Tuesday, 14 May 2013 12:59
Joseph Peanut Cornett, general manager, Ledets Auto Sales, Gonzales, La.:
We have two locations. Weve been in business 16 years. Theyre both in the same area and have (similar) inventory.
We keep about 200 units in inventory. Thats similar to this time last year.
We average about 130 units sold per month. Thats up some from last year. Weve got a great economy in our parish. Were right in the chemical industry belt, so this area and surrounding parishes are doing great. Were located directly between New Orleans and Baton Rouge.
We buy a lot of our vehicles from various auctions. We also buy a lot of vehicles from Enterprise Rent-A-Car vehicles.
Were straight retail.
Our average retail price is about $13,000.
We carry, primarily, model years 2008 and up. The mileage on our vehicles is normally about 60,000.
About 60 percent of our inventory is trucks and sport utility vehicles. About 40 percent of our inventory is automobiles. Thats pretty much what weve carried over the years.
Most of our vehicles are domestics. About 10 percent of our (vehicles) are imports.
We also have our own service department. We service just our own vehicles. The average reconditioning cost per vehicle is about $600 to $650 this year.
We just opened up a five-bay service department in October. We used to (farm it out). The bottom line is eventually going to be much better. I think the (time issue) is also going to work itself out as we get the right guys in the right places.
In terms of advertising, we primarily use News on Wheels, an auto classified magazine. Well do some other local advertising, but we dont use radio or television. Were also a big supporter of the schools and community down here. Thats where we put a lot of our (marketing) dollars.
Were very optimistic about 2013.
Recently, I sold a 2008 Cadillac Escalade DXT. That particular unit had about 60,000 miles on it. We sold that vehicle for about $28,900.
Our owner, Scott Ledet, has been selected the 2013 Louisiana Quality Dealer of the Year. Were going to be at the National Quality Dealer of the Year (event) in Las Vegas for the National Independent Automobile Dealers Association Convention.
Ahmed Belmeshkan, president, New Rio Grande Motors, Fort Worth, Texas:
Ive been in business for 22 years. But Im hoping to retire in two more years.
I have one location. I keep about 50 units on my lot, on average. Thats the same as this time last year.
Ill get my inventory from new-car dealers and from auctions. I dont get as many from new-car dealers like I used to, though. Most of the dealers are bringing their cars to auctions because theyre getting good money.
Its still hard to get those vehicles.
We average about 25 vehicles sold per month. That hasnt changed compared to last year. This year, income tax (returns) were delayed, so that put us in a tough position early.
Were 100 percent buy-here, pay-here. Most of my clients are Hispanic, about 85 percent.
I do speak Spanish. I learned from the past 20 years, having mostly Hispanic customers. I dont have a separate Spanish-speaking sales person.
I never had a sales person. My staff is just myself, along with my family and my mechanics.
My down payments are about $1,500 and up.
My term length is about two years.
Our average retail price is about $9,500.
We carry vehicles that are model year 2003 and up. The average model year is probably between 2004 and 2008.
Our sales are mostly SUVs and pickups. Most of that is for construction workers. We have a good market compared to other states. But its still hard to find good pickups.
The average mileage goes up to 150,000. No higher than 150,000 miles.
I dont sell many imports locally. Any of the imports I get, I will wholesale overseas. We export an average of 20 vehicles a month (wholesale).
I only service the cars I sell. With every car we sell, we give a 30-day warranty covering engine and transmission.
I dont sell warranties or service contracts. I just take care of customers. Thats my advertisement. I dont advertise (through television or radio).
In fact, I have a billboard that Im renting to a franchise dealer.
I invest in my community, from churches and the Boys and Girls Club to schools. About 80 percent of our sales are through referrals.
Now Im looking to hire two people to (develop an Internet program).
Tuesday, 14 May 2013 12:59
Terry Scheetz, general manager, Auto Auction of Montana, Billings, Mont.;
Weve been in business nine years.
We have four lanes and weve been running three. But our volumes are between 500 and 600 units consistently.
Our volumes are about the same as last year, maybe just a few off. But the revenues are up a little.
(The conversion rates) are anywhere from 46 percent up to 60 percent. We can figure on 50 percent as an average. Thats close to last year.
About 150 to 200 units of our volumes are repossessions and fleet-lease units. The rest is dealer consignment.
Repossessions are a little down from this time last year. But they are actually redeeming a lot of them.
Were getting about 150 dealers in the lanes. Thats about the same as this time last year. The Internet sales have picked up, as well. We sell quite a few on the Internet. We use Ringman.
Buyers are searching farther for vehicles.
We draw our dealers consistently from North Dakota, South Dakota, Montana, Wyoming, Minnesota and Washington.
As far as North Dakota, that oil boom has been great for us.
The (bidders) that are coming to the lanes are serious about buying cars. Theyre not there to socialize. Were actually seeing more new-car stores than we had.
Our new-car stores are doing good. In fact, a lot of the new-car stores are buying more franchises. One local store is up to seven franchises.
Overall, our economy is doing pretty good.
We also have in-op sales every week. Its usually a handful of dealer and repos stuff. No big numbers.
We used to have a salvage sale years ago, but sold that off to Copart.
The Government Services Agency sales are good. Well have a couple of them this month, running 70 to 80 units per sale. Those are starting to pick up again.
Weve actually done some of those sales via video in the lanes. We ran one where the cars were in Denver. That was a first time for that.
Our average price coming through the lane is in the $11,000 to $12,000 range. That hasnt changed too much.
Jimmy Rawls, owner, general manager, Rawls Auto Auction, Leesville, S.C.:
We have seven lanes.
Depending on the sale, well run up to all seven lanes.
On average, were running between 500 and 700 units.
