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1-800-554-1026 August 3, 2015

ON THE WEB: Orange Is the New Black for Cars

Men’s interest in orange and other nontraditional car colors has increased significantly, while women continue to prefer more mainstream, neutral car colors, according to the second annual Gender and Car Color Preferences Study by

NextGear Capital Eyes National Expansion

NextGear Capital recently announced plans to expand into 30 additional markets across the U.S. by the end of the third quarter.

Shoppers Stay Loyal

Used-car shoppers are brand loyal once they have submitted a lead when online shopping, according to a study by CarStory.

Copart Announces Second Contest

Copart Inc. announced the launch of its second annual Copart Rebuild Challenge, a contest designed for car enthusiasts and auto rebuilders.

Rush - Dated Material

Recalls Create Regulatory Hassles Recalls are raising concerns about auto sales from politicians and regulators. The National Independent Automobile Dealers Association, National Automobile Dealers Association, National Association of Minority Automobile Dealers and the American International Automobile Dealers Association were all scrambling to have their members contact federal legislators to prevent an amendment to the pending highway bill. The amendment, proposed by Connecticut Senator Richard Blumenthal, would prohibit the sale or lease of a used motor vehicle that is subject to an open recall until the defect or noncompliance has been remedied. “NIADA is concerned about vehicle safety and wants to see a process that encourages that recalls get fixed,” said Steve Jordan, the NIADA’s executive vice president. “Unfortunately, this amendment does not accomplish that goal.” Meanwhile, General Motors Co. recently disclosed that the Federal Trade Commission is in-

POLITICAL ACTION: Sen. Richard Blumenthal speaks on an issue in Washington. The Connecticut Democrat’s latest target is unfixed recalls.

vestigating’s advertising methods for its certified pre-owned program. The company received notice of an investigation by the FTC on June 3. The investigation concerns certified pre-owned vehicle advertising where

dealers had certified vehicles allegedly needing recall repairs. GM officials said they were cooperating fully with all requests for information in ongoing investigations. They said such investigations could in the future

result in the imposition of material damages, fines, civil consent orders, civil and criminal penalties or other remedies. For more on recalls, turn to page 10. For more on federal regulation, turn to page 12.

Public Dealership Groups Report Higher Used Vehicle Sales Dealer groups reported strong used-car sales in the second quarter. Sonic Automotive Inc. reported record pre-owned sales in the second quarter as the chain ramped up its used-car superstores. Sonic reports quarterly pre-owned retail sales of 30,301 units, up 6.3 percent over the prior year quarter. Sonic retailed 100 pre-owned units per store per month for the quarter on a same store basis. The chain’s Echo Park used-car stores retailed 881 units in the quarter, up 221 units from the prior quarter. Echo Park launched at the end of 2014.

Lithia Motors Inc. reported that used vehicle retail same-store sales increased 16 percent in the second quarter. AutoNation Inc. saw retail used vehicle unit sales increase 9 percent overall and 7 percent on a same-store basis. Asbury Automotive Group, Inc. reported that used vehicle retail revenues were up 15 percent at its stores. Group 1 Automotive Inc. reported that used vehicle retail revenue increased 18.2 percent, primarily reflecting 17.7 percent higher used retail unit sales. U.S. same-store used vehicle revenue increased 16.1 percent, reflecting 14.2 percent growth in unit sales.


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Consumers Give High Marks to Safety Technology The s a f e t y- r e l a t e d technologies that manufacturers are increasingly installing in their new vehicles are making those vehicles more appealing to their owners, according to the J.D. Power 2015 U.S. Automotive Performance, Execution and Layout (APEAL) Study. The APEAL Study, now in its 20th year, examines how gratifying a new vehicle is to own and drive. Owners evaluate their vehicle across 77 attributes, which combine into an overall APEAL Index score that is measured on a 1,000-point scale. The overall APEAL score has increased by 4 points year over year to 798 in 2015. The study finds that some safety features can contribute to a significant boost in APEAL scores. For example, the overall score among owners of vehicles with blindspot monitoring and warning systems is 38 points higher than among those without them. “Unlike other technologies, such as voice recognition, that can be challenging to operate, most safety features provide

information in a more intuitive way, giving owners a greater sense of security,� said Renee Stephens, vice president of U.S. automotive quality at J.D. Power. “Not only are models increasingly offering systems that improve safety and visibility, but owners are also using them on a regular basis. This can go a long way toward generating positive feelings about their vehicle overall.� The study finds that 36 percent of owners have blind-spot monitoring and warning systems in their vehicle (up 7 percentage points from 2014); 21 percent have lane-departure warning systems (up 5 percentage points); 46 percent have park assist/backup warning (up 4 percentage points); and 25 percent have collision avoidance/alert systems (up 4 percentage points). Furthermore, 69 percent of owners who have blindspot warning systems and 62 percent with park assist systems indicate they use them every time they drive. Only 15 percent of owners say they have had previous

experience with blind-spot warning systems, and only 39 percent say their dealer explained the feature to them upon vehicle delivery. While premium brands historically perform significantly higher than non-premium brands in the APEAL Index, study findings show that the gap between the two in 2015 is the smallest it’s been in the past 10 years, narrowing by 16 percent since 2006. The

average APEAL Index score in the non-premium segment (790) has improved by 5 points from 2014, while the average score in the premium segment (841) has improved by only 1 point. “Over the past several years, we have seen non-premium brands increasingly offer the types of in-vehicle technologies that used to be available only to premium buyers,� Stephens said. “The positive impact these

technologies have on owners is more pronounced among non-premium owners. In fact, owners of non-premium vehicles that include the latest technology register higher APEAL scores by 50 points, compared with just a 29-point increase among owners of premium vehicles with the same technologies.� Porsche ranks highest in APEAL for an 11th consecutive year, with a score of 874.






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4 .".,- 


NEWS BRIEFS Auction Adds Ally

Music City Auto Auction of Nashville, a subsidiary of Auto Auction Holdings LLC, announced the addition of Ally Financial to its lineup at its Spring Hill, Tenn. location. Opened in February, Music City AA operates a six-lane wholesale auto auction serving Tennessee and surrounding states.

NIADA Teams with Title Firm

The National Independent Automobile Dealers Association recently announced a new partnership and updates to its website. TitleTec, a Solera company and provider of title and registration software for automotive dealers, has joined with the NIADA as a National Member Benefit partner. TitleTec Nationwide is a webbased solution that generates the fees, taxes and state forms for all 50 states, providing a streamlined workflow for dealership titling departments. The NIADA.TV Network introduced a newly re-tooled and rebranded web platform for its educational auto industry programming. Among the new features is the ability for users to rate the videos they watch and share them with

their colleagues and friends through lion as of March 31 and $1.374 billion all of their social media outlets. as of June 30, 2014. Annualized net charge-offs for the second quarter were 6.59 percent of CarMax Moves into New Market the average owned portfolio as comCarMax Inc. officially opened its pared to 4.98 percent for the second quarter of 2014. first store in Tallahassee, Fla. Delinquencies greater than 30 The store is more than 8,000 square feet, occupies more than four days (including repossession invenacres and stocks more than 130 used tory) were 7.49 percent of the total owned portfolio as of June 30, as vehicles. compared to 6.21 percent as of June 30, 2014.

CPS Sees Higher Charge-offs

Consumer Portfolio Services Inc. announced earnings of $8.5 million for the second quarter, up from $7 million in the same period a year ago. Revenues for the second quarter were $88.4 million, compared to $71.6 million for the second quarter of 2014. Total operating expenses for the second quarter were $73.2 million, compared to $59.3 million for the 2014 period. During the second quarter of 2015, CPS purchased $270 million of new contracts, compared to $211.4 million during the second quarter of 2014. The company’s managed receivables totaled $1.82 billion as of June 30, 2015, an increase from $1.73 bil-

GM Financial Reports More Profits

General Motors Financial Company Inc. announced net income of $186 million for the quarter ended June 30, compared to $175 million for the quarter ended June 30, 2014. Consumer loan originations were $4.3 billion for the quarter ended June 30, compared to $4.1 billion for the quarter ended March 31 and $3.6 billion for the quarter ended June 30, 2014. Operating lease originations of General Motors Co. vehicles were $5.6 billion for the quarter, compared to $3 billion for the quarter ended March 31 and $1.5 billion for the quarter ended June 30, 2014. The outstanding balance of commercial finance receivables was $7.8

billion, compared to $7.6 billion at March 31 and $7.1 billion at June 30, 2014. Consumer finance receivables 31-to-60 days delinquent were 3.6 percent of the portfolio at June 30, compared to 3.5 percent at June 30, 2014. Accounts more than 60 days delinquent were 1.6 percent of the portfolio, the same as June 30, 2014. Annualized net credit losses were 1.6 percent of average consumer finance receivables for the quarter ended June 30 and 1.4 percent for the quarter ended June 30, 2014. GM Financial had total available liquidity of $12.9 billion at June 30, consisting of $2.1 billion of unrestricted cash, $9.2 billion of borrowing capacity on unpledged eligible assets, $0.6 billion of borrowing capacity on unsecured lines of credit and $1 billion of borrowing capacity on a Junior Subordinated Revolving Credit Facility from GM. C R O S S WO R D by Myles Mellor


