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September 4, 2017

www.usedcarnews.com

Finance Stable as Wholesale Prices Drop

Photo courtesy of Manheim Riverside FULL LANES: Dealers bid on cars at Manheim Riverside. The supply of off-lease vehicles continues to grow in the lanes at the nation’s auto auctions, causing wholesale prices to soften.

By Ted Craig

Rush - Dated Material

The auto inance market looks like it will continue its strong performance despite several challenges. A recent report from Kroll Bond Rating Agency states that despite rising losses in auto inance issuances, risks remain well contained and investors are well protected. The Kroll report inds much of the deterioration in auto loan assetbacked securities can be attributed to a loosening of credit standards. However, the agency does add that there has been incremental deterioration on an issuer-by-issuer basis due to softening used-car prices.

Westlake Financial Services recently showed just how strong the market for auto ABS remains. The irm issued an $800 million asset-backed securitization backed by approximately $860 million of automotive contracts, the largest ABS transaction in the company’s history. It is the latest of Westlake’s 14 securitizations, which have been comprised of approximately $5.86 billion in cumulative inancing. This ABS tops the March issuance of $700 million, the previous record holder. “Our credit performance remains strong in spite of competitive and

economic pressures, which attracts investors to our portfolio and enables us to continually increase our securitization amount,” said Westlake CEO Paul Kerwin. Westlake’s latest securitization has an expected annualized cost of 2.65 percent, including the initial purchaser’s fees, which is in line with prior ABS deals, despite higher benchmark interest rates. Kroll does warn that used car prices remain vulnerable to several factors. These factors include higher incentives and an increasing supply of of-lease vehicles. J.D. Power Valuation Services saw these two factors increase in July.

The company reports that incentive spending increased for the 28th month in a row in July with its new Used Vehicle Price Index slipping by 0.7 percent to 110.4. “The market is behaving exactly the way we forecasted,” said David Paris, executive analyst at J.D. Power Valuation Services. “For the year, we believe used prices will decline by 6.5 percent, which is 2.5 points worse than 2016’s 4 percent loss.” KAR Auction Services chief economist Tom Kontos points out that the market is softening as expected once prices are held constant for sale type, model-year age, mileage, and model class segment

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USED CAR NEWS

September 4, 2017 • 3

Suit Says Recalled Air Bags Used in Repairs DETROIT (AP) – A dangerous Takata air bag should have been recalled before going from a wrecked car to a salvage yard, eventually ending up in a 2002 Honda Accord and nearly killing a Las Vegas woman, a lawsuit alleges. The Accord had been ixed up and sold in March 2016 to the family of Karina Dorado, a 19-year-old woman whose trachea was punctured by shrapnel spewed by the faulty air bag. The family claims it was never informed that the air bag was subject to a recall. How that air bag got into the Accord is detailed in the lawsuit iled in Nevada. It highlights the sometimessuspect world of auto parts recycling and shows how dangerous recalled parts can ind their way into used cars that are sold to unsuspecting buyers. It’s unclear just how many faulty Takata inlators are being used in refurbished vehicles, but Honda, once Takata’s biggest customer, says it has bought 75,000 of them from salvage yards in

the past two years to keep them of the road. “It’s an unknown, which is kind of terrifying from a consumer perspective,” says Michael Brooks, chief counsel for the Center for Auto Safety, a nonproit safety advocacy group founded by Ralph Nader. “There’s no good way to track these things.” Takata uses ammonium nitrate to create a small explosion that inlates air bags in a crash. But the volatile chemical can deteriorate over time when exposed to heat and humidity and burn too fast, blowing apart a metal inlator canister. The inlators are responsible for up to 19 deaths worldwide and more than 180 injuries. They have sparked the largest auto recall in U.S. history involving nearly 70 million inlators. Selling a recalled auto part is illegal under a 2000 federal law that is seldom enforced. But the National Highway Traic Safety Administration, the federal government’s road safety agency,

conirmed to The Associated Press that it’s investigating the Dorado case. “The agency has the authority to enforce civil penalties on businesses that do not comply,” a spokeswoman said in a statement. The lawsuit iled by Dorado alleges that in June 2015, the salvage yard, Nevada Pic-a-Part of Henderson, Nev., bought a 2001 Accord to sell of the parts. A few months before that, Ha-

vanna Corp. and D&A Bodyworks LLC, two related Las Vegas companies, purchased a 2002 Accord that was involved in a crash in Arizona and deemed a total loss by insurance company Liberty Mutual Group. The two companies, which specialize in repairing damaged vehicles, bought the car at a salvage vehicle auction in Phoenix, the lawsuit said. From June to September of 2015, Pic-a-Part sold the

