Used Car News 11/29/2021

Page 1

UCN

Used Car News

11/29/2021

Next Generation Mechanics Seek Work By Jeffrey Bellant

Buy with Total Confidence.

IN THIS ISSUE:

Rush - Dated Material

• INFLATION • RELIABILITY • RETAIL MARKETS

People like Jason Hoover and Jim Palmer are preparing the next generation of auto mechanics for an industry desperately in need of them. Jason Hoover is a Career and Technical Education (CTE) instructor at Utica Community Schools in southeast Michigan. Jim Palmer is lead instructor and program coordinator for automotive technology at Highland Community College in Freeport, Ill. Hoover’s district has three auto shop programs, each with 150 students annually. While in high school, Hoover’s students start out at oil change places, parts stores or as porters. “But the college grads, they’re starting off in full-time work as certified mechanics,” Hoover said. Hoover, a former mechanic, said some parents discourage their kids from getting into auto mechanics and instead go into engineering, for example. “But they can send that job anywhere,” he said. Several of his students have gone on to University of Northwestern Ohio, a small, private trade school in Lima, Ohio. “I’ve never had a student who went through a trade school like UNOH and not get hired, and hired pretty well,” Hoover said. “I had a student who graduated in 2015, I think. He spent two years at college, so he’s been out about three years on the job and he’s making more than I do.” While Hoover sees strong attendance in his high school classes, Palmer said enrollment is low at his college’s auto tech program. Palmer agrees with Hoover that no one is pushing kids into this trade. But he added the auto tech industry also needs sharp engineer-

ing minds. One challenge for new hires is that they sometimes start out making a more modest wage, while their friends working in fast food are starting out at $15 an hour, Hoover said. Palmer agrees that new techs start out with simple tasks before going to flat rate work. However, the right worker can make a career of it. Even with all the education and technical know-how, something else is needed. “I’ve got one former student who’s at a Chrysler dealer, and he was one of my stellar students,” Palmer said. “They started him out with oil changes, but now they’re throwing him jobs because his work ethic is stellar, and he doesn’t say no. “He gets to work on time and he doesn’t have his frickin’ face in his phone.” Palmer added he won’t lie to dealers just to get a student hired. At least 50% of his graduates end

up in the industry for a long time. Palmer keeps up with the industry because he’s still in it. “When I’m not teaching, I actually own half of a shop, so I definitely keep my hands dirty,” he said. He urges dealers to understand that keeping a good employee is a two-way street. No. 1, pay is important. “I’m not saying start him out at $25 an hour, but give them a wage that’s attractive,” Palmer said. “If you pay them fairly and they work for you, for God‘s sake, give them a raise after 30 days.” No. 2, dealers need to acknowledge their mechanics and encourage them. Let them know they are part of a team. “No. 3, be a mentor,” Palmer said. “You’ve got to help that younger guy.” He wants veterans to remember their first day on the job and help the next generation out. “I’m not saying give them a trophy Continud on page 6

WE HAVE 4 MILLION OF OUR CUSTOMERS WANTING TO BUY YOUR SPECIALTY INVENTORY 2ND MONTH FREE. PROMO CODE UCN12

$299 Package rates for unlimited listings AND 7-day online auction platform.



Economics 11/29/2021

Industry Strategizes as Inflation Drives Prices Up By Jeffrey Bellant

As auto dealers deal with continued inventory shortages, the general issue of inflation threatens to add more challenges to their bottom lines. There are things dealers can do to fight through these challenges, but the obstacles are real. Economists have differing views about what this means for the industry. “Inflation in the U.S. economy is complicated,” said Charlie Chesbrough, senior economist for Cox Automotive. “Part of the increase in prices is due to supply shortages which should improve over the next year. This is the transitory part of inflation that the Fed assumes will dissipate. “However, there is also rising labor costs and commodity prices – and these may not be transitory. For the U.S. auto market, inflation is unlikely to curtail vehicle demand much.” Tom Kontos, chief economist for KAR Global, said the infrastructure bill recently signed into law could have an effect. “To the extent this bill is funded more out of general funds, there is a potential inflationary impact from a trillion-dollar injection into the economy and government borrowing from deficit spending that should be weighed against the potential benefits of the expenditures. “These considerations will need to be compounded if Congress (at press time) strives to pass a multitrillion-dollar reconciliation bill.” Business consultant and journalist Gene Marks, president of the Marks Group, said inflation is a valid issue. “Obviously, it’s a problem and it’s going to be a problem for the foreseeable future. We’re telling our clients to prepare for continued rising prices over the next six to 12 months. “I look at the Producer Price Index (PPI), which is 8.6% as reported by the government (at press time).” PPI, according to the Bureau of Labor Statistics, measures the average change over time in the selling prices received by domestic producers for their output. The prices included in the PPI are from the first commercial transaction for many products and some services. “The actual core materials that go into the manufacture of cars,” he said, “iron, steel, plastics, resins, chemicals, leather, things like that, those price increases are well in ex-

