WEST COAST
DEALER
THE OFFICIAL MAGAZINE OF INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION OF CALIFORNIA | DECEMBER 2019
PAST PRESIDENT TERRY DEGMETICH PRESENTS
Quality Dealer of the Year Award TO GREG MEIER OF DIABLO MOTORS PAGE 7
DALLAS, TEXAS Permit No. 2079
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ASSOCIATION NEWS |
By Mike Macaulay
PRESIDENT’S MESSAGE
Labor of Love
Index
05......................Reasons a CRM Can Boost Sales 06..........................Executive Director’s Message 07................................. IADAC 2019 Quality Dealer 08.........................51st Annual IADAC Convention 12............................................ Advantages of CPO 14..........NIADA Unveils Used Car Industry Report
Advertisers Index
Lobel Financial.................................................... 3 NADA Show.........................................................13 Manheim............................................................. 11 NextGear Capital..............................................6-7 vAuto................................................... Back Cover Warrantech...................................................... IBC
What’s New
F U E L S AV I N G S : Ta k e A d v a n t a g e o f Membership Benefits
Though colder winter temperatures can decrease your fuel economy, NIADA can still help you save money. Members across the country keep the number on the pump low with special fuel discounts that can save big. Access your fuel savings here: niada.savings4members.com/ programs/mySavings.spr.
Office
For information on how to become a member please contact larry@IADAC.ORG or 916-893-3306.
NIADA Headquarters NATIONAL INDEPENDENT AUTOMOBILE
DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838
For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. West Coast Dealer 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 West Coast Dealer 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 © 2019 by NIADA Services, Inc.
STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITORS Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT Jeffrey McQuirk • jeffrey@niada.com PRINTING Nieman Printing
4 WEST COAST DEALER DECEMBER 2019 WWW.IADAC.ORG
October 2019 brings the 20th anniversary of my election as IADAC president for 1999-2000. Now here I am again! I really appreciate the honor and trust bestowed by the IADAC board in electing me to this position once again. Our political climate has changed since my first presidency, but my work as West Coast Dealer chair/editor has kept me in the loop. There are advantages, as I see it, for me taking over as president. I have a long range perspective of our industry. My start was in 1968 driving cars for a wholesale dealer. I met most of the Sacramento area dealers and learned there are as many ways to be successful as there are individual dealers. Everyone has their own way that works for them. IADAC members are individuals – finding success in the industry we all love. After almost 40 years of retail, my business is now wholesale only. Thus I have time to devote
to our industry. To me, it is a labor of love. I love our industry and want us to prosper with a level playing field. We have built, over many years, a trust with our regulatory agencies. They view IADAC members as “the cream of the crop,” meaning we care enough about our businesses to make our words and actions count. Please display your IADAC member certificate proudly. Make sure any regulatory visitor knows of your membership. You will get immediate, deserved respect. In my retail days, all my ads mentioned IADAC membership. Feel free to contact me directly with any questions or concerns at carsystems40@ yahoo.com. I will answer all questions or have a subject expert contact you in a timely manner. Good selling to all! Mike Macaulay is IADAC president and West Coast Dealer chair/editor.
