Creditors Worry About Compliance, Tech Compliance, technology adoption and cost reduction strategies were each cited as critical factors to business success for auto creditors in BillingTree’s 2014 Auto Finance Business Strategy and Technology Survey.
Thieves Target Hondas
The Honda Accord was the most stolen vehicle in the nation last year, according to the National Insurance Crime Bureau.
Gulf States Toyota Recalls Tundras
Gulf States Toyota Inc. is recalling 16,249 model year 2013-14 Toyota Tundra vehicles modified by GST to be equipped with a combination of non-Toyota-brand 20-inch alloy wheels and chrome plated lug nuts.
Chevy Impala Tops List of Comfortable Cars
Kelley Blue Book editors named the Chevrolet Impala as 2014’s Most Comfortable Car.
CFPB Fines Finance Company for Bad Info
WATCHDOG: Richard Cordray, director of the Consumer Financial Protection
Investors Financial Services Group for providing inaccurate data to credit reporting
By Jeffrey Bellant
The Consumer Financial Protection Bureau sent the used-car industry a message when it fined a Texasbased finance company $2.75 million.
The announcement stated the creditor failed to fix known flaws in a computer system that was providing inaccurate information to credit reporting agencies.
The CFPB announced the fine, along with other actions, against First Investors Financial Services Group Inc. Aug 20. The agency accused First Investors of systematically providing information to credit agencies that it knew was inaccurate.
Cox Enterprises announced it will roll more than 20 leading wholesale and retail automotive brands – including Manheim, AutoTrader.com and Kelley Blue Book – into one division called Cox Automotive.
Cox Automotive companies have relationships with more than 40,000 dealers, as well as most major automobile manufacturers. Sandy Schwartz, who until now has held the dual roles of president of Manheim and AutoTrader Group, will serve as president of Cox Automotive.
“Cox is the industry leader in marketing and remarketing vehicles, and this move reinforces our company’s confidence in the global automotive industry,” said Cox En-
“First Investors showed careless disregard for its customers’ financial lives by knowingly distorting their credit profiles for years,”
Continued on page 15
The bureau claims the flaws potentially harmed tens of thousands of customers.
Cox Places Manheim, AutoTrader.com Under One Umbrella
terprises CEO John Dyer. “Over the past several years, we have invested in diferent segments of our auto business, from dealer services to our top-rated consumer brands. Under Sandy’s leadership, our wholesale and retail automotive brands have thrived and we are committed to leveraging opportunities to better serve and add value to our customers.”
While Cox Automotive will be the banner company for the diverse portfolio of global automotive businesses, each business will retain its individual brand. The newly formed Cox Automotive businesses will be organized around five core areas providing both domestic and global presence.
Photo by The Associated Press
Millennials Research Cars Online, Not with Social Media
By Jenny King
DETROIT - Millennials: these are young people born between 1980 and 2000. Also known as generation Y, their buying habits are their own.
And according to the third annual AutoTrader’s Automotive Buyer Influence study, this population segment of some 73-million will have increasing influence on how cars are sold in the future.
Auto dealers take note. These young consumers surpass older buyers in their use of the Internet for car shopping. They make greater use of smart phones and tablets than other consumers. They presently account for 12 percent of new-car sales and 18 percent of usedcar deliveries.
They may spend more time researching (17.6 hours vs. 15.5 hours for average buyers), but when they get to a dealership, 70 percent know what they want.
This generation likes cars but 70 percent are undecided when they begin to look for a vehicle, Isabelle Helms, AutoTrader vice president for research and market intelligence told members of the Automotive Press Association here in August.
“The opportunity to influence them is online,” Helms said. Traditional media are losing ground, particularly with younger buyers.
“It isn’t helpful,” she said.
“It may not be the most efcient way to get answers.”
Millennials are more likely to get the latest information from their phones or pads before coming into a dealership.
They are going to thirdparty sources like AutoTrader, Kelley Blue Book or Edmunds.com for answers.
They need more information and time before they decide, Helms said. Give it to them.
“It is important (for dealers) to invest in the mobile
experience,” Helms said, “and to do it right or not at all.”
Mobile devices are more flexible than computers.
When researching, millennials will visit 10 websites, according to AutoTrader’s 2014 survey.
They are looking for information on trades, vehicle prices, which cars are available and how cars compare with one another.
“Only five percent of these buyers use social sites in their research,” Helms said.
Social media is good for building relationships.
Millennials may seem late to the market, she said. They tend to have postponed marriage and families because they were in school longer; they may carry heavy school loan debt; they include avid urbanizers though when they marry, they may head for the suburbs.
“They like to live big on small,” Helms said. They value experience over goods. When they get to the
dealership, they expect an Apple store experience, Helms said: a test drive and information about a car’s technology.
The dealership experience should reinforce decisions made online, she said.
Photo by Jenny King
TRACKING MILLENNIALS: Isabelle Helms of AutoTrader talked about the influence of younger car shoppers during a press event in Detroit recently.
Car-Mart Sells for Less America’s Car-Mart Inc. reported net income of $7.3 million on revenues of $127 million in its latest quarter.
Retail unit sales increased 7.9 percent to 11,482 from 10,643 for the prior year quarter with productivity flat at 28.4 retail units sold per store per month.
