Latest Online Edition  Read Here

THE GOOD FIGHT: Paul John, executive director of the Georgia Independent Automobile Dealers Association, discusses how the association fought against state legislation that would have raised the taxes on used-car purchases.

TV Host Takes Cheap Shot at Dealers

TV Host Takes Cheap Shot at Dealers Featured

The latest attack on subprime automobile dealers came in the form of HBO’s satirical news/comedy show “Last Week Tonight with John Oliver” on Aug. 14.

The 17–minute segment slammed the subprime and buy-here, pay-here industry, criticizing everything from mark-ups and high interest rates to repossessions.

Oliver uses the most extreme negative examples: from a car sold with more than 100 percent markup to one that was repossessed with a baby in the back seat. He also cites information from the Los Angeles Times 2011 series of articles that slammed the buy-here, pay-here industry.

Oliver also suggested there is a subprime auto bubble, though the piece offered little evidence to suggest there is such a bubble.

The segment offered just a brief snippet about starter-interrupt devices, but did not clearly explain how the devices are used.

Oliver also called out Ken Shilson, founder of the National Alliance of Buy-Here, Pay-Here Dealers. The show used a hidden-camera to record him speaking before a debt buyer’s group.

Shilson offered a brief response to the show.

“John Oliver is a comedy show that does not warrant any further comment from me,” he stated. “The content should not be taken seriously.

“In my opinion we need to focus on relevant matters impacting the buy-here, pay-here industry today, which is exactly what we do at NABD.”

Steve Jordan, CEO of the NIADA, agreed, “"The opinions from John Oliver's piece were satirical and funny, but didn't provide any credible industry data or level of journalism that would merit a formal comment on behalf of the automotive industry."    

Corrine Kirkendall, vice president of compliance and public relations at Passtime, said the entire segment was disappointing.

Kirkendall said the piece was especially unfair to Shilson by editing one part of a comprehensive program to paint his comments in a bad light.

“It really misrepresented him,” she said.

As far as the overall show, Kirkendall said the producers could have done a good piece without “bashing the industry,” but they didn’t do that.

“I understand they were trying to be comical, but the sad part is it’s not accurate,” she said. "The facts they pulled were old statistics and old information.

“There’s always two sides to a story and they didn’t show the dealer side to it. It’s a business (dealers) have to operate under very strict rules, while putting up all the risk for a consumer with challenged credit.

“They don’t look at what the risk is for the business person, particularly for buy-here, pay-here dealers who are using their own money.”

Kirkendall said she understands the consumer side of the issue.

“But there has to be a balance and some fair play,” she said, “and there wasn’t fair play.”

Despite lambasting dealers who sell to poor-credit customers, Oliver started out the piece by citing how challenging it is for people without cars to get to work and how inefficient public transportation is as a replacement.


Watch the video below:  Last Week Tonight with John Oliver: Auto Lending


Auto Lending: Last Week Tonight with John Oliver (HBO)
Last modified on Tuesday, 23 August 2016 12:38
Rate this item
(0 votes)

Related items

  • ‘Perfect Dealership’ Book Announced

    Max Zanan, an automotive retail expert with nearly 20 years of experience, announced the upcoming release of his book ‘Perfect Dealership – Surviving the Digital Disruption.’
    The automotive retail industry is under more pressure than ever. Lower margins, stricter regulations, heavy competition, and online disrupters have many managers with their backs against the wall.
    “’Perfect Dealership’ serves as a wake-up call for the automobile industry,” Zanan said. “Unless car dealerships change – and change quickly – they risk falling into the same digital gulf that obliterated the corner video store and travel agencies … The old ways are dead. It’s time to adapt or fade away.”
    “Max outlines a modern and structured view of how to run and grow a profitable, ethical, and future-facing dealership,” said Peter Zorzy, director of operations, Atlantic Auto Group. “Perfect Dealership is a handbook for effective automotive management across all levels and departments.”

  • Police Arrest Ex-Dealer's Wife for First Wife's Murder

    On the morning of May 26, 1990, Marlene Warren opened her door to a very unusual guest.

    It would be the last time the dealer’s wife would open her door to anybody.

    A woman stood there, dressed as a clown in full make-up, holding flowers in one hand and a gun in the other.

    The clown shot Marlene Warren in the face. She died two days later.

