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August 7, 2017

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Industry Waits on Arbitration Ban’s Fate

IN JEOPARDY: Robert Cordray, director of the Consumer Financial Protection Bureau, testifies before the Senate banking committee. The committee brought a resolution to the full Senate that would eliminate the CFPB’s recent ban on mandatory arbitration agreements.

By Ted Craig

Rush - Dated Material

The Consumer Finance Protection Bureau inally released its rule banning mandatory arbitration, but it seems unlikely to ever take efect. The CFPB unveiled the rule, which bans mandatory arbitration agreements in contracts used by the entities it oversees, which includes auto creditors and buy-here, payhere dealers, on July 10. But just over two weeks later, the U.S. House of Representatives voted 231-190 to use the Congressional Review Act on the new rule. Senate Republicans already announced they intend to ile their

own CRA joint resolution of disapproval against the arbitration rule. The Congressional Review Act permits Congress to overturn an agency rule within 60 legislative days after an agency has submitted the rule to Congress. Once the rule is overturned, another rule cannot replace it. The CRA only requires a simple majority vote in both houses. “Members of Congress previously expressed concerns with the proposed version of the rulemaking – concerns that were not addressed in the inal rule,” said Idaho Sen. Mike Crapo in a press release announcing the Senate’s intention to ile.

Crapo is chairman of the Senate Banking Committee. If the rule does go through, it will open up irms covered by the CFPB to class-action lawsuits. Existing agreements specify that consumers must settle disputes via arbitration and are barred from joining classaction suits. “These clauses allow companies to avoid accountability by blocking group lawsuits and forcing people to go it alone or give up,” said CFPB Director Richard Cordray in a release announcing the rule. “Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed

together can take action together.” Industry insiders have been waiting for this rule since Congress passed the Dodd-Frank Act that created the CFPB. The act speciically called for a study into the impact of arbitration. The CFPB released the indings of that study in 2015 and a rule has been expected ever since. But many thought that might change after last year’s election. “It was pretty bold of him (Cordray) to go forward,” said Terry O’Loughlin, director of compliance for Reynolds & Reynolds.

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USED CAR NEWS

August 7, 2017 • 3

FBI Warns Dealers About Array of Cyberthreats By Jeffrey Bellant

Independent dealers continue to face big security threats and must stay vigilant in protecting their businesses. Agents from the Federal Bureau of Investigation updated dealers this summer on the threats they face. “It’s a constant battle of trying to stay ahead of the bad guys,” said Ed Parmalee, supervising special agent, FBI, Cyber Division. The top cyber security issues that face independent dealers include social engineering, ransomware and the compromising of business email. Social engineering is when someone tries to convince someone else to provide money or information by pretending to be someone else. The Nigerian email scam is one example. Parmalee said one common trick involves a sender posing as a vender and sending a fake invoice to the business, asking for payment. Another scam involves

sending an email to the business to deceive the recipient to provide private or business information because the sender email looks familiar. For example, the email may have an address that is very close to an email the recipient is familiar with such as, ABC@ABCD.com instead of ABC@ABC.com. Ransomware, which has been in the news periodically over the last several years, occurs when a hacker locks up a business computer’s information, forcing the business to pay a “ransom” in Bitcoin, an online currency, to unlock the computer. FBI oicials said the government does not encourage paying the ransom, but businesses feel they have no choice. Parmalee suggested dealers isolate the afected computer and to make sure they have a cloud service so they can retrieve any lost information. “Backups are critical,” Parmalee said, adding that this type of cyberthreat can

be “devastating” to a small business. “This literally could inancially ruin you,” he said. Jared Himmighoefer, also with the FBI, warns businesses not to ignore the threat. “Anyone can get hit,” he said. “It’s just a matter of when.” At lease one independent dealer who attended the session said they were hit and had to pay the ransom. Back-up products like Carbonite could help businesses protect their information. Alex Tovstanovsky, an Illinois dealer, experienced one attempt to obtain inancial information when a caller talked to a stafer, insisting they were from the electric company and claiming that if they didn’t pay a past due bill, the power would be shut down that day. Tovstanovsky thought it sounded suspicious and it turned out to be a scam. “It’s a constant battle of trying to stay ahead of the bad guys,” Parmalee said. Business also have to be

Photo by Jeffrey Bellant FATHER AND SON: Igor and Alex Tovstanovsky of Prestige Motor Works in Naperville, Ill., are honored during the NIADA convention this summer.

careful about ofering free Wi-Fi, which opens them up to potential attacks, Parmalee said. Resources are available for businesses. The FBI encourages business to report incidents of cyber crime to the Internet Crime Complaint Center

(IC3). There are also Information Sharing and Analysis Centers, including one for the automotive sector, called AUTO-ISAC. The site ofers cybersecurity best practices. “It’s a really valuable resource,” Parmalee said.


4 • August 7, 2017

USED CAR NEWS

NEWS BRIEFS Auto Leasing Declines

from web ads, allowing for easier visibility for online shoppers. InstaVIN car history reports now include an optional original factory window sticker with build data for an additional charge. The window sticker includes VIN-speciic standard and factory installed options and packages, original MSRP, EPA mileage and safety ratings, warranties, code guide information, and engine and transmission speciications.

