Used Car News 11/21/16

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Competition Grows Among Dealer Groups

By Ted Craig

CarMax Inc. continues to expand at a strong pace while its competition grows.

The used-car superstore chain recently unveiled plans to build its largest multi-purpose facility.

The 35-acre property located in Murrieta, Calif., will serve as a reconditioning hub that will feed inventory to several of the company’s stores in southern California. The location will also house CarMax’s first four-lane auction facility on the West Coast.

In addition to production and auction services, the facility will

have a separate building for selling used cars to the general public. The location has the capacity to stock up to 400 vehicles at a time.

CarMax is now hiring more than 250 associates to staf this location, which is the company’s largest hiring efort for one location to date.

The store is scheduled to open in February 2017.

CarMax will open another new Los Angeles area store in Palmdale in February where the company will hire an additional 60 associates.

In addition, CarMax is recruiting for 2,500 positions in locations across the country. Of those, more than 1,200 positions are for auto-

motive service careers.

CarMax also opened a store in Daytona, Fla., last month.

All of this comes after AutoNation Inc. announced plans to get back in the used-car superstore business and Sonic Automotive Group Inc. announced it will continue to add Echo Park stores in several markets.

AutoNation has identified 25 AutoNation USA potential sites in its existing markets, of which five are expected to open in 2017.

The stores will give consumers the chance to buy AutoNation certified vehicles and have them serviced at any AutoNation location, including its franchise stores.

AutoNation will follow the same sales philosophy as CarMax, with no-haggle pricing and non-commissioned salespeople.

AutoNation CEO Mike Jackson said the used-car stores are a response to the cyclical nature of new-car sales.

“We need a strategy that allows us to take our destiny in our hands,” Jackson said.

AutoNation had started out as a used-car-only company, like CarMax, but abandoned that strategy in 1999 when he closed all its standalone used-car stores over the course of the next year.

Continued on page 10

Wholesale Prices Continue Decline as Volumes Rise

The long-expected surge in wholesale volumes is starting to push down usedcar prices.

Average auction volume remains at higher levels than in previous years with volume in the third quarter averaging roughly 11 percent higher year-over-year, due to sustained high levels of lease-returned vehicles, Kelley Blue Book reports.

Manheim reports that wholesale prices declined 0.7 percent in October when adjusted for mix, mileage and seasonality.

Non-seasonally adjusted prices declined 2 percent during the month.

The Manheim Used Vehicle Value Index stood at 126 for October, an increase of 0.6 percent from a year ago.

“Wholesale pricing has shown some easing of late, but it is not particularly weak,” said Manheim chief economist Tom Webb.

“This is in line with our beginning-of-the-year expectation as we fully expected the wholesale supply challenges would be more

daunting in 2017 and 2018 than in 2016.”

Black Book reports that the average price of a used vehicle for model years 201115 depreciated by 2.9 percent in October, a noticeable single-month change from the 2.3 percent decline during September. Cars overall saw lower retention in October, ending the month down 3.2 percent compared with a 2.6 percent decline in September. Trucks as a whole finished down 2.6 percent in October.

All vehicles are currently averaging a 12-month depreciation change of 16.8 percent.

“We expect pockets of vehicles to see accelerated depreciation as the year comes to a close,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics. “Most car segments certainly fall into this category, but we’ll be paying special attention on those truck and utility segments that begin to show higher depreciation.”

Compact cars saw the

highest drop in October at 3.6 percent. Vehicles in the compact car segment finished October averaging $8,393, an almost-20 percent decline from a year ago ($10,464).

Small pickups saw the strongest retention in value, dropping just 0.6 percent from September. Trucks in the small pickups category finished October averaging $19,383, an 8.1 percent decline from a year ago.

Domestic cars are highlighting the typical accelerated depreciation typically felt entering the fourth quarter.

Over the last three months, domestic cars have dropped 9.9 percent in value, averaging more than 3 percent per month decline over that time.

Kelley Blue Book reports that rising manufacturer suggested retail prices (MSRPs) are not translating into

higher retention values for 1- to 3-year-old vehicles at auction.

“Despite the average cost of a 1- to 3-year-old vehicle at auction remaining relatively unchanged over the past several years, the average retention value of these vehicles fell by roughly 4 percent in the third quarter,” said Sean Foyil, analyst for Kelley Blue Book.

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NEWS BRIEFS

Credit Acceptance Sees Higher Net Income for Latest Quarter

Credit Acceptance Corp. announced consolidated net income of $85.9 million for the three months ended Sept. 30 compared to consolidated net income of $74 million for the same period in 2015. Adjusted net income, a nonGAAP financial measure, for the three months was $92.4 million.

For the nine months ended Sept. 30, consolidated net income was $245.2 million, compared to consolidated net income of $219.7 million.

Copart Expands on Coasts

Copart Inc. announced the activation of reserve land in Georgia and Virginia, in addition to the expansion of existing locations in the Carolinas and Florida.

The land expansions and activations came as an immediate response to Hurricane Matthew, allowing Copart’s Catastrophe Response Team to provide even greater service in response to weather-related damage.

In addition to new land added in response to Hurricane Matthew, Copart has already announced expan-

sions of existing locations in Florida and North Carolina, along with a new location in Georgia this year.

The land has provided Copart the capacity needed to meet immediate demand brought on by extreme weather.

Copart also announced the opening and first online auction at its 14th location in California. This is Copart’s sixth location in the southern California market.

Manheim Reports Increased Digital Activity

Manheim’s third quarter Digital Trends report shows a 45 percent rise in upstream and ofsite transactions.

More than 416,000 vehicles were sold through digital channels in the third quarter.

Nearly 85,000 average monthly users visited Manheim’s mobile website and apps in the quarter, resulting in a 13 percent increase in trafc over prior year.

