Analysis from Experian Automotive shows that as the number of months that a consumer owns a vehicle increases, they are less likely to return to market to purchase a vehicle of the same make.
Email Marketing Proves Most Effective
Sophisticated email marketers demonstrated significantly higher rates of data-usage best practices, which was twice as much as the average respondent.
The Forrester Consulting study recommends that marketers identify where email is most relevant and influential in the customer’s path to purchase and then incorporate additional channels along the path that tie all the communications together.
Group Sells More Used
Used unit retail sales for Penske Automotive Group Inc. increased by 11.6 percent, including a 7.5 percent increase on a same-store basis.
Certified Pre-Owned Grows in Importance
CERTIFIED DELIVERY: A line-up of speakers from Cox Automotive, featuring Manheim chief economist Tom Webb, AutoTrader.com analyst Michelle Krebs and Rick Wainschel, vice president of customer insights, discuss the market for certified pre-owned vehicles.
By Ted Craig
FERNDALE, Mich. – The
certified pre-owned market is growing larger and more important for both dealers and manufacturers.
That is one of the key find-
ings of AutoTrader.com’s annual CPO report.
The company presented the report, along with a panel of Cox Automotive experts, during a recent press event.
Manheim economist Tom Webb said 2014 marks an-
other year of record CPO sales and he expects next year will see another record set.
“(The CPO market) has the ability, the desire and the need to grow further,”
Webb said.
The only manufacturers showing a decline in CPO sales this year are Toyota and Honda, and that’s only because the 2011 earthquake in Japan created a shortage of three-year-old vehicles.
Continued on page 3
Payment Assurance Device Helps to Free Kidnap Victim
A bad man with bad credit is in custody and the woman he is accused of abducting is free, thanks in part to a payment assurance device.
Carlesha Freeland-Gaither, a 22-year-old woman who was abducted on Nov. 2 in Philadelphia, was rescued from the car of her alleged kidnapper, 37-year-old Delvin Barnes, in a Jessup, Md., parking lot Nov. 5, ofcials said.
The suspect’s vehicle had been located by law enforcement using the GPS functionality of a PassTime device installed on the car.
Barnes was already under investigation by federal agents in another case and they recognized him in photos taken
from surveillance videos.
PassTime, which has been in business for over 20 years, manufactures and sells GPS devices used for subprime automotive lending, theft-recovery and vehicle fleet markets. While PassTime devices are not designed as law enforcement tools, PassTime has been periodically called on by law enforcement to assist in their investigations.
“We are proud that a PassTime device was instrumental in determining the location of the suspect’s vehicle,” said Stan Schwarz, founder and CEO of PassTime.
“It’s a great feeling to know that our devices are helping people – in many diferent ways.”
Photo by Ted Craig
Industry Sees Steady Softening, Stable Prices
An analyst with Morgan Stanley made headlines recently by predicting a collapse in the used-car markets as more volume comes to market.
Prices are lower right now, at least on an unadjusted basis, but industry experts don’t see a major drop coming any time soon.
The average price of a used vehicle for model years 200913 did see the largest monthly depreciation of the year so far at 2 percent during October, according to Black Book. Domestic cars declined the most at 3.2 percent; import cars fell 2.3 percent; domestic trucks fell 2.1 percent; and import trucks fell 1.3 percent.
But Black Book editor Ricky Beggs said this reflects a normal seasonal trend.
Average pre-recession depreciation is historically between 1 percent and 2 percent monthly, and Black Book expects overall 2014 depreciation of 13.5 percent.
The Manheim Used Vehicle Value Index, which adjusts for seasonality as well as mix and mileage, actually rose in October.
The index now stands at 121.8, down 0.4 percent from last year.
On an adjusted basis, prices were down 6 percent from a year ago.
The main reason for the diference between the adjusted and unadjusted prices is rental cars.
As a result of recall-delayed selling, auction volumes of rental risk units were up significantly in October. Average mileage was a record 44,800 miles.
Manheim chief economist Tom Webb said those who warn of a collapse are only looking at half of the price equation.
“You have to have a simultaneous collapse in retail demand,” Webb said.
That isn’t happening, as the
publicly traded auto groups showed in their third quarter earnings reports.
Used-car sales for these groups were higher for the 21st consecutive quarter, Webb said.
The fourth quarter so far shows retail demand remains strong for used cars.
October certified preowned sales came in at 202,409, up 7.5 percent from September and 13.8 percent from October 2013.
Chrysler and Subaru certified sales were at an all-time high. GM CPO sales were a five-year high.
Overall used-car sales came in at 3,084,040 in October, according to TrueCar Inc. That is down slightly from September, but up 2.8 percent compared to last October.
There were 27 selling days in October, for a daily selling rate of 7,497.
Beggs and Webb both expect prices to decline further as more of-lease vehicles enter the market.
Much has changed since the last time the used-car market saw a large influx of of-lease vehicles.
The biggest change is the maturity of certified preowned programs. Webb said more and more manufacturers are following the luxury model of leasing a large number of vehicles and keeping those units within the franchise dealer network at end of term.
This allows them to better manage their residuals.
The various certified programs could actually use more of-lease units right now. Instead, they are turning to of-rental units.
These programs have also improved in the past 10 years, Webb said.
Rental units today more closely resemble retail units, rather than the poorly contented, cookie cutter oferings of the past.
