July 20, 2015
ON THE WEB: Consumers Find Car Shopping Stressful
A new survey by Nationwide Bank reveals one in four people find shopping for a car as stressful as preparing their taxes, and three in four say negotiating the price is the worst part.
Edmunds Rolls out New Pre-Owned Program
Edmunds.com has opened dealer registration for Used+, a new used car sales program. Dealers present their used vehicle inventory to in-market shoppers with a Vehicle Protection Plan and a $200 gas card, both underwritten and administered by Edmunds through third-party providers.
Lawyers Look at Cox Bid for Dealertrack
A law firm has initiated an investigation to determine if Cox Automotive’s takeover of Dealertrack Technologies Inc. is fair to the latter’s investors. The investigation concerns whether Dealertrack’s Board of Directors undertook an adequate sales process.
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Specialty Store Enjoys Fast Growth By Sheila McGrath
You might call it a good problem to have. Since opening in 2010, a Michigan consignment dealer has grown so fast that its 22,000-square-foot building is already feeling cramped. This summer, the GR Auto Gallery is moving into a larger facility at 4722 50th St. SE, Grand Rapids, just a mile from its current location. They plan to be into the new space by Sept. 1. Owning partners Jeffrey Bowen, John Hoekstra and Christopher Hoexum said the move is needed not only to house their growing inventory, but to provide office space for future expansion. They have opened two more Michigan stores in the past three years, and envision having 10 stores within the next five years. “We think of this as our corporate headquarters, so we can manage all of our stores out of this one location,” Bowen said. “We’ll continue to add office space here to help manage those stores. Continued on page 6
Photo by Sheila McGrath GROWING: From left, partners Jeffrey Bowen, John Hoekstra and Christopher Hoexum stand at the entrance to the 36,000-square-foot building they will move into this summer.
Santander Shakes up Top Spots Following Enforcement Action Santander Consumer USA Holdings Inc. replaced its chief executive following an enforcement action by the Federal Reserve. Santander’s board named Jason A. Kulas as chief executive officer, succeeding Thomas G. Dundon. The move was announced July 2 and was effective July 15. The release from Santander states the change is in line with the firm’s succession plan and that Dundon is leaving “to pursue new opportunities.” Dundon will continue to serve as a member of the SCUSA Board of Directors and as a senior adviser to the company. However, many industry watchers point out that the
change in leadership came the same day Santander reached a settlement with the Federal Reserve Bank of Boston concerning claims of lax risk management at the finance company. Santander had 60 days to comply with the requirements of the agreement. Kulas joined the company in 2007 as chief financial officer, after covering SCUSA, since its founding, as an investment banker at JPMorgan. Kulas became President in 2013 and, since SCUSA’s IPO in 2014, has overseen the company’s corporate development, asset management, investor relations and various regulatory functions.
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USED CAR NEWS
Consumer Groups Turn up Heat on Recall Repairs By Ted Craig
Massive recalls, such as those for Takata’s air bags and GM’s ignition switches, remain in the news and pressure continues on dealers to address them. This pressure comes despite the fact that independent dealers often have no ability to fix recalls. Several states have considered bills that would require dealers to fix recalls before selling a car. Dealers in California attempted to get ahead of this threat by supporting Assembly Bill 287 that would have required used car dealers and rental companies to, at minimum, disclose whether a recall has been issued before selling a car. The bill has been tabled following objections from consumer groups. Larry Laskowski, executive director of Independent Automobile Dealers Association of California, called the bill “a very well thought out piece of legislation.” Laskowski said AB287 was
much better than a recall bill that was defeated last year. He said that bill provided no way for dealers to prove they had done their due diligence before selling a vehicle. Meanwhile, the state’s consumer groups are attacking CarMax Inc. for selling vehicles with unrepaired recalls at its used-car superstores. CALPIRG Education Fund and the Consumers for Auto Reliability and Safety (CARS) Foundation released results of research they claim show CarMax sells “unsafe, defective recalled cars.” The groups called upon California Attorney General Kamala Harris and the California Department of Motor Vehicles “to protect the public from CarMax’s sales of unrepaired, defective vehicles that are subject to federal safety recalls.” “CarMax is playing recalled car roulette with its customers’ lives, and endangering the safety of others who share the roads,” said CARS Foundation President Rosemary Shahan.
MORE RECALLS: Land Rover recently announced a pair of recalls. The company is recalling 65,352 Range Rovers for door latches and 492 LR4s for panoramic roof adhesives.
CALPIRG researchers found that during a 48-hour period, 10 percent of the vehicles CarMax offered for sale in Oxnard and 9 percent of the vehicles CarMax offered for sale in South Sacramento were subject to federal safety recalls. CarMax responded by saying it provides vehicle-specific information about open
recalls to every retail customer prior to purchasing a used vehicle from its stores. The company also includes a link to the National Highway Traffic Safety Administration’s VIN lookup website with every vehicle listed on CarMax.com. George Hoffer, a transportation economics professor at the University of Rich-
mond, said CarMax is being used as a stand-in for the entire used-car industry. “They are being attacked because this industry is so fragmented,” Hoffer said. Hoffer said the push for independent dealers to handle recalls makes little sense. They lack both the ability and the expertise to fix the recalls themselves.
7/13/15 12:40 PM
USED CAR NEWS
NEWS BRIEFS BB&T Moves to Flat Fees
BB&T Dealer Finance, a segment of BB&T Dealer Financial Services, announced the launch of a nondiscretionary dealer compensation program, providing a competitive automobile financing program that eliminates pricing discretion in the consumer transaction. The program changes were to go into effect July 1, and will no longer allow dealer markup on retail installment sales contracts. BB&T Dealer Finance will instead offer a flat-fee dealer compensation program.
ago, and once again continued to be the weakest segment. Pickups and vans were the strongest vehicle segments with pickups up 6.7 percent and vans up 2.7 percent on a year-over-year basis.
