Finance Remains Available Despite Tightening
Evidence of a real tightening in auto inance arrived in the latest quarterly earnings reports from several creditors.
Santander Consumer USA Holdings Inc. announced that total auto originations in the irst quarter were $5.4 billion, down 21 percent from the prior quarter.
Core retail auto originations were $2.2 billion, down 16 percent from the prior quarter. Total Chrysler Capital originations were $3.2 billion, down 23 percent.
Consumer Portfolio Services reported that it purchased $229.6 million of new contracts in the irst quarter. This compares with $215.3
million purchased during the fourth quarter of 2016 and $312.3 million during the irst quarter of 2016.
The tightening is being driven by increasing delinquencies and higher losses due to lower wholesale prices.
For example, CPS saw annualized net charge-ofs rise to 7.91 percent of the average owned portfolio in the irst quarter, as compared to 7.57 percent for the irst quarter of 2016. Delinquencies greater than 30 days (including repossession inventory) were 9.74 percent of the total owned portfolio as of March 31, as compared to 8.97 percent as of March 31, 2016.
Not everyone is tightening.
General Motors Financial Company Inc. reported that retail loan originations were $6.5 billion for the quarter, compared to $4.7 billion for the quarter ended Dec. 31, 2016, and $4.1 billion for the quarter ended March 31, 2016.
Ally Inc. also said during its earning call that it seeks growth, especially in used-car inance.
Ally Chief Financial Oicer Chris Halmy said “a 3-year-old vehicle hitting the dealer’s lot is a great inancing opportunity.”
And there still seems to be an appetite for automotive asset-backed securities, despite reports of grow-
ing losses.
CPS recently closed its second term securitization.
The transaction is CPS’s 24th senior subordinate securitization since the beginning of 2011 and the seventh consecutive securitization to receive a triple “A” rating on the senior class of notes from at least two rating agencies.
Ally’s U.S. auto term securitizations totaled approximately $3 billion for the quarter, including Ally’s irst loor plan securitization since 2015.
Additionally, during the quarter, Ally renewed approximately $1.25 billion in credit facilities.
MORE MONEY: Ally Inc. grew used-car financing to 48 percent of total originations in the first quarter. That is up from 45 percent of total originations in the first quarter of 2016, which was a record at the time.
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Three Dead as SUV Crashes into Crowd at Auction
Three people have died, six remain hospitalized and three individuals were transported to area hospitals, treated and released, as a result of a collision that occurred May 3 at Lynnway Auto Auction in Billerica, Mass.
At approximately 10:15 a.m., a 2006 Jeep SUV driven by an employee of Lynnway Auto Auction, a man in his 70s, accelerated unexpectedly and crashed into a crowdofpeopleandthrough a cinder block outer wall.
The incident occurred during a weekly sale.
Lynnway Auto Auction
President Jim Lamb said in a statement that the worker had a valid license when he was hired in 2010, but it was suspended at the time of the accident.
Lamb said he was unaware of the suspension until notiied by the police after the accident.
“As he has had no issues while driving for Lynnway for the past seven years, we were surprised and upset to learn of this development,”
Lamb said in the statement.
“We hold our drivers to a high standard.”
Lamb said he expects his workers to inform the company if they lose the ability to drive in Massachusetts.
Brenda Lopez, 48, of Rhode Island, and Pantaleon Santos, 49, of Rhode Island, were pronounced dead at the scene.
Leezandra Aponte, 36, of Lowell, was transported to Lahey Hospital where she was later pronounced dead.
Lopez worked as a secre-
tary at car dealerships after immigrating to the United States in 1990.
One of the surviving victims was believed to have injuries that are considered life threatening. He remained hospitalized at press time.
The accident has been classiied as a mass casualty incident, which necessitates the rapid response of emergency resources to tend to a large amount of victims with varying degrees of need, ranging from walking wounded to life-threatening injuries.
The Burlington, Bedford, Tewksbury, and Wilmington Fire Departments sent units to the scene, and the Chelmsford and Burlington Fire Departments provided station coverage for the vacant Billerica ire houses during the incident.
Trinity EMS Inc. sent ambulances to the scene during the incident, which allowed for patients to be rapidly transported to hospitals.
Lahey Hospital and Medical Center was alerted with-
in minutes and was able to prepare its emergency department to receive patients.
On the law enforcement side, the Northeastern Massachusetts Law Enforcement Council activated municipal police departments from across Middlesex and Essex County, sending its Rapid Response Team and its mobile command post to the scene, providing muchneeded manpower and logistical resources.
The Massachusetts State Police also responded with a number of units.
“During a mass casualty incident, seconds count for patients. Manpower at the scene is critical, but it is just as important that these resources be deployed in an orderly and organized fashion, consistent with best practices of incident command,” said Billerica Fire Chief Conway.
“Today’s incident was a tragedy, but I am grateful forthetremendousresponse of police, ire, and EMS resources today that likely prevented further loss of
life today.”
Melissa Otis, executive director of the Massachusetts Independent Automobile DealersAssociation,saidshe has heard from several dealers who attended the sale.
