GE Credit Finds a Good Deal in Auto Auctions
Going once! Going twice! Sold to General Electric Credit.
It’s not just the used cars that are being bought, it’s the auction houses themselves. And the most visible buyer is GE’s credit subsidiary.
General Electric Credit bought its first auction house in 1985 and has since added 16 more. Executives say the chain will have as many as 25 lots by the end of 1988.
Long dominated by mom and pop operations, the auctions are gradually attracting big-name buyers anxious to build nationwide chains and capture a piece of the estimated $600 million to $750 million in commissions collected last year.
Michael Zafirovski, president of GE Credit’s auto auction subsidiary, says the company became interested several years ago because it was using auctions to dispose of the 250,000 cars it buys each year for its leasing business. After seeing the business from the perspective of a customer, GE Credit decided there was money to be made as an owner.
“Big businesses like to deal with other big businesses because they are more professional and sophisticated,†Zafirovski said.
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