INDIANA INDEPENDENT AUTOMOBILE DE ALERS A S S O C I AT I O N
MAY 2017
CAR LINES
SAVE THE DATE! SUNDAY, AUGUST 27, 2017
IIADA FALL SUMMIT AWARDS DAY - GOLF TOURNAMENT - TRADE SHOW INDIANAPOLIS, INDIANA
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W W W.II A DA .C O M
MAGAZINE
S TAT E A F F I L I AT E
ACCELERATE
BY GWC WARRANTY
5 FACTS YOU DIDN’T KNOW ABOUT COST OF REPAIRS A Fresh Approach
Most dealers have talked cost of repairs when attempting to close a vehicle service contract sale. But has talking about the price of parts and labor returned a mixed bag of results? What if there was a different approach you could take when presenting cost of repairs that would be more effective? In the interest of taking a fresh, new approach with the cost of repairs presentation, let’s take a step back from the price of a new transmission or the labor costs at the repair shop down the road. Let’s rather take a look at some supporting data and approaches that make the cost of repairs discussion more relatable and more effective. Nearly half of all Americans can’t afford an unexpected $400 expense. The Federal Reserve just conducted research that found 46 percent of Americans do not have enough money to cover an
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unexpected $400 expense. Chances are if you’re selling a used vehicle, or perhaps one with higher mileage to a subprime customer, that they would fall into this category. With this knowledge on hand, it should help justify a few extra dollars each month to have a service contract on a vehicle. Age of ownership is changing rapidly. Edmunds research has discovered trade-in volume will likely dip below six million this year. It’s the first time this has happened in five years. Why? Because drivers are hanging on to their cars longer. The same Edmunds report showed that 8- to 15-year-old vehicles had higher value retention than one year prior. If your customers plan on holding onto their cars longer and protecting the value these vehicles retain, a service contract becomes a much easier sell. Expenses from a breakdown don’t stop at parts and labor. Anyone who has had a broken down vehicle knows the process. There’s a tow truck involved. If you’re away from home, you’ll need to find lodging. Parts and labor can be expensive on their own, but when you factor in hotel stays, roadside assistance and towing services, the cost from a breakdown starts to skyrocket. A service contract resolves these fears by
covering more than just parts and labor. Customers are basing their car purchase decisions on parts costs. A recent AutoMD survey reported 15 percent of car buyers factor in costs of repairs when buying a vehicle. It’s one of the leading considerations of recent car buyers – right behind price, longevity and utility. If this is such an important point of emphasis for customers, it would only make sense they would be interested in protecting themselves from such out-of-pocket expenses. Video can tell this story for you and bring it home. According to global media measurement company ComScore, after watching a video, 64 percent of customers are more likely to buy a product. After (or perhaps even before) you’ve made your case about cost of repairs being the reason a customer should buy a service contract, show them a video that tells the story in a succinct manner. It might just be the piece that brings your presentation together and gets your customers to their purchasing decision.
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INSIDE
BOARD MEMBERS
03..................5 Facts You Didn’t Know About Cost of Repairs 06..............................................................................CarLawyer 08...............Facebook Marketing Key Performance Indicators 12..........................Rethink How You Source Auction Vehicles 14.................................................. Quality Dealer Nominations 14..................................................New & Renewing Members
WHAT’S NEW
Tire Safety Week Dates Announced
The dates for National Tire Safety Week 2017 are May 28-June 3. An initiative of the Rubber Manufacturers Association, the event promotes tire safety among consumers. Auto dealers join the tire and auto industry to encourage drivers to “be tire smart.” For more information, or to request print materials, visit www.betiresmart.org.
ADVERTISERS INDEX
ADESA..................................................................................... 7 Black Book................................................................................5 BMW Group Direct............................................................... IFC Dyer Auto Auction..................................................................14 Kesler Schaefer AA..................................................................9 Manheim................................................................................ 11 Manheim Pennsylvania..........................................................13 NextGear Capital................................................................... 12 PassTime.................................................................................. 8 Protective............................................................................. IBC VAuto....................................................................... Back Cover Warranty Solutions................................................................. 3
OFFICE
For information on how to become a member of IIADA, please call 219.661.0287 128 S. East Street # 1393 Crown Point, IN 46308 iiada@comcast.net • www.iiada.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. Car Lines is published 10 times per year 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 Car Lines or NIADA. Likewise, the appearance of advertisers, or their identification as members of NIADA , does not constitute an endorsement of the products or services featured. Copyright © 2017 by NIADA Services, Inc.
