Used Car News 1/20/14

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Car Shoppers Want Cash Upfront

Car shoppers are more incentivized to buy by promotions that deliver actual cash back – even if the total cost of the car is higher.

A new study asked shoppers which incentives and rewards most motivated them to make car or tire purchases, take test drives and book car services.

GM, Volkswagen Prices Set Records

TrueCar.com estimated that the average transaction price for light vehicles in the U.S. was $30,786 in December, down $35 from November and down $201 from December 2012.

Two automakers – General Motors and Volkswagenachieved record highs for their average transaction price in December, reaching $34,634 and $36,433 respectively.

Small Business Owners Upbeat About New Year

A recent survey finds that 70 percent of small business owners are feeling optimistic, up from 55 percent a year ago.

Outlook Improves; Young Buyers Missing

By Ted Craig

DETROIT – U.S. auto sales will remain strong this year, but young buyers will continue to sit on the sidelines.

Analysts speaking at the recent Society of Automotive Analysts conference expect new-car sales to stay

just below the 16 million mark this year.

That’s a good year at any time and a vast improvement from the lowest point of the downturn.

But the numbers could be even higher if more young people would buy cars.

Brian Johnson, senior equity analyst for Barclays,

showed the average age of new-car buyers has climbed in the past five years.

While much is made in the media of a lack of interest in cars among young people, the analysts agreed this played only a small part in their absence.

Jessica Caldwell, senior director for industry analy-

sis, Edmunds.com, said the main issue is young people are “lifestyle constrained.”

She said an analysis of buyers in North Dakota showed young people still buy cars when jobs are plentiful and mass transit is rare.

Caldwell said the lack of young buyers shows up in Continued on page 22

Pre-Owned Sales Top 2 Million for 2013

It proved a strong end of the year for used-car sales.

Total used unit retail sales rose more than 4 percent in December, bringing the full-year total to just under 42 million, according to CNW.

December’s gain was led by an 11 percent increase in sales by franchised dealers.

AutoData Corp reports that December certified preowned sales were 171,280, a December record, and were up 9.4 percent from December 2012.

CPO sales were down 3 percent from November.

There were 25 selling days in December and 26 in December 2012 and November.

Porsche, Mercedes-Benz and Audi had their best month ever.

Fourth quarter sales were 525,693, a fourth quarter high, and were up 16.3 percent from the fourth quarter of 2012, but down 2.8 percent from the third quarter of 2013.

Sales for 2013 reached an all-time high of 2,112,670, passing the 2 million mark for the first time.

Sales were up 15.1 percent from 2012.

Audi, Ford/Lincoln/Mercury, Honda, Hyundai, Kia, Lexus, Mazda, Mercedes-Benz, Mini, Nissan, Porsche, Subaru, Toyota and Volkswagen posted their highest annual certified sales totals.

Weather Keeps Consumers Off Lots, Dealers Out of Lanes

By Jeffrey Bellant

A winter storm that brought record-breaking cold and dumped heavy snow on large parts of the country took away sale days from dealers and auctions.

The storm made history at Flint Auto Auction in Michigan.

“For the first time in 60 years, because of the danger of frostbite, we had to cancel a sale,” said Bill Williams, president/owner.

On the Monday before the sale, the crew was out clearing the lot of the heavy snow.

“One report said Flint had 17 1/2 inches of snow,” Williams said, “but I think there was more than that over the period of several days that we had snow.”

Then by Tuesday, the temperatures dropped as low as minus 14 and Williams felt that, for the safety of the staf, it was better to just call of the sale.

He said despite living his whole life in Michigan, he’s never experienced a period of snow and bitter cold that occurred that week.

On the other side of the state, the combination of heavy snow and below-zero cold left the folks at Tom Stehouwer Auto Sales in Grand Rapids, Mich., little to do on Jan. 6 and 7, the first two days of the week.

“On that Monday and Tuesday, we basically just watched it snow,” said Kelly Herb, vice-president and co-owner.

On Wednesday, Jan. 8, the team went out and began the struggle to clear the 70car lot.

Herb said it was a slow process, involving the shifting of cars, clearing the space and moving them back.

“We started at 7:30 a.m. and finished at 5 p.m.,” Herb said.

Herb said since the store sells an average of 30 to 35 units a month, he estimates the storm may have cost them three to five sales.

He said there’s no easy way to make up those sales. He expected that the following weekend would be extra busy, but there will also be some longer workdays to make up for the lost time.

Paula Frendel, executive director of the New York and New Jersey IADAs, said her members often had to move cars of the lot completely to clear the snow.

Then even if the dealership managed to do that, the freezing cold drove away customers.

“It’s also set dealers back who are looking to stock up their lots for tax season,”

Frendel said. “So this has impacted sales.”

Apart from those challenges, dealers face costs from having to detail cars that had been stuck in the snow.

For dealers that have inventory on a floor plan, there are fewer days to sell those units before the bill comes due.

At press time, Frendel said the weather report called

for heavy rain and warmer temperatures, which could also discourage floor trafc and potentially cause flooding. In Ohio, auctions in Akron and Cleveland moved their sale days, according to Wendy Rinehart, executive director of the Ohio Independent Automobile Dealers Association.

Continued on page 22

40 Years of Subprime Success

$ Billions paid to Dealers Fast Funding

230+ In-Field local Market Area Managers

7+ Million APPROVALS to consumers

NEWS BRIEFS

Dealertrack Buys Dealer.com

Dealertrack Technologies and Dealer.com announced a definitive agreement for Dealertrack to acquire Dealer.com.

Under the terms of the agreement, Dealertrack will acquire all the equity of Dealer.com for approximately 8.7 million shares of Dealertrack’s common stock and $620 million in cash, subject to customary postclosing adjustments.

Dealertrack expects to finance the cash portion of the purchase price through cash on hand and with fully committed debt financing.

The deal is expected to close in the first quarter of 2014, subject to regulatory approval. The transaction is expected to be accretive to Dealertrack’s standalone multi-year organic growth profile to Dealertrack’s diluted adjusted net income per share.

Western Funding Resumes Originations

Western Funding Inc. has resumed operating in full capacity.

After a recent pause in loan originations, Western Funding is now ofering dealerships the full scope of funding options previously available.

Now with the financial support of Westlake Financial Services, the company will ofer approved dealerships its same lending programs

with some new features.

Western Funding dealerships now have access to DealerCenter DMS. This software package integrates with Route One and ofers dealers the ability to run credit, match inventory to customers, and submit applications to lenders.

CarMax Continues Expansion

CarMax Inc. opened one new store and is hiring in preperation for another.

The used-car superstore chain elebrated the opening of its first store in King of Prussia, Pa., outside of Philadelphia.

CarMax’s second location in the Delaware Valley, the store stocks more than 250 used vehicles.

The company is currently hiring more than 50 positions for the company’s new store in Rochester, N.Y.

This is the first CarMax location in the state of New York.

The new Rochester store, which is more than 40,000 square feet, is scheduled to open in March.

KAR Buys Locksmith Service

KAR Auction Services Inc. has acquired Miami-based High Tech Locksmiths (HTL), which specializes in products for the automotive industry.

HTL is the largest provider of transponder, remote, high-security and car smart keys in North America.

Jay Wiener will continue in his role as CEO of High Tech Locksmiths and report directly to KAR executive vice president of enterprise optimization David Vignes.

