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Young View Vehicles as Phone Extensions

Photo by Jeffrey Bellant TECHNICAL YOUTH: Northwood University student Alexander Rogers shows an audience the most important automotive feature for his generation - the smartphone. Young people view their vehicles as another tool for connectivity, the study found. By Jeffrey Bellant

Rush - Dated Material

MIDLAND, Mich. – Young drivers and future drivers desire Wi-Fi in their cars, with the top applications being navigation and music, according to a recent study. The results of the Autotrader/ Northwood University Connected Car Study were released last month during the Northwood University/ Cox Automotive Interactive Dealers Summit here. Northwood University students Ali Nasrallah and Alexander Rogers presented the results.

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The study gathered surveys from 360 participants: 60 percent male and 40 percent female. The largest portion of respondents was in the 16-year-old to 20-year-old range, said Rogers. “This is important, because these are individuals who are not purchasing new vehicles yet, but will be in the next five to 10 years,” Rogers said. “So their predictions and feelings for future trends matter.” The second largest group was ages 21 to 24. The rest were ages 25 through 45. Sixty-three percent of respon-

dents said they accessed the Internet through their smartphones. On the road, typical usage might be for navigation or streaming music. The survey showed 27 percent don’t access the Internet in a car. Two reasons people don’t use Internet while in a car are safety and conserving data usage. “You wouldn’t want to waste all your data driving while streaming music or using navigation,” Nasrallah said. Thirty-seven percent say that car Wi-Fi is what they want to use to access the Internet.

People are accustomed to getting Wi-Fi access, whether it’s going into a restaurant or school, Alexander said. “It’s the roots of connectivity for your vehicle,” Nasrallah said. “Navigation, live streaming music – it’s all in the car now. There’s no third party needed.” According to the survey, 61 percent of consumers wish their vehicles had Wi-Fi. Nasrallah said common sense says that if 61 percent want Wi-Fi in a car, it’s a strong selling point for someone selling a car. Continued on page 12

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USED CAR NEWS

March 21, 2016 • 3

Traffic Fatalities Rise for First Time in 50 Years By Jenny King

DETROIT — The bad news from the National Safety Council was first released in mid-February. But NSC president and CEO Deborah Hersman brought the message home when she spoke to the Automotive Press Association here in March about the significant increase in motor vehicle deaths in 2015. “Fatalities were up 8 percent from 2014 to 2015,” Hersman said. “We have not seen an increase of this size since 1966.” Hersman said 4.4 million people were seriously injured in crashes last year at a total cost of $412 billion. More new and used cars on the road are pumping up miles driven. So is an improved economy, she said. “Today’s technology has the ability to prevent crashes,” Hersman said, a fact that leads safety experts to wonder why fatalities are up. A new website, mycar-

doeswhat.org, says it is “a simple guide to your car’s safety features.” The research-based site information includes facts like rear-end collisions are responsible for close to 3 out of 10 crashes that result in serious injury or death. The University of Iowa partnered with the National Safety Council and provided research for mycardoeswhat.org. “Many consumers are not aware of newer safety technology,” said Dr. Daniel McGehee of the University of Iowa. “Forty percent (in the study) said their cars sometimes acted in a way that that startled them or in an unexpected way,” McGehee said. Fifty-seven percent of the study respondents said they sought product information through Google; one-half called their dealerships; the same number checked their owner’s manual and over half asked a local mechanic, he said. It appeared many owners

Photo by Jenny King SAFETY FIRST: Deborah Hersman of the National Safety Council uses a personal experience to illustrate her point about road safety.

did not know what the various icons on their instrument panels represented. Hersman said the National Safety Council is exploring a variety of ways to increase awareness of automotive

safety technology - even resorting to public service messages on filling station TVs. Safety features and infotainment features also have the potential to distract driv-

ers, McGehee said. They likely contribute to the number of rear-end collisions. Technology could be a cure to roadway accidents and injuries.

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4 • March 21, 2016

USED CAR NEWS

NEWS BRIEFS Wholesale Prices Take Large Drop

Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) declined in February at their fastest pace in more than three years. It brought the Manheim Used Vehicle Value Index’s February reading to 123.3, a decline of 1.4 percent from a year ago.

Turnover Reaches Record

U.S. dealership buy/sell activity reached record highs in 2015, with activity by new entrants outpacing public company acquisitions by over

four to one, according to The Blue Sky Report from Kerrigan Advisors. Laying out the high, average and low multiples for each franchise in the luxury and non-luxury segments, the report offers a detailed view of public and private company dealership acquisition activity. Key findings of the 2015 report include record high valuations, partially driven by attractive acquisition financing and the increased importance – and price – of dealership real estate. And, while the first half of the year was marked by the Van Tuyl transaction – the single largest acquisi-

MILESTONES Bentley Leon Brinkley, the former owner of Paragould Auto Auction, died Feb. 27. He was 78. Brinkley entered the auction business in 1962 after attending Missouri’s Auctioneers School. In 1963, Brinkley joined a group that started Paragould Auto Auction in Paragould, Ark. Brinkley and his wife became the auction’s sole owners in 1965. He remained the auction’s owner until 2005. It is now defunct.

