SUVs lead auction volume gains, investment by automakers

CARY, N.C.  - 

The volume of late-model vehicles at auction continued to move upward in August, according to J.D. Power Valuation Services, which said full-year figures are likely to end up with a similar volume increase as last year’s uptick.

And through eight months of 2018, SUVs are showing some of the largest increases in volume.

Overall, though, there was a 13.8-percent month-over-month hike and a 5.4-percent year-over-year increase in late-model auction volume during August, J.D. Power said in its latest issue of Guidelines, defining late-model as vehicles 5 years old or newer.

Through eight months, late-model auction volume is up 4.5 percent from the same period of 2017. But by year’s end, J.D. Power is forecasting that gap will increase to 6.5 percent.

That’s a similar gain as was seen last year, when late-model auction climbed 6.6 percent, J.D. Power said. As for next year, that’s likely to be the crest of this auction volume wave, which should plateau after 2019, according to the report.

Reasons for overall increase

As you might expect, the main reason for the expected full-year auction volume hike in 2018 is off-lease volume, which J.D. Power forecasts will climb 14.2 percent.

Rental volume is likely to climb 8 percent.

The company is projecting regular retail purchase volume to go up 2.7 percent.

SUV volume up big

SUVs are leading the pack in terms of year-to-date late-model volume gains through August, with a 49.1-percent hike for compact premium SUVs and a 28.1-percent gain for large SUVs, according to the Guidelines report.

And not only are SUVs flowing through the auction lanes, they’re now representing a core focus from automakers on the new-vehicle side.

During a phone interview earlier this month, Jonathan Banks — who is vice president of vehicle analysis and analytics for J.D. Power Valuation Services — discussed the investment that automakers have made in SUVs and crossovers and how that has affected demand.

Heavy OEM investment in crossovers, SUVs

“When you think about it, the manufacturers are investing so much on getting the design right for these products, and launching more and more products, to meet exact buyers’ preferences, to me it’s no surprise that you’re starting to see more and more demand for these products. They’re getting newer, there’s more of them — and that’s happening for both the traditional SUVs and for the crossover SUVs …,” Banks said.

“It’s funny because everyone says, ‘No one wants cars,” he said. “(However), when you start pulling away investment from one thing and invest heavily on another thing, what you’re going to do is create a substitution to whatever the newer products are.”  

That said, “even if they didn’t do anything to SUVs, people would probably be migrating over,” Banks acknowledges.

In other words, the investment in these segments is kindling to that fire.

Banks said that for consumers, “you have a crossover for every solution that the cars maybe gave you. You go into dealerships now that have a whole breadth of SUV lineups, like a lot of luxury manufacturers.

“And you basically have a crossover or SUV at every price point for every person with all the different driving dynamics that you would expect, that we used to expect in cars,” he said. “So, the investment’s all there, mainstream and luxury, to where there’s a crossover for every person now.”

It has gotten to the point where the shopper doesn’t have to compromise; whether his or her taste is for off-road capabilities, smooth handily or sportiness, there is likely a model for that consumer, Banks said.

Again, the investments in these amenities are moving folks to crossovers.

“And then obviously we have fuel prices keeping everything stable overall,” Banks said. “To me, all the investment is panning out perfectly and if not anything (else), accelerating a trend that maybe would have stopped at a certain level, but accelerating that shift from car to truck buyers even more.

“And that’s why we’re probably going to see that continue, especially as we start to see … less and less investment in cars, like what Ford’s doing,” he said.

Taking away investment in cars segments will likely lead to a similar scenario as a few years back, when consumer interest moved away from cars and towards SUVs.

“We flipped back (to cars) and now we’ve flipped back again,” he said.

‘More of a long-term trend guy’

Banks caveats that with a grain of salt, though.

“I’m more of a long-term trend guy, where I think everything is exaggerated again, to where I don’t think we should bail out on cars completely nor do I think that we should stop investing in cars completely,” Banks said.

However, the market could be approaching a “paradigm shift,” where the next time the market shifts perhaps it even goes to electrics.

At any rate, he emphasizes that fuel prices are likely to go higher and cause a bit more of a financial pinch on drivers’ wallets.  

“You feel it now,” he said of forecasts for $2.75/gallon gas. “And I think people are really going to feel it at $3 and cars are going to be more fuel efficient. But the fact that we’ve invested so much in crossovers, it’s no surprise that everyone’s migrating towards those segments.”

