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August 1, 2016
NAAA Expects Auction Volumes to Set Record
Photo courtesy of DAA Northwest ROCK AND ROLL: Vehicles line up before the annual Rock & Roll sales at DAA Northwest. While events draw extra large consignments, all sales are seeing larger runs this year as off-lease inventory boosts volumes. By Ted Craig
Rush - Dated Material
Auction volumes are on pace to set a new record this year, although a second quarter slowdown creates some concerns. National Auto Auction Association chief economist Ira Silver said the auctions are set to run 9.7 million units in 2016. That tops the old record of 9.6 million units set in 2004. The record wonâ€™t stand for long, however. Silver projects volumes of 10 million units next year. The increase in consignment comes from higher volumes from commercial consignors.
Dealer consignment is growing more slowly because retail new-car sales have slowed. This has the industry wary about increased incentives from the manufacturers. â€œThatâ€™s always the concern when sales weaken,â€? Silver said. Being on pace for a new record is different than setting a new record, however, and recent data from Kelley Blue Book does raise some doubts about the industry reaching that mark. Kelley reports that auction volume has declined slightly, despite peaking in the first quarter of 2016 from off-lease vehicle returns. Year-over-year auction volume
is up 11 percent, but there was a 2 percent decrease in the number of vehicles running through the lanes in the second quarter. â€œDespite what we know about the increase in lease returns for the foreseeable future, itâ€™s interesting to note that Kelley Blue Book field analysts are seeing a decrease in auction inventory from last quarter,â€? said Kelley analyst Sean Foyil. â€œWith auction volume at an alltime high for 2016, it is unusual that the overall average decline in auction values matched last yearâ€™s pace.â€? Overall, auction values for used 1- to 3-year-old vehicles declined
3.6 percent, or roughly $671, in the second quarter of 2016. While the first quarter was unusual, the second quarter decline was less drastic than Kelley Blue Book analysts expected. One segment that is doing especially well this year is sports cars, Kelley reports. Low fuel prices and seasonal trends caused the sports car segment to outperform every other segment in the used-car market in the second quarter. In fact, nearly every vehicle within the segment outperformed the overall market average, with a yearto-date increase of 1.5 percent.
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7/25/16 12:57 PM
USED CAR NEWS
August 1, 2016 • 3
Judge OKs Residual Loss Suits for GM Vehicles DETROIT (AP) – A federal judge has ruled that owners of General Motors cars recalled for defective ignition switches can sue the company for any loss in the cars’ value. But the judge threw out broader loss-of-value claims from owners of GM cars that weren’t recalled. Judge Jesse Furman in New York issued the ruling on a motion from General Motors to dismiss the claims. He wrote in a 103-page opinion that the ruling “significantly curtails” the size of the plaintiffs’ potential recovery. Seattle attorney Steve Berman says the split decision still allows owners of at least 11 million to 12 million cars that had defective ignition switches to sue the automaker. But Furman’s opinion said the argument that all GM cars lost value because of the recalls was unsound. GM spokesman Jim Cain said the decision was a big win for the company be-
cause the judge tossed out the broader claims that a series of recalls in 2014 damaged the company’s reputation and devalued all GM cars. Had the plaintiffs won on the reputation claim, it would have exposed the company to many more lawsuits and could have placed any manufacturing company with a recall at risk of lawsuits, Cain said. Yet to be decided are lossof-value claims for cars involved in other GM recalls. In 2014, GM issued over 60 recalls covering more than 25 million vehicles. The embarrassing recalls included 2.6 million small cars such as the Chevrolet Cobalt for ignition switches that could slip out of the run position and cause cars to unexpectedly stall. That would knock out power steering and brakes, causing crashes. The air bags also were disabled. The ignition switches are linked to at least 124 deaths and 275 injuries. Cain said other ignition
switch recalls weren’t as serious and were fixed with changes to keys, so loss of value claims will be hard to prove. Berman, the lead attorney for economic loss plaintiffs, says he plans to appeal the ruling on the broader lossof-value claims. Economist George Hoffer said the amount consum-
ers might get for their value claims should be less than other settlements, such as Toyota’s unintended acceleration case that cost the automaker more than $1 billion. Hoffer has been an expert witness in several such cases involving vehicle values. The Toyota case involved vehicles that carried a high
resale value, Hoffer said. The cars in the GM case always took big hits in the used market, even before the ignition switch issue. “They’ll have a tough time proving diminution of value,” he said. (Used Car News reporter Ted Craig contributed to this story.)
7/25/16 12:21 PM
4 • August 1, 2016
USED CAR NEWS
NEWS BRIEFS FTC Issues Refunds for Bogus Warranties
tions or omissions when selling any goods or services, and includes the The Federal Trade Commission is $4.2 million monetary judgment. Rust Consulting Inc. is the remailing 5,970 refund checks totaling more than $4 million to people who fund administrator for this matter. were bombarded with illegal robocalls and tricked into paying thousands of dollars for bogus “extended IAA Expands Auctions Insurance Auto Auctions recently auto warranties.” The checks, which were mailed announced several major facility inJuly 20 and provide full refunds, are vestments. IAA will expand and improve the result of the FTC’s extensive efforts to collect the entire $4,255,209 three locations in Texas: Corpus judgment entered against the defen- Christi, Houston and McAllen. IAA Corpus Christi underwent an dants Fereidoun “Fred” Khalilian and his company, The Dolce Group expansion, and now covers approximately 12 acres. Chosen for expanWorldwide LLC. The FTC’s June 2010 complaint al- sion based on space demands and to leged the defendants, doing business assist in potential future catastrounder the name My Car Solutions, phe (CAT) situations, the enhanced conned people into paying thou- location was officially operational sands of dollars by leading them to as of May 1. In line with IAA’s envibelieve that the company was affili- ronmental philosophy, reclaimed asated with auto dealers and manufac- phalt was used in the development turers, and that it was offering to of the new acreage. IAA Houston, the company’s largsell them extended auto warranties. est branch, recently completed a In reality, no one received an actual warranty extension and people who building extension to accommodate tried to get their money back found an additional fourth lane for the live IAA Run & Drive segment of the it nearly impossible. The final court order settling the auction. With over 1,200 units sold FTC’s charges bans the defendants per week at this location, expanding from telemarketing or helping oth- the Run & Drive capabilities and hirers to telemarket, prohibits them ing another auctioneer will further from making any misrepresenta- accommodate the volume in one of
IAA’s largest growth markets. As of July 1, IAA McAllen also opened a new live Run & Drive lane to increase the pace of vehicle sales at the facility and increase capacity for IAA’s growing buyer base. IAA also announced the recent expansion of its branch in Culpeper, Va. The facility now encompasses 10 additional acres of usable property, presenting IAA with increased capacity to enhance operational capabilities. One of six locations in Virginia, the now expanded 32-acre Culpeper facility will enable customers to select from a larger inventory of vehicles with increased convenience, while also providing more flexibility and service to buyers and sellers. The Culpeper site expansion incorporates many enhanced features, including a brand new garage and motorcycle storage area.
