Auctions

Harvey needed only days to influence August prices

CARMEL, Ind. - 

Hurricane Harvey landed in Texas with a week left in August, and its flooding left an immediate impact on wholesale price movements for the month, according to KAR Auction Services chief economist Tom Kontos.

According to ADESA Analytical Services’ monthly analysis of wholesale used-vehicle prices by vehicle model class released on Wednesday, wholesale used-vehicle prices in August averaged $10,947. The reading represented 0.6 percent uptick compared to July and a 1.9 percent rise relative to August of last year.

“Average wholesale prices in August were once again up largely on the strength of truck prices, although another factor could be early impacts from Hurricane Harvey, which appeared to drive prices up at the end of the month, particularly in Texas,” Kontos said in his latest Kontos Kommentary.

“Luxury cars had a stand-out month, with significant average price increases on both a monthly and annual basis,” added Kontos, who is set to appear again during the National Remarketing Conference at Used Car Week, which begins on Nov. 13 in Palm Springs, Calif.

Kontos also continued his analysis of fleet and off-lease midsize cars and midsize CUVs/SUVs; units likely to have between 36,000 and 45,000 on the odometer. He found that price softening was less evident in August than in previous months when holding constant for sale type, model-year age, mileage, and model class segment. 

In fact, midsize car prices were up on a year-basis as they rose by $113 to $11,667.

“Last month, we noted that midsize SUV/CUV prices were reversing their previous trend and softening more than midsize car prices, and this month the two bellwether segments moved in opposite directions.  This pattern may change in the aftermath of Harvey, as truck demand in Texas should ramp up,” Kontos said. He also elaborated about this point in a video available here as well as at the top of this page.

Kontos closed his analysis by mentioning average wholesale prices for used vehicles remarketed by manufacturers climbed 4.6 percent month-over-month and up 6.5 percent year-over-year.

Prices for fleet/lease consignors were up 1.4 percent sequentially and up 2.3 percent annually.

He also mentioned average prices for dealer consignors softened by 1.2 percent versus July and jumped by 3.0 percent relative to August of last year.

ADESA Wholesale Used-Vehicle Price Trends
   Average  Price  ($/Unit)  Latest  Month Versus
   August 2017  July 2017  August 2016  Prior Month  Prior Year
           
 Total All Vehicles  $10,947  $10,887  $10,738  0.6%  1.9%
           
 Total Cars  $8,732  $8,613  $8,675  1.4%  0.7%
 Compact Car  $6,624  $6,582  $6,597  0.6%  0.4%
 Midsize Car  $7,639  $7,633  $7,748  0.1%  -1.4%
 Full-size Car  $7,063  $7,018  $7,651  0.6%  -7.7%
 Luxury Car  $14,003  $13,582  $13,356  3.1%  4.8%
 Sporty Car  $13,903  $14,164  $13,605  -1.8%  2.2%
           
 Total Trucks  $13,036  $13,058  $12,751  -0.2%  2.2%
 Minivan  $8,777  $8,064  $8,183  2.0%  7.3%
 Full-size Van  $12,317  $11,875  $13,350  3.7%  -7.7%
 Compact SUV/CUV  $10,468  $10,467  $10,673  0.0%  -1.9%
 Midsize SUV/CUV  $11,407  $11,402  $11,448  0.0%  -0.4%
 Full-size SUV/CUV  $13,353  $13,353  $13,292  0.0%  0.5%
 Luxury SUV/CUV  $18,947  $19,099  $18,610  -0.8%  1.8%
 Compact Pickup  $9,599  $9,615  $8,485  -0.2%  13.1%
 Full-size Pickup  $16,989  $17,061  $16,141  -0.4%  5.3%

Source: ADESA Analytical Services. July data revised

Compact SUV demand keeps overall truck values steady

LAWRENCEVILLE, Ga. - 

With some interesting anecdotes about how dealers are handling hurricane fallout, Black Book also highlighted how one specific segment impacted the entire truck segment.

