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I ND I A N A I ND E P E ND E N T AU T O M O B I L E D E A L E R S A S S O C I AT I O N
AUGUST 2017
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MAGAZINE
30TH ANNIVERSARY GOLF TOURNAMENT AWARDS DAY– TRADE SHOW
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BOARD MEMBERS
06...............................................................................Carlawyer 07....................................... Do Online Reviews Really Matter? 08...............................................NIADA Convention Highlights 09............................................... Add Structure and Scalability 10........................................Common Sales Mistakes to Avoid 12............................... A Longer-Term View of Digital Retailing
WHAT’S NEW NIADA.TV
Once again NIADA.TV presents the NIADA Online Convention, a website that includes every session and special event of the 2017 NIADA Convention and Expo, held in June in Las Vegas. The NIADA Online Convention, available at www.niadaconvention.tv, is free for convention attendees. Dealers and others who did not attend can access the site for a one-time yearly fee of $149. In addition, the NIADA Virtual Trade Show is available free at NIADA.TV. Viewers can see videos of convention exhibitors’ product and service offerings from the vendors’ Expo Hall booths.
ADVERTISERS INDEX
ADESA .....................................................................................5 AmTrust Financial ............................................................... IFC Black Book................................................................................3 BMW Group Direct.............................................................. IBC Dyer Auto Auction....................................................................7 Kesler Schaefer AA..................................................................9 Manheim ................................................................................11 NextGear Capital ...................................................................12 VAuto....................................................................... Back Cover
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.
STATE MAGAZINE MGR./SALES
Troy Graff • troy@niada.com EDITORS
Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT
Christy Haynes • christy@niada.com PRINTING
Nieman Printing
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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
Bruce Norton Drive1 USA, Inc. 1512 W. 96th Avenue Suite C Crown Point, IN 46307 Phone: 219.670.0542 Bnorton@drive1usa.com
Secretary
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
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
Note 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 For federal and state regulators, dealership ads are the lowest-hanging fruit. A photocopy of a newspaper ad or a screenshot of a website is all the proof needed to show many violations. Once a dealership’s obviously noncomplying ad is challenged, the only question remaining is the number of zeroes needed to complete the check the dealership writes to pay the assessed penalty. Where do your ads come from? Do you buy ad programs from a vendor, or do you craft the ads yourself? If you use a vendor, what written assurances about compliance do you demand before you sign the vendor’s contract? If you are doing the ads yourself, how much do you know about the federal and state laws that regulate your ad content? If you’re just duplicating ads from another dealership you picked up at your last 20 group meeting, you probably need to be in another business. FEDERAL DEVELOPMENTS VW clean diesel claims: On May 17, the FTC announced a federal district court judge in San Francisco signed a settlement negotiated by the FTC and private plaintiffs providing for consumer redress and starting the formal claims process for owners of Volkswagen, Audi, and Porsche 3.0 liter TDI diesel cars. The settlement deals with Volkswagen’s allegedly misleading “clean diesel” claims. The FTC will monitor VW’s compliance with the settlement’s provisions, which include special protections for those in the armed forces and rural consumers who may be far from the nearest dealer. Under the 2.0 liter and 3.0 liter settlements, Volkswagen will offer consumers over $11 billion in compensation. The FTC announced in February that consumers who bought 3.0 liter vehicles will receive up to $1.2 billion in compensation in addition to the more than $10 billion redress fund already created for 2.0 liter consumers. In all, consumers who bought affected “clean diesel” vehicles will receive up to $11.5 billion, and the court may hold Volkswagen in contempt if it makes deceptive environmental claims in the future. Hold on to your wallet: The FTC held a conference in Washington, D.C, on May 24 that examined the state of identity theft now and how it may evolve in the future.
