New York by NIADA

DRIVING FORCE

THE OFFICIAL MAGA ZINE OF NEW YORK INDEPENDENT AUTO DEALERS ASSOCIATION

MAY/JUNE 2018

PA G E 03

DALLAS, TEXAS Permit No. 2079

PAID

PRSRT Standard U.S. Postage S TAT E A F F I L I AT E

W W W.NEW YORKIADA.ORG

INDUSTRY WATCH | BY CARFAX

57 MILLION VEHICLES IN U.S. HAVE OPEN RECALLS New Research from Carfax Millions of vehicles being acquired, retailed and serviced by dealers this year may have potentially dangerous unfixed recalls. According to Carfax, more than 57 million recalled vehicles – more than one out of every five vehicles in the U.S. – currently are in use across the country. The company’s annual research suggests the southern parts of the country are most likely to have cars with open recalls. Southern states like Texas, Mississippi, Louisiana, New Mexico, Alabama and Arizona are some of the top states with the highest open recall percentages. California, Texas, Florida, Pennsylvania and New York have the most vehicles with open recalls. “For more than two decades, Carfax has supported the manufacturers’ efforts to get recalled cars fixed,” said Carfax president Dick Raines. “Every day we help thousands of dealers identify vehicles with open recalls. We also alert millions of drivers about

recalls on their vehicles so they can bring them to dealers to be fixed. Safety is our number one concern.” Carfax offers free services to help notify dealers and about open recalls. Carfax Advantage dealers have their inventory continuously monitored for recalls by Carfax free of charge and get regular reports identifying which vehicles have open recalls. Making this information readily available for dealers can help boost closure rates of open recalls. In addition, registering customers with myCarfax helps keep those drivers informed about recalls. For dealers with service bays, registering customers for myCarfax also comes with free benefits that help increase customer loyalty and retention. The new data also suggests that work-life balance may be a factor for some vehicle owners not knowing about a recall or getting it fixed. Light trucks and SUVs – vehicles often used by businesses and busy families – are the ones most likely to have unfixed recalls.

www.newyorkiada.org

May/June 2018

Recently in Vegas, Carfax checked cars for open recalls at a local DMV. They spoke to several people whose vehicles had open recalls they knew nothing about until Carfax showed them. “Carfax told me the car had an open recall. I found out that it was the driver’s airbag,” said consumer Robert V. in Redmond, Ore. “After purchasing the car it went to the local BMW dealer where it was replaced in less than an hour. I was treated royally, chatted about the car and soon was on my way. I did appreciate knowing beforehand.” Dealers can inform online shoppers about open recalls by listing their vehicles for sale on Carfax Used Car Listings. Every vehicle listed for sale on carfax.com includes the Carfax Report dealers run for each vehicle, which includes open recall information reported to Carfax and helps consumers buy with confidence. Editor’s note: Recall statistics for your area are available upon request. For more information, visit www.carfaxonline.com or call 888-788-7715.

THE NEW YORK DRIVING FORCE

INSIDE

2018 MEMBER DISCOUNT BOOK

03.................................57 Million Vehicles with Open Recalls 05.................................................NIADA Convention Preview 12.............................................................................Collections

WHAT’S NEW

NIADA NABD Convention & Expo Register Now! Registration is open for the NIADA/NABD Convention & Expo, June 18-21 in Orlando! With the forces of NIADA and NABD combined, it promises to be the most robust convention yet. Learn more and register today at www.niadaconvention.com.

ADVERTISERS INDEX

Auto Auction of New England ........................................ IFC Alliance Inspection Management........................................7 Manheim.............................................................................11 NextGear Capital............................................................... 12 ProGuard Warranty.............................................8,9,10,13,14 Protective ......................................................................... IBC vAuto .................................................................. Back Cover

2 0 1 6 M E M B E R D I S C O U N T B O OK $5,000 IN AUCTION DISCOUNTS

2 0 1 6 M E M B E R D I S C OU N T B OO K $50 BUY FEE ONE PER MONTH

$5,000 IN AUCTION DISCOUNTS Long IsLand

Long IsLand

new Jersey

syracuse

BSC AMERICA, BEL AIR, MD – $50 OFF REGISTRATION BLOOMBERG AUTO AUCTION – (TWO) $50 OFF BUY FEE (TWO) $50 OFF SELL FEE

BSC AMERICA, BEL AIR, MD – $50 OFF REGISTRATION BUFFALO AUTO AUCTION – $100 OFF BUY FEE / $100 OFF SELL FEE

GARDEN SP T Auto Auction

YO UR PR OF SP IT OT

GARDEN SPOT AUTO AUCTION – (FIVE) $50 OFF BUY FEE BUFFALO AUTO AUCTION – $100 OFF BUY FEE / $100 OFF SELL FEE

For information on how to become a member of NYIADA, please contact Paula Frendel at 855.694.2324 or nyiada.pfrendel@gmail.com