Brinkley served as president of the Southern Auto Auction Association, now the National Auto Auction Association’s Southern chapter. In addition to the auction, Brinkley owned Unico Bank, National Truck and Equipment, Brinkley Auction Service, and Foton Tractor and Equipment. He was past president of the Automotive Fleet and Lease Association, a member of the Arkansas Auctioneers Association and the Independent Auto Auction Association.

tion in auto retail history – it was the influence of new, non-traditional buyers in the market, paved by Berkshire Hathaway’s entrance in 2015, that led to new entrants outpacing public company acquisitions.

ADESA Adds Apple Watch Option

service (detailers, experienced technicians), purchasing and the business office. Positions range from full and part-time positions, with day and evening shifts available. Some of the areas with a large number of job openings include: Washington, D.C. and Baltimore area; Southern Florida area; Los Angeles; Chicago; Houston; Sacramento, Calif. and Denver, Colo. In addition, at its home office in Richmond, Va., CarMax is hiring for 50 digital and technology positions.

ADESA has launched its Marketplace app for the Apple Watch. The original Marketplace app available on iOS allows registered auto dealers to find, research, price and purchase vehicle inventory, both online and at ADESA auction locations across the country. The IAA Debuts Title Tool Apple Watch app includes many Insurance Auto Auctions Inc. popular features of Marketplace recently announced the launch of such as “Watch Lists�, which tracks its Title Procurement Dashboard, vehicles of interest, and GPS. a new feature within IAA’s online vehicle inventory management and analysis tool, CSAToday. CarMax Looks to Fill 1,600 Openings The new dashboard feature imCarMax Inc. is recruiting for proves the management of the titlemore than 1,600 positions in loca- procurement process and provides IAA Title Services customers with tions across the country. The majority of open positions are enhanced visibility of document in sales, with additional positions in status.

GETTING IT STRAIGHT The name of NextGear Capital’s chief technology officer was mis-

spelled in the March 7 issue. The correct spelling is Bryan Everly.

Published By General Media LLC USED CAR NEWS (ISSN 1555-7413) is published at 24114 Harper, St. Clair Shores, MI 48080 Phone: 586-772-5200 or 800-794-0760 Fax: 586-772-9400 www.usedcarnews.com Charles M. Thomas - Founder (1947-2002) Lynda R. Thomas, Publisher Colleen Fitzgerald, General Manager Columnist: Tony Moorby

Editorial: Ted Craig, Managing Editor Jeffrey Bellant, Staff Writer Contributing Writers: Ed Fitzgerald, Jenny King, Sheila McGrath Advertising: Shannon Colby, Account Manager Marie Hingst, Account Manager

:FBST $BOU#F 8SPOH

Circulation: Helen Thomas Production: Josie Godlewski, Media Manager Cee Lippens, Web Master & Graphic Designer

Vol. 21 • No. 24 Used Car News is published the first and third Monday of each month. Subscribers: We print advertisements as sent to us by auctions and other advertisers. It is not possible to verify the correctness of listed vehicles in auction ads. Most lists are partial and all lists are subject to last minute changes by auto auctions, so before travelling a long distance for a particular auto auction event, contact the auction by telephone for a fax of vehicles in the sale. Used Car News assumes no guarantees or liabilities concerning the accuracy of any advertisements. All Rights Reserved.

Reproduction in any form is prohibited without the written consent of the publisher. OUR ADVERTISING APPROVAL POLICY Payments from first time advertisers must accompany the insertion order. Distribution is guaranteed by the USPS. The advertising reservation deadline is 12:00 noon Thursday, 11 days prior to the issue cover date. Ad materials are due by 5 pm Friday, 10 days prior to issue cover date. For advertising specifications please email colleen@usedcarnews.com.

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

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3/14/16 3:49 PM


USED CAR NEWS

March 21, 2016 • 5

Condo Association Takes Action Against Curbstoners By Sheila McGrath

Residents of a Palm Springs, Calif., condominium development are hoping new parking restrictions will put an end to a de facto usedcar lot that has sprung up on their access drive. Homeowners in the Canyon Sands development recently petitioned the city of Palm Springs for help, and at a meeting on Feb. 17, the city council approved a two-hour parking limit at the site. The restrictions will be in effect from 8 a.m. until 6 p.m. every day on the 4300 block of the East Palm Canyon Drive frontage road. Diane Weist, president of the Canyon Sands Homeowners Association, said the problem started about seven years ago, when the access road became known around town as a good place to sell cars. She doesn’t know how or why it started, but the cars became a safety hazard as well as an eyesore, she said. Sellers typically park their cars on the street with “For Sale” signs in the window and leave them there, sometimes for an entire weekend. Prospective buyers drive down the street to shop, often stopping in front of a car they like to jot down a

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phone number. “There were seven there this past weekend, and one of them was a great big RV bus,” Weist said. “People stop right in the middle of the street, and it becomes a safety hazard. That’s worse than the sight of it.” Weist said the development is close to the upscale Parker Palm Springs Resort, and maybe that’s why it is seen as a good place to show off cars for sale. They’re usually nice cars, Weist said – often high-end or vintage models. But this winter, the 299 homeowners in the development decided they had had enough. More than 30 residents signed letters to Assistant City Manager Marcus Fuller asking him to approve parking restrictions on the road to keep the sellers away. In their letters, residents said the cars for sale bring additional traffic as well as unwanted attention and activity around their neighborhood. “These vehicles are really an eyesore on our beautiful community and a safety issue as folks come off (Hwy) 111 and make sweeping U-turns at our front entrance and often just double park to view vehicles,” wrote resident Michael W. Pontarelli.