Auto leasing dropped for the irst time in four years, according to a new study by Edmunds. Leasing made up 31.1 percent of retail new-vehicle sales in the irst half of 2017, down from a record high of 31.9 percent set in 2016. The number of vehicles that were leased in the irst half of the year fell 4.4 percent. That is twice the rate of decline for overall sales, which are down 2.2 percent year over year. Declining residual values are also forcing automakers to inlate incentives to keep lease deals attractive. Creditors Look at Alternative Data FactorTrust released indings from Lease incentives averaged $4,445 an industry-wide survey on the use for the irst six months of the year, up from $3,722 for the same period of alternative data in the non-prime auto inancing industry that shows it in 2016. being more commonly used for underwriting purposes. About half of respondents curInstaVIN Unveils New Website KAR Auction Services Inc. an- rently use alternative data in some nounced the launch of a new web- capacity while 19 percent of respondents are in the process of implesite for its instaVIN business unit. The redesigned website delivers menting or testing alternative data near real-time title, salvage and in- and 28 percent are exploring the use of alternative data, but have not surance total loss events. Dealer and commercial custom- taken the step of integrating it into ers can now order instaVIN reports business processes yet. Of the current users of alternain batches up to 100 VINs. There are new ilter options to deliver tive data, 82 percent use alternative condensed reports, and additional data in underwriting, for scorecard HTML functionality to embed links development speciically; the ex-

plorers plan to use it equally as an receivables was $31.1 billion at June overlay to alternative data scores on 30. existing scores and applicant veriiOperating lease originations were cation. $6.7 billion for the quarter, compared to $6.3 billion for the quarter ended March 31 and $6.5 billion for Manheim Adds Auction Locations the quarter ended June 30, 2016. Manheim announced the opening Leased vehicles, net were $39.7 billion at June 30. of six new auctions. The outstanding balance of comThe sales are located in Alabama, Georgia, Illinois, North mercial inance receivables was $9.7 Carolina, West Texas and Utah. billion at June 30 compared to $8.5 The new, smaller Manheim auction billion at March 31 and $6 billion at sites ofer multi-consignor auctions June 30, 2016. Retail inance receivables 31-60 as well as Simulcast, inspection and reconditioning services. Financing days delinquent were 3.4 percent of options through NextGear Capital the portfolio at June 30, compared and assurance packages through with 4.3 percent at June 30, 2016. Accounts more than 60 days delinDealShield are also available. quent were 1.5 percent of the portfolio compared with 1.9 percent at GM Financial Sees Fewer Delinquen- June 30, 2016. cies Annualized net charge-ofs were General Motors Financial Com- 1.7 percent of average retail inance pany Inc. announced income from receivables for the quarter. continuing operations of $270 million for the quarter ended June 30, compared to $143 million for the quarter ended June 30, 2016. Retail loan originations were $5.3 billion for the quarter, compared to $5.6 billion for the quarter ended March 31 and $3.2 billion for the quarter ended June 30, 2016. The PAGE 9 outstanding balance of retail inance 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 Radiance Cooper, Editorial Intern 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. 23 • No. 9 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.


USED CAR NEWS

August 7, 2017 • 5

KAR Promotes TradeRev KAR Auction Services Inc. announced a series of product oferings that integrate the company’s diverse capabilities with the TradeRev digital mobile marketplace. KAR owns a 50 percent stake in TradeRev, a mobile app and desktop solution that facilitates realtime, live-bidding dealer-to-dealer vehicle auctions. This irst wave of integrated product and service offerings includes free and/or heavily discounted transportation services, special loor plan inancing credits and oferings, and full integration of TradeRev’s mobile auction app with ADESA’s physical, digital and online auction marketplaces. As part of this initiative, KAR’s CarsArrive Network business unit now ofers TradeRev dealers free transport for any vehicle shipped from the state of New York, and lat $150 transportation fee for shipments from all other states. These prices represent 50 percent to 80 percent dealer savings over typical wholesale transport options and will last through 2017. KAR’s Automotive Finance Corp. (AFC) business unit is ofering, subject to various conditions, no loor plan fees on the irst ive vehicles purchased on the TradeRev platform and loored with AFC on the date of purchase. Concurrently,

TradeRev is ofering a $150 discounted buy fee for those ive units to be credited to the dealer’s AFC account. Additional inancing promotions and specials are planned for both new and existing TradeRev and AFC customers and will be released throughout the remainder of the year. TradeRev and KAR’s ADESA business unit have also partnered to launch the “360 Advantage Program” for dealers. Beginning at the dealership, a TradeRev inspection is completed in less than 10 minutes and the vehicle is launched on TradeRev to participating dealers nationwide. The ADESA Logistics Team will transport any unsold cars to an ADESA location within 24 hours where vehicles receive a full condition report and are listed on ADESA DealerBlock. Any unsold vehicles will then run at an ADESA physical auction. Dealers in the U.S. and Canada will also see an increased presence of TradeRev at ADESA’s physical auction locations. TradeRev sales and support staf will be there to enroll new dealers, answer dealer questions, and provide tips on how to launch and participate in TradeRev auctions.

