Official Publication Of The Tennessee Independent Automobile Dealers Association A Publication Of The California United Auto Dealers Association
Don’t Let The Money Walk Out Of Your Dealership also in this issue
Find Out The Difference Between A Written Warranty And A Service Contract plus
Focusing On Dealer Issues With The TMVC
NEWS DEALER
DEALER WEST Coast Tennessee
11/12.2007
PAID
PRSRT Standard U.S. Postage
FORT WORTH, TX Permit No. 1122
National Independent Automobile Dealers Association www.niada.com • www.niada.tv NIADA Headquarters 2521 Brown Blvd. • Arlington, TX 76006-5203 phone (817) 640-3838 TN Dealer News is published bi-monthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203; phone (817) 640-3838. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of the Tennessee Independent Automobile Dealers Association or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of TNIADA or NIADA, does not constitute an endorsement of the products or services featured. Copyright 2007 by NIADA Services, Inc. All rights reserved. Visit the TNIADA Web site at www.tniada.com. For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. For information on how to become a member of TNIADA, please contact Darryl Noble at (615) 506-4968 or dnoble@tniada.com. State Publications Manager/Sales: Troy Graff • troy@niada.com State Publications Editor: Laura Patterson • laura@niada.com State Publications Production Manager: Christy Haynes • christy@niada.com State Publications Graphic Artist: Amy Moore • amy@niada.com Printing: Southwestern ColorGraphics Printing & Mailing Specialists
contents FEATURES Service Contract Or Warranty
Legal, Legislative And Regulatory Summary
Understand the difference between a written warranty and a service contract.
Get up to date on the latest legal issues facing the industry.
KEITH WHANN
KEITH WHANN
Where Is The Money In Today’s Market?
Make sure the money doesn’t walk out of your dealership by creating a customer-centric environment. RICHARD LIBIN
TNIADA HIGHLIGHTS 12 TMVC Corner 18 Vendor Expo 19 Auto Auction Directory
21 Curbstone Report 24 Supply Order Form 26 Membership Application
BOARD OF DIRECTORS David Andrews – President City Auto Sales 4932 Elmore Road Memphis, TN 38128 Phone: (901) 377-9502 Phone: (901) 333-0103 dsa@cityauto.com Danny England – Vice President Danny England Motors P.O. Box 1620 New Tazwell, TN 37825 Phone: (423) 626-9500 Fax: (423) 626-9543 Cell: (423) 526-7190 dannyenglandmotors88@hotmail.com
John Niven, Jr. – Secretary/ Treasurer Auto Agency, Inc P.O. Box 382664 Germantown, TN 38183 Phone: (800) 325-5440 Phone: (901) 756-8557 niven@bellsouth.net Tony Moorby 141 Woodward Hills Place Brentwood, TN 37027 Cell: (615) 714-7991 Fax: (615) 866-5511 tonymoorby@aol.com
John Taylor Taylor Auto Sales & Rental 3832 Clarksville Pike Nashville, TN 37218 Phone: (615) 259-3797 Fax: (615) 259-8969
Sam Chaple Manheim’s Nashville Auto Auction 8400 Eastgate Blvd. Mt. Juliet, TN 37122 Phone: (615) 773-3808 sam.chaple@cox.com
Don Flanders Guardian Warranty 1800 Colonial Shores Drive Hixson, TN 37343 Phone: (423) 596-7601 Fax: (423) 842-3906 donflan@bellsouth.net
Darryl Noble – Executive Director P.O. Box 2219 Lebanon, TN 37088 Cell: (615) 506-4968 Office: (866) 5-TNIADA Fax: (615) 443-7486 dnoble@tniada.com lnoble@tniada.com
www.tniada.com Visit www.tniada.com for information on becoming a member.
TUNE IN
www.niada.tv
Access Educational Sessions On
Tune in for all the latest industry news from NIADA’s experts.
