Used Car News

ALABAMA
Julie Tuttle, general manager, Deanco Auto Auction Inc., Dothan, Ala.:
“We’re running anywhere from 400 units to 600 units right now.
“That depends on when we run our units from Vehicle Remarketing Services. For example, one recent week we ran about 150 of those units. When we have a VRS sale, they will run on our regular sale day.
“We’ll hold our VRS sales based on the inventory levels. For example, in September, we’ll have those sales four out of the five weeks. In another month, I might do it every other week.
“Usually, there’s always a large one at the beginning of the month.
“In terms of volumes, we’re starting to pick up some. I don’t know if it’s a matter of the economy finally hitting its low (and is rising) or if the ‘cash for clunkers’ excitement is over.
“We’re all still kind of waiting around to see what happens (with cash for clunkers). Most of those dealers still haven’t (scrapped the cars) because they are waiting for their payments.
“I know dealers have taken back cars in that clunkers program that would have brought more than $4,500 through the lanes.
“I also think the clunkers program has tied up a lot of franchise dealers’ employees doing paperwork and dealers have to stay at the store and monitor that.
“Now, I would have thought the low-end cars would be bringing more money, but I haven’t really seen the prices jump up that high.
“Most of our vehicles are dealer consignment. It’s probably a 80 to 20 (ratio) between consignment and fleet-lease.
“In the past month, we never went below 50 percent and most were 60 percent.
“We average anywhere from 250 to 350 dealers in the lanes.
“Most of our dealers are coming from Alabama, Georgia and Florida. We’re in Dothan, Ala.
“It’s rare that we get dealers who’ve never been here. Sometimes we’ll have dealers who might not have come for a while and then they start coming every week.
“(Our owner Donnie Dean) sold our Montgomery, Ala., auction to Copart, but we were very fortunate to bring most of those dealers from that sale to our location.
“Some dealers are having awesome months and some can’t believe (how bad it is).
“We have an in-op sale during the first sale of every month. We’re running about 70 each month. Those are selling well.
“Every week has been different, although there is a lot of gloom out there.
“But I don’t see that we’re losing dealers like we did last year.
“It seems there are fewer going out of business compared to last year - and the beginning of this year.
“I think we’re maintaining or even doing a little bit better. “
NEW YORK
Jeff Barber, owner, State Line Auto Auction, Waverly, N.Y.:
“It’s a very hot market, at the moment.
“We have eight lanes here and we run more than 1,100 units week.
“Our volume is up. We’ve been very fortunate. We’ve got some new accounts that we’ve picked up over on our commercial side.
“Our percentage is also up.
“Two recent sales were over 70 percent.
“Literally, we’re getting people from all over coming to the sale. We get them from the Midwest, the Southwest and all over the Northeast. We also get some from the Southeast.
“I attribute the high percentages to the lack of cars in the market.
“Between 800 and 1,000 dealers are coming into the lanes every week. That’s more than there were last year.
“The dealers are complaining that the car prices are so high, but they still keep paying them.
“I am seeing more new-car dealers in the dealer consignment lanes buy more frequently than they ever have. It’s been an evolution.
“My theory is that new-car dealers who became auction-savvy would tend to migrate to the factory lanes or to the commercial account lanes.
“But now, with the product being as thin as it is, I see new-car dealers and their buyers search all of the lanes each and every week. They are still looking at the commercial lanes, but they will look for cars in the other lanes, too.
“We also run two truck lanes every week. We’ve always been noted for our trucks. Our truck consignment has historically been very good because we’re in a rural area. It’s a large part of our business.
“Of course, trucks have come back, too. It’s surprising what trucks are bringing now. It’s crazy money. In fact, a couple of months ago, I went out and bought a new truck for the first time in my life. I bought a new one because the price of used trucks was so high.
“Our General Motors and GMAC factory accounts are very strong.
“Every other week we have a closed factory sale.
“Every Friday, we’ll run about 300 to 400 commercial cars and 70 dealer cars.
“Everything is selling well. For example, we had a dealer bring in a 2009 Scion. It had a $13,900 retail price on the window from when it was still on his lot. I sold it across the block for $14,700. Everybody was talking about it because the $13,900 was still on the window.
“Of course, the lower end cars are bringing a lot of money, too, but that might be because of the ‘cash for clunkers’ program. Nobody has to be a genius to figure that one out.
“What once was a $2,000 car has now become a $3,000 car.
“Our average price overall is about $8,200. That’s probably up $1,000 from what it was this time last year.