President
Andy Zay Zay Leasing & Rentals, Inc. 4957 N. Broadway Huntington, IN 46750 Phone: 260.356.1588 azay@sbcglobal.net
Chairman of the Board Legislative Chairman Fritz Kreutzinger Fritz Associates P.O. Box 168 Fishers, IN 46038 317.842.2228 Fax: 317.842.7900 fritzauto@aol.com
Vice President
Tony Del Real Del Real Automotive Group 1002 Walnut Avenue Frankfort, IN 46041 Phone: 765.446.9204 tdelreal@delrealauto.com
Treasurer
STATE MAGAZINE MGR./SALES
Bruce Norton Drive1 USA, Inc. 1512 W. 96th Avenue Suite C Crown Point, IN 46307 Phone: 219.670.0542 Bnorton@drive1usa.com
EDITORS
Secretary
Troy Graff • troy@niada.com
Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT
Christopher Hanley • chris@niada.com PRINTING
Nieman Printing
Sharon Brennan Fritz in Fishers 8599 E. 116th Street Fishers, IN 46038 Phone: 317.842.2228 sharonb@fritzinfishers.com Tricia Trent Trent Auto Sales 1327 N 6th St. Vincennes, IN 47591 812.882.3772 Fax: 812.882.1986 ttrent01@yahoo.com
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Jennifer Cotton Dyer Auto Auction 219.865.2361 Fax: 219.322.1761 bcotton@dyerauction.com Kim Graham Kim Graham, Inc. 1648 A US 31 S Greenwood, IN 46143 317.888.0100 Fax: 317.888.8900 k.motors@sbcglobal.net Ed White White’s Auto Sales 1105 McKinley Ave. Rensselaer, IN 47978 219.866.7553 Fax: 219.866.7256 edwhite123@att.net John Stumpf Greater Kalamazoo Auto Auction P. O. Box 697 Schoolcraft, MI 49087 269.679.5021 jstumpf@kalamazooaa.com Tony Houk Kesler-Schaefer Auto Auction, Inc. 5333 W. 46th Street Indianapolis, IN 46253 317.297.2300 Fax: 317.297.6236 skesler@ksaa1.com Tyler Trent Trent Auto Sales 1327 N 6th St. Vincennes, IN 47591 812.882.3772 Fax: 812.882.1986 ttrent01@yahoo.com
Taryn Sanchez White’s Auto Sales LLC 1105 N. McKinley Avenue Rensselaer, IN 47978 Phone: 219.866.7553 twhite1517@att.net Harold Drees H.T.D., Inc. 200 E. Main Street Thorntown, IN 46071 317.402.2312 Fax: 765.436.7222 htdinc@msn.com Doug Alvey First Class Auto Sales, Inc. 695 W. 900S Hebron, IN 46341 219.996.2600 Fax: 219.531.4628 talvey65@yahoo.com Andrew J. Inabnitt Approval Auto Credit Inc. 9825 Huggin Hollow Rd. Martinsville, IN 46151 317.422.8001 Fax: 317.422.8020 joe@approvalautocredit.com David D. Baldwin II Best Deal Auto Sales, Inc. 1875 SR 8 Auburn, IN 46706 260.357.0099 Fax: 260.357.0090 dbthesecond@yahoo.com Debbie Andersen Executive Director 128 S. East Street # 1393 Crown Point, IN 46308 219.661.0287 iiada@comcast.net
Travis Baldwin Best Deal Auto Sales 2526 Scotswolde Drive Fort Wayne, IN 46808 Phone: 260.483.7999 travisbaldwin@ bestdealautosalesonline.com
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LEGAL UPDATE
BY THOMAS B. HUDSON AND NICOLE FRUSH MUNRO
THE CARLAWYER
Keeping You Informed with the Latest Governmental Issues and Activity in the Used Car Industry
Here’s our monthly report of legal developments in the auto sales, finance and lease world. This month, we feature a presidential executive order as well as developments from the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the Federal Trade Commission, as well as our case of the month. Remember – we aren’t reporting every recent legal development, only those we think might be particularly important or interesting. Why do we include items from other states? We want to show you legal developments and trends. Also, another state’s laws might be a lot like your state’s laws. If attorneys general or plaintiffs’ lawyers are pursuing particular types of claims in other states, those claims might soon appear in your state. Note that this column does not offer legal advice. Always check with your lawyer to learn how what we report might apply to you, or if you have questions. THIS MONTH’S CARLAWYER COMPLIANCE TIP Dealers seldom give much thought to their compliance with the Americans With Disabilities Act, and, when they do, they think about things like wheelchair access to their buildings. We have picked up reports of complaints and threats of complaints against dealers alleging the dealerships’ websites are not accessible by those with disabilities. This has become a “cottage industry” in some areas of the country, with the plaintiffs’ lawyers threatening to file class action lawsuits unless dealers pay up. And your arbitration agreement won’t help here – these plaintiffs probably have not done business with your dealership. Maybe it’s time for another visit to the lawyer. FEDERAL DEVELOPMENTS Report card time: In early February, the FTC provided its annual letters to the CFPB summarizing the FTC’s enforcement actions, research and policy initiatives, and education efforts in 2016 related to the Equal Credit Opportunity Act and the Fair Debt Collection Practices Act. Alternative data: On February 16, the CFPB announced it is seeking information about the potential use of “alternative data” and modeling techniques in the credit process. The CFPB is requesting public feedback about the benefits and risks of using unconventional information sources, called “alternative data,” to make
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lending decisions about consumers with no credit history or with history that has gone stale or is insufficient to produce a credit score under most scoring models. Specifically, the CFPB is seeking information about: (1) whether using alternative data to create or augment a credit score could increase access to credit by helping lenders better assess consumer creditworthiness; (2) whether the use of alternative data could make credit decisions more complex for both consumers and industry; (3) the impact of the use of alternative data on loan costs for consumers and operating costs for lenders; and (4) implications for consumer privacy and security. Comments on the request are due by May 19, 2017. Trump stifles regulations: On February 24, President Trump signed an executive order requiring every federal agency, except those that receive a waiver, to establish a Regulatory Reform Task Force to evaluate existing regulations and make recommendations to the agency head regarding their repeal, replacement, or modification. The order directs each task force to identify regulations that, among other things, eliminate jobs or inhibit job creation, are outdated, unnecessary, or ineffective, impose costs that exceed benefits, or create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies. It is unclear if executive orders such as this one apply to independent agencies, particularly the CFPB. Banks and third parties – dealers, perhaps? On January 24, the OCC released supplemental procedures for examining national banks and federal savings associations’ risk management of thirdparty relationships. The new examination procedures supplement OCC Bulletin 2013-29, “Third-Party Relationships: Risk Management Guidance,” issued in October 2013. CASE OF THE MONTH Car buyers brought a class action suit against several related dealerships, among others, for violating the Truth in Lending Act, Oregon’s Unlawful Trade Practices Act, and Oregon’s financial elder abuse statute, alleging the defendants failed to comply with the disclosure requirements of TILA and the UTPA. Specifically, the plaintiffs alleged the defendants obtained payments or “kickbacks” from third parties by
