NIADA Honors National Quality Dealer
By Jeffrey Bellant
LAS VEGAS – Virginia’s Donald Sullivan Jr., of Sullivan Auto Trading in Fredericksburg, Va., received the 2024 National Quality Dealer of the Year Award during the NIADA Annual Convention & Expo here last month.
Black Book’s Susan Moritz presented the award and said the video stories of the nominees brought tears to her eyes. She praised the giving spirit of all the nominees each and every year.
“This year’s National Quality Dealer of the Year said it’s their goal to stay out on the cutting edge, with the latest technology and equipment and keep their customer’s satisfaction coming,” she said. “They offer financing for almost every credit situation and
provide services to protect their customers throughout the entire ownership process.
“A fellow dealer summed it up by saying this dealer has a commitment to excellence, customer satisfaction and ethical business practices that makes them an asset to their community, professional association and our industry.”
Sullivan Jr. is a second generation car dealer who spent his youth washing cars and continuing to pick up knowledge about the automotive industry. After college he jumped into the industry and never looked back.
“Focusing on people, processes and technology, he’s helped build the dealership to two locations, selling 150 vehicles per month out of a 300 vehicle inventory,” Moritz said.
Sullivan Jr. has also written a curriculum for the state dealer
NIADA Convention
7/15/2024
Texas Dealer Wins NIADA Lifetime Achievement Award
By Jeffrey Bellant
LAS VEGAS – NIADA gave its biggest award to Texas dealer George Karlen, who received a rare honor, the Michael R. Linn Lifetime Achievement Award, named for Linn, the longtime CEO Emeritus, the first recipient of the award. It was created to honor individuals who have contributed a career of exceptional and selfless service to the association.
“Man, what an award,” Karlen said. “Thank you, thank you very much. I’ve known Mike Linn for over 40 years and there’s probably no person more dedicated to NIADA than Mike Linn. It’s really an honor to get this award.”
Karlen talked about his dad starting in the car business in 1932.
“He had his first lot in Dallas and he loved the car business,” he said. “He was a proud used-car dealer.”
After Karlen got out of the Navy, his dad asked him to join the business.
“I said, ‘well, I’ll try,’” Karlen said. His father told him that dealers were having trouble with Washington D.C. and dealers needed the association to help them out.
“The government is trying to regulate us and they’re going to
Quality
regulate us right out of business if we don’t get some help,” Karlen said. “He said ‘if you’ll just dedicate one day a week working for the association, I’ll run the business.’”
Karlen worked with J.O. Woodward, TIADA past president, and asked him to lend a helping hand.
“We went from lot to lot, trying to get these dealers to sign up for the association,” Karlen said, “J.O. was a talker and he would just flat shame them into it. We signed a lot of dealers.”
Later another past president, D.T. Mosley, came to Karlen and said, “We need some representative for Texas in the national association, would you do that?’
“I said, ‘yeah, I’d do that.’”
Years later, Karlen became president of NIADA.
“My wife Marcy and I traveled over 15 states at that time,” he said. “We were going to state conventions and meeting a lot of good dealers.’
One of the goals was to buy a building for NIADA and they found one in Arlington, Texas, around the corner from Texas Stadium and bought it.
“After five years of fundraisers, all of the executive committee pledged $5,000 to that building and we got it
paid off,” Karlen said.
He pointed out that 800 dealers attended the 2024 convention. If each dealer would share with another dealer what you’ve learned and sign just one dealer a month, then next year NIADA would have around 9,000 new members.
“That’s not impossible to do.”
Karlen said it’s been a long journey
Dealer – Continued from page 1
academy, the proceeds of which he asked to be sent to an organization he founded to help abused, trafficked, abandoned, homeless and disadvantaged children.
His dealership also participates in a charitable event called Single Parent Saturday, where more than 100 parents come to the dealership, receive a free oil change and vehicle detail while activities are held for the children.
Sullivan is also a certified master dealer and is president of his state association.
As he accepted his award, Sullivan said he was “overwhelmed” with the honor.
“I believe that any successful person, regardless of their story –I don’t think that anyone gets to where they are by themselves,” he said.
“I don’t believe in self-made men. I think there is always a community
of people that surrounds them and helps them get to the position where they’re at.”
Sullivan thanked his state association, its Executive Director Alvin Melendez and his team, along with NIADA.
Sullivan thanked his parents for providing him with an education and thanked his brothers working back at the store.