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Penalties Add up for Dealer A Washington State auto dealer was ordered to pay the state $240,000 after the business’ president pleaded guilty to stealing retail sales tax intended for public services. Khaled E. Saad, president of American Auto & Body LLC, of Mount Vernon, entered a guilty plea on behalf of the corporation to irstdegree theft. Saad had been accused of collecting retail sales tax and not turning it over to the state. The court ordered the corporation to pay $240,000 – which includes For Cars, Trucks and Vans

unremitted sales taxes, and penalties and interest – to the Washington State Department of Revenue and $500 for a victim penalty assessment. Auditors for the Washington State Department of Revenue reviewed American Auto & Body’s records spanning March 1, 2013 through Dec. 31, 2015. During that time, records show Saad was vastly underreporting his corporation’s income and had not remitted to the state at least $145,512 in retail sales tax.

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6 • August 7, 2017

USED CAR NEWS

DEALER LIFE BUSINESS OWNERS SUGGEST SUMMER READING NEW YORK (AP) — A book about marketing or managing employees may be the last thing small business owners want to read on vacation. But some say they’ve found insight they can apply to their companies from the subjects of books they cracked just for the joy of reading — Abraham Lincoln, Harry Potter or a young woman in an alternative universe. Some of their recommendations: BOOK: “Team of Rivals: The Political Genius of Abraham Lincoln,” by Doris Kearns Goodwin. RECOMMENDED BY: Corey Nelson, owner of chemical distributor 4C Global Logistics LLC. WHAT THE BOOK IS ABOUT: “Team of Rivals,” published in 2005, details how U.S. President Abraham Lincoln put together a Cabinet that included politicians like Secretary of State William H. Seward and Treasury Secretary Salmon P. Chase, whom Lincoln had defeated for the Republican presidential nomination. Lincoln encouraged his team to put aside their animosity toward him and each other while the Civil War was being waged. WHY NELSON RECOMMENDS IT TO BUSINESS OWNERS: “Building and running a business is about relationships and bringing great minds together from all diferent backgrounds to be successful. Lincoln listened to people, he understood their motives, and genuinely cared. He had passion in everything he did and always refused to quit regardless of others’ actions.” HOW IT HAS HELPED HIM IN BUSINESS: “When times get tough, which they always do as a business owner, that book helps to keep me going and realize if I stick to the course and treat all people well, good things will come in the end.”

RECOMMENDED BY: Vernon Tirey, CEO of LeaseQ, an equipment leasing and inancing company. WHAT THE BOOK IS ABOUT: “The Martian,” published in 2011, is about Mark Watney, an astronaut stranded on Mars, and the mental and physical processes he goes through to survive and get back to his fellow space travelers. WHY TIREY RECOMMENDS IT TO BUSINESS OWNERS: “It makes you think about who you’ve got in your corner, who you can depend on when things get tight — if there are changes in your industry, who’s going to sit down, not get panicky and get things done.” HOW IT HAS HELPED HIM IN BUSINESS: “Our company was stuck in a small business no man’s land where we had to hang on long enough to show investors that we have a powerful business model with signiicant potential. In “The Martian,” Watney took help wherever he could ind it and had his crew, NASA, and even the Chinese space program lend a hand. So I thought, ‘what the heck’ and followed suit by inviting employees, angel investors, and partners to lend a hand.”

BOOK: “Man’s Search for Meaning,” by Viktor E. Frankl. RECOMMENDED BY: Christine King, owner of YourBestFit. a irm that provides health, wellness and itness services. WHAT THE BOOK IS ABOUT: Published in 1946, “Man’s Search for Meaning” is about Frankl’s experiences in the Auschwitz death camp during World War II and his belief that life has meaning even in the worst circumstances. WHY KING RECOMMENDS IT TO BUSINESS OWNERS: “Frankl’s message is incredible for overcoming any obstacle, whether personal or in business.” HOW IT HAS HELPED BOOK: “The Martian,” by HER IN BUSINESS: “One Andy Weir.

low I had was losing a big account. That could have been a litigious situation,” King says. “Frankl says, ‘OK, envision the future and what you want it to be.’ I could go to court and the lawyers would make money, or I could just go ahead and (run my business) and make more money.” BOOKS: The Harry Potter series by J.K. Rowling. RECOMMENDED BY: Paul Finch and Rayan Jawad, owners of Growth Studio, a irm that analyzes companies’ data to help them develop new marketing, sales and other strategies. WHAT THE BOOKS ARE ABOUT: The books, the irst of which was published in 1997, follow the adventures of the young wizard in training Harry Potter and his friends Hermione and Ron as they battle evil and make their way through childhood and adolescence. WHY FINCH AND JAWAD RECOMMEND IT TO BUSINESS OWNERS: “The three friends get taken through some pretty nasty things, but they overcome the obstacles because they’re together — when you’ve got a partnership or other people working with you, there’s a lot more strength, a lot more success,” Finch says. HOW IT HAS HELPED THEM IN BUSINESS: “When Harry irst meets Sirius Black, his godfather

who is in the form of a dog, he’s scared of him, but Harry realizes he’s innocent,” Jawad says. “He reminded us of a client who used to be horriic, used to challenge us and we used to think of him as one of the nastiest clients — but it dawned on us, he always had our best interest at heart.” BOOK: “Masters of the Air: America’s Bomber Boys Who Fought the Air War Against Nazi Germany,” by Donald L. Miller. RECOMMENDED BY: Bryan Mattimore, co-owner of The Growth Engine, a consulting business helping companies become more innovative and creative. WHAT THE BOOK IS ABOUT: “Masters of the Air,” published in 2006, is a history of the U.S. Eighth Air Force that bombed Nazi Germany during World War II. WHY MATTIMORE RECOMMENDS IT TO BUSINESS OWNERS: “For the small businessperson dealing with the sometimesdepressing uncertainties and challenges of building a successful business, this book certainly has a way of putting things in perspective.” HOW IT HAS HELPED HIM IN BUSINESS: “We had done a bunch of proposals, always competing against other companies large and small, and came in second in all of them,” Mat-

