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April 16, 2018

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Recalls See Decline By Ted Craig

The good news for the auto industry is that recalls are inally starting to decline. The number of units afected by recalls in 2017 reached the lowest level since 2013, said Neil Steinkamp, managing director at the Stout advisory irm, during a presentation to the Society of Automotive Analysts. There were no re-

paigns involved fewer than 10,000 units. The reason for any recall campaign is to get the problems ixed, Steinkamp said, and regulators are taking a longer look at this aspect. There were three recall campaigns that reached 100 percent remedied in 2017. However, one was a Mercedes recall of a single vehicle. Recall completion becomes much

States Look at Recalls RECALLS: The biggest issue facing the auto industry remains recalls to repair airbags, such as those with the Ford Fusion, above, but other problems are arising, such as recalls to fix repairs made in previous recalls. That is what happened with the Nissan Jukes, top right.

calls involving more than 1.5 million units last year. “What we’re looking at is a return to non-Takata levels,” Steinkamp said. The bad news is that as a percentage of all recalls, airbag recalls are increasing. Takata gets the most attention, but there have been many others. Steinkamp said the big recalls receive the headlines, but the small recalls add up and impact the industry. Just over half of all recall cam-

more challenging with older vehicles. “You’re doing outreach to people you’re not used to doing outreach to,” he said. The industry is still responding to the crisis of 2013-16, which saw the Takata and General Motors ignition switch recalls, Steinkamp said. But more needs to be done. One improvement is widening the methods of contacting drivers, said Richard Rosen, founder of Convergence Marketing.

Courts and lawmakers are pushing used-car dealers to start disclosing recalls. A California appeals court recently judged a woman could go forward with a lawsuit against CarMax Inc., claiming the company wasn’t transparent enough about the recall on an ’08 Elantra she purchased. CarMax plans to appeal to the state’s Supreme Court. George Hofer, an economist at the University of Richmond, said the worst case for CarMax is they have to be more speciic on the nature of each open recall on a vehicle, including its consequences. “My real concern is that we start going down a slippery slope where later, in subsequent cases, open recall vehicles are court-determined to be non-salable,” Hofer said. Meanwhile, New Jersey legislators are advancing a bill that re-

quires dealerships to notify buyers of recalls on used cars. Paula Frendel, executive director of the New Jersey Independent Automobile Dealers Association, said in a written statement that this bill provides signiicant new protections to consumers and the transparency they expect but also gives dealers that sell to the retail public protections from liability for the actions of others beyond their control and allows them to continue to operate proitably. Anthony Bush, who works with New Jersey IADA on legislative issues, agrees that it is a good bill and says, “a blanket rule that would bar sales of any vehicles with an open recall would negatively, and potentially unfairly, impact a dealer’s costs and inventory, without making the public any safer in many instances.”

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USED CAR NEWS

April 16, 2018 • 3

Cox Automotive Honors Auction General Manager Cox Automotive presented its annual Barbara Cox Woman of the Year Award to Ellie Johnson, general manager at Manheim Statesville. This is the first time in the history of the award that it has been given to a Cox Automotive team member. This honor is awarded to women who demonstrate business leadership and community advocacy, as well as a commitment to advancing the automotive industry. The award was presented by Cox Automotive President Sandy Schwartz during the Northwood University Dealer Education Award annual breakfast on March 24. The award is named after the late Barbara Cox, a Cox Automotive owner and the mother of chairman Jim Kennedy. Two of Barbara Cox’s grandsons, Henry ParryOkeden and Andrew ParryOkeden, were also there as Johnson received the award. Henry is a member of the Cox Enterprises Board of Directors and Andrew is a member of the Cox Automotive Australia advisory

board. “Ellie is a shining example of this award, our company, and all women that have built their careers in the auto industry,” Schwartz said. “In her 30+ years at Manheim, she has grown from working her family’s auctions to becoming a general manager. Additionally, Ellie’s involvement with professional organizations, civic groups and charitable organizations is an incredible display of giving back and serving your local communities as a professional in our company. All of us at Cox Automotive are so proud of Ellie and her accomplishments.” Johnson has a lifetime of experience in the auction profession, with her father being an auctioneer and founding his own auction facility. After earning an accounting degree and real estate broker’s license, Johnson joined her father’s business, which is now known as Manheim North Carolina. She served as general manager of Manheim North Carolina until 2016 when she