“I’m thankful for my wife (Kaitlin) who I met when I was 15 and started dating when I was 16,” Sullivan said.
“We continued through high school together, went to college together and got married as soon as we got out.
“And tomorrow is our 16-year wedding anniversary.”
Sullivan said there were times when he wanted to leave the industry because of pressure.
“She reminded me that God has ordered my steps and he had a plan for my life,” he said, before choking
up.
“The Bible says that a man who finds a wife finds a good thing,” Sullivan said.
“There’s one more person that I want to thank. My family will testify that there’s really only one person who deserves the attribution for why I’m standing here today.
“He’s God’s son, the sinner’s savior. I understand the day we live in it’s not popular to give glory or praise to God but I would be a fool if I stood up here and gave any attribution to myself.”
Sullivan ended his speech pointing out all the flawed people in the Bible.
“God used every single one of them, what’s your excuse?” he said.
Last year’s winner, Dan Johnson of New York, offered opening remarks discussing his experience after winning the award.
“It’s incredible to me that a year has passed by already since I was up here nervously awaiting the results,”
and Marcy has been by his side the whole time.
“I just wanted to tell her how much I appreciate it and I love her,” Karlen said. He also thanked friends and family who attended the ceremony.
“And Mike Linn, if you’re listening to me, we appreciate you, we love you and we’re praying for you,” he said.
Johnson said. “This is an award we strive not only to earn but to keep.”
“It’s a mark of achievement but it’s not the end.
“It’s all the more reason to keep pressing toward the pillars that this award represents.”
He said the award was truly humbling.
Another award winner during the convention’s final night was Paula Frendel, the executive director of the New York/New Jersey IADA. She received the Association Executive of the Year Award, as the top state executive as recognized by the Association Executive Council.
Another winner was Gjergj Pecaj, a sophomore at Northwood University in Michigan, studying automotive marketing management. Pecaj received a $10,000 NIADA/ Northwood University Scholarship presented by Cox Automotive.
Photo by Jeffrey Bellant
ONE OF A KIND: Donald Sullivan Jr. (from left) presents Texas dealer George Karlen with NIADA’s Lifetime Achievement Award. They are joined by Karlen’s wife, Marcy, and NIADA CEO Jeff Martin.
News Briefs
In Memoriam: Ron Hope
Ron Hope, 80, of Franklin, Tenn., died Friday, June 21, 2024, peacefully at his home. He was CEO and Board Chairman of CARS Recon, Inc., an associate member company of the National Auto Auction Association.
Hope worked in the automotive auction industry for over 50 years and was the founder of CARS Recon that has existed now for over 20 years. He served in the United States Navy and had a great passion and was involved in motorsports racing. Though he had a love for racing and his rebuilt dragster “Rat Trap,” his biggest pride by far was his family.
He is preceded in death by his parents Harold and Margaret Hope and his sister Patricia Aldrich. Ron is survived by his wife of 53 years, Dianne, and his children Wendy and Todd Landsiedel, Brian and Rebecca Hope, Virginia and Keith Veal, Rebecca and Brian Anderson, Deborah and Richard Wright, Jeneal Whitmore, his brother Steven Hope, sister Sherry King, 18 grandchildren and 1 great-granddaughter.
Funeral services were scheduled
for July 6 in Franklin, Tenn. In lieu of flowers donations can be made to St. Jude Children’s Research Hospital or Shriners Hospital.
In Memoriam: Eugene McDonald
Eugene “Gene” McDonald died on Monday, July 1, 2024. McDonald was inducted into the NAAA Hall of Fame in 1985 and was the esteemed co-founder and former President of Black Book and was bestowed the NIADA Ring of Honor in 1994.
While serving with Black Book, his visionary initiative ensured that the book of wholesale auction values would conveniently fit into a shirt pocket. His legacy extended beyond Black Book; after selling the company to Cox in 1965, he served on their board of directors.
McDonald played a pivotal role in introducing Cox to the wholesale auction world, which led to their first auction purchase in Manheim, PA in 1968, and ultimately grew their footprint to what is known today as Manheim Auctions, the world’s largest remarketing company. McDonald was also instrumental in
the eventual sale of Black Book from Cox to its current owner, Hearst, in 1980.
Preceded in death by his wife Barbara, McDonald leaves behind two sons, Jeff and Greg.
Arrangements for his memorial were not scheduled before press time.
