Brasher’s Salt Lake, Brasher’s Sacramento, Brasher’s Portland, Brasher’s Boise, Brasher’s San Jose, Brasher’s Northwest, Brasher’s Reno and Brasher’s Fresno. Brasher’s key corporate and local auction personnel will maintain leadership roles across the Brasher auctions.
“The Brasher family is one of the most highly respected families in our industry,” said KAR CEO
Brasher’s also provides floor plan financing to its customers and has a loan portfolio of approximately $55 million.
“For 67 years, Brasher’s has been synonymous with outstanding auto auctions,” said John Brasher, speaking for his family. “We take that commitment to our employees and our customers personally, and do not approach this sale of our auc-
lion accordion feature of its existing $250 million senior secured revolving credit facility, resulting in an expansion of this credit facility to $550 million. There were no other changes to the credit facility’s terms or conditions.
The closing of the transaction is subject to customary conditions, including the expiration or termination of the Hart-Scott-Rodino wait-
ing period. KAR expects to finance the transaction with available cash and proceeds from its revolving credit facility. The transaction is expected to close in the first quarter of
“Along with increasing ADESA’s footprint in three new states, the addition of Brasher’s enhances ADESA’s physical and online buyer bases,” said ADESA CEO Stéphane St-Hilaire.
The only overlap comes in Sacramento, Calif. An ADESA spokesperson said that as of now there are no changes, and it is business as usual for ADESA and Brasher’s auction sales in Sacramento.
ADESA is buying the eight auctions currently owned by the Brashers family. The Brashers entered the auction business in 1949, when Frank Brasher opened the
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Industry Leader Discusses Change at University
By Jeffrey Bellant
MIDLAND, Mich. – Janet Barnard, president of Manheim North America, spent time chatting with students and industry professionals following the Northwood University/Cox Automotive Interactive Dealer Summit here Feb. 18.
The summit was completely student-run and received great marks from Barnard.
“This is our inaugural event,” she said. “Our company has done interactive dealer summits around the country for a number of years, but we’ve never held one here. So it was a bit of an experiment.”
Barnard said all of the participants will have follow-up discussions and look toward a future event.
“We’ll decide what worked well and what we’d like to do differently,” she said. “I’m confident we’ll do it again and that it will be different than it was today, because we’ll have learned something.”
Barnard joined fellow Cox executives for a panel discussion during the summit with its “Get Connected” theme.
Despite all the talk of online technology, Barnard sees the continued viability of physical auction locations for years to come.
“We also are looking well beyond that to a broader range of services – from retail ready reconditioning to transportation and logistics, inspection services that can be offered digitally as well as physically – and converging those experiences to make them feel the same,” she said.
Barnard has been with the Cox companies for 27 years, after originally starting out in – of all things –bridge construction.
“When I first came in, people would say, ‘you must be one tough lady,’” she said. “But after you’ve spent 23 years taking calls from people who’ve had their cable disconnected, you’d be amazed at the wrath you get.”
Barnard said it all builds character.
“I started as a kid with Cox Communications not too many years after I got out of school. I was starting out in what was then cable.”
So she saw Cox Communications experience the shift from cable to broadband.
“I really feel honored to have been able to go through (these changes) and lead through an industry transformation,” she said. “Now after I walk into the automotive side, we’re doing it again.”
“Those fundamental skills that I learned the last time around are the very same thing that I apply here. It’s a good thing.
“I don’t do anything I’m not passionate about. I wouldn’t be here if I didn’t love this business and the people in it.”
Photo by Jeffrey Bellant
CENTER STAGE : Janet Barnard, president of Manheim North America, discusses industry issues on a panel at the recent Northwood University/Cox Automotive Interactive Dealers Summit in Midland, Mich.
NEWS BRIEFS
Sonic Sets Pre-Owned Record
Sonic Automotive Group Inc. reported record fourth quarter preowned unit sales of 28,220 and gross profit of $38.8 million.
The company’s stand-alone EchoPark used-car stores retailed 764 units.
Sonic plans for two new EchoPark stores to open in the Denver market in the first half of 2016.
Two more will be added in the first part of 2017.
The company also has plans in place to add additional stores in at least two diferent markets beginning in the fourth quarter of 2016 depending on real-estate closing dates.
CarMax Invests in Digital
CarMax Inc. announced plans to open a new digital and technology innovation center in downtown Richmond, Va.
During the next few months, CarMax also plans to hire more than 50 associates for technology and digital positions, some of whom will work in this new location.
CarMax is growing and plans to open 13-16 new stores nationwide each year for the next two years, leading to home ofce growth and new technology positions in support of stores and strategic initiatives.
To address this growth, CarMax plans to lease approximately 26,000 square feet in a mixed-use commer-
MILESTONES
John Sullivan
John Sullivan, a former board member of the Michigan Independent Automobile Dealers Association, died Feb. 20. He was 63.
Sullivan was the Michigan representative for Wynn’s Warranty. He also had several family members who worked in the car business.
“He loved people, loved the car
business,” said longtime friend Fred Wagner.
Sullivan was born in Detroit and graduated from Redford St. Mary’s High School.