IADAC PAST PRESIDENTS GUS CAMACHO, 2015-2017 ROCCO DELAPA, 2013-2015 ROD DAVIS, 2010-2013 DAVID AAHL, 2009-2010 TERRY DEGMETICH, 2007-2009 LUIS ESTRADA, 2006-2007,
2001-2002, 1989-1990 ROGER HANKE, 2004-2006 PEANUT RENFROW, 2003-2004, 1996-1997 FRANK GROMAK, 2002-2003 MIKE MACAULAY, 2000-2001 BOB HENRY, 1998-2000 RAY FOREST, 1997-1998 REX RODEN, 1995-1996 DOUG ROBERTS, 1994-1995 ED DOHNT, 1993-1994
OPIE HENDRICKS, 1992-1993 MANNY PADILLA, 1991-1992 GREG HODGES, 1990-1991 JERRY COWGILL, 1988-1989 DON HEAD, 1987-1988 JOHN BRAUN, 1986-1987 RAY GLOVER, 1984-1986 PAT MATLACH, 1983-1984 LARRY BRASHER, 1982-1983 TOM FIELD, 1981-1982 JIM MCCABE, 1980-1981 ROY WILHITE, 1979-1980 LEONARD BOYD, 1978-1979 JORDAN SUGARMAN, 1977-1978 BOB DUTTON, 1976-1977 TOM KENT, 1975-1976 JIM MITCHELL, 1974-1975
VIC SNYDER, 1973-1974 FRANK HAMMER, 1972-1973 MANUEL ROGERS, 1971-1972 JOHN HIATT, 1970-1971 DOUG ALMAN, 1969-1970 BOB SCORDINO, 1968-1969 LUCKY SKYRME, 1966-1968 LEONARD CRAVENS, 1964-1966, 1960-1961
WALT HOWEY, 1962-1964 TRAVIS GODBOLD, 1961-1962 WENDALL ANDERSON, 1959-1960 DICK RAFFERTY, 1957-1959
HONORARY PRESIDENTS
FRANK MURRAY RICK GOMEZ
EXECUTIVE COMMITTEE CHAIRMAN OF THE BOARD Brenna Stansberry
VICE PRESIDENT Guy Strohmeier
Park Marina Motors Redding, CA
Auto Center 87 Soda Bay Rd Lakeport, CA
TREASURER Tony Harb
PRESIDENT Mike Macaulay
VICE PRESIDENT Brittany Hibdon
Car Systems carsystems40@yahoo.com
Hibdon Auto Center Orland, CA
SECRETARY Tom Brasher
SR. VICE PRESIDENT Beto Beas
VICE PRESIDENT Bruce LaVergne
Beas Auto Sales Stockton, CA
Pacific Auto
JustBetterCars.com
CarMetric Tom@carmetric.com
MANAGEMENT MATTERS | By Zach Klempf
WHY INDEPENDENT DEALERS NEED AN AUTOMOTIVE CRM
Reasons a CRM Can Boost Sales Independent dealers wear so many hats it’s hard to keep track. This means important tasks can fall through the cracks. For example, lead management. Every dealership needs a systemized and repeatable sales program. Large franchise dealerships do this regularly, but many independent dealers feel they are too small. Why? Because the tools required to run a systemized sales program – namely, a customer relationship management platform – are too expensive and clunky for a smaller operation. Luckily, there are new CRM tools designed specifically for small and independent dealerships. Using a CRM can have a major impact on your bottom line, and might even help you let go of a few hats. Here are the main reasons automotive CRMs help independent dealerships boost sales. Lead Management New leads come in from various sources – third party sites like Cars.com, social media, your website form, and walk-ins. Many principals and sales managers simply use their email inbox – or worse, pen and paper – to track new potential customers. This causes missed opportunities and misplaced information. Dealerships need a way to track new leads and store them in one place. This is the fundamental purpose of a CRM. Whether you get two leads a day or 200, every dealership needs a lead management tool to maximize their opportunities with new customers. Successfully using a CRM requires a commitment to entering customer data and keeping it updated. Some CRMs offer tools, like a mobile license scanner, that automatically import a customer’s information. Data entry might seem like a hassle at first, but it makes each customer interaction easier, and your sales will benefit because of it. Auto-Responses to New Leads In today’s Internet-driven world, the casual window shopper that calls your dealership or walks onto your lot is all but extinct. The research phase of the car-buying process is now done online. When a potential customer does reach out, they are ready to buy. Dealerships need to act fast to take advantage of a new lead. According to a Harvard Business Review study, salespeople who contacted a lead within one hour were seven times more likely to qualify them, and 60 times more likely than those who waited over 24 hours. But most principals and sales managers can’t just drop what they are doing to respond
to a new lead. That’s where an automotive CRM can make a massive impact. Many CRMs have auto-response features that allow you to reply to a new lead instantly. Some CRMs even let you customize the message based on the lead’s information. Your local dealership market is highly competitive. The difference between making a sale and losing out to a competitor could simply be how quickly you respond to a new lead. Automotive CRMs let you automate this process so you are first to respond every time. Streamlined Communication So much of the sales process today happens before a customer arrives at the dealership. This makes communication with the customer more important than ever. CRMs help you keep track of all customer conversations, whether they happen via phone, text, or email. Look for a CRM that has these features: Texting platform: Texting is a great way to communicate with customers, especially millennials. Studies have found 98 percent of millennials read all of their texts, but only 22 percent read all of their emails. Texting through your CRM platform ensures all communication with a customer stays within the company and is TCPA compliant. Call management: Even with texting and emails in the mix, phone