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Industry Vets Honored at NAAA Event

By Jeffrey Bellant

CHICAGO – Executives from a manufacturer and a value guide publisher, along with an auction owner, received the National Auto Auction Association’s most prestigious honors during the group’s recent annual convention.

General Motors’s Dan Kennedy and Black Book’s Tim West won the NAAA’s coveted Hall of Fame award, while Columbus Fair Auto Auction owner Alexis Jacobs earned the NAAA’s Pioneer Award.

ADESA CEO Jim Hallett presented Kennedy with the Hall of Fame award.

“I believe it would be safe to say that we’re long overdue in recognizing this year’s recipient,” he said.

Kennedy has played a key role in GM’s remarketing department for the better part of 25 years.

“As a result, his name has become synonymous with our industry,” Hallett said.

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He joked that Kennedy has probably been responsible for training more bosses than anyone in the remarketing industry. “(Kennedy) has cars in his DNA,” Hallett said.

GM has remarketed 14 million vehicles during Kennedy’s tenure., he said.

Kennedy was gracious at the podium.

“Wow,” he said. “I’m very honored to be standing in front of you to accept this award.”

He credited the support of his family and GM team members.

“It’s a great industry, I enjoy it,” Kennedy said. “I love my job, which makes it easy to do. I thank you all.”

NAAA Chairman Dave Angelicchio presented West with his award.

West, who serves as Black Book vice president, North American auction director, has been with the company since 1984.

West’s efforts have made him well respected as a trusted friend and advisor to auction general managers across the country, Angelicchio said.

Angelicchio said people who know West point to his knowledge and experience, along with his efforts as an advocate for the industry, as a reason for making him a Hall of Fame winner.

“This inductee embodies what it means to be a NAAA stalwart,” he said.

Angelicchio also joked that outside of West’s accomplishments, he should be in

Photo by Jeffrey Bellant HALL OF FAME: GM’s Dan Kennedy (center) was one of two recipients of the 2011 National Auto Auction Hall of Fame award during the group’s recent annual convention in Chicago. ADESA CEO Jim Hallett (left) introduced Kennedyand presented him with the award, along with JayCadigan, the new NAAA Chairman.

The association also honored Black Book’s Tim West with the Hall of Fame award. Columbus Fair Auto Auction President Alexis Jacobs received the NAAA Pioneer Award, presented by Keith Whann.

the Hall of Fame because of two simple words – jumbo shrimp – Black Book’s featured menu item at the popular NAAA reception it sponsors annually.

West thanked the selectors for the honor along with several members of Black Book and the company’s president Tom Cross.

“These people not only believed in me,” West said, “but they believed in this association.

“That bond has been tremendous. It will continue to be that way.”

He also thanked his family and friends.

Keith Whann, CEO of Columbus Fair Auto Auction, presented Jacobs with the NAAA’s 2011 Pioneer Award.

Whann praised Jacobs for doing things the right way and leading by example.

She has been generous with donations to state dealer associations and charity drives. Jacobs has served in various capacities over the years, including NAAA president.

Whann highlighted Jacobs’ commitment by pointing out she has attended 45 of the last 46 NAAA conventions.

“When you think about a pioneer,” Whann said, “you

think about someone who has been a leader, someone who has been groundbreaking, someone who has been of service to the association and their community.”

“Tonight’s recipient has done all of that.”

Jacobs accepted the award by saying she doesn’t like public speaking, but still briefly offered her thanks to the association.

“I jut want to say that I’m very honored,” Jacobs said, “and I’m very pleased to have been a part of this association for all these years.

“I love you all. This is a great industry.”

IN THIS ISSUE • Deal structure and technology help boost bottom line. – Page 5

• Copart is streamlining operations to improve service. – Page 8

• Retailer nabs a town’s last license for used car sales. – Page 7

• Indiana seller earns Quality Dealer award. – Page 12

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October 3, 2011

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Slow Growth, No Double Dip

By Jeffrey Bellant

CHICAGO -Industry economists predict there will be no double dip recession, but slow growth will continue to dog the market in the near future.

The National Auto Auction Association hosted the economists’ panel during its 2011 annual convention recently.

Ira Silver, NAAA’s economist, said issues ranging from Libyan unrest, European debt crisis, the United States debt, supply and other hurdles led to economic growth that was below 1 percent.

Silver blames the lack of a strong rebound on the continued housing slump.

“That’s taken a major driving factor out of an economic expansion,” Silver said. “Based on that, I don’t see a really strong rebound and expansion until housing turns around.”

Silver believes that won’t happen until the second half of 2012.

Paul Taylor, chief economist for the National Automobile Dealers Association, said housing has yet to find a bottom, which should come in the next 12 months.

Slow growth in Europe has also hurt the economy as Europe had its own housing bubble, Taylor said.