In 2003, Sullivan and his wife, Debbie, adopted their son, Marcus, from Guatemala.
Sullivan was diagnosed several years ago with an autoimmune disease that afects the liver.
cial building.
Open technology and digital positions include a range of roles such as application architects, UX designers, security analysts and software developers. They will be charged with using innovative technology to enhance the e-commerce capabilities that CarMax ofers customers.
The company continues to invest in physical properties, as well. CarMax recently opened stores in Illinois and Georgia.
CPS Slows Contract Purchases
Consumer Portfolio Services Inc. announced earnings of $9 million for the fourth quarter. This compares to net income of $8 million in the fourth quarter of 2014.
Revenues for the fourth quarter were $95.3 million, compared to $83.5 million for the fourth quarter of 2014. Total operating expenses for the fourth quarter were $79.5 million, compared to $69.1 million for the 2014 period.
During the fourth quarter of 2015, CPS purchased $269.2 million of new contracts compared to $287.5 million during the third quarter and $264.4 million during the fourth quarter of 2014. The company’s managed receivables totaled $2.031
billion as of Dec. 31, an increase from $1.941 billion as of Sept. 30 and $1.644 billion as of Dec. 31, 2014.
Annualized net charge-ofs for the fourth quarter were 6.23 percent of the average owned portfolio as compared to 6.44 percent for the fourth quarter of 2014.
Delinquencies greater than 30 days (including repossession inventory) were 9.53 percent of the total owned portfolio as of Dec. 31, as compared to 7.18 percent as of Dec. 31, 2014.
Avis Expands Sales to Consumers
Residents of Missouri and Oklahoma can now test-drive and purchase vehicles from Avis Car Rental and Budget Car Rental through the expansion of Avis Budget Group’s consumer car sales program. Customers can shop online at www.avis.com or www.budget.com and schedule their “ultimate test drive” to enjoy the full experience of driving a vehicle of their choice. The ultimate test drives are free-ofcharge for two hours or can be as long as three days for a rental fee. If the customer decides to purchase the vehicle, the base rental fee will be refunded after the purchase is completed.
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.
Used Car News assumes no guarantees or liabilities concerning the accuracy of
Columnist: Tony Moorby
Circulation: Helen Thomas
Production: Josie Godlewski, Media Manager Cee Lippens, Web Master & Graphic Designer
Reproduction in any form is prohibited without the written
Consumer Tech Complaints Hurt Reliability Scores
Problems with technology continue to afect vehicle reliability, according to the J.D. Power 2016 U.S. Vehicle Dependability Study.
The number of problems with infotainment, navigation and invehicle communication systems — collectively known as audio, communication, entertainment and navigation, or ACEN — has increased and now accounts for 20 percent of all customer-reported problems in the study.
ACEN is now the most problematic area on most vehicles and is the cause of the industry’s 3 percent year-over-year decline in vehicle dependability.
“The increase in technology-related problems has two sources,” said Renee Stephens, vice president of U.S. Automotive at J.D. Power. “Usability problems that customers reported during their first 90 days of ownership are still bothering them three years later in ever-higher numbers.
“At the same time, the penetration of these features has increased year over year.”
The problems most often reported by owners are Bluetooth pairing/ connectivity and built-in voice recognition systems misinterpreting commands.
Navigation systems difcult to
use and navigation system inaccuracy are also among the 10 most frequently reported problems.
While automakers, suppliers and even the U.S. government are enthusiastically moving toward putting fully autonomous vehicles on the roads, consumers need to have confidence in the technologies currently in vehicles before they will be willing to take their hands of the wheel of self-driving cars.
“If you think about the technology problems from the study in the context of conversations around autonomous vehicles, the industry clearly has more work to do to secure the trust of consumers,” Stephens said.
“Right now, if consumers can’t rely on their vehicle to connect to their smartphone, or have faith that their navigation system will route them to their destination, they’re certainly not yet ready to trust that autonomous technology will keep their vehicle out of the ditch.”
The number of engine/transmission problems decreases to 24 PP100 in 2016 from 26 PP100 in 2015.
Lexus ranks highest in vehicle dependability among all nameplates for a fifth consecutive year, with a score of 95 problems per 100 vehicles.
Porsche (97 PP100) follows Lexus
in the rankings, moving up from fifth in 2015.
Following Porsche in the rankings are Buick (106 PP100), Toyota (113 PP100) and GMC (120 PP100).
General Motors Co. receives eight segment awards and Toyota Motor six.
GM models receiving an award include the Buick Encore; Buick LaCrosse; Buick Verano; Chevrolet Camaro; Chevrolet Equinox; Chevrolet Malibu; Chevrolet Silverado
Other models to receive segment awards are the Fiat 500; Honda Fit; Mercedes-Benz GLK-Class; Mini Cooper; MINI Coupe/Roadster; and Nissan Murano.
The overall industry average is 152 PP100 this year, compared with 147 PP100 last year.
HD; and GMC Yukon. Toyota awardees include the Lexus ES; Lexus GS; Lexus GX; Toyota Prius v; Toyota Sienna; and Toyota Tundra.
Salesman Dies on Test Drive
A CarMax salesman was killed on a test drive when the car he was traveling in crashed into a tree.