In the third quarter, MMR on Mobile generated more than 1.6 million visits, and VIN Scan was used more than 3.5 million times.

Simulcast continued to grow in the quarter with a 25 percent increase in transactions versus prior year.

About half of the active dealers attending a Manheim sale are now using Simulcast at least once a month.

There was a 14 percent increase in overall transactions on OVE compared to prior year. Transactions facilitated by independent auctions were up 12 percent in the third quarter compared to prior year.

IAS Buys AuctionVcommerce

Integrated Auction Solutions has acquired a percentage of ownership in AuctionVcommerce, a provider of online auction infrastructure support services.

The company ofers an online clerk simulation and certification training system geared towards stabilizing the online bidding experience, reducing block errors and enabling clerks with the skill to incite online participation.

AuctionVcommerce will continue to ofer services to any auction looking to advance its online initiative.

Santander Reports Results

Santander Consumer USA Holdings Inc. announced net income for the third quarter of $214 million. Auto originations totaled $5.2 billion.

Chrysler Capital lease originations were $1.3 billion, down 17 percent. Chrysler Capital retail originations were $1.9 billion, down 39 percent. Net finance and other interest income was $1.2 billion, down 3 percent

PassTime Launches Advanced Device

PassTime announced the launch of the Elite 5, an LTE Cat 1-based telematics device serving consumer, franchise dealership, fleet and specialized finance company markets. The Elite 5 is the first LTE Cat 1-based GPS device certified on Verizon’s 4G LTE network. In addition, the Elite 5 will feature advanced power-saving functionality. PassTime has been a member of the Verizon Partner Program for nearly two years since launching a CDMA device on Verizon’s wireless network in 2014.

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ADESA Enters Chicago Market

ADESA has ofcially opened its new ADESA Chicago auto auction. Parent company KAR Auction Services invested approximately $40 million to develop the auction.

“As one of the largest car markets in the United States, Chicago is a top priority in our strategic growth initiatives,” said ADESA CEO Stéphane St-Hilaire.

“There are nearly 1,100 car dealers within a 100-mile radius of our centrally located Hofman Estates auction facility. Our goal is to provide our services to the majority, if not all, of those customers.”

ADESA Chicago hosted its first sale Oct. 28.

The auction is located between six major interstate systems and near O’Hare International Airport.

The 167,000-square-foot facil ity is built across 65 acres and is currently hiring 100 employees. During the first sale, customers were introduced to some of the new technology and services, including mobile iOS applications that allow dealers to pay for their vehicles, re quest post-sale inspections and get gate passes.

In related news, KAR reported its third quarter financial results. For the third quarter, the company re ported revenue of $773.8 million as compared with revenue of $666.7 million for the third quarter of 2015. Net income for the third quarter of 2016 increased to $54.4 million, as compared with net income of $52.3 million in the third quarter of 2015.

DealerSocket Launches New Tool for Independents

By Ted Craig

SAN

- DealerSocket rolled out its new Blackbird CRM and iDMS tools for dealers at its recent User Summit.

Both systems underwent more than 18 months of user experience testing as developers studied exactly how dealers would use the software.

The company says the result is an easy-to-use interface for even the highest-turnover dealership.

“The software is customizable by role, so individual users have immediate access to the functions they use every day via a personalized, intuitive dashboard, said CEO Jonathan Ord.

The iDMS tool is an integrated solution for independent dealers that includes accounting and desking, a finance portal, service shop management, workflow and queuing

processes, and reporting analytics.

“This platform can help small to mid-sized dealerships get to the next level, as well as allow larger stores to reach maximum efciency in their operations,” said Jef McCurry, director of product and engineering.

“It will scale as the dealership grows, so it won’t be faced with future software decisions.”

The platform incorporates aspects of the AutoStar and DEXDMS systems, two companies DealerSocket acquired last year.

Dealers who used those systems will be able to reorganize past reports using new criteria

The system is designed for buyhere, pay-here dealers, ofering tools such as stacked promise-topay and dynamic queuing functionality.

All the data for the system is stored in the cloud.

EPA Closes Junk Car Case

The U.S. Environmental Protection Agency has announced an agreement with High Plains Motors Inc., a General Motors dealer, resolving alleged hazardous waste violations related to the improper management of used oil, paint solvents, lacquer thinner, and other materials at an automobile dealership and service center at 331 Front Street in Wolf Point, Mont.

As part of the settlement, High Plains Motors will pay a penalty of $5,758 and complete a junk vehiclerecycling project on the Fort Peck Indian Reservation.

The High Plains Motors automobile dealership and service center is located on privately held land within the exterior boundaries of the Fort Peck Indian Reservation. EPA inspections in July 2015 revealed that the company had violated provisions of the Resource Conservation and Recovery Act (RCRA) by failing to label used oil containers and respond to releases of used oil at the facility.

EPA inspections also found that the company failed to properly manage paint solvent waste, oil/water/antifreeze mixture, and lacquer

thinner on site. EPA issued High Plains Motors a compliance order on Sept. 29, 2015 and the company has since taken steps to secure compliance with hazardous waste regulations.

This action resolves High Plains Motors’ liability for the alleged RCRA violations by securing a penalty and a supplemental environmental project that will recycle approximately 86 abandoned vehicles on the Fort Peck Indian Reservation. After seeking input from the Fort Peck Assiniboine & Sioux Tribes and EPA, High Plains Motors agreed to work with a local salvage company, Trader’s Den, to remove abandoned or inoperable vehicles on Tribal-owned property in the Wolf Point and Poplar areas of the Fort Peck Indian Reservation. These actions will remove potential sources of pollution from the vehicles, including oil, transmission fluid, coolant, brake fluid, gasoline, and batteries.

High Plains Motors will properly dispose of or salvage all recovered materials and will deposit vehicles at a local junkyard for crushing and recycling.

