June 2, 2014
ON THE WEB: Few Consumers Drive A Hard Bargain
SEE OUR AD ON PAGE 11
Demand Remains Ahead of Used Supply
Only about 20 percent of car shoppers consider themselves “extreme price grinders” who will take as much time as they can to get the lowest possible price on a new or used car, according to a new report released by Edmunds.com.
FTC Supports Direct Sales to Consumers
Federal Trade Commission staff submitted written comments on legislative proposals that would alter the ability of automobile manufacturers to sell their cars directly to consumers. The comments note the staff’s strong opposition to state laws that mandate a single method of distributing automobiles to consumers.
Index Shows New Cars Out of Reach for Many
The latest U.S. Auto Buyer’s Affordability Index from Requisite Press indicates that a U.S. median-income buyer can only afford 52.1 percent of the April new-car average transaction price.
Rush - Dated Material
File photo BRING IT ON: Much has been made of a flood of vehicles overwhelming the wholesale market and driving down prices, but industry insiders say dealers can absorb much of the increase in supply. By Ted Craig
Someday, a large increase of used-car supply will drive down wholesale prices. But that day might prove later than sooner. ADESA Analytical Services reports that wholesale prices remained at high levels in April. Tom Kontos,
ADESA’s executive vice president of industry analysis, said this reflects scarcity in supply and abundance of demand particularly for certification-eligible vehicles, and more specifically for off-rental units. Kontos said an increase in off-lease vehicles will moderate prices.
Tom Webb, Manheim’s chief economist agrees prices will fall, but that might not happen this year. “There isn’t going to be a major decline because as long as dealers are making a healthy profit, they’ll keep buying,” Webb said. If anything, demand should increase in the next
few months as the used-car superstores from Sonic Automotive and Asbury Automotive come online. Matt Read, general manager of Loveland Auto Auction, is ready for a flood of cars. “I would like to see it,” Read said. “Right now would be fine.”
Auction Chains Enhance Offerings for Franchise Dealer Groups The two largest auction chains are offering more ways for dealership groups to wholesale cars. Manheim has partnered with Hendrick Automotive Group to create the dealership group’s first onsite auction lane in Charleston, S.C. The one-lane, newly retrofitted operation is located at Hendrick Automotive Group’s dealership facility in Charleston and sells wholesale trade-in vehicles from its 11 Charleston-area dealerships. Similar to Manheim’s auction lane offering, the sale uses technology such as Simulcast, an auctioneer and auction block and Manheim employees.
Since its opening on March 11, four sales have been held with 95 percent of the vehicles sold and an average of 140 dealers in attendance. The sale, open to all registered dealers, is staffed by employees from Manheim Darlington. Meanwhile, ADESA announced the launch of a new online vehicle remarketing website for franchised dealers within the Prestige family of dealerships. This custom site, prestigedealerdirect.com, allows Prestige dealers to view and purchase vehicles exclusively in an online “closed” auction venue before the vehicles are ever offered through an open sale.
OUR MISSION IS TO BE A PART OF YOUR SUCCESS. Read more inside. ©2014 Ally Financial. All rights reserved. SmartAuction is a registered service mark of Ally Financial Inc.
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June 2, 2014ÛÛÝÛÛ
USED CAR NEWS
Conference Focuses on Buy-Here, Pay-Here Legal Compliance By Jeffrey Bellant
LAS VEGAS – Buy-here, pay-here dealers who avoid compliance hurt their chances in the capital markets when they want to sell their paper. A panel of experts warned dealers about this problem during the Buy-Here, PayHere Dealer Compliance Academy, an event held by the National Alliance of BuyHere, Pay-Here Dealers here in May. Attorney Tom Hudson said dealers must tighten up their compliance problems, but many aren’t close. “Some people have no idea what they are doing in business,” Hudson said. Rick Potter, CEO of CAR Financial, said tools and technology have improved to make it easier. But it still means dealers must avoid even minor mistakes in their paperwork and contracts. “Even if it’s a small error, fix it,” Potter said. Jeff Anderson, vice president of franchise finance for J.D. Byrider, said his firm has a chief compliance officer,
which is something all dealerships need. Potter said creating a policies and procedures manual for compliance is also critical, making sure that employees are trained daily on those procedures. Brent Carmichael, executive director of NCM Associates, said even today, dealers that have strong compliance procedures are “the exception to the rule.” He gave a compliance quiz to one twenty group and the results were not pretty. “It was scary,” he said. “Some of them didn’t even know if they were compliant (in their business).” Carmichael said reviewing all paperwork is critical to make sure documents are following current laws. Potter said putting together policies and procedures on compliance, while important, is only the first step. “(Don’t) just write them down – follow them,” he said. “I would urge you to have a review process.” He said it’s better to catch problems early so they can be fixed or, “before you know
Photo by Jeffrey Bellant PAPERWORK: Dealers study their workbooks during a session at the recent Buy-Here, Pay-Here Dealer Compliance Academy in Las Vegas. Panelists discussed the expectations from capital providers regarding compliance.
it, you’re out of business.” NABD Founder Ken Shilson said some dealers simply have their heads in the sand about compliance. “I hear people say, ‘we don’t have to worry about compliance,’” Shilson said. “I say, ‘why, did you get an exemption?’” These dealers should start to worry, because if their contracts are not clean and
compliant, they can forget about using it to raise money. “If it’s not compliant, you can’t sell it,” Potter said. “It’s worth less than zero because of the liability.” Potter said a dealer can bring some contracts to CAR Financial, to see if it’s something that passes muster with the firm. In the past, Potter said, a lender’s first and biggest
concern was about the financial risk of a portfolio. Not anymore. Now, the legal risks that have expanded under the increasing regulatory eye of the state and federal officials have given lenders something else to consider. “Go to a lender now, and there’s more than one reason to turn you down,” he said. “It’s not just financial.”