NO PARKING: Curbstoners line the access drive to a California condominium development. Owners are seeking relief from the city for these pop-up used-car lots.

In his report to the council, City Manager David Ready said his staff had confirmed the problem. “During a short visit to the site, staff observed quite a few vehicles taking access onto the frontage road and retrieving contact information displayed on the used cars,” he said.

The parking restriction signs are expected to go up in about a month, Weist said. The cost to install them will be around $1,000, and the city will be requesting reimbursement from the Canyon Sands Homeowners Association, according to the staff report.

3/14/16 2:58 PM


6 • March 21, 2016

USED CAR NEWS

Former GM Admits to Fraud A former general manager at a Pennsylvania Chevrolet store pleaded guilty in federal court to a charge of conspiracy to commit wire fraud. Douglas A. Grooms pleaded guilty to one count. From June 2008 to September 2013, while employed as the general manager of Community Chevrolet in Meadville, Penn., Grooms embezzled money from the dealership by writing dealership checks to a fictitious marketing company, which he set up solely for the pur-

April 13, 2016

pose of receiving the checks. This resulted in a loss of $485,800 to Community Chevrolet. Grooms is scheduled for sentencing on July 11, The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant. The court continued Grooms on bond pending sentencing.

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8 • March 21, 2016

USED CAR NEWS

MY WORST DECISIONS - Dealer Stories BEST DEALERS MAKE, LEARN FROM MISTAKES Even the best dealers make mistakes. Here, three of the best in the business share the lessons they learned the hard way.

Ignoring Inventory Turn

Arlan Kuehn, owner of Kuehn Auto Sales in South Sioux City, Neb., started with a General Motors store in 1970 and then opened an independent used-car dealership in 1998. As chairman of the National Independent Automobile Dealers Association, Kuehn doesn’t lack in experience as a long time dealer who worked in both the new- and used-car business. So he originally passed on programs like the NIADA’s

Certified Master Dealer class. Kuehn said it’s a decision he regrets. “I wish I had taken the CMD class as soon as I was a member,” Kuehn said. He said programs like CMD and twenty groups changed his whole way of thinking about managing inventory. In CMDs, like twenty groups, dealers exchange information with fellow dealers with similar business models in non-competing markets. One principle he learned

has made a huge difference in his business. Kuehn said often dealers think it’s good to have a large inventory, regardless of how many they sell per month. “Dealers in (CMD) compare their inventories, how long they have cars in stock and how much it’s costing to keep those cars in stock,” he said. By applying this principle Kuehn has vastly improved his business. Kuehn passed on CMD because he felt it cost too much, but not doing it actually cost him more.

Not Staying with What You Know

Darla Booher, owner of

Deal Depot in Greer, S.C., may be the current National Quality Dealer, but even she has a decision she regretted. Booher opened the buyhere, pay-here business in 2001 and has expanded to three stores. During tax time she’s selling more than 100 cars a month. She said her biggest mistake involved a side business she opened. “I just spread myself too thin,” she said. Booher, who enjoys antiqu-

ing, opened an antique/cafe and sandwich shop, just up the street from the dealership. “I guess I just got overconfident and thought, ‘Yeah, I could do both.’” Booher didn’t go in with her eyes closed, though. “I had followed the model of a very successful business in (the Midwest),” she said. “I thought, ‘Wow, they make it seem so effortless and easy.’ “I have a passion for antiques and love their store. So I thought I could duplicate that here.” Booher said as she contemplated moving into semi-retirement, the business would be a perfect transition. She compared her experience to that of people who have a passion for cars and decide to go into the car business. Just because you have a passion for cars, doesn’t mean you can run a dealership. While the antique store idea might work on its own, it was the restaurant part that proved to be the problem, she said. “You have all the constraints of a full-scale restaurant, even though all we did was serve sandwiches, pies, cakes and side dishes,” she said. Despite the challenges, Booher had the business running for more than two years before deciding to pull the plug. Another problem, she determined, was the new business was not a related business. A dealer who gets into rentals or auto service has the advantage of still working in the same industry. Booher said she learned that it’s best to “stay with what you know.”

all kinds of success since becoming an independent dealer more than a decade ago. The owner of Certified Motors in St. Clair Shores, Mich., has served as president of the Michigan Independent Automobile Dealers Association and represented the group as the state’s Quality Dealer of the Year. Campise said his biggest mistake was not striking out on his own earlier. It’s easy to see why he didn’t. Campise had tremendous success selling cars and managing stores for franchise dealers.

In one span of less than 10 months, Campise sold 450 cars. It was easy to not make a change in those circumstances, he said. But circumstances changed. Those 450 cars were Oldsmobiles, the only brand his employer carried. Today, Campise is trying to bring on change rather than have it forced on him. He realizes that he’s fallen behind with technology and is taking classes to catch up. “When you don’t learn, you should drop out of this business, because it will school you every day,” he said.

