Used Car News 7/7/14

Public Overestimates

Dealer Profits

Consumers believe car dealers make about five times more profit on the sale of a new car than they actually do, a survey by TrueCar Inc. finds. The survey showed that 26 percent of car buyers feel they overpaid for their purchase and that 32 percent would not return to the same dealership due to low customer satisfaction.

Age of Cars on Road

Highest Since 2009

The percentage of older vehicles on the road has reached its highest level since 2009, according to Experian Automotive. Vehicles predating the 2001 model year made up more than 28.3 percent of all vehicles on the road during the first quarter of 2014, up from 22.1 percent six years earlier.

America’s Car-Mart Adds Two Stores

America’s Car-Mart Inc. recently opened two new stores in Hixson, Tenn., and Dothan, Ala. They are the chain ‘s 135th and 136th stores.

Technology Drives Quality Rankings

By Jenny King

DETROIT – Where once new-car buyers had complaints about air conditioning or a vehicle’s fit and finish, today’s top irritant is voice recognition devices.

This was among the findings of the J.D. Power 2014 Initial Quality Survey

released June 18. And according to results of the annual study presented here to members of the Automotive Press Association, owners of 2014 Porsches reported the fewest number of problems per 100 vehicles (74) while Fiat was at the bottom of the chart with 206 per 100 cars.

The Initial Quality Survey, now in its 28th year, covers 32 brands and 207 2014 models.

It comprises 233 problem symptoms and asks buyers to comment on them covering the first 90 days of ownership.

For 2014, the average was 116 problems per 100 new

vehicles, up slightly from 113 per 100 vehicles in 2013. Porsche, on the strength of its Cayenne, 911 and Panamera models, had only 74 problems per 100 vehicles. Other makes with averages of less than one per vehicle included Jaguar, Lexus and Hyundai. Hyundai was Continued on page 12

Consumer Groups Attack CarMax over Recalls

It has been a month of highs and lows for CarMax Inc. as the company reported record results, responded to charges from consumer groups about recalls and lost its founder.

The company reported that net sales and operating revenues increased to $3.75 billion in the quarter ended May 31. Used unit sales in comparable stores increased 3.4 percent while total used unit sales rose 9.8 percent. Total wholesale unit sales increased 9.9 percent.

CarMax’s tremendous success might be drawing some unwanted attention, however. Eleven consumer groups petitioned the Federal Trade Commission to investigate and take enforcement action against CarMax for its

advertising practices.

The groups say the used-car superstore chain’s Certified Quality Inspection misleads the public because technicians don’t repair recalls.

“CarMax is playing recalled used car roulette with its customers’ lives,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, which spearheaded the petition.

CarMax responded in a statement that manufacturers do not give used car retailers, including CarMax, the authority to complete recall repairs.

Continued on page 10

IAA CEO Deals with Challenges of Bigger Organization

(John Kett is the CEO of Insurance Auto Auctions Inc., the salvage arm of KAR Auction Services Inc. Kett took over as CEO in May after 14 years with the company.)

UCN:

Tell us about your background.

Kett: When I arrived, we were really re-engineering the whole business. We saw a lot of growth in the run up to merging with ADESA and creating KAR. I served as president since June 2011. Before that, I was in metal distribution and before that I was in the auto glass business. That’s how I became acquainted with the insurance business.

UCN: How did you arrive at IAA?

Kett: (Former CEO) Tom O’Brien and I had worked together when I was in the glass business. He recruited me when he took over at the end of 2000. As I said, we were going through a transformation of the whole company. He was a tremendous leader.

When I got here, we had fewer than 50 locations and now we have more than 160. We grew the business for a variety of reasons. One, obviously, was to grow the top and bottom lines of the business. But really it was to service our customers. The insurance companies especially were asking for a national footprint.

We did a pretty good job of filling the map. We’re adding locations now not so much because we’re not serving a market at all, but because we’re doing well there and we need more space.

In our business, real estate

My training is in accounting. I have an undergraduate degree from Northern Illinois University and an MBA from Northwestern University.

is a critical asset. It’s difcult to find large pieces of land where we’re allowed to operate our business.

UCN: How do you deal with local objections when you want to open a new site?

Kett: It can be a long process in most municipalities. Once we’re able to explain what we really do and how we operate, we’ve been fairly successful at convincing local governments that we’re a viable business.

UCN: How has the merger of IAA with ADESA and Automotive Finance Corp. worked out on your side?

Kett: With ADESA, we’re able to ofer a single solution to fleet and commercial companies. We don’t operate together, but we share some real estate, so we can take advantage of that. During catastrophes, we’ve been able to take advantage of ADESA’s properties and even their reconditioning facilities.

When the businesses got

together, we didn’t really see the untapped potential for floor planning in the salvage business. It’s still a relatively small percentage of our overall mix, but it’s been growing steadily.