MINNESOTA
Troy Vredenburg, owner, CarTime Auto Center, Dundas, Minn.:
“Sales have been good. Inventory is tough to get.
“We carry from a retail price of $3,995 to $25,000.
“Sport-utilities and trucks have been crazy. There’s a real shortage. Last year with $4 gas they were free. Now the pendulum has swung the other way.
“With new-car dealers not selling any new cars until the past 30 days, they had to stay in business. So, they’ve become used-car dealers. We have so much more competition and fewer trades being taken in.
“We also have fewer leases coming back. Two or three years ago, most companies got out of leasing. It’s just been a perfect storm for inventory.
“We’re about 40 percent imports and 60 percent domestics. Our biggest selling segment is $8,000 to $12,000 SUVs. And we can’t get those right now.
“We could get the vehicles, but I’m not willing to pay NADA guide retail for anything.
“We get most of our cars off-lease and then we get a lot from auctions. We have three options here in Minneapolis and then we also go to Milwaukee and Detroit.
“We buy the off-lease vehicles directly from banks. They don’t really have many vehicles. When Chrysler started getting out of leasing, most of the banks did, too. A lot of the off-lease supply will be dried up by next June. That’s what my bank representatives are telling me. It’s going to be pretty much repossessions at that point.
“It’s going to really hurt. We opened our store 10 years ago and it didn’t matter what customers wanted. A customer would say he wanted a van this color and this mileage. You could go out and get 10 of them. Now you’ve got to go and find them.
“The problem is if you go away from what you’ve traditionally sold then you’re getting away from what people are looking for. We’re still trying to get those trucks. But it’s like any other business. You can’t sell when your shelves are empty.
“We have moved more of our inventory into passenger cars this year. You try to get what you can get.
“We also have service. Our service business is up substantially this year. We have 13 service bays. We do anything from an oil change to engine work.
“We haven’t really had a lack of traffic.
“It’s just a question of having the right vehicles.
“Our banks have become a little more conservative about financing.
“The credit unions have tightened up now. We’re still able to place everything, but it’s become tougher.
“We’ve always bought cars off the street. We advertise for that.
“We also watch the Internet and try to buy vehicles we need off sites like Craigslist.
“We recently sold an ‘06 Honda Civic LX with 31,000 miles for $12,998. That was a lease return.”

UTAH
Wayne Reis, owner, Family Auto Center, St. George, Utah:
“Sales in our area have been struggling for the past year. Signs of improvement have been showing up more recently. But a lot of dealers have closed their doors in the last six months. We’re seeing some signs of hope, but now gas prices are going back up, so we don’t know how that’s going to impact everybody.
“I’m encouraged by what I’m seeing. This is the second largest purchase of their lives, but people still need to get from point A to point B. Regardless of people’s circumstances, they still need a vehicle.
“We have cars from more than $20,000 down to $2,000. Most people are looking for vehicles in the $10,000 to $15,000 price range.
“We carry between 40 and 50 cars on our lot. It goes up and down with the sales, but that’s the average.
“With the economy the way it is, people are looking for imports. Toyota and Honda always take the lead with import preferences. With domestics, it’s a matter of personal choice.
“We have been able to help people who have been struggling to get financing. We’re excited about that. We have access to credit union financing, which opens up the lowest rates available. We have a good spectrum of sources that can meet the needs of people with excellent credit and people who are struggling to get financing.
“We do some in-house financing on a very select basis. I’m very mindful of that. It’s its own world and you become your own bank.
“I watch that very carefully. It has some merit if you manage it properly. It’s important to recognize the risk.
“It’s all about money management right now, and time management.
“You’ve got a lot of people who are looking to pay cash. They’ll spend up to $7,000 or $8,000 rather than finance a vehicle.
“We advertise in our local paper. We’ve found that to be very successful for us. We’ve tried various media over the years. We’ve stuck with the ones that are able to get use better results. In our case, the newspaper has done it for us.
“We get our cars from various sources. Auctions are one of them. We get them from trades and off the street as well. It depends on what kind of car we’re looking for.
“We have people looking for special cars and sometimes we can get it from a private owner. Sometimes we can get it from the auction. It depends on the circumstance.
“What you find at the auction these days is that used-car prices have gone up because of the struggles of new-car dealers to stay in business.
“We recently sold an ‘04 Toyota Tacoma. It was a two-wheel drive. Our market is primarily for four-wheel-drive trucks, but it was such a clean truck.”