Tom Kontos, ADESA’s economist, agreed with Taylor and Silver that

new-car sales would be in the 12.5 million to 12.6 million range in 2011.

“If auctions can stick it out during these tight supply conditions, I think more cars are coming in 2013 and 2014,” Kontos said.

Kontos has a message for those wholesalers making big money because of the tight supply.

“Make hay while the sun shines,” he said, “because it’s not going to last forever.”

He predicts new car sales will move up to 14 million in 2012.

New-car dealers have done a good job of adjusting to the current market, Taylor said. Low-interest rates will continue to help that, Taylor said.

Taylor said even this weak-growth economy could support 12.9 million units of new cars, but agreed with Silver that the tsunami prevented that from happening.

Taylor expects a double dip in housing, but not a double dip recession though a worsening situation in Europe could change his view.

Neither Kontos or Silver see a double dip either.

Taylor expects 3 percent growth in 2012 and Silver had a similar assessment.

The excess cash that banks and corporations have will assist the economy when things start to improve, Silver said.

Photo by Jeffrey Bellant BRAIN TRUST: NAAA economist Ira Silver (from left), chats with NAAA Chairman Jay Cadigan, NADA economist Paul Taylorand ADESA economist Tom Kontos in Chicago during the NAAA annual convention.

“My forecast for growth this year is somewhere between 1.5 and 2 percent,” Silver said. “Next year, I see 2.5 to 3 percent.”

Kontos said independent used-car dealers have improved business over the past two years, following a couple of tough years economically.

“I believe there is a lot of pent-up demand for new-car sales,” Kontos said.

The main reason for his position is that the U.S. has gone almost three years with new-car sales below the 12.5 million-per-year amount that would normally be replaced.

Kontos also predicts some recovery

in off-lease volumes by 2013.

Used-car dealers may complain about the price of used cars in the lanes, but profit can still be made, Kontos said.

“I think they’re able, for the most part, to earn decent grosses on those units,” Kontos said.

Since dealers are operating “leaner and meaner,” so their working capital management is much better, Kontos said Taylor sees slow improvement.

“There is light at the end of this tunnel,” Taylor said. “And it’s not an incoming train.”

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USED CAR NEWS

October 3, 2011

NEWS BRIEFS Right to Repair Could Go Before Voters

Following certification by the Massachusetts attorney general of its proposed ballot question, the Massachusetts Right to Repair Coalition will immediately begin collecting signatures to place the initiative petition before voters in the state.

Supporters have until Nov. 23 to get the nearly 70,000 signatures required to secure placement of the question on the 2012 ballot.

The proposed Massachusetts Right to Repair law would require automobile manufacturers to provide directly to consumers the non-proprietary diagnostic and safety information needed to repair their cars. Currently, auto manufacturers provide only some of the diagnostic and safety information needed to repair vehicle owners' cars with independent technicians.

Edmunds.com Makes Data Available to Developers

Edmunds.com has made available its full database of new car and used car specifications and pricing to the online applications community.

The release of Edmunds.com’s application programming interface (API) is the first ever by a major automotive website and will allow

developers full access for designing and enhancing their own online car shopping applications.

In the initial release, Edmunds.com will make available pricing and vehicle specifications for 36,500 different trim levels of over 6,000 car models from 1990 through the current model year. Edmunds is working with Mashery.com, a leading provider of API management solutions, to help facilitate access to the data.

OVE.com Helps Independent Auctions

OVE.com brought independent auctions together again this year for its second annual summit.

During the summit, attendees learned how to take advantage of OVE.com to grow their digital business.

Industry experts also discussed recent trends and shared best practices.

Sandy Schwartz, president of Manheim, talked about how advances in digital technology are transforming

a variety of industries and businesses.

Joe George, group vice president of Manheim Digital, explained how digital advances are transforming the auto remarketing industry. George also described how those advances will impact the future of remarketing, and he shared strategies for leveraging mobile technologies to counter non-traditional competitors.

In addition to learning best practices from industry experts, networking with colleagues, sharing success stories and exchanging ideas, summit attendees also had the

opportunity to give OVE.com leadership their suggestions for how to improve the platform and make the site even more efficient and effective.

To help its independent partners reach their ongoing goal of selling more vehicles online, OVE.com is bringing back its Strive 4 Five promotion. The promotion provides participants with financial incentives to capitalize on the incremental dealer business opportunity OVE.com provides.

The promotion began in September and is currently underway.