AutoTrader.com
Webb said manufacturers need CPO programs to maintain residual values as leasing grows in popularity. He said leasing as a percentage of new-car sales is headed to an all-time high.
Dealers like certified units, Webb said, because they create business both at the time
of sale and after that for warranty work. The biggest obstacle to CPO growth is consumer awareness. The AutoTrader.com survey found 82 percent of consumer who wound up buying certified cars knew little of CPO programs when
– Continued from page 1
they started their shopping program. Only 15 percent of buyers set out to buy only a certified car. However, consumer awareness that CPO vehicles are available is at all-time high and consideration is growing. One of the biggest miscon-
ceptions of certified cars is who stands behind them. Most consumers believe the certification comes from the dealership.
Consumers become much more favorable to CPO once they learn the manufacturers provide the warranty and other services.
Peace of mind remains the top reason why consumers opt for certified vehicles overall. But younger buyers cite lower costs than buying new as the top reason they purchased a certified unit. These buyers often buy a new car for their next automotive purchase.
Source: Manheim
NEWS BRIEFS
NAAA Rebrands Site
The service formerly known as Kink Or Bend is now available to NAAA members at www.autoims. com.
As part of its ongoing expansion and enhancement of membership services, the National Auto Auction Association acquired Kink Or Bend in August and partnered with AASC to re-brand and maintain this tool going forward.
The core technology ofering remains the same, helping auction members quickly determine if the potentially costly disclosure of a quarter panel replacement is required on any particular vehicle. AutoIMS.com auction users can access the product under the “Live Reports” menu by navigating to sub-menu item of “Is It Frame?” A custom login page for IsItFrame. com will be provided in the next few weeks.
IsItFrame.com will continue to host the compilation of all original equipment manufacturer information into a single database, assimilating statistics on 500 vehicle frame parts within a single, web-based search engine.
NAAA will now ofer the data as a free service to assist the association’s more than 300 member auctions in complying with the structural damage disclosure policy.
Members can access the site
at naaa.com and autoims.com; and will be automatically redirected from kinkorbend.com, which will be discontinued.
CarMax Adds Store
CarMax Inc. celebrated its first store in Reno, Nev.
The store is the company’s third store in Nevada.
During a grand opening celebration, the CarMax Foundation would invest $20,000 toward providing the Boys & Girls Club of Truckee Meadows with an Imagination Playground. The playground will be donated as part of the CarMax Foundation’s $4.1 million national partnership with KaBOOM!, a national nonprofit group.
Ally Books More Dealer Finance
Ally Financial Inc. reported net income of $423 million for the third quarter, compared to net income of $323 million in the prior quarter, and net income of $91 million for the third quarter of 2013.
Results for the quarter were driven by continued strong
performance from the auto finance franchise. Automotive net financing revenue increased 6 percent year-over-year, despite normalizing trends for used vehicle prices, while automotive earning assets grew 7 percent year-over-year, driven by continued strength in originations.
Consumer financing originations increased to $11.8 billion, with growth channel originations increasing 54 percent compared to the prior year period.
AuctionAccess, a service of AutoTec, recently upgraded its more than 260 subscribing auctions to AuctionAccess version 4.
This upgrade includes enhanced features for auctions including commercial account credentialing, additional search capabilities and improved image uploading.
In addition, AuctionAccess version 4 provides a more efcient user interface and strengthened data security measures.
Dealer registration staf at each subscribing auction completed online training on AuctionAccess version 4.
MI 48080
Phone: 586-772-5200 or 800-794-0760 Fax: 586-772-9400
www.usedcarnews.com
Charles M. Thomas Founder (1947-2002)
Lynda R. Thomas, Publisher Colleen Fitzgerald, General Manager
Contributing Writers: Ed Fitzgerald, Jenny King, Sheila McGrath
Columnist: Tony Moorby
Advertising:
Shannon Colby, Account Manager
Megan Frump, Account Manager
Marie Hingst, Account Manager
Circulation: Helen Thomas
Production: Josie Godlewski, Media Manager Tim Montie, Graphic Designer
Used Car News is published the first and third Monday of each month. Subscribers: We print advertisements as sent to us by auctions and other advertisers. It is not possible to verify the correctness of listed vehicles in auction ads. Most lists are partial and all lists are subject to last minute changes by auto auctions, so before travelling a long distance for a particular auto auction event, contact the auction by telephone for a fax of vehicles in the sale. Used Car News assumes no guarantees or liabilities concerning the accuracy of any advertisements. All Rights Reserved. Reproduction in any form is prohibited without the written consent of the publisher.
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Myles Mellor
Site Finds Challenge in Building Trust in Used Pricing
By Jenny King
DETROIT – New- and used-car retail pricing specialist True Car Inc. is finding the used-car market a challenge.
The Santa Monica, Calif., company’s business is to deliver “price confidence” to consumers, True Car president John Krafcik told members of the Automotive Press Association.
“It’s tough to deliver that confidence in a used car because you don’t know what the right price to pay is,” Krafcik said.
Visitors to TrueCar.com –there are 5 million of them each month – can put in the year, make and model they are considering and receive a list of local dealer members and the prices dealers are asking.
The now publicly traded company counts 8,000 newcar dealers and 1,000 independent used-car dealers on its rolls.