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The “Planning for the Future” event brought together industry representatives, consumer advocates, government officials, and others. The conference included panel discussions on how identity thieves acquire and use consumer information, how websites trade in stolen consumer information, the impact of identity theft on financial services, healthcare and other sectors, the challenges identity theft victims face, and resources available to them. FTC technical experts described how consumer data available online is used by malicious actors. STATE DEVELOPMENTS The attorneys general for Massachusetts and Delaware have settled charges against a major finance company arising from the company’s subprime auto financing operations. The AGs alleged the company funded auto loans – both AGs used the term “loans” to refer to what were undoubtedly retail installment contracts – without having a reasonable basis to believe the borrowers could afford them and knew the reported incomes used to support credit applications submitted to the company by car dealers were incorrect and often inflated. The Massachusetts AG’s office found the company’s own internal audit concluded the company’s oversight of auto dealer conduct when making subprime loans was inadequate. Despite identifying a group of dealers that had extremely high default and delinquency rates and other problems, the company continued to fund loans through these dealers. The company also allegedly identified a group of dealers it called the “fraud dealers,” but continued to fund loans through them. The Delaware settlement requires business reforms by the company, including procedures to screen contracts originated by Delaware dealers to ensure they comply with Delaware law and meet minimum documentation requirements. The company also agreed to prospectively identify and repurchase subprime loans sold to third parties that it later determines do not comply with Delaware law. The Massachusetts settlement requires $16 million in payments to more than 2,000 consumers and a $5 million payment to the state. The Delaware settlement requires the company to pay $2.875 million into a trust to benefit hundreds of harmed Delaware consumers. The company will also pay just over $1 million to the Delaware Consumer Protection Fund. Under the terms of the settlements, the company neither admitted nor denied either state’s allegations. These enforcement actions are likely to have far-reaching consequences. This finance company will be tightening its procedures to eliminate dealer fraud, but you can expect every finance company hearing about the Delaware and Massachusetts action will be doing so as well.
CASE OF THE MONTH Justin Bare bought a car with an anti-theft system manufactured by Innovative Aftermarket Systems, LP. As part of the sale, Bare bought Innovative’s “Protection Plus” policy, which included a promise to pay Bare $2,500 in the event the anti-theft system did not deter theft and Bare’s car was not recovered. Subsequently, Bare’s car was stolen and not recovered. Bare made a claim under Innovative’s policy, but Innovative denied his claim as untimely. Bare, on behalf of a similarly situated class of plaintiffs, sued Innovative, alleging various causes of action for violations of West Virginia insurance law. Innovative moved to dismiss, arguing the anti-theft system’s policy was not insurance. The federal trial court granted Innovative’s motion. Innovative argued that because the policy was not insurance, Bare’s claims it violated West Virginia’s insurance law must fail. West Virginia insurance law exempts warranties. A warranty includes, “in relation to a product[,] . . . an undertaking that guarantees indemnity for defective parts ... or other remedial measures ... and that is made solely by the manufacturer, importer or seller of the product ... without payment of additional consideration, not negotiated or separated from the sale of the product ... and incidental to the sale.” Analyzing West Virginia’s warranty exemption, the court found that (1) Innovative’s policy was simply a guarantee by the anti-theft system’s manufacturer of the system’s performance, (2) Bare did not claim he purchased the policy separately from the anti-theft system, and (3) the monetary benefit under the policy would be paid only to Bare. Therefore, the court concluded the policy was a warranty and exempt from West Virginia insurance law. Do you know the rules that apply to the sale of “ancillary” or “aftermarket” products during the F&I process? These rules vary by state and by product, and, as this case illustrates, a consumer’s lawyer might allege insurance laws apply to the products. If you haven’t had each product you sell vetted for compliance under state and federal law, it’s time to get a move on. Bare v. Innovative Aftermarket Systems, LP, 2017 U.S. Dist. LEXIS 68746 (S.D.W. Va. May 5, 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. Tom has written several books and is the publisher of Spot Delivery, a monthly legal newsletter for auto dealers. He is editor in chief of CARLAW, a monthly report of legal developments for the auto finance and leasing industry. Nikki is a contributing author to the F&I Legal Desk Book and frequently writes for Spot Delivery. For information, visit www.counselorlibrary.com. © CounselorLibrary.com 2017, all rights reserved. Single publication rights only, to the Association. (6/17). HC# 4824-2020-4362.
