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NIADA CERTIFIED PROGRAM GROWS ALSO Spring: Time to Start Selling More Cars PLUS New NIADA Mobile Service for Smart Phones

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BY PAU L A FR E N D E L

Spring: Time to Start Selling More Cars and

RIDE T HE R OA D TO SUCCESS

Dear Dealers, It’s spring…time to start selling more cars! Since my last article, I have been doing some thinking about one thing: time. It is something we all have in common and share at the same rate; yet, we cannot control it. What we can control, though, is the most effective way to utilize it. On a daily basis, we try to achieve the most in the shortest amount of time. Why? We need to support ourselves and our families while, at the same time, loving what we do. This season, why don’t we try to serve our customers and provide them with the best quality products on the market? We can sell vehicles faster and enjoy ourselves more. I have something to help you do just that. Independent dealers can now offer an alternative to the new auto industry’s certified pre-owned (CPO) vehicle programs. NIADA and NYIADA have partnered to offer New York independent dealers a CPO

CNW

program that levels the playing field against new auto dealers, allowing you, the dealer, to reap the benefits. You will have online third-party representation on eBay Motors and OpenLane. Your certified inventory is listed at no charge. Buyers’ guides are printed and ready to go. Other program benefits include comprehensive warranty with a 12,000-mile/12-month term, no deductable, vehicles 2001 model year and up to 100,000 miles, 24/7 roadside assistance, rental transportation and contractual liability insurance policies issued directly to the dealer. The NIADA Certified Pre-Owned program is only available to association members. Additionally, NYIADA is promoting an annual educational event to help you: the 65th Annual NIADA Convention and Expo, June 20-23, at Caesars Palace in Las Vegas. This will help with all business aspects;

there will be solutions and services for your dealership, an exhibit hall, workshops, and evening events to network with industry peers! Don’t miss out – attend! For more information, call 855-694-2324 or check out nyiada.com. I have given you the key to the road to success – take it! Join the association! An application is included in this magazine. Make life easier and become more successful. Become apart of your industry’s association. Sit back and enjoy having more time. I hope to see you at the convention! Please feel free to reach out with any questions or concerns. Paula Frendel, Executive Director NYIADA paula@newyorkiada.org 855-694-2324

Dealers Are Finding Inventory Short on Cars

In what could be stemming from gasprice anxiety, dealers’ used-vehicle inventory on hand appears to be changing. And the shift that CNW Research spotted could possibly end up being “troubling” for dealers. What, exactly, did CNW see?

Basically, CNW noticed instead of there being a shortage of trucks within dealership inventories, dealers are now finding that their lots are short on cars. Overall, used-vehicle days’ supply in March was estimated to be 48.27 days. CNW noted used vehicles are available, but suggested this possible shift in the mix of cars and trucks may be troubling for dealers. In recent years, CNW explained, truck demand has been stronger than car demand. “Beginning in February, though, the trend changed,” said Art Spinella, president of CNW. “Of inventory on hand, cars now represent about 92 percent of days’ supply while trucks have climbed to over 110 percent. “If this were a one-month snapshot, it could be written off as merely an anomaly,” he added. “And it still may not be reflective of a long-term

trend. But it is worth noting.” He went on to suggest a likely impetus for the change is concerns about gas prices may finally have hit home and sent people to the car side. “While this will have little impact on casual sales, it will definitely affect franchised and independent dealerships who now have to beware of overloading lots with trucks or being forced to lower truck prices to facilitate a sale,” he said. CNW Projects Robust March With March used-vehicle sales projected to show as high as a 6-percent year-over-year spike, the first quarter of 2011 is likely to signal some significant progress for the used side of the market. Pushed by looser credit, CNW is projecting used sales in March will show anywhere from a 5.5-percent to a 6-percent improvement from the 2.39 million used sales in March 2010. “That would make the opening quarter of 2011 the best since 2008 – 6.336 million versus 6.63 million three years ago,” Spinella noted. CNW also looked at sales per outlet data for

independent stores in February and discovered this average increased by double digits. Specifically, the company found independents moved an average of 17.6 vehicles per outlet during February, which marks a 15.7-percent hike from the 15.2 unit-per-store average from a year ago. “In fact, because of the decline in the economy in 2008 and 2009, the independent dealer body shrunk dramatically,” Spinella said. “With an economic uptick and the availability of inventory, there are more independent outlets today. Outlook: a better profit picture for independents.” Web Trends Another area of the used market CNW examined was used-vehicle sales in the online arena. The company found the sales rate of Internet vehicles came in at 26.9 percent during February. A year ago, it was at 23.9 percent. “The 12.7-percent boost represents a near 90,000 unit increase,” Spinella said. “Total inventory offered on the Internet is four percentage points larger than last year.”

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INSIDE MAGAZINECONTENTS

3 Spring: Time to Start Selling More Cars 12 NIADA Certified Program Grows 14 New NIADA Mobile Service for Smart Phones

NEW EDUCATION SESSIONS FROM THE CONFERENCE OF AUTOMOTIVE REMARKETING ARE NOW RUNNING ON NIADA.TV

Several educational sessions from the recent Conference of Automotive Remarketing (CAR) are now up and running free of charge on NIADA.TV.

Over 12 sessions from the recent conference will be posted to www.NIADA.TV throughout April and May, so check back often over the next few months. These sessions will be posted in NIADA.TV’s “Remarketing” Channel as well as in the “New Programs” Channel. Get caught up on the latest in “Remarketing” at your leisure 24/7 by visiting to niada.tv.