CarMax Plans for Fall Growth on Both Coasts
store in New Jersey. CarMax is also hiring more than 130 associates for the company’s second store in the Bay Area. The store is scheduled to open at 44100 Christy Street, Fremont, Calif., in November.
Manheim Adds Retail Solutions Site
Manheim opened its new Retail Solutions Center in a renovated 50,000-square-foot facility in Flat Rock, Mich., to provide Detroitarea dealers with greater access to services that produce retail-ready vehicles. The property was recently transformed to build out the Flat Rock Retail Solutions Center. The remainder of the site will continue to serve as a marshaling operation for several of the company’s clients. To support the Flat Rock Retail Solutions Center, Manheim will fill approximately 75 positions.
CarMax is hiring for two new stores as it expands on both coasts. CarMax is currently hiring more than 40 associates for the company’s new store in Maple Shade, N.J. The store is scheduled to open in September at 531 Route 38 West. This location is CarMax’s second
C R O S S W O R D by Myles Mellor
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
Circulation: Helen Thomas Production: Josie Godlewski, Media Manager Cee Lippens, Web Master & Graphic Designer
Vol. 22 • No. 9 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 firstname.lastname@example.org.
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USED CAR NEWS
August 1, 2016 • 5
Tesla Motors Drops Resale Guarantee
DETROIT (AP) – Tesla Motors has ended its resale guarantee program in North America The program – which began in 2013 – guaranteed that Tesla vehicles would have a higher resale value after three years than premium sedans from manufacturers like BMW and Mercedes. Tesla CEO Elon Musk personally backed the program, saying
he wanted to give buyers peace of mind. Buyers who used Tesla financing were eligible. A Tesla spokesperson said that the program reassured customers in Tesla’s early years when its cars didn’t have a track record. But Tesla sedans are now holding their value even better than the resale value guarantees, so the program is no longer necessary.
Group Defends Devices By Ted Craig
An association of GPS and starterinterrupt providers has rebranded itself as a way to announce that it plans on serving a wider segment of the automotive technology industry. The former Payment Assurance Technology Association now calls itself the Telematics Solutions Provider Association. The main focus remains devices that help buy-here, pay-here dealers and other creditors keep customers current in their payments or, failing that, more easily repossess the vehicle. The TSPA’s board consists of executives from Spireon, PassTime and CalAmp. The group has been very active in defending this technology in the political arena. In 2015, it monitored 70 bills in 26 different state legislatures and one bill at the federal level. Brad Jarvis, Spireon’s chief strategy officer and TSPA president, said they were able to either stop the bills entirely or change the focus to best practices. One of the bills that the TSPA worked on was in New Jersey. Dealer Michael Brill, president of B&B Automotive, joined their campaign and spoke about his experience at this year’s National Alliance of Buy-
Here, Pay-Here Dealers conference. Brill owns several stores in Pennsylvania and planned on opening a store in New Jersey when he heard about the bill. He went down to Trenton for the hearings on the proposed law. What he heard shocked him. The bill, which would have banned the use of payment assurance devices, was based on practices described in a New York Times article titled “A day late in a car payment? Good luck moving that vehicle.” “It would have sailed through because they were so misinformed,” Brill said. He worked with Corinne Kirkendall, Passtime’s vice president of compliance and a member of the TSPA’s board. The bill did make it through the state assembly, the state Senate has yet to take up the bill. Brill said the lack of dealer attention to this legislation troubled him. “I was disappointed that I was the only dealer there,” he said. The TSPA wants more dealers to join its association. The group works to educate dealers that don’t join by presenting at events like the NABD conference. It also meets with consumer advocate groups to create a dialogue. “They need to understand the devices,” Jarvis said. C
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6 • August 1, 2016
USED CAR NEWS
Store Defrauds Banks
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The manager of a now-defunct New Jersey used-car dealership and two co-workers have pleaded guilty in bank financing scams that netted $1.4 million in fraudulent loans for luxury cars. H e c tor Marquez, the general manager of D.I.B Leasing in Teterb o r o , pleaded guilty to Hector Marquez first- de gree money laundering and seconddegree misconduct by a corporate official. Marquez also pleaded guilty to second-degree insurance fraud in a separate indictment involving a $139,000 Bentley purchased at his dealership and later torched and reported stolen to an insurance company. The state has agreed to recommend a sentence not to exceed 16 years in the dealership case. In the insurance fraud case, the state has agreed to recommend a sentence not to exceed seven years, to run concurrent to the first sentence. Marquez’s sentencing is scheduled for Jan 20, 2017. “The lengthy prison time he faces should serve as a deterrent to anyone who thinks this kind of fraud is a path to easy money,” said Acting Attorney General Porrino. Marquez is the third defendant to plead guilty in the D.I.B. Leasing case. The dealership’s finance manager, Paul Russo, pleaded guilty to second-degree money laundering and second-degree misconduct by a corporate official. The state has agreed to recommend a prison term not to exceed 10 years, when Russo is sentenced on Sept. 16. The dealership’s title manager,
Lisa Ghobrial, recently pleaded guilty to third-degree misconduct by a corporate official. The state has agreed to recommend a threeyear probationary term when she is sentenced on Sept. 16. The trio, along with a loan applicant assistant, a bookkeeper and the owner of the dealership, were all charged in connection with the conspiracy. Prosecutors said the defendants created fake employment records, inflated incomes and supplied false pay stubs and fictitious employee verifications to dupe banks into approving auto financing for customers whose income levels did not qualify them for loans on the pricey vehicles. Four of the loans were taken out in the names of customers who had submitted personal information to apply for financing but ultimately did not buy cars from the dealership, prosecutors allege. The fifth loan was in the name of a person who had never been to D.I.B. Leasing or applied for a car loan there, prosecutors alleged. The loan money obtained from the banks was for personal benefit by the various employees of the dealership, prosecutors said. The remaining defendants have all been indicted on charges of conspiracy and money laundering in the first degree and with a seconddegree charge of trafficking in personally identifying information pertaining to another person. Those defendants are: • Patsy Galasso, owner of D.I.B. Leasing; • Jennifer Perez, who assisted with loan applications; • Michael Ricciardi, who did bookkeeping for the dealership. Galasso and Ricciardi are also charged with second-degree identity theft, and 62 counts of theft by deception – two in the second degree and 60 in the third degree. Galasso is also charged with second-degree misconduct by a corporate official.
