Used Car News

IOWA
Mark Greb, owner, Plaza Auto Auction, Mount Vernon, Iowa:
“We can run five lanes here but we’re currently running four.
“Sales percentages have been in the mid to high 60s, though the last couple of weeks we’ve seen them dip into the low 60s.
“We’re averaging a 5- to 7- percent increase in sales compared to last year.
“I attribute that to the demand for used vehicles exceeding supply.
“Dealers are coming from further distances to bring their cars, because they know they’ll get good prices here.
“Volumes seemed to hit a low last year, we’re starting to see a gradual increase. It’s not near the 2005 numbers.
“We’re seeing dealers consign cars who hadn’t been consigning cars.
“Dealer count is up over last year, though we’re down from the peak. We are re-registering dealers who hadn’t been here recently and we’re registering probably five to six new dealers every week.
“We’re averaging just under 270 dealers. They’re coming from southern Wisconsin, western Illinois, northern Missouri, the eastern part of Nebraska and all over Iowa. Traditionally, we draw from a 150-mile radius.
“About 10 percent of our business is fleet-lease.
“Our biggest decline is probably in repossessions and it seems to be off around the country.
“We also have a quarterly motorsports sale. That’s increased from last year when we were doing them twice a year. We’re getting right about 100 units quarterly. We’ve been experiencing a 60 percent sales rate.
“Those units include motorcycles, jet skis, boats, trailers and lawn mowers. We also have a few collectible-type cars, but those generally do not sell.
“We also sell salvage monthly, but it’s not something we really concentrate on. We offer about 30 a month.
“Our average price overall is about $3,200 to $3,400.
“In the Midwest, General Motors Ford and Chrysler products continue to do well. There was a drop-off with the Toyota brand, but even that is starting to surge again. Small pickup trucks are doing well.
“The hybrids have struggled with gas prices steady at $2.50 to $2.60 a gallon recently. Ford hybrids have especially struggled.”
OREGON
Jerry Hinton, general manager, Brasher’s Portland Auto Auction, Portland, Ore.:
“Sales have been very brisk. Conversion rates for the first two quarters have been extremely high.
“We’ve been averaging in the mid-60 percentile since the beginning of this year. The market has shifted in the last three or four weeks, however. There’s been about a 10-percent drop conversion rates since then.
“We’re still well above what we were doing this time last year.
“We’re running about 1,000 cars per week, on average.
“I recently read that there is an 8.2 percent reduction, on average, of consignment nationwide. We’re about 9 percent off (in volume).
“Our dealers in the lanes over the last few years have actually doubled. We’re getting about 650 dealers.
“Dealers are having to go outside their normal fishing holes to get cars. They’re coming from longer distances now. With reduction in inventory, (that trend) is going to be that way industrywide at least through 2012.
“We normally get bidders from the seven Western states: Oregon, Washington, Montana, Idaho, Utah, California and some from Arizona.
“Dealers are just hanging on. I don’t think there’s any great optimism out there.
“The upside is our reduction in repos won’t be as great as other areas. Our repossessions will continue to be strong, even though they peaked last year.
“The commercial fleets also peaked last year and the rental fleets have gone more to risk programs, therefore they’re having to sell the cars themselves. So now you’re seeing 40,000, 50,000 or 60,000 miles on those cars.
“The one uptick is that dealer cars are starting to come back a lot heavier. That’s coming back. I forecast the last half of the year will be 40 to 50 percent higher than what it’s been.
“Our fleet lease volumes are comparable to what they were this time last year. It makes up about 40 percent of our total volume.
“Our captive finance accounts include Honda, Acura, Volkswagen and Audi.
“The biggest change with the captives is how much is selling upstream. Up to 60 percent is selling upstream.
“We also offer a GSA sale once a month. We get about 600 units a year.
“We run a recreational vehicle sale and get 30 or 40 of those a week, but we really don’t go after that market like our sister auction in Eugene, Ore. That’s their niche.
“Our average price in the lanes overall in the second quarter is about $7,500.