Western Funding Sets Record
Western Funding reported that June was the biggest origination month in company history. During the month of June, Western Funding funded 906 deals for $11.2 million in contracts. Western Funding’s portfolio size now stands at $84 million, a 154 percent increase over last year. The portfolio continues to outperform Wholesale Prices Move Higher Wholesale used vehicle prices expected losses. inched up in June after a consecutive four-month decline. This brought the Manheim Used Used Vehicle Sales Top 4 Million Used-vehicle sales across all retail Vehicle Value Index – a measure of wholesale prices adjusted for mix, channels reached just under 4.4 milmileage and seasonality – to a read- lion units in June bringing the yearto-date total to nearly 18.6 million ing of 123.9 in June. The strongest pricing tiers were used cars and light trucks, according everything above $15,000. Continu- to the National Automobile Dealers ing the trend of weakness, vehicles Association. Through the first six months of in the $9,000-$11,000 range also showed a significant increase in vol- 2015, used vehicles retailed were up 1.3 percent compared to the same ume of vehicles offered. Carolina_UCN July20.pdf 1 7/10/15 2:14 PM Compact car prices were down period a year ago. New-car dealers retailed 1.6 7.2 percent in June relative to a year
million used vehicles in June, up 2.5 percent for the month year-overyear. Retail sales by used-car dealers rose to 1.4 million in June, a 3.6 percent increase compared to the same month a year ago. Private-party transactions were up 1.1 percent in June 2015 compared to June 2014.
CarMax Hires for Store
CarMax Inc. is hiring more than 50 positions for the company’s new store in Maplewood, Minn. This is the second store in the Minneapolis area, with the first located in Brooklyn Park, which opened earlier this year. The more than 20,000-squarefoot store is scheduled to open in September.
NIADA joins 38 manufacturer CPO brands that use Carfax. Wherever consumers shop – online or at an independent dealership – they can find the free Carfax Report on NIADA Certified vehicles. Vehicles eligible for NIADA certification must pass a 125-point inspection and meet other requirements, including qualifying for the Carfax Buyback Guarantee.
Few Market to Millennials
Millennials now comprise more than half the workforce, but small business owners do not consider millennials in their marketing efforts. New data released by online database Manta reveals that small businesses are taking a different approach in their aim to appeal to milNIADA CPO Adds Carfax lennial customers by adapting their The National Independent Au- products and services to better suit tomobile Dealers Association is today’s convenience economy. expanding its longstanding partnership with Carfax to include the C R O S S WO R D association’s certified pre-owned by Myles Mellor program. NIADA Certified Pre-Owned PAGE 20 vehicles now come with a Carfax Vehicle History Report provided free to buyers, and are listed for sale on Carfax Used Car Listings. Published By General Media LLC USED CAR NEWS (ISSN 1555-7413) is published at 24114 Harper, St. Clair Shores, MI 48080 Phone: 586-772-5200 or 800-794-0760 Fax: 586-772-9400 www.usedcarnews.com Charles M. Thomas - Founder (1947-2002) Lynda R. Thomas, Publisher Colleen Fitzgerald, General Manager
Editorial: Ted Craig, Managing Editor Jeffrey Bellant, Staff Writer
Advertising: Shannon Colby, Account Manager Megan Frump, Account Manager Marie Hingst, Account Manager
Contributing Writers: Ed Fitzgerald, Jenny King, Sheila McGrath
Circulation: Emily Brownbaker, Helen Thomas
Columnist: Tony Moorby
Production: Josie Godlewski, Media Manager Tim Montie, Graphic Designer
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. OUR ADVERTISING APPROVAL POLICY 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.
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USED CAR NEWS
July 20, 2015 • 5
Colorado Executive Wins Top NIADA Honor
By Jeffrey Bellant
LAS VEGAS – Colorado’s Todd O’Connell was named the 2015 Executive of the Year during the National Independent Automobile Dealers Association’s annual convention here. The NIADA honors state association executives who have shown leadership, enthusiasm and dedication that brings benefits to members and improves the service potential of the association. O’Connell, executive director of the Colorado IADA, thanked his family, associates, staff and colleagues. He singled out his fellow IADA directors for their support. “I am honored and humbled to be chosen from the many outstanding, talented state executives that do excellent jobs with their associations,” he said. “They are truly a caring and giving group. Their passion for the association and industry is remarkable.” O’Connell has begun initiatives and revived others to strengthen the organization over his time at Colorado IADA. Last year’s winner, Paul John of the Georgia IADA, presented
O’Connell with this year’s honor. John and previous recipients of the award led the process to select this year’s winner. “It didn’t take long to narrow down the options to one individual that we all know deserved this award,” John said. Four years ago, O’Connell took over an association that was struggling financially. “A man of integrity and honor, he has steered this association back into a healthy state, with money in the bank,” John said. “He’s in touch with his lobbyist and on top of every bill that may affect our industry. Government officials know and trust O’Connell as an expert in the industry.” John said he has established and repaired relationships with government officials during his tenure. O’Connell also started an association charity that raised over $100,000 in its first year and created a legal defense fund to protect dealers from frivolous lawsuits. “He always conducts himself with respect, integrity, professionalism and honesty,” John said. “He was hired during a difficult time in the association and quickly proved to be the right choice.”
Photo By Jeffrey Bellant LEADERSHIP: Todd O’Connell, executive director of the Colorado IADA, center, won NIADA’s Association Executive of the Year award. He is flanked by Colorado dealer Joe McCloskey, left, and last year’s winner, Paul John of Georgia.
Firm Pays for Debt Relief Promises Regency Financial Services Inc., and its CEO Ivan Levy, have agreed to a permanent ban on telemarketing and the advertising, marketing, or sale of any debt relief products or services. In its complaint, the FTC alleged that Regency promised consumers services to stop the repossession of their vehicles, and to obtain lower
interest rates and monthly auto loan payments for an upfront fee of $499. The complaint also alleged Regency failed to honor its “moneyback guarantee.” In addition to the bans on telemarketing and debt relief services, the defendants also agreed to a judgment of $330,000 to redress the victims of their scheme.
