Used Car News 04/01/2019

UsedCarNews.com

April 1, 2019

Dealers Grow More Confident with Spring

Rush - Dated Material

Dealers are feeling better after a decent but diferent tax season, and the start of the spring.

U.S. auto dealer sentiment rebounded in the latest Cox Automotive Dealer Sentiment Index. The Index rose to 48 from 44 in the last reading.

“We’ve seen a turnaround in dealer sentiment and the outlook for the future this quarter compared to the fourth quarter,” said Cox Automotive Chief Economist Jonathan Smoke. “However, gone is the euphoria we saw this time last year as views of new- and used-vehicle sales are lower.”

The overall current market index remained in negative territory.

Market conditions remained in the top spot as the most cited negative factor with 45 percent of dealers citing market conditions as holding back their business. Competition moved into second place, pushing credit availability for consumers into third place. Expenses moved up into the fourth place as limited inventory slid down to ifth place.

The biggest changes cited from the fourth to irst quarters were the decline in limited inventory, the increase in consumer conidence, and also increases in both regulations and 2018 tax law changes.

The outlook for the coming months improved, especially among independent dealers.

Some of that might be the result of concerns about a weak tax season proving somewhat overblown.

Smoke said that despite early worries about smaller refunds, a survey of consumers found most are receiving either as much or more than they expected.

Smoke said data he reviewed from Tax Max shows many used-car buyers fall into the category of those receiving larger refunds than they expected.

But as expected, those receiving

less tend to have higher incomes and are eligible for fewer deductions.

This might partially explain the decline in certiied pre-owned sales to start the year.

CPO sales in February fell to 211,520 units from 212,116 in February 2018, according to Cox Automotive.

This follows an even bigger slide in January, with sales falling to

199,640 from 203,024.

Despite this slow start, Cox Automotive analysts still predict about 2.75 million CPO units this year, which would be another record year.

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USED CAR NEWS

April 1, 2019 · 3

GSA Sales Offer Auctions Opportunities, Challenges

By Jeffrey Bellant

Springtime is the season that many Government Service Agency (GSA) sales start to rev up.

GSA sales are bid out, so not every auction has them and they must be open to the general public.

Some auction general managers that do have them recently discussed the benefits and challenges of GSA sales.

Ryan Durst, general manager of Lincoln Auto Auction in Waverly, Neb., said the auction has had the GSA contract for almost a decade.

“It’s basically a big fleet account,” Durst said. “Our goal (for bidding) was to get more inventory all at once.”

Having a sale featuring 100 to 125 units every four or five weeks was a big attraction, he said.

GSA numbers are expected to be up this year after a down 2018, Durst said.

Bruce Beam, general manager of Dealers Auto Auction of Oklahoma City said its GSA sale is a solid business.

“We do the marshaling and the auction services for GSA,” Beam said.

For GSA sales, Dealers Auto Auction of Oklahoma City will run two lanes for six to eight months out of the year.

“We’ll run about 100 to 130 each sale. I think we ran about 1,350 last year for GSA,” Beam said, This year has started out slowly, however. The auction just had its first live GSA sale on March 14 but only ran about 37 vehicles.

“We’re really hoping those numbers will increase throughout the year and we’ll get back to normal volumes,” Beam said.

Typically, the GSA sale starts out strong in March but tapers off as it gets to the end of the year.

“I’m hoping, maybe, that it works in reverse this year,” Beam said.

is the Tennessee Valley Authority – a U.S. government company – which will have about four or five sales a year,” he said.

“But we’ll also have a monthly GSA sale on the first

base.

“It does bring in some heavy hitters from the newcar franchise side that you might not get during a regular sale,” Rodriguez said.

Durst agreed that it draws

Beam said GSA also has its own online auction program where the units that are at DAA of Oklahoma City are posted on an auction site for GSA. Those will typically run for about a week, maybe 10 days.

“We still process that,” he said. “It allows them to keep vehicles moving throughout the year during times where they might not have the (volumes) to hold a live sale.”

Beam said they also use the online sale for specialty items like big trucks – an ambulance or a wrecker, for example.

Doug Rodriguez, general manager of Dealers Auto Auction of Chattanooga has two different government sales.

“We have the TVA, which

Thursday of every month.

DAA of Chattanooga had a 100 percent sale for the TVA in February.

“I think we sold $3.8 million of TVA vehicles,” Rodriguez said. “There were 125 units I think. There were a mix of sedans and work/ construction vehicles. We get a nice mix.”

Echoing Beam, Rodriguez said the monthly GSA sales have been a little light this year, though last year finished strong with more than 70 units in December and as many in January.

“I expect for us to have an increased amount of vehicles for GSA this year,” he said.

Rodriguez said the benefit of GSA is it exposes the auction to a different buyer

in new faces with deeper pockets.

“It’s a step up in inventory, buyer base and all the ancillary things that come with it,” he said.