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8 • August 1, 2016
USED CAR NEWS
DEALER LIFE INDEPENDENT DEALER TRAVELS FAMOUS ROUTE FOR BIRTHDAY By Jeffrey Bellant
Some people celebrate their 60th birthday with a cake and a family party. But independent dealer Guy Strohmeier instead went on a month-long hike from the French Pyrenees to northwestern Spain to mark his six decades. Strohmeier, owner of Guy Strohmeier’s Auto Center in Lakeport, Calif., couldn’t figure out what to do for his milestone birthday. Then his wife Sandy watched a movie called “The Way,” about a father who takes a pilgrimage along the Camino de Santiago in honor of his son. The trail, also known as the
Way of St. James, was a route of pilgrimage going back to the Middle Ages that people took to visit the shrine of the Apostle James at the Cathedral de Santiago de Compostela in Galicia, Spain. His wife told him about the movie when he returned from auction and made him watch it. “She said, here’s what you need to do,’” Strohmeier said. “’Why don’t you call (their son) Daniel and see if he wants to go?’” Daniel Strohmeier had just recently left the military and was attending school in New York. He accompanied his father for 15 days of the 33-day hike. “I did the rest by myself and all the other people
along the way,” Stroheimer said. He started an April 24 and finished on May 25 and took three days off in between to rest. It wasn’t a spiritual journey as much as a vacation and time with his son, Strohmeier said. He started at the Pyrenees in France at a place called St. Jean Pied de Port, which hundreds of people use as their starting point each day. Strohmeier is not a regular hiker. Before this trek, the longest he had ever hiked was 10 miles. But on this trip, he averaged about 18 and-a-half miles a day.
“I carried the backpack the whole way,” Strohmeier said. “I carried a change of clothes, a light sleeping bag, rain gear if needed and a pair of flip-flops to relax.” The trip brought other challenges, including a painful sprained ankle and a pair of kidney stones. Fellow travelers helped each other out during the journey. “People would share blister packs and I would share some ibuprofen or someone would share some kinetic tape for my ankle,” Strohmeier said. “The saying is, ‘the Camino provides.’” Travelers who want to sleep in a tent can do that, but along the way there are numerous towns with hos-
tels and albergues (shelters) to stay. “You pay so much and stay the night,” Strohmeier said. “You might stay in a hostel with 10 people or you might stay in one with 100 people.” A typical day on the Camino was about $12 for the hostel, $12 for food and maybe $6 for drinks, Strohmeier said. One of the things that made the trip so special was the people he met along the way. “You meet people of every country, every nation and every language,” he said. “You might walk alongside someone for a couple of days and then see them five days later or eight days later. You might have dinner with them and ask them how the day went.” He walked with the young and old. He walked for two weeks with one family from Leon, Spain, who’s children were 3, 5, 7 and 11 years old. The oldest person he saw was an 84-year-old man who was traveling the route for the third time. He also got a potential sale along the way. “I met a guy who is going to be flying to the U.S. to buy a car from me because he wants a particular car,” Strohmeier said. “But I have a dozen new close friends.” Strohmeier admitted it was very emotional when he completed his 550-mile journey. “When you get to the end, there are literally hundreds
of people who are also com- days, you can get to Finising in, finishing (their trav- terre, which is what they els),” he said. “So it’s emo- call ‘the end of the world,’” tional, tearful and joyful.” Strohmeier said. “I stopped
There’s a place where you take a rock and drop it off at the foot of a cross, as people lay their burdens and prayers down, he said. The traditional endpoint is Santiago de Compostela, but there is an extended route travelers can take. “If you walk three more
at Santiago de Compostela. I figure I’ll take my wife back to hike those three days.” Strohmeier has lots of memories as he took about 700 pictures along the way. “And it was a great way to lose 14 pounds,” he said.
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10 • August 1, 2016
USED CAR NEWS
Feds Claim Fiat Chrysler Inflated New Car Sales
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DETROIT (AP) – Federal prosecutors are investigating allegations that Fiat Chrysler violated securities laws by getting dealers to falsely report sales of new cars in order to inflate the company’s numbers. The company confirmed that it is cooperating with investigations by the Justice Department and the Securities and Karl Exchange ComBrauer mission. The probe apparently stems from a lawsuit filed in January by the Illinois-based Napleton dealership group alleging that competing dealers were given thousands of dollars to report false sales. The group alleges that an FCA executive offered Napleton $20,000 to falsely report sales of 40 new vehicles. The lawsuit also alleges that the false sales give the appearance that FCA’s performance is better than it actually is. The Italian-American automaker with U.S. operations based in Auburn Hills, Mich., has reported 75 straight months of year-overyear sales increases since it left bankruptcy protection in 2009, a lengthy string for any automaker. The SEC and Justice Department in Washington would not comment on the probe. FCA’s statement says that it records revenue in its quarterly and annual financial statements based on shipments to dealers and
customers and not on reported vehicle sales to end customers. But the statement doesn’t address the company’s monthly sales reports. The Napleton lawsuit alleges that a competing dealership reported 85 false new vehicle sales and got tens of thousands of dollars in return. It also says FCA offered to pay the $20,000 to Napleton disguised as co-operative advertising support. FCA has said the lawsuit is without merit and pledged to defend itself. Karl Brauer, senior analyst for Kelley Blue Book, doesn’t think Fiat Chrysler cheated a huge amount to keep its streak of monthly sales increases going. But he said there may have been some questionable sales added to months when the streak was in danger of ending. Exactly what constitutes a sale has been defined loosely in the auto industry for years, said Brauer, who has been suspicious of wide swings from month to month by many automakers. “The term ‘sale’ should almost always be in quotes,’’ he said. The impact of the probe on Fiat Chrysler depends on what the investigators find, Brauer said. If it leads to a tightening of the definition of sales and no widespread fraud is found, then the impact will be minimal. But the company could face penalties if it recorded sales “in ways that not remotely, under any definition, could be called sales.” The company said it confirmed the probe following media reports about it.
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12 • August 1, 2016
PEOPLE IN THE NEWS Manheim Promotes Execs Manheim recently announced the selection of two new members to its leadership team. Effective imme-
Derek Hansen diately, Derek Hansen is vice president of Digital Inventory Solutions, and Angela Babin is vice president of Retail Solutions. Hansen was promoted from the interim position he has held since January. Hansen now assumes Used fullCarresponNews Ad sibility for Manheim’s
digital operations. Prior to his work with Manheim, Hansen was senior director of strategy for Cox Automotive. Babin is responsible for executing a strategy designed to maximize market return and client service. Babin recently joined Manheim after serving in a variety of roles with Pep Boys, Central
MetroGistics Hires Development Director
MetroGistics has announced the hiring of Terry Mollica as director of business development. His duties will include helping to expand MetroGistics’ presence to its growing customer base, using his experience to focus on the remarketing segment. Mollica has more than 18 years of sales and marketing experience, including automotive, captive finance remarketing and consumer industries. Prior to joining MetroGistics, he was the vice president of business development at WeGoLook LLC and the director of business development at Angie Babin DataScan Field ServicParking System, Enter- es LLC. prise Rent-a-Car, AffirMollica also worked mative Insurance SGS Automotive August.pdf 1 7/12/16 and 3:14 for PM Zag.com. North America.
AFC Taps Vice Presidents Automotive Finance Corp. announced that Tiff Arcella has joined the company as vice president of sales and that Devra Callaghan has been promoted to vice president of marketing and business development. Arcella joins AFC with nearly 30 years of experience in sales, marketing and management with an emphasis in technology solutions that serve automotive dealers. Prior to joining AFC, Arcella was with CDK Global for more than 10 years serving most recently as the director of sales. Prior to that, Arcella spent three years in business development with Sutton Ford/ Suzuki in Matteson, Ill., and Webb Ford in Highland, Ind. Callaghan joined
USED CAR NEWS
AFC in 2013 as direc- monthly truck and tor of marketing. equipment auctions.
