Certified pre-owned and compliance, created conversation; technology and technicians were trending topics and mobility matters — a lot.

These things were borne out when well-respected movers and shakers in retail and wholesale automotive gathered here in November for Used Car Week. Here are snapshots of some of the panel discussions that took place during the conference and a conference-inspired comment or two.

Off-lease and CPO

Off-lease vehicles are the bread-and-butter of manufacturer certified pre-owned programs, agreed dealers and a factory representative who participated in the panel discussion, “The Off-Lease Effect: CPO Industry Ripe for Continued Growth.”

Basem Tartir, vehicle retention and remarketing manager, Mazda North American Operations, said, “Over 50 percent of our CPO sales are sourced from off-lease returns,” and he believes that those sales will continue to grow.

“We’re focused on getting more dealers engaged in the program,” he said.

Don Luke, president of Bill Luke Chrysler Jeep Dodge Ram in Phoenix, said he prefers off-lease vehicles, which are typically 2 or 3 years old, over retired rental vehicles, which are typically 1-year-old or less, for his CPO inventory, because off-lease give him a good price spread and turn well.

“I’m really into lease returns,” Luke said. “Remember there was going to be such a glut that we would all drown? And somehow we seem to be surviving because the industry is big enough to swallow that easily.”

Eric Shoemaker, pre-owned director at Trophy Nissan, in Mesquite, Texas, said training dealership salespeople about CPO and getting them to believe in its value is also key to the program’s success. He said he always offers wrap-around service contracts to CPO vehicle buyers.

“That warranty doesn’t have to cover things like motor and transmission (which are covered under the CPO warranty), the two most expensive parts of the car, so that warranty is cheaper, and our penetration is higher,” he added.

Speaking of certified used vehicles, Costco members who were directed to Costco Auto Program participating dealers purchased an estimated 104,386 manufacturer CPO and Select Pre-Owned vehicles in 2018, up 61.7 percent, said Rick Borg, executive vice president at Costco Auto Program, who was at the conference but not on the panel.

SPO is a Costco Auto Program designation. SPO vehicles meet certain eligibility requirements for time and mileage remaining  on their warranties, but are sold by dealers that can’t cover the vehicles with factory certification, because the dealers don’t operate that franchise.

Borg said member requests for SPO vehicles grew in 2018 for several reasons. A major reason was that the Costco Auto Program opened four more SPO markets in the Western United States, doubling SPO’s market area, he said.

“We plan to continue this growth in 2019,” Borg said in an email response.

Consignor perspective

How sophisticated technology impacts the used-car market and business partners that work together more harmoniously were among the topics tackled by those who participated on the panel, “Consignor Perspective: The State of the Used Car Industry.”

All 2018 vehicles Subaru of America sold to rental fleets as program cars are equipped with EyeSight, its driver assist technology, said John Manchin, Subaru’s national fleet remarketing manager. EyeSight cameras are mounted on either side of a vehicle’s rear-view mirror and help prevent crashes with features such as automatic emergency braking and forward collision warning.

“Three years after airbags were introduced, if you had a pre-owned vehicle that didn’t have an airbag, nobody wanted them,” Manchin said. “Our feeling is that three years from now if you have a used car without driver assist technology, it’s not going to hold its value.”

Brooks Stewart, managing director at Bridgecrest Acceptance Corp., said topping his “wish list” is for his auction partners, key companies, repo companies and transporters to help one another more, especially as Bridgecrest moves more of its vehicle sales upstream and online.

“Speed is as much about money to us at Bridgecrest as price, and I would take five days over $5 all day long,” he added. “The more we can talk and bridge those gaps between those industries, we think it’s an opportunity for us all to be more efficient.”

Mobility? Auctions are all in 

Don’t count auctions out when it comes to mobility, said Bob McConkey, who was among the panelists who delved into  “Innovators: The Next Generation of Used Cars.”

McConkey, president of McConkey Auction Group, said auctions are valuable partners for ride-sharing companies throughout shared vehicles’ lifecycles.

“‘Hey, this one got wrecked; it’s time to get it out’, or ‘we need an oil change’ or it just needs to cleaned,” said McConkey, of the service requests auctions are getting from mobility customers.

“At the end of its lifecycle, the car gets sold and redistributed back into the marketplace. It’s not theoretical for the auctions. The auctions are in it right now. We’re paying attention to it; I think we can capitalize on it.”

George Chamoun, CEO of ACV Auctions, said he is watching two tech developments in 2019.

One is the “broad war between Amazon, Google and Salesforce as it relates to artificial intelligence,” he said. Those companies are going to spend “billions and billions of dollars on infrastructure,” and the industry can benefit collectively from that war.

Chamoun also has his eye on advancements in condition reports.

“Several of us in the room are going to be spending tens of millions of dollars, if not hundreds of millions of dollars, on advancing how we appropriate condition reports” that support vehicle values, he said.

That’s a good thing for consignors and dealers because “we’ll be competing to create the most trusted analytics,” he said. 

Wanted: more service techs

Finding skilled service technicians is no easy task, said Chad Bailey, who took over as president of the National Auto Auction Association during NAAA’s annual conference that ran in conjunction with Used Car Week.

Bailey’s observation was part of the discussion, “The National Panel: A Full Picture View of the Auto Industry.”

He believes the dearth of service technicians is the result of a generation of young people who shunned the profession and opted for college degrees at the urging of their parents, Bailey said.

He said NAAA is partnering with technical colleges and doing extensive recruiting to bridge the gap, but admits that the need is now.

“We’re in an age when we need to check these cars and certify these cars and repair these cars and do appropriate condition reports,” said Bailey, who is also president of the Akron Auto Auction. “Guys who are buying online need specifics about dents, dings and other” issues that impact vehicle value.

Tony Long, executive director of the International Automotive Remarketers Alliance, said the organization has created a new compliance committee and formed a strategic alliance with the Automotive Information Sharing and Analysis Center, a federal government group that is focused on vehicle cybersecurity risks.

Long credits IARA’s compliance committee with finding a device that helps auctions and used-car dealerships clear personal information that is stored on vehicle entertainment and technology systems.

“Frankly, there is no magic button or manual that tells you how to do that,” he said.