12/1/14 by Used Car News

December 1, 2014

ON THE WEB: Credit Union Execs See Growth in Auto Credit

A TransUnion survey found nearly 84 percent of credit union executives ranked auto loans as one of their top three areas for growth. By a 2-to-1 margin, auto loans were chosen as the top growth opportunity over the next 12 months relative to the next highest rated loan product mortgage loans.

New Cars Out of Reach For Many Consumers

Requisite Press LLC reported an October Auto Buyer’s Affordability Index (ABAI) of 54.1, indicating that a prudent, median-income household can only afford 54.1 percent of the new-car average price.

FTC Seeks Comment on Used Car Rule Changes

The Federal Trade Commission is seeking supplemental public comments on proposed changes to the agency’s Used Car Rule and the Used Car Buyers Guide. The commission is not adopting any final amendments to the rule at this time.

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CFPB Takes Action Against DriveTime By Ted Craig

The event buy-here, payhere dealers have dreaded for years has happened – the Consumer Finance Protection Bureau has taken action against a major player in the segment. Arizona-based DriveTime Automotive Group Inc. must pay $8 million to settle claims it harmed consumers by making harassing debt collection calls and providing inaccurate credit information to credit reporting agencies. DriveTime must also end its debt collection tactics, fix its credit reporting practices and arrange for harmed consumers to obtain free credit reports. “Consumers who purchase a car at a buy-here, pay-here dealer deserve to be treated fairly,” said CFPB

Director Richard Cordray. “DriveTime harassed and harmed countless consumers, many of whom were economically vulnerable. Our action forces DriveTime to

stores, DriveTime definitely qualifies as a “large participant” in this market. The CFPB said that at least 45 percent of DriveTime’s auto installment

ters and 80 contractors in Barbados. These employees and contractors placed tens of thousands of collection calls each weekday. At the end of 2013, DriveTime had approximately 69,000 installment contracts past due that these employees would have been calling about.

pay the price for its illegal debt collection tactics and for neglecting the accuracy of consumers’ credit information.” The regulator has been looking at the biggest operators in buy-here, pay-here for a couple of years. “The message is that it’s our turn,” said Ken Shilson, founder of the National Alliance of Buy-Here, PayHere Dealers. With more than 100

contracts were delinquent at any given time. When DriveTime consumers fell behind on their installment payments, DriveTime’s extensive collections operation began calling them. DriveTime had at least 290 collection employees in two domestic call cen-

Shilson said DriveTime’s size worked against it. “The bigger you are, the bigger target you are and the bigger the chance of something going wrong,” Shilson said. The violations the CFPB lists include many that indicate basic problems Continued on page 15

New York City Investigates Santander’s Finance Practices New York City’s Department of Consumer Affairs announced an investigation into used-car lending, issuing subpoenas to Santander Consumer USA Inc. and Santander Consumer Funding 3 LLC, auto finance companies owned by Banco Santander S.A. As the licenser and regulator of the city’s used-car dealerships, DCA is for the first time ever investigating used car dealer financing practices, in particular subprime loans underwritten by lenders such as Santander and arranged for consumers by the dealerships. This inquiry builds on DCA’s earlier investigations, which raised concerns that dealerships may be engaged in illegal practices such as sell-

ing expensive and unwanted add-ons and arranging highinterest subprime loans without providing consumers with required information. DCA’s investigation is focused on indirect auto loans financed by lenders such as Santander and will examine records of these loans over the past three years. New York law requires that if a dealership recommends a financing company such as Santander to a consumer, they must disclose the interest rate that the company can charge and other terms and charges, but DCA’s earlier investigations suggests that dealerships may not be complying with this requirement.

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Used Car Store Aims to Please Teens, Parents By Sheila McGrath

If you ask a teen what makes a great first car, they have just two requirements: It looks good and it has a good sound system. But the parents who are actually buying the car couldn’t care less about those things. It’s an old dilemma, but a Michigan dealer believes he has come up with a new solution. Joe Hood and partner Cheryl Luttman have developed a business with a focus on selling used vehicles just for teens. They have been testing and fine-tuning it at their dealership, Joseph Auto Sales, in Howell, Mich., for the past four years. Now, plans are in the works for Uncle Joe’s Auto Sales stores in the Michigan cities of Ann Arbor, East Lansing and Flint, and they hope to eventually open the stores across the United States. Hood and Luttman formerly ran the Joseph Auto Group in Michigan, with three new car franchises

VISION: This artist’s rendering shows what a Joe’s Auto Sales store will look like. Founders Joe Hood and Cheryl Luttman have plans for a national chain of stores that specialize in selling cars to teens and their parents.

and a handful of independent stores. But they ended up losing it all in the wake of the 2009 financial crisis. Hood said after that, he and Luttman had no desire to open another new car franchise. But in order to set yourself up as independent used car dealer, Hood said, “you need something to stand out from the crowd.” That “something” turned out to be an inventory tar-

geted specifically to young drivers and their parents. The biggest challenge has been finding just the right mix. But a series of focus groups helped them nail down what they were looking for. For the parents in the focus groups, the message was crystal clear: They wanted something safe for their child, something dependable, and something that’s

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affordable, Hood said. But when the teens came in the room, they had different ideas. “When you showed them safe, affordable and dependable – the car mom and dad wanted – the kids would wrinkle their nose,” Hood said. “That was a challenge, but we got over it, and we found the cars that we needed.” He cites the Ford Escape as

a model that can please both parties – it looks good, it’s fuel efficient, and the teen driver will have some metal around them. Under the Uncle Joe’s Auto Sales business plan, operators could open an Uncle Joe’s with $50,000 in working capital. The dealer/operator would initially own 20 percent of the business, with that percentage potentially growing up to 80 percent.

