Used Car News 6/6/16

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Buy-Here, Pay-Here Alliance Honors CFO

By Ted Craig

The National Alliance of BuyHere, Pay-Here Dealers has inducted several high-profile operators into its Hall of Fame.

But this year the NABD took the opportunity to honor somebody who played a crucial role in the background.

Mark Sauder has worked as chief financial ofcer for DriveTime and its related companies since 1997.

“He’s a guy who likes to move the needle,” said Ingram Walter, owner of iCars in North Carolina, as he made the induction.

“He’s constantly made a commit-

ment to continuous improvement. Our industry is better because people like him have been in it for so many years.”

Sauder is a Certified Public Accountant with a degree from Ball State University. He joined DriveTime’s family of businesses when he became the chief financial ofcer for Cygnet Dealer Finance Inc.

He moved to DriveTime when elements of that company were folded into the main operation. He served as chief financial ofcer until 2012 and remains the company’s executive vice president.

Prior to joining DriveTime, Sauder held various senior management

positions with auto finance, real estate development and financial services companies.

Sauder also serves as chief executive ofcer of BlueShore Insurance Co. and Silver Rock.

Sauder accepted the honor not just for himself, but also for all the finance executives in the buy-here, pay-here business.

“Without a strong finance executive, no buy-here, pay-here operation can succeed very long,” he said.

“There is no such thing as individual success in this industry.”

Sauder especially thanked Ernie Garcia, DriveTime’s founder, and Ray Fidel, the company’s

current CEO.

Sauder reflected on the diferences at DriveTime since it started in 1992 as Ugly Duckling and today. The chain began as traditional buy-here, pay-here operation of the time, with commissioned salespeople selling as-is cars to any customer who came on the lot. There were no prices on the cars because everything was negotiable. Today, the salespeople at the more than 100 stores are all salaried and all prices are no-haggle.

DriveTime has provided more than $13 billion in financing. The company will sell its 1 millionth vehicle later this year.

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ServNet Adds Auction, New Board Members

By Jeffrey Bellant

ServNet has added North Bay Auto Auction to its stable of members just weeks after losing eight Brasher’s auctions with their sale to ADESA.

Pierre Pons, ServNet’s chief executive ofcer, announced the addition of the Fairfield, Calif., auction following the group’s spring owners meeting earlier this year.

North Bay will help return the independent network of auctions to a market area that had previously been filled by Brasher’s Sacramento.

“North Bay is an auction that’s been around for a long time,” Pons said. “They were not strangers to us.”

The sale brings the total number of ServNet members to 21.

Pons said ServNet’s board doesn’t welcome just any auction into membership.

“Sometimes it’s just not a good fit,” Pons said. “There’s quite a bit of vetting that goes on. There wasn’t a

recruiting efort. This isn’t a fraternity rush.”

Pons said the board of directors wanted to wait and see who came to them, rather than looking to fill any perceived void in the California market.

He said there is an application process. The group has often turned away auctions that didn’t meet the group’s criteria of market area, facility, character and type of sales.

ServNet sales are the “cream of the crop,” Pons said, which is what make them attractive for acquisition.

“Some auctions want to join ServNet so they can develop the commercial/ institutional part of their business, but that’s not what we’re here for,” Pons said.

“An auction has to bring something to this club and here (with North Bay) is an auction that already does a fair amount of commercial business.”

Pons said the Bay Area is a major market area and North Bay is surrounded by

three ADESA-owned sales.

The ServNet board agreed that North Bay was a great fit and it voted unanimously to accept the auction followed by a unanimous vote of the membership, Pons said.

“As an organization with strong core values, a commitment to superior service and a focus on developing technology, North Bay Auto

Auction is an ideal representative of the ServNet brand in the region,” said ServNet President Kevin Brown.

“We welcome North Bay Auto Auction’s President and CEO Don Morrow to the ServNet owners’ table and look forward to working with him and his team.”

North Bay founder Don Morrow returned the com-

pliment in a release announcing the vote.

“Joining ServNet auction is an exciting move for us at North Bay Auto Auction,” said Morrow. “The ServNet designation signals to our customers that we are equipped to handle their business at a superior level, and that we share the high

Continued on page 18

NEWS BRIEFS

XLerate Adds Sale

Huron Capital Partners LLC announced that its auto auction portfolio company, The XLerate Group, has acquired Grand Rapids Auto Auction.

This deal marks the second expansion in Michigan by XLerate, following its 2015 acquisition of Greater Kalamazoo Auto Auction.

Grand Rapids Auto Auction has been in continuous operation since 1948.

It is now the seventh member of the XLerate Group (formerly known as American Auto Auction Group).

The group operates auctions with physical and satellite sale operations in California, Texas, Florida, South Carolina, Wisconsin and Michigan.

America’s Car-Mart’s Profits Tumble

America’s Car-Mart Inc. reported that net earnings in the latest quarter fell to $3.4 million, compared to $7.2 million reported for the same period last year.

Revenues for the quarter ended April 30 were $155 million compared to $138 million for the prior year quarter.

Retail unit sales increased to 12,345 from 11,699 for the prior year quarter. Average retail sales price increased $634 to $10,641.

Gross profit margin percentage decreased to 38.7 percent from 41.5 percent for the prior year quarter due primarily to higher wholesale volumes and losses, slightly higher repair costs, the efect of a higher

MILESTONES

James W. Franks

Former auction owner James W. Franks died May 9. He was 88. Franks and business partner, Walter James “Jimmy” Cotton, purchased Chicago’s Arena Auto Auction in 1957. Franks served as president of the National Auto Auction Association in 1971. The pair sold the auction in 1983. It is now Manheim Arena.

Franks retired from the auction business in 1990.

Franks and Cotton received the NAAA’s Industry Pioneer Award in 2003.

He is survived by his wife, Roseann Franks, and children: Jerry (Karen) Franks, Zachary (Katie) Franks, Matthew Lalich and Angelina (Matthew) Tancos and daughterin-law Karen Marie Franks.

average selling price, and continued eforts to improve the quality of inventory.

CarMax Adds California Store

CarMax Inc. celebrated the grand opening of its first Bay Area store in Pleasanton, Calif.

