2009industryreportpdf2009 niada used car industry report used car industry report table of contents...

2 0 0 9 N I A D A U S E D C A R I N D U S T R Y R E P O R T

USED CARINDUSTRYREPORTT A B L E O F C O N T E N T S

5 I N T R O D U C T I O NBy Michael R. Linn, President, NIADA Services

6 S E C T I O N O N ENIADA Membership Data

14 S E C T I O N T W OUsed Car Industry Data from CNWMarketing Research

24 S E C T I O N T H R E EBuy-Here, Pay-Here Industry Benchmarks

28 S E C T I O N F O U R“2008 Dealer Walk-In Traffic Study Results,”Presented by Northwood University andAutotrader.com

30 S E C T I O N F I V EAuction/Remarketing Commentary by TomWebb of Manheim and Tom Kontos of ADESA

32 S E C T I O N S I XNIADA Membership Survey

Used Car Dealer (ISSN 0279425X) is published monthly with one additional special issue, Used Car Industry Report, that is published in May bythe National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203; phone (817)640-3838. Annual subscription rates for NIADA members: $8 per year. Non-member subscriptions $80 per year. Periodicals postage paid atArlington, TX, and at additional offices. POSTMASTER: Send address changes to Used Car Dealer, 2521 Brown Blvd., Arlington, TX 76006-5203.The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of Used Car Dealeror the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as member ofNIADA, does not constitute an endorsement of the products or services featured. Copyright© 2009 by NIADA Services, Inc. All rights reserved.

I N T R O D U C T I O N By Michael R. Linn, President, NIADA Services, Inc.

Welcome to the 2009

edition of NIADA’s Used

Car Industry Report. The

nation’s current economic

status makes the 11th

annual edition of this

Report even more impor-

tant to dealers and indus-

try officials than ever before.

When we published our first report in

1999, our goals were to define some statistics

on our member dealers and to add to the

research data covering the independent

segment of the automotive industry. Our

hope remains that this report will provide

dealers with statistical information to help

them build stronger business models and

achieve success. We also want industry offi-

cials to understand our dealers in order to

provide better products and services which

also aid everyone’s business operations.

There have been a multitude of changes

and improvements over the years. The easy

comparison is size. The 2009 Used Car

Industry Report is twice the size of our first

effort a little over a decade ago. But the core

of this report remains focused on several

stable, unchanged features. One of those

fixtures is the work of Art Spinella of CNW

Market Research, whose materials were

included in the very first edition and continue

to help our Report remain an invaluable

research tool.

The 2009 Report contains all of the tra-

ditional hallmarks with a few of its own

tweaks and improvements.

Section One includes the results of

our annual member survey. New survey

questions were added to the latest research

and new distribution methods were utilized

to reach dealers for the 2009 version. The

results were a tripling in the number of

members who responded to the survey.

Although previous surveys portrayed a

strong picture of our dealers, the increased

survey numbers solidified the statistics down

to a deeper level. The figures help dealers see

how their operations compare to other

dealerships across the U.S.

Section Two again brings the return of

CNW Market Research. Spinella’s figures

look beyond NIADA members and envelop

a comprehensive analysis of the industry

itself. His research describes the inventory,

financing methods, the transactions

themselves, plus aftermarket factors. His

statistical overview will give you a picture

of a sophisticated industry with complex

operations. Art Spinella is known as the

independent researcher that literally

everyone turns to. His work proves why.

Section Three features the Buy Here,

Pay Here Benchmarks developed by Ken

Shilson of Sub-Prime Analytics and the

National Alliance of Buy Here, Pay Here

Dealers along with NCM Associates. With

major changes in the nation’s economic envi-

ronment, the growing Buy Here, Pay Here

business suddenly became a bigger focus for

the industry in 2009. Prospective and current

BHPH business owners can use these

Benchmarks to determine where they should

be in comparison to others and how they can

more successfully build their operations.

Section Four is a look at a new topic

for the Used Car Industry Report. It

also contains unexpected information.

AutoTrader.com and Northwood University

partnered on a national research study to

determine if dealers were putting their

advertising dollars in the right place. In

interviews with both dealers and consumers,

the research concluded that dealers made

incorrect assumptions about their walk-in

traffic. The information learned from

consumers indicates dealers may want to

reconsider how they drive and focus their

marketing to reach potential customers.

Section Five highlights highly-respected

automotive economists -- Tom Kontos of

Adesa and Tom Webb of Manheim. As

economists, they both understand the

synergy between the independent dealer and

the auctions each one represents. Each year,

they analyze the past year’s activities which

impacted remarketing within the used motor

vehicle marketplace. Then they draw in

outside economic factors, try to see into the

future, and share their economic insight

with us. Their commentary can be the

tie that brings all of the sections into a coher-

ent pattern.

The Used Car Industry Report was

among the first analytical studies of its kind

and remains a viable research tool for

dealers, vendors, industry experts and

communicators. NIADA finds

it to be one of our most

frequently used tools as we

deal with those businesses

and individuals who are

involved in our industry.

We hope that you will

find the statistics and nar-

rative just as valuable for

your own needs.

A Publication Of The National Independent Automobile Dealers Association And Used Car Dealer Magazine

5

2 0 0 9 N I A D A U S E D C A R I N D U S T R Y R E P O R T6

TYPES OF BUSINESSES YOU OPERATE(percentage of respondents)

RETAIL BHPH

80%

60%

40%

20%

0WHOLE-SALE

RENTAL LEASING SERVICEDEPT.

PARTSDEPT.

BODYSHOP

OTHER

78.371.0

27.225.6

39.841.4

9.23.63.5

22.121.5

5.85.5 5.15.2

2007

2-5EMPLOYEES

1EMPLOYEE

6-10EMPLOYEES

10+EMPLOYEES

NUMBER OF EMPLOYEES(percentage of respondents)

60%

50%

40%

30%

20%

10%

0

9.08.3

51.649.5

21.020.9 18.421.3

20082007

NUMBER OF YEARS IN BUSINESS(percentage of respondents)

20082007

1-5YEARS INBUSINESS

6-10YEARS INBUSINESS

11-20YEARS INBUSINESS

21+YEARS INBUSINESS

40%

30%

20%

10%

0

LESS THAN1 YEAR INBUSINESS

19.920.0

0.30.3

17.817.7

26.526.7

35.535.4

2008

7.014.19.4

NIADA MEMBERSHIP DATA

S E C T I O N

ONE

Each year, NIADA surveys itsmembers on a variety of topicswhich cover demographical andbusiness data. Results are com-pared with the previous year whichallow readers to see trends andchanges in the Used Car IndustryReport.