Vroom Hit with Massive Fine
The Federal Trade Commission has taken action against online used car dealer Vroom for misrepresenting that it thoroughly examined all vehicles before listing them for sale and failing to obtain consumers’ consent to shipment delays or provide prompt refunds when cars weren’t delivered in the time Vroom promised.
Texas-based Vroom has agreed to a proposed settlement that would require the company to pay $1 million to refund consumers harmed by the company’s conduct and prohibit the company from further misleading consumers and failing to provide required disclosures.
“Vroom promised the fast deliveries of thoroughly inspected cars, but sped right past compliance,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Online car dealers and other Internet sellers must provide required disclosures just like any brick-and-mortar businesses that comply with the law.”
In its complaint against Vroom, the FTC alleges that the company failed to follow the Used Car Rule, the Pre-Sale Availability Rule and the Mail, Internet, and Telephone Order Rule (MITOR).
Vroom’s website listed 184 points of inspection that were checked on every car they sold. But numerous consumers complained about the condition of the cars they received from Vroom, with everything from loud grinding noises, bald tires, and worn brakes being reported. Under the terms of the proposed settlement, Vroom will be required to pay $1 million to the FTC to be used to provide refunds to consumers who were harmed by the company’s unlawful practices.
The settlement also prohibits the company from making misleading claims to consumers about inspections or shipping, and requires Vroom to document all claims about promises it makes about shipping times to consumers, as well as requiring Vroom to follow the requirements of MITOR, the Used Car Rule, and Pre-Sale Availability Rule.
BHPH Underwriting
7/15/2024
Dealers Discuss Underwriting Strategies for BHPH
By Jeffrey Bellant
LAS VEGAS – Underwriting remains critical for buy-here, payhere and lease-here, pay-here dealers and a panel of top dealers discussed their tips and tools at the recent NIADA Convention & Expo.
Ben Goodman, NIADA Senior 20 Group Moderator, led the discussion.
Dan Grosvenor, of 5 Star Auto Plaza in St. Louis, Mo., has been in business 27 years. Half of his business is retail and the other half is lease-here, pay-here (LHPH) –which he converted to from buyhere, pay-here (BHPH).
“I’ve kind of gone back and forth between retail and in-house, depending on what the market is doing,” he said. “Over the past 14 months, as we’ve seen the sub-prime lenders pull back, more of my focus has been on in-house LHPH than it’s ever been.”
Underwriting for his business first involves determining whether to guide the customer to LHPH or a retail deal.
Grosvenor uses AutoZoom for underwriting. Store managers determine how the deal is going to be structured and who they are going to approve, he said.
After the deal is delivered, it goes to a funder who verifies all the information put in by the managers.
“As far as verifications go, we use Promax CRM, which is tied in with the Equifax Work number, so in many cases we can verify employment right then and there,” Grosvenor said.
He also uses a tool to verify addresses.
Grosvenor’s main challenge is to determine if a customer is a LHPH or retail customer.
“If a car is $13,000 or less, (we) better be making $4,000 gross up front today. Otherwise they’re going to be delivering all of our cheapest cars and giving away all of our hardest cars,” he said.
Grosvenor also incentivizes his team so that if it’s a low-gross retail deal, the staffer doesn’t get paid as much.
“Most of our retail deals are much higher ACV vehicles that we wouldn’t carry in-house anyway,” he said. “If we only had the one program, we’d lose a lot of customers as they graduated out of it.”
On LHPH deals, Grosvenor doesn’t take a first payment due at signing, though he used to. He takes a $350
security deposit.
Jason March, general manager, March Motors in Jacksonville, Fla., has been in business since 1998 and sells 91 cars a month, almost all BHPH.
“I have one store,” he said. “I opened another store last year and closed it in six months. It didn’t work so well.
“We have 45 people working for us and we do all of our recon on site.”
March’s customers are primarily Spanish-speaking, about 60%, so the business gets “creative” in how it verifies income – looking at bank statements, paycheck stubs and occasionally it takes a job letter.
“We are checking Equifax for most of our customers coming through who have a Social Security number or a T.I.N.” March said. “In the last couple of months, we’ve been doing a light background check which has been a nice addition to our underwriting.”
The background tool is InstantCheckmate and is less expensive than other more in-depth tools, he said.
The dealership has one underwriting manager who looks at every application and will have a
personal interview with a customer if they qualify with their current income, job time and residence time, March said.
