BOOK IT. BANK IT. M
June 3, 2013
Try it FREE. www.GoBlackBookMobile.com/Free
ON THE WEB: IARA Offers Input for Online Platform Sales
Tesla Makes Bold Resale Guarantee
The International Automotive Remarketers Alliance (IARA) has prepared a white paper outlining a set of standards for online platform selling.
TransUnion, Carfax Develop Risk Tool
TransUnion has developed a risk assessment model designed to help auto lenders evaluate the potential for future loan delinquency based on the history of the vehicle used as collateral. The TransUnion Vehicle History Score was developed in partnership with Carfax and uses vehicle-specific information to help lenders improve risk segmentation.
Armed Forces Set Dealership Off Limits
A Virginia used-car dealership has been formally placed off-limits to all military personnel in the Hampton Roads area by the Joint Armed Forces Disciplinary Control Board for Southeastern Virginia and Northeastern North Carolina.
CHARGING AHEAD: The Tesla S recently wowed the staff at Consumer Reports, earning the highest rating ever from the magazine. The company also thrilled investors with its recent earnings. By Ted Craig
Tesla Motors continues to take on the traditional automotive industry, with one of the latest moves being an increase in the Model S resale value guaranteed to be the highest of any premium sedan brand made in volume. Buying a Model S through
the Tesla financing offering now comes with a guarantee that the resale value will be higher than that of BMW, Audi, Mercedes, Lexus or Jaguar. These companies have some of the best resale values in the industry, but it is not out of the question for Tesla to top them, said Alec
Guiterez, senior market analyst for automotive insights at Kelley Blue Book. “The Tesla S will definitely be able to hold its own just because of its advanced technology and because it’s thrilling to drive,” Guiterez said. Eric Lyman, vice president for partner development at
ALG, said Tesla’s short supply of vehicles and positive media reception will also boost its resale value. The firm is hedging its bets. Black Book managing editor Ricky Beggs said the resale guarantee definitely works based on the specific way Tesla has calculated resale value.
Rush - Dated Material
Most EVs Fall Far Short of Expectations Tesla Motors stands out for many reasons. Chief among them is it’s one of the few electric vehicles to show signs of success. At the other end of the spectrum is Fisker Automotive. The firm finds itself in a desperate search of a last-minute savior, similar to what Saab went through last year. If the effort fails and Fisker goes completely under, its vehicles will suffer the same fate as Saab and Daewoo on the used-car market. The biggest issue for all those brands became the availability of parts for repairs. That becomes an even greater concern given Fisker’s
electric powertrain. Most average consumers will probably avoid them, said Alec Guiterez, senior market analyst for automotive insights at Kelley Blue Book. “There could be some collectors that seek them out,” Guiterez said. Even the electric vehicles sold by major manufacturers, such as the Nissan Leaf and the Chevrolet Volt, have failed to meet expectations. “It’s very clear consumer demand has not been up to par with manufacturers’ projections,” said Eric Lyman, vice president for partner development at ALG.
Take the betting out of bidding To learn more, turn to the back cover or visit auctiongenius.com/go/genius
5/28/13 5:34 PM
New engine. Better handling.
Â© 2013 ADESA, INC.
Test drive today.