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7/27/15 3:56 PM


New Law Leaves Many Wholesalers in Limbo

By Sheila McGrath

A state law that took effect July 1 has phased out Indiana’s automobile wholesale license, putting a stop to a situation that even some wholesalers agree had gotten out of hand. But it also turned out the lights on many legitimate businesses, leaving the license-holders in the state to either transition into retail sales or find another line of work. Valerie Kroeger, communications director for the Indiana Secretary of State’s office, said the state’s General Assembly discontinued the wholesale dealer license due to a variety of complaints. “It started because we had several out-of-state dealers who would get an Indiana wholesale dealer license and then set up a sham office here,” Kroeger said. “We received complaints from local government about the condition of these buildings and that they were not being maintained.” They also received out-ofstate complaints about wholesale dealers selling vehicles directly to consumers and fraudulently using dealer plates. It was hard to regulate them because many were out of state and kept their records in their home

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state, Kroeger said. But Bill Loy, a licensed auto auctioneer for 36 years and president of the Indiana Automobile Wholesalers Association, is frustrated that the state discontinued the license rather than taking steps to rein in those dealers. He said the problems could have been alleviated through legislation and increased regulation. It wasn’t difficult to get a wholesale dealer’s license in Indiana. Residents of any state could obtain

“We were trying to work hard with our dealers to keep them within the lines,” Loy said. “But we saw competitors – other landlords – who were actually looking for loopholes. We felt there needed to be additional regulation of the property owners as well as some additional regulations for the dealers in order to make it an honest business. “There were two sides to this – the side trying to work with the state to develop controls, and the side that

education program for wholesalers, Loy said. The association also advocated for stronger penalties against wholesalers caught curbstoning. One of the biggest problems in Indiana was that wholesalers were using their license to buy cars at auctions, then transporting them across the state lines using their dealer plates and selling them directly to the public in other states. In the last proposed bill offered up by the wholesalers association

“There were two sides to this – the side trying to work with the state to develop controls, and the side that was trying to operate like the Wild West, with no controls.” Bill Loy one as long as they listed an Indiana address and sold at least 120 cars a year. In 2012, there were more than 2,000 licensed wholesale dealers in Indiana. Many of them rented office space in northwest Indiana because of its proximity to the Chicago market. Loy was one of several landlords offering office rental and licensing assistance to wholesale dealers.

was trying to operate like the Wild West, with no controls.” He said the Indiana Automobile Wholesalers Association has been lobbying the state for three years with a number of suggested regulations that might have helped. For one thing, the Indiana dealer code didn’t require pre-licensing or continuing education. There should have been a required

before the new law took effect, Loy said they had addressed every issue the Secretary of State had with wholesalers. But they couldn’t get the bill introduced. “There was so much resistance to the wholesalers because of these other landlords that were leading dealers down the wrong path that we couldn’t get an honest voice heard,” he said.

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Strategic Vision released the results of its 20th annual Total Quality Index study that includes over 155 specific aspects of the customer’s experience. Fiat Chrysler Automobiles had the industry’s highest score. Because Strategic Vision looks at more than problems, this is the opposite of the results for other studies, such as J.D. Power’s recent Initial Quality Study. “In 1997, only 15 percent of all car brands had less than a half-a-problem per vehicle, with a few ‘delinquent’ brands having more than two problems per vehicle,� said Alexander Edwards, president of Strategic Vision. “In 2015, 100 percent of all brands had less than half-aproblem on average per vehicle. This means that simply counting problems once had a place in history, but today, knowing what creates love and that which enhances the customer’s perception of quality are key to determining what is best.� FCA achieved the highest corporate Total Quality score

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(859) for the first time since the study began in 1995. This study of over 46,000 customer responses also ranked Volkswagen Group of America and General Motors as tied at 858. At the model level, the highest 2015 Total Quality model score went to the Mini Cooper Roadster, with another significant winner being the Chevrolet Colorado leading the Standard Pickup segment as the first domestic leader in over a decade. The Mazda3 Sedan was the popular Small Car Segment leader. BMW/Mini had six Total Quality winners in i3, 3-Series Wagon, X4, X5, Mini Cooper Countryman and Roadster. In looking at individual brands being the winner in Total Quality, Land Rover is the Best Luxury Brand and Ram is the Best Brand (Non-Luxury). Subaru WRX and Kia Optima co-lead the still popular Mid-Size Car Segment, with others like Buick Encore and Volkswagen Tiguan leading the rapidly growing Entry CUV Segment.

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8 • August 3, 2015



In December of 2014, Joseph Mok held a meeting with staff at Gmotorcars in Arlington Heights, Ill. The year had not gone well. “Here’s what happened,” he said. “In December, we hit rock bottom, like an alcoholic. Business was horrible. Our phones weren’t ringing the cars we had were stale.” Other dealers might write it up to bad luck and not make any drastic changes. Mok, the store’s co-owner and general manager, took a different route. “I brought everybody in the office and said, ‘We’re going to change everything we do here,’” he said. Other dealers flinch at the idea of bailing out of a car they have a lot of money in, but Mok said he told his staff to move stale inventory fast. “‘Every single car that we have aged over 60 days, send it to the auction,’” he

ing at whether they sell in his market. “My buyers now have to research the vehicles,” Mok said. “It doesn’t matter if the (value) guide says it’s a good price. They have to make sure they are selling. It’s kind of like vAuto, which we did sign up for.” Mok said he goes against the grain in a couple of areas.

Clockwise from above: Joe Mok and his father Henry look over one of the vehicles in Gmotorcars; Mok and sales manager Maggie Zich in front of the dealership: Service tech Matt Poore works on a vehicle at the store’s repair facility. said. “‘I don’t care what it brings – even if it loses money– as long as it’s close to market value.’” The result? “Since January, we are on fire,” he said. “We sold 72 cars in June. We are 110 cars ahead of last year,” he said. The dealership is stocking more than the 90 cars it used to stock. Instead of buying vehicles based simply on book price, he’s look-

“I’m taking advantage of rental cars,” he said. “I’m buying directly from Enterprise and Hertz. A lot of dealers frown upon the rental cars. But they’re great cars. You just have to price them aggressively. You can’t expect to make a ton of money on them. But you need them for bait, because I’m getting trade-ins that I never would have gotten. I’m also making money on finance and on af-

termarket (products). “If you have to sell a car at $500 over cost, just do it. You are going to get a tradein. You are going to get finance and, hopefully, you’re going to sell a warranty, etc. We had a car where we only made $300 on the front end and $2,600 on the back end.” For advertising, Gmotorcars is heavy into Craigslist and It also uses CarGurus, eBay, Facebook and Google AdWords. Mok has also found success with online offers to draw customers in. “We did an Amazon deal for brakes and details. We also did a Groupon deal for details,” Mok said. “With a regular ad, what’s the guarantee that people come to my door? Nothing. This forces them to come to my door and I’m paying for their email. We probably have 400 clients now and retain them as customers.” The average unit at Gmotorcars is a 2013 vehicle with 60,000 miles and a $15,000 retail price tag. The store carries about 75 percent imports and all the vehicles have a fixed reconditioning cost of $850. “What’s interesting is we profit more wholesaling pickup trucks and SUVs than we do retail, if that makes any sense. We sell a lot on SmartAuction,” Mok said. “We also do commercial trucks, which is big business. We use wholesale as a profit center, too. That means sometimes we’ll acquire a

car that we don’t even advertise. We just detail it and send it to the auction. If we know we can make (a certain amount of money) on it, it’s gone.” Mok’s come a long way in seven years. Eric Nelson, owner of Nelson Automotive, met him when cars were a part-time gig for Mok. “I’ve known him even before he started a dealership when he was just starting to flip cars,” said Nelson, an Illinois Quality Dealer of the Year. Owners of a shop near Nelson’s dealership introduced the pair. “He would come by to see if I wanted to buy anything,” Nelson said. Mok opened up soon after and, like Nelson, became a member of the Illinois Independent Automobile Dealers Association. Bruce Eklund, executive director of the Illinois IADA, said Mok is a good member and is even helping the association with its 2016 convention. “Joe has offered a convention center that his family owns and will save the association a considerable amount of money,” Eklund said. “This is how dealers get involved in their communities and with other dealers.” Nelson said Gmotorcars is a very “family-focused store,” with Mok’s father, brother-in-law and fatherin-law all working together. “He’s got more family than

I’d ever want working for me,” joked Nelson. The pair have crossed paths at the National Independent Automobile Dealers Convention and state events over the past couple of years. Mok and Nelson don’t have to travel far to discuss car sales since their dealerships are so close. “I’m about a mile away from him,” Nelson said. “So we’re definitely friendly competition.” He said despite the proximity of the two dealerships, the dealers aren’t worried about losing business to each other. “I think both and he and I realize there are enough customers in Chicago that – even if we were both next door to each other – we could still both be successful,” Nelson said.

