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WASHINGTON UPDATE | BY SHAUN PETERSEN
Latest Government Issues and Activity NIADA is your voice in Washington D.C., advocating for independent dealers, the used vehicle industry and small business. Here’s a look at the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities. REGULATORY A federal appeals court in March struck down parts of a Federal Communications Commission ruling, including its controversial definition of an automated telephone dialing system. In a unanimous decision, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit overturned the FCC’s 2015 definition as far too broad, noting it “invites the conclusion that all smartphones are autodialers.” According to the Telephone Consumer Protection Act, calls made with an autodialer without the receiver’s consent are a violation carrying penalties of $500 to $1,500 per instance. That law defines an autodialer as “equipment that has the capacity to store or produce telephone numbers to be called using a random sequential number generator.” In 2015, the Obama Administration’s FCC interpreted “capacity” to
include a device’s “potential functionalities” – meaning even if a device is not capable of autodialing now, it could be with additional software or other modifications. It also said equipment that can dial numbers from a list qualifies as an autodialer. “The commission’s understanding would appear to subject ordinary calls from any conventional smartphone to the act’s coverage, an unreasonably expansive interpretation of the statute,” Judge Sri Srinivasan wrote in the court’s opinion. “It cannot be the case that every uninvited communication from a smartphone infringes federal law and that nearly every American is a TCPA violator-in-waiting, if not a violator in fact.” The court’s decision drew praise from current FCC chairman Ajit Pai, who said the now-overturned interpretation was “yet another example of the prior FCC’s disregard for the law and regulatory overreach.”
LEGISLATIVE A resolution passed by the Senate last month likely spells the end for the Consumer Financial Protection Bureau’s much criticized 2013 guidance on indirect auto lending. S.J.Res.57, a joint resolution that would overturn the guidance under the Congressional Review Act, was introduced March 22 by Sen. Jerry Moran (R-Kan.), with 15 co-sponsors. It passed by a 5147 vote on April 18. The resolution followed a December opinion from the Government Accountability Office that defined the guidance document as a CFPB rule for the purposes of the CRA, which means it can be struck down by a simple majority vote of both houses of Congress. The indirect auto finance guidance, issued in March 2013, claimed dealer discretion on interest rates creates a “significant risk” of unintentional disparate impact discrimination and spelled out the bureau’s intention to pursue enforcement actions on that basis.
Critics have pointed out the CFPB’s theory is based on shaky methodology for determining disparate impact and the guidance was put in place without comments from stakeholders, public hearings or studies of its impact on the cost of credit to consumers. A similar resolution, H.J. Res. 132, has been introduced in the House and is expected to pass. The White House has signaled its support of the resolution and the President is expected to sign it into law. H.R. 5266: Rep. Dennis Ross (R-Fla.) and Rep. Kyrsten Sinema (D-Ariz.) have introduced a bill that would change the CFPB’s leadership from a single director to a bipartisan, five-member, Senate-confirmed commission. The bill was co-sponsored by Rep. David Scott (D-Ga.) and Ann Wagner (R-Mo.). “As one of the most powerful agencies ever created, the CFPB should not be exempt from the principles of good governance, and with this legislation, we can ensure that it no longer will be – regardless of who holds the White House,” Ross said.
GRASS ROOTS The Georgia IADA scored another victory, fighting off a third attempt by legislators to raise the title ad valorem tax on used car purchases. The tax increase would have negatively impacted independent dealers by making it more difficult for them to provide reliable transportation to customers who can’t afford new vehicles. GIADA executive director Paul John credited the association’s government affairs team of Mo Thrash and John Haliburton with the outcome, with an assist from Lt. Gov. Casey Cagle, who supported GIADA’s efforts. “This win confirms GIADA and all used car dealers across the state not only have a voice, but a very loud and powerful one,” John said. “Lawmakers heard us and they know who we are. This past session, they were reminded of just how strong we can be as a united group of small businesses.”