cess of 8.6%. “That’s really going to start filtering down to the dealers themselves, and ultimately, the consumers. “They’re going to have to brace for that.” Marks said, while it’s unavoidable, his general business clients are doing certain things to prepare. “Obviously, they’re passing price increases where they can,” he said. “They’re certainly communicating with their customers, as best as they can. And they’re buying, as much as they can buy, wherever they can get inventory. “They’re also buying core and alternative products and mainly because you’re in an inflationary environment which is a buy-low, sell high type of thing.” Marks’ recommendation for dealers and others in the industry is to check out the Economic Injury Disaster Loan program. “It’s set to expire at the end of December and everybody in our industry is eligible for it,” Marks said. He added the government recently tweaked the rules so that small businesses can use the loans to pay off existing debt. “The EIDL loans are 30-year fixed maturity, at a fixed rate of 3.75%,” Marks said. “You get them directly through the Small Business Association. “A 3.75 fixed rate is going to look pretty attractive sooner rather than later.” He said independent dealers can get the loan without having to prove they’ve been affected by COVID-19. “They just need to be in a disaster area that’s been affected by COVID and the whole country’s been a disaster area affected by COVID,” Marks said. Using that loan to pay off existing debt is “huge,” allowing dealers to free up capital to buy inventory, if needed. “The other thing people are doing – if you’re talking about allocating funds and resources – the SBA has other good loan programs, like the 7a loan, to buy property,” Marks said. There’s another option for dealers to trim overhead and boost efficiency. “Everybody’s also investing in technology,” Marks said. “There’s a lot of really good tech out there that can reduce your cost of overhead. “Obviously, CRM systems – a lot of dealers have those available to them (are an option). HR platforms will reduce costs significantly because

Photo Courtesy of The Marks Group Full Marks: Gene Marks, president of The Marks Group, said inflation is a real economic challenge in the current economy, However, he added there are moves that businesses can make to protect themselves and succeed in this market.

they push a lot of the work down to employees. “Certain FinTech platforms, like Bill.com, can automate a dealer’s invoices, removing the need for admin and accounts payable people to be involved. That cuts overhead.” Texas buy-here, pay-here dealer Keith Hagler, owner of Taylor Auto Credit, said he’s concerned about inflation, as well. Hagler, who’s been in business for more than three decades, has been consolidating for several years. At its height, his dealership boasted five lots and, up until a few years ago, he had two. Today, Hagler has one location. “Everybody asked me if I’m retiring, I said, ‘No, I’m just retiring debt,’” Hagler said. He might have the right idea as inflation fears are the topic of the day. Despite having only one location, Hagler is turning inventory quickly. “I’m keeping about 40 cars on my lot,” he said. “We’re selling about 40 to 50 per month.” When asked if he has as many cars

as he wants, he jokes, “I have about as many as I can afford.” Hagler said operating buy-here, pay-here in this economy is no different than anything else. “You just have to be cautious and watch what kind of cars you’re buying,” he said. But the rising car prices put a particular strain on a buy-here, payhere business. Hagler’s average price is about $14,900. “The problem we’re running into is the payments we’re having to put out now,” said. “A lot of people have extended their payment terms. Hagler said in the past his dealership would never go over $350 payments; it was something they were firm about. But he also never would go past 30 months on a payment plan. Now he’s at 42 months, with payments going as high as $400 to $450. But with the prices of cars, it’s just a matter of simple math, he said. “You have to,” Hagler said. “There’s no way of getting around it. But we Continued on page 6

3


People in the News 11/29/2021

Bailey Takes ServNet Gavel Following a planned transition in leadership for the ServNet auction group, Chad Bailey, owner of Akron and Value Auto Auctions, will serve as the group’s president for the next two years. His move was confirmed by the ServNet auction owners at their business meeting in October. “I am honored to serve as ServNet’s

auction owners as we plan for the years ahead.” Bailey is third-generation owneroperator of Akron Auto Auction, preceded by his Uncle Jeff and his grandfather Don, who was one of the original partners in 1973 when the Akron Auto Auction was established. After college, Bailey became the

Earlier this year a second auction location was added to the enterprise: Value Auto Auction. Bailey has been actively serving in NAAA executive leadership for over a decade. He was 2018 NAAA President. At June’s CAR conference in Las Vegas, he was named 2021 Remarketer of the Year.

