__MAIN_TEXT__
feature-image

Page 1

UCN

Used Car News

7/5/2021

Dealer Groups Adjust to Pandemic Changes By Jeffrey Bellant

Buy with Total Confidence.

IN THIS ISSUE:

• Summer Books • NIADA Update

Improvements in digital tools and merchandising online were vital to national dealer groups in battling through the pandemic market, according to a recent panel at the Conference of Automotive Remarketing. “Some buyers had to learn a completely new way of buying or selling their cars,” said Susie Heins of Cox Automotive, who moderated the discussion. Peter Hermes, who heads up inventory and retail strategy and analytics for DriveTime, said the people in place mattered most in adjusting to a more digital-centered approach. “A key was having a flexible team, first and foremost,” he said. DriveTime had to move into a more flexible buying environment so that people could buy remotely when they normally would buy inlane. Chad Leavitt, chief accounting officer, Findlay Automotive Group based in Las Vegas, said that on March 18, 2020, the Nevada governor shut down Nevada dealerships completely. “We were out of business, basically,” he said. “Luckily, about 15 months, prior, we had invested in some digital retailing to do a complete online environment. “We just rallied the troops immediately.” The message

was, “this is how we do business and it’s what we always wanted to do.” Challenges came in the form of “how do we appraise a car, when is the bottom going to fall, how do we make the right decisions.” Carvana, however, may have been the dealership most prepared for the digital environment. Jeff Miller, who leads strategic partnerships for Carvana,

Rush - Dated Material

• Numbers

THINK PRIME. THINK WESTLAKE. APRs

01_UCN.indd 1

said the company had already taken a digital-first strategy across retail and wholesale. But it didn’t mean there weren’t challenges. Thousands of workers had to be sent home and the company had to maintain culture over Zoom, he said. “We have a lot of young folks at the company who really enjoy being with each other,” he said. Data and analytics have been crucial on the remarketing side, Hermes said. It’s about understanding customers, how they search, how they view and their creditworthiness. Looking at the data aspects of a vehicle in terms of history and values is part of it. Carvana’s regular practice is hiring data analysts, data engineers and predictive modelers, so the company was ahead of the process. “Having a national scale is beneficial to us because we can move cars around and we may be able to find cars cheaper in one area and, because we own our own logistics, we can then move them around,” Miller said. Leavitt said Findlay has always been a new-car dealer first, but it’s made efforts to understand the used-car market better. As a result, they’ve bought into the whole idea of “velocity,” improving the turn of inventory and boosting gross profit. Miller said having pricing systems in place and monitoring it every day is critical. Imaging is also important. Miller said it was beneficial to have 360-degree photos on its website early on, but it continues to invest in this area. “We, honestly, stalked Carvana’s website and started to figure out how to make our pictures much more like (theirs),” he said.

as low as

1.99%

Same Day Funding

6/28/21 1:02 PM


DAA NORTHWEST

ROCK AUGUST & ROLL SALE 25th & 26th, 2021 ! k c a B It ’s

FEATURING

FEATURING

@mcconkeyauctiongroup

magauctions.com/rockandroll


Summer Reading 7/5/2021

Industry Leaders Share Their Book Recommendations Summer means car cruises, beaches, golf and barbecues, but it also means summer book recommendations. As the saying goes, “Leaders are readers,” and there’s no exception in the automobile industry. So, we reached out to various industry players to get their suggestions, which range across several categories and subject matter. We’ll start with our publisher’s recommendations, then follow with recommendations from industry leaders and end with our editor’s picks.

PUBLISHER’S PICKS “The Sack of Detroit: General Motors and the End of American Enterprise” by Kenneth White. It recounts the epic rise and unnecessary downturn of America’s most important industry. At the center of his absorbing narrative are the titans of the automotive world but also the crusaders of safety, including Ralph Nader and a group of senators including Bobby Kennedy. “The Day the World Stops Shopping” by J.B. MacKinnon. This book is an essential exploration of who we are and what we use, and a vision of a more sustainable world. The message is: we can’t stop shopping but we should stop shopping – the consumer dilemma that defines our lives and our future. “Value(s) Building a Better World for All” by Mark Carney. A bold and urgent argument by economist and former bank governor Mark Carney on the radical, foundational change that is required if we are to build an economy and society based not on market values but on human values. “Best Seat in the House: 18 Golden Lessons from a Father to His Son” by Jack Nicklaus II and Don Yaeger: Written with New York Times bestselling author Don Yaeger, the book gives us 18 valuable lessons that Jack Nicklaus II learned from his father, PGA champion Jack Nicklaus. Although the “Golden Bear,” as he is known by fans, is widely regarded as the best golfer of all time, with a record number of PGA major championships. His life and values show that true legacy lives on through your children, grandchildren, an others we are blessed to call family and friends.

