Used Car News 3/6/17

Lexus, Porsche Top Dependability Rankings

Lexus and Porsche reign again as the most dependable brands in the market.

The luxury marques were tied atop the J.D. Power 2017 Vehicle Dependability Study.

Thestudy,nowinits28thyear,examines problems experienced during the past 12 months by original ownersof2014model-yearvehicles.

Overall dependability is determined by the number of problems experienced per 100 vehicles (PP100), with a lower score relecting higher quality. The study covers 177 speciic problems grouped into eight major vehicle categories.

The study inds that the 10 top-

selling 2014 model-year vehicles average 134 PP100, which is signiicantly better than the industry average of 156 PP100. Two perennial best sellers — the Ford F-150 and the Toyota Camry — also lead their segments in the VDS this year.

“We ind buyers are increasingly avoiding models with poor reputations for dependability, so manufacturers can’t aford to let quality slip, particularly on their best sellers,” said Dave Sargent, vice president of global automotive at J.D. Power.

“While many expensive and niche vehicles do have excellent quality, the fact is that most consumers are shopping in the high-volume main-

stream segments. The good news is that consumers don’t have to spend a lot of money to get a very dependable vehicle.”

In addition to impacting purchase decisions and brand loyalty, better long-term quality is a key factor in contributing to higher residual values for vehicles.

For example, J.D. Power estimates that Toyota – the highest-ranked non-premium brand in the study –hasaresidualvaluesbeneitofmore than $750 per vehicle, compared with the average brand. This translates into a beneit of more than $1.3 billion for the 2014 model year alone.

“In the current industry environment of record levels of leasing and long-term loans, higher residual values allow automakers to provide more competitive deals to buyers,” said Jonathan Banks, vice president of vehicle analysis and analytics at J.D. Power. “This creates the opportunity to achieve higher market share and/or elevated proit margins.”

Lexus and Porsche tied to rank highest in vehicle dependability among all nameplates, with a score of 110 PP100. This is the sixth consecutive year Lexus topped the nameplate rankings.

Continued on page 3

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Vehicle Dependability Study

Toyota (123 PP100) follows in the rankings, moving up one position from 2016.

Following Toyota in the rankings are Buick (126 PP100) and Mercedes-Benz (131PP100).

Hyundai (133 PP100) is the most improved nameplate in the study, improving by 25 PP100 from 2016. At sixth position (up from 19th in 2016), this is Hyundai’sbesteverrankinginthe VDS.

“Hyundai’s dedication to product quality is a foundational part of our overall strategy,” said Barry Ratzlaf, vice president of customer satisfaction for HyundaiMotorAmerica.

“The Vehicle Dependability Study ranking demonstratesourcontinuousefort tobebetter.”

Other notable improvements include Dodge and Ford, which both improved by 21 PP100 from 2016, and Land Rover, which improvedby20PP100.

Toyota Motor Corp. models received 10 of the 18

segment awards, representing the highest number of awards ever received by an individual corporation in thestudy.

The Toyota Camry has the lowest PP100 score industry-wide.

GeneralMotorsmodelsreceivedfoursegmentawards.

Other models receiving segmentawardsinthestudy were the Ford F-150, Honda Ridgeline, Mercedes-Benz GLK-Class and Volkswagen Tiguan.

There was some bad news fortheindustry.

Continuing increases in technology-related problems contributed to overall dependabilityworseningfor a second consecutive year.

The industry average of 156 PP100 increased from 152 PP100in2016.

The audio/communication/entertainment/navigation category continues to be the most problematic area, accounting for 22 percent of all problems reported, up from 20 percent last year.

For a third consecutive

– from page 1

year,Bluetoothpairing/connectivity issues and built-in voice recognition misinterpreting commands were the mostreportedproblems.

New to the top 10 list of problemsreportedin2017is batteryfailure.

In fact, 44 percent more

owners reported a battery failure this year than in 2016.

Batteries are the most frequently replaced component not related to normal wear and tear in 3-year-old vehicles at 6.1 percent - up from4.8percentin2016.

The 2017 U.S. Vehicle Dependability Study is based on responses from 35,186 original owners of 2014 model-year vehicles after three years of ownership. The study was ielded from October through December 2016.

NEWS BRIEFS

KAR Reports Higher Revenue

KAR Auction Services Inc. reported higher revenue, but lower net income in the fourth quarter.

For the fourth quarter, KAR reported revenue of $813.7 million as compared with revenue of $695.7 million for the fourth quarter of 2015. Net income for the fourth quarter decreased to $45.5 million, as compared with net income of $48.3 million in the fourth quarter of 2015.

Fortheyear,thecompanyreported revenue of $3.15 billion as compared with revenue of $2.7 billion for 2015. Net income for the year increased to $2.2 billion, as compared with net income of $214.6 million for 2015.

Carfax Warns of Rampant Recalls

More than 63 million recalled vehicles are now in use across the country, a 34 percent increase from 2016, according to Carfax.

