Used Car News 5/13/24

NAAA Reveals Member Survey Results

By Jeffrey Bellant

More than 12 million vehicles were offered for sale at National Auto Auction Association member auctions and nearly 7.3 million vehicles were sold – both figures represent an 11% increase compared to 2022, according to the 2023 NAAA Industry Survey.

Larry Dixon, vice president of auction data solutions, recently talked about some key points that came out of the survey.

“The results are pretty close to what we see in our AuctionNet Data, our actual sales data that we collect from 265 NAAA members, which we package and sell to the remarketing community,” Dixon said.

“One of the things that jumped out at me was the disparity between in-lane and online simulcast sales,” Dixon said.

In-lane simulcast would be when a dealer is in the lane bidding while other dealers can be online bidding, as well. Digital only is when dealers have no connection to physical

lanes like OVE or SmartAuction. Dixon said he always expected a difference between the price of a vehicle bought in the lanes and one bought online.

“I didn’t realize how big of a difference that would be,” Dixon said.

“The average price to in-lane buyers was $11,900. The average price for online buyers was $18,300. That’s a big delta.”

Dixon said one reason for the difference is that the vehicles being purchased in-lane are those that dealers need to put their eyes

on – vehicles that are being purchased primarily as they are “rolling through the lanes.”

“Those are the vehicles that tend to be older and have higher mileage, so they don’t lend themselves to buying them ‘sight unseen,’ so to speak,” he said

But he’s not sure why the gap was so big in this survey.

In overall in-lane simulcast sales (including both in-lane and online buyers), the average dealer sale price was $15,562 and the average commercial sale price was $14,466 (7% less than the average dealer sale price).

Dixon said there are fewer offlease vehicles in the lanes, eliminating late model vehicles from that bucket.

Plus, there are far more repossessed vehicles coming through the commercial lanes, which keeps that average price down.

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Summer Reading

5/13/2024

Industry Leaders Discuss Some of Their Favorite Books

The old saying goes, “Leaders are readers,” so we asked some of the leaders of the used-car industry what books they’ve been reading, as well as books that might have informed or influenced them – or just those they enjoyed.

Aaron McConkey, assistant general manager for DAA Seattle provided a list of the books his team is reading.

• Dare to Lead - Brené Brown

• Radical Candor - Kim Scott

• The Case for Servant Leadership - Kent M. Keith

• The 5 Dysfunctions of a Team - Patrick Lencioni

“Our favorites have been Dare to Lead and The Case for Servant Leadership. Servant Leadership is a foundation of our culture here so we’re always reading and revisiting this one. I’d select this one if we need to choose one that best represents us and our goals culturally.

“We found Radical Candor to be an interesting and fun read, but of these it’s the least representative of our culture.

“5 Dysfunctions is an absolute classic and we’re in the middle of working through it now actually!

Venkat Krishnamoorthy, AutoIMS CEO/President, offered his recent reads and recommendations:

Never Split the Difference: Negotiating As If Your Life Depended On It by Chris Voss and Tahl Raz

Venkat’s notes: A great simple yet captivating read on nuances around negotiation. Great tips if you are a frequent negotiator!

Financial Intelligence, Revised Edition: A Manager’s Guide to Knowing What the Numbers Really Mean by Karen Berman, Joe Knight, and John Case

Venkat’s notes: A simple book that demystifies concepts of finance and what the numbers mean. A good read for both financial and nonfinancial managers. This book is about a decade old, but the concepts are still practical and it is an enjoyable read.

Smart Growth: How to Grow Your People to Grow Your Company by Whitney Johnson

Venkat’s notes: A neat concept of S-curves for developing people –the launch, the sweet spot, and final mastery. Great ideas to help personal development at all levels in a company.

Tony Moorby, NAAA Hall of Famer and Used Car News columnist, said: Amor Towles is a current favorite author. I may have mentioned “A Gentleman in Moscow” before - an all-time favorite read.

Others by him are good ones too; “Rules of Civility”, “The Lincoln Highway” and his latest is “A Table

Stories Series by Chris Colfer; The Secret Benedictine Society by Trenton Lee Stewart and all the books by Stewart Gibbs .

Books for adults: Find Me by Alafair Burke; The Senator’s Wife by Liv Constantine; Hour of the Witch by Chris Bohjalian (written in old English but incredible story); The

for Two” - a collection of short ‘Fictions’.

“Ken Bruen is an Irish crime writer I’ve followed for years. His witty style is hilariously ‘noir’. Good for any time and read his Jack Taylor novels and you’re hooked.”

Scott Maybee, president of NextGear Capital:

Atomic Habits by James Clear.

With two young girls, a wife, and a demanding job I’ve had to rethink how I can design my environment to optimize success in all facets of my life.

Corinne Kirkendall, PassTime’s executive vice president of compliance and regulatory affairs:

“I read about 2 books a month. Some are for a book club others are just for my own entertainment. Most of my industry books would be a drag to put in here so I went for the fun books.

“Can’t wait to see what others suggest!

“Books for family, preteen: Land of

Templars by Dan Jones; The Woman by Kristin Hannah; The Yellow Wife by Sadeqa Johnson.

Peter Kelly, CEO of OPENLANE, recommended what may be the fattest book on the list: “What It Takes: The Way to the White House,” by Richard Ben Cramer:

“This is the story of the 1988 presidential election cycle, primary and general election, as told through the experiences of six presidential candidates (Republicans Bush and Dole and Democrats Hart, Dukakis, Biden and Gephardt). Warning, it’s a long book, but I found that it moves pretty fast.