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Â Ă›Ă›Ă?Ă›June 2, 2014
USED CAR NEWS
NEWS BRIEFS PE Firm Buys Auction Chain
American Auto Auction Group has been acquired by Huron Capital Partners. Huron is a Detroit-based private equity investor that seeks to grow lower middle-market companies in partnership with management through customized buy-and-build strategies. AAAG has sites in South Carolina, Florida, Mississippi, Texas, California, and Wisconsin as well as private label auctions across multiple markets. Cam Hitchcock will be the new CEO of AAAG. Hitchcock recently served as the executive chairman of Primeritus Financial Services and partner at Elysian Advisors. Hitchcock has also served on the boards of two private equity-backed auction remarketing companies. Earlier, he was corporate chief financial officer of ADESA, Inc. The current AAAG President, Darris McClure, will serve as president and chief operating officer and Bruce Reese will continue in his role as chief financial officer. Bill McIver will serve in a consulting role as he transitions from CEO to an active member of the Board of Directors.
the additional capacity to service on demand. customers in the Tulsa market, Spireonâ€™s NSpire private cloud inwhich accounts for a large percent frastructure has multiple levels of of all sales in the state. redundancy to eliminate any single point of failure. Also, Spireon and wireless carrier Spireon Improves Reliability Verizon announced an expanded Spireon has announced that a 99.9 agreement that broadens Spirpercent Service Level Agreement eonâ€™s existing CDMA coverage to is available now for customers of include Verizon. Spireon customers using Spirits automotive collateral manageeonâ€™s Talon CDMA tracking device ment platform. Clients of Spireonâ€™s GoldStar GPS through its Goldstar GPS and Loanand LoanPlus CMS automotive col- Plus CMS mobile tracking platIAA Expands in Oklahoma lateral management platforms are forms, wwill now enjoy greater covInsurance Auto Auctions Inc. assured they will always have 99.9 erage, connectivity, reliability, and opened a new branch in Tulsa, Okla. percent access to their critical data performance options thanks to the IAAâ€™s new 32-acre facility in Tulsa to track vehicle assets in real-time, new agreement with Verizon. is located at 5311 West 46th Street South and will utilize 17 acres with additional room for expansion inPublished By General Media LLC cluding a second run and drive USED CAR NEWS (ISSN 1555-7413) is published at lane. The fully-functioning auction 24114 Harper, St. Clair Shores, MI 48080 facility includes a 10,000-squarePhone: 586-772-5200 or 800-794-0760 Fax: 586-772-9400 foot building. Recycled asphalt was used for the www.usedcarnews.com top surface of the outside vehicle storage area. Charles M. Thomas The facility supports growing deFounder (1947-2002) mand in Oklahoma and gives IAA Lynda R. Thomas, Publisher DriveTime Automotive Group Inc. and DT Acceptance Corporation have commenced an offer to purchase for cash any and all of the $250 million outstanding principal amount of its 12.625% Senior Secured Notes due 2017. Meanwhile, Credit Acceptance Corp. has commenced a tender offer to purchase up to 915,750 shares of its outstanding common stock at a price of $125.58 per share.
C R O S S WO R D by Myles Mellor
Creditors Begin Buybacks
Two of the used-car industryâ€™s largest subprime creditors ae buying back notes and shares.
Colleen Fitzgerald, General Manager Editorial: Ted Craig, Managing Editor Jeffrey Bellant, Staff Writer Contributing Writers: Ed Fitzgerald, Jenny King, Sheila McGrath Columnist: Tony Moorby
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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.
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Jaguar, the Jaguar logo, and Jaguar Financial Group are trademarks of Jaguar and any use by JPMorgan Chase Bank, N.A. (â€œChaseâ€?) is under license. Land Rover, the Land Rover logo, and Land Rover Financial Group are trademarks of Land Rover and any use by Chase is under license. Retail / Loan and lease accounts are owned by Chase.
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5/27/14 3:55 PM
June 2, 2014 ÝÛÛ
USED CAR NEWS
GM’s Latest Recalls Cover Crossovers, Corvettes General Motors continues to recall millions of cars, but so far the company’s residual values are holding up well. The latest large recall involves 1,339,355 model year 2009-2014 Buick Enclave vehicles manufactured April 14, 2008, through May 14, 2014, Chevrolet Traverse vehicles manufactured June 6, 2008, through May 14, 2014, and GMC Acadia vehicles manufactured April 9, 2008, through May 14, 2014, and 2009-2010 Saturn Outlook vehicles manufactured April 14, 2008, through March 18, 2010. In the affected vehicles, the flexible steel cable that connects the seatbelt to the front outboard seating positions may fatigue and separate over time. If the steel cable becomes fatigued and separates, the seatbelt may not properly restrain the seat occupant increasing the risk of an injury in a crash. General Motors will notify owners, and dealers will inspect and, if necessary, repair and replace the lap pretensioner, free of charge. General Motors’ recall num-
ber for this campaign is 14187. GM also recalled 103,158 model year 2005-07 Chevrolet Corvette vehicles manufactured March 29, 2004 through June 22, 2007. In the affected vehicles, the underhood bussed electrical center housing can expand and cause the headlamp low beam relay control circuit wire to bend. If the wire is repeatedly bent, it may fracture causing a loss of low beam headlamp illumination. The loss of low beam headlamp illumination will decrease the driver’s visibility, as well as the vehicle’s conspicuity to other motorists, increasing the risk of a crash. GM will notify owners, and dealers will replace the UBEC housing unit, free of charge. GM’s number for this recall is 13146. Model year 2008-13 Chevrolet Corvettes will be covered under customer satisfaction program number 14203 for the same issue. While this recall is small compared to the other mas-
sive recalls from GM, it covers almost all Corvettes produced during that time. Analysts continue to project little long-term damage to GM’s residual values despite all the negative press. For example, ALG has found the Cobalt’s transaction price has fallen a negligible $300 versus the segment average since the February recall for faulty ignition switches. “Similar to Toyota’s widespread ‘unintended acceleration’ recall from 2009, GM
has seen short-term impacts to its resale values,” said Eric Lyman, ALG vice president of editorial. “It’s unlikely there will be any long-term effects, however, and ALG has no reason to forecast lower values than previously projected. “In fact, the data ALG has recorded since 1964 has proven that few ripples in the market have substantial long-term sales implications.” With past mass recalls, Ford and Toyota suffered
value drops across their lineups. After the Ford Explorer’s 2000 and 2001 Firestone Tire recall, used-market values of the entire Ford Trucks brand fell below the industry average through the mid-2000s in terms of ALG’s Brand Pricing Score. Toyota’s above-average resale value has dipped eight percent from 2009 to 2014. But a more in-depth look at industry trends indicates that larger shifts were in progress that may simply have been magnified.
