DEALER’S EDGE ILLINOIS INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION
MAY/JUNE 2018
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May/June 2018
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SALES MATTERS | BY JOHN CHAPIN
Step 2: Getting your self-talk right.
If you realize you have a self-talk problem, here are some ways to work on it.
Positive Affirmations
THE MOST IMPORTANT SALES CONVERSATION Self Talk
There is a much overlooked aspect of sales success that is rarely talked about and people pay little attention to. It is selftalk. The most important conversation is the one you have with yourself. The reason that conversation is so important is because the words and language you use both reveal and reinforce your beliefs about yourself and the world. Those beliefs dictate the action you take, or don’t take, and ultimately determine success or failure. If you have a problem selling, you more than likely have a self-talk problem. The difference between top salespeople and everyone else is the top people became aware of their negative self-talk and beliefs and reprogrammed their language and beliefs to positive ones, or they were one of the lucky few who received positive programming right from the get go. The latter is the exception. Most of us received negative programming growing up. Either way, if you want to become a champion, you need to ensure your selftalk is positive, upbeat, and supports you.
HOW TO IDENTIFY AND SOLVE POSSIBLE SELF-TALK ISSUES Step 1: Awareness.
Like everything else in life, awareness is step one. You can’t fix a problem you don’t know you have. If you are overweight, but don’t think you are, the problem won’t get fixed. If your finances are wrong, but you don’t know there’s a problem, you won’t get them right. If you have a self-talk problem, you need to be aware of it before you can change it. The first thing you want to do is monitor your self-talk. What do you catch yourself saying about yourself and the world around you? Are most of your conversations negative or positive? Do you find yourself saying negative things about the economy, your particular market, your industry, or your product? How about your self-talk about you? Do you believe you aren’t smart enough, young enough or old enough? You don’t have enough energy or have too much energy? Do you believe bad things always happen to you, or the odds are always stacked against you? Your beliefs will be your reality.
Many people are familiar with affirmations and have either tried them in the past or use them currently. In a nutshell, positive affirmations are a series of positive statements that reinforce a belief you want to have about yourself. For example, if you want to have more selfconfidence, you might use affirmations such as: “I am confident,” “I believe in myself,” “I feel my confidence increasing every day,” and other similar statements.
Positive “Afformations”
Noah St. John coined the phrase “afformations” in his book by the same name. Afformations are similar to affirmations but they are in the form of questions versus statements. In the case of afformations, if you wanted to have more self-confidence, you would use questions such as: “Why am I so confident?”, “Why is it so easy for me to believe in myself and do the things I need to do?”, and “Why do I have so much talent and ability?” The theory is that while your brain may be able to argue with a statement, as in affirmation, it searches for an answer to a question. You can check out Noah’s book for a list of afformations for most areas of life people struggle with. Note: There are four ways to work with affirmations and afformations: listening to a recording of them, reading them, writing them, or saying them to yourself, either out loud or silently. Ideally if you are vocalizing them, you want to say them with as much feeling and emotion as possible. It’s best to work with affirmations and afformations first thing in the morning, right before going to bed, and then, if possible, during the day. www.il-iada.org
Psycho-Cybernetics
The most popular psychocybernetic technique to shift self-talk is to cancel out negative statements. You do this by saying the word “cancel” after you catch yourself saying something negative and then following the word “cancel” with a positive statement. For example, if you catch yourself saying, “Why do things always go wrong for me?” you’d say “cancel” – out loud if possible – and follow with either an affirmation – such as, “Things always go right for me” – or an afformation, such as, “Why do things always go right for me?”
Clean up your environment.
Specifically eliminate negatives and negative people from your environment. Where you end up five, 10, or 15 years from now will come down to what you put in your brain and who you hang out with. You cannot watch the evening news and be positive. You also cannot hang out with negative people and have positive selftalk for any length of time. Finally, keep in mind everyone has some negative self-talk occasionally. In fact, the majority of champions have had self-talk problems caused by major self-esteem and self-confidence issues. Many were plagued by insecurities constantly reinforced with negative self-talk. The key is that they recognized it anddid something about it, and that’s the key for you too. Become aware of these thoughts, catch yourself in the act, and shift the conversation. Reinforce the positive until it becomes your new habit. This does not happen overnight and takes work, but if you commit yourself to positive words and language, you should see a fairly substantial and positive shift in about 30 days. By the way, another great book related to self-talk is What to Say When you Talk to Yourself by Shad Helmstetter. John Chapin is a sales and motivational speaker and trainer. He has over 27 years of sales experience as a number one sales rep and is the author of the 2010 sales book of the year: Sales Encyclopedia. For more information, visit www. completeselling.com or email johnchapin@ completeselling.com.