    The murder would be unusual anywhere, but especially in Wellington, Fla., a Palm Beach suburb so high end that the Warrens’ neighborhood was built around an airstrip for the locals’ private planes.

    As is usually the case, police started looking at the victim’s husband, Michael Warren. There were rumors he was having an affair with Sheila Keen, the woman who handled repossessions for his store, Bargain Motors.

    Authorities were unable to link the pair conclusively to the murder, even after featuring the case on television’s “Unsolved Mysteries.” But many of those involved never gave up seeking justice for Marlene Warren.

    In 2014, the Palm Beach County Sheriff’s Office Cold Case Unit reopened the homicide investigation. Witnesses were re-contacted and additional DNA analysis was conducted.

    Authorities finally felt they had enough evidence to take to a grand jury. The jury indicted Keen and a warrant was issued for her arrest.

    She was taken into custody on Sept. 26 in Washington County, Va., where she was living with her husband – Michael Warren.

    The pair married in 2002 and had been running a local restaurant since a few years after he was released from prison after serving two years of an eight-year sentence following his wife’s murder.

    He had been convicted of odometer tampering and insurance fraud, but not murder.

    Those charges arose from some very atypical business practices investigators found at Michael Warren’s store and rental car operation.

    For example, at almost all buy-here, pay-here dealerships, the more payments customers make on their installment contracts, the lower the amount outstanding becomes.

    At Bargain Motors, the amount customers owed actually increased with each payment.

    Then there was the matter of a car from Michael Warren’s rental operation – a white Chrysler LeBaron that was reported stolen the day of the murder. The same car was reported leaving the Warren’s home after the shooting.

    It turned up in a nearby parking lot. The last driver left behind a clown wig.

    The Florida attorney general’s office eventually moved to seize Michael Warren’s businesses. Unfortunately, the decision took so long that he managed to get rid of his inventory.

    But the state still had the more than 200 finance contracts to collect on.

    Terry O’Loughlin was working in the attorney general’s organized crime division, handling lots of high-end foreclosures from the heyday of the Florida drug scene.

    His bosses tapped him to oversee the finance end of the case and that’s how he found himself in the car business.

    O’Loughlin knew nothing about running a buy-here, pay-here operation, but he quickly learned to respect those who did.

    The first lesson that he learned was customers often don’t want to pay. O’Loughlin had one advantage over the average dealer – the Florida Highway Patrol served as his repo agents.

    O’Loughlin would watch the junkyards for the cars. And he would search the classifieds for cars being sold without titles.

    Other customers wanted to make payments and improve their credit. O’Loughlin was happy to help them out.

    Then there were some unusual encounters, such as the woman who had a special non-monetary payment relationship with Warren.

    O’Loughlin had to tell her it was now a cash-only business.

    The state wound down the operation after two years. O’Loughlin came away from the experience with a new interest in the car business.

    “It was an awful lot of fun,” he said.

    He became the lead automotive specialist for the attorney general’s office. After several years, O’Loughlin decided he preferred the other side of the table and now serves as director of compliance at Reynolds and Reynolds, appearing as a regular speaker at numerous dealer events.

    The state of Florida is seeking the death penalty for Keen.

    O’Loughlin said he was glad when he heard about Keen’s arrest. He hopes Michael Warren follows her to prison.

    “He’s a devious fellow,” O’Loughlin said. “From beginning to end, a real slime ball.”

  • Interest Grows in Full-Size Luxury Sedans

    Jumpstart Automotive Media, a media insights and marketing solutions company, released its monthly share of shopper interest data. The report reveals that shoppers are showing more interest in vehicle segments such as full-size luxury sedans, and soon-to-be-released models are generating excitement among shoppers.
    During September, shopper interest in full-size luxury sedans grew 15 percent. The alternative fuel segment continues to lead all other categories in shopper interest growth since January at 38 percent, particularly led by interest in Tesla, which is second in overall brand shopper interest at 141 percent on the year (behind Genesis at 146 percent).

  • Automaker Redesigns CPO Website

    Capitalizing on the growing popularity of its pre-owned vehicles, Acura debuted a completely redesigned Certified Pre-Owned vehicle website that simplifies Acura’s online CPO vehicle shopping process, offering shoppers the ability to compare vehicles and features and share their selections with friends and family. The new Acura CPO site makes inventory the primary focal point for shoppers, introducing a new vehicle alert feature for the most up-to-date vehicle availability.
    The updated site also features a new vehicle recommendations tool and an interactive payment calculator to help potential customers find vehicles within their budget, along with a seamless browsing experience on any device.