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USED CAR NEWS

NEWS BRIEFS Westlake Readies Production Center

Westlake Financial Services announced that it plans to open a new production center in Dallas in January, and expanded its senior executive team. The new production center will serve as a facility to provide improved servicing for current dealerships as well as the ability to increase the Westlake Dealer Network in one of Westlakeâ€™s largest markets. With the opening of the new location, Westlake will add more than 30 employees to its staff. In December, Westlake will begin the hiring process for the new positions that include dealer account managers, an internal sales team and supervisor roles.

helps dealers fill unsold service single, national automotive lending capacity. company. As a part of the Cox Automotive The combined company will have software division, Xtime will retain total assets in excess of $2 billion. its current leadership and brand. On a combined basis the platforms currently originate approximately $1.2 billion of annual volume and NextGear Capital Sells Notes employ approximately 600 emNextGear Capital Inc. recently ployees. Headquartered in Chadds announced that NextGear Floorplan Ford, Pa., with operational offices in Master Owner Trust successfully Irvine, Calif., Phoenix and Irving, completed the sale of $433.333 mil- Texas, the combined company will lion of privately placed 144A Asset- have a network of more than 7,700 automotive dealers nationwide, as Backed Notes, Series 2014-1. Rated by Moodyâ€™s and DBRS, the well as from an active direct lending securitization transaction includ- division. The merger is subject to the ed the issuance of $400 million of â€œAaa/AAAâ€? rated Class A Notes as receipt of certain regulatory approvwell as $33.333 million of subordinated â€œA2/Aâ€? rated Class B Notes.

Cox Buys Service Solution

PE Firm Merges Creditors

Cox Automotive announced the acquisition of Xtime. Based in Silicon Valley, Xtime provides a vehicle service and repair software solution for automotive retailers and manufacturers, which helps dealerships attract and retain service and repair customers while helping manufacturers build brand loyalty. The companyâ€™s products help dealers manage their service operations through integrated service scheduling, marketing and check-in.Carolina_UCN .pdf 1 11/20/14 Additionally, Xtimeâ€™s solution

Perella Weinberg Partners Asset Based Value Strategy (ABV), a unit of private equity firm Perella Weinberg Partners, will merge its two auto loan origination and servicing platforms, Flagship Credit Acceptance and CarFinance Capital, into a C R O S S WO R D by Myles Mellor

PAGE 21 11:01 AM

als and other customary closing conditions for a transaction of this type.

CarMax Opens New Store

CarMax Inc. officially opened its second store in Raleigh, N.C. The store is more than 50,000 square feet, occupies more than 16 acres and stocks more than 300 used vehicles. CarMax is now hiring for more than 50 positions for the companyâ€™s new store in Warrensville Heights, Ohio. The new store, which is more than 40,000 square feet and is the fifth CarMax location in Ohio. It is scheduled to open in February.

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 Editorial: Ted Craig, Managing Editor Jeffrey Bellant, Staff Writer Contributing Writers: Ed Fitzgerald, Jenny King, Sheila McGrath Columnist: Tony Moorby Advertising: Shannon Colby, Account Manager Megan Frump, Account Manager Marie Hingst, Account Manager Circulation: Helen Thomas

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Production: Josie Godlewski, Media Manager Tim Montie, Graphic Designer â€”â€”â€”

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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 any advertisements. All Rights Reserved. Reproduction in any form is prohibited without the written consent of the publisher. É&#x; É&#x; É&#x; Please submit clear, legible copy. Payments from first time advertisers must accompany the insertion order. Distribution is guaranteed by U.S. Postal Carriers. The advertising reservation deadline is 5:00 p.m. Friday, 10 days prior to the issue date. Camera ready ads must be received by noon on Monday prior to the issue date.

Join the Conversation! Visit Used Car News online at www.usedcarnews.com or scan this QR code with your smartphone to be taken directly to the website.

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IADA Battles Plan to Ban Sales of Recalled Units By Jeffrey Bellant

Leaders representing independent auto dealers urged New York City officials to drop efforts prohibiting used-car sales on vehicles with open recalls.

cording to DCA Commissioner Julie Menin. The city has extended to Feb. 2 the original Sept. 4 deadline for dealers to respond to the subpoenas, said Paula Frendel, New York IADA’s executive director.

be why the deadline has been extended. Frendel, and Shaun Petersen, general council for the NIADA, addressed the committee in opposition to the city’s plan to make usedcar dealers fix open recalls

“Since dealer plates are a limited resource,” Frendel said, “this basically puts the dealer out of doing any other business during the time that their cars are being repaired.” Paula Frendel The New York City Council held a special Oct. 28 committee hearing on the issue and heard from the National Independent Automobile Dealers Association and the New York IADA. The hearing follows the Department of Consumer Affair’s move to subpoena 200 used-car dealers over allegedly selling cars with open recalls. In July, the DCA issued the subpoenas to seek “records of which recalled cars were sold unrepaired and to whom,” ac-

The extension does not waive the dealers’ obligations, or the department’s rights to seek remedies or relief for any violations of those remedies, according to the DCA. Fred Donnelly, president of the New York IADA, said the meeting brought a lot of information and concerns to city officials about the negative effects of a prohibition. Association officials believe city officials are taking their comments and concerns seriously, which may

prior to sale. Frendel told the committee in a prepared statement that the city’s plan “simply will not work.” She said having used-car dealers fix open recall repairs means they would have to bring the vehicles to a franchise dealer. But since franchises will not accept a car without a proper plate at the time of repair, independents would have to use dealer plates. “Since dealer plates are a limited resource,” Frendel

