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December 5, 2016

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NAAA Salutes Auction Staff That Gives of Itself

Photo courtesy of Naional Auto Auction Association GIVING BACK: Former NAAA President Tim Browning, left, presents Karl Miskotten, second from left, and his staff with the 2016 NAAA Auction of the Year Award. The West Michigan staff has raised money and even donated a kidney in its efforts to reflect what Miskotten calls a “servant” attitude.

As the NAAA’s National Auction of the Year Award winner, West Michigan Auto Auction received an additional $20,000 to be donated to the charity or charities of its choice. In addition, NAAA’s On the Block magazine will feature a January 2017 cover story about WMAA and its charitable eforts. The auction will also grace the cover of the 2017 NAAA Member Directory. NAAA Midwest Chapter President Jason Cotton said West Michigan’s eforts have helped so many people and have been an inspiration to many. Outgoing NAAA President Mike Browning said he was pleased to be

president during the creation of this new award. “We want to congratulate West Michigan Auto Auction and thank those involved at the auction who consistently give unselishly of their time, efort, and money to so many wonderful community service organizations,” Browning said. West Michigan engages in numerous charitable and community service activities, not the least of which was an employee who befriended a dealer client, and later donated a kidney to the man. Other eforts include raising $42,000 for the family of a Michigan auction worker who died in a

car accident and each year holding a memorial ride for his family’s continued support. West Michigan raised $12,000 for a dealer client whose wife contracted terminal cancer, and the amount raised was matched by the auction. Numerous vehicle repairs for inancially challenged individuals in the community also have been made. Other eforts include charity golf sponsorships, food pantry collections, and raising $3,000 for a nonproit that donates water iltration systems to countries where people don’t have access to clean water. Continued on page 5

Rush - Dated Material

LAS VEGAS – The National Auto Auction Association honored an independent auction owner, an auction chain executive, an auctioneer and an entire auction staf during its recent convention. West Michigan Auto Auction of Wayland, Mich., was named the 2016 Auction of the Year by the National Auto Auction Association. The award honors excellence in community service. West Michigan Auto Auction was also the winning recipient of the regional Midwest Chapter Auto Auction of the Year, winning $5,000, which will be donated to the charity or charities of their choice.

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USED CAR NEWS

December 5, 2016 • 3

Focus on Customers Boosts Finance Satisfaction Dealers and lenders are focusing on building a relationship with their customers to increase satisfaction and business retention, according to the J.D. Power 2016 U.S. Consumer Financing Satisfaction Study. Highly satisfied luxury and mass market customers (overall satisfaction scores above 900) can have a significant effect on dealers and lenders, as they are nearly twice as likely to return to a particular dealership and are more than twice as likely to lease or purchase the same brand again as those who are less satisfied (scores between 801 and 900). “In the seemingly complicated environment of vehicle financing, it’s the sometimesoverlooked customer handling steps that can bring clarity to the customer and give dealers and lenders a unique competitive advantage,”

said Jim Houston, senior director of auto finance at J.D. Power. A lender welcome package that answers basic loan servicing questions (e.g., how to make payments and how to sign up for auto-pay) can reduce the number of inbound contacts. Specifically, among luxury customers who say they “completely” understand all of the servicing information, problem incidence drops to 8 percent, compared with the overall luxury problem incidence of 10 percent. In the luxury brand segment, overall satisfaction is 49 points higher among customers whose dealer or finance manager explained account features, services, or benefits of their financing than among those whose dealer or finance manager did not. When email customer service is available, satisfaction improves by

42 points among luxury brand customers and 61 points among mass market brand customers. When online bill pay is available, satisfaction improves by 53 points in the luxury segment and by 86 points in the mass market segment. Satisfaction declines significantly when a customer has to contact their lender more than once to resolve a problem. Overall satisfaction among luxury brand customers resolving a problem with one call is 875 points but declines to 821 among those whose resolution requires two calls. Lincoln Automotive Financial Services ranks highest among luxury brands. Ford Credit ranks highest among mass market brands, with a score of 856. Bank of America (854) ranks second and Kia Motors Finance (851) ranks third.

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4 • December 5, 2016

USED CAR NEWS

NEWS BRIEFS CarMax Moves into New Market CarMax Inc. celebrated the grand opening of its irst store in Michigan, located in Kentwood at 4431 28th Street. The Kentwood store will have the capacity to stock approximately 200 used vehicles. During the grand opening celebration, CarMax announced that The CarMax Foundation will be providing a $10,000 grant to the YMCA of Greater Grand Rapids. The grant will help fund the YMCA Veggie Van, which is West Michigan’s only mobile farmers market. The Veggie Van provides the opportunity for local farmers to sell produce directly to residents in low food access neighborhoods. Kentwood CarMax associates nominated the YMCA of Greater Grand Rapids to receive the grant.

per store per month, up from 25.3 for the prior year quarter Average retail sales price increased $244 to $10,491. Gross proit margin percentage increased to 41.4 percent from 39.2 percent for the prior year quarter. Collections as a percentage of average inance receivables were 12.6 percent compared to 13.7 percent for the prior year quarter. The weighted average contract term increased to 31.7 months from 30.6. Net charge-ofs as a percent of average inance receivables were 7.7 percent, down slightly from 7.8 percent for prior year quarter. Accounts over 30 days past due increased to 4.8 percent from 3.5 percent at Oct. 31, 2015. Allowance for credit losses was 25 percent of inance receivables, net of deferred revenue at Oct. 31.

