Polk: Commercial Registrations Decline in 1Q; New Sales VP Named

A shortage of used commercial vehicles could be impacting the industry according to the latest analysis by Polk, with registrations down across all used gross vehicle weight sectors.

On Wednesday, Polk reported that used commercial vehicle registrations (GVW 3-8) declined by 26.7 percent to 164,024 units in the U.S. during the first quarter of 2012, compared to the same period in 2011.

“While used-vehicle registrations remain strong, the long awaited decline in used commercial vehicle registrations as seen in the past two quarters may indicate that a shortage of good, clean available units could finally be upon us,” said Gary Meteer, account director for commercial vehicle solutions at Polk.

During the 2012 calendar year, a record 791,288 used commercial vehicle registrations were reported, representing a 17.7 percent increase from the number reported during the 2011 calendar year.

“With the first quarter complete, it is hard to believe that the total number of used registrations during 2012 will meet or beat the record levels seen in 2011,” Meteer added.

The numbers do not indicate a lack of confidence in the used commercial truck market, he noted, but do indicate that the continued growth experienced since the 2008 calendar year will likely not continue through 2012.

Used commercial vehicles represented 55.9 percent of total commercial vehicle transactions in the market during the first quarter, down from 70 percent during first quarter 2011.

Combined with 129,755 new registrations of GVW 3-8 vehicles over the same time period, overall commercial vehicle transactions in first quarter 2012 were down 10 percent from the same quarter last year.

The decreases were larger in some other GVW sectors year-over-year, with declines ranging from 46.4 percent for GVW 7 vehicles to a decline of 18.6 percent for GVW 3 vehicles.

As for GVW 8 vehicles, Meteer said, “One of the most frequently watched and analyzed activities in the commercial vehicle market is the number of used registrations for GVW 8 vehicles. The used registrations of GVW 8 vehicles were down 27.6 percent from the level achieved during the first quarter of the 2011 calendar year.”

GVW 8 used-vehicle registrations during the first quarter this year accounted for 39.8 percent of total used transactions compared to 38.6 percent last year, 47.6 percent in 2010 and 41.2 percent in 2009.

Criteria for the Polk analysis summary require that both the business name and the business address on the vehicle registration must have changed from the previous owner. Information supplied by each state’s Department of Motor Vehicles is also utilized.

New VP Named

In other news from Polk, the company has promoted Brad Korner to the role of vice president of sales and client services for Automotive Retail Solutions and Media.

“We are excited to welcome Brad to this role,” said Kendra Rawls, senior vice president of global sales and marketing at Polk. “His proven track record and extensive industry experience, combined with his strong focus on customer relationships, will serve as a great asset to Polk customers and prospects.”

Korner has been with Polk since 2004, and is a 30-plus-year customer relationship management veteran. He previously served as director of sales and client services for the ARS group.

Prior to joining Polk, Korner spent nearly 24 years with Reynolds and Reynolds.

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NCM Celebrates First Graduating Class of General Management Executive Program

The auto industry has a new group of leaders celebrating their success as the first-ever graduates of a new management training program.

Students of NCM Associates’ General Management Executive Program for franchised dealers celebrated their graduation on Wednesday.

“I am very proud of each one of today’s graduates; they have worked diligently to balance the rigors of professional study with their day-to-day dealership duties through the 11 months of this program,” said Garry House, director of the NCM Institute Center for Automotive Retail Excellence.

“I am certain they will all find great success in their retail automotive careers, and I applaud their dealership principals for the investment they’ve made in their students’ success.”

Student Tarik Shapli from Audi Wynnewood is among the inaugural class.

“This course provides a great overview of a general manager’s area of responsibility, and then backs it up with a lot of detail regarding the measurement, performance and improvement of each department,” Shapli said.

The General Management Executive Program curriculum is designed to give students the knowledge and skills necessary to successfully manage a dealership, including balancing the industry’s volatility and the many operational decisions that drive dealership profitability.

