Automotive News - July 28, 2008 - (Page 26) 26 • JULY 28, 2008 remarketing Used-car rule goes to the shop for tuneup Harry Stoffer hstoffer@crain.com WASHINGTON — The growth of certified used-vehicle programs may spur changes in the buyer’s guide that must be posted in most used cars and trucks on dealership lots. The Federal Trade Commission is considering updates to its regulation aimed at protecting buyers of used vehicles, commonly called the Used Car Rule. The rule, adopted in 1984 and revised in 1995, requires window stickers with warranty information. A dealer must either check a box marked “as is” if there is no warranty or spell out details of any dealer-provided warranty. Certified vehicles generally come with manufacturer-sponsored warranties. The label probably should reflect that reality, says Steve Baker, director of the FTC’s Midwest region. The rule also warns customers not to rely on spoken promises of dealership employees unless the pledges are confirmed in writing. Baker says the rule protects buyers from salespeople whose vows to stand behind their cars and trucks are good only until the vehicles drive off their lots. Sergei Lemberg, a lawyer who specializes in lemon law violations and motor vehicle sales fraud, says the Used Car Rule has limited value. Lemberg says he fears revisions will be mostly cosmetic. Lemberg says fraud cases would be easier to prove if the rule required dealers to affirm that the vehicles they sell are not rebuilt wrecks or returned lemons. Another possible change: Instead of having the option of pro- viding guides in English or Spanish, some dealers want to use bilingual labels. Baker says the FTC wants to find out whether such labels would be “too cluttered.” Used-vehicle dealers generally believe the rule is effective, says Keith Whann, general counsel of the National Independent Automobile Dealers Association. But the group’s 20,000 members generally agree the rule should be updated to deal with “kinks in the system,” such as certified-vehicle warranties, Whann says. The National Automobile Dealers Association plans to consult with dealers, state associations and others in the industry before it comments on possible rule changes, says Paul Metrey, NADA’s director of regulatory affairs. The FTC is taking public comment until Sept. 19 on the Used Car Rule and possible changes. c Big-truck prices take a tumble in June Arlena Sawyers asawyers@crain.com Average wholesale used-vehicle prices, June Average price June 2008 Average price May† 2008 Average price June 2007 % change vs. May† 2008 % change vs. June 2007 Audi certified push pays off Arlena Sawyers asawyers@crain.com Car Small and midrange Sporty Traditional Upscale Total car Light truck Small pickups Full-sized pickups Minivans Full-sized vans Lower midrange SUVs Large SUVs Other SUVs Total light truck TOTAL WHOLESALE $8,625 12,125 10,523 12,063 $9,355 $6,932 8,513 7,037 6,901 8,614 10,507 13,173 $9,191 $9,306 $8,490 12,361 10,815 12,657 $9,364 $7,259 9,343 7,459 7,119 9,446 11,324 13,936 $9,874 $9,619 $8,150 13,263 10,454 13,194 $9,159 $7,753 11,716 8,003 7,745 10,466 13,674 14,963 $10,996 $10,055 1.6 –1.9 –2.7 –4.7 –0.1 –4.5 –8.9 –5.7 –3.1 –8.8 –7.2 –5.5 –6.9 –3.3 5.8 –8.6 0.7 –8.6 2.1 –10.6 –27.3 –12.1 –10.9 –17.7 –23.2 –12.0 –16.4 –7.4 Wholesale prices of used big trucks dropped even more last month, while prices of used compact cars jumped, the two largest auto auction companies said. In June, full-sized used pickups sold at auction for an average of $8,513, according to ADESA Analytical Services. That price was 27.3 percent below the segment average in June 2007 and 8.9 percent lower than in May 2008. The average wholesale price of large used SUVs last month was $10,507, down 23.2 percent from the year-ago month and 7.2 percent from May 2008, ADESA said. “I don’t know if we’ve hit bottom yet with these segments,” as gasoline prices have continued to increase, said Tom Kontos, ADESA’s executive vice president of customer strategies and analytics. Manheim’s June data showed a similar trend. The average wholesale price of used large pickups fell 25.4 percent from June 2007, and prices of big SUVs fell 27.5 percent, Manheim said. Its figures differed from ADESA’s because Manheim’s price data are seasonally adjusted. At the same time, ADESA said, Note: Based on approximately a half million AuctionNet wholesale vehicle transactions a month †Revised *Includes standard and premium crossovers and small, upper midrange and premium SUVs Source: ADESA Analytical Services based on AuctionNet data and Automotive News market classifications ADESA’s