Jury Indicts Manager in Service Contract Scam

A federal grand jury indicted a former dealership manager for stealing more than $900,000 from Maloy Ford Lincoln and Maloy Automotive Group, which does business as Maloy Chrysler Dodge Jeep Ram in Jasper, Ala.

A 15-count indictment filed in the U.S. District Court, charges Robert Edwin Maloy with one count of conspiracy, eleven counts of wire fraud and three counts of mail fraud.

Maloy was the general manager and president of the Maloy Ford and Maloy Chrysler dealerships from 2010 until December 2013. Maloy held a minority ownership interest in Maloy Ford and Maloy Chrysler.

Prior to holding the executive positions, Maloy operated a used-car dealership known as Maloy Automotive.

As general manager and president, Maloy was responsible for the day-to-day operations of Maloy Ford and Maloy Chrysler, which included overseeing the monthly financial statements and entering into contracts and agreements with outside vendors on behalf of the dealerships.

According to the indictment, Maloy agreed with an individual employed by Premium Dealer Products, a broker that sold vehicle service products, to inflate the cost of various items. The inflated cost, referred to as an “over remit-

tance,” was included in the amount charged to the customer, then paid to the vehicle service provider via the monthly Maloy Ford or Maloy Chrysler dealership checks.

The overage then was passed back from the vehicle service providers to Premium Dealer Products, and finally was hand delivered to Maloy in the form of a check payable to Maloy Automotive. Maloy caused the checks to be deposited into the Maloy Automotive bank account, an account Maloy held that was unaffiliated with either dealership.

Maloy concealed the over remittance checks payable to Maloy Automotive from the owners of Maloy Ford and Maloy Chrysler.

Additionally, in 2009 Maloy, on behalf of Maloy Automotive, borrowed $250,000 from Access Insurance Services. The principal of Premium Dealer Products helped Maloy obtain the loan.

Between April 2011 and April 2013, Premium Dealer Products withheld some of the over remittance funds from Maloy Ford and Maloy Chrysler and used the funds to make loan payments on behalf of Maloy for the Access Loan.

The maximum punishment for wire fraud and bank fraud is 20 years in prison and a $250,000 fine. The maximum punishment for conspiracy is five years in prison and a $250,000 fine.

DAY ON THE HILL

INDEPENDENT DEALERS LOBBY LAWMAKERS IN

WASHINGTON

By Jeffrey Bellant

The National Independent Automobile Dealers Association’s annual Day on the Hill in Washington, D.C., continues to boost the group’s stature in the nation’s capital, members said.

Independent dealers from across the country descended on Washington in September for the fourth year to meet with lawmakers, listen to regulators and make their pitch on behalf of the industry.

The event is dubbed the National Leadership Conference/ Legislative Summit.

“It was the best one we’ve had yet, by far,” said Shaun Petersen, NIADA’s senior vice president, legal and government affairs.

“We had roughly 180 dealers and we were able to engage Congressional offices with 14 teams, including 10 state groups.

The footprint that we were able to leave on the Hill was just fantastic.”

CRUZ CONTROL: U.S. Sen. Ted Cruz, in shirt and tie (above), discusses regulation and recall issues with members of the National Independent Automobile Dealers Association’s Texas delegation during the group’s annual Day on the Hill event. In the photo below, Congressman Roger Williams (center), also a franchise dealer, poses with Texas IADA members.

The Day on the Hill is the highlight of the event, when teams of dealers and association members meet with people from congressional offices to discuss legislative issues.

Jeff Martin, executive director of the Texas Independent Automobile Dealers Association, said the event improves each year.

“The biggest thing I think is that the states are

The group kicked off its National Leadership Conference with presentations by the Federal Trade Commission, Department of Labor and Department of Justice.

Ralph Reed, president of public relations firm Century Strategies, was the keynote speaker.

taking more ownership, trying to build relationships (with lawmakers) at the state level,” Martin said. “It makes all the difference in the world if you know the legislator back in district before you walk into a meeting in Washington.

“That way, they know a

little bit about your business, they know about their district and they know you’re active in the community. It’s just an easier conversation.”

Martin said Texas IADA has benefited from building relationships with its state lawmakers who have since gone on to become congressmen. It makes it easier to build on the relationship, he said.

NIADA focused on two issues this year: recalls and regulatory concerns regarding the Consumer Financial Protection Bureau.

The meetings came less than three weeks before a federal court ruled that the CFPB’s structure was unconstitutional.

Petersen said the group was lobbying for the Financial Choice Act. That bill would rollback regulatory changes made as a result of the Dodd-Frank Act.

Petersen said the bill would change the CFPB structure in terms of the director’s autonomy, creating a bipartisan structure similar to other regulatory agencies like the FTC and other agencies

On the recall issue, Petersen said NIADA is opposed to any legislation that would prohibit dealers from selling vehicles

that have open recalls.

One reason is that independent dealers have no control over recalls and repairs, which are determined by the manufacturer.

Petersen said NIADA “strongly encourages” members to disclose the existence of any open recall and get it fixed if there is a fix available.

NIADA is in favor of legislation that would speed up recall fixes, but legislative restrictions on the dealers do not accomplish that goal, Petersen said.

The result of the presidential election may have an effect on NIADA’s efforts as Presidentelect Donald Trump has promised to roll back some regulations on businesses.

“No one predicted that one party would control both chambers of Congress and the White House,” said Steve Jordan, NIADA’s chief executive officer.

“We did not see that coming. It does put NIADA on offense and takes us out of a defensive position. We’ll have to see how it all plays out, but the landscape has definitely changed in favor of small business.”

Jeff Baker of Car City in Grand Rapids, Mich., attended the event for the second time.