According to police in Ontario, Calif., Warren Smale, 43, was riding along on a test drive with Alex Demetro of Union City in a red Corvette at around noon on
Feb. 23. Witnesses stated that the car was being driven at a high rate of speed and the driver lost control just prior to the collision.
Smale was immediately transported to San Antonio Community Hospital in critical condition and was later pronounced dead.
Demetro was arrested and charged with vehicular manslaughter and felony driving under the influence of drugs.
CarMax released a statement that read: “Our hearts and prayers go out to our associate’s family.”
CAR CONVENTION
AUCTIONS GO FROM UGLY DUCKLING TO BEAUTIFUL SWAN
The fairy tale from Hans Christian Andersen could aptly reflect the transformation for the better of today’s auto auction industry.
It used to help play a role in some questionable resale practices and has grown to provide a valued cornerstone of openmarket vehicle redistribution.
The used-car industry, as a whole, used to be the butt of jokes, epitomizing the sleaziest of any businesses, populated by equally dodgy people. Operating under the broad umbrella of “caveat emptor,” or buyer beware, the onus was on the private individual to seek out a good used car from the myriad of malpractices foisted on an uncontrolled and largely unregulated business. Few were well informed enough to fully understand the breadth and depth of deviant entrepreneurs willing to lie, cheat and steal from this ignorant audience, spending billions of dollars a year. The smallest share of the action could be extremely rewarding for those dealers willing to take very small risks.
It seems almost impossible these days to appreciate the amount of bare-faced misrepresentation that wooed buyers, desperate to believe whatever they were told, into handing over well-earned cash for a good used car.
The most handsome and easily made profits came from “clocking,” the practice of rolling back the mileage recorded on a flimsy mechanical odometer. Only slightly harder was the necessity to alter a vehicle’s title to reflect the vehicle’s new-found youth. Some alterations were so idiotically flagrant, using an eraser and ink pen, but passed muster under the not-so-watchful eyes of
licensing authority employees who could not have cared less. Or even worse, were paid to process the illicit paperwork. I heard of one New Jersey ofce
Tony Moorby
new homes. It was far from unusual to see cars bought from Chicago to Alabama and then back north again, newly invigorated with lower miles, and
• 40-year veteran of the industry
• President from 1997–2000 of ADT Automotive
• Served as ADESA’s executive vice president of sales and marketing
• Moorby & Associates 2006–present
• Awarded the Ring of Honor by NIADA
• NAAA Hall of Famer
where the dealers would slip a twenty or even a fifty dollar bill into a ball point pen after signing the altered title then handing both back to the clerk for “processing.” The clerk would relieve the pen of its payload (pun intended) later that day.
The auction industry didn’t pay much heed to the corporate fleet business in those days as it didn’t really have a good audience of dealers to absorb high-mileage cars. An interloping layer of fleet dealers would buy the cars, some having “spifed” the fleet manager or other seller, clock the cars and alter the titles and then introduce the cars to the market, often outside their own, to find
sold in Detroit or Cleveland and the like. A41 was a wellworn road for car transports.
Auctions at the confluence of a number of interstates were attractive to these sellers and buyers alike. Many auctions grew in the most out-of the-way places to facilitate clocking before resale. Eventually, some auction operators were drawn to do it for themselves and even charged for the service. Of course, the transaction recap sheet showed some other service being performed such as pin-striping or afxing new hubcaps.
Whilst all this nefarious activity was profitable for those involved, the practices kept the better end of the car business
out. New-car dealers shunned the auctions unless they had a used-car manager who was wise to the events. Manufacturers didn’t use them directly and the public, by regulation for the most part, was precluded from attending.
The auctions provided a closed and cozy environment that most people knew nothing about.
Nevertheless, the efciency of auctions was and still is widely acknowledged as the market with the best and broadest reach – after all, the oldest profession was facilitated by the second-oldest!
Car auctions directly descended from farm auctions; notably cattle and tobacco. Buyers and sellers bought and sold at the bid price, settled up directly with one another and paid the auctioneer a separate commission for putting it all together. Occasionally a buyer’s check would bounce or a seller couldn’t produce a clear title so the auctioneers took a true mercantile agency position – in the middle – where the seller gave the title to the auctioneer ahead to assure its quality and the auctioneer took the risk of taking a check from the buyer and paying the seller from those funds, less his commission. In England, the seller wasn’t paid until the buyer’s check cleared giving a cash flow float to the auction house. Here in the U.S. the seller is paid on the day of the sale, creating a negative cash flow for the auction. Whoever came up with that idea should have
been strung up by his thumbs! In order to give more confidence to both parties, auctions started to issue guarantees of title and good funds. The early auction association was called the National Auto Auction Protection Association, comparing notes on bad dealers and raising alerts to awkward situations around the country. Part of that protection was also provided by a new entity from an associate member, Auction Insurance Agency, who for a premium would guarantee checks and titles. They still do today and are considered to be one of the best supporters of the industry lending new ideas and opportunities for growth of the whole business.
Auction Insurance Agency was a big proponent of the Truth-in-Mileage Act of 1991 and has helped develop vehicle histories, along with others, so vehicle descriptions today are truer and more accurate than ever.