Waiting to Go Independent

Ray Campise had enjoyed

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10 • March 21, 2016

USED CAR NEWS

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Debt collection continues as a hot topic for regulators. It topped the list of complaints received by the Federal Trade Commission in 2015. Now, regulators at all levels are aggressively pursuing alleged debt collection abuses. One of the latest examples comes from the Arkansas Attorney General, who sued a buy-here, pay-here dealer for using prohibited collection methods. The attorney general’s lawsuit claims to have identified 2,252 cases of prohibited collection practices by Automatic Auto Finance Inc., Jorja Trading Company Inc., CashFish Motor Pawn Inc. and their officers and owners. Arkansas Attorney General Lisa Rutledge basically attacked the entire buy-here, pay-here business model in announcing the suit. Ken Shilson, founder of the National Alliance of Buy-Here, PayHere Dealers, said dealers and finance companies that specialize in the lower end of the market draw more complaints. It’s just a built-in risk. Attorney Angela Fiorentino said the focus on debt collection is a function of a poor economy. There are just a lot of people who have

fallen behind on their bills. “But even as the economy improves, debt collection litigation and regulatory actions will continue for several years since many of these statutes allow a plaintiff or a regulator to bring an action for conduct that occurred many years ago,” Fiorentino said. The key to avoiding problems is proper communication, she said. If a communication can be characterized as informative, even if it provides instructions for making payment, the communication is less likely to be characterized as debt collection, she said. A communication that can be characterized as lien enforcement can avoid being labeled as a debt collection under some statutes. Also, some states take a favorable view of communications aimed at keeping consumers in their cars. Fiorentino said enforcements from regulators, such as the Consumer Financial Protection Bureau, can be worse than the outcomes in court. She said that although regulatory sanctions for minor infractions can sometimes be less costly than the monetary relief sought in private litigation, the courts in private litigation are more likely to entertain defenses.

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12 • March 21, 2016

USED CAR NEWS

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Southern AA April 6 860-292-7500

Manheim Detroit April 28 734-654-7100

Manheim Pennsylvania April 15 800-777-2053

*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/ Retail Loan and lease accounts are owned by Chase. *The Jaguar word mark, the Jaguar logo, and Jaguar Financial Group are trademarks of Jaguar Land Rover Limited and any use by 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. *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 Chase. Retail / Loan and lease accounts are owned by Chase. JPMorgan Chase Bank, N.A. Member FDIC ©2016 JPMorgan Chase & Co. (16-030) 04/16

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14 • March 21, 2016

USED CAR NEWS

PEOPLE IN THE NEWS Manheim Names GM For Largest Sale Manheim recently announced the promotion of Joey Hughes to general manager and vice president of Man-

Joey Hughes heim Pennsylvania. Hughes replaces Julie Picard who was named regional vice president late last year. Hughes joined Manheim as a dealer sales representative in 2001, where he advanced to fleet-lease manager and assistant general manager before becoming

the general manager of Manheim Darlington in 2009. He also served as market vice president of the Carolinas and most recently, general manager of Manheim Statesville. He has recently been asked to participate in multiple international collaborations in which Manheim is involved. In his role as general manager and vice president, Hughes will be responsible for all aspects of auction operations, both internally with a large diverse workforce of some 1,600 full-time and part-time team members, and externally with the largest customer base in the industry. Manheim Pennsylvania registers more than 10,000 vehicles for auction weekly, providing physical and digital auction channels, data

analysis, reconditioning, financing, transportation, and mobile products and solutions. Hughes will also spearhead Manheim’s conservation and community service initiatives, which are organization-wide values. Manheim Pennsylvania operates the largest state-of-the-art reconditioning center and a water conversation center that reduces its daily water demand by 60 percent. Hughes is a member of the National Auto Auction Association Standards committee and also serves as treasurer for the Southern Chapter..

Cox Taps Tech Execs Cox Automotive Inc. has appointed Mark O’Neil to the newly created position of chief operating officer. O’Neil will be respon-

sible for the company’s day-to-day operations of Cox Automotive’s Software, Media, Inventory and Financial Services Groups, reporting to Sandy Schwartz, president of Cox Automotive. O’Neil was previously president of Dealertrack, which was acquired by Cox Automotive last fall, and subsequently president of the Cox Automotive Software Group. O’Neil began his career in the automotive industry in the late 1980s, serving as president of the dealer group Ertley MotorWorld. He then went on to co-found CarMax Inc. Following that, he was president and chief operating officer of Greenlight.com, an online automotive sales website. O’Neil began serving at Dealertrack in 2001

as a member of the board of directors, and in 2005 became chief executive officer. Cox Automotive acquired Dealertrack in October 2015. He currently serves as a director of DealerTire LLC, a privately held company, and he holds a bachelor of science in industrial engineering from Worcester Polytechnic Institute and an MBA from Harvard Business School. Keith Jezek will succeed O’Neil as president of the Cox Automotive Software Group. Jezek, currently serving as president of software solutions for Cox Automotive, has been responsible for the strategic direction and overall success of the company’s software division, which includes vAuto, HomeNet Automotive, Haystak, VinSolutions and XTime.

