Whether looking from the dealer perspective of used-vehicle prices for units running down the lanes or movements in depreciation that finance companies might consider, neither Manheim nor Black Book spotted dramatic shifts when analyzing their respective September data.
First, Manheim determined wholesale used-vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) remained unchanged between August and September, but non-seasonally adjusted prices declined 1 percent during the month. As a result, the Manheim Used Vehicle Value Index stood at 126.9 for September, an increase of 1.7 percent from a year ago.
“The strength in wholesale pricing is explained, in large part, by current and past increases in new vehicle transaction prices (even after adjusted for mix shifts),” Cox Automotive chief economist Tom Webb said in his commentary that accompanied the latest Manheim Index update.
“For example, the new-vehicle component of the Consumer Price Index (which further includes a quality adjustment) has increased by 1 percent over the past three years, and a straight average of new-vehicle transaction prices is up 9 percent since 2013,” Webb continued.
“As such, wholesale used-vehicle prices relative to new-vehicle prices are not out of line with historic norms,” he added. “Additionally, higher retail used-unit sales and stabilizing margins have kept dealers active bidders in the wholesale market.”
Meanwhile, according to Black Book data, the average price of a used vehicle for model years 2011 to 2015 depreciated by 2.3 percent during September, just slightly better than the August reading of 2.4 percent.
Black Book indicated that overall cars saw lower retention in September, ending the month at a 2.6 percent depreciation rate compared with 1.8 percent in August. Trucks as a whole finished with a depreciation rate of 2.0 percent in September.
Editors added that all vehicles are currently averaging a 12-month depreciation change of 16.6 percent.
“This past month all segments seemed to have retained their values slightly better than they did the previous month,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics. “This is likely due to typical market fluctuation, however it appears as though some truck segments are beginning to feel more depreciation than in recent months.”
Deeper look at Manheim data
Manheim reported that all major car segments posted year-over-year price declines in September, while prices for all major truck segments moved higher.
Within cars, Manheim indicated the sporty segment was up “significantly.” Within the SUV/CUV segment, Manheim noted small entry units were “weak” while dipping by 4.4 percent, while prices for full-size units climbed by 6.5 percent.
Manheim went on to mention a straight average of dealer-consigned units had a 2.7 percent increase in auction prices and a 1 percent decline in average mileage.
Analysts said commercially consigned units had the same 1-percent decline in average mileage, but only a 1.6-percent increase in average selling price. A straight average of all auctions sales showed prices up more than 4 percent as a result of a higher share of commercially consigned units and a richer mix of vehicles.
Sliding over the off-rental market, Manheim explained rental risk offerings have lower mileage, better mix, and higher quality.
The average price of a rental-risk unit sold at auction in September reached a record high of a little more than $17,000.
“That record price was driven by lower mileage and a better mix of vehicles being sold in better condition,” Webb said. “Our index of rental risk pricing adjusted for mileage and broad market class shifts was down 1 percent for the month and year-over-year.
At 37,100 miles, Manheim also mentioned the average mileage of rental risk units sold at auctions was the lowest since November 2013.
“Relative to mix, midsize cars represented a significantly smaller share of September sales. Crossovers accounted for a much higher share,” Webb said.
In the third quarter of this year, Manheim pointed out vehicles with a grade of 4.0 or higher accounted for 42 percent of all rental risk sales. In last year’s third quarter, vehicles in that condition accounted for only 34 percent of sales.
Looking ahead
Using the explanation of the “coming seasonal forces,” Webb closed his examination of the wholesale market with a couple of thoughts.
“The seasonal headwind to wholesale pricing has always been strongest from Labor Day to Thanksgiving,” Webb said. “And, statistics show that the seasonal pressure on wholesale pricing in October has not diminished over the past 20 years, even though new model introductions are increasingly scattered throughout the calendar year.
“Preselling the tax refund season with the use of down-payment deferral programs has, however, made both November and December relatively stronger pricing months than in years past,” he continued. “Indeed, in each of the past three years, November (which had historically been the weakest month for wholesale pricing) was slightly stronger than October, statistically speaking.”