Car-Mart Reports Improved Results

ADESA Adds Flint Auto Auction

America’s Car-Mart Inc. had net income of $5 million for its quarter ended Oct. 31. Revenues were $150 million compared to $133 million for the prior year quarter. Retail unit sales increased to 12,167 from 10,881 for the prior year quarter with increased productivity at 28.4 retail units sold

KAR Auction Services has acquired Flint Auto Auction. The facility will operate as ADESA Flint. Located just northwest of the Detroit metropolitan area, Flint Auto Auction is a fully automated, eightlane auction on 60 acres of land. The auction ofers full-service recondi-

tioning facilities, including a body shop and mechanical shop. Lawrence Cubitt will remain as general manager and additional members of the auction team will maintain leadership roles.

on average than a comparable noncertiied vehicle, averaging 30 and 35 days respectively. CPO vehicles also increase a dealership’s average number of inventory turns per year, from 10.4 to 12. While the upfront cost of certiications may currently hold back some dealers from develDealers Low-Ball CPO Units oping CPO programs, the combined According to a recent Cox Auto- value of higher price tags and faster motive certiied pre-owned study, turns more than counteracts this dealers underestimate the value cost. consumers place on CPO vehicles, causing them to charge less than Negative Equity Rises consumers are willing to pay. Additionally, CPO vehicles were A rising number of car shoppers shown to speed vehicle sales and have negative equity on their tradeincrease turn, making a strong case ins when they’re purchasing their for dealers to take advantage of the next vehicle. growing CPO market. According to Edmunds, a record According to the Cox Automo- 25 percent of all trade-ins toward a tive 2016 CPO Study, the average used car purchase in the third quarconsumer is willing to pay $3,000 ter had negative equity. These shopmore for a CPO vehicle than for the pers had an average of $3,635 of negsame vehicle without a certiication. ative equity at the time of trade-in, However, dealers estimate that con- also a third quarter record. sumers will pay only $1,260 more for a CPO vehicle - $1,740 less than what consumers said they would be willing to pay. By underestimating the value of vehicle certiications, many dealers unknowingly sacriice potential proit. In addition, the study reveals that PAGE 16 a CPO vehicle sells ive days faster Published By General Media LLC USED CAR NEWS (ISSN 1555-7413) is published at 24114 Harper, St. Clair Shores, MI 48080 Phone: 586-772-5200 or 800-794-0760 Fax: 586-772-9400 www.usedcarnews.com Charles M. Thomas - Founder (1947-2002) Lynda R. Thomas, Publisher Colleen Fitzgerald, General Manager Columnist: Tony Moorby

Editorial: Ted Craig, Managing Editor Jeffrey Bellant, Staff Writer Contributing Writers: Ed Fitzgerald, Jenny King, Sheila McGrath Advertising: Shannon Colby, Account Manager Marie Hingst, Account Manager

Circulation: Helen Thomas Production: Tom Savage, Production Manager Cee Lippens, Web Master & Graphic Designer

Vol. 22 • No. 16 Used Car News is published the irst and third Monday of each month. Subscribers: We print advertisements as sent to us by auctions and other advertisers. It is not possible to verify the correctness of listed vehicles in auction ads. Most lists are partial and all lists are subject to last minute changes by auto auctions, so before travelling a long distance for a particular auto auction event, contact the auction by telephone for a fax of vehicles in the sale. Used Car News assumes no guarantees or liabilities concerning the accuracy of any advertisements. All Rights Reserved.

Reproduction in any form is prohibited without the written consent of the publisher. OUR ADVERTISING APPROVAL POLICY Payments from irst time advertisers must accompany the insertion order. Distribution is guaranteed by the USPS. he advertising reservation deadline is 12:00 noon hursday, 11 days prior to the issue cover date. Ad materials are due by 5 pm Friday, 10 days prior to issue cover date. For advertising speciications please email colleen@usedcarnews.com.

Join the Conversation! Visit Used Car News online at www.usedcarnews.com or scan this QR code with your smartphone to be taken directly to the website.

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USED CAR NEWS

December 5, 2016 • 5

NAAA Names Auction of the Year – from page 1

BOB RAUSCHENBERG Patty Stanley, co-owner of Carolina Auto Auction and Indiana Auto Auction, was inducted into the National Auto Auction Association (NAAA) Hall of Fame during the association’s recent convention. NAAA has given the honor each year since 1968. It is bestowed on those who have worked for the improvement of NAAA and have consistently followed the high standards of the association’s Code of Ethics. Patty Stanley joins her husband, Henry Stanley, a former NAAA president,

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who was inducted into the Hall of Fame in 2013. Patty Stanley, who currently serves as ServNet’s chairman of the board, has been in the auction industry since 1969, when she and her husband purchased Capital Auto Auction in Columbus, Ohio, which they renamed Ohio Auto Auction. Patty Stanley, who had spent 18 years in the banking industry prior to she and her husband’s first auction purchase, has also served as ServNet’s vice president, and has been both director and treasurer. She is also a member of the NAAA Convention Committee. After selling the Capital Auto Auction to GE Credit in 1987, the Stanleys purchased Fort Knox Auto Auction in Anderson, S.C., in 1990, renaming it Carolina Auto Auction. It has grown into one of the region’s largest wholesale auctions. They purchased the Indiana Auto Auction in Fort Wayne, Ind., in 2007. Charlotte Pyle, co-owner/

operator of two West Virginia auto auctions, presented the award to Stanley, noting that their professional and personal relationship spans nearly three decades. “Patty was instrumental to the success of our business,” Pyle said. “When we first joined NAAA, it was Patty who recommended which meetings to attend, in which committees to participate. I recall sending our general manager to Carolina Auto Auction and then our comptroller for training.” Bob Rauschenberg, ADESA’s executive vice president of sales, marketing and special services, was named an NAAA Pioneer. The NAAA Pioneer Award honors those who have worked in the wholesale motor vehicle industry and/ or NAAA and have brought innovation and enhanced methods of improving services to remarketers through NAAA member auctions. Earning the honor means the recipient has consistently followed the standards of

