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September 2, 2019

Imports Top J.D. Power Resale Value Awards

JD POWER RESALE VALUE AWARDS - file photos HALLS OF POWER: For the awards, 256 vehicle models were evaluated using a sample of more than 630,000 transactions with an average of 2,400

transactions assessed on each model. Lexus, Honda and Toyota came out on top of the 2019 J.D. Power Resale Value Awards. Lexus took home six model-level awards, followed by Honda with five, Toyota with four and Porsche with three. The GMC Sierra 3500 was named as having the best overall resale value in the industry. The awards recognized the best resale value across 26 model-level segments following three years of ownership. Vehicles that retain a strong resale value also typically have higher residual values. “One of the biggest concerns for many new-vehicle owners is depreciation,” said Jonathan Banks, vice president of Vehicle Valuations & Analytics at J.D. Power. “Our trans-

action database shows the models that have the lowest depreciation costs, which can be very helpful to new-car buyers when deciding on their purchase.” For the 2019 award process, 256 vehicle models were evaluated using a sample of more than 630,000 transactions with an average of 2,400 transactions assessed on each vehicle. The award selection process utilizes used vehicle wholesale prices, which represent how much a dealer pays for a used vehicle. These prices are then divided by the vehicle’s original purchase price. These calculations are based on wholesale records from January through June 2019 for vehicles that are three years old. For the 2019 calculation, 2016 is

the applicable model year. The top resale models for Lexus are: Lexus CT; Lexus RC; Lexus GS; Lexus NX; Lexus RX; and Lexus LX. The leading Honda models are: Honda Fit; Honda Civic; Honda Accord; Honda CR-V; and Honda Odyssey. The top Toyota models are: Toyota Prius; Toyota Tacoma; Toyota 4Runner; and Toyota Tundra. Porsche’s top three are the Cayman; Porsche 911; and Porsche Panamera. Jim Theriault, a manager for Cohasset Imports in Massachusetts, said this year’s resale awards were no surprise to him. “We sell a lot of Toyotas, and Lexus, too,” he said. “But it can be dif-

ficult finding them. “The name of our business says ‘imports’ but we do sell others. It’s more of a type of car that we sell. We don’t go to auctions. “People know by word of mouth what type of car we want to sell. In fact, we’ve been having a lot of luck recently with Grand Cherokees. “The owner here is Peter Capozzoli and he’s been doing this for 35 years. People call our cars ‘Petercars.’” Tim Fleming, an analyst for Kelley Blue Book, told Kiplinger magazine that a vehicle’s depreciation “is the largest cost in owning a car, more so than fuel and repairs.” Even if car owners don’t plan to sell their vehicles, it’s important. Continued on page 6

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USED CAR NEWS

September 2, 2019 • 3

Digital Marketing Offers Big Opportunities By Jeffrey Bellant

To independent dealers, digital marketing may seem like a new thing, but it’s just part of what dealers have been doing for decades. “Marketing is the same as it’s always been,” said Tracy Myers, owner of Frank Myers Auto Maxx in WinstonSalem, N.C., a dealership started 101 years ago by his great-grandfather. Myers knows a little bit about marketing. He’s famous for television ads and outrageous costumes. But he knows marketing may look different today, it really doesn’t change. “We’re still trying to communicate the message we have to the people,” he said. Thirty years ago, the Big Three were TV, radio and newspaper – and maybe throw in billboards, Myers said. Now it’s all digital. Experts concur it all starts with the website. “The dealer website is the central hub of the dealer’s online showroom,” said Kami Tafreshi, president and CEO of AutoManager, a Los Angeles-based DMS firm focusing on websites and web-based marketing. Tafreshi said a dealer website needs to be mobile-first, fast-loading, customized and simple for customers with high-quality vehicle display pages, a call-to-action and contact info, along with search engine optimization. AutoManager’s WebManager tool can help dealers with all these goals. Kevin Lesage, director of Autotrader digital marketing, said a strong website is a must. “As a digital marketing guy, I feel you really have to have a constant in your marketing strategy – a foundation that doesn’t change,” he said. Building a website with a brand identity is first so a dealer has ownership of his direction, Lesage said. “If I only rely on third parties and budgets get tight, all of a sudden that can drastically affect my business,” he said. After the website, it’s getting out on third-party listings. Tafreshi said being able to export out to those thirdparty sites is also important, whether it’s Facebook, Cars.