“The story jumps back and forth from candidate to candidate and moves forward and backwards through time. Over the course of the book, I learned the back story and family history of each candidate. I learned about key formative experiences (war, death of a child or spouse, recovery from traumatic injuries) that the candidates went through and which fundamentally changed their life’s direction. And of

course, the book takes you through the six campaigns, the wins, the losses and the scandals.

The author set out trying to answer the question, “How do presumably ordinary people acquire that mixture of ambition, stamina, and pure shamelessness that makes them believe they should be president of the United States?”

Jeff Martin, CEO of NIADA, mentioned he “read two old books that I really enjoyed, “How We Decide” by Jonah Lehrer and “Jonathan Livingston Seagull” by Richard Bach.

Marty McFarland, president and CEO of Kinetic Advantage:

“Culture Code” by David Coyle (modern and great)

“Be Useful: Seven Tools for Life” by Arnold Schwarzenegger “Leaders Eat Last: Why Some Teams Pull Together and Others Don’t” by Simon Sinek

Steve Levine, of Ignite Consulting: “I’d suggest my own book, “Winning the Fight: A Guide to Protect Car Dealers.” There’s really nothing else like it in terms of getting dealers to think about compliance. If that doesn’t do it, I also really like Patrick Bet-David’s “The Life of an Entrepreneur in 90 Pages.”

Jeffrey Bellant, managing editor of Used Car News:

“One of my recent reads was “The Mysterious Case of Rudolf Diesel,” by Douglas Brunt, about the inventor of the diesel engine. Fantastic book covering a brilliant inventor, his interactions with historical figures, the role of the engine in the build-up to WWI and Diesel’s mysterious end.

“I also read a just-released book “Full Time: Work and the Meaning of Life” by David Bahnsen. It makes the case that work is about purpose, not just a job and argues against the traditional view of retirement. Scary fact: a greater percentage of working-age men are out of work today than in the Great Depression!

“I love fiction and read, for the first time, George Orwell’s “Animal Farm,” a chilling book. I also read western author Elmer Kelton’s “The Time it Never Rained,” about a Texas rancher in the 1950s, struggling through a never-ending drought and trying to avoid a government handout. Based on a real life drought, this is the saddest story I’ve ever read.”

News Briefs

ServNet Announces its 2024 Scholarship Recipients ServNet revealed the winners of its 2024 Scholarship Program. Eight scholarships are being awarded to aspiring students for the 2024-2025 academic year.

ServNet’s scholarship program was established in 2016 as an ongoing initiative to help ServNet auction employees and their families pursue the dream of higher education. The ServNet Scholarship program assists full-time ServNet auction employees, their children, stepchildren and grandchildren who plan to pursue education in college or vocational school programs.

“As the leaders of family-owned businesses, ServNet owners take a deep personal interest in their employees,” explains Robert Sullivan, ServNet’s Administrative Director.

“ServNet’s Scholarship Program is both an important way to support the families who work so hard in our industry and to invest in our collective future, laying the groundwork for the next generation.”

Sullivan reports that ServNet is

presenting a total of $20,000 in scholarships this year. Eight scholarships of $2,500 are being awarded to students attending a four-year college or university.

Austin Aanenson (son of Jenny Aanenson, who works in the Human Resources Department at Mid-State Auto Auction) begins his Junior year at North Dakota State University in the fall studying Finance, with an eye to a career in investment banking and finance management.

Gage Aanenson (also son of MidState Auto Auction’s Jenny Aanenson) enters North Dakota State University in Fargo, N.D. as a freshman in the fall of 2024. He will pursue a major in Business, with a minor in Finance.

Isaac Everett (son of Robyn Everett, who works in the fleet/lease department at the McConkey Group’s DAA Northwest) begins his second year of study at Embry-Riddle Aeronautical University through its online program. He hopes to transfer to the university’s Florida campus as he pursues a bachelor’s degree in Aeronautical Science.

Lexi Faulkner (daughter of Charles Faulkner, Director of Operations at Greater Rockford Auto Auction) enters the University of Wisconsin-Oshkosh as a freshman this fall. She will work toward a degree in Nursing.

Cassie Rogers (the daughter of Tommy Rogers, General Manager of BSC America’s Specialty Sale) is a junior at Liberty University in Lynchburg, Va., where she is majoring in Music and Worship with a minor in Christian Leadership.

Robert Rossi (the son of Rob Rossi, Fleet/Lease Director at Auto Auction of New England and himself a part-time employee at AANE), will begin his freshman year at Assumption University in Worcester, Mass, in the fall. He plans to major in Finance as well as to play baseball on the university team.

Alexis Rudolph (granddaughter of Deb Rudolph, who works in Dealer Registration at Mid-State Auto Auction) begins her college career in the autumn at the University of Wisconsin-Stout in Menomonie, Wis. She will pursue a major in Interior Design, with a minor in Real Estate Property Management.

Hanna Tugado (daughter of Diana Hendrickson-Tugado who works in the Accounting Department BSC America’s Bel Air Auto Auction) begins her studies at the Temple University in Philadelphia, Pa., as a freshman in the fall. She plans a major in Mechanical Engineering with the goal of moving on to a career in the aerospace industry.

Cox Promotes Lang

Cox Automotive recently named Alan Lang senior vice president of Physical Services and Auctions at Inventory Solutions. He is responsible for guiding the reimagination of auction operations, processes and vehicle services.

Lang replaces Patrick Brennan who moved to Cox Automotive Mobility Solutions last year.

“Alan brings nearly two decades of experience to this position with deep knowledge in operations, finance, relationship building and creating high performance teams,” said Grace Huang, president, Inventory Solutions at Cox Automotive. “Alan’s ability to deliver on company and client goals will position Cox Automotive, Inventory Solutions and Manheim to continue leading our industry.”

Lang joined Cox Automotive in 2016 as Manheim divisional vice president.

