Recalls continue to create logistical and regulatory headaches for the used-car industry.
A pair of large airbag recalls was announced earlier this month.
Continental Automotive Systems is recalling potentially defective airbag control units in up to 5 million vehicles and Takata Corp. is recalling 1.2 million SDI driver-side air bag inflators.
These recalls afect a wide range of vehicle types and age.
For example, the Takata recall includes 361,692 model year 2004-06 Ford Rangers.
Ford hasn’t produced this vehicle for nearly five years.
The massive amount of recalls in the past few years continues to draw negative attention to used-car sales from the federal government.
The latest development is a Federal Trade Commission action against General Motors Co. and two dealer groups.
The FTC settled a complaint with GM, Jim Koons Management and Lithia Motors Inc. concerning how the companies promoted the inspections of certified pre-owned vehicles.
The FTC alleges that GM’s CPO advertising failed to disclose that some vehicles were subject to previously announced open recalls for
safety issues and that these recalls were unrepaired.
According to the FTC’s complaint, those cars subject to recalls included those afected by GM’s ignitionswitch issue.
Koons and Lithia ofer their own certification product and the FTC found the same ad problems with these programs.
“Safety is one of the biggest considerations for consumers shopping for a car,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection.
consumers about safety-related recalls, which can raise major safety concerns.”
“So companies touting the comprehensiveness of their vehicle inspections need to be straight with
Under the proposed consent orders, which would remain in effect for 20 years, the companies are prohibited from claiming that their used vehicles are safe or have been subject to a rigorous inspection unless they are free of unrepaired safety recalls, or unless the companies clearly disclose the existence of the recalls in close proximity to the inspection claims. These proposed orders will also require the companies to inform recent customers, by mail, that their vehicles may have an open recall.
GONE BUT NOT FORGOTTEN: Workers gather around the last Ford Ranger produced on Dec. 16, 2011, at Ford’s historic Twin Cities Assembly Plant in St. Paul, Minn. Ford is recalling more than 300,000 of these small trucks as part of the latest Takata airbag issue.
Single Store Pays $700,000 to Settle with CFPB
By Ted Craig
Why would the Consumer Financial Protection Bureau go after a single-store dealer in a small northern Colorado city?
Lee Yoder, the owner of Herbies in Greeley, Colo., doesn’t know, even though he spent three and a half years and thousands of dollars fighting the regulator before finally agreeing to a settlement.
That settlement requires Herbies to pay $700,000 in restitution to harmed consumers, with a suspended civil penalty of $100,000. Those consumers were harmed, the CFPB says, by the dealership concealing finance charges and the real cost of credit.
What landed Herbies in trouble was its requirements for financing the purchase of a vehicle through the store’s buy-here, pay-here operation.
Herbies advertised a 9.99 rate on the vehicles it financed, less than half of the state’s maximum rate. But that rate required customers to buy a service contract and pay for a payment assurance device.
The CFPB claims including these charges means a much higher rate than 9.99 percent was actually charged.
Herbies must provide $700,000 to consumers who financed cars with Herbies after Jan. 1, 2012, except those whose accounts were charged of due to default.
The CFPB also requires Herbies to clearly and prominently post the purchase price on all automobiles for sale when ofering auto financing.
Much of this applies less to the store today.
Since the CFPB first took action
against Herbies in 2012, the store has changed its business model to lease-here, pay-here.
Why the CFPB went after Yoder remains a mystery.
Herbies has been operating in Greeley for 16 years.
It was the 2011 Quality Dealer of the Year for the Colorado Independent Automobile Dealers Association.
Yoder said he never had a problem with any state regulator or with private bodies like the Better Business Bureau.
The store has charge-ofs and delinquencies that are half the national average, Yoder said, and 60 per-
cent of its sales come from repeat and referral customers.
“It’s not a scenario where the dealership’s business model was taking advantage of the public,” said Colorado IADA executive director Todd O’Connell.
The CFPB’s release on the settlement says Herbies “ofered financing to about one thousand people each year.”
Yoder says he sells between 60 and 70 units a month on average.
“I thought they were after bigger companies,” Yoder said.
The $700,000 Herbies must pay seems even larger compared to the settlement the CFPB reached with
DriveTime Automotive Group Inc. last year.
That buy-here, pay-here chain paid $8 million to settle the CFPB’s claims of poor collections practices. While that’s more than 10 times what Herbies must pay, DriveTime is 100 times larger.
But the CFPB wanted to send a message said Joel Winston, an attorney with Hudson Cook who represented Herbies.
“They’re starting to bring more cases against used-car dealers because they can,” Winston said.
“If they’re willing to go after one store in Greeley, Colo., everyone is a target.”
Traditional Mall Opens Its Doors to All Types of Automotive Retailers
By Sheila McGrath
Car dealers in Fort Smith, Ark., can now open up shop in a place where they’ll never have to worry about rain, sleet or summer’s blistering heat: Inside a shopping mall.
On Jan. 5, the city’s board of directors approved a new zoning classification for indoor auto and vehicle dealerships.
The new classification includes the sale of used or new automobiles, motorcycles, recreational vehicles and travel trailers. Indoor dealerships will be permitted in the city’s Central Mall as well as a handful of other commercially zoned areas.
The change came about when Jeremy Jones, owner
of River City Cycles in Fort Smith, was looking for a larger location for his motorcycle and ATV sales business.
He looked at a site in Central Mall, the largest enclosed mall in Arkansas. But he soon learned that the mall wasn’t zoned for motorcycle and ATV sales. So he filed a request for a text amendment to the city’s unified development ordinance last fall.