This year’s NIADA MembershipSurvey includes four new ques-tions concerning computer andinternet usage, warranty/servicecontracts and rental car operations.Those new questions are closelyrelated to existing queries; bothexisting and new questions areadjacent and are located on page12. The new questions, of course,do not include comparative data..The 2008-2009 recession and amajor increase in the number ofrespondents had some impact onthe latest statistics, but generallythe comparisons did not show dra-matic swings from previous years.

We would like to pay specialthanks to those member s who par-ticipate in this survey. Their infor-mation creates a resource that isused by dealers to provide a snap-shot of their own standing. It isalso used by vendors who provideproducts and services to help makethose dealers more successful.

____________________________

C o n g r a t u l a t i o n sto the following members who sub-mitted their forms in the NIADAMember Survey and were selectedas winners in a special drawing.

Winner of an NIADAAccountingManual was

Stephen C. WilliamsSpeedy Auto SalesSalida, Colorado

Winner of a NADAGuidesubscription was

Rich JonesJ.J. AutoMeridian, Idaho

2 0 0 9 N I A D A U S E D C A R I N D U S T R Y R E P O R T 7

10,001-25,000SQ. FT.

UNDER10,000SQ. FT.

25,001-50,000SQ. FT.

OVER50,001SQ. FT.

DEALERSHIP LOT SIZE(percentage of respondents)

50%

40%

30%

20%

0

22.718.0

27.224.6

32.132.4

21.2 20.8

20082007

OTHERDEALERS

WHOLESALEAUCTIONS

ONLINE/OTHER

WHERE YOU YOUR CARS -WHOLESALE (percentage of respondents)

80%

60%

40%

20%

0

79.277.2

43.037.4

59.1

48.9

20082007

2-31 4-6 7+

NUMBER OF LOCATIONS(percentage of respondents)

80%

60%

40%

20%

0

1.62.6

0.8 1.1

20082007

WHERE YOU YOUR CARS -WHOLESALE (percentage of respondents)

80%

60%

40%

20%

0

66.266.9

20082007

AUCTIONS ATTENDED PER MONTH(percentage of respondents)

1-2 3-4 5-8 9+

30%

20%

10%

00

OTHERDEALERS

WHOLESALEAUCTIONS

ONLINE/OTHER

4.7 4.6

29.227.424.724.8

23.123.4

20082007

SPECIALIZE IN(percentage of respondents)

80%

60%

40%

20%

0

2007 2008

CARSONLY

TRUCKSONLY

OFFERBOTH

HEAVYDUTY

POWERSPORT’S

12.614.46.9 5.9

80.3

77.7

23.420.2

RV’S

18.914.0

77.483.6

42.136.1

51.043.3

18.419.7

SELL

BUY

F A C T S A N D S T A T I S T I C S O N T H E U S E D M O T O R V E H I C L E I N D U S T R Y


3-5 YEARS1-2 YEARS 6+ YEARS

AGE OF CARS SOLD(percentage of respondents)

80%

60%

40%

20%

0

11.810.9

62.363.4

30.727.6

2008AVERAGE RETAIL PRICE(percentage of respondents)

20082007

5,001-10,000

10,001-15,000

15,001-20,000

20,001+

50%

40%

30%

20%

10%

00-5,000

47.6 48.1

20.6 21.1

7.0 7.4 4.7 4.6

2007

18.820.2

FINANCECOMPANY

BHPH BANKS OTHER

HOW YOU FINANCE CUSTOMERS(percentage of respondents)

40%

30%

20%

10%

0

40.440.437.1

32.9

43.038.5

12.29.9

2007 2008

AUCTIONFLOORPLAN

BANKS CASH OTHER

HOW YOU FINANCE FLOORPLANINVENTORY(percentage of respondents)

40%

30%

20%

10%

0

43.343.1

17.715.8

48.2

43.6

9.98.8

NOTE: Numbers won’t necessarily add to 100% because dealers finance multiple waysNOTE: Numbers won’t necessarily add to 100% because dealers finance multiple ways

2007 2008

AVERAGE MONTHLY INVENTORY(percentage of respondents)

20%

10%

01-10 11-20 21-30 31-50 51-75 76-100 101-200 201+

2007 2008

7.07.0

13.313.214.814.9

23.523.0

13.613.411.511.4 10.310.1

6.07.1

1-20 3-5 6+

NUMBER OF SERVICE BAYS(percentage of respondents)

40%

30%

20%

10%

0

26.7 26.6

19.719.6

14.5 14.0

20082007

39.2 39.7

S E C T I O N

ONE


INDOOR SHOWROOM(percentage of respondents)

2007 2008

YES19.9%

NO80.1%

YES20.2%

NO79.8%

YES38.2%

NO61.8%

YES38.0%

NO62.0%

SELL AFTERMARKET PRODUCTS(percentage of respondents)

2007 2008

PAVED LOT(percentage of respondents)

2007 2008

YES84.8%

NO15.2%

YES85.2%

NO14.8%

YES67.2%

NO32.8%

YES68.7%

NO31.3%

HAVE WORKERS COMP(percentage of respondents)

20082007

OUTSIDE LIGHTING(percentage of respondents)

2007 2008 FENCING ON PROPERTY(percentage of respondents)

2007 2008

YES94.7%

NO5.3%

YES94.0%

NO6.0%

YES52.6%NO

47.4%YES

53.6%NO46.4%



YES83.8%

NO16.2%

YES83.8%

NO16.2%

YES89.9%

NO10.1%

YES90.4%

NO9.6%

HAVE COMMERCIAL INSURANCE(percentage of respondents)

2007 2008

FULLY INSURED INVENTORY(percentage of respondents)

2007 2008

YES21.9%

NO78.1%

YES22.1%

NO77.9%

SEPARATE F&I DEPARTMENT(percentage of respondents)

2007 2008

2007 2008DO RECONDITIONING/DETAIL WORK(percentage of respondents)

YES69.1%

NO30.9%

YES75.3%

NO24.7%

YES17.0%

NO83.0%

YES18.8%

NO81.2%

2007 2008USE PAYMENT PROTECTIONDEVICE (percentage of respondents)

YES57.5%

NO42.5% YES

57.8%NO

42.2%

DEALERSHIP WEB SITE(percentage of respondents)

2007 2008

S E C T I O N

ONE


ANNUAL RETAIL SALES (percentage of respondents)

0-100vehicles

101-250vehicles

40%

30%

20%

10%

0251-400vehicles

401-550vehicles

551-700vehicles

701-850vehicles

8.57.0

40.040.2

20.019.5

1.71.4

851-1,000vehicles

1,001+vehicles

13.813.8

6.06.13.63.8

6.48.2

ANNUAL WHOLESALE SALES (percentage of respondents)