They also provide a national database of dealers’ auction registration details so dealers don’t have to re-register every time they visit a new auction. The industry itself promotes better descriptive details of its products and along with the Feds, and all the new people that now willingly use the best distribution capability, online or otherwise, the auto auction industry is as elegant an economic model as could be found anywhere.
A beautiful swan from an ugly duckling. Hopefully everyone lives happily ever after.
Chrysler Faces Feds’ Scrutiny for Gear Shifts
DETROIT (AP) – Electronic gear shifters on some newer Fiat Chrysler SUVs and cars are so confusing that drivers have exited the vehicles with the engines running and while they are still in gear, causing crashes and serious injuries, U.S. safety investigators have determined.
The National Highway Trafc Safety Administration, in documents posted recently, has doubled the number of vehicles involved in an investigation of the problem, but it stopped short of seeking a recall. The agency found more than 100 crashes and over a dozen injuries, mostly in Jeep Grand Cherokees.
Agency tests found that operating the center console shift lever “is not intuitive and provides poor tactile and visual feedback to the driver, increasing the potential for unintended gear selection,” investigators wrote in the documents. They upgraded the probe to an engineering analysis, which is a step closer to a recall. NHTSA will continue to gather information and seek a recall if necessary, a spokesman said.
The investigation could determine just how much automakers can change the way cars operate when they introduce new technology, and how far they can stray from conventional ways of controlling vehicles that drivers are accustomed to.
Jake Fisher, director of auto testing for Consumer Reports, expects more problems and investigations as automakers continue to roll out new electronic controls that are unfamiliar to drivers. “I think the manufacturers need to be much more responsible as they try these new technologies,” he said.
The government’s probe now covers more than 856,000 vehicles including the popular Jeep Grand Cherokee SUV from the 2014 and 2015 model years and the 2012 through 2014 Dodge Charger and Chrysler 300 sedans with 3.6-litre V6 engines.
In the vehicles, drivers pull the shift lever forward or backward to select gears and the shifter doesn’t move along a track like in most cars. A light shows which gear is selected, but to get from Drive to Park, drivers must push the lever forward three times.
The gearshift does not have notches that match up with the gear you want to shift into, and it moves back to a centered position after the driver picks a gear.
The vehicles sound a chime and issue a dashboard warning if the driver’s door is opened while they are not in Park. But investigators found that the push-button startstop feature doesn’t shut of the
engine if the vehicles aren’t in Park, increasing the risk of the vehicles rolling away after drivers have exited.
“This function does not protect drivers who intentionally leave the engine running or drivers who do not recognize that the engine continues to run after an attempted shut-of,” investigators wrote.
Thus far, the investigation has found 314 complaints, 121 crashes and 30 injuries from the problem.
Three drivers reported fractured pelvic bones, while four others needed to be hospitalized with a ruptured bladder, fractured kneecap, or severe leg trauma.
Fiat Chrysler says it is cooperating in the probe. The company changed the shifters in the 2016 Grand Cherokee and 2015 Charger and 300 sedans so they function more like people are used to. But FCA said it did so to increase customer satisfaction and not for safety concerns.
Manheim Adds Sale
Manheim’s newest Ohio operating location, Manheim Cleveland, was set to open March 2.
This will be Manheim’s third site in Ohio, including Manheim Cincinnati.
facility will feature three lanes with Manheim Simulcast. The operation will ofer limited mechanical and reconditioning facilities, including post sale inspections.
“We are opening in response to requests from local dealers for an auction that serves the Cleveland market,” says Alan Lang, vice president of Manheim Local & Mobile.
Manheim Cleveland will primarily service independent and small franchised dealers. Located on seven acres, the 2,000-square-foot
Weekly sales will take place on Wednesdays at 9:30 a.m. with approximately 500 vehicles expected to run through the lanes each week. Opening day events included dealer specials, free food, prize drawings and giveaways. In addition, Manheim Cleveland auctioned a red car with proceeds going to the Cleveland Red Cross chapter.
Stockwave – from
Pollack said the system places no preference on vehicles sold through Manheim. Cox Automotive owns both Manheim and vAuto.
“It only takes the dealer’s needs into account when making recommendations,” Pollack said.
The system also provides dealers with a maximum bid for any vehicle.
Some critics say vAuto causes dealers to all buy the same cars.
This raises the question if Stockwave will just make that worse.
Pollack dismisses those criticisms. He said what these systems do is
page 10
show dealers the best inventory for their individual businesses.
One dealer might want a profit of $1,500. Another wants $2,000.
These two will buy diferent cars at diferent prices.
“You really see when you look at the data that what any two dealers need is very diferent and what they can pay is diferent,” Pollack said.
Even with millions of more vehicles coming on the market this year, finding those right cars will remain a challenge, Pollack said.
ARE
CARS DAMAGED WHEN
GET
IS YOUR CUSTOMER NOT COOPERATING ON A CLAIM? DID YOUR CUSTOMER RECEIVE A CLAIM PAYMENT AND KEEP THE MONEY?
