January 15, 2018
Independent Thrives in New Car Motor Mall By Ted Craig
Photo by Kristin Craig HOMETOWN FAVORITE: Dealer Otto Hahne stands among the vehicles at his City of Cars. Hahne moved into the location after his hometown changed its zoning rules.
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Otto Hahne has lived in Troy, Mich., for years. He and his wife, Jerrianne, raised three children there and built a house. But until a few years ago, he couldn’t locate his business in the city. Troy’s zoning regulations banned independent dealers. That changed with the economic downturn. Today, Hahne’s City of Cars is one of several used-car operations located around the Troy Motor Mall, formerly an enclave only for franchise dealers. The city’s change of attitude came at the perfect time for Hahne. He operated out of a building in a suburb north of Troy and the owner of that building had just sold it to a hospital. It was much smaller than his current store, so there was an opportunity to grow. However, the cost was also larger. “It was a big choice to make,” Hahne said. “I thought I was biting of more than I could chew at the time.” Meeting with city oicials convinced Hahne to take the chance. As soon as the city changed its policy, it completely changed its attitude, Hahne said, and has completely supported his operation. “They’ve been absolutely wonderful to work with,” Hahne said. The new store came with a new name. City of Cars provides better visibility online, Hahne said. Digital marketing plays a big part in Hahne’s strategy. “Every minute a car is not on the Internet is a minute of lost opportunity,” he said. Hahne has also been on the cut-
ting edge of technology. He started as a mechanic working on the electronic systems just coming into cars in the late ‘70s. City of Cars retails 35 to 50 units a month and wholesales about 100. Hahne retails about 15 units a month in a recently opened second location in a neighboring city. His cars go all over the country and even overseas. City of Cars recently shipped a green Mustang to Indiana and a 2007 Shelby to France. The store’s real strength, however, is repeat and referral business. “We want to sell a customer a car they want, not what we have,” Hahne said. A few years ago, Hahne saw the used-car industry was under threat and he became more active with the Michigan Independent Automobile Dealers Association. He is now in his second term as president. His activities include being part of the NIADA’s Leadership Summit in D.C. Pretty good for a guy who left high school after two weeks. Hahne went to night school for auto mechanics after that, graduating at the top of his class. He also worked at a skating rink and started his irst business, renting out skates at the local parks. In 1977, Hahne became a mechanic full time. He went to work at a dealership that sold two smaller import brands – Subarus and Triumphs. The dealership still operates as Hodges Subaru, but the Triumph brand folded in 1980. The owners gave Hahne the chance to take over one of their buildings, as well as a parts department credit to start a garage to service, restore and sell Continued on page 5
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USED CAR NEWS
January 15, 2018 • 3
Rate Hike Hits Subprime Customers Hardest DETROIT (AP) – Car salesmen call it “the payment walk,” when a customer wants a new vehicle but is walked instead to the used lot because they can’t qualify for a new-car loan. With the Federal Reserve seemingly bent on more interest-rate hikes, it’s almost certain that more people will be taking that stroll. The Fed raised rates a quarter percent in December, the third rate hike of 2017, and it’s broadcasting three more increases this year. For would-be buyers with stellar credit, the impact hasn’t been substantial. But many people with subprime credit scores of around 600 or below are now settling for cars that already have some miles on them, says Jonathan Smoke, chief economist for Cox Automotive. Subprime buyers got substantially better rates even a year ago. The average subprime rate of 5.91 percent last year has jumped to 16.84 percent today, Smoke says. For a 60-month loan of $20,000, that means a monthly payment hike of more than $100, to $495. “Their ability to qualify has changed dramatically,”
Smoke says. Used car sales are already up, and new-car sales have ebbed, says Bill Perkins, owner of a Chevrolet dealership in Taylor, a suburb of Detroit. Record new-car sales are on the way out. “It’s going to afect everything,” he says. It’s one reason that Cox Automotive lowered its U.S. auto sales forecast this year to 16.6 million, down from an expected 17.1 million in 2017. Buyers with good credit, scores above 660, haven’t been greatly afected yet, says Melinda Zabritski, Experian’s director of automotive inance. A quarter-point increase is only around $4 per month in these cases, and rates of 4 percent or lower are still around. But as rates rise, Zabritski expects a broader downscaling trend. Buyers with credit scores of 600 or lower make up about 20 percent of newcar sales. Prime credit buyers make up 61 percent. The rest are in a middle category called nonprime, according to Experian. Auto loans on average have risen at a slower pace than the Fed’s short-term rate,
largely because automakers subsidize loans to goose sales. Some remain at 0. Automakers may desire higher rates, but they’re also ighting for sales in a declining U.S. market, said Jessica Caldwell, executive director of analysis for Edmunds.com. Even small payment bumps for people with strong credit will have an impact, if only a psychological one, says Perkins. A $199 monthly lease goes over $200, or a $299 lease passes $300. “People are going to take notice of that,” Perkins says. Buyers are already steering toward extended loans to lower monthly payments, with the average at 69 months, according to Experian. The average vehicle loan is now $30,329, up $291 from a year ago. Bradd Levin of Stamford, Conn., who runs a plumbing supply business, wanted to lease a vehicle to replace a 2011 Honda Pilot SUV. He knew interest rates had gone up, didn’t want a down payment, and was hoping a dealer would give him cash for the Pilot. He igured he
wouldn’t be able to beat a lease payment of around $600 per month. But a dealer cut the price of a new $44,500 Pilot to $39,800, ofered 0.9 percent ive-year inancing through Honda, plus over $10,000 for his SUV. That brought his monthly payment to around $540, less than the lease. “Because the interest rate on the lease was so high,
I ended up inancing,” he said. Levin’s deal would only be ofered to someone with prime credit. Smoke, of Cox Automotive, thinks rising rates will force those with weaker credit into older used vehicles, or out of the market completely. “There’s a point at which you just can’t keep moving to a lower-priced vehicle,” he said.