UCN: How does your management style difer from Tom O’Brien?

Kett: Tom and I have the same passion for the business, but diferent personalities. We need to do a better job of growing and identifying our high performers. When we were smaller, you could easily reach out to your top talent. We need to be more systematic at the size we’re at now.

UCN: There is a new CEO at ADESA (Stephane St. Hilaire), a new CEO at AFC (John Hammer) and yourself. What kind of relationship do the three of you have?

Kett: It’s been refreshing. I know John and Stephane very well. We’re all taking fresh looks at our businesses, but we all come from in-

side the company.

UCN: What effect have you seen from the shortage of cars on the traditional auto auction side of the business?

Kett: The shortage of cars did drive demand up at our sales. Used-car prices are one of the main drivers of prices in the salvage market.

UCN: The main driver, of course, is weather. What impact have extreme weather events, such as Hurricane Sandy, had on your business?

Kett: Sandy was something we never want to repeat. It was much more challenging than Katrina because of the real estate. It was much easier to get land in Louisiana. Also, getting people and vehicles and supplies in and out of there was very, very difcult.

(See the July 21 issue of Used Car News for the second half of Kett’s interview and his views on auction technology.)

Longtime buy-here, pay-here dealer Christopher Todd Smith, 47, of Columbia, Ala., died May 24.

Smith was president of Dothan Motor Co., based in Dothan, Ala.

The dealership was started by his grandfather in 1946 and was later owned by his father and uncle before Smith took the reins in 1996.

Smith had always placed importance on coaching people and used leadership books and training exercises to improve his staf

In 2003, Smith talked about his philosophy of business.

“I’m not here to just make money,” Smith said.

“I’m here to impact lives. I want the company to add significance to the lives of our team members, the customers, and to add to the bottom line, too.”

Smith was preceded in death by his father and mother, Dan and Vickey Smith; brother, Tim Smith; grandfather, J.O. Smith; and grandparents, Virgil and Edith Newton.

He is survived by his wife, Lori Hoskins Smith; daughters, Victoria Grace Smith and Clarissa Hope

MILESTONES

Smith; sons, Elliot Alexander Smith and Harrison Rush Smith; brother, Troy Smith (Barbara); grandmother, Ruth Hinson Smith; several aunts, uncles, cousins, nieces and nephews.

Smith spent his early years in Enterprise, Ala., until his family moved to Dothan, Ala.

Smith was a graduate of Auburn University at Montgomery and married his high school sweetheart, Lori Hoskins Smith in 1991.

They moved to Dothan in 1993 for Smith to join the family business.

He eventually grew the business from nine to more than 40 employees.

Ed Bobit, founder and chairman of Bobit Business Media, died at the age of 86. Bobit had undergone valve-replacement surgery last summer and had been working primarily from home.

Bobit was a man of outsize pleasures, but none more than his work and family, which were usually one and the same.

Ed’s son Ty runs the company (Ed

had turned over the CEO mantle to Ty in 2004) and his eldest grandson Blake joined the company in 2010.

He had a big family and enjoyed hosting annual reunions of his five grown children (his daughter Bonnie predeceased him in 2007), 14 grandchildren, and one great-grandchild.

He launched the company’s flagship publication in November 1961.

The company today publishes more than 20 various trade publications. He was inducted into the Fleet Hall of Fame in 2009.

One of his greatest passions was any sport played by his beloved Michigan State, where he played himself during his undergraduate career.

This year’s Spartan victory at the Rose Bowl, which he watched live, was, in his own words, “One of the happiest days of my life.”

He is survived by his five children: Ty Bobit, Barbara Jusseaume, Bobi Jo Banas, Beverly Jacobson, and Beth Edwards as well as 14 grandchildren and one great-grandchild.

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

www.usedcarnews.com

Charles M. Thomas

Founder (1947-2002)

Lynda R. Thomas, Publisher Colleen Fitzgerald, General Manager

Editorial:

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Contributing Writers: Ed Fitzgerald, Jenny King, Sheila McGrath

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Marie Hingst, Account Manager

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Used Car News is published the first and third Monday of each month. Subscribers: We print advertisements as sent to us by auctions and other advertisers. It is not possible to verify the correctness of listed vehicles in auction ads. Most lists are partial and all lists are subject to last minute changes by auto auctions, so before travelling a long distance for a particular auto auction event, contact the auction by telephone for a fax of vehicles in the sale.

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Past NIADA President Seeks New Office – Mayor

By Jeffrey Bellant

Dealer Anthony Under-

wood, a past president of the National Independent Automobile Dealers Association, is running for mayor of his hometown of Bessemer, Ala.

The primary election is Aug. 26. The top candidate must get 50 percent of the vote to avoid a runof

Underwood sought support from his fellow dealers during the recent NIADA annual convention in Las Vegas.