Jones decided against the mall for his business, but his application continued through the city’s approval process and was ultimately granted.
Jones said his followthrough on the matter had more to do with what he saw as government interference
than with a strong desire to do business in the mall.
“The basic point of it was just the changing of laws to make the city better,” Jones said. “You’re limited to where you can put certain types of businesses. We feel that we should be able to go into the mall and open the business we wanted to without being in breach of city ordinances.”
But even though Jones won’t be opening a shop at Central Mall, his request paved the way for someone else to do so.
Any car dealership that might open in Fort Smith’s Central Mall would be allowed to have service and storage areas, as long as those areas were incidental
and subordinate to the primary use of sales and display, according to Wally Bailey, Fort Smith’s director of development services.
Bailey said the new ordinance is based on a similar one already in existence in Fayetteville, Ark., about 60 miles to the north.
“We did some research, and we didn’t have to look very far before we found that the city of Fayetteville had actually experienced this same issue a few years ago and made some amendments to their ordinance similar to what we’re recommending here,” he told the Board of Directors.
To date, no one has opened up an indoor car dealership in Fayetteville, although
some businesses selling upscale motorcycles and motor scooters have taken advantage of the amendment, according to Andrew Garner, the city’s planning director.
“It’s pretty uncommon,” Garner said.
Nor have any applications come in yet for a dealership in Central Mall, according to Tyler Miller, with the Fort Smith planning department.
If and when they do, questions about the logistics of the plan, like how potential buyers would be able to take vehicles out for a test drive, will be handled through the building permit review process, Miller said.
“I don’t think anyone’s going to be taking a test drive in the mall,” he said.
NEWS BRIEFS
Santander Reports Lower Profit
Santander Consumer USA Holdings Inc. announced net income for fourth quarter 2015 of $68 million, compared to third quarter 2015 net income of $224 million and fourth quarter 2014 of $247 million.
Net finance and other interest income was $1.3 billion, up 17 percent.
Total originations were $6.2 billion, up 2 percent.
Serviced for others portfolio was $15 billion, up 47 percent.
Average managed assets were $52.5 billion, up 23 percent.
Cox Invests in F&I Firm
Go Financial and NextGear Capital afliated dealers will soon be able to ofer warranty, insurance and theft recovery products to consumers as a result of Cox Automotive’s investment in SilverRock Holdings LLC.
Cox announced its acquisition of a minority interest in SilverRock Holdings, majority owned by Ernest Garcia and Ray Fidel of DriveTime through their separate company, Oreno Holdings LLC. SilverRock Holdings provides F&I products such as extended vehicle service contracts, global positioning system theft recovery products, guaranteed asset protection products and auto
insurance solutions to consumers through independent and franchise dealers.
The transaction closed on Dec. 31. Terms were not disclosed.
Huntington Continues Growth Streak
Huntington Bancshares Inc. reported that the fourth quarter of 2015 was the eighth consecutive quarter of greater than $1 billion in auto finance originations for the bank.
Automobile loans grew 9 percent year-over-year in the fourth quarter and were up 5 percent from the third quarter.
The indirect auto portfolio did see an increase in charge-ofs from the prior quarter. Bank executives said that was primarily as a result of seasonality.
CalAmp Buys LoJack
CalAmp has entered into a definitive agreement pursuant to acquire all of the outstanding shares of common stock of LoJack for $6.45 per share in an all cash transaction valued at approximately $134 million. Both companies’ boards of directors have unanimously approved the transaction.
Under the terms of the definitive agreement, a wholly owned subsidiary of CalAmp will commence a tender ofer to acquire all of the outstanding shares of LoJack common stock for $6.45 per share of LoJack common stock tendered. Following completion of the tender ofer, the parties will efect a second-step merger pursuant to which all remaining shares of LoJack common stock not tendered in the ofer will be converted into the right to receive the same cash price per share as in the ofer.
The transaction is expected to close during CalAmp’s fiscal 2017 first quarter, subject to customary closing conditions, including regulatory approvals and the tender of a number of LoJack shares that, together with other shares owned or to be acquired by CalAmp and its subsidiaries, represent at least two thirds of the total number of LoJack’s outstanding shares.
CalAmp will fund the acquisition with existing cash on hand.
Credit Acceptance Reports Higher Profit in Fourth Quarter
For the year, consolidated net income was $299.7 million, compared to consolidated net income of $266.2 million in 2014.
GM Financial Finances Fewer Cars
General Motors Financial Company Inc. announced net income of $131 million for the quarter ended Dec. 31, compared to $59 million for the same quarter a year ago.
Retail loan originations were $4.4 billion for the quarter, compared to $4.7 billion for the quarter ended Sept. 30, and $4 billion for the quarter ended Dec. 31, 2014.
Operating lease originations were $5.4 billion for the quarter, compared to $6.2 billion for the prior quarter, and $2.1 billion for the quarter ended Dec. 31, 2014.
The outstanding balance of commercial finance receivables was $8.4 billion at Dec. 31, compared to $8.1 billion at Dec. 31, 2014.
Retail finance receivables 31-to60 days delinquent were 4.2 percent of the portfolio for the quarter. Accounts more than 60 days delinquent were 1.6 percent of the portfolio.
Credit Acceptance Corp. a nnounced consolidated net income of $80 million for the fourth quarter, compared to consolidated net income of $73 million for the same period in 2014.