“Today is a very sad day for our dealer community,” Otis said. “I was not there, but have spoken to many who were that all say it was a horriic scene.”
All evidence and information at this time suggests an accidental cause. The investigation by Billerica and State Police is ongoing.
A message on the Lynnway website reads: “We are shaken and deeply saddened by the unfortunate accident at Lynnway. Our thoughts and prayersgoouttotheindividuals and families afected by this event.”
Theauctionhadbeenined for serious safety violations in 2014 by the federal Occupational Safety and Health Administration. At the time, OSHA said Lynnway failed to create a safe workplace for its employees among the moving motor vehicles.
Brenda Lopez
NEWS BRIEFS
Repair Costs Rise in Most Regions
A faulty oxygen sensor, which negatively impacts fuel economy if ignored, remains the most common reason drivers experience a check engine light.
That is one of the indings of the 2017 CarMD Vehicle Health Index of check engine-related car repairs, costs and trends.
The report also found that model year 2005 vehicles were most likely tohaveacheckenginelighton,while newermodel2015and2016carsand truckseachaccountedforlessthan1 percent of reported check engine incidents. The index is based on data analyzed by CarMD from more than 5.3millionin-use1996-2016vehicles in the U.S. during 2016.
CarMDfoundthattheaveragecost to repair a check engine problem in the U.S. in 2016 was $398 including parts and labor, which is up 2.7 percent year-over-year. The ive most common problems found to trigger the check engine light in 2016 were afaultyoxygensensor,catalyticconverter, ignition coil and spark plug issue, loose or damaged fuel cap and faulty mass air low sensor.
They range in cost from $17 to replace a gas cap to $1,190 or more for a catalytic converter.
This year’s index found the only
region to experience a decrease in repair costs was the West, where vehicle owners had a slight reprieve with a 1.1 percent drop in car repair costs. Drivers in the Northeast paid the most for check engine repairs ($401) while drivers in the Midwest paid the least on average ($385) for parts and labor.
The 2017 CarMD Vehicle Health Index analyzed 5,345,588 repairs reported to and validated by CarMD’s network from Jan. 1, 2016 to Dec. 31, 2016.
RMS, Manheim Offer More Vehicles
RMS Automotive and Manheim areoferinganewco-listingcapability that allows all open sale vehicles listedonmanufacturers’digitalsales platforms powered by RMS Automotive to be simultaneously ofered on Manheim.com and OVE.
BMW Group Financial Services NA LLC is the irst commercial consignor to co-list its national inventory of of-lease vehicles under the new ofering. With the solution, inventory found on BMWGroupDirect.com is now included in dealers’ Manheim.com and OVE search results. By clicking on one of these listings, Manheim and RMS Automotive use single sign-on authenti-
cationtoseamlesslydirectdealersto the consignor’s private label website where they can evaluate, bid on and purchase the vehicle.
Credit Acceptance Reports Higher Income Warehouse Facility
Credit Acceptance Corp. announced consolidated net income of $93.3 million for the irst quarter. This is compared to consolidated net income of $74.4 million for the same period in 2016.
The company also announced it increased the amount of one of its revolving secured warehouse facilities to $100 million from $75 million and extended the maturity of the facility to April 30, 2020 from April 30, 2018. The interest rate on borrowings under the facility has been increased from LIBOR plus 200 basis points to LIBOR plus 225 basis points.
NIADA Partners with Key Firm
Security Key Systems Inc. (SKS) has joined with the National Independent Automobile Dealers Association as a new National Member Beneit partner.
The move gives association members availability to a key tracking suite with a wide range of conigu-
ration options and features to help them avoid losing sales due to being unable to ind keys quickly.
SKS’s KeyWatcher Touch system uses technology such as touch screen key selection and ingerprint logins to track keys, monitor users and run usage reports to eliminate wasted time locating keys and make sure customers can take test drives.
ClearVin Uses J.D. Power Values
ClearVin,andJ.D.PowerValuation Services (formerly known as NADA Used Car Guide), have recently agreed on a deal that will make the selling and buying of used vehicles much easier for automotive dealers and wholesalers.
NADA Values included in the history report cover retail, trade-in, auction and loan values.
ClearVin reports provide vehicle speciications along with accident history, salvage and total loss events submitted by insurance companies.
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Contributing Writers: Ed Fitzgerald, Jenny King, Sheila McGrath
Advertising: Shannon Colby, Account Manager Marie Hingst, Account Manager
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by telephone for a fax of vehicles in the sale. Used Car News assumes no guarantees or liabilities concerning the accuracy of any advertisements. All Rights Reserved.
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Wholesale Prices Rise
Recent measures of the wholesale market show a resiliency stronger than many expected.
Part of this is due to strong retail demandofsettinggrowingof-lease volumes.
Manheim reports that wholesale used vehicle prices improved by its measure 0.5 percent month-overmonth in April.
This brought the Manheim Used Vehicle Value reading to 124.7, which represented a 1.6 percent increase from a year ago. The Index adjusts prices for mix, mileage and seasonality.