Average retail sales price decreased $372 to $9,464 from the prior year quarter and decreased $321 from the prior quarter.
Collections as a percentage of average finance receivables increased to 14.1 percent from 13.8 percent for the prior year quarter.
Net charge-ofs as a percent of average finance receivables of 6.3 percent, up slightly from 6.2 percent for prior year quarter.
Provision for credit losses of 24.6 percent of sales vs. 24.3 percent for prior year quarter.
IAA Expands in Nebraska
Insurance Auto Auctions Inc. announced the expansion of its IAA Omaha branch located in Springfield, Neb., approximately 7.5 miles from Omaha.
The expansion adds approximately 11 acres, providing access to increased inventory and greater conveniences to both buyers and sellers in addition to meeting the demands
NEWS BRIEFS
for extensive Catastrophe (CAT) services.
The IAA Omaha branch will now have approximately 30 total acres dedicated to Omaha and the surrounding regions.
The facility features covered storage for specialty vehicles and dual auction lanes for Run and Drive vehicles.
The expansion is driven by growing volume and the continued need for CAT services in the wake of natural disasters in the area such as tornadoes, severe storms, hail and floods.
Transporter Offers New Tool
Ready Auto Transport has launched a new electronic gate pass process nationwide at all Manheim locations to improve vehicle delivery time for buyers at the auction.
Ready Auto Transport electronically delivers eGate Passes for all customer vehicles directly to its 6,500-member qualified carrier network.
Before launching nationwide, Ready Auto Transport and Man-
heim successfully released more than 3,000 vehicles without a single issue in a pilot program at Manheim Ohio, Manheim Detroit, Manheim Pittsburgh and Manheim Statesville. With the new process, Ready Auto Transport attaches the eGate Pass to the carrier’s Transport Order in 1Dispatch, Ready Auto Transport’s platform that carriers use to dispatch vehicles and manage assigned loads. Only carriers assigned to vehicles have access to print the pass.
Alliance Auto Auction Adds Sale
Alliance Auto Auction - Denver recently hosted a groundbreak-
ing sale showcasing the plan for over $1 million in renovations and facility upgrades.
The auction facility was acquired and initiated into the Alliance family of auctions in March. Dealer-only sales are held weekly every Friday.
The multi-phased renovation plans include enhancing the exterior with improved lighting, fencing and paved lots; increasing convenience with better access between buildings and adding a new detail services area; as well as giving the interior a fresh new look.
Additionally, some key personnel and resources from Texas will be relocated to Colorado.
Published By General Media LLC
USED CAR NEWS (ISSN 1555-7413) is published at 24114 Harper, St. Clair Shores, MI 48080
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
Contributing Writers: Ed Fitzgerald, Jenny King, Sheila McGrath
Columnist: Tony Moorby
Advertising:
Shannon Colby, Account Manager
Megan Frump, Account Manager
Marie Hingst, Account Manager
Circulation: Helen Thomas
Production:
Josie Godlewski, Media Manager Tim Montie, Graphic Designer
Used Car News is published the first and third Monday of each month. Subscribers: We print advertisements as sent to us by auctions and other advertisers. It is not possible to verify the correctness of listed vehicles in auction ads. Most lists are partial and all lists are subject to last minute changes by auto auctions, so before travelling a long distance for a particular auto auction event, contact the auction by telephone for a fax of vehicles in the sale. Used Car News assumes no guarantees or liabilities concerning the accuracy of any advertisements. All Rights Reserved. Reproduction in any form is prohibited without the written consent of the publisher.
Please submit clear, legible copy. Payments from first time advertisers must accompany the insertion order. Distribution is guaranteed by U.S. Postal Carriers. The advertising reservation deadline is 5:00 p.m. Friday, 10 days prior to the issue date. Camera ready ads must be received by noon on Monday prior to the issue date.
Myles Mellor
NHTSA Unveils Free Online Recall Search Tool
WASHINGTON – On Aug. 20, the U.S. Department of Transportation’s National Highway Trafc Safety Administration (NHTSA) unveiled a new, free, online search tool people can use to find out if a vehicle is directly impacted by a recall.
The new tool is available on www.safercar.gov/vinlookup and provides consumers and others with a quick and easy way to identify uncompleted recalls by entering a Vehicle Identification Number (VIN).
All major light vehicle and motorcycle brands can be searched.
“Safety is our highest priority, and an informed consumer is one of our strongest allies in ensuring recalled vehicles are repaired,” said U.S. Transportation Secretary Anthony Foxx.
“Starting today car owners, shoppers, and renters can find out if a specific vehicle has a safety defect that needs to be fixed – using our free online tool.”
Consumers can find their vehicle identification number by looking at the dashboard on the driver’s side of the vehicle, or on the driver’s side door on the door post where the door latches when it is closed.
After entering the VIN number into the field, results will appear if the consumer has an open recall on their vehicle, and if there are none, owners will see “No Open Recalls.”