Eric Johnson, a partner with the Bob Voltmann, CEO of the Nation- Hudson Cook law firm, offers up ome fiction, Andy Weir’s “Project al Independent Automobile Dealers Association, offered up a nice selec- Hail Mary.” (Note: The publisher and editor of tion of titles. “I am an avid reader,’ he said, “and this publication both loved Weir’s I buy stacks of used books, but here first book, “The Martian.”) Johnson added, “I’d be remiss if I are a few that I have really liked; “In the Garden of Beasts,” by Erik Lar- didn’t recommend the ‘CARLAW: son about President Roosevelt’s first F&I Legal Desk Book.’ Another great ambassador to Nazi Germany; “Un- choice is ‘CARLAW IV - The Federal broken” by Laura Hillenbrand about Government’s War on Car Dealers.” Both are Louis Zamfrom – ahem perini’s life – Hudson and tribulaCook. tions – the Tom Konmovie pales tos, KAR in compariGlobal chief son to the e c o n o m i st , book; “Sellalso offered ing the Ina glance at visible,” by his reading Harry Beckhabits. with an es“On my sential read nightstand for anyone right now is, in the service “Greece: Biindustry.” ography of a RetirModern Naing National tion,” which Auto Auction I read interCEO Frank mittently but Hackett recplan to read ommends a in its enclassic histirety when tory book, travel opens “Undaunted up and I can Courage: Photo by Jeffrey Bellant take a trip MeriwethGreece er Lewis, LIBRARY: Books are a staple for leaders and here are a to he Thomas Jef- few of our picks. We’ve also included picks from industry again,” said. ferson and leaders “I haven’t the Opening of the American West” by the great been there since 2010, which is my longest hiatus in many years, as I Steve Ambrose. It follows Lewis & Clark’s explora- was traveling to Greece every few years before that. tion of the Louisiana Purchase. “Lately, most of my reading has Manheim President Grace Huang offered up a timely suggestion, been business reading, without a lot “What If? Short Stories to Spark of time left over for complete books. Inclusion & Diversity Dialogue” by I have also read excerpts from “Collision Course: Carlos Ghosn and Steve L. Robbins. The book offers to help its readers the Culture Wars That Upended an be more curious and open-minded Auto Empire.” in our diverse world. Scott Maybee, President of NextBob McConkey, president and CEO, McConkey Auction Group, Gear Capital recommends “Trusted recommends “The Infinite Game” Leader: 8 Pillars that Drive Results” by David Horsager. The Eight Pillars by Simon Sinek. McConkey described it as “a re- of Trust (Clarity, Compassion, Character, Competency, Commitment, cent read that resonated with me.” The book, by the author of “Start Connection, Contribution, and Conwith Why,” is based on the premise sistency) are based on Horsager’s that, unlike sports or games which original research and extensive exhave a clear end, business is an “in- perience working with Fortune 500 finite game,” which requires a differ- companies and government agencies. ent mindset.

INDUSTRY PICKS

Tony Moorby, retired industry executive and UCN columnist, recommends “A Gentleman in Moscow” by Amor Towles. A 1920s Czarist Count is toppled from his society position and put under house arrest in the Metropol Hotel opposite the Kremlin – in an attic storage room. He leads a fabulous life with hotel residents, guests and staff. Cool ending after a colorful and descriptive read– lovely stuff.

EDITOR’S PICKS The legendary Bob Lutz, who worked in leadership positions at each of the Detroit 3 automakers at various times, has written a few books. On my list is “Icons and Idiots: Straight Talk on Leadership,” an interesting look at leaders from Lutz’s life. It includes his views on everyone from Lee Iacocca to Rick Waggoner. But he also discusses his high school teacher in Switzerland (!) and his Marine drill instructor. Great stories. Going way off the grid – but applicable to an age when mass shootings seem to happen too often – is “Left of Bang: How the Marine Corps’ Combat Hunter Program Can Save Your Life” by Patrick Van Horne and Jason Riley. This is a fascinating book for dealers, auction managers and others who want to avoid the unthinkable. The book examines those gut feelings people have before something bad happens. It teaches how to read people and situations to avoid danger. The key is to spot trouble “left of bang” – before it happens. Seriously, check it out. Lastly, Michael Walsh’s “Last Stands: Why Men Fight When All is Lost.” Military buffs will devour this history of “last stands.” It starts with the 300 Spartans at Thermopylae, going on to spotlight lesser-known battles as well as more famous ones, Little Big Horn and the Alamo. He continues through Shiloh and other wars to Stalingrad and, finally, the Battle of the Chosin Reservoir in the Korean War, where the author’s father fought. Several other events he discusses I never learned in school. But all of them feature men fighting for the guys next to them in the face of defeat and death. Inspiring, heartbreaking and humbling.

