Amelung: ‘Bring in that New Genera tion’
Craig Amelung is the incoming president of the National Auto Auction Association. He is Manheim’s Mid-Atlantic Market General Manager overseeing Manheim Fredericksburg, Manheim Baltimore-Washington and Manheim Harrisonburg.
UCN: How did you get started in the auction business?
Amelung: I got my degree from the University of Baltimore, which at the time was a two-year institution. I decided I wanted to go into business and the university had a good business program with a lot of working professionals.
Honestly, I got started in (auctions) by answering a blind ad in the newspaper in 1993 for a credit collections manager for Anglo-American at what was the Baltimore-Washington Auto Exchange. That was Tony Moorby and Mike Richardson. I don’t know what they had, 14 auctions at the time.
I literally left the interview and said, ‘Man, I don’t want that job,’ thinking it didn’t seem very professional.
Then I went back for my second interview, they were selling 200 Subarus and the English auctioneer sold the 200 in about 40 minutes. I was hooked.
So, I was hired as credit collections manager and this was before the days of AuctionACCESS, so I was setting credit limits for dealers and managing license renewals. And all that.
About four months in, they asked me to assume the role of office manager. That’s back in the day when you did manual accounting entries. I kind of felt at home as the
accounting side of me got to flourish a little bit.
Then I got to be the fleet/lease manager at the sale.
UCN: What did you like the most about that job?
Amelung: I liked the people. I still do, it’s not about the cars. For me, it truly is about the people. The cars are just a means for us to meet people. I was there from 1993 to 2002.
Manheim bought ADT in October of 2000. I stayed there as they went through the transition and got to understand the culture. Then I went to Manheim Fredericksburg in 2002 as an assistant general manager and I just loved it.
Then in the summer 2003, they still owned the old Fredericksburg property and wanted to start it as a night sale. They wanted it to be an independent type of environment. I wanted to put in for the job after working through the summer to get the sale ready.
I went over there and started what was essentially a greenfield location for the company. It was called the Virginia Vehicle Exchange. We had no simulcast, no kiosk, no extra technology. We ran it for four years.
We shuttered that in March 2009, while we’re doing that, I went to work at corporate. It was all about working with auctions and putting in best practices. But what I specifically worked on was doing a lot of work with the Georgia Tech engineering team. They would come in to do engineering projects in the summer
They would do studies and we had these studies of auctions around the country, but we didn’t do a good job of following up. I started flying around the country (looking at the issues from these studies), whether it was about efficiency or improving a process or whatever.
One of the places I went to was Seattle and one of the issues they were looking at was getting flow through his building on sale day.
At Seattle, where (incoming NAAA President-elect Eddie Lafferty) is now, they had done all these time studies, filmed the sale from the roof and other things. Ray Priest was the general manager then. I went in and said, ‘Ray, we can fix your flow problem with $250,000.’ He asked what I was talking about. I said, ‘Take out that island and it will give cars the ability to swing around and they won’t get bottle-necked.’ This is all about having a different perspective.
UCN: In what way is it about having a different perspective?
Amelung: There’s an Australian motivational speaker named Vinh Giang who has a YouTube video on ‘perspective’ that I probably watch every 60 days. And this video talks about how we kind of live in this world where we are in it, but when we bring in someone else from the outside, who’s not in it
Continued on page 3
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9/16/2024
NAAA President - Continued from page 1
every day, they see things that you don’t see.
UCN: Where did your career take you from there?
Amelung: I stayed at corporate for almost five years. I went back into the field in 2013 as an assistant manager into Manheim Fredericksburg. I held that for six months and got promoted back to general manager in March 2014. I did that until the company started focusing on market centers. Then I was given the opportunity to take the three locations – Fredericksburg, BaltimoreWashington and Harrisonburg – as a market center about three years ago. I like being able to provide some influence. At this point in my career, it’s about how to help people get to the next level. I’m big on process and big on flow, so I like that. The one benefit it gives me is I don’t live in it every day at the three locations. It allows me to pick up on conversations like, ‘Could we do it this way?’ Could we think a little differently?’ I’ve got almost 32 years in the auction industry, so experience plays a factor. But not doing it every day in the lanes also plays a factor (in having a different perspective).
UCN: How did you get involved in NAAA and becoming an officer/ leader in the association?
Amelung: I think 1996 was the first convention I ever went to. To be in that environment was intimidating, when you had 2,000+ people at the convention. But when I had that four to five years at corporate, I got engaged with the NAAA committees, like the standards committee. I was part of the original rewrite of the arbitration policies, for example. I also live in Fredericksburg, Va., which is close to Washington D.C., so I started getting engaged in the legislative committee. I started doing some things on Capitol Hill and got invited to the Day on the Hill events. It made sense, I was a car ride from D.C.
Then, I’ve always been involved with the legal side of the business. I like that. So all of these things morphed into working with NAAA.
UCN: How did that lead to you getting involved in leadership and now, as incoming NAAA President?
Amelung: I really had that as a
PRESIDENT: Craig Amelung is
president during the NAAA World Remarketing Convention in Orlando, Fla. which takes place Sept. 30 through Oct.
Manheim’s Mid-Atlantic Market General Manager overseeing its Fredericksburg, Baltimore-Washington and
bucket list thing in 2013-2014 and trying to figure out, how do I do his?
I started to talk to people in the business and they said there’s basically two paths; one is through the local chapters and the other is through active engagement in the committees. I felt like I could make a greater impact by being active and engaged in the committees.
Then I was asked to be on the board about four or five years ago.
UCN: Did you have a mentor on the board that helped you navigate this leadership track?
Amelung: One of the leaders I looked up to was Mike Browning (current executive vice president). Mike’s been engaged in the association for a long time and is a former past president. I’ve had many conversations with him about how to do that. He’s definitely been an advocate for me in the association.
