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Friday, June 01, 2012

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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Sunday, May 27, 2012

Bundling, dealer reserve may draw whistles on regulatory gridiron

Jim Henry
Automotive News -- March 28, 2012 - 12:01 am ET

Some items related to auto lending could come under scrutiny by government regulators, speakers at the Consumer Bankers Association convention in Texas said last week. And that could be cause for worry, they said.

1. Bundling: More F&I vendors and dealerships are packaging aftermarket products instead of pricing them individually.

Doug Ekizian, senior manager of the Consumer Finance Group at PricewaterhouseCoopers, said in a presentation on "enterprise risk management" that regulators might not like that.

"Aftermarket products should not be bundled in such a way as to obscure relative costs. ... The total cost of a product, including interest, points and fees, should be easy for a customer to understand," he said.

2. Customer complaints: The Consumer Financial Protection Bureau has launched a Web site, consumerfinance.gov/complaint/, for gathering consumer complaints about financing, including auto. But lenders say the auto finance complaint platform is overly broad. The CFPB has begun to exercise its jurisdiction over depositary institutions -- those offering checking and savings accounts -- but not nondepositary ones, such as captives and independent finance companies. Yet the site is open to complaints about all auto lenders. Lenders worry the site will attract complaints about companies the bureau isn't yet monitoring and can't do anything about. When those complaints aren't addressed, lenders fear consumers will blame them, not the bureau.

The CFPB hasn't said just how it will forward a consumer complaint to a lender that was the subject of that complaint.

"The list of complaints is building," Ekizian said. For example, he said, consumers have read about mortgage "modifications" to keep borrowers in their homes even when they're behind on payments. Some consumers are disappointed to learn auto lenders don't work the same way, he said.

Separately, the American Financial Services Association sent CFPB Director Richard Cordray a written complaint on March 13.

"When they created a credit card [complaint] platform, there was a lot of dialogue back and forth. We didn't see that" for autos, said Bill Himpler, AFSA executive vice president.

3. Dealer compensation: At roundtable discussions last year, the Federal Trade Commission heard repeated complaints about dealership scams such as "packing" cars with unwanted options and so-called yo-yo financing, in which the original deal falls through and the customer has to come back and sign a new and potentially more expensive contract.

Dealer reserve, in which the dealer arranges the financing and marks up the customer's interest rate to share in the profits, also came in for criticism.

Andy Koblenz, chief counsel for the National Automobile Dealers Association, said the industry has three good arguments why there's no need to create new regulations for some common complaints cited at the FTC roundtables:

• They're already illegal. This would apply, for example, to "packing" cars with unwanted options.

• They occur only rarely. For example, yo-yo financing. Consumer-advocate groups see this as a sneaky tactic to get more money. The industry sees it as a mistake most dealers probably prefer to avoid.

• They're based on old information. Overcharging for rustproofing was once a common complaint. Even though it's virtually unheard-of today, it still comes up as an example of shady dealer business practices.

None of those arguments applies to dealer reserve, though, Koblenz said. And that could make it a regulatory target.

"It happens all the time. Is it happening today? It is. Is it currently illegal? No," Koblenz said.

He said one legal argument in favor of today's dealer compensation is that it does no harm. If anything, he said interest rates on indirect loans negotiated by dealers are often lower than direct loans with no middleman.

You can reach Jim Henry at autonews@crain.com. Readers are solely responsible for the content of the comments they post here. Comments are subject to the site's terms and conditions of use and do not necessarily reflect the opinion or approval of Automotive News. Readers whose comments violate the terms of use may have their comments removed or all of their content blocked from viewing by other users without notification.

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Wednesday, February 22, 2012

Manheim to Purchase Dealer Services Corp.

Auto Remarketing | Manheim to Purchase Dealer Services Corp.

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HOME AUCTION WHOLESALE RETAIL FINANCIAL SERVICES TECHNOLOGY TRENDS AUCTION DIRECTORY Skip to Navigation Manheim to Purchase Dealer Services Corp.

January 27, 2012 | ATLANTA By Auto Remarketing Staff

Sandy Schwartz, Manheim

On Thursday afternoon, Manheim revealed it is purchasing Dealer Services Corp. of Indiana in an effort to “reinforce its commitment to provide inventory financing to independent dealers.”

The deal is designed to complement the lending Manheim already offers via its financial services arm — Manheim Financial Services.

“Manheim is always looking for ways to enhance its service offering to customers,” explained Sandy Schwartz, Manheim president. “The purchase of DSC presents a great opportunity for us to broaden our lending scope and customer base. In addition, we gain access to state-of-the-art technology and digital tools that will enhance our customers’ experience and improve the company’s efficiencies and opportunities for lending.

“We also gain a group of employees at DSC that have a strong culture of customer focus and service, adding to the high level of personalized service our MAFS employees deliver,” he continued.

Also chiming in was Brian Geitner, chief executive officer of DSC, “Our mission of empowering our customers with strategic products and services is only more enhanced by joining the Manheim group of companies. It’s easy to see how MAFS and DSC’s service platforms will complement each other and broaden Manheim’s ‘service reach’ across the country.

“We are proud to add the DSC brand to Manheim’s strong lineup of products, services and companies,” he continued.

Management explained that adding the DSC line to MAFS’ existing products will give dealers access to a broader offering of products and additional staff to help with their needs.

Moreover, technology will be garnered by Manheim as a part of this deal, making it easier for customers to get information via smartphones and desktops regarding their company lines of credit, officials said.

Barclays Capital acted as the financial adviser to Manheim, while William Blair & Co. acted as the financial adviser to DSC.

Pending regulatory approval, the transaction is slated to close within the first quarter.

Editor's Note: Stay tuned to Auto Remarketing for more insights into how this deal will impact dealers and the market.

Printer-friendly version Comments Submitted by rob (not verified) on January 27, 2012.

Manheim buys DSC

reply Submitted by Anonymous (not verified) on January 27, 2012.

If you are an independent dealer and are looking for Capital, go to www.carfinancial.com and let the professionals at CAR Financial help you work out a plan. They have both wholesale and retail options, from floorplans to BULK purchases and streams of payments to point of sale financing. WWW.CARFINANCIAL.COM

reply Submitted by Anonymous (not verified) on January 27, 2012.

What this means is that the independent used car dealers have ONE LESS floor plan company to go to. From the already limited number of available options that exist today, there will be one less choice for them when this deal closes which consequently may impact some independent used car dealers to the point of shutting their doors.

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