Used Car News

LOUISIANA
Steve Taylor, owner, Car Town of Monroe Inc., Monroe, La.:
“Business has been going really good.
“I started 32 years ago. I’ve got four stores. Three are sort of upscale lots. Those are straight retail. One is a buy-here, pay-here lot, but a little better type of car than (you’d normally find). They are all in the Monroe, La., area
“Before tax season, we were carrying about 400 units in total.
“Now we’re down to slightly more than 200 units. We’ve sold about 230 this year.
“On average, we’ll carry around 275. We usually sell about 250 per month, on average. During tax season, that average goes up.
“On the lot where we finance customers, none of our vehicles are older than 2001.
“On the other lots, the units are mostly lease-type stuff, 2005, 2006, 2007 or 2008.
“We’re carrying the same amount of cars that we kept this time last year.
“We travel across five states to buy cars. I have one guy who’s been employed by me since 1988. I  have a partner who buys vehicles and I’ll buy them.
“Two of us buy at auctions and the third works strictly on the road buying from dealers.
“Before the end of the year, we’ll load up for tax season and quit buying by Dec. 15. Then we’ll start buying again in March and April.
“We’re ahead of sales compared to this time last year.
“The market is good for us, right now. This is a good time to be in the used-car business.
“Our inventory is pretty evenly split between cars and trucks.
“We carry a bit more domestics than imports, quite a bit more.
“Before we put cars on the lot, we check every car extensively. We’ll do that inspection here.
“But any work done is farmed out.
“We no longer have mechanics or body shops or anything like that.
“In addition to retail and buy-here, pay-here, we do a lot of subprime.
“Since Jan. 1, we’ve noticed that all of the major lenders that we do indirect financing with have started buying more and more.
“It’s not like back in 2007, when they’d buy anything, but they are buying better now.
“They’re just allowing us to do more deals.
“About 40 percent of our sales at the three retail lots are subprime.
“Our advertising is pretty much in print. We’ll use the regular newspapers and the free papers. Gannett newspapers are local, so we work with them.
“We do a little radio. We always have. We’ll run radio during tax time. Just keeping our name out there.
“We also do a little bit of television just for our buy-here, pay-here lot.
“We’re also big into the Internet. We use our Web site, Cars.com,
AutoTrader.com, we use them all.
“We have one person in charge of Internet whose job is to follow up on every Internet lead, make sure every Internet lead gets worked.
“Our average retail price is around $12,000, though we will have some cheaper cars during tax time. That price is a little higher than last year.
“We recently sold a 2008 Chevy Trailblazer. It had 35,700 miles and we sold it for $15,995.”
MINNESOTA
Dan Koppy, owner, Koppy Motors, Forest Lake, Minn.:
“We’ve got three locations and keep a combined inventory of about 120 units.
“They are all retail lots.
“I’m keeping close to the same amount of vehicles as this time last year.
“We average between 40 to 50 units sold each month. That’s about the same as last year.
“We’ve been a little more aggressive on advertising.
“We’re trying to carry (a specific) type of car. Our typical used car is about four to five years old, with 60,000 to 80,000 miles.
“But lately, we’ve had a lot of renewed success with the truck business. Right now, trucks and SUVs make up about 30 to 40 percent of our business.
“Our inventory is split (evenly) between domestic and import.
“Online advertising has been the trend in the business but we also have gone back to some print advertising.
“We also try to have good retail displays at our three stores. Keep everything fresh and keep things moving around.
“In this economy, you have to be prudent (in spending), but you still have to get your name out there and have visibility. That’s my philosophy.
“I can’t say I have one primary source of inventory. I’ll use auctions, dealers and I get a lot of buy-bids from guys who know I buy cars.
“I buy a lot of cars off the street. We’re also pretty aggressive on trade-ins.
“We recon cars before we put them on the lot. We do that mostly in-house. We have our own service center.
“Our average retail price is about $9,800. That’s up about $800 from this time last year. I can attribute that directly to our increased truck business, because trucks are going to sell for more money.
“Also, I’ve found the real inexpensive car isn’t quite as available as it was this time last year.
“The last vehicle we sold was a 1997 Chevrolet Suburban. It had about 88,000 miles, one owner, a really nice truck.
“We got $7,995 for that vehicle.
“I think we’ve been through the worst. I’m optimistic. I think it’s going to be a better year. For me, 2009 was better than 2008. So I’m expecting 2010 to be better than 2009.”

INDIANA
Steve Kesler, president, Kesler-Schaefer Auto Auction Inc., Indianapolis:
“Cars are selling really good. Dealers are fighting over them.
