Auctions

United Auto Credit honors 5 auctions, including 2017 Auction of the Year

PHOENIX - 

United Auto Credit recently honored its 2017 Auction of the Year, along with handing out four other regional winners.

Receiving the award as the consignor’s Auction of the Year was Dealers Auto Auction of the Southwest.

“We have been doing business with DAASW for several years, and they have consistently done a great job for us. We are so proud of them for taking the top honor," said Scott Mousaw, director of remarketing for United Auto Credit.

“Each year, we aim to honor the auctions with the best retention, highest conversion rate and operational efficiencies,” added Mousaw, who himself has recently collected honors as he was named the 2017 National Remarketer of the Year this past November during .

DAASW is located in Phoenix operating six auction lanes on more than 20 acres. The operation offers more than 600 vehicles weekly for commercial consignors, franchise and independent dealers.

“We have an amazing team here at DAASW, and we continue to strive to provide the best service to our customers,"  DAASW general manager Jim Mumford said. “We are very proud to have this honor and look forward to 2018.”

United Auto Credit utilizes approximately 32 auction locations throughout the U.S. United Auto Credit also recognized the following auctions as regional winners:

—Lone Star Auto Auction

—Carolina Auto Auction

—North Bay Auto Auction

—Missouri Auto Auction

“We work with the best auctions in the markets where our vehicles are located, and based on the list of winners, we are happy to be working with independent auctions,” Mousaw said.



Auction Management Solutions hits two dozen clients with DAA Las Vegas add

PLAINFIELD, Ill. - 

Auction Management Solutions just added the largest independent auction in Nevada to its client roster.

According to an announcement on Thursday, Dealers Auto Auction of Las Vegas, (DAALV), has partnered with AMS for business development and other projects.

Founded in 2006, by Dan Thomas and Russ Norrish, the auction has grown to a 350-unit weekly sale with 200 to 250 attendees in the lanes, with additional online buyers utilizing the Simulcast platform.

The auction offers a full suite of services including transportation, reconditioning, and mechanical services. Thomas made the move to auction owner after nearly four decades in the industry, including leadership roles such as general manager and regional area manager with Manheim.

Norrish, an industry veteran, also held various leadership roles within the Manheim organization.

AMS president Tom Stewart said in a news release, “The wealth of experience among the senior leadership at Dealers Auto Auction of Las Vegas is impressive to see in an independent auction. They have surrounded themselves with employees that are knowledgeable about the industry and are dedicated to a high-level of customer service and customer satisfaction.”

DAALV, a National Auto Auction Association member, already has Lobel Financial, Enterprise, Avis and Honda Financial Services, among its commercial accounts.

“Las Vegas is a competitive market and we know that constant improvement requires keen insight into a rapidly changing marketplace,” Thomas said. “Knowing that AMS has assembled a team of experts that bring with them long-term relationships with vendors and consignors was a key factor in partnership”

Stewart pledged to deliver to DAALV results like AMS has for its clients that now number sits at two dozen after adding Alliance Auto Auction earlier this year.

“Our plan for DAALV is to build on their already solid foundation, by assisting them in enhancing their commercial accounts to complement their strong dealer consignment sales,” he said. 

Perhaps a spring surprise: Cars values holding up

LAWRENCEVILLE, Ga. - 

Perhaps not to the surprise level of a woman being given an engagement ring on Valentine’s Day, but some wholesale market observers might slightly raise their collective eyebrow about current car prices.

Based on data generated during the early stages of the spring selling season, Black Book noticed that cars holding retention better than trucks.

According to this week’s Black Book Market Insights report, volume-weighted data showed overall car segment values decreased by just 0.20 percent, much better than the average weekly decrease of 0.58 percent in values over the previous four weeks.

Editors pointed out that the compact car segment performed the best among all car segments, with values holding still from a week earlier.

Again looking at volume-weighted information, Black Book determined overall truck segment values (including pickups, SUVs, and vans) decreased by 0.35 percent last week, slightly better than the average weekly decrease of 0.46 percent in values over the previous four weeks.

Editors mentioned the full-size crossover/SUV and full-size luxury crossover/SUV segments performed the best among all the truck segments.

“Market performance is the best so far this year with improving sales rates at auto auctions and tax-season vehicles fetching good prices,” said Anil Goyal, Black Book’s executive vice president of operations.