negotiating higher interest rates for vehicle financing than the interest rates quoted by the financing entities and that the defendants failed to disclose these alleged payments and kickbacks. The plaintiffs also alleged the defendants failed to disclose they received payments from third parties for arranging the sale of “extended service warranty contracts.” The defendants moved to dismiss. The federal trial court first denied the defendants’ motion to dismiss certain TILA and UTPA claims as untimely. Next, with respect to the UTPA claims, the defendants argued the plaintiffs could not show they suffered ascertainable loss as a result of the defendants’ alleged misrepresentations or concealments or that the loss was caused by the alleged unlawful trade practice. The plaintiffs alleged their ascertainable loss equaled the amount that the defendants received as “kickbacks” or retained as profit with respect to the vehicle financing and service contracts. The court concluded the plaintiffs’ allegations did not support causation under the UTPA – they failed to explain how the defendants’ conduct caused them to suffer losses in an amount equal to the payments or kickbacks the defendants allegedly received. The plaintiffs did not allege how the vehicle transactions would have been different if the defendants had disclosed the alleged payments or kickbacks – for example, that they would have declined to purchase the vehicles or the service contracts or would have obtained more favorable financing. The court provided the plaintiffs an opportunity to amend their complaint to clarify their losses and how those losses were caused by the defendants’ conduct. Because the court found that the TILA claim was timely and that the plaintiffs could, depending on the proposed amendments, sufficiently allege a UTPA claim, the court denied the motion to dismiss the elder abuse claim. Mendoza v. Lithia Motors, Inc., 2017 U.S. Dist. LEXIS 4716 (D. Or. January 11, 2017) So there’s this month’s roundup! Stay legal, and we’ll see you next month. Tom (thudson@hudco.com) is of Counsel and Nikki (nmunro@hudco.com) is a partner in the law firm of Hudson Cook, LLP. For information, visit www. counselorlibrary.com. © CounselorLibrary.com 2017, all rights reserved. Single publication rights only, to the Association. (3/17). HC# 4817-2570-4260
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SOCIAL MEDIA BY KATHI KRUSE
TOP 10 FACEBOOK MARKETING KPI’S
Key Performance Indicators Facebook marketing done right communicates your store’s core message and personality, attracts and engages your target customers, and converts fans into customers. Too often dealers jump onto Facebook without a plan or clear idea of what success really means for them. Most of us have experienced how planning improves our endeavors, and marketing is no exception. A solid social media strategy plan saves time, money and precious resources. It also puts the company in touch with target customers on a more meaningful level. Time spent on strategy planning is evident in the results. “Tactics without strategy is the noise before defeat.” - Sun Tzu In my everyday travels, I see a lot of dealers using the “trial and error” method of Facebook marketing. Example: “Let’s post this random picture of a vehicle for sale so everyone will see how fantastic it
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is!” The number one reason they use this tactic is because they’ve seen another dealer do it. Random pictures of cars have been posted by dealers throughout the country for years. Isn’t it time to hold up on that and do something unique? There’s nothing about benign vehicle photos and “sales jargon” that promises value to the customer. Now, if there was a story behind the image that told of a fantastic customer experience, then telling that story would bring you a big step closer to a quality post. Otherwise, it’s just noise, and noise is something we can all do with less of these days. The ability to recognize the difference between a random, useless post and a quality piece of content is rooted in strategy. Specific goals and their corresponding strategies make Facebook marketing click. What you post is governed by why you post. Defined within your social media strategy plan should be: • Goals you want to reach. • A timeframe to reach those goals. • A roadmap of how you’ll achieve goals. • Definitive metrics. Look for success markers along your Facebook marketing journey. Just like the maps app on your phone shows the best route to take toward your destination, key performance indicators guide you to what success looks like for your Facebook marketing. KPI’s give you a solid
foundation from which to measure results. TOP 10 FACEBOOK MARKETING KPI’S Every social media strategy plan should outline the metrics you’ll analyze for best results. These are Kruse Control’s top 10 Key Performance Indicators we use with our clients: 1. Audience Growth • How quickly are your fans growing? • What are you doing to increase growth? • Are you setting growth goals? • Are you achieving those goals? 2. Audience Profile • Have you defined your target audience? • What type of audience are you building? • How close is the audience you’re building to your target audience? 3. Audience Engagement • Is your audience interacting with your content? • If so, how are they engaging (i.e. comments, likes, shares)? • If they’re not engaging, why not? • Are you responding to comments on posts? • Are you equipped to engage leads when they comment on posts? 4. Content Reach • How many people are seeing your content each week? • What are you doing to improve reach? • What’s the optimal time of day to reach fans/followers? • Are you getting “referral traffic” (website visits) from Facebook (especially blog posts)?
