Tag Archive | "Cox Automotive"

Dealertrack: Millennial Stereotypes Aren’t Entirely True

LAKE SUCCESS, N.Y. — The perception that millennials — consumers ages 18-34 — are content with a carless, ride-hailing life may not be true after all, at least according to new data from Dealertrack.

In 2015, a record-setting sales year, millennials accounted for 34.6% of all auto loans originated through the Dealertrack platform, according to the software firm. Through the first eight months of 2016, that segment’s share of auto loan originations has grown to 36%.

“What we found was that millennials were kind of pigeon-holed into this category as lazy, young and entitled, and I think there were questions as to how they would transition when they became adults and had jobs,” said Jason Barrie, Dealertrack’s vice president of market performance, lender, sales, and F&I solutions. “I think the auto market is an important variable to show if millennials are in the market to buy larger assets, and I think, from the data that we’re seeing, they are in the market for cars.”

In the past five years, Dealertrack has seen millennial loan originations grow at a significant pace. In 2011, the age group accounted for 24.8% of all auto loan originations. They now account for more than a third of all loan originations.

Barrie attributes some of this growth to natural generational shifts. In 2011, consumers over 64 accounted for 13% of all loan originations. Now they account for 8.6%. Generation X represented 44.3% of all loan originations in 2011, but now account for 41%. However, there are also other factors contributing to the rise of millennial loan originations, including the growth of incentives targeting the demographic.

“Many of those incentives were pointed at recent college grads, and many of them were designed to drive upstream customers that weren’t necessarily in the market. And it did help drive sales in 2015 as well as in 2016,” Barrie said. “So you’re seeing some demographic shifts here, you’re seeing some activities that are showing the largest demographic group in the history of the United States, this millennial group, they’re players in the market and they’re going to move cars and influence how and what is actually purchased and leased.”

Another factor that has helped the growth of millennial loan originations, Barrie noted, is the rise in finance sources targeting the subprime market. Many sources, Barrie added, are buying deeper in the subprime segment and are looking at millennials as a key growth opportunity.

Many millennials are still working to establish credit, are at the beginning of their careers, and are living on limited budgets. That makes the monthly payment a major consideration for this car-buying demographic. For the older, more established millennials, stretching terms or leasing is a great option.

According to Barrie, the average new-vehicle loan term for a millennial was 70.4 months, up from 70.2 months last year. The average new-vehicle loan term for Generation X was 70.1 months, while the average term for baby boomers was 68.8 months.

Because of their credit standing, leasing doesn’t account for a lot of transactions from this age group. Barrie noted that millennials take out 19 auto loans for every one lease transaction. However, from 2012 to 2016, millennial lease transactions have grown by 49%.

“As millennials gain better credit, you’re going to see leasing continue to be a solution for that younger demographic looking to get into the car of their choice to match their budgets,” Barrie said.

Barrie also addressed a perception that millennials want to exclusively buy their cars online. He said Dealertrack has found that that’s only partly true.

Millennials do, in fact, want a digital retailing experience, but they still want to be able to test drive their car at the dealership. They want to go to a dealer’s website to pick a car, configure it, get finance options, get a trade-in offer, and fill out a credit application so their deal is structured by the time they reach the showroom. This online-to-showroom experience is part of why Barrie believes in the effectiveness of Dealertrack’s iPad menu.

“To be able to present F&I products with video and graphics and descriptions, it’s more in line with the interactive experience that consumers are looking for online. So when they come into the physical dealership, they’re engaged with tablet technology to continue that experience, so it’s not disjointed,” Barrie said. “Think about the experience, that you’re online, you structure a deal. You got all these great tools, you got financing options, fill out a credit app, you can research F&I products online and then you come into the dealership and they hand you a photo copy brochure of a vehicle service contract.

“And that’s where we see the use of dealer-controlled technology in the showroom, that enables the sales process, enables the F&I manager to do a more effective job of telling the story,” Barrie added. “This isn’t to replace the F&I manager. We do not see the technology replacing the individual who’s educating the consumer. F&I departments add so much value to the car-buying experience to educate a consumer.”

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Manheim Vehicle Solutions Gets New Senior VP

ATLANTA — Cox Automotive has appointed Joe George as senior vice president of Manheim Vehicle Solutions. He will be responsible for strategy to execution, driving the wholesale and retail solutions long-term plan related to reconditioning, imaging purchase protection and inspections.

Effective Oct. 17, George will report to Janet Barnard, president of Cox Automotive Inventory Solutions. He succeeds Shane O’Dell, who was recently named president of Cox Automotive Financial Services.

“Joe is a proven leader with in-depth knowledge of the changing wholesale and retail marketplaces,” said Janet Barnard, president of Cox Automotive Inventory Solutions. “With Joe’s support, we will move closer to our strategic vision of becoming a holistic inventory services provider, expanding our reach beyond the lanes and providing value-added, end-to-end services for our clients.”

George previously served as senior vice president and chief strategy officer for Cox Automotive. Earlier in his career, he helped launch Autotrader.com and held several leadership positions with Autotrader’s parent company.

