S TAT E A F F I L I AT E
independent automobile dealers association
ALABAMA
A L A B A M A I N D E P E N D E N T A U T O M O B I L E D E A L E R S A S S O C I AT I O N D E C E M B E R 2 0 17
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V I S I T U S AT W W W. A L A B A M A I A D A .O R G
ASSOCIATION NEWS
INSIDE
04..............................................Scholarship Recipient Update 06................................................AIADA Auction Coupon App 06.................................................New Alabama Title System 10..................................................National Policy Conference 13....................................... Are You Making Too Much Profit? 14.........................................Improving Your “About Us” Page 18............................................................. Building New Roads
WHAT’S NEW
SPECIAL FEATURES: DISASTER RELIEF
NIADA and Spireon recently teamed up to provide disaster relief to those directly impacted by hurricanes Harvey and Irma. Partnering with the NIADA Foundation Disaster Relief Fund, Spireon is contributing $100,000 through the end of the year to help with recovery. Spireon is also helping customers get their businesses back up and running through data on their NSpire platform. To learn more, check out the story on NIADA.tv’s Special Features channel.
ADVERTISERS INDEX
Ace Motor Acceptance..........................................................7 AmTrust Financial.................................................................IFC ARA GPS..................................................................................3 Black Book...........................................................................IBC DAA Dealers Auto Auction Group, LLC..................................5 Manheim..................................................................................9 NextGear Capital...................................................................12 STARS GPS..............................................................................8 VAuto......................................................................Back Cover
OFFICE
120 Vulcan Road Birmingham, AL 35209 Phone: (205) 942-1000 Fax: (205) 942-3565 Website: www.alabamaiada.com To become a member of AIADA, please call (800) 239-2423
NIADA HEADQUARTERS
NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 The Alabama Independent Automobile Dealers Association is published bimonthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the authors and do not necessarily represent the views of AIADA or NIADA. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2017 by NIADA Services, Inc.
NEW MEMBERS Welcome Andy Watford AJ’s Unlimited Auto LLC Dothan
Shane Denney Denney Automotive LLC Talladega
Cassius Lanier/George Lake Lanier Automotive LLC Tuscaloosa
Julian Littleton Auto Maxx LLC Daphne
Steven & Christy Stoves Diamond Auto Sales LLC Bessemer
Heather Matos Next Owner Automotive LLC Tuscaloosa
Nathan Davis Car Country Inc. Graysville
Harold Burns Downtown Car Care Mobile
Kip Hammitt Triple A Wholesale LLC Eight Mile
Jamie Brice Cars On Demand Birmingham
Chris Nation J And J Motors Mt. Olive
J. T. Toombs Jr. Cowboy’s Auto Sales & Rentals #7 Sylacauga
Salman Sewani Julilee Motors Chelsea
Richard Shirley Tupelo Auto Auction DBA Richard Shirley Gordo
ASSOCIATION NEWS
BOARD OF DIRECTORS President Todd Oden Birmingham Dpip.ptp@aol.com
Chairman of Board Pokey Brimer Oxford pbrimer6@gmail.com
Bryan Cooper Huntsville Tim Duke Birmingham
President Elect Chad Tillery Jemison cktillery@hotmail.com
Executive Director Randy Jones
Jay Saul Jasper
Vice President Robert Case Hartselle robertsautosales1@ live.com Secretary/Treasurer Roderick Underwood Bessemer roderickunderwood@ hotmail.com
DIRECTORS Barry Searcy Muscle Shoals John Dunn Sylacauga Lance Turner Anniston Willie Colvin Tuscaloosa
Randy Little Satsuma Erek Yarbrough Pleasant Grove Chris Mundy Columbiana
Randy Crump Jasper
Chris Mullinax Hoover
Kelly Steely Hoover
Ricky Young Boaz
Jerry Giles Tuscaloosa Roderick Underwood Bessemer
Patrick Graves Moody
STATE MAGAZINE MGR./SALES
Troy Graff • troy@niada.com EDITORS
Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT
Christopher Hanley • chris@niada.com PRINTING
Nieman Printing
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December 2017 / AIADA
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ASSOCIATION NEWS
BY RANDY JONES
ABIGAIL GREENBERG Scholarship Recipient University
of Alabama’s Homecoming Queen Abigail Greenberg, a recipient of AIADA Ladies Auxiliary’s 2014 scholarship, is a senior nursing major from Montgomery, Alabama. Abigail is the daughter of Jesse and Robin Greenberg and granddaughter of Mitchell and Sharon Allen with Mitchell Allen Motor Company in Montgomery. Abigail has been seeking to better her community since the moment she stepped on the Capstone at University of Alabama. Her freshman year Abigail co-founded Alpha Mu Omega, a Greek community service fraternity. AMO gives Greeks an opportunity to come together and help the local community and the state of Alabama. One of the most notable events of Abigail’s work with AMO was the Dodgeball Tournament paired with IFC to benefit the B+ Foundation. They had over 17 Greek organizations participate and were able to raise over $3,000 for B+. Other projects of Alpha Mu Omega include Habitat for Children’s Hospital, donating over 600 Thanksgiving meals to Tuscaloosa One Place, Jesus Way Homeless Shelter, and so much more. They are also donating trick or treat goody bags to Tuscaloosa One Place for the local kids. Abigail’s work on the executive board of B+ has not gone unnoticed. She has served as the campus relations director, making her the main contact for the Greek houses, as they are the chosen philanthropy for the Greek Programming Board. Her first event under this position was World Cancer Day. In just one day, the organization raised almost $7,000. As of October 2, B+ had raised $53,000. Abigail has also been the deputy vice president of student affairs for two terms. She has advocated for sexual health awareness, raised money for Honor Flight, and is currently helping with Domestic Violence Awareness Month. Last spring, Abby was elected the vice president of Mortar Board. She worked with them to plan rose sales during graduation where all proceeds went to their endowment scholarship. She is also a member of Order of Omega, where she was awarded Junior of the Year. This is a huge accomplishment as she was recognized for her excellence in academics and her contributions to the Greek community and across campus. Abigail was also named the Lambda Sigma National Scholarship recipient due to her passion for philanthropy and her
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ASSOCIATION NEWS
ABIGAIL HAS BEEN SEEKING TO BETTER HER COMMUNITY SINCE THE MOMENT SHE STEPPED ON THE CAPSTONE AT UNIVERSITY OF ALABAMA. HER FRESHMAN YEAR ABIGAIL CO-FOUNDED ALPHA MU OMEGA, A GREEK COMMUNITY SERVICE FRATERNITY. AMO GIVES GREEKS AN OPPORTUNITY TO COME TOGETHER AND HELP THE LOCAL COMMUNITY AND THE STATE OF ALABAMA.