Jezek has held positions with ADP, Digital Motorworks, LP, TraveLogix and co-founded vAuto with Dale Pollak, executive vice president of Cox Automotive. Rick Gibbs was named Cox Automotive chief product officer, a new position, with the responsibility for creating product strategy and the technology development road map that will enable Cox Automotive to go to market as a unified product company. Gibbs co-founded Dealer.com in 1998, which was acquired by Dealertrack Technologies in March 2014. At Dealer.com, Gibbs served as CEO and president since December 2013. Prior to that, he was the company’s chief technology officer and president .

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16 • March 21, 2016

USED CAR NEWS

RETAIL MARKETS pay-here last year, comFLORIDA Chris Leedom, presi- pared to subprime today. “We still have buy-here, dent, AutoMaxx, Sarasopay-here demand, but with ta, Fla.: subprime we have a higher “We’ve been around since 2003, so we’re in our 13th level car, so we can put a better product on the street. year. We have one location. “We could still sell buy“We have 25 (units) in inhere, pay-here – 10 to 15 a ventory. We typically obtain our cars from auctions in month – but there is such appetite in the subprime and around our area. “We’ll sell anywhere from lending market, we’re fo10 to 25 a month. We’re just cused on that. It’s the old phrase, ‘they’re buying exstarting to see an uptick. “Last year at this time, we tremely deep.’ We’re capiwere offering only buy-here, talizing on that while we pay-here (finance). This can. “Most of our (vehicles) year we’re using some outare 2010s or 2011s, and the side lenders that we find are helping to sell cars. These mileage is 40,000 to 70,000. are cars we would not be Our models are newer this able to sell on a buy-here, year by about three years and mileage is lower than pay-here program. “We’re now 100 percent last year. “(Inventory) is predomisubprime because we’re finding there is pretty good nately cars, maybe 65 perdemand. That’s something cent, to 35 percent trucks and SUVs. We’ve actually different this year. “The average (retail price) added a few more trucks is $9,800. That’s gone up and SUVs than last year. $2,500 from this time last Part of that is that we can year. That’s primarily the spend a lot more. “(Inventory) is an equal difference between where UCN-9x6-Feb.pdf 1 2/16/16 4:04 PM we were at with buy-here, mix of domestics and

imports. “Average reconditioning is about $780. We also have a three-month/3,000 mile warranty that we give with every car. “We had been doing our reconditioning in-house. We are just now starting to farm that out. We have a pretty good supply of shops around us. “One hundred percent of our marketing budget is dedicated to some (area) of online. We’re not doing any print, radio or television. Now we’re more productdriven, putting inventory out there. “Last year, we were probably 75 percent traditional advertising. “It looks like wholesale prices are softening a little bit. With new-car volumes so high, it’s a good thing to be in the used-car business. I think it’s a little easier to get quality inventory than it was three years ago. “We recently sold a 2010 Nissan Altima. Mileage was 50,000.”

Compiled by Jeffrey Bellant SOUTH DAKOTA

Ron Kopren, co-owner, Kopren Motors, Rapid City, S.D.: “The spring market started in February with tax season. We’re not a buy-here, pay-here dealership. “We get our customers financed all over the place. We use Ally, Capital One, credit unions and regional banks. “It’s tough to finance customers with low FICO scores. Good credit can get done anywhere. Ally, Gateway One or First Interstate, a regional bank, take all the prime customers. “Some credit unions buy deeper than others. We have one credit union that started a second-chance program that we use. They take customers with scores under 600. “We sell 30-40 cars a month. We carry 75-80. “Our average price varies a lot. We try to buy trucks in the $18,000-$20,000 range wholesale. With cars, I stay under $14,000 wholesale.

We have everything from 2015s to 2005s. “I buy a lot of cars at the auctions in Denver. I’m there Tuesday, Wednesday and Thursday. “The newer stuff, like the program cars, is weakening up. You can buy them back of book. “We sell about 50-50 cars and trucks. In our area, people are always looking for trucks. “We’re in the Black Hills, where everybody always thinks they need fourwheel-drive. “But we do a good volume of cars, also. “Our economy is pretty steady. We have Ellsworth Air Force Base. The agricultural economy is strong. We have a big influx of tourists in the summer because of Mt. Rushmore. “We sell a lot of vehicles to airmen at the base. We work with a credit union on base. They refer a lot of people to us and do the financing. “I just sold a 2012 F-150 Crew Cab for $26,600.”

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18 • March 21, 2016

WHOLESALE MARKETS MICHIGAN

Lawrence Cubitt, general manager, Flint Auto Auction, Flint, Mich.: “We’ve been in business since 1953, so it’s 63 years coming up in June. “We run eight lanes. We’ll run around 2,500 cars a week. “Volumes are up slightly. We had a pretty strong year last year, but it’s still up maybe 5 percent this year. “Our conversion rates have been steady. “We have dealer consignment, (fleet-lease) and a General Motors factory sale. Our factory sale is every other week. “Our dealer consignment right now is probably around 60 percent of our volume. Our fleet-lease and commercial accounts make up (the bulk) of the rest. “We average, on a weekly basis, somewhere around 800 dealers (in the lanes). We have dealers coming from all over the Midwest, but not just here. We have them coming from Texas,