“We take a paper credit application with a signature at the bottom,” he said. “We haven’t had a scoring model that we use, but we haven’t had any issues with the model we’ve been using for 26 years.”
April Hanson is from Coast to Coast Motors, which is based in Houston with seven stores in Texas and Oklahoma.
“We’re 100% BHPH and we sell about 350 cars a month,” she said.
“We use the Neo scoring model. Everything (underwriting) is centralized. All the applications go into one room where everything is verified. (Verification) is all done over the phone.”
The company has seven underwriters.
Hanson said the dealers will also do a post-sale interview with the customer through the finance department.
Coast to Coast also uses TLO, but on a case-by-case basis, she said. It also helps with skip tracing.
However, she added there is Public Data Check, which is very
inexpensive and can give dealers a comprehensive background check as well.
“Unfortunately, the criminal people just don’t want to pay that well,” Hanson said.
Grosvenor also uses a background check tool – TLO – to help weed out the career criminals.
“I wasn’t so sure I wanted to that, so I tested whoever had been our early-default, angry customers in the lobby,” he said.
“We started doing background checks on them after the fact and guess what? A big chunk of them would have had a more difficult time getting into our program if we had started with the background checks.”
Customers who have a felony in the last eight years or misdemeanors for theft or fraud, Grosvenor will put them in a higher tier, but still put them in cars.
Grosvenor said it’s critical to be consistent in any of your underwriting to protect yourself.
Grosvenor audits his scoring model quarterly. Hanson said her dealership will audit when it looks like
Continued on page 12
Photo by Jeffrey Bellant
DEALMAKERS: Jason March (from left), April Hanson and Dan Grosvenor, joined by moderator Ben Goodman, discussed underwriting tips for the buy-here, pay-here market during the NIADA National Convention & Expo in Las Vegas last month. Panelists discussed verification tools, inventory strategies, deal structures and other issues.
Auto Fraud News
Auto Fraud Expert Warns Dealers about High Tech Theft
By Jeffrey Bellant
LAS VEGAS – For dealers who think they are safe from thieves or fraud, Houston Police Sgt. Darren Schlosser offered a wake-up call at the NIADA Convention & Expo last month.
Schlosser is a 27-year veteran of the Houston Police Department and works in the fraud unit of the auto theft division. He regularly speaks to auto dealers to offer them tips on how to protect their businesses.
Texas Gov. Greg Abbot recently appointed him to the Texas Department of Motor Vehicles Board.
During a presentation to dealers, Schlosser talked about two years he spent investigating financial crimes and how it opened his eyes.
“That is the fastest growing segment of crime out there,” he said. “Because it’s a relatively low
exposure for criminals and if you do get caught, it has a light penalty range.”
Schlosser said the problem with fraud is if you haven’t experienced it, you eventually will.
“Every crime committed can have nexus to a vehicle,” he said. From car jackings to cars used to commit crimes.
Houston’s vehicle fraud unit has stopped 177 “fraud in progress” incidents. In 2023, it conducted 85 investigations involving $5 million in total vehicle value. The department recovered 47 stolen vehicles in 2023 and recovered $2.5 million in total vehicle value in 2021. The department has charged 43 suspects, including over 100 felony charges.
Working with dealers, Schlosser will receive a call from a dealer who has an ID that doesn’t look right. The dealer sends a copy to Schlosser, and
he checks it.
“Then we go into law enforcement mode,” he said. “I ask them ‘What are they wearing? What are they driving? Is there anyone with them? What are they trying to buy?’”
Schlosser then wants the dealer to sign a purchase order with the customer locking in how much they are trying to steal in the transaction. No. 2, he wants them to complete a credit application, which locks in the identify of who they claim to be. He is also calling fellow law enforcement that there is a crime in progress, with a description of the suspect and whomever he is with and what they are driving.
“In about 50% of the time we catch somebody in the act they’re in a vehicle, and that vehicle has also been taken by fraud from another situation,” Schlosser said. “Here’s the beautiful part. What can that criminal’s defense be to that crime?”
Darren Schlosser
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Floorplanning
7/15/2024
Well-Managed Floorplans Offer Dealers Room to Grow
By Jeffrey Bellant
LAS VEGAS – NextGear’s Kyle Ballinger, AVP of sales, led a session offering tips for independents on how to make the most out of their floorplan.
“We talked about the last handful of years and we know that’s been rollercoaster,” he said.