Baker chairs the NIADA’s Buy-Here, Pay-Here Commission that met in Washington. He said getting to meet with officials and interact with regulators is a rare opportunity. “It’s also good to get the chance to listen to the regulators,” he said. “To me that’s always extremely valuable and gives us a chance to ask questions. They’re not there to shoot at you. They’re there to try to help you. I find that extremely valuable.”

Baker said people in D.C. “really do want our input.”

He said lawmakers want to hear from the people in the field talk about the impact of legislation.

“It doesn’t matter what side of the aisle they sit on,” Baker said.

Baker said the NIADA is getting some attention as they make these lobbying visits an annual effort.

“We’re starting to get a little traction,” he said.

“The night before (visiting Capitol Hill) we had four or five congressman attend our cocktail party and speak to us.”

Baker credited Jordan and Petersen for their prep work in making these successful and productive.

He urges dealers to get involved.

“We really are having an impact,” Baker said.

State Settles with Dealer Over Deceptive Ad Claims

The Pennsylvania Ofce of Attorney General has reached a settlement with a Philadelphia used-car dealership, and its owner, alleged to have engaged in deceptive business practices, which included failing to honor coupons that advertised discounts on vehicle purchases.

The settlement reached with Haim Shmilovitch, and his business, Eden Vehicle Marketing Inc., was the result of an investigation by the Ofce of Attorney General’s Bureau of Consumer Protection.

The business is commonly known as Eden Auto Sales.

The settlement calls for eligible consumers to receive restitution of $1,000 each.

In order for consumers to be eligible, they must provide adequate documentation that confirms they purchased a vehicle from Eden Auto Sales and presented a coupon that was not applied to the purchase price of the vehicle.

Consumers have until Dec. 16 to file a complaint for restitution with the Attorney General’s Bureau of Consumer Protection.

According to the settlement, reached in the form of an assurance of voluntary compliance, advertisements for various vehicles ofered for sale at the dealership included a coupon for “$1,000 to use as cash…”

However, the coupons, in very small font, featured the words ‘up to’ to quantify the amount of the coupon.

Jackson said the issues that drove that decision, such as stores that were the wrong sale, “are resolved today.”

Meanwhile, Sonic opened two more Echo Park locations in the third quarter and plans to open a sixth Colorado store in the first half of 2017. In addition, Sonic will break ground on its first Texas location in the first half of 2017 and plans to move into the Carolinas next year.

Sonic CEO Scott Smith said the newest Echo Park stores are already at volumes the first two stores were at after six months.

Also listed in small font was the limitation that the coupon ‘must be presented prior to negotiations,’ the settlement alleges.

It was also alleged that, in certain instances, Eden Auto Sales failed to apply a discount, whether it was the full coupon amount or a lesser amount, to the purchase price of the motor vehicles when consumers presented the coupons.

Other deceptive business practices alleged in the settlement included the dealership advertising “Rates as Low as 1.9%” without stating that the rate was an annual percentage rate.

Eden Auto Sales also allegedly advertised numerous vehicles for sale, with the statement “$0 DOWN,” but failed to include the terms of repayment and the annual percentage rate.

It was also alleged that the dealership further stated in certain advertisements that “Dr. Credit has the prescription. Fix Your Credit Here!” without fully disclosing how they would accomplish that representation, according to the settlement.

The settlement also required Shmilovitch and Eden Auto Sales to pay the state $2,000 in civil penalties and $2,000 in costs of investigation.

The payment of civil penalties will be distributed to the Department of Treasury.

this one in the Pittsburgh market.

These new stores are taking advantage of new technologies as well as higher demand for used cars. For example, 75 percent to 80 percent of inventory at Echo Park stores is priced without human input.

The question becomes what impact these stores have on existing dealers.

“They won’t increase demand,” Hofer said. “They will just shift where consumers buy their cars from.”

Sonic also purchased AutoMatch, a group of four independent usedcar stores in Georgia and Florida. Sonic will convert the AutoMatch stores into Echo Park operations.

George Hofer, an economist at the University of Richmond, said the moves by these large chains are part of a trend of new entrants into the used-car business. This trend includes start-ups such as Carvana, which just opened its 18th store,

Not all these new stores will succeed either. Asbury Automotive Group Inc. is struggling with its Q brand of used-car stores.

“It’s an area where, quite frankly, we didn’t live up to our internal expectations,” said Asbury CEO Craig Monaghan. “And it’s going to get a tremendous amount of focus from us as we move forward.”

Asbury is moving away from Q as a standalone brand and instead will combine it with existing brands under the Asbury umbrella.

FTC Updates Used Car Guide to Include More Info

The Federal Trade Commission has announced final amendments to its Used Car Rule.

The FTC has sought public comments on a series of proposed changes to the Rule (formally known as the Used Motor Vehicle Trade Regulation Rule), which requires car dealers to display a window sticker, or “Buyers Guide,” on used cars ofered for sale.

The guide discloses whether the dealer is ofering to sell a used car “as is” (without a warranty), or with a warranty.

If the sale is with a warranty, the guide discloses the terms and conditions, including the duration of coverage, the percentage of total repair costs the dealer will pay, and the vehicle systems the warranty covers.

In those states that do not permit “as is” used car sales, dealers must use an alternative Guide that discloses whether the sale is with a warranty or with implied warranties only.

In December 2012, the FTC

sought public comments on proposed changes to the Buyers Guide as part of its systematic review of all of the agency’s rules and guides.

In response to comments received, the agency sought comments on additional proposed changes to the Used Car Rule and invited comments on alternative approaches that public commenters proposed for the vehicle history disclosure and the “As Is” statement.

