Used Car News 6/5/17

States Step up Regulatory Enforcement

By Ted Craig

LAS VEGAS – While federal regulators like the Consumer Financial Protection Bureau and the Federal Trade Commission get all the attention, the real threat for dealers lies in the states.

A panel at this year’s National Alliance of Buy-Here, Pay-Here Dealers told attendees that is truer than ever.

The Trump administration has taken a very public stance against regulation. At the same time, many attorneys general have taken a very public stance against the president.

The website for the Democrat-

ic Attorney Generals Association states, “Democratic attorneys general are the first line of defense against the new administration.”

One way the group’s members plan on taking rear-guard action is by taking up causes the federal regulators might back of on. For example, California’s attorney general is considering using disparate impact claims in auto finance cases, just like the CFPB.

DAGA represents almost half of the attorneys general in the country.

“If you’re in one of these states, prepare for the worst,” said attorney Terry O’Loughlin.

A prominent member of this group

is New York Attorney General Eric Schneiderman. Schneiderman has taken numerous actions against car dealers in the past year, including a recent settlement with more than 100 dealers who sold vehicles with open recalls.

But Republican attorneys general are a little better in many cases.

For example, Ohio Attorney General Mike DeWine regularly announces actions against car dealers, often involving the failure to deliver titles. The state maintains a fund to reimburse consumers in such cases.

Part of the reason state regulators take so many actions against car dealers is complaints about auto

sales and repairs rank high among their constituents.

While auto complaints barely register in the FTC’s annual tally of complaints, they rank at or near the top in many states.

Elected regulators tend to make a big deal about major actions against car dealers and finance companies because it helps promote their careers, O’Loughlin said. And when they do this, other regulators pay attention and follow suit.

O’Loughlin said the worst outcome for a firm is when more than one attorney general goes after it.

“It’s like a pack of wolves going after a company,” he said.

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Dealer Recounts Day of Tragedy at Auto Auction

By Jeffrey Bellant

At 9:55 on the morning of May 3, the Facebook page for Lynnway Auto Auction, North Billerica, Mass., showed cars entering the arena with a clear-blue sky as the background.

The caption read, “Lined up and ready for a beautiful Wednesday morning!”

About an hour later, a 76-year-old auction employee accelerated a 2006 Jeep he was driving through the cinder block wall of the arena, striking multiple individuals.

Three people – Brenda Lopez, Pantaleon Santos and Leezandra Aponte – died at the scene.

Two more people died over the course of the next week from injuries sufered in the accident.

Ruben Espaillat died May 13 at Lahey Hospital. Elliott Rowlands Jr., died May 10 at Lahey.

In addition to those killed, four people were hospitalized and three were transported to area hospitals,

treated and released.

Danny Wolfe, owner of 21st Century Motors Inc. in Gorham, Maine, was at Lynnway the day of the accident and was near the Jeep before it careened into the crowd.

“About five seconds before it took of, I had walked around it and decided I didn’t want to buy it,” Wolfe said. “I walked around the front of it to get to the adjoining lane to the other car.”

Wolfe said he “heard a noise that was unusual” and turned around as the car leapt forward. He said as “an old stock car guy,” it sounded to him like a car with a stuck throttle. But Wolfe didn’t want to speculate on the cause of the Jeep taking of

The Jeep had just entered the auction building in the F lane – the left side – when it took of, Wolfe said.

“It headed toward the right hand of the two blocks and then swung back through the crowd of people in between the cars as it got to the end of the building,” Wolfe said. “This took about three seconds.

“In the simplest of terms, a car got out of control in a building full of people.”

Wolfe had gone to see if he could help but the auction already has local members of police and fire department present at the sales. He said the first ambulance was there within minutes.

Wolfe has been going to Lynnway since it opened

and he’s been going to auctions for more than 40 years.

He said the other part of the tragedy is the number of people that depend on the auction for their livelihood.

They include the employees of the auction, the buyers, the sellers and the employees of the dealerships that retail the cars.

The following week the

auction held its regular sale and had a local minister hold a prayer meeting that day. Wolfe said the turnout was large.

The National Auto Auction Association is working with the Massachusetts Independent Automobile Dealers Association on raising money for the victims and the families of the tragedy.

NEWS BRIEFS

GWC Adds Features to Portal, Offerings for Elite Dealers

GWC Warranty has released Dealer Portal 2.0 – the latest enhancement to GWC’s online e-contracting platform.

Dealer Portal 2.0 introduces to dealers a series of new features and enhancements designed to make econtracting with GWC Warranty vehicle service contracts even easier and faster, helping them operate a successful business in today’s digital marketplace.

Highlighting the latest release is a brand new layout with a fresh new look and streamlined navigation. Dealer Portal 2.0 also features a responsive design to optimize access on tablets.

In addition to a refreshed design, new features include the ability to add and edit a list of preferred lenders with information that pre-populates while rating a vehicle. Online contract cancellation inquiries are also now available to expedite the request through an easy-to-use online form complete with the ability to upload attachments.

GWC also announced new exclusive benefits for Elite Dealers to access Covideo.

Now available exclusively to GWC Warranty Elite Dealers is a 30-day

trial to Covideo. At no charge, Elite Dealers can test drive the video email marketing tool that is proven to increase internet response rates, dealership visits and vehicle sales.

