Auctions

3 anecdotes from auction lanes on how 2018 could unfold

LAWRENCEVILLE, Ga. - 

Along with a trio of perspectives from the auction and dealer worlds, the Black Book Market Insights report looking at the first full week of activity in 2018 showed truck segments with larger depreciation than cars.

Editors also determined only one vehicle group — subcompact luxury crossovers — maintained its value from the previous week. Black Book also noticed compact vans saw the heaviest depreciation, dropping in value by 1.70 percent.

“The first week of the year saw used-vehicle values continuing to decline at a pace not much different from the average weekly decline in the month of December,” said Anil Goyal, senior vice president of automotive valuation and analytics at Black Book.

Volume-weighted, editors reported that overall car segment values decreased by 0.57 percent last week, slightly improved from the average weekly decrease of 0.62 percent in values spotted during the previous four weeks.

Black Book indicated the luxury car segment decreased in value at the highest rate among all the car segments.

Again looking at volume-weighted data, editors found that overall truck segment values (including pickups, SUVs, and vans) decreased by 0.66 percent last week, slightly worse than the average weekly decrease of 0.62 percent in values reported during the previous four weeks.

The opening stanza of 2018 allowed Black Book’s representatives in the lanes to gather expectations from a wide array of industry professionals. The rundown began with an auction owner in South Carolina.

“Auto auctions can always use more cars and that supply need will continue in 2018,” the owner said. “The new tax plan should be a boost. The industry could use that surge since the ‘tax season’ has become shorter.”

Next, Black Book collected the thoughts from an executive at one of the auction chains.

“I believe the supply side of the auction business will grow due to more off-lease and repo units becoming available to remarketers. I also feel that the overall dynamics of the industry will be similar to 2017, which is good.”

Finally, Black Book relayed the outlook of a franchised dealer from Georgia.

“We feel like our new- and used-car business will improve in 2018 from a pretty darn good 2017. All of the economic indicators substantiate that theory and the recently passed tax laws should provide a boost both short- and long-term,” the dealer said.

Where Auction Edge finds expansion in working with independents

CARY, N.C. - 

Hundreds of independently owned, non-chain auto auctions dot the U.S. landscape, each a unique business unto itself.

As is the case in many industries, an individually owned auto auction often faces a different set of challenges than, say, a corporately owned business or chain of businesses.

Keeping up with evolving and rapidly scaling technology on a national level, for example, is one such challenge. 

Thus, pooling resources with similar businesses can often be a deft strategy for these auctions, and that’s where companies like Auction Edge come in.

Chief executive Dan Diedrich has been with the company since its outset in 2012, when Auction Edge was formed through the acquisition of Auction Software, Inc., Auction Pipeline and Diedrich’s former company, AutoLookout.

Six years in, he finds it important for independents to work with a partner like Auction Edge for many resources, the most important of which is that it aims to be “represent the pooled resources of a lot of independent companies,” Diedrich said.

“And (for) any one auction — really, kind of regardless of size — it’s a pretty big challenge to keep up with the evolution of the market, the changing requirement of consignors and buyers, and what the competitive auctions are offering,” he said in a phone interview late last year.

“It’s important because the requirements keep changing. It’s really, really fast-paced and we have a lot of people that get up in the morning, and eat and drink auction and remarketing technology,” Diedrich said.

“When you have a single company that has finite resources to dedicate towards technology, what inevitably happens is, you have single points of failure. You have an individual who has the absolute best intentions and could be very, very skilled,” he said. “But the ‘lottery factor’ is a big thing … if you’ve got a small business, and there’s one or two people in that business that basically keep all of your technology operational, that’s really, really structurally risky to your business.

“And Auction Edge, being a larger company — we’re not a big company, but we’re certainly, I think, more substantial than any single auction can provide — we have built-in redundancies and we have a lot less risk of a single point of failure bringing a company’s business to a halt.”

This strategy, he said, allows auctions to focus on where their strengths lie, while Auction Edge focuses on where its strengths lie.

At the time of the company’s founding, roughly 65 auctions used Auction Software, and “several” used the other two systems, as well, Diedrich said.