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INSIDE
ASSOCIATION NEWS |
03................................... Most Important Sales Conversation 05.................................57 Million Vehicles with Open Recalls 06.................................................NIADA Convention Preview 07...........................................Get Certified or Get Left Behind 08................................................. NIADA Government Report 12.............................................................................Collections 14............................................................Don’t Step on a Rake
WHAT’S NEW
NIADA NABD Convention & Expo Register Now! Registration is open for the NIADA/NABD Convention & Expo, June 18-21 in Orlando! With the forces of NIADA and NABD combined, it promises to be the most robust convention yet. Learn more and register today at www.niadaconvention.com.
ADVERTISERS INDEX
AmTrust ...............................................................................IFC Dyer Auto Auction...................................................................7 Manheim ...............................................................................11 NextGear Capital ..................................................................12 vAuto.......................................................................Back Cover
OFFICE
For information on how to become a member of IIADA, please contact Tiana Ballard at 800-682-3837 or tiana@niada.com.
DIRECTOR’S REPORT Senate Bill 2521
SB 2521: Cons Fraud-Starter Interrupt
Synopsis as introduced: Bill amends the Consumer Fraud and Deceptive Business Practices Act. It provides that a dealer or other creditor shall not use electronic tracking technology or interrupt technology in connection with the credit sale, loan, or lease of a motor vehicle unless the technology is used solely to verify and maintain the operation status of the tracking technology, to locate the vehicle for repossession, to repossess the vehicle, or to locate the vehicle to service the account or keep the account current. It requires specified conditions to be met and certain written disclosures to be made to the consumer regarding the use of the technology.
Bill contains provisions regarding use of the technology in a criminal investigation; damages for violations; repossession; privacy, storage, and destruction of data; and other matters. It provides that specified violations are unlawful practices within the meaning of the act. Please be advised your IIADA and the NIADA are taking this act very seriously and have worked hard on your behalf to defeat this bill. More information on the bill can be found at www.il.gov. Bruce Eklund Executive Director Illinois Independent Automobile Dealers Association 800-987-6627 lilcheeper5@aol.com
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. The Dealer’s Edge is published bi-monthly 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 The Dealer’s Edge or NIADA. Likewise, the appearance of advertisers, or their identification as members of IIADA or NIADA, does not constitute an endorsement of the products or services featured. Copyright ©2018 by NIADA Services, Inc.
STATE MAGAZINE MGR./SALES
Troy Graff • troy@niada.com EDITORS
Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com
BOARD MEMBERS CHAIRMAN
Gordon Tormohlen Tormohlen’s Good People Automotive 1800 S Ihm Blvd Freeport, IL 61032 815-232-5543 goodpeople@aeroinc.net
PRESIDENT
Joe Mok G Motor Cars 2411 E. Oakton St Arlington Heights, IL 60005
MAGAZINE LAYOUT
Christy Haynes • christy@niada.com PRINTING
Nieman Printing
VICE PRESIDENT
Eric Nelson Nelson Automotive Inc. 1801 S Busse Mt Prospect, IL 60056 eric@heycars.com
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www.il-iada.org
TREASURER
Lori Chignoli-Cora Chignoli Auto Sales 1850 Essington Rd Joliet, IL 60485 lori@chignoli.com
SECRETARY
Alex Tovstanovsky 8959 Hanslik Ct Naperville, IL 60564 (630) 631-2535
EXECUTIVE DIRECTOR
Bruce Eklund IL-IADA Headquarters 129 S Phelps Ave Suite 706 Rockford, IL 61108 (800) 987-6627 lilcheeper5@aol.com
www.il-iada.org 800-987-6627 BOARD MEMBERS
Paul Gluchowski Turner Acceptance 4454 N. Western Ave Chicago, IL 60630 (773) 290-5002 paul@turneracceptance.com Amy Goodnight Lohman Companies 3901 15th St. Moline, IL 61266 (309) 764-8331 x 220 amy@lohman-companies.com Ginger Higgins Integrity Motor Cars 1302 Sandyhollow Rd Rockford, IL 61109 815-397-5555 integritycars3@yahoo.com Brad McCorkle 4th Ave Auto Sales 4130 4th Ave Moline, IL 61265 (309) 736-7550 4thaveauto@gmail.com
INDUSTRY WATCH | BY CARFAX
57 MILLION VEHICLES IN U.S. HAVE OPEN RECALLS New Research from Carfax Millions of vehicles being acquired, retailed and serviced by dealers this year may have potentially dangerous unfixed recalls. According to Carfax, more than 57 million recalled vehicles – more than one out of every five vehicles in the U.S. – currently are in use across the country. The company’s annual research suggests the southern parts of the country are most likely to have cars with open recalls. Southern states like Texas, Mississippi, Louisiana, New Mexico, Alabama and Arizona are some of the top states with the highest open recall percentages. California, Texas, Florida, Pennsylvania and New York have the most vehicles with open recalls. “For more than two decades, Carfax has supported the manufacturers’ efforts to get recalled cars fixed,” said Carfax president Dick Raines. “Every day we help thousands of dealers identify vehicles with open recalls. We also alert millions of drivers about
recalls on their vehicles so they can bring them to dealers to be fixed. Safety is our number one concern.” Carfax offers free services to help notify dealers and about open recalls. Carfax Advantage dealers have their inventory continuously monitored for recalls by Carfax free of charge and get regular reports identifying which vehicles have open recalls. Making this information readily available for dealers can help boost closure rates of open recalls. In addition, registering customers with myCarfax helps keep those drivers informed about recalls. For dealers with service bays, registering customers for myCarfax also comes with free benefits that help increase customer loyalty and retention. The new data also suggests that work-life balance may be a factor for some vehicle owners not knowing about a recall or getting it fixed. Light trucks and SUVs – vehicles often used by businesses and busy families – are the ones most likely to have unfixed recalls.