“We run five lanes. Ordinarily, we’ll run 900 to 1,000 cars in our sale.
“But it’s been closer to 800 lately. I think there’s cars out there, but we’ve got to get them unburied (from the snow).
However, we haven’t had to cancel any sales because of the weather.
“A recent sale was 75 percent. I’d love to tell you we do that all the time, but normally that shoots up when the tax checks come out. People start buying cars like crazy.
“But there were some delays in people getting rapid refunds.
“So it really depends on when the money hits the streets and how long it lasts.
“We’re getting a lot of people in the lanes. They’re coming from all over the place because cars are a bit scarce. Mostly we get dealers coming from Indiana, plus a handful from Ohio and Kentucky and a few from the Chicago area.
“Lately, though, we’ve gotten dealers from as far away as Arkansas.
“Our volumes are a little off right now because of the weather.
“Most of our volumes are dealer consignment, about 89 percent. The rest are repo and lease cars.
“Lease and repo volumes are doing well.
“Our average priced car ranges from $2,500 to $3,000.
“It’s similar to what it was this time last year.
“The average mileage of cars coming to us is going up. I think the new-car guys are keeping anything that’s really (clean).
“We still see a lot more franchise guys in here buying.
“We’re selling payment-type cars and everything seems to be selling at $500, $600 or $800 more than it should be bringing. Because of the high demand, dealers are fighting over cars, paying a lot of money.
“You can’t sell them if you don’t have them.
“The dangerous part is when (that supply comes back or prices drop) and you’ve just bought a bunch of cars, what do you do?
“But I think it’s going to be tough all year to get the kind of cars we sell.
“Cash for Clunkers took a lot of cars out of the market that we might have sold a couple of times over.
“It’s helped the parts guys and gave the new-car guys a shot in the arm. It didn’t help out poor people.
“In terms of Toyota, we recently ran a fairly late-model unit and the seller produced documentation that he had it repaired (before putting it on the block).
“But he didn’t sell it and I didn’t ask how far off he was  (from selling it).
“I’m sure everybody’s kind of scared of them at the moment.
“For us, Toyotas were so popular that we didn’t see tons of them to start with anyway.
“I think we have one from a lease company that we’re sending out to get fixed before we sell it. We’ll probably know more about that market when it comes to the floor.
“This whole issue with Toyota will probably have a lot more twists and turns before it’s all over.
“If it comes out that they have it perfectly fixed and handled and it’s a simple deal, it’ll go away real quick.
“But if other things come up and more brands get tagged or other problems come out, it’ll be a tough deal. Everybody will scared of them.”
MAINE
Mark Wescott, general manager, Port City Auto Auction, Richmond, Maine:
“Things have been slow. Consignment is down.
“But in the last couple of weeks, we’ve seen some more activity, some buyers getting hungry and sales are (starting to improve).
“We run between four and six lanes.
“We’re running between 275 and 300 units per week.
“It’s a little off from this time last year because of the economy and low retail sales.
“I am seeing more franchise dealers.
“I’m getting about 300 dealerships represented at the sale. Guys are hungry for cars, so they’re traveling farther and wider.
“They come from all over the Northeast.
“We’re averaging a 72 percent sales rate.
“This sale has traditionally been a high percentage seller.
“That’s just due to the fact that we’re way up here in Maine and we need cars in this area.
“The mood of dealers is ‘uncertainty.’
“They are hoping things turn around, looking forward toward brighter days.
“Prices are up on the cars from the $2,000 to $8,000 units. Late model vehicles, 2008s to 2009s, seem to be struggling.
“I think a lot of the buyers are afraid to step up to buy a late-model-used if the manufacturers might roll out big rebates on new vehicles.
“Normally, guys during this time have been gearing up and stocking up for income tax buyers.
“Fleet-lease volumes are down. Normally, fleet-lease makes up about 10 to 15 percent of our total volume. We are getting fewer units due to repossessions and lease terminations.
“We’re seeing some mileage increases on the straight trades we’re getting. The mileage is up a little bit.
“Our average price overall is about $4,200.
“We are adding some online capability to our existing lanes.
“We have one lane that has cars online – both fleet-lease and dealer consignment. We’re also putting in online capability to additional dealer lanes.”

indiana
EdWhite,owner, White’s Auto Sales, Rensselaer, Ind.:
“I’ve been in business for 37 years.
“I keep between 80 and 100 cars on the lot. That’s about the same as last year.
