OR - 05/17 by NIADA

DEALER NEWS

S TAT E A F F I L I AT E

R E P R E S E N T I N G A L L A U T O, T R U C K , TRAILER, RV AND POWER SPORT DE ALERS OF OREGON

THE OFFICIAL MAGA ZINE OF OREGON IADA M AY 2 0 17

RETHINK HOW YOU SOURCE AUCTION VEHICLES PAGE 8

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THE DATE FOR OIADA CONVENTION! OCTOBER 21 HOLIDAY INN WILSONVILLE

ASSOCIATION NEWS

WHAT’S GOING ON IN OREGON Industry Update

Changes at DMV are Good for OIADA After 31 years of service to the citizens of Oregon, investigator Barbara Caine retired from DMV on January 31. Barbara began her DMV career in field services in 1985. In 1991, she took a developmental position as an investigator in the business regulation section in Portland, an assignment that became permanent in 1992. Barbara has enjoyed the professional relationships she’s been able to cultivate with vehicle dealers and will miss those interactions. Her knowledge and understanding of the industry will be greatly missed by DMV. However, Barbara Caine has not faded into the sunset. She has taken a new role in the auto industry as the new title and registration class instructor for OIADA. We at OIADA couldn’t be more pleased, and feel pretty lucky, to have someone like Barbara with her vast industry knowledge on board with OIADA. We hope to have Barbara teaching classes at least once a month, and maybe more. In April we had two classes – one for the Portland area at Cross Point Auto Auction and one in Eugene at ADESA NW. Cost for these classes is $95 for members and $135 for non-members. Contact OIADA for future dates and locations: 503-3626839. What Happens When the Buyer Changes Mid-Stream on Submission of Documents? Have you ever had this situation? You sell a car, and the customer wants you to do the title and registration transfer for them. You collect a document preparation fee and get all the documents ready, but before you submit them to DMV, the customer changes his mind and asks for the title so he can take it to DMV on his own. As a dealer who values customer referrals, you want to keep the customer happy and honor the request, so you give them the title and paperwork you prepared for DMV. After the customer leaves, the question comes to mind: Can you keep the document preparation fee, or do you need to refund it to the customer? In the 2015 legislative session, a change was made to ORS 822.043 that answers this question: (7) If the purchaser of a vehicle pays a document processing fee, the vehicle dealer shall prepare and submit all documents to complete the transaction as permitted by law. Even if you’ve spent the time and energy of preparing all the documents needed to transfer title and registration, you are not allowed to keep the document preparation fee if you are giving the paperwork to the customer instead of submitting it to DMV on their

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PRODUCTS & SERVICES BY USED CAR NEWS

behalf. If you are not submitting the paperwork to DMV or to another state’s licensing agency, you are required to refund the document preparation fee to the customer within five calendar days. You are also required to get any temporary registration permit you issued back, void it, and put it back in the book. Then you can sell them a trip permit. To Be or Not to Be a Wholesaler, Could Be in the Name Only. Oregon DMV program services business regulation and fraud prevention manager Judith Ingram Moore asked OIADA to remind you of the DOJ rulings: Using the word “wholesale” or “wholesaler” in your company name is misleading to the public if you are a retail dealer. Dealers who have had their dealership registered with the word in their name prior to January 2, 2008, may keep it, but must convey in all signage and advertising that the dealership is retail. Please read the official commentary below: Misleading Business Names – Any words used in a company name or advertisement which would mislead the public either directly or by implication regarding the nature or affiliation of a dealer or broker’s business. Use of the term “wholesale” or “wholesaler” shall not be used in a company name affiliated with motor vehicle sales or leases after January 2, 2008, unless the person actually owns and operates a motor vehicle business that only sells vehicles wholesale. Any Oregon dealer or broker that used the term “wholesale” or “wholesaler” in its business name prior to January 2, 2008, may continue to use that word, except it must clearly and conspicuously state in any advertisement or display of its name at its business location words that convey to the public that it is a retail, not wholesale, motor vehicle business. Use of the term “liquidator” shall not be used in a company name to sell or advertise motor vehicles, unless the company is solely in the business of liquidating assets of persons going out of business and in fact the sale is a going out of business sale. This rule ensures words are not incorporated into a business name that would tend to mislead a consumer as to the affiliation or nature of a business, the source of its goods or the type of business being conducted. Examples, other than wholesale, include: “factory” or “manufacturer,” which should not be used in a company name, unless the advertiser actually owns and operates or directly and absolutely controls the manufacturing facility that produces the advertised products.