5/27/14 1:23 PM
ÛÝÛÛJune 2, 2014
USED CAR NEWS
Attorney Sues over Lemon Law MADISON, Wis. (AP) – An attorney contacted by the state Department of Transportation to help draft forms in the wake of changes to Wisconsin’s lemon law filed a lawsuit to stop its enforcement until allegedly incorrect documents posted online are fixed. Vince Megna, the self-proclaimed “Lemon Law King,” filed the lawsuit in Dane County Circuit Court. Megna wants the court to order the department to take down a form he alleges is not in compliance with the law and replace it with the correct one. Megna is also asking that a document that applies to cases brought under the old law be reposted. Until all of that is done, Megna wants Wisconsin to not enforce the new lemon law, which took effect in March. A spokeswoman for the state Department of Justice, Dana Brueck, declined to comment on the lawsuit. Wisconsin’s lemon law applies to new vehicles on which the manufacturer fails to repair a warrantycovered defect after four tries in one year or fails to provide a timely refund or replacement. Before the Legislature passed the changes over Megna’s objections in December, car owners had six years to sue the carmaker, with mandatory double damages. Now, they have three years and can only get actual damages, or half as much as before. The law change also required DOT to update and make new forms
available that consumers must submit in order to bring a lemon law claim. Megna was approached by a DOT attorney in April to help interpret the law and draft the forms. But Megna declined, saying it would be a conflict given that he expected to bring cases against car manufacturers and dealers. One form posted on the DOT website is ``replete with errors’’ and a second required form has yet to be posted, making it impossible for a consumer to bring a valid lawsuit, Megna claims in his filling. Megna included copies of the emails he exchanged with the DOT attorney to help bolster his argument that the department was having difficulty understanding its duties under the law. “In my personal opinion, this provision may virtually gut the law,” DOT attorney John Sobotik wrote to Megna on April 25 about a form created by the department. “What consumer is going to know he/she has to provide a silly WisDOT form to a manufacturer in order for the Lemon Law to apply to repairs they have done?” The lemon law changes had broad bipartisan support in the Legislature and the backing of car dealers and manufacturers, including General Motors, trial attorneys and the state chamber of commerce. Megna has filed more than 3,000 lemon law cases over the past 25 years and won a $618,000 judgment in a 2012 lemon law case against Mercedes-Benz USA LLC.
Used Car Industry Takes the Hill With the expiration of the 2012 federal transportation law looming at the end of September and hearings on new bills reauthorizing the act now under way, the National Auto Auction Association led a delegation of its strategic partners in the industry through a full day of advocacy sessions on Capitol Hill, including meeting with U.S. Rep. Bill Shuster, chairman of the House Transportation and Infrastructure Committee. As the guest of honor at the day’s kickoff breakfast, Rep. Shuster addressed the legislative liaison team representing NAAA, the National Independent Automobile Dealers Association and the National Auctioneers Association, briefing them on proposed bills and policy issues in this congressional session. Following breakfast, the delegation split into three groups to tackle a schedule packed with more than a dozen appointments, including both the House and Senate leadership, and the bipartisan House and Senate Auto Caucuses.
The day’s itinerary also involved sessions with some members and staff of instrumental committees that have major influence on legislation of interest to the advocacy team’s memberships, such as the Senate Commerce, Science and Transportation Committee, the Senate Environmental and Public Works Committee, the Senate Banking, Housing and Urban Affairs Committee, and the House Subcommittee on Highways and Transit. And NAA Chief Executive Officer Hannes Combest, participating in her inaugural Day On The Hill event since her association joined the united advocacy effort earlier this year, introduced her strategic partners to the two congressmen – Rep. Billy Long of Missouri and Rep. Jeff Duncan of South Carolina – who are professional auctioneers and NAA members. “When it comes to making an impact in Washington, there’s definitely strength in numbers,” Combest said.
