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February 6, 2017

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Used Cars Draw Traditional New Car Buyers

Photo by Ted Craig SPREADING THE WORD: Erik Hjermstad of Experian explains the current auto finance market to attendees of this year’s National Automobile Dealers Association Convention. Experian finds that more than half of the used cars financed are purchased by prime buyers. By Ted Craig

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NEW ORLEANS – Attendees at the National Automobile Dealers Association Convention consider themselves new-car dealers, but more and more used cars drive their profits and bring consumers to their stores. Several speakers at events around this year’s NADA convention made that point. Used cars provide a margin of 2:1 for franchise dealers, compared with new cars, said Erin Kerrigan, managing director of Kerrigan Advisors. That difference should remain strong even if used cars feel

more pressure. “Even if we see some margin compression on used cars, there’s a lot more margin there,” Kerrigan said. Fixed operations are the only part of a franchise dealer’s business to outperform used cars and even there used cars provide more of a boost as certified pre-owned sales continue to grow. They reached a record of 2.64 million in 2016. Demand for used cars is growing, even among traditional new-car buyers. “We’re increasingly seeing prime buyers buy used cars,” said Melinda Zabritiski, senior director of Ex-

perian Automotive. The average credit score for a used-car buyer rose to 677 in 2016 from 668 in 2015, she said. This allows creditors to keep monthly payments lower by lengthening the finance terms without adding risk. Part of the reason more consumers are looking at used is that new cars continue to rise in price while wages remain stagnant. Mark Scarpelli, chairman of the National Automobile Dealers Association, said ever-growing mandates for fuel efficiency and safety technology drive these price increases. The downside of this move to used by consumers is that while

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dealers can compensate by selling more used vehicles, manufacturers depend entirely on selling new cars. They might increase incentives to re-capture some of these sales, said Jonathan Banks, J.D. Power’s vice president of vehicle analysis and analytics. Incentives already reached an average of $4,001 per unit, or 10.6 percent of MSRP, in 2016. This risks creating a vicious circle where incentives drive down both new and used prices, making used even more attractive, and manufacturers spend even more to maintain share. “It’s a bit of a frightening situation,” Banks said.


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USED CAR NEWS

February 6, 2017 • 3

Credit Agencies See No Bubble in Auto Finance By Ted Craig

Another year, another discussion of whether or not there is an automotive finance bubble. And once again, industry experts side with the “No” camp. A panel of representatives from the three major consumer credit agencies speaking at the recent American Financial Services Association’s vehicle conference all said the threat of such a bubble is greatly overrated. “I definitely do not believe there is a bubble,” said Amy Crews Cutts, chief economist for Equifax Inc. Cutts knows about finance bubbles, having worked earlier in her career at mortgage entity Freddie Mac. She said people buy houses for many reasons, including use as a financial tool. They buy cars for one reason – to get around. Another difference between auto finance and mortgages comes in the ease of repossession. In some states, homeown-

ers have the right to stay in their homes for 1,000 days after they stop making payments. In auto finance, the tow truck comes fairly quickly, Crews Cutts said. Many of the numbers used to support the idea of a subprime auto finance bubble fail to hold up to scrutiny the experts said. For example, subprime seems to be growing at a rapid rate and is on pace to become an outsized portion of the overall market. The segment is growing, but remains below the 20 percent mark it stood at before the recession, said Jason Laky, TransUnion’s automotive business lead. Another reason subprime auto finance makes up a larger portion of the market is there is less prime finance growth, said Melinda Zabritski, senior director of Experian Automotive. That’s because many prime buyers who would have financed a new-vehicle purchase are instead opting to lease.

Lower monthly payments help drive leasing’s growing popularity. On the finance side, the only way to provide lower payments comes from lengthening the terms of the finance contracts. Many creditors have done just that and this creates another cause for concern. But again, Zabritiski said the concern proves overblown. “I’d rather see longer term loans because they keep customers current,” she said.

Creditors can take larger risks, such as longer finance terms, in part because they know more about their customers today during every phase of the relationship. At the start of the contract, for example, creditors can verify income electronically for about 50 percent of consumers. Later on, if something does go wrong, more creditors use payment assurance devices to help in the reposses-

sion process. Also, the underlying collateral, the vehicles themselves, are of such high quality that it lowers the risk. Even if there were an auto finance bubble, it wouldn’t create the systemic risk that the mortgage bubble did, Laky said. “When you look at auto finance, it’s just not that big and not that integrated into the financial system the way mortgages were,” he said.

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Subaru, the Subaru logo, and Subaru Motors Finance are trademarks of Subaru of America, Inc. (“Subaru”) and any use by Chase Bank USA, N.A. (“Chase USA”) and JPMorgan Chase Bank, N.A. (“Chase”) is under license. Retail / Loan accounts are owned by either Chase or Chase USA and lease accounts are owned by Chase. 2 Jaguar and Land Rover, their respective logos, and the financial group names (Jaguar Financial Group and Land Rover Financial Group) are trademarks of Jaguar and/or Land Rover and any use by Chase is under license. Retail/Loan and lease accounts are owned by Chase. 3 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. © 2014 JPMorgan Chase Bank, N.A. Member FDIC. All rights reserved. (14-221) 06/14


