Article by Christina Rogers, the Wall Street Journal: Sonic Automotive Inc., one of the country’s largest car-dealer companies, will open a chain of preowned-vehicle stores hoping to move on the turf of used-car retailer CarMax Inc. Sonic today will announce the creation of EchoPark stores, with the first dealership opening in Denver this autumn, a few miles from a CarMax store. Like CarMax, EchoPark will provide no-pressure shopping to customers disillusioned with traditional selling techniques. Sonic prices will be set by a central office, rather than each store, eliminating haggling. Customers will deal with one salesperson from start to finish. The EchoPark move comes amid healthy demand for preowned cars, which typically give dealers bigger margins than new cars. Americans bought about 42 million used cars last year, nearly three times as many as new cars. Dealers generated 3.8% in profit last year on the sale of each new car. That was down 5% a decade earlier and far less than the 13% on used cars, according to the National Automobile Dealers Association. EchoPark expects an average selling price of about $17,000. Eventually, it hopes to expand to other U.S. cities, adding one to three major markets a year. Sonic isn’t the first megadealer to take on CarMax, the nation’s largest retailer of used cars, with 135 stores. Lithia Motors Inc. in 2007 opened stand-alone used-car stores but abandoned the strategy the next year in the economic downturn. Asbury Automotive Group Inc., which is smaller than Sonic, also is building a line of stand-alone used-car stores. It opened its first in Tampa, Fla., in June under the Q auto brand. “It’s too big a market and there is too much of an opportunity,” said Sonic’s executive vice president of operations, Jeff Dyke. CarMax sits “in their own world without any competition really,” he said. “We think there is plenty of room for us.” CarMax’s revenue rose 15% in the fiscal year through February to $12.6 billion, selling a half million cars. The company reported an average selling price of $19,408 for used cars and gross profit of more than $2,000 per vehicle. Sonic posted $8.8 billion in 2013 sales. It reported an average of $20,327 in revenue for each used car and a gross profit of $1,402 per vehicle. A CarMax spokeswoman responded to Sonic’s plan by saying that “competition is good for the marketplace.” EchoPark is part of a...
According to Craigslist’s fact sheet the site receives more than 100 million classified ads each month (including reposts and renewals). The site also receives visits from 60 million US users every month, making it one of the most popular sites online. Even though the company has received some negative press due to some criminal activities, the platform is still used by a large number of people, mainly because the service is free. However, starting December 3, 2013 Craigslist is going charge car dealers $5 per vehicle for a 30 day listing across the US. The new price structure has a set of rules for car/truck dealers when they place an ad on Craigslist. The rate applies for each vehicle, no matter how many cars a dealer has, and the company is not offering any volume discount. The new ads cannot have hyperlinks, templates or external images and all relevant information must be in the ad for the specific vehicle that is being sold. Just like all other Craigslist ads, the new paid ads are subject to flagging and can be removed once it has been reviewed. Term of Use violations will not be refunded. The ad can also be removed if dealers post vehicles stating “by owner.” In this case they will be subject to ad removal, account closure and other remedial actions. Once an ad has been posted and it is live, it can be edited and reposting will cost the same amount. Many dealers have already voiced their complaint about the new pricing structure, but at five dollars a month it has got to be one of the best rates anywhere for a site that enjoys at least 60 million visitors every month. Print ads are much more expensive and it is generally for one edition in a medium that is quickly losing favor by consumers. Newspapers and magazines are abandoning their hard copy edition for online versions as smartphones and tablets continue to make mobile computing accessible anytime and anywhere. So in the long run the option Craigslist provides looks very reasonable and better suited to address current consumer trends. Any questions or feedback, please contact us: twitter.com/bhphnews | facebook.com/bhphnews Article Source. Photo...
TD Bank plans to up its service game, reduce its number of dealer-clients, and build a model for more efficient future growth. The expected result: Slower U.S. originations in the coming quarters. Lenders plan to combat stiffening competition and increased regulatory scrutiny in 2014 with expansion efforts and enhanced compliance. Months after Nicholas Financial first revealed it had a suitor, Prospect Capital Corp. has come forward...