CHRIS BRADLEY
Used Car Director Titus-Will Automotive Group
Olympia, WA
“In an ever evolving and highly competitive used car environment, what sets you apart is how you treat your consumer. DAA Seattle gets this right by recognizing that their greatest asset is their customer.”
DAVID BLAKE General Manager DAA Seattle
Auburn, WA
“At DAA Seattle, we’re committed to a culture that is enriched by the contributions of our partners. We recognize that our partnerships are our greatest achievement and we are truly invested in our customers’ success.”
Sham Site Poses as Dealer
Better Business Bureau of Minnesota and North Dakota was alerted recently to a case of identity theft targeting Import Auto Sales LLC, a used-car dealership located in St. Louis Park, Minn.
A fraudulent website with a similar business name using the company’s physical address attempted to solicit deposits via prepaid debit cards by deceiving consumers nationwide into thinking they were transacting with Import Auto Sales.
BBB has been able to help get the bogus website taken down by working with the Web registrar unknowingly hosting the site.
“Business identity theft is an issue which can strike any company, making victims of honest business owners and unsuspecting consumers,” said Dana Badgerow, CEO of BBB of Minnesota and North Dakota. “It highlights the importance of both vigilance and due diligence.”
Import Auto Sales, LLC, in the Twin Cities.
BBB of Minnesota and North Dakota launched an investigation, reaching out to Import Auto Sales and inserting custom text in BBB’s Business Review for the company, thereby alerting consumers to potential issues with the fraudulent website.
At the same time, BBB also contacted the company hosting the site and shared concerns with them.
While the fake website was operational, BBB noted a spike in inquiries for Import Auto Sales, likely due to individuals trying to research import-auto-store.com.
BBB received a phone call from a consumer who was considering purchasing two Jet Ski personal watercraft from the bogus entity. However, a request to send $1,000 via OneVanilla prepaid Visa cards made the customer suspicious.
The fraudulent website (importauto-store.com) first came to the attention of the local BBB through a report from BBB in Columbia, S.C. That BBB was monitoring another fraudulent website, when they noted a similarly suspect website –presumably operated by the same scammers – had been created using information appropriated from
After speaking with BBB, the customer indicated they would be walking away from the transaction. The owner of Import Auto Sales also reported that a couple from Wisconsin drove to their lot thinking they’d been dealing with the legitimate business, when in fact they were in contact with the fraudulent online entity.
When you’re searching for a wide variety of the right vehicles for your customers, look to a nationwide industry leader. Look to Chase.
Chase is your source for:
A broad range of vehicle makes and models — from economy to luxury — upstream and through preferred auctions nationwide.
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Put Chase to work for you. Visit ADESA.com and Manheim.com.
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1Subaru, the Subaru logo, and Subaru Motors Finance are trademarks of Subaru of America, Inc. (“Subaru”) and any use by Chase Bank USA, N.A. (“Chase USA”) and JPMorgan Chase Bank, N.A. (“Chase”) is under license. Retail / Loan accounts are owned by either Chase or Chase USA and lease accounts are owned by Chase.
Jury Imprisons Fraudster
A Cincinnati man has been sentenced to serve 19 years in prison and ordered to pay more than $142,000 in restitution for running an $816,000 scam that defrauded car dealerships and financial institutions in Ohio and Kentucky.
In January, a jury found Jerry Agostini Jr. guilty of 31 counts in-
theft and forgery.
Agostini defrauded businesses during a 13-month period between 2014 and 2015.
He used aliases, fictitious names, a dummy corporation and false financial documents to secure trucks, equipment, and checks totaling $816,554.
“I’m often amazed at how much ort these scam artists put into developing their criminal schemes, as opposed to using their talents to benefit society,” said Warren County Prosecutor David P. Fornshell.
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PEOPLE IN THE NEWS
Manheim Names Vice Presidents
Manheim has appointed Doug Keim as senior vice president of client experience. In this role, he will
develop and execute initiatives designed to improve dealer and commercial client satisfaction and profitability.
Keim will report to Janet Barnard, president of Manheim North America.
Keim most recently served as Cox Auto-
motive’s vice president of strategic growth for the Media Group and was responsible for the management and growth of Trade-In Marketplace and Haystak Digital Marketing.
Before joining Cox Automotive, Keim held numerous executive
management and leadership positions with Chep International, a global supply chain and logistics management company; SmurfitStone Container Corp., a global recycling and
packaging solutions company; and GeorgiaPacific, a consumer and forest products company.
Keim received his master of arts in counseling from Colorado Christian University and Bachelor of Arts in behavioral science from Messiah College.
Manheim has appointed Kevin Chartier as vice president of commercial sales.
In his new role, Chartier will focus on the overall growth and development of Manheim’s commercial business, including managing sales eforts and fostering strategic relationships with commercial clients.
Chartier joins Manheim from Nissan Corp., where he served most recently as remarketing director.
Chartier holds a bachelor’s degree in business administra-
tion with double majors in marketing and finance & investment banking from the University of Wisconsin.
Santander Execs Move To Exeter
Exeter Finance Corp. announced the appointment of Jason Grubb as chief executive ofcer and Brad Martin as chief operating ofcer, efective immediately.