Also new for GWC Elite Dealers is a one-user package, specially designed for smaller independent used car dealers, available at an exclusive discounted rate. GWC also ofers reduced pricing for a variety of multiuser packages, perfect for larger and franchise dealerships.

GWC Warranty is also ofering Elite Dealers a special promotion through yearend. Qualifying dealers who sign up for Covideo will have the option to extend their one-user subscription through the end of the year and receive a custom branded template at no charge.

Ally Partners with Online Seller

Ally will ofer auto finance and insurance products for vehicles purchased through Tred, an online used vehicle marketplace.

Tred, which launched in 2012, connects buyers and sellers on its platform in order to facilitate simple, safe and efcient vehicle sales. Ally began accepting financing applications through Tred in April, and will begin ofering vehicle service contracts and guaranteed asset protec-

tion (GAP) coverage this summer.

KAR Announces Earnings, Plans to Refinance

KAR Auction Services Inc. reported its latest quarter financial results for the period ended March 31.

For the first quarter of 2017, the company reported revenue of $866.6 million as compared with revenue of $758.3 million for the same quarter of 2016. Net income for the quarter increased to $69.2 million, as compared with net income of $60.7 million in the same quarter of 2016.

The company also announced it is seeking to refinance and reprice its existing term loans under its senior secured credit facilities.

KAR intends to issue senior notes to refinance a portion of the term loans and reprice the remainder of the term loans that are not refinanced. In addition, the company is seeking to increase its existing revolving commitments.

Net proceeds from the proposed refinancing transactions will be used to repay existing term loans.

Spireon Unveils Improvements

Spireon Inc. has debuted the latest version of its GoldStar GPS solu-

tion for the vehicle finance industry.

The new GoldStar GPS solution includes several key updates and features, including a redesigned user interface, a new mobile app and improved wireless reception.

There is also a new reporting feature that provides early warning of driver behavior that may accelerate the devaluation of assets.

The improved GPS unit features a slim, re-engineered form and increased tamper protection and temperature-extreme durability.

Consumers Pay Personal Loans

Consumers in financial distress tend to prioritize unsecured personal loans ahead of other credit products such as auto loans, according to TransUnion.

After personal loans, they prioritize auto loans over their mortgages and credit cards, and have done so since at least the beginning of 2004.

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Editorial: Ted Craig, Managing Editor Jeffrey Bellant, Staff Writer

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Auctions Step up Safety

By Jeffrey Bellant

ADESA Boston was in the headlines about a year and a half ago when a driver crashed a BMW into the crowd during a sale.

Only one person sufered serious injuries and nobody was killed, but it was bad publicity for the chain that set the industry’s safety standard.

The auction’s reaction, however, showed the right way to respond to an incident.

Frank Hackett, chief executive officer for the National Auto Auction Association, said ADESA Boston responded by placing bollards – short, vertical posts – to divide the lanes.

“To me, that speaks volumes about their safety initiatives through Safe T. Sam (the ADESA program adopted by NAAA),” Hackett said.

Safe T. Sam has helped deliver information and tools for auctions to improve safety.

“Safety’s been an important issue for a long time,” Hackett said.

Media reports stated that in the wake of the Lynnway accident, the auction is installing bollards in its lanes as well.

More than a dozen years ago, several NAAA members created a “safety in the lanes” video. The Safe T. Sam program takes that training even further.

In addition to Safe T. Sam, NAAA is also promoting its Coach Caution online safety program for auctioneers.

The association’s website also has a counter on its website constantly updating the number of safety-certified members. At press time, there were 5,600.

Last summer, NAAA held a Safety Summit and ofcials have been discussing plans for a 10-hour training program on OSHA requirements.

“It’s also a training program for those who are designated as the safety person in the auction to organize their safety program,” Hackett said.

He said he was preparing for this

program at the time of the Lynnway accident.

The NAAA has not set a date for this program.

Hackett said NAAA has always made safety a priority for its members.

Cam Hitchcock, CEO of XLerate Group, requires all of his company’s nearly 1,000 employees to be certified through the Safe T. Sam program.

Hitchcock said the company moved aggressively because safety is important to auctions.

“It was pretty evident to us that it was the right thing to do,” Hitchcock said. “To the credit of ADESA and NAAA, they deliver the program to you to make it easy to implement.”

Hitchcock said a business has to do everything it can to keep people safe.

“Safety has just got to be part of the culture,” he said.

David Andrews, CEO of Dealers Auto Auction Group, is working on a system that might include bollards to keep cars in their lanes.

But he said that people don’t realize how tough a driver’s job is on auction day.

“People are beating on the top of the car, others are hollering at you,” Andrews said. “They’re yelling ‘Speed it up!’ ‘Stop!’ – man, it’s hard.”

Andrews said one driver described a day where he was in the lane and a dealer opened the hood so he couldn’t see.

A second dealer came up and shut the hood, so the driver was about to pull forward but had to stop abruptly, because the guy who opened the hood had moved to look underneath the car in the lane.

The driver told Andrews, “You can’t be careful enough.”

Andrews said he doesn’t walk between cars unless he makes eye contact with the driver.

“We have a safety meeting with all of our drivers before every sale,” he said.

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GM Extends Warranties

DETROIT (AP) – General Motors is extending the warranty on thousands of older cars and SUVs.

The moves comes after the government began investigating complaints that the headlights can suddenly go dark.

