Auction Broadcasting Co. has been actively involved in flood relief for its employees at ABC Baton Rouge. ABC Baton Rouge’s facility was not damaged by the flooding, but the company said 13 of the employees who reside in the Louisiana capital lost everything.
“You just cannot imagine how devastating the damage is until you see it with your own eyes,” ABC president Jason Hockett said. “Pictures don’t show how horrible this really was.
“It just so happened that my wife, Paula, and I were moving my son, Joe, and his wife into their new home that weekend and were able to see it all first-hand,” Hockett continued. “As the water was rising, we saw several couples trying to get their most treasured possessions out of their homes and into the back of pick-up trucks.”
With those images cemented in the minds of company leadership, ABC considered what to do next.
“As a family business, we discussed what we could do to help the 13 families and others that lost their homes and all of their possessions,” Hockett said. “Many of our employees at ABC Baton Rouge weren’t able to get to work with the roads closed, so we paid them for the week plus gave each of them a $1,000 Visa Gift Card.”
Hockett also mentioned that he received a phone call from Frank Hackett at the National Auto Auction Association (NAAA).
“Frank and the NAAA gave each of our 13 employees who lost everything a $500 gift card,” Hockett said. “The next day, we received a phone call from one our consignors who will be donating $10 a vehicle for every vehicle sold in the month of September at ABC Baton Rouge.
“Additionally, our general managers, at each ABC Auction location, started a fund on their own for their dealers and employees to contribute,” he continued. “In one week, they raised nearly $40,000. Collectively, it is our goal to raise between $100,000 and $150,000 and have an ABC corporate match.”
Hockett mentioned a few other ongoing projects aimed to help Baton Rouge employees impacted by flooding.
“All of our employees at the eight ABC Auction locations will be wearing LOUISIANA STRONG shirts as a reminder of those that still need help rebuilding their lives,” Hockett said.
“It really is unbelievable to see the goodness in people when something like this happens,” he went on to say.
Other industry members who are interested in donating may send a message to [email protected]. ABC indicated 100 percent of the proceeds will go to the families who have been impacted by the floods.
Auction Management Solutions (AMS) finalized partnerships with two more independent operations for business development consulting on Wednesday.
AMS, which was started in early July by industry veterans Tom Stewart and Richard Curtis, now has relationships with Rochester Syracuse Auto Auction in Waterloo, N.Y., and Greater Quad City Auto Auction in Milan, Ill.
Adding these two clients bring the firm’s collection to 10 total locations, including:
—Greater Erie Auto Auction
—DAA Chattanooga
—DAA Murfreesboro
—DAA Memphis
—DAA Huntsville
—DAA Mobile
—Southeastern Auto Auction
—166 Auto Auction
Rochester Syracuse Auto Auction currently offers more than 400 units every week across four auction lanes. Current consignors include Credit Acceptance/VRS, Element Fleet, Wheels, Union Leasing and several local banks and finance institutions.
“We are very excited to be a part of this growing group of independent auctions," Rochester Syracuse Auto Auction co-owner Scott Prankie said. “We worked with Tom and Richard before in the past, and once we knew that they were back working with independent auctions, we were happy to be a part of the team.”
Curtis added, “We have known Scott and Mik (Panavas) for quite a long time. RSAA services a very important part of the country in the Northeast, and when they contacted us about working together, we knew it was a great fit for our firm and our group of auctions.”
Greater Quad City Auto Auction offers two sales weekly on Tuesdays and Thursdays. The operation has six lanes, a full reconditioning center and on-site transportation. Current clients include GSA, ARI, U-Haul, Enterprise and many other local banks and finance institutions.
“We feel that being a part of the group of auctions that Tom and Richard have assembled will be a very large asset to the growth and development of our auction location,” said Greater Quad City Auto Auction general manager and owner Larry Anderson. “Brad Anderson, our national sales and fleet lease manager, will work closely with AMS on the business development side of the business.”
Stewart mentioned, “The part of the country that QCAA services offers a lot of great opportunities for them, being in the heart of the Midwest. They can service a lot of territory, covering all of Iowa and Illinois and parts of Wisconsin.”
Copart has launched its first location and online auction in Germany, the company announced Monday.
The car storage and auction location is in Bad Fallingbostel, near Hanover.
“This is an incredible milestone for Copart. We are now offering the full Copart model to the German market, the 10th country in which our model has been implemented,” Copart president Vinnie Mitz said in a news release. “We have run a series of demonstration auctions in Germany to confirm that our new technology meets the stringent requirements of this market.”
Copart’s first foray into Germany was through its purchase of Wreck Online Market.
Since then, the company said it has been working to build a system that adheres with German and pan-European legislative requirements and the German insurance industry’s Code of Conduct.