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driver’s air bag assembly from the 2001 Accord to Havanna or D&A Bodyworks, even though the part had been recalled in May 2015, the lawsuit alleges. According to Honda, the air bag was among the most dangerous made by Takata, with tests showing nearly a 50 percent chance of the inlator rupturing in a crash. Havanna and D&A then installed the air bag in the Continued on page 5


4 • September 4, 2017

USED CAR NEWS

NEWS BRIEFS IAA Expands Six Facilities Insurance Auto Auctions Inc. announced the expansion of facilities in six states. The more than 50 acres of additional land are located in strategic markets where customer demand is rapidly increasing and projected to continue. The six expanded facilities include: IAA Indianapolis; IAA Kansas City (Kansas); IAA Salt Lake City; IAA Minneapolis/St. Paul; IAA Fredericksburg-South (Va.); and IAA Dothan (Ala.). Together, these facilities now cover more than 200 acres of land, an increase of over 30 percent from previous acreage. The expansions also provide additional space for potential weather events and create supplemental storage to meet the anticipated needs of the company’s seller customers.

Car-Mart Reports Better Sales Productivity America’s Car-Mart reported net earnings of $7 million on lat revenues of $146 million for its latest quarter. The buy-here, pay-here chain reported increased sales volume productivity with 28.2 retail units sold

per store per month, up from 27.9 for the prior year quarter. Average retail sales price decreased $7 to $10,386 from the prior year quarter. Gross proit margin percentage decreased to 41.4 percent from 41.8 percent for the prior year quarter. Collections as a percentage of average inance receivables decreased to 12.4 percent from 13 percent for the prior year quarter. The weighted average contract term increased to 32.6 months from 31.7 in the prior year quarter. Net charge-ofs as a percent of average inance receivables was 6.4 percent, up from 6.2 percent in the prior year quarter. Accounts over 30 days past due increased to 4.6 percent from 4.4 percent at July 31, 2016. Average percentage of inance receivables current improved slightly to 81 percent from 80 percent at July 31, 2016. Provision for credit losses was 26.6 percent of sales vs. 25.7 percent for the prior year quarter. Selling, general and administrative expenses were 18.6 percent of sales vs. 17.9 percent for the prior year quarter. The company’s active accounts base was approximately 68,800.

Dealers See Credit Desk as Crucial The interactions between dealers and frontline personnel working in the lender’s credit department are crucial to the relationship between the two, according to the J.D. Power 2017 U.S. Dealer Financing Satisfaction Study. For non-captive, captive luxury and captive mass market lenders, the credit desk represents more than half of the survey weight for overall satisfaction. Overall, the dealer/lender relationship outweighs application and approval process, lender oferings and lease return as the single most important variable associated with high levels of dealer satisfaction. Dealers overwhelmingly indicate that the credit desk is their irst point of contact when looking to resolve problems, far outpacing sales representatives, sales support staf and regional managers. As such, dealer satisfaction with sales reps is highest when reps focus on portfolio performance review, dealership performance consulting and customer retention vs. problem resolution and training. The optimal communications mix involves monthly visits paired with weekly calls and emails.

Crossword Correction Please accept our apologies for the error in a recent crossword. Below you will ind the correct answer key for the 8/7/17 puzzle. 1

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Vol. 23 • No. 11 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.

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USED CAR NEWS

September 4, 2017 • 5

Dealer Faces Bait-and-Switch Claims

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A New Jersey used-car dealer faces allegations of violating the state Consumer Fraud Act and a number of state regulations concerning the sale of motor vehicles. According to a complaint iled by the New Jersey Attorney General’s Division of Consumer Afairs, Cars on Route 21 of Newark LLC allegedly engaged in a host of “unconscionable and deceptive business practices,” including “bait and switch” schemes where the business advertised vehicles at low prices and then refused to sell the cars at the advertised prices. The complaint was iled against the business and two individuals, David Pereira and Hiram Ortiz, both of whom are involved in the ownership and operation of the company. The complaint details 11 counts against Cars on Route 21, Pereira and Ortiz, alleging violations of the Consumer Fraud Act, the Regulations Governing Motor Vehicle Advertising Practices, the Regulations Governing Automotive Sales Practices, the Used Car Lemon Law and/ or the Used Car Lemon Law Regulations.

