it in the long run.

On the repo side, we saw a drop in hotlist size of about 80% because of the moratoriums put on collection and repo activities during the height of the pandemic. The repo business essentially shut down, so we saw agencies get creative in how they kept their people working by continuing voluntary pickups (which weren’t halted during the moratorium). DRN also partnered with MVTrac on a Pay to Scan program that paid affiliates weekly to continue scanning. We paid out close to $4 million with this program, but it kept agents working and the scans are a valuable addition to our database that we can use going forward.

In terms of opportunities coming out of the pandemic, Zach said that the new digital channel created over the last several months has become a virtual inventory, which opens up possibilities for wholesalers to find cars without taking on as much inventory risk. Auto retailers are also adjusting to new ways of selling. Technology has advanced on both sides to enable the business to stay digital in the future, including imaging tools and online mechanical vehicle assessments.

Both Zach and I believe that heightened focus on communication and engagement with employees will be another great lesson that we can take forward even as businesses continue to recover.

At the end of the day, no one could’ve imagined or prepared for what the pandemic did to industries of all kinds – not to mention our communities, families, our culture and everyday ways of living. The bright side as we’ve entered 2021 is that businesses (and individuals) have learned valuable lessons about flexibility, creativity and valuing people – and that will serve all of us well in the future. Contact us here, if you’re interested in working with DRN!

–       Jeremiah Wheeler, EVP & GM

About the author:

Jeremiah Wheeler

Jeremiah Wheeler

Jeremiah is the President of the DRN & MVTRAC business units for Motorola Solutions Inc. (NYSE: MSI) leading operations, business development, data collection, government affairs and strategy efforts for the automotive, insurance, retail, and financial services industries. Prior to joining the company more than 11 years ago, Jeremiah led one of the largest repossession companies in the US, with more than 65 Trucks, covering 6 states and also had national coverage with the top 20 auto lenders for recovery services. He serves on three committees for the Receivables Management Association International, three committees for the American Financial Services Association, is an advisory board member for the American Recovery Association and is a founding member of the Auto Intel Council with Cherokee Media Group. He is very involved with numerous other organizations helping to promote legislative activities, fundraising and awareness campaigns. Jeremiah has been married for 20 years, has 2 daughters and enjoys spending time traveling with his family, teaching and mentoring students, mountain biking and most anything outdoors.