August 5, 2013
ON THE WEB: GM Financial Sees Higher Earnings
Auction Family Returns to Roots
General Motors Financial Co. announced earnings of $178 million for the quarter ended June 30, compared to $137 million for the same period last year.
Poll Finds Consumers Support CFPB
A majority of consumers support the Consumer Financial Protection Bureau, according to a new poll commissioned by Americans for Financial Reform and the Center for Responsible Lending. Voters supported the Consumer Financial Protection Bureau by a 38-point margin after hearing arguments pro and con.
CarMax Set to Add Another Superstore
CarMax Inc. is currently hiring for approximately 50 positions at the company’s new store in the Sacramento area. It is CarMax’s 17th store in California. It is scheduled to open Aug. 31.
Photo Courtesy of ServNet SLEEPLESS IN SEATTLE: The grand opening of DAA Seattle in Auburn, Wash., this summer marked the return of the McConkey family into the Seattlearea market. Bob McConkey Sr. opened the state’s first auction in 1954. By Jeffrey Bellant
The McConkey family has returned to the Seattle auction market, nearly 60 years after opening the first auction in Washington. DAA Seattle held its grand opening sale on June 25 in Auburn, Wash., after officially opening its lanes
earlier this year. Bob McConkey Jr. said he’s proud to return to the area where his father opened the family’s first auction in 1954. That sale, South Seattle Auto Auction, eventually was sold to GE in 1985 and was later acquired by Manheim. The new sale is a green-
field project that makes the most of its space. The auction runs two lanes with triple blocks, essentially creating six lanes. “So we can adjust,” he said. “We’re running four consistently and we ran six (during the grand opening sale). “We can run a good 600-
car sale in two hours time.” Creating this environment allows dealers to scope out six lanes in a smaller space. The sale is located just 25 miles south of the center of Seattle. “To be in a position to more directly serve customers in the Puget Sound marContinued on page 3
Rush - Dated Material
Edmunds.com Sues Firm for Fake Online Reviews Edmunds.com is taking a company to court for being an alleged review mill that posts fake tesimonials on a range of popular sites. Edmunds.com has filed a lawsuit against Texas-based Humankind Design Ltd. for, among other things, fraud and breach of the Edmunds.com membership agreement. Through its review of every car dealer rating and review submitted to Edmunds.com, the company discovered that Humankind attempted to register over 2,200 fake members on the site and tried to use them to create fraudulent content to sway car shoppers’ opinions of dealers. Edmunds.com claims that Humankind’s proprietor ex-
pressly promotes that he can create fraudulent reviews on ratings web sites. He readily admits online: “Does posting reviews...violate Terms of Service...? In general, the review sites state that you must be posting for yourself and not for someone else. So in these cases the answer would be yes.” Humankind also identifies 15 review sites on which it is prepared to post fake reviews; the list includes Google plus, Yelp, Foursquare, Citysearch and Local.yahoo.com. Edmunds.com is providing each of the listed sites with a copy of its filing to further support online consumers who might otherwise encounter such fraud.
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August 5, 2013ÛÛÝÛÛ
USED CAR NEWS
Title Transfer Tiff Causes Mecum to Cancel Sale By Jenny King
There was no Mecum auction at the Iowa State Fairgrounds this July. The two-day sale has been a popular annual event in Des Moines for more than 20 years. It draws thousands: sellers, buyers and onlookers. It’s a money-maker. The sale has been televised nationally. But the summer tradition ended this year with seemingly no notice. The reason given for its abrupt cancellation by Mecum Auctions Inc. of Walworth, Wis., was the impracticality of title transfers from sellers to Mecum. And, in instances where vehicles did not sell, transferring titles back to owners. Major Paul Steier of the Iowa Department of Transportation said the law impacting this sale has been on the books for well over 20 years. The code states that a licensed dealer cannot sell on consignment or broker a car unless the seller - in this case Mecum Auctions - is named on the title. An individual wishing to run his or her car through the auction must sign the vehicle over to the auction company. If the car does not sell, the auction company signs it back over to the seller. Cars older than 20 years are exempt. In addition to increased paper work, this procedure can affect the sale price of a collectible one-owner car, said Mark Andersen, dealer at World of Wheels in Des Moines. With several names on a title, a car no longer appears as a single-owner vehicle
and might give a buyer hesitation. And it’s likely to affect the sale price. “Mecum already holds the titles of cars registered for the sale,” said Andersen, a 32-year veteran of the business who also works for Mecum Auctions. Steier points out that up to 90 percent of the cars at a Mecum sale may be old enough (20 years or more) to be unaffected by the code. “We suggested to Mecum that they could have a separate auction for (younger) cars” subject to the title rule, he said. “They were not interested.” It is not clear why the law was not enforced prior to 2013. Steier said following the annual Mecum sale in 2010 his department received complaints from auction customers who had not received titles to vehicles they had purchased. Steier said once the department became aware of business practices at the auction, the DOT “educated and warned Mecum staff of Iowa title and vehicle sales laws. “This is the reason Mecum auction staff called us on May 13 as they said they had a record in their file indicating Iowa required all titles to be assigned to Mecum prior to the auction,” Steier said. The DOT spoke with Mecum staff May 13 and on two other occasions. “I provided e-mails to Mecum staff May 21 outlining Iowa title and vehicle sales laws, including the exemption for selling vehicles 20 years and older without a dealer license,” Steier said. “On May 22 I was sent a note from Mecum staff indicating the auction in Iowa was can-
DAA Seattle ket is something we have longed to do for years,” McConkey said. “We are excited to expand our reach into Western Washington and to strengthen the relationships we have built in the region. “We are certain the remarketing community will derive tremendous benefit from the values and best practices of an auction carrying both the McConkey group and ServNet brands in this part of the Northwest.” McConkey and his business partner, Greg Mahugh, added the
Photo courtesy of Mecum Auctions BETTER TIMES: The offerings at this 2011 Iowa sale drew good interest from bidders. Mecum Auctions decided to cancel its Iowa auction this year due to a misunderstanding with the state.
celed.” A subsequent conversation between Steier and Frank Mecum did not change the auction company’s decision. “We asked Mecum prior to the 2012 auction if it was complying with Iowa law,” he said. “Last year we had staff on site to go through the paperwork.” The DOT is concerned about protecting consumers from fraud, he said. To date, it’s a lose-lose situation. The state is out rental fees for the fairgrounds; a local car club won’t earn money for helping move cars during the two-day sale – funds it would in turn give to a favorite charity; buyers and sellers are disappointed, and businesses in the Des Moines area miss opportunities to serve locals and tourists. “I typically get 10 to 15 added sales because of the (Mecum) auction,” said Tom Wong, Tom’s Auto Sales, Des Moines. “It brings business in.”
Wong’s lot, with an inventory of 200-plus cars and trucks, is just five blocks from the fairgrounds and people headed there take note of his business. Wong said he has run some cars through the auction in the past. “We do a little business in older cars,” said Wong. “In any event, we always go to the auction – it’s unique.” Andersen of World of Wheels said the Iowa Mecum auction would typically offer 500 to 600 cars over two days with a sales rate of 60-65 percent. “Iowa is our smallest state and our second oldest sale after Indianapolis,” said Anderson, citing other Mecum auctions in California, Indiana, Missouri and Texas. “It’s a good, central location. There is money in here. And people like coming to Des Moines where the pace is slower, more relaxed.” The cancellation forced Mecum to renegotiate with Discovery Channel, which
televised segments of the sale. The auction house was committed to a certain number of hours, Andersen said. And Mecum typically provides many on-site services like security that otherwise might tax a community, said Andersen who does logistics for the company. If there were a rules change in Iowa, does he think Mecum would reconsider the state as a sale venue? “I’d say there’s a 50-50 chance he (Frank Mecum) would return,” Andersen said. Mecum Auctions did not return calls made to its headquarters in Wisconsin. When DOT’s Steier contacted Mecum back in May about his decision to cancel, he was told it was not a good business decision for the company at that time - nor likely in 2014. “They said it was too much of a burden,” Steier recalls. “We are reaching out to them.”
– Continued From Page 1 new sale to the McConkey Auction Group’s other properties: DAA Northwest in Spokane, Wash., KCI in Kansas City, Mo., and EPI in El Paso, Texas. DAA Seattle also became the 32nd member of the ServNet network. Meanwhile, McConkey and Mahugh continue their tradition of major events at their Spokane sales with the recent success of this year’s Rock & Roll Sale. The event featured a concert by REO Speedwagon. For more on this story, see page 24.
EVERYBODY LOVES OUR SALE: Greg Mahugh, left, and Bob McConkey Jr. return to their roots with their new sale in Seattle. The partners now have properties in Washington, Texas and Kansas.
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Â Ă›Ă›Ă?Ă›Ă›Ă›August 5, 2013
USED CAR NEWS
NEWS BRIEFS Used Cars Outperform New for Asbury Automotive Group
Asbury Automotive Group Inc. reported that used vehicle retail revenues were up 25 percent in the second quarter and gross profit was up 20 percent. Overall, the dealer group reported adjusted income from continuing operations for the second quarter of $30.4 million, versus income from continuing operations in the second quarter 2012 of $20.9 million. Net income for the second quarter was $27 million, compared to $21.1 million in the prior year period. Total revenues increased 16 percent to $1.3 billion, new-vehicle retail revenues were up 15 percent and gross profit was up 6 percent.
Reynolds Updates Forms
Reynolds and Reynolds announced that the Reynolds LAW California F&I Library of documents has been updated to reflect changes in California law and dealer feedback. Those updates include a new form to support electric vehicle sales, as well as changes to several other documents. The updates were made during an annual review of the LAW California F&I Library by Reynolds and the California New Car Dealers Association (CNCDA). CarolinaAA-UCNaug5.pdf 1 7/4/13 The Reynolds LAW Electric Vehicle Charging Station Disclosure
form was added to the forms library in response to California Assembly Bill 2502 that took effect on July 1. The form is required when consumers finance the purchase of charging station equipment with the purchase of an electric vehicle, in cases where that equipment is not already included by the vehicle manufacturer.
App Upgrade Makes Access Easier
AutoTec announced a new update to AuctionACCESS Mobile, which now allows dealers to manage and upload any AuctionACCESS document all through their Android or iPhone device. Dealers can now use their phoneâ€™s camera to take pictures and upload documents immediately into AuctionACCESS. Dealers can upload up to 220 AuctionACCESS document types all with the click of a button. AuctionACCESS Mobile is available for free in the iTunes store for iPhone and iPad users and in Google Play for Android users. In addition to account and document management, dealers can view C R O S S WO R D by Myles Mellor
PAGE 24 2:18 PM
updated floor plan availability, expand their auction network, and source inventory from run lists all through their smartphone device.
Avis Buys Payless
Avis Budget Group Inc. has acquired Payless Car Rental, the sixth largest car rental company in North America, for approximately $50 million in cash. Founded in 1971, Payless brings approximately 120 rental locations to Avis Budget Groupâ€™s global network in the United States, Canada, Europe and South America, including many in major airport locations. Similar to
Avis Budget Group, Payless operates with a hybrid model of corporately operated locations along with locations operated by licensees. Unlike the companyâ€™s premium Avis brand and mid-tier Budget brand, Payless focuses on the deep-value segment of car rental customers. Payless generates approximately $80 million in annual revenue. Avis Budget intends to operate Payless as a separate brand from a customer perspective, while realizing significant cost savings as a result of the transaction, primarily from lower vehicle depreciation, reduced fleet interest expense and administrative cost synergies.
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 Contributing Writers: Sheila McGrath, Jenny King Columnist: Tony Moorby Advertising: Shannon Colby, Account Manager Megan Frump, Account Manager Marie Hingst, Account Manager Circulation: Helen Thomas Production: Josie Godlewski, Media Manager Tim Montie, Graphic Designer â€”â€”â€”
Used Car News is published the first and third Monday of each month. Subscribers: We print advertisements as sent to us by auctions and other advertisers. It is not possible to verify the correctness of listed vehicles in auction ads. Most lists are partial and all lists are subject to last minute changes by auto auctions, so before travelling a long distance for a particular auto auction event, contact the auction by telephone for a fax of vehicles in the sale. Used Car News assumes no guarantees or liabilities concerning the accuracy of any advertisements. All Rights Reserved. Reproduction in any form is prohibited without the written consent of the publisher.