Air Bags

Cars on Route 21 allegedly misrepresented the price of used motor vehicles, failed to include required statements about consumer costs, failed to include the actual odometer reading of motor vehicles in advertisements and failed to disclose prior damage to a vehicle that required substantial repair and body work. The company also did not submit required documentation and the total sum of administrative fees collected from customers who purchased used vehicles between 2010 and 2016, according to the complaint. The complaint seeks to bar Cars on Route 21, Pereira and Ortiz from engaging in deceptive practices and calls for the business to restore any money or real or personal property acquired by unlawful and deceptive activity. “The Division will not tolerate blatant disregard for regulations by any used motor vehicle dealership,” said Steve Lee, director of the Division of Consumer Afairs. “Businesses must be held accountable for deceptive business practices.”

– Continued from page 3

2002 Accord they bought from Liberty Mutual, the lawsuit said. In March 2016, Havana sold the refurbished Accord to Dorado’s father, Jose Dorado-Carillo, but the lawsuit alleges it failed to warn him that the air bag had been recalled. A year later, Dorado was driving home after work when her Accord was hit by another car and the air bags inlated. She spent several days in a trauma center. Her voice has changed, she has a scar, and she still faces the prospect of more surgeries, says one of her attorneys, BillieMarie Morrison. Morrison said Nevada Pic-a-Part had a legal duty to see if the 2001 Accord had been recalled and to not For Cars, Trucks and Vans

sell recalled parts. “They should be held responsible for this,” she said. “I can’t imagine how many other cars have recalled air bags and recalled brakes and recalled parts.” The lawsuit seeks damages of more than $50,000 each from Pic-aPart, Havanna and D&A Bodyworks, as well as the driver of the car that hit Dorado and the company that inspected the 2002 Accord. A manager for Pic-a-Part said he had not seen the lawsuit and couldn’t comment. At Havanna, a man who answered the phone declined comment before hanging up. D&A Bodyworks’ phone number was not in service.

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6 • September 4, 2017

USED CAR NEWS

State Goes After Finance Regulators in Massachusetts took action against Westlake Financial Services, along with several buyhere, pay-here dealerships, accusing them of unlicensed and illegal auto lending practices. The state’s Division of Banks, in collaboration with the Division of Professional Licensure and the Registry of Motor Vehicles, canvassed approximately 200 car dealerships statewide to identify unlicensed lending activity and/or unfair or deceptive acts or practices associated with the sales and inancing of used automobiles. The efort resulted in ive enforcement actions, 135 cease directives, $170,000 in ines and penalties, and more than $200,000 in consumer reimbursements. Massachusetts requires buy-here, pay-here dealerships be licensed by the Division of Banks. Companies who purchase or take assignment of retail installment contracts are also required to be licensed. These requirements apply anytime the purchase of a vehicle is inanced in two or more installments, regardless of whether interest is charged on the loan. The Banks Division entered into a consent order with Westlake, and its wholly owned subsidiary Western Funding Inc. (WFI) to address unlicensed activity and illegal lending practices. WFI purchased 157 inance contracts from Massachusetts’ auto dealers without irst obtaining a license. Thirty-three of those contracts had efective annual percentage rates in excess of the state maximum rate of 21 percent due to the inancing of GAP premiums. The consent order requires Western Funding to reimburse 33 consumers all inance charges collected and waive any future charges that accrue on their loans. Western Funding was also required to pay a $50,000 administrative penalty and cease lending activity until it obtained a license. The division anticipates over

$200,000 in reimbursements to Massachusetts consumers as a result of its action against Westlake and WFI. Westlake is under a previous consent order with the division to address substantial noncompliance identiied through a routine examination, including the purchase of contracts with APRs in excess of 21 percent due to inancing GAP premiums. Westlake also entered into an Assurance of Discontinuance in 2016 with the Massachusetts attorney general’s oice for similar practices. The division entered into a consent order with Cedar Auto Sales LLC to address unlicensed activity. Cedar continued to originate and hold retail installment contracts after its license expired in 2015. The division identiied 157 contracts originated by Cedar while unlicensed. Although the company did not charge interest on the contracts, its unlicensed activity posed an unnecessary risk to consumers. The consent order required Cedar to pay an administrative penalty of $10,000 and cease lending activity until it obtained a new license with the division. The division entered into a consent order with New City Funding Corp. to address failure to provide adequate right to cure provisions to consumers who fell behind on payments. New City engaged in the use of starter-interrupt devices to automatically disable vehicles prior to the expiration of the borrower’s right to cure period. The consent order required New City to pay an administrative penalty of $90,000 for the alleged violations. The division entered into a consent order with State Cap Auto Finance Inc. for a variety of deiciencies including excessive fee charges and improper repossession practices. The consent order required the company to pay a $20,000 administrative penalty plus required consumer reimbursements.