Published By General Media LLC
USED CAR NEWS (ISSN 1555-7413) is published at 24114 Harper, St. Clair Shores, MI 48080 Phone: 586-772-5200 or 800-794-0760 Fax: 586-772-9400 www.usetdcarnews.com
Charles M. Thomas - Founder (1947-2002)
Lynda R. Thomas, Publisher Colleen Fitzgerald, General Manager
Contributing Writers: Ed Fitzgerald, Jenny King, Sheila McGrath
Advertising: Shannon Colby, Account Manager Marie Hingst, Account Manager
Used Car News is published the first and third Monday of each month.
Subscribers: We print advertisements as sent to us by auctions and other advertisers. It is not possible to verify the correctness of listed vehicles in auction ads. Most lists are partial and all lists are subject to last minute changes by auto auctions, so before travelling a long distance for a particular auto auction event, contact the auction by telephone for a fax of vehicles in the sale.
Columnist: Tony Moorby
Circulation: Helen Thomas
Production: Josie Godlewski, Media Manager Cee Lippens, Web Master & Graphic Designer
Used Car News assumes no guarantees or liabilities concerning the accuracy of any advertisements. All Rights Reserved. Reproduction in any form is prohibited without the written consent of the publisher.
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Ex-Dealer Pleads to Fraud
A former used-car dealer pleaded guilty to multiple counts of theft and forgery stemming from a scheme to defraud more than 30 of his customers out of thousands of dollars.
Beginning in 2011, Tony Roy, owner of Tony Roy Auto Sales in Snake Spring Township, Pa., began to engage in fraudulent business practices that included falsifying records to lenders to show that he had cars on his lot that had already been sold, collecting money for service agreements, warranties, and gap insurance without actually purchasing the policies, and collecting taxes and title fees on behalf of the state without turning those funds over to the Department of Revenue. By the time these schemes were
uncovered, Roy bilked 32 victims, including the state, and racked up a total of $312,635.30 in stolen funds.
“Tony Roy was once a respected businessman but he began to line his pockets at the expense of his lenders, the Commonwealth, and even his own customers,” said District Attorney Bill Higgins.
“In addition to the money he stole from these people, Tony Roy created immeasurable stress and aggravation when new vehicle owners did not receive their vehicle titles or when they attempted to exercise warranties that were never issued. His actions afected many decent hard-working and honest people.”
Roy entered a guilty plea to 28 counts of theft and four counts of forgery. The plea came right before his trial was about to start.
“Tony Roy entered a guilty plea because his stall tactics were no longer working,” Higgins said. “He delayed accepting responsibility for over a year and realized that a jury was going to convict him. Essentially, he entered a guilty plea because he ran out of options.”
He will be sentenced on March 18.
Fewer People Opt to Drive
There has been a continuous decrease in the percentage of those under age 45 with a driver’s license since 1983.
Even the proportion of Americans ages 45-69 with driver’s licenses have declined since 2008, reports the University of Michigan Transportation Research Institute.
Much lower proportions of teens and twentysomethings today have licenses compared to their counterparts in the 1980s, the study finds.
percentage points for those in their 20s, more than eight percentage points for thirtysomethings and nearly three percentage points for those in their 40s.
However, for those in their late 50s and older, the proportion of those with driver’s licenses is up about 12 percentage points since 1983 - although down more than two percentage points since 2008.
The only age group to show a slight increase since 2008 is the
“Overall, the future evolution of these changes will have potentially major implications for future transportation and its consequences.”
Michael Sivak
About 87 percent of 19-year-olds in 1983 had their licenses, but more than 30 years later, that percentage had dropped to 69 percent.
Other teen driving groups have also declined: 18-year-olds fell from 80 percent in 1983 to 60 percent in 2014, 17-year-olds decreased from 69 percent to 45 percent, and 16-year-olds plummeted from 46 percent to 24 percent.
Drivers in their 20s, 30s and 40s also saw their ranks fall as a percentage of their age group population since 1983 – down about 13
70-and-older crowd.
“Overall, the future evolution of these changes will have potentially major implications for future transportation and its consequences,” said Michael Sivak, a research professor in UMTRI’s Human Factors Group.
“Specifically, licensing changes will likely afect the future amount and nature of transportation, transportation mode selected, vehicles purchased, the safety of travel and the environmental consequences of travel.”
Tony Roy
Toyota Agrees to Cap Dealer Participation
Toyota Motor Credit Corp. has agreed to cap dealer mark-up as part of a settlement with the Consumer Financial Protection Bureau and the U.S. Department of Justice.
Toyota Motor Credit will reduce dealer discretion to mark up the interest rate to only 1.25 percent above the buy rate for auto loans with terms of 5 years or less, and 1 percent for auto loans with longer terms.
Toyota Motor Credit is also required to pay up to $21.9 million in restitution to thousands of AfricanAmerican and Asian and Pacific Islander consumers.
where they come from. We commend Toyota for crafting a new compensation system that strikes an appropriate balance for dealers and consumers.”
The regulators had claimed that Toyota Motor Credit violated the Equal Credit Opportunity Act by charging these consumers a higher interest rate for their auto financing as a result of the dealer markup. The CFPB says that these markups were without regard to the creditworthiness of the borrowers.
“Toyota’s reforms will level the playing field to ensure that all eligible borrowers – regardless of their race or national origin – can sign auto loans with fair terms and reasonable interest rates,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division.
“While dealerships deserve fair compensation for the valuable customer service they provide, federal law protects consumers against higher price markups simply because of what they look like or
The regulators say that these practices resulted in thousands of African-Americans being charged, on average, over $200 more for their auto financing, and thousands of Asian and Pacific Islander borrowers were charged, on average, over $100 more for their auto financing.
