OPENLANE, Inc. (OPENLANE) operates as a digital marketplace for used vehicles, connecting sellers and buyers across North America and Europe to facilitate fast, easy and transparent transactions.
The company’s portfolio of integrated technology, data analytics, financing, logistics, reconditioning and other remarketing solutions, combined with its vehicle logistics centers in Canada, help advance its purpose: to make wholesale easy so its customers can be more successful.
In 2024, the company’...
OPENLANE, Inc. (OPENLANE) operates as a digital marketplace for used vehicles, connecting sellers and buyers across North America and Europe to facilitate fast, easy and transparent transactions.
The company’s portfolio of integrated technology, data analytics, financing, logistics, reconditioning and other remarketing solutions, combined with its vehicle logistics centers in Canada, help advance its purpose: to make wholesale easy so its customers can be more successful.
In 2024, the company’s marketplaces facilitated the sale of approximately 1.4 million used vehicles, making OPENLANE a leading digital wholesale marketplace for used vehicles in North America. Vehicles on the company’s marketplaces are typically sold by commercial sellers, including vehicle manufacturers and their captive finance companies, financial institutions, commercial fleet operators and rental car companies (collectively commercial customers), as well as new and used vehicle dealers, to franchise and independent used vehicle dealers (collectively dealer customers). The company generates revenue through auction fees charged to vehicle sellers and buyers, as well as by providing value-added ancillary products and services, including transportation logistics, reconditioning, vehicle inspection and certification, titling, administrative and collateral recovery services and floorplan financing, as well as SaaS-based remarketing and other supporting technology services. The company facilitates the transfer of ownership directly from seller to buyer, and generally, it does not take title to, nor ownership of, vehicles sold through its marketplaces. However, the company also sells vehicles that it has purchased, for which it does take title and record the gross selling price of the vehicle sold through its marketplaces as revenue.
For commercial sellers, the company’s software platform supports more than 40 private label digital remarketing sites and provides comprehensive solutions to its commercial customers. For dealer customers, the company’s platform facilitates multiple sale formats, data-driven insights and integrated services to automotive dealers, coast-to-coast in the United States, Canada and Europe.
OPENLANE Europe is the company’s digital marketplace serving customers in the United Kingdom and Continental Europe through a consolidated online wholesale used vehicle platform. Its geographic network and diverse product offerings enable it to leverage relationships with providers and buyers of used vehicles.
An important component of the company’s services to buyers is providing short-term inventory-secured financing, known as floorplan financing. This is provided primarily to independent used vehicle dealers (independent vehicle dealers) through its wholly-owned subsidiary, AFC, which has approximately 90 locations (hybrid of physical locations and a digital servicing network) throughout North America.
The company supports the majority of commercial sellers in North America with its technology and digital applications may provide an opportunity to expand the total addressable market for dealer-to-dealer transactions.
Industry
The company supports the majority of commercial sellers in North America with its technology and digital applications may provide an opportunity to expand the total addressable market for dealer-to-dealer transactions.
In the North American wholesale used vehicle marketplace industry, the largest providers of digital marketplaces include OPENLANE and ACV Auctions. In the North American wholesale used vehicle marketplace industry, the largest providers of physical auctions include Manheim by Cox Automotive (Manheim), Carvana's used vehicle auctions operated as ADESA and America's Auto Auction.
AFC's floorplan financing also supports independent vehicle dealers with non-auction purchases. In addition, AFC offers value-added services that generate fee-based, non-interest revenue.
Business Strategy
The company focuses on the following three enabling priorities:
First, by delivering the best integrated marketplace - expanding its marketplace to include more buyers and more sellers and offering the most diverse inventory available.
Second, by delivering the best technology - innovative products and services that help the company’s customers make informed decisions and achieve better outcomes.
And third, by delivering the best customer experience - keeping its marketplace fast, fair and transparent, making it easy for customers to transact and making OPENLANE the most preferred - and most utilized marketplace.
This progressive strategy reflects the shifting landscape of the remarketing industry and automotive sector, the evolving needs and expectations of the company’s customers and the potential power and customer benefits inherent in a fully digital marketplace. The strategy builds on OPENLANE’s integrated technology, broad data analytics capabilities, and portfolio of financing, logistics, reconditioning and other remarketing solutions.