Manufacturers Continue to Recall Millions of Units Big recalls continue to plague the auto industry. Chrysler is recalling 1,482,874 2016-17 Ram 3500 Cab Chassis vehicles with a gross weight rating of less than 10,000 lbs.; 2011-17 Ram 3500, 4500 and 5500 Cab Chassis vehicles, 200917 Ram 1500 and 2010-17 Ram 2500 and 3500 pickup trucks, all equipped with a column shifter. Pushing the brake pedal for prolonged periods when the vehicle is running and in PARK may cause the Brake Transmission Shift Interlock (BTSI) pin to stick in the open position. With the pin in the open position, the transmission can be shifted out of PARK into any gear without pushing the brake pedal or having the key in the ignition. The remedy for this recall is still under development. The recall is expected to begin Feb. 8. Chrysler’s number for this
recall is T79. Ford Motor Co. is superseding a previous recall for 361,523 2004-06 Ford Ranger trucks to implement a inal repair. Upon deployment of the driver side frontal air bag, excessive internal pressure may cause the inlator to rupture. Ford will notify owners, and dealers will replace the driver’s frontal air bag inlator with an alternate inlator, free of charge. The recall was expected to begin Dec. 26, and will be launched in phases through the end of March 2018. Ford’s number for this recall is 17S42. This recall supersedes recall 16V-036, which was an interim repair. Vehicles that received a replacement air bag inlator under the previous campaign need to be returned to a dealer to have an alternate inlator installed. Hyundai Motor Co. is recalling 390,467 2013-2014 Elantra sedan, coupe and
GT vehicles. The brake pedal stopper pad can deteriorate allowing the brake light switch plunger to remain extended when the brake pedal is released. This will allow the brake lights to remain illuminated continuously. It can also allow the shift lever to be moved without depressing the brake pedal, or
activate the engine management brake pedal override feature. Hyundai will notify owners, and dealers will replace the brake pedal stopper pad, free of charge. The recall is expected to begin Feb. 8. Hyundai’s number for this recall is 170. This campaign expands recall 16V574.
Although smaller than these, Aston Martin The Americas is recalling 3,493 2009-16 DB9; 2009-12 DBS; 2010-15 Rapide; 2012 Virage; and 2014 Vanquish vehicles equipped with a 6-speed Touchtronic II automatic transmission. That is a large percentage of the Aston Martins sold.
1/8/18 4:46 PM
4 • January 15, 2018
USED CAR NEWS
NEWS BRIEFS Sonic Expands Ability to Trade for Motorcycles It is now easier for Sonic Automotive Inc. to take motorcycles as trades for cars. Sonic entered into a partnership with RumbleOn Inc., an online platform that facilitates the ability of consumers and dealers to buy, sell, trade, and inance pre-owned motorcycles in one online location. Sonic will gain access to RumbleOn’s e-commerce platform to provide instant appraisals and liquidity, enabling Sonic to more aggressively trade for motorcycles on its car and truck transactions.
ties, TrueCar has agreed to transition its billing model in the State of California. The model will now go from a pay-per-sale model with a cap to a lat-fee subscription billing model by Jan. 1, 2019. TrueCar will also double the indemnity that it provides to California dealers who participate in the TrueCar program. Unlike TrueCar’s current subscription billing model in California, the lat-fee billing model will not include a “sales guarantee” as a retroactive adjustment mechanism.
Black Book Index Sees First Decline Carvana More Than Doubles in Size Since Summer Carvana Co. has grown its Texas presence to ive markets by launching operations in Corpus Christi. Corpus Christi is the company’s 44th market overall. This was Carvana’s last market launch of 2017. Carvana more than doubled in size in ‘17, adding operations in 23 markets.