On Monday, ADESA announced changes to its auction management teams at ADESA Orlando, ADESA Sarasota and ADESA Tampa, effective immediately.
The business unit of KAR Auction Services said Jeff York, previously general manager of ADESA Sarasota, will lead ADESA Orlando as general manager.
The company indicated Curt Farris, previously general manager at ADESA Tampa, will serve as general manager at ADESA Sarasota.
ADESA added that Lisa O’Neil, previously assistant general manager at ADESA Atlanta, has been named general manager at ADESA Tampa.
“Jeff, Curt and Lisa are veteran industry professionals with proven auction expertise and are key examples of the strong bench strength throughout our organization,” ADESA chief operating officer Paul Lips said.
“They bring a breadth of knowledge and experience to their new roles and will excel at serving customers and employees alike in the Florida market,” Lips continued.
ADESA highlighted York has more than 40 years of experience in the automotive industry, including 30 years in remarketing. He had been general manager at ADESA Sarasota since 2007. Under his leadership, ADESA Sarasota won the company’s 2011 Auction of the Year award. ADESA Sarasota was recently named one of the Best Auto Auctions to Work For as highlighted in Auto Remarketing.
Before joining ADESA, York had held executive management roles at various auto auction companies over two decades.
ADESA recapped that Farris started his career at Hertz. He joined ADESA Sarasota as fleet lease manager in 2007. In 2012 he was promoted to general manager of ADESA Tampa. During his tenure at ADESA Tampa, Farris led the auction to win the company’s internal 2014 and 2015 (Medium) Auction of the Year awards and the 2015 National Auction of the Year award from the National Independent Auto Dealers Association. He was named 2014 Auction Person of the Year by the Florida Independent Auto Dealers Association.
The company noted O’Neil joined ADESA in 2003 in dealer sales for ADESA Atlanta and was later promoted to commercial accounts manager at that location. In 2009 she served as ADESA regional sales manager for the West region, national sales manager, and then as director of inside sales and dealer relations for the East region. She was named assistant general manager for ADESA Atlanta in 2015.
To meet the growing demand from consignors for more consistency in vehicle valuation processes, Manheim on Monday morning announced plans to expand its AutoGrade condition score licensing program.
Initially distributed only to National Auto Auction Association member auctions, the company highlighted the electronic vehicle condition reporting system will now be made available to all non-NAAA auctions and wholesale marketplaces as well as other support entities, including third-party inspection companies, software vendors and consignors.
“Our clients have told us that having access to accurate condition score information is key to understanding a vehicle’s true market value and informing buying decisions,” said Grace Huang, senior vice president of inventory services for Manheim.
“By making this program more widely available, we’re helping our customers make more informed buying decisions across the wholesale ecosystem,” Huang continued.
Effective immediately, Manheim indicated any organization involved in the vehicle remarketing process will be able to obtain AutoGrade license agreements. Administered through AutoIMS (Auto Auction Services Corp.), the licenses will allow clients to input vehicle damage information via the AutoIMS inventory management system and receive a point-based grade according to Manheim and NAAA standards for various mechanical, structural, body repair and cosmetic defects.
To help ensure the continued viability of the expanded license program, Manheim said it will charge a small transaction fee administered by AutoIMS to any new customers not currently under contract. Current licensees will not be charged a transaction fee until their current contract expires.
“The No. 1 pain point for remarketers is consistent vehicle information,” AutoIMS president and chief executive officer Mike Broe said. “With this expanded program, buyers and sellers will have confidence in what the grade means and know that it’s applicable across all platforms.”
Both Manheim and AutoIMS called AutoGrade the “gold standard” for vehicle condition grading since it is becoming more readily available at a time when wholesale volumes are increasing, buyers are embracing Internet platforms and sellers are asking for consistency in their vehicle valuation processes across multiple venues and geographies.
“Our goal is to provide our clients with services that improve the overall remarketing experience,” Huang said. “AutoGrade condition scores do just that by supporting reliable, accurate and consistent reporting, thereby providing increased confidence to buyers and sellers alike.”
