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Wholesale Markets - Arkansas

Shane Wood, general manager, 71B Auto Auction, Springdale, Ark.:

“We just celebrated our four-year anniversary.

“We have five lanes and we’re running five.

“Our volumes are right around 1,000 a week. We’re up probably 300 cars from last year. I attribute that to customer service. We started this business as a hobby. I used to be a wholesaler and bought cars from Brian Hunt, son of J.B. Hunt (of the trucking company). This all started over lunch one day. He had some property that was unused and had a building and two trailer houses on it. We thought we would get 100 cars a week. But it’s grown into this. It’s grown from a hobby
into this.

“Since February, we’ve spent $10 million on renovations. We added two lanes and a state-of-the-art restaurant and new offices. We also purchased another seven acres and black-
topped it.

“Sales percentages are 50 to 60 percent. We’re strictly dealer consignment. We haven’t broken into the fleet-lease market yet.

“We do very few repos.

“About 75 percent of what we run is new-car trades. The remainder would be wholesalers.

“Our big market is the $4,000 to $10,000 range stuff. America’s Car Mart’s corporate office is just a couple of miles down the street. They buy strong here. “As we move into (the buy-here, pay-here buying season) in the next few weeks, we’ll be bumping into the 65- to 70- percent sales range
through April.,

“We’ll usually print 350 to 400 bidder badges. That’s a lot better than last year. We’re draw dealers from all over. We recently spent 17,000 on mailers that we sent to every dealer in several states. We draw dealers from Louisiana, Oklahoma, Kansas, Missouri, Arkansas and Mississippi.

“In this market, the 2008 Chevy Impala is not selling, but the 2008 Z71 short-wide truck with (great) wheels and tires – a stud truck – is still selling.

“What I mean is, guys are not buying cars to stock their lot, they are buying cars they need.

“The average price coming through the lanes is $6,500. Last year, I think it was about $5,200. We’re just getting more later-model stuff.

“But the economy here is really good. There’s all kinds of business going on.”

Wholesale Markets - KCI

Doug Doll, owner/general manager, KCI Kansas City, Kansas City, Mo.:

“We opened up in 1978 in Elwood, Kan., as P & S Auto Auction. We’ve been in Kansas City since July 2008. 

“We have six lanes and we’re running all six.

“Our volumes are up probably 25 percent over last year. 

“We’re running between 800 and 1,000 cars per week right now.

“Our fleet business is up. We’ve added larger accounts. Plus our dealer business is up, too.

“Our fleet business is up 50 cars a week sold over last year.  Our dealer business is up 10 cars a week sold from last year.

“For the year, we’re running about 61 percent (sold). That’s about the same as last year.

“From January through July we were running 66 percent. We’ve dipped a little bit since then.

“In the lanes, we’re averaging between 500 and 600 bidders. That’s about the same as this time last year.

“We get a lot of dealers from the Kansas City and St. Louis, Mo., areas, along with Wichita, Kan. We also draw from Omaha and Lincoln, Neb., as well as Des Moines, Iowa. We get Hispanic buyers from the El Paso, Texas, area.

“Our online sales are probably up 25 percent in our online sales.

“I believe the reason that’s up is that we started a condition report program in August of last year. We started doing full CRs on every car to hit the auction lanes. Now, we don’t do a mechanical CR, but a physical CR. We do a detailed CR from tire depth to dings, dents and scratches. Pictures are taken. By doing that, our online sales have jumped tremendously. That’s expanded the (bidding) area. Dealers from the East Coast and West Coast, for example, are buying a lot of dealer cars online. We weren’t getting that last year at all.

“We’re 60/40, between new-car trades and fleet/lease/repo.

“We also have a Kia sale and a Toyota Financial Services sale. The Kia factory sale is the third Thursday of the month. Our Toyota Financial sale is scheduled (at different times). We have our next one scheduled at our anniversary sale on Nov. 13.

“We’re slowly seeing lease volumes come back. What I’m hearing is that there’s such a shortage of cars that the franchise dealers are buying them up before they come to auction.

“Our average price coming through the lanes is $7,800. That’s up quite a bit from last year.

“The last Thursday of the month is our heavy equipment sale. We do boom trucks, bucket trucks, etc., from local municipalities. Typically, we run about 40 to 50 (units).

“GSA has run four times this year and we’ll run those sales when they have the volume.”  

 

NextGear Expands as Competition Heats up

NextGear Capital continues to grow.

The floor planner was born out of a merger between independent Dealers Services Corp. and Manhein's floor plan arm in late 2012.

Today it is expanding into new markets both in the United States and overseas.

In the U.S., NextGear Capital has started floor planning new cars for franchise dealers.

It has also started operations in the U.K.