TrueCar Settles with California New Car Dealers TrueCar Inc. and the California New Car Dealers Association (CNCDA) announced that, in resolution of the litigation between the two par-
Black Book saw its Used Vehicle Retention Index fall in December to 114.1 from 115, its irst decline since August. The Black Book Used Vehicle Retention Index is calculated using Black Book’s published Wholesale Average value on two- to six-yearold used vehicles, as a percent of original typically equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage, and condition. The Index ofers an accurate, unbiased view of the strength of today’s used vehicle market values.
After rising for three straight months, the Index fell largely due to higher depreciation recorded for both car and truck segments. December saw higher depreciation on a mix of both car and truck segments, led by full-size luxury CUV/SUV (2 percent); mid-size luxury CUV/SUV (1.9 percent); full-size cars (1.7 percent); compact crossovers (1.7 percent); and compact cars (1.4 percent).
Cars.com Adds Markets Cars.com Inc. and McClatchy, a news media company, announced an agreement to convert the remaining 17 ailiate markets into the Cars. com direct sales channel prior to the October 2019 ailiate agreement expiration date. The agreement follows an earlier November initial accord to convert ive markets. The new agreement includes marketing support payments through 2019 relecting a continuing relationship between Cars.com and McClatchy. McClatchy also will continue to partner with Cars.com, promoting Cars.com in its markets while also acting as a premier digital marketing partner for other digital solutions through its Excelerate
Prices, Incentives Reach Record Both the average new-vehicle transaction price and the average incentive per unit reached record highs in December, according to J.D. Power and LMC Automotive. The average new-vehicle retail transaction price in December was $32,933, a record for the month, surpassing the previous high for the month of $32,082 set in December 2016. Average incentive spending per unit to date in December was $4,302 per unit, surpassing the previous record of $4,188 set in November. Spending on trucks and SUVs is $4,265, up $418 from the year before. Spending on cars is $4,377, up $98. Incentives as a percentage of MSRP were at 11.2 percent in December, exceeding 10 percent for the 17th time in the past 18 months.
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USED CAR NEWS
January 15, 2018 • 5
City of Cars – from page 1
For Cars, Trucks and Vans
Photo by Jeffrey Bellant MR. PRESIDENT: Otto Hahne honors Lisa Michael, executive director of the Michigan Independent Automobile Dealers Association, during the group’s annual dinner.
British cars. Hahne also started a motorcycle auction. In 1991, wholesaler John Cooper, one of his best clients hired him as a buyer. This led to him starting his own used-car store in 2000 with his wife. Today, City of Cars is a true family business. Son, Evan; daughter, Lauren; and her husband, Alan Surprenant, all work there. A third daughter, Leah Skalnek, is married to a Ford dealer and helps with social media. She also heads
up City of Cars’ dog events with Detroit Dog Rescue. Jerrianne has a play space in her oice for when the grandkids visit the business. Other employees are like family. Hahne is proud that he has mentored several employees who now own their own used-car stores. Despite the presence of these young people, Hahne doesn’t see himself stepping back from the dayto-day operations any time soon. “We plan on being here for years,” Hahne said.
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Self-Driving Moves Ahead DETROIT (AP) – Hyundai and Volkswagen each say they’re partnering with a U.S. autonomous vehicle tech irm led by former executives from Google, Tesla and Uber. The companies recently announced partnerships with Aurora Innovation, started last year by exGoogle autonomous car chief Chris Urmson and others. VW says its collaboration will help bring self-driving cars quickly to roads worldwide, while autonomous Hyundais are expected to be in the market by 2021. The partnerships are the latest in a string of tie-ups between traditional auto companies and tech irms as they race to be irst with self-driving vehicles. Aurora is based in Pittsburgh and Palo Alto, Calif. It was started last year by Urmson, former Tesla executive Sterling Anderson, and ex-Uber autonomous vehicle leader Drew Bagnell. Terms of each partnership were not released.
Urmson left Alphabet Inc.’s Google in 2016 after more than seven years of work on its autonomous vehicles. At Tesla Inc., Anderson led development of the company’s semi-autonomous Autopilot system after its initial release, and he led development of the Model X SUV, according to Aurora’s website. Bagnell was a founding member of Uber Technologies Inc.’s Advanced Technology Center that’s working on autonomous cars in Pittsburgh. Germany-based Volkswagen AG, which produces about 10 million vehicles annually, hopes the tie-up will bring autonomous vehicle technology to all of its brands. The company says it has been working with Aurora for the past six months, integrating its sensors, hardware and software into VW vehicles. Hyundai Motor Co. said the partnership with Aurora will bring autonomous vehicles to market that can operate without human input.
