Used Car News 12/5/16

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NAAA Salutes Auction Staff That Gives of Itself

GIVING BACK: Former NAAA President Tim Browning, left, presents Karl Miskotten, second from left, and his

has raised money and even donated a kidney in its efforts to reflect what Miskotten calls a “servant” attitude.

LAS VEGAS – The National Auto Auction Association honored an independent auction owner, an auction chain executive, an auctioneer and an entire auction staf during its recent convention.

West Michigan Auto Auction of Wayland, Mich., was named the 2016 Auction of the Year by the National Auto Auction Association. The award honors excellence in community service.

West Michigan Auto Auction was also the winning recipient of the regional Midwest Chapter Auto Auction of the Year, winning $5,000, which will be donated to the charity or charities of their choice.

As the NAAA’s National Auction of the Year Award winner, West Michigan Auto Auction received an additional $20,000 to be donated to the charity or charities of its choice.

In addition, NAAA’s On the Block magazine will feature a January 2017 cover story about WMAA and its charitable eforts. The auction will also grace the cover of the 2017 NAAA Member Directory.

NAAA Midwest Chapter President Jason Cotton said West Michigan’s eforts have helped so many people and have been an inspiration to many.

Outgoing NAAA President Mike Browning said he was pleased to be

with

president during the creation of this new award.

“We want to congratulate West Michigan Auto Auction and thank those involved at the auction who consistently give unselishly of their time, efort, and money to so many wonderful community service organizations,” Browning said.

West Michigan engages in numerous charitable and community serviceactivities,nottheleastofwhich was an employee who befriended a dealer client, and later donated a kidney to the man.

Other eforts include raising $42,000 for the family of a Michigan auction worker who died in a

car accident and each year holding a memorial ride for his family’s continued support. West Michigan raised $12,000 for a dealer client whose wife contracted terminal cancer, and the amount raised was matched by the auction.

Numerous vehicle repairs for inancially challenged individuals in the community also have been made. Other eforts include charity golf sponsorships, food pantry collections, and raising $3,000 for a nonproit that donates water iltration systems to countries where people don’t have access to clean water.

Continued on page 5

Focus on Customers Boosts Finance Satisfaction

Dealers and lenders are focusing on building arelationshipwiththeir customers to increase satisfactionandbusiness retention, according to the J.D. Power 2016 U.S. Consumer Financing SatisfactionStudy.

Highlysatisfiedluxury and mass market customers (overall satisfaction scores above 900) canhaveasignificanteffectondealersandlenders, as they are nearly twice as likely to return to a particular dealership and are more than twice as likely to lease or purchase the same brand again as those who are less satisfied (scoresbetween801and 900).

“In the seemingly complicated environment of vehicle financing, it’s the sometimesoverlooked customer handling steps that can bring clarity to the customer and give dealers and lenders a unique competitive advantage,”

saidJimHouston,senior director of auto finance atJ.D.Power.

A lender welcome package that answers basic loan servicing questions (e.g., how to makepaymentsandhow to sign up for auto-pay) can reduce the number ofinboundcontacts.

Specifically, among luxury customers who say they “completely” understand all of the servicing information, problemincidencedrops to 8 percent, compared with the overall luxury problem incidence of 10 percent.

In the luxury brand segment, overall satisfaction is 49 points higheramongcustomers whose dealer or finance manager explained account features, services, or benefits of their financing than among those whose dealer or financemanagerdidnot.

When email customer service is available, satisfaction improves by

42 points among luxury brand customers and 61 pointsamongmassmarket brand customers. When online bill pay is available, satisfaction improvesby53pointsin the luxury segment and by 86 points in the mass marketsegment.

Satisfaction declines significantly when a customer has to contact their lender more than once to resolve a problem.

Overall satisfaction among luxury brand customers resolving a problem with one call is 875 points but declines to 821 among those whose resolution requirestwocalls.

Lincoln Automotive Financial Services ranks highest among luxury brands. Ford Credit ranks highest among mass market brands, withascoreof856.

BankofAmerica(854) ranks second and Kia Motors Finance (851) ranksthird.

NEWS BRIEFS

CarMax Moves into New Market

CarMax Inc. celebrated the grand opening of its irst store in Michigan, located in Kentwood at 4431 28th Street.

The Kentwood store will have the capacity to stock approximately 200 used vehicles.

During the grand opening celebration, CarMax announced that The CarMax Foundation will be providing a $10,000 grant to the YMCA of Greater Grand Rapids.

The grant will help fund the YMCA Veggie Van, which is West Michigan’s only mobile farmers market.TheVeggieVanprovidesthe opportunity for local farmers to sell produce directly to residents in low food access neighborhoods.

Kentwood CarMax associates nominated the YMCA of Greater Grand Rapids to receive the grant.

Car-Mart Reports Improved Results

America’s Car-Mart Inc. had net income of $5 million for its quarter ended Oct. 31.

Revenues were $150 million compared to $133 million for the prior year quarter. Retail unit sales increased to 12,167 from 10,881 for the prior year quarter with increased productivity at 28.4 retail units sold

per store per month, up from 25.3 for the prior year quarter

Averageretailsalespriceincreased $244 to $10,491. Gross proit margin percentageincreasedto41.4percent from 39.2 percent for the prior year quarter.

Collections as a percentage of average inance receivables were 12.6 percentcomparedto13.7percentfor the prior year quarter. The weighted average contract term increased to 31.7 months from 30.6.

