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1-800-554-1026 December 7, 2015

ON THE WEB: Firm Names Brands That Hold Value

www.usedcarnews.com

Toyota Celebrates 20 Years of CPO

ALG announced winners of its 2016 annual Residual Value Awards, ranking Land Rover and Subaru as the top premium brand and mainstream brand, respectively. ALG’s Residual Value Awards recognize vehicles in 26 segments that are forecast to retain the highest percentage of their MSRP after a three-year period.

NADA Expects New Car Sales to Rise Slightly

The National Automobile Dealers Association forecasts new light-vehicle sales rising to 17.71 million units in 2016. NADA forecasts new lightvehicle sales to finish 2015 at 17.3 million.

Most Buyers Depend on Internet for Dealer Info

Digital Air Strike’s Automotive Social Media Trends Study found three-quarters of car buyers say Internet research was the most helpful medium when selecting a dealership, surpassing all other media.

CERTIFIABLE: This Toyota Camry is typical of the millions of certified units that Toyota dealers have sold in the past two decades. The brand launched its certified program in 1996 and has been the industry leader for most of its 20 years. By Jenny King

Toyota plans to celebrate the 20th anniversary of its certified pre-owned vehicles program in January 2016. It won’t be a surprise party.

But anticipated changes to Toyota’s successful program remain under wraps. Will Toyota add a free maintenance clause, as some automakers including General Motors already have in place? Will limited

warranties be expanded? Will older vehicles be eligible for certification? And how about a leasing program? Toyota will only say it’s considering its options. The certified used vehicle

program (TCUV) was introduced in January of 1996. Participating dealers sold 42,000 vehicles that year – cars and trucks that were up to five years old, with no more than 65,000 miles on Continued on page 6

Rush - Dated Material

Higher Credit Losses Hurt America’s Car-Mart’s Latest Quarter An increase in the allowance for credit losses caused sues,” said Car-Mart CEO William H. Henderson. “Sales America’s Car-Mart Inc. to report a net loss of $0.5 million softened in September and October, which can be attribfor its latest quarter. uted in part to the fact that we instituted some additional Provision for credit losses was 32.4 percent of sales (28.3 underwriting reviews and made adjustments and improvepercent excluding an increase to an allowance for credit ments to inventory that we believed were necessary for the losses), compared to 26.3 percent for prior year quarter. Al- longer term.” lowance for credit losses rose to 25 percent of finance reHenderson said the company’s bottom line also suffered ceivables, net of deferred revenue, up from 23.8 percent at from issues of operational inconsistencies among its stores July 31. and a highly competitive environment. “The quarter started out relatively solid as we had a de“We believe that we can positively affect losses by imcent August even though credit losses were continuing to proving the quality of our vehicles and also continue to be be higher than expected, based on the lower delinquency proactive with our customers in working with them when T:7.175” levels, and we were working through some inventory isContinued on page 7

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USED CAR NEWS



NADA Study Shows Recall Laws Cost Consumers The National Automobile Dealers Association said a report that it commissioned from J.D. Power shows that many consumers could see the value of their vehicle trade-ins decline by an average of $1,210 – and by as much as $5,713 – if auto dealers were prohibited from selling any used vehicles with open recalls. The J.D. Power study, titled “An Economic Assessment of Trade-In Value Reduction Caused by Preventing Auto Dealers from Selling Passenger Vehicles with any Open Recall,” concluded that the enactment of legislation -- including the “Used Car Safety Recall Repair Act,” proposed by Sen. Richard Blumenthal (D-Conn.) – requiring auto dealers to fix all outstanding safety recalls before selling or leasing any used passenger motor vehicle could have an adverse impact on the value of those trade-ins. Each year, approximately 10 million vehicles are traded-in to franchised dealers, and in virtually all of these

