Used Car News 10/7/13

ON THE WEB:

Leaf Joins CPO Ranks

Nissan is adding the allelectric Leaf to its certified pre-owned vehicles program.

In addition to the existing 8-year/100,000-mile battery warranty coverage protecting against defects in materials and workmanship, and 5 year/60,000-mile coverage for battery capacity loss below nine bars of capacity as shown by the vehicle’s battery capacity level gauge,

Carfax Lawsuit Grows

Law firm Bellavia Blatt announced that more than 420 plaintiffs – up from 120 – have joined the class action lawsuit filed against Carfax.

The additional plaintiffs resulted in Carfax’s increased potential liability of more than $150 million, up from $50 million previously.

National Association Honors Auctioneer

Jack Davis received the National Auto Auction Association Bernie Hart Memorial Auctioneer Award for 2013 during the group’s recent convention in Indianapolis.

State Groups Honor Quality Dealers

By Ted Craig

Two state Independent Automobile Dealers Associations named their 2013 Quality Dealers.

The Michigan IADA recognized Ray Campise, owner of Certified Motors in St. Clair Shores, Mich.

The Indiana Independent Automobile Dealers Association named David Jamesen of Concord Cars in Elkhart, Ind., as its 2013 Joe Krier Quality Dealer of the Year.

The Quality Dealer of the Year is chosen based on several attributes.

The dealership must be consumer oriented, and the dealer must have a record of good business decisions based on honesty and integrity.

Also, the dealership must represent itself as a civic leader within the community.

Campise came to the usedcar business after years of working at franchise stores.

In his mid-50s, he found himself out of a job after General Motors discontinued the Oldsmobile brand.

“Who wants to hire a guy who’s 54 years old and knows everything?”

Campise said.

He sat down with his old friend Ted Cooper of Genesys Systems and came up with a plan to get into the used-car business.

A great opportunity arose when veteran dealer Maurice Van Collie put his store up for sale.

Campise took it over and launched a business that would emulate the used-car

department at a franchise store.

All vehicles undergo an inspection and come with a pre-paid service contract.

All the cars have less than 100,000 miles on them.

Campise carries about 30 cars at Certified Motors, turning more than 20 cars a month.

The average price is

$6,950.

Certified Motors’ inventory is 90 percent cars and 10 percent trucks and SUVs. All the vehicles are domestics.

Campise said financing is divided up between two-thirds conventional financing and one-third subprime.

Continued on page 3

CarMax Continues Aggressive Growth in New Markets

Used-car superstore chain CarMax Inc. continues to move into new markets and beef up stafng at its existing stores while recording record results.

CarMax opened its first store in Jackson, Tenn., in September.

The store has more than 8,400 square feet, occupies approximately five acres, employs some 20 associates and stocks about 150 used vehicles.

The company is hiring for new stores in Brandywine, Md., and two locations in the St. Louis area.

Meanwhile, CarMax Inc. is recruiting for more than 1,000 positions in locations across the country.

The majority of open positions are in service operations (detailers, experienced technicians) and sales, with additional positions in purchasing and the business ofce.

CarMax has plenty of money to pay these new employees.

The company reported another record for its latest quarter, ending Aug. 31.

Net sales and operating revenues increased to $3.25 billion.

Used unit sales in comparable stores increased 16 percent. Total used unit sales rose 21 percent.

Total wholesale unit sales increased 10 percent.

CarMax Auto Finance income increased to $84.4 million.

Quality Dealers

Certified Motors has become distinguished for more than its selection of quality vehicles.

Campise has made a name for himself as something of a local showman.

He has dressed like Elvis for the Harper Classic Car Cruise, an annual automotive parade that takes place on the street in front of the store.

One year, Campise even hosted a wedding during the event.

Campise accepted the award with his wife, Lori, who co-owns and works at the store.

The most emotional moment of Campise’s acceptance speech came when he acknowledged his family.

He teared up and apologized to his daughters for not always being there for their events because of work.

It was a moment many in the car business could relate to.

The daughters were both in attendance to support their parents and one sang the National Anthem before the ceremony.

Campise also takes over as Michigan IADA president.

One of his main goals is getting more young people involved with the association.

Although neither of his daughters works at the store, Campise is doing his part to ensure new blood. He acknowledged the input of his associate Eric Bowen, a young associate he is training in the business.

This Indiana IADA presented its award to Jamesen II at the association’s 26th Anniversary Golf Tournament and Awards.

Concord Cars opened in 1986 with a small gravel lot and 20 vehicles.

Today, Concord Cars serves the Michiana area with four locations in Elkhart, Goshen and South Bend.

All four of the Concord Car stores have been renovated or built within the last three years.

They have more than 250 vehicles in stock and more than 20,000 customers.

Concord’s 18 employees sell more than 900 units each year.

One of the store’s practices is customers deal with the same person from start to finish when buying a vehicle

Concord Cars has been voted Elkhart County’s Best Pre-Owned Vehicle Dealer two out of the past three years.

Jamesen began selling cars when he was 15 years old. He rode his bike or moped into dealerships to buy their trade-ins.

At 16 he got a job at Concord Cars for the summer. Jamesen soon became partner and then, in 1999, bought out the remaining control of the store, becoming full owner of Concord Cars.

Jamesen has served on the Elkhart Chamber of Commerce Ethics panel for three terms and supports Bashor Children’s Home, Premier Arts, and the Boys and Girls Club.

Campise and Jamesen will compete against each other and dealers from across the nation next summer for the National Independent Automobile Dealers Association’s National Quality Dealer title.

NEWS BRIEFS

NAC Merges with Family First Dealer Services LLC

National Auto Care Corp. and Family First Dealer Services LLC have agreed to merge the two companies. Tony Wanderon, president and founder of FFDS, will lead the newly combined NAC entity as CEO. Christina Schrank, with nearly 20 years of experience, will continue in her current role as president of NAC, and Courtney Wanderon will assume the role of executive vice president of FFDS.

CU Direct Signs Sonic

CU Direct Connect has signed an agreement with Sonic Automotive that names CU Direct Connect as a Preferred Lender for Sonic Automotive dealerships in Colorado.