In response to the National Highway Trafc Safety Administration’s new Vehicle Identification Number (VIN) look-up tool for vehicle recall information, Forrest McConnell, chair-
Also efective Aug. 20, under the new NHTSA mandate, all major light vehicle and motorcycle manufacturers are required to provide VIN search capability for uncompleted recalls on their own websites. This data must be updated at least weekly. NHTSA’s new VIN look-up tool directly relies on information from all major automakers, and regularly updated information from the automakers is critical to the efcacy of the search tool.
man of the National Automobile Dealers Association and a Honda/Acura dealer in Montgomery, Ala., issued the following statement:
“The new online look-up tool will help new-car dealerships identify whether a used car or light truck has an unremedied safety recall prior to making a purchase
Historically, less than 70 percent of all recalled vehicles get fixed. Our goal is to see 100 percent of those vehicles remedied.”
NHTSA is working with the NADA to help ensure that franchise dealerships across the United States become aware of and understand how to use the new
theirVINs, they can get the most up-to-date information on open and future recalls directly from the manufacturer.
“The current recall system is based on the manufacturer’s relationship with its franchise dealers and vehicle owners and does not take used auto retailers into
“Safety is our highest priority, and an informed consumer is one of our strongest allies in ensuring recalled vehicles are repaired.”
or taking in a trade. It will also help dealerships to determine whether used vehicles in inventory are under recall and to provide usedcar shoppers with useful safety recall information.
“To improve vehicle safety, NADA urges every car owner who receives a recall notice from a manufacturer to visit his or her local new-car dealership to have the vehicle inspected, and if necessary, fixed at no charge.
Can someone, for the love of profitability, tell me how to turn more of my subprime apps into cash?
VIN search tool.
In related news, CarMax Inc. unveiled a strategy to promote consumers to check for open recalls.
The used-car superstore chain will notify all customers prior to purchasing any vehicle from CarMax about the importance of registering their vehicle with the manufacturer and having any open recalls fixed immediately.
When customers register
Anthony Foxx
account,” the company said in a statement. “Under the current system, manufacturers direct recall communications to the vehicle owner of record, not used auto retailers like CarMax. Unlike the manufacturer franchise dealers who are intended under the system to fix recalls, independent used auto retailers, like CarMax, are not provided the authority to complete recall repairs and close out recalls.”
NYC Extends Dealer Deadline
By Jeffrey Bellant
The New York City Department of Consumer Afairs will give 200 used-car dealers until Oct. 29 to respond to subpoenas regarding the sale of vehicles under open recalls.
The DCA is investigating used-car dealers over allegedly selling cars with open recalls.
The city extended the original Sept. 4 deadline to respond to the subpoenas, but the extension does not waive the dealers’ obligations, or the department’s rights to seek remedies or relief for any violations of those remedies.
The New York Independent Automobile Dealers Association, on behalf of the city’s used-car dealers, has scheduled a Sept. 8 meeting with the DCA to discuss the issue.
In July, the DCA issued the subpoenas to seek “records of which recalled cars were sold unrepaired and to whom,” according to DCA Commissioner Julie Menin.
“More cars were recalled in 2014 than any other year on record,” Menin said in a press release.
“We’re going to find out how many cars have been sold in the city and demand that dealers fix them.”
Subpoenas were issued to dealerships mostly at random, although
some dealers were selected for attention because they had received a past violation for selling a vehicle that was not certified as roadworthy or had been the subject of consumer complaints.
The New York IADA questions the DCA’s actions.
“Currently, no state or federal law explicitly prohibits dealers from selling used vehicles with open recalls,” said Executive Director Paula Frendel.
“Attempts to modify existing laws that require dealers to repair new vehicles with recalls to include used vehicles have, to date, not succeeded.”
She added New York City laws also do not expressly prohibit the sale of a used vehicle with an open recall.
Frendel encourages local dealers to contact the association to get involved.
But dealers in other cities and states ought to be concerned.
Menin said she hopes that other parts of the country will take the DCA’s lead, since “unsafe cars from other states” also drive in New York City.
“We want to call attention to this issue and work to ensure the problem is addressed at a federal and state level,” Menin said.
PAGE 8 - DEALERS: THE NEXT GENERATION
Next Generation Dealers Learn the Family Trade
By Jeffrey Bellant
One thing harder than opening a used-car dealership is being the child following in the footsteps of a car dealer.
But if done right, the business and relationship can grow stronger.
Often, children of dealers start out young and learn the business early. Steve and Madalene Daniell started Daniell Motors in Hattiesburg, Miss., in 1978, and their son Breck was involved from a young age.
“My dad believes in a strong work ethic, so when I was 7 or 8 years old he would take me back to the detail shop and say that he’d pay me $1 an hour to help,” Breck said. “Well, I wasn’t worth $1 an hour then but he wanted me to see what it meant to earn money.”
By the time Breck was 12, he was working every summer in the dealership.
“I worked like that, really, until I graduated from
college,” he said.
But sometimes the path to entering the family business is diferent.
Cory Sears, co-owner with his father, Don, of Sears Superb Auto Sales, Corbin, Ky., actually started before his dad, who had worked on the franchise side for years.
Don and Cory knew that a new business couldn’t support both of them to start. So
Cory opened the dealership and slowly grew the business for several years before his dad came on board.
“Dad’s got 20 to 25 years in the car business,” Cory said.
“So, evenings he was teaching me and telling me, ‘you have to check on this and look at this.’
Chris Martin, president of E-Z Auto in Fayetteville, N.C., got into the business late.