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8 • September 4, 2017

USED CAR NEWS

SO YOU MADE A MISTAKE... GOOD REPUTATION CARRIES DAY WHEN MISTAKES HAPPEN Eventually, every dealer is going to make some kind of mistake, ranging from buying the wrong car to creating a viral video that draws millions of negative comments. The real issue is how does the dealer recover from that mistake. In 2015, F&R Auto Sales in Westport, Mass., posted a video of its staf harassing a pizza deliveryman. The staf must have thought it was funny, but nobody else did. It drew negative attention everywhere from Facebook to CNN to the British tabloids. The issue grew into one of more than poor publicity as it led the state of Massachusetts to take a closer look at the dealership. The Massachusetts attorney general wound up suing F&R for deceptive and misleading business practices. According to the attorney general, F&R treated its customers about as poorly as it treated people who tried to deliver pizza. When consumers discovered issues with their cars, the dealership would allegedly frequently dismiss them or refuse to make repairs. In one case, a consumer was quoted nearly $16,000 in repairs needed on a car he got from the dealership – a price that far exceeded what he paid for the car. The attorney general received hundreds of complaints about the store before the viral video and may have taken action no matter what happened. But the suit did come after the pizza incident and drew extra attention as a result. Mike DeVilling, president of PR irm The DeVilling Group, said the key to handling a major public mistake is having a good reputation. “All of your actions as a business need to build

credibility and good will so that if you do make a mistake, people understand that it’s just a onetime thing,” Devilling said. DeVilling said dealers need to have public reaction in mind at all times for everything they do. “Used-car dealers as a group don’t have a good reputation,” DeVilling said. “As a dealer, even an ethical one, you’re starting from behind the eight ball because your industry as a whole has a bad reputation. You have to take extra steps so people know who you are and what you stand for.” Events happen more quickly now and can spiral out of control quickly. “Social media has made reputation management a 24/7 activity,” DeVilling said. The upside is dealers can respond faster to bad news using their own social media. Bad PR can hurt the entire industry, sometimes in very direct ways. Some industry watchers are worried that the recent scandal around Wells Fargo & Co.’s practices concerning collateral protection insurance will derail a push to block the Consumer Financial Protection Bureau’s ban on mandatory arbitration agreements. Tim Sloan, the bank’s CEO, recently attempted

to address the company’s progress in making up for its many mistakes in regard to consumer inance. “As we’ve said before, we’re reviewing all of our operations so we can be conident we have done all that we can do to build a better, stronger Wells Fargo,” Sloan said. “Recent headlines about other customer issues at Wells Fargo relect the results of that work – to identify and ix problems, and to be as transparent as possible in the process.” So in this case he is attempting to say the bad news is really good news. Wells Fargo is a very large corporation with its own PR staf and the resources to hire the best outside help if that’s not enough. Many small-business owners end up trying to handle PR themselves and not all are equipped to do it, DeVilling said. If the situation is serious enough, they should consider hiring an expert, just like they would hire a lawyer or an accountant. Whatever path a dealer decides to take, pretending the problem will go away on its own is rarely an option. “Whatever the mistake was, it gets bigger,” said Joe Lescota, a veteran consultant to the industry. That includes mistakes in hiring, advertising and stocking inventory.

NEXT ISSUE: SOCIAL MEDIA

Often these mistakes come from deciding too quickly in the irst place and then responding too slowly, Lescota said. “Don’t wait until somebody points out your mistake,” Lescota said. “Own it.” Debby Chesterman, dealer principal, World Auto Sales, Nebraska City, Neb., recently had to own her problem when her sales were down. “(One) problem I had was in getting the right mix of inventory. I needed about half of my inventory to be for credit-challenged people and half to be for prime customers. I did not have that mix.”

Lescota said some of the biggest problems are ones the dealers don’t hear about. These are unhappy customers who complain quietly. That’s why dealers need a process to identify mistakes. An example is evaluating inventory on a daily basis to see if vehicles are getting test drives. If a car isn’t getting test drives, that’s a sign of a problem. If the car is getting test drives, but remains unsold, that’s the sign of a diferent problem. The only way to address

“Don’t wait until somebody points out your mistake.” -Joe Lescota Customers would come in to buy, but they couldn’t qualify for inancing. Chesterman said it became pretty obvious that they needed more inexpensive cars. She is in the process of changing her inventory to 60 percent subprime units.

a mistake is by ixing the process, Lescota said. If a dealership makes a mistake and gives a customer a free oil change as a result, but continues with the process that created the mistake in the irst place, nothing is solved.