BLACK BOOK INTRODUCES USED VEHICLE RETENTION INDEX Designed for More Accurate Report of Market

Black Book has unveiled the Black Book Used Vehicle Retention Index. The index is designed to offer an unbiased, accurate view of the strength of used wholesale market values. The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on twoto six-year-old used vehicles, as a percent of the original typically equipped MSRP. The index is weighted based on used vehicle registration volume and adjusted for seasonality, vehicle age, mileage, condition, segment mix and inflation. Aggregated from daily vehicle value updates, and captured throughout hundreds of wholesale physical and online auto auctions across the country, the Black Book Used Vehicle Retention Index represents data across all regions of the U.S. The index is based on a list of vehicles included in the Black Book wholesale database, and includes no bias toward any brand, auction or region, ensuring a more accurate reporting of the used vehicle market.

May 2017 / OIADA

INSIDE

03.................................................. What’s Going on in Oregon 06.................5 Facts You Didn’t Know About Cost of Repairs 06..........................Making the Most of Location-Based Data 08.........................Rethink How You Source Auction Vehicles 10..............................................High Supply, Higher Demands 14............. When Exceptions Overtake the Showroom Rules

WHAT’S NEW

Tire Safety Week Dates Announced

The dates for National Tire Safety Week 2017 are May 28-June 3. An initiative of the Rubber Manufacturers Association, the event promotes tire safety among consumers. Auto dealers join the tire and auto industry to encourage drivers to “be tire smart.” For more information, or to request print materials, visit www.betiresmart.org.

ADVERTISER’S INDEX

ADESA..................................................................................... 7 BMW Group Direct.................................................................. 5 CarMax Auctions..................................................................... 9 DAA Northwest/Seattle.......................................................IFC Manheim................................................................................ 11 Manheim Portland.................................................. Back Cover NextGear Capital..................................................................... 8 VAuto................................................................................... IBC

OFFICE

Oregon Independent Auto Dealers Association 9150 SW Pioneer Ct Ste. H Wilsonville, OR 97070 800-447-0302

NIADA HEADQUARTERS NATIONAL INDEPENDENT AUTOMOBILE

DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 OIADA Dealer News is published monthly 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 6006-5203. The statements and opinions expressed herein are those of the authors and do not necessarily represent the views of OIADA Dealer News or NIADA. Likewise, the appearance of advertisers, or their identification as members of NIADA , does not constitute an endorsement of the products or services featured. Copyright © 2017 by NIADA Services, Inc. Inc.

STATE MAGAZINE MGR./SALES

Troy Graff • troy@niada.com EDITORS

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

Christopher Hanley • chris@niada.com PRINTING

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ASSOCIATE MEMBERS Advertising / Marketing Autotrader.com 866-836-1455 Used Cars.Com by Dealix 650-599-5616 Cars.com James Lynch 312-601-5052 Carsforsale.com Grant Lockner 605-306-3492 Interactive financial Marketing Group Travis Weisieder 804-248-0892 Attorney Byrd Cabrera LLP Robert (Scott) Byrd 310-365-1954 Auto Parts AutoZone, Inc. Daniel Narvaez 971-218-2300 AutoZone Inc Ray Curry 503-964-9420 Bond & Insurance Hecht & Hecht Insurance Agency Larry Hecht 503-542-1130 Shepard & Shepard Business Solutions Todd Shepard 1-855-396-0488 #8 Kelly Martin Insurance Agency Kelly Martin 503-625-2615 Dealer Auction Manheim Seattle Auto Auction Ray Priest 206-762-1600 Manheim Portland Auto Auction Alex Fraser 503-286-3000 ADESA Seattle Auto Auction Mark Dumbler 253-735-1600 DAA Seattle Dave Blake 253-737-2200