0-100vehicles

101-250vehicles

80%

60%

40%

20%

0251-400vehicles

401-550vehicles

551-700vehicles

701-850vehicles

75.176.6

12.613.4 5.35.4

1.41.0 1.31.6 1.01.0

2007 2008

.81.0 2.53.1

851-1,000vehicles

1,001+vehicles

ADVERTISING MEDIA USED (percentage of respondents)

TV NEWSPAPERS RADIO SPECIALTYPUBLICATIONS

ONLINE OTHER MAGAZINE

70%

60%

50%

40%

30%

20%

10%

0

2007 2008

61.565.8

30.230.031.9

34.7

47.944.5

15.213.8

9.613.8

NOTE: Numbers won’t necessarily add to 100% becausedealers advertise multiple ways

18.6 17.6

2007 2008


RENTAL CAR(percentage of respondents)

2007 2008

YES13.0%

NO87.0%

YES14.0%

NO86.0%


INTERNET CONNECTION

HIGH SPEED DIAL UP OTHER

2008

5.6 0

90%

80%

60%

40%

20%

0

94.4

HOW DO YOU USE THE INTERNETAT YOUR BUSINESS

DEALERSHIPWEBSITE

E-MAIL INDUSTRYRESEARCH

ONLINEBUYINGAND

SELLING

ONLINEAUCTIONS

ONLINEFINANCING

OTHER

80%

60%

40%

20%

0

20.017.9

28.729.8

44.143.248.050.551.3

56.1

79.6 75.9

58.757.5

20082007

YES66.7%

NO33.3% YES

65.6%

NO34.4%

2007 2008SELL WARRANTIES OR SERVICECONTRACTS (percentage of respondents)

TYPE OF RENTAL CAR OPERATION

YES90.1%

NO9.9%

YES92.3%

NO7.7%

PERSONALLY USE COMPUTER(percentage of respondents)

* Annual Comparative Data Not Available

2007 2008 WHAT COMPUTER IS USED FOR

ENTIREOPERATION

INVENTORY F&I MKTG/ADV SALES OTHER

2008

52.9

18.2

8.14.4

9.112.1

INDEPENDENT FRANCHISE

2008

80.0

20.0

WARRANTY/SERVICE CONTRACTSSOLD PER MONTH

1-5 4-10 11-20 21-30 31+

2008

55.4

22.615.1

4.8

2.2

50%

40%

30%

20%

10%

0

50%

40%

30%

20%

10%

0

90%

80%

60%

40%

20%

0

S E C T I O N

ONE

*

*

*

*

S E C T I O N

TWO

Because usedvehicles are pur-chased more outof necessity thanemotion, the pre-owned market willlikely show a sig-nificant improve-

ment in overall sales this year.

Independent dealers, if they holdonto their share of the market vs.franchised dealers and privateparty sales, could see a millionmore used sales in 2009. In 2008,independent dealers sold nearly 11percent fewer vehicles than in2007.

Prices, which have begun firmingup late last year continued to do soin the first three months of 2009,should continue to improvethroughout the year. It won't bemuch, but at least the bottom seemsto have been reached and leftbehind.

The number of independent deal-ers, however, has taken a signifi-cant hit in the past year. More than4,000 Independent dealershipsclosed their doors bringing the totalto approximately 38,600 outlets.As the market improves this yearand into 2010, that number maywell reverse and climb slightly by2011.

NIADA members can obtain afree issue of Retail AutomotiveSummary which includes used-vehicle forecasts, email CNW [email protected].


INDEPENDENTDEALERS

FRANCHISEDEALERS

CASUAL SALES

40%

30%

20%

10%

0

20072006 2008

2006 2007 2008

16

14

12

10

8

6

4

2

0

13.7 13.1

11.7

32.2 31.6 32.133.6

34.5

36.1

34.233.9

31.8

MARKET SHARE BREAKDOWN(in millions)

USED CAR INDUSTRYDATA FROM CNWMARKETING RESEARCHBY ART SPINELLA

The top selling used vehiclecontinues to be Ford’s F-Seriesfollowed by Cheverolet’s Silverado.

SALES VOLUME BY INDEPENDENT DEALERS(in millions)



TOP 10 SELLING USED VEHICLES(Franchised and Independent Dealers)

2006F Series 796,039Silverado 636,069Camry 417,104Ram pickup 364,177Accord 348,843Impala 289,868Civic 285,385Corolla 372,327Altima 323,457Cobalt 211,449

USED VEHICLE SALES BY SEGMENT(Franchised and Independent Dealers)

Category Example

Budget Car EchoEconomy Car SentraEntry-Level SUV LibertyEntry-Level Sport Wagon TucsonFull Size Pickup F-SeriesFull Size Van RamHybrid Vehicles PriusLuxury Car DeVilleLower Mid Range Car G6Lower Mid Range SUV AscenderLarge SUV ExcursionMid Range Sport Wagon PilotMini Van WindstarNear Luxury Car ES 330Premium Car 7 SeriesPremium Mid Range Car MaximaPremium Sporty Car CorvettePremium SUV NavigatorPremium Sport Wagon M ClassStandard Mid Range Car Grand PrixSmall Pickup FrontierSport Utility Pickup AvalancheTouring Car MustangTraditional Car AvalonUltra Upscale Car MaybachUltra Luxury Sporty Car FerrariUpper Mid Range SUV EnvoyUpper Premium Sporty Car SC 430

2007Sales

588,1443,719,387

844,9392,137,1986,747,084

646,13037,277

646,1303,781,5152,866,1641,151,436

720,6833,284,4921,578,047

78,6951,085,166

252,653397,618807,662

4,982,6532,327,723

385,193563,292

1,155,5784,142

12,426563,29253,844

2008Sales

630,5153,558,061

686,7722,261,2326,184,597

442,01858,449

591,7933,200,0632,487,7211,037,463

679,4662,747,0861,187,238

47,4901,000,933

208,223357,998752,526

4,442,0971,727,888

332,427445,671865,771

2,9229,498

540,65043,836

2007 2008

USED VEHICLE SALES - FINANCED VS. CASH(Independent Dealers)

16

14

12

10

8

6

4

2

0

12,997,464

54.2%(Financed)

45.8%(Cash)

11,741,997

44.1%(Financed)

55.9%(Cash)

2007 2008

USED VEHICLE SALES - FINANCED VS. CASH(Franchised Dealers)

16

14

12

10

8

6

4

2

0

61.7%(Financed)

38.3%(Cash)

55.6%(Financed)

44.5%(Cash)

13,171,89214,284,454

2008F Series 1,358,931Silverado 1,165,320Camry 931,525Civic 916,913Corolla/Matrix 814,628Accord 800,016Ram pickup 756,179Focus 653,894Impala 569,874Altima 471,242

2007F Series 702,619Silverado 697,223Camry 592,413Accord 418,738Corolla/Matrix 382,528Civic 381,425Ram pickup 364,213Impala 214,717Tundra 183,448Caravan/Grand Caravan 182,282

NOTE: private party excluded


ADVERTISING EXPENSES($ per vehicle)

2007 20082005

$80K

$60K

$40K

$20K

02006

AVERAGE PRICE OF USED VEHICLES SOLDBY INDEPENDENT DEALERS

2007 20082005

$10K

$7.5K

$5K

$2.5K

0

$8,492

NUMBER OF INDEPENDENT DEALERS IN THE U.S.