7/13/15 4:45 PM
USED CAR NEWS
Gallery – from page 1 “That’s what’s exciting about this building – we have the room to add all that staff.” They specialize in selling classic, investment vehicles for consignors, and filling that niche accounts for much of their success, Hoexum said. Customers browse indoor warehouses filled with Porsche 911s, 1960s-era Impalas, Corvettes, Mustangs and Camaros, and showstoppers like a 1967 Ford Shelby GT 500 offered at $179,900. “They’re mostly collectible, muscle cars and high-interest vehicles that a lot of people don’t want to bother selling themselves. They don’t know the value of it, or don’t know how to sell the car themselves,” Hoexum said. And their customers like the fact that they know who they’re dealing with, he said. In the Internet age, a lot of people fear falling victim to scams. “They like to work with an accredited dealer who will respond to both sides, the buyer and seller,” Hoexum said. Hoekstra said the collective experience of the three owners helped them put together a business model that was successful even when Michigan was in the midst of the economic downturn.
“We filled a need in the Grand Rapids area when we developed that model, and it really took off,” he said. It’s a model they think will be applicable anywhere they might want to expand, he said. Hoekstra said they currently keep about 150 cars in their Grand Rapids location, but that number could rise to 200 at the new space, which will have a total of 36,000 square feet for the showroom and office. Adding in the inventory at their Traverse City and Metro Detroit locations, they have about 375 cars. In addition to showing cars through their indoor showrooms, the GR Auto Gallery maintains a strong Web presence and advertising accounts with major automotive listing sites, and interacts with customers through social networking. Most of their consignors come from their general area, but the buyers might be from anywhere, Hoekstra said. Their new location is just across the street from the Kent County International Airport, making it easy on customers who fly in just to look at a vehicle. “Our reach has really gone global,” Hoekstra said. “We have put cars on every continent except Antarctica.”
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By Jeffrey Bellant
BEST RINGMEN – DEALERS AUTO AUCTION OF THE SOUTHWEST
“Obviously we’re superhonored to win this award,” said Stephanie Gingras, general manager. “I handle the auctioneers and ringmen myself, so that’s something I take quite a bit of pride in. I personally think that ringmen are key into getting one more car sold. She said there is a list of things the auction looks for in a ringman, which include both men and women. “No. 1 is knowing the value of a car,” Gingras said. “The auctioneer and the ringman work together and there is a lot of intangible communication that is going on.” The other quality is being able to talk to the buyers and sellers, asking them about their week, their families, etc. Gingras said ringmen have to be like salespeople, where they may hear “no” a hundred times, but still be motivated to push forward. She helps encourage them with everything from a pat on the back to lunch or dinner. “The paycheck is only part of it,” she said. “I let them know, ‘I can’t do it without you.’” The ringmen are also bilingual, which is an important attribute for a sale in Phoenix, Gingras said.
BEST ONLINE SALES – SOUTHEASTERN AUTO AUCTION OF SAVANNAH
From top, America’s Auto Auction-Atlanta on sale day; State Line Auto Auction’s recon staff at work; Dealers bid at Charleston Auto Auction (middle left) and at Mountain State Auto Auction (middle right) and Ringman Omar Merida urges bidders on at Dealers Auto Auction of the Southwest.
Vice president of operations Bill McCready said the sale was hoping for a win in this category. “We do a significant amount of sales online and have been for many years,” he said. “We use SmartAuction, OpenLane, OVE, AuctionEdge – and that’s not including live simulcast. Every lane is equipped for simulcast. “We take high-definition pictures of every vehicle that comes to our sale.” The sale gets up to 100 dealers online each week, McCready said. Southeastern Auto Auction of Savannah does what it can to make it easier for dealers to use online services. “We just make a big marketing effort to get dealers to come to our sale (online) if they can’t make it (physically),” McCready
said. “We make the effort to train them and get them online. We also offer customer service to answer questions about bidding or viewing inventory.” In addition to a full-service online department, the auction has condition report writers on the road five days a week visiting dealerships. Those cars are posted online, even though they are not physically at the sale. “We’ve sold cars ranging from a few hundred dollars to cars over $100,000 by doing this,” McCready said. “That’s one of the services that dealers love.”
BEST DINING – MANHEIM PENNSYLVANIA
The auction is already known for its size, volume and long history, but dealers also love its food, naming it tops in the “Best Dining” category. Mike Strazza, the restaurant’s chef, is Italian and a native of Brooklyn. Prior to coming to Manheim nine years ago, he worked at a bakery in Lancaster. “Back home, my mother and father always had restaurants and delis,” he said. “So this is a wonderful honor.” Strazza said the auction has a 300-capacity cafeteria – Top of the Market Café – with two serving lines, a snack bar and multiple stations in the auction lanes that offer everything from fancy coffee to pizza. “On a Friday, we can feed up to 2,400 people,” he said. Robyn Eckert, manager of restaurant/facilities, said the dining facilities have about 30 to 35 workers, with about a half-dozen full-timers. “Most of the food is homemade since we don’t use outside caterers,” Eckert said. “Dealers can get anything from a salad to prime rib or chicken cordon bleu.” Strazza plans all the menus and changes it every week. “My favorite thing to make is soup,” he said. Eckert said dealers enjoy it, too, with the top sellers being philly cheeseteak soup and the lobster bisque. “Our general manager Julie Picard offered free soup to dealers throughout February and we provided 720 gallons that month,” she said. Apart from soup, prime rib with au jus and Strazza’s
salmon with a special rub are other favorites. “The biggest challenge is preparation,” Eckert said. “But Mike’s great at picking out menus and making sure the food is out there and hot.”
BEST FACILITY – AMERICA’S AUTO AUCTION– ATLANTA
General Manager Corey Sanford said although the auction was already fairly new when America’s Auto Auction group took over, the new owner put a lot of money into improving the facility even more. The four-lane auction has onsite detail and mechanic shops. “America’s gave it quite a facelift,” he said. “But I’ve always kept it immaculate. The bathrooms, the lanes, the cafeteria area, the office and lanes are immaculate. I’ve got a crew that does nothing but clean all day “Even the parking lot is picked up every day, the grass is manicured and the grounds are kept perfect.” Sanford said it’s not just for dealers. “I want the employees to be happy with their surroundings, so that when they come to work they’re proud of their environment,” Sanford said. “Everything here looks brand new everyday.”