The National Highway Trafc Safety Administration started the probe last month after getting 128 complaints from owners about lowbeam headlight failures.

The investigation could lead to the expansion of previous recalls.

GM notified dealers that it would guarantee the headlight control modules on the vehicles for 12 years or 150,000 miles, whichever comes first.

The previous warranty was three years and 36,000 miles.

The company says the headlight module can fail in the heat generated under the hood.

GM is cooperating in the investigation and isn’t recalling the vehicles because it’s checking the headlight failure rate for comparable older cars, company spokesman Tom Wilkinson said.

The investigation covers about 300,000 vehicles.

Vehicles covered by the increased warranty include certain 2006 to 2009 Chevrolet Trailblazers and

GMC Envoys; the 2006 Buick Rainier, GMC Envoy XL, Chevrolet Trailblazer EXT; the 2006 and 2008 Pontiac Grand Prix; and the 2006-08 Buick LaCrosse.

Owners will be notified about the warranty extension and dealers will replace the headlamp modules if necessary.

Customers can contact a General Motors dealer for repairs at no cost to the driver.

The increased warranty doesn’t cover every vehicle included in the NHTSA investigation, which includes the 2005 and 2009 Buick Lacrosse; and the 2006 and 2007 Chevrolet Trailblazer, GMC Envoy and Buick Rainier.

The probe also includes vehicles from several discontinued brands: the 2006-2008 Isuzu Ascender and Saab 9-7X; and the 2007 Pontiac Grand Prix.

These vehicles will not be covered by the extended warranty either.

The government says complaints came from owners of vehicles that weren’t covered by previous recalls but are within the model years they afected.

A 2015 recall and a related one from 2014 covered about 497,000 vehicles.

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INCOMING PRESIDENT BRINGS WHOLESALE, RETAIL EXPERIENCE NIADA

David Andrews. president of City Auto, with locations in Murfreesboro and Memphis, Tenn., is also chief executive ofcer of Dealer’s Auto Auction Group. He is the incoming president of the National Independent Automobile Dealers Association. He also owns Pace Financial.

Used Car News: What is your background and how did you get into the automobile business?

Andrews: I’m a third generation used-car dealer.

I started out working for my dad for a couple of years and I’ve been in business for

myself for 45 years. I went in business for myself when I was 20 years old.

We’ve got four independent retail locations and five auction locations. It’s a fulltime job. City Auto’s been around since 1986.

I had a business called Andrews Motor Co. – that was the foundation of City Auto. I also was a Ford dealer for 25 years and enjoyed that.

I sold that business in 2005. But I was an independent dealer before I was a Ford dealer.

I got into the auction business by accident.

I made an investment in

an auction in November of 2001 as a silent partner. That was Dealers Auto Auction of the South in Mississippi. The business partner had a massive heart attack and called me up and said, ‘I can’t work.’

So then I was in the auction business.

But I always liked the auction business.

In 2004, we bought a second auction in Huntsville, Ala., and we never looked back.

We now have five auctions and we’re still looking.

UCN: What kind of model do you have for your dealerships?

Andrews: We’ve got two diferent models. We’ve got the model at City Auto, which is like CarMax. We’ve got a big location with a lot of cars.

In Memphis, we keep 1,250 cars and in Murfreesboro, we keep 1,000. Both of those lots are called City Auto. Then we’ve got two other car lots called AutoNext, also in Memphis and Murfreesboro, and they are more like DriveTime.

The Internet has been the biggest change I’ve seen over the years.

If you can’t do business on a smartphone, then you won’t be in business in 10 years.

UCN: How can your auction experience help you in leading an association made up of used-car dealers?

Andrews: I think it’s really simple. It gives you two perspectives into what a dealer needs.

If I were just running an auction business, I wouldn’t know how to run a used-car lot. If I were just running a used-car lot, I wouldn’t know how to run an auction. So it gives you both perspectives.

UCN: What are the top issues that you see afecting the used-car business today?

Andrews: The times are changing and the dealers are going to have to change. People say, ‘Oh, I’ve got a terrible location where I’m at.’ I think, ‘You don’t know what a terrible location is. Come to City Auto where we’re on a dead-end street. You have more trafc at your location on Jan. 1 than we have all year long.’

But we draw people to our business through the Internet.

We do very little TV and no print advertising. We’re all digital. Now, I don’t know where it’s going to be in five years.

But you’re going to have to change with the times.

I’m on an advisory board for Wells Fargo. I did an analysis on what millennials want.

They want the truth, they want transparency and they want it now.

They want to buy a car as fast as you can drive through a Starbucks drive-thru.

If you go to a dealership to buy a car and have to spend eight hours in the dealership, you’ll say you have to go somewhere else to buy a car.

When I talk to my people, I ask them, what are we going to do diferently this year?

If they say, we’re going to do the same thing we did last year, I tell them we have to be better than last year.

But it’s hard to get better every year.

It costs money to get better every year. You have to do more training to get better every year.

You don’t want your customers to know more about the car you’re selling than you do.

Also, treat your salespeople like they are part of the family.

Everybody thinks you take care of the customer first. They’ve got it all wrong.

If you take care of your employee first, he’ll take care of your customer.

UCN: The used-car industry is seeing more cars coming back from auction due to the leasing boom a few years back. How will this afect independent dealers going forward?

