Used-vehicle wholesale prices were down slightly in May.
Prices on a mix-, mileage-, and seasonally adjusted basis slipped 0.1 percent in May.
This brought the Manheim Used Vehicle Value Index to a level of 119.1, which was 4.8 percent lower than a year ago.
Auto Leasing Rebounds To Seven-Year High
Experian Automotive reports that new vehicle leasing rose by 12.5 percent in the first quarter to achieve the highest level since it began tracking the data in 2006.
According to Experian, leasing accounted for 27.5 percent of all new vehicles financed.
More Vehicles Start Heading to Auction
Recent monthly figures from the National Auto Auction Association show significantly more vehicle consignment at member auctions.
The February through April period saw consignment up over 3 percent from 2012.
Career Dealer Ready to Lead NIADA
(Keith Hagler is the incoming president of the National Independent Automobile Dealers Association. He owns Taylor Auto Credit, a buy-here, pay-here dealership based in Taylor. He has been married to Marcia for 21 years and has two daughters, Cameron, 15, and Avery, 12.
USED CAR NEWS: Tell our readers about your background and how you got into the car business.
Hagler: I’m a first-generation car dealer. My dad was in construction and my mom worked as an administrative assistant at a big company.
But I saw many people that I couldn’t get (financed) and I knew another friend who was in buy-here, pay-here
Continued on page 8
I really got my start right out of college. I attended University of Mary HardinBaylor (founded in 1845, the oldest continuously operating college in the state). It used to be an all-woman’s college. Several members of my family graduated from there. My degree was in business administration in about 1981. After graduation, I went to work for a friend of mine who owned a newcar dealership. He put me in F&I.
Finance Association President Plans Outreach
The National Automotive Finance Association recently elected a dealer as its president who has plans to reach out more to his fellow auto retailers.
Steve Hall, CEO of Dallas-based Driversselect, became president during the group’s recent conference. This is Hall’s second stint leading the association.
Hall said it is crucial for finance companies to work with dealers and other industry stakeholders to improve the image of subprime auto credit.
The association spends a lot of time responding to challenges, such as the Consumer Finance Protection Bureau, Hall said. But it needs to get ahead of the issues.
Hall said the public today views all subprime lending as predatory, making money by trapping consumers in contracts they can never pay.
The truth is the opposite, Hall said.
He wants the best interest of the consumer to become the industry’s ultimate goal.
The NAF Association attempted in the past to bring more dealers into its ranks, with little success. In fact, Hall is one of the few dealers involved with the group these days.
This time the strategy involves reaching out to dealer groups at both the national and state levels to develop relationships.
Photo by Andy Sharp
LONE STAR: Dealer Keith Hagler reflects on his career while looking over one of his stores in Taylor, Texas. Hagler will become president of the National Independent Automobile Dealers Association during the group’s convention this month.
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CFPB Raises Concerns About Credit Discrimination
By Ted Craig
The Consumer Finance Protection Bureau has nothing against discretionary pricing. But the agency is very concerned about discriminatory pricing.
This is the message Richard Hacket, the CFPB’s assistant director, delivered at the recent National Automotive Finance Association conference.
Finance companies set a buy rate based on credit risk and collateral.
However, dealers can mark up that at their discretion and are paid the diference by the creditors.
Jean Noonan, an attorney with law firm Hudson Cook, said finance companies usually don’t know the reason for the mark-up.
The CFPB claims that in some cases, consumers with similar profiles pay diferent rates based on factors such as race and gender.
Since auto creditors can’t collect consumer data on race, gender and other related information, they must use proxies to deter-
mine patterns of discrimination.
These proxies use available data, such as ZIP codes and surnames, in an attempt to analyze the data.
The CFPB is using the same proxies in its investigation of the topic.
“We didn’t make this stuf up,” Hackett said. “The industry has been using this for a long time.”
That’s a practice creditors may want to rethink, Noonan said.
The proxies come with known error rates. It may prove a better practice to actually collect the relevant data, just like mortgage lenders.
At this time, however, finance companies are barred by federal law from requesting that information on applications.
Finance companies face a choice regardless of how they analyze the data.
That choice is either continuing with today’s practices with increased monitoring or changing the way dealers are compensated.
Hackett said the CFPB
expects to make no recommendation on this matter.
“We try not to be in the business of picking a winner,” he said.
Noonan said many of her clients prefer to change dealer compensation away from a discretionary markup to a flat fee with a volume bonus.
“But no one wants to be
the first finance company to get rid of the discretionary mark-up because of the concern of losing volume,” she said.
The industry as a whole moving toward a flat fee model would constitute collusion, Noonan said. That is illegal.
Those who opt for a continuation of mark-up will need to monitor all their dealers, from the ones sending in six contracts a month to the largest chains.
The monitoring itself proves daunting in scope and continues to carry risk, Noonan said.
She said clear government action, however, can drive them in that direction without the legal concerns.
Photo by Ted Craig
TALKING IT OUT : Consumer Finance Protection Bureau assistant director Richard Hackett, left, answers questions posed by attorney Tom Hudson during the recent National Automotive Finance Association conference.
NEWS BRIEFS
Firm Brands Segments
Primeritus Financial Services announced the rebranding of several of their business service segments.
Primeritus Recovery is the trade name assigned to front-end repossession placements. Servicing auto finance clients via a network of repossession firms and agents across the country, Primeritus is able to centralize, standardize and better manage the repossession process for its clients. Primeritus SkipMasters is the skip-tracing arm of the company.
