Used Car News 9/19/11

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Manufacturers Turn to Fleets, Incentives

Rush - Dated Material

New-car sales should rise this fall thanks to increased fleet sales, even as manufacturers hold the line on incentives.

Declining consumer confidence, a struggling housing market and a stagnant unemployment recovery should hold back retail sales for the re s t o f t h e ye a r, s a i d Edmunds.com chief economist Lacey Plache.

Meanwhile, many companies are sitting on piles of cash while interest rates remain at historic lows.

They can refresh their fleets now at a low cost and get good prices for the vehicles they rotate out.

Full-size pickups coming out of commercial fleet use continued to command record high prices in August, according to data from Manheim. Prices for off-fleet midsize cars were lower, but they’re coming off historic highs in June.

E d m u n d s .c o m s e n i o r analyst Jessica Caldwell said retail sales could perk up due to lower gas prices, but eco-

nomic headwinds remain strong.

Incentives would help, of course, but those remain low for most models.

Automakers spent an average of $2,316 on vehicle incentives in August, said Edmunds.com, down less than three percent from July.

A potential incentive war between luxury automakers does seem brewing.

Lexus upped its average incentive spending 41 percent to $2,667 per vehicle in August, the biggest month-tomonth increase by any major automotive brand, according to Edmunds.com.

BMW’s incentive spending ticked up four percent to $3,664 per vehicle from July.

Mercedes-Benz’s incentive spending, meanwhile, fell nine percent to $3,808 per vehicle.

But the company is offering $4,000 cash incentives to conquest other luxury car owners for its M-Class and E-Class vehicles, which also happen to be in the same segments as Lexus’ two strongest products: the RX and ES. Worries about new-car sales seem unnecessary as they defied economic concerns in August coming in basically flat with July.

But that was below earlier expectations. Several analysts have slashed their sales forecasts for the year.

“The auto industry is a mixed bag this year, due to economic uncertainty; sales have improved compared to last year, but nowhere near the potential we had ex p e c t e d ,” said TrueCar.com’s Jesse Toprak.

Photo by Jeffrey Alan Kowalsky A COUPLE OF CLASSICS: Incoming NAAA president Charlotte Pyle, left, and outgoing president JayCadigan check out the inventory at Birmingham Motors Ltd, a highline used-car store in Birmingham, Mich., during their recent visit to the Detroit area.

Auction Execs Gather for Annual Confab

When Charlotte Pyle takes the gavel in Chicago, she’ll become only the third woman to serve as president of the National Auto Auction Association and the first in more than a decade.

The other two served back-to-back – Ruth Hart-Stephens in 1993-94 and Alexis Jacobs in 1994-95.

“It’s very humbling,” Pyle said.

She admits to feeling nervous, but not because she’s a woman. Pyle is more concerned about her ability to carry on the NAAA’s tradition of strong leadership for the industry.

Outgoing president Jay Cadigan said Pyle has no reason for concern.

“She does a fabulous job in everything she does,” Cadigan said. “She’s going to do just fine.”

While Pyle’s inauguration is the convention’s conclusion, this is Cadigan’s show. It should be a good one with very high attendance, he said.

“The convention really is the place where our industry meets every year,” Cadigan said.

“And I look forward to it every year.”

Read their interviews on pages 8 and 9.

IN THIS ISSUE • A dealer overcomes challenges, including cancer. – Page 3

• Small cars drive big price increases in the used market. – Page 10

• A new director takes charge at the Florida IADA – Page 5

• Alleged immaturity could bring action against store. – Page 26

DO MORE WITH AUTOTRADER.COM. Check out the back page and see how our dealers put more to work for them.

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Dealer Loses Town’s Last License

By Sheila McGrath

Used-car dealerships have become a popular business in the town of Salisbury, Mass.

They’re so popular, in fact, that the town’s Board of Selectmen were scheduled to meet Sept. 12 to decide who gets to have the only license left in town to operate one.

Salisbury, a town of 8,300 residents that lies 45 miles north of Boston, has an ordinance in its bylaws capping the number of used-car dealers at 17.

In Massachusetts, local municipalities issue licenses rather than the state.

Up until last month, all 17 of the Class II licenses were held by dealers, although not all of them were being actively used.

But one became available in August after third-generation dealership owner Chris Fraser lost his business to bankruptcy.

Fraser said a variety of factors led his business, Fraser Automotive, to close its doors after 87 years.

First came the recession of 2008, which was a difficult year for dealers everywhere.

At that time he went from being a dealer of new GM models – which held a Class I license in the town of Salisbury – to a used-car

dealer – which held one of the coveted Class II licenses.

But then came an even bigger problem. After years of hanging over his head, a bill of nearly $300,000 to clean up a New Hampshire Superfund site suddenly became due.

Fraser Automotive was deemed liable for the cleanup because a transport company his father and uncle hired to dispose of waste oil in the 1970s did so improperly.

Fraser said after his bankruptcy filing, he began receiving letters from the town asking what he planned to do with his Class II license, which didn’t expire until December.

He said he had hoped to keep it in case he didn’t find other employment after his business closed.

“I wanted to be able to use the license if other avenues didn’t open up for me,” he said.

“That wasn’t sufficient.”

He turned in the license after being asked to appear before the Board of Selectmen to explain his plans. At that point, he said “I don’t want to do this anymore.”

Fraser said he knows most of the dealers around town and they’re all hard-working, respectable business owners.

But he questions why he’s the only one being singled out for

not actively using his license.

Other dealers have held onto them just because it makes some parts of their operation easier to manage, he said.

“They’re not enforcing the process,” he said. “Some of these guys have had them forever.”

Fraser said the legality of limiting the number of usedcar dealerships has also been called into question.

His attorney has successfully argued in the past that Massachusetts law doesn’t let towns limit the number of used-car dealers simply by passing an ordinance.

If a town wants to control the number and location of dealerships, Fraser said, there are other methods, like zoning, they could use.

“They’re going about it the wrong way,” Fraser said.

“They’re only hurting themselves.

“They’re restricting tax revenue and commerce, plus making that license a kind of commodity.”

Salisbury Town Manager Neil Harrington did not return calls requesting comment.

A representative from the Salisbury Town Hall office, Marie Brace, declined to comment at press time.

The board was holding

Photo by Scott P. Yates HISTORY: Dealer Chris Fraser shares a memento from better times.

work sessions to decide how to handle the issue, she said.

“It’s still up in the air,” she said. “They’re still discussing it.”

She said the ordinance capping the number of dealers had been in effect since the 1990s.

The town attempted to rectify the problem last October, when the Board of Selectman unanimously passed an amendment of the town’s general bylaws increas-

ing the number of available licenses from 15 to 17. But as soon as they opened up two more licenses, four people applied for them.

Fraser said he doesn’t plan to fight the matter anymore, but he wishes someone would take up the challenge.

And he’s not ruling out getting back into the business in the future - “but it won’t involve applying for a usedcar license in the town of Salisbury.”

Quality Operator Feels ‘Fortunate’

By Jeffrey Bellant

Georgia dealer Billy Graham has succeeded in the car industry and bested opponents in competitive weightlifting, but he recently faced a much more dangerous opponent in the form of cancer.

Graham, owner of Graham Auto Sales in Loganville, Ga., was diagnosed with a type of cancer that affected his tear-duct sac and eye.

Billy Although he reGraham ceived seven weeks of radiation, five days a week, doctors still had to remove his right eye last February, despite his 20/20 vision.

“It’s been a big adjustment,” Graham said. “Not physically, but mentally.”

But he has had a lot of good news this year, the first being that he is now cancer-free. www.usedcarnews.com

“I’m very fortunate,” he said.

In his professional life, things are going very well. He received his industry’s top honor when the Georgia Independent Automobile Dealers Association named Graham the Quality Dealer of the Year.

Paul John, director of membership and education, has been friends with Graham since 1992.

He said Graham is a great choice for the award.

“Billy Graham is a first class guy and I am glad to call Billy my friend,” John said. “We need more car dealers like Billy who really care about customer service, not just before the sale but, most importantly, after the sale.”

Graham grew up in the Atlanta area and is a second generation car dealer.

During his junior year in high school he followed his father’s footsteps and began selling cars at the metro Atlanta Chrysler store that his father managed. In 1975, Billy won a trip to Mexico as one of the top Chrysler sales associate in the country. In

1978, he joined the sales force at the largest Cadillac dealership in the Atlanta metro area, where he won a top award and later worked in various positions.

In 1990, he joined Hennessy Lexus as its pre-owned sales manager. The store was chosen as one of11 across the country to pilot the Lexus Preowned Certified program.