On a year-over-year basis in April, the mid-sized car category saw the largest decline, while only pickups saw gains greater than the overall market.
“Although the Manheim Used Vehicle Value Index increased for the irsttimethisyearonamonth-overmonth basis, used vehicle values have not collapsed the way many analysts have warned of for more than a year due to expected increases in wholesale supplies,” Webb said. “ And in fact, what weakness we have seen is probably more a result of excessive new vehicle inventory, not used.”
The latest Used Vehicle Retention Index from Black Book increased to
Source: Manheim Consulting
113.1 for April, a slight uptick from March’s value of 113.
“April saw stronger seasonality trends than what we had been seeing during the last few spring seasons,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics. “There certainly remains a growing concern overrisingsupplylevels,whichtypically leads to higher depreciation, but with prices on some segments seeing better value, consumers may bemorewillingtoconsiderusedvehicles in some key car segments.”
The strong performance can be explained by continued retail demand. Recent quarterly reports show just how much the room to run there remains in the market.
For example, Sonic Automotive Inc. set a new record for itself in pre-owned sales.
Sonic stores sold 30,372 preowned units in the irst quarter. This contributed gross proit of $40.8 million.
In addition, Kia Motors America’s certiied pre-owned vehicle sales reached an all-time high in the irst quarter.
Kia dealers sold 19,453 CPO units in the irst three months of the year.
This was a 17.3 percent increase in CPO sales year-over-year.
Carite Cuts Ties with Store
Buy-here, pay-here chain Carite announced its decision to sever its contractual relationship with the former business owners of Carite of Kalamazoo, Mich.
This dealership was independently owned and operated under a license granted by Carite to operate under its brand. The decision to terminate the relationship was made earlier in April following several defaults and delinquencies by these business owners.
The store is currently closed and there is a pending lawsuit brought by Carite against the former owners.
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Carite is aware that there are Carite of Kalamazoo customers who have been impacted by the former business partners’ actions, mostly related to their failure to properly process title and registration paperwork. While Carite pursues all available legal remedies against these former business owners, Carite will work with any customers who are experiencing diiculties in obtaining their registration and/or plates under the previous ownership.
Carite plans to re-open the Kalamazoo location as a corporateowned dealership in the future.
Employees Commit Fraud
The El Paso, Texas, police department’s financial crimes unit has arrested and charged seven individuals in an elaborate fraud scheme conducted by associates and former employees of Fox Toyota.
In May 2016, El Paso police were notified about two missing vehicles from Fox Toyota.
Financial crimes investigators began an investigation, which ultimately revealed that Fox Toyota associates and former employees were working together in several criminal incidents.
Employees were working together in a tire theft scheme, using Fox ve-
hicles illegally, overbilling vendors, insurance schemes, and hiding information of their illegal enterprise from Fox Toyota management.
As a result of the investigation, Mark Alvarez, Cesar Valdiviez and Albert Vargas were charged with engaging in organized criminal activity theft.
Miguel Silva and Carlos Velasquez were charged with unauthorized use of motor vehicles.
Luis Silva was charged with misapplication of fiduciary property. Federico Gutierrez was charged with theft by forgery.
The investigation is continuing.
Killer’s SUV Goes up for Sale
BOSTON (AP) – Prosecutors say the SUV that ex-NFL star Aaron Hernandez was in when he killed two men in 2012 is up for auction.
The Boston Globe reports more than 60 people had placed bids on the Toyota 4-Runner on eBay as of May 2.
The SUV’s owner is a Rhode Island car dealer, who leased it to Hernandez as part of a promotional agreement.
Hernandez was accused of shoot-
ing the two men after an encounter at a Boston nightclub. Prosecutors alleged Hernandez was in the SUV’s passenger seat when he shot at the men’s car, killing Daniel de Abreu and Safiro Furtado.
The former New England Patriots tight end was acquitted April 14. He already was in prison for the killing of a man who was dating his fiancee’s sister.
He killed himself in his cell days after the acquittal.
Yoursourceforquality, selectionandvalue: Chase.
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ADESA Houston June 21 281-580-1800
Columbus Fair AA June 14 614-497-2000
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Manheim Fredericksburg June 15 540-368-3400
Manheim Milwaukee June 14 262-835-4436
Manheim Nashville June 14 877-386-5004
Manheim New Jersey June 14, 28 609-298-3400
Manheim Orlando June 6 800-337-8491
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and lease accounts are owned by Chase. *The Jaguar word mark, the Jaguar logo, and Jaguar Financial Group are trademarks of Jaguar Land Rover Limited and any use by Chase is under license. The Land Rover word mark, the Land Rover and Oval logo, and Land Rover Financial Group are trademarks of Jaguar Land Rover
CONFERENCE MEETS CHALLENGES
This year’s National Alliance of Buy-Here, Pay-Here Dealers attendees will hear about all kinds of ways the industry faces changes. The event itself is about to undergo its biggest change in almost 20 years.
NABD founder Ken Shilson has announced his intention to sell the rights to the event he has been running for 19 years.
Shilson turned 68 in January. He said it was time to step back from the pressures of putting on the conference.