18_UCN.indd 1

Florida, Missouri – all over the country. “Dealers say the retail side has picked up, specifically on the new-car side. They’re doing a lot more leasing, so the new-car side has been good. “On the lower-end (market) – the $8,000 to $10,000 car – the market has picked up because of tax time. “We have an early bird sale that starts at 8 a.m. that sells $5,000-and-under cars. We run all eight lanes for that sale. That conversion rate has picked up considerably because of tax time. So it’s putting like buyers in front of like sellers. “Our average price overall is probably $13,000 to $14,000. “For online sales, we have Online Ringman. We use OVE, SmartAuction and Simulcast. Simulcast has gotten a little stronger year after year. You have to look at the benchmark retention (for online sales). “Obviously, the 5- to 6-year-old vehicle with de-

cent miles is going to bring all the money. The 2009 to 2011 vehicle with 70,000 miles is (an example). “We have a two-day Corvette Classic sale coming up on April 12-13. We expect around 3,000 between the two days. “I think we feel pretty good about 2016 overall, especially with the number of off-leases coming back, with Chrysler Capital ramping up and more lease returns. “We feel good that the volume is going to be there.”

MISSOURI

Doug Doll, owner/general manager, KCI Kansas City, Kansas City, Mo.: “Our volumes are up tremendously. Now we’re up to more than 1,000 to 1,300 a week. We were running about 700 cars a week (last year). We’ve got six lanes. “We opened up in Kansas City in 2008. The auction started as a smaller sale in Elwood, Kan., in 1978. “The auction is growing

by leaps and bounds. We’re looking to get more asphalt down. We have the land. We just have to get it developed. We’re hiring 10 to 15 extra people. We already hired 10 to 15 others. “We’ve added some factory accounts. We’ve got Hyundai Financial now and we’ve got Toyota Financial. Kia has been shipping a lot of (factory) cars to us from the East Coast. We’ve done a pretty good job with those. “We also have Westlake Financial, Caprock, Consumer Portfolio Services, Avis and Hertz. We also sell for ARI and TitleMax. “Our dealer consignment has been up tremendously. We’ve added several newcar stores and wholesalers to the mix. We’ve got two big wholesalers, one who will run 100 to 120 cars a week and another who runs 50 to 75 cars a week. Those guys are buying a little higher priced car to wholesale here. “Dealer- consignment-

USED CAR NEWS

Compiled by Jeffrey Bellant sold is up 100 cars per week from last year by itself. “We run probably 60 percent dealer consignment and 40 percent (factory/ fleet-lease). “In February, our sales percentage was 66 percent. In early March, we were up to 75 percent. It’s crazy. “It is (partially) from tax season. But our average price – with the factory cars – is up about $3,000. So I don’t think the tax money is really affecting the factory cars. “We are averaging between 550 and 600 dealers in the lanes per week. We’re getting some new-car stores in here because of the factory accounts. We’re seeing a different buyer coming in that’s buying a later-model car. “Everybody (on the retail side) is telling me it was the best February they’ve ever had. “We also do a monthly equipment sale.”

3/14/16 3:47 PM


USED CAR NEWS

March 21, 2016 • 19

MONTHLY DEALER CONSIGNMENT AVERAGES AVG. PRICE AVG. MILEAGE

COMPACT CAR Feb 2016 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 YTD AVG:

$5,055 $5,839 $5,851 $5,680 $5,418 $5,372 $5,147 $4,932 $4,933 $4,923 $5,017 $5,092 $5,391

102,218 100,800 100,410 101,407 102,032 101,084 102,741 104,230 103,050 103,246 101,933 101,970 101,751

Feb 2016 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 YTD AVG:

$3,578 $4,240 $3,982 $4,103 $3,879 $3,753 $3,866 $3,809 $3,862 $3,733 $3,753 $3,954 $3,949

117,219 114,926 115,393 112,477 113,940 115,209 114,420 113,866 112,994 114,003 114,282 112,814 113,716

Feb 2016 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 YTD AVG:

$11,315 $12,384 $13,143 $12,656 $12,182 $12,134 $11,543 $11,175 $11,708 $11,412 $11,861 $11,838 $12,049

98,807 98,339 96,598 96,794 98,552 98,026 99,066 100,399 98,420 99,303 97,772 97,426 98,133

Feb 2016 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 YTD AVG:

$5,869 $6,389 $6,479 $6,298 $6,116 $6,088 $5,911 $5,669 $5,692 $5,740 $5,786 $5,869 $6,062

109,764 109,530 108,671 108,896 109,721 108,365 109,748 111,442 109,822 109,230 109,887 109,090 109,423

FULLSIZE CAR

LUXURY CAR

MIDSIZE CAR

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Feb 2016 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 YTD AVG:

$15,878 $14,726 $15,340 $15,461 $15,221 $15,574 $15,645 $15,781 $15,378 $15,604 $15,586 $15,924 $15,203

104,169 108,794 106,962 106,425 107,956 106,084 106,512 104,051 105,472 104,319 104,854 103,873 106,901

Feb 2016 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 YTD AVG:

$15,333 $16,803 $17,608 $16,826 $16,560 $16,422 $15,521 $14,751 $15,447 $14,721 $16,247 $15,081 $16,062