Graham was proud of being a part of that program.

In 1993, he struck out on his own, opening Graham Auto Sales Inc. He carries between 30 and 40 vehicles on his lot, retailing about 20 per month and wholesaling another 250 last year.

In 2007, Graham joined the Georgia IADA. He serves as an officer and has served as convention chairman and on the legislative committee.

Graham is first vice president this year and will become the group’s president in 2013-14.

In his spare time, Graham is active in several sports. In the 1990s, he competed in the Skip Barber auto

racing series and he has also played golf in the Chick-fil-A Pro-Am Championship.

But Graham’s biggest love is competitive powerlifting and he’s enjoyed a lot of success in this area.

In 2010, he won a bronze medal for his age and weight group at the World United Amateur Powerlifting World Championships in Slovakia.

Graham’s personal best benchpress, 464 pounds, was once the national record for his age and weight.

He was national champion for the benchpress in 2009 and 2010.

Graham also represents his business and industry on an Atlanta-based radio show, “Trust Dale,” dedicated to consumer protection.

John said Graham is considered the expert used-car dealer who Dale trusts and calls on to participate on his weekend show.

John said Graham is the type of dealer that the association and industry need.

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NEWS BRIEFS Manheim Offers App, Rebate for Selling Online

Manheim introduced its mobile app for Google Android smartphones. The app is available for download from the Android marketplace.

Now Android-device users – just like Apple iPhone users – can scan VINs, view the vehicle summary page, view Manheim Market Report (MMR) results, search for vehicles by inventory or location, place bids, buy now, make an offer, proxy bid and use all of Manheim’s mobile tools.

Manheim launched a new program for OVE.com that allows used-car dealers to list inventory and earn rebates.

The program will run through Nov. 1. The more cars sold, the bigger the rebate. Manheim will list the vehicles on OVE.com with condition reports, provide marketing support and handle the post-sale process, simplifying the sales process for dealers.

Certified Sales Drop

August 2011 CPO sales were 146,296, down 3 percent from July, but up 3 percent year-over-year.

There were 26 selling days in July and August and 25 in August 2010.

August’s Daily Selling Rate was down

1 percent from the prior year.

Year-to-date sales were 1,165,588, up 6.4 percent from the same period last year.

Toyota led all brands once again with 28,354 certified sales.

Hyundai, Kia and Nissan hit alltime highs.

Dealer Writes Book About Auto Bail Out

Dealer Alan Spitzer has published a new book about the government bailout of the auto industry.

“Grand Theft Auto,” focuses on the consequences of closing hundreds of dealerships as part of the Chrysler and General Motors bankruptcies. It details Spitzer’s attempt to fight the government and corporate action.

Value Guide Adds Shopping Tool

Edmunds.com has announced the addition of a used-car inventory search tool that makes it easier for car buyers to shop for and compare used vehicles in their local areas, and C R O S S WO R D

by Myles Mellor

PAGE 34

for dealers to list their vehicles to an audience of informed, motivated buyers.

The feature, which can be found near the top of Edmunds.com’s homepage, complements the site’s new-car inventory tool that features inventory from thousands of dealers nationwide.

The used-car tool allows shoppers to browse vehicles in their markets by selecting preferences across several critical categories such as make and model, mileage, model year and price.

Shoppers can further narrow

vehicle selection by identifying special features, colors and trim levels.

Local-area results are then presented to the shopper together with the listing dealer’s email and phone number.

Jaguar Land Rover CPO Adds AutoCheck

Experian Automotive announced that Jaguar Land Rover North America LLC has named it as a provider of vehicle history reports for its certified pre-owned vehicle program.

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Subscribers: We print advertisements as sent to us by auctions and other advertisers.

It is not possible to verify the correctness of listed vehicles in auction ads. Most lists are partial and all lists are subject to last minute changes by auto auctions, so before travelling a long distance for a particular auto auction event, contact the auction by telephone for a fax of vehicles in the sale.

Used Car News assumes no guarantees or liabilities concerning the accuracy of any advertisements. All Rights Reserved. Reproduction in any form is prohibited without the written consent of the publisher.

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New Director Hits Ground Running

By Jeffrey Bellant

Lisette Mariner found herself up in the air often during her first few months as executive director of the Florida Independent Automobile Dealers Association.

She was hired at the same time the National Independent Automobile Dealers Association was holding its annual convention.

“I was in the office two days and had to tell the staff, ‘OK, now I have to fly to the NIADA convention in Las Vegas,” Mariner said.

“It was a little overwhelming.”

She took to the sky again in August when she traveled to Texas for training at the NIADA headquarters in Arlington.

The Florida IADA hired Mariner when former executive director Steve Jordan became the new chief operating officer of the NIADA. Jordan has been a great resource for her transition.

“He and I were in touch almost every day,” Mariner said.

Mariner has a lot of experience in associations, most recently with the Florida Society of Association Executives.

“I’ve also worked with the Florida Medical Association and the Florida Chamber of Commerce,” she said.

Mariner was born in New York, raised in Miami and is bilingual in Spanish.

The Florida State University graduate has been living in Tallahassee in recent years.

Since the Florida IADA is based in Tallahassee, Mariner didn’t have to relocate.

Mariner has plenty on her plate to deal with now that she has settled in.

In the wake of the recent census, the Florida legislature is going through redistricting, which moves up the legislative session to January from March.

Plus the state is going through budget woes “like everyone else,” Mariner said.

She wants to make sure to protect her members from additional taxes and, hopefully, roll back some fees.

Mariner said the associa-

Photo Courtesy of the Florida IADA IN CHARGE: Lisette Mariner, executive directorof the Florida Independent Automobile Dealers Association, hopes to improve services for dealers while keeping an eye on happenings in the state legislature.

tion has a great relationship with regulators and the Department of Motor Vehicles, so that makes her job a little easier.

She said Florida IADA has a solid foundation with an experienced board and 800 members in the association.

“It’s been awesome,” Mariner said. “The board members have been great.”

Mariner has also gone through the dealer training program and is traveling through the state to meet dealers.

She said the association

works hard to build relationships with new dealers and help them navigate the challenges of starting a new business.

But Mariner also wants to meet with established members to find out what their needs are.

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GOOD WILL: Cristina Earls, of Sheboygan, Wisc., stands next to the minivan donated to her by a local used-car dealer after the vehicle was destroyed by vandals.

By Jeffrey Bellant

Sheboygan County Budget Auto sold a minivan to a woman for $1 this month, but the dealership made a huge profit in goodwill.

The sale was the happy ending for a customer who lost her previous car to an act of vandalism.

Cristina Earls, a local woman, was a

victim of vandalism when four young men tipped over her 1998 Dodge Neon overnight, leaving it totaled.

The mother of four was stuck without a vehicle, unable to afford another one.

Workers at the Wisconsin used-car store, part of the Van Horn Automotive Group, heard about the Continued on next page

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Vandals – Continued from prior page incident on the news and suggested the dealership help the woman out.

Tina Murphy, the store’s customer relations manager, said when store owners heard Earls was a leukemia survivor on disability, they decided to provide her with a vehicle.

The Van Horn family has been in the car business since the 1960s, Murphy said. The children of the store’s founder run several franchises and the used-car store.

Store officials visited Earls at her home to tell her about the offer.

“We gave her a choice among three vehicles,” Murphy said. “A 2003 Pontiac Montana, a 2002 Oldsmobile Silhouette or a 2005 Dodge Neon.

“She really liked the Neon, but felt the minivan was more practical for her situation.”

The dealership sold her the vehicle for $1 so Earls wouldn’t have to pay state taxes.

Earls also got help from a local insurance agent which provided her with a year’s worth of liability coverage for free, Murphy said.

Word spread quickly about the dealership’s good deed.

“Feedback has been tremendous,” Murphy said. “We’ve gotten a lot of responses on our social media sites.”

The dealership has heard from previous customers and others who promise to be future customers after hearing the news.

Local news organizations have called and run stories and CBS News even contacted the dealership about a potential story.

Murphy said a man called from New Jersey saying he heard about the story on the news. The caller checked to make sure the store ships cars nationally – it does – and said he would buy his next vehicle from the store.

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PAGE 8 – FOCUS ON NAAA

Leader Focuses on Learning lanes and we’ve started construction on our sixth lane.

We’re at eight lanes at Capital City.

There are a few public sales in West Virginia, but there are no other NAAA auctions in the state. Our Capital City auction borders Kentucky, UCN: What’s your back- Ohio and Virginia. ground? Have you always lived in West Virginia?