É&#x; É&#x; É&#x; Please submit clear, legible copy. Payments from first time advertisers must accompany the insertion order. Distribution is guaranteed by U.S. Postal Carriers. The advertising reservation deadline is 5:00 p.m. Friday, 10 days prior to the issue date. Camera ready ads must be received by noon on Monday prior to the issue date.
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August 5, 2013 ÝÛÛ
USED CAR NEWS
Site Draws Trade-Ins By Ted Craig
More dealers have been sourcing vehicles from consumers since wholesale supplies declined, buying more units off the street. Now a new tool allows them to make these purchases without leaving the office. MaxTradeIn allows consumers the ability to enter vehicle information online and receive multiple bids from dealers during a 48-hour period. A version called MaxTradeIn DealerDirect allows dealers to use the same technology to make offers to customers visiting their websites. MaxTradeIn launched Nov. 1 in Indianapolis, the company’s headquarters. It has now expanded to Louisville, Ky., Columbus, Ohio, and Cincinnati. All these are similar markets, said MaxTradeIn CEO Justin Bates. This makes the rollout easier. MaxTradeIn will reach a national scale, Bates said. He hopes that happens soon. However, the firm is taking a strategic approach to its growth. An injection of $9.5 million from venture capital firm Elevate Ventures helped speed up the expansion recently.
It helped also in attracting some top talent. MaxTradeIn recently hired Shawn Schwegman as chief operating officer. Schwegman has served as chief marketing officer for online question and answer service ChaCha and both chief technology officer and vice president of marketing for Internet retailer Overstock.com. Bates said dealers have taken to the idea quickly. Some stores have sold 16 extra cars in the first month. The idea for the site came from Peyman Rashid, the company’s president and co-founder. Rashid used to work at a dealership that would regularly receive calls from consumers who only wanted to make the drive if they knew what they would get for their trade. The online process saves time for both consumers and the dealers, who no longer have to send staff to auction as often. Bates said the system works for any dealer, regardless of size or location. He said one dealership 3040 miles out of any major metro area is doing better than some large auto groups. “What’s really important for the dealership’s success is how they embrace it,” he said.
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USED CAR NEWS 1
Canceled Concours Hurts Car Sales The decision announced earlier this year that there would be no 2013 Glenmoor Gathering at the country club outside Canton, Ohio was bad news for classic car sellers. Considered by some as one of the top concours in the country, the Glenmoor Gathering has been held at and administered by the Glenmoor Country Club. â€œThey said they were losing money on the event â€“ that they always had a loss,â€? says Bob Lichty, president of Classic Motorcar Auctions. Lichty, too, stands to lose as his
largest and most successful auction has been held at the club during the concours for â€œabout eight years.â€? He said some 55 cars sold at Glenmoor in 2012. â€œItâ€™s too late for us to replace it this year,â€? Lichty said. â€œWe are working on other ideas.â€? Classic Motorcar Auctions runs early spring sales in Akron, Ohio and Novi, Mich. Lichty also maintains a 45- to 50car inventory of collectible cars at his dealership in downtown Canton.
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August 5, 2013ÛÛÝÛÛ
USED CAR NEWS
Another DMV Goes Paperless VINtek, a provider of automotive collateral management, electronic lien and title (ELT) services and direct finance processing, reports that it assisted with the passage of ELT legislation in Nevada. ELT replaces paper automotive liens with an electronic exchange of data between the department of motor vehicles and automotive lenders. Assembly Bill 309, signed into law last month, is the first ELT legislation in the country to outsource the building and maintenance of a
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PAGE 8 - ONLINE INVENTORY
DealerMatch Offers Up Wholesale Opportunities for Dealers able to wholesale).” The way DealerMatch DealerMatch gives car does it is by partnering with dealers a site that resembles retail advertising companies, a wholesale version of Auto- like AutoTrader, where dealTrader.com by offering hun- ers have already invested. So all of the cars on Autodreds of thousands of potenTrader and other retail sites tial wholesale units. The DealerMatch website automatically show up on the DealerMatch site. There launched in March 2012. The site allows dealers are about 830,000 units. DealerMatch’s birth actuto see a new universe of potential wholesale units ally came through Manheim. Easterly worked at Autothat had previously been, in Connect, the company that all respects, invisible. AutoTrader provides retail would become AutoTrader, consumers with a selection back in the ‘90s. He later moved to Manof about 3.5 million cars at heim, where he worked any one time. But on the wholesale side, on helping dealers leverage Manhem.com – including Manheim’s digital marketOVE and Simulcast – may place. When Sandy Schwartz offer 150,000 vehicles at any took over as Manheim’s CEO given time, “Eighty-five percent of the in 2011, he assigned Eastervehicles available for sale to- ly to a special project with Photo by Jeffrey Bellant day are not at auction,” said partners of Cox Enterprises MATCHMAKER: Greg Easterly, president of DealerMatch, demonstrates how this tool opens up a larger world of Greg Easterly, DealerMatch and AutoTrader to find ways wholesale opportunities. It also offers dealers a new way to network with each other. to make the digital wholepresident. “They are on sale business grow faster. dealer lots. The result was Dealer“So what we show are all Match.2:41 PM of the vehicles on dealer 1lots7/15/13 IAG_UCN-aug5.pdf that are potentially (availContinued on page 10 By Jeffrey Bellant
NEXT ISSUE: 2013 BEST OF THE AUCTIONS
ÛÛÝ August 5, 2013
7/26/13 3:46 PM
Marc Ray General Sales Manager/Partner, Grogan’s Towne Chrysler Jeep Dodge Ram
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~ÛÝÛÛAugust 5, 2013 PlazaAAofIowa-UCN_aug5-half.pdf
USED CAR NEWS 1
Dealers with a monthly subscription to DealerMatch gain immediate access to hundreds of thousands vehicles. Promotional pricing is currently $249 monthly per rooftop for up to three people with unlimited buying and selling. Once the product officially launches, the price will jump to $495. In addition to the typical information found on a retail site, dealers also see everything from MMR and Kelley Blue Book values to the average retail price in the seller’s market, the buyer’s market and the national market. The site also offers vehicle history reports, transportation options and even an “offer advisor,” which gives buyers suggestions on what type of offer to make on a vehicle. Dealers also see how long a specific car has been on another dealer’s lot. The critical component is that through buying and selling to other dealers, the user can create a network of dealers he can do business with regularly. Easterly said one key product offered is DealShield, which allows a buyer to pay a specific fee – based on the risk connected to the car, the buyer, the seller and other factors. This provides buyers with a
– Continued from page 8
100 percent buyback guarantee. Another key is dealers are looking at frontline-ready cars, since they have the cars on a retail site to start with. A mobile app allows dealers to scan and upload cars, as well as send information, and call other dealers and offer the information that’s on the website. For non-members, the only cars that are shown are 40 days and older, which ensures dealers will only get offers on cars that have been on the lot for some time. It prevents buyers from making wholesale offers on a vehicle that the seller is still trying hard to retail. One tool for dealers allows them to create their own network of dealers by clicking on a specific dealership. With a mobile app, a dealer can simply find that person in their network, click on them and the phone starts ringing, Easterly said this is the type of dealer-to-dealer buying and selling they’ve always done, but not at this level. The site has 600 members currently, mostly in the Eastern United States, although cars are available from across the country. A national launch is slated to coincide with the 2014 National Automobile Dealers Association convention.
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~ÛÝÛÛAugust 5, 2013
USED CAR NEWS
Toyota Starts Acceleration Defense
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LOS ANGELES (AP) – Noriko Uno was afraid of driving fast, often avoiding the freeway and taking the same route every day from her Upland home to and from her family’s sushi restaurant. She had put only 10,000 miles on her 2006 Camry in about four years. So when her car unexpectedly accelerated to speeds up to 100 mph on a street with a posted limit of 30, the 66-year-old bookkeeper did everything she could to slow down, stepping on the brake pedal and pulling the emergency brake handle as she swerved to avoid other vehicles. Uno was killed when her car went onto a median and struck a telephone pole and a tree. Hers is the first so-called “bellwether” case to go to trial that could determine whether Toyota Motor Corp. should be held liable for sudden unintended acceleration in its vehicles – a claim made by motorists that plagued the Japanese automaker and led to lawsuits, settlements and recalls of millions of its cars and SUVs. Toyota has said there was no defect in Uno’s Camry. The automaker has blamed such crashes on accelerators that got stuck, floor mats that trapped the gas pedal and driver error. The company has settled some wrongful death cases and agreed to pay more than $1 billion to resolve lawsuits where owners said the value of their vehicles plummeted after Toyota’s recalls because of sudden-acceleration concerns. The Uno trial is expected to last two months. Other cases expected to go to trial in state courts this year include one in Oklahoma and another in Michigan. There are more than 80 similar cases filed in state courts. The Toyota litigation has gone on parallel tracks in state and federal court, with both sides agreeing to settlements so far. A federal judge in Orange County is dealing with wrongful death and economic loss lawsuits that have been consolidated. He’s expected to give final approval to the economic loss settle-
ment next week. Federal lawsuits contend that Toyota’s electronic throttle control system was defective and caused vehicles to surge unexpectedly. Plaintiffs’ attorneys have deposed Toyota employees, reviewed software code and pored over thousands of documents. Toyota has denied the allegation and neither the National Highway Traffic Safety Administration nor NASA found evidence of electronic problems. A trial in one of the lead cases is scheduled for November. The Uno trial will likely focus on why Toyota didn’t have a mechanism to override the accelerator if the gas and brake pedals are pressed simultaneously in Camrys sold in the U.S. The automaker put the brake override system in its European fleet, Mardirossian said. Toyota said Uno’s vehicle was equipped with a ``state-of-the-art’’ braking system and denied that any defect played a role in her death. Legal observers said Uno’s attorneys won’t necessarily have to prove what was wrong with the vehicle, but show that the accident could have been prevented with a brake override system. “If the plaintiff succeeds in convincing a jury it wasn’t human error, that it was attributed to the car, I think they have a strong case,” said Gregory Keating, a law professor at the University of Southern California. “Jurors, as drivers, are likely to believe strongly that cars shouldn’t become uncontrollable in this way.” Toyota has been successful in court before. Two years ago, a federal jury in New York found the automaker wasn’t responsible for a 2005 crash that the driver blamed on the floor mats or defects with the electronic throttle system. It was nearly four years ago when Uno died. Witnesses told police they saw Uno swerve to avoid hitting an oncoming truck, according to the lawsuit. Mardirossian said Uno was a cautious driver and neither floor mats nor driver error were to blame.
