Used Car News 10/01/2018

UsedCarNews.com

October 1, 2018

Improved Used Car Operations Boost Prices

KEEP ON TRUCKING: AutoNation Inc. CEO Mike Jackson prepares to move on to his next phase. The man who has been behind the wheel at the nation’s largest auto retailer will remain in his current position as the company searches for a new CEO. Jackson also recently extended his contract as the company’s executive chairman.

By Ted Craig

Rush - Dated Material

Wholesale prices were supposed to face a steep decline this year as the number of of-lease vehicles climbed.

The extra inventory entered the system as expected. Auction volume in August for units up to ive years old grew by 13.8 percent monthover-month and 4.5 percent yearover-year, according to J.D. Power However, instead of collapsing prices, most measures of wholesale values report high, even historic, readings.

So what happened?

There are several reasons, including strong consumer demand and the relief provided by last year’s hurricanes that wiped out hundreds of thousands of vehicles.

But one underappreciated reason is the investment large dealer groups are making in their usedcar operations, including opening standalone used-car superstores.

Sonic Automotive Inc. has its EchoPark brand.

The company also expanded its used-car capabilities by buying Driversselect, a large independent operation in Dallas.

AutoNation Inc. has AutoNation

USA. This means retiring CEO Mike Jackson, who started his career by closing AutoNation’s usedcar stores, ends his tenure by building brand-new ones.

Penske Automotive Group is rolling out standalone stores while Group 1 Automotive Inc. created a new marketing segment for older used cars.

Consumers are driving this investment, said Anil Goyal, Black Book’s executive vice president of operations.

Goyal said consumers are willing to drive used cars today due to improved dependability and because

new vehicles have grown increasingly expensive.

Jonathan Banks, vice president of vehicle valuations and analytics for J.D. Power, said dealers are also making data-driven purchases. This means they are willing to spend on cars at auction because they know buyers will pay for them.

Dealers aren’t the only ones analyzing more data. Fleet owners, such as rental car companies, are looking at the numbers and inding cost beneits to stocking cars that sell in the retail market.

This means dealers have access to more salable units than ever before.

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USED CAR NEWS

October 1, 2018 • 3

Today’s Tech Provides Additional Comfort, Safety There’s a lot of tech in luxury vehicles and more on the way.

Historically, the latest innovations in vehicle technology debut on high-end luxury vehicles. Developing new features is an expensive endeavor, and usually only wealthy shoppers are willing to pay for them.

Features such as a navigation system, stability control and even traic-adaptive cruise control were once the domain of high-priced cars, but now they are commonplace on even budget models.

Edmunds recently provided an overview of the newest tech that in just a few years will be moving from the luxury lots to the used-car lots.

(ALMOST) AUTOMATED DRIVING

Automated driving is a hot topic in the car business, with automakers racing to be the irst to bring a selfdriving vehicle to market.

But there’s a long way to go until the concept of a true self-driving car is inally realized.

Despite what some Tesla owners seem to think, the carmaker’s Autopilot system is not a substitute for an alert driver. The person at the wheel must remain hands on and eyes up. But it is one of the better-driving automation systems available, and it’s on the Tesla’s lowestpriced vehicle, the Model 3.

In a few of its vehicles, such as S-Class models, Mercedes-Benz has a similar “partial driving automation

system,” to use the latest definition from the Society of Automotive Engineers. But the Mercedes system isn’t as well-tuned for real-world usability. Its highest level of automation, Active Distance Assist Distronic, slows the car to uncomfortably low speeds when approaching curves or toll booths and also limits the speed to the posted limit. Tesla has its issues, too. In Autopilot mode, it will occasionally stray if the lane markers are faded, and that can be alarming at 65 mph. Both do a better job in dense stop-and-go traic, where they are able to stay in their lanes and maintain space between themselves and the car they’re following.

Cadillac’s Super Cruise system is more advanced and better suited for highway use, using mapping and GPS data to “geofence” its operation. That may sound limiting, but in conjunction with Super Cruise’s myriad sensors and cameras, mapping makes the system more sophisticated and less susceptible to misuse. For Super Cruise to function hands-free, you need to be on one of the 130,000 miles of mapped freeways in the U.S. and keep an eye on the road. And, yes, there are sensors in the cabin to ensure you’re doing that.

NEW SAFETY FEATURES

Now that many cars can automatically slow to match the pace of traic and stay in their lanes, look for more additional safety features to

arrive in some luxury cars.

Top-of-the-line Mercedes and Lexus vehicles have automatic steering avoidance, which means they can automatically swerve to avoid objects and pedestrians in their paths.

