The damp chill of Michigan in December didn’t prevent Insurance Auto Auctions from celebrating this week.
The business unit of KAR Auction Services opened of its new facility in Flint, Mich. The new branch is IAA’s third strategic location serving the northern Midwest market of Michigan.
The site boasts a new state of the art facility, and its 18 acres allow for future expansion.
“The new facility will help us continue to offer our best-in-class customer service and auction experience to our clients in east central Michigan,” said John Kett, chief executive officer and president of Insurance Auto Auctions.
“At IAA, we are always working to improve the customer experience, and this new facility, with the latest auction technology, allows us to upgrade the buying and selling experience for our customers who previously visited our Bay City facility,” Kett continued.
“This new location in the metropolitan area of Flint also provides more convenience for both our employees and customers,” he went on to say.
The new IAA facility in Flint replaces the IAA Great Lakes facility in Bay City, Mich. IAA Flint will host auctions on Tuesdays, with preview days held every Monday.
Dealers can visit IAAI.com for more information.
The newest installment of the Market Insights Report from Black Book indicated how December is turning into a joyous time so far for both consignors and dealers.
The latest wholesale price data and anecdotes from sale days showed that used-car managers are finding more affordable vehicles to fill their inventories while consignors are fetching satisfactory funds for the units they’re sending down the lanes.
According to volume-weighted data, editors found that overall car segment values decreased by 0.72 percent last week. In comparison, Black Book noticed market values had decreased by 0.57 percent on average during the previous four-week stretch.
Among car segments, editors pointed out the full-size car, midsize car, sub-compact car and sporty car experienced the biggest drops with declines ranging from $49 to $120.
Again, looking at volume-weighted information, Black Book found that overall truck segment values (including pickups, SUVs and vans) dropped by 0.64 percent last week. In comparison, truck values had softened by 0.49 percent on average during the prior four-week period.
In truck segments, editors said the minivan and small pickup segments performed the worst, sliding by $167 and $173, respectively.
“Mainstream used-sedan values declined the most last week since January of this year. After bucking the trend for most of the year, the depreciation rates are finally reverting to seasonal expectations,” Anil Goyal, executive vice president of operations for Black Book, said in the report.
Meanwhile, what Black Book observers gathered from sale days reflected an upbeat start to the closing month of the year. Here is the rundown:
— From Indiana: “Supply is still low. Trade-ins are down for dealers so they are buying at the auction in order to maintain inventory.”
— From Pennsylvania: “Dealers were prepared to buy and did just that, which resulted in a 70-percent sales percentage for the auction.”
— From California: “Fewer no-sales, which indicates more realistic floors are being considered and set by the sellers.”
— From Massachusetts: “The big consignors said that they were happy as the money ranged from good to very good.”
Update on the specialty market
As they do on a monthly basis, Black Book editors also shared their perspectives on what’s happening in the specialty markets. Here are their observations:
— Collectibles: As the industry delves deeper into the final month of 2018, Black Book noted that much of the talk is about the upcoming auctions in Scottsdale, Ariz., in January. Silver kicks things off on Jan. 10. Barrett-Jackson gets things started in earnest on Jan. 12, and Worldwide, Bonhams, Gooding, Russo and Steele and RM Sotheby’s begin their previews with their main events starting towards the end of that week and running through the weekend.
— Recreational: Black Book mentioned the average selling price of motorized units at auction last month dropped roughly 9 percent, “which sounds significant, but if you exclude September’s unexpected price spike, the drop is really only about 1.5 percent from two months ago, which would be expected going into colder weather.”
— Powersports: With the holiday season officially upon us, Black Book said the powersports market has entered its typical winter slowdown. “The changes in value this month are fairly moderate considering the time of year, with most segments only down 1 percent or so,” editors added.
— Heavy duty: Editors indicated more used trucks are needed to satisfy the growing demand for both long haul and regional delivery needs. Franchised dealers, independent dealers and other used-truck sales venues need to find more inventory to take care of their customer’s used truck needs,” Black Book said.
— Medium duty: Black Book added that demand is consistently increasing for units in these segments as scarcity in used supply continues to be an issue for some segments.
ADESA has a new general manager for its Buffalo, N.Y.-area location.