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• Is referral traffic being tracked for remarketing? 5. Engagement by Content Type • What types of content are getting the best results? • Have you tried different types of content that you haven’t before (example: live vs. recorded video)? • Are you prepared internally to produce that new type of content? • What organizational changes need to happen to produce content? 6. Leads • What is the click through rate to each vehicle display page or landing page? • What is the CTR from each social media channel? • Number of leads per landing page (how many filled out lead form)? • Number of clicks to landing page that did not fill out the lead form? • Paid vs Organic Leads (organic leads are the result of networking and relationship building)? 7. Conversions • What’s your conversion rate? How many leads converted on landing pages? • Number of “organic” leads that converted (leads earned, not paid for)? • Which landing pages had the highest conversions? 8. Response Rate & Quality • How quickly are you responding to comments and messages? Facebook grades your page for response time.
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• Is your lead form response time (follow up to lead form inquiries) reasonable? • How effective are you at social customer service? Currently, 92.5 percent of brands fail to meet customer expectations on social media and these failures can have big implications. Bad social customer service isn’t just embarrassing. It’s bad for business: • 38 percent will feel negatively toward the brand without a response, and a full 60 percent will tweet about their negative experiences. • Two thirds of customers with poor customer experience reduce their spending with a brand. • 55 percent of Americans have switched brands due to poor customer service. Customers turn to social media when issues arise, expecting a response. Thirtythree percent prefer to contact brands using social media rather than the telephone. How equipped are you to embrace social media as a customer service channel? Any opportunity to hear customer feedback is a gift. 9. Sales Marketing’s job is to serve up leads. Conversions are tracked to determine if the message is resonating. Marketers, however, rarely track sales, because it’s a hand off of sorts. Other organizational processes come into play and many on both sides of the equation don’t bother communicating about sales results. As a company leader myself, I’ve always
thought of marketing and sales holistically. Tracking marketing through to sales results will only improve both. 10. Negative Feedback • How much negative feedback have you received? • Do you know how much is to be expected (i.e. unfollows, hide posts, etc.)? • What is your process for dealing with negative Facebook reviews? Facebook, at this point, doesn’t offer even a rudimentary process for appealing a review. Your 4.8 stars can quickly become 2.0 with a few negative reviews, regardless of whether they’re real. Next Steps Examine your own Facebook marketing results using these top 10 KPI’s. If you haven’t yet determined your social media strategy, we’re here to help. There’s no sense in waiting. A solid plan with proven strategies takes the guesswork out of social media so you can engage more customers. Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc. Kruse Control coaches, trains & delivers webinars focused on integrating social media and online reputation management into dealership operations.
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ASSOCIATION NEWS BY ANDY FRIEDLANDER
MORE WHERE THAT CAME FROM NIADA Plans Bigger and Better Convention
The 2016 NIADA Convention and Expo was the largest in the event’s 70-year history. It was incredibly well received by attendees – 94 percent of those surveyed said the information they took away from the Convention was very useful, and 99 percent said they are likely to attend again in the future. There’s only one way to follow a tough act like that. Make it bigger and better. NIADA’s 2017 Convention and Expo, coming up June 12-15 at The Mirage in Las Vegas, aims to do just that, helping you Chart Your Course toward success with a packed agenda that includes even more extensive education offerings than those of last year – which were NIADA’s largest and most diverse ever. Last year’s expanded Buy Here-Pay Here agenda has been expanded again for 2017, featuring NIADA national director of 20 Groups Chuck Bonanno, NIADA 20 Group moderator/consultants David Brotherton and Mark Dubois, and some of the top operators and trainers of the BHPH sphere offering training on everything from inventory acquisition and recon to underwriting to collections. Plus, for the first time ever, NIADA presents an industry exclusive: BHPH industry benchmarks for 2017, provided from NABD and NIADA industry data. That’s not the only new item on the agenda. In fact, in addition to Retail, BHPH and Operational Standards, there’s an entire new educational area of focus for the 2017 Convention. Certified pre-owned is the hottest thing in the used vehicle market. CPO sales set a record for the sixth consecutive year in 2016 and are on pace to break that mark again this year, and thanks to programs like NIADA Certified, independents can now get in on the action. Find out how to get your share of the red-hot CPO market and learn its best practices in an array of sessions led by industry experts and some of the nation’s top CPO dealers, including 2016 NIADA CPO Dealer of the Year Todd Hoagey. Everything begins Monday with an in-depth look at the many training opportunities offered year-round by NIADA. Bonanno gives dealers a chance to “test drive” NIADA Dealer 20 Groups, as well as Bootcamps, consulting and more, in his workshop “The Power of
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20.” That’s followed by a “Power Through Education” workshop, as acclaimed sales and leadership trainer/consultant Dave Anderson of LearnToLead shows how the best performing independent dealers are achieving success. While providing dealers the education they need to thrive in the rapidly changing used vehicle industry is a primary focus of the NIADA Convention and Expo, there is far more to it than that. Start with the keynote speaker, Captain Richard Phillips, whose dangerous and dramatic encounter with Somali pirates as skipper of a merchant ship in 2009 inspired a best-selling book and the hit movie Captain Phillips. He’ll be on hand to tell his story Tuesday afternoon, courtesy of Carfax. Capt. Phillips will also appear for autographs at Carfax’s booth in the Expo Hall, which is again sold out and will include more than 165 exhibitors representing the latest cutting-edge technology, products and services designed to help your dealership stay on top of the ultra-competitive used car market. As always, we’ll honor the industry’s best at Wednesday night’s National Leadership Awards banquet – including Crystal Eagle membership awards, the coveted Ring of Honor and the NIADA and Cox Automotive Community Service Award – leading up to the climactic announcement of the National Quality Dealer of the Year on Thursday.