Andrews: I think it’s going to be great for the car business.

It’s going to depress used car prices and make the price between the new car and used car wider and make those used cars more afordable.

It’s also going to give people a bigger selection.

So we’re going to sell more used cars.

UCN: What can NIADA do to help dealers with the increase in regulatory scrutiny?

Andrews: We try to educate dealers with the Certified Master Dealer program.

I’ve got three of my general managers that work for me who have gone through the program.

We also have the National Leadership Conference and Day on the Hill in Washington D.C. each September. Last year we had 200 dealers go up there.

We lobbied Senators and U.S. Representatives against the CFPB.

We also lobbied for the right to sell cars with open recalls on air bags.

Now, with the Day on the Hill, lawmakers know who the NIADA is and what we do. Now they welcome us to get our perspective on different situations.

I think the thing that the government doesn’t realize is when something bad happens, (legislators) pass more laws and regulations.

But we have plenty of laws and regulations if they would just enforce the ones we have.

The NIADA also has lobbyist Sante Esposito, with Federal Advocates, who watches the rules and regulations as they are developed that affects the used car business.

So we’re on top of it.

The NIADA also has a PAC fund that gave out about $85,000 in campaign contributions.

We also monitor the state (legislatures). The association does a lot for the usedcar business.

UCN:. On the digital side, how is NIADA helping dealers to continue to adapt and get ahead of the curve in digital business?

Andrews: If dealers will show up to our conference in Las Vegas, they’re going to learn everything they want to know about the Internet.

Continued on page 10

UCN: What would be the most important goal you hope to achieve during your term as NIADA president?

Andrews: We are steadily building a better reputation for the usedcar industry. I think it’s at an all-time high. The first (reason is) people are running a better business and doing a better job. But also, if you look around at your communities, independent dealers are involved in so many eforts to help out.

UCN: Anything else you’d like to share with our readers?

Andrews: The NIADA has great leadership under Chief Executive Ofcer Steve Jordan. I can’t say enough good things about him. He thinks big. We’re moving this association forward. All signs are positive and all lights are green. I love what I do every day. I was thinking about retiring about a year ago. I was talking to my wife and she said, ‘You know, you could probably find something you like to do.’ Then I thought, why would I want to quit what I love to do to try and find something that I like to do. Right now retirement is not in my future.

City Charges Dealerships

The New York City Department of Consumer Afairs (DCA) announced charges against several used-car dealerships on claims of deceptive and unlawful trade practices.

The five Brooklyn stores are all under the same ownership. Three of the dealerships – USA1 Auto Sales, Inc.; Lenden Used Car Sales, Inc.; D&A Guaranteed Auto Sales, Inc. – are currently in operation and two others – Linden Used Cars, Inc. and Mosulei Group Inc. – have DCA secondhand auto dealer licenses but are not currently in operation.

“The charges filed send a clear signal to used car dealerships that the city will not tolerate these predatory financing and sales practices,” said DCA Commissioner Lorelei Salas. “We are committed to ensuring a more just marketplace for all New Yorkers and will continue to educate consumers on their rights.”

DCA’s complaint document, which will be heard at the city’s Ofce of Administrative Trials and Hearings alleges numerous violations and seeks $600,000 in fines and $577,000 in restitution for 75 consumers.

DCA is also seeking to revoke all of the dealerships’ licenses.

DCA will also for the first time be

Purchasing power

seeking consumer restitution from the financing companies – Credit Acceptance Corp., Clover Commercial Corp., and Westlake Financial Services – that were involved in financing customers at these stores.

Among the charges, the DCA claims the stores failed to disclose or even hid finance charges.

The DCA says one consumer was quoted a price of $8,000 for a 2004 Nissan Pathfinder Armada, only to find out later that the dealerships had secretly written $12,999 on the financing agreement, and then charged her an additional $1,730 for an extended service plan that she had already expressly declined.

The DCA also says the stores would mislead consumers about the prices of its vehicles in its ads.

One consumer saw an online advertisement ofering a 2007 Volvo XC90 for $6,900 and called the dealership to confirm its availability before she traveled to see the vehicle. When she arrived at the dealership, a salesperson informed her that the car cost $12,900.

The DCA says the dealership then changed the price again on the sales contract, but the consumer did not notice because they rushed her through signing and did not give her a copy of the contract.

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WE BUY BHPH NOTES

Recalls Range from 1 to 1 Million

Among recent recalls, there was a very large one, a very small one and one that shows why opponents of increased recall regulation say not all recalls are equal.

Chrysler is recalling more than 1 million trucks because of issues with their seatbelts and side airbags.

Chrysler is recalling 1,021,279 model year 2013-16 Ram 1500, Ram 2500, and 2014-16 Ram 3500 vehicles.

Certain driving conditions, such as driving of-road or debris striking the vehicle, may cause the roll rate sensor to trigger a fault within the occupant restraint controller (ORC).

primary communication pathway between the air bag control unit and the engine control unit is damaged, the supplementary communication pathway may not shut of the engine or fuel pump.

MBUSA will notify the owner, and a dealer will update the engine control unit with new software, free of charge.

The recall was expected to begin by early June.

When advocates of expanded recall regulation claim unresolved recalls endanger drivers, opponents point to recalls like this one from Volkswagen Group of America Inc.’s Audi division.

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Chrysler will notify owners, and dealers will update the ORC software, free of charge.