Net charge-ofs as a percent of average inance receivables were 7.7 percent, down slightly from 7.8 percent for prior year quarter.

Accounts over 30 days past due increased to 4.8 percent from 3.5 percent at Oct. 31, 2015.

Allowance for credit losses was 25 percent of inance receivables, net of deferred revenue at Oct. 31.

ADESA Adds Flint Auto Auction

KAR Auction Services has acquired Flint Auto Auction. ThefacilitywilloperateasADESA Flint.

Located just northwest of the Detroit metropolitan area, Flint Auto Auction is a fully automated, eightlaneauctionon60acresofland.The auction ofers full-service recondi-

tioning facilities, including a body shop and mechanical shop.

Lawrence Cubitt will remain as general manager and additional members of the auction team will maintain leadership roles.

Dealers Low-Ball CPO Units

According to a recent Cox Automotive certiied pre-owned study, dealers underestimate the value consumers place on CPO vehicles, causing them to charge less than consumers are willing to pay.

Additionally, CPO vehicles were shown to speed vehicle sales and increase turn, making a strong case for dealers to take advantage of the growing CPO market.

According to the Cox Automotive 2016 CPO Study, the average consumer is willing to pay $3,000 more for a CPO vehicle than for the same vehicle without a certiication. However, dealers estimate that consumers will pay only $1,260 more for a CPO vehicle - $1,740 less than what consumers said they would be willing to pay. By underestimating the value of vehicle certiications, many dealers unknowingly sacriice potential proit.

In addition, the study reveals that a CPO vehicle sells ive days faster

on average than a comparable noncertiied vehicle, averaging 30 and 35 days respectively. CPO vehicles also increase a dealership’s average number of inventory turns per year, from 10.4 to 12. While the upfront cost of certiications may currently hold back some dealers from developing CPO programs, the combined value of higher price tags and faster turns more than counteracts this cost.

Negative Equity Rises

A rising number of car shoppers have negative equity on their tradeins when they’re purchasing their next vehicle.

According to Edmunds, a record 25 percent of all trade-ins toward a used car purchase in the third quarter had negative equity. These shoppershadanaverageof$3,635ofnegative equity at the time of trade-in, also a third quarter record.

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NAAA Names Auction of the Year – from page

Patty Stanley, co-owner of Carolina Auto Auction and Indiana Auto Auction, was inducted into the National Auto Auction Association (NAAA) Hall of Fame during the association’s recent convention.

NAAA has given the honor eachyearsince1968.Itisbestowed on those who have worked for the improvement of NAAA and have consistently followed the high standards of the association’s Code of Ethics.

Patty Stanley joins her husband, Henry Stanley, a former NAAA president,

who was inducted into the Hall of Fame in 2013.

Patty Stanley, who currently serves as ServNet’s chairman of the board, has been in the auction industry since1969,whensheandher husband purchased Capital Auto Auction in Columbus, Ohio, which they renamed Ohio Auto Auction.

Patty Stanley, who had spent 18 years in the banking industry prior to she and her husband’s first auction purchase, has also served as ServNet’s vice president, and has been both director and treasurer.

Sheisalsoamemberofthe NAAA Convention Committee.

After selling the Capital AutoAuctiontoGECreditin 1987, the Stanleys purchased Fort Knox Auto Auction in Anderson, S.C., in 1990, renaming it Carolina Auto Auction. It has grown into one of the region’s largest wholesale auctions. They purchased the Indiana Auto Auction in Fort Wayne, Ind., in 2007.

Charlotte Pyle, co-owner/

operatoroftwoWestVirginia auto auctions, presented the award to Stanley, noting that their professional and personal relationship spans nearly three decades.

“Patty was instrumental to the success of our business,” Pyle said.

“When we first joined NAAA, it was Patty who recommended which meetings to attend, in which committees to participate. I recall sending our general manager to Carolina Auto Auction andthenourcomptrollerfor training.”

Bob Rauschenberg, ADESA’sexecutivevicepresident of sales, marketing and special services, was named an NAAA Pioneer.

The NAAA Pioneer Award honors those who have worked in the wholesale motor vehicle industry and/ or NAAA and have brought innovation and enhanced methods of improving servicestoremarketersthrough NAAA member auctions. Earning the honor means the recipient has consistently followed the standards of

the NAAA Code of Ethics.

Rauschenberg has been in the remarketing business since his early teens.

He is a graduate of Emporia State University in Kansas, with a bachelor’s degree in marketing.

After college, Rauschenberg joined Allstate Insurance Co. as a fleet administrator. He later became vice president of remarketing for two of the largest fleet- lease companies in North America.

He has held key positions in the auction industry including president of ADT Auction Services Division and executive vice president of sales and marketing for ADESA from 1995 until 2000.

He joined ABC Auto Auctions in 2000 and became its president.

He worked there until April 2007, at which time he returned to ADESA to once again serve in the role of executive vice president of sales and marketing.

“IndustryPioneerisavery appropriate award for Bob,”

1

said Tony Moorby, who was CEO at ADT Auction Services Division when Rauschenberg served there.

“Hehasalwaysbeenoneto step outside the mainstream andseewhereitgoes.Hehas a pioneering spirit, is very resilient to change, with a facility to bounce back. He has a wonderful sense of humor.”