The investigation did not find that Toyota Motor Credit intentionally discriminated against its customers, but rather that its discretionary pricing and compensation policies resulted in discriminatory outcomes, the regulators said.
Toyota Motor Credit might still move to an alternative dealer compensation model, such as a flat fee.
DEALERS USE MARKETING TO SET THEMSELVES APART MARKETING
By Jeffrey Bellant
Dealer marketing has come a long way from streamers and balloons. Independents now use a host of methods to draw attention to their lots and cars.
Using technology, creativity or simple charity, dealers can boost business and their brands.
Joe Lescota, of the National Independent Automobile Dealers Association, said dealers should forget the idea that they are simply a neighborhood business.
He said their market is now all 50 states.
“Nobody is looking for ABC Used Car lot,” Lescota said. “No one cares. People are looking for a specific car.”
Lescota said third-party websites are one of the most critical tools a dealer can use. It’s the third-party sites like Cars.com, AutoTrader. com, etc., that draw attention to your car, and eventually bring someone to the dealership website.
Lescota said even if dealers are in a rural area, they shouldn’t think that they’re limited to that small area.
“If you have what I want, I’m going to travel,” he said. “The problem is dealers think they are selling cars, but they are really selling solutions.”
Dealers struggle when they fail to distinguish their car from all of the
others, said Lescota, who is NIADA’s director of dealer development.
“Customers are looking for a warranty. They are looking for a history. They are looking for assurances,” he said. “But dealers still advertise the same nonsense, which is air conditioning, automatic, power steering, power windows.
“Big deal. Every car has that.”
Once you get past make, model and color, you still have a lot of choices, Lescota said. But once you list information like, “non-smoker,” “certified” or “warranty,” it narrows down the selection tremendously.
“That’s what dealers have to learn,” he said. “What do you ofer me that no one else can ofer me – besides your cup of cofee and inflatable gorilla on the roof?”
Dealers also waste time once the customer is on the lot by doing a walk around, pointing out features of the car.
“You’re boring me. I know all that. I just spent 13 hours online looking at cars,” he said. “I didn’t come here for your free hot dogs. I came here for a car.”
Lescota said dealers are selling transportation to work, a vehicle for a construction job or a car with enough seating for several children – those are all solutions.
Dealers must use old ideas
in new ways. While it is critical to have photos of your cars online, some dealers have used technology to do something diferent.
Lescota said one technique has advanced past the idea of simple static photos of cars in inventory,
“They use a drone to come down and take (footage) of the vehicle,” Lescota said.
The rise of the Internet offered dealers more than just a new venue for advertising. It provided a chance to create a brand and theme for a dealership.
In Colorado Springs, Mike Bonicelli, president of Nevada Auto Sales, has branded his dealership with the help of a former employee.
“Our website is actually CrazyHerman.com. ‘Crazy Herman’ is a person who worked for me 26 years and retired in 2010. He still does participate with us in all of our advertising, from commercials to appearances.
“Truly, he is a local celebrity. Kids will come in for no
other reason than to meet ‘Crazy Herman,’ get his autograph or get a T-shirt. In 2013, a newspaper had a ‘Best of’ contest (for local businesses) and Herman won for ‘Best Mascot.’ He actually beat out the mascots of the Air Force Academy, the Denver Broncos and others.”
Another way to bring a personal touch to your dealership – apart from inventory descriptions and warranties – is to boost your name by supporting your local community.
Many dealers sponsor Little League teams, driver education programs and charitable causes.
Marc Powell, the 2014 National Quality Dealer, donated a vehicle to a high school student with terminal brain cancer and later raised $5,000 to help pay for her funeral. Michael D’Andrea, 2012 winner, has supported summer youth camps.
Last year’s National Quality Dealer Darla Booher was
involved in the planning, funding and construction of a safe playground park in South Carolina.
While these things don’t directly sell cars, they do sell the dealership as something diferent than the typical churn-and-burn operation that doesn’t care about reputation.
Other dealers use diferent promotions to market their stores.
During tax season, some dealers use tax refund services right inside their showrooms to bring customers in, while other dealers, like Florida’s Scott Lanier, use “$1 down payment” specials to boost sales.
However, Lescota said dealers have to be careful with some payment promotions.
“The first thing that comes to my mind is the word ‘compliance,’” he said.
Lescota said dealers should make sure to measure and test the results of the tools or programs they use.
PEOPLE IN THE NEWS
CarMax Plans for Succession
CarMax Inc. announced that, as the culmination of a multiyear management succession plan, Bill Nash
has been promoted to president and Clif Wood has been promoted to chief operating ofcer.
Tom Folliard plans to retire as chief executive ofcer prior to the end of 2016, at which time it is anticipated that Nash will assume the role of CEO. Upon
Folliard’s retirement, the board of directors expects that he will serve as the non-executive chairman of the board.
Nash was promoted to executive vice president of human resources and administrative services in 2012. He joined CarMax in 1997 as auction manager and was ultimately promoted to vice president of auction services.
Before joining CarMax, Nash, a C.P.A., held a variety of accounting roles at Circuit City.
Wood was promoted to executive vice president, stores, in 2012, where he was responsible for all sales, service, merchandising and business office functions.
In 1993, he joined CarMax from Circuit City as a buyer in CarMax’s first location. Over time, he rose
through the ranks in merchandising and ultimately led the group.
ADESA Names Dealer Relations Director, GM
ADESA announced that Ryan Warzynski has been promoted to executive director of dealer relations.