The annual research also suggests this issue afects nearly one in three vehicles in Texas, the highest rate in the nation.

Behind Hawaii, the other Gulf Coast states of Mississippi, Louisiana and Alabama round out the top ive.

In addition, people in California,

Texas, Florida, Pennsylvania and New York have the most vehicles with open recalls.

Minivans and SUVs are the ones most likely to have unixed recalls.

Enterprise Sets Credit Union Finance Record

Enterprise Car Sales generated a record $575 million in loan volume to more than 31,000 credit union members during 2016.

The 2016 loan amount represents a 15 percent increase from the previous year.

Enterprise Car Sales’ record auto loan volume is following the overall trend of ongoing auto lending growth in the credit union sector. New reports show credit unions haveincreasedtotalautomotiveloan market share to 19.6 percent, up two percentage points from a year ago.

In addition, used vehicle lending ofers increased proit potential for credit unions, with average used vehicle loan amounts reaching a record high of $19,227 in the third quarter of 2016.

Edmunds Says Lack of Trades Will Offset Off-Lease

Edmunds predicts that while a record number of of-lease vehicles

will ill dealer lots, a declining number of older trade-ins will put signiicant upward pressure on the late model used-car market this year.

The average used vehicle tradein is six-years-old, and Edmunds predicts the number of trade-ins will dip below six million this year for the irst time since 2012. In 2016, 38.5 million vehicles were sold in the used market, an increase of 0.6 percent from 2015. Thanks to the rise in leasing, the average used vehicle sold by a franchise dealer in 2016 was 4.1 years old, setting a new record low age and helping push the average used vehicle transaction price up to a record $19,189. Sales of certiied pre-owned vehicles hit a new record as well in 2016 – reaching 2.6 million units and encompassing 22.8 percent of all used vehicles sold by franchise dealers.

CPS Reports Lower Income, Originations

Consumer Portfolio Services Inc. announced earnings of $7.5 million for the fourth quarter.

This compares to net income of $9 million in the fourth quarter of 2015. Revenues for the fourth quarterwere$108.2million,comparedto

$95.3 million for the fourth quarter of 2015.

Total operating expenses for the fourth quarter of 2016 were $95.5 million, an increase from $79.5 million for the 2015 period. During the fourth quarter of 2016, CPS purchased $215.3 million in new contracts compared to $242.1 million during the third quarter and $269.2 million during the fourth quarter of 2015.

The company’s managed receivables totaled $2.3 billion as of Dec. 31, 2016, an increase from $2.292 billion as of Sept. 30 and $2.031 billion as of Dec. 31, 2015.

Annualized net charge-ofs for the fourthquarterof2016were6.97percent of the average owned portfolio as compared to 6.23 percent for the fourth quarter of 2015. Delinquencies greater than 30 days (including repossession inventory) were 10.96 percent of the total owned portfolio as of Dec. 31, 2016.

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

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Used Car News assumes no guarantees or liabilities concerning the accuracy of any advertisements. All Rights Reserved.

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CarMax Adds Operations

CarMax, Inc., celebrated the grand opening of its Murrieta, Calif., store, the company’s largest multi-purpose location on the West Coast.

CarMax Murrieta 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, and largest, four-lane auction facility on the West Coast.

In addition to production and auction services, the 35-acre property has a separate building for selling used cars to the general public.

The facility is located at 25560 Madison Avenue and has the capacity to stock up to 400 vehicles at a given time.

The opening of this new location has brought more than 250 jobs to Murrieta.

“The CarMax Auctions business is continuing to grow and we have beenholdingtwoauctionsperweek at some of our CarMax locations in the Los Angeles region in order to keep up with demand,” said Carlos Raygoza, auction services location general manager of CarMax Murrieta.

In celebration of the Murrieta store opening, CarMax donated $5,000 to Michelle’s Place, a local nonprofit organization that supports women and their families with cancer care.

CarMax associates recently volunteered with Michelle’s Place and nominated the organization to receive the donation.

CarMax also announced that The CarMax Foundation would be providing a $10,000 grant to the Boys & Girls Club in Murrieta to support 100 local underserved youth.

CarMaxisalsoawardinga$10,000 granttotheSpecialOlympicsSouthern California to help fund sports equipment, coaching materials and transportation of youth athletes.

CarMax associates nominated the Boys & Girls Club in Murrieta and Special Olympics Southern Califor-

nia to receive these grants.

The CarMax Foundation will also be donating an Imagination Playgroundvaluedatmorethan$15,000 to the Boys & Girls Club of Perris through its partnership with Kaboom to make play more accessible to children and families.

Imagination Playgrounds are innovative, loose-parts playgrounds that engage kids in creative play that is physically challenging and collaborative.

The Boys & Girls Club of Perris partners with 13 local elementary schoolsandplanstoincorporatethe Imagination Playground in educationalprogrammingateachofthese schools on a rotating basis.

