Used Car News 8/5/13

August 5, 2013

ON THE WEB:

GM Financial Sees Higher Earnings

General Motors Financial Co. announced earnings of $178 million for the quarter ended June 30, compared to $137 million for the same period last year.

Poll Finds Consumers Support CFPB

A majority of consumers support the Consumer Financial Protection Bureau, according to a new poll commissioned by Americans for Financial Reform and the Center for Responsible Lending.

Voters supported the Consumer Financial Protection Bureau by a 38-point margin after hearing arguments pro and con.

CarMax Set to Add Another Superstore

Auction Family Returns to Roots

CarMax Inc. is currently hiring for approximately 50 positions at the company’s new store in the Sacramento area.

It is CarMax’s 17th store in California.

It is scheduled to open Aug. 31.

By Jeffrey Bellant

The McConkey family has returned to the Seattle auction market, nearly 60 years after opening the first auction in Washington.

DAA Seattle held its grand opening sale on June 25 in Auburn, Wash., after ofcially opening its lanes

earlier this year.

Bob McConkey Jr. said he’s proud to return to the area where his father opened the family’s first auction in 1954. That sale, South Seattle Auto Auction, eventually was sold to GE in 1985 and was later acquired by Manheim. The new sale is a green-

field project that makes the most of its space. The auction runs two lanes with triple blocks, essentially creating six lanes.

“So we can adjust,” he said. “We’re running four consistently and we ran six (during the grand opening sale).

“We can run a good 600-

car sale in two hours time.” Creating this environment allows dealers to scope out six lanes in a smaller space.

The sale is located just 25 miles south of the center of Seattle.

“To be in a position to more directly serve customers in the Puget Sound marContinued on page 3

Edmunds.com Sues Firm for Fake Online Reviews

Edmunds.com is taking a company to court for being an alleged review mill that posts fake tesimonials on a range of popular sites.

Edmunds.com has filed a lawsuit against Texas-based Humankind Design Ltd. for, among other things, fraud and breach of the Edmunds.com membership agreement.

Through its review of every car dealer rating and review submitted to Edmunds.com, the company discovered that Humankind attempted to register over 2,200 fake members on the site and tried to use them to create fraudulent content to sway car shoppers’ opinions of dealers.

Edmunds.com claims that Humankind’s proprietor ex-

pressly promotes that he can create fraudulent reviews on ratings web sites.

He readily admits online: “Does posting reviews...violate Terms of Service...? In general, the review sites state that you must be posting for yourself and not for someone else. So in these cases the answer would be yes.”

Humankind also identifies 15 review sites on which it is prepared to post fake reviews; the list includes Google plus, Yelp, Foursquare, Citysearch and Local.yahoo.com. Edmunds.com is providing each of the listed sites with a copy of its filing to further support online consumers who might otherwise encounter such fraud.

Title Transfer Tiff Causes Mecum to Cancel Sale

By Jenny King

There was no Mecum auction at the Iowa State Fairgrounds this July.

The two-day sale has been a popular annual event in Des Moines for more than 20 years. It draws thousands: sellers, buyers and onlookers. It’s a money-maker. The sale has been televised nationally.

But the summer tradition ended this year with seemingly no notice.

The reason given for its abrupt cancellation by Mecum Auctions Inc. of Walworth, Wis., was the impracticality of title transfers from sellers to Mecum. And, in instances where vehicles did not sell, transferring titles back to owners.

Major Paul Steier of the Iowa Department of Transportation said the law impacting this sale has been on the books for well over 20 years.

The code states that a licensed dealer cannot sell on consignment or broker a car unless the seller - in this case Mecum Auctions - is named on the title. An individual wishing to run his or her car through the auction must sign the vehicle over to the auction company.

If the car does not sell, the auction company signs it back over to the seller.

Cars older than 20 years are exempt.

In addition to increased paper work, this procedure can afect the sale price of a collectible one-owner car, said Mark Andersen, dealer at World of Wheels in Des Moines.

With several names on a title, a car no longer appears as a single-owner vehicle

and might give a buyer hesitation. And it’s likely to affect the sale price.

“Mecum already holds the titles of cars registered for the sale,” said Andersen, a 32-year veteran of the business who also works for Mecum Auctions.

Steier points out that up to 90 percent of the cars at a Mecum sale may be old enough (20 years or more) to be unafected by the code.

“We suggested to Mecum that they could have a separate auction for (younger) cars” subject to the title rule, he said. “They were not interested.”

It is not clear why the law was not enforced prior to 2013. Steier said following the annual Mecum sale in 2010 his department received complaints from auction customers who had not received titles to vehicles they had purchased.

Steier said once the department became aware of business practices at the auction, the DOT “educated and warned Mecum staff of Iowa title and vehicle sales laws.

“This is the reason Mecum auction staf called us on May 13 as they said they had a record in their file indicating Iowa required all titles to be assigned to Mecum prior to the auction,” Steier said.

The DOT spoke with Mecum staf May 13 and on two other occasions.

“I provided e-mails to Mecum staf May 21 outlining Iowa title and vehicle sales laws, including the exemption for selling vehicles 20 years and older without a dealer license,” Steier said.

BETTER TIMES : The offerings at this 2011 Iowa sale drew good interest from

to cancel its Iowa auction this year due to a misunderstanding with the state.

“On May 22 I was sent a note from Mecum staf indicating the auction in Iowa was canceled.”

DAA Seattle

ket is something we have longed to do for years,” McConkey said. “We are excited to expand our reach into Western Washington and to strengthen the relationships we have built in the region.

“We are certain the remarketing community will derive tremendous benefit from the values and best practices of an auction carrying both the McConkey group and ServNet brands in this part of the Northwest.”

McConkey and his business partner, Greg Mahugh, added the

A subsequent conversation between Steier and Frank Mecum did not change the auction company’s decision.

“We asked Mecum prior to the 2012 auction if it was complying with Iowa law,” he said. “Last year we had staf on site to go through the paperwork.”

The DOT is concerned about protecting consumers from fraud, he said.

To date, it’s a lose-lose situation. The state is out rental fees for the fairgrounds; a local car club won’t earn money for helping move cars during the two-day sale – funds it would in turn give to a favorite charity; buyers and sellers are disappointed, and businesses in the Des Moines area miss opportunities to serve locals and tourists.

“I typically get 10 to 15 added sales because of the (Mecum) auction,” said Tom Wong, Tom’s Auto Sales, Des Moines. “It brings business in.”

– Continued From Page 1

new sale to the McConkey Auction Group’s other properties: DAA Northwest in Spokane, Wash., KCI in Kansas City, Mo., and EPI in El Paso, Texas.

DAA Seattle also became the 32nd member of the ServNet network.

Meanwhile, McConkey and Mahugh continue their tradition of major events at their Spokane sales with the recent success of this year’s Rock & Roll Sale.

The event featured a concert by REO Speedwagon. For more on this story, see page 24.

Wong’s lot, with an inventory of 200-plus cars and trucks, is just five blocks from the fairgrounds and people headed there take note of his business.

Wong said he has run some cars through the auction in the past.

“We do a little business in older cars,” said Wong. “In any event, we always go to the auction – it’s unique.”

Andersen of World of Wheels said the Iowa Mecum auction would typically ofer 500 to 600 cars over two days with a sales rate of 60-65 percent.

“Iowa is our smallest state and our second oldest sale after Indianapolis,” said Anderson, citing other Mecum auctions in California, Indiana, Missouri and Texas.

“It’s a good, central location. There is money in here. And people like coming to Des Moines where the pace is slower, more relaxed.”

The cancellation forced Mecum to renegotiate with Discovery Channel, which

televised segments of the sale.

The auction house was committed to a certain number of hours, Andersen said. And Mecum typically provides many on-site services like security that otherwise might tax a community, said Andersen who does logistics for the company.

If there were a rules change in Iowa, does he think Mecum would reconsider the state as a sale venue?

“I’d say there’s a 50-50 chance he (Frank Mecum) would return,” Andersen said.

Mecum Auctions did not return calls made to its headquarters in Wisconsin.

When DOT’s Steier contacted Mecum back in May about his decision to cancel, he was told it was not a good business decision for the company at that time - nor likely in 2014.

“They said it was too much of a burden,” Steier recalls.

“We are reaching out to them.”

Used Cars Outperform New for Asbury Automotive Group

Asbury Automotive Group Inc. reported that used vehicle retail revenues were up 25 percent in the second quarter and gross profit was up 20 percent.

Overall, the dealer group reported adjusted income from continuing operations for the second quarter of $30.4 million, versus income from continuing operations in the second quarter 2012 of $20.9 million.

Net income for the second quarter was $27 million, compared to $21.1 million in the prior year period.

Total revenues increased 16 percent to $1.3 billion, new-vehicle retail revenues were up 15 percent and gross profit was up 6 percent.

Reynolds Updates Forms

Reynolds and Reynolds announced that the Reynolds LAW California F&I Library of documents has been updated to reflect changes in California law and dealer feedback.

Those updates include a new form to support electric vehicle sales, as well as changes to several other documents. The updates were made during an annual review of the LAW California F&I Library by Reynolds and the California New Car Dealers Association (CNCDA).

