Used Car News 8/31/2020

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Used Car News

usedcarnews

8/31/2020

New Captain Leads NAAA in 2020-21 Julie Picard is the incoming president for the National Auto Auction Association. She is Manheim’s vice president of industry partnerships.

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IN THIS ISSUE:

• NAAA • RECALLS

Rush - Dated Material

• IARA

Used Car News: Tell us about your background. How did you get into the auction business and what drove you into leadership? Julie Picard: I was born and raised in Butte, Mont. I received a great education attending Butte Catholic schools. I moved on to earn an accounting degree at the Photo By Jeffrey Bellant University of Montana. Following PRESIDENT PICARD: Incoming NAAA President Julie Picard, shown at a past industry event, graduation, I moved to Seattle with was named Manheim vice president of industry partnerships earlier this year. She is a former my high school sweetheart – and general manager of Manheim Seattle and Manheim PA. now my husband of 26 years. I began my career in public accounting, UCN: Last fall, no one would UCN: Around the time you bebut after three years moved into pri- have predicted that you would be came NAAA President-elect, you vate accounting as the controller of taking over during a global pan- were named to the new role of Manheim Seattle. demic. Is there anything in your Manheim VP of industry partnerOnce I got into the auction, no one career that helps you lead in such ships. Have the two roles complewears one hat. It really allowed me unprecedented times? mented each other? to take the financial and business acumen side of me and apply it to all Picard: I fully believe that leaderPicard: The two roles complethe various opportunities in an auto ship comes from the heart, passion ment each other very well. There is auction. The rest is history. for what you do and a competitive a lot of great work to do in the auto I really feel like I won the em- spirit that drives people and busi- industry that really takes a village ployer lottery. I fell in love with ness forward through partnerships to accomplish. The new partnerManheim the first time I inter- and execution. ships and friendships that I’ve had viewed with them. My career path All my roles within Cox Automo- the opportunity to form over the took me in directions I never would tive allowed me to exceed expecta- past eight months in my new role, have imagined. After two years as tions – personal and professional coupled with the relationships I’ve controller, I moved on to assistant – both as an individual contributor built over my 29 years with Manmanager and then general manager and as a leader. heim, will really allow us to comat Manheim Seattle. During my three decades with municate better and move faster on That was followed by the (role) of Manheim, being comfortable and important industry opportunities Manheim market vice president of being uncomfortable is really the and decisions. the Pacific region. A few years later, name of the game. I had the amazing opportunity to We’re a very forward-thinking UCN: How do you view your run our mothership and the largest culture that not only allows us to be role in keeping NAAA members auto auction in the world, Manheim excited about change but to actually positive and helping them recovPennsylvania. It was a remarkable create it. Disruption can be healthy, er and succeed through this? experience. right? I think that mindset allows From there I moved back West as me to pivot quickly as these changes Picard: NAAA members are the a regional vice president of the west have occurred and continue to lead most resilient people I know, truthregion. I am presently vice presi- courageously through these un- fully. We have found ourselves in dent of industry partnerships for precedented times. Continued on page 3 Manheim.

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NAAA News 8/31/2020

NAAA President – Continued from page 1 By Jeffrey Bellant

ful tenure look like?

probably the deepest, most uncharted water we’ve ever sailed. It’s just about getting up every day and looking positively toward the new horizon. We won’t only survive this pandemic, in my opinion. We will come out stronger due to the amazing people in this industry.

Picard: It definitely has been – and looks like it will be – a unique tenure. However, I don’t’ see anything but opportunity truthfully. My goals as the incoming president are to increase collaboration and partnerships with industry partners and colleagues during this disruption. When disruption occurs, as we’ve experienced with COVID-19, we have a choice. Hold on to what you’ve always known or choose to innovate and allow disruption to push us forward. I think we’ve all pushed ourselves forward during the pandemic. I want to continue to work closely with membership and the industry leadership to communicate and collaborate regularly. At the onset of COVID-19, (NAAA) had a weekly call with key industry stakeholders to discuss industry challenges. It was extremely beneficial in helping us navigate through the crisis as industry partners. I would like to continue that. Obviously, I want to stay focused on safety. Customers in the industry can expect ongoing innovation especially on the digital and vehicle information front. I also want continued focus on education and communication to our membership in these areas. As an industry, we all have to keep focusing on our efficiencies. We’ve seen it at Manheim, ADESA and the independents. Our clients and partners are looking for these same efficiencies in their businesses. I think it’s really important for us to work together to make sure we get through this pandemic with (better) efficiencies to drive better results for all of us.

