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A U T O
January 17, 2005
INSIDE PAGE 3
A U C T I O N
S H O P P E R
Used Car News Mailed This Issue: 75,000 New And Used Car Dealers
$3.00
Car Buyers Bill of Rights Makes ’05 Debut By Jeffrey Bellant Used Car News Staff Writer
The California Car Buyer’s Bill of Rights — debated for most of 2004, later scaled down by the
legislature and ultimately vetoed by Gov. Arnold Schwarzenegger — is being reintroduced on two fronts in 2005. As promised, assemblywoman Cindy Montanez, author of the orig-
inal proposal, has introduced Assembly Bill 68, which includes language of the earlier bill creating a three-day return policy on usedcar purchases and limiting the profit dealers make for arranging cus-
tomer financing. It also contains several provisions regarding disclosures for customers. In addition to Montanez’s bill, Turn to page 48
Analysts Believe Wholesale Auto Outlook Uneven
Small-town franchise dealers depend on creating customer goodwill. PAGE 32
Compacts Showing Improvement By Ted Craig Winter floods slow dealer floor traffic to a trickle along West Coast.
Used Car News Staff Writer
PAGE 38
Some interesting side businesses keep dealers hopping all year. PAGE 60
— photo by Brian Tietz
CHAIRMAN: Jack Kain, owner of Jack Kain Ford and incoming National Automobile Dealers Association chairman, right, talks with his used-car sales manager, Holly Chapman, in the lobby of his dealership in Versailles, Ky.
Improving Image of Salesmen Goal for New NADA Chairman By Peter A. Salinas Used Car News Staff Writer
A 2000 Dodge Neon sedan ES wholesales for $2,489 with 83,707 miles.
(Jack A. Kain is the 2005 chairman of the National Automobile Dealers Association (NADA). Kain is owner of Jack Kain Ford, in Versailles, Ky., and Kain Family Ford-LincolnMercury, in London, Ky.) UCN: How did you
get your start in the retail automotive business? Kain: My dad had a dairy farm in this area. I milked cows, and while I was in college I ran the dairy. I needed the money, but I wanted to get off the dairy farm. You had to milk twice a day seven days a week. We got up at 4 a.m. to milk them, and didn’t have
to milk again until 5 p.m. It gave me a lot of time in between. We were automated, so it wasn’t that bad. I always liked cars. I sold cars for a dealership while I was in college, and I did pretty good at it. It was a Hudson new- and used-car dealership, but I sold mainly used cars. It later became a Turn to page 8
AuctionNet Top Volume Vehicles 12/6/04-12/17/04 2005-1998 Model Years
Rush - Dated Material
Rank 1 2 3 4 5 6 7 8 9 10
Year 2004 2004 2004 2005 2004 2002 2004 2004 2004 2004
Model Ford Taurus Sedan 4D SES Chevrolet Classic Sedan 4D Pontiac Grand Am Sedan 4D SE V6 Dodge Grand Caravan SE Toyota Camry 4 Cyl Sedan 4D Ford Explorer 4D XLT 4WD Chevrolet Impala Sedan 4D Mazda 6 4 Cyl. Sedan 4D i Ford Explorer 4D XLT 4WD/AWD Ford Mustang V6 Coupe 2D
Source: N.A.D.A./NAAA AuctionNet
# Sold 2,867 2,624 2,383 1,819 1,410 1,345 1,203 969 928 923
Figures Are Based on Open and Closed Sales
Avg. Price $10,310 $7,907 $9,224 $13,330 $14,575 $12,704 $10,872 $12,006 $18,088 $10,881
Avg. Mileage 18,036 18,278 16,347 19,276 16,088 43,046 19,578 21,437 20,759 16,549 All Trim Lines
While the total wholesale picture is mixed, various segments of the usedcar industry are showing definite improvements, according to data from the two largest auction chains. The Manheim Used Vehicle Value Index stood at 108.2 in December, which represented a year-overyear gain of 2.8 percent. For the month, wholesale prices were up a seasonallyadjusted 0.5 percent. According to indicators from ADESA Inc., average wholesale prices, dealer activity and inventories at auction were all higher in December than prior-month and year-ago levels. In December, average wholesale prices rose by 3.8 per-
cent year-over-year, the ADESA Auction Dealer Optimism Index rose by 3.2 percent and the ADESA Auction Inventory Index was more than 16 points above its November level. For 2004 as a whole, average prices at the nation’s largest auctions were up 1.3 percent compared to 2003, according to Tom Kontos, ADESA’s vice president of analytical services. Prices bottomed out in May 2003, he said, and have been rising steadily since. Traditionally, December is a soft month for the auction industry, but this year it seemed unusually robust, according to both chains. “Now that the results are in on the various indicaTurn to page 50
IRS $10,000 Transaction Notices Due in January By Jeffrey Bellant Used Car News Staff Writer
Dealers have until the end of January to submit a written statement to any person named on a required Form 8300, which monitors cash transactions in excess of $10,000. George Martinez, a certified public accountant and managing partner of Watsky, Martinez and Co. CPAs, said Form 8300s have been around for years to assist the government in fighting money-launder-
ing schemes. However, the form was revised after Sept. 11, 2001, as part of the U.S. Patriot Act, and the Internal Revenue Service (IRS) is taking a closer look at used-car dealers who handle large cash transactions. According to an IRS fact sheet, the IRS has more than 1,000 open audits of tax returns for new- and used-car dealers. In recent years, the IRS has initiated hundreds of investigations involving individuals in the Turn to page 47
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