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N E B R A S K A I N D E P E N D E N T A U 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

MOBILE COMMERCE TAKES CENTER STAGE ALSO From a Bill to a Law in Nebraska PLUS Application For Title

DALLAS, TEXAS Permit No. 2079

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PRSRT Standard U.S. Postage

V isit us at w w w.neiada.com

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We’ve Got Your Back. In your search for a quality F&I relationship, make sure you look before you leap. Our name says it all - Protective. We are there when your customers and your dealership need us most - from innovative F&I solutions to professional claims handling. Give us a call or visit us online.

We’ll jump at the opportunity.

We Listen • We Care • We Have Solutions Vehicle Service Contracts I GAP Coverage I Credit Insurance Lifetime Engine Warranty I Limited Warranty I Dealer Participation Programs F&I Training I Advanced F&I Technology To find out how we can enhance your dealer profits and customer satisfaction contact Protective’s Nebraska representative Mark Wheeler today!

866.927.2914

www.protectiveassetprotection.com

Lifetime Engine Warranty, Limited Warranty, Vehicle Service Contracts (VSCs) and GAP are backed by Lyndon Property Insurance Company in all states except NY. In NY, VSCs are backed by Old Republic Insurance Company. GAP, Lifetime Engine Warranty and Limited Warranty are not available in NY. Credit Insurance is backed by Protective Life Insurance Company in all states except NY, where it is backed by Protective Life and Annuity Insurance Company.

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BOARD OF DIRECTORS

Manheim, the world’s largest provider of vehicle remarketing services, cares about its employees, the environment and the communities it serves. From fundraising drives and tutoring kids after school to supporting long-term conservation efforts, Manheim and its employees are dedicated to giving back to their communities and know independent vehicle dealerships across the country share in this commitment. For the first time this year, Manheim is recognizing and honoring those dealerships by awarding the 2011 National Manheim Community Service Award at the 65th NIADA Annual Convention and Expo. For more information, contact Georgia Brown, NIADA director of education, at 817-640-3838 or download the nomination form at niada.com (click on the Manheim Dealers Edge link under the Services tab).

ADVERTISERSINDEX AutoTrader.com...................................Back Cover Chase ..............................................................9 Manheim.com...........................Inside Back Cover Manheim Omaha ..............................................7 Nebraska Auto Auction ........... Inside Front Cover NIADA.TV ......................................................13 Smart Auction ................................................... 5 Western General / Protective .............................3

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV NIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR TROY@NIADA.COM.

NEIADA

Joel Kershner Kershner’s Auto Korner 220 W. South St. Hastings, NE 68901 402-461-3161 www.kershnerautokorner.com

Vice President

Arlan Kuehn Kuehn Auto Sales, Inc. 495 Old Hwy. 20 South Sioux City, NE 68776 402-494-2677 www.kuehnauto.com

Secretary-Treasurer

Dale Cotner Dales Trucks 625 S. Lincoln Ave. York, NE 68467 402-362-5933 www.dalestrucks.com

Brad Quackenbush Q Family Auto 540 S. E St. Broken Bow, NE 68822 308-872-2227 www.qfamilyauto.com

Dennis DeNovellis Sidney Auto Sales 1229 Illinois Ave. Sidney, NE 69162 308-254-3921 Al Young Young Motor Co. 6110 2nd Ave. W. Kearney, NE 68847 308-238-0515

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Don Deepe 81 Automotive 1380 River Road Hebron, NE 68370 402-768-6918

Andy Chase ABC Auto 3801 N. 70th St. Lincoln, NE 68507 402-466-1613

402-358-5252

NIADA/Manheim Community Service Award

12 Science Of Used Auto Inventory

10 Mobile Commerce Takes Center Stage

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7 A Message From The Rogers

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Les Bockmann Bockmann Auto Sales Chuck Rogers Chuck Rogers Auto Sales P.O. Box 93 St. Paul, NE 68873 P.O. Box 11 308-754-5645 Tekamah, NE 68061 402-374-2400 Dean Cerny Columbus Auto Mart President Elect 2817 13th St. Doug Borgman Columbus, NE 68601 Creighton Auto Sales 402-564-4952 P.O. Box 365 www.columbusautomart.com Creighton, NE 68729

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Jody Smith Jody’s Auto Sales 4 S. Jeffers North Platte, NE 69101 308-534-3729 jodysautosales.com Jan Merritt, Executive Director 5701 Russell Dr. P.O. Box 29107 Lincoln, NE 68529 800-659-5453 402-464-2089 402-464-8878 (fax) niada2289@windstream.net or neiada@msn.com www.neiada.com Gary J. Merritt, assistant executive director

JUST A NOTE Application for Title

The Nebraska DMV has changed the title applications for the second time in the past year. The latest change has a place available for Transfer On Death Beneficiary. If you are not using the new applications, you can call our office to order them.