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7/24/15 8:31 AM


Court Sides with Dealer

Chase is your source for quality, selection and value. When you’re searching for a wide variety of the right vehicles for your customers, look to a nationwide industry leader. Look to Chase. Chase is your source for: s A broad range of vehicle makes and models — from economy to luxury — upstream and through preferred auctions nationwide. s Convenient online and in-lane vehicle availability with on-site Chase remarketers. Put Chase to work for you. Visit and Your Source. Chase. 2




Subaru, the Subaru logo, and Subaru Motors Finance are trademarks of Subaru of America, Inc. (“Subaru�) and any use by Chase Bank USA, N.A. (“Chase USA�) and JPMorgan Chase Bank, N.A. (“Chase�) is under license. Retail / Loan accounts are owned by either Chase or Chase USA and lease accounts are owned by Chase. 2 Jaguar and Land Rover, their respective logos, and the financial group names (Jaguar Financial Group and Land Rover Financial Group) are trademarks of Jaguar and/or Land Rover and any use by Chase is under license. Retail/Loan and lease accounts are owned by Chase. 3 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. Š 2014 JPMorgan Chase Bank, N.A. Member FDIC. All rights reserved. (14-221) 06/14 1

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2:39 PM

Buy-here, pay-here dealers in Indiana have won a court victory against the state over how much they can recoup in sales tax following defaults. The Indiana Supreme Court recently declined to hear an appeal from Indiana’s Department of Revenue concerning the calculation of the allowable bad debt deduction afforded to the financing arm of a buy-here, pay-here operation. SAC Finance had already won in the state’s Tax Court. Katz, Sapper & Miller, an Indianapolis-based accounting firm with experience in dealership issues, has been following the case closely. Donna Niesen, a partner in KSM’s State and Local Tax Practice, explained the case is about timing and a tie-in to federal law when determining the allowable bad debt deduction for sale tax. A buy-here, pay-here dealer is required to pay the state the entire tax owed at the time of the sale. However, the retail installment contract recoups the tax over time from the consumer. How it does that is part of the monthly payment formulation. If the dealership also has a related finance company, it will sell the contract to the RFC at a discount.

The finance company can seek to have the uncollected sales tax returned to it if the consumer defaults on the contract. However, the state disagrees with most finance companies on how to calculate how much is returned. The state wants to calculate the bad debt deduction excluding the market discount income. SAC Finance took the Indiana Department of Revenue to court over the issue in 2011. It wasn’t until December of 2014 that the court rendered a verdict and it favored SAC Finance’s interpretation. The State took it to the Indiana Supreme Court, but was denied a review. The verdict is still out on how the Indiana Department of Revenue will apply the SAC Finance case to other similarly situated taxpayers. There are a number of Tax Court petitions from other companies that have been held pending the outcome of SAC Finance. In addition, many companies are in various stages of the administrative appeals process on this same issue. Niesen anticipates it will take several months to wade through the various protests and understand the Department’s position relative to the SAC Finance decision.

NHTSA Levies Record Penalty

6/3/14 3:44 PM

Fiat Chrysler Automobiles has acknowledged violations of the Motor Vehicle Safety Act’s requirements to repair vehicles with safety defects and will submit to rigorous federal oversight, buy back some defective vehicles from owners, and agreed to a $105 million civil penalty. This is the largest penalty ever imposed by the National Highway Traffic Safety Administration. Fiat Chrylser must pay $70 million in cash. The enforcement action comes after a July 2 public hearing at which NHTSA officials outlined problems

with Fiat Chrysler’s execution of 23 vehicle safety recalls covering more than 11 million defective vehicles. Fiat Chrysler has since admitted to violating the Safety Act in three areas: effective and timely recall remedies, notification to vehicle owners and dealers and notifications to NHTSA. In a consent order issued by NHTSA, Fiat Chrysler commits to take action to get defective vehicles off the roads or repaired. Owners of more than one and a half million vehicles will have the opportunity to sell their vehicle back.

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Honda Settles with CFPB

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American Honda Finance Corp. is limiting the finance mark-up for its dealers as part of a settlement with the Consumer Financial Protection Bureau and Department of Justice. The feds claim that Honda’s past practices resulted in thousands of African-American, Hispanic, and Asian and Pacific Islander borrowers paying higher interest rates than white borrowers, without regard to their creditworthiness. “Honda’s proactive decision to move to a new pricing and compensation system demonstrates industry leadership and represents a significant step towards protecting consumers from discrimination,� said CFPB Director Richard Cordray. As part of the enforcement order, Honda will reduce dealer discretion to mark up the interest rate to only 1.25 percent above the buy rate for auto loans with terms of 5 years or less, and 1 percent for auto loans with longer terms. “We recognize that dealerships perform a valuable service in connecting customers with lenders and that they should be fairly compensated for that service,� said the head of DOJ’s Civil Rights Division, Principal Deputy Assistant Attorney General Vanita Gupta. “We believe that Honda’s new compensation system balances fair compensation for dealers and fair lending for consumers. We hope that Honda’s leadership

will spur the rest of the industry to constrain dealer markup to address discriminatory pricing.� Honda will also pay $24 million in restitution to affected borrowers. The enforcement action is the result of a joint CFPB and DOJ investigation that began in April 2013. The agencies investigated Honda’s indirect auto lending activities’ compliance with the Equal Credit Opportunity Act, which prohibits creditors from discriminating against loan applicants in credit transactions on the basis of characteristics such as race and national origin. News of the settlement appeared on the “American Banker� website before it was officially announced, raising questions from the National Automobile Dealers Association. The article cites a memo from CFPB officials that the National Automobile Dealers Association claims “to plainly undermine the Bureau’s longstanding claims that it is not targeting auto dealers through enforcement actions.� NADA wanted the CFPB to make the memo public and entered a formal request under the Freedom of Information Act. The CFPB rejected that request. The Wall Street Reform and Consumer Protection Act – better known as Dodd-Frank – specifically prohibits the CFPB from regulating auto dealers.

Manager Sent to Jail for Fraud The manager of a Spokane, Wash., used-car dealership must serve a year in jail for stealing more than $76,000 in disability benefits from the state. Gary Bruce Farnworth II was caught running the dealership while telling the Department of Labor & Industries (L&I) he couldn’t work because of an on-thejob injury. A jury convicted Farnworth of two felony counts of first-degree theft after an eight-day trial last month. The jury also found the crimes were a “major economic offense.� That finding allowed Spokane County Superior Court Judge Annette Plese to order a sentence beyond the standard two to six months. Judge Plese also ordered Farnworth to pay back the $76,092 in workers’ compensation benefits to L&I, plus $800 in court fees. The Washington Attorney General’s office prosecuted the case based on an L&I undercover investigation. L&I launched the investigation based on an anonymous tip. The L&I investigation deter-

12_UCN.indd 1

mined that Farnworth was working at a used-car dealership in Spokane from 2010 through 2012 – all while signing official L&I documents certifying he was not working due to a workplace injury. Investigators photographed and shot video of Farnworth helping customers, opening heavy security gates, replacing a car battery and doing other work in 2012. He was even filmed showing cars to an undercover investigator and answering questions about their price and condition. Investigators found dozens of Department of Licensing vehicle sales records with Farnworth’s signature and notations listing him as general manager, manager or clerk. After the investigator identified himself to the business owner, Farnworth said he was just helping out at his friend’s business. Farnworth began receiving L&I benefits when he injured his lower back in September 2007 while working at a steel company. Based on the severity of the injury, doctors treating Farnworth certified him to receive wage-replacement checks.

7/27/15 4:50 PM

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Jim Long, president, Long’s Auto Place, St. Paul, Minn.: “We’ve been in business since 1981. “We have one location and we keep 55 to 60 vehicles on the lot. “We sell about 35 a month, (which is similar) to last year. “(To acquire vehicles) we have a buyer out on the road about six days a week. Then we have a lot of dealers that sell us cars. About 3 percent to 5 percent are just people popping in to sell us their cars. “Average retail price is $12,873. “We do about 70 percent subprime, which I consider as anything that has an acquisition fee. I’ve brought someone on board who specializes in special finance. “Historically, we probably carry 40 percent cars, 40 percent SUVs and 20 percent trucks. During the last 30 days, we’re probably 60 percent cars, 30 percent

SUVs and 10 percent trucks. “Domestic is probably 80 percent of my inventory. That hasn’t changed much. “Average mileage is 70,000. The average model year is 2008. “We have a mechanical department and service shop. We have four bays. One is for storage of parts. Two are mechanical and one is for anything the lot man wants to do, like washing cars or swapping out a radio. We don’t do the detail in the shop. But all of our inspections are done in-house. “The Internet is our biggest (advertisement investment) by a long shot. Probably 85 percent is Internet. It’s, AutoTrader, Craigslist and a couple of smaller ones that import your cars from other sites. We also use Auto Shopper. “I just signed up with a radio station to market to Hispanics using bilingual (ads). Those are just starting. It will take 60 to 90 days to see how it works. But anytime we’ve used bilin-

gual ads in the past, they’ve worked out. “We just sold a 2006 Lexus RS330. It had 118,000 miles on it. We got $14,995, minus the trade. “The banks have opened up better.�


Tony Petrone, vice president and general manager, International Motor Group, Warwick, R.I.: “We’ve been in business since 1981 – so 34 years. We have a main location and we have an annex. We started off in the main location a block-and-a-half away, just servicing and repairing cars. Then we started selling out of that location, but it was too small. So then we bought another location where we could stock more cars on the lot. Now we do a lot of repairs out of the first location. Recon and most of the sales are done out of the second location. “We keep about 65 cars on the lot.