5/28/13 5:35 PM
June 3, 2013ÛÛÝÛÛ
USED CAR NEWS
Dealer Made His Mark While Spreading Gospel By Jeffrey Bellant
LAS VEGAS – The National Alliance of Buy-Here, PayHere Dealers added John Linnehan, former owner of Linnehan’s Credit Now Auto in Ellsworth, Maine, to its Hall of Fame. Ingram Walters, owner of iCars in Monroe, N.C., announced the award during the NABD conference at the Wynn Las Vegas. “He’s a legend in our industry,” Walters said. “For over 60 years, the name ‘Linnehan’ was well known across the state of Maine. Those close to him, like me, knew that he rose on the tide of his own ambition. “He’s one of the few men I’ve seen in Las Vegas carrying a Bible.” Since selling the business, Linnehan has been working on Christian ministry fulltime, planting churches and schools, along with and other work through his Good News Center in Trenton, Maine. Linnehan also gave an inspirational session to dealers at the NABD and he made it count. He brought in a friend
who performed “God Bless America,” along with a couple of other songs. “This is one of the highest honors I’ve ever received in my life,” Linnehan said. His talk was as much a sermon as anything else, as he quoted the Bible throughout and even ended with a prayer for the attendees. But he also focused on the traits needed to achieve success in business and life. He talked about the importance of character and integrity – keeping your word. Linnehan said leaders also need confidence, humility, focus, vision, goals and fun. “You can have fun (despite what others might say),” he said. One of the most important traits a leader must have is love, Linnehan said. He also said that leaders must always try to excel and improve at what they are doing. At the same time, contentment is also important, he said. Although Linnehan’s goal was always to achieve the great success he’s had, he
Photo by Jeffrey Bellant WELCOME TO THE CLUB: Ken Shilson, left, and Ingram Walters, right, of the National Alliance of Buy-Here, Pay-Here Dealers, welcome John Linnehan, center, to the NABD Hall of Fame.
warns other dealers about the dangers of fame. “Don’t let it go to your head,” he said. Linnehan said striving for these traits and values can help dealers reach their goals. Linnehan’s plan for success apparently worked.
“He was the largest usedcar dealer in Maine for many years,” Walters said. One of the times he came up short was when he made a bid for the state Senate in Maine and lost, Walters said. But it was one of the few endeavors he failed to
succeed at. Walters said Linnehan’s dedication to his vision and the way he has carried himself has been an inspiration to him, “Despite the fact that I stand over 6 feet 5 inches tall, I always feel small when I’m next to him,” Walters said.
Credit Reports Offer Insights Beyond Bad Score By Ted Craig
Many buy-here, pay-here dealers don’t pull a potential buyer’s credit history, knowing it will be bad. They miss out on a lot of useful information by doing that. Dealer Fran Cavenaugh told attendees at the recent National Alliance of Buy-Here, Pay-Here Dealers Academy that she always has her underwriters pull credit reports. One of the main reasons is a credit report helps verify information such as residency, Social Security number and addresses. The reports also show the honesty of the potential customer. Cavenaugh said it often turns out the potential customer carries more debt than they admit. “They don’t always tell you all the debt they owe,” Cavenaugh said. “And I’m not certain they know all the debt that they owe.” There are differences between the types of debt, as well, with some creditors proving more aggressive in collections. Medical creditors are garnishing wages more often. Also, the federal government will deduct back payments on student loans from tax refunds. That can create problems in using these
refunds to catch up on car payments. Credit reports also provide important information about child support. Unpaid child support can become a major issue, landing a customer in jail which means no car payments. Another area in which an applicant might bend the truth, knowingly or not, concerns bankruptcies. A potential customer may list a bankruptcy, but say it was discharged when it was really dismissed. There’s a major difference. A discharged bankruptcy means all the requirements were met while a dismissed bankruptcy means the court voided the process. Cavenaugh said a credit report often also reveals the difference between what a dealer and a consumer considers a repo. She said many consumers consider returning a car they are unable to pay for as a minor matter, whereas a dealer views it as a voluntary repossession. Cavenaugh said the most important information in a credit report regards how the consumer paid past auto credit. “That’s how they’ll pay you,” Cavenaugh said.
Photo By Ted Craig READING BETWEEN THE LIES: Dealer Fran Cavenaugh shares her best ideas for checking a potentital customer’s credit background. Cavenaugh recommends going over credit reports.
Cavenaugh offered others tips in addition to pouring through the credit reports. A critical one is knowing the differences in types of phones and living arrangements that determine a potential customer’s likelihood to stick around.
Cavenaugh is cautious when a consumer’s cell phone comes from a pre-paid plan, such as Cricket or MetroPCS. She also prefers home owners to renters. And owning a home means having a mortgage, not a land contract or contract to deed.