Volume 27 | No.12 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

Chad Bailey president,” Bailey said. “ServNet is an important part of the independent auction community and the industry as a whole, and it is my pleasure to represent the ServNet

4

Penny Wanna

Tammy Swofford

NAAA Honors Wanna, Swofford auction’s general manager, then a The National Auto Auction Assominority partner, and acquired maciation (NAAA) has named Penny jority ownership of the company in Wanna and Tammy Swofford as 2011. Warren Young Fellows for 2021. Both were honored for their significant contributions to the auto auction industry. Wanna was also cited for her vision in helping to educate the next generation of industry leaders. Wanna is president of Auction Academy, a top-level continuing education program for auto auction industry professionals and is vice president of business administration at TPC Management Company. Her responsibilities at the company range from accounting and project management to conference and event planning for its many clients and associated companies. Those include ServNet Auctions, Auction Academy, and Interstate Automotive Services. Swofford is national sales director for America’s Auto Auction. She has 25 years of experience as a sales and automotive remarketing executive, and she has worked in the auto auction industry since 2005. She is recognized for her expertise in sales training, managing new account development, and cultivating successful sales and marketing strategies. Swofford has a proven track record in expanding market potential and has handled both in-lane and online sales and managing fleet, lease, and dealer business. For the past eight years, Swofford has used her musical talents to perform the national anthems for the United States and Canada at the opening ceremonies of the NAAA annual conventions.

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


Reliability 11/29/2021

Lexus, Mazda Top Reliability Ratings By Jeffrey Bellant

Lexus, Mazda and the Kia Niro EV were some of the big winners in the Consumer Reports Annual Auto Reliability data released during a Zoom webinar before the Automotive Press Association. Jake Fisher, senior director of auto testing at Consumer Reports, presented the results which named Lexus, Mazda, and Toyota, as the top three brands, respectively. This survey is on the predicted reliability of the 2022 models, he said, which looks at data of the last model years of a vehicle, as long as that model is the same generation. Lexus was not only the top brand, but it also had the top overall model, with the Lexus GX. Even though it is a luxury vehicle with a lot of options, it was still ranked as most reliable. One major factor is what it has in common with other reliable vehi-

cles. “The Lexus GX really hasn’t had a major redesign since 2010,” Fisher said at the Nov. 18 event. “This is what happens when you have 10 years or more of a generation of vehicle from a reliable automaker. You have very trouble-free products.” However, it’s not a requirement to have a long model history. “The Kia Niro EV was No. 2,” Fisher said. “You’d expect electric vehicles to have less problems because there’s less things to go wrong. They’re very simple problems in terms of powertrain.” The next three reliable models were the Toyota Prius, the Prius Prime and the Cadillac XT5 SUV. The XT5 is also the longest model in the Cadillac lineup. “On the other side of the spectrum are the least reliable vehicles in terms of prediction,” Fisher said. “The Mercedes GLE, followed by the Ford Explorer, Ford Mustang,

the Chevrolet Silverado, the GMC Sierra and the Corvette.” Some of the common denominators are brands that don’t have a good reliability history; a lot of complexity and, often, a lot of changes recently in the model, Fisher said. The presentation spent a lot of time discussing electric vehicles as there are now many more of those on the road. “A lot of people do care about the environment and there’s a lot to like about (EVs),” Fisher said. “But reliability is something that’s been a little confusing.” CR now has enough of a sample Continued on page 8

BEST Dealer Management Software in the Subprime Industry! RETAIL | BUY HERE PAY HERE

FINANCE | RFC

Handle every aspect of retail, cash, wholesale, and BHPH deals. All the accounting is handled in real-time, virtually eliminating double-entry.

Deal Pack seamlessly handles the purchase of loans from related dealerships. Differed revenue is tracked in real time to capitalize on the full benefits of an RFC.

LEASE HERE PAY HERE

CONSUMER LOANS

Deal Pack handles every aspect of LHPH operations. It supports accounting for both operating and capital leases and automatically calculates your monthly depreciation.

Deal Pack effortlessly handles every aspect of a consumer loan operation with real-time accounting and countless reporting capabilities of an RFC.

SERVICE & PARTS

FLOOR PLANNING

Deal Pack offers a complete service and parts module fully integrated to adjust sales inventory, cost, parts sales, and receiveables in real time.

Handle direct auction floor planning at the time of purchase, after purchase, and external floor planning.

dealpack.com abcoa.com

800-526-5832 5


News 11/29/2021

Inflation – Continued from page 3 won’t go out past 42 months. We’re just not going past that.” The good news is he’s been able to get better down payments. “I’m getting bigger down payments than I ever did,” Hagler said. “If you did an average, I’m probably getting $1,500 to $2,000.” It’s not just car prices, it’s reconditioning costs and the price and availability of parts. “I’ve been researching online all the time trying to find parts,” Hagler said. “It’s just a struggle.” A couple of bright spots are that repos have been down and any repos he gets are bringing top money at auction. Hagler said one big worry he has is what happens if car prices fall abruptly. He’ll have cars that he paid sky high prices for but won’t be able to recoup. It may be more of a challenge for Hagler, who turns so many cars per month, he must keep a lot of inventory. Hagler said it’s a struggle, because “you can’t sell off an empty lot.” The fear is like what happened in the Great Recession, when everyone dumped their trucks and SUVs at once because of fast rising gas prices. This happened so suddenly that dealers were stuck with lots full of large sport utilities that were way overpriced for the new market. Ironically, almost as quickly as dealers cleared out their inventory of gas guzzlers, the market shifted and consumers wanted the big SUVs.

