CRAIGSLIST 101: BEST PRACTICES ALSO Mobile Commerce Takes Center Stage PLUS Carfax Debuts Mobile App for iPhone
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INSIDE
MAGAZINECONTENTS 8 Mobile Commerce Takes Center Stage 12 Craigslist 101: Best Practices 18 Carfax Debuts Mobile App for iPhone
NIADA/Manheim Community Service Award Manheim, the world’s largest provider of vehicle remarketing services, cares about its employees, the environment and the communities it serves. From fundraising drives and tutoring kids after school to supporting long-term conservation efforts, Manheim and its employees are dedicated to giving back to their communities and know independent vehicle dealerships across the country share in this commitment. For the first time this year, Manheim is recognizing and honoring those dealerships by awarding the 2011 National Manheim Community Service Award at the 65th NIADA Annual Convention and Expo. For more information, contact Georgia Brown, NIADA director of education, at 817-640-3838 or download the nomination form at niada.com (click on the Manheim Dealers Edge link under the Services tab).
ADVERTISERSINDEX ADESA .............................................................. 15 AutoTrader.com .................................... Back Cover Brasher’s Northwest Auto Auction.... Inside Back Cover Cars.com......................................Inside Front Cover Chase ................................................................ 9 Manheim.com .................................................... 11 NIADA.TV ........................................................... 4 Smart Auction ...................................................... 5 Western General / Protective ................................ 7
NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV
NIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR TROY@NIADA.COM Under The Hood is published bi-monthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203; phone 817-6403838. 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 individual authors and do not necessarily represent the views of Northland Dealers or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of or NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2009 by NIADA Services, Inc. All rights reserved.
Chairman of the Board Bobby Petersen Fairly Reliable Bob’s Phone: (208) 342-7777 Fax: (208) 342-7865 2304 Main St. Boise, Id. 83702
President region 2 Kyle Durham Dale’s Auto Sales Phone: (208) 336-8230 Fax: (208) 336-1185 3200 Chinden Blvd. Boise, Id. 83714
ViCe President at Large Allen Anderson A & S Auto Sales Phone: (208) 677-2743 Fax: (208) 677-2743 1038 Overland Burley, Id. 83318
President Cathy Sexton Sexton’s Car Collection Phone: (208) 552-2277 Fax: (208) 552-2266 585 E. Anderson Idaho Falls, Id. 83401
ViCe President region 2 Eddy Christensen Instant Equity Auto Phone: (208) 378-4422 Fax: 10221 W. Fairview Ave. Boise, Id. 83704
ViCe President at Large Fred Thacker One Stop Auto Sales Phone: (208) 232-0532 Fax: 480 N. 4th Ave. Pocatello, Id. 83201
ViCe President Dennis Foltz P & R Auto Sales Phone: (208) 234-1018 Fax: (208) 234-7145 P. O. Box 187 Pocatello, Id. 83204
President region 3 Tim Sexton Sexton’s Car Collection Phone: (208) 552-2277 Fax: (208) 552-2266 585 E. Anderson Idaho Falls, Id. 83401
President region 1 Scott Reynolds Reynolds Auto Sales Phone: (208) 255-5945 Fax: (208) 255-5942 P. O. Box 936 Sandpoint, Id. 83864
ViCe President regjon 3 Larry Burton Gold Key Auto Credit Phone: (208) 736-2494 Fax: P. O. Box 5199 Twin Falls, Id. 83303
STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com FRONT COVER BY Mike Morgan EDITOR Mike Harbour • mharbour@niada.com PRODUCTION MGR. Jacob Kerns • jacob@niada.com ART/PRODUCTION MGR. Christy Haynes • christy@niada.com PRINTING Nieman Printing
Don’t forget to visit our website for important info: www.isiada.com 3
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ONLINE
Product Discounts for NIADA Members
OPTIMISING YOUR ONLINE PRESENCE WITH SEO, SOCIAL NETWORKING, AND THE LATEST TECHNOLOGIES
For more information, view www.niada.com/dealers_edge.php
Westlake Awards Top Auctions Westlake Financial Services recently announced Manheim Nevada as its Auction Partner of the Year for 2010. Bill Walters, vice president of remarketing says “Manheim
Nevada has been a strong and consistent performer for us all year, topping our rankings for the second, third and fourth quarters. Dan Thomas, general manager, and his team run a very strong operation and have done a great job for us. They embrace a team concept to provide excellent customer service no matter the size of the account.” Westlake further recognizes Kansas City Independent as its overall second ranked auction, ABC Birmingham as top-ranked service auction, Dealers Auto Auction of Idaho as top auction for Westlake’s loyalty program, Manheim St. Pete as top simulcast/live block auction, and Adesa San Antonio as top dealer block/OVE auction. “Westlake appreciate the hard work of all these auction partners in making 2010 our most successful year and we look forward to continued improvement in 2011,” Walters said.
Discount code available for NADA Guide
Automotive Internet marketing specialist, Michael D. Jackson, CEO, AutoSearch Technologies, shares strategies you can use right now to boost your dealership’s online clout. RUNNING TIME: 50 MINUTES
LOG ON NOW 24 / 7 KEEP YOUR EYES OUT FOR THE NEW “AUCTION TIPS” SERIES COMING EARLY MARCH. OVER 400 HOURS OF DEALER EDUCATION CAN BE SEEN ON WWW.NIADA.TV
No dealer should be without the NADA Official Used Car Guide. These must-have guides feature pocket-size portability for quick and easy car-side appraisals. Additionally, NADA Online gives you 24/7 online access to used vehicle values, at your desk and out at the auction on your smart phone, while NADA e-Valuator for Dealers software combines more than 19 years of NADA values on your PC and offers an inventory feature. NIADA offers member subscription discounts for the NADA Official Used Car Guide, as well as NADA Online and NADA e-Valuator for Dealers. Contact your state association or NIADA at 800-682-3837 for your discounted subscriptions or complete the online ordering form at www. nada.com/niada. The promotional code for ordering discounted NADA products is NIADA199. This code will need to be entered during checkout to receive the discount.