2007 20082005

60K

40K

20K

0

USED VEHICLE SALES BY INDEPENDENT DEALERS

Units in Average Valuemillions price

2004 14.75 $8,490 $124.9

2005 14.21 $8,545 $121.4

2006 14.36 $8,492 $121.9

2007 14.35 $8,650 $124.1

2008 14.38 $8,750 $125.8

NEW AND USED VEHICLE SALES(in millions)

New vehicles Used vehicles Total sales

2004 16.84 42.70 59.54

2005 17.00 44.14 61.13

2006 16.54 42.56 59.11

2007 16.22 41.75 57.80

2008 13.30 36.50 49.80

2006

$8,545

38,66242,79144,321

2006

44,702

INDEPENDENT DEALERS TOTAL MARKET SHARE

Ind. MarketYear Total Volume Ind. Volume Percentage

2004 42.7 million 14.8 million 34.5





RENT AND EQUIVALENT($ per vehicle)

2007 20082005

$100k

$75k

$50k

$25k

0

2006

$66,269$78,144

$264per vehicle

$234per vehicle

$76,507

$253per vehicle

$79,328

$268per vehicle

$113,072$94,589

$382per vehicle

$334per vehicle

$115,214

$381per vehicle

$111,888

$378per vehicle

$8,281$7,893

S E C T I O N

TWO

S E C T I O N

TWO

PURCHASE OF EXTENDED WARRANTIESFOR USED CARS - 2 0 0 8(percentage of respondents)

JAN

TOTAL USED VEHICLE SALES PER MONTH(in millions, independent and franchise dealers)

TOTAL SALES 2007: 41.4TOTAL SALES 2008: 36.5

5

4

3

2

1

0

2.071.98

20082007

DEC TOTALFEB MAR APR MAY JUN JUL AUG SEP OCT NOV

20082007USED VEHICLE SALES PER MONTH, PER OUTLET - INDEPENDENT DEALERS (in millions)For example, in January 2008, independent dealers sold 636,998 vehicles from 42,864 locations.That results in 14.9 units per outlet.

14.1

7.1

12.6

4.25.3

1.22.7

1.2

20

15

10

5

0

FRANCHISED DEALERS

INDEPENDENT DEALERS

2.2

NEW 2-4 YEAROLD

5-7 YEAROLD

8-10 YEAROLD

OVER 10YEARS

PURCHASE OF EXTENDED WARRANTIESFOR USED CARS - 2 0 0 7(percentage of respondents)

0.0

16.4

7.9

15.3

4.77.1

1.63.3

1.6

20

15

10

5

0

FRANCHISED DEALERS

INDEPENDENT DEALERS

2.4

NEW 2-4 YEAROLD

5-7 YEAROLD

8-10 YEAROLD

OVER 10YEARS

1.79 1.68

2.572.77

3.313.71

3.904.19

4.764.39

3.75

4.30

3.864.12

3.61

4.51

2.31

2.972.50

3.162.61

3.05

36.541.4


JAN

35

28

21

14

7

0

14.8 14.9

DECFEB MAR APR MAY JUN JUL AUG SEP OCT NOV

12.3 12.4

18.620.1

24.727.1 27.930.6

35.734.6

28.733.0

29.830.629.1

32.0

18.220.9 20.8

23.121.722.2


UNITS SOLDTHROUGH INTERNET

UNITS OFFEREDON INTERNET

INTERNET USED VEHICLE SALES(in millions)

50

40

30

20

10

0

48.7

39.1

7.77.9

2007 2008

2007

USED VEHICLE INVENTORY DAYS’ SUPPLY(In days)

100

80

60

40

20

0

70.5SEPT

2005 2006

79.5JAN 69.9

NOV

2007

SEPT

2005 2006

AUG

56.3SEPT

Total Independent Ind. Volume

Vehicle Age Volume Volume Percentage

1 yr

2 yr

3 yr

4 yr

5 yr

6 yr

7 yr

8 yr

9 yr

10 yr

11 yr

12 yr

13 yr

14 yr

15 yr

16 yr

17 yr

18 yr

19 yr

20 yr

Totals

3,487

7,967

35,551

154,348

661,688

1,046,988

2,304,910

2,164,315

2,001,100

1,049,574

580,741

286,912

216,802

183,112

211,761

196,902

147,382

150,252

143,881

194,156

11,741,830

405,487

705,037

1,439,298

2,670,373

3,755,326

4,303,282

6,148,067

4,737,993

3,821,080

2,597,312

1,501,400

814,628

529,691

416,447

489,507

467,589

376,263

390,875

390,875

569,874

36,530,404

0.9%

1.1%

2.5%

5.8%

17.6%

24.3%

37.5%

45.7%

52.4%

40.4%

38.7%

35.2%

40.9%

44.0%

43.3%

42.1%

39.2%

38.4%

36.8%

34.1%

32.1%

HIGH LOW

2007 2008

AVERAGE INDEPENDENT DEALERSASKING PRICE VS.TRANSACTION PRICE

9.5K

9K

8.5K

8K

7.5K

7K

6.5K

6K

5.5K

$8,603

$7,813

$9,071

$8,281

ASKING PRICE TRANSACTION PRICE

USED VEHICLE ADVERTISING DISTRIBUTION -INDEPENDENT DEALERS WHO ADVERTISE

(Listed by percentage of money used for particular type of advertising;note that many dealers advertised more than one way, so percentageswon't necessarily add to 100)

Category 2005 2006 2007 2008

Classified Ads 92.3 90.6 89.6 89.1%

Radio 1.4 1.3 1.2 1.1%

Television 0.5 0.6 .8 0.6%

Internet 19.9 20.8 22.1 23.4%

VEHICLE AGE BREAKDOWN AND INDEPENDENTDEALERS MARKET SHARE - 2008(Excludes wholesale)

46.350.8

2008

61.73APRIL

2008

86.36NOV



This profile includes all active dealerships with an actual place of businessand multiple sales of the same vehicle (post repossession, etc.)