GARDEN SP T Auto Auction

YO UR PR OF SP IT OT

MANHEIM ALBANY – $100 OFF BUY/$50 $100 SELL GARDEN SPOT AUTO AUCTION – (FIVE) OFF BUY FEE

NIADA HEADQUARTERS

STATE MAGAZINE MGR./SALES

syracuse

(TWO) $100 OFF BUY FEE / (TWO) $100 OFF SELL FEE – TOTAL $400 FROM EACH AUCTION = TOTAL $1,600 BLOOMBERG AUTO AUCTION – (TWO) $50 OFF BUY FEE (TWO) $50 OFF SELL FEE

OFFICE

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. The New York Driving Force is published bimonthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the authors and do not necessarily represent the views of New York Driving Force or NIADA. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2018 by NIADA Services, Inc.

new Jersey

(TWO) $100 OFF BUY FEE / (TWO) $100 OFF SELL FEE – TOTAL $400 FROM EACH AUCTION = TOTAL $1,600 $50 BUY FEE ONE PER MONTH

ALBANY – $100 OFFPOST BUY/ SALE $100 INSPECTION SELL MANHEIM MANHEIM NEW JERSEY – 1 FREE 7-DAY

MANHEIMNEWBURGH, NEW JERSEYNEW – 1 FREE INSPECTION MANHEIM YORK 7-DAY – $100POST OFF SALE BUY/ $50 SELL

MANHEIM NEWBURGH, NEW YORK – $100 OFF BUY/ $50 SELL MANHEIM NEW YORK SKYLINE – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL

MANHEIM MANHEIM NEW YORKPENNSYLVANIA SKYLINE – (TWO) $50 OFF BUY / (TWO) – $100 BUY/ $100 SELL $50 OFF SELL

MANHEIM PENNSYLVANIA $100 BUY/ $100$50 SELL MANHEIM PHILADELPHIA – (TWO) $50 –OFF BUY / (TWO) OFF SELL

Troy Graff • troy@niada.com EDITORS

Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com

MANHEIM PHILADELPHIA – (TWO) $50 OFF BUY / (TWO) $50 OFF SELL ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35)

MAGAZINE LAYOUT

Christy Haynes • christy@niada.com PRINTING

Nieman Printing

ROCHESTER CENTRAL AUTO AUCTION – $200 OFF BUY FEE; $200 OFF SELL FEE; ENTRY FEE ($35) ROCHESTER SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT

ROCHESTER SYRACUSE AUTO AUCTION – ONE FREE BUY / ONE FREE SELL NO LIMIT STATE LINE AUTO AUCTION – 12 MONTHLY COUPONS FOR REGISTRATION

$5,000 in Auction Discounts! Buy and Sell Fees...SAME AS CASH! inMONTHLY Vendor Coupons! STATEPLUS...$4,000 LINE AUTO AUCTION – 12 COUPONS FOR REGISTRATION $5,000 in Auction Discounts! Buy and Sell Fees...SAME AS CASH! PLUS...$4,000 in Vendor Coupons!

For complete membership information please visit www.newyorkiada.org.

THE NEW YORK DRIVING FORCE

May/June 2018

www.newyorkiada.org

ASSOCIATION NEWS | BY ANDY FRIEDLANDER

For the past several years, NIADA has worked hard to top itself when it comes to the annual NIADA Convention and Expo.

While it hasn’t been easy, that goal has been met. Attendance has risen for each of the past five conventions, with the past two setting alltime records in that category. The 2017 event had more attendees, more exhibitors and more education sessions on more topics than any in the convention’s 71-year history. Clearing such a high bar takes extreme measures. And so, NIADA has gone mega. That’s mega as in MegaConference – for the first time ever, a showcase for the combined resources of NIADA and the National Alliance of Buy Here-Pay Here Dealers, which was acquired by NIADA in December. The acquisition was the impetus for merging NABD’s traditional May conference into NIADA’s Convention in June, which will create what is expected to be the largest event in the used car industry, one that will provide unmatched resources for independent dealers and allow you to Rewrite the Playbook for success. That event – the NIADANABD Mega-Conference, officially known as the 72nd NIADA Convention and Expo – is coming up June 18-21. After nine years in Las Vegas, it’s moving for 2018 to a brandnew venue, the luxurious Rosen Shingle Creek Resort in Orlando, Fla. So what exactly is a MegaConference? It is some 60 education sessions, the most ever for an NIADA event, covering every aspect of independent dealership operations in five distinct educational tracks – Retail, BHPH, Legal and Regulatory, CPO and an allnew Digital Marketing track. It is sessions exploring new developments and best practices in inventory acquisition, sales, marketing and advertising, F&I, collections, technology, social