4 • February 6, 2017

USED CAR NEWS

NEWS BRIEFS CPS Issues Securitization

lateralization of 5.15 percent of the more than 40 percent of franchised Consumer Portfolio Services Inc. then-outstanding receivable pool dealer retail sales transactions in America); the J.D. Power/National announced the closing of its first balance. Auto Auction Association Auctionterm securitization in 2017. Net service (accounting for more The weighted average coupon on J.D. Power Unveils Valuation Tool than 80 percent of auto auction the notes is approximately 3.91 perJ.D. Power has debuted J.D. Power transactions); and proprietary J.D. cent. The 2017-A transaction has initial Residual Values, a benchmark prod- Power Voice of the Customer data. Residual Values is the first all-new credit enhancement consisting of uct for vehicle residual values. product introduced under the newly Designed as an information rea cash deposit equal to 1 percent of the original receivable pool balance source for vehicle manufacturers, created Data & Analytics Division and over-collateralization of 1.75 captive finance companies and lend- of J.D. Power. The unit includes J.D. ers, Residual Values incorporates Power Valuation Services, formerly percent. The final enhancement level re- sales transaction data gathered by known as NADA Used Car Guide. quires accelerated payment of prin- the Power Information Network cipal on the notes to reach overcol- (PIN) from J.D. Power (representing

MILESTONES J. Omar Landis, an auctioneer and auction owner, died Jan. 22. He was 82. In 1955, Landis founded J. Omar Landis Auction Service and he conducted public auctions in 15 states and Canada for more than 60 years. For over 52 years, Landis has been the owner and operator of Garden Spot Auto Auction in Ephrata, Pa. Landis was also the owner and operator of Dutchland Collector Car Auction, one of the very first classic car auctions in the United States. Landis was a lifetime member of

the National Auto Auction Association and served as its president from 1990 to 1991. In 1999, Omar was inducted into the National Auto Auction Association Hall of Fame. He was also a lifetime member of the Pennsylvania Auctioneers Association, a member and past president of the Southeastern Pennsylvania Auction Association, and a member and past president of the Eastern Auto Auction Association. Landis served for eight years on the Pennsylvania Auctioneering Examiners Board.

Ford Seeks to Move More of Sales Process Online

Ford Motor Credit Co. and financial technology company AutoFi have launched a new program to shorten the financing process. In addition, Ford Credit has made an investment in AutoFi as Ford Credit continues pursuing technological advances to improve the financing experience. The AutoFi platform can be used now at Ricart Ford in Groveport, Ohio, and will roll out over time to more Ford and Lincoln dealerships across the United States. Once the online part of the transaction is complete, all customers need to do is sign the paperwork

when they collect their new Ford. Consumers may shop for a new Ford in the showroom or from anywhere via the dealership website. After selecting a vehicle, they can apply for credit and receive a decision, choose the financing terms that make sense for them, and then review and select optional vehicle protection products – completely online. Customers then can review a final summary of the financing terms and schedule a time to complete the transaction and pick up the vehicle.

CarMax Hires for Expansion CarMax Inc. is hiring to fill more tan 120 positions at the company’s two new stores opening in Puyallup and Lynnwood, Wash., in March. These CarMax stores will be the first in the Puget Sound region. The first CarMax in Washington opened in Spokane in 2014.

PAGE 10

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 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

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

Vol. 22 • No. 20 Used Car News is published the first 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.

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USED CAR NEWS

February 6, 2017 • 5

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vehicle for its cargo capacity, compared with car buyers (42 percent vs. 20 percent, respectively); 4WD or AWD capability (48 percent vs. 9 percent); and safety (45 percent vs. 38 percent). Car buyers who did consider an SUV purchase but decided against it, tended to do so because they were seeking a lower price and better gas mileage. Buyers who shopped for cars before deciding on an SUV tended to reject the cars because they were too small, lacked the desired cargo capacity, and lacked 4WD/AWD capability. The Auto Avoider Study indicates that SUV buyers are less brand-loyal than people who buy cars, pickup trucks, or minivans. Of all SUV buyers surveyed, 38 percent never owned that brand of vehicle before – a higher number than for car, pickup truck, and minivan buyers.

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ceeds in excess of $1 million were missing and/or had been stolen. An investigation revealed that Gutierrez had received the proceeds from the sales of numerous motor vehicles and had failed to report the sales or remit the monies to the floor planner. He then tried to conceal the proceeds by completing transfers of the monies to bank accounts unknown to the floor planner and unrelated to the initial sales transactions. Gutierrez then used the proceeds, in excess of $1 million, for his own purposes.

Sheriff’s deputies found Brandon Gianopoulos dead inside. Gianopoulos worked at Mike Ward Maserati, a dealership located a short distance away. KUSA reports that a 27-second Facebook Live video was posted by Gianopoulos on the night of Jan. 13 showing someone behind the wheel of a Maserati accelerating from 2 to 111 miles an hour.

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Dealer Steals from Floor Planner A New Jersey used-car dealer has been charged with theft, money laundering and fraud for stealing money from a floor planner. In October, the Bergen County Prosecutor’s Office received a complaint from a floor planner regarding the theft of proceeds of the sale of motor vehicles by Antonio L. Gutierrez, the owner of The Luxury Haus. The complainant claimed that Gutierrez had defaulted on motor vehicle liens valued in excess of $5 million. As a result of an action to foreclose on the dealership, the floor planner suspected that pro-

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6 • February 6, 2017

USED CAR NEWS

DEALER LIFE ETHIOPIAN IMMIGRANT ACHIEVES AMERICAN DREAM ON THE LOT By Jeffrey Bellant

Teshome Tesfaye, 59, came to the United States as a 21-year-old Ethiopian immigrant with just a few dollars in his pocket. Today he owns Norfolk Motors outside Denver, with more than 100 vehicles on his website. It was a long journey and a big change from his native country. “When I left the country, it was under a Communist regime,” Tesfaye said. “It was getting worse and worse.” He came to America to get an education and attended Cheyney State College, which later became Cheyney University of Pennsylvania, a historically black college founded in 1837. He then traveled to Metropolitan State University of Denver and studied chemistry.

