Used Car News


LAS VEGAS – Adriana and Melissa Meza, who run a logistics company out of Adelanto, Calif., spent a few days at a remarketing conference looking to network and help build their 3-year-old business.
“Adriana and I own and run our own auto transport broker business, called Maranatha Works,” said Melissa Meza.
The women already had experience in the business through their father.
“Our dad, Francisco Meza, is an owner operator, and his company is called Maranatha Cars Transport,” Melissa said. “Although our father is not part of our company, we do consult with him often.”
The company started in November 2020, after Adriana, who got a business degree in 2017, saw a need to be filled.
“I started it on my own at first,” Adriana said. “I started as my dad’s dispatcher. He was having a lot of clients call him and say, ‘Can you get from here to here or there to there.’”
So, Francisco made a suggestion.
“He said, ‘Hey, you already know how the business works,” Adriana said. “Why don’t you just open up your own brokerage so that when a client calls, you can move it for them.’
“He pushed me toward that. So, I thought, I’m just going to do it.”
Adriana said they had a network of transporters through their dad, making it easy to help clients connect with haulers.
Meanwhile, Melissa looked to be on a different path.
“I got a pure mathematics degree,” she said. “That’s on the theoretical side of mathematics.”
She graduated in 2019, expecting to teach at the local high school
where math teachers were scarce.
But after graduation, Melissa had a medical issue and then the pandemic hit, postponing a surgery, which disrupted those plans.
“My dad had always wanted me to join the business,” Melissa said. “But I didn’t want to because I saw how hard they struggled to run their own business. So, I would say to my dad, ‘I’m never going to have my own business.’”
Eventually she watched the business start to grow.
“I saw that my sister needed a hand,” Melissa said. “I started to help with dispatching. Then I started to help with dispatching, on-off, as a side job.”
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Texas independent dealer Kendra Brown went from the nightmare of the pandemic to starting a new marketing company she calls The Dream Team Media Company.
When the pandemic hit and companies were upended, people scrambled for ways to boost business, earn extra income or look for new profit centers.
It was no different for Kendra Brown and her husband, Charles, who own Brown Family Auto Sales, a buy-here, pay-here dealership in Houston, Texas.
The pandemic’s detour would take Kendra from her BHPH dealership to helping franchise dealers market their own BHPH shops.
When it comes to paying the bills, necessity truly is the mother of invention.
“In 2020, we needed to find additional income for our family,” Kendra said. “So, while I still managed our dealership’s bookkeeping and marketing, I stepped outside the dealership to work in a digital marketing agency where I worked with franchise dealers.”
Brown became an account manager and brought what she learned while handling digital marketing at Brown Family Auto sales.
“I took what I learned about digital marketing on my own at our dealership and just kind of blew it up times 100,” Brown said.
“Being in an agency setting, I took a crash course in analytics, tags and websites – all of it.”
Working in a couple of agencies opened her eyes.
“That’s when I really started to see the strategy side of marketing and all of the ways you can integrate your sales objectives or operational objectives and processes, with your marketing and really create an efficient and intentional marketing strategy,” Brown said.
For smaller businesses that cannot afford a dedicated marketing department, they just wing it.
“It’s a lot of, ‘let’s just put some money here because someone said it works,’” Brown said. “When they say, ‘it works,’ they mean they get a lot of impressions.”
On the agency side, Brown could analyze dealers’ budgets, their performance and how it related to sales.
“You could see there were inefficiencies and where money was
wasted and why,” she said.
She has strong advice for a dealer on a marketplace site.
“Stop wasting your money,” Brown said. “Get off those sites.”
Eventually, she moved from working with dealers on the agency side to doing her own consulting.
“I had dealers who wanted me to help build their digital departments within their dealerships,” Brown said.
In 2021, Brown partnered with another woman she had worked with at the same agency.
The partner received an MBA in analytics, which blended well with Brown’s skill set.
“We cut our teeth on paid media management, from Google to TV and radio,” she said. “We created these campaigns for franchise and tier 2 dealers.”
Now they are The Dream Team Media Co. She’s already working with dealers.
