Used Car News 03/04/2019

UsedCarNews.com

March 4, 2019

Mass Market Brands Top Reliability Study

LEADING THE WAY: The iconic 911 is the highest-ranked model in the J.D. Power 2019 U.S. Vehicle Dependability Study, but mass-market brands scored best overall.

Rush - Dated Material

Mass-market brands outperformed luxury brands in dependability for the first time in 2018.

Model year 2016 mass-market brands average 136 problems experienced per 100 vehicles (PP100), according to the J.D. Power 2019 U.S. Vehicle Dependability Study.

That is six PP100 lower than the 141 PP100 for luxury brands.

A lower score reflects higher quality.

The study measures the PP100 during the past 12 months by original owners of model year 2016 vehicles.

The study covers 177 specific problems grouped into eight major

vehicle categories.

Despite the overall stronger performance for mass-market brands, individual luxury brands did well.

Lexus ranks highest in overall vehicle dependability among all brands, with a score of 106 PP100.

This is the eighth consecutive year Lexus ranks highest.

Porsche tied for second with Toyota and the 911 is the highest-ranked model in the 2019 study.

This is the first year that a Most Dependable Model has been awarded.

Chevrolet and Buick round out the top five.

Chrysler is the most-improved

brand, with a reduction of 65 PP100 since 2018.

General Motors Company receives five segment awards for the Buick LaCrosse, Buick Verano, Chevrolet Equinox, Chevrolet Silverado HD and Chevrolet Sonic.

Despite the strength of mass-market brands, Audi, BMW, MercedesBenz and Volkswagen all showed improvement this year.

Along with Porsche and Volkswagen, all German brands are better than the industry average.

This is the first time this has happened in the 30 years of the study.

Not all the news was positive, While vehicle dependability con-

tinued to improve last year, but at a slower rate than the year before.

The rate improved by 14 PP100 decline from 2017 to 2018. “Vehicles are more reliable than ever, but automakers are wrestling with problems such as voice recognition, transmission shifts and battery failures,� said Dave Sargent, vice president of global automotive at J.D. Power.

The 2019 U.S. Vehicle Dependability Study is based on responses from 32,952 original owners of 2016 model-year vehicles after three years of ownership.

The study was fielded in OctoberDecember 2018.

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USED CAR NEWS

March 4, 2019 • 3

Another Airbag Maker Triggers Massive Recalls DETROIT (AP) – Nearly four years ago, the U.S. government’s highway safety agency began investigating air bag inlators made by ARC Automotive of Tennessee when two people were hit by lying shrapnel after crashes.

The National Highway Traic Safety Administration estimated that 8 million Fiat Chrysler, Hyundai, Kia and General Motors vehicles in the U.S. use the company’s inlators.

The investigation became more urgent in 2016 after a Canadian woman driving a Hyundai was killed by shrapnel from an ARC inlator.

But public records posted by the agency show little progress on the probe, which began in 2015.

One safety advocate said the slow investigation is a symptom of an agency that has done little to regulate the auto industry.

“That’s really unacceptable. NHTSA should have gotten on top of it sooner,” said Rosemary Shahan, pres-

ident of California-based Consumers for Auto Reliability and Safety.

“It’s just really painfully obvious that it’s a (safety) defect.”

ARC’s communications ofice did not return multiple telephone and email messages seeking comment on Feb. 19 and 20.

ARC inlators are similar to dangerous devices made by bankrupt Takata Corp. of Japan.

Both use the explosive chemical ammonium nitrate to create a small explosion to inlate the bags in a crash, and both can blow apart metal canisters that hold the chemical.

But unlike Takata, ARC of Knoxville uses ammonium nitrate only as a secondary method of inlating the bags.

At least 23 deaths have been reported worldwide due to Takata air bag inlators; there has been only one known death linked to ARC’s inlators.

Recently, NHTSA posted documents saying that Gen-

eral Motors would recall 1,145 Chevrolet Malibu sedans from the 2010 and 2011 model years after inding out that a driver had been injured by an exploding ARC inlator.

The company said it’s the only inlator rupture known to have happened in 1.2 million GM vehicles with ARC inlators, including 2008 to 2012 Malibus as well as 2007 to 2010 Saturn Auras, made at a factory in Kansas City, Kansas.