The agreement became efective Aug. 1.

CU Direct Connect, through its more than 34 member credit unions, is collectively the largest auto lender in Colorado. Sonic Automotive has recently expanded its presence in Colorado through the acquisition of two franchise dealerships, which also took place in August.

Auction Genius Integrates AWG Simulcast

VAuto Genius Labs announced the integration of its AuctionGenius

tool with the Whann Technology Group’s AWG Simulcast Platform to help dealers efciently access and purchase wholesale used vehicles from independent auctions.

The AuctionGenius/AWG Simulcast integration is now live with the Columbus Fair Auto Auction in Columbus, Ohio.

AuctionGenius and the Whann Technology Group are working with other independent auctions that use AWG Simulcast to expand their participation on the AuctionGenius platform.

RouteOne Launches Credit App

RouteOne has launched FinanceConnect, a new digital consumer credit application.

FinanceConnect ofers dealers a customizable credit application ‘microsite’ to meet and engage their customers online.

Dealers may include credit incentives, vehicle specials, and other promotional materials within their custom microsite. It can be further customized with the dealer’s logo

and colors to coordinate with the manufacturer the dealer represents. FinanceConnect is compatible with tablets and mobile devices.

CFPB Partners with Another City

The Consumer Financial Protection Bureau and the City of Jackson, Miss., announced a partnership to connect consumers with the CFPB to ask questions and submit complaints about financial products and services.

Jackson consumers can now dial 311 to be connected with the bureau when they have financial issues.

With this announcement, Jackson residents who call 311 with a ques-

tion or complaint about consumer financial products or services will be transferred directly to the bureau, which can answer questions and accept complaints.

Huntington Moves into Iowa

Huntington is expanding its growing auto dealer financing business into Iowa and has added key personnel in the state to support the initiative.

Huntington has hired a seasoned team with local market knowledge for the state. The bank is available to process loan applications now and expects to provide financing solutions to more than 300 dealers.

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Former NAAA President Takes Reins of IARA

By Jeffrey Bellant

Auction veteran Tony Long has taken the helm of the International Automotive Remarketers Association.

Long, a former president of the National Auto Auction Association, replaces Matt Marks, who died last fall.

IARA member Stephen Houston had served as the interim executive director since Marks’ death.

Long said he has big shoes to fill, but is already looking toward the group’s future.

“It’s an interesting time,”

Long said. “As executive director, I serve at the pleasure of the board and build consensus among the IARA members.

“They’re dealing with a lot of hot issues.”

Long named the Consumer Financial Protection Bureau, the future of Internet applications and platforms and the structure of future meetings as high agenda items.

Long was NAAA presi-

dent in 2003-04 and spent 20 years at Airport Auto Auction. More recently, Long has worked for Credit Acceptance Corp.

IARA President Levi McCoy, director of remarketing for LeasePlan USA, praised Long.

“He’s a genuine industry person who knows the business and has a lot of industry contacts,” McCoy said.

The IARA leadership began its search for a replacement last year and spent several months choosing the right person for the job.

Long said he was a saddened when he heard about Marks’ sudden death.

When the IARA began its official search for a replacement, he was encouraged by friends to apply.

“I had several industry friends suggest to me, ‘You’d be great for that job,’ Long said. “So after deep thought and prayer, I decided I’d throw my hat in the ring.”

Don Fowler, director of business development for DataScan Field Services,

chaired the IARA’s search committee.

“We had about 30 official candidates,” Fowler said. “Tony just ended up being the best candidate when we took every attribute into consideration.

“(We felt) he would understand the political pitfalls along the way from all of the different groups and associations within the industry.

“We felt like Tony was a consensus builder and someone who could take the lead from the board and help move the IARA agenda forward.”

Long said he was notified of his selection just before the IARA’s Summer Roundtable this summer.

He attended that meeting in an unofficial capacity to observe and familiarize himself with the event.

He also attended the NAAA’s annual conference in September.

His first official conference as IARA executive director will be at the group’s annual conference next March in Las Vegas.

CONGRATULATIONS

Subprime Scoops up Buyers

By Ted Craig

Buy-here, pay-here dealers once again face stif competition from subprime finance companies.

The market seems to move back and forth. Buy-here, pay-here dealers had the edge for past few years following the downturn, when finance companies maintained extremely tight credit standards.

Now, some finance companies are buying contracts for consumers with credit scores below 500 as auto companies, finance companies and large dealership groups seek to expand their market share.

“I’m seeing customers that three years ago couldn’t finance a bicycle buy brand new cars,” said Greg Goebel, CEO of Used Car University.

Buy-here, pay-here dealers compete with finance companies for this same tier of business. While this is the bottom tier for the finance companies, it is the top tier for buy-here, pay-here dealers.

Dealers of all sizes, from standalone independents to chains like America’s Car-Mart, with 128 locations, are reporting lower originations due to this increased competition.

Many buy-here, pay-here have started looking at incorporating subprime finance into their opera-

tions.

This is a reversal from a few years ago when subprime dealers were starting their own in-house finance programs.

Other dealers are responding by taking smaller down payments and ofering longer terms. That means taking on more risk, said Gene Daugherty of NCM Associates.

There are other approaches.

Ken Shilson, founder of the National Alliance of Buy-Here, PayHere Dealers, recommends stressing the personal bond between dealers and their customers.

Daugherty said helping solve their problems, such as finding a new set of tires, can do this.

Goebel expects the robust subprime market to continue through the end of next year, with tightening starting in the fourth quarter.

He doesn’t expect a major pullback like in 2007, but more of a softening like in 2002.

Daugherty said buy-here, payhere dealers can always outlast finance companies because they are set up for handling credit with high defaults and delinquencies.

“(Finance companies) can’t stay with it very long,” he said. “Selling them is easy.

“Getting the money is the hard part.”

ServNet Owners Work Together, Maintain Independence

By Jeffrey Bellant

ST. CLAIR SHORES, MICH.

– ServNet celebrated its 25th anniversary as an auction group this year and continues to grow as it moves forward to year 26.