Also, the opportunity to join the board when there was a vice presidency opening was an honor. I had conversations with the leadership of Manheim prior to that about being president. I was given the blessing from Manheim leadership. They supported me whole-heartedly. The rest as they say is history.
For me, this is an opportunity for me to give back. I’ve done it with the Virginia Independent Automobile Dealers Association in assuming leadership roles there. I’m a former
past-president of that.
UCN: How does NAAA handle the contentiousness of an election year?
Amelung: I think our industry reacts pretty quickly to things going on. We’ve been through this with different election cycles. I think the big thing that comes out of this election, from a national strategy perspective, involves EVs. Depending on who gets into office, that’s probably one of the biggest plays that comes out of this.
UCN: Anything you learned while traveling with outgoing President Eric Autenrieth?
Amelung: One of the big benefits of traveling with Eric is that he’s been an independent his whole career. And one of the questions I was asked by the team at Manheim was what was the No.1 thing that I wanted to accomplish as I came in as president.
I wanted to get tighter with the independent auction operators and Eric has helped me do that. He’s got a high reputation in this industry. Everyone speaks highly of his family. So, to be able to travel with Eric and go into independent auctions and meetings has been great. Our friendship that I think we’ve developed over the past year-plus of trav-
eling has really been the biggest win for me.
UCN: What do you want to accomplish in your term?
Amelung: I want to carry on some things that started since I got into this. Working directly under Garrison Hudkins when he was president, it was that we have to leave it better than we found it. I think he accomplished that.
Eric’s focus this year has been on chapter involvement, which to me is about increased participation of our membership.
Member involvement has got to be our primary focus.
None of us can get it done in 12 months. Over these last two years we’ve done a lot to move the NAAA forward with our convention strategy and meeting strategy. Also, looking at the not-so-glamorous things like by-law review and governancetype topics, things like that.
We just need to carry these things forward to bring the association into 2025. Up until this year, we hadn’t had a lot of that administrative type of review for, in some cases, 12 or 14 years. I want to carry some of that blocking and tackling forward while also figuring out how to leverage our members to bring in that new generation.
Photo by Jeffrey Bellant
MR.
pictured above during a visit to Manheim Detroit this summer. He will take the reins as NAAA
3. Amelung is
Harrisonburg locations.
News Briefs
NIADA Hires Lobbying Firm
To grow the voice of independent car dealers, NIADA is joining forces with the bipartisan government relations and public policy group Hance Scarborough, LLP.
Hance Scarborough will focus on expanding NIADA’s footprint on Capitol Hill in Washington, D.C., and by engaging with lawmakers and regulators on critical policy issues important to independent automobile dealers. The firm will also be monitoring legislation across the nation at the state level.
“We are thrilled with the opportunity to represent NIADA in Washington, D.C. and look forward to working with the association’s members and staff to further the legislative and regulatory priorities that will improve the ability of dealers to sell cars,” said David Pore, Partner, Hance Scarborough, LLP.
Located near the nation’s capitol, Hance Scarborough started in 1994 and represents many major U.S. and international corporations,
trade associations, non-profits, local governments, and universities, providing strategic advice and counsel and direct legislative and executive branch government relations services at the local, state and federal levels.
Hance Scarborough has three former members of Congress, five former chiefs of staff and legislative directors in the House and Senate, several of whom have also had experience serving in various federal agencies.
“Hance Scarborough brings experience and expertise to help grow the influence of our independent dealers during a critical time of expanding regulation and oversight,” said NIADA CEO Jeff Martin.
“We look forward to working with the firm and its experienced team to make sure our dealers are represented on the national and state levels on critical issues impacting the used car industry.”
Members of the firm will attend NIADA events, starting with Policy Conference, and state association
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events to provide legislative and lobbying updates.
Northwood Honors Alumni
The Northwood University is proud to announce the recipients of the 2024 Outstanding Alumni Awards, which honor alumni who have significantly impacted their professions, communities, and beyond.
“These individuals are a testament to the power of a Northwood education and our alumni’s impact across the globe,” stated Julie Adamczyk, Senior Alumni and Engagement Officer. “They are leaders, innovators, and role models who embody the values of Northwood University and inspire us all to strive for excellence.”
Receiving the Achievement Award is Nicole Longhini-McElroy (’01 and ’05 MBA), Global Vice President of Product Development at Recaro, a company in the automotive aftermarket industry that produces automotive seating and lifestyle products for motor enthusiasts.
Dan Saar (’98) and Greg Rancilio (’91) — are this year’s Leadership Award honorees. Both have demonstrated exceptional leadership in the automotive and education sectors.
Saar, a resident of Harrison Township, Mich., is Executive Director of Business Development at S&P Global, a company in the auto data industry that provides governments, businesses, and individuals with market data, expertise, and technology solutions for confident decisionmaking.
Rancilio, a resident of Oxford, Mich., is an adjunct college professor at the University of Arizona. He retired after 33 years of service with EDS/ADP/CDK Global, a global provider of dealership management software solutions (ERP) and professional services to the automotive retail and adjacent industries.
This year’s Young Alumni Award recipients are Chris Grant (’20) and Katie Holton (’18 and ’19 MBA).
Grant is an attorney with Ben Abbott and Associates in Garland, Texas. He made his mark at Northwood through a successful run on the Northwood Mock Trial Team.
After launching his legal career, Chris continues to give back to his alma mater by assisting the Northwood Mock Trial Program.
Holton, a Financial Analyst for Ford Motor Company, graduated in 2019 through Northwood’s Bachelor/MBA track with an accounting degree. She also was honored in 2023 as part of Northwood’s inaugural Class of 20 Under 40.