Primeritus Remarketing has recently replaced the Remarketing Solutions name in the auction channels as the firm remarkets vehicles online and in auction lanes across the country.
Sandy Dampens Copart’s Income
Copart Inc. reported financial results for the quarter ended April 30.
For the three months, revenue, operating income and net income were $277.6 million, $82.8 million and $53.2 million, respectively. These represent an increase in revenue of $33.5 million; and decreases in operating income of $5.1 million; and in net income of $2.2 million, respectively, from the same quarter last year.
The operating results for the quarter were adversely afected by abnormal costs incurred as a result
of hurricane Sandy. These costs include the additional towing, payroll, equipment, travel, housing and facilities expenses directly related to the operating conditions created by Hurricane Sandy.
Also included are costs associated with Copart’s international expansion and the incremental towing and processing costs tied to the 21 percent year-over-year growth in inventory.
CPO Sales Surge to Near Record
Certified pre-owned sales reached their second highest level ever in May.
Dealers sold 187,044 certified units last month, up 19.2 percent from May 2012 and up 6.1 percent from April, according to AutoData Corp.
There were 26 selling days in May compared to 26 in May 2012 and 25 in April.
Year-to-date CPO sales were 861,138, up 14.1 percent from a year ago.
Ford, Kia, Mini and Subaru achieved new all-time highs.
America’s Car-Mart Moves Metal
America’s Car-Mart Inc. reported net income of $8.8 million on revenues of $126 million in its quarter ended April 30.
Revenue increased from $113 million for the prior year quarter with a same store revenue increase of 5.3 percent.
Retail unit sales increased to 10,767 from 9,789 for the prior year quarter. Productivity increased to 29.4 retail units sold per store per month from 28.9 for prior year quarter.
Average retail sales price increased to $9,963 from the prior year quarter and $166 from the quarter ended Jan. 31.
Net charge-ofs as a percent of average finance receivables were 7.1 percent, flat with the prior year quarter.
Provision for credit losses rose to 22.6 percent of sales vs. 19.1 percent for prior year quarter (20.6 percent for prior year quarter excluding the efect of the reduction to the allowance for credit losses).
Selling, general and administrative expenses were at 16.9 percent of sales vs. 17.1 percent for prior year quarter.
The Bentonville, Ark.-based chain of buy-here, pay-here stores now has an active accounts base of almost 58,000.
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by Myles Mellor
Edmunds.com Price Program Empowers Buyers
By Ed Fitzgerald
Seth Berkowitz, president and CEO of Edmunds.
com, said a recent study by his company unveiled a seemingly simple fact: Car buyers’ top priority when shopping online is to find the actual price of the car they want to buy.
“One out of two people –54 percent – are mystified that they can’t get an instant, actual, locked down price for a car,” Berkowitz said.
Speaking in Detroit last week before the Automotive Press Association, Berkowitz said his company’s new Price Promise program can give shoppers the information they want.
Berkowitz said that Edmunds.com gets 18 million visitors a month.
Roughly 700 dealers have signed up for Price Promise.
Berkowitz said the study also showed that next to the price of a car, the second most important thing to the buyer was learning the actual condition of a used car.
Berkowitz said he is trying to roll out Price Promise to include used car dealers but it is too early for him to comment on those eforts.
To use Price Promise, dealers pay a subscription fee. Customers get the service for free just by providing some personal information.
Berkowitz said his company first tested Price Promise with a dealer in Milwaukie, Ore., near Portland. Michael Bailey, the dealership owner, said that since signing up for Price Promise he has received “10 times the number of inventory prospects and closed them twice as often as other prospects.”
Berkowitz admitted that Edmunds first tried just listing the prices of a dealer’s inventory.
He said he unfortunately found that the rate of people using that information and then buying the car was lower than people who bought cars without learning the price beforehand.
General Manager John Puhl, ext.230 Offce Manager Kathy Cramer, ext.226
Sale Day Information: Every Thursday at 4:30pm. 500+ weekly consignments in 4 lanes. Specializing in new car dealer trades. Restaurant and transportation lot.
“I probably shouldn’t admit that to a roomful of journalists,” he said.
That’s when Edmunds decided to list the MSRP of the car with a slash through it, then tell the prospective buyers that if they ofered some personal information they could learn the actual price of the car.
That’s when sales began to dramatically increase, Berkowitz said.
Edmunds is not trying to displace dealers, Berkowitz said.
“Edmunds is delivering the promise, but we don’t set the pricing,” he said.
He acknowledged that it’s possible that a dealer still has some wriggle room.
He said a dealer could simply state that it will beat any competitor’s deal on a certain model of car.
“There is nothing stopping a dealer from undercutting his compatriot. It’s an open market,” Berkowitz said.
“It has to be a dealer willing to be transparent. We don’t think (Price Promise) is for every dealer.”
Berkowitz admitted that customers who love the idea of negotiating a price will be allowed to do so.
General Manager Joe Killory, ext.112 Offce Manager Tara Napier, ext.135 SmartAuction Ed Murphy, ext.113
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still some give and take in the negotiation and then with a trade-in it can go in any direction,” Berkowitz said.
General Manager Richard Galway Offce Manager Dawn Hensley
Sale Day Information:
Every Wednesday at 5pm. 500+ weekly consignments specializing in new car dealer trades.