The commission is revising the Buyers Guide by:

•changing the description of an “As Is” sale;

•placing boxes on the face of the Buyers Guide that dealers can check to indicate whether a vehicle is covered by a third-party warranty and whether a service contract may be available;

•providing a box that dealers can check to indicate that an unexpired manufacturer’s warranty applies;

•adding air bags and catalytic converters to the Buyers Guide’s list of major defects that may occur in used vehicles;

•adding a statement that directs consumers to obtain a vehicle history report and to check for open recalls. The statement also instructs consumers to:

•visit ftc.gov/usedcars for information on how to obtain a vehicle history report; and

•visit safercar.gov to check for open safety recalls;

•adding a statement, in Spanish, to the English-language Buyers Guide, advising Spanish-speaking consumers to ask for the Buyers Guide in Spanish if the dealer is conducting the sale in Spanish; and

•providing a Spanish translation of the statement that dealers may use to obtain a consumer’s acknowl-

edgement of receipt of the Buyers Guide.

The amended rule permits dealers to use their remaining stock of Buyers Guides for one year after the efective date of the amended rule.

The commission vote to publish the Notice of Final Rule in the Federal Register was 3-0.

PEOPLE IN THE NEWS

ADESA Names General Manager

ADESA announced that Kevin Rhoads has been promoted to general manager of ADESA Kansas City,

effective immediately.

The previous general manager of ADESA Kansas City, Harold Chapman , now leads ADESA Nashville.

Rhoads has more than 15 years of experience in the automotive industry and more than 20 years of

management experience overall. He has served as dealer sales and services manager at ADESA Kansas City since May 2014.

Previously, Rhoads was the sales and marketing specialist at Naked Lime.

Rhoads holds a bachelor’s degree from the University of Central Missouri.

Spireon Fills Top Slots

Spireon Inc. announced the appointment of Todd Abbott , Carla Fitzgerald and Rick Gruenhagen to Spireon’s executive team, leading sales, marketing and technology functions respectively.

Joining recently appointed CEO Kevin Weiss, the new leadership additions will be

instrumental in driving Spireon’s transformative next phase of growth.

Abbott joins as chief revenue officer for Spireon, where he will accelerate revenue growth for the company’s current vehicle finance, new car, fleet and asset businesses, as well as open revenue opportunities in new business segments. He has over 30 years of experience in sales, service and marketing roles with notable companies such as IBM, Cisco and Avaya.

Previously, Abbott was the president and CEO of Tely Labs. Fitzgerald joins as chief marketing officer, overseeing all corporate and product marketing functions, as well as Spireon’s brand evolution and entry into new mar-

kets. Prior to joining Spireon, Fitzgerald drove high-performance marketing teams and strategies at top technology companies in the wireless, enterprise and consumer software arenas, including CA and Quest Software, most recently serving as chief marketing officer at Smith Micro Software.

Gruenhagen joins Spireon as chief technology officer, responsible for driving product and platform innovation for the company.

He brings diverse technology expertise to the position based on key leadership roles at PayPal, Amazon and Microsoft.

Gruenhagen most recently served as vice president of software engineering at Impinj.

CARS Recon Hires

Senior Vice President

Jamye Carpenter has joined CARS Recon, Inc. as senior vice president of human resources and technology. In this capacity, Carpenter will oversee human resources, social media, marketing and the advancement of CARS Recon technology. Carpenter comes to CARS from Red Mountain Technologies, where she most recently served as director of business development. Over the past 17 years, Jamye has worked in the automobile auction industry in various roles at Red Mountain Technologies.

Carpenter serves on the National Auto Auction Association convention planning committee, the Inter-

national Automotive Remarketers Alliance standards committee, and has been active with the American Association of Motor Vehicle Administrators.

Carpenter earned a bachelor’s degree in

psychology from Auburn University and is currently attending Louisiana State University Shreveport working toward an MBA with a concentration in human resources.

RETAIL MARKETS

MICHIGAN

Kevin Bushong, president, Wholesale Auto Co., Midland, Mich.:

“The dealership has been in business 54 years. It opened in October 1962. I’ve been here seven years as general manager and my wife, who is vice president, has been here nine years.

“We bought it two months ago from the son of the original owner. But I’ve been in the car business my whole life.

“We’re keeping 70 units. The dealership used to hold about 45 vehicles, but I ramped it up a little bit to increase numbers.

“We’ve always sold a huge percentage of onhand inventory. So I figured if we want to sell 10 more a month, I’d have to have 30 more in stock.

“Over the last couple of months, we’ve been selling about 45 a month.

“I get vehicles from a lot of diferent places. Currently, I get a lot from OVE, SmartAuction and Man-

heim online simulcast. I kind of do it all. I’m the sales manager, F&I manager and do all the financing. So at night, I sit at home, use my iPad and log on to OVE and SmartAuction to buy vehicles. Then I send drivers to get them during the day.

“We do straight retail, but we ofer subprime financing strictly through Credit Acceptance.

“In October, the average retail price on the lot was $18,000. A lot of that has changed just in the last couple of months.

“The previous owner used to carry a lot of lowerpriced vehicles. I wanted to get into nicer, less-problematic vehicles down the road. We were having an issue with vehicles coming back, adding to our cost-ofsale since we had to repair them after. So I’m trying to buy nicer stuf. The mileage or year doesn’t matter. It just has to be a better quality vehicle.

“Right now, our aver-

age model year is a 2009. Average mileage is about 60,000. We have a car with 6,000 miles and one out here with 240,000 miles.

“SUVs make up 35 percent of inventory, 35 percent trucks and 30 percent cars. We carry 90 percent domestics.

“Reconditioning costs are low. It’s around $250. Typically, what we’re getting is cars that have already been to the shop.

“I ran a Ford store for 15 years, so I’m very acclimated to the franchise philosophy. We fixed them right and put them on the lot and (wholesaled them) at 60 days.

“So I’m trying to buy those 60-day-old vehicles from a franchise that has already invested all the money to fix that car.