com, Craigslist or other social media channels. Lesage said dealers need to make sure the tools and third-party listings integrate with their website or CRM because so much value comes with that. He believes in personalization, in which each person may get a different experience visiting the same site. Myers said the key is putting most of your money where you will get the biggest impact. “Let’s make the biggest splash we can in one place and then invest the ROI into something else,” Myers said. For independent dealers who struggle where to begin or where to focus, Myers said there’s one good starting place. “Facebook,” he said. He said it’s a good starting point for the smaller independent who’s selling 20 to 25 cars a month and looking at a sea of social media outlets. “If everything else is a pond, Facebook is still the ocean,“ Myers said. “There are so many eyeballs on Facebook.” Tafreshi said Facebook Marketplace is a newer channel helping dealers export their entire inventory

“The dealer website is the central hub of the dealer’s online showroom,” – Kami Tafreshi to the site, rather than one at a time. For a dealership, it also provides free advertising to a built-in audience. “Facebook Marketplace has been a game changer for the used car industry,” Tafreshi said. Lesage said independents should have a strong “why buy?” message across the listing sites they use. He also recommends independents look for efficiencies in marketing, which can come through the business

Photo Courtesy of Frank Myers Auto Maxx ATTENTION-GETTER: Tracy Myers, owner of Frank Myers Auto Maxx, is known for his television commercials and marketing. He said digital marketing is just a different way of doing the same thing.

units that they are already working with. Myers said the mistake he sees dealers make is putting a $750 buy into one site, a $750 into a second site and a $750 into a third site. “You’re not making a huge impact anywhere,” he said. Lesage said there is room to experiment, but only after you’ve established your place. “Make sure that you’re building a foundational strategy that you’re not going to change in three months because of a new flashy object that comes across the sales floor,” Lesage said. “The bulk of investment should be on the foundational stuff, with maybe a smaller budget to experiment with or testing flashy objects.” Tafreshi offered similar advice. “At the end of the day, dealers typically need to test a variety of channels and then put a large portion of their advertising budget on those channels that are providing them the best ROI,” he said.

Like they did with other media, dealers have different strategies to draw buyers, with tools like Google AdWords. “You want to be found organically,” said Daniel Koppy, a dealer based in Forest Lake, Minn. “So, you’re buying AdWords that are most used for your organic searches, such as ‘used cars near me,’ or ‘used cars in Forest Lake.’” Lesage said measuring the quality of the shoppers is everything. “A large percentage of traffic doesn’t show engagement,” he said, “and we’re really trying to help dealers figure out what investments lead to quality traffic that (actually) buys cars.” He said if dealers aren’t measuring the quality of traffic, the chances are they are wasting a big part of their budget. A customer who shows engagement is not just visiting a site, she is clicking on multiple photos of the car, clicking through the vehicle details page or watching a

video. Tafreshi said analytics and back-end data on a website help dealers measure engagement and success. Referral data and measuring click-through data help dealers do this. “Website performance and ROI are critical key performance indicators,” Tafreshi said. “Both (referral data) and (click through data) will maximize (dealers’) advertising budgets and help them understand which vehicles are getting more attention. “This will inform future decisions that will inevitably maximize profitability and efficiency.” Buy-here, pay-here dealers may have a difficult time with the traditional Internet listings, because so many of their deals are based on price. “Buy-here, pay-here dealers can’t really price their cars competitively,” Myers said. So targeted ads may work better for buy-here, pay-here. Continued on page 6


4 • September 2, 2019

USED CAR NEWS

NEWS BRIEFS Recall Search Tool Hits Milestone One hundred million vehicles have now been processed through a search tool aimed at creating greater consumer awareness of auto recalls. The Vehicle Recall Search Service (VRSS) reached the milestone this month after launching in March 2018. The program was developed jointly by Carfax, the Alliance of Automobile Manufacturers and the Association of Global Automakers, which collectively accounts for 99 percent of automobile production. Approved commercial and government entities, like departments of motor vehicles (DMVs), auto insurers and finance companies, are able to search for open recalls for thousands of autos at once, free of charge. Currently there are six state DMVs signed up for the tool, with New York being the first DMV to fully implement checks for open recalls during the vehicle inspection process to help improve public safety. Since the New York DMV started 10 months ago, they’ve checked 9.4 million vehicles and identified more than 1.6 million vehicles with open recalls. Drivers of vehicles that have open

recalls are notified at the time of inspection and recall details are included on the state inspection report. The California Bureau of Automotive Repair (BAR) is also working to implement VRSS into its emissions inspection process.