“The low-end cars, $4,000 and below, are doing quite well, because there’s not a lot of lending going on in the market place. Luxury cars are not doing as well.”

MASSACHUSETTS
Bill VanLaarhoven, owner, Martin’s Auto Sales, North Easton, Mass.:
“We’ve been in business for 20 years, eight years in this location.
“I have 17 vehicles on the lot. We carried a similar amount this time last year.
“On average, we retail about 12 cars a month. That’s also about the same as last year.
“However, the profits are down per unit. That’s a result of three factors.
“One, the cars cost more to buy.
“Second, the cost of repairs has increased, so it costs more to service the car. Also, cars that are traded in need more work.
“Third, it’s hard to get people to pay more for the car, so you have to negotiate a price based on their ability to get financing.
“We do straight retail and some subprime with three or four different companies. That’s increased about 15 percent from last year.
“We get our vehicles from all different sources; auctions, dealers, from the newspaper or off someone’s in-law who’s trying to sell their car.
“I would definitely say it’s harder to find inventory, even for a small dealer like me. I don’t have to have a lot of cars. I wouldn’t want to be a big dealer trying to supply a store with 100 cars a month.
“But I’m going to more auctions to be more selective about what I buy.
“I’m willing to pay more for a nice car, but there are limits to that, too.
“We recondition vehicles before they go out on the lot. We farm that out.
“We’ve been using the same people for years and they do a good job.
“Actually, we negotiated a better deal because we now pay up front. It’s a little way of saving a few dollars.
“We’re getting bigger down payments because the banks won’t do some deals unless we get bigger down payments.
“I’m now trying to get $2,500 to $3,000 from the customer.
“The average model year is probably a 2004. The average mileage is about 80,000.
“We currently have more cars than trucks, but that will change as we look toward the fall market.
“We recently sold a 2005 Dodge Magnum It had 69,000 miles and it sold for $12,000.”
WASHINGTON
Bill Heald, president, Maple Leaf Motors, Tacoma, Wash.:
“I’ve been in business 25 years.
“I have two locations, about 10 miles apart. They have similar inventory.
“I carry about 140 vehicles in stock.
“That’s about 50 fewer than what I was carrying this time last year. It’s just more difficult to buy the cars I want at the price I want to pay for them.
“There’s also no sense in carrying more cars than I need.
“My vehicles are all paid for. (I don’t floor plan).
“I sell about 35 to 40 cars per month, in that range. That’s probably down 20 percent, maybe 25.
“A lot of that (dip) has to do with the economy, people listening to bad news and thinking everything’s bad.
“ About 85 percent of our deals are buy-here, pay-here, with the rest being cash deals.
“I have my own related finance company.
“Tax season was OK, but it was short. It didn’t seem to last as long as normal. It was a good three- to four-week run.
“We get 15 percent as a down payment, which equates to probably $900. That hasn’t changed from this time last year.
“The average mileage on our vehicles is about 120,000. The average model year is around 2000, 2001.
“We carry more cars than trucks, probably 45 percent cars, 305 percent SUVs and vans, with rest being pickups.
“My inventory is probably 65 to 70 percent domestics.
“Our averaged price is probably $6,000. We haven’t had to raise our prices. We’ve been able to control that pretty much. I have a formula and I will not buy outside the formula.
“I buy everything from dealers, all new-car dealers. It’s been a little bit harder, but to be honest, I haven’t had to buy as many cars because is off.
“I was really concerned about inventory when Cash for Clunkers came up. But I’ve been able to pull through OK.
“I thought it was going to be worse than it was. I still think it was a bad deal. They destroyed an awful lot of cars that worked for me, I know that.
“Every once in a while I’ll buy something that’s outside of my box, but I’ll buy it with the thought process that it will be just a trial deal to stimulate a sale.
“I’m not really a pessimistic guy, but I am a little pessimistic for the next six months. I think the second half of the year is going to be tough. I think there are a lot of dealers who aren’t in a good financial position themselves to be able to pull through some of the (challenges).
“I do sell some stuff at the auctions and watch the lanes pretty closely and the values of cars have not dropped at all and that surprises me.