The recall is expected to begin June 23.

Chrysler’s number for this recall is T25.

Meanwhile, Mercedes-Benz USA LLC is recalling one 2013 R320 4MATIC CDI vehicle equipped with a six-cylinder diesel engine.

In the event of a crash where the

Audi is recalling 2,091 2015 A3 1.8T FWD S tronic and 2.0T Quattro S tronic vehicles.

The safety certification label has an incorrect vehicle production date.

As such, these vehicles fail to comply with the requirements of 49 CFR Part 567, “Certification.”

Audi will notify owners, and dealers will install an overlay label containing the correct vehicle production date, free of charge. The manufacturer has not yet provided a notification schedule.

Volkswagen’s number for this recall is 51F5.

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Car-Mart Reports Results

America’s Car-Mart, Inc. reported net earnings of $5.2 million for the quarter ended April 30.

Revenues were $153 million compared to $155 million for the prior year quarter including a $1.6 million increase in interest income and same-store revenue increase of 1.3 percent.

Average retail sales price increased $13 to $10,654 from the prior year quarter. The average retail sales price increased $25 from the quarter ended Jan. 31.

Collections as a percentage of average finance receivables decreased to 15.6 percent from 16.8 percent from the prior year quarter. The weighted average contract term increased to 32.5 months from 31.6.

Net charge-ofs as a percent of av-

erage finance receivables declined to 8.7 percent from 9 percent for the prior year quarter.

Accounts over 30 days past due increased to 3.6 percent from 3 percent at April 30, 2016.

Average percentage of finance receivables current improved slightly to 81 percent from 80.5 percent at April 30, 2016.

Provision for credit losses was 28.4 percent of sales vs. 27.4 percent for the prior year quarter.

Selling, general and administrative expenses rose to 17.2 percent of sales from 16.7 percent for the prior year quarter.

America’s Car-Mart now has an active accounts base of approximately 66,800.

Man Shoots at Police on Lot

ARLINGTON, Texas (AP) – Investigators say North Texas police fatally shot an armed man who drove to a used-car dealership and demanded to speak to the owner, then opened fire on ofcers.

Arlington police Lt. Christopher Cook said no ofcers were hurt in the May 12 incident. The name of the suspect wasn’t immediately released.

Cook said employees say the man

stopped at the dealership several times in recent weeks, demanding to see the owner. Workers told investigators that the suspect had a knife during one visit, so when he showed up again, the staf called Arlington police.

Authorities aren’t sure why the man sought out the owner before the standof. Cook says the suspect twice fired through windows of his car before police returned fire.

PEOPLE IN THE NEWS

ADESA Promotes Dealer Services

Director

ADESA has expanded the company’s dealer sales and services reach into additional regions

customer needs with collaborative and creative solutions tailored to the client.

She reports to Steve Dudash, vice president of dealer sales and services for ADESA.

across the U.S.

As a result, Kathy Hopkins has been promoted to lead the team of regional dealer sales managers in the newly created position of director of dealer sales. Hopkins will ensure that auction sales personnel provide market expertise and meet

Hopkins has been a regional dealer sales manager overseeing the East region since 2015. Previously, she was assistant general manager/dealer sales manager at ADESA Indianapolis for nearly a decade. Hopkins also served as fleet-lease manager and commercial account manager at that auction location after starting her career there in 1998 as account coordinator.

Consultants

Hire Development VP Auction Management Solutions has hired Jamye Carpenter as vice president of business development. Carpenter has almost

Greenville Auto Auction

20 years of experience in the auto auction industry with positions ranging from customer service representative to senior vice president. She started her career in 1999 with AutoCheck as a customer service representative and eventually became the director of business development.

Carpenter also managed the Red Mountain Technologies client services team, serving many of the largest property and casualty insurers in the country, while continuing to sell and develop new products for the auction and insurance clients she served.

Manheim Names Execs

Manheim has named Peter Grupposo as vice president of dealer sales and Holly Capps as vice president of inventory solutions –commercial and whole-

sale sales.

Both will report to Tim McKinley, senior vice president of sales for Manheim, and assume their new roles efective June 1.

In his new position,

Grupposo will lead a team of client executives responsible for developing and managing comprehensive inventory solutions for dealer clients.

Having held leadership roles within Manheim’s sales organization since 2014,

Grupposo most recently served as Manheim’s vice president of inventory solutions – commercial and wholesale sales.

In 2013, Grupposo was named vice president of operations and business development for NextGear Capital where he designed and implemented the sales structure for both the field sales and inside sales functions focusing primarily on the independent dealer space.

Prior to that, he held various leadership positions with Dealer Services Corp. and NextGear Capital dating back to 2005, including sales executive, general manager and regional director of sales for the Northeast region.

With Grupposo’s move, Capps will assume the role of vice president of inventory solutions - com-

mercial and wholesale sales, where she will lead a team responsible for maintaining and exploring new revenue and market share growth opportunities for Manheim’s com-

mercial clients. Capps joins Manheim from Cox Media, where she served most recently as group vice president responsible for the leadership and development of sales strategies for the advertising division of Cox Communications Inc.

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Manheim Promotes GMs

Manheim announced the promotion of three general managers: Dave Rathjens, Greg Milam and Martin Sandoval.

Rathjens takes over at Manheim Lakeland.

