Used Car News 4/1/13

NAAA Members Saw More Cars Last Year

National Auto Auction Association member auctions last year sold an estimated 7.9 million used vehicles worth $72.7 billion, according to the trade organization’s 16th annual survey, which excludes upstream sales.

The survey found that the estimated number of vehicles entering the auctions increased by 6.4 percent, to 14.6 million and the conversion percentage was down 1.7 percent.

BBB Warns of Fake Dealership Sites

The Better Business Bureau of Minnesota and North Dakota (BBB) is urging consumers considering an online car purchase to be extra cautious following three recent incidents involving bogus auto dealer websites, each claiming to be located in North Dakota.

Each site claimed a physical address in North Dakota, and provided one or more North Dakota phone numbers.

The fake sites have brought complaints from consumers from Connecticut to Hawaii.

Auctions Embrace Online Challenges

By Jeffrey Bellant

LAS VEGAS – Building excitement in the lanes and strengthening online relationships with customers are key ways to improve the auction experience, a panel said during the Conference of Automotive Remarketing.

Doug Turner, director of asset management for J.D. Byrider, said giveaways don’t necessarily draw him to a particular sale.

“But we do find value in promotions that create an environment of energy and excitement in the lanes,” Turner said.

Turner said he goes to auctions for the inventory, not for the prizes.

Ford Motor Co.’s Linda Silverstein, manager of remarketing and rental operations, agreed that trinkets wouldn’t make a diference in the number of bidders in the lanes.

“A hat? A jacket?” she said.

“That’s not going to bring someone there.

“But building a community, having a relationship with a customer and making it fun for the customer is what I’m trying to commu-

nicate,” she said. She cited the Apple store as an example of how to attract customers to a venue.

The company holds classes and special events that make shopping at the stores into a fun experience for the consumers.

Silverstein said even though the younger generation is more technologically

savvy and do more business online, the manufacturer still has to have a relationship with its customers.

Tony Moorby, principal of Chattanooga Auto Auction, said it’s still possible to have that close relationship with a customer who does most of his interactions online.

“(For example), you can become known as trustwor-

thy in terms of your vehicle descriptions and your condition report-writing capabilities,” Moorby said.

Moderator Jim DesRochers, vice president, Dealers Auto Auction of the Southwest, said the wholesale side is fractured, from auction lanes to onlinesales to multi-platform selling.

Continued on page 12

Cox Adds AutoTrader to Manheim CEO’s Portfolio

Cox Enterprises, Inc. announced that Sanford (Sandy) Schwartz, president of Manheim, also will assume the role of president of AutoTrader Group.

Schwartz’s automotive experience includes serving as president of Cox AutoTrader, comprised of both AutoTrader.com and AutoTrader Publishing. He also has served on the board of AutoTrader.com for many years.

Schwartz replaces Chip Perry, who leaves his role as AutoTrader’s CEO

efective May 1.

Perry, who served as president & CEO of AutoTrader.com, was the company’s first employee in 1997 when he was asked by Manheim to launch the online venture.

Following an acquisition spree in the past couple of years, AutoTrader was scheduled to make an intial public stock ofering this year. However, the company withdrew the IPO, citing market conditions.

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Panel: Inventory Woes Remain, Though Auctions Help

By Jeffrey Bellant

LAS VEGAS – An independent dealer panel said inven-

cles, he’s also buying vehicles with higher mileage than ever before. It also means he’s paying higher prices.

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CPS Offers Securitization

Consumer Portfolio Services Inc. announced the closing of its first term securitization of 2013.

The transaction is CPS’s eighth senior subordinate securitization since 2011.

In the transaction, qualified institutional buyers purchased $185 million of asset-backed notes secured by automobile receivables purchased by CPS. The sold notes, issued by CPS Auto Receivables Trust 2013-A, consist of five classes. Ratings of the notes were provided by Standard & Poor’s and Moody’s and were based on the structure of the transaction, the historical performance of similar receivables and CPS’s experience as a servicer.

The weighted average efective interest rate on the notes is approximately 1.87 percent.

The 2013-A transaction has initial credit enhancement consisting of a cash deposit equal to 1 percent of the original receivable pool balance. The final enhancement level requires accelerated payment of principal on the notes to reach overcollateralization of 11.50 percent of the thenoutstanding receivable pool balance.

The transaction utilizes a prefunding structure, in which CPS sold approximately $116.3 million of receivables today and plans to sell approximately $68.7 million of additional receivables during April 2013.

NEWS BRIEFS

This further sale is intended to provide CPS with long-term financing for receivables purchased primarily in the month of March.

The transaction was a private offering of securities, not registered under the Securities Act of 1933, or any state securities law.

All of such securities having been sold, this announcement of their sale appears as a matter of record only.

The creditor also renewed its $100 million revolving credit facility with afliates of Goldman, Sachs & Co. and Fortress Investment Group.

Under the amended terms, the facility will revolve during the first two years and will amortize during years three and four.

Loans under the facility will be secured by automobile receivables that CPS now holds or will purchase from dealers.

