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Auction Access to Charge Annual $100 Fee to Dealers
Appeared April 2008 - volume 5 - issue 4 - page 6
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Automotive retailers using the Auction Access card, which allows them access to more than 150 National Auto Auction Association auto auctions across the country, will be asked to pay a $100 annual fee under a recently announced plan.
Auction Access, a division of the privately held Auction Insurance Co., based in Birmingham, Ala., developed and began implementing the system in 1998 at the request of both dealers and auctions to make it easier for dealers to check-in, buy and sell at the busy locations.
Chuck Redden, president of Auction Access, said the $2 a week annual fee will allow for continuous upgrades to the ever-growing system and avoid a lot of problems associated with dealers who hold multiple cards or who “loan” them to non-dealers, who according to auction rules are ineligible to purchase vehicles at wholesale auctions.
“We were asked to revamp the system three years ago and we began the process,” Redden said. “Now we are finally there, but there are huge costs associated with the technology integration with the auctions and with maintaining and keeping secure the huge volumes of data we must keep.”
New dealers joining the system will pay $150 for the first year, and $100 each year thereafter. Each additional rep on a dealer’s account will cost an additional $60. Dealers already on the system will pay $100 and $60 for each additional rep annually. For instance, an existing dealer principal with three auction reps will pay $220 a year.
Redden said his firm expects push back from dealers who have been using the cars at no charge for many years, but notes that it’s important to have a fee associated with the valuable card, so that dealers keep their data with the company up to date. Dealers will have to renew their card each year when the fee is due and will be required to update all vital information.
“We’ve seen accounts where dealers had 25 cards out there and some were held in the name of people who were deceased,” Redden said. “By having a cost associated with the card, dealers will think twice about ‘loaning’ their cards out to unauthorized users.”
While the auctions have paid and will continue to pay Auction Access for its services, the costs associated with software development and customer service are enormous, Redden said. The company currently employs 55 people, including 13 developers, 37 customer service personnel and five managers, including him.
Auction Access will provide additional benefits to cardholders when the fees come due. Auction Access card holders will be protected by Travelers Insurance Co. in the event of identity theft, similar to other programs by various credit card companies.
“In addition we have in place a travel and accident insurance policy,” Redden said. “Card holders will have insurance in the event of an accident while going to or from and while they are at a participating auction.”
He said that in the very near future additional card holder benefits will be announced.
Redden said dealers he knows appreciate the flexibility and ease of use the Auction Access card gives them.
“If we signed up a dealer on a Wednesday and collected and verified all his information — dealer’s license, credit, floorplan etc., he could be buying either online or at the physical sale at more than 150 sales by Friday.”
This means the dealer doesn’t have to wait in line to verify information each time he goes to the same auction or if he goes to an auction in a different state. They can also browse inventory and shop online at as many auctions that have online sales and accept the card.
Currently all ADESA and Manheim auctions accept the Auction Access card, as well as 44 independent auctions.
“We have nine new independent auctions in the pipeline, but it does take time to integrate our technology with each auction since they always have different systems in place,” Redden said. “We would rather roll out the system slowly than have problems, since the consequences are usually pretty big.”