While driving a taxi to earn money, he went to pharmacy school. Tesfaye said one of his early jobs as a pharmacy tech was working at the hospital preparing I.V. bags, but it didn’t last. “I worked a couple of months and quit because I didn’t like it,” he said. “The smell (of the medications) was making me sick.” So he went back to driving, working for a shuttle company. “It was good money at the time,” he said. “I had a family.” Tesfaye was married to his high school sweetheart, who

Photos Courtesy of Colorado IADA and Norfolk Motors ROCKY MOUNTAIN GUY: Teshome Tesfaye, owner of Norfolk Motors, seen above left with Paulos Mengisto; below with fellow Colorado IADA board member Dave Cardella; and at his dealership (left), emigrated from Ethiopia to eventually open a used-car store in Colorado.

had previously studied in Germany on a scholarship. Eventually, Tesfaye got a dealer license. It was about 1996 or 1997, he said. “I love cars,” he said. “I was a wholesaler when I started.” At that time, his brother was an independent retail

car dealer. “He was giving me advice and everything,” Tesfaye said. “He’s my little brother, but he had been doing it for a while.” Tesfaye wanted to make more money than he was making as a wholesaler and decided to start a retail business. “I opened up my own store and started with three cars,” he said. “That’s how I started.” His dealership – Norfolk Motors in Aurora – was named after a street he used to live on. It has grown a bit since then. “Right now, I have a place

that takes up the whole block,” he said. Norfolk Motors sells almost all retail, with no subprime and maybe one or two buy-here, pay-here deals. Tesfaye also does wholesaling. “I sell 60-plus a month in retail,” he said He has 100 units in stock and more than that in storage. Tesfaye caters to a more upscale market. “I carry luxury cars like Range Rovers, Mercedes, BMWs, Audis – most of them are luxury,” he said. The average retail price is in the $14,000 to $15,000 range. The average model year is 2008 or 2009 and mileage is less than 120,000. Tesfaye said this niche is not common among the independents he knows. “A lot of dealers don’t carry luxury cars because the maintenance is very high,” he said. While there are some used luxury dealers around, Tesfaye said his vehicles are targeted toward middle-class people. “It’s not too much money to ask,” he said. “You can drive a Range Rover for $14,000.” Tesfaye is settled here in the U.S. with his wife and two daughters. Many of his other family members live in America as well. He was fortunate to come here in the mid-1990s, he said, when the waiting peri-

od to become a citizen wasn’t ple.” so long. Within five years of For Tesfaye, America is a applying, he was an Ameri- land of opportunity. can citizen. The differences between Last June, he had a chance the two countries stood out

to go back to Ethiopia for the first time in 23 years. “It was completely different,” he said. “When I left the country it had 45 million people. Now the country has, like, 98 million people. “I had to show my kids, because they were born here. They’ve never been there.” Tesfaye’s oldest daughter is away at college in North Carolina, studying marketing and business. His youngest is in high school. When Tesfaye first left his homeland, he hadn’t planned on going back. It still lacks the freedoms that the U.S. offers. “It’s just controlled by a few people,” Tesfaye said. “But when I left, it was completely Communist.” “They’re still killing peo-

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last summer when Tesfaye attended the National Independent Automobile Dealers Association’s Day on the Hill in Washington, D.C. “I didn’t expect that this guy from Ethiopia would be meeting with U.S. Senator Cory Gardner,” he said. “This is just a dream come true. “It was very exciting. It was the time of my life.” Tesfaye said one of the reasons why so many Ethiopians come to America is because of the lack of freedom in his native land. “When I left Ethiopia, the government let us take $50 only. That was a scary thing. “But this is a dream land. If you work hard, you can make money. You can do anything you want.”


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8 • February 6, 2017

USED CAR NEWS

RETAIL MARKETS IOWA Darren Farmer, general manager, David A. Farmer Inc., Center Point, Iowa: “We’ve been in business 30 years. My dad, Dave, has been in the car business since 1967. He recently retired. Now I’m running the day-to-day operations. “We keep anywhere from 30 to 50 units on the lot. “On average, we sell 15 a month. December was actually really slow. January was a little better. I think February will be even better yet. “I buy cars from auctions: ADESA Des Moines, Plaza Auto Auction and Des Moines Auto Auction. I buy quite a few from two or three wholesalers I use. My dad’s been going to Plaza since 1967. “We don’t do buy-here, pay-here. It’s strictly cash and we offer financing for good credit through seven different credit unions we work with and some local banks. “Average retail price is probably $8,500.

“The average model year is probably 2008 and average mileage is 100,000, give or take a little. “We probably carry 50 percent cars and the other 50 percent is SUVs and trucks combined. We carry 15 SUVs and trucks at all times. Trucks are a tough market, It’s hard to find a decent truck for $8,500. “I have a 2010 Chevrolet Equinox with 359,000 miles on it. I bought it at ADESA Des Moines. It’s a one-owner vehicle. It just looks phenomenal for the miles on it. I just took a chance on it. I have personally put 6,000 miles on it myself. The only thing I’ve done since we bought it was put an ABS wheel bearing in it. I ran an AutoCheck on it. The guy bought it at a Chevy dealership in Des Moines and had it serviced at the dealership for every oil change, every tire rotation. It had something like 130 service records on it. “I like having it here because people shopping for

a car think they have to get a Honda or Toyota, because they think they are the only cars in the world that can run this many miles. So I show them the Chevy and tell them they’re totally wrong. “I’d say 90 percent of my cars are American made, like Ford and Chevy. Ten percent are Toyota and Honda. The reason is I’ve got a good mechanic and he pretty much just does GM and Ford. “The average recon costs are $550. We fix everything on them, even if it’s a window switch. We send that work out. “We have a website and we use Craigslist, AutoTrader, Cars.com and CarGurus. I don’t run any print ads, TV or radio. “Recently I sold a 2004 Pontiac Grand Prix with 112,000 miles on it. I got $5,100 for it. “I think 2017 is going to be a good year. The tough part is buying nice stuff in our price range.”