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transactions, the trade-in manager at the dealership uses a combination of electronic analytic tools and physical inspections to decide how much of a “tradein allowance” to offer the consumer. This trade-in allowance is an important part of the overall transaction because, typically, the consumer uses it to fund the down payment needed to finance the purchase or lease. But if the dealer is restricted from reselling a recalled vehicle, either at retail or at wholesale, until that recall was remedied, J.D. Power identified a number of costs that would be incurred during the grounding period that could negatively impact the trade-in allowance offered. While there are additional factors to consider regarding reselling a recalled vehicle, J.D. Power’s analysis was related only to the additional expenses of: the cost of financing the vehicle purchased from the consumer, the cost of storing the ve-

TEXT CRIME: GM is recalling Chevrolet Silverado HD, Chevrolet Express, GMC Sierra HD vehicles and GMC Savana compressed natural gas vehicles because the CNG fuel-only label is smaller than the required size. Dealer groups say these types of recalls must be treated differently than safety recalls.

hicle, the cost of insuring the vehicle, and depreciation costs. Furthermore, while $1,210 represents the weighted average for both in-brand trade-ins (for illustration a Honda traded to a Honda dealer) and out-of-brand trade-ins (a Honda traded to a Ford dealer), the costs are higher for out-of-brand

trade-ins because out-ofbrand dealers incur additional costs when holding the vehicle during the repair delay and when transporting the vehicle to an in-brand dealer for repair, the report states. According to government and industry data collected for the study, repair delays will result from the chal-

lenges faced in engineering, producing, and distributing the replacement parts needed to address recalls. Also significant is the fact that dealers will not know in advance how long a recall delay will last, and thus must estimate the delay, which could further exacerbate the trade-in value reductions that consumers will face.

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USED CAR NEWS

NEWS BRIEFS Black Book Teams with AutoNation

Black Book is now providing the vehicle appraisal data for AutoNation Express, the online car shopping and purchasing destination for AutoNation stores throughout the U.S. Under terms of the agreement, car shoppers visiting any of AutoNation’s 300+ stores around the country receive an accurate trade appraisal for their vehicle when

shopping for a car or truck. Black Book vehicle valuation data will power AutoNation Express, initially providing a valuation range and then a more detailed estimated value when customers supply additional vehicle information to value their trade. Once an estimate is requested, customers then print out the certified estimate and bring it with them to their appointment at any AutoNation store.

J.D. Power Launches Ratings Site

J.D. Power recently launched an all-new consumer auto ratings and research website — www.jdpower. com/cars. The new jdpower.com/cars website features the company’s proprietary Power Circle Ratings, which are based on “Voice of the Customer� feedback from millions of verified car owners. Visitors to the site can research car, truck, SUV and van

MILESTONES Ernest Crump

Alabama dealer Ernest Lacy Crump, 89, of Jasper, Ala., died Nov. 8. Crump was the 1992 Alabama Quality Dealer of the Year and a past president of the Alabama Independent Automobile dealers Association. He opened Ernest Crump Motors in 1948. His dealership, under his son Mark’s leadership, won the Alabama Quality Dealer award in 2012, as well. Randy Jones, executive director of the Alabama IADA, said Ernest Crump was “old school� in the way he did business. “He was the kind of guy that made

you proud to be a car dealer,� Jones said. “It was about his leadership and excellence and he passed that down to his kids and grandkids.� Crump was a husband, father and grandfather and served as a deacon at both Townley First Baptist Church and Jasper’s First Baptist Church. He also served on the boards of numerous organizations, including a local bank, and supported many others. “He worked every day up until the day before his 89th birthday,� said Crump’s son, Mark, who now runs the store. He said his father’s work ethic is one of the things he remembers most.