Two more locations, in Fremont and Santa Rosa, will open this fall. The Pleasanton store will stock between 200 and 400 used vehicles.

During the grand opening celebration, CarMax announced that The CarMax Foundation will invest approximately $95,000 for building a playground in the Bay Area.

CarMax is also investing approximately $35,000 to donate an Imagination Playground and a Rigamajig. The Rigamajig will be donated to the Palo Alto Fisher House and CarMax is currently identifying an organization to receive the Imagination Playground.

The associates of the Pleasanton CarMax chose the YMCA of East Bay to receive a $10,000 grant from The CarMax Foundation.

IAA Enhances Appraisal Offering

Insurance Auto Auctions Inc. has implemented an enhanced appraisal

ofering for IAA Inspection Services customers.

This integration allows customers to maintain existing appraisal vendor relationships, or to have IAA manage the appraisal process.

In addition, the added flexibility provides insurance companies with access to multiple total loss claims services within a single platform.

Manheim Boosts Inspection Service

Manheim, in partnership with Alliance Inspection Management, will enhance capabilities to handle larger volumes at auction sites and expand on-lot services at dealerships in major population centers across the country.

Last year Manheim conducted 3.5 million vehicle inspections and the company expects that number to increase to more than 4.2 million this year. Manheim and AiM formed a strategic alliance in March 2015.

Charles M. Thomas - Founder (1947-2002) Lynda R. Thomas, Publisher Colleen Fitzgerald, General Manager

Editorial: Ted Craig, Managing Editor Jeffrey Bellant, Staff Writer

Contributing Writers: Ed Fitzgerald, Jenny King, Sheila McGrath

Advertising: Shannon Colby, Account Manager Marie Hingst, Account Manager

Car News is published the first and third Monday of each month.

Columnist: Tony Moorby

Circulation: Helen Thomas

Production: Josie Godlewski, Media Manager Cee Lippens, Web Master & Graphic Designer

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.

Analyst Sees 20 Million New Car Sales by 2020

By Jenny King

DETROIT – General Motors, buoyed by its introduction of new crossover vehicles with replacements in the wings for veteran SUVs and pickups, will be tops in the industry in model replacement rates from now until 2020.

GM grabbed the headlines in the U.S. Auto Industry and Car Wars 2017-2020 market forecast from Bank of America Merrill Lynch, with a forecast 22-percent replacement rate over the next four years guaranteeing fresh products in showrooms.

Product activity is “relatively solid” at the major auto makers, consistent with the later stages of a cyclical recovery, Bank of America

Merrill Lynch analyst John Murphy told members of the Automotive Press Association.

The average age of showroom product, he said, impacts sales, and GM’s jump from 14 percent to 22 percent in the next four years

“should drive strong mix, market share and pricing, despite extreme skepticism of investors,” according to the most recent Car Wars report.

“New car pricing is at an all-time high,” said Murphy, yet consumers are buying.

Based on planned replacement

cycles with “an overlay of consumer confidence,” the present sales growth could lead to annual sales of 20 million before the end of the decade, Murphy said.

As he did a year ago, Murphy cited Honda for its steady approach to new products. With a smaller lineup, the automaker introduces one major vehicle a year and can sell of that one until the next newcomer arrives.

“Honda is doing a great job and is leading the charge,” he said.

Murphy said there will be 44 new vehicles coming to market in 2017, 44 in 2018 and 58 for 2019-20.

Crossovers and light trucks now account for over 50 percent of sales.

Ford’s product line should sustain its market share, mix and price, according to the study, though market share may be traded for higher prices and profits.

FCA is heavy into trucks as it shops for a car-building partner. Toyota will hold its own in spite of “relative overexposure” in the car segment.

Nissan is “all over the place,” Murphy said, “consistency is not there.”

The Europeans are below average in replacement rates and Korean automakers’ introductions are “skewed heavily towards small and mid/large cars.”

Go Financial Exits Market

By Jeffrey Bellant

Go Financial, which has originated more than 110,000 subprime loans since its founding in 2011, is calling it quits.

The Mesa, Ariz.-based firm, a spinof of DriveTime Automotive Group, stopped accepting new applications on May 12, ending plans for future originations.

tion of Go’s portfolio.”

Bachinsky said DriveTime’s family of companies continues to experience rapid growth and it made strategic sense to reinvest in other core business units.

The news follows the company’s origination of 47,500 loans last year.

The Go Financial portfolio is made up entirely of used-car deals, Bachinsky said.

Colin Bachinsky

Colin Bachinsky, president of Go Financial, stated via email the firm would verify and fund applications through May 27 – these are for applications that were already in the workflow prior to the announcement.

“A final decision was made (in early May) by DriveTime’s owners, Ernie Garcia Sr. and Ray Fidel, to reallocate capital, resources and focus on core business units: DriveTime, Bridgecrest, Carvana and SilverRock, Bachinsky said.

“The decision was not a reflection of our performance and our portfolio continues to meet or exceed our expectations. There’s no deteriora-

In the wake of the announcement, dealer-partners are asked to visit the company’s dealership portal online for any notifications and answers to frequently asked questions. The company sent information to its dealers about the change on May 12. Go Financial customers will continue to make their regular payments through the web portal.

Bachinsky also said more than 90 percent of Go employees have the option to transfer to one of the other companies under the DriveTime Automotive Group umbrella. Others will stay with Go Financial during the transition.

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NIADA CONVENTION

BUY-HERE, PAY-HERE TAKES WHEEL OF NIADA

Billy Threadgill, of Van’s Auto Sales in Florence, S.C., is the incoming president of the National Independent Automobile Dealers Association.

UCN: Please tell us about your background and a little about your business.

Threadgill: I started in the automotive industry 52 years ago. My grandfather was a farmer. I was a farm hand previous to that. I was hired at seven by the local Ford dealer where my dad was employed.

I was hired to do general services, such as sifting cigarette butts out of those aluminum ash trays filled with sand, wash and clean cars, sweep the dealership and weed flowerbeds. From there I advanced into other things such as parts, service, etc. until March 12, 1975, when my dad, mother and I began Vans Auto Sales.

Today, we are still a family oriented business. Both my sons Chip and Michael have worked with me. Chip has pursued other interests while Michael has continued on our legacy. He also is a NIADA Certified Master Dealer.