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10 • September 4, 2017

USED CAR NEWS

PEOPLE IN THE NEWS Finance Exec Retires

ers, but will report to Auto inance vet- diferent members of eran Nick Stanutz an- Huntington’s executive nounced his plan to leadership team. retire from Huntington Bancshares Inc., effective Dec. 31, follow- Auction Vet Joins ing 31 years of service Consulting Group Shelly Frank recentin various roles of inly joined Auction Mancreasing leadership. Stanutz came to Hun- agement Solutions Inc. Frank brings more tington in May 1986 to help build Hunting- than 25 years of experiton’s new auto lending ence in the auto inance and wholesale auto portfolio. In 1993, he moved to auction industry. Frank previously Columbus to lead all of consumer banking for served as loss mitigaHuntington. In 1998, tion operation manager Stanutz became part of Fireside Bank, and as of Huntington’s lead- vice president of busiership team at which ness development with time auto became a North Bay Auto Aucseparate line of busi- tion. She continues to work with North Bay ness for the bank. Stanutz also served on projects as a consulas the chairman of the tant. auto inance committee for the Consumer Cox, NAMAD Salute General Manager Bankers Association. Cox Automotive, in As part of Stanutz’s retirement, each of partnership with the his teams will be led National Association of by their current lead- Minority Automotive

Dealers, is awarding its Rising Star Award to Wadette H. Bradford of Martin Kia, Bowling Green, Ky. In a release, Cox said Bradford was recognized for her strong leadership and commitment to the automotive industry and her community. Nicole Ashe, senior vice president for talent, diversity and culture at Cox Automotive, was to present the award to Bradford at the NAMAD annual meeting awards dinner in Miami. Martin Kia’s parent company, Martin Automotive Group, was founded by Cornelius A. Martin in 1985 with the purchase of an Oldsmobile- Cadillac dealership. The family-owned company operates dealerships in Kentucky, Ohio, South Carolina, Tennessee

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and West Virginia. In addition to Kia, Martin Automotive Group sells Audi, Chevrolet, Dodge Jeep Chrysler, Ford, Honda, Hyundai, Mitsubishi, Subaru and Volkswagen. Bradford’s work has been instrumental in growing and expanding brand recognition and proit margins for both new and well-established dealerships. As general manager of Martin Kia, Bradford has increased inventory turns, developed digital marketing campaigns and increased service gross proit

ADESA Appoints Two to Sales Team ADESA added two new members to its sales team. Angela Williams has joined the company as executive sales director. Williams had been the business develop-

Additionally, Kirk Archer, formerly with KAR’s Insurance Auto Auctions business unit, has been named executive sales director at ADESA. Archer was previously director of commer-

Angela Williams ment and marketing manager for Rawls Auto Auction in Leesville, S.C., since 2010. Williams started her career at Rawls in 1990 as a part-time block clerk, joining the auction full time in 1996. Later she was promoted to leet-lease manager and then assistant general manager, serving in that position from 2005 to 2010. She holds an associate’s degree from Midlands Technical College in West Columbia, S.C.

Kirk Archer cial sales at IAA. He joined IAA in 2007 as an auction coordinator and was later promoted to divisional sales manager. Archer began his career at Enterprise Rent-A-Car. He graduated from the University of South Florida.


11 • September 4, 2017

USED CAR NEWS

RETAIL MARKETS COLORADO Tim Greufe, owner, TSG Auto.com, Parker, Colo.: “I was in the wholesale business for many years. We started the retail business in 2009. “We keep close to 300 in inventory. I buy the majority of the vehicles. I fly all over the place to get cars. “I’m in Kansas City on Tuesday, Denver on Wednesday, Phoenix on Thursday and on Friday I’m in Las Vegas. I also have a buyer who’s in Texas. “We sell about 2,000 a year or close to it. “When we started in 2009, we were operating out of a warehouse, maybe doing 20 to 30 cars a month. It just snowballed from there “In 2013, we moved into a facility that had been a brand new Chevy dealership but had just lost its franchise. “The majority of our business is bank financed. But we do some buy-here, pay-here. We always have 50 to 100 (retail installment contracts) on the street. Subprime is