In this role, Warzynski will manage all of ADESA’s dealer contact centers for vehicle inventory at the company’s auction locations across the country.
He will continue to lead the local auction dealer relations teams throughout the U.S. and will now also manage the company’s national inside sales team located at the Carmel, Ind., ofce.
He will report directly to Keith Crerar, vice president of dealer services.
Warzynski has been with ADESA for more
than 10 years, starting as a dealer sales representative. He has held several roles in the different ADESA contact centers during the past decade.
Warzynski earned his
master’s degree from Northern Illinois University and served for five years with the U.S. Army.
ADESA has named Troy Peterson as general manager of ADESA Chicago.
ADESA Chicago will be located in Hofman
Estates, Ill. The facility will initially cover 65 acres with the option to expand to 150 acres.
Prior to joining ADESA, Peterson worked at Carfax, where he served in a variety of leadership positions including account manager, senior partner development manager and national auction development manager.
Prior to that, he was the regional sales manager, general sales manager and dealer sales manager for Manheim’s Greater Chicago auction.
He also served for three years as assistant general manager for Manheim’s Dallas-Fort Worth auction.
Cox Appoints Exec
Cox Automotive Inc. announced the appointment of Eric Jacobs as senior vice president of corporate development.
In this position, Jacobs will lead strategic business development across Cox Automotive, including mergers and acquisitions. He will also continue to create partnerships that will further the success of Cox Automotive’s client portfolio.
Jacobs was most recently executive vice president, chief financial and administrative ofcer of Dealertrack Technologies Inc., which was acquired by Cox Automotive on Oct. 1. Previously, Jacobs served as senior vice president and general counsel of Dealertrack Technologies and president of Dealertrack Canada.
Prior to working at Dealertrack Technologies, Jacobs was an attorney focusing on corporate mergers and acquisitions and securities law at O’Melveny & Meyers.
Tom Folliard
Ryan Warsynski
RETAIL MARKETS
FLORIDA
Scott Lanier, president/ principal dealer, Credit Cars, Orlando, Fla.:
“We’ve been in business here 53 years. We have one location.
“We keep about 80 to 90 units on the lot. But we have about 150 to 160 in inventory.
“About 95 percent of our inventory comes from independent auctions. The rest comes from new-car dealers and from of-lease programs.
“We sell about 75 cars a month, but we’ll go over 100 in February. Average retail price on the lot is $13,500.
“All we do is buy-here, pay-here.
“Our average term length is 42 months. Our normal down payment is about $1,500, but we’ll get trades.
“In 2015, we were up about 254 units from the previous year. In December 2014, we built a new building on the same property. So we did a big promotion for that, ofering cars for
$1 down. We did that throughout the year.
“Average model year would be 2008 to 2012 and average mileage would be around 80,000 miles. But we’ll go as new as 2015.
“We’re probably 60 percent to 65 percent Asian import and 35 percent domestic. Fewer Hondas, but more Toyotas, more Hyundais, Kias, and Nissans.
“Trucks are expensive in our market, so only 3 percent of our sales are trucks.
Thirty percent of our sales are SUVs and the rest are cars.
“Every vehicle goes through a multi-point inspection. We do that inhouse.
“We do the recon and then every car comes with an 18-month 30,000-mile warranty.
“We have over 1,000 cars under warranty.
“The average recon costs are about $750.
“We advertise through television, email campaigns and we do targeted
Internet (ads).
“The last car I sold was a 2012 Hyundai Sonata. It had 65,542 miles. It sold for $16,995.”
NORTH CAROLINA
Will Davis, owner, G&B Auto, Louisburg, N.C.:
“I generally try to keep around 40 (units). Forty is the target.
“On average I sell about 12 per month.
“On a year-over-year basis, 2015 was down a little bit. I believe the biggest problem that we’re seeing is disposable income, or cash on hand.
“I’ve got two auctions that we mainly use to buy cars. Those are Greenville Auto Auction in Greenville, N.C., and Manheim North Carolina in Kenly.
“We primarily sell buyhere, pay-here. Tax season generally starts up right about now – February and March. But I’m not really (expecting) a whole lot of (tax business) this year.
Some of the people I’ve talked to suggest there’s not going to be a huge influx this year. I saw a little bit of that last year.
“Our average retail price would be under $10,000 –like in the $9,000 to $9,500 range.
“In most cases, the down payment is going to be about $1,000. With the tax, title and registration fees, we try to get $1,200 to $1,500. It’s the type of deal where we get $995, plus taxes and tags.
“Over the past year or so, our term length has gone up to 36 months.
“It used to be in the 28 to 30 month range, but now we’re doing a lot of stuf that’s 32 to 36 months.
“We don’t use starter interrupt or GPS devices. We’ve looked at it and studied it.
“One problem is, we’re in somewhat of a rural area. So the coverage is not there. I’d want (good coverage) to justify the expense of putting those on.
Compiled by Jeffrey Bellant
“Generally, our model years range from 2006 to 2010 – that six to 10-yearold.
“We’re trying to keep mileage under 120,000. That’s somewhat of a challenge.
“That really is coming from the new-car side. When you’re getting sevenand eight-year (loan) terms, it just comes back as an older car with more miles on it.
“Over the past few months to a year, we’ve been getting a lot more competition from the new-car stores who have finance sources that we don’t have access to.
“Our inventory is about 70 percent cars and 30 percent trucks and SUVs. I’d love to carry more trucks, but the prices on those are just absolutely crazy.
“Our cars are 80 percent domestic.