www.il-iada.org
Recently in Vegas, Carfax checked cars for open recalls at a local DMV. They spoke to several people whose vehicles had open recalls they knew nothing about until Carfax showed them. “Carfax told me the car had an open recall. I found out that it was the driver’s airbag,” said consumer Robert V. in Redmond, Ore. “After purchasing the car it went to the local BMW dealer where it was replaced in less than an hour. I was treated royally, chatted about the car and soon was on my way. I did appreciate knowing beforehand.” Dealers can inform online shoppers about open recalls by listing their vehicles for sale on Carfax Used Car Listings. Every vehicle listed for sale on carfax.com includes the Carfax Report dealers run for each vehicle, which includes open recall information reported to Carfax and helps consumers buy with confidence. Editor’s note: Recall statistics for your area are available upon request. For more information, visit www.carfaxonline.com or call 888-788-7715.
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ASSOCIATION NEWS | BY ANDY FRIEDLANDER
For the past several years, NIADA has worked hard to top itself when it comes to the annual NIADA Convention and Expo.
While it hasn’t been easy, that goal has been met. Attendance has risen for each of the past five conventions, with the past two setting alltime records in that category. The 2017 event had more attendees, more exhibitors and more education sessions on more topics than any in the convention’s 71-year history. Clearing such a high bar takes extreme measures. And so, NIADA has gone mega. That’s mega as in MegaConference – for the first time ever, a showcase for the combined resources of NIADA and the National Alliance of Buy Here-Pay Here Dealers, which was acquired by NIADA in December. The acquisition was the impetus for merging NABD’s traditional May conference into NIADA’s Convention in June, which will create what is expected to be the largest event in the used car industry, one that will provide unmatched resources for independent dealers and allow you to Rewrite the Playbook for success. That event – the NIADANABD Mega-Conference, officially known as the 72nd NIADA Convention and Expo – is coming up June 18-21. After nine years in Las Vegas, it’s moving for 2018 to a brandnew venue, the luxurious Rosen Shingle Creek Resort in Orlando, Fla. So what exactly is a MegaConference? It is some 60 education sessions, the most ever for an NIADA event, covering every aspect of independent dealership operations in five distinct educational tracks – Retail, BHPH, Legal and Regulatory, CPO and an allnew Digital Marketing track. It is sessions exploring new developments and best practices in inventory acquisition, sales, marketing and advertising, F&I, collections, technology, social
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NIADA GOES MEGA NABD Joins NIADA Convention and Expo to Create the Used Car Industry’s Largest Event – the Mega-Conference
media, cybersecurity and so much more, led by the industry’s best and brightest experts – including NIADA’s own Justin Osburn. It is the top-of-the-line BHPH-specific training attendees of NABD conferences have come to expect over the years, featuring NABD founders Ken Shilson and Ingram Walters, NIADA BHPH gurus Chuck Bonanno, David Brotherton and Mark Dubois, and many more of the Buy Here-Pay Here world’s top minds. It is Wednesday afternoon’s Financing Fair, a chance for you to meet one-on-one with a variety of finance companies to discuss your specific problems – and to find solutions. It is the new Marketplace Keynote Series, offering the insights of some of the industry’s most prominent leaders, thinkers, innovators
www.il-iada.org
and disruptors about where the used car market is now and where it’s headed, as well as cutting-edge ideas on how you can take advantage of those conditions. It is by far the largest Expo Hall in NIADA Convention history, featuring more than 210 exhibitors offering the latest state-of-the-art products and services to help keep you ahead of the pack in today’s ultra-competitive used vehicle market. It is the boundless enthusiasm of keynote speaker Dick Vitale, appearing courtesy of CARFAX. Known to basketball fans for his energy, wit and colorful descriptions of players and plays, Dickie V’s entertaining message of overcoming life’s challenges and obstacles is nothing short of “awesome, baby!” He’ll speak Tuesday afternoon and will meet attendees at the CARFAX