Car Buyers’ Satisfaction Drops Customer satisfaction with automobiles and light vehicles plummeted 3.7 percent to a score of 79 (on a scale of 0 to 100), according to a recent report. This is well below last year’s score of 82 and a level not seen in the industry since 2015, according to the American Customer Satisfaction Index’s (ACSI) Automobile Report 2018-2019. Quality, value, and key aspects of the driver experience have deteriorated, according to car buyers. European brands still lead Asian and U.S. cars despite a one-point downturn to 81. U.S. automakers gained back a point to 78, trailing European cars by the same gap seen in 2018. Asian manufacturers fell to their lowest score in five years following a dip to 79. Despite these declining scores, customer satisfaction with luxury

cars continued to outperform the generated during deployment of the mass market. driver or front-passenger seat belt anchor pretensioner could degrade Manheim Adds Simulcast Tools the tensile strength of the cable beManheim is introducing several low the level needed to restrain an new features to its Simulcast tech- occupant. Seat belt assemblies that nology, which debuted in 2002. do not adequately restrain the occuNew features include: pant in a crash can increase the risk • One platform that makes it of injury. Ford is aware of one report easier for dealers to view the bid- of injury related to this condition. ding/buying experience; This action affects 103,374 vehicles • Odometers and auction in the United States and federal terlights, indicating any special condi- ritories. tions of the sale, are now visible for Affected vehicles include: vehicles on the run list; • 2015 Ford Fusion vehicles • Visible proxy bid amounts built at Flat Rock Assembly Plant to remind dealers that they have al- from Aug. 1, 2014 to Jan. 30, 2015, ready placed a bid; and at Hermosillo Assembly Plant • Photo tabs that provide from Aug. 1, 2014 to Nov. 24, 2014. more visuals, larger images and • 2015 Lincoln MKZ vehicles multiple views, allowing dealers built at Hermosillo Assembly Plant to see the vehicles from different from Aug. 1 to Nov. 21, 2014. angles without being onsite, and Dealers will apply a coating to promore. tect the cable during a pretensioner These enhancements will be rolled deployment. The Ford reference out to clients later this year and into number for this recall is 19S25. early 2020.

Ford issues Seat Belt Recall Ford Motor Company is issuing a safety recall for select 2015 Ford Fusion and 2015 Lincoln MKZ vehicles for an issue involving seat belt anchor pretensioners. In affected vehicles, increased temperatures

PAGE 14

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 Editorial: Jeffrey Bellant, Staff Writer

Columnist: Tony Moorby

Contributing Writers: Ed Fitzgerald, Radiance Cooper

Circulation: subs@usedcarnews.com

Advertising: Shannon Colby, Account Manager Marie Hingst, Account Manager Emily Brown Baker, Sales Support

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

Vol. 25 • No. 11 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 first time advertisers must accompany the insertion order. Distribution is guaranteed by the USPS. The advertising reservation deadline is 12:00 noon Thursday, 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 specifications please email colleen@usedcarnews.com.

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


USED CAR NEWS

September 2, 2019 • 5

Gabler Indicted by Feds By Jeffrey Bellant

Andy Gabler, former president of the National Independent Automobile Dealers Association, has been indicted on multiple counts of wire and bank fraud. He faces up to 510 years in prison and a fine of $17 million if convicted.

Auto Sales and Lakeside Chevrolet, while deliberately failing to remit the paperwork and payment to the extended warranty company. Brady also stated that the defendants “falsely reported vehicles sales to General Motors for vehicles that had not been sold in order to obtain expiring incentive rebates.

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Photo by Jeffrey Bellant BEFORE THE FALL: Andy Gabler, shown above after becoming president of the National Independent Autombile Dealers Association, now faces a 13-count federal indictment and prison time for wire and bank fraud.