leadership through the organization. She was named the White Rose Sweetheart for Sigma Tau Gamma and then later was named the National White Rose Sweetheart Homecoming Queen. Her resume is overflowing with philanthropy, and she has the passion to make a difference. Congratulations to Abigail for her compassion and dedication to making her community a better place.
LADIES AUXILLARY UPDATE Thank You Happy Fall to everyone from the ladies auxiliary! As many of you know, the ladies auxiliary is a huge part of AIADA. We would like to give a huge thank you to all of you who contributed to us this year in any way, shape or form. Through your contributions we were able to help the Make a Wish Foundation grant over five children’s wishes. That would have never been possible without the help of car dealers, auto actions, and individuals through their generosity with their time and money. Not only have we helped Make a Wish, we also have helped with individual families in our surrounding areas. I am excited to share with you the difference we have made this year with your continued efforts and help. As your president of the ladies auxiliary I look forward to serving you another year. Thank you, Gina Oden
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Tuesday at 9:00am 877.232.0259
Wednesday at 2:00pm 615.217.2848
Thursday at 9:00am 423.499.0015
Thursday at 9:00am 901.480.4250
Thursday at 9:30am 251.348.8855
PRODUCTS AND SERVICES
BY RANDY JONES
ARE YOU USING YOUR AIADA AUCTION COUPON APP? Don’t Miss Out!
Join all these happy dealers using the AIADA Auction Coupon App! The AIADA Auction Coupon App is becoming a big hit, and it is easy to use. Dealer after dealer is getting hundreds and even thousands of dollars back in their pocket. This is real money you get back from many auctions across the Southeast, and now it is moving nationwide! Get your AIADA Auction Coupon App today! Call us at (205) 942-1000. We will have you up and going in less than two minutes. Here is a list of auctions you can start using today!
*Tuscaloosa New Members $310,00, Renews at $280.00 Monthly ABC Auction/Americas Auto Auction - Birmingham $90.00 ADESA Auto Auction - Birmingham $100.00 America’s Auto Auction - Atlanta $75.00 Bama Auto Auction - Fort Payne $50.00 Dealer Auto Auction - Huntsville $50.00 Dealer Auto Auction - Memphis $50.00 Dealer Auto Auction - Mobile $50.00 Dealer Auto Auction - Murfreesboro $50.00 Dealer Auto Auction - Chattanooga $50.00 Deanco Auto Auction - Dothan $50.00 Drivers Way - Pelham $75.00 Insurance Auto Auctions - Birmingham $50.00 Insurance Auto Auctions - Dothan $50.00 Insurance Auto Auctions - Huntsville $50.00 Long Beach Auto Auction - LongBeach, MS $50.00 Manheim - Birmingham $50.00 Manheim - Georgia $100.00 Manheim - Pensacola $50.00 Mid-South Auction - Pear, MS $100.00 Montgomery Auto Auction - Montgomery $50.00 MCAA Music City Auto Auction - Spring Hill, TN $50.00 Oakwood’s Arrow Auto Auction - GA $50.00 Shoals North Alabama Auction - Muscle Shoals $50.00 Tallahassee Auto Auction - Tallahassee, FL $50.00
Off Buy/Sale One Per Month Off Buy/Sale One Per Month Off Buy/Sale Three (3) Per Month Off Buy/Sale One Per Month Off Buy/Sale One Per Month Off Buy/Sale One Per Month Off Buy/Sale One Per Month Off Buy/Sale One Per Month Off Buy/Sale One Per Month Off Buy/Sale One Per Month Off Buy/Sale Three (3) Per Year Off Buy/Sale One (1) Per Year Off Buy/Sale One (1) Per Year Off Buy/Sale One (1) Per Year Off Buy/Sale One (1) Per Year Off Buy/Sale One Per Month Off Buy/Sale Ten (10) Per Month Off Buy/Sale Five (5) Per Year Off Buy/Sale One Per Month Off Buy/Sale One Per Month Off Buy/Sale One Per Month Off Buy/Sale One (1) Per Year Off Buy/Sale One Per Month Off Buy/Sale One Per Month
Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total
Yearly $1,080.00 $1,200.00 $250.00 $600.00 $600.00 $600.00 $600.00 $600.00 $600.00 $600.00 $225.00 $50.00 $50.00 $50.00 $50.00 $600.00 $1,000.00 $250.00 $1,200.00 $600.00 $600.00 $50.00 $600.00 $300.00
DMV NEWS
NEW ALABAMA TITLE SYSTEM ETAPS Being Phased Out
The Motor Vehicle Division has begun implementation of the new Alabama Title System to replace the Electronic Title Application Processing System. ETAPS will continue to be used to complete title applications that were started prior to ALTS implementation but will eventually be phased out. ETAPS data will continue to be available for queries and will also be available through ALTS. Alabama county licensing offices began using ALTS on November 1. Shortly after this date, the Motor Vehicle Division began working with other designated agents
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(dealers, financial institutions, insurers, etc.) to migrate them to the new title system by the end of the calendar year. To begin using ALTS, each dealer must migrate their ETAPS account to the new ALTS environment. The migration process will automatically move your existing ETAPS account information. The link to migrate your ETAPS account will be available on the Motor Vehicle Title Registration & Insurance Portal dashboard at www.mvtrip.alabama.gov. The ALTS Migration Manual as well as training videos are also available on the MVTRIP site and will provide information regarding how to access the new system and utilize certain features. TEMPORARY TAG CHANGES Shortly after implementation of the Alabama Title System, designated agents may begin utilizing a new system within
MVTRIP to order and issue temporary tags. Legislative Act 2017-242 was signed into law by Governor Ivey on May 9, 2017. Under this act, Section 32-6-211, Code of Alabama 1975, was amended to allow dealers who are designated agents of the department to issue temporary tags to owners of motor vehicles being permanently licensed in Alabama or any other state. The material for the temporary tags and registration will continue to be provided by the Motor Vehicle Division at a cost of $2.25 each. Temporary tag orders will be submitted electronically through the new system and will allow designated agents to pay using their current bank account information on file within ALTS or by credit card. For any questions, please feel free to contact the Motor Vehicle Division at 334-242-9000.
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AUCTION NEWS