“The last vehicle I sold was a 1999 Ford Expedition for $9,999. It had 147,000 miles.”

NEBRASKA
Dennis Bennet, general manager, Lincoln Auto Auction, Lincoln, Neb.:
“We run four lanes and sales have been great.
“We’re averaging about 340 vehicles per week. We’re probably up a slight percentage compared to this time last year.
“I attribute that to new accounts we’ve been getting. Those have mostly been on the new-car dealer trades.
“We also sell fleet-lease units, which make up about 15 percent of our volume. That’s been pretty steady.
“Overall, our sales percentages are in the mid-60s. That’s been pretty close to what we were doing last year.
“We’re getting a couple of hundred dealers in the lanes, between 200 and 250. It just depends on the week. That’s down a little from this time last year.
“Our dealers are coming from Kansas, Missouri, Iowa and Nebraska.
“We also get some from South Dakota. We’re seeing new registrations every week.
“The buyers are still looking for new markets.
“Overall, the mood of the dealers has been good. Everyone enjoyed a good tax season this year, February through April.
“Now, things are leveling off, though. In Nebraska, we’re fortunate. Our economy doesn’t have the highs and lows (like other places). Everyone’s pretty consistent.
“Our fleet-lease units come in cycles, so it (the amount) changes from week to week. We’ll run about 40 cars per month.
“We do not have a salvage sale.
“We run a quarterly specialty sale. We’ll get everything for that, from boats, bikes and cars to off-road vehicles, cars, even campers. We’ll take anything.
“We’ve been running about 100 units in those sales and selling a solid 50 percent. We just had one of those sales in June so our next one will probably be in September.
“I’m optimistic about where we are. Since we’re an independent auction, we have the ability to respond immediately to a customer’s needs and I think that’s our greatest strength.
“Our average vehicle price coming through the lanes here is about $3,700.
“Vehicle prices are definitely up.
“You know we’ve seen vehicles come across the block that we saw sold a year or two ago.
“They’re averaging $800 to $1,200 more for the exact same car with the additional miles.
“It seems we can sell anything we get.”
SOUTH CAROLINA
Dan Dorsey, general manager, Acacia Augusta Auto Auction, North Augusta, S.C.:
“We’ve been here three years. Sales have been pretty good. We’re up from where we were last year and the market seems to be  pretty strong in the Augusta area.
“We have two lanes and we run them both each week.
“We’ll run 175 units per sale. I’d say we’re up about 20 percent.
“Our average sale results in about 60- to 65-percent sales percentage.
“Those are probably 10 percent higher than they were last year.
“We average between 100 and 120 dealers in the lanes each week.
“That figure fluctuates. We’ve got a pretty good dealer base here that’s committed and supports us pretty well.
“Our dealers are coming from the local area. But we do get them also from Tennessee, the Atlanta area, North Carolina – they come from all over.
“Right now, the dealers seem to be very positive. Everyone’s selling cars.
“The majority of our buyers are independent dealers.
“Our fleet-lease units make up about 30 percent of our total volume. That includes bank and credit union accounts. That’s been pretty steady. I think they’re going to stay that way. I expect the same (trend) with repossessions.
“Our average price car is about $3,000 to $3,500. That’s been going up. About three years ago, our average sales price was about $2,200.
“You know, the Cash for Clunkers could have something to do with it.
“Sport utility vehicles are doing great. We just can’t seem to be getting enough of them. Down here, it doesn’t matter if they’re two-wheel drive or four-wheel drive.
“The salvage stuff is struggling.
“We have a monthly sale. I don’t know what the price of metal is right now, but that might have something to do with it.
“We normally run 50 salvage vehicles per month.
“About once every quarter, we’ll run a U.S. Marshals sale, made up of seized items. We don’t have a regular schedule, it just depends on how the court system works and how many units they seize.
“We’ve run anywhere from five units to 50 units.
“One of the strangest things I’ve ever sold was a Husqvarna (Viking) sewing machine. But I’ve sold cars, boats, even a hot tub.