NEXT ISSUE: NAAA Auction of the Year

timore says. “Listening to that book (on audiobooks), I realized, these are such small challenges relative to what these guys were going through.” BOOK: “The Autobiography of Benjamin Franklin.” RECOMMENDED BY: Tobias Glienke, co-owner of Munk Pack, a manufacture of organic fruit snacks and cookies. WHAT THE BOOK IS ABOUT: The Founding Father, author, publisher, inventor, diplomat, postmaster and scientist began writing the story of his life in 1771, but it wasn’t published until after his death in 1790. WHY GLIENKE RECOMMENDS IT TO BUSINESS OWNERS: “Franklin was self-taught. You have to self-teach to work with a small business — there are not enough resources to cover each role, so each employee must wear many hats and learn new skills.” HOW IT HAS HELPED HIM IN BUSINESS: “He was very big on self-improvement and would grade himself every day,” Glienke says. “I can apply that to myself and to our products, making sure that we are really creating products that our customers appreciate.”


USED CAR NEWS

August 7, 2017 • 7

RETAIL MARKETS MISSOURI Heather Hicklin, oice manager, Kwik Auto Finance, Raytown, Mo.: “The business has been around since 1990. I have been here since September 2014. “We just have one location. Around this time of year, we run about 70 to 75 on the lot. We sell anywhere from 35 to 45 a month. “We buy the majority of our vehicles at the auto auctions. We also sell at auctions. “It’s all buy-here, pay-here at this dealership. “Down payments start at $500 and we go all the way up to $1,300. “We do more shortterm inancing here. Our loans are more of an 18- to 23-month (term) versus a lot of buy-here, pay-here dealerships that are doing 36 to 48 months. “I worked before in a buyhere, pay-here dealership that did long-term inancing, and I saw a lot of repossessions. Here, the repos-

sessions aren’t nearly (as high). “We use starter-interrupt/ GPS. We use Position Plus through Spireon. It’s a lot better because our loss rate – as far as cars we can’t ind – has changed dramatically. We went from losing about 15 to 20 cars a year to now where we haven’t lost any. “We only use the starterinterrupt on a case-by-case situation. You have to know your customer really well to know if using that starterinterrupt is going to help you in the collection of your payment or if that customer is going to turn on you and rip the device out. Then you’re looking for a car. “We have a smaller portfolio than most buy-here, pay-here dealers. We carry about 450 contracts right now. “The majority of our customers are repeat business. We have about an 85 percent return rate. “We carry a little bit of an older vehicle on average, but you can do that when you

are dealing with a shorterterm loan. So the majority of our inventory is 10-year-old vehicles with higher mileage. So they have 100,000 to 140,000 miles on them. “When you’re running a shorter loan term, you have the ability to do that. Some of these vehicles wouldn’t make it if you were running a 48-month term. “Trucks are very hard to come by at the price we need to purchase them. We are probably 60 percent cars, probably 20 percent SUVs and 20 percent minivans. “I would say our inventory is 50/50 domestics to imports. “Average reconditioning costs are $500 to $1,000. When you can do a lot of things in-house, you’re in a little bit of a better position. We have two mechanics on staf that do a majority of the reconditioning. We don’t really do any outside work. “We don’t use much marketing/advertising as I’ve

Compiled by Jeffrey Bellant & Radiance Cooper seen other dealers in the area do. We are starting to venture into Facebook advertising. We do advertise on Craigslist. “But we have a lot of referrals. We probably have a good 10 percent that are referrals. “We just sold a 2009 Dodge Caliber. It had 127,000 miles. The price was $7,695.

PENNSYLVANIA Peter Dosunmu, owner, P.G. Auto Center, Lansdale, Pa.: “I am the manager and owner. “We started in 1989. We just have one location. “I’d count between 30 to 35 vehicles in our inventory. It’s typical of this time of year. “We (sell) between 12 and 15 per month. “We get our vehicles mostly from Manheim. “We also (sell at auctions). We don’t do buy-here, payhere or subprime.

“(The mileage) ranges between 30,000 and 150,000. The model years go from 1990 to 2012. “The percentage of cars is higher than the trucks. Most of our inventory is cars. We only have two trucks. We try to have a few SUVs too but it’s mostly cars. “It is mostly foreign. “Almost all of our cars are reconditioned. The recondition cost is $100 to $150, on average. “I used to do them in house, but not anymore. Now I just send them out. We have a service shop with a garage for our vehicles. “We have our own website. We also use Autotrader, CarGurus, Carsforsale, etc. “I would think service is a big part of the bottom line. I would say it’s about 10 percent. “I just sold a 2003 Hyundai. That one had 119,000 miles on it. We sold it for $4,000.