PAC On March 9, Rep. John Carter (R-Texas) held a luncheon in Fort Worth and NIADA was invited to participate. The NIADA-PAC also made a contribution to his campaign. Now in his seventh term in Congress after 20 years as a district court judge, Carter serves on the House Appropriations Committee and is chairman of the Homeland Security Subcommittee on Appropriations. Carter has been a supporter of the auto industry and small business since he was first elected in 2002. He was a featured speaker at NIADA’s National Leadership Conference and Legislative Summit – now known as the National Policy Conference – in 2013, the first time since 1999 the event had been held in Washington D.C. Shaun Petersen is NIADA’s senior vice president of legal and government affairs.
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INSIDE 03................................................. NIADA Government Report 06........................Insights from Leading Small Business Guru 08.................................57 Million Vehicles with Open Recalls 09...........................................Get Certified or Get Left Behind 10.................................................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
ADESA ................................................................................... 5 AutoZone............................................................................... 7 DAA Northwest/Seattle..................................................... IFC Manheim............................................................................... 11 Manheim Portland .................................................Back Cover NextGear Capital................................................................. 12 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 For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. 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 © 2018 by NIADA Services, Inc.
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
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 ADESA Northwest Auto Auction Mark Melton 541-689-3901 ADESA Portland Auto Auction Jerry Hinton 503-492-9200 Crosspoint NW Dealer Auction Brian Hardy 503-594-2800 DAA Northwest (Dealers Auto Auction) Mitzi VanVoorhis 509-244-4500 CarMax Sean McDonald 804-747-0422 DEALER SOFTWARE
Frazer Computing Inc Jake Morley 888-963-5369 Motor Vehicle Software John Brueggeman 546-270-6699 FINANCING
Credit Acceptance John Bragg 360-980-2214
President Siamak Lotfi
Troy Graff • troy@niada.com EDITORS
MAGAZINE LAYOUT
Executive Vice President Jim Weaver
Christy Haynes • christy@niada.com PRINTING
Nieman Printing
1st Vice President Gary Brooks
Secretary/Treasurer Salvador Alvarez Herrera Zamora Auto Sales
Chairman of the Board Gary Sargent
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FLOORPLAN
Lobel Financial David Lobel 714-816-1301 NextGear Capital 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
OIADA BOARD OF DIRECTORS
STATE MAGAZINE MGR./SALES
Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com
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 Veros Credit John Pierce 714-415-6125 x21131 Reliable Credit Associations David Marx 503-462-3022 Ted Investment LLC Tom Garza 503-213-1109
PRODUCTS & SERVICES |
NEXTGEAR CAPITAL LAUNCHES PAYMENT FEATURE
Automated Payment System
NextGear Capital recently announced the launch of AutoPay, a new feature within the Account Portal, the floor planner’s account management platform. Account Portal provides account overviews for dealer and auction partners, including a dashboard that offers information, such as analytics and payment history, instantly on any device. The new AutoPay feature lets dealers opt into a recurring and automated payment system that schedules NextGear Capital payments.
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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
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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?
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.
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.
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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
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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.
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.