United Vehicle Auctions Lori Jacoby 503-380-1927

Veros Credit John Pierce 714-415-6125 x21131

ADESA Northwest Auto Auction Mark Melton 541-689-3901

Reliable Credit Associations David Marx 503-462-3022

ADESA Portland Auto Auction Jerry Hinton 503-492-9200

Ted Investment LLC Tom Garza 503-213-1109

Crosspoint NW Dealer Auction Brian Hardy 503-594-2800 DAA Northwest (Dealers Auto Auction) Mitzi VanVoorhis 509-244-4500 Car Max Sean McDonald 804-747-0422 Dealer Software Frazer Computing Inc Michael Frazer 888-963-5369 Motor Vehicle Software Vitu John Brueggeman 546-270-6699 Financing Credit Acceptance John Bragg 360-980-2214 Lobel Financial David Lobel 714-816-1301 Oregon Auto Finance Gary Veum 541-868-0472 The Equitable Finance Co. Brandon Fox 503-808-7939 Pac West Credit LLC John Kiefer 541-868-2595 United Finance Todd May 503-238-6488 Oregon Community Credit Union Rich Black 541-681-6311 Nationwide Insurance Mark Tischer 503-339-4165 Credit Concepts Inc Jason Moon 541-342-8545

Floorplan Lobel Financial David Lobel 714-816-1301 NextGear Robert Torbet 503-358-3911 Floorplan Xpress Josh Chandler 503-621-9260 Auto Cap Services (ACS) Michael Smith 800-800-6494 Online Review Management Podium Kaylie Smart 801-376-0677 Public Auction Woodburn Auto Auction Steve Morin 503-981-8185 Petersen Auction Group of Oregon Curt & Susan Davis 541-689-6824 Security Pro-Vigil Kris Brackin 210-858-1105 Service Contracts AUL Corporation Jacqueline Swank 800-826-3207 Elite Warranty, Inc Al Ham 503-530-0912 Automotive Business Developers Shannon Meany 541-944-9186 Benchmark Dealer Services Jacob Bangert 360-834-3333 Protective Asset Dylan Doran 818-836-1455

BOARD OF DIRECTORS

OIADA / May 2017

PRESIDENT Siamak Lotfi

1ST VICE PRESIDENT Gary Brooks

EXECUTIVE VICE PRESIDENT Jim Weaver

SECRETARY/ TREASURER Salvador Alvarez Herrera Zamora Auto Sales

CHAIRMAN OF THE BOARD Gary Sargent

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May 2017 / OIADA

ACCELERATE

BY GWC WARRANTY

5 FACTS YOU DIDN’T KNOW ABOUT COST OF REPAIRS A Fresh Approach

Most dealers have talked cost of repairs when attempting to close a vehicle service contract sale. But has talking about the price of parts and labor returned a mixed bag of results? What if there was a different approach you could take when presenting cost of repairs that would be more effective? In the interest of taking a fresh, new approach with the cost of repairs presentation, let’s take a step back from the price of a new transmission or the labor costs at the repair shop down the road. Let’s rather take a look at some supporting data and approaches that make the cost of repairs discussion more relatable and more effective. Nearly half of all Americans can’t afford an unexpected $400 expense. The Federal Reserve just conducted research that found 46 percent of Americans do not have enough money to cover an

unexpected $400 expense. Chances are if you’re selling a used vehicle, or perhaps one with higher mileage to a subprime customer, that they would fall into this category. With this knowledge on hand, it should help justify a few extra dollars each month to have a service contract on a vehicle. Age of ownership is changing rapidly. Edmunds research has discovered trade-in volume will likely dip below six million this year. It’s the first time this has happened in five years. Why? Because drivers are hanging on to their cars longer. The same Edmunds report showed that 8- to 15-year-old vehicles had higher value retention than one year prior. If your customers plan on holding onto their cars longer and protecting the value these vehicles retain, a service contract becomes a much easier sell. Expenses from a breakdown don’t stop at parts and labor. Anyone who has had a broken down vehicle knows the process. There’s a tow truck involved. If you’re away from home, you’ll need to find lodging. Parts and labor can be expensive on their own, but when you factor in hotel stays, roadside assistance and towing services, the cost from a breakdown starts to skyrocket. A service contract resolves these fears by

covering more than just parts and labor. Customers are basing their car purchase decisions on parts costs. A recent AutoMD survey reported 15 percent of car buyers factor in costs of repairs when buying a vehicle. It’s one of the leading considerations of recent car buyers – right behind price, longevity and utility. If this is such an important point of emphasis for customers, it would only make sense they would be interested in protecting themselves from such out-of-pocket expenses. Video can tell this story for you and bring it home. According to global media measurement company ComScore, after watching a video, 64 percent of customers are more likely to buy a product. After (or perhaps even before) you’ve made your case about cost of repairs being the reason a customer should buy a service contract, show them a video that tells the story in a succinct manner. It might just be the piece that brings your presentation together and gets your customers to their purchasing decision.