“I wouldn’t want to work with competing dealers in managing their advertising, but I don’t currently have competing dealers,” she said. “They’re all over the country.”
But Brown said the firm is still in what she calls the “exploratory phase” in terms of what their services will look like and for which market.
“We’re really focused on independent dealers and providing services that the buy-here, pay-here community doesn’t have,” she said.
This summer, the firm will build a website experience for the BHPH customer and it’s going to be very different, she said.
“We’re customizing the search areas on a website that will cater to people looking for financing,” she said.
“There are different actions people take on a website that can tell you what their buying intention is, based on what they click on.”
Dream Team Media will set it up so that when a BHPH dealership receives a lead, they can start the underwriting and in-house process right away because they will know how that customer is searching.
For example, a typical customer might begin a search looking for a vehicle and a monthly payment.
“So, if a BHPH customer is looking for, say, a down payment, we’ll reverse the calculator so they can input their information and receive a down payment,” she said.
Also, the goal is to change the online experience to one designed for a
mobile device.
“Typically, a customer has to scroll down a screen to see more, but we’re going to change it so that it’s a more horizontal experience, which is better for a mobile device,” Brown said.
She added the product for BHPH dealers so it will be at a price point they can afford.
Another benefit is how Dream Team Media Co. will create a web structure designed especially for BHPH.
“Traditionally, web structure for a BHPH dealer has been created to optimize the integration with a Dealer Management System (DMS),” Brown said. “But your website should be optimized to integrate with whatever marketing system you use.
“So, if you use an agency or do it all
yourself and want to integrate with Facebook or sites that upload your pictures – that site should not be as difficult as it currently is for BHPH.
“We want to open up the integration capabilities for marketing for BHPH websites.”
Brown said her dealership has struggled with these same pain points and want other dealers to avoid them.
The problem is even vendors who can service the smaller dealer, they don’t understand what the BHPH dealer needs or understands.
“Let’s build a website for these people so that they can do whatever marketing they see fits their own business,” she said.
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The International Automotive Remarketers Alliance hosted its 2023 Consignor Awards ceremony during the Conference of Automotive Remarketing in Las Vegas last month.
Jim Jackson, of fleet company Holman, presented six awards.
The winner in the Northeast region was America’s Auto Auction – Harrisburg. In the Midwest, the top honor went to Missouri Auto Auction. The Southeast winner was Dealer’s Auto Auction of Chattanooga. The Southwest region winner was Houston Auto Auction. The West Coast region winner was DAA Seattle. And the Third Party Remarketing winner was America’s Auto Auction – St. Louis.
Mary Beth Greenstone presented LeasePlan USA’s awards. LeasePlan is now part of the combined company Wheels, which includes LeasePlan and Wheels Donlen.
The company gave its award for best retention to Manheim Texas Hobby. For its Northeast Stellar Performance Award, LeasePlan hon-
ored America’s Auto Auction Erie. The Southeast Stellar Award went to Dealers Auto Auction of Chattanooga. The Midwest Stellar Performance went to ADESA St. Louis.
The Southwest Stellar Performance Award was given to Oklahoma Auto Exchange. The West Coast Stellar Performance Award went to ADESA Golden Gate.
The two last awards from LeasePlan are for service that’s above and beyond. Manheim Philadelphia was the East Coast winner and America’s Greater Kalamazoo won in the Midwest region.
Greenstone also wanted to thank Copart for doing a “phenomenal job for us and our salvage.”
John Sullivan, of General Motors Financial, honored Columbus Fair Auto Auction in its North Central region.
In the Northeast region, GM Financial honored Southern Auto Auction in Connecticut. In the Southcentral region, it was Texas Lone Star Auto Auction – Lubbock. In the Southeast region, the winner was Manheim Statesville in North
Carolina. The West region winner was Manheim Denver.
GM Financial’s last award for the Most Valuable Auction, went to the auction with the highest volume and retention – Manheim Pennsylvania.
Avis Budget Group also presented three honors that it calls its “Ironman Awards,” for cycle time, retention and volume. DAA Northwest in Spokane, Wash., was one honoree.