Topics included interest rates, the presidential election and job creation and their effect on the industry.
“The back half of the presentation was about things we believe from a discipline standpoint – a process standpoint – that we believe you should be aware of to stay ahead of the curve in 2024 and beyond.”
Ballinger hit on some of the most important keys to success in this market.
“It’s about continuing to acquire the right inventory,” he said.
“Obviously we know that money is made in acquisition.”
But Ballinger reminded dealers not to forget about marketing and advertising. Casting a wide net is important, he said.
“Even when times are tough and there’s an unknown, you must stay aggressive in that marketplace,” Ballinger said. “You have to.”
Being on top of pricing in a changing market is also vital.
He added that watching expenses is critical.
Ballinger encouraged dealers to use a floorplan, but added it has to be the right fit for the dealer, even if it’s not NextGear.
“The advantage of using a floorplan provider is that you can expand your footprint with the right amount of inventory,” he said. “So find out how to use a floorplan provider to your best benefit.”
However dealers have to be
disciplined in their use of floorplans.
“You’ve got turn times and expenses,” Ballinger said, “How are you looking at those expenses? Times get tough and people start getting more conservative. The other side is if you’re too conservative, you’re probably missing out.
“If you’re waiting for something to take place to feel good about it, then you’ve missed the curve.”
A floorplanner has to be curious about your business, he added.
When things start to get away from the dealer, they have to reach out to the floorplanner to have a conversation about options and how to get out of a bad turn.
“We throw around ‘partnership’ a lot in our business, but you want someone who can come in and say, ‘this is where I see a potential problem,’” Ballinger said, “There’s no silver bullet.”
Kyle Ballinger
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Commercial News
7/15/2024
Commercial Market Offers Opportunities for Independents
By Jeffrey Bellant
LAS
VEGAS - Work Truck
Solutions offered independent dealers an option for a new market as the company joined a host of exhibitors at the NIADA Convention & Expo here in June.
Steve Henning, director of marketing and Geoff Shepard, heavyduty sales manager, chatted with dealers who are either already in the commercial truck business or want to learn more.
“We’ve been in business for 11 years and we help commercial dealers,” Shepard said. He’s been in the automotive industry for over 20 years total.
He said dealers could start by either running a few commercial vehicles through their site or go all in on commercial, or a combination.
Work Truck Solutions is a onestop shop where dealers, buyers or
upfitters can connect, while also providing operational analytics and other tools for the commercial business.
The company’s website offers an online market place called Convoy.com and the tool called VAST (Vehicle Acquisition Search Tool) where dealers can acquire commercial vehicles.
The site can include anything from box trucks and service trucks to a Ford Transit, cargo van or Promaster van.
“However we can help dealers move more metal, we’ll do it,” Shepard said.
Work Truck Solutions will consult with dealers to help them determine what buyers are looking for in their area and what’s hot or what’s not.
Henning said, like the regular car market, the commercial market varies based on region and job market.
“In Texas and Florida, there’s a lot
of landscaping and pool maintenance business,” he said. “In the Northeast you may have some of that in the summer, but in the winter months you’ll have snow removal.”
Henning said they are always looking at business and market trends and one trend is clear.
“One of the trends we’ve seen recently is dealers looking for new revenue streams,” Henning said. “What else can I do because the market has shifted in recent years? So a lot of dealers now are looking for a new revenue stream opportunity and suddenly their eyes are open to commercial.”
There are always opportunities.
During housing booms, the need for pickups and construction vehicles are high. When housing slows, people need work for remodels or improvements.
Henning added, “When you get a good commercial customer, they
might need two or five vehicles. While the retail customer is buying one vehicle every few years, a business or a fleet will need multiple vehicles.”
Henning and Shepard talked with a couple of dealers at the convention who are exclusively in commercial.
“They recognize the value and ROI in that,” Henning said. “Some others have talked to us who say they have a handful of commercial, but they know that’s the direction they want to go.”
One factor is they need to increase their presence and that’s where Convoy.com comes in.
A dealer might have a customer at the lot looking for a vehicle the dealer doesn’t have in stock.
That’s when VAST can help the dealer find the specific truck the customer is looking for. Convoy has over 200,000 vehicles on it and VAST has more than 100,000 units.
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Used Car News
Underwriting – Continued from page 5
repos are on the rise. March will look at all the repos at the end of each month.