I am a car fanatic. I enjoyed building my own drag cars for years, which was educational and fun. My dad taught me the art of buying and selling cars while mom taught me the accounting side. We have been members of the national and state associations since our beginnings.

In October 1979, we opened a Usave auto rental franchise because it seemed to be a natural fit with our business model. We still own one today.

Our business model is 75-percent traditional retail and 25-percent buyhere, pay-here. We started the buy-here, pay-here side when subprime lenders began exiting the marketplace and we still had buyers needing financing, so I became the bank. My involvement with NIADA and the Carolinas IADA has been paramount to our

success. It’s the school we never graduate from and that we continue contributing to for integrity and success in our industry.

UCN: What prompted you to get involved in NIADA leadership and how has the organization helped your business?

Threadgill: I see a strong need of education in our industry. Education that’s been provided to me by NIADA has taken us through all economic times.

UCN: Compliance continues to be a challenge for independents. How have these changes afected the way you do business?

Threadgill: Through the education of NIADA, we have attempted to be compliant by having a compliance ofcer, policies and procedures manual, OFAC reporting, Form 8300 reporting, and complying with red flag and safeguard mandates.

UCN: The NIADA has continued to evolve and strengthen its presence in the industry. The recent acquisition of Leedom &

Associates assets and the hiring of consultant Chuck Bonanno have added more resources for buyhere, pay-here/subprime dealers in the NIADA. How have the members reacted to this acquisition?

Threadgill: Most members have a positive reaction or response that I am aware of. This is what NIADA provides for its members and as a responsible participant in our industry.

UCN: The NIADA has been dealing with the issue of recalls, which brings more obstacles to independents than it does to franchise dealers. How has the NIADA been working to help members in dealing with the recall issue?

Threadgill: By educating our members on proper recall disclosure coupled with being in Washington to educate our Congressmen on recall bills and their impact to consumers, dealers and industry as a whole. Our footprint in Washington as NIADA is the best ever that I am aware of.

UCN: Under the leadership of Steve Jordan, the

NIADA has taken a more aggressive role in addressing challenges coming from Washington, through its lobbyists, the Day on the Hill meetings and political action committee. How have these changes helped the industry or yourself as a dealer?

Threadgill: I can honestly say that we have members now engaging their Congressmen that have never done this before.

When members see the results we have obtained, they become more engaged with their Congressmen, which results in better grass roots relationships.

UCN: Technology continues to be a big topic. How has technology helped you most? Is it in acquiring inventory, selling cars or managing operations? Or is it all three?

Threadgill: It’s afected all three areas.

UCN: Are there any other issues that you think dealers have to pay attention to now?

Threadgill: Arbitration.

UCN: What is your top goal(s) for your upcoming term as NIADA president?

Threadgill: I have several objectives I would like to accomplish in my year at NIADA.

First is to grow our association and its membership value in our industry through progressive education and relationships.

Second is to improve our legislative footprint in Washington through a proactive legislative committee and a successful leadership conference in September.

My third objective is to develop an educational program that we could distribute to schools on educating young adults on purchasing a car responsibly.

UCN: This is a presidential election year featuring two of the most polarizing and unpopular candidates in recent memory. Is this the type of political season than can afect your business, either good or bad?

Threadgill: Election years and businesses related to our industry are similar to an oil and water mixture. It just doesn’t happen.

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State Pulls Dealers’ Licenses

Five Michigan auto dealers, located in Detroit, Grand Rapids, Waterford and Wyandotte, recently had their licenses suspended by the secretary of state.

The afected dealerships are:

• Auto Executives LLC, 8107 Michigan Ave., Detroit;

• M & M Cars, 4210 E. 8 Mile Road, Detroit;

tain records and evidence of fraud was also discovered as several application forms for new titles and registrations were completed with diferent delivery dates and sale amounts.

• LAC Auto Sales, 6025 Division Ave. SW, Grand Rapids;

• Ethan Edwards, DBA First Place Auto Sales, 2020 Dixie Highway, Waterford Township; and

• John Yurkovich Auto Sales Inc., 2355 Fort St., Wyandotte.

Secretary of State investigators were unable to inspect the records of Auto Executives LLC on several occasions as the dealership appeared closed during normal business hours each time.

The licensee was notified of two preliminary conferences at which he was required to provide records and he failed to show up for the conference each time.

Investigators found evidence of failure by LAC Auto Sales to apply for title and registration in a purchaser’s name within the required 15 days and failure to have a properly assigned title in immediate possession as required by law.

The dealership failed to main-

The licensee had previously been issued violations and was on a 24-month probation agreement at the time of the most recent violations.

Ethan Edwards had his licenses suspended after state investigators conducted an inspection of the dealership and did not find complete records.

The dealer is alleged to have sold 14 vehicles for which he did not have titles in his possession and to have continually failed to apply for titles and registrations for his customers.

Investigators found evidence of failure by John Yurkovich Auto Sales Inc. to apply for title and registration in a purchaser’s name within the required 15 days and failure to have a properly assigned title in immediate possession as required by law.

Investigators reported that M & M Cars failed to provide records of auto sales and inventory. Previous inspections of the dealership resulted in violations for failure to maintain their police book.

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CONSIGNOR AWARDS:

ALLY / SMART AUCTION Awards

Columbus Fair AA

Flint AA

Akron AA

Carolina AA

State Line AA

ARI Auction Awards

Missouri Auto Auction

DONLEN Auction Awards

Carolina Auto Auction

ELEMENT Auction Awards

DAA Northwest

DAA Huntsville

America’s AA - Harrisburg

FISERV Auction Awards

Carolina Auto Auction

FORD Auction Recognition Award

Dealers AA of the Rockies

GM FINANCIAL

Auction of Excellence Awards

Grand Rapids AA

KIA Auction Performance Awards

KCI Kansas City

NEXT GEAR Auction Awards

BSC America’s Tallahassee AA

Acadia AA

Rochester-Syracuse AA

Lynnway AA

We Congratulate Our Member Auctions on their Industry Accolades Award

Award

OVE Auction Awards

Norwalk AA

Greensboro AA

Akron AA

Flint AA

XLerate Group Auctions

Columbus Fair AA

KCI Kansas City

SANTANDER CONSUMER USA

America’s Auto Auction

UNITED AUTO CREDIT

Carolina AA

INDUSTRY AWARDS:

BOBIT BUSINESS MEDIA

2016 Remarketer of the Year

LYNN WEAVER

America’s Auto Auction-Harrisburg

AUTO REMARKETING

Women in Remarketing

Capital City AA

USED CAR NEWS

Best of Auction Awards

America’s AA - Atlanta

Charleston AA

State Line AA

DAA of the Southwest

Carolina AA

Mountain State AA

Southeastern AA of Savannah

Capital City AA

Louisiana’s 1st Choice AA

Delinquency Rates Move Higher, But Not Defaults

Automotive finance continues to grow even as higher delinquency rates cause concern.