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.usedcarnews.com Charles M. Thomas Founder (1947-2002) Lynda R. Thomas, Publisher Colleen Fitzgerald, General Manager

C R O S S WO R D

by Myles Mellor

Editorial: Ted Craig, Managing Editor

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Jeffrey Bellant, Staff Writer Contributing Writers: Emily Caswell, Sheila McGrath, Dave Piestrzynski Columnist: Tony Moorby Advertising: Shannon Colby, Account Manager Megan Frump, Account Manager Marie Hingst, Account Manager Circulation: Helen Thomas Production:

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Vol. 17 • No. 13 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

Friday November 18th Special Promotion 1000 Vehicles Free Breakfast * All Float

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 any advertisements. All Rights Reserved. Reproduction in any form is prohibited without the written consent of the publisher.

OUR ADVERTISING APPROVAL POLICY Please submit clear, legible copy. Payments from first time advertisers must accompany the insertion order. Distribution is guaranteed by U.S. Postal Carriers.

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USED CAR NEWS

October 3, 2011

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Tech Helps Overcome Challenges in this market.

The one benefit for buy-here, payLAS VEGAS – Inventory cost and here dealers already in the market is capital availability continue to chal- that the cost of future competitors starting in the business has skyrocklenge buy-here, pay-here dealers. eted.

Leedom said “Inventory is the cost of omeone available. But the sgetting into question the business was about becomes...at $500,000 to $600,000 what cost?” about 10 years – Chris Leedom ago. Today, it’s between $1 million and Dealers have seen costs rise already $1.5 million based on the 25-to-35and they may go up even more in the unit model.

The lower return on investment near future, said dealer and consultleaves little room for mistakes. ant Chris Leedom.

This might force a change in the Dealers find it more difficult to way car deals are structured in the absorb big losses or unexpected future, he told the audience at The costs.

Technology can help avoid these Leedom Group’s recent buy-here, mistakes. pay-here conference.

Payment assurance technology, “Inventory is available,” Leedom said. “But the question becomes, almost non-existent a decade ago, helps dealers improve collections. available at what cost?”

So does an automated clearingGetting the money to pay for those vehicles and covering other expenses house, which makes it easier for customers to make payments. also proves difficult these days.

Smart phones will play an even Finding capital is as “challenging as larger role in payments and customer I’ve ever seen it,” Leedom said.

That makes low leverage rates, communication in the future, preferably below 50 percent, crucial Leedom said.

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USED CAR NEWS

October 3, 2011

CarMax Sees Slower Sales

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RICHMOND, Va. (AP) – Superstore chain CarMax Inc. said its secondquarter profit rose about 4 percent as the recent economic slowdown hurt consumer confidence and softened customer traffic.

The Virginia-based company, which runs more than 105 stores that mainly sell used cars and trucks, posted net income of $111.9 million, or 49 cents per share for the three months ended Aug 31, up from $107.9 million, or 48 cents per share, a year ago.

Net sales grew more than 11 percent to $2.59 billion on strong sales of cars sold at wholesale auctions and For Cars, Trucks and Vans

higher overall prices. Sales at stores open at least one year fell 2 percent during the quarter. Sales from locations open at least a year is a key indicator of a retailer’s long-term health because it excludes stores that recently opened or closed.

“While we were disappointed in this moderate decrease in sales, we believe it was largely due to the weak economic environment and lower consumer confidence,” CEO Tom Folliard said in a conference call with investors.

CarMax said used unit sales rose about 7 percent as the company’s average selling price rose.

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October 3, 2011

Dealer Gets Scarce License

By Sheila McGrath

Town leaders heard two compelling cases from two men with solid business plans for opening a used-car dealership. But only one of them walked away with a license on Sept. 12, when the Salisbury, Mass., Board of Selectmen met to decide which of the men would get the last license in town.

Since 1996, Salisbury, a town of about 8,000 residents north of Boston, has put a limit on the number of used-car dealers it allows to operate.

The sought-after Class II licenses rarely become available - once dealers get one, they hang on to them, even if they’re not actively using them.

New-car dealerships, which operate with a Class I license, are not limited in number.

Unlike most states, dealer licenses in Massachusetts are issued by local municipalities rather than the state.

Last summer, a Class II license became available when Chris Fraser, owner of Fraser Automotive, filed for bankruptcy.

On Sept. 12, the selectmen granted Fraser’s license to James Dimopoulos, who has been trying for more than two years to get one. He lost his Chrysler dealership as a result of the recession, and has been wanting to get back in the business

ever since.

“I’ve been waiting two and a half years - I was in line for it,” Dimopoulos said. He said he hoped to be in business within a couple of weeks.

The other applicant, Stephen LaRoche, is still hopeful he’ll be able to work something out with the town.

Last summer, under the impression that he would be able to get Fraser’s license, LaRoche began the process of purchasing the Fraser Automotive property.

The license denial has put a serious crimp in his plans.

“We had hoped to be in business by now,” he said. “Everything - financing and everything else - is contingent on us getting this license.

It’s causing us a lot of pain at this point.”

The Fraser property is clearly suited to operate a dealership, he said, having already gone through all the necessary build outs when Fraser owned it.