For example, years ago, Crump had been bitten by a copperhead snake and ended up in the hospital across the street from the dealership. He insisted on getting a corner room so he could see the lot from his window. “When he saw a car drive up on the lot, he would call the dealership and have them put the customer on the line,� Mark said. “He would sell cars from his hospital bed.� Crump is survived by his wife of 67 years, Dorothy Crump; Brenda Galbraith (John), Debra Nations (Randy), Mark Crump (Schrell); six grandchildren and three greatgrandchildren.

ratings at both the brand (make) and model level. J.D. Power generates a Power Circle Rating of five, four, three or two circles for each new-car model, with five Power Circles representing a score that is “among the best.�

Auction Academy Announces Seminar Series

Auction Academy has announced that its program will be expanded to include four individual sessions. The first session will focus on dealer sales and will take place Feb. 8 and 9. On June 20 and 21, auction Internet managers will meet for the digital managers session. Fleet-lease account management is set for Sept. 26 and 27. A session covering compliance issues is scheduled for Dec. 5 and 6. All sessions of the 2016 Seminar Series will be held in Nashville. C R O S S WO R D by Myles Mellor

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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 Advertising: Shannon Colby, Account Manager Megan Frump, Account Manager Marie Hingst, Account Manager

Columnist: Tony Moorby Circulation: Emily Brown Baker, Helen Thomas Production: Josie Godlewski, Media Manager Jessica Wolski, Graphic Designer Rob Setser, Web Developer/Graphic Designer

%"-% 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. 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. 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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USED CAR NEWS



Add-Ons Face Scrutiny

By Ted Craig

Add-ons seem poised as the next major focus for auto finance regulators. Santander USA Holdings Inc. has agreed to provide $5.4 million in relief to more than 450 Massachusetts consumers over allegations that it charged excessive interest rates on its subprime auto loans. Under the terms of the assurance of discontinuance, Santander has agreed to eliminate interest on certain loans it purchased that allegedly included excessive interest rates due to the inclusion of so-called GAP coverage. Santander has also agreed to forgive outstanding interest on the loans, and reimburse consumers for the interest they have already paid on the debts. On average, the settlement will provide each consumer with approximately $11,000 in relief. Under the settlement, Santander will also pay $150,000 to the state and must perform a supervised audit of its existing loan portfolio to make sure that no additional consumers have been overcharged because of GAP fees. The fees added to the consumers’ loans caused the effective in-

terest rates to exceed the relevant 21 percent state interest cap. The National Alliance of BuyHere, Pay-Here Dealers conducted a panel covering add-on issues at its recent conference. “It’s a very touchy subject right now and it opens you up to a lot of risk,� said David Bafumo, president of FNI Incorporated. Bafumo said add-on products can be both a source of profits for dealers and a benefit for consumers when done right. Doing the process right means presenting disclosures when consumers are focused and making them clear. It also means documenting the entire process. While the Consumer Financial Protection Bureau has yet to look at add-ons in auto finance, Bafumo said the CFPB’s action against U.S. Bank’s credit card division shows what the regulators want in this area. The biggest for buy-here, payhere dealers is that the CFPB will require an all-in calculation for retail installment contracts that would include add-on financing. Terry O’Loughlin, director of compliance for Reynolds & Reynolds, said that could cause many contracts to exceed the state’s usury laws.

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Toyota CPO – page 1 their odometers and which passed a multi-point inspection. “TCUV was launched due to the large number of off-lease vehicles returning to the market,� said Dave Depew, TCUV corporate manager. “Toyota needed to support residual values to maintain market appropriate new-vehicle incentives and leasing programs.� Another impetus was the arrival of newcomer super stores like CarMax and AutoNation. Depew said Toyota needed to protect and grow its customer base and saw certified used cars as an important tool. Changes over the 20 years include the addition of Scion certified used vehicles in 2001, an increase to 85,000 in mileage eligibility, certification for used hybrids in 2009 and a boost in the limited comprehensive warranty to 12 months/12,000 miles in 2011. Depew said over one-third of TCUV buyers are new to Toyota; 83 percent have said they would buy another TCUV. Lexus, with a certified program older than that of parent company Toyota, has buyer statistics that are even more dramatic. Toyota’s luxury brand defines its certified customers as either “luxury strivers� or “CPO committed� and is tweak-