Major Change in Motor Carrier Enforcement The Nebraska State Patrol Carrier Enforcement Division held town hall meetings throughout the state in February. Implemented by the Federal Motor Carrier Safety Administration (FMCSA) in December 2010, the Compliance, Safety, Accountability (CSA 2010) program will increase the monitoring of motor carrier on-the-road performance, and implement new penalties for unsafe driving behaviors. Dealers need to be aware they may fall under the requirements in one of the following groups that must abide by motor carrier requirements: • A pick-up pulling a trailer (more than 10,000 lbs combined weight or gross combination of weight rating). • A pick-up or truck weighing more than 10,000 lbs. • A pick-up, trailer, truck or semi requiring a class A, B, or C Commercial Driver’s License.

NEBRASKA DEALER UPDATES IS PUBLISHED 6 TIMES PER YEAR BY THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORATION, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203; PHONE 817-640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT ADDITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 BROWN BLVD., ARLINGTON, TX 6006-5203. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF NEBRASKA DEALER UPDATES OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEMBERS OF NIADA , DOES NOT CONSTITUTE AN ENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT © 2011 BY NIADA SERVICES, INC.

• Any motor vehicle transporting hazardous materials in a quantity that requires placards.

STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITOR Mike Harbour • mharbour@niada.com PRODUCTION MGR. Jacob Kerns • jacob@niada.com ART/PRODUCTION MGR. Christy Haynes • christy@niada.com PRINTING Nieman Printing

Since this newsletter came out after the town hall meetings, if you feel you need to verify you’re in compliance, contact the Nebraska State Patrol Motor Carrier Enforcement Division for more information at 402-471-0105.

• Any farm truck displaying farm plates and regis tered for more than 16 tons. • Any passenger-carrying vehicle designed or used to transport eight or more passengers, including the driver, for compensation. • Any passenger-carrying vehicle designed or used to transport 15 passengers, including the driver, and not used to transport passengers for compensation.

DEALER

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in memoriam Don Matzner

Helen Behrens

Donald L. Matzner, 73, of York, Neb., died Saturday, Dec. 11, in Lincoln. Don owned York Motors for more than 45 years. The dealership was a longtime member of the Nebraska IADA. Don and Peggy were regulars at the association’s conventions. Don was born March 12, 1937, at Gresham, Neb., to Gerald and Hazel (Schultz) Matzner. He graduated from Gresham High School in 1954 and on March 24, 1957, he married Peggy J. Dearing. Besides owning York Motors, Don also farmed south of Gresham. He enjoyed collecting cars, traveling with Peggy and was a member of the First United Methodist Church in York as well as a former Cub Scout leader with Pack 172. He is survived by wife Peggy, of York, son Jim and his wife Kathy Matzner, of McCool Jct, Neb., and three daughters, Janet Matzner, of Gresham, Julie and her husband Chad Hoffman, and Jean Anne Matzner, all of York. Also surviving are six grandchildren, several cousins and a host of friends. He was preceded in death by his parents, his son Jerry, daughter JoAnn Matzner and his grandson Peyton Hoffman.

Helen (Marcotte) Behrens, 96, died Sunday, Oct. 31, at Lancaster Manor in Lincoln. She was born in 1913 in Greenwood, Neb., to Roscoe and Fannie (Young) Nichols. Helen married Charles Marcotte in 1936 and they resided in Lincoln. Charles died in 1956. Helen was Executive Director Jan Merritt’s mother. Helen enjoyed time with her family, going on family vacations with her son and she could be seen at many national conventions and business meetings with Jan. Up until the last few years, it would not be unusual to see her hanging out in the office and would quickly start up a conversation with dealers who came in the office. She was an avid Husker fan and no matter the game, she loved Nebraska sports. Helen is survived by daughter Jan Merritt, grandson Gary Merritt and fiancée Kate Colborn, granddaughter JoDell Merritt, grandsons Steve Marcotte and wife Cheryl, Grady Marcotte, great-grandson Ross James Merritt, great-granddaughter, Samantha Marcotte, great-great-granddaughter Preslee Ann Merritt, and nieces Emily Meier, Sharon Sharp, Susan Marlowe and nephew David Nichols She was preceded in death by her parents, husband Charles Marcotte, son Larry Marcotte, sisters Ann Ford, Thelma Dillon, Ola Carpenter and brother Jack Nichols.