Joining Weiner in leading the High Tech team is Don Davis, who has worked for KAR’s subsidiary ADESA for 15 years. During this

time, Davis has held management roles of increasing responsibility in the areas of reconditioning, operations and strategic improvements including developing the company’s first in-house locksmith division.

Wholesale Prices Decline

Wholesale used-vehicle prices declined 0.6 percent in December. The Manheim Used Vehicle Value Index reading was 121.7 in December, which represented 1.9 percent decline from a year ago.

Pickups, vans, and sports cars were the strongest segments. Pricing for luxury cars continued to underperform.

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Editorial: Ted Craig, Managing Editor Jefrey Bellant, Staf Writer Gabriel Camero, Intern

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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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Kelley Finds Brand Preferences Vary by Region

Kelley Blue Book Market Intelligence recently named the most and least popular auto brands and segments by U.S. region.

The study is based on KBB. com trafc of more than 10 million U.S. adults.

“It seems what is popular in one region is overlooked in another,” said Arthur Henry, analyst at Kelley Blue Book. “Westerners prefer fuel-efcient brands with style, such as Tesla and Scion, but those same brands are shunned in the South and Northeast.”

The KBB.com Market Intelligence research found the top brands most shopped in specific U.S. regions are often headquartered or have assembly plants in that area.

Out of all regions, Southerners are the least influenced by brand when shopping for a car, although the story is a little diferent for trucks.

“Known as the truck belt in America, the KBB.com data reveals Southern shoppers are more likely to consider Ram models than shoppers from any other U.S.

region,” said Karl Brauer, senior analyst at Kelley Blue Book. “While Southerners are drawn to the ruggedness and durability the Ram truck brand ofers, they also are more likely to shop for a traditional luxury brand like Infiniti than shoppers from other parts of the country due to its headquarters in Tennessee.”

Midwestern new-car shoppers are 64 percent and 53 percent more likely to consider Chrysler and Buick, respectively. While Midwesterners are more likely to shop for domestic, non-luxury brands, they are least likely to shop for import luxury brands, such as Mercedes-Benz and BMW, and all compact luxury cars. Northeast shoppers are 56 percent more likely to consider Subaru. Northeasterners are also 20 percent more likely to shop for a compact crossover.

“Seeing the key drivers motivating shoppers are topography, metropolitan density and government regulations, it is not surprising compact crossovers are pre-

ferred over full-size SUVs in the Northeast,” Henry said. “This shows when brand choice is layered on top of segment preferences, manufacturers like Subaru rise to the top with its four-wheel drive options, along with Volvo and its high safety ratings, which help both brands drive interest in this region.” Saving on fuel and showing

a green streak plays a role out west. In-market new-car shoppers from the Western region of the U.S. are 85 percent more likely to consider Tesla than shoppers from other regions.

KBB.com research also found Western new-car shoppers are 66 percent more likely to consider a hybrid car.

“Western-based new-car shoppers are more likely to shop for a hybrid car and least likely to shop for a fullsize crossover, as a result of higher gas prices in states like California,” Brauer said. “Westerners today are not only budget-conscious at the gas pump, they appear more environmentally mindful than ever before.”

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.

FTC Slaps Dealers for Ads

The Federal Trade Commission announced that nine auto dealers agreed to settle deceptive advertising charges, in a nationwide sweep focusing on the sale, financing, and leasing of motor vehicles.

The agency is taking action against a 10th dealer.

According to the complaints, the dealers made a variety of misrepresentations in print, Internet, and video advertisements that violated the FTC Act, falsely leading consumers to believe they could purchase vehicles for low prices, finance vehicles with low monthly payments, and/or make no upfront payment to lease vehicles.

One dealer even misrepresented that consumers had won prizes they could collect at the dealership.

“Buying or leasing a car is a big deal, and car ads are an important source of information for serious shoppers,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection.

“Dealers’ ads need to spell out costs and other important terms customers can count on. If they don’t, dealers can count on the FTC to take action.”

“Operation Steer Clear” is the latest efort from the FTC to protect consumers in the auto marketplace. The dealerships that settled are charged as follows:

Casino Auto Sales of La Puente, Calif., and Rainbow Auto Sales, of South Gate, Calif., allegedly violated the FTC Act by deceptively advertising that consumers could purchase vehicles at specific low prices when, in fact, the price was $5,000 higher. Both dealers’ ads involved a mix of English and Spanish.

Honda of Hollywood, Los Angeles, and Norm Reeves Honda of Cerritos, Calif., violated the FTC Act by deceptively advertising that consumers could pay $0 up-front to lease a vehicle when, in fact, the advertised amounts excluded substantial fees and other amounts. The ads also allegedly violated the Consumer Leasing Act (CLA) and Regulation M, by failing to disclose certain lease related terms.

Norm Reeves Honda’s ads also allegedly violated the Truth in Lending Act (TILA) and Regulation Z, by failing to disclose certain credit related terms.

Nissan of South Atlanta of Morrow, Ga., allegedly violated the FTC Act by deceptively advertising that consumers could finance a vehicle purchase with low monthly payments when, in fact, the payments were temporary “teasers” after which consumers would owe a different amount. The ads also allegedly violated TILA and Regulation Z, by failing to disclose certain credit related terms.

Infiniti of Clarendon Hills of Clarendon Hills, Ill., allegedly violated the FTC Act by deceptively advertising that consumers could pay $0 up front to lease a vehicle when, in fact, the advertised amounts excluded substantial fees and other amounts. The ads also allegedly violated the CLA and Regulation M, by failing to disclose certain lease related terms.

Paramount Kia of Hickory, N.C., allegedly violated the FTC Act by deceptively advertising that consumers could finance a purchase with low monthly payments when, in fact, the payments were temporary “teasers” after which the consumer would owe a much higher amount, by several hundred dollars. The ads also allegedly violated the TILA and Regulation Z, by failing to clearly and conspicuously disclose certain credit related terms.

Fowlerville Ford of Fowlerville, Mich., allegedly violated the FTC Act by sending mailers that deceptively claimed consumers had won a sweepstakes prize, when, in fact, they had not. Some of their ads also allegedly violated TILA and Regulation Z, by failing to disclose certain credit related terms.

Southwest Kia companies, including New World Auto Imports, Dallas, Texas, New World Auto Imports of Rockwall, Rockwall, Texas, and Hampton Two Auto Corporations, Mesquite, Texas, allegedly violated the FTC Act by deceptively advertising that consumers could purchase a vehicle for specific low monthly payments when, in fact, consumers would owe a final balloon payment of over $10,000. The companies also allegedly deceptively advertised that consumers could drive home a vehicle for specific low upfront amounts and low monthly payments when, in fact, the deal was a lease and they would owe substantially more up front. The ads also allegedly violated the CLA and Regulation M, by failing to disclose certain lease related terms, and the TILA and Regulation Z, by failing to disclose certain credit related terms.

The proposed consent orders settling the FTC’s charges in the nine cases are designed to prevent the dealerships from engaging in similar deceptive advertising practices in the future.

The orders prohibit the dealerships from misrepresenting in any advertisement for the purchase, financing or leasing of vehicles the cost of leasing a vehicle, the cost of purchasing a vehicle with financing, or any other material fact about the price, sale, financing, or leasing.

Township Allows Used Dealers

The township of Lawrence, N.J., recently expanded the area in which used-car dealers may set up shop.

But due to the lot-size requirements and other restrictions put into the zoning code, only a few dealers might be able to take advantage of the change.