New Auction Set to Open

DAA Northwest president Bob McConkey announced recently that the auction is expanding into Western Washington and will be opening

DAA Seattle this spring. Leading the DAA team in Seattle will be Dave Walker and Jim Kriens.

Walker will serve as the auction manager, with Kriens overseeing sales.

DAA Seattle will feature weekly wholesale vehicle sales on its 16-acre campus.

CarMax Adds Another Store

CarMax Inc. is adding another store in Georgia.

The used-car superstore chain is currently hiring approximately 45 positions for the company’s new store in Columbus, Ga. The new

13,000-square-foot store is scheduled to open on April 20 at 6463 Veterans Parkway.

This is CarMax’s seventh store in Georgia.

Credit Scorer Updates Model

VantageScore Solutions announced its newly constructed credit scoring model, VantageScore 3.0.

The new model provides up to 25 percent predictive improvement over earlier models and has the ability to formulate a score for 27 - 30 million consumers. The scale used in the new model is 300 - 850.

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Phone: 586-772-5200 or 800-794-0760 Fax: 586-772-9400

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Lynda R. Thomas, Publisher Colleen Fitzgerald, General Manager

Editorial: Ted Craig, Managing Editor Jefrey Bellant, Staf Writer

Contributing Writers:

Emily Caswell, Sheila McGrath, Jenny KIng

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.

Please submit clear, legible copy. Payments from first time advertisers must accompany the insertion order. Distribution is guaranteed by U.S. Postal Carriers. The advertising reservation deadline is 5:00 p.m. Friday, 10 days prior to the issue date. Camera ready ads must be received by noon on Monday prior to the issue date.

Visit Used Car News online at www.usedcarnews.com or scan this QR code with your smartphone to be taken directly to the website.

Muscle Cars Normalize After Boom and Bust

By Jenny King

Bob Lorius headed south the first quarter of 2013 in search of cars for his dealership, Ohio Corvettes and Muscle Cars in North Canton.

Though prices for these high performers, built roughly between the early 1960s to the mid-1970s, took a dive along with the national economy five years ago, Lorius figures for customers they are a better bet than the stock market.

“I buy cars ready to go,” said Lorius. “It’s cheaper to get a car that is finished than to have it done.”

Materials and labor are increasingly expensive, he said.

Over 90 percent of sales at Ohio Corvettes and Muscle Cars are handled online. Lorius said he owns everything he sells; there are no consignments.

Classic Auto Showplace in Troy, Mich., handles only consignments. Over half of the 70 cars at the metro-Detroit facility in March were muscle cars. Spokesman

Dan Sherman said muscle car prices have not moved much in the last few years.

“We get 40 to 50 walkthroughs a day here,” Sherman said.

The still-slow economy in the area has put a damper on things, he said. About 15 percent of sales are to Michigan residents.

Like Ohio Corvettes and Muscle Cars, Classic Auto Showplace does business worldwide.

Up until the 2008 economic collapse, prices for muscle cars were the best they had ever been, according to Keith Koscak, auction manager and car specialist with RM’s Auctions America, Auburn, Ind.

Many thought they were inflated.

“People were not so particular about what they were purchasing,” he said. “They weren’t doing their homework.”

And they were driving prices up on vehicles good and not so good.

Koscak advises retail buyers – and by extension, dealers – to get an accurate his-

tory of a vehicle, check out options, look for vehicles with low production numbers. He suggests muscle car prices now are where they should be.

At the RM Auctions classics sale in early March on Amelia Island, Fla., a welldocumented 1965 Shelby Mustang GT 350, powered by a 306-horsepower 289

KCode V-8 with Holley four-barrel, Borg-Warner four-speed manual and independent front suspension and live rear axle, sold for $242,000.

Another classics sale run by Gooding & Company the same weekend saw a 1973 Pontiac Trans Am 455 sell for $165,000. It was described as “the last great

American muscle car,” one of only 72 four-speed Trans Am SD 455s built in 1973.

Bob Lichty of Classic Motorcars said that values of muscle cars are rebounding after a “sharp drop” a couple of years ago.

“They are going up as we speak,” said the auction owner and classics retailer in Canton, Ohio.

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Panel Predicts Boost in Volumes, Strong New Car Sales

By Jeffrey Bellant

LAS VEGAS Top forecasters in the automotive industry predicted strong volumes on the used side and increased sales for new cars during a panel discussion at the recent Conference of Automotive Remarketing.

René Abdalah, vice president of RVI Group, said he doesn’t see a slowdown in 2013.

“From our point of view, the market is still strong,” he said.

But the “wild cards” will be gas prices and consumer confidence, he added.

Jonathan Banks, of NADA Used Car Guide, said 2013 would see a change on lease consignment.

“The big diference we see is in lease returns,” he said. “We see a 14 percent increase from 2012.”

Banks expects this to provide some much-desired certified preowned units to the wholesale arena.

Others were also optimistic.

“Overall, there’s a lot of excitement in the industry,” said Ricky Beggs, senior vice president and editorial director of Black Book.