Of course, there’s also time for fun, beginning with the popular Cigars and Martinis welcome reception Monday night, with a “Havana Nights” theme and the band South Beach. And we’ll close the event in style in Treasure Cove with a rocking After Party featuring live music. All of this is happening at the spectacular Mirage, with its 17 restaurants, eight bars and lounges including the exclusive 1OAK nightclub, Cirque de Soleil’s Beatles LOVE show, the Secret Garden and Dolphin Habitat, a tropical pool with waterfalls, lagoons and cabanas, and the famous Volcano. To be a part of the used vehicle industry’s event of the year – and NIADA’s biggest event ever – register online at www. niadaconvention.com. Use the promo code YOYAGE17 before May 31 for a discounted rate of $449 – a $200 savings. Be sure to click on the “Travel & Accommodations” tab to book your hotel now at our discounted room rate of $150 per night, which includes the nightly resort fee, in-room Internet and fitness center access. Rooms are limited, so don’t wait. You can also get the discounted rate by calling The Mirage at 800-627-6667 and mentioning “NIADA Annual Convention 2017.” For more information about the 2017 NIADA Convention and Expo, visit www.niadaconvention.com or call 800-682-3837.
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MANAGEMENT MATTERS BY DALE POLLAK
RETHINK HOW YOU SOURCE AUCTION VEHICLES Adapt to Market Shifts How has your auction-sourcing process changed in the past 12 to 18 months? About a third of dealers say things are pretty much the same when it comes to sourcing auction vehicles. In many instances, dealers believe their used vehicle managers and buyers could do a better job, but they don’t feel a compelling need to make any dramatic changes. These are dealers who’ve expanded their wholesale acquisition net beyond local sources. Their focus is at least regional, if not multi-state. Managers and buyers are traveling further to find the right auction inventory for their dealerships. Other dealers are buying more online. These dealers fall into two categories: those who are learning the ropes of acquiring auction vehicles through online channels, and those who want online purchases to make up a majority share of their wholesale acquisitions. In both cases, dealers say they see online auctions as more cost-effective and efficient than sending managers to auctions to acquire wholesale inventory. I’d estimate about 20 percent of dealers have transitioned to buying solely online. Typically, the shift involves the hiring and/or training of acquisition specialists – tech-savvy individuals who spend the majority of their time researching vehicles and managing live and proxy bids to acquire cars. Here again, dealers say the change resulted from a desire to make auction sourcing less costly and more efficient. I worry the most about dealers who fall in the first group. If auctions were like fishing, these dealers would be the guys who are basically bringing the same bait and tackle to the same fishing holes, hoping to bring home the best fish. They see enough occasional success to maintain the same routine, even as the law of diminishing returns erodes their potential for success. They may even justify less-thanoptimal results with a purist-type position – the guys with the fancy baits, high-tech fish finders and tackle aren’t really “fishing,” at least not in the traditional sense. But today’s wholesale market is anything but traditional. Consider the following factors. Increased Supply Not long ago, dealers bemoaned what they considered a dearth of decent cars available at auctions. Today, we have the opposite problem – an unprecedented, and growing, level of wholesale supply that will bring a commensurate rise in vehicle value volatility and risk. Increased Competition In the months ahead, analysts say dealers
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will see fewer trade-in opportunities from new vehicle customers – a by-product of rising levels of leasing in recent years. Edmunds reports that fewer than half of new vehicle deals involved a trade-in. This market dynamic means more dealers will look to auctions to acquire the inventory they need to drive their retail sales and profit objectives. Increased Market Insight New technologies and tools are helping dealers efficiently pinpoint the auction vehicles that offer best retail potential for their dealerships, based on the front-end gross profit the vehicle might generate as well as how fast it will sell, given the number of competing units available in the market. For these dealers, there’s little, if any, guesswork involved when they make a decision to acquire an auction vehicle. Increased Margin Compression Unfortunately, the trend of the past several years will continue in the months ahead – pricing transparency and rising costs will continue to erode used vehicle profit margins. Add in the aforementioned volatility due to increased wholesale supply, and it is an ever-greater imperative to consistently buy the right auction car on the money. To me, these factors indicate a wholesale market where change is ever-present, and tomorrow’s opportunities will likely look different than they do today. That’s why I’m more confident about the future success of dealers who’ve actively been changing the way they source auction inventory. In the months ahead, they’ll be better positioned to adapt to market shifts and gain advantage. Their competitors, meanwhile, will still be arguing over whether something needs to change. Dale Pollak is founder of vAuto and has published several books on his Velocity Method of Management.