$"% !*&* !!#( “We acquire vehicles at the auction, some from private owners and some from new-car dealers. (The number) from new-car dealers is diminishing because they are keeping more of the cars for themselves. “We’re averaging 31 to 32 (sales) per month. We’re doing much better than last year when we were only selling 20 to 25 per month. “I think the economy has gotten a little better. I also think my guys are doing a better job. There’s a little bit better focus. “You have to work on your business. You can’t be on the golf course three days a week and expect your business to grow. It’s not going to. You have to be involved in the business. “We can get anybody approved. About a third of our business is non-prime. That has increased a little bit – about 10 percent. “Average retail price on our vehicles is about $15,000 to $16,000. Our inventory hasn’t changed.

Our average model year is 2010 to 2011. I like to keep the mileage under 70,000. You have to pay a premium for cars that are under 40,000 miles. “Two-thirds of my cars are imports. Eighty percent (of our inventory) is cars, 10 percent is SUVs and 10 percent is trucks. “We have our own service and reconditioning department. Reconditioning is $1,000 to $1,200, on average, per car. “We have five mechanics in our service department so we do outside work. “We have our website for advertising. We use,, CarGurus and Carfax. “We also do some TV. Some (former customers) have come back because of those ads. People forget about you, then they see the commercial. “We just sold a 2009 Audi A4 Quattro convertible for $21,000. It had 51,000 miles. “I’m feeling very good about the rest of the year.�

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Mark Greb, owner, Plaza Auto Auction, Mt. Vernon, Iowa: “We’re a smaller sale and we just recently started selling cars on Edge Pipeline and that’s going well. “Plaza has been here since 1962 and I’ve owned it since 2003. We have five lanes and we run four. “In July volumes ticked downward, but less than 3 percent. But we’re 9 percent up (as of July 24). We’re running about 275, year-to-date. “Except for conversion rates, we’re up on vehicles offered and sold. Conversion rates are at 58 percent (in July). In June, we were enjoying in the high 60s. “Percentage-wise we have about 17 percent fleet-lease vehicles. We’ve got some good relationships with the banks and credit unions in this area. “We’re up on dollars and attendance, too. We added some new salespeople, like Carrie Gralund.

Plus, we had been talking about running cars online, so that has helped. Interest piqued about that. We’re looking at attracting more fleet customers and franchise dealers. “Independent dealers have said that business picked up earlier (in June). So they’re having a good year, but franchise dealers are having a great year. Franchise dealers are holding more used cars. “Our average price coming through the lanes has dropped a little bit. I believe it’s just under $4,000. “With the success of our powersports sale – which used to be quarterly – we’ve moved it to a monthly sale. The first week of every month we run it in conjunction with our regular sale. We start it a little earlier than our regular sale. We usually have 80 pieces to the low 90s. Conversion rate has been in the low 50s or high 40s. “What really sells are the motorcycles, four-wheelers,

side-by-sides and light-duty construction equipment. But we’ll also get campers, fifth wheels and boats. “Our 52nd anniversary sale is Aug. 26. (One feature is) we’ll have 52 piggy banks. We’ll call dealers’ names and they can break a bank which can have anywhere from $50 to $1,000.”


Butch Royall, managing partner, ABC – Baton Rouge, Baton Rouge, La.: “June marked our 2nd anniversary. We served some cake, gave away some prizes and sold some cars. It went well. “In the last year we added a brand new reconditioning center, since we outgrew our old one. We added five more acres of concrete and four acres of paving. “We now have six lanes on 37 acres. We used to have four, so we added two lanes, though we have not opened them yet. “We’ll run between 500 and 600 cars per week.

“We’re up 31 percent over last year. “We have first-rate accounts. We ran Capital One, Santander, Chrysler Capital, Avis/Budget, GE Remarketing, Westlake Financial, ARI and Element. “On the dealer side, virtually all of the major – and a number of minor – dealers run with us. “I think we’re 47 percent dealer and 53 percent commercial or fleet-lease. “Our conversion rates are the highest in our chain. (Through June) we averaged 65 percent for the year. “We’re getting about 375 dealers in the lanes per week. That’s up probably 50 to 60 dealers from a year ago. “We try just to go back to basics. It’s nothing fancy or nothing splashy. It’s just about taking care of the customers. If they have a problem, don’t procrastinate. Handle the problem right then. We just try to put ourselves in the shoes of the dealer. What would we


Compiled by Jeffrey Bellant want if we were the dealers? “Our customers are buyers like CarMax, Drivetime and the independent dealer who’s in here buying because he keeps 25 to 30 cars on his lot. That’s who we’re targeting. I don’t want to get the sales force distracted by RVs, boats or airplanes. “Our average car (at a recent sale) was $7,655. We may be up a little bit. We have a lot of first-payment defaults and nice cars. But we go all the way down to in-ops. “In the next 12 to 18 months, though, I think we’re going to do a complete reversal. After 2008, we had the perfect storm for no vehicles in the marketplace. So it became a seller’s market. I think the economy is going to continue to strengthen. Now, instead of the seller being in control, it’s going to be the buyer that’s in control. “But I’ve only been in the business for 51 years, so I haven’t figured it all out yet.”

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COMPACT CAR PICKUP JAN 2015 FEB 2015 MAR 2015 APR 2015 MAY 2015 JUN 2015 YTD AVG:

$5,632 $5,759 $5,838 $5,847 $5,680 $5,416 $5,701

100,106 100,462 100,809 100,440 101,409 102,021 100,873

JAN 2015 FEB 2015 MAR 2015 APR 2015 MAY 2015 JUN 2015 YTD AVG:

$13,879 111,264 $14,163 110,360 $14,722 108,826 $15,336 106,980 $15,456 106,454 $15,220 107,946 $14,803 108,618


$4,266 $4,007 $4,240 $3,984 $4,101 $3,882 $4,082

108,579 113,914 114,926 115,364 112,518 113,929 113,328

JAN 2015 FEB 2015 MAR 2015 APR 2015 MAY 2015 JUN 2015 YTD AVG:



JAN 2015 FEB 2015 MAR 2015 APR 2015 MAY 2015 JUN 2015 YTD AVG:

JAN 2015 FEB 2015 MAR 2015 APR 2015 MAY 2015 JUN 2015 YTD AVG:

$12,358 $11,598 $12,383 $13,142 $12,656 $12,180 $12,405

95,857 99,194 98,343 96,598 96,792 98,544 97,528



JAN 2015 FEB 2015 MAR 2015 APR 2015 MAY 2015 JUN 2015 YTD AVG:

JAN 2015 FEB 2015 MAR 2015 APR 2015 MAY 2015 JUN 2015 YTD AVG:

$6,156 $6,211 $6,387 $6,476 $6,298 $6,114 $6,281

108,791 109,109 109,546 108,704 108,902 109,725 109,136


17_UCN.indd 1

$15,394 $15,515 $16,798 $17,604 $16,827 $16,527 $16,529

79,612 79,439 74,113 73,178 74,225 74,966 75,653

$11,557 105,666 $11,244 108,478 $11,773 107,163 $12,011 106,894 $11,967 106,085 $11,501 107,539 $11,680 106,978

$6,420 $6,415 $6,729 $6,814 $6,624 $6,380 $6,573

118,412 120,351 117,808 118,265 120,034 120,911 119,229



7/24/15 10:57 AM


Compact Car

TCI $1,926 1 $14,948 2 $12,966 3 $11,831 4 $10,013 5 $8,164

Subcompact Car TCI $1,196 1 $13,859 2 $12,203 3 $11,240 4 $8,742 5 $7,167

Midsize Car

TCI $2,271 1 $18,172 2 $14,970 3 $13,523 4 $11,624 5 $10,081

Large Car

TCI $3,879 1 $20,348 2 $17,291 3 $16,005 4 $12,991 5 $10,249


$2,070 7.48% $13,250 -11.36% $12,321 -4.97% $10,982 -7.18% $9,689 -3.24% $7,954 -2.57% $1,502 25.59% $12,041 -13.12% $10,714 -12.20% $10,310 -8.27% $8,795 0.61% $6,969 -2.76% $2,648 16.60% $16,345 -10.05% $14,550 -2.81% $12,789 -5.43% $10,909 -6.15% $9,276 -7.99% $3,295 -15.06% $21,720 6.74% $17,173 -0.68% $14,766 -7.74% $12,681 -2.39% $10,151 -0.96%

Compact Crossover Suv

TCI $1,649 1 $19,786 2 $17,056 3 $15,282 4 $12,882 5 $10,951

% Change ‘14-’15

$1,652 $18,552 $17,247 $15,144 $12,674 $11,056

0.18% -6.24% 1.12% -0.90% -1.61% 0.96%



Large Traditional Suv

TCI $4,179 1 $36,740 2 $30,980 3 $27,888 4 $24,136 5 $19,214

Compact Truck

TCI $617 1 $22,049 2 $20,077 3 $17,139 4 $15,114 5 $13,778

Large Truck

TCI $4,072 1 $29,358 2 $27,068 3 $23,395 4 $20,473 5 $17,542


TCI $2,490 1 $22,346 2 $20,194 3 $19,181 4 $13,313 5 $10,740


TCI $2,346 1 $20,302 2 $18,087 3 $16,204 4 $11,968 5 #N/A

$2,155 -48.43% $34,377 -6.43% $31,501 1.68% $27,676 -0.76% $24,214 0.32% $21,078 9.70% $689 11.67% $21,994 -0.25% $20,570 2.46% $18,494 7.91% $15,370 1.69% $14,129 2.55% $3,481 -14.51% $29,634 0.94% $27,077 0.03% $24,384 4.23% $20,652 0.87% $17,959 2.38% $2,510 0.80% $20,253 -9.37% $19,279 -4.53% $17,874 -6.81% $15,160 13.87% $10,724 -0.15%