Richard Curtis, executive vice president of industry relations, talked about the strengths of the group during a recent trip to Michigan.

He said the challenge of leading a group of 32 auctions is daunting when they are independent sales.

“In a lot of ways, it’s like herding bees,” Curtis said.

Curtis said the strength of outgoing President R. Charles Nichols is how he has helped the organization focus and move together in the same direction.

ServNet started with 10 auctions in 1988.

“We just keep adding land, people and lanes,” Curtis said. “During Charles’ tenure, we’ve added four to five auctions.”

But Nichols deflected the praise by celebrating others, like ServNet Chief Executive Ofcer Pierre Pons of TPC Management.

He gives the bulk of the credit to the operators of individual auctions for their help in making the group thrive.

When DAA Seattle became the

latest member of the ServNet family, he emphasized the importance of the people.

“(We) know that the measure of our success goes well beyond the number of our locations across the country,” Nichols said.

“It really boils down to the people we touch, and the efectiveness of the partnerships we develop with customers in the marketplace. It is through service that we grow.”

Many ServNet auctions have added GSA sales, which wouldn’t happen if their service and reputations were weak.

Nichols said unlike auction chains, ServNet can ofer an open system that allows dealers to do business with a variety of vendors, platforms and programs that might not be available to non-independents.

Nichols said ServNet benefits from the brainpower of all its members. So the group creates its own little petri dish of innovations and ideas.

Auction owners visit one another, meet and bounce ideas of of each other, Nichols said,

From the development of AuctionPipeline to AuctionEdge, along with drawing on products like AutoIMS, the group continues to advance, not just in numbers, but also in its use of technology.

“We need to be able to adapt and be nimble,” Curtis said.

ServNet’s involvement with Auction Academy during the past two years will also reap benefits as the group moves forward.

Earlier this year, Pons praised ServNet’s involvement in the educational program.

“A critical step in ensuring the

sustainability of these independent businesses is training tomorrow’s leaders,” he said. “To that end, a significant number of ServNet auctions are participating in the Next Generation Training at Auction Academy.”

For more from incoming ServNet president Patty Stanley, turn to page 10.

PAGE 8 - HOW I DID IT: SUCCESS STORIES

How These Couples Stay Married While Working Together

By Ted Craig

The couple that works together stays together? Not often.

The divorce rate for couples that work together is actually higher than the national average.

Oklahoma Independent Automobile Dealers Association executive director Rose Morgan has worked with her husband, Odell, for years, but she knows other couples that say they can’t clean out the garage together, much less operate a business.

Rose Morgan said working with a spouse is like working with any other partner.

“It always comes down to do you want to work with somebody,” she said.

Oklahoma has the highest divorce rate in the country. So it would seem the odds are really stacked against Russell and Laurie Taylor.

Yet the couple manages to make their marriage work, along with operations at Taylor Auto Sales in Oklahoma City.

“We have a good relationship,” Russell Taylor said. “That has to be the biggest thing.”

Russell learned to make a marriage and business

partnership work by watching his parents, who ran the store for decades before he took over.

One key to success, Russell said, is having clear roles at work.

“I make the decisions here and that’s how it is,” Taylor said. “At home, I don’t usually win.”

Russell and Laurie Taylor complement each other’s strengths. Russell buys and sells the cars, while Laurie handles the back ofce.

Another married couple that finds harmony in set roles at the store is Bill and Sandra Moss.

Moss Motors Company in Dillwyn, Va., uses the slogan “Buy From The Boss – Bill Lewis Moss.”

And Bill is the boss, Sandra Moss said.

Sandra is no shrinking violet. She was the second female president in the history of the National Independent Automobile Dealers Association.

But she knows what role to play for the success of her business and her family.

This arrangement has worked for almost 50 years,

Sandra Moss said.

“I don’t think either of us would have it any other way,’

she said.

Sandra focuses on advertising while Bill handles the day-to-day operations.

The two share other interests, including singing in a local choir. They rarely discuss the dealership at the

dinner table. “We have other things to talk about,” Sandra Moss said. “It’s not all business.”

How One Operator Won the National Quality Dealer Award

By Ted Craig

Tracy Myers attended his

first National Independent Automobile Dealers Association convention in 2002.

During the National Quality Dealer ceremony, he turned to his wife and said, “I can do that.”

Myers proved that statement true in 2006, when he climbed the stairs to accept his award.

Myers said somebody is either a quality dealer or not. They can’t decide to win it and start operating their store at a higher standard or become more involved in their community.

But there are ways to help their cause.

One is being a member of an active state IADA. My-

O ctober 7, 2013

ers said he was fortunate to belong to the Carolinas IADA, a large group with an involved membership.

If a dealer’s local IADA is lackluster, he needs to become involved and improve it.

The other way to help your cause is a good presentation.

Myers used visual aids in his Quality Dealer application, including pictures of his customers and community work.

He said many dealers just fill out the paperwork.

Myers said winning the award was more than a milestone in his career.

“When I got it, it really afected how I run the business,” he said. “It’s not something I took lightly.”

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ServNet Tackles Tech Issues

By Jeffrey Bellant

The new president of ServNet is no novice to the business.

Patty Stanley partners with her husband, Henry, in two auto auctions, Indiana Auto Auction, and the couple’s home base at Carolina Auto Auction in Williamston, S.C.

Patty Stanley was expected to take over the reins as ServNet president at the owner’s meeting in Chicago this month. She will serve a twoyear term.

“I’m very honored to be selected by my peers for the position,” Stanley said. “We’ve always been in ServNet and the associations. I think ServNet creates a wonderful foundation for networking among premiere independent auctions.”

Stanley said the group is structured similarly to the NAAA in that leaders (president, president-elect and vice president) go in tandem, traveling together throughout the year.

A main thrust for Stanley so far is dealing with technology issues.

ServNet recently partnered with AutoIMS to provide collective analytics utilizing the data contributed by all ServNet auctions across the country.

Outgoing President Charles Nichols said the AutoIMS data will allow

ServNet to assist remarketers in determining both national and regi onal sales patterns as well as provide comprehensive analytical reporting, drawing on the data available from all the ServNet auctions.