Photo by Ed Fitzgerald
THE PRICE IS RIGHT: Edmunds.com CEO Seth Berkowitz explains the firm’s new Price Promise program to reporters in Detroit. Berkowitz said the program, which provides consumers with pricing information, “isn’t for every dealer.”
Chrysler Resists SUV Recall
DETROIT (AP) _ A defiant Chrysler is refusing a government request to recall about 2.7 million SUVs to fix fuel tanks that could leak and cause fires in rear-end collisions.
Chrysler said June 4 that the National Highway Trafc Safety Administration has asked in a letter that the company recall Jeep Grand Cherokees from 1993 through 2004 and Jeep Libertys from 2002 through 2007.
Such a refusal by an auto company is rare.
Messages were left for an agency spokeswoman.
“The company does not agree with NHTSA’s conclusions and does not intend to recall the vehicles,’’ Chrysler said in a statement. “The subject vehicles are safe and are not defective.’’
Chrysler maintains that NHTSA’s conclusions are based on an incomplete analysis of data.
The refusal may be a negotiating tactic. Chrysler also said in the statement that it will work with NHTSA to resolve the dispute.
NHTSA opened an investigation into the SUVs in August 2010 at the request of the Center for Auto Safety, a Washington, D.C., advocacy group.
The group contends that the SUVs’ gas tanks are positioned be-
low the rear bumper and behind the rear axle, making them susceptible to rupture and spill gasoline in a rear-end crash.
In a rollover crash, a lack of proper shielding for the plastic tank could cause it to puncture, the group said.
Clarence Ditlow, the center’s director, called the gas tank a “terrible design.’’
He has repeatedly sent letters to the company seeking a recall.
Chrysler said its own analysis shows that there are fewer than one fire incident for every million years of vehicle operation.
“The rate is similar to comparable vehicles produced and sold during the time in question,’’ the company said in the statement.
When the investigation was announced three years ago, NHTSA said it had found 44 Grand Cherokee crashes and 55 deaths since 1992 where fire was listed as the most harmful factor.
Of those figures, 10 crashes and 13 deaths were most likely associated with rear-end crashes, the safety agency reported.
NHTSA also said at the time that an initial review of crash data submitted by auto manufacturers showed that the Grand Cherokee did not have significantly more fires after crashes than other vehicles.
Do What’s Right for Cars and People.
PAGE 8 - NIADA CONVENTION
Texas Dealer Leads NIADA
in Temple, Texas, which is where I was. So I got in the buy-here, pay-here business. I (started) my own car lot. I was just learning the business, though. But I really got going (seriously) in the business when I moved to Taylor. We started Taylor Auto Credit in 1990. I got married soon after and my wife, Marcia, and myself got the business going our selves really. It just took of from there. When I first started in the car business, I didn’t really know what I wanted to do. But now I’ve figured it out. I want to be a car dealer (laughs).
We also do a lot of rental property, from single houses and duplexes to commercial property. It’s a big part of our business. It’s all run out of my main ofce. The building is more than 100 years old. I’ve made it look like a bank. I have teller windows. Many of my (car) customers also rent from me, so they come in to make their car payments and their rent at the same time.
UCN: We’ve even heard that you also raise cattle. Hagler: I’m a lifetime member of the Texas Longhorn Association.
I‘ve always enjoyed cattle. Every calf is diferent from the other. None of them have the same color or looks the same. They’re just neat animals. I like raising Texas longhorns. I also raise some commercial cattle, which is a cow-and-calf operation. I raise the cows and sell the calves. I keep them on several acres of my property. I don’t golf and I don’t hunt. But raising cattle is my way of getting away from everything. I have about 200 acres at my main ranch. I built a lake out there. I used to have close to 100 cattle, but I’m down now because of the drought.
UCN: Tell us about your buy-here, pay-here operation:
Hagler: Right at the end of the last year, we opened our location in Georgetown, Texas, which is our third store. We have two stores in Taylor. Then, just about a month or so ago, we opened our Maynard, Texas store. So we’re running four locations now. Everything is
strictly buy-here, pay-here. My main lot carries about 60 units. Each of the satellite lots carries about 30. We all carry the same inventory. We sell 2002 to 2008 model year, with mileage in the 90,000 to 120,000 miles, like everyone else. My average term length is about 38 months. When we started out, if we did a two-year term, we were just stretching it out. I remember when it got 30-months, I said I would never go to 36. Now we actually have some notes that go out 42 or 44 months. We’ve always ofered a 12-month, 12,000-mile warranty with every car. What’s funny is, I was on a panel at a conference years ago talking about my warranty. I’ve always had a warranty with vehicles. Other dealers looking at me like I was an alien. Because back then, everyone sold “as-is.” They didn’t do warranties. When I got of the panel, dealers were coming up to me and asking, “were you serious? Do you really ofer that warranty?”
Now we ofer a 24-month, 24,000-mile warranty. I’m actually fixing to go to a three-year, 36,000-mile warranty.
I bought an old Ford store, which is now my warranty center. That’s just for my customers. I also bought a former Chevy store and that’s my reconditioning center. Compliance people now tell us that we should be taking care of our customers (with warranties), but we’ve been doing that since day one. I have about a 60 percent comeback rate.
UCN: Texas is known for having a business-friendly environment. How has doing business in Texas made things easier for you – if it has – considering much of the country has struggled coming out of the recession?