GM said in a statement that it recalled all the cars with inlators made in the same production lot identiied by ARC. The automaker said it will inspect inlators that are replaced. ``If we ind a defect trend beyond the recalled vehicles, we will take appropriate action,” the statement said.

The inlator in a 2011 Malibu exploded in a Sept.

22, 2017 crash, injuring the driver.

GM was told about the crash by the driver’s attorney two months later, but the company was not able to inspect the car until Dec. 13, 2018, according to documents iled with NHTSA. A GM engineer looked at

the car and components and determined that the inlator ``likely overpressurized and ruptured during deployment.”

A week later the company decided to do the recall of the inlator.

Continued on page 5

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USED CAR NEWS

NEWS BRIEFS Tax Cut Distorts Earnings Report

ter of 2018 was $4.8 million com- ume range of its Dallas location, Consumer Portfolio Services Inc. pared to pretax income of $8.2 mil- which sells nearly 1,200 vehicles a earned less money and had lower lion in the fourth quarter of 2017, a month.

Sonic reported record fourth quarrevenues in the fourth quarter, but decrease of 41.8 percent. ter pre-owned retail unit sales of the efect of the 2017 tax cut caused the company to swing to a gain from KAR Auction Services Reports Lower 35,135 units between its EchoPark Income on TradeRev Rollout and traditional franchise stores. a loss the year before.

KAR Auction Services Inc. reportCPS announced earnings of $5.4 million for the fourth quarter. This ed a lower net income in its latest compares to a net loss of $10 million quarter as a result of the TradeRev Carvana Adds Five Locations rollout.

Carvana Co. has launched in ive in the fourth quarter of 2017.

KAR reported net income of $67.3 additional Northeast markets.

The results for the fourth quarter Carvana now operates in: Westof 2018 include a $2.1 million net tax million on revenue of $929 million for the fourth quarter.

That is down chester County, N.Y.; Barnstable, beneit related to certain tax planning strategies and other adjust- from net income of $172.8 million Mass.; Norwich, Conn.; Atlantic ments. Without the beneit, net in- on revenue of $890.4 million in the City, N.J.; and Trenton, N.J. With this expansion, Carvana now come would have been $3.3 million. fourth quarter of 2017.

KAR incurred an operating loss of ofers as-soon-as-next-day vehicle For the fourth quarter of 2017, the loss includes a non-cash income tax $15.7 million for the quarter, which delivery in 96 markets across the charge of $15.1 million representing was attributable to the rollout of U.S. the write down of the company’s TradeRev. deferred tax asset to relect the lowered tax rates enacted by the De- Sonic Automotive Expects Strong TransUnion Tool Speeds Shopping A new solution from TransUnion cember 2017 tax act. Without the Sales at Latest EchoPark Store Sonic Automotive Inc’s EchoPark – Auto Payment Shopper – aims to charge, net income would have been used-car stores retailed 8,762 units make buying a car a more seamless $5.1 million. and transparent experience.

Revenues for the fourth quarter during the fourth quarter.

EchoPark’s Houston store opened Auto Payment Shopper bridges were $91.2 million, a decrease of $16 million, compared to $107.2 million on Dec. 7 and was the company’s the gap between lenders, dealers for the fourth quarter of 2017. Total best EchoPark store opening to date. and consumers by creating a peroperating expenses for the fourth The Houston location sold 266 ve- sonalized online marketplace for car quarter were $86.4 million com- hicles in the last three weeks of De- shopping.

The solution combines inancing pared to $99 million for the 2017 cember and 373 vehicles in January.

Sonic executives expect the Housofers with dealer inventory into period.

Pretax income for the fourth quar- ton store’s volume to reach the vol- a one-stop shop for consumers to

Editorial: Ted Craig, Managing Editor Jeffrey Bellant, Staff Writer

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1 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”).

2 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”).

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The tradename “Maserati Capital USA” (MCUSA) as well as the Maserati Trident and Maserati Capital USA logos are owned by Maserati S.p.A. or its ailiates and are licensed to JPMorgan Chase Bank, N.A. (“Chase”).

4 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.