8 • August 7, 2017

USED CAR NEWS

W H O LESALE MARKETS INDIANA Chris Walsh, general manager, Fort Wayne Auto & Truck Auction, Inc. Fort Wayne, Ind.: “We have six lanes. We run all of our lanes. We’re running between 700 and 750 cars. “We’ve had about a 7-percent increase in consignment and our average sales percentage is 47 to 49 percent. “Our average (number of dealers) is between 325 and 425. It can vary by 100 dealers depending on what we’re ofering each week. Dealer attendance is running the same (as last year). “(We’re drawing dealers from) approximately a 150mile radius. We’re right on the northeastern edge of Indiana, so it’s a strategically great location. “For a lot of our dealers, the spring market didn’t last very long. It lasted about two weeks and it seemed to be over, so some of them had to adjust to the slowdown on the retail side. We

pick up new consigners all the time, but the consigners from last year are running fewer cars. “We are 70 percent dealer and 30 percent commercial. We’ve always (had) more dealer consignment than commercial. We have several commercial accounts but some of their leets are smaller than they were a year or two ago. “We sell for Wheels, Wells Fargo, Key Bank and Element. We have a lot of banks and credit unions and a group of leasing companies, so we’re happy. “We also run a heavy-duty truck sale twice a month – every other Wednesday – and we’re running between 250 and 350 per sale. We’re talking Class A semis, Peterbilt, etc., and we also do heavy-duty trucks for our leasing companies. “We are an OVE auction, meaning that our dealers post to OVE, we facilitate on OVE and then we use (Edge) Pipeline as well as Equipmentfacts – probably

the largest heavy-duty truck seller online that there is. “Online on the car side, we sell maybe 6 percent, but we sell 30 percent in the heavy duty truck sale online. “For the car sale, our average price (across the block) is running right at $6,200. We might have been at $6,800 last year. In the truck sale, the average selling price is right at $16,500. “We’ve noticed that recently the money’s been really good on late models. “We’re entertaining a couple of new commercial accounts. That’s always good for business, because we have the recon center and the mechanic shop.”

OKLAHOMA Mike Clopton, general manager, Oklahoma Auto Exchange, Oklahoma City: “We have four lanes and we’re running four. We run them all. “The last few sales we’ve been running between 650 and 700. We ran 800 on July 26.

“The car business in Oklahoma has been really tough the last year or so. An auction like ours will always be a relection of what’s going on locally. “We have some national accounts but when we started, our game plan was to win at home – Oklahoma City irst – and then the surrounding areas. We’ve done that. “Now it’s really time for us to start pursuing some national accounts. I didn’t want them until I knew we could handle them and do a good job. We had to become really good at what we do and I feel we have. I mean, 700 to 800 cars is a good sale. “We’re usually about a 62or 63-percent sale. We’re down a little bit in volume, maybe 5-percent from last year. “I would say we normally have 300 bidder badges in the lanes. We mainly draw from Oklahoma, Arkansas, Kansas, Missouri and Texas. We also have a really strong

Compiled by Jeffrey Bellant Mexican market. “We use AWG for online sales. “Our volumes now are 75 percent dealer consignment and 25 percent leet and repos. Tinker Credit Union, one of the largest credit unions in the country, is one of our consignors. We also have LeasePlan USA, United Auto Credit and we just started with Lobel. “We’re really strong in the $10,000-and-under for repo, but that’s what sells in this economy in Oklahoma. We have a lot of buyhere, pay-here and special inance – much more per capita than other areas. “Our average sale price is like $4,950. “Right now, anything between 80,000 and 120,000 miles is bringing way over book. Those are the cars that are selling well. “On the retail side, newcar sales have been diicult, but used-car sales have been doing OK.”


USED CAR NEWS

August 7, 2017 • 9

DISCONNECTED JOTTINGS FROM I just got back from the beach. It’s obvious that a trip to the beach has universal appeal. Anyone can reach back to childhood and get all

TONY MOORBY

As one ages, even now, the beach recalls heady days of freedom from all kinds of everyday tedium – school, the city, everyday clothes, all

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

those mental attachments that apply to just a day or a couple of weeks’ vacation at the beach. Whether it’s miles of uninhabited shoreline with all the room to explore the coastal wonders or being squashed together like sardines, cheek by jowl, on an overheated gritty sand retreat, contained within the size of a towel and everyone has to roll over in synchronicity – we take to it like seals in heat.

replaced by no timetables, broad skies, fresh air and bathing suits. And in those days we didn’t even check in with parents because they knew we were “on the beach.” My irst holiday was spent in a rented caravan (or travel trailer) in an austere southcoast town in England called Seaford. I had chickenpox at the time and felt like poop. I recovered in time to explore the clifs overlooking a mea-

ger strip of sharp sand more readily of use to a concrete maker. I fell down the clif face with a chunk of chalk stuck fast in my upper thigh like a prehistoric weapon. I bear the scar, even now. We graduated to a rented cottage in Greatstone-onSea and made the annual migration from London for many years to follow. My brother still goes there to this day. Situated on the English Channel near Dover, the dunes and sand stretched from one horizon to the other and the tide went out for almost a mile. Shrimp nets and clam digging often provided fare for dinner. Instead of sun tan lotion, my mother made a concoction of olive oil and vinegar, which she slathered all over us. We fried in the sun and would have made a colorful contribution to a salad. I’m still horriied at the notion of sticky, sandy skin, sore from exposure and as red as a large-animal vet’s forearm. Seaside towns fascinate me