CarMax also recently celebrated the grand opening of new store in Mobile, Ala., and Albany. N.Y.

The Mobile store is located at 965 East I-65 Service Road South. The Mobile CarMax has the capacity to stock approximately 200 used cars.

In celebration of the Mobile store opening, CarMax donated $2,500 to Feeding the Gulf Coast that will provide more than 12,000 meals to thoseinneedalongtheCentralGulf Coast.

CarMax associates recently volunteered with the nonprofit and nominated it to receive the donation after seeing its great work within the community.

The CarMax Foundation is also providinga$5,000granttotheBoys & Girls Clubs of South Alabama.

The Albany CarMax has the capacity to stock approximately 200 used vehicles.

In celebration of the Albany store opening,CarMaxdonated$2,500to the Regional Food Bank of Northeastern New York.

CarMax associates recently volunteered with the nonprofit and nominated it to receive the donation after seeing its work within the community.

The CarMax Foundation is also providinga$5,000granttotheBoys & Girls Club of Albany.

State Suspends Dealer

The Michigan Secretary of State has suspended the license of Miller Used Cars in Flint after an investigation with area law enforcement found multiple violations including the alleged illegal sale of temporary vehicle registrations.

The investigation began after the Michigan State Police informed the Secretary of State’s Oice of numerous traic stops involving vehicles displaying temporary registrations, often called paper plates, allegedly issued by the Flint dealership. The drivers of the vehicles each provided statements indicat-

Bulk Purchase

ing the temporary registrations had been purchased illegally and were also unable to provide suicient vehicle purchase documentation. Secretary of State investigators conducted an inspection of Miller Used Cars, with assistance from the Genesee Area Investigations Network. Upon inspection, investigators foundthatdealershipstafcouldnot provide requested records, could only account for seven of 385 temporary registrations purchased, and could not account for more than 60 vehicles, even though they had the vehicle titles in possession.

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DEALERSHIP OF THE PAST

LESS TECH, LESS REGULATION MADE PAST A MIXED BAG

By Jeffrey Bellant

For used-car dealers who have been in business for a while, the past was both good and bad.

South Carolina dealer Billy Threadgill, president of the National Independent Automobile Dealers Association, said starting out was much easier when he became a dealer 40 years ago.

Back in the 1970s, a dealer didn’t even need a bond. They could start with a dealer license, a lot and some insurance.

“That’s probably the extent of it,” he said. “Today you will work harder for less money and most dealerships today start out under-capitalized.”

Hesaidalow-endcarlot— without loor-planner backing — would probably require a minimum $100,000 in capital.

Back in the 1970s, Threadgill’s father started the business with a $15,000 mortgage.

couldeasilygetdealertrades by visiting franchise stores late in the evening or irst thing in the morning. Smith would ask about any trades and the used-car manager would have several cars in the back and throw him the keys.

“Now, they either take themtotheauctionorthey’d have a wholesale entity han-

Acquiring inventory in the past had both advantages and disadvantages.

Jerry Smith, co-owner with his dad of H.L. Smith Automobiles in Hurst, Texas, started in 1971.

When Smith started, he

dle it,” Smith said. “Back in the 1970s or ‘80s, I could actually test-drive the car and do an appraisal and condition report myself.

“Now when you buy and can’t test-drive them, you’re going to get some surprises.”

But for Threadgill, acquiring inventory meant living on the road.

“I stayed on the road continually to buy cars,” he said. “I’d leave my house on Sunday and head to South Florida. I wouldn’t come home until Thursday night.

“I was also the truck driver. I brought them home. I’d go from Florence to Miami twice a week and be back on Friday to work.”

But life was cheaper then, too. Threadgill said he could take $100 to pay for all his fuel and most of his motel expense.

Once it came to writing up a car deal, there was paperwork – lots of paperwork.

“I used to have to type or handwrite (the deal),” Threadgill said. “Minimum, it was an hour to do it, if you had all the docs available to type up. Today, it may take you ive minutes to enter the information and ive minutes to run your docs.”

Most dealers would use handwritten cards to track payments and delinquencies.

Threadgill used account cards set up by due date in a ile system. When a customer came in and paid, he’d write it down. If they didn’t, you put them in an unpaid account ile. Handwriting was important to make sure the information was clear and correct.

Smith said he used pay-

ment cards as long as he could until Texas passed an e-tag law so the dealership had to have a computer to generate it.

“But I still use payment cards,” Smith said. “I write conversations in red and payments in black or blue.”

Before the internet, print was king and was the main source of advertising for 78-year-old Ed Bass. Bass retired ive years ago from the buy-here, pay-here business, Car Credit Center based in the Chicago area.

“I was in the Chicago Tribune, I was in the Chicago Sun-Times, I was in the Herald-American,” Bass said.

He later moved into radio, television and, eventually, the internet.

Smith said advertising was much cheaper in the past.