LOUISIANA’S 1ST CHOICE MANAGER BECOMES CAR CERTIFIED Mike McCollum
Completes Certification Louisiana’s 1st Choice Auto Auction recently announced fleet lease manager Mike McCollum is now CAR certified by
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IARA. International Automotive Remarketers Alliance has created an education program over the last 10 years to expand overall knowledge of the remarketing industry. A Certified Automotive Remarketer understands all aspects of automotive remarketing, including remarketing channels, pre-sale activities, actual sale activities, post-sale activities, legal/ethics, and terminology. Mike completed his certification testing in one year by studying and passing exams in the midst of networking at industry conferences. He joins an elite group of industry professionals as the 140th person
certified by IARA. In addition to this certification, Mike has completed the NAAA Condition Report Writing/ Structural Damage Policy training and the NAAA Leadership Institute training. Louisiana’s 1st Choice Auto Auction managing partner John Poteet said, “I want to congratulate Mike on his recent accomplishment and certification. We believe that education and training of our employees is integral to our success as an auction. The CAR certification indicates to our institutional clients how serious we are about protecting their investments and ensuring the highest standards in our industry are applied to everything we do. Mike exemplifies the professional approach we take to everything we do at Louisiana’s 1st Choice Auto Auction.” Mike has been a member of the 1st Choice team for 11 years, working in a variety of roles including vehicle registration specialist, vehicle registration manager, marketing specialist, e-business coordinator, and now fleet lease manager. His ongoing industry training makes him an invaluable asset to the auction and its institutional customers. Mike asserts his certification has broadened his understanding of the remarketing process, for both the auction and customer perspective. This will ensure a higher level of service to the institutional customers who partner with Louisiana’s 1st Choice Auto Auction for their remarketing needs. The auction congratulates Mike on earning this mark of distinction as a Certified Automotive Remarketer. Independently owned and operated, Louisiana’s 1st Choice Auto Auction is located in Hammond, Louisiana. Led by managing partner John Poteet, the team of auction professionals serves the entire Gulf Coast Region and a national online buying base. Dealers gather every Tuesday at 8:30 a.m. in six lanes and online to bid on a consignment of over 700 vehicles, including vehicles from ARI, Consumer Portfolio Services, United Auto Credit Corporation, PAR North America, Hancock Bank, Crescent Bank, First Investors Financial Services, Prestige Financial, and a wide variety of dealer trades. Auction inventory is included on Edge Pipeline, where customers may view detailed condition reports, market report information and participate in online sales. They are also an OVE Signature Auction with a dedicated online sales team. Louisiana’s 1st Choice Auto Auction is a member of the National Auto Auction Association, Independent Auction Group, and ServNet. They are represented by TPC Management. www.alabamaiada.org
ASSOCIATION NEWS
BY RANDY JONES, AIADA EXECUTIVE DIRECTOR
2017 NIADA NATIONAL POLICY CONFERENCE
The AIADA Carries 12 to Washington, DC
In September, 12 representatives from AIADA traveled to Washington, DC, along with other automobile dealers associations from across the nation, to participate in NIADA’s National Policy Conference and Day on the Hill. This year we had five main concerns. The tax reform process: On September 29, 2017, Donald Trump unveiled the blueprint of his ambitious plan to overhaul the U.S. tax system. There are a lot of good tax cuts for American companies and the American public. However, we took our concerns to Capitol Hill. We believe Congress should reduce rates for all small businesses, particularly pass-through entities like S Corporations and partnerships. We want Congress to ensure small businesses do not pay higher taxes than large corporations. This will make an unfair playing field as small businesses would not share the same growth as larger corporations Eliminating the deductibility on interest paid (floor plan interest): We could lose the tax credit on interest paid, for example floor plan interest. This was left out of the framework of this tax reform blueprint process. We met with and discussed this with all of Alabama’s legislators and/or their staff with great compassion and understanding, but we found a star in Representative Martha Roby’s office. Ann Marie Harrison, legislative assistant to Roby, has great connections with the Ways and Means Committee. This committee works directly with this type of issue. Ann Marie listened to our concerns, and she made lots of notes. She had many questions for us about how we purchase inventory and how long we held our vehicles before selling. Our dealers gave firsthand knowledge of buying vehicles. They explained the need to visit several auctions to find the vehicle you need and the conditioning process before offering the vehicle for sell. Roger Fields with DAA Auction in Athens/Huntsville gave her the best examples of how important it is for the dealer to have a floorplan to purchase their inventory. Roger explained some weeks you may need to purchase two vehicles but only find one, and some weeks you need only one but find two. He showed Ann Marie why a credit line was so important. Footnote: None of this could have been achieved by email or phone. It took a face to face meeting of dealers and vendors for these discussions. This is one of the only ways for Washington, DC, to understand our industry’s needs. Selling vehicles with open automotive recalls: We do not want national legislation prohibiting our dealers from selling used vehicles with open recalls. From August 2017 issue of Auto Remarketing: Seven Democratic lawmakers are trying again to push legislation that would prohibit the retailing of vehicles with an unfulfilled recall, a plan prompting the two largest dealership associations to reiterate their objections and explain the potential unintended consequences.