The Reynolds LAW Electric Vehicle Charging Station Disclosure

NEWS BRIEFS

form was added to the forms library in response to California Assembly Bill 2502 that took efect on July 1. The form is required when consumers finance the purchase of charging station equipment with the purchase of an electric vehicle, in cases where that equipment is not already included by the vehicle manufacturer.

App Upgrade Makes Access Easier

AutoTec announced a new update to AuctionACCESS Mobile, which now allows dealers to manage and upload any AuctionACCESS document all through their Android or iPhone device.

Dealers can now use their phone’s camera to take pictures and upload documents immediately into AuctionACCESS. Dealers can upload up to 220 AuctionACCESS document types all with the click of a button.

AuctionACCESS Mobile is available for free in the iTunes store for iPhone and iPad users and in Google Play for Android users.

In addition to account and document management, dealers can view

updated floor plan availability, expand their auction network, and source inventory from run lists all through their smartphone device.

Avis Buys Payless

Avis Budget Group Inc. has acquired Payless Car Rental, the sixth largest car rental company in North America, for approximately $50 million in cash.

Founded in 1971, Payless brings approximately 120 rental locations to Avis Budget Group’s global network in the United States, Canada, Europe and South America, including many in major airport locations. Similar to

Avis Budget Group, Payless operates with a hybrid model of corporately operated locations along with locations operated by licensees. Unlike the company’s premium Avis brand and mid-tier Budget brand, Payless focuses on the deep-value segment of car rental customers.

Payless generates approximately $80 million in annual revenue. Avis Budget intends to operate Payless as a separate brand from a customer perspective, while realizing significant cost savings as a result of the transaction, primarily from lower vehicle depreciation, reduced fleet interest expense and administrative cost synergies.

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Used Car News is published the first and third Monday of each month. Subscribers: We print advertisements as sent to us by auctions and other advertisers. It is not possible to verify the correctness of listed vehicles in auction ads. Most lists are partial and all lists are subject to last minute changes by auto auctions, so before travelling a long distance for a particular auto auction event, contact the auction by telephone for a fax of vehicles in the sale. Used Car News assumes no guarantees or liabilities concerning the accuracy of any advertisements. All Rights Reserved. Reproduction in any form is prohibited without the written consent of the publisher.

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Site Draws Trade-Ins

By Ted Craig

More dealers have been sourcing vehicles from consumers since wholesale supplies declined, buying more units of the street.

Now a new tool allows them to make these purchases without leaving the ofce.

MaxTradeIn allows consumers the ability to enter vehicle information online and receive multiple bids from dealers during a 48-hour period.

A version called MaxTradeIn DealerDirect allows dealers to use the same technology to make ofers to customers visiting their websites.

MaxTradeIn launched Nov. 1 in Indianapolis, the company’s headquarters. It has now expanded to Louisville, Ky., Columbus, Ohio, and Cincinnati.

All these are similar markets, said MaxTradeIn CEO Justin Bates. This makes the rollout easier.

MaxTradeIn will reach a national scale, Bates said. He hopes that happens soon.

However, the firm is taking a strategic approach to its growth.

An injection of $9.5 million from venture capital firm Elevate Ventures helped speed up the expansion recently.

It helped also in attracting some top talent.

MaxTradeIn recently hired Shawn Schwegman as chief operating ofcer. Schwegman has served as chief marketing ofcer for online question and answer service ChaCha and both chief technology ofcer and vice president of marketing for Internet retailer Overstock.com.

Bates said dealers have taken to the idea quickly. Some stores have sold 16 extra cars in the first month.

The idea for the site came from Peyman Rashid, the company’s president and co-founder.

Rashid used to work at a dealership that would regularly receive calls from consumers who only wanted to make the drive if they knew what they would get for their trade.

The online process saves time for both consumers and the dealers, who no longer have to send staf to auction as often.

Bates said the system works for any dealer, regardless of size or location. He said one dealership 3040 miles out of any major metro area is doing better than some large auto groups.

“What’s really important for the dealership’s success is how they embrace it,” he said.

Canceled Concours Hurts Car Sales

The decision announced earlier this year that there would be no 2013 Glenmoor Gathering at the country club outside Canton, Ohio was bad news for classic car sellers.

largest and most successful auction has been held at the club during the concours for “about eight years.” He said some 55 cars sold at Glenmoor in 2012.

“It’s too late for us to replace it this year,” Lichty said. “We are working on other ideas.”

Considered by some as one of the top concours in the country, the Glenmoor Gathering has been held at and administered by the Glenmoor Country Club.

“They said they were losing money on the event – that they always had a loss,” says Bob Lichty, president of Classic Motorcar Auctions. Lichty, too, stands to lose as his

Classic Motorcar Auctions runs early spring sales in Akron, Ohio and Novi, Mich.

Lichty also maintains a 45- to 50car inventory of collectible cars at his dealership in downtown Canton.

Another DMV Goes Paperless

VINtek, a provider of automotive collateral management, electronic lien and title (ELT) services and direct finance processing, reports that it assisted with the passage of ELT legislation in Nevada.

ELT replaces paper automotive liens with an electronic exchange of data between the department of motor vehicles and automotive lenders.

Assembly Bill 309, signed into law last month, is the first ELT legislation in the country to outsource the building and maintenance of a

cloud-based electronic lien system in a public-private collaboration.

The legislation requires the reimbursement of any initial direct launch costs incurred by the DMV, as well as ongoing DMV ELT program operating costs. Although deadlines have not been set for compliance with the legislation, it is expected that all but the smallest of automotive lenders will ultimately be required to participate in the program.

Currently, 19 states operate ELT programs.

Barlow Dealer Principal, Barlow Automotive Group TO SURVIVE IN THIS BUSINESS TODAY, YOU NEED TO DEPEND ON SOMEONE TO PUT SOME SANITY IN AN INSANE WORLD. ALLY DOES JUST THAT.”

DealerMatch Offers Up Wholesale Opportunities for Dealers

By Jeffrey Bellant

DealerMatch gives car dealers a site that resembles a wholesale version of AutoTrader.com by ofering hundreds of thousands of potential wholesale units.

The DealerMatch website launched in March 2012.

The site allows dealers to see a new universe of potential wholesale units that had previously been, in all respects, invisible.

AutoTrader provides retail consumers with a selection of about 3.5 million cars at any one time.

But on the wholesale side, Manhem.com – including OVE and Simulcast – may ofer 150,000 vehicles at any given time,

“Eighty-five percent of the vehicles available for sale today are not at auction,” said Greg Easterly, DealerMatch president. “They are on dealer lots.

“So what we show are all of the vehicles on dealer lots that are potentially (avail-

able to wholesale).”

The way DealerMatch does it is by partnering with retail advertising companies, like AutoTrader, where dealers have already invested.

So all of the cars on AutoTrader and other retail sites automatically show up on the DealerMatch site. There are about 830,000 units.

DealerMatch’s birth actually came through Manheim.

Easterly worked at AutoConnect, the company that would become AutoTrader, back in the ‘90s.

He later moved to Manheim, where he worked on helping dealers leverage Manheim’s digital marketplace.

When Sandy Schwartz took over as Manheim’s CEO in 2011, he assigned Easterly to a special project with partners of Cox Enterprises and AutoTrader to find ways to make the digital wholesale business grow faster. The result was DealerMatch.

IAG_UCN-aug5.pdf 1 7/15/13 2:41 PM

Continued on page 10

Marc Ray General Sales Manager/Partner, Grogan’s Towne Chrysler Jeep Dodge Ram

“ Marc’s story ... OUR USED CAR BUSINESS IS UP 40%, SO WE CAN’T JUST RELY ON TRADE- INS. WE HAD TO FIND A MORE EFFICIENT WAY TO ACQUIRE INVENTORY.”

SmartAuction®, Ally’s industry-leading wholesale Internet auction tool, helps save you time and money by providing access to a virtual inventory of thousands of vehicles, including vehicles from major national and regional rental car companies. In fact, SmartAuction lists an average of over 1,600 of-rent/feet vehicles representing more than 35 diferent makes every day. No wonder over 8,500 dealers nationwide use SmartAuction to conveniently expand and manage their inventory needs. For more information, visit SmartAuction.biz or call 877-273-5572.

Toyota Starts Acceleration Defense

Federal lawsuits contend that Toyota’s electronic throttle control system was defective and caused vehicles to surge unexpectedly. Plains’ attorneys have deposed Toyota employees, reviewed software code and pored over thousands of docu-

Toyota has denied the allegation and neither the National Highway c Safety Administration nor NASA found evidence of electronic problems. A trial in one of the lead cases is scheduled for November.

The Uno trial will likely focus on why Toyota didn’t have a mechanism to override the accelerator if the gas and brake pedals are pressed simultaneously in Camrys sold in the U.S. The automaker put the brake override system in its European fleet, Mardirossian said.

Toyota said Uno’s vehicle was equipped with a ``state-of-the-art’’ braking system and denied that any defect played a role in her death.