I N D E X
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T E N N E S S E E D E A L E R N E W S | NOVEMBER/DECEMBER 2007
T O
A D V E R T I S E R S
ADESA Knoxville . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Aircept / Cal Amp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 Auto Trader Publishing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Inside Front Cover AUTOSAVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 AutoTrader.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Back Cover CAR Financial Services, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Cars.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Credit Acceptance Corporation . . . . . . . . . . . . . . . . . . . . . . .Inside Back Cover Dealer Funding, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Frazer Computing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Georgia – Carolina Auto Auction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 Guardian Warranty Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Integra Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 Manheim’s Nashville Auto Auction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Manheim’s Tennessee Auto Auction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 McNutt Auto Transport Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Preferred Warranties, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 United Acceptance Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
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T E N N E S S E E D E A L E R N E W S | NOVEMBER/DECEMBER 2007
By Keith Whann, NIADA General Counsel
SERVICE CONTRACT OR WARRANTY: The Answer Depends On What Your Salespeople Say And How Your Paperwork Reads It is important for dealership employees to know about the products they sell, as well as what the documents they use say. The Supreme Court of Arizona said it best, “a
In the case of Lockhart v. Community Auto
service contract cannot also be a written
sold and the customer is not required to do or pay
Plaza, Inc., the Iowa Court of Appeals found that
warranty.” While many compliance issues impact
anything other than the purchase price of the
it did not have to look any further than the
a motor vehicle sale, one area that continues to
vehicle in order to benefit from the agreement. An
language in the Dealership’s purchase
pose significant problems is understanding the dif-
agreement that would meet the definition of a
agreement for an answer as to whether the
ference between a written warranty and a
written warranty, but for its failure to satisfy the
Dealership breached implied warranties and
service contract and how they impact a
basis-of-the-bargain test, is a service contract.
violated the Magnuson-Moss Warranty Act. The
dealership’s ability to disclaim implied warranties.
The Magnuson-Moss Warranty Act also
So, what’s the difference? The answers can be
contains an important caveat regarding a
found in the Magnuson-Moss Warranty Act.
dealership’s ability to disclaim implied warranties.
Let’s start with how you know if you are
8
customer by the dealership when the vehicle is
If a dealership provides a limited warranty to a
Customer signed a "motor vehicle purchase agreement" which stated that the vehicle was purchased "AS IS" and which attempted to disclaim all warranties. The disclaimer read as
offering a warranty or a service contract. The term
purchaser or “enters into” a service contract with a
"service contract" is defined in the Act as “a
purchaser at the time of sale or 90 days thereafter,
contract in writing to perform over a fixed period
the term of the limited warranty or service contract
of time, or for a specified duration, services
will govern the duration of the implied warranties.
relating to the maintenance or repair or both of a
Seems pretty straightforward, but when and how
consumer product.” A “written warranty” is
a dealer may disclaim the implied warranties has
defined as “any undertaking in writing in
been the subject of numerous lawsuits, especially
connection with the sale by a supplier of a con-
when it comes to the issue of service contracts and
sumer product to refund, repair, replace, or take
whether the dealer “entered into” the contract with
other remedial action with respect to such product
the purchaser. Some Courts have held that a
in the event that such product fails to meet the
dealer who sells a service contract is an agent for
specifications set forth in the undertaking, which
the service contract provider, but does not "enter
written affirmation, promise, or undertaking
into" the service agreement. Other Courts have
becomes part of the basis of the bargain between
found that the service contract must originate with
a supplier and a buyer for purposes other than re-
or be the sole responsibility of the dealer. The key
The Dealership argued that it did not
sale of such product.” The key phrase here is “be-
is likely in how the dealership presents the contract
"provide" the service contract because it did not
comes part of the basis of the bargain.” This
to the purchaser and what the purchase
issue the service contract and was not obligated
means that a “written warranty” is given to the
agreement and service contract documents say.
T E N N E S S E E D E A L E R N E W S | NOVEMBER/DECEMBER 2007
follows: “WARRANTY DISCLAIMER. YOU UNDERSTAND THAT THE VEHICLE IS SOLD AS IS WITH ALL FAULTS AND THAT WE MAKE NO WARRANTY OF MERCHANTABILITY AND NO WARRANTY THAT THE VEHICLE IS FIT FOR A PARTICULAR PURPOSE, unless we provide you with a written warranty or service contract within 90 days from the date of this contract. If we do so, any implied warranty will last only as long as the limited written warranty....” In addition to the vehicle, the Customer also purchased a "5 YEAR OR 100,000 MILE" service contract that was issued by another company.