Banks is among the collection of experts on tap for , the series of industry-leading conferences that begin on Nov. 12 in Scottsdale, Ariz.


August ‘perfect storm’ keeps wholesale prices on track for overall rise by year end

CARMEL, Ind., and McLEAN, Va. - 

The unusual summertime wholesale price movements seen by both KAR Auction Services and J.D. Power Valuation Services might push the costs that dealers face in the lanes nearly 3 percent higher by the time the year ends.

The August price updates from both companies conveyed notable wholesale price surges, with KAR chief economist Tom Kontos calling the situation in an online video that accompanied his analysis, “a perfect storm for the used-car market in August as retail sales and wholesale values were both strong.”

He added in his latest Kontos Kommentary that, “Retail demand and upstream remarketing were key contributors to wholesale used vehicle price growth in August, as prices were up on a month-over-month and year-over-year basis.”

According to ADESA Analytical Services’ monthly analysis of wholesale used-vehicle prices by vehicle model class, wholesale values in August averaged $11,049, which marked a 1.4-percent rise compared to July and a 0.9-percent lift relative to August of last year.

Kontos said car prices in total went up 2.2 percent month-over-month, while truck prices rose 1.0 percent, “indicating that car segments are now in better supply-demand balance.”

Meanwhile the team at J.D. Power Valuation Services shared that August prices “ended the month even stronger than expected.”

The J.D. Power Valuation Services’ Seasonally Adjusted Used Vehicle Price Index increased 2.2 points on a sequential basis to land at 121.9. The reading also jumped 6.3 points year-over-year.

The August index rise represented an increase for the third consecutive month, leaving the reading at the highest level since late 2015.

“The used-vehicle market starting showing its strength in the middle half of 2017, and there are no signs of it letting up,” analysts said in Guidelines. “Most of the market’s left in prices has been driven by mainstream car growth, however, mainstream utility segments continue to show firmness as well.”

J.D. Power Valuation Services elaborated about August car performance, noting that small-car prices rose 2 percent and prices for midsize cars ticked up by 1.5 percent.

Jonathan Banks, the company’s vice president of vehicle analysis and analytics, detailed what’s happening outside of the lanes that’s impacting car prices during a phone conversation with AuSM earlier this month

“Incentive spending is still a bit higher than what you would like to see. The car segments are still a little misaligned, but it’s getting a lot better. It was nice to see what Honda did with the Accord when sales didn’t meet their expected demand. You expect that from Honda,” said Banks, who along with Kontos are among the collection of experts on tap for , the series of industry-leading conferences that begin on Nov. 12 in Scottsdale, Ariz.

“I think we’ve reached the point where if manufacturers keep production in line with the sales we’ve been seeing the past three or four months, I think they’re pretty close, we’re seeing that people still want cars,” Banks continued. “But I think pulling back in production was the right thing to do. You would like to see incentives around 10 percent for cars, but we’re not quite there yet.”

While mainstream car prices are helping to push overall figures higher, J.D. Power Valuation Services explained why the same situation cannot be said about luxury vehicles. Again from the latest installment of Guidelines, analysts pointed to higher incentive spending as the headwind.

Turning back to Kontos and the August information from KAR, he indicated average wholesale prices for used vehicles remarketed by manufacturers rose 3.2 percent month-over-month and 2.0 percent year-over-year.

Kontos noted prices for fleet/lease consignors were up 1.5 percent sequentially and up 8.2 percent annually.

He added that average prices for dealer consignors ticked up 1.9 percent versus July and 0.6 percent compared to August of last year.

And with regard to the other ingredient for that “perfect storm,” Kontos cited data from the National Independent Automobile Dealers Association that showed retail used vehicle sales by franchised dealers increased 4.5 percent year-over-year in August.

The rise for independent dealers was even more robust as Kontos put the year-over-year jump at 9.8 percent.

Kontos went on to mention figures from Autodata, Corp. that revealed August certified pre-owned sales 4.9 percent from the prior month and 1.8 percent year-over-year. According to Autodata, on a year-to-date basis, CPO sales are up 2.5 percent versus last year.                

So with all of that activity in mind, J.D. Power Valuation Services sees wholesale prices rising by 2.9 percent by the end of 2018. Analysts acknowledged the climb might not be that much if negative price factors such as incentives, rising supply, worsening credit conditions and a jump in gas prices play bigger roles. However, they think positive factors — favorable labor conditions, strengthening housing prices and long-term quality improvements — outweigh negatives.