He served as NIADA’s president from 2017 through Jan. 31 when he resigned, one day after authorities executed search warrants on his dealerships and home. In an interview with Used Car News some eight months earlier, Gabler discussed the importance of a dealer’s reputation in their community. Gabler, 50, of Harborcreek, Pa., and his former finance manager, Chuck Bednarski, 48, of Fairview, Pa., were named as defendants in the 17-count indictment from a federal grand jury. Bednarski faces up to 330 years in prison and an $11 million fine if convicted. The pair were scheduled for arraignment in federal court on Aug. 26, prior to Used Car News going to press. The indictment alleges, among other things, that between January 2015 and January 2019, the pair falsely indicated that customers made a down payment and falsified and inflated the income of customers when submitting loan applications to financial institutions on behalf of customers, said U.S. District Attorney Scott W. Brady. Gabler is also accused of selling extended warranties to customers buying vehicles vehicles at Lakeside

The indictment also accuses the pair of creating fake buyer’s orders, containing dates later than the actual vehicle sales, to be submitted to the bank during monthly audits. “Finally, the defendants deliberately did not inform S&T Bank when Lakeside Auto Sales and Lakeside Chevrolet sold a vehicle that the dealerships had purchased utilizing S&T Bank’s floorplan financing in order to delay and attempt to avoid the dealership’s required payment to the bank for the purchase of the vehicles.” U.S. Attorney Christian A. Trabold will be prosecuting the case on behalf of the government. Gabler did not reply to a Used Car News email requesting comment. Steve Jordan, CEO of the NIADA responded to a request for comment with a statement. “NIADA does not comment on the ongoing judicial proceedings of one dealer, except to say that as an association, NIADA works with the industry and its members to assist in their compliance with federal, state and local laws. NIADA strongly opposes any action that violates these laws, particularly actions that are unfair or deceptive trade practices or those that undermine consumer protection, defraud or bring disrepute to the used motor vehicle industry.”

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6 • September 2, 2019

USED CAR NEWS

Marketing – Continued from page 3

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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 affiliates and are licensed to JPMorgan Chase Bank, N.A.(“Chase”). 3

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 affiliates 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 affiliates are affiliated with ADESA, Inc. or Manheim, Inc. Each auction is solely responsible for their website content, sales events, promotions, fulfillment and operation of the auction. Dealer communication only; not intended for retail purchaser. © 2019 JPMorgan Chase Bank, N.A. Member FDIC.

“On Facebook, we target credit scores. We can target people within a 15-mile radius of the store,” he said. With things like geofencing, Myers can target people who have visited a competitor’s lot. He uses an after-hours tool that if someone visits his lot after the dealership is closed, they’ll be served up ads specific to that customer, knowing the customer was there at that time. In the pre-Internet days, terms like “reach-and-frequency for TV ads, or GRPs (gross rating points) on the radio side,” he said. “Now, with digital, they talk about ‘impressions.’ “Well, impressions can fool you.” An ad rep will tell a dealer they can have four million impressions, but the question is, did it help the dealer develop leads and sell cars? Lesage said once a consumer has clicked on a site for a white Toyota Tundra, for example, it’s about

staying engaged and following that consumer via the Google display network. The next time a consumer goes online over the next 30 days, they will come across that image or ad for a white Toyota Tundra. “Data companies are definitely listening,” he said. “They are definitely personalizing ads much more.” Lesage said Autotrader has a tool called “audience retargeting,” so that when they click on the Toyota Tundra, instead of going to the third-party site, it brings the consumer straight to the dealership site that has the vehicle, even if the buyer never heard of the dealership. Lastly, Tafreshi said dealers must pay attention to Yelp and other online reviews. “Dealers who don’t understand how important third-party reviews are in building trust and, thereby, confidence in their brand, will lose out,” he said.

