Used Car News 5/1/17

Consumers Grow Skeptical of Self-Driving Cars

By Jenny King

DETROIT — Autonomous vehicles are coming, but do consumers want them?

The latest U.S. Tech Choice Study from J.D. Power indicates a growing nervousness among consumer groups when it comes to actually embracing self-driving cars.

In Power’s third annual study, conductedonlineearlierthisyear,11 percent more Gen Z consumers (the youngest consumers) and 9 percent more Pre-Boomers (the oldest) said they “definitely would not” put their trust in automated technology compared with responses from

these age categories in 2016.

Generation Y, some of whom turn 40 this year, was the only group that did not fluctuate from the preceding study.

At the same time, interest in collision protection and driving assistance technology is growing, Power vice president Dave Sargent told the Automotive Press Association in mid-April.

The Tech Choice Study, Sargent said, determines what consumers want and how they feel about the future.

Drivers today are asking for more help from their vehicles but, at the same time, are distrustful of techno-

logical advances.

Kristin Kolodge, director of driver interaction and human machine interface research at J.D. Power, said seven of the top 10 most desired new-vehicle pre-price features chosen by study participants included “seeing” technologies like smart headlights, lane-change assistance and camera rear-view mirrors.

But when prices were revealed, respondents clutched their wallets and tended to name less expensive features like simple wireless device connection ($60) and smart parking ($100) as those most desired. Among the top 10, emergency braking and steering system (a $700 op-

tion) ranked last, though 31 percent said they would be willing to pay for the technology.

Kolodge pointed out that 40 percent of Boomers said they see no benefits to self-driving vehicles.

But younger people show a little more enthusiasm for vehicle autonomy.

Following the Power presentations, a panel of students from Northwood University in Midland, Mich. responded to questions from a moderator.

And all three shared skepticism of the touted advantages attached to autonomous vehicles.

Continued on page 5

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NYC Takes Aim at Subprime Auto Finance with Bill

A group of New York City officials, including Mayor Bill de Blasio, announced a package of legislation aimed at finance practices in the used-car industry.

The legislation would require used-car dealerships to post a Consumer Bill of Rights and disclose information about financing and pricing, provide all required notices to the consumer in whatever language used to negotiate the contract, and provide consumers with the option to cancel their contract within two days of the sale.

“When buying a used car, consumers will now have the information they need to avoid loan products that border on usury,” de Blasio said.“We’refightingtoprevent unscrupulous dealers from peddling deceptive loan products, which too often target families that are already economically vulnerable.”

The legislation comes as a result of the public hearing hosted last October by Department of Consumer Affairs Commissioner Lorelei Salas and Rafael Espinal, Jr., chair of the Council Committee on Consumer Affairs. The DCA licenses used-car dealers in the city.

From October 2013 through March 2017, DCA received 826 complaints from consumers related to purchase or payment issues in connection with used cars. The complaints range from instances of

forgery on contracts to a lack of material disclosures by dealership staff and are concentrated in boroughs outside of Manhattan where most of DCA’s licensees are located and customers are more likely to rely on automobiles for transportation.

The top five ZIP codes by number of complaints received are all in Brooklyn with the exception of Ridgewood in Queens. The characteristics of these neighborhoods suggest that used car financing issues are concentrated in areas that are traditionally unbanked or underbanked, have populations that are largely New Yorkers of color, or have sizeable communities of individuals with limited English proficiency.

The bills “aim to tackle deceptive practices engaged in by used-car dealers.” These include misrepresenting add-on products as necessary to obtain financing and misstating monthly payments.

The bills also consider it a deceptive practice to place a consumer in a longterm contract and not disclose dealer markups of lender financing rates, total interest rate, and the total amount a consumer will pay for a car over the life of a loan.

The proposed legislation would require used car dealerships to disclose the following to consumers:

• The lowest annual percentage rate offered by a finance company to the consumer;

• Any charge imposed by the dealership for arranging financing, including mark-up charges and processing fees;

• A statement that the consumer is not required to obtain financing through the dealership;

• The price of each additional good, accessory, service, product, or insurance offered for sale with the automobile; and

• The total cost and monthly payments, including financing, to purchase the car with each additional item included, without any items included, and with all items included.

The proposed legislation would also require used car dealerships to post and distribute a Consumer Bill of Rights to consumers. Dealerships will be required to retain a copy of the bill of rights signed and initialed by the customer for six years following the sale.

The Bill of Rights would inform consumers that used car dealerships must:

• Offer a contract cancellation option agreement;

• Inform consumers that they are not required to finance their purchase through the dealership, they have the right to pay in cash or seek a loan from another lender;

• Sell cars at the price advertised, quoted or posted on the automobile;

• Inform consumers that they can file a complaint;

• Inform consumers that they are entitled to a “Used Car Buyer Guide,” as well as various warranties and rights under N.Y. state laws;

• Inform consumers of the lowest annual percentage rate offered by the financing company and any fees being charged by the secondhand auto dealer for suchinancingpurchases;and

• Disclose in writing the itemized cost of each additional good or service being offered, including the monthly and total cost of financing with and without each additional good or service.

Recalled Airbags Wind up in Other Used Vehicles

LAS VEGAS (AP) – A Nevada crash that nearly killed a young woman has exposed a hole in the government’s eforts to get dangerous Takata air bag inlators of the road: There’s nothing that prevents the devices from being taken from wrecked cars and reused.

Shrapnel from an inlator punctured Karina Dorado’s trachea after a relatively minor crash in Las Vegas on March 3.

She was rushed to a trauma center, where surgeons removed pieces that damaged her vocal cords. She is still being treated for neck injuries.

Dorado, 18, is among

nearly 200 people injured or killed by the inlators, which can explode when the chemical propellant inside degrades. What’s different about her case is how the inlator wound up in her family’s 2002 Honda Accord in the irst place.