calls are still the most common way we connect with customers. They are also pivotal touchpoints when building a relationship. Some automotive CRMs allow you to record each phone call for quality assurance and training purposes. In the event of a dispute, these calls also serve as the record of truth for fast resolution. Email: Emails can easily get lost in the shuffle. Your CRM system will not only keep your email organized, but will connect each message to a customer’s profile so you have an accurate thread of communication. Lead Nurturing A successful sale does not happen all at once. It is made up of numerous interactions, from the time a customer visits your website to the time they purchase their first vehicle. As a principal or sales manager, you need to ensure these interactions go perfectly for every customer, every time. Lead nurturing can make a huge difference in your sales numbers. Strategic found nurtured leads increased sales opportunities by 20 percent compared to non-nurtured leads. What would your business look like if you increased sales by 20 percent? CRMs systemize the relationship-building activities we all know are so important. It makes the job easier for salespeople and
creates a consistent experience for your customers. For example, you can create a task that automatically reminds salespeople to follow up with a lead if they don’t respond after two days. After a lead leaves your dealership, the salesperson will get another reminder to send a text message thanking them for their time. But nurturing leads should not stop once you make a sale. Post-sale lead nurturing is just as important. For example, you can schedule follow-ups to check in with customers a day, week, and month after their purchase. Existing customers are far more likely to buy from you again than new leads. Post-sale lead nurturing turns one-time buyers into lifelong customers. This level of organization in your sales program is only possible with a CRM platform. Implementing a CRM A CRM is not a magic bullet. You will not see results overnight. CRMs provide a framework to organize and run your sales program, but doing so will require buy-in from your entire team. Success with your new CRM is directly connected to the effort you put into using it. Your sales team must commit to using the tool to track all leads and communication. As a manager, you must set up the proper lead nurturing workflows and ensure your team follows them. Getting used to the new system will take everyone some time. Commit to using your new CRM tool for at least 90 days before you expect to see results. If you’re like most successful dealerships, you will start to wonder how you ever survived without a CRM in place. Getting Started with Your Automotive CRM If you are ready to put down those hats and start growing your dealership, a CRM is a critical step in the right direction. A CRM will help you and your sales team wow customers with fast service and thoughtful follow-ups. It will keep your customer data organized and your salespeople compliant. Most importantly, it will drastically improve your sales. Every dealership will benefit from using a CRM, but not every CRM is built for every dealership. Independent and BHPH dealerships have unique needs, so it’s important to find a CRM built for you. Zach Klempf is founder & CEO of Selly Automotive. He can be reached at 415-562-7104 or zach@a1softwaregroup. com.
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DECEMBER 2019 WEST COAST DEALER 5
ASSOCIATION NEWS | By Larry Laskowski
EXECUTIVE DIRECTOR’S MESSAGE
IADAC Updates
At the recent 51st IADAC annual convention, DMV investigations chief Tom Wilson discussed the evolving problem of auto theft by fraudulent means. While you do your best to protect your inventory, thieves are working late hours to outsmart you. Trends have been shifting for some years. Now, thieves are less likely to punch a door lock and ignition and steal a vehicle off the lot at night. Today’s car thief will likely try to trick you into handing them the keys. You’ll be thinking you just made a sale but will find out hours or days later you were duped. Each of our guest speakers at the convention had important messages to help dealers. How IADAC communicates information in the future may change, including the likelihood that this magazine, West Coast Dealer, will be terminated. To ensure you continue receiving industry news, please sign up to receive our free newsletter. You’ll find the link on our homepage at www. iadac.org, located just above the Lobel ad on the right side. Many of this year’s convention attendees were first timers, though many were those who come year after year. Positive reviews
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about the content and single-day format were shared by many convention guests. Please note my sincere thanks to all who attended. When my youngest son was practicing karate, one of the lessons that stuck with me involved foot techniques and movement. The instructor said the fastest way to move forward was to first take a small step back. I think we all can learn something from that. If we are racing through every day making snap decisions without thinking carefully we could be our own worst enemy.