Resale – Continued from page 1 how the vehicle retains its value. If a car is totaled in an accident, insurers will write the owner a check for the value of the car at the time of the accident. Midsize pickup trucks and midsize and large SUVs historically hold their value best, according to Kelley Blue Book. That’s because cheaper gas and improved fuel economy have made those vehicles more attractive. Electric vehicles and subcompact and luxury cars depreciate the most. Porsches are an exception because that brand’s low volume creates demand. Kiplinger reported that resale values vary widely among models within the same brand. For example, the Toyota Tacoma truck was named Kelley Blue Book’s resale winner for 2017, holding 67.5 percent of its value after three years and 57.5 percent of its value after

five years. The 4Runner SUV came next, with a resale value of 62.2 percent after three years and 52.5 percent after five. But the Prius C and Yaris models held only about 30 percent of their value after three years and 20 percent after five. Kiplinger pointed out that Kelley Blue Book and Edmunds.com both offer “cost to own” tools. These tools allow customers to enter a make and model and calculate additional costs of vehicle ownership, including depreciation, over the course of five years. The higher the depreciation figure, the more value it loses over time. Customers take advantage of depreciation by buying a used car instead of a new one. When there is a glut of off-lease vehicles, prices for used cars decline.


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8 • September 2, 2019

USED CAR NEWS

Physics Impacts MPG

(AP) Sport utility vehicles have become more fuel efficient over the years, however they still rank behind cars when it comes to gas mileage. And physics is to blame. Because SUVs are heavier and taller than cars, they run into more wind resistance, no matter how sculpted their bodies are. “All things being equal, if you put the same powertrain (engine and transmission) in a vehicle that is taller and heavier, you’re going to get better fuel economy out of the car than with an SUV,” said Jake Fisher, director of auto testing for Consumer Reports. A comparison of the 10 top-selling 2019 SUVs and comparable cars with similar gasoline powertrains found that in all cases, cars beat the SUVs in mileage, in several instances by 14 percent or more. The comparison is between two-wheeldrive vehicles. About 70 percent of new-vehicle sales in the U.S. are SUVs and trucks and 30 percent cars as buyers opt for higher seating and more space to haul people and goods. It was about 50-50 just six years ago. SUVs also often are all-wheel-drive for better bad-weather performance, and they usually can tow heavier items. Many SUVs were based on truck underpinnings a decade ago, but as fuel prices spiked at times during the early 2000s, more efficient carbased SUVs started to gain in popu-

larity. Large truck-based SUVs are still around now, and they, too, get better mileage. But few gasoline-powered SUVs come anywhere close to comparable cars, according to Environmental Protection Agency estimates. For instance, the most efficient gas-powered SUV in 2019, the small Nissan Kicks, gets 33 miles per gallon in combined city and highway driving. But the most efficient gaspowered car, the compact Mitsubishi Mirage, gets 39 mpg, 18 percent better. Even though SUVs and truck sales keep growing, research shows buyers still want better fuel economy, said Stephanie Brinley, principal automotive analyst, IHS Markit. Most buyers, though, pick the type of vehicle they want and then check for mileage, she said. Brinley says consumers will return to cars en masse if gas prices spike at the same time the economy goes sour and people think their jobs are threatened. Brian Moody, executive editor of Autotrader, predicts some buyers will return to cars after they no longer need larger SUVs to transport children and their gear. As more automakers cancel car models in favor of SUVs, sedans that are left will be top-notch vehicles, updated with new technology that includes smaller, more efficient turbocharged engines, he said.

Nissan Settles Lawsuit (AP) Nissan Motor Co. has agreed to pay $1.5 million to the estate of an 18-year-old who died in the crash of a car that lacked side-curtain air bags. South Carolina reported Nissan Motor Co. and Ashlynn Overton’s estate settled, with her estate receiving approximately $776,030 and the lawyers about $675,000. Overton was a high school senior in Charleston in 2017 when an oncoming vehicle veered into her

lane, hitting the front bumper of her 2016 Nissan Versa and causing the rollover crash. Overton was ejected from the car. Overton’s estate attorney Chris Moore said side curtain air bags weren’t installed in her vehicle, which may have prevented fatal head trauma. Nissan attorney Kevin Malloy said no law required side air bag installations at the time of the crash.