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~ÛÝÛÛAugust 5, 2013
USED CAR NEWS
Consumers Pay More for Vehicles They Like The most appealing vehicles tend to remain on dealer lots for shorter periods, command higher transaction prices, and are more likely to create owner loyalty when they are ultimately traded-in, according to the J.D. Power 2013 U.S. Automotive Performance, Execution and Layout (APEAL) Study. The APEAL Study, which serves as the industry benchmark for newvehicle appeal, has been completely redesigned for 2013. The study, now in its 18th year, has been updated to better measure the appeal of today’s vehicles, particularly with respect to the new technologies and features now being offered. Owners evaluate their vehicle across 77 attributes, which roll up into an overall APEAL score on a 1,000-point scale. The study finds that manufacturers are able to charge more for vehicles with higher APEAL. Owners of vehicles with an APEAL score of 100 points or higher than the segment average typically spend at least $1,800 more on their new vehicle than do owners of vehicles with a score of at least 100 points lower than the segment average. Similarly, vehicles with APEAL scores at least 100 points higher than the segment average remain on dealer lots an average of three
days less than vehicles with scores at least 100 points below the segment average. “Appealing vehicles are simply good news for both consumers and automakers,” said David Sargent, vice president of global automotive at J.D. Power. “Even within the same vehicle segment, consumers are willing to spend substantially more on vehicles that they find attractive, provide the performance and utility they are looking for and have wellexecuted interiors. These vehicles also sell more quickly.” Analyzing some of the results of previous years’ studies highlights the impact of APEAL on customer loyalty. Nearly two-thirds (64 percent) of owners whose vehicle achieved an APEAL score at least 100 points above the segment average repurchase the same brand the next time they shop for a new vehicle, compared with just 55 percent of those whose vehicle scored at least 100 points below the segment average. Volkswagen Group received the highest number of segment awards of all corporations included in the study for the Audi Allroad, Porsche Boxster, Porsche Cayenne, Volkswagen GTI and Volkswagen Passat. Chevrolet received the highest
number of segment awards of any brand for the Avalanche, Sonic and Volt models, all of which also received awards in 2012. Ford and Nissan brands each received two model awards: Ford, for the F-250/F-350 Super Duty and Mustang; Nissan, for the Armada and Murano. Also receiving awards were the BMW 5 Series; Buick Encore; Dodge Charger; Fiat 500; Honda Odyssey; Kia Soul; Land Rover
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Range Rover; Lexus LS; Lincoln MKZ; Mazda CX-5; and MercedesBenz SL-Class. The Land Rover Range Rover achieved the highest APEAL score of any model in the industry in 2013, which marks the first time a model outside the large premium car segment has done so. Porsche is the highest-ranked nameplate for a ninth consecutive year. Ram is the highest-ranked non-premium nameplate.
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7/29/13 10:37 AM
B:9” T:9” S:9”
DO YOU KNOW TODAY’S CUSTOMER? You may think that you can track all of your Internet customers simply through calls or emails. The truth is most shoppers don’t contact dealers at all. In fact, ONLY 33% OF CAR BUYERS CALL OR EMAIL BEFORE WALKING INTO A DEALERSHIP. That leaves millions and millions of shoppers who just walk in unannounced. Find out why there’s so much more to the story than just clicks and leads at WeWorkForYou.com/Brian.
©2013 AutoTrader.com, Inc. All Rights Reserved. “AutoTrader.com” is a registered trademark of TPI Holdings, Inc. used under exclusive license.
AT3-636 (Used Car News)
7/26/13 3:51 PM
7/29/13 8:36 AM
~ÛÝÛÛAugust 5, 2013
USED CAR NEWS
TH Consignment Dealer Kept Cash
10:00 AM START 30TH ANNIVERSARY SALE!
$20,000 IN CASH & PRIZES
A California man was convicted and sentenced for embezzling $200,000 from the sale proceeds of rare and vintage vehicles sold on consignment. John Calicchio pleaded guilty to 14 separate counts resulting from fraud at his former dealership. Calicchio was sentenced to 16 months in jail, two years of mandatory supervision, and ordered to pay $177,000 restitution. Calicchio owned and operated EuroMasters Classic Cars in Fountain Valley. Between June 2010 and October 2011, Calicchio entered
into consignment agreements with customers to sell their vintage Porsche vehicles. He sold consignment vehicles in amounts ranging from $25,000 to $47,000 and diverted the proceeds of the sales to his personal and business accounts. The victims were unable to obtain legal titles for their vehicles because the owners holding titles were never paid for the consignment sales. Calicchio closed his business in October 2011 and filed for bankruptcy in an attempt to discharge the debts owed to the owners and purchasers of vehicles he sold on consignment.
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7/26/13 3:21 PM
7/25/13 4:10 PM
~Â…Ă›Ă?Ă›Ă›August 5, 2013
USED CAR NEWS
Dealer Pleads to Floor Plan Fraud
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The tradename â€œSubaru Motors Financeâ€? and the Subaru logo are owned/licensed by Subaru of America, Inc. and are licensed to Chase Bank USA, N.A. (â€?Chase USAâ€?) and JPMorgan Chase Bank, N.A. (â€œChaseâ€?). Retail/Loan accounts are owned by either Chase or Chase USA and lease accounts are owned by Chase.
Jaguar, the Jaguar logo, and Jaguar Financial Group are trademarks of Jaguar and any use by JPMorgan Chase Bank, N.A. (â€œChaseâ€?) is under license. Land Rover, the Land Rover logo, and Land Rover Financial Group are trademarks of Land Rover and any use by Chase is under license. Retail / Loan and lease accounts are owned by Chase.
The tradename â€œMazda Capital Servicesâ€? as well as the Mazda and Mazda Capital Services logos are owned by Mazda Motor Corporation or its affiliates and are licensed to JPMorgan Chase Bank, N.A. (â€œChaseâ€?). Retail / Loan and lease accounts are owned by Chase.
ÂŠ 2013 JPMorgan Chase Bank, N.A. Member FDIC. All rights reserved. (13-038) 02/13
A used-car dealer pleaded guilty to bank fraud as the result of a floor plan scheme. Daniel Young owned and operated Auto Plaza Inc. in Billings, Mont. Auto Plaza sold used vehicles, along with new and used boats, ATVs, motorcycles, snowmobiles and recreational vehicles. Two other individuals were coowners and/or partners with Young from 2007 to 2010, but Young was the primary operator of the business. He operated the dealership and handled the day-to-day financial transactions. Auto Plaza, Inc. maintained dayto-day operations with the assistance of floor planners, including Dealer Services Corp. (now NextGear Capital) and First Interstate Bank (FIB). In approximately October of 2010, FIB canceled the $500,000 floor plan at the Auto Plaza. In approximately November 2010, Dealer Services Corp. also canceled its financing at the Auto Plaza. During the course of the investigation, it was learned that the dealership was out of trust possibly since the day it obtained its floor plan loan with FIB as well as Dealer Services Corp.; the dealership sold vehicles with unpaid liens and failed to provide new owners
titles; the dealership sold vehicles it did not pay for; the dealership sold extended warranties for vehicles that were not actually purchased from the warranty companies; and the dealership sold vehicles/boats it held on consignment and did not pay the owner. Specifically, on Aug. 1, 2008, in Billings, Young sold a 2005 Mastercraft boat with a lien held by Key Bank N.A., of Brooklyn, Ohio. When Young sold the boat at the Auto Plaza, he caused the submission of false loan documents to First Interstate Bank, in that the new purchaser was told there was no lien on the boat. First Interstate Bank believed it was obtaining a first position on the title of the boat and authorized the loan. The loan was funded by FIB and the Auto Plaza received the money for the boat purchase. In furtherance of the scheme, Young lied to a personal banker at First Interstate Bank about the payoff of the lien to Key Bank N.A. and caused the submission of a false lien release to the Montana Division of Motor Vehicles on behalf of Key Bank for the boat. Young was sentenced to a term of 18 months in prison and must pay $490,153.43 in restitution.
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7/26/13 4:00 PM
August 5, 2013ÛÛÝÛÛ~
USED CAR NEWS
RETAIL MARKETS OHIO
Dan Reel, vice president, Reel’s Auto Sales, Orwell, Ohio: “We’ve been in business 13 years. My brother, Tony, and I own the business. “We have one location. “I average about 125 vehicles in inventory. On an average month, we sell about 35 units. “June was a tough month. It was probably the worst June we’ve had in the last few years. “I’ve talked to a lot of people through the Ohio Independent Automobile Dealers Association and pretty much everyone has said that about June. “Eighty percent of our vehicles come from auctions. The other 20 percent come from local purchases and trade-ins. Local purchases would mean off the street or trade-ins. “We do a little bit of everything. We do buy-here, payhere, subprime and retail, as well. “We’re probably doing at least 65 percent buy-here, pay-here business. The rest is subprime and retail.
“Last year, we were probably 85 percent buy-here, pay-here. But we signed up with more (subprime) lenders. Because of my affiliation with the Ohio IADA, I’ve been able to meet more lenders and meet them through other dealers. It’s really opened my eyes up to the opportunities. “The average price of our vehicles is probably $6,500. “Our average model year is 2004, 2005. The average mileage is 110,000. We’ve been trending more toward subprime and retail because there aren’t as many cheaper cars and we’re forced to buy more expensive units. I can’t do a buy-here, payhere deal with someone who doesn’t have the right payment. I might as well do a (subprime) loan with a lower down payment. “We carry about 50 percent cars and 50 percent with trucks/SUVs. “We’re a rural dealership, so we try to stick more with domestics. We carry about 80 percent domestic. “We also have a full service center. We have three bays and can fit about six
Compiled by Jeffrey Bellant cars in there. We’re also a tire dealer. “The average reconditioning costs are about $700 per car. That’s crept up from last year when they were probably $550. “We also dabble in some specialty vehicles and hobby stuff, motorcycles and classic cars. “We’re starting to focus more on Internet and radio ads. “I recently sold a 2000 Jeep Cherokee for $6,995. It had 124,000 miles.”
Billy Threadgill, president, Van’s Auto Sales, Florence, S.C.: “We’ve been in business 38 years. We have one location. “We stock about 60 cars. That’s comparable to this time last year. “On average, we’re selling around 20 units per month. “(Sales) have been level, quite honestly, for the last two or three years. “We buy some of our vehicles from individuals. We buy some from auctions. We get some new-car
tdealer trades. “I also own a U-Save Car & Truck Rental franchise, so we have some of our own rental cars that we refurbish and run them back through the used-car lot. “I will say that (we’ve bought fewer) new trades because there weren’t as many new-car sales. “We do everything: retail, wholesale, buy-here, payhere and subprime. “Our largest percentage of sales has been traditional retail. That’s probably 60 to 65 percent of our business. On the wholesale side, we’ll do about five or 10 units per month. “Our average retail price is probably in the $10,000 to $12,000 range. “That figure has probably come down as we’ve transitioned into more buy-here, pay-here and subprime. “We used to be just total traditional retail. At that time, the figure would have been higher. “Our average mileage is around 80,000. I think that’s been pretty consistent over the past couple of years. But back in 2007 and 2008, we
used to have a much lower mileage vehicle. “When cars were plentiful, you could buy a lowermileage car more cheaply than now. “If you’re looking for a 3-year-old to 8-year-old car with under 100,000 miles, that stuff is bringing all of the money. “The average model year is in the 2007 to 2008 range. “We carry about 50 percent cars and 50 percent are SUVs, with about 10 percent of those being trucks. “We’ve tried to reduce our debt. In fact, I don’t think I presently have a car on floor plan. “Our inventory is about a 50/50 split between foreign and domestic vehicles. “We have a service shop. We do mostly our own vehicles and service our customers. Our average reconditioning cost on a car is between $600 and $700. “We don’t do any advertising. It’s all word-of-mouth and repeat/referral. “We recently sold a 2011 Toyota Camry with 22,000 miles on it. We sold that for $16,100.”