UCN: How did you Pyle: Actually, I live in become involved in the Pennsylvania, right on the Independent Auction line. At the end of my drive- Association? way is the state line. Our Pyle: Many years ago, business has always been in Barbara Wheatley and her West Virginia. We started husband Jim were very our Mountain State facility active in that association.

20 years ago and our Capital This was before they sold City facility 15 years ago. their sale to GE, which then My husband Joe was in the sold it to Manheim. They estate auction business as an remained active with the auctioneer. When we started independents even after the dating, I started clerking for sale, so when we attended him. our first convention, she He started working a came to me and said, Monday night auto auction. “Charlotte, I have three I’d drive him there, drop him meetings to cover. Could you off, go to the mall and then please take the minutes?” pick him up to go home.

After the meeting, I went to After a few weeks, the clerk give her the minutes and she didn’t show up one day. Joe asked if I could present them called me on my cell phone to the national board. After I and asked if I would clerk the did that, she said, sale. At that time, there were “Congratulations, now that’s no computers. You still hand- your job.” wrote the bill of sale, you still I started working with took imprints of credit cards. Lynn Weaver and the two of We worked that auction for us co-chaired that commita year and a half. Their repu- tee for about 10 years. I had tation started to go down hill. to step down when I became They were starting to bounce president-elect. That was checks, that sort of thing. We very hard for me. I love being saw the need for an auction an independent. in West Virginia, so we leased a piece of property UCN: Will you rejoin and opened a little two-lane after your term? facility. That was 22 years Pyle: It depends. You never ago. Now that facility is five know if you’ll get nominated (Charlotte Pyle is the incoming president of the National Auto Auction Association. She and her husband Joe own Capital City Auto Auction in St. Albans, W. Va., and Mountain State Auto Auction in Shinnston, W. Va.)

September 19, 2011

or not. We’ll see what the Pyle: I didn’t even know future holds.

Paul and now we’ve become very good friends. We’ve UCN: What made you talked about our vision for decide you wanted to be combining all the zones. I’m really worried about their NAAA president?

Pyle: I really didn’t decide. future because it seems At the time, Keith Lelux was they’re not getting enough the president of the southern information in their chapter zone. He told me he wanted meetings. I’ve felt the associto put my name up for presi- ation on the whole was dent. I agreed without lapsing when it came to eduthinking about it. Then I cation. called him back and said I’d That’s important to me already served as southern because it was ingrained in zone president. He said he me through Barbara. That’s was talking about the why I want to start a national position.

Leadership Excellence I was skeptical, but he course for the NAAA. We’re listed all the committees I looking to partner with the had served on. I love the Disney Institute for a twoassociation and everything day educational process. about it, so I was ecstatic, but We’re presenting it to the I’m nervous. zone presidents and I’m hoping they’ll catch the UCN: Do you have an spe- fever. cific plans?

There’s really no training ground for leaders within the association. You used to work your way up through the zone boards. Those are gone now, so I wanted to create a way to train people before they get to the national level.

We’ll include some general auction education so they can go back and use these skills at their own businesses.

We’re also looking at Capitol Hill. Cash for Clunkers is an example of a big issue in our industry.

We want to make sure we have proper representation, to have somebody there looking out for our interests. We think we can do a little better job with that. We’re working on putting together a PAC.

Manheim has been very instrumental with helping us understand what we need to do for that.

UCN: What do you see as the challenges ahead?

Pyle: Inventory is obviously going to continue as a challenge for at least another year or two.

Auctions have had to try to diversify in what they offer.

At our sales, we’ve gotten into ‘yellow iron’ equipment. We’ve had to broaden our horizons.

UCN: Is there anything the NAAA can do to help its members?

Pyle: The walls between the auctions have fallen.

We’re all more comfortable in picking up the phone and calling another auction.

Especially with the growth of Internet sales, we’re all working together to schedule pick ups and help our customers.

We all fight for the business, but we all do whatever it takes to help each other out.

UCN: What can auctions do for the dealers?

Pyle: We’ve gotten creative with float plans and those sort of programs. You obviously have be selective, knowing the dealers who are going to pay their bills when they say they will.

We’ve been selling a lot more cars after the sale. If we can’t get something sold, we’ll take it to another sale.

We’re switching more merchandise back and forth.

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Outgoing President Appreciates Chance to Represent Industry (Jay Cadigan, the outgoing president of the National Auto Auction Association, is Manheim’s vice president of operations for Florida.)

UCN: How would you describe your year as NAAA Jay president?

Cadigan Cadigan: Fast. It was a really fast year. A lot happened in the industry.

It’s been a good year for the auctions in a way as they readjust to volumes.

We haven’t lost any auctions to the poor economy. Manheim did merge a few sales in the same town.

With the shortage of cars, we were selling what we had at historically high prices.

Over the last month, we’ve noticed a big decline in our sales percentage even with the shortage of cars. It’s a reflection of the economy. People are putting off buying.

UCN: Do feel like you accomplished enough during your tenure? Was it worthwhile?

Cadigan: It was very worthwhile.

Any time you get the opportunity to represent your industry, it’s worthwhile. I spent a lot of time with folks

that I probably wouldn’t have otherwise. I spent time listening to their wants and needs for the industry and I’ll continue working to address that.

UCN: You said coming in you didn’t have any big initiative, that changes would take more than one year. What do you see as your biggest accomplishment?

Cadigan: I wanted to get more young people involved and we’ve received a pretty good response from that. One of the results from that we’ll see under Charlotte and (incoming president-elect) Paul Lips is some new committee members.

My committees were already formed, but it will work out great for them.

UCN: Charlotte is the third woman to serve as NAAA president. What’s the state of women in the industry today?

Cadigan: The industry is more diverse than it was 35 years ago and we need to be more diverse tomorrow than we are today.

UCN: Any advice for Charlotte?

Cadigan: Keep up your pace. It’s just a very rewarding year. It’s a chance to represent an industry that we’ve been involved in for years and that’s pretty much our lives.

•

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9

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USED CAR NEWS

September 19, 2011

Small Cars Drive Big Price Increases

Small cars remain the hot vehicle in the used-car market these days, but larger vehicles are rebounding.

Elevated gas prices helped to drive a surge in used compact car prices during the first half of the year, according to Edmunds.com.

Edmunds.com’s data shows consumers paid about 10 percent more for used three-year-old compact cars in July than in January.

By comparison, prices for this segment rose just 1.6 percent over the same period in 2010, and 1.1 percent

in 2008, the last time gas prices crept over $4 a gallon.

At the other end of the spectrum, used three-year-old large traditional SUVs saw a small drop in price (minus 3.2 percent, on average) from January to July.

This segment did demonstrate much more stability than it did in 2008, when the price of used threeyear-old large traditional SUVs plummeted 23 percent during the first seven months of the year.

Continued on page 12

UCN_11

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USED CAR NEWS

September 19, 2011

Small Cars – Continued from page 10 Price Changes for Selective Market Classes year-over-year % change, August 2011

14.0% 12.0%

11.3%

10.0%

9.2%

8.0% 6.0% 4.0%

4.1%

2.0% 0.0%

1.1%

-2.0%

-0.8% -1.9%

-4.0% -6.0%

-5.0%

Total

Compact Cars

Midsize Cars

Luxury Cars

Pickups

SUV/CUV

Vans

Source: Manheim Consulting

According to Edmunds.com data, the price of a new 2010 Toyota Prius bought in July 2010 depreciated just 4.3 percent after one year, while the price of a new 2010 Honda Civic depreciated 5 percent over the same period.

By comparison, the average price for all new 2010 models depreciated 28.9 percent during that time.

The demand for smaller vehicles shows some signs of weakening as gas prices decline, however.

Although small cars continue to be the year-over year price leader, Manheim reports that pickup trucks and crossovers outperformed

compact and midsize cars at auction over the past three months.

Online remarketer Openlane Inc. said while car prices remain strong at its sales, dealer interest in cars dropped 2 percentage points in August and ended 1 percentage point below August 2010.

Dealer interest in minivans, meanwhile, increased 2 percentage points versus the prior month, and finished 15 percentage points above year ago levels.

All this points to consumers’ desire for comfort and convenience once again trumping their financial concerns.

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USED CAR NEWS

September 19, 2011

TrueCar Gets Funding Injection

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Data provider TrueCar Inc. locked up some additional funding as it continues expanding through acquisitions and partnerships.

TrueCar Inc. has secured up to $200 million in debt and equity financing. A portion of the proceeds from this round of financing will be used to fund the development of new revenue streams, growth and strategic acquisitions.