I ran into an IADAC dealer-member recently who overheard a discussion about the current doc fees. He’s a guy who always appears busy, with many things going at once, and rarely has time to read IADAC’s newsletter. He was shocked to learn the doc fee has increased twice and is now $70 for regular dealers not using electronic titling. He was still charging the $55 doc fee from 2011! Using an average of 20 cars per month since 2012, this dealer missed out on over $19,000 just in the doc fee increase! The lesson is that sometimes you can be working so feverishly you cost yourself money or miss an opportunity. Small details can definitely add up to big savings. I’ll leave you with these thoughts. IADAC is a non-profit association. IADAC relies on member support through annual dues. IADAC is the only group looking out for independent dealers. VIP auction cards provide discounts at most major auctions in California, which easily return more than the $299 annual dues. Your support means we can continue representing California’s independent dealers. So what are you waiting for?
DEALER SPOTLIGHT
GREG MEIER OF DIABLO MOTORS
IADAC Quality Dealer Award 2019 Congratulations to Greg Meier of Diablo Motors for receiving the 2019 IADAC Quality Dealer Award! Here is more from Greg: I’ve always had a passion for cars. I got my first job at 15½ at a Shell service station in Concord. I didn’t have a car yet but that job allowed me to be close to cars. I couldn’t wait to save enough money to buy one. In college I bought and sold a few cars to help pay for the costs of school (and beer). Despite my attraction to cars I studied drafting and architecture. Once I was out of college, I landed a job with an architectural firm. But that really didn’t seem to satisfy the yearning for cars. From there I got a job teaching large corporations how to increase productivity with recognition award programs. My job had me driving a lot so I traded into lower mileage vehicles every six months or so. That worked fine until DMV came knocking and said I was buying and selling too many cars. I told them I thought the limit was four per year, and I wasn’t doing that many. I was paying the taxes and registration, so what was the problem? I was told that if they could prove I was profiting, I would need to get a dealer’s license. I got my first dealer’s license in 1994. I had
two spaces at a San Ramon office building and was doing the reconditioning in my home garage. I grew into a cheap, ugly warehouse and eventually into the fancy boulevard location I have now. We now offer full service and detail, plus accessories such as tires and wheels. Diablo Motors specializes in European highline vehicles, mostly in the $20,000-$60,000 range, and mostly 1-3 years old. Our repeat and referral customers make up 50 percent of our business and I credit a great staff and solid ethics for that
achievement. I am very involved in my community. We sponsor numerous events and love doing that. We’ve been involved with the historical society, chamber of commerce and various charities. Diablo Motors is what it is today as a result of hard work, long hours by our staff and a tolerance by friends and family members recognizing that 60-plus hour work weeks are normal. Our dealership treats our customers like we want to be treated, which contributes to our success.
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DECEMBER 2019 WEST COAST DEALER 7
ASSOCIATION NEWS
51 THE
ST
ANNUAL IADAC CONVENTION A Huge Success
Left to Right: Newly installed president Mike Macaulay with past presidents Terry Degmetich and David Aahl.
Left to Right: DMV Director Steve Gordon, DMV Chief of Investigations Tom Wilson, and New Motor Vehicle Board Executive Director Tim Corcoran.
Drew Tate with Fisher Phillips presenting on California labor laws.
DMV Investigations Chief Tom Wilson (left) with Mehdi Chitgari (middle) and Jack Duffner (right).