“There was kind of a defensive strategy initially, because the auctions were kind of unique in the fact that our shareholders are also our customers. And the reason that they founded the company initially was because they depended on these products so much, they wanted to make sure they were viable, make sure they were vibrant and make sure that they didn’t fall into hands that didn’t have a similar mission,” Diedrich said

“So, the initial mission was largely, ‘we need to protect these systems that operate our businesses.’”

That strategy, as described above, has grown over the past six years. As Diedrich points out, it’s not just about expansion in rooftops using Auction Edge, but rather, how they’re using the various services.

One example of that comes from this past autumn, when the aftermath of hurricanes in Texas and Florida left hundreds of thousands of vehicles damaged, leaving many dealers with depleted inventories.

Auctions used the company’s Edge Pipeline platform to expand the viewing area of the inventory listings. So, auctions in Indiana were attracting Texas dealers, in need of an inventory boost following the storms, via simulcast.

In short, auctions were generating activity from areas they might not have otherwise had exposure, Diedrich said.

“If you just take a market event like that, where you have hundreds of thousands of vehicles being taken out of the market, when there’s a void there, auctions that aren’t necessarily local can expose their inventory and be there to service the needs of buyers in a scenario like that,” he said.

Likewise, another evolution has come in the compliance, which is becoming an increasingly pressing topic for auctions these days amid events like widespread data breaches and Consumer Financial Protection Bureau regulations.

Auction Edge, Diedrich said, emphasizes “security” to its auction partners.

“We’ve done a lot of work to, I guess, button up some risks for auctions … we provide some best practices, consulting. We participate in industry groups, like the Auction Academy … and we give the auctions a little bit of insight, better ways to operate their businesses, in addition to taking a really proactive role in guarding their data and helping them interact with their consignors that have pretty high compliance bars to pass,” he said.

As for where the company goes next, it’s not necessarily adding more auctions, as he said Auction Edge works with close to 250 independents. (He estimates there are about 300 total independently owned, non-chain auctions) 

“Expansion for us, I think, is taking a more active role and a more visible role in the remarketing industry. If you’re a national consignor and you are doing business through a Cox website like Manheim.com or (through) ADESA.com, you’re probably not going to want to go 30 different independent auction systems and interact with those individual systems. So we’ve kind of become the third leg of the stool, if you will, for national consignors and big, big buyers,” he said.  

“So I see growth for us being more of a visible entity in the remarketing industry as opposed to a company that powers auctions. I think Auction Edge as a brand, Auction Edge as a destination is going to be something that we are really going to be focusing on because we do represent a really, really huge percentage of the overall market.”

Auto Remarketing recently interviewed Aaron McConkey of Auction Edge for a podcast at Used Car Week, which can be found below.
 

COMMENTARY: Auction safety is a partnership between auctions & customers

PHOENIX  - 

Safety is front and center at today’s brick-and-mortar auctions — and with good cause. The reason we have such a laser focus on safety is, in my opinion, a micro versus a macro view of this very important issue.

The tragedy at the East Coast auction was horrendous, given the relatively safe environment that has moved millions of vehicles across the block nationwide from the inception of the first auctions decades ago.

Having reviewed the NAAA’s pending guidelines, I see them as a stepping stone that will assist in bringing attention to this issue.  And I say guidelines because I see mandates as counterproductive with such a diverse structural layouts and operational flows at our NAAA auctions. Driver safety classes and pre-sale announcements will enhance attention on sale day and hopefully reduce accidents.

Let’s keep in mind that auctions have always been “dealer-friendly,” and today’s auction operators are creating unique technologically advanced blocks and inserting exposure area bollards to protect their employees and customers. 

But each auction needs to make its own changes to its own facility and mitigate its own exposure and liability in ways that make operational sense. 

Recommendations are always appreciated and mandates are not always the solution to complicated issues. With simulcast and other tools, the paperless block with texted and/or emailed invoices is coming, thus less dealers crossing from one side of the arena to the other to sign their invoices.

Areas can be created for ring-men and buyers to stand that negates the need for them to stand in front or behind vehicles while bidding.  Safety lanes can be installed along with bollards to prevent runaway units from wreaking havoc, and again just their presence highlights the need for safety.

Run-number stickers can be placed on units to be scanned only in an area of a vehicle that does not require you to stand between units or on the narrower side where the block is located. Simply put, let’s not make safety as cumbersome, complicated and frustrating as arbitration is and allow each auction to look at their operational flow and make its own decisions on what they feel optimizes safety for their customers and their staff. 