ADVERTISERSINDEX ADESA.....................................Inside Front Cover AutoTrader.com ................................. Back Cover Cars.com........................................................... 5 Chase ............................................................. 11 Manheim.com.......................... Inside Back Cover NIADA Mobile .......................................... 14, 15 Smart Auction.....................................................9 Western General / Protective............................. 7

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

THE NEW YORK DRIVING FORCE IS PUBLISHED BI-MONTHLY 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 76006-5203. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF NEW YORK DRIVING FORCE 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 (C) 2011 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED. 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

FOR INFORMATION ON HOW TO BECOME A MEMBER OF THE NYIADA, PLEASE CONTACT PAULA FRENDEL (855) 694-2324 paula@newyorkiada.org

PRODUCT DISCOUNTS FOR NIADA MEMBERS NIADA members can save up to 29 percent on select FedEx® shipping services. For more information or to enroll in this program, visit www.1800members.com/niada or call 800-636-2377 (8 a.m.–6 p.m. Eastern, Mon.-Fri.). enting a car just became easier and economical with the new R Thrifty Car Rental Discount Program for NIADA members. Visit www. thrifty.com/?iata=00227148&PromotionCode=NIADA to receive a 5 percent discount off Thrifty’s already low rates anywhere or any size vehicle in the U.S. A 24-hour advance reservation is required and reservations can only be made through this URL or via the link on the NIADA website. Offer is valid for travel until Dec. 31, 2011. AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the United States with over 4,350 stores across 48 states, the District of Columbia and Puerto Rico. NIADA members have access to AutoZone’s “hot-shot” delivery program including discounts on more than 750,000 product level SKUs in over 70 distinct product categories. NIADA members have our expert field management team and experienced Territory Sales Managers who every day do whatever it takes to help customers deliver the highest level of quality service, manage their shops efficiently, train their technicians and maximize their profits. For more information, contact AutoZone’s Sales Center at 1-866-727-5317 or sc53@autozone.com

Used Auto Prices Reduced After 30 Days More than 50 percent of used vehicles listed for more than 30 days have at least one price drop, according to a study released in late February by leading online automotive community CarGurus.com.

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.

IRS Offers Helpful Auto Dealer Tax Tips Confused about what the Internal Revenue Service requires from dealers at tax time?

Don’t worry, as the IRS has an entire section of its website dedicated to automotive businesses. We’ve included a few tips here. As most dealers already know, the IRS requires each person engaged in a trade or business who, in the course of conducting that trade or business, receives more than $10,000 in cash in one transaction or in two or more related transactions must file a Form 8300. The agency recommends filers should keep a copy of each Form 8300 for five years from the filing date. Form 8300s should be filed by the 15th day after the date the cash was received. The form should be filed on the next business day if that date falls on a Saturday, Sunday or legal holiday. The filer must give a written statement to each person named on a

required Form 8300 on or before January 31 of the year following the calendar year in which the cash is received and a copy of this statement kept for your records. Changing your accounting method? That generally requires IRS approval. To get approval, you must file Form 3115, Application for Change in Accounting Method. A change in your accounting method includes a change not only in your overall system of accounting but also in the treatment of any material item. If you finance the purchase of your property, instead of having the buyer get a loan or mortgage from a third party, you probably have an installment sale. It is not an installment sale if the buyer borrows the money from a third party and then pays you the total selling price. FO R MO R E I N FO R M ATI O N, V IS IT W W W. I R S .G OV

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SUMMERTIME AND THE SELLIN’ IS EASY

BY A N DY FR I E D L A N D E R

people are out there buying cars in the heat of summer, even in places like Hinesville and Tyler, Texas, were the temperature regularly climbs above 100 in July and August. So a dealer who wants to snag some of that business needs to play it cool – with his customers and his inventory – even when it’s broiling outside.

It gets hot during the summer in south Georgia. Real hot. How hot, exactly?

“So hot our sales people don’t even want to get out there,” said Larry Mannion of M&M Motors in Hinesville, Ga., about 35 miles southwest of Savannah. “I’m talking really hot, you know, like that 100-degree index. I usually take the attitude that if someone is on the lot looking for a car when it gets like that, he must need a car pretty bad, because it’s so hot. I mean, who wants to be out there?” Nevertheless, people are out there buying cars in the heat of summer, even in places like Hinesville and Tyler, Texas, were the temperature regularly climbs above 100 in July and August. So a dealer who wants to snag some of that business needs to play it cool – with his customers and his inventory – even when it’s broiling outside. That means little touches like plenty of chilled water or soft drinks available for potential car buyers, or running the air conditioning for a few minutes to cool off the car before inviting customers in for a test drive. It means checking the coolant level and the AC of every car on the lot before a customer wants to look at it. It means being prepared for the inevitable heat of summer. “One thing you have to remember is our business is all emotional,” said Joe Lescota, chairman of the Automotive Marketing department at Northwood University in Midland, Mich., and the instructor for the NIADA’s Certified Master Dealer program. “It’s a very psychological business. You have to kind of cast the logic out the door a little bit and think about the consumer and the consumer’s experience. Think about how you can make the customer experience much more enjoyable.” In the summer, that’s all about cool, from the look of the offices – fresh paint in light colors – to placing misters outside, an inexpensive touch that can lower temperatures 20 degrees or more on a hot day. “Hook them up to a garden hose and they can blow a cool mist over where customers will be,” Lescota said. “Think about creating

a psychologically cool environment. Have water for the customer, but not just in a water cooler. I like a big bucket filled with ice, where you can actually see bottles of water chilling. That’s psychologically refreshing. Let the customer stay inside as much as possible and provide a huge washtub full of ice and water or soft drinks.” It doesn’t hurt to keep the cars cool, too. Lescota suggests investing in a large tent or canopy to put over some of the inventory, protecting it from the sun and, in climates where sudden hailstorms can pop up, hail damage. “Think about putting as much of the inventory as possible under one huge tent,” he said. “I really encourage dealers to get a professional tent or awning company. If I’m looking at lots and one guy’s inventory is out in the sun baking all day, and another’s is in the shade, I can see the difference.” And dealers shouldn’t be afraid to get the word out about their cool touches through their advertising. After all, none of those ideas will bring in customers who don’t know about them. “Dealers not only need to do these things – they need to tell the public about it – advertise it,” Lescota said. “‘Our vehicles are in the shade,’ or, ‘Come on in for some icecold water.’ Let people know it’s ice cold. Remember the old days when movie theaters used to advertise ‘ice-cold air conditioning?’ There is a psychological response to that.” That is also true of the dealership’s grounds. Summer is prime time for weeds, those persistent pests that seem to constantly be growing in cracks in the pavement. “You have to look at your property, and that’s an everyday thing, too, because weeds can pop up overnight,” Lescota said. “We have a tendency to look past those things.” The one thing that can’t be looked past is the temperature, which can climb to 130 degrees inside a closed car in hotter climates. If a customer wants a test drive, making him get into that blast furnace isn’t likely to sell him on a vehicle. CONTINUED ON PAGE 8