continued on page 10
SERVICE CONTRACT OR WARRANTY under it. The Court of Appeals disagreed. Citing
law that the Dealership was a party to the service
from the Dealership that it would “provide service
the language in the Dealership’s own purchase
contract, just as the Superior Court made a mis-
to [Johnson] in accordance with the provisions of
agreement, it concluded that a service contract
take when it held that the Dealership was not a
the service contract DaimlerChrysler will issue to
was "provided" by the Dealership, as that term is
party to the contract.
the purchaser.” The Customer also testified that
ordinarily understood, since it recommended the
The Court noted that the service contract
purchase of that particular service contract, was
contained conflicting language about who was a
was purchasing the Dealership’s extended
acting as agent for the service contract company,
party to the service contract. Some language
warranty and that DaimlerChrysler was the
earned a profit of $341 on the sale of the con-
supported the conclusion that only the Customer
administrator, she understood this to mean it was a joint extended warranty provided by Daimler-
tract, and the service contract was listed as a term of sale on the Dealership’s purchase agreement. In the case of Johnson v. Earnhardt's Gilbert Dodge, the problem wasn’t the Dealership’s purchase agreement; it expressly limited the implied warranty of merchantability to 15 days or 500 miles, whichever occurred first, in
The key is
Chrysler and the Dealership. Since the language
likely in how the
ship solely to DaimlerChrysler to repair the vehi-
dealership presents the contract to the
the language in the service contract application, the service contract itself and the alleged representa-
purchaser and what the purchase
tions made to the Customer concerning the Dealership’s obligations under the contract. The Customer signed an application and paid the contract price (in addition to the purchase price of the vehicle) for a service
could be read either as a promise by the Dealer-
cle, or as a conditional promise by the Dealership to the Customer to repair her vehicle, the Court found that there was a question of fact that had to be resolved.
accordance with Arizona Law. The problem was
agreement and service contract documents say.
contract that was subsequently issued to her from
It is important for dealership employees to know about the products they sell, as well as what the documents they use say. In the case of limited warranties and service contracts, dealers should make sure that the warranty disclaimers printed on their purchase agreements track the language from the Magnuson-Moss Warranty Act. More specifically, the disclaimers should state that the
DaimlerChrysler. When she experienced
implied warranties do not apply unless the dealer-
mechanical problems with the vehicle, however,
ship provides a limited warranty to or “enters into”
she filed her action against the Dealership
a service contract with the customer on its own be-
alleging breach of the implied warranty of
half. Using words such as “provides” or “gives”
merchantability and attempting to revoke
on a service contract not only causes confusion, it
acceptance of the vehicle under the Magnuson-
often leads to a lawsuit. Remember, it is also im-
Moss Warranty Act. Because it was clear that the
10
when the Dealership’s employee told her that she
portant to make sure that your sales presentation
Customer paid separate consideration for the
and DaimlerChrysler were parties to the service
service contract, the Supreme Court of Arizona
contract. For example the terms “we, us, our”
found that the Court of Appeals erred in finding
were defined as “DaimlerChrysler Corporation,”
that the agreement was a written warranty under
“you, your” meant “the Plan purchaser,” and the
service contract. You can obtain additional infor-
the Magnuson-Moss Warranty Act. It wasn’t as
contract said that the “Plan is a service contract
mation about this and other dealership compli-
convinced by the argument that the Dealership
between you and us” and “we are solely
ance issues by visiting www.keithwhann.com.
had not “entered into” the service contract. After
responsible for fulfillment of the provisions of the
reviewing the language in the documents and
plan.” Other language, however, supported the
alleged statements made by the Dealership, the
position that the Dealership was also a party to
Supreme Court of Arizona found that the Court of
the service contract, such as the service contract
Appeals made a mistake in holding as a matter of
application that contained an express promise
T E N N E S S E E D E A L E R N E W S | NOVEMBER/DECEMBER 2007
and the service contract documents themselves do not imply that the dealership is a party to the
The information contained herein has been provided by Keith Whann of the law firm Whann & Associates, LLC and is for general information purposes only. You should contact legal counsel for specific application. Additional information is available at www.KeithWhann.com. Copyright Keith Whann, August 2007.