NIADA199
ADVERTISING
AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the United States with over 4,350 stores across 48 states, the District of Columbia and Puerto Rico. NIADA members have access to AutoZone’s “hot-shot” delivery program including discounts on more than 750,000 product level SKUs in over 70 distinct product categories.
Mark Your Calendars for the 2011 National Tire Safety Week! RMA’s tenth annual National Tire Safety Week will be held June 5-11.
The annual event is an initiative of the RMA’s “Be Tire Smart – Play Your PART” program, a year-round effort designed to help drivers learn the simple steps they can take to ensure that their tires are in good working condition. RMA is the national trade association for tire manufacturers. Tire manufacturers and retailers nationwide will work to educate motorists about proper tire care and maintenance. RMA provides tire retailers, auto dealers and automotive repair shops with free “Be Tire Smart” brochures and other materials. Many participating retail outlets use the opportunity to promote tire care through advertising, promotions, free tire pressure checks and conducting media outreach. More than 22,000 tire and auto service outlets participated in the 2010 National Tire Safety Week. RMA released a survey of more than 5,400 vehicles that showed half with at least one under inflated tire. Nearly 20 percent of vehicles had at least one tire under inflated by 8 pounds per square inch (psi). Under inflated tires waste fuel, risk safety and cause tires to wear out faster. Tire and auto retailers who are interested in obtaining free RMA materials for National Tire Safety Week can order them online at www.betiresmart.org. Those who have participated in the event before can expect to receive materials again this year.
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Confused about what the Internal Revenue Service requires from dealers at tax time? Don’t worry, as the IRS has an entire section of its website dedicated to automotive businesses. We’ve included a few tips here. As most dealers already know, the IRS requires each person engaged in a trade or business who, in the course of conducting that trade or business, receives more than $10,000 in cash in one transaction or in two or more related transactions must file a Form 8300. The agency recommends filers should keep a copy of each Form 8300 for five years from the filing date. Form 8300s should be filed by the 15th day after the date the cash was received. The form should be filed on the next business day if that date falls on a Saturday, Sunday or legal holiday. The filer must give a written statement to each person named on a required Form 8300 on or before January 31 of the year following the calendar year in which the cash is received and a copy of this statement kept for your records. Changing your accounting method? That generally requires IRS approval. To get approval, you must file Form 3115, Application for Change in Accounting Method. A change in your accounting method includes a change not only in your overall system of accounting but also in the treatment of any material item. If you finance the purchase of your property, instead of having the buyer get a loan or mortgage from a third party, you probably have an installment sale. It is not an installment sale if the buyer borrows the money from a third party and then pays you the total selling price. For more information, visit http://www.irs.gov/ businesses/small/industries/article/0,,id=98978,00. html.
WEBINAR
IRS Offers Helpful Auto Dealer Tax Tips
LIQUID MOTORS, NIADA TO PRESENT SOCIAL MEDIA WEBINAR
NIADA members can learn how to leverage social media to garner brand recognition, build consumer confidence and drive new business opportunities during a social media webinar presented by Liquid Motors and NIADA in April.
Learn how to leverage social media to build consumer confidence and drive new business opportunities quickly and easily! Social media continues to be the fastest growing segment on the Internet. As of September 2010, Facebook has over 135 million active users in the U.S. and each user averages seven hours per month on the site, more than double that of any other site on the Internet. THE SEMINAR, SET FOR APRIL 12 AT 10 A.M. CENTRAL, WILL PRESENT THE FOLLOWING:
GETTING STARTED IN SOCIAL MEDIA l
Building a Social Media Marketing Plan - Setting Budget, Goals, Objectives and Guidelines: We’ll cover how to build an effective social media marketing plan Reputation Management: We will help NIADA members understand why this is critical and how to simply and effectively make sure that consumer positive experiences are portrayed and how to respond to negative postings Building a Presence: We will cover how to secure social media accounts and how to configure the accounts for the most effective brand presentation and user experience
LEVERAGING SOCIAL MEDIA TO GROW YOUR DEALERSHIP l
Build Followers and Fans: We’ll discuss how to effectively grow your followers and fans including the dos and don’ts for posting content to social media Leveraging Check-ins: We’ll help members understand how to leverage new location based services to market their dealership on social media sites Dealers also will learn the key metrics to use to track the progress and success of their social media efforts and how to utilize technology to simplify and improve results tracking.
TO REGISTER, CALL 877-573-6877 OR SEND A REQUEST TO socialmedia@ liquidmotors.com.
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M O B I L E C O M M E R C E takes center stage with consumers looking for vehicles, parts and accessories This past holiday season, surveys and statistics showed what many analysts and industry observers were thinking: mobile commerce is growing by leaps and bounds, and every industry is in on the trend, including automotive.