BEST CUSTOMER SERVICE – CHARLESTON AUTO AUCTION
“For us, it’s everything,” said Jay Davis, assistant general manager of the six-lane sale. Davis has a unique perspective as he came from a chain to the independent in January. “Every person that I met – and I mean every person – just couldn’t talk enough about how much they loved the sale,” Davis said. “It’s the people. It’s the friendly atmosphere. It’s the cutting up. They feel like it’s home when they walk through the doors. “It has a lot of southern charm to it and (dealers) are treated well.” Some places make you feel like a number, whether as a customer or employee, but Charleston Auto Auction is not that place, Davis said. Everyone is helping out and no one is sitting at a desk when there are dealers to serve.
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“We do not tolerate long lines very well,” Davis said. “It’s all about taking care of people.” It’s helped the auction to grow and in August, the auction is going to add a Tuesday afternoon sale to its regular Friday morning sale.
GIVES BACK MOST – LOUISIANA’S 1ST CHOICE AUTO AUCTION
The Hammond, La., auction has a reputation for its charitable efforts, so it’s no surprise they took home the award. “We’re very excited,” said Jacob Warren, marketing manager. “It’s something we take pride in. We try to give back to the community as much as we can.” Last October, the sale raised more than $30,000 for the Susan G. Komen Cancer Foundation. “We also do a regular blood drive where our customers will donate,” Warren said. “There are two or three local charities here in Hammond that we donate to, as well as the local university.” Warren said John Poteet, the auction’s owner, has instilled in the staff that it’s the auction’s duty to give back. “Nothing bad ever comes out of giving,” Warren said. “That’s kind of our motto here. We’re in the sense that we have the means to give back. It’s also very rewarding to give.” In August, the 13-year-old dealer consignment sale will host NFL Hall of Famer Jim Kelly to raise money for Hunter’s Hope Foundation.
BEST RECON FACILITY – STATE LINE AUTO AUCTION
“It’s very exciting to be recognized,” said partner Beth Barber. “Our employees are very deserving of this award for Best Reconditioning Facility,” Barber said. “Their work is an integral part of the cycle to get a vehicle ready for sale day. The specialized duties and vast improvements that are completed on a vehicle during this process directly correlate with how well it
E: Dealer Life 08_09_UCN.indd 3
will sell on auction day.” The 34-year-old auction has eight lanes and an average of 150 cars go through the sale’s appearance reconditioning shop daily. The body and paint shop has eight technicians, Barber said. “Our shop is renowned for its top quality work with repairs ranging from minor spot fixes to major collision damage,” Barber said. The mechanical repair shop has six employees who work on everything from tires and oil changes to engine replacement. “We at State Line Auto Auction are very appreciative for the recognition and thankful to have such dedicated, diligent employees,” Barber said. “Many of our longterm employees work in these departments and it proves that experience and hard work will lead to vehicle reconditioning of the highest caliber.”
same expectations. Pre-sale and post-sale meetings help the group see what went right and wrong at a sale. On the consignment side, Mountain State has a lot of import dealers that run trade-ins. “Toyota and Nissan stores tend to get really nice tradeins,” Pyle said. “We have a lot of Toyota and Nissan stores that run all of their trade-ins with us. We also have a very high sales percentage. “So when you come to that sale, you know you’re going to buy cars. People like the product.” The auction draws a lot of the sought-after vehicles in the $6,000 to $8,000 range, which is the sale’s sweet spot for cars. “We also get a lot of highpriced trucks in the $20,000 to $40,000 range,” Pyle said. “This is truck country and 65 percent of our consignment this year is trucks.”
BEST AUCTIONEERS and BEST CONSIGNMENT SALES – CAPITAL CITY AUTO AUCTION AND MOUNTAIN STATE AUTO AUCTION
BIG EVENTS/PROMOTIONS – CAROLINA AUTO AUCTION
For the second year in a row, Capital City Auto Auction and Mountain State Auto Auction won in the “Best Auctioneers,” and “Best Consignment,” respectively. “We’re double winners again. We’re doing great,” said Joe Pyle, who owns both sales with his wife, Charlotte. Pyle said he was not shocked at the award for Capital City’s auctioneers. “Our auctioneers are very personable. They know their customers,” Pyle said. “I think we have a humble hard-working bunch of auctioneers who treat the dealers fair. “Dealers feel very comfortable with our staff.” He said a bidder who trusts the auctioneer is more likely to bid more and a seller is more likely to trust the auctioneer’s advice when a vehicle doesn’t hit expectations. Since all members of Pyle’s family also work as auctioneers, everyone has the
“This is exciting,” said marketing manager Scott Whitaker. “This is what you work for.” The eight-lane sale recently celebrated its 25th anniversary with a sale that ran nearly 1,600 cars. That sale was one example of the creativity of the auction’s marketing team. “We put a lot of effort into trying to provide a unique, exciting atmosphere,” Whitaker said. “We want it to be fun and professional.” The sale has four quarterly large promotions and an additional smaller monthly promotion, ranging from a hog roast to a “camo” sale that once had a top prize of a Remington 1187 Dale Earnhardt Edition shotgun. Another sale gave away jet skis, a golf car and golf clubs. “This is our way of giving back to the dealers to have fun and win really good prizes,” Whitaker said. So it’s no surprise the auction’s 25th anniversary sale gave away a stack of 10-ounce silver bars.
From top, Manheim PA’s restaurant; Prizes from a Carolina Auto Auction promotional sale; Louisiana’s 1st Choice Auto Auction’s staff holds a community appreciation honor; and Capital City Auto Auction’s staff, which was a repeat winner in the “Best of Auctions” awards.
7/13/15 5:18 PM
10 â€˘ July 20, 2015
USED CAR NEWS
Feds Indict Fugitive Dealer
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A federal grand jury returned an indictment charging the owner of a Ramsey, N.J., car dealership with defrauding customers and banks out of $1.7 million. Afzal Khan, a/k/a â€œBobby Khan,â€? is charged with five counts of wire fraud. Khan, who was initially charged by complaint on Dec. 23, 2014, is still at large. From December 2013 through September 2014, Khan, through his car dealership, Emporio Motor Group of Ramsey, engaged in a number of fraudulent transactions involving Rolls Royce, Lamborghini, Porsche and other vehicles. As part of his scheme, Khan obtained loans from the auto finance division of a large bank for cars that he
never delivered, but for which the purchaser was still responsible. Khan also obtained loans for cars that neither he nor Emporio had the title. As a result, the purchasers of these cars were still liable for the loan, but could not register them. In addition, Khan offered to sell cars for individuals on consignment but thereafter did not return the cars or provide any money to the purchaser from the sale. Altogether, Kahn fraudulently obtained 21 loans totaling more than $1.7 million. Each count of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense.