Wholesaling vehicles in a place some people might consider to be paradise should be a breeze, right? Well, Manheim Hawaii general manager Dewey Hess said the 133 full-time and part-time employees keep the auction flowing as consistently as waves lapping against the shoreline.
“Hawaii is a unique and diversified place, which is reflected in the employees,” Hess said. “The management team leverages the ‘Aloha Spirit’ coupled with Cox Automotive’s benefits and core values to create an environment that attracts great people and entices them to stay.”
That team that registers nearly 400 vehicles each week is one that “enjoys their work, and passionately believes in the cause of the organization, creates infectious enthusiasm which leads to efficiencies, dedication and ultimately success,” according to Hess.
And as the auction’s GM, Hess looks to lead in ways that are balanced, like surfing the big waves of the Pacific without burning out employees faster than a luau’s fire.
“My main priority is to influence the staff to be a cohesive, positive team that understands the goal, so that everyone is paddling the canoe in the same direction,” Hess said.
“I make an effort to show genuine interest and concern for the team members, not just as an employee, but personally as well,” he continued. “My daily routine is to listen, praise and recognize. I also like to create a clear path for future leaders, and help them achieve goals. Most importantly, have fun.”
With few professionals saying “aloha” to Manheim Hawaii for good, it should be no surprise that the auction received this honor.
“Our location is focused on keeping our workforce highly engaged, and therefore providing a high level of customer service. We integrate the Cox Automotive core values into our day-to-day routine, and work to instill cooperation and teamwork at all levels. This recognition is honor for our team,” Hess said.
View the complete list of honorees here.
In response to client demand, Manheim highlighted on Tuesday that the company has nearly tripled the availability of Enhanced Vehicle Imaging (EVI), expanding from 25 to 74 auction locations throughout North America.
Manheim reiterated that EVI is designed to provide a consistent set of quality high-resolution images that can showcase vehicles in an optimal way. The company maintained this service can lead to a higher conversion rate for sellers and increased confidence about purchases for online buyers.
“The Enhanced Vehicle Imaging service we use from Manheim Milwaukee has proven to be a big boost to our bottom line and grown our online attendance,” said Jeff Ricchio, who is the remarketing manager for the Napleton Automotive Group. “And we love the positive feedback we get from buyers about the photos.”
Manheim claimed EVI can produce photos superior to those traditionally available via the device used to take standard condition report photos.
Using high-quality, state-of-the-art programmable cameras and software, certified photography staff shoot the images after vehicles have been reconditioned. They display one car at a time and include a consistent set of views most important to buyers. High-resolution images, available in-lane and via Simulcast and OVE, enable viewers to pan the vehicle and zoom in and out to areas of interest.
“Dealer interest in improving online sales and their success stories compelled us to broaden our EVI footprint and be an even better business partner,” said Grace Huang, Manheim’s senior vice president of inventory services.
“Professionally taken, post-recon glamour shots allow display of ‘picture perfect’ vehicles,” Huang added. “I think of it like online dating, where the best-looking people, in the most flattering photos, generate more positive reactions.”
Manheim went on to mention the addition of Enhanced Vehicle Imaging can help consignors move vehicle inventory more efficiently, reaching up to 80 percent more online buyers with increased bids per sale. Manheim data also shows that Simulcast listings with EVI images convert 16 percent better than two or three low-resolution photos and 50 percent better than no photos.
The data indicated dealers using EVI also sell 27 percent more vehicles online than those who use two or three low-resolution images. EVI also can support dealer efforts to sell less desirable, aged vehicles online — vehicles with expected low AutoGrade scores, high mileage or lower prices.
Manheim offers wholesale clients three packages enabling sellers to select the option that best fits their needs. They include:
—Seven outdoor views for $15
—15 outdoor views, including every angle of the exterior, for $25
—15 showroom images for $50
The company pointed out the 15 outdoor and showroom packages can feature up to three additional images that vary by vehicle or model.
Photos in the 15 showroom package, available at 23 select locations, are taken in a showroom environment with optimal lighting and free of distracting backgrounds.
The company added any of the photo packages can be purchased independently or bundled with condition reports in an effort to deliver the highest conversion rate.