INDEPENDENT USED VEHICLE DEALER PROFILE

Source: CNW Marketing Research, Inc.

TOTAL SALES(All departments)

2007 20082005

$5M

$4M

$3M

$2M

$1M2006

$4,952,537

TOTAL GROSS(As percent of total sales per independent dealer)

$1,000K

$750K

$500K

$250K

0

TOTAL EXPENSES(As percent of total sales per independent dealer)

2007 2008

NUMBER OF VEHICLES SOLD(Average per year per independent dealer)

2007 20082005

400

300

200

100

02006

290.6

NET PROFIT BEFORE TAXES(As percent of total sales per independent dealer)

$300K

$250K

$200K

$150K

$100K

$50K

$3K

$2K

$1K

$0K

12.62

$811,721

16.39% $501,36914.29

$645,797

18.84%

$94,45820.31%

$131,161

(1.56%)

$1,147

(Averages per independent dealer)

16.16%

$774,454

2005 2006 2007 2008

This profile includes all active dealerships with an actual place of businessand multiple sales of the same vehicle (post repossession, etc.)

$4,792,416

$3,972,812

$4,519,223

283.2302.4307.5

2007 2008

REDUCTION OFREPOSSESSIONS

REDUCTION OFLATE PAYMENT

PAYMENT PROTECTION DEVICES - REDUCINGLATE PAYMENT AND REPOSSESSIONS(dealers with devices)

80

60

40

20

0

63.9264.2

37.2439.6

20082007

(1.82%)

$2,387

Independent dealers,if they hold onto theirshare of the market vs.franchised dealersand private partysales, could see amillion more usedsales in 2009.

S E C T I O N

TWO


USED VEHICLE SALES - BY CREDIT TYPE(Independent dealers - dollars in billions)

A PAPER 19.41% $23.57 19.23% $23.45 19.10% $23.71

B PAPER 19.68% $23.90 19.43% $23.69 19.26% $23.91

C PAPER 34.47% $41.85 35.06% $42.76 34.83% $43.236

D PAPER 26.44% $32.10 26.28% $32.05 26.81% $33.28

TOTALS $121.42 $121.95 $124.13

USED VEHICLE SALES(As percent of total sales)

2007 20082005

$2.5M

$2M

$1.5M

$1M

02006

F&I INCOME(As percent of total sales)

2007 20082005

$1.4M

$1.3M

$1.2M

$1.1M

$1M

2006

FLOOR PLAN INTEREST($ per vehicle)

$35K

$30K

$25K

$20K

$15K

SERVICE AND PARTS(As percent of total sales)

2007 20082005

$1.4M

$1.3M

$1.2M

$1.1M

$1M2006

OTHER INCOME(As percent of total sales)

2007 20082005

$250K

$200K

$150K

$100K

$75K2006

RETAIL GROSS PROFIT(Percent of retail selling price)

$550

$500

$450

$400

$350

$300

2005 2006 2007 2008

42.71%41.92%

$2,058,401$1,894,458

37.17%

$1,476,694

25.61%26.91%

$1,234,269$1,216,123

27.62%$1,097,291

$35,986$119

per vehicle

$37,382

$132per vehicle

28.15%

28.35%

$1,356,684

$1,281,200

29.45%

$1,169,99342.56%

$2,051,172

26.32%

$1,268,488

$34,928

$118per vehicle

$109per vehicle

28.04%$1,351,383

3.53%

2.82%$127,442

5.76%$228,834

3.08%$148,440

5.92%

5.23%

$505.86

$433.10

4.07%$321.25

5.71%

$484.89

$170,128

$35,264

2007 20082005 2006 2007 20082005 2006

20.51% $25.81

42.77% $53.82

20.44% $25.72

16.28% $20.49

$125.84

S E C T I O N

TWO

Annually NABD,with the help ofShilson, Goldberg& Cheung, CPAs,compiles buy here,pay here financialbenchmarks from adatabase of more

than 500 operators nationwide.These financial benchmarks are acomposite of the best performingoperators and are not an average ofthe entire database. Since 2006,the NABD benchmarks also includeoperating information on sales,collections and recoveries, andinventory management which weredeveloped and supplied by NCMTwenty Groups, based upon a com-posite of all of their BHPH 20group members. The attachedNABD benchmarks also includeportfolio performance metricswhich were compiled electronical-ly by Subprime Analytics, which,to date, has analyzed more than $5billion (more than 600,000 individ-ual accounts) of subprime, BHPHinstallment loans to identify lossrates, patterns and trends. In theaggregate, these statistics providea comprehensive look at thefinancial and operating perfor-mance of the BHPH Industry forthe last three years and someinteresting trend information forearlier periods.

The automotive industry had avery difficult year in 2008. Acredit crisis, volatile gas prices,both inflation and deflation, andother economic factors combinedto create some unprecedented eco-nomic challenges for both new andused car dealers. While franchisesales and profits declined, theattached benchmarks show thatBHPH profits did not experiencethe same fate at least among thebetter operators.


2008 2007 2006

Sales 100% 100% 100%Cost of vehicle sales (60%) (63%) (64%)Subtotal 40% 37% 36%

Financing Income 18% 16% 18%Bad Debts (21%) (19%) (20%)Gross Profit 37% 34% 34%

BUY HERE, PAY HERE INDUSTRY BENCHMARKS / TRENDS 2008

GROSS PROFIT COMPARISON: 2006 – 2008

The table below compares the resultant changes in gross profit from2006 – 2008 (The numbers below are compiled from our bestperforming dealers and are not industry averages.):

Note: All percentages are expressed as a percentage of total revenues.

As noted in the summary above, gross profit in 2008 was slightly highercompared with 2007! A more careful look at these results providessome important trends that need to be discussed!

• Financing charges for 2006 through 2008 (even for the best operators)was not sufficient to offset bad debt losses.

• Higher “cash in deal” makes good underwriting essential incontrolling losses.