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NAAA News
9/16/2024
Manheim Seattle GM Becomes NAAA President-Elect
By Jeffrey Bellant
CARLETON, Mich. – Eddie Lafferty, general manager of Manheim Seattle, will be installed as president-elect of the National Auto Auction Association at the NAAA World Remarketing Convention in Orlando Sept. 30-Oct. 3.
Lafferty met with Used Çar News at Manheim Detroit as part of NAAA’s visits to auctions across the country.
The current NAAA vice president moves up into his new position, behind incoming NAAA President Craig Amelung, general manager of Manheim’s Mid-Atlantic Market Center.
“I started in the business in 1984,” Lafferty said. “My parents owned dry cleaners. Then my father passed away and my mother didn’t want to operate the businesses anymore.
Lafferty was attending college at the time and his mother asked him to leave school and help her prepare and sell the businesses.
“So, I quit school and helped her sell the businesses,” Lafferty said. “They sold very quickly and, as a result, I couldn’t go back to school right away.
“So, my best friend’s grandfather owned a Porsche-Audi-Volkswagen dealership and he asked me to come in and babysit his Porsche
dealership because they hadn’t sold a Porsche in a long time. He just wanted me to be nice to customers.
“Well, I very quickly sold him out of his inventory.”
That started Lafferty in his retail career which lasted until 2008, so he’s been around a little while. He worked for three different dealer groups in Washington during that period.
“I worked in roles from sales to finance to service,” he said. “I think the only department that I didn’t work in was parts. I didn’t have much interest there.
In 2008, the dealership had a change in strategy so Lafferty, looking for a new opportunity, moved over to the wholesale side of the automotive business.
“I found a job with Manheim Seattle,” he said. “Julie Picard was the person who hired me in as a fleet lease manager.
“Very quickly, I began assimilating the other departments, like the factory sales and GSA, which we had the time, and also absorbed transportation at the time.
“I was very blessed. Julie and I had a very great relationship and a profound trust so she really helped me accelerate my career very quickly.”
After Manheim promoted Picard to a regional position, Ray Priest
took over general manager duties and Lafferty was named assistant general manager in 2012.
“In 2015, I was promoted to general manager at Manheim Nevada and I worked there four years to the day,” Lafferty said. “I was asked to come back to Seattle in 2019 (as general manager).”
During his time in Seattle, Lafferty helped the auction win 50 awards and accolades from many national commercial accounts.
Lafferty was asked what he likes about the auction business compared to his old life in automotive retail.
“Oh my gosh, well, first it’s Monday through Friday, which is kind of nice,” he said. “It’s not a hard thing to love.”
But it’s also the nature of the auction business that Lafferty loves.
“I think what it’s really about is the frenetic pace,” he said. “It’s the movement and the number of customers we touch and come and contact with.
“I love retail and I still have many customers who reach out to me. However, the wholesale business is more impactful in a greater way.
“Many of my friends are leading dealerships or owning dealerships, so I have the opportunity to still work with them and support them in a different way.
“It’s definitely given me a differ-
ent perspective, but all of the skills I learned on the retail side translated really well into the wholesale side.
“But I could add to that sense of urgency and response times so providing excellent customer service has always been a critical component for my success, a drive for me to make sure that we’re always exceeding customer expectations.”
Lafferty said his service in NAAA grew out of the culture that Picard had established at Manheim Seattle, where it was about helping people to grow in their skills and careers.
“Julie wanted to network me very quickly throughout the industry,” Lafferty said.
“One of the ways she got me involved was with the NAAA.”
Lafferty’s first NAAA was in Washington D.C. in 2008 and he was “blown away” with the experience.
He said it was a great opportunity to meet a larger community of people in the auto industry.
“But it was about making significant connections that help me serve my customers better,” Lafferty said.
“It was also about learning so much about the industry overall.
“Leveraging that network has been very instrumental in my success.”
Compliance News
9/16/2024
FTC Tests Legal Theory in Suit Against Large Dealer Group
By L. Jean Noonan
Last month, the Federal Trade Commission issued an administrative complaint against one of the nation’s largest dealer groups. The complaint names the parent company, three dealerships in Texas, and the general manager of those dealerships. In this case, the FTC is alleging unlawful credit discrimination and charging for voluntary protection products without a consumer’s consent.
The FTC accused three David McDavid dealerships in Texas of saddling customers with hidden fees for unwanted add-on items — especially Black and Latino consumers. In related news, Coulter Motor of Tempe, Ariz., agreed to pay $2.6 million to settle a lawsuit that alleged it engaged in deceptive online pricing and charged Latino buyers more in interest and add-ons.
But a court will not decide the Texas case, at least not in the short run. The FTC has elected to bring its charges administratively. That means its evidence will be heard initially by an administrative law judge. Both the FTC staff and the dealerships will present evidence and cross-examine the other side’s witnesses in a hearing set to begin in April 2025. After the evidentiary hearing is completed, the ALJ will file a recommended decision. The FTC commissioners, acting much like a court, will adopt the ALJ’s proposed decision, modify it, or set it aside. If the FTC concludes that law violations have occurred, it will issue a cease and desist order. If this happens, the dealerships may ask a federal court of appeals to review the FTC’s order.
Let’s look at what the FTC said the dealerships did wrong. The first issue is “unauthorized and deceptive” charges for VPPs, such as vehicle service contracts and products that protect a car’s appearance. The complaint alleges that the dealerships added “unwanted” charges to the purchase of the car, sometimes falsely telling consumers that they were required to buy the products. The FTC said that charging consumers without their “express, informed consent” was an unfair practice.
The second issue involves claims of discrimination against Black and Latino consumers. The alleged discrimination happened by charging Black and Latino customers more than non-Latino White customers
for the same VPPs. This practice, according to the FTC, caused customers who financed their purchases to pay higher costs “on average” than similarly situated non-Latino White consumers, in violation of the Equal Credit Opportunity Act and Regulation B.