Jack Armstrong, a 27-year veteran of the auction industry,receivedtheNational Auto Auction Association Bernie Hart Memorial Auctioneer Award for 2016.

What started out as a parttime job as a driver at Rea Brothers Mid-South Auto Auction in Jackson, Miss., has grown into a 27-year career for Armstrong.

He graduated from the Mendenhall School of Auctioneering in 1990 with awards such as “Most Likely to Succeed” and “Best AllAround Student.”

Today, Armstrong works auctionsinAlabama,Mississippi and Louisiana, including independent and corporately owned sales.

Chase

Manheim

Manheim

Manheim

MAZDA

Manheim

SUBARU

Manheim

Manheim Phoenix

Average Auto Age Increases

The average age of light vehicles in operation in the U.S. has once again climbed slightly, to 11.6 years, according to IHS Markit.

Registrations for light vehicles in operation (VIO), including cars and light trucks, in the U.S. also reached a record level of more than 264 million, an increase of more than 6.2 million since last year. This represents the highest annual increase the auto industry has seen in the U.S. since it began tracking VIO growth – breaking the record of 2.1 percent growth set in 2015.

According to IHS Markit, consumers are continuing the trend of holding onto their vehicles longer than ever.

is nearly 66 months.

Both are signiicantly longer lengthsofownershipsincethesame measure a decade ago.

When it comes to vehicles being scrapped, those taken out of service during 2015 remained relatively lat compared to 2014, with just over 11 million light vehicles retired out of the leet, representing about 4.3 percent of the overall population. This igure is signiicantly less than therecordhighofmorethan14million vehicles that were scrapped in 2012.

As of the end of 2015, the average length of ownership measured a record 79.3 months, more than 1.5 months longer than reported in the previous year. For used vehicles, it

Theoldestvehiclesontheroadare growing the fastest – with vehicles 16 years and older expected to grow 30 percent from 62 million units today to 81 million units in 2021. IHS Markitresearchalsoindicatesmore than20millionvehiclesontheroad in 2021 will be more than 25 years old.

GM Gets Airbag Recall Delay

DETROIT (AP) – U.S. auto safety regulators are allowing General Motors to delay a large recall of potentially defective air bags, giving the company time to prove that the devices are safe and to possibly avoid a huge inancial hit.

TheunusualmovebytheNational Highway Traic Safety Administra-

tion buys time for GM to do longtermtestsofTakataairbaginlators in older trucks and SUVs including its top-selling vehicle, the Chevrolet Silverado pickup.

GMreluctantlyagreedtorecall2.5 million vehicles in May to replace Takata front-passenger inlators.

Recalls, CFPB Top List of Compliance Concerns

By Ted Craig

This year’s National Auto Auction Association featured several presentations on compliance, a common topic at automotive events these days.

And, as at most of these events, the Consumer Finance Protection Bureau was the most discussed issue.

Although the CFPB has no direct authority over auto auctions, it does fall in the category of third-party service providers for financial institutions and buy-here, pay-here dealers.

A panel discussed the topic during the National Remarketing Conference, which was held in conjunction with the NAAA convention.

Jack Tracey, executive director of the National Automotive Finance Association, said the industry could view the CFPB as a positive.

“It provides the industry with a barometer,” he said.

Problems arise because the agency focuses on enforcement rather than rulemaking.

Tracey said everyone involved in auto sales benefits from creating a good relationship with consumers

However, the CFPB must work with the industry to help make that happen.

Recalls are another major topic for the auctions.

The NAAA joined forces with the National Independent Automobile Dealers Association and other groups last year to defeat legislation that would have required dealers to repair all recalls before selling a used car.

Attorney Jason McCarter warned NAAA attendees that although this national legislation failed, many states are still considering their own version.

The current NAAA recommendation is for sellers to at least discuss any recalls and for buyers to check for recalls before buying a vehicle.

The NAAA convention came one week after the presidential election and some are speculating about how the new administration might treat these compliance issues.

Levi McCoy, director of remarketing for LeasePlan USA, advised dealers to limit expectations for change.

“Compliance might be modified, but it’s not going away,” McCoy said

Ready. Set. Pause.

all 21 days of

When you choose Ready Logistics for full-service transportation from the auction to your lot, your DealShield guarantee coverage isn’t afected by time spent in transit. As long as you have the Automatic Purchase Advantage guarantee from DealShield, you’ll still have 21 days to return your vehicle for a full refund of the purchase price and buy-fee.

TAX SEASON PREVIEW

TAX SEASON BRINGS CHALLENGES,

By Jeffrey Bellant

A potentially late refund season, a shorter refund window and continued challenges in finding the right inventory make the upcoming tax season another pressure-filled time for independent dealers.

Ken Shilson, founder of the National Alliance of Buy-Here, Pay-Here Dealers, said there has been one major change for this year’s tax season according to Bill Neylan, of TRS Tax Max.

“The government has announced that any of the larger refunds will not even be released until the third week in February,” Shilson said. “So tax season has been moved back, according to Bill’s information, two to three weeks.”

This poses a challenge for independents that want to stock up early, but also have curtailment prob-

of Earl’s Credit Auto Sales, said last year’s tax season was delayed and he was still seeing tax money in April.

Johnson said he prefers a “stretched out” tax season for a number of reasons.

One is that his sales process takes a long time because it’s a thorough closing process.