10 • September 2, 2019

USED CAR NEWS

State Quality Dealer: Like Father, Like Daughter By Jeffrey Bellant

Jennifer Knights, general manager of M & M Motors, won the Georgia Quality Dealer of the Year – 20 years after her father Larry Mannion won the same award. Knights, a member of the Georgia Independent Automobile Dealers Association since 2004, received the award during the group’s annual convention in July. “It means the world to me,” Knights said. “To win something like this from other dealers, it’s amazing.” Her first reaction was joy and surprise. “It’s an honor to represent the State of Georgia as the Quality Dealer of the Year,” Knights said. “My father won the award in 1999. It’s surreal to win it 20 years

later. I’ve always strived for excellence. The fact that I stood out among thousands of exceptional dealers in Georgia is incredible. I’m truly (honored) to represent the state of Georgia and Georgia IADA with this honor.” Knights is a third-generation dealer. Her grandfather started M & M Motors in Savannah, Ga., and her father opened a lot in Hinesville, Ga. She said her father was “as proud as could be.” “I grew up around the industry and would attend Georgia IADA meetings with my father as a child,” Knights said. “My dad runs a lot, with my brother, and he is a former (association) president. I began working full-time in 1998. It’s in my blood.” Knights is an executive

“It’s an honor to represent the State of Georgia as the Quality Dealer of the Year.” –Jennifer Knights

committee member and stays involved in the association, one of the largest in the country. She hopes to promote the award through her dealership. “More than anything, it’s nice to get acknowledged,” Knights said. During the event, the association joined with Cox Automotive, ADESA and Wayne Reaves to present three students with scholarships. Gracey Eldred, Julianne Moon and Collis White, children of association members, were awarded $4,000 scholarships. “We’d like to thank our sponsors for their generous investment in our students,” said Amy Bennett, executive director of Georgia IADA. “Their constant support for our community is unmatched.” For the third consecutive year, partial proceeds from the Georgia IADA Convention & Expo were donated to Camp Sunshine, a program

Photo Courtesy of Georgia IADA TOP QUALITY: Jennifer Knights receives the Georgia Quality Dealer of the Year award from fellow dealer Sherold Salmon during the state associaiton’s annual convention.

that focuses on enriching the lives of children with cancer. Dealers and vendors raised $6,000 in donations. The donation will cover summer camp for 6 children

with cancer. Nearly 600 dealer attendees showed up to get their continuing education credits and participate in the trade show.

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RETAIL MARKETS MINNESOTA Daniel Koppy, owner, Koppy Motors, Forest Lake, Minn.: “I’ve been in business since 1993 in Forest Lake. The family name has been in the business since 1936. In fact, I had a guy who came in to buy a truck a few weeks ago who worked for my grandfather back in 1960. “We also have a service facility in Forest Lake and then we have a small retail outlet in Hinckley, Minn., about an hour north of us. “Our average car sale in Forest Lake is in the $12,000 to $15,000 range. In the smaller store, it’s in the $8,000 to $12,000. “In Forest Lake, we keep about 80 cars. “(I acquire some inventory through) some relationships with other dealers. I also get some online, from Manheim, SmartAuction, ADESA, etc. I also get buybids from other dealers. “We’re averaging 30 to 40 sales per month.

“The average vehicle on our lot is going to be five- to eight-years old. For mileage, we try to target in that 50,000- to 80,000-mile range. “We’re fairly diverse in what we carry. It’s about one-third trucks, one-third SUVs and one-third cars. As we come into the fall, I’m really focused on trucks. “We’re a little heavy on the domestic side “Import cars are popular here, so we’re probably 50/50 on cars (import to domestic). But trucks are predominately domestic here. SUVs are predominately domestic. “Our average reconditioning is running $600 to $800 per car. We’ve got a five-bay service facility. We started it for our own benefit, but we expanded to include retail service. We fortunately have some really good techs. We just got a young man right out of auto tech school. We got him literally the day he graduated. “We’re advertising

through Cars.com, CarGurus.com, Facebook Marketplace, Craigslist and Google. We spend a lot of digital dollars. We still do some print at our smaller dealership. “We recently sold a 2007 Chevrolet Silverado, crew cab, four-wheel drive. It was a one-owner truck with 110,000 miles. We sold that for $14,500. “I’m feeling a lot more confident as we go into fall.”