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PAGE 8 - HOW TO GET A LIFE OFF THE LOT
Dealer Turns Big Game Hunter on African Safari By Jeffrey Bellant
Car dealers who want to bag an Impala usually go to the local wholesale auction. But Andy Gabler traveled all the way to South Africa to take down a four-legged version of the impala. Gabler, president of Lakeside Auto Sales in Erie, Pa., has been in business for 14 years. He had two used stores before adding a Buick-Chevrolet franchise last December. He currently carries about 120-plus units in his used-car stores, selling about 90 a month, and the franchise store carries 120 new and used vehicles. Last year, Gabler took time away from his lot to go on an African safari, a oncein-a-lifetime experience that Gabler finds hard to put into words. “It was just an adventure,” he said. “What a beautiful country.” Gabler’s trip resulted from his participation with a friend in a 2012 golf fundraiser for Bethesda Children’s Home. The event featured an auction, and one of the prizes offered was a safari and hunt. Neither Gabler nor his friend were hunters, but thought it would be a great experience. So they bid on the trip and won. They traveled to the country’s northern province in April 2013. Gabler made the most of his trip. He is a biker and just prior to his safari, Harley-Davidson had sponsored its first South Africa Bike Week. So Gabler participated in that even before the safari. It was in a different part of the country, allowing Gabler to view the Indian Ocean during his travels. Once the safari started, Gabler got some action early after sighting an impala. “I was always a good shot as a kid, but first day out, five minutes into the safari, I shot an impala,” he said. “At this time, I was working on getting a Chevy store, so I really wanted an impala hanging in the office.” Gabler was apprehensive about killing an animal at first, but he was heartened to see that it was more than just getting a trophy mount.
ÛÛÝJune 2, 2014
“They use every bit of the animal, probably a lot more than your local butcher shop uses (of a cow),” Gabler said, “Everything on that animal you shoot is being used by the natives or taken to market. “I don’t think there’s any part of the animal they don’t use.” So with the exception of the mount, the rest of the animal stays in country. The next day out, Gaber took down a blue wildebeest, but his next triumph was something more imposing. “The following day I got a kudu, which was absolutely huge,” he said. “This thing was 2,500 pounds. It’s like a very large antelope and the horns on that thing were 54 inches.” Gabler also learned that a giraffe is less gentle and safe than he might have thought. “We were going through the brush and I saw a giraffe,” he said. “So I had my iPad with me and thought, ‘I gotta check this thing out.’ So I started running after it with my iPad camera. But my guide looked at me and said, ‘that’s not a smart thing to do.’ “I asked, ‘why?’ And he said, ‘because they can kill you as fast as a lion. All they have to do is swing their head at you once and they can kill you.’” Gabler said while driving through the country, he was struck by its vastness. “It was like driving out West here, only 10 times bigger,” he said. “You may have heard the song, ‘The Sign of the Southern Cross.’ But in South Africa, at night, you can look up at the stars and actually see the Southern Cross. It’s just beautiful in the night sky. “The ocean was beautiful, the people were very friendly and the food was out of this world,” Gabler said. “It was just one adventure after another.” He was even able to use the experience to help out the National Independent Automobile Dealers Association, where he serves on the executive board. Since Gabler’s safari had been the result of a fundraiser, he asked Shaun
Photos Courtesy of Andy Gabler IMPALA (INOPERABLE): Andy Gabler, a past Pennsylvania Quality Dealer, poses with an impala (above) while on a South African safari in 2013. He also took down a 2,500-pound kudu (below).
Keeney, the owner of Shaun Keeney agreed and last Keeney Safaris, if he would year the auction raised also be willing to donate a more than $12,000 for the trip to raise money for the foundation. NIADA Foundation. Gabler said he would love
to return to the country when his sons are grown. Until then, he looks forward to receiving his impala mount for the Chevy store.
NEXT ISSUE: NIADA www.usedcarnews.com
5/27/14 4:30 PM
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5/23/14 9:13 AM
~ÛÝÛÛJune 2, 2014
USED CAR NEWS
Nowcom Adds SiriusXM SiriusXM announced that Nowcom will provide seamless integration of the SiriusXM Pre-Owned Program into its DealerCenter dealer management products. DealerCenter is Nowcom’s all-in-one DMS software that helps dealers manage their customers and leads, sales, inventory, financing, websites and online marketing. The 4,500 dealerships across the country that utilize DealerCenter
dealers already participating in the program,” said Joe Verbrugge, senior vice president and general manager of the auto remarketing division for SiriusXM. “Once enrolled, dealers can demonstrate SiriusXM’s unparalleled entertainment offerings and give customers the added value they look for when buying a preowned vehicle.” Rob Lekstrom, Nowcom’s chief operating officer, said this move is an-
“We continually strive to innovate and improve DealerCenter with the goal of adding value for our dealers. ” Rob Lekstrom can easily enroll in the SiriusXM Pre-Owned Program, identify vehicles in their pre-owned vehicle inventory that are equipped with factory-installed satellite radios, and demonstrate SiriusXM during test drives. Customers purchasing any pre-owned vehicle with a factory installed satellite radio from a participating dealership will receive a three-month SiriusXM subscription. “DealerCenter’s integration of the SiriusXM Pre-Owned Program offers dealers another way to easily give their customers more with their vehicle purchase and join more than 12,000
other way the company supports its dealers. “DealerCenter provides dealers with the best resources and technology in the marketplace to help generate sales and increase profits,” Lekstrom said. “We continually strive to innovate and improve DealerCenter with the goal of adding value for our dealers. Now with just a click of a button, dealers can participate in the SiriusXM Pre-Owned Program strengthening their ability to offer the latest audio entertainment features and amenities in high-quality vehicles at an incredible value.”