The 2003 National Quality Dealer is hoping he can turn around Bessemer –known as the Marvel City – by bringing back business and reducing crime in a city that has seen its population dwindle over the years.

The city had as many as 35,000 residents at one point, now it’s down to 27,000.

Underwood said the city has become a “mini-Detroit,” with 13.9 percent unemployment and neighborhood deterioration and abandoned homes.

One study ranks Bessemer

the seventh most dangerous city in the U.S., just below Detroit at No. 6.

Underwood said the problems became clear when he attended a local school event that promoted a “reuse, recycle and reduce” campaign.

When he walked out of the school, he noticed an empty home with doors kicked in right across the street.

“I thought (the recycling event) was hypocritical when we, as adults, weren’t even taking care of the most important thing – the safety of our young people,” Underwood said.

“It’s a dire situation. We want to revive the city. This is where I was born and had my first job. This is my hometown and we want to make it a great place to live and work and grow.

Underwood started his used-car business – Anthony Underwood Automotive – in Bessemer in 1994 with a rented trailer and 10 slots for cars. Now it’s a large dealership with a full service shop. Underwood’s son Roderick runs the store.

Underwood also owns

about a half-million square feet of commercial property in the city, serves on the chamber of commerce board and is involved in numerous other public service activities.

Over the years, he’s been asked to run for ofce, but he’s always declined. Underwood thought his eforts in the auto business were the best way to help the city.

“I always thought there were other people that could handle the problem,” he said. The last two mayors have been a disappointment, Underwood said.

Although Underwood and his wife had moved out of Bessemer into their dream home in another town, he felt strongly that the city needed new leadership and made his decision to run

six months ago. Underwood moved back into the city earlier this year to be eligible for the mayoral race. He understands that an incumbent is hard to beat, but Underwood has name recognition because of his dealership.

“I tell people, I want to do for Bessemer what Bessemer has done for me,” Underwood said.

ITCHING TO FIX THAT SCRATCH?

Dealers Defeat City’s Fee Plan

By Jeffrey Bellant

A coalition of independent and franchise auto dealers fought of a proposed local ordinance that they said would have devastated dealerships in Pharr, Texas.

He said car sales already have a state tax, so cities cannot impose a sales tax on top of that.

See how easy it is to restore that like-new finish in just an afternoon. Watch our online how-to videos to show you how.

Pharr, a town of 65,000 residents, is home to about 100 car dealerships, according to Jef Martin, executive director of the Texas Independent Automobile Dealers Association.

But its reputation as a dealershipfriendly town was in jeopardy when the Pharr City Commission tried to pass an ordinance early this year.

The ordinance, introduced in February, would have imposed an inaugural $1,000 licensing fee on all Pharr car dealers and a $500 annual renewal fee. On top of that, the city would require a $25 fee to the seller for each car sold and dealers would have been required to give a percentage of their gross sales back to the city.

“I don’t think they really understood what they were getting into,” Martin said. “It would have been a train wreck, just for a small city to try and license 100 dealers (by itself).”

Martin said association leaders met with local ofcials to determine their purpose for the ordinance.

The Texas IADA partnered with members of the Valley Automobile Dealers Association and the Texas Automobile Dealers Association to challenge the proposed fees after the commission passed a first reading on Feb. 17.

The groups sent a letter that laid out their concerns about the impact of the ordinance on the city’s auto businesses.

By the second reading on March 6, the city dropped the gross-percentage of sales provision and changed the $25 fee to $10 and switched it to the buyer from the seller.

But the dealer coalition still had several problems with the ordinance. The dealer groups argued that the ordinance would ultimately drive car dealers and their customers to other municipalities.

The groups threatened a lawsuit if the ordinance moved forward.

Public outcry and a packed city commission meeting for the third reading of the ordinance forced the city to eliminate several of the provisions detrimental to dealers.

The fees structure was dropped from the amended ordinance leaving only regulations on dealer location, lot size and grounds keeping.

PAGE 8 - NIADA QUALITY DEALER AWARD

Winning Quality Dealer Award Overwhelms Operator

By Jeffrey Bellant

LAS VEGAS – New Mexico dealer Marc Powell, an Air Force veteran and Harvard Law School graduate, has added the title of National Quality Dealer of the Year to his resume.

Powell, owner of Recarnation, based in Albuquerque, received the honor during the recent National Independent Automobile Dealers Association’s Convention and Expo.

It was the 39th annual National Quality Dealer award.

“I feel deeply overwhelmed,” he said. “There were so many extraordinary dealers here with decades of experience and incredible stories. I’m just so humbled.

“I hope we’ll be able to raise our standards to continue to excel.”

Powell also graduated from Harvard’s Kennedy School of Public Policy and founded an investment firm before investing in the used car business.

Recarnation includes a dealership, car rental operation and an 18,000-squarefoot service center.

Powell is as active in char-

ity as he is in business, donating more than 50 percent of the operation’s profit to individuals and institutions in need.