“We provide in-market customers,” he said.
The dealer pays TrueCar $299 for a new car and
$399 for each used car sold through a TrueCar introduction.
“Higher price elasticity” results in a more efcient sales channel, Krafcik said.
The recently appointed president reviewed the 2014 new-car market in terms of revenues instead of units sold.
The market is strong. The current average sale price of a new pickup truck is $39,700, he said. In October, he said, “the average paid for a new Ford F-150 was over $40,000.”
His numbers indicate some $520 billion in total new vehicle revenue for 2014, with most of the growth in pickups and utility vehicles.
Krafcik reviewed the performances of the top automakers in terms of revenues in four “super segment” categories: passenger cars, utility vehicles, pickups and luxuries. He praised General Motors, with “pretty good balance” in all four segments, adding a revenue forecast in excess of $100 billion for the company in 2014.
“Toyota is well balanced,” Krafcik said. “This is not an accident: it’s the result of great corporate product planning.”
Krafcik praised GM’s 2015 full-size SUVs and Toyota’s Lexus lineup.
Hyundai-Kia are the most unaligned, he said, because they have no pickups and are weak in the luxury and
utilities segments. Nissan is still focused on the car side, he said. VW is hurting from an over-emphasis on cars, he said, while noting the important revenue contribution to the company from Audi sales.
Krafcik briefly addressed the market in terms of how consumers search and buy and how decisions appear to
be made.
For example, in spite of all the price comparisons, buyers tend to be willing to pay more for a vehicle at a dealership close to their homes.
In the near future, “people will be using mobiles and apps to take them through the entire purchase process,” he said. “Half our traffic is going through mobile.”
November 6th: Consignment Sale
November 11th: GM Factory Sale
November 13th: Consignment Sale
November 20th: Consignment/GSA Sale
November 25th: Consignment Sale/GM Closed *TBA
November 27th: Closed for Thanksgiving
November 28th: Open 8:30-3:00 PM
Photo by Jenny King
TRUE STORY: John Krafcik, president of True Car Inc., answers questions from reporters during a recent Automotive Press Association event in Detroit.
Combining Live and Live-Online Buyers
We understand that your business is driven by retentions. That’s why IAA’s unique combination of live and live-online auctions and deep market expertise helps you reach the right buyers in more than 110 countries. At IAA, we see the importance of every type of vehicle.
Town Defeats Store’s Inflatables
By Sheila McGrath
After seven years, a battle over inflatable penguins, eagles and turkeys on the roof of an Ohio car dealership may be nearing its swan song.
In January, trustees in Medina Township, Ohio, will finally hold a public hearing on whether to allow businesses to display the large inflatables, which owners often use to draw attention to their store.
The dispute first heated up in October 2008, when Bill Doraty, owner of Bill Doraty Kia, began using inflatables on the roof to advertise his business. Township ordinances prohibit the displays.
Doraty couldn’t be reached for comment, but according to local news reports about the dispute, he put up a diferent inflatable each month, often corresponding to holidays or the seasons. And as each eagle, bunny, witch or Santa made its appearance, Doraty would be issued a citation and ordered to take it down.
In 2009, Doraty hired a lawyer to draft new zoning laws he felt would be more in line with the needs of businesses. But one township trustee who supported his plan died, and another supporter was voted out of ofce.
As the battle wore on, Doraty was charged with a misdemeanor for violating zoning rules.
In 2010, he sued the township in federal court, charging the township’s sign provisions were vague and violated his right to free speech. He lost the court battle, even though organizations like the Greater Medina Chamber of Commerce were standing behind him.
“At best, I have been treated a like a second-class citizen,” he wrote in an October 2011 letter to the Eastern Medina Post.
“I have been lied to, charged criminally and laughed at during township meetings by the people who are supposed to represent me.”
As the rules stand now, it’s still illegal for businesses to display inflatables.
The proposed text amendment to the zoning code drafted in 2013 will be coming back to the township trustees for a vote.
There haven’t been any inflatables on top of the Bill Doraty Kia building since June, when Doraty sold the business to Chris Lucas, owner of Automax in Columbus.
If the township trustees vote to amend the rules, the township would begin regulating the height, size and duration of time the inflatables would be allowed.
General Motors Expects Increased Volumes in ‘15
Dan Kennedy is the manager of remarketing for General Motors
In the past, an increase in volumes meant adding sales. Today, can you handle the increase without adding physical sales?
What do you make of the talk of a major drop off in used-car prices?
How is your volume this year? What about next year?
Kennedy: When we close out 2014, the volume will be almost identical to last year’s volume.
We’re expecting an increase in volume next year. We expect a more consistent flow of vehicles into the marketplace for the entire year.
Are you seeing more Volts?
Kennedy: It’s a small volume car in our auctions. The ones we do have are selling well. There’s a demand from the dealers.
Kennedy: We will be able to handle the volume with the portfolio of auctions we have today. The higher volumes will fill in those lighter months we have experienced over the last couple of years. It’s hard to smooth out the returns, but we can smooth out the offerings so you don’t have spikes in availability and instead you have a steady cadence of vehicles coming into the market. The auctions have the capacity to handle the volume for us next year. We will continue to monitor auction performance and adjust our portfolio of auctions to improve the overall performance of our products in the marketplace.