BSC America Adds Manager
Tommy Rogers has joined Bel Air Auto Auction as general manager of its Clayton Station Auction Center. As part of the BSC America management team, Rogers will also perform regional oversight for Tallahassee Auto Auction, working closely with Tallahassee’s general manager Doug Rodriguez. Clayton Station is located in Edgewood, Md., near Bel Air, and sells run & drive/ scratch & dent rental vehicles, car & truck repossessions and donations. The Clayton Station Auction Center is also home to BSC America’s Specialty Division, which includes power sports, boats, RVs and
Tech Firm Names Team Integrated Auction Solutions LLC (IAS), which recently acquired AWG Simulcast and AuctionMaster Technologies, has announced its new executive team. IAS has chosen the following: •Greg Levi, managing member, IAS • Peter Levy, vice president of sales and marketing •Marc Holstein, vice president of operations, Europe •Matt Addams, vice president of development, AMT •Lisa Feijo, director of support •Chris Rivera, director of product •Nick Pentell, director of implementation Levy will handle dayto-day operations.
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14 • August 1, 2016
USED CAR NEWS
RETAIL MARKETS MASSACHUSETTS
John Perro, owner, Perro’s Auto Sales, Auburn, Mass.: “This company started in 1965. “We have two locations. One’s in the city of Worcester, which we grandfathered out of. It is a service center. That’s where we have an auto body center. We have a dealership and rental company in Auburn, Mass. “We have maybe 80 cars on paper, but not all are on the lot. As far as retailready, we have about 50. “We sell an average between 20 and 25 per month. “In this industry (it’s challenging because) a customer will ask, ‘How can that car be X-amount of money with that many miles and why would it cost more than the same car next to it?’ I say the reason is because the other car has a Carfax that shows this lady pampered this car at the dealership. To me, it’s less money for me to spend (in service). “We service every car be-
fore it’s sold. Average recon is $175 to $200 a car. The average safety check is $175. “We do that work at our service facility. “All the work we do on a car goes to Carfax. “I’m looking to get licensed to do buy-here, payhere. We will do some subprime with lenders that we feel won’t take advantage of our client. “Our average retail price is around $20,000. We also have cars for $8,995, because you get people who can’t afford a lot. “Average model year is 2005 and up. As far as mileage, we’re not really targeting (a certain amount). We’re targeting quality. “We look at (Carfax and Autocheck). Also, we look at Safercar.gov to check recalls, a recommendation from National Independent Automobile Dealers Association and Melissa Otis, our state executive director. Don’t rely on (vehicle history reports) for recalls because they can be a month
Compiled by Jeffrey Bellant
or two behind on recalls. “We carry more trucks than cars. I’d like it to be 8020 pickups, because I could sell those trucks easier. So it’s 60 percent pickups, 20 percent SUVs and 20 percent cars. “One recent car I sold was a 2013 Cadillac ATS all-wheel drive, 3.6 performance. It had 42,000 miles on it. I got $25,000 for it. That was over book value.”
year, we sell an average of 15 a month. “We are 100 percent buyhere, pay-here. Down payments vary. During tax season, people have more of a down payment than they do now. Over the course of the year, I’d say it’s about $2,000. “Average retail price is about $13,900. “It used to be, when we opened up, we’d try to keep term lengths at 36 months. Now that’s crept up, probTEXAS Robert Beck, president, ably, to 42 or 44. But cars Stop ‘N Drive Motors, San have gotten more expensive since we opened up. I Antonio, Texas: “We have one location and remember our plan was to buy a $4,500 car. You can’t we opened up in 2005. “We usually stock about get much for $4,500 now. “The average year is prob40 to 50 cars. We have reably a 2007, maybe a 2008. lationships with local new“Average mileage is going car dealers that have on-site auctions. So we go to their to be anywhere between place and try to outbid ev- 100,000 and 120,000. “My partner’s a good buyeryone else. “We also buy at regular er. He has to shake the bushauction – Manheim auc- es, but he always comes up tions. When we go to the with some good pieces. “We’d always like to get auction, we try to only buy Carolina_Summer-UCNaug1.pdf 7/18/16 more trucks. Right1 now, we new-car trade-ins. “Over the course of the only have one truck, but
that’s because we recently sold a few. Normally, we’d like to have four or five trucks. “Our niche is mainly trucks and SUVs. We have some sedans, because some customers will want a rig with good gas mileage. But guys who work need the pickup truck to work or they need the SUV to carry their kids in. “We’re mainly domestic. We’ll pick up a few imports if we come across a good deal. “Average reconditioning is about $500. We do it ourselves. “We do very little advertising. We do some on Facebook and Google. We also have our website. “Repeat and referral is a big part of our business. We have a CRM tool that we developed years and years ago in-house. We contact customers on a regular basis. “We recently sold a 2008 Chrysler Aspen. It had 8:00 PM 127,000 miles and we sold it for $14,900.”
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USED CAR NEWS
WHOLESALE MARKETS ARKANSAS
Shane Wood, general manager, 71B Auto Auction, Springdale, Ark.: “We’ll have been in business six years this October. We have five lanes. “Business has been good, we’ve done really well. “Volumes have been around 850. It’s about the same as last year – actually, maybe 50 to 75 more per week. “(Conversion rates) are steady in the mid- to upper50s. It’s about the same as last year. Our percentages usually stay about the same. “About 99 percent of our volume is dealer consignment. We also have a few bank repossessions. “We average 300 to 350 buyers (in the lanes). We may have had a 10 percent increase from last year. We draw buyers from Arkansas, Missouri, Oklahoma, Texas and Louisiana. “Dealers’ business is hot and cold. Right now, the new-car stores seem to be doing well. The used-car
stores are struggling. “I know in June (dealers said their) business was off, but it was our second biggest month of the year. So they’re still buying cars. I don’t really understand that. “We have an in-op sale once a month. It’s the second Tuesday of the month. It starts at 8:30 a.m. before our regular sale at 9 a.m. We’ll run 25 to 30 in those sales. “Those sell well. But the price is way down because the price of steel is down. I know a year-and-a-half, two years ago; anything would bring $300 – no matter what it was. Now it will bring $100. “For new-car stores, we tow their in-op cars through the lanes weekly, just because they want that off their books (as soon as possible). “In the regular sale, the average price coming through the lanes is about $5,700. When tax time is strong, “Our last sale of the
month, we kind of do a front-line sale. That’s when the new-car stores bring their aged inventory, so that will bump up the average price to about a $6,700 to $6,800 average. “America’s Car-Mart is based here in northwest Arkansas, so every week, we’ve probably got 10 to 12 different Car-Mart stores buying cars here. That $5,000 to $9,000 car brings more money here than anywhere else, in my opinion. We’ve got several big buy-here, pay-here lots that buy here.”