The dealership sponsors a charity every month.

Powell even received a letter of recommendation from New Mexico Gov. Susana Martinez.

Last year, Powell donated a vehicle to a high school student sufering with terminal brain cancer. After the student died, Powell raised more than $5,000 to pay for the girl’s funeral.

Powell said the mother of the girl was later hired by the New Mexico IADA and has since moved on to a position with AFC.

As he accepted the National Quality Dealer award, Powell told the audience at Caesar’s Palace that he didn’t write a speech because he didn’t expect to receive the honor.

“I feel so grateful to be in this business,” he said.

“Everyone in this room makes a community better. Every car dealer I know gives and gives and gives.”

Powell said when he decided to go into business he didn’t want to sell t-shirts or

some other product.

“I wanted to help people,” he said. “It’s been an amazing experience.”

Powell said being a car dealer is diferent from his experience as an analyst and owner of an investment firm.

“It’s the deep relationships that we have formed with our clients,” he said. “Most of our clients require assistance with their transportation needs.

“We tried to rebuild the entire company to serve them and make them successful. Success isn’t real until it’s shared.”

Powell was one of 19 nominees for the award. The nominees are chosen by various state IADAs. The selection of the National Quality Dealer is made by a review panel from Northwood University.

Powell also serves in a number of other positions. He is an active member of the Albuquerque Convention and Visitors Center, the Chamber of Commerce and is a board member of the Harvard University Committee on University Resources. Powell also serves on the board of the U.S. Air Force Academy Association of Graduates among other groups.

Manheim, NIADA Salute Dealership That Gives Back to Community

Manheim and the National Independent Automobile Dealers Association presented the fourth annual NIADA Manheim National Community Service Award to Members Auto Choice of Suwanee, Ga.

“It’s a privilege to be able to honor Members Auto Choice for their commitment to the community,” said Tim McKinley, senior vice president of sales for Manheim. “Independent auto dealers who share their time, talent and resources to improve the lives of others deserve to be honored. Michelle Groover and Dan Stryzinski of Members Auto Choice have embraced charitable giving and volunteerism through their support of more than 40 charities.”

“We are so pleased to support their outstanding community spirit and partnerships, and commend the Michelle Groover and Dan

Stryzinski and their team for their giving eforts in the metro Atlanta area,” NIADA President Keith Hagler said. “To reinforce its commitment to giving back, the dealership distinguished itself by raising money for more than 40 charities using their signature barbecue as a driving force.”

McKinley presented Members Auto Choice with a check for $5,000 to be donated to Georgia Chapter of Concerns of Police Survivors (C.O.P.S.), the dealership’s charity of choice.

C.O.P.S. provides resources to help the families and coworkers of law enforcement ofcers killed in the line of duty.

Two other dealerships were honored at the NIADA National Leadership Awards Banquet as finalists for the award: Grant Motors & Mint Motors, Ft. Myers, Fla., and Country Club Auto, Greenville, Ohio.

CarMax

– Continued from 1

The statement went on to say that CarMax supports federal legislation that requires used car retailers to fix recalls so long as the legislation also mandates that manufacturers fully enable used car retailers to make the repairs. The legislation should require manufacturers give used car retailers all recall notices, the same diagnostic and repair information, and the tools and parts that manufacturers make available to their franchise dealers.

Finally, the company said goodbye to one of its founders when Richard L. Sharp died June 24.

Sharp was CEO of Circuit City Inc. when the now-defunct electronics retailer diversified into the used-car business. Sharp became CarMax’s first chairman of the board when Circuit City spun it of Sharp battled Alzheimer’s disease for the past few years.

CarMax dedicated its first store, located in Richmond, Va., to Sharp during a ceremony last year.

The company also set up the CarMax-Rick Sharp Entrepreneurship Scholarship, which awards money to graduating high school seniors in the Richmond area.

– Bret Buike Operations Manager J.D. Byrider

J.D. Power

- continued from page 1

models of a specific make they have owned.”

the top non-premium for 2014; owners reported 94 problems per 100 vehicles. Toyota was fifth followed by Chevrolet (the highest ranking domestic), Kia, BMW and Honda.

Reliability is the No. 1 reason behind customer choice, followed by exterior styling, said Dave Sargent, vice president of global automotive at J.D. Power.

“Quality has a direct impact on customer loyalty,” he said. “People remember problems of earlier

Those flaws have a profound impact on an automaker: every ranking percentage point lost costs a company a lot of money, Sargent said.

Voice recognition systems topped the problems reported for 2014 models.

“It is bedeviling the industry,” Sargent said. “Complaints included the fact that the systems misinterpret commands.”

KAR CEO Snags Award

KAR Auction Services Inc. announced that CEO Jim Hallett received the EY Entrepreneur of the Year 2014 Award in the consumer category in the Midwest. The award recognizes outstanding entrepreneurs who demonstrate excellence and extraordinary success in areas such as innovation, financial performance and personal commitment to their businesses and communities.