SHINING MOMENT: Ellie Johnson celebrates with Cox Automotive CEO Sandy Schwartz and Mollie Arnold, a Northwood University junior who won a $10,000 Barbara Cox scholarship.

was named general manager of Manheim Statesville. Johnson is a former president of the National Auto Auction Association and is a member of the Carolinas Independent Automobile Dealers Association. Among her many charitable endeavors, Johnson has her auctions sponsor local FHA and 4-H programs and annual

food and toy drives. In 2017, the auction gave back over $68,000 to various charity programs. “This is an incredible honor for myself, my team and Cox Automotive,” Johnson said. “I am so blessed to work for Cox Automotive. It’s a family owned business with the same values as the one my family started over

30 years ago. “Growing up and living in the auto industry my entire life, I have had the opportunity to work and interact with incredible individuals and that is what has kept me moving forward throughout my career. This award belongs to them as much as it does to me and I am thankful to everyone for it.”


4 • April 16, 2018

USED CAR NEWS

NEWS BRIEFS Manheim Partners with Shift Cox Automotive and Shift Technologies are launching a national strategic partnership, enabling the online vehicle retailer to utilize Manheim facilities and services to support its digital business. The relationship will help Shift expand operations with reduced capital investment and drive eicient launches in markets where Manheim has a presence across the country. To test drive the initial arrangement, Shift used Manheim San Diego for vehicle storage, reconditioning, imaging, inspections, detailing and more. As a result, Shift processed vehicles more quickly and established a strong foothold in the area. Shift now maintains an inventory of about 300 vehicles at Manheim San Diego. The company continues to operate its facilities in San Francisco and Los Angeles as it considers expansion into markets with Manheim facilities.

CarMax Retails Fewer Units CarMax Inc. reports that net sales and operating revenues increased 0.8 percent to $4.08 billion in the quarter ended Feb. 28. Used unit sales in comparable

stores declined 8 percent in the quarter. Total used unit sales fell 3.1 percent in the quarter. Total wholesale unit sales increased 8.9 percent in the quarter. CarMax Auto Finance income increased 21.9 percent to $101.1 million in the quarter. In other CarMax news, the company opened its irst store in the Greenville, N.C., area. The Greenville store is located in Winterville and has the capacity to stock approximately 200 used vehicles.

Interest Rates on New Cars Hit High Interest rates on new vehicle inance hit their highest level since 2009 in March, marking the second straight month of sharp rate increases. According to Edmunds, the annual percentage rate (APR) on new inanced vehicles averaged 5.7 percent in March — compared to an average of 5.2 percent in February and 5 percent in January. This compares to 5 percent in March 2017 and 4.4 percent in March 2013. Edmunds experts point to a significant decrease in zero-percent loans as a primary driver for this rise in the average.

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The percentage of zero-percent loans will drop to 7.4 percent in March compared to 11.4 percent in 2017, which Edmunds attributes to larger automakers shifting to diferent incentive structures to address slowing sales. Edmunds also points to a signiicant decrease in the number of loans in the 2 to 4 percent APR bracket and an increase in the 4 to 7 percent range as contributors to the spike in the average APR in March. The number of 2 to 4 percent loans accounted for 8.9 percent of the market, compared to 14.1 percent a year ago, and the percentage of 4 to 7 percent loans accounted for 34.5 percent of car loans compared to 27.6 percent last March, indicating that buyers are continuing to land in higher brackets than they previously would have.