NextGear Capital president Brian Geitner explains that floor planning is limited there and mostly only available to franchise dealers. NextGear Capital will now extend that service to independent dealers.

Australia will be the next step of international. Geitner said.

This overseas growth is necessary in part because the U.S. floor plan market grows more competitive.  Strong mean strong performance for floor planners and that is attracting new entrants to the market.

The question is how long it will be befoe the market moderates.

"There's only one direction those metrics can go," Geitner said.

Interest rates and delinquencies will rise, at some point. At that time, he said, NextGear Capital's experience in technology and a veteran staff will give the floor planner an advantage.

The firm is also making a name for itself through charitable efforts.

During the recent National Auto Auction Association convention, NextGear Capital presented a $10,000 check to the NAAA Warren Young, Sr. Scholastic Foundation. The company also made a major contribution during the event's Pedal Car charity auction, purchasing seven pedal cars to display around their corporate office.

NextGear Capital executives also took part in the Ice Bucket Challenge to raise donations and awareness for amyotrophic lateral sclerosis. In addition to participating in the challenge, NextGear Capital pledged $5,000 towards the ALS Foundation.



“At NextGear Capital, we believe in making a difference and giving back to others, whether that’s in our community or globally,” Geitner said.

Wholesale Markets - Port City

Mark Wescott, general manager, Port City Auto Auction, Richmond, Maine:

“We’ve been in business since 1988.

“We’re running four lanes. We’ve got six lanes.

“Volumes spiked up a little bit in September. That’s typical.

 “We’re running right around the 450 (unit) mark. That’s up from this time last year.

“I think it’s because the new-car stores are selling more cars, which is generating more trades.

“Sales percentages are at 55 percent.

“That’s about the same as this time last year.

“We run probably 85 to 90 percent dealer consignment. That’s what it was this time last year.

“(Non-dealer) cars are mostly repossessions. We get them from all over the state.

“(Our repos) come from banks and credit unions.

“The number of dealers in the lanes is staying pretty consistent.

“That’s probably around 225.

“Our (bidders) come from all along the East Coast.

“We (offer) all of our vehicles online.

“That business is doing OK.

“We’re probably selling 10 percent online.

“We do not have a salvage sale. We don’t do any special sales (equipment, power sports, etc.).

“(In terms of reconditioning and other services), dealers are pretty
much doing the same as last year.

“The average price in the lanes, the last I looked, was about $4,500.

“That’s up a little bit from this time last year.

“During an election year, which it is, there is an effect on business.

“I’m already hearing from dealers that things have been slow.

“So we’ll see. Hopefully, after the election, things will take right off again.”

Wholesale Markets - North East Pennsylvania

PENNSYLVANIA

James Gaughan, president, North East Pennsylvania Auto Auction, Scranton, Pa.:

“Our sales percentages are higher this year than any other year in our history.

“There have been a lot of moves in the market that have led to a reduction in inventory this year. In the first three months of the year in the Northeast, we had horrible weather.

“We went into the spring market with fewer cars.

“The sales percentage was so high that we sold the same amount of cars even though we ran fewer. We’ve managed to catch up through the year. We had more GSA units.

“It’s been challenging because more franchise dealers have decided to keep more used cars. 

“For example, a Chevy dealer will keep a Ford that before he would send to auction.

“We are still getting the trade-ins because of turn schedules. 

“We aren’t losing the cars, but they are delayed. 

“Some of the nicer stuff does get retailed and that takes those units out of our lanes.

“The scarcest version of a car is the perfect car - a one model year old with 15,000 miles. The new-car dealer and the strong independents love to find vehicles with low miles that are clean. 

“That’s the car that’s hardest to find right now. When dealerships send one through the lanes, it does 128 percent of Black Book.

“Our GSA cars have gone through the roof.  They have low miles and the government keeps them in the right condition. 

“We do pick up some cars from upstate New York that are exposed to the elements.

“Trucks were in a little slump during the summer. When it’s sunny and 85 degrees outside, that causes us to lose sight that the fall is coming. 

“But as soon as you get those two days when it’s 42 degrees in the morning, people remember.

“The truck market has just taken off like a rocket for the good inventory. The trucks with more than 100,000 miles on them are at a low, the same as the older, rougher cars.

“The market is adjusting, though, now that kids are going back to school and people are realizing they need another car. 

“Franchise dealers in our area felt like they saw less business in late August and early September than they should have. 

“Right before the kids go back to school, we have a lull because people are buying clothes or they’re trying to sneak their last vacation in.

“In our area, we had a late start to the school year. 

“Business has been better since the middle of the month.

“We’re relocating to a new site within the next year. We’re on the fringe of the Poconos, at the bottom of a mountain. 

“We’ve been challenged by the topography.

“We’re going to move about four miles away.”