At Lincoln Auto Auction, the average GSA unit price across the block in 2018 was $9,200, which is more than double the typical price at the auction.

Holding the GSA sale at the end of the regular sale means that it draws more buyers in and “just kind of pumps up the whole week.”

But the GSA sale comes with its own hurdles, Rodriguez said.

“I think the challenge is the same everywhere. It’s a pretty tight squeeze to try and do without losing money,” he said. “It’s not some-

thing you traditionally make a bunch of money at. It’s contractual and there are no buy fees.”

The other challenge that comes with GSA has to do with the “G” in GSA. “There’s a lot of red tape,” Durst said. “Getting on contract, there are a lot of hoops you have to jump through, from site visits to filling out packets upon packets of compliance stuff.”

Plus, the auction also had to upgrade its systems initially.

“We just had to get better at everything we did,” Durst said.

Dealers Auto Auction of Oklahoma City actually had a GSA sale years ago, gave it up, but got back into it.

At some point, it became a bad fit.

“We were a growing auction at that time and it just took away from our core business,” Beam said.

So the auction stopped bidding for the contract for a few years before getting back in.

Although the GSA requires that the sales be open to the general public, they are a small percentage of actual buyers, Rodriguez said.

“I bet I don’t have more than 10 percent who end up buying,” he said. “I believe there’s a good segment of the population that thinks they are going to come in and steal something, get something ridiculously low.

“But like everything else here, it’s market-based.”

Overall, Durst, like the other GMs, is pleased with the GSA contract.

“It’s done what we wanted to do and gone past that,” he said. “It’s a big draw for us.”

Fed Changes Course on Path of Interest Rates NEW YORK (AP) _ So much for those worries about rising interest rates.

Just a few months ago, rising rates were bearing down on everyone from home buyers to stock investors after the Federal Reserve put through seven quarter-point increases in 2017 and 2018.

This year, the Fed has changed course.

In January, it opened the door to a “patient” approach

to further rate increases.

Then on March 20 the central bank surprised the market when it said it may not raise rates at all during 2019.

The impact should soon filter out to consumers across the economy, including auto finance, and the effects will likely remain for a while.

“The Fed no longer has an appetite for tightening rates above” a level that would slow the economy, said Ed

Al-Hussainy, senior currency and rates analyst at Columbia Threadneedle Investments.

This could benefit new-car sales, which have been stagnant since the Fed started raising rates.

In February, interest rates for new vehicles reached their highest point since 2009, Edmunds reports.

The annual percentage rate on new financed vehi-

cles averaged 6.26 percent that month. Meanwhile, the cost of new vehicles continues to rise.

Of course, lower rates are not a panacea.

They hurt savers and retirees who had just started to enjoy higher rates on their money-market accounts and bonds following years of earning very little.

Low rates also raise the risk of inflating prices for

investments into bubbles, such as those that ultimately led to the crashes of the tech bubble in 2000 and the housing bubble in 2008.

“We’re in a very different world today,” Fed Chairman Jerome Powell told reporters at a news conference, stressing that the Fed is now carefully monitoring financial conditions and stability in ways that it didn’t previously.

4 · April 1, 2019

USED CAR NEWS

NEWS BRIEFS Carvana Moves into More Markets Carvana continues its rapid pace of expansion, Carvana Co. unveiled its newest Car Vending Machine in Pittsburgh.

The tower stands eight stories tall and holds 27 vehicles.

Additionally, Carvana launched two more markets in Pennsylvania, now offering as-soon-as-next-day vehicle delivery to Erie and Reading.

Pittsburgh is the second Carvana Car Vending Machine location in Pennsylvania and the 16th in the U.S. Carvana first entered the Pittsburgh market in 2016 The company also moved into three more markets in Texas.

Carvana now operates in Killeen, College Station and Waco.

The company offers expedited delivery in nine markets in Texas.

Carvana has operations in 108 cities across the U.S.

Shoppers Say They Want to Finance Online, Still Apply at Stores There is a disconnect between consumers’ finance preferences for current loans and consumers’ finance preferences for future loans – with the largest gap centered on digital.

That is a key finding of FICO’s second annual global survey on con-

sumers’ perceptions of their vehicle financing experience.

The research looked at how consumers view the financing of their new and used vehicle purchases, as well as how vehicle finance companies are currently meeting customer expectations.

More than a quarter of consumers (28 percent) listed online financing as their first choice for their next loan, an increase from the number of current online borrowers (13 percent).

Meanwhile, 63 percent of consumers applied for their current automotive loans from the dealership.

However, only 40 percent said dealership financing would be their first choice for their next automotive loan.

While dealership financing continues to be the preferred loan option, online loans are gaining traction, driven by changing consumer expectations.

Dealers Floor Plan Trucks, Sedans The Most Trucks and sedans, which are typically practical and affordable options for customers, dominated the list of NextGear Capital’s Top 10 Floor Planned Vehicles of 2018.