In 2011, smartphones are forecasted to account for half of the mobile phone market, according to The Nielsen Co. On top of that, an ABI Research report says mobile online shopping will generate $119 billion in sales by 2015, accounting for 8 percent of the e-commerce market. When car dealers make it easy for their business to be found through a mobile web browser, loyalty campaigns, marketing initiatives, text promotions and sales can attract and retain customers. What are consumers browsing with their smart phones? The same types of items they started browsing on computers: researching purchase decisions, cost comparisons and finding the location of physical items. Recently, eBay reported a substantial increase in mobile traffic, where sales more than tripled in 2010 to near $2 billion in gross merchandise volume. Last year, vehicle purchases led all categories on eBay mobile applications in terms of GMV, while parts and accessories were number two in terms of the total number of items purchased. Dealers know when they have a physical lot, customers still come to kick the tires when the sales office is closed. Now, today’s consumer might still come to the lot, but he or she will also pull out a smart phone, check the hours of the dealership and research the same make and model for competitive pricing. The same thing is happening even if the consumer doesn’t drive to a physical lot. A consumer may be in his garage working on a car and need to find a part or accessory. Instead of going inside and turning on the computer, he’s browsing his smart phone
to find the part, price and local availability. Just as e-commerce has completely changed the way we do business, wireless devices and smartphones are again altering what we know about consumers’ purchasing behaviors. Seeing similarities in mobile commerce and e-commerce, auto dealers ask themselves a familiar question: would anyone really buy a car from their smart phone? In 2010, more than $118 million in car and truck purchases were made via the eBay mobile application – more than 12,600 vehicles were sold. Parts were the second biggest category in mobile last year, with more than 911,722 parts purchased, and more than $60 million in sales. For independent dealers, mobile applications and mobile commerce are the must-have digital tools of 2011. With smartphones capable of surfing, downloading apps and connecting with coworkers and friends in an instant, researching and shopping for vehicles, parts and services is a natural extension. For example, a business traveler waiting at an airport may use that downtime to look for a needed part for his car or browse available vehicles for a new truck. If an independent dealer’s inventory is not readily available on a mobile app, chances are there’s an entire customer segment that may not see what’s for sale. A recent ForeSee Results survey found 30 percent of consumers used a mobile phone to research products on the Internet, compared with 11 percent in 2009. Those making a purchase through a mobile phone increased from 2 percent in 2009 to 11 percent in 2010. For example, Tilo Steurer, founder and owner of Eurocar, the West Coast’s largest independent dealership of its kind, sells and buys vehicles and regularly uses eBay’s mobile app to buy cars, parts and accessories. “I purchase anywhere from five to 10 cars every month, most of the time through the
eBay mobile app,” Steurer said. He also uses the eBay mobile app to keep track of his business while not in the office. With any form of sales – online, mobile or in-store – customers consider the credibility of the seller and business before making a purchase. Building that credibility takes consistent communication, which is made easier when dealers can keep in touch through mobile and online sources. “Communication is very important, especially when making an expensive online purchase such as a luxury car,” Steurer said. “With the eBay mobile app, I can respond more quickly to customer questions, which builds credibility and increases the opportunity for a sale.” To accommodate this growing trend, eBay Motors is launching a mobile app that will provide a customizable buying experience optimized for vehicles, parts and accessories, as well as unique social and community features for the enthusiast. Features include VIN scanning and a virtual garage to give enthusiasts personalized information. After searching for a vehicle, users can share it with friends and social networks or ask the seller a question. Users can create “car cards” for their vehicles which display photos and stats about the vehicle and can be used in searches for parts and accessories. On the garage tab, consumers can input and store the vehicles they own or scan the VIN barcode with the iPhone’s camera to populate information. In the garage, car owners can create to-do list for vehicle projects, store custom parts searches and share the garage with their social network. For dealers, having parts, accessories and vehicles at a consumer’s fingertips is an ideal way to extend marketing and sales without a lot of development and technical effort. Mobile commerce is still in its infancy but is growing at a faster pace than e-commerce. With the Internet available wherever consumers are with their smart phones, it’s only a matter of time before mobile commerce becomes a dominant form of purchasing. Because of the similarities to e-commerce, consumers are quickly adopting m-commerce and expecting businesses to be on board.
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Independents Remain Profitable in Challenging Environment BY TO M WEB B
Our team at Manheim Consulting had the pleasure of interviewing NIADA President Anthony Underwood for a question and answer session discussing the state of the used vehicle market from the perspective of independent dealers as we compiled the recently released, 16th annual Used Car Market Report (UCMR).
Underwood framed the challenges facing independent dealers in a way that confirmed what our data was telling us: independents are encountering higher prices for inventory at the wholesale level and finding fewer pre-owned vehicles in the marketplace. In response, these dealers are focusing on sound inventory management practices, and using all available sales channels – including online – to source just the right inventory to meet their customers’ needs. We examined these and other trends in the UCMR, which is Manheim’s annual
analysis of the forces shaping the used auto industry. As part of the ManheimNIADA Dealer’s Edge partnership, I’m happy to let you know you can download the entire report free of charge by taking a very brief survey at www.surveymonkey. com/s/manheim. As a comprehensive analysis of the trends shaping the automotive industry, the 2011 UCMR contains much more valuable information pertaining to independent dealers, as well as chapters on other aspects of the industry, including rental, leasing, fleets, repossessions and salvage. I encourage NIADA members to download their free copy of the UCMR, and as always, please e-mail me any time with your questions. Tom Webb is chief economist for Manheim Consulting. Contact him at Thomas.webb@manheim.com, follow him via Twitter at www.twitter. com/TomWebb_Manheim and read his blog at www.manheimconsulting.typepad.com.