Compiled by Jeffrey Bellant MISSISSIPPI Bentley Nolan, general manager, Nolan Brothers, Tupelo, Miss.: “We’ve been in business since 1990. We have two rooftops. The other (location) is in Booneville, Miss., which is about 40 minutes north of us. “We keep anywhere from 200 to 300 at this location. We source them from auctions – ADESA and Manheim, primarily – and some independents. We also have wholesale buyers. We take trades and buy from the public. “We sell anywhere from 45 to 60 a month on average. During income tax refund season, it will be a little more. We’re strictly buy-here, pay-here. “We just go for a flat 25 to 30 percent down payment. Our average term length is 36 months. That’s gone up a little bit, from 31 months. “We use GPS tracking devices for repossessions but also theft recovery from the lot.

“What we sell the most of are four- to five-year old trucks. But we’ll keep (units) in the 10-year range. Average mileage is right around 100,000, typically. “We use vAuto to determine what’s trending (in our market). We primarily sell domestics. It’s because of the parts availability and being able to work on them. One of the last vehicles we sold was a 2006 Chevy Silverado. It had about 160,000 miles. We sold that truck for $8,900. “Average reconditioning costs are $350. It helps our business model if they don’t need a lot of work. “For advertising, we do network television, cable and some free papers that are local. We also use social media quite a bit now. We use Facebook and a lot of our inventory goes straight into our Twitter feed. We also use AutoTrader, Cars. com and CarGurus. We cast a very wide net. Our profits were up in 2016. We’re optimistic for 2017.”

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USED CAR NEWS

February 6, 2017 • 9

WHOLESALE MARKETS CALIFORNIA Steve Rice, general manager, Auctions-in-MotionThousand Oaks, Thousand Oaks, Calif.: “We have been open over 10 years. XLerate purchased Auctions-in-Motion about 3 ½ years ago. We have three locations that are all about 60 to 80 miles from each other. “We run two lanes at this location. “We consign about 250 cars at each of the three locations. “The volume is up a little bit year-over-year. “Throughout the year, our average sales percentage is about 60 to 65 percent. “We are 100 percent dealer consignment. We will take repos, but it’s generally not something we deal with. “About 90 percent of volume is new-car store consignment. That’s been pretty consistent throughout 10 years in business. “Average sale price is right around the $8,000 to $8,300 range. We get really nice ve-

hicles at our auction. “On average, we’ll have about 300 buyers in the lanes. That’s grown a little bit year-over-year. “What I’m hearing from dealers in the lanes is that retail has been a little bit slow over the last couple of months. That’s kind of typical in November and December. Those months are never great for independents, though they are good for new-car stores. “But as we come into tax time, I know things will start to pick up. Things are definitely going in that direction. I noticed in one recent sale the auctions were definitely picking up. “During tax time, our sales go from averaging 65 percent to closer to 80 percent. “We have really good relationships with buyers and sellers. I think the mood has been really positive. “We use Simulcast. We use Edge Pipeline. Every year seems to pick up for us. I’d have to check my numbers, but I think we’re selling just

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about 18 to 19 percent of our cars online. “Being in Thousand Oaks, Calif., we’re a little bit out in the suburbs from L.A. It’s a bit of a drive for some guys to come out here. So Simulcast helps. “It’s an affluent area, so we get a lot of nice trades, a lot of extreme highlines. I’m talking Range Rovers, Ferraris and Lamborghinis – those types of vehicles. We sell a lot of that stuff online. “We’re kind of unique. A month ago we sold a McLaren across the block and it brought $214,000. The vehicle right behind it was a Mercedes that sold for $11,000. Right behind that was a Range Rover that sold for $105,000. “We have one lane that’s $10,000 and under and another that’s over $10,000. We do pretty well with just about anything we put into the auction, but that fourdoor import in the $10,000 range is really peaking. “I think the upcoming year is going to be great.”

MISSOURI Kevin Brown, owner/ general manager, Missouri Auto Auction, Columbia, Mo.: “We’ve been here 16 years. We have five lanes, but usually run four. We’ll run our fifth lane for promotional events and other special events. “Although we got hit with some bad weather over the last few weeks, we typically run between 450 and 550 every week. “Our typical sales percentage is 60-plus. But we’ve been running around 57 percent in December and January, which is low for us. It was just a combination of a lot of things – the holidays, the election and the weather. “We’re primarily a newcar trade auction. “Just shooting from the hip, I’d say our volume is 50 percent franchise (consignment), 20 to 25 percent independents and the rest is fleet. Our fleet is starting to pick up in the past year.

Compiled by Jeffrey Bellant We’ve gotten some new accounts, so that has certainly helped. “We’re fortunate to have Chrysler sales four times a year, which is nice. Our biggest fleet account is ARI and we also have United Auto Credit Corp. We’ve acquired a number of smaller fleet accounts that are starting to trickle in. The fleet side has really taken off. “We have a municipal public sale on the last Friday of the month. That is primarily equipment and vocational trucks – meaning dump trucks and work trucks, those types of things. We’ll average 65 to 75 units. “We also have a GSA sale, maybe seven to eight times a year. We’ll have 75 to 100 units. Those are passenger vehicles and pick-up trucks. I believe we’ll start those in February or March. “Our average price coming through the lanes is $5,200. “We use EDGE online. “I feel positive about this year. Everybody is really upbeat.”