$1,665 -29.03% $21,908 7.91% $12,726 -29.64% $15,613 -3.65% $14,067 17.54% $10,743 #N/A

Midsize Crossover Suv

Entry Sport Car

Midsize Traditional Suv

Midrange Sport Car

TCI $2,301 1 $22,827 2 $20,535 3 $18,341 4 $14,730 5 $12,797

TCI $1,785 1 $27,636 2 $24,191 3 $22,405 4 $18,637 5 $15,005

$2,759 19.90% $21,102 -7.56% $20,358 -0.86% $18,259 -0.45% $14,845 0.78% $12,392 -3.16% $2,024 13.39% $27,191 -1.61% $24,128 -0.26% $21,689 -3.20% $19,977 7.19% $16,474 9.79%

Large Crossover Suv

TCI $3,972 1 $27,415 2 $23,145 3 $21,525 4 $16,952 5 $13,884

18_UCN.indd 1

$4,039 $27,969 $24,078 $20,661 $17,350 $13,717

1.69% 2.02% 4.03% -4.01% 2.35% -1.20%

% Change ‘14-’15

TCI $2,607 1 $22,642 2 $20,862 3 $19,814 4 $18,603 5 $14,404

TCI $1,523 1 $44,301 2 $36,184 3 $32,703 4 $28,217 5 $26,347

$1,495 -42.65% $23,296 2.89% $19,388 -7.07% $18,212 -8.09% $16,854 -9.40% $15,914 10.48% $1,747 14.71% $47,289 6.74% $37,582 3.86% $31,806 -2.74% $30,456 7.93% $24,775 -5.97%



% Change ‘14-’15

Premium Sport Car

TCI $2,789 1 $79,144 2 $65,319 3 $68,960 4 $46,941 5 $42,832

Entry Luxury Car TCI $2,705 1 $28,646 2 $23,096 3 $22,207 4 $18,159 5 $15,295

Entry Luxury Suv

TCI $2,049 1 $32,681 2 $28,153 3 $25,316 4 $21,577 5 $17,218

$2,848 2.12% $80,605 1.85% $35,092 -46.28% $52,801 -23.43% $61,594 31.22% $40,266 -5.99% $3,030 12.01% $27,894 -2.63% $23,191 0.41% $19,833 -10.69% $17,542 -3.40% $14,468 -5.41% $2,447 19.42% $31,935 -2.28% $27,834 -1.13% $24,500 -3.22% $21,007 -2.64% $18,069 4.94%

Midrange Luxury Car TCI $3,310 1 $40,020 2 $35,429 3 $31,466 4 $23,218 5 $18,488

$3,081 $37,996 $32,120 $28,796 $24,100 $18,466

-6.92% -5.06% -9.34% -8.49% 3.80% -0.12%

Midrange Luxury Suv TCI $1,097 1 $44,772 2 $39,392 3 $31,866 4 $27,984 5 $22,684

$1,286 17.23% $46,899 4.75% $38,431 -2.44% $32,296 1.35% $27,032 -3.40% $22,879 0.86%

Premium Luxury Car

TCI $3,220 1 $65,498 2 $52,607 3 $46,821 4 $37,584 5 $28,671

$4,319 34.13% $63,235 -3.46% $51,654 -1.81% $41,235 -11.93% $37,141 -1.18% $30,802 7.43%

Premium Luxury Suv

TCI $3,384 1 $59,473 2 $49,232 3 $42,110 4 $32,804 5 $28,031

$2,075 -38.68% $59,821 0.59% $48,616 -1.25% $40,438 -3.97% $35,396 7.90% $25,923 -7.52%’s monthly True Cost of Incentives (TCI) report takes into account all of the manufacturers’ various United States incentives programs, including subvented interest rates and lease programs as well as cash rebates to consumers and dealers. To ensure the greatest possible accuracy, bases its calculations on sales volume, including the mix of vehicle makes and models for each month, as well as on the proportion of vehicles for which each type of incentive was used. TCI data (and other data products) can be viewed industrywide, import vs. domestic, by country of origin, by make, by model and by segment. True Market Value (TMV) is the transaction price for vehicles.

7/24/15 9:45 AM


DISCONNECTED JOTTINGS FROM I hesitate to prognosticate on sensitive issues upon which people rarely agree, but the world seems full of irony right now. Trump has both feet in his mouth but is currently the frontrunner for the Republicans, all Tony of whom Moorby d i s own him but combined couldn’t run a barn dance in a brewery. The Democrats have one ticket (to the same dance?) dependent on a woman whose word is not dependable. She’s probably going to be the next president on the same conscience-vote that got Obama elected in spite of unanswered previous major faux pas. The rest of the Republicans are throwing all sorts of insults Trump’s


way because, should he get elected, he would upset the apple carts of D.C. like Jesus turning over the money-changers’ tables in the Temple. The populace is sick of politicians at the trough, but often it’s up to the politicians to install term limits. Trump’s free speech comes at the behest of people like John McCain, but you can’t help admiring Trump’s tossing political correctness aside in the middle of the political arena. The Republican Party has more candidates than talent and will dilute and split support until the Convention when the best will have to be made of a bad job. I’ve said it before, but it’s unimaginable that a country of some 325 million souls can’t manifest better representations of its wishes than those that we have. The Europeans are just as bad or worse. The European Community is anything but a community, what with political and monetary dis-

array. All run by European members of Parliament who make our politicians look like rank amateurs and yet they point fingers at Greece and complain about the welfare state that is expensively running Greece into the ground. Another case of ‘physician heal thyself’ – fat chance. The rich nations are paying for the welfare of the poor ones, even to the extent of paying for family benefits, when no self-discipline is exerted by the recipient of those benefits (who, by the way will have paid not one penny piece into the tax system that supports all these programs). A Romanian family of six was recently put up in a four-star hotel in London for six months because no other accommodation could be found! Really? Seriously? To add insult, the mother became pregnant and qualified for further benefits. Eastern Europeans are migrating to wealthier member nations, because they


can, after all who wouldn’t? But now there’s a realization that someone has to pay the piper. Greece has a greater percentage of its population than any other European country working for, or on behalf of, local or national government. They’ve enjoyed early retirement programs for government workers and now the bill is on the table with no one able or willing to pick up the tab. Except, in the European Union, the wealthier nations have to come running. The irony here is that Germany, the potential biggest donor to the cause, is refusing to extend further credit until Greece gets a handle on its spending habits. But Greece has to borrow to pay off its debts just like Germany had to after the war and

Greece was one of its creditors being asked to forgive the payments that Germany should have repaid. What goes around‌.. We’re on the horns of making a deal with Iran to stop enriching uranium for nuclear weapons for 10 years and giving them billions of dollars to boot. The Ayatollah Khamenei has admitted, before Congress has even sanctioned the deal, that they will not keep their side of the bargain. By the time we’ve realized and managed to prove any wrong-doing (by the world’s greatest procrastinators) we will have pumped enough money in to their economy to give them sufficient ways to arm their allies. One day is a lifetime in politics but 10 years is a blink of an eye in history. Ironic eh?

To see past columns from Tony Moorby, visit


By Miles Mellor


Down 1. Former Hyundai coupe 2. Brand with a lion trademark 3. Luxury SUV from Buick Across 4. Compact SUV from Jeep 1. BBC car series, 2 21. Cadillac first produced words in 1953 5. Scion compact coupe 5. Exchange, when 25. Honda model 6. Fix in a way buying, 2 words 28. They are often made 7. Quickly! 10. Alliance that includes monthly 8. Ford ___ Crossover Ukraine, for short 29. Business promotion 9. Murano maker 11. Going up and down 30. Out of date over speed bumps, 13. GMC truck 31. Sale of vehicles going perhaps 16. Green light indicating to another country 12. Dashboard dials economical driving 32. It often requires an 14. GPS provides one, 17. Air ____ AAA visit, 2 words abbr. 18. They measure mileage 35. International car race 15. Old British Ford 20. West Coast university 38. Spherical 17. Arts degree 22. Drop in price, 2 words 18. Swell scenery in many 39. International courier 23. Collectible cars 40. Toyota model car ads 41. Respectful address to 24. Isuzu SUV 19. It’s moved with a 25. Dodge sedan a customer wrench









10 11

12 13





18 19


21 22












34 35



38 39



Answers to the 7/20/15 puzzle

26. It screws on to close the fuel tank 27. Part of any url 28. Adobe file type 33. ____ RX 350 34. Popular car color 36. Curve 37. Lower the lights

































































































































Answers to this puzzle in the 8/17/15 issue. Call 1.800.794.0760 for a FREE subscription.