NIADA GOES MEGA NABD Joins NIADA Convention and Expo to Create the Used Car Industry’s Largest Event – the Mega-Conference

media, cybersecurity and so much more, led by the industry’s best and brightest experts – including NIADA’s own Justin Osburn. It is the top-of-the-line BHPH-specific training attendees of NABD conferences have come to expect over the years, featuring NABD founders Ken Shilson and Ingram Walters, NIADA BHPH gurus Chuck Bonanno, David Brotherton and Mark Dubois, and many more of the Buy Here-Pay Here world’s top minds. It is Wednesday afternoon’s Financing Fair, a chance for you to meet one-on-one with a variety of finance companies to discuss your specific problems – and to find solutions. It is the new Marketplace Keynote Series, offering the insights of some of the industry’s most prominent leaders, thinkers, innovators

and disruptors about where the used car market is now and where it’s headed, as well as cutting-edge ideas on how you can take advantage of those conditions. It is by far the largest Expo Hall in NIADA Convention history, featuring more than 210 exhibitors offering the latest state-of-the-art products and services to help keep you ahead of the pack in today’s ultra-competitive used vehicle market. It is the boundless enthusiasm of keynote speaker Dick Vitale, appearing courtesy of CARFAX. Known to basketball fans for his energy, wit and colorful descriptions of players and plays, Dickie V’s entertaining message of overcoming life’s challenges and obstacles is nothing short of “awesome, baby!” He’ll speak Tuesday afternoon and will meet attendees at the CARFAX

www.newyorkiada.org

May/June 2018

booth during the Expo Hall’s Grand Opening Reception that evening. And, of course, it is the traditions that have become an essential part of the NIADA Convention and Expo, beginning with the popular Cigars and Martinis welcome reception Monday night, featuring a tailgate party theme. We’ll honor the industry’s best at Wednesday night’s National Leadership Awards banquet – including Crystal Eagle membership awards, the CPO Dealer of the Year the NABD BHPH Hall of Fame’s latest inductee and the NIADA & Cox Automotive Community Service Award – leading up to the climactic announcement of the National Quality Dealer of the Year on Thursday night. And we’ll close the event in style with a rocking After Party featuring live music. Your chance to go mega by attending the NIADA-NABD Mega-Conference is here now. You can register online at www.niadaconvention.com, and if you do it by May 18, you can get the Early Bird rate of $549. And don’t miss out on group discount opportunities for additional attendees from your dealership. Due to the immense interest in this event, NIADA is offering two options for accommodations. Because the Rosen Shingle Creek is almost sold out, NIADA has secured a block of rooms at the nearby Rosen Centre as well – with transportation to and from the Convention venue provided. But hurry – the deadline for reservations is May 18. For reservations at the Rosen Shingle Creek, call 1-866-996-6338 and use the group code GRP2018NIADA. For the Rosen Centre, call 1-800-204-7234 and use group code GRPNIADA2018. Don’t miss out on this great opportunity. Register and make your travel plans now. For more information about the 2018 NIADA Convention and Expo, visit www.niadaconvention.com or www.bhphinfo.com, or call 800-682-3837.

THE NEW YORK DRIVING FORCE

INDUSTRY PERSPECTIVE | BY KENNY ATCHESON

INSIGHTS FROM LEADING SMALL BUSINESS GURU Interview with Michael E. Gerber

Thought-provoking insights found in this article were taken from the transcript of an interview with Michael E. Gerber, the man Inc. magazine calls “the world’s #1 small business guru.” The interview was conducted by Kenny Atcheson of Dealer Profit Pros.