And speaking of sales rates, Black Book’s representative watching activity from the lanes of an auction in New York collected the observations of the operation’s general manager, who mentioned that trend, too.

“Our commercial accounts are selling at a high percentage and the volumes continue to be elevated,” the general manager told Black Book.

“Dealer consignment is the area that we continue to work on as our volumes have been dropping for quite a while. Overall we are experiencing sales in the 55-percent sold range,” the GM added.

Perhaps reinforcing the price metrics for cars, Black Book’s representative stationed in the Southeast shared anecdotes that could provide dealers more insight into what’s happening.

Out of Georgia, the recap was, “It could be a by-product of tax season, but the market is picking up on midsize cars. Overall, buyers are being selective and offering very low starting bids.”

And in Florida, the representative noted, “Rentals and off-lease vehicles sold well as did the clean older cars.”

Out West, the lanes are busy, too, as this anecdote from Colorado describes. “The market is much better than recent weeks. Trucks are performing well and the dealers are in a buying mood,” Black Book’s representative said.

The not-so-upbeat report collected by Black Book originated in Pennsylvania. The lane watcher said, “Retail has not been good for the last couple of months. It seems like this downturn is a result of escalating new-car prices along with the adverse weather conditions we have experienced.”

SmartAuction inks deal to list off-lease Nissan, Infiniti units

CARY, N.C. - 

Under an agreement reached with their respective captive finance arms, Ally’s SmartAuction is listing the off-lease vehicles of Nissan and Infiniti.

The agreement between SmartAuction and the two captives (Nissan Motor Acceptance Corp. and Infiniti Financial Services) was announced Tuesday.

The off-lease cars are listed on SmartAuction after first being offered to Nissan and Infiniti dealers.

Dealers registered with SmartAuction can then bid on those vehicles before they are transported to physical auctions.

“We’re thrilled to work with NMAC and IFS to make Nissan and INFINITI vehicles available on SmartAuction nationally,” said Steve Kapusta, vice president of specialized asset management for Ally, in a news release.

“After a successful pilot last year, we’re excited to be a part of their remarketing strategy,” he added.

A podcast with Kapusta, recorded at Used Car Week in November, can be found below. 

Industry adapts to off-lease gains 

The deal between SmartAuction and the captives from Nissan and Infiniti arrives as off-lease volumes continue to be a big story in the used-car industry.

Companies in the wholesale space have adjusted or fine-tuned their strategies to accomodate what remains a rising pool of cars coming out of leases. 

For instance, GM Financial is expanding its volume footprint nationwide — recently opening distribution centers in the Detroit area, Maryland and New York — to help move more vehicles across Southeast and Midwest markets that wouldn't normally get as many off-lease returns, says GM Financial vice president of remarketing, auction operations John Sullivan.

And dealers are feeling the impact, too. During the Q&A portion of the latest AutoNation quarterly earnings call, chief executive Mike Jackson was asked about the vehicle mix among the off-lease volume and whether it was in line with consumer demand. 

“That is absolutely off-balance,” Jackson said. “But the way you have to think about it is, these are vehicles that were put in the marketplace three or four years ago, and the shift had already started towards trucks back then and has only accelerated since then. So it’s not ideal, and that then will be reflected in the pricing.

“But still, it’s a value point for consumers and a volume of choice that they never had before.”

As far as the exact numbers, Cox Automotive is anticipating 3.89 million off-lease units in 2018, which would be up from 3.59 million in 2017.

While that’s more than an 8-percent hike, the growth in off-lease volume is slowing down a bit.

Off-lease volume in 2017 was up more than 16 percent, following a more than 22-percent gain in 2016, according to data in a Cox Automotive presentation.

Still, 2018 is expected to be a record year for lease returns, according to Edmunds.

Case in point: There were 4 million vehicle leases written in 2015, the company said in its 2018 Automotive Industry Trends report, which was a 12-percent hike.

The following year was the peak, with just under 4.5 million lease originations, before the market trimmed down below 4 million again in 2017, Edmunds said.

Staff writer Chris Hart-Williams contributed to this report.

 

Car-value strength reflects approaching spring market

LAWRENCEVILLE, Ga. - 

Black Book continues to see sprouts of the spring selling season germinate.