Legal News

5/13/2024

State Attorney General Sues Dealership, Along with Owner

By Jeffrey Bellant

Minnesota Attorney General Keith Ellison announced that his office has filed a monster consumer protection lawsuit against Fridley used-car dealer Midwest Car Search – and its owner, Scott Spiczka.

The lawsuit alleges that Midwest Car Search: (1) misrepresents that its used cars are certified when they are not; (2) illegally adds expensive vehicle service contracts to consumers’ purchases without their consent; (3) refuses to provide warranties that it is required to provide by law; (4) fails to make accurate “Buyer’s Guide” disclosures and provide such disclosures in Spanish, as required by law; and (5) conducts business under an unregistered trade name that heavily targets and exploits Spanish speakers.

The AG is accusing Midwest Car Search of fraudulently selling more than 3,000 vehicles to Minnesotans from the year 2017 through 2022.

“They broke the law and violated consumers’ trust by misrepresenting the nature and quality of the cars it was selling, while also illegally including expensive addon products in purchases without disclosing them,” Ellison stated in the press release announcing the lawsuit.

“But that’s what Midwest Car Search did. Equally appalling is that Midwest Car Search aggressively targeted Spanish speakers through widespread advertising campaigns in Spanish and conducted sales in Spanish, only to have those speakers sign documents in English that bore no relation to the promises Midwest Car Search made to them.

“I look forward to holding these bad actors accountable for cheating Minnesota consumers.”

Steve Levine, chief legal and compliance officer, for Ignite Consulting Partners, called the filing “a very scary lawsuit.”

He said the suit not only targets the business but also the dealer individually.

“This is a real world example of the type of ‘bet the business’ lawsuits that we warn dealers about,” Levine wrote in an email about the lawsuit.

He urges dealers to conduct regular compliance reviews.

The AG’s office launched an investigation into Midwest Car Search’s deceptive and misleading business practices after receiving consumer complaints.

These included complaints from Spanish speakers, who were specifically targeted in MCS’s advertising, including through socialmedia advertisements in Spanish under the name “Coches MN,” which Midwest Car Search never registered as an assumed name as required by law.

The findings of the investigation into Midwest Car Search allege misrepresentation of vehicle certification on Facebook and thirdparty websites like carsforsale. com.

During the investigation, “the Attorney General’s Office reviewed data from Midwest Car Search’s third-party dealer management software that allegedly revealed that none of the 3,245 cars sold by Midwest Car Search from 2017 to 2022 were certified.

This was often because Midwest Car Search sold those cars ‘as-is,’ disclaimed implied warranties of merchantability, or because consumers were not provided with an inspection report.

For example, according to Ellison’s office, one consumer, H.H., reported being told Midwest Car Search’s cars were all certified, so a test drive was not necessary.

After H.H. allegedly picked up his car from the dealership, he discovered a host of mechanical problems, including but not limited to jerky steering, and the need to replace the exhaust manifold, the exhaust gasket, the tire rods, the strut assemblies, and other gaskets.

During the investigation, the AG office also “reviewed 200 individual consumer files of Minnesotans who purchased a car from Midwest Car Search and found that in all 200 transactions, Midwest Car Search failed to properly disclose that a vehicle service contract would be included in the purchase for an added cost.

Yet, according to Ellison’s office, from 2020 to 2022, Midwest Car Search charged more than 99% of buyers who required financing for a vehicle service contract at an average of more than $1,800 for the

vehicle service contract.

These vehicle service contracts were allegedly often surreptitiously presented to consumers as they were signing financing paperwork, even if the consumer explicitly declined to purchase a contract.

The Attorney General’s Office estimates the value of the vehicle service contracts that Midwest Car Search illegally added to customers’ purchases at $4.5 million.

The investigation allegedly stated that “Zachary Spiczka, a Midwest Car Search employee and son of defendant Scott Spiczka, the owner of Midwest Car Search, is among the less than 1% of buyers during that time who required financing and who did not have a vehicle service contract added to his purchase.”

The dealer was also cited for allegedly not providing an express, written warranty on sales of used vehicles, subject only to limited exceptions.

“Approximately half of the used cars MCS sold between 2017 and 2022 were entitled to warranty protection under Minnesota law based on the age, price, and mileage of the car,” according to Ellison’s office.

“Despite being required to provide warranties in connection with its vehicle sales, and despite advertising that its vehicles were covered by warranties,

“MCS routinely provided consumers with paperwork indicating their vehicles were sold as is or otherwise tried to disclaim warranty coverage in violation of Minnesota law.”

The lawsuit is the first action that the state AG has filed

against a used car dealer following amendments to Minnesota’s Used Car Law that became effective August 1, 2023.

Among other things, these amendments strengthen the scope of warranties that consumers are entitled to when purchasing a used car.

The lawsuit targets Midwest Car Search’s conduct both before and after these amendments took effect.

Used Car News reached out by email to the attorney representing Midwest Car Search but did not receive a response at press time.

Attorney Eric Johnson, of the Maryland-based Hudson Cook law firm, is not involved in the case, but said Ellison made another splash with a recent settlement with lenders.

“The AG there has been on quite a tear recently,” he said.

“I saw that he recently reached a settlement with three online lenders operating jointly under Island Mountain Development Group to resolve allegations that the companies violated Minnesota and federal consumer-lending laws by issuing illegal loans to consumers with excessive interest rates.”

In that case, Ellison’s office states that the three lenders “charged between 400 and 800 percent annual interest, in violation of Minnesota and federal consumer-lending laws.

Through these alleged illegal loans, the lenders had collected at least $540,000 from Minnesota borrowers who had defaulted on the loans and potentially much more from borrowers who were not in default.”