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~Ă›Ă?Ă›Ă›June 2, 2014
USED CAR NEWS
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AG Sues Dealer for Safety, Finance Issues The West Virginia Office of the Attorney General has filed suit against Thomas J. Matthews, doing business as Downtown Used Auto Sales, alleging numerous violations of the West Virginia Consumer Credit and Protection Act and other applicable consumer protection laws and regulations. The Office of the Attorney General first opened an investigation into Downtown Used Auto Sales in September 2012 after receiving numerous complaints from Huntington-area consumers. At the time the suit was filed, the Office had received 22 formal complaints alleging a wide range of violations of the Stateâ€™s consumer protection laws in the sale and financing of used motor vehicles. The allegations included that Matthews sold unsafe vehicles, refused to repair significant mechanical defects, added unlawful finance charges, repossessed vehicles
without the required legal notices, and illegally disposed of consumersâ€™ personal property. The Office issued an investigative subpoena to the car dealer on April 25, 2013, which asked for documents and information about his sales and financing practices. The filing summarizes 18 consumer complaints that illustrate the serious issues that consumers encountered with Downtown Used Auto Sales, including the sale of vehicles with mechanical defects, vehicles that could not pass inspection, illegal finance charges and fees, and repossessions without the required notices. The suit asks the court to enter an order prohibiting Matthews from violating the staeâ€™s Consumer Credit and Protection Act, and also asks the court to award civil penalties to the State and restitution to all consumers who have been aggrieved by the storeâ€™s practices.
CarMax Moves into Pacific Northwest CarMax Inc. officially opened its first store in Spokane, Wash. The store is the companyâ€™s first in Washington and its first store in the Pacific Northwest. During a grand opening celebration, CarMax announced that The CarMax Foundation will invest
more than $20,000 into providing the Boys & Girls Club of Spokane County â€“ Northtown Club with an Imagination Playground. The playground will be donated as part of The CarMax Foundationâ€™s $4.1 million national partnership with KaBoom.
5/27/14 4:05 PM
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5/22/14 2:55 PM
~ÛÝÛÛJune 2, 2014
USED CAR NEWS
PEOPLE IN THE NEWS AutoTrade Hires Analyst
AutoTrader has hired Michelle Krebs to provide industry analysis and insights from AutoTrader’s trove of consumer and industry data. Krebs will work out of AutoTrader’s Detroit office. Krebs is an automotive industry veteran with over 30 years of experience studying trends and reporting on them.
director of analytics he helped Mitchell launch a solutions development team known as the ClaimsLab. Prior to Mitchell, he served as chief data scientist for The Walt Disney Company’s Customer Data Environment. These recent roles followed more than 20 years of experience in applying data science within financial services companies including GMAC Financial Services, HSBC Auto Finance and Alltel Information Services.
Auctioneer Wins Championship
Fredericksburg, Va.-based auctioneer Ben DeBruhl came out on top of a field of 65 competitors to win the title at the 2014 World Auto Auctioneers Championship, held May 9 at ADESA Boston auto auction in Framingham, Mass.
including Manheim North Carolina, Manheim Fredericksburg, Manheim Baltimore-Washington, Tidewater Auto Auction and Richmond Auto Auction. “It’s kind of hard to put into words. It’s a little overwhelming,” DeBruhl said. “You go to that contest and you
DeBruhl, competing in the WAAC for the sixth time, earned the $5,000 top prize. He was joined as a world champion by ringman Phillip Gee III of Shelby, N.C., and the championship team of auctioneer TJ Freije of Clayton, Ind., and ringman Bobby McAdams of Martinsville, Ind. They each earned a $2,500 prize. DeBruhl sells at several auctions in Virginia and surrounding states,
meet so many great people and so many friends. “That contest has been an extraordinary thing for my career, but also for my personal life. I’ve got great friends from being part of it and it’s broadened my whole career. It’s been great to me.” The competition was broadcast live on NIADA.TV, NIADA’s Internet video portal. A recap of the event is available on the site.
Finance Company Appoints VP
AFC Names Marketing Exec
KAR Auction Services Inc. announced that its business unit Automotive Finance Corp. has selected Huey Antley as its first vice president of marketing analytics. Antley joins AFC from Mitchell International, a provider of software solutionsIAG_UCN-jun2_All.pdf for the property 1and5/13/14 casualty insurance industry, where as
AFS Acceptance LLC announced the appointment of Eric Van Eaton as vice president of loan servicing. Van Eaton will lead all aspects of loan servicing including collections, customer service, remarketing, and post charge-off recovery. Prior to joining AFS, Van Eaton spent twelve years at Consumer Portfolio Services, first as call center manager and more recently as vice president of servicing in Orlando, Fla., where he was responsible for operations in the company’s regional call center. He also served as branch manager for Mercury Finance Co. and Security Finance. Before working in the finance industry, Van Eaton served in tactical intelligence for the US Army. He earned a Bachelor of2:12 Business Administration from PM University of Phoenix.