While crossover utility vehicles

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and sport utility vehicles gained a larger share of the new car market in 2018, trucks and sedans continued to show their value in the used-car market.

The Ford F150 and Chevrolet Silverado, the two best-selling new vehicle models last year in the U.S., also were popular on the used car side and topped the list of floorplanned vehicles.

Midsize sedans, including the Toyota Camry, Nissan Altima, Honda Accord and Ford Fusion, ranked high, too.

America’s Auto Auction Buys Sale

Ituran Reports Higher Revenue Ituran Location and Control Ltd. announced strong results for the fourth quarter.

Revenue was $79.2 million, up 31 percent year-over-year.

Seventy percent of revenues were from location based service subscription fees and 30 percent were from product revenues.

Revenues from subscription fees increased by 24 percent. Ituran’s subscribers increased to 1,770,000 at year-end.

Net income was $15.2 million, up 55 percent year-over-year.

Ituran generated $18.5 million in quarterly operating cash flow.

America’s Auto Auction has acquired Greater Boston’s Lynnway Auto Auction.

Lynnway Auto Auction has been The Carpliance 2019 “Thank You” owned and operated by Jim Lamb spread in the March 18 issue misand George Russo, who founded the identified attorney Michael Goodfacility in 1997. man of Hudson Cook.

Both former auctioneers with more than 30 years of experience in vehicle remarketing, Lamb and Russo have built a sale that draws customers from throughout the Northeast.

In 2011, the pair moved the aucPAGE 14 tion to its current location, an eightlane facility on 58 acres, 30 minutes northwest of Boston.

GETTING IT STRAIGHT

Published By General Media LLC USED CAR NEWS (ISSN 1555-7413) is published at 24114 Harper, St. Clair Shores, MI 48080 Phone: 586-772-5200 or 800-794-0760 Fax: 586-772-9400 www.usedcarnews.com Charles M. Thomas - Founder (1947-2002) Lynda R. Thomas, Publisher Colleen Fitzgerald, General Manager Columnist: Tony Moorby

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

Circulation: subs@usedcarnews.com

Contributing Writers: Ed Fitzgerald Advertising: Shannon Colby, Account Manager Marie Hingst, Account Manager

Production: Tom Savage, Production Manager Cee Lippens, Web Master

Vol. 25 · No. 1 Used Car News is published the first 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.

Join the Conversation!

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. © 2019 JPMorgan Chase Bank, N.A. Member FDIC.

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Visit Used Car News online at www.usedcarnews.com or scan this QR code with your smartphone to be taken directly to the website.

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USED CAR NEWS

April 1, 2019 • 5

State Sues BHPH Dealer Practices at a pair of New Jersey buy-here, pay-here dealerships brought a lawsuit that seeks to ban the stores’ owner from doing business in the state.

Attorney General Gurbir S. Grewal’s oice sued Nu 2 U Auto World in Clementon and Pine Valley Motors Inc. of New Jersey in Berlin for allegedly targeting “inancially vulnerable consumers in predatory sales and loan tactics.”

The suit also names Kenneth P. Cohen, owner of the two stores.

The attorney general has asked the court to permanently close Nu 2 U and Pine Valley, and forever ban Cohen from the used-car business in New Jersey.

The state is seeking the maximum statutory civil penalties for each and every violation.

It also wants the stores to repay any consumers who lost either money or personal property.

“Governor Murphy promised New Jersey consumers increased protections against inancial exploitation and we’re making good on that promise,” said Attorney General Gurbir S. Grewal.

The state’s release on the suit describes the store’s typical buy-here, pay-here practices in harsh terms, saying they sold “high-mileage, used autos at grossly inlated prices” to “consumers unable to acquire credit at more traditional car dealerships.”

It goes on to say the stores’ inancing came “with high interest rates and draconian terms that created a high risk of default.”

The AG also accuses the store of “churning” – repossessing and reselling the vehicles over and over again to diferent consumers.

In regard to vehicle pricing, the AG says that in “some cases the down payment alone nearly paid of the value of the vehicle.”

The release uses the example of a 2004 Nissan Maxima valued at $1,789 to a consumer making $16 an hour.

It doesn’t specify if that is the For Cars, Trucks and Vans

wholesale value.

The store required a down payment of $1,148 and inanced the sale with 148 weekly payments of $75.

This would have resulted in a total payment of $13,087.

The defendants also never provided the vehicle registration to the consumer.

In another example, the store sold a 2007 Nissan Maxima to a 22-yearold that he only owned for four months.

The stores placed numerous requirements on their customers in addition to the high down payments.

The dealerships required buyers to sign documents agreeing to not keep any personal possessions in their vehicles.

They also had to rekey the vehicles at personal expense and provide the dealer with a copy of the keys within seven days of purchase.