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10 • February 6, 2017

USED CAR NEWS

DISCONNECTED JOTTINGS FROM I watched as a Ford F150 disappeared down a pothole on I-440 the other day. He had to engage four-wheel drive just to extricate himself from this recent impediment

TONY MOORBY

both never got finished. The result? More congestion than ever. A commute from the outlying bedroom communities, distances ranging from 15 to 30 miles, used to take an

Tony Moorby • 50-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

to progress. I-440 was built as an inner ring road to circumnavigate a route around Nashville back in the eighties. The outer ring road, SR 840, was built about thirtyfive miles further out to handle “through” traffic on the three interstates that hitherto met in downtown Nashville – I-40, I-65 and I-24. The southern half was finished first because it was the area of most congestion and the wealthier folks lived on that side, so that’s where the money went. That is, until it ran out. So the north sides of

easy, bucolic saunter to work with no reason to break any speed records and you could park outside the front door. The daily dash now includes an hour and a half to come in from neighboring Murfreesboro on the east side in bumper-to-bumper, temper-tearing traffic. Likewise from Franklin in the south, Gallatin on the north side or Bellevue out west. Nashville’s growth – over 1 million people in the last 10 years – embraces a sense of both pride and regret at the same time. Getting around

used to involve a graceful and leisurely progress with a polite nod or wave to a neighbor. If someone signaled left but turned right, no big deal. It happened all the time. Folks had the room, time and mentality to make such last minute adjustments to their journeys. Try that on I-440 now and you’ll invite the Wrath of Khan and start a road rage incident that’s likely to end up on Channel 2 on the evening news. I-440 was built using concrete for the road surface and its abutments. It looked sleek, crisp and carried a sense of 1980s cool advancement. That might suit an auto auction parking lot in California but here it’s as useful as boobs on a bulldog. Aquaplaning at 49 miles per hour was commonplace and slicklooking I-440 looked something more like scrap yard for hours at a time. They cut grooves in the pavement to aid drainage and reduce noise. While now marginally better, try riding a motorcycle on grooved pavement at speeds to keep up with the traffic. You couldn’t

C R O S S WO R D 39. he older 41. A Jag is a luxury one 42. Do-it-all family vehicle from Toyota 45. Auto-making pioneer 46. Versatile vehicles 47. Kind of sauce 48. Popular car color 49. At no cost Down 1. Line of Toyota compact cars 2. U-Haul vehicle 3. Manhattan neighborhood 4. Hyundai Santa ___ 5. Part of a wheel 6. What keeps a car ride smooth 7. Hyundai model

in the coffers. So Governor Haslam has a plan to reduce taxes on food and manufacturing but he proposes to raise revenues on a higher gas tax and vehicle registrations to provide for future infrastructure improvements. I remember a past article on the subject in support of such a move. In these new days of Trump’s push for such things on a pay-as-you-go basis, it can’t happen soon enough. Better than having our kids pay for it later. The project is called “IMPROVE”, a mnemonic for Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy. Perhaps we’ll consider building roundabouts instead of red lights. That’s fodder for another article – stay tuned. In the meanwhile I’ll use the Range Rover with its suspension raised to get about town.

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. Popular Honda 4. Popular Subaru 9. Ford nameplate 10. Sporty coupe from Ford 13. Heavily criticize 14. Upscale marque owned by Toyota 16. Sporty Chevy 19. ‘’Don’t get ___ ideas’’ 20. Hondas 22. It may precede a nickname 23. Light metal symbol 24. Used, 2 words 27. Gear setting 30. Concord’s state 32. Mena’s state 33. Maintenance 35. Take steps 37. Enthusiastic

drive a sixpenny nail up your backside with a seven-pound club hammer as your nerves are so clenched! When concrete starts to crumble, its rate of destruction is alarming and the roadway, encased in concrete barriers and cut-through widening embankments now looks like some cheap and cheesy Russian project. All we need to complete the vision would be a few high-rise apartment blocks with the weekly wash dangling from the balconies. Not so much the sunny gateway to the south; now more like a shabby show of lacked maintenance and who really gives a rat’s damn. That song about leaving a cake out in the rain comes to mind The irony here is that the influx of people to the area has brought extra tax revenues to the state. According to one local association, we now have a cool $1 billion

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Solution to this puzzle in the 2/20/17 issue. Call 1.800.794.0760 for a FREE subscription.

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USED CAR NEWS

Special Advertising Section

Technology Spotlight

February 6, 2017 • 11

Avoid Tax Season Pitfalls with a GPS Solution

Spotlight Automotive Finance Corporation .........16 & 18

Copart ................................................................18

With the right tools and preparation dealers can thrive during tax season and beyond; and a trusted GPS partner can play a central role in that success. Unfortunately, not all GPS providers are created equal. From product quality and network coverage, to reliability and customer support - there is a wide range of products to choose from.

THE FACT IS, ONLY GOLDSTAR GPS HAS:

Credit Acceptance Corp. ..................... 14 & 15 A 99.9% PERFORMANCE GUARANTEE

Drivin’........................................................12 & 17 THE NUMBER 1 SELLING DEVICE IN THE INDUSTRY

Frazer ....................................................... 14 & 16 OVER 3 MILLION ACTIVE SUBSCRIBERS

iMetrik Global ..........................................12 &13 COMPREHENSIVE SECURITY MEASURES

Northland ................................................ 16 & 17

Spireon .....................................................11 & 19

NEARLY 2 DECADES OF EXPERIENCE

GoldStar helps dealers to maximize revenue while maintaining peace of mind that their dealership and investments are safe.