One constant refrain from the panel was the expected strength of new-car sales.

Alec Gutierrez, senior market analyst, automotive insights for Kelley

Blue Book, said new-car sales could reach as high as 15.5 million this year, “possibly approaching 16 million in 2014.”

As a result, Gutierrez expects to see some late-model prices soften, such as those of the 2009 through 2011 models.

Beggs said another change would occur in repossession volumes.

“I think that repos will increase slightly this year and more next year,” Beggs said.

Tom Webb, Manheim’s chief economist, agreed that fleet-lease volumes will rise, but disagreed with some panelists on one point.

“I don’t believe it will have (a big) impact on pricing,” Webb said.

Beggs said the volume of cars isn’t the strongest factor in wholesale values.

“New-car prices have a bigger effect than supply,” Beggs said.

Analysts said the good news in this digital age is there is a lot of data available to them. The bad news is the same: there is a lot of data.

“It’s really about how you analyze and interpret that data,” Banks said.

Several panelists had their own unanswered questions that will affect the market in both the shortterm and long-term.

Abdalah questioned how big a factor credit availability would be in

the future.

“We are taking for granted credit availability,” Abdalah said.

Beggs agreed, adding that issues like the length of loan terms and the loan-to-value ratio of deals will play a key role.

Tom Kontos, ADESA’s chief economist, said consignors are identifying opportunities on the sale side in

his market.

“Remarketers are better informed (than they used to be),” Kontos said.

While the general tone of the panel was optimistic, Webb warned this trend of increasing volumes and solid prices are just trends, meaning they, too, will end.

“But it isn’t going to end nicely,” he said.

CONGRATS.

PAGE 8 - FLEET/LEASE FOCUS

RSA Moves More Inventory Online as Acceptance Grows

(Craig

Carrow

is the

vice president of auto solutions for Remarketing Services of America Inc.)

UCN: How many units will you remarket this year?

Car-

row: Between online and traditional wholesale, we’re probably doing 55,000 vehicles this year. It’s definitely going more toward online. More of the of-lease units are being sold of dealers’ lots and we’re seeing a pretty dramatic increase month after month.

UCN: Who are your biggest clients these days?

Carrow: We’re expecting a big jump in of-lease vehi-

cles in the fourth quarter. We handle the portfolio for U.S. Bank and we work with GM Financial.

We’re releasing a grounding tool. So now dealers can ground the car online and turn around and get price information to purchase the car online. If they don’t want it, it goes out to other GM dealers online and then into the physical auction.

UCN: What is driving the move to online?

Carrow: The technology is easier. And more and more companies are doing this now. It helps that a lot more of the business is going through captives, either the captive doing the leasing itself or working with a bank. When there were a lot of bank returns, they didn’t have the dealer population. The dealers have been asking for this. It’s a lot easier for them to go online.

UCN: Are more banks getting into leasing?

Carrow: There are a couple clients looking into it. Our origination system is getting a lot of looks. But they’re almost working in conjunction with the captives. They have partnerships. Santander is an example with its Chrysler program.

It’s not what it was. There are still some banks that are playing around with it a little bit, but they’re being very conservative with what they’re doing. But when the captives are subventing leases, it makes it tough to compete in that market. It’s focused more on niche automobiles.

UCN: What trends are you seeing?

Carrow: The biggest trend that we’re seeing is 24-month leasing has become very popular. It used to be 36-year-month leases were the majority.

We’re starting to see more cars as a percentage come back to auction. There are

some fantastic lease deals out there right now.

The payments three years ago were higher than they are today.

So more people are turning in their leases and dealers are sending more to auction, as a result.

UCN: How much of total sales do you think leasing can make up?

Carrow: Around 30 percent is tops. Leasing is still not for everybody. But we’ll stay in the high 20s for the rest of the year.

UCN: Where are you seeing growth?

Carrow: People today are more open to outsourcing. Everybody is under budget pressure. Our full-servicing program is taking of like crazy. We’re expecting that to grow almost 70 percent this year.

Everybody has done pretty well in the auto business the past few years, so we’re seeing more companies come into the business. We know there are even more companies interested, but they can’t get the funding.

Fiserv Names Top Auction

Fiserv Inc. named Indiana Auto Auction, based in Fort Wayne, Ind., as its top performing auction of 2012. Indiana Auto Auction finished in second place last year –its first year of eligibility in the annual auction rankings from Fiserv.

Fiserv began ranking auto auctions in 2001 as a way

to aid lenders seeking the greatest potential return on their outsourcing investment. Fiserv scores auctions in order to identify qualified partners. Rankings are tabulated to reflect overall customer service, operational efciencies, sale preparation and marketing with the main emphasis on retention.

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CFPB Warns Auto Creditors

The Consumer Financial Protection Bureau released a bulletin explaining that certain lenders who ofer auto loans through dealerships are responsible for unlawful, discriminatory pricing.

The CFPB argues that lender policies that provide dealers with this type of discretion increase the risk of pricing disparities among consumers based on race, national origin, and potentially other prohibited bases.

nothing really surprising here,” Hudson said. “The Bureau’s agenda, in my opinion, is to prohibit dealer participation without issuing an outright ban.”