 As I stated above, safety is a PARTNERSHIP between buyers, sellers and auction staff, where they ALL mutually see the benefit in any changes made on their behalf and for their safety. 

We started by taking another hard look at our areas of exposure and creating what we think helps as reflected in the images inserted into this editorial. 

As always just one man’s opinion.

 

Wholesale auto market trends to track in 2018

LA QUINTA, Calif. - 

Used-vehicle supply and demand, the economy, and interest rates and credit are among the market dynamics driving wholesale used-vehicle sales and prices. 

They were also frequently cited as trends to watch in 2018, by analysts, remarketers and others who attended Used Car Week in November.

The National Auto Auction Association held its 69th annual convention in conjunction with the National Remarketing Conference portion of Used Car Week. Here are some trends and insights shared during panel discussions and on the sidelines at the conference.

Off-lease trucks come rolling in

Yes, off-lease vehicles are still front and center, and is there any wonder? About 300,000 more off-lease cars and trucks will return to the market in 2018 than in 2017, bringing the total to 3.9 million, Cox Automotive predicts. Jonathan Smoke, Cox Automotive chief economist, said used-car unit sales in 2017 would increase roughly 2 percent and continue to rise in 2018, aided by new-vehicle prices that are beyond the budgets of many households. He is also monitoring new-vehicle sales, which he believes will drop to around 16.6 million in 2018.

Crossovers and SUVs, which became very popular on the new-vehicle side three or four years ago, will start to enter the used-vehicle arena in more appreciable numbers in 2018, Smoke said.

“If you label 2018, the key word is continuation; what we’ve seen sets the stage for the future,” he said. “I think the shift away from mid-size cars (to crossovers and SUVs) is a long-term deal, and the used-car market is going to gradually catch up with it.”
 
In the meantime, truck prices are holding up better than car prices, but that is beginning to change, too, said Tom Kontos, chief economist at KAR Auction Services Inc.
 
Price analysis of used mid-size cars and used mid-size SUVs over the last several months indicates that “trucks have lost a little of their sizzle,” said Kontos, who expects the trend to continue.
 
“For a while the SUVs were outperforming cars; it’s about even now,” he said. “They’re pretty much behaving the way the rest of the market is.” Kontos also predicts that the additional used-vehicle volume in the marketplace will lower prices by 2 to 3 percent in 2018.

Volume, repos and the economy

National Auto Auction Association chief economist,Ira Silver believed that auction sales volume would be up about 3 percent for 2017 and grow another 2 or 3 percent in 2018. He based that prediction on another prediction: 2018 new-vehicle sales will fall, but have a soft landing at 17 million.
 
“I think the economic fundamentals of the consumer sector are so strong with low unemployment, the wealth effect of increasing stock prices and housing prices, I think we could get a 17 million year,” Silver said.
 
Kontos has his eye on vehicle repossessions, which he predicts will rise this year, not because people are defaulting on their loans at a faster pace, but because of record new- and used-car sales over the past few years.
 
“The current level of default rates on auto loans is in the range of 1 percent; if you have a bigger pie, that becomes more repos,” Kontos said.

Credit and interest rates

Michael Vogan, assistant director, economist, at Moody’s Analytics, is particularly interested in auto loan default rates, which he agrees are trending upward, especially in the deep subprime sector.

Vogan notes that credit is tightening — “as it has been since the second quarter of 2016” — a factor that will help shift more vehicle sales to the used-car market from the new-vehicle market.
 
Interest rates are also top of mind. Smoke, who called the interest rate hike in December by the Federal Reserve “a given” said if interest rises three times in 2018 as widely expected in economic circles, credit will become tighter across the board.
 
“Dealers will have higher expenses for floor planning as well as consumers for loans,” he said.

New car incentives, leasing

Larry Dixon, senior director, valuation services at J.D. Power, is watching new-vehicle incentives, which he believes will continue to grow in 2018 — representing “one of the biggest negative drivers we see from a used price standpoint over the next couple of years” — but at a slower pace than the double-digit increase the industry saw in 2017.
 
Incentives were expected to finish 2017 at an average of over $3,900 per unit, representing “an all-time high,” Dixon said. 
 