Mr. Gerber is the bestselling author of 32-plus “e-myth” books. His volumes have been featured in New York Times, Wall Street Journal, Business Week, Inc. magazine, FORTUNE, Forbes, and Wire. The originator of the small business coaching industry, Gerber founded the Michael Thomas Corporation, The E-Myth Academy, E-Myth Worldwide, and Michael E. Gerber Companies. He has served more than 100,000 small business clients in 145 countries. To read the entire interview, download the transcript free of charge from www. DealerProfitPros.com/ interview. Kenny: In your book E-Myth, you revealed we are all three people in one: entrepreneur, manager, and technician. Please provide a brief explanation of each of these types. Michael: The technician is the producer, the one who goes to work, doing it, doing it, busy, busy, busy, busy… Every single one of us is familiar with that role we play. Every small business is started by a technician suffering from an

THE NEW YORK DRIVING FORCE

entrepreneurial seizure who goes to work in their company doing everything that has to be done, and rarely escapes from the tragedy of being so seduced by the work of the business. The manager is rarely experienced by many of us. The manager is the one who controls all of the aspects of work that need to be done to produce the result the entrepreneur envisions at the outset of a company. So the manager is absolutely essential and is the bridge between the technician and the entrepreneur. The entrepreneur is what I think of as the creator. The entrepreneur is the imagineer as Walt Disney called Disney imagineering. The entrepreneur is the one who envisions an outcome – a result – that significantly grows beyond the ordinary to truly pursue the extraordinary. Entrepreneurs like Steve Jobs or the Google boys, or anyone and everyone who’s ever taken on some great result they are absolutely determined to produce – the great result I call a dream. And then absolutely go to work on their companies to make that dream a reality. Of course there’s a process involved, whether it be a technician’s process, a manager’s process, or the entrepreneur’s process. But it’s truly critical that one understands those three processes if anything beyond the ordinary is ever going to be created, let alone sustained. Kenny: In your book E-Myth Revisited, you expose a realization that some business owners come to: “You don’t own a business, you own a job.” Can you explain what you mean by that?

May/June 2018

www.newyorkiada.org

Michael: What I mean is that the business is you. A chiropractor opens up his or her chiropractic practice and immediately goes to work delivering his or her chiropractic services. Well, if the chiropractor weren’t there, there wouldn’t be a company or practice. In short, the company depends upon that chiropractor. Now unfortunately, when a chiropractor decides to go out on his or her own, he doesn’t even imagine anything other than delivering chiropractic services. What he or she doesn’t understand is that chiropractor services aren’t sufficient in themselves to grow a great, sustainable chiropractic enterprise. In short, they restrict the owner to what I’ve called earlier “doing it, doing it, doing it, busy, busy, busy, busy.” In short, they are what they think of as a business. They don’t own one. And it’s tragic, because it’s also true of the vast majority of small companies started out by a technician suffering from an entrepreneurial seizure who goes to work again doing it, doing it, doing it, busy, busy, busy, busy and can never liberate themselves from the tyranny of routine that most small companies end up becoming. Kenny: That makes a lot of sense. You mention systems. When overhauling a business to be systems-driven, a business that already has customers, employees, and processes – not one that’s brand new – where do you start to get the most out of your efforts? And how do you speed up that process? Michael: First of all, you start by understanding the problem. You understand the problem is not that you don’t have good people, not that you don’t know enough about business, not about this or not about that, you start with the point of view. The point of view is absolutely critical. The paradigm we’ve created that has had such a profoundly positive impact on literally millions of businesses

worldwide, that paradigm must first be internalized and taken in and understood. You can’t start the process of going to work on your company until you understand the mindset that’s critical to a great, growing company to creating a company that can literally scale and be replicated in the hands of relatively ordinary people because it’s blessed with extraordinary systems. So that’s the first step. Second step is to understand you literally can find it impossible to fix what I think of as a broken business. In short, there is no process to go in and fix a small business that isn’t built in the right modality at the very beginning of it. So you have to approach that in a different way than is commonly thought. I call it a two-co process. Two-co consists of two very specific ventures. The first of which is OLDCO. OLDCO is the company I’ve got. OLDCO is what we do every day. On the other hand, there’s another company, waiting in the wings to be approached in this intelligent manner – the manner I’ve described to you of going to work on it and not just in it – and I call that company NEWCO. So you’ve got OLDCO on the left, NEWCO on the right. You go to work on OLDCO for one reason and one reason only, and that is to produce sustainability. So we’re not going to fix OLDCO to become NEWCO. We’re going to fix OLDCO to simply work better than it does. And we do that by approaching the three essential systems that comprise OLDCO – lead generation, lead conversion, and client fulfillment. Those three systems make up what I think of as the franchise prototype. Those are the three essential ingredients to every company. And when we go to work on OLDCO, we’re going to perfect the systems called lead generation, lead conversion, and client fulfillment – all, of course, to drive sustainability. We don’t want OLDCO to break up while we try to fix it. We simply want to approach