3


People in the News 7/5/2021

Pyle Family Auctions Names CCO

Pyle Family Auctions named auction veteran Jane Morgan as its chief client officer. As the CCO, Morgan will focus on sales growth and the client JANE MORGAN experience, as well as operational efficiencies at both Capital City Auto Auction and Mountain State Auto Auction. Morgan, whose employment with the Pyle Family Auctions began in June, has more than 30 years in the auction business. Her career began as a controller in 1989 and she advanced to AGM at ADESA Dallas, GM at ADESA Charlotte, RVP of the ADESA Eastern Region and most recently as president of the ADESA specialty division and off-site solutions. Morgan received the NAAA War-

ren Young Fellow, 2018 Leading Women in the RV Industry, 2014 Laurie Dobberphul Award for Outstanding Industry Female and countless auction awards from clients. “Jane is an industry leader with strong client relationships and we are exRYAN HAWLEY cited to have someone of her caliber on our team,” said auction owners Joe and Charlotte Pyle, owners of the Pyle Family Auction.

PAR Appoints Exec

PAR North America (PAR) announced the appointment of Ryan Hawley as vice president of sales and client relations. In this position, Hawley will lead a fast-growing team of sales professionals and liaise with clients across the country. As vice president of sales and client relations, Hawley will focus on connecting PAR customers with the

right solutions at the right time to best meet their needs, and on communicating PAR’s upcoming product pipeline. He will also be charged with ensuring an exceptional customer experience, providing an opportunity for clients to share feedback on MARK FORD their priorities, pain points and ideas.

Ford Retires from Manheim

Manheim announced earlier this year that Mark Ford, regional vice president for the Florida region, will retire at the end of this year, capping off a distinguished 33-year career. Since 2013, Ford has been responsible for Manheim’s 12 operating locations in Florida. During his tenure, these sales had double-digit increases in volume, outstanding revenue growth and strong operational efficiency.

Milestones Jack Tracey, executive director of the National Automotive Finance (NAF) Association, died June 21 after a brief illness. He was 74. Tracey was born on Feb. 11, 1947, in McKeesport, Pa. He graduated from Greensburg Central Catholic High School in 1965 and pursued a degree in Economics at Wheeling College and an MBA at Duquesne University. Tracey devoted the majority of his 50-year career to the consumer finance industry. He served as the executive director of the NAF since its inception in 1997. “He will always be remembered as a founder, leader, and fierce advocate for the nonprime automotive lending industry,” said NAF Association President Joel Kennedy. “Jack was the NAF Association’s first and only executive director of 25 years. “Please keep Jack’s family in your thoughts as they go through this difficult time.” Tracey is survived by his wife, Mary Ellen Tracey; and his daughters, Megan Elizabeth Carroll (Sean); Cara Jean Pyles; and Maureen Aimee Hudson (Chris); and by eight grandchildren, Ryan, Grady, and Molly Carroll; Lizzy, Kealy and Joe Pyles; and Caroline and Nathan Hudson.

4

Volume 27 | No.5 Published By General Media LLC USED CAR NEWS (ISSN 1555-7413) is published at : Used Car News P.O. Box 80800 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.

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.

C R O S S WO R D PAGE 14


Residuals 7/5/2021

Residual Values Forecasters Face Unique Challenge By Jeffrey Bellant

Fifteen months after COVID-19 destroyed any residual forecasts for 2020, a panel gathered to discuss projections in the pandemic aftermath. Supply issues and uncertainty ruled the discussion at the Conference of Automotive Remarketing, moderated by Charlie Vogelheim, of TPC management, in Las Vegas. Panelist Alex Yurchenko joined Black Book six years ago and leads the company’s analytics team. Vogelheim questioned Yurchenko about whether residuals are about art or science, to which Yurchenko responded “it’s both.” He said the key is putting the data science team together with the subject matter experts – the folks who know all about cars – and “mix them together.” This year makes it even more challenging. David Paris, senior manager of market insights for J.D. Power Valuation Services, stated what nobody disputed. “Ultimately, 2020 was a pretty wild ride,” Paris said. The “virtual shutdown of the wholesale marketplace” made a lot of people afraid. However, by August of 2020, wholesale prices rose to the highest they’ve ever been, Paris said. Values softened last fall as was expected, but this year they have gone through the “stratosphere,” Paris said. Year-to-date, wholesale prices are roughly 30% higher than even the 22 percent higher level from 2019, Paris said. Now, used-car retail prices are 11% higher year-over-year. Yurchenko said his team is seeing the same thing. “It’s all about supply and demand,” he said. “We also noticed that retail prices are more (steady) than wholesale.” Paris said the current trend is showing wholesale growth slowing, with wholesale prices virtually flat in mid-June. “I think we are nearing the top of wholesale prices,” Paris said. Paris said retail prices will remain high through 2021. “Essentially, this year we are expecting used-car prices to end, year-