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RETAIL MARKETS ALABAMA Bryan Cooper, manager, Richard Hughes Auto Sales, Huntsville, Ala.: “We’ve been in business since 1988. We have one location. “We usually carry about 60 (in inventory) this time of the year. This is similar to 2017. “We probably average 25 (sales) per month on average. This has been about the same as this time last year. “We always get a little bump during tax time. “Our (inventory) primarily comes from auctions. We don’t really wholesale at auction. “It’s straight retail (no subprime or buy-here, payhere). “I would say average retail price is probably about $12,000. “Average mileage is probably 80,000. The average model year is maybe a three- or four-year-old car. “(Getting low mileage is diicult), because it doesn’t take nothing to get 100,000
miles on something. Before you turn around, a car’s got 100,000 miles. They add up. “We carry cars, trucks, SUVs, minivans – I carry one of everything. That’s pretty much (been the business model). “We carry very few imports. We sell a lot more American cars. “I do recondition cars before they go out on the lot. The average cost is about $300. That would be for a detail, maybe tires or windshields. (We farm out the work). We let whoever does windshields do the windshields, whoever does brakes do the brakes and whoever does washing does the washing. “We don’t do much advertising (outside of our website.). We do a little AutoTrader, a little Cars.com – stuf like that. I got out of the newspaper. “We recently sold a 2013 F-150 crew cab. It had 125,000 miles. I think I got $14,000. We do a good job selling trucks. It’s just hard
to buy one at a reasonable price. “The local economy is good. “Last year was ine. Trump’s (policies) have been good. Heck, 2017 was (strong). I’m sure 2018 is going to be good, too.
WASHINGTON J.T. Curry, Motors Northwest, Tacoma, Wash.: “We’ve been in business 15 years. This is it (one location). “We’re carrying 70 units (in early January). Yes, that’s typical of this time last year. “I was just down in my other oice doing (the numbers). I think we were at 64 (sold) per month last year. So 2017 was a good year. “We acquire our inventory the same way that everyone else does. We like trade-ins, but we have to put cars on our lot to get trade-ins. We buy from local franchise dealers and we buy from a nice local independent auto
$ auction. “We also sell at wholesale auto auction. But I don’t sell often – maybe 15 a year. “We do all three (types of inancing) – straight retail, subprime and buy-here, payhere – though very rarely do we do buy-here, pay-here. Buy-here, pay-here is probably less than 1 percent. It’s an easy breakdown for the rest. Prime makes up about 50 percent and subprime makes up 50- percent. That hasn’t changed much. “Average retail price on the lot is inexpensive – $12,000. That’s same as this time last year. “The average model year is a 2010. The average mileage is 90,000 miles. “It’s very diicult inding those vehicles. The challenge is the competition. “We are evenly split between cars and SUVs/ trucks. That hasn’t always been that way. We used to be very truck-heavy. “My market has changed. We have one of the largest independent truck deal-
USED CAR NEWS
Compiled by Jeffrey Bellant ers in the nation out here. These guys have done a phenomenal job and they really cornered the truck market. Then everyone wanted to mimic what he or she is doing. So all these guys have these big lifted trucks and another has ‘Trucks, trucks and more trucks.’ We just decided we didn’t want to compete. “I don’t stuf this car lot with 100 cars. We will range from 55 cars to 85 cars on this car lot and we will range from 55 to 85 cars sold. “We do a very good job with reconditioning. I would say the average is about $700. It’s farmed out, but we manage it. “What we do right is make sure there is a good description on our car and that there are good pictures of it. We also adjust prices up and down. “We recently sold a 2011 Toyota Highlander. It had 90,000 miles. We got $20,000.”
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8 • January 15, 2018
USED CAR NEWS
WHOLESALE MARKETS Compiled by Jeffrey Bellant NEBRASKA Ryan Durst, vice president, Lincoln Auto Auction, Waverly, Neb.: “Our irst sale in January was actually good despite the temperature. We were actually short on cars because of the holiday and guys of. We ran just over 200. But we sold 78 percent. “This will be our 26th year in business. We have four lanes and we’re running four. “The percentages have been good the last couple of months, but we’re known for having good percentages. It maintained pretty good through December. We’ve just been kind of short on inventory. “Last year, we were going good, then about midway through August, business just stopped here in Nebraska. Everyone’s volumes were lower and we were just getting fewer and fewer cars. We’re getting cars from the same guys, just less and less of them. “So the volume has been
lower but percentages have been in the mid-70s through December all the way to early January. “We’re drawing about 225 dealers in the lanes. I think dealer volume in the lanes is a little lower, but the guys that are hanging around are doing better. They are stronger. They’re selling more cars and they’re picking up that volume. “Volumes were lower in 2017 than 2016. Not huge margins but a little bit. You can tell because bigger consignors who would run 30 to 40 cars were running 12 to 15. “We’re a new-car trade sale. That’s 90 percent of what we have. “About 10 percent of our volume is leet-lease, repo and GSA. “GSA did about half as much in 2017 as they did in 2016. We had a short GSA sale in mid-December. They only had about 40 cars. It was just a cleanup sale. “In March and April we’ll start getting a bunch of GSA
cars again. GSA volumes this year are expected to be better than last year, so that’s a good sign for us. “For online sale, we use Edge Pipeline. We use that for everything. Conversion rates online are 5 percent to 7 percent, but it’s what that’s like for everyone. In December, with the weather, we had a couple of sales over 10 percent, which is good for us. Online is just something you have to have. “Our (sale) price on the block has been $3,850. “We’ve always been strong with sedans, like Grand Prixs and G6s. You can never get enough of them. But there’s nothing really struggling. “I feel really good about 2018. We’ve grown across the board since 2010. Last year was kind of a tick back. “We’re coming out of the gate strong for 2018. I anticipate that volumes will pick up since new-car guys had good Decembers and January is starting out good. “The forecast looks good for 2018,.”