Vehicle Acceptance...............................14 & 16

UTILIZE A TRUSTED SOLUTION LIKE GOLDSTAR TO MINIMIZE YOUR RISK AND SAY YES TO MORE BUYERS WITH CONFIDENCE.

Westlake Financial .........................................17

Call (888) 644-9380 or visit spireon.com/tax-season to learn more.


Special Advertising Section

12 • February 6, 2017

USED CAR NEWS

Five Ways to Protect Your Assets and Improve Cash Flow with Advanced GPS Technology Keeping track of your assets is vital to your business success. High-risk customers who stop making loan payments or disappear with your vehicle are the biggest threat to your proitability. By installing the latest GPS technology in the used cars you sell, you can save money, protect your assets, and dramatically improve your cash low. Here are ive tips for buying, installing, and using advanced GPS solutions to boost your bottom line: 1. Choose the right network technology Many providers sell devices that use CDMA networks – an old technology which is slated to be discontinued as early as 2019. Other devices, such as IMETRIK’s newer generation models, run on a 3.5G GSM network, the global standard in wireless technology, which has no announced shutdown date. To maximize value, it is important to choose devices that will last for years.

2. GPS technology matters Don’t rely on old technology to track your assets. Great progress has been made since 1978, when the irst GPS satellites were launched. Newer GPS receivers provide improved precision and reliability. IMETRIK devices are equipped with a 72-channel receiver that uses not only GPS satellites, but also GLONASS and GALILEO satellites, allowing you to pinpoint your asset to within approximately 12 feet. This greater precision makes it easier to ind the car or truck, reducing repo and impoundment costs. “The car was in close proximity to where the IMETRIK GPS indicated, so it worked like a charm,” said Brad Cruickshank, CFO, Transcan Leasing Corp., Vancouver, BC. “It was previously missed by our bailif as it was very well hidden.” 3. Buy quality hardware If a GPS device stops

working, you have essentially lost the vehicle. To prevent this, IMETRIK designs and manufactures its own GPS devices using premium quality industrial-grade components – special heat-resistant silicon SIM chips – ofering a broader operating temperature range that won’t let you down. “The harsh New Mexico environment makes it almost impossible for an GPS unit to survive – that is, except for IMETRIK, which won hands-down in our ruggedness comparison,” said Ken Starr, President, Sunstar Capital, Albuquerque, NM. 4. Lower total cost of ownership A renewal fee of $15 per year adds up quickly. Consider the total cost of ownership over the lifetime of the device, not just the cost for hardware. IMETRIK does not charge yearly renewal or reactivation fees. You pay only once. If you have 1,000 cars with GPS devices, with

IMETRIK you can save up as much as $15,000 a year. “We have been using IMETRIK since 2009 and have over 2,400 vehicles, says George Bolek, President, Peoples Credit Inc. “We have saved thousands of dollars because IMETRIK does not charge a renewal fee.” 5. Optimize your operational costs It’s impossible to keep up with all your assets. You need a system that optimizes your eiciency. IMETRIK’s features such as geofence alerts save time by notifying unusual activity automatically, allowing preventative action before payment delinquency occurs. The IMETRIK GPS is easy to install, usually taking just 15-20 minutes per vehicle. Leading-edge GPS tech-

nology can improve your business. Your vehicles are worth thousands of dollars each. With highrisk customers more than half the loans will default – the majority in the irst year- causing major cash low problems. IMETRIK’s GPS technology can help boost ontime payments and cash low by 8%; reduce skips by 33%; cut delinquencies to 21%; decrease repossessions by 12% and increase collection agent productivity by 21%. For more tips on boosting your dealership’s bottom line with high-tech IMETRIK GPS solutions, get our FREE Special Report, “11 ways your GPS solution can improve your cash flow.” Call IMETRIK tollfree at 1-866-276-5382.

Coming Soon

From the publisher of Used Car News

CARPLIANCECENTER.COM 800-794-0760 ext. 101 for more info


14 • February 6, 2017

Special Advertising Section

USED CAR NEWS

Credit Acceptance is Easier, Faster, and More Profitable Since 1972, Credit Acceptance has ofered automobile dealers inancing programs to help them sell vehicles to consumers, regardless of their credit history. These programs are ofered through a nationwide network of automobile dealers who beneit from selling vehicles to consumers who otherwise could not obtain inancing. Credit Acceptance is unique in that enrolled dealers using the portfolio program share in the cash lows from the contract, which creates an alignment of interests and is a critical element of its success. One misconception of the Credit Acceptance program is that it only works for older model vehicles. In fact, it works well with nearly any vehicle; many low-mileage, late-model vehicles (as new as 2016) yield the greatest advances. And, its Credit Approval Processing System (CAPS®) enables dealers to

easily structure proitable deals with monthly payments customers can aford.

help dealers easily get applications and leads into the system without duplicate entry.

An added beneit of the program is that Credit Acceptance reports to the three national credit reporting agencies, giving consumers an opportunity to improve their credit with ontime payments and move on to traditional inancing sources.

Credit Acceptance has also made enhancements to approval stipulations to streamline the funding process such as being able to submit documents from a mobile device when using the CAPS Mobile Stips website.

It is now easier, faster and more proitable than ever to do business with Credit Acceptance. A signiicant beneit is eContracting, which enables customers to sign contract documents electronically. This eliminates the need to send contract packages via courier, saving dealers money and considerably reducing funding times. Many deals are funded the same day when using eContracting. Additionally, CAPS® interfaces with multiple vendors (including Dealertrack® and RouteOne®) to

The CAPS Mobile Stip website works directly with CAPS, giving dealers the ability to submit customer stipulations by simply using the camera on a mobile device. This new functionality can decrease submission times and improve image quality for quicker processing.