Keith Ellison

Digital Wholesale

5/13/2024

Auctions Balance Digital Evolution with Dealers’ Needs

By Jeffrey Bellant

The evolution of technology in the wholesale auto business has created more options for dealers to acquire, inspect and merchandise vehicles.

From MAG Now’s new LiveLanes sale to Cox Automotive’s Upside tool or OPENLANE’s launch of Visual Boost AI, dealers have new ways to boost wholesale success.

“It’s always fun when the market evolves, because there’s opportunities for dealers,” said Cox Automotive’s Derek Hansen, vice president of inventory management solutions.

“We’re certainly seeing that this year.”

Hansen said Cox’s Upside is a program that could benefit dealers in this market.

place with the promise of an absolute sale.

To help dealers maximize the return of that vehicle, Cox uses its data, such as Manheim Marketplace, to determine how to get the best results, Hansen said.

Using detailed inspections on the car, it’s placed into the right market-

“There are cars that are not retail candidates for some dealers,” Hansen said. “Ultimately, you know you will not put money into a 200,000mile Camry to retail it.”

“Once it’s put into the marketplace, buyers know it’s going to be sold, it’s not going to be pulled back,” Hansen said.

When dealers create a consistency – when buyers know the car will be sold – it takes away the doubt and

cynicism of a buyer who doesn’t want to put hours into researching a car only to see it’s a no-sale.

Sellers sometimes see it as a risk, but with Upside, there is a guaranteed figure the seller knows what they will receive, Hansen said.

Additionally, Upside gives dealers

Continued on page 8

Derek Hansen

Brian McConkey

Used Car News

5/13/2024

NAAA – Continued from page 1

Also, the vehicles those dealers are selling (in-lane simulcast) are going to be a lot of trade-ins on newvehicles purchases, instead of used vehicle purchases,” Dixon said.

“Those trade-ins will likely be younger and there are fewer used vehicle retail sales over the past several years,” Dixon said. “In addition, the percentage of trade-ins on those used retail sales has also gone down.”

So, fewer old used vehicles are making it to the auction lanes.

The survey also showed 52% of dealer sales were purchased by inlane bidders compared to 48% purchased by online bidders.

Dixon said an enhancement to this recent survey is a more precise, accurate view of digital-only sales.

“You see the average digital-only sale price of $27,500 is much higher than what we saw for in-lane digital simulcast,” Dixon said. “That’s pri-

marily the type of vehicle being sold, with later model vehicles, far fewer issues and less ambiguity.”

One of the key insights mentioned by NAAA was that the average price of units sold at auction was $15,200 down 9% from 2022’s all-time high. However, the prices in 2023 were still 34% higher than they were in 2019, before the pandemic.

“Prices are still very high,” Dixon said. “Wholesale prices rose by 65% from the beginning of 2020 until their peak at the end of 2021 and beginning of 2022; a meteoric rise for used vehicles which are historically depreciating assets.”

Even conversion rates remained strong in 2023, Dixon said.

The survey stated 2023’s conversion rate was 60.7%, which is slightly better than what was reported for 2022 and better than what was reported back in 2018-19.

The report noted that last year’s

Digital – Continued from page 6

the lion’s share of the price above the guarantee, he added.

It’s a weekly sale with all the cars put in the sale on a Friday and they sell through the weekend. That program, started last year, is in 13 markets and continuing to grow, with 600-700 cars each sale.

“I was just talking to a dealer recently and he said consumers have been driving cars longer, so the dealers has been getting much more volume over 200,000 miles than they’ve ever had before,” Hansen said.

“He’s having to adapt, because he wants to retail as much as he can, but (in his market) he can’t retail that far into the lifecycle of that car.”

Upside helps that dealer maximize profits on that vehicle without having to pour more money into it, hoping to retail it.

“The dealers love it because they can manage Upside in vAuto, which they are already using every day for acquisitions and appraisals,” Hansen said.

So, a high-mileage, older trade that comes into the dealership is plugged right unto Upside and the next day an inspector comes in to look at the car and it’s sold by the weekend.

Those cars will ultimately end up in a subprime or buy-here, pay-here lot, keeping the cycle going. Man-

heim can help find that dealer who needs the car, Hansen said.

Out West, MAG Now has had success with its Wednesday simulcast sale through its EBlock platform.

But Brian McConkey, vice president of digital solutions for MAG (McConkey Auction Group), said they recently launched EBlock’s LiveLanes simulcast software.

With the regular MAG Now sale, the online platform takes bids and facilitates the sale. LiveLanes adds a live auctioneer online to work the sale.

It was rolled out at MAG Alaska’s Anchorage location since January. The first LiveLanes event in the lower 48 states was on April 10 in Spokane, Wash.

“Auctioneers are now taking bids, working with the sellers to get more stuff sold on the block,” McConkey said.

The auctioneer can work from anywhere, although they are currently working out of DAA Northwest as they perfect the process.

So why the change?

“My dad’s an auctioneer, I grew up around auctioneers and I believe in auctioneers,” McConkey said. “The next step was to bring that extra excitement and being able to get deals down and helping to close the gap

figure was also substantially better than conversion rates from 10 years ago.

“I expect the conversion rate to remain strong, simply because there are still going to be far fewer cars flowing through the lanes than there were three or four years ago,” Dixon said.

He expects there will be a slight improvement from the low point.

“There are more commercial units flowing through the lanes than dealer units because there were far more new vehicles sold into commercial fleets - rental fleets, fleet management companies and even government fleets,” Dixon said.

Although vehicle prices declined in 2023, that drop was offset by volume growth of approximately 700,000 vehicles for an estimated total gross sales value of over $110 billion. That number was on par with 2022.

Larry Dixon

The 2023 survey data showed that 80% of auction respondents to the survey had EV charging stations, with an average of seven per auction, Dixon said.

between seller and bidder.”