TMVC Corner
By Patrick Merkel, Staff Attorney
Focusing On Dealer Issues
The Tennessee Motor Vehicle Commission is currently undergoing a bit of a transition. Bob McKee returned to the Tennessee General Assembly, effective October 1, as Executive Director of a legislative oversight committee. While Bob was only with the Commission for less than a year, the new Executive Director will have big shoes to fill. The Commission has begun to take steps to fill the Executive Director position. The Commission formed a subcommittee to interview applicants and report its recommendations to the full Commission. The subcommittee hopes to have a recommendation for the Commission prior to the November Commission meeting. As staff attorney for the Commission, I review all the complaints filed with the Commission. The most common complaint consumers have against
dealers is that they have not received title to vehicles they have purchased preventing them from registering the vehicle. The importance of closing in titles, in protecting the lien holder’s interest and in fighting unlicensed activity, was discussed by Bob in his last article. The second most common complaint consumers have against dealers can best be described as poor communication - verbal statements and promises made during a sale not being honored, consumers not understanding “as-is” and consumers not understanding conditional financing. While the terms of most deals are limited to the contracts, the better informed your customers are, the likelihood of them filing a complaint decreases. Another big issue facing the Commission is unlicensed sales. As Bob stated in his last article, the Commission takes allegations of unlicensed activity seriously and needs the help of licensed dealers in policing it. If you see curbstoning activity, I encourage you to file a complaint with the Commission. When you do file a complaint, please try to provide as much of the following information as possible: the location of the activity, when you observed the activity, the makes, models and VINs of the vehicles, any contact numbers on the vehicles and your contact information. While the Commission continues to focus on resolving complaints that are filed, there are several issues that are going to be looked at closely by Commission staff. These issues (in alphabetical order) are:
• Advertising - All advertising by dealers must comply with the state’s advertising regulations. • Buyer’s guides - These are required to be posted in all used vehicles offered for sale, and the original copy must be given to the purchaser at the time of sale. • Temporary Tag logs - Dealers must maintain a log of all temporary tags they issue. The log must be kept for 15 months. • Titles - Titles must be closed in with the name of the purchaser at the time of sale.
• Unlicensed sales activity Focusing on these issues furthers the Commission’s goal to provide a level playing field for dealer competition, while protecting consumers from illegal activities and empowering them to make wise decisions. If you have questions or would like more information, please check out the Commission’s Web site at http://tennessee.gov/commerce/boards/mvc/ or contact the Commission’s staff at (615) 741-2711. 12
T E N N E S S E E D E A L E R N E W S | NOVEMBER/DECEMBER 2007
By Laura Patterson
NIADA Opportunities
Opportunities With The Dealer In Mind
NIADA has it all covered when it comes to opportunities for you the dealer. The association’s programs are created to help better secure the future for you, your family and your dealership. NIADA focuses on your education to better your business by providing endless hours of seminars, classes and programs through NIADA.TV. For your family, NIADA’s scholarship program helps provide eligible students resources for their college tuition. And, NIADA offers a state-of-the-art retirement program with your future in mind.
NIADA.TV NIADA.TV provides the solutions and answers that help you operate a more successful business. From the education programs to the virtual trade show, NIADA has your bottom line in mind. The best part is you can view all of them for free. • Legal, Legislative & Regulatory Summary – One of NIADA.TVs highest viewed program focuses on legal, legislative and regulatory developments from Washington, D.C., and around the country. Every month, NIADA General Counsel Keith Whann reports on important issues that impact the industry. • Driving Business – If you’re looking for interesting, fun and informative programs to help you make a real difference in your business, look no further. DJ Harrington covers it all. • T.I.P.S. – These unique and powerful tips to improve performance is a program you don’t want to miss. George Dans, one of the industry’s most sought-after speakers/trainers, provides proven tips on how you can close more deals and make more money. • Street Smart Sales Training – One of the most innovative and in-demand trainer/speaker Paul Webb takes you through steps he’s taken to sell more cars than anyone ever has. • The K.O. Zone – This ongoing series with master dealer trainer Kelly O’Connell gives you real-world tools you can use today. You too can Knock-Out the competition by tuning in to this new program. 14
The association’s programs are created to help better secure the future for you, your family and your dealership. • Automotive Digest News – You can find out the latest in auto industry news with this new program. Chuck Parker hosts this TV program as he goes one-on-one with key industry leaders and vendors who are on the cutting edge of technology. • Virtual Trade Show – In this one of a kind event, vendors create virtual trade show booths. NIADA knows how hard it is for dealers to get away to attend the many automotive conventions and expos held around the country. This program gives you a hands-on “virtual experience” of products and services available to help you improve your business. You should tune in regularly. Now, there is more than 300 hours of dealer education available, and new programs are added monthly.