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ASSOCIATION NEWS
ASSOCIATION NEWS
QUALITY DEALER NOMINATIONS Application Deadline: July 1
Nominate a dealer today for IIADA’s 2017 Quality Dealer of the Year. Applications are now being accepted. The application deadline is July 1, 2017. The winner will represent Indiana at the 2018 NIADA Convention & Expo and compete for the coveted NIADA National Quality Dealer of the Year award. The public recognition and prestige associated with this award will produce many benefits for your dealership. Our 2017 Indiana Quality Dealer of the Year will be named and recognized at our 30th Anniversary Golf Tournament and Awards Day on August 27. Eligibility: Dealers must be nominated by an IIADA member or sponsor. To request an application, email iiada@ comcast.net or call 219.661.0287.
NEW AND RENEWING MEMBERS IIADA recognizes the following members
The following members have joined* or renewed their membership since our last issue of Car Lines. Thank you for your membership in Indiana’s trade association for independent dealers.
Andrews Auto Sales Dan Francis Evansville Best Buy Motors Jaspal Gothra Lafayette Best Deal! Auto Sales David Baldwin Fort Wayne Best Deal! Auto Sales Dave Baldwin II Auburn
Auto Express* Nathan Buche Lafayette
Best Deal! Auto Sales Dave Baldwin Warsaw
Best Deal! Auto SalesThe Truck Store* Dave Baldwin Fort Wayne
Best Deal! Auto SalesThe Import Store David Baldwin Fort Wayne
Carmel Auto Brokers* John and Cassandra Salz Carmel
Curtis Motors Sales Co Mike Hamilton Indianapolis
CC Motors* Chad Donnell Plainfield
Envirotest Systems Jennifer Kharchaf Crown Point
Fishers Imports* Peyman Rashidfarokhi Fishers
Gebhardt Motor Sales Tim Gebhardt Osceola
Indianapolis Boat Co.* Tyler Griffin Indianapolis
Great Deals on Wheels Rich Newenhouse Michigan City
Redwood Automotive* Andrea Beaver Noblesville
HBK CPAs & Consultants Rex Collins Canfield
Rocks Auto Exchange* Brian Ewen Westfield
Prestige Auto Sales James Horner Indianapolis
Stoops Automotive Group* Jeff Stoops Muncie
Schultz Auto Sales Bob Schultz DeMotte
Terre Haute Auto & Equipment* Jack Harvey Terre Haute
Slone Automotive Enterprise Donald H. Slone Clarksville
45th Street Motors Kirk Silkas Highland
Vincennes Autoplex Keith Webb Vincennes
AF Sales and Service Indianapolis
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INDUSTRY NEWS
NIADA.TV TO STREAM WORLD AUTO AUCTIONEERS CHAMPIONSHIP May 12
For the sixth consecutive year, NIADA.TV will webcast the World Automobile Auctioneers Championship live, courtesy of the National Auto Auction Association and co-sponsor NextGear Capital. The competition will be held May 12 at Manheim Pennsylvania in Manheim, Pa. NIADA.TV’s coverage will begin at 8 a.m. EDT. Watch the rapid-fire action as the best auctioneers, ringmen and teams in the business compete for prize money and the coveted titles of World Champion. Michael Riggins is the defending champion auctioneer, while Aaron Brown won the 2016 ringman title and Blake McDaniel and Dustin Taylor earned
the team championship. This year’s judging panel consists of the following industry executives: • Eric Authenrieth, general manager of Carolina Auto Auction, ServNet vice president and treasurer. • Brad Bollman, vice president of remarketing solutions at GM Financial. • Kevin Brown, president and owner of Missouri Auto Auction, president of ServNet. • Frank Hackett, CEO of National Auto Auction Association. • Grace Huang, Manheim senior vice president of inventory services. • Lori Jones, Texas Auction Academy
vice president. • Shane O’Dell, president of Cox Automotive Financial Solutions and NextGear Capital. • Rich Perkowski, national auction manager at BMW Financial Services. • Frank Stapleton, 1991 Reserve World Champion Auto Auctioneer. • Stephane St-Hilaire, ADESA president and CEO. • Laura Taylor, Charleston Auto Auction general manager. • KAR / ADESA Judge • Alternate Judge: Chad Bailey, general manager of Akron Auto Auction and vice president of NAAA.
competitive within your market. The protection you offer on your vehicles can help you safeguard your profits as well. Offering vehicle service contract protection provides profit opportunities on the back end of deals that can make up for any margin compression you feel on the front end. This allows you to price competitively without putting profits at risk. A bonus benefit is the confidence you’re giving customers to drive off your lot worry-free. But a service contract only provides these benefits if it’s presented to every customer, every time. Perhaps the most straightforward way to put all these pieces into motion is to offer a certified pre-owned program.
Statistics published in Auto Remarketing show certified pre-owned vehicles can demand, on average, $700 more per unit. Similar statistics report they are sold an average of 12 days more quickly. Simply by offering a certified pre-owned program, you can meet all the demands of a higher used car supply: move vehicles more quickly; protect your margins; and earn extra profit per unit through service contract protection. A massive supply surge doesn’t need to be feared if you have the right plan in place. By acquiring inventory you can move quickly and providing service contract protection that preserves your margins, you can bask in this rare opportunity to move mass quantities of high quality used inventory.