A second award went to America’s Auto Auction Kansas City. The third went to Manheim Pennsylvania.
The final awards were presented by James Crocker on behalf of Merchants Fleet, which presented seven awards.
The six regional winners included: Manheim Phoenix, in the Southwest region; Houston Auto Auction won in the Southcentral region; Manheim Lakeland won in the Southeastern region; Central Mass Auto Auction won in the Northeast region; Indiana Auto Auction for the Midwest region and Bel Air Auto Auction won in the Mid-Atlantic region.
The three-time national winner was North Bay Auto Auction, with David Aahl accepting the award.
Crocker said Aahl is “someone who goes far beyond the call of duty for us on a daily basis.”
A Nixa, Missouri man who used his business to steal customers’ identity information in a scheme to obtain hundreds of thousands of dollars in fraudulent car loans was recently sentenced in federal court.
Chris R. King, 48, was sentenced by U.S. Chief District Judge Beth Phillips to four years in federal prison without parole.
The court also ordered King to pay $646,597 in restitution to his victims and to forfeit the same amount to the government.
On Nov. 20, 2021, King pleaded guilty to one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of aggravated identity theft.
King, formerly the co-owner of Queen City Motors, a used car business in Springfield, Mo., admitted he stole the identity of individuals who sought to obtain loans to buy vehicles from him.
King used that information to fraudulently submit loan applications and receive funds wired to his bank account from Credit Acceptance. King fraudulently submitted at least 30 automobile loan applications and received cash deposits of approximately $783,475 between Nov. 1, 2018, and Nov. 8, 2020.
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She officially joined Adriana at Maranatha Works in April 2021.
“We learned along the way. That’s how you persevere” Adriana said.”
Maranatha Works now operates through a partnership with DAA Las Vegas and with banks to pick up repos.
Adriana believes her family’s experience in picking up repos and knowing how to haul them gives them an edge.
“Repos are difficult to work with,” she said. “Because you have to figure out how to schedule every single car. And every repo company has different hours for transporters.”
It’s a challenge for the start-up and its family staff.
“We’re doing it all with just one seven-car hauler,” Adriana said.
That means some days Adriana is out on their lot in Victorville, Calif., lining up cars for her dad to pick up.
“We’re really a hands-on, family
type of business,” she said.
The next challenge is expansion.
“Yes, yes, we’re trying to find another semi,” she said. “We’re looking for something that’s good but used. It just takes time to build that capital.”
Last year, the company bought a couple of pieces of land to develop.
The firm also entered the EV market through a partnership with Tropos Technologies in Silicon Valley.
The company provides smaller cab-and-chassis EVs – compact utility vehicles. Maranatha Works arranges the transport for these vehicles, sometimes bringing them from East Coast ports to California.
Currently, the pair have 10 to 15 steady clients along with some oneoffs.
“Competition is very difficult,” Adriana said. “Others can give better quotes and prices, but a lot of times that car is not going to get moved
when the client wants it moved.
“Everybody goes to the lower rate, but that’s not always going to be the best service.”
Melissa said finding responsible carriers is a challenge for clients.
“Responsible carriers do preinspections,” she said. “They’re safe drivers. They know what their equipment can handle and they know it’s in good shape.”
Melissa said carriers who maintain their equipment make deadlines.
“That’s something I picked up from my dad,” she said. “He’s a very safe driver. He does inspections before he makes a pickup and after he’s done. He’s never had a maintenance issue that caused him to miss a deadline.”
He also showed her that soft skills are critical in this business.
“An intelligent person is a social person,” Melissa said. “Spanish is my dad’s first language. But despite
that, he’s grown his own business and helped us start ours. He learns a lot just by talking to people, despite the language barrier. I admire him for that.”
In an email, Francisco expressed pride in his daughters’ endeavor.
“As dispatchers, they have always had my loads ready to go,” he said. “Their strong background as dispatchers allowed them to gain a lot of experience very fast.
“They have a good perspective on both the carrier side and the client’s side.”
Melissa said she’s encouraged her father to open an auto transport school to train new drivers to do things the right way.
Francisco stated there’s a need for dedicated and reliable transporters.