Under the terms of the agreement, failure to make a copy of the key was yet another ground for repossession.

As for the churning charges, the AG uses several examples: a 2002 Acura TL that was sold ive times in the course of a year; a 2009 Chevy Malibu that was sold six times over the course of three years; and a 2006 Dodge Charger that was sold eight times over the course of ive years.

“We allege these defendants targeted low-income individuals, luring them into dealerships with misleading advertising, and locking them into burdensome inancial arrangements,” said Paul R. Rodríguez, Acting Director of the Division of Consumer Afairs.

“We are sending a clear message that New Jersey will stand up for its most vulnerable consumers and not allow them to be abused in this fashion.”

The State alleges that the defendants violated the New Jersey Consumer Fraud Act, the Used Car Lemon Law, and the state’s motor vehicle advertising regulations.

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USED CAR NEWS

Honda Recalls More Than 1 Million Units for Airbags Honda is recalling more than 1 million vehicles to ix potentially exploding airbags that were used to replace defective Takata units.

Honda is recalling the following vehicles: 1,108,939 2003 Acura 3.2CL, 2013-16 ILX, 2013-14 ILX Hybrid, 2003-06 MDX, 2007-16 RDX, 2002-03 3.2TL, 200406, and 2009-14 TL, 201013 ZDX and 2001-07 and 2009 Honda Accord; 200105 Civic, 2003-05 Civic Hybrid, 2001-05 Civic GX NGV, 2002-07 and 201011 CR-V; 2003-11 Element; 2007 Fit; 2002-04 Odyssey; 2003-08 Pilot, and 2006-14 Ridgeline.

The afected vehicles received a replacement driver air bag inlator as part of a previous Takata inlator recall remedy or a replacement driver air bag module containing the same inlator type as a service part. Due to a manufacturing error, in the event of a crash necessitating deployment of the driver frontal air bag, these inlators may explode.

Honda will notify owners,

and dealers will replace the driver’s air bag inlator with an alternate inlator, free of charge.

Owners will be notiied of the recall beginning on April 17. However, dealers are ready to begin repairs immediately.

Honda’s number for this recall is O41. Acura’s number for this recall is U40.

In other recall news, Subaru of America Inc. is recalling 1,303,530 2014-16 Forester, 2008-16 Impreza sedans, 2012-16 Impreza station wagons, 2008-14 WRX sedans (including STI), and 2013-17 Crosstrek vehicles.

Exposure to certain contaminants may cause the brake light switch to malfunction, preventing the brake lights from illuminating and also preventing keyless ignition vehicles from starting and CVT/automatic transmissions from being able to be shifted out of Park.

Subaru will notify owners, and dealers will replace the brake light switch, free of

charge. The recall is expected to begin April 29.

Subaru’s number for this recall is WUE-90.

Audi is recalling 74,881 2016-18 Q7, A6 and A7 vehicles, and 2015-18 Audi A8 vehicles.

The left and right fuel rails may leak fuel.

Audi has notiied owners, and dealers will replace the left and right fuel rail, free of charge. The recall began Feb. 28.

Audi’s number for this recall is 24DP. Chrysler is recalling 8,933 2017-19 Fiat Spider 124 vehicles equipped with automatic transmissions.

Due to incorrect programming of the Transmission Control Module (TCM), certain conditions may cause the vehicle to unexpectedly downshift and abruptly decelerate.

Chrysler will notify owners, and dealers will update the TCM software, free of

charge. The recall is expected to begin March 27.

Chrysler’s number for this recall is V20.

Acura is recalling 4,455 2014-2019 Acura ILX vehicles.

The vehicles may have a deformed fuel tank, raising the height of the fuel pump and allowing the fuel level loat to stick, possibly causing the fuel gauge to display an inaccurate fuel level.

Acura will notify owners, and dealers will inspect and, as necessary, replace the fuel tank, free of charge.

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FINANCE 2018 DATA SOURCE BOOK

AVERAGE LOAN AMOUNTS CONTINUE TO CLIMB Source: Experian

2019 D TA

AFFORDABILITY LEADS TO EXTENSION OF LONGER TERM LOANS Source: Experian

SOURCE BOOK

LONG TERM LOANS ARE PREDOMINATELY FOUND ON LATE MODEL USED VEHICLES

USED CAR NEWS

Source: Experian

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WHOLESALE DATA 2018 DATA SOURCE BOOK

U.S. AUCTION INDUSTRY SALES VOLUME BY SELLER TYPE

(Year-to-Date December 2017) (Year-to-Date December 2017) Increase/(Decrease) Versus Prior Year

Source: ADESA

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FLEET/LEASE SALES OF THREE-MY-OLD UNITS W/36K-45K MILES Source: ADESA

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Model Class Jan-18 Midsize Car Midsize SUV/CUV

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USED CAR NEWS

Source: ADESA

5

2018 DATA SOURCE BOOK

FINANCE

Source: Experian

AVERAGE USED PAYMENTS REACH RECORD HIGHS

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USED CAR NEWS

Data, Insight Aid Dealers M Logic is a new suite of products from Manheim that brings data and insights from Manheim and Cox Automotive to wholesale clients.