The CFPB recommends that indirect auto lenders within its jurisdiction take steps to ensure that they are operating in compliance with fair lending laws as applied to dealer markup and compensation policies.

AND A WHOLE LOT MORE!

Research indicates that markup practices may lead to African Americans and Hispanics being charged higher markups than other, similarly situated, white consumers, the Bureau claims.

The National Automobile Dealers Association and the National Minority Automobile Dealers Association issue a joint statement in response to the CFPB action.

“The guidance issued by the CFPB attempts to force auto finance sources into changing the way they compensate dealers without any indication that the Bureau has examined the efect this change could have on the cost of credit for consumer,” the groups said.

Attorney Tom Hudson said the move was expected.

“The Bureau has been signaling this approach for weeks, so there’s

Hudson said the guidance forces finance companies to choose between paying dealers a flat fee for each contract or retaining a dealer participation model that will involve actively policing dealer pricing to attempt to avoid prohibited discrimination.

The NADA and NMADA statement questions the CFPB’s evidence of a problem, calling its method for identifying the issue as an “opaque process.”.

“Without such basic information as how the CFPB is identifying different groups of consumers, how it is controlling for factors that can affect finance rates but are unrelated to the consumer’s background, and what constitutes a finding of disparate impact, one can have little confidence that the CFPB is conducting its analysis in a statistically-reliable manner,” the groups stated.

Remarketers

– Continued from 1

As a result, the auctions still struggle with issues like arbitration and condition reports.

Paul Lips, president of the National Auto Auction Association, said providing accurate condition reports remains critical to the auction’s relationship with its customers, along with promoting post-sale inspections and following up with online buyers.

Lips said with so many customers online, it puts pressure on the auction to service those customers when they call on sale day or need information on something like arbitration.

Moorby said the nature of the auction business is changing radically.

“I don’t think people are going to rely on us to create that sense of enjoyment and sale-day sentiment,” he said.

Moorby said the industry has to embrace technology to grow.

“This may be a touchy thing to say,” Moorby said, “But the way I see our association (NAAA) is that it’s inward-looking, almost to a point of having its head in the sand.”

Turner said online sales rely heavily on condition reports and seller’s disclosures.

So unless he has faith in and experience with the seller, online purchases and arbitration remain

complicated processes, he said.

In response, Stephanie Gingras, general manager, Dealers Auto Auction of the Southwest, said it’s up to auctions to “uncomplicate the process.”

Turner said one trend he’s noticed over the past few years is the steady increase of buy fees at auction.

“One factor in that is it’s been a seller’s market,” Turner said. “We sell at auction, too. But while I see our sale price remaining relatively flat, our buy fees keep creeping up.

“Right now, I don’t like it, but I have no choice.”

Silverstein said the trend of higher and higher fees is a problem.

“As it gets so expensive, (someone) may start to say, ‘that’s a lot of money. Is there a more efcient way to get that to a dealer?’” Silverstein said.

In fact, Turner said these factors have an efect in the instructions he gives to buyers that go to auction for J.D. Byrider. Turner will use several sources to determine the value of a car he sends a buyer to acquire, but there’s another part to the equation.

“Our first question anymore is, ‘where are you buying that?’” Turner said. “If it’s from an auction, we back the (bid) of that vehicle down $200 or $300, depending on what the fees are.”

1.

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FTC Updates Online Ad Rules

The Federal Trade Commission released new guidance for mobile and other online advertisers that explains how to make disclosures clear and conspicuous to avoid deception.

Updating guidance known as Dot Com Disclosures, which was released in 2000, the new FTC staf guidance, “Dot Com Disclosures: How to Make Efective Disclosures in Digital Advertising,” takes into account the expanding use of smartphones with small screens and the rise of social media marketing. It also contains mock ads that illustrate the updated principles.

Like the original, the updated guidance emphasizes that consumer protection laws apply equally to marketers across all mediums, whether delivered on a desktop computer, a mobile device, or more traditional media such as television, radio, or print.

If a disclosure is needed to prevent an online ad claim from being deceptive or unfair, it must be clear and conspicuous. Under the new guidance, this means advertisers should ensure that the disclosure is clear and conspicuous on all devices and platforms that consumers may use to view the ad. The new guidance also explains that if an advertisement without a disclosure

would be deceptive or unfair, or would otherwise violate a commission rule, and the disclosure cannot be made clearly and conspicuously on a device or platform, then that device or platform should not be used.

The 2000 guidance stated that to help ensure clear and conspicuous disclosures, advertisers should consider the disclosure’s placement and proximity to the relevant ad claim, its prominence, whether audio disclosures are loud enough to be heard, and whether visual disclosures appear for long enough to be noticed.

Although the 2000 guidelines defined proximity as “near, and when possible, on the same screen,” and stated that advertisers should “draw attention to” disclosures, the new guidance says disclosures should be “as close as possible” to the relevant claim.