Scholarships Historically, the association’s scholarship program was the responsibility of the NIADA’s Auxiliary. Now, the NIADA Foundation has assumed the oversight of the program’s functions. Four regional scholarships are awarded annually at the National NIADA Convention in June.
T E N N E S S E E D E A L E R N E W S | NOVEMBER/DECEMBER 2007
This program provides funds to eligible students to be paid to the college of their choice. Applications are to be filled out and must be postmarked no later than Jan. 31, 2008. In order to be eligible, students must complete the following criteria: • Be classified as a high school senior; • Have maintained an outstanding academic achievement record as reflected by an official high school transcript; and • Demonstrate an aptitude for college work as measured by SAT or ACT scores. The application process is simple. Submit the completed application form with the required attachments to: Scholarship Selection Committee NIADA Foundation 2521 Brown Blvd. Arlington, TX 76006 Staff reviews the applications for completeness and forwards them to the Scholarship Selection Committee within NIADA and at Northwood University in Midland, Mich. One applicant is selected from each of the four NIADA regions based on the merit of his/her scholarship application and is notified by the Foundation office by May 1, 2008.
NIADA’s Retirement Program Not many people are aware of the benefits of NIADA’s Retirement Program which is administered by NADART, National Automobile Dealers Association Retirement Trust. Your business has the ability to offer employees a state-of-the-art 401k retirement plan. A NADART plan can be included in your employees’ benefit package, which will help in securing a financially stable retirement. The NADART plans average expense ratio is generally at least 1 percent less than any 401k plan in the marketplace. Also, for qualified employers that start a 401k plan, you may be eligible to receive a tax credit of up to $1,500 over the first three years of the plan. To learn more about this great program, contact NADART at nadart401k@nada.org or call (800) 248-6232 ext. 7254.
Where Is The In Today’s Market? E
very week hundreds of thousands of dollars in potential sales – customer leads – walk into car dealerships, yet sales and profits in the automobile industry continue to record mediocre performance. The cost of watching them walk out the door without making a purchase can be thousands of dollars per lead. As a result, automakers turn to incentives to try to make a difference in their bottom line. While some incentives increase short-term sales, Total Vehicle Gross (TVG) typically takes a turn for the worse. People love to buy things, but they hate the feeling of being sold. Most prospects walk into a dealership ready to buy a car. Car buyers rate the helpful attitude of the salesperson as one of the major reasons why they buy their car. None talked about being SOLD a car by the efforts of a persuasive salesperson, but rather they described how a salesperson guided them to a buying experience. When this happens, sales and TVG increase – without incentives – and satisfied customers make referrals and return for additional services and accessories. To create a customer-centric environment involves an ongoing process comprised of training, evaluating, coaching, and retraining. It cannot be accomplished by allocating a lump sum for a one-time, quick fix solution. Customer-centric dealerships help their customers choose three things: 1) The Dealership – the goal is to make the customer glad they came and eager to purchase from you now and over time. 2) The Vehicle – with this, the goal is to guide customers, help them build an emotional tie to the car that meets their needs, wants, and desires; only then talk price. 3) The Selection Specialist – here the goal is to ensure the customer gets “The Red Carpet Treatment.” The Selection Specialist must connect, listen, learn and lead the sale in an inviting and comfortable manner. Next, a training program must be developed and delivered to each and every 16
People love to buy things, but they hate the feeling of being sold. employee, from the Management Team to the Technician. It should encompass every detail required to meet the goals, from changing the vernacular to the sales process and the follow-up. Consider the impact word choices have on attitudes. Instead of using “ups” or “customer,” train your professionals to think of potential buyers, as clients, guests with whom they should foster a long-term relationship. Training should teach employees to use a well-structured and clearly defined sales process. Imagine this: • The Greeter welcomes the guest, collects his/her name and introduces them to a Selection Specialist. (This is where Management begins monitoring the process to support the Sales Specialist on a continuous basis.) • The Selection Specialist says, “I’m glad you are here; my job is to help you select a car and get you a price.” • From there, the Selection Specialist communicates with the customer – listens and learns what the guest needs, wants, and desires. Throughout the drive, the Selection Specialist guides the guest as he/she experience the features that will satisfy their wants and desires, and builds an emotional bond with the car at the same time. • Upon returning, the guest visits the Service Department where the guest receives a thank you gift, then moves to the Showroom to close the deal. • Price is the last point of discussion, raised only after the guest feels at home and
T E N N E S S E E D E A L E R N E W S | NOVEMBER/DECEMBER 2007
By Richard Libin, President of Automotive Profit Builders
has built an emotional bond with the car, dealership and the Selection Specialist. This process results in more closed sales, higher TVG, and more satisfied, long-term clients. For this to work, Management must keep the training program going on a continuous basis using both internal and external resources. Managers record everything that should have been changed based on the newly defined process. With an outside expert such as the teams from APB, the list should be reviewed and adjustments identified. This ensures an external point-ofview can be applied to challenge areas and innovative ideas for continuous improvement.