In 2024, the company built on the momentum created by consolidating all of its marketplace platforms under the OPENLANE brand in 2023, and further leveraged its unified marketplace – bringing together all of the buyers, all of the sellers and all of the vehicles all in one place. The company invested in new technology, leaned into its go-to-market efforts - particularly in the U.S. market, and it began focusing on improving and enhancing the customer experience - an area where it sees opportunity for differentiation.
Delivering the Best Marketplace: OPENLANE is focused on leveraging the combined power of the company’s growing dealer-base with its strong relationships and market position with commercial customers.
Growing Dealer Consignment: The dealer consignment business represents approximately 43% of the company’s transactional volume. Last year, the company consolidated many of the marketplace platforms as part of its OPENLANE marketplace launches in the U.S., Canada, and the EU. The combined OPENLANE platform provides dealers with fast, easy, mobile-app enabled solutions to sell and source inventory from other dealers. In North America, the company’s digital marketplace also features exclusive off-lease inventory not available on any other competitor digital platform or physical auction. The company’s OPENLANE marketplaces provide comprehensive vehicle condition reports, greater transparency into bidding activity, and real-time market price discovery on listed vehicles. Over the last few years, it has integrated and leveraged technology, capabilities and staff from these businesses to deliver the best digital dealer-to-dealer solution in the market.
Expanding the company’s Commercial Business: The commercial consignment business represents approximately 57% of its transactional volume, and growing its share in this area remains a strategic priority. The foundation of OPENLANE’s commercial offering is its digital platform powering more than 40 private label websites for its commercial OEM and financial institution consignor customers. The company continues to invest in technology to enhance the digital experience for its commercial customers and continue innovating on these platforms.
Delivering Strong Performance in the company’s Floorplan Business: AFC (Automotive Finance Corporation, a wholly-owned subsidiary of ADESA, and Automotive Finance Corporation's subsidiaries and other related entities) is a leading provider of floorplan financing and affiliated solutions to independent dealers across North America. The company is focused on increasing the attach rate of its finance offerings across its marketplaces, growing share across the broader floorplan finance market, and deploying innovative new services and offerings. Additionally, AFC maintains best-in-class safeguards and processes to identify, mitigate and manage risk across their portfolio.
Delivering the Best Technology: The company intends to continue investing in innovation in its digital platforms, data analytics capabilities and digital talent that power its marketplaces, make wholesale easy for its customers and differentiate its marketplace from its competitors.
Enabling Capabilities: As the wholesale used vehicle industry continues to migrate to digital; the company’s capabilities need to evolve to meet the increased customer needs and expectations in a digital marketplace. It is enhancing the company’s imaging, inspection and vehicle representation capabilities to more closely simulate seeing and touching a vehicle in person. The company also intends to continue to build on and diversify its data and analytics capabilities, providing its customers with actionable information to help them make better, more informed buying and selling decisions.
Vehicle logistics center locations and operations: In the company’s Canadian market, its15 vehicle logistics center locations serve as local and regional hubs for its customers and OPENLANE's digital simulcast auctions. They also allow the company to provide comprehensive services to on-premises and off-premises customers, including inspection, reconditioning, mechanical work, storage, and logistics.
Delivering the Best Customer Experience: The company is highly focused on simplifying the customer experience at every step of the process, from registration, to activation, to transaction and post-transaction services. Simplification also allows its business to more quickly develop and deploy innovation and better respond to changing customer needs and market conditions. The company’s marketplaces feature consolidated technology platforms that leverage the best features and capabilities from across its offerings, provide dealers with greater choice and flexibility and deliver an easier, more streamlined customer experience. The company has also been centralizing many key customer supports and administrative functions to ensure a faster, more predictable and consistent experience for its customers. During 2024, the company implemented new processes and metrics to measure its progress in creating a differentiated customer experience, and to capture customer feedback that directly contributes to its product roadmap, sales approach and marketing activities.
Business Segments
The company operates through two reportable business segments: Marketplace and Finance.