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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

April 16, 2018 • 5

Court Rules on Overtime

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WASHINGTON (AP) – The Supreme Court has ruled that car dealerships’ service advisers, like car salesmen and mechanics, are exempt under federal law from overtime pay requirements. The court ruled 5-4 that service advisers, who greet customers and propose various repair services, are salespeople. The case afects more than 18,000 dealerships nationwide. Together, they employ more than 100,000 service advisers. The case the high court made its decision in involves a MercedesBenz dealership in Encino, Calif., and several current and former service advisers. Each side had a diferent interpretation of the Fair Labor Standards Act, which says that “any salesman ... primarily engaged in selling or servicing automobiles’’ doesn’t have to be paid overtime. The dealership argued that the deinition of salesman clearly includes service advisers, who have a range of job responsibilities from helping to diagnose mechanical problems to preparing price estimates for repairs. Service advisers had argued that they weren’t covered by the deinition. Justice Clarence Thomas wrote in a majority opinion that the “ordinary meaning of ‘salesman’ is someone who sells goods or services’’ and that service advisers “do preFor Cars, Trucks and Vans

cisely that.’’ In a dissent, Justice Ruth Bader Ginsburg wrote that because service advisers “neither sell nor repair automobiles’’ they should not be exempt from overtime payments. The issue came to the high court after the Department of Labor changed its interpretation of the Fair Labor Standards Act in 2011. For the three decades up to then, the department operated under the view that service advisers didn’t have to be paid overtime. The court’s decision was the second time the justices have ruled in the case. In 2016, following the death of Justice Antonin Scalia, an eightmember Supreme Court sidestepped the overtime question and told the appeals court to take another look at the case. After that, the appeals court once again ruled in favor of the service advisers. Both the National Automobile Dealers Association and the National Independent Automobile Dealers Association praised the decision. “The Court’s decision ratiies what has been an industry practice in dealerships for decades – a practice that had been satisfactory to both federal regulators and courts,” NIADA senior vice president of legal and government afairs Shaun Petersen said.

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USED CAR NEWS

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DETROIT (AP) – Bargain prices on 2- and 3-year-old vehicles fueled record sales of used cars, trucks and SUVs last year, a trend that is expected to continue because people can save thousands of dollars over buying new. Used vehicle sales hit 39.2 million vehicles in 2017, more than double the number of new automobiles sold, according to the Edmunds.com auto website. To be sure, Americans for years have bought more used cars than new, but a recent glut of well-equipped vehicles coming of leases is sending more people to the used market. That cut into new vehicle sales last year, helping to push them down 2 percent. And the trend is likely to continue because leasing remains around a near-record 30 percent of all U.S. new vehicle sales. That will provide an ample supply of used cars for at least three more years, said Ivan Drury, senior manager of industry analysis for Edmunds. “In almost every instance, that 3-year-old car is going to save you so much money it wouldn’t make any inancial sense” to choose new, Drury said. About 4 million vehicles are coming into the used market from leas-

es this year, many of them cars that can be bought cheaply because buyers are more interested in SUVs. On average, the buyer of a 3-yearold car can save around $14,000 over buying the same car new, according to Edmunds. New vehicle prices continue to rise to record levels, pushing some people out of the market and making of-lease vehicles even more attractive, Drury said. At the same time, the rate of increase for used cars is slowing due to abundant supply, so the gap between new and used prices is growing. The average new vehicle in 2012 sold for $30,803. By the end of 2017, that rose by nearly $4,400, according to Edmunds. During the same period, the average used auto price rose $2,784, to $19,462. The diference between new and used prices grew by almost $1,600, from $14,125 in 2012 to $15,714 last year. The spread between new and used is even more dramatic for a 3-year-old vehicle. Last year, 3-yearold autos sold for about $20,500. From 2012 to 2017, the gap between a 3-year-old vehicle and an average new one grew more than $3,500 to $13,877. Continued on page 8

