published Friday, February 21st, 2014

Sold!: Auto Auction of Chattanooga bought by Dealer’s Auto Auction

Mike Harmon spots bidders Thursday during an auction at Dealer's Auto Auction of Chattanooga.
Mike Harmon spots bidders Thursday during an auction at Dealer's Auto Auction of Chattanooga.
Photo by Angela Lewis.
  • photo
    Bidders gather around a TVA vehicle as it is auctioned Thursday at Dealers Auto Auction of Chattanooga.
    Photo by Angela Lewis.
    enlarge photo

IF YOU GO

What: Public automobile auction

When: Every Tuesday, 6 p.m.

Where: Dealer’s Auto Auction of Chattanooga, 2120 Stein Drive, Chattanooga

How much: General admission is free. Bidding badges are $5 and are required to test drive and bid. Auction and state fees apply to all sales.

Mike Harmon’s outstretched hand opens before you, his wide eyes asking if you have the guts to go another $100.

“Two?” he asks. “Two?”

His eyes say you can pay $2,200.

His fingers twitch, fishing for a nod, even a subtle glance from you saying you’re in.

For two-and-a-half hours Thursday morning it went on. Representatives from 300 area car dealerships packed in around four drive-through auction blocks at Dealer’s Auto Auction of Chattanooga, where used cars from dealerships, government entities and leasing outfits come to be sold at wholesale prices — and as-is, if you’ve come with money. Things move too quick, 30-45 seconds per vehicle, and financing happens on your own time.

It was loud. Exciting. The cologne of 300 salesmen mingled with car exhaust and an oil drip, creating an aroma unique to a place like this. Some bidders started nervous pacing. Others were glued to the phone.

You can’t get all this on the Internet: “The thrill of buying,” Ricky White called it.

It’s the electricity in the air when the auctioneer asks who will meet him at $1,500. It’s a ringman like Mike Harmon in your face, reminding you that in 30 seconds, it’ll be too late.

White enjoys it. He goes to auto auctions five days a week on behalf of Jacky Jones Ford in Columbus, Ga. He’s been in the car-buying business for 30 years.

No question, he said, the Internet is convenient. But it can’t give you the smell of a car’s insides. Or the tiniest detailing or ding that makes all the difference to customers.

Plus it just feels good sometimes to beat out the other guy. White has won his share of bidding wars. But he’ll turn right around and tell you he’s lost his share, too.

“I’ve made a lot of money,” he said, “and lost a lot of money, too. You win some and you lose some.”

Auction recently purchased

Dealer’s Auto Auction of Chattanooga operated 18 years as Chattanooga Auto Auction before it was acquired by a larger chain last month.

The five-member Dealer’s Auto Auction conglomerate is based in Memphis and owned by David Andrews. He calls Chattanooga a great town with a lot of potential to boost the auction chain, especially since it fits well geographically between Murfreesboro and Huntsville, two cities which already have Dealer’s Auto Auction sites.

Casey Tuggle, general manager of the Chattanooga auction, also thinks the acquisition is good for the Chattanooga auction. The Dealer’s Auto name has already drawn a major client in GE Capital, a national financer that helps companies liquidate fleet vehicles.

Thursday was GE Capital’s first ever showing at the Chattanooga auction. Tuggle said each week the auction tries to land a major draw. This week it was GE Capital, but next week may be TVA. Normally those big names appear at the auction about once a month.

Although the Chattanooga auction now has sister locations in Hunstville, Mobile, Memphis and Murfreesboro, Tuggle said it will not share inventory with them or vice versa. Each site will act independently.

He thinks Chattanooga has plenty of inventory and clients to stand on its own, especially as it adds more major clients.

This week alone, the auction moved 750 vehicles through the lines and sold 400 of them. Although the auction allows for a quick sale of vehicles, some cars don’t fetch enough from bidders to satisfy the owners and no sale is made.

Tuggle said auction fees are on a sliding scale, not a percentage system. There’s a minimum $35 fee to list vehicles at the auction, and that can go to a maximum of about $350, depending on how much the vehicle sells for.

Buyers pay those same fees, he said, based on the same sliding scale.

Part of the reason the Chattanooga auction is able to stand on its own feet is its history. The auction started up in 1996, tucked away behind the trees off Shallowford Road. It’s operated at the same location since.

The auction is deliberately away from the road, because only recently public auctions have been held at the site. The entire 55-acre compound is double-fenced, the outer layer chainlink and razor wire, the inside electric.

“When you have millions of dollars worth of cars,” said Tuggle,” you want to stick them as far behind the tree line as possible.”

Looking at all those cars, trucks and vans Thursday morning, he noted how or why most of the vehicles wound up headed to auction.

Most come from dealerships. A Ford lot may not want a Nissan trade-in, he said.

Or maybe it’s the other way around. Regardless, dealers, rather than try to sell the vehicles, take them to auction, where they’re often sold to other dealers. That’s about 60 percent of the auction’s business, said Tuggle.

Another 30 percent comes from fleet vehicles and leasing companies. The final 10 percent comes from individuals and government agencies. The auction hosts public auctions every Tuesday.

To accommodate all those vehicles — and the ones the auction stores for area dealerships and leasing firms — Dealer’s Auto Auction of Chattanooga has a bountiful 2,250 space parking lot on-site.

Driving the lot on Thursday, Tuggle pointed out a Chevrolet Volt near the back of the property that has not moved in at least two years.

It’s a brand-new car. Its owners, a mega financing company, have just forgotten they left it stored in Chattanooga.

“Sometimes they forget they have a $40,000-dollar sedan sitting on our lot,” said Tuggle. “We try to give them a gentle reminder that it’s here.”

Dealer’s Auction going forward

The professional ringman Mike Harmon has developed his own style through the years, “often imitated, but never duplicated,” he said Thursday afternoon, his gray hair slicked back into a ponytail, his ballcap gone now that the auction was over.

Scott Richardson, chief operating officer at Motor Acceptance Corp. of Columbus Ga., had brought 72 cars to auction and 69 of them sold. He was in Harmon’s lane.

“I’m thrilled,” said Richardson. “This was the best auction sale we’ve ever had.”

He said this is prime time for used car sales because it’s tax season.

“Used car lots are selling everything they can get their hands on,” he said.

Nearby and leaning in an open bay door, Harmon gestured around the emptying auction hall. The fever pitch was gone and buyers milled around, left with decisions made in the crescendo of bidding.

It had been a good morning sales wise, not just for Richardson.

That’s the way it’s going to be around here, said Harmon.

He thinks the Dealer’s Auto acquisition is the catalyst which will take the Chattanooga auction to the next level.

“This thing’s going to blow up,” he said. “You just wait and see.”

Contact staff writer Alex Green at agreen@timesfreepress.com or 423-757-6480.

about Alex Green...

Alex Green joined the Times Free Press staff full-time in January 2014 after completing the paper's six-month, general assignment reporter internship. Alex grew up in Dayton, Tenn., which is also where he studied journalism at Bryan College. He graduated from Rhea County High School in 2008. During college, Alex covered the city of Graysville and the town of Spring City for The Herald-News. As editor-in-chief of Bryan College's student news group, Triangle, Alex reported on ...

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