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$5,755 $5,960 $6,261 $6,277 $6,079
98,759 98,041 97,850 98,438 98,261
JAN 2014 FEB 2014 MAR 2014 APR 2014 YTD AVG:
$4,621 $4,600 $4,699 $4,713 $4,659
108,480 109,110 110,410 110,363 109,613
JAN 2014 FEB 2014 MAR 2014 APR 2014 YTD AVG:
$11,915 $11,526 $12,532 $13,002 $12,269
95,369 98,447 97,034 97,113 96,986
JAN 2014 FEB 2014 MAR 2014 APR 2014 YTD AVG:
$6,032 $6,200 $6,740 $6,650 $6,426
108,148 109,359 106,763 108,049 108,044
JAN 2014 FEB 2014 MAR 2014 APR 2014 YTD AVG:
$12,889 $13,003 $13,560 $14,009 $13,379
110,316 111,078 109,807 108,778 109,971
JAN 2014 FEB 2014 MAR 2014 APR 2014 YTD AVG:
$13,512 $13,627 $15,598 $15,819 $14,767
80,365 81,643 75,679 75,541 77,991
JAN 2014 FEB 2014 MAR 2014 APR 2014 YTD AVG:
$11,234 $10,978 $11,760 $11,787 $11,450
104,342 107,258 105,340 106,392 105,840
JAN 2014 FEB 2014 MAR 2014 APR 2014 YTD AVG:
$6,079 $6,325 $6,572 $6,772 $6,456
117,452 116,725 118,393 117,166 117,446
FULLSIZE CAR LUXURY CAR MIDSIZE CAR
SPORTS CAR M
CURRENT YTD, THROUGH APRIL 2014
JAN 2014 FEB 2014 MAR 2014 APR 2014 YTD AVG:
AVG SALE PRICE
SOURCE: MANHEIM CONSULTING
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USED CAR NEWS
RETAIL MARKETS COLORADO
John Roser, sales manager, Great Western Auto Sales, Canon City, Colo.: “We have two locations, only a couple of blocks from one another. “The primary location has better highway frontage and where we have some of our top tier vehicles. “Both have buy-here, payhere business. About 50 to 60 percent is buy-here, payhere. We do some subprime. We also offer consignment services and, at any one time, we have four or five of those. “The owner bought the business about three or four years ago. “Last year was a really good year. “We carry an inventory of 50 to 60 vehicles at both stores. “We shoot to (sell) 30 to 35 units per month. Sometimes we hit it, sometimes we don’t. “We source our vehicles from auctions. We’ve tried to expand our auction base. We’ll go to auctions in Denver, but we also have a buyer
who (shops) in Nebraska and Iowa. Lately, we’ve even purchased vehicles out of Nevada. “The average retail is between $5,995 to $14,995. We sell an awful lot of vehicles in the lower range. “We try to get vehicles that are 2000 and newer. “The older vehicles either have to be very clean or have exceptionally low miles. Our newest vehicle is around 2010. “If we can get a vehicle with 100,000 miles or less, we feel like we’ve done pretty good. “We get a lot of (requests) for Jeeps and domestic trucks, but we do have folks who love Subarus, Toyotas and Hondas, like everyone else. It might be a close to even split between domestic and imports. Subarus are hard to keep on the lot, like the Legacy and the Outback. “We’ve tried to keep our reconditioning costs down. On average, it’s $500 to $1,000. “This year can be as good or better than last year. It goes down to having our process streamlined and
Compiled by Jeffrey Bellant getting deals done right. “(For advertising), we used to shop heavily for print advertising. But we’re not convinced that people are reading their local paper for buying decisions. So we’ve got a renewed focus on improving our online presence. “We’d like to make our website less about inventory and more about who we are, what we do and how we finance people. “We had a single mom come in recently and we got her into a fully-loaded, 2001 Ford Windstar van. It had 113,000 miles. We sold it for $5,995. She was thrilled with it.”
Mark St. Marie, managing member, Hawaii Auto Outlet, Kapolei, Hawaii: “We have two stores, one in Hawaii and one in Las Vegas. The one in Hawaii has been in business for four years. The one in Las Vegas has been in business a little over a year. But they are identical stores. “We keep anywhere from 50 to 100 (in inventory) at
the store. Our (inventory) is a mix of cars and trucks. “Sales vary, depending on the time of year. But we probably average 25 to 30 cars a month. “We get our vehicles from auctions and from the military. We also buy cars outright. “The average retail price for us is around $10,000. “Our terms are less than three years, which gives us flexibility to sell paper. “The average model year that we sell in the Hawaii store is from 1995 to 2007. “For mileage, most of our cars are going to be between 75,000 to 150,000. The thing is, we make sure our cars are completely, 100 percent ready to go when we put them out. “The cost of reconditioning varies, too. But the average cost is right around $1,000. “We like to carry more imports, mainly because you get a lot fewer comebacks. “If we don’t have cars coming back, we can get more cars done for the lot and keep people happier. Then they stay out and re-
cruit (customers). “Our dealer management system is Auto Manager. “We do our own service work on the cars. We have five bays in the Hawaii store. We also do outside service. “Service is key to everything. If you can do enough service to pay your bills, payroll and fixed costs, the rest takes care of itself. “For marketing and advertising, we do the basics – things like Craigslist. “We do some banner advertising. “The majority of Hawaii is word of mouth. It’s a 40-mile coast. Everybody knows everybody. “A big difference in Hawaii is in car registration. You pay a flat fee based on the weight of the vehicle every year. So if you pay a $300 registration the first year, it’s $300 every year. “So what happens is, as the value of the car goes down, rather than pay the registration fees, they will get behind in paying the registration fees and people will just abandon the car. We will buy some of those cars.”
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USED CAR NEWS
WHOLESALE MARKETS COLORADO
Matt Read, general manager, Loveland Auto Auction, Johnstown, Colo.: “Business has been really good. We had a huge first quarter due to tax season. “April was good as well. “Our run numbers were up a little bit in the first quarter. That’s started to settle down a little bit, cars are a little tougher to come by, but we’re hanging in there. “Our auction is always growing a little bit. We always see an increase in bidders every year and this year is no different. We get bidders from Nebraska, Wyoming, a few from New Mexico. The majority of our business is Colorado-based. “Everybody seems to be happy. They all had a good tax season. “The dealers in Wyoming who are near Indiana reservations had an extra tax season because the Indians settled a lawsuit and received large checks. “We do really well with trucks. Any truck sells well. “The $10,000-and-under
cars and SUVs are our bread and butter on that side. “We don’t do anything online. “Business seems to have slowed down in the past couple of weeks. The kids are getting out of school and we always get that summer slump. “About 90 percent of units are dealer consignment. The rest come from local banks. “The dealers were keeping all their trades for a while. They’re not holding onto stuff like they used to. They’re starting to send more cars to auction. A majority of our consignment comes from new-car stores. “We have a loyal group of consignors. We’re about 45 mils north of Denver.”
