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BHPH Dealer THE

OFFICIAL

NIADA

PREMIER

SUBPRIME

AUTO

RESOURCE

•

DECEMBER

2017

MAGAZINE

THE FUTURE IS BRIGHT PAGE 08

A

SUPPLEMENT

OF

USED

CAR

DEALER

MAGAZINE

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F E AT U R E STORY

BY DAVID BROTHERTON

THE FUTURE IS BRIGHT

The BHPH industry has experienced significant challenges in recent years, but in many ways it has forced the industry to become more efficient. But what about the future? What’s ahead for BHPH? NIADA Dealer 20 Groups moderator/consultant David Brotherton lends some industry perspective for the coming year. PAGE 08

COLUMNS 4 EDITOR’S MESSAGE What’s the difference between a good dealer and great dealer? Editor in chief Chuck Bonanno addresses this question and encourages dealers to kick it up a notch.

10 BEST PRACTICES NIADA Dealer 20 Groups moderator/consultant Justin Osburn expounds on four easy to remember steps to polish your sales department’s meet and greet.

11 MANAGEMENT A large down payment does not guarantee a customer will pay the entire car loan. Everyone knows that. Right? NIADA Dealer 20 Groups moderator/consultant Mark Dubois discusses how bigger isn’t always better.

12 BEST PRACTICES The way customers make payments has changed dramatically. Technology is beneficial, but how can you maintain relationships with customers in this fast-paced, technology-driven age? NIADA Dealer 20 Groups moderator/consultant Mark Dubois offers an answer.

14 MANAGEMENT earnToLead president Dave Anderson talks about “management jerks” and how to L manage them.

16 MARKETING How does one effectively use social media to drive traffic and generate sales? NIADA Dealer 20 Groups moderator/consultant Justin Osburn presents a case study on potential benefits.

18 COLLECTIONS NIADA Dealer 20 Groups moderator/consultant David Brotherton offers some best practices for lending and collection to retain and advance your customer base.

20 BHPH ADVOCATE Victory is sweet! NIADA’s senior vice president of legal and government affairs Shaun Petersen announces an important victory regarding the CFPB’s misguided Arbitration Rule.

VISIT US ONLINE

Magazine Layout: Christy Haynes

Click on ads that link directly to advertisers’ websites. www.niada.com/bhph_dealer_magazine.php For advertising information, please contact Troy Graff at troy@niada.com.

ADVERTISERS AUTOZONE.........................................................7 CARFAX...........................................................IFC CLIFTONLARSONALLEN.....................................16 DEALERRE..........................................................9 INTERACTIVE FINANCIAL MARKETING.......... 11, 13 PASSTIME........................................................ 17 PERITUS...........................................................14 PROACTIVE DEALER SOLUTIONS..........................5 STARS GPS.......................................................15

from

BHPH Dealer MAGAZINE

DECEMBER 2017

← BHPH DEALER 3

EDITOR’S MESSAGE

KICK IT UP A NOTCH

BY CHUCK BONANNO

LEADERS BECOME RESOURCES FOR THE TEAM TO HELP EVERYONE ACHIEVE THEIR GOALS. LEADERS MOTIVATE AND INSPIRE. LEADERS ALLOW THEIR TEAM TO BE CANDID AND MAKE MISTAKES, AND THEY HELP GUIDE THE DEALERSHIP TOWARD THE VISION.

BE A GREAT DEALER

D

uring my many years in Buy Here-Pay Here, I have worked I never debate dealers’ past success and everything they with many good dealers and some really great ones. did to get where they are, but none of that guarantees Trying to figure out why some are great and others are tomorrow. We are in a disruptor period in which the entire not, I found some commonalities among the great dealers. model is changing.

It is not a matter of size, monthly sales or great location. It is If you don’t adapt, you perish. certainly not a matter of luck.

As you can see, the traits of great dealers do not only The great dealers I work with have these traits in common, no apply to large dealers. In fact, some of the best dealers I matter how big or small, no matter the business model. And it is know are small to medium-sized. not just measured in sales volume, net profits or great portfolio The first step to becoming great starts with you, performance. the dealer. The old saying, “As goes the leader, so go It begins with a vision: As a dealer, you must create that vision, the troops,” is so true. explain your vision and get your team to buy into the vision.

The first step is to create a mission and a vision I’ve read a lot of mission statements over the years. Some for your team. You then must convey that vision. dealerships write them, but they do not reflect the true vision.

You must include your team in the planning Or they really do reflect the vision, but that vision is never and execution of that vision. realized.

You must create a culture in which your It is great to write your mission statement down for all to see, people can be candid and you must let but the proof is how you act, how your people act and how the them know you care about their ideas and customers perceive that vision. value their input. You must create a great You have to live it and breathe it. Great dealers have a clear working environment. vision, and employees and customers feel it.

When you have a great team, they A great dealer is a leader: Leading is not management. will provide great service to your Managing people and tasks are certainly part of the job, but customers. Happy employees create leading is taking your vision from concept to reality. happy customers. Happy customers Leaders become resources for the team to help everyone create profits. achieve their goals. Leaders motivate and inspire. Lea ders allow If you create great customer their team to be candid and make mistakes, and they help guide experiences through superior the dealership toward the vision. products and services, the money Leaders crave input from the team and they create an will follow. You can take that to environment in which the team feels needed, wanted and the bank. respected.

I wish you all happy Dealership culture is an extremely important component of holidays and a happy and great dealerships: They say if you take care of your people, your prosperous new year. people will take care of your customers. Great dealers create a culture of customer service, and employee service.

CHUCK People desire to work for a company they can believe in and BONANNO they want to provide products and services that have real value IS EDITOR IN CHIEF to customers. Great culture in a dealership results in happier OF BHPH workers and happier customers. That results in success.

DEALER. People are the most powerful cog in the machine: Great dealerships have great people and great teams.

Everybody wants to know where they find those great people.

Everyone wants the magic personnel pill.

Well, there isn’t one. Great dealerships create great workers and team players. They provide training, feedback, encouragement and opportunity.

Great dealers have no secret sauce when it comes to hiring.

They typically make “value” hires, meaning they look for people with the right values.

They look for energy and enthusiasm. Everything else can be taught. And, finally, they are bold enough to make personnel changes when necessary.

Great dealers embrace change: This business has changed dramatically over my 30 years in it – and it is still changing.

Cars are changing, customers are changing and marketing is changing. Those changes are happening fast and the ability to recognize the need for change, then act on it, is going to determine your future.

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ACCOUNTING

CASH IN?