On this heels of updating its Used Vehicle Retention Index for January, this week’s Black Book Market Insights report showed some possible early signs of the spring selling season, with cars showing lower depreciation than trucks.

“It was a good week for mainstream car segments as tax season buying has begun with strong sales being reported at the auctions,” said Anil Goyal, executive vice president of operations at Black Book.

Volume-weighted, editors indicated that overall car segment values declined by 0.34 percent last week. In comparison, the market values for cars had decreased on average by 0.64 percent per week in the previous four weeks.

Among cars, Black Book noticed midsize car segment performed the best with values remaining nearly flat.

Again volume-weighted, editors determined overall truck segment values — including pickups, SUVs and vans — decreased by 0.50 percent last week, same as the average decrease of 0.50 percent per week in the previous four weeks.

Within the truck space, Black Book mentioned the full-size crossover/SUV segment performed the worst with values declining by 1.13 percent last week.

As Goyal referenced, dealers are starting to see retail activity improve, resulting in the need to go to the wholesale market to acquire necessary inventory.

In Indiana, Black Book’s lane watcher reported, “Higher quality vehicles continue to do well in all price ranges. Retail in our area has picked up a bit, which bodes well for a market climb.”

Another report out of the Midwest included similar themes as a Black Book representative shared, “The market is starting to make a positive move a little bit earlier than normal and should remain strong for quite a while.”

And in Pennsylvania, dealer also are seeing vehicles roll over the curb. Black Book’s auction attendee mentioned, “Several dealers indicated that business picked up last week, and judging by the quantity of buyers in the lanes and online this week I would have to agree.”

Moving to the South, Black Book’s other two reports from the lanes share more details about the approach of spring-market conditions.

From Florida: “Dealers were more aggressively trying to purchase inventory, but they were careful not to overpay.”

From Georgia: “We had a good sale today with a lot of activity in the lanes. Vehicles under around $12,000 were in the highest demand.”

Update on the specialty markets

As they do on a monthly basis, Black Book editors shared their assessment of the specialty markets. Here is the latest rundown:

—Collectible Cars: Black Book emphasized that January is considered a bellwether month for the collectible car industry, and “this year did not disappoint.”

Editors added, “Mecum got the ball rolling with nearly $100 million in total sales in Kissimmee, and the usual Arizona players kicked in nearly $250 million more.”

—Recreational Vehicles: Black Book reported RV values at auction, both motorized and towable, were stable last month, with changes of less than 2 percent.

—Powersports: Editors explained February brings a “mixed bag” to values in the powersports market.

After last month’s above average market performance for this time of year, Black Book noted only the cruiser and snowmobile segments exhibit gains for a second consecutive month.

—Heavy Duty: Editors mentioned the word in January that there was a shortage of trucks available to haul freight apparently caused an already volatile value trend to take an upward swing resulting in strong wholesale values.

—Medium Duty: Overall, Black Book noted the medium duty market stabilized during the last couple of months of 2017, and that trend continues for the first part of 2018.

Dealers Auto Auction Group buys Mid-South Auction

JACKSON, Miss.  - 

Dealers Auto Auction Group has purchased Rea Brothers Mid-South Auction from the Rea family, a move that expands the independent auto auction group into Mississippi.

In late January 2016, the Rea family repurchased Mid-South Auction from the XLerate Group.

Mid-South, originally founded in 1972, had formerly been owned by the Rea family and operated under the name of Rea Brothers Mid-South Auction until being acquired by American Auto Auction Group in 2010. Rea Brothers became a member of the XLerate Group when AAAG rebranded in 2014.

With this latest move, the auction, which is located in Pearl, Miss., will be renamed Dealers Auto Auction of Jackson.  

DAAG’s other locations are in Murfreesboro, Tenn.; Chattanooga, Tenn.; Memphis, Tenn.; Huntsville, Ala.; and Mobile, Ala.

“The Rea family built a state of the art facility and assembled a dedicated and hardworking staff.  DAA looks forward to bringing its skills and enthusiasm to take the Jackson, Mississippi location to the next level,” DAAG founder and chief executive officer David Andrews said in a news release.

“This deal will allow more dealers, fleet, and commercial customers in the Southeast to benefit from DAA’s dedication to making the auto purchasing and resale market efficient, friendly, and profitable,” said Andrews, who also is the current president of the National Independent Automobile Dealers Association.