This year’s annual convention attendance was significantly higher than previous years and dealers had plenty of good things to say about it. The first session included new DMV director Steve Gordon, who is quickly coming up to speed on industry issues, and investigations chief Tom Wilson. Dealers appreciated being able to communicate directly with DMV representatives and learn about the many issues DMV addresses for dealers. Chief Wilson stressed the high rate of fraudulent transactions that often costs dealers dearly. They can be very difficult to expose but defrauded dealers can report suspicious activity. Wilson suggested dealers “listen to your gut” when you suspect something is not right. A lawsuit seminar was presented by Ali Rakhshanifar with Auto Legal Group to counter increasing liability due to lawsuits. IADAC chairman of the board Gus Camacho presented a session on subprime and repossession best practices. Drew Tate with Fisher & Phillips presented updates on California labor law with Kristin Kelly and Sara Smith discussing insurance products specifically for auto dealers. Zach Klempf with Selly Automotive helped attendees understand the millennial thought process and why it is important to “speak their language.” The President’s Award went to Mark Glover with Southern Hills Acceptance for his success in signing new members. David
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2019-2020 Executive Committee
Aahl, general manager of North Bay Auto Auction, received a crystal award for the most new members signed up and Ailene Short, occupational licensing manager, received IADAC’s Lifetime Achievement Award. The 2019 Quality Dealer of the Year award went to Greg Meier, owner of Diablo Motors in San Ramon. You’ll see Greg’s bio elsewhere in this issue. Installed by past president Terry Degmetich, the new executive committee is as follows: • President: Mike Macaulay • Sr. Vice-President: Beto Beas • Vice Presidents: Brittany Hibdon, Guy Strohmeier and Bruce LaVergne • Treasurer: Tony Harb • Secretary: Tom Brasher Brenna Stansberry, as outgoing president, will become chairman of the board. IADAC thanks Brenna for two years as president! An interesting note is that Mike Macaulay was president of IADAC exactly 20 years prior! This new convention format allowed dealers to catch up on important topics without being away from their stores for multiple days. A So Cal dealer could fly up to Sacramento for the event and be back at his or her dealership that same evening. We’ll continue to fine tune this new format. We know your time is valuable and we’ll always be respectful of that. The supporting cast for this show came in the form of the vendor expo. The newest products and services were available for
test drives. Dealers should always be on the lookout for ways to add profit and ease to the normal routine. IADAC thanks our event sponsors. Without them an event such as this is not possible. Please recognize these vendors as pillars in our industry and support them as they support you: • Advantage GPS • AUL Corp. • Auto Data Direct • AutoZone • Nationwide West • Peak Performance Team • RunBuggy • Vitu Light Past president Don Head reported nine scholarship winners received $1,000 each this year. At the convention, generous donors raised over $10,000 to replenish the fund. Young men and women who have received this award have gone on to successful careers. They qualify when a parent has been a dealer member of IADAC for at least two full years prior to application. You ask, “What did I miss by not attending?” You missed the tips and suggestions that keep you behind your competition who attended this event. You missed the camaraderie of chatting with others. You missed on new products and services. We highly recommend trying harder to attend next year’s event! Special thanks to all those who helped make this event a success!
DEALER SPOTLIGHT
ADESA GOLDEN GATE ANNIVERSARY SALE
Record-Breaking Sale
ADESA Golden Gate’s record-breaking 17th anniversary sale on October 8 featured $15,000 in prizes for a huge crowd of buyers and sellers. Golden Gate general manager Jeff Hoyt noted 3,400 vehicles were consigned during the anniversary sale and 2,150 sold for a solid sale percentage. Live music played as dealers entered the lobby, which was full of decorations to set the tone for the sale. AFC manager Mark Cota announced special promotions to further incentivize buyers.
IADAC Chairman of the Board Brenna Stansberry presenting president’s award to Mark Glover.
General Manager Jeff Hoyt (left) with Tony Nino of Barocci Motors.
Brenna Stansberry presenting David Aahl of North Bay Auto Auction with a membership achievement award.
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DECEMBER 2019 WEST COAST DEALER 9
ASSOCIATION NEWS
JOSHUA M. HARDT SCHOLARSHIP FOUNDATION
Pacific Auto Honors Local Fallen Hero Bruce LaVergne and Nader Zaker, owners of Pacific Auto in Auburn, Califonia, created a scholarship in the name of a local fallen hero, Joshua M. Hardt. Their donation of $10,000 started the fund that will benefit senior class graduates of Placer High School seeking higher education. There are plans to hold a fundraiser in April 2020 to further build the fund, which provides recipients with $2,500 toward continuing education. Joshua’s bio is below. Congressman Tom McClintock took the floor at the House of Representatives to honor and remember Joshua. A video of his tribute can be viewed at https://youtu. be/fl3GBme8jWA. Joshua M. Hardt was born September 6, 1985, in Manteca, California, and raised in Northern
10 WEST COAST DEALER DECEMBER 2019 WWW.IADAC.ORG
California. He attended Placer High School and graduated with the class of 2004. A talented football player, Joshua was named to the 2003 All Sierra Foothill League Team as an outside linebacker and his high school later retired his helmet. Joshua joined the U.S. Army in 2006 and began his basic training at Fort Knox. He took advanced training at Fort Knox as a Cavalry Scout. He moved to Fort Stewart in Hinesville, Georgia, for his first duty station and was in the 3rd Infantry Division. From 2007 to 2008, Joshua served his first deployment to Iraq, along with his brother Jonathon. Upon completion of his first tour, Joshua was stationed at Fort Carson in Colorado and was promoted to the rank of Sergeant.