booth during the Expo Hall’s Grand Opening Reception that evening. And, of course, it is the traditions that have become an essential part of the NIADA Convention and Expo, beginning with the popular Cigars and Martinis welcome reception Monday night, featuring a tailgate party theme. We’ll honor the industry’s best at Wednesday night’s National Leadership Awards banquet – including Crystal Eagle membership awards, the CPO Dealer of the Year the NABD BHPH Hall of Fame’s latest inductee and the NIADA & Cox Automotive Community Service Award – leading up to the climactic announcement of the National Quality Dealer of the Year on Thursday night. And we’ll close the event in style with a rocking After Party featuring live music. Your chance to go mega by attending the NIADA-NABD Mega-Conference is here now. You can register online at www.niadaconvention.com, and if you do it by May 18, you can get the Early Bird rate of $549. And don’t miss out on group discount opportunities for additional attendees from your dealership. Due to the immense interest in this event, NIADA is offering two options for accommodations. Because the Rosen Shingle Creek is almost sold out, NIADA has secured a block of rooms at the nearby Rosen Centre as well – with transportation to and from the Convention venue provided. But hurry – the deadline for reservations is May 18. For reservations at the Rosen Shingle Creek, call 1-866-996-6338 and use the group code GRP2018NIADA. For the Rosen Centre, call 1-800-204-7234 and use group code GRPNIADA2018. Don’t miss out on this great opportunity. Register and make your travel plans now. For more information about the 2018 NIADA Convention and Expo, visit www.niadaconvention.com or www.bhphinfo.com, or call 800-682-3837.
ACCELERATE
| BY GWC WARRANTY
GET CERTIFIED OR GET LEFT BEHIND
Having a Certifed Program is No Longer an Option
Every customer who hears “Certified Pre-Owned vehicles” instantly equates that with a more confident purchasing decision. But the power behind Certified programs isn’t limited to major manufacturers. With the right program and process in place, dealerships of any kind can cash in on the cachet behind the Certified name. These days, having a Certified program is no longer an option. Without one, your dealership runs the risk of being left in the dust. With independent dealers joining in on the Certified trend, it’s now more about how you execute your Certified program than just having one and hoping it sets you apart from competitors. Even the Playing Field If you don’t have a Certified program today, you run the risk of falling behind the industry. Independent dealers now have access to Certified programs, meaning more dealers than ever before are jumping on the bandwagon. If you look around at competition and see Certified programs popping up, it’s time to get on board before you get lapped by the field.
Marketing Power The term Certified provides a powerful lead generation tool for you. Customers see value in Certified vehicles and will seek them out when browsing inventory. By marketing your inventory as Certified, you’re providing an instant feeling of confidence to your customers who are looking for a car they can rely on. Upsell Opportunities The dealers who have the most success with Certified are the ones who rarely sell it. What this means is that strong Certified programs at independent dealerships often lead to upsell opportunities to richer coverage levels and longer terms. Certified is a basic level of coverage for your customers that should give them confidence in the vehicle, but highlighting what that coverage doesn’t cover can help customers see value in higher coverage levels, which will ultimately increase your revenue opportunities on the back end. Hone Your Skills If you’ve had trouble instituting a consistent F&I process in the past, Certified programs can help you work on upsell tactics while still having a baseline level of coverage to protect your customers. Over time as you develop your F&I process, you’ll see more upsell opportunities converted into actual back end revenue.
Renewal Opportunities Most Certified programs provide shorterterm coverage to protect your customers in the months right after the purchase. Making note of when these contracts are set to expire will give you the opportunity to engage with your customer after the sale. In checking up on your customers, you can remind them their coverage is about to run out. Even if you don’t land a VSC renewal, you might just learn about friends or family members who are shopping for cars. The extra customer touchpoint could prove profitable in the long haul.