UCN: NAAA has focused heavily on safety over the past few years, what will physical sales look like as we get past this crisis? Picard: Safety has been front and center at all times here. We will continue to focus on safety at all times at our locations. At the onset of COVID-19, Manheim was able to continue to provide inventory to clients digitally to keep their businesses moving forward. We put in place Remote Seller initially. This was followed by limited onsite vehicle access for dealers at some sites and then in-lane bidding through some of the blocks. The outcome of how our lanes look post-COVID is still yet to be determined. In my opinion, we’ll most likely have several variations determined by No. 1, our safety protocols and No. 2, our clients’ needs. UCN: Apart from general safety issues, inventory looks like a big challenge going forward. Is that what you see? Picard: For all of us, the post-COVID inventory has been completely liquidated. Our conversion rates are off the charts. I tend to speak ‘Manheim,’ and (at press time) Manheim inventory is about 85 percent of what it was before the crisis. I do believe availability should improve later this year with the delayed repos of about 350,000 to 450,000 out there. Also, there’s a delay of at least 100,000 lease terminations. I think we’re all a little nervous about inventory, but I also think there is some upside on the horizon as we see those repos and lease terminations. UCN: Lastly, you face an unprecedented challenge going forward. Your term won’t look like anyone else’s, with less travel and visits to member auctions, no 2020 convention, and economic uncertainty. What are your goals as president and what will a success-

UCN: Anything you want to add? Picard: First, I want to thank our (outgoing) President Laura Taylor for her leadership during these trying times. Although there were many reasons for her to be disappointed, she continued to lead with such courage and enthusiasm. It was very intentional to make sure we celebrated all these small industry wins as we went through COVID-19. Lastly, I just want to say how proud I am to represent the NAAA membership as the incoming president. I am here to serve you and look forward to all the great things to come over the next year.

Photo Courtesy of NAAA CO-PILOTS: Outgoing NAAA President Laura Taylor, left, and incoming President Julie Picard enjoy a helicopter flight last year, before things got choppy this year with the pandemic.

Taylor Keeps NAAA Steady Through Turbulent Year By Jeffrey Bellant

Laura Taylor steps into the National Auto Auction Association chairman position in October after successfully leading the group through one of its toughest years. Taylor’s tenure as president started out on a positive note, as NAAA went back to having its own independent convention in Indianapolis last fall. “As an industry at NAAA, we were very excited for 2020,’ Taylor said, “because the switch-over (in the convention) was so successful in 2019. But it seemed like everything changed almost overnight.” Taylor said COVID-19 was something no one in the industry had ever seen, but the industry did not shrink back. “I was impressed with how well everybody in the industry was able to switch gears,” she said. Online sales had been a topic of at last year’s convention even as Taylor defended the necessity of brick-and-mortar auctions. Both areas – digital and physical sales – responded and adapted well to the pandemic challenge, Taylor said. At the onset of the pandemic, Taylor, leaders of the NAAA and the auction industry immediately began weekly conference calls to set priorities. NAAA moved quickly to help out its members.

“The first thing we enacted was the $1.4 million relief package, giving back to all of our NAAA members,” Taylor said. The move suspended dues payments from members and moved up its $3,000 dividend check for each of the 260 auctions to that week. NAAA leadership also put together a playbook to help auctions in the pandemic situation. “What the team did was absolutely outstanding,” Taylor said. That information was especially beneficial to independents, with the chains playing a big part in providing and sharing that information. “It goes to show you how this industry has come together over the years and works together,” Taylor said. The Independent Auction Group created a series of videos to inform its members during the pandemic while NAAA also helped members navigate the Paycheck Protection Program. Taylor praised how independents responded in a way no one might have expected. As a GM, she dealt with challenges on all fronts and knows what incoming president Julie Picard faces. “I don’t think I’ve had any sleep in four months,” Taylor said. “It’s kind of humbled us. But I think we’re starting to see the light at the end of this. I think Julie will have a fantastic presidency.”

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Recalls

UCN usedcarnews

8/31/2020

Ford Motor Company

Ford Motor Company is issuing three safety recalls in North America. One safety recall is for select 201518 Ford Edge and 2016-18 Lincoln MKX vehicles. Affected vehicles have front brake jounce hoses that could rupture. A ruptured front brake jounce hose will cause a progressive brake fluid leak. If the brake fluid reservoir is depleted below a certain level, the brake fluid warning indicator light will illuminate. The driver may experience an increase in brake pedal travel, together with a reduction in the rate of deceleration. This action affects 488,594 vehicles in the U.S. and federal territories, 62,876 in Canada and 7,140 in Mexico. Affected vehicles are as follows: 2015-18 Ford Edge vehicles built at Oakville Assembly Plant from June 25, 2014, to Dec. 21, 2017 and 201618 Lincoln MKX vehicles built there from Nov. 11, 2014, to Dec. 21, 2017. Dealers will replace the front brake jounce hoses with new hoses that have a revised braid material.