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“We’ll go out and crank the vehicle and bring it up front for them and sit inside and talk to them for awhile and let the vehicle cool off,” said Brian Pool, co-owner — along with his father, Scott — of Autohouse Auto Finance in Tyler, Texas. “Let the AC run.” Lescota is all for that. He also said rolling the car’s windows down on hot, sunny days can keep the interior from getting too bad in the first place. Sales consultant Jan Kelly of Kelly Enterprises said having windows tinted can help, too. “If it gets too hot in there, when I get in that car, I’m not thinking, ‘Wow, this is a nice car.’ I’m thinking, ‘I hope I don’t get a thirddegree burn,’” he said. “And of course, don’t just throw a customer in the darn car. Let the salesperson crank the car and cool it down, so when the customer gets in the car, it’s an ‘Ahhh’ feeling as opposed to an ‘Ow, this hurts’ feeling.” Jim Coury, owner of Integrity Auto Sales, has been selling cars in steamy Port Orange, Fla., since 1987, so he knows a thing or two about dealing with heat. One of his major changes for summer is his of hours of operation, a move aimed at increasing traffic of customers trying to avoid the hottest part of the day. In the winter, Coury’s lot closes at 6 p.m., sometimes earlier. In summer, it will be open until 8 or beyond. “We find people don’t want to be out in the middle of the day in the heat and get into a car that feels like it’s about 180 degrees,” he said. “We post 8 o’clock hours but a lot of times we are here even later.” Coury also changes his advertising during the summer, buying more radio ads to target people out driving or at the beach. “Radio advertising does well in the summer – you get a lot more bang for your buck that time of year,” he said. As for the cars themselves, Lescota said it’s worth the extra time and effort to keep the inventory looking clean and sharp. That can be especially difficult in summer, when the hot sun tends to fade paint and upholstery, and dust and debris tend to blow in from the surrounding area. While keeping the vehicles out of the sun is preferable, it isn’t always feasible, so a dealer has to be prepared to clean the inventory often. “People buy visually, so you need to be sensitive to making sure every single car, every single day, looks fresh,” Lescota said. “It’s easy to get a car looking good for the lot. The hard part is keeping it looking good while it’s on the lot. That’s why it’s very important for the dealer to make sure he’s got a good coat of wax on the car. And have the porter wipe the cars down first thing in the morning, not anywhere near the afternoon because that water will cause water spots and some water spots can be very, very, very

SUMMERTIME AND THE SELLIN’ IS EASY “The price of gas is going to continue to rise, which means fuel-efficient is in again,” she said. “The fuel-efficient ones are going at a premium. In fact, there might be a shortage of fuel-efficient cars. I hear dealers are having a hard time getting inventory.”

difficult to get out. A lot of that preparation needs to be done very early in the morning.” Lescota also suggested washing the windows with a solution of one part ammonia to four parts water to “make them absolutely sparkle.” “People might say that kind of stuff isn’t a big deal,” he said. “Of course it is. Look at how any person shops. If I’m at a store and I find something on the shelf that has dust on it, I put it back and I look for a box or can that doesn’t have dust on it. Dust says it’s old. Dust says it’s stale. It might not be, but that’s what it says. That’s a very powerful tool that can motivate a potential buyer.” Not all of the issues facing cars sitting in the heat of summer are cosmetic. Some can be legal – the heat can make stickers face or even fall off, including required FTC stickers and Monroney stickers. And the heat can even keep a car from starting. “Believe it or not, we have to make sure we keep the cars started once a week because batteries take just as much of a beating in the summertime as they do in the winter,” Coury said. “The heat is just as bad for a battery as the cold. It’s funny, it will be the dead of summer and you’ll be going, ‘What the heck? All these batteries are going bad on me.’ The heat is really tough on those batteries. So we make sure we have a lot of batteries in stock, ready to go.” Ross Turner, assistant commercial category manager for AutoZone, an NIADA National Member Benefit provider, suggests keeping a careful eye on the cars’ rubber items – such as belts, hoses, tires and wiper blades — because rubber can be greatly affected by heat. And an extra thorough wash might be a good idea when the weather warms up, especially in places that had rough winters. “Remember that it wasn’t just snow and mud that accumulated on the cars,” he said. “If they were driven, there were also salts, sands and other melting chemicals that have built up on the auto’s finish. Cleaning the interiors and exteriors more thoroughly might set one dealer out ahead of another when it comes to customer impressions.” Summer can even affect the type of cars a dealer wants on the lot. Kelly said the hot items – pun intended – for the upcoming

summer will be fuel-efficient vehicles. “The price of gas is going to continue to rise, which means fuel-efficient is in again,” she said. “The fuel-efficient ones are going at a premium. In fact, there might be a shortage of fuel-efficient cars. I hear dealers are having a hard time getting inventory.” At least one dealer already is finding that to be the case. “We’re trying to buy stuff that gets decent gas mileage as we look forward toward summertime,” Pool said. “We’re having trouble finding any inventory. We’re keeping our eyes on gas prices and trying to stock a lot of stuff that gets good fuel economy – cars and small SUVs – and trying to stay away from diesel trucks with the price getting close to $4 a gallon. “We want to get some stuff in here that we can sell. We used to buy SUVs and Suburbans and Tahoes because people were getting ready to go on vacation in the summer and they’d buy those bigger vehicles to carry their families in. But not these days.” Summer actually brings more than heat when it comes to weather. In some areas, it means sudden hailstorms or tornadoes that can pop up at a moment’s notice. In Florida and along the Gulf coast, it means the beginning of hurricane season. Coury found that out the hard way in 2004, when Florida was pounded by four hurricanes – Charley, Francis, Ivan and Jeanne – which left his dealership a wreck. That summer reinforced the need to have a storm plan, whether that’s a tent or cover to keep cars out of the hail in Texas or places to hide Florida cars from hurricane-force winds and storm surges. “One thing I have to do constantly is storm preparedness,” he said. “We rehearse where cars are going and what to do. I’m very close to the water here, probably 100 yards from the Intracoastal Waterway. So I have to worry about any storm surge, flooding, high winds. “During one of the hurricanes we had, I put a bunch of cars together in a big square, not realizing the shingles were going to blow off my roof and skin up every car there was. So I try to take the largest assets and protect them the best, and do what I can do with the rest of it.”