Dorado’s father, Jose, bought the car for her in March of last year so she could get to and from her job at a customer service call center, attorneys for the family said Wednesday. The family did not know the car’s history, including that it had been wrecked in Phoenix and declared a total loss by an insurance company in 2015, the attor-

neys said.

According to AutoCheck, a service that tracks vehicle histories, the car was given a salvage title, repaired and resold in Las Vegas last spring.

Engineers from Honda inspected Dorado’s car after the crash and found that the inlator blew apart.

They traced the inlator serial number to a 2001 Accord, which had been covered by a recall but never had the inlator replaced.

Honda spokesman Chris Martin said the air bag in the 2001 Accord must have been removed by a salvage yard, or it could have been stolen.Somehowitendedup

with the shop that repaired thecareventuallyboughtby the Dorados.

It’s perfectly legal under federal law for air bag assemblies or other parts subjecttorecalltobepulledout of wrecked cars and sold by junkyards to repair shops that may not even know the danger.

No government agency monitors the transactions.

In addition, no states appear to have laws against the reuse of recalled parts.

“What there should be is a program that prevents old air bags from being recycled,” said Michael Brooks, acting director of the nonproitCenterforAutoSafety.

Carfax, another auto history tracking service, said it is unknown just how many cars are sold each year with salvage titles, but they number in the thousands.

Takata inlators worldwide have killed at least 16 people and more than 180 injured.

The problem touched of the biggest automotive recall in U.S. history, with 69 million inlators recalled. About 100 million have been recalled globally.

Takata has been ined and faces lawsuits, and it could be driven into bankruptcy. Continued on page 8

NEWS BRIEFS

IIHS Raises Bar on Used Car Recommendations

The Insurance Institute for Highway Safety is applying more stringent criteria to its list of recommended used vehicles for teens, as recent safety improvements have percolated down to lower-cost used cars, SUVs, minivans and pickups.

Teenagers are among the riskiest drivers, but they often end up with inexpensive vehicles that don’t offer adequate protection in a crash. IIHS began publishing a list of recommended used vehicles for teens in2014tohelpfamiliesindsafervehicles that it within their budgets.

Thelatestupdateincludes49“best choices,” starting under $20,000, and 82 “good choices,” starting under $10,000.

For the irst time this year, small overlap front crash protection has been factored into the best choices section of the list. And the bar has

been raised for the less expensive good choices as well, with better side and head restraint ratings required.

Prices for listed vehicles are provided by Kelley Blue Book, based on estimates for a private-party purchase near the institute’s Arlington, Va., headquarters.

America’s Adds Two More Auctions

America’s Auto Auction has announced the acquisition of two auction locations: West Michigan Auto Auction in Parma, Mich., and Interstate94VehicleAuctioninWayland, Mich.

Carl Miskotten, who will stay on as general manager of the two facilities, sold both facilities to America’s Auto Auction.

The oicial date of the acquisition was April 1. America’s Auto Auction now has

MILESTONES

21locations. Earlythisyear,theirm acquired seven auctions from the Auction Broadcasting Company.

Owned by CEO Ben Lange and private equity irm Trinity Hunt Partners, America’s Auto Auction launched in 2006 with four auction facilities.

Miskotten started West Michigan in 1997. The auction joined ABC in 2000, but Miskotten regained sole ownership in 2008.

Miskotten has operated the I-94 Vehicle Auction since 2007.

GWC Improves Online Coverage Lookup

GWC Warranty has improved its online coverage lookup tool to betterassistdriversinobtainingcritical vehicle service contract information.

A redesigned layout makes it easier to enter required information

while downloadable electronic contracts provide drivers an added level of detail about their coverage.

With the availability of electronic contracts through the coverage lookup tool, customers enter their last name along with either an ID card number or the last six digits of their VIN.

Franchise Stores Sell 37 Percent of All Used Cars

New-car dealerships sold 14,968,206 million used vehicles in 2016, which accounted for 37 percent of all used vehicles retailed.

According to the annual member survey by the National Automobile Dealers Association, the average selling price of a used vehicle was $19,866, up 2.5 percent from 2015. The number of customers purchasing a new- or used-vehicle service contract was 43.7 percent, up 1 percent from 2015.

Gregory Joseph Koepfer, general manager of ADESA Knoxville, died from a heart attack April 15. He was 48. Koepfer recently celebrated his 14-year anniversary with ADESA. He served as the general manager in Knoxville for nine years and was previously the general manager at ADESA Des Moines.

Koepfer is survived by his wife Stephanie, son Nathan and daughter Allison. In lieu of lowers, donations are

being accepted on Greg’s behalf to the Concord Christian School Athletic Department (11704 Kingston Pike,Knoxville,Tenn.37934)orthe

Habitat Home Store (303 Simpson Rd., Lenoir City, Tenn. 37772).

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J.D. Power– Continued from page 1

Gen Z respondents to the Power study did cite the potential for fewer accidents among the positives of autonomous vehicles.

Kolodge sees a burden for both new- and used-car dealers when it comes to explaining the growing sophistication of technologies available to drivers.

There is reason to believe acceptance will grow.

Hybrid, full-electric and hydrogen-powered vehicles are proving themselves in the marketplace, Kolodge said, in spite of initial concerns about alternative-fuel power plants and their practicality. Autonomoustechnologiesandnewapproaches to the use and ownership of cars likely will follow a similar path over time.

Looking ahead 30 years, Sargent called the change in the automotive world “seismic,” including everything from autonomous taxis and transport vehicles to increased ride- and vehicle-sharing and communication between vehicles and the infrastructure.

Generation Z (born 1994-2004) shows the highest interest in alternative mobility types: half say they aredefinitely/probablyinterestedin mobility sharing/co-ownership; 56 percent would consider unmanned mobilityand56percentgivethumbs up for mobility-on-demand.