“There are two primary factors why the used market continues to heat up,” analysts said in Guidelines. “First, dealers are placing more emphasis on used-vehicle operations, and second, vehicle affordability is becoming increasingly important to consumers.”

Senior editor Joe Overby contributed to this report.

ADESA Wholesale Used-Vehicle Price Trends

   Average  Price  ($/Unit)  Latest  Month Versus
   July 2018  June 2018  July 2017  Prior Month  Prior Year
 Total All Vehicles  $10,902  $10,895  $10,887  0.1%  0.1%
 Total Cars  $8,519  $8,548  $8,613  -0.3%  -1.1%
 Compact Car  $6,434  $6,441  $6,582  -0.1%  -2.3%
 Midsize Car  $7,457  $7,533  $7,633  -1.0%  -2.3%
 Full-size Car  $7,275  $7,495  $7,018  -2.9%  3.7%
 Luxury Car  $13,294  $13,172  $13,582  0.9%  -2.1%
 Sporty Car  $14,225  $14,515  $14,164  -2.0%  0.4%
 Total Trucks  $12,922  $12,901  $13,058  0.2%  -1.0%
 Minivan  $7,937  $8,652  $8,604  -8.3%  -7.7%
 Full-size Van  $13,306  $13,202  $11,875  0.8%  12.1%
 Compact SUV/CUV  $10,805  $10,829  $10,467  -0.2%  3.2%
 Midsize SUV/CUV  $10,992  $11,135  $11,402  -1.3%  -3.6%
 Full-size SUV/CUV  $13,198  $13,499  $13,353  -2.2%  -1.2%
 Luxury SUV/CUV  $18,495  $18,331  $19,099  0.9%  -3.2%
 Compact Pickup  $9,796  $9,471  $9,615  3.4%  1.9%
 Full-size Pickup  $16,583  $16,386  $17,061  1.2%  -2.8%

Source: ADESA Analytical Services.

Dealers use purchase guarantee to experiment with wholesale buying

CARY, N.C.  - 

There are some phonetic similarities, but there’s a key difference between the words “insurance” and “assurance.”

It boils down to protection from what you can't necessarily control (insurance), versus an added layer of protection designed to allow greater freedom for choice in decision-making (assurance).  

And the latter is what is being offered through wholesale vehicle return guarantees provided by parties like DealShield, which announced Thursday it is now giving dealers the option to upgrade their DS360 Return Guarantee from 21 days to 30 days.  

“Dealers should have insurance for their vehicles; that’s important. We don’t insure the vehicle, but we do give them assurance that they can return the vehicle within 21, and now 30 days, if it doesn’t meet their needs,” said Brett Woods, interim vice president of assurance at DealShield parent company Cox Automotive, in a phone interview.

Stu Dressler, who is interim leader and senior director of operations at DealShield, added: “What we really do is allow them to make choices. And that’s the big difference. With insurances, you’re protecting against things you can’t make the choice on. You can’t choose whether you’re going to have a fire or a flood.

“But you can make your own choices on whether you want to keep or return a vehicle.”

Choice. That’s the crux of the return guarantee provided by DealShield and the reason behind allowing dealers an extra nine days to return wholesale purchases.

And some dealers are using this to expand their wholesale sourcing strategy, knowing they will be protected should the plan not pan out. 

How DS360 guarantee works

Through the guarantee, should a subscribing dealer buy a wholesale car at a participating auction then decide he or she does not want it — for any reason — the dealer can bring the vehicle back to any auction in the DealShield network and receive a full refund.

DealShield says there is no arbitration and no questions asked.

The original window to return the vehicle was 21 days, and that is still being offered. But if dealers wish to upgrade, they can now have 30 days to return the vehicle.

“We’re just in constant back mode with our dealers,” Woods said. “It’s really as simple as them asking for more time to help them support their business. At the end of the day, that’s what we’re here for: to make it easy for them and really help them grow. And we think we can do that even better with a 30-day guarantee, for some dealers.”

Dressler added: “Each dealer has a unique value proposition in the way they use the products. For example, some of them wanted a little more time to be able to check out the vehicle and see if they have any concerns about it. Some of them wanted a little more time to get it on their lot and see how they’re feeling about if from a consumer-interest perspective – there’s just any number of reasons, because there’s so many different ways that the dealers use the product for their economic benefit.”