Marketplace segment
OPENLANE is a leading digital wholesale used vehicle marketplace in North America. OPENLANE is committed to leading the digital transformation of the wholesale automotive remarketing industry and supporting its customers by providing fast and transparent digital marketplaces for buying and selling used vehicles. The company’s marketplace offerings allow it to offer vehicles for sale from any location. Digital marketplace sales are initiated online and include OPENLANE U.S., OPENLANE Canada and OPENLANE Europe.
Vehicles available on the company’s marketplaces include vehicles from commercial customers, such as off-lease vehicles, repossessed vehicles, rental vehicles and other fleet vehicles that have reached a predetermined age or mileage, as well as vehicles from dealer customers turning their inventory. Liquidity and the breadth and selection of inventory offered on the company’s marketplaces are essential to its sellers and buyers.
Via online or mobile application access, the company offers wholesale vehicle marketplaces, as well as value-enhancing ancillary services in an effective and efficient manner to maximize returns for the sellers of used vehicles. The company’s online marketplace’s function 24 hours a day, 7 days a week, providing its customers with maximum exposure for their vehicles and the flexibility to offer vehicles at buy now prices or via marketplace sales that last for a certain amount of time. The company also provides customized ‘private label’ selling systems (including ‘buy now’ functionality, as well as other online sales formats) for its customers. At OPENLANE Canada vehicle logistics center locations, vehicles are typically offered for sale on at least a weekly basis and the marketplace sales are streamed using a simulcast technology so that remote bidders can participate via the company’s online products.
The company generates revenue from auction fees paid by vehicle buyers and sellers, as well as fees from related services.
The company also sells vehicles that it has purchased, which represent approximately 2% of the total volume of vehicles sold. The vehicles that it purchases (as opposed to consign) are remarketed through its marketplace platforms.
Customers
Sellers of vehicles on the company’s digital marketplaces primarily include commercial customers; and franchise and independent dealer customers. Buyers of vehicles on the company’s marketplace platforms primarily include franchise and independent dealer customers.
Services
The company’s digital marketplaces also provide a full range of innovative and value-added services to sellers and buyers that enable it to serve as a one-stop shop to service its customers' needs. These services include pre and post-sale inspections, transportation and logistics, title services and floorplan financing. For vehicles at the company’s vehicle logistics centers, it can also provide reconditioning and mechanical work. Many of these services may be provided or purchased independently from the marketplaces, including:
Digital Marketplace Services: The company provides marketing and advertising for the vehicles on its marketplaces, dealer registration, storage and security of consigned inventory, marketplace vehicle registration, condition report processing, photo services, pre-sale lineups, sales of vehicles by licensed auctioneers, arbitration of disputes, post-sale inspections, title processing, clearing of funds and sales results reports. In Canada, the company’s vehicle logistics centers also provide reconditioning services to prepare vehicles for digital sale.
Transportation Services: The company provides transportation services utilizing its own equipment and personnel, as well as licensed and insured third-party carriers. Through the company’s proprietary technology that provides automated vehicle shipping services, customers can instantly review price quotes and delivery times, and vehicle transporters can check available loads and receive instant notification of available shipments.
Inspection Services: The company inspects many of the vehicles that are offered for sale in its marketplaces through a combination of its employees and third parties using its proprietary technologies. In addition, the company provides vehicle condition reporting, inventory verification auditing, program compliance auditing and facility inspections to non-marketplace customers. Field managers are equipped with handheld computers and digital cameras to record all inspection and audit data on-site. This technology is also utilized at the company’s vehicle logistics center locations, and that the expanded utilization of comprehensive vehicle condition reports with pictures, video and sound facilitates dealers sourcing vehicles digitally.
Title and Repossession Administration and Remarketing Services: The company provides end-to-end management of the remarketing process for repossession customers, including titling, repossession administration, inventory management, marketplace selection, pricing and vehicle representation. It also operates a proprietary digital platform for repossession management that helps repossession companies and agents manage their accounts by providing a secure, encrypted software platform to track repossession orders.
Vehicle Research Services: The company provides dealers real-time vehicle information, such as pricing, history reports and market guides. The mobile app allows dealers to scan VINs using their mobile device, view marketplace offered lists and instantly access vehicle history reports and market value reports. The company offers access to vehicle history resources, such as CARFAX and AutoCheck, as well as pricing guides, such as Black Book, Kelley Blue Book, J.D. Power and Galves. The company’s offering also includes a comprehensive wholesale and retail market report for all markets in the United States.