C R O S S WO R D 35. Search engine ranking technology, abbr. 36. ____ Grande Punto 37. Manheim events 41. Reduce the price 42. Link together 43. Model S makers 44. Time of life 45. Ferrari’s base of operations Down 1. Element maker 2. Corrodes 3. Financial adviser 4. Turn down 5. Place for charging phones, now included in most cars 6. Computerized mail area 7. he Lion 8. No longer working, for short 10. Exist

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. Lamborghini model 5. German car pioneer 9. Classiied ad abbreviation 11. Altima or Maxima 13. Ford engine 15. Audi ___ coupe 17. Factory process 19. Audi R8 and BMW 18 for example 22. Taxi 23. “Fortwo” car 25. Nickname for a Cadillac 26. Miata, for one 28. Kia sedan 29. Radio operator (for short) 31. Iconic truck 32. Small amount 33. Silly talk 34. Car category

easily park next to a Nissan Sentra as a Bentley Continental and gorging on a corn dog is as common as splashing out on a banquet for dinner. Though some resorts rejoice in their own condescension – glamorous South Beach in Miami, once as cool as its Art Deco surroundings is now the gathering spot for show ofs and spivs who happily part with the price of a condo for a cocktail and the valet parkers will ignore you if you don’t pull up in a Bugatti. No boogie-board shops here. Art galleries rub shoulders with jewelry stores and fashion boutiques, where a tee shirt will set you back a king’s ransom. But that’s the beauty of the beach – where mind and body can get away from it all and memories last a lifetime.

and I ind them enormously attractive - whether it’s Boca Raton with its snobby nose in the air or Ocean City’s boardwalk with tee-shirt shops selling overpriced, shoddy stuf that will probably end up in the lint trap upon its irst acquaintance with a washing machine and dryer. Resorts in Great Britain are as gaudy as here, as many neon-colored storefronts beckon for your business, for clothing or food, arcade games or ice cream and candy. One big diference is that men in Europe still wear Speedos! Especially men who have no such right to do so. The girls picturesquely refer to them as “budgie smugglers.” I should point out that a budgie is a small, Australian parrot-like bird! Social diferences go out with the tide – you could as

1

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Solution to this puzzle in the 8/21/17 issue. Call 1.800.794.0760 for a FREE subscription.

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10 • August 7, 2017

USED CAR NEWS

AROUND THE BLOCK EAST COAST SALE CELEBRATES 70 YEARS

THE BOSTONIANS: ADESA Boston General Manager Jack Neshe (left) and Tom Caruso, executive vice president of KAR Auction Services, celebrate the auction’s 70th anniversary.

ADESA Boston celebrated 70 years in business with two special events in June – an anniversary sale and a car show/motorcycle run fundraiser. The 17th annual classic car show and motorcycle run raised $17,300 through a live auction, show entry fees and sponsorships. All

proceeds benefit JDRF, a leading advocacy group for people with type 1 diabetes. Since 2001, this annual event has raised more than $600,000 for numerous children’s charities. “I sincerely thank our dealers, customers, employees and families for their outstanding support

of our fundraising efforts year after year,” said Jack Neshe, general manager of ADESA Boston. “Charitable giving is important to us, and we are deeply committed to doing our part to help our neighbors and strengthen our community.” More than 50 classic cars and motorcycles were entered in the show. A 30-mile, police-escorted motorcycle run took 40 riders through several towns and the event included live music, raffles and food. Also in June, the auction hosted a separate 70th celebration event, which included a display of cars and trucks to represent the seven decades the auction has been in business. The vehicles ranged from a 1941 Chevrolet pickup truck, a 1951 Ford V8 Deluxe Massachusetts state trooper car to a 2016 Tesla Model X P90D.

Compiled by Jeffrey Bellant

Auctions Host ‘Cargaritaville’ During the week of July 10-14, Manheim locations in the Southeast region delivered “inventory paradise” at the annual Cargaritaville sales event in partnership with NextGear Capital. This fourth annual event mixed business with pleasure while ofering lots of inventory for the 21 Manheim locations across the Southeast including Georgia, Florida, North Carolina and Tennessee. NextGear Capital partnered with all participating locations to ofer special promotional terms – and even sponsored a Margaritaville Machine giveaway. Each location added their unique lair to the festivities. Cargaritaville began in 2013 at 11 Manheim locations in Florida and the event expanded to Alabama, Georgia, North Carolina, South Carolina and Tennessee locations.

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

MANHEIM OMAHA PRESENTS

SPECIAL INTEREST SALE HOT RODS • CLASSICS CORVETTES EXOTICS • SPECIALTY MOTORCYCLES

200+ Units Join us for this Second Annual Sale! Consign NOW for Preferred Placement! First come, First served!