The total balance of open automotive loans climbed 11.1 percent in the first quarter surpassing the trilliondollar mark for the first time, Experian Automotive reports.

According to the most recent State of the Automotive Finance Market report, loan balances reached $1.005 trillion the first quar-

ter, up from $905 billion in the first quarter of 2015.

“Automotive financing certainly has started of the year with a bang, seeing steady growth in balances and loan volumes throughout the first quarter,” said Melinda Zabritski, senior director of automotive finance for Experian.

While the new record is a cause for celebration, an increase in delinquency rates is a cause for concern, Zabritski said.

“With more and more consumers relying on financing, it is important for lenders to keep a close eye on delinquency trends to ensure the market remains healthy,” she said. “Likewise, consumers need to continue making their monthly payments on time to keep afordable financing options open and available.”

The percentage of loans and leases considered 30days delinquent was 2.1 percent in the first quarter,

up from 2.02 percent in the first quarter of 2015.

Additionally, the percentage of loans and leases considered 60-days delinquent grew from 0.57 percent to 0.61 percent over the same time period.

Financing volumes grew in all credit tiers in the first quarter.

The volume of vehicle loans and leases held by nonprime and subprime consumers increased by 9.5 percent and 10.9 percent, respectively. Prime consumer loans and leases increased by 8.9 percent

Finance companies and

credit unions saw the largest growth in loan and lease market share, growing 25.6 percent and 15.9 percent, respectively.

Banks continued to hold the top position in automotive loan and lease volume, growing 7.9 percent over the previous year to reach $349 billion in market share.

Delinquencies become major problems when they turn into defaults and thee is good news on that front. Experian reports that auto loan defaults recorded a 0.97 percent rate in April, down five basis points from March.

GM Pays Consumers For Fuel Economy

the window stickers, the company said.

DETROIT (AP) – People who bought or leased 2016 General Motors SUVs with overstated gas mileage on the window sticker will be getting compensated, the automaker said.

GM wouldn’t say why the hardware was changed but said all previous model years of the SUVs met emissions standards.

Those who purchased their SUV will get to choose a debit card or an extended warranty, while lessees will receive a debit card.

The U.S. Environmental Protection Agency, which monitors the gas mileage window stickers, said it has asked GM for information in the case.

For most people, the compensation will be worth between $450 and $900, but owners of some all-wheeldrive SUVs could get as much as $1,500.

Owners who go for the extended warranty will get coverage for four years or 60,000 miles, which is longer than the standard warranty of three years or 36,000 miles.

The payments will vary with lease terms and mileage diferences between models.

About 135,000 customers were scheduled to get letters stating their amounts starting May 25.

GM says another 35,000 fleet customers will be handled individually.

The reimbursement is based on the same formula that the EPA uses to calculate future fuel costs, with a gas price of $3 per gallon and annual driving mileage of 15,000, for a period of five years, GM said in a statement.

“We designed this reimbursement program to provide full and fair compensation,” said Jim Cain, GM spokesman.

The Detroit automaker announced recently that fuel economy was overstated by one to two miles per gallon on the 2016 GMC Acadia, Chevrolet Traverse and Buick Enclave.

GM blamed the discrepancy on new emissions control hardware and said the error was inadvertent.

The mileage was recalculated for 2016 but the new figures never made it onto

The company wouldn’t reveal the total cost of the payments and warranties but said it will not materially afect the company’s earnings.

Engineers who were working on the 2017 model stickers discovered the mileage mistake recently. General Motors is just the latest manufacturer to have to pay for its fuel economy claims.

In 2013, Hyundai Motor America settled a class-action lawsuit in which it was accused of misleading consumers about fuel economy.

Regulators Crack Down on Auto Title Loans

Title loans are facing increased scrutiny by state and federal regulators.

The North Carolina attorney general temporarily banned an online car title lender from making loans in the state.

This is just a part of a larger movement against title loans.

The Consumer Financial Protection Bureau recently issued a report finding that one-in-five borrowers who take out a single-payment auto title loan have their car or truck seized by their lender for failing to repay their debt.

The North Carolina suit against a firm that does business as Autoloans, Car Loan, Sovereign Lending Solutions and Title Loan America, claims the lender charges consumers average interest rates of 257 percent on loans of $1,000 to $2,500.

“Families who need a little extra money to deal with an illness or a layof deserve a fair loan, not a rip of,” said Attorney General Roy Cooper. “North Carolina has long made illegal these expensive loans with excessive interest rates, and my

ofce is here to enforce the law for consumers.”

The attorney general is seeking a permanent ban on the defendants’ illegal lending business, cancellation of previous loans and liens, and refunds for North Carolina consumers.

Title loans are small dollar loans secured by consumers’ car titles. State law caps interest rates on such loans at 30 percent for licensed lenders and at 16 percent for unlicensed lenders, such as the defendants.

According to the CFPB’s research, more than fourin-five of these loans are renewed the day they are due because borrowers cannot aford to repay them with a single payment.

More than two-thirds of auto title loan business comes from borrowers who wind up taking out seven or more consecutive loans and are stuck in debt for most of the year.

“Our study delivers clear evidence of the dangers auto title loans pose for con sumers,” said CFPB Direc tor Richard Cordray. “In stead of repaying their loan with a single payment when it is due, most borrowers wind up mired in debt for most of the year. The collateral damage can be especially severe for borrowers who have their car or truck seized, costing them ready access to their job or the doctor’s ofce.”