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ONLINE MARKETING BY KENNY ATCHESON
DO ONLINE REVIEWS REALLY MATTER? Combatting Misconceptions
When asked about online reviews, dealers typically offer one of six responses: • There is nothing we can do about it – our customers are quick to complain. • We ask for reviews but haven’t had much success. • We used to ask. We gave up. • We are doing pretty good – we only have “X” negative reviews. • We don’t have any reviews at all. That’s a good thing, right? • Our customers don’t read online reviews. Denial is not a river in Egypt. A dealer who believes people don’t read online reviews has probably given up and wants to believe customer reviews are irrelevant. Potential customers do read online reviews. They choose not to do business with dealerships because of negative appraisals from existing customers. Then there are dealers who believe online reviews are irrelevant because they know their dealership treats people right – despite what unhappy customers have said in any negative online reviews. But consider how people are actually treated at that dealership versus the perception of how that customer is treated. It may be opposite. As a consumer, you may be one of the very few these days who does not read reviews when shopping online. It is important to realize the difference in how you think and how your customer thinks. Your customer has an entirely different mindset than yours. In 2016, Bright Local published a study about an online review survey. Research showed the following: • 84 percent of people trust online reviews as much as a personal recommendation. • Seven out of 10 consumers will leave a review for a business if they’re asked to. • 90 percent of consumers read less than 10 reviews before forming an opinion about a business. • 54 percent of people will visit the website after reading positive reviews. • 73 percent of consumers think reviews older than three months are no longer relevant. • 74 percent of consumers say positive reviews make them trust a local business more. • 58 percent of consumers say the star rating of a business is most important. This was not a study just for car buyers. One could argue the more important the purchase, the more a customer will
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research that purchase – meaning online reviews could matter even more for car dealerships. Not only do customers read reviews, they trust online reviews. More trust leads to a faster, smoother sales process and more effective marketing and advertising. Simply asking customers to write a review likely won’t be as effective because there needs to be a mechanism to filter unhappy customers and complainers. Used car dealers get complaints. The trick is to keep complaining internal and get positive feedback posted publicly. There is a right way and a wrong way to do this – using a system is a step in the right direction. Keep in mind the customer is being asked to do something in addition to handing over their money. If they see it as a favor to the business, they may think, “I already did you a favor when I bought your product and gave you my money.” Asking for reviews without any filter to weed out unhappy customers is a gamble. Without a system it may take 100 happy customers to write the same amount of reviews to balance the effect on your rating of one unhappy customer. Then there is the idea that the business with only a few negative reviews is doing pretty good. Well, that depends. Are there 1,000 great reviews and 10 bad ones? Or are there 25 good reviews and 10 bad ones?
If you want a threshold, have at least a 4.1 rating and shoot for a 4.5. Consider the American grading scale. Buyers do not know whether the business has sold thousands of vehicles to thousands of happy drivers. All they know is what is right in front of them – recent bad reviews. If there are four online reviews and two are negative, all the potential customer sees is that 50 percent of those customers are unhappy. When a system is in place to help earn positive reviews on a regular basis and negative reviews comes in, it will cost sales if that review is front and center on Google or the dealership webpage until there are more positive reviews to offset the impact. No reviews at all is not a good thing. It’s dangerous. When one negative review pops up, potential customers will see that the business has 100 percent negative reviews. Online reviews and the little orange stars that go with them are the only way to stand out on local search results pages when someone searches for a dealer in a certain area. You should stand out for the right reasons! KENNY ATCHESON is the founder of Dealer Profit Pros and author of Marketing Battleground: How to Deploy Under-theRadar Strategies to Explode Your Profits. To learn more, visit www.DealerProfitPros.com.
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ASSOCIATION NEWS
NIADA CONVENTION AND EXPO 2017 71st Annual Event Draws Another Record Turnout
The voyage to success is not always smooth sailing. In fact, it is often anything but. But for the record number of independent used vehicle dealers who attended the 2017 NIADA Convention and Expo, the course to that ultimate destination of success might be just a bit less stormy. The theme of the association’s 71st annual Convention was “Chart Your Course,” and an education agenda featuring more sessions on more topics than ever before provided tools and ideas designed to allow dealers to do just that – chart a course to their unique definition of success for their dealership. Not to mention a sold-out Expo Hall filled with products and services aimed at enhancing all areas of dealership operations. “An awesome investment in my business,” Larry Schmidt of Countryside Auto and Cycle in Fond du Lac, Wis., called the Convention. “Four days of industry-specific training along with trade vendors to improve my business – that’s an investment every dealer should be making.” As it turns out, more dealers are making that investment. The 2017 Convention drew more attendees than any other NIADA Convention in history, breaking the record set by the 2016 event. In fact, overall attendance was up for the fifth consecutive year, and the number of dealers was also up from last year. And just as in 2016, nearly 20 percent of those attending the 2017 convention did so for the first time. In addition to the used vehicle industry’s strongest dealer training program, there was plenty more available for all those dealers. For example, keynote speaker Captain Richard Phillips, whose amazing story of survival in a dangerous encounter with Somali pirates in 2009 inspired the hit movie Captain Phillips, recounted his five-day ordeal and the lessons learned from it. Phillips stressed the importance of preparation and offered three takeaways that can apply in any difficult situation, telling the overflow crowd, “You are much stronger than you know. … Nothing is truly lost until you choose to give up. … And a dedicated and motivated professional team, working together, can overcome almost any obstacle or solve almost any problem.” Attendees also had a chance to celebrate, dance and loosen up at the Cigars and Martinis welcome reception in a lush, tropical setting at poolside, and at a pirate-themed After Party following the crowning of Texas’ Robert Blankenship as the 2017 National Quality Dealer of the Year. In addition to the NQD ceremony – webcast live as always on NIADA.TV – the previous night’s National Leadership Awards Banquet introduced new NIADA president David Andrews as well as honoring NIADA scholarship recipients and the winners of awards for the top performers within the association and the used vehicle industry. For 2018, the NIADA Convention and Expo will be moving away from Las Vegas for the first time since 2009 – it’s scheduled for June 18-21, 2018 at the Rosen Shingle Creek Resort in Orlando, Fla. Save the date and don’t miss your chance to be part of the used vehicle industry’s biggest event of the year!