Last month, the township council amended the land use ordinance to permit stand-alone car dealerships along Brunswick Pike/Route 1. The stretch of road located just northeast of Trenton is already home to several commercial uses including a shopping mall, new car dealerships, storage facilities and a variety of other retail centers.

Township Manager Richard Krawczun said the change came as the township’s Planning Board was reviewing the zoning ordinance for compliance with the township Master Plan.

“This was just an evolution, responding to the changes in the retail environment for automobiles,” Krawczun said.

Prior to the recent action, newcar dealerships were welcome on Brunswick Pike, but stand-alone used-car dealers were not. The previous zoning “had limited used car sales at locations where new car sales dealerships were the primary use,” Krawczun said.

Used-car dealers are now welcome, but must be located on at least 5 acres with at least 500 feet of frontage on Brunswick Pike/Route 1. That means smaller parcels, like those that once housed gasoline service stations, would be too small.

“When you look at that kind of acreage, there’s just a couple of parcels that may be available,” Krawczun said.

The ordinance amendment also places several restrictions on the physical appearance of any used-car dealerships looking to open there.

Krawczun said the design standards are “similar to what you would see in a new car dealership.”

Buildings must have at least 15,000 square feet of floor area, and must contain a showroom that can display at least four cars. Service bay doors may not face a residential area or the front of the building.

Auto auctions are still prohibited on Brunswick Pike/Route 1.

At a public hearing on the zoning change held last month, one nearby resident said he feared he would be looking out his window at junk cars if the changes were approved.

But board members assured him that the requirements would prevent wall-to-wall dealerships and would ensure the businesses resembled new-car dealerships.

PAGE 8 - NADA

Incoming NADA Chairman Wants Dealers to Have Voice

(Forrest McConnell III is the incoming chairman of the National Automobile Dealers Association. He is president of McConnell Honda and Acura in Montgomery, Ala. He represents Alabama’s franchised new-car dealers on NADA’s board of directors.)

UCN: What is your background?

McConnell: My grandfather and his brother opened a Hupmobile and Scripps Booth dealership in Montgomery, Ala., in 1919.

After the Depression, they distributed DeSoto and Plymouth in Alabama and the Florida panhandle until DeSoto went out of business.

In 1973, my dad, Forrest McConnell, Jr., added Honda. We also operated Chrysler and BMW, but dropped Chrysler in 1979 during its financial troubles.

At 14, I began washing cars at the dealership, and a couple of years later began selling cars.

During college, I handled managerial duties over summer break.

In my second year of law school, I opened a rental car company and operated the business from Tuscaloosa and the University of Alabama.

I saved $150,000 from the business and used that as a down payment for the Acura franchise in 1987.

My dad cosigned the loan. I was also awarded an Infiniti franchise, but later had to sell it because of manufacturer requirements.

Today, I run McConnell Honda and Acura in Montgomery with my brother, William.

I’m a third generation dealer, and an attorney.

UCN: Why did you want to be NADA chairman?

McConnell: The strong leadership of the past chairmen at NADA inspired me during my six years on the NADA board of directors. Several past chairmen provided me guidance on what to expect.

I had lengthy discussions with former NADA chairman Ed Tonkin.

He encouraged me to run for chairman.

As I looked at it, dealers have to be their own advocates in Washington, D.C.

We do not want the federal government making important decisions on how our businesses operate without making our voices heard.

UCN: Are you involved in CPO programs?

McConnell: Yes, certified pre-owned cars are an excellent entry point for new buyers of a brand.

The guarantees and benchmark levels give buyers an increased level of comfort with their purchase and minimize their perceived risk.

Studies show that buyers will come back to the same dealer and brand and purchase a new vehicle the next time they are in the market.

UCN: Do you have any stand-alone used-car operations?

McConnell: No. We sell more than 200 new and used vehicles a month at McConnell Honda and Acura, and we employ 75 people.

UCN: How will NADA members respond to the Consumer Finance Protection Bureau’s push to regulate them via their auto finance partners?

McConnell: We do not object to auto lenders and the dealers they purchase credit contracts from individually and voluntarily entering into compensation arrangements, including flat fees that are acceptable to both parties.

Rather, we’re resisting the CFPB’s attempt to coerce indirect auto lenders into adopting a mandatory flat fee compensation system.

This will drive up the cost of credit for consumers and will not accomplish the CFPB’s goal of eliminating pricing discretion from the marketplace.

This is because dealers typically sell credit contracts to a variety of finance sources, each finance source would set its own flat fee, and dealers will have discretion to select the finance source they sell the contract to.

So while flat fees would eliminate an individual finance source’s pricing discretion, it would not eliminate it for dealers.

We hope the CFPB will recognize this reality and

consider other means of addressing fair lending risks in a way not harmful to consumers.

If the CFPB carefully considers the facts, as opposed to misinformation from some agenda-driven consumer advocacy groups, it should have a greater appreciation for the fact that dealer-assisted financing increases access and reduces the cost of credit for millions of Americans.

UCN: How are dealers responding to Afordable Care Act requirements?

McConnell: Auto dealerships are struggling to adapt to the additional costs and the ever-changing rules of the Afordable Care Act.

Healthcare coverage is an important benefit for dealers and their employees.

Unfortunately, many of the law’s mandates have led to some difcult personnel and benefit decisions.

All businesses need the many technical and procedural issues under the ACA to be resolved quickly.

UCN: What impact does NADA expect new-car sales to have on the usedcar market?

McConnell: Used-vehicle prices will likely decrease moderately if new-vehicle sales increase.

If new-vehicle sales falter, and the OEMs increase incentive spending to reduce inventories, used prices will

likely decline further. Incentive spending by the OEMs on new vehicles tends to reduce used-vehicle prices.

UCN: What is your outlook for 2014?

McConnell: The U.S. economy looks resilient for 2014, but there are a few political headwinds.

Consumers have not quite gotten over the seemingly endless politically driven fiscal crises, but they have been confident enough to keep on buying and leasing vehicles.

Economic growth will track close to 3 percent with sales of more than 16 million new cars and light trucks this year.

Cox Buys Back AutoTrader.com

Cox Enterprises, Inc. and Providence Equity Partners announced a definitive agreement by which Cox has acquired Providence Equity’s 25 percent equity interest in AutoTrader Group.

Cox Enterprises now holds a 98 percent stake in AutoTrader Group, with the remainder being held by current and former employees.

Financial terms of the transaction were not disclosed.

“We have greatly appreciated Providence’s strong contributions to the company’s exceptional performance as a partner in this growth” said Cox Enterprises’ President and CEO John Dyer.

Providence Equity acquired a 25 percent stake in AutoTrader in 2010 to help accelerate the company’s growth.

Since that time, AutoTrader acquired Haystak Digital Marketing, HomeNet Automotive, Kelley Blue Book, vAuto and VinSolutions. The collective companies now constitute AutoTrader Group.

“We are extremely gratified to have partnered with Cox and the AutoTrader team,” said Providence’s Managing Director Michael Dominguez. “Through strategic acquisitions and the introduction of dealer software solutions, they have advanced the original vision

of the company and created a game changer. AutoTrader has redefined the online auto marketplace and the entire auto shopping experience for the better.

“It exemplifies the type of media company we seek to invest in around the world. We are proud to have contributed to its growth and believe the company has a very bright future ahead.”

AutoTrader.com was scheduled to go public with an intial public ofering last year. The IPO was called of last year and Sandy Schwartz, president of Cox-subsidiary Manheim, took over as AutoTrader.com’s CEO.