He said other license-holders have locations that are not nearly as suitable, but they’re not using the licenses, merely holding on to them.

“It’s extremely frustrating,” he said.

LaRoche said he sees the town’s rule as a restriction of free trade on only one type of business - used cars.

The only other product regulated that way is liquor, he said.

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PAGE 8 – AUTO YARD SALVAGE FOCUS

Copart Maintains Momentum Copart Inc. is streamlining its operations as its continues to move forward.

“Project Overdrive” is the name of the company campaign to improve processes to make service faster and easier.

Copart is also moving ahead with transferring its corporate headquarters to Dallas from Northern California.

The company reported another strong quarter recently.

For the three months ended July 31, revenue, operating income and net income were $215.4 million, $63.5 million and $40.5 million, respectively.

These represent increases in revenue of $25 million, in operating income of $6.2 million and in net income of $4.3 million, respectively, from the same quarter last year.

For the twelve months ended July 31, 2011, revenue, operating income and net income were $872.2 million, $265.3 million and $166.4 million, respectively.

These represent increases

in revenue of $99.4 million, in operating income of $26.2 million, and in net income of $14.7 million, respectively, from the same period last year.

The company also saw the opening of its new South Atlanta facility in Ellenwood, Georgia. This latest addition to Copart’s footprint marks the company’s fifth facility in Georgia and the 154th facility world-wide.

Copart President Vincent W. Mitz said the 77-acre site will improve Copart’s service in the greater Atlanta Metropolitan area.

“Atlanta is a major market, and our new South Atlanta facility in Ellenwood provides additional capacity to more efficiently cover the region as demand for our services grows,” said Mitz.

Copart also announced that its board of directors has approved a 20 million share increase in the Company’s stock repurchase program, bringing the total current authorization to 49 million shares.

File photo SAYING GOOD-BYE: Copart founderWillis Roberts takes in the sceneryat one of the chain’s salvage yards in northern California. The companywill still maintain a presence in the market, but is moving its headquarters to Dallas.

The company has repurchased approximately 20,453,037 shares under the program since its inception in February 2003, leaving approximately 28,546,963 shares available for repurchase under the program (including the 20 million

share increase approved on September 22, 2011).

Repurchases under the program may be effected through solicited or unsolicited transactions in the open market or in privately negotiated transactions.

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The repurchases may be made at such times and in such amounts as Copart deems appropriate and may be discontinued at any time.

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October 3, 2011

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Recall Woes Teach Hard Lesson

It seems there has been a real spate of recalls lately.

Part of the increase comes from the lesson manufacturers learned from Toyota last year, said Jesse Toprak, TrueCar’s vice president of industry trends. “Manufacturers learned some hard lessons last year,� Toprak said.

Toyota found itself in the throes of a public relations fiasco, complete with a Congressional hearing, following claims of sudden acceleration.

There were flaws in the cars’ construction, but many of the claims proved false. The hits to Toyota’s reputation were real, however.

The company fell in the major quality rankings. Most analysis said that was due to the bad buzz.

Toprak said Toyota handled the incident poorly in many ways.

Company executives displayed an “arrogance.�

The good news for most brands is recalls historically have little effect on sales, Toprak said. Of course, that was before the Internet made information much easier to access.

Subaru and Jeep both announced fairly large recalls, but should weather their problems well, Toprak said. Both have a cult following that places other factors above mechanical issues.

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Photo courtesy of the Indiana IADA ALL IN THE FAMILY: The Shaverfamily, from left, Michael ShaverJr., Michael ShaverSr., Luke Shaver and Jim Beem, plays hard and works hard.

After almost 100 years selling cars, it’s nice to get a little recognition.

Shaver Preferred Motors of Merrillville, Ind., was presented with the Joe Krier Quality Dealer of the Year award at the Indiana Independent Automobile Dealers Association’s annual golf outing and awards day Sept. 11.

The Shaver family has been selling

cars since 1913, when E. L. Shaver opened a Hudson-Essex distributor in Lake County, Ind. The Shaver family has had second, third, and now fourth generations in the new and used car business, stretching from Indiana to California.

Shaver Preferred Motors Inc. opened its doors as an independent Continued on next page

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Quality – Continued from prior page dealership in 1994. It has grown from selling 15 units a month to selling in excess of 700 units per year since then.

In 1999, Shaver Preferred Motors opened a seven-bay repair center where they recondition their units before the vehicles are offered for sale. They act as a regional repair center for their service contract customers, walk-ins, dealer referrals, and are a state authorized emission center.

The store employs seven ASE certified technicians.

The Quality Dealer of the Year is chosen based on several attributes.

The dealership must be consumer oriented, and the dealer must have a record of good business decisions based on honesty and integrity. Also, the dealership must represent themselves as a civic leader within the community.