John Tidmore will be general manager of DAA Jackson. Tidmore was mostly recently the GM of Dixie Auto Auction in Granada, Miss., and previously was a national account manager at ADESA.

“DAA Jackson will work closely with existing relationships to ensure a seamless transition.  We also look forward to rebuilding connections with those who may be no longer doing business here and developing relationships with dealers who have never experienced the Jackson auction,” Tidmore said. “This is an opportunity for DAA Jackson to bring its national and regional partnerships into the vibrant Mississippi capital community and continue to cultivate this business.”

Scott Keener, DAAG’s regional director of auction operations, added: “We are excited about being in Mississippi and look forward to becoming a part of this community. With John Tidmore as our general manager, we are confident that this transition will be smooth and successful.”

Updated to clarify AAAG/XLerate details. Adds Chattanooga, Tenn., facility of DAAG, as well.

Black Book index movement reflects transition to spring market

LAWRENCEVILLE, Ga. - 

The first rendition of the Black Book Used Vehicle Retention Index for 2018 showed the wholesale market is heading into traditional cyclical pattern going into the spring.

On Monday, Black Book released the January index, which registered in at 113.1, marking a dip of 0.9 percent from the previous month. The December reading came in at 114.1.

Editors pointed out that the Index has now softened by 1.2 percent during the past 12 months.

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.

Entering February, Black Book noted the market appears to be reaching typical depreciation levels following a few months of post-hurricane activity in the third and fourth quarters.

According to Black Book, overall the market is experiencing a 1-point decline, fairly uniform across roughly all segments, with near luxury cars pacing the biggest decliners at 1.8 percent and luxury cars close by at 1.6 percent.

“As we ended last year on a strong note with used vehicle values getting a lift due to hurricane replacement activity, we expected we a larger decline in January,” said Anil Goyal, Black Book’s executive vice president of operations, in the analysis.

“We anticipate stability in the Index values over the next couple of months as the spring selling season gets underway, and consumers shop with an appetite driven by the recent tax changes approved,” Goyal continued.

The index dates back to January 2005, where Black Book published a benchmark index value of 100.0 for the market. 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 2014 when it hit a peak of 128.1.

To obtain a copy of the latest Black Book Used Vehicle Retention Index, .

ADESA introduces new customer rewards program

CARMEL, Ind. - 

ADESA recently announced that via its new ADESA Rewards program, dealers can now earn points when they purchase qualifying vehicles and specialty units at U.S. auction locations and on ADESA.com.

Earned reward points can either be converted for the purchase of merchandise, travel and gift cards or be used as ADESA Dollars that are valid toward buy fees on future eligible purchases.

“We listened to our customers when we designed this program and created a simple way for customers to earn rewards. It allows them to get the most return on their purchase and the most value out of every ADESA transaction,” ADESA chief operating officer Paul Lips said in a news release. “By creating a reward program in which all our customers across all ADESA U.S. auction locations and online platforms can participate and earn points, we are creating a more consistent and transparent marketplace.”

The company said that ADESA Rewards program enrollees can earn reward points on all eligible open sale vehicles and special promotions.

Additionally, added points are also awarded to dealers who show an increased purchase history, according to ADESA.

“This program gives participating dealerships the ability to distribute ADESA Rewards points between the dealership or their auction representatives,” said Carol Sewell, ADESA vice president of marketing. “Regardless of dealership size, everyone can benefit from ADESA Rewards.”

Dealers can join the program with a valid Auction Access number and a current ADESA.com username and password.

Single button access to the rewards program is located at the top of the ADESA home page.

J.D. Power Valuation Services revamps price analysis to account for market behavior changes

McLEAN, Va. - 

Changing consumer behavior is forcing wholesale market experts to modify how they track pricing shifts.

While recapping what happened in December, J.D. Power Valuation Services shared its latest wholesale price expectations for 2018, along with what analysts suspect will happen when the January data becomes available.

According to the latest installment of Guidelines, J.D. Power Valuation Services projected that January wholesale prices for vehicles up to 8 years in age will soften by 0.5 percent to 1 percent.

Despite the dip projected for the opening month of 2018, analysts suspect that their full-year price projections will stay “relatively flat” when compared to 2017 movements.