Mike Clopton, general manager/partner, Oklahoma Auto Exchange, Oklahoma City: “We are starting our 10th year in business, which is a great blessing. “We have four lanes and we’re running all four.
Compiled by Jeffrey Bellant “Our volumes have been good. We’re running about 750 a week, which is about the same as last year. But last year’s volumes were ahead of the previous year’s. “The difference this year is that our sales percentages have grown. We’ve had 65 to 70 percent sometimes. We used to be a high50-percent sale last year. This year we’ve been in the mid-60s. “So the volume has been the same, but we’ve been selling more cars. “Last year, we had a strong year for an auction our size. “We usually have about 250 dealers in the lanes. Those dealers are mainly coming from this part of the country. We’ll get them from Oklahoma, Texas, Arkansas and Kansas. Occasionally, we’ll get dealers that come from a greater distance than that. “We mainly sell new-car trades, about 70 percent, with maybe 30 percent being fleet/lease. “Some of our big lease consignors include LeasePlan USA, which is really consistent. It’s a great company.
We also sell for Automotive Solutions, which runs about 200 cars a month. They remarket for different companies. They’re really good cars that are well-maintained and well-kept. “A lot of auctions set out to be a national auction, but I want to have a good auction for Oklahoma City and Oklahoma. “The mood is good. I think the shift in residual values on some of the lease cars has helped. People have had to pay so much for vehicle in the last couple of years that it’s kind of thrown the business off a little bit and affected the retail side. “So it’s good that more vehicles are hitting the marketplace. “You know, the philosophy that the seller always has to win is not that good for the business. “We’ve had a month or so where the buyers win and that has to happen sometimes, too. “We get a huge boost during tax season, maybe more so this year than in the past. It was during that time that we started hitting over
70-percent-sold. We saw (the bounce) in February, March and the beginning of April. It went longer than we expected. It’s always good, but this year it was special. “Our average price is $4,470. That’s about the same as this time last year. I think we might be $100 higher. “We are getting more post-sale inspections than in the past. “I’m excited about our business. We fought so hard to get where we’re at and we’re at the size we want. “My son has come here over the last six or seven years, so I don’t have those 60 to 70 hour weeks. I’ve given everyone a little more responsibility. “What I’ve found, if you just let people do their jobs and leave them alone, they’re going to come up with better ideas than I would by myself. “So we have some growth in our business financially and in numbers, but the great growth has been in the (success) of our employees.”
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WE DID IT: Manheim employees who participated in the Make-A-Wish Orange County and the Inland Empire’s annual walk celebrate after raising $8,520
More than 80 employees from three Manheim operating locations in California and their family members took part in the Make-AWish “Walk for Wishes” fundraising event at Castle Park in Riverside on April 12. The groups from Manheim California (Anaheim), Manheim Riverside and Manheim Southern California (Fontana) participated in the walk and raised $8,520, the second-highest amount raised among sponsors of the Make-A-Wish Orange County and the Inland Empire event. “As an organization, we count on businesses like Manheim to provide financial support that is necessary for us to grant the wishes of children in our local community,” said Stephanie McCormick, president and CEO of Make-A-Wish Orange County and the Inland Empire. “We are grateful for the support from Manheim, its employees and customers that will help make a difference in the lives of many children and their families.”
Ally Financial Names Top Sales
Ally Financial recently recognized its top performing auctions for 2013 with the SmartLane Auction of the Year Award and the SmartAuction Mid-Stream Auto Auction of the Year Award. Taking top honors for its SmartLane performance was ABC St. Louis Auto Auction of East St. Louis, Ill. The award marks the second consecutive win for ABC St. Louis Auto Auction. Second and third place finishes for the SmartLane award go to Dealers Auto Auction of Oklahoma City and ADESA Los Angeles respectively. Additionally, Ally’s SmartAuction online wholesale auction site an-
nounced that the 2013 Mid-Stream Auto Auction of the Year Award winner is once again Flint Auto Auction based in Flint, Mich. It is the third consecutive award for Flint Auto Auction, which was the number one seller of SmartAuction vehicles among all the auctions that work with the online auction site. 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: email@example.com
5/27/14 4:11 PM
June 2, 2014Ă›Ă›Ă?Ă›Ă›~
USED CAR NEWS
Disconnected Jottings From Tony Moorby... It seems more and more people want to tell us how to run our lives. I fully understand that we should stay within the parameters of the law â€“ although that seems to be more challenging to
labels on courses and books just in case the student is offended by the courses content. It may refer to racism, as in â€œTom Sawyerâ€? or homophobia as in â€œThe Great Gatsbyâ€? or any reflection of
Ć€É&#x; Ĺ´Ĺ°Ć?3,É&#x;0.,(É&#x;) É&#x;."É&#x;#(/-.,3 Ć€É&#x; ,-#(.É&#x; ,)'É&#x;ĹąĹšĹšĹˇĆ‘Ĺ˛Ĺ°Ĺ°Ĺ°É&#x;) É&#x;É&#x;É&#x; É&#x; /.)').#0 Ć€É&#x; ,0É&#x;-É&#x;Ć‰-É&#x;2/.#0É&#x;0#É&#x;É&#x; É&#x; *,-#(.É&#x;) É&#x;-&-É&#x;(É&#x;',%.#(! Ć€É&#x; )),3É&#x;Ć É&#x;--)#.-É&#x;Ĺ˛Ĺ°Ĺ°ĹśĆ‘*,-(. Ć€É&#x; 1,É&#x;."É&#x;#(!É&#x;) É&#x;)(),É&#x;3É&#x;É&#x; É&#x; Ć€É&#x; É&#x;&&É&#x;) É&#x;',
many, these days â€“ but I fear that very soon weâ€™ll be required to sign a waiver of liability before we set foot out of bed or leave the house. To err is human, but it would appear that someone is waiting around the corner with a lawsuit just in case you do. Itâ€™s gone a stage further â€“ you are liable if you are insensitive to someoneâ€™s feelings or offend them in some way. For instance, I heard this morning that some colleges are issuing warning
everyday life from the greatest annals of literature. No one ever told me that â€œThe Millerâ€™s Taleâ€? from Chaucerâ€™s â€œCanterbury Talesâ€? was going to be so bawdy and sexually explicit. But I canâ€™t remember going home in tears and complaining to my parents that the English class and its teacher, Mr. Williams, had caused me some offense. Why would a student who is easily offended take a course, which may offend in the first place?