The auto industry must steer consumers into future technologies, Sargent said. But in the end, it is consumers who will decide which technologies win.

Repo Killer Gets Life Sentence

HOUSTON (AP) - A Houston man will serve life in prison with the possibility for parole after being convicted of capital murder in a shooting rampage at a used-car dealership that left three men dead.

Jurors found James Tinsley IV guilty on April 11 for the January 2015 shooting deaths.

The attack happened at Immaculate Auto Sales in Houston, killing brothers Tony and Jesse Contreras and Tony Contreras’ adult son, Casey Contreras.

Prosecutors told jurors that Tinsley shot the three after a car he had bought from the dealership was repossessed.

Man Scams Car Dealers

A Connecticut man was sentenced to eight years in prison, followed by three years of supervised release, for operating two separate fraud schemes, one involving buying and selling cars to dealers.

Accordingtocourtdocumentsand statements made in court, the irst scheme involved the theft of postal money orders. Marc Alexander and others conspired to steal blocks of blank postal money orders from the U.S. Post Oice in Old Greenwich. Alexander, his wife Rachael Alexander, and others then imprinted the money orders with various denominations using a computer font designed to make them appear to be authentic.

The Alexanders, Bernard Harris and others then deposited the fraudulently imprinted postal money orders into numerous bank accounts, either at an ATM or at a teller window. Members of the conspiracy then withdrew and used the funds.

At times, members of the conspiracy also used the fraudulently imprinted postal money orders to make payments to other individuals.

The loss from this scheme was $313,570.

The second scheme involved the fraudulent sale of inanced vehicles.

3

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The Alexanders took straw buyers to various car dealerships and had them ill out inancing paperwork to buy high-end cars. Typically, the Alexanders would take the car and the straw buyers would sign a power of attorney form to allow them to obtain a new title for it.

The Alexanders would then contact the Connecticut Department of Motor Vehicles and claim that the title had been lost and they needed a replacement title. At the DMV, they would present a fake letter from the car inancing company stating that the loan had been paid of in full.

After they received the new title, the Alexanders would sell the car to another dealer. The original car loans were not paid and went into default.

The straw buyers inanced more than $1 million in fraudulent car loans during the course of this scheme.

Marc Alexander pleaded guilty to one count of conspiracy to commit wire fraud stemming from the postal money order scheme, and one count of conspiracy to commit mail and wire fraud stemming from the vehicle scheme.

Rachael Alexander, also known as Rachael Vierling, and Bernard Harris have pleaded guilty and await sentencing.

Owner Opposes Moratorium

MURFREESBORO, Tenn. (AP) –

The Murfreesboro City Council has issued a moratorium on new site plans for new- and used-car stores until traic safety requirement are improved.

The Daily News Journal reports that the dictate doesn’t govern existing lots. But one used-car dealer is using his position on a city board to oppose it.

Planning Director Gary Whitaker says the council’s unanimous vote stemmed from concerns about public safety.

He says trucks have been unloading cars in the right of way on busy streets and merchandise has been parked in a manner that blocks the vision of drivers.

Rutherford County Industrial Development board member Jimmy Evans, who owns three used-car lots, says the moratorium unfairly inhibits legitimate business for an uncertain period of time. He called for the city to craft better site plans.

Whitaker says the city will work on new requirements to ensure trafic safety.

PEOPLE IN THE NEWS

Cox Automotive Hires Economists

Jonathan Smoke joins Cox Automotive as chief economist and will lead the creation of

an economic industry insights oice.

This new oice is tasked with leveraging data to expand Cox Automotive’s expertise in all aspects of the automotive industry. Smoke succeeds Tom Webb, who is retiring June 30. Based in Atlanta, Smoke reports to Isabelle Helms, vice president of research and market intelligence, Cox Automotive.

A 21-year veteran of the housing industry, Smoke most recently served as Realtor.com’s chief economist. Prior tothat,hewasthechief economist for Hanley Wood, a media and market intelligence

company, and also served in a variety of roles at Beazer Homes, including senior vice president of strategy and innovation.

Smoke holds a bachelor’s degree in economics and religious studies from Rhodes College and a master’s degreeinbusinessfrom The University of Texas at Austin.

Charlie Chesbrough is joining Cox Automotive as senior economist and senior director of industry insights. Chesbrough previously served as executive director and senior economist for the Original Equipment Suppliers Association (OESA).

Prior to joining OESA, Chesbrough was the senior principal economist and director of industry analysis at IHS Automotive, where he was responsible for developing and integrating statistical models and economic scenarios into global automotive forecasts.

Chesbrough brings more than 25 years experience in market planning; demand forecast modeling and consumer research for Fortune 500 companies across many industries. Reporting to

Smoke and based in Detroit, he will assist in the creation and development of the new Cox Automotive economic industry insights oice.

In addition, he will direct the company’s automotive forecasts as wellasmanagetheeconomicindustryinsights related to the new-car sector of the automotive market.

Tech Execs Join KAR in Acquisition

KAR Auction Services Inc. announced the acquisition of CarCo Technologies Inc., d/b/a Drivin, in a $43 million stock purchase transaction.

Drivin aggregates automotive retail pricing, registration and other market and economic data from a variety of public and proprietary sources. The insights generated from that data are deployed through predictive pricing, inventory management and vehicle matching tools that help customers buy, sell and source vehicles.

KAR plans to build on this foundation and leverage Drivin’s infrastructure and user interface to deploy its own products and ser-

Recalls – Continued from page 3

The inlator that nearly killed Dorado was among the most dangerous made by Takata.

In testing, inlators taken from older Hondas had a 50 percent chance of blowing apart, prompting the automaker and the National Highway Traic Safety Administration to issue desperate pleas for people to get them replaced.