7/26/13 4:07 PM
Â‡Ă›Ă?Ă›Ă›August 5, 2013
USED CAR NEWS
WHOLESALE MARKETS MISSISSIPPI
Robert Sullivan, vice president and general manager, Mid-South Auto Auction, Pearl, Miss.: â€œWe just celebrated our 41st year in business this past April. â€œWe have six lanes, but weâ€™re currently running five. â€œVolumes are probably in the 450-unit to 500-unit range. â€œActually, I think weâ€™re running pretty close to what we were doing last year. â€œWe might be a little off in volumes, but the conversion rates have been considerably better. Through the spring, weâ€™re converting (more than 20 percent) above last year. â€œBut there seemed to be a shift (in late July). It looks like the market is coming back. I donâ€™t know whatâ€™s been driving that. â€œDuring this time, I was on the block to try and find out whatâ€™s going on. â€œIt just seems that the prices sellers are asking for â€“ which donâ€™t sound unreasonable â€“ appear unreasonable to the buyers, for some
reason. â€œFor example, guys that are normally high-percentage sellers arenâ€™t selling at that high percentage. When I see a dealer who comes every week who brings 10 cars and sells 10 cars â€“ then he comes in with 10 more and doesnâ€™t sell any, that isnâ€™t the sellerâ€™s doing. That has something to do with the market. â€œDepending on the time of the year, about 75 percent of our volume is dealer consignment. â€œWe have some commercial leasing companies, like Wheels, Donlen, and Emkay. â€œWe also have some local credit unions, banks and subprime lenders. â€œWe also have a GSA sale on the first Thursday of every month. Itâ€™s probably one of the larger GSA sales. â€œWeâ€™ll probably do 230 or 250 for the July sale and 250 to 275 the following month. â€œWe also have a sale for the state of Mississippi, federal agencies and a (couple of municipalities). â€œWe do a powersports/RV sale once a month and we
Compiled by Jeffrey Bellant still do a salvage sale. â€œWeâ€™re drawing between 285 to 325 dealers in the lanes. â€œOur bidders are coming from Mississippi, Arkansas, the eastern half of Louisiana and the western side of Alabama. â€œOur average price in the lanes overall is between $6,000 to $8,000. That hasnâ€™t changed that much.â€?
Charles Furr, general manager, Lubbock Auto Auction, Lubbock, Texas: â€œWeâ€™re having our 67th anniversary sale through all of August. â€œWeâ€™re the oldest independent auction in the state of Texas and weâ€™re the second oldest auction in the United States, next to Rawls Auto Auction. â€œAs part of our anniversary sale, we have a promotion through an independent dealer â€“ Scott George Motors â€“ who will give away a $10,000 cash drawing at the end of the month. â€œWe have three lanes and weâ€™re running three lanes every week.
â€œWeâ€™re members of a NCM Twenty Group (for auctions). â€œWeâ€™re probably right at 230 to 250 cars (running) per week, which is up from a year ago. â€œOur consignment is up about 20 percent. â€œConversion rates are right at 50 percent. Weâ€™re up about 10 percent compared to last year. â€œ(The reason for our success) is that weâ€™ve gotten a lot more aggressive this year. Iâ€™ve hired a couple of sales people. â€œWeâ€™ve also spent a lot of money upgrading our sales facility. â€œAs far as dealers, weâ€™ll draw somewhere around 75 to 100. â€œWeâ€™re in West Texas, so weâ€™re drawing dealers from a range of 175 to 200 miles. Weâ€™ll draw from places (in Texas) like Amarillo, Odessa and Abilene. â€œWeâ€™ll also draw a number of dealers from the eastern part of New Mexico. â€œMost dealers that I hear from are having a good year. Sales are up for them over last year.
â€œIt was pretty tough in 2008 and 2009. Then 2010 was level and 2011, 2012 picked up a little bit. â€œWeâ€™re known for fleetlease vehicles and repos. That group is our No. 1 consignor. They probably make up 50 percent of our consignment. â€œThen we also have newcar dealer trade-ins and independent dealer cars. â€œWe also sell GM Financial units. â€œWe donâ€™t have a salvage sale, but we do an in-op/ non-drivable sale on a weekly basis. There we will only have five or 10 units. My average sale price is higher than most other independents because of the percentage of fleet-lease units we have. So we probably average $8,000 per unit. â€œOver the past 60 days, the low-mileage, above-average vehicles are just bringing premium money. â€œWeâ€™ve had a real good year for the first two quarters. I donâ€™t see anything that would cause it to take a turn for the worse during the next two quarters.â€?
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7/26/13 4:23 PM
TRUE COST OF INCENTIVES (TCI) May 2013
% Change ‘12-’13
TMV does not include options
Compact Car $1,099
1 2 3 4
$14,276 $12,631 $11,846 $9,203
$13,875 $12,405 $11,758 $9,224
-2.81% -1.79% -0.74% 0.23%
1 2 3 4
$21,039 $17,214 $15,471 $12,392
TMV does not include options
TCI 1 2 3 4 5
Subcompact Car $487 $928 $13,043 $10,933 $10,508 $8,441 $6,481
$12,734 $11,092 $9,332 $8,165 $6,782
% Change ‘12-’13
$19,558 $19,287 $16,383 $11,590 $9,666
-7.04% 12.04% 5.89% -6.47% -0.10%
$18,028 $15,202 $13,140 $11,001
-4.49% -6.05% 2.63% 7.40%
Entry Sport Car $1,478 $1,979
-2.37% 1.45% -11.19% -3.27%
1 2 3 4
$18,875 $16,181 $12,803 $10,243
Midsize Car $2,381
1 2 3 4
$17,198 $15,095 $14,084 $10,860
$15,568 $14,414 $13,994 $11,346
1 2 3 4
$24,380 $22,827 $17,782 $15,067
$19,840 $22,145 $20,699 $14,913
-9.48% -4.51% -0.64% 4.48% -4.60%
-18.62% -2.99% 16.40% -1.02% -4.06%
Midrange Sport Car $2,753 $2,003
TCI 1 2 3 4 5
TCI 1 2 3 4 5
TCI 1 2 3 4 5
Large Car $4,428
$19,145 $16,375 $13,218 $11,134
$17,136 $14,725 $14,142 $11,044
-10.49% -10.08% 6.99% -0.81%
1 2 3 4
$43,921 $35,598 $31,005 $26,139
$38,974 $37,398 $29,145 $26,017
-11.26% 5.06% -6.00% -0.47% -8.60%
Premium Sport Car $3,630 $3,110
Compact Crossover SUV $1,872 $1,626 $18,037 $16,477 $14,412 $12,055
$17,456 $16,189 $14,882 $12,031
Midsize Crossover SUV $2,032 $2,210 $22,479 $20,059 $17,321 $14,814
$19,393 $20,432 $18,095 $14,191
Midsize Traditional SUV $1,339 $1,593
1 2 3 4
$26,123 $21,090 $17,836 $16,034
$23,808 $23,380 $19,074 $15,531
Large Crossover SUV $3,866 $3,703
1 2 3 4
$26,535 $21,603 $18,444 $16,578
$26,069 $21,462 $18,951 $15,608
Large Traditional SUV $3,275 $3,268
1 2 3 4
$32,830 $29,327 $23,251 $19,136
$32,992 $29,765 $26,660 $20,602
Compact Truck $1,672
-3.22% -1.75% 3.26% -0.20% -6.38%
1 2 3 4
$98,306 $69,509 $53,063 $44,829
$65,405 $80,378 $50,343 $49,563
-33.47% 15.64% -5.13% 10.56% -1.52%
Entry Luxury Car $3,030 $3,683
-13.73% 1.86% 4.47% -4.21% 4.89%
1 2 3 4
$29,511 $23,581 $21,659 $19,359
$25,500 $22,991 $21,861 $18,076
Entry Luxury SUV $1,916 $1,785
-8.86% 10.86% 6.94% -3.14% -1.46%
1 2 3 4
$32,522 $28,017 $23,552 $19,303
$29,659 $27,417 $24,444 $19,744
-8.80% -2.14% 3.79% 2.28% -4.87%
Midrange Luxury Car $3,995 $4,026
-1.76% -0.65% 2.75% -5.85% 21.36%
1 2 3 4
$36,258 $32,891 $26,150 $22,920
$35,636 $31,295 $28,070 $21,109
0.49% 1.49% 14.66% 7.66% -4.30%
1 2 3 4 5
-1.72% -4.85% 7.34% -7.90% 2.27%
Midrange Luxury SUV $1,614 $2,152
$45,056 $39,661 $35,522 $29,224
-10.63% -3.84% -7.42% -5.46%
$40,267 $38,138 $32,888 $27,629 $22,447
Premium Luxury Car $5,065 $5,347
5.63% -4.25% -0.44% 3.37% -0.56%
1 2 3 4
$73,969 $58,015 $45,354 $35,676
$57,659 $51,716 $43,772 $35,540
-22.05% -10.86% -3.49% -0.38% -8.22%
Premium Luxury SUV $2,357 $2,703
1 2 3 4
$19,326 $16,906 $14,803 $12,715
$20,415 $16,188 $14,738 $13,144
Large Truck $3,856
1 2 3 4
$26,680 $22,761 $18,847 $17,527
$26,417 $24,235 $20,666 $17,149
1 2 3 4
$56,535 $47,044 $42,305 $31,645
$47,544 $47,814 $37,647 $33,340
-0.99% 6.48% 9.65% -2.16% 13.57%
-13.59% -2.50% 0.93% -6.63% -3.03%
-15.90% 1.64% -11.01% 5.36% -6.41%
Edmunds.com’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, Edmunds.com 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 Edmunds.com 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.
7/29/13 9:57 AM
ÛÛÝÛÛÛAugust 5, 2013
USED CAR NEWS
MONTHLY DEALER CONSIGNMENT AVERAGES Avg Sale Price
$6,071 $6,119 $6,438 $6,278 $6,175 $6,103 $6,199
97,044 97,955 97,040 98,289 98,671 98,377 97,899
Fullsize Car Jan 2013 Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 YTD AVG:
$4,675 $4,660 $5,050 $4,893 $4,747 $4,582 $4,772
106,927 107,620 108,024 110,373 109,611 108,718 108,533
Luxury Car Jan 2013 Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 YTD AVG:
$12,887 $12,014 $12,953 $13,329 $13,268 $12,716 $12,870
93,187 97,287 95,440 95,165 94,329 96,518 95,259
Midsize Car Jan 2013 Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 YTD AVG:
$6,199 $6,176 $6,574 $6,521 $6,422 $6,292 $6,367
108,746 109,460 107,718 107,960 108,219 108,704 108,457
Pickup Jan 2013 Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 YTD AVG:
$12,527 $12,562 $12,703 $12,767 $12,800 $12,819 $12,693
106,237 107,740 108,128 107,731 108,419 109,282 107,886
Sports Car Jan 2013 Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 YTD AVG:
$13,027 $13,305 $14,610 $15,007 $15,062 $14,570 $14,297
79,659 81,397 78,152 75,717 76,482 78,104 78,169
SUV Jan 2013 Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 YTD AVG:
$11,576 $11,175 $11,690 $11,703 $11,665 $11,452 $11,546
102,294 104,533 103,093 103,278 103,246 103,445 103,301
Van Jan 2013 Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 YTD AVG:
$5,983 $6,056 $6,466 $6,501 $6,363 $6,426 $6,300
116,101 117,162 116,313 116,282 115,644 117,153 116,428
Compact Car Jan 2013 Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 YTD AVG:
CURRENT YTD, THROUGH JUNE 2013
SOURCE: MANHEIM CONSULTING
7/29/13 9:56 AM
August 5, 2013ÛÛÝÛÛ
USED CAR NEWS
QUIT CHASING YOUR INVENTORY! Compiled By Jeffrey Bellant
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KEEP ON ROLLING: REO Speedwagon, a band which had mulitple hits in the 1970s and ’80s, poses outside DAA Northwest during the auction’s annual Rock and Roll Sale.
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ServNet Auctions cranked up the summer with rock-and-roll sales featuring loads of cars and classic bands from the 1970s and 1980s. DAA Northwest entertained customers and their guests with its annual concert and party featuring REO Speedwagon and house band The Cronkites on July 17th. The Rock and Roll Sale, DAA’s signature promotional event, began that morning with a fleet/lease and select dealer consignment sale that featured a closed Ford Factory Sale, bikes from Harley-Davidson Financial Services and vehicles from several institutional consignors. Another event, dubbed “Brasher’s Backstage,” featured sales at Brasher’s Northwest on June 26th and at Brasher’s Portland Auto Auction on June 27th with a combined total of more than 3,000 units. Customers then converged at McMenamin’s Edgefield Amphitheater in Portland for an outdoor concert featuring the Steve Miller Band. “Brasher’s Backstage was a terrific promotion for both our auctions,” said Mark Melton, general manager at Brasher’s Northwest Auto Auction.
