Dickson Group, Singapore automotive company made an announcement on 19th May 2023 of an in-person live auction for used cars, which it states will offer sellers a better price.
The system is different from the typical process involving offering the vehicle to a used car sale platform or selling it to a used car dealer for eg. Motorist, CarBuyer and Sgcarmart. A vehicle sold to a platform will be auctioned to a pool of used car dealers who will bid behind closed doors following which, the highest price is passed on to the seller. Dickson first purchases the used car under its live auction system, from the owner. Following a pre-sale inspection, it will offer a fair quotation that is based on the condition of the vehicle and current market prices. If the owner agrees to the offer, that sum will be first paid to him. If the subsequent auction price is more than this amount, the now former owner will be paid the difference minus fees whereas if the auction price is lower than the agreed price with Dickson, he is not required to pay the difference.
Founder and Chief Executive of Dickson Group, Mr. Kim Wah Boon stated that often vehicle owners face difficulties in obtaining the best prices and that they could be disappointed when a pre-agreed selling price is later reduced when they are ready to sell their vehicle. Buyers, on the other hand, might be concerned that the condition of the vehicle may not be up to their expectations when they collect it. The whole experience could be affected by these uncertainties and lack of transparency.
The live auctions will commence on 18th July 2023 with Dickson planning to hold auctions once in every 2 weeks with the expected time between the sale and auction being a week or two. Bidders will come from a pool consisting of more than 100 car dealers, while bidding will only be open to dealers registered with the company, according to Dickson representatives.
All the dealers will bid on computers in a single auction hall, and the auction for each vehicle will last for a minute. The vehicle owner will be able to observe and process from a private viewing room behind the hall. The industry observers and consumers polled by The Business Times were of mixed opinions. Some shared the view that it could be a value add for private sellers, while others were not sure whether live auctions added more transparency to the procedure. Motorist Ong Xibin, looking to sell his 7-year-old European hatchback is of the belief that the idea of a physical auction sounds attractive. “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 stated that it seems win-win from a consumer perspective if you could secure a competitive price from Dickson in comparison with other services out there, but he said that ultimately he was not sure if the aspect of the physical auction makes a big difference to any other bidding system. The director of a used car dealership echoed this sentiment saying that the actual effectiveness for consumers is yet to be seen, even though the time frame of the auction is different.
Whatever the result, Industry observers say that innovations like this illustrate the limited supply and increased demand for pre-owned cars. Existing owners are presently holding on to their vehicles for longer since new car purchases are being discouraged by high certificate of entitlement prices which are a major source of used cars from trade-ins.