over-year, approximately 29% higher,” he said. Eric Ibara, who has been with Kelley Blue Book for nearly 15 years, added that these are “unusual times” and added KBBs figures via Manheim are similar. But the next question is, will these used-car prices continue to flatten or will they come down? Ibara said the fear is how far or how fast they fall. “We need to be ready for the unexpected,” Ibara said. Paris believes wholesale prices are at their peak, but he expects a “more gradual decline” rather than a huge drop over the next couple of years. Yurchenko agrees that it will be a “soft landing,” though there is a big factor to consider. “The big unknown is the chip shortage,” he said. When it’s going to be resolved and how will new-car dealers adapt to this problem is the question, Yurchenko said. “We expect prices to get back to some form of seasonality, in terms of weekly or monthly depreciation, by Q4,” he said. However, he added that because of where prices are now, he doesn’t expect them to return to normal levels “for several years.” Paris said three-year-old retention levels over time are at record levels. Residuals now are at 60%. Going out mid-term through 2022 to early 2023, he expects things to settle down around 55%. Looking out to the end of 2023, residuals are at 50%, Paris said. Ibara said KBB forecasts values will be “volatile for the next three years or so.” Part of that is due to the drop in sales from 2020. “We had a 15% decline in what we thought new-car sales would be,” Ibara said. “Leasing declined, as well, last year.” As a result, KBB forecasts a 22% drop in off-lease volume in 2024. Ibara said it’s “very likely” that manufacturers could implement programs to either delay leases or pull them ahead to flatten out the void.

Continued on page 6 5


Used Car News 7/5/2021

Residuals – Continued from page 5 He expects that next year could be a return to normal values. “It really all depends on how the chip shortage turns out,” he said. Yurchenko pointed out another factor: rental units. With fewer of those units in the market, that creates its own shortage, which will help wholesale prices. Also, repossession volume has still not bounced back, he said. Last summer, when rental companies started to de-fleet, there were more vehicles with low miles. “The rental companies timed the market perfectly,” Yurchenko said. “They unloaded most of their inventory during the summer when the prices were high.” But now those units are hard to replace with the chip shortage and current prices. In terms of specific segments, KBB sees more strength in the nonluxury segment and SUVs, while

cars are soft. As a result, that will determine future lease volume as cars fall off in the wake of higher volumes of other segments. Yurchenko said with lease returns, the luxury segments – which normally have higher lease penetration – will see much smaller numbers in three or four years. He added that luxury units had practically no depreciation last year, when, typically, that segment usually has one of the highest depreciation rates. “Those segments are going to come back to earth,” Yurchenko said. Paris said one segment trend in the industry won’t change. “I think we’re going to continue to see pickup prices perform very strongly over the next several years,” he said. “I think SUV prices will be strong as well, although that segment is starting to get oversaturated with a

PUT THE POWER OF CHASE TO WORK FOR YOU. Your customers want to choose from quality vehicles, so you need a national industry leader who can deliver. That’s Chase. We offer: • A broad range of vehicles — from economy to luxury — upstream and through auctions nationwide • Convenient online and in-lane vehicle availability with on-site Chase remarketers Choose Chase-consigned vehicles at ADESA.com and Manheim.com.

YOUR CLEAR CHOICE FOR QUALITY.

2 1

3

4

4

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”). Retail/Loan and lease accounts are owned by 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”). Retail/Loan and lease accounts are owned by Chase.

3

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. Retail/Loan and lease accounts are owned by Chase. Maserati North America is solely responsible for its vehicle products and services and for promotional statements about them and is not affiliated with Chase or its affiliates.

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. Retail/ Loan and lease accounts are owned by Chase.

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. ©2020 JPMorgan Chase Bank, N.A. Member FDIC

6

20-017-A

lot of different models now.” In terms of passenger cars, “their shrinking footprint in the marketplace is going to ultimately help to prop up their values down the road,” Paris said. There is a part of the population that still wants passenger cars, such as younger people because of their cheaper prices and because they don’t want to drive what their parents are driving, Paris said. Ibara said in the first quarter, KBB saw compact SUVs gain a greater market share than compact and mid-size cars, which “took us by surprise.” Yurchenko added that 2020 was a good year for toys, from ATVs to motorcycles. Going forward, one thing is clear. “I think we all know that used-car supply is going to be a concern for the foreseeable future through 2023, 2024,” Paris said. A continued challenge comes from

franchise dealers competing in the marketplace with used-car dealers for clean, late-model units. That will also bolster used-car prices, Paris said. The other concern is the shrinking margins for used-car dealers. Vogelheim acknowledged that residual value forecasts for 2020 couldn’t have predicted COVID-19. However, he questioned if the industry was far enough out of the pandemic to forecast. Ibara said KBB is having to make some adjustments to its model because of where the volumes and values are now. Current values would tend to project skyrocketing values in the next three years. “We don’t think the strong values are going to persist for three years,” he said.


