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March 4, 2013
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ON THE WEB: More Consumers Opt For Service Contracts
Association Seeks Compromise with State
Service contracts are an increasingly popular choice among consumers as car repair costs rise, according to the Service Contract Industry Council. Consumers bought more than 10 million service contracts in 2012 for both new and used vehicles. Those service contracts covered 95 percent of annual claims filed, including normal wear and tear, and filled in coverage gaps in the manufacturer’s warranty.
GDP Predicts Sales
New research finds that personal income, interest rates and the price of gas all influence auto sales, but a country’s gross domestic product alone is a good indicator of new sales.
FTC Bans Telemarketer
The architect of an operation that allegedly distributed illegal robocalls offering extended automobile warranties is banned from telemarketing under a settlement.
Photo Courtesy of Arizona IADA TABLE TALK: Aubrey Strickstein, president of the Arizona IADA (background, standing), meets with the association’s wholesalers to discuss a compromise to a proposed law that would eliminate wholesale dealer plates. At press time, the group was scheduled to meet with state officials. By Jeffrey Bellant
Arizona dealers and wholesalers are meeting with state officials to hammer out a compromise over the proposed elimination of wholesale dealer tags. The meeting is in response to House Bill 2372 that would establish new
requirements for obtaining dealer tags. The bottom line is that, under the bill, wholesalers would lose the right to use traditional dealer plates. Instead they would receive limited use, temporary paper tags. Dave Warkentin, executive director of the Arizona
Independent Automobile Dealers Association, said at press time the association would be meeting with officials from the Arizona Department of Transportation to try and work out a compromise deal. Association officials have said the proposed change would unfairly hurt legiti-
mate wholesalers who have followed the rules. The DOT has pushed for the measure because some non-wholesalers are taking advantage of the law to avoid registration taxes on their personal vehicles, according to Arizona IADA officials. Continued on page 3
Rush - Dated Material
Used Vehicle Retail Prices Vary by Location It turns out larger cities often offer lower prices for used cars than smaller cities. CarGurus released a study identifying the most affordable and most expensive U.S. cities in which to buy a used car. Topping the list of deal-friendly destinations is Miami, followed by Cleveland, Rochester, N.Y. and Detroit. Jackson, Miss., was found to be the most expensive usedcar city, followed by Seattle, Montgomery, Ala. and Little Rock, Ark. CarGurus analysts say price differences between cities can be substantial. Relative to nationwide prices, used cars in the most
affordable city, Miami, are on average 6.6 percent less expensive. Meanwhile used cars in Jackson, Miss., are 9 percent more expensive than the national average, a difference of 15.6 percentage points. The study highlights the extent to which local market conditions inform prices on used cars. For this study, CarGurus aggregated local Instant Market Value data on millions of used cars listed for sale, and ranked the largest metro areas in the contiguous United States according to how prices in that market compare to the nationwide average.
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