Unlike most other air bag makers, Takata used the chemical ammonium nitratetocreateasmallexplosion to inlate the bags in a crash.

But the chemical deteriorates over time when exposed to heat and humidity, causing it to burn too fast

and blow apart a metal canister.

Attorneys for the Dorado family said they are trying to ind out where Jose Dorado bought the Accord.

“It’s a tragedy that shouldn’t have happened,” said Billie-Marie Morrison, one of the attorneys. “You would think in today’s age with communications technology these types of things should not be allowed to happen.”

Morrison said she doesn’t know if the elder Dorado checked the Accord’s vehicle identiication number in a government database of recalled vehicles to see if it had any unixed recalls. Had he checked, he would

vices as well.

Headquartered in Chicago, Drivin was launched in 2015 by Groupon co-founders Brad Keywell and EricLekofsky, Drivin

CEO Kayne Grau and Chief Operating Oicer JustinMahlik

Both Grau and Mahlik will continue to lead Drivin at KAR as president and chief operating oicer, respectively. The company will also retain the Chicago location and key members of the Drivin leadership team.

CarMax Promotes HR Chief

CarMax Inc. announced the promotion of Diane Long Cafritz to the newly created position of chief human resources oicer and senior vice president.

Cafritz will lead all human resources and loss prevention areas with the primary responsibility of leading CarMax’s strategy to attract, develop and retain talent to support the company’s business and its future growth.

Cafritz joined CarMax in 2003 as assistant general counsel, managing commercial and consumer litiga-

have been given a false sense of security: The NHTSA website says the car has zero outstanding recalls. Honda said that before the Phoenix wreck, the previous owners had the air bag inlator replaced twice under recalls.

The federal government has no authority over used car sales and cannot stop air bags from being resold, a NHTSA spokeswoman said. The American Association of Motor Vehicle Administrators said it knows of no states that prohibit salvaged parts from being reused, though some require parts tobeinspectedtomakesure they aren’t stolen.

Honda’s Martin said the

tion and has provided signiicant leadership within the company’s ield operational leadership team. She was promoted to vice president in 2014.

Prior to joining CarMax,shewasemployed by McDermott, Will & Emery in Washington, D.C., in the litigation department.

She earned her B.A.

in economics and international relations at Tufts University, and received her J.D. from the University of Virginia.

CarMax is hiring to ill 110 positions among the company’s stores in the Bay Area.

This includes 75 positions at a new CarMax location in San Jose slated to open in June.

BSC America Taps AuctionVetforGMPost

BSC America announced that industry veteran Eric Wagner had been named general manager of Tallahassee Auto Auction.

Wagner brings more than 30 years of auto

auction experience to the role. Wagner’s career has taken him to auction markets in Detroit, Flint, Mich., Atlanta and, more recently, Daytona Beach, Fla., where the Florida Independent Automobile Dealers Association (FIADA) recognized him as the Auction Person of the Year.

The new San Jose store will be located at 750 W. Capitol Expressway and will be joining Pleasanton, Fremont and Santa Rosa as the fourth CarMaxlocationintheBay Area.

automaker has a program to buy up air bags made by Takata.

In the past few years it has purchased 60,000 to take them out of circulation, he said.

Brooks said people should be suspicious of cars with salvage titles because there is no way of knowing where the parts came from or the quality of the repair work.

Althoughsomearesafe,stolen or counterfeit parts can be used, he said.

“There are just so many questions that are impossible to answer,” he said.

“I would always recommend buying something that has no crash history if you can.”

In related news, New York’s attorney general reached settlements with 104 auto dealerships that sold vehicles without disclosing that the vehicles were under recall for unrepaired safety issues.

Aspartofitsinvestigation, the attorney general’s oice surveyed advertisements, monitored vehicles covered by safety recalls, and identiied auto dealers that advertised vehicles with unrepaired safety recalls.

As part of the settlements, the participating auto dealers are required to adhere to a set of guidelines in order to alert consumers that their vehicles may have unrepaired recalls.

RETAIL MARKETS

MINNESOTA

James Long, president, Long’s Auto Place Inc., St. Paul, Minn.:

“We’ve been in business since May 1991. I have one location.

“We have a retail division and a wholesale division. We keep about 55 vehicles for sale on the retail lot. There’s typically eight to 10 in reconditioning at a time, too. So we carry from 60 to the mid-70s.

“On the retail side, we sell about 30 – give or take – per month. In 2016, we were about 17 percent back of what we’re doing this year. We have a much better year going on in 2017 at this point.

“It seems like we’re working more in special inance. Probably 60 percent of everything we deliver has a substantial acquisition fee and when I say that, I mean probably over $100.

“Tax time is big for us and it was a really lat tax season.

“(Toacquireourvehicles),

we have dealers call us for buy bids. We also get them from auctions. I also have a buyer/wholesaler who is on the road six days a week. So whenever I see things he brings in that will work for me retail – or when he sees something he thinks will work well, he brings it up to me. So I’m doing much less traveling to purchase vehicles for myself in recent years.

“I don’t do buy-here, payhere because almost every single one I’ve done in the past has been a lop.

“I don’t have cars speciically set up for special inance. But, as I said, about 60 percent of my deals are special inance. It’s all about structure when you do special inance.

“The average price on the lot is $12,815. It’s within a couple of percentage points of last year.

“Averagemileageisamoving target, but it’s probably around 80,000. Our average modelyearisprobably2009 or 2010.

“We have a small percentage of trucks, but we’re doing a little bit more. Typically, 45 percent of our business is SUVs. It’s probably 45 percent cars and 10 percent trucks.

“I carry about 70 percent domestic and 30 percent import.

“Reconditioning costs $481 per car. It’s probably up $30 a car.

