Used Car News 7/26/2021

UCN 7/26/2021

Used Car News NIADA Conference Focuses on Member Needs

By Jeffrey Bellant

Buy with Total Confidence.

IN THIS ISSUE:

Rush - Dated Material

• NAAA CEO • Legislation • Recalls

The National Independent Automobile Dealers Association will celebrate 75 years at its annual convention & expo in San Antonio next month.

The milestone anniversary follows on the heels of the global pandemic, making it a much anticipated event. “We’ve got a good show planned,” NIADA President Louis Tedeschi said.

The NIADA features a lot of new faces, starting at the top with new CEO Robert Voltmann.

One big announcement is that dealer trainer Joe Lescota will be back on the agenda for the first time in several years.

“Joe Lescota’s coming back and doing two sessions,” Tedeschi said.

In the past, Lescota served as chairman of Northwood University’s automotive marketing department where he helped develop NIADA’s Certified Master Dealer program in 2001. He was NIADA’s lead CMD instructor for 14 years and served as director of dealer development from 2012 to 2017.

Lescota has always been a popular teacher and speaker over the years.

“We’re excited about it and the reaction about the news has been really good,” Tedeschi said.

The general session will include speaker Chris Collins, author of “Gamification: Playing for Profits,” and host of the “Service Drive Revolution” podcast.

“We’re bringing in a complete service track,” Tedeschi said. “The reason we’re bringing that in is that service rescued a lot of our dealers during COVID-19.”

Tedeschi said the goal is to refocus on states and membership.

“We want to bring in benefits and (education) that focuses on them,” he said. “States are an outreach of NIADA. That’s where our members come from.

“We’re also bringing the Special Equipment Market Association (SEMA) back in, including SEMA vendors to help dealers.”

NIADA will also have an NIADA association app for members. It will include a button to report curbstoning, which has been a focus for the group’s curbstoning task force.

NIADA has partnered with AuctionACCESS on this issue. The convention will have a curbstoning and enforcement panel, including an official from Arizona where a huge curbstoning ring was broken up a

couple of years ago.

“The whole idea is to make everything easier for members,” Tedeschi said.

Used Car News 7/26/2021

NAAA Hires Familiar Face as New Chief Executive Officer FREDERICK, Md.—The National Auto Auction Association is pleased to announce that its board of directors has appointed Tricia Heon as NAAA’s new chief executive officer following a rigorous six-month selection process guided by executive search firm Spencer Stuart. Heon succeeds Frank Hackett, who is retiring after 17 years in the leadership position.

She will be the first woman to head the 73-year-old association, which represents more than 350 auction members and 130 associate members who comprise the leading remarketers of used vehicles and related auction services in the world.

“This marks a milestone for NAAA and for the growing number of women who have chosen to build careers in our traditionally male industry,” said NAAA Board Chairperson and Past President Laura Taylor. “Tricia has been a valued part of this organization for 10 years. She will bring that experience and knowledge with a fresh perspective and new ideas to

her CEO role.”

Heon joined NAAA in 2011 as the Legislative Director and Operations Manager and was later promoted to Chief Operating Officer in 2019.

During her decade with NAAA, Heon has been responsible for the creation of its Political Action Committee, the annual Day On The Hill advocacy event in Washington, D.C., and the monitoring of federal and state regulations.

She has also been instrumental in the development of various projects and initiatives, such as the study to address the auto technician shortage and reports on the future of the industry, as well as planning meetings, programs, and the convention.

Before coming to NAAA, Heon worked as a local government budget analyst and as a consultant projecting the impact of the federal budget on various entities. She holds a B.A. in economics and political science from The University of Albany and earned a master’s degree in pub-

Photo Courtesy of NAAA CEO: Tricia Heon, a longtime NAAA staff member who recently served as COO, was recently appointed the association’s new chief executive officer. She replaces her former boss, Frank Hackett, who is retiring after 17 years at the helm.

lic administration at Syracuse University’s Maxwell School of Citizenship and Public Affairs.

“We’re thrilled and could not be happier with the choice,” said NAAA President Julie Picard.

“Tricia’s strong organizational and communication skills, along with her outstanding professionalism, industry awareness, and dedication, has demonstrated she is up to that task.”

High Mileage Units Also Suffer from Inventory Shortage

By Jeffrey Bellant

A new report from Edmunds shows the average transaction price for all vehicles sold at dealerships with mileage between 100,000109,999 miles climbed to $16,489 in June 2021, compared to $12,626 last year, which is a 31% year-overyear increase and the highest that Edmunds has on record for those vehicles.

David Brotherton, a former 20 group moderator now with Buckeye Dealership Consulting, said Edmunds data is reflective of what dealers he has talked to are saying.

