Manheim's largest auction site has created a yearlong training program to teach dealers' children how to buy and sell vehicles at auctions profitably.
Tim Van Dam, market vice president of Manheim's Northeast Market, says the NextGEN program is the result of conversations with dealers who want their children to learn about the intricacies of auctions in preparation to join, or take over, the family business.
NextGEN was created by John Crispeno, Manheim Pennsylvania's marketing manager, under Van Dam, then general manager of Manheim Pennsylvania, the company's namesake auction site in Manheim, Pa.
"We've talked to dealers and they would say, 'My daughter, my son,' and then go on to explain how they don't know the industry, they don't know the business," says Van Dam. "My marketing director came to me and said we've got to fill this need, if for no other reason than this is something that will help our customer and we've got to do this for the sake of the auction industry."
NextGEN started in March with 20 students ranging from 16-year-old high school students to adults in their 30s. Classes meet quarterly at the Pennsylvania auction. They are free and parents are welcome. The final class of the session is scheduled for Feb. 20.
Students are taught the basics, such as how to register to buy and sell at an auction, as well as more complicated practices, such as inventory management.
The curriculum covers common practices such as used-vehicle appraisals and how to use the values in used-vehicle pricing guides. It also delves into how to buy used vehicles and how many should be bought based on vehicle turn time and what's selling on a dealership lot and in a given market.
Exercises in critical thinking help students decide when to pay more than guide book value for a vehicle and when not to. The students also are schooled on figuring reconditioning costs into the equation to calculate vehicle profit potential.Tricks of the trade
Van Dam says students are also let in on some tricks of the trade to help them navigate auction lanes.
For instance, sometimes seasoned buyers who spot rookies in the lane may make comments -- such a vehicle being "a piece of junk that was here last week" -- to discourage a potential competitor from bidding on the vehicle.
Or an inexperienced buyer will get into a bidding war that may result in him or her paying too much for a vehicle.
"Knowing when to say when is critically important," Van Dam says. "If you get someone with more of a gambler's mentality, they don't stop. They're excited; everything is going crazy."
Tom Alexander, 62, a managing partner at Aubrey Alexander Toyota in Selinsgrove, Pa., attended the sessions with his 29-year-old daughter, a school psychologist who is considering a career change.
Alexander, who appraises trade-ins and visits an auction at least once a week among his other dealership duties, says the sessions are educational and can be social and networking events for participants.
One session he attended with his daughter focused on post-sale inspection, explaining how auctions inspect and test drive vehicles efficiently.
He says he wanted his daughter to learn about the world of the used-vehicle department because it is the side of retail automotive where "you can make the biggest mistake or the most money."
Alexander says he'd be surprised if his daughter changes careers but adds, "I want her to know that the door is open and available to her."