Rathjen began his career at Manheim in 1999 as an inspections manager and, most recently, he was assistant general manager at Manheim Tampa.

Through the years, he has held various roles at Manheim Ohio and Manheim Kansas City including vehicle entry manager, body shop manager, repo/lease manager, recon manager and operations manager.

Prior to joining Manheim, Rathjens spent 10 years in the U.S. Army, with the majority of his time as a paratrooper in the 82nd Airborne Division.

He attended Drake and Ashford Universities where he graduated with a Bachelor of Arts degree in organizational management. He has also participated in various Manheim leadership programs.

Milam takes over at Manheim Seattle.

Milam has held several Cox Automotive leadership roles for the past 18 years.

Most recently, he was director

of mobile auction sales and operations.

He started his career with Cox Automotive in finance and has since held various roles with the organization such as district manager for Dent Wizard, project manager for Manheim China, director for Manheim Exporttrader.com and assistant general manager for Manheim Atlanta.

Milam earned a Bachelor of Science degree in business administration and a Master of Business Administration from Auburn University.

Sandoval takes over at Manheim Central California.

Sandoval joined Cox Automotive in 2013.

He was most recently a regional account executive for NextGear Capital and, prior to that, he was vice president of operations and director of auto finance at Zinc Financial.

Sandoval earned a Bachelor of Science degree in business administration and a Master of Business Administration from the University of Phoenix.

He is currently pursuing a Doctorate of Business Administration degree from California Southern University.

RETAIL MARKETS

KENTUCKY

Brad Gregory, owner, Brad Gregory Motors, Franklin, Ky.:

“We’ve been in business one year as of June 1.

“Before this, I worked with the sherif ’s department in town. I have young kids and seeing the way things were going in law enforcement I decided to go a diferent route.

“We try to keep 20 in inventory, but we’re selling a lot so I’m down to about 12.

“Typically, we get our vehicles straight from newcar stores the majority of the time.

“I go to auctions, but it’s rare. Once I started meeting people and making contacts, I started focusing on the new-car stuf

“We sell in the 20 to 30 range monthly. We primarily do buy-here, pay-here. We sell about 90 percent buy-here, pay-here and 10 percent retail. We have about 140 to 160 accounts on the books.

“The average down pay-

ment is about $800. We try to hit term lengths right around 24 months. I just found that most people are ready to move out after two years.

“We use both starterinterrupt and GPS. So far, I’ve only had to use starterinterrupt once, when I had someone run to Oklahoma.

But that’s the only time.

“Average retail price is probably around $6,500.

“The average model year is 2007. The average mileage is 140,000ish.

“I try to keep a 50/50 split between cars and SUVs/ trucks. We probably have a 50/50 split between domestics and imports.

“Average reconditioning is probably in the $500 range. When we started, I would farm that out, but now we do it ourselves.

“We advertise through our website and on social media (Facebook) and we do some radio spots locally.

“We recently sold a 2007 Nissan Murano with 99,000 miles. We got $9,100.”

OREGON

Dan Nicholson, owner, Central Oregon Motors, Redmond, Ore.:

“I’ve been in business since 2001. I did the Certified Master Dealer course in 2007 through the National Independent Automobile Dealers Association.

“I keep about 25 in stock. Sometimes it drops below that. I’m almost exclusively gas trucks – no diesel.

“Beginning in January 2008, I went strictly to pickups. (Right before the gas price spike) I had bought $500,000 of inventory and in six weeks it was worth $250,000. I begged, borrowed and did anything I could do to survive. I just kept going. That CMD class is probably what kept me in business.

“I’ll sell 18 to 20 per month.

“I buy my trucks out of Canada at U.S. auctions. I’ve been doing that for the last couple of years. The first year I did it, I was buying stuf pretty much under

$18,000, around $15,000. The first year I did it, I spend $12,000 fixing stuf up. So I thought, ‘This isn’t working.’ So I had to bump up into newer stuf and that helped.

“So instead of buying eight- to 10-year-old rigs, I went to four- and five-yearold rigs. It made a big difference in the condition of those trucks. Then it took me about a year to learn how to recondition them.

“There is an art to reconditioning stuf out of Canada. If anyone has every bought one, they know. For one they salt the roads up there, like they do in the East. So you have to fight the salt issue.

We found some secrets to fix that and we use rust converters and completely undercoat the vehicles.

“I’ve got my own mechanic shop and have two guys on salary just to recon stuf

“The U.S. rigs will bring more money, but knowing how to recondition the Canadian trucks means I can come out ahead.

“As a smaller dealership, I

Compiled by Jeffrey Bellant

can do a lot of this stuf better than a bigger dealership.

“Average retail price is between $20,000 and $25,000. Average model year is 2012. I try staying under 80,000 miles.

“The rest of the stock includes some Tahoes and Suburbans. I have a few trades and I do some consignments. Most of the stock is domestic – Chevys and Fords.

“Reconditioning costs – strictly parts – is a little over $1,000 per truck. All of my labor is factored into my overhead. So if that was all added in, it’s probably be close to $2,500 (if I farmed it out). I also give a threemonth warranty.

“For marketing and advertising. I have my website through DealerCarSearch and they shoot it out to Autotrader, CarGurus and I do Craigslist.

“I recently sold a 2013 Ford F-150, with 60,000 miles for $25,000. I do all fixed pricing. I do not negotiate pricing.”