ing its 22-year-old certified preowned program in order to further increase sales. Starting Jan. 5, 2016, a 2-year unlimited mileage warranty will replace the 3-year/100,000-mile warranty. “New warranty coverage begins after the factory 4-year/50,000mile warranty, providing coverage to six years with unlimited miles,� said Lexus spokesman Paul Rohovsky. Beginning in January, Lexus certified pre-owned vehicles will be covered by a new 2-year pre-paid maintenance plan that includes basic scheduled maintenance for two years or 20,000 miles, which ever comes first from the date of purchase, he said. Rohovsky said Lexus dealers expect to sell 80,000 certified pre-owned vehicles this year. On their lots, certified outsell non-certified used vehicles more than two-to-one (70 percent vs. 30 percent). The “luxury strivers� account for 40 percent of certified pre-owned buyers, he said. They tend to be eager to get into the luxury market with the goal of eventually buying new. The “CPO committed faction are “driven by practicality� and may never buy new, he said.

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USED CAR NEWS

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Car-Mart – from page 1 they encounter challenges financially,” he said. The buy-here, pay-here chain reported revenues of $133 million for the quarter ended Oct. 31, compared to $134 million for the prior year quarter. Same-store revenue decreased 3.4 percent. Retail unit sales decreased to 10,881 from 12,084 for the prior year quarter. Average retail sales price increased $757 to $10,247 from the prior year quarter and $282 from the quarter ended July 31. Gross profit margin percentage decreased to 39.2 percent from 42.9 percent for the prior year quarter due primarily to higher repair costs and higher wholesale volumes and losses.

Collections as a percentage of average finance receivables decreased to 13.7 percent from 14.1 percent for the prior year quarter as the weighted average contract term increased to 30.6 months. Accounts over 30 days past due decreased to 3.5 percent from 4.4 percent at Oct. 31, 2014. Average percentage of finance receivables current improved to 82.5 percent from 80.5 percent. America’s Car-Mart had an active accounts base of approximately 65,300 as of Oct. 31. Car-Mart continues to expand, opening its 146th dealership in November. The dealership is located in Burlington, Iowa, and is the first America’s Car-Mart store in that state. C

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AG Says Salesman Harrassed Women The Washington attorney general announced a lawsuit against Monte L. Masingale, a Spokane-area car salesman, for a pattern of sexual harassment against female employees and prospective employees. Masingale works at Greenacres Motors dealerships in Airway Heights, Greenacres and Post Falls, Idaho. The dealer is also named in

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the suit, because its owner and staff knew, or should have known, about Masingale’s conduct. The complaint alleges that Masingale frequently posted help-wanted ads for a secretary in newspapers and on websites like Craigslist. Masingale refused to hire males for the position, and allegedly sexually harassed young women who applied.

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TAX SEASON PREVIEW ing up with a ($600) refund advance,” Neyland said. “It’s a refund advance, not a loan. A loan bears interest. This refund advance has no interest charges whatsoever and no fees. There’s also no recourse.” So if the IRS does not reto the consumer and cannot lease the refund, the bank tell the dealer the status of cannot collect that monthe consumer’s refund. ey against the consumer. A tax product provider like TRS Tax Max processes and files the tax return once they get the information from the

DEALERS GET A JUMP ON TAX SEASON WITH REFUND PROGRAM By Jeffrey Bellant

Tax refunds are the lifeblood of independents, especially buy-here, pay-here dealers, and one tax service vendor shows why the season

He said statistics show the majority of consumers will spend their entire refund in 24 to 48 hours. “They will also promise out more of their refund than they actually (will get),” he

USED CAR NEWS

after all. Neyland warns dealers that they must make sure they don’t schedule the bulked up payment at a time or month when the customer cannot pay. Also, make sure that the irregular payment is not more than what the customer can pay to get into another car somewhere else, Neyland