Sales and Marketing
OPENLANE recognizes that the company operates a digital marketplace in a relationship business. So, it takes an omni-channel approach to sales and marketing, leveraging leading marketing technology and approaches and supplementing it with high-touch, personal interaction.
The company’s marketing approach addresses every step of the customer journey, from awareness, to interest, to engagement to loyalty. The company’s digital ads and content marketing practices effectively target potential new customers, while its direct email, social media and additional advertising strategies are aimed at generating logins and encouraging transactions on the marketplace. It is highly visible at most local and national level franchise and independent dealer events and associations, and the company manages an active public speaking/visibility calendar to keep its story and its executives in front of customers.
The company supplements these digital and/or online approaches with telephonic and face-to-face human interaction at each step of the journey, via a multi-tiered inside and outside sales organization. For the company’s large scale commercial sellers and multi-store national dealer accounts, it has dedicated relationship managers who play a hands-on, strategic role. They partner closely with the customers, providing market data and proprietary insights to help coordinate sales, better utilize OPENLANE’s service offerings and optimize their business.
For local-market franchise and independent dealers, local sales representatives play a critical role in the new customer on-boarding process by visiting newly enrolled dealers at their dealership to help them login, set preferences and began transacting as quickly as possible. Dealerships are visited regularly by the company’s sales representatives to maintain the relationship, walk through their inventory and help the dealers make decisions on what to buy, sell or hold. These local representatives focus on the dealer sellers and buyers and are complemented by a centralized team of inventory consultants matching buyers and inventory.
This inside sales team reaches out by phone or email to notify customers of promotions or specials, encourage additional sales and/or to ensure customers are receiving the assistance and guidance they need from the company’s local sales teams in the market. Both the local sales representatives and the inventory consultants are managed by a corporate team focused on developing and implementing standard best practices and expanding relationships with major dealer groups.
Competition
In the North American wholesale used vehicle industry, the company competes with several digital marketplace providers, including ACV Auctions, EBlock and others. It also competes with physical auction providers, including Manheim, ADESA (Carvana) and America's Auto Auction. In addition, used car retailers, such as CarMax, have developed proprietary platforms for selling vehicles to other dealers.
The company’s digital marketplaces primarily compete with large European digital remarketers, including BCA Group and others.
Finance segment
AFC is a leading provider of floorplan financing to independent vehicle dealers. The company provides short-term inventory-secured financing, known as floorplan financing, to independent vehicle dealers through a hybrid of physical locations and a digital servicing network throughout North America. In 2024, AFC serviced approximately 1.6 million loan transactions, which includes both loans originated and loans extended, or curtailed.
The company sells the majority of its U.S. dollar-denominated finance receivables without recourse to a wholly-owned bankruptcy remote special purpose entity, which sells an undivided participation interest in such finance receivables to a group of bank purchasers on a revolving basis. The company also securitizes the majority of its Canadian dollar denominated finance receivables through a separate third-party facility.
The company generates a significant portion of its revenues from fees. These fees include origination, floorplan, curtailment and other related program fees. When the loan is extended or paid in full, AFC collects all accrued fees and interest. In addition, AFC provides liquidity for customer trade-ins which can encompass settling lien holder payoff. The company also provides title services for its customers. These services are provided through AFC's digital servicing network, as well as its physical locations throughout North America.
Customers and Locations
Floorplan financing primarily supports independent vehicle dealers in North America who purchase vehicles on the company’s marketplaces or those of its competitors and for non-auction purchases. In 2024, approximately 88% of the vehicles floor planned by AFC were vehicles purchased by dealers on its marketplaces or through a competitor. The company’s ability to provide floorplan financing facilitates the growth of vehicle sales for independent vehicle dealers. As of December 31, 2024, the company serviced customers through approximately 90 locations (hybrid of physical locations and a digital servicing network) in markets with a significant concentration of AFC customers. In addition, the majority of U.S. titles are processed and held in a centralized location, enabling field personnel more time to focus on its dealers.
As of December 31, 2024, AFC had approximately 11,600 active dealers.