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8 • April 16, 2018

USED CAR NEWS

IADA Hires New Director By Jeffrey Bellant

Phyllis Sartin is making the rounds at area auctions as she completes her irst quarter as executive director of the Tennessee Independent Automobile Dealers Association. Sartin replaces Darryl Noble, who left the association at the end of 2017 after 10 years as executive director. Sartin is founder and owner of Creative Marketing Automotive Products. She said she has also spent time in inancial services, advertising and automotive retail. Sartin said she has been spending a lot of time on the road, meeting dealers, attending auctions and recruiting new members. Noble said Sartin has been a board member in the past, as well as secretary, and has a lot of dealer customers through her company. “We just felt she was a good it for the association,” Noble said. Noble said he left because the association was at a point where it needed a full-time director. He had been working at the job part-time. Noble, who was a used-car dealer for three decades, now has two franchised RV dealerships and an

automotive dealer supply business. The Tennessee IADA started in 2001 with the help of the National Independent Automobile Dealers Association, a group of dealers and Noble. Noble served as president of the group in 2005-2006 and became director in 2007. Noble pointed to what he described as the “strongest curbstoning law in the country” as his biggest accomplishment. He said he traveled 1,600 miles on the road and lobbied for two years to get the bill passed. Noble is staying on as the legislative director and as a board member.

Bargains – from page 6 For Jonathan Bursevich, who lives near Fort Lauderdale, Fla., the spread between new and used was just too great to pass up. In December, he bought a well-equipped, mint condition gray 2015 Audi A4 from a dealership for about $23,000, a savings of at least $16,000 over the cost of a new one. The 25-year-old risk management broker checked prices on Google and found a new A4 to be “way out of my budget.” His parents always bought used cars, foregoing the latest features but saving thousands. So he checked and found an Audi-certiied used

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A4 with 46,000 miles on it for a little over half the price of a new one “which I thought was a fantastic value for the car.” The used Audi lacks some technology that’s on the new one, including a backup camera and a steering assist feature, Bursevich said. “If I don’t feel like I’m in the stone age and everything else works, then I would be more than happy to save money,” he said. The only reason buyers would go for a new vehicle is if the design is dramatically diferent or if it has new technology they want, Drury said.


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RETAIL MARKETS CALIFORNIA Mike Casey, general manager, Cal West Autos, San Leandro, Calif.: “This is our 37th year in business. We have one location. “We carry about 80 units. That’s typical for this time of the year. “We try to sell half of them each month. “We acquire them from the local auctions. We use Manheim San Francisco Bay and ADESA Golden Gate. “We’re a retail dealer, but we do some subprime and buy-here, pay-here. Subprime makes up 10 percent of our business. That’s typical. Buy-here, pay-here makes up another 10 percent. “We’ll sell cars ranging from $5,000 retail to $20,000. “Our bread-and-butter is a $10,000 car. “Average model-yearrange is 2012-13 cars down to 2008. I would say we’re mostly after the 7- to

10-year-old cars. “Mileage varies, but we try to stay under 100,000. We’re able to find what we’re looking for as far as mileage goes. But we’re looking for a well-maintained car more so than the mileage. “I think our inventory is a mix across the board. We’ve got a lot of trucks and SUVs (right now). I would say we try to keep an equal mix among cars, trucks and SUVs. “We have a good mix of both foreign and domestic cars, trucks and vans. However, we’re probably heavier into American trucks. “As far as reconditioning costs, I think you can add about 15 percent to every car. So if you add another 15 percent onto the cost of the car after we buy it would be average reconditioning costs. So on a $10,000 car, 15 percent would be $1,500. So maybe $1,000 to $1,500 might be average. “Reconditioning costs have been going up. Labor rates have gone way up. The

price of parts has gone up. “We do not have our own service shop. We send that all out. In the past, we have done our own service, but that requires supervision. “We have a website. We advertise with Cars.com, Carfax and with Craigslist. Craigslist works well. That’s our best source. “We do some community things. Our family has been involved with youth sports over the years. So our sponsorships have mostly been local schools and local youth sports organizations. “We recently sold a 2009 Chevrolet Tahoe hybrid. That had 125,705 miles. We sold it for $14,988. “We’re excited about 2018. I would liken it to the start of 2016, which was a good year for us. Last year seemed to be down from 2016. The tax season last year never materialized. We didn’t have a strong first quarter in 2017. “This year has started much stronger than last year, though.”