One audience member asked if the credit scoring firms look at the dealership’s individual results and ad-just based on those results.
Hanson said Neo has offered to adjust, but underwriters at Coast to Coast feel since they know how Neo works, they can adjust themselves as opposed to refiguring out things.
“A long time ago, they took all of our data of past performance and dumped it into whatever data people do and said, ‘This is what your best deal looks like and this is what your worst deal looks like,’” Hanson said. “Bs and Cs and Ds come in between.”
Goodman urged dealers to check out vendors and their scoring models to find the best fit. But Neo will look at your specific model to provide a scoring model.
Goodman added that whatever your scoring model, build your portfolio on your top tier customers and everyone else should be an exception.
An attendee asked what percentage of customers fall into the top tier compared to other tiers.
Hanson said when Coast to Coast was in a growth mode, about 50% of deals went to ‘C’ customers. Today it’s flipped, with 75% As and Bs and 25% Cs.
“I’m going to say to everybody in the room, don’t try to grow like crazy,” Hanson said. “It’s never a good idea. Just stair step it.”
In terms of PTI (payment to income) ratio, Grosvenor said if he has a weaker customer, then he’ll try to make it up in the deal structure to get to the total score that he wants.
All of the panelists use GPS, but only Grosvenor uses starter
interrupts.
On the inventory side, March is very systematic.
“We trying to sell only the same 12 cars every month,” he said. “We’ll have five or six of the same models on the lot (for example). We give very little selection to the customers as far as model of vehicle.
“What we’ve tried to do is take previous data from our portfolio of vehicles that perform very well and just have those vehicles on the lot.”
March said he’s found the dealership attracts a better customer to those same 12 models “than we did when we had a more diverse inventory selection.”
They include about 20 Corollas a month; 15 Honda Pilots and the third top car is a Camry.
“We used to sell about 35 Silverados a month, but we’ve tried to transition out of that because
the newer ones started to have a lot of transmission problems,” March said. “You can never fix that transmission fast enough for that customer.”
If a customer doesn’t’ have a credit report, March tries to get a 20% down payment of the sales price, on a $15,000-$17,000 car with about $1,500 of reconditioning on a markup of $5,500.
Payments average $125 weekly on a biweekly payment, based on net income.
Charge-off rates for March are about 1% of the 1,850 accounts on the books. The cash position on the repo is about $6,000, depending on when he repos the car.
“We actually use AccuTrade for all of our repos and take a couple of different numbers to determine the value that we bring the repo back in at,” March said.
Used Car News
Auto
Fraud – Continued from page 6
signed documents to further the crime.
“There’s nothing they can say about it and the success rate is 100% on those crimes,” Schlosser said. “We’ve done about 177 of those (cases).”
There are only a few vehicle fraud units in the country, yet Schlosser said trends are that vehicle fraud in 2024 will reach over $8 billion –that’s just cars.
The top vehicle finance crimes include document fraud, identity fraud and synthetic identity.
Schlosser said his experience shows that independent dealers are typically better at identifying document fraud within the industry.
“You guys rock,” he said. “Keep up the good work.”
Franchise dealers don’t do as well because the front end person is usually a salesperson who just wants to sell a car and they’re not the one
who bought the car.
Identity theft is what Schlosser calls his “bread and butter,” when people unlawfully use Personal Identifiable Information (PII) from another person. The police usually hear about it when the victim notifies the person.
In some cases, people use this info to create a new account with that info. Criminals usually find that info over the dark web. Schlosser said everyone is subject to this if you’ve ever gotten notice saying your data has been compromised through a business or medical bill, etc.
Sometimes, criminals might hold onto that for a few years before ever using it.
The other fraud type is synthetic identity.
Synthetic identity is when someone uses a fraudulent Social Security number, with a fully synthetic or hybrid-synthetic identity, Schlosser
said.
In a fully synthetic identity case, a person will create a name, date of birth and obtain a CPN (credit privacy number) which is a nine-digit number created to intentionally look like a Social Security number, he said.
You create a secured credit card to establish credit and build a strong credit profile while also creating fraudulent documents for the fake name, a burner phone number for employment information and submit online credit apps to avoid faceto-face interactions.
At least one criminal in Schlosser’s database has more than two dozen fraudulent CPNs.
Schlosser said a bad sign is when a 30-year-old man has a six-month old credit profile; that’s suspicious.
Synthetic fraud is getting more prevalent.