the NAAA Code of Ethics. Rauschenberg has been in the remarketing business since his early teens. He is a graduate of Emporia State University in Kansas, with a bachelor’s degree in marketing. After college, Rauschenberg joined Allstate Insurance Co. as a fleet administrator. He later became vice president of remarketing for two of the largest fleet- lease companies in North America. He has held key positions in the auction industry including president of ADT Auction Services Division and executive vice president of sales and marketing for ADESA from 1995 until 2000. He joined ABC Auto Auctions in 2000 and became its president. He worked there until April 2007, at which time he returned to ADESA to once again serve in the role of executive vice president of sales and marketing. “Industry Pioneer is a very appropriate award for Bob,”

said Tony Moorby, who was CEO at ADT Auction Services Division when Rauschenberg served there. “He has always been one to step outside the mainstream and see where it goes. He has a pioneering spirit, is very resilient to change, with a facility to bounce back. He has a wonderful sense of humor.” Jack Armstrong, a 27-year veteran of the auction industry, received the National Auto Auction Association Bernie Hart Memorial Auctioneer Award for 2016. What started out as a parttime job as a driver at Rea Brothers Mid-South Auto Auction in Jackson, Miss., has grown into a 27-year career for Armstrong. He graduated from the Mendenhall School of Auctioneering in 1990 with awards such as “Most Likely to Succeed” and “Best AllAround Student.” Today, Armstrong works auctions in Alabama, Mississippi and Louisiana, including independent and corporately owned sales.

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6 • December 5, 2016

USED CAR NEWS

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The average age of light vehicles in operation in the U.S. has once again climbed slightly, to 11.6 years, according to IHS Markit. Registrations for light vehicles in operation (VIO), including cars and light trucks, in the U.S. also reached a record level of more than 264 million, an increase of more than 6.2 million since last year. This represents the highest annual increase the auto industry has seen in the U.S. since it began tracking VIO growth – breaking the record of 2.1 percent growth set in 2015. According to IHS Markit, consumers are continuing the trend of holding onto their vehicles longer than ever. As of the end of 2015, the average length of ownership measured a record 79.3 months, more than 1.5 months longer than reported in the previous year. For used vehicles, it

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is nearly 66 months. Both are signiicantly longer lengths of ownership since the same measure a decade ago. When it comes to vehicles being scrapped, those taken out of service during 2015 remained relatively lat compared to 2014, with just over 11 million light vehicles retired out of the leet, representing about 4.3 percent of the overall population. This igure is signiicantly less than the record high of more than 14 million vehicles that were scrapped in 2012. The oldest vehicles on the road are growing the fastest – with vehicles 16 years and older expected to grow 30 percent from 62 million units today to 81 million units in 2021. IHS Markit research also indicates more than 20 million vehicles on the road in 2021 will be more than 25 years old.

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USED CAR NEWS

December 5, 2016 • 7

Recalls, CFPB Top List of Compliance Concerns By Ted Craig

This year’s National Auto Auction Association featured several presentations on compliance, a common topic at automotive events these days. And, as at most of these events, the Consumer Finance Protection Bureau was the most discussed issue. Although the CFPB has no direct authority over auto auctions, it does fall in the category of third-party service providers for financial institutions and buy-here, pay-here dealers. A panel discussed the topic during the National Remarketing Conference, which was held in conjunction with the NAAA convention. Jack Tracey, executive director of the National Automotive Finance Association, said the industry could view the CFPB as a positive. “It provides the industry with a barometer,” he said. Problems arise because the agency focuses on enforcement rather than rulemaking. Tracey said everyone involved in auto sales benefits from creating a good relationship with consumers

However, the CFPB must work with the industry to help make that happen. Recalls are another major topic for the auctions. The NAAA joined forces with the National Independent Automobile Dealers Association and other groups last year to defeat legislation that would have required dealers to repair all recalls before selling a used car. Attorney Jason McCarter warned NAAA attendees that although this national legislation failed, many states are still considering their own version. The current NAAA recommendation is for sellers to at least discuss any recalls and for buyers to check for recalls before buying a vehicle. The NAAA convention came one week after the presidential election and some are speculating about how the new administration might treat these compliance issues. Levi McCoy, director of remarketing for LeasePlan USA, advised dealers to limit expectations for change. “Compliance might be modified, but it’s not going away,” McCoy said

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8 • December 5, 2016

USED CAR NEWS

TAX SEASON PREVIEW TAX SEASON BRINGS CHALLENGES, OPPORTUNITIES TO INDEPENDENTS By Jeffrey Bellant

A potentially late refund season, a shorter refund window and continued challenges in finding the right inventory make the upcoming tax season another pressure-filled time for independent dealers. Ken Shilson, founder of the National Alliance of Buy-Here, Pay-Here Dealers, said there has been one major change for this year’s tax season according to Bill Neylan, of TRS Tax Max. “The government has announced that any of the larger refunds will not even be released until the third week in February,” Shilson said. “So tax season has been moved back, according to Bill’s information, two to three weeks.” This poses a challenge for independents that want to stock up early, but also have curtailment prob-

of Earl’s Credit Auto Sales, said last year’s tax season was delayed and he was still seeing tax money in April. Johnson said he prefers a “stretched out” tax season for a number of reasons. One is that his sales process takes a long time because it’s a thorough closing process. “In a hectic tax season, it’s hard to do that,” John-

lems, inventory stocking issues and carrying costs, Shilson said. “It’s a game changer,” Shilson said. “It’s bad enough that it’s drifted out to late January and early February. Now we’re talking about late to midFebruary to get any serious refunds flowing. “So the start of the refund season has definitely changed.” Richard Johnson, owner

son said. The other reason is a slower tax season means Johnson can avoid paying inflated prices at auction when he needs to replenish his inventory. Johnson depends less on tax season each year as he builds up his repeat business that now stands at 70 percent of all sales. Another issue dealers face today is they lost con-

trol of the refund, Shilson said. It used to be customers would come in, do their tax returns at the dealership and dealers could get the refund agreement. “Now, they get the refund somewhere else and get a widescreen television and by the time the dealer gets to it, it’s a fraction of what it was,” Shilson said. As a result, some dealers feel there isn’t a big tax season. But Shilson said the opportunity is still big. “According to the government, the refunds are substantial,” he said. “We’re just not seeing the money flow directly into the auto finance space like we used to.” TRS Tax Max has a program that allows dealers to structure a deal with an irregular payment to build in future years’ tax returns, Shilson said. Doug Turner, director of asset management for J.D. Byrider, said his dealers are “conservatively optimistic” because it’s always a great time of year with strong cash down payments and good volume. “I will say, whether wholesale or retail, tax season is not as impactful as it had been in prior years,” Turner said. “But it’s still a very important time of the year for us.”