“The industry won’t grow unless auto transporters choose to love what they do and do it better,” he said.
Brown’s approach to marketing relies on a solid foundation of local market research, brand identity, and data analytics.
The marketing company seeks to build a company culture that allows top, multi-generational talent to flourish in the ever-evolving global economy.
“Our team has been working meticulously to develop a solution that addresses the unique challenges businesses face in these industry segments,” Brown said. “We are confident that our breadth of services will deliver the necessary tools to help our clients achieve their goals.”
Brown has even made a presentation for her 20 Group, explaining how other companies fall short in servicing BHPH.
Dealers also have situations where their Facebook or Google ad accounts get shut down and they don’t know why.
“On ad platforms like Google and Facebook – and you’re advertising for a loan – you are in a special ad category,” Brown said. “So, there are certain restrictions in how you can target and advertise on those platforms.
“On Facebook, you have to select that you are in that ad category. If you don’t, they will shut you down.”
Optimizing BHPH marketing within the policies of these web company platforms is critical.
So, Brown will help dealers get set up structurally correct so this doesn’t happen.
Brown’s father started a buy-here, pay-here dealership the year she was born.
She started working at the store out of college doing collection calls, not the cushiest experience when starting out.
So, was her major in marketing, accounting, or business?
“I was a French literature major,” Brown said, with a laugh. She planned on being a teacher, either in high school or college.
“But I realized that the enjoyment I got was the analytical side of literature and setting up systems of learning for breaking down the language and its phonetics to teach it,” she said.
“But I didn’t particularly enjoy the teaching career itself.”
It was that analytical side that helped her dad with the nuts and bolts of running a car dealership.
She later implemented his software programs, inventory manage-
ment, taxes, compliance, etc.
“I did the whole back end of the dealership for about five years,” Brown said. “That’s where I learned what my strong skill set is. It’s really in process improvement – analyzing systems and improving processes for a better outcome.”
When her father retired, he helped her start a car business. Now she and Charles run their lot out of Houston.
Brown’s analytical side shows up at the dealership in how she works with BHPH customers.
Making it clear up front to the customer what the requirements are, prevents problems later.
She discussed this on a conference panel last summer.
“You have those conversations sooner, before they decide to skip or stop paying,” she said. “You have to set the expectations because you are building a relationship.”
It also means that if a repossession becomes necessary, it’s not a surprise to the customer, she said.
Brown recently explained that a strong relationship on the front end can help recover that customer in the future.
“We will finance people and sell to them again, even if they did have a repossession or voluntary repo because of circumstances,” Brown said.
If a customer fell on hard times, lost a job, or ended up in the hospital and couldn’t pay on the vehicle, that’s fine.
“If they get back on their feet, we’ll be happy to work with them again,” Brown said.
Brown makes changes in her dealer business model when needed.
At the National Independent Automobile Dealers Convention last year, she served on an underwriting panel and she mentioned that up until recently, her customers made monthly payments, but her 20 Group members “were appalled” when they heard.
As a result of that advice, Brown began transitioning to a different schedule.
“We still do have some people on monthly payments but we have a lot more on bi-weekly payments,” she said recently. “Bi-weekly payments help us stay in touch with customers more frequently and it seems to be working out better for us.
“We are excited to launch The Dream Team Media Co. and bring our expertise to the independent retailers’ market.”
Jim Thompson, owner, IQautos, Marietta, Ga.
“I’ve been in business 25 years and have been working remote for many years.
“Right now, our inventory is around 75 cars. Before COVID we had 130 or so, and as low as 50. We sell about 45 a month.
“We specialize in off-lease BMWs and Teslas. We are a BMW Group VIP dealer, there are about 35 of us. It’s kind of a wild ride when you’re dealing with Teslas. Their prices started dropping rapidly around last Thanksgiving. Have you ever been on a roller coaster?
“Right now, we’re getting down payments of around $3,000. We like to get 10% down. About half of our customers have trade-ins and we get a lot of repeat and referral customers.
“Most of what we buy still
has a factory warranty. We have to put tires and brakes on, so we’ll spend around $800 in reconditioning.
“We’re looking for a threeyear-old car and around 30,000 miles.