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BY BI LL MO K RY
THE ART AND SCIENCE OF USED AUTO INVENTORY Building a profitable used auto inventory requires having the right information and the talent to know how to use it. Over the years, I’ve been blessed with tremendous mentors who have provided me with valuable insights, one of which is managing a used vehicle department is both a science and an art.
While there are no cookie-cutter solutions applicable to every scenario, there are tried and true blocking and tackling strategies that can help any department maximize results. When it comes to proper inventory mix, there are several ways a dealership
USED CAR MANAGERS SHOULD BE AWARE, AT THE VERY LEAST, OF THE TOP-SELLING VEHICLES IN THEIR MARKET BY MAKE, MODEL, AND YEAR AS WELL AS THE TOP-SELLING VEHICLES AT THEIR STORE can study information to improve volume, gross and ROI. However, before the information can be broken down, the store must have the information. While this may seem obvious to some, I am routinely presented with departments that fail to accomplish this seemingly simple task. Used car managers should be aware, at the very least, of the top-selling vehicles in their market by make, model, and year as well as the top-selling vehicles at their store. All too often when I ask used auto managers to name the three top-selling used vehicles in their markets, they look at me like a deer in headlights. Or, they automatically respond “Honda Accord” or “Toyota Camry.” That’s great! What year? What trim level? What mileage band? How
many of these have been sold at your store in the last 90 days? What was the average age when it was sold? There are several tools available to help managers accumulate this data, such as Auto Exchange for internal data and Cross Sell for external data. Once this data is collected, it is imperative management consistently identify which vehicles sell in their market (internal and external). That’s the science part of the equation; it’s not especially difficult to identify commodity type vehicles and, if you’re willing to travel or pay, to procure them. Further breakdown of historical internal and external trends is, however, necessary. Specifically, it would be beneficial to track sales volume, aging, and gross profit for specific COS bands. These could be broken down as follows:
$0 – $5000 $5,001 – $10,000 $10,001 – $12,500 $12,501 – $15,000 $15,000-plus The used auto dealer should be aware of and actively track each of the above categories for each price band in used cars, trucks, SUVs, and vans, comparing the current stocking mix to what has yielded the greatest success. The categories can be broken down further into import/domestic categories as well, if needed. This information, coupled with knowledge from external tools, is used to direct buying specific inventory at specific price points to generate specific results. The art of used vehicle inventory comes from identifying and procuring vehicles that put your store ahead of the curve. For example, a few years back fuel prices spiked and, as a result, highly economic, smaller pre-owned vehicles were suddenly at a premium, while large pickups and SUVs could be bought for a dime a dozen. The market was quickly flooded with these gas guzzlers, but few people had the vision or foresight to accumulate them. Those who did were those who had the knowledge and experience to understand the ebb and flow of the used car market, so
they loaded up on these vehicles at very cheap prices. It’s not difficult to guess what happened to their profits when the price of fuel went back down. Recognition of these opportunities is not always easy; often it comes from experience. I believe we are involved in one as I type this column. Thanks to the Cash for Clunkers program, new car inventories are generally low; there are fewer trades in most used inventories and the price of vehicles at auction has gotten higher. While this could mean several different things depending on your market, I would think the potential for increased gross profit, even on vehicles more traditionally thought of as commodity cars, is greater than ever. Hopefully, you’re tracking the trade capture rate. A normal benchmark for capturing trades is 55 percent of appraisals. Because of today’s market conditions, I would encourage all managers to aggressively get involved with customers and inquire about their desire to trade their vehicle, as well as ensure your store is appraising every vehicle possible. Further, I believe it’s imperative to improve the appraisal capture rate by 10 percent or more. Used autos are at a premium and the extra money put into a trade has never been a better investment. This type of forward thinking involves risk some dealers simply may not be willing to accept. Those who do so are more frequently ahead of the used vehicle game. The science of used inventory can be resolved by accumulating information, breaking it down (all the way to COS bands, if you really want to be detailed) and buying and trading aggressively according to trends. The art requires experience and guts. BILL MOKRY IS A SALES AND F&I S P E C I A L I S T F O R S E R V I C E G R O U P, A N INSUR ANCE AND FINANCIAL SERV I C ES COM PANY THAT PROVI D ES I N COME DEVELOPMENT TR AINING AND SERVICING SOLUTIONS TO AUTO DEALERSHIPS. HIS MANY YEARS OF DEALERSHIP EXPERIENCE INCLUDE SEVERAL AS GENERAL MANAGER OF A SUCCESSFUL USED CAR OPER ATION. H E CAN BE REAC H ED AT BMOKRY@SGIFS.COM .