PRODUCTS & SERVICES |
NEXTGEAR CAPITAL LAUNCHES PAYMENT FEATURE
Automated Payment System
NextGear Capital recently announced the launch of AutoPay, a new feature within the Account Portal, the floor planner’s account management platform. Account Portal provides account overviews for dealer and auction partners, including a dashboard that offers information, such as analytics and payment history, instantly on any device. The new AutoPay feature lets dealers opt into a recurring and automated payment system that schedules NextGear Capital payments. www.il-iada.org
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WASHINGTON UPDATE | BY SHAUN PETERSEN
Latest Government Issues and Activity NIADA is your voice in Washington D.C., advocating for independent dealers, the used vehicle industry and small business. Here’s a look at the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities. REGULATORY A federal appeals court in March struck down parts of a Federal Communications Commission ruling, including its controversial definition of an automated telephone dialing system. In a unanimous decision, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit overturned the FCC’s 2015 definition as far too broad, noting it “invites the conclusion that all smartphones are autodialers.” According to the Telephone Consumer Protection Act, calls made with an autodialer without the receiver’s consent are a violation carrying penalties of $500 to $1,500 per instance. That law defines an autodialer as “equipment that has the capacity to store or produce telephone numbers to be called using a random sequential number generator.” In 2015, the Obama Administration’s FCC interpreted “capacity” to
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include a device’s “potential functionalities” – meaning even if a device is not capable of autodialing now, it could be with additional software or other modifications. It also said equipment that can dial numbers from a list qualifies as an autodialer. “The commission’s understanding would appear to subject ordinary calls from any conventional smartphone to the act’s coverage, an unreasonably expansive interpretation of the statute,” Judge Sri Srinivasan wrote in the court’s opinion. “It cannot be the case that every uninvited communication from a smartphone infringes federal law and that nearly every American is a TCPA violator-in-waiting, if not a violator in fact.” The court’s decision drew praise from current FCC chairman Ajit Pai, who said the now-overturned interpretation was “yet another example of the prior FCC’s disregard for the law and regulatory overreach.”
www.il-iada.org
LEGISLATIVE A resolution passed by the Senate last month likely spells the end for the Consumer Financial Protection Bureau’s much criticized 2013 guidance on indirect auto lending. S.J.Res.57, a joint resolution that would overturn the guidance under the Congressional Review Act, was introduced March 22 by Sen. Jerry Moran (R-Kan.), with 15 co-sponsors. It passed by a 5147 vote on April 18. The resolution followed a December opinion from the Government Accountability Office that defined the guidance document as a CFPB rule for the purposes of the CRA, which means it can be struck down by a simple majority vote of both houses of Congress. The indirect auto finance guidance, issued in March 2013, claimed dealer discretion on interest rates creates a “significant risk” of unintentional disparate impact discrimination and spelled out the bureau’s intention to pursue enforcement actions on that basis.
Critics have pointed out the CFPB’s theory is based on shaky methodology for determining disparate impact and the guidance was put in place without comments from stakeholders, public hearings or studies of its impact on the cost of credit to consumers. A similar resolution, H.J. Res. 132, has been introduced in the House and is expected to pass. The White House has signaled its support of the resolution and the President is expected to sign it into law. H.R. 5266: Rep. Dennis Ross (R-Fla.) and Rep. Kyrsten Sinema (D-Ariz.) have introduced a bill that would change the CFPB’s leadership from a single director to a bipartisan, five-member, Senate-confirmed commission. The bill was co-sponsored by Rep. David Scott (D-Ga.) and Ann Wagner (R-Mo.). “As one of the most powerful agencies ever created, the CFPB should not be exempt from the principles of good governance, and with this legislation, we can ensure that it no longer will be – regardless of who holds the White House,” Ross said.
GRASS ROOTS The Georgia IADA scored another victory, fighting off a third attempt by legislators to raise the title ad valorem tax on used car purchases. The tax increase would have negatively impacted independent dealers by making it more difficult for them to provide reliable transportation to customers who can’t afford new vehicles. GIADA executive director Paul John credited the association’s government affairs team of Mo Thrash and John Haliburton with the outcome, with an assist from Lt. Gov. Casey Cagle, who supported GIADA’s efforts. “This win confirms GIADA and all used car dealers across the state not only have a voice, but a very loud and powerful one,” John said. “Lawmakers heard us and they know who we are. This past session, they were reminded of just how strong we can be as a united group of small businesses.”
PAC On March 9, Rep. John Carter (R-Texas) held a luncheon in Fort Worth and NIADA was invited to participate. The NIADA-PAC also made a contribution to his campaign. Now in his seventh term in Congress after 20 years as a district court judge, Carter serves on the House Appropriations Committee and is chairman of the Homeland Security Subcommittee on Appropriations. Carter has been a supporter of the auto industry and small business since he was first elected in 2002. He was a featured speaker at NIADA’s National Leadership Conference and Legislative Summit – now known as the National Policy Conference – in 2013, the first time since 1999 the event had been held in Washington D.C. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
REGULATORY MATTERS | BY TODD BRYANT
BOND INCREASE
What Illinois Auto Dealers Need to Know
Last year was a relatively stable one for car dealers and didn’t bring about many changes in state regulation laws. A few states, however, introduced adjustments to the licensing requirements. Illinois is one of them. Senate Bill 1556 introduced a significant increase in the surety bond requirement for dealers and remittance agents. As of January 2018 car dealers are required to obtain an auto dealer bond in the amount $50,000 per location, instead of the previous $20,000 bond. Remittance agents have to post at least a $20,000 bond, double the previous $10,000 requirement. Everyone applying for an Illinois dealer license in 2018 has to comply with the new amounts and then renew their bond before December 31 of each year, regardless of when the bond was issued. Dealers and remittance agents have to submit proof of compliance to the Illinois Secretary of State.