Arsonist Targets Car Stores ABINGDON, Va. (AP) â€“ Virginia State Police believe an arsonist is responsible for fires that have destroyed 18 vehicles and damaged a school outbuilding in Washington County in June and July. Police say the latest fire occurred early on July 6 at a repair shop in Abingdon. Nobody has been injured in the fires, which police say have been set
between 3 a.m. and 5 a.m. In one instance, a vehicle fire spread to a brick storage shed on the grounds of an elementary school in Meadowview. Most of the fires have occurred at car repair shops and used-car dealerships. State Police 1st Sgt. G.S. Lewis says evidence suggests the fires are the work of the same person.
7/13/15 11:39 AM
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USED CAR NEWS
Longer Terms Take Work By Ted Craig
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The idea of 84-month terms is causing some anxiety through the auto finance industry. But lengthening terms always creates concerns, said Barrett Teague, B l a c k Bookâ€™s vice president of lender solutions. â€œI can remember conversations about who w o u l d want to finance a car longer than 36 months,â€? Teague said. A term of 84 months was once reserved for very expensive highline vehicles. Teague points out that most basic models today have features unavailable in highlines just 15 years ago. Some finance companies, such as Ally, are moving aggressively into longer-term financing. The length of financing terms is only one risk factor, Teague said. There is more chance of something
going wrong in that time, Teague said, but the longer terms do lower risk in one way: it lowers the monthly payment. This makes it easier for the consumer to manage during the economic ups and downs that might come during that seven-year period. Success requires knowing the value of the underlying collateral and the profile of the consumer. Those concerned about longer finance terms have an alternative â€“ leasing. This allows both shorter terms and lower monthly payments. Once leasing was only for doctors and other professionals. Then it moved down to traditional new car buyers. â€œLeasing is so much more mainstream,â€? said Scott Hall, executive vice president of operations at Swapalease.com. The next level might be subprime consumers. Hall said leasing offers many advantages for these consumers. For example, they can transfer out of the lease if their financial situation changes Subprime leasing so far is limited to just a few niche players, Hall said, but that could change. It might also lead to an increase in used-car leasing, he said.
7/13/15 12:37 PM
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USED CAR NEWS
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Salesman Pockets Payments A New York used car salesman has been charged with stealing almost $400,000 from numerous customers and three Long Island auto dealerships where he worked. Michael McGriff, 41, of Freeport, was arraigned on the following grand jury indictment charges: â€˘ Grand Larceny in the 2nd Degree (a C felony) â€˘ Seven counts of Grand Larceny in the 3rd Degree (a D felony) â€˘ Identity Theft in the 1st Degree (a D felony) â€˘ Four counts of Criminal Possession of a Forged Instrument in the 2nd Degree (a D felony) â€˘ Three counts of Scheme to Defraud in the 1st Degree (an E felony) â€˘ 12 counts of Falsifying Business Records in the 1st Degree (an E felony) â€˘ Three counts of Making a False Statement of Credit Terms (an A misdemeanor) McGriff is being held without bail and was to appear in court July 15. If convicted of the top charge, McGriff faces a maximum of five to 15 years in prison. The Nassau County District Attorney said that McGriff defrauded at least 17 customers as well as three auto dealerships where he worked between 2009 and 2013, out of approximately $381,846 through various schemes.
McGriff is accused of collecting down payments for used cars from customers and pocketing the cash instead of remitting the payments to the dealership, and having the unsuspecting customers make up for the loss by signing finance contracts that did not reflect the down payments. Customers were left having to pay higher than expected monthly payments. Between April 2012 and April 2013, McGriff collected cash payment in full for used cars from customers of Port Motors Lincoln Mercury. McGriff forged finance contracts and filed them with multiple banks for auto loans that the customers never authorized. Some customers had their vehicles repossessed when they refused to pay for the fraudulent loans. McGriff is also charged with using the alias Michael Glenn in August 2014 and representing that he was affiliated with Titanium Auto Group in Uniondale. He kept $12,900 in cash he received from a Valley Stream resident for the purpose of purchasing a car at auction. McGriff has been the subject of investigations, both separately and jointly, by the Nassau County District Attorneyâ€™s Office and the Nassau County Police Department.
7/13/15 1:55 PM
7/9/15 3:41 PM
USED CAR NEWS
RETAIL MARKETS COLORADO
Stan Martin, manager/ LLC., Stanâ€™s Auto Sales, Westminster, Colo.: â€œI have one location. Usually, I keep about 120 cars on my lot. Thatâ€™s about all my lot will hold. â€œIt seems like the first six months of the year are usually slow and then in June it picks up for the rest of the year. We usually sell between 80 and 100 a month. â€œI think in the last eight days we sold 38 cars. â€œI buy my cars from the local auctions. â€œWe finance through local credit unions, mostly, and a small percentage of subprime. â€œFor average retail price, I try to stay at $12,000 and under, pretty much. I have a mix of domestics and imports. â€œItâ€™s probably 50-50. â€œIâ€™ll buy a lot of older nice cars. Then Iâ€™ll buy them as new as I can get them in my price range. So itâ€™s a wide range. â€œThe average mileage
depends on the make and model. Iâ€™d like to stay, at least, under 150,000. Cars seem to go farther than they used to. â€œIâ€™ll carry about 95 percent cars. â€œMy facility wasnâ€™t originally a car lot, I sort of made it into one. So the full-size trucks donâ€™t get (fit in) very well. Iâ€™ll carry more import trucks. â€œI have a mechanic who looks at the cars we get, then weâ€™ll farm out (the recon work) to different shops. â€œThe average reconditioning cost is pretty high. Itâ€™s probably $700 to $1,000. I try to buy the cars that I can fix more cheaply. â€œIn Colorado, Craigslist works for advertising. I do some TV advertising. Iâ€™ve also got a good website from AST. â€œBut weâ€™re lucky. About 70 percent of my business is repeat/referral, so that helps a lot. â€œWe sold a 2002 Toyota Tundra for $8,300. It had 167,000 miles.â€?