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Amid all the hubbub over healthcare and the revolving door at the White House, a proposal dubbed the Used Car Safety Recall Repair Act surfaced on Capitol Hill as lawmakers leveraged reports over another potential fatality involving faulty Takata airbags. While both the National Automobile Dealers Association and the National Independent Automobile Dealers Association want to retail safe vehicles, the groups fear this measure would hamstring dealers and impact owners significantly. “NIADA shares the goal of 100 percent recall completion rates and supports public policies designed to achieve that goal. However, overbroad legislation prohibiting dealers from selling any used motor vehicle with any open recall does not move us toward that goal,” said NIADA senior vice president of legal and government affairs Shaun Petersen. “This legislation treats all recalls the same – whether safety related or not – and does nothing to manufacture the parts necessary to repair recalled vehicles or entice owners to take a recalled vehicle to a franchise dealership for repair,” Petersen said. “But most important, it harms consumers by diminishing the trade-in value of their recalled vehicles by an average of $1,210 – and often upward of $5,000 – and would likely force dealerships to not take those vehicles in trade at all. “Requiring dealers to ground vehicles for any recall does not justify that economic loss, particularly when the National Highway Traffic Safety Administration admits not every vehicle with an open recall needs to be grounded immediately. NIADA stands ready and willing to work with members of Congress to find common-sense solutions to improve recall completion rates. However, this legislation – which was rejected numerous times by the previous Congress – is not the answer.” Led by Sen. Richard Blumenthal of Connecticut and Sen. Edward Markey of Massachusetts along with Rep. Jan Schakowsky of Illinois, supporters of the Used Car Safety Recall Repair Act fear any owner of vehicle under recall will suffer the same tragic fate as the dozen individuals fatally wounded by faulty Takata airbags. “This common-sense bill will protect used car buyers from driving a ticking time bomb off the lot and onto our roads,” Blumenthal said. Schakowsky added, “It’s already illegal to sell a new car or offer for rent a car under recall. Our bill will give used car buyers the simple assurance that known defects have been fixed before they drive the car off the lot.” NADA spokesman Jared Allen confirmed many of the points Petersen raised, including how much trade-in values can suffer. “When recalled vehicles awaiting repair parts – including vehicles that the engineering experts at the
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NHTSA and the automakers have determined are acceptable for consumers to drive – can’t be sold, the market instantly devalues those vehicles, resulting in a massive trade-in tax of, on average, $1,210 per vehicle, according to J.D. Power.” We discussed this issue with our legislators and/or their staff. Most agree this is a manufacturer’s problem. It is not fair to ask the consumers to pay for a manufactures mistake. Footnote: The stopping of sales on all vehicles with open recalls would affect the used car owner, the used car buyer, the used car dealer, the auctions, floorplan companies and most our current vendors. This would have a devastating effect on the automotive industry. Repeal the CFPB’s anti-consumer ban on mandatory arbitration clauses: The Consumer Financial Protection Bureau issued a rule prohibiting banks, credit card companies, and other financial institutions from including mandatory arbitration clauses in new contracts. The CFPB claims to have struck a blow for consumer rights, but the truth is, this rule would be a boon to frivolous lawsuits – and a drag on our economy. When you get a new credit card or open a savings account, you likely sign a contract stipulating that should a dispute arise between you and the company you both agree to submit it to an independent third party known as an arbitrator. Arbitration is 12 times faster than litigation – according to a study by the CFPB itself – and, on average, results in bigger awards for the people who bring disputes. Despite this, the CFPB maintains arbitration is too time-consuming, too expensive, and too tilted toward big companies. It argues class-action lawsuits are the proper vehicle for consumer justice. Under this new rule, companies would be prohibited from including mandatory arbitration clauses in new contracts, which would prevent consumers from filing class-action lawsuits. The rule would also require companies that maintain contracts with arbitration clauses to submit to the CFPB detailed information regarding claims, awards, and other related materials. In other words, firms would have to suit up for the oncoming financial assault of far more class-action lawsuits. Just 13 percent of class-action lawsuits actually result in a benefit to consumers – and the average payout is roughly $32. Plaintiff lawyers, meanwhile, earn an average of $1 million per settled case. In other words, trial lawyers walk away with millions while consumers are stuck paying new fees to cover the costs. And companies aren’t going to pay for arbitration if they’re also open to class-action lawsuits – it defeats the whole purpose. So consumers will lose out on a superior option. We must scrap the Anti-Consumer Arbitration Rule. This rule would result in increased costs to our dealers and our consumers. The CFPB must be restructured to be more accountable to Congress and the public: The Consumer Financial Protection Bureau – the brainchild of then-Harvard law professor Elizabeth Warren created in the wake of the 2008 financial crisis as part of the Dodd-Frank Act – may finally gain some basic requirements of accountability and transparency as Congress moves forward with a significant rewrite of DoddFrank rules. The law tasked the CFPB with supervising depository institutions – banks, thrifts and credit unions – with more than $10 billion in assets. It also has supervisory powers over some other financial services, including mortgage brokers,