Hagler: Texas is fantastic. I couldn’t ask for a better state to do business in. People were saying that we were in a bubble, but, for us, the bubble never burst. It’s especially good where we’re at in Central Texas. We didn’t feel the recession, especially with buy-here, pay-here. Plus we also have a pay-as-you-go sales tax in Texas (buy-here, pay-here)
– Continued from page 1
(Texas Independent Automobile Dealers Association) with Jef Martin as executive director. He has a great relationship with the Ofce of Consumer Credit Commissioner and the Motor Vehicle Division.
UCN: In the last decade, the NIADA has elected
cent years). The NIADA is a mix. A lot of people have thought over the years that the NIADA didn’t represent the buy-here, pay-here dealers and that is totally wrong. Part of it is, a lot of diferent parts of the country don’t even do buy-here, pay-here.
But I think we’re going to see more and more buy-
here, pay-here dealers pop up around the country. I hope they become part of There is great education out there for buy-here, pay-
Sometimes it’s not just what the NIADA and state associations provide, but it’s the networking. Just talking with other dealers about what they’ve been through can save you a lot of money. Because someone has already been there and done that and they can tell you how it turned out.
Photos by Andy Sharp
Tax Form Causes Headaches
By Jeffrey Bellant
LAS VEGAS – Accountants for buy-here, pay-here dealers recently discussed how their clients could avoid ending up in the crosshairs of the Internal Revenue Service over 1099-C forms.
Panelist Jef Taylor, a partner with Indiana-based Katz Sapper and Miller, said 1099-C forms deal with the discharge of indebtedness. So, in buy-here, pay-here, there is a potential reporting requirement based on the circumstances of certain writeofs or charge-ofs.
“The regulations are rather complex,” Taylor said.
There are discharge scenarios such as bankruptcy, foreclosure and discharge by agreement, for example.
A debt discharged in a personal bankruptcy would be excluded from the 1099-C requirements if the vehicle was for personal use and not business, Taylor said.
There are two big areas where buy-here, pay-here dealers would be required to submit 1099-C forms, including the discharge by agreement scenario or insurance loss. In the second case, if a customer totals a car and the dealer receives $5,000, but the debt is $7,000, the dealer may not pursue that
additional $2,000.
“But that, by default, could become a discharge by agreement,” Taylor said. “On those types of scenarios, we would advise our clients to file a 1099-C. Like a lot of things involving taxes, a good faith, honest efort to comply goes a long way.”
Panelist Steven Carstens, an accounting partner with Houstonbased Shilson Goldberg Cheung and Associates, added that only a dealer’s related finance company is required to file a 1099-C. If a dealer doesn’t have an RFC, he is not required.
Carstens said dealers often say they are always trying to collect on a debt, so they don’t need to file a 1099-C.
“But there will always be instances where you accept a payof that is less than the balance, or you have some sort of written agreement with a customer to sell his debt for less than full value,” Carstens said.
“In those cases, there’s no question that you should be filing 1099Cs.”
Dealers who claim they are always pursuing bad debt, should have a written policy and keep notes showing their eforts to collect on accounts.
“When you cease collections on
Continued on page 12
Tax Form
- Continued from page 10
an account, and give up on collections, then the 1099-C would be due,” Carstens said.
Dave Wiggins of Milwaukee- and Minneapolis-based CliftonLarson-
amount in excess of the deficiency, the dealer has to refund that to the customer, Wiggins said. Agents have assessed very sizable penalties on dealers who fail to do
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CarMax Builds Playgrounds
CarMax Inc. announced the launch of a $4.1 million national partnership between The CarMax Foundation and Kaboom.
Through this partnership, The Foundation and Kaboom will build 30 playgrounds across the United States by the end of 2015, benefiting 100,000 children. Kaboom is the national nonprofit organization dedicated to giving kids the childhood they deserve by bringing play to those who need it most.
To celebrate the ofcial coastto-coast launch of the partnership, more than 400 volunteers
simultaneously built two new playgrounds today in Richmond, Va. and Los Angeles.
The partnership is a three-year commitment with three distinct impact areas. First, the 30 communitybuilt playgrounds will be designed by children and built by volunteers from local partners and thousands of CarMax associates. Second, The Foundation is donating 11 Imagination Playgrounds to select partner organizations. This breakthrough playspace concept includes reconfigurable parts for children to design their own playground.
Jim Arrigo Owner President, Arrigo Automotive Group
“ Jim’s story ... WE INCENTIVIZE PEOPLE IN OUR STORES TO DO THINGS BIGGER, BETTER AND FASTER BY USING THE TOOLS WE GIVE THEM. THAT’S WHY WE’RE SUCCESSFUL.”
Drivers Bond With Their Cars
AutoTrader.com recently conducted the “Automotive Relationship Survey” to determine the emotional reasons why it now takes longer than ever for consumers to break up with their cars.
According to the survey, consumers tend to personify their cars to the point that the relationship with them mirrors relationships with living beings in their lives. More than 70 percent of respondents feel “very attached” or “somewhat attached” to their cars, with 36 percent describing their vehicle as an “old friend” and more than a quarter
saying they feel sad when they think about parting ways with it. Dependability (65 percent) and comfort (52 percent) were the primary drivers of attachment.
The survey also revealed gender and generational diferences in the relationships people have with their cars. More women than men said they were attached to their cars because of the way it looks (48 percent of women vs. 29 percent of men), while more men than women bond with their cars because of fond memories of the adventures they shared together.
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Social Media Brings Success
By Jeffrey Bellant
LAS VEGAS – Social media remains mysterious for some dealers, especially on the buy-here, payhere side.