Leasing accounted for “over 30 percent” of new-vehicle sales in 2016, dropped to “roughly 29 percent” in 2017 and is expected to dip again in 2018, because falling used-vehicle prices are putting downward pressure on residual values, Dixon said. As leasing loses luster, manufacturers “will put more money in cash incentives or finance incentives, particularly as interest rates start to rise,” he predicted.

Data analytics

Also commanding attention at the conference was that auction companies and others are investing heavily in developing data analytics to assist manufacturers and dealers buy and/or sell more used-vehicles, more efficiently. Take Black Book.

Among its offerings is scenario analysis, which uses a wholesale customer’s purchase and sales history to devise individualized strategies to weather various market situations, such as an economic downturn or skyrocketing gasoline prices, said Anil Goyal, Black Book senior vice president, automotive valuation and analytics.

“We have data scientists working and we provide very custom analytics depending on the needs of our customers,” he said.

Into the future

The future is always just around the corner and it bears watching said Marty Blue, senior vice president, business development at CarGurus. 
 
Technological strides in autonomous driving and electric cars, growing popularity of ride-hailing services such as Lyft and Uber and alternative retailers, such as
 
Carvana, which delivers used vehicles to consumers’ doors or via giant vending machines in some markets, are trends no one should ignore, she said.
 
But “they probably won’t have much of an impact in 2018,” she added.

Clark County AA joins ServNet

FRANKLIN, Tenn. - 

ServNet announced Wednesday that Clark County Auto Auction has been named the newest member of the independent auction group. 

Clark County Auto Auction is located in Jeffersonville, Ind., and serves dealers in the southern part of the state, as well as the Louisville, Ky., market area.

“I join with the owners of ServNet auctions across the country in welcoming the Clark County Auto Auction to ServNet,” ServNet president Eric Autenrieth said in a news release. “The Fetter family has developed their auction facility into an exceedingly well-run operation, built on a culture of exemplary service and strong customer partnerships. We look forward to Matt Fetter’s contributions to our owners’ meetings and know that the auction will represent the ServNet brand well to buyers and sellers in its region.”

Founded in 1982, the auction recently relocated to a new facility that includes a five-lane service building and reconditioning center, along with a 40,000-square foot main building with a seven-lane auction area, administrative offices and a 100-seat restaurant.

Clark County AA was named the 2017 NAAA Midwest Chapter Auto Auction of the Year for outstanding public service.

After moving, the company donated its former auction facility to its local school system. 

The school system named the facility the Mark Fetter Center for Professional Learning after Clark County Auto Auctions late co-founder. The center has space for training 750 teachers.

“Being named a ServNet auction opens an exciting new chapter for us at Clark County Auto Auction,” added third-generation owner Matt Fetter. “In meeting with ServNet auction owners I have been impressed with their knowledge and experience as well as their willingness to share ideas and their vision for the future.  Collaborating with them will strengthen our auction and fortify the markets we serve.”

Osborn's legacy as mentor continues with NAAA scholarship

CARY, N.C. - 

Editor's note: This story was originally published on Jan. 3. Ken Osborn passed away the following week. Auto Remarketing sends its condolences to his family and ADESA team. An updated version of the story is below. 

The night that Ken Osborn earned his bachelor’s degree in the early 1980s, he saw his mentor Richard Dupriest at the same restaurant where he was dining.

“And I went over to the table where his family was and shook his hand and said, ‘You know, Richard, I owe you and I appreciate what you’ve done for me,’” said Osborn, the late general manager of ADESA Dallas. “‘What can I do to repay you?’ And Richard looked at me and said, ‘You’ve got to pass it on. Now that’s your job.’”

Passing it on, paying forward the fruits of mentorship, is what Osborn had been devoted to these past 35-plus years.

And now that legacy is about to increase tenfold.

The National Auto Auction Association has honored the longtime ADESA leader by naming the Ken Osborn Auction Education Scholarship in his honor.

“That’s absolutely perfect for him,” said XLerate Group chief operating officer Pat Stevens.

That was a pretty common sentiment around the industry when folks talked with Auto Remarketing in December about Osborn’s impact on the auction business.

Bill Roberts, a former general manager at ADESA and now retired, said Osborn’s nature was to counsel employees in a way that wasn’t brow-beating, but rather supportive.