OLDCO in a simple-minded, very direct, and impassioned way, to get it to work so it can deliver sustainable results consistently, liberating it from the owners doing it, doing it, doing it, doing it so that the company itself can be managed to the degree it must be managed – systematically – to produce a very specific outcome the founder of that company is determined to produce. So that’s for sustainability. NEWCO is for growth. So the growth we’re going to create is by going to work on NEWCO. We go to work on NEWCO with what I call a blank piece of paper and beginner’s mind – a blank piece of paper and beginner’s mind to secure our dream, our vision, our purpose, and our mission. We have to see the company as a product to produce an outcome untoward, unrealizable by going to work simply by trying to make OLDCO better at what it does. We’re creating NEWCO to do something nobody else has ever done before.

So NEWCO is built on a dream, a vision, a purpose, and a mission. The dream is a great result. The vision is to invent the business model that is absolutely essential in order to produce that great result. The purpose is to produce an outcome on behalf of our most important customer – in our case, small business owners – for whom our dream was to transform the state of small business worldwide. When I founded my companies way back in 1977, our vision was to invent the McDonald’s of small business consulting – to build a small business consulting firm and enable it to scale exponentially beyond belief. Our purpose is to make sure every small business owner can be as successful as a McDonald’s franchisee. Our mission was to invent the business development system that we could then apply to every single small business on the planet, to every single small business owner who’s called by our paradigm, by our point of view, by our

vision, by our dream, by our purpose, by our mission, and into the hands of ordinary people, consistently, actively, beautifully, and persistently, in a way that is rarely ever seen. So you understand, that’s how you apply this. Now when you asked, “How do you rush it?” I saw, “You don’t rush it. You can’t rush it. It’s impossible to rush it.” And the minute you try to rush it, you create something completely other than what I’m describing. We envision a company that is operating in a world-class way to produce world-class results beyond belief. Commentary from Kenny Atcheson Consulting with a number of dealers nationwide led me to realize Michael E. Gerber’s teachings would be valuable to dealers. Two major points Mr. Gerber emphasized: 1. Entrepreneurs should spend more time being an entrepreneur, working on the business rather than in the business.

www.newyorkiada.org

2. T he business should be systems-driven. Plug people into a successful system and they are more likely to succeed, which makes the business more likely to succeed. I had already read E-Myth, so in March 2018 when I saw that Mr. Gerber launched RadicalU, I reached out to interview him and ask about it. He directed dealers to www.Radicalu.com/pros and concluded our interview with the following: “Everyone, hear me. We are determined literally to transform the state of economic development worldwide by transforming the state of small business worldwide. It’s a dream that I’ve been living for over 40 years, and we’ve now come to the place where we’re realizing it beyond anything we have ever done – by making it available to every single person you know.” Kenny Atcheson is the founder of Dealer Profit Pros and author of Marketing Battleground: How to Deploy Under-the-Radar Strategies to Explode Your Profits. For more information visit www.DealerProfitPros.com.

May/June 2018

THE NEW YORK DRIVING FORCE

The Limongelli family, from left to right: Dominic, Dean, Dan Jr., Joe and Dan Sr.

THE NEW YORK DRIVING FORCE

May/June 2018

www.newyorkiada.org

PAID ADVERTORIAL

A History of Innovation Propels ProGuard Warranty to Success

By Lynn Sherwood, Contributing Writer

AVOCA, Pa. — In a relatively short period of time, ProGuard Warranty has made quite a name for itself. It should come as no surprise since the people behind the company have a long history in the automotive industry. Today, the entire sales force and leadership team is gathered for three intensive days of training and to celebrate the best year yet for the national vehicle service contract provider. While ProGuard is only going on its sixth year, the Limongelli family has roots that go back nearly seventy years. Dating back to the 1950’s, Joseph and his three brothers, Jim, Tony, and Mal, owned the successful Limongelli Brothers Studebaker franchise until the automaker folded in the late sixties. After Joseph’s son Daniel (Dan Sr.) returned from serving in Vietnam, the two of them opened their own independent dealership in 1971. Jo-Dan Motors became a family business with multiple generations working there and learning all aspects of a dealership. “It was a great experience and we gained a lifetime appreciation for automobiles,” recalled Dan Sr.’s youngest son, Dominic. Fast forward to the 90’s when there were many uninsured service contract companies going out of business, leaving large numbers of dealers holding claims. Jo-Dan was directly impacted by one of these companies and Dan Sr. described how that affected their future. “My brother Joseph (Joe) said that