“We sell about 30 cars a month.
“We’re up a little from this time last year. We’ve lost a couple of new-car stores in town  and another General Motors (franchise) is expected to close this year.
“I don’t know if that’s the reason we’re selling more, but it didn’t hurt us any.
“We carry more cars than trucks. I carry mostly domestics.
“Our overall retail price is between $12,000 and $14,000.
“We buy inventory from new-car stores, the banks and the lease companies. We primarily get vehicles through lease sales and bank sales at auction.
“I usually attend
Manheim Chicago sales.
“We primarily carry two- to three-year-old cars, with 60,000 miles.
“Obtaining inventory is more difficult this year because leasing and new-car inventory has been down.
“We use radio and newspapers, primarily, to advertise.
“We’ve been using the same (strategy) for 20 years.
“About 30 percent of our business is subprime.
“We’ll offer some subprime deals. Subprime was tougher last year. It’s come back a little bit this year.
“We have a service shop. We’ll use it, primarily, to service what we sell. We’ll do outside work, but very little.
“The last vehicle we sold was a 2009 Mitsubishi Eclipse.
“It had 9,000 miles on it. The Mitsubishi sold for $16,500.
“I’m optimistic. I think we’re going to have a good year.
“Last year was a tough year, but things are starting to fall into place.
“Business is  looking pretty good for this coming year.”
MASSACHUSETTS
BillVanLaarhoven, dealer principal, Martin Auto Sales, North Easton, Mass.: 
“The dealership’s been here more than 20 years. I’ve personally had the dealership for seven years.
“We have about 35 cars in inventory and, at any given time, around 20 on the lot.
“Last month was the worst month I’ve had since I’ve been here. We only sold four cars for the month.
“Bank financing is one of the issues. For example, I had a customer looking to buy an $8,000 car, who came in with an 800 credit score with $4,000 down. She could pay cash but wanted to finance it. The local bank turned her down.
“The bank’s attitude used to be, ‘Give me a reason to buy this deal.’ Now the bank’s attitude is, ‘Give me any reason not to buy this deal.’
“There’s also the fear factor, in general. I think the consumers aren’t making a buying decision because they don’t know if they’re going to have a job. People are underwater in their homes. They can’t even get home equity loans.
“But there are opportunities as well. Some people in the subprime business are doing well.
“Also, the (buy-here, pay-here) industry’s changed with tracking devices and monitoring devices. It’s not as much of a risk as it once was when you didn’t have these things.
“However, I sell more of a ‘need’ car than a ‘want’ car. So I can still sell cars in this market, no matter what the economy is doing because I sell a less expensive car.
“The average car on this lot is in the $7,000 to $8,000 range. We’ll carry vehicles from $3,500 and up.
“The average mileage is about 75,000. We’ll mix up domestics and some imports. We’ll have a little bit of everything. But we’ll stay away from the European makes. We do sell some, but as a rule we stay away from them.
“It’s because of the
service issues with the lower-end makes of that car, the life expectancy of the car and the cost of maintaining the car at the end of its life.
“We’ll carry both trucks and cars; three or four pick-up trucks, three or four SUVs, three or four sedans and sports cars, a couple of convertibles – we’ll try to change it around.
“I’ll try to go into the spring market with more sports cars, after buying them in the winter when they’re cheaper.
“We recently(sold) a 2008 Sebring convertible, for example.
“I’m carrying more inventory than I was this time last year because I haven’t sold as many. Normally, I would be going to auctions now but I’m not going now because I have the cars.
“It comes and goes in waves. I might have two bad months a year where I’ll lose money. Then I’ll have several really strong months and then I’ll have average months the rest of the year.”
“I get inventory mostly from auctions, other dealers or trade-ins.
“We use all the area auctions: the ADESA auctions, Manheim New England, Southern Lynnway Auto Auction, Quincy Auto Auction and Auto Auction of New England.
“Obtaining inventory is easy for me because I don’t have to fill a lot of shelves. I imagine bigger dealers may have a little more trouble.
“A lot of the car advertising magazines have gone out of business, like AutoTrader Magazines, AutoExtra and AutoMart. So my print advertising is now almost non-existent and I’m relying heavily on the Internet.
“That was a big portion of my advertising budget two years ago, so I probably saved $12,000 in advertising.
“We do have some secondary lenders and have expanded our subprime deals. It’s a lot more work to make less money, in many cases.
“I just sold a 2002 Mercedes C320, with 50,000 miles. It sold for $11,000.”