Visit CreditAcceptance.com to learn more about Credit Acceptance’s inancing programs and how you can sell more cars and make more money. Credit Acceptance, the 6th largest used car inance company in the U.S. (based on 2016 Experian data), ofers inancing programs through a nationwide network of dealers who beneit from sales of vehicles to consumers who otherwise could not obtain inancing; from repeat and referral sales; and from sales to customers who come into the dealership believing they have credit issues, but qualify for traditional inancing.


EA SI E R , FA S T E R, M OR E P R O F ITAB L E ! C R E D I T AC C E P TA N C E D E A L E R S I N C E 2 0 1 3

“Since we’ve enrolled with Credit Acceptance, we’ve seen substantial growth in our business - 25% per year. We’ve also been able to double the size of our dealership.”

DAN REEL Owner, Reel’s Auto Sales

© 2017, Credit Acceptance Corporation. All rights reserved.

The only finance company you can’t afford to live without. Learn more

1.800.873.0512 CreditAcceptance.com


Special Advertising Section

16 • February 6, 2017

Look Beyond Cost and Features GPS Tracking devices have become a standard addition to buy-here, pay-here, lease-toown, and daily rental cars. With the market being looded with GPS companies and different devices, it’s hard to choose which one to use! There are so many different sizes, mounting types, features, battery life, installation dificulty, reporting options, prices, etc. Choosing the right one can be overwhelming! It’s important to remember that when it comes to technology, inding the lowest cost item doesn’t always deliver the results you want! We recommend you start by determining what the end purpose is for using a GPS device. For Lease’T’Own® dealers, the main purpose for using the GPS is to aid in locating their property if the customer defaults on payments or drops insurance coverage. Others may use it solely for leveraging on-time payments with the starter interrupt feature. Once you determine your purpose, it’s easier to weed out devices that don’t offer the features you need.

Now that you’ve narrowed it down, the next step is to look beyond the basic features and investigate these two points through word of mouth recommendations from actual users: • Reliability of the GPS unit • The quality of tech support you’ll be receiving if something goes wrong. For example, Northland Auto Enterprises, founder of the original Lease’T’Own® program, is not only a distributor of PassTime GPS units, they use the PassTime GPS units on their own leet of Lease’T’Own® cars. Northland is a great source for word of mouth recommendations on various GPS units they’ve used over the years. Northland can be contacted at 800-879-3433 or through their website at www.NorthlandDealers.com.

USED CAR NEWS

Frazer DMS Remains Popular! They like it, they really like it! Independent car dealers throughout the country continue to refer their friends and neighbors to Frazer as their Dealer Management Software (DMS) of choice. Frazer brought aboard an impressive 4,500 dealers new to the software in 2016, surpassing an active users benchmark of 17,000! Frazer customers request more services as their business demands, and the Frazer Team is up to the task. Frazer has expanded their integrated services so they now ofer one-click access to over 200 other companies in

the independent dealer market. More inance companies, more marketing opportunities, and even SiriusXM have all joined Frazer this past year. “Frazer Dealer Management Software has a unique formula for our industry.” said Michael Frazer, President and founder of Frazer. “We combine a powerful product with outstanding personalized service at an exceptional price. This business philosophy has worked very well for us, and dealers around the country continue to respond amazingly well to it. It’s all very exciting around here.”

VAC Partners with Auction Access By Jonathan Neubauer President & CEO Vehicle Acceptance Corporation Vehicle Acceptance Corporation (VAC) is proud to partner with AuctionACCESS to bring an easier buying and looring process to the auction lanes. Subscribing auctions will be sent updated availability iles every hour from VAC and can use AuctionACCESS to submit looring requests in real time. VAC wants to make lives easier for auctions and dealers. When a

request arrives electronically at the local VAC branch oice, we contact the dealer to ask which loorplan product they prefer. The dealer can switch between any program without any fees or hassle up to 45 days after the sale. If you are looking for a family-owned loorplan company with 28 years experience and a commitment to help you succeed, contact VAC today. Learn more at VACorp.com/ SignUp or call 1-888-571-7092 for more information. Follow us on Facebook at FB.com/VACorp.

Whether you’re in the lanes, at the lot, or on the go, AFC’s mobile app makes it easy to

get the job done. With AFC On the Go, you can: Floor a car Make a payment View titles Run reports Set up text/email alerts And more! Download the free app today through the Apple App Store or Google Play. © 2016 Automotive Finance Corporation. All rights reserved.

(888) 335-6675 | AFCDealer.com®


USED CAR NEWS

Special Advertising Section

February 6, 2017 • 17

DRIVIN’ Helps You Buy at Market Low Every Time The process of dealers buying and selling used inventory is antiquated and inefficient. Dealers have accepted this as a way of life, much as they accepted radio and TV ads as the way things have always been done. Arthur Helmick, COO, Cox Auto Group, agrees. “This industry has been slow to understand data and analytics are the future of the industry. “Complacency exists more so at the dealership level. The data studies and programs I have implemented give me an upper hand.

“Using DRIVIN’s massive data set and wholesaler network, allows me to buy at market low every single time.” DRIVIN identifies which vehicles to dispose, and dealers who want to stock those vehicles, allowing selling dealers stock vehicles that optimize inventory. The Marketplace platform is the software version, combining selfservice with personal consultation. “We live in the information age and those who adapt to using all this information and understand it will rise to the top,” said Helmick.