ACCELERATE
BY GWC WARRANTY
HIGH SUPPLY, HIGHER DEMANDS You Need Not Fear
The surge of off-lease vehicles set to hit the market – 3.6 million as estimated by Manheim – is a great source of excitement for used car dealers. But it can also be a cause for concern. Will such a supply flood push down prices and compress margins? Will competition within the market make it difficult to maintain strong profits per unit? These are all valid questions dealers need to prepare for. To combat margin compression from an overloaded used market, it’s important to first know what vehicles you can move most quickly. Go back in your books and see what vehicles sat on your lot for the least amount of time. Try to identify any trends for what types of vehicles you should seek out at auction. Moving more vehicles each month will help combat outside forces applying pressure on your margins and help you stay price
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MEMBER BENEFITS
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For $295 You Get Membership In Both IIADA and NIADA Plus All Of The Following Benefits And Even More That Are Not Listed! Programs for Extra Profit
• Dealer Bond at Member Rates • Dealer Insurance • Health Insurance • Forms • Financing • Software • IIADA Help Desk • National Dealer Network Skip Tracing Contacts • College Scholarships • Prescription Drug Card • National Dealer Network
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• Car Lines Publication • Used Car Dealer Magazine • Federally Required Safeguards Policy Document • Federally Required Red Flags Rules Policy Documents • IRS Audit Technique Guide For the Independent Used Car Dealer • Current Industry Information • Legislative Alerts • NIADA Annual Market Analysis
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• Certified Master Dealer Program • Free Access to NIADA.tv Training at Your Business • Access to IndependentDealer.com where dealers go for answers • NIADA Membership and Window Decal • IIADA “Symbol of Integrity” Logo and Window Decal • NIADA Annual Convention and Trade Show • Code of Ethics
2017 Member Auction Coupons For A Total Savings Of $3,000! abc Detroit/Toledo ADE of Indianapolis ADESA Cincinnati/Dayton ADESA Flint ADESA Indianapolis ADESA Lansing Anderson Auto Auction Clark County Auto Auction Dyer Auto Auction Fort Wayne Truck and Auto Auction Greater Kalamazoo Auto Auction Greater Mishawaka Auto Auction Greater Rockford Auto Auction Indiana Auto Auction, Inc. Indianapolis Car Exchange Kesler-Schaefer Wholesale Auto Auction Manheim Chicago Manheim Cincinnati Manheim Indianapolis Manheim Lexington Mobile Sale Manheim Louisville Manheim Ohio Mt. Vernon I-64 Auto Auction West Michigan Auto Auction Wolfe’s Auto Auctions-Evansville/ South Bend/Terre Haute
AUC T ION C OUP ON B OOK P RIN T ING SP ONSORED B Y: • AFC • CVR • ASC WARRANT Y • 700 CREDIT AMERICAN RECOVERY ASSOCIATION
Representation
• State Lobby and Consultant Services • State Legislative and Regulatory Tracking and Reporting • Federal Lobby and Consulting Services • Federal Legal, Legislative and Regulatory Tracking and Reporting • Indiana Department of Revenue Liaison • Indiana Dealer Services Liaison • Indiana Bureau of Motor Vehicles Liaison
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SUPPORT IIADA! We are your voice in Indianapolis.
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Indiana Independent Automobile Dealers Association
MEMBERSHIP APPLICATION The IIADA Has the Independent Auto Dealer Covered! Phone: (219) 661-0287 • Fax: (219)663-5294 iiada@comcast.net
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JOIN TODAY For an annual membership investment of only $295,
which includes an NIADA membership, you get a $3,000 Auto Auction Coupon Book and a whole lot more!
GENERAL INFORMATION Dealership Name ____________________________________ Dealer Lic#_______________ Mail Address ________________________________________________________________ County _____________________________________________________________________ City/State/Zip________________________________________________________________ Phone _____________________________________________Fax ______________________ E-mail_______________________________________________________________________ Website_____________________________________________________________________ Owners (Please Print) _________________________________________________________ Recommended By _____________________________________________________________
PAYMENT INFORMATION oCheck oVisa oMasterCard Credit Card Number: _____________________________________Expiration Date: ________ Signature: _____________________________________________________________________________
Please include your email address, phone and fax numbers so that we can easily communicate with you. Membership dues are $295 for 12 months from the date you join, and your National lADA dues are included. Please send application and check or credit card information to: IIADA, PO Box 1393, Crown Point, IN
This is our personal invitation to you to join the State and National Independent Automobile Dealers Professional Associations It is important to me to be recognized as a professional! Enclosed are my annual dues of $295 to make sure that my business has all the advantages IIADA/NIADA Inc., provides to put me at the forefront of my profession. By completing this form, I agree to abide by the Code of Ethics. Also, I am consenting to and giving IIADA/NIADA Inc., its affiliates and subsidiaries, my permission to (until I give written notice to discontinue) contact me and provide information to me at the mailing and email addresses, telephone and fax number(s) I have provided.
46308
Note: 25% of dues are non-deductible
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ASSOCIATE MEMBERS
IIADA Associate Membership is available to automotive related businesses. Please call 800-310-3112 for more information on Associate Memberships. 700 Credit
Ann Carson 202.422.2351 aclarkA@700credit.com www.700credit.com
AFC
Brendon Billups 2950 E. Main St. Plainfield, IN 46168 317.431.5685 Brendon.billups@autofinance.com
Ally-Smart Auction
Jeff Kubicki 317.650.0331 jeffrey.kubicki@ally.com www.smartauction.biz
Alpha Omega Group Brad LeBlanc 513.317.9861 brad@aogllc.com
Ashton Agency Inc.
