Traditional remarketing funnels are no longer the only option. Upstream remarketing allows dealers, auctions, and consignors to acquire, dispose of, and process vehicles earlier and more efficiently.
As an organizer and observer of, by now, too many conferences to count, I’ve noticed a propelling theme: More talk of faster change driven by the next-gen tech emerging in an industry sector.
That is by no means a threat but an opportunity to embrace. In vehicle remarketing, the disruptive troika of digitization, online commerce, and artificial intelligence — present in many other industries — is transforming the entire transaction chain for wholesale and retail used vehicles.
One of the standout sessions at the 2024 Conference of Automotive Remarketing was “Extreme Upstream,” which focused on the next generation of vehicle remarketing.
The vehicle remarketing landscape is shifting rapidly. Traditional remarketing funnels are no longer the only option. Upstream remarketing allows dealers, auctions, and consignors to acquire, dispose of, and process vehicles earlier and more efficiently.
Panelists outlined how with these changes come challenges, especially as electric vehicles (EVs) enter the secondary market, and new digital tools redefine industry standards:
Upstream Remarketing Evolves
The concept of upstream remarketing originally meant buying vehicles at factory sales. Then, it expanded to include grounded units before they reached the general dealer network. Upstream means dealers can acquire vehicles directly from consumers while they remain in driveways or sell fleet and rental cars to their current drivers.
Technological investments fuel this shift, including digital auction platforms that provide deeper transparency into vehicle condition, history, and valuation. The result? Faster transactions, improved margins, and fewer unnecessary logistical costs.
Here Comes the Remarketing Paradigm Shift
At first, upstream remarketing involved a few rental and off-lease accounts, where sellers had to manually reach out to dealers and explain the logistics of these transactions. Over time, technology developed, enabling condition reports and vehicle inspections directly at dealerships, grounding locations, and marshaling yards. These changes paved the way for today’s digital auctions, where condition transparency is paramount, and buyers can access accurate mechanical evaluations instantly.
The key takeaway is that data has become the most valuable part of automotive remarketing. The quality of information presented to buyers now determines success. With AI-powered inspections, digital marketplaces, and predictive analytics, dealers and consignors can minimize risk, increase profits, and speed up the sales cycle.
The Rise of EV Remarketing
With growing volatility in the wholesale and used electric vehicle markets, the stability of resale values dominates remarketing conversations about EVs.
While some industry businesses hesitate, EVs will be an established segment. However, new challenges arise as EV-specific marketplaces and battery valuation tools emerge.
One of the biggest issues in EV remarketing is ensuring proper valuation. Unlike internal combustion engine (ICE) vehicles, an EV’s value depends on its battery health, which affects performance and resale value. Industry leaders are adopting battery-adjusted valuation models to give buyers more transparency.
Meanwhile, direct-to-consumer sales models pioneered by Tesla have disrupted traditional dealer-based remarketing. This shift and growing consumer demand for online transactions push dealers to embrace digital tools faster. The pandemic further expedited this shift, forcing remarketers to innovate and adapt.
Lessons from Fleet and Rental EV Sales
Hertz’s attempt in 2024 to offload many of their Teslas provides one example of EV remarketing challenges. While the mainstream narrative focused on the oversupply of EVs in the fleet sector, consumer education was an often overlooked factor.
Many renters found themselves unprepared for the unique logistics of EV operation, such as charging requirements and range planning, leading to a lackluster experience. That underscores a critical issue in the secondary EV market: education. Dealers and automotive remarketers must ensure that both their staff and customers are informed about EV ownership and its nuances and that staff is motivated to take the time to show the customers in the lot how to operate an EV.
How Digitization is Transforming Remarketing
Technology is at the heart of upstream remarketing. The digitization of the industry has created several key advancements:
- Consumer Acquisition Tools: Dealers can now acquire inventory directly from consumers using AI-driven pricing tools that ensure fair and accurate valuations.
- AI-Powered Inspections: Advances in machine learning allow for damage detection at a granular level, providing transparency to buyers.
- Real-Time Valuation Models: Instead of relying solely on historical data, new models incorporate real-time and predictive data, reducing the risks associated with price fluctuations.
- Instant Transactions: Vehicles can now be inspected, listed, and sold within hours, providing dealers with much-needed liquidity.
- Reduced Transport Costs: Vehicles often never have to leave their location before being sold, eliminating costly logistics.
While these tools enhance efficiency, they raise a key question: Can AI completely replace human expertise in remarketing? While algorithmic pricing and automated inspections are invaluable, the consensus remains that human intuition and experience will always be necessary for certain aspects of vehicle evaluation.
Multiple Roles of Auctions in a Digital-First World
Physical vehicle auctions have long been a cornerstone of the remarketing process. However, with the rise of digital auctions, many have questioned their future. If auctions fail to innovate, they risk becoming obsolete—much like Blockbuster in the era of Netflix.
However, auctions still have value, particularly for unique vehicles that require in-person inspection or for dealers who prefer a hands-on approach. The key for auction houses will be adapting to a hybrid model, where physical and digital sales complement each other. Some vehicles may require in-lane sales, while others are better suited for immediate digital transactions.
Additionally, auctions can use technology to streamline their processes. From AI-driven pre-sale inspections to virtual condition reporting, leveraging these tools will allow physical auctions to remain competitive.
Moving Ahead in Next-Gen Remarketing
The future of vehicle remarketing lies in speed, transparency, and digital integration. Industry professionals must leverage the latest tools while keeping and adding strong customer relationships.
Some general takeaways include:
- Adopt digital tools: AI inspections, automated pricing models, and online marketplaces are the future. Use them to stay ahead of competitors.
- Stay informed on EV trends: The used EV market is still developing, but understanding battery valuation and resale dynamics will determine the relevance.
- Educate: Whether it’s consumers, dealership staff, or remarketing professionals, continued learning separates leaders from the laggards.
- Balance automation with human expertise: Technology enhances efficiency, but human decision-making remains essential for optimal results.
Whether through upstream acquisition, digital marketplaces, or a deeper understanding of EV remarketing, the industry is moving through a major transition.
That means knowing how to pursue the most relevant technology and trends while avoiding those that may not apply. Each unique remarketing business and operation must work out its strategy.