Expanding beyond a 'niche'

In a news release announcing the extension option, Woods mentions that some dealers utilize DealShield to “take chances on riskier inventory” that could end up benefitting their stores.

That might be cars out of the typical price ranges in which a dealer buys or in different markets from where the dealer usually shops, Woods said in the phone interview.

Dressler said that from a geographical standpoint, dealers have utilized this guarantee program for a bit of added confidence in wideing their wholesale sourcing to additional markets or auctions.

And an example of a dealer broadening its horizon on the pricing side, Dressler pointed to a Florida franchised dealership that was having a lot of success in used cars, albeit within a certain “niche.” So, the store wanted to try expanding.

“And it wasn’t that they were taking on riskier vehicles, per se. It was that they were not comfortable in a lower-price segment, because it just wasn’t something they had a lot of experience with,” Dressler said.

“So they used the guarantee literally to start buying vehicles at a lower price point to attract a different buyer than what they had. And it really grew their used-car sales,” he said. “The used the guarantee to give them that confidence to grow that part of their used business and really open up a new market to them.”

Lake Charles Auto Auction partners with AMS


Auction Management Solutions (AMS) expanded its client portfolio again earlier this month.

Now leveraging the firm for business development consulting is Lake Charles Auto Auction (LCAA) located in Lake Charles, La.  

Established in 1991, Lake Charles Auto Auction was started by Mike Pedersen as a two-lane night sale, catering to independent dealers in the area. Today, the operation is run by the second generation, Mike’s son Matt, who purchased the auction from his father in 2012. 

Matt Pedersen said, “It has been such an honor to learn this business from the ground up, and we are very excited to take the auction to the next level.”

LCAA expanded the facility in 2015 to a four-lane auction and are now about to complete a $2 million renovation to the main office building, including creating additional dealer parking.

“We are very excited to get into the new building to better serve our dealers. We expect to be moved in by the end of October,” Matt Pedersen said.

“We have spent a lot of time building a great base of dealer consignment business over the last several years, and we feel that it is time now to start to expand deeper into the world of national consignors,” Pedersen went on to say. “We feel that AMS can be a great help to achieve our goals.” 

AMS’ auction partnerships now include 24 operations from coast to coast.

“We are very excited to have LCAA join the AMS group of independent auctions,” AMS president Tom Stewart. “We started AMS with a focus of partnering with independent auctions to assist in growing their business, helping them utilize marketing efforts to increase their presence in the market, and to increase profitability. 

“We have a proven sales strategy that delivers proven results for our auction partners,” Stewart went on to say.

Cox Automotive estimate of Florence-damaged vehicles remains steady

CARY, N.C. - 

Cox Automotive is holding steady with its estimates of vehicle damage from Hurricane Florence as flooding reaches near record levels in some places in North Carolina.

The analyst team led by Cox Automotive chief economist Jonathan Smoke initially estimated last week that 20,000 to 40,000 vehicles could be lost due to flooding in the Carolinas. The latest update showed that estimate has not changed as the area tries to recover from this hurricane that the National Weather Service said dumped an estimated 8 trillion gallons of water.

All of that water is eventually working its way back to the Atlantic Ocean through waterways such as the Cape Fear River, which officials expect to crest this week in Fayetteville, N.C., at 61.6 feet, about 7 feet below the all-time high set in 1945.

Of course, during the process, vehicles in the path of flooding could be damaged if they haven’t been already. The scenes have triggered reminders of what happened last year after Hurricane Harvey deluged Houston with the most rainfall ever recorded during a single storm in U.S. history.

“We’ve been asked many times how this event differs from the devastating floods in Houston last year. From a business point of view, one difference is the current volume of used-car inventory,” Smoke said in .

“We’ve seen wholesale supplies tighten this year, and retail inventory has been moving more rapidly as a result. These are clear signs that demand continues to outpace supply,” he continued. “Going into last weekend, we had started to see more stabilization after values rose for the last three months, reaching an all-time record in August.

“Even though the replacement need will be smaller in this case, we could see values increase temporarily especially in the region due to limited supply,” Smoke went on to say.

“Hurricane Florence and its aftermath, however, will not have the notable impact on the larger U.S. vehicle market that we saw with Harvey, where an estimated 600,000 vehicles were damaged or destroyed, impacting both supply and demand,” he added.

The National Automobile Dealers Association reiterated that its philanthropic division is ready to provide help to member store employees impacted by Florence. Applications for assistance and a path to make donations .