ONLINE MARKETING BY JEREMY ANSPACH

MAKING THE MOST OF LOCATIONBASED DATA

Drive Mobile Shoppers to the Lot

Now more than ever, dealers must make an effort to meet consumers across all channels. Thanks to the growth of mobile, consumers make major purchase decisions on the go, and often on impulse. While low-funnel car buyers aren’t yet actually purchasing cars via mobile devices, they do conduct the majority of their auto research on smartphones and tablets. Serving relevant, targeted ads to consumers is crucial across every industry, but it holds especially true in automotive. With over 75 percent of the car buying process spent online, it’s increasingly important to keep the ads and content relevant across devices. When added to a dealer’s larger digital marketing strategy, mobile can help them in such scenarios. By leveraging location data to serve real-time,

OIADA / May 2017

contextual ads, dealers have the power to drive mobile car shoppers from their phones to the lot. Discover Shopper Preferences To better service mobile car shoppers, dealers must understand their shopping habits. Is a consumer on the hunt for an SUV or a sedan? Does she have a color preference? Dealers can use an online car shopper’s search and browsing behavior to serve more tailored ads on the go. If a consumer is repeatedly searching for a red Jeep, for example, ads across all devices should reflect this with relevant content. In addition to relevancy, highly targeted ads are not productive if they’re not in line with your dealership’s inventory. A car shopper could be served a retargeted ad for the red Jeep she’s been eyeing, but if the model is out of stock by the time she actually visits the dealership, she won’t be a happy customer. Utilize Location Data Along with effective display advertising and retargeting, location-based mobile behavior can help dealers improve their personalization efforts even further. Desktop marketing efforts are limited by a car shopper’s permanent location, allowing

dealers to only advertise based on where a computer is. The percentage of auto shoppers using mobile to shop for a vehicle is expected to increase to 80 percent by 2020. With the growth of mobile, relying solely on desktop is not an accurate representation of consumers’ browsing habits. Location-based mobile advertising allows dealers to interact with shoppers anywhere and at any time. For example, a shopper who has been on the hunt for a red Jeep is about to pass a dealership that has one on the lot. Your dealership can reach that consumer by serving her a targeted ad as she drives by, enticing her to visit the dealership. Dealers can make their marketing efforts stand out among competitors by applying digital behavior to realworld context. In doing so, they’ll keep car shoppers engaged and generate immediate ROI from their digital campaigns. As shopping on smartphones and tablets quickly becomes the norm, dealers must adjust to the trend and integrate a digital solution that keeps mobile top of mind. Jeremy Anspach is CEO of PureCars.

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MANAGEMENT MATTERS BY DALE POLLAK

RETHINK HOW YOU SOURCE AUCTION VEHICLES Adapt to Market Shifts How has your auction-sourcing process changed in the past 12 to 18 months? About a third of dealers say things are pretty much the same when it comes to sourcing auction vehicles. In many instances, dealers believe their used vehicle managers and buyers could do a better job, but they don’t feel a compelling need to make any dramatic changes. These are dealers who’ve expanded their wholesale acquisition net beyond local sources. Their focus is at least regional, if not multi-state. Managers and buyers are traveling further to find the right auction inventory for their dealerships. Other dealers are buying more online. These dealers fall into two categories: those who are learning the ropes of acquiring auction vehicles through online channels, and those who want online purchases to make up a majority share of their wholesale acquisitions. In both cases, dealers say they see online auctions as more cost-effective and efficient than sending managers to auctions to acquire wholesale inventory. I’d estimate about 20 percent of dealers have transitioned to buying solely online. Typically, the shift involves the hiring and/or training of acquisition specialists – tech-savvy individuals who spend the majority of their time researching vehicles and managing live and proxy bids to acquire cars. Here again, dealers say the change resulted from a desire to make auction sourcing less costly and more efficient. I worry the most about dealers who fall in the first group. If auctions were like fishing, these dealers would be the guys who are basically bringing the same bait and tackle to the same fishing holes, hoping to bring home the best fish. They see enough occasional success to maintain the same routine, even as the law of diminishing returns erodes their potential for success. They may even justify less-thanoptimal results with a purist-type position – the guys with the fancy baits, high-tech fish finders and tackle aren’t really “fishing,” at least not in the traditional sense. But today’s wholesale market is anything but traditional. Consider the following factors. Increased Supply Not long ago, dealers bemoaned what they considered a dearth of decent cars available at auctions. Today, we have the opposite problem – an unprecedented, and growing, level of wholesale supply that will bring a commensurate rise in vehicle value volatility and risk. Increased Competition In the months ahead, analysts say dealers