How did bond rates change? The increase in the bond amount for Illinois auto dealers and remittance agents implies a change in the bonding rates as well. Having in mind the bond cost is defined as a rate and not a fixed sum, dealers are now dealing with a slight increase in the final bond cost as well. The cost is essentially a percentage of the whole bond amount, dependent mostly on the applicant’s credit score and credit report items. Dealers can still keep a low rate by improving their score, however. Taking steps to cover current outstanding payments can also help dealers and agents present themselves as more stable and less risky bond applicants. That should significantly lower the final bond price. Finally, experienced dealers can submit a resume demonstrating their industry experience. Some sureties consider this as a sign of trustworthiness, which can in turn drive the cost of the dealer bond down even further. Other Changes Introduced by the Bill One more thing Illinois auto dealers and remittance agents should be aware
of is that along with the increased bond, the new law increased the bond period. According to Senate Bill 1556 licensees are now required to keep the bond effective for 60 months or five years before they are exempt from the bond requirement. In comparison, the bond duration previously was 36 months or three years. Todd Bryant is the president and founder of Bryant Surety Bonds. He is a surety bonds expert with years of experience in helping auto dealers get bonded and start their business.
Q
A How will YOU answer
&
Online Dealer Compliance
a federal enforcement investigation into your business practices?
A. Subscribe to and complete the NIADA ONLINE DEALER COMPLIANCE PROGRAM B. Install self-policing policies C. Create a culture of compliance
D. ALL OF THE ABOVE
niadadealercompliance.com
Train. document. track. comply.
ANNUAL COMPLIANCE SUBSCRIPTION IS ONLY $495 PER LOCATION!
Finally, a comprehensive dealer compliance solution that fits your schedule... and your budget.
Now more than ever, independent auto dealers must show their diligence in operational compliance. Federal agencies like the FTC and CFPB have made it no secret that your business needs to play by the rules and show that you are taking every step to train your employees well. Available online for your entire staff (per location), NIADA’S Online Dealer Compliance modules includes 13 video training session topics below and include interactive testing after each video session:
VIDEO TOPICS • • • •
The Red Flags Rule The Safeguards Rule United States Patriot Act: OFAC U.S. Patriot Act: IRS/FENCEN FORM 8300 • National Do Not Call Act • The Federal Used Car Rule
• Compliant Sales Process • Dealer Advertising Guidelines • OSHA: Dealer Health & Safety Program • OSHA: Hazzard Communication Program • OSHA: Auto Repair Safety • Workplace Diversity • Sexual Harassment
DOWNLOAD COMPLIANCE POLICIES & DEAL AGREEMENTS • Download and print a variety of federally-required dealership compliance policies • Download and print documents & agreementsdesigned to limit dealer liability
For more information and to subscribe now, visit
www.niadadealercompliance.com or call Angela at 817-640-3838.
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DEALER’S EDGE 10www.il-iada.org
May/June 2018
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May/June 2017 / DEALER’S EDGE
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F&I MATTERS | BY SCOTT BATES, CPA
M RE 90
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MOBILE BUSINESS
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Smart. Simple. Fast. Learn how Billy gets MORE at nextgearcapital.com
*This testimonial was received via interview, audio and/or video submission. This testimonial is based on this dealer’s individual experiences, reflecting real life experiences of a NextGear Capital dealer. NextGear Capital does not claim they are typical results that dealers generally will achieve. This dealer’s experiences may not be indicative of future performance or success of any other dealers. Some of the testimonial has been shortened so the whole message is not displayed due to length and/or relevance.