Kennedy: We saw a shift in the market in July. The market went down and that wasn’t expected. Typically, July and August are pretty flat months. This year, it seemed the entire market shifted forward and we saw declines we would normally see in September get pulled into July. Once we got through July and August, we’ve started to see more typical seasonal declines.
I really can’t explain what happened in July and August. Some of the dealers say it was an adjustment for prices spiking earlier in the year and the drop just leveled the trend.
Is there any vehicle that’s especially in demand with your dealers?
Kennedy: It really depends on where in the country they are and what’s being ofered. It’s amazing, some of the diferences we see from market to market, even within the same regions.
One day, one product will be hot and then you go 500 miles to another auction the next day and that product is cold. It depends on the volume on any given day and who is standing in the sale lanes.
How is the make-up of your auctions these days?
Kennedy: The portfolio of auctions is balanced between Manheim, ADESA and independents. We like having a mix of auctions. Having competition among the auctions is good – it’s good for our dealers, it’s good for us and it’s good for the industry. It keeps people creative.
Our relationships with all our auctions are very good. We appreciate what they are doing for us, especially with the volume of vehicles we are moving through the lanes. It has taken a lot of work on their part and a lot of work on the part of my team to get these vehicles ready. They’re contacting all the dealers to make them aware of the line-ups and the promotional programs. It has taken a cohesive effort by all.
What is the trend for dealers buying online?
Kennedy: We continue to see growth online, but we still see a fair number of dealers standing in the lanes. Online, they are buying vehicles that aren’t repaired or reconditioned. We have some dealers who like that because they have processes set up at their stores to do that. At the physical auction, the vehicles are repaired and reconditioned for them. I expect online sales will continue to grow as the quality of information regarding the vehicle improves. Continuing to improve the quality of the condition reports and the information provided to the dealers will enhance the buying experience of the dealers and their trust in the process. As sellers we must stand behind the information provided to the dealers and if a mistake is identified, we must make the situation right.
What are some of your latest innovations?
Kennedy: We just launched a multi-platform strategy for our upstream vehicles. We’ve been selling solely on SmartAuction for years. In November, our dealers can now purchase our vehicles upstream through OVE and we’re poised to add ADESA.com to provide access to our dealers. We are interested to see how that works out. We want to make it easy for our dealers to find the vehicles they need for their business and purchase them.
Toyota Tops Reliability Rankings
DETROIT (AP) — Toyota continues its winning streak atop Consumer Reports’ annual reliability rankings.
The company’s Toyota and Lexus brands top the survey, while its Scion brand is in the top ten. It’s the eighth year in a row that a Toyota brand has led the rankings.
“Toyota has a strategy that emphasizes reliability over excitement,” says Jake Fisher, Consumer Reports’ head of auto testing.
“They take a conservative approach to redesign and roll out new features slowly.
“The risk is they may not have the latest bells and whistles, but the reward is world class reliability.”
Japanese brands generally fared well in Consumer Reports’ survey, which predicts the reliability of 2015 model year cars and trucks based on a survey of subscribers who own 1.1 million vehicles from current or prior model years.
Mazda, Honda and Subaru joined Toyota in the top ten. Audi was the highest scoring non-Japanese brand, while Buick was the only domestic brand in the top ten.
Infotainment systems generated the most complaints from Consumer Reports’ readers and hurt many brands with new models, including Infiniti, Fiat and Cadillac. The most
common problems were unresponsive touch screens and trouble with pairing up phones.
Younger car owners tended to be the most impatient with glitchy electronics.
“They expect the same connectivity level when they’re in the car,” says Doug Love, a spokesman for the magazine.
Ford’s luxury Lincoln brand moved up 12 spots in the survey, the most of any brand, after fixing bugs in its touch-screen dashboard. Hyundai gained eight spots, mostly because it had few new vehicles. New cars and trucks tend to have more problems, and the magazine recommends waiting a year or two after a new model comes out before buying it.
Truck buyers complained about new full-size pickups from Chevrolet and GMC, which were plagued by squeaks and rattles. Mercedes-Benz fell the hardest, by 11 spots in the rankings, because of quality issues with its new lowerpriced CLA sedan and complaints about the electronics in the higherend S Class.
The recently merged Fiat Chrysler Automobiles fared worst in the rankings, with its Dodge, Ram, Jeep and Fiat brands in the bottom four spots.
“I’ll buy a car with an accident, but I need to know how severe it was. CARFAX Reports help me separate cars with minor damage from the wrecks.”
- David Askew Dick Scott Chrysler Dodge Jeep Plymouth, MI
State Names Quality Dealer
By Jeffrey Bellant
Jim Orr Auto Sales in Mitchell, Ind., has won the Indiana Quality Dealer of the Year award.
Debbie Andersen, executive director of the Indiana Independent Automobile Dealers Association, presented the award recently during an association event.
Orr will compete for the National Quality Dealer award next summer at the National Independent Automobile Dealers Association’s 2015
convention in Las Vegas.
The dealership carries 100 vehicles and has drawn a large number of repeat customers over the years.
“We’ve been here 46 years,” Orr said. “We do some bank and credit union (financing). We also have some in-house accounts. At one time, we had a lot more. We don’t have them now, because of my age and things have just changed (in the business).