19_UCN.indd 1

7/27/15 2:56 PM


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USED CAR & FINANCE. Turn-key operations. 22 years. Retiring. Madison Hts., Mich. $70,000. 248-396-0475 USED CAR LOT for sale or lease in Elgin, Illinois. 33 Years. Owner retiring. Turn Key operation. Call Mike @708-642-5295 or Suzy 239-572-3088

FINANCE MANAGERS FINANCE MANAGERS – FL 5th largest used car dealer is currently seeking Finance Managers for its West Palm Beach, Miami and Orlando locations. Must have minimum 5 yrs experience in finance, must be able to handle 100 minimum spins a month, be detailed with paperwork, run clean, tight CITs and work in a fast paced environment. Closers can earn 20-30k per month, 8-11 days off avg per month, benefits and 401(k). Send resume to:





400+ Units From Your Favorite Sellers: Enterprise Holdings, Purple Heart, DT Credit, Hertz, Avis, Assorted Lease and Dealer Consignment, Plus Over 400 Units from TitleMax For More Information Please Call Manheim Georgia Auto Aucton 404-349-5555

Simulcast NOW Available!

Located on CONE Rd. Sale Every MONDAY 9:30 am Over 180+ units weekly Indoor VIDEO SALE located at Cone Rd.

FREE Breakfast 8:30 am

Proudly featuring: Ford Credit, Progressive, All State, Geico, State Farm, and various Fleet Lease

(813) 247-1666 5109 Cone Road Tampa, FL 33619


! September 7

Dealer Education

Deadline Thursday, August 27

September 21

NAAA Convention Edition Deadline Thursday, September 10

Dealers Guide to Auto Auctions [Inserted in Sep 21 issue]

Deadline Thursday, September 3








The nation’s used car destination is expanding again and needs good people in all departments. We are the country’s largest volume independent used car dealer with unlimited growth potential. Live and work in beautiful Central and South Florida-Orlando, West Palm Beach, Miami and the Ft. Lauderdale area! Finance Managers 250k plus! Sales Managers 200k plus! salespeople 100k plus! Title Clerks, Billers, Detailers, Lot Attendants, Mechanics, Inventory management staff as well as Lot Management also needed. If you are the industry’s best and want the opportunity of a lifetime, send us your resume to:

October 5

Compliance Focus

Deadline Thursday, September 24

October 19

Dealer Management Software Deadline ThursdayOctober 8

November 2

Dealer Life [BHPH Spotlight Advertorial] Deadline Thursday, October 22

November 16

Factory Focus

Deadline Thursday, November 5








CLASSIFIEDS 7/27/15 1:35 PM




Compiled by Jeffrey Bellant


CLASSIC ROCK: The rock group Heart plays to a packed house during the annual Rock & Roll sale at DAA Northwest.

DAA Northwest’s 20th annual Rock & Roll Sale delivered the auction’s highest volume sale ever with over 3,100 sold of 4,400 units consigned and a 70 percent-plus conversion rate. “Our staff was stretched to the limit for this one, and they more than rose to the occasion,” says

Bob McConkey, DAA’s president. “I’m proud of the effort they all made, and I’m thankful to all our customers for making this event what it has grown into.” Following the July 15 sale, DAA transformed its Spokane, Wash., facility into a concert venue and rolled out appetizers and bever-

ages for 4,000 guests. Local favorites The Cronkites, featuring DAA’s Greg Mahugh and Pat Simmons, opened for Rock & Roll Hall of Famers Ann and Nancy Wilson of Heart. The Wilson sisters performed hit after hit for DAA’s energetic crowd during their 100-minute show. DAA introduced a new Auction Partner Expo during the July 16 sale, giving its dealer customers a chance to take advantage of special offers and information in a trade-show-like setting. AFC, Floorplan Xpress, NextGear Capital, Sherwin-Williams Automotive Finishes, the Washington State Independent Auto Dealers Association and the Montana Independent Auto Dealers Association took part in the Expo. “It’s been a great week and we’ve had a chance to reconnect with hundreds of customers and industry friends,” McConkey said.

Cox Automotive Holds Food Drive Cox Automotive employees donated more than 82,000 pounds of canned food nationwide in conjunction with its Drive Away Hunger annual food campaign. The food, coupled with a $100,000 corporate contribution, benefited the Atlanta Community Food Bank (ACFB) and a variety of local food banks where employees live, work and volunteer. “Cox Automotive and its employees have once again shown their commitment to helping feed their neighbors by collecting over 20,000 pounds of food in two weeks during their annual Drive Away Hunger campaign – that’s more than 17,000 meals on the tables of those in need,” said Kyle Waide, president and CEO of the Atlanta Community Food Bank. “For more than 10 years, Cox Automotive has been an incredible partner, providing high quality and quantities of food to those in need.”

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:


The AUTO USE Checkbook Checkbook

Available to all signed floorplan dealers

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For more information or to apply:

(800) 873-2907

7/27/15 4:34 PM

Special Advertising Section


Car Financial Services ........ 22 & 27 Credit Acceptance Corp. ..... 25 & 26 Copart ............................................... 24 GWC Warranty ............................... 26 Go Financial ........................... 25 & 28 Gordon Howard/Passtime ............ 30 iMetrik Global ....................... 28 & 29 NextGear Capital .................. 23 & 31 Northland ............................... 23 & 25 Skypatrol LLC .................................. 27 Vehicle Acceptance ............. 24 & 30

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7/24/15 10:38 AM


Special Advertising Section

Inventory Financing Critical to Remarketing Industry Inventory financing (floor planning) continues to be a viable source for dealers to floor their units. Not only does a floor plan allow dealers to expand their new and used offerings, but it also frees up capital for other uses. It lets dealers focus on what they do best: selling cars. What’s more, advances in technology have made it easier than ever for dealers and auctions to conduct business. FULL SPECTRUM OF DEALERS EMPOWERED A flexible floor plan allows dealers of any size to finance used and new vehicles from multiple buying channels, including auction purchases, trade-ins, wholesale units, dealer-owned inventory and even private owner purchases. From a franchise owner with multiple lots to a small mom-and-pop operation, floor planning is an efficient and simple way that dealers can balance credit and working capital to maximize their cash flow, which is the lifeblood

of a dealer’s business and the fuel for growth. An added benefit floor planning provides dealers is the ability to leverage additional tools to assist with cash flow. Having financing options not only allows dealers to increase cash flow while waiting on units to sell, but the relationship between commercial (floor plan) and retail (consumer) lenders can greatly assist dealers

accommodate their needs and demands by choosing terms/ programs that are right for them. Floor plan companies can also play a role in helping a dealer expand their business. If a dealer wants to add a second location or expand a current one, they’re going to need units to sell. By working with a willing and focused floor plan company, a dealer can sim-

for dealers, saving time and simplifying the process of buying and selling inventory. Mobile technology allows dealers to conduct business anywhere and at any time, making floor planning easy and efficient. The swift changes in the technology landscape have benefited the wholesale auction industry as well, with advancements continuing to improve bringing buyers and sellers closer

by getting profits quicker and satisfying debt sooner, which allows dealers to buy and sell more cars. A line of credit can sometimes be a one size fits all, but many dealers have different needs, from wholesale to retail, high line to economy. With the flexibility of a floor plan, dealers can

plify the process to secure from all over the country and new capital to help stock their the world. new lot or increase offerings This increase in technology at an existing location. solutions for auctions has fueled the success of many internetTECHNOLOGY = GAME based auction offerings. CHANGER These sales channels Recent advances in tech- have grown by leaps and nology – such as the use of bounds and are living proof mobile devices – have made that online continues to floor planning a powerful tool show promise for the

wholesale industry. The retail side of the business is also recognizing growth online, with multiple success stories from and to smaller channels across the landscape. HELPING CREATE A MORE ROBUST INDUSTRY Inventory financing continues to play a role in the recovery from the financial crisis of 2008. As the economy improves, dealers are stepping up with more confidence. Because dealers have financing options to choose from, they have the ability to stock their lots with more units. This has a positive correlation on auctions, as they need to floor more cars in the lanes to meet demand. Looking to the near future, off-lease inventory will start coming out over the next year or two as well. That flood on the market is going to create more supply, resulting in lower prices and more demand for financing options.




Increased Customer Loyalty No Repossessions Bankruptcy Protection Delinquency Leverage

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7/24/15 10:37 AM


What Is it Really Worth? By Jonathan Neubauer, President & CEO, Vehicle Acceptance Corporation

One key to operating a successful dealership is effective inventory cost control – are you making good buys? Information is critical to making value-driven purchase decisions. What is that unit worth right now? In 90 days? What gross profit do I stand to gain? Just as no two vehicles are the same, neither are their values. Recent wholesale and retail values, compiled from similar vehicles in the same region, provide valuable insight into what a

Copart Introduces New Android App

particular unit is likely worth. VAC offers free Black Book valuations through its dealer portal. This powerful tool provides timely and accurate sales data and residual values on any vehicle in your inventory. This also includes a history, allowing the dealer to estimate how a similar vehicle’s value will change. Ask your local VAC representative about our “No Curtailment� Floorplan today. Fees starting at $49, and we pride ourselves in providing dealers exceptional service. Visit or call 1-888-571-7092 for more information.