Our sales percentages are in the 60 to 65 percent range.
Were a little bit ahead in terms of sold units compared to last year. I think were about 75 to 100 ahead of last year.
Were selling dealer trades.
About 300 to 350 (bidders) are coming in the lanes to bid each week. Thats a few more than this time last year.
Most of the sellers are coming from the Augusta and Columbia areas.
(In terms of bidders), they come from North Carolina, South Carolina and Georgia. We have signed up a lot of new dealers. Although they are not coming from outside those three states, were getting more dealers from those states.
The reason is theyre just hunting for cars. Most of the sales are down in volume, so they are just going to more sales to find cars.
Buyers have been pretty aggressive. They want to buy. They say business is (strong). Sales of used cars and new cars have been pretty good.
About 50 percent of our volume is dealer consignment and 50 percent is fleet-lease-repo.
Prior to the regular sale, weve run a (salvage, in-op) sale. Well run 25 to 50. Those sell pretty well.
We run vehicles from the GSA once a month. Right now, volumes are a little off. But last year, we sold about 1,800 units. I think were going to have about that much or more this year, according to GSA. But theyre just guessing, since many of those will be coming later in the year.
We also have utility sales, for electric and gas companies.
We recently ran 120 units, which is what they had accumulated at that point this year. Those are work trucks, service vehicles, bucket trucks just a variety of equipment they have.
Well have about six of those sales per year.
In terms of whats selling in the regular sales, its anything thats decent with good miles. Later models do well.
But anything thats $10,000 sells well, period, unless its just junk.
For late model cars, anything under 70,000 miles does well. On the older cars, mileage doesnt matter as much, if its 100,000 or more.
The average price coming through the lanes is about $6,000.
Friday, 19 April 2013 10:17
Alan McFadden, president, Als Auto Mart, Portland, Tenn.:
Weve been in business (at Als Auto Mart) for 12 years.
Im also president of the Tennessee Independent Automobile Dealers Association.
I have two locations. One is a cash lot. The other is a buy-here, pay-here lot called 109 Auto Sales that Ive had for 20 years.
In total, I keep about 125 vehicles between the two lots. Thats about my normal inventory.
Last year, it was really difficult to obtain inventory. This year has been much better.
I get about 50 percent of my vehicles through Carmax and the rest through local auctions.
Weve done very well for the last couple of years in terms of increasing sales. Im averaging 75 per month for the year. But we sold 116 in February.
Being prepared for the tax season with a little more inventory helped. I bought early for tax season. I bought 100 cars back in November and December to get ready for it.
Tax season lasted only about three weeks and it was strong. Last year, it was strung out over six weeks, but this year it was fast.
Having the right mix of inventory a lot of imports, like Hondas, Toyotas and Nissans helped quite a bit, too. The most popular cars here are Nissan Altimas, Honda Civics and Accords.
Our inventory is about 30 percent imports. I carry about 65 percent cars, compared to trucks and SUVs.
The average model year of our vehicles is a 2003. The average mileage is about 125,000 to 130,000.
The mileage has been higher than this time last year.
Were actually buying a lot of cars with 170,000 and 180,000 miles, that we never used to buy. Were putting them on (buy-here, pay-here) notes for two years and everybody does great with them.
We recon our vehicles. We average about $350 per car. Thats not bad. Its pretty close to what it was
We have a three-bay mechanic shop. But that is strictly for the cars we sell.
Overall, were about 65 percent buy-here, pay-here.
Although 2013 has been great, Im scared about 2014 because of Obamacare.
We recently sold a 2005 Ford Freestyle. It had 143,000 miles. It sold for $8,995.
Darryl Lawson, owner, Community Auto Sales Inc., Glen Allen, Va.:
I have just the one location.
We probably keep anywhere from 22 to 28 units on the lot.
Thats about the same as this time last year.
We average about 13 units sold per month. Some months we do nine, others we sell 16.
I do (source) some vehicles through new-car trades. I usually visit Manheim Fredericksburg and Manheim (Pennsylvania).
We do subprime deals, but mainly prime deals now.
We sell a fair amount of Lexuses and BMWs, along with vehicles like 2007, 2006 Chevrolet Suburbans. All my buddies say, I dont know how you sell that stuff, but its just that everyone knows where Im at.
Subprime makes up about 5 percent of my sales.
About 60 percent of my units are imports and 40 percent domestic. That mix has stayed the same compared to last year.
We carry 40 percent cars, 30 percent SUVs, and 30 percent vans and trucks.
I also have two what I call church vans, which are 12- passenger Ford vans.
I probably average a 2009, 2010 model year. Its newer stuff. About the oldest vehicle I have on the lot (at press time) is a 2006 Grand Cherokee.
As far as newer vehicles, (at press time) I have three 2012 vehicles and one 2011.
The average mileage overall is 60,000.
For example, I have a 2011 Smart car with 8,000 miles and a Nissan Sentra with 32,000 miles.
Im able to (sell in this niche) because of my reputation. Ill have someone call who wants a vehicle for their son.
Theyll tell me they want a 2010 Xterra and around 35,000 miles and ask me to find it.
However, finding inventory at the right price is bad. I used to tell people who were looking for a car, Ill have it for you in 10 days, no problem. Now its like, it could be 10 days, 10 weeks or 10 months, to find that specific car.
I outsource my detailing. Im averaging anywhere from $75 to $125 per
vehicle. But I buy low-mileage, one-owner, clean-Carfax units.
Theyve been cleaned at the auctions already.
As far as advertising, Ill use Cars.com, AutoTrader and Craigslist just hit
everything out there. It
does OK, but its not like
the old days.
I dont do any television or radio.
We just sold a 2011 Nissan Sentra. It had 34,00 miles. We sold it for $12,800.
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