“Mainly, it’s the change in people’s
Continued on page 14
Photo Courtesy of Jim Orr Auto Sales
TOP HONOR: Jim Orr (holding plaque) celebrates with family and staff after winning the Indiana Quality Dealer award this year. Orr will compete for the national title next summer.
Quality – Continued from page 12
attitudes. It’s a lot of work. We never had any problems with it.”
Orr co-owns the business with his wife Ramona. The two have been married for 58 years and gave his secret for a long-lasting marriage.
“I just found myself a good one to start,” he said.
Orr said he got into the car business because of his interest in it and he saw the need for a dealership, along with an opportunity to open up a store.
His daughter and three grandsons work at the dealership while two of
his other children are in auto auctioneering.
Other employees have worked at the store for decades.
In addition to running the dealership, the Orrs have supported the City of Mitchell Fire Department and Mitchell Memorial Playground building project.
They have also provided passenger vans for Orange County area youth groups.
“You just feel like you owe it to the community and to the people,” Orr said. “I mean, if you’ve done good, then share.”
Manheim Names GM
Manheim has promoted Mandy Savage to general manager of Manheim Detroit.
Savage will be responsible for leading auction activities, improving customer service and driving business efciencies. Savage, who previously served as assistant general manager at Manheim Palm Beach, will report to Randy Beil, Manheim’s market vice president for the North Central Market.
During her tenure at Manheim Palm Beach, she held two of the most successful One Hundred Grander Sales in its history, including the sale of a 2008 Bugatti Veyron for $1 million, the highest-selling auction vehicle on record for Manheim.
Prior to her position as assistant general manager, she served as director of best practices for Manheim Digital, and held roles as manager of online training and sales executive for OVE.com.
Savage holds a bachelor of arts in education from the University of Mississippi.
PEOPLE IN THE NEWS
ADESA Taps Managers
ADESA announced changes to its auction management teams at two locations.
Ryan Edwards, previously the general manager of ADESA Atlanta, will now serve as general manager of ADESA Phoenix, and Mark Brunn will join the team at ADESA Atlanta as general manager.
Edwards joined ADESA in 2007 as general manager of ADESA Atlanta. Prior to joining ADESA, Edwards spent 10 years with Manheim auctions throughout the country.
Brunn joins ADESA with more than 26 years of experience in the auto remarketing industry, most recently as vice president of operations for Manheim Total Resource Auctions.
Brunn has a bachelor’s degree from Villanova University and is a certified public accountant.
Creditor Names Execs
Coastal Credit LLC announced a number of management additions along with the relocation of its
corporate headquarters.
Coastal has named Martin McFarland as the new president and CEO of the organization, coinciding with the planned retirement of Coastal’s founder and CEO, William McKnight
Additionally, Coastal has hired a vice president of operations and a vice president of sales and marketing.
Coastal will relocate its corporate headquarters from Virginia Beach, Va., to Indianapolis in early 2015 while also establishing a new production ofce there.
McFarland was co-founder and president of Dealer Services Corp., where he helped grow DSC into one of the largest floor plan companies serving the independent dealer market. DSC was acquired by Manheim in 2012 and was renamed NextGear Capital in 2013.
The company also recently added Brian Switalski as vice president of operations.
Switalski most recently served as president of Southern Auto Finance (SAFCO).
Also joining the team is Joe O’Brien as vice president of sales and marketing.
O’Brien joins Coastal from Dealers’ Financial Services and the MILES Program where he served as president.
Finally, the company has promoted Ryan Clements to vice president of technology.
Finance Company Replaces CEO
Thomas Anderson has been named chief executive ofcer, efective Nov. 3, of Exeter Finance Corp., Irving, Texas.
Mark Floyd, who has served as CEO since 2010, will continue to serve on the board of directors and work with Anderson to ensure a smooth transition.
Anderson has served in a variety of leadership and CEO roles at leading global organizations including Capital One, Amerifee, Upromise, Sallie Mae, Integrity Interactive and Education Dynamics.
Prior to his operating roles, Anderson was a partner at McKinsey & Co. in the financial institutions group.
Anderson received a bachelor’s degree from Dartmouth College and a master’s degree in management from the Massachusetts Institute of Technology’s Sloan School of Management.
Mandy Savage
Mark Brunn
Mark Floyd
ARIZONA
Ace Christian, owner/ operator, Rock Solid Auto Center, Mesa, Ariz.:
“I’ve been in business since 2005. I have one location.
“We keep about 75 cars on our lot and sell about 50 per month. Last year was about 90 cars and we sold 65.
“But it’s starting to pick up. The market is starting to change the last couple of years.
“I mostly (stock) my lot from auctions.
“We are buy-here, payhere only. But we’re more of a buy-here, pay-there. Our related finance company is not located on the lot. So we don’t take payments on the lot.
“Now 70 percent to 75 percent of my customers pay online. It’s the best thing I ever did. It just doesn’t look good on a Friday afternoon when your customers come to make a payment and someone complains about the car they bought.
“The average retail price is about $8,000. Last year was a little higher. My charge-
of (rate) has gone down a lot. People are (making an efort) to keep their cars.
“Our average mileage is between 100,000 and 120,000. It’s just a little bit higher than last year. The average model year is probably 2008 or 2009.
“I’m pretty much carrying all domestics. I carry just a few Nissans.
“I don’t have lot of SUVs, because my (average price) is around the $8,000 and an $8,000 SUV had its better days a few years ago.