On Monday, ADESA promoted Trent Strauss to be director of dealer relations, effective immediately. He will report to Steve Dudash, the company’s vice president of dealer services.
In his new role within the business unit of KAR Auction Services, Strauss will lead the local auction dealer relations teams throughout the United States and oversee deployment of the national sales and dealer relations strategy.
“Trent’s career focus on customer service excellence and sales team coaching will be invaluable to our dealer sales professionals, who are dedicated to serving dealers’ wholesale auction needs,” Dudash said.
“His expertise in communication strategies and creating solutions for business projects will enable us to zero in on delivering a premium customer experience,” Dudash added.
Strauss has more than 15 years of inbound and retail sales experience. Since joining ADESA in 2010, he has served as district inside sales manager in Colorado Springs, where he was responsible for telesales staff at up to 13 locations.
Prior to joining ADESA, Strauss established a new customer contact center for Knowledge Learning Corp. as customer relationship supervisor.
Previously, he had held positions of increasing responsibility in inbound sales at Deluxe Corp., including sales support team leader for key national accounts and sales coach leader.
Time to take those lederhosen out of storage.
Twelve northeast Manheim locations are taking part in a four-week Oktoberfest celebration featuring themed décor, games, food, pre- and post-sale giveaways, prizes and unique buying/selling opportunities.
“As we are transitioning from summer to fall, Oktoberfest is a great opportunity to have fun and showcase the 150,000-plus vehicles offered,” said Matt Trapp, regional vice president, northeast. “The inventory is vast and ripe for the picking and dealers are encouraged to attend sales at multiple locations throughout the four-week celebration to fill their inventory needs and join in on the fun.”
At each location, prizes will be rewarded based on a number of buyer incentives, such as attendance at in-lane sales, purchases in-lane, purchases on Simulcast and OVE.com, as well as German made car purchases.
Regional grand prizes include up to $10,000 in Cox Automotive products and services, a trip to the BMW Experience Track, Mont Blanc pens, Adidas gift cards and much more.
Sales kicked off last week at Manheim Ohio and Manheim New York and continue through Oct. 14 at the following locations:
—Manheim Fredericksburg (Sept. 29)
—Manheim Philadelphia (Oct. 4)
—Manheim New England (Oct. 4)
—Manheim Cleveland (Oct. 5)
—Manheim Detroit (Oct. 6)
—Manheim Louisville (Oct. 6)
—Manheim Baltimore-Wash (Oct. 11)
—Manheim Pittsburgh (Oct. 12)
—Manheim New Jersey (Oct. 11 and 12)
—Manheim Pennsylvania (Oct. 13 and 14)
Auction Management Solutions Inc. announced it has partnered with Columbus Fair Auto Auction for business development consulting.
AMS, which was founded in early July by industry veterans Tom Stewart and Richard Curtis, provides consulting services to independent auto auctions and others in the auto industry.
Greg Levi, chief operating officer for the Columbus, Ohio-based CFAA, said: “We have a lot of very exciting things going on at CFAA, and partnering with AMS will help us continue to expose what differentiates our auction from the rest.
“Our unique approach to customer service, inventory management and remarketing is complemented by our attention to compliance for both employees, guests and consignors,” he continued. “Tom and Richard will work closely with Tim French, vice president of sales, to identify new business partnerships and solidify existing relationships.”
“We are very excited to be working with Columbus Fair Auto Auction, a known powerhouse in the industry,” Stewart said. “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.”
“We work to bring our auction experience directly to our auction clients, with more than 50 years of experience in the business, we focus on offering superior service and guidance to our client partners to insure we are both very successful,” Curtis added.
Other auctions with whom AMS has partnered are Rochester Syracuse Auto Auction, Greater Erie Auto Auction, Dealers Auto Auction Chattanooga, Dealers Auto Auction Murfreesboro, Dealers Auto Auction Memphis, Dealers Auto Huntsville, Dealers Auto Auction Mobile, Southeastern Auto Auction and 166 Auto Auction.
CFAA offers more than 1,500 units every week across 11 auction lanes. Started in 1959 by William Jacobs, it is one of the largest independently owned and operated auto auctions in the country.