Group Donates to Firefighters
In response to the damage done by Hurricane Sandy last fall, the American Auto Auction Group donated a 15-passenger van to the Friends of Firefighters located in Brooklyn, N.Y. The Friends of Firefighters is a nonprofit organization started in the aftermath of the Sept. 11 attacks, with their goal being to support active and retired firefighters. New York City firefighters were instrumental in the evacuation and rescue efforts during the storm and the resulting relief efforts; the Friends of Firefighters set up distribution centers to support the firefighters and their families.
A 2010 Ford E-350 15-passenger van was donated to the Friends of Firefighters by the American Auto Auction Group and its member auctions: Auctions in Motion, Badger State Auto Auction, Charleston Auto Auction, Mid-South Auto Auction, Texas Lone Star Auto Auction and the Your Auction Auto Auctions. We invite news items and top-quality photos from our readers to be considered for “Around the Block.” Please include the name of a contact person and a telephone number. Send items and photos to: Jeffrey Bellant Mail: Used Car News, 24114 Harper Ave., St. Clair Shores, MI 48080. Fax: (586) 772-9400 e-mail: email@example.com
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USED CAR NEWS
Disconnected Jottings From Tony Moorby... â€œâ€™Tis better to travel well than to arrive,â€? a phrase probably falsely attributed to The Buddha. Iâ€™ve written before on this subject and I say â€œstuff and nonsense.â€? The prospect of travel these days doesnâ€™t fill me with any enthusiasm what-
on again. The furrowed brows of the TSA agents add an eerie creepiness while under the gaze of myriad goggle-eyed cameras. Ingratiating customer service is a thing of the past
Ć€É&#x; Ĺ´Ĺ°Ć?3,É&#x;0.,(É&#x;) É&#x;."É&#x;#(/-.,3 Ć€É&#x; ,-#(.É&#x; ,)'É&#x;ĹąĹšĹšĹˇĆ‘Ĺ˛Ĺ°Ĺ°Ĺ°É&#x;) É&#x;É&#x;É&#x; É&#x; /.)').#0 Ć€É&#x; ,0É&#x;-É&#x;Ć‰-É&#x;2/.#0É&#x;0#É&#x;É&#x; É&#x; *,-#(.É&#x;) É&#x;-&-É&#x;(É&#x;',%.#(! Ć€É&#x; )),3É&#x;Ć É&#x;--)#.-É&#x;Ĺ˛Ĺ°Ĺ°ĹśĆ‘*,-(. Ć€É&#x; 1,É&#x;."É&#x;#(!É&#x;) É&#x;)(),É&#x;3É&#x;É&#x; É&#x; Ć€É&#x; É&#x;&&É&#x;) É&#x;',
soever. It would be eminently preferable to be teleported to wherever you wanted to go. I canâ€™t remember whose tagline it was but â€œFlying the Friendly Skiesâ€? holds no such promise any more. The whole experience is surrounded by grouchy people. From the brusque and bristly curbside checker, a check-in agent who refuses to establish any kind of eye contact, to the incongruous strip-down to walk through the security screening as fellow travellers try to hold on to their pants while hopping on one foot to put shoes back
as airline staffers consider theyâ€™re doing you a favor by turning up in the first place. Most of them act as though itâ€™s their first day on the job and couldnâ€™t organize a knees-up in a nut house! I donâ€™t know what happened to the recession but airports are like beehives in summer these days. The weekday used to be reserved for the business traveller â€“ someone who knew the wrinkles, how to board early with frequent flyer miles and get an up-grade to first class. Is there such a thing anymore?
Today the thronging masses flop around the gate areas like hippies at Woodstock grabbing belongings to their sides like the Mongol hordes. By charging for luggage these days, the airlines have increased the discomfort quotient as their customers circumvent the charge by hauling everything on board with them. If you take Southwestâ€™s view, by not charging for the first piece of luggage, people check them, board airplanes quickly and efficiently and Southwest can turn a plane at a gate in 40 minutes, getting an average of an extra flight in for each airplane per day for the entire fleet. I would suggest that the othersâ€™ efforts to increase revenues by charging for luggage have reduced efficiencies and increased expenses while putting their customers to greater inconvenience. It wouldnâ€™t be so bad if the overhead compartments allowed sufficient room to stash the increased load. Instead youâ€™re subjected to a raft of abuse from the cabin staff as you try to stow half your worldly goods into something the size of a mailbox. Once upon a time, airlines
C R O S S WO R D
used to board the planes filling the rear seats first â€“ a very sensible arrangement, in my view. Now boarding is something akin to a rugby scrum with the attendant personal assaults using the aforementioned carry-on weaponry. If youâ€™re already sitting in an aisle seat then you run the gauntlet of luggage left hooks, briefcase batteries and anatomical assaults of all kinds. I remember back in the â€˜80s, Republic Airlines used to fly from Nashville to Detroit using De Havilland DC 9s, an admittedly noisy aircraft even in those days, but the interiors were spacious with art deco styled armchairs â€“ yes, armchairs â€“ spaced adequately to stretch your legs without even touching the seat in front. The ashtrays were superbly engineered into the rounded arm of the chair and one could luxuriantly smoke at leisure without incurring the wrath
of fellow passengers. As a nonsmoker nowadays itâ€™s inconceivable that we ever did that. The air hostesses (notice I didnâ€™t say cabin staff ) were attractive, cheerful, attentive and served breakfast, lunch or dinner depending on the time of day. In contrast, a recent â€œpuddle-jumperâ€? flight on US Air rendered an unkempt, greyhaired harridan who could have easily flown alongside the plane on her broomstick. Instead she shoehorned us into our confinement while we taxied interminably to the runway. Seat configurations now provide something of a health hazard, being so close â€“ Iâ€™ve had intimate relations demanding less proximity! I once spurned Internet meetings as a fad. Now itâ€™s a much-preferred way to get together for me, the closest thing yet to teleporting. Beam me up!
To see past columns from Tony Moorby, visit www.usedcarnews.com/ columnists/tony-moorby
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By Miles Mellor
Across 1. Kind of warranty 6. Chevy hybrid 10. Sirius, for one 12. Bottom area of a vehicle 13. Driverâ€™s compartment 15. Chevy SUV 17. Outfit 18. Motor 19. Honda minivan 23. Open style of car seating four or more, popular in the 1920s
24. Keeps going for over 200,000 miles, for example 26. Car, affectionately 28. It seals the deal 29. â€œLetâ€™s shake on it!â€? 32. __ and behold 33. Manufactured 35. Mitsubishi sedan 36. Well-liked 37. Apt name for a lawyer? 38. Govt. property overseer 39. Ford crossover 40. Pen filler 41. Hardship
1. 2. 3. 4. 5.
Cayman, for one Roll of bills Kia compact VW minivan Company that owns Jaguar is based here 7. They measure the miles 8. Owners of the Lexus marque 9. F-150â€™s 11. Required to buy a car 14. Veyron for example 15. Proclaim 16. Her partner 20. Pad 21. Statistic in a used-car ad 22. Toyota pickup 24. One-time Acura model
Answers to the 7/15/13 puzzle 1
25. Kia minivan 27. Laughter sound 30. Lotus car model 31. Another Lotus 34. Blu-ray buy 37. Camry ___ 38. Green light
N I P
A S A T
Answers to this puzzle in the 8/19/13 issue. Call 1.800.794.0760 for a FREE subscription.
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August 5, 2013Ă›Ă›Ă?Ă›Ă›Â‚
USED CAR NEWS
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ÂƒĂ›Ă?Ă›Ă›August 5, 2013
USED CAR NEWS
Used Car Leasing Trumps BHPH for Profits!
FINANCE & WARRANTY SPOTLIGHT
For the first time since used car leasing was invented 23 years ago, a side by side comparison has been performed showing the profit difference compared to buy-here, pay-here. Not surprising, considering the tax implications of buy-here, pay-here, the results were clearly in favor of used car leasing. The analysis was performed by Northland Auto Enterprises, Inc., the original founder of Renâ€™Tâ€™OwnÂŽ and Leaseâ€™Tâ€™OwnÂŽ using 2011 national averages as published by NABD-NCM
The net profit difference is primarily due to Leaseâ€™Tâ€™OwnÂŽâ€™s tax advantages. Ć€É&#x;.É&#x;."É&#x;(É&#x;) É&#x;3,É&#x;)(ĹťÉ&#x;."É&#x;/3Ć? here, pay-here model profit is only $55,920, which isnâ€™t much to buy cars for the next year compared to Leaseâ€™Tâ€™OwnÂŽâ€™s profit of $224,090. Ć€É&#x; "É&#x; (.É&#x; *,)ĹŚ.É&#x; ĹŚ!/,É&#x; #-É&#x; ),É&#x; deducting the cost of bankruptcies and repossessions. For buy-here, pay-here, the national default rate is -&#!".&3É&#x;)0,É&#x;ĹłĹ°ĆžĹşÉ&#x;#."É&#x; -Ć‰Ć‰1(Ć˘É&#x; there are no repossessions since the dealer remains the titled owner of
Associates. The comparison was conservative, figuring 10 deals per month for 12 months and used the time frame of January thru December. The results were undeniably in favor of Leaseâ€™Tâ€™OwnÂŽ. A few things to point out in the comparison: É&#x;Ć€É&#x;#."É&#x;/3Ć?",ĹťÉ&#x;*3Ć?",É&#x;3)/É&#x;*3É&#x; taxes on the entire contract at the end ) É&#x;."É&#x;ĹŚ,-.É&#x;3,ĹşÉ&#x;#."É&#x; -Ć‰Ć‰1(Ć˘É&#x; you are paying federal and state income taxes on only the payments received.
the vehicle. There are also federal statute protections to prevent leased cars from being included in bankruptcies. Therefore, the net profit shown for Leaseâ€™Tâ€™OwnÂŽ reflects an accurate amount. This was a very interesting and eye-opening comparison. Contact Northland Auto Enterprises, Inc. at 800-879-3433 to review the analysis in detail. They will also customize the analysis using your specific stateâ€™s tax rates rather than an average.
AutoSave .............................................................. 34 Car Financial Services ............................. 32 & 33 Credit Acceptance Corporation ............... 30 & 34 Go Financial .......................................................... 38 Gordon Howard/Passtime ........................ 36 & 37 GWC Warranty Corporation ...................... 32 & 35 iMetrik Solutions ....................................... 30 & 31 NextGear Capital ........................................ 29 & 35 Northland .................................................... 26 & 28 Sensible Auto Lending/Leasing ............... 32 & 36 Spireon ........................................................ 27 & 28 United Auto Credit .............................................. 33 Vehicle Acceptance Corporation ............ 26 & 38
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You Are Our Highest Priority. Customer service is more than just a department at GoldStar GPS. It’s a personal commitment for my team. With over 25 years of experience, my team strives to provide the exceptional service you deserve. We want to make sure you get immediate answers to your questions, personalized support and that you have a great experience with our products and services. To ensure we are delivering on our commitment to you, we’ve tripled our customer support team. We want to make sure you’ll always reach a real person with real answers, 24/7. We’ve also created a dedicated order desk and a concierge hotline to expedite your requests and needs. Plus, our industryfirst Express Services provides you with nationwide access to our certified installers. So please let me know, how we can help you today?