“Back then, you could do shopper’s guides or the local newspaper ads and they were cheap,” Smith said.

“We did things like the Fort Worth Star-Telegram and you’re talking $2 to $3 for a small ad.

“In the 1980s, we even did afull-pageadinalittleshopper newspaper and it was $500 a week.”

Smith prefers the old way of advertising to the internet. For example, he had a vehicle advertised online that generated numerous hits, but sat on his lot for over a year.

“If there’s that many peo-

ple looking at it, why in the hell ain’t somebody buying it?” he said.

Recovering cars without starter interrupt or GPS devices made parts of the job more tedious.

Without GPS, Threadgill and Smith worked the customer application and contact sheet to ind the car through references, etc.

“Or you call them and tell them they won a free pizza, and get the address,” Smith said.

However, when Smith was forced to get a computer for e-tags, he also made the move to GPS units and realized how much easier it is.

“I’m telling you, I would never go back,” he said.

Regulations were not a problem decades ago

“I wasn’t worried when I came in to work that the CFPB (Consumer Financial Protection Bureau), the FTC (Federal Trade Commission) – and on and on –would come up to my door over stuf I never thought would be relative to our industry,” Threadgill said. “In 1975, when you did a deal, you had four documents if it was inanced. Today, if you don’t have a ile that’s two inches thick, you’re probably haven’t done something right.

“I think it’s much harder today than it was back then.”

Car Buy Raises Eyebrows

CHICAGO (AP) – Illinois Republicans criticized Democratic Comptroller Susana Mendoza recently for spending $32,000 on a used SUV when the state is months behind in paying its bills, an attack her ofice dismissed as an attempt to distract from GOP Gov. Bruce Rauner’s “failure.”

state budget stalemate.

That has led to social service agencies and other vendors going unpaid or waiting months to get money that’s owed them.

“I don’t think buying a 2016 SUV for the comptroller’s oice is a priority,” Schneider said. “I think that can wait.”

Mendoza’s oice said the money came from an administrative fund that’s not used to pay state bills and isn’t related to the bill backlog.

Director of Communications Abdon Pallasch said Mendoza has reduced the oice leet from nine to eight vehicles and the SUV replaced a car that was inoperable.

He said Rauner has a larger state vehicle leet, and noted state agencies controlled by Rauner have spent $11 million on vehicles over the past two years, not including leases.

WYNN | ENCORE RESORT & CASINO

The comptroller’s oice, which controls the state checkbook, bought the 2016 Ford Explorer from a central Illinois dealership and paid for it in full in January, shortly after Mendoza took oice, the Chicago Sun-Times irst reported.

Illinois GOP Chairman Tim Schneider called the purchase “outrageous,” noting Illinois has $11 billion in overdue bills because of the

“The governor’s party’s phony outrage at one purchase of a used car instead of the state’s $11 billion dollar backlog of bills he refuses to address is a transparent attempt to silence the state oice-holder who has been most vocal in holding the governor accountable for his failure to do his job,” Pallasch said.

Mendoza has repeatedly blasted Rauner.

avis budget group

Groups Sue FTC over Recalls

A coalition of consumer groups iled suit against the Federal Trade Commission over its recent certiied car decision.

the safety of used cars they advertise.

These proposed orders will also require the companies to inform recent customers, by mail, that their vehicles may have an open recall.

The groups say the FTC’s consent order set a de-facto standard for the autoindustrythat“allowsdealersto deceptivelyadvertisecarswithdangerous and potentially lethal safety defectsthathavekilledandmaimed people.”

When Christopher Columbus set out on his voyage in 1492, he didn’t have a map. And while Columbus’ journey landed him in the history books, the fact is he never did reach his intended destination. So what can we learn from this? To get where you’re going, it’s vital to know where you’re headed and what lies between you and that goal. And it helps immensely to have a map to guide you. Which brings us to our theme for 2017 NIADA Convention & Expo:

Independent used vehicle dealers need maps (metaphorically speaking) to guide them through the obstacles in order to arrive at their ultimate destination – success. Our job at NIADA is to provide the maps and knowledge – through our educational content in the unmatched training of the NIADA Convention. So let’s get started and set sail toward your goals!

Consumers for Auto Reliability and Safety (CARS), the Center for Auto Safety, U.S. Public Interest Research Group (PIRG), MASSPIRG, CONNPIRG, and CALPIRG iled a legal case seeking to have an appellate court review and overturn the FTC’s consent orders with General Motors, Lithia Motors and Jim Koons Management Co.

The orders settled separate administrative complaint allegations that each touted how rigorously they inspect their cars, yet failed to disclose that some of the used cars they were selling were subject to unrepaired safety recalls.

Under the consent orders, which would remain in efect for 20 years, the companies are prohibited from claimingthattheirusedvehiclesare safe or have been subject to a rigorous inspection unless they are free of unrepaired safety recalls.

The companies also have the option of early disclosure of the existence of the recalls in close proximity to the inspection claims.