The goal is to put Cox Automotive’s data to work for clients by adding science to the art of profitable decision-making.

“The concept of helping clients make smarter, real-time decisions is something we have been doing a long time,” said Ben Flusberg, associate vice president of M Logic.

“But now, M Logic combines efforts across Manheim to provide even better solutions that help our wholesale clients take action for faster transactions and greater profitability.”

M Logic products focus on valuation, optimization and personalization.

The data aggregated by M Logic that makes pricing optimization happen includes 10 million wholesale transactions, 30 million retail transactions, 48 million vehicle descriptions from manufacturer build data and information from 101 million individual vehicle options and packages. Manheim expects to use AI to price more than 600,000 client vehicles across its digital and physical marketplaces this year.

The number of vehicles priced has grown by more than 100 percent each year over the past few years.

Using Pricing Optimization to price this number of vehicles has the potential to achieve between $30 million and $120 million in client profit lift.

Manheim currently partners with several clients on Location Optimization and optimizes the distribution of approximately 200,000 client vehicles annually. On average, Location Optimization helps clients gain an additional $50 in profit per vehicle.

By recommending VIN-specific vehicle repairs to approve, Recon Optimization increases clients’ price retention and improves their return on reconditioning spend.

Typical profit lift for Recon Optimization clients is $50-100 per vehicle.

M Logic uses 32 million condition report line items across 5 million wholesale transactions to power this solution. Throughout 2018, Manheim piloted Recon Optimization with several clients, optimizing recon spend on nearly 30,000 vehicles across dozens of locations.

Recon Optimization will become available to additional clients within Manheim’s Seller Dashboard in late 2019.

Using machine learning to match Manheim inventory to the right buyers, the personalization solution helps dealers find and purchase the right vehicles faster and more easily. To accomplish this, M Logic exploits data from 10 million historical bid/buy transactions to identify dealer preferences around channel, location and vehicle attributes given current market conditions. The recommendations engine uses approximately 200,000 vehicles listed within Manheim’s marketplace on any given day against these dealer preferences, generating 2.5 million ranked buyer-vehicle matches daily.

Throughout 2019, dealers will automatically start seeing their personalized vehicle recommendations when they log on to Manheim.com.

In 2019 and beyond, M Logic will continue to deliver clients with personalized solutions that will streamline their experience within Manheim’s marketplace. In addition, M Logic will incorporate Forecast MMR, along with solutions that optimize client de-fleeting and pull-ahead decisions, into its suite of decisioning products.

CFPB Looks at Balances Deficiency balances have been the latest focus of Consumers Financial Protection Bureau examinations.

The CFPB recently released its latest Supervisory Highlight report, which includes a section on auto finance servicing activities.

The CFPB’s examinations identified unfair acts or practices related to collecting incorrectly calculated deficiency balances. Recent examinations have also identified deceptive acts or practices related to representations on deficiency balance notices.

The CFPB spotlighted cases involving ancillary products sold by captive finance companies to consumers who finance their used-car purchases and deficiency balances in its report.

One area of concern is the rebate

given when the consumer has included ancillary products, such as service contracts in the financing and then loses the car either through repossession or total loss.

If the product is canceled as a result, a rebate is then payable to first the creditor and then the consumer.

In many cases with service contracts, providers base the rebate on the miles driven. The finance companies are supposed to use the net miles added after the purchase of the vehicle, but often they use the total miles.

This decreases the amount of the rebate and increases the deficiency balances, sometimes by hundreds of dollars.

The CFPB claims that attempts to collect inflated deficiency balances harm consumers.

USED CAR NEWS

April 1, 2019 • 9

Title Pawn Faces Charges The California Department of Business Oversight filed an action to void loans and revoke the licenses of a prominent Southern California auto title lender, for numerous and repeated violations of the state’s lending laws.

The state claims Long Beachbased Fast Money Loan routinely charged customers more interest and fees than permitted by law and failed to consider borrowers’ ability to repay as required.

The company also openly used its lack of underwriting as a marketing tool and engaged in false and misleading advertising, the suit states.

It goes on to charge that Fast Money Loan operated out of unlicensed locations and failed to maintain required records.

In addition to the formal accusation, the state also began an investigation to determine whether the more than 100 percent interest rates that Fast Money charges on most of its auto title loans may be unconscionable under the law.

A 2018 court case gave the state power “to take action when the interest rates charged [by state-licensed lenders] prove unreasonably and unexpectedly harsh.”

The state found in two separate examinations that RLT Manage-

ment Inc., which does business as Fast Money Loan at more than 30 locations statewide, leveraged fees that borrowers owed to the Department of Motor Vehicles to push those borrowers’ loan amounts above $2,500.