“In a hectic tax season, it’s hard to do that,” John-

lems, inventory stocking issues and carrying costs, Shilson said.

“It’s a game changer,” Shilson said. “It’s bad enough that it’s drifted out to late January and early February. Now we’re talking about late to midFebruary to get any serious refunds flowing.

“So the start of the refund season has definitely changed.”

Richard Johnson, owner

son said.

The other reason is a slower tax season means Johnson can avoid paying inflated prices at auction when he needs to replenish his inventory.

Johnson depends less on tax season each year as he builds up his repeat business that now stands at 70 percent of all sales.

Another issue dealers face today is they lost con-

trol of the refund, Shilson said. It used to be customers would come in, do their tax returns at the dealership and dealers could get the refund agreement.

“Now, they get the refund somewhere else and get a widescreen television and by the time the dealer gets to it, it’s a fraction of what it was,” Shilson said.

As a result, some dealers feel there isn’t a big tax season.

But Shilson said the opportunity is still big.

“According to the government, the refunds are substantial,” he said. “We’re just not seeing the money flow directly into the auto finance space like we used to.”

TRS Tax Max has a program that allows dealers to structure a deal with an irregular payment to build in future years’ tax returns, Shilson said.

Doug Turner, director of asset management for J.D. Byrider, said his dealers are “conservatively optimistic” because it’s always a great time of year with strong cash down payments and good volume.

“I will say, whether wholesale or retail, tax season is not as impactful as it had been in prior years,” Turner said. “But it’s still a very important time of the year for us.”

FALLING PRICES HELP DEALERS

One positive change to tax season this year is the downward trend in wholesale prices means vehicles are more affordable as dealers stock up.

America’s Car-Mart CEO Hank Henderson said on a recent conference call that he’s heard reports from the field that prices aren’t going up like they normally do.

“It’s not anything huge at this point, but we are starting to hear it is happening at certain places,” Henderson said.

Paducah Auto Auction usually sees an uptick in business in preparation for tax season.

“But last year, we didn’t,” General Manager Clint Lutz said.

“I think in the next month or two, guys will show up that don’t come all of the time. You’ll see those guys hit the lanes for (tax season).”

He said it’s getting harder to time which week will be a good week for sellers and buyers for tax season.

Butch Royal, managing partner of ABC Baton Rouge, said the auction has a good foothold in the buy-here, pay-here market.

“The buying season for that generally starts in the second week of December for us,” he said.

“We’ll be doing a big Christmas promotion on Dec. 15, so that really gets it moving a bit.”

Doug Turner, director of asset management for J.D. Byrider, said in buying cars, the goal is obviously to minimize the amount it pays for cars in normal tax season.

“But it does seem like normal tax season is getting a tad bit weaker and shorter,” he said. “It seemed like it used to run from mid-January to midto late March.

“Now it seems like it doesn’t start until February and might be a threeto five-week window instead of an eight-week window.”

Turner said it helps from a buying perspective since the dealer group doesn’t have to stock up as much.

“Still, we plan on watching the market very closely in the next 30 to 60 days,” he said.

He said even though the overall wholesale prices are dropping, the market for a good, clean used car is still pretty strong.

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Wholesale Prices Move Down

By Ted Craig

The downward movement in wholesale prices has begun. The question now is how far and how fast prices decline.

ADESA reports that wholesale used vehicle prices in October averaged $10,499. That’s down 2.2 percent compared to September but up 3 percent relative to October 2015.

A panel during the National Auto AuctionAssociationsaidthisdownward move is the start of a trend set to last for several years.

Rene Abdalah, senior vice president of the RVI Group, said his irm’s used-car price index was 4.3 percent lower year-over-year in September. RVI expects doubledigit declines over the next three years.

The main force driving down wholesale prices is an increase in of-lease units.

Jonathan Banks, executive automotive analyst for the NADA Used Car Guide, said the wholesale markets absorbed a 33 percent increase in of-lease units this year, for the most part, but the numbers just keep growing.

What makes the situation worse is many of the vehicles coming back have less retail demand than when they were leased.

“When you get increasing usedcar supply in a shrinking segment,

that’s not good,” said Eric Ibara, director of residual consulting at Kelley Blue Book,

A slowdown in the new-car market could add to the decline in the used-car market, especially if manufacturers increase incentives.

“Nextyearcouldbeextremelybad ifincentivesarehigher,”Bankssaid.

The drop in prices can have a negative efect on consignors. But

Anil Goyal, senior vice president of operations at Black Book, said some aretakingamoreactiveapproachto maintaining residuals.

Prices remain high by historical standards.

Abdalah said lower prices create opportunities.

Forexample,theindustrycanlook more seriously at used-car leasing.

Chase Recognizes Top Auctions

Seven auto auctions from across the U.S. garnered awards as Chase AutoFinanceannouncedits2015-16 Chase Cup for Auction Excellence winners.

The awards were handed out during the 2016 National Auto Auction Association Convention in Las Vegas.

The18thannualChaseCupaward recognizes auto auctions for their exceptional performance in retention, operational eiciency, expense control, accuracy, sales and service delivery. Chase reviewed the performance of 30 of the nation’s best auto auctions with which Chase does business.

The review examined data measuring how well the auctions handled preparation, sales, invoice processing, transport requests, title processing and other capabilities.

Manheim Phoenix was named the winneroftheBestNationalAuction Performance.