The group also has a special projects committee that will focus on issues related to the Consumer Financial Protection Bureau.

Stanley said the committee is trying to come up with some standardized processes that it can share with member auctions to make sure auctions meet CFPB guidelines, such as the protection of personal information.

“We’re going to see if we can set some kind of a standard process,” she said. “It may take a while because the CFPB isn’t even sure what it is looking for and our clients aren’t sure what they’re looking for. So we’re just touching base to see if there’s something we can help out auctions with at the ground level.”

Stanley said the group is also working together on other issues.

“Last year we started – and created – several national contracts (connected to services, reporting. some pricing, etc.),” Stanley said. “Even though we’re independent auctions, we’ve all agreed to certain (items) in the contracts. So we’re able to ofer clients the same things.”

Experts Say Stock Lot to Sell

By Ted Craig

LAS VEGAS – Dealers need to stop stocking their lots with cars they want.

Instead, they need cars their customers want. Or even better, cars their customers can buy and that creditors will finance.

company guidebooks rather than the wholesale guides at auction when he was a dealer.

Jim Vagim, CEO of United Auto Credit, said dealership staf must control their customers to ensure they match them with the right vehicles.

“Those guys will wander all over

“Those guys will wander all over the lot looking for the wrong car.”

Jim Vagim

Several speakers at the recent Used Car University conference drove this idea home.

Consultant David Keller said dealers must view the units on their lots as piles of cash rather than cars.

The longer the piles sit, the smaller they get.

This requires acquiring cars that can turn in less than 60 days and ideally in 30 days. Gene Daugherty of NCM Associates recommends that 80 percent of inventory should be afordable to 80 percent of shoppers.

This means knowing what collateral creditors will finance, said UCU CEO Greg Goebel.

Goebel said he used the finance

the lot looking for the wrong car,” Vagim said.

While it’s important that customers can aford their vehicles, Daugherty said they also must like them. They become less likely to pay when something goes wrong otherwise.

It’s better for dealers to focus on practical items when buying and reconditioning units to avoid something going wrong.

“They’re not going to stop paying because the navigation went out,” said Mark Vazquez, Westlake Financial’s senior vice president of sales and marketing.

“They’re going to stop paying because the transmission keeps slipping.”

Toyota, Honda Lead Brands as Best Used Cars

Edmunds.com unveiled its 17 Best Used Cars for 2013.

A total of nine brands are represented on the list. Honda and Toyota led the pack with four vehicles each, followed by Ford, with three vehicles that earned the accolade.

Honda won for subcompact sedan (the 2007-2011 Fit); coupe; (the 2006-2011 Accord); and compact SUV/crossover (the 2006-2011 CR-V) and minivan/van (the 20062011 Odyssey).

Toyota won for large sedan (the 2006-2011 Avalon); midsize SUV/crossover (the 2006-2011 Highlander); compact truck (the 2006-2011 Tacoma); and hybrid (the 2006-2011 Prius).

Ford was the only domestic brand with multiple picks on the list. It won for midsize sedan (the 20072011 Fusion); large truck (the 20062011 F-150) and performance car (the 2006-2011 Mustang GT).

The only other domestic on the list was the Chevrolet Corvette for two-seat sports car.

The other winners were the 2006-2011 Hyundai Elantra (compact sedan); the 2006-2011 Volvo C70 (convertible); the 2006-2011 Subaru Outback (wagon); the 20072011 Mazda CX-9 (large SUV/ crossover);the 2006-2011 Dodge/

Mercedes-Benz Sprinter (cargo van); and the 2006-2011 Infiniti G35/G37/G25 (luxury).

“There are a lot of popular cars on this list, and that’s not a surprise,” said Edmunds.com editor-in-chief Scott Oldham.

“Wider availability of a particular

vehicle almost always translates to more competitive prices and better value for used-car shoppers.”

Edmunds.com’s annual Best Used Cars selections are based on vehicle reliability, safety, value and availability. Edmunds.com editors considered their own professional expe-

riences with the cars and examined consumer ratings, NHTSA and IIHS crash test results, and Edmunds.com’s True Market Value prices and True Cost to Own data.

Eligibility was limited to 20062011 model year vehicles.

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Developer Buys Back Auto Mall

By Sheila McGrath

Despite losing his properties in the West Covina Auto Mall in a bankruptcy liquidation earlier this year, developer Ziad Alhassen is back in control of the sites after winning them in a bankruptcy court auction on Sept. 11.

But the city of West Covina, Calif., is appealing the ruling that allowed Alhassen’s company to bid on the properties, saying the ruling essentially allowed Alhassen to buy his own properties out of bankruptcy.

News reports from the San Gabriel Valley Tribune and West Covina city ofcials said Alhassen receives financial backing from connections in the United Arab Emirates.

In all, he spent $44 million at the Sept. 11 auction to buy back 10 properties in West Covina and Covina that had been liquidated in bankruptcy.

Alhassen could not be reached for comment.

The West Covina Auto Mall has a number of thriving businesses including Mercedes, Audi, Toyota and Honda dealerships, according to West Covina City Manager Christopher Chung.

But the properties owned by Alhassen, which formerly housed Chevrolet, Hummer, Ford and

Chrysler dealerships, have been sitting vacant on some of the city’s most valuable real estate for years.

The dormant properties give the impression that the mall is not doing well, Chung said.

“It indicates that the auto center is not thriving, from the standpoint of people driving by,” he said.

And the vacant properties are costing the city about $2 million per year in lost tax revenues, according to Chung.

“That’s 15 to 19 police ofcers we could hire,” he said.

The failure of the auto mall dealerships is the most recent in a decades-long string of business deals between the city and Alhassen that went wrong. In addition to car dealerships, the developer has several other business interests in the city.

According to documents filed in the bankruptcy case, the city of West Covina loaned money to Alhassen in 1999 for the construction of the auto mall properties.

The city later sued to recover on unmet obligations arising out of that agreement, but Alhassen’s business, Hassen Imports Partnership, filed for Chapter 11 bankruptcy in July 2011. The bankruptcy court later converted the case to Chapter 7 at the request of the city.