The program consists of a series of sessions conducted over the span of 11 months, held at NCM Institute training headquarters and led by NCM’s faculty of industry veterans.

“It’s vital these students have a faculty comprised of industry experts and veteran automotive retail executives to guide them,” stated House. “Our instructors are highly experienced retail managers who, as well as their positions on the NCM Institute faculty, are also actively working in dealerships with their clients. They bring deep, real-world retail automotive management experience to the classroom.”

Paul Faletti, Jr., NCM's president and chief executive officer, congratulated the graduates via a special video announcement, encouraging them to put the principles learned to good use in their respective dealerships, and to be open to innovative approaches and technologies without abandoning fundamental best practices.

The next class of the General Management Executive Program is set to kick off in August. For more information, visit www.ncm20.com.

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Beige Book: Used Market Consistently Strong

The overall retail sales market for dealers examined by the Federal Reserve in its most recent reporting period appeared fairly positive, and for the districts sharing insight on used-vehicle sales, the environment is a solid one.

In its latest Beige Book report, Fed pointed out rather stable used-vehicle sales, as well as a robust new-car market.

“New-vehicle sales remained strong and inventories of some popular models were tight. Sales of used automobiles held steady,” officials noted in the report.

Expanding upon this, the Fed added: “Automobile sales generally remained strong, although the pace of growth moderated in a few districts.

“Sales of used vehicles held steady, and a slight decline in prices was reported. Inventories of popular vehicles were tight,” it continued. “Outlooks were positive, and contacts across several districts expect steady growth in sales in coming months.”

While not all 12 Fed districts offered insight on their respective area’s used-vehicle market, the ones that did noticed dealers reporting good signs for their business.

In the Second District (New York), for example, dealers talked of a healthy used market.

“The used-car market continues to be strong and prices remain elevated, although dealers in the Buffalo area note some recent softening in prices at auction,” the Fed said of the Second District. “Wholesale and retail credit conditions remain favorable and continue to improve.”

Moving over to Cleveland, the Fed observed a similar trend in the Fourth District.

“Purchases of used vehicles were fairly steady year-over-year — inventories are building and prices declined slightly,” officials noted.

Sharing more auto-related insight, they added: “On the financing side, we heard two reports that banks are more willing to work with dealers. Leasing activity picked up. Dealers are investing in manufacturer-mandated facility upgrades and imaging programs. Hiring for sales and service positions continued, but at a very slow pace.”

In the Eighth District (St. Louis), the Fed gave a more concrete numbers breakdown of how both the new and used markets are faring. Among its data points, the Fed illustrated that a fifth dealers in the region saw used sales climb relative to new sales, and another fifth saw the reverse.

Lastly, the Fed shared some of its used-vehicle insight from the Twelfth District (San Francisco). It found that consumers here are still going after used vehicles, and with low inventory, this led to high prices.

“Demand remained strong for used vehicles and combined with tight inventories to keep prices elevated,” the Fed explained.

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Better Used-Car Buys Found in the Big City, New Study Finds

According to a new study, used-car deals get better — hundreds of dollars better — as ya shopper heads toward the big city.

In all but two states studied in CarGurus’ latest survey, dealers within a 50-mile radius of a major city center offer better deals on their used-car inventory than those located farther outside that metropolitan center.

How much better? Some of the best city savings were found in New Orleans, at $770, Las Vegas at $641 and Atlanta at $606.

In California, New York and Texas — the states in the study with the highest populations — CarGurus reports finding prices at city dealerships at more than $500 less than at suburban dealerships.

Overall, CarGurus analysts reported an average price difference of $345 between used-car listing in cities and suburban/rural used-car listings within the same state.

“If you are looking for the best deal on a used car, head for the city,” said Langley Steinert, founder and chief executive officer of CarGurus. “Our data shows that dealers located in populated metro areas tend to price their inventory more competitively than dealers located farther outside the city. For suburban car shoppers looking for savings, it’s worth expanding your search to include city dealerships.”