Jerry Barker, general manager, Greensboro Auto Auction, Greensboro, N.C.: “We just celebrated our 30th anniversary in April. “We have 16 lanes and volumes have been good. “We’re running about 3,500 cars a week. I’m going to say that’s at least 15 percent up from last year. I just think that’s because there’s
August 1, 2016 • 15
Compiled by Jeffrey Bellant
a lot of cars coming back off-lease. Repos are up a little bit due to how well they are funding deals. Credit has definitely loosened up. “Probably 75 percent of our volume is fleet-lease and commercial. “(Conversion rates) have been in the 65 percent range. For this time of year, I think that’s a pretty good percentage. “Dealer consignment is down a little bit. I think a lot of folks have figured out how to recondition their trade-ins and put them back in (to their lots) to sell. So it’s brought (fewer) cars to the auction. “(We have numerous commercial consignors) including manufacturers Ford, Chrysler, Kia, Subaru, Mitsubishi and Hyundai. “We also simulcast our sale through all 16 lanes. We use AWG. “We run about 60 or 70 units in our salvage sale every week. We may have 40 one week and 80 to 85 the next week. So it fluc-
tuates depending on what consignors are running that week. I’d say that’s one of the better percentage lanes. “We don’t have any special sales or GSA. We sell motorcycles in our regular sales, but nothing (separate). We also have a classic car sale we run three times a year. That’s a pretty big deal for us. “Our average price in the lane is about $16,000. That’s probably up about $500 a car over this time last year. “Trucks are hot. They are just unreal. It’s the low gas prices and interest rates are cheaper so (buyers) can finance a larger dollar amount for the same payment. It doesn’t matter whether it’s two-wheel or four-wheel drive. We’re in that mid-market where we can sell both. They’re all bringing pretty good money. “I think the small fourdoor cars and the real subcompacts have taken a hit because of the price of gas being down.”
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16 â€¢ August 1, 2016
USED CAR NEWS
MONTHLY DEALER CONSIGNMENT AVERAGES AVG. PRICE AVG. MILEAGE
Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 YTD AVG:
$5,089 $5,053 $5,262 $5,340 $5,168 $5,075 $5,372 $5,147 $4,932 $4,933 $4,923 $5,017 $5,188
101,988 102,230 101,371 100,507 101,773 102,081 101,084 102,741 104,230 103,050 103,246 101,933 101,558
Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 YTD AVG:
$15,926 $15,878 $16,418 $16,991 $16,769 $16,688 $15,574 $15,645 $15,781 $15,378 $15,604 $15,586 $16,403
103,856 104,162 102,258 100,411 102,292 102,567 106,084 106,512 104,051 105,472 104,319 104,854 102,566
$3,578 $3,529 $3,666 $3,528 $3,373 $3,753 $3,866 $3,809 $3,862 $3,733 $3,753 $3,638
112,752 117,219 117,022 116,329 118,576 116,322 115,209 114,420 113,866 112,994 114,003 114,282 116,483
Jan 2016 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 YTD AVG:
$15,083 $15,336 $17,099 $18,164 $17,793 $17,892 $16,422 $15,521 $14,751 $15,447 $14,721 $16,247 $16,826
77,916 76,665 70,662 70,470 71,166 71,321 75,080 75,338 77,276 75,901 77,756 75,007 72,916
FULLSIZE CAR Jan 2016 $3,954 Feb 2016 Mar 2016 Apr 2016 May 2016 Jun 2016 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2015 YTD AVG:
AVG. PRICE AVG. MILEAGE
CURRENT YTD, THROUGH JUNE 2016
$5,858 $11,336 $11,835 $13,031 $12,498 $12,411 $12,134 $11,543 $11,175 $11,708 $11,412 $11,861 $12,088
109,090 100,101 98,417 95,564 97,343 97,373 98,026 99,066 100,399 98,420 99,303 97,772 97,826
$5,859 109,090 $5,870 109,761 $5,869 109,766 $6,369 107,153 $6,135 107,955 $6,058 108,372 $6,088 108,365 $5,911 109,748 $5,669 111,442 $5,692 109,822 $5,740 109,230 $5,786 109,887 $6,074 108,605
$11,704 $11,502 $11,706 $12,254 $12,083 $11,993 $11,599 $11,352 $11,148 $11,360 $11,331 $11,635 $11,843
105,929 107,400 107,202 105,079 105,813 105,017 105,875 107,247 107,766 106,287 107,086 106,210 106,333
$6,530 118,999 $6,273 121,136 $6,518 120,821 $6,920 119,053 $6,753 119,618 $6,629 118,895 $6,394 120,024 $6,391 120,332 $6,102 122,340 $6,266 120,694 $6,368 119,658 $6,358 120,167 $6,594 119,990
SOURCE: MANHEIM CONSULTING
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USED CAR NEWS
DISCONNECTED JOTTINGS FROM Reflecting on Great Britain’s recent actions to quit the European Union made me think of “The Swinging Sixties,” now 50 years ago. I was
edgy and clean cut, shedding almost any references to the pre-war years of deprivation and class differences. It was an exciting time of change and
• 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
just 18 years old then and London felt like the center of the universe. It would be nice to think that the British could re-invigorate the sense of optimism that pervaded society at every level back then. With the post-war years of shortages, food rationing, bombed-out buildings and drab clothes of the ‘50s, the ‘60s heralded a new feeling of gritty ‘can do’ attitudes. I think it had as much to do with the physical rebuilding of the city – modernism was
challenge, greeting anything new with eager acceptance rather than wary suspicion. Bright, new, stylish buildings and homes were replacing our playground of weed-ridden bombsites. Employment was growing and spending was freer, perhaps still not frivolous but there was certainly a willingness to spend on things that recognized the changing times. My parents bought new furniture, we even got a ‘fridge, a TV and a phone.
Fashions felt like they were changing every week. Gone were the baggy shapeless suits and trilbies and even the leather jackets and jeans of “the Teddy Boys” were shed for new colorful outfits including flowered shirts, even for the office. Young men sported natty outfits and slimfitting suits, pointed toe, winkle-picker shoes replaced the clodhoppers of yore. Cool hairstyles took the place of hats like the workingclass flat cap or the trilby. Hats for men are still a rarity, even now. For the girls, mini-skirts; some so short you didn’t need an imagination. As a teenager, hormones were already out of control without the need for further titillation. Girls wore their hair up in bouffant styles or down with flick-ups at the ends. Brassieres seemed to emulate the bumpers of a ‘57 Cadillac! My twin brother and I had a part-time Saturday job at Liberty’s of Regent Street and took the Tube to Piccadilly Circus and walked up
C R O S S WO R D
Carnaby Street to the staff entrance of the posh department store. Our weekly walk along the Mecca of fashion ensured that we were up with the latest and spent our newly earned money on what was on display. Music thundered out onto the street from every storefront – new music from a new source. Pop groups were taking over the whole music scene and even caused the “British Invasion” over here, led by the Beatles and the Rolling Stones. We used to go to a ‘working men’s club’ in Hammersmith (beer was cheaper at these places and the drinking age was 16 back then) and many of the groups used to appear there for practice and jam sessions – the Stones used it occasionally before their regular gig at The Craw Daddy Club in Richmond. I remember standing next
to Brian Jones in the men’s room. The Yardbirds, Clapton and many others were an arm’s length away. The Kinks’ drummer, Mick Avory, used to drink at our local pub and I went to see The Beatles twice at the Hammersmith Odeon. Muscle cars were the big thing over here for getting around, while in Britain we had Mini Coopers, Ford Anglias and Cortinas. Tuned versions were ‘souped up’ and lots of companies produced high quality versions. The film star Peter Sellers spent a fortune on his Wood & Pickett Mini – it had a finish as good as any Rolls Royce. So much was happening that pushed new boundaries and opportunity beckoned at every turn. I sincerely hope the new position that Great Britain finds itself in promotes the same aspirations to put the ‘Great’ back where it belongs.