But Manheim’s Chris Hood, director of field marketing strategy and operations, urged dealers to dip their toes in the online water to help build business.
Hood discussed the subject during the recent National Alliance of Buy-Here, Pay-Here Dealers conference here.
Social media scares some businesses because it involves too much uncertainty. But Hood said it allows two-way communication with customers, which can benefit dealers, not hurt them.
Continued on page 20
Photo by Jeffrey Bellant
SOCIAL SETTING: Manheim’s Chris Hood discusses social media strategies during the recent National Alliance of Buy-Here, Pay-Here Dealers Conference in Las Vegas.
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“Nobody’s got it all figured out,” he said. “Everybody’s learning just like you are.”
He said it doesn’t matter which tool is popular in the future –whether it’s Facebook, Twitter or something else. If a dealer is active in this area, he’ll be ready for the next big thing.
There are specific, low-cost tactics that dealers can use to make a splash online. First, dealers should know what they want customers to think about their business. Making sure the dealership is already active in the common spaces, like online classifieds and online newspapers, also helps.
Dealers should be on sites where customers review businesses so they can respond.
“I know that can be kind of scary,” he said. “But the reality is people are talking about our businesses already, whether we like it or not.”
Dealers should try out a site like HootSuite, a social media management tool, which will help dealers measure the activity on some sites they use, like Facebook, Twitter, etc. It can also allow a dealer to automate responses at certain times in advance, saving time.
However, Hood warned dealers that these sites don’t replace a dealer’s diligence in staying on top
– Continued from page 18
of what people are saying about the store.
Regular posting doesn’t have to be hard.
“The best (formula) I can recommend for you is to think about what you’re talking about in thirds,” he said. “Think about 1/3 of it being about really selling. Then dealers should (use) 1/3 of (your time) educating your customer about something. Then think about 1/3 of it as a way to promote others.
“It will (show) people that your business is more than just a place to buy cars. It reinforces how active you are in the community (and other things you do).”
Unlike traditional advertising, social media allows a dealer to experiment at very little or no cost to see what works. A dealer can make an online ofer – a free meal, for example – to a customer who takes a test drive.
Also, he urged dealers to survey their customers to find out what their interests are, where they shop and with whom they interact.
Like advertising though, dealers have to be patient to let social media do its work, he said.
“Social media’s really not about selling a car today,” Hood said. “But being active in social media today will have value down the road.”
Fitch Takes Ally Off ‘Negative’
Fitch Ratings has removed Ally from the Rating Watch Negative.
The ratings agency also afrmed Ally Financial Inc.’s long-term issuer default rating and senior unsecured debt rating at ‘BB-’.
The Rating Outlook is Stable.
related to ResCap and all thirdparty claims that could be brought against Ally (except for two securities claims against Ally) for a cash consideration of $1.95 billion to ResCap’s assets. Since Ally has already reserved $750 million in the prior year, it expects to take an incremental cash charge of $1.55 billion in the second quarter of 2013 related to the PSA and an increase in litigation reserves.
The removal of the Rating Watch Negative and the afrmation of Ally’s ratings are the result of the submission of a plan support agreement between Ally, Residential Capital LLC and third-party creditors to the Bankruptcy Court, which subject to approval, releases Ally from all rep and warranty claims
Fitch views this charge as reasonable in context of Ally’s capital position factoring in the pending sales of its international auto businesses.
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PEOPLE IN THE NEWS
TrueCar Hires IT Exec
TrueCar has hired Mike Dunn as chief technology ofcer following a nationwide executive search.
Dunn, most recently the CTO for Hearst Interactive Media, has also served as corporate CTO for Time Warner, founding CTO for Dell Online and EVP/CTO for Encoda Systems.
Dunn, who
that Pamela M. Nicholson, the company’s president and chief operating ofcer, has been promoted to chief executive ofcer.
Nicholson becomes only the third CEO in the privately held company’s 56-year history and the first to come from outside the Taylor family, which founded the company and grew it from a tiny start-up into the world’s largest car rental company.
Andrew C. Taylor, who will continue to be actively engaged with the company as executive chairman, has held the position since 1991.
makes frequent public speaking appearances on technology due diligence, the semantic web and online video technologies, has also served as a mentor at the MIT Media LAB, Columbia University and the Northwestern Kellogg School as well as an advisor to a variety of Silicon Valley, New York and Boston startups.
Dunn has served on numerous advisory boards, including Brightcove, Hootsuite and Blumberg Capital. He currently services on the board of the Ballston Spa National Bank (New York) and advisory boards of RAMP (Boston) and Arkami (Southern California).
Enterpise Taps Chief Exec Enterprise Holdings announced
Nicholson - a 32-year veteran of the company - will retain her current title of president and continue to oversee the day-to-day, worldwide operations of Enterprise Holdings, which operates Alamo Rent A Car and National Car Rental, as well as its flagship Enterprise Rent-ACar brand.
Auction Names Assistant GM
Peter Saldamarco, president of Central Auto Auction, located in Hamden, Conn., recently named Anthony Salerno assistant general manager.
Salerno previously worked in managerial roles with ADESA. He served as the assistant general manager for ADESA Long Island, and most recently worked as the general manager of ADESA Miami.
LINCOLN AUTO AUCTION 11909 US Hwy. 6 • Waverly, NE 68462 (402) 475-5500 • www.lincolnautoauction.com
GSA, New Car Trades, Financial Institutions, Banks and Repo/Fleet Companies Sale: Wednesday, 10 a.m.