Source: NABD / Subprime Analytics

AVERAGE CUSTOMER DOWN PAYMENT: 2004 – 2008

2004

$1,000

$800

$600

$400

$2,00

$0

$1,066

2005

$837

2006

$900

2007

$1,018

2008

$1,089

BUY HERE, PAY HEREINDUSTRY BENCHMARKS

BY KENNETH SHILSON

S E C T I O N

THREE


$85

$83

$81

$79

$77

$75

$73

$71

$69

$67

$652005

$78

2006

$79

2007

$85

2008

$84

BHPH FINANCIAL TRENDS AVERAGE WEEKLYPAYMENT AMOUNT 2005-2008

Source: NABD (for 2003-2005) NCM (for 2006)


LOSS STATISTICS - 2007(Statistics supplied by Subprime Analytics)

2008 2007Subprime Analytics Subprime Analytics

Benchmarks Benchmarks

Average gross dollar loss (before recoveries) $6,887 $6,753Average net dollar loss (after recoveries) $5,157 $4,693Average default rate (% of loans written off) 28.43% 27.71%Average gross dollar loss rate (% of principal) 35.54% 37.32%Average net dollar loss rate (% of principal) 24.76% 24.83%Average recovery (% of principal charged off) 28.00% 30.60%Highest cumulative default month after origination 19th Month 17th MonthHighest frequency of default (month after origination) 4th Month 4th MonthWorst periodic loss month after origination February January

The above referenced loss data was determined by electronically analyzing approximately 613,000 loans, aggregating approximately $5.3 billion to identify loss ratesand to understand why they occurred.

Source: NABD

BHPH FINANCIAL TRENDS2002-2008 BAD DEBTS

20%

15%

10%

5%

0%2002

17%

2003

16%

2004

17%

2005

19%

2006

20%

2007

19%

2008

21%

% OF SALESCOST OF GOODS SOLD AND OPERATING EXPENSE DETAILBuy-Here, Pay-Here Industry Benchmarks Prepared for NABD byShilson, Goldberg, Cheung and Associates. LLP

According to the research, Buy-Here,Pay-Here dealers spent less moneyin 2008 on reconditioning vehiclesand spent less for the vehiclesthemselves than they did in 2007.

2008 % OFVEHICLE

SALES

2007 % OFVEHICLE

SALES

2006 % OFVEHICLE

SALES

TOTAL COST OF VEHICLE SALES 59.67% 62.59% 63.50%

TOTAL OPERATING EXPENSE 21.35% 18.62% 18.34%

C O S T O F V E H I C L E S A L E S

C O S T O F V E H I C L E S A L E S

Cost of vehicles 51.03% 54.34% 55.26%Reconditioning costs 4.12% 4.97% 5.38%Other 4.52% 3.28% 2.86%

Advertising 1.55% 1.21% 1.45%Bank charges 0.24% 0.07% 0.12%Contributions 0.01% 0.03% 0.38%Depreciation 0.54% .82% 0.77%Dues and Subscriptions 0.02% 0.02% 0.03%Insurance 0.99% 0.23% 0.72%Legal and accounting 0.50% .71% 0.43%Outside services 0.30% 0.07% 0.35%Office expense 1.31% 0.89% 1.10%Rent 1.62% 1.13% 1.46%Repairs and maintenance 0.27% 0.44% 0.25%Salaries (non-owners) 10.81% 9.97% 8.85%Taxes - general 0.30% 0.26% 0.15%Other Operating Expense 0.60% 0.83% 0.67%Taxes - payroll 1.11% 0.83% 0.78%Utilities andTelephone 0.79% 0.64% 0.63%Travel /Training 0.38% 0.47% 0.20%



2008 DEALER OPERATING INFORMATIONStatistics supplied by NCM Associates, Inc.Associates. LLP 2 0 0 8 2 0 0 7

NCM NCMS A L E S Benchmarks BenchmarksAverage units sold per dealer (BHPH deals only) 743 879Average cash in deal per vehicle sold $4,696 $4,645Average ACV per vehicle sold (includes recon) $5,284 $5,111Average reconditioning cost per vehicle sold $499 $634Average gross per vehicle sold $4,239 $4,123Average cash down payment $1,185 $1,084Average amount financed $9,195 $9,085Average term of loan (in weeks) 129 134

C O L L E C T I O N S / R E C O V E R I E SAverage weekly payment amount $84 $85Average # of accounts past due 350 384Average # of past due accounts per collector 101 78Average loss per charge off $5,264 $4,927Average portfolio delinquency

Current 69.85% 74.80%0-10 days 11.75% 10.10%11-29 days 10.20% 7.60%30-59 days 4.60% 3.50%60-89 days 1.50% 1.50%90+ days 2.10% 2.50%

100.00% 100.00%

I N V E N T O R Y M A N A G E M E N TAverage number of units in stock 169 201Average inventory aging

0-30 days 32.10% 42.60%31-60 days 22.40% 24.30%61-90 days 17.10% 13.10%91+ days 28.40% 20.00%

100.00% 100.00%

Average total avg per vehicle sold(including recon)

AVERAGE TOTAL ACTUAL COSTPER VEHICLE SOLD 2005-2008

$6,000

$5,000

$4,000

$3,000

$2,000

$02005

$4,906

2006

$4,949

2007 2008

$5,111$5,284

Average cash in deal per unit sold

BHPH FINANCIAL TRENDS AVERAGE“CASH IN DEAL” 2005-2008

$5,000

$4,500

$4,000

$3,500

$3,000

$2,500

$2,000

$1,500

$1,000

$500

$02005

$4,563

2006

$4,480

2007

$4,645

2008

$4,69670%

60%

50%

40%

30%

20%

10%

0%

BHPH FINANCIAL TRENDS 2002-2008COSTS/EXPENSES

2002

63%

21%

2003

59%

21%

2004

62%

22%

2005

64%

18%

2006

64%

18%

2007 2008

63%

19%

60%

21%

COST OF VEHICLES OPERATING EXPENSES

Source: Shilson, Goldberg, Cheung & Associates, LLPSource: NABD/NCM Source: NABD/NCM

S E C T I O N

THREE


RATIO COMPARISONSBuy-Here, Pay-Here Industry Benchmarks Prepared for NABD by Shilson, Goldberg, Cheung and Associates. LLP

The NABD results - combined dealer and finance affiliate numbers - break down balance sheets and income statements into 16 categories. It also compares 2008 to 2007 sodealers can examine industry trends.