Manheim Phoenix distinguished itself among other top competitors throughout the evaluation period withabalancedperformanceshowcasing strengths in vehicle reconditioning, number of buyers, condi-

tion report accuracy and monetary results.

Manheim Phoenix was also honoredforBestRegionalPerformance, Western.

ADESAKansasCitywastheDouglasF.WiningerMemorialAwardfor Best National Performance Service Delivery, an award that recognizes outstanding service in measurable areas such as transportation management, sales, invoicing and other operational measures. ADESA Kansas City also earned Best Regional Performance, Central.

Also recognized were:

• Best National Jaguar SalesManheim Atlanta

•BestNationalLandRoverSalesManheim Pennsylvania

• Best National Mazda SalesManheim Seattle

• Best National Subaru SalesManheim Seattle

• Best Regional Performance, Midwestern - Manheim Minneapolis

• Best Regional Performance, Northeastern - Manheim Pennsylvania

• Best Regional Performance, Southeastern - Manheim Orlando

PEOPLE IN THE NEWS

Cox Automotive Promotes Execs

Cox Automotive recently promoted two executives.

Amy Mills was named senior vice

president of strategy.

Mills previously served as vice president of global strategy, where she drove corporate strategic planning and business portfolio management.

Mills joined Cox in 2001 as assistant marketingmanagerforCox Automotive’s Manheim

brand. She served in a variety of marketing roles before assuming the role of vice president, product strategy for Manheim, where she focused on the development of new product innovations for the brand’s product portfolio. She was promoted to vice president, strategy, Cox Automotive, in November 2013.

Mills’ career includes roles in brand strategy, advertising and marketing.

Mills replaces Joe George, who was promoted to senior vice president, Manheim Vehicle Solutions.

Cox Automotive has named DavidPyle senior vice president of enterprise dealer partnerships.

Pyle will lead a team that is dedicated to selling products from the entire suite of Cox Automotive brands,

including inancial, inventory, media and retail solutions, to large enterprise clients. Additionally, this team is responsible for providing a uniied sales, service and support expe-

rience that optimizes client interactions and satisfaction.

Pyle was one of the founding employees of Autotrader.com, now the Cox Automotive brand Autotrader, joining the company in 1998.

Pyle led the former

Autotrader/KelleyBlue Book sales team for threeyearsbeforetransitioning to the company’s client success group in 2015. He was most recently senior vice president of client services for Cox Automotive leading loyalty and rewards strategy.

Pyle earned a Bachelor of Science degree in inance from Auburn University.

KAR Creates Enterprise Unit

KAR Auction Services Inc. announced the creation of new enterprise functions and leadership roles in product development, data analytics and strategy.

As the senior vice president of product development, Pat Walsh will institute an agile approach to new product development to more quickly and efectively identify,

foster, and deploy new ideas and solutions for KAR’s customers. Walsh previously servedinseniorrolesat KAR’s Insurance Auto Auctions (IAA) salvage auction and ADESA whole-car auction subsidiaries.

Chris Adams will serve as the vice president of market development. Adams brings two decades of industry expertise, including Pep Boys and Enterprise Rent-A-Car.

Tom Kontos has been elevated to the role of chief economist for KAR. Kontos will aggregate economic and industry data with KAR’s vast data resources to analyze a wide spectrum of market trends.

Terrence Wynne, vice president of data as a service, will work closely with Kontos and KAR’s Data Science Solutions team

to translate data into clear, actionable insights for sellers and buyers.

Wynne joins KAR with broad experience driving the application of data science, including roles at Audi, NADA Used Car Guide and ALG.

As the vice president of strategy, Joe Bannon will lead KAR’s strategic planning activities. Bannon’s career spans more than 30 years in automotive, advertising and media.

RETAIL MARKETS

MAINE

Eric Earl, general manager, The Auto Barn, Berwick,Maine:

“We’ve been in business 36 years. We started with one car that my father and I were driving.

“We keep about 50 on the lot. It depends on the car. I’ll get trade-ins that bring me up over 50. But I try to have 45 to 50 newer units.

“I turn over almost half my inventory on average. Some cars might be here for (several) months and some might sell in three days.

“I get my vehicles through trade-ins and auctions.

“We don’t do any buyhere, pay-here. I do some subprime, but I don’t like the subprime market.

“The average retail price is $15,000.

“My average inventory is between 2008 and 2013. I might have some 2015s and 2006s.

“But the average is probably ive years old.

“Average mileage is 60,000 to 70,000. Getting

(good mileage) is tough. It’s a lot tougher than it used to be, for sure.

“I try to keep a wide range of everything. I prefer noncar vehicles though. I like trucks, SUVs and vans.

“I think most of what we have are domestic.

“We do our reconditioning in-house.

“We are located on a 1750s-era farm. All of our cars are parked out front under a row of maple trees. I cook every customer an apple pie. I have rocking chairs out on the front porch.

“We do a ton of repeat business.

“We also do a lot of online advertising, Cars.com, CarGurus, Autotrader, etc.

“I recently sold a 2011 Honda C-RV. It had 79,000 miles. We got $14,500 for it.

“Honestly, I think the car market has been up for the last couple of years, but that’s just me. I can’t predict with our new administration and it didn’t matter who won.”