He noticed the difference that a live auctioneer makes.

“If we sold 250 cars, we probably sold 50 across the block, and rest on offer,” he said.

“That’s because we had very few people repping the cars and no auctioneer putting pressure on the buyer and seller to close the gap on the block.”

McConkey has seen those numbers improve, which has also drawn more sellers to rep their cars, because now the seller can interact with the auctioneer to tell a buyer they’re close to a deal.

It’s boosted efficiency and led to more sales, showing how MAG Now makes changes to improve dealers’ experience.

Meanwhile, OPENLANE in January launched its own tool to help dealers, Visual Boost AI, new damage detection overlays for every dealer-consigned vehicle in OPENLANE’s U.S. marketplace.

The AI-powered technology supplements vehicle inspection data by prominently highlighting detected exterior damage directly on photos within the condition report (CR), making it faster and easier for interested buyers to accurately locate and assess potential defects before

making a purchase decision.

“Visual Boost AI solves a persistent industry pain point for buyers by instantly translating written CR data into an image overlay that’s powerful in its simplicity,” said James Coyle, EVP & president, North American marketplaces at OPENLANE.

“We’re proud to be the first to offer AI-powered insights on every dealer car on our marketplace. With one click, dealers can toggle the overlays and effectively get a second set of eyes to help them see anything they might have missed — like seeing the car in-person, from the convenience of your screen.

“Whether you’re on the road, on your lot or on your phone, Visual Boost AI makes it easier than ever to understand what you’re looking at so you can bid and buy confidently.”

Hansen talked about how providing tools for dealers’ success is gratifying.

“These dealers are some of the most innovative entrepreneurial business people in the industry,” Hansen said.

“It’s what I really enjoy about this business - being able to partner with these entrepreneurs and help them drive better performance day in and day out.”

Groups Take FTC to Court Compliance News

By Jeffrey Bellant

On April 24, one day after the Federal Trade Commission issued a final rule banning noncompete clauses, the U.S. Chamber of Commerce and several local groups filed suit against the FTC in the Fifth District Court of Texas.

On April 23, the FTC had issued its ruling, stating it will “promote competition by banning noncompetes nationwide, protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.”

The commission vote to approve the rule passed 3-2. The FTC proposed the rule in January 2023 and received more than 26,000 comments.

The ban will become effective in 120 days and will bar the noncompetes for future employees. Existing noncompetes for senior executives can only be enforced for employees earning more than $151,164 and in “policy-making” positions.

The U.S. Chamber of Commerce slammed the decision.

“The Federal Trade Commission’s decision to ban employer noncompete agreements across the economy is not only unlawful but also a blatant power grab that will undermine American businesses’ ability to remain competitive,” said Suzanne P. Clark, Chamber president and CEO.

After the rule was first proposed, the U.S. Chamber of Commerce sent a letter to U.S. congressmen in opposition to it.

NIADA signed onto the letter, joining dozens of other federal, regional and state associations, in opposition.

After the final rule was announced in April, NIADA again reiterated its position.

“In February 2023, NIADA, along with over 100 other trade associations and the U.S. Chamber of Commerce, sent a letter to the U.S. Congress detailing our opposition to the, at that time, proposed rule from the FTC invalidating non-competes,” said Jeremy Beck, NIADA vice president of dealer development.

“As we stated in that letter, we believe the FTC lacks constitutional or statutory authority to issue such a rule. We are disappointed that the FTC has issued their final rule, the non-compete clause rule, effectively invalidating most noncompetes currently in place and prohibiting the use of them in the future. We con-

5/13/2024

tinue to advocate for our members by opposing this rule and encourage members of the U.S. Congress to assert their constitutional authority.”

According to the NIADA, the ban does not eliminate trade secret regulations and non-disclosure agreements.

To comply, dealers must do the following:

• Come into compliance with the rule during the 120-day compliance period starting on the day after the rule is listed in the Federal Register.

• Cease issuing noncompetes as a term or condition of employment for any employees.

• Current employees whereby a noncompete is in place are immediately invalid, with one exception relating to “senior executives.”

• Notify, in writing, employees and former employees that are under a noncompete, excluding defined “senior executives” that their non-competes will not be enforced.

“The NIADA Board, and CEO Jeff Martin have discussed the ruling briefly,” said Gordon Tormohlen, NIADA president and independent dealer. “The intent of the ruling seems aimed at employees, who might suffer financial losses due to a non-compete. It excludes higher income employees who are in positions who would be more likely to harm their former employers if they went to work for a competitor.

“NIADA employs, and occasionally talks to employment prospects that fall into the non-compete area, thus we are monitoring the ruling. However, at this time we believe the ruling will be challenged, and perhaps, altered before it is finalized.”

Clark, in comments on the Chamber of Commerce website, offered a harsher critique of the rule.

“Like many of the rules, the FTC’s blanket ban on noncompetes defies its agency’s constitutional and statutory authority, shifting power from Congress and into the hands of three unelected commissioners,” she wrote.

“The FTC only has the authority to identify specific, individual instances of unfair competition on a case-by-case basis, but Chairwoman Lina Khan has decried this approach as “whack-a-mole” and pledged instead to lay down prescriptive, often one-size-fits-all rules, without letting the Constitution stand in her way.”

Dealer News

5/13/2024

Georgia Dealer Wins $100,000 at Carolina Auto Auction

By Jeffrey Bellant

Carolina Auto Auction marked 34 years with a 1,300-car sale, but a card game with a $100,000 prize stole the show.

The auction, billed as the second largest independent auto auction in the southeast, held its 34th anniversary on April 17 and it’s an event the dealers won’t soon forget.

Especially Georgia dealer Glen Pounds, who has 100,000 reasons to remember it.