The Ford reference number for this recall is 20S42. Another safety recall is for select 2020 Lincoln Corsair vehicles. Affected vehicles may have insufficient clearance between the left and right rear coil springs and the toe link bracket. This may result in a condition in which the spring and bracket touch, potentially wearing away the protective coating on the coil spring. Over time, corrosion due to removal of the protective coating may reduce the full life of the spring and may result in fracture of the spring. A fractured rear coil spring may separate from the vehicle and cause a potential road hazard for traffic following behind. This action affects 2,965 vehicles in the U.S. and federal territories, 491 in Canada and 141 in Mexico. Affected vehicles were built at Louisville Assembly Plant from Jan. 7 to Oct. 21, 2019. Dealers will inspect the vehicles for proper clearance between the toe link bracket and rear coil spring. If needed, the toe link bracket edge will be trimmed, and a new coil

spring will be installed. The Ford reference number for this recall is 20S41. A third Ford safety recall is for select 2020 Ford F-150 vehicles. Affected vehicles may have been built with an improper attachment nut used to fasten the positive battery cable (B+) to the starter motor. An improper attachment nut may not provide a secure connection to the starter or the required conductive properties. This could increase the potential for incremental heat generation during a vehicle start cycle, and electrical arcing, which could lead to a fire. This action affects 431 vehicles in the U.S. Affected vehicles were built at the Kansas City Assembly Plant from June 30 to July 1, 2020. Dealers will replace the starter motor B+ power supply attachment nut. The Ford reference number for this recall is 20S40. Chevrolet Corvette General Motors LLC (GM) is recalling certain 2020 Chevrolet Corvette vehicles. The release button located inside the front trunk compartment may not function after the vehicle has been shut off for 10 minutes. As such, these vehicles fail to comply with the requirements of Federal Motor Vehicle Safety Standard number 401, “Internal Trunk Release.” GM will notify owners, and dealers will update the software in the vehicle’s Body Control Module (BCM) to allow the release switch to always work, free of charge. Owners also may allow the vehicle to be remedied via an Over-The-Air software update. The recall is expected to begin September 21. Owners may contact GM customer service at 1-866-5229559. GM’s number for this recall is N202309350.

KIA Forte

Kia Motors America (Kia) is recalling certain 2019 Forte vehicles. The left front axle driveshaft may not have been heat-treated, which can cause it to break. Kia will notify owners, and dealers will inspect the left front axle driveshaft for a heat treatment verification code, and replace it if the code is missing, free of charge. The recall is expected to begin September 2. Owners may contact Kia customer service at 1-800-333-4542. Kia’s number for this recall is SC195. Owners may also contact the National Highway Traffic Safety Administration Vehicle Safety Hotline at www.safercar.gov.

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Volume 26 | No.8 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 Emeritus Colleen Fitzgerald, Publisher Editorial: Jeffrey Bellant, Managing Editor Ed Fitzgerald, Staff Writer Advertising: Shannon Colby, Account Manager Tony Moorby Columnist: Circulation: subs@usedcarnews.com Production: Tom Savage, Production Manager Cee Lippens, Web Master Used Car News is published every third week. 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.

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IARA Conference 8/31/2020

Experian Examines Marketplace for IARA Virtual Event By Jeffrey Bellant

The coronavirus pandemic affected everything from affordability in auto finance, consumer credit and purchase patterns to new trends in leasing and repos. Melinda Zabritski, senior director of Experian Automotive, presented a detailed look at these trends during an online presentation for the International Automotive Remarketers Alliance Virtual Summer Roundtable. Shifts in the market are reflected most in the area of loan payments and terms. Experian provided numbers from Q2 2008 to just shy of Q2 2020. “Back in 2008, the average new-car loan amount was $23,592,” Zabritski said. “This year, that average new loan amount is just over $36,000. A huge difference. “The monthly payment has gone up 29 percent (during that time frame), from an average monthly payment of $445 to $573.” Average new-car loan terms have gone from just above 63.5 months to more than 72 months. Loan rates have dipped from 6.31 to 5.28 percent, taking into account the incentive rates during COVID-19. Used car loans have seen a jump as well. On used cars, the average loan amount rose to $20,848 from $16,390, an increase of 27 percent. “That’s the average used loan amount from all used cars, whether it’s franchised or independent,” Zabritski said. Monthly payments on used-car loans rose to $399 in the first half of 2020 from an average of $344 in 2008, a 16 percent increase. Average used-car loans rose from just under 60 months to just over 65 months, while used-car loan rates increased very slightly, to 10.02 percent from 9.993 percent. Looking at segments of vehicles related to financing, there is a big change since 2008. In 2008, small economy cars had the biggest share of financing at nearly 17 percent. Pick-up trucks were third at 11.1 percent share of all financed vehicles. Mid-range standard cars were second. In Q2 2020, full-sized pickups have the biggest share of financing at 20.4 percent, followed by entry level CUVs, at 20 percent, followed far below with mid-range CUVs at