The GM of ADESA Buffalo is now David Fountaine, whose background includes more than two decades in the corporate, educational, non-profits and government arenas — including close to 14 years with Maritz, a company that provides market research, sales incentives and training/development services.
According to a news release from ADESA, his roles with Maritz including working as the regional business partner for more than 400 of an OEM’s dealerships well as his time as field force generator in a different OEM project.
Warren Clauss, whose new role is within ADESA’s strategic initiatives, had previously been the GM of the Buffalo auction. Clauss was also president of the National Auto Auction Association this past year and is its current chairman.
“Dave has strong experience in training, development and sales — holding various management positions throughout his extensive career,” said Geoff Parker, Midwest regional vice president at ADESA, in a news release. “His success at every level in process and performance improvement, business development, and customer relationship building will be a great asset in fostering our customer-experience focused culture.”
An experienced manager with stints at both ADESA and Manheim now is in the independent auction space.
Earlier this month, Dealers Auto Auction Group announced the addition of industry veteran Ryan Edwards, who has been named as general manager of Dealers Auto Auction of Murfreesboro in Murfreesboro, Tenn.
Edwards brings more than 20 years of auction experience, previously working for Manheim as general manager of its Cincinnati location and most recently with ADESA as general manager of its Phoenix operation.
“I am very excited to be a part of such an amazing auction group. This is truly a great opportunity for me to help grow what is already a very established auction location,” Edwards said.
Scott Keener, chief operating officer of Dealers Auto Auction Group added, “We are very excited to have Ryan as a member of our executive team. His successful leadership and overall knowledge within the industry will be an invaluable benefit to the group.”
Dealers Auto Auction of Murfreesboro operates on more than 35 acres and offers more than 500 units weekly across five action lanes. Weekly consignors include Credit Acceptance, Element Fleet Management, United Auto Credit, Caprock Remarketing and more.
DAA Murfreesboro is a full-service location, offering full reconditioning and mechanical services as well as in-house local transportation.
Black Book’s representative watching a sale in California as November closed shared this observation: “The most common complaint from the dealers was the continued high prices paid to secure inventory.”
Reinforcing that dealer claim is the fact that Black Book’s Used Vehicle Retention Index climbed for the seventh month in a row. The November reading came in at 116.5, marking an uptick of 0.2 percent.
The index has been on a steady march higher since Black Book placed its May reading at 112.0. Editors pointed out that the only time this year that the index has moved lower came back in March when the reading dropped to 112.0 from 113.3 registered in February.
Black Book also highlighted the segments with the highest month-over-month gains in the retention index included:
• Midsize luxury crossover/SUV: up 0.8 percent
• Subcompact car: up 0.6 percent
• Midsize car: up 0.5 percent
• Premium sporty car: up 0.5 percent
• Luxury car: up 0.4 percent
“Cars and sedans continue to outperform many truck segments in the index, as many used car models offer great value for shoppers looking for affordable alternatives to new cars that are offered at high sticker prices with increasing interest rates,” said Anil Goyal, executive vice president of operations at Black Book.
“December is always an interesting month as aggressive deals are offered to reach year-end sales goals, but by January we will again begin to prepare for the spring tax-selling season,” Goyal continued.
The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on 2- to 6-year-old used vehicles, as percent of original typically equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage and condition.
The index dates to January 2005 when Black Book published a benchmark index value of 100.0. During 2008, the index dropped by 14.1 percent, while during 2016, the index fell by just 6.4 percent.
During 2011, the index rose strongly from 113.3 to 123.0 by the end of the year as the economy picked up steam and used vehicle values rose higher. It continued to remain relatively stable, rising slightly until May of 2014 when it hit a peak of 128.1.
To obtain a copy of the latest Black Book Wholesale Value Index, go to this website.
Latest weekly movements
Black Book arrived at its latest index reading after analyzing the last week of auction activity conducted in November.
The most recent installment of Market Insights from Black Book showed that values are softening even if the index has yet to show it.
Editors indicated that their volume-weighted data showed overall car segment values dipped by 0.64 percent last week. That pace is slightly higher than what they witnessed during the previous four weeks as Black Book watched car values decrease by 0.56 percent on average.
Among cars, Black Book noticed the compact car segment experienced the biggest drop, sliding by 0.77 percent or $60.