BY JOHN DONALDSON AND KENNETH SHILSON

TAX BILL COULD MAKE CASH METHOD A CHOICE FOR BHPH DEALERSHIPS

S

o you’ve probably heard independent dealers cannot use the cash method of accounting and must use the accrual method.

You’ve been told about the benefits of a related finance company and how having one can mitigate much of the tax due to the revenue recognition under the accrual method that makes it difficult to operate a BHPH dealership.

That is all centered on the fact that an inventory is necessary to clearly show income when the purchase or sale of merchandise is an income-producing factor.

Therefore, under the current tax code you must use the accrual method of accounting for your purchases and sales for tax purposes.

Did you know that the Tax Cuts and Jobs Act bill (H.R.1) introduced in Congress on Nov. 2 contains a small business relief provision that would allow inventory to be counted as “nonincidental materials and supplies” for companies with revenue of less than $25 million?

Most BHPH operations have gross receipts of less than $25 million.

The bill has the potential to help countless BHPH dealers.

However, it is uncertain whether the bill will be passed into law.

How would it help?

Current law requires dealers to use the accrual method of accounting, so every vehicle sold is taxed on income that has not been received yet by the dealer.

Let’s take the following examples of XYZ Auto Sales.

In late December, XYZ purchased a vehicle from auction for $4,000 and had $1,000 reconditioning and incidental costs. XYZ then sold the vehicle to a customer for $11,000 in exchange for a $1,000 down payment and a retail installment sales contract for the remaining $10,000.

The fair market value of the note is estimated to be $6,300.

At the end of the year, XYZ had its taxes properly prepared and showed the following: Sales Finance Transaction Accrual Basis Gross Sales Price $ 11,000.00 Cost of Goods Sold $ (4,000.00) Reconditioning Cost $ (1,000.00) Taxable Income $ 6,000.00 40% Tax Rate $ 2,400.00

Cash Position Down Payment Cost of Goods Sold Reconditioning Cost Total Cash Deficit

$ $ $ $

1,000.00 (4,000.00) (1,000.00) (4,000.00)

As you can see, XYZ is going to be taxed on a transaction even though it has received little cash. We refer to that as “phantom income.”

The cash method has the potential to mitigate that problem and only tax the dealer on the estimated fair market value of the contract plus what was actually received, less expenses.

Sales Finance Transaction Cash Basis FMV of Installment Contract $ Down Payment $ Cost of Goods Sold $ Reconditioning Cost $ Taxable Income $ 40% Tax Rate $

6,300.00 1,000.00 (4,000.00) (1,000.00) 2,300.00 920.00

But wait.

What does fair market value have to do with the cash basis of accounting?

Well, the issue is that an installment sales contract is a deferredpayment obligation that is readily marketable and immediately

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TALK WITH YOUR CPA ABOUT WHY THAT IS DESIRABLE, BUT THAT WAY YOU WILL BE PROTECTED EVEN IF THE TAX LAW DOES NOT CHANGE. convertible to cash.

Therefore, even under the cash method you still must recognize the FMV of the contract into income. And to do so, you need to be able to estimate your losses using static pool performance to assign a fair market value that can withstand IRS scrutiny.

But it is still a significant tax savings – in this example a 61.7 percent decrease in tax.

Talk with your CPA about how this could impact your own operation.

As always, there are many hurdles to clear before the Tax Cuts and Jobs Act bill becomes law. There’s also the question of how the IRS would implement the new law.

But it could be positive news for BHPH dealers.

In the meantime, if you are currently on the cash method for tax reporting, we suggest you consider changing to the accrual method using the automatic change provisions.

Talk with your CPA about why that is desirable, but that way you will be protected even if the tax law does not change.

JOHN DONALDSON, CPA IS PRESIDENT AND CHIEF FINANCIAL OFFICER OF ACE MOTOR ACCEPTANCE CORPORATION. KENNETH SHILSON, CPA IS PRESIDENT OF NABD (WWW.BHPHINFO. COM) AND SUBPRIME ANALYTICS (WWW.SUBANALYTICS.COM). HE CAN BE REACHED AT KEN@KENSHILSON.COM.

INDUSTRY PERSPECTIVE

WHERE DO WE GO FROM HERE? THE FUTURE IS BRIGHT

T

he past several years have presented some significant challenges to Buy Here-Pay Here and Lease Here-Pay Here operators.

Competition from subprime and deep subprime lenders in the point-of-sale market has led to a decline in credit quality in many operations as many of our traditional customers are purchasing upstream and leaving us to do more with less.

It’s been a difficult road and, as with any change in economic conditions, there has been some fallout as dealers who were once prominent are now out of business.

This is not about doom and gloom, however. I actually see the future for our business being brighter now than it has been for some time.

ALL THE YEARS STRUGGLING TO RIGHT-SIZE OUR BUSINESSES, TO GET THE MOST ROI OUT OF EVERY DOLLAR SPENT. RUTHLESSLY DRIVING PRODUCTIVITY INCREASES THROUGHOUT OUR WORKFORCE. PERFECTING THE NOTION WE CAN BE SUCCESSFUL SELLING TO A LOWER CREDIT-QUALITY CUSTOMER WITH LESS MONEY DOWN BECAUSE WE’VE HAD TO ADAPT TO MARKET CONDITIONS.

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The road we’ve walked has forced us to become more efficient.

It reminds me of how the Big Three automakers reacted to Asian imports.

Survival for Detroit meant driving efficiency. It meant looking for ROI on every dollar spent.

Competition forced Ford, GM and Chrysler to create new processes, infrastructure, design and, most important, quality standards. Ultimately, those changes have contributed significantly to the inventory we all sell today, and we should be thankful for it.

BHPH/LHPH dealers have had to become more efficient. We’ve had to deal with increases in inventory acquisition and carrying costs, as well as declining credit quality. We’ve had to get better at every aspect of our business.

We’ve become more productive, more streamlined and more customer-focused. We’ve figured out how to make the new economic paradigm work for us.

It hasn’t always been easy.

Banking relationships have become more challenging to forge and/or maintain, for example. If you haven’t had to deal with portfolio liquidation or higher charge-offs and/or delinquency over the past few years, consider yourself lucky.

The good news is times are changing and we are positioned exceptionally well to reap the benefits.

Before this season’s devastating hurricanes, dealers had generally seen a softening in car prices over the past several months. All year we’ve been witnessing the impact of additional supply in the face of consistent demand.

Where has this additional supply come from? The answer is a significant increase in repossessed units being liquidated at the auctions. Subprime and deep subprime lenders have been experiencing record 60-plus delinquency levels and charge-offs.