Starting of in banking, Martin was happily working at a company he loved. But he said the opportunity to work with his father, Buddy, is what drew him to the car business.
“I was also excited about the potential we both saw in our business model,” Martin said. “So I knew that if dad was patient with me – and he always was – I would continue to learn and grow
as we built this business together.”
His father was part of the legendary racing team of Sox & Martin, which might seem that it would make it harder to follow in those footsteps. But Chris said that wasn’t the case. His dad isn’t boastful and never talked much about his racing days. Chris said the stories he’s heard about
Continued on page 10
Photo Courtesy of Daniell Motors
FATHER AND SON: Breck (left) and Steve Daniell at Daniell Motors in Hattiesburg, Miss., a dealership started by Steve and his wife Madalene. Breck went to college to study education but ultimately joined the family business.
Mark A. Wimsatt, owner of Jay’s Auto Sales in Louisville, Kentucky, says NextGear Capital demonstrates leadership in the auto remarketing industry by partnering with their dealers to make doing business easier and more proftable.
“The relationship with NextGear Capital has been awesome. They take care of all the details for my foor planning needs, everything from title work to funding the auctions and more. NextGear Capital is truly changing the way dealerships should do business.”
Listen to more of what Mark and other dealers have to say at nextgearcapital.com/why/leadership
“I’ll buy a car with an accident, but I need to know how severe it was. CARFAX Reports help me separate cars with minor damage from the wrecks.”
- David Askew Dick Scott Chrysler Dodge Jeep Plymouth, MI
State Charges Clocking Couple
The California Department of Motor Vehicles (DMV) announced that a DMV Investigations case has led to criminal charges against an Antioch car dealer for odometer tampering.
California Car Sales owner
George Guevara was charged with 79 criminal counts including conspiracy to commit grand theft, odometer tampering, and theft by false pretenses. He made an agreement with the
Contra Costa District Attorney’s Office to self-surrender to the court.
In April, DMV investigators con-
ducted an undercover operation where an agent purchased a minivan with an odometer which had been rolled back nearly 150,000 miles. Investigators determined over 100 vehicles sold by Guevara’s lot had their odometers altered. The case was then sent to the Contra Costa District Attorney’s office for review and filing. Guevara is being held on $1,018,000 bail. His wife, Danielle Guevara is also charged with similar criminal counts and self–surrendered to the court.
Auction Pledges to Build House
Charleston Auto Auction presented Habitat for Humanity with a check for $5,000 Aug. 1 and made a commitment to help build a house.
Bryant Knepp, executive director of Habitat for Humanity of Berkeley County, was on site to accept. The donation and com-
mitment was presented in front of 500 dealers prior to the start of the Friday sale.
Laura Taylor, general manager of Charleston Auto Auction, also challenged everyone in attendance to help support Habitat for Humanity via monetary donations or time commitments.
Auto Defaults Remain Steady
Data through July, released by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed a slight decline in default rates.
The national composite posted 1.01 percent in July, down one basis point from last month.
The composite’s default rate remains the lowest in over 10 years.
Auto saw its rate remain unchanged at 0.96 percent and is only four basis points above its historical low.
In July 2013, the index level for auto loans was 1.03.
After nine consecutive months of declines, the first mortgage default rate fell to 0.88 percent.
The bank card rate declined 16 basis points to 2.86 percent.
“Consumer credit default rates dipped slightly below last month’s rate,” said David M. Blitzer, managing director and chairman of the index committee for S&P Dow Jones Indices.
“At just above one percent, default rates remain at historical lows. Mortgage default rates have been trending down while Auto and Bank Card are a bit higher than their historical lows set in
April and March.
Driven by mortgages, household debt decreased in the second quarter of 2014.
“Non-housing debt rose slightly in the second quarter.
“In the latest Federal Reserve survey of lending standards, a small portion of banks reported some easing of standards while most banks reported no change.”
Los Angeles dropped to its lowest default rate of 0.66 percent.
Dallas saw its default rate decline by seven basis points and is only a few basis points away from its historical low set in May 2014.
Chicago and Miami are at their lowest default rates since 2006.
Miami continues to maintain the highest default rate of 1.51 percent while Los Angeles posted the lowest default rate of 0.66 percent.
All five cities – Chicago, Dallas, Los Angeles, Miami and New York – remain below default rates seen a year ago.”
S&P Dow Jones Indices LLC, a part of McGraw Hill Financial, is the world’s largest, global resource for index-based concepts, data and research.
Experian is a global information services company, providing data and analytical tools
Anniversary Event
September 25, 2014
Anniversary fun auction featuring Northwest events and a chance to
WIN UP TO $10,000
Join us as we celebrate Brasher’s Auctions 65 years as leaders in automotive remarketing. We will feature up to 1200 units this week with 350+ repo and feet vehicles. Our annual Northwest Events and Getaways Fun Auction will follow the main auction. Use your auction rewards points to bid on over 20 items including tickets and packages to: Seattle Seahawks, the Civil War, Elton John, Jimmy Bufet, Fleetwood Mac, Te Zac Brown Band, Sunriver Ski Vacations, Great Wolf Lodge and more!
Multi-State Event Sets Agenda
Industry speakers, including state ofcials and regulators, join dozens of exhibitors for the annual MidAtlantic Regional Independent Automobile Dealers Associations conference at the Lowes Hotel Philadelphia on Sept. 13-14.