Michael Shaver Sr. has served on the board of directors of the Indiana IADA for eight years, with four of those years as its treasurer. He has also been a director at his alma mater, Regis University in Denver, a member of the local and state Chambers of Commerce and a member of Leedom & Associates First Dealer Twenty Group for Secondary Independent Dealers.

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Dealer, Staff Plead to Fraud The president of a defunct suburban Chicago auto dealership was sentenced to nine years in federal prison for engaging in a fraud scheme in which he, together with the dealership’s owner and another employee, caused lending institutions, car dealerships and customers to lose more than $2.4 million in transactions involving more than 100 vehicles.

Glenn Stancil, the former president of Clover Financial Sales & Leasing Inc., in Roselle, Ill., was sentenced on 11 counts of mail and wire fraud.

The judge ruled that Stancil and two co-defendants intended a loss of just over $3 million, and ordered

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restitution of $2,434,782, representing the actual current loss to victims, as well as forfeiture of more than $2.1 million. The judge found that Stancil was a leader in an extensive fraud scheme and also ruled that he lied while testifying in his own defense.

In June, the same judge ordered the same amount of restitution and forfeiture against Clover’s former owner, Patrick McManamon, and sentenced him to 85 months in prison fafter a guilty plea.

A third co-defendant, Pamela Mendyk, who worked in Clover’s finance department, testified as a government witness at Stancil’s trial.

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PEOPLE IN THE NEWS ADESA Shifts Managers Around

ADESA announced changes to auction management at two of the company’s locations. Theo Jelks, who served as general manager of ADESA Los Angeles since February 2009, has been named the new general manager of ADESA Las Vegas.

Jelks joined ADESA in 2001 as executive sales director.

In December 2005, he became general manager of ADESA Tampa, which quickly became one of ADESA’s fastest growing auctions under Jelks’ leadership. Prior to ADESA, he was new business manager of Car Brite, a leading manufacturer of auto reconditioning products.

Jelks’ background also includes five years of military service in the United States Air Force and nearly a decade of experience in criminal justice and security.

In addition, Chad Ruffin, previously general manager at ADESA San Diego and assistant general manager at ADESA Los Angeles, will now serve as general manager of ADESA Los Angeles. Ruffin most recently served as executive director of sales for ADESA. Prior to joining ADESA, he held several positions at Manheim for six years, including Ford account manager and reconditioning

manager. Ruffin is also experienced in the banking side of the automotive industry, having worked in remarketing at Arcadia Financial, CitiFinancial and HSBC Auto Finance. A graduate of the Mendenhall School of Auctioneering, he has more than 15 years of auto industry experience.

Manheim Announces Retirements

Keith Williams and Dan Thomas have retired from Manheim.

Williams retired as vice president of technology integration after serving the automotive industry for 44 years, including 26 at Manheim.

Williams joined Manheim in 1985 as general manager of Newburgh Auto Auction in Newburgh, N.Y. In 1997, he was named vice president of operations for the Northeast region.

In 2005, Williams was named vice president and general manager of Manheim Pennsylvania. In 2010, he moved to Manheim’s corporate team as vice president of technology integration.

Prior to joining Manheim, Williams served 18 years in a family-owned auto dealership in the New York area.

Thomas retired as general manager of Manheim Nevada after a career spanning 36 years in the remarketing industry, 19 of which were at Manheim.

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RETAIL MARKETS ALABAMA

Henry Mullinax, owner, Mullinax Auto Sales, Anniston, Ala.: “I’ve been in business at this location, under this name, for 33 years. I have just the one location.

“I’m keeping about 65 cars on the lot. That’s about the same as last year. But in 2009, I used to keep 100 vehicles on my lot.

“The (lower amount) seems to make my turn better. Taking the Certified Master Dealer class seemed to remind me about (inventory turn). I learned through (franchise programs) when I was starting out. Their view was, if you had it on your lot for more than 30 days, hunt it a home. That’s the perspective of CMD instructor Joe Lescota.

“If you don’t turn your inventory at least six times a year, you lose money.

“I don’t see myself ever going back to having a 100car inventory.

“As I see it now, I’ve kind of found a niche. I’m able to make a profit with less.

“I’m now making as much money as I did when I was

spending more on advertising and spending more on inventory costs.

“I probably purchase 50 percent of my vehicles at auction and 50 percent on the street.

“I used to buy 70 percent off the street and 30 percent from the auction.

“But new-car dealers are becoming more used-car orientated.

“So you have to find your cars elsewhere.

“I’ve got a new-car dealership across the street that’s got a 1965 Chevrolet sitting on a ramp.

“It’s a nice antique truck, but three years ago you’d never find something like that at a new-car store.

“I’m selling about 38 units a month. That’s about the same as 2010, which was a good year for me.