PORT CIT Y AUTO AUCTION PO BOX 220 • Route 197, Richmond, ME 04357 (207) 737-4193 • www.acadia-auctions.com
ARI, TD Bank, Credit Unions, AutoIMS, Dealer Trades Sale: Thursday, 9:30 5 Lanes 400+cars; Live Sale & Simulcast all lanes
DEALERS AUTO AUCTION OF IDAHO 3323 Port St. • Nampa, ID 83687 (208) 463-8250 • www.daaofdaho.com
GSA, Westlake Financial, ARI, Emkay, Online 24/7 with SmartAuction, Openlane, and OVE
GREATER T YLER AUTO AUCTION 11654 State Hwy 64W • Tyler, TX 75704 (903) 597-2800 • www.greatertyleraa.com • Auctioneer #8083
ARI, SRG, New Car Units, Banks, and Credit Unions SALE: Tuesday, 5 p.m.
VALUE AUTO AUCTION, LLC 3776 State Route 93 Northeast • Crooksville, OH 43731 (740) 982-3030 • www.valueautoauction.com
SALE: Thursday, 11 a.m. REPOS: Thursday, 10:30 a.m. Dealer Cash Drawings Weekly NORTH EAST PENNSYLVANIA AUTO AUCTION 860 North Keyser Avenue • Scranton, PA 18504 (570) 207-2277 • www.nepautoauction.com 700-900
Mike Dunn
RETAIL MARKETS
CALIFORNIA
Frank Gromak, president, GT Cars, Newport Beach, Calif.:
“This is our 27th year in business. We have one location.
“We do it all – retail, subprime and buy-here, payhere. It’s probably a third (of each). Of course, we’re seeing more subprime in the market.
“We might be carrying about 30 (units) on average. We’re having trouble in finding inventory.
“I’m exhausting every efort I can to find inventory. Years ago, the brickand-mortar auction just had local competition, but now (dealers come from) nationwide, even worldwide online.
“We’re probably selling 15 to 20 a month retail. We also do some wholesale. But that’s tough, too. There’s not too much wholesale money left, by the time you pay for the car and reconditioning.
“The average model is probably 2005 to 2007. We try to stay (low) on mileage, but that’s getting harder and harder. A good 75 to 80
percent of the cars we look at in the wholesale pool have 200,000-plus miles. We try to keep them less than 100,000, but we do carry cars with more than 100,000.
“It really depends on financing. We have a lot of credit union buyers and most (credit unions will fund) cars seven years and back, but they want them less than 100,000 miles. But there are always exceptions.
“We’re trying to carry more imports than domestics. This is pretty much an import market. Those little Toyotas and Hondas are really difcult to buy. But any good car is hard to buy. Even with Korean cars, which are better cars than they used to be, you’re paying wholesale book or better now.
“California gas prices are pretty high. So the fourdoor cars are hard to come by. We try to carry cars, trucks, SUVs and passenger vans, whatever people want.
“On average, we’re putting between $500 and $800 into reconditioning,
“Our average retail price is between $8,000 and
$10,000. We try to stay under the $10,000 price.
“People still don’t have the confidence in the economy. I’m getting small business people in who normally look for cargo-type vans and small utility trucks. But the small business owners who come in have been hurting over the past five to seven years.
“They are starting to turn the corner, but they don’t want to pull the trigger (on a vehicle purchase). They’ll say they have work going 60 days to 90 days out, but past that, they don’t know if they’ll have work or not.
“We have a website and we use (third-party) Internet sites, like AutoTrader. com. I’m always interested in how the customer has found us, what sites they’re looking at. I want to keep up with that. But it’s a full-time job itself since our business mostly comes through the Internet, outside of repeat and referral business.
“One recent sale we had was a 2003 Nissan Frontier extended cab. It had 69,000 miles. We got $9,500 plus fees.”
PENNSYLVANIA
Mark Deal, general manager, Wessels Used Cars, Dillsburg, Pa.:
“The dealership has been in business since 1986. I’ve been here for 11 years.
“We have one location. The inventory varies seasonally. Right now we’ve probably got about 250 or 260 cars.
“A great month for us would be 100 (units sold).
“We’re strictly retail. We work with a lot of local banks and credit unions (to fund customers).
“We buy cars from auction. We buy cars from some of the larger franchises in the area. We also buy them out of the paper and of the street.
“We buy them wherever we can get our hands on them. The days of only going to auction to buy cars are over.
“You have to be a little more diverse in your (efforts) to hunt for cars.
“Our sweet spot for retail price is anywhere from $8,995 to $11,995.
“Our reconditioning, with service work, is around
Compiled by Jeffrey Bellant
$800 per car. We do not have a service shop. We farm everything out to local vendors. That works really well for us because we know who is good at doing certain work. We’ve got that worked out. It’s more profitable for us that way, rather than having our own shop.
“Like others in the past few years, we’ve switched from primarily print advertising to, almost exclusively, the Internet.
“We still do a couple of print things locally. But we hit all the big name websites (like AutoTrader and Cars. com). It seems to work as good or better than print.
“In the past month, minivans have been hot.
“One recent vehicle we sold was a 2011 Dodge Grand Caravan SE. It had 84,000 miles. We got $12,995.
“I’m cautiously optimistic for the rest of the year.
“People are coming in to buy cars because they need to drive back and forth from work.