Continued on next page

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Auto Mall – from prior page

When a bankruptcy auction was set for Sept. 11 to liquidate 10 of Alhassen’s vacant properties – three in the auto mall and seven others in West Covina and the adjacent

But the bankruptcy court ruled on the morning of the auction that Dighton America should be allowed to bid on the properties, and at the auction, Dighton America outbid all

Fitch Expects Lower Residuals

The largest U.S. car rental firms continue to report healthy gains on sales, helped by robust residual values for used vehicles disposed from their fleets.

However, ratings agency Fitch expects a pullback in residual values to eventually alter the mix of risk and program vehicles in leasing company fleets.

This will require rental firms to proactively manage their fleet mix and usage to capitalize on evolving vehicle economics and disposition channels in order to boost earnings.

As of July, Fitch’s Auto Lease Residual Value Loss Index registered gains of 10.8 percent of returned residuals, down from a peak of nearly 30 percent in February 2011. The agency expects residual values to continue normalizing into 2014 as increasing new vehicle sales (which began in 2010) and a substantial rise in retail lease residual maturities increase used vehicle supply.

Net depreciation rates remain near their lows as a result of strong used-car values but these rates will also likely moderate.

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State Tightens Lemon Law

MADISON, Wis. (AP) — The Wisconsin state Senate has voted to tighten the state’s lemon law, which covers when consumers can sue auto manufacturers.

The Senate passed a bill Sept. 17 that would remove the ability to receive double damages in such cases and shorten the deadline for bringing a lawsuit from six years after purchasing a faulty vehicle to three years.

The bill is backed by the state’s largest business lobbying group as well as a coalition of vehicle manufacturers and dealers.

The Assembly passed it on a bipartisan 88-8 vote in June. The Senate passed it 32-1, with Democratic Sen. Jon Erpenbach voting no.

The few Democrats who oppose the measure say the changes weaken the lemon law, hurting consumers and making it more difcult for them to be successful in lawsuits.

Wisconsin’s self-professed “Lemon Law King,” attorney Vince Megna said it is better than what was originally put forward, but not as good as current law.

“I think we have a lemon law that can be used,” Menga said.

Former Staffer Sold Stolen IDs

A New Jersey man has pleaded guilty to trafcking identities of 15 individuals who had applied for credit at the used car dealership where he worked.

Stuart Simpson pleaded guilty to second-degree trafcking in personal identifying information pertaining to another person before Superior Court Judge Stuart Peim in Union County. The charge was contained in an April 12 state grand jury indictment.

Sentencing is scheduled for Dec. 13. Under the plea agreement, the state will recommend that Simpson be sentenced to three years in state prison.

In pleading guilty, Simpson admitted that, in September 2010, he distributed approximately 74 items

of personal identifying information pertaining to 15 separate individuals, including, among other things, copies of driver’s licenses, applications for credit and/or credit reports containing personal identifying information. An investigation determined that the identity profiles corresponded to individuals who had applied for credit at the used-car dealership where Simpson worked.

An undercover investigation by the Ofce of the Insurance Fraud Prosecutor determined that Simpson attempted to sell the identity profiles to a buyer in the parking lot of a restaurant on Route 22 in Union. The “buyer” was actually an undercover detective from the Division of Criminal Justice.

EPA Offers Labels for Used Vehicles

DETROIT (AP) – The U.S. government has come up with window labels that show the gas mileage and pollution of used cars.

The Energy Department and the Environmental Protection Agency say the labels can be downloaded or viewed on the website www.fueleconomy.gov.

Labels are available for all vehicles sold in the U.S. since 1984. They

show mileage and carbon dioxide emissions estimates.

The government says the stickers are valid for used cars because mileage changes little over a vehicle’s 15year life if it’s maintained properly. Used-car sellers and dealers can post the stickers on car windows to advertise mileage. Buyers can search the site for the models they want to buy.

Call or visit

Six Steps Lead to Online Success

By Ed Fitzgerald

the videos on Autotrader.com are for pre-owned vehicles.

There are six steps dealers must take to reach online marketing success.

Randy Johnson, a national dealer educator for Autotrader.com, shared these steps at the company’s recent Interactive Dealers Summit in Troy, Mich.

Johnson said the first step was to buy and stock in-demand vehicles at the right price. Johnson said dealers should price cars at even numbers such as $10,000 or $10,500, whenever possible.

That’s because buyers type in those kinds of numbers when setting a price for their online search.

Step two is to make vehicles “stand tall” to potential buyers.

Johnson stressed the importance of getting custom photos and videos onto dealers’ websites. He said he has visited dealerships that take up to 11 days to get a vehicle’s photo online, with part of the blame falling on reconditioning.

Johnson said that 80 percent of

“These are quickly becoming video distribution devices,” said Johnson, looking down at the laptop on the table.

He said Autotrader.com averages 22 photos of each used car on its website.

Step three: Explain the unique and positive attributes of doing business with your dealership.

Johnson said dealers should try to post online testimonials from their customers.

He said he was recently sitting in a dealership waiting room and asked a customer if he would mind making comments for that dealer’s website.

“He said yes and I didn’t have to give him an oil change or anything,” Johnson said.

He said dealers are naturally inclined to show of their dealership on the company website.

“But often that’s a picture of the outside of your building and it looks like 10 a.m. on a Tuesday –no people around,” Johnson said. “Facebook has made people want to see people.”

Johnson said step four is for dealers to continually fine-tune their websites.

Continued on next page

Six Steps

– from prior page

“One of the litmus tests for branding is ‘are you consistent,’” Johnson said.

“Do you use the same logo on everything? Is your contact information easy to find? Or do you have to go two pages down to find your address.”

Step five: Manage your reputation.

Johnson said dealers should establish a social media policy for employees.

“If someone posts something negative on your website you don’t want one of your employees firing

back a reply,” Johnson said. “You can get fired for doing that at Autotrader.com.”

Johnson also said that dealers should have a strong Google profile.

Step six: Define appropriate measures of success. Johnson said this includes shopper contact (emails, phone calls, walk-ins) and shopper engagement (maps, chat, video).