George has worked with Cox Automotive and several of its brands for more than 27 years. He first joined the company as an auction employee at operating locations and rose through the ranks to eventually become marketing manager, general sales manager, and assistant general manager.

He later joined Manheim’s executive team and became senior vice president of product development and vice president of Manheim Digital, according to the company.

“I’m excited to help shape Cox Automotive’s remarketing strategy, especially at a time when the company is focused on reimagining the used-car marketplace and improving the client experience,” said George. “My goal is to help broaden our services and deliver added value to our clients and our company.”

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Kathinokkula to Host Online F&I Panel at PALS 2016

LAS VEGAS — Software expert Kumar Kathinokkula will serve as moderator for a panel dedicated to online F&I at the upcoming P&A Leadership Summit, organizers announced Thursday. The event will be held Aug. 30–31, 2016, at Paris Las Vegas.

“Making F&I products available online for end consumers is a subject of great interest to dealers, agents and providers as car buying evolves ever closer to full online purchasing,” said Kathinokkula, who serves as COO of F&I Administration Solutions. “Doing so requires educating the consumers on the value propositions of these products, simplifying the choices, and ensuring the dealer stays in control of the transaction. I feel confident that, with the group we have convened for this panel, we can deliver an intelligent and thought-provoking discussion on this topic.”

The session, “Presenting F&I Products Online,” will also include Daniel Lievrouw, vice president of operations and IT at American Guardian Warranty Services Inc., and Brett Pomerantz, director of ecommerce for Cox Automotive and a founding member of the MakeMyDeal team.

“Any change to the F&I process, even in the name of progress, is bound to spur debate,” said David Gesualdo, show chair and publisher of P&A magazine. “My hat is off to Kumar, Dan and Brett for tackling the subject head-on, and I look forward to a memorable session.”

To register for the 2016 P&A Leadership Summit, click here. Attendees who register by midnight tonight, will save $100.

To inquire about sponsorship and exhibition opportunities, contact David Gesualdo via email hidden; JavaScript is required or at 727-947-4027.

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Cox Automotive Names New VP of Communications and Community Relations

ATLANTA – Cox Automotive named Shirley Powell as its vice president of communications and community relations. She will lead and manage day-to-day operations of the company’s global communications organization, according to F&I and Showroom magazine.

Powell has more than 25 years of experience in strategic communications and most recently served as executive vice president and chief communications officer at The Weather Company, where she oversaw internal and external communications.

“Cox Automotive has a great story to tell about how we are connecting the entire automotive ecosystem, and Shirley brings expertise that will enable us to clearly communicate the strength and value of our brands and services,” said John Kovac, senior vice president of marketing at Cox Automotive. “Shirley’s superior leadership style and broad experience with leading global communications for multi-brand organizations will be an incredible asset to the company and elevate our visibility among clients and consumers.”

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Cox Automotive Enters F&I Product Business

ATLANTA — Cox Automotive is getting into the F&I business. The company announced today it has acquired a minority interest in SilverRock Holdings LLC, which is majority owned by Ernest Garcia and Ray Fidel of DriveTime through a separate company, Oreno Holdings Inc. The transaction closed on Dec. 31, 2015.

According to officials, Go Financial and NextGear Capital affiliated dealers will soon be able to offer SilverRock Holdings F&I products, which include vehicle service contracts (VSC), GPS-based theft-recovery products, GAP and auto insurance.

“Our stake in SilverRock Holdings supports our goals of delivering the types of products and services that dealers need to grow and compete. The aftermarket vehicle ancillary products industry is highly fragmented,” said Brian Geitner, president of Financial Services and NextGear Capital. “This partnership will offer GO Financial and NextGear Capital affiliated dealers a greater variety of services, creating a one-stop approach and a more efficient transaction for retail customers.”

SilverRock owns the following warranty and insurance companies: VSC administrator and obligor SilverRock Automotive, online insurance agency SilverRock Insurance, and property and casualty insurance provider BlueShore Insurance Co.

“This new arrangement with Cox Automotive is a result of our close collaboration and mutual desire to offer our clients what they need and want to succeed,” said Garcia, who serves as chairman of DriveTime and majority owner of equity partner Oreno Holdings LLC. “Our deep knowledge of the subprime vehicle market and independent dealers pairs well with Cox Automotive’s expansive products and services across the automotive ecosystem.”

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COX Automotive Canada Acquires Manheim Source Edmonton

TORONTO — Cox Automotive Canada, through its Manheim Canada operation, has acquired complete ownership of Manheim Source Edmonton. The auction will now operate as Manheim Edmonton and will continue to serve clients in its existing market.

This announcement follows Cox Automotive Canada’s announcement in October that it is broadening its footprint in Western Canada.

“We are appreciative of the partnership that we had with Manheim Source Edmonton that served our clients in the Alberta market,” said Maria Soklis, president of Cox Automotive Canada. “Today’s announcement will allow for Manheim Canada to continue to service our clients and offer a full suite of products and services.”

Manheim offers physical and digital auction channels, data analysis, financing and transportation and mobile products and solutions. It provides vehicle remarketing services in North American and connects buyers and sellers of used vehicles to the largest wholesale and used vehicle marketplace.

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