Also available on these vehicles is emergency stop assistance, which senses if the driver has become unresponsive.

If that happens, the system can slow the vehicle to a stop within its lane, activate the hazard lights and summon emergency services.

Another Mercedes technology, Pre-Safe Sound, emits a speciic sound inside the cabin when a collision is imminent. Mercedes says the sound is designed to trigger a natural relex in your ear canals that helps shut out the loud impact and airbag deployment noises in a crash.

COMFORT, CONVENIENCE FEATURES

Technology advances aren’t limited to driving automation and safety. Many innovations in luxury cars pertain to passenger convenience and pampering.

Some current Tesla, BMW and forthcoming Audi models will squeeze themselves into and out of tight parking spaces remotely -- you don’t even need to be in the car.

Magic Body Control from Mercedes-Benz scans the road ahead in order to react to bumps and ruts. In a fraction of a second, the system executes a speciic suspen-

sion motion to counteract a road law in an efort to ride over it as though it were smooth and lat. Audi says it will have a similar system on the forthcoming 2019 A8 sedan.

Nearly all of today’s luxury sedans ofer massaging seats to alleviate fatigue, as well as heating and cooling.

Mercedes takes this a step further with its Energizing Comfort system, which combines massage with climate control, air fragrancing, lighting and audio. The resulting programs, according to the automaker, can help encourage relaxation or invigoration.

Remote control through telematics is also gaining in popularity. For example, if you’re in a store buying bulky items, the seats in the

2018 Land Rover Discovery can be folded remotely to make room while you’re still at the checkout stand.

Premium audio options are easy to ind, but audiophile-level systems remain exclusive to luxury vehicles.

For about $2,000, a powerful 23-speaker Mark Levinson surround-sound system can be added to a Lexus LS sedan. That represents one of the more desirable, yet afordable, choices. At the upper end of the price spectrum, you can spend $7,500 for a Burmester audio upgrade in a Porsche Panamera and more than $9,000 for the Bespoke audio package in a Rolls-Royce Ghost Series II. – The Associated Press

Manufacturers Recall Trucks, Hybrids, Bikes Ford Motor Co. is recalling 1,619,112 Ford F-150 Regular Cab and SuperCrew Cab vehicles, model years 2015-18.

If a front seat belt pretensioner deploys as the result of a crash, the sparks may ignite materials such as carpeting or insulation within the B-pillar area.

Ford will notify owners, and dealers will remove the B-pillar insulation material and wiring harness tape, and install heat resistant tape, free of charge.

The recall was expected to begin Sept. 24.

Ford’s number for this re-

call is 18S27.

In other recall news, Toyota Motor Engineering & Manufacturing is recalling 192,347 Toyota Prius vehicles, model years 2016-18.

A portion of the engine wire harness connected to the hybrid Power Control Unit (PCU), could contact the cover at this connection and wear, causing an electrical short circuit.

Toyota will notify owners, and dealers will inspect the engine wire harness assembly and replace it if damage is found.

A protective sleeve or pro-

tective tape will be included to prevent any future damage. These repairs will be performed free of charge.

The recall was expected to begin Sept. 28.

Toyota’s number for this recall is J0T. Toyota is also recalling 19,354 Toyota Avalon vehicles, model year 2012.

During a vehicle repair, the seat belt inner buckles may have been replaced with parts that may incorrectly tell the air bag management system that the seat belt is always buckled.

Toyota will notify owners, and dealers will test the seat belt assembly to verify that it is properly detecting being unbuckled, replacing the inner seat belt assembly as necessary, free of charge.

The recall was expected to begin Sept. 17. Toyota’s number for this recall is J0S. Also, Chrysler (is recalling 1,149,237 2015-17 Ram 1500, 2500, and 3500 pickup trucks equipped with a power locking tailgate and either a 5-foot 7-inch or 6-foot 4-inch bed.

The tailgate actuator limiter tab may fracture and cause the tailgate to unlatch and open while driving.

Chrysler will notify owners, and dealers will repair the vehicle, free of charge.

The recall was expected to begin Sept. 14.

Chrysler’s number for this recall is U74.

Finally, Polaris Industries, Inc. is recalling 10,658 201719 Polaris Slingshot motorcycles.

In the event of a crash, the seatbelt retractor on the side opposite of the impact may separate.

4 • October 1, 2018

USED CAR NEWS

NEWS BRIEFS Regional Acceptance Corp. Taps Dealertrack

reCar dealers to procure vehicle telematics units, and will be integrating all of the PassTime telematics services within its dealer focused vehicle administration platform for easy vehicle speciic applications.

Regional Acceptance Corp. has chosen Dealertrack Accelerated Title to create eiciencies in their payof and title release process with dealers accepting cars on trade.