Sales and Marketing
AFC approaches and seeks to expand its share of the independent dealer floorplan market through a number of methods and channels. The company targets and solicits new dealers through both direct sales efforts at the dealer's place of business, as well as location-based sales at one of its physical locations, vehicle logistics centers or competitor auctions where they replenish and rotate vehicle inventory. These largely local efforts are handled by field personnel. AFC's corporate-level team and Business Development Center also provide sales and marketing support to AFC field personnel by helping to identify new dealer opportunities, generating new leads through digital channels, and coordinating promotional activity with the company’s marketplace platforms, competitor auctions and other vehicle supply sources. AFC also relies on the utilization of actionable data to drive the business forward (predictive modeling from historical and real-time data).
Portfolio Servicing
The company’s procedures, proprietary systems and data enable it to manage its credit risk by tracking each vehicle from origination to payoff, while expediting services through its field network. Typically, the company assesses a floorplan fee at the inception of a loan, and it collects all accrued fees and interest when the loan is extended or repaid in full. In addition, AFC generally holds the title or other evidence of ownership to all vehicles which are floorplanned. Typical loan terms are 30 to 90 days, each with a possible loan extension. For an additional fee, this loan extension allows the dealer to extend the duration of the loan beyond the original term for another 30 to 90 days, and generally requires the dealer to make payment towards the principal and payment of accrued fees and interest.
Collateral Management
Collateral management is an integral part of daily operations throughout the organization. AFC's data analytics facilitates this collateral management by providing real-time access to dealer information and enables field and corporate personnel to assess and manage potential risk issues. Restrictions are automatically placed on customer accounts in the event of a delinquency, payments by dealers from bank accounts with insufficient funds or poor audit results. Field personnel are proactive in managing collateral by monitoring loans and changes in payoff activity. In addition, over 54,000 routine audits, or inventory audits, are performed annually on the dealers' lots. The audit reconciliation process is centralized in order to better mitigate risk and make available field personnel time to focus on the customer. Poor results from inventory audits typically require personnel to take actions to determine the status of missing collateral, including visiting the dealer personally, verifying units held off-site and collecting payments for units sold. Audits also identify troubled accounts, triggering the involvement of AFC's risk department.
AFC operates two divisions which are organized into ten regions in North America. Each division and region are monitored by managers who oversee daily operations. At the corporate level, AFC employs full-time risk specialists and collection attorneys who are assigned to specific regions and monitor collection activity for these areas. Risk specialists work closely with the field personnel to track trends before an account becomes a troubled account and to determine, together with collection attorneys, the best strategy to secure the collateral and mitigate risk once a troubled account is identified. In addition, many of the company’s dealers with significant credit lines are managed by a centralized team to provide customized customer service, as well as enhanced risk oversight.
Securitization
AFC sells the majority of its U.S. dollar denominated finance receivables on a revolving basis and without recourse to a wholly-owned, bankruptcy remote, consolidated, special purpose subsidiary (AFC Funding Corporation), established for the purpose of purchasing AFC's finance receivables. A securitization agreement allows for the revolving sale by AFC Funding Corporation to a group of bank purchasers of undivided interests in certain finance receivables subject to committed liquidity. The agreement expires on January 31, 2028.
The company also has an agreement in place for the securitization of Automotive Finance Canada Inc.'s (AFCI) receivables. The agreement expires on January 31, 2028. The receivables sold pursuant to both the U.S. and Canadian securitization agreements are accounted for as secured borrowings.
Competition
At the national level, AFC's competition includes NextGear Capital by Cox Automotive, a subsidiary of Cox Enterprises, Inc. (‘NextGear Capital’), other specialty lenders, banks and financial institutions.
Seasonality
The volume of vehicles sold through the company’s marketplaces generally fluctuates from quarter to quarter. This seasonality is caused by several factors, including weather, the timing of used vehicles available for sale from selling customers, holidays, and the seasonality of the retail market for used vehicles, which affects the demand side of the auction industry.
History
The company was founded in 2006. It was incorporated in 2006 in the state of Delaware and commenced its operations in 2007. The company was formerly known as KAR Holdings, Inc. and changed its name to KAR Auction Services, Inc. in 2009 and then to OPENLANE, Inc. in May 2023.
