Cox Automotive involved in three out of four automobile transactions in the U.S.

"JCAlan" (jcalan) 08/15/2016 at 09:25 • Filed to: None

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Your next used car is probably sitting on a giant auction lot right now, waiting for the right auto dealer to come along and buy it. Chances are, it’s a Manheim auction. They boast over 110 locations in North America (basically every major city), and the sale of over !!!error: Indecipherable SUB-paragraph formatting!!! . They’re the biggest in the game. Cox Enterprises has owned Manheim since 1968.

Whether your new car is on a Manheim site or not, the dealer that buys it can rest assured that he accurately knows the condition of the vehicle, because he looks at an inspection report that is provided by a company called AiM. !!!error: Indecipherable SUB-paragraph formatting!!! is a strategic partner with Manheim, and !!!error: Indecipherable SUB-paragraph formatting!!! of the company.

If the dealer doesn’t have the cashflow to pay for the car upfront, that’s no problem. He can do what is called floor planning, which is essentially a loan for a dealer to buy inventory. !!!error: Indecipherable SUB-paragraph formatting!!! offers this service, and over 23000 dealers have signed on. NextGear Capital is a subsidiary of Cox Automotive.

Now that the dealer owns your car he must find a way to get it from the auction to his location. Luckily, there is a company called !!!error: Indecipherable SUB-paragraph formatting!!! , which conveniently connects anyone who wants to ship a car with someone who is willing to ship it. Central Dispatch is owned by Dealertrack, which of course is owned by Cox. More on that later.

Your car is now at the dealership, and the dealer must determine what price to put on it to effectively market it. For this he uses a tool called vAuto, which happens to be the same tool that told him to buy your car in the first place, at that specific auction, and at the exact price he paid for it. vAuto is a company founded by revolutionary retail automotive thinker !!!error: Indecipherable SUB-paragraph formatting!!! . Pollak managed to get old-school dealers to embrace the digital changes occurring in the industry by showing them how to use actual data, rather than their guts, to make pricing and buying decisions. All of a sudden dealers were talking about how quickly they turned their inventory instead of how high their grosses were. In 2010 Pollak !!!error: Indecipherable SUB-paragraph formatting!!! , which is actually owned by Cox.

Now it’s up to you to find your car. If you’re like !!!error: Indecipherable SUB-paragraph formatting!!! , you will probably run a search on Autotrader, which was formed by Cox in 1999 when it merged with AutoConnect and Trader Online. Or maybe you find it by doing a simple Google search and clicking on an ad. These types of pay-per-click transactions are negotiated by a company called !!!error: Indecipherable SUB-paragraph formatting!!! . In 2013, !!!error: Indecipherable SUB-paragraph formatting!!! , which is part of AutoTrader, which is all owned by Cox.

These searches will take you to the dealer’s website. Since the dealer wants a great-looking and professional website, he uses a company called !!!error: Indecipherable SUB-paragraph formatting!!! to host his inventory. In 2013, !!!error: Indecipherable SUB-paragraph formatting!!! , which was later bought by Cox.

When you find the car, you will want to make sure that you’re getting a good deal. For this, you will go to consumer trusted website Kelly Blue Book to look up the value. Of course, !!!error: Indecipherable SUB-paragraph formatting!!! in 2010.

After you contact the dealer, your information is logged in their customer relationship management software. No worries, you’re in good hands here. The company VinSolutions manages over !!!error: Indecipherable SUB-paragraph formatting!!! between customers and dealers every month. As we already discussed, !!!error: Indecipherable SUB-paragraph formatting!!! .

When you get to the dealership to pick up your car, you will need help arranging financing, and there will be a ton of paperwork to do. Luckily Dealertrack has you covered here. Your credit information is safely transmitted to potential lenders for review using their system. Dealertrack will also handle all of the forms through the dealership’s DMS. Dealership management systems are the massive accounting software programs that dealerships use for all departments. As you already know, Cox !!!error: Indecipherable SUB-paragraph formatting!!! in 2015 for 4 billion dollars. Oh by the way, that source I just linked for that last bit, The Atlanta Journal-Constitution, is also owned by Cox.

Do you realize how crazy this all is? The company that consumers use to locate vehicles they desire and research what to pay for them is the same company that tells a dealer what car he should buy for his inventory and what to pay for it, and is the same company that sells him that very car, finances the transaction, ships the car, and handles arranging the consumer financing and all the end paperwork. They control the entire process, and consumers aren’t even aware of it.