This week’s Black Book Market Insights report mentioned compact SUVs increasing their value noticeably, giving the truck segment an overall boost in retention value.

Editors noticed the car segment depreciated by a standard amount with only one vehicle category — midsize cars — increasing in value by 0.13 percent.

“Active buying continued last week as Texas dealers replenished their inventory. Compact SUVs and midsize cars did well,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics, who is among the wide array of experts coming to Used Car Week, which begins on Nov. 13 in Palm Springs, Calif.

Volume-weighted, Black Book reported that overall car segment values decreased by 0.48 percent last week, similar to the average weekly decrease of 0.41 percent in values over the previous four weeks.

Editors noticed luxury and sporty vehicles in car segments declined the most at 0.87 percent each.

Again volume-weighted, Black Book pointed out that overall truck segment values (including pickups, SUVs and vans) were nearly flat compared to the average weekly decrease of 0.27 percent in values spotted during the previous four weeks.

Editors reported the compact crossover/SUV and compact van segments increased the most among truck segments by 0.37 percent and 0.51 percent, respectively.

As Goyal referenced, Lone Star State dealers are heading to the lanes to find vehicles as consumers impacted by Hurricane Harvey are looking for replacement vehicles. In fact, one of Black Book’s observers at a Georgia auction watched the action happen.

“A dealer from San Antonio bought a lot of vehicles for strong money. He stated that he usually buys 15 units a week but bought 41 at this auction alone today to meet the demand back home,” Black Book’s representative said.

Within the state of Texas, the activity was even more intense.

“Sold almost everything today, and the buyers that usually don’t buy high mileage units were not discriminating today,” Black Book’s lane watcher in Texas reported.

Another report from Texas added, “Hundreds of flooded new vehicles at the auction where they were marshalling them before they were to be crushed.”

Black Book’s other two reports from the lanes mentioned much less active scenes.

From Tennessee: “Lots of no-sales as dealers and commercial accounts are holding their floor prices in advance of the anticipated high demand caused by the recent storms.”

From Colorado: “Low attendance and low vehicle volume but the vehicles that were here sold well.”

AFC launches zero percent floor-plan deal for TradeRev users

CARMEL, Ind. - 

For dealers who still might be a bit apprehensive about buying vehicles online, Automotive Finance Corp. and TradeRev rolled out a new incentive.

AFC and TradeRev on Wednesday announced what they called an “unprecedented” promotion aimed at encouraging dealers to “go digital.” The promotion allows dealers to pay no AFC floorplan financing fees and zero percent interest for 45 days on any vehicles bought and sold on TradeRev.

TradeRev's live, one-hour digital auctions can help dealers sell and source inventory from their desktop, tablet or mobile phone faster and cheaper than a physical auction.

“AFC is committed to helping our customers finance the best inventory possible as quickly and as easily as possible,” AFC president Jim Money said. “Partnering with TradeRev will give dealers access to more vehicles across the growing digital marketplace.

“And this promotion will allow them to experience the speed, convenience and power of TradeRev with the same confidence and value of AFC's physical auction financing,” continued Money, who is among the wide array of executives scheduled to appear during Used Car Week, which begins on Nov. 13 in Palm Springs, Calif.

When dealers use TradeRev, they have access to real-time bidding auctions that run the freshest franchised trades. AFC financing is fully integrated into the TradeRev app, so dealers can immediately begin the financing process as soon as auctions are won.

With thousands of North American dealers utilizing TradeRev, more than 500,000 dealer auctions have been launched through the mobile app generating more than 8 million dealer bids. 

"AFC is one of the largest providers of independent dealer inventory financing in North America — so this partnership marks a significant milestone in the digitization of automotive sales,” said Keith Crerar, executive vice president of TradeRev. “Digital dealers can source cars better, faster and cheaper on TradeRev's digital platform and seamlessly finance vehicles won at rates unmatched anywhere else in the industry.”

The TradeRev/AFC promotion expires Dec. 31. Dealers can learn more at TradeRev.com.