76,734 74,086 73,154 74,221 74,921 75,080 75,338 77,276 75,901 77,756 75,007 77,944 75,810

Feb 2016 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 YTD AVG:

$11,498 $11,775 $12,017 $11,970 $11,505 $11,599 $11,352 $11,148 $11,360 $11,331 $11,635 $11,704 $11,545

107,401 107,156 106,874 106,072 107,525 105,875 107,247 107,766 106,287 107,086 106,210 105,934 106,849

Feb 2016 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 YTD AVG:

$6,271 $6,731 $6,817 $6,625 $6,381 $6,394 $6,391 $6,102 $6,266 $6,368 $6,358 $6,526 $6,449

121,146 117,792 118,260 120,029 120,909 120,024 120,332 122,340 120,694 119,658 120,167 119,020 119,861

SPORTS CAR

SUV

#sVAN

CURRENT YTD, THROUGH FEBRUARY 2016

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PICKUP

AVG. PRICE AVG. MILEAGE

SOURCE: MANHEIM CONSULTING

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20 • March 21, 2016

DISCONNECTED JOTTINGS FROM One way to describe the current election cycle would involve language that Donald Trump hurls around with the abandon of some

TONY MOORBY

decency is not so appealing. And that’s one of the problems with him, he’s Jekyll and Hyde at the same time, for every good there’s a bad.

Tony Moorby

• 40-year veteran of the industry • President from 1997–2000 of ADT Automotive • Served as ADESA’s executive vice president of sales and marketing • Moorby & Associates 2006–present • Awarded the Ring of Honor by NIADA • NAAA Hall of Famer

cheap market stall huckster. Not one of the current candidates, six as of this writing, impresses me worth one of The Donald’s cusses. I’ve said it before, but if this is the cream of the electoral crop then we’re in the deep and abiding brown stuff. To be fair, it’s titillating to think of Trump as a total newcomer with none of the Washington shackles attached. But throwing everything to the wind including everyday and political

USED CAR NEWS

His blunt appeal to everyman looks quixotic on the international stage, where dependency and steadfastness mean so much more. It would be easy to draw comparisons to Putin or even Kim Jong-un for his irascibility and quick-on-thedraw temperament. I do think that those who say he has no political experience, especially for things international, should remember that Obama was only a junior Senator from

Illinois for 300 days or so before he gave up his seat to run for president. As a businessman, Trump must be a good delegator in spite of his obvious ego. All politicians at this level are egomaniacs anyway. The thought of listening to Ted Cruz’s nasal drawl for four years fills me with dread and he never looks clean or smart. I thought Marco Rubio was going to stand above the fray there for a while, but he got successfully pulled into the whirlpool of playground taunts and tantrums and has since fared worse as a result. In pure qualification terms, Kasich is probably the better candidate as a classical politician. Ex-governors seem to make good presidents, but he has little voice, he’s not well known and has little “stage presence”. On the other side, I can’t believe that Secretary Clinton has as much traction as she seems to keep. “Disingenuous” is the only adjective that describes her to

C R O S S WO R D

a tee. She’s insincere – her smile never quite reaches her eyes and she continues to hide the deep-down truth about various matters relating to emails and Benghazi. She criticizes others for things she does herself, only more and bigger. I wouldn’t trust the make-up of the Clinton Foundation for one nanosecond. Putting her in on a conscience vote just because she’s a woman would be an ill-timed event. Let’s wait for a better, more believable candidate. Bernie Sanders is a socialist where I’m at the other end of the political spectrum – enough said. The Republican Party has a real conundrum on their hands having, at the first debate, made Trump give an oath that he wouldn’t run as an Independent once he declared his candidacy as a

Republican. What’s that old expression about being careful what you wish for? Of course they don’t want him in their midst. What the party doesn’t want is that anyone should disrupt their comfortable status quo, with all the accouterments that go with a job for life. That’s their problem – the man in the street sees a need to change the old guard. Perhaps politics is a bit like business – disruption brings changes, usually for the better. Maybe we’ll see a slimmer, faster, more agile government. You can imagine the closed-door conversations, uttering the supreme irony of Republicans hoping a Democrat wins the race. (Please understand that these are only my opinions and should not be held as a reflection of the publishers.)

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

By Miles Mellor Across 1. Replacement for the Bugatti Veyron 4. Lotus car which starred in “The Spy Who Loved Me” in 1976 9. First letter in BMW 10. When to close a sale, ideally 12. Approval from the boss, in a way 14. Luxury Italian sports car 16. Place to chill out 17. Melt 19. __ Mans car race 20. Early 20th century Hudson car brand 22. Rolls Royce Silver ___ 24. Pontiac Grand ___ 26. Hyundai subcompact 28. Type of leather 30. Gear ____ 31. Compass point 32. 9 on an old sundial 33. One of two cars besides a Cadillac named in Springsteen’s “Pink Cadillac” 36. Luxury car from Elon Musk

38. Old vinyl record 39. 0-60 time measurement, for short 40. Number of cars or trucks being used by a rental car company 43. Saturn roadster 44. First letter in Infiniti, 2 words 46. Ford car that can detect potholes and adjust the shocks accordingly, 3 words 53. Ending for Nobel or novel 54. Computer people, for short 55. Car that’s flawed 56. Takes a car for a spin to try it out 57. Flat-___ truck 58. ____-belt Down 1. More than a special Lamborghini Aventador 2. Site for the navigation feature on most luxury cars now, 2 words 3. Not operating currently