Going Mobile in Your Dealership One of the new keys to the success of your business is your smart phone. You can

operate your dealership on-the-go, making fast, informed decisions that will ultimately improve your bottom line. More than 440,000 mobile sites and over 500,000 mobile apps exist today, including a growing number of auto-industry related apps. It may seem daunting to integrate this emerging technology into your business, but these tools are a must-have for both acquisition and retail. What are ‘mobile apps’ and how do they help dealers? An app is a software application that helps people accomplish tasks faster. Among other things, an app can use the hard drive of the mobile device to store data for faster recall and operation, perform calculations, access hardware features such as camera and GPS – and all without an Internet connection. At its core, the Internet revolution was about how technology harnessed the power of information to generate efficiencies, and this is exactly the opportunity mobile apps offer to dealerships today – providing information onthe-go and tying it all together to take action. How can mobile apps streamline your business?

Mobile browser-based tools provide dealerships with more on-the-go visibility but lack a built-in ability to act in real-time on information organically across the dealership. But, just as a mobile app enables on-the-go stock trading, for example, an app such as eCarList’s ‘True Target Mobile’ allows dealerships to take a massive dataset and a complex, multi-step, -vendor and -personnel process and make it all work from a single handheld device. The ‘True Target Mobile’ app gives dealerships mobile access to pricing data from multiple books, current data from top online marketplaces and the ability to filter, organize and view the data geographically for territory (including vehicle pricing from competitive dealerships). Other functions include VIN scans, taking/adding/removing photos, integrating Carfax Vehicle History Reports and sharing appraisals and pricing with other mobile devices. Are there other benefits to going mobile? On the acquisition side, smart phones provide access to information you need to stock your lot with cars that customers want. It’s no secret that the used car supply is decreasing due to rising demand, so the competition for quality units is getting tighter.

Think about the top concerns your customers have when shopping for a used car: previous damage, maintenance, ownership history, and of course, price. Tools like Carfax Vehicle History Reports are readily-available through various mobile devices to verify this important information and bid with confidence. Having your mobile device handy helps you tie it all together quickly and successfully acquire the right cars for your lot. Today’s mobile devices provide access to information that brings transparency and process effi ciency to dealers. The possibilities mobile is opening up for our industry are truly extraordinary – and in the current economic climate, leveraging new and user-friendly technology is key to moving more cars and saving money in the process. BY LEN CRITCHER AND LANCE VICKERY Len Critcher is CEO of eCarList, provider of award-winning inventory management and online marketing solutions that make it easy for dealerships to fully own and control the vehicle merchandising process through one unified platform. Lance Vickery is director of dealer business at Carfax and has spent more than 25 years in the auto industry.

DEALER

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A MESSAGE FROM THE ROGERS We’d also like to thank the vendors and sponsors of this year’s events. Without them, this convention could not have been possible. Linda and I would like to thank you for attending this year’s convention. This is the first year it was held in Columbus. We hope you found it enjoyable and learned some things about the laws and trends in the industry today. We’d also like to thank the vendors and sponsors of this year’s events. Without them, this convention could not have been possible. We’ll have the list of vendors and sponsors with contact information in the next newsletter. Be sure to thank the sponsors for their support and check out the list of vendors to see if any of them have products that can be incorporated into your dealership. The Auxiliary would like to invite all members to join and support it. This important part of our association provides activities for the children at the convention, does decorating and provide both a silent and live auction Saturday evening. The proceeds from the auction are used to give scholarships to students so they may further their education. Thanks to all the dealers, sponsors and vendors for providing items for the auction. Linda and I also would like to thank you for making it possible for us to attend the annual NIADA convention last year in Las Vegas. It was a fun and educational week. We are also glad Arlan Keuhn was elected to the national board at this convention. It is nice to have our state represented on the national level. We would also like to thank Jan and Gary for all they do. Attending the national convention allows you to realize how lucky we are to have such talented and honest people directing our association. Some states are not so lucky. Thanks, Jan and Gary. We hope you had an enjoyable and informative weekend. Thanks again for attending. Chuck Rogers 2010-2011 President Linda Rogers 2010-2011 Auxiliary President