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mortgage originators and servicers, student loan companies and payday lenders. Established as an independent executive agency – with a single director who can only be dismissed for cause and with funding coming automatically from the Federal Reserve, rather than congressional appropriations – the CFPB’s structure has always been constitutionally suspect. We want a five-member, bipartisan commission with a budget subject to Congressional Appropriations. We discussed this with every congressional member/staff we met. They all agreed. The National Policy Conference is already being planned for 2018 – don’t miss this awesome opportunity to come and be a part. This shows our strength in numbers of active dealers, our interest in how our government is run and our concern for America. This year’s National Policy Conference had more impact on Washington, DC, than any time in the past. Please join me in giving a special thanks to everyone listed below who took the time to travel to Washington, DC. We studied the bills that needed our attention, found solutions that would help everyone, and attended many meetings to learn the ways to help reach our goals. These guys walked for miles, getting up early and staying up late, working on the best ways to achieve our goals. They left their families and businesses behind to help us show our legislators we do care about our federal government and we want America to be the best nation in the world – “One nation under God, with liberty and justice for all.” Never forget “Alabama is the place for your American Dream to come true!” • Todd Oden, MTO Motors, Birmingham, Ala. • Paul Claborn, Wholesales Cars.com, Albertville, Ala. • Pokey Brimer, Pokey Brimer Auto, Oxford, Ala. • Chad Tillery, Ellison Auto Sales, Inc., Jemison, Ala. • Robbie Case, Robert’s Auto Sales, Hartselle, Ala. • Anthony Underwood, Anthony Underwood Automotive, Birmingham, Ala. • James Wilabay, CVC Auto Sales, Albertville, Ala. • Roger Fields, DAA Auction, Athens/Huntsville, Ala. • Kevin Thompson, Stars GPS • Jay Holland, Alabama Public Television/Radio • Henry Mullinax, Mullinax Auto Sales, Inc, Oxford, Ala. Thanks for all your support! This is everything in a nutshell: I believe most of our legislators want the best for our nation. Emails, phone calls and letters are not enough. We had to meet these legislators and/or their staff to explain how these bills, rules or pending legislation would affect our country. Last session our legislators had over 5,000 bills introduced. It is impossible to study all these bills, and make sure it is what America needs. This is where we came in. With great enthusiasm, our delegation met with and discussed how each bill would affect our industry. Sometimes we suggested changes in the bills, and sometimes asked for the bill to be killed. It was great to see the interaction in these meetings. Everyone learned and most agreed. Because of these meetings, the automotive industry will grow in Alabama and in America. Our legislators want the best for Alabama and want to fully understand how these bills affect us. Washington, DC, is listening. They see the aggressive nature of the independent dealers. Our legislators have seen what we expect from our past visits, and they know what to expect. We want what is best for America, and will settle for nothing less! This is the independent dealers of America making America strong again!
December 2017 / AIADA
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BHPH PERSPECTIVE
BY CHUCK BONANNO
BUY HERE-PAY HERE: WHERE DO WE GO FROM HERE? Industry Outlook In late 2008 we witnessed a financial meltdown in this country spurred on by the collapse of subprime mortgages and mortgage securities. This event created the “Great Recession.” While this was all bad news for our nation’s economy, a funny thing happened in the Buy Here-Pay Here world. There was, for lack of a better term, a renaissance for Buy Here-Pay Here dealers. During the next few years, dealers had the pick of cars and the pick of customers as there were few auto financing options for credit challenged customers. The economy also created millions of poor credit customers. This environment led to growth opportunities for the BHPH dealer. It also created a situation where customers felt job opportunities were limited – so they stayed employed – and where they recognized credit options were limited so they took care of their current credit – car loan or lease – much better. And then a funny thing happened. Wall Street and venture capitalists were faced with limited high yield opportunities as mortgages became nearly impossible to originate. They looked to other high yield investments and they discovered the deep subprime and subprime automotive finance sector. Beginning in 2013, heavy investments were made in this space to capture short term high yield returns. So the frenzy began. Buy Here-Pay Here dealers were no longer the best transportation option as these banks and finance companies began mining deeper and deeper. Since this phenomenon began, credit challenged customers have been able to find financing including far newer and far more expensive cars. BHPH dealers began losing market share and the quality of customer degraded even further. Dealers have experienced many “cycles” of strong subprime participation by banks in the past but this cycle has been not only deep but has endured much longer. The cheap cost of capital and the lack of other high ROI markets have created a very long cycle. This is not to say that subprime auto finance will go away – it never does. It does, however, expand and contract. I read everything I can about the performance of these bank portfolios and Asset Backed Securities. All signs point to