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SAFETY WATCH
GM RECALLS SS VEHICLES Corrosion May Affect Power Steering
General Motors LLC is recalling 6,204 2014-2016 Chevrolet SS vehicles. Corrosion of the connector between the electric power steering module and the torque sensor connector may cause a loss of electric power steering assist. GM will notify owners, and dealers will inspect the steering gear assembly, replacing it as necessary, free of charge. The manufacturer has not yet provided a notification schedule. GM’s number for this recall is 17248.
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BHPH MATTERS BY SCOTT BATES
ADD STRUCTURE & SCALABILITY TO YOUR BHPH DEALERSHIP Key Advantages
There are three key advantages for Buy HerePay Here auto dealers to establish a strong partnership with their CPA firm: maintaining compliance on bank financing, filing an accurate and clean tax return, and operating at a profit. When these three advantages are realized, the dealership is set up properly to sustain cash flow and avoid costly penalties by state or federal agencies like the IRS. In this article, we explore common accounting mistakes made in BHPH dealerships in the areas of discounting, reporting, remitting sales tax and customer service – and how to add more structure to efficiently scale up your operation. Used cars are in high demand – and not just by people with no credit or bad credit. Debt-averse consumers of all stripes are shopping a wide variety of used inventory online or with their favorite dealer. Subprime lenders also view used cars as a hot commodity again, and have become competition for Buy Here-Pay Here dealers and their related
finance corporations. As the industry saying goes, “Now is the best time…” for BHPH dealers to make sure their systems and records are efficient and clean to compete in this competitive landscape. There are three distinct advantages to operating a clean and efficient BHPH dealership. Dealers can more easily document and satisfy bank financing terms during an audit. They can plan ahead and file an accurate tax return and remit accurate sales tax. They can also attract and keep more customers in vehicles for a longer period of time. In our experience, problems with accounting, collections or sales tax remittance often don’t come to light until an audit or tax return preparation. That timing may lead to a costlier process to fix problems, including potential penalties by the IRS, state department of revenue or even the Consumer Financial Protection Bureau. For a few hours a month – and the right knowledge about which data to record and which reports to review – your dealership can be efficient, competitive and scalable. SCOTT BATES, CPA, is a partner in the audit practice Cornwell Jackson. Contact Scott at scott.bates@cornwelljackson.com or 972-202-8000.
August 2017 / CAR LINES
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SALES MATTERS BY JOHN CHAPIN
THE BIGGEST MISTAKES SALESPEOPLE MAKE Avoid These Common Mistakes
Mistake: Thinking that servicing accounts is more important than selling new ones. I once had a client show me a stack of folders and say, “This is why I can’t be out calling on new clients.” When I asked what had to be done, she picked up the first folder and said, “I’m waiting for a number from the State of Rhode Island on this one.” I responded, “Really? A salesperson is sitting in the office waiting for a number from the State of Rhode Island? No one else can handle that?” That is akin to a pilot saying they don’t have time to fly the plane because they are serving passengers drinks. I’ve heard every excuse for servicing accounts from “they’ll only deal with me” to “I want to make sure it’s done right.” These are simply excuses to avoid the hard work of going out and making calls. Salespeople are hunters, service people are gatherers. Outside of renewals, scheduled service calls, and emergencies, clients should be dealing with CSRs and other support people. Not only are the support people more readily available than the salesperson, who should be out chasing new business, they also handle the dayto-day service items more efficiently and effectively than a salesperson. As a salesperson your job is to sell, not service. If you are hiding behind the excuse your clients will only deal with you, that’s because you’ve trained them to do that. It’s time for retraining. If you think you are the only one who can do it, you’re wrong, so get over yourself. Any time you are servicing, outside of renewals, scheduled calls, and major issues, you are doing yourself, your company, your client, and your future clients a disservice. It’s a lose/lose situation. Go sell and stop hiding behind service. Mistake: Majoring in minor things and finding other time wasters. I once had a sales manager say, “During the major snow storm last week, when people were confined to their houses, my top salesperson was calling people at home because he had a captive audience. My other salespeople were baking cookies and posting pictures on Facebook.” This, along with chatting with friends and colleagues, checking email more than four times a day, taking 10 coffee breaks and, in general, finding things to do other than calling on prospects and customers, are examples of time wasters. Spending two hours looking up prospect information