“Cheap cars – and ‘cheap’ is definitely in quotes – are impossible to find,” he said. “There’s such a shortage of vehicles, along with a strong demand.

“Even salvage rebuilds are at historic highs.”

Edmunds analysts took a look at the top 10 used vehicles that dealers sold with mileage between 100,000109,999 miles in June 2021 and identified their average age, transaction price and days to turn (DTT): • Trucks topped the list of the greatest year-over-year increase in average transaction prices: The

Chevy Silverado 1500 hit an ATP of $26,914 in June 2021, which was a 49% year-over-year increase; the Ford F-150 climbed to $25,924, which was a 43% increase; and the Ram 1500 commanded an ATP of $24,657, which reflected a 42% increase.

• Vehicles that sold faster year over year were more of a mixed bag. The Jeep Wrangler topped that list with an average DTT of 29.7 days, a 37% year-over-year decrease, followed by the Ram 1500, which had a 28% year-over-year decrease in DTT to 27.4 days.

And the Honda Civic came in third with a 25% year-over-year decrease in DTT to 28.3 days.

“It’s been a long-held belief among many car buyers and sellers that a vehicle’s value begins to decline dramatically once it crosses the 100,000-mile mark, but that’s proven to be wrong as vehicle technology and durability have greatly improved over the years,” said Ivan Drury, Edmunds’ senior manager of insights.

“The soaring demand we’re seeing in the used vehicle market right now only further debunks this myth: We’re seeing 7- to 8-year-old

vehicles with more than 100,000 miles commanding prices today that are more like the cost of 5-yearold vehicles with 60,000-80,000 miles a year ago.”

Brotherton said this trend is challenging for many used-car dealers.

“What dealers are doing about it is they’re getting more creative,” he said.

A dealer who used to have a milage cutoff at 120,000 before, might now go to 150,000 or 160,000 miles – depending on the vehicle.

“Maybe they look at vehicles that need a little more work done to them, but at least they’re able to acquire the inventory to try and make it right,” Brotherton said.

Longtime buy-here, pay-here trainer Chuck Bonanno, also with Buckeye, said the buy-here, payhere dealer might have a little advantage over a franchise dealer.

“If you’ve got the capital, you can spend more for a car, you can get a little bit of an older car since you’re going to finance it and take care of it for the life of the loan,” he said.

But a typical retailer has to use a bank to buy the loan for a car that’s likely over book value.

“On the other side, paying $1,000

to $3,000 more for what was the same car (before the shortage) adds up in a hurry from a capital perspective,” he said.

So, finding inventory at the right price is critical.

Although many dealers were forced to online auctions during the pandemic, now they need to be in even more places to find inventory, Brotherton said.

The other issue becomes transportation costs and shipping times.

Also, since dealers have less inventory, the turns are quicker than ever, Brotherton said.

Edmunds data confirms this, showing higher-mileage vehicles are selling much quicker off the lot.

All vehicles sold with 100,00109,999 miles had an average of 30.5 DTT in June 2021, compared to 37.7 days in June of last year.

A typical dealer might turn their inventory about eight times a year, which is a 60-day supply, between vehicles that are lot-ready and those being prepped, Brotherton said.

“I’ve got people that have turn rates that are double that now,” Continued on page 8

3

People in the News 7/26/2021

State Line Honors Retiree On Bernie Andrews’ last day at State Line Auto Auction all of his fellow employees wore special highvisibility T-shirts denoting Bernie’s signature catchphrases: “Darn Tootin” and “10-4.” The auction on May 28, 2021, celebrated Bernie’s 32nd anniversary with the company.

During Andrews’ vast auto auction career, he held many jobs. He started at State Line after working at a local Dodge dealership. Andrews has worked in different departments including supervising the body shop, mechanic shop, and was the auction’s marketing manager for a time.

In 2007, he moved into his role as dealer relations manager. This put him in charge of the entire arbitration process at State Line.

His expertise in handling difficult conversations and “acting as the umpire” to help keep vehicle deals together did not go unnoticed. Over the past few years, Andrews was also the onboard manager for new employees and assisted with their hiring and interview process. He also played a vital role as a committee member of crafting the NAAA’s

Arbitration Rules for the auto auction industry.

“I do not say this too often, but Bernie will be a very tough employee to replace,” said Jeff Barber, president of the Waverly, N.Y.-based auction.

“His expertise, professionalism, and integrity was paramount to the success State Line has had through the years. You could always count on Bernie to do the right thing. Bernie was the one that handles most dealer arbitration problems. One legacy that Bernie instituted here is an internal reference; he referred to each arbitration as an ‘opportunity.’

“His dedication to our business is unparalleled and he will be greatly missed by both employees and customers alike. We wish Bernie the best on this new and exciting journey into retirement.”