Mechanics

Amid the current market, Hagler points out that “little ol’ Taylor” looks like the frontrunner to get a $17 billion investment in the form of a Samsung semiconductor plant, which could change the landscape and economics of that area in Michigan. “I wish I had a crystal ball,” Hagler said. He feels lucky that he has already been focused on reducing debt over the past three or four years. “Thank heaven I only have one car lot to stock,” he said. “I don’t how these guys with five, six or seven lots are doing it.” The other issue is many dealers have covenants with large banks that have certain requirements, especually in regard to debt ratio. Hagler hasn’t eliminated his debt, but that’s his goal going forward. In turbulent times, finding the right strategy can seem like a crap shoot. But it’s not the first time dealers has navigated these obstacles. Hagler said he’s been through a lot of industry challenges. “I’ve been through ‘Cash for Clunkers’ and I thought that was the end of the world,” he said. “We went through the time Mitsubishi was offering zero down, no payments for a year. Everybody around here was driving Mitsubishis. We had to deal with that. “But I’ve never seen this, so I don’t know how it’s all going to play out.”

– Continued from page 1

for participation, but this dude or lady is going to make you money,” Palmer said. “You both can win here.” Gordon Tormohlen, president of Tormohlen’s Good People Automotive in Freeport, Ill., has hired some of Palmer’s past students. “Highland has a great auto tech program,” he said. A couple of Hoover’s seniors are looking toward college. Tyler Walker said his whole family is into cars. “An ’89 Crown Victoria is my daily driver,” he said. Walker was already accepted into

UNOH’s performance division. Matthew Samona hasn’t picked a college, but he knows dealerships. “I actually used to sell cars, help my dad in his dealership,” he said. Samona’s father owned Aces Auto Sales near the high school before recently selling it after getting a big offer. “I loved going to the auctions and seeing the right car, buying it and seeing how it all comes together,” Samona said. “It’s my favorite part.” He liked it more than selling cars. “I hated selling cars,” Samona said. “You get people in; they want a car, but you can’t get them in the car. There’s always a problem.”



Used Car News 11/29/2021

Reliability – Continued from page 5 size of 11 models to predicated reliability, he said. CR has data on nearly 7,000 individual EV models to base reliability on. On the EV side, Kia Niro won top honors, while the Tesla Model S finished last in the EV rankings. “It’s important to say that the problems with the Tesla Model S are not EV related. They are related to other systems in the vehicle and other complexities,” he said. The other issue with this Tesla model is that there are a lot of changes and tweaks being made to it frequently. “(Tesla) continues to change what is under that sheet medal,” Fisher said. EV SUVs, as a vehicle category, are at “the absolute bottom” of reliability, he said. “But when you dig underneath it, the reason is these tend to be expensive, high-end vehicles that are load-

8

ed with technology,” Fisher said. Early adopters tend to want EVs, so manufacturers make efforts to add more automated features or a new way to operate a door handle or some other new tech. As a result, these are where the problems are and not necessarily in the electric powertrain, according to CR. “The Ford Mustang Mach E is the only one that’s above average in reliability,” Fisher said. “That’s actually an impressive feat from Ford. Now, keep in mind we don’t have a long history with Ford Mustang Mach E. “But it seems the launch has gone very well, and this is something that Ford has really struggled with.” On the other end of the car spectrum are compact plug-ins and hybrids, which are the most reliable category. “I raise this because it shows you can have this electrification of ve-

hicles and still have them extremely reliable, even with the powertrains of both the electric vehicles and the gasoline-powered vehicles. So, they’ve combined all these things and still made them trustworthy. “Why? Because these vehicles tend to not have a lot of brand-new features that they’re trying out on these vehicles.” Fisher said even though the Prius and the Prius Prime have a lot of complexity in them, they are the last vehicles that implemented Apple CarPlay. Also, they’ve stuck with some of the technology in these segments for a long time. “The Toyota Synergy Drive Hybrid System is really about 20 years old at this point,” Fisher said. “So, it shows you can still have these complexities and be reliable at the same time.” Fisher said the story of the electric vehicle will depend on whether it’s

an electric car that does what a consumer wants or it’s a tour de force of high-end technology. Reliability is even more critical than ever this year with core part shortages. With the cost of new vehicles, people are keeping their cars longer. “If something goes wrong with your car, you could be waiting a long time to get a replacement part,” Fisher said. The one-speed transmission of EVs does away with a lot of complexity. Fisher pointed out there have been problems with new types of transmission technologies, whether it’s CVT, 8-speed, 9-speed or dualclutch transmissions. “Mazda is kind of an outlier in terms of the transmission race for more speeds and more technology,” Fisher said. “They only have 6-speed transmissions.”