said, “this basically puts the dealer out of doing any other business during the time that their cars are being repaired.” Plus, a franchise needs time to order the part and do the repair, which also restricts an independent’s efforts to sell the car. Frendel added that the city’s proposal doesn’t discuss how to deal with curbstoners. Peterson added that independents have no more information than a typical consumer, since recalls are handled between the manufacturer and the consumer via the National Highway Transportation and Safety Administration. Manufacturers only allow their dealer networks to repair the recalled vehicles, Petersen said. Often, the independent dealer doesn’t have the car long enough to be notified of a recall. Peterson said historically, the only way to obtain information about whether a specific VIN was subject to recall was from the manufacturer or the franchise

dealer. Many times, they do not share this information with independent dealers. Petersen also said the recall issue should make a distinction between safety issues and those that have no impact on the safety or driveability of the vehicle. The other issue is since independents are in competition with franchise dealers, it could result in the franchise dealer putting the independent’s car “to the back of the line,” he said. Petersen said NIADA is open to discussions requiring a dealer to provide the customer with a copy of the recall database information pertaining to a particular VIN - but just the information. He also suggested that any requirement should protect dealers from any mistakes in the recall information provided by a NHTSA data provider. “I think total disclosure for the consumers is important,” Donnelly said. “The dealers in our association want to let their customers know (about recalls).”

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State Fixes Wholesale Loophole By Jeffrey Bellant

Indiana wholesale dealer licenses will cease to exist July 1, 2015, following efforts by auto industry advocates and Indiana lawmakers to fix a loophole in the previous law. In 2011, the National Auto Auction Association updated its members during a convention about the problem of wholesale dealers skirting the requirements for a physical location. Companies were buying up warehouses and using them to provide multiple addresses to people seeking dealer licenses. Internet websites were even available to help dealers set up an address, whºether or not dealers had an office, desk or phone, according to the NAAA. One of the concerns was that people abusing the wholesale license law were actually based outside of Indiana. At one point, Massachusetts auctions reported an unusually high number of bidder badges from Indiana, according to the National Auto Auction Association. Over the last several years, the NAAA and Indiana Independent Automobile Dealers Association have worked with state officials and lawmakers to solve the problem.

Some changes were made last year, according to Michelle Mallon, ADESA’s vice president of legal. “I was involved (in 2013) with some requested changes to make it more difficult for out-of-state people to be able to get a dealer license,” she said, “and we were successful in those changes.” Earlier this year, the Indiana General Assembly passed laws eliminating wholesale licenses entirely after June 30, 2015. The Auto Dealer Services Division announced at its website that it has created “Administrative Emergency Rules to provide options for valid wholesale dealers.” Wholesalers have the option of transitioning to a used-car dealer license, provided they meet the requirements for used car dealers. They can also choose to remain wholesalers until June 30, 2015, when they will have to surrender their plates and license. Wholesalers and dealers needing information on the requirements should visit the Indiana Secretary of State’s Auto Dealer Services Division website. The must notify the Auto Dealers Services Division on or before the June 30, 2015 deadline. An official for the Indiana IADA did not comment.

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PAGE 8 - GIVING BACK

Auctions Find Many Rewards in Giving Back to Their Communities Many businesses make a point of giving back to their communities during the holiday season and it’s no different in the auction industry. ADESA is doing something different by combining its 25th anniversary with its

friendly competition. After general manager Cindy Kuhn received information about the charitable campaign from ADESA, she talked to the staff about each person picking one item for their service. But during the discussion, some of the men were saying

together, it’s a positive, she said. “It’s just another way for us to be family,” Kuhn said. ADESA Dallas general manager Ken Osborn said the auction is in one of the rougher areas, so the staff is already aware of the struggles of people during

holiday giving effort to create “ADESA 25 Deeds for 25 Years.” Each of the 65 ADESA auction locations across North America, along with all ADESA office locations, will strive to perform 25 fun acts of goodwill to benefit each local community, through the end of the year. “We wanted to find a way to celebrate 25 years in business that not only included all of our locations, but also showed our appreciation for our customers and benefited our local communities,” said ADESA CEO Stéphane St-Hilaire. “This is a unique opportunity to add some creativity to our acts of kindness, and of course, encourage a little friendly competition between our locations.” ADESA Colorado Springs has turned the 25 Good Deeds campaign into a

that they would do better than the women. “So I got the idea that we should do a contest – guys against the girls,” Kuhn said. “This way, we could (double) our ‘25 Good Deeds’ to make 50, with each group able to do the list.” So taking a sign with the checklist, ADESA Colorado Springs has drawn a line through each box, with half the box being pink and the other being blue, Kuhn said. At press time, the score was 12 to 7, in favor of the women, Kuhn said. She said these types of efforts are good for auctions and their employees. “The auction culture creates teamwork,” she said. “If we’re going to be successful, we all have to (aim) for the same goal.” Anytime Kuhn can direct her staff toward a goal

the holidays. He said even some of the part-time employees and drivers have “tough lives,” so helping people in theses areas is important.

By Jeffrey Bellant

Jodie Davila, marketing specialist for ADESA Dallas, said her auction had already punched out several of the items on the list before Thanksgiving. “My goal is to hit all 25,” Davila said, “whether it means to do everything (specific) thing on the list, or something similar.” Employee Melanie Millsap drew up positive messages and posted them in a public restroom, a place one normally wouldn’t see positive messages. Another person brought their co-workers homemade treats and another left a stack of quarters on a candy vending machine, Davila said. “We’re also working on a blanket and coat drive,” she said. At press time, she was planning a dessert social for residents of a nearby assisted living home. “We’re also going to deliver flowers to a nursing home and send letters and pictures to troops,” Davila said. Davila’s goal at ADESA

Dallas was to have every member of her department pick one of the 25 deeds to complete, with photos showing the people in action. She said focusing on the surrounding area was appealing, since there are so many people who are hungry, homeless or less fortunate. “For me, to help our communities locally is important to my heart,” she said. Manheim Pennsylvania’s holiday efforts continue a long tradition of supporting local Lancaster County by focusing on the nation’s military men and women. The auction is participating in “Wreaths Across America,” a program that places wreaths at veterans’ cemeteries across America, and at other locations. The auction kicked off a six-week long program with a Veteran’s Day celebration that featured the installation of 2,000 flags around the 400-plus acre facility to honor Lancaster County veterans. In addition, the auction also donated $1,500 to Wreaths Across America and another $1,000 to Vet21Salute, a local military honor guard. The auction will participate in a wreath-laying ceremony at Fort Indiantown Gap Cemetery in nearby Annville, Pa., on Dec. 13. Employees and customers of Manheim Pennsylvania will provide 100 wreaths that will be laid at the graves of 100 veterans. “We are so very proud to support our community and our veterans,” said Julie Picard, general manager. “We are delighted to support Wreaths Across America and honor our veterans.”