AutoTrader.com claims to touch more than 62 percent of in-market automotive shoppers.

AutoTrader Group also holds a 21.8 percent stake in Bitauto, a leading provider of Internet content and marketing services for China’s fastgrowing automotive industry.

“Since we launched AutoTrader. com 15 years ago, we have worked tirelessly to meet the needs of our customers by expanding our online and software products,” Dyer said. “With this acquisition, Cox Enterprises and AutoTrader Group will continue to look for opportunities to grow our leadership position and further innovate ways to meet the needs of car buyers.”

– Bret Buike Operations Manager J.D. Byrider

Fast Track Your Cash

State Says Dealer Sold ‘Sandy’ Cars

A New Jersey dealer faces charges he faked titles to sell cars damaged last year during Hurricane Sandy.

A State Motor Vehicle Commission technician and two employees of the Old Bridge dealership previously were charged in the criminal scheme.

Jonathan Olin, the operator of Pinky N Brain Corp NJ, doing business as D&D Auto Sales, was charged with theft by deception, conspiracy to commit computer theft and tampering with public records or information.

Jessie Dinome, who worked as a technician at the Freehold Motor Vehicle Agency, was charged with computer theft and tampering with public records and information.

Christina Farese, a clerk/receptionist employed by D&D Auto Sales, was charged with computer theft, tampering with public records and information, and forgery.

flood damage during Sandy and that were auctioned by an insurance company “for parts only.”

The defendants allegedly had fraudulent “clean” titles issued for the vehicles and sold seven of them to customers who were not told of the flood damage.

The eight flood vehicles were all insured by the same company, which paid claims on them as total losses after Hurricane Sandy.

The insurance company had the vehicles auctioned without titles under “bills of sale,” designating them as salvage vehicles to be used for parts only, not for resale.

It is alleged that Farese worked with Dinome to use the Motor Vehicle Commission (MVC) computer system to create false “clean” titles for the flood vehicles, forging the signatures of the prior owners in the process to transfer the titles to D&D. Dinome remains suspended without pay from her job as a technician for the MVC as a result of the charges against her.

Jacob Douek, a salesman at D&D Auto Sales, was charged with conspiracy to commit theft by deception, theft by deception, and conspiracy to tamper with public records and information.

The defendants allegedly carried out the scheme from February to July of last year.

The dealership acquired eight vehicles at auction that sustained

D&D allegedly sold seven of the vehicles to customers using the fraudulent clean titles.

Douek allegedly misled customers about the cars and about adverse information related to Hurricane Sandy that showed up in CarFax reports.

quality, value, selection: Chase.

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Southern AA February 12 860-292-7500

Choose Chase on ADESA.com and OVE.com for quality bank-sourced vehicles. Contact auctions directly for current sale information.

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ADESA Golden Gate February 4 209-839-8000

Manheim Atlanta February 5 404-762-9211

Manheim Dallas February 12 877-860-1651

Manheim Milwaukee February 12 262-835-4436

Manheim Orlando February 17 800-337-8491

Mazda Capital Services

ADESA Boston February 14, 28

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ADESA Golden Gate February 11 209-839-8000

ADESA Kansas City February 4 816-525-1100

Columbus Fair AA February 26 614-497-2000

Manheim Atlanta February 6 404-762-9211

Manheim Detroit February 6, 20 734-654-7100

Manheim Fredericksburg February 27 540-368-3400

Manheim Milwaukee February 26 262-835-4436

Manheim Nashville February 19 877-386-5004

Manheim New Jersey February 12, 26 609-298-3400

Subaru Motors Finance

ADESA Boston February 14, 28

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Brasher’s Salt Lake February 25 801-322-1234

Columbus Fair AA February 19 614-497-2000

Manheim Dallas February 26 877-860-1651

Manheim Denver February 12 800-822-1177

Manheim Detroit February 6, 20 734-654-7100

Manheim Fredericksburg February 13 540-368-3400

Manheim Milwaukee February 12 262-835-4436

Manheim New Jersey February 26 609-298-3400

Manheim Orlando February 11 800-337-8491

Manheim Pennsylvania February 6, 20* 800-777-2053

Manheim Riverside February 13*, 27 909-689-6000

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Manheim Pittsburgh February 12 724-452-5555

Manheim Riverside February 11 909-689-6000

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Manheim Pennsylvania February 21 800-777-2053

Manheim Pittsburgh February 12 724-452-5555

Manheim Seattle February 5 206-762-1600

Manheim Southern CA February 20 909-822-2261

Southern AA February 12 860-292-7500

Retail / Loan and lease accounts are owned by Chase. © 2013 JPMorgan Chase Bank, N.A. Member FDIC. All rights reserved. (12-381) 06/12

AG Sues over Missing Titles

Ohio’s attorney general filed five lawsuits against Northeast Ohio car dealerships for failing to deliver motor vehicle titles as required by law.

The attorney general is seeking more than $32,000 in total reimbursements from the dealerships for payments made to resolve consumers’ complaints.

The attorney general filed lawsuits against the following dealerships and/or their owners. (The amount of reimbursement sought is indicated in parentheses):

Auto Bahn, 13305 Lorain Ave., Cleveland ($15,854.25)

The Car Shack, 355½ Arlington

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St., Akron ($2,048.50)

R&M Auto Service & Sales Inc., 3559 W. 140th St., Cleveland ($3,474)

Selective Auto Mart, 4675 Warner Road, Garfield Heights ($8,510)

Y-Town Auto Sales, 3205 Market St., Youngstown ($2,266.50)

According to the lawsuits, the dealerships violated Ohio’s Consumer Sales Practices Act by failing to obtain titles in the purchasers’ name within the required time frame. In the lawsuits, the attorney general seeks full reimbursement to the Title Defect Recision Fund, injunctive relief and civil penalties.

Self-Driving Autos to Grow

Self-driving cars (SDC) that include driver control are expected to hit highways around the globe before 2025 and self-driving “only” cars are anticipated around 2030, according to an emerging technologies study on Autonomous Cars from IHS Automotive.

In the study, “Emerging Technologies: Autonomous Cars—Not If, But When,” IHS Automotive forecasts total worldwide sales of self-driving cars will grow from nearly 230,000 in 2025 to 11.8 million in 2035 – 7

million SDCs with both driver control and autonomous control and 4.8 million that have only autonomous control.

In all, there should be nearly 54 million self-driving cars in use globally by 2035.

North America is forecasted to account for 29 percent of worldwide sales of self-driving cars with human controls (level 4) and selfdriving only cars (level 5) in 2035, or nearly 3.5 million vehicles. China will have the second largest share.

Dealer Sues Other Dealer, Cop

By Sheila McGrath

A Pennsylvania used-car dealer has filed a civil rights claim against a Pennsylvania state trooper, along with another car dealership and the dealership’s owner.

The suit arises from a scam involving wholesale prices that took place in 2009.

Michael M. Bartow sued state police Cpl. Edward R. Thomas, Tri-Star Motors Inc. and Tri-Star owner Kevin B. Sergent Bartow is the owner of Mike’s Car Lot in Latrobe, Penn.

Bartow than they were when TriStar took them in on trade.

In his investigation of the case, Thomas calculated that Tri-Star had lost approximately $11,186.50 on 125 vehicles that were sold to Bartow from October 2006 to December 2007.