$

$

USED CAR NEWS

Compiled by Jeffrey Bellant

FLORIDA Steve Marbais, owner, Marbais Enterprises, Ocoee, Fla.: “I’ve been in business 30 years. I have just one location. (I’m also a) Certified Master Dealer and I keep it current. “I keep about 30 vehicles on my lot right now. That’s typical of what I had this time last year. “I acquire our vehicles from the auctions. I use Manheim Central Florida and Manheim Orlando. “Once and a while we will wholesale at auctions. “We sell about 15 vehicles per month on average. That’s typical. “We’re not seeing tax season spikes like we used to. Tax sales were more sporadic this year. “We are a buy-here, payhere business. It makes up 90 percent. That’s always been the case. “Our average down payment is $800. Our average term length is two years. “We do not use starter-

interrupt or GPS devices. We’ve never used them. “Our average retail price on the lot is $7,995. “The average model year is probably 2008 and back. The average mileage is 120,000 to 130,000 miles. “We sell cars and SUVs. That mix is probably halfand-half. “I don’t do any trucks, because of the cost (for buyhere, pay-here). “It’s mostly domestics. “Average cost of reconditioning is about $500. That’s hasn’t really changed in recent years. “I have a small shop that does that work. We do outside work as well. That business is all right. We have three bays and one technician. “We have a website. We usually sponsor Little League or the high school football program. “We just sold a 2005 GMC Envoy. That had 135,000 miles. We got $7,995.”

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12 • April 16, 2018

USED CAR NEWS

WHOLESALE MARKETS Compiled by Jeffrey Bellant FLORIDA Billie Jo Graham, general manager, Orlando Auto Auction, Orlando, Fla.: “We have two lanes and we are running both of them. “The auction has been in business for 42 years. It is Orlando’s original night sale. “The new owner, Joe Barron, took over in 2013. I’ve been here since 2016. “We’ve had a phenomenal start to the year, especially with tax time. “We’re running about 350 units and selling about 65 (percent), which is pretty high for us. It’s also high for Florida. You normally get a lower percentage sale. “We are probably on track with last year for dealer consignment volume – we’re running about the same amount of cars – but our sold (percentage) is up. “For tax season, we noticed the irst inlux of buyers starting with the last sale in January into the irst sale of February. “We’re all dealer consignment. That is about 70 per-

cent new-car trades with the other 30 percent mostly independent dealer cars. We have one repo company out of Texas that runs, but the volume isn’t (a lot). “We do about 10 (in-ops a week.) We sell those of the video screen during the sale. “But we’ve also had a lot of changes. We had a U.S. marshal’s sale in February, which always brings a lot of business. It’s usually a killer sale for us. “We also just got a GSA sale and our irst sale (was scheduled) for this month. The GSA will run once a month, the second Tuesday of every month. “As far as our U.S. Marshal’s sale, we have that about once a quarter. But that’s more for a specialized piece. For example, we had a custom chopper bike. It’s just a whole diferent sale because it’s the seized vehicles. “It luctuates between 10 and 15 cars, which is why we wait to have it quarterly. We’ll have Ferraris, Lam-

borghinis and Toyota Camrys. I think people come to see what these vehicles will bring. “We’ve also never had simulcast before and we’re getting that and we never had a real website. We’ve got that. “Our average price on the block was about $3,500 to $4,000 on the average car, but we added a Mercedes dealership and we’ve increased that to about $5,500. We can sell a $60,000 Mercedes trade or a $500 (inop). “In 2017, we crushed 2016’s numbers and this year we are crushing 2017. We’re up huge.”

MINNESOTA Rob R. Thompson, owner, Mid-State Auto Auction, New York Mills, Minn.: “The weather hasn’t been very good. It was a brutal March and the start of April hasn’t been good. It’s been cold and snowy. The whole

winter wasn’t snowy but March has been. “But the sales percentages have been super high, in the 70-percent range. They are similar or maybe even a little ahead of last year. If the weather has afected anything, it’s in not getting as many cars as we normally would get. “If you talk to a lot of dealers, they say business is soso, but they’re here buying pretty actively on Fridays. The market’s been good. “We run about 350 to 470 cars per sale. We sell about 220 cars a week. But through March, we’re about 182 cars ahead of last year. We have four lanes and we’re actively running three. “For tax season, 10 years ago you’d have a frenzy-type of atmosphere and that’s been of. But at the end of the day, you’re still selling the cars. The end results are still good. I think it’s spread out. Our November and December was up from the previous year, so I think a lot of guys pre-bought.