Auction Academy students travel to DAA Northwest for first-hand summer training

FRANKLIN, Tenn. - 

Auction Academy’s largest class, class group 5, traveled to Spokane, Wash., this summer for training held in conjunction with McConkey Auction Group’s Rock & Roll sale at its DAA Northwest location in July.

In addition to enjoying the concert event headlined by the Lynyrd Skynyrd Band, during their two days of training, the Auction Academy said the class also saw first-hand how much work and preparation goes into the large event.

Following a tour of DAA Northwest, on day one, students sat for lectures on branding, marketing and promotional events by the auction’s senior vice president of operations Greg Mahugh and vice president of marketing Mitzi VanVoorhis, followed by a presentation by AuctionEDGE chief executive officer Dan Diedrich.

“The Auction Academy sessions are well organized and executed, and I was impressed that DAA Northwest’s department managers conducted many of the training sessions,” said Matt Fetter, co-owner of Clark County Auto Auction and current Academy student.

“Auction Academy has developed a tremendous learning environment with onsite auction visits reinforcing the discussion topics.  Not only did we learn from the experts during our session in Spokane, but we had a unique opportunity to see it all in action at a top-tier auction facility,” he continued.

Training on day two included meetings with Dave Woods, head of remarketing for Harley Davidson, Gonzaga University professor Shann Ferch who led a discussion on effective leadership and Mike Antich of Bobit Business Media, who spoke to students about the do’s and don’ts of attending industry trade conferences.

“Being on-site during DAA Northwest’s Rock & Roll sale was a tremendous experience for all of us,” Penny Wanna, the president of Auction Academy, added.

“Our sincerest thanks go to Bob McConkey, Greg Mahugh and the entire staff of DAA Northwest for so graciously allowing the Academy to be right in the middle of the auction action while they handled record-breaking consignment volumes and all the extra details involved in producing such a monumental promotional event.”

This month, Auction Academy’s year will close with a trip to Baltimore for two days of training with class 5 beginning on Sept. 25.

The Academy said the visit will include a full day at NADA headquarters, followed by a day with BSC America’s president R. Charles Nichols and his team at the all-new Bel Air facility.

Copart expands New Orleans location, its 12th this year

DALLAS - 

Copart announced Thursday the expansion of its New Orleans location, which marks the company’s 12th expansion this calendar year.

"So far in 2017, we've expanded locations as far west as California, as far east as New Hampshire, and several in between," Copart chief executive officer Jay Adair said in a news release. "Across the United States, each expansion bolsters our ability to serve our insurance customers."

The Louisiana auction is located at 14600 Old Gentilly Road. Online vehicle auctions are held at the location every Wednesday at noon (CT).

"We recommend visiting our locations to inspect vehicles in person—or hiring an independent inspector to do the job for you," added Bobby Ashford, general manager of Copart's New Orleans location.

Copart provides a list of certified, third-party inspectors on its website.

In addition to bidding on current inventory via kiosks at the New Orleans location, eligible buyers can also bid from computers, smartphones and tablets.

2017 Best Auto Auctions to Work For

CARY, N.C.  - 

Auto Remarketing’s Best Auctions to Work For, which is sponsored by CARS Recon, is a free workplace study for the auto auction industry that recognizes the best auto auctions to work for on an unranked basis.

It is designed and intended for individual auction locations — not corporate or headquarter offices. It is absolutely free for these individual auctions to participate.

Winners are recognized both in this edition of Auto Remarketing and at the National Remarketing Conference/NAAA Convention during Used Car Week

Auto Remarketing, teaming with the Best Companies Group (BCG) in Pennsylvania, underwrites the study. The study is managed by BCG, and the data is analyzed 100 percent by the staff at BCG.

Best Companies Group directly administers all surveys and manages and analyzes all data and information that is gathered.

The Best Companies Group assesses the data from the group of auctions choosing to participate and develops metrics and standards based on that data to determine which auctions are named to the list of Best Auto Auctions to Work For. Thank you to all who participated this year, and congratulations to those recognized in this year’s study. 