Retail Markets 7/5/2021 Compiled by Ed Fitzgerald

MASSACHUSETTS Pierrot Abiramia, president, Milford Auto Mall, Milford, Mass. “We’ve been in business here for 12 years. “Last year in March for COVID, we had to work closely with the governor to list car dealers as essential. We were only shut down for 2-3 weeks and when we reopened, we had to follow state guidelines like any other business. Surprisingly, when things opened back up, business was pretty solid. “COVID didn’t affect our online business much. I’m probably one of the few people who were buying vehicles online two years ago. It’s been working well for me. “We usually keep 35-40 vehicles. We average about 20 sales per month. I’d sell more trucks if we could find them, but it’s always been

8

like that with trucks. “We do a lot of financing, most of our customers are prime credit customers. So, a lot of them don’t put any money down. The length is usually 60 months. Lately we have been seeing more down payments than usual. It’s a combination of things, the stimulus money and different government help. “We send our repairs out; those average $350-550 per vehicle. I try to stay away from vehicles that need body work. We do our reconditioning (detailing, cleaning) in-house. “The average age of our vehicles is four to five years old, with the mileage between 80,000 and 100,000. “I haven’t been real aggressive in my buying, but I’m keeping my lot stocked. Right now, we’re probably selling 15-16 cars a month. “The last car I sold was a

’16 GMC Sierra with 55,000 month on average. miles. We got $29,000 for it.” “One-third of our sales are trucks, one-third SUVs and one-third cars and minivans NEBRASKA combined. “Primarily we sell domesClint Jones, co-owner, tics. I’d say we’re 80 percent Clock Tower Auto, Colum- domestic, and 20 percent bus, Neb. import. “I’ve been in business for “There are two auto auc10 years. tions about 100 miles away. “I have an accounting And there’s one in Kansas background and was once City. One is Manheim, one is the CFO for a dealer group. ADESA and one is indepen“We did not have to shut dent. We regularly attend down for COVID. We im- those auctions. plemented a lot of safety “Our average down paymeasures, such as general ment, including a trade-in, hygiene and sterilizing our is about $2,000. The average vehicles. term length is 45 months. “Our online business Our philosophy is when we stayed about the same. I sell a customer one car, we won’t say we were on the then want to sell them evfront end of shipping vehi- ery vehicle after that. If you cles, but I think a lot of it de- want to sell them a vehicle pends on your environment, two years from now you and we were in a state that want to put them in a posididn’t shut down. tion where you CAN sell “Our inventory target is them a vehicle, so we try to 50 vehicles, and we sell 30 a

do the shorter terms every time we can. “Our average reconditioning cost is $450 per vehicle. We outsource all of it. “We advertise online, Facebook Marketplace, Cargurus, cars.com. We do some local radio. We sponsor some youth sport programs. When they broadcast a football or basketball game, we’ll do the halftime show. “It’s more of us supporting our community. If one of our customers comes in and needs a donation for their kid playing soccer, we just say ‘how much.’ We want to sell that family all their cars and we want to sell that kid his first car. “Our average car is probably five years old, with 80,000 miles. “The last vehicle I sold was a ‘16 Ford 150 crew-cab pickup, with 65,000 miles and it sold for $39,400.”


Wholesale Markets 7/5/2021 Compiled by Jeffrey Bellant

LOUISIANA Steve Chiasson, managing partner, Greater Shreveport-Bossier Auto Auction, Shreveport, La.: “We had our 14th anniversary in January of this year. “Our numbers are way up. Price per car sold is up. Our numbers are holding steady. “It’s been more and more difficult to get cars. There’s such a shortage. “We’re a four-lane auction and we’ve run as many as 973, which is tremendous for us. We’ve had several 900car sales and some 800-car sales. “But we seem to be leveling off at 500 to 600. “(With conversion rates) we were in the mid-70s when the shortage crunch really hit. Now we’re leveling off, right at 60 percent, 59 percent one week, 60 percent the next. It just depends on the inventory. “Just throw the book out

the window. “The prices on cash cars, those from $5,000 to $15,000 – if they are 100% ready to sell – they are bringing all the money. “Fleet/lease/repo has shrunk to the point of barely being in existence. Pre-pandemic we’d have a 70/30 mix of dealer to fleet/lease/repo. So right now, we have 90 percent dealer cars. “The average price on the block is $13,475. (Pre-pandemic) that would have been $7,000 to $8,000. “Our online business is building more and more. “Going forward, it’s all going to be based on what the manufacturers do. Dealers have trucks on order, but they’re sitting in Mexico waiting on chips. “The new-car lots are empty. You could play baseball on those lots. I’ve heard from a dealer that every truck they had coming in during June

was already pre-sold. “Some of the forecasts I’m hearing is it could be May 2022 before things get back to normal. “So now they’re buying used and driving the prices up there. “I’ve heard wholesalers go to new-car dealers and buy new cars, with no miles and pay tax, title and license. They drive straight to the auction and sell them and make between $3,000 and $4,000 a copy. “Unbelievable. Where do you go from here?”