Like the original guidance, the updated Dot Com Disclosures calls on advertisers to avoid using hyperlinks for disclosures that involve product cost or certain health and safety issues. The new guidelines also call for labeling hyperlinks as specifically as possible, and they caution advertisers to consider how their hyperlinks will function on various programs and devices.

Auto Auction of New England aane.com

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Flint AA flintaa.com

Indiana AA indianaautoauction.net

KCI Kansas City kciaa.com

Mid-State AA msaanym.com

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Honda Recalls Acuras, Pilots

Honda is recalling 76,253 model year 2004-2008 Acura TSX vehicles originally sold in, or currently registered in, Connecticut, Delaware, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, Wisconsin and the District of Columbia. In states that use corrosive materials for de-icing, driver’s footwear

may bring in materials that saturate the vehicle’s carpeting, which is in contact with the vehicle’s engine Electronic Control Unit. As a result, the ECU case may experience rust or corrosion. This damage may potentially cause the engine to stall. A vehicle stall increases the risk of a crash.

Honda will notify owners and Acura dealers will inspect the vehicle and replace any damaged ECU, free of charge. All vehicles will have Continued on next page

Honda Recalls

– Continued from prior page a waterproof cover installed onto the ECU.

Honda’s recall campaign number is S86.

Honda is recalling 183.756 model year 2005 Pilot vehicles manufactured July 29, 2004, through August 29, 2005; model year 2005-2006 Acura MDX vehicles manufactured September 16, 2004, through September 22, 2005; and model year 2005 Acura RL vehicles manufactured March 1, 2004, through June 29, 2005.

An electrical capacitor may have been damaged during the manufacturing of the Vehicle Stability Assist (VSA) control module causing intermittent, automatic, minor brake application. However, if the driver applies the brakes while the VSA is malfunctioning, the vehicle may come to an abrupt stop. Additionally, due to a loose ground connection, certain model year 2005 Pilots have a VSA system that may apply partial brake force, without the illumination of the brake lights, whether or not the driver is using the brakes.

Sudden inadvertent braking, especially without illumination of the brake lights, may increase the risk of a vehicle crash.

Owners will be notified and instructed to take their vehicles to a

dealer of their respective brand.

The dealer will install a partial wiring harness containing a capacitor for the VSA modulator. The affected model year 2005 Pilots will have their ground connection tightened.

Honda’s recall campaign numbers are S87, S88, and S89.

In related news, NHTSA announced that Southern Honda Powersports in Chattanooga, Tenn., has agreed to pay $125,000 in response to the agency’s assertion that the dealership allowed the sale of unrepaired, recalled vehicles.

Under federal law, vehicle dealers have a legal obligation not to sell a new vehicle they know to be recalled until the defect or noncompliance has been remedied.

Any dealerships that receive notice of the recall from the manufacturer and sell recalled vehicles without first making the required repair are subject to civil penalties. The agency’s investigation in 2012 led NHTSA to believe that Southern Honda Powersports had violated federal law by failing to inspect or repair 329 motorcycles prior to their sale and delivery between 2007 and 2012.

The fines received from the dealership will be paid into the general fund of the U.S. Treasury.

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Industry Honors Pioneers

“We

LAS VEGAS – Industry veterans

Henry Stanley, Bob Graham and Brad Myers were recognized with top honors during the recent Conference of Automotive Remarketing.

Stanley, owner of Carolina Auto Auction in Williamston, S.C., won

the 2013 Remarketer of the Year award, and Graham, ARI’s vice president of vehicle remarketing, won the 2013 Consignor of the Year during the recent Conference of Automotive Remarketing. Brad Myers, vehicle remarketing manager for Capital One Auto Finance, received the National Auto

Honors

– Continued from prior page

Auction Association’s Warren Young Fellowship award.

The NAAA partners with the Conference of Automotive Remarketing for the event.

Stanley is president and owner of Carolina Auto Auction in Williamston, S.C., and owner of Indiana Auto Auction in Fort Wayne.

Stanley started in the auction industry in 1960 as a ringman, before becoming an auctioneer for Capitol Auto Auction in Columbus Ohio.

He purchased the auction in 1969, renaming it Ohio Auto Auction.

He later sold the auction and briefly retired. The auction today is Manheim Ohio.

But in 1990, he and his wife, Patty, purchased Carolina Auto Auction and later bought Indiana Auto Auction.

“I’m so honored,” said Stanley, as he accepted the award. “As I look among the great remarketers in this (industry), I would never think that I could win this award. I thank you very much.”

Stanley thanked his wife and his staf at both of the auctions.

ARI’s Graham started with the company in 1973.

He has worked in new vehicle purchasing and also served as director of ARI’s maintenance department while rising through the ranks.

He has been credited with ARI’s innovation and involvement on the Internet.

Graham, a former IARA president who now serves as chairman of the board, was grateful for the award.

“When you get in this position, you have to thank all the people that you’ve worked with, who gave you the opportunity to be out (here) working in the great remarketing industry,” he said.

He specifically thanked Jennifer Schade, ARI’s vehicle remarketing manager, for her support as well as others in the industry.