NEBRASKA

Arlan Kuehn, owner, Kuehn’s Auto Sales Inc., SouthSiouxCity,Neb.:

“I started in the car business working for somebody in 1970, but I’ve been here withmyownbusinessfor19 years.

“I keep about 80 in inventory.We’realittlebitlighter than last year. We’re watching what we’re selling.

“We sell about 35 per month. It’s about the same as last year. Business has picked up a lot. For a while it was slow, in August and September. The traic was waydown.Alotofbusinesses were of. A lot of new-car businesses I buy from were also of.

“But it picked back up around October.

“Most of my vehicles come from new-car stores. They’veknownmeforyears from being in the new-car business. It’s been 46 years in the business, so that makes a diference.

“I still go to the auction sometimes.

Compiled by Jeffrey Bellant

“Wedoalotwithsubprime through Credit Acceptance Corp. I went through their schoolthattrainsus,soIget a bigger percentage back when I close a deal. I had some money invested in it.

I think I’m on my ifth pool, which is 100 cars for each pool.

“I also do a small amount of buy-here, pay-here. We do retail also.

“Subprime is about 60 percent of our business and about 20 percent is buyhere, pay-here. The rest is retail.

“We’ve gone more subprime in recent years. People have lost jobs and haven’t been able to get their credit back.

“But they’re good people. We’ve helped a lot of them get back on their feet.

“Our average retail price is in the $6,000 to $8,000 range. I’ll carry them anywhere from $16,500 down to $4,995 and some cheaper ones.

“I carry mostly domestics. Maybe10percentisforeign.

“Inventory has been pretty good to ind. We do a lot of SUV sales. That’s our big seller. SUVs are probably 60 percent with 35 percent trucks and the rest are cars.

“Now I’m, starting to save some cars for tax season. I have kind of a car corral, or budget corral, that I keep some cars for sale that are low-downpaymentorcashand-carry.

“Overall, we carry 2008, 2009s and 2010s. I’ve got a 2012 that I just bought the other day, but I bought it right and it was a nice Camry.

“The average miles have gone up. I’m sure you know that. A lot will get up to 90,000 or 100,000. I’ve got a few that are 120,000 to 130,000.

“Everything goes through our service department and our service work is probably $800 to $900 a car. But I want them right. We take care of our customers.

“We just sold a 2005 GMC Envoy. It had 200,000 miles on it. I got $4,950.”

WHOLESALE MARKETS

KENTUCKY

Clint Lutz, general manager, Paducah Auto Auction,Paducah,Ky.:

“We’ll be celebrating 26 years in February. We have three lanes.

“We’re running close to 300 a week. That’s up about 50 a week compared to this time last year. I feel like the dealers around here are doing a little more business –on the new-car side – and we’re getting more new-car trades than we used to get.

“Dealers’ percentages are in the mid-50s to mid-60 percent,sothey’restillpretty good. That usually stays about the same.

“Most average weeks, we (draw) 125 dealers. We’re in Western Kentucky, so we’re alsodrawingthemfromIllinois, Missouri and Tennessee. We’re within 50 to 75 miles of those states.

“Everybody says their business is ‘just OK,’ but at theendofthemonth,everybody says they had a good month, it seems.

“We don’t do a whole lot

of leet-lease. We might have 20 repos a week, just from the local banks. The majority(ofvolume)isfrom local dealers, whether it be wholesale dealers or the local franchise stores.

“We’ll run some in-ops at the beginning of the sale every week.

“We don’t do any online sales.

“Our average price is in the $4,000 range. That’s up just a little bit – maybe a couple of hundred dollars –from this time last year.

“Trucks are impossible to ind and they’re extremely high when you get them.

“It seems like the higher mileage stuf really took a hit this year, the 150,000- to 160,000- to 180,000-mile stuf. It used to be the kind of thing we knew we would sell. It seems like that’s of.

I think everybody is program-oriented – like the J.D. Byriders and the DriveTimes – where everyone is used to a 120,000-mile-andunder car.

“But you can get a car

with 118,000 miles and get $3,500 to $4,500. Then you get another car with 140,000 miles where you can’t get (anything) for it. It seems like I would go for the 140,000-mile car since it’s cheap (and you can still make a good proit).

“Things are decent in the economy, even if people are struggling. It’s not like you hear on the national news.

“I just hope 2017 is as good as this year or better. I expect it to be.”

LOUISIANA

Butch Royal, managing partner, ABC-Baton Rouge,BatonRouge,La.:

“We are three years old and running four lanes.

“We’re now running 600 to 650 cars. Our irst sale we ran 199 cars. So in those threeyearswe’vegoneupto 650.

“We’re averaging about 62 percent (conversion rates) for both consignment and leet-lease combined. We’re one of the higher percent-

ages in the ABC group. Our commercial lane runs about 85 percent conversion rate. The dealer lanes run about 53 to 55 percent.

“Thirteen of our employees lost everything in (the summer looding). The support we received from (ABC oicials) Mike Hockett, Jason Hockett and Jim Phillips was phenomenal.

Everybody put money in and our partners at Chrysler Capital and Santander put money in. We raised about $140,000 for, not only our employees, but for some of our dealers who had a catastrophic loss. If a tragedy like this could have an upside, it’s that it really brought the whole community together.

“I’ve been doing this for 52 years and this was one of the most rewarding experiences, seeing how our company came together to help its employees.

“Business is good as we come through this. We’re ahead of where we were a year ago.