On October 3, 2009, Army Sergeant Joshua M. Hardt was killed in action while serving in Afghanistan with the 3rd squadron, 61st cavalry regiment, 4th Brigade combat team, 4th Infantry Division from Fort Carson Colorado Springs. Devoted to his wife and high school sweetheart, Josh believed a military career was the best way possible to provide for his wife and contribute to his country. He has been awarded the Bronze Star, Purple Heart and other medals and commendations for his bravery and distinguished service. Joshua was a great son, husband, brother, friend and hero to many. For those who would like to donate to this cause, please contact Bruce LaVergne at 916-390-3774 or brucelavergne@gmail.com.
SALES MATTERS | By Danny Delich
ADVANTAGES OF CPO
A Customer Favorite
As a dealer, the advantages of selling Certified Pre-Owned vehicles are varied and many but reduced to the common denominator: a properly utilized CPO program will help you sell more vehicles. Why, you ask? Peace of mind. For the customer, a CPO program puts the vehicle and your dealership a cut above the rest. It’s a promise of a quality used vehicle without the risks normally associated with the marketplace. Let’s face it, used car dealers don’t have the world’s best reputation, and the fear of buying “someone else’s problems” or a “lemon” can be very real and daunting for the average consumer. A CPO program eliminates this fear by assuring them a quality vehicle. This is accomplished through a rigorous certification process that puts each vehicle through a formal reconditioning process, dictated by an extensive inspection checklist that ranges from mechanical to safety to performance to cosmetics – and beyond. And this is on top of a Carfax or other title verification report as well as age and mileage qualifications. These qualifications tell your customer the
vehicle is sound, inside and out. In addition to the inspection process, a limited warranty is included to further reassure your customer they won’t be hung out to dry in case of mechanical problems. These limited warranties vary widely in terms of coverage and length, though most include roadside assistance and provisions for a loaner vehicle if their vehicle is held for covered repairs. These benefits raise the perceived – and actual – value of the program in the eyes of the customer and give peace of mind that makes it worthwhile for the customer to pay a little more for a CPO vehicle – and they realize that. Even though the cost of a CPO vehicle is a bit higher, your customer saves money in other ways – on depreciation, for example. According to Carfax, a typical new vehicle loses over 20 percent of its value in the first year of ownership. That means a $30,000 new vehicle will be worth $24,000, or less, just one year later. Naturally, any vehicle will continue to depreciate as it ages, but for a CPO vehicle it is at a much slower rate. Certification allows the customer to buy
ASSOCIATION NEWS | By Mike Macaulay –
AUCTION NEWS | By Auto Remarketing Staff
EDITORIAL MANHEIM COMMENT REVEALS 2 NEW GMS IN ITS WEST REGION
West Coast Dealer Chair/Editor
Discontinuation of Magazine
This issue of West Coast Dealer will be the last produced by our parent organization, NIADA. Previously, NIADA has prouced our and many states’ magazines, but will discontinue this program as of 2020. Because the readers and advertisers of West Coast Dealer care, IADAC will continue to provide “real time” industry information through our website, www.iadac.org, as well as our “Industry News” email bulletins. If you don’t receive these, please sign up through our site. I have personally served our magazine in some capacity for over 25 years. I believe the West Coast Dealer has served our dealer membership, associate membership, and advertisers for the many years and we will continue to disseminate timely and relevant information through our website.