MARKET WATCH | BY AUTO REMARKETING STAFF
2018 KBB BRAND IMAGE AWARD WINNERS
Non-Luxury Brands • Honda - Best Overall Brand • Subaru - Most Trusted Brand • Honda - Best Value Brand • Honda - Most Refined Brand • Mazda - Best Performance Brand • Mazda - Best Car Styling Brand Luxury Brands • Lexus - Best Overall Luxury Brand • Lexus - Most Trusted Luxury Brand • Buick - Best Value Luxury Brand • Mercedes-Benz - Most Refined Luxury Brand • Porsche - Best Performance Luxury Brand • Jaguar - Best Car Styling Luxury Brand
Truck Brand • Ford - Best Overall Truck Brand Award categories are calculated among luxury, non-luxury and truck shoppers. For the fifth year in a row, the Ford brand has again been named the Best Overall Truck Brand. The American brand has earned the distinction every year, except in 2013, when Toyota took home the title. Additionally, Lexus has been recognized as the Best Overall Luxury Brand for the third consecutive year, as well as Most Trusted Luxury Brand for 2018. “Lexus’ tradition of high quality products and its recent emphasis on style and emotion, contributed to the brand’s win,” said KBB. The luxury brand’s ES, NX, RX and LS models also received high ratings among consumers for this year’s study. The Strategic Insights’ Brand Watch study captures how shoppers view important factors that influence their purchase decisions. KBB’s 12 brand watch factors include: affordability, driving comfort, driving performance, durability/reliability, exterior styling, fuel efficiency, interior layout, prestige/sophistication, reputation, ruggedness, safety and technology. For more information about the 2018 Brand Image Award winners, visit www. kbb.com/new-cars/brand-image-awards.
Marketing Power The term Certified provides a powerful lead generation tool for you. Customers see value in Certified vehicles and will seek them out when browsing inventory. By marketing your inventory as Certified, you’re providing an instant feeling of confidence to your customers who are looking for a car they can rely on. Upsell Opportunities The dealers who have the most success with Certified are the ones who rarely sell it. What this means is that strong Certified programs at independent dealerships often lead to upsell opportunities to richer coverage levels and longer terms. Certified is a basic level of coverage for your customers that should give them confidence in the vehicle, but highlighting what that coverage doesn’t cover can help customers see value in higher coverage levels, which will ultimately increase your revenue opportunities on the back end. Hone Your Skills If you’ve had trouble instituting a consistent F&I process in the past, Certified programs can help you work on upsell tactics while still having a baseline level of coverage to protect your customers. Over time as you develop your F&I process, you’ll see more upsell opportunities converted into actual back end revenue.
Renewal Opportunities Most Certified programs provide shorterterm coverage to protect your customers in the months right after the purchase. Making note of when these contracts are set to expire will give you the opportunity to engage with your customer after the sale. In checking up on your customers, you can remind them their coverage is about to run out. Even if you don’t land a VSC renewal, you might just learn about friends or family members who are shopping for cars. The extra customer touchpoint could prove profitable in the long haul.
shoppers based on many attributes that are important to consumers, and motivate them toward their ultimate purchase decision.” KBB’s 2018 Brand Image Award winners include the following:
Honda Dominates as Best Overall Brand
Kelley Blue Book recently announced its 2018 Brand Image Award winners. Honda, Lexus and Ford took the top spots after receiving the highest average scores among 12 brand watch factors. In addition to being named 2018 Best Value Brand and Most Refined Brand, Honda took home the Best Overall Brand title for the first time since 2015. This year, KBB selected brand winners using annual new-car buyer perception data from the Kelley Blue Book Strategic Insights’ Brand Watch study. “Building familiarity and loyalty among car shoppers has never been more important to automakers, especially as the market is flooded with all-new and redesigned models competing for market share,” KBB director of media strategic insights Hwei-Lin Oetken said. “The combination of compelling product and marketing communications continues to influence purchase consideration. This year’s winners have attracted car
ACCELERATE
| BY GWC WARRANTY
GET CERTIFIED OR GET LEFT BEHIND
Having a Certifed Program is No Longer an Option
Every customer who hears “Certified Pre-Owned vehicles” instantly equates that with a more confident purchasing decision. But the power behind Certified programs isn’t limited to major manufacturers. With the right program and process in place, dealerships of any kind can cash in on the cachet behind the Certified name. These days, having a Certified program is no longer an option. Without one, your dealership runs the risk of being left in the dust. With independent dealers joining in on the Certified trend, it’s now more about how you execute your Certified program than just having one and hoping it sets you apart from competitors. Even the Playing Field If you don’t have a Certified program today, you run the risk of falling behind the industry. Independent dealers now have access to Certified programs, meaning more dealers than ever before are jumping on the bandwagon. If you look around at competition and see Certified programs popping up, it’s time to get on board before you get lapped by the field.