“We’ve got a strong economy here in Augusta. We were ranked one of the top 20 in the country, with government agencies, hospitals and the military here. So we’ve got a good economy. I’m positive for the economy in the coming year.”

Indiana
Jeremy Trent, buyer, Trent AutoSales,Vincennes, Ind.:
“My dad and my grandfather started the store in the ‘70s.
“I’ve been here for about 10 years.
“Retail sales have been pretty good.
“They’re a little low, but you run into that everywhere.
“We have a lot of repeat customers. We’re in a small town.
“Everybody knows everybody.
“We usually sell 10 to 15 units a month. A good five of those sales are repeat customers.
“We try to keep 10 or 12 units on the lot.
“It seems like no matter how many you have, you never have what they’re looking for.
“We just sold a 2010 Malibu that we got for a repeat customer.
“We can get just about
anything.
“We keep a mix of SUV and trucks, along with a couple of foreign cars.
“We just a sold a convertible Mercedes CLK 325 the other day.  We got $15,000 for it. It was an ‘02 with 78,000 miles on it. That was a pretty good price.
“We focus a lot on wholesaling.
“Between my dad and myself, we hit six sales a month. We buy at two and we sell at four.
“We take most of our inventory to the auctions these days because we’ve found we can get more out of them there than we can get from the public.
“With financing the way it is now, we don’t see the point of keeping a whole lot of inventory on the lot.
“We try to go through the local banks. We try to keep it local.
“They’ve treated us pretty good, although the times are different than they used to be.
“We have a lot of luck with the credit unions. Generally, we don’t do any in-house financing.
“Most of our customers end up getting their own financing.
“About 70 percent of them can do that.
“But we see more people that can’t get financing all the time.
“That’s why we focus on the wholesale side.
“We can sell to J.D. Byrider or Superior that focus on
secondary finance. They’ll pay more for the cars because they sell financing more than they sell the cars.
“The cheap cars have really boomed.
“Cash for Clunkers really hurt us. It took a lot of decent cars off the road.
“I had a guy come in a while ago and he said he didn’t see how that hurt us. He’s in the cattle business and I asked him, ‘If they took a bunch of cattle off the market and didn’t butcher them, what would happen to the price of meat?’
“We keep trucks and SUVs morethananything,
especially diesel trucks.
“We have a lot of farmers in our market.
“We sell a lot of the Fords with the 7.3 liter diesel engines.
“The guys who are buying them are using them for work.
“We’re not seeing the young kids who want to pull a boat on a Saturday any more.
“There aren’t any big
corporations around here. It’s mostly small businesses and farms.
“We’ve got some small
factories in the area, like one that makes seats for Toyota.
“There’s not a lot of work, but the town isn’t hit as hard as some big cities.”

Oklahoma
Monte Shockley, owner, Shockley Auto Sales, Poteau, Okla. :
“Sales are good. They’re up a little bit from last year. It’s steady.
“There’s still business out there if you have the right inventory at the right price.
“The right inventory is hard to find.
“The right inventory is anything that’s clean – crossovers, economy cars, some pickups.
“Our part of the country is always pickup country. Gas prices don’t affect that.
“I used to go to sales once or twice a week for years.
For the last four or five years, I buy everything online.
“I use SmartAuction.
“We have to go all over the country to get them after we buy them, but that’s what we do.
“I have some car drivers I rely on. I ship a lot of them throughReadyAuto Transport.
“My customers are doing OK getting financed
“Most of what we sell is current-year.
“We go through different banks, like Chase Auto Finance and CitiFinancial. That’s been working really well.
“It hasn’t been an issue. The buying parameters are a little tighter than they used to be, but that’s understandable.
“We don’t do as much advertising as a lot of places. I run ads in the weekly bargain newspapers around the area. That’s effective for us. I don’t do any radio or TV.
“We don’t do any repairs here. It’s just straight sales.
“We offer a service contract through NAC.
“We’ve had a good relationship with them for many years. They’re affordable and they pay their claims.
“I’ve had very few, if any,  complaints about them.”