8.5 percent. However, the average loan amount is where the different is stark. In 2008, the top share of financing was the small economy car and the average loan amount was $17,227. In 2020, that top average loan amount is the full-sized pickup with $46,502. “Even if you look at the full-sized pickup back in 2008,” Zabritski said, “it was $29,000. So that average loan amount for a full-sized pickup, aside from moving into that No.1 position, has also incurred a significant higher loan amount.” In the same way, the entry level CUV had a $22,214 loan amount in 2008, while the 2020 loan amount for the same segment is nearly $29,000. Loan term length has also increased, Zabritski said. The 73-month to 84-month loan now makes up 27 percent of all newand used-car loans. In 2009, it was under 7 percent. “We have grown into the longerterm loans becoming the most pervasive loans in the marketplace,” Zabritski said. She said 61- to 72-month loans have become the most common, but 2020 has seen a growth in the longer-term loans. “It’s one of the trends that we continue to see grow,” she said. The longer terms help keep the monthly payment down, Zabritski

said. Affordability concerns had caused consumers to move more into leasing and even pushed prime customers into used vehicles through 2019. The percentage of prime consumers buying used was at 57 percent in 2019. Leasing, which had topped 36 percent of the percentage of new financing in 2016, was still near 35 percent last year. But these trends changed this year. “COVID-19 certainly had an impact in reversing some of these trends that have been pretty pervasive in the market for many years,” Zabritski said. In Q2 of 2020, that leasing figure dropped below 27 percent. “Leasing definitely fell by the wayside,” Zabritski said. Stay-at-home orders and factory shutdowns have played a role in that, however. Likewise, the percentage of prime consumers buying used dipped slightly this year to 54.8 percent, from 57.2. The good news is Zabritski said the industry should see nearly 2.2 million lease units returning in the next six months. COVID-19 has hurt the repossession market as Q1 repossessions were at 371,000 but Q2 repos dropped to 242,000. Experian shows subprime originations remain low for both new and

used vehicles. Another trend is that prior to the COVID-19 pandemic, cash transactions had been at nearly 16 percent. By May, that figure had fallen below 11 percent. During 2020, as COVID-19 hit the nation hard, the percent of subprime loans for used cars jumped 4 percent year-over-year in May. But the percentage of prime and non-prime customers buying used – which had gone slightly up early this year– dropped in April and May. The percentage of prime customers buying used fell 6.5 percent yearover-year in May. “Now again, this is going to be a shift three years from now as the off-lease inventories are going to be lower,” Zabritski said. “We’ll likely see these prime consumers move into new vehicles as well.” In terms of manufacturer marketshare, General Motors leads with more than a 22-percent share of vehicles on the road. Ford is second with nearly 17 percent, followed by Toyota FCA US, Honda Nissan, Hyundai and other manufacturers. However, between Q1 2019 to Q1 2020, there has been a shift. Toyota has gained market share. “Toyota now has a little more than 40 million vehicles on the road,” Zabritski said. FCA US, Honda and Nissan have also gained market share during that period, while GM and Ford shrunk a bit.

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News 8/31/2020

KAR Global Hires Jordan By Jeffrey Bellant

Steve Jordan will join KAR Global in September after resigning this month as CEO of the National Independent Automobile Dealers Association. KAR Global named Jordan to the new position of executive vice president of dealer sales. Jordan will lead KAR’s U.S. and Canadian dealer sales organization and focus on advancing the company’s portfolio of dealer-facing buyer and seller products, services and solutions. This includes ADESA’s physical and digital dealer consignment offerings as well as TradeRev. Jordan ended nine years as the top exec at NIADA, after spending two years as chief operating officer under then-NIADA CEO Mike Linn. Before that, Jordan served as Florida IADA’s executive director and previously was a managing partner at Byrider. “It is a great opportunity,” Jordan said by phone after the KAR announcement. “You know, John Hammer (president of ADESA and KAR’s chief commercial officer) and I have been friends for quite some time. “We’ve always kind of joked about what it would be like to work together and be on the same team, working for the industry together.” Hammer got to know Jordan when Hammer was CEO at AFC several years ago. “I kidded around with him and said, ‘You didn’t know it, but I’ve been kind of interviewing you for about five years,’” Hammer said. Jordan’s success with NIADA in growing that association, along with his industry expertise and dealer understanding, made him a good fit. “He’s a great advocate for independent dealers and dealers, in general,” Hammer said. “He’s also bridged the gap between NIADA and the National Auto Auction Association, doing a good job of bringing the industry together. “He’s got a lot of energy and enthusiasm on top of that. He just connects well with the industry and can represent dealers really well.” Hammer added that it was important to hire someone who has “sat in our customer’s seat and helped them understand the challenges they face.” As someone who came from the independent dealership world,