According to the attorney general’s investigation, the title lender has operated since 2012 under various names and appears to be based in Florida, although to evade lending laws the business incorporated in the Cook Islands, New Zealand and previously claimed afliation with a Native American tribe in Michigan.

As alleged in the complaint filed with the court, at least 700 North Carolina

consumers took out title loans from the defendants. In addition to charging skyhigh annual interest rates of 161 percent to 575 percent, most of the loans included payments on interest only for the first 11 months and a final balloon payment larger than the original loan amount. When consumers couldn’t make the onerous payments, the defendants repossessed their cars illegally.

Craiglist Ads Cost Store

A Kansas car dealer has entered into a consent judgment involving allegations of deceptive acts and practices.

The agreement calls for Numak Dealership of Wichita to pay $7,000 in civil penalties and $747 in expenses.

The district attorney alleged that Numak was listing cars for sale on the Craigslist website without identifying the seller as a car dealer, failing to disclose that a vehicle it sold had a salvage title and improperly attempted to limit warranties. The agreement does not constitute an admission by Numak of the allegations.

State law requires usedcar dealers to disclose in any solicitation or adver-

tisement that the motor vehicle being ofered for sale, lease or rental is being done so by a vehicle dealer. When a dealership fails to disclose that it is a dealership and advertises in the “by owner” section of Craigslist or anywhere else, it is considered a deceptive act and practice, according to the Kansas Consumer Protection Act.

Used-car dealers also must disclose when a car listed for sale has a salvage title and provide accurate warranty information to all buyers. At the time the consent judgment was filed, Numak paid the fines and costs and agreed to refrain from further deceptive business practices.

The CFPB study found that these auto title loans often have issues similar to payday loans, including high rates of consumer re-borrowing. A borrower who cannot repay the initial loan by the due date must re-borrow or risk losing their vehicle. Such re-borrowing can trigger high costs in fees and interest and other collateral damage to a consumer’s life and finances.

five years or 60,000 miles of bumper-to-bumper limited coverage and 10 years or 100,000 miles of powertrain coverage from the car’s original sale date. Hyundai’s selection was cemented by the fact that the warranty ofers a relatively low deductible of $50, and the warranty is fully transferable to subsequent owners in a private sale.

Lexus’s CPO program “L/Certified,” won top honors primarily due to its excellent warranty along with other benefits.

L/Certified ofers limited bum-

per-to-bumper coverage for up to six years and unlimited mileage from the vehicle’s original sale date.

Lexus’s program also features no deductible for covered repairs and complimentary maintenance covering the next four factoryrecommended services for two years or 20,000 miles.

The other winners for the mass market category were: Ford, Honda, Kia, Mazda, Mini, Mitsubishi, Subaru and Toyota. For luxury, it was: Audi, BMW, Infiniti, Jaguar, Land Rover, Lincoln, Porsche and Volvo.

“As a group of independent auctions of the highest caliber, ServNet has had a tremendous impact on the marketplace and continues to shape the industry. ServNet’s commitment to service pairs well with our own philosophy that ‘by combining consistency and flexibility, we can ensure that each and every customer receives the value of our best efforts, regardless of the size of that customer or the task at hand.’ We are excited to carry the ServNet brand at North Bay Auto Auction and look forward to an exciting future as a ServNet Auction.”

When you’re searching for a wide variety of the right vehicles for your customers, look to a nationwide industry leader. Look to Chase.

Chase is your source for:

A broad range of vehicle makes and models — from economy to luxury — upstream and through preferred auctions nationwide.

Convenient online and in-lane vehicle availability with on-site Chase remarketers.

Put Chase to work for you. Visit ADESA.com and Manheim.com.

Your Source. Chase.

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.

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 Chase. Retail/Loan and lease accounts are owned by Chase.

© 2014 JPMorgan Chase Bank, N.A. Member FDIC. All rights reserved. (14-221) 06/14

ServNet

standards that ServNet auctions are known for throughout the industry.”

The six-lane sale was founded by Morrow in 1993 as a public auction. Outgrowing its original site, the auction moved to a larger facility in 2000, and became a wholesale-only auction in 2001. It added a second sale day in 2003 and, in 2007, purchased an adjoining 22-acre parcel, adding a 100,000-square-foot indoor service center which houses the auction’s mechanic shop, detail center and state-of-the-art condition report center.

Pons doesn’t rule out adding future members.

At one time, ServNet represented 32 auctions, but that occurred as the industry was expanding and owners added sales.

Pons said ServNet isn’t intended to represent all independent auctions.

“There are 194 independents,” Pons said. “Certainly we don’t speak for every one. The independents have their own (organization) called the Independent Auction Group led by Lynn Weaver, David Blake and Charlotte Pyle.

“I only speak for the 21 ServNet auctions,” Pons said.

North Bay was also a good addition considering that – looking west

only fnance company you can’t aford to

“I opened my business in 1998 with about 15 diferent lenders and selling around 30 cars a month. In 2004 most of the lenders dried up and so did my volume and cash fow. My frst Portfolio Proft Express check was $47,000. Credit Acceptance not only saved my dealership, it’s allowed me to increase my sales. The program has been life-changing for me and my customers.”

of the Mississippi – there aren’t a lot of independent sales to choose from, Pons said.

At its meeting, ServNet also elected two new board members: Beth Barber of State Line Auto Auction, and Ashley Dietze of San Antonio Auto Auction. Both are second-generation members of their respective sales. Barber was a member of the first Auction Academy group, Pons said.

“If there is one theme that I can see in the independent auction community and certainly within the ServNet group of auctions, it is to maintain consistency through transition,” Pons said. “It’s slow, but there’s a fair amount of transition going on. A number of our member auctions are looking to the next generation for management and ownership, and ServNet’s board certainly reflects that process. We are all looking forward to the contributions that Beth Barber and Ashley Dietze will make as they serve on ServNet’s board, and know they are in good company with fellow next-generation owners Eric Autenrieth, Rob Thompson and Steve DeLucca.”

Other board members include: Chairman of the Board Patty Stanley (Carolina Auto Auction) and Brown (Missouri Auto Auction).

PEOPLE IN THE NEWS

Manheim Names Three General Managers

Manheim has promoted three leaders to general manager positions. Kevin Cook (Manheim North Car-

olina), Jesse Nelson (Manheim New York) and Bonnie Williams (Manheim South Houston) assumed their new roles May 2.