SEPTEMBER 28, 2017 FOLLOWING OUR WEEKLY SALE LANES 49 & 59

If you are interested in consigning or attending, please contact dealer services at 800-218-4192


Special Advertising Section

USED CAR NEWS

August 7, 2017 • 11

CAR Financial is Here to Support Your Business! Dealers today have a signiicant list of required skills they need to be successful. These include underwriting, control of accounts, collections, recovery, and mitigation of risk from purchasing to liquidation of assets. And of course, not to be overlooked is the ability to inance their business through all cycles and opportunities that come in the modern economy. Making consistently good returns in the buy-here, payhere segment has always been tough, but in today’s world of competition, increased regulation and luctuating wholesale values, diligence and the persistent adherence to a proven plan should be at the top of the list for all dealers! In order to overcome the market concerns posed by today’s buyhere, pay-here industry, dealers must have a relationship with a inance company that will help them follow a more secure path. Dealers should ind a company that helps mitigate risk while achieving the dealer’s short and long-term inance goals. The ideal company will have the ability to support your business in multiple areas, not just one. That inance company should

have proven experience and longevity in a variety of market climates, strict compliance policies and a desire for shared success. CAR Financial is that company. CAR Financial has a proven track record of over 25 years in the auto inance industry and can help you in all economic times by customizing a purchase or service program that meets your needs while providing quality service through a single local dealer point of contact. CAR Financial strives to understand your day-to-day business so that they can structure a program designed to meet your goals. Whether purchasing retail or lease contracts in bulk, purchasing payment streams, servicing, or supplying a loor plan for inventory needs, the trusted professionals at CAR Financial are here for you. CAR Financial operates in 45 states and is continually evolving its programs to meet the ever changing needs of the buy-here, pay-here market. Interested in more information on CAR Financial Services’ programs and services? Go to www.carinancial.com or call 877-570-8857.

RESERVE SPACE NOW for the Buy-Here, Pay-Here Advertorial in the October 2 issue of

Used Car News! Space Reservation is September 14 Artwork Deadline is September 22

CALL (800) 794-0760 EXT. 106 to learn more or email Shannon Colby at Shannon@UsedCarNews.com

WWW.USEDCARNEWS.COM

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Special Advertising Section

12 • August 7, 2017

Copart Updates Mobile App for Enhanced Online Bidding Experience Copart recently announced the highly anticipated launch of the newest version of the Copart Mobile App, available for Apple iOS and Android devices. New features of the Copart Mobile App include license upload capability, language settings, a smart search tool and more. The Copart Mobile App gives buyers the ability to attend Copart’s live auctions from anywhere. With this new update, Copart buyers will enjoy a faster, easier user experience. Copart buyers now have access to the following features: · Upload licenses using the Copart License Uploader · Scan bar codes using the new Lot Scan feature to get vehicle details at Copart locations · Choose a preferred language with new multi-language options available in the app settings · Access updated search filters with the Copart Smart Search tool · View vehicle videos and extended notes now available in the app In 2013, Copart launched its first iPhone app and the industry’s first iPad-optimized app, providing

Copart buyers with a convenient tool to view vehicles, join live online auctions and place bids. In 2015, the company launched the Android version, expanding its reach to an even broader digital audience. Since then, the app continues to be a product of innovation and refinement. In addition to updating its mobile app, this year Copart launched an updated, mobileresponsive version of its website, Copart.com. The enhanced website is 10 times faster than the previous version. “Through buyer surveys, website feedback forms and app store reviews, we can pinpoint our buyers’ needs and update our app and website to stay ahead of the game,” said Michelle Hoffman, Copart’s Vice President of Marketing. Download the Copart Mobile App for free today. Learn more at Copart.com/DealerApp.

Show Me the Money! Our Income Stream and Payment Sharing Programs are the ideal way for you to raise capital and maintain control of your accounts. You continue the collecting…. You keep the customer… You make more money! Up to 90 cents on the dollar No aging required

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Introducing a faster

Copart Mobile App Upload licenses directly to your account Scan bar codes to get lot details Access updated search filters View lot videos and extended notes

GIVE IT A

TEST DRIVE Copart.com/DealerApp

USED CAR NEWS

800-467-5172 www.sdainc.net


USED CAR NEWS

Special Advertising Section

August 7, 2017 • 13

Dealer Feedback Leads AFC to Milestone Web Enhancement Automotive Finance Corporation (AFC) prides itself on being a comprehensive solutions provider and trusted advisor to the independent automobile dealer. That means AFC not only ofers outstanding loorplanning products and superior local customer service; but also provides tools that feed dealers’ need for business growth. One of AFC’s greatest dealer tools is its AFCDealer™ website and AFC On the Go mobile app. These tools give dealers instant access to information about the vehicles they loor and streamlines business processes like title delivery, payments, and inancial reporting. AFC continually asks for dealer and employee feedback about the website and mobile app, which is used to improve the efectiveness of these tools. This feedback has led to the most signiicant web enhancement dealers have seen from AFC this year. New enhancements move AFC’s online dealer experience one giant leap forward through the creation of an inventory dashboard, which provides additional access to solutions and tools to build business. The enhanced inventory dashboard ofers dealers greater transparency, insight, and information.