RATIO COMPARISONS, COMBINED BUY-HERE, PAY-HERE

COMBINED BUY-HERE, PAY-HERE

Balance Sheet 2008 Avg. 2007 Avg. 2006 Avg.(Inventory x Days) / Cost of Vehicle Sales 68.57 days 56.21 days 55.03 daysCost of Vehicle Sales /Average Inventory Dollars 5.96 x 8.51 x 9.22 xVehicle Sales / Average Inventory Dollars 9.98 x 13.59 x 14.51 xVehicle Sales / Total Assets .96 x 1.27 x 1.18 xTotal Assets / Total Liabilities 1.61 x 1.82 x 2.01 xAllowance for Bad Debts / Finance Receivables* 18% 14% 16%Finance Receivables* / Total Assets 89% 85% 87%Total Debt / Total Assets 62% 55% 50%* Finance receivables are net of finance charges

Bad Debts / Vehicle Sales 21% 19% 20%Cost of Vehicle Sales / Vehicle Sales 60% 63% 64%Gross Profit*** / Vehicle Sales 37% 34% 34%Operating Expense / Vehicle Sales 21% 19% 18%Interest Expense / Financing Income 23% 20% 17%Operating Income / Vehicle Sales 16% 15% 16%Financing Income / Vehicle Sales 18% 16% 18%Compensation** / Vehicle Sales 11% 10% 9%Reconditioning Cost / Vehicle Sales 4% 5% 5%NOTES TO RATIO COMPARISONS:**Compensation excludes those of the owners***Gross Profit is net of bad debts and financing incomex = times

F A C T S A N D S T A T I S T I C S O N T H E U S E D M O T O R V E H I C L E I N D U S T R YF A C T S A N D S T A T I S T I C S O N T H E U S E D M O T O R V E H I C L E I N D U S T R Y


WALK-IN TRAFFIC SURVEY

BY AUTO TRADER AND NORTHWOOD

Dealers invest heavily in print and broadcast advertising toattract their customers but a Northwood University-AutoTrader.com study of consumers shows their interest is piquedby Internet research and web pages. The study reported theInternet drives more than four times as much walk-in traffic asthe newspaper, nearly seven times as much as TV, and 13 ½times that of radio.

Morpace Inc., a leading independent research company, con-ducted the Dealer Walk-In Traffic Study during the last half of2008. Researchers visited 59 franchise and independent deal-ers in 17 markets, surveying 573 shoppers on dealer lots aboutwhat factors led them to a specific showroom. The dealershipsrepresented a broad spectrum of foreign and domestic brandsincluding luxury, economy, and other brand segments andwere selected randomly with no insight into how the dealer-ships marketed their businesses. All people interviewed forthe study were screened to include only those specifically onthe lot to shop for a car.

The first-of-its-kind study of car shoppers showed 80% of carshoppers walked onto auto dealers’ lots without calling oremailing the dealership first, meaning many auto dealers judg-ing the success of their advertising primarily by the number ofemail leads or phone calls are underestimating the amount ofwalk-in traffic and potentially misdirecting marketing dollarsaimed at reaching these customers.

Northwood University said the results provided clear evidencethat unannounced walk-in traffic is more prominent than mostin the industry believe, that Internet advertising drives a sig-nificant portion of dealer walk-in traffic and that the Internetserves as much more than a lead-generation device for show-rooms.

Overall, advertising served as the No. 2 driving force behind aconsumer’s decision to shop at a particular store, with only"drive bys" – the physical locationof the dealership – ranking ahead.Among advertising media, includ-ing the Internet, magazines, televi-sion, radio, direct mail and thephone book, 54% of all respon-dents cited the Internet as theprimary media source leadingthem to a particular dealer-ship.

Of those customers who foundthe dealership through theInternet, 61% walked in withoutotherwise contacting the dealer-ship prior to their initial visit,25% called before walking inand only 14% emailed before walk-ing in.

Specific Objectives

• Determine how walk-in traffic initially establishescontact with dealerships (i.e., phone, e-mail or walk-in).

• Measure the impact that all forms of advertising have ondealer walk-in traffic.

THE FOCAL POINT QUESTION OF THE SURVEY

What was the primary source that led you to visit thisdealership today?

STATE OF THE INDUSTRY-CURRENT OBSERVATIONS

STUDY OBJECTIVES

S E C T I O N

FOUR

• Since the advent of the Internet, manufacturers anddealers continue to seek the most effective and efficientmedia strategy.

• Traditional media continues to garner a large share ofadvertising spend.

• Automotive advertisers often treat the Internet as alead-generator and define its impact based on e-mailsand phone calls alone.

WHERE DID WE CONDUCT THIS STUDY?

• 59 dealerships (mix of manufacturers, independent andfranchise, luxury and non-luxury)

• 17 markets


Primary Source Leading to Dealership

DEALER ADVERTISING SPEND

PRIMARY MEDIA SOURCE LEADING TO DEALERSHIP

DEALERS’ PERCEPTION

REALITY

Source: 2008 Dealer Brand Image Study & Dealer Walk-In Study

WHAT ARE THE PRIMARY SOURCES THAT DRIVE DEALERWALK-IN TRAFFIC?

DRIVING BY ADVERTISING PRIOREXPERIENCE

FRIENDS ORFAMILY

20%22%27%

31%

50%

40%

30%

20%

10%

0

Advertisingdrives overone-fourthof dealerwalk-intraffic

Source: 2008 Dealer Walk-In Study

54%

17% 13%

27%

8%

17%

4%

17%

3%10%

60%

40%

20%

0

Source: 2008 Dealer Walk-In Study & NADA Data 2008 Report.

INTERNET NEWSPAPER RADIOTELEVISION DIRECTMARKETING

3%

STATE OF THE INDUSTRY - CURRENT OBSERVATIONSYet, e-mail leads have stagnated over the last several years.

20%

64 % 67%

21%

68%

21%

71%

22%

75%80%

60%

40%

20%

0%

ONLINE NEW CAR SHOPPER AS % OF TOTAL BUYERSEMAIL LEAD REQUESTORS AS % OF TOTAL BUYERS

DEALERS’ PERCEPTIONREALITY

22%

2004 2005 2006 2007 2008

Source: JD Power 2004-2008 New AutoShopper.com Study

Source: 2008 Dealer Walk-In Study & NADA Data 2008 Report.

WHAT ADVERTISING DRIVES DEALER WALK-IN TRAFFIC?The Internet is the number one media source driving dealer walk-in traffic.More than half of all walk-in traffic generated by advertising can be attributedto the Internet.

Of the 54% brought to the dealership by the Internet, 61% do not contact thedealership first.

INTERNET NEWSPAPERS

80%

60%

40%

20%

0CLASSIFIEDMAGASINES

RADIO TELEVISION DIRECTMAIL

OUTDOORADVERTISING

PHONEBOOK

54%

32%

13%

27%

15%11%4%

8%8% 7%0%

6% 3%0%

9%

IT’S IMPORTANT TO INVEST IN EFFICIENT ANDEFFECTIVE MEDIA.The Internet is the number one media source at driving walk-in traffic. However,dealers are still spending heavily on more traditional media such as Newspaper,Radio and TV.

WALK-IN61%

WALK-IN80%

WALK-IN41%

PHONE42% PHONE

25%

EMAIL2%

PHONE17%

EMAIL14%

HOW DO WALK-INS ESTABLISH CONTACT WITH THE DEALER?80% of car shoppers who walk through a dealership’s doors do not establishcontact with the dealer prior to their initial visit.