FALLING PRICES HELP DEALERS One positive change to tax season this year is the downward trend in wholesale prices means vehicles are more affordable as dealers stock up. America’s Car-Mart CEO Hank Henderson said on a recent conference call that he’s heard reports from the field that prices aren’t going up like they normally do. “It’s not anything huge at this point, but we are starting to hear it is happening at certain places,” Henderson said. Paducah Auto Auction usually sees an uptick in business in preparation for tax season. “But last year, we didn’t,” General Manager Clint Lutz said. “I think in the next month or two, guys will show up that don’t come all of the time. You’ll see those guys hit the lanes for (tax season).” He said it’s getting harder to time which week will be a good week for sellers and buyers for tax season. Butch Royal, managing partner of ABC Baton Rouge, said the auction has a good foothold in the buy-here, pay-here market.

“The buying season for that generally starts in the second week of December for us,” he said. “We’ll be doing a big Christmas promotion on Dec. 15, so that really gets it moving a bit.” Doug Turner, director of asset management for J.D. Byrider, said in buying cars, the goal is obviously to minimize the amount it pays for cars in normal tax season. “But it does seem like normal tax season is getting a tad bit weaker and shorter,” he said. “It seemed like it used to run from mid-January to midto late March. “Now it seems like it doesn’t start until February and might be a threeto five-week window instead of an eight-week window.” Turner said it helps from a buying perspective since the dealer group doesn’t have to stock up as much. “Still, we plan on watching the market very closely in the next 30 to 60 days,” he said. He said even though the overall wholesale prices are dropping, the market for a good, clean used car is still pretty strong.

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10 • December 5, 2016

USED CAR NEWS

Wholesale Prices Move Down By Ted Craig

LANE POWER AT YOUR FINGERTIPS. SAY GOODBYE TO WAITING FOR YOUR DREAM INVENTORY TO COME DOWN THE LANES.

The downward movement in wholesale prices has begun. The question now is how far and how fast prices decline. ADESA reports that wholesale used vehicle prices in October averaged $10,499. That’s down 2.2 percent compared to September but up 3 percent relative to October 2015. A panel during the National Auto Auction Association said this downward move is the start of a trend set to last for several years. Rene Abdalah, senior vice president of the RVI Group, said his irm’s used-car price index was 4.3 percent lower year-over-year in September. RVI expects doubledigit declines over the next three years. The main force driving down wholesale prices is an increase in of-lease units. Jonathan Banks, executive automotive analyst for the NADA Used Car Guide, said the wholesale markets absorbed a 33 percent increase in of-lease units this year, for the most part, but the numbers just keep growing. What makes the situation worse is many of the vehicles coming back have less retail demand than when they were leased. “When you get increasing usedcar supply in a shrinking segment,

Anil Goyal that’s not good,” said Eric Ibara, director of residual consulting at Kelley Blue Book, A slowdown in the new-car market could add to the decline in the used-car market, especially if manufacturers increase incentives. “Next year could be extremely bad if incentives are higher,” Banks said. The drop in prices can have a negative efect on consignors. But Anil Goyal, senior vice president of operations at Black Book, said some are taking a more active approach to maintaining residuals. Prices remain high by historical standards. Abdalah said lower prices create opportunities. For example, the industry can look more seriously at used-car leasing.

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Seven auto auctions from across the U.S. garnered awards as Chase Auto Finance announced its 2015-16 Chase Cup for Auction Excellence winners. The awards were handed out during the 2016 National Auto Auction Association Convention in Las Vegas. The 18th annual Chase Cup award recognizes auto auctions for their exceptional performance in retention, operational eiciency, expense control, accuracy, sales and service delivery. Chase reviewed the performance of 30 of the nation’s best auto auctions with which Chase does business. The review examined data measuring how well the auctions handled preparation, sales, invoice processing, transport requests, title processing and other capabilities. Manheim Phoenix was named the winner of the Best National Auction Performance. Manheim Phoenix distinguished itself among other top competitors throughout the evaluation period with a balanced performance showcasing strengths in vehicle reconditioning, number of buyers, condi-

tion report accuracy and monetary results. Manheim Phoenix was also honored for Best Regional Performance, Western. ADESA Kansas City was the Douglas F. Wininger Memorial Award for Best National Performance Service Delivery, an award that recognizes outstanding service in measurable areas such as transportation management, sales, invoicing and other operational measures. ADESA Kansas City also earned Best Regional Performance, Central. Also recognized were: • Best National Jaguar Sales Manheim Atlanta • Best National Land Rover Sales Manheim Pennsylvania • Best National Mazda Sales Manheim Seattle • Best National Subaru Sales Manheim Seattle • Best Regional Performance, Midwestern - Manheim Minneapolis • Best Regional Performance, Northeastern - Manheim Pennsylvania • Best Regional Performance, Southeastern - Manheim Orlando

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11/28/16 2:28 PM


12 • December 5, 2016

USED CAR NEWS

PEOPLE IN THE NEWS Cox Automotive Promotes Execs Cox Automotive recently promoted two executives. Amy Mills was named senior vice