“There are so many heroes to thank. The rescuers who are risking their lives to pull people from flood waters. The law enforcement and firefighters who are working around the clock. The nurses and doctors, the pilots, the utility workers. From the people of North Carolina, I say thank you,” North Carolina Gov. Roy Cooper said in a news release.

Best Auto Auctions to Work For: 2018 honorees

CARY, N.C.  - 

Congratulations to the recipients of this year's AuSM’s Best Auctions to Work For program, presented by CARS Recon.

The program is a free workplace study for the auto-auction industry that recognizes the best auto auctions to work for on an unranked basis. It is designed and intended for individual physical auction locations — and for the first time, digital auctions, as well.

Digital auction honorees are designated as such.

It is absolutely free for both physical and digital auctions to participate.

Winners are recognized in the  and at a Nov. 15 breakfast during the National Remarketing Conference + NAAA Convention segment of , which is being held Nov. 12-16 at the Westin Kierland Resort & Spa in Scottsdale, Ariz.

Here are this year’s honorees, listed alphabetically:

ACV Auctions
Auctions in Motion
Auto Auction of New England
DAA of Chattanooga
DAA of Huntsville
DAA of Mobile
DAA of Murfreesboro
Louisiana’s 1st Choice Auto Auction
Manheim Arizona
Manheim Dallas-Fort Worth
Manheim Darlington
Manheim El Paso 
Manheim Fort Myers
Manheim Fredericksburg
Manheim Hawaii
Manheim Keystone
Manheim Lakeland
Manheim Louisville
Manheim Mississippi
Manheim Nashville
Manheim New Mexico
Manheim New Orleans
Manheim Orlando
Manheim Pensacola
Manheim Philadelphia
Manheim Portland
Manheim San Antonio
Manheim St. Pete
Manheim Texas Hobby
Music City Auto Auction of Nashville
San Antonio Auto Auction
RMS Automotive

AuSM is very proud to lead the effort in identifying and celebrating these great work environments and cultures,” said AuSM group publisher Bill Zadeits. “We congratulate all the auctions that participated and those that were honored in this year’s study.”

More about the ‘Best Auto Auctions’ program

AuSM, teaming with the Best Companies Group (BCG) in Pennsylvania, underwrites the study. The study is managed by BCG, and the data is analyzed 100 percent by the staff at BCG. Best Companies Group directly administers all surveys and manages and analyzes all data and information that is gathered.

The Best Companies Group assesses the data from the group of auctions choosing to participate and develops metrics and standards based on that data to determine which auctions are named to the list of Best Auto Auctions to Work For.

The were put together by AuSM, which also gathered photos provided by the honored auctions. This is the third year of Best Auto Auctions to Work For.

To see those who won in either 2016 and/or 2017, see the .

We encourage all auto auctions, physical and online, to take advantage of this great workplace study opportunity and participate in 2019.

Stay tuned early next year, when we open up registration for the 2019 project.

Thank you to all who participated this year, and congratulations to those recognized in this year’s study!

Editor’s Note: KAR Auction Services, the parent company of the ADESA physical auction chain and the TradeRev digital auction, did not participate in the physical auction side of the Best Auto Auctions to Work For study this year. It did, however, participate on the digital auction side. To see the company’s ADESA physical auctions that earned recognition in the past, please see the .

Compact-car wholesale performance refutes thoughts of segment demise


Slightly modifying the famous Mark Twain line in light of how popular utilities are nowadays, Black Book’s latest information showed rumors about how the death of compact cars has been greatly exaggerated.

As a part of this week’s Market Insights report, Black Book reiterated that the three-year retention rates on compact cars have staged a remarkable turnaround in 2018 compared with the last few years. Editors indicated current three-year retention is averaging 43.0 percent versus 39.6 percent just one year ago, with much of this strength attributed to the strong economy and great value on smaller cars currently.

Compact cars are helping to keep the wholesale market steady, according to Black Book.

“Mainstream brand segment values remained stable last week, whereas luxury segments continued to experience negative changes in values,” said Anil Goyal, executive vice president, operations at Black Book.

Looking at volume-weighted information, Black Book reported that overall car segment values increased by just 0.02 percent last week. In comparison, the values had decreased at an average rate of just 0.01 percent per week during the previous four weeks.

Among car segments, editors noticed values of luxury cars (0.29 percent or $54) and prestige luxury car (down 0.20 percent or $68) decreased the most last week.