Maybe this is another namby-pamby nail in the coffin that contains the carcass of once-self-reliant Americans who took risks and loved adventure and rejoiced in their own independence. I fear that the children born since the millennium will have no will of their own and be led by simpering teachers and parents, willing to make excuses for all thatâ€™s going to upset them in their lives to come. Whatâ€™s going to become of their limp-wristed children? I dread the thought. Who makes the judgment that something is offensive in the first place? Whoever they are, who says their judgment is better or more insightful than anyone elseâ€™s? Another move to the vanilla life or more like a padded cell, a million miles from the self-determination that made this country great. How will todayâ€™s youth become inured to the worldâ€™s tough and edgy offerings? The rest of the world is
C R O S S WO R D
getting tougher by the minute and there doesnâ€™t seem to be any let-up. There is the awful situation in Nigeria, with schoolgirls being kidnapped. Ukraine is on a knife-edge and possibly going to split into two and who know whatâ€™s going to happen to U.S.- Russian relations. Putinâ€™s a hard man with all kinds of home support. Meanwhile the Middle East is still in uproar â€“ sectarianism is a way of life and we arenâ€™t likely to change a thing by insisting on the formation of democracies. This â€œLetâ€™s be fair to everyoneâ€? position leaves us sitting on the fence here and abroad. It makes us look lily-livered and weak-willed. I think it better to stay out of situations we have no
To see past columns from Tony Moorby, visit www.usedcarnews.com/ columnists/tony-moorby
Sponsored by INSURANCE AUTO AUCTIONS
By Miles Mellor
Across 1. Their 356 was sold between 1948 and 1965 5. A3 and Q5 9. British sports car maker that makes the M12 10. Terrain or Savana 11. Steered the car 13. Engine shape as in V6 14. Useful degree for an auto innovator, abbr. 16. Regret 17. Fiat is based here 18. Formulated 20. Detroitâ€™s founder 22. Gamma Coupe, Fulvia Coupe or Aprilia
1. Bonneville maker 2. Give a new name to a model 3. Malibu or â€˜Vette 4. Ford crossover 5. Hyundai subcompact 6. Viper or Journey 7. Mitsubishi Eclipse, for one (2 words) 8. Mph measures it 12. Saturn compact crossover 15. Renoâ€™s state 19. XJS or XF 21. Fruit and a law 23. Tennis pro Kournikova 24. iPhone program, briefly 25. What trucks go uphill in (2 words) 26. Buick luxury car 27. Before now 29. Mercedes competitor 31. Former partners
26. It has been named Motor Trendâ€™s Truck of the Year five times 28. City related 30. Sales person 32. Conceit 33. Expression of surprise 35. Station ____ 36. Untrained 38. ___ Insignia 40. Appropriate 42. Compass direction 43. Type 76 or Type 84 Lotus 45. Carmaker whose logo is a horse rampant 46. Repair 47. Computer chief, abbr. 48. George Washingtonâ€™s dream 49. French car maker 50. Focus and Fusion
chance of improving or, even worse, empowering people who will turn against us in spite of help and investment. Our home politics are the same â€“ donâ€™t upset anyone and just stay in the gray. Itâ€™s a recipe for achieving not much. I still love this country and couldnâ€™t think of anywhere better to live, perhaps with the exception of Australia or New Zealand, but they speak funny! So, I guess weâ€™ll keep letting people out of prison because itâ€™s too crowded in there and crying over an execution that caused pain to a murdering rapist of a mother and daughter. Seriously? Donâ€™t tell anyone, it may cause offense.
Answers to the 5/19/14 puzzle 1
34. Muscle car (2 words) 37. Card type 39. Car dealerâ€™s offering 40. Western U.S. gas brand 41. Couple 44. Alias, for short 45. Honda subcompact 46. Miami locale
T N E
M A I
B M A
T E R
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5/23/14 1:19 PM
ÛÝÛÛJune 2, 2014
USED CAR NEWS
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Tony DiPanni Director of Remarketing Operations SmartAuction
Helping our dealers win, that’s what being All In is all about.
With access to nearly 18,000 vehicles daily – including exclusive Ally off-lease vehicles – and a mobile app that lets you control your inventory from anywhere at anytime, SmartAuction® continues to revolutionize auto remarketing. To learn more about Steve, Tony and our remarketing team’s total commitment to your success, scan this QR code, visit allysmartauction.com or contact your SmartAuction Area Remarketing Manager. ©2014 Ally Financial. All rights reserved. SmartAuction is a registered service mark of Ally Financial Inc.
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