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CHARLESTON, W.Va. (AP) – Mark Maynard owns a used-car lot, runs a towing business and spends his spare time on a professional drag racing pit crew. And despite not raising a dime for his Republican campaign and agreeing with his Democratic opponent on almost all the issues, he defeated West Virginia’s longest-sitting state senator. That was the kind of election it was for West Virginia Democrats. As voters took out their disgust with President Barack Obama, Maynard defeated Sen. Truman Chafin, a lawmaker Republicans previously had bothered to challenge only once in three decades. The same momentum helped Republicans win a U.S. Senate seat held for decades by a Democrat, sweep three congressional seats and take majorities in the Legislature for the first time in eight decades. “Everybody’s low approval rating of the president and the way he was running the country, I got some votes through that,” Maynard said. Chafin, a Mingo County lawyer and once longtime Senate Majority Leader, had faced only a handful of scares since first winning his seat in 1982. All of them came from other factions of Democrats, though. Before this election, Republicans only once fielded a candidate

against Chafin in southern West Virginia, a 1990 landslide victory for the senator. Democrats maintain huge registration edges statewide, and in each of Senate District 6’s four counties. McDowell and Mingo went for Chafin, but Mercer and Wayne, Maynard’s home county, voted for the Republican. He eked out a win by less than 2 percentage points. After the defeat, Chafin had only positive words. He commended his opponent for running a clean campaign. “Life is an attitude, and it is important to have a good one,” Chafin said in a statement after the loss. “As I hear in church each Sunday morning - wherever you are, the good Lord has put you there. He has something he wants to do through you right where you are.” Not a single campaign check came Maynard’s way, nor did he report spending anything. Potential donors told Maynard he didn’t have the right political background, he said. Instead, he knocked on doors and networked. Maynard paid out of pocket for some election supplies and someone donated $350 worth of yard signs. Continued on next page

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Election

– from prior page

He printed pamphlets listing his stances and hobbies: working on a fly-in pit crew for funny-car drag races; playing guitar and singing country and gospel music; and trail riding in his 1982 Chevy 4x4. Maynard, chairman of the Wayne County GOP, didn’t show much promise in a 2008 Senate bid. He lost almost 2-to-1 against former Democratic Sen. John Pat Fanning. Nothing seemed out of the ordinary for Chafin, who was unopposed in his primary. He spent about $14,600 through mid-October, most

of it for radio ads before late May. But in West Virginia’s lowestturnout general election in at least 64 years, voters largely showed up at the polls angry at the president. Both candidates stressed support for the coal industry and opposition to Obama’s energy push; both opposed gay marriage; and both urged more action on the King Coal Highway to connect the region to the rest of the state better. “I think it’s not necessarily dissatisfaction with him,” Maynard said of Chafin. “It’s just dissatisfaction with the party.”

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Manheim Upgrades Offerings Manheim has revved up its search and sales functions on Manheim. com and OVE.com. These enhancements, which took effect last month, are designed to help buyers find relevant inventory quicker and make the sale process easier and faster. A]ffa^]j â€œThese chang<__]jl es come from buyer suggestions and our research,â€? said Jenifer Eggert, Manheimâ€™s vice president of digital services. â€œOur customers want and need a faster and easier way to search for and bid on inventory. They have asked for this, and Manheim has delivered with these great new enhancements.â€? As part of the rollout, the floor price can be reached within three bid submittals on OVE.com, and only vehicles priced at or below 120 percent of Manheim Market Report (MMR) will be displayed in search results. Additionally, only vehicles with condition reports will be displayed in initial search results, and the

success and facilitation fees will be combined into one single â€œSell Fee.â€? Dealers have shared with Manheim that setting the starting bid significantly lower than the floor price can extend the sales process. Under the new system, if a starting bid is more than three bid increments lower than the floor price, the starting bid will automatically be raised to three bid increments below floor price. According to customer research, buyers are most interested in vehicles that are priced closest to MMR. With changes to the filter settings, customers can find vehicles closest to MMR prices on OVE.com. Buyers will still be able to adjust their filters to see vehicles without an MMR value. Online buyers have shared with Manheim that they want access to condition report information and images to help make their buying decisions with more confidence. Although buyers can adjust their filters to allow them to see all vehicles, with the new OVE.com policy changes, buyers are encouraged to include condition information and images on all vehicles in their searches. The success and facilitation fees have not changed, but they are now being displayed differently.