This case differs from most unfair or deceptive acts and discrimination matters that the FTC has brought against other dealers—or other nondealer companies. Most of these cases are resolved by the company agreeing to settle the allegations without litigating them. That may be the better option for some companies, even if they believe they could have won if they had gone to court. Litigation is expensive, and it consumes the valuable time of the companies’ leadership. Fighting the charges can keep the matter in the public eye longer, increasing reputational harm. And the outcome of litigation is rarely certain. So, settling is often the better choice.
These dealerships have chosen to assume those costs, at least for now, by fighting the FTC. And that decision may give all dealerships and their lawyers a rare look under the hood of an FTC case -- a look we never get when a matter is settled. The hearings before both the ALJ and the FTC are typically open to the public, and we will all be better off from the transparency the hearings will provide.
Here are just a few of the questions that might get answered.
• When the FTC alleges that charges were “unauthorized,” but the paperwork contains the consumer’s signature that the consumer knows the product is voluntary and wants to buy it -- sometimes in several places in the deal jacket -- can the FTC ignore these signed contracts?
• When the FTC alleges that the unauthorized charges were “widespread” based on telephone interviews with customers, were the questions and methods fair to the dealerships? How long in the past were the purchases?
• What is the difference between “consent” and “express, informed consent”? What is the FTC’s legal basis for saying express, informed consent is required?
• In alleging that the dealerships charged Black and Latino customers more for the same add-on products, “even when accounting for other factors that could affect the cost of add-ons,” what factors
did the FTC control for? Minor differences in statistical methodologies can make a big difference.
• When the FTC alleges that the dealerships “target Black and Latino customers with packed addons and higher-priced add-ons, what is this claim based on?
• The discrimination count in the complaint alleges that, in credit transactions, the dealerships “impose higher costs on Black and Latino applicants on average than on similarly situated non-Latino White applicants.” The basis for this claim is woefully unclear.
Even if a creditor did charge a minority group more for a non-credit product, that would not violate the ECOA, which applies only to credit transactions. The complaint says nothing about discretionary rate spread disparities, So, what sort of discrimination in a credit transaction is the FTC talking about? Any discrimination in setting the underlying price of the product would be a bad practice, but would it be discrimination in an aspect of a credit transaction?
Assume a dealership, on average, charged customers in a protected group more for a non-credit product than customers in a non-protected group. Assume that some of those customers financed their purchases. All other things being the same, customers who financed a protection product at a higher price will pay a slightly higher total finance charge because they are paying interest on a higher amount. Is this the basis for the FTC’s discrimination claim?
If so, it is a novel theory that I have not seen in my many decades of practicing law. Essentially, the FTC would be saying, “The creditor did not discriminate in setting any credit terms. But some customers financed higher amounts than others, resulting in this group paying a higher finance charge. If customers in a minority group had a higher amount financed that is based solely on an average difference in pricing one part of the purchase, that’s credit discrimination!”
No, it is not. If anything, it is discrimination in pricing a non-credit product. The fact that the product might then be financed on equal, nondiscriminatory credit terms does not turn the conduct into credit discrimination.
The ECOA clearly prohibits intentional discrimination. Proving intent is always a challenge, and especially so when it is based on average dif-
ferences in prices. The charges for products are negotiated with customers by hundreds or likely thousands of employees in over 150 dealerships over many years. Until the FTC staff analyzed the pricing of various products to different racial/ethnic groups, it seems unlikely that anyone at the dealerships knew about the differences, much less intended the outcome.
The complaint addresses this possibility by adding a disparate impact claim, which is based on a legal theory that looks only at the outcome and does not require intent. Whether disparate impact is a valid theory under the ECOA is hotly contested and unresolved.
FTC Commissioner Andrew Ferguson wrote that he has reservations about whether the courts would agree that the ECOA imposes disparate impact liability on creditors. Ferguson repeated these reservations in his public statement in this case. Commissioner Ferguson also noted that this case did not allege that discrimination was an “unfair” practice under Section 5 of the FTC Act, a claim that the FTC has included in settled cases with auto dealers. This new and aggressive legal theory of “unfair discrimination” has been embraced by both the FTC and the Consumer Financial Protection Bureau. The theory says that discrimination is unfair, presumably in any kind of transaction and involving any group of people the agencies want to protect. This means that Congress must have intended to ban all discrimination when it added the ban on unfair or deceptive acts or practices to the FTC Act in 1938— but no one noticed until now! Because these cases were settled, no court will weigh in on this “novel theory,” he notes. “The only inference to draw is that the majority (of the FTC) does not want a court to look under the hood of its new Section 5 theory.”
But we will get a look under the hood at the claims the FTC has made in this case. And we may get answers to many important questions on which the FTC’s thinking and evidence has not previously been available to the public in its settlements. Stay tuned.
L. Jean Noonan is a partner in the Washington, D.C., office of Hudson Cook, LLP.
© CounselorLibrary. Based on an article from Spot Delivery. Single print publication rights only to
States Name Quality Dealers Dealers
9/16/2024
By Jeffrey Bellant
SHELBY TOWNSHIP, Mich. –
The Michigan Independent Automobile Dealers Association was one of several groups to recently name their state Quality Dealer of the Year.
Nick and Erik Rynberg, of Rynberg’s Car Company in Muskegon, won the Michigan Quality Dealer Award.
“It’s a big honor,” said Nick Rynberg. “Hard work pays off. I sold my first car when I was 15. I live and breathe this car business.”
He joked that he and his brother fought “like brothers” when they were little.
When they took over their dad Rick’s business, they changed the inventory and have doubled each year what the dealership did previously.
Nick joked that friends and family thought the brothers would never be able to work together but they have a good partnership.
“He does all the buying and I do all the selling,” Nick said.
The pair run a traditional retail store and carry 40 to 60 units on the lot and average about 20+ per month.