Hallett was selected by an independent panel of judges, and the award was presented at a special gala event at Navy Pier in Chicago on June 18.

Now in its 28th year, the program has honored the inspirational leadership of such entrepreneurs as Howard Schultz of Starbucks Cofee Company, Pierre Omidyar of eBay Inc., and Mindy Grossman of HSN. Recent U.S. national winners include Reid Hofman and Jef Weiner of LinkedIn; Hamdi Ulukaya, founder of Chobani; and 2013 winner Hamid Moghadam, CEO and Chairman of Prologis.

PEOPLE IN THE NEWS

As a Midwest award winner, Hallett is now eligible for consideration for the Entrepreneur of the Year 2014 national program.

Award winners in several national categories, as well as the Entrepreneur Of The Year National Overall Award winner, will be announced at the annual awards gala in Palm Springs, Calif., on Nov. 15.

The awards are the culminating event of the EY Strategic Growth Forum.

In other news, KAR has named Ken Garbez as vice president of operations for High Tech Locksmiths.

KAR acquired High Tech Locksmiths, a provider of transponder, remote, high-security and car smart keys in North America, in January.

Garbez has more than 25 years of experience in the automotive industry, with 12 years spent at ADESA, a business unit of KAR.

He has held various management roles at ADESA in the areas of operations, reconditioning and transportation, including assistant general manager at ADESA Golden Gate, and most recently, at ADESA Las Vegas. Automotive Finance Corp. has selected Huey Antley as its first vice president of marketing analytics.

Antley joins AFC from Mitchell International, a provider of software solutions for the property and casualty insurance industry, where as di-

rector of analytics he helped Mitchell launch a solutions development team known as the ClaimsLab.

Prior to Mitchell, he served as chief data scientist for The Walt Disney Company’s Customer Data Environment.

These recent roles followed more than 20 years of experience in applying data science within financial services companies including GMAC Financial Services, HSBC Auto Finance and Alltel Information Services.

Manheim Promotes Managers

Manheim has named Peter Grupposo and Janet Hendrixson as vice presidents of national accounts.

Both will report to Rich Coutu, vice president of commercial sales.

Grupposo most recently served as NextGear Capital’s vice president of operations and business development.

In that role, he oversaw NextGear’s corporate support departments of business initiatives and operational planning.

Prior to joining NextGear Capital in 2013, Grupposo worked with Dealer Services Corp. from 2005 until the company was acquired by Manheim in 2012.

Grupposo held a variety of roles at DSC, including sales executive, general manager and regional director

for the northeast region.

Prior to joining DSC, Grupposo worked for Enterprise Rent-A-Car during his career.

Hendrixson served as regional director for NextGear Capital prior to this new role.

She was responsible for the management and oversight of all aspects of NextGear business in the Mid-Atlantic Region.

Prior to joining NextGear Capital, Hendrixson served as general sales manager for Manheim’s Southeast Market.

She joined Manheim in 2000 following the acquisition of ADT Automotive.

During her career at ADT Automotive, Hendrixson focused primarily on establishing relationships with key customers and sales support.

Manheim also promoted six general managers at seven operating locations in five states.

The promotions to general manager include: Bo Beason (Manheim Mississippi), Donny Cohen (Manheim Daytona Beach and Manheim Jacksonville), Doug Kramer (Manheim Central Florida), Eddie Pope (Manheim Houston), Carter Theissen (Manheim Minneapolis) and Kim Waterman (Manheim Central California).

They have all assumed their new roles.

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CAPITAL IN THE LANES COMING SOON. It’s the new wave in reconditioned vehicles with the same exacting standards you’ve come to expect from Santander.

Alex Perez, owner of A+ Auto Sales in West Chester, Ohio, says NextGear Capital’s partnership was instrumental in growing his business. He has increased his inventory and stayed updated on all the latest dealer and auction information with NextGear Capital’s innovative processes.

“Everything I need is on the NextGear Capital website and mobile app. For instance, I can request titles, and within 24 hours I will have them in my offce. Everything I need is at my fngertips.”

Listen to more of what Alex and other dealers have to say at nextgearcapital.com/why/innovation

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SPORT S C AR

VAN

RETAIL MARKETS

CALIFORNIA

Mehdi Chitgari, president, Classic Chariots, Vista, Calif.:

“We have one location. We’ve been in business 25 years.

“I keep, on average, 150 cars in inventory. We get our vehicles from repos, lease returns, some rentals and trade-ins. We also go to auctions.

“On average, we’re selling about 75 cars per month. We’re doing a little bit better this year compared to last year.

“The average retail price is about $16,000.

“We just sell straight retail. We have a good selection of banks and rates.