With Dealertrack Accelerated Title, RAC can expedite the vehicle Auto Finance Near Top of Millennial Debt Burden payof process electronically.

Auto inance is the second largest The new system ofers more accurate payof quotes and payments via debt burden for millennials.

Auto inance debt was the biggest a 3-day ACH process. debt burden in 15 metropolitan areas DriveTime Moves into Bigger Facility and averaged about 33 percent of a DriveTime announced the reloca- millennial’s average total debt baltion of its Tryon, N.C., dealership. ances.

Student loans were the No. 1 burTyron is in the Charlotte metro area.

The new facility has 9,646 square den. feet of space and approximately 200 parking spaces dedicated to vehicles and customers. The new location Copart Takes Loss is approximately 1.5 miles from the On Hurricane Costs Copart Inc. reported a pre-tax loss former Tryon DriveTime dealerof $12.8 million for its latest iscal ship. year, which ended July 31.

The operating results were adHyreCar Partners with PassTime HyreCar has announced a strate- versely afected by abnormal costs of $79.7 million incurred as a result gic partnership with PassTime.

This partnership ofers advanced of Hurricane Harvey.

These costs included temporary vehicle asset tracking and management to car dealers and leet owners storage facilities; premiums for subhaulers; labor costs incurred from who use the HyreCar platform.

PassTime has set up a special- overtime; travel and lodging due to order portal for DriveItAway - Hy- the reassignment of employees to

the afected region; and equipment lease expenses to handle the increased volume, as well as cost of vehicle sales. These costs exceeded the associated revenues of $66.9 million.

DealShield Expands Options DealShield’s DS360 Return Guarantee now ofers dealers a 30-day return option. Clients that subscribe to DealShield can choose to take a full month and up to 500 miles to ensure that their purchase meets their expectations. This optional upgrade from the existing 21-day guarantee will further help them reduce recon costs, eliminate costly mistakes, redeploy capital faster and gain greater peace of mind. DealShield, which has covered 1.3 million vehicles to date, is available at over 100 auction locations in the continental U.S. With the DS360 guarantee, dealers can purchase a vehicle at a participating auction, and if it doesn’t meet their expectations, return it to any location in the DealShield network for a full refund.

for business development consulting.

Mike Pedersen started Lake Charles Auto Auction in 1991 as a two-lane night sale, catering to independent dealers in the area. Today the operation is run by Mike’s son, Matt, who purchased the auction from his father in 2012.

LCAA expanded the facility in 2015 to a four-lane auction. LCAA is now about to complete a $2 million renovation to the main oice building and additional dealer parking.

Dei Solutions Incorporates Black Book Values Black Book announced its historyadjusted valuations (HAV) data and resources will be integrated into an interface with Dei Solutions.

History-adjusted valuations are a VIN-speciic, analytics-driven resource that delivers Black Book’s most precise vehicle valuations.

Auction Signs with Consulting Firm Lake Charles Auto Auction in Louisiana has partnered with Auction Management Solutions, Inc. (AMS)

PAGE 14

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USED CAR NEWS

October 1, 2018 • 5

Muscle Cars Fail to Draw Millennial Shoppers DETROIT (AP) – Sales of new American muscle cars are falling, raising questions in Detroit and elsewhere about whether a nostalgic, high-horsepower cruising culture that dates to before the 1950s is in peril.

Part of the drop can be blamed on the shift from cars to SUVs that began more than a decade ago, but there are demographic factors that signal a decline.

Baby boomers, who buy many of the muscle cars, are getting older.

Muscle car fans consider the Ford Mustang, Chevrolet Camaro and Corvette, and the Dodge Challenger and Charger to be the mainstays of Detroit performance cars. But their combined sales fell 7 percent in 2016, 11 percent last year, and are down almost 10 percent for the irst half of 2018, according to numbers provided by Kelley Blue Book.

“They just don’t have the same appeal that they did previously,” said Jef Schuster, a senior vice president at the forecasting irm LMC

Automotive.

“Big, loud engines and noisy V8s, it just doesn’t draw the same attention and I think interest with the younger crowd.”

To be sure, people still buy a lot of the cars.

The automakers sold nearly 328,000 combined last year.

Yet U.S. sales of the iconic

“They just don’t have the same appeal that they did previously,” – Jeff Schuster Mustang, which leads the segment in 2018, fell 13 percent in 2016, almost 23 percent last year and 5 percent during the irst half of this year. Sports car sales, including those from foreign brands, also have dropped during the past two years.

Most muscle cars are owned by baby boomers, roughly 74 million people who were born from 1946 through 1964.