MICHIGAN Eric Wagner, general manager, Greater Kalamazoo Auto Auction, Schoolcraft, Mich.: “The auction is 45 years old (it was acquired by XLerate in 2015). We have eight lanes. “We’re down a little bit. Pre-pandemic we’d run be-

tween 600 and 700 vehicles and up to 800 or 850 or a promotional sale. “Now, we’re at around 500 (units) per week. “Conversion rates are changing pretty quick. For eight to 12 months, we were averaging in the mid-70s, near 80%. Last week they were back to 69%. “Our mix is probably 65% dealer consignment and 35% fleet/lease/repo. The repos ae starting to pick up a little. It’s not what it was yet. “For online sales we use Auction Edge. Both activity overall and sales online have increased quite a bit. “It’s been difficult in Michigan during the pandemic because our governor has had a lot of mandates. “What this pandemic has really done in the business is force dealers who said they would never buy online to learn how to do it. That was the only way they could get

inventory. “Some of them figured out it was more efficient for them. They could stay at their business and if they have three computer screens, they can have three sales up at the same time and look at 1,500 to 2,000 cars. “With some of the sales at the beginning of the pandemic, our online percentage was better than in-lane. Some weeks we were selling 60-70% online. “Online sales are still strong. “The average price on the block has varied, but it’s jumped up about $3,000 from pre-pandemic. When I first got here two years ago, the average sale price was generally around $7,500. But we are getting a better car now. ““I feel good about the business and think we’re going to have a good year.”

IN STOCK FOR

2021 SUMMER SALES Chrysler Capital is proud to present some of today’s most popular off-lease trucks and SUVs.

Fresh inventory is rolling in!

Visit a Chrysler Capital auction partner or ChryslerDirect.com to get up-to-the-minute, off-lease vehicles and boost your 2021 summer inventory.

Bolster your summer sales with the preowned vehicles your customers want to drive!

Visit ChryslerDirect.com or ADESA.com to view available vehicles. ©2021 Santander Consumer USA Inc. All rights reserved. Chrysler Capital is a registered trademark of FCA US LLC and licensed to Santander Consumer USA Inc. Jeep and Ram are registered trademarks of FCA US LLC. All other trademarks are the property of their respective owners. CC_DLR_201209_051721

With preowned vehicle sales hitting all-time highs this year, Santander Consumer USA has the certified reconditioned vehicles you need to stock up for summer.

©2021 Santander Consumer USA Inc. All rights reserved. Santander, Santander Consumer and the Flame Logo are trademarks of Banco Santander, S.A. or its subsidiaries in the United States or other countries. All other trademarks are the property of their respective owners. SC_DLR_201209_052421

10

10_UCN.indd 1

6/28/21 2:10 PM


Wholesale Numbers 7/5/2021

seg/type -------Car Car Car Car Car Car Car Car Car Car Truck Truck Truck Truck Truck Truck Truck Truck Truck Truck Car Car Car Car Car Car Car Car Car Car Truck Truck Truck Truck Truck Truck Truck Truck Truck Truck Car Car Car Car Car Car Car Car Car Car Truck Truck Truck Truck Truck Truck Truck Truck Truck Truck Car Car Car Car Car Car Car Car Car Car Truck Truck Truck Truck Truck Truck Truck Truck Truck

make/model/name ---------------Honda Civic Toyota Camry Toyota Corolla Nissan Altima Ford Fusion Chevrolet Malibu Nissan Sentra Hyundai Elantra Ford Mustang Hyundai Sonata Ford F150 Chevrolet Silverado 1500 Ram 1500 Toyota RAV4 Honda CR-V Chevrolet Equinox Jeep Grand Cherokee Ford Escape Ford Explorer GMC Sierra 1500 Honda Civic Toyota Camry Toyota Corolla Nissan Altima Ford Fusion Chevrolet Malibu Nissan Sentra Hyundai Elantra Ford Mustang Hyundai Sonata Ford F150 Chevrolet Silverado 1500 Ram 1500 Toyota RAV4 Honda CR-V Chevrolet Equinox Jeep Grand Cherokee Ford Escape Ford Explorer GMC Sierra 1500 Honda Civic Toyota Camry Toyota Corolla Nissan Altima Ford Fusion Chevrolet Malibu Nissan Sentra Hyundai Elantra Ford Mustang Hyundai Sonata Ford F150 Chevrolet Silverado 1500 Ram 1500 Toyota RAV4 Honda CR-V Chevrolet Equinox Jeep Grand Cherokee Ford Escape Ford Explorer GMC Sierra 1500 Honda Civic Toyota Camry Toyota Corolla Nissan Altima Ford Fusion Chevrolet Malibu Nissan Sentra Hyundai Elantra Ford Mustang Hyundai Sonata Ford F150 Chevrolet Silverado 1500 Toyota RAV4 Honda CR-V Chevrolet Equinox Jeep Grand Cherokee Ford Escape Ford Explorer GMC Sierra 1500

2020-07-01 ---------9600 9750 7750 7450 8000 10725 5800 6100 13100 8350 21500 23100 19500 11700 12750 10000 14150 8800 16750 22900 10750 11375 9800 9300 10300 11900 7650 8150 14600 9700 25100 24900 21500 13250 16275 12425 17475 10750 19550 24400 12450 14050 11150 10775 11400 13250 8950 9100 16150 11375 26800 26400 23300 15275 18800 13850 19425 11850 21325 26000 14200 15200 12250 13075 12850 14275 10350 10800 19000 13575 28000 31000 18250 20525 15200 23625 14450 24500 31500