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I S S U E DAT E : M O N DAY, S E P T E M B E R 15 D E A D L I N E : T H U R S DAY, S E P T E M B E R 3

CALL 800-794-0760 TO RESERVE YOUR AD SPACE AndroidAppLaunch-TradeAd copy.pdf


Special Advertising Section



4:30 PM

Copart, a leader in global online vehicle auctions, has officially launched the highly anticipated update to its Copart Mobile App for Android. With this new, more powerful version, Android users can register, bid and add items to their Watchlist on-the-go.

iOS use it at least every three days, many use it daily.� In response to increased member mobile use, Copart has put a large focus on performance and function of their mobile apps across all platforms, and the launch of the new Android app is the latest in Copart’s efforts

The Android app joins Copart’s popular iOS app for iPhone and iPad, giving members who access Copart from a smartphone or tablet even more mobile choices for browsing, bidding and buying with Copart. “It’s important we continue to give members the advantage of buying, anywhere, at any moment,� said Copart’s Chief Executive Officer, Jay Adair. Copart expects its large domestic and international member base to benefit from the updated Android app. The demand for mobile access to auctions is at an all-time high, and Copart members are embracing the trend. Adair notes, “Over 90 percent of users who download our Copart mobile app for Android or

to revolutionize the mobile auction experience. Along with granting access to Copart’s inventory of nearly 100,000 vehicles, the new Android mobile app has the ability to send push notifications for selected auctions and watchlist items, so members can stay up-to-date with the status of their bids from virtually anywhere. “The mobile interface is phenomenal,� Adair adds. “It’s so intuitive, and gives members the power of our online platform at their fingertips. This experience will be hard to beat.� Copart Mobile is available for download in Android’s Google P l a y S t o r e a n d A p p l e ’s A p p S t o r e . To l e a r n m o r e , v i s i t

Where will you be


when you win?








Introducing the new Copart Mobile App for


Download and join now or learn more at

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7/27/15 3:43 PM


Special Advertising Section

Improve Your Customer Retention Rich or poor – customers like to change vehicles! On a standard retail car sale or even a buy-here, pay-here sale, once that customer leaves your lot, there’s no guarantee they will come back to your dealership to get their next car. They can go anywhere to trade that vehicle. Used car leasing solves that problem! The Lease’T’OwnŽ business model has proven to bring dealerships increased

while doing buy-here, pay-here was 24% – the national average at that time. It wasn’t surprising that he received approximately 24% of the cars back on Lease’T’Own as well. The huge difference between the two models is that 80% of the cars he repo’d with buy-here, payhere went directly to the auction. It wasn’t worth trying to fix them. Of the cars he took back with

Sell More Cars with GO Financial

customer retention. With used car leasing, the dealer remains the titled owner of the Lease’T’OwnŽ car. The customer can’t go anywhere else but back to YOUR dealership if they want to change cars. Lease’T’OwnŽ dealers are trained on “rolling� customers from car to car and “rolling� cars from customer to customer! You can provide transportation for life to your customers! A large buy-here, pay-here dealer from Texas decided to try out Lease’T’OwnŽ. After being on the program for a few years, he reported some valuable statistics. His average repossession rate

Lease’T’OwnŽ, none went to the auction. 55% of those customers who returned their Lease’T’OwnŽ vehicles came back to the dealership for another car once they got on their feet financially. How is this possible? Because a key benefit of Lease’T’OwnŽ is the flexibility! Your customers know they can return the car at any time, for any reason, without penalty. They know they can come back at any time to get another car. Expectations are clearly explained at the time of the deal and the door for communication is left wide open. Doing Lease’T’OwnŽ and doing it right, will gain you customer’s for life!

GO Financial has a unique subprime lending program that gives dealers the best of both worlds: upfront profit at the point of sale and a share of the finance profits earned over the life of the loan. Considering that over a third of today’s car buyers have subprime credit; GO’s program enables participating dealers to turn more of their subprime customers from leads to sales each and every month. GO Financial has developed a proprietary web-based portal that is easy to use and speeds up the sales process by providing the dealer with immediate approvals. GO’s portal also provides additional flexibility versus typical indirect lending programs, helping dealers maximize profits by optimizing their deal structure and providing choices for dealers to best match the right vehicle for each unique customer’s situation. Simply put, the GO Portal allows a dealer to focus on selling more cars while partnering with GO to build a portfolio of loans to provide long term income over time.

GO Financial is owned by two auto industry powerhouses servicing independent and franchise dealers across the country. This ownership background provides access to products and expertise in all facets of the auto industry, including retail sales and finance, wholesale and auction markets, floorplan lines of credit, advertising and everything in between. These roots with 20+ years of experience allows GO to look at the business from the eyes of a dealer, which is different than any other finance company in the industry. GO Financial is licensed in 46 states and actively enrolling franchise and independent dealers. GO has no sign-up fees, norecourse, monthly system fees and can also be accessed through DealerTrack. To learn more about the advantages of GO’s program or for a quick demonstration of the power of the GO Portal, please contact us at 888-GOFinancial (888-463-4626) or visit

The only finance company you can’t afford to live without! §

Longer terms


Compliance checking


Broader funding policies


Contract printing


Newer vehicles


Fast funding


Higher advances


Quick approvals

“I opened my business in 1998 with about 15 different lenders and selling around 30 cars a month. In 2004 most of the lenders dried up and so did my volume and cash flow. My first Portfolio Profit Express check was $47,000. Credit Acceptance not only saved my dealership, it’s allowed me to increase my sales. The program has been life-changing for me and my customers.�

Joe Kaisk

Magic City Motorcars (OH)

 & &   | 800.873.0512 |

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7/24/15 10:37 AM


Grow Your Business Through Additional Sales and Profits Dealers succeed in this business by selling more cars and making more money, yet many consistently lose profitable business. Credit Acceptance, a publicly traded finance company founded in 1972, gives independent and franchise dealers the ability to provide an approval to every customer on nearly any vehicle. With their Portfolio and Purchase programs, dealers can maximize every deal and choose which to use on a deal-by-deal basis. Designed to capture lost customer opportunities, the Portfolio program enables dealers to make money now, and with residuals on the Portfolio contracts, well into the future. The Purchase program gives dealers all of their money up-front, similar to traditional financing. These programs can work in any market and align with existing staff, sales management and F&I protocol in a manner that complies with the policies governing your business. Recently, Credit Acceptance has made enhancements that make it even easier, faster and more profitable to do business. Their patented Credit Approval Processing System (CAPSÂŽ) makes it easy to receive approvals (in 30 seconds or less) and structure compliant deals. CAPS


Special Advertising Section

integrates with CarsforSale.comŽ, AutoClickŽ, ProMaxŽ and many other dealer and inventory management systems. The easy, 5-step process guides dealers through submitting an optimally structured approval, prints contracts, and keeps track of inventory, approvals and funding – allowing dealers to control the sale from start to finish. Reporting capabilities help dealers monitor their business, portfolios and customers. The Credit Acceptance Dealer Service Center provides the tools and guidance needed to achieve fast funding and long-term profitability. Currently, 62% of contracts are funded in 1 day or less, with the average deal funded in under four days! In 2014, Credit Acceptance paid dealers over $1,576,642,550 in Advances, over $41,707,140 in accelerated Portfolio Profit Express (Portfolio Profit money), and over $138,854,420 in Portfolio Profit. Visit to find out how you can sell more cars and make more money.

Level the Playing Field With Efficient Technology For used car dealers, every day is a battle to earn business from bigbox competition. To help put your dealership on an even plane, it’s important to integrate technology that makes you more efficient while projecting a modern image. Within the past year, GWC Warranty has introduced several technological tools designed to do just this. Additionally, these tools were designed to accommodate all dealerships, regardless of comfort level with technology. First was the online dealer portal, which launched about one year ago. This tool allows dealers to rate, submit and remit contracts online, as well as brand online inventory with GWC logos. WealthBuilder and Elite Dealers can even file claims online. In just one year, more than 40,000 contracts have been submitted via GWC’s dealer portal, which has logged over 1.2 million page visits. Most recently released was the new GWC Warranty Dealer App for iPads. This free, easy-to-use tool was built to provide a user-guided vehicle service contract (VSC) sales experience. With an educational multimedia library, customers can view videos and other content right on the app. Essentially, the app sells VSCs for you. Plus, it’s proven that shoppers

who view video are 174% more likely to purchase a product than those who don’t. Other features include an interactive coverage selection tool, electronic VIN scanner that populates vehicle information, a responsive shopping cart that updates monthly payments as options are selected and a stylus/finger signature function to quickly sign and submit contracts. Most importantly, regardless of your comfort level with technology, the GWC App offers great opportunity. Currently, just 20% of car dealerships use mobile technology, meaning the GWC App can differentiate your lot from the competition’s. Whether integrating technology into your dealership for educational purposes or for the entire VSC sales process, the GWC App – and all GWC’s technology solutions – have the functionality to match your business.