This is the threshold at which state interest rate limits no longer apply.

State law caps interest rates at about 30 percent on auto title loans of less than $2,500. Fast Money added fees, paid to the DMV, to loans’ principal amounts to push those loans above $2,500 and beyond the rate caps.

From 2012 through 2017, Fast Money reported to the DBO that it charged more than 100 percent interest on about three-fourths of its auto title loans.

During that same period, Fast Money made about 1 percent of all auto title loans under the California Financing Law but carried out 5 percent of the auto title loan repossessions in the state.

In each year from 2014 through 2017, Fast Money conducted auto title loan repossessions four to five times more often than the average CFL auto title lender.

This was a rate of almost two vehicles a day.

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USED CAR NEWS

PEOPLE IN THE NEWS Compiled by Jeffrey Bellant Dealertrack Taps VP Dealertrack announced the appointment of Cox Automotive and industry veteran Mandi Fang to

Automotive’s new and used vehicle inventory management, merchandising, and DMS solutions for dealers and OEMs.

NADA Adds to Staff

Mandi Fang vice president and general manager of Dealertrack DMS. She will be responsible for overseeing Dealertrack’s DMS business.

Most recently, Fang spent ive years in product management, leading the ongoing development, growth and innovation of Cox

The National Automobile Dealers Association (NADA) announced two staf promotions, as well as the hiring of Juliet Guerra, a veteran communicator and public afairs professional, as director of media relations.

Jared Allen was pro-

Juliet Guerra

moted to vice president of communications earlier this year.

Allen joined NADA in 2015 as senior director, media relations.

He will continue to oversee NADA’s mediarelations engagement and strategy and serve as the organization’s primary spokesman.

Allen will also oversee much of NADA’s external communication strategy – including message development, digital communications and policy speechwriting – and will serve as a senior member of NADA’s policy-development team.

Additionally, Ben Tesfazghi has been promoted to manager of legislative afairs.

Tesfazghi joined NADA in 2016 as a legislative research analyst.

In his role as manager, Tesfazghi will help implement NADA’s legislative agenda by en-

gaging with members of Congress and congressional staf, as well as developing advocacy documents regarding NADA’s legislative priorities.

In her role as director of media relations, Guerra will help NADA further build out its advocacy communications capabilities, and will serve as one of the organization’s media liaisons and spokespersons.

Prior to joining NADA, Guerra was senior director at The Herald Group, a full-service public affairs irm, where she planned and implemented integrated communications strategies for corporations and trade associations, including the Japan Automobile Manufacturers Association.

Guerra is a graduate of Southern Methodist University with a bach-

elor’s degree in business administration.

Direct Auction Services Announces Changes Direct Auction Services Inc. announced leadership appointments across the company.

David Rush has been named president of Roadrunner Services.

During the coming year, the company plans to promote and hire additional managers and develop additional regions to grow beyond 50 locations.

Jef York has been named to the newly created position of president of Direct Reconditioning.

York founded Roadrunner Services and has served as its chief operating oicer since Direct Auction Services acquired it.

York, in his new role, will focus on safety, standardization and

David Rush training.

Renee Sherk has been named vice president of sales and stafing services for the Direct Auction Services team.

Sherk’s emphasis is on developing new business opportunities across all brands with recruiting being the highest priority to support the new business.

Sherk joined Direct Auction Services in 2016 as director of staing services.

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12 • April 1, 2019

RETAIL MARKETS OHIO Lisa Dugger, owner, Madison Motors, London, Ohio: “In 2008, when everything went (bad), my husband started a used-car lot.

The building we’re in used to be a Chevy dealership.

“We try to keep 30 in stock. We’ll carry less during other times of the year.

“I go to the auctions for inventory. My favorite is Value Auto Auction. I also go to Columbus Fair Auto Auction.

“We’re probably good for 12 (deals) per month. We’re a small dealer.

“What we actually do is lease-to-own.

“A typical term length is two years.

“In the last year or so, we changed all of our down payments to $1,500 down.

You bring $500 in and get your car. You pay the balance of the $1,000 inside of 45 days, then pay you’re regular payments start after that.

“Probably 40 percent of

the people make their payments and keep the vehicle at the end of the term. Or if a customer has been making payments for a year and their car is in good condition, they can bring that back to us. We can put them into another car.

“Our average model year is about 2007. We have a lot of 2007s right now. I try to keep the mileage under 140,000. The average payment is anywhere from $65 to $95 per week.

“We don’t sell as many cars as we do SUVs. I try to buy trucks, but they are expensive. So we’re probably 50 percent SUVs. “Inventory is 99 percent domestic.

“Average recon costs are about $800. We have an inhouse mechanic who works three days a week. We’ll do service work for our customers if they need it.