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. ____ GTV6, 2 words 6. Classic Lotus sports car 9. Baseball score 11. All set for a race, perhaps, 3 words 14. Ford muscle car 15. Owned by 17. Jeep model 18. “Stop”, “Yield” etc 21. A drive, in slang 23. Car 25. Power____ warranty 27. He releases company news 28. Scarlet or burgundy 29. Saturn model 31. Ford crossover 32. Classic Lamborghini 35. Carpentry tool
August 1, 2016 • 17
36. 0-60 in 3.5 seconds, say 37. Journey and Durango 41. Boxster, Barchetta, etc 42. “Look ____ the hood!” 44. Original manufactured equipment, for short 45. Important time 46. Kia minivan 47. “___ Me,” Withers hit Down 1. Plymouth ____ GT 2. Classic ___ 308 GTB/GTS 3. Go, as a car 4. Floor cover 5. Web site address ending
7. Classic Aston Martin 8. City light 10. Crowd disapproval noises 12. Lamborghini model 13. Sharer’s word 16. Parent of Maserati and Ferrari 19. Antagonist 20. Above 21. Classic Triumph sports car 22. Ace 24. Direction things are going 26. Increase, prices say 30. Maxima and Sentra 32. Dodge nameplate 33. Advantages 34. Luxury sedan from Oldsmobile, also means dawn
Solution to the 7/18/16 1
35. Road, for short 38. Approximately, 2 words 39. Having had a previous owner 40. ___, mean fighting machine 43. Before (poet.)
A M 10
Solution to this puzzle in the 8/15/16 issue. Call 1.800.794.0760 for a FREE subscription.
7/25/16 12:15 PM
USED CAR NEWS
August 1, 2016 â€¢ 18 Advertisers are solely responsible for content of classified advertisements. To place an ad, or for more information, call the Classified Department: 800-794-0760 ext.107
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USED CAR NEWS
August 1, 2016 • 19
AROUND THE BLOCK
Compiled by Jeffrey Bellant
AUCTION HITS MILESTONE
Company Helps Feed Hungry
the grand prize: a $1,000 travel voucher. During its Drive Away Hunger The entire office and lanes were campaign, fom June 13-24, Cox decked out in nautical-themed Automotive companies teamed up decorations, and the staff dressed with Feeding America’s nationwide in cruise-themed attire complete network to reach more than 40 milwith flower leis. lion people through food pantries, Ally joined the celebration, runsoup kitchens, shelters and other ning two lanes at Flint’s annivercommunity-based agencies across sary sale. the country. At the end of the run, Ally gave This marks the 10th year of the away a custom Detroit Tigers campaign. corn hole game, two Detroit TiEach year, team members load up gers chairs and two Tigers hats. as many bags as they can carry and Other featured consignors at drop them off at the nearest donathe anniversary sale included tion bin. GM Financial (open and closed), The drive focuses on food items Chrysler Capital and US Bank. that food banks have deemed mostSALES TEAM: Ally rep Ron Vargo, from left, stands with Nicole Jobson, Flint Auto Auction’s Overall, 2,499 units ran at the needed, which includes canned Ally supervisor; Nicole Grathoff, GM Financial factory manager; and Ally rep Justin Werth anniversary sale, and 1,580 were meat and fish, dry pasta, fruit juices, as they prepare for a sale at Flint Auto Auction. sold for a 63 percent sale. soups and healthy snacks, among Flint Auto Auction is a member other items. In 1953, a gallon of gas would throwing a cruise-themed anni- of ServNet, a group of indepenManheim Statesville collected the run about 20 cents, a brand new versary sale. dent auto auctions from across most amount of food, with 5,312 car cost about $1,650, and Flint Food vendors like the El the United States, and has been pounds donated in this two-week Auto Auction opened its doors Guapo Taco Truck and an ice serving dealers since 1953. period. as Flint, Mich., first dealer-only cream truck were on hand to auto auction. feed customers, dealers could We invite news items and top-quality photos from our readers to be considered for “Around the Block.” On June 22, the auction cel- catch a beach ball to win a pair 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. ebrated its 63-year milestone by of shorts, and one dealer won Fax: (586) 772-9400 e-mail: email@example.com
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20 • August 1, 2016
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22 • August 1, 2016
USED CAR NEWS
Special Advertising Section
Improve Your Customer Retention Easier, Faster, More Profitable Rich or poor – customers like to change vehicles! On a standard retail car sale or even a buy-here, pay-here sale, once that customer leaves your lot, there’s no guarantee they will come back to your dealership to get their next car. They can go anywhere to trade that vehicle. Used car leasing solves that problem! The Lease’T’Own® business model has proven to bring dealerships increased
while doing buy-here, pay-here was 24% – the national average at that time. It wasn’t surprising that he received approximately 24% of the cars back on Lease’T’Own as well. The huge difference between the two models is that 80% of the cars he repo’d with buy-here, payhere went directly to the auction. It wasn’t worth trying to fix them. Of the cars he took back with
customer retention. With used car leasing, the dealer remains the titled owner of the Lease’T’Own® car. The customer can’t go anywhere else but back to YOUR dealership if they want to change cars. Lease’T’Own® dealers are trained on “rolling” customers from car to car and “rolling” cars from customer to customer! You can provide transportation for life to your customers! A large buy-here, pay-here dealer from Texas decided to try out Lease’T’Own®. After being on the program for a few years, he reported some valuable statistics. His average repossession rate
Lease’T’Own®, none went to the auction. 55% of those customers who returned their Lease’T’Own® vehicles came back to the dealership for another car once they got on their feet financially. How is this possible? Because a key benefit of Lease’T’Own® is the flexibility! Your customers know they can return the car at any time, for any reason, without penalty. They know they can come back at any time to get another car. Expectations are clearly explained at the time of the deal and the door for communication is left wide open. Doing Lease’T’Own® and doing it right, will gain you customer’s for life!