Legal observers said Uno’s attorneys won’t necessarily have to prove what was wrong with the vehicle, but show that the accident could have been prevented with a brake override system. succeeds in convincing a jury it wasn’t human error, that it was attributed to the car, I think they have a strong case,” said Gregory Keating, a law professor at the University of Southern California. “Jurors, as drivers, are likely to believe strongly that cars shouldn’t become uncontrollable in this way.”

Toyota has been successful in

Two years ago, a federal jury in New York found the automaker wasn’t responsible for a 2005 crash that the driver blamed on the floor mats or defects with the electronic

It was nearly four years ago when Uno died. Witnesses told police they saw Uno swerve to avoid hitting an oncoming truck, according

Mardirossian said Uno was a cautious driver and neither floor mats nor driver error were to blame.

Consumers Pay More for Vehicles They Like

The most appealing vehicles tend to remain on dealer lots for shorter periods, command higher transaction prices, and are more likely to create owner loyalty when they are ultimately traded-in, according to the J.D. Power 2013 U.S. Automotive Performance, Execution and Layout (APEAL) Study.

The APEAL Study, which serves as the industry benchmark for newvehicle appeal, has been completely redesigned for 2013. The study, now in its 18th year, has been updated to better measure the appeal of today’s vehicles, particularly with respect to the new technologies and features now being ofered. Owners evaluate their vehicle across 77 attributes, which roll up into an overall APEAL score on a 1,000-point scale.

The study finds that manufacturers are able to charge more for vehicles with higher APEAL. Owners of vehicles with an APEAL score of 100 points or higher than the segment average typically spend at least $1,800 more on their new vehicle than do owners of vehicles with a score of at least 100 points lower than the segment average.

Similarly, vehicles with APEAL scores at least 100 points higher than the segment average remain on dealer lots an average of three

days less than vehicles with scores at least 100 points below the segment average.

“Appealing vehicles are simply good news for both consumers and automakers,” said David Sargent, vice president of global automotive at J.D. Power.

“Even within the same vehicle segment, consumers are willing to spend substantially more on vehicles that they find attractive, provide the performance and utility they are looking for and have wellexecuted interiors. These vehicles also sell more quickly.”

Analyzing some of the results of previous years’ studies highlights the impact of APEAL on customer loyalty.

Nearly two-thirds (64 percent) of owners whose vehicle achieved an APEAL score at least 100 points above the segment average repurchase the same brand the next time they shop for a new vehicle, compared with just 55 percent of those whose vehicle scored at least 100 points below the segment average.

Volkswagen Group received the highest number of segment awards of all corporations included in the study for the Audi Allroad, Porsche Boxster, Porsche Cayenne, Volkswagen GTI and Volkswagen Passat. Chevrolet received the highest

number of segment awards of any brand for the Avalanche, Sonic and Volt models, all of which also received awards in 2012.

Ford and Nissan brands each received two model awards: Ford, for the F-250/F-350 Super Duty and Mustang; Nissan, for the Armada and Murano.

Also receiving awards were the BMW 5 Series; Buick Encore; Dodge Charger; Fiat 500; Honda Odyssey; Kia Soul; Land Rover

The Land Rover Range Rover achieved the highest APEAL score of any model in the industry in 2013, which marks the first time a model outside the large premium car segment has done so.

Porsche is the highest-ranked nameplate for a ninth consecutive year. Ram is the highest-ranked non-premium nameplate.

You may think that you can track all of your Internet customers simply through calls or emails. The truth is most shoppers don’t contact dealers at all. In fact, ONLY 33% OF CAR BUYERS CALL OR EMAIL BEFORE WALKING INTO A

That leaves millions and millions of shoppers who just walk in unannounced. Find out why there’s so much more to the story than just clicks and leads at WeWorkForYou.com/Brian.

Consignment Dealer Kept Cash

A California man was convicted and sentenced for embezzling $200,000 from the sale proceeds of rare and vintage vehicles sold on consignment.

John Calicchio pleaded guilty to 14 separate counts resulting from fraud at his former dealership. Calicchio was sentenced to 16 months in jail, two years of mandatory supervision, and ordered to pay $177,000 restitution.

Calicchio owned and operated EuroMasters Classic Cars in Fountain Valley. Between June 2010 and October 2011, Calicchio entered

into consignment agreements with customers to sell their vintage Porsche vehicles. He sold consignment vehicles in amounts ranging from $25,000 to $47,000 and diverted the proceeds of the sales to his personal and business accounts. The victims were unable to obtain legal titles for their vehicles because the owners holding titles were never paid for the consignment sales. Calicchio closed his business in October 2011 and filed for bankruptcy in an attempt to discharge the debts owed to the owners and purchasers of vehicles he sold on consignment.

Chase is Your Source for Quality, Value and Selection

When you’re searching for a broad selection of clean, pre-owned vehicles your customers want, when and where you want them, look to an industry leader. Look to Chase.

A wide variety of vehicles — from economy to luxury Convenient online and in-lane vehicle availability with on-site Chase remarketers

Choose Chase on:

1The tradename “Subaru Motors Finance” and the Subaru logo are owned/licensed by Subaru of America, Inc. and are licensed to Chase Bank USA, N.A. (”Chase USA”) and JPMorgan Chase Bank, N.A. (“Chase”). Retail/Loan accounts are owned by either Chase or Chase USA and lease accounts are owned by Chase.

2Jaguar, the Jaguar logo, and Jaguar Financial Group are trademarks of Jaguar and any use by JPMorgan Chase Bank, N.A. (“Chase”) is under license. Land Rover, the Land Rover logo, and Land Rover Financial Group are trademarks of Land Rover and any use by Chase is under license. Retail / Loan and lease accounts are owned by Chase.

3The tradename “Mazda Capital Services” as well as the Mazda and Mazda Capital Services logos are owned by Mazda Motor Corporation or its affiliates and are licensed to JPMorgan Chase Bank, N.A. (“Chase”).

Retail / Loan and lease accounts are owned by Chase.

© 2013 JPMorgan Chase Bank, N.A. Member FDIC. All rights reserved. (13-038) 02/13

Dealer Pleads to Floor Plan Fraud

A used-car dealer pleaded guilty to bank fraud as the result of a floor plan scheme.

Daniel Young owned and operated Auto Plaza Inc. in Billings, Mont. Auto Plaza sold used vehicles, along with new and used boats, ATVs, motorcycles, snowmobiles and recreational vehicles.

Two other individuals were coowners and/or partners with Young from 2007 to 2010, but Young was the primary operator of the business. He operated the dealership and handled the day-to-day financial transactions.

Auto Plaza, Inc. maintained dayto-day operations with the assistance of floor planners, including Dealer Services Corp. (now NextGear Capital) and First Interstate Bank (FIB).

In approximately October of 2010, FIB canceled the $500,000 floor plan at the Auto Plaza.

In approximately November 2010, Dealer Services Corp. also canceled its financing at the Auto Plaza.

During the course of the investigation, it was learned that the dealership was out of trust possibly since the day it obtained its floor plan loan with FIB as well as Dealer Services Corp.; the dealership sold vehicles with unpaid liens and failed to provide new owners

titles; the dealership sold vehicles it did not pay for; the dealership sold extended warranties for vehicles that were not actually purchased from the warranty companies; and the dealership sold vehicles/boats it held on consignment and did not pay the owner.

Specifically, on Aug. 1, 2008, in Billings, Young sold a 2005 Mastercraft boat with a lien held by Key Bank N.A., of Brooklyn, Ohio.

When Young sold the boat at the Auto Plaza, he caused the submission of false loan documents to First Interstate Bank, in that the new purchaser was told there was no lien on the boat.

First Interstate Bank believed it was obtaining a first position on the title of the boat and authorized the loan.

The loan was funded by FIB and the Auto Plaza received the money for the boat purchase.

In furtherance of the scheme, Young lied to a personal banker at First Interstate Bank about the payof of the lien to Key Bank N.A. and caused the submission of a false lien release to the Montana Division of Motor Vehicles on behalf of Key Bank for the boat.

Young was sentenced to a term of 18 months in prison and must pay $490,153.43 in restitution.

RETAIL MARKETS

OHIO

Dan Reel, vice president, Reel’s Auto Sales, Orwell, Ohio:

“We’ve been in business 13 years. My brother, Tony, and I own the business.

“We have one location.

“I average about 125 vehicles in inventory. On an average month, we sell about 35 units.

“June was a tough month. It was probably the worst June we’ve had in the last few years.

“I’ve talked to a lot of people through the Ohio Independent Automobile Dealers Association and pretty much everyone has said that about June.

“Eighty percent of our vehicles come from auctions. The other 20 percent come from local purchases and trade-ins. Local purchases would mean of the street or trade-ins.

“We do a little bit of everything. We do buy-here, payhere, subprime and retail, as well.

“We’re probably doing at least 65 percent buy-here, pay-here business. The rest is subprime and retail.

“Last year, we were probably 85 percent buy-here, pay-here. But we signed up with more (subprime) lenders. Because of my afliation with the Ohio IADA, I’ve been able to meet more lenders and meet them through other dealers. It’s really opened my eyes up to the opportunities.

“The average price of our vehicles is probably $6,500.