More repossessions and charge-offs means more vehicles at the sale. More vehicles at the sale means lower prices overall.

Lower prices are a positive for buyers but represent something else entirely when you’re selling repos at the auction.

It means a drop in the collateral recovery rate for most subprime and deep subprime lenders. This means

BY DAVID BROTHERTON

those lenders are, in many cases, losing money, and they have started to pull back from the crazy levels of lending we’ve been seeing.

All the years struggling to right-size our businesses, to get the most ROI out of every dollar spent. Ruthlessly driving productivity increases throughout our workforce. Perfecting the notion we can be successful selling to a lower creditquality customer with less money down because we’ve had to adapt to market conditions.

All of this makes me feel better about the competitive situation than I have for some time. Many of the underlying factors driving subprime lending are still there – for example, low interest rates – but their loss should be our gain.

In what could be a huge boon for BHPH dealers, four million off-lease vehicles are due to hit the used vehicle market next year. Four million. Most of them are sedans, and we all know everyone wants trucks, SUVs and crossovers.

Increased supply and declining demand suggests there will be bargains to be had on late-model cars over the next year.

The bottom line is manufacturers have themselves to blame for what is coming.

Will they never learn? When you oversell vehicles for several years running, eventually basic economics comes home to roost and creates a situation in which lending has to retreat and leases must become less aggressive.

That is also happening due to the factors described above.

Trucks and SUVs will still carry a premium but the overall inventory outlook is positive.

The lean years we’ve been dealing with recently have made us stronger and more customer-focused. It’s been good for the industry as a whole if not for some individuals.

We’ve become better just in time for us to reap the benefits and to get ready to sell to the limit of our capital. Looking ahead, 2018 should be a great year.

DAVID BROTHERTON IS A MODERATOR/CONSULTANT FOR NIADA DEALER 20 GROUPS. HE CAN BE REACHED AT DAVID@ NIADA.COM OR (941) 203-3580.

BEST PRACTICES

FISCAL FITNESS

“If this is the best you are ever going to be, I don’t need you.”

If you don’t have employee expectations, how can you expect them to be their very best? It is also important to have expectations of yourself as the dealer. If you are unwilling to work on yourself – unwilling to work on your business, not just in your business – at best you will simply maintain.

And it is impossible to merely maintain. If you’re not growing, you’re dying. Continuing to educate yourself – implementing sound strategies and seeking to improve – is characteristic of the very best in this business.

Are you active in your state association? Are you working on your own education? Do you belong to a Twenty Group? Do you have ongoing training for your team?

Do you have a reinsurance company? Do you have a great DMS and CRM system? Do you have an RFC set up and managed by an accounting firm that specializes in your business?

These are areas that need your attention.

Your business strategy has to be more than hoping more folks happen to stumble over you this year than last.

Your BHPH business mindset, how you view your role as a transportation provider to the unbankable, is extremely important to your success.

Are you a blessing who finds solutions to lift people up or an opportunist whose methods take advantage of people with few options in time of crisis?

Let me teach you how to be a blessing, and by doing so, be more profitable with less aggravations than with the opportunist approach.

Let’s talk about reinsurance.

Some of my clients think the name reinsurance is confusing.

Others call it a “no brainer.” I like to look at reinsurance as a solution provider.

In Buy Here-Pay Here we have some inherent difficulties. Cars break down. Customers usually don’t have the money to fix them, and stop making payments.

The opportunistic approach would be to punish the customer or put them on a promissory note to get the car repaired, which just adds more debt to their lives and rarely gets completely collected.

Another inherent difficulty is that insurance premiums lapse, putting your collateral at risk.

A FIT COMBINATION

Even when there is insurance, when did insurance companies ever have our best interest at heart? One dealer told me they spend on average 40 man hours on claims resolution.

In most demographics the BHPH customer spends more than $100 per month for their required insurance to benefit some insurance company that pays as little as possible. Why do they do that? Because what is not paid out in claims becomes their underwriting profit.

Many dealers got into the BHPH business because they saw an opportunity to take control of the banking aspect of the car business through owning a Related Finance Company. They own the finance company. Therefore, they make more profit and pay less taxes than they otherwise would.

Plus their customers get the transportation they need. They, through their RFC, are a blessing to their customer, by providing financing they could not otherwise obtain.

All these other inherent issues can be resolved if you just owned an insurance company. Did you know that for less than the $100 per

BY TIM BYRD

month you are requiring your customers to spend with those ungrateful insurance companies, you can provide, through your own insurance company, a warranty and collateral protection?

Your own insurance company would be able to keep your customer’s vehicle repaired for no additional financial burden to them. Your insurance company can also keep your collateral protected without any additional financial burden.

This would mean less financial pressures on them and you, greater control of adverse situations, and less processes and man hours. And you benefit from the underwriting profit. A combination certain to make you fiscally fit.

One could say that reinsurance is a blessing to everyone.

Reinsurance, it’s what smart dealers do.

TIM BYRD IS FOUNDER AND PRESIDENT OF DEALERRE, WITH MORE THAN 25 YEARS OF EXPERIENCE IN THE AUTO INDUSTRY. HE CAN BE REACHED AT WWW.DEALERRE.COM OR BY CALLING (804) 824-9533.

DECEMBER 2017

← BHPH DEALER 9

BEST PRACTICES

MEET AND GREET

BY JUSTIN OSBURN

NO BROOMS ALLOWED

I

f you want to throw the broom away and polish up your sales department’s meet and greet, here are the four steps, using my acronym MEET. Maintain the right “greeters” (sales professionals).

Exit the door.

Enter the door.

TO. M: MAINTAIN THE RIGHT SALES PROFESSIONALS The meet and greet is the customer’s very first personal interaction impression.

It truly will accelerate or put brakes on the sale.

Hire sales professionals who have the right attitude, personality and character.

It is difficult to mess up when you have those three characteristics checked off on a salesperson.

A positive and enthusiastic attitude brings optimism and improved morale. Couple that with an outgoing and gregarious personality and you have a bright and shiny “people person” who can make small talk with just about anyone.

Throw in character and you know they won’t steal from you and will be gracious for your strong leadership.

If a candidate checks off those three boxes, the rest can be taught.

Now that you have the right people, it’s your duty to teach them your process. You must have a process if you expect them to represent you and perform in a specific way.

Your expectations of how they should dress, smell and sound, of where they should be and when, etc., should all be clearly spelled out in the interview and training phases.

E: EXIT THE DOOR Regardless of the Internet’s advances, BHPH lots still have plenty of foot traffic.