DECEMBER, 2021 YOUR SOURCE FOR QUALITY, SELECTION AND VALUE

A broad selection of pre-owned vehicles from an industry leader ADESA Boston December 3, 10, 17 508-626-7000

ADESA Washington DC December 8 703-996-1100

Manheim Orlando December 7, 14, 21 800-822-2886

ADESA Brasher’s December 8 916-991-5555

Columbus Fair AA December 15, 22 614-497-2000

ADESA Charlotte December 2, 16 704-587-7653

ADESA Boston December 17 508-626-7000

Manheim Milwaukee December 8 262-835-4436

Manheim Palm Beach December 15 561-790-1200

Manheim Palm Beach December 15, 16 561-790-1200

ADESA Golden Gate December 14 209-839-8000

Manheim Nashville December 21 615-773-3800

Manheim Pennsylvania December 2, 16 800-822-2886

Manheim Atlanta December 1, 2, 16 404-762-9211

Manheim Pennsylvania December 2, 3, 10, 16, 17 800-822-2886

Manheim Atlanta December 1 404-762-9211

Manheim New Jersey December 8 609-298-3400

ADESA Chicago December 10 847-551-2151

Manheim Dallas December 7, 8 877-860-1651

Manheim Phoenix December 2, 9, 16, 23 623-907-7000

Manheim Dallas December 7 877-860-1651

Manheim Orlando December 7 800-822-2886

ADESA Cincinnati/Dayton December 14 937-746-4000

Manheim Denver December 8 800-822-1177

Manheim Pittsburgh December 8 724-452-5555

ADESA Golden Gate December 14 209-839-8000

Manheim Detroit December 2, 16 734-654-7100

Manheim Riverside December 7, 9, 21, 23 951-689-6000

ADESA Indianapolis December 14 317-838-8000

Manheim Fredericksburg December 9, 23 540-368-3400

Manheim Seattle December 1, 15 206-762-1600

ADESA Kansas City December 14 816-525-1100

Manheim Milwaukee December 8, 22 262-835-4436

Manheim Southern California December 2, 16 909-822-2261

ADESA Lexington December 16 859-263-5163

Manheim Minneapolis December 1 763-425-7653

Manheim Tampa March 2, 9, 16 800-622-7292

ADESA New Jersey December 2, 16 908-725-2200

Manheim Nashville December 21, 22 615-773-3800

Manheim Texas Hobby December 2, 16 713 649-8233

ADESA Salt Lake December 21 801-322-1234

Manheim New Jersey December 8, 22 609-298-3400

Southern AA December 8 860-292-7500

ADESA Tulsa December 10 918-437-9044

Manheim New Orleans December 15 985-643-2061

Manheim Atlanta December 1 404-762-9211

Manheim Riverside December 9, 23 951-689-6000

ADESA Boston December 10 508-626-7000

Manheim Fredericksburg December 9 540-368-3400

Manheim Pittsburgh December 8 724-452-5555

ADESA Salt Lake December 21 801-322-1234

Manheim New Jersey December 22 609-298-3400

Manheim Seattle December 1 206-762-1600

Columbus Fair AA December 15 614-497-2000

Manheim Orlando December 21 800-337-8491

Manheim Southern California December 2, 16 909-822-2261

Manheim Denver December 8 800-822-1177

Manheim Pennsylvania December 3, 17 800-833-2886

Southern AA December 8 860-292-7500

ADESA Golden Gate December 14 209-839-8000

Manheim Milwaukee December 8 262-835-4436

Manheim Atlanta December 1 404-762-9211

Manheim Nashville December 21 615-773-3800

Manheim Dallas December 7 877-860-1651

Manheim Palm Beach December 15 561-790-1200

Manheim Pennsylvania December 2, 16 800-833-2886 Manheim Riverside December 9, 23 951-689-6000

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 (21-0012) 12/21


Retail Markets 11/29/2021 Compiled by Ed Fitzgerald

CALIFORNIA Beto Beas, owner, Beas Auto Sales, Stockton, Calif. “I’m a second-generation car guy. My father started the business in 1991. We changed locations, right across the street, in 2010 when I took over. “Because of COVID we started home delivery. Now we do 70-80 percent home deliveries. We also changed our business model. We used to sell a lot of trucks and SUVs and now we only sell hybrid, electric and plug-in hybrid units. “The average size of our inventory is 45-55 cars. We sell about 25-35 a month. “My father was old-school and taught me to go to auctions: look at the cars, smell the cars, touch the cars. Now, the cars I buy online have a green light, which means they have a warranty.