Amy Mills president of strategy. Mills previously served as vice president of global strategy, where she drove corporate strategic planning and business portfolio management. Mills joined Cox in 2001 as assistant marketing manager for Cox Automotive’s Manheim

brand. She served in a variety of marketing roles before assuming the role of vice president, product strategy for Manheim, where she focused on the development of new product innovations for the brand’s product portfolio. She was promoted to vice president, strategy, Cox Automotive, in November 2013. Mills’ career includes roles in brand strategy, advertising and marketing. Mills replaces Joe George, who was promoted to senior vice president, Manheim Vehicle Solutions. Cox Automotive has named David Pyle senior vice president of enterprise dealer partnerships. Pyle will lead a team that is dedicated to selling products from the entire suite of Cox Automotive brands,

including inancial, inventory, media and retail solutions, to large enterprise clients. Additionally, this team is responsible for providing a uniied sales, service and support expe-

Autotrader/Kelley Blue Book sales team for three years before transitioning to the company’s client success group in 2015. He was most recently senior vice president of client services for Cox Automotive leading loyalty and rewards strategy. Pyle earned a Bachelor of Science degree in inance from Auburn University.

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foster, and deploy new ideas and solutions for KAR’s customers. Walsh previously served in senior roles at KAR’s Insurance Auto Auctions (IAA) salvage auction and ADESA whole-car auction subsidiaries. Chris Adams will serve as the vice president of market development. Adams brings two decades of industry expertise, including Pep Boys and Enterprise Rent-A-Car. Tom Kontos has been elevated to the role of chief economist for KAR. Kontos will aggregate economic and industry data with KAR’s vast data resources to analyze a wide spectrum of market trends. Terrence Wynne, vice president of data as a service, will work closely with Kontos and KAR’s Data Science Solutions team

to translate data into clear, actionable insights for sellers and

Tom Kontos buyers. Wynne joins KAR with broad experience driving the application of data science, including roles at Audi, NADA Used Car Guide and ALG. As the vice president of strategy, Joe Bannon will lead KAR’s strategic planning activities. Bannon’s career spans more than 30 years in automotive, advertising and media.

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USED CAR NEWS

December 5, 2016 • 13

RETAIL MARKETS MAINE Eric Earl, general manager, The Auto Barn, Berwick, Maine: “We’ve been in business 36 years. We started with one car that my father and I were driving. “We keep about 50 on the lot. It depends on the car. I’ll get trade-ins that bring me up over 50. But I try to have 45 to 50 newer units. “I turn over almost half my inventory on average. Some cars might be here for (several) months and some might sell in three days. “I get my vehicles through trade-ins and auctions. “We don’t do any buyhere, pay-here. I do some subprime, but I don’t like the subprime market. “The average retail price is $15,000. “My average inventory is between 2008 and 2013. I might have some 2015s and 2006s. “But the average is probably ive years old. “Average mileage is 60,000 to 70,000. Getting

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(good mileage) is tough. It’s a lot tougher than it used to be, for sure. “I try to keep a wide range of everything. I prefer noncar vehicles though. I like trucks, SUVs and vans. “I think most of what we have are domestic. “We do our reconditioning in-house. “We are located on a 1750s-era farm. All of our cars are parked out front under a row of maple trees. I cook every customer an apple pie. I have rocking chairs out on the front porch. “We do a ton of repeat business. “We also do a lot of online advertising, Cars.com, CarGurus, Autotrader, etc. “I recently sold a 2011 Honda C-RV. It had 79,000 miles. We got $14,500 for it. “Honestly, I think the car market has been up for the last couple of years, but that’s just me. I can’t predict with our new administration and it didn’t matter who won.”

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NEBRASKA Arlan Kuehn, owner, Kuehn’s Auto Sales Inc., South Sioux City, Neb.: “I started in the car business working for somebody in 1970, but I’ve been here with my own business for 19 years. “I keep about 80 in inventory. We’re a little bit lighter than last year. We’re watching what we’re selling. “We sell about 35 per month. It’s about the same as last year. Business has picked up a lot. For a while it was slow, in August and September. The traic was way down. A lot of businesses were of. A lot of new-car businesses I buy from were also of. “But it picked back up around October. “Most of my vehicles come from new-car stores. They’ve known me for years from being in the new-car business. It’s been 46 years in the business, so that makes a diference. “I still go to the auction sometimes.

Compiled by Jeffrey Bellant “We do a lot with subprime through Credit Acceptance Corp. I went through their school that trains us, so I get a bigger percentage back when I close a deal. I had some money invested in it. I think I’m on my ifth pool, which is 100 cars for each pool. “I also do a small amount of buy-here, pay-here. We do retail also. “Subprime is about 60 percent of our business and about 20 percent is buyhere, pay-here. The rest is retail. “We’ve gone more subprime in recent years. People have lost jobs and haven’t been able to get their credit back. “But they’re good people. We’ve helped a lot of them get back on their feet. “Our average retail price is in the $6,000 to $8,000 range. I’ll carry them anywhere from $16,500 down to $4,995 and some cheaper ones. “I carry mostly domestics. Maybe 10 percent is foreign.

“Inventory has been pretty good to ind. We do a lot of SUV sales. That’s our big seller. SUVs are probably 60 percent with 35 percent trucks and the rest are cars. “Now I’m, starting to save some cars for tax season. I have kind of a car corral, or budget corral, that I keep some cars for sale that are low-down payment or cashand-carry. “Overall, we carry 2008, 2009s and 2010s. I’ve got a 2012 that I just bought the other day, but I bought it right and it was a nice Camry. “The average miles have gone up. I’m sure you know that. A lot will get up to 90,000 or 100,000. I’ve got a few that are 120,000 to 130,000. “Everything goes through our service department and our service work is probably $800 to $900 a car. But I want them right. We take care of our customers. “We just sold a 2005 GMC Envoy. It had 200,000 miles on it. I got $4,950.”