The proposed orders also would prohibit the companies from misrepresenting material facts about

The groups claim the companies don’t have to perform safety recall repairs for certiication but “merely provide a contradictory, confusing, misleading, disclaimer that the cars ‘may’ be subject to a safety recall.”

“We’re optimistic that the court willreinintheFTC’sdangerousand irresponsibleabuseofitsauthority,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety.

“Instead of protecting consumers, the FTC is protecting unscrupulous auto dealers who engage in false and deceptive advertising about the safety of the cars they ofer for sale to the public.”

The groups had commented on the orders during the FTC’s public comment period. They also iled follow-up letters.

RETAIL: NIADA director of dealer development and industry icon Joe Lescota is featured in a track that covers all aspects of retail operations, including sales, marketing, inancing, inventory management and much more.

BUY HERE-PAY HERE: NIADA national director of 20 Groups Chuck Bonanno and the BHPH world’s best and brightest guide you through best practices in underwriting, collections and more, as well as the latest payment assurance technology.

COMPLIANCE: NIADA senior vice president of legal and government affairs Shaun Petersen is among the legal and industry experts who will get you up to date on the ever-changing regulatory and legislative issues that affect your business, and offer strategies to stay on the good side of regulators.

CERTIFIED PRE-OWNED: Learn why CPO is the hottest item in the used vehicle industry and how you can get your share of the record-setting certiied market from 2016 NIADA CPO Dealer of the Year Todd Hoagey and other top CPO dealers.

PEOPLE IN THE NEWS

ConsultancyAnnounces Promotions

TPC Management Co.recentlyannounced a pair of promotions.

Penny Wanna has been promoted to

president of Auction Academy. Wanna has been involved with the academyprogramsince its inception in early 2012 and most recently served as vice president of administration. Wanna will continue as vice president of administration for both TPC Management Co. and ServNet Auctions.

Jiles Wanna has been promoted to the position of vice president of client services.

Wanna joined TPC in 2004 and has worked on projects under all three umbrellas of the irm including TPC Consulting & Recruiting, Auction Academy and ServNet Auctions. In 2012 he completed the course requirements to become a Certiied Automotive Remarketer in the program initiated by the International Automotive Remarketers Alliance.

Previous to his CAR certiication, he completed the Vehicle Remarketing Industry Certiication through the IARA/ Northwood University program as well as Manheim’s Condition Report Writer Certiication

IAANamesChief OperatingOficer

Insurance Auto Auctions Inc. announced that Tim O’Day has been named the company’s chief operating oicer, reporting to

IAA CEO John Kett. O’Day will be responsible for managing the full scope of IAA’s operations across the company’s 173 North American auction locations. In addition, O’Day will head the transportation and logistics teams, client

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Your Source. Chase.

1Subaru, the Subaru logo, and Subaru Motors Finance are trademarks of Subaru of America, Inc. (“Subaru”) and any use by Chase Bank USA, N.A. (“Chase USA”) and JPMorgan Chase Bank, N.A. (“Chase”) is under license. Retail / Loan accounts are owned by either Chase or Chase USA and lease accounts are owned by Chase.

2Jaguar and Land Rover, their respective logos, and the financial group names (Jaguar Financial Group and Land Rover Financial Group) are trademarks of Jaguar and/or Land Rover and any use by Chase is under license. Retail/Loan and lease accounts are owned by Chase.

3The tradename “Mazda Capital Services” as well as the Mazda and Mazda Capital Services logos are owned by Mazda Motor Corporation or its affiliates and are licensed to Chase. Retail/Loan and lease accounts are owned by Chase.

© 2014 JPMorgan Chase Bank, N.A.

delivery team, and the company’s catastrophe team.

O’Day joined IAA in September 2015 as senior vice president of inance. Prior to IAA, he worked as chief operating oicer and chief inancial oficer for MedSpeed, a national healthcare transportation and logistics provider.

O’Day earned his Bachelor of Science degree in business from Indiana University.

Manheim Appoints GeneralManagers

Manheim announced general manager changes at ive locations.

Jason Blake takes over at Manheim St. Louis. Blake has served in a variety of roles at Manheim for 21 years and has worked at six locations. Most recently, he was an assistant general manager at Manheim St. Louis.

Victor Ferlaino takes over at Manheim Kansas City.

Ferlaino has 18 years of Manheim experienceinavarietyofroles including ive years as general manager at Manheim Cincinnati and leadership positions at Manheim Detroit. For the past ive years, he has worked at Manheim St. Louis.

ScottMaybee takes over at Manheim Northstar.

Maybee joins the Manheim Northstar team from his most recent position as vice president of operations for Nissan Canada Finance. He was also director of inancial products and marketing for Nissan Motor Acceptance Corp.

RayPriest takes over at Manheim Denver. Priesthasheldavariety of leadership positions at Manheim during his 16-year tenure. Most

recently, he was general manager of Manheim Seattle.