“They can identify synthetic iden-
tity in about 5% charged off accounts through finance companies,” Schlosser said. “But those charge offs are valued at 20% of the total losses.”
While most crimes and thefts involve men, fraud is 50/50 men and women, he said.
He urges dealers to buy ID-scanning devices, the type that sucks the ID in and spits it out. Security features are built in and highly successful in spotting fake IDs. Also, look beyond the documents to make sure they look like they should.
Schlosser added that dealers should research the purchaser. When the customer is in front of you, ask to send a text message to them to see if their phone lights up. Check emails before finishing the transaction, too.
If you can take a thumbprint of customers in your state, they are a good way of protecting the contract.
How I Increase My Margin on Every Car
Retail Markets
7/15/2024
TEXAS
Christopher Donnelly, owner, Your Car Store, Conroe, Texas
“I have been in business four years and 10 months total.
“We keep an average of 16 vehicles in inventory. We sell an average of 20 vehicles a month. The percentage of our sales are cars 18%, SUV 48%, and 27% trucks and minivans.
“We sell more import vehicles than domestics.
“We spend an average of $809 reconditioning per car.
business and I’ve made about every mistake you can make. But some of the info out there might not help you personally. I ask some old-timers if there’s a profit motive for this business. They say, ‘back in the day I’d go to an auction and buy a car for two grand. We get $1,500 down and have $500 on the street.’ Today, people are living off 20% of what they paid for the car, with 80% on the street. You need 12 months of payment before you’re whole on the car and I don’t like that. The only
going to do a BHPH note, why not do the most valuable one possible? Understand the loan to value rate, what valuation to use. There are so many parameters and factors that come into this. The more this is discussed and there’s a dialog, the better we get.
“The last car we sold was a 2009 Honda Pilot, with 198,784 miles. We sold it for $9,995.”
WISCONSIN
Ken Mueller, dealer principal, Budget Auto
comfortability factor, since COVID.
“We keep roughly 50 cars in inventory. We sell about 30 a month.
“We’re buy-here, pay-here so we try to stick with cars and vans.
“We sell a lot of domestics, and if we sell imports, it’s probably going to be Hyundai or Kia.
“We got away from GPS and starter-interrupts. They changed the law here in Wisconsin about 10 years ago. We do a lot of repeat, referral business. But we’re
Compiled by Ed Fitzgerald
Some cars it might be zero dollars and then the next is up to $1,500.
“We advertise online, the social media sites. I remember years ago with newspapers as soon as the ad was published half the cars were sold.
“Right now, the average age of our cars is probably 20152019. As long as the car has been taken care of, we’ll go up to 200,000 miles.
“We also sell Lance Cabo scooters and we are an authorized Monday Motorbikes dealer. No
Wholesale Markets
7/15/2024
FLORIDA
Nate Simonson, general manager, America’s Auto Auction-Pensacola, Pensacola, Fla.
“We are running about 300 (vehicles) weekly. We’re holding steady. On average, we’re still holding at 60+% sold.
“We have 150 dealers in lane and 100-175 on average online.
“Our volumes are close to 50/50 between dealer and commercial. On the commercial side, we focus not just on the big accounts but the little ones. We try to fill the funnel with the small guys and treat them exactly the same. That way you don’t have that big dip if (you lose a big account).”
“Our average price across the block is probably around $8,500.
“For the last sale of every month, whether it’s a four
or five week month, we have our specialty sale. We have motorcycles and anything that’s part of a toy sale goes into that. We run about 50 units in that. We have a couple of commercial accounts that run a lot of boats and RVs with us.
“One of our clients is Ally 3PR, which is their third party lending account. So, they remarket vehicles for credit unions and groups like that. They also have what’s also called the Ally SmartLane. They will remarket vehicles for dealers and a lot of dealers that go on there are independent dealers. We don’t have the Ally Financial account, but because of my relationship with them (as general manager at America’s Baton Rouge Auto Auction), they gave us the opportunity to just do the SmartLane on our own, on their behalf. We
also get a rep from Ally for that sale.
“We have that every other week and that’s great for the independent dealers and it’s been very successful in Pensacola.
“We’re expecting some growth with our commercial accounts due to the success we had with them. We’re one of the top auctions for Exeter Financial in our region, so we’re in talks with other accounts because they see how we’re doing. We’re expanding our territory.”
IDAHO
Kyle Egbert, general manager, Dealers Auto Auction of Idaho LLC, Nampa, Idaho
“Things are rolling really well for us, right now.