“Right now, we’re carrying more cars than trucks because the industry is short of trucks.

“But four years ago we used to sell more trucks.

“So right now, one-third of my inventory is trucks. About 15 percent is SUVs and the rest are cars.

“I sell more domestics than imports.

“The average model year is 2011. The average mileage

is about 40,000. It’s almost the same as it was last year.

“We service our own vehicles. I have a phenomenal service department.

“We service every car before we sell them. We check brakes, rotors, tires, etc. I have about 12 bays.

“My reconditioning costs average about $800. That’s about the same as last year.

“We do most of our advertising online. We do AutoTrader.com, Cars.com and our own website, ClassicChariots.net.

“We also do things in the community. We’re involved in the chambers of commerce in Vista, and Oceanside, Calif.

“We have a lot of customers at Camp Pendleton and we service a lot of Marines. About one-third of our customers are military (families).

“We also support local schools and give away some Thanksgiving dinners.

“I’m a board member of a local hospital foundation and I’m president of the Tri-City Navy League.

IAG_UCN-jun2_All.pdf 1 5/13/14 2:12 PM

“This is looking like a good year.

“We just sold a 2010 Dodge Charger. It had about 70,000 miles on it. I believe we got $16,000.”

ILLINOIS

Joseph Mok, owner, Gmotorcars, Arlington Heights, Ill.:

“We’ve been in business six years. My dad and I own the business. Before this I was in the IT field and my dad was a mechanic. Cars have always been our passion.

“We started out with three cars in a driveway. Now we have 80 to 100 in stock. We sell between 55 and 65 a month.

“We turn our inventory 8.5 times a year. I use statistics. If a car makes $200, $300 over cost – it’s gone. I don’t care.

“I can replace anything. I’m sick of hearing people say a car is irreplaceable.

“We did $7.8 million in sales last year. The winter was horrible. We got destroyed. We were $60,000 in gross behind, as of the beginning of May.

“But May was really

strong. June has been up and down.

“We do straight retail, no buy-here, pay-here.

“The average car on the lot is about $14,000 (retail). That’s the same as this time last year.

“We are heavy into using CarMax auctions (to get vehicles). We’re also heavy into Enterprise. We do what we can to limit our buy fees.

“The average model year is 2007. The average mileage is about 60,000.

“It’s absolutely been a challenge to get cars with (lower mileage).

“We just search high and low. It’s a scavenger hunt. But if you buy Enterprise cars, for example, they are generally 50,000 miles or less.

“We carry 80 percent domestic and 20 percent imports. That’s the same as last year.

“We carry about 60 percent trucks and vans, with 40 percent cars. We have a phenomenal commercial market for cargo vans like the Dodge /Mercedes Sprinters and (Chevrolet) Expresses. That business is

Compiled by Jeffrey Bellant

consistent.

“I think the economy is still volatile. It’s definitely better than what it was, though. We forget what it was back in 2008.

“But back in the day, gas prices used to drop by pennies and go up by pennies. Now they drop by quarters or rise by dollars. So I don’t think the economy has stabilized.

“We do our own service and we do outside business. We have six lifts and a full detail shop.

“We do our own reconditioning. Our average recon is about $800. It’s the same as last year. There are not a lot of peaks and valleys with recon.

“Our goal is to have a 36-hour turnaround (for reconditioning).

“For advertising, we use Cars.com, Cargurus.com and Craigslist. We used Autotrader.com for a long time. But I just didn’t see the performance with them. So I took that money and put it into Cargurus.com.

“We’re heavily active in our community and chamber of commerce.

WHOLESALE MARKETS

LOUISIAN A

Steve Chiasson, managing partner, Greater Shreveport-Bossier Auto Auction, Shreveport, La.:

“We’ve been in business seven and a half years.

“We opened up our third lane in April. We added to the physical structure to (expand). It’s been good for us.

“(In the past year) I hired Jarvis Thomas, who is an old pro and former auction owner. I guess you’d call him our sales manager, We’re a small company and we don’t go by titles much, but he can call himself anything he wants.

“Right now, we’re running closer to 300 per week. We’re considerably ahead of last year. We’re seeing double-digit growth.

“We’re averaging about a 58 percent sales rate for the year.

“We’re mostly dealer consignment. We sell fleet, but the fleet volume is just a small part of our business. It’s about 10 percent of our business.

Compiled by Jeffrey Bellant

“During a recent sale, the average price through the lanes was just over $6,000. Those figures are way up from 2013. Those numbers were in the high $4,000s last year.

“We also run an in-op sale prior to the regular physical sale. It’s not big.

“We run between 10 and 20 units. We do that primarily as a convenience for the dealers.

“In the regular sale, midpriced cars with decent miles are doing well. Cars in the $7,000 to $15,000 price range are selling well. Prices never really softened up on those.

“But I want a (butt) for every seat. I want a group of buyers that will buy the cheap stuf.