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11/28/16 5:03 PM


14 • December 5 ,2016

USED CAR NEWS

WHOLESALE MARKETS KENTUCKY Clint Lutz, general manager, Paducah Auto Auction, Paducah, Ky.: “We’ll be celebrating 26 years in February. We have three lanes. “We’re running close to 300 a week. That’s up about 50 a week compared to this time last year. I feel like the dealers around here are doing a little more business – on the new-car side – and we’re getting more new-car trades than we used to get. “Dealers’ percentages are in the mid-50s to mid-60 percent, so they’re still pretty good. That usually stays about the same. “Most average weeks, we (draw) 125 dealers. We’re in Western Kentucky, so we’re also drawing them from Illinois, Missouri and Tennessee. We’re within 50 to 75 miles of those states. “Everybody says their business is ‘just OK,’ but at the end of the month, everybody says they had a good month, it seems. “We don’t do a whole lot

of leet-lease. We might have 20 repos a week, just from the local banks. The majority (of volume) is from local dealers, whether it be wholesale dealers or the local franchise stores. “We’ll run some in-ops at the beginning of the sale every week. “We don’t do any online sales. “Our average price is in the $4,000 range. That’s up just a little bit – maybe a couple of hundred dollars – from this time last year. “Trucks are impossible to ind and they’re extremely high when you get them. “It seems like the higher mileage stuf really took a hit this year, the 150,000- to 160,000- to 180,000-mile stuf. It used to be the kind of thing we knew we would sell. It seems like that’s of. I think everybody is program-oriented – like the J.D. Byriders and the DriveTimes – where everyone is used to a 120,000-mile-andunder car. “But you can get a car

with 118,000 miles and get $3,500 to $4,500. Then you get another car with 140,000 miles where you can’t get (anything) for it. It seems like I would go for the 140,000-mile car since it’s cheap (and you can still make a good proit). “Things are decent in the economy, even if people are struggling. It’s not like you hear on the national news. “I just hope 2017 is as good as this year or better. I expect it to be.”

LOUISIANA Butch Royal, managing partner, ABC-Baton Rouge, Baton Rouge, La.: “We are three years old and running four lanes. “We’re now running 600 to 650 cars. Our irst sale we ran 199 cars. So in those three years we’ve gone up to 650. “We’re averaging about 62 percent (conversion rates) for both consignment and leet-lease combined. We’re one of the higher percent-

ages in the ABC group. Our commercial lane runs about 85 percent conversion rate. The dealer lanes run about 53 to 55 percent. “Thirteen of our employees lost everything in (the summer looding). The support we received from (ABC oicials) Mike Hockett, Jason Hockett and Jim Phillips was phenomenal. Everybody put money in and our partners at Chrysler Capital and Santander put money in. We raised about $140,000 for, not only our employees, but for some of our dealers who had a catastrophic loss. If a tragedy like this could have an upside, it’s that it really brought the whole community together. “I’ve been doing this for 52 years and this was one of the most rewarding experiences, seeing how our company came together to help its employees. “Business is good as we come through this. We’re ahead of where we were a year ago.

Compiled by Jeffrey Bellant “We get about 350 to 375 dealers in the lanes. Then we have another 75 to 80 dealers online. “Our volume is probably 52 to 55 percent commercial accounts and 45 to 48 percent dealers. In my career, it’s probably the most evenly split that I’ve ever experienced. “For commercial accounts, we run Santander, Ally Bank, Chrysler Capital, GE, United Auto Credit, ARI, Element and we run Avis and Budget every week. “We’re running about an $8,000 average car (on the block). Ally Bank has brought in some extremely nice vehicles and we sell some of their of lease in the lanes and that pulls up the average. “We’re also going to start running cars from Credit Acceptance Corp. in January. “We just recently received a contract from GSA, so we’ll start running a government sale in February, probably.”

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ADESA Tulsa December 9 918-437-9044

Manheim New Orleans December 21 985-643-2061

ADESA Boston December 2 508-626-7000

ADESA Brasher’s December 6, 13 916-991-5555

ADESA Washington DC December 14 703-996-1100

Manheim Orlando 800-337-8491

ADESA Golden Gate Manheim Nashville December 6 December 14 209-839-8000 877-386-5004

ADESA Charlotte December 8, 22 704-587-7653

Columbus Fair AA December 21 614-497-2000

Manheim Pennsylvania December 1, 2, 15, 16 800-777-2053

Manheim Atlanta December 7 404-762-9211

Manheim Orlando December 14 800-337-8491

ADESA Chicago December 16 847-551-2151

Manheim Atlanta December 7, 8, 22 404-762-9211

Manheim Phoenix December 1, 8, 15, 22 623-907-7000

Manheim Dallas December 14 877-860-1651

Manheim Pennsylvania *December 1, 15 800-777-2053

ADESA Cincinnati/Dayton December 20 937-746-4000

Manheim Dallas December 14 877-860-1651

Manheim Pittsburgh December 14 724-452-5555

ADESA Golden Gate December 6, 20 209-839-8000

Manheim Denver December 14 800-822-1177

Manheim Riverside December 13, 15 909-689-6000

ADESA Houston December 7, 21 281-580-1800

Manheim Detroit December 8, 22 734-654-7100

Manheim Seattle December 7 206-762-1600

ADESA Indianapolis December 6, 20 800-925-1210

Manheim Fredericksburg December 1, 15 540-368-3400

Manheim Southern California December 8, 22 909-822-2261

ADESA Kansas City December 6, 20 816-525-1100

Manheim Milwaukee December 14 262-835-4436

ADESA Lexington December 1 859-263-5163

Manheim Minneapolis December 7 763-425-7653

ADESA New Jersey December 8 908-725-2200

Manheim Nashville December 14, 20, 21 877-386-5004

ADESA Salt Lake December 13 801-322-1234

Manheim New Jersey December 14 609-298-3400

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*Only Jaguar and Land Rover vehicles will be sold on December 15. All other high lines, excluding Jaguar Land Rover, will be offered on December 1.