UTAH Richard Hinton, owner, Small Town Auto Sales, Hurricane, Utah: “We’ve been in business 33 years. “We have one location. “I keep about 50 to 60 in inventory. Right now, it’s closer to 50. It’s a little bit down right now. I just think cars have been a little harder to come by – quality ones, at least. “We sell probably 20 cars per month, on average. “Mostly, we acquire our (vehicles) from the auctions. We’ve kind of length-

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USED CAR NEWS

Compiled by Jeffrey Bellant

ened our reach from Las Vegas to Phoenix to Southern California. “We’re just straight retail. We’ve done buy-here, payhere before, but I’m not a chaser. I don’t track people down very well. “I would say our average price on the lot is about $16,000. We try to have a cross-section of vehicles. We have some as cheap as $4,000, and some up to $20,000 or $25,000. But $16,000 is probably the average and that’s the way it’s always been. “We get a lot of lease returns (for the inventory), so there are a lot of 2015, 2016model years with mileage in the 20,000 to 30,000 range. “I would say 60 percent of inventory are cars and the rest are trucks and SUVs. Trucks are a challenge, more so than cars. It seems like you have to try harder to find good trucks. I would say this is a truck area. There are a lot of people who look for trucks. “We are probably 70 per-

cent imports, like Toyotas, Hondas, things like that. It’s typical of this area. “We have a pretty nice outdoor electronic sign at our dealership (that helps draw people). “For advertising, it’s probably mostly all digital. We have done radio before, but it hasn’t worked great. We don’t do the newspaper anymore. “(For digital advertising), we use CarGurus. There is also an outfit in Utah called KSL Cars (a classified site) that we use. “We also advertise our website quite a bit. “The year started off really good, but it’s fallen off a bit the last couple of months. A lot of that depends on your inventory. If you have the right stuff, then you’ll have a good month. But then you have to load up for next month and it’s hard to do that. “The local economy is pretty strong.”

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USED CAR NEWS

September 2, 2019 • 13

WHOLESALE MARKETS Compiled by Jeffrey Bellant ILLINOIS Shawn Glatz, general manager, Morton Auto Auction, Morton, Ill.: “We’ve been in business since December 1978. “We have four lanes. All four lanes go and we’re running about 500 cars a week. “We’re up about 1,000 sold units year-over-year which is good. I (attribute that) to a couple of different things. We were acquired by the XLerate Group in January, so Cam Hitchcock and all those guys came in and bought it. “It’s just an overall good vibe going on here. “Sales percentages are at about 62 percent. Our bidder badge count is typically in the 260 range. If you have a bigger sale that could grow another 100. But 260 is around average. “In the lanes, I’m hearing dealers say up and down. The reality is, it’s OK right now. They’re not breaking any records, but they’re all seeing some growth right in August. There’s been a de-

cent retail market pop here locally in August. “Our volume mix is probably 70 percent to 30 percent. Our commercial side is strengthening more than on the dealer side. Some of our commercial consignors are ARI, Automotive Rentals out of New Jersey, Westlake Financial, SRG and Remarketing by Element. Westlake has been one of our big (accounts) that we got in the past (12 months). We’ve sold upwards of 500 already in the first seven months of this year. “On the second and last Wednesday of every month, we do a push-pull-drag sale for anything that’s inoperable or ‘mechanically challenged.’ It’s usually around 25 to 30. “We use Edge Simulcast online. We’ve sold 8,200 units (through mid-August) and 428 of those through simulcast, which does not include things like SmartAuction or OVE. “At one recent sale, the average price across the block

was $6,100. It’s a decent price point. “We’ve got a good ball rolling right now. I’m optimistic for continued growth (for the fall) before (the slowdown in November, December). XLerate’s been very good and supportive. They let us do our thing, but it’s nice to have the support on the back end.”

PENNSYLVANIA Clint Weaver, general manager, America’s Auto Auction - Harrisburg, Mechanicsburg, Pa.: “We’ve been in business going on 37 years. We’ve been with America’s for four years. “We have six lanes, but we turn them into about 11 throughout the day. We re-use them for everything from dealer consignment, to lease to in-ops and specialty stuff. “We’ll start the sale with an in-op lane and then an overflow lane for dealers. With overflow, we might have a dealer with 50 permanent

numbers (of consignment), but he might have 60 cars that day. So, we’ll put that extra in the overflow lane. “When those two lanes get done, we’ll open up all six lanes to dealer consignment. As those lanes go down, we open up three to four lease lanes, depending on the volume. “We started running dealer consignment to start the sale back with the original owner Stan Hoynitski. Then we run the fleet/lease. We’ve always been able to keep it in place and, to be honest, I think it’s always been part of our success. It creates a little bit of a frenzy when the lease lanes start. “Our volume has done pretty good. We’re up yearover-year for cars registered and sold. We’ve been running right around 1,400 cars per week. Last year, we were in the 1,200 to 1,250 range. “I attribute it to customer service, No. 1. We really pride ourselves on that. The sales team has done a great job.