Tom Saldutte takes over at Manheim Milwaukee. Saldutte has 29 years at Manheim, most recently as the assistant general manager at Manheim Milwaukee.

Exeter Taps Financial Chief

Exeter Finance Corp. announced the appointment of company veteran Brad Nall to chief inancial oicer. Nall joined Exeter in July 2012 and has over 25 years of experience in the consumer inance industry.

Prior to Exeter, he spent 12 years at Citi’s auto inance and personal loan businesses invariousinanceroles.

Nall received his bachelor’s degree in inance from Southern Illinois University.

RETAIL MARKETS

LOUISIANA

Kevin Reeves, owner, Dixieland Autoplex, BatonRouge,La.:

“Dixielandopenedin1995. I became the majority partner in 2003. We have two locations across the street from each other. There was someone who was at the bigger location and he was retiring. He wanted to sell the property and made an ofer I couldn’t refuse. My intention was to move everything from one side to the other. I just haven’t shut the other one down yet.

“I average about 35 to 40 vehicles per lot. (As of midFebruary), we have probably 120 total. We’re in peak season, so you have to be ready.

“I get most of my vehicles from auctions, I do have a few franchise dealers that I buy directly from. For auctions, I go to Louisiana’s 1st Choice in Hammond, ABC-Baton Rouge and I go to Oak View Auto Auction. I like to stay close to the lot, because getting on the road

will wear you out.

“We average about 30 (sold) per month and the old side will sell about 20 per month.

“When I started in the business in the mid- to late ‘90s, I did a lot of buyhere, pay-here. Then I got away from it. Right now, 25 to 30 percent is buy-here, pay-here but we’re moving toward it more and more.

Probably about 50 percent of deals that are sent out are subprime.

“We try to get a minimum $1,500 to $2,000 down payment. When you start taking $800 down, they’re not committed to the car. They have to be partnered up with me.

“Average term length is 24 to 36 months.

“WeuseGPS.Butwedon’t want to pick up the car. We make every efort to resolve (the issue).

“The average unit is probablya2008.Averagemilesis somewhere around 80,000 to 90,000.

“We carry 75 percent

cars and 25 percent trucks/ SUVs. Of that 10 percent are pick-ups.

“Average recon costs are $300 to $500.

“Advertising is all internet - Cars.com and a lot of Craigslist.

“We recently sold a 2008 Chevrolet Tahoe. I think it had around 130,000 miles and we got around $15,000 to $16,000.”

NORTH CAROLINA

Steve Wetmore, president, McAdenville Motors,Gastonia,N.C.:

“We’ve been in business 15 years at this location. We have another store, BLVD Select Pre-owned, about a mile and a half down the road.

“We opened this location in February last year and it’s across the street from a Chevrolet, Honda and Kia dealer. So we’re kind of trying to chase the better turndowns.

“About 80 percent of our business in McAdenville is subprime and deep sub-

prime. At the new location we were dealing in subprime and prime, but we’re actually changing that model to be more like what we do down the street because it works so well.

“We’ve kind of scaled it backfromthe$20,000vehiclestothe$9,000to$15,000 vehicles. So our average retailpriceisinthe$10,000to $12,000 range.

“Typically we keep 50 to 60 vehicles in inventory. Between both lots we’ve got about 130 to 140 for tax season.

“We usually start ramping upourbuyingfortaxseason in November and December. We have to put everything through recon.

“Our average recon cost is $400 per unit. Another reason we have the new location is it holds our recon facility.

Compiled by Jeffrey Bellant

“Pretty much all of our inventory now comes from auctions like Manheim Statesville and ADESA Charlotte. We also buy a lot online from Manheim and ADESA.

“Five years ago, everything was trade-ins from franchise stores.

“We use Credit Acceptance and a lot of local subprime lenders.

“Average model years are 2008 through 2013. Mileage is anywhere from 60,000 to 120,000. We try to keep it in those ranges because of the cost of maintenance on the vehicle.

“I would say we carry 60 percent cars, 30 percent SUVs and vans and 10 percent trucks – when we can ind them. Trucks are just the hardest ones to ind.

“Our inventory is 60 percentimportsand40percent domestics.

“Our main advertising wouldbethewebsite.We’ve used AutoTrader, TrueCar and Cars.com in the past. Now we use CarGurus. We also do some Craigslist and eBay.

“We recently sold a 2008 Cadillac Escalade. That had 136,000 miles. We sold it for $16,884.”

WHOLESALE MARKETS

GEORGIA

Brad Neal, vice president – business development, Vemo Auto Auctions,WarnerRobins,Ga.:

“We’ve been in business for about eight months. Our irst sale was at the beginning of June. We’re just south of Macon (in central Georgia).

“We’re running two lanes every sale. We’re on a 10acrefacilityandwehavethe capacity for four lanes.