“We advertise on thirdparty classified sites. We’re seeing what we call a ‘race to deception’ on some of these sites. It’s a huge problem.
“The sites tell the sellers to post a really good badge price. But that doesn’t include the add-on fees. We saw one recently that added an ‘infrastructure maintenance fee.’ These fees used to total around $300-$600. Now it’s gotten to the point where some dealers are adding up to $8,000.
“What has happened is that the MRA (market report value) on the retail side is lower than what the car is selling for at auction. The consumer is seeing click-
bait, not a real price.
“With my dealership, we don’t want to sell the most cars, we’re a happy-sized dealership. We want to focus on a concierge-level customer experience.
“The last car we sold was a 2021 BMW with roughly 40,000 miles. We got $41,500 for it.”
Joe Fuentes, owner, Morgan County Motors, Fort Morgan, Colo.
“I’ve been in this location for 16 years. We are in rural America.
“We have a strong repeat following. We’re selling to multi-generations of families.
“My inventory right now is between 50 and 60. We sell, between both locations, 3540 a month. Our other lot is in Yuma, Colo.
“Trucks and SUVs are our
top sellers, probably 80 percent of our sales.
“We sell a lot more domestics than imports, but we seem to do OK with the Hondas and Toyotas.
“We still go to auctions. We’re trying to buy more online. We use Dealers Auto Auction of the Rockies. We buy from CarMax online every week, buying local as well as out-of-state, OVE too. We also use Manheim in Denver.
“We do buy-here, payhere. It’s kind of a hybrid, we do some BHPH and credit union financing. We’ve used PassTime (starter-interrupt) for quite a while, and now we’ve moved into their wireless units.
“We just got done with tax season so the down payments were stronger. It kind of fluctuates. We try to keep the notes short, 24-36 months.
Compiled by Ed Fitzgerald“We probably are in the range of $1,200 to $1,500 on reconditioning. We have our own service facility and try to do 99 percent of it inhouse.
“Our advertising is online. We do local advertising like the Thrifty Nickel. We do some radio and we use CarGurus.
“We carry anything from a $6,000 car up to $35,000, it’s a wide range.
“Anyone starting up in this business should get in with their state association. They have a lot of knowledge and they’re out there to help us. They’re our voice, locally and federally. Colorado has one of the strongest groups out there. The compliance issues are not going to go away any time soon.
“The last car I sold was a 2011 Chevy 2500 service body truck, roughly 150,000 miles. We sold it for $21,500.”
Sean McNeal, general manager, Plaza Auto Auction, Mt. Vernon, Iowa
“We’ll have our 60th anniversary sale at the end of August.
“We run three to four lanes.
“Volume has been hit or miss. The fleet/lease repos have picked up, but the consignment has been tough for everyone, even the smaller dealerships.
“We’re still a night sale (Wednesdays 6:15 p.m.) and once a month – at the end of every month – we have what we call our ‘party sales.’ We’ll serve food and do giveaways. We’ll run between 250 and 300 units at those sales. During our off week sales, we’ll run between 140 and 175 units.
“During a sale we’ll draw 150 to 175 dealers, with 50 to 70 online.
“With us being a night sale, a lot of the smaller dealerships and mom-and-pop shops are able to be here. The in-ops sale starts at 6:15 with the regular sale starting at 6:30. This allows the dealers to drive here after they close their dealerships as all the lanes fire up. It makes it convenient for them.
“For conversion rates, our fleet/lease and our featured dealers tend to be in the 80% to 90% range. The general consignment fluctuates in the 30% to 50% range.
“Before COVID, we’d be running 70 to 80 a week just with fleet/lease/repos. Now, we’re in the 30 to 40 range. So, about 20% to 25% of our total volume is fleet/lease/ repos.
“The (moratorium) on repos affected the market. That 18-month period where people got that pass with no-payments, became
more wear and tear on the car. They ended up with more mileage on the cars.
“I think here in the Midwest, in Iowa, the trucks have bottomed out. They’ve really fallen. But for the cars and SUVs, the prices are the still through the roof.”