“Sales percentages have been about 62 percent. “We’re getting about 700 bidder badges every week. We get a lot of dealers from all over the country. “We’re probably 60 percent dealer consignment and 40 percent lease. “Our average sale price is $5,500 to $6,000. “On the last Thursday of each month, we have a heavy- duty/RV/ highline sale. That’s usually oversized trucks, bucket trucks and boxed trucks, things like that. It’s also RVs, motor homes, campers, boats and motorcycles. This time of the year, we’ll get 50-plus. “We use Edge Pipeline online. That’s taken off over the past two years. On average, we’ll sell 10 to 12 percent per week. I would have never guessed that two or three years ago. “We’re feeling good in Harrisburg. We’ve really got some momentum going. But the industry is changing, and we have to change how we do business.”


14 • September 2, 2019

USED CAR NEWS

DISCONNECTED JOTTINGS FROM About a year ago, I promised a revisit to the daily dilemmas of our dog diversions. A canine continuum with no end in sight as the kids add to the growing menagerie. I fail to understand how not one of our four children inherited my gene of disinclination toward dogs. Speaking of genes, I mentioned in my last that Olivia had taken delivery of a monster-in-the-making. As a pup, Charlie’s paws were like dinner plates, a sure indicator of the size of things to come. As dogs go, Charlie’s as handsome as he is intimidating and on his infrequent visits to our house, barges in as though he owns the joint, pushing coffee tables and small children out of the way, if an impediment to his progress. We were all trying to guess how many breeds had contributed to his shape and multi-colored coat so Olivia sent off a saliva sample to the canine equivalent of 23&me.

TONY MOORBY

I’m not sure how you cajole a sample from the mouth of one who could easily behead you, if he so chose – politely, I assume or bribery; a side of beef perhaps. Speaking of food, Charlie’s meals are delivered to the door and you need a mover’s dolly to shift the stuff inside! A truck went by the other day with 9 cubic yards of ready-mix concrete; “Oh, Charlie’s food’s here.” I joked. So the results of his gene pool came back to indicate that he is 40 percent Staffordshire Terrier, 30 percent Mastiff, 15 percent Sharpei and 15 percent Husky. Now, taken individually, any one of these would send terrifying tremors down to my toes, but all together? He could star in a horror movie as The Intimidator. But with Olivia he is a soppy, floppy lummox, just don’t stand near his wagging tail, as it would knock you clear to the other side of the room. His forebears must have

been nothing more than hound hussies, putting it around to anyone who happened by. The only purebred dog is Ally’s Blue French Bulldog – worth a small ransom – frankly, I’d take the money and run. It’s grown uglier by the day and to her, that’s part of the attraction – some perverse reasoning that ugly is cute so uglier must be cuter. Its eyes have grown to the size of bowling balls and looks as though it’s been dropped from a great height and landed on its face. Its barrel chest is out of all proportion to the rest of its body so that it resembles one of those body builders that pose and look ridiculous. Millie, Terry’s Shi Poo, continues to annoy and apart from a gammy leg, which amusingly slips around on shiny floors, she manages to get around in spite of back surgery. How she ascertains while in a bedroom at the back of the house that someone is

walking along outside, on the other side of the street is one of life’s mysteries; the loudness of her bark being in inverse proportion to the size of the dog. As a keen gardener of reducing physical capabilities, the patio ballet continues in the avoidance of Millie’s corporeal leftovers. So I do manage to get some exercise these days. Ally got married to Mike who brought his dog as a dowry. Remember Bella? The snarling bitch who likes me

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

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less than I like dogs. My mere approach engenders bare teeth, raised hackles, growling and barking – the dog’s almost as bad. I have yet to share their residence since its installation. I think Millie holds the record for second place of Moorby dog ownership; she’s now about 32 in dog years (and it feels like it) and I’m assured that she’ll likely make it to about the 80 mark. At that rate I’ll be pushing up daisies before she leaves this doggie domicile.

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Solution to this puzzle in the 9/16/19 issue. Call 1.800.794.0760 for a FREE subscription.

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Solution to the 8/19/2019 puzzle


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