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Five Qualities to Look For When Shopping GPS Systems Increasing numbers of dealers and members of the automotive finance industry are embracing GPS tracking to protect their assets, expand their loan portfolios, reach a broader range of customers, and reduce their risk. As a result, there is an expanding range of GPS tracking systems and solution providers to choose from. The question remains: how do you decide which system and provider are right for you? Which one will deliver measurable results while ensuring a rapid return on your investment? When comparing systems, you’ll want to look at the technology: is it proven, is it patented, does it have the appropriate certifications and licenses, and will it support your needs? There’s much more than the technology behind it. When shopping for a GPS tracking system, be sure to look for solution providers that have perfected the basics. Those basics include: Making sure the provider has an established track record of proven sales and results; the distribution capacity to deliver the product you need; reponsive, customer-centric service from a dedicated customer account team; leadership that provides
key industry insights to give you an edge; and a commitment to ongoing innovation. Proof Is in the Sales You shouldn’t be the first customer to buy the system. Ask the provider what generation their product is, and how many units they sold last year. This will tell you if the product has been thoroughly road-tested by actual customers, or if it’s made by a fly-by-night company who might not be there to support you a year from now. Product on Demand Your GPS tracking system should be able to serve up your vehicle data on demand. The provider should be able to deliver your product on demand as well. Look for a solution provider that has a warehouse with extensive inventory so that you can get what you need right away. Ask if the provider offers a dedicated order hotline, same-day shipping as well as national coverage. The Customer Comes First Beware the vendor who abandons you after the sale, leaving you to install, manage and troubleshoot your GPS tracking devices all by yourself. Instead, look for a true solution
provider who works with you to understand your needs before the sale; who offers nationwide professional installation services by certified installers; who is readily available to help you diagnose and remedy any issues that may arise; who trains you on how to use the system; and who provides ongoing support long after installation is done. Ask the provider if they have a dedicated customer service line available 24/7. If they don’t have these basics in place, consider going elsewhere for your GPS vehicle tracking system. Look for Industry Leadership Many GPS tracking system providers have minimal experience in the automotive finance industry, which means they have little industry insight to share with their customers. Look for a solution provider who offers specific and deep experience in automotive finance, from the leadership team to the sales team to the customer account representative. A true solutions provider will add value by connecting you to a wealth of knowledge and best practices — from tips on how to select a GPS tracking system, to white papers on the current and future trends in automotive finance.
Choose a provider who is an industry thought-leader. Driving Innovation We come back to the original factor in determining your decision: the technology. Look for a solution provider whose corporate culture embraces innovation. They should be investing significantly in research and development to make sure their products are evolving to meet your rapidly changing needs, while taking advantage of emerging technologies. They should also actively involve you in the process — soliciting your input on the features and functionality you’d like to see in the system. Find out if the provider bundles their technology into flexible packages designed to meet the varying needs and budgets of their customers. It’s All About the Basics Now you have the five basic qualities to look for when shopping for a GPS vehicle tracking system and provider. To learn more about choosing a GPS tracking solution designed specifically for the automotive finance industry, visit www.GoldStarGPS.com.
Side by Side Income Comparison! BHPH vs Northland’s Lease’T’Own® Buy-Here-Pay-Here Don’t Forget to deduct the cost of Bankruptcies & Repossessions from this total!
End of Year 1 End of Contract Cost of Cars NET PROFIT
$55,920 End of Year 1
$846,370 End of Contract
- $570,360 Cost of Cars $276,010 NET PROFIT
Analysis Assumptions: 10 cars per month for 12 months (Jan—Dec). The average cost per vehicle is $4,753.00. The average weekly payment is $86.00 per week . The average length of contract is 31 months Taken from the National averages for 2011. SOURCE: NADB-NCM
Get your “No Obligation” Profit Analysis based on your Federal and State Income Tax rates.
- $570,360 $380,570
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Tips for Choosing the Right GPS Fulfillment Option By Mark Foster – Director of Sales these devices are becomes a big job. iMetrik Global Another consideration is what happens when a dealer has installed Indirect lenders looking at utilizing a device and the contract is returned. payment devices often focus most Many lenders experience a disapheavily on the compliance and an- pearing device at this point as the ticipated ROI aspects of the program. dealer has little incentive to pull the Once up and running however, the unit back off the vehicle. Having 10% focus shifts to managing the in- - 20% of your units disappear makes ventory and fulfillment side of the up a significant cost component of program. This article will examine a program. three popular fulfillment options available for finance companies as they attempt to implement and manage device use in their business. Option one is for the finance company to purchase, stock and then distribute the units. The primary benefit of this method is the lender controls the entire distribution chain. As a deal is approved the finance company can either overnight a device or have their local representative drop one Option two is to utilize the GPS off. This method virtually eliminates vendor’s local representative as a adverse selection concerns as the distribution resource. When approvfinance company provides a device ing a deal the lender simply directs quickly, free of charge, and with few the dealer to contact the approprihassles to the dealer. ate local vendor to obtain a device. This method also presents a few Under this method it makes sense challenges. Finance companies do to have a dealer pay for a device dinot handle physical inventories and rectly and then be reimbursed with are generally ill equipped to do so. funding proceeds. Over time a lender will end up with In a scenario where the dealer makes a large number of devices. the initial purchase, the lender is no Keeping track of exactly where all longer required to track inventory.
Since the dealer paid for the device, they own it and are responsible for it until the lender purchases and transfers control during the funding process. Under this scenario the lender also carries no exposure when a contract is returned. This option can be attractive if your vendor’s coverage levels by market are acceptable. Local representatives who are incentivized to provide a high level
of service will do things like run a device to a dealer immediately in a pinch. Real time device delivery is a very nice option. The biggest challenge under this method is relying on an outside vendor for a critical step in your process. Even if your vendor’s salespeople prove reliable, what happens when someone is sick or on vacation? Another consideration is whether or not you have a program that can be managed as you expand into new
geographic areas. Option three is to utilize an online shopping cart. In many cases your GPS vendor will host an online cart to be linked directly from your homepage. The lender can then refer the dealer to the shopping cart where devices are purchased and overnighted to them directly. This method eliminates the need for physical inventory, removes human error and availability concerns, and allows the finance company to use devices in any geographic area. Since the dealer knows they will be receiving the device the following day, most finance companies do not experience significant adverse selection. A shopping cart can provide a very good experience for most lenders. However, as good as an online cart can be, it will never be able to drive a device over to an important dealer at a moments notice. Lenders focusing on smaller geographic areas may find having physical control over devices beneficial. Larger lenders with needs that span multiple markets may find some of the vendor supplied resources, whether physical or online, more fitting. The best method will ultimately vary based on the needs of each individual finance company operation.
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Â€Ă›Ă?Ă›Ă›August 5, 2013
USED CAR NEWS
The Confidence, Freedom and Reliability Your Customers Seek As a dealer, you understand that purchasing a car is a big decision for your customers. They spend a significant amount of time researching what vehicle best fits their lifestyle and falls within their budget. They rely on the expertise of your staff to guide them to the vehicle that best suits their needs. Inevitably, there are times that no matter how perfect a vehicle may be, customers occasionally lack the confidence to make the purchase. This happens in part because customers want a car they enjoy but ultimately need a car thatâ€™s reliable and worry- free. By partnering with an industry-leading vehicle service contract provider, you can address your customersâ€™ desire for confidence, freedom and reliability and as a result, sell more cars. A quality vehicle service contract allows customers to buy with confidence knowing theyâ€™re protected from unexpected repair costs with day one, mile one coverage. A vehicle service contract also provides your customers with the freedom to enjoy their purchase with no worries. The right partner will offer your customers 24/7 roadside assistance and nationwide service facilities to ensure that they are able to drive anywhere worry-free. Furthermore, knowing that in the unlikely event of a claim, it will be
handled smoothly and paid promptly. Getting your customers back on the road quickly provides the reliability you both need. You deserve a partner that is reliable, frees you from unnecessary headaches and gives you the confidence that your customers will be covered. Customers seek confidence, freedom and reliability when purchasing a car. Be sure that you partner with a vehicle service contract provider that allows you to offer your customers what they want. GWC Warranty For almost 20 years, GWC Warranty has been the industry-leading provider of vehicle service contracts. We have been a trusted partner to over 20,000 independent and franchise dealers nationwide. To date GWC has paid over $300 million in claims. To learn more about how we can offer you and your customers confidence, freedom and reliability, visit us at GWCwarranty.com.
Sensible: The Home of the Flex Lease
Dependable, consistent, responsive, full spectrum: that is the Sensible way. Sensible Auto Lending & Sensible Auto Leasing is the Home of the FlexLease. After the crash of the sub-prime residential mortgage industry, money has flowed into the sub-prime auto lending sector at historic levels. There have been many new players and much more aggressive pricing. In recent months, the industry has reported that the effects of overheated competition are starting to show in loan performance.
Ć€É&#x;-*)(-#0(--É&#x;Ć‘É&#x;(-#&É&#x;)Ĺ¤,-É&#x; fast funding for properly completed deals (sometimes on the same day). Ć€É&#x;*(#&#.3É&#x;Ć‘É&#x;(-#&É&#x;0&/-É&#x; its dealer network and always honors its commitments. Ć€É&#x;/&&É&#x;*.,/'É&#x; (#(!É&#x;Ć‘É&#x;(-#&É&#x; has many non-recourse options in the sub-prime market. The lending program offers loans with dealer advances primarily of $11,000 or less on any make or mileage of vehicle, regardless of the /-.)',Ć‰-É&#x;,#.ĹşÉ&#x;É&#x; The FlexLease program accepts sub-
This has caused many companies to scale back their underwriting practices. Dealerships choose to work with Sensible Auto Lending for many reasons: Ć€É&#x;)(-#-.(3É&#x;Ć‘É&#x;(-#&Ć‰-É&#x;*,##(!É&#x;(É&#x; underwriting are designed to remain consistent during any financial climate, so a dealer knows what to expect. Ć€É&#x;*É&#x; Ć‘É&#x; (-#&É&#x; )Ĺ¤,-É&#x; #(-.(.É&#x; approvals. The best time for a dealer to consummate a deal is when the customer is prepared to buy. By going with Sensible, a dealer )-(Ć‰.É&#x; ,#-%É&#x; &)-#(!É&#x; É&#x; /-.)',É&#x; .)É&#x; another dealer.
prime customers with credit scores as low as 425. The program is for vehicles under five years of age with 80,000 miles or less. The advance to the dealer is up to $20,000. FlexLease offers aggressive loan terms with a low balloon at lease maturity. This process makes for affordable payments and better quality vehicles for customers who have felt they have limited choices. Vi s i t u s o n l i n e a t w w w. sensibleautolending.com under the dealer tab or call us @ 888-696-4140.
7/26/13 8:35 AM
August 5, 2013ÛÛÝÛÛ
USED CAR NEWS
Customized Program Provides Capital All dealers know the biggest hurdle to entry into the buy-here, pay-here industry is the need for capital. Whether for the purchase of inventory, the financing of customers, or for operational cash flow, capital is number one on every dealer’s list. Access to capital remains more difficult for the buy-here, pay-here industry. CAR Financial Services continues to support dealers’ short and long term capital need, offering a comprehensive suite of services designed to support buy-here, payhere dealers through the infusion of capital. Whether you are new to the business or looking to expand your current buy-here, pay-here operations, CAR Financial Services can design a program to meet your needs. These programs include: ƀɟ Bulk purchasing of both retail and lease receivables ƀɟ Purchasing of payment streams to meet short term cash needs ƀɟ Servicing of portfolios for dealers and finance companies ƀɟ Floorplans for the buy-here, pay-here industry, including a seamless floorplan to retail program ƀɟ Point of sale options for buyhere, pay-here dealers using CAR’s capital to establish your portfolio CAR Financial Services has a proven
track record of over twenty years in the auto finance industry. They can help you survive these difficult economic times with a customized purchase/service program that meets your needs while providing quality service through a single dealer point of contact located near your dealership. CAR Financial strives to understand your day-to-day business so that they can structure a program designed to meet your long term goals and objectives. Whether purchasing a stream of payments, purchasing all or part of your accounts outright, or simply servicing your buy-here, pay-here portfolio, the trusted professionals at CAR Financial are interested in working with you to meet your dealership needs. CAR Financial operates in forty-five states and is continually evolving to meet the ever changing needs of the buy-here, pay-here market. Interested in more information on CAR Financial Services’ programs and services? Go to www.carfinancial.com or call 877-570-8857.