OIADA / May 2017

will see fewer trade-in opportunities from new vehicle customers – a by-product of rising levels of leasing in recent years. Edmunds reports that fewer than half of new vehicle deals involved a trade-in. This market dynamic means more dealers will look to auctions to acquire the inventory they need to drive their retail sales and profit objectives. Increased Market Insight New technologies and tools are helping dealers efficiently pinpoint the auction vehicles that offer best retail potential for their dealerships, based on the front-end gross profit the vehicle might generate as well as how fast it will sell, given the number of competing units available in the market. For these dealers, there’s little, if any, guesswork involved when they make a decision to acquire an auction vehicle. Increased Margin Compression Unfortunately, the trend of the past several years will continue in the months ahead – pricing transparency and rising costs will continue to erode used vehicle profit margins. Add in the aforementioned volatility due to increased wholesale supply, and it is an ever-greater imperative to consistently buy the right auction car on the money. To me, these factors indicate a wholesale market where change is ever-present, and tomorrow’s opportunities will likely look different than they do today. That’s why I’m more confident about the future success of dealers who’ve actively been changing the way they source auction inventory. In the months ahead, they’ll be better positioned to adapt to market shifts and gain advantage. Their competitors, meanwhile, will still be arguing over whether something needs to change. Dale Pollak is founder of vAuto and has published several books on his Velocity Method of Management.

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INDUSTRY NEWS

NIADA.TV TO STREAM WORLD AUTO AUCTIONEERS CHAMPIONSHIP May 12

For the sixth consecutive year, NIADA.TV will webcast the World Automobile Auctioneers Championship live, courtesy of the National Auto Auction Association and co-sponsor NextGear Capital. The competition will be held May 12 at Manheim Pennsylvania in Manheim, Pa. NIADA.TV’s coverage will begin at 8 a.m. EDT. Watch the rapid-fire action as the best auctioneers, ringmen and teams in the business compete for prize money and the coveted titles of World Champion. Michael Riggins is the defending champion auctioneer, while Aaron Brown won the 2016 ringman title and Blake McDaniel and Dustin Taylor earned

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the team championship. This year’s judging panel consists of the following industry executives: • Eric Authenrieth, general manager of Carolina Auto Auction, ServNet vice president and treasurer. • Brad Bollman, vice president of remarketing solutions at GM Financial. • Kevin Brown, president and owner of Missouri Auto Auction, president of ServNet. • Frank Hackett, CEO of National Auto Auction Association. • Grace Huang, Manheim senior vice president of inventory services. • Lori Jones, Texas Auction Academy

vice president. • Shane O’Dell, president of Cox Automotive Financial Solutions and NextGear Capital. • Rich Perkowski, national auction manager at BMW Financial Services. • Frank Stapleton, 1991 Reserve World Champion Auto Auctioneer. • Stephane St-Hilaire, ADESA president and CEO. • Laura Taylor, Charleston Auto Auction general manager. • KAR / ADESA Judge • Alternate Judge: Chad Bailey, general manager of Akron Auto Auction and vice president of NAAA.

May 2017 / OIADA

ACCELERATE

BY GWC WARRANTY

HIGH SUPPLY, HIGHER DEMANDS You Need Not Fear

The surge of off-lease vehicles set to hit the market – 3.6 million as estimated by Manheim – is a great source of excitement for used car dealers. But it can also be a cause for concern. Will such a supply flood push down prices and compress margins? Will competition within the market make it difficult to maintain strong profits per unit? These are all valid questions dealers need to prepare for. To combat margin compression from an overloaded used market, it’s important to first know what vehicles you can move most quickly. Go back in your books and see what vehicles sat on your lot for the least amount of time. Try to identify any trends for what types of vehicles you should seek out at auction. Moving more vehicles each month will help combat outside forces applying pressure on your margins and help you stay price

competitive within your market. The protection you offer on your vehicles can help you safeguard your profits as well. Offering vehicle service contract protection provides profit opportunities on the back end of deals that can make up for any margin compression you feel on the front end. This allows you to price competitively without putting profits at risk. A bonus benefit is the confidence you’re giving customers to drive off your lot worry-free. But a service contract only provides these benefits if it’s presented to every customer, every time. Perhaps the most straightforward way to put all these pieces into motion is to offer a certified pre-owned program.