Insurance Auto Auctions rolled out its newest tool on Tuesday — IAA Loss Advisor — which the business unit of KAR Auction Services highlighted as a solution that can help insurance claims staff.
The company explained IAA Loss Advisor can quickly generate an early total loss recommendation based on information insurance personnel provide regarding the post-accident condition of the vehicle combined with the ACV (actual cash value) and IAA salvage vehicle market value data.
IAA Loss Advisor is the latest advancement in the IAA Total Loss Solutions, the company’s suite of products that ultimately leads to increased management of costs as well as an enhancement in customer satisfaction and retention.
“The Loss Advisor tool uses insurance company and IAA data to allow for a significant enhancement in the accuracy of the evaluation typically given by existing tools regarding early total loss prediction,” said Pat Walsh, senior vice president of business development at IAA. “Because of this, Loss Advisor decreases storage and advance charges, reduces the cycle time and enhances the customer’s satisfaction.”
Insurance Auto Auctions chief executive officer and president John Kett added, “By implementing the Loss Advisor tool, insurers can instill a greater sense of confidence in customers going through the claims process, which leads to increased policyholder fulfillment and retention.
“This development complements the existing features of IAA Total Loss Solutions, which serve to further exhibit IAA's dedication towards being the leading industry expert providing a seamless suite of technologies that increases the effectiveness of the total loss claims process,” Kett went on to say.
Along with appointing a new chief executive officer, ACV Auctions this week announced that it has raised $5 million in venture funding, led by Tribeca Venture Partners, with participation from SoftBank Capital NY, Armory Square Ventures and Rand Capital.
In addition, the company appointed Synacor founder George Chamoun as CEO. In conjunction with the financing, Brian Hirsch from Tribeca Venture Partners and Jordan Levy from SBNY have joined the company’s board of directors.
ACV Auctions is a mobile platform that can enable dealers to view, bid and purchase inventory via online auctions. These live auctions are conducted from franchised dealer lots and last just 20 minutes.
Overseeing this operation now is Chamoun, who replaces ACV Auctions co-founder Joe Neiman, who will focus on market development.
Chamoun brings with him a record of accomplishment as an entrepreneur and senior executive. He co-founded Synacor right out of college in 1998, and spent the next two decades building it into a trusted technology and revenue partner for some of the largest video and communication providers in the world. Chamoun also serves as chairman of Launch NY, a non-for-profit organization supporting the startup ecosystem for Upstate New York.
As an early angel investor in ACV, Chamoun was drawn by the company’s long-term potential. Since then, he says ACV’s performance — and the overwhelmingly positive response of customers — has further affirmed his confidence in the company.
“In just one year, more than 800 dealerships registered for our mobile service, proving the value of our highly innovative service. These are the same reasons we also attracted top venture capital firms to fuel our growth,” Chamoun said.
“We are proving the case that dealers prefer to purchase wholesale inventory on ACV, because we enable transparency, trust and faster access to fresh trades,” he continued.
“ACV Auctions is to car auctions what broadband was to dialup: a superior experience by every measure,” Chamoun went on to say. “Our team is proud to partner with franchise and independent dealers throughout the country by offering a proven service that adds tremendous value to their businesses, and to the dealer industry overall.”
Hirsch elaborated about why Tribeca Venture Partners decided to send resources to ACV Auctions.
“Tribeca invests in world class entrepreneurs and radical innovation — not incremental improvement,” Hirsch said. “ACV already proved in its first year that it can transform the wholesale automotive sector and has a proven team of entrepreneurs that understand how to build a high-growth business.”
Meanwhile, Neiman insisted he will continue focusing on customers.
“Having owned a used car business myself and spending years buying cars in physical auctions, I understand the many challenges that dealers face,” he said. “With ACV, we have created a service that significantly reduces risk for used car dealerships.”
ACV was the $1 million winner of last year’s 43North startup competition, which each year draws startup applicants globally.
“43North is excited to see ACV Auctions receive $5 million in venture funding, and we welcome George Chamoun as their CEO,” 43North executive director John Gavigan said. “We look forward to seeing ACV Auctions continue to grow and revolutionize the wholesale auto auction process.”