“I also want a group of buyers that will compete for the mid-priced stuf. I want a group of buyers that will buy the high-dollar stuf, too.

“We sell a lot of the (highline) vehicles as well. We’ll sell for the BMW store and the Mercedes stores. It’s

“We run Budget, Avis and Enterprise rental cars and our percentage has been good.

not unusual for us to sell a $50,000 to $60,000 car and I need to have people compete for that.

“We do target marketing. We review what we have before the sale and we try to match the inventory to buyers and contact them to find out of these are (vehicles) they’d be interested in them. We study buying patterns.

“It’s a chess game matching the buyer to the seller.”

MINNESOTA

Rob R. Thompson, president and general manager, Mid-State Auto Auction, New York Mills, Minn.:

“In August, we will have been in business 31 years.

“We have four lanes.

“Our volumes have been right around 400 per week. It might be up a touch from this time last year, but I’d say it’s pretty comparable.

“In April, sales percentages were running about 65 to 67 percent.

“Right now, it’s consistently 55 to 58 percent. So, all things considered, it’s not bad.

“On a week-to-week basis, about 85 percent of our volume is dealer consignment. The rest would be from lease companies, banks, repossessions and GSA.

“On average, we’ll (draw) about 125 to 130 dealers in the lanes.

“That’s comparable to last year. It seems like things slowed up a little bit in June, so there was a little bit more anxiety going on.

“I think that we were coming of such highs in March and April that there was a little bit of a natural letdown in May and June.

Of course, car prices were also pushed higher. But I don’t see anything out of the ordinary, compared to years’ past.

“Our dealers come mostly from Minnesota,

“But we’ll also get some from North Dakota, South Dakota, a few from Wisconsin and some from Canada.

“But they are predominantly from Minnesota.

“We have GSA sales several times throughout the year.

“This year we had them in May and June. We’ll

have them (every month) through November. During a recent GSA sale, we had a lot of Malibus and Grand Caravans. We also get a fair amount of G6s, Ford Focuses and then a variety of trucks. We get a lot of ¾ ton trucks. We also had a lot of Uplander vans and Dodge Avengers.

“The first sale we had a 106 units and the next was 116. So I’ll day we get 110 units on average.

“On the fleet-lease side, we run cars from Westlake Financial, Union Leasing and United Auto Credit. Half of those vehicles are repos and half are regular fleet cars.

“The average price coming through the lanes is about $4,800. I’m not positive, but I think that’s up about $200 from a year ago.

“Trucks never really get soft, but if you have a really nice truck, those are doing well. If I’ve seen any softening, it’s probably in minivans.

“But if you have anything in the 40,000 to 80,000mile range, then it’s doing well.”

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Event Helps Kids’ Cause

GET YOUR MOTOR RUNNING: Motorcyclists help raise funds for the Juvenile Diabetes Research Foundation during ADESA Boston’s 14th Annual Classic Car and Motorcycle Run.

Nearly 150 motorcycles and 40 vintage vehicles took to the road last Sunday for ADESA Boston’s 14th Annual Classic Car and Motorcycle Run.

Proceeds from the event benefit the Juvenile Diabetes Research Foundation.

So far, the auction has collected $39,790 from this year’s event. Final totals will not be available until June 30.

The “run” included a 30-mile police escorted ride through several Massachusetts towns. In the past 13 years ADESA Boston has donated more than $400,000 to local children’s charities.

“The continued support of our employees, our customers, our local law enforcement agencies and the business community as a whole is greatly appreciated,” said ADESA Boston General Manager Jack Neshe. “Without them, our success wouldn’t be possible.”

Along with the classic car and motorcycle run, the event included free food, live music and fun for the whole family.

Auction Celebrates 36 Years

Pittsburgh Auto Auction celebrated its 36th anniversary on May 5 and 6, welcoming more than 900 bidders to the auction lanes and posting the sale of more than 1,000 vehicles.

Chris Angelicchio, PAA general manager, said the auction marked the occasion by dividing its regular weekly sale into two parts, with sales on both Monday and Tuesday and a customer dinner and entertainment in between.

Monday’s auction featured three of the auction’s largest dealer consignors, who sold 96 percent of the 300 vehicles included in the afternoon sale. Buyers returned to the auction lanes in full force on Tuesday, bidding on the season’s best

selection of cars, trucks and SUV’s, highlighted by consignments from CarGroup Holdings, CPS, Westlake financial, Markone Financial, Ally Remarketing, and GM Remarketing. Angelicchio said that on Monday afternoon following the sale, the auction switched gears, converting the auction arena into a supper club for more than 300 guests, visitors, and staf

TRUE COS T OF INCENTIVES (TCI)

Disconnected Jottings From Tony Moorby...