“We get 180 to 240 dealers in the lanes. “Our volumes are probably 85 percent dealer-consignment and 15 percent leetlease. That’s comparable to last year. “On the leet-lease side, we get some from smaller leasing companies. We get some from United Auto Credit and Union Leasing. The numbers aren’t huge but they are high-percentage sellers. “In our regular weekly sale, the average price in the lanes is about $5,800. It’s probably gone up a little bit from last year, maybe a couple of hundred dollars. “We also have a GSA sale. We have one lined up April 20. As we get into May, June and July, those numbers will be 100-plus. But for that early sale, I would guess there would only be about 50. Those will be cars, trucks and vans – pretty much anything they have. They have some big trucks and buses, but it’s predominately trucks, cars and vans, with some SUVs, too.”

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USED CAR NEWS

April 16, 2018 • 13

DISCONNECTED JOTTINGS FROM “The roots of education are bitter but the fruit is very sweet.” Aristotle came up with that about 400 BC. I’m sure that it referred to students’ feelings about being schooled – I, for one, didn’t enjoy every aspect of education. It depended greatly on the teachers, as to how attractive a particular subject may have been or how memorable the work became. But my school days fueled a curiosity that has lasted a lifetime, much of it based on disciplines learned while still an early teenager. I think the quote above also now applies to those responsible for education – not just the teachers but also those who fund the whole process including pay, facilities, textbooks and supporting social activities that promote mindgrowth and civic responsibility. The bitterness here refers to the cost. I understand that the returns are not immediate but a well-educated populace ensures our global competitiveness for well into the fu-

TONY MOORBY

ture. That competition is getting tougher by the year and to give education the short straw today will come home to roost to pay for out-of-work families forming lines for food stamps and all the other welfare obligations we will have to bear by then. I’ve quoted Derek Bok of Harvard University before; “If you think education is expensive, try ignorance.” It strikes me that the Governor of Oklahoma, Mary Fallin, is missing the point regarding teachers, likening them to teenagers wanting a better car. It’s either snooty or stupid to make comments like that when she’s had her university education and is now earning in excess of $132,000 a year. It smacks of ‘pull the ladder up, Jack. I’m OK.’ A great many schools in Oklahoma are on a four-day week because they can’t afford to turn the lights on or pay the teachers for the fifth. The students share torn and dog-eared textbooks – two students to one text book in classes of fifty or more kids.

I’m sure there are third-world countries that do better than this. How can kids take their education seriously when the state obviously doesn’t? Social and sports activities probably turn into groups of unfettered children, getting up to who knows what. What an unadulterated waste! Teachers who are lower paid than in all their neighboring states are moving out – no surprise there. Education funding, when adjusted for inflation, had been reduced by almost 30 percent, per student in the last ten years. Here’s an irony for you; Fallin holds a Bachelor of Science degree in human and environmental sciences, family relations and child development from Oklahoma State University. Maybe she wasn’t paying attention at the time or maybe her education wasn’t worth a flip! As I write, the Oklahoma Senate is voting on a tax hike to accommodate education funding – the teachers want to work up to a $10,000 raise over the next three years.

That might just help them make another car payment! Unlike when I was growing up, when money for health spending, education and the like, were held separately and paid for by our parents (theirs being paid for by their parents) all this money goes into general funds and accountability goes out the window. Meanwhile, the state gave hundreds of millions of dollars in subsidies to energy companies who are now struggling in competitive markets.