2021-01-01 ---------9600 9800 7900 7800 8550 9875 5900 6900 14500 8700 24500 26700 22800 12750 14375 10200 16275 9300 16550 26500 10850 11800 9450 9800 10550 11750 8300 8450 16050 10250 27000 28700 25400 14525 17350 12250 19950 11050 20425 28000 12550 14350 10900 11300 11800 12775 9950 9800 17475 11950 29300 30700 27300 16400 19650 13225 21450 12700 21500 30600 13950 15200 12300 14025 13000 14100 11300 11350 19100 13750 31300 35400 19350 21925 14950 23275 14900 23025 35200

2021-07-01 ---------13050 12825 11750 10325 12750 12500 9250 10450 18700 11050 29200 31000 26400 16950 17575 12700 18500 11900 19550 31800 14700 15225 13850 13425 15400 15400 11900 12350 20300 13550 32700 33700 30600 18400 21725 15525 22625 15025 23250 33000 17000 19525 15950 15375 17400 17525 14800 14050 21700 16050 36900 37200 33000 20925 23350 20250 24525 17575 25400 36500 18400 20625 17700 19675 18850 19550 17400 16100 23275 18075 39600 42000 23400 26025 21475 26825 19450 27475 40800

2022-07-01 ---------9525 9750 8550 7150 9375 8625 6850 7250 13075 8425 20850 23200 19000 12925 13900 8675 12850 7500 11975 25025 10800 11450 10000 9050 11300 10575 8725 8600 14425 10225 23375 25400 21925 13900 17325 10700 15575 9275 14000 26525 12500 14600 11475 10425 12825 12150 10750 9925 15600 12025 26775 28175 23925 15800 18750 14325 17200 10900 15875 29475 13775 15625 12775 13100 14200 13875 12625 11450 16875 13600 29375 32075 17950 20875 15500 19275 12300 17875 33300

2023-07-01 ---------7750 8125 7025 5775 7450 6875 5550 5650 10550 6975 17675 19400 16675 10775 11675 6775 10000 6050 9875 21400 8850 9450 8150 7125 8975 8375 7025 6800 11800 8325 19825 21375 19150 11650 14550 8400 12000 7325 11350 23050 10250 11925 9350 8200 10250 9675 8575 7875 13000 9725 23150 23800 21125 13200 15950 11250 13400 8600 13275 25750 11500 12950 10425 10150 11525 11325 10050 9200 14150 11050 25775 27200 15225 17775 12525 15400 9900 15525 29400

Actual Wholesale and Projected Residual Values

M/Y --------2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019 2019

Source: Black Book


Disconnected Jottings From

Tony Moorby 7/5/2021

The last time I wrote about our home improvement project, renovations on the kitchen and master bathroom, I made a few tongue-in-cheek remarks about time and costs. Having started the two-room project in the first week of March with an estimate of six weeks for completion, some contractors are still with us and it’s almost July. The painters brushed us off for a month so the electrician couldn’t finish lighting fixtures but they’re a good-humored bunch of guys and easy to have around, especially as the quality of their work would do justice to Michelangelo! The plumber looked like kin to the Beverley Hillbillies, a monster of a man with a beard down to his morethan-adequate waist and of course, he sported the prerequisite overalls, thankfully obviating the possibil-

ity of a plumber’s crack. He bent pipes and fittings into works of art with the most infinite attention to the tiniest detail. In spite of his height and girth, he had the capability to squeeze in and out of the smallest places as though he were a limbo dancer. The HVAC engineer, at first a growly-bear tempered guy whose time of day we’d interrupted, turned out to be a guru on all kinds of subjects and a philosopher of note. Like his colleagues, an exquisite eye for detail ensured neat and tidy work worthy of a sculptor. The trim and finish guy, a huge fellow who you’d want on your side in a dark alley, had swept-back hair in a silver grey cascade of a ponytail and muscles to underscore a self-assured personality of utter correctness in his approach to everything. He was respon-

sible for the initial demolition and tear down with a team of six young men, each of whom had a talent for his place on the team. They were polite, clean, and attentive to working in someone’s home as well as taking an interest in the project, as a whole. The boss drove a pickup truck that looked like it could win a tractor pull. His general knowledge of all things construction is encyclopedic allowing him to solve problems immediately on the fly. At first blush I took him to be a bit of a boisterous showoff but almost immediately took a shine to his worldly knowledge and his appreciation of fine food. He also had an Englishman’s sense of cutting humor and an appealing witty sarcasm. Our experience with the stone and tile setters hasn’t been pristine – far from it; the list of things that have