none of the existing warranty companies really understood the dealer and what was really needed was a provider that would better serve the customer and their transportation needs. It was Joe who came up with the idea to start our own warranty company.” The two began researching the market and in 1995 founded Guardian Warranty, which grew into one of the most successful vehicle service contract providers in the country. In 2006 the partners agreed to sell the company and Dominic (Dom) was the sole family member to stay on with what became GWC Warranty. During his 12 years with the company, he worked in various sales roles, turning one of the most problematic regions into one of their more profitable territories. Reflecting on this period in his life, Dom said, “I was lucky enough that my family had surrounded me with many great mentors along the way who taught me the importance of delivering on your word.” While successful, Dom was tired of being on the road away from his family and longed for the personal connection that only a family business can deliver. Over the years, many dealers had approached various Limongelli family members to suggest they re-enter the industry with their own new company and Dominic now felt the time was right to make a change. In 2012 the family re-entered the industry as ProGuard Warranty continued on page 10

www.newyorkiada.org

May/June 2018

THE NEW YORK DRIVING FORCE

continued from page 9

and set its sights on becoming the premier vehicle service contract provider. With his understanding of sales and the corporate world, Dom was the natural choice for President while Joe became Chief Executive Officer and Dan Sr. was appointed Treasurer. Dan Sr.’s sons Danny (Dan Jr.) and Dean (Dino) were named board members, while also continuing to run Jo-Dan Motors.

The Complete Package to Serve Every Need

While the landscape may have changed, their understanding of the customer has not. The ProGuard team surrounded itself with talented people and set about to provide trend-setting products, backed up with best-in-class customer service. “We want to be able to provide a product for every budget and circumstance to ensure every customer can leave the lot protected against unforeseen expenses,” said Dom. Using their understanding of the new and used vehicle retail marketplace, ProGuard has developed a wide variety of protection plans that cover 98% of the vehicles on the road today. “Our years in the business have taught us what components on a vehicle are likely to fail and we created products that cover those parts to give the consumer peace of mind and protect a dealer’s reputation,” explained Dom. Products range from a limited powertrain all the way to an exclusionary policy that mimics the manufacturer’s warranty. They also offer GAP policies, reinsurance and a unique program specifically designed for commercial vehicles.

“Our goal is to be transparent, flexible and accessible, doing the best job we can with each and every business partner and their customers so that they continue to do business with us.” A CPO program was introduced in 2016 that provides customers with “more than just a sticker.” According to Dom, dealers are handpicked and required to perform an actual multi-point certification inspection that is verified by the mechanic and the customer. In addition, ProGuard CPO vehicles come with a vehicle service contract that offers extensive protection beyond what many competitors offer. Having dealers in the family has given ProGuard great insight into what consumers want and at the very top of the list is transparency. “It starts with the contract, which my

father and uncle insisted be written clearly after experiencing so many that were ambiguous and gave providers the ability to avoid paying claims,” he explained. “If the customer has a problem, we work hard to get claims approved and repairs are done as quickly as possible so they can get back on the road without a hassle.” To help assist the process, ProGuard has established a nationwide system of In-Network service facilities consisting of independent, franchise and fleet account repair facilities that have been vetted and approved to ensure highest quality standards. And to provide complete confidence in their ability to deliver, the company’s contracts are fully insured by A-rated insurance companies that A.M. Best considers to be excellent in financial strength. “This is important to dealers, who want to know that we are going to be there. There are many uninsured companies popping up that will be happy to take your money, but there is no guarantee that they’ll be around when you need them,” said Dom. “This insurance lets our dealers know that we’re here for the long run and they won’t be left holding useless contracts.” continued on page 13

THE NEW YORK DRIVING FORCE

May/June 2018

www.newyorkiada.org

F&I MATTERS | BY SCOTT BATES, CPA

M RE 90

MOBILE BUSINESS

TOOLS AND TECHNOLOGY TO HELP ME MANAGE BUSINESS MY WAY* BILLY GRAHAM GRAHAM AUTO SALES LOGANVILLE, GA

Smart. Simple. Fast. Learn how Billy gets MORE at nextgearcapital.com

*This testimonial was received via interview, audio and/or video submission. This testimonial is based on this dealer’s individual experiences, reflecting real life experiences of a NextGear Capital dealer. NextGear Capital does not claim they are typical results that dealers generally will achieve. This dealer’s experiences may not be indicative of future performance or success of any other dealers. Some of the testimonial has been shortened so the whole message is not displayed due to length and/or relevance.