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before you call, servicing clients on routine items as in the mistake listed above, and spending time practicing your call 400 times before the call, are all examples of majoring in minor things. Your highest priority is to spend time with prospects and sometimes your top 20 percent of customers (again, renewals, scheduled calls, and emergencies). You should be talking to, or on your way to talk to, prospects and customers 80 percent of the time during prime calling hours. Mistake: Focusing on reactive versus proactive marketing. The fastest and best way to build business is by making phone calls and knocking on doors. It is the most effective and only one in which you have almost complete control. Going to a Chamber of Commerce event, BNI, or similar networking event, hoping to get a lead is reactive. In those situations you are relying on others, whose first priority is to get business for themselves, to give you business. Worse yet, hanging out on social media or sending blind, unsolicited emails in hopes of getting business is also reactive. Mistake: Not being prepared for and not practicing sales situations. If you are in leadership, I dare you to walk up to one of your salespeople who has been with you a while and ask, “What do you say when someone says…” and then give them a common objection such as “they’re not interested.” Nine times out of 10 the first verbal sound out of their mouth will be “Ahhhh.” It happens to me all the time. Just last week at an insurance sales meeting, I asked an agent who’s been there 17 years, “What do you say when someone says I can get my insurance cheaper down the street?” The response? You guessed it: “Ahhhh.” Game over. You have to be prepared for every sales situation you’re going to encounter and you have to practice ahead of time. Ideally practice with another human, but if not, by yourself. Each answer has to be scripted and committed to memory so you know it verbatim and can respond immediately in a real-life sales situation. Mistake: No goals, no plan, and no clue how much activity has been done, or needs to be done, to be successful. Whenever I begin working with someone one of the first questions I ask is, “How many calls did you make last week on brand new prospects?” As with the objection above, I am usually met with “Ahhhh.” Usually followed by a guess, such as, “Um, I think about four.” “You think four? Is that number too big to count?” The truth is: they didn’t keep track and it wasn’t four. It may have been two, or even zero.
YOU HAVE TO BE PREPARED FOR EVERY SALES SITUATION YOU’RE GOING TO ENCOUNTER AND YOU HAVE TO PRACTICE AHEAD OF TIME. To be successful, you have to have annual, monthly, and weekly goals, along with knowing the daily activity necessary to make those goals a reality. Then you have to make the calls. Mistake: Giving up too soon. Eighty-one percent of sales are made after the fourth contact. Roughly 20 percent of salespeople make it past the fourth contact. Mistake: Not doing the work necessary. Ninety-nine percent of the time a salesperson fails it’s due to a lack of activity: Not making enough calls to talk to enough people to make enough sales. The other 1 percent of the time, the salesperson got hit by a bus. Since activity is the primary reason for success or failure, I could have led off with it, but it’s so obvious you probably would have stopped reading. 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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ONLINE MARKETING BY DALE POLLAK
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INDUSTRY EXPERTISE FOCUSED ON HELPING ME EXPAND MY BUSINESS* OTTO HAHNE CITY OF CARS, INC. TROY, MI
Smart. Simple. Fast. Learn how Otto 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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A LONGER-TERM VIEW OF DIGITAL RETAILING FOR DEALERS Don’t be Short-Sighted Dealers often have an “all or nothing” view of digital retailing. That is, to them, digital retailing represents the full monty of selling a vehicle online. You’d have a “buy it now” button on every vehicle details page for every vehicle, customers would work their deals, and dealers would deliver sold cars to customers at their homes. These dealers also often dismiss this concept of digital retailing as unrealistic – as something too few customers are willing to do today. In turn, dealers make a critical mistake: They put the whole idea of digital retailing on the shelf until the time comes when they’re fully convinced more customers would actually “buy it now” for their next vehicle. This viewpoint isn’t necessarily wrong. In fact, these dealers are absolutely correct that a majority of vehicle buyers today wouldn’t want to buy their next vehicle completely online. Studies show that maybe 10 to 15 out of every 100 people might be ready for this kind of vehicle purchase experience. It does seem a bit ill-advised to invest in an end-to-end digital retailing experience when the vast majority of buyers wouldn’t use it. But here’s the big miss for dealers who shelve digital retailing on these grounds: The “all or nothing” view is a bit short-sighted. It undercuts your ability to serve the remaining 85 percent to 90 percent of customers who are, in fact, receptive right now to taking part in at least a piece or two of a digital retailing experience. These are customers who want more convenience and a greater sense of control as they purchase a vehicle. They don’t want to spend hours in a dealership to complete a purchase transaction. They might even pay more for the privilege of completing some part of a deal – such as negotiating a payment, purchase price or trade-in value – from the comfort of their own homes. “I’m getting an additional eight to 10 deals a month because I offer the option of working out deal terms online,” said the general manager of a Southeast Volkswagen store. “We do things differently than other dealers and we’re getting better at telling
the world about it.” I hear similar stories from other dealers. Even if they aren’t adding a “buy it now” option to their website, they are fostering a different type of engagement that speaks to the needs of today’s increasingly me-focused and time-addled buyers. In other words, they’re working deals while “all or nothing” dealers aren’t getting any of the action. The general manager for a Midwest Lexus store noted his dealership continues to see a growing number of customers take advantage of his digital retail offerings. He added every one of the customers who negotiates a payment or trade-in value online still wants to “come in and take delivery in person.”