another 10 to 15 percent. “Our average price on the lot is between $15,000 and $20,000. It’s gone up over the years. “Average model year is probably 2013. We also do a lot of 2015 and 2016 sedans. “Average mileage is 60,000 to 70,00 miles. But we sell a ton of trucks, so that (inflates the number). “Seventy-five percent of our inventory is trucks and SUVs. “We have 60 percent domestics. “Average reconditioning is right around $1,000. We do our own work. We have 18 lifts and a body shop as well. “We also do customer pay. Our service accounts are almost a third of our income. “We spend close to $40,000 a month on advertising. We do television commercials. We do radio. We do AutoTrader, and Cars. com. Of course, Craigslist is a huge part of it. “We also (do community service). Thanksgiving time, we give away 200 to 300 tur-

keys. We also do a car giveaway each year. We do a lot of charity car washes for local organizations all summer. We give away free food. All proceeds go to the charity and then I donate at least another $250 to them. “In October, we’re going to donate a certain amount of money of each car we sell toward breast cancer (research). “We just sold a 2014 GMC Terrain. It had 68,000 miles. We sold it for $19,991.”

GEORGIA Jack Carter, owner, Turn & Burn Motors, Conyers, Ga.: “I started Turn & Burn in September 2013. Before that, I was a buyer. “We fluctuate between 40 and 60 (in inventory). “I’d say we sell between 50 and 60 a month. This July was much better than July 2016. “I get vehicles from all over. I have a big sign that says ‘We Buy Cars.’ We get them from the street, from

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Compiled by Jeffrey Bellant trade-ins, from friends and family, from previous customers, auctions, repo lots – anywhere. We get about half from auctions. “We do about half buyhere, pay-here and half cash deals. It’s either us carrying the deal or it’s a cash deal. “Our average retail price is $2,500 to $5,500. “Our average down payment is probably $1,200. If you take $500 down and pay the TAVT (title ad valorem tax), you’ve got nothing. I mean, you’ve got $200. I just won’t do a deal like that. We try to show them how much another $500 down equates in interest. “We typically have (a term length) of 12 to 16 months. We tell people that they do not want to finance a car for a long time. We try not to bury someone in a car. We’re going after repeat business and referrals. “My average model year is 2004. Average mileage is 150,000. “We have probably 60 percent sedans and the other 40

percent is trucks, vans and SUVs. I think we’ve got three or four trucks out there. “I don’t really care (if it’s domestic or import). I think domestic cars are just as good. “Reconditioning is just a couple of hundred. I feel if I have a lot of reconditioning costs, it’s because I screwed up when I bought it. We do 95 percent of our own work. “We tried doing outside work and we failed at it. We were so scared that if we dropped the ball on an outside repair, we’d get bad reviews and that would harm our car sales. “We use just our website and Facebook for advertising. “We also are getting a van ready to give to a battered women’s shelter. We also give a ton of cars to the fire department for their training. They come here to my facility to cut them up with the Jaws of Life. “We sold a 2005 Toyota Camry. It had 105,000 miles. We got $4,500.”


12 • September 4, 2017

USED CAR NEWS

WHOLESALE MARKETS ARIZONA Stephanie Gingras, general manager, Dealers Auto Auction of the Southwest, Phoenix: “We’re working on our 15th year. We have six lanes and we run all six. We have ive for runners and then one is a tow-and-salvage lane. “We’re consigning about 600. One recent week we did 570 and a week before that we did 625, so 600 is a good number. “Sales have been at 68 percent. “We’re slightly ahead of this time last year. We’ve seen a bit of a bump because of the title-loan repossessions. “We run a tow-and-salvage sale weekly and we run anywhere from 30 to 50 units in a half-hour period. That runs irst at 11:30 a.m., followed by the regular sale at 12. We convert at least 80 percent. It’s a big part of our business. “A lot of that volume is attributed to title-loan repos-

sessions. “We’re at an 80/20 split between dealer consignment and commercial consignment. I would love to see it at 70/30. “I think repossessions are down this year. “Our average price has jumped up some and I’m proud to say we’re at $4,800. We’ve been able to gain some loyalty among dealers to get them to send us all of their units, rather than just the $5,000-and-back units. “We lost some of our Mexican business for a while, but it’s slowly coming back. I don’t think it comes down to a change in the U.S. administration. I think it comes down to the Mexican government trying to (boost) their franchise dealerships and trying to encourage inancing in Mexico City. “Our online sales are OK. I do have a lot of back-up bids, so they are bidding online. “We use SmartAuction and OVE. We also have Buy

Now 360, which is our own marketplace. When vehicles don’t sell in the lane, we give sellers an opportunity to put it on our marketplace. “If you’ve got two-wheel or four-wheel drive trucks in Arizona, they will sell like hotcakes. A truck that’s only got 80,000 to 120,000 miles will get all the money. We also do well with the imports, which is typical. “The building sector is on ire. Commercial real estate is doing well.”

