Used car auction draws bargain-hunting dealers

January 24, 1993|By Frank Lynch | Frank Lynch,Staff Writer

Early Thursday mornings, hundreds of them from as far away as Canada and Puerto Rico descend on 41 acres in Bel Air in search of the deal.

They'll inspect under hoods, scour interiors for flaws, check bodies and paint jobs for rust and previous patch jobs, and rev engines, listening for the telltale knocks and pings that the best of them can hear a block away.

So like horse racing handicappers, the used car dealers stand prepared when the 800 to 1,000 automobiles approach starting gates A, B and C at the Bel Air Auto Auction.

For, when the bidding begins at 10 a.m., time waits for no dealer --especially not an indecisive one.

When the auctioneers deliver their pitch, in a machine-gun staccato only the hard-core buyers and sellers understand, the auto dealers huddled before the gates have an average of 45 seconds to bid on a car before it's gone.

Here, the art of the deal is big business, to the tune of $60 million to $70 million in annual sales, with dealers paying sellers directly and the auction's owners receiving service fees.

Raymond Nichols, who is president of BSC Financial Group in Baltimore, and his partner, Burton Greenwood, owner of Greenwood Towing, bought the Bel Air Auto Auction in 1980 from its original owner. Mr. Nichols carries the title of secretary/treasurer, Mr. Greenwood is chairman. Their wives help run the auction -- Elaine Nichols is president, Dottie Greenwood, vice-president.

As co-owners of the ever-expanding, 46-year-old auction just south of town on Baltimore Pike, they do their best to keep the dealers satisfied.

They are not to be confused with the used car dealer of myth and persistent stereotype -- the guy with slicked-back hair, pencil-thin mustache, a sport coat so loud it could be heard a block away, a gift of gab so intense it could melt steel and a warranty that lasts only until all four wheels clear the lot.

Today's used cars and salesmen are viewed in a different light -- and they're very particular about the cars they sell, Mr. Nichols said.

The demand for quality used cars has risen, he said, because many families need two or three automobiles. He added that the average American now keeps a car eight years and that 20 percent keep them 10 years.

Dealers are meeting the demands for those second and third cars by purchasing as many late-model cars as possible at auctions.

"I'll say that most used cars on the lots of the dealerships in the Bel Air area were purchased here," Mr. Nichols said.

Bill Krebs, owner of Krebs Automotive in Minneapolis, Minn., shows up at the auction regularly. He flys east every other week and spends Monday through Thursday visiting various auctions, buying cars to take back to his dealership.

"It is time well spent," he said. "I know I'll find quality cars on these trips. I especially like this auction because of the friendly atmosphere and the efficiency of the workers."

Those sentiments are echoed by both Terry Karakatsanis of TK Auto Sales in Quebec, Canada, and Joseph Morielli of Superior Auction on Kirk, Quebec, Canada.

Longtime Harford County dealer Vernon Jones, owner of Jones Chrysler, Toyota, Nissan and GMC Truck dealerships, said his employees probably buy 25 to 30 cars each week at the auction.

Mike Martino of Village Volvo-Saab, was on hand to move a few vehicles. "This auction is held in high regard by the dealers in both Harford County and the region," he said.

Edward Colliver, the auction's general manager, heads the day-to-day operation. He said cars begin arriving early Monday morning and the volume builds till Thursday.

Nearly 150 employees assure the operation runs smoothly -- office workers, cashiers, drivers, guards, cafeteria workers and auctioneers.

While Mr. Nichols begins the day by reviewing new dealer applications, Mr. Greenwood makes sure the office workers have everything needed to handle the paperwork.

Everyone taking part in the auction must fill out a detailed application, provide a copy of a dealer's license and a photograph of himself and various bank forms needed to check credit.

Once approved, those selling autos must pay $30 in registration fees for every vehicle they want to sell. A fee of $15 to $100 -- determined by the cost of the vehicle -- also is charged to a buyer for each vehicle purchased.

As at every auction, Bel Air Auction never takes title to vehicles. Its income comes from fees charged to buyers and sellers. "We rely on volume because it is a low-margin business," said Mr. Nichols.

That volume will grow in 1993. Another 10 acres are being cleared to handle additional vehicles, and a fourth auctioning lane will be added before the summer.

A few years ago, the auction's owners added as an affiliate Chesapeake Fleet Services, a reconditioning center where vehicles from dealer customers and fleet owners are prepared for each auction. It is managed by Stephen Ramsey, who worked 18 years for Peterson, Howell and Heather -- one of the nation's largest leasing firms.

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