Used Car News

MISSISSIPPI
Gary Hawkins, general manager, Blount Motors, Calhoun City, Miss.:
“Sales are real good right now.
“We own half a city block. It’s not a big block. We’re in a small town.
“We carry between 60 and 70 vehicles. We retail between 25 and 30 a month.
“A lot of our business is generated from Internet sales within a 100-mile radius.
“We’re very fortunate that most of the independent dealers in our area are not on the Internet.
“That helps us generate a lot of business that we wouldn’t otherwise generate in a small town.
“We’re on Cars.com and AutoTrader.com. Those two Web sites have really increased our floor traffic as well as our sales.
“We use three auctions primarily – Tupelo Auto Auction, ADESA Memphis and Manheim Nashville.
“We really haven’t had that hard of a time finding inventory. Between those three sources, we seem to find enough inventory.
“We’ve tried to reduce our inventory somewhat because of the downturn in the economy.
“We probably didn’t need to. We’ve been able to find everything we needed.
“We primarily stock cars between $5,000 and $12,000.
“Trucks and SUVs are our best sellers. Vans have picked up this spring and summer.
“Economical cars are hard to sell. Even with the price of gas going up, we’re still not moving the smaller cars. The three-seaters are especially hard.
“There’s a finance company just 20 miles up from our lot that buys our paper.
“It’s a recourse finance company called WWC Finance. We send them most of our paper.
“We use a free trade publication called Wheels Plus that is distributed through northeast Mississippi. That comes out every two weeks. We run a four-color full-page ad in that.
“We put all our emphasis on price, warranty and customer satisfaction.
“We give all our customers a six-month/6,000-mile bumper-to-bumper warranty that’s underwritten by the dealership.
“We also give each of our customers a 72-hour complete satisfaction guarantee.
“If they find anything wrong with car in the first three days we’ll buy it back or fix whatever’s wrong free of charge.
“Customers want peace of mind. That, along with a better price, makes them get in their vehicles and drive to our store.
“Plus, we give them $20 for making the trip to our town to cover the gas expense.
“We’re in a small town and we have to find ways to get people to our lot. We’ve been there for 75 years.
“My family started a Ford dealership in 1934.
“I sold the business to the current owner four years ago.
“My son sold an ‘07 Chevrolet pickup recently. We got $11,500. It had 32,000 miles.
“It was a V-8 regular cab, but it had some equipment on it.
“It was a good looking truck and still under factory warranty.”
TEXAS
Blake Ingram, owner, Auto City, Dallas:
“Sales are great. Right now, we’re flat with last year and last year was one of our best years.
“We’re very pleased.
“Dallas has been spared mostly from the downturns on the coasts and the Midwest.
“Our economy has been better, certainly, but it’s better off than others.
“Our problem right now is finding enough vehicles. We could sell a lot more if we could find more vehicles to sell.
“We’ve been buying out of Florida and even Florida has dried up. We’re starting to use Manheim Online to branch out more.
“We have five stores. We added a store in October.
“Our biggest store carries 100 cars. The rest carry about 40 cars.
“Down payments are really strong.
“We haven’t seen a big downturn in that. We have two tiers – a high-end tier and a low-end tier.
“The high-end tier is close to $2,000 down. The low-end tier is closer to $700, $800 down.
“The low tier is a typical buy-here, pay-here car, between $4,000 and $6,000. The high tier is $6,000 to $12,000.
“We call our high-tier store the largest unauthorized independent Cadillac store.
“We sell a lot of luxury cars. We don’t sell a lot of trucks or SUVs.
“Those would do well in the market, but we’ve branded ourselves as a luxury car store.
“The lower tier is whatever we can get.
“The higher tier store is a generator of inventory for the lower end store through trade-ins and repos.
“We use GPS units on all the high-end units and starter-interrupts on all the low-end units.
“The starter-interrupts have really helped us to keep the delinquencies low. If you stick with the program, it will work.
“But you can’t give the customers a break if they miss payments.
“If you do it, do it and mean it, then it works really well.
“The delinquencies are 95 percent lower. The numbers are really unbelievable.
“The lower end cars turn very well. The turn rate on those is between nine and 12 times a year
“The more expensive cars take a little longer.
“We’ve done a lot of TV and radio advertising. Sometimes things work for a while.
“Billboard is dying off for us right now. We saturated the market.
“We track all of our leads and the number of leads from billboards has fallen off.
“We may move to something else. The message has been told.
“We recently sold an ‘07 Mustang.”

FLORIDA
Tom Hammer, general manager, Manheim Fort Myers, Fort Myers, Fla.:
“Traditionally, the summer market is a little softer.