5/28/13 9:43 PM
Â Ă›Ă›Ă?Ă›Ă›Ă›June 3, 2013
USED CAR NEWS
NEWS BRIEFS ALG Forecasts Lower Residuals
Personal Auto Consultant, via Auestimated market value data and ing increasingly important toNation Direct, who can answer pricing to 30 million annual visitors. ALG is forecasting a slight dequestions about financing and availcrease in 36-month residual values Avis Budget Program Takes Trades able warranties and collect personal of minus-0.5 percentage points, Avis Budget Group Inc. announced vehicle information to provide buywhich compares favorably to his- Social Media Plays Larger Role Online dealership reviews on sothat its Ultimate Test Drive pro- ers with fair market value on tradetorical norms that expected a minus-0.9-percentage point drop, ac- cial media networks are now playing gram, the companyâ€™s car sales initia- in vehicles. This value can then be applied tocording to the latest ALG Industry the most important role in the deal- tive, now accepts trade-in vehicles. ward the new vehicle purchase. ership selection process. In collaboration with AutoNation Report. Ultimate Test Drive is available in The Spring 2013 Automotive SoInc., Ultimate Test Drive off ers conALG has also launched an updated forecasting model, adding real dura- cial Media and Reputation Trend sumers a no-haggle process and fea- Arizona, California, Colorado, Florble goods as one of the new macro- Study released by Digital Air Strike tures a wide selection of late-model ida, Nevada, New Jersey and Texas. economic drivers to better reflect included an in-depth analysis of Avis and Budget rental vehicles for The program features more than 75 current factors impacting vehicle how 650 U.S. dealers use social me- purchase. Customers can shop on- makes and models. The Ultimate Test Drives are freedia and an online survey of 2,000 line at www.avis.com or www.budvalues. The Industry Report includes consumers who purchased a vehicle get.com and schedule their â€œulti- of-charge for two hours or can be as long as three days for a nominal mate test drive.â€? a macro look at the U.S. economy in the last 6 months. rental fee. The majority of car buyers said Potential buyers are assigned a and factors that can impact vehicle pricing - including gasoline prices, they consider review sites as â€œhelpdurable goods and interest rates. fulâ€? in their decision as to where to Published By General Media LLC Other measures of the nationâ€™s purchase a vehicle. The study found that 24 percent of USED CAR NEWS (ISSN 1555-7413) is published at economic health are considered, 24114 Harper, St. Clair Shores, MI 48080 including job reports, consumer consumers consider online review confidence and unique factors sites to be the â€œmost helpfulâ€? factor, Phone: 586-772-5200 or 800-794-0760 Fax: 586-772-9400 such as the recent â€œsequester,â€? the exceeding all other factors includwww.usedcarnews.com impact of which may affect used ing the 15 percent of car buyers who vehicle values moving forward. consider dealership websites â€œmost helpfulâ€?. Charles M. Thomas The study also showed that review Founder (1947-2002) sites in organic searches are becomU.S. News Adds TrueCar Lynda R. Thomas, Publisher U.S. News & World Report has exColleen Fitzgerald, General Manager panded its relationship with TrueC R O S S WO R D by Myles Mellor Car Inc. to now incorporate ClearEditorial: Book, TrueCarâ€™s used-car valuation Ted Craig, Managing Editor PAGE 21 tool, in various places on the U.S. Jeffrey Bellant, Staff Writer News Best Cars website. CAA-Santa_UCNjun3.pdf 1 pro5/22/13 4:37 PM TrueCar will be the exclusive Contributing Writers: vider of trade-in value and used car Sheila McGrath, Jenny King Columnist: Tony Moorby Advertising: Shannon Colby, Account Manager Megan Frump, Account Manager Marie Hingst, Account Manager Circulation: Helen Thomas Production: Josie Godlewski, Media Manager Tim Montie, Graphic Designer â€”â€”â€” C
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.
É&#x; É&#x; É&#x; 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.