Steve Zemaitis, who currently holds the position of chief operating ofcer, will assume the role of president.
Grubb replaces Interim CEO Mark Floyd, a member of Exeter’s board of directors who served as Exeter CEO from July 2010 until his retirement in October 2014, and again in December 2015 upon the departure of then-CEO Tom Anderson. Grubb’s most recent
experience includes 11 years at Santander Consumer USA, where he served in leadership roles including president and chief operating ofcer of Originations.
Martin served for the last two years as chief operating ofcer of servicing with Santander Consumer USA, and previously held an executive vice president role at Santander during his tenure with the company.
Columbus Fair Names General Manager
Columbus Fair Auto Auction has named Chuck Dearing as general manager.
Dearing will bring his 43 years of automotive experience to oversee the auction’s operations.
Dearing has served in several roles since joining Columbus Fair in 1998.
TrueCar Taps Dealer Services Exec
TrueCar Inc. announced that Brian Skutta will become the company’s executive vice president of dealer sales and service, a new position created to strengthen relationships and improve services across the TrueCar certified dealer network.
Skutta comes to TrueCar from AutoAlert, an Irvine, Calif.based provider of cloud-based analytics and dealer portfolio management services, where he has been chief executive ofcer since 2014.
Skutta spent more than a decade of increasingly responsible leadership roles at AutoTrader.com, where he led the launch of the company’s Trade-In Marketplace.
Skutta will report to CEO Chip Perry
Doug Keim
Kevin Chartier
RETAIL MARKETS
OREGON
Tommy Wilson Sr., owner, Tommy Wilson Motor Co., Portland:
“We’re been in business going on 21 years. We have one location.
“We keep 40 to 50 (in inventory). I think last year we had a little bit more, 50 to 60. It was a choice we made. We decided we could control our turn better with a little bit smaller amount of inventory. Also, it helped keep our flooring costs down.
“We’re selling about 32 a month. It’s probably about the same. But, again, we’re getting a better turn.
“We get most of our cars from the auctions. We also get trade-in. We’re also buying cars online. We’re using True Car.
“Our average retail price is around $21,000.
“The average model year is about a 2013. Mileage is probably 40,000.
Compiled by Jeffrey Bellant
“It’s probably worked out better for us. The reason is that a rental car is really a high market-days-supply vehicle.
“(Inventory) is about 5050 between cars and trucks. We like SUVs and trucks. In the Northwest, they are the better sellers. But it’s not easy to get them.
“We’re more import-driven than domestic. It’s probably about 90 percent import right now.
“Average reconditioning costs is about $600. It’s the same as last year. We don’t do any in-house service.
“For advertising, we use AutoTrader, Cars.com, TrueCar, CarGurus, Kelley Blue Book, Craigslist and Carfax.
“In winter time, SUVs are strong, especially ones with third-row seats.
“Last year we were stocking more rental cars, so we probably had a little lower mileage. But we changed our format around. CarMax put in a new store a few miles from us, and that (lower-mileage car) is their bread-and-butter. So we had to change.
“We just sold a 2014 Chrysler 300 – one of my domestics. It had 18,100 miles. And sold for $20,541.”
SOUTH CAROLINA
Danny Callahan, sales, Carolina Auto Sales of Myrtle Beach, Myrtle Beach, S.C.:
“We’ve been in business 23 years. We have one location.
“Usually we keep about 40 to 50 (vehicles) in stock. Obviously, in February, we keep a little more inventory because of tax time.
“The first week of February is a little sluggish until those checks come in. The second week of February is good, and (the rest of February) gets better.
“(Owner Kevin Pendergrass) is just fearless when it comes to buying (inventory). He’s driven as far as Texas or Maryland to an auction or might just drive an hour down the road to Charleston to an auction. We have a (franchise) deal-
ership we’ll utilize, too.
“This time of year (end of February), we’ll sell about 45 per month. Outside of tax time, it’s about 30.
“We’re buy-here, payhere. We talked about this statistic recently. About 75 percent of our sales are part of our buy-here, pay-here.
“Our average down payment is $1,500 to $1,800. Our average retail price is in the $8,000 range.
“We try not to put anything out there for longer than 30 months.
“That’s just a good enough time for us – the seller – and the customer. Because in 30 months, they’re ready to bring that thing back, trade it in. That car still has some life in it.
“One thing I’d like to say is we get a lot of our business from referrals, from repeat customers.
“Our average model years are in the 2005 to 2008 range. Mileage is in the 110,000 to 140,000 range.
“When I first started working here, I got a lot of requests for trucks. Then I guess I bugged Kevin enough where he started to go to auction and buy more trucks.
“When I first started, we had about 10 percent trucks. Now I think we’re at about 15 to 20 percent trucks and 15 percent SUVs
“Everybody wants them, then (in February) when the snow hits the ground, everybody wants a four-wheel drive.
“The thing is, they are so hard to find. It has to do with the crash in (20072008). Both the car companies about went out of business, so they didn’t produce as many trucks.
“I recently sold a 2005 Dodge Ram 1500. It had 130,000 miles. I think it sold for $10,995.”