“So the dynamic of the product has changed a lot, but the volume has been pretty consistent.
WHOLESALE MARKETS
LOUISIANA
Steve Chiasson, managing partner, Greater Shreveport-Bossier Auto Auction, Shreveport, La.:
“We first opened on Jan. 30, 2007.
“We have two lanes and we use them both.
“Our volume is up this year. We’re coming of last month, May, which is the best month we’ve had since we’ve been in business.
“Volumes are up, though our conversion rates are a little down.
“Right now, we’re running an average of about the mid-200 range, (that) would be a fair representation of what we do. However, a few weeks ago, we ran 346. Volumes are up roughly 10 percent from last year.
“Conversion rates for the year are clipping along at 56 percent.
“I attribute (our improvement) to customer loyalty and we’re a niche market. We get the customers who don’t want to get lost at the (larger sales). They get personalized treatment here. They can talk to me at any time. Everybody’s got my
number and I don’t duck any phone calls.
“Bid badges are averaging about 150.
“Those are not just guests or drivers. Those are (true bidders).
“I pretty well profile the dealers that come here and know their market. So I’ll take a good strong look at what we’ve got scheduled (before the sale).
“So let’s say I get a bunch of of-rental Camrys with (low-mileage), I’ve got a list of dealers who’ve bought this kind of car that I give to marketing and (they call those dealers).
“We draw from Houston, Dallas, Little Rock, Ark., and Louisiana. We have a pretty wide net. We’ll get some high-end stuf from the exotic stores – like Mercedes and Land Rovers – and that draws the top-end buyers. Plus, we get a lot of dealertrades. That’s our breadand-butter. That draws the middle crowd, so to speak.
“So the tote-the-note guys are doing well because dealers, after tax season, are turning some of their (leftover inventory) into money
at auction. So there are good supplies of those vehicles.
“About 95 percent of our volume, at least, is dealer consignment.
“We also hold a non-drivable sale. We don’t run video, but we have a viewing area where the vehicles can be seen from the lanes.
“I’ve got some of the best salvage buyers in the area that come here. We don’t run many, but the ones that we do run are for finance companies, credit unions and banks.
“In our regular sale, our average price is about $4,985. Last year, it was about $4,600.
“Any low-mileage car is doing well.
“One thing that is struggling is the 6.0 liter engine that Ford put out (for its F-250 and F-350). It is truly my only problem child. They’ve had a lot of injector problems and they’re expensive to fix. So dealers are scared of them.
“I’m not picking on Ford, because the L 7.3 liter powerstroke is a great engine.
“They’ve also got 6.4 that’s doing a good job for them.”
TENNESSEE
Compiled by Jeffrey Bellant
Stephanie Baker, general manager, Dealers Auto Auction of Murfreesboro, Murfreesboro, Tenn.:
“This auction has been a part of the Dealers Auto Auction (family) since about 2009.
“We have five lanes. We run five lanes once a month and the other three weeks of the month we’ll run four lanes. We’re an afternoon sale.
“We’re running an average of 550 units per week. We’re over last year by about 30 percent. I’ve been here for about a year-anda-half and we’ve made a lot of changes. We’ve grown our new-car dealer business and changed the look of this auction.
“Also, we’re in Rutherford County, which is the second fastest growing county in the country.
“We average a 45- to 50percent conversion rate.
“We’re probably about 5 percent over last year in (percentages of) cars sold.
“We’ve really been focusing on the new-car (consignors) that are going to be
here every week. They’re going to bring a couple of cars to sell and buy a couple of cars.
“We’re averaging about 280 bidder badges. Last year, we were a little over 200.
“The majority of our dealers are coming from this local area, from Nashville, Murfreesboro, and we have a lot of Alabama business and dealers from Kentucky.
“We’re a 90-percent dealer consignment sale. That’s about what it’s been in the past year.
“Our average sale price was about $5,600 in May. We were around $4,200 this time last year.
“We run in-op (units) every week at 2 p.m., before our regular sale. On average, we’ll run 25 units and up.
“We also have a government sale that we started in August. We expect to have 12 sales this year. They run on the third week of each month.
“We’ll probably run about 200 GSA units this month as well as in July and August.
“We also have a really good truck market here.”
NAF Offers Certification
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Co-sponsored and developed by CounselorLibrary.com and Hudson Cook LLP, the certification program is designed to provide the compliance professional with a working knowledge of federal laws and regulations that govern consumer credit, together with an overview and general examination of state consumer credit law.
The program consists of four
modules – two presented in an inperson classroom setting and two in an online format at the student’s own pace. Each module includes multiple sessions, with each session providing a thorough overview of the applicable law or regulation. The online sessions are followed by an online test that must be passed to receive credit for the session.
The program will provide the student with a comprehensive knowledge of consumer credit laws and regulations, preparing graduates to perform in a compliance management role. The course work is rigorous. It is estimated that there will be 12 hours of classroom work, and one to three hours to complete each session of the online modules.
Thief Goes For Long Test Drive
BELLEVIEW, Fla. (AP) _ Authorities say a north Florida man was arrested after being gone too long while test-driving a truck from a used-car lot.
The Ocala Star-Banner reports 67-year-old Lloyd Edward Kraft asked to test drive a red 1997 Ford F-250. He gave employees of Prestige Auto his phone number and they made a copy of his driver’s license.
The employee followed Kraft until he lost sight of him. Turns out the phone number didn’t work and the address he listed was a vacant home. The employee called authorities.