“Wehaveourownshop.So we do 75 percent of all the workinternally.Wedon’tdo any detailing here. We only have a two-man, two-bay shop that can get overloaded. The reason is we have a lot of retail clients that want to come in because they bought their vehicles here and like our technicians. It’s tough to turn down a client who bought a car from us six months ago and wants their work done here.

“Advertising is mainly digital. We do Cars.com, CarGurus, AutoTrader, Craigslist and Google Search. We did a large direct mailer – a bankruptcy

mailer – and that did not work out too well.

“We recently sold a 2013 Dodge RAM Bighorn crew cab for $27,000. It had 39,000 miles.”

VIRGINIA

Charles T. Smith, owner, Smith Auto Sales, Drake’s Branch, Va.:

“We’ve been in business 30 years. It’s just a momand-pop thing.

“We keep anywhere from 10 to 15 on the lot.

“Lately we haven’t been doing that well, maybe selling ive or six a month.

“I get my cars from auctions. I use Motley’s Richmond Auto Auction.

“Average retail price is about $8,995, something like that.

“We just do straight retail. We don’t do buy-here, payhere.

“We carry anything from a 2005 to 2010. Mileage averagesfrom70,000to150,000. Finding cars (in that market) is getting tighter and tighter.

Compiled by Jeffrey Bellant

“(Inventory) is a combination of trucks, cars and SUVs. Trucks are harder to get. I’ll buy them when the price is right.

“Imports cost more, but people like them better. I still try to stick with some Chevrolets and Fords. But Hondas, Toyotas and Nissans – we sell them all the time. It’s probably 50 percent imports and 50 percent domestics.

“Mostofthetime,withmy recent business, reconditioning is just a cleanup and I do that myself. Outside of that, it’s brakes and muflersmostly.Idon’treallydo anything else. I service my own stuf. I don’t do outside work.

“I don’t do any marketing or advertising. It’s all word ofmouth.Butmysonputup a website not too long ago.

“This year is a whole lot better than last year. Last year was the worst year I ever had.

“OnerecentcarIsoldwas a2006NissanAltima.Ithad 134,000 miles. I got $6,500.”

WHOLESALE MARKETS

LOUISIANA

Steve Chiasson, owner and managing partner, Greater Shreveport-Bossier Auto Auction, Shreveport,La.:

“We’ve been in business 10 years, going on 11.

“We’re running three lanes consistently.

“Our volumes are up this year. We’ve run 5,600 cars this year (through April 20), and last year, at this point, we had run 4,815. So we’ve run around 1,000 more cars. It’sduetoalotofhardwork.

My son, Matt, has come on board and he’s working his way into stores. I also think (retail) business is up.

“Thisyearweareat51percent for conversion rates. That’s down one point from last year.

“Our leet-repo lane is fairly small. That’s probably about 5 percent of our business. Our (independent) consignment is about 40 percent. Our franchise dealer trades are about 55 percent. We also have a small contingent of non-

drivables. That’s about the same mix as last year.

“The only thing I’ve seen change this year is that we’ve just been knocking them dead on the high-dollar stuf – $30,000 and over.

“Three weeks ago, we had 25 late-model Mercedes trade-ins that were held because of Takata air bag recalls. The sellers inally released them. They signed a disclaimer to sell them to let the buyer know all they had to do was schedule an appointment to get the recall done. They averaged in price from $25,000 to $30,000 or $40,000. Of the 25, we sold 25.

“We get some really nice inventory from our new-car stores.

“Tax season lasted about a week this year. We spiked at tax time. We ran 493 cars and it was a 65 percent sale.

“I thought, ‘Boys here we go. We’ll have another month of nothing but this.’

The very next week, we were right back down to

350 and a 50 percent sale. I’ve heard every reason in the world why it happened. I’ve heard everything from Obamacare penalties to people getting student loan payments deducted from their returns. I don’t know.

“We’ve been right at 175 dealers in the lanes. We’ll consistently get between 165 and 175.

“Last year at this point, we had drawn 2,488 dealers and now we’ve drawn 2,680 (through April 20).

“We’ve had a surge of dealers sign up in the last few weeks.

“Trucks are absolutely ringing the bell and we get a lot of low-mile trucks. We sell for Chrysler stores.

“I also sell for the power sports companies – things like boats and four-wheelers. We usually run them as specials at the start of the sale. We get a great response.

“Average price in the lanes is $6,500.

“We’re on a roll. We’re up this year and we’re going to

stay that way.”

NEBRASKA

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

“We’re going to be celebrating our 25th year in business early in the fall.

“We’ve got four lanes and we’re running all four. Volumes have been a little better recently.

“We’re running anywhere from 275 to 325 a week.

“We’re selling at 74 percent. We’re in an auction twenty group with some of the best sales in the country.

“I’d put our sales percentage up against anybody’s.

“We work at getting sellers here who actually want to sell. We don’t want guys here who run 10 cars and sell one. I’d rather have a dealer who brings four or ive and sells three or four.

“Tax time is kind of hard to gauge anymore. This year it seemed like it was maybe two weeks in March.

“We get anywhere from 200 to 240 dealers in the lanes. It seems retail has

Compiled by Jeffrey Bellant

been good, because dealers have been in good moods all year.

“Dealer consignment is 90 percent of our volume, while leet-lease and GSA make up the other 10 percent.

“GSA units are just starting to roll in now. We’re getting the new ones and the trades.

“The irst GSA sale is probably going to be in the middle or the end of May. Then it will probably be every four weeks after that. We usually run between 80 and 120.

“We use Auction Edge online and Pipeline for simulcast. Our participation online gets better every week.

“Our average price overall in the lanes is around $3,600.

“We’re excited about 2017. We’re a few units ahead of last year. We had our best year across the board in 2015 and 2016 was close to that.