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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
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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
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.
F&I MATTERS | BY SCOTT BATES, CPA
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*This testimonial was received via interview, audio and/or video submission. This testimonial is based on this dealer’s individual experiences, reflecting real life experiences of a NextGear Capital dealer. NextGear Capital does not claim they are typical results that dealers generally will achieve. This dealer’s experiences may not be indicative of future performance or success of any other dealers. Some of the testimonial has been shortened so the whole message is not displayed due to length and/or relevance.
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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
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.
www.oiada.com
May 2018
OIADA
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OIADA CONTINUING EDUCATION PROGRAM |
OIADA CONTINUING E D U C AT I O N P R O G R A M
READ & RESPOND CERTIFY BELOW
Complete this test and certify below that you have read the articles for May 2018. “GET CERTIFIED OR GET LEFT BEHIND” True/False: With the right program and process in place, dealerships of any kind can cash in on the cachet behind the Certified name. True/False: Customers see value in Certified vehicles and will seek them out when browsing inventory. “INSIGHTS FROM LEADING SMALL BUSINESS GURU” Which of the following is not one of the people types Michael Gerber discussed? a) Amateur. b) Entrepreneur. c) Manager. d) Technician.
True/False: According to the article, your 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. “57 MILLION VEHICLES IN U.S. HAVE OPEN RECALLS” According to Carfax’s research, which region is most likely to have cars with open recalls? a) Western. b) Eastern. c) Northern. d) Southern. “COLLECTIONS” True/False: Nothing can really motivate a customer to pay for a car except a strong relationship. True/False: A strong closing process with full disclosure followed by a welcome check-in call reduces the need to chase down payments, and also increases the number of payments made. I certify to OIADA that I have personally read these articles in the Oregon Dealer News magazine for May 2018. 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 MAIL TO OIADA at 9150 SW Pioneer Ct Ste H, Wilsonville, OR 97070
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MARKET WATCH | BY AUTO REMARKETING STAFF
TEST DRIVES HELPING KEEP SHOPPERS IN DEALERSHIPS Recent Survey Results
With all the talk lately of buying cars completely online – and an apparent willingness from consumers to take this leap – shoppers low
in the sale funnel, or early in their vehicle consideration process, still seem to favor dealerships. An Autolist survey, the results of which were released in conjunction with the recent 2018 NADA Show, found the majority of consumers aren’t ready to move the entire car-buying process online. In fact, 66 percent of respondents to the survey – which polled 1,095 car shoppers in March who are in the market for new and used vehicles – said they are “unlikely” or “very unlikely” to purchase a vehicle completely online without ever seeing it in person. So what’s keeping consumers coming to dealerships? According to the survey results, the answer is test drives. In fact, 63 percent of respondents said the primary reason they would visit a dealership was to test drive a vehicle. And that’s apparently where customer satisfaction with the dealer experience is highest as well. On the other hand, one of the least enjoyable parts of visiting a dealership for new
car customers? You guessed it – the financing process. Interestingly, this ranked even lower than the process of negotiating a vehicle price. And consumers want to speed up the transaction process as well. According to the Autolist poll, the part of the buying process consumers wanted to see improved upon the most was the time it took to complete the transaction. A third of survey respondents said it was the No. 1 area where dealers could improve. Consumers also noted dealerships could serve to improve “the helpfulness of their salespeople and the vehicle information provided during the browsing process.” Perhaps one element not often thought of in consideration with consumer expectations is dealership size, but according to the Autolist survey it certainly plays a role. “While consolidation and corporate groups are quickly overtaking what was largely a family-run business network, buying from a national chain isn’t important to a majority of shoppers,” AutoList analysts said. Specifically, 63 percent of respondents said it wasn’t important to them the store be part of a national chain.
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