THE NEW YORK DRIVING FORCE

May/June 2018

COLLECTIONS The Key is Relationship Collections best practices are designed to increase the number of payments received on every contract – increasing cash flow and potentially increasing sales from referrals. A shut-off box on a car is no substitute for good collections practices. You are also discouraged from making field calls, as it can violate CFPB rules – not to mention be potentially dangerous. The key is to make your payment a top priority in the mind of the customer – specifically because customers trust and perceive your dealership is willing to work with them to find a solution. Nothing can really motivate a customer to pay for a car except a strong relationship. This approach is harder than billing and repossession. It takes a different mindset among your collections and service staff, but it can be efficient if you establish a positive rapport and understanding from the beginning of the transaction. Your process and paperwork should be consistent and clean every time, no matter who is closing the deal. Emphasize that you expect payments on or before the agreed due dates. If you can, set up an electronic funds transfer with customers around their payroll time. You can’t require it, but you can make it attractive by offering a discount. Outline the process of what will happen if they can’t pay on time. If the car malfunctions or if they need to refigure the payment terms due to a change in circumstances, talk through those situations, too. Establish a clear process for communicating, which in some cases may be opt-in text messaging. You can now use SMS for automatic payment reminders, service reminders and late payment notices. In any and every case, keep the lines of communication open. Follow up with a check-in call. Congratulate customers on their purchase www.newyorkiada.org

and ask them if they have any questions. Make it clear your team is there to help so their first contact with you is positive, rather than a delinquency call. Provide clear contact information for customers to reach their “account rep.” A strong closing process with full disclosure followed by a welcome checkin call reduces the need to chase down payments, and also increases the number of payments made. This won’t happen on every transaction. There will still be cases of repossession, but dealers can reduce the chances. A full inventory of cars is not what you want. Deal with service issues quickly. One of the biggest reasons customers stop making payments is that the car has a problem. Make it clear during the closing process that any issues with the car will be handled, whether through a limited warranty or service call. Depending on the issue and timing, work out how the customer will participate in paying for the service. Calculate the cost of the repair against the benefit of more monthly payments, and often the benefit is on the side of more monthly payments and a happy customer willing to refer your dealership to friends and family. Keep in mind that your inventory is not your biggest asset – your portfolio is the golden egg. Accounts need to be worked every day by collections. Don’t just wait for the phone to ring. A 30-day past due notice equals four to six missed payments. If you have 100 accounts, a good rule of thumb is to have four collections staff and one part-timer in the wings to pitch in when necessary. Scott Bates, CPA, is a partner in the audit practice and leads Cornwell Jackson’s Business Services Department, which includes a dedicated team for outsourced accounting, bookkeeping and payroll services. Contact Scott at scott. bates@cornwelljackson.com or 972-202-8000.

continued from page 10

ProGuard has a reputation for being innovative, constantly rolling out enhancements to increase profitability for their dealer partners. Explains Dom, “Competitors with shareholders to answer to are having to increase their rates while we are able to find new ways to put more money back into the dealer’s pocket.” Their Dealer Incentive Programs, which include commission and profit sharing, typically exceed what other vendors in the space offer. Last year the company reduced pricing in certain risk areas, dropped required charges across the board and introduced one of the most aggressive late model pricing on the market to give dealers an additional edge with the flood of off-lease and newer lower mileage vehicles entering the market. The latest offering, which Dominic and his technical and marketing team worked on for almost a full year to develop, is designed to help dealers cover the high cost of doing business.

“Market conditions are constantly challenging dealer profitability, so we came up with a way to reduce the dealer’s cost of business to make their lives easier.” Launched in January, ProGuard MilesSM is the only program of its kind in the industry. Similar to credit card Membership Rewards or airline Frequent Flyer programs, dealers earn miles with ProGuard contracts sold that can be redeemed for products

used every day to operate their dealership. The Miles catalog contains hundreds of products and services, including tire shines, license plate holders, night drop boxes and educational courses. Joe Brown, owner of Platinum Motors in Ansonia, Connecticut is accustomed to ProGuard introducing new ideas but thinks this time they’ve knocked it out of the park. “This revolutionary rewards program will decrease our day to day operational costs without any rate increases or charges incurred. It’s simply another benefit of partnering with an industry-leading company.” Always looking ahead, ProGuard now offers the benefits of the Miles Program to state Independent Automobile Dealer Associations (IADAs), offering members the ability to pay dues with earned miles. As a strong supporter of the association, Dom thinks it’s a natural extension of the program. “We are members of every state IADA where we conduct business and regularly sponsor their annual conventions. My father was active in the Association since day one, serving over 20 years first as VP and then as President of PIADA. My brother Danny carries on the tradition and is an active board member in MARIADA. We’ve experienced first hand what they can do to help the dealer, both individually and through their lobbying work to have sound legal and regulatory oversight in our industry. We know the value these associations carry in improving the image of today’s automotive retailer and are willing to help in any way we can.”