WEST VIRGINIA Tad Swift, owner, Winchester Auto Auction, Bunker Hill, W.Va.: “I took over March 2016. The auction has been here 30 or 40 years. “We run three lanes. Volumes haven’t been too bad. Some days we’re running 200 and some days 250. “Sales percentages are not quite in the 50s. I want it to be in the 50s and 60s. But it’s been in the 40s. We’re coming up with some deals to create a franchise dealer promotion. Those are the guys that sell more cars. “I think a lot of dealers don’t have the cash they need to get out of a deal. If they buy one $2,000, they need to sell it for $2,200 or $2,300. If they get $1,800, they don’t have enough. “December wasn’t too bad. They obviously weren’t as strong as they could have been because of the holidays, but they weren’t as bad as I thought they would be. “We might have a few leet-lease and repo units,
but we’re a 98- or 99-percent dealer consignment sale. I talk to some leet-lease and repo guys, but the big ones are locked up with Manheim or ADESA. “Bid badge count has been under 100. But it’s just about double what it was when I took over. It’s just over 60 and before we had 33 to 40. “Some dealers are hurting and say they’re not doing a lot of business. I think some guys that are hurting are dealers with the bad reputations. “But I also think the newcar stores are hurting some independents because you can lease a car so cheap. Before, if you were 612 or 615 (credit score), they’d thumb their nose at you and walk away. Now they’re down in the 550s or 540s and leasing these cars out. “If you’re a used-car store and trying to get a guy in a car for $60 a week, $240 a month, and he can go lease a car for $199 and it’s brand freaking new? It’s hard to compete.”
9 â€˘ January 15, 2018
USED CAR NEWS
DISCONNECTED JOTTINGS FROM Historically, I donâ€™t believe America has served its worldwide interests by isolationism. After almost a year in oice, Mr. Trump (I still have a problem seeing him as President) seems to have adopted that route, underwritten with a by-line that says, America First. Iâ€™ve been a Conservative all my life, but todayâ€™s policies line up less and less with my sympathies. They say, as you get older, you lean further to the left and while Iâ€™m a long way from being a red under the bed, his administration is testing life-long loyalties. I wouldnâ€™t mind betting Iâ€™m one of hundreds of thousands feeling the same way. Letâ€™s take China. It used to be, by creed as communists, an isolated nation, snubbing its nose at the rest of the world and caring not one jot about pollution or global warming or even the fate of its very own population. Under Xi-Jinping, they now face outward toward a world they see as the provider of opportunity and growth.
Theyâ€™re making alliances and trade deals all over, especially where mineral resources are rich and, as yet untapped. Much of Africa is being courted while we treat it as a backwater. South America is much the same while we push back those that should be our close industrial allies. China is building modern infrastructure that is eicient, much less dependent on fossil fuels and technology that may not yet lead the way but theyâ€™re willing to pay for fertile minds to get them on the forefront of every technical development. They may have served the world as a low-cost provider of commodities and inished products because of a cheap workforce, but their commitment to robotic engineering, nanotechnology, solar and hydropower will keep them in that competitive position for a long time yet. The size of their own population, growing richer by the minute, is fueling monetary strength and
growth. It owns $1.2 trillion of American debt and holds outstanding debt all over the world. That can be bonus or burden, depending on political winds. Iâ€™m not so sure we have a good sense or feel of direction of those winds. This administration seems to think that lipping the bird at other countries is suicient to exert authority. Not so. Ittakes years of building trust through talented channels of diplomats in their outposts â€“ our ears and eyes on the rest of the world. How many times in the recent past have we misread situations to our detriment and the loss of American lives? I donâ€™t think weâ€™ve efectively had our ears to the global ground since Madeleine Albright and Colin Powell (George Bush pushed him into a corner over Iraq that ended a fabulous career â€“ I believe he could and should have been our irst AfricanAmerican president). I donâ€™t know whether to revile Rex Tillerson or feel