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 • IARA Circle of Excellence

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

C R O S S WO R D By Myles Mellor

Across 1. Mariner, for one 5. Honda model 9. Braking safety feature, abbr. 10. Buick passenger car, originally produced in the 50s 13. It comes of an assembly line 14. Former luxury Buick 18. Cars taken back from customers 19. Not pre-owned 20. R and B singer, Green 21. Road charges 22. Buick SUV 23. Total up 25. Cadillac model 27. Ford’s in-vehicle communication system

29. Acadia makers 31. Price ___ 34. Snow driving needs 36. Lincoln ___car 37. Government levy 39. Hot or cold drink 41. Type of street, 2 words 43. Tire adjustment 44. Operate 46. Aston Martin series 47. Preix with dynamic 48. Subcompact Honda 49. Abbreviation for a dollar price

Down 1. Ghibli makers 2. Piece of sunshine 3. Made in ____ 4. Talk, talk, talk

I wonder about attracting companies to towns with tax breaks and subsidies to the tune of billions. Nashville is trying to attract Google and Amazon. Our infrastructure can’t handle who’s already here! We gave Dell Computers an unmitigated fortune before they hightailed it out of town without the city getting anything back in employment terms or well-paid residents. Maybe cities should redirect those funds to ease poverty and increase education funding. That would be sweet!

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14 • April 16, 2018

USED CAR NEWS

Westlake Grows in Role as Full Service Provider (Todd Larufa is vice president of Westlake ALPS at Westlake Financial Services. Westlake currently has ownership and is servicing the Pelican Financial Services portfolio.)

ety of reasons, and we’re going to continue seeing that throughout 2018. What sets us apart, however, is that we’ve been able to diversify our portfolio credit score mix. Westlake is now a true full-spectrum lender, which in turn reduces the volatility in our portfolio. Changes in the economy tend to afect lower tier FICO customers; Westlake’s diversiication protects us from changes in the market. Our average credit score is now about 615.

lot of large banks and other creditors were exiting the market completely. This created an enormous opportunity for subprime auto

Companies continued paying the same for a consumer who was a 550 in 2016 as a consumer that was a 550 in 2011. But we know that consumer is not the same. Performance started to deteriorate every year and many companies didn’t adjust for that. In addition, you have rising interest rates and lower auction returns, which are creating challenges of their own.

When a business has only one product, the only way to grow once they reach saturation is to loosen up, but that tends to be too risky.

UCN: What can you tell me about Westlake Portfolio Management? Larufa: Westlake established a new company, Westlake Portfolio Management that will focus solely on third party servicing. Westlake Portfolio Management will simply service the portfolio, it won’t acquire or purchase the portfolio. The portfolio is still owned and managed by the original holder. We saw this as an opportunity that complemented ALPS’ UCN: Are inance line of products. We have the companies still ability to purchase the port- chasing after cusfolio in the future if the orig- tomers? inator has a desire to sell. Larufa: From 2009-2010 we saw UCN: How is the inance a large group of market these days? Is consumers who were 650there an auto inance bub- plus most of their lives drop ble or is that just hype? into the subprime category. Larufa: There are still This caused a large increase companies and portfolios in the subprime consumer that are struggling for a vari- base. At the same time, a

lenders. Those consumers who dropped into the subprime category performed very well, mainly because they weren’t really subprime consumers.

UCN: How is Westlake able to weather this market? Larufa: We’ve seen this before. Also, as I said, we’re a full-spectrum lender. We continue to be innovative and creative about how we generate business. When a business has only one product, the only way to grow once they reach satu-

ration is to loosen up, but that tends to be too risky. We understand that and that’s why we look for growth in diferent asset classes, different products. UCN: What impact does technology have on your business? Larufa: Technology gives us a competitive advantage. (Sister company) NowCom has been able to support us in many ways, from creating proprietary collection software to data storage. UCN: How can you help dealers? Larufa: Westlake ALPS can help dealers with bulk purchasing and revolving credit lines. Unlike other companies, our experience helps us understand their business model. Westlake ALPS credit lines are speciically tailored for the subprime market. Due to our longevity and stability in the market we can ofer really good rates. This is one of ALPS’ biggest initiatives for 2018.

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Used Car News 04/16/2018  
Used Car News 04/16/2018