WHOLESALE MARKETS

LOUISIANA

Matt Pedersen, owner, Lake Charles Auto Auction, Lake Charles, La.:

“We’ve been in business for 26 years.

“We currently have two lanes, but we’re completing a third lane in about 45 days (as of press time). We’ll have a fourth lane and a new 6,000- square-foot ofce completed by the end of the year.

“I’ve hired a couple of new sales reps and they are just bringing so many vehicles into the auction. We’ve been expanding our territory.

“Two years ago, I tore down the two bays that we had and built two new bays, adding a café and restaurant. I left the end open so that I could extend to a third and fourth lane. When we did that renovation two years ago it’s been non-stop since then.

“Weekly, we average 170 dealers in the lanes. Last year, it was about 100. They come from as far as Georgia, Florida and Alabama. We

also have dealers that come from Mexico.

“Right now, our average price is $6,700. We were at $4,500 last year.

“Year-to-date for vehicles sold is way up. But it’s a good problem. My sales reps have just turned my auction around.

“Year-to date, we’ve run 5,716 vehicles (through the third week of May), so it’s about 286 cars per week.

I think last year, we were about 100 cars less per week.

“We’re selling about 51 percent overall.

“We don’t do a lot of fleetlease-repo, but we do have some repo companies. We also picked up Enterprise about two months ago. We get their trades and lease returns.

“Online we use simulcast and we use Edge Pipeline.

“We also sell cars for the Federal Bureau of Investigations. It’s not many. We get them periodically. In September we’re supposed to get 30, for example. We’ll

get those five to six times a year.

“The high-dollar vehicles are doing well here. Corvettes and jacked-up trucks are selling well.

“We’re already up 16 percent year-to-date in vehicles sold, so 2017 is going to be the best year we ever had.”

NORTH DAKOTA

Loren Hallwachs, owner/general manager, Central City Auto Auction, Carrington, N.D.:

“We’ll have been in business three years as of June 14.

“Our anniversary sale will be like last year – collect as much inventory as possible and make it an event.

“We have two lanes. Current volume has been terrible, about 100 cars per week. It started last year, this slowdown. We’ve adjusted some things to remain profitable. Percentages have remained about the same, in that 40 percent range.

“The local economy has been rough. We’re a farming community. So we’re farm oriented – wheat, corn, soybeans, etc. – and they haven’t had good prices for three or four years.

“We were also extremely afected by the oil boom and bust, which occurred within the past five years. That’s afected us greatly.

“On that same note, the oil business has started to come back around, since the (election).

“We have about 350 registered dealers and about 150 active dealers. We’re very pleased with that number. We have a small-town feel. We’re hands on and we know our customers by name.

“Dealers say they’ve never seen it this slow and that’s from second-, third- and fourth-generation dealers. The tax return season was horrible.

“Our volumes are almost exactly 95 percent dealer consignment. We also have bank repos and even con-

Compiled by Jeffrey Bellant

signments from the public.

“We probably have a bigger online presence than most of your bigger auctions just because we are rural. We have anywhere from 25 to 45 bidders online. We use OVE, Openlane and SmartAuction.

“Our average price on the block is $7,500. I think we sell a lot of the $30,000 to $40,000 trucks and they bring up the average.

“We have a couple of powersports sales a year. When we do them, we’ll have 70 or 80 units. The farmers do most of our powersports business. We have everything from sleds (snowmobiles), to boats to side-bysides. We’ll have another one in the fall.

“We just got done with our spring classics sale (May 20). It was a good sale. We ran 61 units. We drew a 1947 Chevrolet, a 2002 Corvette, a 1972 Challenger and a 1971 Chevrolet SS. We also sold a 1955 Crown Victoria.

“We’re optimistic about the rest of 2017.”

DISCONNECTED JOTTINGS FROM TONY MOORBY

I think I may have mentioned before my afection for cycling when I was a kid. My brother and I went everywhere with reckless abandon – around the coun-

tryside or throughout the streets of London.

In fairness, there was hardly any trafc around and we blended in with ease, according all the necessary courtesies to any other road user whether pedal or engine driven.

A cycling sortie was never a reason to dress diferently; just don a pair of cycle clips to restrain jeans from getting caught in the chain set and of you went. Men wore suits to work and a mackin-

tosh (rainwear not a computer) if it was raining. Now everyone is tightly wrapped in Spandex or Lycra as if it’s important to wipe one second of the time it takes to get to work.

Let me tell you, very few people look good in Spandex, especially when draped over a saddle, the size of which in no way matches the task to what it has been set to undertake. How, in heaven’s name, does anyone sit on what is, to all intents and purposes, a banana?

I couldn’t imagine getting down the driveway, let alone making a trip to work or even more questionably, a leisurely ride around the countryside atop this minimalist perch! But these days, these machines for masochists are everywhere. I’m in England as I write this and the morning commute resembles a plague of locusts – swooping and diving, stopping and starting, weaving and wobbling without caring a tinker’s cuss about anyone else’s safety or security.

They gobble up road space as though it’s all theirs for the keeping and not caring less for any observation of highway safety. They swarm around cars and buzz through red lights as if they’re not there. Cycle paths, once the protected domain for them as well as motorists now form nothing more than a “no-go” area for cars and trucks as cyclists dismiss their use as an inconvenience.