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â€“ Continued from page 1

with the collection operations. DriveTime collectors are accused of harassing customers at work as well as harassing their references. They are also said to have made repeated harassing calls to wrong numbers. DriveTimeâ€™s other issue involved credit reporting. Only the largest buy-here, pay-here dealers report information to the credit bureaus. The CFPB said DriveTime personnel provided inaccurate information and mishandled disputes about accuracy of the data. DriveTime said in a press release that it began taking steps to address these actions before the

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Dealer Denies He Clocked Cars FOREST PARK, Ga. (AP) â€“ Clayton County prosecutors say the owners of two used-car dealerships who are accused of rolling back vehicle odometers have been arrested. District Attorney Tracy Graham Lawson says father and son owners of JDâ€™s Auto Sales, John Egbe and Sylvester Egbe, were arrested Nov. 13. Georgia Department of Revenue agent Richard Trinkwalder says theyâ€™re both charged with false

swearing and title fraud. Trinkwalder says racketeering charges could also be filed against the men, who run dealerships in Clayton and DeKalb counties. Georgia Department of Revenue Investigator Josh Waites tells the Atlanta Journal-Constitution state officials have evidence that the men manipulated vehicle odometers by hundreds of thousands of miles. John Egbe denied the allegations.

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11/24/14 4:06 PM

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Manheim has promoted general managers at several of its auctions. Manheim has promoted Mandy Savage to general manager of Manheim Detroit. Savage will be responsible for leading auction activities, improving customer service and driving business efficiencies. Savage, who previously served as Mandy assistant genJYnY_] eral manager at Manheim Palm Beach, will report to Randy Beil, Manheim’s market vice president for the North Central Market. During her tenure at Manheim Palm Beach, she held two of the most successful One Hundred Grander Sales in its history, including the sale of a 2008 Bugatti Veyron for $1 million, the highest-selling auction vehicle on record for Manheim. Prior to her position as assistant general manager, she served as director of best practices for Manheim Digital, and held roles as manager of online training and sales executive for OVE.com. Savage holds a bachelor of arts in education from the

University of Mississippi. Manheim has promoted Alex Fraser to general manager of Manheim Portland. A 13-year veteran of Manheim, Fraser has worked at auction locations and at the corporate level in sales for the company. Fraser comes to Portland from Manheim Statesville, where he served as assistant general manager since 2012. During his career with Manheim, Fraser has held various positions, including national client operations manager, in-service coordinator and manager of the online trade desk. In his previous roles, Fraser was a member of the teams that helped build and develop OVE.com and Simulcast Everywhere. Manheim has promoted Ryan Mason to general manager of Manheim Fort Lauderdale. A 14-year veteran of Manheim, Mason comes to Fort Lauderdale from Manheim Darlington, where he served as general manager since 2011. Mason joined Manheim in 1998 as a management trainee at Manheim Lakeland. During his career with the company, Mason served as assistant general manager, factory manager, vehicle inspection manager and vehicle registration supervisor at Manheim Atlanta.

Manheim has promoted Jeff Modjeski to general manager of Manheim Dallas. A 16-year veteran of Manheim, Modjeski comes to Dallas from Manheim Fort Lauderdale and Manheim Palm Beach. He became general manager at both those locations in January 2011. Modjeski has held a variety of roles at Manheim, including general manager at Manheim New Orleans, assistant general manager at Manheim Central Florida, auction manager at Manheim Australia and controller at Manheim Cincinnati. He joined Manheim as assistant controller at Manheim Orlando in 1998. Manheim has promoted Christina St-Germain to general manager of Manheim Montreal. St-Germain previously served as assistant general manager. The bilingual St-Germain (French and English) joined Manheim in 2013. Prior to joining Manheim, StGermain served as Quebec regional manager for DMT Development Systems Group of Winnipeg, Manitoba, from 2011-13. DMT is a privately owned solution developer for the automotive industry. Manheim has promoted Toni Williams to general manager of Manheim Daytona Beach and

Jacksonville. An eight-year veteran of Manheim, Williams became assistant general manager at Manheim Jacksonville earlier this year. She joined Manheim in 2006 as assistant team manager at the company’s customer service center in Maitland, Fla. Williams became marketing manager at Manheim Central Florida in 2008. During her Manheim career, Williams also served as director of field marketing strategy through the corporate office in Atlanta, and was promotions and marketing manager for four locations in Florida: Manheim Orlando, Central Florida, Daytona Beach and Jacksonville. Manheim has promoted Robert Zakaib to general manager of Manheim Palm Beach. A 20-year veteran of the auto remarketing industry, Zakaib became assistant general manager for recon and operations at Manheim Orlando in December 2007. Zakaib worked for Manheim Lauderdale/Miami for 13 years before joining Manheim’s collision center as a manager in Orlando, Fla., in 2004. During his career, he has also worked as recon manager at Manheim Central Florida, and was best practices manager and general operations manager at Manheim Orlando.

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RETAIL MARKETS GEORGIA

David Mosley, owner, Cherokee Auto Group, Canton, Ga.: “We’ve got 215 to 220 units in inventory. I have two acres and the building is a little over 11,000 square feet. We rotate them, so we have anywhere from 80 to 90 that are available online for sale. “Our front, we have 40 to 50 units. That we have a showroom I put 20 or so in. Then I have a warehouse where I can put another 20 or so in. “I’m selling about 25 to 30 per month. We’ve improved it a little bit from this time last year. I work things a little differently. If I buy something for $1,500 and know that if I do a few things to turn (a good profit), I won’t be in a big hurry to turn it (for less). “We basically do no buyhere, pay-here. We do either finance or cash. I might do some in-house if I get most of the money. “I do have several subprime lenders. About 35 to 40 percent of my sales

are subprime. “The average price on the lot is about $10,000. “We deal in cars that are one-year old or 50 years old. We even deal in some collector cars. For example, I just recently sold a 1979 Lincoln that’s going to Denmark. “For us, it just has to be the right vehicle – documented with a good history – and some originality. “I’ll also keep a 2013 Camry or a 2004 Jetta. We’ll keep those out in the front. I leave a lot of my older stuff inside or in the warehouse. “Most of my collector-type cars are sold online. If it’s a car in the 1970s or 1980s, it does well for us, if it’s a nice car. “About 30 to 40 percent of my inventory is just normal, run-of-the-mille cars, with an average model year of 2006 to 2008. “The rest could range from the 1940s to the 1980s. “About 60 percent are domestics and 15 percent of my inventory is trucks. “Average reconditioning is about $1,000. But we’ve

Compiled by Jeffrey Bellant been trying to gear towards less project-type stuff. “We use Cars.com and eBay. We’ve moved away from Craigslist since they charge you as a dealer now. “We recently sold a 1970 Ford truck. It had 34,000 miles on it. It was just somebody’s little baby. That one brought about $11,400.”