“I can’t do it forever,” he said. “The day-to-day management is getting to be more than a 68-year-old can handle.”
Shilson plans on turning the NABD over to an experienced event management firm. His main condition is that NABD be maintained as a unique event.
Shilson said he would seek inputfromattendeesonhow the NABD should move forward under new management.
One hot topic this year will
BUY HERE, PAY HERE INDUSTRY BENCHMARKS / TRENDS 2016
Prepared for NABD by SGC Certiied Public Accountants
Cost of Goods Sold and Operating Expense Detail: 2014- 2016
be tax season or, rather, the lack of a tax season.
Bill Neylan, president of TRS Tax Services, said they warned dealers last year that changes to federal law would squeeze tax season into two weeks.
Instead, it wound up being two days – Feb. 21 and 22.
Neylan said one of the stores he works with printed $1 million worth of refund checks in one day.
“It’s impossible to capture two months of sales in two days,” Neylan said.
He said one of his local dealers had 100 cars on his lot in January. By April, the store was closed.
Dealers need to prepare for this new normal, Neylan said.
They were adjusting to a new regulatory landscape, although unhappily, before Donald Trump won the presidency in November.
Now they need to figure out what it means to have an administration that’s as hostile to regulations as the previous one was friendly.
Attorneys Tom Hudson and Erik Johnson of Hudson Cook, Terry O’Loughlin of Reynolds & Reynolds and Shaun Peterson of the NationalIndependentAutomobile Dealers Association will help them do that during the
legal sessions at this year’s conference.
Hudson said the main question that will play out over the next few months is if the Consumer Financial Protection Bureau is going to be mortally wounded. So far, that’s not the case.
“Even though the heat’s on from Congress, they’re still doing things,” Hudson said. And state attorneys-general are stepping in to fill any gap, as demonstrated by the recent joint suit brought in Massachusetts and Delaware against Santander. Along with recalls, overtime pay rules and other issues, there will be plenty to learn about at this year’s event.
BUY HERE, PAY HERE INDUSTRY BENCHMARKS / TRENDS 2016
Prepared for NABD by NCM and NIADA 20 Groups 20 Group Dealer Operating Information: 2014 - 2016 BenchmarksBenchmarksBenchmarksBenchmarks
InventoryManagement
VehicleDaySupply(Units)
CFPB Fines Firm Again
The Consumer Financial Protection Bureau has taken action against ainancecompanyforillegallypressuring members of the military, and other customers, to repay auto loans.
The bureau says Security National Automotive Acceptance Co. (SNAAC) has violated a consent order.
“This company violated a Bureau order when it failed to get money back to servicemembers it had hounded with illegal debt collection tactics,” said CFPB Director Richard Cordray. “We are making sure this company inally rights its wrongs.”
In2015,theCFPBorderedSNAAC to pay both redress and a civil penalty for illegal debt collection tactics. SNAAC violated the 2015 order by failing to provide more than $1 million in refunds and credits, affecting more than 1,000 consumers.
The new consent order requires SNAAC to make good on the redress it owes to those consumers and pay an additional $1.25 million penalty.
SNAAC, based in Mason, Ohio, is an auto-inance company that operates in more than two dozen states and specializes in loans to servicemembers, primarily to buy used vehicles.
In June 2015, the CFPB sued SNAAC for aggressive collection tactics against consumers who fell behind on their loans. If servicemembers lagged behind on payments, SNAAC’s collectors would threaten to contact – and in many cases did contact – their chain of command about their debts. Also, the company exaggerated the consequences of not paying.
For instance, they told some consumers that failure to pay could result in action under the Uniform Code of Military Justice, demotion, discharge, or loss of security clearance. But these consequences were extremely unlikely.
The CFPB alleged that SNAAC’s aggressive tactics, which took advantage of servicemembers’ special
obligations to remain current on debts, victimized thousands of borrowers.
In October 2015, a CFPB consent order found that SNAAC had indeed engaged in unfair, deceptive, and abusive acts and practices whilecollectingontheseautoloans.
The order required SNAAC to pay $2.275 million in consumer redress through credits and refunds, and a $1 million civil penalty.
Consumers with an account balance were to receive credits to their accounts, and consumers with a zero balance were to receive cash refunds.
While SNAAC submitted two plans that claimed to provide the full amount of redress ordered, both were designed to underpay such redress.
Actingonatipfromaservicemember’s father, the CFPB discovered that SNAAC had issued worthless “credits” to hundreds of consumers and failed to provide proper redress to many more.
The CFPB is issuing this new consent order against SNAAC for violating the terms of the 2015 consent order by failing to properly give refunds or credits to afected borrowers. In the new order, the CFPB found that the company had failed to meet its obligation to pay redress to consumers.
SNAAC must pay the Bureau roughly $720,000, which the Bureau will send as refunds to about 925 consumers.
SNAACmustissueabout$370,000 in new credits to over 1,000 consumers with remaining account balances as well as properly credit roughly 1,000 consumers making payments under settlement agreements.