Steve Jordan

Hammer said he respects Jordan’s background and believes it will make Jordan a better partner with KAR Global’s customers. Hammer approached Jordan about the position and Jordan said he couldn’t pass it up. Jordan said the new job will allow him to take advantage of the culture KAR Global has built in serving both dealers and consignors. It’s about “leveraging all of the KAR Global assets to the benefit of the dealer community,” Jordan said. The challenges of COVID-19 actually made this opportunity more attractive, he said. Jordan called KAR Global the “single best company in the market to help dealers bridge the gap between what’s happening now and what the new normal is.” Inventory remains a big challenge for dealers but KAR Global will provide the assets to meet that challenge, Jordan said. Jordan said he will not be moving to KAR’s Carmel, Ind., headquarters yet. “This is a position, obviously, where I’ll be managing a very large distributive sales force in North America,” Jordan said. “Although (Carmel) is the world headquarters, I’ll be traveling quite a bit. Much of the team is in the field. “So, it makes sense for me to stay in Dallas for now.” Hammer said KAR recognizes the importance of the independent dealer community and wants to provide them with the products and services they need. The hiring of Jordan is another part of that effort to serve independent dealers, Hammer said.



NIADA News 8/31/2020

NIADA Board Appoints Search Team for New Executive By Jeffrey Bellant

The National Independent Automobile Dealers Association is looking for new leadership following the resignation of CEO Steve Jordan. NIADA announced the change earlier this month and Jordan will serve in an advisory role during a 30-day transition period. Jordan is taking a new position at KAR Global. NIADA President Henry Mullinax said Shaun Petersen had been appointed interim executive vice president until Jordan’s replacement is selected. Petersen’s regular role is senior vice president of legal & government affairs. He has worked daily with Jordan for many years and has been an intricate part of NIADA’s leadership team. He has spearheaded the association’s lobbying efforts and annual leadership conference in Washington D.C.

“So, the decision-making will be on Shaun,” Mullinax said. “This was the best way to make a stable transition.” Incoming NIADA president-elect Louis Tedeschi thanked Jordan while looking ahead. “Steve’s aggressive approach to his role helped NIADA grow into what it is today and made a huge impact on our industry,” Tedeschi added. “We hope to take the ball that Steve started rolling and keep it rolling forward.” Mullinax credits the NIADA Board of Directors for how it is managing the transition. “We’ve got a really smart board,” Mullinax said. “We’ve got some of the best in the industry on our board.” Immediately after Jordan announced his plans, the NIADA board established a search committee to find a new CEO. The six-member committee in-

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Henry Mullinax

cludes three incoming board members and three outgoing members. “We will search for the best possible candidates,’ Mullinax said. The board won’t make a “hasty decision,” but will be “as expedient” as it can be, he said.

It’s important for NIADA’s stability and success to get this done as soon as they can, Mullinax said. Mullinax said it’s vital to find someone with a strong association management experience and, ideally, some automotive background.

Business As Usual? Not Quite!

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Retail Markets 8/31/2020 Compiled by Ed Fitzgerald

FLORIDA Frank Fuzy, owner, Century Motors, Pompano Beach, Fla.: “I have been in business 39 years, all in the same spot. “We did not have to shut down because of COVID. We were listed as essential here in Florida. “We keep about 70 cars that are for sale and about 50 that are in progress, getting ready for sale. We sell an average of 70 cars per month. “We sell both cars and trucks. Trucks seem to be the ticket, but I like to buy unusual cars. We’re a top 20 seller on eBay. I’ve been selling 20 years on eBay and I’m advertising worldwide. “I probably sell 70 percent domestic and 30 percent import. I’m probably one of the few dealers selling Sebring convertibles and PT Cruisers. “When we went to online

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retail, the first car I sold was to Tokyo, Japan. “My recon costs are huge. I have a 22,000-square-foot certified center. I’ve got three full-time painters, mechanics, lifts. We put tires on everything, brakes, paint jobs, anything that needs to be touched up. I’ve got to find ’em and make diamonds out of them. We probably spend $1,000 a car. “I can’t sell eight-, nineyear-old cars. I need older cars, 15, 20 years old. That’s what they want on eBay. I offer money-back guarantees. You can only leave a feedback on eBay if it’s an actual sale and I have 3,500 positive feedbacks. That’s the trick with eBay, to build credibility. I just sold two cars to Norway. I’ve got a Jaguar XK going to South Korea. “The last car I sold was an ’06 Mitsubishi Eclipse GT,

