Ed Bobit's Publisher's Page

America's noted historian, James Harvey Robinson, put some phrases together that apply today to the enigma of auto auctions within the automotive industry when he wrote: "Few of us take the pains to study the origins of our cherished convictions; indeed, we have a natural repugnance to so doing. We like to continue to believe what we have been accustomed to accept as true, and the resentment aroused when doubt is cast upon any of our assumptions leads us to seek every manner of excuses for clinging to them. The result is that most of our so-called reasoning consists in finding arguments for going on believing as we already have."

It seems that Mr. Robinson's logic applies to the character, image and misunderstanding of auto auctions as viewed today by other segments of the industry. An analysis of the reasoning behind this assessment is worth reviewing.

First of all, there is good evidence that auctions are not yet appreciated or understood by a good many dealers and fleet men. Automotive News' capable auction editor, Don Williamson, quoted a number of auction-dissident dealers late last year with quotes like these: "Too many rough cars," " . . . in about 7 5% of the purchases, cars were bad units . . . , " "Cars too badly in need of repairs" and "No selection—prices too high." Add to this the antiquated thinking still held by a large number of dealers and wholesalers who maintain a belief that " all" fleet cars are either taxis, police or high-mileage, non-maintained units.

Now, let's examine some facts that might help influence our thinking and knowledge about auctions and the fleet element.

J. Frank Brasher, the mentor of Salt Lake Auto Auction, and one of the most respected and successful men in the industry, has recently furnished us with important statistics that identify the new patterns that have emerged in current years as a result of the influence of fleets (that includes leasing and rental). Try this data on for size. . .

CARS TO AUCTION   20 YRS. AGO   1971
"Fleet" (incl. Leasing/Rental)  4 % 42%
New Car Dealers  16% 18%
Used Car Dealers  26% 7%
Wholesalers  54% 33%

Without question the growth and use of auctions by the fleet segment of the industry has had a decided impact. Now add this. Over a million cars hit the used car market through fleets each year. The average age is just over 23 months; or less than two years old.

From other research we can validate that fleet cars are higher line cars, are purchased with less depreciation expected, ordered with more automatic transmissions, V-8 engines, and power steering than the U.S. average. They also turn in cars with better colors and those that are calculated to bring the top resale dollar. Some additional related facts. AALA research shows that their leasing members invest an average of $107 for each car in preparation for resale.

Now some documented observations to support the facts. Less than 15% of all fleet resale cars each year are out of the combined segments of taxi and police; similarly, daily rental. Fleet cars are better maintained overall than the on-the-average U.S. car at resale. Individual auction owners, combining their efforts with the National Auto Auction Assn., have developed a new higher standard within the industry, eliminating the old doubts about professional businessmen; insuring a fair shake among those utilizing their services. Finally, the auto companies themselves have upgraded the auction industry with continued use, surveillance and dealer participation encouragement with their own auction days.

Some final thoughts include some words from Mike Lawrence from Vancouver Auto Auction who says, " . . . the dealers that complain about 'wrecks,' 'misrepresentations,' 'prices too high,' 'rough cars,' etc., etc., are usually the dealers with the weakest used-car departments."

Fritz Cassel, the venerable executive of Cox's Manheim and nine other auctions invites anyone to interview the dealers that attend their auctions for "happiness."

Even fleet sellers will agree with suggestions for better auction usage: 1. Eliminate false bids, 2. Avoid favoritism in assignment of numbers, 3. Identify models more explicitly in auction report sheets, 4. Certify car's mileage at time of purchase, 5. Keep out retail buyers, 6. No packing of recon charges, and 7. Better communications overall on titles, payment, pickups, etc.

Auctions are such a vital part of our automotive industry, the fleet segment in particular; let's make every effort to understand them, use them and encourage auction owners to provide leadership to make the business relationship even more profitable for all.