In 2010, Thomas went to the Somerset County District Attorney with claims that Bartow and Humbert had conspired to undervalue used cars so they could be wholesaled at a lower price to Bartow’s dealership.

Bartow, Humbert and one of Bartow’s employees were charged with theft, criminal conspiracy and receiving stolen property.

He alleges that Thomas deprived him of his right to be free from malicious prosecution, and that TriStar Motors and Sergent provided false and misleading information to authorities for the purpose of prosecuting him.

Bartow was never found guilty of improper financial dealings, and the case against him was dropped in 2011.

Cpl. Thomas initiated the investigation against Bartow in 2009, after Sergent contacted the Pennsylvania State Police.

He said he had noticed that the figures put down for the wholesale value of trade-ins by his used-car sales manager, David Humbert, were diferent after he sold them to

After the case against the men was filed, Sergent filed a claim with his insurance company for the money Tri-Star Motors allegedly lost as a result of the conspiracy, and received a payment on the claim.

But Bartow’s lawsuit states that he didn’t even buy all 125 of the cars in question, and that there was a logical explanation for the discrepancy in the figures.

In his complaint, Bartow states that trade-ins are used to leverage sales on new cars, and dealerships often pay a customer more for a trade-in than the appraised whole-

Continued on page 19

Ally Settles with Feds over Discriminatory Pricing

Federal regulators took their first action in their campaign against alleged discrimination in auto lending.

or trucks based on their race or national origin. We look forward to working closely with the Justice Department and Ally to make sure

auto loans than similarly-situated non-Hispanic white borrowers. The investigation found that these discriminatory pricing diferences

“Discrimination is a serious issue across every consumer credit market.”

Richard Cordray

sumer harm. Ally will pay $80 million to a settlement fund that will go to the borrowers whose auto loans were pur-

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Lawsuit

sale value.

- Continued from page 16

“As such, dealerships often lose money on the wholesale end of such deals,” the suit alleges.

“Even assuming the veracity of the figures, Defendant Tri-Star only lost approximately $89 per car in a segment of the business that frequently loses money.”

Further, the lawsuit alleges, Thomas never compared the wholesale transactions with Bartow to wholesale transactions with other dealers to see if there were similar losses.

And neither Thomas nor Sergent consulted Kelly Blue Book or any other appraisal sources to see if the vehicles were undervalued.

Despite subpoenaing financial records of both Bartow and Humbert, investigators found no evidence that Bartow and Humbert had ever exchanged money, Bartow’s suit says.

Bartow is seeking damages for loss of business, damage to his reputation, and emotional distress, along with punitive damages and attorney fees.

GM Vehicles Draw Raves

DETROIT (AP) — General Motors’ Chevrolet brand swept the North American Car of the Year and North American Truck/Utility of the Year, giving the resurgent Detroit automaker another boost at the beginning of the Motor City’s annual auto show.

The Chevrolet Corvette Stingray received the car award, and the truck was the Silverado. The Chevy sweep came after General Motors Co. made the most appearances on this year’s list finalists, which also included the Cadillac CTS and Mazda3 on the car side and Acura MDX and Jeep Cherokee on the truck/ utility side.

The Cadillac ATS took top car honors last year.

The awards always kick of the press preview days for the North American International Auto Show, though they aren’t afliated with the show. Forty-eight full-time automotive journalists vote on winners from the list of finalists.

The win for the Corvette, which starts at just under $52,000, is a strong point of pride for the company. The Stingray debuted exactly one year earlier and represents a redesign of a model that’s been in production for 60 years.

Alan Batey, soon to be GM’s North American chief, said the company can’t make enough Corvettes.

Batey added that the Chevrolet brand isn’t as healthy as it needs to be globally, but the independent awards should help show that the brand and automaker are “on the move.”

Sweeps are a frequent feature in the awards program: GM also nabbed the truck honor for the Silverado in 2007, while the car award that year went to the Saturn Aura. Ford pulled of a double-win in 2010 with the Fusion Hybrid and Transit Connect. Honda’s Ridgeline and Civic pulled it of in 2006.

A vehicle must be all new or substantially changed to be eligible for the awards, now in their 21st year. Organizers accept no advertising, though carmakers try to capitalize on the marketing value of the honors.

Incoming GM Chief Executive Mary Barra, who attracted a throng of moving journalists as she left the hall where the awards were announced, said the sweep shows that designers, engineers and product development specialists “sweated the details.” The awards, she said, should translate into customers at least considering the Chevrolet brand.

“Everything that’s in the factory is pretty much customer sold,” he said.

“I hope that people look and if they haven’t considered General Motors or Chevrolet, they’ll get into the showroom, because I’m confident if they get into the showroom they’ll see a lot of vehicles they like,” she said.

Originations Rise as Defaults Drop

The latest Equifax National Consumer Credit Trends Report indicates that as portfolio quality has improved, originations in multiple consumer loan types have opened to higher risk consumers to varying degrees. This is reflected within the auto lending sector as origination continues to thrive while payment performance improvements for auto loans remain strong.

From an origination standpoint, the most recent data indicates that the auto-lending sector enjoyed its highest September monthly origination totals in eight years, with 1.9 million auto loans originated.

Subprime auto lending now accounts for approximately 30 percent of all auto loans originated. Total auto loan amount originated also hit an eight-year high.

Author Pens History of American Motors Corp.

MILFORD, Conn. (AP) — Automotive writer Patrick R. Foster always had a soft spot in his heart for the so-called orphans of the road — car brands that are no longer produced like Packard, Duesenberg and Studebaker.

Now he has written what quite likely is the definitive history of the American Motors Corporation, a car maker that itself was forged in 1954 from the wreckage of three other mostly forgotten automobile brands — Nash, Hudson and Kaiser.

Foster, who had access to AMC’s corporate files, tells the story of a car company that through luck, pluck and innovation managed to survive and even thrive despite withering competition from the Big Three.

His new book, “American Motors Corporation: The Rise and Fall of the Last Independent Automaker,” is in bookstores now, and also available from the site www.oldemilfordpress.com.

“From about 1956 through about ‘64, the Rambler was seen as a smart buy, but after that it was perceived as something cheap,” Foster said from his home in Milford. “George Romney may have overdone the ‘economy’ angle.”

Romney, the father of former GOP presidential candidate Mitt Rom-

ney, took over the reins of AMC in late 1954 — after the death of its first CEO, George W. Mason — and took on the task of cobbling together new models from the old lineups of Nash and Hudson.

By 1956, the Nash and Hudson nameplates disappeared from the scene, replaced by AMC’s flagship brand, the Rambler.

The bread-and-butter car was the Rambler American, the first U.S.built compact car. It sold by the thousands as Americans warmed up to the idea of getting a second car.

Three similar-looking larger cars rounded out the lineup, the Ambassador, the Rebel and the Six.

To cut costs, parts and assemblies were shared across the brand wherever possible. In one instance, a model was restyled in part by mounting a rear tail light lens upsidedown.

The company ofered a strange amalgam of forward-thinking designs and ancient technology. AMC was the first U.S. automaker to ofer curved side-window glass and unibody construction. But it persisted with inefcient flathead engines and annoying vacuum-powered wipers into the mid-1960s — both automotive artifacts from the preWorld War II era.

tpc_1Q2014-CAC_UCNjan20.pdf 1 1/9/14 2:59 PM

“You look at things like that and

you have to ask yourself, ‘What generation is this car from?’” Foster said.

