September 2012, Auto Dealer Today - WebXclusive
John Iannone and Todd Hoagey of Auction Direct USA named 2012 Independent Dealers of the Year
2012 Independent Dealer Awards sponsored by:
Since 2006, Auto Dealer Monthly has annually recognized the Top 50 Independent Dealers, making this the seventh consecutive year for the awards. The Top 50, as well as the 2012 Independent Dealer of the Year, have been selected based on sales figures submitted by independent dealers all over the country. Auto Dealer Monthly and SiriusXM Satellite Radio, corporate sponsor of this year’s awards, are honored to recognize the excellent efforts of the Top 50 Independent Dealers of 2012.
Since some independents operate multiple stores in different locations, sometimes under different store names, the Independent Dealer Awards are designed to focus on the dealer principals rather than the dealerships, allowing the individuals to be recognized for their efforts in used vehicle retailing.
The awards are open to any independent dealership that is not nor has been publicly held. The application to enter this year’s awards was featured in the April and May 2012 issues of Auto Dealer Monthly and was included in several e-newsletters and social media posts. Rankings for the Top 50 Independent Dealers were based on pre-owned retail sales (conventional retail cash and credit sales, subprime credit sales, and buy here pay here credit sales) for the 2011 calendar year.
John Iannone, CEO, Auction Direct USA, Victor, NY
Todd Hoagey, COO, Auction Direct USA, Victor, NY
Atop the List
For the third consecutive year, John Iannone and Todd Hoagey of Auction Direct USA can jointly claim the Independent Dealer of the Year Award, by a margin of nearly 800 units over the runner-up. Their total for 2011 was 7,407 pre-owned units retailed, an increase of 749 over the previous year’s sales. Auction Direct USA has four locations currently in Rochester, N.Y., Buffalo, N.Y., Raleigh, N.C., and Jacksonville, Fla., and has announced the launch of another store in Pittsburgh, Pa., in January 2013. Iannone, CEO, acknowledged that the Buffalo location only had its grand opening on June 1, 2011, meaning that it only contributed seven months’ worth of sales to Auction Direct USA’s winning total. With any luck, he said, “We should widen our gap next year.”
Of this being the third year to be awarded the title of Independent Dealer of the Year, Iannone said, “We’re pleased to win it again … I think the competition’s getting stronger and stronger.” He also acknowledged the recent challenges experienced by everyone in the used vehicle retail industry.
“I think it was a tough year. The lack of inventory created its challenges, there’s no doubt about that, but I think it was a year in which the banks were willing to finance people again, and that at least gave us the ingredients that we didn’t have back in 2009 and 2010 when banks were still extremely skeptical about financing,” he said. “So, being that the banks were able to loan money again to the consumer and we worked a little harder trying to find the right inventory, we were able to match the two together and get some results that we were pleased with.”
He added that he believed Auction Direct USA’s “seasoned staff” is a big part of the reason he and Hoagey, COO, were once again named Independent Dealer of the Year. “That’s really the driving force,” Iannone said. “We just feel that part of the reason why we’re successful is the experience that people have when they walk into the dealership, and you’ve got to have a base of employees that care and employees that have the best of intentions … It seems like our employees were the ones that were selected to do business with over other dealerships.”
He added, “I think the price and the car have to do a little with it, but the experience and [how] our customers enjoyed the way that we transacted with them really led to the success that we’re having now. It’s about that customer feel; it’s got to be right, especially on used cars.”
Rounding Out the Top 5
Shaking up the top five, second place this year was claimed by newcomers Dick Garber, Mike Crave and Pat Hengesbach of Rightway Automotive based in Flint, Mich. This is their first-ever appearance in the Independent Dealer Awards, and their presence bumped last year’s second- through fifth-place finishers each down one spot to occupy third through sixth places on the list. Rightway Automotive, established in 1996, boasts 18 locations in Michigan and Illinois and retailed a total of 6,610 used cars in 2011.
Not far behind Rightway, with a total of 5,992, is David Andrews of City Auto Sales in Memphis, Tenn., in business for over 25 years now and continuing his reign as one of the top three independents. He has place third or higher in the Independent Dealer Awards since the first year of the Awards in 2006, and he held the title of Independent Dealer of the Year in 2007, 2008 and 2009.
Close on Andrews’ heels in fourth place are Marvin Hewatt and Larry Fleeman of U.S. Auto Sales in Lawrenceville, Ga., also seasoned veterans of the Awards. Their 10-location operation, in business since 1992, increased sales by 628 over last year to hold onto a spot in the top five with a total of 5,415 retail sales. They took third place in the 2011 and 2010 Awards, second place in 2009, fourth in 2008 and sixth in 2006.
Finishing out the top five independents is Donald Birger of InstaCredit Automart. The buy here pay here operation based in Collinsville, Ill., has been in business for 22 years and has four locations in Illinois and Missouri. Birger racked up an impressive 537 units over his 2010 total, finishing 2011 with 4,813 retail sales.
The Top 50
Based on the numbers submitted by the Top 50 Independent Dealers this year, things are continuing to improve in the world of used vehicle retailing, despite recent inventory supply challenges. The Top 50 Independents retailed a total of 105,716 units in 2011, a huge increase of 16,321 over 2010 numbers. The average number of units retailed in 2011 by a Top 50 Independent Dealer was 2,114, a significant increase over the previous year’s average of 1,787. The number of total retail sales among the Top 50 ranged from 7,407 to 720.