Rick Chignoli, co-owner, Chignoli Auto Sales, Joliet, Ill.: â€œThere are five of us who own the place, all family. Weâ€™ve been in business since 1974. â€œWeâ€™re on the second generation. We have some of the third generation working here. â€œOur business is fine. Itâ€™s not like it was during the good years in â€™05-2010. Our retail isnâ€™t quit as high. â€œJoliet has recovered, but we deal in a lot of latemodel used cars. We donâ€™t do a lot of subprime business and there is more subprime business in our area than there used to be. â€œWe do a lot of wholesale. We sell all our older cars at the auctions. The cars in the $10,000 or less range are in demand. I can get a lot for them at auction. â€œIn the old days, we used to wholesale about 2,000 cars a year. Now itâ€™s closer to 1,200, just because we donâ€™t work as much.
$!$ " â€œWe keep cars still under factory warranty for retail. The bulk of our cars are 2011 and up. â€œWe keep a lot of used BMWs. We buy an awful lot of Buicks and Fords. We handle a lot of higher-end imports. â€œWe have a lot of repeat business. We take care of our customers. If you look at our reviews on Dealer Rater, they are very good. â€œThereâ€™s so much Internet business today, that helps us a lot. â€œWe actually won the award from DealerRater last year for Illinois. Over the years, weâ€™ve won a lot of awards. â€œWe were the Illinois Quality Dealer of the Year and we were the Joliet Retailer of the Year. â€œThe Internet has really changed this business. Weâ€™ve adapted, but Iâ€™m from the old school. â€œWe all grew up in the car business and I like to go outside and look at a car. Today, people in the business use
their phones and decide if itâ€™s a good car or determine the value. They donâ€™t take the options into account, they donâ€™t take the color into account. â€œThe walk-in traffic is nothing like it used to be. On a Saturday, you used to have five or six people walk in. â€œWe have a huge lot and a reconditioning center and a service center. Weâ€™re in competition with people who open up in a garage and post everything online. â€œWe recently sold a 2013 Lexus ES 330 with more than 20,000 miles. The window sticker had the MSRP at $41,000. We sold it for $29,900. It was a black car with everything on it. We also sold a 2011 Cadillac CTS AWD with 38,000 miles for $21,900. Both cars were from a new-car sale. â€œI still bid on cars from a couple of dealer groups. We do a lot of online purchasing from Ford and Smart Auction. â€œWe also attend two auctions a week.â€?
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7/9/15 4:23 PM
WHOLESALE MARKETS ALABAMA
David Andrews, owner, Dealer’s Auto AuctionHuntsville, Huntsville, Ala.: “The auction’s been open since 1995. We bought it in 2004. I own the Dealer’s Auto Auction Group, which has five locations in the United States. “We have four lanes at our Huntsville location. “Volumes have been really good. We’ve been in the 500-car-a-week range. But during our recent anniversary sale, we ran 850 cars. “Our average volume is up over this time last year. “(The reason for the increase) is that we have a great staff there that has an excellent relationship (with our customers). We’re in the service business. That’s who we are. “Our sales percentages are in the mid-60s range. That’s about the same as this time last year. “We run dealer trades and fleet-lease. It’s about 70 percent dealer trades and 30 percent fleet-lease. That’s
about the same (ratio) as last year. “We have several big fleet companies. GE Capital is one of them. LeasePlan is another. We have ARI and Element Fleet Management. Those volumes are growing. “We also sold about 20 motorcycles at a recent sale. “We also have in-op sales. “The average price coming across the block is about $6,000. It’s a little bit up from last year. Cars are getting more expensive every year. “We also track the number of cars we sell over $10,000, over $20,000 and over $30,000. That number is steadily going up. “During our anniversary sale, we had over 500 dealers. They are coming from all over. Generally, most of them come from within 500 miles, but we’re getting a lot of dealers coming out of Florida to our sale. “Also, every car that we run through the lanes is online and available to sell. “Business is good. It’s
a good time to be a usedcar dealer. “We are a full-service auction and (offer reconditioning services). When you spend money on a car, you want to get back two dollars for every dollar you spend. So you have to look at every individual car to see what it needs. You also have to have a great relationship with the reps of that company, so you can decide what to do to those cars to help remarket them. That’s our job. “We are seeing more people (doing reconditioning). “You know, trucks are hot right now – trucks and SUVs. On our trucks, twowheel drive probably sells better (at Huntsville). “As the price of gasoline goes down, the smaller cars don‘t sell as well. “This year, the market is strong. I feel good about it. If you can’t make a living when the price of gasoline is $2.50 a gallon and the prime rate is 3.25, then you need to get in another line of business.”
Julie A. Quinn, general manager, Rochester’s Central Auto Auction, Rochester, N.Y.: “Sales are going very well. “The beginning of July, with the holiday, was a little slow, but we always have more than 400 cars and we sell half of them. “We have the ability to run six lanes, but we run five. “We have a pretty good relationship with our dealers. They are telling us they are selling a lot of cars. “The economy in the Rochester area is pretty steady. We just had a CarMax open here. “We keep seeing dealers expanding, so business must be pretty good. Vision (a large local group) has put in a couple of new franchises. Seeing the market grow is always a good thing for us. “A majority of our units are dealer trades. We have a couple of dealers who come in and out. They might try running their
USED CAR NEWS
Compiled by Jeffrey Bellant own sales. But they always come back. “There is fluctuation. Some dealers come every week with 100 cars and others come and go. “Repos have been a little slower. “We get dealers from Buffalo to Syracuse to Pennsylvania. We even have a couple of bidders who come from Texas. They have been coming for 15 years. “We have seen an increase in dealers from the Syracuse area. “There is a lot of demand for Toyotas and Hondas. “It’s hard to say how the rest of the summer will go. There are so many factors. “Our customers are very loyal. There’s always a core group that comes. “Even if attendance drops, the sales don’t. The ones who come are the ones who buy. “We’re very small and customer friendly. We offer competitive fees. That’s an advantage of being small.”