Neither JPMorgan Chase Bank, N.A. nor any of its ailiates are ailiated with ADESA, Inc. or Manheim, Inc. Each auction is solely responsible for their website content, sales events, promotions, fulillment and operation of the auction.

Dealer communication only; not intended for retail purchaser. © 2019 JPMorgan Chase Bank, N.A. Member FDIC.

Manheim Partners with Franchise Dealers Association The Virginia Auto Dealers Association has named Manheim Express a partner program for its members.

Last month, the mobile app signed on as an exclusive Program Partner.

PAGE 14

Columnist: Tony Moorby Circulation: subs@usedcarnews.com Production: Tom Savage, Production Manager Cee Lippens, Web Master

Vol. 24 • No. 23

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USED CAR NEWS

March 4, 2019 • 5

Tech Reduces Repo Risk

By Ted Craig

a problem gets out of hand.

“It allows a dialogue to take place between both parties,” Fitzgerald said.

A dealer might notice a car is moving less than usual and check to see if anything has changed. The dealer could discover a mechanical or employment issue that he can work to help the consumer solve.

The contact happens via Spireon’s app, so there is less having to chase down consumers by phone.

Brian Deeley, Spieron’s director of product management, said usedcar dealers have been quick to adapt to his new way of communicating with customers.

The connected car aspect is especially important if a vehicle is being driven by more than one person, which is often the case with subprime consumers, Fitzgerald said.

“Don’t let tax season make or break your year,” she said.

Tax season is the annual high point of sales for most buy-here, pay-here dealers.

Unfortunately, six months later comes the high point for repossessions. It’s a classic high-risk, highreward proposition.

But technology can reduce some of the risk, according to executives at telematics irm Spireon.

“They can aford to take on a little more risk when this pops,” said Carla Fitzgerald, Spireon’s director of marketing.

Part of this risk mitigation comes from traditional starter-interrupt and GPS devices. But today Spireon ofers a wider array of products that turn used cars into connected cars.

This means dealers can monitor the cars more closely and act before

Airbag – from page 3 Details of the crash and the driver’s injuries were not available.

Dealers began replacing the inlators Feb. 28, with parts available for all the recalled vehicles in mid-tolate March.

Loaner cars will be available for people who don’t want to drive until repairs are made.

Progress on the NHTSA investigation has been slow. The last document in the public ile was a letter sent by the agency to GM in January of 2017, more than two years ago.

Other investigations have moved slowly as well. As of December, the agency had 36 investigations open into the efectiveness of recalls and possible safety defects.

Of those, 11 are more than two years old, and four are over three years old. One, a probe into Kia sunroofs that can break, began more than ive years ago in October of 2013.

In December of 2016, the last full For Cars, Trucks and Vans

year of the Obama administration, NHTSA had 14 open investigations, and only one of them was more than three years old.

In the fatality involving the ARC inlator, the Canadian woman died in July of 2016 when the inlator ruptured and sent metal shrapnel into the passenger compartment of a 2009 Hyundai Elantra she was driving.

Without the shrapnel injuries, she likely would have survived the low-speed crash, Canadian oicials said.

In October of 2016, the agency accused ARC of stonewalling its investigation and threatened a large ine due to a lack of cooperation, but it wasn’t clear whether the company is now cooperating.

NHTSA irst started investigating ARC in 2015 when an Ohio woman was severely injured by an ARC inlator in a 2002 Chrysler Town and Country Minivan.

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USED CAR NEWS

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A trend is developing of manufacturers having to recall vehicles to fix repairs from prior recalls.

Kia Motors America is recalling 71,653 2011-17 Optima, 2012-17 Sorento and 2011-18 Sportage vehicles that previously received an engine replacement under recall number 17V-224, warranty, or the Knock Sensor Detection System (KSDS) Product Improvement Campaign.

The high-pressure fuel pipe that connects to the fuel pump outlet may have been damaged, misaligned or improperly torqued during the engine replacement procedure, possibly causing a fuel leak.

Kia has notified owners, and dealers will inspect and replace the fuel pipe, as necessary, free of charge.

The recall began Jan. 17. Kia’s number for this recall is SC172.

Nissan North America Inc. is recalling 341,003 2015-2017 Altima vehicles, previously remedied under recall number 17V-040.