Driven to Make a Differencesm Looking back 20 years, the sub-prime automotive finance market has seen tremendous change – mostly in the form of lenders closing their doors in the face of economic downturn. Several sub-prime lenders survived the economic perils of recent years but none has emerged stronger than United Auto Credit.
deal these days. With four buying centers spread geographically across the country, United Auto Credit welcomes calls from its dealers – coast to coast. Dealers don’t have to wait just because their local office is closed, or their buyer has gone home for the day. Every United Auto Credit buyer is trained to handle the dealers’ needs – whether or not it is their own dealer calling in. Financing $7,000 to $15,000 loans firstname.lastname@example.org on four to seven year old vehicles for customers with FICO scores www.unitedautocredit.net from the low 500’s to the low 600’s (866)504-2133 is the core of United Auto Credit’s business. However, the company A leading force in the sub-prime has developed programs to finance market, United Auto Credit balances up to $20,000 for qualified buyers. growth with its common sense “We work very hard to understand approach to lending, ensuring long- the needs of our dealers and are term delivery of value to over 4,000 constantly reviewing the programs dealers in 45 states and counting. and products we offer to meet those At the same time, the company needs and deliver value”, said Vice continues to embrace every President of Sales and Marketing technological advantage available to Jourdan St. Germaine. ensure the fastest and most efficient Make no mistake – United Auto delivery of services possible for its Credit’s plan for long-term growth dealers. According to President is based on providing value through and CEO Jim Vagim, “We are a the development of industry leading very tech-heavy shop with a strong programs and products, providing commitment to the human side of best-in-class service for its dealers. our decision making.” The company’s motto is “Driven to Not many lenders – prime or sub- Make a Differencesm.” They’re doing prime – offer dealers the opportunity just that, and dealers are taking to call their buyer and re-hash a notice.
We are a national non-prime to near-prime indirect automotive lender dedicated to helping its dealer partners sell more cars, make more money and get their deals funded fast. Combining cutting edge technology and common sense, United Auto Credit programs produce approvals based on customer qualifications rather than FICO driven scoring models.
REAL PEOPLE MAKING REAL DECISIONS.
BECOME A DEALER PARTNER TODAY! 1.866.504.2133 Email us | email@example.com facebook.com/unitedautocredit
7/26/13 8:35 AM
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notes from the line of credit to their bulk purchasing team. Your selling process is completed and funded in days instead of weeks and all without the aggravation of organizing and shipping loan files from your lender to a2013Ă› separate buyer. Â€Â Ă›Ă?Ă›8m_mklĂ›Â‚, â€œThey do both ends of the spectrum,â€? said Ron Janbash of Auto Masters in
my customers as well as I do.â€? When searching for the right lender, select a company with a demonstrated ability to offer lines of credit, bulk acquisitions, and overwhelming customer support. Spartan Financial Partners offers the whole package and is a win-win solution for everyone involved.
Autosave and E-Credit Interested in Buy-Here, Pay-Here? Express Products Add to Thereâ€™s a Better Way - Credit Acceptance! Uncertainty still looms in todayâ€™s An important benefit is an Your Bottom Line economy with 46% of consumers opportunity to improve credit
Autosave, the Original 5 year / 100,000 Mile Warranty Company, has over 180 agents throughout the U.S. and Canada that represent and sell our industry leading programs and platforms to dealers .
Cash Back Programâ€? where enrolled sales personnel at Autosave dealers receive a cash reward for their sales on a monthly basis. Autosaveâ€™s sister company E-Credit Express (www.ecreditexpress.com) has TM
Autosave has added 1 & 3 year warranty terms with additional coverage for air conditioning, electrical and seals and gaskets, making a larger profit center for the dealer. The competitive pricing structure of these warranty products, E-contracting and the ability to accept online payments from dealers has made Autosave the industry leader in this market. Claims payments are made electronically to the repair facility. All Autosave warranty programs include E-contracting, marketing materials, interior signage and outdoor banners for
products that make all dealers red flag and OFAC compliant. With E-Credits GUARANTEED electronic forms compliance in all 50 states and state specific E-forms that include all required initials and signatures â€“ without the costly need for electronic pads or pens. E-Creditâ€™s electronic forms are 100% compliant in every jurisdiction â€“ with a million dollar guarantee! E-Credit warrants that each deal submitted through its platform is 100% compliant each time a deal is submitted to a lender â€“ no more deals kicked back â€“ INCREASE YOUR SALES IMMEDIATLEY! Autosave supports our dealers in all facets of the industry with warranty product training, program the dealer to display. training, claims and customer relations. Autosave is the industry leader in Call 800-684-1175 for more informadealer sales rewards with the â€œDealer tion on these Programs.
struggling to establish credit or rehabilitate poor credit (Equifax, March 2012). Credit Acceptance, a proven leader in automotive financing since 1972, allows dealers to sell to consumers regardless of their credit history. It has all the benefits of buy-here, payhere, with none of the issues. Credit Acceptance eliminates the need for the large capital outlays necessary for buy-here, pay-here, providing a business model that maximizes ROI. 24/7 technology approves and processes deals. Dealers benefit from sales to consumers who otherwise could not obtain financing; from repeat and referral sales; and from responses to credit-challenged advertisements.
â€œWithout the Portfolio Profit from Credit Acceptance, we may not be here today. Business is now back on track and we just surpassed the $2 million mark in Portfolio Profit received from our Credit Acceptance contracts.â€?
- Lavon Schwartz, owner of KCâ€™s Budget Auto, Kalamazoo, MI
Without Credit Acceptance, consumers are often unable to purchase a reliable vehicle.
scores through on-time payments, hopefully moving on to traditional sources of financing in the future. â€œNobody would extend me any credit after my bankruptcy â€“ until I found a Credit Acceptance dealer. I never missed a payment and I was able to buy a new car and a house!â€? -Janet S., Credit Acceptance Consumer
Credit Acceptance provides dealerpartners nationwide with: Ć€É&#x;/*,#'É&#x;ĹŚ((#(!É&#x;1#."É&#x;/(*,&leled funding for buy-here, pay-here consumers, giving dealers a cashpositive position and a share in total contract profits. Funding is straightforward and fast. Ć€É&#x;)'*,"(-#0É&#x; )&&.#)(É&#x; '(agement, managing all aspects of the collection process. Ć€É&#x;(É&#x;2#.É&#x;-.,.!3ĹťÉ&#x;*,)0##(!É&#x;&,Ć? partners with money from collections in retirement. Ć€É&#x; (,-É&#x; *,)ĹŚ.-É&#x; .",)/!"É&#x; ."É&#x; ability to market Guaranteed Credit Approval*, increasing floor traffic, sales, and profits. Visit www.creditacceptance.com (click on â€˜Become a Dealerâ€™ under Dealers) or call 1-800-873-0512. *Some states prohibit the use of â€œGuaranteed Credit Approval.â€? Alternate marketing materials are available.
TM 10/26/12 4:49 PM
1 - 3 - 5 YEAR WARRANTIES ADDITIONAL COVERAGES AIR CONDITIONING ELECTRICAL SEALS & GASKETS CHECK OUT ECREDITEXPRESS.com Guaranteed Form Compliance in ALL States WWW.AUTOSAVE.COM
7/26/13 10:47 AM
August 5, 2013ÛÛÝÛÛ
USED CAR NEWS
Maximize Your Floor Planning Dollars By Garrett Jorewicz, Regional Director your business all come into the picture NextGear Capital and become increasingly more important in your effort to acquire more floor The automotive industry is unique planning dollars. in that it is one of the few where commercial loans are abundant and relaLenders have perfected the art of tively easy to qualify for. Whether you managing risk. It is crucial that you are just starting out or looking to shift closely adhere to your lender’s terms your business into the next gear, it is and conditions. NSF’s, late curtailments, extremely likely that you will be able slow payoffs, and bad audits will into find the capital you need to stock evitably prevent you from gaining the your dealership. additional buying power you need to grow your business. Floor Plan 101: The Basics First and foremost, to qualify for a Additionally, substantial business floor plan line of credit, you need to equity exhibits an enhanced capacity have established credit. Bad credit and to repay debt. To a floor plan company, “hiccups” on your credit report aren’t inventory that is owned outright is always deal-breakers, but they will viewed similarly to cash, and is a good likely reduce the amount you qualify indicator of the viability of your operafor and may have an adverse impact tion. The more equity you have, the on your pricing structure. The good lower the perceived risk. news is that over time, and with good performance, you can eventually over- Bank Statements come these setbacks. Floor plan companies will primarily look for three things on your bank stateGrowing Your Business ments: NSF activity, average balance, If you are looking to grow your business and overall cash flow. through increasing or adding a floor plan line of credit, there are several Personal Financial Statement other items that will factor into the Cash, 401k, IRA, CD’s, bonds, etc. lending process. are all desirable elements to have in Trade references, business credit, your portfolio, as long as they are acequity, cash, and the overall health of cessible or able to be leveraged for
800·482·7357 x767 | GWCwarranty.com
loans. This is ideal because it demonstrates that you have reserves in place to “weather the storm” should you encounter a few bad months or an unforeseen industry shift.
is when it comes to setting a floor plan credit limit. Additionally, this statement shines a spotlight on the overall sophistication of the operation. For instance, if you are generating additional revenues from F & I products A word of caution: some dealer prin- and repairs, for instance, that will all cipals place an inordinate value on be itemized on this statement. the shares of their dealership within their personal financial statement. Balance Sheet Although this may beef up your net Simply put, the less you OWE, and worth on paper, this will probably not the more you OWN, the lower the be taken into consideration by a floor credit risk. Again, banks like to lend plan lender. when the probability of repayment is the highest. High debt combined You may also want to avoid having with minimal assets equals more risk. all or a majority of your assets in the form of equities against mortgaged All of this ties into the overall vireal estate. ability of your operation. A thriving Banks have become skeptical of business should be building equity real estate equity given the recent while reducing debt. real estate crisis. High dollar homes A thriving dealer principal should be and commercial properties are slow building net worth, not acquiring debt to move and hard to appraise. Don’t to keep their business above water. If over-estimate your real estate equity on your business isn’t building and growing, your financial statements. Be realistic. then you probably shouldn’t be seeking Having minimally leveraged or free more floor plan dollars. and clear real assets should comfort More flooring won’t turn around a a lender to some extent. failing business model. Instead, focus on perfecting your operation. Income Statements However, if your business is building The income statement can be quite equity and turning a profit, having some revealing, and often is used in part to additional buying power can surely determine what the true business need help you shift to the next gear!
At GWC, we cover the entire USA from coast to coast. There are so many good reasons to ride with GWC: COVERAGE: With over 800,000 claims totaling $300,000,000 paid to date, you can rest easy knowing your customers will be covered
Maine PortlandOregon egon Portland
CONFIDENCE: We’ve been preserving peace of mind for over 1.4 Million drivers since 1995
ParisIowa wa ParisTexas
TRUST: We’re a valued partner of over 20,000 franchise and independent dealers nationwide for more than 18 years and counting SUPPORT: We’re backed by companies rated A or A- (Excellent) by A.M. Best STRENGTH: Owned by Stone Point Capital, a Connecticut based private equity firm with over $9 Billion under management JUST GO!: You can be assured your customers will have “No Worries. Just Drive”.