Johnson reminded dealers that they should make sure photos of their new and used inventory are online from 8 a.m. to 8 p.m. Monday through Wednesday.

Flex Capital Corporation,

at:

or email us sales@sellbhph.com

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PEOPLE IN THE NEWS

Manheim Moves Managers

Manheim has promoted Tim Van Dam to market vice president for the northeast market.

He replaces Jerry Tassone, who was recently named president of Ready Auto Transport. In his expanded role, Van Dam will continue to oversee Manheim Pennsylvania, the company’s largest location, reporting to Tim Janego, regional vice president, east.

Both moves are efective immediately.

As market vice president of Manheim Pennsylvania since 2010, Van Dam helped grow the auction’s digital and in-lane sales and customer base and created educational programs.

Prior this role, Van Dam ran several company locations as general manager including Manheim Southern California, Manheim California and Manheim New Jersey.

Also, Manheim Canada has selected Don Wallace as general manager of Manheim Toronto.

In this role, Wallace is responsible for all business operations at Manheim’s Canadian flagship location, and the country’s largest auction.

Since joining Manheim Canada two years ago, Wallace has led ebusiness and product development for the company.

Most recently he served as director of national accounts.

Prior to joining Manheim, Wallace spent more than two decades with Chrysler Financial Services, including several years as a Manheim customer in his role as national remarketing manager.

Wallace holds a master’s degree in business administration from the University of Athabasca in Edmonton, a diploma of business administration from British Columbia Institute of Technology in Vancouver and a bachelor of arts in economics from the University of Victoria.

NextGear Capital Names VP

NextGear Capital has announced the appointment of Frank Ford to the role of vice president of diversified products.

Textron Financial’s Captive Finance Division. He also served as Textron Financial’s General Manager of the St. Louis floor plan ofce, where he managed their diversified receivables portfolio.

ADESA Names New GMs

ADESA announced changes to two of the company’s auction locations.

Dan Dietsch, who served as general manager of ADESA Memphis since 2007, has been selected as the new general manager of ADESA Nashville.

In addition, Michael Schenks, previously the dealer sales man ager at ADESA Sarasota, will now serve as the general manager for ADESA Memphis.

Detsch joined ADESA as a general manager.

Prior to that, he served as an assistant general manager for Manheim Auctions and held several positions with ADT Auctions, including national inspection manager.

Schenks’ background includes four years in his most recent position with ADESA.

Prior to that, he was AutoNation’s used-vehicle director of North Florida.

Direct Auction Services Reorga-

nizes

David Nutter, founder and CEO of Direct Auction Services LLC, has announced the reorganization of the leadership team.

He indicates that the move is designed to more efectively serve auction customers, while responding to the needs of the marketplace.

David Rush will assume responsibilities in the newly created position of chief finance ofcer.

Rush serving previously served in leadership roles with ADT Automotive, Manheim and ADESA. Most recently, Rush headed Roadrunner Services LLC, a division of Direct Auction Services.

Ford will be responsible for strategic planning, development and growth of diversified non-auto floor plan products, including recreational vehicles, marine, powersports, salvage, daily rental and others as implemented.

Ford previously served as Senior Vice President of Sales for Cessna Finance Corporation, a division of

Appointed to the newly created post of vice president of operations is Joe Ruch, well known as an auction operations leader through his work at Manheim locations in Pennsylvania and Maryland. Ruch’s most current role with Direct has been regional operations manager for the Northeast.

Remaining in their current roles with Direct Auction Services are Clint Green serving as chief operating ofcer, and David Young as company president.

RETAIL MARKETS

ARKANSAS

Gary Potter, president, Potter Motors, Conway, Ark.:

“I have one location. I’ve been here at this location since 1988. I keep about 30 cars on the lot. That’s similar to this time last year.

“We’re selling about five cars a month. That’s the same as this time last year.

“I get vehicles from auctions, trade-ins and I buy them of the street.

“I do very few sales that are straight retail. (My sales) are probably 50/50 between buy-here, pay-here and some level of subprime.

“For subprime, we’re trying to find the right lenders that match our market – the down payment, terms and interest that I can tolerate and still make a living. I’ve got one bank that I’m working with that I really love. I’ve got two or three others that I’m talking with, but just haven’t formalized an agreement yet.

“But I’m really cautious about who I do business with. I want to know that they’re strong enough and they’re going to be

around. I want to know that they’re ethical and do the things that I would do for my customer.

“I would say the average retail price on my lot is about $7,500. But the range is anywhere from $4,000 to $12,000 for my market.

“The average mileage is about 100,000. The average model year is probably 2005. I’m trying to move toward the lower side of those numbers.

“So I’m looking to try to get some 2007, 2008 and 2009 units.

“I don’t know if I’m ready to jump into 2010s or not until I test the market. I certainly want to move toward the 80,000- and 90,000mile cars (for those units).

“I used to carry more domestic cars in the past. But now that I’m doing more bank-financed stuf, it’s more SUV or foreign. It’s the marketability of those.

“(Reconditioning costs) vary. I buy a lot of cars with damage on them. With a car like that, I could spend $2,500. If I get it from auction, it might cost as little as $300, so I really don’t have

an average.

“We do 100 percent of our own work. We do customer walk-ins, a little bit of insurance work in the collision industry and aggressively (seek that out). I appreciate the luxury of having that service (work).

“The last car I sold was a 2008 Honda Fit. It had about 87,000 miles. I got about $8,800 for it.”

VIRGINIA

Donald Boucher Jr., owner, Courtesy Auto Sales, Chesapeake, Va.:

“We’ve been in business 37 years. We must have done something right.

“We have one retail location and a separate service department.

“There’s probably 140 (vehicles) in inventory. That’s a little less than last year. It hasn’t been easy to buy cars over the past two or three years.

“About six months ago, I started to work harder locally (to find cars).

“I’ve been working some dealerships (for trade-ins) that I had stop working because they had quit selling

to dealers. But I have gotten back in the door with them and buying cars.

“I also have a CarMax auction here and Tidewater Auto Auction (locally) that I buy from.