Auction Promotes Leader America’s Auto Auction has announced that Christina Potts has been named the company’s National Client Accounts Manager. A native Texan with 15 years devoted to the auction industry, she brings with

her a strong background in operations, fleet/lease management and client relationships.

“We are so fortunate to welcome Christina Potts back to America’s Auto Auction,” said Tammy Swofford, America’s national sales director, explaining that Potts was part of the inaugural team at America’s Auto Auction Houston when the facility opened in 2015.

“Christina is sure to be a strong addition to our management team, particularly in this unique and challenging time in our industry,” said Swofford.

“She’ll be a great support to America’s Auto Auction on a national level and a great asset to our 23 auction locations.”

Potts began her career in the industry as a transportation coordinator before signing on with America’s Houston facility to head its transportation department and serve as the fleet/lease admininstration manager.

Following another two years as fleet/lease manager and commercial accounts manager in the Houston area, she returns to America’s.

“America’s Auto Auction is a great company, a great work family, and I feel like I’m coming home,” said Potts.

XLerate GM Wins Award XLerate Auction Group announced that Sara Edgington, general manager for Texas Lone Star Auto Auction, has won the 2021 Texas Auctioneer’s Association Senior Bid Calling Championship held earlier this year at the Kalahari Resort & Conference Center in Round Rock, Texas.

Edgington competed on Friday and was named champion at the awards banquet the following evening. The competition was judged by five industry experts with points awarded in six categories, which included Style, Overall Bid Calling, Professional Image, Opening Statement, Salesmanship and Professionalism.

“Sara is the first female in the 30year history of the contest to win the senior competition,” stated XLerate’s CEO Cam Hitchcock. “We are very proud of her accomplishments – in winning this award, and in the strong leadership she brings to the Texas Lone Star auction.”

Edgington reported that her father, Lyle Bond, won this division in 2000.

“This has been the highlight of my 24 years in the auction industry that I get to share the same award as my father,” she said.

4

Volume 27 | No.6 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

Legislation 7/26/2021

State Considers Registration Law

Submitted photo LEGISLATION: Michigan state Sen. Roger Victory introduced a bill that would allow consumers to get vehicles registered or titled at any dealership. He said the bill would ease the backlog at the Secretary of State offices. However, a board member of the Michigan Independent Automobile Dealers Association is not in favor of the measure.

By Jeffrey Bellant

Michigan car dealers might be registering and titling cars of noncustomers under new legislation introduced this month by Sen. Roger Victory.

“This is about creating more options for hardworking folks to access in-person services when they buy or sell a car or need to register their truck,” said Victory, R-Hudsonville, when he introduced the bill. “Auto dealers in our state are already allowed to process vehicle registrations and title transactions for cars and trucks they sell on their lots.

My bill would allow them to expand these necessary services for vehicle purchases that happen outside of their dealership, like a direct sellerto-buyer transaction.”

Senate Bill 585 would allow auto dealerships in Michigan to perform vehicle registration and title transactions for all car and trucks, not just the vehicles they sell on their lot.

The bills would also allow dealerships to charge a fee for the services and removes the fee to the secretary of state for these transactions when completed by a dealer.

The bill has been referred to the Senate Regulatory Reform Committee for consideration at press time.

Victory told Used Car News recently the legislation was prompted by the backlog at the Secretary of State offices, which are the motor vehicle bureaus in Michigan. Some appointment times take up to a month.

“It’s a problem throughout the nation, but there seemed to be a real issue of getting appointments for this

service, especially for some elderly,” Victory said.

There are also challenges in some rural areas where there isn’t the same Internet capacity.

“So, we thought auto dealers could provide some of these basic services to the disenfranchised parts of our population,” Victory said.

He added since dealers already handle these services and have the capacity, it might help the state and consumers.

Victory said he got feedback from the Michigan Automobile Dealers Association, though staffers have reached out to others.

“At this point in time, we’ve had a pretty positive response,” he said.

“We’re not reinventing the wheel with this.”

He said it’s not uncommon for other private sector businesses to provide state services, such as sporting goods stores that offer fishing or hunting licenses.

Victory is hoping for bipartisan cooperation in the Legislature.

Ed Ophoff, owner of Ophoff Motor Sales in Grand Rapids, Mich., isn’t crazy about the idea.

“To think you’re going to have help that’s going to be competent in doing titles or registrations (for nondealership customers), it just isn’t going to happen,” said Ophoff, who serves on the Board of Directors of the Michigan Independent Automobile Dealers Association. His niche is $5,000-and-under cash-only deals.

Ophoff’s concern is that the legislation forces the dealer to police titles and registration for people who aren’t the dealer’s customers.