“Our average model year is 2004, 2005. The average mileage is 110,000. We’ve been trending more toward subprime and retail because there aren’t as many cheaper cars and we’re forced to buy more expensive units.

I can’t do a buy-here, payhere deal with someone who doesn’t have the right payment. I might as well do a (subprime) loan with a lower down payment.

“We carry about 50 percent cars and 50 percent with trucks/SUVs.

“We’re a rural dealership, so we try to stick more with domestics. We carry about 80 percent domestic.

“We also have a full service center. We have three bays and can fit about six

cars in there. We’re also a tire dealer.

“The average reconditioning costs are about $700 per car. That’s crept up from last year when they were probably $550.

“We also dabble in some specialty vehicles and hobby stuf, motorcycles and classic cars.

“We’re starting to focus more on Internet and radio ads.

“I recently sold a 2000 Jeep Cherokee for $6,995. It had 124,000 miles.”

SOUTH CAROLINA

Billy Threadgill, president, Van’s Auto Sales, Florence, S.C.:

“We’ve been in business 38 years. We have one location.

“We stock about 60 cars. That’s comparable to this time last year.

“On average, we’re selling around 20 units per month.

“(Sales) have been level, quite honestly, for the last two or three years.

“We buy some of our vehicles from individuals. We buy some from auctions. We get some new-car

tdealer trades.

“I also own a U-Save Car & Truck Rental franchise, so we have some of our own rental cars that we refurbish and run them back through the used-car lot.

“I will say that (we’ve bought fewer) new trades because there weren’t as many new-car sales.

“We do everything: retail, wholesale, buy-here, payhere and subprime.

“Our largest percentage of sales has been traditional retail. That’s probably 60 to 65 percent of our business. On the wholesale side, we’ll do about five or 10 units per month.

“Our average retail price is probably in the $10,000 to $12,000 range.

“That figure has probably come down as we’ve transitioned into more buy-here, pay-here and subprime.

“We used to be just total traditional retail. At that time, the figure would have been higher.

“Our average mileage is around 80,000. I think that’s been pretty consistent over the past couple of years. But back in 2007 and 2008, we

Compiled by Jeffrey Bellant

used to have a much lower mileage vehicle.

“When cars were plentiful, you could buy a lowermileage car more cheaply than now.

“If you’re looking for a 3-year-old to 8-year-old car with under 100,000 miles, that stuf is bringing all of the money.

“The average model year is in the 2007 to 2008 range.

“We carry about 50 percent cars and 50 percent are SUVs, with about 10 percent of those being trucks.

“We’ve tried to reduce our debt. In fact, I don’t think I presently have a car on floor plan.

“Our inventory is about a 50/50 split between foreign and domestic vehicles.

“We have a service shop. We do mostly our own vehicles and service our customers. Our average reconditioning cost on a car is between $600 and $700.

“We don’t do any advertising. It’s all word-of-mouth and repeat/referral.

“We recently sold a 2011 Toyota Camry with 22,000 miles on it. We sold that for $16,100.”

WHOLESALE MARKETS

MISSISSIPPI

Robert Sullivan, vice president and general manager, Mid-South Auto Auction, Pearl, Miss.:

“We just celebrated our 41st year in business this past April.

“We have six lanes, but we’re currently running five.

“Volumes are probably in the 450-unit to 500-unit range.

“Actually, I think we’re running pretty close to what we were doing last year.

“We might be a little of in volumes, but the conversion rates have been considerably better. Through the spring, we’re converting (more than 20 percent) above last year.

“But there seemed to be a shift (in late July). It looks like the market is coming back. I don’t know what’s been driving that.

“During this time, I was on the block to try and find out what’s going on.

“It just seems that the prices sellers are asking for – which don’t sound unreasonable – appear unreasonable to the buyers, for some

reason.

“For example, guys that are normally high-percentage sellers aren’t selling at that high percentage. When I see a dealer who comes every week who brings 10 cars and sells 10 cars – then he comes in with 10 more and doesn’t sell any, that isn’t the seller’s doing. That has something to do with the market.

“Depending on the time of the year, about 75 percent of our volume is dealer consignment.

“We have some commercial leasing companies, like Wheels, Donlen, and Emkay.

“We also have some local credit unions, banks and subprime lenders.

“We also have a GSA sale on the first Thursday of every month. It’s probably one of the larger GSA sales.

“We’ll probably do 230 or 250 for the July sale and 250 to 275 the following month.

“We also have a sale for the state of Mississippi, federal agencies and a (couple of municipalities).

“We do a powersports/RV sale once a month and we

still do a salvage sale.

“We’re drawing between 285 to 325 dealers in the lanes.

“Our bidders are coming from Mississippi, Arkansas, the eastern half of Louisiana and the western side of Alabama.

“Our average price in the lanes overall is between $6,000 to $8,000. That hasn’t changed that much.”

TEXAS

Charles Furr, general manager, Lubbock Auto Auction, Lubbock, Texas:

“We’re having our 67th anniversary sale through all of August.

“We’re the oldest independent auction in the state of Texas and we’re the second oldest auction in the United States, next to Rawls Auto Auction.

“As part of our anniversary sale, we have a promotion through an independent dealer – Scott George Motors – who will give away a $10,000 cash drawing at the end of the month.

“We have three lanes and we’re running three lanes every week.

Compiled by Jeffrey Bellant

“We’re members of a NCM Twenty Group (for auctions).

“We’re probably right at 230 to 250 cars (running) per week, which is up from a year ago.

“Our consignment is up about 20 percent.

“Conversion rates are right at 50 percent. We’re up about 10 percent compared to last year.

“(The reason for our success) is that we’ve gotten a lot more aggressive this year. I’ve hired a couple of sales people.

“We’ve also spent a lot of money upgrading our sales facility.

“As far as dealers, we’ll draw somewhere around 75 to 100.

“We’re in West Texas, so we’re drawing dealers from a range of 175 to 200 miles. We’ll draw from places (in Texas) like Amarillo, Odessa and Abilene.

“We’ll also draw a number of dealers from the eastern part of New Mexico.

“Most dealers that I hear from are having a good year. Sales are up for them over last year.

“It was pretty tough in 2008 and 2009. Then 2010 was level and 2011, 2012 picked up a little bit.

“We’re known for fleetlease vehicles and repos. That group is our No. 1 consignor. They probably make up 50 percent of our consignment.

“Then we also have newcar dealer trade-ins and independent dealer cars.

“We also sell GM Financial units.

“We don’t have a salvage sale, but we do an in-op/ non-drivable sale on a weekly basis. There we will only have five or 10 units.

My average sale price is higher than most other independents because of the percentage of fleet-lease units we have. So we probably average $8,000 per unit.

“Over the past 60 days, the low-mileage, above-average vehicles are just bringing premium money.

“We’ve had a real good year for the first two quarters.

I don’t see anything that would cause it to take a turn for the worse during the next two quarters.”

COS T OF INCENTIVES

MONTHLY DEALER CONSIGNMENT AVERAGES

Compiled By Jeffrey Bellant

Bands Rock the Auction Block

KEEP ON ROLLING: REO Speedwagon, a band which had mulitple hits in the 1970s and ’80s, poses outside DAA Northwest during the auction’s annual Rock and Roll Sale.

ServNet Auctions cranked up the summer with rock-and-roll sales featuring loads of cars and classic bands from the 1970s and 1980s. DAA Northwest entertained customers and their guests with its annual concert and party featuring REO Speedwagon and house band The Cronkites on July 17th.

The Rock and Roll Sale, DAA’s signature promotional event, began that morning with a fleet/lease and select dealer consignment sale that featured a closed Ford Factory Sale, bikes from Harley-Davidson Financial Services and vehicles from several institutional consignors.

Another event, dubbed “Brasher’s Backstage,” featured sales at Brasher’s Northwest on June 26th and at Brasher’s Portland Auto Auction on June 27th with a combined total of more than 3,000 units. Customers then converged at McMenamin’s Edgefield Amphitheater in Portland for an outdoor concert featuring the Steve Miller Band.

“Brasher’s Backstage was a terrific promotion for both our auctions,” said Mark Melton, general manager at Brasher’s Northwest Auto Auction.

Group Donates to Firefighters

In response to the damage done by Hurricane Sandy last fall, the American Auto Auction Group donated a 15-passenger van to the Friends of Firefighters located in Brooklyn, N.Y.

The Friends of Firefighters is a nonprofit organization started in the aftermath of the Sept. 11 attacks, with their goal being to support active and retired firefighters. New York City firefighters were instrumental in the evacuation and rescue eforts during the storm and the resulting relief eforts; the Friends of Firefighters set up distribution centers to support the firefighters and their families.

A 2010 Ford E-350 15-passenger van was donated to the Friends of Firefighters by the American Auto Auction Group and its member auctions: Auctions in Motion, Badger State Auto Auction, Charleston Auto Auction, Mid-South Auto Auction, Texas Lone Star Auto Auction and the Your Auction Auto Auctions.

Disconnected Jottings From Tony Moorby...