“Tax time is a little light (in mid-February). We’re running about 150 cars or so. We saw a little bit of an uptickinNovemberandDecemberasdealersgearedup for their tax inventory.

“This week (Feb. 21), we were just starting to see the tax money in the lanes.

“With it being a new operation, our sales percentages luctuated a bit in the beginning. Now, we’re selling in the high 50s to low 60s in percent sold. We’re starting to get a steady following.

“Onaverage.We’regetting about 75 to 80 dealers a sale

(inthelanes).Butwe’vehad as many as 100 to 110.

“All of our sales force is reaching out (to dealers). We’re getting buyers from south Georgia, some from the Atlanta area and as far west as Opelika, Ala.. We’re trying to extend our reach out toward Savannah.

“I would say we’re 90 to 95 percent dealer consignment, with 80 percent of that coming from new-car franchise stores.

“The remaining (volume) is from inance companies and bank repossessions.

“When we irst started, we didn’t have any contacts with banks or inance companies.

“Now that we’ve got a little bit of a foothold, we’re getting a little following.

“We don’t have any GSA or leet-lease units (non-repossessions).

“We’re signed up with Auction Pipeline. So we use them for all of our run lists and online presence.

“We also have a very strong simulcast system –

Velocicast – that is part of Auction Edge. It’s really proven to be an asset.

“Our average price is $5,500.

“Trucks always do well. I’d say full-size like F-150s and Silverado 1500s do the best, but even the smaller trucks do well. Four-wheel drives are really sought after.

“We’re really geared up for our irst tax time here in middle Georgia.

“We’re very enthusiastic and looking forward to seeing what 2017 holds for us.”

INDIANA

Karen Smith-Mancewicz, owner, Greater MishawakaAutoAuction, Mishawaka,Ind.:

“We’vebeenhere32years.

“We are running six lanes. We’re up a little bit in volume, but not huge. It’s just a little bump. We’re running about 525 a week.

“Sales percentages run about 53 to 54 percent. That’s steady. It’s about the same as this time last year.

“Volumes are 80 percent

dealer consignment. That hasn’t changed. The rest are leet-lease repos. Most of them are coming from secondary inance (companies).

“Volumes of repos are on the up. But I think that’s up nationwide. Cars are just being repossessed. Some dealers are folding.

“On average, we have about300peoplehereevery week. Everybody is waiting on tax time. It was late, having something to do with the Homestead credit.

But the tax money has inally hit. Their sales have been fairly strong up until this point. Prices are high. Overall, they are fairly happy.

“We (draw dealers) from Indiana, Ohio, Kentucky, Illinois and Wisconsin.

“All of our lanes are simulcast. We also use OVE and Smart Auction.

“Online sales are about 1 percent of (total). That’s (the inal bidder). For us, that’s a good number.

“We also have a salvage

Compiled by Jeffrey Bellant

sale. It’s a video sale. We’ll have anywhere from 12 to 40, it just depends. Most of them are just in-ops, or just notsafetodrivethroughthe lanes.

“We have detail and (reconditioning services). We don’t do body work here. We farm that out.

“Theaverageprice(across the block) is about $5,000. Everybodywantsthe$5,000 to $7,000 car.

“It’s the small SUVs that are (strong). Impalas are struggling right now. I don’t know if it’s because the market is struggling with them right now. They’re such nice cars, but the bottom seems to have fallen out on the market. My sales staf drives Impalas and that’s because they are bulletproof.

“Lastyearwasagoodyear. I’m hoping for improvement in 2017. I’m looking for a small increase. Realistically,ifwecangeta2-to3or 4-percent increase, we’ll be doing well.”

2012 MODELS2014 MODELS

2015 2013MODELS MODELS

Perhaps it’s in the DNA –my grandson Aiden loves cars. I suppose I shouldn’t be really surprised. Cars or trucks of any description

was as identiiable as a ingerprint. A Rover 75 Saloon from the ‘50s emitted an urgent whine from the gearbox that sounded like

Tony Moorby

• 50-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

have illed family interests around here for as long as I can remember.

My son Robby is in the business learning all he can from the inside out. Even back in post-war England my dad was fascinated by cars and could tell you the make of any approaching vehicle (there weren’t many around back then) just by the sound it made. A combination of the chorus of noises from the engine, exhaust and transmission

an asthmatic trying to gasp for breath. The starter motor on a 1965 Triumph Herald had a zinging clang that would never be connected to another car.

The sounds were all as much a part of the character ofacarasthestyling.Ihada 1974 MGB GT whose deepthroated exhaust resonator box announced my departure for work to my neighbors as clearly as setting a clock.

Aiden’s fascination started

early. At age two, he would line his toy cars – he has hundreds of them – in rows as straight as soldiers along the edge of the carpet and would spend hours arranging and rearranging them till the layout met his pleasure.

He’s always had an eye for style and color, appreciating the lines and swoops of design elements that diferentiate one from another. Now aged nine, he possesses what’s as close to a photographic memory as you can get. He loves facts and research and so can regurgitate any information, once iled away, upon demand.