“However, we’ve seen higher percentages this year than in previous years.
“We run about 500 vehicles through four lanes every Wednesday.
“We also hold a 40 or 50 unit online event sale every other Wednesday (one hour before our regular sale) and recently added an end-of-month toy sale. That sale features motorcycles, boats, jet skis, etc., in our line-up.
“All lanes feature Manheim Simulcast.
“Our attendance is steady, with our Simulcast attendance increasing every week.
“We have a core group of local buyers, including many dealers from South Florida and outside our immediate area. We also attract a variety of large buyers from out-of-state.
“Our customers remain optimistic despite economic conditions.
“Consignment volume is down.
“As vehicles in this area are hard to come by right now, we’re selling a high percentage while running a lower volume.
“Manheim Fort Myers has traditionally been a dealer sale. However, we’re just starting our fleet business.
“We’ve had success with late-model rental and fleet car sales and look forward to future growth.
“We are now working with some factory accounts and hope to develop a future relationship.
“Truck’s and SUV’s have been selling at top dollar, in spite of current economic conditions.
“The right type of vehicles, based on the area and customer type, seem to sell consistently well.”
MISSOURI
Kevin Brown, general manager/owner, Missouri Auto Auction Inc., Columbia, Mo.:
“It’s been tremendous for the past six months here.
“Our dealer consignment has grown. Our fleet-lease business has grown. Our percentages are also up. We’re up in the mid-60s and sometimes in the upper 60s.
“We have three lanes and we average between 350 to 400 units per sale.
“We’re a little bit up in sales percentages from this time last year, about 6 percent to 8 percent higher.
“Our volume has remained somewhat stable, maybe a little bit up.
“We also have an equipment sale, so we try to diversify.
“I look at my business in three different areas: the dealer business, the fleet-lease business and the equipment side.
“If one’s down, I’m hoping the other two will pick it up.
“For the equipment sale, we’re selling items from government agencies, construction companies and other places.
“We’ll sell anything from a bucket truck to a dump truck to a tractor.
“On average, we’ll have about 85 pieces in those sales. We’ll sell about 70 to 72 percent.
“Those sales are once a month. I’ve been doing that for about six or seven years.
“At our regular sales, we’re averaging about 275 bidder badges per week. That’s about 50 bidders more than where we were this time last year.
“Most of our dealers are coming from the St. Louis market, the Kansas City market and our local markets.
“Our new-car trades have gone up heavily. Our local stores have done well.
“Between the new-car trade volume growing and our fleet-lease growing, our sales percentages and bidder-badge counts are up.
“We’re also fortunate enough to sell for Remarketing Services of America and Santandar.
“Our average selling price is probably in the upper $4,000s, maybe even higher than
$5,000.
“That’s up by about $800 from this time last year.”
OKLAHOMA
Mike Clopton, general manager/partner, Oklahoma Auto Exchange, Oklahoma City, Okla.:
“Actually, sales are going well. We’ve only been open five years, but we just had the best May we’ve ever had.
“We have three lanes here, which is not enough, but it’s what we have.
“But we’re running 625 units a week. We had 650 recently.
“It makes the sales a little too long, but that’s how we do it.
“Our average price is about $3,800 for the year.
“We recently sold 62 percent overall. Our fleet-lease sold 68 percent. Our percentages are higher during tax season, obviously.
“So if we can sell more than 60 percent in May, that’s good for us.
“We’d like to get more fleet-lease and we feel like this a good place for people to bring their fleet-lease units.
“We’ve grown over the last year. Our income’s up about 6.5 percent.
“We get a couple of hundred dealers in the lanes each sale.
“It’s grown more from this time last year.
“We’re starting to get more cars out of Wichita, (Kan.) and we’re also starting to draw in buyers from Wichita.
“A lot of new-car stores are retailing stuff they used to take to auction. However, I don’t see that as a negative.
Heck, if that car would bring $4,000 at auction but that dealer can get a retail buyer to purchase it for $5,000, that makes them stronger.
“It may cost me a car, but in the long run, it’s in my best interest.
“Because the stronger dealers are, the stronger we are.
“The car business may be difficult, but just because it’s difficult doesn’t mean you cannot succeed. It doesn’t mean you can’t do well.
“These times have motivated us and motivated our staff.
“We’re not going to sit around just talking about how bad things are.”

ARKANSAS
Gordon Hughes, president, Hughes Auto Center Inc., Midway, Ark.
“For me, sales are still very slow. There was some uptick at the start of June. We had more traffic than probably in all of the previous three weeks combined.