There’s even more. Xtime, Go Financial, Stockwave, HomeNet, DealShield, OVE.com, Ready Logistics and so many more. I defy you to find a comprehensive list of every company that Cox has an interest in or has bought out. Who even knows what all they’re into? They are the vertical acquisition kings. They have spent the last several years buying up any moderately successful dealer services oriented business model that exists. I predict that they will soon offer retail products such as service contracts and consumer auto loans, but that’s just my hunch.

Granted, not all pieces of the puzzle fall in place in every transaction, but Cox Automotive president Sandy Schwartz was recently !!!error: Indecipherable SUB-paragraph formatting!!! , “We touch three out of four vehicle transactions in some way.” Three out of four! Folks, I don’t pretend to understand the complexities of the law, but if this isn’t a monopoly over an industry then we’ve never seen one.

I can tell you from my experience dealing with the Autotrader side of the company that they make sure that a small buy-in from a dealer gets them nowhere. With this company they think big, and dealers have to spend big to get results. Do you want your listings buried behind everyone else’s in the “standard” or “featured” listings, or do you want to pony up tens of thousands per month to actually get them seen in the premium listings? Their sales pitches are as pushy as a time-share presentation.

Schwartz says !!!error: Indecipherable SUB-paragraph formatting!!! , but going by their mantra that their brands are “better together” and with !!!error: Indecipherable SUB-paragraph formatting!!! of the automotive giant taking a break from acquiring to regroup and go into “integration mode,” what exactly would stop them from telling dealers to take all of their services or none? Surely every dealership relies on some service that Cox offers.

When one company controls too much of an entire industry, it’s bad for consumers. Am I the only one that is getting uncomfortable with the potential strangle-hold that Cox holds on the auto retailing business?

ADabOfOppo; Gone Plaid (Instructables Can Be Confusable) > JCAlan 08/15/2016 at 09:36

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Reynold and Reynolds holds a near monopoly on dealership/automotive forms. They are headquartered in Dayton, and are a terrible company. Since they are privately owned, they can fire you for smoking. Not pot, just tobacco. While I am all for a company encouraging a healthier workforce, I think that’s pushing it; detestable as I find smoking to be, people are allowed to do to their own bodies as they please, on their own property.

xyzabc > JCAlan 08/15/2016 at 09:37

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There’s a joke here....

PS9 > xyzabc 08/15/2016 at 09:40

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Only 3 out of 4? Wonder where they’re getting coxblocked...

MontegoMan562 is a Capri RS Owner > JCAlan 08/15/2016 at 09:42

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Holy shit.

That’s insane that they own so much (and I think KBB is the most worrisome one because it tells the consumer what to pay).

This was a well researched write up.

JCAlan > ADabOfOppo; Gone Plaid (Instructables Can Be Confusable) 08/15/2016 at 09:45

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For decades it’s been a shared monopoly of Reynolds or ADP, and then a handful of small insignificant players. Dealertrack is going into it with gusto, and while they are unlikely to dethrone the giants, I could see them getting a significant market share since so many dealerships already use their other services for various things.

JCAlan > MontegoMan562 is a Capri RS Owner 08/15/2016 at 09:46

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Thank you!

PS9 > JCAlan 08/15/2016 at 09:48

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Cox Enterprises has owned Manheim since 1968.

Guys...you gotta rename your company. Just pick another word. Any word at all. You have to do your part to keep sentences like these from being written.

BKosher84 > JCAlan 08/15/2016 at 11:31

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So what you’re saying is that Doug Demuro likes the Cox.

xyzabc > PS9 08/15/2016 at 13:49

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Was thinking...folks have to deal with a lot of Cox when buying a used car.

Future next gen S2000 owner > xyzabc 08/15/2016 at 14:11

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Cox has grown right before my eyes, but I’m a little worried Cox is too big.

xyzabc > Future next gen S2000 owner 08/15/2016 at 14:24

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“Please...my name is Richard. Don’t call me Dick in public.”

KatzManDu > JCAlan 08/16/2016 at 10:07

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There used to be a company called AFC, or Automotive Finance Corporation which provides loans to dealers so they can buy cars at auction and then have them in inventory. I believe the term to use is “floorplan loans.”

rbb > xyzabc 09/15/2017 at 10:25

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Hello, I am n employee of Manheim and it is a great company that treats it’s employees very well. I have worked here for 9 years and the management here is awesome. Cox as a whole is a great company to work at. Now of course you will have your bad apples in management but if they are identified the company will deal with them in the appropriate fashion.