10

“The average down payment, in my case, is probably $5,000-$7,000. “I spend $500-$700 in reconditioning per unit. We do all of it in-house. “Everything in our inventory has to be 2015 or newer, with less than 100,000 miles, with an average of 40,00060,000 miles. “We do a lot of Facebook Marketplace. We try to do a lot of educational videos. When you’re in a market like the one I’m in the customer is very likely to know more about the vehicle than the sales guy. We don’t want that to ever happen. We have to learn everything about what we’re selling. “(This business is) not for everybody. It’s long hours. You’re going to miss a lot of soccer games. I have daughters and I try to bring them to the dealership. For example, this Sunday my daugh-

ter was with me all day. We moved cars around. I try to teach her how to drive. Otherwise, I’d never see them. “Dealers need to be prepared. Know your laws, know what you represent, become part of the association. Be involved in your community. “The last car we sold was a 2019 Toyota Prius Prime with 53,000 miles and it sold for $24,000.”

ILLINOIS Joe Mok, president, GMotor Cars, Arlington Heights, Ill. “I’ve been in business for 12 years. “We never shut down for COVID, but we are doing 90-95 percent of our work online. “Right now, our inventory is hovering around the 60 range. We’ve sold 707 vehicles this year (through

Nov. 12) so we’re averaging 69 a month. For many years we stocked 120 cars and sold 70-80. “We sell a lot of trucks. We’re really not concentrating on passenger cars. That’s probably only 10 percent of my focus for purchasing. Just like GM and Ford, they cut ‘em out, so we cut ‘em out. . “We probably sell 80 percent domestics, 20 percent imports. We’re not a big import store. I’m more a Ford and GM kind of guy. “There was a time that people would come in with a $500 down payment or no money down. But this year the down payments and cash deals have been crazy. Our average down payment is in the $2,000-$3,000 range. The stimulus money had something to do with that, directly or indirectly. “As far as reconditioning,

there’s only so much you can handle in-house. We’ve spent $717,000 this year so that’s in the range of $1,200 per unit. There was a time you could buy a car and throw some tires, battery and wipers on it, give it a detail, and move it on. “We’re looking for 2012 and newer vehicles. Our sweet spot is the 60,00070,000-mile range. “I sold a car to a customer a year and a half ago for $25,000. He was done with the car, he put 12,000 miles on it. He brought it in here and we sent it to the auction and it brought $37,400. Anyone new to this business should keep their head on a swivel. “The last car I sold was a 2013 Silverado to a fleet customer. We picked it up for $20,220 and sold it for $25,000, plus $8,500 for a snowplow.”


A Finance Partner Uniquely Positioned to Help You

GROW YOUR BUSINESS. As a division of the national lender American Credit Acceptance, Spartan Financial Partners is uniquely positioned to custom tailor a simple and straightforward solution to meet your specific dealership needs. Explore how our flexibility, auto finance expertise, and industry experts can prepare your business for future growth with a Bulk Purchase or Line of Credit Program.

855.233.3605 SpartanDealerPartners.com


Wholesale Markets 11/29/2021 Compiled by Jeffrey Bellant

LOUISIANA Matt Pedersen, owner, Lakes Charles Auto Auction, Lake Charles, La. “No hurricanes here this year, so that’s good. “We celebrated our 30th anniversary in October. In that sale we ran 376 and we sold 318. Our average car price was $21,427. “For the year, we’re averaging $16,055 in the lanes. (Pre-COVID) we were probably $10,000 to $12,000. “Once we got to a $10,000 to $12,000 average, I started advertising as ‘Louisiana’s Frontline Leader.’ So, any kind of advertising that I put online, I end it with ‘Louisiana’s Frontline Leader.’ “We have six lanes now. We had four lanes and then in the spring we built two double-blocks. “Our volume is between 250 and 300 per week. On Nov. 10, we sold 85%.

