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Car market set in nods, winks

Used vehicles by the thousands are sold at a Tampa auction where only dealers can bid.

By LEONORA LaPETER
Published March 3, 2005

	[Times photos: Stefanie Boyar]
	Gene McQueen, front center, serves as a ring man for auctioneer Jim Reynolds, top center, during bidding on a car offered for sale by Frank Jones, top left, of New Bay Auto Sales, during Manheim's Greater Tampa Bay Auto Auction on Thursday at S 50th Street in Tampa. More than 2,400 cars passed through Manheim's 12 auction lanes Thursday.
	Jerrad Jasper of Dino Motors in Orlando consults a book of used car values before bidding on a Nissan 350 ZX. Jasper had the high bid on the car at $26,000, but the seller wanted at least $26,500.

TAMPA - The used cars flow like floats in a parade down Lane 12 of the auto auction - barely coming to a stop before they are sold, some in as few as 15 seconds.

Auctioneer Andy Adcock surveys the sea of poker faces mingling around the auction block, trying to locate the buyers among the 100 or so auto dealers standing before him. He has been doing this so long, sometimes he can pick them out before they know they're going to buy.

He sees auto broker Big Al from Valdosta, Ga., standing hidden just outside the building, clipboard in hand, his hard stare indicating he wants a car rolling by. A guy named Billy from Sarasota circles cars like a shark and lifts an eyebrow if he's bidding. Lonnie from Texas likes to give a slight nod, barely perceptable, but Adcock knows he's in.

"I have guys winking at me all the time, and I'm married," jokes Adcock, who has wanted to be an auctioneer since third grade and can sell 200 cars in an hour.

Every Thursday, auto dealers gather here at the 12-lane auction arena at Manheim's Greater Tampa Bay Auto Auction to buy and sell used cars. On a recent one, 2,451 cars passed through in just four hours. About 75 percent of them were sold, all to licensed dealers. The public is not allowed, and the auction is adamant about keeping them out.

It is here that prices for used cars are set industrywide. Dealers typically take these cars back to their lots and mark them up $2,000 to $3,000. They make profits of $875 to $2,000 per car, depending on how long they keep them on their lots, according to the National Automobile Dealers Association.

In the past month, dealers at the auction have noticed a dramatic price increase of 10 to 25 percent. Auction general manager Tim Janego, 39, hears it everywhere he goes.

"This is crazy," Steve Mason, owner of Mason Brandon Motors, said to Janego as he stood between two rows of cars entering the auction bays. "It's always good in January or February but never like this. Everyone is saying that they're having great success in the used car market."

Later, an auctioneer runs up to Janego with a smile and shows him the papers on a 1986 Gran Torino Special he sold for $19,000. "It wasn't worth that when it sold new," Janego said. There are a number of reasons for the price jump. More credit-challenged customers have been able to get loans for used cars, so the demand for them is up. At the same time, the number of used cars on the market has declined because of a huge dropoff in cars with expired leases, one of the major sources of used cars, said Tom Webb, Manheim's chief economist in Atlanta.

The auto auction is the main way dealerships buy and sell used cars around the country. They became popular after World War II, when new car production was slow to resume and used cars grew in demand.

Today, there are 360 auto auctions around the country, including 25 in Florida - the most of any state in the country. Dealers say they come to Florida because the state's cars don't take as much of a beating from the weather as cars up north.

Some of the lanes at many auctions are simulcast over the Internet, allowing a buyer in an office in Wichita to make a bid at the same time as the buyers standing next to the car.

At the Tampa auction, some 1,900 dealers from around the country, most of them men, bustled around the 12 lanes of moving cars, trying to fill in the holes in their existing inventories and sell cars that have sat on their lots too long. These cars come from police fleets, expired leases, repossessions, trade-ins or dealer lots.

The auction takes place in a 23,000-square-foot rectangular building with 12 open bays. There are 400 workers moving as many as 2,500 to 5,000 cars through the lanes in an assembly-like rotation that resembles the choreography of airport baggage handling.

It is a private but very loud world with a set of rules and a language all its own. Kind of like a high-stakes poker game, where nobody wants to reveal what they're doing and bluffing is commonplace.

Al Armstrong, or Big Al as he is known, buys cars for 47 dealers around the country. He has been an auto broker for 30 years. He won't say what he makes on his cars, but wholesalers who buy at auction and sell to car lots make about $200 per car on average, according to industry data.

Last week, he bid on 60 cars for 14 different dealers and bought 16 cars. He sold another eight cars.

He's known for getting out on the lot about 6 a.m. the day of an auction, kicking the tires and feeling the edges for rough spots to see whether a car has had a new paint job.

Other dealers know Armstrong, 65, does this kind of legwork so when he shows interest in a car, they tend to get interested. This bidding can inflate the prices of Big Al's cars. So when he goes to buy, he hides just outside the building. When his car comes down the lane, he peers around the wall and looks at the auctioneer deadpan. Sometimes his strategy works. Sometimes it doesn't. When the price of the car climbs over the price he has in mind, he turns and walks away.

Stanley Glauser, owner of a lot in Sarasota and a dealer since 1964, has a different style. With a shock of white hair and heavy gold chains around his neck and wrist, he looks at the cars beforehand, then hangs out in the lanes leading to the auction block.

With him, Glauser said, it's just a feeling. When he gets it, he'll follow the car as it proceeds to the auction block and bid on it.

Unlike many of the others, he's out in the open about his bidding. He'll hold his fingers up, trying to let the auctioneer know what he will pay. Crossing two fingers, like you would if you were fibbing, means he's willing to pay $8,000.

"I want them to know I'm bidding," he says. "I want them to get that I'm strong."

He bought a 2002 GMC van, a 2002 Chevy van and an Impala at the auction. Before he'd even gotten home, he'd sold the two vans over the phone to a company that transports rental dishwashers to restaurants.

[Last modified March 3, 2005, 01:21:21]