Dealer Insurance, Bonds Kathy Alexander 407.678.5900 kalexander@ashtonagency.com
ASC Warranty Susan Williams/ Clayton Morgan 800-442-7116
AutoZone
Gerry Sutter gerald.sutter@autozone.com 440.263.3389
Black Book National Auto Research Larry Knapp lknapp@blackbookusa.com 800.554.1026
Cars.com
175 W. Jackson Blvd., 8th Fl. Chicago, IL 60604 800-298-1460 dealers.cars.com
Diversified Vehicle Services
Glenna Deviers 317.862.9100 www.diversifiedvehicleservices.com
Drive1 USA, Inc.
Bruce Norton 1512 W. 96th Ave., Ste. C Crown Point, IN 46307 Phone: 219.670.0542 Email: Bnorton@drive1usa.com
Donn Wray, Attorney at Law Bamberger, Foreman, Oswald & Hahn, LLP Phone: 317-464-1591 dwray@bambeger.com
Envirotest Titling & Registration Kevin Lewis 1445 Brookville Way Suite G Indianapolis, IN 46239 317.322.0020 www.etrindiana.com
Envirotest Titling & Registration Kevin Lewis 1111 S. Green River Rd. Suite 100 Evansville, IN 47715 812.909.0116 www.etrindiana.com
Envirotest Titling & Registration Jennifer Kharchaf 1171 Breuckman Dr., Ste. B Crown Point, IN 46307 219.661.8220 www.etrindiana.com
Frazer Computing Inc.
6196 US Hwy 11, P O Box 569 Canton, NY 13617 888.963.5369 www.frazer.com
Freedom Warranty
John Skelton 423.207.1333 www.freedomwarranty.com
GWC Warranty
Carmie Fruits - Indiana Dealer
Consolidated Automotive Services Consultant Chris Walsh 812.988.8300 www.consolidated autoservices.com
Custom Facilities
317.259.0038 lcolle@cfidm.com BuildMyDealership.com
CVR-Computerized Vehicle Registration
Ron Zimmerman 317.522.6256 Fax: 866.231.4996 rzimmerman@cvrreg.com
Dealertrack
Diane Zewalk 115 Pohesanut Dr., Ste. 201 Groton, CT 06340 860-448-3177 Fax: 860-448-3187
Dealer Funding
Curt Massey 770.883.3883 cwm@dealerfunding.com www.dealerfunding.com
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PO Box 7900 Wilkes-Barre, PA 18773 317-374-6271 cfruits@gwcwarranty.com www.gwcwarranty.com
HBK CPAs & Consultant Rex Collins 330.758.8613 rcollins@hbkcpa.com
Insurance Professionals-Dealer Specialists Mike Lee 8509 Zephyr Dr. Indianapolis, IN 46217 317-432-1092 Fax: 317-300-0501 teamallenc21@comcast.net
Insurance Professionals of New Palestine
Mitch Fidler Network Benefits of Mid America 35 W. Main St. P.O. Box 467 New Palestine, IN 46163 Office: 317-861-4411 800-688-7988 Cell: 317-750-3032
Keystone Insurers Group
Lori Simpson 570.473.2146 lsimpson@keystoneinsgrp.com
Lincolnway Insurance Services Greg St. Germain 336 E. Lincoln Hwy. Schererville, IN 46375 219-865-2227 gregg@lincolnwayinsurance.com
National Auto Auction Association Frank Hackett 301.696.0400 naa@naa.com
Nationwide Cassel LLC 773.777.7600 www.nac-loans.com
NextGear Capital
Lori Kahre 1320 City Center Drive Suite 100 Carmel, IN 46033 Phone: 317.571.3845 www.nextgearcapital.com
Teipen, Selanders, Poynter & Ayres, P.C.
Certified Public Accountants Barnett Sapurstein, CPA 317.598.6700 bsapurstein@teipencpa.com
Turner Acceptance
Jonathon Levin Phone: 773.290.5007 turneracceptance.com
Universal Publications
PO Box 628 Plainfield, IN 46168 317.203.5118 publicationsinc.universal@ yahoo.com
Verifacto, Inc.
Enrique Castiblanco info@verifacto.com 678.916.8311
Penn Warranty Corporation
Jude Tuma/Michael Roe 1081 Hanover St. Wilkes Barre, PA 18706 800-356-9441 michael.roe@pennwarrantycorp.com www.pennwarrantycorp.com
Preferred Warranties, Inc.
Gregg Reidenbach/Guy Loeffler 800-548-1121 info@warrantys.com www.warrantys.com
Professional Financial Services Matt Reece Phone: 864.237.6090 Matt.Reece@pfs-corp.net Nat Rieder Nat.Rieder@pfs-corp.net Phone: 614.935.9808
Regulation and Revenue LLC Myles Stevenson 502.387.5485 myles@reponotice.com
Reliable Auto Finance
Lester Dean PO Box 9700 Wyoming, Michigan 49509 616.438.3591 Fax: 616-245-5978 lesterd@reliableautofinance.com
Somerset CPAs
Jane Saxon, CPA 3925 River Crossing Pkwy. Indianapolis, IN 46240 317.472.2183 jsaxon@somersetcpas.com
SPIREON
Dave Boekholder 800.557.1449 dboekholder@spireon.com
Strategic Consulting Services Jeff Bond 317.363.6458 jeff@scspro.net
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