“For our regular sale, every second and fourth week, we typically run five lanes and if it’s our first and third weeks,
we have an RV/powersports sale and run a sixth lane.
“Volumes have been really healthy, as far as dealer cars and repossessions. Looking at last month’s numbers, if I include GSA, I think we’re offering 560+ vehicles a week. Without GSA it’s going to be about 480.
“Conversion rates for the general sale are right around 65%. We usually have about 200 dealers in the lanes every week, unless it’s a promotional sale when we’ll get up around 300. Online, its anywhere from 200-220. For the first time ever our online presence is starting to grow bigger than our in-lane presence.
“We’re running about 70% dealer and 30% fleet lease/ repossession. I think it will be 60/40 pretty soon. Alex Bunn, our fleet/lease manager, is doing a fantastic job of growing this into a very
Compiled by Jeffrey Bellant
good spot for fleet/lease/ repossession vehicles. Those repossession numbers are up year-over-year.
“Our average price is just under $11,000, around $10,800.
“Our RV/powersports sale is an absolute hodge-podge of items. You’re getting diesel-pushers, fifth—wheel, bumper pull trailers, snowmobiles, jet skis, boats; it’s a little bit of everything.
“Our local GSA sale is held here, every three weeks. We also do remote sales for Guam, Hawaii, and Alaska.
“Typically, those are lower-mileage, late-model and older models.
“We have our Country Concert Sale coming up on Aug. 13-14, with a Diamond Rio concert on Tuesday night with food and beverages. We hope to roll through 700 to 800 vehicles.”
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7/15/2024
2020
2020
ADESA Boston
August 2, 16, 30
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800-822-2886
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724-452-5555
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909-822-2261
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860-292-7500
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404-762-9211
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877-860-1651
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262-835-4436
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August 28
561-790-1200
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Tony Moorby
Last month brought the passing of an abiding friend and associate; not just to me but a countless myriad of others too.
Ron Hope was a fascinating man. Most people have a passion for this or that; some passions come and go or ebb and flow. Ron’s fervent pursuit of anything he involved himself with never seemed to wane or abate. But he also had a gentlemanly way of insinuating his will, to the point where others would come around to his way of thinking or opinion.
Some passions stood front and center; firstly his family was on the top of the list. He was devoutly fond of his huge retinue of children and grandchildren – and a great-grandchild. I was lucky enough to attend his 80th birthday party last month and a great many
of the celebrators were his progeny.
He avidly supported every effort they made to grow.
Salt-flat racing record runs? Go for it! Artistic painting pursuits? All there, all the time, anywhere in the world. And, of course, building businesses.
It was through his businesses that he developed unfaltering friendships, literally around the world from a British Lord and Lady to drag racing enthusiasts in New Zealand.
He had a passion for process and how it could improve existing undertakings, especially in our industry. He was involved in new vehicle preparation for manufacturers and brought improvement capabilities to used vehicle reconditioning within the auto auction industry; a talent that used to belong to the clockers
and cutters one at a time!
This led to helping the manufacturers understand the importance of how to present their used inventory and protect resale values.
Tom Cunningham from Ford Motor Company took these processes seriously in the early days of remarketing.
Ron never saw geography or language as barriers to start or build a business or share his advice with others.
He embraced Britain and Europe as fertile grounds for business development and he did it by leveraging his personality, converting colleagues to life-long friends. Traveling with Ron was like being with the Pope! And as a result he could regale you with stories about personalities and places without being a show-off.
Ron never saw age as standing in his way to achievement either. Right
up to the last he was piloting The Rat Trap – a FuelAltered drag racing machine that he used mainly for exhibition runs around the world. I’ve been present at many of these heartstopping events to watch him and his crew, headed by his son, Brian, prepping the car in record time. Equally, he held several records at the Bonneville Salt Flats.
In spite of his fast-paced life, he always had time to spend with his friends and colleagues. And even though he had enough trophies and recognitions to line his office and garage at home, he was always self-effacing about his successes. In thirty some odd years, I never once heard him brag about himself –about others? Certainly, all the time.
Charity was another passion that he gladly indulged. The more success,
the more he shared. Underwriting the way for others’ betterment was a matter of everyday course and many have known the benefit of his gracious giving. Ron’s iconic course through life and our industry is a lesson for all. I’m proud to call him ‘friend.’