His door was always open, Roberts said.

As such, an education scholarship is a fitting tribute to a career built on mentoring others and empowerment through knowledge.

The scholarship is one of the 12 initially set up in 2008 as part of the NAAA Warren Young Scholastic Foundation.

Black Book had purchased the naming rights to two of those scholarships. When the idea of renaming it in Osborn’s honor came up last year, NAAA planned to rename one of Black Book’s if that company was willing — and it was, said NAAA chief executive Frank Hackett.

“When we approached Black Book and asked them if they would consider renaming that scholarship, they didn’t hesitate,” Hackett said. “They are a first-class company when it comes to doing the right thing and respecting what other people are trying to do to make somebody’s life better.”

So, on Dec. 20 in Dallas, a ceremony was held to award Osborn the plaque and commemorate the occasion.

“I’ve seen him in action whether he’s been an auctioneer on the block at his auction or even mentoring other people in the association,” Hackett said in an interview prior to the ceremony.

“I didn’t have the fortune of serving as the executive when he was president, but from everything I’ve gathered from the staff that were around when he was president, he was a great NAAA president and a true leader in terms of the direction for the association,” Hackett said.

“I’ve never met anyone who’s had anything negative to say about Kenny Osborn. He’s just a class act and somebody that I’ve come to admire and respect over the years.”

And, as it turns out, quite the educator. Or better yet, even a head coach — the kind that incubates talent on the staff that goes on to successful skipper gigs themselves.

“He’s mentored many, many people in the industry. We used to always say that the Dallas location really was a place that a lot of men and women learned the business there under Kenny, and then went on to bigger and better things in the industry,” said Tom Caruso, who is the chief client officer for ADESA’s parent, KAR Auction Services.

Caruso was previously the president and CEO of ADESA, following his tenure in several leadership positions within ADESA. Some of those were parallel to Osborn’s, including the time they spent respectively running the east and west operations of ADESA.

“Many of the men and women who worked in Dallas have gone on to be regional vice presidents, general managers at other locations,” Caruso said. “They’ve always talked about Kenny’s work ethic and just the way he ran the business.”

One of those people is Stevens, the XLerate COO. Interestingly enough, when Stevens was GM of ADESA Dallas, Osborn was his boss and “took me under his wing,” Stevens said.

When Osborn later returned to lead that auction, Stevens was his boss.

“I was his regional (manager) and he was still teaching me things,” Stevens said.

And now in his role leading XLerate’s operations, Stevens still has some takeaways from his days working with Osborn.

For example, the importance of developing employees, looking for the next candidate to step up to the plate and fostering a strong bench.

Or, the importance of having employees educated about the operational and financial side of the business, and awareness of economic and international trends outside of the auction business.

Stevens remembers GMs working for Osborn having to subscribe to the Wall Street Journal and Harvard Business Review, and attend financial statement classes once a month.

Osborn was also a stickler for the importance of college.

“If you do interview people who have worked for me over the years, they’ll all tell you that I grind on them to go to college. It’s a funny thing; it’s an idiosyncrasy with me, but if you’re a general manager that worked with me when you were in my region, I made you read the Wall Street Journal every single day,” Osborn said.

“And these guys still walk up to me and say, ‘Hey, I still read the Wall Street Journal every single day.’ Because if you’re a business student more or less — which a general manager should be — what’s the No. 1 focal tool, bibliography of business that you can get your hands on every day? The Wall Street Journal.

Going back to Osborn’s point about college, that emphasis may have stemmed from his own mentor and former boss and eventual business partner in forming Tri-State Auto Auction and Albuquerque Auto Auction.

When he was hired by Dupriest (initially on the retail side of the car business), Osborn was given an ultimatum. Go to college. If you flunk out, you’re fired.

“And I believed him,” Osborn said. “He helped me go to school early, he helped me go to school late at night. It took me seven years to get a four-year degree because I never actually went to school during the day.”

Osborn remembered being in an accounting class and struggling with financial statements. Dupriest had him sit down with the controller and learn how to read statements.  

“Everything I needed an example of, Richard made it into real-world,” Osborn said. “So I tried to do the same thing.”

For example, the statement classes he ran with his managers.