They thanked their family and customers for the award. “We couldn’t have done it without you.”
Kelly Herb, of Tom Stehouwer Auto Sales in Grand Rapids, Mich., made the announcement for the 2024 Michigan Quality Dealer.
“Ironically, their father, who some of us know very well, was Quality Dealer in 2005,” Herb said.
“They run a generational business built on integrity, transparency and quality customer service. They are extremely active in their local community.”
They partner with a high school “Ride with Pride” program that brings together law enforcement, schools and local businesses to encourage safe behaviors for kids.
The brothers donated three vehicles to needy students. They also support Wings of Mercy, Relay for Life and Cars for Cancer.
MIADA President Otto Hahne, who was both the 2019 State and National Quality Dealer of the Year, made a great gesture at the association’s golf and luncheon event.
In the group’s fundraising raffle, Hahne won the top prize of $5,000 and promptly donated it back to the association. He said another dealer who had won the $5,000 previously donated it back to the association.
He said maybe this is a tradition that future dealers could copy after seeing him do it, as well.
Earlier this summer, Dan
Continued on page 10
Congratulations Craig Amelung 2024 NAAA
President-Elect
Since the start of your career, your unwavering passion and innovation have helped shape the future of the automotive industry. Thank you for your relentless drive and dedication to Manheim and our industry - it's an inspiration to us all.
Congratulations on being elected the new President of the National Auto Auction Association!
Craig Amelung
Manheim, General Manager
Mid-Atlantic Market Center
Used Car News
Quality – Continued from page 8
Francis, owner of Andrews Auto Sales in Evansville, Ind., won Indiana’s 2024 Joe Krier Quality Dealer of the Year.
One 20 group moderator praised Francis and his wife.
“Dan and Kristi Francis have been clients, and, most importantly, friends of mine for over 10 years and I am very excited to hear that they have won this year’s Joe Krier Quality Dealer Award,” stated David Brotherton, NIADA 20 group moderator.
“I had the pleasure of being their 20 Group moderator over that time and have always held Andrews Auto Sales in the highest regard as they developed into one of the premier operations of their size anywhere in the United States.”
Andrews Auto Sales was started in 1972 by Dennis Andrews, Kristi’s father. In 2002, he approached Kristi and her husband, Dan, about getting
into the business.
Dan and Kristi started dating in high school before both going to college at Purdue University.
Dan said in pitching dealership life to him and his wife, Dennis said that “a work-life balance is critical for a healthy family life.”
He warned against sacrificing family for business, Dan said.
“His message was as clear then as it is now. Work hard, do what’s right, balance your work and family life, and never lose your faith in Jesus,” Dan said in his acceptance speech.
The couple entered the buy-here, pay-here business and haven’t looked back.
Francis thanked several people, including Alex Downard, Indiana IADA’s executive director, and vendors, their 14 employees and others, including the couple’s son Ryan, who represents the third-generation car dealer in the family.
Nolan Brothers Motor sales in Tupelo, Miss., received its state Quality Dealer of the Year from the Mississippi IADA
On receiving this award, Bentley Nolan said, “It was an honor to be mentioned in the same breath with all of the incredible nominees this year. We believe we are here to be good stewards of the resources and relationships that God has placed in our lives. This drives us every day to provide the very best products and services to our customers and our community.
“The car business is in my blood, I am a third generation dealer, following in my Grandfather and Great Uncle’s footsteps.” Nolan Brothers began business in 1990 and Bentley joined in 2010. He has served on numerous committees and boards and currently serves on the NIADA board.
Another dealer was also honored
this summer. Guy Thorpe of Thorpe Automotive in Knoxville, Tenn., was named that state’s Quality Dealer of the Year in August. He was recognized at Manheim Nashville on Aug. 27.
Meanwhile, Colorado IADA is now accepting nominees for its Quality Dealer of the Year. The deadline for nominations is Oct. 18 and information is available at the association website https://www.ciada.org/.
All the state quality dealers this year will go to Las Vegas to compete for the title of National Quality Dealer during the NIADA Convention & Expo next summer.
“It’s an event all dealers should attend, Herb said. “The highlight of this past year for me was going to Las Vegas as one of 11 (state quality dealers) for the National Quality Dealer.”
It was worth it, for the education, knowledge and networking, he said.
Legal News
Dealer, Sales Manager Plead Guilty to
CHARLOTTE, N.C. – The owner of a Charlotte area car dealership and a sales manager have pleaded guilty to money laundering conspiracy charges, announced Dena King, a U.S. Attorney for North Carolina. John Harvey Martin, 50, of Charlotte, pleaded guilty, and Vincent Emmanuel Jefferson, Jr., 47, of Fort Mill, South Carolina, pleaded guilty earlier.
Donald Eakins, Special Agent in Charge of the Internal Revenue Service, Charlotte Field Office, and Robert Murphy, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration, joined U.S. Attorney King in making the announcement.
According to filed court documents and court proceedings, Martin was the owner of iNetwork Auto Group Inc., a car dealership located in Charlotte. Martin owned and op -
erated The Scorpio nightclub, also located in Charlotte. Martin employed Jefferson as a sales manager for iNetwork.
Court documents show that, from July 2017, through January 2021, Martin and Jefferson engaged in a money laundering scheme by selling approximately 20 luxury vehicles to “G.D.,” an individual who the defendants knew was a drug dealer or of whom they were willfully blind to that fact.
The defendants received cash payments from G.D., also knowing or being willfully blind to the fact that the cash represented property derived from some form of criminal activity.
Jefferson and Martin further facilitated the fraud by allowing G.D. to buy the vehicles using the names of straw purchasers in order to conceal G.D.’s identity and hide the illicit source of the cash G.D. was using to
pay for the vehicles.