The door latch-lock cable may not have been routed properly in the rear door when the remedy was applied. As a result, the cable may interfere with the window regulator causing the rear passenger door to unlatch and open when the window is lowered.

Nissan will notify owners, and dealers will secure the latch-lock cables in the correct position using the new remedy procedure, free of charge. The recall began Feb. 5.

Nissan announced a Feb. 7 recall of 86,265 2009 Murano vehicles. The valves within the ABS hydraulic control units (HCU) may react with brake fluids containing specific corrosion preventative additives. This may cause the valves to not close properly. Nissan has notified owners, and dealers will flush the brake system with DOT 4 fluid. The HCU will be tested to detect a possible stuck valve. If necessary, the HCU will be replaced free of charge.

Jury Awards Millions DALLAS (AP) – A Texas jury has awarded more than $37 million to a woman who sued Honda after being paralyzed in a 2015 car crash.

Sarah Milburn sued the automaker over its seatbelt design after her Uber driver ran a red light and the Honda was struck by a pickup truck

in Dallas.

The crash broke the 27-year-old’s spine, leaving her a quadriplegic.

A Honda spokesman said the company will appeal. Honda had argued it wasn’t liable for Milburn’s injuries because the Odyssey’s seatbelts met federal safety standards.

USED CAR NEWS

March 4, 2019 • 7

Finance Remains Steady Pundits started talking about an auto inance bubble again recently, thanks to a report from the Federal Reserve Bank of New York.

The report was based on the NY Fed’s Quarterly Report on Household Debt and Credit.

It shows that new-car inance increased by $9 billion in the fourth quarter, reaching $584 billion. That is the highest level in the 19 years the NY Fed has recorded this data.

Much of this increase comes from the ever-climbing prices of new vehicles, which cause more consumers to inance their purchases.

The bigger issue is that while overall delinquency rates remain below 2010 peak levels, there were 7 million additional consumers 90 or more days delinquent on their auto payments at the end of 2018.

The growing number of inanced also drove that number. As a percentage, it’s below 2010.

Consumer advocates are jumping on the report to push for increased regulation.

“Americans deserve both protection from predatory and unfair practices in auto lending, and a transportation system that provides more people the freedom to live without owning a car,” said Ed Mierzwinski, U.S. PIRG’s senior direc-

tor for federal consumer.

“Americans shouldn’t have to ight their way through a thicket of tricks and traps at the auto dealer just to get the transportation they need to get to work or school.”

PIRG claims “unfair lending practices” are really driving the growth of auto inance.

But analysts at TransUnion said auto inance today works to the beneit of both consumers and creditors.

“Generally, auto inance has been a healthy market,” said Matt Komos, TransUnion’s vice president of research and consulting.

Komos said consumers are getting access to inancing and creditors are getting their payments on a regular basis.

Brian Landau, TransUnion’s auto business leader, said delinquencies of more than 60 days have been stable for the last ive quarters, even as subprime inancing grew in the second half of 2018.

Landau said TransUnion considers 60-plus-day delinquent as the most accurate indicator of performance.

Even if something goes wrong, collections and repossesions run even more eiiceintly today due to technology, Landau said.

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8 • March 4, 2019

USED CAR NEWS

DISCONNECTED JOTTINGS FROM I’ve often mentioned the virtues and villainy of the explosive growth of Nashville. Pros and cons have abounded as this “it” city has grown like Topsy – enjoying new revenue growth from an expanded population but unable to pay for new infrastructure fast enough to properly serve the expanded societal needs that come with all this inlux.

It’s easy to pat yourself on the back as the area is recognized as a great place to live. It’s hard to reconcile ive kids between the ages of 12 and 16, currently under arrest for murdering an up-and-coming young musician, fatally shooting him in the course of a robbery for “failing to hand over his car keys” to enable their speedy escape. The old Nashville is looking decidedly more attractive.

One marked change is the food scene. I know this is a country-wide phenomenon but grits and eggs with a sausage biscuit and gravy for breakfast from the local

TONY MOORBY

greasy spoon, having been the norm for years, is now eclipsed by gourmet bagel joints boasting ‘housesmoked,’ line caught Coho salmon, lown in from the west coast, probably in a irst class seat, reserved for the purpose. Now not unusual these days!