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a retreat but it hasn’t had a major impact yet. It seems every time a large player pulls back another one enters. I am optimistic we will begin seeing major changes in this market over the next 12 months. This is high risk paper and extremely hard to collect. Nobody knows that better than BHPH dealers who work extremely hard to create relationships and keep people driving. With that said, there will be a period of “disruption” where customers who need transportation find financing options have shrunk and the best option is dealer financing. Customers have always wanted the “best car” they can finance. So where do we go from here? We need to be ready for this market shift. That requires sufficient capital, a marketing plan, quality product backed with real warranties, a superior sales experience and, most importantly, a loan servicing experience where the customer feels and sees value. Capital is more important than ever as we have experienced tremendous rises in vehicle cost coupled with diminishing down payments. This leads to higher and higher cash in deal, which requires more dealer investment or more borrowing to keep up. If you have adequate capital, you have cleared the first hurdle. The next challenge is marketing to customers. We have witnessed a major shift in how we attract customers. Many of the dealers in the 20 Groups I moderate have gone away from traditional media partially or totally in favor of digital marketing. They have also become much more transparent with message and pricing. Consumers demand it. The next step is the dealership experience. Customers are shouting they want digital communication and desire the ability to get credit before coming to the dealership. You need to create an online shopping experience and a simple dealership visit. You need to present your program as a value proposition that clearly states benefit to the customer and you must prove the relationship will be ongoing and not end at vehicle delivery. You will also need to show your customer you care after the sale. You need to have programs that keep cars running and keep customers paying. This pays huge benefits down the road and will be evidenced by the number of customer referrals and the number of repeat customers. There is a great opportunity if you are prepared and if you are serious about helping the “unbankable” customer. There will be more and more customers in our wheelhouse in the future. Good luck. CHUCK BONANNO is the National Director of the NIADA 20 Group program. He has nearly 30 years of experience in the independent dealer space and is an expert on Buy Here-Pay Here. He is a national speaker, author, trainer and consultant. You can contact Chuck at chuck@niada.com.
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LEGAL MATTERS
INDUSTRY NEWS
BY JEFF INGRAM
ARE YOU MAKING TOO MUCH PROFIT? National Consumer Law Center Report
When you go to buy groceries, clothes, electronics or other products, do you think about how much those products cost the company selling them to you? Personally, I never really give it much thought. I am either willing to pay their price to acquire the product or not. I expect them to make a profit. How much profit they make on selling it to me is not really something I think about. Unfortunately, people do not necessarily treat car dealers the same way. The National Consumer Law Center is a national organization that claims “to work for consumer justice and economic security for low income and other disadvantaged people, including older adults, in the U.S.” It acts as a one stop shop for lawyers interested in suing businesses, including car dealers, for consumers. It recently released a report titled Auto Add-Ons Add Up, How Dealer Discretion Drives Excessive, Arbitrary, and Discriminatory Pricing. This report focuses on products sold by car dealers such as service contracts, extended warranties and GAP contracts. To give you an idea of how the report is slanted, the first paragraph of the executive summary says, “While many have questioned the value of these products for consumers, the pricing… has received less attention.” It goes on to say, “Add-on products are sold at prices far higher than dealer costs… Dealers are inconsistent in the pricing of add-on products… This inconstant pricing for the same add-ons leads to price discrimination.” According to NCLC these “abuses” harm consumers by increasing “the price of cars, putting them out of reach for some consumers.” How such prices increase “the price of cars, putting them out of reach for some consumers” is a total mystery to me. Given you cannot force a customer to buy any of these products, the choice of whether or not to buy belongs exclusively to the customer. Some customers want and value these products. Others do not. No matter their decision, the price of the car stays constant. A customer may not have the ability to buy the vehicle they want plus these products but nothing keeps them from buying the car without those products. To stop these “abuses” the NCLC has a couple of recommendations. The first
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recommendation is requiring dealers to post non-negotiable prices for each available add-on on every car along with the price of the car. This is to prevent dealers from offering discounts on the add-ons to some customers but not others. This recommendation makes little sense. Why must the prices of these products be non-negotiable even though the price of the vehicle can remain negotiable? What is the difference? Can you imagine putting prices for service contracts or extended warranties on every vehicle? Every such contract I have ever reviewed has multiple coverage levels with different prices. Knowing the price, without also knowing what is and is not covered, provides little help to consumers. A $1,000 service contract might be a much better deal for a customer than a $500 service contract because of differences in coverages. Are you then to post on every car copies of the contracts themselves so the customer can review the coverage and prices? And, if the prices of these products can be required to be non-negotiable, why is the price of the vehicle any different? Will those prices also be made non-negotiable? Will the level of profit you can make on these products or even the car be next to be regulated? The NCLC, which in the first paragraph of its report questioned the value of these products, does not seem to understand a world in which nearly 60 percent of Americans do not have enough cash to cover an unexpected $500 expense. Forty percent of car owners have needed some kind of repair within the last year. When a car stops working and needs a repair, if the customer cannot get the repair performed their ability to go to work to earn a living is impacted. What could be a minor event for a repair covered by a service contract can become life altering. The NCLC’s report also reflects an underlying bias that adults are unable to take care of themselves. Instead, the NCLC believes adults need the government to protect them by telling them what they can buy and how much they can pay for a desired product. Soon, these same people will be complaining your customers should be protected from your desire to make “excess” profits. With an agency like the CFPB actively working, attempts at such regulation would not surprise me.