Statistics published in Auto Remarketing show certified pre-owned vehicles can demand, on average, $700 more per unit. Similar statistics report they are sold an average of 12 days more quickly. Simply by offering a certified pre-owned program, you can meet all the demands of a higher used car supply: move vehicles more quickly; protect your margins; and earn extra profit per unit through service contract protection. A massive supply surge doesn’t need to be feared if you have the right plan in place. By acquiring inventory you can move quickly and providing service contract protection that preserves your margins, you can bask in this rare opportunity to move mass quantities of high quality used inventory.

Cox Automotive recently announced chief economist Tom Webb will retire on June 30. His departure marks the end of an illustrious automotive industry career that spanned some four decades and earned Webb recognition as the pinnacle of automotive market intelligence and economic analysis. “Tom has been an invaluable resource in the automotive industry for years, and his contributions are countless,” said Cox Automotive president Sandy Schwartz. “While Tom will be missed by us and many in the industry, everyone at Cox Automotive wishes him all the best in his well-deserved retirement and next chapter. He will always be a big part of the Cox Automotive family.” After joining Manheim as chief economist in 2000, Webb became a sought after expert, providing analysis of used car market activity based on data gathered from Manheim’s operating locations, associated businesses and industry research. Among his many accomplishments, he authored the annual Manheim Used Car Market Report as well as developed and implemented the Manheim Used Vehicle Value Index, an innovative model considered in industry circles to be the premier indicator of used vehicle pricing trends. “Like many others, I consider Tom one

of the leading authorities and most credible voices in vehicle remarketing today,” said Cox Automotive president of inventory solutions Janet Barnard. “Our industry has relied on Tom’s insights into economic and remarketing trends to guide business decisions and help evolve the marketplace. We can’t thank Tom enough for all he’s done for Manheim, our clients and our industry.” Prior to joining Manheim and Cox Automotive, Webb spent 26 years with the National Automobile Dealers Association as a spokesman and analyst for the nation’s franchised new car dealers. In 1999, Webb left NADA to become a senior manager in PricewaterhouseCoopers’ automotive practice, where he developed measures to assess efficiency levels in the retail distribution of vehicles. “Sooner or later most people arrive at this point, but I can say with total conviction that I’ve had nothing less than a fascinating, hugely satisfying career,” said Webb. “I had the privilege of serving some of the best dealers in the country during my time at NADA, but my fondest memories involve the many Manheim clients I’ve come to know during the last 17 years. Above all else, I’m forever grateful for all the relationships I forged over the years.” Looking ahead, Webb plans to check off “bucket list” items, tackle home improvement projects and spend time with his eight grandchildren.

INDUSTRY NEWS

COX AUTOMOTIVE CHIEF ECONOMIST TOM WEBB RETIRES Industry Veteran’s Career Spans 40 Years

OIADA / May 2017

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ASSOCIATION NEWS

OREGON INDEPENDENT AUTO DEALERS OIADA ~ Oregon IndependentASSOCIATION Auto Dealers Association Your only nationally recognized association since 1948. OIADA, here to help, support, educate and promote quality dealers in Oregon.

e are the great benefits of OIADA membership: Oregon Dealer News is delivered to our dealers monthly, filled with quality up to date business articles. Included in each Dealer News Magazine is 30 minutes towards continued education, free to OIADA members, which now means returning eight answer sheets a year. This is a savings of $75 annually. OIADA Auction Punch Card: Our valued auction houses in Oregon, Washington and California are offering $50 savings on your buy and sell fees, a value of $1,100. OIADA offers members discounts on all meetings, educational programs and conventions, with an annual savings of over $200. OIADA members receive a discount on most forms, a savings of up to $100 or more annually. Quarterly regional dinner meetings, an outreach to bring programs, education and conversation to all areas within Oregon. Annual convention will host a variety of programs including eight or more hours of continued education. Quality Dealer of the Year Awards and Banquet. At a savings of $100 for OIADA members. Opportunities for OIADA members to be awarded Oregon’s Quality Dealer of the Year and to compete for the National Quality Dealer of the Year at our national convention. National education opportunities, becoming a Certified Master Dealer and more. National access to Dealers 20 Groups . OIADA has on contract a lobbyist to bring forth interests and to protect our dealers at the state level. OIADA hosts a required certified 8-hour Pre-License Class. Upon completion dealers will receive the DMV required 8-hour certificate. Title and registration classes, savings of $35 for OIADA members. Help and support with your issues is just a phone call away. Automatic membership with NIADA and the NIADA Used Car Dealer Magazine. Access to NIADA’s annual convention. Opportunities for scholarships, both state and national. NIADA offers OIADA members a wide variety of discounts to members, from education to everyday business expenses.

