Used Car News

GEORGIA
Kenny Warren, owner, Warren’s Auto Sales Inc., Ellijay, Ga.:
“I’ve been in the car business for 37 years total. My brother-in-law and I started out with a Ford franchise in Ellijay. We sold that in February 1979.
“At that point, we got a used-car business and we’ve been here ever since.
“We’re sitting on the lot with about 50 to 55 units. That’s about the same number as this time last year. I don’t think it’s changed much, year-to-date.
“I’m probably retailing about 18 units per month. We also wholesale some units. I’ll do that with some of the trade-ins I get that I don’t like.
“So we’ll move about 25 to 29 units a month combined.
“A man told me a long time ago the only difference between wholesale and retail is the sales tax. I mean, sometimes I’ve seen that I can bring a car to the auction and get retail prices for it - if it’s hot merchandise.
“We’ve gotten a lot of rain. It kind of knocked the socks out of the car business.
“Outside of that, sales have been consistent.
“I think it’s because of the time that I’ve been here. I’ve got repeat customers still coming back from when I had the new-car dealership.
“They send their children and grandchildren down.
“It’s just having the right merchandise and somebody sees it.
“Most of my cars range from $3,000 to $12,000. I try to buy vehicles with 50,000 to 100,000 miles.
“I’m buying a lot of imports.
“But I kind of fell asleep a little bit on trucks. I’m real low on trucks. I don’t have any full-size pickups and full-size SUVs, and that’s some pretty hot merchandise right now.
“I didn’t stock back up on that and I feel like I’m losing a few sales because of it. Fuel prices came down, but I kept having that fear factor that they would jump back up. I have been afraid that when I go to load up on trucks, the fuel prices will jump again.
“I carry 65 percent cars and 35 percent trucks and SUVs. It probably should be just the opposite, to be honest with you.
“I carry about 75 percent import and 25 percent domestic.
“I do have an in-house detail shop. So I will recon vehicles before they go out on the lot.
“About 25 to 30 percent of our sales are buy-here, pay-here deals.
“I buy the majority of my vehicles from the auction.
“Most of those come from Manheim Atlanta.
“I’ve been going there since the mid-1970s. It’s a very good auction. I feel comfortable with them. It’s been very supportive of me and my company.
“I also sell at auctions. I might go once every couple of months. I’ll have to have something that’s very hot.
“The thing I’ve noticed is that the full-sized trucks down here are the hottest thing selling.
“Still, our economy is a little down. We have a big second-home market here. But that’s slowed down a lot because of the economy. I think we’ll come back quicker than the rest of the country.
“I sold a couple of vehicles the other day. I just sold a 2007 P.T. Cruiser. It had 20,135 miles. I got $11,300 for it.”
IOWA
Clay Winterboer, co-owner, Carroll Car Credit Co., Carroll, Iowa:
“I’ve been in business here more than 13 years.
“Right now, we’re stocking about 20 units on our lot.
“I’m actually carrying a few more vehicles now than I was this time last year.
“We’re in the buy-here, pay-here business and I’ve sold off some paper to get capital so I could buy some inventory.
“The average contract used to be about two years. Now we’re stretching that out a bit. Our average loan is approaching two-and-a-half years. We’re about 130 to 140 weeks on average.
“We’re not selling that many. If it’s a big month, we’ll sell 10 units.
“This tax season has been OK, though.
“Across our frontline, we’re carrying 1998s through 2003 model years, so 2001 would be the average.
“The mileage on the vehicles averages about 100,000. But we have vehicles ranging from 50,000 miles to 150,000 miles.
“Our average retail price is around $6,000.
“That’s gone up over the years, though I don’t think that it’s much higher than this time last year.
“On the whole, we are paying a little more for vehicles than we were this time last year.
“Most of what we carry are cars, SUVs and vans. We’ve only got one pickup.
“I do not carry any imports. That’s partly by choice and partly because of the market. Some of the imports tend to be more expensive, so it takes us out of that market.
“We also have a Toyota dealer in Carroll, but that’s the only import we have. So, from a service aspect, I don’t get those (buyers) very often.
“We’ll do more reconditioning on our vehicles than most. We’ll do the simple stuff in-house. Any of the sophisticated stuff we’ll farm out.
“I’ll acquire vehicles from several sources. We’ll get people to bring them in off the street. I’ve also bought from all of the dealers in town.
“At least three of the 10 vehicles I have on my lot are from the local Ford dealer.
“Of course, I also go to the auctions. I use the three in the Des Moines area. I’ll use ADESA Des Moines, West Central Auto Auction and Des Moines Auto Auction.
“We are seeing a general trend of higher repossessions.
“Lately, we’ve sold quite a few SUVs.
“I recently sold a 1998 Chevy Blazer. It was a repo with 170,000 miles on it. I’d rather not say how much I got for it.”