“We use GPS, but we rarely utilize starter-interrupt. The GPS is for repossessions. We rarely check those cars if the payments are on time. Once they are a month behind, then we are on them.
WHOLESALE MARKETS
ARIZONA
Jim DesRochers, vice president, Dealers Auto Auction of the Southwest, Phoenix:
“Volume has been average. Franchise retail sales have slowed a little in February.
“There’s actually no tax season. The money’s been coming back in sporadically. The tax return delays have been substantial in the last couple of years.
“We’ve still been selling in the 70 percent range and running our normal 600-plus cars, but it’s been flat. There’s nothing spectacular, no uptick in the first quarter like you used to see in prior years.
“The other thing is (because of the recession), we’ve got that big gap from 2008 to 2011 of volume that never sold which would be coming back right now. Even the of-lease cars didn’t start until later in 2010 to 2011. So you have a gap in volume (during 2008 to 2011).
“Dealer accounts have been slightly above prior years.
“We’re drawing just under 400 per sale. Basically, we end up with 35 to 40 online and we draw another 350 and 360 (in the lanes).
“Our Mexican business is dead. Only starting, possibly, in March, will the Mexican government allow 2008s through 2011s to go back into the country.
“As of this recent period, they’ve shut them of completely. The average guy will tell you that the cost of taking a $1,500 car across the (Mexican) border was nearly $1,000. It’s almost 60 percent of the value in taxes. So our (business from Mexico) has gone from 25 percent of our total to 5 percent.
“But we’ve got more and more dealers from the states doing buy-here, payhere, so that’s made up the diference. They’re coming further and further trying to find those cars that are 8-, 9- or 10-years old in good shape.
“Our volume is 70-30, dealer consignment to repos. Repos are coming from Westlake, Lobel and CPS –all those guys.
“Our salvage sale always stays around 50 units per week and most of that stuf is sold online.
“I’ve used AWG online for a long time. We’ve increased the speed of our transmitters and we’ve also brought Cox Cable right to the building.
“We also (have) condition reports on every single car that we run. Right now, we’re converting over to what’s called VIR condition reports, which is a more detailed and intensive type of CR to drive online business even more.
“Our average price on the block is about $4,000, but we run everything from $8,000 to $9,000 down to a few hundred bucks.
“Trucks are doing unbelievable. Mileage doesn’t matter. One of my vendors at a franchise dealership dropped me a truck that he
had floored for $7,300. He got $9,500.”
MINNESOTA
Shaun Schaefer, vice president, Mid-State Auto Auction, New York Mills, Minn.:
“We’ve been in business 34 years.
“We have four lanes.
“We’ve been consigning about 400 to 500 cars per week. It’s up from this time last year.
“The economy’s getting a little bit better. Dealers are doing better.
“We’re sitting at about a 60-percent (conversion rate) right now. Compared to last year, it’s about the same.
“We’re drawing about 160 to 170 dealers a week. They’re coming from North Dakota, South Dakota, Iowa, Wisconsin and other places.
“I would say our dealer consignment is about 90 percent of our volume and 10 percent is repossession/ commercial.
“The repos are mostly
Compiled by Jeffrey Bellant
from local banks and credit unions.
“Our average price coming through the lanes is about $8,000. It’s about the same as this time last year.
“We have a toy sale in the spring for boats and stuf That’s usually around the opening of fishing season, usually the beginning of May. So that sale will include boats, four-wheelers, RVs, dirt bikes, motorcycles – all that stuf
“We have an online sale every Friday. We use ASI. We also have cars on OVE and SmartAuction.
“It’s tax time. The $3,000, $4,000 and $5,000 stuf is selling well. Right now, we have a lot of that tax-time stuf going through the lanes.
“The trucks and SUVs have been really good. It’s cars that have had a little bit more of a struggle than trucks and SUVs.
“We’ve actually had good weather this year. We haven’t had any snowstorms on sale day.”
TRUE COST OF INCENTIVES (TCI)
Car
Midsize Crossover SUV
Edmunds.com’s monthly True Cost of Incentives (TCI) report takes into account all of the manufacturers’ various United States incentives programs, including subvented interest rates and lease programs as well as cash rebates to consumers and dealers. To ensure the greatest possible accuracy, Edmunds.com bases its calculations on sales volume, including the mix of vehicle makes and models for each month, as well as on the proportion of vehicles for which each type of incentive was used. TCI data (and other Edmunds.com data products) can be viewed industrywide, import vs. domestic, by country of origin, by make, by model and by segment. True Market Value (TMV) is the transaction price for vehicles.
OTHER VOICES
It seems like every week we hear headlines like, “Major retailer reports data breach with two million customer records stolen.” In our personal lives,
things like this might mean we need to purchase credit monitoring services or cancel a credit card. While this can be inconvenient, it isn’t exactly a significant problem in our dayto-day lives.
It is rare, however, that we think about the impact on the company that was attacked. Typically, there are significant hard costs associated with a cyber attack. Often, the company
pays for credit monitoring services for all impacted customers. In addition, the company must pay to fix the problem that allowed the attackers to gain access in the first place. Sometimes there are class action lawsuits or fines from governmental entities to consider as well.