“They actually start spending their money in November and December.” Bill Neyland is so vital. Bill Neyland III, founder of Tampa-based TRS Tax Max, provided a scenario of a single parent with two or three children, $20,000 in income and zero taxes withheld. The average refund would be $8,230, even though the tax ‘payer’ in this case does not contribute one dollar to the tax coffers, Neyland said. Congress continues to talk about extending the earned income credit, the child tax credit and education credit, which could boost that number to $10,000 or $11,000, he said. If the above customer has money withheld, their refund is already at $10,000 now, Neyland said.

said. “They actually start spending their money in November and December. “A customer could get a $10,000 refund on Tuesday and be broke by Friday.” Neyland’s dealers are seeing 40 percent of refunds over $6,000 and 10 percent over $9,000. TRS Tax Max, like other tax partners, helps dealers sell more cars and take control of the tax refund, Neyland said. “Having a tax marketing program means that you are in control of the money, not the consumer,” he said. Neyland said having just a tax preparer set up next to or even inside a dealership is not the same thing. Those firms have to give the checks

 ! dealer. “You guys get the money and we have all the liability,” Neyland said. Neyland said W2s come out Jan. 2, but many dealers assume those do not come out until the end of January. If a dealer starts planning for the end of the month, it’s too late. In fact, larger companies like Wal-Mart put their W2s online on Jan. 2, Neyland said. “Make sure you have an action plan starting Jan. 2,” he said. Changes in the laws basically eliminated refund anticipation loans, he said. “But new for this year is that the banks are com-

The bank just writes it off, Neyland said. TRS Tax Max’s newest program allows seasonal payments. “As we enter our 21st tax season, we’re offering an irregular and seasonal payment (program),” Neyland said. “I think this is our biggest achievement we’ve done in our 20-year history.” Using DMS systems, the program gives dealers opportunities to collect bigger payments during future tax seasons or other times of the year. “Unlike other tax refund companies, we’re open 52 weeks a year,” he said. With this seasonal system, if a dealer needs $1,200 for a down payment, but the customer only has $700, the dealer is going to take the $700. But instead of deferring that $500, the dealer will actually schedule it right in the payment plan – in February, for example. “That payment is on the contract, accruing interest and is disclosed in the Regulation Z box,” he said. It has to be disclosed and if the customer balks, the dealer should just say that the choice is between the irregular payment and a $1,200 down payment. In some cases, the dealer will discover that the customer can come up with $1,200

said. For example, after the down payment, the contract will list payments one through 17 will be $90 a week. Payment No. 18 is $1,200. Then payments 19 through 70 are $90. With AutoStar, the dealer can schedule in another boosted payment the following February for $800 when tax returns come in, for example, and the same the following year. “Tax season can be – and is – 12 months a year,” Neyland said. One of the firm’s largest customers has been using seasonal payments for a couple of years and the dealership has collected $30 million on 20,000 seasonal deals, Neyland said. “Their success is through the roof,” he said. It benefits the customer by shortening their terms, lowering their payments or both, Neyland said. It also gives them more equity in the car. Every state allows this, though each may have different regulations, Neyland said. For some of his customers, the percentage of customers making their final payments has doubled. Depending on the state, dealers cannot repo a customer who misses the seasonal payment, but they can repossess if the customers misses one of the other payments, Neyland said.