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ONLINE SALE S SUCCE S S:

LET YOUR LISTINGS DO THE TALKING Top dealers consistently get more leads because they pay attention to how their car listings appeal to online consumers. Almost anyone can start selling cars using the Internet today, but those who are most successful give buyers the right information during the shopping process. Sellers like you can break

through the clutter of online used car sales by giving consumers photos, compelling descriptions and vehicle history they want to see while they shop. If you’re not already online, you need to be. The best way to increase used car sales is to be where the most people shop. Eighty percent of consumers today use the Internet to help find their next car. Once your business is established online, you’ve got to make buyers take notice of your online listings. This is vital to online selling success. Consumers visit less than two dealerships on average before deciding to buy. Why so few? Most shoppers narrow their dealer choices down by doing extensive research online – listings, pricing, customer reviews, etc. In fact, when consumers finally do visit a dealership, they have specific cars and prices already in mind and are armed with details about each car. Typically, shoppers start by visiting thirdparty online automalls like AutoTrader.com and Cars.com. A quick search can return hundreds of dealer listings for vehicles similar in style and price. Internet managers and used car dealers with online inventory know the top concern is getting buyers to notice their cars and contact them. Since you can’t sell online shoppers face-to-face, you have to rely on your listings to do the talking. So how do you make them stand out from the rest? Focus your marketing efforts on two lead-generating areas that attract the most attention: Search Results Pages (SRPs) and Vehicle Details Pages (VDPs). Did you know only 4% of online shoppers that see your listing in their search results actually click through to the detail page for your contact information? For all the money you spend to post your cars for sale online, it’s in your best interest to highlight your inventory properly. The SRPs and VDPs are the most prominent places to communicate the value of your used car inventory online. When a

shopper clicks on an SRP listing, they go to the VDP to browse additional photos, read about features, see the vehicle history and locate the seller. The key is getting more shoppers to notice and click your SRP listings so you generate more leads from your VDPs. The vehicle description you provide on SRPs is your first opportunity to tell consumers what they should know. SRPs give you a limited amount of space to market your vehicles, so use that space wisely. Be brief but informative. A vehicle description should not be exclusively technical. Remember, shoppers don’t know as much about cars as you do and detailed features may not mean as much. Things like automatic transmission, power windows and air conditioning, which are standard on most vehicles, shouldn’t be the focus of your selling points. You don’t want potential customers glancing past your listings because they didn’t peak their interest. Generally, your listings also include a small photo when they appear on typical SRPs. It might sound obvious to seasoned sellers, but photos are one of the best ways to grab attention of shoppers during their online used car search. Use the best fulllength photo for the small ‘thumbnail’ image on your SRPs and save detailed images of the interior and other angles for consumers to browse while on the VDP. There are several quick improvements that can make your listings more attractive to online shoppers. One is to use relevant information to attract attention. The more details you can provide the better your listings look. For example, it’s easy to find hundreds of ‘2005 Ford Explorers’ with the same trim package for sale online, so make sure you tell potential customers why they should buy yours. Try to describe the car’s benefits unique to a specific customer – as if they were standing in front of you. For example, you might say, “this van comfortably fits up to eight people” or, “we offer low financing on all our cars” or, “this car shows no reported recalls and comes with a Carfax Vehicle History Report” in the vehicle descriptions on your SRPs.

SO HOW DO YOU MAKE THEM STAND OUT FROM THE REST? FOCUS YOUR MARKETING EFFORTS ON TWO LEAD-GENERATING AREAS THAT ATTRACT THE MOST ATTENTION: SEARCH RESULTS PAGES (SRPS) AND VEHICLE DETAILS PAGES (VDPS). To connect with more online shoppers, you need to think like one. You can compete online and sell cars faster by giving buyers relevant information to help them make an educated decision. Another great way to build confidence with online consumers, in addition to providing a good photo and description, is to link your Carfax Reports to your SRP and VDP listings. You’ll stand out on SRPs by offering these reports free. Plus, being open and up-front builds trust with online shoppers, making them more likely to buy from you. Top dealers consistently get more leads because they pay attention to how their car listings appeal to online consumers. Build consumer confidence by providing trusted information in your listings. Make your SRPs stand out in the crowded online marketplace and more shoppers will click through to your VDPs. More clicks equals more leads and ultimately, more sales. BY DA L E P O L L A K A N D L A N C E VI C KE RY

Dale Pollak, founder of vAuto, is a highly sought-after authority on maximizing profits from used vehicle operations, working extensively with Dealer 20 Groups, Dealer Associations and large dealer enterprises across the country. In addition to his regular contributions to auto industry publications like Dealer Magazine, Pollak is a published author of 2 books, Velocity: From the Front Line to the Bottom Line and Velocity 2.0: Paint, Pixels and Profitability. Lance Vickery is director of dealer business at Carfax and has spent more than 25 years in the auto industry.