Continued on page 8

5

Recalls 7/26/2021

NHTSA Recent Recalls Chevrolet Bolt The National Highway Traffic Safety Administration is urging owners of select 2017-2019 Chevrolet Bolt vehicles to park their cars outside and away from homes due to the risk of fire.

Owners of these vehicles should park the cars a reasonable distance from homes and other structures immediately after charging and should not leave the vehicles charging overnight, according to General Motors.

The potential number of vehicles affected is 77,842.

The vehicles that should be parked outside are those that were originally recalled in November 2020 for the potential of an unattended fire in the high-voltage battery pack underneath the backseat’s bottom cushion.

The affected vehicles’ cell packs have the potential to smoke and ignite internally, which could spread to the rest of the vehicle and cause a structure fire if parked inside a garage or near a house.

This recall affected 50,932 model year 2017-19 Chevrolet Bolt vehicles.

Vehicles should be parked outside regardless of whether the interim or final recall remedies have been completed.

NHTSA is aware of two recent Chevrolet Bolt EV fires in vehicles that received the recall remedy.

NHTSA opened an investigation in October 2020, continues to evaluate the information received, and is looking into these latest fires.

with a Duramax diesel 6.6 liter engine and an optional engine-block heater cord.

An electrical short-circuit may occur in the engine-block heater cable or in the terminals that connect the heater cable to the block heater.

The potential number of units affected is 331,274.

Dealers will disable the block heater, free of charge.

GM will provide free replacement block heaters and cords under a separate customer satisfaction campaign.

For vehicles previously included in recall 19V-328, the heater cord will be replaced and rerouted, free of charge.

Owner notification letters are expected to be mailed Aug. 16. GM’s number for this recall is 212329840.

General Motors LLC is also recalling certain 2015-2016 GMC Sierra 1500, 2500, 3500, and Chevrolet Silverado 1500, 2500, and 3500 trucks.

The roof-rail air bag (RRAB) inflator end cap may detach from the inflator, or the inflator sidewall may rupture.

The potential number of units affected is 410,019.

Dealers will replace the left and right side RRAB modules, free of charge. Interim owner notification letters informing owners of the safety risk are expected to be mailed Aug. 16.

Owners will receive a second notice when the remedy is available.

This recall supersedes NHTSA recall number 20V-736. GM’s number for this recall is N202324251.

Mazda 3 Mazda North American Operations is recalling certain 2004-2007 Mazda3 vehicles.

During air bag deployment, the plastic emblem on the steering wheel air bag module cover may shatter, and project plastic fragments into the vehicle.

The potential number of units affected is 260,915.

Dealers will replace the air bag module cover, free of charge. Owner notification letters are expected to be mailed Aug. 28. Mazda’s number for this recall is 4921G. The NHTSA campaign number: 21V494000.

Nissan Rogue Nissan North America is recalling certain 2021 Rogue vehicles.

The second-row upper tether wires may have been improperly welded to the seatback frame, preventing a child seat from being securely anchored.

As such, these vehicles fail to comply with the requirements of Federal Motor Vehicle Safety Standard number 225, “Child Restraint Anchorage Systems.”

The potential number of units affected is 47,098.

Dealers will inspect and replace the rear seatbacks as necessary, free of charge.

Owner notification letters are expected to be mailed July 30. Nissan’s number for this recall is PC812.

There are no known reports of serious injuries related to the listed recalls.

GM Silverado, Sierra General Motors is recalling certain 2017-2019 Chevrolet Silverado 2500, 3500 and 2017-2019 GMC Sierra 2500 and 3500 vehicles equipped

6

AUGUST, 2021 YOUR SOURCE FOR QUALITY, SELECTION AND VALUE

A broad selection of pre-owned vehicles from an industry leader ADESA Boston August 6, 13, 20, 27 508-626-7000