To prepare and train sales staff, the initial interaction can be somewhat intimidating.

Refer back to step M. If you hire the right person, he or she will love to talk to people.

Coach sales teams to use the door as an object that reminds them to get prepared for the meet and greet. When you hit that door, it should remind you of the three things you need to accomplish to move the prospect to the next step.

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Those are three things a sales person should be an expert at, through a lot of perfect practice – presence, introduction and F.O.R.M. Presence: The right salespeople, with plenty of perfect practice, will become comfortable with the meet and greet. That comfort will improve their presence.

They should practice being confident and friendly, offering smiles, being fun, agreeable and prepared with good questions.

Avoid things that could deter a strong meet and greet, like bad breath, poor body language and/or no idea what to do because they have poor direction.

Introduction: A great introduction example: “Hello, have you been here before or is this your first time? Great, my name is Justin, what’s your name (Handshake and offer them a business card)?”

There are many others.

Pick your preference or have several situational plays.

Remember, a quarterback might have called a run play, but the team is prepared to audible to a pass if the situation calls for it. When your team has the basics, you can build audibles into their playbook.

F.O.R.M.: This stands for family, occupation, recreation, message, and it gives the salesperson a formula to walk through a conversation with a prospect.

The sales professional can ask about the prospects’ family, move to their work and then what they like to do for fun.

The “M” in F.O.R.M. refers to message.

What message do we want to present?

The next action for the customer is to go inside. We go inside so we can move the sale along. Have your sales professionals come up with their own ways to present that message.

One example: “I have more details about that vehicle inside. Let’s go check it out.” Turn and walk toward the door and they will follow.

E: ENTER THE DOOR When the sales professional and customer open the door, again, let the door be a reminder to the sales professional to ask a question: “Do you

MANAGERS SHOULD ALWAYS TRACK EACH SALES PROFESSIONAL’S PERFORMANCE ON LEADS TO APPLICATIONS. THROUGH GREAT TRAINING AND PRACTICE, THIS CAN UNLOAD MUCH STRESS OFF THE OPERATION AND BEGIN TO PERFECT THE FLOW OF CONVERTING LEADS TO SALES. have your driver’s license?”

You ask that question in a manner that sounds like you are asking if you can have it. The prospect will offer you their driver’s license and the sales professional makes a copy.

Also use this step to point out the restrooms, coffee and kids’ area, and to get them to the sales professional’s office or desk.

T: TO The last step in the meet and greet is to get the manager involved.

We know early turnovers are highly effective. Do not wait until the customer decides to leave to introduce the manager. Managers must be engaged and willing to do TOs. Managers should be highly qualified to assist in moving the sale forward and into the application process. They can communicate the story of the dealership and the process, and provide confidence and transparency to the customer.

Being great at the meet and greet will improve lead to application percentages.

Leads will not convert to approvals and sales without first obtaining applications.

Managers should always track each sales professional’s performance on leads to applications. Through great training and practice, this can unload much stress off the operation and begin to perfect the flow of converting leads to sales.

Email me your favorite meet and greet story 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.

MANAGEMENT

BIGGER ISN’T ALWAYS BETTER

BY MARK DUBOIS

DOWN PAYMENT DOESN’T GUARANTEE PAYMENT You have probably heard the GEICO Insurance tagline, “15 minutes can save you 15 percent or more on car insurance. Everyone knows that.”

If we applied that same kind of message to BHPH financing, it would be, “A large down payment does not guarantee a customer will pay the entire car loan. Everyone knows that.”

But do all BHPH dealers really know that?

An informal survey of BHPH dealers confirmed a high percentage of dealers would let a large down payment influence their decision on approving a loan application from a customer.

The lure of a large down payment can make dealers approve loans they might not otherwise approve. The availability of GPS or starter-interrupt technology can cause dealers to roll the dice more often.

Some dealers even say, “If the customer defaults on the loan, we’ll just repossess the vehicle.”

That approach is shortsighted and would likely result in greater losses than gains.

Statistics from NABD confirm loans originated in February consistently perform the worst. Members of BHPH 20 Groups get a monthly composite of their historical charge-off results for the past 12 months.

Metrics such as collateral recovery ratio and loss to liquidation are also important indicators of how your loans are performing, and a static pool analysis is another way to track the performance of tax-time finance decisions.

The problem is all of those statistics come after the fact. It’s like an autopsy on loans initiated during tax time.

The tracking and reporting confirm the charge-off results and how your loans performed.

No one can predict how a loan will perform during the term, but there are specific things that can contribute to the likelihood of a loan performing well.

For example, calculating the net pay to payment ratio to determine if the customer can afford the payment.

That’s where the down payment and the customer’s payment should be assessed independently.

One of the keys to success in BHPH financing is having sound deal structure combined with a thorough process for underwriting and verification before the loan application is approved.

In most cases, avoiding loans that have the likelihood of performing badly is less costly than rolling the dice and approving a loan based on a large down payment.

Remember, in BHPH financing, a bigger down payment isn’t always better.

MARK DUBOIS IS A MODERATOR FOR NIADA DEALER 20 GROUPS AND AN AUTO INDUSTRY VETERAN WITH MORE THAN 35 YEARS OF EXPERIENCE. HE CAN BE REACHED AT MARK@NIADA.COM.

DECEMBER 2017

← BHPH DEALER 11

BEST PRACTICES

BACK TO THE FUTURE WITH BHPH FINANCING

BY MARK DUBOIS

BHPH financing is mostly community-based financing. BHPH dealers support their local community in a variety of ways, including helping customers get financing on vehicles.

Payments on the vehicle financed used to be made in person. That process gave the BHPH dealer a chance to see the customer, engage in conversation and find out what was going on in the customer’s life. It was also a chance for the dealer to see or inspect the collateral.

Technology has made it possible for customers to make payments in numerous ways. That payment evolution has even been called Buy Here-Pay There.

But many dealers have reported that losing face-to-face contact with customers has reduced their opportunity to build relationships with those customers.

I’ve even heard some dealers say, “I don’t even see the customers anymore unless they have a problem.”

There is no question technology has changed the BHPH RELATIONSHIP business for the better, and I anticipate technology will continue to evolve and change our business.