NEXT ISSUE: Year in Review 08_UCN.indd 1

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RETAIL MARKETS and 20 percent trucks. Most   Willie Colvin, owner, of my vehicles are domesColvin Auto Sales & Ser- tics. I have a few imports, vice LLC, Tuscaloosa, but mostly they’re domestic. Ala.: “Reconditioning costs “We’ve been in business about 17 years. I have one are anywhere from $150 to $300. Ninety percent of that location. “I keep about 50 in inven- is done in-house. I just sertory. We’ve kind of slowed vice my own cars, “(For advertising) I do my down. We’re selling about 10 or 12 a month. It seems website, newspaper and ralike it has slowed down a dio. “I sell a lot of Dodge Charlittle this year. (October) gers and Challengers. I’m was bad. “We do subprime. It’s 90 close to a Chrysler dealerpercent of our business. We ship. “We also sold a 2011 Ford use Credit Acceptance and cargo van. It probably had Go Financial. “We also do a lot of deals about 160,000 miles. I sold during tax time. I’ve got it for $11,900, somewhere enough vehicles in stock for around there. “The market has been that. But I’ll start gearing up for that (at the end of De- hard here. We get a lot of applications and a lot of cember). “I get my cars from the people coming in. But a lot of young people come in auction, most of the time. “Average model year prob- here and want, for example, ably ranges from 2007 and a Dodge Charger on my lot. up. Mileage is 40,000 to So they want a $20,000 car 80,000. But I’ve also got a and they’re only 22 years 2013 Cadillac with 19,000 old. 11/30/15 12:38 PM new-car dealers miles. Carolina_TaxTime_UCN Dec7.pdf“It’s1 the “I carry 80 percent cars who are offering $99 down

and $99 (payments). But after three months their payments go up $300 or $400 a month. They’re not telling the customers that.�

  

Dave Bearley, president, Dave’s Greenlight Auto Sales, Greenville, Ill.: “This is our 10th year in business. “Last year, I think we sold 427 cars. For a little momand-pop store on the edge of town with little overhead, that’s pretty good. “If it’s a vehicle I wouldn’t put my own kids in, I wouldn’t sell it to someone else. “You have to have a little diversity in the inventory – different colors and different makes and models. “We live in a rural community and a lot of people want trucks. But it’s always difficult to buy trucks – and very expensive. “We finance everything (inventory) out of our own pocket. We have a bank line of credit, but we try not to

!"%#%  $ use that too much. That’s why it’s taken us 10 years to get where we are. “I’ve found that you always stay a little sharper when you’re spending your own money instead of the bank’s money. “It seems like I’m better at buying when I have a little less to spend. I’m more choosey. “We have one location, but we’re building a new store to replace the existing location. That will be open in the spring of 2016. It’s just a mile down the road. “We’re going to put up an eight-bay garage and triple our office space. We’re also going to add a drive-up payment window. “We also want to be able to do all of the service work inhouse (with the new store). “Right now we have 82 vehicles on the lot. We’re selling them about as fast as we can get them serviced. We sell, on average, 30 to 40 a month. “We buy from physical auctions in the area. I’ve

also been buying online. “I’m thinking about going down to Oklahoma to some auctions down there to buy some trucks and SUVs, something that has less rust than we experience up here in the Midwest. “We’re a buy-here, payhere dealer. An average down payment is somewhere in the $800 to $1,100 range. The average term length is about 30 months. “We use GPS only. We have never used starter-interrupts. We use AutoZoom for our scoring system. It helps us sharpen the pencil a little and stay away from the credit criminals. “We try not to go older than 10 to 12 years. On the other hand, we’ve even sold vehicles that are still under factory warranty. On mileage, we try not to go over 115,000 miles. Fifteen percent of our inventory will be in trucks. “We recently sold a 2009 Dodge Ram 1500 quad-cab. It had 127,000 miles and we sold it for $15,995.�

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USED CAR NEWS

WHOLESALE MARKETS INDIANA

Bob Ruth, general manager, Wolfe’s South Bend Auto Auction, South Bend, Ind.: “We’ve been in business almost 13 years. We have four lanes and we are running two (as of mid-November). “Volumes have still been pretty steady. We’re running anywhere from 250 to 325. Our (conversion rates) this time of the year are around 50 percent. I think this time last year we were doing a little better. But, on the whole, this year has been better. “The number of dealers in the lanes varies from week to week. My guess is we have 75 to 100 bidders per week. “The mom-and-pops are struggling, but right now, quite frankly, everybody’s struggling. Retail-wise, all of the dealerships are having their issues. That makes it tougher in the lanes because dealers are going to be more selective. They are

