Inside Manheim’s 4,500 Car-a-Week Used Car Auction

“Nine-and-three!Nine-nine!Nine-and-three!” an auctioneer at Manheim New Jersey chanted rapidly. “We have a four?” A split-second later: “Nine-and-four!”

It sounded like gibberish to me. To dealers, it was a call to action.

On Wednesday, I attended the massive used-car auction and heard a blur of dealer names, vehicle models, and bids rising in a flash. Around me, a mix of cars — from beat-up Honda Civics to freshly off-lease BMW X7s — moved through 17 in-person and seven online auction lanes.

Each week, the roughly 350-acre lot, one of 80 Manheim auctions in the US, lists about 4,500 vehicles. Manheim is owned by Cox Automotive.

Used-car auctions offer an early read of auto industry trends. For comparison, it takes years for automakers to design, build, and launch fresh vehicles that respond to car shoppers — but at regional used-car auctions, dealers are buying the used vehicles they think customers will want in a few weeks.

And each car is a several-thousand-dollar bet. Across the US, Manheim says it handles more than 7 million vehicles each year.

So, I got a close-up look at the controlled chaos and choreography it takes to keep one of those 80 lots moving.

A highly choreographed used car dance

Cars arrive at Manheim New Jersey with very different histories. Rental fleets, automakers, dealerships, and banks all send vehicles to its lots in varying states of repair.

During my visit, I spotted everything from a first-generation Ford Edge that must be roughly 15 years old to a Toyota bZ Woodland, which just started arriving at US dealerships months ago.

And the cars do not simply appear in an auction lane and disappear with the winning dealer. Work starts well before sale day.

Incoming vehicles crawl through Manheim’s fixed image tunnels at about 5 mph. The scanners assess details including body panels, tire tread, and the undercarriage for potential issues.

From there, sellers can choose to have vehicles detailed, repainted, repaired, or photographed again before they run through the auction bays. At the New Jersey site, the work can range from touching up a paint scratch to replacing an engine.

Or, if the work is not worth it, they can send a car through as-is.

Manheim says its network employs roughly 1,500 auto technicians and reconditioning experts.

The early warning system says: America loves a hybrid

Grace Huang, the president of Cox Automotive Inventory Solutions, told me that gas prices are having an outsize impact on the market.

Right now, national demand for hybrids has spiked — as have their prices. Manheim says a hybrid spends just about 25 days on a dealer lot before it’s sold. A healthy days-on-lot average for a used car is typically around 40 days.

Interest in EVs has a nearly one-for-one correlation with gas prices, Huang added. If the price of gas goes up, so too does interest in EVs.

Overall, Manheim says used-vehicle retail prices were up 4% through October this year, even as used retail sales fell by 2%. And the wholesale value of non-EVs rated above 40 mpg rose 9.9% from January, while those below 15 mpg lost 15% of their value.

And Alan Wang, senior vice president of physical services and auctions, told me that Manheim is also privy to trends in auto theft. Recently, they’ve seen an uptick in criminal activity around BMWs and Cadillac Escalades.

Their lots are surrounded by military-grade fences. While we were driving around the massive lot, someone asked the driver what would happen if he slammed our Ford Transit into a barricade.

“The engine would go into the backseat,” he said.

The auctioneer keeps their job

Manheim has an old-timey feel to it — and that’s aided by those fast-talking auctioneers. Apparently, they’re not going away anytime soon.

Huang said there is technology that could handle the basic mechanics of bidding, but it has not replicated an auctioneer’s ability to turn a sale into a personal challenge for a dealer.

“Our auctioneers are really good at saying, ‘Dealer A, I know you want this Jeep,'” she said.

Some of those auctioneers use the same talents elsewhere, too. Huang said many also work cattle auctions when they are not hawking cars.

Before the pandemic, about 30% of Manheim New Jersey’s sales happened online, the company said. When COVID pushed dealers out of the auction lanes, Manheim went fully digital. Auctioneers still stood in person and called the sales — wearing PPE — while dealers placed bids through the company’s app.

Much of the business has stayed online. Manheim says roughly 70% of purchases now come from digital buyers.

“That’s why we could have you here,” Huang told me. “Before the pandemic, it was too jam-packed to have anyone come visit. The whole auction was packed shoulder-to-shoulder.”