“’Tis better to travel well than to arrive,” a phrase probably falsely attributed to The Buddha. I’ve written before on this subject and I say “stuf and nonsense.” The prospect of travel these days doesn’t fill me with any enthusiasm what-

soever. It would be eminently preferable to be teleported to wherever you wanted to go. I can’t remember whose tagline it was but “Flying the Friendly Skies” holds no such promise any more. The whole experience is surrounded by grouchy people. From the brusque and bristly curbside checker, a check-in agent who refuses to establish any kind of eye contact, to the incongruous strip-down to walk through the security screening as fellow travellers try to hold on to their pants while hopping on one foot to put shoes back

on again. The furrowed brows of the TSA agents add an eerie creepiness while under the gaze of myriad goggle-eyed cameras.

Ingratiating customer service is a thing of the past

Today the thronging masses flop around the gate areas like hippies at Woodstock grabbing belongings to their sides like the Mongol hordes. By charging for luggage these days, the airlines have increased the discomfort quotient as their customers circumvent the charge by hauling everything on board with them.

used to board the planes filling the rear seats first – a very sensible arrangement, in my view. Now boarding is something akin to a rugby scrum with the attendant personal assaults using the aforementioned carry-on weaponry.

of fellow passengers. As a nonsmoker nowadays it’s inconceivable that we ever did that.

as airline stafers consider they’re doing you a favor by turning up in the first place. Most of them act as though it’s their first day on the job and couldn’t organize a knees-up in a nut house!

I don’t know what happened to the recession but airports are like beehives in summer these days. The weekday used to be reserved for the business traveller – someone who knew the wrinkles, how to board early with frequent flyer miles and get an up-grade to first class. Is there such a thing anymore?

If you take Southwest’s view, by not charging for the first piece of luggage, people check them, board airplanes quickly and efciently and Southwest can turn a plane at a gate in 40 minutes, getting an average of an extra flight in for each airplane per day for the entire fleet. I would suggest that the others’ eforts to increase revenues by charging for luggage have reduced efciencies and increased expenses while putting their customers to greater inconvenience.

It wouldn’t be so bad if the overhead compartments allowed sufcient room to stash the increased load. Instead you’re subjected to a raft of abuse from the cabin staf as you try to stow half your worldly goods into something the size of a mailbox.

Once upon a time, airlines

CR R O O S S W D Sponsored by

By Miles Mellor

Kind of warranty

Chevy hybrid 10. Sirius, for one 12. Bottom area of a vehicle 13. Driver’s compartment

Chevy SUV

Motor

Honda minivan

Open style of car seating four or more, popular in the 1920s

24. Keeps going for over 200,000 miles, for example 26. Car, affectionately 28. It seals the deal

29. “Let’s shake on it!” 32. __ and behold 33. Manufactured 35. Mitsubishi sedan 36. Well-liked 37. Apt name for a lawyer? 38. Govt. property

Ford crossover

fller

Hardship

Cayman, for one

Roll of bills

Kia compact

VW minivan 5. Company that owns Jaguar is based here

They measure the miles

8. Owners of the Lexus marque 9. F-150’s

Required to buy a car

Veyron for example

Proclaim

Her partner

Pad

Statistic in a used-car ad

Toyota pickup

One-time Acura model

If you’re already sitting in an aisle seat then you run the gauntlet of luggage left hooks, briefcase batteries and anatomical assaults of all kinds.

I remember back in the ‘80s, Republic Airlines used to fly from Nashville to Detroit using De Havilland DC 9s, an admittedly noisy aircraft even in those days, but the interiors were spacious with art deco styled armchairs – yes, armchairs – spaced adequately to stretch your legs without even touching the seat in front.

The ashtrays were superbly engineered into the rounded arm of the chair and one could luxuriantly smoke at leisure without incurring the wrath

The air hostesses (notice I didn’t say cabin staf ) were attractive, cheerful, attentive and served breakfast, lunch or dinner depending on the time of day.

In contrast, a recent “puddle-jumper” flight on US Air rendered an unkempt, greyhaired harridan who could have easily flown alongside the plane on her broomstick. Instead she shoehorned us into our confinement while we taxied interminably to the runway. Seat configurations now provide something of a health hazard, being so close – I’ve had intimate relations demanding less proximity!

I once spurned Internet meetings as a fad. Now it’s a much-preferred way to get together for me, the closest thing yet to teleporting. Beam me up!

INSURANCE AUTO AUCTION S

Kia minivan

Laughter sound

Lotus car model

Another Lotus

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Used Car Leasing Trumps BHPH for Profits!

For the first time since used car leasing was invented 23 years ago, a side by side comparison has been performed showing the profit diference compared to buy-here, pay-here. Not surprising, considering the tax implications of buy-here, pay-here, the results were clearly in favor of used car leasing.

The analysis was performed by Northland Auto Enterprises, Inc., the original founder of Ren’T’Own® and Lease’T’Own® using 2011 national averages as published by NABD-NCM

The net profit diference is primarily due to Lease’T’Own®’s tax advantages. here, pay-here model profit is only $55,920, which isn’t much to buy cars for the next year compared to Lease’T’Own®’s profit of $224,090.

deducting the cost of bankruptcies and repossessions. For buy-here, pay-here, the national default rate is

there are no repossessions since the dealer remains the titled owner of

Associates. The comparison was conservative, figuring 10 deals per month for 12 months and used the time frame of January thru December.

The results were undeniably in favor of Lease’T’Own®.

A few things to point out in the comparison:

taxes on the entire contract at the end you are paying federal and state income taxes on only the payments received.

the vehicle. There are also federal statute protections to prevent leased cars from being included in bankruptcies. Therefore, the net profit shown for Lease’T’Own® reflects an accurate amount.

This was a very interesting and eye-opening comparison. Contact Northland Auto Enterprises, Inc. at 800-879-3433 to review the analysis in detail. They will also customize the analysis using your specific state’s tax rates rather than an average.

“Customer Service is More Than Just a Department to Us – It’s a Commitment. ” — Deveré Locke, Customer Service Manager

You Are Our Highest Priority .

Customer service is more than just a department at GoldStar GPS. It’s a personal commitment for my team. With over 25 years of experience, my team strives to provide the exceptional service you deserve. We want to make sure you get immediate answers to your questions, personalized support and that you have a great experience with our products and services.

To ensure we are delivering on our commitment to you, we’ve tripled our customer support team. We want to make sure you’ll always reach a real person with real answers, 24/7. We’ve also created a dedicated order desk and a concierge hotline to expedite your requests and needs. Plus, our industryfrst Express Services provides you with nationwide access to our certified installers. So please let me know, how we can help you today?

Let us know at: GoldStarGPS.com/Service

Five Qualities to Look For When Shopping GPS Systems

Increasing numbers of dealers and members of the automotive finance industry are embracing GPS tracking to protect their assets, expand their loan portfolios, reach a broader range of customers, and reduce their risk.

As a result, there is an expanding range of GPS tracking systems and solution providers to choose from.

The question remains: how do you decide which system and provider are right for you?

Which one will deliver measurable results while ensuring a rapid return on your investment?

When comparing systems, you’ll want to look at the technology: is it proven, is it patented, does it have the appropriate certifications and licenses, and will it support your needs?

There’s much more than the technology behind it. When shopping for a GPS tracking system, be sure to look for solution providers that have perfected the basics.

Those basics include:

Making sure the provider has an established track record of proven sales and results; the distribution capacity to deliver the product you need; reponsive, customer-centric service from a dedicated customer account team; leadership that provides

key industry insights to give you an edge; and a commitment to ongoing innovation.

Proof Is in the Sales

You shouldn’t be the first customer to buy the system.

Ask the provider what generation their product is, and how many units they sold last year. This will tell you if the product has been thoroughly road-tested by actual customers, or if it’s made by a fly-by-night company who might not be there to support you a year from now.

Product on Demand

Your GPS tracking system should be able to serve up your vehicle data on demand. The provider should be able to deliver your product on demand as well.

Look for a solution provider that has a warehouse with extensive inventory so that you can get what you need right away.

Ask if the provider offers a dedicated order hotline, same-day shipping as well as national coverage.

The Customer Comes First

Beware the vendor who abandons you after the sale, leaving you to install, manage and troubleshoot your GPS tracking devices all by yourself.

Instead, look for a true solution

provider who works with you to understand your needs before the sale; who offers nationwide professional installation services by certified installers; who is readily available to help you diagnose and remedy any issues that may arise; who trains you on how to use the system; and who provides ongoing support long after installation is done. Ask the provider if they have a dedicated customer service line available 24/7. If they don’t have these basics in place, consider going elsewhere for your GPS vehicle tracking system.

Look for Industry Leadership

Many GPS tracking system providers have minimal experience in the automotive finance industry, which means they have little industry insight to share with their customers. Look for a solution provider who offers specific and deep experience in automotive finance, from the leadership team to the sales team to the customer account representative.

A true solutions provider will add value by connecting you to a wealth of knowledge and best practices — from tips on how to select a GPS tracking system, to white papers on the current and future trends in automotive finance.

Choose a provider who is an industry thought-leader.

Driving Innovation

We come back to the original factor in determining your decision: the technology. Look for a solution provider whose corporate culture embraces innovation. They should be investing significantly in research and development to make sure their products are evolving to meet your rapidly changing needs, while taking advantage of emerging technologies. They should also actively involve you in the process — soliciting your input on the features and functionality you’d like to see in the system.