“Average reconditioning cost is $600.
“I recently sold a 2012 Chrysler 200 in a bank finance deal. We sold that for $9,600. It had 88,000 miles.”
WHOLESALE MARKETS
NEW MEXICO
Ray Vickers, owner, Farmington Auto Auction, Farmington, N.M.:
“We opened in 1994. We have two lanes.
“Volumes have been down. They are a little bit down. Dealers are holding on to units as we go into tax season. So we’re down about 10 or 15 percent
“But we’re getting more dealers in the lanes. Plus, our sales percentages are higher than normal. Our sales percentages are around 65 to 70 percent.
“Dealers are still buying with confidence, but the (retail) business hasn’t been that great.
“Our (local economy) really depends on oil and gas, so there’s been a lot of layofs.
“We’re also in the trucking business, since we haul cars. We’re enjoying the low prices, but we don’t have as many cars to haul. So it doesn’t help.
“We draw dealers mostly from New Mexico and
southern Colorado. Our simulcast is also very strong.
“We get a lot of buyers online. We use AWG. We’re a small auction, but we sell a lot more cars online than some other larger auctions.
“I think it’s because of our location that’s of the beaten path. I mean, Albuquerque is three hours away. Instead of driving all the way up here, dealers will call and have us check out the cars for them. Then they will bid online.
“We know we need every buyer we can get. We make it clear to our buyers that they can call our lot people and ask them ‘to check out whether that Explorer has a third row seat’ or whether ‘that car starts cold in morning.’ We’ll check it out. We really work hard to give our online buyers confidence.
“I’d say maybe 60 percent of our vehicles are dealer consignment. The rest are lease and repos. Those are coming from local banks, credit unions and title
loan companies.
“Our average price on the block has gone up to about $6,000, if you don’t include the GSA (units).
“We have a GSA sale every month. We sold almost 1,000 GSA units last year. We’ll run things like SUVs, trucks, school buses, box trucks and heavier dutytype trucks, like two-tons.
“Those volumes will grow as the year goes by. We’ll have 150- to 200-car sales this summer.
“If you include the GSA units our average price is $11,000. But that’s (inflated) because 1/3 of the cars we sold last year were GSA.
“I think we’re going to have an OK year, but not a record-setter.
“I think it will improve after the election.
“Any type of later-model truck is doing well.
“This year we’ve been flooded with oil field trucks because these companies have been cutting back, laying people of and turning their leases in early.”
TEXAS
Dale Martin, general manager, Lone Star Auto Auction, Lubbock, Texas:
“We have seven lanes. We are running 900 to 1,000 cars. We’re up just a few percentage points compared to this time last year, but it’s still early in the year.
“Conversion rates have seen a small decline in the last couple of months. We’re hovering in the 52 to 54 percent range.
“But this is a big oil region, so I think that has something to do with it. Oil has always been boom or bust.
“We have a video salvage sale that we run every week (one hour) prior to the start of our regular sale. We’ll run 50 to 75 a week.
“(We’re drawing) 300 to 350 dealers every week. We haven’t seen a big change in that. We have guys that come from California, Georgia, Oklahoma, Colorado, New Mexico, Arizona – all throughout the Southwest. We even have a guy from Kentucky that comes out.
Compiled by Jeffrey Bellant
“We really try to focus on making every dealer feel like they are part of the family.
“Right now, dealers are all excited about tax season. Refund money is just starting to hit. The dealers are anticipating a good quarter.
“Our auction has a little bit higher percentage of dealer consignment. It’s 65 percent independent dealer consignment. On the commercial side, we get cars from remarketers, credit unions, banks, lease companies – just everything.
“The average price overall is $8,200. I haven’t noticed a change.
“All seven lanes are simulcast with AWG. Interest has been growing. There’s a lot of customer service work that goes into satisfying those online buyers.
“Trucks and sport utilities (are strong). Small sedans do well.
“I haven’t seen anything that stands out as saleproof. There’s a market for just about everything.”