NEBRASKA

Debby Chesterman, dealer principal, World Auto Sales, Nebraska City, Neb.: “We have one location. We’ve been in business since April 2006. “We got (hurt) because of how the banks cut back in 2008. It was kind of a traumatic situation. “Right now, we have around 30 (units). We’ll be bumping that up to 40 pretty quick. We’re ahead of last year in sales. “I (attribute) that to smarter choices in inventory and more confidence on behalf of the buyers. “We get about 80 percent of our vehicles from Manheim auctions. We use a

number of them. We also get a lot of trade-ins, but most come from Manheim. “Our average retail price is about $11,000. That’s lower than last year. “I took the Certified Master Dealer class at National Independent Automobile this year. It was tough, but it helped me to analyze who my customers are and what kind of vehicles they want. It helped me to change what I was doing. “I learned a statistic that 68 percent of all buyers are not going to qualify for a prime interest rate. So, with that number, we decided we needed to get more vehicles under $10,000, even if we have to pay too much for the vehicle. “Right now, probably about 72 percent of my deals are prime. But I’m trying to start catering to that 68 percent of (subprime) buyers. I realize that I had the inventory for the prime buyer, but I needed to appeal to the subprime buyer. “Average model year is around 2007. The mileage is under 100,000, on aver-

age. But it’s been very hard to get those cars. We’re trying to educate people that you just can get the 7-yearold vehicle with 30,000 miles on it. Everyone has to move up on the mileage they carry. “I try to keep a third of my inventory into trucks and sport utility vehicles. The other two-thirds is in cars and vans. “Our average recon costs are $500 to $600, which is pretty similar to last year. “For advertising, we do the Internet almost exclusively. I’m talking the big companies like Cars.com, AutoTrader.com and TrueCar.com. Of course, we also have our own website. But we’re trying to market the subprime aspect of our business. “We also do a little bit of print, but that’s full-color fliers that are put into newspapers. “We recently sold a 2003 Cavalier, That one had 78,272 miles on it. So that was rare. We got $4,400. We had 15 inquires from the Internet on that.”

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WHOLESALE MARKETS MONTANA

ONE-STOP SHOPPING

Terry Scheetz, general sales manager, Auto Auction of Montana, Billings, Mont.: “We’ve been in business for 11 years. “We have four lanes. Most of the time, we run three, except on our anniversary (or special sales). “We’ve been running between 500 and 600 each week. It’s about the same as this time last year. It hasn’t changed too much. “With November done, December will probably start to slow down a little, move closer to the 500 (number). “We’ve actually been over 50 percent most of the time. During the past month, we were averaging 46 percent, because it slowed down a little bit in November. (I attribute it) to the weather and cars not being as plentiful. “I‘m looking at 150 to 200 dealers in the lanes. That’s the same. But the Internet has picked up more than it used to be. “We use Ringman. We’re

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getting more bidders and buyers. When we started, we only ran one lane with Ringman, but now all the lanes run it. “We get both dealer consignment and fleetlease. About 30 percent is fleet-lease. That hasn’t changed much. We’ve actually picked up more of the dealer consignment. “The oil boom has helped out. The dealers (in the oil boom areas) are so far out, we even send our truck lines out there to bring the cars back to recon them here and take them back to them. They just can’t get service done (because it’s so busy). “October was our biggest month since we’ve been in the business, but I have no idea why. “The entire year has been good for us. “We’ve been running GSA sales once a month. We’ll run about 30 to 40 units. We get trucks, buses, school buses and sport utility vehicles from the government. They sell them all. When you get GSA, you pretty much can bank it. “The average price

Compiled by Jeffrey Bellant is $11,770. “That’s comparable to last year, which was $12,403. “The older fleet-lease stuff, honestly, struggles a bit, compared to the dealer consignment. “If the rest of the year continues like it has, it will be a great (finish).”

OHIO

Robert Fahey, co-owner, Value Auto Auction, Crooksville, Ohio: “Our 11th year starts Jan. 1. “We’re running four lanes and we have four. “Volumes have been extremely good recently. Yearto-date, we’re up 30 percent. We’re running about 450 a week. “Our sales percentage is higher than last year, our consignment is higher. Year-to-date, sales percentages are 54 percent, but in the last month we’ve been up in the 60s. “I (attribute it) to hard work. I also think the economy is improving a little bit. We’re probably up 100 percent from 2009. “We have a (30-day) float sale every other week. So on

those weeks, we’re averaging about 210 dealers. “Dealers are coming mostly from Ohio, northern West Virginia, Kentucky, a couple from Indiana and even had a dealer from Michigan the other day. “I think it’s been a pretty good year for dealers, but they are still shell-shocked (from the recession). “They know it’s better, but they aren’t sure it’s going to stay better. Their (attitudes) are, like, ‘I don’t know what tomorrow is going to bring.’ “Our growth has been steady. It’s been up all year long. “We had to change some stuff, like some of our marketing and what we concentrate on. “We want to sell cars. We’re not here to have a parade of cars. We want to sell them. It’s about working with the sellers and working with the buyers to get cars sold. “We’re still 90 percent dealer consignment. The rest are bank repossessions and a few fleets, but not a lot.