Find out if the provider bundles their technology into flexible packages designed to meet the varying needs and budgets of their customers.

It’s

All About the Basics

Now you have the five basic qualities to look for when shopping for a GPS vehicle tracking system and provider. To learn more about choosing a GPS tracking solution designed specifically for the automotive finance industry, visit www.GoldStarGPS.com.

Tips for Choosing the Right GPS Fulfillment Option

By Mark Foster – Director of Sales

iMetrik Global

Indirect lenders looking at utilizing payment devices often focus most heavily on the compliance and anticipated ROI aspects of the program. Once up and running however, the focus shifts to managing the inventory and fulfillment side of the program. This article will examine three popular fulfillment options available for finance companies as they attempt to implement and manage device use in their business.

Option one is for the finance company to purchase, stock and then distribute the units. The primary benefit of this method is the lender controls the entire distribution chain. As a deal is approved the finance company can either overnight a device or have their local representative drop one off. This method virtually eliminates adverse selection concerns as the finance company provides a device quickly, free of charge, and with few hassles to the dealer.

This method also presents a few challenges. Finance companies do not handle physical inventories and are generally ill equipped to do so. Over time a lender will end up with a large number of devices.

Keeping track of exactly where all

these devices are becomes a big job. Another consideration is what happens when a dealer has installed a device and the contract is returned.

Many lenders experience a disappearing device at this point as the dealer has little incentive to pull the unit back off the vehicle. Having 10% - 20% of your units disappear makes up a significant cost component of a program.

Since the dealer paid for the device, they own it and are responsible for it until the lender purchases and transfers control during the funding process.

Under this scenario the lender also carries no exposure when a contract is returned. This option can be attractive if your vendor’s coverage levels by market are acceptable.

Local representatives who are incentivized to provide a high level

Option two is to utilize the GPS vendor’s local representative as a distribution resource. When approving a deal the lender simply directs the dealer to contact the appropriate local vendor to obtain a device. Under this method it makes sense to have a dealer pay for a device directly and then be reimbursed with funding proceeds.

In a scenario where the dealer makes the initial purchase, the lender is no longer required to track inventory.

of service will do things like run a device to a dealer immediately in a pinch. Real time device delivery is a very nice option.

The biggest challenge under this method is relying on an outside vendor for a critical step in your process. Even if your vendor’s salespeople prove reliable, what happens when someone is sick or on vacation?

Another consideration is whether or not you have a program that can be managed as you expand into new geographic areas.

Option three is to utilize an online shopping cart. In many cases your GPS vendor will host an online cart to be linked directly from your homepage.

The lender can then refer the dealer to the shopping cart where devices are purchased and overnighted to them directly.

This method eliminates the need for physical inventory, removes human error and availability concerns, and allows the finance company to use devices in any geographic area. Since the dealer knows they will be receiving the device the following day, most finance companies do not experience significant adverse selection.

A shopping cart can provide a very good experience for most lenders. However, as good as an online cart can be, it will never be able to drive a device over to an important dealer at a moments notice.

Lenders focusing on smaller geographic areas may find having physical control over devices beneficial. Larger lenders with needs that span multiple markets may find some of the vendor supplied resources, whether physical or online, more fitting. The best method will ultimately vary based on the needs of each individual finance company operation.

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The Confidence, Freedom and Reliability Your Customers Seek

As a dealer, you understand that purchasing a car is a big decision for your customers. They spend a significant amount of time researching what vehicle best fits their lifestyle and falls within their budget. They rely on the expertise of your staf to guide them to the vehicle that best suits their needs.

Inevitably, there are times that no matter how perfect a vehicle may be, customers occasionally lack the confidence to make the purchase. This happens in part because customers want a car they enjoy but ultimately need a car that’s reliable and worry- free.

By partnering with an industry-leading vehicle service contract provider, you can address your customers’ desire for confidence, freedom and reliability and as a result, sell more cars.

A quality vehicle service contract allows customers to buy with confidence knowing they’re protected from unexpected repair costs with day one, mile one coverage.

A vehicle service contract also provides your customers with the freedom to enjoy their purchase with no worries. The right partner will ofer your customers 24/7 roadside assistance and nationwide service facilities to ensure that they are able to drive anywhere worry-free.

Furthermore, knowing that in the unlikely event of a claim, it will be

handled smoothly and paid promptly. Getting your customers back on the road quickly provides the reliability you both need.

You deserve a partner that is reliable, frees you from unnecessary headaches and gives you the confidence that your customers will be covered.

Customers seek confidence, freedom and reliability when purchasing a car. Be sure that you partner with a vehicle service contract provider that allows you to ofer your customers what they want.

GWC Warranty

For almost 20 years, GWC Warranty has been the industry-leading provider of vehicle service contracts.

We have been a trusted partner to over 20,000 independent and franchise dealers nationwide.

To date GWC has paid over $300 million in claims.

To learn more about how we can ofer you and your customers confidence, freedom and reliability, visit us at GWCwarranty.com.

Sensible: The Home of the Flex Lease

Dependable, consistent, responsive, full spectrum: that is the Sensible way. Sensible Auto Lending & Sensible Auto Leasing is the Home of the FlexLease.

After the crash of the sub-prime residential mortgage industry, money has flowed into the sub-prime auto lending sector at historic levels.

There have been many new players and much more aggressive pricing.

In recent months, the industry has reported that the efects of overheated competition are starting to show in loan performance.

This has caused many companies to scale back their underwriting practices.

Dealerships choose to work with Sensible Auto Lending for many reasons:

underwriting are designed to remain consistent during any financial climate, so a dealer knows what to expect.

approvals. The best time for a dealer to consummate a deal is when the customer is prepared to buy.

By going with Sensible, a dealer another dealer.

fast funding for properly completed deals (sometimes on the same day).

its dealer network and always honors its commitments.

has many non-recourse options in the sub-prime market.

The lending program offers loans with dealer advances primarily of $11,000 or less on any make or mileage of vehicle, regardless of the

The FlexLease program accepts sub-

prime customers with credit scores as low as 425. The program is for vehicles under five years of age with 80,000 miles or less. The advance to the dealer is up to $20,000.

FlexLease offers aggressive loan terms with a low balloon at lease maturity.

This process makes for affordable payments and better quality vehicles for customers who have felt they have limited choices.

Visit us on line at www. sensibleautolending.com under the dealer tab or call us @ 888-696-4140.

Customized Program Provides Capital

All dealers know the biggest hurdle to entry into the buy-here, pay-here industry is the need for capital.

Whether for the purchase of inventory, the financing of customers, or for operational cash flow, capital is number one on every dealer’s list.

Access to capital remains more difficult for the buy-here, pay-here industry. CAR Financial Services continues to support dealers’ short and long term capital need, offering a comprehensive suite of services designed to support buy-here, payhere dealers through the infusion of capital.

Whether you are new to the business or looking to expand your current buy-here, pay-here operations, CAR Financial Services can design a program to meet your needs.

These programs include:

Bulk purchasing of both retail and lease receivables

Purchasing of payment streams to meet short term cash needs

Servicing of portfolios for dealers and finance companies

Floorplans for the buy-here, pay-here industry, including a seamless floorplan to retail program

Point of sale options for buyhere, pay-here dealers using CAR’s capital to establish your portfolio

CAR Financial Services has a proven

track record of over twenty years in the auto finance industry.

They can help you survive these difficult economic times with a customized purchase/service program that meets your needs while providing quality service through a single dealer point of contact located near your dealership.

CAR Financial strives to understand your day-to-day business so that they can structure a program designed to meet your long term goals and objectives.

Whether purchasing a stream of payments, purchasing all or part of your accounts outright, or simply servicing your buy-here, pay-here portfolio, the trusted professionals at CAR Financial are interested in working with you to meet your dealership needs.

CAR Financial operates in forty-five states and is continually evolving to meet the ever changing needs of the buy-here, pay-here market.

Interested in more information on CAR Financial Services’ programs and services?

Go to www.carfinancial.com or call 877-570-8857.

Driven to Make a Differencesm

Looking back 20 years, the sub-prime automotive finance market has seen tremendous change – mostly in the form of lenders closing their doors in the face of economic downturn. Several sub-prime lenders survived the economic perils of recent years but none has emerged stronger than United Auto Credit.

deal these days. With four buying centers spread geographically across the country, United Auto Credit welcomes calls from its dealers –coast to coast. Dealers don’t have to wait just because their local ofce is closed, or their buyer has gone home for the day. Every United Auto Credit buyer is trained to handle the dealers’ needs – whether or not it is their own dealer calling in.

marketing@unitedautocredit.net www.unitedautocredit.net (866)504-2133

A leading force in the sub-prime market, United Auto Credit balances growth with its common sense approach to lending, ensuring longterm delivery of value to over 4,000 dealers in 45 states and counting.

At the same time, the company continues to embrace every technological advantage available to ensure the fastest and most efcient delivery of services possible for its dealers. According to President and CEO Jim Vagim, “We are a very tech-heavy shop with a strong commitment to the human side of our decision making.”