Tom Kontos: “I don’t know if we’ve hit bottom yet with these segments.” compact cars sold at auction last month for an average of $7,376. That wholesale price rose 17.0 percent from June 2007 and 4.4 percent from May 2008. Overall, used vehicles sold at auction in June for an average of $9,306, ADESA said. The price was 7.4 percent less than in June 2007 and 3.3 percent less than in May 2008. Last month, Manheim’s Used Vehicle Value Index stood at 107.8, up from 107.5 in May 2008 but down from 114.9 in June 2007. Tom Webb, Manheim’s chief economist, said tighter credit, higher gasoline prices and a weakened labor market are hampering sales of new and used vehicles. Still, Webb said, prices of late-model used vehicles are holding up. He cited cutbacks by the Detroit 3 in sales to rental companies of cars and trucks that go to auction when they leave rental service. Webb said overall sales of new vehicles to rental fleets dropped more than 17 percent in the first half of 2008 from the year-ago period. c Audi of America Inc. expects more emphasis on its certified used-vehicle program to pay off with a 22 percent increase in certified sales this year. Mark Ilijanic, Audi’s certified preowned manager, notes that certified sales are part of the dealer performance bonus plan launched last year. Audi also has stepped up dealer training in certified sales, he says. “Last year was a record-selling certified year for us,” Ilijanic told Automotive News. “This year, we’re on pace to break last year’s” record. In the first half of 2008, Audi sold 18,241 certified vehicles — a 41.7 percent increase from the year-ago period. Last month, Audi sold 2,787 certified used vehicles, up 23.6 percent from June 2007. Audi projects more than 33,000 certified sales this year, Ilijanic says, up from 27,058 sales in 2007. Joel Weinberger, dealer principal of Continental Audi in suburban Chicago, says Audi’s certified marketing efforts have boosted consumer awareness of the luxury brand and its products. Audi is promoting the certified program with special consumer finance rates and co-op advertising money for dealers, he says. Including certified sales in Audi’s dealer profitability plan also encourages dealers to take part in the program, Weinberger says. Dealerships that buy a specified percentage of end-of-lease vehicles can add to their profit margins, he notes. Nearly half of Audi certified sales are of the A4. A 2005 model is shown. “The brand needs strong certified sales to keep residual values high,” Weinberger says. “We need good used-car sales to support good newcar sales.” This year, Weinberger expects to sell roughly 450 certified vehicles — about 30 percent more than in 2007. Ilijanic says off-lease vehicles are the main source of the brand’s certified cars and trucks. Audi spokesman Jeff Kuhlman says leases account for “a little over 50 percent’’ of Audi’s new-vehicle sales. Audi expects 10 percent more of its vehicles to come off lease this year than last year, Ilijanic says. He declined to provide a precise figure. The Audi A4, the brand’s highestvolume model, represents nearly half of Audi certified sales. The mid-sized sedan offers either a four- or sixcylinder engine. The four-cylinder model “complements the demand for a fuel-economy, value-story vehicle,” Ilijanic says. Last month, the industry sold 141,557 certified cars and trucks, down 6.3 percent from June 2007. In the first half of 2008, the industry sold 883,423 certified vehicles, up 2.5 percent from the year-ago period. c FIND A CAR. ONLINE. ANY TIME. It’s simple. Tell us what you want—make, model, year—and we’ll do the rest. With ADESA Notify Me, you’ll instantly know when we have your car. So what are you waiting for? Take advantage of the latest technology. ©2008 ADESA, INC. Log on to NotifyMe today. http://adesa.com http://adesa.com
Table of Contents Feed for the Digital Edition of Automotive News - July 28, 2008 Automotive News - July 28, 2008 A scared-stiff industry stomps on the brakes No-lease edict stuns Chrysler dealers Hummer: Bonuses, buyouts Amid the gloom, Mercury celebrates Ford banks on Mulally's small-car plan PACE awards open for innovative suppliers GM expands employee discount plan through July American Axle blames strike for big quarterly loss Mercedes expects U.S. sales to fall; B class may come in 2011 Chevy plans new U.S. subcompact by '11 GM or Reynolds? Dealers must decide now Ralph Kisiel Ghosn: It's wrong time for a new partner GM geniuses turned their auto dreams into realities Dealers fresh out of Mini Coopers Chrysler, Ford, Honda top NAACP report card GM alters