“The average price is right around $4,200, which is up about $400. I think the quality of our cars has improved. I think we might have flushed through a lot of the high-mileage cars, though we still have some. “Simulcast has been picking up. We’re getting the bids and we’re actually selling about 12 to 15 cars each sale. “We also have a specialty sale with powersports (items). We had one sale in April. It went well. I think there were 125 units. “Typically, our trucks and sport utilities are doing well. “Even the cars, from imports to domestics, seem to be hitting on all cylinders. “If I had to pick one thing that was soft, I’d say it was minivans. “We finished (a building project) this year, and we’re expanding our lot to hold another 350 cars, for a capacity of around 800 to 850. “We also added a test track this year. We’re just waiting for the fencing to be completed.”

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TRUE COST OF INCENTIVES (TCI) October-13

Compact Car

TCI $1,528 1 $13,293 2 $12,058 3 $11,113 4 $8,519 5 $7,284

Subcompact Car TCI $1,117 1 $12,028 2 $10,906 3 $9,003 4 $7,364 5 $6,142

Midsize Car

TCI $2,161 1 $14,317 2 $13,910 3 $12,446 4 $10,298 5 $8,391

Large Car

TCI $3,205 1 $18,710 2 $16,483 3 $13,320 4 $10,697 5 $8,626

October-14

Change ‘13-’14

$1,912 25.13% $13,069 -1.69% $11,851 -1.72% $10,783 -2.97% $9,008 5.74% $7,413 1.77% $995 -10.92% $11,990 -0.32% $11,011 0.96% $10,230 13.63% $7,818 6.17% $6,702 9.12% $2,110 $15,467 $13,591 $12,143 $10,371 $9,033

-2.36% 8.03% -2.29% -2.43% 0.71% 7.65%

$4,122 28.61% $18,559 -0.81% $15,601 -5.35% $14,427 8.31% $11,370 6.29% $8,994 4.27%

October-13

Entry Luxury Car

TCI $805 1 $20,304 2 $18,359 3 $15,966 4 $14,350 5 $12,046

Large Truck

TCI $3,976 1 $26,312 2 $24,365 3 $20,638 4 $17,399 5 $15,517

Minivan

TCI $2,646 1 $19,103 2 $20,494 3 $14,794 4 $11,720 5 $9,844

Entry Sport Car

$2,245 $21,034 $19,452 $16,630 $13,417 $11,729

-7.35% -0.42% 1.27% 0.82% -1.62% 1.15%

Midsize Traditional Suv TCI $1,390 1 $26,146 2 $24,208 3 $18,147 4 $13,492 5 $12,439

$1,635 17.63% $24,811 -5.11% $22,714 -6.17% $20,866 14.98% $16,961 25.71% $13,639 9.65%

Large Crossover Suv TCI $3,462 1 $26,266 2 $22,047 3 $18,165 4 $14,890 5 $13,611

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$3,632 $25,010 $21,760 $19,372 $15,269 $12,657

4.91% -4.78% -1.30% 6.64% 2.55% -7.01%

October-14

Compact Truck

Midsize Crossover Suv TCI $2,423 1 $21,123 2 $19,208 3 $16,495 4 $13,638 5 $11,596

October-13

Premium Sport Car

TCI $3,636 1 $32,997 2 $29,668 3 $25,802 4 $20,823 5 $17,218

Van

$1,489 14.01% $18,214 6.36% $15,778 0.63% $14,145 0.35% $11,829 2.89% $10,252 5.92%

Change ‘13-’14

Large Traditional Suv

Compact Crossover Suv TCI $1,306 1 $17,125 2 $15,680 3 $14,096 4 $11,497 5 $9,679

October-14

TCI $2,532 1 $17,514 2 $16,217 3 $12,445 4 $10,583 5 $10,039 TCI $1,798 1 $22,117 2 $20,375 3 $19,528 4 $15,407 5 $11,722

$2,561 -29.57% $33,401 1.22% $29,137 -1.79% $25,958 0.60% $22,669 8.87% $17,432 1.24% $482 -40.12% $21,408 5.44% $19,463 6.01% $16,606 4.01% $14,712 2.52% $12,985 7.80% $4,056 $27,607 $25,139 $22,139 $18,853 $16,767

$2,216 -16.25% $20,522 7.43% $19,514 -4.78% $17,423 17.77% $12,272 4.71% $9,597 -2.51% $2,223 -12.20% $18,467 5.44% $16,494 1.71% $14,413 15.81% $10,877 2.78% $10,349 3.09% $1,784 -0.78% $20,143 -8.93% $19,089 -6.31% $18,586 -4.82% $16,292 5.74% $13,130 12.01%

Midrange Sport Car TCI $1,352 1 $40,968 2 $35,932 3 $29,577 4 $27,709 5 $21,553

2.01% 4.92% 3.18% 7.27% 8.36% 8.06%

$1,769 30.84% $41,176 0.51% $34,102 -5.09% $31,647 7.00% $27,848 0.50% $24,154 12.07%

TCI $1,944 1 $70,546 2 $65,552 3 $43,130 4 $47,435 5 $36,779 TCI $3,202 1 $25,481 2 $24,020 3 $19,670 4 $17,470 5 $14,008

Change ‘13-’14

$1,943 -0.05% $75,706 7.31% $61,043 -6.88% $62,745 45.48% $41,240 -13.06% $41,899 13.92% $2,415 -24.58% $25,802 1.26% $21,720 -9.58% $20,706 5.27% $16,526 -5.40% $14,059 0.36%

Entry Luxury Suv TCI $2,237 1 $30,407 2 $26,977 3 $24,204 4 $18,859 5 $14,844

$1,646 -26.42% $30,193 -0.70% $26,526 -1.67% $23,517 -2.84% $19,599 3.92% $15,699 5.76%