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F EDER AL ADVOCAT ES LOBBY ING REP OR T

NIADA’s Whann Participates in First FTC Roundtable I have just returned from the FTC roundtable entitled “The Road Ahead: Selling and Financing Motor Vehicles” held at the Wayne State University School of Law in Detroit, Mich. Choosing a law school

as the venue for the event was perfect! So many of the discussions centered around complicated fact patterns, the application of overlapping federal and state laws and variations and inconsistencies from state to state, you felt as though you were sitting in a law school classroom. The program consisted of six panel roundtable discussions on the following: Understanding the Motor Vehicle Sale and Credit Transaction, From Both Prime and Subprime Perspectives; Interest Rates, Dealer Reserves and Markups; Payment and Locator Devices and Consumer Privacy; Spot Delivery; Contract Add-Ons and Vehicle Title Problems and Dealer Bankruptcies. The panels consisted of five members each (one had four) and had a mix of regulatory, industry and consumer representatives. They were moderated by six different FTC staff members, all of whom I have met on my trips to Capitol Hill (and have had the opportunity to discuss the issues being considered in the roundtables) and they did an excellent job facilitating discussion. While all other industry members were limited to participating on a single panel, I was asked to participate on two (I volunteered for all six). I took it as a compliment, but you decide for yourself. The goal for the day was to “explore consumer protection issues pertaining to motor vehicle sales and leasing” and to determine “what consumer protection issues, if any, exist that could be addressed through a possible rulemaking or other initiative.” All in all, I would say the day was quite productive. However, with the individual roundtables lasting only 30 to 90 minutes, it was difficult at times to get into depth on many of the subjects. Consider the challenge in even being able to explain something as basic as what is a motor vehicle dealer and how do they operate? Franchised or independent? Big or small? Metro or rural? Threeparty paper financing or two-party paper financing, with a little Buy Here-Pay Here thrown in for good measure? And we are only beginning to scratch the surface! As background, the Dodd–Frank Wall Street Reform and Consumer Protection Act is a federal statute in the U.S. that was signed into law by President Barack Obama on July 21, 2010. The act is categorized into sixteen titles and from the and, from the estimates I have seen, requires regulators create 243 rules, conduct 67 studies, and issue 22 periodic reports. The stated aim of the legislation is: “To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘too big to fail,’ to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.” So what exactly does the act do? This description from Wikipedia is one of the best I have seen: “The Act changes the existing regulatory structure, such as creating a host of new agencies (while merging and removing others) in an effort to streamline the regulatory process, increasing oversight of specific institutions regarded as a systemic risk,

amending the Federal Reserve Act, promoting transparency and additional changes. The Act establishes rigorous standards and supervision to protect the economy and American consumers, investors and businesses, ends taxpayer funded bailouts of financial institutions, provides for an advanced warning system on the stability of the economy, creates rules on executive compensation and corporate governance, and eliminates the loopholes that led to the economic recession. The new agencies are either granted explicit power over a particular aspect of financial regulation, or that power is transferred from an existing agency. All of the new agencies, and some existing ones that are not currently required to do so, are also compelled to report to Congress on an annual (or biannual) basis, to present the results of current plans and to explain future goals. Important new agencies created include Financial Stability Oversight Council, the Office of Financial Research, and the Bureau of Consumer Financial Protection.” It should be noted while section 1029(d) of DoddFrank confers on the FTC authority to prescribe rules under the Administrative Procedures Act with respect to unfair or deceptive acts or practices by motor vehicle dealers it does not, however, expand or otherwise address the authority the FTC already possesses under the Federal Trade Commission Act to initiate enforcement action against unlawful behavior. Given the fact there appears to exist a somewhat

unbalanced and hostile view amongst some in the regulatory community towards dealer-assisted financing, one of the most important tasks as an industry will be to assist the FTC and the consuming public in better understanding the mechanics of dealer-assisted financing. We must also collectively establish a facts-based record upon which the question of whether to engage in a UDAP rulemaking may be considered. Over the past 27 years (the last 16 as outside general counsel to NIADA) I have had the opportunity to work with federal regulatory agencies, including the FTC, to promote independent dealers’ compliance with federal statutes and regulations and to educate consumers about the car buying and financing processes. Never in this time period has there been an issue as important to independent dealers and the future of our industry as this. It will change the landscape of how cars are sold and financed for years to come. We will continue to be actively involved in the process as things progress and I look forward to having the opportunity to discuss the issues in greater detail at the NIADA Convention & Expo in June. Until then, you can stay current with the latest developments by following me at www.facebook. com/keithwhann and twitter.com/keithwhann. See you in Las Vegas! FEDERAL ADVOCATES is NIADA’s governmental advocacy partner. To read past lobbying reports, visit www. niada.com/legislative_and_legal.php

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N IADA/NAC CERTI FI ED PRO G R A M

GROWS WITH NEW PA R T N E R S H I P S, E N H A N C E M E N T S

NAC is the administrator of the NIADA Certified program. The warranties are backed by an A-rated insurance carrier with more than $26 billion in assets, a figure that gives dealers with the peace of mind provided only by a fully insured program.

BY CHRISTINA SCHRANK

To give independent dealers the ability to compete with franchise dealers offering manufacturer certified pre-owned vehicles, NIADA and NAC (formerly National Auto Care) last year created NIADA Certified.

The program includes comprehensive 12-month, 12,000-mile warranty coverage with no deductible, 24-hour roadside assistance, towing, rental and more. In November 2010, the program underwent significant changes to incorporate more value for dealers and even higher satisfaction for customers. NIADA Certified added additional team members experienced in the used vehicle market to ensure processes were put in place that would support dealer certified success. Today, the program is supported by an active training calendar with contribution from strategic partners and best practice review. “Certified used autos has become its own listing category. Between new and used, the NIADA Certified program levels the playing field and allows independent dealers the opportunity to compete for those consumers looking for certified inventory,” said Greg Levi, NIADA Certified strategic relationship director. “The program allows independent automobile dealers the opportunity to create their own competitive program.” Subject to a comprehensive inspection, NIADA Certified vehicles include a 12-month, 12,000-mile limited warranty with a zero dollar deductible. Dealers will now be supported through ongoing training and best practices review by the NIADA Certified team. Better yet, even