Again, analyzing volume-weighted data, Black Book determined overall truck segment values (including pickups, SUVs and vans) softened by just 0.09 percent last week. In comparison, the values had dipped by an average rate of 0.10 percent per week during the previous four weeks.

Within truck segments, editors found that values of full-size luxury crossover/SUV (down 0.54 percent or $171) and midsize luxury crossover/SUV (down 0.27 percent or $55) softened the most.

Whether or not it’s a compact car rolling over the block, Black Book representatives stationed at almost 60 sales nationwide spotted brisk activity in the lanes. The anecdotes observers shared covered nearly the entire country, including:

— From Florida: “The rental and off-lease lanes were selling well. Most of the older vehicle lanes struggled due to the poor condition of the units.”

— From Arizona: “The market is still good here as dealers are buying and paying strong prices to obtain inventory.”

— From Massachusetts: “This was the first sale in a long time where the dealer, captive and fleet/lease consignors saw the values and overall activity drop.”

— From Michigan: “Anything really nice with low miles will fetch top dollar whether it is a truck, SUV or passenger car.” 

— From Missouri: “It was a good sale early as they sold almost everything. The no-sales became prevalent toward the end of the sale.”

Copart announces second Germany location


To meet increasing buyer and seller demand in Germany, Copart has established a second location in Germany that is located near the city of Leipzig.

The company announced Monday that its second location in Germany can store up to 4,500 vehicles and will hold bi-weekly auctions on Thursdays at noon.

“We are proud to open our second location in Germany,” Copart Germany managing director Alain Van Munster said in a news release. “With our proximity to Leipzig, we are able to more efficiently serve a substantial portion of the German market.

Our location is also closer to our members in Poland and Eastern Europe, who represent an important buyer base for our vehicles," Van Munster continued.

Copart subsidiary opens new Wisconsin facility

Meanwhile, another addition to Copart comes from its National Powersport Auctions (NPA) subsidiary in Wisconsin.

NPA, a Copart platform, has opened the doors to NPA Madison — a new 66,000 square-foot size facility in DeForest, which is just outside of Madison.

Located at 6474 Blanchars Crossing, the new location’s first live auction was scheduled to take place on Thursday at 9 a.m. CT.

“Why did we choose Madison? To make it easier for our dealers to do business with us. Madison is the state capital and is near Chicago, Minneapolis and Milwaukee. This puts us much closer to our customers in the region and makes buying and selling through NPA more convenient,” NPA chief operating officer Jim Woodruff said in a news release.

“NPA’s new Madison location reduces the time to auction for all NPA stakeholders in the region. There are several flights between Madison and our other locations, making this new location readily accessible for out of state Buyers and Sellers,” Woodruff continued.

Given the location of the new auction, Woodruff said that he expects live auctions held at the facility to have a diverse mix of units totaling 600 between 800.

UPDATED: Industry focuses on safety of employees and customers as Florence impacts Carolinas

CARY, N.C. - 

As flooding continues, the used-car industry is mobilizing efforts to handle ramifications from Hurricane Florence, which authorities say already has resulted in 19 deaths throughout the Carolinas.

From how to handle another swell of flood-damaged vehicles to what replacement demand might do to wholesale prices, AuSM reached out to an array of industry leaders and experts on Monday. DriveTime chief executive officer Don Reese might have summarized the entire situation when he said in a news release before Florence inundated parts of the Carolinas with nearly 30 inches of rain: “The safety of our employees and customers is our primary focus.”

Reese and managing director of retail Jamie Fischer spoke in a YouTube video on behalf of DriveTime and its affiliated finance company, Bridgecrest, with more than $6 billion in serviced auto contracts, sharing their Florence emergency response that includes assistance for impacted employees, customers and the communities where all reside.

Meanwhile, Insurance Auto Auctions chief executive officer and president John Kett described a similar sentiment via a letter sent to AuSM that mentioned in part, “We all have great concern for those in the storm’s … path.”

Kett also mentioned that in less than one week, IAA organized more than 1,300 trucks to transport vehicles, more than 400 dedicated IAA team members to assist with the effort and nearly 1,100 acres to store damaged units.

“The stats above truly illustrate the power of IAA’s operational grit, strength and the overall breadth of our organization’s capability. I am confident we are prepared to serve our customers in this time of need,” Kett wrote in a letter dated from last Thursday.