MICHIGAN
Nathan Simonson, general manager, Grand Rapids Auto Auction, Jenison, Mich.:
“Sales have been great. The market has been holding steady. Our repossessions are selling really well. The subprime cars are also doing well.
“Our sales percentages on our repossessions and leases have been in the 90s. The percentages on new-car trades are still good, from 40 to 60 percent sold.
“We run an average of 150 to 200 fleet-lease repos and an average of 500 dealer units.
“ Usually, we’d have a lot of new-car trades but those don’t really exist (in big numbers) right now.
“We’ve been averaging 500-car sales in total. We’ve got five lanes.
“The inventory is down from this time last year, but the money is up.
“We have great attendance. We’re averaging between 350 to 400 dealers in the lanes.
“We’re in the southwest corner of Michigan, so we pull in dealers from Indiana, Illinois, Ohio and Michigan.
“I don’t hear as much gloom and doom with dealers. I think people are still anxious to see what’s going to happen with the government actions.
“But for us in Michigan and the Midwest, spring is finally starting to break and people are excited about that.
“Americredit runs here twice a month. We were just named Auction of the Year by Americredit. They’re the bread-and-butter here.
“Americredit, Triad Financial and Regional Acceptance are our big three (commercial consignors) here.
“We run an import sale once a month. We’ve been getting 30 to 50 units recently, but that’s been higher in the past.
“We also run a free 30-day float sale twice a month before our regular sale in the morning. We offer the financing ourselves.
“With the brutal winter, we haven’t been pushing our RV sale. We’ll start getting back into that now that the weather’s breaking.
“Our average prices on our cars and trucks are up a little bit. I don’t see anything hurting right now.”
MISSISSIPPI
Mike Browning, general manager, Manheim Mississippi, Hattiesburg, Miss.:
“Overall, sales are just slightly ahead of last year.
“We average 1,100 units per week and have eight physical lanes.
“Attendance is up; in-lane buyer growth is slightly up and online buyer transactions continue to grow.
“While our buyer base is wide, the majority are from the southern part of the country, primarily Mississippi, Louisiana, Alabama and Georgia.
“For the most part, I’d say they are more cautious than optimistic, especially given economic conditions. We are fortunate that our region has not been as negatively impacted as other areas; people still appear to be selling cars.
“The ability for dealers to secure credit for themselves and their customers seems to be the main worry.
“Consignment volumes are down. Dealers need inventory as they are not securing as many older units. The few trade-ins they receive they are retailing on their own.
“Fleet volumes are strong. With the limited dealer units available, this has contributed to the increased value of all fleet units.
“General Motors Corp. and Ford vehicles are both doing well. Their commitment to their dealers is strong, and they are doing everything possible to be supportive and helpful.
“Mid-range priced units, between $4,000 and $10,000 are doing well. The trend is that if the unit is in the ‘right’ price range, it will sell quickly and dealers are more willing to spend a little more to secure the unit.
“Higher-priced units, $25,000 and up, have been a bit more of a challenge.
“In today’s challenging environment, our goal is to do all we can to help our dealers take full advantage of the services we offer.”
MONTANA
Terry Scheetz, general manager, Auto Auction of Montana, Billings, Mont.:
“Sales aren’t too bad. We had a good sale on April 8. We’re running between 500 and 600 units. We have four lanes, but we’re running three.
“In the April 8 sale, we ran 536 units and sold 274. Generally, we’ll run 50 to 60 percent. The problem is we just can’t get enough consignments. Those are down.
“There are signs of hope. The prices are stabilizing. They were going up, but the shortage of cars is what was driving that.
“We get roughly 250 dealers in the lanes. What I’m finding is that a lot more dealers are using the Internet.
“Dealers say they’re not doing much in sales, but they’re buying at auction.
“Fleet-lease volumes are down, way down. I think they will come back, but I don’t think you’ll get the huge volumes that you used to have.
“We also just had a GSA sale on April 8, too. We usually sell well over what they’re asking.
“Generally, it’s a monthly sale but we’re running it every two weeks right now. We ran 57 on April 8 and expect to run another 90 on April 22. We’re also a drop point for GSA.
“Most of them are General Motors units, like the Tahoe, Blazer and some pickups. We also get some big trucks, too, from the nearby Air Force base in Great Falls.
“With our repo sales, we’ll usually sell 80 to 90 percent. Volumes are up.
“Our overall selling price is down a little.
“The older cars, 2002, 2003, 2004 and 2005 – anything under 100,000 miles – will sell. Miles aren’t as big of an issue as they used to be, though they still have to have under 100,000 because a lot of buy-here, pay-here dealers have parameters they have to meet (for financing).”