WEST VIRGINIA Tad Swift, general manager, Winchester Auto Auction, Bunker Hill, W. Va.: “The auction has been here 30 or 40 years, but I’ve only owned it for the last 18 months. “We have three lanes. “(Volumes) are in the low 200s. The irst week I was here, we ran 95 and sold 27. Sales percentages are not quite at 50 this year, but we’re between 40 and 50 percent.

“(The way we’ve improved numbers) is that we’ve hired additional sales staf, gotten more people out on the road, more people on the phone trying to get our message out. “Probably 85 percent of our volume is dealer consignment and 15 percent includes donations and commercial accounts. All of those run at the same time. “Our donation cars are from Heritage from the Blind, Vietnam Veterans of America, Kars-R-Us, etc. Commercial consignment comes from Leasing Associates, U-Haul, Consolidated Asset Recovery, etc. We’ve run the gamut. “(Before we bought the auction) there was no commercial volume. “We’re expanding our reach. We’re drawing from 75- to 100-mile radius. We want to expand that to 150. “But there’s a lot of stuf happening here. I’m literally right across the street from a new Amazon distribution center. About ive

Compiled by Jeffrey Bellant or six miles down the road is a new Proctor & Gamble processing plant. The Navy Federal Credit Union is building a new executive ofice in Winchester. “(Oicials) are looking at 20,000 to 30,000 jobs in this area in the next one to two years. So that’s got to help. “All three of our lanes are simulcast through Auction Edge (via) Velocicast. We post a lot of our no sales from commercial accounts on OVE, Openlane and SmartAuction. It gives us an advantage over the corporates. “Our average selling price on the block overall is $3,100. When we took over it was $1,400. My goal would be between $4,000 and $5,000. “I’m feeling better today about the business than I did 90 days ago. In October, we’re doing our 2nd Annual Cigars & Cars Sale. We’ll have a party the night before with a band. Then we’ll hopefully have a big consignment for the next day.”

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USED CAR NEWS

September 4, 2017 • 13

DISCONNECTED JOTTINGS FROM It’s been a while since I vented over things in Washington so, as this is my 200th scribbling in these columns, I think I’ll use the occasion

TONY MOORBY

and intuitively incisive. In comparison, Trump’s scrufy and scrappy attempts at being clever with his Twitter account nearly

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 let loose. So far, President Trump’s term in the White House has proven to be as useful as a itted kitchen in a yurt. His churlish ravings have earned him little support and even less respect. I don’t often give much credit to President Obama – I don’t think he achieved much either and it took him eight years to go nowhere – but his use of modern communications techniques was clever, usually well timed

always backire, to a degree that simply conirms his schoolyard bully approach to everything. Mark Twain’s advice here would seem itting; “It’s better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt.� It doesn’t seem to matter whether it involves international politics or events at home causing sea-change adjustments to the course of our very history, his publicly

aired, spur-of-the-moment thoughts appear trite and glib. I voted for the party, not for him directly – there were lots of other, more qualiied candidates, but I will admit to looking forward to a disruptive burr under DC’s saddle and to someone who would question current self-important oice holders and the means to their ends. Be careful what you ask for, eh? The usual ilters of the president’s communications through a weathered catch net of well-informed, worldly individuals have gone down the toilet of Trump’s wide mouth. The old sausage machine, churning out all that the ofice of the President wanted the world to know, had, for the most part, efective containment. We now have a blender with the top of with shortterm staf spewing what they think the world should know.

C R O S S WO R D 33. Professional driver closed course event 37. Electronic system for data and entertainment 40. Bismarck’s state 42. Car category like the Golden Hawk and Rambler Rebel 43. Range Rover model Down 1. Place for a car ornament 2. Indy 500 circuit 3. Small street seen in many car chases 4. Important letters in the history of Aston Martin 5. Luxury sports sedan from Maserati

He gets easily sidetracked and descends to the tactics of a cheap fairground huckster, thinking that a raised voice carries automatic authority. On the subject of clothes he’s very disappointing, shabby even. He looks like he sleeps in his suits and they’re about two and a half sizes too big – they match his hair. You have to wonder if he’ll ever be taken as seriously as he seems to take himself. The people in the press have never gotten over getting their election predictions so awfully wrong and, even now, carry on taking cheap pop shots at Trump. I’m getting as sick and tired of them as I am of him. I’ve even stopped watching late-night talk shows. Will I ind enough to talk about for another two hundred columns?