Last year closed with J.D. Power Valuation Services — formerly NADA Used Car Guide — seeing average wholesale prices dropping by 2.3 percent. The movement left J.D. Power Valuation Services’ Seasonally Adjusted Used Vehicle Price Index at 114.8, marking a drop of 0.9 percent.

For all of 2017, the index fell 3 percent year-over-year, according to the report, which also shared the modifications J.D. Power Valuation Services made to its evaluations.

“Compared to earlier time periods, the last few years has shown a significant divergence in price behaviors between cars and light trucks,” analysts said in Guidelines.

“Trucks (CUVs, SUVs and pickups) exhibit different depreciation behaviors and different seasonal price variations, and the magnitude of these differences have grown over time,” they continued. “Because of this, we have separated the portion of the index calculation that account for depreciation and seasonal price variations into a calibration for cars and a calibration for trucks.

This allow for a more accurate accounting of these factors, which in turn allows for a more accurate accounting of the actual movement in prices outside of these factors,” analysts went on to say.

The modifications to the reporting touched on another aspect, too.

“In addition, a careful reassessment was made of the appropriate seasonal price variation assumptions in light of the reduction in observed seasonal peaks and troughs of the last two calendar years,” analysts said.

“The primary result of this assessment as it concerns recent price movements, is a reduction in the size of price movements in the seasonally adjusted series for the spring and fall of 2017,” they added.

After the explanations, J.D. Power Valuation Services turned back to its December data.

Analysts found the last month of 2017 produced losses at the level larger on average than historic norms.

Luxury utility prices fell by a “significant” 4.2 percent — a level 3 percentage points higher than what analysts spotted during the past five years. The trend was especially noticeable for model years 2014 through 2017.

A specific vehicle example J.D. Power Valuation Services mentioned was the Mercedes-Benz GL. As auction volume for these units rose 8 percent, prices dropped by 5 percent.

Analysts also noted that compact luxury utilities softened by a healthy figure in December, as well, sliding by 4.1 percent.

The two other luxury segments J.D. Power Valuation Services watches dropped by similar rates. Luxury midsize utilities dipped by 3 percent, and luxury midsize cars were off by 3.4 percent.

Over on the mainstream side of the market, the report showed large utilities paced the December decliners, dropping by 4.2 percent as large full-size units from General Motors took the brunt of that decrease. For example, analysts mentioned the 2014 Chevrolet Suburban fell by 8 percent, while the 2014 GMC Yukon XL decreased by 7 percent.

Analysts also spotted a 3.4-percent price decline for subcompact cars in December; a reading 2.4 percentage points higher than what they typically saw in the closing month of a year going back to 2012.

J.D. Power Valuation Services closed by pointing out that large pickups continue to “outperform the market” since prices for these units dipped by just 1.6 percent in December.

Lynn Weaver named IAG executive director

MECHANICSBURG, Pa. - 

Lynn Weaver has been named the first-ever executive director of the Independent Auction Group.

Weaver is the former owner of Harrisburg Auto Auction, which he sold to Americas’ Auto Auction in December 2014 and then remained general manager until he retired from daily operations on Jan. 1

He was previously the volunteer co-chair of IAG, which is made up of the 195 National Auto Auction Association members that are independent auctions.  

Weaver’s responsibilities in the newly created executive director post include “advancing initiatives to address the needs of the organization’s membership,” according an NAAA news release on the position.

“We felt that Lynn was the perfect person for this new executive leadership role because he has been involved with both NAAA and IAG for more than two decades,” said IAG co-chair and former NAAA president Charlotte Pyle.

“He helped build the group to represent and promote the interests of independent auctions and has been instrumental in planning this change of direction for us,” said Pyle, who owns the Capital City and Mountain State auto auctions.

IAG launched in the mid-1980s as the Independent Auctions Advisory Committee, with a goal to “unify, protect and promote independently owned auctions as a single voice in the NAAA and provide support services for owners, managers and staff,” the news release said.

IAG co-chair and DAA Seattle general manager Dave Blake said the organization has been planning a restructuring for nearly two years that would move IAG from being a public relations and resource entity to become more policy- and issue-oriented.

“Our new mission is broader and more proactive, to take the lead in addressing the needs of independent auctions and make an impact on the challenges we face as we move forward into the future, such in the areas of training and technology,” Blake said.  

 

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