Cook joined Manheim in 2000 as a controller at Manheim Nashville. He worked in a number of roles including assistant general manager

and market reconditioning manager.

As assistant general manager at Nashville, Cook was responsible

for approximately 300 team members in customer-facing departments, including dealer sales and services, marketing/promotions, front ofce, arbitration and commercial accounts management. Cook consistently grew transactions and increased dealer revenues during his tenure. Nelson began his

career with Manheim Tucson as the arbitration manager in 2003. From this position he joined the sales team of OVE – Manheim’s 24/7 Bid or Buy Now wholesale vehicle marketplace.

He quickly found his niche working with clients to take their wholesale strategy online.

Nelson’s success led to additional roles of increasing responsibility within the organization throughout the West, including a return to

Manheim Tucson as general manager from 2012-2014.

Most recently, Nelson was the regional sales director for Manheim, where he worked to grow transactions and increase dealer revenues in the Southwest and Texas regions.

Williams joined Manheim in 1990 as a bookkeeper for Manheim Metro Dallas. She progressed to the role of general manager in 1999. Williams led the location until its consolidation with Manheim Dallas in 2011. As general manager, she delivered year-overyear revenue growth while improving customer service.

Most recently, Williams served as senior director of transportation logistics for Ready Logistics, supporting the South territory as the business line integrated with Manheim.

ADESA Taps VP of Dealer Services

ADESA has named Steve Dudash vice president of dealer services.

tion needs and providing business support, analytics and training.

“It is critical that we have the right leadership in place to lead our dealer services division, and Steve’s experience and impressive track record are a perfect fit,” said Stéphane St-Hilaire, CEO and president of ADESA.

In this role, Dudash will lead the company’s more than 300 dealer sales professionals nationwide to ensure best practices and standardized processes are implemented to deliver a premium customer experience.

This dedicated team focuses on serving dealers’ wholesale auc-

“For nearly 20 years, he has worked on both the buying and selling sides of the spectrum in the wholesale remarketing industry and understands the unique needs of our dealer customers.”

Dudash has been with ADESA since 2002, where he has held a number of management roles for ADESA and Openlane, including dealer sales professional, director of dealer services, director of dealer sales and director of strategic accounts.

FRANK CLINTON

General Manager

Lees Summit Dodge Chrysler Jeep Ram

Lees Summit, MO

“I’ve made a lot of friends here at KCI during the past 12 years. These people feel like family to me.”

KEVIN SIMONEAU

Sales Representative KCI Kansas City Kansas City, MO

“We understand our customers’ needs and expectations and continually strive to exceed them.”

RETAIL MARKETS

GEORGIA

David Mosley, owner, Cherokee Auto Group, Canton, Ga.:

“We’ve been in business 10 years and we have one location.

“I worked for a Ford dealership for 17 years and did very well. I was making a fantastic living in sales at the same place. I just got tired of working for someone else.

“We’re on the board of the Georgia Independent Automobile Dealers Association.

“We have probably 200 to 230 in inventory. I have around 100 or so available (for sale) at any one time.

“My goal is to keep 100 online available at any one time. We sold a bunch last year and got down to the 50s, (available online), though we still had the same amount of cars in inventory. So we kind of geared up to get it back where it was and more so.

Compiled by Jeffrey Bellant

“Now, if I had a lot full of 2013 Camrys, it would be a diferent situation. You have to turn that later model stuf

“For example, I bought a 1996 Olds 98 Regency with 40K on it. People love those cars. It has a great following.

“We sell about 30 units per month.

“(To source inventory) I buy a lot of stuf online. We buy stuf through Manheim. I have a buddy who’s a broker who scopes them out for me and lets me know when some cars come up. We go to the auction, too. But I don’t do that as much. I can pretty much stay here in the ofce and almost sustain the business that way.

“We do very little buyhere, pay-here. I’ve got some good sources for credit-challenged people. About 15 to 20 percent of my business is subprime.

“The average retail price

“I’ll buy something that’s a year old or 100 years old. My philosophy is, I make my money when I buy it. I don’t care if it sits here a year.

overall is about $10,000.

“I carry anything from the late 1990s to the late 2000s.

“Diesel trucks is one of my niches. If you put trucks and SUVs together, that would be about more than half of what we sell.

“I don’t focus on the model year. I focus on condition and mileage. I’ve got a 2015 Ford Fiesta out here with 9,000 miles and I’ve got a special edition 1976 Trans Am.

“(Reconditioning costs) depend on the car, but I would say it averages about $1,000. But when somebody comes to look at that car, it’s far superior to every other car they’ve looked at.

“Some of that work I do here, but I do have the option of farming the work out locally.

“We use Craigslist, eBay and word of mouth is tremendous for us.

“I recently sold a 1999 Jeep Cherokee. It had 180,000 miles, but it was a factory police package Jeep. That brought $7,500.”

TENNESSEE

Jim McAnally, CEO, Buy-Here, Pay-Here USA, Chattanooga, Tenn.:

“February was really good for us. We’re up year-overyear. But we’d always like to have more.

“We had a good tax season. It was abbreviated. It started late, hit a few good spurts and then died of more quickly than we expected.

“We have three stores. We sell 150-200 cars a month between the three locations. We have stores in Chattanooga, Cleveland and Dayton, Tenn.

“Our smallest store is in Dayton. We keep 50 cars in the lot there. It’s a country town, so we sell a lot of trucks.

“We do really well with Chargers. We would take four-door trucks by the truckload if we could get them at the right price. But it’s really hard to do that right now.

“Our average sales price is $13,600. We have started

buying nicer cars with fewer miles. We’re saving recon costs and trying to increase our margins.

“We ask for more on the down payments. We still carry cheaper cars.

“We’re starting to cast a wider net for our acquisitions. Right now, we’re getting our inventory from a 20-mile radius. But I have some buyers down in Florida and we’re moving into Texas. I’d rather skim the top than dive deep just because we need inventory.

“We’re planning on opening two more stores this year.

“We put GPS units on all our cars.

“We have centralized recon for all three stores. When the car is done, it goes through the photo booth. When the car reaches the dealership, it’s ready to sell.