sorry for him. As a civil engineer, he seems better at pulling things apart rather than building them. The State Department is in tatters and diplomats are resigning rather than work for him. Still, I blame Trump. At every turn he wants to buy a dog but bark himself! The whole situation over North Korea is out of control; a festering sore that could prove fatal. It only gets worse when you keep touching it and the infection grows. Kim Jong Un needs special attention by professional people who know what the heck theyâ€™re doing. Trump needs to stay aloof but then he canâ€™t even spell that! Storming of the interna-
Tony Moorby â€˘ 50-year veteran of the industry â€˘ President from 1997â€“2000 of ADT Automotive â€˘ Served as ADESAâ€™s executive vice president of sales and marketing â€˘ Moorby & Associates 2006â€“present â€˘ Awarded the Ring of Honor by NIADA â€˘ NAAA Hall of Famer
Digital version available at usedcarnews.com
C R O S S WO R D By Myles Mellor
Across 1. Ford turbo charged SUV 5. Toyota makes them 10. One who has to travel in the back seat 11. Intersected 12. Q45 makers 14. __ No (James Bond movie) 15. Debtorâ€™s note 17. ___ shaft 18. It was replaced by the Forte 21. Software program, briefly 22. The A in IPA 23. Surprised expression 25. Detroit based car company started in 1909 28. Kia subcompact 29. Camry ___
31. Former Honda 4-door 32. Honda with a palindromic name 34. Kia subcompact 35. Audi sports car 36. Compact crossover SUV from Nissan 37. Ferrari 488 ___ 38. Loan percentage rate, abbr. 39. Exclamation of surprise 41. On the fritz 44. Boltâ€™s companion 45. Compact crossover SUV from Nissan 46. ___ tank 47. Note 49. Former Chrysler 50. VWâ€™s 7 seater minivan
tional stage in a huf, as with the Paris Climate Agreement or the Trans Paciic Partnership (on trade and tarifs) doesnâ€™t endear America to the rest of the world. Weâ€™re at the risk of becoming a pariah; a reversal of the role weâ€™ve had in the past as developer and peacemaker. On immigration: Iâ€™m an immigrant and did well for myself along with thousands of others that worked for the company I helped found back in 1982. Enough said on that! Letâ€™s hope that this year doesnâ€™t start out with a bang. America will be irst when, and only when, it is the best. We have some work to do.
Down 1. Tree 2. Kia sedan 3. Pioneering Toyota 4. Gases up again 6. Grand Am competitor 7. Over 8 hours work in a day, abbr. 8. Affirm silently 9. Colorful line on a Mini 13. After-tax amount 16. XK8, for one 17. Subaru SUV 19. Brake ___ 20. Key executive 24. Pressure, slangily 26. Erect 27. Luxury Lincoln 30. Dodge SUV 32. Less dirty
33. Boxy Nissan 36. Settle a debt 38. ____ MDX 40. Run smoothly 42. Some time back 43. Patriotic chant 47. Augustaâ€™s state 48. Copper symbol
Solution to this puzzle in the 2/5/18 issue. Call 1.800.794.0760 for a FREE subscription.
4 8 8
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5 $ 7
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Solution to the 1/1/2018 puzzle
10 • January 15, 2018
Special Advertising Section
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USED CAR NEWS
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USED CAR NEWS
Adapting to Change in the Buy-Here, Pay-Here Industry Change is a constant challenge in every aspect of our lives. This is very true for the buy-here, pay-here industry. Dealers must often grapple with the challenges of a changing environment. Whether it is a change in the price of cars, regulations impacting your business or your own desire to update your business, you will need a partner that can support you through these new demands for capital. CAR Financial has a proven track record of over 25 years in the buyhere, pay-here 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 operates in 45 states and is continually evolving its programs to meet the ever-changing needs of the buy-here, pay-here market. These changes are met by providing capital to dealers through an array of products that it a variety of needs. These include Bulk Purchases, (of either retail or lease contracts), Payment Interval Purchases, Aged
Pay Share Purchases, and Floor Plan capital for inventory investment. CAR Financial also provides servicing for dealers who may need help in scaling collections while they focus on growing sales. CAR Financial strives to understand each business and their speciic goals to provide the right custom solution. Additionally, any dealer can request a free portfolio evaluation from CAR Financial. We provide this as a value-added service to dealers in our industry to help aid them in understanding their current portfolio and therefore better understand their future business needs. As 2018 begins, CAR Financial looks forward to helping even more dealers to succeed and meet the challenges of this industry head on. Interested in more information on CAR Financial Services’ programs and services? Go to www.carinancial.com or call 877-570-8857.