EMAIL17%



S E C T I O N

FIVE

ADAPTING TO A CHANGING MARKETPLACE

In 2008, many independent dealers remained profitabledespite facing one of the most challenging operatingenvironments ever. As always, the key to success wascorrectly valuing and then quickly turning inventoryacquisitions.

Although national attention was rightly focused onthe economy as a whole in 2008, independent dealerscontinued to perfect ways to become more efficient in

both buying and selling at wholesale. As a result, the use of online saleschannels accelerated at a record pace, foretelling a significant and lastingshift in the wholesale used car marketplace – one where online and in-laneremarketing become seamlessly integrated.

The numbers were staggering. At the end of 2008, even in the face ofvery weak wholesale market, Manheim.com was receiving more than800,000 visits every week. Half of all Manheim dealer customers havenow purchased a vehicle online and the total sales volume on OVE.comdoubled in 2008. Those numbers represent more than our success. Theyrepresent the success of all those dealers who have achieved efficienciesin operations and adapted to a changing marketplace.

In 2009, the benefits of the efficiencies that dealers achieved in 2008should increasingly flow to the bottom line. That’s because, although stillweak, the overall economy now has spots of strength, as well as signs ofstabilization, whereas last year there was only weakness and turmoil.

As is typical, the used vehicle market improved before any signs of aturnaround in the new vehicle market. In the first quarter of 2009, usedvehicle retail sales by dealers were basically flat with year-ago levels,while new vehicles sales were down nearly 40 percent. This divergence inperformance boosted wholesale used vehicle pricing as the lack of trade-ins on new vehicle sales significantly reduced this source of supply intothe wholesale market.

In addition to being inherently more stable than the new vehicle mar-ket, used vehicle retail activity in early 2009 was helped by a strong taxrefund season. In its first release of data, the IRS indicated that individualincome tax refunds were up more than 12 percent to $154 billion as of thefirst week of March. This rise was the result of the higher standard deduc-tion and an increase in the maximum earned income tax credit – two pro-visions that are particularly important to the used vehicle market.

For the remainder of 2009, independent dealers should anticipate con-tinued softness in the overall economy and a weak labor market – both ofwhich will make customers value-conscious and credit-sensitive. Withrespect to wholesale supply, dealers should benefit from a higher numberof attractively-contented end-of-service fleet vehicles entering the market.Some fleets will be cycling their fleets early – sometimes for good reasons(attractive deals on ’10 models) and sometimes for sad reasons (workforcereductions).

At Manheim Consulting, we wish all dealers continued success overthe coming year and we will be closely watching and analyzing thetrends as the year unfolds. Contact me at [email protected] time if we can be of service, and check out our website atwww.manheimconsulting.com.

In December, the National Bureau ofEconomic Research officially declared that theU.S. economy was in a recession that startedin December 2007.Unemployment rose to 7.2%, during 2008,

plants shut, consumer spending and businessinvestment dropped. The credit crunch helpedconsumer saving and debt levels, but at the

cost of reduced personal consumption expenditures.Additionally,the housing market continued its stagnation.

Our hope for a better second half is based on a continuedthaw of the credit freeze as monetary policy focusing on lowrates, increased liquidity and interventions to absorb risk takesfurther hold, and as fiscal stimulus moves beyond politics andinto the real economy.

New vehicle sales were the lowest they’ve been since 1992and retail used vehicle sales continued a slide that started severalyears ago. New vehicle inventory levels are high and theyremain relatively affordable as pent-up demand seems to bebuilding. Used vehicles may benefit from pent-up demand, andfrom the tendency of consumers to buy used vehicles duringtough times. Certified pre-owned vehicles may be a particularlyattractive alternative to such consumers today.

On the supply side, the used vehicle market saw growth in vol-umes from off-lease units and repos in 2008 which should contin-ue through 2009. For dealers seeking to increase their used vehi-cle sales, lack of trade-in volume has drawn them increasingly toauctions. This helped wholesale prices stabilize after 12 months ofyear-over-year declines. Declines in rental sales also have sup-ported wholesale prices. Another stabilizing factor is the reset toSUV and pickup truck prices after an over-correction due to highgas prices.

Wholesale used vehicle prices began to firm up in late 2008and by springtime, prices had climbed for five consecutivemonths. On a year-over-year basis, prices were still modestlyunder water, but the level of submersion diminished to almostnegligible levels. Although all seller types, model class segments,and vehicle ages experienced month-over-month price gains, thestrength of the overall increase by March was partially deter-mined by robust prices for the youngest, most expensive vehiclespurchased in manufacturer auctions by franchised dealers. Thisreflects supply shortages of late-model used vehicles resultingfrom diminished rental unit sales in recent years, and renewedinterest on the part of franchised dealers to generate grosses byselling more late-model used vehicles.

Remarketers who have flexibility in the timing of auctioningtheir vehicles would do well to take advantage of the current sell-er’s market. With consumers, and hence dealers, actively seekingused vehicles in these tough economic times, demand, as well assupply, conditions remain favorable for wholesale prices to contin-ue to firm.

By Tom Webb, Manheim Consulting Chief Economist

USED VEHICLES IN TOUGH ECONOMIC TIMES

By Tom Kontos, Executive Vice President, Customer Strategies and Analytics, ADESA

AUCTION / REMARKETING COMMENTARYBY TOM WEBB AND TOM KONTOS

S E C T I O N

SIX


NIADA needs your data!!! So help us help

you!!! You've now reached the back of this

report, meaning you just can't get enough

data. If you are like most of our dealer

members, this data is extremely important

in comparing your dealership to nation-

wide industry standards.

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tistics by taking just five minutes to complete

and fax back this NIADAMembership Survey to

817-649-5866

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The NIADAmembership data is based on results from

this survey. Your dealership demographic is important to us.

We use the results from this survey to gather statistics for the

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to show trends in the industry over the past few years.

Your efforts will not go unnoticed. By completing this

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• NIADA Standardized Accounting Manualson CD ($110 value)

PLEASE ASSIST US IN PROVIDING THE MOSTCOMPREHENSIVE AND ACCURATE DEALER-SHIP STATISTICS BY TAKING JUST FIVE MIN-UTES TO COMPLETE AND FAX BACK THISNIADA MEMBERSHIP SURVEY TO 817-649-5866.

All surveys must be completed and mailedor faxed back to us by December 31, 2009 to beeligible for the drawing. The survey can also befilled out online at www.niada.com.

By completing this survey, you also auto-matically qualify for a drawing for two compli-mentary registrations to the 2010 NIADAConvention & Expo, to be held at the CaesarsPalace in Las Vegas, NV on June 20-24, 2010.

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DEALER MEMBER QUESTIONNAIRE 2010

2009industryreportpdf2009 niada used car industry report used car industry report table of contents...

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