with the increased warranty coverage, the same eligibility guidelines for NIADA Certified qualify, including most 10-yearold or newer vehicle models with less than 100,000 miles. “The independent market needed an answer to the manufacturers’ certification program and the NIADA certification program lives up to the promise,” Levi said. The positive consumer experience is assured by repairs that can be made at any licensed repair facility and with a program that’s supported by 25 years of administration experience. After a vehicle has passed an inspection that meets the program’s certification standards, it’s then registered with NIADA Certified through our unique online Express Lane™. Following registration, the dealer has access to a free copy of an AutoCheck® vehicle history report, the ability to print a compliant buyer’s guide, print a clean and professional inspection checklist which can be used in either the showroom or online, plus the capability to export certified inventory to third party portals including Auttr Motors, eBay® Motors, and EVERYCARLISTED. com®. These exports provide the ability to advertise the vehicle as NIADA Certified and offer it with a limited warranty that begins when the vehicle is retailed to the consumer. These many new partnerships with third party portals, especially its newly announced affiliation with eBay® Motors, allow the dealer’s NIADA Certified inventory to be discovered with a search for certified inventory alongside manufacturer results. NIADA Certified is the first independent certification program to be recognized with the

manufacturer programs. And, because our system is Web-based, all of this – and much more – is accessible to dealers in just a few simple clicks. The program coverage enhancements have allowed us the opportunity to grow and add to our strategic partnerships, provide above-and-beyond support and service and give dealers a way to offer consistent value to consumers and solidify relationships with lenders. NIADA Certified most recently partnered with eBay® Motors as one of our program’s inventory exports. Each program dealership will have its NIADA Certified inventory exported to eBay® Motors classifieds, providing a free listing to be displayed to all within a 200-mile radius of each dealer. Also, NIADA Certified recently announced a partnership with OPENLANE, an online auction company which now offers program listings to dealers on Open Auction. This new listing acknowledgement gives the NIADA Certified brand additional creditability and provides an option to those dealers who want to wholesale inspected vehicles which meet the program’s certification standards. “These many new third party online portal partnerships are vital to the success of our NIADA Certified program,” said Michael Linn, CEO of NIADA. “The recognition and powerful marketing arm these online portals provide is invaluable to all of the dealers who participate in the program. It’s like free advertising, and research proves over and over again that online listings that promote certified vehicles sell faster and for a larger profit.” CO NTI N U E D O N N E X T PAG E

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probably more than we spend at our home, that we thought it might as well look nice,” Durrett said. “Dealers come by and look at the place to get ideas about how their lots should appear.” Durrett said his building has a large The NIADAroom Certified team conference as well as aalso nicehas payfocused efforts on building partnerships ment room. with lenders in order to of create incentives “We spent a lot money on the and discounts funding for NIADA place to makeonit look different because Certified we didn’tvehicles. want it toRecently, look like NIADA anyplace Certified announced Columbus Finance, else,” Durrett said. “When we bought Inc., a lender serving the central Ohio the property, it needed work. We pipe market, agreed to give dealers an additional music inside and outside the building. 10-percent advance (up to $1,000) and People it’s nice to percentage be greetedpoint with a will offer say customers one smile and music.” off program rates when purchasing a Durrett, Martin NIADA CertifiedNerison vehicle. and The team alsoall thewith lookadditional of a dealership only isagree working lenders toisput the beginning of the sales process. together similar partnerships and lender Customerstowho come a store opportunities dealers across into the country. because its ambiance had “As our of NIADA Certified have program their expectations so it’s up to continues to grow, soraised, will the lender partnerships with it, at theexpectalocal, the dealer associated to make sure those statewide national levels,” said Linn. tions areand met. “Over Staff the past four NIADA has been to has to years, be ready to respond highly successful at Inventory bringing lenders and customer needs. must match dealers together,preferences. and the NIADA Certified customers’ And just beprogram is another great opportunity to cause you recently built a nice showexpand on great relationships like the one room doesn’t mean you can rest on locally that was just announced in Ohio.” your laurels. The NIADA Certified team is excited “Regarding the landscaping, we did about the momentum that’s been building

with health codes and keeping food fresh. Our job is to sell cars, not be an actual diner. So we stopped that after a while.” Once the diner motif was completed, Nerison said it was just a matter NAC is maintenance. the administrator of the of proper While theNIADA neon Certifiedrequires program. Theextra warranties are signage some attention, backed A-rated insurance the restby ofan the showroom justcarrier needswith to more than $26 billion in assets, a figure be kept clean. that “My givesphilosophy dealers withis the of mind not peace to overdo it,” provided only by a fully insured program. he said. “Just have a nice clean facility There is zero dealer liability repairs that without things getting out for of hand.” fall under the warranty period. All dealers Nerison said the Internet has beon the program receive a contractual liability come a powerful selling tool. People go insurance policy issued directly from the online to company. check inventory and prices. insurance When they pictures of his For moreseeinformation on dealerNIADA ship, that call might get their attention, but Certified, 800-840-2567 or visit www. attention on the Internet doesn’t autoniadacertified.com. Don’t forget to visit often, matically sales. updated with new as the siteequal is constantly Internet leads are good and and Still, exciting information, announcements pictures on the Web are nice, butNIADA Neriand program enhancements. son still believes best wayon toFacebook, sell cars Certified also can the be followed Auttr and Twitter. to people is to get them in the store. If pictures do that, great. If customers like CHRISTINA SCHRANK the music and the smell of popcorn is the vice president of marketing for when getveteran there, wonderful. It all NAC andthey a 15-year of the auto industry. NACbut has decorations been developing and nice amadds up, innovative, value-based aftermarket products and service biance arecompetitive not a replacement for good agreement programs for automotive, service andandgood inventory; power sports, recreational vehicles they’re ultifor almost just 30 years. mately adjuncts.