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7/13/15 11:30 AM
Your source for quality, value, selection: Chase. A broad selection of pre-owned vehicles from an industry leader. August 2015 Chase High Lines, featuring Jaguar Land Rover Financial Group
Chase ADESA Boston August 7, 14, 28 508-626-7000
Manheim Atlanta August 6, 19, 20 404-762-9211
Manheim Pennsylvania August 6, 7, 20, 21 800-777-2053
ADESA Charlotte August 6, 20 704-587-7653
Manheim Dallas August 12, 26 877-860-1651
Manheim Phoenix August 6, 13, 20, 27 623-907-7000
ADESA Cincinnati/Dayton August 4 937-746-4000
Manheim Denver August 26 800-822-1177
Manheim Pittsburgh August 26 724-452-5555
ADESA Golden Gate August 4, 18 209-839-8000
Manheim Detroit August 6, 20 734-654-7100
Manheim Riverside August 25, 27 909-689-6000
ADESA Houston August 5, 19 281-580-1800
Manheim Fredericksburg August 13, 27 540-368-3400
Manheim Seattle August 19 206-762-1600
ADESA Indianapolis August 4, 18 800-925-1210
Manheim Milwaukee August 12, 26 262-835-4436
Manheim Southern California August 6, 20 909-822-2261
ADESA Kansas City August 4, 18 816-525-1100
Manheim Minneapolis August 19 763-425-7653
ADESA Lexington August 20 859-263-5163
Manheim Nashville August 5, 11, 12 877-386-5004
ADESA Tulsa August 14 918-437-9044
Manheim Nevada August 7 702-361-1000
ADESA Washington DC August 26 703-996-1100
Manheim New Jersey August 12, 19, 26 609-298-3400
America’s AA-Chicago August 5 708-389-4488
Manheim New Orleans August 12 985-643-2061
Brasher’s Salt Lake AA August 11 801-322-1234
Manheim Ohio August 11 800-477-6446
Columbus Fair AA August 5, 12 614-497-2000
Manheim Orlando August 4, 11, 18, 25 800-337-8491
Southern AA August 26 860-292-7500
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ADESA Boston August 7 508-626-7000
Manheim Milwaukee August 26 262-835-4436
Manheim Pennsylvania *August 6, 20 800-777-2053
ADESA Golden Gate August 18 209-839-8000
Manheim Nashville August 5 877-386-5004
Manheim Riverside August 27 909-689-6000
Manheim Atlanta August 19 404-762-9211
Manheim Ohio August 11 800-477-6446
Manheim Dallas August 12 877-860-1651
Manheim Orlando August 25 800-337-8491
*Only Jaguar and Land Rover vehicles will be sold on August 6. All other high lines, excluding Jaguar Land Rover, will be offered on August 20.
Mazda Capital Services ADESA Boston August 14, 28 508-626-7000
Manheim Detroit August 6, 20 734-654-7100
ADESA Golden Gate August 4 209-839-8000
Manheim Fredericksburg Manheim Pennsylvania August 13 August 7, 21 540-368-3400 800-777-2053
ADESA Kansas City August 18 816-525-1100
Manheim Milwaukee August 12 262-835-4436
Manheim Pittsburgh August 26 724-452-5555
Columbus Fair AA August 12 614-497-2000
Manheim Nashville August 12 877-386-5004
Manheim Riverside August 25 909-689-6000
Manheim Atlanta August 20 404-762-9211
Manheim New Jersey August 12, 26 609-298-3400
Manheim Seattle August 19 206-762-1600
Manheim Orlando August 4 800-337-8491
Subaru Motors Finance ADESA Boston August 14 508-626-7000
Manheim Detroit August 6, 20 734-654-7100
Brasher’s Salt Lake August 11 801-322-1234
Manheim Fredericksburg Manheim Pittsburgh August 27 August 26 540-368-3400 724-452-5555
Columbus Fair AA August 5 614-497-2000
Manheim Milwaukee August 26 262-835-4436
Manheim Seattle August 19 206-762-1600
Manheim Dallas August 12 877-860-1651
Manheim New Jersey August 12 609-298-3400
Manheim Southern CA August 6 909-822-2261
Manheim Denver August 26 800-822-1177
Manheim Orlando August 25 800-337-8491
Southern AA August 26 860-292-7500
Manheim Pennsylvania August 7 800-777-2053
*The tradename “Subaru Motors Finance” and the Subaru logo are owned / licensed by Subaru of America, Inc. and are licensed to JPMorgan Chase Chase Bank, N.A. (“Chase”). Retail / Loan and lease accounts are owned by Chase. *The Jaguar word mark, the Jaguar logo, and Jaguar Financial Group are trademarks of Jaguar Land Rover Limited and any use by Chase is under license. The Land Rover word mark, the Land Rover and Oval logo, and Land Rover Financial Group are trademarks of Jaguar Land Rover Limited and any use by Chase is under license. Retail / Loan and lease accounts are owned by Chase. *The tradename "Mazda Capital Services" as well as the Mazda and Mazda Capital Services logos are owned by Mazda Motor Corporation or its affiliates and are licensed to Chase. Retail / Loan and lease accounts are owned by Chase. JPMorgan Chase Bank, N.A. Member FDIC ©2015 JPMorgan Chase & Co. (14-723) 10/14
7/10/15 1:47 PM
DISCONNECTED JOTTINGS FROM I recently visited an old friend in Baltimore. He’s recuperating from some fairly heavyweight back surgery but, at last, is showing
accepting of new technology in cars than I am. He picked me up from the airport in a brand new Chevy Corvette and al-
• 40-year veteran of the industry • President from 1997–2000 of ADT Automotive • Served as ADESA’s executive vice president of sales and marketing • Moorby & Associates 2006–present • Awarded the Ring of Honor by NIADA • NAAA Hall of Famer
signs of improvement sufficient to allow him to get out and about. Stuart, like me, has been in the car business all his life and although he’s slightly older than me, he still has a feverish passion for cars, the people that build them, sell them and buy them. His mind never stops working or questioning what makes things or people tick. He’s as fascinated today as he was years ago, with new products and is more
though we both needed shoehorns to get in and out, once ensconced inside, he toyed interminably with all the gadgetry, showing off his acquaintanceship with its features and statistics but was still most excited by the guttural growl of the exhaust system (which could be tuned with the required performance) and stayed in ‘sport mode’ all the while we were cavorting around the city like teenagers with a new license. Neighboring
