MILTON, Ont. -- Automotive auction house Manheim Toronto is refocusing on the heavy truck market, and opening its wholesale auctions to owner/operators.
The company held the first of its revamped heavy truck and equipment auctions June 7, and sold 78 of the 225 trucks consigned. Unlike most other auction houses, Manheim allows reserve bids, so sellers can put vehicles up for auction with no risk. If the truck doesn’t fetch the reserve, the owner can take it home at no cost, Cheryl Munce, general manager of Manheim Toronto told Truck News during an interview at the auction.
Reserve bids are among the many changes the company implemented to better suit the needs of the heavy truck market, Munce explained. The company, known mostly for its wholesale car auctions, has been hosting heavy equipment auctions for about 12 years, but Munce said the focus was lacking. After taking over as general manager about a year ago, Munce decided it was time to breathe new life into the truck auctions.
“I noticed the truck sale, which runs the first Thursday of every month, was diminishing and had been diminishing over the last several years,” Munce explained. “We didn’t have a strong focus on growing that piece of the business.”
Manheim hooked up with Transrep, a marketing firm run by industry veterans Ray Haight and Kim Richardson, and drew upon their contacts in the industry to find out how the auction could be improved to better meet the needs of the trucking industry.
“We didn’t have those trucking relationships before,” Munce said.
Taking Transrep’s recommendations to heart, Manheim has strayed from its dealer-only approach and now invites owner/operators to take part in the auction experience. It also lowered commissions so that public buyers pay a 5% fee while sellers pay 4%. Munce said the industry norm is 11% for both buyers and sellers.
Owner/operators need not be intimidated by the auction experience, Munce noted. The company has assigned staff to help walk O/Os through the process.
“The biggest advantage for an owner/operator is selection and the other advantage is the fact they can get a much better deal on the vehicle,” Munce explained. Typically, they’re buying it at wholesale (prices) here. They’re not necessarily going to be front-line ready, but even when you contemplate some of the mechanical investments that might have to be put into that unit, they are still paying way less than you would by having a retail markup.”
Trucks are sold as-is, so there is some risk involved, Munce admitted.
“It’s not like buying off a retail lot, where we would call them front-line ready,” she said. “The owner/operators need to know that, we’re going to be selling these units as-is.”
Prospective buyers are invited to inspect the trucks ahead of time and are welcome to bring along a mechanic. The June 7 auction featured industry guests ranging from insurance providers to an in-house finance company and even a fleet looking to recruit owner/operators. Theoretically, an O/O could buy a truck, finance it, insure it and find a job all in one place.
Munce said the new format also benefits equipment sellers. They receive payment the day of the sale (compared to the industry standard 21 days). Transrep’s Richardson said he’s hoping fleets will consider selling their used trucks at Manheim’s auctions, since they can set a reserve and run the truck through the auction with no risk. Parking on-site is free of charge, he added. If the truck doesn’t sell, they can take it back at no cost. By contrast, Richardson said auctions without reserve bids sometimes see owners buying back their trucks and then paying both the buyer and seller commissions rather than accepting a low offer.
Manheim Toronto is located at 8277 Lawson Road in Milton, Ont. on 200 acres of land. The next heavy truck auction is scheduled for July 5 at 10 a.m. and they will be held the first Thursday of every month. Munce said Manheim plans to gradually roll out its revamped truck auctions through its other Canadian operations in the months and years ahead.