Compiled by Jeffrey Bellant

“We get about 350 to 375 dealers in the lanes. Then we have another 75 to 80 dealers online.

“Our volume is probably 52 to 55 percent commercial accounts and 45 to 48 percent dealers. In my career, it’s probably the most evenly split that I’ve ever experienced.

“For commercial accounts, we run Santander, Ally Bank, Chrysler Capital, GE, United Auto Credit, ARI, Element and we run AvisandBudgeteveryweek.

“We’re running about an $8,000 average car (on the block). Ally Bank has brought in some extremely nice vehicles and we sell some of their of lease in the lanes and that pulls up the average.

“We’re also going to start running cars from Credit Acceptance Corp. in January.

“We just recently received a contract from GSA, so we’llstartrunningagovernmentsaleinFebruary,probably.”

MONTHLY DEALER CONSIGNMENT AVERAGES

COMPACT CAR

Jan 2016 $5,094 101,953

Feb 2016 $5,057 102,215

Mar 2016 $5,264 101,359

Apr 2016 $5,347 100,491

May 2016 $5,171 101,750

Jun 2016 $5,081 102,042

Jul 2016 $4,991 102,225

Aug 2016 $4,893 102,714

Sep 2016 $5,081 103,817

Oct 2016 $4,728 102,351

YTD AVG: $5,146 102,080

FULLSIZE CAR

Jan 2016 $3,954 112,752

Feb 2016 $3,582 117,187

Mar 2016 $3,529 117,020

Apr 2016 $3,666 116,329

May 2016 $3,535 118,424

Jun 2016 $3,373 116,322

Jul 2016 $3,633 116,487

Aug 2016 $3,697 116,520

Sep 2016 $3,286 116,130

Oct 2016 $3,146 116,248

YTD AVG: $3,542 116,399

LUXURY CAR

Jan 2016 $11,866 97,376

Feb 2016 $11,350 100,054

Mar 2016 $11,851 98,354

Apr 2016 $13,046 95,513

May 2016 $12,501 97,324

Jun 2016 $12,430 97,295

Jul 2016 $12,511 94,297

Aug 2016 $11,719 97,297

Sep 2016 $11,625 96,655

Oct 2016 $11,187 98,040

YTD AVG: $12,003 97,273

MIDSIZE CAR

Jan 2016 $5,854 109,097

Feb 2016 $5,863 109,788

Mar 2016 $6,112 108,942

Apr 2016 $6,361 107,161

May 2016 $6,134 107,950

Jun 2016 $6,063 108,326

Jul 2016 $6,072 106,880

Aug 2016 $5,883 108,829

Sep 2016 $5,704 109,389

Oct 2016 $5,659 109,572

YTD AVG: $5,978 108,605

PICKUP

Jan 2016 $15,940 103,797

Feb 2016 $15,888 104,096

Mar 2016 $16,425 102,214

Apr 2016 $16,997 100,370

May 2016 $16,778 102,265

Jun 2016 $16,715 102,402

Jul 2016 $16,595 102,837

Aug 2016 $16,690 102,661

Sep 2016 $16,130 104,860

Oct 2016 $16,358 108,244 YTD AVG: $16,373 103,268

SPORTS CAR

Jan 2016 $15,079 77,964

Feb 2016 $15,324 76,751

Mar 2016 $17,104 70,658

Apr 2016 $18,179 70,446

May 2016 $17,793 71,155

Jun 2016 $17,896 71,291

Jul 2016 $17,214 71,374

Aug 2016 $16,528 72,448

Sep 2016 $16,720 71,575

Oct 2016 $15,905 72,464 YTD AVG: $16,863 72,391

SUV

Jan 2016 $11,715 105,890

Feb 2016 $11,515 107,350

Mar 2016 $11,716 107,171

Apr 2016 $12,259 105,055

May 2016 $12,089 105,790

Jun 2016 $12,007 104,954

Jul 2016 $11,966 104,650

Aug 2016 $11,500 106,441

Sep 2016 $11,442 106,315

Oct 2016 $11,037 107,463

YTD AVG: $11,725 106,125

VAN

Jan 2016 $6,533 118,990

Feb 2016 $6,280 121,104

Mar 2016 $6,526 120,846

Apr 2016 $6,924 119,071

May 2016 $6,766 119,547

Jun 2016 $6,633 118,851

Jul 2016 $6,636 119,569

Aug 2016 $6,480 120,623

Sep 2016 $6,313 121,860

Oct 2016 $6,176 121,025

YTD AVG: $6,532 120,158

CURRENT YTD, THROUGH OCTOBER 2016 SOURCE: MANHEIM CONSULTING

Why is it that all those Christmas lights that were so carefully packed away after last year’s attempt at making the house look like

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

Atlantic City look more akin to a viper’s nest than a neat, systematic, electrical collection of visual peacockery?

Within the course of the last year, the gremlins

• NAAA Hall of Famer

have crept in and wreaked all kinds of havoc. It looks more like a twirled maypole in there. How does that happen?

It seems that the race to erect these festoons of festivity gets earlier each year – roughly the same time as Costco displays its Christmas wares – about two weeks after Easter, I think. Seriously, some folks locally put theirs up a couple of weeks before Thanksgiving. It must be a real pain moving all those pumpkins

I swear that, last year, Terry and I were extra diligent in winding all those stringsoflightsandbaubles into neat, accessible piles in storage boxes reserved for no other purpose. They are large plastic containers with lids that allow the stacking of their twins on top – there must be four or five of them – and have been loaded onto racks in the garage to be left undisturbed for the duration.

around to allow access for ladders and boxes.