And now, without further, ado, the 2017 Best Auto Auctions to Work For:

Auctions in Motion
DAA Northwest
DAA of Chattanooga
DAA Seattle
KCI Kansas City
Louisiana’s 1st Choice Auto Auction
Manheim California
Manheim Dallas
Manheim Dallas- Fort Worth
Manheim Darlington
Manheim Fredericksburg
Manheim Hawaii
Manheim Keystone PA
Manheim Lakeland
Manheim Mississippi
Manheim Nashville
Manheim Pensacola
Manheim Philadelphia
Manheim St Pete

Best of the Rest:
While their overall scores were just shy of the high mark required to be included in the Best Auto Auctions to Work For, they represent the up-and-coming, and we expect to see many of the following on next year’s Best Auto Auctions to Work For list:

DAA of Huntsville
DAA of Memphis
DAA of Mobile
DAA of Murfreesboro
Texas Lone Star Auto Auction

Stay tuned for the Sept. 15 print and digital issues of Auto Remarketing, which includes Q&As with the respective general managers of the winning auctions, photos from the honorees and in-depth workplace survey data from the Best Companies Group. 

Editor’s Note: ADESA auctions did not participate in the 2017 Best Auto Auctions to Work For Study. To see the company’s auctions that earned recognition last year, reference the Sept. 15, 2016 issue of Auto Remarketing. 

Silverstein retiring from Ford after 35 years with automaker

CARY, N.C.  - 

After 35 years with the automaker, Linda Silverstein — Ford’s general manager of remarketing and rental operations — is retiring.

A pillar of the used-car industry, Sept. 29 is the last day at Ford for Silverstein. She has led the automaker’s remarketing since October 2002 and headed its rental operations since January 2007.  

Asked what she has enjoyed most about this business, Silverstein told Auto Remarketing by phone: “It’s all about the people,” later adding, “The people have made this industry great.”

And the appreciation is certainly reciprocated. Her awards from peers in the auction business are numerous.

They include such honors as the 2017 Barbara Cox Woman of the Year recognition from Cox Automotive, a 2009 induction into the NAAA Hall of Fame, recognition as a Warren Young fellow by NAAA and the 2010 Consignor of the Year award at the Conference of Automotive Remarketing.

Respect from her peers is also evident in emailed responses from top leaders in the business.

“Linda is a person of great integrity who has always pushed to make the entire remarketing business better and more efficient,” Cox Automotive president Sandy Schwartz said. “As a tremendous ambassador of Ford, Linda also helped promote diversity and has been a wonderful mentor to so, so many. We all will miss her acumen and big smile.”

Kurt Kohler, senior vice president of fleet and acquisition/remarketing at Enterprise Holdings, added: “Linda, you have been a great contributor to the fleet industry and a terrific representative for the Ford Family.  Congratulations on a fantastic career!  I look forward to our continued friendship for years to come.”

“Not only has Linda been a great business partner, but she also has been a friend. She has always represented the Blue Oval proudly and professionally,” said Mike Schmidt, senior vice president of fleet services at Avis Budget Group. “Our business dealings may be coming to an end, but there are still more burgers at Millers Bar to share!”

The auction industry is one where every day can be different, something that Silverstein finds enjoyable.

“It’s always been exciting,” she said.

But her three-and-half decades in the industry go far beyond the remarketing lanes or rental car lots.

According to a bio she shared, Silverstein has been with the Blue Oval since 1982, joining the company right after earning an MBA that same year at Babson College.  Silverstein graduated from the University of Massachusetts in 1980 with a degree in economics.

Her first role was as an analyst in the Ford division’s district sales office in Detroit, a city she ended up working in for six years, taking on roles as truck merchandising manager, market representation manager, distribution manager and field manager. 

Silverstein went on to work in marketing and sales positions for the company’s Ford and Lincoln-Mercury divisions. Her posts also includes times in dealer communications, advertising and cross-vehicle line strategy. Additionally, Silverstein also worked in the sales operations controller’s office and in product development’s strategy and advanced planning office.