4. Auction ending 5. Places for passengers 6. Copy 7. Available for immediate delivery (of parts for example), 2 words 8. Retractable hard___ convertible 9. It was a Plymouth sedan 11. Car wash offering 13. Expressions of surprise 15. Chevrolet ___ Camino 18. ___, the people.. 21. Volvo concept car, 2 words 23. Pale yellow car used for some cars 25. The highest amount 26. Passage in a supermarket 27. Mack is one 29. Not be straight 31. Netherlands plate letters 34. Good grades in exams 35. Stand firm against 36. Trademark, abbr. 37. Car option that slides open 41. Endures 42. Vehicle weight measure

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Solution to the 3/7/16 puzzle

45. Pre-owned 46. Honda mixing economy and versatility 47. “Mileage” 48. Breakfast juices, abbr. 49. Important person 50. Camry ___ 51. Afternoon time, abbr. 52. Gene material

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Solution to this puzzle in the 4/4/16 issue. Call 1.800.794.0760 for a FREE subscription.

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USED CAR NEWS

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22 • March 21, 2016

USED CAR NEWS

AROUND THE BLOCK

Compiled by Jeffrey Bellant

CHARITY SALE RAISES NEARLY $20,000

THUNDERBIRD IN PHOENIX: Buyers flock the lanes at ADESA Phoenix for this Ford Thunderbird during a recent sale to support a charity.

ADESA Phoenix recently hosted a charity auction that raised nearly $20,000 for the Juvenile Diabetes Research Foundation (JDRF). The event was held in conjunction with the auction’s Sixth Annual Legendary Sales Week events. With Ford as a partner for this charity event, ADESA Phoenix

auctioned two items: The first was a signed and framed poster depicting the many styles of Mustangs during the years, which sold for $2,000. The second item on the block was a 2002 Ford Thunderbird, which brought in $16,500. Sports and music memorabilia sold through silent auction

brought in an additional $1,000 toward the total donation. “The crowd who joined us for Barrett-Jackson and our own Legendary Sales Week events brings a lot of excitement. After a visit from the JDRF Ambassadors - the kids actually affected with diabetes - that crowd is moved to make a difference with their generous donations,” said ADESA Phoenix General Manager Ryan Edwards. “Our auction supports diabetes research all year, but this event brings lots of people into the fold. That’s why this is one of my favorite weeks of the year.” ADESA Boston, ADESA Buffalo and ADESA Indianapolis also organize events each year to raise funds for JDRF and contributed to the purchase of the 2002 Ford Thunderbird that was auctioned at ADESA Phoenix. Since 2012, ADESA sales have raised more than $550,000 for JDRF.

Auction Celebrates Longtime Employee Patty Covey became the newest member of State Line Auto Auction’s Twenty Year Club, and was honored in a brief ceremony before a recent auction. As is tradition, Covey received an engraved brass clock as a token of State Line’s appreciation for her 20 years of employment. Covey, as State Line’s commercial title administrator, handles title and vehicle registration documents from all commercial customers. “I cannot over-emphasize what Patty’s contributions have meant to our business,” said Jeff Barber, State Line’s president. “Patty touches every single title for our ‘Friday’ commercial accounts, and her attention to detail is absolutely amazing. “Her expertise in handling title problems and issues is extremely important to our success.”

We invite news items and top-quality photos from our readers to be considered for “Around the Block.” Please include the name of a contact person and a telephone number. Send items and photos to: Jeffrey Bellant. Mail: Used Car News, 24114 Harper Ave., St. Clair Shores, MI 48080. Fax: (586) 772-9400 e-mail: jeff@usedcarnews.com

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3/14/16 3:46 PM


YOU ARE MORE THAN A CAR DEALER And NextGear Capital is more than a lender. Sure, we support you with the buying power and flexibility you need, but we also take time to find out what’s really driving your business. And that starts, with what matters most to you.

What matters most to you? Join the conversation at nextgearcapital.com/whatmattersmost

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3/13/16 8:16 PM


30

DAYS

FOR

$30

Visit ADESA.com/off-lease to find inventory. 30-day guarantee on select inventory offered in the open sale on DealerBlock. Applies to eligible off-lease and rental vehicles.

Pay just $30 for 30-day guarantee Need to return the vehicle? We’ll pick it up from your lot! Transportation refund too! If you use CarsArrive Network for transport for an ADESA Assurance vehicle, we’ll refund your transportation cost, if the vehicle is returned.

© 2016 ADESA, INC.

ADESA Assurance buyer protection program and CarsArrive Network must both be selected at time of purchase to qualify for transportation refund. Vehicle must be returned in same condition as purchased within 30 days from purchase date. ADESA Assurance refund covers vehicle sale price and buy fee; transportation costs are only included if CarsArrive Network is used for transportation. See terms and conditions for full details. ADESA Assurance program may be cancelled by ADESA at any time and without notice.

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3/13/16 8:12 PM

Used Car News 3/21/16  
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