The company teetered on bankruptcy from time to time, seemingly kept afloat only by Romney’s missionary zeal.

“He was able to rally the dealership network, the marketing people and even the guys on the

shop floor,” Foster said.

But Romney’s tenure at AMC came to an end on Feb. 10, 1962, when he announced that he was quitting to run for governor of Michigan.

The men who succeeded him seemed to lack his sense of marketplace timing and weren’t as good at wringing deals from labor unions, car dealers and suppliers.

Weather - from page 3

The association’s phones were out during the storm on Jan. 6 and 7, which made Jan. 8 a busy day at the ofce, Rinehart said.

To help dealers afected by the storm, Manheim and ADESA auctions are ofering some incentives. Manheim auctions in the Midwest and East Coast are waiving online fees for vehicles purchased through Simulcast and facilitation fees for vehicles purchased through OVE. com to assist dealers. The fee waivers are efective through Jan. 31, and apply on all open and closed sales at 28 locations in the Mid-Atlantic, Midwest, Northeast and North Central markets.

Outlook - from page 1

both new- and used-car sales. Johnson said student loan debt is one major factor holding back young buyers. A monthly student loan payment averages between $180 and $350, the same as a monthly car payment.

Caldwell said one good sign for the car business is that young people may not care as much about cars, but they care a lot about getting a good deal. More than even their elders, young people like to

“Our employees are making every effort to list cars online as fast as possible, ensuring that customers in these four markets continue to have access to the most inventory, despite the tough weather conditions,” said Nick Peluso, senior vice president of customer management. “Dealers rely on us to meet their vehicle buying needs 24/7, and we want to do all we can to help them maintain business momentum economically and safely as they start the new year.”

ADESA has waived Internet service fees on sales via ADESA LiveBlock through Jan. 31.

brag about buying goods for a low price, both in person and online.

This creates an opportunity for manufacturers and dealers to attract these buyers with the right incentives.

The number of young buyers should rise as the economy improves.

“We’ll see these people come to market,” Caldwell said. “It’s just delayed. It’s unsettling because we’ve never seen a generation like this.”

Manheim

Names General Manager

Manheim announced that Julie Picard, market vice president of Manheim’s Pacific Market, has been named general manager and vice president of Manheim Pennsylvania. Picard replaces Tim Van Dam, who was named market vice president of Manheim’s Northeast Market earlier this year. Picard reports to Van Dam and began her role on Jan. 1. In her role as general manager and vice president, Picard will be responsible for all aspects of auction operations. In addition, she will spearhead conservation and community service initiatives. Manheim Pennsylvania operates the largest state-of-the-art reconditioning center and a water conservation center that reduces its daily water demand by 60 percent.

Picard was the recipient of the 2013 Laurie Dobberphul Top Achiever Award, presented by GE Remarketing, presented to women who continuously make a diference and are passionate about the automobile industry.

PEOPLE IN THE NEWS

Picard graduated with a bachelor’s degree in accounting from the University of Montana.

NADA Taps Chief Economist

The National Automobile Dealers Association has named Steven Szakaly as its new chief economist. Szakaly brings more than 10 years of forecasting and industry analysis experience to NADA. Prior, he led economic forecasting at Clifs Natural Resources in Cleveland, Ohio.

He has worked with General Motors in powertrain forecasting in Detroit and was an economist with the Center for Automotive Research in Ann Arbor, Mich.

Szakaly began his career as an associate economist with the Federal Reserve Bank of Chicago.

Insurance Auto Auctions Makes Changes at the Top

KAR Auction Services announced that Tom O’Brien, chief executive ofcer of Insurance Auto Auctions

and a director of KAR’s board, will step down as CEO of IAA efective April 30.

O’Brien will remain a member of the company’s board of directors until the company’s next annual meeting of stockholders to be held in June, at which time he will retire from the board.

John Kett, currently president and chief financial ofcer of IAA, will assume the role of chief executive ofcer and president on May 1.

Kett joined IAA in 2001 as senior vice president of planning and business development, becoming chief financial ofcer in 2007 and assuming the role of president in 2011. Prior to joining IAA, Kett served in a variety of senior financial and operational roles for Central Steel and Wire Co., Safelite Glass Corporation (formerly Vistar, Inc.), Newark Electronics and Deloitte LLP.

Experian Appoints President

Experian announced that Jennifer Schulz has joined the organization as group president of its vertical markets group, which includes the automotive, public sector and healthcare businesses in North America.

In her new role, Schulz will focus on growing and expanding Experian’s vertical markets in North

America.

Prior to joining Experian, Schulz served as senior vice president of global product strategy, innovations and e-commerce for Visa Inc.

Schulz earned her Bachelor of Arts in public relations from the University of Wisconsin and her master of business administration from the University of Michigan-Ross School of Business.

Firm Adds Two Managers

Primeritus Financial Services Inc. announced the addition of two managers.

Ben Murdock has joined Primeritus as vice president of sales and services. Murdock most recently served as executive director of sales and services at Openlane, where he held several senior positions during his tenure there. Murdock holds a B.A. in business management and an M.B.A. in international business. He will report to executive vice president of sales, service and marketing Joe Mappes

Chris McGinness has accepted the position of general manager for the El Dorado Hills, Calif., Primeritus location. After an early background in public accounting, McGinness began his management career at ADESA, where he served as general manager of its Sacramento auction for more than 10 years.

RETAIL MARKETS

FLORIDA

Brandi Noegel, president, Noegel’s Auto Sales, Stark, Fla.:

“We have a single location with a current inventory around 70. I probably had a few more last year, I had around 90. We average around 35 (sales) a month, last year was a little lower –probably around 30.

“I get my cars from auctions only and we only do buy here pay here finance. My average down payment will be anywhere from $500 to $1,500 and the average weekly payment is around $80. The average term length would be 36 months at the most.

“Looking at the lot I’d say we have more cars than SUVs, about two-thirds cars and one-third SUVs and trucks. Last year I would say it was at least 50-50. We have about 10 percent imports. My customers aren’t into imports.

“Our average model years range from 2002 to 2006 this year while last year was probably between 2000 and 2004. My average mileage varies but it would prob-

ably be between 80,000 and 120,000.

“The average retail price of my vehicles ranges from $8,995 to about $10,995.

I definitely recon my vehicles and spend on average, I’m probably one of the worst ones, but I spend about $800.

“I have my own service center with six service bays and a body shop on the other side with three bays. We service outside customers as well as our own.

“We advertise through newspapers, a little radio, we do the Internet and that’s about it. We use our local newspaper and a showcase advertising newspaper also.

“We recently sold a 2002 6-cylinder XLT Ford Ranger four-door supercab for $8,995 and $1,000 down with 110,000 miles.

“I’m expecting a lot more sales this year, we’re expecting business to pick up. We’re in a small community so it’s more word of mouth. We want to have 45-58 sales a month hopefully as things pick up.

“Recently, it’s been down

so we’re just trying to promote and get out in the community and just trying to do things to make it increase. We’ve been working on our websites and just doing everything we can to promote it and hopefully things in the economy will pick up.”

MICHIG AN

Rick Rynberg, president, Rynberg’s Car Co., Muskegon, Mich.:

“We’ve been in business for 19 years. We have one location.

“We keep about 50 (vehicles) on the lot.

“We do conventional financing. We don’t do buyhere, pay-here.

“My cars are retail in the $8,000 to $12,000 range.

“The economy here in Muskegon is tough, but we average sales from 15 (units) to somewhere in the 20s per month.