As the head of Automotive Remarketing Services, Silverstein launched a new venture for the automaker, through which the department provided remarketing services for customers outside of the automaker (now a part of the company’s vehicle remarketing division).  She later became auction department manager.

As for what’s next, Silverstein told Auto Remarketing she has not made any set plans, but said she would take some time and decide what’s next in the New Year.

 

Top 10 states that have most flood-damaged units in operation

CENTREVILLE, Va., & SANTA MONICA, Calif. - 

As Edmunds offered five suggestions for how to spot a flood-damaged vehicle, new research from Carfax released on Wednesday suggested that drivers may be behind the wheel of more than 325,000 previously flooded vehicles.

Analysts computed that number is a 20-percent increase from 2016.

Carfax also compiled a list of 10 states that have the most vehicles reported as flood damaged by a state’s department of motor vehicles (DMV) and insurance companies. That rundown includes:

1. Texas: 51,000

2. Louisiana: 29,000

3. Pennsylvania: 20,000

4. Florida: 19,000

5. Kentucky: 16,000

6. Illinois: 15,000

7. South Carolina: 13,000

8. Virginia: 13,000

9. North Carolina: 13,000

10. Michigan: 11,000

Carfax shared the frustration of one consumer who purchased a vehicle unaware of its flooded past.

“I bought a car last year, and the seller never told us anything about it being a flood car,” said Charlene Geiger from Pennsylvania. "When we got home and ran a Carfax, there it was — a flood car from Hurricane Sandy. It showed that the seller bought it as a salvage car and the title was washed when he brought to Pennsylvania. We lost $16,000 over all of it.”

In addition to the current total, Carfax suspects that several hundred thousand more flooded vehicles may emerge from hurricanes Harvey and Irma. Historically, the company said about half the vehicles damaged by floods end up back on the market.

Carfax explained that flooded vehicles rot from the inside out as water corrodes the mechanical parts, shorts the electrical system and compromises safety features like airbags and anti-lock brakes. Health concerns are an added problem, as mold and bacteria permeate the soft parts of the car.

“Our data shows there’s still much work to be done in helping consumers avoid buying flood damaged cars,” said Dick Raines, president of Carfax. “They can, and do, show up all over the country, whether it be a few miles or hundreds of miles from where the flooding occurred.

“With two devastating storms already this year, it’s vital for used-car buyers everywhere to protect themselves from flooded cars that may wind up for sale. Start with a thorough test drive, a vehicle history report and a mechanic's inspection before buying any used car,” Raines continued.

In the wake of Hurricanes Harvey and Irma, Carfax is letting consumers check for flood damage free of charge at carfax.com/flood.

Edmunds senior consumer advice editor Ron Montoya reiterated a similar position about watching for flood-damaged units, referencing some of the trends Carfax shared: 

“Roughly half of the vehicles with salvage titles are resold, often in places where the flood never hit, and the sale of flood-damaged cars happens most often in private-party sales than on dealer lots,” Montoya said. “Given that electrical and mechanical problems can potentially surface long after the seller is gone, used-car buyers are at risk of owning an unreliable car with no recourse against the seller.

“Reputable dealers use vehicle history reports to check cars they are offered so they can avoid such problems, and car shoppers should follow that example by checking the vehicle’s history, while looking for signs of a flood-damaged car,” he added.

Montoya then went into detail about the five ways people can spot a flood-damaged vehicle, including:

1. Be alert to unusual odors. Musty or moldy odors inside the car are a sign of mildew buildup from prolonged exposure to water. It might be coming from an area the seller is unable to completely clean. Beware of a strong air freshener or cleaning solution scent since it may indicate the seller is trying to cover up something. Run the air-conditioner to see if a moldy smell comes from the vents.

2. Look for discolored carpeting. Large stains or differences in color between lower and upper upholstery sections may indicate that standing water was in the vehicle. A used car with brand-new upholstery is also a warning sign since a seller may have tried to remove the flood-damaged upholstery altogether.