orange, loaded. I got $8,900, doing very well and anticithe asking price. ” pated a strong tax season. Our purchases in the winter anticipated a strong tax VIRGINIA Paul Tashner, owner, Car season and we were heavy with inventory. On or about Castle, Richmond, Va. “We’ve been at this loca- March 11, Virginia went into tion in used cars for five a quarantine ‘stay home’ years. Before that we spent state, and sales stopped until 20 years as a distributor for roughly the end of April. “We focused on finishing Chrysler Jeep Dodge Insome cars that had fallen ternational setting up Jeep to the back lot for various dealerships in W. Africa, E. Europe and the ex-USSR. reasons. We bought fewer After the Great Recession, than five cars a month in Chrysler went bankrupt, the spring, but we mainFiat took over and our in- tained a full lot by repairternational markets were ing and prepping some of devastated for a decade. We these projects, thus freeing decided we’d set up dealer- up cash. We used the cash to ships around the world, so pay down our floor plan and we knew how to do the pro- build a stronger cash posicesses, and there was a cry- tion. It worked well. “We maintain 35-45 cars in ing need for affordable used front-line status, and about cars for working class and middle class families. And 15 vehicles (being prepped). “We sell 12-20 cars a here we are. month. We sell about 70 per“The first few months of cent cars, and SUV’s and 30 2020 we were rolling along

percent trucks. “We spend $1,000 - $1,200 per car in reconditioning. Brakes, ball joints, control arms and suspension parts are most common. We buy a lot of tires. “I attend Richmond Auto Auction, it’s close and they normally have 300-400 cars and trucks. Otherwise I buy from private sellers, take trade-ins, and use online auctions ACV and TradeRev. “We target 7- to 12-yearold vehicles with 80,000150,000 miles. “I advertise on social media, CarGurus, our website. Probably 75 percent of our buyers are repeat customers, referrals, or drive-by. “The average down payment is typically $1,000$1,500. “The last car I sold was a Ford F150 FX4 4x4, 2005, with 160k miles. We sold it for $8,995.”


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Wholesale Markets 8/31/2020 Compiled by Jeffrey Bellant

PENNSYLVANIA Chrissy Briggs, general manager, Greater Erie Auto Auction, Fairview, Pa.: “We just celebrated 16 years at the auction. We have seven lanes. We run five auction lanes and two for recon. “We shut down for two weeks. We were deemed as a non-essential business. We took our computers home, started Zooming back and forth. “But we fought and kicked and scraped for an approval to open. “When we opened back, we were only allowed to have 10 people on the property at all times. It was crazy. “This management team that I’m surrounded by is just unbelievable. They were working seven days a week coming back. “We started back with

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straight up digital sales and we hadn’t done that before. It went fantastic. We thought to ourselves when we opened back up that if we had a 10 percent sale, it would be a win. The first sale that came out – 47 percent. “We were eventually allowed to bring back people in the lanes, we were first limited to 50 people in May. “Eventually, we were allowed to go up to 50-percent capacity, and we’re still at 50-percent capacity. We’re not driving cars through the lanes. Dealers look at, touch, feel, smell the cars, but they’re not driving through the lanes. “We just had our 12th week over 80 percent. That is nuts. But we’re riding the wave until we can’t ride it anymore. We’re running right at 400 each week. We just need more cars. “We’re drawing about 140

dealers on sale day. We’d normally have over 200, but we’re making up that online. Our buyer base has grown immensely. “Our average car price is $5,200. It’s up from $4,200$4,300 last year. “We also have a heavy truck and equipment sale coming up October 17. “Every day is uncertain, but I feel positive this market will continue through October, at least.”

TENNESSEE Gary Montgomery, general manager, Dealers Auto Auction of East Tennessee, Bluff City, Tenn.: “Dealers Auto Auction has owned this place a little over two years. “We’re actually getting ready to relocate around the first of the year to a new facility in Johnson City, Tenn., which is about eight miles

from here. It was previously a Ford store. It’s a great location, right near Interstate 26. We’ll be able to hold 550 to 600 units on sale days. It’s going to be a big change for us that we need. “We never missed a sale (during the pandemic.). “We had several dealers contact us and tell us they appreciate us for staying open. “Our core group of employees has been here every day and sales have been at 70 percent or better for the last three months. “Things are good. At a recent sale we ran 308 and sold 228. “Our average sale selling price is somewhere around $6,500 to $6,700. It’s up about $1,000 from last year. “Cars are hard to come by. The dealer count has gone up. I had 163 dealers at a recent sale.

“Most of our new-car dealerships are telling us if they can get a car from one end of their service department and out the other and it can do the three S’s – stop, start and steer – they’re keeping it to sell. “Our local Nissan dealer called me after a sale and asked if I could help transport 20 new Nissan Rogues that they purchased from another Nissan dealer because they were completely out of them. “The car business locally seems to be strong. Even the independents say they are having record months. “I also think our change of ZIP code at the end of the year will put about an extra 250 units a month to our bottom line. “Everything is good in East Tennessee. I honestly think the market will stay strong until the end of the year.”