A celebratory steak dinner at Jimmy Kelly’s was something to look forward to for birthdays and such and you’d get change from $50 after a blowout. Now twee, neighborhood, gastronomic oases abound where some of the appetizers can cost that much!

As if the prices need to be excused, the menu descriptions are worthy of Shakespearian sonnets. Instead of a house salad you’re treated to “a board of torn leaves, plucked from the gardens of our local farmer this dewy morning, adorned with crackles of bacon from the bellies of half-Hampshire, black backed, loppy-eared hogs, locally fed on new browse at the Amish farm in

the rolling hills of the midsouth. A ‘snow’ of slivered, plump and sweet Marcona almonds especially scooped up from their Spanish orchards, settles over the peppery arugula and watercress.

A dressing lightly caresses the whole, sweetened with the honey of bees, preferring the clover on the banks of the Duck River, Maldon salt and perfumed extra virgin, irst-pressed olive oil from our own vineyards in California to grace your palate and amuse your taste buds”.

It takes most of the evening just to read the menu!

Wine lists provide another opportunity for literary lathering; a recent outing to one of these pocket-emptying restaurants turned up some of the most lowery descriptions, like a 2015 Maidenstoen Tondre riesling from Santa Lucia; Grapefruit pith, wet stones, crushed sea shells, key lime!! Wet stones?

Crushed seashells? Really?

Seriously?

Strikes me that it didn’t taste of very much.

A cabernet sauvignon included an allusion to saddle leather – that conjures up visions of a sweaty, denim crotch to me!

Dining out has become an ethereal, esoteric and expensive undertaking, occasionally rewarded with good food – but not always. A good reputation in the restaurant business can be leeting and hard work to maintain with no laurels to rest on.

The competition here in the Music City is dog eat dog – sorry!

I know Korean food is pop-

ular but we’re not there yet.

You may remember I don’t like dogs!

These days, the drive to the eatery and inding a parking spot is a challenge, suicient to fuel a gargantuan appetite or the valet parker will squeeze your wallet dry.

I admit to a growing appreciation for simpler things. The Wale House just opened a new store around the corner.

Smothered and covered hash browns sound really good about now.

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

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USED CAR NEWS

March 4, 2019 • 9

AROUND THE BLOCK

Compiled by Jeffrey Bellant

AUCTION PLANS ANNIVERSARY PARTY Consignor Names

DIGGING IN: BSC America’s Ray Nichols, Michelle Nichols and Charles Nichols survey 12 acres being prepared for expanded parking at Bel Air Auto Auction.

BSC America has announced that the second phase of the lot expansion at Bel Air Auto Auction is underway, with plans to add 12 acres of vehicle parking in time for the auction’s 72nd anniversary celebration in April.

The expansion will yield an additional 1,200 parking spots for

consignment parking and storage.

“Since we opened the all-new Bel Air Auto Auction facility in the Fall of 2017, we have experienced continued growth, adding important new accounts as well marking increases in overall consignment,” said BSC America President R. Charles Nichols.

“Our goal has always been to pair growth in the marketplace with exemplary service to our customers. Adding more consignment parking is a vital step in processing the additional volume with ease and efficiency.”

Bel Air Auto Auction has planned a two-day event for its 72nd anniversary, beginning on April 17 with a GM closed and honor roll sale. That night, customers and staff will gather for a presale happy hour. Customers will return on April 18, when the season’s largest consignment of vehicles will run through 10 auction lanes.

Bel Air Auto Auction opened its all-new facility in 2017. Sitting on 185 acres, the facility includes a 75,000-square foot, 10-lane auction facility, restaurant and office building, as well as a 50,000 square foot Vehicle Enhancement Center, along with a separate building for streamlined check-in.

Top 2018 Sale

United Auto Credit named Missouri Auto Auction its 2018 Auction of the Year. United Auto Credit used approximately 32 auction locations and employs a multi-faceted scorecard to rate performance.

Missouri Auto Auction won the Regional Auction of the Year in 2017.

Scott Mousaw, director of loss mitigation for United Auto Credit, will visit Missouri Auto Auction in March to present the award to the auction’s general manager, Justin Brown, and the auction team.