DO YOU WANT TO SELL MORE CARS &
Since 1972, 1972, Credit Credit Acceptance Acceptance Since has offered automobile dealers has offered automobile dealers financing programs to help them financing programs to help them sell vehicles to consumers, resell vehicles to consumers, regardless of their credit history. gardless of their credit history. These programs programs are are offered offered These through a nationwide network of through a nationwide network of automobile dealers who benefit automobile dealers who benefit from selling selling vehicles vehicles to to consumconsumfrom ers who otherwise could not obobers who otherwise could not tain financing. tain financing. Credit Acceptance Acceptance is is unique unique in in Credit that enrolled dealers using the that enrolled dealers using the Portfolio program program share share in in the the Portfolio cash flows from the contract, cash flows from the contract, which creates creates an an alignment alignment of of ininwhich terests and is a critical element of terests and is a critical element of its success. its success. One misconception misconception of of the the Credit Credit One Acceptance program is that it only only Acceptance program is that it works for older model vehicles. works for older model vehicles. In fact, fact, it it works works well well with with nearly nearly In any vehicle; many low-mileage, any vehicle; many low-mileage, late-model vehicles vehicles (as (as new new as as late-model 2015) yield the greatest advances. 2015) yield the greatest advances. And, its its Credit Credit Approval Approval ProProAnd, cessing System (CAPS®) enables cessing System (CAPS®) enables dealers to to easily easily structure structure profitprofitdealers able deals with payments customable deals with payments customers can can afford. afford. ers As Credit Acceptance reports reports to to As Credit Acceptance the three national credit reportthe three national credit reporting agencies, agencies, an an added added benefit benefit of of ing the program is that consumers the program is that consumers
can improve improve their their credit credit with with ononcan time payments and move on to time payments and move on to traditional financing sources. traditional financing sources. It is is now now easier, easier, faster faster and and more more It profitable than ever to do busiprofitable than ever to do business with Credit Acceptance. ness with Credit Acceptance. A significant significant benefit benefit is is eConeConA tracting, which enables customtracting, which enables customers to to sign sign contract contract documents documents ers electronically. electronically. This eliminates eliminates the the need need to to send send This contract packages via courier, savcontract packages via courier, saving dealers money and considering dealers money and considerably reducing reducing funding funding times. times. ably Many deals are funded the Many deals are funded the same day. Additionally, CAPS® same day. Additionally, CAPS® interfaces with with multiple multiple vendors vendors interfaces (including Dealertrack®) to help help (including Dealertrack®) to dealers easily get applications and dealers easily get applications and leads into the system without duleads into the system without duplicate entry. plicate entry. Credit Acceptance Acceptance has has also also Credit made enhancements to approval made enhancements to approval stipulations to to streamline streamline the the stipulations funding process. funding process. A proven proven leader, leader, Credit Credit AcAcA ceptance paid dealers over ceptance paid dealers over $2,065,409,992 in in advances advances and and $2,065,409,992 $202,678,019 in portfolio profit in $202,678,019 in portfolio profit in 2015 alone. 2015 alone. Visit CreditAcceptance.com CreditAcceptance.com to to Visit find out how you can sell more find out how you can sell more cars and and make make more more money. money. cars
The only finance company you can’t afford to live without! To learn how, call 800-873-0512 or visit CreditAcceptance.com
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7/21/16 6:17 PM
USED CAR NEWS
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August 1, 2016 • 23
Control the Approval Process, Sell More Cars Software technology continues to evolve in ways that make our lives so much easier. Whether you are using a computer, tablet or phone, the software that powers these devices is really where the magic is. DealerCenter is webbased software offering a comprehensive dealer management system (DMS). DealerCenter’s software technology is taking the traditional DMS to the next level. By combining the basic inventory, customer and paperwork management with lender decision automation, dealers can use DealerCenter to get loan approvals 24/7/365. This powerful software has been developed and perfected over the past fifteen years. DealerCenter has worked closely with Westlake Financial Services to create a one-of-a-kind program that enables dealerships to control the entire lending approval process. By simply running a customer’s credit report, the system can use
the information to automatically make a lending decision. Dealers can work the deal by changing down payment, term, monthly payment or even adding a co-buyer and the system will instantly update the decision. For a dealer, that is huge! Most dealers are open evenings and weekends when many banks are not available to process loan applications. With the ability to use this software to structure deals and get approvals instantly, dealers are no longer handcuffed by banker hours. Dealers can sell cars and secure financing at any time with this technology. The next update is coming soon and will enable dealers to extend this technology to their customers via their website. If a dealer has all their inventory listed on their website, a customer will be able to enter their information and the system will show them all of the cars they qualify for. This technology will help dealers sell more cars.
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7/25/16 12:00 PM
24 • August 1, 2016
USED CAR NEWS
Special Advertising Section
Keys to Future Dealer Success: Customer Service & GPS Technology Did you know that the most frequent month of auto loan default is the 4th or 5th month after loan origination? Or that 1 in 8 car dealers in California have sold the same vehicle to at least 3 different car buyers? Delinquencies and defaults are very much a part of the buy-here, pay-here world, so several steps must be taken to ensure that these vehicle collateral losses are prevented or don’t cut into business profits. With the trending rise in payment delinquencies and collection costs, more and more buy-here, pay-here dealerships may soon run the risk of losing even more profits. One of the smartest strategies that car dealers can adopt today to avoid delinquencies, bad debt, or charge-offs, is to invest in GPS vehicle tracking. Having a GPS device embedded within a vehicle enables you to locate a car within seconds, without requiring you to rely on a third party repo agency. There’s a reason why
Spireon’s GoldstarGPS is the best GPS tracking provider in the industry. Our reputation for being the industry standard is demonstrated by our 3 million active vehicle subscriber base and our community of 8,000 dealer customers nationwide who use Spireon GoldstarGPS. So how exactly do we do excel as an industry leader in GPS solutions? Two ways: Quality Focused Customer Service We invest and continually improve our customer service support, so our Spireon GoldstarGPS will never stop working for you. Our customer service support is always available 24/7, 365 days a year. We have multiple sites throughout the US to meet demands in all US time zones and all are fully staffed with tech leads and supervisors to ensure service quality. With service coverage that’s immediately available, you won’t waste time just
trying to reach out. All our representatives are trained on the technical aspects of the product as well, so you’ll be speaking to experts w h o c a n h a n d l e yo u r issues. In the off-chance that your hardware is not fully functioning, our representatives help you get back on track over the phone to ensure that your vehicle locates are coming through. Additionally, we offer the industry’s first express installation service with certified, trained technicians available to complete GPS device installations within 24-48 hours at your dealership. 9 9. 9 % P e r f o r m a n c e Guarantee backed by our innovative technology Our 99.9% performance guarantee is backed not only by our top-notch customer service, but also by our innovative technology in CDMA coverage and business intelligence. Our GPS device and solution gives you the following:
Faster & Accurate Locates CDMA provides better network access and data speeds that give dealers more accurate and reliable vehicle locates. Real-Time Tracking You won’t have to rely on vehicle data that’s been generated days or hours ago. CDMA offers a much more reliable connection, and keeps dealers connected to their collateral in real-time. Wider Reach & Coverage: By choosing Spireon, you’ll be choosing a GPS provider that gives you network coverage in four of the major network carriers, including Verizon, T-Mobile, Sprint and AT&T. We’ll be able to connect your vehicles in the most remote or rural areas of America. Future-Proof Devices With the incoming sunset of 2G GSM connections, devices operating on 2G will no longer be working in 2017. Our CDMA-enabled
devices are made to operate for the wireless advances of tomorrow. Dealers who purchase 2G or 3G GPS devices from other providers will be forced to invest in new devices within the next year or two. Scalable Big Data Platform When you need information on vehicle locations and patterns, big data insight will prove to be useful. Our proven cloud platform is able to collect millions of data points and support over 3 million vehicle connections, so you won’t have to worry about our technology breaking anytime soon. For more information on how you can protect your vehicles with the best GPS tracking provider in the industry, call Spireon at (888) 517-3630 or visit www.spireon.com.