While this year’s Top 50 achieved much higher numbers compared to last year, they collectively operate only 10 more locations—134 total locations compared to 124 last year. The average number of locations per dealer is two, with only four dealers operating 10 or more locations and 14 dealers (28 percent) operating between two and nine locations. Second-place finisher Rightway Automotive operates the largest number of locations, 18. The average number of units retailed per location for this year’s Top 50 is 176 per month.
Of the Top 50, 32 dealers operate a single location. For the second year in a row, Steve Hall of driversselect in Dallas, Texas, achieved the highest retail sales numbers among single-location dealers while also topping his previous year’s figures. Hall sold a total of 3,153 retail pre-owned units in 2011, over 700 more than his 2010 total.
A total of 26 states are represented in this year’s Top 50, and the average dealer among the Top 50 has been in business 24 years. Fifty percent have been in business 20 years or more, and 10 percent have celebrated a golden anniversary.
It seems the bar was set a little higher this year and maintaining last year’s placement or moving up on the list was difficult for the dealers who returned this year from the 2011 list, despite the fact that many saw increases in sales over the previous year. A great example of this can be seen with Mohamad El Zein, Hussein Zein and Salim El Zein of the Zein Auto Group in Everett, Wash. Their three-location operation saw a whopping 972-unit increase over the previous year’s numbers, yet they did not move up in ranking from last year, maintaining their placement in the 12th position.
Of the 40 returning dealers, only six dealers who appeared on last year’s list were able to move up in the rankings, including Tracy Myers of Frank Myers Auto Maxx in Winston-Salem, N.C., who moved up to 15th place from last year’s 27th-place ranking; Ted Heater, along with Jonathan Bishard, of CarSmart Auto Sales in Kansas City, Mo., moving from 29th to 20th; Brett Stacy of eCarLink in Addison, Texas., who went from 32nd to 26th; Ken Smith and Eric Smith of Frontier Leasing and Sales, Inc. in Coeur d’Alene, Id., climbing a couple spots from 31st to 29th; Lee Yoder and Warren Yoder at Herbies Auto Sales in Greeley, Colo., who nudged up one place from last year’s ranking to 37th; and Nathan Buche of Auto Express in Lafayette, Ind., who jumped from 49th to 38th this year.
This was due in part to a number of new faces on the list this year, three of which were in the top 10. In addition to the aforementioned second-place dealers of Rightway Automotive, newcomers to this year’s list included Andrew L. Adams and David Blassingame of Autoflex Leasing, Inc., a three-location operation based in Richardson, Texas, who ranked 8th with 3,449 retail sales, and Gary Chaney and Darrell Chaney of Chacon Autos in Dallas, Texas, which has seven locations and ranked 9th this year with a total of 3,370.
Other Facts and Figures
Each year, independent retailers submitting applications for consideration for the Independent Dealer Awards are asked to provide data about their operations. Analysis of this data offers an informative look at the trends among the top-performing independents in the country.
Of this year’s Top 50 Independents, 72 percent reported having a service department, down slightly from the 80 percent reported last year. Down only slightly from last year’s 88 percent, 86 percent of the independents reported having a dedicated finance office while 44 percent said they maintain a dedicated special finance office, four percent higher than what was reported last year.
With regards to financing, 88 percent of the Top 50 reported that they offer indirect financing, up from the 82 percent reported last year. Among those dealers, an average of 69 percent of their sales are financed through indirect sources. Thirty-six percent of this year’s Top 50 have a related finance company (RFC), down slightly from the 40 percent who reported having an RFC last year, and they deliver an average of 52 percent of their sales through their RFCs.
The number of dealers who reported using some form of payment device such as a GPS tracker or starter interrupt saw an appreciable increase this year to 58 percent over last year’s 32 percent. Goldstar appeared to be the gold standard among the Top 50, as it was named by more dealers than any other provider as their product of choice in this area. When it came to dealership management systems, there were 21 different systems being used by the Top 50. Those getting the most use were DealerTrack DMS, utilized by 20 percent of the Top 50 dealers, and ADP, used by 16 percent.
It seems that more independents are going for the additional profit provided by back-end products. Only six percent of the Top 50 said they do not sell any finance and insurance products. A whopping 92 percent of dealers reported offering extended service contracts, up from 86 percent last year, while 82 percent offer GAP and 20 percent offer credit/life insurance, up from 70 percent and 16 percent last year, respectively. Independents reported getting their F&I-related products from 84 different providers, but no single F&I product provider dominated the market.
Among auction use for purchasing inventory, 58 percent of independent dealers in the Top 50 reported using Manheim, 36 percent specified that they use OVE (owned by Manheim), 36 percent utilize ADESA, 25 percent purchase from SmartAuction and 12 percent frequent OPENLANE.
When it comes to utilizing third-party classified or auction sites to market and sell vehicles, 74 percent reported making use of such outlets, up from last year’s 64 percent. Of those dealers, 64 percent are using AutoTrader.com, 52 percent are using Cars.com, 34 percent are using craigslist and 26 percent are using eBay. These were also the four most popular sites with independents for marketing and selling vehicles the previous year; however, this year, craigslist, which can be utilized by dealers for free, edged out eBay in popularity.
The 2012 Auto Dealer Monthly Independent Dealer Awards are sponsored by:
Vol. 9, Issue 7