SNAAC must also pay $75,000 to the Bureau to cover the costs of distributing these payments.
SNAAC must pay a penalty of $1.25 million to the CFPB Civil Penalty Fund, in addition to the $1 million penalty it paid under the 2015 consent order.
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Cars.com Set for Spin Off
Online auto classiied provider Cars.com will be spun of from parent Tegna Inc.
All outstanding shares of Cars. com will be distributed to Tegna stockholders of record at the close of business on May 18. Stockholders will retain their Tegna shares and receive one share of Cars.com for every three shares of stock they own on that date.
Cars.com shares are expected to begin regular trading on June 1.
The spin-of remains subject to the conditions described in the preliminary information statement iled by Cars.com on Form 10 with the U.S. Securities and Exchange Commission.
have greater lexibility to capture the opportunities ahead of us by leveraging our strong brand, innovative platform and expanding, loyal audience. We are a pure-play digital company in an excellent position to drive long-term growth and proitability, and we are a unique investment opportunity in the digital automotive space.”
Scott Forbes will serve as chairman of the Cars.com board of directors following the separation.
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“This spin-of is the culmination of a multi-year transformation of our company, and the board is conident that both companies are well positionedtoexecutetheirstrategic plans for growth and create shareholder value,” said Tegna CEO Gracia Martore.
Alex Vetter will serve as president and CEO of Cars.com upon completion of the separation.
The Cars.com Board of Directors will also include Vetter and current Tegna director Jill Greenthal. Greenthal will resign from the Tegna board concurrently with the completion of the spin-of.
In addition, upon completion of the separation, Thomas Hale, Donald McGovern and Greg Revelle are expected to serve on the Cars.com board of directors.
Upon completion of the separation, Cars.com will trade on the New York Stock Exchange under the symbol CARS.
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“We are approaching a watershed momentforCars.comandIcouldn’t be more excited about our future,” Vetter said.
“As an independent company, we
Prior to the separation, Cars.com will make a one-time cash distributionof$650milliontoTegna.Tegna intends to use the $650 million tax free distribution from Cars.com and cash low from operations to reduce leverage.
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Recall Cases Head to Court
Recalls are at the center of a pair of recent court cases.
The U.S. Supreme Court has turned away an appeal from General Motors Co. seeking to block dozens of lawsuits over faulty ignition switches that could expose the company to billions of dollars in additional claims.
The justices without comment left in place a lower court ruling that said the automaker’s 2009 bankruptcy did not shield it from liability in the cases.
A federal appeals court ruled last year that GM remains responsible for ignition-switch injuries and deaths that occurred pre-bankruptcy because the company knew about the problem for more than a decade but kept it secret from the bankruptcy court.
The company had argued that well-established bankruptcy law allowed the newly reorganized GM to obtain the old company’s assets “free and clear’’ of liabilities.
GM recalled 2.6 million small cars worldwide in 2014 to replace defective switches that played a role in at least 124 deaths and 275 injuries, according to a victims’ fund set up by GM and administered by attorney Kenneth Feinberg.
$875 million to settle death and injury claims related to the switches. That includes $600 million from Feinberg’s fund and $275 million to settle 1,385 separate claims.
It also has paid $300 million to settle shareholder lawsuits. But many others are pursuing their claims in court.
After it emerged from the government-funded bankruptcy, the company referred to as New GM was indemnified against most claims made against the pre-bankruptcy company, known as Old GM.
A bankruptcy court sided with the company in 2015, ruling that most claims against Old GM could not be pursued.
But the appeals court in Manhattan overturned most of that decision and said hundreds of pre-bankruptcy claims could go forward.
Intheothercase,aMalaysianman whose wife’s death is one of at least 16 blamed on air bag defects has sued Japanese automaker Honda and the Takata Corp. in a U.S. court, saying he wants the companies to disclose more about the dangers.
Nida Fatin Mat Asis, a 29-year-old doctor, died almost instantly after the Honda City she was driving hita pole and skidded into a ditch in Ma-
The automaker has paid nearly
Continued on page 16
Recalls – Continued from page 14
laysia’s eastern Sabah state on April 16 last year.
An autopsy found shrapnel from a Takata air bag inlator in the base of her skull.
The lawsuit was iled by her husband in a U.S. District court in Michigan on May 1.
Her father, Mat Asis Mahnoon, said the family decided to sue after Takata pleaded guilty to fraud in February and agreed to pay $1 billion in penalties for concealing the defect blamed for 11 deaths in the U.S. and ive in Malaysia.
that the family refused a settlement ofer from Honda and Takata that was conditioned on them not speaking publicly.
The woman’s husband says her family wants to ensure the companies do more.
“I refuse to let my wife die in vain.” Abdullah Shamshir Abdul Mokti
More than 180 injuries have occurred worldwide and more than 100 million inlators have been recalled.
Plaintifs alleged in dozens of lawsuits that Honda, Toyota, Nissan, Ford and BMW had independent knowledge that Takata’s air bags were unsafe before putting them in millions of vehicles.
The auto companies have asserted that they were deceived by Takata and shouldn’t be held liable.