“We have a website. Our primary advertising is on Facebook. We also have an ad in the local bowling alley and we’re going to be in one

of the restaurant menus.

But most of it is Facebook and paid advertising.

“We recently leased a 2008 Jeep Liberty. It had 125,000 miles.

“I think it’s going to be a great year. We’re looking at doing thinks more economically, a little more streamline and eicient.”

TENNESSEE Tracy McMurtry, owner, Franklin Motor Co., Nashville, Tenn.: “We’ve been in business since 1987. We have one location.

“We keep about 80 on the lot. Tax season has changed over the years. It used to be very predictable. Obviously that’s changing. We don’t see as much of an increase as we used to.

“We sell about 60 a month on average.

“We’re a triple threat. We will inance anybody, any car. We’ll do in-house, subprime or regular retail. It used to be 15 percent retail and 85 percent subprime

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$ and in-house. Now we’re seeing 25 percent retail and 50 percent subprime and 25 percent in-house. I’d like to see that lip-lop and have 50 percent in-house.

“We use GPS just for repossessions.

“Our average retail price is $16,900.

“Our average mileage is about 80,000 miles. Our average model year is a ’16.

“We try to carry a solid mix of trucks, midsize and full-size SUVs. We’re struggling because it just seems like full-size trucks and fullsize SUVs are at a premium.

They have been much harder to acquire since the irst of the year.

“If you’re in-house inancing, the imports are much better. Honda and Toyota are always best for reliability. Trucks, for the most part, do what they need to do.

“Average reconditioning costs are about $1,180. Electrical we send out and paint and body, we send out. Most everything else we do inhouse.

$

USED CAR NEWS

Compiled by Jeffrey Bellant “We do outside service work, but we prefer to only work for consumers we have (sold to) with over the years.

“As far as advertising, I’m a corporate sponsor with the Tennessee Titans and the Nashville Predators. It gives me a lot of branding and makes people comfortable, knowing that I’m a reputable dealer.

“We do TV and radio.

We’re also doing digital marketing. I’m exploring that more.

“We recently sold a 2011 Audi Q7 with 102,000 miles.

We sold that for $14,900.

“We’ve also branched into a diferent market. We have a classic car inventory. We’re dabbling in that.

We have everything from a 1979 Nissan Patrol, to a 1969 F-100 Ranger pickup to a 1971 Cadillac Coupe de Ville.

“I want to target more of the in-house inance business in 2019. One, for the cash low, plus you get more of a repeat customer.”

USED CAR NEWS

April 1, 2019 • 13

WHOLESALE MARKETS Compiled by Jeffrey Bellant OKLAHOMA Bruce Beam, general manager, Dealers Auto Auction of Oklahoma, City, Oklahoma City: “We celebrated our 30year anniversary last fall.

“We are a ServNet auction and we have seven lanes that are open for use, but we use ive at the present time.

“Volumes have been up.

We’ve been running 850 to 1,000 cars every week. This time last year we were probably in the 750 area. We’ve just rededicated our business, trying to regrow it to where it was years ago.

We’ve improved our approach to customer service and the products we’ve tried to ofer.

“Our sales percentage rate at this time of the year is in the mid-50s.

“We’re heavier on the commercial volumes. We do have some that fall into a gray area, like the Ally SmartLane Program, that technically is a commercial lane but the units themselves are dealer cars. That’s

a program where Ally allows selected dealers to run their inventory in the Ally lane with the Ally units, repped

by Ally personnel.

“If we really break it all out, it’s probably 70 to 30, commercial to dealer consignment.

“We probably have 500 bidder badges represented in the lanes each week.

“The retail has been fairly slow for the irst 2 1/2 months this year. A lot of that has been weather-related, although we haven’t had it as bad as some people up north with the polar vortex.

We’ve had a few little ice storms and cold weather. It just doesn’t get the retailbuying public out on the street or in the mood to buy a car. Retail kind of stayed a little lat throughout the winter.

“This year we also had the government shutdown which delayed the tax season, which I call the myth of the tax season. In reality, the tax season is maybe a two- or three-week bump in

business. From a retail perspective or a wholesale perspective, we just have to do a better job year-round and eliminate those peaks and valleys.

“We’re member and users of Auction Pipeline and Auction Edge. We also post vehicles through Liquid Motors. We’ve also just signed up with Turn Auctions.

“I think our average price is probably around $11,000.

“From our perspective, we’ve seen our volumes grow and we expect them to continue to grow. We’re looking for new avenues – not only to source vehicles – but to promote, market and sell those cars 24 hours a day and seven days a week.

“I believe we should see a good year.”

WISCONSIN Karen Lallemont, general manager, Western Wisconsin Auto Auction, Chippewa Falls, Wis.: “We’ve owned this auction since 2005. We also have another location – Wisconsin

State Auto Auction – on the other side of the state.

“We’re basically a two-lane auction.