Money Laundering
To further the conspiracy, Martin and Jefferson at times forged the signatures of straw purchasers on sales, registration, and title paperwork for the vehicles sold to G.D., and frequently notarized the paperwork knowing that the straw purchasers were not the true purchasers of the vehicles.
Court records show that Martin and Jefferson received from G.D. cash payments for the vehicles totaling over $520,000.
According to court documents, Martin used at least $200,000 in cash that he received from G.D. to pay for renovations to a building adjacent to iNetwork. Martin also solicited and received at least $100,000 in cash from G.D. to buy The Scorpio nightclub, while concealing G.D.’s ownership interest in The Scorpio.
As Martin admitted in court, he
subsequently bought out G.D.’s ownership interest in The Scorpio for at least $100,000 in cash.
G.D. gave that money to another individual, identified in court documents as J.M., who then attempted to drive the money to G.D.’s drug trafficking source of supply in California. After law enforcement seized the money from J.M., J.M. – at G.D.’s direction – submitted a fraudulent claim to the United States government under penalty of perjury falsely representing that J.M. was the lawful owner of the money and that he legally obtained the money from the sale of The Scorpio.
Court documents show that Martin provided fraudulent documentation and made false representations in support of J.M.’s false and fraudulent claim.
Martin and Jefferson have been released on bond and face up to 20 years in prison.
ADESA Boston October 11, 25
508-626-7000
ADESA Charlotte October 2, 17, 31
704-587-7653
ADESA Chicago October 11
847-551-2151
ADESA Cincinnati/Dayton October 15
937-746-4000
ADESA Golden Gate October 1, 15, 29 209-839-8000
ADESA Indianapolis October 1, 15, 29
317-838-8000
ADESA Kansas City October 1, 15, 29
816-525-1100
ADESA Lexington October 24
859-263-5163
ADESA New Jersey October 2, 17, 31
908-725-2200
ADESA Salt Lake October 8
801-322-1234
ADESA Tulsa October 11
918-437-9044
ADESA Washington DC October 9 703-996-1100
Columbus Fair October 16, 23
614-497-2000
Manheim Atlanta October 2, 9, 16, 17, 31 404-762-9211
Manheim Dallas October 8, 9, 23
877-860-1651
Manheim Denver October 9 800-822-1177
Manheim Detroit October 2, 17, 31
734-654-7100
Manheim Fredericksburg October 10, 24 540-368-3400
Manheim Milwaukee October 9, 23 262-835-4436
Manheim Minneapolis October 2, 30
763-425-7653
Manheim Nashville October 22, 23
615-773-3800
Manheim Nevada October 18
702-730-1400
Manheim New England October 15
508-823-6600
Manheim New Jersey October 9, 23 609-298-3400
Manheim New Orleans October 9, 23
985-643-2061
Manheim Orlando October 1, 8, 15, 22, 29, 31
800-822-2886
Manheim Palm Beach October 23, 24
561-790-1200
Manheim Pennsylvania October 2, 3, 11, 17 18, 25, 31
800-822-2886
Manheim Phoenix October 10, 24
623-907-7000
Manheim Pittsburgh October 9
724-452-5555
Manheim Riverside October 8, 10, 22, 24
951-689-6000
Manheim Seattle October 16
206-762-1600
Manheim Southern California October 2, 17, 31
909-822-2261
Manheim Tampa October 2, 17, 31
800-622-7292
Manheim Texas Hobby October 2, 17, 31
713-649-8233
Southern AA October 9 860-292-7500
Manheim Atlanta October 2, 31
404-762-9211
Columbus Fair October 23
614-497-2000
Manheim Dallas October 8
877-860-1651
Manheim Milwaukee October 9 262-835-4436
Manheim Nashville October 23 615-773-3800
Manheim Nevada October 18
702-730-1400
Manheim Orlando October 8 800-822-2886
Manheim Palm Beach October 23 561-790-1200
Manheim Pennsylvania October 2, 17, 31
800-822-2886
Manheim Phoenix October 10
623-907-7000
Manheim Riverside October 10, 24
951-689-6000
Manheim Seattle October 16 206-762-1600
Manheim Atlanta October 2, 31
404-762-9211
Manheim Dallas October 8 877-860-1651
Manheim Milwaukee October 9 262-835-4436
Manheim Nashville October 23
615-773-3800
Manheim Nevada October 18
702-730-1400
Manheim Palm Beach October 23 561-790-1200
ADESA Boston October 11, 25
508-626-7000
ADESA Charlotte October 2, 17, 31
704-587-7653
ADESA Golden Gate October 15
209-839-8000
ADESA Salt Lake October 8 801-322-1234
Columbus Fair October 16
614-497-2000
Manheim Dallas October 9 877-860-1651
Manheim Pennsylvania October 2, 17, 31
800-822-2886
Manheim Riverside October 10, 24
951-689-6000
Manheim Seattle October 16 206-762-1600
Financial Services*
Manheim Fredericksburg October 10, 24
540-368-3400
Manheim Milwaukee October 23 262-835-4436
Manheim New England October 15
508-823-6600
Manheim New Jersey October 9 609-298-3400
Manheim Orlando October 1, 15, 29 800-822-2886
Manheim Pennsylvania October 3, 18
800-822-2886
Manheim Pittsburgh October 9
724-452-5555
Manheim Seattle October 16
206-762-1600
Manheim Southern California October 2, 17, 31
909-822-2261
Southern AA October 9 860-292-7500
Manheim Atlanta October 9, 16
404-762-9211
Manheim Dallas October 8 877-860-1651
Manheim Milwaukee October 9 262-835-4436
Manheim Palm Beach October 23
561-790-1200
Manheim Pennsylvania October 2, 17, 31 800-822-2886
Manheim Riverside October 10 24 951-689-6000
Compliance News
FTC Annual Report Targets Auto Debt Collection
The Federal Trade Commission has provided the Consumer Financial Protection Bureau with its annual summary to protect consumers in the debt collection arena, according to an announcement from the CFPB earlier this month.