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Craigslist 101:
BEST PRACTICES If eBay were free, would you advertise your inventory on it? This should be
a no brainer! Craigslist and Ebay had equal amounts of unique visitors in the U.S. for the first time ever in May 2010, according to comScore data. Dealers who think Craigslist is not for them are missing the boat. It doesn’t matter if you’re selling dollar-cars or the high lines; customers of all ranges are going to the Craigslist marketplace to search for vehicles! A free site offers very little to no technical support, which is why I believe a lot of dealers are missing out on huge opportunities because they’re not educated on Craigslist and don’t have the right process in place to realize potential. Those who have discovered the power of Craigslist advertising will agree it’s a constant battle to keep up with the terms of service as well as
keep their posts young, live and searchable to generate leads. The first thing I want to point out is Craigslist is the best ROI for lead generation out there. It is free to post, but to get maximum results requires knowledge of Craigslist terms, time and a dedicated process. With the amount of vehicles posted in the Denver Craigslist market, for example, you must have a daily presence on the site. For the longest time, we used to think that as long as your vehicle is live on Craigslist, it didn’t matter how recently you posted it. This could not be more wrong; the proof is in the pudding. Every time dealers list a new ad on Craigslist, they get most of the calls the day they post and the day after. After an ad has been on the site more than three days, it gets a lot less calls. Craigslist searches are
driven by date. For example, if a customer was to search for a Honda Accord in Denver, there’d be more than 1,000 results spread across 10 or more pages! If you posted your 2008 Honda Accord three days ago, it is most likely already on the fifth results page. Our recommendation is to delete each ad after 48 hours, then repost it to maintain its effectiveness and stay at the top of the list. Remember, the Craigslist consumer will look at the first search page results on craigslist, but they’ll usually find what they’re looking for there and never make it to the next page. A pair of actions you should be aware of is flagging and ghosting. Ghosting is when your ad appears to be live but can’t be found anywhere on Craigslist. It’s an action done by Craigslist administration that’s definitely the worst of the two because you have no idea it’s happened because the ad looks normal. Flagging is done by the Craigslist community. One thing to keep in mind is Craigslist is a community-based classified site. The majority rules and decides whether an ad is worthy enough to stay live. This is where the flagging system comes into play. Each Craigslist consumer has the right to flag your vehicle. One Craigslist visitor cannot take down your vehicle ad, but he can contribute towards it. That means it takes more than one person to flag and remove it from the site. So how many flags does it take? Well, it depends. Nobody really knows the exact figures except Craigslist; in metro Craigslist markets, it may take up to 20 flags to take down an ad. In smaller markets, where, for example, only 100 vehicle ads get posted per day, only two flags might take down an ad! Most importantly, flagging will result in ghosting and will eventually blow up your Craigslist account so none of your ads will stick. You’ll have to go through the Craigslist community forums and blogs to get back to good standing. That process will take a lot of time and reading; most dealers will be overwhelmed doing such a thing. So why do people flag? I believe 80 percent of it occurs because posters aren’t following the terms of service.
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BY DUSTI N JANSSO N
For example, maybe you posted a 2008 Honda Accord ad on Monday and posted it again on Tuesday without deleting the earlier ad. The Craigslist community frowns upon this and is very click happy when it comes to flagging. If you have experienced this, you might want to consider automated postings that post ads more frequently with a fraction of your present efforts. The other 20 percent of flags, in my opinion, are your competition. Not fair? Perhaps not, but Craigslist is a free service (to post cars and trucks), so who can you complain to? The fact is Craigslist at some point really frustrates every car dealer, but we all have to deal with it. The good news is there are posting tools to take on this challenge as well as automated tools to post your entire inventory
CRAIGSLIST IS IDEAL FOR THE DEALER BUDGET AND MANY RELY SOLELY ON THE SITE FOR ONLINE LEADS. ARE YOU GETTING YOUR PIECE OF THE PIE? every day. If your competition is flagging your ads, they’ll eventually tire from doing so. Just don’t make it easy by attempting to post your entire inventory every day on your own as that effort will result in a high flag and ghosting rate. Craigslist is ideal for the dealer budget and many rely solely on the site for online leads. Are you getting your piece of the pie? Dustin Jansson provides consulting, Craigslist posting tools and automated Craigslist posting services, as well as other dealership products. Contact him at 303-232-3435 or dj@dealernetsolutions. com. For more information, visit www. dealernetsolutions.com.
EV SALES NOT CHARGING AHEAD This was the year General Motors and Nissan made good on their promise to bring mass-produced electric cars to the market, but don’t count on seeing one in traffic soon. According to the Associated Press, sales so far have been microscopic, and they’re likely to stay that way for some time because of limited supplies.
The base sticker price is $40,280 for the Volt and $32,780 for the Leaf
GM sold between 250 and 350 Chevy Volts in December, and Nissan’s sales of Leaf sedans totaled fewer than 10 in the past two weeks, the AP reported on Jan. 1. Production for both is ramping up slowly. It will be well into 2012 before both the Volt and Leaf are available nationwide. It’s still unclear just how large the market for electric cars will be once those early adopters are supplied. The base sticker price is $40,280 for the Volt and $32,780 for the Leaf; much higher than most similar-sized, gas-powered cars. If those prices rise, it could make them even more of a niche product than predicted.
Hertz Launches Online Dealer Direct Program An innovative online wholesale marketplace to purchase late-model cars from Hertz's rental fleet was launched in January. The Dealer Direct
program provides independent and franchise auto dealers broader access to a wide selection of cars and lowe n and CEO. “Dealer Direct provides car dealers with a real-time, ecommerce platform for buying cars directly from our company providing financial benefits to dealers and Hertz.” The program provides dealers with the freedom to search for vehicles on rent and ready for sale, as well as vehicles immediately available for wholesale purchase and pick up. The system keeps dealers updated on the status of each available vehicle and dealers are notified when cars they are interested in become available for sale, providing the capability for online purchases that take only minutes to execute. New Jersey-based Hertz, the world's largest general use airport car rental brand, created the direct-to-dealer
remarketing program as a service to dealers and wholesale buyers with the goal of providing expedited access to its fleet and low prices. Hertz has partnered with Advent Resources, Inc., renowned creator of high performance auto dealership technology, to develop the program.