AuSM followed up with IAA and asked what unique challenges come from responding to a natural disaster in the Carolinas.

“In terms of Florence, we are facing two challenges as we respond, flood waters and lack of power,” Kett said in an message sent via email late on Monday afternoon. “Flood waters have completely cut off some areas, such as Wilmington, and our IAA Tow Network simply cannot safely access them today. Flood waters have also made some roads/highways inaccessible or have completely closed them down such as I-95 just north of Fayetteville, N.C.

If roads are closed, it is difficult for tow trucks to easily drive into certain areas which can increase the time it takes to pick up a vehicle,” he continued. “Simple lack of power creates all the usual issues, however communicating can also be difficult if cell phones cannot be easily charged.”

Kett also described the most important lessons learned from Hurricane Harvey a year ago that could help sharpen IAA’s management of Florence-related demands.

“The IAA Catastrophe Response team maintains a philosophy of continuous improvement,” Kett said. “One of the most critical lessons we learned from Harvey was specific to our tower assignment and dispatch process. IAA assigns specific vehicles to a tower based on their equipment and dispatches them to pick up and drop off vehicles at one of our facilities. The process, for IAA, had been historically manual and paper based. During Harvey, IAA had over 1,000 towers in operation and saw the potential for this manual process to create long wait times for towers.

“In the year since Harvey, we have worked diligently to fully automate our assignment and dispatch process, and today our towers utilize the IAA Tow App,” he continued. “This allows them to receive assignments and be dispatched to vehicles all via their web enabled phone or device.  They no longer need to come into a branch to receive paper assignments. 

“The Tow App also provides both IAA and our seller clients with real time data so we know when a vehicle has been secured as well as when and where it has been dropped off,” Kett went on to say. “There are several additional benefits to the new IAA Tow App including decreased cycle time for vehicle pick-up, improved data for insurance companies, and minimal downtime for towers.”

Meanwhile, Cox Automotive also shared an update on the status of its operations within Florence’s path. As of Monday afternoon:

• Manheim Wilmington is closed until further notice.  

• Manheim Statesville: conducting regular business hours

• Manheim Charlotte: conducting regular business hours

• Manheim Darlington: conducting regular business hours   

• Manheim North Carolina: conducting a digital versus in-lane sale on Monday  

“In the wake of Hurricane Florence, Manheim is focused on ensuring the safety and well-being of our team members in affected areas,” said Tim Janego, Manheim regional vice president for the Northeast Region. Thankfully, we’ve accounted for all North and South Carolina team members.

“The Atlanta-based corporate human resources team is providing relief resources and information to those impacted by the storm, record-breaking flooding and loss of utilities,” Janego continued. “We’re also connecting Manheim team members to the Cox Employee Relief Fund (available through Manheim’s parent company Cox Enterprises), which offers immediate financial assistance for unexpected needs resulting from a disaster.

“In addition, Cox Automotive is committed to helping the American Red Cross with disaster relief efforts and invites team members and their family and friends, as well as clients to donate to American Red Cross relief efforts at .

“While taking care of our people, we’re also assessing our clients’ inventory and communicating with dealers about the status of their assets and our business operations,” Janego went on to say while adding that clients can go to for more information.

An update from Auction Management Solutions indicated neither of its auctions near Florence’s path sustained damage, but each was impacted by dealer attendance for its weekly sales.

“The dealers (buying and selling) in the affected areas did not attend the sales so overall attendance was light, even online,” AMS said in a message sent to AuSM.

AMS added that Richmond Auto Auction (RAA) moved its anniversary sale to Friday, allowing dealers in the impacted areas to attend and source inventory.

RAA will be including a fundraiser for all those dealers and their employees impacted by Florence. Individuals can Wyatt Carter at [email protected] for more information.

The National Automobile Dealers Association reiterated its commitment to help employees of dealership members who might be impacted by Florence.

The NADA Foundation’s Emergency Relief Fund provides financial assistance to dealership employees and their families who sustain personal property damage from the hurricane and potential floods.

To download the application for financial assistance, visit For more information, call (703) 821-7102.

According to the latest news release from North Carolina Gov. Roy Cooper, first responders have reported rescuing and evacuating 2,600 people and 300 animals from flooded areas so far, and rescues are ongoing in the Tar Heel State. Nearly 1,000 personnel from North Carolina and other states, the Federal Emergency Management Administration (FEMA), the National Guard and the Coast Guard deployed with more than 200 boats and several helicopters to conduct search and rescue operations, mostly in the southeast portion of the state.