Participants in the financing include current investors USAA, Capricorn Investment Group and GRP Partners.

The financing involved the conversion of all shares of TrueCar preferred stock for common stock on a one-for-one basis, and the issuance of common stock to investors in the round.

Some of the investors in the equity financing include GR Match LLC (an affiliate of Guthy-Renker, LLC), McCombs Family Partners and DealerTrack Holdings Inc. All three investors have some sort of business relationship with TrueCar.com.

GR Match produces all of TrueCar’s indrect response commercials, which are scheduled to start airing in October.

McCombs owns a large dealership group.

DealerTrack recently sold ALG Inc. to TrueCar in a deal that included a 15 percent equity interest.

Debt capital is being provided by Silicon Valley Bank.

TrueCar further expanded when it completed the acquisition of Carperks, a provider of automotive purchasing and leasing programs that leverages group buying power for the corporate employees and members of over 1,000 highly regarded U.S. businesses and membership organizations.

Carperks offers preferred new and used car auto buying programs to employees of companies that include Coca Cola, Wells Fargo, Verizon, American Airlines, Macy’s, Home Depot and Sysco Corp., to name a few.

Employees of these companies are able to research and configure vehicles and obtain employee pricing discounts and special offers through the Carperks website and iPhone app.

TrueCar also struck a deal with Military.com, which serves active duty personnel in all branches of the U.S. Armed Forces, reservists, guard members, retirees, veterans, family members and defense workers.

The program offers users an online resource to research new and used cars, the ability to configure a virtual vehicle down to the options, and most importantly, to see competitive upfront price quotes for that vehicle from trusted dealers in their local area.

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USED CAR NEWS

September 19, 2011

Luxury Lines Recall Vehicles

A pair of luxury automakers issued recalls lately.

BMW is recalling model year 2009 X5 and X6 vehicles. The rear brake discs may not have been manufactured according to specifications. As a result, a reduction in braking performance at the affected rear wheel could occur.

In an extreme case, the affected rear brake disc could break resulting in a loss of braking at that wheel increasing stopping distances and the risk of a crash.

BMW will notify owners and will repair the vehicles by inspecting the rear brake discs and, if necessary,

replace them free of charge.

Porsche is recalling certain model year 2011 911 Speedster and 911 GTS RS 4.0; and model year 2012 Boxster (including S and Spyder); Cayman (including S and R); 911 Carrera (including S, GTS, 4, 4S, AND 4 GTS); 911 Targa 4 and Targa 4S; and 911 Turbo and Turbo S models manufactured from May 31 through June 10. There is a possibility that the mounting holes in the seat belt anchor plates fitted to the vehicle are too small. If the hole diameter is too small, the anchor plate may not be able to rotate about the fastening bolt as designed.

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USED CAR NEWS

September 19, 2011

Credit Unions Face Challenges

By Ted Craig

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Dealers have turned to credit unions to finance their customers more than ever since the economic slowdown started three years ago.

But how financially secure are credit unions compared to banks?

About a third of the nation’s 7,391 credit unions are considered weak by Weiss Ratings. The rating agency ranks only 10 percent of credit unions as strong.

That sounds like a potential problem, but what it really means is most are average, said Gene Kirsch, bank analyst for Weiss.

Size plays a major part in the ratings.

Most credit unions are small, often with only one branch.

“Typically, those tend to be the weaker ones, because they can’t withstand any significant loan losses,” Kirsch said.

Even the largest credit union, Navy Federal Credit Union, is smaller than the 20 largest banks.

Credit unions still have a lot going for them.

Overall, the nation’s credit unions increased profits by $658 million to $1.7 billion despite a $6.1 billion decline in lending in the first quarter, compared to the same period last year.

Deposits grew, year-over-year, by almost 5 percent to $822.7 billion.

Those are the most recent numbers available.

Industry liquidity – short-term assets as a percentage of short-term liabilities – increased from 10.4 percent at March 31, 2010 to 22.2 percent at March 31, 2011, an indication that the industry may be better equipped to weather economic downturns.

And if a third of credit unions ranking as weak seems high, that’s still lower than the number of weak banks.

This proves good news for car dealers because credit unions focus on the auto finance business.

“Their bread and butter is car loans,” Kirsch said.

Thieves Steal Keys from Store HARRISON, Ark. (AP) – Police are investigating the theft of keys to 65 vehicles from a dealership.

Andy Yeager, owner of Andy Yeager Motors said he may have to rekey each of the vehicles to prevent the thieves from turning up at any time

and taking a car or truck.

Dealership manager Ronnie Roberts said that nothing else was taken. It appeared that the culprit knew where to look.

Roberts says some of the vehicles are locked and can’t be moved.

UCN_19

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4:31 PM

“

Page 1

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USED CAR NEWS

September 19, 2011

Dealer Wins Lawsuit, Clears Name A Jackson County, Mo., jury awarded $3.475 million, plus punitive damages of $15 million, to Jeremy Franklin Suzuki in a lawsuit against American Suzuki Motor Corp., holding the vehicle maker liable for negative publicity resulting from another dealership’s advertising campaign.

On Aug. 29, the jury found American Suzuki liable for negligence and also liable for violating Missouri’s Motor Vehicle Franchise Practices Act, awarding damages of $3.475 million.

The jury added punitive damages of $15 million to be paid to Jeremy Franklin Suzuki.

The decision followed a two-week trial in Kansas City.

The ad campaign by another Suzuki dealership resulted in con-

sumers and attorneys general in Kansas and Missouri filing multiple lawsuits against that dealership, resulting in extensive negative publicity in the local, regional and national trade media.

The jury found that the ad campaign, run by a competing dealership owned by Jeremy Franklin’s brother, caused consumer confusion and damaged Jeremy Franklin Suzuki’s business.

“We see this verdict as a vindication of our commitment to continue to serve our customers and our persistent efforts to grow our business despite all of the confusion,””said Jeremy Franklin, president of Jeremy Franklin Suzuki.

“We look forward to moving on and rebuilding trust in the Suzuki brand name in Kansas City.”

Paint Job Dispute Ends in Gunfire GREENWOOD, Miss. (AP) – Police in Greenwood say a car owner's complaint about a bad paint job allegedly led to gunfire.

The Greenwood Commonwealth reports that Jonathan Fleming told police he was shot at after taking his car back to an automobile body worker to complain about the paint job.

Fleming said he sensed danger as the worker approached him with his hand underneath his shirt.

Fleming said he got in his car and drove away, but the car was hit by gunfire. A bullet penetrated the back of the car and hit the car’s radio.

Police said 28-year-old Jarvis M. Fluker was charged with attempted aggravated assault and released on bond.

The Commonwealth reports that a number listed for Fluker was disconnected.

It was unclear whether he had an attorney.

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UCN_20

* Vehiclepurchasemustbenon-groundingdealervehiclesaleonOPENLANE.comOpenAuctionorPorscheWholesaleNetwork.Dealermustpayfullbuyfeetoqualify.Qualifyingpurchasesmustbemadebyasingledealership/buyingorganizationID.VehiclessoldthroughOPENLANECertifiedAuctionPartnersareNOTeligibleforthisincentive.

Purchased vehicles subject to arbitration or that are voided will be excluded from eligibility. Qualifiers will receive gift card(s) by default. Please allow up to 30 days after the end of the promotional period to receive your American Express gift card(s). In the event that a qualifying dealership/buying organization would like to receive Buy Fee credit(s) as an alternative, the dealership/buying organization must contact their OPENLANE Dealer Representative by October 7, 2011 to express their preference. Buy Fee Credit(s) will be issued to qualifiers by October 20, 2011 and will be valid and automatically applied towards OPENLANE purchases from the date of issue through November 15, 2011. Other restrictions may apply. Offer valid September 1-30, 2011. ** Qualifying dealer-consigned vehicle sales must be sold from September 1-30, 2011. Sold vehicles subject to arbitration or that are voided will be excluded from eligibility. Qualifiers will receive gift card(s) by default. Please allow up to 30 days after the end of the promotional period to receive your American Express gift card(s). In the event that a qualifying dealership/buying organization would like to receive Sell Fee credit(s) as an alternative, the dealership/buying organization must contact their OPENLANE Dealer Representative by October 7, 2011 to express their preference. Sell Fee Credit(s) will be issued to qualifiers by October 20, 2011 and will be valid and automatically applied towards OPENLANE purchases from the date of issue through November 15, 2011. Other restrictions may apply. Offer valid for qualifying dealer-consigned sales September 1-30, 2011.