The conference, which brings together five state IADAs – Pennsylvania, New York, New Jersey, Maryland and Delaware – brings experts from various areas of the car business for education and training.
Trainers and experts will hold session in areas including: sales training; buy-here, pay-here sales; website development and online marketing; taxes, accounting and profit generation; floor plan financing; retail and installment sale financing; regulatory compliance and legal issues; auctions; vehicle valuations and history reports; and health insurance issues.
The third annual MARIADA also will feature ofcials from Pennsylvania and an attorney who will speak on regulatory issues in New Jersey.
Pennsylvania speakers include officials in the Pennsylvania Attorney General’s ofce and Department of Transportation and Department of Banking and Securities.
The sessions involving the regulators will address everything from
audits and examinations to enforcement issues, which have been key concerns for dealers in today’s environment that’s increasingly focused on compliance.
State associations making up MARIADA are scheduled to hold their annual board meetings during the show.
An exhibit hall features networking events that will allow dealers to meet with vendors and learn about diferent products and services.
One keynote speaker will be Pennsylvania native Stephanie Jallen , a U.S. Paralympics double bronze medal winner at the 2014 Winter Olympics in Sochi, Russia.
At press time, candidates for Congress and Governor in Pennsylvania had been invited to speak, though they were not confirmed.
CFPB
– Continued from page 1
said CFPB Director Richard Cordray. “Companies cannot pass the buck by blaming a computer system or vendor for their mistakes. Today’s action sends a signal that the CFPB will hold companies accountable for sending inaccurate information to credit reporting agencies.”
The CFPB investigation found that First Investors furnished inaccurate information about its customers to credit reporting agencies for at least three years. When First Investors discovered the problem in April 2011, it notified the vendor but did nothing more. The company did not replace the system or take any steps to correct the inaccurate information it had supplied, according to the CFPB.
“There were all kinds of inaccuracies reported by First Investors,” Cordray said. “The company frequently understated how much consumers were paying toward their debt. It overstated the amount past due. It misreported the dates when consumers became delinquent. And it inflated the number of delinquent payments. In one case, it reported that a consumer was delinquent 11 times when in fact that consumer had only been delinquent twice.”
Specifically, the CFPB found that First Investors was providing dis-
torted information to the credit reporting agencies regarding how its customers were performing on their accounts. The incorrect information First Investors reported included: wrong payments and overdue amounts; distorted dates: inflated delinquencies: and mischaracterization of vehicle surrender.
Jack Tracey, executive director of the National Automotive Finance Association, said the penalty against the creditor was unfortunate as the firm probably felt the credit agency reporting was being handled properly. But he said finance companies should avoid short cuts that save money initially, while being costly later on.
Shaun Petersen, general counsel for the National Independent Automobile Dealers Association, said a few points emerged from the CFPB’s announcement.
“One thing that stood out is there was no specific consumer injury that the bureau pointed to,” he said. It shows Petersen that the bureau has no qualms about penalizing a company even if no specific harm is identified.
Petersen said it also shows that companies under the CFPB’s jurisdiction can be targeted even if problems result from a vendor.
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1Subaru, the Subaru logo, and Subaru Motors Finance are trademarks of Subaru of America, Inc. (“Subaru”) and any use by Chase Bank USA, N.A. (“Chase USA”) and JPMorgan Chase Bank, N.A. (“Chase”) is under license. Retail / Loan accounts are owned by either Chase or Chase USA and lease accounts are owned by Chase.
2Jaguar and Land Rover, their respective logos, and the financial group names (Jaguar Financial Group and Land Rover Financial Group) are trademarks of Jaguar and/or Land Rover and any use by Chase is under license. Retail/Loan and lease accounts are owned by Chase.
Edmunds.com’s monthly True Cost of Incentives (TCI) report takes into account all of the manufacturers’ various United States incentives programs, including subvented interest rates and lease programs as well as cash rebates to consumers and dealers. To ensure the greatest possible accuracy, Edmunds.com bases its calculations on sales volume, including the mix of vehicle makes and models for each month, as well as on the proportion of vehicles for which each type of incentive was used. TCI data (and other Edmunds.com data products) can be viewed industrywide, import vs. domestic, by country of origin, by make, by model and by segment. True Market Value (TMV) is the transaction price for vehicles.
RETAIL MARKETS
KENTUCKY
Cory Sears, co-owner, Sears Superb Auto Sales LLC, Corbin, Ky.:
“We’ve been in business a little over 10 years. It’s my dad, Don Sears, and me.
“We’re carrying 25 units on the lot. We typically carry between 20 and 30 cars this time of the year. Of course, we’re constantly rotating them as we sell, so that (amount) works for us.
“Sales each month vary, but we’re averaging about 20 per month. We try to stay around 20, but with the current economy, we’ve sometimes dipped below that.
“We get most of our vehicles from local sales. We’ll go to ADESA Lexington and ADESA Knoxville. We do a lot with those two locations. We also branch of into North Carolina. We typically don’t try to go further north than Lexington, because of how the road conditions (north) afect the quality of the vehicles.
“We just sell regular retail. Fortunately, we’ve got some good local finance sources.