THE TAKEAWAY HERE FOR DEALERS IS THAT DIGITAL RETAILING SHOULDN’T BE VIEWED AS AN “ALL OR NOTHING” PROPOSITION. RATHER, IT’S MORE OF A “HAVE IT YOUR WAY” APPROACH, WHEREIN DEALERS PROVIDE THE DIGITAL RETAILING TOOLS, AND CUSTOMERS USE AS MUCH, OR AS LITTLE, OF THEM AS THEY PREFER. Such is the nature of digital retailing today. The vast majority of vehicle buyers aren’t really looking for a “buy it now”based, end-to-end digital car deal. They simply want to carve out the parts of buying a car they perceive as potentially problematic and time-consuming, and complete them in a way that’s more convenient and easier for them. The takeaway here for dealers is that digital retailing shouldn’t be viewed as an “all or nothing” proposition. Rather, it’s more of a “have it your way” approach, wherein dealers provide the digital retailing tools, and customers use as much, or as little, of them as they prefer. I understand how and why some dealers have landed on an “all or nothing” view of digital retailing. I would simply encourage them to consider the business they’re probably missing as they hold out for a complete, end-to-end digital retailing solution the majority of buyers may never want, and might never arrive. DALE POLLAK is founder of vAuto and has published several books on his Velocity Method of Management.
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INDUSTRY NEWS
AUCTION NEWS
GROUP HONORS TFS FOR COMMUNITY CONTRIBUTIONS Third Year to be Recognized
FISERV NAMES MANHEIM LOUISVILLE TOP AUCTION Indiana Auction Honored
BY USED CAR NEWS
Toyota Financial Services has been named one of the most community-minded companies in the nation by Points of Light Foundation. This is the third consecutive year TFS earned a spot on the nonprofit’s Civic 50 list, the latest recognition the company has received for its initiatives and its dedication to supporting and empowering communities. The Civic 50 sets the standard for corporate community engagement nationwide, and creates a roadmap for companies seeking to best use their time, talent, and resources to improve the quality of life in the communities where they do business. Winners are selected based on four dimensions of their national community engagement programs: integration, investment, impact, and institutionalization. TFS earned this recognition through its unwavering commitment to youth development and successful initiatives such as the Making Life Easier Financial Empowerment program, the Road to Success program (partnering with Scholarship America to fully fund college scholarships to underserved students, based on financial need and community), strong partnerships with Girl Scouts and Boys & Girls Clubs, and its Community Ambassador program, which promotes employee engagement within the community.
Fiserv Inc. named Manheim Louisville of Clarksville, Ind., the top performing automobile auction of 2016. Manheim Louisville was a strong performer throughout the year, both in terms of sales effectiveness and operations. Fiserv, which has been ranking auctions since 2001 to identify qualified partners, managed the remarketing of more than 85,000 vehicles in 2016. The top three auctions are scored on overall sales effectiveness, operational excellence, sales preparation and marketing in the calendar year. Carolina Auto Auction, of Anderson, S.C. – winner of the National Quality Award for the past three consecutive years – ranked second. ADESA Birmingham was ranked third overall for 2016. Fiserv also recognized auctions for excellence in the following areas: • Carolina Auto Auction – Operational Excellence • Manheim Louisville – Customer Service • Rawls Auto Auction, based in Leesville, S.C. – Sale Preparation • Manheim Louisville – Marketing To be eligible for the Top Performance designation, an auction must be a member of the National Auto Auction Association, have sold vehicles with Fiserv for 12 months or more, have a minimum of eight represented sale audits in the calendar year, and have sold more than 500 vehicles in the calendar year.