COX AUTOMOTIVE PROMOTES PATRICK BRENNAN Senior Vice President of Inventory Solutions Marketplace
Cox Automotive named Patrick Brennan as senior vice president of Inventory Solutions Marketplace following the recent promotion of Grace Huang to president of the Inventory Solutions Group. In this newly titled role, which reflects the company’s commitment to transform its operations into an all-inclusive, 24/7 seamless marketplace, Brennan leads auction and digital operations for Inventory Solutions. He and his team are responsible for building upon the multi-year investment enabling clients to buy and sell cars more efficiently and effectively – and other inventory solutions products – whenever and wherever they choose. “Simply put, Patrick knows our business,” said Grace Huang. “He is a respected, trusted leader with a proven track record who is well equipped to drive Inventory Solutions Marketplace to deliver greater efficiencies and better serve clients and our industry.” Backed by his more than 25 years of working with the company, Brennan most recently served as senior vice president of Logistics Solutions for Cox Automotive, improving the efficiency and client experience of Ready Logistics and Central Dispatch. Prior to that, he held positions of increasing responsibility with Cox Automotive and performed in operational and finance leadership roles for Manheim. Brennan started his new position October 9, reporting to Huang. Cox Automotive is seeking a replacement for the senior vice president of Logistics Solutions. For more information about Cox Automotive, visit www.coxautoinc.com.
December 2017 / AIADA
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ONLINE MARKETING
BY KATHI KRUSE
TIPS TO IMPROVE YOUR “ABOUT US” PAGE Start on the Right Foot
Customers who view your “About Us” page will spend 22.5 percent more than those who don’t. And, according to Blue Acorn, those who view it are five times more likely to make a purchase. I’ve often wondered why dealers don’t put more effort into these great opportunities to bring customers closer to the store. The average “About Us” page is a boring, self-serving mix of me, me, me, and us, us, us. But this page is so vital to your business! In fact, it’s usually the first place people look before they start to take you seriously. Get it wrong and you could be turning people off without even knowing it. A Good “About Us” Page is Crucial to Digital Operations A good “About Us” page is hard to come by because they’re difficult to get right. An “About Us” page that actually converts should: • Focus on your target customers and the value they get. • Provide testimonials, social proof, and other facts that prove your value. • Be a visually appealing page with photos and videos. • Convey your personality and why people buy from you. Ah, but how to achieve these objectives can be tricky. It’s all about trust. The “About Us” page builds a relationship with customers and gains their trust. While trust is largely intangible and unable to directly account for its ability to win customers, it is the undeniable invisible force behind sales performance and retaining customers. TIPS TO IMPROVE YOUR DEALERSHIP “ABOUT US” PAGE 1. Start with simplicity and clarity. Begin with a short introduction about your store. Sum up what you do in two to three sentences, but keep the language very simple – no jargon. Tell the story of your inception. Use meaningful language to engage customers. Talk about the dealership’s core values, principles, and goals. Talk about the obstacles you’ve overcome, the things you’ve learned along the way, and anything that makes you sound like more than a machine pumping out products. 2. Stop using mug shots. I have seen my fair share of employees’ pictures on dealership websites. Who takes these photos, an off-duty cop?
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A better alternative is to take candid shots of your team doing their job. Have them look at the camera, smile and illustrate their enthusiasm. 3. Tell a story about each team member. Interview each team member to get their heartfelt responses. Here’s what we use at Kruse Control: Hi there! We’ve put together a survey that will help us connect better with our customers and our community online. With your help, we can tell the story of our dealership. We pride ourselves on transparency and introducing you digitally will not only show how much we value your daily contributions but help you connect with our customers and community as well. Please help us by answering just a few short questions about yourself. We really appreciate your participation and we promise to make you look good! Name:___________________________________________________________________________________________ 1. What is your title and job description here at (dealership name)? __________________________________________________________________________________________________ __________________________________________________________________________________________________
2. How long have you worked at (dealership name)? __________________________________________________________________________________________________
3. What do you love the most about working for (dealership name)? __________________________________________________________________________________________________ __________________________________________________________________________________________________
4. What do you like to do when you’re not at work? __________________________________________________________________________________________________ __________________________________________________________________________________________________
5. What brought you to the automotive industry? __________________________________________________________________________________________________ __________________________________________________________________________________________________
6. What kind of car do you drive? What do you love about it? __________________________________________________________________________________________________ __________________________________________________________________________________________________
7. Do you volunteer or support any local causes in our community? If yes, please tell us about it. __________________________________________________________________________________________________ __________________________________________________________________________________________________
Thank you for answering these questions and for making our customers’ experience memorable. 4. Show examples, with links, of ways you’re participating in the community. I can’t tell you how many dealerships I’ve managed, and/or know, that spend thousands of dollars supporting local community causes. What I don’t see very often is evidence of that on their websites! It’s not self-serving to emphasize your good works. If a team member has answered “yes” to #7 of the questionnaire, make sure to illustrate how they’re giving back. 5. Include testimonials and social proof. A good “About Us” page always needs to have some mention of past successes, achievements, social proof, etc. Include a testimonial from one of your satisfied customers. Pick one that combines a compelling story with real examples of how your company met his or her satisfactions. Video is very powerful. Film customers or your employees and pick people who are engaging and feel comfortable in front of the camera. Putting it All Together How does your “About Us” page measure up? If the answer is “not so much,” let me know and I’ll help you improve it. KATHI KRUSE is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc. Kruse Control coaches, trains & delivers webinars focused on integrating social media and online reputation management into dealership operations. She can be reached at kathi@krusecontrolinc.com.
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www.niada.tv
Dealership Operations Out Of The Floppy Era?
In November watch. listen. learn. The NIADA.TV Operations Channel is our largest channel on the Network with over 70 free educational videos covering all aspects of your dealership operations, and perfect for your entire dealership staff to watch and learn. To get started, visit www.niada.tv and click on the Operations Channel from the left channel menu.