NAAA President Paul Lips presented the 65th Warren Young Fellowship award to Myers.

Lips said during Myers’ time with Capital One, he has managed the group’s vehicle remarketing program through “expansive growth,” utilizing 44 auction locations across the nation, while developing and implementing a vehicle inspection program for the company.

Myers also serves on client advisory boards for Manheim and ADESA.

Since 2004, the Warren Young Sr. Scholastic Foundation has helped 120 students with college scholarships, while raising $1.25 million and awarding $40,000 annually in scholarships, Lips said.

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PEOPLE IN THE NEWS

Black Book Promotes Beggs Wholesale value guide Black Book recently announced that Ricky Beggs has been promoted to the position of senior vice president, editorial director.

Beggs will continue to oversee all of Black Book’s vehicle valuation data and media contacts.

“In addition to his full time duties of ensuring that our numbers remain the most accurate in the industry, Ricky’s responsibilities over the last several years have increasingly evolved to include frequent speaking engagements and press events,” said Black Book president Tom Cross

“This much-deserved appointment is a direct reflection of his tireless eforts on our behalf and the critical role both he and his team play within our organization.”

Beggs said, “As I look back over my career, starting as an editorial assistant, moving up through editing both cars and trucks, and eventually being named managing editor, I can hardly believe how much we have grown as a company during that time.”

Law Firm Adds Partner Hudson Cook LLP, a nationwide provider of legal compliance services for the financial services industry, recently announced the addition of Eric L. Johnson as a partner establishing the firm’s Oklahoma City office.

Johnson will focus his practice on federal and state consumer financial services laws and automotive finance.

Before joining Hudson Cook, Johnson was a shareholder and director with the law firm of Phillips Murrah P.C. and served as a member of the firm’s commercial and consumer financial services practice groups.

He also serves as an adjunct professor at Oklahoma City University School of Law, and serves as chairman of the National Automotive Finance Association’s legal committee.

Johnson earned his law degree at Oklahoma City University School of Law and attended Oklahoma State University where he earned a B.S. in accounting.

RETAIL MARKETS

OREGON

Eric Freeman, president, Freeman Motor Co., Portland, Ore.:

“We’ve been in business 23 years.

“We have one indoor store and we have a service facility down the street.

“At our sales facility, we carry about 100 cars indoors. We service about 200 cars a month at our service facility.

“Our store is 25,000 square feet.

“We are a retail European car dealership. So we carry Land Rover, Mercedes, BMW, Audi and Range Rover – brands like that.

“Our average retail price is $23,000.

“Right now, our average sales are 92 units a month. It’s similar to this time last year. The beginning of the year is always a good time for us.

“(For inventory) we buy cars all over the West Coast. We probably buy 60 percent of our cars from Manheim auctions and ADESA auctions. About 10 percent of our cars are consigned. The other 20 percent are trade-

ins and straight buy-outs from a consumer.

“Our average model year is 2008. Average mileage would be in the 50,000-mile area, overall.

“(Supply) does have an effect on getting our inventory. If you’re someone who is paying $20,000, $30,000 or $40,000, you want to start out with a lower-mileage car.

“We carry 60 percent cars and 40 percent sport utility vehicles.

“On the service side, we really look like a new-car store. We have eight lifts.

“Over the last few years, we began to develop our service business. The reason is, over the last four or five years, our front-end gross has dropped. Our service business has been a great source for us to begin to make up for some of that front-end loss.

“We spend a lot on reconditioning. One reason is we sell a (more expensive) car. Our cars are inspected when we buy them. Then after we ship them in, they are re-inspected. Then any needed repairs are done.

Next they go into detail and, finally, to the sales floor.

“Our recon is about $860 per vehicle.

“For marketing and advertising we use a little bit of print, simply because we like to use a whole spectrum (of advertising). We also use AutoTrader and Cars. com. We have our own website.

“One recent vehicle we sold was a 2009 Maserati Quattroporte, with 11,000 miles on it. We sold that car for $59,900.”

VIRGINIA

Jim Millner, owner, Millner Motors, Charlottesville, Va.:

“I’ve been in business for seven years. I have one location.

“We keep, on average, about 60 units on our lot.

“We get our vehicles primarily from local auctions, Manheim auctions in Harrisonburg and Fredericksburg. Two or three years back, I would have been able to get a lot of inventory from new-car dealers. But they’re keeping a lot of that inventory now.

“Last year, I think we sold an average of 37 per month. We’re doing well this year. We sold 47 in February and we’re on track (at press time) to do in the 40s for March.

“We do a little bit of everything (outside of buy-here, pay-here).

“We have financing programs for subprime, for middle-of-the-road and for prime customers.

“Percentage-wise, we’ve been selling 1/3 cars, 1/3 SUVs and 1/3 trucks. But the trucks have been harder to find.

“The average mileage is probably in the low 100,000s – 100,000 to 105,000.

“The average model year is around 2005, 2006.

“I don’t have a service shop. I used to have one, but I decided to devote more time to (sales).