“We do our recon here. We have one hoist and one technician that only does light, in-house work for cars that we’re prepping for the lot.

“We do a lot of market-

ing on Facebook. I put any commercial that we do on Facebook.

“Our stafers are able to post three or four cars a day. Every special we do, we’ll have a (local new channel) commercial, and I post it on there. We also use AutoTrader, Cars.com and Carfax.

“We just sold a 2015 F-250 Super Duty that we delivered to Escanaba, Mich. It had 6,000 miles. We sold it for $29,600.”

NEBRASKA

Jon Schweitzer, owner, J&B Motors, Wood River, Neb.:

“I’ve been in the car business for 45 years. I’ve been at this location for 16 years.

“I keep 40 to 45 vehicles in stock. That’s pretty close to this time last year.

“I get cars from new-car stores and the auctions. I get more from auctions because the new-car trades have dried up a bit.

“I sell about 15 to 25, depending on the month.

Compiled by Jeffrey Bellant

“We don’t do buy-here, pay-here, just regular retail.

“Average retail price is $6,000 to $10,000. Mileage ranges from 80,000 to as high as 200,000.

“I have a mix of vehicles. I have 15 or 16 trucks, probably 10 SUVs and the rest are cars, I guess.

“Over ¾ are domestics. It’s just the market. It’s what I do better with.

“Reconditioning costs depend on what it needs. I would say it’s typically $300 to $400, at least. I do most of it myself, my son and me.

“For advertising, we use CarGurus, Cars.com and we use two local (shoppers), Wheels for You and Big Red Auto Book.

“Sometimes we’ll support school sport teams.

“The last thing we sold was a 2005 Chrysler Town & Country.

“We also sold a 2005 Dodge Grand Caravan. It had 150,000 miles on it. We sold it for $4,000.”

WHOLESALE MARKETS

NEBRASKA

Ryan Durst, vice president, Lincoln Auto Auction, Waverly, Neb.:

“We’ll be celebrating our 25th year in 2017.

“We’ve got four lanes and we’re running four lanes.

“Volumes have been a little lower than they were last year. We’re about 275 to 300 weekly. We were doing a little better last year.

“The new-car stores are just not doing any business. It’s been months of these guys struggling. They’re not selling cars and not trading for cars. It’s a trickle-down efect. We’re getting cars from the same guys, it’s just less volume.

“People like to blame it on the election, but we have a presidential election every four years. So I don’t know if it has to do with the election or not.

“We’re in an auction 20 group, so I talk to guys from other auctions. In the Southeast, they say business is good; they’re just not selling the percentage

they want. In other places, the new-car stores and the used-car stores are doing horrible. I don’t know.

Some of our stores had record months in the spring and summer, but it just kind of tapered of and lately it’s been dead.

“We’ve been killing it in sales percentage. I just looked at it. We were at 73 percent average of the year. We’re up about 4 percentage points over last year.

“We had a 77 percent sale on Nov. 9. We’re very fortunate that way. The industry average is about 50 to 51 percent.

“We can always use more cars, but we pride ourselves on being efcient and getting cars in here that will sell. The dealers know when they come here they’ll have seven or eight chances out of 10 to buy a car. So that’s a big deal.

“Usually, we’ll draw between 200 and 225 dealers in the lanes. We’re pretty consistent.

UCN-9x6-July.pdf 1 7/11/16 2:56 PM

“We are probably 90 per-

cent dealer trades, about the same as last year. The rest are repos, fleets and credit unions.

“We also have a GSA account. We had a lot bigger volumes than normal this year. We’d run about 120 to 140 every three or four weeks.

“We have one more GSA sale on Dec. 7. After that sale, it will be done until March or April. Those vehicles will be sedans, cargo vans, passenger vans, box trucks, heavy-duty trucks –just the gamut.

“We use Edge Pipeline for online. It’s good, especially for the GSA. The online guys go crazy for this stuf

“We opened a box truck online at $12,000 a few weeks ago and it sold for something like $27,800. It was being bid at $200 increments on the Internet, just back and forth.

“Our average price (for our regular sale) is about $4,200, which is the same as last year.

“We look for great things in 2017.”

VIRGINIA

Dick Menendez, chief operating ofcer, Richmond Auto Auction, Richmond, Va.:

“We’ve been in business 27 years. We have seven lanes and we’re typically running four or five.

“The last few weeks, volumes have been of a little bit. While that’s typical of this time of the year, newcar sales are of now. When that happens, people are not trading.

“Some people blame it on the election, but I don’t understand that logic.

“If you need a car, you need a car. Who cares who’s going to be president?

“Our volumes are of about 10 to 20 percent, so we’re running about 400 cars.

“Our sales percentages are quite high. We’re selling at 73 percent.

“This is the time of the year when people stockpile cars for tax season.

Compiled by Jeffrey Bellant

“We have, on average, 230 or 240 unique bidders in the sale.

“We have a significant mix of municipal cars and Virginia’s surplus vehicles. They make up a substantial fleet business for us.

“The largest number of cars we sell are from newcar trades and financial company repossessions.

“It’s 50 percent new-car trades and the rest (fleet/ lease/repos).

“Our average bid price has been increasing for awhile. Over the last two years, it’s up in the neighborhood of 20 to 30 percent.

“I feel really positive going into the end of the year and next year.

“The unemployment here is lower than the national average, wages are rising and financing for vehicles is loose. It’s easier to get a car loan.

“We think the overall values of the cars being sold are going up substantially over the next two years, 2017 to 2018.”