ADESA Washington DC August 18 703-996-1100

Manheim Orlando August 3, 10, 17, 24, 31 800-822-2886

ADESA Brasher’s August 18 916-991-5555

Columbus Fair AA August 4, 25 614-497-2000

ADESA Charlotte August 12, 26 704-587-7653

ADESA Boston August 27 508-626-7000

Manheim Milwaukee August 18 262-835-4436

Manheim Palm Beach August 4 561-790-1200

Manheim Palm Beach August 4, 5 561-790-1200

ADESA Golden Gate August 10 209-839-8000

Manheim Nashville August 25 615-773-3800

Manheim Pennsylvania August 12, 26 800-822-2886

Manheim Atlanta August 11, 12, 26 404-762-9211

Manheim Pennsylvania August 6, 12, 13, 20, 26, 27 800-822-2886

Manheim Atlanta August 11 404-762-9211

Manheim New Jersey August 18 609-298-3400

ADESA Chicago August 20 847-551-2151

Manheim Dallas August 4, 17, 18 877-860-1651

Manheim Phoenix August 5, 12, 19, 26 623-907-7000

Manheim Dallas August 17 877-860-1651

Manheim Orlando August 17 800-822-2886

ADESA Cincinnati/Dayton August 24 937-746-4000

Manheim Denver August 18 800-822-1177

Manheim Pittsburgh August 18 724-452-5555

ADESA Golden Gate August 10, 24 209-839-8000

Manheim Detroit August 12, 26 734-654-7100

Manheim Riverside August 3, 5, 17, 19, 31 951-689-6000

ADESA Indianapolis August 10, 24 317-838-8000

Manheim Fredericksburg August 5, 19 540-368-3400

Manheim Seattle August 11, 25 206-762-1600

ADESA Kansas City August 10, 24 816-525-1100

Manheim Milwaukee August 4, 18 262-835-4436

Manheim Southern California August 12, 26 909-822-2261

ADESA Lexington August 5 859-263-5163

Manheim Minneapolis August 11 763-425-7653

Manheim Tampa March 12, 19, 26 800-622-7292

ADESA New Jersey August 12, 26 908-725-2200

Manheim Nashville August 3, 18, 25, 31 615-773-3800

Manheim Texas Hobby August 12, 26 713 649-8233

ADESA Salt Lake August 3, 31 801-322-1234

Manheim New Jersey August 4, 18 609-298-3400

Southern AA August 20 860-292-7500

ADESA Tulsa August 13 918-437-9044

Manheim New Orleans August 4 985-643-2061

Manheim Atlanta August 11 404-762-9211

Manheim Riverside August 5, 19 951-689-6000

ADESA Boston August 6 508-626-7000

Manheim Fredericksburg August 19 540-368-3400

Manheim Pittsburgh August 18 724-452-5555

ADESA Salt Lake August 3, 31 801-322-1234

Manheim New Jersey August 4 609-298-3400

Manheim Seattle August 11 206-762-1600

Columbus Fair AA August 25 614-497-2000

Manheim Orlando August 3, 31 800-337-8491

Manheim Southern California August 12, 26 909-822-2261

Manheim Denver August 18 800-822-1177

Manheim Pennsylvania August 13, 27 800-833-2886

Southern AA August 20 860-292-7500

ADESA Golden Gate August 10 209-839-8000

Manheim Milwaukee August 18 262-835-4436

Manheim Atlanta August 11 404-762-9211

Manheim Nashville August 25 615-773-3800

Manheim Dallas August 17 877-860-1651

Manheim Palm Beach August 4 561-790-1200

Manheim Pennsylvania August 12, 26 800-833-2886 Manheim Riverside August 5, 19 951-689-6000

Choose Chase on ADESA.com and OVE.com for quality bank-sourced vehicles.

Contact auctions directly for current sale information.

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.

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”).

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. The tradename “Aston Martin Financial Services” and the Aston Martin logo are owned by Aston Martin Lagonda Limited and are licensed to JPMorgan Chase Bank, N.A. (“Chase”).

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. ©2021 JPMorgan Chase Bank, N.A. Member FDIC (21-008) 8/21

News 7/26/2021

Mileage

– Continued from page 3

he said. “They’re operating on a 30-day-or-less pipeline.”

Reconditioning and repairs are an issue because if AutoZone is out of a part, it likely means every other auto parts store is also out of it.

On the finance side, Brotherton is seeing payment amounts going up and term lengths getting extended on vehicles that already have more than 100,000 miles.

What’s clear is who will face the biggest challenge, he said.

“The person who is going to suffer the most in an inflationary environment like this – and there’s nothing else you can call it – is the end consumer,” Brotherton said. “You’re going to see people priced out of the market.

“Particularly in buy-here, payhere, there’s a limit to what can be passed on to a consumer.

“Buy-here, pay-here doesn’t work with 84-month car notes. I mean, new cars don’t work with 84-month car notes.”

Bonanno said the recent move by the government to give families with children extra monthly payments will be a new factor for buy-here, pay-here dealers.

“Whether it’s additional money, or it’s just getting money earlier that they would have gotten back in their tax refund, may affect tax season,“ he said.

But he said dealers who had to live

Legislation – Already the dealership has a lot of work just to do the paperwork on its own customers, he said.

“You have fiduciary responsibility,” he said.

“For example, we have what’s called a ‘police book’ where we have to log in every single car we own.

“We have to make a copy of the title as it comes in, a copy of the title when it leaves.

“We also have auditors coming around checking us.”

Then there’s the challenge of policing new consumers and trying to make sure they are who they say they are.