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12 • January 15, 2018
Special Advertising Section
USED CAR NEWS
AFCDealer® Website Offers Data-driven Tools and Business Solutions
Copart Delivers a Personalized Buying Experience
Automotive Finance Corporation (“AFC”), a business unit of KAR Auction Services, Inc. (NYSE: KAR), provides inventory inance solutions to more than 11,000 independent automobile dealers throughout the U.S. and Canada. “For us, this means doing a lot more than inancing cars,” said Jim Money, president of AFC. “It’s about delivering reliable and dedicated local customer service and developing innovative, datadriven tools that help our customers succeed.” AFC provides customers with transparent data and accessible business tools through the robust inventory dashboard, available on the AFCDealer® website and AFC On the Go mobile app. This dealer solution provides dealers with greater transparency, insights, and account information. With the total account balance chart, dealers can view their AFC investment portfolio, including account balance, credit limit, principal, interest, and fees. Dealers can also view deep, vehiclespeciic investment information for each vehicle loored with AFC. Through the turn time table, dealers can view their 18-month vehicle purchase history to identify which vehicles moved the quickest. With
With the newest release of the Copart Member Preference Center, buyers can better manage their email subscriptions. “Our buyers are foundational to our business, so we want to ensure they’re getting their vehicle information exactly how they want it,” said Will Franklin, Executive Vice President at Copart. “The latest update of the Preference Center allows buyers to tell us their preferred email language, frequency and content so that we can deliver meaningful communication.” Emails are available in three languages – English, Spanish or French Canadian Copart’s updated Preference Center, visible within “Message Settings” when logged into a member account, includes integral new features for an enhanced vehicle searching, bidding and buying experience: • Option to select up to ten Copart locations for location-speciic auction reminder emails and special event emails • Opportunity to deine preferred vehicles, price ranges and intended purposes for customized vehicle promotion emails • Ability to self-identify buying needs for more personalized emails
27 ilter options available in the reports function, dealers can sort and customize which data is most important and relevant to their needs. Dealer feedback was the primary driver of design and implementation for AFC’s inventory dashboard. “Because we are connected with our customers’ needs, we know these tools will help streamline the inancing process and help our customers be as eficient and effective as possible,” said Money. AFC consistently releases updates to the AFCDealer® website to help streamline important business processes like title delivery, payments, and inancial reporting. The company also provides training, tools, and resources to help dealers learn and utilize these business solutions. AFC has been an advisor to independent automobile dealers for more than 30 years, and is committed to delivering affordable, comprehensive loorplan solutions. For information about AFC’s inventory inance solutions, visit www.AFCdealer.com.
Along with improvements to the Preference Center, Copart has made other signiicant technology advancements in the past year. In September 2016, the company launched a mobile-responsive version of its website, Copart.com, for a faster user experience. In April 2017, it announced the update of the Copart Mobile App, which now includes a license upload capability, language settings and a smart search tool. Most recently, in June 2017, it expanded its website language offerings from six to seven languages with the addition of Mandarin Chinese. “The Preference Center is just another testament to Copart’s vision: ‘To provide an unmatched experience, every day and everywhere, driven by our people, process and technology,’ ” said Rama Prasad, Chief Technology Oficer. To view the updated Preference Center and gain access to online auctions, become a Copart Member at Copart.com/Register.
Special Advertising Section
USED CAR NEWS
YOU CAN HAVE MORE CONTROL 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. 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 physical damage protection and program called Coverage Plus. es Coverage Plus gives you the control you’ve been searching for! Coverage Plus is a policy issued car, to ance the dealership for physical damage e you ey coverage. x the You can add your leased or ences f you buy-here, pay-here vehicles to
your 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 us at www.HelpingDealers.com.
January 15, 2018 • 13
2018 – The Year for Healthy Growth You’re starved. You order the large meat lovers. You only need 2 slices, but you eat the whole pizza. The next day is tough and you knew it would happen. Habits like these are unhealthy and can often lead to terrible consequences. Funding your buy-here, pay-here dealership is much the same. History suggests that leveraging the business too deeply through excessive borrowing can be unhealthy if not deadly. Dealers need to retain part of their portfolio to fund the business and protect for the unknown. The real estate industry taught us in 2008 that extending too much debt can be catastrophic. With high debt to equity ratios, the down turn in the economy caused one of the worse economic periods many of us will ever experience. Bloomberg, Equifax, and the Financial Times have all warned that automotive could be the next inancial crisis. There is something you can do – “Healthy Growth”. Just like the pizza example, take only what you need when it comes to funding your business. Find a capital provider that knows your business and can help you stay healthy.
SDA is the most experienced capital provider in the buy-here, pay-here industry and has tailored funding solutions for thousands of dealers. In fact, at SDA, the objective is to work with dealers to help them build wealth. “We work with our dealers to make sure they are in a program that ofers smart and healthy growth,” said Gary Page, CEO of SDA Inc. “In fact, our sales team is so good at crafting the right solution for our dealers – we lose very few dealers,” said Page. A major advantage is that SDA can support multiple capital solutions from income streams and shared payments to lines of credit – unlike most capital providers who specialize in “one size its all”. SDA takes a long-term approach to providing capital for our customers and as a result we have long term relationships with our dealers. For over 27 years, we have helped dealers optimize their operation for both proitability and “Healthy Growth”.
age insurance? Northland Auto Enterprises recently Coverage Plus
Do everything you can to
KEEP YOUR CUSTOMERS Getting to know your customers when they make their payments is key to developing a relationship. A recent industry survey stated that 65-70% of sales come from repeat customers. For over 27 years, SDA has provided BHPH dealers with capital to support “healthy growth”….and the dealers always manage their collections and
KEEP THE CUSTOMERS.