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Disconnected Jottings From

Tony Moorby 8/31/2020

“This is a people business!” Anyone in the automobile world has heard that a million times. It’s always been assumed that a physical presence is required at every stage of a car’s life from build and manufacture, distribution and sales, all the way through to scrappage. Sure there has been a shift to take the human content out of the processes to improve efficiencies, lower costs or even improve quality. But COVID-19 has been a massive accelerant in the replacement, refinement, even improvement in all kinds of everyday happenings that we probably thought of as immutable. Of course, automation is part of our total environment, touching all kinds of daily events and activities, but the speed of recent changes has been shocking.

Everyday activities are being reassessed, necessities are being reappraised and even relationships are being questioned as to priorities in business and families. The existence of this virus has caused everyone to ask what I call ‘the stretching questions’; the ones that demand answers beyond the norm. Can I do this? No. What if I have to? What if I absolutely have to, no excuses? What if my life depends on it? Then yes, you have to find a way. Our industry, like many, holds conventions to meet and get up to date on the latest trends, share best practices and swap stories. They’re informative, enjoyable and expensive, both to arrange and to attend as well as taking time (time is money too, of course). Such communication becomes even more important

in the dire circumstances we deal with today. So, as we cannot actually attend some conventions, technology has stepped in to save the day. I don’t mean to sound glib – I was far from convinced that such an undertaking could be successful. New market conditions that normally take place over time and have certain rhythms, have been squashed like a concertina and forced us into a new paradigm. New ways to do things have not only become necessary but have grown to be acceptable at lightning speed. The nation’s auto auctions have had to immediately go online – a move that was seen to be part of an inevitable future but at a pace that was to be as smooth and comfortable for all involved. Enter COVID-19 and all

By Myles Mellor

Across 1. Lincoln model 5. Porsche sports car 9. RDX maker 10. Formula One race 11. Warriors’ grp., abbr. 12. Microcar maker 14. Brit. sports car in the 60s 15. Average, for short 16. It can cause a punture 19. Oil company 20. Old Olds model 24. It’s under the driver’s feet 27. Freeway exits 29. Luxury model from Hyundai

30. Start! 33. Shelby ____ sports car 35. 70s Plymouth 37. Ford ___sport 38. One of TV’s Ewings 39. Hyundai SUV 40. Honda compact crossover 42. Cadillac luxury model 43. Called 44. Technology used in tech innovations for automatic cars Down 1. Mercedes ___ 250 2. VW minivan 3. Executive car from Kia

those ‘stretching questions’ for all the parties to come up with workable answers for commerce to continue. And, remarkably, it has. IARA, the International Automotive Remarketers Alliance recently held their Summer Roundtable, all online and well presented by industry experts and everyday users discussing progress, processes, pros and cons of the newly created marketplace we’re living in now. The performances were polished and professional, and the hosts enabled a real-time chat room for questions, comments and occasional light-hearted banter. While, like the auctions, most people were looking forward to getting back to eye-to-eye meetings, it was broadly observed that the efficiency of this type of meeting could enable gath-

• 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 • NAAA Hall of Famer • IARA Circle of Excellence To see past columns from Tony Moorby, visit www.usedcarnews.com/ columnists/tony-moorby

erings, not only more often but could be segmented to individual user groups throughout the year. The people in this business are as creative as they’ve ever been and I’m positive we’ll see even more innovation as a result of current difficulties.

Play Online at Us e d C a r N e ws. c o m 4. Buick sedan 5. Chevy SUV 6. Up to this point of the year, abbr. 7. Auto’s potential lifesaver 8. Lotus model 12. 60s sports car from Reliant 13. Chrysler truck 17. Letter of Credit (abbr.) 18. Customer 21. “Move on __!” 22. Morning show time 23. Compact SUV from Ford 25. Agricultural, for short 26. Highlander maker 28. Previously

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Solution to this puzzle in the 9/21/2020 issue. Call 1.800.794.0760 for a FREE subscription.

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Tony Moorby

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Solution to the 8/10/2020 puzzle


Your source for quality, selection and value: A broad selection of pre-owned vehicles from an industry leader. September 2020 Chase High Lines, featuring: 1 1