Ask him nicely and he’ll probably come up with the engine size and horsepower of a 1960 Ferrari GT California or the diference between the engines of a 1963 E-type Jaguar Series 1 and its later twin, the Series 2. We recently visited The LaneMotorMuseumherein Nashville that boasts a great collection of early European

cars, especially small and micro cars. He knew more about them than I did!

A lifelong afection for Lego sets now extends to (expensively) collecting their car kits, which adorn various rooms in his and our houses. He recently commissioned me to paint a Bugatti Veyron for his bedroom.

His dexterity with any form of electronic device allows indulgences in data gathering to car racing. He can now build a virtual car from scratch using parts that he matches together for peak performance. And then he races them – on the internet, of course.

After the race, he’ll tweak this or that to see if he can improve things further and of he goes again. He’s as likely to have some (often classical) music blaring

away to accompany his efforts.

He’s already good at math and has a vocabulary to meet or beat most adults. He’ll make a great engineer one day – that is if he’s not a brain surgeon!

The school run is now a car-spotting opportunity twice a day, with a running commentary packed with his abundant observations and knowledge. And questions galore – he’s like a mynah bird jabbering away in the back seat asking for the car to be put in ‘sport mode’ so he can feel the acceleration and hear the exhaust note.

I know kids have passing fancies, but if he’s like the rest of us he’ll enjoy a lifelong passion. Even if he doesn’t end up in the business he’ll almost certainly own an exotic car or ive.

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

Across

1. Tesla CEO

3. J50 and SP12

9. Block

10. Chrysler convertible

11. Any auto

12. Like the ins on a T-Bird

14. First letter in Lamborghini

15. Away

16. Depart

17. Rate setters, for short

18. Completed negotiation

19. Polish the car

23. Big name in upscale wheels

24. Traic light color

26. Kia crossover

27. Skylark, for one

28. Con man’s trick

30. Blood relative, for short

32. he 405 runs through it, for short

33. Big name in dozers, abr.

34. Durango maker

36. ___ Cruiser

39. Technology used in self-driving cars

41. Gearshit topper

42. Rudely assertive

43. Bill featuring Jeferson

Down

1. Ford model since 1964

2. Outback maker

3. Cooler 4. Motor

5. Improved form and structure

6. Cheer for a cheer leader

7. Mechanic’s tool, 2 words

8. What a driver takes

9. Renewable fuel

13. Steering ____

20. Extra large, in clothing

21. Famous hybrid

22. BMW rival

23. Like some high performance cars

25. FRS and iQ MY

27. It may come straight from the horse’s mouth

29. Geo model

30. “Born From Jets” car company

31. Deinitely not pretty

35. Poe’s initials 36. Nave bench 37. Trendy 38. Raise 40. Wall is one

AROUND THE BLOCK

DEALERS HAUL TRUCKS FROM BLOCK

Carolina Auto Auction hosted its 2nd annual Truck Sale, featuring 400 pickup trucks and free BBQ in the lanes on Tuesday, Feb. 7.

The event surpassed last year’s Truck Sale. Carolina paired the event with a special

rental unit sale the following day.

During that second day’s sale, Enterprise and Avis each ran over 100 units with special transportation and float rates available to all dealers attending the sale.

The independent auto auction also ran over 700 fleet/ leaseunitsonthesecondday, bringing the total of the twoday event to nearly 1,600 units.

Both days’ events were part of a larger “Race Into Tax Time” sales event.

After each sale, CAA put dealers in cardboard race cars and gave them a chance to win a trip to the Richard Petty Driving Experience in Charlotte on March 17.

Compiled by Jeffrey Bellant

Auction Combines Cars, Cash, Charity

Southeastern Auto Auction of Savannah held its third annual “Cars, Cash&CaringSale,”onFeb.15,with prizes and a charity efort.

The “Cars” portion of the sale featured a large run of vehicles including a record consignment of leetlease, bank and rental units.

The“Cash”portionofthesalefeatured $25,000 in Cash & Prizes that were given away after the sale.

The “Caring” portion of the sale featured a donation of over $4,000 to Shriners Hospital for Children. This donation came from money raised through 50/50 drawings and an auction contribution for every transaction made over the previous ive weeks.

“It was a great day for both buyers and sellers,” said Bill McCready, auction vice president. “Our institutional business has grown rapidly over the last two years and it was on display for this sale.”

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

EXTENDED ARBITRATION

Get an extended arbitration period of 48 hours from the time the vehicle is received, regardless of the number of days since purchase*, when you transport eligible DealerBlock purchases with CarsArrive Network.

è Eligible purchases include includes off-lease, rental, dealer, leet and repo vehicles posted in the open sale from an offsite location on ADESA DealerBlock.

è Without CarsArrive transport, most online buyers have only up to 14 days from the date of purchase to ile an arbitration claim.