CONNECTICUT
John Pierlioni, owner, Pierlioni Used Auto Sales, Wallingford, Conn.:
“Business has been spotty. I specialize in cars that sell for $3,000 and under. I’m a buy-here, pay-here dealer.
“It’s been hard to find those cars because there haven’t been any new-car dealer trades.
“I’ve been buying donations and salvage cars.
“We’re getting tire-kickers. We’re getting plenty of people coming to look. A lot of people are afraid of losing their jobs.
“On a $3,000 car, I get $1,000 down. The term is until they pay it off. I have a minimum payment of $200 a month.
“We’re seeing people coming on the lot who didn’t come here before.
“I see a lot of people who had been driving Lexuses that are now driving Dodge Neons.
“I had a lot more customers when their tax returns came in.
“We’re seeing a ripple through the local economy from the troubles in the financial industry.
“I carry around 25 cars.
“I sell 12 to 20 cars a month.
“I buys cars from Southern Auto Auction, a salvage auction and an auction in Granby, Conn.
“I advertise in the free newspaper. When I advertise in the big papers, I seem to get lost.
“I’ve owned this store for 14 years.
I have two guys working for me that have been with me since high school.
“They’ve been with me for about 35 years.
“We do repair work. We do some outside work, but it’s mostly for my own customers.
“I’ve been financing
the repairs for my customers.
“I sell a lot of Dodge Neons, PT Cruisers, Ford Escorts. I sell small trucks, as well, Blazers, Explorers and S10s. Most of them are between 2000 and 2002.
“I don’t sell Toyotas or Hondas because they’re too expensive.
“I sold a 2000 Dodge Neon for $3,500.”

MISSISSIPPI
Jimmy Herring, president, Herring Auto Sales Inc., Guntown Miss.:
“Business is kind of soft. Trucks are selling well, but cars are soft. It’s the economy here.
“We have 11 percent unemployment. The area depends on the furniture industry and all that work is going overseas.
“I deal mostly in used trucks that are five to six years old. These are mostly work vehicles, three-quarter-tons, utility beds and cargo vans.
“I’ve been in business more than 30 years. I have customers who want a certain type of car and I get it for them. I don’t stock many cars.
“Trucks have bounced back. Nobody’s buying new trucks, but the used truck market is pretty good.
“I don’t do much with imports. I mostly sell Chevrolets and Fords, mostly F-250s and some F-350s, and the Chevy equivalents. The crew cabs are selling well. People want those four doors.
“I price them a little above wholesale and they do get their own financing.
“Most of the people that shop with me have good credit.
“A year or two back, I’d carry 15 or so vehicles. Now I carry six or eight.
“I can’t find as many at the price I want them at.
“I try to stay in the 80,000- to 100,000-mile range. It’s just hard to find vehicles like that any more.
“I get my vehicles from Manheim auctions in Atlanta, Manheim Mississippi and ADESA Birmingham.
“I buy a lot online. They’ve really come along with condition reports. What it says on there, you can about expect it to be that way. They really check the frame and stuff like that.
“I don’t do any advertising. It’s all just word of mouth.
“I’m in a high-traffic area for a small town.
“I recently sold an ‘04 Chevy Silverado with 107,000 miles, a V-8 automatic and air for $5,000.”

OREGON
Dan Nicholson, owner, Central Oregon Motors, Redmond, Ore.:
“Sales are not bad, not great. Compared to the last six months, it’s average. February was a really good month for us. I’m sure it was because of tax season. In fact, I had my best month in 14 months. Sales were up 30 percent.
“March was quite a bit slower. I keep about 30 cars on the lot. In February, in 10 days I was down to nine. At the end of the month, people thought I was going out of business. By the last weekend of the month, I basically closed down. I was running out of cars and the ones I bought hadn’t arrived yet.
“Inventory is still hard to get. The cars are out there, but the prices are high. Retail prices lag 35 to 40 days behind wholesale prices.
“New-car dealers are driving the prices up. I don’t hear used-car managers complaining about prices at the auctions, but I do hear it from all the independent guys.
“Retail prices are starting to creep up. But consumers are more Internet savvy. You have guys, including myself, with more overaged units than normal and we’re slashing the prices on those just to get rid of them.
“I wouldn’t be surprised if 70 percent of my sales right now are off the Internet. A lot of people who are referrals were looking on the Internet anyway. I use Craigslist and AutoTrader.com.
“I carry sport-utilities and trucks. Last summer almost killed me. January of ‘08, I had 50 pickups and half of them were diesels. Little SUVs are really hot right now.
“I haven’t had any problems financing high-tier credit customers. It’s the C and D customers I can’t get financed.
“I recently sold an ‘01 Ford Explorer Trak and an ‘01 Dodge Dakota crew cab.
“One had 80,000 miles and the other had 90,000. I sold the Ford for $7,900 and the Dodge Dakota for $8,900. Those were right in my sweet spot.”