“We’re excited for the future.”

2012 MODELS2014 MODELS

2015 2013MODELS MODELS

What could possibly be worse than walking onto a used-car lot or trying to cross a new-car showroom without the corporeal and

We have many furniture outlets around us, some national chains and some local or regional set-ups. But whoever they are they make

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

mental assailments one usually associates with such an expedition? I’ll tell you – dealing with a furniture showroom.

We recently redecorated our rec room and decided it was time for a couple of new sofas and a cofee table – nothing too expensive or pretentious, you understand – something on which we could lop around and relax. The new layout predicated that the cofee table be round – more on that later.

car dealers look like choirboys. It’s small wonder that online suppliers are doing so well.

However, I still feel the need for the tactile satisfaction of being able to touch, feel and so on and make the decision in real time. I may be a little more reticent on the next venture, but there’s still a sense that ordering something remotely is not as compelling. Moreover, I can’t imagine the need to break into some lunatic

dance, as some advertisers seem to intimate is the standard reaction to having new furniture delivered.

Our irst foray was into a showroom that was laid out in a rotunda with an administration area in the middle.

We were greeted – no, assaulted – within ive feet of the entrance by an overly dressed Southern belle with pancake makeup smelling of stale rosewater. “Well, good mornin’, how’re y’all doin’ this beautiful day? Ma name’s Doris (not really, I’m just trying to protect the innocent!)WhatcanIhepy’all fahnd today?” The accent was shrill and nasal, a cross between Bristol, Tenn., and Belle Meade Boulevard in the poshest part of Nashville. It was put on and obviously so.

We informed her we were just looking and got the Southern Kiss of Death –“Well bless your hearts! Y’all mustbelookingforsumthin’, otherwise y’all wouldn’t be here!” She broke into a cackle that would have done

Shakespeare’s coven justice and she followed us around, hot breath down our necks, suggesting we needed everything from a new mattress to patio furniture. She couldn’t possibly see the need for a round cofee table, probably because she didn’t have one instock–“Y’alljustdon’tsee them these days!”

She was like dog poop on our shoes and we were glad to reach the fresh air back outside. It was something like Car Sales 101 circa 1972.

The next was from a similar school – an immediate (and intimidating) welcome, followed by some qualifying questions that bordered on efrontery – she then left us to “look around.”

But she hovered and skulked behind dining sets and day beds like a 1960s spy. She glided from soft furnishings to sofas without so much as turning her head

away from her quarry. Every now and then she would appearfromnowhere,afecting an innocent look of “Oh, it’s you again”, her camoulage being a clipboard as though she were looking for something. It was uncomfortably and excruciatingly obvious. Other staf kept watch as thoughtheyhadsomesortof communication device like the Secret Service, speaking into their sleeves: “They’re approaching end tables.” It was getting dark outside, so we beat a hasty retreat lest Medusa turned us to stone!

The next day was brighter. Fearing the worst, a lovely lady made us feel at home to wander at our leisure and to let her know if we had questions. She served cofee as we paid the bill. I write this propped up on my new reclining sofa, a libation within arm’s reach on the (round) cofee table.

AROUND THE BLOCK

AUCTION DONATES EMERGENCY VEHICLE

When Manheim Pennsylvania discovered its local chapter needed a Disaster Relief Vehicle for use throughout the central Pennsylvania region, the team was determined to provide it.

Through dealer donations, a raffle, a donation from Carlisle Productions and a pledge from Cox

Automotive, the team raised more than $30,000 to purchase a 2017 Ford Explorer 4x4, which was presented this year to Jennifer Wiggin, major gifts officer of the Central Pennsylvania Region at the Manheim Pennsylvania auction. The vehicle will live at the Lancaster office of the American

Red Cross and is ready to be deployed upon need.

“Our team has supported our Red Cross Chapter for some time, so we rallied around efforts to equip them with a disaster relief vehicle,” said Joey Hughes, vice president and general manager.

“The Red Cross goes where no one else can and we are honored to, in a small way, help them get there.”

Manheim team members across the organization also mobilized in support of parent company Cox Automotive’s national partnership with the American Red Cross when it was announced last year.

During the first year of partnership Cox Automotive team members have provided: 4,675 comfort kits & fire preparedness bags; 965 pints of donated blood; 1,087 volunteers; 2,050 cards written to veterans and 825 teddy bears, through 2,345 volunteer hours and $307,194 in donations.

Compiled by Jeffrey Bellant

Sale Promotions Draw Dealers

Greenville Auto Auction celebrated a big March with a number of events and promotions, said Billy Willis, auction general manager.

The auction held its pre-anniversary sale on March 16. The sale is always one of the largest sales of the year at Greenville, Willis said, and this year’s pre-anniversary sale included a number of giveaways, including tickets to The Masters and the NCAA’s Final Four.

Thre was a RAC/BB&T Vacation giveaway and a golf cart giveaway in March

Greenville recently held its AdrenaLANE sale on April 13, which included a big consignment of motorcycles, sports cars, RVs, quads and boats as Monster energy drinks were served in the lane.

“We look forward to building long term, mutually beneficial relationships with our dealers,” Willis said.

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

Your customer wrecks the car and disappears. The insurance company denies the claim because they can’t get cooperation from the customer. YOU LOSE!

The customer stops paying the insurance company but keeps driving the car. When you locate the car, you find it’s been badly damaged. You can’t get the customer to cooperate because you took the car. The insurance company denies the claim. YOU LOSE!

The customer files a claim and the insurance company pays the customer directly. The car doesn’t get fixed and the customer took the money. YOU LOSE!

You Can Have More Control

Have you ever had a customer wreck the car and then disappear?

The insurance company denies the claim because they can’t get cooperation from the customer.

