The Real Car Business

Walking through the auction lanes the last several weeks, not one single sole has brought up politics, so I need to ask, Is the political arena effecting the current auction marke t? Listening to talk radio, watching talk TV, and reading news publications, the pundits don't want to talk business because it doesn't fit their narrative. They perpetuate the tired, dragged out, politics-as-usual relying more on the dumbed-down electorate than truly demonstrating and offering solutions like strict constitutional adherence, fiscal conservatism, environmental protection reform, term limits, tort reform, and US military superiority. Politics ... long-term sitting Congressman and Senators with blotted staffs... offering zero debate on how to revitalize our economy . John Adams said that to serve the country means working to accomplish the betterment of the country and then returning to your farm to work. In 2015, we have a progressive chasm, painfully wedging us further apart f...

As it nears 90 today, my youngest son and I are in the office organizing things and trying to stay cool. He's patient with me and really just wants to go to Verizon for a tour of the new phone he has his eye on. I leave my phone turned off on Sundays to keep my mind at work with out that device. I am deliberating how to adjust my company fee structure and wrestle with making a slight increase. We are starting our eleventh year in business and have never increased our prices... yet all around me auction fees are increasing steadily. My expense structure is fairly flat, but costs such as Autoniq (NADA, Black Book, AutoCheck, and Carfax) are increasing. Verizon... the amount of data we use on the hand held devices... is also increasing and the two combined are justification for making the change to our fee. It's a growing pain more than anything, and for that I am pleased. Going on in to the remainder of July and peeking at August, only a continued weakness in retail sales...

With fruit, it's easy... it's either an apple or it's not. With cars, it's tough because an Accord is not an Impala which is not a Fusion which is not an Optima. Now take oranges (the color, not the fruit). If it's an orange XV Crosstrek it's good but if it's an orange RDX it's positively auction-proof. My point is, how can similar cars differ so much in value? Within one segment such as the Accord, Impala, Fusion, Optima sample... each of these sedans fit essentially the same niche. Yet, [a] group of 2012 Accord EX sedans sold at [a] auction on [one] day can vary $2,000. And the same can be said for the Impala, Fusion and Optima. Now consider a composite of vehicles; say a multi-franchise, multiple location new car dealers' entire pre-owned inventory that that dealers management calls its ACV at $11,450,000. That is to say, that if all 760 units in its inventory were cashed today, they would get a check back for the 11.4 million. What are ...

... at the end of this post, my conclusion will be that the weather this winter has had less to do with the market than you would think. Now... if you have 3 locations and 1,000 units in inventory... you will argue my point. Retail traffic is down. People are on their roofs shoveling snow off or they are inside out of the biting sub-zero winds. And because sales are reflective of how many people are walking in to show rooms, the sales curve in January and February will show a dip. The auction market has only suffered operationally with increased snow removal costs and to some effect, fewer inbound trucks delivering to auction the day prior to [that] auction because there was indeed a severe storm that week. The auction market itself (measured by %'s sold and $'s) has NOT taken note of the weather at all; 4X4 trucks, SUV's and the coveted 2008-2011 sedans from 40K-90K have clicked right along (dead batteries or not). Dig out you aged and duplicate inventory and get ...

@CTWillMorris is a relatively new addition to my services, and during an auction I do find a few minutes here and there when I am able to record, or "tweet" what I just witnessed. Follow me on Twitter for real time auction trends.

I am making a change... and for me, that says a lot because my professional career really spans just two "jobs": 16 years at Southern AA and 9 years at Sudden Services LLC. I've spent more time on LinkedIn recently and see "professionals" that are 5-7 years into a career and have been at three different companies in two different industries and that brings me to the realization that the "change" that I am referring to is really no change at all. What's changing is the enhancement I am making to my company and how I will be modifying [its] template to successfully build upon my stability and reputation. If you don't say enough good about yourself, either there isn't anything there or, your modest. For me, it is the latter and that is changing as well! I have a vast and expansive wealth of auction experience and a unique perspective on what makes auction utilization for dealers work (and not work). Over the next 11 to 15 months, I am g...

It has been there to see for nearly 8 months... the incredible strength in used car prices at the auction block. Right there along with that has been, "...when is this madness going to stop". Yesterday [SOUTHERN AA CT] we saw a decline in prices, but the more indicative trend is the decrease in %'s sold. As the conversion rate decreases (sellers not hitting reserve or floor prices) and %'s sold decrease, buyers feel a nervousness and change bidding habits. You watch others abruptly stop at $13,900 and not chase a car into the 14's . You watch the post gavel negotiation between buyer/seller/auctioneer in a fruitless attempt to have that vehicle escalate another $1000. Then there are the duplicates that I so often refer to such as Altima, Sonata, Accord, Escape etc. Combine a nervousness with the awareness that you already have 6 of those in inventory and this decline we see now was in fact quit predictable. If you are struggling at auction, feel free to ...