“Our volumes just started to pick up. We got slammed this winter with snowstorm after snowstorm. A couple of them came on sale days.

They are the worst.

“So it’s hard to compare this year with last year, because it’s not apples to apples. We broke records for snow.

“We didn’t have a bad winter until the polar vortex hit in late January. For the irst time ever, we ran a sale just on screen. It was like 20-below and 40-below windchill.

“Typically, we run between 180 and 220 this time of the year. We did hit that this last sale (in mid-March). All of the sudden, the phones started to ring. It’s like, the spring market just hit. Our volume shot up.

“At that sale, we were over 80 percent (conversion rate). But we always have fantastic sales percentages.

Even when we had the super bad weather, we’d still do 56 or 59 percent. So even when we had low volume, we sold high percentages. They are just through the roof up here.

“I think we had 80 dealers represented in the lanes and we had a quite an online presence.

“We use AWG. Participation had been going well online. We had some battles online this past week.

“Dealers are very optimistic. They are just starting to get busy now because our winter has been so bad.

“We are mostly dealer consignment. We had about 23 repos at a recent sale. We are starting to pick up a little nicer repos. We’re getting some credit union repos that tend to be a little nicer.

“Our average price in the lanes is about $2,500, but in (mid-March) that has gone up in the mid-$3,000s.

“We’re positive for this year now that we’ve got past the bad weather. I think we’re going to do well.”

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USED CAR NEWS

DISCONNECTED JOTTINGS FROM It’s not that long ago since folks here, as well as in the UK, considered eating to be little more than a necessary bodily function – eating to live rather than living to eat.

What changed?

The notion that travel broadens the mind has a great deal to do with the growth of culinary influences.

Those lucky enough to have visited other countries in periods of relative peace, rather than being part of an invasive or defensive force, have seen the vigorous pursuit of gustatory satisfaction, passionately undertaken in many parts of the world.

Indeed, the practice has extended to tourism solely dedicated to the experience and enjoyment of food.

I don’t mean a quick trip to the local market to buy a jar of chutney, although that scene is a burgeoning part of the same phenomenon.

It’s now possible to organize a trip from one end of Italy to the other, purely eating in local peoples’ houses.

TONY MOORBY

Regional difference are fabulously shown off and change by destination with the very people who live and breathe different ways of life and who are only too keen to share their kitchens, talents and knowledge.

The other extreme could include a visit to France, indulging in stops at Michelin Guide-starred, gourmet restaurants.

Mind you, one doesn’t have to shell out that kind of cash to enjoy food in any part of France.

That being said, they don’t do breakfast the way we do; just an ethereally light and fluffy, buttery, crisp-soft croissant dipped into a mini bathtub of heady chicory café au lait.

But they do make it up over a two-hour lunch – a lot more civilized than scarfing down a plastic turkey and Swiss on rye whilst still pecking away over a hot computer keyboard in the office.

We’ve yet to learn that productivity can go up with well

rested employees!

The enjoyment of food is so popular now that we don’t even have to leave the neighborhood, let alone the country.

Even a trip to our local Chinese has become a wraparound total Asian experience with Korean options and sushi, too.

Mexican food, once dependent on its Tex-Mex connections, now stands proudly on its own, extolling the differences between the Baja and Oaxaca.

We have a joint called Uncle Julio’s that insists on everything being as fresh as possible – they make guacamole tableside.

You want to rub it all over your body!

The Nashville Farmers’ Market has shifted from being a total falsehood – I’d like to meet the “local” vendor that was growing his own bananas and pineapples while pretending that tomatoes in winter came from his bottom forty!

The authorities now insist

that produce is local and if it’s not organic then you’re not in contention.

Our local Franklin market is much smaller but a total joy to wander around and talk to the folks who grew the stuff.

As a self-confessed foodie, the smorgasbord (sorry) of assorted, global indulgences is manna (sorry) from heaven.

I’m a fool for falafel, a glutton for guajarati and a sucker for succotash.

Yes, an appreciation for regional American food is rid-

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. Aid to reversing onto a street, 3 words 8. Temp. control in a car, abbr.

24. ___meter (measures distance travelled) 25. Aston Martin letters 26. he p in mpg

10. Miss. neighbor

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key to night vision 15. Technology that provides a 360 degree view 18. __ __ rule (usually) 19. he D in LDWS systems 23. Slangy airmative

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ing the same success.

Immigration is widely responsible for our shared table fare.

As an ex-pat Brit, I love Indian and any oriental food and the Nissan U.S. headquarters is a stone’s throw away. I’m now spoiled for choice.

Here’s a supreme irony: an Englishman from the Midlands and his family have opened a place nearby and make the best fish and chips this side of the Atlantic.

Now, if only I could find a decent liver and bacon!!

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14. Groove

Solution to this puzzle in the 4/15/19 issue. Call 1.800.794.0760 for a FREE subscription.

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