“You had to understand, it’s one thing to sell a lot of cars; it’s another thing to make a lot of money,” Osborn said. “And that was the way we ran the business.”

As important as the financials are, so is the holistic nature of education. For instance, you need the communication skills from English class in business, too.

That’s why Osborn gave employees books to read and quiz them on it.

That extends to social sciences, as well.

“If you’re not good at psychology and sociology, how are you going to manage 400 people?” Osborn said.

So now, Osborn’s name is cemented with a foundation that will help folks gain the education he so strongly emphasized in his business.

A perfect fit, indeed, as NAAA continues to make education scholarships a priority.

“I just think that’s just the right thing to do. I think it’s important to help our members who have family members that are going to college and are looking for assistance financially as college becomes more expensive,” Hackett said.

The NAAA CEO estimates that more than 150 scholarships have been awarded since the foundation was started.

Appropriately enough, when Osborn was NAAA president in 2001, his theme was “education.”

And so, too, will be his legacy.

Wholesale car prices plummet to close 2017

LAWRENCEVILLE, Ga. - 

Black Book noticed that big crystal ball in Times Square wasn’t the only thing to make a noteworthy drop to wrap up 2017.

This week's edition of the Black Book Market Insights revealed cars softening in value by a record 0.78 percent. Editors determined that midsize cars saw the highest depreciation with a 1.18-percent decrease in value. The compact segment wasn’t far off that pace with a drop of 0.93 percent.

Conversely, Black Book pointed out that small pickups in the truck segment performed the best out of all vehicle categories, maintaining their value from the previous week.

“The last full week of 2017 saw the steepest decline of the year in the overall car segment,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics.

While cars made their volume-weighted, record decline of 0.78 percent — easily representing the highest weekly depreciation rate of the year — editors indicated overall truck segment values (including pickups, SUVs and vans) declined by 0.54 percent. That figure was in line with the average weekly adjustment of 0.57 percent spotted during the previous four weeks.

Black Book reported that the subcompact luxury crossover segment performed the worst, decreasing by 1.38 percent.

While Ryan Seacrest might not have announced the car price drop like the festivities in New York City for New Year’s Eve, Black Book collected anecdotes from the lanes in three different parts of the country, beginning in Texas

“The sellers were holding firm on their floors hoping for an early spring market after the first of the year. This pattern resulted in many no-sales,” Black Book’s lane watcher in the Lone Star said.

Two more reports originated out of the Southeast with the representative in South Carolina stating, “Vehicles under $10,000 sold well, and the attendance was OK,” while down in Florida, the story was, “Dealers are being extra careful not to overspend which is a normal exercise for this time of year.”

Finally up in Pennsylvania where some parts of the state have measured recent snowfall in feet, Black Book’s personnel said, “No-sales seemed to rule the day, although the less expensive cleaner units did OK.”

Update on the specialty markets

As it does on a monthly basis, Black Book shared how the specialty markets are behaving. Here is the rundown:

— Collectible cars: Editors said, “We’ve been looking forward to it for months, and Arizona Auction Week is now here. Hundreds of thousands of collectors, enthusiasts, and dealers are on their way to sunny Scottsdale to attend auctions hosted by Barrett-Jackson, Russo and Steele, RM Sotheby’s, Bonham’s, Gooding, Silver, and Worldwide.”

— Recreational vehicles: Last month, Black Book noted that the values for towable and motorized units had moved in different directions for the first time in several months.

— Powersports markets: Black Book highlighted that the powersports market is entering the 2018 on a positive note. “Most of the segment changes are fairly modest this month, with both cruisers and off-road bikes up a bit, marking an early beginning for the spring selling season,” editors said.

— Heavy duty: Black Book reiterated that key factors for late-model heavy-duty value retention has been condition, mileage and good specifications. “But those attributes play a factor now more than ever,” editors added.

— Medium duty: Black Book closed by noting the medium-duty wholesale market continues its downward trend as the industry opens its doors for 2018. Editors mentioned that this past month, late-model units from 2015 and 2016) dropped by a weighted average of $296 or 0.6 percent, which is less than the previous five months.     

Alliance Auto Auction taps Auction Management Solutions to boost business development

PLAINFIELD, Ill. - 

Before 2017 closed, Auction Management Solutions (AMS) announced that the firm partnered with Alliance Auto Auction for business development consulting.