Mazda Capital Services ADESA Boston December 2, 16 508-626-7000

Manheim Detroit December 22 734-654-7100

ADESA Golden Gate December 20 209-839-8000

Manheim Fredericksburg Manheim Pennsylvania December 1 December 2, 16 540-368-3400 800-777-2053

ADESA Houston December 7 281-580-1800

Manheim Milwaukee December 14 262-835-4436

Manheim Pittsburgh December 14 724-452-5555

Columbus Fair AA December 21 614-497-2000

Manheim Nashville December 21 877-386-5004

Manheim Riverside December 13 909-689-6000

Manheim Atlanta December 8 404-762-9211

Manheim New Jersey December 14 609-298-3400

Manheim Seattle December 7 206-762-1600

Manheim Orlando December 20 800-337-8491

Subaru Motors Finance ADESA Boston December 2 508-626-7000

Manheim Fredericksburg Manheim Pittsburgh December 15 December 14 540-368-3400 724-452-5555

ADESA Salt Lake December 13 801-322-1234

Manheim Milwaukee December 14 262-835-4436

Manheim Seattle December 7 206-762-1600

Columbus Fair AA December 21 614-497-2000

Manheim New Jersey December 14 609-298-3400

Manheim Southern CA December 22 909-822-2261

Manheim Dallas December 14 877-860-1651

Manheim Orlando December 13 800-337-8491

Southern AA December 14 860-292-7500

Manheim Detroit December 8 734-654-7100

Manheim Pennsylvania December 16 800-777-2053

Contact auctions directly for current sale information.

*The tradename “Subaru Motors Finance” and the Subaru logo are owned / licensed by Subaru of America, Inc. and are licensed to JPMorgan Chase Bank, N.A. (“Chase”). Retail/ Loan and lease accounts are owned by Chase. *The Jaguar word mark, the Jaguar logo, and Jaguar Financial Group are trademarks of Jaguar Land Rover Limited and any use by Chase is under license. The Land Rover word mark, the Land Rover and Oval logo, and Land Rover Financial Group are trademarks of Jaguar Land Rover Limited and any use by Chase is under license. Retail / Loan and lease accounts are owned by Chase. *The tradename "Mazda Capital Services" as well as the Mazda and Mazda Capital Services logos are owned by Mazda Motor Corporation or its affiliates and are licensed to Chase. Retail / Loan and lease accounts are owned by Chase. ©2016 JPMorgan Chase Bank, N.A. Member FDIC (16-038) 12/16

14_UCN.indd 1

11/28/16 4:28 PM


USED CAR NEWS

December 5, 2016 • 15

MONTHLY DEALER CONSIGNMENT AVERAGES AVG. PRICE AVG. MILEAGE

PICKUP

COMPACT CAR Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct 2016 YTD AVG:

$5,094 $5,057 $5,264 $5,347 $5,171 $5,081 $4,991 $4,893 $5,081 $4,728 $5,146

101,953 102,215 101,359 100,491 101,750 102,042 102,225 102,714 103,817 102,351 102,080

$3,954 $3,582 $3,529 $3,666 $3,535 $3,373 $3,633 $3,697 $3,286 $3,146 $3,542

Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct 2016 YTD AVG:

112,752 117,187 117,020 116,329 118,424 116,322 116,487 116,520 116,130 116,248 116,399

Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct 2016 YTD AVG:

LUXURY CAR

SUV

Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct 2016 YTD AVG:

Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct 2016 YTD AVG:

$11,866 97,376 $11,350 100,054 $11,851 98,354 $13,046 95,513 $12,501 97,324 $12,430 97,295 $12,511 94,297 $11,719 97,297 $11,625 96,655 $11,187 98,040 $12,003 97,273 $5,854 $5,863 $6,112 $6,361 $6,134 $6,063 $6,072 $5,883 $5,704 $5,659 $5,978

103,797 104,096 102,214 100,370 102,265 102,402 102,837 102,661 104,860 108,244 103,268

$15,079 $15,324 $17,104 $18,179 $17,793 $17,896 $17,214 $16,528 $16,720 $15,905 $16,863

77,964 76,751 70,658 70,446 71,155 71,291 71,374 72,448 71,575 72,464 72,391

$11,715 $11,515 $11,716 $12,259 $12,089 $12,007 $11,966 $11,500 $11,442 $11,037 $11,725

105,890 107,350 107,171 105,055 105,790 104,954 104,650 106,441 106,315 107,463 106,125

$6,533 $6,280 $6,526 $6,924 $6,766 $6,633 $6,636 $6,480 $6,313 $6,176 $6,532

118,990 121,104 120,846 119,071 119,547 118,851 119,569 120,623 121,860 121,025 120,158

VAN

MIDSIZE CAR Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct 2016 YTD AVG:

$15,940 $15,888 $16,425 $16,997 $16,778 $16,715 $16,595 $16,690 $16,130 $16,358 $16,373

SPORTS CAR

FULLSIZE CAR Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct 2016 YTD AVG:

AVG. PRICE AVG. MILEAGE

109,097 109,788 108,942 107,161 107,950 108,326 106,880 108,829 109,389 109,572 108,605

Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2016 Aug 2016 Sep 2016 Oct 2016 YTD AVG:

CURRENT YTD, THROUGH OCTOBER 2016 SOURCE: MANHEIM CONSULTING

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11/28/16 4:09 PM


16 • December 5, 2016

USED CAR NEWS

DISCONNECTED JOTTINGS FROM Why is it that all those Christmas lights that were so carefully packed away after last year’s attempt at making the house look like

TONY MOORBY

been loaded onto racks in the garage to be left undisturbed for the duration. Within the course of the last year, the gremlins