Now, at this time of year, when the weather can change with the hour, it’s a bit like playing Russian roulette to choose a warm enough day to avoid getting frostbite in your nether regions.

I’m sure the Christmas display industry depends on short-tempered people like me who refuse to unravel the travails of Christmas past – I’ve spent too many useless and futile hours of twirling and curling strings of lights around varioustreesandinanimate objects, only to stand back, plug the whole lot in and findamiscreantbulbwhich refuses to play along with all the rest. Why is it that they all go out when one doesn’t work? Any amount of prodding and pulling with frozen fingertips renders no success, just anothertriptoHomeDepottodo what one should have done in the first place – throw the old ones away and start

over with a brand new set. I’ve now learned to plug them in first, inspect the snaking strand and then putthemuponlyifallburst into expectant life.

Then there’s the question of color. Are you an all-white household or do you introduce a smattering ofstylishredsandgreensat the doorway? Do you go all out to stun the neighbors and recreate Myrtle Beach in the middle of suburbia with every color known to thehumanvisualspectrum. Haveyounoticedtheinclusionofbluelightsinthelast few years? You never saw that when I was growing up. Blue! Who knew!

Then there are the new LED lights. I find them to emit a chilly light, unfriendly, somehow. The old fashioned ones, while

being in keeping with the precepts against global warming, throw a warm welcoming glow around likeagrandmother’swoolly shawl. No doubt some governmentedictwillpreclude their future availability and the warmth of Christmas wishes will go the way of Christmas card greetings –politically correct but coolly meaningless.

With all that in mind, I think I’ll go through the motions and dig out last year’swarm,glowing,snaky strings, including the icicles to hang from the eaves along with the bangles and baubles to hang from conifers out front just to see the excited glow from my grandson’s face. That alone makes the whole exercise entirely worthwhile.

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

Across

1. Buick model

4. Ozone layer pollutant, for short

6. Recommendation from JD Power

9. Luxury car brand

10. Detach the trailer perhaps

11. Coverage, that’s essential

15. Lower the lights

17. _____ Kournikova of tennis fame

19. Greatest boxer

21. Frequent SUV buyer, to carry kids to games, 2 words

23. Small kid

24. Wall ___

26. Providence locale

27. Super ____ (political funding group)

29. On one’s own 31. Bahamas’ capital 33. Space

34. Braking system

35. Creating aerodynamic lines perhaps

39. Toyota popular for its mpg

41. South Korean model

42. German luxury car 44. Jeep _____

45. Interstate grid, e.g. Down

1. VW family car

2. G80 model

3. Internet laughter, for short

4. Porsche sports car

5. 2-door

6. Goes with oohed

7. Uses a robot perhaps

8. Homer Simpson’s grunt

12. Roof accessories

13. Mandela’s org. in South Africa

14. Gas saving cooperation

16. Galant or Eclipse

18. Warning device

20. Goes with behold

22. Florida city

24. Make look better, 2 words

25. Eastern philosophy

28. Small car

30. Enter the mind of, 2 words

32. Airline, for short

35. Take a seat

36. Made in the ____

37. Gets more gas

38. Incline

40. Nurse (abbr.)

43. You betcha!

AROUND THE BLOCK

HOUSTON, WE HAVE AN AUCTION GROUP

ServNet has added another facility to its roster of independent auction locations, said Kevin Brown, ServNet’s president, in introducing the group’s newest member: Houston Auto Auction.

Founded in 1964 by James B. Bowers, the auction continues under the second-generation owner-

ship and operation led by brothers Tim Bowers, James “Chip” Bowers II and Mark Bowers. Over the five decades since its founding, the auction has emerged as a leader in its market area selling vehicles, large commercial trucks and heavy equipment for corporations, leasing companies, banks,

credit union, municipalities and other government agencies.

“Shaped by the Bowers family, the Houston Auto Auction has made a tremendous impact on the marketplace over the past 52 years, and we are delighted to welcome Houston Auto Auction to ServNet,” Brown said.

Tim Bowers, Houston Auto Auction’s president and CEO, said he is thrilled to join ServNet.

“The knowledge, insight and years of combined business experience that the ServNet auction owners share is a powerful force in the industry,” he said, “and I know that our collaboration with them will prove a tremendous benefit to Houston Auto Auction.”

Bowers said his auction’s alliance with ServNet is part of a number of changes taking place at Houston Auto Auction, with a major facility expansion planned for early 2017.

Compiled by Jeffrey Bellant

Floor Planner Honors Sales

NextGear Capital, a Cox Automotive brand, presented its fourth annualAuctionPartnersAwardsatthe Red Rock Casino and Resort in Las Vegas as part of the 2016 National Automobile Auction Association convention.

The awards spotlight independently owned auction leaders and recognize service to growing and supporting the industry.

The 2016 Auction Partner Award winners are:

• Operational Excellence: West Michigan Auto Auction –Wayland, Mich.

• Operational Excellence: San Antonio Auto Auction – San Antonio

• Operational Excellence: Houston’s 1st Choice Auto Auction – Houston

• Remarketing Excellence: Carolina Auto Auction – Williamston, S.C.

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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