Not many lenders – prime or subprime – ofer dealers the opportunity to call their buyer and re-hash a

Financing $7,000 to $15,000 loans on four to seven year old vehicles for customers with FICO scores from the low 500’s to the low 600’s is the core of United Auto Credit’s business. However, the company has developed programs to finance up to $20,000 for qualified buyers. “We work very hard to understand the needs of our dealers and are constantly reviewing the programs and products we ofer to meet those needs and deliver value”, said Vice President of Sales and Marketing Jourdan St. Germaine.

Make no mistake – United Auto Credit’s plan for long-term growth is based on providing value through the development of industry leading programs and products, providing best-in-class service for its dealers.

The company’s motto is “Driven to Make a Diferencesm.” They’re doing just that, and dealers are taking notice.

We are a national non-prime to near-prime indirect automotive lender dedicated to helping its dealer partners sell more cars, make more money and get their deals funded fast. Combining cutting edge technology and common sense, United Auto Credit programs produce approvals based on customer qualifications rather than FICO driven scoring models.

1.866.504.2133 Email us | marketing@unitedautocredit.net BECOME A DEALER PARTNER TODAY! facebook.com/unitedautocredit

with Network. not remarketers accepted nationwide.

bulk purchasing team. Your selling process is completed and funded in days instead of weeks and all without the aggravation of organizing and shipping loan files from your lender to a separate buyer.

“They do both ends of the spectrum,” said Ron Janbash of Auto Masters in

Spartan Financial Partners ofers the whole package and is a win-win solution for everyone involved.

Autosave and E-Credit Express Products Add to Your Bottom Line

Autosave, the Original 5 year / 100,000 Mile Warranty Company, has over 180 agents throughout the U.S. and Canada that represent and sell our industry leading programs and platforms to dealers .

Cash Back Program” where enrolled sales personnel at Autosave dealers receive a cash reward for their sales on a monthly basis.

Autosave’s sister company E-Credit Express (www.ecreditexpress.com) has

Interested in Buy-Here, Pay-Here? There’s a Better Way - Credit Acceptance!

Uncertainty still looms in today’s economy with 46% of consumers struggling to establish credit or rehabilitate poor credit (Equifax, March 2012). Credit Acceptance, a proven leader in automotive financing since 1972, allows dealers to sell to consumers regardless of their credit history. It has all the benefits of buy-here, payhere, with none of the issues.

An important benefit is an opportunity to improve credit scores through on-time payments, hopefully moving on to traditional sources of financing in the future.

“Nobody would extend me any credit after my bankruptcy – until I found a Credit Acceptance dealer. I never missed a payment and I was able to buy a new car and a house!”

Drive customer? today!

Autosave has added 1 & 3 year warranty terms with additional coverage for air conditioning, electrical and seals and gaskets, making a larger profit center for the dealer.

The competitive pricing structure of these warranty products, E-contracting and the ability to accept online payments from dealers has made Autosave the industry leader in this market.

Claims payments are made electronically to the repair facility.

All Autosave warranty programs include E-contracting, marketing materials, interior signage and outdoor banners for

the dealer to display.

Autosave is the industry leader in dealer sales rewards with the “Dealer

products that make all dealers red flag and OFAC compliant.

With E-Credits GUARANTEED electronic forms compliance in all 50 states and state specific E-forms that include all required initials and signatures –without the costly need for electronic pads or pens.

E-Credit’s electronic forms are 100% compliant in every jurisdiction – with a million dollar guarantee!

E-Credit warrants that each deal submitted through its platform is 100% compliant each time a deal is submitted to a lender – no more deals kicked back – INCREASE YOUR SALES IMMEDIATLEY!

Autosave supports our dealers in all facets of the industry with warranty product training, program training, claims and customer relations. Call 800-684-1175 for more information on these Programs.

Credit Acceptance eliminates the need for the large capital outlays necessary for buy-here, pay-here, providing a business model that maximizes ROI. 24/7 technology approves and processes deals.

Dealers benefit from sales to consumers who otherwise could not obtain financing; from repeat and referral sales; and from responses to credit-challenged advertisements.

“Without the Portfolio Profit from Credit Acceptance, we may not be here today. Business is now back on track and we just surpassed the $2 million mark in Portfolio Profit received from our Credit Acceptance contracts.”

- Lavon Schwartz, owner of KC’s Budget Auto, Kalamazoo, MI

Without Credit Acceptance, consumers are often unable to purchase a reliable vehicle.

-Janet S., Credit Acceptance Consumer

Credit Acceptance provides dealerpartners nationwide with:

leled funding for buy-here, pay-here consumers, giving dealers a cashpositive position and a share in total contract profits. Funding is straightforward and fast.

agement, managing all aspects of the collection process.

partners with money from collections in retirement.

ability to market Guaranteed Credit Approval*, increasing floor trafc, sales, and profits.

Visit www.creditacceptance.com (click on ‘Become a Dealer’ under Dealers) or call 1-800-873-0512.

*Some states prohibit the use of “Guaranteed Credit Approval.” Alternate marketing materials are available.

Maximize Your Floor Planning Dollars

By Garrett Jorewicz, Regional Director NextGear Capital

The automotive industry is unique in that it is one of the few where commercial loans are abundant and relatively easy to qualify for. Whether you are just starting out or looking to shift your business into the next gear, it is extremely likely that you will be able to find the capital you need to stock your dealership.

Floor Plan 101: The Basics

First and foremost, to qualify for a floor plan line of credit, you need to have established credit. Bad credit and “hiccups” on your credit report aren’t always deal-breakers, but they will likely reduce the amount you qualify for and may have an adverse impact on your pricing structure. The good news is that over time, and with good performance, you can eventually overcome these setbacks.

Growing Your Business

If you are looking to grow your business through increasing or adding a floor plan line of credit, there are several other items that will factor into the lending process.

Trade references, business credit, equity, cash, and the overall health of

your business all come into the picture and become increasingly more important in your efort to acquire more floor planning dollars.

Lenders have perfected the art of managing risk. It is crucial that you closely adhere to your lender’s terms and conditions. NSF’s, late curtailments, slow payofs, and bad audits will inevitably prevent you from gaining the additional buying power you need to grow your business.

Additionally, substantial business equity exhibits an enhanced capacity to repay debt. To a floor plan company, inventory that is owned outright is viewed similarly to cash, and is a good indicator of the viability of your operation. The more equity you have, the lower the perceived risk.

Bank Statements

Floor plan companies will primarily look for three things on your bank statements: NSF activity, average balance, and overall cash flow.

Personal Financial Statement

Cash, 401k, IRA, CD’s, bonds, etc. are all desirable elements to have in your portfolio, as long as they are accessible or able to be leveraged for

loans. This is ideal because it demonstrates that you have reserves in place to “weather the storm” should you encounter a few bad months or an unforeseen industry shift.

A word of caution: some dealer principals place an inordinate value on the shares of their dealership within their personal financial statement. Although this may beef up your net worth on paper, this will probably not be taken into consideration by a floor plan lender.

You may also want to avoid having all or a majority of your assets in the form of equities against mortgaged real estate.

Banks have become skeptical of real estate equity given the recent real estate crisis. High dollar homes and commercial properties are slow to move and hard to appraise. Don’t over-estimate your real estate equity on your financial statements. Be realistic. Having minimally leveraged or free and clear real assets should comfort a lender to some extent.

Income Statements

The income statement can be quite revealing, and often is used in part to determine what the true business need

is when it comes to setting a floor plan credit limit. Additionally, this statement shines a spotlight on the overall sophistication of the operation. For instance, if you are generating additional revenues from F & I products and repairs, for instance, that will all be itemized on this statement.

Balance Sheet

Simply put, the less you OWE, and the more you OWN, the lower the credit risk. Again, banks like to lend when the probability of repayment is the highest. High debt combined with minimal assets equals more risk.

All of this ties into the overall viability of your operation. A thriving business should be building equity while reducing debt.

A thriving dealer principal should be building net worth, not acquiring debt to keep their business above water. If your business isn’t building and growing, then you probably shouldn’t be seeking more floor plan dollars.

More flooring won’t turn around a failing business model. Instead, focus on perfecting your operation. However, if your business is building equity and turning a profit, having some additional buying power can surely help you shift to the next gear!

PT SOS: PassTime’s New Tamper Detection System

If you are using or have looked at using GPS tracking or collections technology devices, you have likely thought about tampering. You spend $100-$200 per device to help protect your assets. If a customer does not make a payment, and you cannot get in touch with them, you begin to worry about them tampering with the device or removing it completely.

While, based upon percentages, the likelihood of a customer tampering with the device is very small, when it does happen, it can have a big impact.

Technology providers have attempted to combat this issue with decoy devices or more often, with back-up batteries.

The idea behind a back-up battery is fairly straightforward: if a device is removed from the vehicle, the back-up battery would power the device long enough to send a message that the device had been tampered with and removed.

The lender who receives the message can then take action based upon the fact that the device has been removed. The concept is great...the back-up battery is not.

Generally, back-up batteries have proven to be unreliable in this type of

application. The extreme environmental factors that vehicles are exposed to, variations in high and low temperatures, and the average device being installed for several years have made back-up batteries an inferior solution.