Mat Asis told the Associated Press
“I refuse to let my wife die in vain. By telling her story, we hope Takata and Honda will do more, particularly in Malaysia, to notify everyone with impacted cars that they are potentially deadly,’’ Abdullah Shamshir Abdul Mokti said in a statement released by U.S. law irm Motley Rice LLC.
The couple did not know their car had a dangerously defective air bag and were never notiied by Honda of a potential recall.
The law irm’s statement said a conidential settlement had been reached with the two companies over another Honda City crash in Malaysia.
That crash killed Law Suk Leh and her unborn baby.
– The Associated Press
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RETAIL MARKETS
OHIO
ChrisHaus,owner,Haus Auto Group, Canfield, Ohio:
“Between my dad and grandpa, we’ve been in business over 50 years. I’m 38 and I started in the business when I was 12 or 13.
“We have one location and we usually carry 100 to 125 vehicles.
“We actually increased our inventory by about 25 percent this year. We have a really good turn, so we wanted to see if we could keep our turn and increase sales. It’s been working so far.
“We retail about 65 to 70 per month and we wholesale about 35 to 40.
“In all honesty, it has to do with what you stock. If you look at the market reports, the market is looded with ’14s. If you put yourself in a position to have cars that everyone else has, it just makes the turn a little bit harder.
“So we’ll stock a lot of low-mileage Corvettes and
maybe SUVs with something diferent about them.
“We’re getting stuf that doesn’t have much depreciation. We’ve also picked up a little more from the import market. So we’ve got some German stuf – Mercedes, BMW, etc. – and it seems to sell.
“We source our inventory from everywhere. We’re looking at auction lists constantly. We’re looking at Craigslist. We advertise to the public on Facebook that we purchase vehicles.
“We do subprime, but we have a lot of banks for that. It’s about 25 percent of our sales.
“Average price is probably around $20,000.
“For model years, we have everything. But 2013s, 2014s and 2015s are our sweet spot.
“Average mileage is about 50,000. We buy some high mileage stuf and some lowmileage. It just depends on thecarthecustomerislooking for.
“We’ve been a little heavy
on SUVs this year. We sell about half cars and half SUVs.
“We carry pickups, but it’s not a market we had dove into. Pick-up trucks are a good market. There’s not a lotofdepreciation.Butonce again, it’s all about buying the right one.
“We do just as many imports as domestics.
“Reconditioning costs are about $750 to $800. I have a full service department. I have nine bays, eight racks, ivemechanicsandaservice manager.
“We do a little bit of everything in marketing/ advertising. We do Facebook, Autotrader, Cars.com, CarGurus and a little bit of Craigslist.
“Honestly, we put a lot into reviews. From a marketing standpoint, it’s the cheapest advertising.
“We ask every customer to give us a review. We have 300 reviews on Cars.com, 165 reviews on Google, for example. Our goal is to get over 400 reviews on Google
by the end of the year.
“We recently sold a 2013 Cadillac Escalade. It had 65,000 miles. We sold that for $34,985.
“I think the next couple of years are gong to be pretty good for the independent dealer.”
PENNSYLVANIA
Michael Mansour, owner/president, Car Connection Superstore, New Castle,Pa.:
“I’ve been in business 27 years. I have just one location.
“I keep 200 vehicles in inventory. I also have another 100 wholesale that we rotate.
“On the retail side, I sell about 60 a month. We’ve improvedfromthistimelast year. I let some employees go and got some new ones.
“I get some vehicles from auction, some are of the street and some are dealer swaps.
“I do some subprime. I’d say about 15 to 20 percent. We do no buy-here, payhere.
Compiled by Jeffrey Bellant
“Averagepriceonthelotis between$14,000to$16,000. Average mileage may be 50,000.
“Our average model year is about 2013.
“Our model years are newer this year. That’s (intentional). We’re looking at a better quality clientele.
“We carry 30 percent trucks, 40 percent cars and 30 percent SUVs.
“We carry about 70 percent domestics.
“Average reconditioning costs are about $600. We do everything in-house.
“We also do outside service. We don’t do a lot of it, since we have a tough time keeping up as it is.
“We mostly do digital marketing. We use some third-party sites and I’m just getting involved in payper-click.
“A recent vehicle I sold was a 2015 Nissan Pathinder. We sold it for $29,500.
“Lastyearwasagoodyear, but not fantastic.
“But I feel pretty strong about 2017.”
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!
WHOLESALE MARKETS
MONTANA
Terry Sheetz, general manager,AutoAuctionof Montana,Billings,Mont.:
“We have four lanes and we’ve been running between 600 and 700 on average each week. It’s the same as last year.
“Honestly, we’re running a lot of the Canadian rigs. We’ve dedicated one lane just to those (units).
“We hold them for 30 days. We have one dealer who will run anywhere from 100 to 120 every week and now he wants to double that. It’s pretty crazy and has been for a while.
“Over the last 60 days, we’re selling about 55 percent. It’s unheard of comparedtowhatweusedtodo.
During one recent sale we had 63 percent. It’s a good problem to be that busy.