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odd-numbered year is 90 days long and the second session in an even-numbered year is 60 days long. This session is scheduled to end June 8. The budget shortfall is on everybody’s mind and a great deal of time will be devoted to it. This year, there were nearly 700 bills introduced. Constitutional amendments and resolutions also were introduced. Legislative bills are introduced in the legislature and are given hearings in one of the standing committees. So what’s the difference? From the glossary of the Legislature, here are the definitions: Legislative Bill (LB) - a proposal to create, change or delete one or more laws. Constitutional Amendment Resolution (CA) - a proposal to amend the state constitution, ratify or reject an amendment to the U.S. Constitution or petition Congress about amending the U.S. Constitution. State CA resolutions have the suffix “CA” by the resolution number, and they must be approved by Nebraska voters as well as the Legislature. Legislative Resolution (LR) - a proposal to make a formal expression of opinion, intent or recognition; amend the state or federal constitution; or authorize a study of an issue during the interim. A lot of legislative resolutions are to give recognition to people and organizations. Some examples in this year’s session are Eagle Scout recipients or high school sports state championship teams and individuals that have received national recognition for their accomplishments. Constitutional amendment resolutions are a longer process, because not only does it go through the Legislature, but they also must be voted on by the residents of Nebraska. The one we will consider is the legislative bill (LB). We all look at some of the laws that are out there and wonder where they came from, how they were written and, of course, why they were written.

I will try to explain some of the procedures involved in the process. The bills are introduced by the senators. They can come from individuals, businesses, organizations or agencies. For the most part, bills are not introduced just for fun. They come from a situation that has arisen where somebody feels something needs to be addressed in the form of a new or changed law. Many bills are just a few pages long and are pretty straight forward. Others can be quite lengthy. Some are new laws, some are to repeal laws and some are to make changes to existing laws. First is the idea. Generally, someone brings up an idea of a problem he feels needs to be addressed. That person finds a senator to bend an ear and the process has begun. The senator and staff then research the idea to see what approach to take to remedy the problem. There is a research division in the Legislature to help senators during this stage. From here, it goes to a bill drafter who works with the senator to draft the idea into a legal form of a bill. In Nebraska, a bill can only have one subject. Bills are introduced in the first ten days of the session. The senator files it with the clerk of the Legislature, who then reads the title of the bill and assigns it a number. Copies are then printed and available to the public. Now it is much easier to access, as this information, the bills, the numbers and their text, is online. Many also have a statement of intent, which breaks down a bill to simple layman terms. Bills also have a fiscal note. This is prepared by the Legislative Fiscal Office and it presents the financial impact, if any, on state or local governments. After a bill is introduced, it is assigned a committee to hear the bill. Hearings are scheduled and testimony is heard from the public at these hearings. If you cannot attend a hearing you want to testify at, you can send your testimony to the committee to be added to part of the record (I do not know if all committees do this, but I know the transportation committee does). After the hearing, the committee then votes to send the bill to General File (with or without amendments), indefinitely

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On Jan. 5, the first session of the 102nd Legislature began. As you probably know, each legislature has two sessions. The first session in an

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postpone it or take no action. When the bill enters General File, it’s heard for the first time by the full Legislature. If approved, it goes to Select File, which is the second reading. After that, it goes to the final reading. If approved at point, the bill proceeds to the governor’s desk to be signed or vetoed. Many times, we have had bills advanced out of committee and are attached to a larger bill to make its way through the full Legislature. Even after a bill is made into law, its effect can take place on a set time as spelled out in the bill; either immediately after the governor signs it (called an emergency clause) or three months after the end of the session. As you can see, this is a lengthy process. Even so, it is very important because you can have a lot of impact on legislation out there. The senators do listen to their constituents. I have seen bills introduced by a senator because of a constituent who then got an earful from opponents and ended up not supporting it or vice versa. As always, you need to give the senators your respect. You may bitterly disagree on some issues, but on others, they may be your biggest supporters. A senator may introduce a bill, hearing only one side and may need some education as to the impact a bill may have. Get to know your representatives and educate them in your business, whether it is on the local, county, state or federal level. As the old saying goes, the squeaky wheel gets the grease. The members of the Transportation and Telecommunications Committee are: Sen. Deb Fischer, Chairperson Sen. Kathy Campbell Sen. Annette Dubas Sen. Galen Hadley Sen. Charlie Janssen Sen. Scott Lautenbaugh Sen. LeRoy Louden Sen. Scott Price

DEALER

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NEW

RENEWING MEMBERS

RENEWING MEMBERS Winner’ Circle Auto Center Lincoln (2001) Drewel’s Used Cars & Trucks Lincoln (2001) Auto Country Western (2009) American Auto Sales Bellevue (1992) Cyclone Automotive Training, Inc Indianola, IA (2002) Jerry’s Auto Sales Omaha (1995) American Recovery Assn. Irving, TX (2006)