a nice job with it,” Martin said, “but that requires irrigation and it must be well maintained. And I have to say the landscaping wasn’t cheap. But you try not to be penny-wise and poundfoolish. We spent money to make the during the first dealership lookquarter nice. of 2011. Today, there are 120 dealers participating in the program in 30 states around the country philosophy is not and “Our the number is growing weekly. Those dealers are enjoying the benefits of the to Certified overdoteam’s it. We want NIADA support before, during and after initiation into the program. to create a nice, clean Now, after signing on to participate in thefacility free program, dealers an online that is attend attractive implementation webinar hosted by our andCertified attracts NIADA team. attention The webinar is interactive and allows our team to review with out costs gettingand, the program, tools, best practices most importantly, to getAnd, the program out of how hand. started within a dealership. The training is available for both thethe dealer and their importantly, design personnel every week. is functional.” Once implementation training has been completed, marketing materials are sent to theNerison dealership and training not teamto said it’sour important follows to ensuretake the dealer hasstore. all the let theup ambiance over the information and tools needed succeed. “We used to have hottodogs and Our team then consistently communicates bake cookies along with popcorn and with each dealer on items such as program “But that got soda pop,” Nerison said. enhancements and additional training to be a lot of trouble. Once you start opportunities and continues to review best cooking food, you start having to deal practices.

Look for your copy of this year’s latest facts and statistics on the used vehicle industry based on proprietary research by some of the best-known industry analysts. Get an overview of the independent used car dealer and used vehicle marketplace. ALSO VIEW THE ONLINE VERSION AT

WWW.NIADA.COM IN EARLY JUNE.

M A R C H 2 011 W W W . N I A D A . C O M

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NEW NIADA MOBILE SERVICE

FOR SMART PHONES PUTS KE Y APPR AISAL DATA , MEMBER NE WS AT YOUR FINGERTIPS BY S C O T T L I L JA , V I C E P R E S I D E N T, N I A DA M E M B E R S E RV I C E S

This spring, NIADA members will have access to a new mobile application tool from NIADA that will enhance their productivity and profitability and stay up to date on the latest developments impacting their dealership.

This new tool, NIADA Mobile Service, is accessible by Apple iPhones, Android-type phones and other select models. It puts at members’ fingertips a wealth of critical data to help them make better vehicle appraisal, purchase and retail sales decisions. Now, members can access their subscriptions to appraisal services from NADA Guidebook, Kelley Blue Book, Black Book, and Galves Auto Price List. They also will access run lists from participating auctions. Furthermore, NIADA Mobile Service links them by smart phone to select content on NIADA.com. Here’s how NIADA Mobile Service will streamline your operations: On the lot or on line: More quickly appraise a vehicle, for customers at your lot or those selling online through sites such as Craigslist. Access your guide book vehicle appraisal service or a market report – or your subscription vehicle history report service – on the specific unit. Have at your fingertips the right current facts to pencil your best deal. Buying from auction: You can access the auction’s pre-sale run list while at the auction or sitting in your office. You may view the inventory then, once you land on a unit you like, press on the appropriate smart phone icons to pop up auction-supplied information about the unit, its appraisal data, and a vehicle history report. Continual and timely updates ensure you have the freshest available data. During a moment of downtime: Activity suddenly slows its hectic pace for a few minutes, so you use the time to access the NIADA website. There you check some key association information or watch a NIADA.TV video you’d put off. The service also alerts you to urgent messages that might require immediate action. Designed for NIADA

NIADA Mobile Service was developed by leading automotive mobile applications developer and NIADA technology partner and advisor GigglePop.com Inc. The company is importing NIADA web content and coupling it with existing GigglePop software mobile applications. GigglePop’s technology is known

for speed, accuracy and, of course, mobility. Its fat-finger icon or button designs are a special value when searching for key information when working in distracting environments like auctions. These large icon designs help users easily find and stroke with their fingers the right icons or buttons they want, reducing keystroking errors. As NIADA’s technical partner, GigglePop will continue to support Mobile Service and be an industry liaison for NIADA Mobile. Accessible subscription guidebook data and features through Mobile Service include:

Customizable software settings s All guidebook regions or states include s VIN look-up decoder s Stores booked vehicles, recall in an instant s Enter personal notes on booked vehicles s Lists and sorts appraised vehicles s Re-values saved vehicles with each new update s Automatically updates wirelessly s Barcode scanning capability s Seamless integration with all GigglePop valuation tools, including vehicle history report subscription services and auction run lists s SmartBid Market Report s Large easy-to-read fonts s

NIADA Mobile Service also makes your day at the auction simple, easy and productive. Accessible auction run list data from participating auctions includes:

Search by lane or run number to view auction vehicle data s Barcode scanning capability s Continual auction run list updates even while auction is in progress s View those late arrivals s Save target vehicle data for future reference s Enter personal notes and bid pricing on specific vehicle records s Lists and sorts saved target vehicles s Seamless integration with all GigglePop valuation tools, including Guide Books, Vehicle History and participating Market Reports In addition to providing mobile access to these key services, NIADA Mobile Service also connects members to select NIADA content on the NIADA site. Wherever you are, you can stay on top of moving legislative decisions, regulatory compliance issues, new NIADA member services and educational programs. s

Especially in today’s market, still recovering from the recession, this mobile service will help members operate more profitably. It puts at hand the insight needed to buy and sell more profitably and keep abreast of industry news and events influencing the used vehicle retail market. The more competitive dealers today are clearly adapting to our changing industry by using mobile technologies and solutions to help them better manage their used vehicle operations, inventories, vehicle sourcing and retail sales processes.