MICHIGAN
Mark Zientak, general manager, Bay Auto Auction, Bay City, Mich.:
“We have three lanes. We’re running approximately 200 vehicles on a weekly basis. We’re a little bit down in volume from this time last year.
“It appears as though repo inventory peaked about a year ago for most of the financial institutions. So we’re just naturally down as a result.
“Our sales percentages are approximately 90
percent. They are way up from this time last year.
“I attribute it to the fact that everyone is buying used product. The retail consumers are not buying new.
“On average, we’ll draw in a bout 250 dealers to the lanes. That’s up just a little from this time last year.
“We’ll draw our dealers from all over the state of Michigan. We’ll get a lot of dealers from other Midwestern states. We also draw in a lot of Canadian dealers coming across from Ontario.
“Some dealers are disappointed that they can’t buy enough cars because the prices are so high.
“Fleet-lease consignors are the majority of our business. About 70 percent of our (offerings) are fleet-lease. Our largest fleet-lease consignor is Capital One Auto Finance.
“Again, those volumes are down because of the decline in repossessions.
“We are big into the sales of RV/marina/powersports up here. We run those sales twice a month.
“We’ll run about 350 units for those sales.
“The volumes are slightly down, compared to this time last year.
“We’re selling about 95 percent of those units. That’s much better than this time in 2009.
“I attribute that to the same reason for the boost in sales percentages with cars. Everybody wants to buy used. There’s a lot out there.
As an example, I was going through the numbers of a recent lease-and-repo sale with my staff and there was only one no-sale out of 100 cars.
“On the RV side, in
particular, the manufacturers have been on a hiatus. Some of them shut right down. Some went out of business.
“So some of the buyers are a little skittish about buying some of the new product from manufacturers. Plus, there’s such a huge selection of used inventory available out there, customers can take their time to look around and find something that fits their needs.
“I’ll say we’ll run about 40 percent RVs, 40
percent powersports and 20 percent marine units.
“Our powersports inventory is mostly motorcycles and ATVs. Those dealers seem to be doing very well. They’re excited and buying tons of product.
“We probably haven’t seen a winter market as strong as it has been this season.
“Our average car price is probably about $5,000. That’s similar to what it was last year.
“Trucks and SUVs are doing better than they have been in the past. In this part of the country, the big sellers are still pretty much 4x4s.
“Salvage units seem to be a little tougher to sell than usual. We only run about a dozen each week.
TEXAS
Charles Furr, general manager, Lubbock Auto Auction LTD., Lubbock, Texas:
“Sales are excellent.
“We’ve got three lanes, but I’ll normally run two for a sale. For an AmeriCredit sale we’ll run three lanes.
“We run about 300 units per sale. Since about the third sale in January, sales have broken loose. The income tax money is coming in and the market is doing well.
“I have a feeling we’re running about the same amount of units as this time last year.
“We’re selling about 95 percent of our fleet-lease units and about 30 percent of our dealer consignment.
“People are retailing more and income tax season is hitting, so people are needing some cars. So they’re out here.
“For our AmeriCredit sale scheduled every month, we’ll have great crowds. It drops off a little for other sales. Crowds have been about average, about 150 dealers.
“We draw dealers from about a 300-mile radius. We’re in the panhandle, so we’ll get dealers from Texas, New Mexico and Oklahoma.
“Plus, I’ll get some dealers who come down from Colorado and are looking for specialty units.
“Right now, the mood of the dealers is good. They’re selling cars. I don’t know how long it’s going to last.
“Repossessions have been steady, lease units have been off a little bit from what we had last year. But clients have said they’ve got some more coming.
“Over the last six months to 12 months, franchises dealers have been more active on the used-car end of it – both in buying and selling.
“Their new-car business has dropped of, so they’ve picked up more buy-here, pay-here business.
“We’ve got a lot of buy-here, pay-here dealers.
“The Toyota recall has shut off the sales of (that brand). Dealers don’t know which vehicles are on recall and they don’t even want to look at one now.
“I’ll still run the vehicles that aren’t under recall.
“We have some bad weather over the last couple of weeks - snow and ice. That’s unusual for West Texas. But dealers are still buying.
“Compared to this time last year, the cars that are $5,000 or less are doing better.
“That’s because a lot of new-car dealers are out here buying used cars for their (buy-here, pay-here) lots. It’s just a good price range for those units.
“We’re going to install a simulcast system for our AmeriCredit sales. We’re probably going to get that installed within the next 30 to 60 days. I’m kind of excited about that.
“Some of our dealers out in El Paso have said they’re interested in those sales.”