“In our market, it’s good to
keep the (retail price) under $10,000. We have gone as high as $12,000 to $13,000. The reason we branched out to what I think is a high end for us – that $12,000 to $13,000 vehicle – is to create those $4,000 to $6,000 trade-ins.
“We’re in the type of community where repeat and referral business is really strong. That’s what stimulates our business. I’d say about 80 percent of our business is repeat and referral.
“We try to keep the mileage under 100,000, maybe a little over. We carry model years ranging from 2002 to 2011. Right now, the 200405 model years (are our sweet spot).
“Sport utility vehicles are probably 65 percent of what we carry. In this area, people typically want SUVs as well as trucks. But good quality trucks here are just about impossible to find at the price we want to sell.
“We mostly carry domestics and that has to do with the price. When we run into Hondas and Toyotas, we have no problem
selling them. But it’s more about the price point that we want.
“We don’t spend a whole lot on reconditioning. We probably spend about $300 to $400 per vehicle. The cost of mechanical repairs has increased. I think it’s more the inflation of repair costs. We send all of our work out except our detailing, which we do on lot.
“In addition to repeat and referral, we have a website, which has helped us out a lot. We recently started using Facebook. I was apprehensive about using it, but I’m glad I took that step. It’s somewhat time consuming, but it’s really helping.
“Customers appreciate when you ask them if you can take a picture of them with their car. We load that and they like it, They get their friends to see it and it spreads.
“We do print advertising through the weekly local shopper’s guide.
“We recently delivered a 2004 Cadillac SRX. It had 138,000 miles. That sold for $6,850 with taxes, etc.
“I feel pretty good about
the economy. I think we’re on the upside of things.”
MINNESOTA
Trent Snyder, manager, Trent’s Used Cars, Princeton, Minn.:
“We’ve been in business since 2000.
“We carry about 50 (units) on average. That’s typical of this time of the year.
“We sell pretty close to 50 per month.
“The average (sale) price is probably around $12,000.
“I would say our average model year right now is about a 2008.
“Average mileage is right around 70,000. It’s been tough to get low mileage. And it’s still tough getting inventory.
“Mostly we’ll get inventory from other dealers and the auto auctions. That’s the same as usual.
“We carry about 30 percent cars, 30 percent sport utility vehicles and 30 percent trucks. That’s close to the same percentages we carried last year.
“We sell just straight retail: no subprime, no buy-
Compiled by Jeffrey Bellant
here, pay-here.
“We probably spend $500 a car on reconditioning. But even a set of tires costs more than that. We have someone else do that work for us. Our recon costs are about the same compared to last year.
“Our inventory is about 90 to 95 percent domestic. We’re in that kind of town.
“For advertising, we do Internet and newspaper, that’s about it. The Internet advertising is mainly Cars.com, CarSoup.com and Craigslist. For print, we use the local paper.
“We’ve got a fair economy. Pretty much everything has been staying the same (as far as the market). I don’t see anything changing.
“I think the rest of the year is all going to depend on how available these cars are going to be. There hasn’t been this big (influx) of cars. If anything, I think there’s been a shortage of cars. I would think it’s going to improve.
“I recently sold a 2007 Lincoln MKX. It had 90,000 miles on it. We sold that one for $15,900.”
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WHOLESALE MARKETS
GEORGIA
Ross Nix, vice president, South Georgia Auto Auction, Albany, Ga.:
“We’ve been here 19 years. We’re set up with four lanes.
“We’ve been running 200 to 300 units per week.
“It’s been pretty good. We’ve had the strongest July that we’ve had in about five years.
“I think it’s that we have some dealers that are just keeping their doors open pretty much 24/7. I’ve got one dealer that buys about 15 to 30 cars a week here.
“It’s all about hustling. There’s a lot of cash business going on. I’ve got a guy who’s even selling cars on Sunday.
“We’ve got a lot of migrant workers in South Georgia now and that’s what’s probably bringing (the business in).
“But the guys who have a little cash (stored up) are just sitting back, waiting on tax season.
“Our sales percentages have been running about 50 to 60 percent for the last month to month and a half.
“For whatever reason,
we’re seeing new-car stores starting to cut loose their (trade-ins). They normally would hold on to that stuf We’ve been running one lane of nothing but franchise cars. That’s been great for us.
“We’re getting well over 100 dealers in the lanes.
“Dealers come from southern Georgia and Florida. We’ve also been getting several dealers from Texas.
There’s a lot of export going on as well.
“About half of our volume is franchise dealer consignment. The rest of our cars are repossessions and independent dealer consignment.
“Repos are doing better. We’ve got a new accounts manager and he’s brought on a lot of great accounts.
“The average price (across the block) is about $3,500 to $4,000.
“But we’re also starting to see some later model pieces come in, like 2010s, 2011s and 2012s. That’s bringing in a diferent type of buyer.
“Anything that’s 2004 or newer with less than 140,000 miles – and has any kind of eye to it – it’s going
to sell (strong).
“Our anniversary sale is Sept. 11 and dealers start loading up for tax time. We’ll be having a big cookout and give away thousands of dollars of cash and prizes.”
MASSACHUSETTS
Michael Cooley, general manager, Quincy Auto Auction, Quincy, Mass.:
“Sales have been super.
“We’re in our 23rd year. We have six lanes.