Paris Fisher Auto Sales Chadron (2003) Cordel Foreign Motors, Inc. Omaha (2004) World Auto Sales Nebraska City (2008) Car Max Omaha (2006) Wilber Autoworks Wilber (2004) NEW MEMBER Brooks Ford Inc. 211 Ogden Ave. Oxford, NE 68967 308-824-3296 Dennis Brooks Magic Motors Auto 3301 S. 10th Lincoln, NE 68502 402-421-3875 Earl Atteberry

Manheim’s Nicole Graham-Ponce Gets Promotion Nicole Graham-Ponce, formerly Assistant General Manager at Manheim Omaha, was recently promoted to Market General Sales Manager for Manheim Omaha, Manheim Kansas City, Manheim St. Louis and Manheim Missouri. Graham-Ponce started her Manheim career in Omaha as a Dealer sales representative after running a dealership business with her father until he passed away in 1998. She was quickly promoted to dealer Sales Manager and began overseeing dealer sales as well as front office operations and credit/collections. By 2000, Graham-Ponce became General Sales Manager, where she added factory, fleet/lease and MAFS to her responsibilities. In 2004, she accepted the Assistant General Manager position and has been involved in every aspect of the auction from sales, administration, operations, and reconditioning. Nicole has literally sat in almost every chair at Manheim Omaha the past 13 years. We remember Nicole before she started at Manheim Omaha as she worked for her father for six years in a dealership in Lincoln. She has been a great friend of the association and we wish her the best of luck in her new position. As you travel from one auction to the next, we’re sure you’ll see her face more than once.

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M O B I L E C O M M E R C E takes center stage with consumers looking for vehicles, parts and accessories

This past holiday season, surveys and statistics showed what many analysts and industry observers were thinking: mobile commerce is growing by leaps and bounds, and every industry is in on the trend, including automotive.

In 2011, smartp hones are forecasted to account for half of the mobile phone market, according to The Nielsen Co. On top of that, an ABI Research report says mobile online shopping will generate $119 billion in sales by 2015, accounting for 8 percent of the e-commerce market. When car dealers make it easy for their business to be found through a mobile web browser, loyalty campaigns, marketing initiatives, text promotions and sales can attract and retain customers. What are consumers browsing with their smart phones? The same types of items they started browsing on computers: researching purchase decisions, cost comparisons and finding the location of physical items. Recently, eBay reported a substantial increase in mobile traffic, where sales more than tripled in 2010 to near $2 billion in gross merchandise volume. Last year, vehicle purchases led all categories on eBay mobile applications in terms of GMV, while parts and accessories were number two in terms of the total number of items purchased. Dealers know when they have a physical lot, customers still come to kick the tires when the sales office is closed. Now, today’s consumer might still come to the lot, but he or she will also pull out a smart phone, check the hours of the dealership and research the same make and model for competitive pricing. The same thing is happening even if the consumer doesn’t drive to a physical lot. A consumer may be in his garage working on

a car and need to find a part or accessory. Instead of going inside and turning on the computer, he’s browsing his smart phone to find the part, price and local availability. Just as e-commerce has completely changed the way we do business, wireless devices and smartphones are again altering what we know about consumers’ purchasing behaviors. Seeing similarities in mobile commerce and e-commerce, auto dealers ask themselves a familiar question: would anyone really buy a car from their smart phone? In 2010, more than $118 million in car and truck purchases were made via the eBay mobile application – more than 12,600 vehicles were sold. Parts were the second biggest category in mobile last year, with more than 911,722 parts purchased, and more than $60 million in sales. For independent dealers, mobile applications and mobile commerce are the must-have digital tools of 2011. With smart phones capable of surfing, downloading apps and connecting with coworkers and friends in an instant, researching and shopping for vehicles, parts and services is a natural extension. For example, a business traveler waiting at an airport may use that downtime to look for a needed part for his car or browse available vehicles for a new truck. If an independent dealer’s inventory is not readily available on a mobile app, chances are there’s an entire customer segment that may not see what’s for sale. A recent ForeSee Results survey found 30 percent of consumers used a mobile phone to research products on the Internet, compared with 11 percent in 2009. Those making a purchase through a mobile phone increased from 2 percent in 2009 to 11 percent in 2010. For example, Tilo Steurer, founder and owner of Eurocar, the West Coast’s largest

independent dealership of its kind, sells and buys vehicles and regularly uses eBay’s mobile app to buy cars, parts and accessories. “I purchase anywhere from five to 10 cars every month, most of the time through the eBay mobile app,” Steurer said. He also uses the eBay mobile app to keep track of his business while not in the office. With any form of sales – online, mobile or in-store – customers consider the credibility of the seller and business before making a purchase. Building that credibility takes consistent communication, which is made easier when dealers can keep in touch through mobile and online sources. “Communication is very important, especially when making an expensive online purchase such as a luxury car,” Steurer said. “With the eBay mobile app, I can respond more quickly to customer

FOR DEALERS, HAVING PARTS, ACCESSORIES AND VEHICLES AT A CONSUMER’S FINGERTIPS IS AN IDEAL WAY TO EXTEND MARKETING AND SALES WITHOUT A LOT OF DEVELOPMENT AND TECHNICAL EFFORT.