MONTHLY DEALER CONSIGNMENT AVERAGES
COMPACT CAR
Feb 2015 $5,760 100,448
Mar 2015 $5,839 100,800
Apr 2015 $5,851 100,410
May 2015 $5,680 101,407
Jun 2015 $5,418 102,032
Jul 2015 $5,372 101,084
Aug 2015 $5,147 102,741
Sep 2015 $4,932 104,230
Oct 2015 $4,933 103,050
Nov 2015 $4,923 103,246
Dec 2015 $5,017 101,933
Jan 2016 $5,093 101,941
YTD AVG: $5,391 101,751
FULLSIZE CAR
Feb 2015 $4,009 113,963
Mar 2015 $4,240 114,926
Apr 2015 $3,982 115,393
May 2015 $4,103 112,477
Jun 2015 $3,879 113,940
Jul 2015 $3,753 115,209
Aug 2015 $3,866 114,420
Sep 2015 $3,809 113,866
Oct 2015 $3,862 112,994
Nov 2015 $3,733 114,003
Dec 2015 $3,753 114,282
Jan 2016 $3,952 112,814
YTD AVG: $3,949 113,716
LUXURY CAR
Feb 2015 $11,599 99,187
Mar 2015 $12,384 98,339
Apr 2015 $13,143 96,598
May 2015 $12,656 96,794
Jun 2015 $12,182 98,552
Jul 2015 $12,134 98,026
Aug 2015 $11,543 99,066
Sep 2015 $11,175 100,399
Oct 2015 $11,708 98,420
Nov 2015 $11,412 99,303
Dec 2015 $11,861 97,772
Jan 2016 $11,825 97,410
YTD AVG: $12,049 98,133
MIDSIZE CAR
Feb 2015 $6,212 109,104
Mar 2015 $6,389 109,530
Apr 2015 $6,479 108,671
May 2015 $6,298 108,896
ADESA Boston
March 11, 18, 25
508-626-7000
ADESA Charlotte March 3, 17, 31
704-587-7653
ADESA Cincinnati/Dayton March 15 937-746-4000
ADESA Golden Gate March 1, 15, 29 209-839-8000
ADESA Houston March 2, 16, 30 281-580-1800
ADESA Indianapolis March 1, 15, 29
800-925-1210
ADESA Kansas City March 1, 15, 29 816-525-1100
ADESA Lexington March 24 859-263-5163
ADESA New Jersey March 3, 31 908-725-2200
ADESA Tulsa March 11 918-437-9044
ADESA Washington DC March 9 703-996-1100
America’s AA-Chicago March 16
708-389-4488
Brasher’s Salt Lake AA March 22
801-322-1234
Columbus Fair AA
March 16, 23 614-497-2000
Manheim Atlanta March 2, 3, 17, 30, 31 404-762-9211
Manheim Dallas March 9, 23 877-860-1651
Manheim Denver March 9 800-822-1177
Manheim Detroit March 3, 17, 31 734-654-7100
Manheim Fredericksburg March 10, 24 540-368-3400
Manheim Milwaukee March 9, 23 262-835-4436
Manheim Minneapolis March 2, 30
763-425-7653
Manheim Nashville March 16, 22, 23 877-386-5004
Manheim Nevada March 18 702-361-1000
Manheim New Jersey March 9, 23 609-298-3400
Manheim New Orleans March 23 985-643-2061
Manheim Orlando March 1, 8, 15, 22, 29
800-337-8491
Manheim Pennsylvania March 3, 4, 17, 18, 31 800-777-2053
Manheim Phoenix March 3, 10, 17, 24, 31 623-907-7000
Manheim Pittsburgh March 9 724-452-5555
Manheim Riverside March 8, 10 909-689-6000
Manheim Seattle March 2, 30 206-762-1600
Manheim Southern California March 3, 17, 31 909-822-2261
Southern AA March 9 860-292-7500
Choose Chase on ADESA.com and OVE.com for quality bank-sourced vehicles. Contact auctions directly for current sale information.
ADESA Boston March 18 508-626-7000
ADESA Golden Gate March 1, 29 209-839-8000
Manheim Atlanta March 2, 30 404-762-9211
Manheim Dallas March 9 877-860-1651
Manheim Milwaukee March 9 262-835-4436
Manheim Nashville March 16 877-386-5004
Manheim Orlando March 8 800-337-8491
Manheim Pennsylvania *March 3,17, 31 800-777-2053
Mazda Capital Services
ADESA Boston March 11, 25 508-626-7000
Manheim Riverside March 10 909-689-6000
ADESA Golden Gate March 15 209-839-8000
ADESA Houston March 2, 30 281-580-1800
Columbus Fair AA March 23 614-497-2000
Manheim Atlanta March 3, 31 404-762-9211
Manheim Detroit March 3, 17, 31 734-654-7100
Manheim Fredericksburg March 24 540-368-3400
Manheim Milwaukee March 23 262-835-4436
Manheim Nashville March 23 877-386-5004
Manheim New Jersey March 9, 23 609-298-3400
Motors Finance
ADESA Boston March 25
508-626-7000
Brasher’s Salt Lake March 22 801-322-1234
Columbus Fair AA March 16 614-497-2000
Manheim Dallas March 23 877-860-1651
Manheim Orlando March 15 800-337-8491
Manheim Pennsylvania March 4, 18 800-777-2053
Manheim Pittsburgh March 9 724-452-5555
Manheim Riverside March 8 909-689-6000
Manheim Seattle March 2, 30 206-762-1600
Manheim Detroit March 3, 17, 31 734-654-7100
Manheim Fredericksburg March 10 540-368-3400
Manheim Milwaukee March 9 262-835-4436
Manheim New Jersey March 23 609-298-3400
Manheim Orlando March 8 800-337-8491
Manheim Pennsylvania March 18 800-777-2053
Manheim Pittsburgh March 9 724-452-5555
Manheim Seattle March 2, 30 206-762-1600
Manheim Southern CA March 17 909-822-2261
Southern AA March 9 860-292-7500
The tradename “Subaru Motors Finance” and the Subaru logo are owned / licensed by Subaru of America, Inc. and are licensed to JPMorgan Chase Bank, N.A. (“Chase”). Retail/ Loan 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 Limited and any use by Chase is under license. Retail / Loan a nd lease accounts are owned by Chase.
All of a sudden, Nashville has become known as the Mecca for ‘hot chicken’ –who knew? For the longest time, anywhere south of the Mason-Dixon Line could lay claim to the best fried chicken. Apparently, according to the TV now, Memphis now carries the torch for the South when it comes to fried chicken. That came as a total surprise as I thought barbeque was one of its major claims to fame.
It’s funny how restaurants develop reputations for certain foods – The Rendezvous in Memphis boasts some of the best barbecued ribs anywhere.
There’s a chap on the Food Network who visits various food emporia around the country reputing to be at the bottom of the food chain, but he claims those eateries provide delightful delectations. Curiosity has driven me to a number of his recommendations only to be miserably disappointed with the results.