12 WEST COAST DEALER DECEMBER 2019 WWW.IADAC.ORG
New Leadership at Manheim Nevada
Manheim recently said it’s continuing to follow its strategy to promote talent from within the company. As a result, Manheim announced two new general manager selections at locations in the West. Assuming new leadership roles are Eddie Lafferty at Manheim Seattle and Danny Brawn at Manheim Nevada. Lafferty has been named general manager of Manheim Seattle. A 30-year veteran of the automotive industry, Lafferty has extensive experience in both retail and wholesale operations. He joined Manheim in 2008 as
an “almost new” model for less, which will better hold its value until they’re ready to pass it on to the next owner. Plus, with more flexible programs allowing certification on a wider range of older vehicles, many consumers choose to buy a much nicer, higher-line vehicle than they could afford new. And they can enjoy this advantage without worry because though the vehicle is older it carries the certified brand and the assurances associated with it. Sounds pretty good for the consumer doesn’t it? But it’s a win for you as well. A CPO program not only helps you sell more vehicles, more quickly, at a higher price but also increases repeat and referral sales making profits today and tomorrow. Who wouldn’t return (and refer their friends) to a dealership that was able put them into the vehicle of their dreams without the usual worries of a used car purchase? With the knowledge they’re covered by a limited warranty? Secure they’ll never be stranded on the side of the road? And with the reassurance they’ll have a ride to work even if the car is in the shop for a covered repair? I know I’d be a customer for life, and I’d send my family. Danny Delich is the senior vice president at Peak Performance Team. He brings more than 30 years’ experience in the automotive industry, including ownership and operation of independent and BHBH dealerships.
fleet lease manager, before being promoted to assistant general manager for Manheim Seattle. Most recently, Lafferty was GM of Manheim Nevada. Under his leadership, the auction location nearly doubled its financial performance in four years and won several client and industry-related awards. Brawn, in turn, has assumed the role of general manager of Manheim Nevada. Brawn joined Manheim in 2005. His previous positions with the company include regional sales manager for the northwest market, assistant general manager at Manheim Phoenix, as well as a variety of sales roles across Manheim Portland, Manheim Kentucky, Manheim Orlando and Manheim Nashville. Most recently, Brawn spent four years as GM of Manheim Darlington. Brawn also serves as a leader in the industry and his community. He is currently vice president of the National Auto Auction Association’s Southern Chapter and 20182019 chairman of the Greater Darlington Chamber of Commerce. “Developing strong leaders is a key element of Manheim’s growth strategy,” Manheim West regional vice president Julie Picard said. “Eddie and Danny have each served in roles of increasing responsibility at Manheim for more than a decade, gaining knowledge of our business and developing the skills necessary to enhance the client experience and drive results. I’m thrilled to see how they’ll excel in these new roles.”
ASSOCIATION NEWS
2 0 19
A PUBLICATION OF THE NATIONAL INDEPENDENT AUTOMOBILE DE ALERS ASSOCIATION
Most Comprehensive Picture of the Used Vehicle Industry
Section 06 LOOKING
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THE USED
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SOURCE:
3-YEAR-OL D VEHICLES ALL FRANCHIS MAKE UP ED USED 23% OF SALES
Edmunds
The composition of sales has transformed franchised used vehicle old vehicles dramatically. Three-yearmore sales accounted for 8.5 percentage in points representing 2018 than they did five margin. As the most-sold vehicle years earlier, a lease returns consequence of the age by a wide record number expected expected in 2019, this of to generates increase. And this flood figure is only more opportunities of inventory vehicles to for dealers differentiate to certify sales of vehicles their 5 years and inventory. Meanwhile, in volume, older creating a vehicles. scarcity of have dropped off more affordable used
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FOR MORE INFORM www.cox autoinc.c ATION, VISIT om/news
To view the room full 2019 Cox & Outlook Automotive (CAMIO) flipbook, Market newsroom and click CAMIO. go to www.coxaut Insights section for Visit the Market oinc.com/ regularly-up a comprehens Insights dated data and information ive list of industry affect the on new- and used-vehicle drivers and topics that markets.