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

Atlantic City look more akin to a viper’s nest than a neat, systematic, electrical collection of visual peacockery? I swear that, last year, Terry and I were extra diligent in winding all those strings of lights and baubles into neat, accessible piles in storage boxes reserved for no other purpose. They are large plastic containers with lids that allow the stacking of their twins on top – there must be four or five of them – and have

have crept in and wreaked all kinds of havoc. It looks more like a twirled maypole in there. How does that happen? It seems that the race to erect these festoons of festivity gets earlier each year – roughly the same time as Costco displays its Christmas wares – about two weeks after Easter, I think. Seriously, some folks locally put theirs up a couple of weeks before Thanksgiving. It must be a real pain moving all those pumpkins

around to allow access for ladders and boxes. Now, at this time of year, when the weather can change with the hour, it’s a bit like playing Russian roulette to choose a warm enough day to avoid getting frostbite in your nether regions. I’m sure the Christmas display industry depends on short-tempered people like me who refuse to unravel the travails of Christmas past – I’ve spent too many useless and futile hours of twirling and curling strings of lights around various trees and inanimate objects, only to stand back, plug the whole lot in and find a miscreant bulb which refuses to play along with all the rest. Why is it that they all go out when one doesn’t work? Any amount of prodding and pulling with frozen fingertips renders no success, just another trip to Home Depot to do what one should have done in the first place – throw the old ones away and start

C R O S S WO R D 27. Super ____ (political funding group) 29. On one’s own 31. Bahamas’ capital 33. Space 34. Braking system 35. Creating aerodynamic lines perhaps 39. Toyota popular for its mpg 41. South Korean model 42. German luxury car 44. Jeep _____ 45. Interstate grid, e.g. Down 1. VW family car 2. G80 model

To see past columns from Tony Moorby, visit www.usedcarnews.com/columnists/tony-moorby Digital version available at usedcarnews.com

By Myles Mellor

Across 1. Buick model 4. Ozone layer pollutant, for short 6. Recommendation from JD Power 9. Luxury car brand 10. Detach the trailer perhaps 11. Coverage, that’s essential 15. Lower the lights 17. _____ Kournikova of tennis fame 19. Greatest boxer 21. Frequent SUV buyer, to carry kids to games, 2 words 23. Small kid 24. Wall ___ 26. Providence locale

being in keeping with the precepts against global warming, throw a warm welcoming glow around like a grandmother’s woolly shawl. No doubt some government edict will preclude their future availability and the warmth of Christmas wishes will go the way of Christmas card greetings – politically correct but coolly meaningless. With all that in mind, I think I’ll go through the motions and dig out last year’s warm, glowing, snaky strings, including the icicles to hang from the eaves along with the bangles and baubles to hang from conifers out front just to see the excited glow from my grandson’s face. That alone makes the whole exercise entirely worthwhile.

over with a brand new set. I’ve now learned to plug them in first, inspect the snaking strand and then put them up only if all burst into expectant life. Then there’s the question of color. Are you an all-white household or do you introduce a smattering of stylish reds and greens at the doorway? Do you go all out to stun the neighbors and recreate Myrtle Beach in the middle of suburbia with every color known to the human visual spectrum. Have you noticed the inclusion of blue lights in the last few years? You never saw that when I was growing up. Blue! Who knew! Then there are the new LED lights. I find them to emit a chilly light, unfriendly, somehow. The old fashioned ones, while

1

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Solution to this puzzle in the 12/19/16 issue. Call 1.800.794.0760 for a FREE subscription.

16_UCN.indd 1

11/28/16 3:35 PM


USED CAR NEWS

December 5, 2016 • 17 Advertisers are solely responsible for content of classified advertisements. To place an ad, or for more information, call the Classified Department: 800-794-0760 ext.107

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11/28/16 2:29 PM


18 • December 5, 2016

USED CAR NEWS

AROUND THE BLOCK

Compiled by Jeffrey Bellant

HOUSTON, WE HAVE AN AUCTION GROUP Floor Planner Honors Sales

BIGGER IN TEXAS: Houston Auto Auction, drawing dealers in the lanes at a recent sale, has become ServNet’s newest member.

ServNet has added another facility to its roster of independent auction locations, said Kevin Brown, ServNet’s president, in introducing the group’s newest member: Houston Auto Auction. Founded in 1964 by James B. Bowers, the auction continues under the second-generation owner-

ship and operation led by brothers Tim Bowers, James “Chip” Bowers II and Mark Bowers. Over the five decades since its founding, the auction has emerged as a leader in its market area selling vehicles, large commercial trucks and heavy equipment for corporations, leasing companies, banks,

credit union, municipalities and other government agencies. “Shaped by the Bowers family, the Houston Auto Auction has made a tremendous impact on the marketplace over the past 52 years, and we are delighted to welcome Houston Auto Auction to ServNet,” Brown said. Tim Bowers, Houston Auto Auction’s president and CEO, said he is thrilled to join ServNet. “The knowledge, insight and years of combined business experience that the ServNet auction owners share is a powerful force in the industry,” he said, “and I know that our collaboration with them will prove a tremendous benefit to Houston Auto Auction.” Bowers said his auction’s alliance with ServNet is part of a number of changes taking place at Houston Auto Auction, with a major facility expansion planned for early 2017.

NextGear Capital, a Cox Automotive brand, presented its fourth annual Auction Partners Awards at the Red Rock Casino and Resort in Las Vegas as part of the 2016 National Automobile Auction Association convention. The awards spotlight independently owned auction leaders and recognize service to growing and supporting the industry. The 2016 Auction Partner Award winners are: • Operational Excellence: West Michigan Auto Auction – Wayland, Mich. • Operational Excellence: San Antonio Auto Auction – San Antonio • Operational Excellence: Houston’s 1st Choice Auto Auction – Houston • Remarketing Excellence: Carolina Auto Auction – Williamston, S.C.

We invite news items and top-quality photos from our readers to be considered for “Around the Block.” Please include the name of a contact person and a telephone number. Send items and photos to: Jeffrey Bellant. Mail: Used Car News, 24114 Harper Ave., St. Clair Shores, MI 48080. Fax: (586) 772-9400 e-mail: jeff@usedcarnews.com

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