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ON THE WEB: Bill Aims at Protecting Automotive Finance
A bi-partisan bill introduced in the U.S. House of Representatives calls for reform of the Consumer Financial Protection Bureau’s approach to auto finance. The legislation would repeal a CFPB bulletin from 2013 that was designed to pressure lending institutions into eliminating the availability of auto financing discounts.
Used Vehicle Prices Outpace Economy
The NADA Used Car Guide projects the used-car industry is positioned to beat overall economic growth for the sixth year in a row. NADA Used Car Guide analysts believe April will continue the upward sales and pricing trends they’ve observed.
Manheim Expands Mobile Auctions
Manheim recently announced plans to roll out up to eight additional mobile units later this year, bringing the total number to 24 by year’s end.
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www.usedcarnews.com
Many Brands Are Gone, Not Missed By Ted Craig
Several manufacturers have left the market in the past decade, with low-end marques the most common. There was a time when dealers could stock their lots with inexpensive Suzukis, Daewoos and Isuzus. Not anymore. So is the disappearance of these vehicles causing problems for used-car dealers? Not really, according to most experts. Brent Carmichael, a consultant with NCM Associates, said he used to buy plenty of low-end vehicles when he worked at a dealership. But these cars have long been on the “Do Not Buy” list for his 20 Group members. Ken Shilson, founder of the National Alliance of BuyHere, Pay-Here Dealers, describes these vehicles as “disposable cars.” “You could buy them because nobody wanted them,” Shilson said. “They were cheap, but they were cheap for a reason.” The true cost of these cars came when they stopped running and the drivers stopped paying for them. Tim Fleming, an analyst
GOOD RIDDANCE: Vehicles like the Suzuki Grand Vitara are disappearing from the market, mainly because they are no more popular used than they were new.
with Kelley Blue Book, said the disappearance of these vehicles from the market has had little overall effect because they had few sales to begin with. That is why they left, after all. Consumers looking for an inexpensive car today turn to
selections like the Ford Fiesta and the Chevrolet Cruze. “The large manufacturers have expanded their offerings to fill that niche,” said Tom Kontos, ADESA’s vice president of analytical services. The cheaper domestics
are the best choice for buyhere, pay-here dealers, Shilson said. Bobby Hardy, owner of Hardy Auto Sales in Philadelphia, Miss., doesn’t miss these makes at all. “We haven’t had a Suzuki in years,” Hardy said.
Franchise Dealer Groups Report Strong Used Vehicle Sales Several of the major publicly traded franchise dealer groups reported double-digit increases in their used-car sales in the first quarter. Sonic Automotive Group Inc. reported record first quarter pre-owned unit sales of 28,135 and record pre-owned gross profit of $40.8 million. The chain now has three EchoPark retail operating locations in Denver, with progress made to open an additional location by the end of 2015. These used-car superstores are the first in a planned national network. The three EchoPark stores sold 660 units for the quarter, with just under 300 units sold in the month of March.
Asbury Automotive Group Inc. reported that used vehicle retail revenues were up 14 percent in the first quarter and used gross profit was up 7 percent. AutoNation Inc. reports that retail used vehicle unit sales increased 12 percent overall and 11 percent on a same store basis in the first quarter. Lithia Motors Inc. saw double-digit growth in its usedcar operations in the first quarter. Used-car sales at the franchise dealer chain’s stores rose to 24,204 units from 16,316 in the first quarter of 2014. Used vehicle retail same store sales increased 11 percent in the first quarter.
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4/27/15 3:38 PM