But Ophoff added the state is already behind on processing some of his titles that he had at press time.

“I have deals at the state that I

8

and die by tax season decades ago probably prefer their customers get money every month than all at one time.

Bonanno said he thinks we’ve seen the peak in the pricing as it seems the market has begun to soften, but he adds trying to time the auto market is like “day trading.”

His advice to any BHPH dealer – because of inventory challenges – is actually contrary to what he would give when inventory is more plentiful.

“If you’ve got the money and there’s a car for you to buy that you want, I’d rather you have carrying costs and keep your inventory longer than be stuck without cars.”

He said he saw this happen to a lot of dealers and “if you’re out of cars, then you’re out of business, and you still have overhead.”

Bonanno said the inventory shortage won’t be resolved this summer, so it’s still critical to have vehicles to sell.

Brotherton added he knows dealers who are taking smaller profits and margins to make it through what they hope will not be a longterm situation.

Finally, what happens when the extra federal unemployment money runs out?

“There’s going to be a lot of uncertainty,” Brotherton said.

Continued from page 5 dropped off on July 1 and I just got them back July 15,” he said.

Ophoff said this type of service might be more feasible for a franchise store or a larger dealership.

Victory said there can be some benefit for a dealer, even if they are not selling a vehicle to the customer.

For a dealership with a service shop, it might prompt a customer to get an oil change or some basic maintenance done at the same time they are getting a registration renewed.

For the consumer, it might be a two-for-one, Victory said.

The Michigan IADA office said feedback overall has been critical because of the extra work it would put on staff, especially when it’s hard to hire people.

Retail Markets 7/26/2021 Compiled by Ed Fitzgerald

FLORIDA Jason March, owner, March Motors, Jacksonville, Fla. “The dealership has been in business for 23 years, same single location.

“As far as the effects of COVID, overall, we have seen an increase in sales since last March/April 2020 -- compared to the previous history of the dealership.

“Normally our inventory is 150 units, right now we are at 80. We sell an average of 110 vehicles a month.

“We sell 35% trucks, 35% SUVs, 20% cars, 10% vans.

We sell mainly import cars and domestic trucks and SUVs. “Our reconditioning is inhouse. The re-con cost is climbing, $950 average pre2021, $1400 since January 2021.

“We buy vehicles from Manheim and ADESA. We

are also dipping into ACV and Backlot.

“Our average model year is 2008, with average miles of 150,000.

“We were heavy on TV advertising for 15 years.

Right now, we are on Facebook, Adwords and utilizing our location to display our trucks on the front line.

“We get an average down payment of $2,100 with a 36month term.

“We do buy-here, pay-here and use GPS, but no starter interrupts.

“I would advise new dealers to identify your target market and stock the inventory that they purchase.

Don’t try and be everything to everyone. You can limit your headaches by buying and selling the same models over and over. It may seem vanilla but don’t be trendy.

Consistency, customer service, quality inventory and

employee retention are the ingredients to success, regardless of industry.

“The last car we sold was a 2010 Toyota Camry, 139k miles, at $12,800.”

OREGON Gary Brooks, owner, Brooks Motor Co., Milwaukie, Ore. “We’ve been in business 26 years. About 10 years ago we bought the building we’re in, but we’ve been on the same road the whole time.

“We didn’t have to shut down for COVID. It did slow down business a bit, but we stayed open through the whole thing. Our online sales stayed at about where they’ve always been, but it’s the dominant way to find customers.

“We try to keep around 60 vehicles in inventory. Lately we’ve been selling 30-35 a month. Right now, I’ve got

25 on the lot. The Blue Book is going to be dropping again, and dropping dramatically.

“On a typical 30-car month, nine of our sales would be trucks, 15 would be SUVs and then six or seven cars.

“Certainly, on trucks we sell more domestics than imports, but on SUVs it’s probably even.

“We have three auctions in our metro area. There’s a Manheim, an ADESA and an independent called Crosspoint.

“I do very limited buy-here, pay-here. We can get pretty much everyone bought. We have used the CUDL program through credit unions.

They do first-time buyers and it’s amazing the people we get approved.

“Our average down payment is $500 to $1,000 over 48 months. The finance companies only go up to

three years, sometimes they’ll make an exception.

“We spend about $1,100 a car in reconditioning. We have our own mechanics and shop.

“I recommend to new dealers that they work hard and stay focused, because it can get away from you really easy. Be careful with flooring. It seems like they hand out these flooring lines like candy to new dealers.

Some of these dealers live in apartments. It’s easy to get a license in Oregon, you only need a $50,000 bond.

Curbstoning is a problem out here, like everywhere.

Our Department of Motor Vehicles watches it pretty close. They’ll give out giant fines, but then they’ll waive the fines if the person just gets a dealer’s license.