Looking again at volume-weighted information, editors found that overall truck segment values (including pickups, SUVs and vans) dropped by 0.79 percent last week. That rate is almost double what Black Book recorded during the previous four weeks when truck values declined by 0.42 percent on average.
In the truck space, editors determined the full-size crossover/SUV segment sustained the most significant drop, falling by 1.19 percent or $261.
Beyond what a lane watcher stationed in California shared, Black Book observers passed along anecdotes that might reflect a similar scene at the sale you most frequent. The rundown included:
— From Florida: “We are having more no-sales, but the overall market remains fairly steady for late fall.”
— From Wisconsin: “Dealer attendance was good, as was the bidding and selling.”
— From Indiana: “The market is a little sluggish, but anything in clean condition continues to sell.”
This past spring, Cognosos landed a partnership with Columbus Fair Auto Auction (CFAA) to employ its inventory management platform that’s built to provide automotive operations an effective and affordable way to track vehicles across both large and multiple lots in real-time.
Coinciding with Used Car Week 2018, Cognosos announced that it finalized another relationship within the independent auction space; this time with the McConkey Auction Group’s operations in Spokane, Wash., Kansas City, Mo., and Seattle.
Officials highlighted that DAA Northwest led the way, installing the Cognosos RadioTrax at its 90-acre Spokane campus last July. Prior to the installation, auction staff and dealers alike occasionally spent hours searching for vehicles that had been test-driven and not returned to their allocated spots.
“With RadioTrax, we locate vehicles in seconds,” DAA Northwest general manager David Pendergraft said. “We did a soft launch of the app in conjunction with our 5,000-unit Rock & Roll Sale last summer. Both dealers and employees were immediately amazed by the time it saved them.”
DAA Northwest has experienced increased efficiency throughout its auction operations due to the Cognosos solution.
“It was surprising to see the impact it had across all departments. Not only outside operations, but also fleet and dealer sales, arbitration and management,” Pendergraft said.
Cognosos insisted that RadioTrax has enabled dealers who visit McConkey Auction Group locations to inspect more vehicles and has also allowed transport companies to pull and remove vehicles more quickly, leading to faster dealership deliveries.
“RadioTrax gives us the chance to deliver radical customer service to our dealers, corporate accounts, vendors and staff,” DAA Seattle general manager Dave Blake said.
Both KCI and DAA Seattle recently added acres of paved consignment parking, so integrating RadioTrax at all three MAG locations was a logical next step. Incorporating the game-changing tool was seamless, according to Cognosos technical support staff who were on-site before, during and after the app went live at each McConkey Auction Group location.
“There were no disturbances — only improvements to the auctions’ service levels,” McConkey Auction Group president and chief executive officer Bob McConkey said.
Cognosos chief executive officer Steve Robb added,“MAG has been a great partner throughout this process. We have enjoyed and appreciated working with an organization that is willing to apply innovative technology.”
Cognosos’ free RadioTrax app is available for Android devices via GooglePlay and for iOS devices in the Apple App Store.
KAR Auction Services chief economist Tom Kontos didn’t need an elaborate explanation to describe movements associated with the October wholesale price data he and his team assembled.
According to ADESA Analytical Services’ monthly analysis of wholesale used-vehicle prices by vehicle model class, wholesale prices in October averaged $11,059.
That’s 0.7 percent higher compared to September and 0.8 percent above last October’s reading.
“Strong retail sales supported used-vehicle values in October, as wholesale prices recovered from declines in September,” Kontos said.
Where price movements ended up being more pronounced came when Kontos and the KAR team checked 3-year-old vehicles with 36,000 to 45,000 miles. When holding constant for sale type, model-year age, mileage, and model class segment, prices were up more significantly on a year-over-year basis for both midsize cars and midsize SUV/CUVs.
Kontos indicated midsize car prices in that slice climbed 4.4 percent or $494 to $11,786. He added that midsize SUV/CUV price jumped 6.2 percent or $1,147 to $19,769.
The KAR expert continued his latest Kontos Kommentary by noting average wholesale prices for used vehicles remarketed by manufacturers rose 1.0 percent month-over-month and 1.1 percent year-over-year.