ADESA Boston December 2, 16

508-626-7000

ADESA Brasher’s December 6, 13 916-991-5555

ADESA Charlotte December 8, 22 704-587-7653

ADESA Chicago December 16 847-551-2151

ADESA Cincinnati/Dayton December 20 937-746-4000

ADESA Golden Gate December 6, 20 209-839-8000

ADESA Houston December 7, 21 281-580-1800

ADESA Indianapolis December 6, 20 800-925-1210

ADESA Kansas City December 6, 20 816-525-1100

ADESA Lexington December 1 859-263-5163

ADESA New Jersey December 8 908-725-2200

ADESA Salt Lake December 13 801-322-1234

ADESA Tulsa December 9 918-437-9044

ADESA Washington DC December 14 703-996-1100

Columbus Fair AA December 21 614-497-2000

Manheim Atlanta December 7, 8, 22 404-762-9211

Manheim Dallas December 14 877-860-1651

Manheim Denver December 14 800-822-1177

Manheim Detroit December 8, 22 734-654-7100

Manheim Fredericksburg December 1, 15 540-368-3400

Manheim Milwaukee December 14 262-835-4436

Manheim Minneapolis December 7 763-425-7653

Manheim Nashville December 14, 20, 21 877-386-5004

Manheim New Jersey December 14 609-298-3400

Manheim New Orleans December 21 985-643-2061

Manheim Orlando December 6, 13, 14, 20 800-337-8491

Manheim Pennsylvania December 1, 2, 15, 16 800-777-2053

Manheim Phoenix

December 1, 8, 15, 22 623-907-7000

Manheim Pittsburgh December 14

724-452-5555

Manheim Riverside December 13, 15 909-689-6000

Manheim Seattle December 7 206-762-1600

Manheim Southern California December 8, 22 909-822-2261

Manheim Tampa December 8 800-622-7292

Southern AA December 14 860-292-7500

Choose Chase on ADESA.com and OVE.com for quality bank-sourced vehicles. Contact auctions directly for current sale information.

ADESA Boston December 2 508-626-7000

ADESA Golden Gate December 6 209-839-8000

Manheim Atlanta December 7 404-762-9211

Manheim Dallas December 14 877-860-1651

Manheim Milwaukee December 14 262-835-4436

Manheim Nashville December 14 877-386-5004

Manheim Orlando December 14 800-337-8491

Manheim Pennsylvania *December 1, 15 800-777-2053

Mazda Capital Services

ADESA Boston December 2, 16 508-626-7000

ADESA Golden Gate December 20 209-839-8000

ADESA Houston December 7 281-580-1800

Columbus Fair AA December 21 614-497-2000

Manheim Riverside December 15 909-689-6000

Manheim Atlanta December 8 404-762-9211

Manheim Detroit December 22 734-654-7100

Manheim Fredericksburg December 1 540-368-3400

Manheim Milwaukee December 14 262-835-4436

Manheim Nashville December 21 877-386-5004

Manheim New Jersey December 14 609-298-3400

Motors Finance

ADESA Boston December 2 508-626-7000

ADESA Salt Lake December 13 801-322-1234

Columbus Fair AA December 21 614-497-2000

Manheim Dallas December 14 877-860-1651

Manheim Orlando December 20 800-337-8491

Manheim Pennsylvania December 2, 16 800-777-2053

Manheim Pittsburgh December 14 724-452-5555

Manheim Riverside December 13 909-689-6000

Manheim Seattle December 7 206-762-1600

Manheim Detroit December 8 734-654-7100

Manheim Fredericksburg December 15 540-368-3400

Manheim Milwaukee December 14 262-835-4436

Manheim New Jersey December 14 609-298-3400

Manheim Orlando December 13 800-337-8491

Manheim Pennsylvania December 16 800-777-2053

Manheim Pittsburgh December 14 724-452-5555

Manheim Seattle December 7 206-762-1600

Manheim Southern CA December 22 909-822-2261

Southern AA December 14 860-292-7500

Subaru of America, Inc. and are licensed to JPMorgan Chase Bank, N.A. (“Chase”). Retail/ Loan and lease accounts are owned by Chase. *The Jaguar word mark, the Jaguar logo, and Jaguar Financial Group are trademarks of Jaguar Land Rover Limited and any use by

Rover word mark, the Land Rover and Oval logo, and Land Rover Financial Group are trademarks of Jaguar Land Rover

and

by

is under

Retail / Loan and lease accounts are owned by Chase. *The 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. ©2016 JPMorgan Chase Bank, N.A. Member FDIC (16-038) 12/16

DISCONNECTED JOTTINGS FROM TONY MOORBY

I’m not going to write about the election results – you’re probably as sick of hearing about it as I am. A “no-win” for most people but a change for all, regardless.

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

I just hope the rioters have calmed down by the time this goes to press. The freedom they so earnestly desire has already been exercised, while they ironically bring more violence to a society that they say is going to get more violent. I’ll bet a pound to a pinch dog poop that most of them didn’t vote anyway.

Mind you, I do look forward to less pandering to political correctness. I was speaking to my brother in

England this morning who informed me that my great nephew’s school has banned the use of the word black in the nursery rhyme “Baa Baa Black Sheep.” They now have to sing “Baa Baa Blue Sheep.” I kid you not. Now I’m as sensitive to people’s feelings as anyone but, seriously? The origin of this child’s song was to celebrate the diference in people. Black sheep were prized in the Middle Ages as dark clothes could be made from their wool without the necessity of dying and higher taxes were due on the fleeces.

Mind you, the supposed origins of some nursery

CR R O O S S W D

Across

1. VW crossover SUV being released in 2018

4. What a buyer ofen does afer purchase, 2 words

10. Rotating engine part

11. “Friday Night Lights” score

12. One of the factors rated by JD Power, how reliable is the car

13. Bolt’s partner

14. “Let it __”: Beatles tune

15. NSX sports car makers

17. Factor in price

18. Must- ____, a real bargain!

22. Testing area

23. Ford Transit Cargo and Chevrolet Express, for example

By Myles Mellor

24. Former Chevy family car

28. Get rusty

29. Fail to maintain

30. Big Mini

34. “___ cost you”

35. Tat __ the question

37. Makes invalid, as a warranty, e.g.

39. Adam, Corsa and Viva, in the UK

43. “Shine a Little Love” rock grp., abbr.