PRODUCTS AND SERVICES
BY NICK ZULOVICH, SUBPRIME AUTO FINANCE NEWS
EFG COMPANIES ROLLS OUT VIRTUAL F&I SOLUTION Simplicity Finance and Insurance
EFG Companies recognized independent stores that turn about 50 vehicles monthly need the same F&I resources as franchised stores that watch two, three or four times that many units roll over the curb each month. It’s why the company announced the launch of its virtual F&I model, Simplicity Finance and Insurance. With Simplicity Finance and Insurance, EFG Companies said dealers can expect to generate upwards of $1,000 per retailed unit, get more paper bought, increase product penetration, and make F&I compliance a non-issue. Mark Rappaport, president of EFG’s Simplicity Division, acknowledged many independents struggle to generate F&I profit with inventory that does not meet finance company requirements, limited financing options, little investment in F&I training in a high-turnover industry, and inconsistent dayto-day staffing.
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“As you know, the employees and teams at the independent dealerships have to wear a number of hats. Wearing all of those hats sometimes doesn’t make you the most effective in all the facets tied to running an automotive dealership,” Rappaport said. “Often we found, on the independent side, it’s the salespeople handling the F&I business and often the salespeople are really good at sales but don’t have the time, ability or expertise and background to be able to support the F&I process, where a franchised dealership would have the significant bench strength to be able to do that. “At the independent level, when you’re doing 25, 50, 75 units a month, it becomes a little more difficult to support that from a resource standpoint and get the bench depth to make it in a profitable and functional manner. We decided there was an opportunity here to help support our dealers at the independent level to provide them with a service that offers them access to the bench strength on retail operational hours basis and gives them the ability to be sure we’re doing everything compliant and we’re doing it in the most effective format to add more profit to their back end.” EFG Companies has developed a way to leapfrog over these issues without adding a single F&I person to staff. Simplicity Finance and Insurance can give dealers instant F&I expertise and improves the customer
experience, while increasing F&I profits. This virtual F&I model enables dealers to focus on the front-end process, while a team of expert F&I personnel take care of the finance process from EFG’s headquarters, streaming live into the dealership. EFG’s professionals handle the financing, deal structure, product sales, contracting and funding to drive back-end profit on each vehicle sale. Rappaport explained all the independent dealer needs is a private room with high-speed dedicated Internet access to get started. An EFG representative will come to the store, set up the equipment and provide multiple days of training. Within a short timeframe, the store can be finalizing deliveries with Simplicity Finance and Insurance. According to Autotrader, the average time spent in the F&I process is 61 minutes. However, the average consumer wants that time cut in half. With Simplicity Finance and Insurance, the F&I process takes just over 30 minutes. EFG Companies president and chief executive officer John Pappanastos said, “We developed Simplicity Finance and Insurance to enable these dealers to evolve the F&I process from a basic transaction to a highly lucrative profit center that enhances the consumer experience.” To learn more about Simplicity Finance and Insurance, visit www.efgcompanies.com.
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SAVE-THE-DATE
30TH ANNIVERSARY GOLF TOURNAMENTAWARDS DAY-TRADE SHOW Sunday, August 27, 2017 Ironwood Golf Club 10955 Fall Road Fishers, IN Registration Fees: $ 95 per person
Breakfast and Registration 9:00 a.m. Dinner after golf included Team Awards to 1st, 2nd and 3rd, Longest Drive, Closest to the Pin, Longest Putt Golf Chairmen: Fritz Kreutzinger, David Baldwin, Joe Inabnitt Please register early to reserve your place!!!
Participants Names:
Please send entry fee to:
1.__________________________________________ Company____________________________________
Indiana Independent Auto Dealers Association P. O. Box 1393 Crown Point, IN 46308
2.__________________________________________
Fax Registration (CREDIT CARD ONLY) to 219.663.5294.