“One great thing is we do about eight to 12 sales per month from repeat business.

“During the first week of January (during the winter storm and freezing weather), we sold four vehicles

Compiled by Gabriel Camero and Jeffrey Bellant

and three of them were repeat business and one was a referral.

“My vehicles are either new-car trades or lease returns. We get them from diferent auctions and some new-car stores.

“I’m a buyer for a General Motors store. So I buy for them and get some of their trades.

“I don’t have a (repair shop). I source work out. Everything gets a fresh oil change. We try to check them out as (thoroughly) as we can. I get a Carfax on all of the vehicles. If they’ve been in an accident, we don’t buy them.

“An example of my reconditioning, I bought a 2011 Ford Escape. It might have had 60,000 miles, but I had the original tires on it. So to get new tires, it cost about $600. The brakes were pulsating so we put brakes on it. So we probably put $800 or $900 into it.

“We have a good name for selling trucks and sport utility vehicles, so we’re heavier into trucks.

“We probably sell 25 percent cars.

“We do better with domestics than with imports. For example, I’ve got a beautiful Nissan Titan on my lot, but it’s been here more than three months.

“Our average mileage is between 50,000 and 100,000. I would love to deal in one- to two-year-old lease returns, but that’s just not my market.

“We put a three-month, 5,000 warranty on most of my vehicles.

“(For advertising) we use local papers and (trading publications). We sell cars all over the state. We also have a website.

“About five months ago, I bought a 2006 Dodge Ram megacab one-owner truck. I had about $18,900 into it. It booked for $25,000. But it was two-wheel drive so I wasn’t getting any (ofers). Just before the end of the year a guy called the website number from Florida about it. We just wanted to get out of it. So I sold it and just recouped my money.

“The week after I sold it, I had four calls from Michigan on it. It’s just a crazy business.”

WHOLESALE MARKETS

INDIANA

Bob Ruth, general manager, Wolfe’s South Bend Auto Auction, South Bend, Ind.:

“This is our 11th year in business at this location.

The Wolfe family has been in the auction business for a while. It owns (this sale) and has an auction in Evansville, which has been there for around 25 years. They have had an auction in Terre Haute, Ind., for 38 years.

“We’re family-owned, so that’s a diferent perspective than you get with some other auctions. Before I got in the auction business, I had been on the (retail) side, as a new-car manager, general manager, etc. As I looked at how auctions were run, I saw that you had a lot more flexibility with independent family-run auctions.

“We average about 250 to 300 units per week. We’re running two lanes currently, but we have the capacity to run four lanes.

“This is the time of the year where you do 60 to 65 percent (conversion) sales.

“Our sales in December

were comparable to the (prior year) sales.

“We probably have 100 plus bidders at our sale.

“We draw dealers from the Chicagoland area and from as far east as Fort Wayne, Ind., as far north as Grand Rapids, Mich., and, believe it or not, as far south as Evansville and Terre Haute, Ind.

“We also do fleet-lease and repossession units.

Most of it is local, but we do have some larger national accounts that give us some cars.

“Both of our lanes are live (online). We just started last year with online bidding. We use AWG. We went with one lane and that went pretty well. So now we’re integrating the second lane and hopefully that will (boost) participation. We do sell some late-model units here and that’s where you really take advantage of (online sales) as far as having more eyes on a vehicle or specific type of a vehicle.

“We also have a salvage sale every week. Oddly enough, we have an awful lot of online bidding for

that sale.

“We’ll run anywhere from 15 to 30 units. That’s good business for us.

“Our average price for our overall sale is around $3,000 to $3,500.

“I absolutely believe 2014 will be a better year, not only for dealers, but for auctions as well.”

MICHIGAN

Bill Williams, president/ owner, Flint Auto Auction, Flint, Mich.:

“This year is our 61st year in business.

“We have eight lanes and we average about 2,000 cars per week.

“Our sales percentage varies with the diferent types of consignors. Overall, though it’s in the high 50s to low-60-percent range.

“The rental car companies tend to have a little lower percentage sold, so that might throw of the percentage.

“Typically we have about 700 bidders at every sale.

“We’ll have about 35 states represented (by bidders) at the sale. They are predominantly from the

Compiled by Jeffrey Bellant

Great Lakes states – Michigan, Illinois Indiana and Ohio. But we have buyers from all over, from California to Florida.

“About 60 to 65 percent of our vehicles are dealer consignment. The rest is fleet-lease and factory (consignment). We have a General Motors factory sale every other week. We’ve had that sale for about 12 years. We also have Ally as a big consignor, U.S. Bank, Avis and Hertz.

“Usually, at our factory sale, we’ll run 350 vehicles every other week. Typically, they sell a high percentage.

“All of our lanes are simulcast every Wednesday. Online sales, via the simulcast, continue to grow year after year. We also post cars in between sales and sell them online.

“We also have an ‘early bird’ sale before our regular sale that runs from 8 a.m. to 9 a.m. That sale features cars that usually sell for $5,000 or less (on the block). They are older used cars and very popular with independents and buy-here, pay-here dealerships. Some

weeks that can include 250 to 300 vehicles.

“Our average sale price in 2013 was $11,600. We still have a preponderance of late-model used cars, with our factory cars and fleetlease. So that price reflects that mix.

“We’re really excited about 2014. We’ve got a really great team of people in place.

“One thing that we anticipate seeing is a lot more oflease cars coming through the auction. I think it’s also going to be good for dealers. Also, because there are so many of these (fleetlease) vehicles coming back, I think the prices should be reasonable.

“As far as other changes at the auction, we opened an additional dealer parking lot on Nov. 1. We’ve also acquired some additional acreage that we will be developing this year.

“We also just opened a 20-acre marshaling facility in December. We already have about 1,000 vehicles in there.

“We’ve also had some upgrades in technology.”