“Bomp, bomp, thwok. Bomp, bomp, thwok.” The sound of the neighbors’ kids’ basketball hitting the driveway and the backboard. It’s one of those sounds that herald in the summer, along

with the other familiar reminders that the really hot weather is just around the corner.

We have a screened porch that we’ve shared with two broods of starlings and about four carpenter bees who shower us with sawdust like confetti – they have to go!

I’ve been told that the cold winter would cull the bug population – poppycock!

After a wet spring we’ve been beset with mosqui-

toes that are just as likely to grab you by the throat before they bite you. If it were not for the protection of the porch I’d be housebound after five o’clock every day.

I can be outside with my

the end of this hour’s excruciating symphony, I’m ready to imagine all kinds of things to do with his blower!

I planted a garden, raised from seeds grown in the greenhouse. The herbs are growing at a rate that far outstrips our ability to consume them, while I’ve not yet seen a flower on the tomatoes or pepper plants – the foliage is growing like Trifds!

It’s a kaleidoscope of cars in every color imaginable combined with the whining of twin turbos and the ‘berloom, berloom’ of old V8s. Forty-seven years in the car business hasn’t taken one tiny bit of the excitement away from me.

It’s a blood-stirring thing and is probably now part of my DNA.

like helping out with some classic car auctions, a little consulting here and there – enough to keep me out of trouble and pursue some of my other interests. And time to pick up on things around me and enjoy some of the smaller things in life that hitherto may have gone unnoticed.

wife and they will avoid her only to be all over me like a cheap suit.

The fellows who mow our lawn arrive like a SWAT team on Thursdays so we can enjoy the grass’s new tonsure for the weekend.

The neighbors, on the other hand, shatter the Sunday morning peace on one side and the afternoon on the other.

One actually revs his blower in the belief that it’s more efective to do so. At

CR R O O S S W D

By Miles Mellor

33. Radiator part

Across

1. Z06 sports car

5. Buick sedan

10. Durango or Journey

12. Honda’s longestselling car

13. Jaguar, e.g.

14. Many an MIT grad, for short

15. Pro

16. Speedometer pointer

18. Fast pace

20. Basketball association

21. ___ box

22. Isuzu SUV

23. Humanitarian org.

24. Promotional effort

25. Taxi 28. Indy 500, e.g. 30. Inexpensive

35. Small racer that makes kids “go”

37. Love to death

39. Jiffy offering

41. Mix of two kinds of cars

42. Look at for takeover

43. Honda Odyssey and Toyota Sienna

45. Subaru’s rival for the Mazda3

46. Car named after the daughter of the inventor

49. Cadillacs are made here

50. Method

52. VW ad phrase (with 26 down)

53. Brands 54. ____ box

Despite all these challenges, man-made or natural, I like this time of year. I take the opportunity to drive my Morgan around the country roads like Toad of Toad Hall and go to Cars and Cofee with all the other local car wonks on Saturday mornings.

The first Saturday of every month will do much to convince you of the wealth around Nashville – Lamborghinis abound, Ferraris everywhere, a bevy of Bentleys, a pack of Porsches all join the classics of the fifties and sixties.

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Down

1. Kia 4-door

2. Honda off-roader

3. 12/31, e.g. 4. R.p.m. indicator

6. Ford SUV

7. Hyundai 4-door

8. Mitsubishi SUV

9. Toyota sedan

11. Till bill, perhaps 17. Sign before Virgo

18. Mini ___man

19. Roman 4

24. Temperature control button

26. See 52 across

27. Well known dog

29. Hyundai 4-door

30. Alan Mulally is one 31. Ketchikan state

32. Mini Cooper 2-door

33. Secures, like a seatbelt 34. Eleventh mo. 36. Rolls, for short

Accelerates

RX 300 maker

I know that retail and wholesale car sales tend to hit the doldrums in July and now that I’ve “retired” I can now look at things from the periphery.

I say retired but I seem to be busier than ever with various involvements at the edge of the business. Things

I still go to the NIADA convention and by the time you read this I will have done my stint in Las Vegas in June, rubbing shoulders with the movers and shakers in the used car industry. Some things are as inevitable as the seasons. May God give me the grace to see many more.

INSURANCE AUTO AUCTION S

Saturn roadster

Large amount of money 47. Dodge model

Koenigs___ 50. Seattle state

51. Accounts receivable, briefy

EXPERIENCED & COMPETENT BUYER based in Northern Illinois. Also will travel. Licensed & bonded Illinois dealer for 25 years. Former ASE certified. Aggressive pricing. Call

Which auto auction has the best facility?

Which auto auction has the best customer service?

Which auto auction has the best reconditioning facility?

Which auto auction has the best ringmen?

Which auto auction has the best cafeteria/restaurant?

Which auto auction has the best scheduled event/sales promotions?

Which auto auction has the best run consignment sales?

Which auto auction has the best run online sales?

Which auto auction has the best auctioneers?

Which auction is the most charitable?