DELIVERS TANGIBLE MEMBER BENEFITS Members’ use of the NIADA Mobile Service tool will help them:

I dentify quality, retail-ready inventory: Mobile accessibility to auction inventory as well as vehicle valuation guides can help dealers meet challenges presented by the economic fallout from the last three years’ depressed vehicle sales, drop in leasing activity and reduced stream of fleet rentals into the remarketing stream. s Source the right-priced vehicle for the customer: Reduced levels of wholesale units flowing into remarketing channels have made it more difficult to source and match the right vehicle to customers’ ability to pay. NIADA Mobile Service helps dealers locate those vehicles at an acquisition price the customer can afford and finance, while providing enhanced profit for the dealer. s

Often spread thin by needing to be in the office, on the lot and at the auction seemingly simultaneously, the independent used auto dealer must use time and resources wisely. By adding this new Mobile Service tool to the NIADA portfolio of member services, the association helps its members access critical association information and related vehicle valuation, history reports and auction run list services right from their smart phone. As market needs continue to change and dealers seek new ways to remain competitive, like purchasing inventory outside their local market areas and using web-based competitive vehicle analysis and pricing tools, GigglePop and NIADA will continue to enhance Mobile Service to help dealers make the most informed and profitable business decisions.

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NEW YORK INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION 565 Hunts Point Ave. | Bronx, NY 10474 855-694-2324 (NYIADA4) | Fax 718-328-1445 paula@newyorkiada.org www.newyorkiada.org

MEMBERSHIP APPLICATION It is important to me to be recognized as a professional! Enclosed are my annual dues of $350 to make sure that my business has all the advantages the NYIADA provides to put me at the forefront of my profession. By completing this form, I am consenting to and giving NYIADA, its affiliates and subsidiaries, my permission to contact me and provide information to me at the mailing and email addresses, telephone and fax number(s) I have provided. Business Name: _________________________________________________________ Contact Person: _________________________________________________________ Mailing Address: ________________________________________________________ ________________________________________________________ Physical Address: ________________________________________________________ (if different from mailing)

________________________________________________________

Phone: ____________________________

Fax: ____________________________

Email Address: __________________________________________________________ Website Address: ________________________________________________________ Dealer License Number: ________________________ How did you hear about NYIADA? _________________________________________ Please mail application and $350 check or money order made payable to New York Independent Automobile Dealers Association (NYIADA) to the address above. Thank you for being a member of NYIADA! “Individually we struggle to be heard, collectively we cannot be ignored.”

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CARFA X L AUNCHES ADVANTAGE PROGRAM FOR DEALERS

PRE-GAME WARM-UP:

REVIEW FINANCING PRACTICES AHEAD OF CFPB AND FTC RULES

NEW PROGRAM DESIGNED TO INFLUENCE SHOPPER’S DEALER CHOICE, ENHANCE CONFIDENCE

It’s the beginning of the baseball season. Experts are poring over team rosters, game schedules and statistics to predict the season’s outcome. The fun and fear

Carfax is giving dealers a powerful new way to attract customers using the Carfax brand. The Carfax Advantage™ Dealer Program distinguishes Carfax-subscribing dealers that are committed to transparency. Through the program,

participating dealers can set themselves apart from their competition. Used car shoppers know they can buy with greater confidence when shopping at any Carfax Advantage dealership. “Being a Carfax Advantage dealer with unlimited access to Carfax Reports, Carfax has quickly become one of our most valued partners,” said Adam Warmka, general sales manager at Dick Brantmeier Ford Lincoln Kia in Wisconsin. “We use them when we’re buying cars to make sure everything checks out and our salespeople are constantly asking for printed copies so they can show our customers. Every car we list online has a Carfax Report. Carfax is in our advertising, out in front of our dealership and on every car in our inventory. We use them every day.” According to recent research, more than 80% of used car shoppers surveyed said they would prefer to shop at a Carfax Advantage dealership. Carfax Advantage dealers have another way of building confidence with used car buyers and help customers make faster buying decisions. “Our participation in the Carfax Advantage program has helped us build credibility with customers,” said Dan Moltz, general manager at Car Center of Waldorf, Md. “We show the Carfax up front on every car. Customers appreciate it and the result is additional sales and higher customer satisfaction. Also, by pulling Carfax Reports prior to buying inventory, we shorten our turn, which we all know increases retained earnings. The more you turn, the more you earn.” As part of the program, participating dealers have unlimited access to Carfax Vehicle History Reports and Carfax Auction Quick Check, plus a Consumer Information Pack for every car being retailed. Carfax also provides enhanced point-of-sale materials for free, including new items that highlight Carfax Advantage dealerships. “Transparency greatly influences consumers when making their dealer choice,” said Bill Eager, vice president of Carfax. “Thousands of consumers we tested said that the Carfax Advantage program means trust and confidence. They know immediately that a Carfax Advantage dealer will show them the Carfax. As a result, participating dealers enhance their reputation and sell more cars faster.”

is the element of the unknown. The same is true of the new Consumer Financial Protection Bureau. As it takes shape, we are checking its roster of leaders and their speeches and public announcements to predict first-year activities. The fear, not so much the fun, is the element of the unknown. One unknown is how the bureau and the Federal Trade Commission will define an unfair, deceptive, or abusive act or practice in motor vehicle financing. The Dodd-Frank Act authorizes them to make and enforce rules to prevent such acts and practices in consumer financial products and services. Many states already have similar statutes, but each state has its own unique definitions and case law. Some states have developed a large body of case law defining the standard, but the Dodd-Frank Act will add a unique layer of federal law, regulations and court decisions. State attorneys general also can sue to enforce federal law, so we may see case law develop based on unique state decisions to enforce. In addition, state laws that provide greater consumer protection will continue to be enforceable. The FTC recently announced it’s conducting public roundtables in three to five cities around the U.S. to discuss consumer protection issues in connection with motor vehicle sales and leasing. It published a list of discussion topics indicating the acts and practices under the most intense scrutiny. The list includes yo-yo financing, finance company incentives to dealers resulting in more expensive credit, interest rate mark-ups and upfront charges of which the consumer is unaware, negative equity financing, selling and financing add-on products and services and use of GPS location devices. Details may be found at ftc.gov. Information from the roundtable meetings will likely shape the FTC’s view on whether the practices discussed are in any way unfair, deceptive, or abusive acts or practices. The meetings will likely be a game changer. Whether or not you participate in the meetings, you should review your dealership’s practices in these areas. The legal standard for review will develop over time. For now, I suggest the common person standard: Would you be comfortable having your practices displayed on the Jumbotron at the ball game? 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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