Adding this operation brings the firm’s client list to 22 total locations.

“Adding a growing, vibrant family of Texas auctions to the AMS family only makes our entire organization stronger. We are very excited to partner with Tim and the Alliance team,” said Tom Stewart, president of Auction Management Solutions.

“One of our goals here at AMS is to focus on providing our customers with the best service we can, while working through a proven sales strategy to help them grow their business,” Stewart said. 

Founded in Texas in 2011, the Alliance mission was to establish personal and trusted relationships with all customers. Alliance is a rapidly growing family of auctions providing vehicle remarketing services to wholesale dealers and commercial consignors.

Its reputation for “customer service to the extreme” is igniting the company’s expansion into new markets, including Abilene, Dallas, Longview, and Waco.

“We are more than a car auction company; we are in the people business,” Alliance chief executive officer Tim Adams said.  “At Alliance, we feel it is important to define the core values which serve as the backbone of the business, brand and culture.

“These principles define the character of Alliance and guide how every member of the team behaves and makes decisions on a daily basis,” Adams continued.

Adams went on to say the Alliance family is committed to:

• Creating a mutually successful partnership with our customers

• Building trust and cultivating loyalty with every customer

• Pursuing excellence individually and as a team

• Supporting our local community

• Mentoring and developing leadership for growth     

Florida dealer, collector takes home last Oldsmobile for $42,000

CARY, N.C. - 

The last Oldsmobile ever built sold for nearly double its original price during a Dec. 15 sale featuring the historic vehicle.

A dealer from Florida took home the last Oldsmobile — a dark cherry 2004 Oldsmobile Alero with only 29 miles — along with the final Oldsmobile Cutlass and Ciera models, says Jeff Barber, owner of the State Line Auto Auction that hosted the sale.

In a phone interview with Auto Remarketing on Dec. 18., Barber declined to offer specifics on the selling price.

However, Fox News automotive editor Gary Gastelu reported on Dec. 18 that the Alero went for $42,000 and the Cutlass, a 1999 model and Ciera, a 1996 model, sold for $17,000 and $15,000, respectively.

In the phone interview, Barber said the buyer has his own large Oldsmobile collection awaiting the arrival of the three historic vehicles.

Over a decade after its debut at the Lansing Assembly Plant in April 2004, General Motors and General Motors Financial decided to sell the last Oldsmobile and the two other commemorative models after their stay at the GM Heritage Center.

“Every year a group of several interested employees including executives go over the Heritage collection inventory,” GM Heritage Center manager Greg Wallace said via email ahead of the sale. “The intent is to keep only the crown jewels and sell selected properties at auction. We then take the proceeds and improve our collection by acquiring historically significant properties we need.”

The Oldsmobile brand’s last model was produced by GM from 1999 to 2004. Its 1901 to 1904 Curved Dash model was the first mass-produced car.

The final Cutlass and Ciera came from GM with just 107 and 127 miles, respectively, according to Barber.

Prior to its time at the GM Heritage Center, the last Oldsmobile was also on display at the R.E. Old Transportation Museum, according to a news release from State Line.

After rolling off the assembly line at the Lansing Assembly Plant in Lansing, Mich., the historic Alero was signed by the Oldsmobile the assembly line employees who built the car.

There were 500 commemorative editions of the Alero model built in 2004, Wallace said, including the last — No. 500.

Oldsmobile sold a few hundred commemorative editions of each of its models the same year, and GM currently has more than 100 historic Oldsmobiles in its collection spanning from 1896 to 2004, according to Wallace.

3 varying assessments of wholesale car price changes

CARY, N.C. - 

As 2017 wound down, J.D. Power Valuation Services, KAR Auction Services and RVI Group all shared their wholesale price analysis for what happened in November.

The report that showed the greatest change came from J.D. Power Valuation Services, which indicated in its latest issue of Guidelines that wholesale prices of used vehicles up to 8 years in age fell by 4.2 percent in November.

“November’s loss was more than anticipated,” analysts said in the report. “However, we expected some compensation towards the end of the year for the lift in demand and strengthening in prices associated with Hurricanes Harvey and Irma.”