Find out why thousands of BHPH dealers trust SDA. Call 1-800-467-5172 www.SDAinc.net
Special Advertising Section
14 • January 15, 2018
USED CAR NEWS
The Right GPS Technology Means More Protection For Your Business Keeping track of your assets is vital to your business success. High-risk customers who stop making payments or disappear with your vehicle are the biggest threat to your profitability. By installing the right GPS technology in the cars you sell to subprime buyers, you can protect your assets and improve your cash flow. But be aware that not all GPS devices are created equal! GPS devices keep progressing and innovating. Read on to find out why using the latest technology from the right vendor is critical to your business. 1. Network technology matters Some devices use CDMA networks, an old technology which is deemed to start shutting down in 2019, meaning that some devices will eventually be without coverage, leaving dealers in the dark. Other devices, such as newer generation IMETRIK models, use reliable 3.5G
GSM networks, a technology which has no announced shutdown date. With loans that last longer and vehicles needing to be successfully repossessed and resold, it is important to choose devices with technology that will be around for a long time. 2. GPS technology matters A lot of progress has been made since 1978, when the first GPS satellites were launched. Devices built with newer GPS receivers not only receive signals from GPS satellites, but also from complementary systems such as GLONASS and Galileo. A greater number of available satellite signals means improved tracking precision and reliability, particularly in difficult geolocating conditions, for instance, in cities when part of the sky is obstructed by high-rise buildings. Additionally, lower-end GPS devices do not have
enough channels to process a large quantity of satellite signals. In contrast, IMETRIK 3.5G devices use the latest generation 72-channel receiver, allowing you to track your asset with greater precision, often to within 6 feet of its location, leading to faster and more efficient repossession of your vehicles. 3. Buy quality hardware Don’t settle for an inexpensive GPS device made with lower quality parts, as it may fail you when you need it the most. Opt for a superior quality GPS device, such as an IMETRIK model, engineered only with premium industrial-grade components. Allowing a broader operating temperature range, these GPS devices won’t let you down, no matter how extreme the temperature is. “The harsh New Mexico environment makes it almost impossible for any GPS unit to survive – that is, except for IMETRIK, which won hands-down in our rugged-
ness comparison.” says Ken Starr, President of Sunstar Capital in Albuquerque, NM. 4. Optimize your operational costs It’s impossible to keep up with each one of your assets on the road. You need a system that works for you and accumulates the data you need. Although lower-end GPS devices transmit their position to the server regularly, it is the server that decides whether an alert needs to be sent to you. This often creates significant delays between the event to be reported, such as a Geofence breach, and the alert you receive, and could lead to the potential loss of your asset. Conversely, IMETRIK devices use a powerful embedded processor, resulting in real-time processing of all
the information and allowing the device to send a notification as soon as it detects that a Geofence has been crossed. Other configurable alerts can be automatically enabled such as Power Loss and Automatic Rotational Daily Locate reporting. IMETRIK offers all of these features and many more. Installing one IMETRIK device takes only 15 minutes. With 3 models to choose from, each one with its own set of features and functionalities to suit your unique needs, IMETRIK will save you time and money by maximizing your vehicle tracking and repossession efficiency. To find out how IMETRIK’s GPS tracking solutions can help boost your dealership’s bottom line, call us today toll-free 1-866-276-5382.
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!
T N S R U O T C - R E EE T O N AY A N D R A 0 3 GU W ED O D N LU C IN
co . SA E D
• No-cost ($0) ADESA Assurance 30-day return guarantee automatically applied on all eligible upstream, off-lease and rental vehicles purchased from DealerBlock Prime.
• ADESA Assurance refund covers vehicle sale price and buy fee.
• Transportation costs also refunded when CarsArrive Network is used.
It’s the best time to try Prime.
© 2018 ADESA, INC.
Offer valid January 15, 2018–March 31, 2018. Vehicle must be returned in same condition as purchased within 30 days from purchase date. ADESA Assurance refund covers vehicle sale price and buy fee; transportation costs are only included if CarsArrive Network is used for transportation. CarsArrive Network must be selected at time of purchase to qualify for transportation refund. See terms and conditions for full details. ADESA Assurance program may be cancelled by ADESA at any time and without notice. Some loorplan providers do not provide inancing for CarsArrive transport. Contact Customer Connection at 888-526-7326 to conirm your loorplan provider’s eligibility. ADESA reserves the right to modify or cancel this promotional offer at any time.