“Volumes are good, they’re up. We’re averaging between 1,200 and 1,300 cars per week. Last year, we were at 900.
“I attribute a lot of it to the economy doing pretty good. Some of it is just the overall growth of the car business.
“And some has to do with the facility itself. We’re drawing in more dealers because of the facility.
“Sales percentages are averaging in the high 60s, low 70s. Anything less that 66 percent is not good. We’re usually between 66 and 70 percent.
“We’re (bringing) into
Compiled by Jeffrey Bellant
the lanes, on average, about 1,000 dealers per week. We’re easy to get to from pretty much anywhere. We’ve got guys who come down from Maine, New Hampshire, Rhode Island, Connecticut, and all over Massachusetts.
“The (volumes) are good for the dealers. Plus, we have a really nice storage facility. So if guys want to buy cars but can’t get them out right away, we provide them a storage facility at a reasonable rate. We have 120 acres available for storage.
“So they may see the market is right to buy cars and they want to buy 10 to 15 cars but don’t have the room for them. We can provide the storage.
“The overall (mood) of the dealers is that they seem to have a positive outlook coming out of the summer and into the fall buying season.
“About 90 percent of our volume is dealer consignment. That’s gone up a little bit as we cater more toward the independent dealers.
“We still do some fleetlease. We do a lot with Enterprise Rent-a-Car, local
banks and credit unions.
“We also work with Fleet Street Remarketing and they’ve told us that their consignments are going to be picking up into the fall season.
“Repossessions have gone down a little bit. I think the banks have been working a lot closer with their clients, trying to keep them in the cars.
“We still have (salvage/ in-op units). We also do an RV sale a couple of times a year, in the spring and fall. It’s not a big number.
“Post-sale inspections have picked up a lot. They are up about 30 percent over last year.
“The average price coming through the lanes is about $3,200. It might have gone up a little, but not much.
“The truck market has picked up a little bit as we go into the fall. Light-duty trucks are starting to pick up. Outside of that, everything is steady.
“We’ve been seeing a lot more franchise dealers bringing their cars to the auction.”
Compiled By Jeffrey Bellant
SERVNET MEMBERS ENHANCE FACILITIES
SUMMER JOBS: Missouri Auto Auction (above) is one of several ServNet sales that are expanding and improving facilities this summer..
ServNet auctions across the country are in the middle of upgrading their facilities.
Missouri Auto Auction is completing a $1 million expansion project, said owner Kevin Brown. A new 6,000-square-foot check-in arena with three bays replaces the existing single outdoor check-in lane. An additional 6,000 square feet expanded ofce space includes a new bidder badge area, payment and arbitration counters, and a new coat/luggage room with lockers. Sparkling City Auto Auction of San Antonio opened a fifth lane and, most recently, unveiled a new mechanic garage, detail shop and body shop. Carolina Auto Auction has a newly designed lobby, complete with new bidder badge machines, a digital “top buyers and sellers” board and a new Internet Café.
Dealers Auto Auction of the Southwest, Phoenix, has converted to Whann Tech auction software and upgraded to Cox Fiber, increasing broadband capabilities. Dealers can elect to have their full invoices sent in either text or email formats. The auction has completed a downdraft system to ease the heat and is building an in-house techtraining center for dealers and employees. Brasher’s Salt Lake Auto Auction is paving an additional 10 acres for vehicle storage and parking. State Line, in Waverly, N.Y., also installed a new, more modern car wash, and has plans for additional expansion and construction.
Manheim Auctions Mark Anniversaries
Manheim Arena Illinois, which opened in 1949, celebrates its 65th year in business this year.
Three other Manheim auctions are celebrating their 60th anniversary in 2014, including Manheim Seattle (opened February 1954) Manheim Chicago (May 1954) and Manheim New York Metro Skyline in Fairfield, N.J. (June 1954). Manheim Toronto and Manheim Albany celebrate their 50th anniversaries in August and September, respectively.
Other locations are planning anniversary sales and events, including: Manheim Arena Illinois will
host a 65th anniversary sale on Sept. 16; Manheim Chicago will host a month-long anniversary celebration, including a 1950s themed sale day on Sept. 18. Manheim Toronto will host anniversary sales during regular consignment sales on Oct. 7 at 10 a.m. and Oct. 9 at 6:30 p.m.
Photo courtesy of ServNet
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PEOPLE IN THE NEWS
CarMax Taps Chief Marketer CarMax Inc. announced the appointment of Jim Lyski as chief marketing ofcer and senior vice president.
Lyski will begin employment at CarMax immediately.
Lyski will be responsible for directing and managing all of the company’s marketing functions, including consumer insights and strategic direction, brand, creative, digital, advertising, carmax.com, store marketing, targeted marketing, media, public and community relations, and internal communications.
Lyski served as chief marketing ofcer of The Scotts Miracle-Gro Company from 2011 to 2014. In this role, he led all brand responsibilities, including global innovation, product development, positioning, advertising, packaging, pricing and promotions. Prior to Scotts, Lyski served as chief marketing ofcer at Nationwide Mutual Insurance Co.
In addition, Lyski has held marketing leadership positions at Cigna Healthcare Inc. and FedEx Corp.
Lyski received his MBA in marketing and BS in journalism and advertising from the University of Oregon.