“I’m real small. It’s just me and a couple of part-time people. I only keep eight or 12 cars. I’m down to seven. I’m not able to replace the cars I sell with what I want at the prices I want. I went to Manheim Missouri the first week of June and logged onto Manheim St. Louis and Kansas City. I just couldn’t find what I needed.
“My average price is in $11,000 to $12,000. I’ve got a couple of less expensive units.
“I don’t do any buy-here, pay-here. When my cars are sold, they’re sold.
“I work primarily with two banks. If customers have a bank they want to work with, I’ll do that.
“U.S. Bank has been my best creditor lately. I work with a couple of local banks as well.
“I’m pretty much a family car dealer – four-door sedans. I try to buy units that have some eye appeal, that aren’t totally bland. But our market is 90-percent cars, mostly mid-size cars.
“It is rare that I ever have anything bigger than a half-ton truck. I only have one truck on the lot right now.
“The only changes I made when gas prices went up is I was selling some mid-size SUVs – Jeep Liberties, Ford Escapes – and the market dropped really bad on them. I got burned on a couple of those and I haven’t replaced them.
“I keep nice stuff. I don’t sell anything that doesn’t have a clean title. I run AutoCheck vehicle histories and conduct a complete and through inspection of every vehicle on the frontline. We put a three-month warranty on all vehicles that don’t still have a factory warranty. We lay the inspection and service sheets on the dash of the cars so people walking the lot can see them.
“I do almost no marketing. I used a local auto magazine that covers a large area. I usually run in that once a month, usually a quarter page. I’m out in the country. We have something of a following. We’re three cars back with some folks who live quite a ways away. They’re mechanic and next-door neighbor both recommended me.
“For about 12 years, I ran a very busy shop with a certified technician. The last one was here for about eight years. He physically wore out. He wasn’t that old, but he’d been doing it for many years. He retired and went to work for a parts store. I decided not to replace him. I still do regular service for my loyal customers, but I don’t try to get any new business.
“I recently sold an ‘05 Chevy Cobalt with 36,000 miles for $7,300. I also sold an ‘06 Toyota Rav4, one owner and all-wheel-drive, with 30,000 miles, for $17,900.”

PENNSYLVANIA
John Kyner, Kyner’s Auto Sales Inc., Chambersburg, Pa.
“I’ve been in business a little over 40 years. I was 19 years old. I had been working for a used-car dealer in high school.
“We carry between 300 and 400 units at one own location. Before the economic downturn, we probably handled between 600 and 700. We retail between 50 and 60 units a month. We’re also a wholesaler. Everybody I know who strictly wholesales is really suffering now. At one time, I had eight buyers on the road. Now, I have three.
“We get our vehicles from new-car dealers. About six months ago, we started going to the auctions and buying vehicles over the Internet. I was very skeptical of the Internet. But actually it’s worked out very well. It’s so much easier to locate vehicles online. It’s made the world a lot smaller place to do business in. That has really helped us.
“Condition reports are more accurate than I expected. From what I’ve seen so far, I’m getting a better car than what I expected. The descriptions are just a little harsh.
“We carry more trucks and SUVs than cars. The biggest reason I started going to auction and looking online is I couldn’t find trucks when gas prices started going down. We carry more domestic trucks and more foreign cars.
“We do some subprime deals. We haven’t gotten into buy-here, pay-here. We’ve actually found some new lenders. We’ve had to do things this past year that we’ve never had to do before. We just have to work harder.
“We’ve found more lenders. We didn’t have to search very hard before. There were so many credit unions out there that were buying subprime contracts. Everybody was in the subprime business. But as soon as they saw what happened to subprime housing, everybody wanted out.
“We do everything right here except paintwork. We have an 18-bay service shop with four techs. I had six at one time. We do a lot of outside work. We certify our own vehicles. We do a 130-point check.
“Our average age is two or three years old. Our average price is $14,000 or $15,000. We’re handling a few more inexpensive cars than we used to. We’re going after that market because we have to.
“We run radio spots and do some print. We have a Web site and we’re on AutoTrader.com and Cars.com. We spend a fair amount of money trying to get our name out.
“We’ve cut our advertising and marketing some because of the decline in business. But we’re still aggressively seeking buyers. We can’t sit here on the sidelines.”

NEBRASKA
Dennis Bennett, general manager, Lincoln Auto Auction, Lincoln, Neb.:
“Things have been good here. Very steady.
“We have four lanes and we’re running anywhere from 280 to 380 units. We’re off a small percentage from this time last year.