BUILDING So how does a BHPH dealer maintain relationships with ot long ago customers in this fast-paced technology-driven age? customers had The answer is personal service. very few options Personal service can take many forms and be delivered in when making a payment many different ways. One of the best forms of personal service to a BHPH dealer. It was is helping a customer get caught up on a delinquent payment. in-person payments with That might sound like a fundamental step in BHPH either cash or check. collections, but the personal service aspect comes from how the While payday payments payment arrangement is presented. continue to be the Instead of repossessing a vehicle, the best BHPH dealers cornerstone to success in work with their customers, keeping them in their vehicles and collections, how customers making payments. make their payments has When a payment arrangement is needed, the customer changed dramatically. should be required to come to the dealership to complete the Technology has had a significant necessary paperwork. Verbal payment arrangements by phone effect on the way BHPH dealers or text might seem like a simple solution, but they do not hold operate. Consider the impact the customer accountable. smartphones, Google, Facebook, In addition to coming to the dealership at a specific time, the Instagram, online payment portals, customer should be required to bring verification to support the auto debit and GPS and starter-interrupt reason the payment cannot be made in full or on time. devices have had on your business.

For example, if the reason the payment arrangement is For the most part, those advancements needed is the customer was sick and lost hours at his job, the have made BHPH dealers more effective, customer should bring the paycheck stub for verification before more efficient and faster to react to a payment arrangement is approved. situations, particularly on the all-important Those steps can appear to be cumbersome, complicated or collections side of the business. even unnecessary. But when you understand the discipline The question is whether there has been a behind the structure, you will see the results from your effort. tradeoff for these advancements in technology.

Personal service events to help build relationships with your BHPH financing has long been a mature customers could include customer appreciation days, Saturday business. The fundamental principles to success in cookouts on the car lot, weekly drawings for cash or prizes, popBHPH financing remain very much the same today a-balloon surprise gifts or gift cards for gas or groceries, just to as they were many years ago. name a few.

That is, BHPH dealers help people get financing on a But remember, even though technology has changed the vehicle when they can’t get traditional financing. way BHPH dealers operate, we should never forget the roots of Over the years the cost of vehicles and the terms of success in the BHPH business are about creating relationships finance contracts have increased dramatically, but the with your customers. average down payment has not. That formula translates into more cash in deal and more money on the street.

MARK DUBOIS IS A MODERATOR FOR NIADA DEALER 20 One fact that has seemingly disappeared from the GROUPS AND AN AUTO INDUSTRY VETERAN WITH MORE THAN 35 YEARS OF EXPERIENCE. HE CAN BE REACHED AT conversation is that the BHPH business is still very much a MARK@NIADA.COM. relationship business.

N

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BEST PRACTICES

LEASE HERE-PAY HERE 20 GROUPS

BY MARK DUBOIS

ANALYSIS, COMPARISON, AND NETWORKING NIADA has taken a time tested format and applied it to dealers operating a Lease HerePay Here business: 20 Groups.

Twenty Groups for Buy Here-Pay Here dealers have been around for many years. The value and results are well documented. Dealers participating in a 20 Group have produced significant increases in productivity and profitability for their businesses.

Dealers in a 20 Group discuss real life business challenges. They exchange ideas, and share best practices with other dealers in the group.

Since there are no market competitors, members are free to share information and business results openly. One of the primary objectives of a 20 Group is to help all members improve operational efficiency and increase profitability.

There are similarities between operating a Buy Here-Pay Here business and a Lease

Here-Pay Here business. However, there are also significant differences.

Comparing a Buy Here-Pay Here business to a Lease Here-Pay Here business is really like comparing apples to oranges. The closer you look, the greater the differences.

The solution is a Lease Here-Pay Here composite designed specifically for Lease Here-Pay Here dealers!

The composite is a comprehensive report of business results submitted by 20 Group members each month. It is a critical component of analyzing and comparing business results. This comparison provides better analysis and a more accurate picture of the business performance.

The NIADA Lease Here-Pay Here composite was designed with input from experienced LHPH dealers to recognize the unique operational components of a LHPH business. Capitalized cost, acquisition fee, security deposit, rental

charge, contract depreciation, residual value and lease term are just a few of the unique reporting terms analyzed in the LHPH composite.

The New Year will be upon us shortly. Make a commitment to improve your Lease Here-Pay Here business by joining a LHPH 20 Group.

Dealers already in a 20 Group will tell you joining a 20 Group was one of the best business decisions they have ever made. Through analysis, comparison and networking with other LHPH dealers, the opportunity to take your business to the next level is just a phone call away. Call NIADA today for details on our next LHPH 20 Group meeting.

MARK DUBOIS IS A MODERATOR FOR NIADA DEALER 20 GROUPS AND AN AUTO INDUSTRY VETERAN WITH MORE THAN 35 YEARS OF EXPERIENCE. HE CAN BE REACHED AT MARK@NIADA.COM.

DECEMBER 2017

� BHPH DEALER 13

MANAGEMENT

HOW TO MANAGE MANAGEMENT JERKS COMMON BEHAVIORS AND REMEDIES A “jerk” is defined as a contemptibly obnoxious person.

Sadly, there are too many jerks in management who seem to believe their position gives them permission to abuse, micromanage, continually criticize, demean, complain about, disrespect or intimidate others.

The costs for such behavior are staggeringly far reaching.

While anyone can temporarily veer off track and demonstrate jerk behaviors occasionally, the persistent offender – the manager who is known for it – needs to change, or be changed.

FOUR QUICK OPENERS ON MANAGEMENT JERKS They are immature: They grow old, but they don’t ever seem to grow up. Their emotions control them more than they manage their emotions.

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They often resort to jerky behavior to disguise their limitations: Acting loudly, obnoxiously, profanely or disrespectfully can create diversions from limitations like incompetence, inexperience, ignorance or stupidity.

They have a corrupt understanding of what it means to be a leader: They expect to be served by others, rather than looking for ways to serve others and add value to them. They believe people are there for them, and don’t grasp that they are there for their people.

They behave more like tyrants than leaders.

Senior leaders who tolerate management jerks are spineless sellouts who betray all those who suffer beside or under the jerk: They put their culture, team morale, momentum and results at risk because they either don’t have the skills or the guts to do their job and hold the jerk accountable.

BY DAVE ANDERSON

FIVE TENDENCIES OF MANAGEMENT JERKS They privately and publicly criticize, yell, demean and/or disrespect others: This behavior can also include off-color language or getting personal.

Even when not engaging in egregious language, they tend to talk down to people: They are often short, sarcastic and dismissive, and act as though everyone else is stupid or clueless.

They rarely give positive reinforcement: On the occasions they do commend someone, they tend to offset it with something the person did wrong or must do better. For example, “Joe, you did a nice job with that customer… but it doesn’t make up for failing to make the last three deals.”