12

“In the summer, we saw prices get really high, consignment get low and percentage-sold get really high. Then it tapered off a little and now it’s coming back up, where consignment is dipping a bit and percentages are going back up. “We’re pulling in 300+ bidders per week in-lane and online. But just in the lanes, probably 200. We used to average 75 a week online and now we’re getting 100 to 125 a week. “There’s a lot of confusion for dealers. The market is up, it’s down. “We picked up a GSA sale and got a five-year contract. We’re running those about every six weeks. “We have our last GSA sale for the year on Dec. 1. Then we’re back up in February. We’ll average about 60 units. We’ll have cars and trucks. “Going into this year over-

all, I didn’t know what to for the year, in the high 60s. expect. But it’s actually been “This inventory thing is my best year in 30 years.” not going to go away anytime soon. New cars are still just barely trickling in, deNEW YORK Jim Terwilliger, sales pending on the dealer. Some manager, State Line Auto dealers may have a bigger allocation, but it’s still just a Auction, Waverly, N.Y. “We are in our 41st year. trickle overall. “Overall, our average price We have eight lanes and in the lanes is over $18,000. we’re running seven to eight “Some dealers are taking every week. “We’re averaging 700 to cars off their lot and, instead 800 every Friday sale. (Pre- of retailing them, they’re pandemic) it was 1,200-plus. selling here – it’s just a crazy “But we’ve been running market. “Frequently someone will cars live across the block say, I had that car on my lot since June 2020, so that’s for $21,999 and sold it at helped us. Dealers really like auction for $22,001. They’re to have the cars live on the block. I had a dealer say how coming from everywhere. “We’re hustling for busigreat it was to (have a norness. It’s just blocking and mal) live sale with people in tackling. I’ve got seven sales the lanes. “We have, probably, 300 to guys out there knocking on 400 bidders in the physical doors. It starts there. Cars lanes every week. It’s around don’t just magically appear here. the same online. “We also run GM factory “Our percentages are up

cars in our regular sale. GM’s inventory is down. We used to run every Friday, now we’ll run those every other Friday. It will (vary) from 50 to 75. “We use Edge Pipeline for online sales and Velocicast. “We do a monthly RV and powersports sale. But the RV market really changed with the pandemic. “RV dealers are selling everything. They can’t keep stuff in inventory. “But we’re still running 20 to 30 (units) once a month. We’ll get repos from banks. “The powersports we sell are four-wheelers, side-bysides, motorcycles. “Because of the chip shortage, the dealership lots are empty but the airport parking lots are full of cars (waiting for chips). “But I quit predicting what’s going to happen about a year ago.”


2021 Data Source Book

Arriving in your in-box this Winter! Visit usedcarnews.com or call

586-541-0075 to register for your copy!


Disconnected Jottings From

Tony Moorby 11/29/2021 Tony Moorby Last year I made it almost all the way through winter wearing shorts. I think I resorted to donning jeans only twice and long pants when something a little more formal dictated so. I couldn’t tell you the last time I wore a suit. We’re only a couple of weeks into fall and I’ve already succumbed to sporting jeans three times. Advancing age and blood thinners make sure I feel every degree of chillier weather. Dithering around in the garden, for the most part, is now sub-contracted to a nice young man and his sister who seem to know what they’re doing. I’ll wait till spring to reassert my authority over next year’s scheme and design. My brother used to love coming over in the fall, to clear blue skies over settled

weather and wispy clouds in the evening looking like a dove’s breast, as the sun’s dying rays light them from beneath – a Tiffany lamp for all to share. Colors of fall this year have been outrageously gaudy – Mother Nature flirting like a floozy before creating the nuisance of discarding the now-drab leaves and hiding away under hoar frosts for winter. Crickets have now joined the silence of the birds – I miss their trill – so long as they’re not in the garage! A murder of crows visited a copse of pine trees near the house. Squabbling, squawking, raucously arguing and viciously pecking – there must have been 50 of them pushing and shoving for about half an hour. Then just as quickly, they were gone – no rhyme or reason. Bikers of the bird

world. I like the fall as the humidity dips and early mornings have that crunchy crispness that you can almost feel. I dislike it being the herald of what’s to come – I’m getting to despise winter. There’s virtually nothing I like about it except the muted, quiet colors and shapes of trees. My grandson used to like seeing bare trees better than those in full leaf because ‘he could see the shape of their skeletons’ (a smiling emoji should be inserted here). It’s an expression he made at the age of about seven and I’ve never forgotten it. Deer are growing crazy in the rut, running here, there and everywhere, creating hazards for themselves and everyone else. The roads around here provide a Thanksgiving feast for the Turkey Vul-

By Myles Mellor

34. Gas saving mode

6. Pathfinder maker

1.Ferrari model

36. McLaren F1 or Lamborghini Miura for example- 2 words

7. Crosstrek and Impreza

9. Stelvio maker, 2 words 11. Hypercar from McLaren

39. Room for cargo and passengers 41. ___ roll, 2 words

12. Supermini VW

42. Corvette color in a 13. Hyundai pickup truck, song 2 words 43. Silver symbol 17. Included 44. Chevrolet Corvette 18. Former maker of the _____ Marlin and the Javelin 45. Desirable in energy 19. Norway’s capital 20. Expression of understanding 23. Really long limo that can seat up to 14 people 24. Live up to promises 26. Newport’s state, abbr. 27. Electric car company 29. Cutlass maker