Westlake ALPS: State of the Industry By Todd Larufa, AVP – ALPS 2 0 1 6 wa s a challenging year for the auto finance industry: losses and interest rates increased, securitization performance deteriorated, and depreciation accelerated in the wholesale market. This uncertainty resulted in some national lenders exiting the industry. What does this mean for 2017? With interest rates on the rise, auto dealers need a stable financial partner. Westlake Financial, a capital

provider to the auto industry, has helped dealers affected by these economic cycles since 1988.After the 2008 economic crisis, Westlake created the Advanced Lending and Portfolio Services (ALPS) division to address the liquidity issues dealers and finance companies face. ALPS, a leading provider of revolving lines of credit and bulk purchases in all 50 states, can assist you with your business financing needs. For more information, call 888-WFSALPS (888-937-2577) or visit www.westlakealps.com.

LEASE’T’OWN® Tax season is quickly approaching which means your customers will soon have more cash in their hands. Don’t let this profitable time of year pass you by without being able to offer your customers Lease’T’Own® to

C L O S E T H E D E AL !

EASY PROGRAM TO SELL EASY TO APPLY NO CREDIT CHECK MINIMAL UP-FRONT MONEY AFFORDABLE PAYMENTS

PLUS BENEFITS FOR YOU! YOUR CUSTOMERS WILL LOVE THIS PROGRAM AND MAKE THE DEAL EASY FOR YOU TO CLOSE!

MORE PROFITABLE THAN BHPH, RETAIL, OR WHOLESALE!

GET STARTED NOW SO YOU’RE READY WHEN TAX SEASON HITS!

www.HelpingDealers.com 800-879-3433


Special Advertising Section

18 • February 6, 2017

Technology Key To Customer Experience With AFC For Automotive Finance Corporation (“AFC”), the customer- centric mindset revolves around easy-to-use and accessible technology platforms. At the core of its business operations, AFC provides automotive floor planning to independent automotive dealers and helps customers expand their business by providing other key business related serves. To complement its central product offerings, AFC has invested time, talent, and resources to expand its technological capabilities to better support their customers. “Our online and mobile solutions are designed to give our customers easy access and control to manage their inventory and do business with AFC in a selfservice manner,” said Sean Cason, director of strategic initiatives at AFC. AFC customers have the ability to utilize technology throughout the entire floorplan financing process. In addition to submitting an application online, AFC customers enjoy a wide variety of account management functionality at www.AFCDealer.

com. Through their online customer account, payments can be made on any desktop or mobile device at anytime from anywhere. An easy to use calendar function allows customers to plan for payoffs and curtailments due in the future. Customers can improve their ability to manage their inventory by utilizing multiple reports to leverage account analytical data to make informed business decisions. AFC’s innovation practices derives from leadership at their corporate office in Carmel, IN. “In addition to providing technology options directly to our customers, AFC has made improvements to streamline administrative processes to limit paperwork, remove manual processes, and automate transactions.” said Cason. “These practices are designed to allow our employees to spend their time on what really matters; the customer.” AFC offers their customers solutions that make sense and the flexibility to do business the way they want; through local service available at more than 115 sites throughout the US and Canada or via the ease of a mobile device.

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USED CAR NEWS

Copart’s Intuitive Technology Makes Securing Inventory Quick and Easy Thanks to technology, you no longer have to get in the car and drive down to your local auto auction. Now you can bid on the vehicle you want from anywhere and have it delivered to you. Copart, an online auction company, is taking advantage of the latest technology to make bidding and buying as convenient and easy as possible. Here are six technology features, available on both the Copart website and mobile app, designed to make your online auction experience better: Watchlists Want a simple way to keep track of the vehicle you want? Copart gives you the ability to watch specific vehicles with the watchlist function. Adding a vehicle to your watchlist makes it easy to track its status and bid when you’re ready. Saved Searches Do you often search for the same kind of vehicles? With the option to save your search, you can come back to Copart and easily find similar results. Vehicle Alerts Can’t find the inventory you want? Although Copart has more than 100,000 vehicles available for bid each day, you may not see the exact vehicle you’re looking for. With Copart’s Vehicle Alerts, you can receive an email letting you know

that the car or truck you’re looking for is available. Pre-Bids in Auction Don’t have time to attend an auction? Copart provides a way to have your preliminary bid (prebid) represented during the online auction. Copart Bid4U allows you to place pre-bids and max bids before the sale. Bid4U will bid only one increment over the current bid, so it maintains the bidder’s position as the highest bidder. This allows the purchase of a vehicle below the user’s maximum bid if bidding does not meet or exceed it. Outbid Notifications If you are outbid during an auction in which you are using one of Copart’s automatic bidding functions, you will receive a notification allowing you to bid again if you choose. Monster Bidding If you’re short on time, you can bid in higher bid increments with the monster bidding feature inside the live auction dashboard. Simply increase the bid amount to your preferred bid, then hit the “Monster Bid” button and watch your bid take the lead. Copart’s intuitive and innovative technologies make it easy for you to get the inventory you need quickly and easily. Be sure to try them out next time you bid!

t of u o e l s has e h t s e tak Copart t io n . i s i u q y ac r o t n e inv lable i a v a s hicle e v 0 0 0 0, Over 10 ns. o i t a c o .S. l U 0 6 1 across

e d ay at i d u o t G d r e rt / Deale Get sta com . t r a p Co


DON’T WORRY ABOUT GETTING PAID. With GoldStar, the industry’s most reliable GPS solution, you can sell more cars with less risk this Tax Season.

WE HAVE YOU COVERED www.spireon.com/tax-season

©2017 Spireon, Inc. All Rights Reserved.


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