Through the new account balance chart, dealers can view their investment in AFC, including credit limit, principal, interest, and fees. Dealers can dive even further down to see investment in each vehicle loored with AFC. Additionally, with the innovative turn timetable, dealers can view their 18-month vehicle purchase history to grasp which types of units move the quickest. Twenty-seven new ilter options are available in the reports function, allowing dealers to sort and customize data most relevant to their needs. AFC has made many other signiicant updates to the AFCDealer™ website throughout the past few years, which streamline important business processes like title delivery, payments, and inancial reporting. AFC is devoted to assisting dealers with these technical advances by providing a detailed walk-through upon logging in to the AFCDealer™ website after each release. AFC will continue to gather important dealer feedback, which will impact future updates and enhancements to add greater value to the online experience. For information about how AFC can feed business growth, visit www.AFCdealer.com.

Maximize your local purchasing power. AFC offers independent dealer floorplans where you need us, when you need us. 120+ locations across North America Easy access to titles at local AFC offices Local, direct line of communication Industry experts who understand your local market

AFCDealer.com® | (888) 335-6675

© 2017 Automotive Finance Corporation. All rights reserved.


14 • August 7, 2017

USED CAR NEWS

How Successful Buy-Here, Pay-Here Dealers Build Their Business

You Can Have More Control

If you were to ask 1,000 buyhere, pay-here dealers what one suggestion they would give to other dealers wanting to build their business...most would say “have access to capital.” Yes, it does take money to make money – especially in the buyhere, pay-here industry. The average ACV has gone up $1,200 the past 2 years, while down payments decreased $117. The second suggestion is to “keep your customer.” In the competitive buy-here, pay-here market dealers need to

Have you ever had a customer wreck the car and then disappear? The insurance company denies the claim because they can’t get cooperation from the customer. Have you ever had a customer stop paying for their insurance but keep driving the car? When you locate the car, you ind it’s been badly damaged and the insurance company denies the claim. Even worse, have you ever had a customer ile a claim, receive money from the insurance company but doesn’t ix the car? We’ve all had similar frustrating experiences with customers and insurance claims. What if you could have more control over the physical damage insurance? Northland Auto Enterprises recently introduced their new and physical damage protection program es called Coverage Plus. Coverage Plus gives you the control car, you’ve been searching for! Coverage Plus is a policy issued eance toyou ey the dealership for physical damage x the coverage. You can add your leased ences or f you buy-here, pay-here vehicles to your

do everything they can to keep their customers happy. SDA has been providing capital to buy-here, pay-here dealers nationwide since 1990. While SDA has many lexible programs – the central theme is that the dealers collect their own accounts and maintain that very important customer relationship. If you are interested in dealing with one of the oldest, most established providers of capital in the buy-here, pay-here industry, contact SDA at 800-467-5172 or www.sdainc.net.

Mobile Information for CEO’s On the Go By Jonathan Neubauer President & CEO Vehicle Acceptance Corporation Our world is becoming ever more mobile. It’s up to business owners to stay current with technologies and devices. Up-to-date data is imperative to dealers. VAC has implemented text messaging to put that information in your hands. Local representatives can be reached to answer all your questions. The short code also supports MMS messaging – send photos of cars from your phone.

This is just one more way VAC keeps loorplans simpliied. New features will soon available such as system generated response to keyword queries. Send the account number and keyword to the VAC short code and get a response in seconds. A family-owned loorplan company for 28 years, Vehicle Acceptance is dedicated to providing the best service in the industry. Learn more at VACorp.com/ SignUp or call 1-888-571-7092 for more information. Follow us on Facebook at FB.com/VACorp.

policy and know for sure that they’re covered for physical damage. Your customer reimburses you for the cost of the coverage at the same time they make their vehicle payment. You are in control and the customer has the beneit of fulilling the requirements of the lease or purchase agreement. Customers also beneit from lower premiums in many cases. The premiums are based on the value of the car rather than on the customer’s credit or driving record, so all customers qualify. This is deinitely a program that all dealers will beneit from and should check out! Contact Northland at 800-8793433 for more information on the Coverage Plus program, or visit www.HelpingDealers.com.

age insurance? Northland Auto Enterprises recently Coverage Plus

WHAT’S THE BETTER CHOICE? ATTN: BHPH, LHPH, & Lease’T’Own® Dealers!

LOSE Your customer wrecks the car and disappears. The insurance company denies the claim because they can’t get cooperation from the customer. YOU LOSE! The customer stops paying the insurance company but keeps driving the car. When you locate the car, you find it’s been badly damaged. You can’t get the customer to cooperate because you took the car. The insurance company denies the claim.

YOU LOSE! The customer files a claim and the insurance company pays the customer directly. The car doesn’t get fixed and the customer took the money. YOU LOSE!

WIN ADD COVERAGE PLUS TO EVERY DEAL! A COMP & COLLISION PROTECTION POLICY FOR YOUR CUSTOMER!

YOU are in control of the coverage - NOT your customer. Your customer reimburses YOU for the cost of the coverage at the same time they make their vehicle payment. All insurance claims are paid to YOU - It’s YOUR policy!

800-879-3433 www.HelpingDealers.com


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BID WHILE YOU

Live bidding with ADESA LiveBlock Never miss another sale. • • • •

Participate in up to 11 lanes Bid in 4 lanes at once Set bids in advance with AutoBid Search and sort vehicles in bidding window

© 2017 ADESA, INC.

LIVEBLOCK MOBILE APP AVAILABLE NOW! Download the app: SEARCH: ADESA in the app store VISIT: ADESA.com/mobileapps TEXT: ADESA to 89800

8/7/17  
8/7/17