CALIFORNIA
Tim Van Dam, general manager, Manheim Southern California, Fontana, Calif.:
“Although industry supply has dropped, sales in our region are brisk with Manheim Southern California continuing to offer nearly 4,000 units weekly. This consistency has helped drive dealer attendance this year. We’re seeing buyers from many states, with Simulcast numbers dramatically higher than in previous years.
“We run approximately 4,000 units each week in 15 lanes including OVE.com, 300 units weekly in our Total Resource Auctions salvage sale and 300 units every other week in our specialty auctions (boat and RV sales).
“Attendance is terrific, reaching 3,000-plus dealers during most weeks.
“Buyers come from many states and regions.
“While there is some concern about not having sufficient vehicle inventory, sales seem to be
picking up.
“We’ve established relationships with several new commercial customers; dealer volumes have declined this year.
“Our fleet-lease business is significantly up from last year, surpassing our previous fleet-lease-bank sales volumes.
“We are proud to serve Ford and General Motors at this location
“Because we draw from nearly 25,000 dealers, we’re seeing all makes and models doing well.
“Our Total Resource Auctions vehicle percentages are also performing very well.

MICHIGAN
Carl Miskotten, general manager, West Michigan Auto Auction LLC, Moline, Mich.:
“Sales are excellent. I don’t know of a better time, a better summer, than we’ve had this year.
“I attribute it to a shortage of cars. We’re selling a really high percentage. We’re just pretty fortunate to have plenty of fleet-lease and great dealer consignment.
“We’re running about 1,200 units. We have 12 lanes. Our volume has increased.
“We get a lot of dealers from Michigan. We also draw dealers from Indiana, Ohio and Illinois. We occasionally will bring in dealers from states other than those, but not that often.
“I think the used-car dealers are in a much better mood than they were this time last year, when the gas prices were so high. They were stuck with their SUVs.
“Then we had a terrible winter. But that saved a ton of dealers. They were able to wholesale out of a number of vehicles that they had for so long. People started to buy those trucks again.
“We’re enjoying dealer consignment sales percentages just above 60 percent. Of course, fleet-lease always runs about 80 percent, give or take.
“We’re actually doing real well with fleet-lease.
“The volumes are probably a little better than this time last year.
“Our factory accounts are Chrysler Financial and Suzuki.
“We also have a Harley Davidson Credit sale. That’s doing excellent.
“We’ve been holding that sale quarterly, but we’ll start holding it monthly starting in September.
“Normally, we’ll run 150 units and we’ll sell about 140. With the reduction in production of Harleys, I expect it to get even better.
“Our average price for cars overall is $9,500. This time last year we were at $8,600.”

PENNSYLVANIA
Tim Swift, vice president/chief operating officer, Corry Auto Dealers Exchange, Corry, Pa.:
“The market is very strong. At our Aug. 6 sale, we had better sales percentages in all of the lanes than we’ve had in the six prior weeks.
“The lowest sales percentage lane I had was 56 percent. The highest was 82 percent. We had a PHH promo sale that day, so that didn’t hurt.
“But there’s just a shortage of inventory out there, so when you get some nice cars in, people are buying.
“Consignment volumes were down Aug. 6 but sales percentages were up compared to this time last year.
“About 280 dealers were at a recent sale. Compared to this time last year, it’s got to be up.
“I’m noticing that guys are traveling a lot farther to come here. Our dealers normally come from Cleveland, Pittsburgh and Buffalo. But now were starting to get dealers from Toledo, Ohio, lower Michigan and West Virginia, for example.
“The nice thing is, it’s not like they’re just coming in and buying one week and leaving. They’re coming back every week or every other week.
“The (initial cash for clunkers bill) has taken about 100,000 cars out of the used-car market. It’s not like I would have gotten those 100,000 cars, but give me a break.
“Still, dealers are a lot more upbeat lately. When I was calling dealers recently to get some cars, they were too busy to talk because they had customers.
“There is some activity out there.
“Commercial fleet-lease has been absolutely phenomenal as far as sales percentages. But I think we were off 89 cars in July, from the previous year. I attribute that to the fact that manufacturers quit producing cars.
“What people are paying for trucks and SUVs is unbelievable, though.
“I had a 2006 Chevy Silverado, with 87,000 miles on it recently. It had leather and sunroof, so it was the right truck. That truck should have been an $11,000 truck. It actually brought $13,600.
“To me, $13,600 is 50,000-mile money.
“The only thing that’s doing poorly is absolute junk, a $100 or $200 car. But thanks to ‘Cash for Clunkers,’ that scrap price is going down. Cars that were $200 a month ago, are going for $50.
“Our overall selling price is $4,800, which is up from this time last year.”