But the youngest of the boomers are in their mid50s now, and many are past their peak earning years and don’t have the money for a third car to go cruising.

As the generation ages and enters retirement years, they’ll buy fewer new vehicles and fewer muscle cars will be sold.

“I can see that, but it takes time,” says Bryan Hamilton, car show chairman for Shoals Mustangs, a pony car club in the Muscle Shoals and Florence, Alabama, area. Although membership in the club is stable at around 40, most members are boomers, he says.

As they age, interest in the cars could wane, he says.

While many have restored Mustangs from the 1960s, other members have newer versions.

Hamilton also says there

are some younger people in another classic car club he’s in who are buying newer cars. Shoals Mustangs, he says, reaches out to local high school auto technician programs, showing of cars and giving some students new tools to keep interest

going.

There’s also the point of view that Detroit iron will rise again as automakers roll out new versions of the cars, most of which are several years past their introductory dates.

Continued on page 8

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6 • October 1, 2018

USED CAR NEWS

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A Rhode Island woman has been charged with allegedly using forged business checks, stealing as much as $400,000 from a used-car dealership where she was employed as an oice manager and bookkeeper.

Michelle Saritelli is charged with bank fraud and aggravated identity theft. It is alleged that Saritelli employed several schemes to defraud the owners of Stamas Auto and Truck Center in Cranston.

This isn’t the irst time Saritelli has faced these kind of charges.

According to court documents, she was convicted in Rhode Island State Court in May 2004 on charges that she embezzled approximately $30,000 from a Johnston auto dealership.

This time, the owners of Stamas Auto were notiied that their bank accounts had been frozen. An internal review of the accounts by the business owners determined that several check ledgers were missing, funds were unaccounted for, and that numerous checks had been forged and/or fraudulently cashed.

The owners notiied Cranston Police detectives who sought the assistance of the FBI. Most of the missing bank ledgers were located during a court-autho-

rized search of Saritelli’s house on June 7.

Saritelli was employed at Stamas Auto Center from April 2008 to October 2018. A forensic audit conducted by the FBI determined that for several years, she allegedly wrote, signed, and cashed and/or deposited Stamas Auto Center nonpayroll checks into her own personal bank accounts; on a weekly basis pocketed substantial portions of checks written and cashed intended for the dealership’s petty cash fund; provided fraudulent checks to her husband for auto repair services and parts sales not provided; and stole portions of cash payments made by customers to Stamas Auto Center.

The forensic audit revealed hundreds of bank transactions of cash deposits and withdrawals from Saritelli’s personal bank accounts that often coincided with the issuance of fraudulent Stamas Auto Center business checks and unaccounted for cash. The majority of cash withdrawals from Saritelli’s accounts were made from ATMs at banks located near Saritelli’s South Kingstown residence and at casinos in Newport, Lincoln, and at Foxwoods and Mohegan Sun.

Feds Bust Sites Selling Fake Info

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The operators of websites that sold fake documents used to facilitate identity theft and other frauds have agreed to permanently shut down their businesses as part of separate settlements with the Federal Trade Commission.

In separate cases iled by the FTC, the Commission alleged that Katrina Moore, Steven Simmons, and George Jiri Strnad II and their ailiated companies operated websites that sold customers a variety of fake inancial and other documents – such as pay stubs, income tax forms, and medical statements – which can be used to facilitate identity theft,

tax fraud, and other crimes.

The Commission noted in all three complaints that fake inancial and identiication documents can be used to commit identity theft and loan fraud. Identity thieves can use fake documents to apply for credit cards along with stolen personal information. When an identity thief fails to pay the credit card bill, the victim’s credit sufers.

The sites ofered by the defendants claimed that the fake documents were for “novelty” and “entertainment” purposes but failed to clearly and prominently mark the documents as such.

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8 • October 18, 2018

USED CAR NEWS

Muscle Cars - from page 5

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Experts say newly redesigned cars are important in a segment that values looks and performance.

The big question is whether millennials, now 22 to 37, will be interested in a rumbling performance car.

Steve Beahm, head of Dodge and other passenger car brands for Fiat Chrysler, says that by creating new versions of the Challenger and Charger such as the 800-plus horsepower Demon, the company has been able to keep older models fresh and gain interest among younger people.

Charger sales are down 4 percent so far this year but Challenger sales are up by a like amount.

“Our age demographics are not growing,”’ Beahm said. “We’re bringing in some of the younger people, in the 30-35 range.”

Ford has done similar new variations with the Mustang, rolling out a high-horsepower Cobra Jet drag strip version earlier this month.

It’s also selling the car overseas now, which has boosted sales numbers.