The summary is used by CFPB in its annual report to Congress on the activities of both agencies, which share law enforcement responsibility in this area.
In the summary, the commission highlights its debt collection work to protect individuals and small business consumers, including a specific section on automotive.
The FTC report went into detail about issues involving auto debt:
“Auto purchases are a significant source of consumer debt – for many, a vehicle is the single most expensive item they will ever purchase.
The December 2023 announcement of the Combating Auto Retail
Scams (CARS) Rule demonstrates the Commission’s commitment to protecting consumers and leveling the playing field for law-abiding automobile dealers.
“The CARS Rule will ban bait-andswitch tactics and hidden junk fees that consumers face at car dealerships and is expected to save consumers $3.4 billion each year.
“Auto finance is currently the third-largest source of debt for U.S. consumers, and the second-largest source for U.S. consumers aged 40 and over.
“The CARS Rule will prohibit misrepresentations about key information, such as price and cost, and addresses the illegal tactics that make it hard or impossible for consumers to comparison shop or leave them saddled with thousands of dollars in unwanted junk charges.
“Additionally, the rule will require dealers to make key disclosures to
consumers, including providing a true ‘offering price’—that is, the actual price any consumer can pay for the vehicle.
“It also will prohibit dealers from charging junk fees for items that provide no benefit to the consumer—such as service contracts for oil changes on an electric vehicle—or for any item unless the consumer knows what the charge is for and agrees to pay for it.
“For members of the military, the issues addressed by the CARS Rule are compounded by dealers who prey especially on young service members.
“The rule includes specific protections for members of the military and their families—for example, by prohibiting dealers from lying to service members about whether the dealers are affiliated with the military or whether service members can move their vehicles out of state
or out of the country.”
The FTC also continues to bring enforcement actions against car dealers engaging in illegal practices.
“In October 2023, the FTC announced a proposed rule to prohibit hidden and misleading fees, or junk fees, that accompany routine transactions such as booking hotels, buying concert tickets online, renting an apartment, and paying utility bills.
“The proposed rule would ban hidden and bogus fees, preventing businesses from engaging in baitand-switch pricing tactics that hide mandatory fees and deceive customers about the price.
“It would also prohibit sellers from misrepresenting fees and require disclosures about fees for shipping, government charges, and optional add-ons, before customers consent to pay.”
Retail Markets
9/16/2024
COLORADO
Dan Berkenkotter, owner, Berkenkotter Motors, Castle Rock, Colo.
“I’ve been in business since 1990.
“COVID did not change the way we do business. We really didn’t know COVID was going on. They said something about masks but we didn’t really follow the rules. And if everybody else had done the same it would’ve been a lot better, because everyone caught COVID anyway.
“We keep about 500 cars in inventory over four lots. We sell about 200-250 a month.
“We sell more trucks and SUVs than cars.
“We attend auto auctions in person, we don’t like online. We end up dragging back crap that we didn’t think we were buying.
“We go to all four auctions here in Denver: ADESA,
Manheim, Loveland and CarMax.
“Buy-here, pay-here makes up about 30 percent of our business.
“We take as much as we can get for down payments, usually 30 percent.
“For reconditioning it depends on what you bought. If it’s zero, you’re happy. Some of the stuff you don’t even want to start on. Getting inventory has gotten easier, but there’s a lot more junk in the market. I liked it better when it was low.
“We advertise online, and we do giveaways.
“I’m not looking for a certain model year. I keep it until I sell it. The older it gets the more apt you are to get rid of it. Usually, it’s already reconned at that time.
“The last car we sold was a Ford F-250 with 151,000 miles. We sold it for $22,000.”
OHIO
John Devore, owner, Cash for Cars, Marion, Ohio
“I’ve been in business since 2015. I transitioned from the franchise world in 2018.
“COVID absolutely changed the way we did business. It was great for one year because there was so much money around, everyone was buying a car. Once that ended, there was a general aura that people don’t have to work. Honestly, I think that changed our society to the detriment.
“I usually keep 40-60 cars. But I’m about to change that, because with sales being down there is no reason to keep the inventory that I have.
“For cars, trucks, SUVs - my sales probably break down evenly one-third each.
“We’re close to the Honda plant so people definitely
have an affinity for Hondas.
The problem is Hondas cost more at the auctions, along with Toyotas, so a lot of time it’s not the first trigger I pull.
“I still go to auctions in person. For a while, I was buying a lot online and like anyone, you can get bit by the bug. You end up buying someone else’s trash. There’s no substitute for touching and feeling it. There’s also no substitute for your time and that’s the balance you have to make.
“When I set out on my own, I said I was not going to do buy-here pay-here. But, unfortunately, because of the lending (issues), I’ve become Marion’s largest BHPH dealer mainly because I choose to sell cars. And what comes with BHPH is an average national repo rate that’s right around 30 percent.
“As far as down payments,
Compiled by Ed Fitzgerald
I’m old school and that might have something to do with my sales being down. I have stuck with 20 percent and a minimum of $1,000 down. If they don’t have skin in the game, I’m not selling them a car.
“With not being able to get employees, which I blame on COVID, I’ve been without a mechanic for six months. I’m pretty savvy myself but there’s only so much of me to go around. When I go to the auctions I try to buy more retail-ready, which cuts into my margins.
“I sold 620 cars in 2021, the year immediately after COVID. Me, my wife, two mechanics and a detailer, minimal staff. I was rocking and rolling. This year I think we’ll be lucky to crack 200.
“The last car I sold was a 2014 Dodge Ram, with about 165,000 miles. We got $10,900 for it.”