7/26/13 8:34 AM
PT SOS: PassTimeâ€™s New Tamper Detection System If you are using or have looked at using GPS tracking or collections technology devices, you have likely thought about tampering. You spend $100-$200 per device to help protect your assets. If a customer does not make a payment, and you cannot get in touch with them, you begin to worry about them tampering with the device or removing it completely. While, based upon percentages, the likelihood of a customer tampering with the device is very small, when it does happen, it can have a big impact. Technology providers have attempted to combat this issue with decoy devices or more often, with back-up batteries. The idea behind a back-up battery is fairly straightforward: if a device is removed from the vehicle, the back-up battery would power the device long enough to send a message that the device had been tampered with and removed. The lender who receives the message can then take action based upon the fact that the device has been removed. The concept is great...the back-up battery is not. Generally, back-up batteries have proven to be unreliable in this type of
application. The extreme environmental factors that vehicles are exposed to, variations in high and low temperatures, and the average device being installed for several years have made back-up batteries an inferior solution. PassTime, acutely aware of the need of a tamper detection, but also aware of the drawbacks of a back-up battery designed a solution that would address both problems. PT SOS: PassTimeâ€™s all new tamper detection system is available now in
battery has been disconnected or the device taken out of the vehicle. Through advanced technology and an innovate design, PassTime devices include this SOS notification feature without the need for a back-up battery. The PT SOS feature comes as the newest addition to PassTimeâ€™s tamper detection systems. The SOS notification informs customers when a device has been removed from a vehicle or power removed from the vehicleâ€™s battery.
its Elite and PassTime GPS products. Using this feature, dealers and lenders can be notified immediately in the event that the device is removed from power, typically indicating that the
Other tamper detection notifications include Starter Tamper which can help identify if the starter wire or starter interrupt functionality of the device has been bypassed or removed.
Additionally, Time Tamper features indicate if the timing is out of sync between the device and the GPS satellite, indicating possible device or battery tampering. â€œPassTime has always been dedicated to providing innovative features to our customers. PT SOS is a solution to the tamper problem, without the use of an unreliable back-up battery. â€œThis solution is revolutionary and is a great value-added benefit to our customers,â€? stated Chris Macheca, PassTimeâ€™s executive vice president of operations. The PT SOS and tamper detection system, combined with PassTimeâ€™s patented Geo-Fence technology, 24/7 live customer care, innovative TowDetection features and high-quality products are a few of the reasons that the company has been an industry leader for more than twenty years. New Elite and PassTime GPS devices are currently shipping with the PT SOS feature included for no additional charge. To learn more about PT SOS, PassTimeâ€™s new tamper detection feature, contact PassTime at 877-727-7846 or visit us at www.passtimeusa.com.
Sensible Auto Leasing Home of the FlexLease
Used Car Leasing
Sub Prime scores as low as 450 t2008 and newer 80,000 miles maximum tUp to 60 month terms t Non-Recourse No Sales Tax obligation for Dealer (most states) Up to $20,000 Net Dealer Check tLow Discount FREE Portal Provided â€“ No Monthly Cost SFDFJWFPOMJOFBQQSPWBMT FMFDUSPOJDEPDVNFOUBUJPO
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NO Mileage Restriction Minimum Income $800/month ALL Credit Approved Repossessions | Foreclosure | Discharged Bankruptcy
Up to $12,000 Net Dealer Check
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Currently doing business in: CT, FL, SC, NC, IN, AL, VA Coming Soon: MA, RI, PA, OH
Currently doing business in: CT, OH, FL, NC, SC Coming Soon: MA, RI, PA, VA
Changing the SubPrime Auto Market
â€œIF IT MAKES SENSE, MAKE IT SENSIBLEâ€? Sensible Auto Leasing Sensible Auto Lending PO Box 552, Old Saybrook, CT 06475 | 888-696-4140 | www.sensibleautoleasing.com PO Box 552, Old Saybrook, CT 06475 | 888-696-4140 | www.sensibleautolending.com
7/26/13 8:33 AM
“ PassTime is the most effective way to ensure our customers make their car payments a priority every month.
Director of Finance CAG Acceptance, Mesa, AZ
CALL 1-800-828-1564 passtimeusa.com
7/26/13 9:40 AM
ÛÝÛÛAugust 5, 2013
USED CAR NEWS
Capital and Customer Service Buy-Here, Pay-Here Still Makes Sense from an Industry Professional Go Financial has created a unique subprime lending program that gives dealers the best of both worlds: upfront profit at the time the car is sold and a share of the payment stream over the life of the loan. Over a third of today’s car buyers have subprime credit. Dealers can easily pick up incremental sales each month with the right opportunities to offer those customers. By handling every step of the financing process from underwriting through collections, Go Dealer Partners have the ability to build a subprime portfolio without the headaches and heavy capital requirements that often stand in their way. To be able to succeed at subprime finance, you have to be able to understand and predict risk, and know when to balance it with reward. Go Financial created a proprietary grading system based on its experience financing hundreds of thousands of subprime loans. That credit scoring model became the basis of the GO Portal – an online site that delivers approvals to all customers. The Portal instantly updates advance rates as the dealer adjusts the
APR, term, price and down payment to best meet their customer’s needs and the dealership’s profit goals. After receiving the initial advance, each dealer’s loans are pooled together to create a unique portfolio, which GO services at their national call centers. Dealers share in the future revenue from the pool as the payments are collected. What if a dealer doesn’t want to wait for the payments to be collected? The dealer has the option to tap into pool equity early through GO’s exclusive Cash Out Now option, offering flexibility with instant liquidity once their pool is closed. With a financing program that can approve all customers in an easy to use online Portal, GO is creating a pathway to selling more cars. All loans are non-recourse and GO has no sign-up fees. Go Financial is licensed in 44 states and currently enrolling franchise and independent dealers. For a demonstration, call 888-GO-Financial (888-463-4626) or visit www.gofinancial.com.
In today’s lending climate where approval and advance rates are at alltime highs, does buy-here, pay-here still make sense? Absolutely – for older trade-in vehicles, high mileage vehicles and customers who still cannot get approved, it is the only way to offer financing and provide transportation for the customer. Demand for buy-here, pay-here paper from bulk purchasers is at an all-time high. It is a great time to sell buy-here, pay-here paper. Therefore, it makes sense to continue in the buy-here, payhere business.
Vehicle Acceptance Corporation provides financing to reduce your cash on the street, and we will assist you in bulk sales to any third party. Our servicing pay histories are accurate and well respected by all bulk purchasers, which improves pricing in many cases. Call VAC to learn more about why buy-here, pay-here with our assistance makes a lot of sense. Contact us at http:// VACorp.com/UCN or 888-573-4248.
Every issue of UCN will now be available to read online from our home page. Just click “Read The Latest Edition”
online edition eighth.indd 1
SUBPRIME LOANS REPRESENT OVER 33% OF VEHICLES SOLD TODAY. How much of that very lucrative slice of the sales pie are you getting? Go Financial has created a subprime lending program that puts you in control. It’s an end-to-end solution that provides up-front profit and future cash flow streams. And best of all, every loan is purchased non-recourse and there are absolutely no sign-up fees. Take the headaches out of making your subprime finance deals work. Sell more cars. Make more money.
7/30/12 12:26 PM
Can someone, for the love of profitability, tell me how to turn more of my subprime apps into cash?
Visit gofinancial.com/news for the whole story or call us at 888-GOFINANCIAL for a quick demo.
7/26/13 8:27 AM
How Could I Have Known?
energy in the sales department is through the roof. Our traffic has more than doubled. Business is good. Very good.
Then I stumbled upon Jimmy Vee & Travis Miller and Rich Dealers®. It’s hard to put into words what they’ve done for my business. It’s been a total transformation. Us car guys have vendors calling everyday promising us the world. But, in this case, everything my Rich Dealers® Advisor said was real. And I’ve made more my first year with Rich Dealers® than ever before.
Joining Rich Dealers® is the best business move I’ve made. I’ve been a car guy since I was 14 and Rich Dealers® has put the fun back in the business. It’s exciting to come to work again! Previously, we were lucky to have grosses around $2,600 a car. Now we are consistently around $3,600 a car… and they’re still rising. We’ve changed our whole pricing structure and now we’re selling more cars than we ever sold. It goes against everything I used to believe about this business! And I love it.
ow could I have known the car business would be such a burden on my life? When the economy took a dive, it jeopardized everything I had worked so hard for. We lost a lot of customers and banks, and any profit I hoped to make was disappearing before my eyes. We were selling 50 cars a month and just getting by. I was working long hours and long days, with nothing to show for it.
I was lucky enough to attend a Rich Dealers® meeting about a week after I joined, and that made all the difference. There were some wild ideas were flying around; they were talking about things nobody else was talking about. It seemed to be the opposite of what most people were telling me I should do—for example, how to price my cars, where to list my cars, and even what cars to buy. It was anything but “common knowledge” and I became skeptical. How could these two guys know something nobody else did? But I figured I had nothing to lose and everything to gain by following their advice, and speaking to the other dealers in the group made me feel even more comfortable. So I jumped in full steam! I did what they told me to do—ran the ad they gave me, priced my cars using their strategy (higher, much higher than everyone else) and made simple, yet important, changes to the way we positioned our dealership to customers. They showed me how to command the actions of potential buyers by speaking to their subconscious mind, and about being a solutions provider instead of a product pusher. What happened next? Well, I’m still in shock. Everything they said was right on the money. It was a complete and rapid reinvention of my business. “Hold on tight” because it’s the ride of your life. Our sales have increased 45%, and they’re growing everyday. I’m very, very pleased. The
Rob & Angie Wyche rec onnecting and enjoy ing well-deserved ESP® in the beautiful Virgin Islands.
The best part is, they convinced me to slow down and enjoy life more. Now I only work three and a half days a week, and I’m making more than I ever have before! The general consensus among car guys is you can’t make more money and sell more cars if you spend less time working. I can tell you that’s just not true. When I first joined, I assumed this was only about marketing. Boy, was I wrong. I had no idea I was going to get so much information about how to run the business–– like how to raise my gross profits, buy the right kind of cars, improve my processes, expand my leadership capabilities and so much more. It’s fun to double your business, take more dough home and spend more time with your family. Jimmy & Travis call that ESP®— Enjoyable, Simple & Prosperous. It’s the ultimate goal of being a Rich Dealer®. And it’s real, very real. And trying Rich Dealers® is painless. There’s no contract and no pressure. And for what this costs, for the little bit of investment, you’ve got nothing to lose. Heck, take it out of your petty cash if you have to. You’ve tried everything else, haven’t you??? How does it work? Jim & Travis say, “Stop selling cars, start selling solutions.” And they’re right! They recognized what so many others have missed: only a tiny part of the population are actively, consciously shopping
for a car, while he vast majority of people are sitting it out because some problem is keeping them from what they really want. And I can help solve those problems! And you can, too. A lot of dealers ask me what I’m doing to get the results I’m getting and where they should begin? The first step is to have Jim & Travis create a FREE Traffic Scale Report customized just for you and your store. What’s a Traffic Scale Report? It’s an analysis of your traffic to see how it compares in quality, and quantity, to your direct competitors, and to other dealerships around the country. What you’ll discover about your market, and how much untapped opportunity there is available for you to take advantage of, will shock you. It would not be a stretch to suggest that this info could lead to an extra $1 million in additional net profit over the course of time. Tell them “Rob” sent you and you’ll also receive a complimentary copy of their audio book, Invasion of the Profit Snatchers. Is the book a bit controversial? Yes. But you’ll know for sure these guys are the real deal before you get through the first chapter. Ready to experience results like I have? Request your FREE Traffic Scale Report and get your FREE audio book, Invasion of the Profit Snatchers, by visiting www.TrafficScale.com and use coupon code UCN1308, or call 888-256-8183.
RobWyche | Tallahassee, FL | A Rich Dealer®
To get your FREE Traffic Scale Report, visit www.TrafficScale.com, coupon code UCN1308, or call 888-256-8183.
7/29/13 12:23 PM
TD Auto Finance
See what our service can do for your sales.
Get service you can count on. At TD Auto Finance, we’re committed to helping you grow your business. And we go to great lengths to meet your needs. We’re open longer so you can submit deals seven days a week, and with TD Auto Finance you can speak to a live analyst when you need to. You also get the expertise of our dedicated Dealer Relationship Managers, who work with you to customize business plans and maximize profitability. It’s just what you get from a financing partner with over 45 years of experience.
To learn more, call 1-800-200-1513 or visit www.tdafdealer.com TD Auto Finance LLC, is a subsidiary of TD Bank, N.A. TD Bank Group is a trade name for The Toronto-Dominion Bank. Used with permission.
6/13/13 2:36 PM
7/26/13 8:10 AM