5/28/13 5:35 PM
June 3, 2013 Ă?Ă›Ă›Â‚
USED CAR NEWS
Classic Car Sale Falls Short of Expectations The second annual Classic Motorcars spring sale in Novi, Mich., held great promise, but produced lackluster results. What should have been a buyersâ€™ and sellersâ€™ delight wasnâ€™t. Bids at the Suburban Collection Showplace, both live and off-site, were not high enough to satisfy the majority of sellers. Of the more than 150 vehicles for sale during the twoday event, only 50 changed hands. Classic Motorcars reported total sales at the April 27 28 event of $744,429, including cars sold, memorabilia and buyers premiums. Top sellers included a 1965 Dodge Coronet 500 Hemi convertible ($41,580, including the 8 percent buyerâ€™s premium); a 1940 Ford V-8 Deluxe convertible ($37,800), and a 1949 Triumph 2000 Roadster ($36,720). Canton, Ohio-based Classic Motorcars did round up an interesting and varied inventory. There were Jaguars, Mercedes and Porsches, a couple of Model Ts, handsome members of the Amer-
ican Motors family, hot rods, Corvettes and older luxury sedans. The seller of a signal orange 1973 Porsche 914 2.0-liter outlined its history on the carâ€™s windshield. The two-seater, with plaid inserts in black vinyl, had one ground-up restoration and was described as a â€œcomplete blast to drive.â€? Close inspection was encouraged. But the â€œoriginal luggage rackâ€? car did not sell. John Jacques was disappointed when his gleaming dark blue metallic 1965 Chevrolet Impala SS 396 Turbo Jet also failed to change hands as it crossed the auction block at Novi the first day of the weekend sale. The high bid was $29,000, said the Clay, Mich. resident. Not enough, said Jacques, an experienced enthusiast who spent four years bringing the Impala SS to perfection. Jacques said the Impala, which he bought locally five years earlier, had earlier had a body-off restoration. He added a dry cell battery and new air conditioning. The car features Eaton Positrac-
Photo by Jenny King KEEP ON TRUCKINâ€™: An unusual restored 1967 Ford Bronco un-cut half cab with 289-inch V-8, tow package and winch sits on display at a recent classic car sale. The truck sold for $8,640.
tion, a new interior and an aftermarket AM/FM radio with no modifications to the dash, he said. â€œThis was not my first
project of this kind,â€? said Jacques, who appeared anxious to begin another. â€œI also put in an oversize aluminum radiator and three-inch dual
exhausts in the Impala. It does not purr like a kitten.â€? Among the successful sales was a 1948 Chevrolet Fleetmaster Deluxe coupe.
#SBTIFST1PSUMBOE&VHFOF EBZFWFOUTBMFXJUIPWFS WFIJDMFTUPUBM
Starting at Brasherâ€™s Eugene on Wednesday June 26th & ending at Brasherâ€™s Portland on June 27th with a buffett dinner at 3 pm and a shuttle to the concert that evening.
auction promotions for this event will include: Discounted 60-day floats available on every vehicle purchased No consignment fees for the event sale Free local drive-in service on every vehicle consigned the week of the sale Drawing for Brasherâ€™s Backstage guitars following the sale based on bought/sold during the event sale Raffle of Steve Miller memorabillia Early bird prizes giveaways Concert Conce event promotions in every lane throughout the day Double Rewards Points earned on all auction activity Free auction breakfast CALL SALES FOR MORE INFO AT 503-489-0500
5/28/13 5:36 PM
ÛÝÛÛJune 3, 2013
USED CAR NEWS
Eco Boost Draws Lawsuit
ONE HAPPY CUSTOMER: This man is celebrating because Ford helped raise money for his cause as a way to promote its Eco Boost system. Other consumers are less happy with the company and filed a class-action suit.