C R O S S WO R D
vehicles only got to see the rear end! Rather than aggravate his back further and in deference to his physiotherapist’s advice, we went to the dealership to change horses to a saloon car for the duration of the visit. As we were going to be exploring the culinary corners of the ‘Charm City’ we decided a four-door carriage was more in keeping with our lack of corporeal dexterity. Enter the latest Chevy SS – to all intents and purposes, a Corvette with a capacious cabin – a saloon on steroids. There it stood, grumbling and rumbling waiting to see how fast it could make the exit from hell! This is not an Impala SS. The only badging says ‘SS’ and if you don’t know what you’re looking at, it’s the ultimate wolf in sheep’s clothing. It’s made in Australia, like the Holden range of GM vehicles. I guess its closest
1. “Supersized” mini 5. Alfa Romeo ___ Duetto Spider 9. Ideology 10. ___ and hers 12. Tires 14. FJ or PT 15. Saturn model 16. Make a mistake 17. Toyota sedan 19. Former Dodge compact 20. Marble 22. Newport locale, abbr. 24. Old Olds 26. Follower: Suffix 29. Great Salt Lake’s state 30. Made less tight
34. French for summer 36. Either, ___ 38. Black Sea nation: Abbr. 39. Gear____ 40. Old Dodge sedan 43. Not many 44. The original “pony car,” a true American classic 47. Matthew McConaughey’s favorite car 49. Excessively 51. College internet address ending 52. Rearrange tires 53. ___-seater 54. Red light
Down 1. ____ Stingray convertible 2. One who approves insurance 3. Mazda convertible 4. ____ Altima
cousin would be the Pontiac G8 with the LS engine, a stable of about 460 galloping gee gees waiting to be let loose. And whilst it can emulate the four horses of the apocalypse, it can be tame enough to take Auntie Ethel to church without spilling the pecan pie. Stuart is an inveterate ‘faffer’ – he loves fooling with things that have switches, dials, readouts, displays and so on and when he found out that the car had self-parking technology, he was like a dog with two pee pees parking the thing at a downtown deli or in the Giants grocery store parking lot. The radio (that’s not what we should call it anymore) is akin to NASA mission control and probably houses more technology than Apollo 11.
To be honest, I find it more than a little distracting to switch from navigation to entertainment to climate etc., while driving and prefer my Jaguar’s simplicity and old-fashioned fascia set in wood veneer in the shape of a Spitfire’s wings. But that’s me and Stuart was equally at home with the new instrumentation, playing it like a Stradivarius. The voice command system had an accent similar to mine but with a lascivious, lusty lilt. It sounded like she was getting undressed while telling you how to come home! We had a great weekend, cruising around in style, convinced that horsepower can still stir the blood of a couple of old geezers not too far from this side of senility.
To see past columns from Tony Moorby, visit www.usedcarnews.com/columnists/tony-moorby
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By Miles Mellor
USED CAR NEWS
5. Safari or Sierra 6. “Nope” 7. Roman number 52 8. Problem 11. Pontiac model 13. Mid-size Saturn 18. ATV’s destination 21. With no charge 23. “Life __ Highway”: 1992 Tom Cochrane hit 25. Vane direction 27. Nickname for the President’s Cadillac Limo, 2 words 28. Ford SUV 31. Basketball association for short 32. It oversees transportation, abbr. 33. Jeep alternative 35. Lincoln ___ car 37. Tom Clancy hero 41. Almost perfect rating 42. Adventurous SUV built by a farm machinery company, International ____
Answers to the 7/6/15 puzzle
43. Distance measurement, abbr. 45. Determined 46. Ford model 47. ____ mileage, a plus for a used car 48. Musical purchases 50. Over 8 hours work in a day, abbr.
M G J
E G R
L V F
L E A
Answers to this puzzle in the 8/3/15 issue. Call 1.800.794.0760 for a FREE subscription.
7/10/15 3:05 PM
7/10/15 9:42 AM
USED CAR NEWS Advertisers are solely responsible for content of classified advertisements. To place an ad, or for more information, call the Classified Department: 800-794-0760 ext.107
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August 17 - Auction Technology Focus Deadline Thursday, August 6
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FACILITIES FOR SALE/LEASE LOOKING FOR INVESTOR in used car lot in Iowa. Looking for investor/partner for used car lot in Iowa that specializes in Sub Prime Auto Financing. Now looking to open my own lot. I have expertise in all facets of selling pre-owned cars. Huge untapped market, huge return on investment. Call 319-651-6004
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ONLINE AT CLASSIFIEDS 22_UCN.indd 1
Deadline Thursday, September 10
Dealers Guide to Top Auctions [Inserted in Sep 21 issue] Deadline Thursday, September 3
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November 2 - Dealer Life [BHPH Spotlight Advertorial] Deadline Thursday, October 22
TO ADVERTISE IN USED CAR NEWS CALL 800.794.0760 EXT. 107
CLASSIFIEDS 7/13/15 10:38 AM
Cass Burch – Dealer/President, Cass Burch Automotive Group David Kelleher – President, David Dodge Chrysler Jeep Ram
When customers sell you to other customers, you’re doing something right. Sharing a passion for this business is what we’re all about. So we couldn’t have been more thrilled when we heard what David Kelleher did to help his friend Cass Burch reach his fullest potential: he flew to Cass’ store to sell him on the benefits of Ally SmartAuction®. Further proof that when you love what you do, it’s nothing short of contagious.
ally.com/driven/strongbonds ©2015 Ally Financial. All rights reserved. Driven by what we love is a service mark of Ally Financial. SmartAuction is a registered service mark of Ally Financial.
7/9/15 3:39 PM
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