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USED CAR NEWS

September 19, 2011

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Consolidation Picks up Again Mergers and acquisitions of auto The market was virtually frozen for dealerships is up sharply in 2011. three years, with just $28 million Public retailers completed $411 worth of acquisitions by public million in acquisitions through the retailers in 2009 (according to SEC end of July (according to corporate filings). Many dealers were awaiting SEC filings), a 92 percent increase more favorable conditions to exit over commitments made in all of their businesses. Strong unit sales, 2010. Private buyers are also active fewer marginal dealerships, lower though terms of their operating costs and purchases of dealerrecord dealership ships and dealership profitability are groups are not making acquisitions “Today, the reported. more attractive for That information both public and perceived comes from Presidio private buyers. Stabilvaluations...

Merchant Partners ized real estate values LLC’s recently releasand low interest rates are ed Automotive Retail are also contributing M&A Update for to the rebound in closer....” mid-year 2011.

M&A activity.

“During the recesBuyers remain most – Alan Haig sion, most public interested in Toyota, companies and large Honda, Lexus, BMW private buyers shied and Mercedes Benz away from acquisitions, and the few dealerships, though Korean and offers that were made were unattrac- domestic dealerships are becoming tive to sellers,” said Alan Haig, more attractive, as is Audi. The supply managing director of Presidio’s auto- and market share challenges facing motive retail services group. the Japanese manufacturers should “Today, the perceived valuations of dissipate by year end; these manufacbuyers and sellers are closer, so we’re turers are expected to offer attractive seeing significant activity because of incentives and products to restore pent-up interests, as well as a dra- sales to noralized levels late this year. matic improvement in dealer Presidio believes the industry is in profitability.” the early stages of at least a five-year The increase is attributable to a cycle, and anticipates continued high number of factors. levels of activity for several years.

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UCN_23 REVISED

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Page 1

Helping you grow your business is our business.

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We’re ready for your business, now open 7 days a week. Call TD Auto Finance today at 1-800-200-1513 or visit us online at www.tdafdealer.com

Part of the TD Bank Group, a Aaa-rated bank ranked as one of the safest banks in North America.

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. For detailed credit ratings for The Toronto-Dominion Bank and TD Bank, N.A. visit http://www.td.com/investor/credit.jsp.

Credit Ratings are not recommendations to purchase, sell, or hold a financial obligation inasmuch as they do not comment on market price or suitability for a particular investor. Ratings are subject to revision or withdrawal at any time by the rating organization.

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USED CAR NEWS

September 19, 2011

Creditors Go Deeper into Subprime Creditors continued to increase their appetite for risk in the second quarter, with new vehicle loans for customers with credit outside of prime increasing by 22.4 percent when compared to the previous year, according to Experian Automotive.

In the second quarter, 22.29 percent of all new-vehicle loans went to customers in the non-prime, subprime and deep subprime categories, increasing from 18.21 percent.

The largest percentage increase in new-car loans was in the category with the highest risk, deep subprime, which jumped 44.1 percent, moving to 2.13 percent from 1.48 percent of all new vehicle loans in the same

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period a year ago.

Additional findings from the second quarter show the average customer credit score for both new and used vehicle loans dropped by 10 and eight points, respectively.

For new vehicle loans, the average fell to 762 from 772 in the same period a year ago. For used vehicle loans, the average fell to 671 from 679.

The total dollar volume of automotive loans that were 30- or 60-days delinquent dropped to $16.9 billion from nearly $21 billion. Thirty-day delinquencies dropped to 2.59 percent from 2.89. Sixty-day delinquencies dropped to 0.6 percent.

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USED CAR NEWS

September 19, 2011

Site Lists Best Buys for Teens, But Few Can Afford Any Cars

Yet another source has put together a list of best vehicles for young people.

The question remains if young people can put together the money to buy and maintain these vehicles.

Vehix is helping provide direction with a list of “8 Great Used Cars under $10,000 for Teenagers.”

The vehicles had to satisfy a long list of requirements to make the list.

For instance, to help protect young drivers, all vehicles must weigh at least 3,000 pounds and demonstrate good crash-test scores.

Vehicles must include four doors and offer a four-cylinder engine versus a larger six-cylinder to deliver higher fuel economy.

All vehicles on the list of best used cars for teenagers are younger than 10 years old, cost less than $10,000 with average mileage for their age, and demonstrate high reliability scores according to Consumer Reports Magazine and J.D. Power and Associates.

The winners are: 2005 Ford Escape 2004-2005 Honda Accord Sedan 2002-2003 Honda CR-V 2006-2007 Hyundai Sonata 2007-2008 Kia Optima 2006-2007 Mazda MAZDA6 2003-2006 Subaru Impreza 2002-2004 Toyota Highlander These cars may be great value, but they could still be too expensive for many teens.

The Bureau of Labor Statistics reports that the share of young people who were employed this July was 48.8 percent, the lowest July rate on record for the series, which began in 1948.

July typically is the summertime peak in youth employment.

From April to July, the number of employed youth 16 to 24 years old rose by 1.7 million to 18.6 million, down slightly from last summer.

So even priced below $10,000, many vehicles would bust the budget of these unemployed young people.

Staff’s Alleged Immature Behavior Lands Dealership in Hot Water

By David Piestrzynski

A Chicago dealership faces a lawsuit after some alleged locker room behavior by its employees.

Earlier this month, a man filed a lawsuit against Grossinger City Autoplex in Chicago, claiming he received some rather brutal harassment from five of the dealership’s employees.

The suit alleges the man was threatened, harassed and even given a “hanging wedgie” on one occasion by the Grossinger employees over the course of a month-long period in 2009.

It’s unknown if the accuser was an employee of the dealership or a customer.

He claims to have received death

threats, along with being strangled with a phone cord and being called a homosexual.

The alleged abuse went on while the Grossinger employees were working at the store.

The lawsuit, which was filed in the Cook County Circuit Court, is seeking $600,000 in damages.

Representatives of Grossinger City Autoplex have not responded for comment on the suit.

The Grossinger Auto Group operates nine new-car stores throughout the Chicago area.

Despite not being accredited, by the BBB, the Chicago Grossinger store where the alleged harassment took place has a decent track record with the Northern Illinois Better Business Bureau.

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USED CAR NEWS

September 19, 2011

Kiting Scheme Brings 51 Months A former dealer pled guilty to a check kiting scheme involving multiple bank accounts.

John Jeff Woodard Jr., 49, of Harlingen, Texas, has been sentenced to a 51-month prison term for bank fraud conducted using the names of several of his former businesses. The scheme resulted in a significant financial loss for three local banks.

Woodard operated Harlingen Imports, aka Competition Car and Truck Center, in Harlingen, Texas; Competition Chrysler Dodge Jeep and Competition RGV, Raymondville, Texas; and Competition Motor Sports, with locations in Harlingen and McAllen, Texas.

A check kite exists when a person passes checks back and forth between banks before the checks have time to clear to create the appearance that the bank customer has more money in the accounts than he actually does. A check is written on one bank and deposited in a second bank.

Checks not backed by sufficient collectable funds are written from the second bank (or a third bank) and deposited with the first bank to mask the fact that there are not sufficient funds to pay the initial check. The process continues until the kite is discovered.

This scheme, which occurred between Nov. 1, 2004 and Jan. 30,

2006, required Woodard or persons acting under his direction to write multiple checks on one account and to deposit them with another of the three banking institutions each day.

There was no legitimate business reason for the vast majority of the checks written. The number and size of the checks dwarfed the reported operations of the three businesses combined.

Over time, Woodard withdrew uncollected funds (known as “bleeding the kite”), which required him and those acting under his direction to write larger and larger checks. The checks were all written in whole dollar amounts, typically in even hundreds, and were typically sequential. Woodard signed about half of the checks, while employees or business partners acting under his direction signed others. It does not appear anyone but Woodard received a benefit.

Throughout the scheme, financial statements for the businesses containing inaccurate and altered entries relating to the financial strength of the businesses were submitted to the banks to support loans. The alterations made it appear that the businesses were more successful than they actually were in order to induce the banks to lend money or to continue lending money to Woodard’s businesses.

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USED CAR NEWS

September 19, 2011

PEOPLE IN THE NEWS Industry Vet Joins Floor Planner’s Board

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Dealer Services Corp. has added Bill McIver to its board of directors.

After a career spanning four decades with General Motors Acceptance Corp., McIver retired as director of Internet remarketing in May 2009.