“The auction’s dedication to service shows in every step of the auction process, and by every member of the auction team who has responsibility for our vehicles,” Mousaw said. “(The auction) has developed a robust market for United Auto Credit, and their concerted eforts on our behalf are evident in outstanding retentions and conversions throughout the year.”

We invite news items and top-quality photos from our readers to be considered for “Around the Block.”

Please include the name of a contact person and a telephone number. Send items and photos to: Jeffrey Bellant. Mail: Used Car News, 24114 Harper Ave., St. Clair Shores, MI 48080.

Fax: (586) 772-9400 e-mail: jeff@usedcarnews.com

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10 • March 4, 2019

RETAIL MARKETS ILLINOIS Joseph Mok, general manager, GMotorCars, Arlington Heights, Ill.: “We’ve been in business for 10 years.

“We have one location and we keep 150 vehicles in stock. We sell about 80 per month, on average.

“You know what? The last three months have been better than ever. I can’t even explain it. We were killing it in January and February has been great. December was excellent.

“Our units are down, but our grosses are up by 20 percent. I attribute a lot of that to commercial business. We sell a lot of cargo vans and pick-up trucks. The economy, despite what the media says, is pretty strong. Companies are expanding their leets.

“We do very little subprime. I would say it’s about 10 percent. We don’t do any buy-here. “(When it comes to acquiring vehicles), I have a Facebook group with some

other dealers. I did a video on acquiring inventory. One of the things dealers need to do is utilize all of the tools available to them. That means purchasing vehicles from multiple platforms, from all over the country and it means selling vehicles across diferent platforms.

“Wholesale business accounts for about $10,000 to $15,000 a month in income for us.

“The average model year we carry is probably 2015, with about 40,000 miles.

“The average retail price is about $15,000 to $18,000.

“About 50 percent of my business is trucks, which is cargo vans, pick-up trucks, box trucks, etc. The rest for the non-commercial side are rental cars and SUVs. “We’re not selling a ton of domestic sedans.

“The commercial vehicles are almost all domestic, with very little Japanese or German brands.

“Typical reconditioning costs are about $1,200. We service them in-house and

recon them in-house.

“For advertising, we do all the typical things. We’re doing Facebook marketing.

We’re on OferUp, Letgo and we do a ton of social media. We’re on TrueCar, CarGurus and Cars.com.

“We recently sold a 2009 Toyota Camry. It had 60,000 miles. We got $9,000 for it.”

PENNSYLVANIA Bert Straub, owner, 1st Choice Auto, Fairview, Pa.: “I’ve been in business for four years. Before this, I was the market-area manager for Credit Acceptance Corp. for six years. Before that, I had worked for CitiFinancial until 2008.

“I have one location.

“I keep about 15 to 18 (units) in stock. That is typical across the board for the year. I sell 10 to 12 per month. We’re pretty much a 27- to 30-day turn.

“I get vehicles from independent auctions. I use Greater Erie Auto Auction and Corry Auto Dealers Ex-

$ change, which is now part of the XLerate Group.

“We’re 65 to 70 percent subprime. ”I think our subprime is a little softer this year. I think it has to do with increasing the price point of the car. In trying to stay proitable, we’ve tried to go with a newer model, with fewer miles.

“When just starting out, we were focusing on buying that $3,000 to $4,000 car, selling it for $5,000 to $6,000. That’s a great business model for subprime.

But as the banks tightened up, as proit margins got affected from lack of inventory, I’ve had to go to buying a little more expensive car that hopefully doesn’t need as much work.

“Average reconditioning costs are probably $800.

“The margins are being squeezed, so I need to expand. We do not have a service department, so our growth opportunity would be to expand into a service department. That would be

$

USED CAR NEWS

Compiled by Jeffrey Bellant where we’re looking at today, stepping out into that.

We want to keep that proit margin here, rather than shipping it out.

“I would say we’re in the $11,000 to $12,000 range for retail price on the lot. The average mileage is about 100,000 miles and the average model year is a three or four-year-old car.

“For inventory, we are strong on domestics and weak on imports.

“I would say we probably carry 35 to 40 percent SUVs. Then it’s probably cars at another 35 percent.