“We have several years of experience in Germany through our subsidiary, WOM, and the growth of that business has been impressive in recent years,” said Nigel Paget, Copart’s chief executive officer for Europe. “The Copart model has been adopted with great success elsewhere in Europe, and we look forward to bringing the benefits of that market-leading approach to Germany.”
The company said more than 10,000 people from over 100 countries visited Copart.de to preview inventory during the two weeks leading up to a final demonstration auction for Copart Germany.
“We are happy to report that we have succeeded on all fronts and are now fully operational and are actively engaged with the German insurance market to grow our volumes and pursue additional expansion opportunities,” Mitz said.
Thanks to the approval of an additional $10,000 by the National Auto Auction Association’s executive committee, the 2016 NAAA Auto Auction of the Year winner will receive a total of $25,000.
The four chapter auction winners receive $5,000 each for the regional win, and the final auto auction champion for 2016 will be announced and awarded in November at the 2016 NAAA/NRC Convention with an additional $20,000 to be donated to a charity or charities of their choice.
The chapter winners are
Eastern Chapter — ADESA Winnipeg
Midwest Chapter — West Michigan Auto Auction
Southern Chapter — Louisiana's 1st Choice Auto Auction
Western Chapter — Kansas City Independent Auto Auction.
“Throughout the process of receiving many nominations for the Auto Auction of the Year Award, it has been so incredible to learn about all that our member auctions and its employees do for charitable organizations and the community,” said NAAA president Mike Browning.
“From continuous volunteering, in-kind giving to fundraising, it is a true honor to be the president of this association with so many caring and giving members. The commitment of excellence in community service in our industry is astounding. We pridefully acknowledge all of our members are true champions for this award.”
Details on the award and the regional winners may be found here.
Along with explaining why last month’s new-vehicle sales performance might have been good for the used market, Cox Automotive chief economist Tom Webb pointed out the Manheim Used Vehicle Value Index for August rose more than 2 percent year-over-year.
Manheim reported that wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) declined slightly in August on a sequential basis. But the latest index reading came in at 126.9, an increase of 2.1 percent from a year ago.
“Wholesale pricing in 2016 has been supported by a retail market that enjoyed higher volumes, stabilizing margins and respectable turn rates. And, importantly, dealers have continued to increase efficiencies in their used vehicle operations,” Webb said in his commentary that accompanied the latest Manheim Index report.
More evidence of consumers shying away from cars and leaning toward trucks and SUVs arrived in Manheim’s wholesale data. Analysts found that prices for compact cars and midsize cars softened by 1.8 percent and 1.2 percent, respectively.
Meanwhile, prices for the other four vehicle segments Manheim tracks for its monthly update moved higher as follows:
—Luxury cars: up 3.2 percent
—Pickups: up 6.2 percent
—SUVs/CUVs: up 1.6 percent
—Vans: up 2.7 percent
Rental and fleet update
Webb mentioned that lower mileage and a better mix kept rental risk prices strong in August. Unadjusted auction prices for rental risk units remained near record levels in August, according to Manheim.
“As was the case in recent months, the age, mileage, mix, and condition of vehicles being offered was much improved from a year ago,” Webb said. “As such, after adjusting for mileage and broad changes in mix, auction prices were down 1.2 percent from a year ago.
Webb added that the volume of rental risk units sold at auction was relatively high for an August.
“This could be a sign that stop-sale/stop-use units are finally being repaired and creating less demand for loaner vehicles,” he said. “New unit sales into rental rose 11 percent in August, and were up 6 percent year-to-date.”
Meanwhile, Webb insisted that commercial fleets continued to buy pickups and vans. He noted new-vehicle sales into commercial fleets declined 10 percent in August, but were up 9 percent year-to-date, based solely on the strength of pickups and the new Euro-styled vans.
“Auction sales volumes for end-of-service fleet vehicles have also been strong in 2016,” Webb said. “Average auction pricing for midsize fleet cars is running below the prior two years, despite lower average mileage at time of sale.
“Pickups and vans are, of course, doing well in the resell market for fleet managers,” added Webb, who again will be one of the experts during Used Car Week at the Red Rock Resort and Casino in Las Vegas on Nov. 14-18.
More about new-model retail sales
When discussing new metal rolling over the curb at franchised dealerships, Webb offered that “some records are not worth chasing.” He pointed out that the seasonally adjusted annual rate (SAAR) for new vehicle sales slipped back below 17 million in August.
“Our reaction is the same as in June (the last time the SAAR slipped below 17 million): good,” Webb said. “Because, as then, there are signs manufacturers are not overly pushing the market.
“August incentive spending was flat, sequentially,” he continued. “Sure incentives were reported to be up sharply from a year ago, but that reported amount has no impact if it is not actually dispersed.