“We’ve got a couple of good local shops that do our state/local inspections and our mechanical (work). Then we have guys in-house who do the cleanup and detailing.

“I would say recon costs are about $500 to $600 per

Compiled by Jeffrey Bellant

vehicle. That’s gone up a bit. People trade in cars for a reason. It’s usually because they need something (fixed).

“But we send them through the shops and if there’s anything that needs to be fixed, we do it.

“The majority of our advertising is through our local newspaper. They have weekly editions of the newspaper that go to outlying counties. We use that on a consistent basis. The key to our newspaper advertising is consistency.

“We do a little bit of radio to our core demographics. I also consistently do cable TV. It’s good bang for the buck. And you can target specific cable channels to your demographics.

“Our average retail price is $12,291. That’s up from last year.

“We recently sold an 2004 Acura MDX. It had 162,000 miles.

“We sold that for $8,995. It was a trade-in. but it was kept in great shape. It was clean. It had good tires, good leather (interior) and the right equipment.”

WHOLESALE MARKETS

KANSAS

Brook Phillips, vice president, Mid-America Auto Auction, Wichita, Kan.:

“We’ve owned the auction since 1982.

“We have five lanes. We’re running four to five lanes.

“Volumes are down, but percentages are up. We’re running about 450 units per sale. The last six weeks our percentages were about 70-plus.

“We’re a 90-percent (dealer) consignment auction. About 70 percent come from new-car-store trades. From what I’m hearing, new-car dealers are selling new-to- used vehicles at a two-to-one (ratio).

“Also, as the tax money was coming in, a lot of the new-car stores were keeping the cheaper stuf that they’d normally wholesale.

“On average, we’re drawing 300 to 350 bidders in the lanes. But that’s always been consistent.

“We’re drawing those dealers from Kansas and the surrounding states: Oklahoma, Missouri, Ne-

braska, Colorado and some from Texas.

“The dealers’ moods have been pretty good. In this region, we don’t have the big swings in the economy, like with the housing boom. But we also didn’t have the big housing bust either. Aircraft is the big industry here and it’s been pretty good.

“Our repossessions are probably actually down as a result.

“Most of our non-dealer consignment is made up of repossessions. We also have fleet–lease, but that’s made up of rental units. Most of that is damaged stuf from the rental companies. But that sells at a 90 percent rate.

“Overall, the first three months this year have been as good as I’ve seen in the past five years.

“The average price coming over the block hasn’t changed much over 10 years. Believe it or not, we’re right in that $4,500 to $5,000 range. That’s the easiest car to sell. That’s what everybody wants.

“(In terms of what’s hot),

it really has more to do with the price range than the type of vehicle.

“I’m selling imports and I’m selling domestics. Anything in that $5,000-to$8,000 range is really hot.

Because we’re going into spring, minivans have really started to pick up.

“In terms of mileage, everything’s pretty consistent up to 140,000 miles. Anything more than 140,000 is getting pretty tough to sell.

“I made a joke with someone from one of my newcar stores recently. I said, ‘You know, 150,000 miles is the new 100,000 miles.”

TEXAS

Lori Pidgeon, general manager, EPI Auto Auction, El Paso, Texas:

“We’ve been in business two years.

“We have four lanes. We run three lanes during our weekly sales and we run four lanes once a month for promotional sales.

“Lately, sales percentages have been really high, like a lot of auctions. Sales percentages have been run-

ning in the high 60s.

Compiled by Jeffrey Bellant

“But there never seems to be a lot of volume this time of the year. I know auctions are showing a decline in that.

“Our volume is still up about 25 percent compared to this time last year.

“We’re drawing about 175 dealers in the lanes.

“The majority of dealers are coming from Texas, Phoenix and New Mexico.

“We also draw dealers from Mexico – from the Chihuahua and Juarez areas. We are a border town.

“The mood of dealers is good. There doesn’t seem to be any kind of recession here like there was in the northwest where I came from. I spent 21 years in Portland and then I was two years in Spokane. I joined the Bob McConkey group and (came down here).

“We do have a large dealer consignment, but we also have government sales for the GSA, VSE and GTB.

“The VSE handles seized vehicles and the GTB (handles customs, border and forestry vehicles).

“The volumes run close

to 225 a month from those entities.

“On an average sale, dealer consignment makes up about 70 percent of my volume.

“Fleet-lease is probably 25 percent of a sale, on weeks we’re not selling the (government vehicles).

“For the GTB units, we’ll have a little bit of everything. It’s a good mix.

“Right now, repossessions are a little lighter. Title companies are really big here.

“We run an in-op sale every other week.

“We’re running about 30 units. That’s probably about a 50 percent sale.

“We have everything posted on Auction Pipeline and we do the Wi-Fi pictures on absolutely everything.

“Our average price in the lanes is about $7,000, but some of the big equipment stuf adds to that.

“I’m feeling positive about 2013, but I think 2014 is going to be the big (increase) in lease returns.

“But it’s looking good to us.”

Compiled By Jeffrey Bellant

Big Sale Offers Cars, Cash

Charleston Auto Auction’s two-day anniversary event in March culminated in its largest sale ever.