Learn more at


Introducing the GWC Warranty iPad App, the fastest and easiest way to sell a GWC service contract. With educational videos and an interactive coverage selection tool, the GWC App can sell the service contract for you. With just a few taps, the GWC App allows you to educate, rate and submit service contracts, all from the palm of your hand. Download the GWC Warranty iPad App in the Apple App Store today. @GWCWarranty

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7/24/15 10:37 AM


Special Advertising Section

Let Us Put You On The Road To Success Skypatrol Announces Time-Saving Solution Financial experience with dealerships of all sizes has shown time and time again that the trusted professionals at CAR Financial Services (CAR) can help you survive difficult times by customizing a floorplan, purchase, or servicing program that meets your specific needs. You’ll find that superior results are accomplished while providing quality service through a single dealer point of contact located near your dealership. Are you tired of the headaches that come with daily collection activity? John Schwartz of Schwartz Motors reports, “My weekly revenue doubled when CAR Financial started collecting my accounts back in 2000. CAR Financial has played a huge role in the success of my business over the years.” Does your dealership need capital to grow or a floorplan to buy inventory? Jon Herrington, President of Automax of Alexandria says, “CAR Financial has been my financial partner in the buy-here, pay-here industry for almost 10 years now. In uncertain times and economy, CAR Financial is the one to count on. When all others talk the talk, CAR Financial walks the walk. You can take that to the bank and cash it!” CAR.indd 1

The competitive advantage at CAR Financial is very simple: dealer relationships. At CAR, the relationships developed with dealers are for the long term. They strive to understand your day to day business so that they can structure a program designed to meet your long term goals and objectives. From point of sale options to floor plans, from purchasing a stream of payments to purchasing all of your accounts outright, even if you simply need help servicing your portfolio, the trusted professionals at CAR Financial are interested in working with you to meet your dealership’s needs. CAR services both independent automotive dealers and automotive sub-prime financial organizations. CAR operates in 45 States and is continually evolving its programs to meet the ever changing needs of those they serve. Their strengths lie with their experienced and professional employees, their dedication to technology and a tradition of over 25 years of quality service. Interested in more information on any of CAR’s programs and services? Go to or call 877-570-8857.

Skypatrol has has announced a new solution for batch communications to car loan customers. AutoBatch for DMS gives dealers and vehicle finance companies the capability to automate DMS-driven M2M (machine to machine”) commands to those in default. Dealers can leverage the power of their existing DMS to output a list of defaulting customers and the type of action that is required. This list is automatically emailed (M2M) and Skypatrol’s secure servers communicate with the borrower’s GPS, turning on a piezo, sending location information or deactivating the vehicle if parked. It does so fully independent of any system integration or application program interface (API) exchange, making it easy for Skypatrol customers to implement the solution across all popular DMS platforms without specialized technical support. When commands are distributed, a detailed report is sent confirming the action took place. If the vehicle can’t be reached, the system automatically retries to establish contact – which is reported as well. Skypatrol’s product and service solution combines propri-

etary GPS devices with innovative software systems that helps boost portfolio performance, increase operational efficiencies and reduce risk in the vehicle finance industry. AutoBatch for DMS combines with Skypatrol’s other finance industry products for a complete end-to-end solution. Its one-click Repo Mode Tool (patent pending) gives time-limited secure smartphone access to recovery teams of a vehicle’s current location. Skypatrol’s Data Verification Tool qualifies applicants and helps locate them if they skip. Its Virtual Collector module sends automated email and text reminders, increasing cash flow and reducing defaults. “I am a very strong proponent of products that automate communications and actions around the default process,” said Jim Rhoads, a consultant to the buy-here, payhere industry. “By removing the potential for human error, reaction to delinquency is timely and consistent. It also depersonalizes part of the process, allowing collectors to effectively blame “the system” for early and persistent reminders. For more info visit

7/24/15 2:44 PM

Is Your GPS Automated?

Defender GPS by Skypatrol automates vehicle finance procedures that for others are manual tasks. Our one-click Repo Mode Tool gives smartphone access to recovery teams showing the location in real-time The Virtual Collector sends automated email and text reminders increasing cash flow and reducing defaults Skypatrol’s Install App auto-populates data, pairs the GPS device to the vehicle and eliminates extra data entry

888.824.5360 Ext #4


Skypatrol's Data Verification Tool efficiently qualifies applicants and helps locate them if they skip

Best Vertical Platform * 2014

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M2M Evolution Conference Battle of the Platforms

7/24/15 2:45 PM



Special Advertising Section

Top-Tier GPS Technology Tips the Scale GPS devices are not all created equal. High quality and reliability are directly related to technological superiority. IMETRIK is a leading GPS solutions provider that controls and oversees the direct manufacturing of its devices, with a passionate focus on optimizing GPS technologies. The result? Superior quality products with key points of differentiation that make IMETRIK stand out.

Twice as many satellites means precise geolocation to within 12 feet of your asset Unlike other GPS companies, IMETRIK devices are not only configured to receive transmissions from all US satellites, but also from the entire Glonass system of global satellites, providing double the coverage across America. This expanded ability is one reason why IMETRIK can pinpoint a vehicle with incredible precision, not merely within a couple of city blocks. IMETRIK predicts the position of moving satellites for fastest geolocation

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IMETRIK devices contain imbedded satellite assisted GPS information, giving them the ability to predict the trajectory of the satellites and to detect their positions, accelerating the device’s ability to compute a precise location.

IMETRIK uses silicon SIM chips – they won’t melt, warp or damage like the plastic SIM cards used in phones and competitive GPS devices.

IMETRIK device is not a random component that is also used in mobile phones or other products: it was specifically designed, configured and calibrated for IMETRIK GPS devices in harsh environments. These antennas are simply superior.

signal-fix because the vehicle just entered an underground garage for example, it will then automatically provide the last known position (i.e., just before entering the garage).

Last known position captured every second, for more accurate tracking Custom-built antennas IMETRIK GPS devices provide a clear signal for take automatic geolocation optimal performance readings every second. The antenna on the When a device doesn’t get a

IMETRIK uses silicon SIM chips – not plastic SIM cards – ensuring heat resistance and long term durability A GPS device is not a mobile phone. That’s why

All components are industrial grade and specifically selected and configured for IMETRIK. Their GPS devices don’t use SIM cards meant for phones, antennas designed for radios, or batteries manufactured for other electronics. Everything is optimized for rugged GPS use. IMETRIK devices are highly reliable, regardless of the climate and wear and tear.

Optimized circuitry protects the device and saves the asset’s power supply IMETRIK devices have special circuitry engineered to withstand overloading from even the highest power spikes from commercial trucks. The device is protected, and when it “sleeps,� it minimizes power consumption from the asset’s battery.

Engineered with premium quality industrial grade components for maximum reliability, durability, and ruggedness IMETRIK’s technologically advanced GPS devices are developed internally by highly IMETRIK 3.5G devices skilled teams of hardware operate on the GSM network, and firmware engineers. delivering the most efficient

GPS data communication and performance Because of the way the information is encoded and modulated, 3.5G data transmission yields optimum speed and accuracy. Qualcomm Inc., a leader in next-generation mobile technology and the organization that defines technology standards, has confirmed that when 4G / LTE eventually becomes the standard, it will be on GSM only. As the IMETRIK platform already operates on GSM, it will continue to support new generations. IMETRIK has selected the long term course to avoid mass device recalls when other platforms ultimately go dark.

Technology advancements for the future While IMETRIK delivers the most reliable and technologically advanced GPS devices available today, it has an ironclad commitment to helping its customers stay ahead by driving new and ongoing developments into the future.

7/24/15 12:20 PM




7/23/15 11:30 AM

Special Advertising Section


Is Your GPS Device Really 3G? With 2G GSM towers sun-setting on a weekly basis, coverage for GPS devices on the 2G network is shrinking in areas across the country. If you think this is simply a rumor, just Google “AT&T 2G� and take a look at the top results. On the AT&T website you’ll find the statement, “AT&T has announced plans to sunset its 2G network by approximately January 1, 2017. As AT&T progressively frees up valuable spectrum for its mobile broadband networks, we may conclude that some markets or territories may need to sunset 2G even sooner.� We know that the carrier and its roaming partners has sunset certain markets already and will continue to in the next 18 months. T-Mobile is going to support its 2G network longer than AT&T, the question is: after AT&T’s network is gone, what does the T-Mobile network look like? Anyone who tells you that 2G is here to stay is, at best, basing their claim on a technicality; one which will not serve you well outside of T-Mobile’s native coverage. Moving to 3G Although 2G is not gone yet, the prudent long-term plan is to move to a newer technology, like 3G. Maybe you are already buying 3G – or you think you are.

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Many dealers and lenders who thought they were buying 3G devices are receiving 2G devices. Whether it is a misunderstanding or deliberate, many customers of GPS devices have indicated they thought they were buying 3G, when they were not. You may want to check the devices you order to confirm you are on the 3G network. You may find yourself in the dark, at a time you least expect, nor can afford. It may not be easy to determine which device you are using by looking at it. Your device provider should be able to match the model to certifications that show the device is utilizing 3G technology. This documentation is readily available and can easily be given to you. If your device provider is reluctant to supply you with this documentation, there may be a reason. PassTime, a leading provider of GPS devices is a Verizon Partner Program Member for its GPS devices for buy-here, pay-here and subprime lending. Its devices utilizes Verizon’s 3G network. Documentation of certification of its devices are available upon request. Should you have any concerns or questions about your device, contact PassTime at 877-727-7846 or

7/27/15 4:23 PM

Successful dealers are choosing NextGear Capital for their inventory financing needs because we

Offer flexible terms and competitive pricing

Equip them with cutting-edge technology

Provide them with best-in-class customer service

Support them with local representatives

Thousands of access points, dozens of benefits, and one company that brings it all to you.

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7/23/15 11:27 AM



+ +





Discover the future at this years INNOVATE. Three conferences—Industry, Compliance, and Technology—under one roof. #  # "" Learn how DealerSocket’s partnerships are going to make this year bigger and better than ever! Fort Worth, TX 9/20–9/23


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7/27/15 2:36 PM

Used Car News 8/3/15  
Used Car News 8/3/15