ADESA Boston September 4, 11, 18, 25 508-626-7000

ADESA Salt Lake September 1, 29 801-322-1234

Manheim New Jersey September 2, 16, 30 609-298-3400

ADESA Boston September 25 508-626-7000

Manheim Dallas September 15 877-860-1651

Manheim Pennsylvania September 10, 24 800-822-2886

ADESA Brasher’s September 2, 16, 30 916-991-5555

ADESA Tulsa September 11 918-437-9044

Manheim New Orleans September 2, 30 985-643-2061

ADESA Golden Gate September 8 209-839-8000

Manheim Milwaukee September 16 262-835-4436

Manheim Phoenix September 3 623-907-7000

ADESA Charlotte September 10, 24 704-587-7653

ADESA Washington DC September 16 703-996-1100

Manheim Orlando September 1, 8, 15, 22, 29 800-337-8491

Manheim Atlanta September 9 404-762-9211

Manheim Palm Beach September 2, 30 561-790-1200

Manheim Riverside September 3, 17 951-689-6000

ADESA Chicago September 18 847-551-2151

Columbus Fair AA September 2, 23, 30 614-497-2000

Manheim Palm Beach September 2, 30 561-790-1200

ADESA Cincinnati/Dayton September 22 937-746-4000

Manheim Atlanta September 9, 10, 24 404-762-9211

Manheim Pennsylvania September 4, 10, 11, 18, 24, 25 800-822-2886

ADESA Golden Gate September 8, 22 209-839-8000

Manheim Dallas September 2, 15, 16, 30 877-860-1651

Manheim Phoenix September 3, 10, 17, 24 623-907-7000

ADESA Houston September 9, 23 281-580-1800

Manheim Denver September 16 800-822-1177

Manheim Pittsburgh September 2, 16, 30 724-452-5555

ADESA Indianapolis September 8, 22 317-838-8000

Manheim Detroit September 10, 24 734-654-7100

Manheim Riverside September 1, 3, 15, 17, 29 951-689-6000

ADESA Jacksonville September 10, 24 904-765-1004

Manheim Fredericksburg September 3, 17 540-368-3400

Manheim Seattle September 9, 23 206-762-1600

ADESA Kansas City September 8, 22 816-525-1100

Manheim Milwaukee September 2, 16, 30 262-835-4436

ADESA Lexington September 3, 17 859-263-5163

Manheim Minneapolis September 9 763-425-7653

Manheim Southern California September 10, 24 909-822-2261

ADESA New Jersey September 10, 24 908-725-2200

Manheim Nashville September 1, 2, 23, 29, 30 615-773-3800

Manheim Tampa September 10, 17, 24 800-622-7292

2

ADESA Boston September 4, 11, 18 508-626-7000

Manheim Atlanta September 10 404-762-9211

Manheim Pennsylvania September 4, 11, 18 800-822-2886

ADESA Charlotte September 10 704-587-7653

Manheim Dallas September 16, 30 877-860-1651

Manheim Phoenix September 17 623-907-7000

ADESA Chicago September 18 847-551-2151

Manheim Detroit September 10, 24 734-654-7100

Manheim Pittsburgh September 2, 16, 30 724-452-5555

ADESA Golden Gate September 22 209-839-8000

Manheim Fredericksburg September 3 540-368-3400

ADESA Houston September 9 281-580-1800

Manheim New Jersey September 2, 16, 30 609-298-3400

Columbus Fair AA September 2, 30 614-497-2000

Manheim Orlando September 8, 22 800-822-2886

Manheim Riverside September 1, 15, 29 951-689-6000 Manheim Seattle September 9 206-762-1600 Manheim Tampa September 17 800-622-7292

Southern AA September 2, 16, 30 860-292-7500

3

Chase High Lines, featuring:

4

ADESA Golden Gate September 8 209-839-8000

Manheim Milwaukee September 16 262-835-4436

Manheim Phoenix September 3 623-907-7000

Manheim Atlanta September 9 404-762-9211

Manheim Palm Beach September 2 561-790-1200

Manheim Riverside September 3, 17 951-689-6000

Manheim Dallas September 15 877-860-1651

Manheim Pennsylvania September 10, 24, 30 800-822-2886

ADESA Boston September 4, 11 508-626-7000

Manheim Fredericksburg September 17 540-368-3400

Manheim Pittsburgh September 2, 16, 30 724-452-5555

ADESA Salt Lake September 1, 29 801-322-1234

Manheim New Jersey September 2, 30 609-298-3400

Manheim Seattle September 9 206-762-1600

Columbus Fair AA September 23 614-497-1177

Manheim Orlando September 800-337-8491

Manheim Southern CA September 10, 24 909-822-2261

Manheim Denver September 16 800-822-1177

Manheim Pennsylvania September 11, 25 800-822-2886

Southern AA September 2, 16, 30 860-292-7500

Choose Chase on ADESA.com and OVE.com for quality bank-sourced vehicles. Contact auctions directly for current sale information. 1

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 JPMorgan Chase Bank, N.A. ("Chase") is under license.

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 "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").

4

Maserati Capital USA, the Maserati logo and model designations are registered trademarks used by JPMorgan Chase Bank, N.A. ("Chase") under license from Maserati S.p.A.

Neither JPMorgan Chase Bank, N.A. ("Chase") 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. Š2020 JPMorgan Chase Bank, N.A. Member FDIC (20-009) 9/20


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