PassTime, acutely aware of the need of a tamper detection, but also aware of the drawbacks of a back-up battery designed a solution that would address both problems.

PT SOS: PassTime’s all new tamper detection system is available now in

battery has been disconnected or the device taken out of the vehicle.

Through advanced technology and an innovate design, PassTime devices include this SOS notification feature without the need for a back-up battery.

The PT SOS feature comes as the newest addition to PassTime’s tamper detection systems.

The SOS notification informs customers when a device has been removed from a vehicle or power removed from the vehicle’s battery.

its Elite and PassTime GPS products.

Using this feature, dealers and lenders can be notified immediately in the event that the device is removed from power, typically indicating that the

Other tamper detection notifications include Starter Tamper which can help identify if the starter wire or starter interrupt functionality of the device has been bypassed or removed.

Additionally, Time Tamper features indicate if the timing is out of sync between the device and the GPS satellite, indicating possible device or battery tampering.

“PassTime has always been dedicated to providing innovative features to our customers. PT SOS is a solution to the tamper problem, without the use of an unreliable back-up battery.

“This solution is revolutionary and is a great value-added benefit to our customers,” stated Chris Macheca, PassTime’s executive vice president of operations.

The PT SOS and tamper detection system, combined with PassTime’s patented Geo-Fence technology, 24/7 live customer care, innovative TowDetection features and high-quality products are a few of the reasons that the company has been an industry leader for more than twenty years.

New Elite and PassTime GPS devices are currently shipping with the PT SOS feature included for no additional charge.

To learn more about PT SOS, PassTime’s new tamper detection feature, contact PassTime at 877-727-7846 or visit us at www.passtimeusa.com.

Christine Hennick Director of Finance CAG Acceptance, Mesa, AZ

Capital and Customer Service from an Industry Professional

Go Financial has created a unique subprime lending program that gives dealers the best of both worlds: upfront profit at the time the car is sold and a share of the payment stream over the life of the loan.

Over a third of today’s car buyers have subprime credit. Dealers can easily pick up incremental sales each month with the right opportunities to ofer those customers.

By handling every step of the financing process from underwriting through collections, Go Dealer Partners have the ability to build a subprime portfolio without the headaches and heavy capital requirements that often stand in their way.

To be able to succeed at subprime finance, you have to be able to understand and predict risk, and know when to balance it with reward.

Go Financial created a proprietary grading system based on its experience financing hundreds of thousands of subprime loans. That credit scoring model became the basis of the GO Portal – an online site that delivers approvals to all customers.

The Portal instantly updates advance rates as the dealer adjusts the

APR, term, price and down payment to best meet their customer’s needs and the dealership’s profit goals.

After receiving the initial advance, each dealer’s loans are pooled together to create a unique portfolio, which GO services at their national call centers. Dealers share in the future revenue from the pool as the payments are collected.

What if a dealer doesn’t want to wait for the payments to be collected? The dealer has the option to tap into pool equity early through GO’s exclusive Cash Out Now option, ofering flexibility with instant liquidity once their pool is closed.

With a financing program that can approve all customers in an easy to use online Portal, GO is creating a pathway to selling more cars.

All loans are non-recourse and GO has no sign-up fees. Go Financial is licensed in 44 states and currently enrolling franchise and independent dealers. For a demonstration, call 888-GO-Financial (888-463-4626) or visit www.gofinancial.com.

Buy-Here, Pay-Here Still Makes Sense

In today’s lending climate where approval and advance rates are at alltime highs, does buy-here, pay-here still make sense?

Absolutely – for older trade-in vehicles, high mileage vehicles and customers who still cannot get approved, it is the only way to ofer financing and provide transportation for the customer. Demand for buy-here, pay-here paper from bulk purchasers is at an all-time high. It is a great time to sell buy-here, pay-here paper. Therefore, it makes sense to continue in the buy-here, payhere business.

Vehicle Acceptance Corporation provides financing to reduce your cash on the street, and we will assist you in bulk sales to any third party. Our servicing pay histories are accurate and well respected by all bulk purchasers, which improves pricing in many cases. Call VAC to learn more about why buy-here, pay-here with our assistance makes a lot of sense. Contact us at http:// VACorp.com/UCN or 888-573-4248.

SUBPRIME LOANS REPRESENT OVER 33% OF VEHICLES SOLD TODAY.

How much of that very lucrative slice of the sales pie are you getting?

Go Financial has created a subprime lending program that puts you in control. It’s an end-to-end solution that provides up-front profit and future cash flow streams. And best of all, every loan is purchased non-recourse and there are absolutely no sign-up fees. Take the headaches out of making your subprime finance deals work. Sell more cars. Make more money.

Visit gofinancial.com/news for the whole story or call us at 888-GOFINANCIAL for a quick demo.

How Could I Have Known?

How could I have known the car business would be such a burden on my life? When the economy took a dive, it jeopardized everything I had worked so hard for. We lost a lot of customers and banks, and any proft I hoped to make was disappearing before my eyes. We were selling 50 cars a month and just getting by. I was working long hours and long days, with nothing to show for it.

Ten I stumbled upon Jimmy Vee & Travis Miller and Rich Dealers®. It’s hard to put into words what they’ve done for my business. It’s been a total transformation. Us car guys have vendors calling everyday promising us the world. But, in this case, everything my Rich Dealers® Advisor said was real . And I’ve made more my first year with Rich Dealers ® than ever before.

I was lucky enough to attend a Rich Dealers® meeting about a week after I joined, and that made all the diference. Tere were some wild ideas were fying around; they were talking about things nobody else was talking about. It seemed to be the opposite of what most people were telling me I should do—for example, how to price my cars, where to list my cars, and even what cars to buy. It was anything but “common knowledge” and I became skeptical. How could these two guys know something nobody else did?

But I fgured I had nothing to lose and everything to gain by following their advice, and speaking to the other dealers in the group made me feel even more comfortable. So I jumped in full steam! I did what they told me to do—ran the ad they gave me, priced my cars using their strategy (higher, much higher than everyone else) and made simple, yet important, changes to the way we positioned our dealership to customers. Tey showed me how to command the actions of potential buyers by speaking to their subconscious mind, and about being a solutions provider instead of a product pusher

What happened next? Well, I’m still in shock. Everything they said was right on the money. It was a complete and rapid reinvention of my business.

“Hold on tight” because it’s the ride of your life. Our sales have increased 45%, and they’re growing everyday. I’m very, very pleased Te

energy in the sales department is through the roof. Our trafc has more than doubled. Business is good. Very good

Joining Rich Dealers® is the best business move I’ve made. I’ve been a car guy since I was 14 and Rich Dealers® has put the fun back in the business. It’s exciting to come to work again! Previously, we were lucky to have grosses around $2,600 a car. Now we are consistently around $3,600 a car… and they’re still rising. We’ve changed our whole pricing structure and now we’re selling more cars than we ever sold It goes against everything I used to believe about this business! And I love it.

Te best part is, they convinced me to slow down and enjoy life more. Now I only work three and a half days a week, and I’m making more than I ever have before! Te general consensus among car guys is you can’t make more money and sell more cars if you spend less time working. I can tell you that’s just not true.

When I frst joined, I assumed this was only about marketing. Boy, was I wrong. I had no idea I was going to get so much information about how to run the business–– like how to raise my gross profts, buy the right kind of cars, improve my processes, expand my leadership capabilities and so much more.

It’s fun to double your business, take more dough home and spend more time with your family. Jimmy & Travis call that ESP® Enjoyable, Simple & Prosperous. It’s the ultimate goal of being a Rich Dealer® And it’s real, very real

And trying Rich Dealers® is painless. Tere’s no contract and no pressure. And for what this costs, for the little bit of investment, you’ve got nothing to lose. Heck, take it out of your petty cash if you have to. You’ve tried everything else, haven’t you???

How does it work? Jim & Travis say, “Stop selling cars, start selling solutions.” And they’re right! Tey recognized what so many others have missed: only a tiny part of the population are actively, consciously shopping

for a car, while he vast majority of people are sitting it out because some problem is keeping them from what they really want. And I can help solve those problems! And you can, too.

A lot of dealers ask me what I’m doing to get the results I’m getting and where they should begin? Te frst step is to have Jim & Travis create a FREE Trafc Scale Report customized just for you and your store.

What’s a Trafc Scale Report? It’s an analysis of your trafc to see how it compares in quality, and quantity, to your direct competitors, and to other dealerships around the country. What you’ll discover about your market, and how much untapped opportunity there is available for you to take advantage of, will shock you It would not be a stretch to suggest that this info could lead to an extra $1 million in additional net proft over the course of time.

Tell them “Rob” sent you and you’ll also receive a complimentary copy of their audio book, Invasion of the Proft Snatchers. Is the book a bit controversial? Yes. But you’ll know for sure these guys are the real deal before you get through the frst chapter.

Ready to experience results like I have? Request your FREE Trafc Scale Report and get your FREE audio book, Invasion of the Proft Snatchers, by visiting www.TrafcScale.com and use coupon code UCN1308, or call 888-256-8183.