Officials anticipate rescue operations to continue for several days.

Undoubtedly vehicles are being left behind as flooding continues. Cox Automotive distributed some early estimates of potential damage before Florence pushed ashore.

In a message to AuSM, Black Book reiterated that approximately 700,000 cars and trucks were either damaged or destroyed during Hurricanes Harvey and Irma last year in the Texas and Florida regions. Editors pointed out this toll eventually led to an increase in the price of some used vehicles, as demand rose from people immediately looking to replace their damaged or destroyed vehicles.

Black Book noted that demand for cars, especially this summer already was causing prices to rise slightly even before Florence, so any rush to replace damaged vehicles could force prices higher in the near term. Last month alone, editors computed the average price of a used compact car was listed at $8,784, about 0.6 percent higher than the previous month.

Prices for midsized cars were listed at $10,341, about 0.8 percent higher than the previous month.

“Typically at this time of year, prices on those cars are seeing declines, not increases,” Black Book said.

For now, getting people to higher ground is taking priority.

“Flood waters are raging across our state, and the risk to life is rising with the angry waters,” Cooper said. “We are working now in doing everything we can to prevent more deaths.”

Editor's note: AuSM will update this report as developments arise.

Auction Academy plans for fifth class graduation; names past graduates turned leaders

FRANKLIN, Tenn. - 

Just months away from concluding their two-year course of study at Auction Academy, students of the program's fifth class will soon meet in Detroit for three days from Oct. 15 through Oct. 17 as part of its final session.

While in Detroit, the class will meet with National Auto Auction Association chief executive officer Frank Hackett and visit Manheim Detroit Auto Auction.

Most recently, the class took a trip to Chicago, where they visited America’s Chicago Auto Auction and met with representatives from Donlen, NCM Associates and World Omni Financial, according to Auction Academy.

In March, Auction Academy will hold a graduation ceremony for its fifth class during the next CAR Conference in Las Vegas. Auction Academy President Penny Wanna said that students graduate with the training and tools they need for success in the remarketing industry.

“We frequently hear back from Auction Academy graduates, who tell us how much the program has contributed to a better understanding of the industry and helped prepare them to take on major responsibilities,” Wanna said in a news release Friday.  “As we approach the final meeting of our fifth class, we’re excited and inspired to see the number of previous graduates who have moved into significant management positions since completing the program.”

Many previous students who have graduated from its past four classes have already taken on leadership roles at auto auctions nationwide, according to Auction Academy.

Just two years ago, Luke Dietrick, a member of Auction Academy’s fourth class, was appointed to serve as general manager at Indiana Auto Auction just ahead of his graduation from the program in 2016.

Dietrick credits Auction Academy for not only providing him with valuable auction industry insight, but also networking and relationship building opportunities, as well.

“Auction Academy expanded my knowledge of the auction business and introduced me to many leaders in the industry that I’d otherwise have spent a lifetime developing,” said Dietrick. “My peers in the program are the new generation of leaders; my association with them was invaluable as we learned together and will continue to help me as we work and serve in the industry.”

According to Auction Academy, in addition to Dietrick, past Auction Academy students who have gone on to take on leadership roles within the industry include:

  • Matt Alombro, auction manager at Louisiana's 1st Choice AA
  • Chris Angelicchio, GM at ADESA Pittsburgh
  • Eric Autenrieth, GM and managing partner at Carolina AA; managing partner at Indiana AA
  • Chris Barile, GM at Alliance AA, Longview
  • Chrissy Briggs-Sellstrom, GM at Greater Erie AA
  • Justin Brown, GM at Missouri AA
  • Wyatt Carter, GM at Richmond AA
  • Scott Crane, GM at ADESA Reno
  • Lawrence Cubitt, GM at ADESA Flint
  • Brandon Derrick, GM at Memphis AA
  • Brian McConkey, assistant GM at DAA Seattle
  • Bill McCready, vice president of operations at Southeastern AA of Savannah
  • Dave Pendergraft, GM at DAA Northwest
  • Luke Pidgeon, GM at El Paso Independent AA
  • Andrew Pyle, chief sales officer at Mountain State Auto Auction
  • Tommy Rogers, GM at BSC America's Clayton Station
  • Dave Ward, GM at ADESA Boise
  • Clint Weaver, GM at America's AA Harrisburg