Automotive lending has been robust Auto loan originations throughout in dollar volume this growth billion, breaking cycle. in 2018 increased the previous In the fourth according record of to $584 quarter of to the $569 billion 2018, the to subprime set in 2017, loan originations, Federal Reserve Bank share of auto borrowers loan origination of New York. was 19.3%, 2018 was down from of the data For auto the highest up volume its recent for auto loan year in the peak of 25.4% from 18.9% the prior originations 19-year history in used sales year and in the second Of consumers (in nominal more than quarter of terms). Growth offset the with active prices for 2015. decline in defines them both new credit, 20% new, and and used have a score as subprime, higher vehicles drove that according Judging from up loan amounts. to Equifax. The share the of subprime readily available, new loan origination lending to be healthy volumes, which is helping and sustainable today appears credit remains to keep demand subprime as it is normal borrowers SUBPRIME robust. for to be represented LENDING according AT HEALTHY A key measure to their proportion in auto LEVELS of health and of the population. loans number of stability in Auto lending loans being auto lending is diverse, made to subprime there was is the resilient and Auto lenders plenty of credit reactive to borrowers. can tolerate 2017 and available market trends. Overall, lending markets more risk consumers in compared because the took advantage 2018 compared to borrowers to other types valuation and risk is worth were of that. More of recovery help the reward. used vehicles able to obtain loans subprime limit losses Ease of on both new in even in the A first auto vehicles and The implication 2018 – a leading reason loan, especially event of default. is for that lenders overall sales the beginning for a young, loans given lower-incom growth. of low unemploym saw advantages e borrower, building credit. the move up the social in subprime ent and low is often ladder and Data from delinquenci are correlated. a crucial part Equifax show es. of that age and An adult under have a credit credit scores 35 is more score under than 50% 620 compared more to the broader likely to AUTO LOAN population. ORIGINATI ON $ BY CREDIT SCORE
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NIADA UNVEILS 2019 USED CAR INDUSTRY REPORT
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NIADA presents its 2019 Used Car Industry Report, an annual array of facts and statistics that provide the clearest, most comprehensive picture available of the state of the used vehicle industry and the trends shaping its future. The report, which was unveiled in September at the NIADA National Policy Conference in Washington D.C., was delivered to association members along with the October edition of Used Car Dealer. It’s also available online – free for NIADA members and for purchase by non-members – at www.niada.com. The report includes new insights into familiar areas, including the 2019 Car Buyer Journey Study from Cox Automotive, an important look at the customers purchasing used vehicles and how they shop; Edmunds’ Used Vehicle Outlook, including CPO data; GoldStar by Spireon’s look at GPS technology’s effect on the impact of impound fees; CarGurus’ section on auto buying patterns by body style; and the latest on digital consumer
experiences in auto finance from RouteOne. The report also explores new areas, such as Dominion/Cross-Sell’s look at Carvana’s business model and how to compete with it, Carfax’s research into merchandising in today’s digital world, tips from Home Loan Investment Bank to help customers get credit application approvals, TrueCar’s study of trade-in process trust issues, insight into dealer ROI from Autosoft and a section detailing the rise of mobile chat and lead generation data through that growing marketing medium from new NIADA industry partner OfferUp. And, of course, the Used Car Industry Report includes the staples – NIADA’s member and business confidence surveys, Buy Here-Pay Here benchmarks from NABD, Subprime Analytics and NIADA Dealer 20 Groups, used car sales by channel by month from J.D. Power/NADA Used Car Guide, information on the auto finance market from Equifax, Black Book’s retention values analysis and Auction Perspectives from industry leaders.
ACCELERATE | By GWC Warranty
SELLING TO THE INFORMED CUSTOMER
Strategic Approach
Today, more than ever before, customers are walking through your doors with a plan and a price in mind. It’s a dangerous situation that can cut into your margins if you aren’t prepared to teach them something they don’t already know. So how do you combat this type of consumer approach when you’re priced competitively and you can’t sacrifice any more off your margins? Certify Your Lot Certified Pre-Owned programs aren’t just for franchise dealers, but you can thank them for the cachet behind the name. Explaining to your customers your price includes shortterm coverage from expensive repairs shows them you’re providing an assurance of a quality vehicle – something they can’t deny demands a higher-than-normal premium. Explain Reconditioning Continuing to build on the fact higher quality vehicles demand a higher price, you
14 WEST COAST DEALER DECEMBER 2019 WWW.IADAC.ORG
can go into detail with your customers about the work you’ve done to get that vehicle ready for them. Showing you’ve inspected the vehicle for common problems with brakes or replaced tires and fixed cosmetic problems explains value no third-party website can account for. Back-End Products If a customer is surprised by a monthly payment that includes vehicle service contract coverage, you can explain how the tools they used to come up with a monthly payment don’t include the price of a service contract. If a customer sitting across from you is sensitive enough about a monthly budget to do all these calculations ahead of time, they’ll also be sensitive to what a major repair could do to that same monthly budget. Educating customers on the cost of common repairs and how damaging that can be to a tight budget will help demonstrate just how valuable that relatively minor added monthly cost for a VSC can be.