BENEFITS OF HERTZ DEALER DIRECT INCLUDE: l
no transaction or success fees;
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r eal-time online access to Hertz wholesale inventory; well-conditioned vehicles; p urchase, utilizing expedited, electronic processing.
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FEDER AL ADVOCATES JANUARY 2011 LOBBYING REPORT Office of Service Member Affairs
NIADA and Federal Advocates is pursuing a meeting in February with the Consumer Financial Protection Bureau’s Holly Petraeus, Office of Service Member Affairs director. She is the wife of U.S. Army Gen. David H. Petraeus, the top U.S. commander in Afghanistan. The purposes of the meeting are for NIADA General Counsel Keith Whann to introduce the association and himself; to brief Petraeus on the various efforts and programs of the association to ensure service members are treated fairly by the used auto industry, and to offer his experience and knowledge in furtherance of her new office. Department of Defense
NIADA and Federal Advocates also is pursuing a follow-up meeting in February with the Office of the Deputy Undersecretary of Defense (Military, Community and Family Policy) to discuss NIADA’s experiences and areas of possible assistance to the Deevnse Department regarding service member automobile issues. White House Reform Request
NIADA is continuing to pursue a February meeting with the White House in response to the letter sent last year by NIADA to President Obama requesting “the opportunity to work with your administration to reform our industry in common-sense ways that achieve real safeguards for consumers, that promote accountability and transparency, and that really work.” NADA On February 2, Federal Advocates will be meeting with the governmental affairs staff of NADA to discuss issues and strategies for the 112th Congress. Dodd-Frank Wall Street Reform and Consumer Protection Act
Congress ended with the Federal Trade
Commission beginning in earnest to review the auto industry in the light of the above consumer-enacted law. To review, on November 17, Whann and Federal Advocates met with senior staff of the FTC as follow-up to the Sept. 21 meeting. A series of questions had been provided to NIADA for discussion at the Nov. 17 session. At the meeting, Whann walked them through the process of buying a car and provided samples of purchasing documents. The FTC is in the process of formulating questions for public comment regarding various aspects of the auto industry as it relates to consumers. FTC staff was not forthcoming as to the timing of that effort, its scope and its intended purpose. The results of the Nov. 17 meeting were reported to NIADA’s Legislative Committee by conference call on Nov. 23. Also, on Sept. 21, Whann and Federal Advocates met with staff of the FTC regarding implementation of the above bill and its impact on the auto industry. Following discussion of various issues, with Whann leading the discussion and answering various questions as to how the auto industry works, including the auction practice itself, it was decided to schedule a half-day session to allow for a more detailed discussion of issues (i.e., the Nov. 17 session). All of this is a result of the so-called Wall Street Reform Bill. The law does grant increased powers to the FTC regarding dealer oversight. Also, it requires coordination with the Defense Department to ensure service members and their families are treated fairly by automobile dealers. Senate Motor Vehicle Safety Act of 2010
The Congress ended with no formal action on the above bill. To review, on June 9, 2010, the Senate Committee on Commerce, Science and Transportation marked up and order reported S.3302, the
so-called Toyota Bill. In earlier drafts of the bill and just prior to markup, language was included (section 310) which would have specified a dealer may not sell or lease a used passenger motor vehicle (both wholesale and retail sales) until the dealer first notifies the purchaser or lessee in writing of any recall notices. Working primarily with Sen. John Thune, R-S.D., his staff (Brenden Plack), and committee staff (Alex Hoehn-Saric and Chris Herndon), and as a result of concern raised by Whann and his proposed suggestion, section 310 has been dropped from the bill. This provision would have seriously hurt used car commerce by imposing tremendous compliance costs and liability exposure for dealers while increasing the safety risk for consumers by pushing unremedied vehicles into the unregulated private sale used car market. While an initial victory, we will continue to advocate on behalf of NIADA’s interest pending further action on the Senate bill as well as a possible House companion bill. Small Business Jobs and Credit Act of 2010
The administration has delayed implementation of the above bill until March. On Sept. 23, the House passed the Senate-passed bill, which includes an increase in the amount the Small Business Administration’s Dealer Floor Plan Financing program can guarantee. This permits the SBA to guarantee bank and finance company loans up to $5 million, which should help, the committee believes, expand dealer access to floorplan lines of credit. We worked with Louisiana Democrat Sen. Mary Landrieu’s committee and personal staff, in conjunction with others, on this. The bill may be the subject of subsequent meetings with the Hill and the SBA on how the program really works.
FEDERAL ADVOCATES IS NIADA’S GOVERNMENTAL ADVOCACY PARTNER. To read past lobbying reports, visit http://www.niada.com/legislative_and_legal.php
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Q&A With NIADA President Anthony Underwood:
2011
Used Car Market Report
National Independent Automobile Dealers Association (NIADA)
Anthony Underwood was named president of NIADA in 2010. He started selling cars in Alabama in 1977, and he opened his first dealership in 1994 with five vehicles. Anthony’s two stores sell a combined total of 800 vehicles each year. He has been an active member of the NIADA and Alabama IADA for many years. Anthony has served on the boards of both NIADA and AIADA. He was named NIADA National Quality Dealer of the Year in 2003 and, that same year, earned his Certified Master Dealer certification. How have independent dealers adjusted their businesses in the last three years? Independent dealers have faced unprecedented challenges in the last three years. Even though the overall economy is improving, dealers are still struggling with limits on inventory and consumer credit. But dealers are resilient and have adjusted by stocking fewer vehicles and focusing on the types of vehicles that turn quickly. Solid inventory management underpins the successful dealer. Many dealers have retrained employees to ensure that everyone is contributing to the success of the business. Employee productivity has improved as staffs have been reduced to the current level of sales. In the process, we have learned to run our stores more efficiently. We have also seen a shift to the Buy-Here, Pay-Here model by dealers who have access to capital. In our store, we have cut in half both our staff and our inventory. We have also expanded the number of lenders we rely on to finance our customers. We are now sourcing some inventory online, buying vehicles that will sell quickly, and generating more sales based on specific customer orders.