  • New Book Looks at Future of Auto Retail

    Dale Pollak, founder of vAuto, has released his fourth book, “Like I See It: Obstacles and Opportunities Shaping the Future of Retail Automotive.”

     In a press release, Pollack stated he hadn’t planned on writing a fourth book, but circumstances in the retail automotive industry changed his thinking.

    “Our industry is confronting a challenged and uncertain future,” Pollak says. “I felt like I had an obligation to bring voice to topics that too few in our industry want to talk about. My hope is that Like I See It spurs recognition that a prosperous and viable future for the car business will only arrive if we collectively begin the transformative work to shape this future today.”

    In the book, Pollak devotes chapters to margin compression, increased OEM control and financial reliance of their dealer partners, dealer network consolidation, technology disruption, vehicle production inefficiencies and consumer preferences for digital retailing.

CarMax Attempts to Keep up with Changing Tech Demands

CarMax Attempts to Keep up with Changing Tech Demands

During the most recent CarMax Inc. quarterly earning call, Morgan Stanley analyst asked an audacious question: “Could CarMax be Amazon’s Whole Foods of automotive retail?” Jonas is none for his...

Dealers Use In-House CRM to Drive Sales

Dealers Use In-House CRM to Drive Sales

Robert Beck, president, Stop ‘N Drive Motors, San Antonio, Texas: “We have one location and we opened up in 2005. “We usually stock about 40 to 50 cars. We have...

  • CarMax Moves into New Market
    CarMax Moves into New Market CarMax Inc. celebrated the grand opening of its first store in Michigan, located in Kentwood at 4431 28th Street. The Kentwood store will have the capacity to stock approximately 200…
  • DMS Incorporates Carfax
    DMS Incorporates Carfax Auto/Mate Dealership Systems has integrated its dealership management system with myCarfax Service Shop tools to help their dealer customers increase the success of their fixed operations. This enhancement makes it…
  • CarMax Opens Store in Northeast
    CarMax Opens Store in Northeast CarMax Inc. celebrated the grand opening of its new store in Albany, N.Y.The store is located at 1860 Central Ave. The Albany CarMax has the capacity to stock approximately 200…
  • CarMax Grows in California
    CarMax Grows in California CarMax Inc. is currently hiring more than 40 associates for the company's third store in the Bay Area of California. The store, scheduled to open in November, will be located…
  • CarMax Reports Higher Sales, Revenue
    CarMax Reports Higher Sales, Revenue CarMax Inc. reported higher sales and revenue for the second quarter ended Aug. 31. Net sales and operating revenues increased 2.9 percent to $4 billion. Used unit sales in comparable…
  • TV Host Takes Cheap Shot at Dealers
    TV Host Takes Cheap Shot at Dealers The latest attack on subprime automobile dealers came in the form of HBO’s satirical news/comedy show “Last Week Tonight with John Oliver” on Aug. 14. The 17–minute segment slammed the…

    Auto Lending: Last Week Tonight with John Oliver (HBO)
  • Carvana Moves into Midwest
    Carvana Moves into Midwest Carvana announced its expansion into Columbus, Ohio. This launch marks the company’s first market in the Midwest region and first in the state of Ohio. Columbus marks Carvana’s seventh new…
  • America’s Car-Mart Moves Fewer Units
    America’s Car-Mart Moves Fewer Units America’s Car-Mart Inc. reported net income of $7.1 million in the quarter ended July 31.The buy-here, pay-here chain reported revenues of $146 million compared to $143 million for the prior…
  • Carvana Partners with Credit Union
    Carvana Partners with Credit Union Carvana has partnered with LGE Community Credit Union. Through the partnership, LGE members can browse Carvana's online inventory of vehicles and purchase a car and have it delivered to them…
  • Dealers Use In-House CRM to Drive Sales
    Dealers Use In-House CRM to Drive Sales Robert Beck, president, Stop ‘N Drive Motors, San Antonio, Texas: “We have one location and we opened up in 2005. “We usually stock about 40 to 50 cars. We have…