“Our Internet attendance is really picking up. We’re getting anywhere from 100 to 150 every week. We’re selling over 100 on the Internet. It’s crazy.
“We used to have people
who came out here all the time and now they do nothing but go on the Internet. It’s really changing for us and it’s working good. All four lanes are on the Internet and we use OVE and Pipeline.
“In the physical lanes, we’ll get a couple of hundred to 250.
That’s typical. But we’re getting people from places we didn’t before, like Idaho. We also have a guy who comes up from Tennessee.
“Volumes include about 30 percent leet-leaserepos. We run Hertz and they’re running more. Enterprise has always been with us.
“WehaveaGSAsale. That goes once a month. That’s the irst thing on the morning of our regular sale.
“Our average price in the lanes is about $17,000. That’s the trucks. Some of those trucks are up to $50,000 to $60,000.
“When oil was running good, we got a lot of business out of that. When that
shut down, the Canadians kind of took over that.”
NEVADA
Russ Norrish, general manager, Dealers Auto Auction of Las Vegas, NorthLasVegas,Nev.:
“Our irst sale is in November 2015. Both Dan Thomas and I used to work for Manheim
“We have six lanes, but we’re running four. We’re pretty proud of our facility.
“We’re drawing about 230 dealers in the lanes.
“Our volumes are right around 320 to 330. That’s way up from this time last year. It’s a grind here. There are a lot of cars around. We’re taking our time and slowly growing each month.
“(Our conversion rates) were running around 67 to 68 percent, but the last couple of weeks have been a little challenging. A lot of people stock up for the tax season and a lot of dealers were telling me that tax season (bump) didn’t material-
ize like it did last year.
“Dealer consignment is 85 percent of our volume. Fleet-lease-repos are 15 percent. We sell cars for Avis, for Budget and Enterprise pops in once in a while, There are also some local credit unions we’re running. We also run for Smart Finance and Honor Finance. It’s deinitely grown since last year.
“We have Auction Pipeline and we do simulcast. It started slow. Last year nobody knew about us (online). But now we’re doing condition reports, we’re doing pictures and we’re getting more and more exposure. As we get more cars, I think that will drive up our base as well.
“I think the biggest challenge we have is getting the cars in on time. A lot of people want to drop the cars of a day before the sale or the morning of the sale.
“Our sale is on a Wednesday, so if we can get the cars in a Monday afternoon or even Tuesday morning, that
Compiled by Jeffrey Bellant
gives us time to get a picture, a CR and get them up on the Pipeline. That way when people look at our inventory they see we have cars.
“Average price is about $5,700. Last year, it was actually higher because we had a new car store that was giving us a lot of their frontline stuf. They were giving up a lot of rental car, latemodel vehicles. But now we’re getting some of their trades.Soweareconsigning more cars, but some of them are lower-end cars that lower the average.
“It’ just a matter of getting dealers to our sale. Once they come and walk in, they go, ‘Oh, wow,’ and it’s better than they expected. I tell them to just come in one time and try it.
“I think the market is correcting itself. It was really high in March and April.
“We haven’t set the date, but we usually do a summer bash in June. We’ll have a barbecue with beach prizes.”
2012 MODELS2014 MODELS
2015 2013MODELS MODELS
A while ago I wrote about my disenchantment with dogs. I realize, of course that 75 percent of our readers believe that dogs qualify
blankly from holes deeply ensconced in a face full of fur. A snooted nose protrudes rudely at one end of the animal accented with
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
as man’s best friend and not wishing to alienate or distance those folks, I’m not of that ilk.
I recounted the experiences of seven acquaintances with various breeds that came and went for reasons varying from disease to distrust and villainy to vile manners. The last acquisition was a poodle cross with a shih-tzu or shih-poo named Millie, a completely useless white, lazy, ball of tightly curled luf.
Her jet black eyes stare
the ugliest underbite, the result of greedy commercial in-breeding; a ventriloquist’s dummy is the lasting impression! The word ‘dummy’ here conveys more than you think; three bricks would have more sense than this canine conundrum.
Afectionisconferredupon her from all other members of the family from playful chase to idle petting while watching TV. This afection is returned in like form, rolling over to expose an awkward pink underside for a
belly rub – and that’s just for the dog! I should enjoy such ministrations! Meanwhile, I ignore the dog and she does methekindnessofreturning the favor. We hardly ever acknowledge either’s presence unless I’m kicking her out thebackdoortothepatiofor potty purposes.
She’s also the laziest critter on four legs. At night she resides in a metal kennel, a cage in other words. Now lest you get the impression of imprisoned penury, let me assure you that my wife has rendered this enclosure to resemble a ‘Hound Hilton’, a cosseted canine cavern, lavished with cushions, blankets and a colorful cover for nighttime privacy. The whole is housed in our bedroom and left to her own devices, she’ll happily lounge in there till after midday when bodily necessities dictate her levee and exit.
Millie has reached the ripe old age of three. I therefore have another ten years of forbearance yet to exercise, as this one’s going nowhere.