only going to buy what they absolutely want and need. “Typically, we have more dealer consignment than (commercial consignment). But we have a couple of companies (repos, fleetlease) that are currently running on the same week – that means we’ll be running 20 to 25 percent repo that week. But the next week, well be back to running 10 to 15 percent. “We’ve always taken care of the independents. We’ve built this auction on the independents. “The commercial side has grown for us, however. I think that will continue next year. “On the same day as our regular sale day we’ll run our (salvage/in-op) sale. That can range from 15 or 20 to 50. Right now, steel is way off. “The average price is typically between $2,500 to $3,500. “We have online sales and that goes through AWG. It’s actually decent business

for guys in the outlying areas who can’t get here every week. Young people are much more apt to use that. “I’m in Northern Indiana, so four-wheel drive trucks and sport utility – which are strong all the time anyway – are stronger now. Cheap stuff is not doing well. That will pick up tax time.”

VIRGINIA

Dick Menendez, chief operating officer and general manager, Richmond Auto Auction, Richmond, Va.: “We’re in our 26th year. “We have seven lanes and we’re running five, sometimes six. “Typically we run in the 400s, between 400 and 500. It’s a tad better than this time last year. I think we’re running a few more vehicles and prices are strong. The buying activity is pretty good. That’s unusual, because this time of year dealers start stockpiling stuff. Not a lot of people are looking to sell. In the tax season

volume will go up to 500 to 600 vehicles. “The other side of the coin is that the retail market has been a little soft. Usually when that happens, you don’t have a lot of demand in the wholesale market. However, for us, the demand is still high. It’s inexplicable. “Our sales percentages are excellent, somewhere in the 70s. “Right now we’re getting 250 to 275 dealers (in the lanes). During tax season, it jumps up dramatically, as high as 400. “The lion’s share comes from the greater Richmond market. But we’ll have them from Fredericksburg to Chesapeake and even North Carolina. “At our auction, we have a caterer for our cafeteria. It brings the customers in. They get excellent food that’s reasonably priced and we subsidize that. “We are a majority dealerconsignment sale. It’s about 70 percent dealer consignment.

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Compiled by Jeffrey Bellant “We have major contracts. We have some GSA business – the Federal Bureau of Investigation, the Internal Revenue Service and the Drug Enforcement Agency. We sell for the state of Virginia, and several counties. We do quite a lot of municipal business. “We also have a lot of finance companies, banks and credit unions as consignors. “For online, we use Auction Edge and Auction Pipeline. We use AutoIMS. “In 2016, I expect a big blowout. I think the Fed and the banks are going to raise interest rates – a very small amount. “So I think you’re going to see a lot more demand. People are going to want to get under the wire and buy, figuring that ‘rates are going to get even higher so I better buy now.’ “I think the first quarter of 2016, in particular, and the first half, in general, are going to be a lot better than the second half of the year.”

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DISCONNECTED JOTTINGS FROM In the name of environmental protection the building of the Keystone Pipeline will not progress – at least, under this president and his administration.

TONY MOORBY

using old-fashioned and aging rail stock and over-the-road trucks to the East Coast for refineries all the way to India – and the West Coast for the same in China?

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

Now I ask you, what would you rather have, in terms of efficiency and relative safety for moving volatile elements from North Dakota and the Canadian oil sands: A pipeline that is uninterrupted, well built and easy to maintain taking light sweet crude from North Dakota and heavier products from the oil sands to existing refineries on the Gulf Coast that are specifically built to refine these differing oils? Or the alternative of

    

In the self-same week as the decision was made, two accidents happened, dumping ethanol into the Mississippi and a thousand gallons of crude from an old rail tank that split open on impact into the streets. Over the years, there have been countless disastrous accidents killing people, their towns, homes and the environment. Pictures of towns ablaze against an orange-lit night sky still haunt the memory.