DEALER

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Independents Remain Profitable in Challenging Environment Our team at Manheim Consulting had the pleasure of interviewing NIADA President Anthony Underwood for a question and answer session discussing the state of the used vehicle market from the perspective of independent dealers as we compiled the recently released, 16th annual Used Car Market Report (UCMR).

questions, which builds credibility and increases the opportunity for a sale.” To accommodate this growing trend, eBay Motors is launching a mobile app that will provide a customizable buying experience optimized for vehicles, parts and accessories, as well as unique social and community features for the enthusiast. Features include VIN scanning and a virtual garage to give enthusiasts personalized information. After searching for a vehicle, users can share it with friends and social networks or ask the seller a question. Users can create “car cards” for their vehicles which display photos and stats about the vehicle and can be used in searches for parts and accessories. On the garage tab, consumers can input and store the vehicles they own or scan the VIN barcode with the iPhone’s camera to populate information. In the garage, car owners can create to-do list for vehicle projects, store custom parts searches and share the garage with their social network. For dealers, having parts, accessories and vehicles at a consumer’s fingertips is an ideal way to extend marketing and sales without a lot of development and technical effort. Mobile commerce is still in its infancy but is growing at a faster pace than e-commerce. With the Internet available wherever consumers are with their smart phones, it’s only a matter of time before mobile commerce becomes a dominant form of purchasing. Because of the similarities to e-commerce, consumers are quickly adopting m-commerce and expecting businesses to be on board.

Underwood framed the challenges facing independent dealers in a way that confirmed what our data was telling us: independents are encountering higher prices for inventory at the wholesale level and finding fewer pre-owned vehicles in the marketplace. In response, these dealers are focusing on sound inventory management practices, and using all available sales channels – including online – to source just the right inventory to meet their customers’ needs. We examined these and other trends in the UCMR, which is

BY TOM W E BB

Manheim’s annual analysis of the forces shaping the used auto industry. As part of the Manheim-NIADA Dealer’s Edge partnership, I’m happy to let you know you can download the entire report free of charge by taking a very brief survey at www.surveymonkey.com/s/manheim. As a comprehensive analysis of the trends shaping the automotive industry, the 2011 UCMR contains much more valuable information pertaining to independent dealers, as well as chapters on other aspects of the industry, including rental, leasing, fleets, repossessions and salvage. I encourage NIADA members to download their free copy of the UCMR, and as always, please e-mail me any time with your questions. Tom Webb is chief economist for Manheim Consulting. Contact him at Thomas.webb@manheim. com, follow him via Twitter at www.twitter.com/ TomWebb_Manheim and read his blog at www. manheimconsulting.typepad.com.

B Y C L AY T O N S TA N F I E L D, E B AY M O T O R S

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BY BI LL MO K RY

THE ART AND SCIENCE OF USED AUTO INVENTORY Building a profitable used auto inventory requires having the right information and the talent to know how to use it. Over the years, I’ve been blessed with tremendous mentors who have provided me with valuable insights, one of which is managing a used vehicle department is both a science and an art.

While there are no cookie-cutter solutions applicable to every scenario, there are tried and true blocking and tackling strategies that can help any department maximize results. When it comes to proper inventory mix, there are several ways a dealership

USED CAR MANAGERS SHOULD BE AWARE, AT THE VERY LEAST, OF THE TOP-SELLING VEHICLES IN THEIR MARKET BY MAKE, MODEL, AND YEAR AS WELL AS THE TOP-SELLING VEHICLES AT THEIR STORE can study information to improve volume, gross and ROI. However, before the information can be broken down, the store must have the information. While this may seem obvious to some, I am routinely presented with departments that fail to accomplish this seemingly simple task. Used car managers should be aware, at the very least, of the top-selling vehicles in their market by make, model, and year as well as the top-selling vehicles at their store. All too often when I ask used auto managers to name the three top-selling used vehicles in their markets, they look at me like a deer in headlights. Or, they automatically respond “Honda Accord” or “Toyota Camry.” That’s great! What year? What trim level? What mileage band? How

many of these have been sold at your store in the last 90 days? What was the average age when it was sold? There are several tools available to help managers accumulate this data, such as Auto Exchange for internal data and Cross Sell for external data. Once this data is collected, it is imperative management consistently identify which vehicles sell in their market (internal and external). That’s the science part of the equation; it’s not especially difficult to identify commodity type vehicles and, if you’re willing to travel or pay, to procure them. Further breakdown of historical internal and external trends is, however, necessary. Specifically, it would be beneficial to track sales volume, aging, and gross profit for specific COS bands. These could be broken down as follows:

$0 – $5000 $5,001 – $10,000 $10,001 – $12,500 $12,501 – $15,000 $15,000-plus The used auto dealer should be aware of and actively track each of the above categories for each price band in used cars, trucks, SUVs, and vans, comparing the current stocking mix to what has yielded the greatest success. The categories can be broken down further into import/domestic categories as well, if needed. This information, coupled with knowledge from external tools, is used to direct buying specific inventory at specific price points to generate specific results. The art of used vehicle inventory comes from identifying and procuring vehicles that put your store ahead of the curve. For example, a few years back fuel prices spiked and, as a result, highly economic, smaller pre-owned vehicles were suddenly at a premium, while large pickups and SUVs could be bought for a dime a dozen. The market was quickly flooded with these gas guzzlers, but few people had the vision or foresight to accumulate them. Those who did were those who had the knowledge and experience to understand the ebb and flow of the used car market, so

they loaded up on these vehicles at very cheap prices. It’s not difficult to guess what happened to their profits when the price of fuel went back down. Recognition of these opportunities is not always easy; often it comes from experience. I believe we are involved in one as I type this column. Thanks to the Cash for Clunkers program, new car inventories are generally low; there are fewer trades in most used inventories and the price of vehicles at auction has gotten higher. While this could mean several different things depending on your market, I would think the potential for increased gross profit, even on vehicles more traditionally thought of as commodity cars, is greater than ever. Hopefully, you’re tracking the trade capture rate. A normal benchmark for capturing trades is 55 percent of appraisals. Because of today’s market conditions, I would encourage all managers to aggressively get involved with customers and inquire about their desire to trade their vehicle, as well as ensure your store is appraising every vehicle possible. Further, I believe it’s imperative to improve the appraisal capture rate by 10 percent or more. Used autos are at a premium and the extra money put into a trade has never been a better investment. This type of forward thinking involves risk some dealers simply may not be willing to accept. Those who do so are more frequently ahead of the used vehicle game. The science of used inventory can be resolved by accumulating information, breaking it down (all the way to COS bands, if you really want to be detailed) and buying and trading aggressively according to trends. The art requires experience and guts. BILL MOKRY IS A SALES AND F&I S P E C I A L I S T F O R S E R V I C E G R O U P, A N INSUR ANCE AND FINANCIAL SERV I C ES COM PANY THAT PROV I D ES I N COME DEVELOPMENT TR AINING AND SERVICING SOLUTIONS TO AUTO DEALERSHIPS. HIS MANY YEARS OF DEALERSHIP EXPERIENCE INCLUDE SEVERAL AS GENERAL MANAGER OF A SUCCESSFUL USED CAR OPER ATION. H E CAN BE REAC H ED AT BMOKRY@SGIFS.COM .

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TE XT MESSAGING FALL S UNDER FCC REGUL ATIONS Dealers who communicate with customers via text messaging should understand the legal parameters that regulate such communications. The

regulations were crafted before the days of text messaging, so federal agencies and courts are struggling to apply those old rules to the new technology. A text message, under federal law, may be deemed to be a phone call, an e-mail or perhaps both. As a result, text messages are potentially subject to multiple federal restrictions. The Federal Communications Commission believes a text message that meets the Telephone Consumer Protection Act’s definition of a call and the CANSPAM Act definition of an e-mail must comply with both sets of laws. Thus, before sending any solicitation text messages, one should:

• O btain the recipient’s express prior authorization (it is advisable to get this in writing); • Consult your company specific Do Not Call (DNC) list;

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• Consult the national DNC list and consider whether your messages are based on an established business relationship, which may provide an exception from the national DNC compliance; and • Determine whether your delivery meets the CAN-SPAM Act’s electronic mail address definition and, if so, whether you have complied with the CAN-SPAM disclosure and opt-out requirements.

For more information, see the FCC’s Consumer Facts sheets available at www.fcc.gov/cgb/consumerfacts/canspam.html and www.fcc.gov/cgb/consumerfacts/tcpa.html.