“A lot of stair-step money did not actually hit the market in August as dealers did not, and knew they would not, reach their quotas. Last August, almost everyone met their quotas,” Webb went on to say.
But what about leasing? Experian Automotive just reported that its second-quarter data showed a record 31.44 percent of new-model financing was completed through a lease.
“Several lessors seem to have pulled in some of the more aggressive promotions,” Webb said. “As a result, preliminary numbers suggest that the lease penetration rate in August fell below its year-ago level for the first time in more than four years.
“Our major concern with the new-vehicle market’s impact on used-vehicle residuals is that current inventory levels and production schedules are not in tune with what is likely to be fourth-quarter demand. Production plans must be adjusted downward,” Webb added.
Closing thoughts on used market
Simply stated, Webb acknowledged that used-vehicle sales “keep humming.”
In the first seven months of this year, Webb calculated that used-unit sales by both franchised and independent dealers increased at the fastest pace of this recovery, and more than twice as fast as last year.
“While new retail unit sales have declined this year, used unit sales are up. That’s normal for this point in the automotive cycle, and we expect it will continue into 2017,” Webb said.
He added that sales of certified pre-owned vehicles rose 6 percent in August and 4 percent year-to-date. Full-year sales are set to reach a record 2.7 million, according to Manheim’s projections.
As a kid, it wasn’t the funny pages that attracted Dustin Miller’s eyes. It was the car section of the newspaper.
And that interest in the auto business hasn’t gone away. Miller is chief financial officer for America’s Auto Auction and Auction Credit Enterprises, a position he has held since 2006. He has been with the company since its 2005 formation.
“I was previously with a venture capital firm that made an investment in what is today America’s Auto Auction and Auction Credit. I stepped in as CFO in 2006 and here we are today,” Miller said.
“Growing up I have always loved cars and the car business. I would spend my Saturday mornings not reading comics, but reading the car section of the morning newspapers,” he said. “At 8 years old, I was having my parents drive me all around the city to look at cars.
“I love the auction atmosphere,” Miller said. “While my job chains me to the desk most of the time, it is so refreshing to go to the auctions and see the action, customers, employees and the cars.”
When asked what about his career he takes the most pride in, he said: “I am most proud of the two great companies we have built (America’s Auto Auction and Auction Credit Enterprises) over the last 11 years.
“We started the company back in 2005 and since then we have added 12 auction locations and developed a great management and finance team. I believe we have some of the best professionals in the industry. I am proud of this nomination as well. This year, I was a finalist in the Dallas Business Journal CFO of the Year (program),” Miller said.
“I ultimately did not win, but the acknowledgement was fairly uplifting.”
As far as the folks he admires professionally, Miller cited Andy Beal, a Dallas billionaire with whom he used to work.
Miller said he “cut my teeth in the finance world working for him” and enjoyed watching him make the Forbes 400 list.
Dustin Miller, 39, is the chief financial officer at America’s Auto Auction and Auction Credit Enterprises
View entire list of 40 Under 40 honorees.
As I walk through auction lanes on sale day, at locations across the country, I see a lot of dealers multi-tasking. Buyers are seamlessly using cell phones to gather information about vehicles lined up outside the lanes, accessing mobile apps to make offers via simulcast, and bidding on the car that is live on the block in front of them.
A glance at the screens above each auction block shows the competition consists of more than dealers present in the lane. A large online audience, participating via Simulcast and mobile, is in on the action remotely.
To make the most of these multi-tasking buyers, condition reports make all the difference and are a highly economical way for sellers to get more money out of sale day.
Dealers buying online, whether at a computer or with a mobile device, tend to look at listings with condition reports first, making those vehicles more popular and likely to sell faster. In fact, Manheim research shows that vehicles with condition reports sell four times faster.
Buyers who may be hesitant about buying online, without the opportunity to “kick the tires” on a vehicle before purchase, appreciate the availability of a condition report. Moreover, condition reports reduce potential headaches for sellers and buyers since vehicles that have them show a 37-percent decrease in arbitrations, according to Manheim data.
For less than the cost of a steak dinner, a condition report will more than pay for itself on the auction block, representing a significant return on investment. The proof is in the numbers. Manheim clients, for example, are three times more likely to purchase a vehicle with a condition report and vehicles that have a condition report sell for 20 percent more than cars that do not.
While many vehicles listed online for sale may have a photo available, only about half include condition reports. Savvy sellers will use condition reports to their advantage and get better conversion rates for the sale.
Not all condition reports are created equal, however. Assessments should cover the vehicle inside and out, from visible frame damage and paint to obvious mechanical damage and tires. The report should always include images, a vehicle description and reconditioning recommendations. Inspection grades should be easy to find and review prior to an auction, and used in conjunction with the full condition report.