“I average about $800 to $900 for reconditioning. We try not to go over $1,200. It was about $1,200 last year, but we had to scale back.
“(At that cost), people were not paying any more for the car. After scaling back, they are still buying them, so we’re saving about $300 per car on recon.
“For marketing/advertising, we do a little bit of radio, a little bit of television and a lot of (direct mail).
“One car we sold recently an 2008 Chevy HHR with 120,000 miles one it. It sold for $8,200.”
FLORIDA
Paul Matton, chief operation ofcer, Park Auto Mall, Pinellas Park, Fla.:
“Park Auto Mall has been around for a long time (but the current owner) acquired it about five years ago.
“We have one location.
“We keep over 200 cars on the lot. That’s a little more than last year. Business is a lot better. We’ve been selling over 100 a month.
“We get our vehicles from everywhere. We get them from the auctions, from oflease, daily rentals – like Enterprise, Dollar – anywhere we can get them.
“We’re not paying any more. We’re just working harder and a little smarter. It’s about knowing when to buy them, when not to buy them.
“There’s no buy-here, payhere. We do subprime. We use (lenders) like Credit Acceptance Corp., Wells Fargo, Chase – we have 30 diferent ways to go. So we’ll use secondary finance. Whatever it takes to get the job done.
“The retail prices run
from $8,000 to $35,000 or $40,000. The sweet spot would be anywhere from $15,000 to $18,000.
“Our dealership is unique. We don’t have commissioned sales people. We have customer service reps. Our staf is all ladies, we don’t have any guys. We have signs on the windows, ‘If you need service, please come inside.’ So there’s nobody hassling you, or tackling you. The way we look at it, we don’t sell cars. We help people buy cars.
“We must be doing something right, because we’re selling more than 100 per month.
“We carry 2009s through 2014s right now. We’re getting more (late-model cars) because of the rentals coming back.
“Mileage depends on the cars, but we’re mostly getting them in the 40,000s and 50,000s.
“We also get some nice, low-mileage trades that we take in. We carry a lot of trucks, a lot of vans and a lot of cars.
“The average recon is
probably $800 to $900 on the newest stuf. On the oldest stuf it’s probably $1,200 to $1,500. When we recon, we make sure they’re certified, so we stand behind the cars.
“We have 15 bays. We do customer-pay service. That business has increased over last year. We’re doing very well with that. I think it’s going to continue to increase.
“In 2008 and 2009, you had to change your ways because of the car shortage. You had sell an older, rougher car and put more recon into it. Now we’re getting back to where we have a new-car alternative type of thing.
“We’re on track to selling 1,500 cars this year. Last year was less, maybe 1,250.
“We use cable for advertising. For service and parts, we’ll use (direct mail providers) Valpak and Beacon.
“We recently sold a 2014 Chevy Malibu. It was in the 20,000s. We got about $16,000 for it.
“I think the rest of the year will be phenomenal.”
WHOLESALE MARKETS
INDIANA
Bob Ruth, general manager, Wolfe’s South Bend Auto Auction, South Bend, Ind.:
“The auction will be 12 years old in March.
“We have four lanes, but we usually run two or three lanes.
“Volumes are at 250 to 300 consistently.
“We’re having a better year this year than last. I think that’s dealer-driven. I think dealers are busier and that in turn helps us. The mom-and-pop stores are doing better this time of the year.
“The other thing is we’re getting near tax time when the dealers load up.
“Sales percentages are steady. There are times where guys are standing in the lane with their hands in their pockets and you’re lucky to do 50 percent. Then there are other times where you’re selling 65 to 70 percent. Overall, though, I think we’re doing about 55 percent.
“Dealers are being much more specific (in their buy-
ing).
“Dealers will come from right across the street or from 250 miles away. Remember, (in the Wolfe family of auctions) we have a facility here, one in Terra Haute, Ind., and one in Evansville, Ind. So we have the ability to cover the entire state.
“But with fewer cars available, a dealer will travel a little farther (and utilize) the Internet. We’ll alert dealers, by emailing lists and faxing lists, to tell a dealer (what we have available).
“A dealer will call back to check if that vehicle is available and learn about its general condition and we’ll check it out. Being an independent, you have to do these little things.
“I think a lot more things are happening electronically in the business that makes it a lot more difcult on the dealership side. So we’re doing more electronically.
“Both our lanes are live on AWG. That’s a big tool for us, especially in inclement weather.
“Dealer consignment
is every bit of 80 percent of what we ofer. We have some fleet-lease repossession. We also do repo business with a lot of credit unions, banks and finance companies.
“Guys like to buy repos. If you put two cars side by side, and one is ‘ABC Bank’ and one is ‘ABC Dealer,’ the bank car would still do better as a repo.
“If a (seller) has five or more cars to sell, we’ll transport them for free, just to get them to the sale.
“The average price (on the block) is between $2,500 and $3,500.”
OKLAHOMA
Mike Cloptin, general manager/partner, Oklahoma Auto Exchange, Oklahoma City:
“Our 10th year in business (starts) the second week in January. At the end of the year, since our sale falls on New Year’s Eve, we’re going to have a celebration. We’re going to give away a lot of things and have a toast to the next year with nonalcoholic champagne.
Compiled by Jeffrey Bellant
“We have four lanes and we’re running four.