On March 14th Charleston Auto Auction hosted a “Lender/Vendor Event”. It featured live music, catered food plus numerous companies ofering services to benefit Charleston Auto Auction dealers.

The following day, the auction hosted its 12th anniversary sale, which featured more than 1,500 vehicles, 800 dealers and $50,000 in cash giveaways. A record set for dealer attendance and a record was set for online attendance with 180-plus dealers signing on for the simulcast sale.

There were over 500 franchise dealer trades from more than 35 new car stores and institutional accounts ran more than 400 units.

Independent dealers and wholesalers consigned more than 600 vehicles.

Twenty-one dealers were awarded a total of $50,000 in total prizes.

“What a great sale,” said Laura Taylor, general manager. “We sold a record number of vehicles (1,002) and we had our best turnout ever.”

Hyundai Names Top Auction

Hyundai Motor America has named Manheim Pennsylvania as its 2012 Auction of the Year.

The annual Hyundai Auction of the Year award is presented to the best performing auction in terms of sales, customer service, efciency, quality and overall performance. This is the third time Manheim Pennsylvania, a Hyundai partner for more than 10 years, has won Auction of the Year.

“We appreciate our partnership with Manheim Pennsylvania and its outstanding management team,” said Gary Knapp, senior group manager, fleet and remarketing, Hyundai Motor America. “They continue to put forth great efort while making sure

our dealers always feel welcome.”

Tim Van Dam, auction vice president and general manager, returned the compliment.

“We value our close working partnership with Hyundai and are honored to be recognized with this award. We look forward to continuing to build upon this success.”

Disconnected Jottings From Tony Moorby...

Winter’s been hanging on as long as tax season this year. The clocks went forward a couple of weeks ago and dafodils haven’t even been in full bloom yet. Let’s hope that the green that unfolds here soon is retail dol-

lar bills as well as the vernal show that everyone looks forward to after a winter of discontent. It seems like the economy is as fragile as the weather – a late frost will kill of any new blooms.

After our spring conference in Las Vegas, the remarketing business seems to be fairly resilient. The wholesale auction business doesn’t enjoy the peaks of retail activity, but then it doesn’t sufer the troughs quite so badly either. The activity curves are much softer and tend to have a twomonth or so lag. As the lag is

behind what already happened at retail, then it’s predictable to a great extent.

The auction industry handled some 14.6 million vehicles last year and is headed for an even better 2013, according to Frank Hackett, the

than 400 auctions and related businesses are masterful, indeed. There is still an enormous willingness to invest in its own future – growing and changing in a chameleon-like way to blend in with the surrounding requirements of its customers. It may not look too dynamic on any single day, but it acts with greasedwheel efciency in balancing markets and demands and therefore prices.

protected by the franchise system – to wholesale transactions. It’s already happening, to some extent; people get into part of the business and realize that they can grow by attaching new capabilities that exist elsewhere and “Voila!” they can do something for a fraction of what it has historically cost.

keen sense of urgency to not only push for changes, but to push for the pace of change.

Light brown color

Lotus convertible

Picks

New _____, latest cars on the lot

Compact Dodge from the 70s

National Auto Auction Association’s CEO, following the annual survey of its membership. The members were also responsible for about $1.1 billion in payroll last year and over $4 million handed over to various charities.

You can read this news in other parts of this august publication, but I thought it worth pinpointing some of the highlights. Typically, the wholesale auction business goes about things in a fairly quiet and organized manner.

The vehicle redistribution capabilities achieved by less

By Miles Mellor

As new technologies grow within the industry, then perhaps some of the new talent will think laterally enough to develop stuf that applies to other markets too. I distinctly remember back in the mid-‘90s that our VP of strategic planning looked at our new Internet sales platforms and said, “We could sell anything from here to anywhere in the world…” That was before eBay or Amazon.

Ironically, that same premise could spell a whole new future for any distribution business, including ours – outsiders looking in and licking their lips at hitherto unseen opportunity. That means all the way from retail car sales – at least used ones, new cars being somewhat

The real judgment is, which to put together to gain the biggest share of market the quickest. Success goes to the fleet here – pun not intended.

Competition in the auction business is heating up to supply the independent operators with some new, mobile applications that work equally well for the customer and the supplier.

If anyone who attended the above-mentioned conference didn’t come away with a sense of foreboding, then they missed about 80 percent of the important meetings, seminars and panel discussions. I, for one, came away with a

In the past, our industry has tended to shun newcomers; the original name of the National Auto Auction Association was the National Auction Protection Association. Back in the ‘50s it was to protect the business from the government and other outsiders who might spoil the efciencies that the auctions achieved. That mentality still prevails to some extent, and it stunts our growth – a submarine needs sonar to ‘see’ where it’s going and a periscope is quite handy, too. We need to have an open mind and ears as big as an elephant’s to listen to the demands from not only today’s customers, but their successors too.

If the market warms in the spring, we need to have our frozen fingers open to take advantage of the rise in expenditures as well as the temperatures.

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