Not much in trucks at all because of the price point.

“Most of my advertising is social media, Facebook, Instagram, etc. We also spend some money on Google AdWords. Being a smaller lot, we get more bang for our buck.

“We also do a lot of community service.

“One recent car I sold was a 2013 GMC Terrain.

It had 98,000 miles. We got $10,000.”

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12 • March 4, 2019

USED CAR NEWS

WHOLESALE MARKETS Compiled by Jeffrey Bellant NEVADA Russ Norrish, general manager, Dealers Auto Auction of Las Vegas, North Las Vegas, Nev.: “We’ve been here four years. Our four-year anniversary (was) Feb. 27.

“We have six lanes, we normally run four. For our anniversary sale, we (expected to run) ive.

“The volumes are little of from this time last year.

“Normally, our volume is around 300 to 320. For our anniversary sale it(was expected to be around 450).

Our sales percentages lately have been around 58 percent.

“Normally we run about 65 percent , sometimes up to 70.

“But we’ve grown a lot more with some new accounts.

“We’re probably 75 percent new-car stores, 15 percent leet-lease and the rest are wholesale.

“Westlake just came on board as a consignor. So that’s pretty good for us.

They run 30 to 35 cars every

other week.

“The overall volume is a little of. The majority of our business is new-car stores.

We get a lot of their trades and a lot of their frontline stuf.

“What they’re telling me is that they are selling a lot of new cars because there are a lot of rebates out there.

“The problem is they are not taking in a lot of trades.

So they’re selling cars, but not getting trades.

“Then they get some decent trades, but a lot of them are just high-mile, late-model stuf.

“The other factor is just the high price of new cars.

I mean, I think I read the average price is $35,000, $36,000.

“We get right around 225 to 230 dealers in the lanes.

“Most dealers are saying that the year is starting out slow.

“Online, we use Auction Edge. We have simulcast and we use OVE. “Our average price across

the block is about $6,300.

“I feel pretty good about this year. I think it will be pretty steady.

“We’ve got a little niche. I call it a little boutique auction that caters to independents and the new-car stores that we have like us.

“The thing is, Vegas is cooking right now. I’ve lost three part-time drivers who found other jobs that paid more money.”

NORTH CAROLINA Jerry Barker, general manager, Greensboro Auto Auction, Greensboro, N.C.: “We’ve been in business 33 years. We have 16 lanes.

“Volumes are starting to come back. They were a little of last year, but they are deinitely headed up this year.

“About 2,400 to 2,500 cars is a typical (sale).

“We’ve been in the upper 60s for (conversion rates).

Those are probably a little better than the same time last year.

“It’s just a diferent time, a

diferent economy and different weather compared to last year.

“It’s a variety of things, like new-car incentives, for example. It’s not one particular reason you can nail down.

“I think new-car dealers are slow and used-car dealers are busy.

“About 25 percent of our volume is dealer cars and 75 percent is commercial.

That’s pretty consistent with this time last year.

“We have factory sales, but the only diference is that is a closed environment. We have Ford, Subaru, Hyundai and Chrysler factory sales that are closed. Our Kia sale is always open.

“Between online and in the lanes, we’re usually over 1,000 bidders.

“Online participation has been consistently going up.

Everybody is working on that.

“I think it’s a trust factor, getting used to buying and getting your product back to the lot and checking that it’s as it was

described.

“We currently use AWG. “We also do a specialty sale every week for our consignors. It’s got motorcycles, boats, campers – that kind of stuf. We always run it irst thing in the morning.

“We also run our salvage sale at the same time. So we just run them all together.

It’s usually about 150 units or so.

“The average price in the lane overall is just over $15,000.

“We just run so many factory cars and of-lease cars, that it keeps our prices up.

“The car business has been good since 2010, after it got past the hiccup in 20082009.

“It’s just lattened out over the last couple of years. I feel like there will be a little uptick this spring, but not a huge jump.

“We also have a classic collector car sale three times a year that’s really taken of.

“We have our next one in July and we’ll run 650 cars a sale.”

14 • March 4, 2019

USED CAR NEWS

Digital version available at usedcarnews.com

C R O S S WO R D

By Myles Mellor

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