Down

1

2

3

4

9

10. Important time 13. Reduce prices dramatically

5

5. Small GM car

12

13

8

14

17

18

19 20

15. BMW sports car, 2 words

23

16. Seven will fit comfortably into a Honda Plot

27

21. In this place

36

22 25

26 28

29

30

31

32

34 37

33

35

38

39

43

44

33. Mint or Sublime Lime (as a car color) 35. Raw metal in a mine

45

. (

,

%

:

30. Month when cars are given wrapped in big bows , abbr.

surement

,

&

8

5

6 / +

1

$

;

2

$ *

8

+

=

0

(

$ 0

(

9

%

8 0

5

(

2

5 2

1

.

$ 3

3

(

< $

$

5

,

)

6

6

(

/

&

6

3

2 5

(

6

(

6

'

2

6

(

$

5

5

/

(

8 0 8

<

2

5

,

6

6 7

$ 7

1

1 2 (

(

$

$ *

$

7 $

3

1

1

5

(

7

5

,

5

9

5 2

8

7

8

7

7

(

1

+ $ < $

$ 0

(

%

%

3

8

'

9

, 9

/

7

.

5

)

2 5

'

7 $

2

2

5 2

/

$

(

2

-

8

5

(

(

=

1

*

6

37. Truck weight mea-

40. Chum

2

8

38. Auto

40

42

viation

31. Hair-raising

21

24

41

22. Gets the tires positioned right (service activity)

15

16

Solution to this puzzle in the 12/2/2021 issue. Call 1.800.794.0760 for a FREE subscription.

14

7

11

32. Holiday drink

6

10

14. Type of battery

25. Aston Martin in “No 2. Toyota’s FJ Cruiser, for Time to Die” example, 2 words 28. Classified ad abbre-

4. Electrical resistance unit

terity of the distillers in being able to interpret so many nuances from basically the same ingredients. I will admit to a fondness for a nine o’clock nightcap; Buffalo Trace being the current favorite. It may provide antifreeze for the coming months.

8. Engineers’ org.

1. ____ 124 Spider

3. Cooling system, 2 words

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

5. Hyundai sedan

• 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

tures. They’ve grown so used to the abundance that they roost atop the street lights on busy divided highways with either disdain or disinterest – it’s all in the way they shrug their shoulders. Wild turkeys strut down our street strolling from the golf course making that ludicrous giggling, gobbling sound that doesn’t suit them at all. At night they roost on branches too high for the hungry coyotes that then go on a haunting, howling rampage, getting especially aroused by the sirens of police cars, which sound amazingly similar. When my brother was here we’d hit the Bourbon Trail, enjoying Kentucky’s gifts of scenery and generous hospitality. I’m not a heavy drinker but am amazed at the dex-

Solution to the 11/8/2021 puzzle

$ . (

(

1 5

6



WE HAVE 4 MILLION OF OUR CUSTOMERS WANTING TO BUY YOUR SPECIALTY INVENTORY Sometimes it just takes a special buyer. With over 4 million in-market buyers of classic, high-end luxury, aftermarket and specialty vehicles visiting the website per month, ClassicCars.com can help you turn those “For Sale” signs into “Sold” signs quickly and cost effectively. Backed by Barrett-Jackson, ClassicCars.com is rapidly expanding its reach and broadening its user base. To date, those efforts have helped amplify the sales performance of over 500 independent automotive dealers across the country by providing them with a platform that’s designed to help them market vehicles from the 60s to early 2000s.

• Inventory exposure to over 4 million monthly visitors

• 7-day online auction

• Unlimited inventory listings

• No seller commissions

• Qualified and vetted leads to help you turn inventory faster and with more confidence

• Personalized service • Listed and sold within days

• No contracts. Ever. • Award-winning customer service

LET US HELP YOU SELL YOUR VEHICLE FASTER

MONTHLY PACKAGE RATE FOR BOTH SITES ONLY $299 PER MONTH. Use promo code UCN12 for 2nd month free

Join our Dealer Network today to receive unlimited classified listings on ClassicCars.com AND as an added benefit we’ll also include select inventory on our new 7-day online auction platform, AutoHunter.com.

RECENTLY SOLD

1999 PORSCHE 911 CARRERA CABRIOLET Sold: $19,600

2011 CHEVROLET CAMARO 2SS BERGER EDITION 6-SPEED

1995 DODGE RAM 1500

V8-POWERED 1994 JEEP WRANGLER S

1969 FORD MUSTANG CONVERTIBLE

Sold: $9,700

Sold: $15,000

Sold: $19,100

Sold: $30,000

Visit www.classiccars.com/join-the-dealer-network or call 888-994-6751 to get started today.