Jim Terwilliger, sales manager, State Line Auto Auction, Waverly, N.Y.
“It’s been a very good year so far.
“May is a real busy month for us. We’ll have our ‘Corvettes & Convertibles’ sale on May 12 and our Antiques & Classics’ on May 19.
“We have eight lanes and our volume is up from last year and we’ve sold more cars (compared to this time) last year. We’re averaging 66% sold each week.
“We’re averaging over 700 bidders and a little less than
half of those are online.
“Online has really picked up. We’ll see new buyers online with Edge Pipeline.
“Retail is spotty. There are little pockets doing well.
“I’ve heard it’s not the normal spring retail traffic. But the market is still strong in the lanes.
“Then I hear other dealers say, ‘Where are they going with these trucks.’ They can’t believe what these trucks are bringing because where they’re at -- it’s slow.
“We have a strong dealer consignment. We’re probably about a 60/40 mix –dealer to commercial (fleet/ lease/repo).
“Some of our commercial consignors are GM Financial, Ally, and Credit Acceptance Corp.
“Our average price across the block is between $16,000 and $17,000 and had been higher. It seems like there
are more trucks and SUVs in the lanes, maybe half of the sale.
“Buyers in the lanes are shocked that some of these cars are bringing so much money, yet they get sold every week.
“We have recon and a body shop. We’re as busy as can be because it’s so hard to find personnel these days.
“I don’t know where the cars are going to be coming from (going forward). It just seems hard to predict anything lately.
“I’m looking forward to our special sales this month. Last year, our Corvettes & Convertibles sale ran about 40 cars. For our Antiques & Classics sale last year, we had over 100 and sold more than 54%.
“We’re going to have our 42nd anniversary sale on June 16. We’ll have lots of cash giveaways.”
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Today’s dealers are about as close to chameleons as any comparison I can think of to describe the amount of clever ways they find to survive.
In the last couple of years, the environment for dealers has so radically changed in almost every aspect imaginable from inventory acquisition to serving a retail customer. The competition has also grown intensely. New players using different methods to access the multibillion-dollar used vehicle market, with all its layers of complexity, are disrupting accepted customs and practices.
“It’s a jungle out there,” says it all. Obstacles appear at every direction from legislation to layoffs and production to the pandemic. You need eyes to see from back to front at the same time to assess the landscape
and any opportunities or potential threats.
As the shape of the business changes, a successful dealer will move with it, changing tactics to suit the new surroundings, sometimes without even realizing the subtleties of change, transforming like altering camouflage to take advantage of a new position or blend in with others to move ahead.
It helps to maintain a tight grip as with disciplines that have served and suited a dealer best through fair or foul conditions, using experience and judgment to feel confident in any environment.
When a prize is in sight –a customer, a monthly profit goal or some great buys –deft and decisive actions are needed to strike and get an advantage. To beat the competition, dexterity is
key like a chameleon’s lightning-quick tongue to seize its prey. An edge is always so important in this business. Things have also changed on the supply side. Re-marketing actions and timing decisions often used to be made on the basis of experienced fleet and manufacturers’ managers’ senses of the market – not exactly seat of the pants but a lot of gut feel. Seasons often had an influence on when to sell or to hold.
Much is now driven on the basis of statistics and computer-generated data. Masses of national information gathered, sorted and regurgitated in forms that almost make decisions for you. Responsibilities now shared with machines could make a blameless society if we’re not careful.
Who could have predicted a global pandemic (some
did but no one listened) and the depth of changes that were and still are being made to every part of our business?
Used car values have gone through the roof as new car supply has faltered due to shortages of essential parts and equipment. Many things in the market have run counter intuitively as people have rushed to gain back what is now starting to be interpreted as a new normal. House prices going crazy, supermarkets charging whatever they can while the government is propping up the non-working classes and employers unable to fill spots at the lower wage end of the scale. It feels like things are moving from calm to chaos.
As with all these affairs, I’m sure things will settle; where, when and at what level is yet to be discovered.
Maybe we’ll all turn into chameleons if we’re going to do well in our new surroundings.
(This is a previous column of Tony’s that ran in 2021)
Myles Mellor