Only two states studied bucked the city savings trend, CarGurus noted: In Indiana and Arkansas, suburban/rural dealerships offered consumers, on average, better deals on used cars than dealerships within those states’ major metro areas.

For this study, CarGurus applied its car valuation models to compare prices on millions of used-car listings offered at dealerships in and outside the top 50 U.S. metro areas.

“City dealerships” were defined as those located within a 50-mile radius of a major city center.

“Suburban/rural dealerships” were defined as those in the same state that were located beyond the 50-mile radius of the major city centers.

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New York Chevy Dealer Scoops Up GM Remarketing's Milestone Ride

Todd Caputo wasn’t sure what exact model would roll down the lane Wednesday morning at Southern Auto Auction, but he knew he wanted it.

And fortunately for the Chittenango, N.Y., dealer, his bid for the 14 millionth vehicle ever remarketed by General Motors — a 2011 Chevrolet Equinox — was the winner.

“I was excited to buy the car. I wanted to be a part of history,” Caputo told Auto Remarketing by phone Wednesday afternoon on his way back from the East Windsor, Conn., auction.

“I kind of stood outside the overhead door, so I couldn’t really tell exactly how many people were bidding on it. I could just see hands, but I couldn’t see faces,” the owner of Sun Chevrolet, Inc. added, noting that the bidding was “pretty active.”

As Caputo, GM and Southern AA celebrated this landmark sale, Dan Kennedy — manager of GM Remarketing — also shared his perspective with Auto Remarketing on Wednesday afternoon, not long after the vehicle was sold.

“When you start thinking about the number of vehicles that have gone before us … this really demonstrates the commitment we’ve got to our dealers, to be able to provide them with good quality used vehicles,” Kennedy said.

“One of the biggest (profit centers) is used cars,” he added. “Plus, this is also a feeder, if you would, for our certified pre-owned programs. It’s a great for our dealers to stay in the used-car business and get the quality of products they need in order to service the customers.”

There was not any specific numbers available as to how many of these 14 million remarketed vehicles have made their way into the GM Certified program, as these figures tend to fluctuate year to year, Kennedy explained.

However, it certainly has served as CPO supply stream.

“I think you can safely say that a fairly significant percentage of our vehicles that we sell at the auctions find their way into the certified program,” he noted.

Adding some more perspective from the certified side, Larry Pryg — national manager of Certified Pre-Owned Vehicles at GM — said:  “This GM Remarketing milestone speaks to the quality of our products and the success of our auction partners and Certified Pre-Owned dealers. Our Certified Pre-Owned dealers acquire a portion of their inventory from these auctions, and because of their success, our customers have a more robust vehicle selection.”

More Details on Landmark Sale

Sharing more about the sale, Caputo said he bought the vehicle around 10 a.m. EST.  The auction had a sign on top of the vehicle and an announcement was made about it being the landmark vehicle.

"They had the car wrapped up, so I didn't know what it was going to be prior to coming in," he noted.

Caputo learned this milestone vehicle — which had been a company car — would be at the sale after being contacted by the auction and invited to the sale. Having been an SAA customer for roughly 20 years, Caputo said this was a sale he attends anyway.

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Preferred Warranties Marks 20th Anniversary by Revealing Continued Sales Revenue Jump

Wayne Herring Jr., Preferred Warranties

Extended service contract provider Preferred Warranties began its 20th anniversary celebration this week by highlighting a 29-percent increase in sales revenues last year, coming on the heels of a 16-percent jump during 2010.

PWI national sales manager Wayne Herring Jr. declared, “2010 was strong, 2011 was even stronger.

“The new plans and dealer programs that we introduced last year have been extremely well received,” Herring continued. “We’re opening up new territories, and we have built the best customer service and sales team in the business. The long and short of it is that we have a lot to celebrate.”