A Marion County Sherif ’s deputy saw the vehicle and detained Kraft, who said he was using the truck for work and planned to return it. He told authorities it was an “honest misunderstanding.’’
He’s facing grand theft auto charges.
Disconnected Jottings From Tony Moorby...
Believe it or not, this is the 100th article I’ve written for Used Car News. Perhaps there’s nothing too special about the act itself but it seems worthwhile to mark anniversaries as passing points of interest.
To me it represents a fouryear relationship with some folks who took a flyer on an idea and have allowed me to pontificate – sometimes at length – on subjects that were dear to my heart but not necessarily theirs. It’s sometimes a bit tough to come up with material that might, at least, appeal to some of our readers; it’s a bit like what it must have been to be Elizabeth Taylor’s seventh husband – you know what you have
to do but how do you make it interesting! But living in America and looking around provides all kinds of fodder for comment; current afairs, here and abroad, political shenanigans of all colors, shapes and
is a bit like looking at a white computer screen; you might have an idea of what you want to achieve but the first stroke or the first word is a daunting challenge. However, once you’ve started it’s difcult to know when to stop. Certainly in writing a column that discipline is absolute – you have an allotted number of words and space, and that’s it.
describe a place where I grew up, just for recreation and a mind stretch.
sizes, Wall Street rises and falls, the weather, natural disasters, the car business from building to buying, the economy or even education have elicited the opportunity to opine on this or that.
I love to paint – all kinds of things, from landscapes to abstract and realism to representational, but the use of lots of color is a theme throughout most of my artistic endeavors. Looking at a blank canvas
With a painting you have to step back and decide whether to stop or apply another daub. The palette is as broad as the subjects for writing – mix this with that and come up with something new – a diferent brush or amount of paint can make all the diference in the world.
If I could think of a plot I’d love to write a book. These articles are like drawing sketches and occasionally coloring them in but it would be wonderful to undertake a magnum opus and really get my teeth into something. I occasionally write an essay on a childhood memory or
CR R O O S S W D Sponsored by
By Miles Mellor
10. Roman 51
11. Hyundai SUV
12. It’s used to check car values
14. One in Spanish
16. Full-size SUV from GMC
17. Firm, briefy
19. North eastern state
21. ____- Healey roadster
22. Compact Toyota 26. Belgian car built in 1920 27. Tahoe and Traverse
I love to cook too – I think I’ve mentioned it before – I believe it’s to do with the same artistic drive to create something from nothing or from scratch, at least. The kitchen has all the attributes of a painter’s palette; ingredients, pots and pans, herbs and spices, wines and sauces, heat and cold. I have the girth to prove my indulgence!
A boss once said to me that I didn’t have a business degree but I was the president of the company; wasn’t that unusual? He asked.
I said that I didn’t think so. We had accountants to figure out and advise
but getting people to do things efectively, efciently and wanting to do them thus was like conducting an orchestra. More art than science – given that planning and measuring are as much a part of art as they are science. We doubled our profits in three years!
A tolerance and expectation of things arty and a push to creativity is one of the measures of a successful society. Artists question the status quo –even architecture proves that out – and stretch the minds of society around them.
I appreciate more than I can write the opportunity aforded me by Lynda, Colleen and Ted, the folks here, to play a small part.
INSURANCE AUTO AUCTION S
Down 1. Company bought by Nissan 2. Buick sedan 3. Spacious 4. Marketing medium 6. UCN’s focus (2 words)
7. Place to buy a car (2 words)
8. Compact from Kia
9. Lotus sports car
13. Saturn compact convertible
Temperature control, for short Across 1. _____ DMC-12 5. Forester makers
Concluded
31. “Not ___ bet!” (2 words)
33. Student score (abbr.)
34. Negative conjunction
35. Operations, for short
37. Wedding vow (2 words)
39. Completed 40. Brands
41. Gross receipts
44. Inexperienced 45. Car system relating to music, TV and data
48. Compass direction 50. Acadia makers 51. Brit. car bought by BMW
15. No, colloquially
18. Overtime, for short
19. The m in mpg
20. Highway 23. The spare tire on the back of this vehicle has been moved under the cargo foor (2 words)
24. Truck weight measurement 25. Geo ___ made by Isuzu 27. Driving around 28. Open auto 29. ____ Rover 32. SUV from Dodge
33. VW subcompact
Green color 38. Indy 500 champion in 2005, Wheldon 42. Very long time
Happening!
Below par
Spanish for more
Tony Moorby
CLASSIFIEDS
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FACILITIES FOR SALE/LEASE
BHPH. Good Operation forSale in beautiful Montana. Reason to sell, not in goodhealth, 76 years old. Call anytime for details & date to take a look. 406-253-1293
Get a Dealer’s License!! Auto Dealer Office & lot for Rent Close to Manheim, PA and Int. 78. Low Rent. 973-626-1615
ESTABLISHED USED CAR LOT for sale. Dealer license with business. 3515 Broadway, Knoxville, TN. 2 acres, 5000 sq. ft. showroom. Mark Sniper, 865-388-2774
BHPH USED CAR BUSINESS for sale. Turn key. Includes all signs, equipment, desks, phones, etc. etc. Located in beautiful mountains of Murphy, N.C. Draws business from Atlanta, Asheville, Knoxville areas. Great location right on 4 lane highway. Very low rent. Can include BHPH paper and cars. Call if you’re interested to hear more. Steve, 702-271-2651