Bohrer Law Firm LLC has filed a class action complaint on behalf of all Louisiana purchasers and lessors of 2011 and 2012 Ford F-150 trucks with the Eco Boost engine. The lawsuit was filed by two Louisiana residents alleging Ford manufactured and sold defective F-150 trucks with the Eco Boost engine. The class-action lawyers are
reviewing cases for residents of all states who have experienced problems with the defective charge air cooler whose vehicle has stalled, gone into limp mode, had poor gas mileage, failed to accelerate or shuddered or whose vehicle was brought to a Ford dealership to fix these issues and the repair did not resolve the problems.
You’ve got paper. We’ve got cash.
Let’s talk. s 0ORTFOLIO !CQUISITIONS s &LOW 0ROGRAMS s #OMPLIANCE 0RODUCTS
Where Relationships and Integrity Matter.
4/26/13 10:20 AM
5/28/13 5:44 PM
Our dealers’ success is a proud part of our history. Tina Childs
Account Executive, NextGear Capital, Philadelphia
We’re in this together. My success depends on your success. So every day I’m at auctions, on car lots, or wherever my dealers need me. I bring you more finance options and the best technology to manage what you buy and sell. NextGear Capital simply offers you more independence in floor planning.
See Tina’s story at
888.969.3721 052413_UCN_Tina.indd 1
Inventory Finance Solutions. Simplified.
5/24/13 1:45 PM
5/28/13 5:43 PM
PAGE 8 - HOW TO GET A LIFE OFF THE LOT
Seller Helps Raise Support for Charter School, Shelter By Jeffrey Bellant
Ingram Walters, a Monroe, N.C., buy-here, payhere dealer, spends his time off the lot serving his community. Walters sits on several boards of various organizations. For example, he serves on the foundation for his children’s charter school, which requires a lot of fundraising. “A charter school gets money from the state for operations, but they don’t get facility money,” he said. “The facility money has to be raised by the board.” Walters helps organize the fundraisers for the school. “My best fundraiser is an auction,” he said. “I don’t know if I got that idea from the car business or not. “But we go around and take donations of big-ticket items. “For example, we’ll offer a nice beach house for a week, or offer a (weeklong stay) in the mountains, or a five-course dinner party for 12 with a wine pairing.” It also includes a silent auction.
“We bring in two professional auctioneers and offer an open bar, of course,” Walters said. “We charge a lot of money and it’s a black-tie (affair) so everyone dresses up.” Walters said the silent auction is up early with the live auction coming later. As the auction gets started, businessmen start competing and showing off to win the items up for auction. “Some bidders want to show off once the egos kick in, he said. “We’ve raised $250,000 in a single night,” Walters said. He said a successful fundraiser in his county might normally reach about $50,000 or $60,000. Walters has headed up the event for 10 years. One of Walters other philanthropic efforts involves help for a local battered women’s shelter. He’ll even collect personal items for the shelter when he attends out-oftown events like the recent conference for the National Alliance of Buy-Here, PayHere Dealers in Las Vegas. “When I come to these
File photo FUNDRAISER: Ingram Walters, a Monroe, N.C., dealer pictured with his wife, Missy, helps raise money for his children’s charter school through an auction held by a foundation.
shows, I ask all of the people that I’m close with to bring the shampoos, conditioners and soaps they get in their rooms and we put them in a bag to bring to the shelters,” Walters said. Any of the dealers who travel can do this, he said.
“It’s the little things,” he said. “It doesn’t cost anything and they really appreciate it. “I used to bring the (toiletries) home. But I’ve got enough shower caps and small shampoos.” Walters said his biggest
involvement off the lot involves his three children. “I’m really involved in AAU sports and travel teams,” he said. “They play basketball. Walters jokes that he even referees the games – from the stands.
Dealer Finds Focus on Health Gives Him More Energy By Ted Craig
Looking at dealer Steve Hall a few years ago, few people would consider him unhealthy. But Hall felt less than optimal. He felt run down, just like many business owners keeping a hectic schedule. Then the owner of Dallasbased Driversselect came across two men that helped change his life. The first was Jim Loehr, a performance psychologist and author of several books, including “The Only Way to Win” and “The Power of Full Engagement.” “You have a choice every day on where to spend your time,” Hall said. Reading Loehr’s books led Hall to examine his priorities. One area he realized needed work was his health. Hall wasn’t overweight, File photo FIT: Dealer Steve Hall, right, credits Dr. Kenneth Cooper with helping him create a healthier lifestyle, one that helps him perform better at work.