bonus for dealers who outperform their region Automakers angle for Chrysler's idle engine plant Chrysler revokes franchises in Pa. Sonic-Mercedes case could allow big dealers to add stores Buick's new LaCrosse It's still true: Product is king Still a bad idea NHTSA's Nason is leaving some big jobs undone Don't advertise them until they're on sale Safety matters much more than mpg Chrysler's no 'fuel economy laggard' $4 gas won't turn the U.S. into Europe For Europeans, America still spells opportunity Challenges travel with OnStar to China Personnel Mexico sales rise 1.2% in June Picture this Europe's worst sales result? Toyota Kia spends big to launch Borrego Kia launches Borrego just as SUVs lose favor Detroit 3: Goodbye, bailouts Dealers Eaton: Supercharger sales will grow Fla. appeals panel overturns class status in Kia brake suit Audi certified push pays off Used-car rule goes to the shop for tuneup Big-truck prices take a tumble in June Automaker tax break piggybacks on mortgage bill Honda rides high in 2nd-quarter rankings Ford Credit takes a hit as truck values fall 100 years of the Tin Lizzie Lamborghini profit soars AutoNation net income falls GM names CFO for N.A. TI Automotive unit will move Mercedes to cut Ala. production Fleming was a consummate newspaperman Toyota plans to raise Prius output A dart for Smart Tesla gets good reviews at Bentley 422 hp — and, uh, easy at the pump Ford's 2nd qtr: The reddest ink ever Bill Gates joins the car-dealer club Detroit 3 should put Mini under the microscope What's a Gov. to drive? Automotive News - July 28, 2008 Automotive News - July 28, 2008 - Hummer: Bonuses, buyouts (Page 1) Automotive News - July 28, 2008 - Hummer: Bonuses, buyouts (Page 2) Automotive News - July 28, 2008 - American Axle blames strike for big quarterly loss (Page 3) Automotive News - July 28, 2008 - GM or Reynolds? Dealers must decide now Ralph Kisiel (Page 4) Automotive News - July 28, 2008 - GM or Reynolds? Dealers must decide now Ralph Kisiel (Page 5) Automotive News - July 28, 2008 - GM alters bonus for dealers who outperform their region (Page 6) Automotive News - July 28, 2008 - GM alters bonus for dealers who outperform their region (Page 7) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 8) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 9) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 10) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 11) Automotive News - July 28, 2008 - Chrysler's no 'fuel economy laggard' (Page 12) Automotive News - July 28, 2008 - Chrysler's no 'fuel economy laggard' (Page 13) Automotive News - July 28, 2008 - For Europeans, America still spells opportunity (Page 14) Automotive News - July 28, 2008 - For Europeans, America still spells opportunity (Page 15) Automotive News - July 28, 2008 - Personnel (Page 16) Automotive News - July 28, 2008 - Personnel (Page 17) Automotive News - July 28, 2008 - Picture this (Page 18) Automotive News - July 28, 2008 - Picture this (Page 19) Automotive News - July 28, 2008 - Europe's worst sales result? Toyota (Page 20) Automotive News - July 28, 2008 - Europe's worst sales result? Toyota (Page 21) Automotive News - July 28, 2008 - Detroit 3: Goodbye, bailouts (Page 22) Automotive News - July 28, 2008 - Dealers (Page 23) Automotive News - July 28, 2008 - Fla. appeals panel overturns class status in Kia brake suit (Page 24) Automotive News - July 28, 2008 - Fla. appeals panel overturns class status in Kia brake suit (Page 25) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 26) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 27) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 28) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 29) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 30) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 31) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 32) Automotive News - July 28, 2008 - Honda rides high in 2nd-quarter rankings (Page 33) Automotive News - July 28, 2008 - 100 years of the Tin Lizzie (Page 34) Automotive News - July 28, 2008 - Mercedes to cut Ala. production (Page 35) Automotive News - July 28, 2008 - Toyota plans to raise Prius output (Page 36) Automotive News - July 28, 2008 - Toyota plans to raise Prius output (Page 37) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 38) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 39) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 40) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 41) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 42)
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