INDIANAPOLIS
Harold Drees, owner, H.T.D. Inc., Thorntown, Ind.:
“We have four stores. Our original store is in Thorntown, just outside of Indianapolis, but we branched out several years ago. Sales at all four are still doing well. I can’t complain.
“Thorntown is the smallest store, with 60 or 70 vehicles. The other one in Indiana has 125 vehicles. Then I have one in Wisconsin and a big store in Texas.
“When the market went down, we just bought inventory cheaper. We bought cheaper at auction and appraised vehicles cheaper.
“There’s still people that have money. It’s the same as it was 100 years ago when my ancestors sold horses and buggies. When people need something, they’ll figure out a way to buy it.
“My family started selling transportation in 1870. I just turned 60 and I’ve been in the business since I was in my 30s. It was a secondary business for me. I was in the livestock business, then I ventured into cars because I saw opportunities. At first, I just sold classic cars and options. Then my sons got into the business and we went into the retail car business. It’s worked out pretty well for us.
“There’s a lot of opportunity out there if you just work at it. It’s just like anything else.
“We carry everything. Imports are only 15 percent – Honda and Toyotas. Those are good, reliable cars that get good reviews from ‘Consumer Reports.’ I study the periodicals a lot to find what’s going to be a good used car to sell and not have a customer complain about it. That’s important.
“We sell a bunch of Ford product – Explorers and Rangers. When we get them in, if they’re clean, they go pretty quickly.
“If I finance a customer, I look them in the eye and get their information. I hold the paper myself. We’ve been fortunate. In the last 10 years, we’ve only had to repo four or six vehicles.
“Our prices are good to start with. I have low overhead. It’s just my two sons and me, mostly. We have very few employees. Our service work is done at a place next to our head. That’s why our prices are $1,000 less than our competition. They’ve got 12 people standing in line for a piece of the profits.
“Repeat and referral business has been our backbone. People tell other people when they’re satisfied. There are small complaints, people need a battery or a starter a few months later, we just put in for them and don’t charge to do it. It’s better than a $500 advertisement in the paper.
“We don’t do as much advertising as we did years ago when we first started out. Our stores are in good locations. There’s a lot of traffic driving by.
“I remember when I was kid and my dad sold horses. If a horse didn’t work out for a farmer, he’d just trade it out and give him a different one. That meant they could harvest their crops and have some money to pay him.
“We make all the auctions within a 120-mile radius. My son and I make 17 auctions in a week every week. Some days I make three sales in a day. There’s a lot of opportunity in this Indianapolis area. I’ve been out on the East Coast and you have to travel a long way to get to an auction.
“We do business with all the Indianapolis auctions and try to be non-partial. We also get cars from new-car dealers and we have our trade-ins. Some dealers are holding onto their trades more. But they need a system of checks and balances. They need money and have to sell vehicles to generate a few thousand dollars for inventory control. Even the rich guys sometimes get cash poor and need to get rid of their older vehicles.
“We’ll switch our older cars from one store to the next. If a vehicle has been on one store for a couple months and we switch it to another store, some days it will sell in one day. If it’s a good car, we’ll just make sure we clean it up. If it’s a marginal vehicle, we’ll cash it in at auction, especially if age and miles are against it. But if it’s a decent car, we’ll keep it fresh and market it.
“A lot of times we’ll get cars one day and sell them within a week. I just don’t mark them up a lot. We put the prices right on the vehicles with big block numbers. That helps. We’ll make appointments with people and meet them at all times. It’s usually pretty simple.
“I use my own capital. I don’t borrow a penny and never have. You make better decisions when you don’t borrow money.
“We sold an ‘02 TrailBlazer with 102,000 miles on it July 1. We only had it for two and a half weeks. It sold for $6,475 in a cash deal. The customer was happy and I was happy.”

TEXAS
Allison Roach, owner, Cody Elliot Auto Sales, Haltom City, Texas:
“Sales are slow. It’s a combination of everything right now.
“Our customers are repeat and word of mouth. We’ve been in business for 31 years.
“We carry older models. They go anywhere from the late ‘80s all the way to ‘01. It’s very cheap transportation.
“We do some financing ourselves. We haven’t seen an increase in delinquencies. We work with our customers if we have to. We don’t use any devices.
“We get our cars from wholesalers. That’s still working for us. We’ve seen some drop in their offerings, but not anything significant.
“We try to keep between 20 and 25 cars on our lot. That’s the same as we’ve always done.
“We don’t really have any trucks right now. They’re just not available. Our wholesalers aren’t bringing them to us.
“We don’t do any advertising whatsoever. We’re on a main thoroughfare. We used to do some streamers out front, but after a few weeks, with the wind, they don’t look so good. We just paint the prices and down payments on the windshields and go from there.
“We carry cars with down payments as low as $495. People are still coming up with the down payment. Our customers are working people who need transportation back and forth to their jobs.
“Some of them are struggling really hard right now. They may be a week late here and there, but we work with them.
“We carry a lot of mid-size sedans. We have some smaller cars, but it’s mostly family cars.”