How are independent dealers coping with the shortage of used vehicles? Independent dealers are confronting two challenges: higher prices and fewer pre-owned cars in the marketplace. Independent dealers are spending more time and effort to find the right inventory. Everyone is going to more auctions, both online and in person, as well as tapping local wholesale sources. Some dealers have been very successful in buying inventory directly from private owners. Three or four years ago, dealers were able to find plenty of vehicles under 70,000 miles and three or four years old at acceptable prices. But independent dealers have modified the age and condition guidelines to reflect what their customers can afford. As a result, dealers are doing more reconditioning to get vehicles frontline ready.
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You are quoted as saying “We will never go back to business as it was in the past.” Can you explain what you meant by that? Our business model has changed. New car dealers are getting more into the pre-owned business, so we have to meet that challenge. Franchised dealers offer service departments, larger facilities, and access to newer inventory. NIADA members know that they have to continue to improve their business skills and adapt to this new competition. NIADA can teach dealers to run more efficient operations, but the business of selling cars is still about knowing your market and your customers and being responsive to their needs. Independent dealers need access to information to enable them to make quick decisions. NIADA helps independent dealers stay abreast of the national and local economic, regulatory, and business issues facing our industry and each dealer.
How is NIADA monitoring the potential rules under the new Consumer Financial Protection Bureau? We have encouraged members to stay connected with one another by attending local and national meetings and by contacting their legislators on issues that could impact our business, in particular Buy-Here, Pay-Here. The NIADA website includes a blog where dealers can find information on local and national issues and answers to their specific questions.
You are a strong advocate for dealer education. What resources does NIADA provide dealers? NIADA is serious about education, and we recognize that it is one of the strongest things we have to offer our members. Knowledge is power, and what you don’t know can hurt you. Our three-day Certified Master Dealer Program gives dealers the critical skills and information they need to meet the challenges of operating successfully in a challenging environment. NIADA and its industry partners provide dealers with online and in-person training that covers the full range of inventory and dealership management topics. For example, the NIADA/Manheim partnership teaches dealers how to buy and sell vehicles online through The Wholesale Institute training on NIADA TV.
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IDAHO STATE INDEPENDENT AUTO DEALERS ASSOCIATION
STRENGTH IN NUMBERS
Application for Membership
Dealer & #:__________________________________________________
I (We) hereby make application for membership in the Idaho State Independent Auto Dealers Association and authorize such verification as necessary to determine our worthiness and eligibility for membership. We agree to abide by the decision of The Board of Directors.
Address:_____________________________________________________
Business Name
City, State, Zip:_______________________________________________ Phone:_____________________________Date:_____________________ Item # 1000
Air Bag Disclosure / pad 50
$4.50
NonMember $6.00
1100
Buyer's Guide / pack 100
$12.00
$16.00
Mailing Address
1101
Buyer's Guide Spanish / pack 100
$12.00
$16.00
City
1300
Consignment Agreement / pad 100
$6.75
$9.00
1400
ID Standard Credit Apps / pack 100
$21.00
$28.00
1500
Demo Permit Agreement / pad 50
$4.50
$6.00
1550
Bill of Sale / pad 100
$3.00
$4.00
Yrs. In Business
1600
Due Bill / pad 50
$6.75
$9.00
1601
Good Will Agreement / pad 20
$7.50
$10.00
1700
Buy Here Pay Here Contracts / pack 50
$30.00
$40.00
1800
GLB Opt Out / pad 100
$11.25
$15.00
1901
Law 553 Security Agreement / pack 100
$126.00
$156.00
2100
Proof of Insurance / pack 100
$20.00
$27.00
Name
2200
Secured POA (blue) / pack 50
$12.00
$16.00
Title
2300
Reassignments / pack 50
$12.00
$16.00
2400
Deal Jackets / pack 100
$16.50
$22.00
2600
Retail P.O / pack 100
$20.25
$27.00
2602
Trade in Disclosure / pad 20
$6.00
$8.00
2700
Wholesale PO / pack 100
$13.50
$18.00
2800
Delivery Disclosure
$18.00
$24.00
Phone Dealer Number ________________
State
Zip
Fax
How were you referred? If a corporation, exact name and date of incorporation , state of incorporation Please provide the following information for directors, owners and partners:
%
Name Title
%
Name Title
%
Description
Member
4000
Nada Recreation Vehicle Guide
$34.00
$42.00
Name
4001
Nada Classic Collectible Guide
$15.00
$18.00
4002
Nada Van/Truck Conversion Guide
$13.00
$16.00
4003
Nada Marine Guide
$34.00
$42.50
Name
4004
Nada Motorcycle
$18.00
$22.00
Phone
4005
Kelly Used Car Guide
$15.00
$18.00
Have you or any of your business associates had their dealer license revoked for any reason? If yes please explain.