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8/22/16 8:20 PM
USED CAR NEWS
Empowering Dealers with Flexible Fees Jonathan Neubauer, President & CEO, Vehicle Acceptance Corporation
The economy is constantly changing. The market lives, breathes and evolves over time. Your ability to change is critical to your success. A single option fee schedule may not fit your business as well as you would like, though that is what most floorplanners offer. Do you wish you had a better fitting option based on your cash flow, the time of year, or on a unit by unit basis? VAC offers 4 programs that are always available. The No Curtailment, 5% Curtailment, 10% Curtailment and No Interest
August 1, 2016 • 25
Special Advertising Section
Floorplan programs put the power of choice back in your hands. Pick the plan or plans that work for you, and to use them as conditions change to maximize your profitability. Select between these 4 different programs on a unit by unit basis for the lowest possible floorplan fees, while still maintaining sufficient cash. Floorplans Simplified is what VAC is all about. Better options allow dealers to improve profits, and the opportunity to work with a floorplan company that provides exceptional service. Learn more at VACorp.com/SignUp or call 1-888-571-7092 for more information.
Strengthen Lender Partnerships with Best-In-Class VSC Coverage Trying to convince a customer of a vehicle service contract’s (VSC) value is no easy task. Not long after you get a customer to agree to a monthly payment, you’re potentially risking the sale by offering products that increase the monthly figure. It’s a challenging catch-22! Fortunately, the solution is simple – offering a VSC to 100% of your customers 100% of the time. In doing so, relationships with lenders will improve too. How, you ask? It starts with working with your lenders to ensure that every deal has a back-end allowance to account for a VSC. It may take some negotiation and you might have to ask more than once, but lenders understand that the top reason customers default is because of unexpected repairs that hinder a customer’s ability to make their monthly payment. Remind lenders of this and leverage a company like GWC Warranty that has been in business for 20-plus years and paid more than $375 million in claims. This assurance will help lenders
understand that the advance you’re requesting is to accommodate a product that will ensure they continue to get paid. And when it comes to negotiating with customers, having this back-end advance as standard practice helps you build it into the initial monthly payment discussion so there are no surprises once you hit the F&I office. Simply put, adding a VSC onto every deal benefits everyone involved. You stand to get better advances from lenders, your lenders experience fewer defaults and your customers are protected from unexpected repair costs. Factor in the repeat and referral business generated by those happy customers, and it’s clear to see the vast array of benefits from putting a VSC on every car you sell.
GOLDEN W i t h b e s t - i n - c l a s s s e r v i c e , G WC Wa r r a n t y ® h e l p s dealers sell more cars by giving car shoppers the confidence to become car buyers. BECAUSE A CONFIDENT DEALER GENERATES CONFIDENT BUYERS Start your partnership at GWCwarranty.com/Dealers
FOR INDEPENDENT DEALERS
© 2016 GWC Warranty is a registered trademark of GWC Warranty Corporation.
7/22/16 12:12 PM
26 • August 1, 2016
Special Advertising Section
Get More From Your GPS In the subprime lending space GPS devices are commonplace. If you’re in the space, you’ve likely used one sort or another. As these devices have been in the market for well over a decade, the “newness” has long worn off and we can truly evaluate their effectiveness. Nearly everyone would agree that a reliable GPS device improves repossessions and recovery efforts. They are relatively inexpensive, simple to install and easy to use. GPS should allow an agent to recover a vehicle faster. Vehicles recovered quickly are generally in better shape, cost less to recondition and less to recover. Additional tools from device providers can enhance this process as well. What is less clear is how much GPS alone can help with collections. Enhancing GPS devices with collections technology improves collections in a variety of ways. A recent study conducted by Leedom and Associates evaluated the impact of automated collection tools. The study covered more than 12,000 loans representing more than $100 million in receivables. In the group of accounts with an automated collection technology
device on the vehicle, nearly 94% of accounts made their payment within 30 days. Keeping almost 94% of accounts current within 30 days not only represents actual revenue for the creditor in terms of loan payments, but also the percentage of consumers not slipping into a repossession status. Many customers are yearning to get more out of their GPS devices. By combining collection technology with GPS, the lender has a solution that facilitates improved customer payment performance with the added benefit of GPS location features for accounts that require it. PassTime allows customers to get more out of their GPS. Collection technology added to GPS helps collectors take on more accounts, keep delinquencies down and still offer the benefits of GPS. PassTime’s entire product suite is available for purchase at 877-PASSTIME or email sales@ passtimegps.com.
USED CAR NEWS
CAR Financial Offers Proven Experience Underwriting, control of accounts, recovery of collateral, mitigation of risk….All of these should be big concerns for every dealer. Making consistently good returns in the buy-here, pay-here segment has always been tough, but in today’s world of competition, increased regulation and fluctuating wholesale values, diligence and persistent adherence to a proven plan should be at the top of the list for all dealers! In order to overcome the market concerns posed by today’s buy-here, pay-here industry, dealers must have a relationship with a finance company that will help them follow a more secure path. Dealers should be looking for a company that has been in the market through ups and downs and can help guide them through the pitfalls of crazy market swings. To find a financial relationship that meets these criteria, the dealer should look deeper than simply seeking the company that offers the highest possible up front advance. Dealers should find a company who helps mitigate risk while achieving the dealer’s short and long term finance goals. That finance company should have proven experience and longevity in a variety of market climates, strict compliance policies and a desire for shared success. CAR Financial is that company.
CAR Financial has a proven track record of over 25 years in the auto finance industry and can help you in all economic times by customizing a purchase/service program that meets your needs while providing quality service through a single dealer point of contact that is located near your dealership. CAR Financial strives to understand your day-to-day business so they can structure a program designed to meet your long term goals and objectives. Whether purchasing a stream of payments, purchasing all or part of your accounts outright, or simply servicing your buy-here, pay-here portfolio, the trusted professionals at CAR Financial are interested in working with you to meet your dealership needs. CAR Financial operates in 45 states and is continually evolving its programs to meet the ever changing needs the buy-here, pay-here market. Interested in more information on CAR Financial Services’ programs and services? Go to www.carfinancial.com or call 877-570-8857.
8/22/16 8:22 PM
Work with an
INDUSTRY LEADER who offers you more more expertise, resources & support
NextGear Capital is the industryâ€™s leading comprehensive provider of lending products. Our custom floor plan solutions and unparalleled access to over 1,000 live and online auctions provides the buying power you need, when and where you want it.
Visit nextgearcapital.com or call 855.372.2329 to get industry-leading access, resources and assistance you wonâ€™t find anywhere else!
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7/22/16 1:50 PM
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.
7/25/16 9:31 AM