The shift to SUVs should actually help muscle cars as automakers, namely Fiat Chrysler and Ford, stop selling small, midsize and even larger cars, said Kelley Blue Book

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Executive Publisher Karl Brauer.

SUVs don’t handle as well as cars and aren’t as much fun to drive, said Brauer.

So those looking for a lower center of gravity will select the muscle cars, he said.

Millennials weren’t expected to buy new vehicles when they were younger, but now are buying as they age and move to suburbs, Brauer said.

Schuster said the risk is low, but it’s still possible, that the muscle car segment could be dying.

It won’t happen within the next five years, but after that, he said the risk rises.

“You’re losing a market unless you do something with the vehicle that appeals more to a younger buyer,’’ he said.

Kay Rhame, car show director for the Red River Classic Mustang Club in Bossier City, Louisiana, said the popularity of the Mustang is proved by the fact that Ford is shedding all passenger cars except the Mustang.

She doesn’t see a decline because she and her husband are spotting more new Mustangs in their area every day.

“This is a culture, not just a car,’’ she said. “I really don’t see them going away.’’

*

218WFIP1

NextGear Capital and Cox Automotive donated a Chevy Equinox to Jasper, Alabama’s local American Red Cross chapter on behalf of Randy Crump of Friendly Auto Sales.

As the 2018 National Quality Dealer, Crump was recognized at the National Independent Automobile Dealers Association (NIADA) Convention in June.

The award honors dealer nominees representing their state associations from across the country.

The National Quality Dealer has come to embody all that it means to be a dealer committed to quality, excellence, outstanding customer service, and making their community a better place.

“Supporting my community and local businesses is something I’ve always done,” said Crump.

“I’m honored to be able to further support the community through an emergency response vehicle that will serve as an invaluable resource for the American Red Cross in their local disaster relief mission.”

The Chevy Equinox will be the sixth emergency vehicle donated to the American Red Cross through

a Cox Automotive company. Since 2015, Cox Automotive has donated more than $750,000 to the American Red Cross in support of disaster relief.

Each year, the American Red Cross responds to nearly 64,000 disasters around the country - from home fires and tornadoes to severe winter weather, hurricanes and floods.

“Randy and his team embody what it means to be true servants in their community,” said Lori Kahre, Cox Automotive’s director of industry events and trade shows.

“It’s an honor for Cox Automotive and NextGear Capital to donate this vehicle to the American Red Cross on behalf of Randy and his team to celebrate the work they’ve done and will continue to do in their community.”

This is the sixth emergency vehicle donated to the American Red Cross through Cox Automotive.

In addition to numerous types of community service, Crump closes the dealership on Wednesdays, so his employees can have family time during the week.

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10 • October 1, 2018

USED CAR NEWS

Carvana Moves into NYC Carvana Co. has launched assoon-as-next-day vehicle delivery in New York City.

To celebrate entering its largest market to date, Carvana maximized its marketing presence in Manhattan with a one-day integrated campaign to tell New Yorkers all about the new way to buy a car.

“New York City is the largest market we’ve launched to date, so it’s itting we give it our largest celebration,” said Ernie Garcia, Carvana’s founder and CEO. Carvana is literally parading its services through New York with a caravan of ive signature Carvana car haulers carrying vehicles.

Three of the haulers feature vehicles prepped for NYC-style delivery in gigantic takeout delivery bags, emphasizing that you can now order a car online and have it delivered to your doorstep, just like everything else in New York.

The parade crossed the Manhattan Bridge from Brooklyn and tour through the city, passing signature areas like Soho, Columbus Circle, Midtown and Washington Square Park.

Throughout the day, more than 250 digital on-street LinkNYC units displayed Carvana advertising along the parade route, as well as

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The tradename “Subaru Motors Finance” and the Subaru logo are owned / licensed by Subaru of America, Inc. and are licensed to JPMorgan Chase Bank, N.A. (“Chase”). Retail/Loan and lease accounts are owned by Chase.

2

The Jaguar word mark, the Jaguar logo, and Jaguar Financial Group are trademarks of Jaguar Land Rover Limited and any use by JPMorgan Chase Bank, N.A. (“Chase”) is under license. The Land Rover word mark, the Land Rover and Oval logo and Land Rover Financial Group are trademarks of Jaguar Land Rover Limited and any use by Chase is under license. Retail/Loan and lease accounts are owned by Chase.

3

The tradename "Mazda Capital Services" as well as the Mazda and Mazda Capital Services logos are owned by Mazda Motor Corporation or its ailiates and are licensed to JPMorgan Chase Bank, N.A.(“Chase”). Retail/Loan and lease accounts are owned by Chase.