Out in the country, they ride two and even three abreast regardless of road conditions or width, even when a car approaches from behind they obstinately form a barrier to normal passage, refusing to adopt a single file.

Back home in the States, thing are progressing (?) the same way. Accommodations for cyclists are becoming more and more nonsensical every day. A small bedroom community near Nashville is making a valiant attempt at reducing pollution from cars in trafc jams at rush hour.

Their solution has been to install cycle lanes, painted green, thank you, about the width of a normal car lane so two car lanes have now become one. I’ll give you three guesses as to what has now happened to trafc jams at rush hour! More like rush two hours. Cars now cough up more pollution for longer as the occasional commuting cyclist inhales more than his previous fair share of carbon products. Meanwhile, some overpaid councilman is patting himself or herself on the back in the misguided belief that they’ve improved things for their community.

As in the UK, bikers’ numbers are growing like Topsy here. One thing is obvious; their predilection for bright, ostentatious Spandex, the more luminous the better, afords them some observable safety. Just as well, as they hurl caution to the wind in their will to get where they’re going.

A little while ago I was approaching a major, busy intersection in Brentwood. I

had the green light and just as I had almost cleared the junction, a young man, riding about $3,000 worth of fancy bicycle, crossed the red light from his direction, cutting a wide arc right in front of me. I missed him miraculously by about six inches. My burst of expletives almost scorched the car’s interior. I looked in the mirror to find him waving his fist at me – the abject temerity of the man! I stopped at the next red light hoping he would catch up with me, whereupon I could have profered him some advice regarding sex and travel. He made sure that no such encounter took place.

I’m sure if you asked modern-day cyclists what they think of motorists, you’d be regaled with self-opinionated stories about road hogs and so on but as life in general gets busier, perhaps it would be nicer if we all thought of others first and keep within acceptable bounds designed for the purpose.

Across

1. Chevy model

5. BMW competitor

8. Air ___

10. Time just before a sale, e.g.

12. Subaru SUV

13. Toyota truck

15. Have to have

17. Old Dodge

18. Two page spread, e.g.

19. Right away

22. Radiator contents

23. Chrysler luxury car

25. Tey can give you a tow

28. Audi Allroad and Subaru Outback, for example

30. Accord rival

31. Tampa Bay’s state

32. ___ shifing fnishes

33. Soldier

35. For example

36. Antique car

38. Features that can be added to a vehicle

42. French for May

43. European gas measurement

46. Acura model

48. Spill (over)

49. Protected from imitators

50. On the right track Down 1. International funding body, abbr.

2. Te P in APR

3. Like Madison in NYC, abbr.

4. What a buyer may demand as regards price

6. Increase

7. Makers of the Trooper

8. Auction nods

9. Pontiac’s _____ Am

11. Volkswagen compact

14. Company with a trident emblem

15. Not owned yet 16. Energy Dept., abbr.

20. Jeep model

21. Coast guard rank, abbr.

24. Like the 1953 Ferrari 375MM Berlinetta

26. Setting for China

27. Light metal used in car manufacture

28. Slang for your car

29. Summertime abbr.

34. Nissan SUV

37. Maker of the xB and tC

39. Des Moines’ state

40. Kind of light

41. It afects the price

44. Chicago state, for short

45. Environmental regulatory body, abbr.

47. Bit of business attire

AROUND THE BLOCK

NEW FACILITY FEATURES SPECIALTY SALE

On April 14, Manheim DallasFort Worth unveiled its new facility at a grand opening event with more than 350 buyers.

The three-hour event generated an 82 percent sales rate, selling more than $4 million of specialty inventory.

The continued growth in spe -

cialty sales at Manheim DallasFort Worth has led the company to invest in a dedicated 3,000 –square-foot specialty building to meet growing dealer demand.

The facility, located across the street from its wholesale vehicle operation, has its own staff and will serve dealers in two sales

lanes.

Since 2008, the auction has hosted a monthly specialty sale that draws hundreds of buyers and hundreds of specialty units, ranging from Class A, B & C RVs, to fifth wheels, travel trailers, boats, motorcycles and powersports.

“Specialty vehicles are an important offering at Manheim Dallas-Fort Worth, and now we’re making it even easier for our clients to buy and sell these units,” said Nicole Graham-Ponce, general manager at Manheim DallasFort Worth.

“By creating a dedicated facility with an onsite staff right across the street from our traditional auction, we are able to prepare for growth, while providing a seamless experience for our clients.”

The 17-year-old Manheim Dallas-Fort Worth sale has more than 200 employees and draws about 1,600 dealers per week.

Compiled by Jeffrey Bellant

Historic Event Offers Corvettes, Classics

This year’s Corvettes & Classics Sale at ADESA Flint was the biggest sale in the auction’s history, according to General Manager Lawrence Cubitt.

The annual two-day event in April kicked of the first day with units from the auction’s national accounts. The next day started with free breakfast and an “Early Bird” sale. The main Corvette event followed with other muscle and classic cars.

During March and April, Flint customers could enter to win Corvette leather jackets, large-scale remote control Corvettes or the grand prize - a yellow 2005 Corvette convertible.

The winner of the drawing for the grand prize was from Auto Supply, Inc., a dealership in Flint, Mich. “I want to thank our customers and everyone who helped make this event such a success,” said Cubitt.

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

JOHN LOVE President, Websmart Auto