Pounds, a regular at the sale, participated in a game where dealers pick cards from a board to win prize money.

He was one of three dealers who were chosen by raffle to play.

Any dealer who correctly picks the right 10 cards in a row, wins the grand prize of $100,000 – something no dealer has done before.

Pounds, a dealer from Toccoa Auto

Mall, in Toccoa, Ga., was skeptical of anyone’s chances to win.

“I’ve been watching this game for years, I thought thee’s no way anyone will ever get to 10,” he said.

Pounds was the third dealer in line to try and win. One dealer got to six before coming up short.

“I was even rooting for the first guy when he got to five,” Pounds said.

Keith Foster, the auction’s marketing manager, said there was a lot of distracted chatter until Pounds reached the fifth card .

“Then when he hit seven, everything got quiet, like ‘This might actually happen, guys,’” Foster said. “When he pulled No. 10, it just blew off the roof.”

Pounds won the $100,000 prize and was more surprised than anyone.

“At first, it’s like, I can’t believe this just happened to me,” he said.

Everyone celebrated as Pounds

went around high-fiving everyone in the auction.

What are Pounds and his wife going to do with the money?

“We’re going on a couple of trips,” he said. “Other than that, we’re just

going to invest in us.”

Vann Humphrey, general manager at Carolina Auto Auction, also was thrilled for Pounds..

“It’s an amazing feeling to participate in moments like this,” he said.

Photo Courtesy of Carolina Auto Auction

(HUNDRED) GRAND TIME: Glen Pounds, owner of Toccoa Auto Mall in Toccoa, Ga., wins the $100,000 grand prize during a game at Carolina Auto Auction last month. His win caused an auction-wide celebration.

Finance News

5/13/2024

Auto Originations Grow Despite ‘Tough Credit Landscape’

Auto loan originations climbed for the second straight month, signaling a possible shift toward easier borrower qualifications for car loans amid a tough credit landscape, according to VantageScore’s March 2024 CreditGauge released April 30.

The national credit-scoring and data insights company’s monthly analysis highlights the overall health of U.S. consumer credit. The average VantageScore 4.0 credit score rose from 701 to 702 in March. The lowest VantageScore 4.0 credit score is 300, while the highest score is 850. For the first time since May 2021, delinquencies fell across all Days Past Due (DPD) categories and all loan products (Credit Card, Personal Loan, Auto Loan and Mortgage) on a month-over-month basis. The across-the-board decline in late payments can be partly attributed to seasonal patterns as consumers used tax refunds to pay

down debt. Despite the reversal, the delinquency rates were still higher than a year ago and at levels observed around the start of the pandemic.

“Consumers are watching for signs that the economy is nearing that Goldilocks ‘just right’ moment, but we are not there yet,” said Susan Fahy, executive vice president and chief digital officer at VantageScore.

“While consumer delinquencies saw a positive trend in March resulting in the average VantageScore credit score going up by a point, the state of consumer health remains uncertain as inflation and high borrowing costs persist.”

In March, delinquencies declined for the month across all DPD categories and all products. In the 30-59 DPD category, all products recorded month-overmonth declines, with Auto Loan delinquencies experiencing the

most notable reduction, decreasing by 0.30% compared to February 2024.

That development was also true in the 60-89 DPD and 90-119 DPD categories, where Auto Loan delinquencies declined month-

over-month by 0.13% and 0.3%, respectively.

Year-over-year, across all DPD categories and products, delinquency rates for the month were higher compared to March 2023.

FRIDAY, JUNE 28th FRIDAY, JUNE 28th 12th

TUESDAY, JUNE 18th TUESDAY, JUNE 18th

Retail Markets

5/13/2024

IOWA

Kim Nelson, owner, Nelson Automotive, Polk City, Iowa

“I’ve been in business for 42 years, with 14 years in this location.

“A lot of people are saying that COVID caused things to move online, but it was already headed in that direction.

“We keep an average of 30-40 cars in inventory. We sell 12-14 a month. Our sales fluctuate so much now. It depends on what we buy. I do it a little differently. We do a lot of builders, insurance vehicles. We have a good partnership with a body shop.

“COVID was definitely good for sales because everyone was staying at home. It was like a fever. People were buying things online, they’d come in here, maybe even fly in here, or have the car shipped without even

looking at it. The government put out millions of dollars, the politicians caused this inflation.

“We go to a local ADESA auction. If I see something I like I’ll come back here and buy it online. But we do a lot of business through Copart online.

“We don’t do any financing through here; we’ve got a credit union that requests that we send the people there.

“The majority of our advertising is online. We still have a local paper/magazine that we use.

“We definitely try to sell cars under 100,000 miles, and more likely 60,000 miles.

“Someone who wants to start out in this business might want to consider something else. Nowadays it will cost $1 million just to stock a lot.

“We’ve invested in the technology to keep our online inventory listings current. We update it daily.

“The last car we sold was a ’14 Chevy Equinox trade-in with 180,000 miles on it. We sold it for $6,000.”

PENNSYLVANIA

Tom Brandis, Advantage Auto Sales & Credit, Quakertown, Pa.

“I’ve been in this business for 31 years. We had the original location from 1992 to 2019 then I moved that to Quakertown. We had a second location in Allentown for almost 20 years.

“COVID practically ruined my business. I know some people had record years but talk to those people and see how they’re doing today. Buy-here, pay-here dealers were putting that money on the street. I was selling a $4,500 car before COV-

ID and that car went up to $7,000. We scaled back our business after COVID to half the size, which isn’t necessarily a bad thing.

“I’ve always carried about 20-25 cars in stock. And we’re selling about 15 a month.

“We sell probably 30 percent SUVs and 70 percent cars.