“I keep about 30 to 35 percent trucks, 20 percent SUVs and 50 percent cars.

Sport utility vehicle sales are not as strong as they were.

“I probably sell more domestics than imports.

“The quality is good on the domestics. GM vehicles are doing well.

“I used to keep more late

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Compiled By Jeffrey Bellant model units and off-lease units. But the lease stuff has dried up.“I’ve had to buy higher mileage vehicles, but banks have stepped up and they’re financing higher mileage vehicles.

“I’m still trying to buy the 60,000- to 80,000-mile car that are two to three years old.

“I’m putting more into reconditioning. I’m putting about $1,300 to $1,500 in recon. My average priced car is about $11,000.

“But the end of 2008 through 2009 was the weakest year I’ve had in business.

“It was the only year I ever had to put money back into the business.

“In January 2010, it seemed someone turned the switch on the business.

“It’s been two good years since.

“For advertising, I’ve had a lot of success doing the small town and rural newspapers where people still read the newspaper.

“Recently, we sold a 2003 Dodge Ram 1500 regular cab six cylinder truck. It had 90,000 miles and we sold it for $8,995.”

OKLAHOMA

Jim Holman, owner, The Car Store, Oklahoma City: “The Car Store has been open for six years. But this is my 44th year in the car business. I have an extensive new-car background. I started in buy-here, pay-here originally as an additional part of a new-car store I owned.

“I’m strictly lease-here, pay-here. I started leasehere, pay-here at a new-car store 12 years ago.

“I carry 85 cars on the lot. I sell about 60 per month.

“I primarily buy my vehicles at auctions. I use some wholesalers, but it’s mostly auctions.

“The average retail price range is $9,800 to $10,400.

“Sales are down slightly from this time last year.

“Our lease terms don’t exceed 36 months.

“I carry more domestics, based on value and other criteria.

“The average model year is 2006 to 2007, in that range.

We don’t like to go beyond seven years.

“We normally carry vehicles with 65,000 miles.

That’s extremely difficult in this market.

“We have a referral program called ‘The Free Money Club.’ You send us a buyer, we’ll send you money.

We’re also ramping up social media, with Facebook and Twitter, but we’re still learning about it.

“When we started, we used to use infomercials when they were relatively cheap.

Today, in our market, one infomercial costs what it used to cost to run 15 insertions in one month. The price has risen exponentially.

“So we use the referral program, we also give customers a ticket every time they make a payment. Then we’ll have drawings and give things away.

“So we work our customers.

“With lease-here, pay-here, when the lease is over we normally keep the car.

So we recycle a little more than 50 percent of the vehicles.

“About 11 percent of the people buy the car at the end of the lease.

“One recent car we sold was a 2008 Ford Focus with 63,000 miles.”

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WHOLESALE MARKETS FLORIDA

Doug Rodriguez, general manager, Tallahassee Auto Auction, Tallahassee, Fla.: “Sales have been good for us. We have been able to capture some markets and accounts. In an up and down economy, we’ve held our own.

“The auction has been here 27 years. We have three lanes and we are running all three lanes.

“Our sales are running between 300 and 350 units per week. Conversion rates are still struggling a little bit at 55 to 60 percent. We’re up 15 to 18 percent in volumes compared to (2010) and conversion rates are up 4 to 5 percent.

“We draw anywhere from 180 to 200 dealers every week. We were at 140 to 150 per week last year.

“Part of the (improvement) is due to the fact we put a huge capital investment into the Tallahassee Auto Auction. We put almost $1 million into it. I think that’s drawn some new people in.

Also, we’ve had some people that hadn’t been here in years and now they see the

improvements.

“We bought another building and in that building we put up a brand new state-ofthe-art mechanic’s shop along with a reconditioning and detailing facility.

“We’re the only auction in the vicinity that’s put a huge commitment into our facility.

We’ve also done a lot of things on our sales side to try and make it a friendlier buying market.

“Our dealers come from the Tallahassee area, the Dothan, Ala., area and the Albany, Ga., area. We also get a lot of folks from Panama City, Fla., Thomasville, Ga., and other areas.

“We’re coming through such a tough economic period that it just gets old.

But car dealers know how to adapt. They’re going to find a way to make money in the auction lanes.

“We’re about 90 percent dealer consignment. You still have to rely on the dealers.

But we’re up a little on the fleet-lease side.

“Repossessions were down for the first half of the year, but they’re picking back up.

“The truck market has taken a little bit of a hit, but

we’re still doing OK down in Florida.

“I don’t think there’s one particular segment that’s really hurting for us.

“We do a powersports and marine sale the second Friday of every month. We also do an in-op sale on the first and fourth Fridays of the month.

“Our average price range in the lanes is $5,000 to $8,000, which is about $2,000 higher than last year. Some of that is driven by the market. The other part is the upgrade to our facility.”