ALABAMA
Keith Graham, general manager, Dealers Auto Auction of Huntsville, Athens, Ala.:
“Sales are still good down here. Percentages are very high.
“Run volume is down about 10 percent, however.
“In January, we were running an average of 382 units. In February, it was about 430 and (through mid-March) it was about 370 through our three lanes.
“Percentages have been in the high 60s, up through the 70s every week.
“Supply is a little tough right now. New-car dealers don’t have the (trades) they used to have.
“We currently run about 120 new-car trades a week.
“We’re averaging 265 bidders in the lanes each week. That’s up compared to this time last year. We’ve had as many as 320 bidders in the lane in recent weeks.
“The bidders are here and they need cars. But we are seeing the market drop slightly, as far as retail prices. I’m seeing everything sell, from 2009 off-lease rental cars that bring clean book, all the way to the cheap note cars.
“Last year, tax season went all the way to the first of May.
“We’re in the fourth quarter (as of mid-March) of tax season.
“The majority of our dealers come from north Alabama. We have drawn some dealers out of Atlanta. We had new-car dealers come down from Cincinnati recently.
“But the majority are coming from the Birmingham, Ala., area and north.
“Dealers don’t seem as scared as they were last October and early November. They seem to be upbeat.
“The dealers who are buying are very active.
“They’re selling cars and they’re positive. They’ve got smiles on their faces.
“Out PHH volumes are down. But their sales percentages are up, probably 15 percent.
“They are selling in the low 70s.
“Our Avis sale is about a 90 percent seller.
“Fleet-lease volumes are tough to get.
“Our two major repossession suppliers have picked up in volume recently.
“We also run a bi-weekly in-op sale. Those volumes are right where they were two years ago.
“They’re still bringing the same money.
“We don’t have any factory accounts.
“With the vehicle volumes that we’re selling, our average price is just about $5,000.
“That’s up about $300 a vehicle from this time last year.
“Nothing is doing poorly right now. Anything we’ve got that actually runs is selling right now.
“On the other side, the 2009 vehicles that I’m getting out of Avis are really doing better than expected.
“I believe that’s because of the (lack of) supply of the other fleet (units).
“We’ve got new-car dealers traveling a long way to buy these cars.”

ARIZONA
Tom McDermott, general manager/owner, Metro Auto Auction of Phoenix, Phoenix:
“For us, sales have been great, although we’ve certainly seen a shrinking supply.
“We’re also seeing the later model cars – especially the rental cars – coming in with higher miles.
“At this facility, we run about 1,200 to 1,300 units a week. We have six lanes, but we’re adding on to the auction. We’ve experienced steady growth since we opened (two years ago). We’ve been real fortunate.
“We just had a highline sale on March 24 and it was fantastic. It was better than I ever thought it would be. We ran 122 units.
“That sale ran in conjunction with our Volkswagen and Audi factory sale. They ran side by side.
“The Volkswagen and Audi sale runs once a month. We ran about 200 at our last sale but we’ve been as high as 500. It just depends on their inventory.
“We have officially been named a VW/Audi tech center, which is a big deal for an auction. We’re authorized to do warranty work. We also have Americredit sale starting here ithis month.
“Our sales percentages have been about 70 since the beginning of the year.
“On average, our attendance has been about 750 to 800 dealers per sale, maybe just a little bit below 800. That’s up from this time last year.
“We get a lot of dealers from Phoenix and the surrounding area. During our March 24 sale, we had dealers come from New York. We have a lot of guys from the Midwest. We’ve got a lot of dealers coming from up and down the Dakotas, Minnesota, Kansas and all the way down into Texas. We also have some regular dealers coming from Washington, California and Idaho.
“It’s interesting to see the dealers’ moods. I was asked to speak at the Arizona Independent Automobile Dealers Association recently. What I told them was to be prepared for a whole new wave of competitors – new-car dealers with very deep pockets.
“The new-car dealers in the lanes are buying deeper than one- and two-year old cars, which have been typically the type of cars that new-car dealerships have been interested in.
“Used-car managers from franchises have come into my auction not only to buy those (late-model) cars. They’re buying eight-, nine-, 10- and 12-year-old cars.
“So my message to independents was, ‘pay attention.’’ A year ago, Chevrolet stores were delivering 400 to 450 new cars a month. Now, they are delivering 50 to 75 new cars a month. Well, the gross has got to come from somewhere.
“Most everything has been hot right now. We have seen a little bit of a downturn in some pick-up trucks (in early March) Our average price is up to about $8,000, from about $6,000 this time last year.”