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DEALER’S EDGE May/June 2018
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COLLECTIONS The Key is Relationship Collections best practices are designed to increase the number of payments received on every contract – increasing cash flow and potentially increasing sales from referrals. A shut-off box on a car is no substitute for good collections practices. You are also discouraged from making field calls, as it can violate CFPB rules – not to mention be potentially dangerous. The key is to make your payment a top priority in the mind of the customer – specifically because customers trust and perceive your dealership is willing to work with them to find a solution. Nothing can really motivate a customer to pay for a car except a strong relationship. This approach is harder than billing and repossession. It takes a different mindset among your collections and service staff, but it can be efficient if you establish a positive rapport and understanding from the beginning of the transaction. Your process and paperwork should be consistent and clean every time, no matter who is closing the deal. Emphasize that you expect payments on or before the agreed due dates. If you can, set up an electronic funds transfer with customers around their payroll time. You can’t require it, but you can make it attractive by offering a discount. Outline the process of what will happen if they can’t pay on time. If the car malfunctions or if they need to refigure the payment terms due to a change in circumstances, talk through those situations, too. Establish a clear process for communicating, which in some cases may be opt-in text messaging. You can now use SMS for automatic payment reminders, service reminders and late payment notices. In any and every case, keep the lines of communication open. Follow up with a check-in call. Congratulate customers on their purchase
and ask them if they have any questions. Make it clear your team is there to help so their first contact with you is positive, rather than a delinquency call. Provide clear contact information for customers to reach their “account rep.” A strong closing process with full disclosure followed by a welcome checkin call reduces the need to chase down payments, and also increases the number of payments made. This won’t happen on every transaction. There will still be cases of repossession, but dealers can reduce the chances. A full inventory of cars is not what you want. Deal with service issues quickly. One of the biggest reasons customers stop making payments is that the car has a problem. Make it clear during the closing process that any issues with the car will be handled, whether through a limited warranty or service call. Depending on the issue and timing, work out how the customer will participate in paying for the service. Calculate the cost of the repair against the benefit of more monthly payments, and often the benefit is on the side of more monthly payments and a happy customer willing to refer your dealership to friends and family. Keep in mind that your inventory is not your biggest asset – your portfolio is the golden egg. Accounts need to be worked every day by collections. Don’t just wait for the phone to ring. A 30-day past due notice equals four to six missed payments. If you have 100 accounts, a good rule of thumb is to have four collections staff and one part-timer in the wings to pitch in when necessary. Scott Bates, CPA, is a partner in the audit practice and leads Cornwell Jackson’s Business Services Department, which includes a dedicated team for outsourced accounting, bookkeeping and payroll services. Contact Scott at scott. bates@cornwelljackson.com or 972-202-8000.
SAFETY WATCH |
ACCELERATE
VW RECALLS CARS WITH EXPLODING AIRBAGS
HOW TO CONTEND _ _ AND WIN AGAINST BIG COMPETITION
| BY GWC WARRANTY
Level the Playing Field Recall Partially Supersedes Recall 16V-078
Volkswagen Group of America Inc. is recalling 21,352 2009-14 Volkswagen CC, 2010-14 Golf, 2010-11 Eos, 2007-10 Passat Sedan, and 2007-10 Passat Wagon vehicles. Upon deployment of the driver's frontal air bag, excessive internal pressure may cause the inflator to explode. Volkswagen will notify owners, and dealers will replace the driver's frontal air bag inflator with an alternative inflator, free of charge. The recall began March 16. Volkswagen's number for this recall is 69Q9. This recall partially supersedes recall 16V-078.
Being an independent dealer in a world of new big box stores, online retailers and nearby competitors can feel like being the small fish in an ocean of competition. You can level the playing field, though, with nothing more than an open mind and a willingness to adapt. Keep It Simple And by this, we mean keep it simple for your customers. Is it easy for them to get to your website? Is your inventory laid out in a way that’s intuitive for customers to browse? Can they contact you with just one click and limited information? Today’s customer wants the information they need exactly when they desire it. Your website is the most important piece in making sure they get information quickly and easily. Merchandising As an independent dealer, you don’t have the luxury of manufacturer certified preowned programs. But that shouldn’t stop you from merchandising your inventory the same
way. This goes for both on the lot and online. Having a certified pre-owned program in place helps you make the same promises as bigger stores while giving your customers the confidence that comes with the perception of a certified vehicle. Communication Flexibility Not every customer will want to send messages through web form. And not every customer will want a phone call. Some will want to send you a Facebook message, others might want to tweet at you and some might want a text message. Being able to communicate with your customers in their desired format lets you reach more potential leads. But it’s dependent on your commitment to learning how to communicate in all these different formats. Unique Experience The advantage an independent dealer will always have over bigger competition is a truly unique experience customers can’t get anywhere else. When done correctly, independent dealers can offer a more intimate, lower-pressure experience than big box stores to go along with a friendly local feel that only an independent dealer can provide. Once you’ve used tools and merchandising to attract the same business as bigger competition, use your friendly, comfortable environment to bring it all home.
FORD RECALLS FUSIONS, FOCUSES
Ford Motor Co.is recalling 5,361 201314 Ford Fusion vehicles equipped with a 1.6L GTDI engine and 6-speed manual transmission and 2015-16 Ford Focus vehicles equipped with a 1.0L GTDI engine and 6-speed manual transmission. Also included are four 2017 Ford Focus vehicles that had clutch replacements with potentially affected parts. The clutch may fracture, resulting in damage to the transmission assembly and possibly a transmission fluid leak. Ford will notify owners, and dealers will update the Focus vehicles with software that detects and prevents prolonged clutch slip, and will replace the clutch, as necessary, free of charge. Owners of Fusion vehicles will have their clutch assembly replaced free of charge. Parts are not currently available. Owners will be notified of the recall with an interim notification that began March 26. A second letter will be mailed when the remedy is available, currently expected to be in the second quarter of 2018. Ford's number for this recall is 18S07.