Dealer communication only; not intended for retail purchaser.

Neither JPMorgan Chase Bank, N.A. nor any of its ailiates are ailiated with ADESA, Inc. or Manheim, Inc. © 2018 JPMorgan Chase Bank, N.A. Member FDIC.

a live social feed of those using the campaign hashtag #TheNYCWayToBuyACar. Those who spotted the parade were encouraged to snap a photo and post to their social handles using the hashtags #TheNYCWayToBuyACar and #sweepstakes for a chance to win a year of free Postmates (up to $5,000).

Carvana also recently launched in Tulsa, Okla.

Carvana irst launched in Oklahoma in June 2017 with operations in Oklahoma City.

The company also is ofering, subject to market conditions and other factors, $350 million worth of senior notes.

That amount was upsized following the original annoucement from $300 million.

Carvana intends to use the net proceeds from this ofering to pay its fees and expenses related to the ofering and for general corporate purposes.

The ofering of the notes will be made only to persons reasonably believed to be qualiied institutional buyers.

An entity ailiated with Garcia has agreed to purchase $25 million aggregate principal amount of notes in the ofering.

12 • October 1, 2018

RETAIL MARKETS IOWA Brett Dennen, sales, Gold Key Auto Credit, Davenport, Iowa: “Gold Key Auto Credit has been about for about 20 years here in the Quad Cities. We also have another location in Silvis, Ill. “We usually keep between 35 and 40 cars on the lot at any time. It’s about the same as this time last year. We’re usually selling about 25 to 30 per month.

“We get our cars from a number of diferent places – auction, wholesalers, private buyers, trade-ins from new-car dealerships, etc.

“We are 100 percent buyhere, pay-here. Average down payment would probably be between $500 and $750. We don’t do any (deal) longer than three years.

“We also use GPS and starter interrupts. We use it for both payments and inding the car.

“The average price on the lot is around $9,500.

“For average model years, it’s probably about 2008

to 2009. Average mileage is somewhere between 110,000 to 130,000 miles.

“Typically we carry more domestics than imports.

“I would say we carry about two-thirds sedans.

Then the rest are SUVs. Trucks (are expensive because they) hold their value a little bit better in the secondary market.

“Reconditioning costs depend on the vehicle. It’s somewhere around $200 to get them out on the lot.

“We do a lot on Facebook, which is the majority of it.

We also do some local TV and radio, too.

“We recently sold a 2010 Chevy Traverse. It probably had about 125,000 miles. I think we had that listed at $11,500.

“Business is similar to last year. We did ind that at the end of last year we sold about 20 cars each month.

So we’re hoping or that.

“We usually start stocking up more toward the end of the year – December – for tax season.”

TEXAS Greg Phea, general manager/owner, Austin Rising Fast Motor Cars, Austin, Texas.: “We’ve been in Austin for 20 years, but we’ve been in business a total of 31. I was in Lubbock for about 11 years then came to Austin. I’m a single-point preowned operator.

“We’re keeping about 55 to 60 in inventory. I think it was 60 when we did the last key count. Now, during tax season we keep about 100 to 125. I’ll normally start stocking up for that in November or December. I also keep a lot of our cheaper trade-ins for tax time.

“I’m a little lighter than I normally am this time of the year. Prices are very high right now. With the (hurricane) in the East, I don’t think we’re going to see a drop (soon).

“We acquire a lot of vehicles online from lease companies and from auctions.

“What I do is just a search for cars. Like now, I’m look-

$ ing for Altimas and Sonatas.

I look anywhere that’s not in the North where there is the salt from the winters.

Now, with (the hurricane), I’ll be looking in the West.

“We’re going to score right around 25 to 30 (sales per month) at this time of the year.

“We do about 60 percent of our business in the subprime lending market.

“The average price on the lot is $15,000.

“Average mileage is going to be about 33,000 miles.

Average model year is about 2013 or 2014. I’m a latemodel guy. You can ind the cars if you’re willing to pay the price.

“We’ll actually run about 25 percent trucks, 30 percent SUVs and 45 percent cars. We would love to run 50 percent trucks, but you just can’t ind enough affordable trucks. They’re stupid prices all year long.

They never go down.

“I like imports because they sell easier. People love imports here.

$

USED CAR NEWS

Compiled by Jeffrey Bellant “My average reconditioning costs are from $800 to $1,000. It’s because I sell a nicer car. The price of tires is our biggest expense. We probably spend $10,000 to $12,000 a month on tires.

“We do 90 percent of the work here. The body shop work has to go out. We do a little bit of outside service work. It’s probably 5 percent of our business.