“We sell about 45 to 50 cars per month on average. That’s probably a little better than this time last year. We’re just trying to buy vehicles that are more desirable to start with.

“I also think we’re getting a little bit smarter on the Internet. I just hired a gentlemen and that’s all he does is Internet marketing.

“The Internet is so important. We have good repeat and referral business, but we also want new business.

“We have a pretty good sized buy-here, pay-here portfolio, two related finance companies and our own warranty company. So we’re pretty diversified.

“About 40 percent of our business is buy-here, pay-here and the rest is a mix of (regular) retail and subprime.

“We have indirect lending with a lot of local

Compiled by Jeffrey Bellant

credit unions.

“Our average retail prize is $12,000, which is lower than last year.

“Our sweet spot is $15,000 and lower.

“I carry about 2/3 domestic and 1/3 imports. Trucks and SUVs are about 40 percent of the inventory and 60 percent are cars.

“The average (vehicle) is a 2008-2009 model year with about 65,000 miles.

“The average reconditioning is around $800. It’s about the same as last year.

“I’m trying to buy cars that need less reconditioning.

“We have a 12-bay service shop so we do all kinds of work.

“We actually do some fleet work and even do some service work for Drivetime.

“One vehicle we sold recently was unusual. We took it on trade and I never see them. They’re like hen’s teeth.

“We took a trade of a 1999 F-350 crew cab fourwheel-drive with 120,000 miles. It’s got the 7.3L diesel, which is one of the most sought after engines.

“We sold that for $15,000.”

WHOLESALE MARKETS

MASSACHUSETTS

Michael Cooley, general manager, Quincy Auto Auction, Quincy, Mass.:

“We’ve been in business for 26 years. We have six lanes and we’re running all six.

“Right now, we’re running pretty close to 1,200 cars per week. We’re probably up 15 percent from last year.

“Unless we’re having a special sale, our average weekly conversion rate is about 66 percent. If we have a special promotional sale, then that number is closer to 70 percent.

“We have buyers from Massachusetts, Connecticut, Rhode island, New Hampshire and Maine. We’re pretty much an hour from (a lot of places).

“We have a lot of new dealers that have signed up over the Internet now. We have a lot of new dealers who sign up through the Auction Pipeline.

“We have dealers sign up everyday. A lot of them are local dealers. When you’ve been around for a while, you assume everyone

knows you.

“So it’s great to see a local dealer sign up who is just 10 or 15 miles from here. You can never assume that everyone knows who you are.

“During one recent sale, we had 903 dealers registered. On average, it’s between 850 and 900.

“Business has been brisk for the new-car dealerships in this local market. We have a lot of new-car consignment coming in. So there are a lot of fresh newcar trades. The good thing is, dealers aren’t holding on to inventory long. When it hits between 60 and 90 days, dealers will cash out the cars.

“The used-car dealers like it because those cars have already been safety-checked and they’re legitimately front-line ready to go.

“So if you have a good arbitration department that’s fair with everybody and you have a good prep department, then dealers can buy with confidence.

“They’re not afraid to raise their hands one more time and pay the extra $100

ICompiled by Jeffrey Bellant

or $200 if they know they’re going to bring back a car they won’t have to spend an extra $1,000 on.

“We’re also open 24/7 for dealers to drop of and pick up cars.

“We have our own transportation department with seven trucks on the road.

“We try to make it as easy as possible for the customer.

“Dealer consignment makes up probably 85 percent of our volume. That’s come up about 10 percent. The rest is a mix of fleetlease and repossessions. The repos are down a bit from last year, which I guess is a good sign for the economy.

“Our average price coming through the lanes is about $3,800 – between $3,500 and $4,000. That’s similar to last year.

“We do an RV and equipment sale about every two months at this time of the year since consignments for the RVs have dropped of a little.

“Trucks are starting to pick up this time of the year.”

OKLAHOMA

Mike Clopton, general manager/partner, Oklahoma Auto Exchange, Oklahoma City:

“We’re starting our ninth year in January. We started with two lanes and we’ve grown it to four.

“We’re running about 800 to 850 a week.

“We had a very strong September. We finished out with a 40-car sale, which, for an auction our size, is a pretty good sale. We had a very good September. We’re quite a bit ahead of last year.

“Our conversion rates are over 60 percent for the year. For September, we were about 63 percent. Last year, we were at 58 percent.

“We’re a new-car trade, franchise store auction. That was our game plan when we started this thing and we haven’t changed that.

“We probably run about 70 percent dealer trades and 30 percent fleet-lease. Our (commercial consignors) are Leaseplan, MidAtlantic Finance, Tinker Credit Union, Automotive

Solutions, bank of Oklahoma and others.

“The thing we have to continue to improve on is our sales percentages. We could probably use a fifth lane, but we’re land-locked and I really don’t have the desire to buy more land. So we have to run them quickly. We have (boosted) our sales percentages over the past few years.

“Usually, we’ll draw about 300 dealers in the lanes. Sometimes it gets up to 350 for a great sale.

“I think September has been a little bit slow for (dealers) on the retail side. But the mood is still good and the attitude is good. People are still buying and selling cars.

“People in Oklahoma are pretty resilient. If we can deal with tornadoes, flooding and hailstorms, then you don’t let a bad couple of weeks selling cars get you down.

“Our average price for the year is a little more than $4,200. That’s about the same as last year.”

t’s so easy to get wrapped up in doing business day to day that sometimes we can forget about things that make us human. Santander Consumer USA is here to help you, not just in your business, but to help you be a winner by keeping up that human connection and making a difference.

We will donate $3 for every car sold* by the winning Dealer, to be matched with a minimum of $3 by the auction company, to the charity chosen by each monthly winning Dealer** (501C3 charity choices are designated by the auction).

COS T OF INCENTIVES (TCI)

Manheim Dominates Chase Cup

Manheim was the big winner when Chase Auto Finance announced its 2013 Chase Cup for Auction Excellence winners at the recent National Auto Auction Association Convention and Expo.

Manheim auctions swept the awards, with Manheim Orlando chosen as winner of the Best National Auction Performance, in addition to being recognized for delivering the best regional performance in the Southeast.