McIver held a Bill number of manMcIver agement positions with GMAC, now Ally Bank, in virtually every area of financial services including collections, dealer credits, commercial lending, and remarketing.

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Internet lead manager ResponseLogix Inc. announced the appointment of Charlie Vogelheim as vice president of strategic alliances.

Vogelheim will help establish lasting relationships with dealers, manufacturers and other vendors in

the automotive industry.

Vogelheim brings over 25 years of automotive industry experience to ResponseLogix including roles as executive editor at Kelley Blue Book and IntelliChoice.

Vogelheim also served as vice president of automotive development at J.D. Powers & Associates where he was responsible for the International Automotive Roundtable and created the Automotive Internet Roundtable.

He has also contributed to numerous website development projects with companies including AOL, Microsoft, Yahoo, Google and eBay. Group Recognizes Auction Counsel

National Auto Auction Association counsel Chuck Stepter was recognized by the National Odometer & Title Fraud Enforcement Association (NOTFEA) and awarded the Lance D. Thomas Achievement Award.

The presentation took place during the 31st Annual NOTFEA Convention in Charleston, W. Va. The award is made in honor of the late Lance D. Thomas, one of the original investigators with U.S. Department of Transportation, National Highway Traffic Safety Administration (NHTSA) and presented annually to a NOTFEA member for their work in the area of odometer and title fraud.

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USED CAR NEWS

September 19, 2011

RETAIL MARKETS ILLINOIS

G o r d o n To r m o h l e n , owner, Tormohlen’s Good People Automotive, Freeport, Ill.: “I bought this location in 1996, but I’ve actually been in the car business since 1973.

My dad started in the 1940s.

We’ve owned franchise stores in the past.

“We had a Chrysler store for 20 years and opened this location up in 1996 as a Thrifty Car Sales store before we changed it over to a separate buy-here, pay-here store in 2000.

“I generally stock 45 to 50 units. I would say our inventory is down from this time last year. As anyone will tell you, it’s tough to buy cars right now.

“Generally, we sell about 12 to 15 units per month. I would say we’re slightly up from this time last year.

“Most of our vehicles are sourced from auctions. We prefer to go to Greater Rockford Auto Auction in Rockford, Ill. It’s very convenient for us and we know the staff well.

“We do some National Independent Automobile

Dealers Association Certified sales, but 95 percent of our sales are buy-here, pay-here.

“We’ve been using the NIADA Certified Program for a couple of months.

There were a couple of things that prompted me to use the program.

“No. 1, the program is just superior. When I had a Chrysler franchise, we sold some Chrysler certified. But I really think the NIADA Certified Program is better than the Chrysler program.

“The other reason we jumped into it is we hoped to generate some trades for our buy-here, pay-here lot.

“We’ve sold about a half dozen of the NIADA certified vehicles. Customers have been pleased.

“We have our own service department with six operable bays.

“The net profit of service and parts is covering about 65 to 70 percent of my overhead.

“We also recondition vehicles before we put them on our lot. We have an internal formula that we’ve used for years.

“It’s an inspection form similar to the form used for

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Compiled By Jeffrey Bellant NIADA Certified. We service anything.

“As a matter of fact, I’ve actually got a 1961 Bentley in my shop we’re helping a customer put back together.

“We chiefly carry domestics. We’ve played with some imports in the past, but there’s not an import franchise in our community. So servicing and parts are little more of a hassle.

“So we stick with domestics. Since we do buy-here, pay-here, we want to keep the expenses down.

“We carry all of our notes.

“I’m carrying 75 to 80 percent cars. It’s tough to find decent truck product.

“The average unit here is a 2002 model year with 120,000 miles.

“I think mileage has gone up a little bit.

“We don’t offer any (retail installment contracts) that run more than 24 months.

Our average term is about 21 months.

“Our down payments run around $800.

“On average – and this goes back to my franchise days – customers want to trade out of their cars every two to three years.

“Collecting has been difficult the last couple of years.

We have a handful of GPS units. It depends chiefly on the customer. We don’t run credit bureaus. We use our own internal scoring system.

“Our average retail price ranges from $4,950 at the bottom end and no more than $10,000 at the top end.

“For the NIADA Certified vehicles, it’s a different category. Those run between $8,000 and $14,000.

“We recently delivered a 2006 Chevy Cobalt LS, with 63,000 miles. It was a certified unit. It sold for $8,650.”

VIRGINIA

Bobby Steele, dealer operator, Steele’s Auto Sales, Lynchburg, Va.: “We had a dealership that we ran from 1980 to 1995, but closed it down. We started up a new dealership last year.

We’ve also had a collision shop we’ve operated since 1985.

“Our dealership is a straight retail shop. But we are looking to get into subprime lending in order to be competitive. The business changes every day. It’s pretty volatile.

“We keep about 10 vehicles on the lot.

“We’ll sell about three per month.

“Our inventory is a mix of domestics and imports. It’s about 50/50.

“We carry about 75 percent cars, compared to 25 percent trucks.

“We buy a lot of our inventory locally, off the street, but we’ll also use auctions.

“Craigslist is also great.

“Our average vehicle is about six to seven years old with anywhere from 70,000 to 120,000 miles.

“It’s entirely different than it was 20 years ago.

“If a car had 120,000 miles on it, it was wore out and used up. Now, that’s not the case.

“We recondition vehicles before we put them on the lot.

“We probably end up putting $1,000 in them.

“Our marketing is just word of mouth and reputation.

“One car we sold recently was a 1969 Ford Ranchero GT. We got $13,500 for that.

The car was completely rebuilt, so it was like brand new.”

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USED CAR NEWS

September 19, 2011

WHOLESALE MARKETS CALIFORNIA

John Brasher, general manager, Brasher’s Sacramento Auto Auction, Rio Linda, Calif.: “Sales are going well. The market is strong and demand is high.

“Supply is strained. Dealers are having trouble finding the cars they need.

“We have seven lanes. But we also run double blocks (two blocks per lane). In total, then, we’re running 12 lanes.

“Our volumes are 1,500 to 1,600 per sale.

“This time last year, the volumes may have been a little better.

“Sales percentages are in the 60s – low 60s. It’s about the same as what it was this time last year. It’s been pretty consistent overall.

“For attendance, we’re getting high 800s, low 900s, in the lanes. It’s pretty similar to what it was last year at this time.

“We draw our dealers from Northern California, Nevada, Washington, Oregon, Idaho and a few from the Midwest, though not many. “(Attendance patterns)

haven’t changed significantly in the past year.

“Dealers are still pretty optimistic. Dealers are optimistic by nature.

“Right now, our ratio of dealer consignment to fleet/lease volumes is probably close to 50/50. It might be a little bit heavier on the fleet side.

“We also have a closed Ford factory sale. Those are smaller sales. Most of the sales from our manufacturers are in the open sale.

“The rental and fleet volumes are steady, while the bank repossession volumes are down.

“We don’t have a salvage sale at Sacramento. We basically have an in-op sale where we’ll have nonrunners go through the lanes by video. We’ll sell about 40 to 50 of those a week.

“We also have a GSA sale once a month, which is a public sale. That’s on the third Friday of the month, usually about nine to 10 months of the year.

“Those run very well.

When they have cars to run, the dealers and the retail customers flock to them. They really like them because they

are well-maintained, lowmileage fleet cars. So they’re really popular.

“The volumes change month to month for that sale.

We’ll sell 2,000 a year. On some months, we’ll sell 100 or so. Other months we’ll sell 300 or 400.

“We also run powersports every other week. We carry boats, RVs, trailers and other items. We’ll run 140 to 150 every couple of weeks. That’s pretty steady.

“Overall, our average price coming through the lanes of our regular sale is about $12,000. It might have gone up a little bit from this time last year.

“Nice cars are doing well.

Nothing is really struggling.

There seems to be a market for anything, if it’s a car people want. If it’s not running, they want it for parts, if it is a nice car, people are all over it.”

INDIANA

Bob Ruth, general manager, Wolfe’s South Bend Auto Auction, South bend, Ind.: “The Wolfe family, which has been in business 37 years, bought this auction in March

Compiled By Jeffrey Bellant 2003.

“We’re capable of running four lanes, but we’re running two or three lanes currently.

“The volume we run varies depending on the week.

Some weeks it’s 220, other weeks it’s 275. Sometimes we’ll have as many as 300.

“Right now, we average about 250 to 260 units per week. This time last year, we were probably similar to what we’re doing this year.

“I attribute (the lower volume) to so many different things. I’m sure everyone laments the same sorts of things. This industry, in particular, has never recovered from Cash for Clunkers and all the ramifications from it.