There are also intangibles to think about. The negative reputational impact on a retailer, bank or insurance company after a customer data breach is a very real thing. It can cost them hundreds of thousands to tens of millions of dollars in lost revenue. How many customers want to return to a company that put their private information at risk? Sometimes the organization is so big it can absorb and recover from such losses. Other times, it cannot recover and the company is put out of business.
In the automotive remarketing industry, we might think that problems like this don’t impact us. After all, we typically don’t collect credit card information from consumers when they purchase cars. However,
By Miles Mellor
there is more information than just credit card numbers that fall under “personally identifiable information,” or PII as it is sometimes called. Social Security numbers are one example of PII that we do deal with regularly. In some situations, email addresses can be considered PII. Therefore, in our industry, this is a bigger problem than we might think.
In my role as chief technology ofcer at NextGear Capital, managing computer, physical and network security is critical, given the nature of our business. We go to great lengths to secure this information and to protect our employees and customers from cyber attacks. Obviously, we present a much larger target than most dealers; however, there are some security best-practices that can be applied to almost any company, large or small.
First, make sure that any computers, tablets and smartphones in your business are kept up to date with patches for the software being used. This is typically simple to set up. For example, if you have a
Windows computer, you can turn on “automatic updates” and the system will update itself behind the scenes. While it might be inconvenient when the system occasionally requests to reboot, the security you gain more than makes up for this. Additionally, making sure you are running a good anti-virus and anti-malware software package that is up to date is even more important.
For your business’s website, if you are using a third-party service provider, ask them to ensure that encryption is turned on for the entire site.
You can see this if you notice it saying “https” instead of just “http” in the browser’s address bar. While you will likely have to pay for a security certificate (typically less than $100 per year), the fact that all traffic to and from your website is encrypted, means that nobody on the network can obtain any potential PII that a customer enters during a credit check or other activity.
For any cloud-based software being used, ask your
vendor to share their security policies and procedures. Asking key questions such as “Do you encrypt personally identifiable information in your system when it is stored?” or “Where is the server my information is stored on physically located?” are in order. If information is not encrypted, then someone who manages to hack the server or gain access to a backup tape will have access to all critical information. If the server is located in the vendor’s offices instead of a professionally managed datacenter such as Amazon AWS or others, the physical security might not be as sophisticated as is necessary.
In today’s complicated world, intangible assets like Social Security and credit card numbers carry with them a great deal of risk and value to business owners. It is important to have the appropriate safeguards to ensure this information doesn’t end up in the wrong hands, as that can put you out of business just as surely as a cash-flow problem.
or
Quickly, in memos
Company with a fourring logo
Where wipers wipe
32. Phantom or Wraith makers 34. Highly important factor in any car buy
Troubleshoot 38. “Wait a ___!” 39. Dodge SUV
VW sedan
Ford model
Midsize Pontiac
Appraised 4. Old Ford SUV
5. Apple’s connects to some car controls
6. Most buyer need it
Electric car model
8. Very strong lightweight material used in making some car parts, 2 words 12. Lexus __ 14. Detroit’s nation 17. Common ratio
Bryan Everly is the Chief Technology Officer for NextGear Capital.
AROUND THE BLOCK
TRUCKS SHINE AT TAX TIME EVENT
Carolina Auto Auction owner Henry Stanley had the view that, if you sell it, they will come, especially when it comes tax time.
Stanley proposed that the auction hold a special pickup truck sale to provide a unique marketplace for southern car dealers to
purchase their region’s hottest inventory – trucks.
Trucks sell fast and go for high prices in the South, Stanley said. So the team at Carolina Auto Auction believed they could be successful holding a special sale on a different day to sell only pickups.
The auction brought in 350plus pickups on its Tuesday afternoon sale in February.
Several hundred dealers were able to buy from two lanes of trucks.
Dealers also enjoyed a free cookout afterwards and had a chance to win two cash prizes.
Attending dealers also had a chance to participate in ARI’s “Sprint to Success” one-day promotion that featured a FitBit and Nike running apparel.
The sale was part of a larger Tax Time Sales event that Carolina Auto Auctions hosts every year.
The auction gave away $35,000 in cash and prizes that concluded on Feb. 17.
The Truck Sale went so well that Tommy Rogers, general manager of Carolina Auto Auction, announced plans to host a second Truck Sale in March.
Compiled by Jeffrey Bellant
Sales Receive Name Change
The W Walker Auction Group has announced that Sparkling City Auto Auctions of Corpus Christi and San Antonio are being renamed. The sister auctions were renamed the Corpus Christi Auto Auction and San Antonio Auto Auction, to better align them with their geographical locations. Both facilities remain under the ownership of the Walker family, and will continue as members of the ServNet Auction Group.
“After some thought we decided we needed to connect our auctions better with their locations in order to be more easily recognized, both locally and nationally,” said owner Wade Walker.
The name and logo changes for both locations have been in the works for several months and received approval by the National Auto Auction Association. A tagline identifies the sales as members of the W Walker Auction Group.
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
RAM TOUGH: Buyers crowd the lanes at Carolina Auto Auction’s recent Tax Time Sales event which featured a special pickup truck sale.