Manheim Orlando was also awarded the Douglas F. Wininger Memorial Award for Best National Performance Service Delivery.

The other big winner was Manheim Seattle, which won awards in five diferent categories. Other Chase Cup honorees included: Manheim Atlanta, Manheim Dallas, Manheim Pittsburgh, Manheim Denver and Manheim Minneapolis.

“Chase Auto Finance applauds these high-performing auto auctions for their significant contributions to the used vehicle industry,” said Sandra Broderick, senior vice president and operations executive for Chase Auto Finance.

NAAA Celebrates Industry Pioneers

The National Auto Auction Association has named Jack and Jacque Kesler, owners of Kesler-Schaefer Auto Auction, pioneers of the industry for their achievements and contributions to the remarketing profession.

The honor was presented during the association’s 65th annual convention in Indianapolis last month.

As the second generation in a successful auction started in 1943 by Ken Schaefer, daughter Jacque and sonin-law Jack Kesler stepped in to help his widow Eleanor run the family business after the founder’s death. Six years later they took over the reins, guiding and growing an auction that is now celebrating its 70th year.

In 1978 their son, Steve, joined the business. In 1990, Jack Kesler oversaw construction of a state-of-the-art, fivering facility around the corner from their old address.

Under the management of the family’s third generation with Steve as president, KSAA’s annual sales volume is more than 26,000 vehicles.

Disconnected Jottings From Tony Moorby...

I wonder if people have the same problem as me with today’s packaging. I bought some light bulbs from Home Depot the other day and swore that Houdini was involved in the packaging design. I cut my hands in two

places trying to extricate the lamps and had to resort to a large pair of shears – not scissors, shears.

The plastic was thick enough to keep the Costa Concordia afloat and would yield to nothing less. My usually reserved vocabulary was stretched to the point of sounding like a shipyard welder.

I bought a toy truck from Toys “R” Us for my grandson recently. You’ve probably seen them; they have a hole in the clear plastic package,

through which you can push a button with your finger, to hear the ear-splitting sirens, horns and back-up alarms, along with the strobe lights that leave you seeing stars every time you blink for the next half-hour. This so you are suitably alerted to the nuisance value as soon as the novelty has worn of. Upon its arrival home, the necessary assault on the container began.

The armor, which now passes for cardboard, would have done justice to a Tudor knight at the joust.

I managed to cut through the maze of flaps and the tape (which itself, could have held a hostage for months) with a kitchen carving knife a Gurkha soldier would have eagerly swapped

CR R O O S S W D

By Miles Mellor

Highway, for short

19. Crimson Tide state

20. Tack on

23. Surpasses decisively

25. Engine measurement

26. Honda minivan top pick

28. Challenger or Journey

for his kukri scimitar.

The truck, having been finally exposed, was afxed to a plastic base. There were two Phillips-head screws the size of carriage bolts through the bottom of the base but the screwdriver kept slipping of the heads of the screws until the heads were so gnarled it was impossible to get any purchase whatsoever.

A trip to the garage was rewarded with a pair of vice grips and, after a ten-minute struggle, the truck and its base were still connected with five zip-ties as thick as handcufs that yielded to wire cutters after another trip to the garage.

As I then found two more twist ties woven through the chassis and base like a wounded anaconda, I had to distance myself from my grandson lest his vocabulary became broadened.

Talking of twist ties, no matter which way you twist them, they never undo. Then you reverse the procedure to find that you’re still tightening this simple, yet enraging, device.

The morning toast is a

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well-won reward after the bread’s removal from its plastic cocoon, protected by the infuriating gadget.

At last the truck, which must have cost less than the box it came in, was freed from its bondage to entertain its new owner and annoy its purchaser. Ironically, the truck was an ambulance. I needed to lie down.

A trip to the grocery store is an equal assault to the dexterity of the thinking man. Enough said about the bread bags but herbs come in little plastic sacs to be pulled apart at the top to expose a zipped access which normally refuses its designed purpose and has to be rent apart and is thus not resealable. Design overload at its worst. Cheese is just the same; a mouse would give up

the trial and seek its fortunes elsewhere. I preferred the way our deli used to wrap it in parchment or waxed paper but this is progress.

Have you ever tried to pull apart the top of the cornflakes bag once you’ve wrested it from the box. You need Sampson’s strength before his haircut to relieve the clam-like closure.

I’ve never yet managed to slip the top open neatly enough to reuse the tab, which is supposed to slide under the other side of the top. The contents of the now-torn box and its unsealed bag have to eaten with some alacrity before becoming limp and languid contributions to the trash container that, thankfully, can be opened with the flick of a foot.

INSURANCE AUTO AUCTION S

Compact Honda 3. Toyota sedan with a roomy cabin

6. Honda SUV/ Crossover

8. California university, abbr.

9. St Louis arch state

Type of roof in some autos

Type of player

29. Do, ray, __, fa, so

30. When it’s dead, the car won’t run

32. Dodge _____

36. Ford sells the Mondeo here

37. Piece in a machine

38. Compact sedan from Hyundai

40. Luxury car brand

43. Street in French 45. Maintenance

46. Toyota compact truck Down

Coast

Midsize Ford sedan 2. Toyota pickup 3. Honda that comes as a sedan and a coupe

4. Pontiac Grand__

5. Not where you thought it was

6. Olds line from the 60s

7. Nissan ___ Hatchback

10. Toyota midsize crossover

15. Blue Book gives you them

18. Hard to please, like some used car buyers

21. Stopped working

22. Temperature controller, for short 24. Luster

25. Mini ____man

26. Popular Subaru wagon

27. Mick Jagger, for one

29. Another word for model

31. Vital information on a used car listing

32. Box-like Nissan

33. Do something

34. Their C70 can be a luxury coupe or convertible

35. How old it is... 38. College internet address ending

Suit and ___

Basketball org.

Thumbs-up vote

Sales reps have to stay __beat

FOR SALE/LEASE

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CAR LOT FOR LEASE.

$6,500. Can be divided. 820 S. Dixie Hwy., Pompano Beach, Florida 33064. Tel:954-687-4673

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