“The dealers who used to bring five cars a week are now keeping two or three.

Dealers looking for inventory are seeing edgier stuff and then there’s (competition) from eBay and the Internet.

So you have all these factors playing into this.

“Our attendance is still decent. We probably have 150 to 200 dealers per week.

I think that’s better than last year, but obviously worse than what it was three or four years ago.

“During one recent week we had a 62 percent sale, which I think is good for anyone.

“But we’re averaging in the 53 percent to 55 percent range. That’s about the same as last year.

“Our dealers come from Indiana, obviously. But we’ll get people from Illinois and Michigan, too. We even get people from Ohio, believe it or not.

“Dealers in the lanes are complaining about the same thing: the prices are too high.

Unless you’re selling, of course, and then the prices are too low.

“Our volume is 85 to 90 percent dealer consignment.

That hasn’t changed from last year.

“Fleet lease is primarily repossessions from banks and a couple of fleet companies.

“We have an in-op sale we run at the same time as fleetlease to start off our regular sale. Then we’ll follow that up with our dealer consignment.

“Our average price in the lanes is about $2,800 to $2,900. It used to be about $2,300 last year.”

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USED CAR NEWS

September 19, 2011

COMPILED BY JEFFREY BELLANT

AUCTION RAISES MONEY FOR CHILDREN’S CHARITY

Photo Courtesy of Dealer’s Auto Auction of the Rockies HORSING AROUND: “Miles,” the mascot forthe NFL’s DenverBroncos, poses with Miss Colorado Diana Dreman and other folks during a recent charity event at Dealer’s Auto Auction of the Rockies in Denver.

Dealers Auto Auction of the Rockies held its first charity auction this summer, raising $10,500 for Royal Family Kids Camp Denver (RFKCD).

RFKCD, which is sponsored by The Next Level Church, provides children in the foster care system, ages 6-11, a week at summer camp.

“The money we raised will help RFKCD send 26 kids to camp next year,” said Alex Allen, auction marketing manager.

The auction collected 16 items that were auctioned off. There was a city tour by helicopter that was donated by Will Sanders with Colorado Vertical, a day on the boat donated by Marc Veldhuizen with Good Neighbor Garage, and a round of golf for two donated by Harry Veruchi of Lakewood Happy Motors, among others.

The auction also donated a few items including some sports memorabilia.

Dean Gunter, with Mile High Car Co., was the guest auctioneer for the event. Other guests included Diana Dreman, 2011 Miss Colorado, and“Miles,” the Denver Broncos mascot.

“The overwhelming generosity of our customers and employees for our first charity auction says a lot about the giving spirit of all,” said Michele Noblitt, the auction’s general manager.

AARP HONORS MANHEIM AARP recently recognized Manheim for the third time as one of the “Best Employers for Workers Over 50.” Approximately 57 percent of Manheim’s workforce is over the age of 50 with 19 percent of these employees having worked for Manheim for more than 20 years.

Manheim, which ranks 27th on this year’s list, will be featured in AARP’s The magazine’s issue for November/December. The ranking demonstrates Manheim’s best practices with regard to recruitment, retention and career development of all employees, as well as creating a workplace that offers value to the local communities that Manheim

serves.

“We’re very proud to be recognized

by AARP,” said Lilicia Bailey, senior vice president and chief people officer of Manheim. “We value the rich diversity that a multigenerational workforce brings to our business because it helps us understand and serve a wide array of customer’s needs.

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: jeff@usedcarnews.com

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USED CAR NEWS

September 19, 2011

ACTUAL WHOLESALE AND PROJECTED RESIDUAL VALUES SEPTEMBER 2011

SOURCE: BLACK BOOK

2010

2009

Domestic Cars Cadillac DTS 4D Sedan Lincoln Town Car Signature Limited 4D Sedan Ford Taurus SEL 4D Sedan Buick LaCrosse CX 4D Sedan Ford Mustang Base 2D Coupe Chrysler 300 Touring 4D Sedan Pontiac G6 4D Sedan Chevrolet Impala LS 4D Sedan Chrysler Sebring Touring 4D Sedan Chevr olet Cobalt LS 4D Sedan Import Cars BMW 7-Series 750Li 4D Sedan Mercedes-Benz E Class E350 4D Luxury Sedan Lexus ES 350 4D Luxury Sedan Acura TL Base 4D Sedan BMW 3-Series 328i 4D Sedan Volkswagen Jetta SEL 4D Sedan Honda Accord LX 4D Sedan Nissan Altima S 4D Sedan Toyota Camry LE 4D Sedan Nissan Altima Base 4D Sedan Toyota Corolla LE 4D Sedan Hyundai Sonata GLS 4D Sedan Nissan Sentra Base 4D Sedan Mitsubishi Galant ES 4D Sedan

Sep-10 $32,850 $27,300 $22,350 $21,500 $16,350 $16,650 $12,400 $13,450 $12,700 $9,450 Sep-10 $75,900 $42,000 $29,600 $30,500 $28,400 $14,400 $16,350 $16,200 $14,850 $15,200 $11,850 $12,600 $11,400 $12,900

Mar-11 $28,000 $22,200 $20,400 $20,650 $16,050 $14,750 $11,650 $12,400 $11,250 $8,950 Mar-11 $69,200 $39,200 $28,300 $27,500 $27,500 $15,500 $15,200 $15,400 $14,650 $14,100 $12,050 $12,100 $10,800 $11,600

Sep-11 $27,800 $24,100 $21,700 $20,700 $17,200 $15,200 $13,550 $13,450 $12,850 $10,850 Sep-11 $67,500 $40,200 $28,200 $28,000 $26,200 $16,900 $16,000 $15,500 $14,650 $14,200 $13,450 $13,400 $13,400 $12,950

Projected Figures Sep-12 Sep-13 $23,600 $19,300 $19,150 $16,150 $16,100 $14,700 $17,550 $15,050 $14,100 $11,900 $12,650 $11,300 $10,600 $8,900 $10,600 $9,200 $10,550 $8,900 $8,000 $6,900 Sep-12 Sep-13 $50,500 $43,500 $30,500 $25,500 $23,900 $20,900 $22,250 $19,050 $22,250 $19,000 $14,700 $12,750 $13,525 $11,650 $12,950 $11,700 $12,950 $11,550 $11,950 $10,700 $11,200 $9,700 $10,750 $9,050 $8,850 $8,125 $9,100 $8,400

Trucks Cadillac Escalade Base 4D Utility AWD Cadillac SRX Luxury 4D Utility AWD BMW X3 XDrive30i 4D SAV Toyota 4Runner SR5 4D Utility 4X4 V6 Honda Pilot EX-L 4D Utility 4WD w/DVD Chevrolet Tahoe LS 4D Utility 4WD Nissan Murano SL 4D Utility AWD Ford Flex SEL 4D Utility Toyota Tacoma Prerunner SR5 Double Cab V6 at Jeep Wrangler Sahara 2D Utility 4WD Ford Edge SEL 4D Utility Honda Odyssey LX Wagon

Sep-10 $46,800 $32,650 $36,800 $28,500 $28,150 $30,375 $24,700 $22,825 $21,325 $22,950 $21,500 $18,450

Mar-11 $46,900 $32,300 $33,850 $28,675 $27,650 $28,675 $25,000 $21,575 $21,375 $21,750 $20,700 $17,300

Sep-11 $45,700 $31,700 $31,250 $29,375 $26,450 $26,375 $22,700 $22,475 $22,375 $21,600 $21,400 $20,300

Sep-12 $38,350 $27,550 $28,050 $24,300 $23,800 $24,675 $21,550 $19,475 $19,950 $19,400 $19,125 $16,350

Sep-13 $33,850 $24,250 $24,650 $21,575 $21,100 $22,175 $19,150 $16,825 $18,150 $17,000 $16,375 $14,150

unlock your cash flow.