3. Examine the exterior for water buildup. Signs may include fogging inside headlamps or taillights and damp or muddy areas where water naturally pools, such as overhangs inside the wheel well. A water line might be noticeable in the engine compartment or the trunk, indicating that the car sat in standing water.

4. Inspect the undercarriage. Look for evidence of rust and flaking metal that would not normally be associated with late-model vehicles.

5. Be suspicious of dirt buildup in unusual areas. These include areas such as around the seat tracks or the upper carpeting under the glove compartment. Have an independent mechanic look for caked mud or grit in alternator crevices, behind wiring harnesses, and around the small recesses of starter motors, power steering pumps and relays.

IAS picks Columbus Fair AA to pilot latest management tech

COLUMBUS, Ohio - 

Integrated Auction Solutions announced Tuesday that Columbus Fair Auto Auction (CFAA) will be the first to experience the latest version of its AuctionMaster auction management system.

AuctionMaster Version 3 (V3-AMS) replaces CFAA’s AS400 green screen management system, which the auction has used for 25 plus years, according to IAS.

Following proof of viability at CFAA, IAS said the new system will be made available to other auctions after September.

“Providing the most state of the art AMS is finally here. We are strategically launching at CFAA, an auction with great size, with many third party integrations, manufacture modules, and reconditioning facilities, to just start the list,” IAS vice president of sales and business development Peter Levy said in a news release.

“We are dedicated to give the auction community options and will integrate with anyone that our auction partners desire,” he continued.

The V3-AMS system has full functionality from anywhere, allowing dealers to easily manage inventory, dealers and accounts.

It features a fully integrated block with AWG simulcast, along with a both a web-based option and tradition local server option, according to IAS.

“Our corporate mission has long been to protect the interests of independent auction owners”, added Alexis Jacobs, chief executive officer of IAS. “This technology provides our community the tools it needs to maintain sustainable, scalable, stable, industry-standard services our customers expect.”

 

Price moves reflect dealers hunting to replace damaged inventory

LAWRENCEVILLE, Ga. - 

Damage by the horrific hurricanes impacting the United States during the past two weeks is starting to influence what Black Book is noticing at the auction.

This week’s Black Book Market Insights report showed a little strengthening in the wholesale space; most likely due to dealers looking to begin replacing damaged or destroyed vehicles caused by Harvey and Irma.

“Dealers are actively looking to buy inventory and shipping vehicles to the Houston area, anticipating strong demand due to replacement of damaged units,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics.

Looking at volume-weighted data, editors found that overall car segment values decreased by 0.27 percent last week, better than the average weekly decrease of 0.49 percent in values spotted during the previous four weeks.

Black Book reported that the prestige luxury car and near luxury car segments declined the most by 0.62 percent and 0.46 percent, respectively.

Again viewing volume-weighted information, editors determined overall truck segment values — including pickups, SUVs and vans ticked 0.15 percent lower last week, an improvement compared to the average weekly decrease of 0.33 percent in values registered during the previous four weeks.

Black Book added that the sub-compact crossover segment declined the most among truck segments, dropping by 0.66 percent.

Beyond the raw data, Black Book’s observers in the lanes watched how dealers who needed inventory because of the storms made moves to get necessary inventory. Editors shared multiple reports coming out of Georgia.

“We would have expected the market to soften after Labor Day, instead values for some model years and segments are moving upward sooner than expected as demand picked up due to hurricane damage,” one lane watcher said.

Another report from the Peach State indicated, “Dealers from Texas were seen buying cars here because they can’t find cars in their area.”

And one more observer stationed in Georgia added, “Rental car units were lower in auctions as they were put back in rental use and the ones for sale had higher miles.”

The other two Black Book representatives who reported back to headquarters this past week shared anecdotes out of the Midwest.

One came from Michigan, which noted, “Retail is slow here, therefore dealers are being very picky in their wholesale purchases. Lots of hesitation as they place their bids.”

A recap out of Illinois mentioned, “A seller expressed that it was a great day for older vehicles and an exceptional day for clean vehicles.”