On the TV, this spikyhaired guy consumes more food that any normal human being could eat in a week and he does it at one sitting – or should I say standing. His
Absolute tosh! Someone’s idea of ‘falling of the bone’ was way of on the day I visited. I looked like a beaver felling an aspen tree for all the gnawing that was taking place. The ribs had never been anywhere near a barbecue of any description and ne’er a whif of smoke. An oven and some secret rub were responsible for what little flavor exuded from these over-salted oferings served with a cloying pair of sauces that stuck to your teeth like a sweater on a winter’s day. Marketing is everything.
By Miles Mellor
elbows stretched akimbo, hands holding something akin to the size of a football, he approaches his victim like Jaws on Captain Quint. If I ate the types and quantities of food he does I’d need a mobile coronary unit to follow me around.
Anyway, back to fried chicken. In my mind, the best fried chicken comes from a place called Keaton’s Barbecue near Statesville, N.C. My longtime friend Larry Hedrick drove me to this backwoods hideaway, occupying what used to be a gas station. The parking lot was full – mostly with posh cars including a Rolls Royce on the night we arrived. The line was long and once the food was ordered at the counter a stafer told us where to sit, sharing a table with total strangers, family style. The food is served with no ceremony and is so delicious that when chicken juices are dribbling down your elbows, you’re allowed to use a sink in the corner of the room
with a roll of paper towels for convenience. This was years ago and I’ve never forgotten it.
My wife and I sometimes take a lunch date to try out places we’ve never been locally.
Being a Brit, I love a good curry and we are blessed with a few good spots around here. I visit one every Friday night with another longtime friend, Doug Walton. Terry can’t stand the stuf. I have learned that curries don’t have to be hotly spiced to be good. Terry just doesn’t like the flavor. But she loves spicy food – she’d think nothing of eating left-over chicken smothered in ghost pepper sauce – for breakfast.
So we snuck out to a place called Big Shakes for hot chicken. I don’t know where the name came from, it must have something to do with
the atomic consequences of anyone ordering the “Executioner”, the hottest of their escalating heat levels. If you eat three chicken tenders at this level within 10 minutes, your meal is free and you get a $50 certificate. What they really need is to have an ambulance standing by – you have to sign a waiver if you order this one. Terry got the next one down and I chickened out (the pun was absolutely necessary) and had catfish.
They say ladies don’t sweat, they perspire. Terry looked like she was leaking and needed a fire hydrant to douse the internal inferno. Nashville’s been host to hot chicken for decades, but the secret only just made its way out of the black neighborhoods recently. It’s so good, no wonder they kept it a secret.
14. Measure of current 15. Nissan compact SUV 16. Ford muscle car
18. Engine inventor
20. Durant made this car in the 20s
21. Air-pressure meas. 22. St Petersburg’s state, abbr.
23. Ford model 26. Letter postscript
Tony Moorby
DEALER SERVICES
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March
1
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Proft Centers [Product Showcase Advertorial]
Deadline: April 14
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NABD Convention Issue
Deadline: May 5
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NIADA Convention Issue Deadline: May 26
AROUND THE BLOCK
AUCTION BRINGS GIFTS TO CHILDREN
On Jan. 7, Manheim donated bicycles and joined the mayor in a city-wide caravan distributing gifts to children living in underprivileged communities throughout Toa Baja, Puerto Rico.
kids and their families that were waiting for the arrival of the mayor’s float.”
Hundreds of children from underprivileged communities such as Palo Seco, Punta Salinas, Villa Marisol, Sabana Seca, Ingenio, and Candelaria, among others, went to their respective neighborhood’s basketball courts and community centers to receive gifts from the hands of the Wise Men.
The colorful local celebration was sponsored by the municipal government. Mayor Vega Borges said that his purpose with this event was to spread joy and happiness during the most traditional period of the holiday season.
Compiled by Jeffrey Bellant
Eastern Chapter Wins NAAA Title
The Eastern Chapter of the National Auto Auction Association has won the NAAA Political Action Committee Cup Challenge for the third consecutive year after generating $27,850. The PAC Cup will be awarded to the Eastern Chapter Board of Directors during the NAAA/CAR Conference next month in Las Vegas.
The PAC Cup Challenge is designed to spur fundraising eforts. The winning chapter earns its name on a trophy. The teams raised more than $59,000 this year.
Charles Nichols, CEO of Bel Air Auto Auction and president of the Eastern Chapter, said he was honored that his chapter won.
The Manheim Caribbean team was participating in a special event called Three Kings Day. In accordance with the local tradition, the Three Kings bring gifts to the children in the community.
Approximately 35 percent of Manheim Caribbean’s workforce resides in Toa Baja.
“We wanted to make this year special for the children,” said Nelson Acosta, Manheim Caribbean general manager. “What struck me the most was the number of
The Manheim operation attracts approximately 250 independent and franchised dealers to weekly sales.
“Perhaps it is because we are so close to Washington, D.C., and people here understand the importance of lobbying that we again lead the NAAA in our fundraising eforts,” Nichols said.
We invite news items and top-quality photos from our readers to be considered for “Around the Block.” Please include the name of a contact person and a telephone number. Send items and photos to: Jeffrey Bellant. Mail: Used Car News, 24114 Harper Ave., St. Clair Shores, MI 48080. Fax: (586) 772-9400 e-mail: jeff@usedcarnews.com
FUN IN THE SUN: Miss Toa Baja Teen, from left, with Manheim Caribbean’s Nelson Acosta,; Rep. Julio Santiago, Mayor Anibal Vega Borges, and others in Toa Baja, Puerto Rico.