Certified Pre-Owned Retail Sales

ACTUAL WHOLESALE AND PROJECTED RESIDUAL VALUES

JANUARY

2012 MODEL S

2011 MODEL S

BMW

Hyundai Sonata GLS 4D Sedan 2.4 15550 13850 12300 10450 8875

Lexus ES 350 4D Luxury Sedan 30800 29000 27800 23275 20450

Mercedes-Benz E Class E350 4D Luxury Sedan 39900 36200 33400 27900 23275

Mitsubishi Galant ES 4D Sedan 11900 12000 11350 9450 8075

Nissan Altima Base 4D Sedan 13500 12700 11350 9675 8425

Nissan Altima S 4D Sedan 14700 14000 12650 10700 9325

Nissan Sentra Base 4D Sedan 11800 11350 10700 8825 7700

Toyota Camry LE 4D Sedan 16700 15500 14150 11925 10600

Toyota Corolla LE 4D Sedan 13300 12800 11500 9875 8675

Volkswagen Jetta SEL

2010 MODEL S

Domestic Cars Jan-13 Jul-13 Jan-14 Jan-15 Jan-16

Buick LaCrosse CX 4D Sedan 14950 14200 12500 10550 8900

Cadillac DTS 4D Sedan 18500 18100 17600 12900 10725

Chevrolet Cobalt LS 4D Sedan 8400 7850 6800 5625 4875

Chevrolet Impala LS 4D Sedan 10400 9800 8050 6675 5750

Chrysler 300 Touring 4D Sedan 13600 13550 12350 9775 8250

Chrysler Sebring Touring 4D Sedan 10400 9650 8200 5350 4225

Ford Mustang 2D Coupe 13000 12600 11950 9925 8675

Ford Taurus SEL 4D Sedan 14900 14400 12800 9975 8300

Lincoln Town Car Signature Limited 4D Sedan 18850 17800 17450 13425 10950

Ford Focus SE 4D Sedan 9400 9400 8050 6650 5325

Import Cars Jan-13 Jul-13 Jan-14 Jan-15 Jan-16

Acura TL 4D Sedan 20600 20500 18200 14450 11925

BMW 3-Series 328i 4D Sedan 20800 20200 16850 13925 11600

BMW 7-Series 750Li 4D Sedan 48700 40800 38150 31225 26125

Honda Accord LX 4D Sedan 12450 12600 11750 9675 8350

Hyundai Sonata GLS 4D Sedan 9800 9450 8250 6925 5725

Lexus ES 350 4D Luxury Sedan 23600 21900 20600 17300 14675

Mercedes-Benz E Class E350 4D Luxury Sedan 31300 28000 25800 19200 15450

Mitsubishi Galant ES 4D Sedan 9500 8700 8050 6575 5475

Nissan Altima 4D Sedan 10550 10100 8900 7225 6150

Nissan Altima S 4D Sedan 11850 11400 10200 8075 6875

Nissan Sentra 4D Sedan 9800 9300 9000 6925 5850

Toyota

Trucks

2009 MODEL S

AUCTION RAMPS UP FOR TAX TIME

BEFORE TAXES: Amil Rafkah of Prestige Trading Co., wins the top prize of $5,000 during Carolina Auto Auction’s pre-tax time sale.

Carolina Auto Auction held a one-day “pre-tax time sale” allowing dealers to stock up on inventory before the buying rushing. The auction ran more than 1,500 units, selling 750 of them, with more than 800 dealers present.

The fleet-lease lanes, which run in lanes seven and eight at Carolina Auto Auction, had more than 700 vehicles for sale. The biggest consignor was Santander with 175 units.

At the sale’s conclusion, dealers had a chance to win one of four cash prizes totaling $10,000. The biggest winner was Prestige Trading Company, winning $5,000 cash. Alex Diaz Auto Sales won $3,000 and the two $1,000 winners were A&K Automotive and Duvall Ford.

Also as part of the festivities, Carolina Auto Auction hosted its weekly Dealer of the Week - with Preduo Mathis from Star Motors in Saluda, S.C., as the week’s featured dealer. Mathis had three throws of the turkey in Carolina’s Turkey Bowling game and won $100. Every week CAA pulls a diferent Dealer of the Week from those who “Like” or “Follow” the auction on Facebook or Twitter.

DAA Seattle Introduces New Sale Day

DAA Seattle’s first Friday sale took place Dec. 6 and delivered an increase in consignment and dealer activity.

The auction launched in May of 2013 with Tuesday afternoon sales, but decided it was time for a change.

“After conducting meetings with a broad base of customers and listening to their feedback, we decided that Friday morning was the right time for DAA Seattle to do business,” said Bob McConkey. “Today’s inaugural Friday sale was 100 percent successful.”

In addition to the sale day change, DAA launched a new lane layout at its Dec. 6 sale.

“The new sale day and lane layout is fantastic,” said Chris Anderson of Burien Chevrolet and Burien Toyota.

“These guys are good – they listen to their customers and they react. I ran 22 and sold 20, including 15 for 15 on my late models, and the money was excellent.”

Disconnected Jottings From Tony Moorby...

At the auction recently, a dealer asked me if the car business was ever going to get “back to normal.” I know exactly what he meant – this is my forty-sixth year in the business – but there is no “normal” any more.

There used to be a certain reliability to the seasons. The start of the year always provided new excitement and trading activity was vigorous, shrugging of the doldrums of the holidays. That level of upbeat activity was good all through the spring to early summer when sales would flatten out a bit in the dog days. Things would swing back into feverish selling again at new model announcement time, typically around October, providing a profitable push into the winter.

That was all in the days before market intervention.

A dealer would negotiate discounts for a straight deal with no trade or inflate the price of a trade, using some of the gross from the car being sold. He’d set monthly

dealers for a regional presence and, finally, the dealer would ensure that the same message was spread along his stretch of the high street with local ads and promotions.

Affordable Kia

LR2 or LR4

9. Beverage often served with lemon

10. Tesla Model S 11. Xterra and Armada

12. Place for short

13. FR-S or xB

15. Trendy

16. The look

20. XK and XJ

21. From zero to ____

22. Pipe

24. Ford model

27. Affordable large car from Hyundai

29. ___ Stirling Moss. legendary Formula One driver

payments from a rate book he kept in his pocket. The cycle was about every three years to trade a car.

This started a cascade of events. Was the trade good enough to retail or would it slide into the oblivion of the wholesale market for someone else to build a potential profit into it? If it was retailable then it might attract another trade for the same set of decisions to be made.

At the top end, the manufacturers would have a national advertising campaign, supported by a group of

Then, in the ‘80s, the manufacturers took a retail presence, ofering rebates, cashback programs and the like, direct from the factory. It went further; fleets enjoyed all kinds of new, innovative sales gimmicks, ofered directly or sponsored by the manufacturers. Programs promising “guaranteed” residual values became the order of the day but, of course, the market sets residual values, not some pencil pusher in the executive suite and many a financial cold was caught when it came time to sell. Further, they found out that if you publicly reduce the transaction price of the new product, then late-model used cars follow suit. Overall, the value of the product becomes denigrated, even tainted. It takes an unmitigated fortune to rebuild the perceived value back in to the marque and a long time too. Finance subvention was

another short-term fix to drive customers to replace cars they were already buried in and we all witnessed the inevitable meltdown of funding people who couldn’t aford another car in the first place. These practices leached into the housing market too, fostering the recession out of which we’re now finding it so hard to climb.

Looking back, this is all simple economics. Looking forward isn’t so simple. Local loyalties and dealers being responsible for their market area and a growing responsibility for units-inoperation for the service and parts departments to look after, are getting less and less.

Broader access to cars through technology and wider communications

capabilities means that the public can and does go anywhere to source exactly what they’re looking for rather than being sold something that’s available on the local dealers’ lots.

No one seems to be guided by the time of year to drive the purchase decision any more and we don’t take out second mortgages to get a tax break to buy a car. Instead we buy-here, pay-here or buy used instead of new because the quality has gone up and today’s 100,000 miler is the norm, not the rarity. The age of the car park keeps growing as the scrappage rate reduces.

So many more influences come in to play now that there is no normal anymore and planning or budgeting is like pinning the tail on the donkey.

By Miles Mellor

SUV (abbr.)

Automatic cash source

Mid-___ car

Volkswagen model

Promotional piece

Hyundai compact offering

Viper makers

Historical period

Sign of agreement

Toyota hybrid

Find a buyer for Down

Honda hatchback

Corroding

Time of arrival, for short

Betas and Deltas

Nail-biting margin of victory

Trial run, out on the highway (2 words)

Bugs

____over, danger when driving too fast on a curve 12. Exercise class, abbreviation

Spic and span

RX 350 for one

RDX and TSX 19. Car that runs on gas and electricity 20. Cherokee and Patriot

__Lorean

Felix and Sylvester

Used a lot of gas

French for summer

___car.com, competing with car rental companies 32. Miata is one of its models

Credit card percentage

__ Cruiser

Turn over, of an engine

It often has sliding

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