“The last car I sold was a 2011 Ford 150 with 160,000 miles. We sold it for $12,900.”

Powerful Automotive CRM Software Points Your Sales Team to Opportunities That Keeps Them Selling Automate the Sales Process

Organize Your Leads

Hold Your Team Accountable

Earn More Customers

INDEPENDENT AND BHPH DEALERS USE AUTORAPTOR TO AVOID LETTING HOT LEADS SLIP THROUGH THE CRACKS. 1-888-421-6533 sales@autoraptor.com www.autoraptor.com 10

Wholesale Markets 7/26/2021 Compiled by Jeffrey Bellant

NEW MEXICO Ray Vickers, owner, Farmington Auto Auction, Farmington, N.M.: “It’s been really hot and we haven’t had much rain.

“We’ve been in business since 1994. We have two lanes, but we’ve mainly been using one.

“Our volume has been down just a little bit, but our percentages have been up for a while – average around 75%. Our recent sale was around 67%. I wouldn’t complain.

“It’s been good. We’ve been getting a lot of new-car trades. Our inventory has been pretty good. (Running one lane) we’ve been averaging between 85 and 115 a week.

Average prices have been around $5,000 or $6,000 where it might have been $3,500 (pre-COVID).

“Our GSA account has been

12

great. On a GSA sale, which is once a month, we’ve been averaging between 90 and 100 cars.

“The GSA is a mixture of everything. They’ve got halftons all the way to F-450s.

There’s also sedans and SUVs ranging from Explorers and the Equinox.

“Typically, we draw about 50 dealers in the lanes. We’re completely back to normal sales. Our online simulcast is up since a lot of dealers are bidding online.

“I don’t know the numbers, but (online participation) has definitely doubled.

“But I don’t know where new-car inventory is going, with the chip thing. I can’t answer that. The prices have been really high on used inventory, though I see it has tapered off a little bit the last three or four weeks.

“These are usually slow months anyway. We’ve never

had a market like this. We’ve never had anything like this.

We’re definitely in strange waters.

“I look for things to kind of smooth out by the end of the year. But I’m thinking we’re tinkering with disaster with the economy. You can’t dump (trillions) on the street and not expect there to be consequences.”

NEW YORK Jim Terwilliger, sales manager, State Line Auto Auction, Waverly, N.Y.: “We just celebrated our 40th anniversary on June 18.

It was 40 years to the day. It was a good sale. We didn’t’ celebrate our 39th anniversary last year because of COVID-19, but we did this year.

We gave away $20,000 at the end of the June 18 sale in $5,000 increments.

“We had over 1,000 cars on the ground and sold over

65%. That’s off from what would be a typical (pre-COVID) sale, but that’s water under the bridge. We’re in a new world. Before this, we were averaging 1,300 vehicles every week and selling 65%.

“We had almost 900 bidders. Almost 300 were online. We follow CDC guidelines.

“Up until the market started turning at the end of June, we were around 70 percent for the sale. Now we’re at 60%. So, it’s dipped some.

“We’re averaging 800 vehicles every Friday. Our mix is probably 70% dealer and 30% commercial. We’re getting some repos now. There are still a couple of companies that are still not (repossessing).

“I think the market is adjusting now. I can’t believe the amount of $50,000, $60,000, $70,000 – even

$80,000 – trucks that are being sold every week.

“It’s mind-boggling. It’s just insane, the amount of money these trucks are doing.

“Our average price across the block is higher than it used to be. Right now, it’s between $16,000 and $17,000.

That’s dramatically higher.

“Online has been very good. We use Edge Pipeline and Velocicast.

“We also have a GM Financial account.

“We still do a monthly RV and powersports sale. The dealer RV and powersports hasn’t been what it was, although we had a good sale recently, about 35 or 40 RV/ powersports.

“The RVs do strong money.

“In this market, there are so many things that don’t make any sense anymore. I couldn’t predict what’s going to happen this fall.”

Disconnected Jottings From

Tony Moorby 7/26/2021 Tony Moorby Over the years I’ve been fairly confident in dealing with economic issues, assessing market environments and even anticipating a few events but perhaps stopping at predictions. I prefer to leave those to the professionals, who these days are everywhere with assistance from clever software and even artificial intelligence. When I worked in the auto auction business there were none, specific to the business. Our company got that ball rolling by hiring Tom Kontos who rapidly brought clarity and confidence to our interpretations of the various levels of the used car marketplace.

He brought the figures and numbers to form the backbone of the industry’s first Used Car Market Report.

Our editorial commentary and assessments made the publication highly sought

after. Happily various forms continue today.