Now I suppose you think that I have embraced my tolerance and that no further test of my lack of animal attraction exists. Poppycock!
My eldest daughter recently acquired a dog of her own to share with our grandson. We spend a good deal of time with him what with school runs, stay overs and the like. So by default the dog is a frequent visitor. Is this some scrufy mutt to entertain with not a care in the world? Not a bit of it.
This new attachment is a French bulldog – a hugely expensive “blue” French bulldog, the cost of which is in indirect proportion to the attractiveness of this aberration of dog design. Ugly doesn’t even come close! First, it looks like it walked into a wall, resulting in a concertina-like face and a spread-eagled nose with lared nostrils in the style of a Maserati.
I would swear that, at some point in its unfortunate development, an introduction of bat DNA was in-
troduced into one side of the double helix. Its ears are the size of NASA space satellites and can almost move independently, twitching eerily (sorry) at the least noise or movement. The inal insult to its almost furless physiognomy are the eyes - they’re blue-grey! They stare, hauntingly and suspiciously at all around, out of proportion to the rest of the dog, icily assessing whether to nip at your ankles or go straight for the jugular vein.
Itsbodyisassolidasarock – pushing, shoving muscle covered in the skimpiest of mole-likefur.Stilljustapuppy, it’s as clumsy as a new driver, running into things while ignoring the efects of its collisions. The new coffee table, hard won from the furor of furniture shopping, now a teething ring aiding in the formation of fangs.
One thinks of a French bulldog having a cocky French name; Henri, Monsieur Tatti, Vlon Vlon or the like. No. It’s called Kevin –very millennial!
Across
1. Maker of radials
5. Kia sedan also known as the Opirus
9. Chrysler SUV
10. Discovery is one of their models
12. Popular Honda
15. Shade of dark blue
16. ___ and outs
17. Midsize Kia
19. Add up
20. 24 hours
24. Running, as an engine
25. Lamborghini model
26. Dodge compact SUV
29. Ford’s ____boost engines
30. Nissan minivan
31. “Life of ___” movie
32. Asphalt
33. Former Toyota compact car
35. Bentley’s “world’s most extraordinary” SUV
38. Approve
40. Away from home
41. Station ____
42. VW minivan Down
1. Mazda model 2. Available space
3. A, in German 4. Turn over, as an engine
6. Nissan SUV 7. GPS function
8. “Slumdog Millionaire” setting
11. Change the tire positions
13. Wheel parts
14. Core essential of a business, in business slang
17. Mileage gauge
18. Camera rotation
21. Range Rover SUV
22. One who provides funding
23. Dodge model
25. Rogers’ state
26. Prospective buyer who does not come to a scheduled appointment, 2 words
27. Light brown color
28. Midsize Toyota
31. Steeler’s state
32. Owners of Jaguar and Landrover
34. Volga tributary
35. Invitation letters
36. “___ rang?”
37. Go with your ___
39. Prosecutor, for short
AROUND THE BLOCK
MANHEIM HELPS RONALD MCDONALD HOUSE
Manheim team members have served thousands of families with the Ronald McDonald House Charities over the years.
Within the past six months, various teams have served meals, hosted collection drives and raised funds so that families can be close to each other as their sick
children get care and resources at Ronald McDonald Houses.
In Pittsburgh, some Manheim team members traveled to the Ronald McDonald House to shop, prepare, cook and clean up for 50 family members staying at the house. There were enough leftovers to feed an additional 40 peo-
ple in the home. The group plans to collect funds and help purchase one or two new commercial ovens for the home.
At Manheim Southern California, the TRA and Specialty departments teamed up to host a fundraiser benefiting the Ronald McDonald House in Loma Linda, Calif. The team got together and served a delicious meal to families, too.
In the Southwest, Manheim Nevada team members included RMHC as one of their three community outreach events in March 2017, while in the Southeast, Manheim North Carolina raised more than $5,000 last year. Throughout 2016, Manheim Milwaukee team members collected aluminum tabs to make a large donation at the end of 2017. Manheim auction sites in St. Louis, Pennsylvania, Riverside and El Paso collected more than 150 pounds of tabs so far this year.
Compiled by Jeffrey Bellant
Police Present Award to Auction
The Pflugerville (Texas) Police Department honored ADESA Austin as its Crime Prevention Citizen Volunteer of the Year for the auction’s work with the Blue Santa toy drive in 2016.
Blue Santa collects toys for children in the Pflugerville suburb of Austin. Each year, hundreds of children celebrate a better holiday thanks to the Pflugerville Blue Santa program and the volunteers who sort, wrap and deliver the gifts.
“The Pflugerville Police Department supplies armed security to the auction on sale day, so we found it fitting to help,” said ADESA Austin General Manager Rich Levene.
“We set a goal to gather enough toys to fill 10 boxes or one truck load,” said Levene. “We did it.”
Volunteers from the auction also helpeddelivertoystofamiliesinthe program.
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
COOL CHARACTERS: Staffers from Manheim El Paso, along with the Hamburglar and Birdie, participate in a Ronald McDonald Walk for Ronald McDonald House Charities.
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