They tend to be narcissistic in nature and project a superior attitude that creates resentment and resistance in others: Those working for them work hard out of fear, not as a result of engagement or commitment.

They are prone to self-destruct over time: They wear out their welcome by abusing customers and employees, disrespecting other leaders, toxifying the culture and more. Of course, in their mind it’s never their fault.

FIVE-STEP REMEDY FOR MANAGING MANAGEMENT JERKS Redefine, in writing, behaviors that are no longer acceptable and outline what you expect: If you want great job performance you must define it and should have done so long ago. Be specific and give examples. Eliminate all loopholes and gray areas.

Also make certain you explicitly explain to them the costs of their continued behavior: damage to morale, momentum, production, culture, brand, credibility, increased turnover and more.

It’s important they see the big picture and don’t think you’re just nitpicking over quirks in their personality.

Discuss possible consequences for continued errant behaviors: There is no one-size-fits-all consequence in this instance since there are such varying degrees of possible wrong behavior.

Thus, point out potential consequences depending upon the offense.

Give immediate positive feedback on improved behavior: Whenever you’re trying to influence behavioral changes, you’ll need to reinforce it more often and faster than in the past. Here’s why: Behaviors that are reinforced and rewarded are behaviors that get repeated.

But remember, the longer you wait to reinforce a behavior the less impact it has.

Secure help – resources, a course, a coach and the like – to help equip the manager with better tools and more awareness to manage more effectively: When we ask someone to improve behaviors or results, it’s essential we resource those changes with tools and training.

Understand you cannot change another human being in this regard: They must decide to change, and they must make the change.

If those steps are unsuccessful, demote, transfer or remove the person.

Demoting or transferring should involve moving the person into a position in which they are humbled and no longer in a capacity to abuse people if such a slot is available. Otherwise you should remove him or her.

While the upfront costs of replacing a manager can be high, the price you pay for keeping a management jerk is staggering in the long term.

Bottom line: If someone wants to leave your organization because you expect him to live values he’s unwilling to live, let him go. It’s kind of like the trash taking itself out.

DAVE ANDERSON IS PRESIDENT OF LEARNTOLEAD.

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DECEMBER 2017

← BHPH DEALER 15

MARKETING

FIGURING OUT FACEBOOK

BY JUSTIN OSBURN

A CASE STUDY

20 Groups are rooms full of some of the sharpest dealers across the country.

These days, one of the most popular topics of discussion in those rooms is how to effectively use social media to drive traffic and generate sales.

Dealers and senior leaders are still trying to figure out the “secret sauce” to generate traffic using digital. Unfortunately, too few have put the puzzle completely together.

BHPH as a whole has been a step or two behind in using the digital tools currently popular among retail dealers. BHPH dealers have weighed the benefits of advertising on social against the potential negative feedback, ratings and reviews they anticipate if they open the social flood gates.

Here is a very solid case study showing why selling on social media will benefit your leads and sales if done correctly.

I challenge you to ask how much money you are currently throwing at advertising.

Where are you spending your hard-earned dollars?

Are you or is someone in your organization responsible for reporting the benefit from each channel? How many sales does each channel generate?

Are you branding your dealership? Are you advertising and converting sales? Are you measuring the results of your investments?

Go Auto is a Canadian auto dealership that created a multi-channel strategy to encourage potential car buyers to upgrade their current vehicles. They found Facebook delivered the lowest cost per lead and the highest number of attributable sales.

Are you still wondering how to use Facebook to promote your lot and vehicles?

Here is exactly what Go Auto did.

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First, the dealership’s marketers developed a 60-day campaign.

They wanted to measure the results the campaign would have on not only Facebook but on other traditional marketing channels as well. So they opted to run the campaign in both lanes, across a variety of both traditional and digital ad formats.

The campaign was very focused. It was a contest to pay off the winner’s auto loan balance.

On Facebook, Go Auto developed a series of comical images, including a “yoga dog” with the caption, “Car Paid. Namaste.”

The call to action directed people to an online submission form. It did not direct them to the dealer’s home page.

Pro tip: Be sure to use landing pages in digital marketing (for more information on using landing pages, email me at justin@niada. com). The online form requested details of the car make and model and current car payments.

Go Auto used those details to later retarget people with tailored ad campaigns, such as offering to lower their car payments, trade their vehicles, provide service and more.

Additionally, they used Facebook’s location targeting and segmentation tools to optimize the campaign and reach as many people living near one of their dealerships as possible.

They used two Facebook ad tools: ads and core targeting.

The results revealed the best performing media for its target audiences. The Facebook campaign successfully achieved the following results: • 46 percent lower cost per lead than traditional media.

• 23 percent lower cost per lead than other paid online media.

• 68 percent more vehicle sales than the next best advertising medium.

“Facebook has been our strongest performing media channel for this type of campaign,” Go Auto director of marketing Russ Fenske said, “The more we use it, the more we like it.

“We can effectively target large-scale audiences using multiple advertising messages.

Active experimenting and constant testing make it easy to find a winning formula fast.”

Facebook ads allow you to choose your audience based on demographics, behaviors or contact information. The ad formats are eyecatching, flexible and work on every device and connection speed.

It also has its own ad reporting tools to show you in visual, easy-to-read reports how your ads impacted your business. Facebook allows you to create an ad and show it across

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.

Dealers who participate in a 20 Group frequently say joining a 20 Group was “one of the best business decisions I have ever made.” The format of a 20 Group meeting offers tremendous opportunity for business analysis, comparison, discussion, exchange of ideas, experience, best practices and results.

These programs are available in a wide range of formats, including 20 Groups for retail dealers, BHPH dealers, LHPH dealers, controllers, fixed operations, large dealers, small dealers, experienced dealers and inexperienced dealers.

Every member in the group has something to learn, and every member has something to contribute. The true value of a 20 Group comes from the combined knowledge, experience and participation from each of the members.

The time and cost of participating in a 20 Group should be viewed as an investment in yourself and an investment in your business, not as an expense.

If you truly want to take your business to the next level, the best formula for success is to discover the power of a 20 Group.

DECEMBER 2017

INVESTMENT

Facebook, Instagram and Audience Network to improve your reach.

Core targeting is a fancy term for “an easy way to connect with your audience.” With two billion people on Facebook and more than 500 million accounts on Instagram, the customers you want to reach are there.

Perhaps you want to target prospects based on age, location or hobby. Core targeting can help you connect to those likely to be interested in your BHPH business.

For more case studies conducted by other dealers on Facebook, or if you would like more details about the tools Facebook and Instagram offer, write me at justin@niada.com.