C R O S S WO R D

Fire marshals of towns who have railroad connections say that new and expensive equipment and designs for railcars that don’t rupture are going to be required in the future. What’s the betting there’s a political action committeeon behalf of the builders promoting that one – brandy and cigar burnished dinners with conversations implying another term in office come to mind! Besides which, the cost to build and maintain this new rolling stock will eventually outweigh the expense of building the pipeline. But then, no one accused this administration of being fiscally aware or even sensible for that matter. The economics can’t possibly stand up, long term, in favor of the overland option. Then who would vouch for efficient refining in India or China – the two worst nations for befouling the Earth’s atmosphere. They both have many cities that are positively dangerous to venture outside

on most days. It would be far better to keep those disciplines in our control. The president also said that, with oil prices being so low, it wouldn’t be economical. Is this man’s memory so short? Does he not think the longterm prospects for oil prices or their related products are going to go back up and steadily continue that rise? Perhaps he thinks electricity’s the cure. So let’s strip the top off another mountain in West Virginia to fire the furnaces with the coal necessary to produce it. Although oil prices are set globally, being independent in our own access to it promotes all kinds of geopolitical security as well as a leveling device for pricing. I fear this administration is chipping away at what small amount of industrial fabric is left. There’s not enough money

for education and so the new industrial giants are teaching their children far more efficiently than ours, especially in IT and communications. Even General Motors has given some of its production to China so now we’ll be buying our own goods back again. Perhaps we’re so driven to sate the appetites of the short-term as cheaply as possible – go to Wal-Mart if you don’t believe me – that we’re driving our own competitiveness into the ground. While there’s lots of other alarming stuff going on around us, this is not the platform for writing about it. Our focus is off the ball to ensure our future. If one day is a lifetime in politics then this president still has ample opportunity to excel or repel. My money’s on the latter based on recent directions.

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

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USED CAR NEWS

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AROUND THE BLOCK

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Helps      Auction Community

WISH GRANTED: Recipient Ian Thompson, second from left, holds a check showing money raised by DAA of Huntsville for Make-A-Wish. Auction owner David Andrews is on the far right.

Checkbooks opened wide at Dealer’s Auto Auction of Huntsville as local dignitaries and civic leaders joined dealers from across the Southeast for a fundraising sale benefiting the Make-A-Wish Foundation. The special sales event yielded over $32,000 in donations and

brought the auction’s total charity gifts in 2015 to over $80,000. “For the past several years, we have used special event sales to give back to some very deserving charities that impact our community,� said Roger Fields, general manager of DAA Huntsville. “This was our biggest year to date, and

it’s because our dealers and our staff care about more than just selling vehicles.� The funds were a combination of money acquired from auction fees, donations from partnering dealers, a silent auction of country music memorabilia, and contributions from the companies that fall under the umbrella of DAA Huntsville’s parent company, City Enterprises. “The fact that these auction partners were willing to support us locally speaks volumes about DAA of Huntsville,� said David Andrews, president of City Enterprises. “We may be small,� Fields said, “but we have the heart the size of the biggest auction you’ll find. “I love you guys from the bottom of my heart, thank you for attending today, it means a lot to my team and to the people who receive your generosity.�

DAA Northwest’s annual anniversary sale fundraiser brought a record $126,000 to four Spokanebased nonprofit organizations. Representatives from the Vanessa Behan Crisis Nursery, Young Life, Union Gospel Mission and Spring of Hope International were present at the Nov. 4 event as the featured items were auctioned. Dealers purchased, among other items, prime run numbers for the next day’s anniversary sale and for the 2016 Rock & Roll Sale. The auction matched all funds. This year’s fundraiser topped the record of $103,000, set just last year, said Greg Mahugh, DAA’s General Manager. “DAA Northwest has played a tremendous role in helping their community keep kids safe while strengthening families,� said Amy Knapton, executive director of the Vanessa Behan Crisis Center.

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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