Visit the NIADA.TV OPERATIONS CHANNEL and learn how to get your dealership operations out of the floppy era and into tip-top shape for the upcoming new year. · digital marketing · showroom tips · merchant services · millennial marketing · dealer management systems · social media · underwriting · alternative profit centers · new dealership tips · reputation management · budgeting and expense control · pricing and finance charges · employee and wage issues · and sooo much more. Special Thanks to our NIADA.TV Operations Channel Sponsor, DDK Marketing.
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December 2017 / AIADA
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MANAGEMENT MATTERS
BY JUSTIN M. OSBURN
RETAIL READY Building New Roads in 2018
In the United States, millions of drivers jump in their vehicles and take to the roads each day. These drivers are from different states and backgrounds, with different levels of education. Though a diverse group, almost none just get up and decide to drive down the wrong side of the road. Why? They know this would be high risk for the safety of themselves and others. They know which side of the road to drive on and at what speed because the federal, state, and local road officials have a common vision of how traffic should flow. To prevent accidents and tragedy, drivers must receive communication from those visionaries. This communication is done primarily through driver’s education and signs. The road visionaries did not expect traffic to just “know” when to stop, when to not pass, what speed to drive, which side of the road to drive or when to exit or stop. Similarly, most workers get up every day with the intention to go to work and do the right thing. Most do not get up with malicious intent to cause chaos at their work place, or at your dealership. However, when the dealer and organizational leaders have not stepped back and thought about how they want their “roads” to function, the vision they have cannot be communicated. Leaders must decide which side of the road drivers will drive on before they can post the sign. The leaders must decide how fast people should drive for safe and efficient travel before they can post a speed limit sign. At the dealership, the senior leaders must have a vision how the business will operate before they communicate it to their team. Leaders must decide what the sales process is before they communicate such to the sales team. If the visionaries of the road system just built a road and no one took the time to decide how it would function, can you imagine what chaos traffic would present each day? Imagine no rules, no signs, no stop signs, no stop lights, no yield signs, no “no passing” zones and signs. Without an organizational vision for your operation, your business might resemble a road system with no thought or communication on how to use it. If you’re familiar with my “Gears to Profitability” dealer model, you know internal service quality precedes external service quality and the result and combination of both dictates profitability. Your responsibility as a leader is to provide short and long term vision. I find many dealers are confused what that means. Back to the roads, if you decide
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roundabouts are safer and more efficient than traffic lights, visionaries will begin to plan the best place to put a roundabout, what the flow of traffic will be and what rules and signs will organize it best for drivers. This is a long term vision. However, if a bridge is about to fall down and requires immediate repair, or an ice storm hits and salt is needed in the dead of night, this is a short term vision to keep traffic flowing until the longer term possibilities are completed. The dealership’s overall vision sets the framework that each leader inside of the business uses to create their own vision for individual departments. Think of the department managers as state and local roadways working together in congruence with overall highway rules. Leaders take responsibility for creating and communicating a compelling vision. This is essential for leading your team to success on the lot, in service or in the office. There is no better time to create and drive a clear vision than at the beginning of the year. So what is a strong and clear vision? It is a picture of the future that is created in the imagination and catalyzes action! The compelling argument for a clear and communicated vision is to prevent organizational chaos. Each leader’s vision is critical to individual success and impact. Effective leadership focuses on doing the right things. Do you do the right things? Do you do things right? Does your team do the right things? Do they do things right? First, know and understand the vision of the organization, how the roadways work. If you are the dealer, have you communicated the vision of the business clearly? This will enable your leaders to develop their own visions within the areas they control in the business to support the overall goals of the dealership. Second, leaders must create a vision that supports and contributes to the overall vision of the organization or department. As a leader, it is not healthy to construct and distribute a vision that is not a primary effort to advance your department toward the overall vision of the business. Doing so will cause you to conflict with the business itself, resulting in friction with other leaders in the operation, conflict with other departments and confusing communication to those in your charge. Imagine you are in charge of the roadways in a small town, and you decide it
makes more sense for everyone to drive on the left side of the road. Your vision is not congruent with the overall operation’s vision and will cause chaos and tragedy. Last, communicate the organization’s vision in a way that is compelling and inspirational. Part of your responsibility is to consistently broadcast the direction of the department and the dealership to nonleaders on the team. When you are traveling in an unfamiliar, large, downtown area and using GPS to assist you, the directions for your next turn are given two miles, one mile, and half a mile in advance as well as at the time of the turn. Signs are also used, frequently, to communicate the vision – think exit signs, speed limit signs, mile markers, etc. All these communications work to support the overall operational objective. As a leader in your organization, your behaviors demonstrate your vision and impact your dealership’s success. If you tell your team to drive 65 miles per hour on the right hand side of the road, but every day you drive 85 miles per hour on the left hand side of the road, you are not offering yourself or the organization any value. How well does your vision create a shared and meaningful purpose? Does it inspire passion and interest? Does it guide decision-making and strategy? Does it convey values? Effectively communicate your vision. This allows others to decide to follow your vision. The impact is emotional commitment. The New Year brings new beginnings. The page is turning and it brings a fresh start mentally and emotionally. We step out in January and breathe in the new air while feeling anticipation of how this year will be better than the last. While most of us “feel” this reset, it fades away in a relatively short period of time. Make a long lasting effect this year. Imagine and motivate with a vision. I get great satisfaction receiving all of your emails. I’d love to hear your story on vision. Also, contact me for more information on Gears to Profitability or an NIADA 20 Group. Write me at justin@niada.com. JUSTIN OSBURN is a moderator, consultant and trainer for NIADA Dealer 20 Groups, offering more than a decade of experience in retail and Buy Here-Pay Here executive management. He can be reached at justin@niada.com.
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