“We recently sold a 2009 four-door Dodge Ram with 20-inch wheels. It rolled of the truck and 10 minutes later we sold it for $14,999.”

• CA SH f or y our auto notes – Bulk P urchase

• P ay ment Strip P rogram ( 3 to 15 months) Dealer collects.

• Reduce administratv e burden of collecton calls and taking cash.

• Build y our inv entory to sell more.

• We are y our source f or capital and serv icing solutons.

• Quick , simple and consistent f unding process

WHOLESALE MARKETS

MASSACHUSETTS

Michael Cooley, general manager, Quincy Auto Auction, Quincy, Mass.:

“We’ve been here for about 25 years. We have six lanes.

“We average about 1,200 cars a week. We’re up about 150 to 200 on average from this time last year.

“It’s a strong market. The independent auctions are still pretty strong. We’re also in a good market area. We’re just outside the metro Boston area. We’re easy to get to from New Hampshire, the Cape or central Massachusetts.

“We’ve been very fortunate with sales percentages. They average between 68 and 72 percent. Pretty much, the last couple of years, it’s been like that. But we have our weeks where we go down to about 65 percent.

“We’re fortunate and we’ve been lucky. We have a lot of good people on the staf. We also have a couple of good salespeople out

knocking on doors.

“Other than that, I think, it’s just taking care of people. You can’t take anybody’s business for granted.

“You have to earn their business every week like they are a first-time customer. You can’t get complacent with people.

“On average, if we have 1,100 cars, it’s not uncommon for us to (draw) 1,000 dealers.

“We have a good sale time, Monday mornings at 11 a.m. It’s after rush hour trafc, so you can get in your dealership, do some business, then go to the auction and get back before rush hour trafc (in the evening).

“You get a lot of guys with the philosophy that if you don’t sell the car then you turn it in 90 days. That’s good. Those are pretty successful dealers.

“A lot of people floor plan and we do a lot of floor planning with NextGear Capital. I think the floor plan companies are watching their

inventories a lot closer, too. Even they are telling the dealers you have to cash this out.

“I’d say we’re probably 80 percent dealer consignment.“I’d say the average price is between $3,000 and $5,000.

“(On the non-dealer side) we do some business with local banks and credit unions and with Enterprise. We also do a lot with N.E. Adjustment Managers Association, which is all the banks and credit unions together. That’s a lot of it.

“We do an equipment sale twice a year, in the spring and fall. Usually that will be things like front-end loaders, back hoes and construction equipment.

“Trucks, naturally, are hot pretty much everywhere. I don’t know if anything is really soft.

“We also brought on a U.S. Marshal’s sale that runs once a month on the third Monday of each month.

“Those are cars and truck seizures (for the most part).”

TEXAS

Bobby D. Clark, president, U.S.A. Auto Auction, Amarillo, Texas:

“We’ll have been in business 28 years this July and we have two lanes.

“Lately, we’ve been running about 250.

“We’re very fortunate that we do have several newcar stores selling their cars. Most of them have quit selling to wholesalers. So the wholesaler consignment is down.

“Our average sales percentage is about 60.

“We did have a tax season, but it was about 45 seconds long. The last two or three years it seems you get a little bit of influx and then it’s over with.

“(Attendance) depends on weather. We’ll get anywhere from 60 to 120 dealers. Earlier this year we had some unseasonably cool weather.

“We get dealers from Texas and New Mexico. We have a guy who comes in from Michigan and oth-

Compiled by Jeffrey Bellant

ers from South Dakota. The guys from South Dakota were buying lots of stuf until the oil (business dropped). They’re still buying, but just not buying by the truckloads.

“We run about 60 percent to 65 percent dealer consignment. Most of our fleetlease stuf is trucks.

“We run in-ops nearly every week. There for a while, we had some pretty heavy players (buying the salvage stuf ). But the price of steel has gotten so ridiculously low, the (units) hardly bring anything.

“The average price in the regular sale is probably $6,000 to $7,000.

“We’ve been doing really well with classic cars and street rods.

“Things could be better, but all I know is to just keeping plugging.

“I told my friend, I’d give up but I don’t know where the ‘give-up spot’ is and – even if I got to it – there would probably be a line.”

MONTHLY DEALER CONSIGNMENT AVERAGES

COMPACT CAR

Feb 2016 $5,055 102,218

Mar 2016 $5,261 101,402

Apr 2015 $5,851 100,410

May 2015 $5,680 101,407

Jun 2015 $5,418 102,032

Jul 2015 $5,372 101,084

Aug 2015 $5,147 102,741

Sep 2015 $4,932 104,230

Oct 2015 $4,933 103,050

Nov 2015 $4,923 103,246

Dec 2015 $5,017 101,933

Jan 2016 $5,092 101,968 YTD AVG: $5,391 101,751

FULLSIZE CAR

Feb 2016 $3,578 117,219

Mar 2015 $3,528 117,021

Apr 2015 $3,982 115,393

May 2015 $4,103 112,477

Jun 2015 $3,879 113,940

Jul 2015 $3,753 115,209

Aug 2015 $3,866 114,420

Sep 2015 $3,809 113,866

Oct 2015 $3,862 112,994

Nov 2015 $3,733 114,003

Dec 2015 $3,753 114,282

Jan 2016 $3,954 112,752 YTD AVG: $3,949 113,716

PICKUP

Feb

Feb

Mar

Apr

May

Jun

Jul

Aug

SPORTS CAR

Jan 2016 $11,858 97,423 YTD AVG: $12,049

MIDSIZE CAR

DISCONNECTED JOTTINGS FROM TONY MOORBY

Trafc around Nashville is becoming a horrendous problem. There has been precious little money spent on infrastructural development for

Part of the problem, like many cities, is the lack of funding available to make improvements. Heck, we don’t have enough money to fix

Tony Moorby

• 40-year veteran of the industry

• President from 1997–2000 of ADT Automotive

• Served as ADESA’s executive vice president of sales and marketing

• Moorby & Associates 2006–present

• Awarded the Ring of Honor by NIADA

• NAAA Hall of Famer

the future expansion of the city. Current projects, started years ago, are still underway to solve problems that existed years ago.