Automotive Internet marketing specialist, Michael D. Jackson, CEO, AutoSearch Technologies, shares strategies you can use right now to boost your dealership’s online clout. RUNNING TIME: 50 MINUTES

LOG ON NOW 24 / 7 KEEP YOUR EYES OUT FOR THE NEW “AUCTION TIPS” SERIES COMING EARLY MARCH. OVER 400 HOURS OF DEALER EDUCATION CAN BE SEEN ON WWW.NIADA.TV

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Carfax Debuts Mobile App for iPhone Carfax launched the first mobile app dedicated to providing on-the-go dealers with access to Carfax Vehicle History Reports. The ‘Carfax for Dealers’ app is available for free download to all dealers on the App Store. With an iPhone or other Apple mobile device, dealers can run Carfax Reports using their existing Carfax account to better evaluate used cars anytime, anywhere. “The free ‘Carfax for Dealers’ iPhone app is just what our business needed,” said Justin Villa, pre-owned sales manager with David McDavid Automotive in Irving, Tex. “We downloaded it the day it came out and already we’re saving a ton of time evaluating cars. It’s helping us win at auction and evaluate a customer’s trade faster. After all, time is money.” Running Carfax Reports is a key component to a dealer’s acquisition process. Users start by entering the 17-digit vehicle identification number (VIN) or scanning the vehicle barcode to run the Carfax Report. Any vehicle run through the ‘Carfax for Dealers’ app is automatically added to the dealer’s inventory manager at carfaxonline.com. The reports are saved for up to 30 days and dealers can mark vehicles they’re most interested in as favorites within the app. “We’ve always been quick to embrace new technology to help maintain our competitive edge,” said Michael Townsend, used sales manager at Townsend Honda in Tuscaloosa, Ala. “When we heard about the new ‘Carfax for Dealers’ app, we went and got it immediately. The app is fast and makes appraising cars easy. It’s my new favorite tool on my phone.”Free access to Carfax Reports also is available through apps from several wireless technology providers. Dealers looking for additional pricing and product integration functionality can visit:

s s s s

AutoRevo www.autorevo.com eCarList TrueTarget www.ecarlist.com VIN Viper www.vinviper.com vAuto www.vauto.com

Sorting Through Exceptions to the Risk-Based Pricing Notice Curbstoned cars are often cheap, but state and local governments pay a high price. The FTC’s risk-based pricing notice requirements became effective Jan. 1. To

comply with these requirements, dealers must alert consumers when they are getting different credit terms than others based on credit information. The good news is the requirements give options for how and when you provide the notice. That’s also the bad news because the options and exceptions can make it difficult to figure out if you’re in compliance. To help you sort through the maze, here are some of the important exceptions and how they apply to you. Your dealership doesn’t need to provide a notice if: l

You don’t use credit reports in any way to make a credit decision. If your dealership directly contacts employers and other references and is not otherwise using any third party information, then the risk-based pricing notice is not required (it sounds rare, but there are dealers who qualify for this exception).

A notice isn’t required for a specific transaction if: l

l l

“Our customers tell us how important immediate access to Carfax Reports is to their success, especially at acquisition,” said Larry Gamache, Carfax communications director. “The ‘Carfax for Dealers’ app now puts the power of this information in the palm of your hand. And, you can run as many reports as you need through the app if you’re on the Unlimited Carfax Reports Program for dealers.” Dealers not attending the convention may contact their Carfax account manager or call 800-274-2277. To download the app for iPhone, visit http://itunes.com/apps/ CARFAXInc/CARFAXforDealers. An Android version of the ‘Carfax for Dealers’ app is coming soon.

You don’t do risk-based pricing of credit terms. This applies if every consumer whose application is approved is offered credit on the same terms.

The credit requested is not for a consumer purpose (personal, family or household use). The transaction is a consumer lease. Th e consumer applies for a specific credit product and is approved for those terms. Y ou offer specific terms to a pre-screened group and extend credit on the offered terms to one of them. Th e consumer is a co-signer (which is different from a coborrower), guarantor, surety or endorser in the transaction. Th e consumer’s application is denied and you provide an adverse action notice. Y ou provide the consumer with the credit score disclosure instead of the risk-based pricing notice. The disclosure is an alternative form authorized by the regulations. If you use it, you must provide it to all consumer applicants instead of providing a risk-based pricing notice only to the portion of applicants who are not receiving your most favorable credit terms.

It is likely some of these exceptions apply to your dealership and its transactions. Before relying on an exception, review the regulation or discuss it with your legal counsel to be sure you implement it correctly. The regulation can be found at 16 CFR §§ 640.1-.6. BY C H I P Z Y VO LOSK I Chip Zyvoloski is senior attorney for indirect lending at Wolters Kluwer Financial Services. For more information, visit www.wolterskluwerfs.com/indirect.

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