Meanwhile, Kontos pointed out that prices for fleet/lease consignors softened 2.0 percent sequentially but increased 6.1 percent year-over-year.
He also mentioned average prices for dealer consignors were down 2.4 percent versus September and 2.3 percent relative to October 2017.
Kontos closed his latest update by sharing sales information he received from the National Automobile Dealers Association.
Retail used-vehicle sales by franchised dealers increased 11.8 percent year-over-year in October and 10.6 percent for independent dealers.
Kontos added that October certified pre-owned sales ticked 0.9 percent lower from the prior month but climbed 6.4 percent year-over-year, according to figures from Autodata. On a year-to-date basis, he said CPO sales are up 2.2 percent versus last year.
ADESA Wholesale Used-Vehicle Price Trends
| |
Average |
Price |
($/Unit) |
Latest |
Month Versus |
| |
October 2018 |
September 2018 |
October 2017 |
Prior Month |
Prior Year |
| |
|
|
|
|
|
| Total All Vehicles |
$11,059 |
$10,981 |
$10,970 |
0.7% |
0.8% |
| |
|
|
|
|
|
| Total Cars |
$8,672 |
$8,617 |
$8,718 |
0.6% |
-0.5% |
| Compact Car |
$6,586 |
$6,533 |
$6,578 |
0.8% |
0.1% |
| Midsize Car |
$7,565 |
$7,491 |
$7,846 |
1.0% |
-3.6% |
| Full-size Car |
$7,874 |
$7,655 |
$7,109 |
2.9% |
10.8% |
| Luxury Car |
$13,311 |
$13,380 |
$13,680 |
-0.5% |
-2.7% |
| Sporty Car |
$14,315 |
$14,327 |
$13,922 |
-0.1% |
2.8% |
| |
|
|
|
|
|
| Total Trucks |
$13,079 |
$12,949 |
$13,081 |
1.0% |
0.0% |
| Minivan |
$8,660 |
$8,314 |
$8,775 |
4.2% |
-1.3% |
| Full-size Van |
$12,547 |
$13,365 |
$13,091 |
-6.1% |
-4.2% |
| Compact SUV/CUV |
$11,025 |
$10,781 |
$10,630 |
2.3% |
3.7% |
| Midsize SUV/CUV |
$11,551 |
$11,144 |
$11,272 |
3.7% |
2.5% |
| Full-size SUV/CUV |
$14,061 |
$13,941 |
$13,832 |
0.9% |
1.7% |
| Luxury SUV/CUV |
$18,218 |
$18,285 |
$19,059 |
-0.4% |
-4.4% |
| Compact Pickup |
$10,046 |
$9,981 |
$9,359 |
0.7% |
7.3% |
| Full-size Pickup |
$16,224 |
$16,317 |
$16,640 |
-0.6% |
-2.5% |
Source: ADESA Analytical Services.
Consumers might have been elbowing each other for bargains this past week, but it appears dealers were not behaving similarly as auctions held their sales around Thanksgiving.
As a result, Black Book’s newest Market Insights Report showed that prices for both cars and trucks didn’t soften as much last week as they had during the previous month.
“Used-vehicle values were stable with the abbreviated auction schedules last week, and most auto auctions experienced lower demand,” said Anil Goyal, executive vice president of operations, for Black Book as a part of the latest report.
Editors indicated that their volume-weighted data revealed overall car segment values decreased by 0.41 percent last week. In comparison, car values had decreased by 0.63 percent on average during the previous four-week period.
Among cars, Black Book noticed the full-size car segment experienced the biggest drop, sliding by 0.77 percent or $85.
Again volume-weighted, editors pointed out that overall truck segment values (including pickups, SUVs and vans) softened by 0.23 percent last week. That reading is less than half of what editors spotted during the prior four-week stretch when truck values had dropped by 0.48 percent on average
In the truck space, Black Book found that the minivan segment performed the worst, slipping by 0.50 percent or $40.
Turning next to what Black Book representatives gathered from sales nationwide, observers described how dealers might have been spending a little time with friends and family or back at their lots helping customers finalize deliveries if their shopping list included a vehicle.
Here’s the rundown:
— From Michigan: “Not a lot of demand today, and as a result the market was similar to the weather, which was not good.”