Today, 70 percent of large dealers and 46 percent of small to midsize dealers use real-time data about a vehicle’s current condition to make more informed purchasing decisions, according to Manheim data.
As the industry continues to evolve to better meet dealer and seller needs, condition reports will prove to be one of the most useful tools for building dealer confidence in transactions, stimulating sales and driving optimal prices.
JMN Transportation recently opened drive-away locations in Dallas and Daytona Beach, Fla., that will serve local auctions in those cities.
The new sites joined JMN’s existing locations in Atlanta, Orlando, San Antonio and St. Louis.
The Daytona location opened in February and the Dallas location opened in May.
JMN aims to match customer needs, whether that means using drivers from the auction sites or employing its own. At the Daytona location, the drivers were integrated from the auction to employees for JMN.
Drive-away services can benefit those purchasing and selling cars at auctions; instead of having them hauled, buyers and sellers can have them driven to the auction or to their dealerships.
JMN has been providing local drive-away services for auctions, dealers, OEMs and in all aspects of the auto remarketing industry for more than 16 years. JMN offers simplified rate plans, and there are no wait times or minimum unit fees associated with the fee schedule.
KAR Auction Services Inc. has promoted Stacey White to senior vice president of enterprise optimization.
In addition to her other responsibilities, White will now oversee transportation at the corporate level. She will continue to oversee the company’s procurement and sourcing strategies, while still leading the team charged with standardization of operations and processes at all newly acquired auctions.
White joined KAR Auction Services in 2008 as an operational compliance auditor. She has since held a variety of positions, including director of process improvement and cost management and, most recently, vice president of enterprise optimization.
White will continue to report to David Vignes, KAR’s executive vice president of enterprise optimization.
“Stacey has more than 20 years of experience in the auto remarketing industry and is well respected by other employees throughout the company,” said Vignes. “She has a proven track record of success and the willingness and drive to continue taking on more responsibilities, making her well-suited for this role.”
“I am excited to take on this new role where I can apply my previous experience and knowledge gained from my career at KAR,” said White. “I look forward to working with new team members and taking on this new challenge.”
White received degrees from Canada’s Saint Mary’s University and Compu College School of Business in Halifax, Nova Scotia.
There was a bit of role reversal when it came to vehicle depreciation last week.
“The steeper depreciation seen recently in the car segments slowed last week while the depreciation on crossovers and SUVs accelerated,” Anil Goyal, senior vice president of automotive valuation and analytics, said in the latest Market Insights report.
Volume-weighted, overall car segment values for model years 2008-2014 decreased by 0.47 percent last week, which was much lower than the rate of 0.73 percent seen in the previous three weeks.
Meanwhile, volume weighted, overall truck segment values decreased by 0.51 percent last week, which was higher than the depreciation rate of 0.36 percent seen in the previous three weeks.
Despite this, demand for vehicles in this segment, including pickups, SUVs and vans, has remained at healthy levels. For example, a Black Book auction lane watcher in Arizona noted: “A good steady market here today with (four-wheel-drive) trucks in the most demand.”
Among cars, full-size cars, sporty cars and prestige luxury cars declined the most last week at 0.93 percent, 0.80 percent and 0.59 percent, respectively.
Many segments, however, saw much lower depreciation, including premium sporty cars at 0.11 percent, subcompact cars at 0.15 percent, and near-luxury cars at 0.22 percent.
Meanwhile, among trucks, compact vans, full-size crossovers/SUVs, full-size luxury crossovers/SUVs and compact crossovers/SUVs declined the most by 1.56 percent, 0.78 percent, 0.73 percent and 0.72 percent, respectively.
Segments that showed better retention included compact luxury crossover SUVs (0.10 percent), minivans (0.11 percent) and subcompact luxury crossovers (0.14 percent).
Subcompact car retention
The report took a particular look at subcompact cars to illustrate how retention rates for a segment can vary greatly over time. For a model year 2010 subcompact car, the retention in August 2012 was 63 percent. For a model year 2014, the retention in August 2016 was 44 percent. This was based on Black Book wholesale average (percent of MSRP) in August, at model year plus two years).
“With the increasing used supply and eroding demand, this segment has experienced a steep decline in retention values,” the report noted.
From the lanes
Black Book editors and personnel attend dozens of auctions throughout the U.S. each week. Here are some of their most recent observations:
Slow but good selection: “Sale was slow today compared to last week but there was a much better selection of vehicles today.” — Tennessee
Better retail: “Dealers say retail is better than expected for this time of year, with sales running very consistent from week to week.” — Nevada
Strong sale: “Good, strong sale overall with highline products leading the charge.” — California
Supply and demand: “There is good supply and demand in this location with buyers stepping up to the plate when necessary.” — Washington