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. Pump a full tank, 2 words 9. Chevy model 10. New minivan from Chrysler 12. Lighting type 14. Toyota hybrid car 15. Freeway divisions 17. Giants QB, irst name 18. Kia sedan 20. Former Saturn compacts 23. Exist 26. Silverado, for one 28. QX30, for one 29. Sporty VW 31. Jetta relative 32. Medical checkup professional

Typically they haven’t been there long enough to read situations properly or with due regard for the rest of the administration. They look like a troupe of unruly baboons, scattered hither and yon ighting for a top spot. You would have thought that a well-worn businessman could exert all the necessary disciplines to run the irm that is the White House. It seems he couldn’t run a barn dance in a brewery. Then there’s the question of style. Or the lack of it. Not just for clothes but the character and demeanor of the oice. His English is simple. Nothing really wrong with that, but the way he speaks publicly, with the aid of prompters, gives the impression of a stumbling yokel who hasn’t practiced his lines.



6. Boxy Toyota 7. Has fun with 8. Increase, as a price 11. Chevy sedan 13. Franchises 16. One billion years 19. Note well, abbr. 21. Star Wars jedi, irst name 22. Protect 24. Google’s operating system for smart phones 25. Parent of Maserati and Ferrari 26. Trophy, oten 27. Airmative vote 30. Over 8 hours work in a day, abbr. 34. Hyudai 4-door litback













 

 











 





 



 







 









 









 



35. Old Ford 36. Iconic Dodge truck 38. Part of a countdown 39. “Pimp My Ride� channel 41. Hyundai Santa ___

Solution to this puzzle in the 9/18/17 issue. Call 1.800.794.0760 for a FREE subscription.

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14 • September 4, 2017

USED CAR NEWS

AROUND THE BLOCK

Compiled by Jeffrey Bellant

AUCTION FIGHTS TRAFFICKING

MINOR DAMAGE?: A participant is enjoying the “Beat a Car” event during Dealers Auto Auction of the Rockies’ fundraising effort in June to help raise awareness of sex trafficking.

Dealers Auto Auction of the Rockies designated the month of June as its Month of Giving to help raise awareness about sex trafficking in the community and to support Extended Hands of Hope. Together, the auction, its employees and its customers raised

more than $24,000. “When the community unites together like DAA Rockies and their customers did to help and to say that they care, it gives all of us at Extended Hands of Hope the strength to continue on,” said Kristen Harness, Extended Hands of Hope’s executive director.

For the past six years, Dealers Auto Auction of the Rockies has held a live charity auction to support local Colorado non-profit organizations. Since the inaugural charity auction, DAA Rockies, with the help of their generous customers and vendors, has raised over $75,000 to support various Colorado non-profits. This year DAA Rockies switched up its fundraising from one event to a month of mini fundraising events. The events included a Mystery Car Trunk auction, Put an Employee in Jail for the Day, ‘Beat a Car’ and a live concert. In addition to the $24,000, Kevin Sharp with The Sharpest Rides donated a van to Extended Hands of Hope to help transport clients to various appointments. “We had no idea the impact this would have for our chosen charity,” said Michele Noblitt, auction executive vice president.

Classic Car Sale Supports Restoration Greensboro Auto Auction ran 561 cars during a three-day classic car event in July. The sale had a 72 percent conversion rate. Notable vehicles included a 1967 Convertible Chevrolet Corvette that was billed as “the Skunk”. With black exterior, white stinger and white interior the Corvette stood out as it sold for $195,000. The big seller, a red 2005 Ford GT, went for $257,500. The third highest-selling vehicle was a 1958 Cadillac Series 62 that drew a final bid of $154,000. GAA Classic Cars will have another sale in November, running a 2004 Ford Shelby Cobra Concept Vehicle built in partnership with Carroll Shelby. Proceeds from the sale will go to Fair Lane, the 501(c)3 supporting the restoration of Fair Lane, the historic home of Ford Motor Company founder Henry Ford and his wife, Clara, in Dearborn, Mich.

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

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