ASSOCIATION NEWS

OIADA FORMS STORE YOU CAN E ASILY AT TAIN FORMS NEEDED FOR E V ERY DAY BUSINESS

Don’t let yourself run out of the forms you need to do business every day. OIADA has four ways for you to get forms:

1. 2. 3. 4.

You can order forms any time of the day online at OIADA.com. All you need is an email address. You can stop by one of three locations within the Oregon auction houses during auction day. You can pick up forms at the OIADA office, located at 1475 Capitol Street NE in Salem. OIADA members receive a discount on most forms, a savings of up to $100 or more annually. You can order forms any time online at OIADA.com. All you need is an email address.

Don’t be caught without a Secure Odometer Form or Secure Power of Attorney. These forms are DMV forms and each has a registered number assigned to the dealer who purchased them, so don’t lend yours out and do not borrow from your neighboring dealer. When you purchase these forms, it’s a good idea to pull them out of the packet and slip a reminder near the bottom to call OIADA and order more. You can even add the phone number (503-362-6839) on the note. Did you know that our members get a discount on most state forms? OIADA members save an average of $100 or more every year.

OIADA at 503-362-6839 to start your enrollment for all these great opportunities as a of OIADA.

ual Savings 00 Auction Punch Card 00 Forms 75 Education 00 OIADA Convention 50 Driven to Learn & Regional Meetings 25 Bottom Line Savings

Cost of Membership ~ OIADA helping you succeed.

OIADA / May 2017

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OIADA CONTINUING EDUCATION PROGRAM sponsored by onstar.com / trialon

OIADA CONTINUING E D U C AT I O N P R O G R A M

READ & RESPOND AND CERTIFY BELOW

SAVE-THE-DATE O I A DA C O N V E N T I O N O C T O B E R 2 1 AT H O L I D AY I N N W I L S O N V I L L E

COMPLE T E T HIS T EST AND CERTIF Y BELOW T HAT YOU HAV E RE AD T HE ARTICLES FOR MAY 2017.

“5 FACTS YOU DIDN’T KNOW ABOUT COST OF REPAIRS”

True/False: The Federal Reserve just conducted research that found 46percent of Americans do not have enough money to cover an unexpected $400 expense. True/False: Customers do not factor in parts costs when considering which vehicle to purchase.

“RETHINK HOW YOU SOURCE AUCTION VEHICLES”

What factor should you consider in today’s wholesale market? a) Increased supply. b) Increased margin compression. c) Increased market insight. d) All of the above. True/False: Edmunds reports that fewer than half of new vehicle deals involved a trade-in. This market dynamic means more dealers will look to auctions to acquire the inventory they need to drive their retail sales and profit objectives.

“HIGH SUPPLY, HIGHER DEMANDS”

Which of the following is a demand of a higher used car supply? a) Move vehicles more quickly. b) Protect your margins. c) Both A and B.

“WHEN EXCEPTIONS OVERTAKE THE RULES OF YOUR SHOWROOM” True/False: Missed details can ruin the customer experience and the profitability of a dealership, as well as contribute to the lackluster reputation of our industry. True/False: The difference in the details can mean finishing at the top of the heap, or struggling to make payroll and keep your franchise or lease. I certify to OIADA that I have personally read these articles in The Oregon Dealer News Magazine for May 2017. STOP!! Before you sign and send this form, make sure you have answered and completed all the quiz questions to receive Continued Education Credits.