Nashville’s growth has been something of a phenomenon and one of its neighboring cities, Murfreesboro, 30 miles to the southeast, was the 13th fastest growing city in the U.S. in 2015. The commute is now at least an hour at peak times. It used to be that you could go anywhere in Nashville within 10 minutes.

potholes from last winter, let alone do anything to provide for the future.

I think folks around here are coming to the conclusion that a gas tax hike is inevitable – there hasn’t been one for 20 years and whilst gas prices have moderated, it would seem that timing is in such a move’s favor. You have to wonder if the funds collected for road improvements over the years have been diverted to other local government expenditures like schools for

By Miles Mellor

Across

1. De Tomaso product

5. Aston Martin model

9. Sure!

10. Toyota sedan

12. Tata Motors’ continent

13. Kia model14. Racetrack shape

16. Pontiac Firebird Trans___

17. Miata is one of its models

19. He did well with an ancient boat

22. Basketball org.

23. 24 across model

24. They released an IA sedan

26. Used car homes

28. Isuzu SUV

31. Throughways

34. Auto’s grill protector

35. Crossing over a bridge

37. Pleasure vehicle, for short

38. Badge

39. Dodge sedan

42. Buick model

44. “Pimp my ____” show

47. Beast of burden

49. ___ ease

50. Not that great

51. For example, briefy

53. Honda SUV

54. Buick SUV Down

1. Company that made a Prowler and a Caravelle

2. XTerra or Versa

3. Lotus sports car

4. Car protection system

instance, which are in just as urgent a need.

Apparently, the Feds have done it with the fees we pay on an airline ticket. The money is supposed to go to pay for those numbskulls at the Transportation Security Administration. Administration, my hat. They couldn’t administer their way out of a paper bag.

They just fired their assistant administrator for security operations, Kelly Hoggan. Under his watch, security auditors successfully sneaked weapons past checkpoints at various airports yet Hoggan received $90,000 as a bonus. He should be made to give it back.

That doesn’t let his bosses of the hook, although they are operating on the principle that poop flows downhill; that is until it hits the fan, then they all duck from the line of fire.

We taxpayers are forking over billions of dollars for a service that is failing in every sense. We should expect nothing less than exquisite,

flawless operations where our security is concerned. We have come to accept that we have to forgo some convenience at the airport while going through the security lines in the name of safety. But two and three hour delays just signify how inefcient the “administrators” are. They have all the necessary information at their fingertips as to how to plan for busy periods. They have schedules of takeofs and landings, they know in advance how many passengers are booked on each plane, and as long as airlines charge for luggage, they know that people will take carry-on bags. They have access to scheduled events in each city which may predicate an unusual, although predictable, busy time. You’d think they’d have a computer program which spits out a list of how many operatives and stations are needed at various

times of the day – a week or even a month in advance. It’s a bit like a service workshoploading schedule at any dealership in this country. Heck, we were doing it in the ‘60s.

Maybe the TSA should give some of our fees to the airlines to pay the luggage charges. American Airlines complained that their customers were missing flights. Does anyone see the irony here? They are contributing to their own problem. Where Southwest Airlines have their own terminals and security checkpoints it seems their lines are shorter and more efficient – they don’t charge for luggage.

I now avoid flying like a dose of the Zika virus and would sooner drive in heavy trafc than sufer the rigors of the airport – but then I’m contributing to the other growing problem. Let’s start over …

5. Indy 500 sound

6. Weight, for short

7. Terrano and Rogue

8. What Kelly Blue Book does, rates

11. Roman 51

15. Angeles or Gatos

16. Yellowfn tuna

18. BMW sports, 2 words

20. Speed up

21. Working

25. Automobile pioneer

27. Chevy SUV

28. Pitcher’s pride

29. Honda model name before the Accord

30. They set emissions targets

32. Website ending

33. Chevy compact

34. Classic bug name

36. Compass point, abbr.

40. Agree silently

41. “The ____ and The Furious”

43. Full-size pick-up truck

45. Small compact car no longer in production

46. Long fsh

48. Camry option

52. Peach state, for short

AROUND THE BLOCK

SALE MARKS FOUR DECADES

The Greater Kalamazoo Auto Auction, an XLerate Group auction, recently celebrated its 40th anniversary with more than $15,000 in cash and prizes awarded to dealer customers who attended the sale.

Don DeVries founded the auction in 1976 at what the auction

calls the “Crossroads of Michigan.” The original two-lane sale has grown into a five-lane 26,000-square-feet facility on 65 acres.

The property includes a 9-bay reconditioning facility, a fullservice mechanical repair shop, a restaurant and snack bar.

Greater Kalamazoo also maintains its own transportation department and will arrange for pick-up or delivery of any vehicle.

Greater Kalamazoo joined the XLerate Group in May 2015.

In December, the auction added an additional Fastart sale on the first and third Thursday of every month that begins at 9 a.m.

“By taking advantage of the many services offered by Greater Kalamazoo Auto Auction, each customer expands his own automotive marketing efforts and benefits in terms of time and financial return,” said Daryl DeVries, general manager.

“Above all, each customer, whether buying or selling, returns time and time again because of the special qualities that set GKAA apart from the rest. We have a strong team of loyal employees that go the extra mile each and every week.”

Compiled by Jeffrey Bellant

GM Financial Honors Auctions

General Motors Financial Company Inc. named Grand Rapids Auto Auction as 2015 Open Sale Auction of the Year and ABC St. Louis as the 2015 Closed Sale Auction of the Year.

This marks the first year GM Financial has recognized two winners – one for open and one for closed sale performance.

“I have been privileged to partner with GM Financial for more than 10 years, and it’s an honor for GRAA to be recognized with this coveted award,” said Mark Capel, general manager.

ABC President Jason Hockett said that GM Financial runs at some very strong auto auctions, so to be honored as the top-performing auction is a testimony to the hard work and service of the ABC St. Louis staf Recipients were chosen after reviewing each of the company’s 46 auction partners.

We invite news items and top-quality photos from our readers to be considered for “Around the Block.” Please include the name of a contact person and a telephone number. Send items and photos to: Jeffrey Bellant. Mail: Used Car News, 24114 Harper Ave., St. Clair Shores, MI 48080. Fax: (586) 772-9400 e-mail: jeff@usedcarnews.com

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