PENNSYLVANIA

Lynn Weaver, general manager, Harrisburg Auto Auction, Mechanicsburg, Pa.: “Sales have been fairly strong. We had a little bit of a drop toward the end of the summer through Labor Day. “We also had a couple of hurricanes that came through the area, both of which came through on sale days. But the amazing thing is that our sales percentages were still good.

“We had minor flooding both days, but still had 50 percent sales. But since then,

Compiled By Jeffrey Bellant it’s been good.

“We have six lanes and we’re running around 1,700 cars. We’re down just a touch in consignment. Sales percentages are not as quite as strong as last year, when we had a really strong third quarter.

“We’re a little down in commercial accounts, but that’s right across the board with everybody else.

“Our people have done a great job filling the lanes with dealer consignment and bringing new dealers in.

“We’re also done some things with specialty segments.

“For example, we started an as-is lane. We also started monthly sales in motorcycles, RV/motorhomes and specialty equipment. Those w i l l g o away a s w i n t e r comes.

“But up through Thanksgiving, we’ll have one or two of those going on.

“Our goal is to get 100 units for each of those sales.

“The dealers really love the motorcycles and the specialty equipment sales.

“Sales percentages overall are still at 60 or 61 percent.

It’s been strong.

“Our buyers have started shifting into the dealer lanes in a huge fashion. There seems to be a little better quality car coming from the dealers.

“Our volumes are 90 percent dealer, 10 percent commercial.

“Normally it’s about 75/25.

It’s shifted quite a bit.

“We’re averaging about 750 bidder badges in the lanes, which is about the same as last year.

“We’re lucky to be centrally located in the middle of the Northeast/Mid-Atlantic corridor. So we have dealers from Baltimore, Washington D.C., Buffalo, Pittsburgh, Philadelphia, New York City and the New Jersey area.

“We have groups come in from Detroit, Denver and Salt Lake City area.

“Our average sale price overall is about $5,800.

“The nice cars are doing great.

“You can see one coming because the crowds follow it and the bidding goes crazy.

“One of our clients has a lot of late-model low-mileage Ford products, so we’re trying to get dealers in for those units.”

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COMPILED BY JEFFREY BELLANT

CHASE AUTO FINANCE HONORS TOP AUCTIONS

Photo by Jeffrey Bellant CHASE CUP: ADESA Cincinnati-Dayton General Manager Geoff Parker (second from left), receives the Chase Cup fortop national auction from Chase representatives (from left), Randy Beil, Darren Kelchner and Bruce Williams.

ADESA Cincinnati-Dayton won the 2011 Chase Cup for best national auction from Chase Auto Finance.

The award was presented during the recent 2011 National Auto Auction Association Conference and Expo in Chicago.

ADESA Cincinnati-Dayton also won the award for delivering the best regional performance for the Midwest.

The remaining regional awards were swept by Manheim, including Manheim Baltimore-Washington (Northeast); Manheim Atlanta (Southeast); Manheim Denver (Central) and Manheim Seattle (Western).

Chase also gave national awards to Columbus Fair Auto Auction (Ohio) for service delivery; ADESA Golden Gate (California) for highlines; Manheim Atlanta for custom finance and Manheim Pennsylvania for Internet live auction penetration.

The Chase Cup recognizes exceptional performance in retention, efficiency, expense control, accuracy, sales, operations and service delivery.

Chase reviewed the performance of its 26 best auto auctions from August 2010 through July 2011.

The review focused on how well the auctions handle sales and invoice processing, transport requests, title processing and other issues.

KIA MOTORS HONORS SALE KIA Motors Co. named Manheim Atlanta its Auction for the Year at the National Auto Auction Association’s annual Convention and Expo in Chicago.

Charlotte Pyle, NAAA president, presented the award during a luncheon.

Performance in all areas must be consistent and exceptional, while the auction must achieve a certain percentage of sold units and maintain or exceed the KIA national average retention levels by model.

“It’s always a difficult decision for KIA to select one auction out of the

many top quality, professional auctions that the company relies on to remarket its line of program vehicles,” Pyle said.

General Manager Pete Palmer and Commercial Account Manager Steve Balco accepted the award on behalf of the auction.

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

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Auctioneer Wins Top Award

Photo by Jeffrey Bellant TOP OF THE BLOCK: Paul Behr(left) receives the Bernie Hart Memorial Auctioneerof the Year Award at the NAAA convention. Bob McConkey (center) and Jay Cadigan presented the award to Behr.

By Jeffrey Bellant

CHICAGO - Longtime auctioneer Paul Behr won the 2011 Bernie Hart Memorial Award during the National Auto Auction Association’s annual convention and expo.

Bob McConkey, general manager of DAA Northwest, based in Spokane, Wash., presented the award to Behr.