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Wholesale Markets
9/16/2024
MONTANA
Jake Gertsch, sales manager, Auto Auction of Montana, Billings, Mont.
“We’ve been in business 22 years, something like that. We have four lanes but we can also double-block it and run six lanes.
“Volume have been running about 400-450 per week.
“It’s not bad. It’s down a little from where it was a year ago. But going into the fall here, a lot of these fleet cars and rentals will start coming out. So, I think the numbers will start ticking up.
“We have one lane that runs about 130 to 140 cars a week, that’s mostly all fleet stuff. So, the rest would be all dealer consignment. It’s probably a 75/25 mix.
“Our (conversion rate) has been pretty high recently, about 70-75%.
“The interesting thing this year is that typically July and December are our two slowest months of the year, but this year we never really slowed down in July,
“We sell cars from $500 to $100,000. I think the average price is around $26,00 to $28,000.
“We’re selling a lot of SUVs and trucks. That’s the bulk of what we sell. You get a Denali diesel pickup and vehicles like that, they’re pretty expensive. We sell a lot of $70,000 and $80,000 trucks.
“The number of dealers in the lane is probably down from what it used to be. Mostly just because of online sales. But with on the ground and online we usually end up with about 300 buyers. Maybe 100 guys are here and another 200 or so attending online.
“Dealers say business is really steady. Nobody is set-
ting anything on fire, but it’s steady. Still a lot of new-car stores are buying used at auction.
“We have a GSA sale and it’s typically once a month with 60 to 70 vehicles.
“We also have our anniversary sale coming up October 16. It’s typically our biggest event as we’ll get some larger consignment from Enterprise and Hertz. I guess we’ll have 500 to 700 cars.”
NEBRASKA
Ryan Durst, vice president, Lincoln Auto Auction LLC, Waverly, Neb.
“We are celebrating 32 years this fall, usually we do that in late September.
“Volumes have been pretty steady. I just looked and we’re down a little bit from last year, but we’re up in sales percentages.
“We’re running right
around 225 to 250 weekly. We’re about 90/10, 90% dealer consignment and 10% repo/fleet/lease.
“Last year at this time, we were at 78% (sales percentages). This year, year to date, we’re at 80%.
“We pride ourselves on bringing in good consignment and we have the best buyer base in-lane and online.
“We draw about 225 dealers in-lane, plus 50 to 70 online. I think people like to be here. We’re such a high percentage sale, they feel like they’ll miss out (not being in the lines bidding).
“We’re going to sell the car, so if you’re the last bidder, you have a good chance to own the car. That’s a pretty good incentive to be here.
“Dealers still want to see the car. They want to make the right decision and now the decisions are more criti-
Compiled by Jeffrey Bellant
cal than ever, with reconditioning the vehicle. The only way to combat that is to kick the tires and touch the vehicle.
“We want people here and I think it shows.
“Our average sale price is right around $6,500. A year ago we were right about $7,000.
“I think the lower-end market is down a lot and that’s attributing to the lower (averages).
“We also have a GSA sale. We run that every month. We’ll run 70 to 100 (units). It will be everything: vans, utility bodies, dump trucks – I’m looking at a Blue Bird bus that they’re looking to detail. Our volumes have been consistent.
“We’re feeling really good about the sale, I don’t think we’ve had below 85% in August. I think that’s going to continue.”
9/6/2024
2020
Tony Moorby Disconnected Jottings From
Ordering almost anything online these days is as easy as a push of a button. I have an array of them on my computer’s opening page.
Unlike in Oz, where a wizard behind a curtain drives everything, Amazon for instance, now has a global monolithic infrastructure, for the most part, invisible to the everyday user. The distribution,warehousing and storage facilitates grind away, supported by enormous data processing centers spanning acres. Customer records also drive predictive marketing to a pinpoint.
The National Auto Auction Association, convening in Orlando this year, reflects similar streamlining in operations and communications, albeit on a smaller but just as sophisticated scale, including the analytics.
The attendee list will con-
firm the direction of the industry; in the days of yore, an auction owner, his GM (if he had one) and eventually a fleet/lease manager may have attended. Typically, customers sent used car managers and fleet resellers (including some wholesalers), the word remarketing wasn’t in our lexicon then.
Auctions represented relatively local sentiments in their marketplaces but those on major interstate junctions had wider inputs of value judgments. Nashville was such a center because of the confluence of I-24, 40 and 65, putting Chicago, Florida, the East Coast and Midwest in a day’s reach. Now, values are a click away with no need to physically be in the lanes.
The guidebooks, an integral part of the business, were at best reactionary although expertise on sea-
Myles Mellor
sonal adjustments from watchers within the business ensured values reflecting real conditions. Their advisory capabilities have grown enormously to counsel all sorts of interested parties from manufacturers, financial institutions and so on, comparing inventory values with those of the day’s market – an underwater report - even to observations for Wall Street.
Where, in the past, seminars and discussions may have been as simple as how to improve a customer’s car with reconditioning or how to efficiently lay out an auction lot, now, they’re more likely to look at global economic analysis, artificial intelligence and performance matrices.
Auctions have come a long way in just a few decades, by necessity paralleling their expertise with buy-side
and sell-side customers’ expectations and forging new methods. It’s been one of the most flexible industries I can think of.
Affiliated companies have kept pace, taking opportunities to grow alongside the auctions and indeed, many new services have spawned and grown to bring better suites of services to the vehicle distribution services. Auction Insurance Agency stood behind early transactions to underwrite the security of doing business with NAAA members. Now, access to much data and history underscores an allied approach continuing to provide growth opportunities. The atmosphere created by auctions is thrilling, exciting and knowledgeable; it’s always been that way. It’s been made better and more competitive by innovative customer-to-
product matching skills. All the while, this monster moves millions of cars over the country within an infrastructure as complex as a spider’s web – one of the strongest structures known to man!
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