Last year, the company introduced a new high-end protection plan, an online contract entry tool for dealers, new Spanish sales literature and expanded dealer rebate incentives.

PWI also introduced its Premier Plan, offering coverage on a wider range of parts and service needs including many new high-tech systems and components.  

“The coverage is so extensive that we’ve gone to an exclusionary contract,” Herring pointed out. “It lists the few items not covered by the Premier Plan. If a component or problem is not on that list, this plan covers it.”

The company also invested heavily in support and technology for dealerships that carry Preferred Warranties.

In June, PWI introduced eContract, an online program that can allow dealers to instantly compare, present and submit service contracts on virtually any vehicle.
“The speed and simplicity of Preferred’s online contract program are amazing,” stated Mike Bowers, of John’s Great Cars in Reading, Pa.

“In less than a minute I can enter the information on any vehicle, calculate all of the service contract options, and have it presentable for the customer on a single page,” Bowers added.

Last summer, the company also introduced new Spanish versions of marketing and sales materials.

“To my knowledge, Preferred Warranties was the first provider of aftermarket vehicle protection plans to make a focused effort on hiring bilingual claims reps,” noted Greg Reyes, one of PWI’s full-time bilingual customer service reps.

“The management team is committed to recruiting, training and maintaining the best bilingual staff in the business,” Reyes emphasized.

Celebrating aside, Preferred Warranties stressed it won’t be resting on its laurels. The company’s plans for 2012 include a new e-tablet app that can enable dealers to instantly customize and compare finance and insurance products for customers.

Herring insisted the company’s solid record of growth has come since its founding in 1992.

In 1998, Preferred Warranties was ranked No. 179 on the Inc. 500 list of fastest growing U.S. companies and earned a Torch Award for Marketplace Ethics from the Better Business Bureau. Today Preferred Warranties protection plans are insured by an A.M. Best “A-” underwriter, and offered through dealerships in 17 states. The company is rated “A” by the Better Business Bureau.

Preferred Warranties extended service contracts are available through dealerships in 17 states, including Alabama, Delaware, Georgia, Indiana, Kentucky, Maryland, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia.

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Benefits of Factoring Receivables

If you sell goods or services to commercial or government accounts you are very familiar with the fact that you have to offer your clients 30 to 60 days to pay their invoices. However, offering 30 day payment terms can be very challenging for business owners who must cover all the business's expenses while they wait to get paid. This quickly eats up any cash reserves and puts the business in a challenging position. Unfortunately, when it comes to getting paid, hurry up and wait seems to be the name of the game.

But there is a solution to this problem that you won't find at your local bank. It's called accounts receivable factoring. It has the following benefits:

1. It gets your invoices paid in 24 hours, eliminating long payment waits

2. Factoring is easy to obtain

3. Setting up an account takes just a couple of days

Although factoring provides your business with working capital, it is not a business loan. It is an advance on your outstanding invoices. Because of this, factoring invoices is easy to obtain provided that you do business with reliable customers. Furthermore, invoice factoring easily integrates into your company. It works as follows:

1. You deliver the goods or services and invoice your client

2. You send the invoice to the factoring company, who advances you up to 85% of your invoice as a first installment

3. You get to use the funds to pay business expenses, while the factoring company waits to get paid by your client

4. Once the factoring company gets paid, it rebates the remaining 15% as a second installment, less a small service fee

Factoring service fees vary based on a number of variables, such as monthly factored volume and how long it takes for an invoice to get paid. Based on these, fees can range from 1.5% to 6%. Generally speaking, factoring is very affordable if your clients pay their in 45 days or less.

Factoring invoices is a great alternative for startups and established companies that have exhausted their bank resources. It's a flexible product that is tied to your sales performance, this means that you will not get a fixed line. If your sales increase, so does your financing. This makes receivables factoring, an ideal product for growing companies.