CHICAGO - The auction industry should adhere to a uniform policy on vehicle structural damage because structural problems change a vehicle's resale value.
That is the view of Dan Dietsch, operations manager at ADT Auctions Inc. Technical Center in Nashville, Tenn.
'For liability's sake as an industry, we're all better off disclosing the same things and disclosing as much as we can,' said Dietsch. 'We don't want to penalize the buyers or the sellers. We just want to do the right thing.'
Dietsch conducted a vehicle structural damage workshop with Larry Brasher at the National Auto Auction Association convention here this month. Brasher owns Brasher's Auto Auctions headquartered in Rio Linda, Calif.
In October 1998, the National Auto Auction Association adopted a structural damage policy based on standards created by ADT. The association recommends the policy to its members, but individual auctions do not have to adopt it.
Dietsch said all 28 ADT auctions adhere to the policy and that it has been adopted by the Canadian Auction Group and several independent auctions.
About 1,500 auto auction owners, auto remarketers, finance company representatives and others gathered for the convention, which included association committee meetings, workshops and social events.
At a banquet, former president Don DeVries passed the gavel to 1999-2000 president Henry Stanley. DeVries owns Greater Kalamazoo Auto Auction in Schoolcraft, Mich. Stanley owns Carolina Auto Auction in Anderson, S.C.
A BANNER YEAR
Stanley said this is a banner year for new cars and noted that used cars and new cars go hand-in-hand. 'I think 2000 will be even better,' he said.
'I think the members are seeing the benefit of partnering, whether that be with a lease company, a manufacturer, or with their dealers at home.'
Among the topics discussed during the convention was a federal proposal that would prohibit anyone other than those in law enforcement from having access to title and driver license information.
Auctions use such information to check the history of a vehicle to prevent problems such as odometer fraud and to prevent rebuilt wrecked vehicles from being bought and sold as undamaged vehicles.
The auction association is working with the National Automobile Dealers Association to defeat the proposal.
During a business marketing workshop, Tim Deese, president of Progressive Basics in Orange Park, Fla., explained a formula used-car managers can use to figure out how long a vehicle can sit on their lots and still turn a profit:
Divide the expected profit by the vehicle's holding cost - delivery expense, advertising, financing and other costs of doing business. If a vehicle's potential profit is $1,000 and the holding cost is $20 per day, the profit vanishes after 50 days.
When the profit potential goes, so should the vehicle - ideally to the auction, Deese said.
'Turn is the key to profit,' said Deese. 'We try to teach used-car managers to concentrate on retailing within their profit window.'