Disconnected Jottings From Tony Moorby...
Our local town is a fairly well-of community south of Nashville. So far, it’s been peaceful, barring a bank robbery about 15 years ago. A look at the local police force would have you believe that, ISIS aside, we’re expecting
Armageddon tomorrow.
Shorn heads support uniform hats with the peaks sloped steeply over the eyes, Shutzstafel-style. The belt, once used to support the pants, now has enough attachments to sink a battleship. I don’t know how their pants stay put anymore. If they’re not wearing the normal beat clodhoppers, then they seem to favor the more commando look of tucking their pants bottoms into calf-length jackboots.
The cruisers of choice are the Dodge Charger Pursuits.
Those cars look aggressive enough as is, but ours would do well in any situation worthy of a Sherman tank. The cockpit – that really is what it looks like - has more computing power than the Apollo program with digital
mind here.
I know since 9/11 our police forces have had to evolve into having new and extremely upgraded capabilities and equipment, but you have to wonder if they slip into this new image and flaunt authority, sometimes to unreasonable ends.
A glib response would be to say that it’s a reaction to our society, which sadly, doesn’t respect the feelings of others or even value life the way we used to. The population and those who police it both appear to be on a hair trigger.
everyday procession of life and people going about their own business.
On the other hand, today’s schoolteachers have their hands tied behind their backs. There’s no such thing as “in loco parentis” anymore; mind you, even parents are looked down upon if they discipline their kids. The Department of Human Services is called upon if you’re caught raising your voice to an ofending child these days.
readouts (we don’t do dials anymore) laser trackers and their ilk, sufcient to outdo Star Wars.
I was driving the 45 mph speed limit last week when one overtook me while the constable leaned half way across the cab to input some data into his computer, which happened to take up the entire space of the front passenger seat. I’m not allowed to text while driving and I agree wholeheartedly with that limitation, but something about the goose and the gander comes to
CR R O O S S W D
By Miles Mellor
33. Suspension component
34. Highest point
35. In the past
36. Globe
38. ___ welder
40. Luxury four-wheel drive SUV (goes with 40 down)
Across
1. 2015 MINI Cooper
5. Mercedes open top letters
7. Compact SUV from Honda
9. ___ Beetle 10. Compact executive Jag
11. City related driving 13. Sales person 14. Christmas ___ 15. Goodyear is based in this Ohio city 17. Zero
Function 20. Classic Brit sports car makers, ____-Healey 21. Motor
25. Amount, for short 27. Auto painting tool (2 words)
42. Compact Honda model
43. Wedding words
44. Auto’s internal woodwork, e.g.
47. Full-size luxury saloons from Jaguar
49. The Rockies, for example (abbr.)
50. Ford F-150 ____
54. Channel with mystery shows, __ and ___
55. VW model
56. Full size luxury sedan from Honda originally made in 1996 (goes with 57 across)
57. See 56 across Down
1. Badge engineered version of the Isuzu Rodeo sold in the 90s (2 words)
When I was young, the local bike-riding bobby who knew everyone in the neighborhood would “clip you ‘round the ear” for a minor malfeasance and haul you by the scruf of your neck to your parents’ doorstep. Nowadays they can’t inflict corporal punishment, but they can shoot you dead in the street at the mere suggestion of looking wrong.
If you think I’m beginning to sound like a leftist flag waver, you’re wrong. I’m a staunch believer in authority in its place, but the question can still be begged as to how far that extends in the
Sponsored by
2. Redoes the electrical
3. New Acura model
4. Using a check or a credit card, e.g.
5. Truck line produced in 2008 as part of the Daimler Chrysler group
6. Kia Forte ____
7. Nissan compact models
8. Where grapes grow
12. 1st and 5th (abbr.)
16. Making a racket
19. Makers of the 124 Spider
22. SUV Crossover from Chevy
23. Alongside
24. Veyron makers
26. Audi sports car
28. The “p” in r.p.m.
29. VW models
30. Anchorage state
31. Peach state
32. ___’easter
33. Therefore
37. Providing that 39. Honda’s longestselling car
40. See 40 across
41. Famed ‘50s car fop
Unfortunately that perceived immunity from any authority carries into later life and bridles when authority finally challenges it.
Then the circle starts again and the police force spends another billion dollars for the next eventuality to further underwrite the growing ‘us and them’ sentiment that prevails.
I hope that by the time this goes to press, the furor in Ferguson has quieted to
a point where folks can take stock of themselves. That includes the police department who could benefit from a better racial reflection of the society they’re supposed to police and start hiring some colleagues from the black community. That alone would engender a much greater understanding and mutual respect, not reviling the diferences that naturally exist. I’m not sure that rioting and looting does anything to improve the causes of those who have been aggrieved.
Surely it would be better to have greater representation in the community structure, such as city councils and their various committees. Organic change would be better than standof challenges. The way the world’s going, the police will have to give their equipment back to the armed forces anyway.
45. Abbreviation for a return of goods
46. Manuscript for short
48. Container
50. Light, for short
51. Tea Party state
52. You in France
53. Leonardo’s middle name
Tony Moorby
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 TWO-FIFTHS OF CAR BUYERS CALL OR EMAIL BEFORE WALKING INTO A DEALERSHIP. 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.