“We’ve been running between 750 and 850 vehicles each week. We’ve been selling about 62 percent.
“During our (Oct. 29) sale we sold about 68 percent. For that time of the year, that’s high for us.
“We’re actually up about 5 percent for the year. The last couple of months have been very strong. We’ve had some significant growth. We have the same customers. We just have higher volumes from the sellers.
“Usually, we’re (drawing) between 250 and 300 dealers, but the last few weeks (late October, early November) it’s been about 300.
“That’s quite a bit higher than this time last year. We’re just getting more of our in-state buyers and a few more out-of-state buyers.
“We’re starting to sell to a lot more buyers from Kansas in the last couple of months.
“Right now, 75 percent of our consignment is dealer trades and about 25 percent is fleet-lease repos. We have
lease accounts – LeasePlan USA and Automotive Solutions – but the rest of them are from local banks.
“But that’s where we want to be. When we started, we wanted to focus on new-car trades and get better. That’s what we did.
“Right now, our average price is $4,600. That’s a little bit higher than last year. We were about $4,400 last year.
“The majority of our business is from buy-here, payhere dealers. That business is strong. Some are buying now (early November), but they usually start buying in the latter part of November through December.
“It’s been an encouraging year. We continue to grow and increase our sales percentage, which is important for us. We’ll be starting our 10th year and probably 60 percent of our staf now is who we started with. It’s also encouraging to see your staf grow and get better. We have long-standing relationships with our dealers because we have a strong staf.”
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SALE CELEBRATES WITH FEAST
Dealers Auto Auction of the Rockies’ 19th anniversary celebrations started on Oct. 8 with its annual preview barbeque. The party kicked of at 4 p.m. with live music from Mike Dixon and Trip Wire Band.
Troy’s Specialty BBQ, owned by Troy Merrill with Akron Auto, provided the barbeque for the event.
“Troy started smoking the food at 6 a.m., and the aroma filled the air all day,” said Alex Zyla, auction marketing manager. “We could not wait to eat.”
The 19th anniversary celebrations continued with DAA Rockies’ weekly sale, when 1,500 units ran through the lanes. Nearly 500 customers were in the lanes and online to buy.
“It was a record-setting week for Dealers Auto Auction of the Rockies,” said Michele Noblitt, executive vice president. “Our customers have been loyal to us over the years. We strive week in and week out to provide them with the best service in the industry.”
Customers were treated to breakfast burritos and chili from a local restaurant and received giveaways made by local companies,
Auction, Chrysler Mark 50-Year Milestone
Manheim Philadelphia hosted a Chrysler 50th anniversary sale for franchised Chrysler dealers on Oct. 16. The first Chrysler factory sale was held at Hatfield Auto Auction (now known as Manheim Philadelphia) in 1964. Both companies have maintained this relationship for 50 years.
“Chrysler is proud of its 50-year tradition of selling cars to our dealers at Manheim Philadelphia, and we look forward to growing our partnership in the market with greater volumes over the coming year,” said Mark Nagel, head of company car and remarketing for Chrysler.
Manheim Philadelphia, located in
Hatfield, Pa., hosts bi-weekly closed sales for Chrysler.
“The sale not only recognizes our long and proud history, but also represents a partnership we greatly value and appreciate,” said Janet Barnard, executive vice president and chief operating ofcer of Manheim North America.
CHOW LINE: Attendees at the Dealers Auto Auction of the Rockies in Denver enjoy a meal as the auction celebrates its 19th anniversary.
Compiled By Jeffrey Bellant
Disconnected Jottings From Tony Moorby...
I hope I didn’t stretch our readers’ forbearance too much with the extended foodie series. It was done on the basis that, having to have more surgery lately that was going to need some extensive recupera-
tion, I wrote it ahead of time for the sake of continuity. Even now, I’m pushing the deadline.
So I’ve read lots of newspapers, done enough crosswords to turn my eyes square if the television didn’t do it for me and caught up on some outstanding reading. I don’t mean to imply that it’s been or continues to be an easy ride. When a surgeon is up to his elbows in your chitterlings and puts you back together with bailing wire, twine and superglue (seriously) it
takes a tremendous toll on the old constitution, especially at my age.
Before the knife, I managed to get up to Boston for the National Auto Auction Association meeting.
I think I’ve only missed
terrific auctioneers but no one could have predicted the half a million dollars plus on something that we would have been ecstatic to see $50,000 for.
The association gave some commemorative rings to the Hall of Fame members that were worthy of a Super Bowl win. Being one so privileged, I realized how blessed the association has been over the years with a pantheon of recipients on stage all at once.
to take the first steps. Will the day come when a used car or truck is a totally fungible product, when universal conditions are compared? Thankfully, I think the answer is still “no.” Geography, weather, supply and demand will still keep a sense of mystery to values, although the variables may not be so great.
ostensibly support a vehicle’s description.
While I fully appreciate that refurbishment, renovation or rebuilding are all part and parcel of the business, all kinds of opportunities arise to skirt the edges of truth.
one since 1982 and it continues to provide an ideal opportunity for some old-fashioned networking. There’s still a lot of grace and generosity among a bunch of hard-bitten car people. I know it’s old news now, but the pedal car charity auction in support of the Warren Young Sr. scholarship fund was nothing short of phenomenal.