“Everybody wants a Honda or a Toyota but I carry a lot of Kia’s and Hyundai’s. We also sell a lot of Chevys and Fords, and the Jeep Patriot.

“I have buyers out on the street that bring me cars. I attend auctions because I’m the executive director of the state association, but not to buy cars anymore.

“My reconditioning costs used to be $1,000 a car, but now I’m selling a finished product. Pennsylvania has a pretty strict state inspection.

“Most of the advertising

Compiled by Ed Fitzgerald

we do is social media: Facebook, Instagram and a lot of referrals and word-ofmouth.

“Our cars are probably about 12-15 years old and the mileage is usually between 90,000 and 120,000.

“Our customer’s average down payment is about $1,200.

“Even after 31 years in this business, I can’t tell you what might happen next. Some days three people will walk in the door and buy three cars and there weren’t even any appointments.

“I tell dealers to make sure they have a good relationship with their bank and their lenders.

“The last car we sold was a 2014 Patriot to a repeat customer. It had 117,000 miles and we sold it for $14,995. In some cases, we have sold to over four generations of customers.”

Wholesale Markets

5/13/2024

NORTH CAROLINA

Kim Joyce, general manager, Greensboro Auto Auction, Greensboro, N.C.

“We’ve seen a little bit of a boost with tax refunds. We were running about 1,500 cars, maybe a little less, on our Wednesday sale, not huge. Our sales percentages is probably in the 60s. Back in the day, this auction -pre-pandemic – would run close to 3,000 cars. But the pandemic has changed the business. We’re running 10 lanes but we have 16.

“For us, the sale has been steady, still is in the (spring market). Things seem to level out in the summertime. We’ve got our folks out beating the bushes to get some more dealer business. You try to keep your bigger customers happy and then work on the dealer business.

“The average price across

the block is $22,000 to $24,000. We do a lot of business with the credit unions and a lot of the banking institutions.

“Repos have picked up. We get a lot of rental cars and repos. That’s a lot of what we’re doing now.

“Dealers (volumes) are relatively small for us. Our volume is probably 65% industrial fleet.

“We recently had a classic car sale, something we’ve been doing for almost 13 years.

“Normally we have them in February, July and November. But we had some folks who had a few collections they wanted to move, so we plugged an extra sale into April. We ran 500 vehicles and some auto memorabilia during the three-day event.

For the regular classic sales, we’d run 750-800, but we were happy with this one

that we just plugged in.

“Our average collector car sales percentages are in the high 60-70%.

“As we head into the summer months, I think we’ll maintain. ”

OKLAHOMA

Kyle Clopton, general manager, Oklahoma Auto Exchange, Oklahoma City, Okla.

“Our volume is up slightly from this time last year. Also, for Q1, we were up 11% or 12% for vehicles sold over 2023. We didn’t see a huge increase in consignment, the sales percentages were really strong. Tax time was a really short period this year.

“We’re running between 700 and 750 cars per week. It’s been really good.

“Our average sales percentage through Q1 was about 69%.

“We’ve seen a pretty

steady increase of commercial accounts. Our volume is probably 60-65% franchise store trades (franchise and some independents) and 35-40% commercial. We’ve seen a nice bump in commercial activity. We have Stellantis Financial Services, Exeter, Wheels and LeasePlan (which was bought out by Wheels). That segment of the business continues to grow. We’ve made the most of the opportunity.

“For the first quarter, the average price across the block was $8,300, which is a good number for us.

“Obviously, some of the commercial accounts run more expensive cars. So, we’ve been able to increase our buyer base to better serve car dealers in Oklahoma. A couple of years back our average price was $4,500 to $5,000. Now we can serve more dealers, whether it’s

Compiled by Jeffrey Bellant

lot guys or (buyers of commercial/fleet/lease) cars.

“Our online presence has increased significantly with 105 to 110 online buyers on May 1. We can improve that, but we hadn’t had a significant online presence in the past. It’s something we’re looking to build. On that day we had 377 badges in the physical lanes.

“We’ve never strayed away from our bread-and-butter customers which includes buy-here, pay-here – guys who might come once a month to buy two truckloads of cars. We’re able to take care of both franchise and independent buyers.

“In March we had our 1,000th sale. That was pretty special. I’m also excited about what the rest of the year brings. The energy in the lanes is really good. Everybody is staying relatively positive.”