44. Gear tooth

45. Cream or canary

46. Itinerary info, for short

Down

1. Te Q5 is one of their popular models

2. Indy 500 segment

3. Nissan model

4. Bargain

rhymes can be pretty horrifying. The once-popular “London Bridge Is Falling Down,” some contend, refers to human sacrifices put in the foundations of the bridge in the belief that the remains would keep it standing. “My fair maiden (or lady)” refers to that sacrifice as being a virgin. No archeological evidence has yet been found to support (sorry) the theory.

When you think of the words to “Rock-a-Bye Baby,” they’re pretty gruesome. Who would rock a baby in a treetop anyway? Of course the cradle and the baby would fall – duh! Fancy singing about that to a little baby. It’s said that it was an allegory for the Protestant Wind blowing from the Netherlands and William of Orange taking over the throne from King James II.

“Ring a Ring of Roses” was a direct reference to the Bubonic Plague of the 1660s. Symptoms of the plague included round spots surrounding the bulges, or ganglions, on the body –

the rings of roses. Constant sneezing also accompanied the disease – atishoo, atishoo. The stench of the dead and dying had people walking around with a sachet or handkerchief filled with dried flower blossoms, a posy, to obviate the smell at close quarters, as it was believed that the plague was transmitted by the odor itself. Actually it was carried by the millions of rats in the city and transmitted by the fleas that went from rats to humans.

“London’s Burning,” often sung as a descant, recalls the Great Fire of London in 1666, which started in Pudding Lane and suitably ended in Pie Street. The good news was that it killed all the rats that carried the aforementioned plague.

Perhaps the most gruesome was “Mary, Mary, Quite Contrary.” Mary is

Queen Mary l who was often the subject behind many of these ditties and she was a meanie; the “garden” is actually a graveyard, “silver bells and cockleshells” were nicknames for very gory articles of torture and “little maids” were executioners’ axes –multiple executions were a commonplace afair often taking place at noon when the first axe would fall on the first strike of the bell of Bow Church and the last on the twelfth.

Jack and Jill was no more than a reference to adultery gone wrong and the dire consequences, which follow ‘climbing the hill’; Jack falls over and cracks his skull (crown) and Jill dies in childbirth.

It seems the folks of yore avoided direct political references too. Thank goodness we live in a more civilized society – or do we?

To see past columns from Tony Moorby, visit www.usedcarnews.com/columnists/tony-moorby

5. It goes on a cake

6. You can check it in the Kelley Blue Book

7. Put out

8. McKinley, for example

9. Ford SUV

14. Market pessimist

16. Setting up in a particular way with specifc features

17. According to, 2 words

19. Compact crossover from Honda

20. Chevy subcompact

21. Adjust one’s wheels

24. Chinese auto manufacturer

25. Toyota SUV

26. Italian auto maker

27. Fashionable trends

30. Honda compact

31. Newport, state

32. Business degree

33. Rule out

36. Pronoun for a car

38. Saturn model

39. CD control, for short

40. Numero ___

41. A pint, maybe

42. You might drive a car onto it or of it

•

•

•

•

BUY HERE PAY HERE

Business in Northwest Montana For Sale 150 miles from Glacier National Park, 3 1/2 million visitors per year. Very good employees. No sales tax in the State of Montana. Car lot 150’x150’, offce 45x22. Finance offce & workshop in rear building 75’x40’ + basement (large). $2,250,000 includes inventory, buy here pay here contracts due us, furniture, fxtures, tools + other frst BHPH store in Montana. Call Milton Nickel 406.253.1293 80 yrs old - Time to get gone

AROUND THE BLOCK

RENTAL FIRM HONORS SALE

Enterprise Holdings, which operates the Enterprise Rent-ACar, National Car Rental, and Alamo Rent-A-Car brands, honored Manheim Fort Lauderdale with its annual Auction Achievement Award.

On behalf of the 200-person team, Manheim Fort Lauder-

dale General Manager Ryan Mason accepted the award recognizing partners that provide a superior level of support to Enterprise Holdings’ remarketing strategy.

“Our clients are number one at Manheim,” Mason said. “Our team members have worked very hard

to help Enterprise Holdings meet its sales goals and prepare its vehicles for the best possible return. We appreciate this important recognition.”

Manheim Fort Lauderdale provides many services for Enterprise, specifically concentrated on inspections and reconditioning.

As Enterprise’s highest volume seller, Manheim Fort Lauderdale sells close to 4,000 vehicles annually through several channels, including in-lane, Simulcast and OVE.

These annual awards are given to a number of U.S. automotive auctions based on key metrics such as client service levels, marketing and reconditioning, planning, sales percentage and vehicle retention.

Enterprise Holdings conducts business with more than 300 locations nationwide and sells close to 1 million units each year.

Compiled by Jeffrey Bellant

Auction Opens New Recon Center

XLerate Group announced the debut of Charleston Auto Auction’s new 6,500-square-foot detail and reconditioning center. This facility further augments Charleston Auto Auction’s capabilities to serve both dealer and institutional clientele.

“For years, Charleston has provided its dealer and institutional clients with exceptional service, despite not having a dedicated reconditioning facility,” said XLerate CEO Cam Hitchcock.

The detail shop ofers a multi-line production process.

Next to the detail shop is a 3,000-square-foot building that houses fleet-lease operations and is available to Charleston’s auction partners.

“Our new detail and reconditioning facility brings exciting new capabilities and supports our continuing growth,” said Laura Taylor, general manager.

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