Company____________________________________ 3.__________________________________________
_______Visa _______MasterCard
Company____________________________________
Card No.________________________________________
4.__________________________________________
Expiration Date___________________________________
Company_____________________________________
Name on Card (please print)__________________________
# of golfers_____________________ @ $ 95 = ______
Address of Cardholder
TotalEnclosed_________________________________
City___________________________________________
___Check or money order included
State______________________ Zip Code______________ Phone__________________________________________ Card Holder’s Signature______________________________
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GOLF OUTING SPONSORSHIP OPPORTUNITIES 30th Anniversary Golf TournamentAwards Day-Trade Show Excellent sponsorship opportunities are available for our 30th Anniversary Golf Tournament-Awards DayTrade Show, August 27, at Ironwood Golf Club in Fishers. Market your company and support the Indiana Independent Automobile Dealers Association. All sponsors will be recognized at the tournament, on our website (iiada.com), and in our Car Lines publication.
YES! We want to be a sponsor for the IIADA 30th Anniversary Golf Tournament-Awards DayTrade Show.
Please indicate the sponsorship of choice. ___Platinum $3,000 ___Diamond $2,000 ___Gold $1,500
Platinum - $3,000 Includes: Sponsorship of dinner. Registration for foursome.
___Silver $700
Diamond - $2,000 Includes: Sponsorship of breakfast outing. Registration for foursome.
________________Total
Gold - $1,500 Includes: Sponsorship of a beverage cart. Registration for two. Silver - $700 Includes: Sponsorship of Closest to the Pin, Longest Putt or Longest Drive. Bronze - $400 Includes: Sponsorship of golf hole.
For more information, please call the IIADA office at 219.661.0287.
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___Bronze $400
Payment by ___Check _____Visa ______MasterCard Credit Card Number_______________________________ Expiration Date __________________________________ Contact Name:___________________________________ Organizational Name:_______________________________ City___________________________________________ State______________________ Zip Code______________ Phone _____________________Signature______________ Please mail or fax to: IIADA P. O. Box 1393 Crown Point, IN 46308 Phone: 219.661.0287 Fax: 219.663.5294
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MEMBER BENEFITS
P
JOIN TODAY
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
Publications
• 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
Professional Development
• 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
P
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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August 2017 / CAR LINES
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ASSOCIATE MEMBERS
IIADA Associate Membership is available to automotive related businesses. Please call 219-661-0287 for more information on Associate Memberships. 700 Credit
Ann Carson 202.422.2351 aclarkA@700credit.com www.700credit.com
Affordable Computer Systems Greg Goresen 800.488.9992 acsi@digicove.com www.acsds.com
AFC
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
Ryan Lewis 2950 E. Main St. Plainfield, IN 46168 317-453-1172 ryan.lewis@autofinance.com
Diversified Vehicle Services
Alpha Omega Group
Bruce Norton 1512 W. 96th Ave., Ste. C Crown Point, IN 46307 Phone: 219.670.0542 Email: Bnorton@drive1usa.com
Brad LeBlanc 513.317.9861 brad@aogllc.com
Ashton Agency Inc.
Dealer Insurance, Bonds Kathy Alexander 407.678.5900 kalexander@ashtonagency.com
Auto Services Co. Inc. 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
CAR Financial
P. O. Box 20229 Knoxville, TN 37940 865.573.3355
Cars.com
175 W. Jackson Blvd., 8th Fl. Chicago, IL 60604 800-298-1460 dealers.cars.com
Consolidated Automotive Services 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
DealerRater
Amy Rosenfield 800.266.9455 amy@dealerrater.com
Glenna Deviers 317.862.9100 www.diversifiedvehicleservices.com
Drive1 USA, Inc.
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
GoldStar GPS
guided by SPIREON Cesar Yepez 949.697.3459 cyepez@spireon.com
GWC Warranty
Carmie Fruits - Indiana Dealer Consultant 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
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CAR LINES August 2017
Heritage Acceptance Corporation Curt Holmes cholmes@hfgnet.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
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
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
SPIREON
Keystone Insurers Group
Lori Simpson 570.473.2146 lsimpson@keystoneinsgrp.com
Certified Public Accountants Barnett Sapurstein, CPA 317.598.6700 bsapurstein@teipencpa.com
Lincolnway Insurance Services
Turner Acceptance
Greg St. Germain 336 E. Lincoln Hwy. Schererville, IN 46375 219-865-2227 gregg@lincolnwayinsurance.com
Mighty Auto Parts of Central Indiana
David McCabe 317.685.8650 mightyautopartsindy@gmail.com
National Auto Auction Association Frank Hackett 301.696.0400 naaa@naaa.com
Dave Boekholder 800.557.1449 dboekholder@spireon.com
Teipen, Selanders, Poynter & Ayres, P.C.
Jonathon Turner 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
NextGear Capital
Lori Kahre 1320 City Center Drive Suite 100 Carmel, IN 46033 Phone: 317.571.3845 www.nextgearcapital.com
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
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