ÛÛÝ June 3, 2013
but he wasn’t optimal, either. That is when he came into contact with legendary Dallas physician Kenneth Cooper. A long time advocate of proper diet and exercise, Cooper literally wrote the book on aerobics in 1968. Hall started making more time for exercise. He also started to change the way he ate, something that proves challenging for many people with his kind of job. “I love to entertain,” Hall said. “And I have to for business. So I eat out a lot.” This meant Hall needed to learn to control his meals rather than letting the restaurant do it. He avoids fried foods, for the most part, and other less healthy options. Hall doesn’t ignore cravings, but he does curb them. He might order a plate of
French fries, for example, and throw out three-quarters of them. Hall started to spread his new healthy habits to his staff. He brings lunch in a few times a week. In the past, Hall let his staff choose the menu and that usually meant pizza and other comfort foods. The energy at the store crashed by late afternoon. Now he brings in dishes that keep the staff going for the whole day. Hall has also worked stretching and movement breaks into the schedule. This may seem a waste of time and money to some, but Hall said the extra energy and healthier staff can pay for itself with one extra car sale a month. “It’s an investment,” Hall said.
NEXT ISSUE: NIADA CONVENTION www.usedcarnews.com
5/28/13 5:38 PM
Rick Williams Owner, Texas Direct Auto
Mike Welch Owner, Texas Direct Auto
Rick and Mike’s story ... “WE STARTED IN A SMALL WAREHOUSE, BUYING USED CARS, CLEANING THEM, LISTING THEM ONLINE. NOW WE SELL 1,500 USED VEHICLES A MONTH.”
When Rick and Mike of Texas Direct Auto needed more than local banks could provide, Ally stepped up with the expertise, flexibility and financing they needed to grow their used car business from a small start-up to one of the country’s most successful used car retailers. And Ally looks forward to the opportunity to be there for Rick and Mike, with tools that can help them go as far as their ambition and talent can take them. Because helping dealers work toward their full potential is more than our passion. It’s our pledge and our promise. To hear the rest of the Texas Direct Auto story, go to ally.com/dealer or contact an Ally Account Executive. ©2013 Ally Financial. All rights reserved.
3/21/13 2:32 PM
5/28/13 5:39 PM
~Â‡Ă›Ă?Ă›Ă›June 3, 2013
USED CAR NEWS
CPI Changes to Meet Needs Tuesdayâ€™s at 11am in San Antonio Fridayâ€™s at 10am in Corpus Christi
Collateral protection insurance has really taken off as a product for buy-here, pay-here dealers in past few years although it has a much longer history as a financial product. And some of that history is negative. Chris Kirwan of Berkshire Risk Services explained the product to attendees at the recent National Alliance of Buy-Here, Pay-Here Dealers Dealer Academy. Kirwan
spoke on how it differs today from some of the unpleasant past. Collateral protection insurance, or CPI, is insurance placed by a lien holder on a vehicle when the diverâ€™s insurance lapses. It only covers physical damage. CPI started in the 1970s. By the late 1980s, there were numerous lawsuits over disclosure failures and other issues. NABD founder Ken Shilson said most of these issues have been resolved, but he said dealers need to perform due diligence when choosing a provider. For dealers who do this, CPI addresses a major issue. Most dealers require proof of insurance when a consumer enters into a retail installment contract. Kirwan said about a third of all buy-here, pay-here customers will let that insurance lapse during the term of the contract. A dealer who places a CPI clause into his contract can then place the physical damage policy on the vehicle and charge the driver a monthly payment. The payment is then passed onto the CPI provider. Kirwan said the dealer doesnâ€™t have to cover the cost if the consumer fails to do so, but can if he chooses.
â€œCount On Usâ€?
&2)$!9 *5.% TH