Midrange Luxury Car TCI $4,561 1 $38,193 2 $35,738 3 $26,571 4 $20,703 5 $15,625

$2,862 -37.25% $36,363 -4.79% $32,463 -9.16% $28,734 8.14% $20,827 0.60% $16,631 6.44%

Midrange Luxury Suv TCI $1,860 1 $42,512 2 $37,311 3 $30,300 4 $26,084 5 $20,418

$1,183 -36.40% $42,179 -0.78% $36,496 -2.18% $29,915 -1.27% $25,538 -2.09% $20,833 2.03%

Premium Luxury Car TCI $3,502 1 $59,598 2 $51,798 3 $41,008 4 $34,451 5 $26,455

$2,676 -23.59% $59,558 -0.07% $47,366 -8.56% $41,092 0.20% $34,234 -0.63% $26,977 1.97%

Premium Luxury Suv TCI $2,111 1 $50,101 2 $44,191 3 $35,493 4 $31,553 5 $23,171

$2,344 11.04% $53,989 7.76% $45,079 2.01% $39,693 11.83% $29,743 -5.74% $26,355 13.74%

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.

11/21/14 9:22 AM

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Compiled By Jeffrey Bellant

EXEC WINS TECH AWARD

WOMAN OF THE YEAR: Manheim’s Janet Barnard accepts the 2014 Woman of the Year in Technology Award. She won in the enterprise/large business category.

Manheim North America Executive Vice President and Chief Operating Officer Janet Barnard was selected by Women in Technology as the winner of the 2014 Woman of the Year in Technology Award that recognizes the accomplishments of Georgia’s top women leaders and the impact they’ve made in their community. Barnard was selected as the winner in the enterprise/large business category during the annual awards gala at the Georgia Aquarium. “Janet is a valued member of the Cox Automotive leadership team, and we congratulate her on this well-earned achievement, said Sandy Schwartz, president of Cox Automotive. “Janet has been instrumental in developing innovative business solutions, delivering a great experience for our customers and serving as a role model to women.” Each year, WIT recognizes the accomplishments of Georgia’s top women leaders in STEM (science, technology, engineering and math) and the impact they’ve made in their communities. “I am truly inspired and honored to have been selected by Women in Technology as the winner of this leadership award,” said Barnard.

Auction Adds Lane, Sale Day

As Sparkling City Auto Auction of San Antonio marked its fourth year in operation, the auction opened a sixth lane and has added a second sale day to its weekly calendar. “Needing more room to grow is an exciting opportunity for us at Sparkling City Auto Auction of San Antonio,” said owner Wade Walker, who opened the facility in November 2010. “We started out with four auction lanes and added a fifth last year. Now we’re adding our sixth lane and have added a second sale day on alternate Thursdays to keep up with rising demand and to best serve our customers.”

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Walker reports that the new lane opened on Nov. 11, at a sale that included 650 vehicles and a crowd of 350 dealers. The new sale - which will start at 4 p.m. – will be a biweekly event through the end of the year. It will become a weekly sale beginning in January, Walker said. We invite news items and top-quality photos from our readers to be considered for “Around the Block.” Please include the name of a contact person and a telephone number. Send items and photos to: Jeffrey Bellant Mail: Used Car News, 24114 Harper Ave., St. Clair Shores, MI 48080. Fax: (586) 772-9400 e-mail: jeff@usedcarnews.com

11/24/14 11:39 AM

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Disconnected Jottings From Tony Moorby... So, have the mid-term elections pointed the way to a new and rosy future? I think not. As a conservative, I applaud the ostensible shift back toward the right but

be working to ensure his reelection even more when heâ€™s got his feet under his new desk. Power begetting more power. Unfortunately, he epitomizes so many denizens of

Tony Moorby

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the effect will be akin to a hairdryer on a glacier, global warming notwithstanding. Now that Mitch McConnell has reached the apex of his long-studied and maneuvered political career, his continued efforts will be directed to how he can keep himself the Senate Majority Leader, starting from now, although his term in the new office doesnâ€™t start until January, and heâ€™ll

D.C. â€“ hang the electorate and work on protecting my position, my benefits and me. I donâ€™t believe the measure of a politician is how long he or she has been in office â€“ itâ€™s a question of what was actually achieved while there. I know everyone doesnâ€™t share my political leanings but most must share a common frustration with this cloying miasma created in Washington.

Itâ€™s a gravy train from which few are willing to jump. Egos are plumped from every corner â€“ the media, aides, pages and one another â€“ celebrity treatment, deserved or not. The system ainâ€™t broke â€“ it was made that way and molded to suit over time. The big problem is that there doesnâ€™t seem to be any better system out there. The British set-up, the father of our own, gets mired in much the same ways and bogged down with similar issues. Even worse, the European Parliament adds many more layers of extremely expensive management and oversight. I think there are about 28 countries in the EU and trying to do good for one ends up hurting others. One has only to look at the recent financial debacles in the poorer European nations. Now they have to live by the rules of the richer ones

C R O S S WO R D

to be bailed out. I fear their individuality will fade over time. Iâ€™ve thought for a while that term limits would make our politicians more proactive while serving but Iâ€™m afraid that even two four-year terms would probably be insufficient to see a project through from start to finish. This is in itself a mark of gross inefficiency and an invitation to kick the can down the road. Everyone who has aspired to great positions of leadership has heralded â€œchangeâ€? as their clarion call, only to find that the Washington quagmire ensures the

inability to move quickly and therefore efficiently. Even President Obama, who captured a nationâ€™s idealism and conscience, although I should add, not mine, saw himself as a change-maker and a lightning rod to a new future. Not so. His â€œObamacareâ€? needs a big dose of medicine and if you strip away the facetious statistics trying to persuade people of its universal success youâ€™ll find anything but. Itâ€™s been recently quoted that many (as much as a quarter) of new policies were only for dental care plans.

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