By Myles Mellor

Across

31. Chevy SUV

1. New Kia SUV

34. Wheel’s edge

4. Crossfire maker

35. ___ premium, 2 words

9. It will affect resale value

36. Sound from a sty

4. Animation platform (abbr.) 5. Helium symbol 6. Thanksgiving vegetable

37. Oil company

7. Makers of the Freelander, 2 words

11. Premium midsize car from Kia

38. Chevrolet model

8. Corporate reward

39. Pay for

9. Off-road goer, for short

14. VW ad phrase ___ Auto

41. Built low to the ground

12. Sticker

15. Auto mechanic’s lubricant

42. Nissan SUV

16. Mid-size car from Hyundai

19. Concept car from Nissan

43. Aviator and Blackwood

28. DC alternative 30. Car bar

13. Diesel, for one

20. Beetle’s cousin

47. Kia minivan

22. Hyundai 4-door

2. Raised 3. Have the pink slip







24. Wine barrel



To see past columns from Tony Moorby, visit www.usedcarnews.com/ columnists/tony-moorby

too. I gave them some suggestions that had to do with sex and travel! We now have a new contractor who has to demolish all that was done before all the way down to the sub-floor. It’s the first time I’ve seen a renovation renovated!



 

 







































 

















 

39. Fan ___ (plural)

1

2

B

L

E

3

A

C

C

4

5

6

7

K W O O

D

P

A

O

R

I

9

cheese

38. Kelly Blue Book estimate







29. Honda SUV

33. Jiffy liquid





40. Like much wine and

32. Shouting





27. Popular Toyota 30. Foresters, e.g.



I

8

S

N

E

U

T

R

A

L

T L

R

D

A

M

A

A

C

Y

O G

H

E

L Q

A 18

E

S

P

R

E

16

S

E 17

S

E W O O 13

15

G

A

11

12 14

T

H

10

19

T

N

I

W

G

U

S

M

D

20

S

U

21

Y

B

22

C

E

23

T

A

I

L

24

41. Viewed

25

C

B

E

R

O

K

E

U

N

S

L

31

S 29

N

V

E

R

T

T

U

R

I

O 33

I

B

D

30

X

32

O

E

27

E 28

C

Y

26

H

Y

L

E

M

34

P

G

I

A

35

44. Crew ___ truck

L

A

36

I

A

T

N

E

38

S

T

S

E

R

A

E

41

45. It rises at dawn

R

37

R

E

E

A

E

39

T

A

K

40

T

Solution to this puzzle in the 7/26/2021 issue. Call 1.800.794.0760 for a FREE subscription.

14

• 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



18. A kind of Dr.

46. Operate

21. Environmental watch- 48. For example, briefly dogs, for short 49. Chevrolet Colorado 23. Touring vehicle ZR2 ____ 25. Reveal at an auto Down show perhaps 1. Midsize model from 26. Honda model Kia

Tony Moorby

Play Online at Us e d C a r N e ws. c o m

10. Makers of the QX 80

17. Old VW

gone wrong is a catalogue of crazy catastrophes. They cut holes in tiles that were too big for shower faucet fittings, they brought a countertop for a wet bar with no hole for the sink – it’s a wet bar! They cut the kitchen island template for a cooktop all wrong. Compared to the rest of the folks who’ve worked on our house, these guys were sloppy, untidy and uncaring to the point of nuisance. They left their wet saw equipment in our front yard for the world to see as though it were an art installation. One of them had an expensive level stolen, having left it outside – in this day and age. To end this unfortunate relationship with the stone folks they laid the tile for the bathroom floor wrongly and the foreman walked on them before they were set. They had to be lifted and reset – they did that wrongly,

A

R

I

E

R

R

S

42

I

M

D

A

I

M

L

E

Solution to the 6/14/2021 puzzle


NEED TO MOVE INVENTORY?

WE’RE THE PROS! AutoNation Auto Auction provides a trusted place to buy and sell quality used vehicle inventory.

LIVE IN LANE

AUCTION!

Forget online platforms. Experience the adrenaline of bidding live.

Plus, we need your cars! If you have units you don’t want, we know people who do!

Bid on exclusive inventory with these great features: • Full-Service Auto Auctions • High Turn Rate

BID ONLINE OR VISIT OUR 4 LOCATIONS

ATLANTA Every Thursday, 2pm | 855-907-ANAA (2622)

ORLANDO Every Thursday, 12pm | 855-906-ANAA (2622)

HOUSTON Every Friday, 9:15am | 855-905-ANAA (2622)

LOS ANGELES Every Friday, 9:30am | 855-904-ANAA (2622)

• 90%+ Sell Through • Full integration with Auction Access, Auto IMS and all Edge Products – Including EdgeSimulcast For more information, visit

AutoNationAutoAuction.com

We’re adhering to CDC guidelines: social distancing • face masks required


Profile for Used Car News

Used Car News 7/5/2021  

Used Car News 7/5/2021  

Recommendations could not be loaded

Recommendations could not be loaded

Recommendations could not be loaded

Recommendations could not be loaded