My Name ___________________________________________________________ ___________________________________________________________________ Dealership Name _____________________________________________________ Dealership # _________________________________________________________ Dealer License Expiration Date: (Month)____________________________________ (Year)________________ Signed: ________________________________________ Date _______________________________________________________________

FAX TO: 503-364-7331 or MAIL TO OIADA at 9150 SW Pioneer Ct Ste H, Wilsonville, OR 97070 www.oiada.com

May 2017 / OIADA

MANAGEMENT GAMEPLAN BY SCOTT BERGERON

WHEN EXCEPTIONS OVERTAKE THE RULES OF YOUR SHOWROOM How to Get Back on Track

The term showroom control has been around for years, and it exists for good reason. For example, on a busy Saturday when deals are happening left and right, it’s easy to lose control and start making exceptions and, as a result, mistakes. Many of us have been taught the rules of the road. But how many times have we taught the rules of our dealership, and our showroom? Why do they exist? What happens when they aren’t followed? When exceptions to the rules overtake the rules themselves, what do you do to get them back on track? Start by identifying them, and the process it takes to make sure they’re being followed consistently. Recently the Academy Awards had one of their biggest screw-ups ever – announcing the wrong Best Picture winner to over 50 million viewers. The reasons it happened were simple: Details were overlooked and there were distractions. While most of us won’t suffer a worldwide embarrassment and lose all credibility, our industry does when missed details and distractions start adding up. It can ruin the customer experience and the profitability of a dealership, as well as contribute to the lackluster reputation of our industry. My wife and I bought an SUV last month. As usual, it wasn’t from a salesperson I knew, although I’d purchased from the dealership 10 years before and had actually hired several of their top brass in the 1990s. It was a big-box store. The salesperson was a “veteran,” having been there six years. Even though I’ve been in the business for close to 30 years, and can get a quick and easy fleet deal, I enjoy seeing how the retail side of dealerships is progressing in the eyes of a retail customer. Specifically, I like to see if we’re improving our reputation or holding onto our long held “traditions.” What struck me most about our visit was it was way too impersonal for either of us to quickly “fall in love” with our new car. Sure, we liked the salesperson, and he did a great job building rapport, but we were in the showroom cubicle for at least an hour searching inventory on the computer since they had at least 100 in stock. Getting a proper walkaround and sitting in a car, let alone driving it, didn’t happen for well over an hour and a half. Six and a

OIADA / May 2017

half hours later we took delivery. It was a snowy Thursday in Denver with no customers and I had a trade. I will give them an hour off since it took that long to get my fleet price and negotiate on the trade. They were all very nice and had a really nice delivery person, but over five hours if you take out the trade/ negotiations?! I had helped family friend Patricia buy from another dealership only two months earlier. They were a local dealership, with an awesome reputation, and the experience was incredible. They didn’t miss a beat. Every “I” was dotted and every “T” crossed, and she was in and out in just a couple of hours. As complicated as some like to make it, showroom control isn’t rocket science. A deal is made up of a lot of little pieces, and if those pieces aren’t spelled out time is lost and so are deals. With defined rules everyone knows, business can flow through quickly. In my friend’s case, her salesperson and dealership had every process done from start to finish with no room for mess ups. Her sales rep had only been in the business for six months. She worked through a sales manager but also had a “modified four square” as well. The sales rep didn’t have a finance person, but sold every aftermarket and finance product I’d ever seen, and did a great job of it, even though she was fairly inexperienced. My friend bought a warranty, even though it was a certified used car. It made sense, and her salesperson took the time to build the value. Pat is the happiest customer and is still talking up her great deal and how nice and respectful they all were. She still tells me

how much she appreciates me walking her through the process and helping her get such a great deal. Coincidentally, it was a one price store, and I didn’t get her a penny off. Her deal was quick, easy, and was profitable for the dealership. My six-hour deal included recopied state documents, and a credit app that was virtually impossible for all of us to read. We kept taking pictures of the application, just so we could blow it up on our phones to see what they really needed. When we got to the finance manager, he didn’t even attempt to sell us anything, and immediately slashed his warranty price because, in his words, “You’re from the business so I won’t try to sell you anything. I’ll just give you the warranty at cost plus $100.” I didn’t buy it. It might have been a good deal, but he never showed me what it included other than a “6-year, 100k” and an internal price sheet. In our business, it’s all about the details. In key ways, it’s like football. When a team executes on its game plan consistently, touchdowns happen. When it doesn’t, interceptions leading to an opponent’s touchdown can result. That’s a 14-point swing. In your market, the difference in the details can mean finishing at the top of the heap, or struggling to make payroll and keep your franchise or lease. Don’t let the little things make or break your store. Stay on the details and finish strong. Former dealer executive Scott Bergeron is the founder of Daily Gameplan.com, a sales team performance company. Scott can be reached at 303.918.3169 or scott@dailygameplan.com.