“In my opinion,” McConkey said, “he is the strongest ambassador for the auctioneer in our industry today.”

Behr has been an auctioneer for 40 years.

He auctioneered real estate sales, charity events and auto auctions. But he’s spent 38 years in the auto auction industry.

McConkey said Behr’s biggest contribution to the industry is his devotion to training and educating the

next generation.

Behr is the owner and president of the Worldwide College of Auctioneering. He also owns the Auctioneering World Championship that honors the best in the auto auction business in an annual contest.

Behr thanked the past presidents who had chosen him for the award.

“I’m most grateful and humbled, ladies and gentlemen, to receive the (award),” he said.

Behr, who was born in Iowa, started his career in 1974 at Minneapolis Northstar Auto Auction, after serving as a Marine in Vietnam.

Overt the years, he has conducted more than 8,500 auctions.

He talked about all the general managers he had worked for and shared some anecdotes.

“Folks, it was a lot of fun,” he said.

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Disconnected Jottings From Tony Moorby...

I’ve been off the circuit for the last almost three months although I’ve managed to make it to a laptop.

I’m a veritable ‘rock garden’ when it comes to kidney stones, having dealt with 54 of

removal of the top half of my left kidney. Recovery from these traumas has been excruciatingly slow and yes, painful. I hope to be back at work in a week or so but am taking things very gingerly.

Tony Moorby • 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

them in the last 25 years.

Technology has some pretty neat ways of dealing with the normal little spiky stones – made, typically of calcium products and uric acid.

Urologists can blast ‘em out with shockwave treatment or even laser them into oblivion.

That was until I managed to manufacture the Mac Daddy.

A large stone would be two to three millimeters across.

Trust me – that can feel like the Rock of Gibraltar. This latest round was caused by one that was 18mm by 17mm and took three surgeries to remove, culminating in the

I tell all this as a prelude to observe that television is not worth a tinker’s cuss. At our house we allow ourselves access to some 400 channels and, for the most part, I wouldn’t give a dime for any of them. I’ve become a papfed, brain-fried zombie as a result of sitting in front of the haunted goldfish bowl for the last 60 days. In between, I’ve reread the complete series of James Bond novels by Ian Fleming – written in the ’50s’ and early ’60s, they cast a very different social commentary on things international – I’ll leave it at that.

Advertisements are even worse and test the mental stamina of even the most intellectually challenged observer. If an agency were to send me people dressed up as anything from a dollar bill to a dust mote, hamburgers and breakfast foods in between, I’d kick their sorry cans into the street with strict instructions never to darken my doorstep again. And the music is even more disappointing. The good news is that my dexterity with the remote control would now impress Mozart, even blindfolded.

This was a bad time to miss the National Auto Auction Association’s convention in Chicago – one of the only meetings I’ve missed since the early ’80s. Chicago’s a great town to visit anytime but especially at the end of summer. It’s clean, bright and as cheerful as a kid with a new penny.

Even worse, I missed three of my best friends hit the recognition roles.

Dan Kennedy from GM was inducted into the Hall of Fame – about time! He has been the power behind the bosses who’ve already been

C R O S S WO R D

inducted – some undeservedly so – and has been a stalwart supporter of the industry since he found us in 1983 or so.

Alexis Jacobs was handed the Pioneer Award. I’ve know Alexis for more years than I care to remember and all I can say or add to any accolade she’s already been given is that I’m proud just to know her. She’s been a shining light in one of the most challenging industries.

Then there was Tim West.

He, too, was inducted into the Hall of Fame. Tim is the Auction Vice President for Black Book and has held out the hand of diplomacy for and on behalf of our business for years. His ambassadorial skills are matchless and he orchestrates one of the finest industry receptions each year at the convention. The mainstay of

the sustenance provided by Black Book is a mountain of shrimp – mostly the size of babies’ arms! He’s one of my best friends and I love him dearly. He matches many of Black Book’s employees in representing our business. Tom Cross and Ricky Beggs have so easily taken over from previous heads.

Used to be that the convention was an excuse for a social boondoggle and changed to be more business-like. It’s shorter now to accommodate busier schedules.

Maybe I’m not one of the whippersnappers anymore but I miss the social side of getting together – golf games and the like and time spent propping up the bar swapping ideas with like-minded people.

And Chicago is surely the city in which to socialize.

To see past columns from Tony Moorby, log on to www.usedcarnews.com/ columnists/tony-moorby

Sponsored by INSURANCE AUTO AUCTIONS

By Miles Mellor 1

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Answers to this puzzle in the 10/17/11 issue. Call 1.800.794.0760 for a FREE subscription.

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34. Honda ____ GX 35. “The best things in life ___ free” 36. Chrysler Le_____ 37. Bentley ___ T 40. Going alone 43. Twofold

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