This case study and tools described were directly referenced from www.facebook.com/business/ success/go-auto and www.facebook.com/business/ learn/facebook-ads-choose-audience/.

Would you invest $5,000 for a chance to earn $500,000? Well, with a modest investment in a 20 Group you can dramatically improve the performance and profitability of your business.

20 Groups are a time tested format that have delivered huge results. NIADA statistics show dealers who participate in a 20 group have increased profitability by as much as 25 percent in the first three years of being a member.

Participating members discuss real life business challenges, exchange ideas and share best practices with the other dealers in the group. Since there are no geographical competitors in a group, members are free to share information openly. One of the primary objectives of a 20 Group is to help all members in the group improve operational efficiency, and increase profitability.

20 Group members understand that taking time out to work on your business, instead of just working in your business, provides a fresh perspective, new ideas, and a chance to network with other dealers facing the same dayto-day challenges.

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DISCOVER THE POWER OF A 20 GROUP!

← BHPH DEALER 17

COLLECTIONS

BEST COLLECTION PRACTICES TODAY

BY DAVID BROTHERTON

Both employment and residence need to be verified determine the real issues and to reach arrangements that will, ultimately, correct the delinquency. as well.

It is safe to assume every customer you sell will need And, most important, this is not a sales function. Verification help from the collections team at some point. Making is a task that should be completed by someone with a vested contact early and establishing an action plan is critical, interest in making sure it is done properly. and successful operators train on that regularly.

Closings are consistently and systematically done: ModernDon’t rely on references: The Fair Debt Collection day lending is complicated. Even the most streamlined Practices Act limits contact to references. Many agreement has multiple pages, paragraphs and sub-sections. of the more compliance-savvy operators have all It is critical that customers take delivery understanding both but abandoned references as a linchpin of their what they can expect from us and what we expect from them in collection efforts. return.

That’s not to say references are not important, A scripted approach to closing is necessary, as we need to but there are so many risks of disclosing account enforce the expectation that all of our customers benefit from information to unauthorized third parties the same experience and disclosures while in the dealership. that we are much better off relying on GPS Simply knowing the material is not enough – it is also technology to locate the consumer. necessary to present it the same way each and every time.

Staffing: Today’s best operators realize Policies and procedures are your friends here.

A CUSTOMERcollections is the most critical activity in While many organizations have sales personnel close the CENTRIC the BHPH business model, and they staff paperwork, it is important for all of us to consider whether that FOCUS IS appropriately. is still the right course of action in today’s environment.

PROVING TO BE An experienced, well-led collection staff So much rides on us getting it right that using dedicated, SUCCESSFUL with a strong incentive structure is the trained closing personnel to detail both parties’ rights and he combination most common template organizations obligations, the consequences of default, GPS disclosures, the of strong are going for. In fact, if you are going importance of on-time payments, etc., is the most common competition to overstaff anywhere in your approach used today. and increased organization, collections is the place Sell customers on the benefits of recurring electronic regulatory scrutiny has to do it. payments: The best performers around the nation are also created a challenging A good guideline is to look at the best at achieving and maintaining high recurring payment environment for BHPH your Monday morning opening penetration rates. dealers. contractual delinquency and Having high recurring payment penetration allows you Our business has probably plan on no more than 80-100 to better allocate your collection resources to the customers never been tougher – yet the delinquent accounts per who really need it, as well as making cash flow much more best operators are still thriving collector. That is important predictable. Since you cannot require recurring electronic despite the challenges. because it is necessary for payments, it is important to sell the benefits of the process and As our industry continues to your team to be able to maintain the effort throughout the life of the contract. evolve, forward-thinking dealers work each unpromised Build a relationship with your customer from Day 1: Your have adopted a customer-centric delinquent account every finance team should greet each new customer with a welcome focus to their lending and collection day, and having enough call that is positive and upbeat. Start out the relationship on a practices that are proving to be staff ready to go is part positive note. successful in retaining and advancing of that.

The best collectors listen to their customers and don’t their customer base.

Management and make them afraid to talk to them. If we are just another bill to The following list of best practices is training: Building customers, they will treat us just like another bill. far from exclusive, but it’s intended to effective teams Maintaining a relationship doesn’t mean you are easy or get everyone thinking about what can be means having you will accept every excuse for non-payment. It means not done in your operation to keep pulling our effective leaders. becoming adversarial. customers ahead.

Collection Use compliant communication methods that are convenient Underwriting and verification is critical leaders lead to the customer: Pretty much everyone has a smartphone to collection success: It is essential for every by example today, and millennial customers in particular seem to thrive on dealer to verify and document the customer’s and always alternative communication methods. ability to repay in their underwriting practices. keep the Modern-day collectors should take that into account and No one says you have to do a credit check, but communicate in a compliant manner consistent with the you should make sure the customer has enough customer’s lifestyle. verifiable monthly income to support the obligation.

Establishing contact is the key, and reaching out via (preThat can be tricky with all the methods available to authorized) SMS text messing or emails asking for a call back commit loan fraud, so it is important to know your can work more magic than multiple attempts on the phone. The local markets, thoroughly check the math on pay stubs upside potential is large, but it is essential that you explore the and be wary of non-W-2 income. rules thoroughly as well.

Have minimum income and maximum payment-toDeal with collection issues early in the process: Smart income qualifiers that actually work. Not everyone is going operators identify and resolve problems when they are small. to qualify for financing.

That is accomplished via probing questions designed to

T

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best interests of both the consumer and the organization in front of them.

Collection leaders should be reviewing account work and should hold their processes to a high standard. Working with their team members one-on-one regularly is also essential, as are never neglecting an opportunity to train and taking maximum advantage of outside training opportunities.

Leaders make sure their teams have the tools they need to keep their customers advancing.

Managing by the numbers – a balanced approach to collection management: There are four broad metrics that, taken together, determine the health and viability of a portfolio: • Contractual delinquency • Recency • Repossession rate • Cash collections The best performers look for balance and integrity in those metrics to make sure they are achieving the best results and advancing the most customers.

The goal is to grow or maintain the portfolio – not the repo lot.

GPS/starter interrupt/payment assistance devices: While not used universally, the best performers today tend to make use of modern payment assistance device technology as the tremendous collection tool it is.

COLLECTION LEADERS SHOULD BE REVIEWING ACCOUNT WORK AND SHOULD HOLD THEIR PROCESSES TO A HIGH STANDARD. WORKING WITH THEIR TEAM MEMBERS ONE-ON-ONE REGULARLY IS ALSO ESSENTIAL, AS ARE NEVER NEGLECTING AN OPPORTUNITY TO TRAIN AND TAKING MAXIMUM ADVANTAGE OF OUTSIDE TRAINING OPPORTUNITIES. The technology can and will drive contact. It is up to the collection team to take it from there and cure the delinquency.