Core Values Drive Processes and Policies

As any business owner knows, you can have the greatest product offering but if you don’t deliver great service, they are not coming back. ProGuard strives to provide the best customer service in the industry and it begins with their dealer continued on page 14

www.newyorkiada.org

May/June 2018

THE NEW YORK DRIVING FORCE

continued from page 13

consultants, who are employed by and sell ProGuard products exclusively. Our sales force is dedicated to serving their dealers best interests and does so in multiple ways,” said Dom. “We have marketing tools that are written for the consumer, allowing dealers to walk them through a comparison to easily make a decision. We have fewer required charges, which simplifies the sales process, as does our user-friendly online portal that allows dealers to turn around contracts quickly and without errors. And because we know how important it is to keep dealers informed, our consultants stop by frequently to review claims and revenue status to continuously enhance profitability.”

“We are trained to become trusted partners and the first step in doing so is to develop an understanding of each dealer’s business. With that, I can customize the product selection to best serve their particular customer base and needs,” stated Kevin. “When I come up against a competitor, I know that our coverage is better and can prove it by comparing them to our plans. When you couple that with our service and the new ideas they keep rolling out, it’s the complete package.”

Accessibility and flexibility are cornerstones of the organization, where dealers are encouraged to call at any time. “Our dealers can always get one of the principals on the phone,” stated Dom, who went on to say that they do not have cookie-cutter responses. “We treat every situation as unique and will work to solve a problem to our mutual benefit. Dealers know that when they come to us for help, we will take care of them.” This treatment extends to consumers as well because ProGuard knows that anything the service contract provider does in reference to a customer claim reflects upon the reputation of the dealership. When a claim comes in it is immediately assigned to an adjuster, who works with the repair shop and often has an approval the same day. Customer calls are returned within the hour and are recorded and time stamped so that if there is ever a dispute, the communications flow can be reviewed and addressed. ProGuard takes its reputation very seriously and works hard to maintain customer satisfaction. “If you give the consumer a negative experience, that dealer loses repeat and referral business and you no longer have that dealer as a client,” Dominic said. “To prevent that, we do everything we can to make sure that every experience is good for everyone involved.” The company is rated A+ by the Better Business Bureau, conducts surveys after every claim and constantly monitors reviews to continue to improve service. It’s evidently paying off as an unprecedented number of new dealers have signed on with ProGuard in the last year. “We are getting so many new dealers because they have heard from others how well we treat our partners. Our strong ratings are evidence that customers recognize and appreciate what we do to make their lives easier.” All of this brings us back to the annual sales meeting where it is evident that what ProGuard is doing is working. The rapidly growing company is already entrenched in the MidAtlantic and Eastern regions and has begun moving into the Southern states. The sales force continues to expand and enter new markets, with the West next on their horizon. One of those new to the company is Kevin, who has been with ProGuard less than a year and is already being recognized as a Top Producer.

THE NEW YORK DRIVING FORCE

May/June 2018

www.newyorkiada.org

As performance awards are given out, Dom delivers the state of the union address, explaining to his team that “The vehicle service contract industry is a crowded marketplace and there are some major competitors out there vying to be at the top.” So what do they consider the key to their success? He summed it up as, “Listening to our customers, keeping a pulse on the market and staying ahead of trends. We are not a large conglomerate, so we can quickly react and adjust to help our dealers enhance profitability. Our customers have come to expect innovation from us and we will continue to serve as the trendsetter in this industry.” At the end of the day, Dom is pleased. The vision that his father and uncle had so long ago has become something far grander than they could have ever imagined yet has remained true to the core values the company was built on. Dan Sr. agrees and states with pride that, “We talk a lot about the ProGuard family and it’s a combination of everyone’s efforts that have gotten us to where we are today. Our family has been involved in some form of this business for nearly seventy years and I fully expect my grandkids and their kids to continue the tradition of providing a product that offers great value to both consumers and dealers.”