After three consecutive months of increases, the J.D. Power Valuation Services’ Seasonally Adjusted Used Vehicle Price Index declined in November, softening by 1.6 points or 1.4 percent to settle at 113.0. Through November, the index is down 5.9 percent compared to the same period in 2016.

Meanwhile, according to ADESA Analytical Services’ monthly analysis of wholesale prices by vehicle model class, values in November averaged $10,797. That figure represented a 1.6-percent drop compared to October, but a 1.2-percent lift relative to November 2016. 

KAR Auction Services chief economist Tom Kontos pointed out that almost all segments saw month-over-month average price declines, although full-size SUV/CUVs had a noteworthy uptick despite higher gas prices.

“Average wholesale prices in November were down month-over-month more significantly than in October and, despite being up modestly on a year-over-year basis, are indicative of an end to the price boost from Hurricanes Harvey and Irma,” Kontos said in his latest installment of the Kontos Kommentary.

“Retail used vehicle demand was soft for the month as well, although CPO sales were solid,” he added. “Lingering truck demand in Texas in the aftermath of Harvey may have again contributed to the strength of midsize SUV/CUV prices in November.”

The team at RVI Group determined real used-vehicle prices (seasonally adjusted, 2- to 5-year-old vehicles) declined slightly on a year-over-year basis in November.

According to the RVI Used Car Price Index, real used vehicle prices (after adjusting for MSRP) fell by 0.1 percent in November when compared to November of the previous year.

Similarly, month-over-month real used vehicle prices declined by 0.1 percent. On a month-over-month basis, about half of the segments saw small gains in used car prices.

“Prices for used vehicles are stronger than expected due to higher demand for both new and used vehicles after the hurricane season damaged approximately 1 million cars,” RVI Group said.

Kontos offered more insights from ADESA’s November data when looking deeper into the market.

Kontos pointed out that average wholesale prices for used vehicles remarketed by manufacturers were up 0.9 percent month-over-month and up 7.3 percent year-over-year.

He also mentioned that prices for fleet/lease consignors dropped 2.3 percent sequentially but ticked up 0.8 percent annually.

Kontos went on to state that average prices for dealer consignors were down 4.2 percent versus October and up 3.7 percent relative to November 2016.

Turning back to Guidelines, J.D. Power Valuation Services projected how the December data might land.

Analysts projected that wholesale prices of vehicles up to 8 years in age are expected to decline by approximately 1 percent. That forecast is slightly less than what analysts recorded a year earlier, which was a dip of 1.7 percent.

In terms of its full-year expectations, J.D. Power Valuation Services pegged used-vehicle prices to drop by 5.6 percent in 2017, which would be 1.5 points higher than what the firm spotted for 2016.

ADESA Wholesale Used-Vehicle Price Trends

   Average  Price  ($/Unit)  Latest  Month Versus
   November 2017  October 2017  November 2016  Prior Month  Prior Year
           
 Total All Vehicles  $10,797  $10,970  $10,672  -1.6%  1.2%
           
 Total Cars  $8,546  $8,718  $8,472  -2.0%  0.9%
 Compact Car  $6,565  $6,578  $6,314  -0.2%  4.0%
 Midsize Car  $7,794  $7,846  $7,446  -0.7%  4.7%
 Full-size Car  $7,190  $7,109  $7,656  1.1%  -6.1%
 Luxury Car  $13,223  $13,680  $13,182  -3.3%  0.3%
 Sporty Car  $13,739  $13,922  $13,064  -1.3%  5.2%
           
 Total Trucks  $12,950  $13,081  $12,726  -1.0%  1.8%
 Minivan  $8,554  $8,775  $8,623  -2.5%  -0.8%
 Full-size Van  $12,940  $13,091  $12,320  -1.2%  5.0%
 Compact SUV/CUV  $10,599  $10,630  $10,439  -0.3%  1.5%
 Midsize SUV/CUV  $11,133  $11,272  $11,473  -1.2%  -3.0%
 Full-size SUV/CUV  $14,208  $13,832  $14,607  2.7%  -2.7%
 Luxury SUV/CUV  $18,844  $19,059  $18,554  -1.1%  1.6%
 Compact Pickup  $9,102  $9,359  $8,755  -2.7%  4.0%
 Full-size Pickup  $16,419  $16,640  $15,548  -1.3%  5.6%

Source: ADESA Analytical Services. October data revised.