“We do a good repeat business. I just sold a car to a customer that’s been a customer for 30 years.

“I recently sold a 2016 Corvette with 200 veriiable miles. The dealer never sold it. He had it in stock for 19 months. I sold it to my neighbor for $53,000.

“Business is just slightly of from this time last year.

The rising interest rates hurts a little. But the looding from the hurricane spurred the market. All my buyers said OVE looked like the stock market with people buying every car of the truck. People can’t move around without a vehicle.”

USED CAR NEWS

October 1, 2018 • 13

WHOLESALE MARKETS Compiled by Jeffrey Bellant MISSOURI Doug Doll, managing partner, KCI Auto Auction, Kansas City, Mo.: “We’ve been in business in Kansas City for about 10 years. But we had moved down from another place, so we’ve been open since 1978.

“We have six lanes. We run all six.

“You know, we’re selling about 680 vehicles a week.

We’re running somewhere around 1,000 per week.

“Our volume is 52 percent dealer (consignment) and 48 percent commercial (leet, lease, repo.)

“We’re up about 4 percent over this same time last year.

We’ve got a real big inlux of Hyundai Motor Finance vehicles. Those are of-lease vehicles. We’re seeing a lot of them.

“Our dealer business is probably up over 10 percent from last year.

“The retail market was very strong in July and August. I saw a little bit of a downtick in September.

“I think we’re also aver-

aging between 500 and 550 dealers in the lanes. That’s up also, probably 7 percent.

“That’s up because of our promotions. Our normal sale day is Thursday.

“But once a month, we’ll do a two-day promotional sale. We’ll do a Wednesday sale that’s all commercial accounts then follow it with the Thursday sale that’s all dealer business.

“We pick up a lot of new dealers over that promotion.

“Online we use Edge Pipeline. We sell about 20 percent of our vehicles online. That’s through simulcast, as well as the other online channels such as OVE, Openlane and SmartAuction.

“We also have what’s called Dealer Feed that (goes into a dealership). Once a vehicle hits a certain age, it goes into our system. A lot of times those cars never even come to the auction.

“We do an equipment sale once a month. We usually have 40 to 50 pieces. That could be anything; trucks, cars, boats, motorcycles,

bulldozers or backhoes.

“We also have a GSA sale once a month. We’ll run between 50 and 100. Those are all passenger vehicles.

“Our average price in the lane is about $9,500. That’s up from last year.

“Our sales team and our marketing team have done a tremendous job, getting new customers and inding new business. “(Going forward) I see a shortage of lease-commercial vehicles. I think that will (increase) the price of cars.”

OHIO Chad Bailey, president, Akron Auto Auction, Akron, Ohio: “We’ve been in business 45 years and we have six lanes.

“We’re running 1,100 to 1,200 cars per week. Actually we’re maybe a little bit ahead of last year.

“I average 15 percent repos, 75 percent dealer cars and the rest is leet-lease.

I’ve always been a strong dealer sale. I don’t have a

FALL IS IN THE AIR And we have a harvest of great vehicles available.

Build your inventory! Visit a Chrysler Capital auction partner or ChryslerDirect.com today and get the of-lease vehicles your customers need.

Visit ChryslerDirect.com or ADESA.com/dealerblock to view available vehicles. ©2018 Chrysler Capital. Chrysler Capital is a registered trademark of FCA US LLC and licensed to Santander Consumer USA Inc. CC-AD_70901-1_091818 Lease agreements are owned by CCAP Auto Lease Ltd. and serviced by Chrysler Capital.

Ram is a registered trademark of FCA US LLC.

lot of large commercial consignors.

“We have added a couple of national accounts over the years for repos. So far I haven’t noticed any ( jump or drop). We’ve been pretty consistent with those numbers.

“We’re at about a 67 percent to 73 percent conversion rate overall. Truth be told, we were a little of early this year. The summer, which is kind of the doldrums of this business, have been phenomenal. June, July and August were awesome for us. I don’t know if it’s the economy and people are feeling better.

“Typically, I have roughly about 500 dealers, with 600plus bidders. So a dealership might bring more than one bidder.

“Depending on who you talk to, you can always ind a dealer telling you the world is coming to an end. That’s just the nature of the business. But for the most part, dealers have been positive, though they always say good

cars are hard to ind.

“We run a monthly GSA sale. Their season runs early spring to late fall. If they continue to have inventory, they’ll have smaller sales in the late fall to winter.

“We probably sell 20 to 30 cars online in-lane on simulcast every week. It’s not huge.

“But we’re always in the top ive of dealers sales on OVE and Smart Auction platforms.