NIADA.TV
Clutch May Fracture
www.il-iada.org
May/June 2018
DEALER’S EDGE
13
SOCIAL MEDIA | BY KATHI KRUSE
DON’T STEP ON A RAKE Avoid Social Media Pitfalls
For many dealers, social media seems like a minefield. Add the fact it's quickly matured into a very viable place to engage customers and promote sales and you've got a terrifying place many dealers would rather ignore.
Ignoring social media in today’s world is the equivalent of opening a store without telling anyone. But all the warnings in the world are not going to motivate a dealer to take action if they still have a lot of fear. I'd like to alleviate some of that fear today. Avoiding social media pitfalls has become a big business. It's difficult to know where to turn for the best advice. For nearly 10 years now, I've been singing the “social media song” and, alas, the needle hasn't moved much, especially for auto retail. You know what? That's okay. It's perfectly fine to venture out into social media at your own pace. What I don't want you to do is venture out and step on a rake.
5 FOUNDATION ESSENTIALS FOR SOCIAL MEDIA SUCCESS
Whether you're new to social media or you've been using it for some time, these five components will help you leverage all you can from each platform.
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DEALER’S EDGE May/June 2018
Secure Your Reputation with a Social Media Policy
At Kruse Control, we advocate implementing an upto-date policy for employee use of social media. The line between dealers and their employees on social media is steadily blurring. Organizations today need a social media policy that helps keep the store’s reputation intact while also encouraging employee participation online. A social media policy outlines how an organization and its employees should conduct themselves online. This document helps safeguard your brand’s reputation. Ideally, you'll want to consult with the following stakeholders when creating a social media policy for your store: • C-level (owners and managers). • Human Resources. • Corporate counsel. • Social media strategist. Because social media moves fast, this policy should be considered a living document – ongoing updates will be necessary.
Written Social Media Strategy
Social media strategy defines how a dealership will use social media to achieve its business goals, including the supporting platforms and tools it will use to do so. At a basic level, it’s a statement of intent, outlining the goals and measurable objectives for using social media, and the target outcomes you want to achieve.
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When defining what it takes to achieve social media success, we need to talk about strategy first. I was inspired to include this component because I receive questions like these from good people, many of whom are struggling to find answers: • “Do I have to be on every social network?” • “What type of things do I say on social media?” • “How often should I post?” • “How do I get more followers?” • “My boss asked me to take over the Facebook page, but where do I start?” • “Should I pay for social advertising?” • “I'm in a boring industry. Do I still need social media?” • “Do I need social media management tools?” • “Should I outsource my social media?” I've had a run of these emails lately and, frankly, my heart aches for these good people because they're lost. It's easy to get lost these days because the social media landscape is no longer a field of flowers sparsely populated. Today, social media is a dense, crowded, noisy, smoggy urban jungle.
Do a Social Media Audit
Whether your social media marketing is in-house or outsourced, it’s often difficult to see where the gaps are between your current successes and where you need to be. Your inbox is full of tips, tools and hacks to “improve” results and it’s exhausting. The best way to remove the guesswork is with a social media audit. A social media audit is a smart step because time and resources are often wasted trying to improve things that don’t need improving, while neglecting the things that really need attention.
Build an Online Review Funnel
Word of mouth referrals have always been a go-to resource for finding trusted sellers, and online ratings sites are where most people turn today.
Online reviews are insanely influential: • 90 percent of consumers read online reviews. • 88 percent trust online reviews as much as personal recommendations. • 86 percent will hesitate to purchase from a business that has negative reviews. • Customers are likely to spend 31 percent more with a business that has positive reviews. • 92 percent will use a local business if it has at least a 4-star rating. Benefits of building an online review funnel: 1. Systematically drive customers to one conversion funnel that routes them to the review sites you care about. 2. Automatically ask, remind and guide happy customers through the funnel. 3. Recover unhappy customers before they vent online. 4. Analyze results daily for actionable insights to improve upon.
Engage with Social Customer Service
People increasingly turn to social media to engage with businesses. Social has matured as a communication channel and people have blended it into their lives. They expect dealers to do the same. While many companies now use social media regularly, very few take social customer service seriously. Currently, 92.5 percent of brands fail to meet customer expectations on social media and these failures can have big implications. Quality customer service – regardless of channel – relies on a meaningful, efficient, solution-focused exchange between dealers and their customers. The growing preference for social media as a communication channel requires your organization to re-think its customer service strategy. Good social customer service strategy keeps your store in the conversation and doesn't allow malcontents and competitors to speak for you.
Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc., which coaches, trains and delivers webinars focused on integrating social media and online reputation management into dealership operations. She can be reached at kathi@krusecontrolinc.com.
www.il-iada.org
May/June 2018
DEALER’S EDGE
15
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