Domestic Cars Cadillac DTS 4D Sedan Lincoln Town Car Signature Limited 4D Sedan Chrysler 300 Touring 4D Sedan Ford Mustang Base 2D Coupe Buick LaCrosse CX 4D Sedan Ford Taurus SEL 4D Sedan Pontiac G6 Base 4D Sedan Chevrolet Impala LS 4D Sedan Chrysler Sebring LX 4D Sedan Chevrolet Cobalt LS 4D Sedan Import Cars BMW 7-Series 750Li 4D Sedan Mercedes-Benz E Class E350 4D Luxury Sedan Acura TL Base 4D Sedan Lexus ES 350 4D Luxury Sedan BMW 3-Series 328i 4D Sedan Volkswagen Jetta SEL 4D Sedan Honda Accord LX 4D Sedan Nissan Altima S 4D Sedan Toyota Camry LE 4D Sedan Nissan Altima Base 4D Sedan Nissan Sentra Base 4D Sedan Toyota Corolla LE 4D Sedan Hyundai Sonata GLS 4D Sedan Mitsubishi Galant ES 4D Sedan Trucks Cadillac Escalade Base 4D Utility AWD BMW X3 XDrive30i 4D SAV Honda Pilot EX-L 4D Utility 4WD w/DVD Toyota 4Runner SR5 4D Utility 4X4 V6 Chevrolet Tahoe LS 4D Utility 4WD Cadillac SRX 4D Utility AWD V6 Nissan Murano SL 4D Utility AWD Toyota Tacoma Prerunner SR5 Double Cab V6 at Jeep Wrangler Sahara 2D Utility 4WD Chevrolet Colorado LT Crew Cab 4WD Z85 Ford Edge SEL 4D Utility Honda Odyssey LX Wagon Chevrolet Silverado 1500 LT Ext Cab 4D

Sep-10 $26,050 $21,800 $16,050 $13,900 $13,900 $15,300 $10,600 $11,550 $10,200 $8,100 Sep-10 $66,600 $33,400 $26,500 $25,600 $24,100 $14,300 $14,700 $13,600 $13,250 $13,000 $10,450 $10,350 $10,900 $10,000 Sep-10 $40,150 $31,200 $26,800 $23,300 $26,475 $24,350 $24,150 $20,050 $21,025 $18,950 $20,200 $18,150 $19,850

Mar-11 $22,900 $18,900 $14,850 $13,350 $12,500 $13,050 $9,900 $10,700 $9,150 $7,800 Mar-11 $60,700 $31,400 $24,500 $24,100 $22,700 $13,850 $13,600 $13,500 $13,250 $12,700 $9,400 $10,700 $10,200 $8,950 Mar-11 $38,700 $29,500 $26,000 $22,700 $25,275 $23,650 $23,450 $20,225 $20,025 $18,550 $18,600 $16,050 $18,850

Sep-11 $21,900 $19,500 $14,950 $14,500 $13,050 $13,050 $11,650 $11,500 $10,000 $9,000 Sep-11 $58,900 $31,600 $25,000 $24,600 $21,800 $15,100 $14,600 $13,800 $13,300 $13,000 $11,750 $11,750 $11,400 $10,850 Sep-11 $37,800 $27,500 $24,250 $23,650 $23,275 $21,900 $21,750 $21,125 $19,775 $18,400 $18,250 $18,250 $16,800

Projected Figures Sep-12 Sep-13 $19,500 $15,400 $16,150 $13,550 $12,750 $11,050 $11,900 $10,200 $11,150 $9,650 $10,750 $9,350 $9,150 $7,500 $9,000 $7,700 $8,400 $7,000 $6,900 $5,800 Sep-12 Sep-13 $43,500 $36,900 $23,900 $20,000 $19,850 $16,650 $20,700 $17,900 $19,250 $16,200 $12,800 $11,050 $12,350 $10,675 $11,600 $10,450 $11,450 $10,150 $10,600 $9,450 $8,025 $7,225 $10,000 $8,700 $8,950 $7,600 $8,350 $7,750 Sep-12 Sep-13 $33,650 $29,150 $24,450 $21,250 $21,150 $18,400 $21,375 $18,625 $21,875 $18,650 $20,250 $17,150 $19,150 $17,000 $18,175 $16,600 $16,900 $14,600 $16,200 $14,600 $16,375 $13,600 $14,400 $12,400 $14,850 $13,050

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USED CAR NEWS

September 19, 2011

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33

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USED CAR NEWS

September 19, 2011

Disconnected Jottings From Tony Moorby...

As I write this column, it’s the morning of the 10th anniversary of 9/11 and I have to keep getting up from the computer to share in the elegiac pall that hangs over the country. The media, in general, did a wonderful job

trustful and our economy started its slippery slide at that moment.

Our business, which I consider to be part of the very spine of this country, is still in a state of flux and confusion. Each week, retail and

Tony Moorby • 40-year veteran of the industry • President from 1997–2000 of ADT Automotive • Served as ADESA’s executive vice president of sales and marketing • Moorby & Associates 2006–present • Awarded the Ring of Honor by NIADA • NAAA Hall of Famer

in the run-up to these events and every emotional string, from sorrow to elation to pride, was pulled.

What was gained from all this? Nothing rushes to mind, except a great deal of hatred – some misplaced, some not and maybe a reminder that our freedoms still don’t come cheaply.

Much was lost, however. A nation of open-hearted people has become mis-

wholesale stores, auctions and all the supporting businesses are like Tarzan swinging through the trees on vines hoping there’ll be another to grab onto just to stay above ground in the hope that this one won’t snap.

Meanwhile, we’re dished up another plate of political pap from President Obama with the latest $447 Billion Jobs Bill, mostly in the form

C R O S S WO R D

of tax cuts over a period of time. In other words, promising money we don’t have and tagging it on to a debt burden that we certainly do.

I get the impression that this administration is looking a lot like Tarzan itself.

They’re hoping to stay aloft until the next elections.

Obama can come across as sincere and even stirring, he’s even now able to string more than three words together at the microphone.

But I fear, on investigation, that his proposals are thin veils at best and undoable at the worst.

While he’s trying to muster the best in the American spirit, it’s obvious that political oratory isn’t what it used to be. Our spirits need to be lifted and like most Americans we’ll do it ourselves, hoisting up our boot straps and getting on with it.

Enough, already! There are some bright spots all around. If funding for the demand were to be available, there are some wonderful vehicle products out there that should find

their way to an appreciative market – a more sophisticated market than ever before. Some of the new cars will almost do the dishes for you. I do sometimes worry that we’re building in too many distractions and then we build machinery to alert you should you get distracted. I remember, in England, one wouldn’t dare drive along and drink a soda at the same time for fear of being caught by the police and cited for “driving without due care and attention.” I’m not sure if this rule still prevails. Eating a hamburger with a large fries and jumbo drink would be out of

the question.

We’re now seeing a lot less credit being taken against purchases – the poor and middle-income way to save – and perhaps we could see a return to putting down a healthy deposit, say, 30 percent and only taking the balance over 30 or 36 months. Hey, presto, we’d have equity in the trade after a couple of years and could trade again. There are some things about the ‘good ole’ days’ that still make a great of sense. If the public doesn’t go into an 84-month hock for a Fiat 500 we might be able to afford the future.

Good luck with that.

To see past columns from Tony Moorby, log on to www.usedcarnews.com/ columnists/tony-moorby

Sponsored by INSURANCE AUTO AUCTIONS

By Miles Mellor 1

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Across 1. Chevy SUV 5. Chevy sedan 10. Dodge SUV 11. One form of payment 12. Swedish auto that was bought by GM 13. Actress, West 14. You can get it in a Jiffy 15. Toyota sedan 17. 1918 ___ Mdl 682 19. Road direction 21. Medical professional 23. Pontiac Grand___ 24. See 22 down 27. Nation of the “deux chevaux”

29.

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Auto-club service Genetic info carrier Gold symbol Chevy SUV Dodge muscle car Wall ___ Start of ATV (2 words) Chrysler engine Demographic segment $10 bill Former Chrysler marque Beverly Hills is in it A Porsche Get rid of

Down 1. Chevy 4 door wagon 2. Wager 3. Spacious 4. Isuzu SUV

6. Promotion 7. Ferrari nationality 8. Fuel consumption, in relation to city driving 9. Selling condition (2 words) 12. Relative 16. Negotiation ploy (2 words) 18. Boxing venue 20. Yukon is one of their SUV’s 22. Jeep, with 24 across 24. Old Olds 25. Aussie hopper 26. Be in the red 28. Summer mo.

31. Sidestepped 35. Honda model 36. Older of two sons

Answers to this puzzle in the 10/3/11 issue. Call 1.800.794.0760 for a FREE subscription.

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Answers to the 9/5/11 puzzle

37. Long haul 38. Surface material 41. Augusta’s state, for short 42. Ancient 45. __ __ King 46. Pedestaled vase

F I E S S L E S C A A X C L A T A R I D G E U C B K A I S U V A R O L L O U B A N K

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“THANKS TO JASON,MY CARS ARE GETTING A WHOLE OTHER LEVEL OF ATTENTION.” Jim Allera President–River Road Auto Sales North Apollo, PA

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