— From Massachusetts: “The consignment was good, but the weather affected the attendance. The money was better than last week but still lagging.”
— From Indiana: “Consignment and attendance were both down today. Retail has slowed but most dealers remain optimistic about the market.”
— From Georgia: “Despite the cold and rainy weather, the in-lane attendance was good, and the bidding matched. There was a hesitation among dealers to avoid buying to over stock.”
— From Wisconsin: “Dealer bidding was active on some lanes and non-existent on others. Hit or miss for sure.”
Two kinds of vehicles that might turn the quickest on your lots might have become a little more affordable at the sale you frequent.
The latest Market Insights Report from Black Book noted a pair of vehicle segments sustained the largest price drops of 2018.
Here’s how Anil Goyal, executive vice president operations for Black Book, explained the latest developments.
“Used-vehicle depreciation worsens as midsize cars and compact crossover/SUVs see the largest weekly drop this year,” Goyal said in the report.
Volume-weighted, editors found that overall car segment values decreased by 0.69 percent last week. In comparison, Black Book indicated market values had decreased by 0.56 percent on average during the prior four-week period.
And that previously mentioned midsize car segment experienced the biggest drop as Black Book pinpointed it at 1.05 percent or $91.
Again volume-weighted, editors reported that overall truck segment values — including pickups, SUVs and vans softened by 0.53 percent last week. In comparison, the market values had dipped by 0.45 percent on average during the previous four-week span.
Among trucks, Black Book noted the compact van segment performed the worst, sliding by 0.96 percent or $84. And prices for those compact crossover/SUVs dropped by 0.79 percent or $96.
Turning next to what Black Book noticed in the lanes at nearly 60 sales the company attends each week, anecdotes began with the recap of a conversation with an auction general manager from South Carolina.
“We have a small auction without a lot of the commercial accounts and our sales percentages have been consistently about 65 percent. Our inventory is very popular but especially so right now,” the GM told Black Book.
Black Book’s other observations stretched nationwide, including:
— From Arizona: “The sale could best be described as sluggish. Lower mileage older cars were the most popular vehicles.”
— From California: “We had a pretty decent sale but definitely more no-sales compared to previous weeks.”
— From Michigan: “The dealers knew what type of vehicle they were looking for and were only bidding on those. Not a lot of speculating going on.”
— From Georgia: “Attendance and inventory were pretty low. There was not a lot of enthusiasm amongst the dealers.”
General Motors Financial rewarded dealers who were quick to acquire vehicles from the consignor with a speed-themed experience.
Last month, 24 GM dealers from across the U.S. and Canada answered the challenge and won the trip of a lifetime in the fourth annual GMF Challenge. As top purchasers on GMF DealerSource over a two-month period this summer, these dealers clinched a spot to race Corvettes at Spring Mountain Motorsports Ranch outside Las Vegas.
For the GMF Challenge, dealers spent a day racing Corvette Stingrays with a professional driver on a world-class track and experienced the thrill of being behind the wheel as they navigated the curves of a top road course.
GM Financial highlighted these dealers showed they can match up with the best, whether they’re tackling hairpin turns or sourcing pre-owned inventory.
“Whether they’re buying online or racing on the track, these top dealers have what it takes to compete,” said Brad Bollman, senior vice president of remarketing for GM Financial’s North America operations.
“Contests and promotional events like these are some of the ways we reward GM dealers for purchasing vehicles from GM Financial, including their own lease returns,” Bollman continued. “It’s exciting to be able to share these once-in-a-lifetime experiences with our dealers and thank them for purchasing their pre-owned vehicles from GM Financial.”
Michael Gallagher from Gallagher Buick GMC in New Britain, Conn., took home the top prize with a lap-winning time of 28.23 seconds. As the day’s top racer, Gallagher earned bragging rights and a $2,500 GMF DealerSource purchase rebate.
Thomas Pion of the Pion Group from Massachusetts secured second prize, while Ron Symdon of Symdon Chevrolet of Mount Horeb, Wisc., rounded out the top three.
“The day was fantastic and certainly an experience we will all remember for a very long time,” said Howie Cobham, senior vice president of Canadian dealer services for GM Financial. “I know I can speak on behalf of the Canadian dealers in attendance that this was the coolest event we have ever participated in.”