All the stars were aligned for a successful sale –money, motivated buyers and sellers, fine product, peer pressure and some
Speaking of that, Alexis Jacobs, a long-time friend and colleague, owner of Columbus Fair Auto Auction, was inducted this year – many congratulations from all in the business.
The auction industry seems to be evolving continuously and taking lead positions on salient issues, especially where condition reporting and standards are concerned.
Involvement and alignment from other industry groups is now the norm where there use to be considerable protectionism and isolation. This is like a walk across China – a forbidding task – but you have
CR R O O S S W D Sponsored by
By Miles Mellor
Across
1. 2015 Dodge Charger
5. Honda SUV
9. Remove gas from the engine, e.g.
10. Color for a corvette
11. Toyota hybrid
12. French for yes
13. Gear setting
16. Overseer of government property, abbreviation
18. U-turn from WSW
19. Harleys
21. Luggage holder, often (2 words)
23. Region
25. Kind of terrain an ATV would thrive on
27. Dodge model
28. Well-liked
31. Letters that show in green when you are driving economically
32. Bursting with excitement
33. Raise (2 words)
35. Lady __ (British princess)
36. Muscle car option
40. 509 in roman letters
42. Baseball arbiter, for short
43. Ford 4-door 44. Change gears 45. Oil can letters Down
1. Classic AMC car, last built in 1954 (2 words)
2. Losing oil, for example
3. Mazda model (2 words)
4. Rotational force
5. Purchase request
6. “You betcha!”
7. 1963 Chevrolet debut
8. Indubitably
14. Broke off, as talks
15. Rayton Fissore Magnum 4x4 aka
17. Original offer (2 words)
20. Go south, as sales
22. GM line until 2004
24. Twingo and Scenic
26. Ford muscle car
29. It’s a Tesla
30. Doesn’t do a thorough job
I’ve been courting the edges of the classic car business recently and if ever there was a business that could use a better description capability, that’s it.
Vehicle histories become clouded and shrouded in the past – they should be called vehicle mysteries! Many fall into the category of “clocked” or “cut and shut” cars of the ‘60s and ‘70s with questionable paperwork to
I believe the classic business is due for another growth spurt but the audience would be bigger if true descriptions could be relied upon.
Television has grown the awareness of classics, but it’s also put the spotlight on some old-fashioned jiggery pokery.
Sitting at home makes it easy to look down the microscope and venture some of these opinions, but I sometimes wonder which end I’m looking through!
Music holder
Ad ___ committee
Compact VW
Track made by offroad wheels
Providing
Tony Moorby
CAR LOT: Business & real estate $150K down $648K to qualified borrowers. Excellent, growing location on major Hwy 2014 Est. $3MM+ gross. Call for more details. Cell: (321) 960-5832.
Used Car Dealership Located on high traffic corner in south Minneapolis. 50 years in business. 23 car capacity and 1 service bay. 340k. Call 612-250-0855
Health Forces Sale. Autobodyand small retail/showroom i n Marion NC for sale. Currently rented, very busy location on 4 lane highway next to the Blue Ridge Mountains. Shop holds about 6 cars. Sacrifice for 149,000. Also for sale right across the street is a working used car lot with office a detail garage on about a third of an acre flat; sacrifice this for 159,000, sales license not included but will negotiate it. Living quarters available also. Call 201-757-8388 or in NC call 828-442-0099
ADESA Boston December 5, 19
508-626-7000
ADESA Charlotte December 11 704-587-7653
ADESA Cincinnati/Dayton December 23 937-746-4000
ADESA Golden Gate December 9, 23 209-839-8000
ADESA Houston December 10, 22 281-580-1800
ADESA Indianapolis December 9, 23 800-925-1210
ADESA Kansas City December 9, 23 816-525-1100
ADESA Lexington December 11 859-263-5163
ADESA San Diego December 11 619-661-5565
ADESA Tulsa December 12 918-437-9044
America’s AA-Chicago December 17
708-389-4488
Brasher’s Salt Lake AA December 2 801-322-1234
Columbus Fair AA
December 3, 17
614-497-2000
Manheim Atlanta December 10, 11 404-762-9211
Manheim BaltimoreWashington December 16 410-796-8899
Manheim Dallas December 3, 17 877-860-1651
Manheim Denver December 17 800-822-1177
Manheim Detroit December 4, 11, 18 734-654-7100
Manheim Fredericksburg December 4, 18 540-368-3400
Manheim Milwaukee December 3, 17 262-835-4436
Manheim Minneapolis December 10 763-425-7653
Manheim Nashville December 3, 17 877-386-5004
Manheim Nevada December 31 702-361-1000
Manheim New Jersey December 3, 10, 17 609-298-3400
Manheim New Orleans
December 3
985-643-2061
Manheim Orlando December 2, 9, 16, 23 800-337-8491
Manheim Pennsylvania December 4, 5, 18, 19 800-777-2053
Manheim Phoenix December 4, 11, 18, 23 623-907-7000
Manheim Pittsburgh December 17 724-452-5555
Manheim Riverside December 16, 18 909-689-6000
Manheim Seattle December 10 206-762-1600
Manheim Southern California December 18 909-822-2261
Southern AA December 17 860-292-7500
Choose Chase on ADESA.com and OVE.com for quality bank-sourced vehicles. Contact auctions directly for current sale information.