Today I view the morass of the economic outlook with such trepidation because nearly all the normal inputs have been skewed, especially by the hiatus of the pandemic. Supply and demand have been pushed in all directions.

Food, cleaning supplies and home products were an early indicator of spiked demand creating shortages and price increases. But things reached global proportions and have touched almost every corner of production; food has been stretched with the attendant dropped jaws at the supermarket checkout.

Parts and machinery shortages have slowed or even stopped production of all kinds of stuff for consumers who are eager to get things back to whatever is normal

these days.

Housing demand has sent prices for all wood products through the roof (sorry).

All this at a time when a workforce’s 9-to-5 mentality went out the window long ago. Working from (a new) home is appealing to many commuters so office space is cheap and abundant. Offices may be converted to apartments at this rate.

Government subsidies, needed to stem short-term poverty are now needing to be funded along with infrastructure and healthcare improvements. Taxes will increase at every opportunity and for a very long time.

We’ll feel more like Europeans in the not-too-distant future; lots of social services but high taxes as a norm.

Now the ogre of inflation looms threateningly and the experts are watching closely as pressure on wage

By Myles Mellor

33. Lexus ___ 350

6. Road groove

1. GMC truck

35. __ and behold!

7. Lexus SUV

5. Nissan truck

36. Younger, abbr.

10. “___ a deal!”

37. Gear selection

8. Maker of Amigos and Hombres

13. Dodge 4-door 14. Quattro maker 16. Get it wrong 17. Compact car made by Mitsubishi 19. Pick-up truck relative 20. Sushi fish 21. Include 22. Electric car from Hyundai

39. German auto pioneer 42. Clamp shape 44. First letter in Ferrari

11. Nissan model used in Japanese racing

18. Right away in slang

48. Branch

23. Lexus’ compact executive car

49. Heat unit, abbr.

25. Cry of surrender

51. 90s Cadillac

28. Compact Scion

52. Consumer, 2 words

29. Enclosed vehicle

4

10

15 17

18

27. Green color

2. Lasted

34. Nissan SUV 36. Device that can raise a car 38. Ford’s ___sport

19

20 21

22

23

24

25

26 27

28

29

30

32 36

33 37

41

31

34

35

38

39

42

40

43

45

44

46

47

48

49

51

43. Pre-owned

33. Regret

9

14

41. Vicinity

1. Chevy truck

8

13

31. Give an edge to

26. Lexus sports sedan

7

11

30. Factory Down

6

47. Braking system 48. Mena’s state 50. Football position, for short

50

52

6

(

/

7

,

* (

5

6

1 5

%

) ( '

9

$ 7

$

8

8

(

1

6

6

,

1

(

$ 6

8

9

(

' 2

1

7

, %

7

7 4

$ 8

5

$

+ (

, $

5

<

8 *

3

/

&

(

2

,

1

2

/

7

$

7

/

,

8

1

(

*

1

/ 1

8 ,

,

$

6

5 *

(

9

5

%

,

/

$

7 ,

6

Solution to the 7/5/2021 puzzle

& $

,

0 5

8

(

& 2 %

5

7

(

.

$

2

(

'

&

9

$

$

$

+ 2

6

$

$ 0

(

(

)

7

(

(

&

$ *

-

7

9

2

$

8

2

$

5 2 * 6

$

9 3

,

& 5

:

7

8

7

,

1

Solution to this puzzle in the 8/16/2021 issue. Call 1.800.794.0760 for a FREE subscription.

14

ores and so on. And all the while this political upheaval makes things even harder to figure out. Even my political leanings have been stretched this way and that.

My crystal ball currently looks more like a snow globe. It’ll take a while to get settled.

5

40. BMW sports car, 2 words

24. Mini ____man

4. ___ loss for words, 2 words

3

16

46. They make an X,Y and 3

32. Question and answer, for short

2

9. Poured down

15. Mariner or Milan division

3. Honda truck

1

12

45. Trunk contents

30. Cayenne maker

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

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

Across

12. Energy efficient light, abbr.

• 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

raises bulges massively.

At the lower end of the wage scale, the incentive to get back to work is at its nadir, as people prefer the sofa to stacking shelves or flipping burgers. That will end soon and wages, even at the low end, are likely to increase. More pressure on prices to go up and fuel the fire of inflation.

If interest rates rise to stem the upward spiral, housing demand will probably come down; with the accompanying price decreases after folks have been paying out the wazoo. What happens to equity then?

Uncertainty threatens international markets that are already trying to assess the growing economic powers of places like China who are now investing heavily in countries which have huge mineral wealth but need money to extricate the

1

<

6

8 2

1

DAA NORTHWEST

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

FEATURING

FEATURING

@mcconkeyauctiongroup

magauctions.com/rockandroll