I’ve become a big fan of the technology over the years as I’ve seen it help identify problems early and establish the contact so necessary for good collection practices. No technology will do your thinking for you, but it is a tremendous addition to a good collection process.

Stop doing field calls: If you are still field calling customers – stop.

This is a hot-button issue for federal regulators and there is far too much downside potential to continue the practice.

Most of the better operators have abandoned field calling. Apart from the regulatory issues, field calling is usually not worth the time and expense.

Continue to invest in the portfolio: Even the best vehicles need service. The best performers around the country have abandoned the “as-is” approach and typically offer robust warranties or service agreements as well as strong policy/ goodwill repair processes to help their customers when they need it.

They also limit the use of repair receivables to what is actually collectable.

Notes perform better when the customer is engaged in the repair process but it is critical not to over-obligate on a repair bill. The point is remove the mechanical breakdown excuse and keep the customer in the car.

I hope this “baker’s dozen” helps get your creative juices flowing.

It is time to elevate our processes and keep the best interests of both the organization and the customer in mind. The best operators will continue to thrive.

DAVID BROTHERTON IS A MODERATOR/CONSULTANT FOR NIADA DEALER 20 GROUPS. HE CAN BE REACHED AT DAVID@ NIADA.COM OR (941) 203-3580.

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← BHPH DEALER 19

BHPH ADVOCATE

THE SWEETEST VICTORY

BY SHAUN PETERSEN

SENATE VOTES TO REMOVE CFPB’S MISGUIDED ARBITRATION RULE Several months ago, I started a running routine.

OK, running might be a bit of an overstatement. I’m no David Andrews, the NIADA president who has run every day for almost 15 years. I saunter along more than run.

But one thing I have realized in my sauntering is having a playlist to listen to not only helps pass the time, it can help make the workout more intense.

When planning my playlist, I reflected on my high school wrestling days and recalled the music we wrestled to.

We had our fair share of Journey, Def Leppard, AC/DC and the like, but the one album we always worked out to was the Rocky IV soundtrack, with songs like Eye of the Tiger and Burning Heart.

So, with that reminiscing in mind, I downloaded the entire soundtrack and have been rumbling on as best I can.

Toward the end of the soundtrack – about the time my legs are ready to give out – the song The Sweetest Victory comes on to help push me to my front door.

I’ve been thinking about that song’s title a lot over the past weeks as we celebrate the sweetest legislative victory NIADA has experienced in my tenure with the association.

In July, the Consumer Financial Protection Bureau finalized its long anticipated arbitration rule, which banned certain companies – including automobile dealers financing vehicles – from using arbitration agreements that prevent consumers from participating in a class-action lawsuit.

The CFPB argued consumers were being prevented from taking their disputes to neutral parties and companies would be getting away with misconduct.

Somehow, the CFPB had the misguided notion that consumers would fare better in class-action litigation than in arbitration, even though the CFPB’s own research showed arbitration is a much faster, more efficient and better forum for consumers.

More telling were the results consumers get in arbitration compared to class-action lawsuits.

Again according to the CFPB’s own research, consumers fared much better in arbitration. The average recovery of $5,000 in arbitration is far greater than the recovery by the average consumer in a class action – less than $33.

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Meanwhile, class-action attorneys made hundreds of millions of dollars.

Dress it up any way you want, but the CFPB’s Arbitration Rule was nothing more than a boon to classaction attorneys while hurting the very consumers the bureau is supposed to be protecting.

Why do I say “was”?

Well, that is the sweetest victory!

There is a little known and little used statute – the Congressional Review Act – that permits Congress to remove any rule from a federal agency it does not believe to be appropriate.

In the past, the CRA has been used only rarely. But since President Trump’s election, the CRA has become a readily available tool for Congress and the administration to undo overburdensome regulations.

The CRA requires Congress to vote its disapproval of a regulation within 60 legislative days, and the House of Representatives wasted no time in passing House Joint Resolution 111 to repeal the rule.

At the same time, Sen. Mike Crapo (R-Idaho) introduced Senate Joint Resolution 47 – the Senate version of the CRA resolution to repeal the CFPB’s rule.

Things move much slower in the Senate than in the House, so we had much work to do to rally senators to support the resolution.

We knew it was going to be challenge to get the required 51 votes needed to pass the resolution, especially after Sen. Lindsay Graham (R-S.C.) publicly came out against the resolution in early August.

Nevertheless, NIADA made the passage of this resolution a high priority.

We descended on Capitol Hill multiple times – including our National Policy Conference in September, attended by more than 200 dealers and industry partners – to explain to senators and their staff the harm this rule would bring to consumers in the form of increased costs for cars and credit. For credit-challenged customers, this could have proven too much for them to get financing.

From late summer into fall, we heard from multiple sources that the resolution was going to pass – and from others who said there simply were not enough votes.

Then as I was sitting in a hotel lobby with Steve Jordan and Jeff Martin having just watched the final pitch of Game 1

NIADA MADE THE PASSAGE OF THIS RESOLUTION A HIGH PRIORITY. WE DESCENDED ON CAPITOL HILL MULTIPLE TIMES – INCLUDING OUR NATIONAL POLICY CONFERENCE IN SEPTEMBER, ATTENDED BY MORE THAN 200 DEALERS AND INDUSTRY PARTNERS – TO EXPLAIN TO SENATORS AND THEIR STAFF THE HARM THIS RULE WOULD BRING TO CONSUMERS IN THE FORM OF INCREASED COSTS FOR CARS AND CREDIT. FOR CREDITCHALLENGED CUSTOMERS, THIS COULD HAVE PROVEN TOO MUCH FOR THEM TO GET FINANCING. of the World Series, I got a text that the Senate voted to pass the resolution by a 51-50 vote, with Vice President Mike Pence breaking the tie.

President Trump signed the resolution a week later.

Thanks to you, the dealers, contacting your senators, and to the NIADA staff and leaders working hard to champion our cause, we are able to raise our hands high in a huge win for our customers.

Indeed, it is the sweetest victory.

Now, let’s run a victory lap to celebrate – I’ll saunter along behind you.

SHAUN PETERSEN IS NIADA’S SENIOR VICE PRESIDENT OF LEGAL AND GOVERNMENT AFFAIRS.

DECEMBER 12-13

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