4006
Kelly Older Car Guide
$20.00
$23.00
4007
Black Book CPI Guide
$5.00
$6.00
4008
Nada Used Car Guide
$8.00
$10.00
4009
Nada Older Car Guide
$18.00
$20.00
4015
Kelly Motor Home Guide(gold label)
$25.00
$32.00
4016
Kelley Motorcycle Guide
$25.00
$32.00
4017
Kelly RV Travel Trailer Guide (silver)
$25.00
$32.00
I understand that financial and business reviews may be necessary to the process of determining my eligibility for membership. I hereby certify that I am an authorized agent of said company and that all fact stated herein are accurate to the best of my knowledge. I have read the code of ethics and agree to abide by them.
Printed Name Title
Date
PRICES SUBJECT TO CHANGE WITHOUT NOTICE
Office: 208-463-7709 Signature_____________________________
Signature
Cost
BOOK PRICE INCLUDES 6% TAX
List two trade references including names and phone numbers
Phone
Qty
Subtotal_____________ Tax_________________ Delivery_____________ TOTAL______________
Annual dues of $250.00 must accompany this application. Make checks payable to ISIADA and mail to: 3323 Port St. * Nampa, Id. 83687 17
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Carfax Debuts Mobile App for iPhone Carfax launched the first mobile app dedicated to providing on-the-go dealers with access to Carfax Vehicle History Reports. The ‘Carfax for Dealers’ app is available for free download to all dealers on the App Store. With an iPhone or other Apple mobile device, dealers can run Carfax Reports using their existing Carfax account to better evaluate used cars anytime, anywhere. “The free ‘Carfax for Dealers’ iPhone app is just what our business needed,” said Justin Villa, pre-owned sales manager with David McDavid Automotive in Irving, Tex. “We downloaded it the day it came out and already we’re saving a ton of time evaluating cars. It’s helping us win at auction and evaluate a customer’s trade faster. After all, time is money.” Running Carfax Reports is a key component to a dealer’s acquisition process. Users start by entering the 17-digit vehicle identification number (VIN) or scanning the vehicle barcode to run the Carfax Report. Any vehicle run through the ‘Carfax for Dealers’ app is automatically added to the dealer’s inventory manager at carfaxonline.com. The reports are saved for up to 30 days and dealers can mark vehicles they’re most interested in as favorites within the app. “We’ve always been quick to embrace new technology to help maintain our competitive edge,” said Michael Townsend, used sales manager at Townsend Honda in Tuscaloosa, Ala. “When we heard about the new ‘Carfax for Dealers’ app, we went and got it immediately. The app is fast and makes appraising cars easy. It’s my new favorite tool on my phone.”Free access to Carfax Reports also is available through apps from several wireless technology providers. Dealers looking for additional pricing and product integration functionality can visit:
s s s s
AutoRevo www.autorevo.com eCarList TrueTarget www.ecarlist.com VIN Viper www.vinviper.com vAuto www.vauto.com
Sorting Through Exceptions to the Risk-Based Pricing Notice Curbstoned cars are often cheap, but state and local governments pay a high price. The FTC’s risk-based pricing notice requirements became effective Jan. 1. To
comply with these requirements, dealers must alert consumers when they are getting different credit terms than others based on credit information. The good news is the requirements give options for how and when you provide the notice. That’s also the bad news because the options and exceptions can make it difficult to figure out if you’re in compliance. To help you sort through the maze, here are some of the important exceptions and how they apply to you. Your dealership doesn’t need to provide a notice if: l
l
You don’t use credit reports in any way to make a credit decision. If your dealership directly contacts employers and other references and is not otherwise using any third party information, then the risk-based pricing notice is not required (it sounds rare, but there are dealers who qualify for this exception).
A notice isn’t required for a specific transaction if: l
l l
l
l
l
l
“Our customers tell us how important immediate access to Carfax Reports is to their success, especially at acquisition,” said Larry Gamache, Carfax communications director. “The ‘Carfax for Dealers’ app now puts the power of this information in the palm of your hand. And, you can run as many reports as you need through the app if you’re on the Unlimited Carfax Reports Program for dealers.” Dealers not attending the convention may contact their Carfax account manager or call 800-274-2277. To download the app for iPhone, visit http://itunes.com/apps/ CARFAXInc/CARFAXforDealers. An Android version of the ‘Carfax for Dealers’ app is coming soon.
You don’t do risk-based pricing of credit terms. This applies if every consumer whose application is approved is offered credit on the same terms.
The credit requested is not for a consumer purpose (personal, family or household use). The transaction is a consumer lease. Th e consumer applies for a specific credit product and is approved for those terms. Y ou offer specific terms to a pre-screened group and extend credit on the offered terms to one of them. Th e consumer is a co-signer (which is different from a coborrower), guarantor, surety or endorser in the transaction. Th e consumer’s application is denied and you provide an adverse action notice. Y ou provide the consumer with the credit score disclosure instead of the risk-based pricing notice. The disclosure is an alternative form authorized by the regulations. If you use it, you must provide it to all consumer applicants instead of providing a risk-based pricing notice only to the portion of applicants who are not receiving your most favorable credit terms.
It is likely some of these exceptions apply to your dealership and its transactions. Before relying on an exception, review the regulation or discuss it with your legal counsel to be sure you implement it correctly. The regulation can be found at 16 CFR §§ 640.1-.6. BY C H I P Z Y VO LOSK I Chip Zyvoloski is senior attorney for indirect lending at Wolters Kluwer Financial Services. For more information, visit www.wolterskluwerfs.com/indirect.
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