Have you ever had a customer stop paying for their insurance but keep driving the car?

When you locate the car, you find it’s been badly damaged. The insurance company denies the claim.

Even worse, have you ever had a customer file a claim, receive money from the insurance company but doesn’t fix the car?

We’ve all had similar frustrating experiences with customers and insurance claims.

What if you could have more control over the physical damage insurance?

Northland Auto Enterprises recently introduced their new physical damage protection program called Coverage Plus.

Coverage Plus gives you the control you’ve been searching for!

Coverage Plus is a policy issued to the dealership for physical damage coverage. You can add yourleasedorbuy-here,pay-here

vehicles to your policy and know for sure that they’re covered for physical damage.

Your customer reimburses you for the cost of the coverage at the same time they make their vehicle payment.

You are in control and the customer has the benefit of fulfilling the requirements of the lease or purchase agreement.

Customers also benefit from lower premiums in many cases.

The premiums are based on the value of the car rather than on the customer’s credit or driving record so all customers qualify.

Thisisdefinitelyaprogramthat all dealers will benefit from and should check out!

Call Northland, 800-879-3433 for more information on the Coverage Plus program.

www.HelpingDealers.com

Deining Value in a VSC Provider

For so many dealers, it’s a frequent occurrence to have a service contract provider in your dealership looking to earn your business. Of course you ask about pricing, eligible vehicles and component coverage. But do those questions give you the full picture of the value a service contract provider can deliver?

At GWC Warranty, we strive to helpdealerssellmorecarsbygiving car shoppers the confidence to becomecarbuyers.Thismeansthat weprovideabest-in-classcustomer service experience alongside flexible products designed to meet our dealers’ diverse needs. Our products can be used on vehicles with starting mileage as high as 200,000 miles; our company is a Motor Trend® Recommended Best Buy For Independent Dealers; and our Certified Pre-Owned Program provides a valuable starting point for selling up into richer coverage levels.

But how else can a service contract provider help you sell more cars? Seeking additional benefits at no charge can go a long way toward improving your dealership as a whole – even

beyond strictly VSC performance. For instance, training is a major need at many dealerships, which is why GWC Elite Dealers get access to compliance and virtual training at no charge. GWC’s compliance training offers specific, dedicated F&I compliance training to help avoid costly fines and penalties while GWC Virtual Training offers abroadertrainingapproach,helpful for every employee in a dealership.

These two benefits join a suite of perks for Elite Dealers, including concierge claims service, special Certified pricing, lead generation tools and more. So the next time a VSC provider comes knocking, ask a few more questions after price, eligibility and coverage. You might justfindthatvaluecancomeinalot of shapes, sizes and benefits.

Deal Pack Does it All

Deal Pack is an all-inone dealer management software that includes CRM, sales, leasing, finance,collections,andservice/parts.

Deal Pack offers an integrated generalledgersystemthatiseasyto understand.Madespecificallyforbuyhere,pay-hereusedcardealershipsand financecompanies,DealPack’srealtimeaccountingproducesfinancial statements instantly.

Deal Pack’s integrated CRM eliminatesre-enteringcreditapps, automates follow-up, and syncs collectionsdataforAIequitymining.

Dataexportsareeasybecauseyour data is your data.

Deal Pack’s digital document managementwithe-Signatureallows documentstobesavedtoindividual deals and stored on the cloud for effectiveretrievalandsafekeeping.

Deal Pack’s web-based design providesliveback-upsandmaximum security,eliminatinghardwarecosts and compliance concerns.

United Auto Credit Puts You in the Fast Lane

Established in 1996, United Auto Credithasgrowntobecomeanational leader in non-prime automotive finance.Ourcorebusinessinvolves working with our franchised and independentdealerpartnerstoprovide reliableandaffordabletransportation to customers recovering from past creditproblems,ortoestablishcredit for first-time buyers.

Ournewesttool,“TheFastLane,”is anexclusivewebsitedesignedtoput the dealer behind the wheel of the financing process. Offering instant approvals,livefundingupdates,and

the ability to rehash a deal, it is an invaluabletoolthedealershipcannot afford to be without.

A common sense lending model, coupled with a strong technology base and an intense focus on our dealers, is what separates United Auto Credit from the competition. Contactustodayformoreinformation onbecomingadealerpartner.https:// www.unitedautocredit.net/dealers/ dealers.aspx

Sellers Wanted

Not everyone in the market for a newcarcanhaveperfectcredit.In fact,44%ofAmericanswon’tqualify forprimefinancing.Butthatdoesn’t meanthatnearlyhalfofAmericans areforgoingthepurchaseofanew vehicle, quite the contrary in fact.

Those car buyers are shopping around and as more traditionally primelendinginstitutionsventure inthesubprimespace–competition is only going to get steeper.

So whether you’re already doing subprime financing and are on the fence about going deeper or are considering doing business in the spaceforthefirsttime–nowisthe timetoestablishyourdealershipas anallytocustomerswithimperfect credit.

Beforeyoutaketheplunge,consider these tips on expanding into the subprimemarketwithconfidence.

1. Let customers know they have options.

Today’s car buyers are savvy, but it’sstilleasytofeelpigeonholedby yourcredithistory.Makeitknown that your dealership recognizes there’s more to a customer than their credit score and can extend deals that account for each customer’s unique circumstance.

2. Get to know your customer.

To treat your customers as more thantheircreditscoreyouneedtoget toknowthem!Themoreinformation youhave,themorecertainyoucan bethatthedealyou’reextendingisa winforbothparties.Thedownside tothisapproachisthatitcanbemore timeconsuming.Theupsideis,there istechnologyouttherethatmakes eventhismorehumanapproachto establishingloanqualificationsquick and easy. Features like automated referencechecksforexample,check referenceswithoutyouoryourstaff ever having to pick up the phone.