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05/13/2024

2020

JUNE 2024

ADESA Boston

June 7, 21

508-626-7000

ADESA Charlotte June 13, 27

704-587-7653

ADESA Chicago

June 21

847-551-2151

ADESA Cincinnati/Dayton

June 25

937-746-4000

ADESA Golden Gate

June 11, 25

209-839-8000

ADESA Indianapolis

June 11, 25

317-838-8000

ADESA Kansas City

June 11, 25

816-525-1100

ADESA Lexington

June 6

859-263-5163

ADESA New Jersey

June 13, 27

908-725-2200

ADESA Salt Lake

June 18

801-322-1234

ADESA Tulsa

June 14

918-437-9044

ADESA Washington DC

June 19

703-996-1100

Columbus Fair

June 5, 26

614-497-2000

Manheim Atlanta

June 12, 13, 19, 27

404-762-9211

Manheim Dallas

June 5, 18, 19

877-860-1651

Manheim Denver June 19

800-822-1177

Manheim Detroit

June 13, 27

734-654-7100

Manheim Fredericksburg

June 6, 20

540-368-3400

Manheim Milwaukee

June 5, 19

262-835-4436

Manheim Minneapolis

June 12

763-425-7653

Manheim Nashville

June 4, 5

615-773-3800

Manheim Nevada

June 28

702-730-1400

Manheim New England

June 25

508-823-6600

Manheim New Jersey

June 5, 19

609-298-3400

Manheim Atlanta June 12

404-762-9211

Manheim Dallas June 18

877-860-1651

Manheim Milwaukee June 19

262-835-4436

Manheim Nashville June 5

615-773-3800

Manheim Nevada June 28

702-730-1400

Manheim Palm Beach June 5

561-790-1200

Manheim New Orleans June 5, 19

985-643-2061

Manheim Orlando June 4, 11, 18, 25

800-822-2886

Manheim Palm Beach June 5, 6

561-790-1200

Manheim Pennsylvania June 7, 13, 14, 21, 27, 28

800-822-2886

Manheim Phoenix June 6, 20

623-907-7000

Manheim Pittsburgh June 19

724-452-5555

Manheim Riverside June 4, 6, 18, 20

951-689-6000

Manheim Seattle June 26

206-762-1600

Manheim Southern California June 13, 27

909-822-2261

Manheim Tampa June 13, 27

800-622-7292

Manheim Texas Hobby June 13, 27

713-649-8233

Southern AA June 19

860-292-7500

Manheim Atlanta June 12

404-762-9211

Columbus Fair June 5

614-497-2000

Manheim Dallas June 18

877-860-1651

Manheim Milwaukee June 19

262-835-4436

Manheim Nashville June 5

615-773-3800

Manheim Nevada June 28

702-730-1400

Manheim Orlando June 18

800-822-2886

Manheim Palm Beach June 5

561-790-1200

Manheim Pennsylvania June 13, 27

800-822-2886

Manheim Phoenix June 20

623-907-7000

Manheim Riverside June 6, 20

951-689-6000

Manheim Seattle June 26 206-762-1600

ADESA Boston June 7, 21

508-626-7000

ADESA Charlotte June 13, 27

704-587-7653

ADESA Golden Gate

June 25

209-839-8000

ADESA Salt Lake June 18

801-322-1234

Columbus Fair June 26

614-497-2000

Manheim Dallas June 5, 19

877-860-1651

Manheim Pennsylvania June 13, 27

800-822-2886

Manheim Riverside June 6, 20

951-689-6000

Manheim Seattle June 26

206-762-1600

Manheim Fredericksburg June 6, 20

540-368-3400

Manheim Milwaukee June 5

262-835-4436

Manheim New England June 25

508-823-6600

Manheim New Jersey June 5, 19

609-298-3400

Manheim Orlando June 11, 25

800-822-2886

Manheim Pennsylvania June 14, 28

800-822-2886

Manheim Pittsburgh June 19

724-452-5555

Manheim Seattle June 26

206-762-1600

Manheim Southern California June 13, 27

909-822-2261

Southern AA June 19

860-292-7500

Manheim Atlanta June 19

404-762-9211

Financial Services*

Manheim Dallas June 18

877-860-1651

Manheim Milwaukee June 19

262-835-4436

Manheim Palm Beach June 5

561-790-1200

Manheim Pennsylvania June 13, 27

800-822-2886

Manheim Riverside June 6, 20

951-689-6000

Tony Moorby Disconnected Jottings From

When we were still in our Tennessee home, Publix, the supermarket chain, had opened several stores around us in Williamson County. Their stores marked a distinct improvement in presentation, cleanliness and customer service compared with some of the incumbent stores.

With our recent move to South Carolina, we were relieved to find their stores around us. However, we noticed the exquisite customer service isn’t quite as embracing as we’d come to expect, the produce isn’t always fresh (raspberries often form a mush by the time they make it to the kitchen counter) and the whole store renders a lackadaisical approach to their customers – a smile is as rare as hens’ teeth!

Kroger’s had always taken a back seat for us when

choosing a grocery store; all the sagging yardsticks above belonged to Kroger’s as a mainline shopping store and we avoided them in deference to more expensive outlets like Fresh Market or Whole Foods. But the purse can only bear so much! Here, the roles have been reversed; we spend less in Publix and more in Kroger’s. Their local store takes up half a block and apart from groceries you can acquire clothes, kitchen and bathroom gadgets. They even have a wine bar! The cheese counter is where I can find every kind of exotic and exciting, weird and wonderful stuff including the infamous French soft cheese called Époisses. It’s so stinky it’s banned from any public transportation in Paris! They also have manned checkouts! You can opt to do it yourself but when

By Myles Mellor

you have a week’s worth of groceries it’s nice to have someone who knows what the heck they’re doing and a helping hand packing the bags.

At Publix, the converse applies; if you have less than 10 items you can choose a not-so-smiling attendant. If you are disabled you can go there too.

My first visit to the selfcheckout was an embarrassing disaster – looking nervously back at the line of waiting customers giving me the “rolled-eye” treatment and raised shoulders as I waited for the overworked attendant to swipe this code or press that button. Buy a bottle of booze and see what happens – the hapless attendant has to confirm my Driver’s License to match my graying beard and sagging frame.

I now adopt the attitude

that it’s the store’s management’s fault, not mine. If there are lines, then they have to wait for my blundering, clumsy efforts to succeed to the point of getting a receipt.

At Costco (which, by the way, should rule the world) they measure and anticipate the gathering throngs of shoppers and man the checkouts accordingly with greased lightning efficiency – which is measured by the amount of customers handled and the amount of goods purchased by each.

On a Friday evening at Publix I can’t imagine the loss of efficiency (and customers?) are offset by paying well-trained, welcoming checkout operatives who speed up the experience.

In Franklin, Tenn., I knew the names of every one of them and more importantly, they knew me. The manager

knew my hobbies and interests, spiking our passing remarks with anecdotes and pleasantries that weren’t just platitudes. I can’t wait for RFID technology allowing me to walk out of the store, scanning the whole cart and billing my bank account as I walk to the car.

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