Year-to-date we’ve probably already sold 600 to 700 cars on SmartAuction, for example.

“Our average price is right around the $6,000 mark, maybe a little bit higher. A lot of our stuf caters to the buy-here, pay-here dealer.

“I would love to get more of those (higher value) lease cars and that’s what we’re working on trying to do.

We’re trying to get national accounts to drive that average dollar amount up.

“I’m really positive about the rest of the year. I really feel we’re going to inish the year strong.”

Why should you do business with us?

Because we are...

THANKFUL Business isn’t just about, well, business, especially during the hectic fourth quarter and holiday season. It’s also about being thankful for the opportunity to make a positive impact on our customers and our communities, because that lasts long after the season passes.

Happy holidays! ©2018 Santander Consumer USA Inc. All Rights Reserved. SC-AD_70901-0_091818

14 • October 1, 2018

USED CAR NEWS

DISCONNECTED JOTTINGS FROM It was necessary to keep up with changing fashions in the Swinging Sixties. Small changes could occur as often as every two weeks. Major changes took a little longer, such as the shift from ‘Rockers’, the motorcycle riding, greasy haired fellows to ‘Mods’, those that followed The Who, rode garishly decked out Lambrettas and Vespas and wore brightly colored pants and Ben Sherman shirts while parkas replaced leather jackets.

All this cost a lot of money, so my brother and I worked during the holidays and weekends in retail stores in London’s West End. In the posh area of Kensington High Street there were three renowned stores – Barkers, Derry and Toms and Pontings. All next door to one another, they had been built in the mid-Victorian era of the 1800s, although broadly reitted in the ‘30s Art Deco style. Barkers was on a par with Harrods of Knightsbridge and was high class and expensive

TONY MOORBY

with liveried, white-gloved doormen and elevator operators who would announce the lift’s destination at each loor. There was an old joke about ladies’ dresses going up, ladies’ underwear going down…

Derry and Toms, a little more down-market, but nevertheless frequented by the gentry, boasted a roof garden and The Rainbow Room, an art deco masterpiece where events could range from tea dances to full banquettes.

A walk-thru arcade joined Derry and Toms to Pontings, the ugly sister of all three.

Distinctly down market in comparison, it completed the prospect of being able to buy virtually anything from the combined stores. Pontings always had things onsale – a winter sale, a white sale, a Christmas sale, you get the idea. The store was distinctly dowdy and attracted a very diferent clientele from the other two.

If you’ve ever seen the BBC series “Are You Being Served?” you’ll have the very

picture of our workplace and the personnel involved.

I worked in the soft furnishings department – selling everything from loose chair covers to net curtains and bolts of fabric from voile to velour. Meanwhile Robin was in the bedding department next door.

Mr. Phillips, the buyer, housed in the corner of the department was rarely seen.

He had the simpering appearance of a hen-pecked husband; a bald pate, fringed by a veil of thinning white hair and rimless spectacles, always impeccably dressed in a dark suit, underscoring the image. His lieutenant, the ‘loorwalker’, was named Mr. Kyte – we always had to address one another formally as Mister or Miss, regardless of a lady’s marital status. Kyte was vertically challenged and made up for his miniscule stature by acting like a junk yard pit bull, barking orders so oiciously, his saliva spat out in chunks.

For a while I thought he had moss on his jacket. His dress

was known as “city attire”; always a black jacket, gray and black pinstriped trousers, a light gray waistcoat (vest), a stif detachable, starched collar and a silvergray tie, rounded out by the shiniest of black shoes – always black, never brown.

He strutted around like a igure from the silent movies, his roving eye catching every nuance of business being transacted. He always used three syllables where one would do; “Mr. Moorby, a client for your indulgence, if you would oblige us with

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. Mercedes SUV 3. Ford SUV 8. Ad ___ committee 9. Tires’ need 10. Computer in “2001” 11.Dependable 13. Buyers look for the ___ prices 14. Legacy or Crosstrek 16. ___-sized sedan 18. Green color 20. Auto repair quote 23. Hyundai Santa ___ 24. West coast gas chain 25. he x in ‘2x4’ 26. Lexus letters 27. Discontinued Toyota marque 28. Mazda model 32. Energy eicient light

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your kind attention!”

The rest of the staf was made up of elderly ladies or men who were too old to have been called up for armed service during the war or younger types from the fringes of other professions – actors who were “resting” or “between parts.”

Pantomime and vaudeville provided a steady stream of workers from louncy, gay men to ardent students, illing in to make a living.

With time on our hands, pranks and larks became everyday events.

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Solution to this puzzle in the 10/15/18 issue. Call 1.800.794.0760 for a FREE subscription.

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