3. Be proactive about risk. Even with proper vetting there is no getting around the fact that there’sadditionalriskinvolvedwith subprime deals. To minimize your exposure,youmustbeontheoffensive andoneofthebestoffensiveplayson themarkettodayisaGPSsolution. WithGPS,yourprotectionstartsthe minute you install the device and give dealers visability into default predictors,realtimevehiclelocation and the ability to make more cost effectiverecoverieswhennecessary. Whywaituntilyourassetisatrisk to start protecting it?

4. Be transparent with your customers.

Compliance is a hot button issue in the auto finance industry. The last thing your business needs is a CFPB investigation. Disclosures areimportant.Infact,theyarethe keytomakinganysubprimedeala win-winforboththedealerandthe customer.Thetwokeycomponentsto complianceare1)makingsureyour customersareawareofyourpolicies andproceduresand2)ensuringany business partners, from recovery agents to technology providers, operate with compliant business practices surrounding consumer privacyanddatasecurityregulations.

5. Stay in touch.

The relationship you start with each customer doesn’t end when they drive off the lot. It’s only just beginning.Forthedurationoftheir loanyoushouldstayintouch!Using an automated payment reminder is a fast and simple way to do just that.Paymentremindershavebeen reported to reduce delinquencies byasmuchas20%.Thistranslates into more cash in your pocket as well as credit score improvement for your customers. Win-Win.

6. Have a back-up plan. Expandingintothesubprimespace isn’tgoingtobeaneffectivegrowth strategy if your losses skyrocket. Dealersneedtobepreparedforthe worstcasescenarioandequipthemselveswiththetoolsandresources requiredtoquicklyandeffectively locateandrecovertheirassetswhen a customer defaults on the loan.

Auto ownership may not be for everyone,butitcertainlyisformore thanjustthosewithperfectcredit. Don’tletfearanduncertaintyprevent your business from growing.

Explorethetoolsandtechnology available to support your business goalsstartingwithGoldStarGPS–themostaccessibleandscalableGPS solutiononthemarketempowering dealerstocontroltheirbottomline andincreaseprofitswithconfidence. Plus, unlike other GPS providers, only GoldStar provides a platform thatsupports3.75M+activedevices, with1Bdataeventsperquarterand over15yearsofaward-winningoperational excellence.

Track Your Assets No Matter What

Just as Superman is vulnerable to kryptonite, conventional GPS devices installed in your vehicles alsohaveaweakness:lossof power. You need to be able to count on your GPS devices at all times, especially with your high-risk customers.

A GPS device can lose power when the car battery fails or the customer tampers with the device.

But now, thanks to its new top-of-the-line 3.5G COLLECT GPS device, IMETRIK has added several new features to ensure the device not only stays powered longer, but also provides you with reliable data to help you track your assets with conidence.

“Our 3.5G COLLECT device packs in all our latest innovations and improvements. It isn’t your usual battery-backed device; it featurespremiumindustrial gradecomponentstoensure maximumreliabilityineven the harshest environmental conditions. We are very proud to release it to the market. This is great news

forourcustomers,”saysBertrand Achard, IMETRIK’s Chief Hardware Engineer.

The irst of these new “safety net” features is a non-lithium back-up battery – a powerful tool for keeping the 3.5G COLLECT GPS up and running. When the output from the car battery falls below a speciic threshold, or when the power is cut, the back-up battery kicks in automatically. It allows the GPS device to send an alert and to continue to operate for another 3 to 6 hours, so you can react appropriately.

Conventional lithium-ion batteries are often used as back-up power sources, but their speciications do not allow for full use at high or low temperatures. This means that they are not well suited for automobiles which are often parked or driven in both very hot and extremely cold temperatures. Instead, IMETRIK hassmartlyoptedfora3-cell supercapacitor back-up battery,whichhasanoperating temperature range from -4 degrees F to +185 degrees F,

providing you extra peace of mind by ensuring proper functioning of the back-up battery even in the harshest weather.

The second set of features offered with IMETRIK’s 3.5G COLLECT device is a trio of “power notiications”:

• The Power Low Alert notiies you when the car battery is almost drained and the vehicle may not be able to start, but the device can still be powered from it due to its exceptionally low power consumption. This alert is particularly useful in helping you manage your inventory of vehicles.

• The Power Lost Alert notiies you when the car batterycannolongerpower the GPS device for whatever reason, and the device is now running on internal back-up power,

• The Power Disconnect Alert tells you if the device is unplugged from the vehicle’s power supply, or if the device itself has been removed.

A third feature that helps used car dealers keep better

track of their assets is a 13hourdailylocatefunctionality. Instead of locating vehicles at the same time of day every day, the IMETRIK 3.5G COLLECT automaticallylocatesthecarevery13 hours, providing you with a more accurate picture of your customer’s driving habits. In the event of a repo, you will quickly learn all the locations where you arelikelytoindthevehicle.

Next, a Secure Disable feature allows the dealer to remotely disable the vehicle with greater peace of mind. This new safety-focused feature only processes the disable command when two speciic criteria are met: the device has suficient wireless network coverage, and thevehiclehasbeenstationary for at least ive minutes. This virtually eliminates any risk of getting your cus-

tomer stranded by ensuring that you will be able to reenable the vehicle’s starter without dificulty.

Finally, the 3.5G COLLECT also has all the bells and whistles found in other latest generation IMETRIK products such as an industry-leading highperformance GPS receiver and internal antennas, allowing for even more precise vehicle geolocation and makingitaverygoodchoice to safeguard your assets in the currently challenging auto inancing landscape.

IMETRIK’s new 3.5G COLLECT device is compact, about the size of a business card, making it easy to install out-of-sight. To know more, call IMETRIK’s Customer Support at 1-866-276-5382, extension 5.