“That’s the result of a drop in dealer consignment. New-car dealers are selling less and keeping more of their trades.
“We’re still averaging in the mid-60s to high-60s for conversion rates.
“Overall, we’re selling a similar volume with fewer consignments than last year.
“People definitely need cars, though.
“We’re getting about 250 to 300 dealers in the lanes each week.
“That (figure) is up a little bit from this time last year.
“Those dealers are coming from several different states; Nebraska, Kansas, Iowa, Missouri and South Dakota. I’ve got a guy coming from Illinois and I also have a guy that comes from Arkansas, though I don’t see him as often as I used to.
“I’m seeing dealers here that I hadn’t seen before. They are seeking new markets.
“Dealers are just saying that retail business is hot-and-cold. There’s not much consistency or predictability. I’m not seeing more franchise dealers in our lanes, but more of them are purchasing online. More of the franchise dealers I speak with are spending a lot more time online trying to find products they need.
“Probably about 15 percent of the units I run are fleet-lease. I think that’s up just a tick because we’ve had a few account changes.
“The total volume is about half fleet-lease and half repossessions.
“We tried to get a salvage sale going, but it just hasn’t gelled.
“We have an independent-only lane where the independent dealers can consign whatever they like. We gave them a highlighted spot.
“In Nebraska, we don’t see the highs and lows that other states may get (because of the economy).
“Other than volume being a little tougher, everything else seems to be pretty steady.
“Who knows what the bankruptcies (General Motors and Chrysler) are going to bring?
“Our other concern is the ‘cash for clunkers’ bill, HR 1550. I just think it’s bad from every perspective. There are a lot of secondary people that can be hurt by that.
“But HR 1606, which is a similar bill (providing) just a credit for new-car purchases, makes more sense.”

SOUTH CAROLINA
Jimmy Rawls, owner, Rawls Auto Auction, Leesville, S.C.:
“The market is strong. The prices are good, very good.
“Supply is starting to dwindle, however.
“We run six lanes and we’re running about 700 units per sale. That’s about the same amount as this time last year.
“This May and June have been typical of last year and previous years. It seems to be the same every year.
“We’re selling about 70 percent of our units. We’re on target with the way it was last year.
“One reason is we deal primarily with finance companies and banks – also dealer-to-dealer, of course. But I think what happens with the banks is that, in the first part of the year, they start working on those accounts that are uncollectable. They are just not going to pay. This was a higher-than-normal number of people this year. (So that leads to a higher number of repossessions.)
“Our (independent) dealer units are doing pretty good. Most of the dealers who bring cars are selling them. They’re probably up in the 50 percent to 60 percent conversion rates.
“That’s pretty good, considering the (drop in dealer trades), because dealers are starting to buy in lanes they normally wouldn’t buy from.
“We’re a little behind with franchise dealer volumes. It’s because those dealers are keeping all of the trade-ins they get instead of sending them to auction.
“We’re getting about 400 dealers in the lanes each week. It’s probably a little ahead of last year. We had a pretty good year last year, too, so I’m pretty happy.
“We get bidders from Georgia, North Carolina, South Carolina, a few out of Florida and a few out of Tennessee.
“I’ve also got dealers coming in who haven’t been here before. (One of our sales reps) is on the road and was in Georgia recently. He picked up quite a few dealers who are now coming. They had AuctionAccess, but they had never been here. Now they’re using our auction.
“Some of the guys I’ve been seeing hadn’t been here in a while, but came in because they’ve been working every auction they can.
“The moods of the dealers have been pretty positive. Of course, most of them have complained that they can’t find cars.
“You know, they can find them, they just don’t want to pay over extra-clean book (price) for vehicles.
“The GSA sales have been great. It’s a low-bid deal, but you put that all in the pot (with our other sales) and stir it up, it helps. They’re bringing big money.
“We get a lot of GSA cars and this past week (June 2) we had a big sale. We had about 300 units. Normally, we’d only do a couple hundred a month.
“This was the first big GSA we’ve had recently.
“We mostly get three-and four-year old units with low mileage. I’m talking really low mileage. Some of them are in the 20,000-mile range. We’ll get 2006s, 2005s – some of them with 18,000 to 20,000 miles on them.
“This past sale was mostly cars, though there were pickups and other trucks.
“We run it the first Tuesday each month.
“Our fleet-lease is more repossessions and off-lease. The volumes are about the same as this time last year, but they are starting to dwindle a little bit.
“We also run a heavy-duty truck sale later in the year. We want to get 100 to 150 units in before we hold a sale.
“Our average price overall is about $5,000.”