Simplifying and Supporting the Process Too often today, dealers invest in a myriad of software, hardware and mobile technologies all promising to speed business development, simplify sales, and create a “state-of-the-art” dealership. In cases like this, Managers run the risk of becoming IT Managers and lose focus on their goal: sales. The right technology with the right training becomes an integral part of a customer-centric environment. Where’s the money in today’s market? It comes into your dealership every day. The trick is not to let it walk away by creating a customercentric culture through continuous training. When viewed as a priority with budget as a percent of sales allocated to the required resources, this process will pay back exponentially in increased sales, TVG and lifelong customer relationships. This is not the time to cut expenses but to add to your training investment – training does not cost. It costs not to train. Richard F. Libin is president of Automotive Profit Builders, Inc., a firm with more than 37 years experience working with both sales and service on customer satisfaction and maximizing gross profits through personnel development and technology. He is at rlibin@apb.cc or (508) 626-9200.
AUCTION CALENDAR
MONDAY
TUESDAY
Manheim’s
Nashville Auto Auction
4:00
ADESA Memphis 9:00
Marcka Auto Auction Crossville, TN 6:00
Chattanooga Auto Auction 9:30 Manheim’s
Tennessee Auto Auction
WEDNESDAY THURSDAY Manheim’s
Tennessee Auto Auction
10:30
1-866-5TNIADA (586-4232)
9:00
ABC Nashville 10:00
ADESA Knoxville 9:30
Memphis Auto Auction 9:30
East TN Auto Auction 10:00
Jackson Area Auto Auction 10:00
ABC Murfreesboro 3:00
Airport Auto Auction 5:30
Bristol Auto Auction 10:30
Cookeville Auto Auction 6:00
Clarksville Auto Auction 12:00
Fax 615-443-7486 P.O. Box 2219 Lebanon, TN 37088
FRIDAY
Jackson Area Auto Auction 4:00 ADESA Knoxville 5.30
Out of State Sales (Members of TNIADA) Tallahassee Auto Auction Tallahassee, FL 6:00
VISIT OUR WEB SITE FOR updates, Association highlights and information, legislative news, and much more!
Dealer's Auto Auction Huntsville, AL 9:30
ADESA Atlanta 9:30
Dealer’s Auto Auction Horn Lake, MS 9:30
Manheim’s Bishop Brothers Alabama Auto Auction Manheim’s Moody, AL Atlanta, GA Atlanta Auto Auction 10:00 1:00 9:30 Kelly Auto Auction Gadsden, AL 6:30
HADA Auto Auction Huntsville, AL 10:00 3rd Friday Only
ADESA Lexington 10:00
T E N N E S S E E D E A L E R N E W S | NOVEMBER/DECEMBER 2007
19
The Big Myth Of Automotive Marketing Myth: You Can’t Expect Results Overnight If you can’t expect results overnight, how can you expect to stay in business? There are two kinds of advertising: branding and the kind most dealerships can do. So, for you there is only one kind of advertising, which is hardcore, retail-oriented, directresponse, lead-generating, low-cost, overnightresults-getting advertising. Building a strong, lasting, competitive brand image takes a long time. It’s usually built over generations with lots of clever creativity and TONS of advertising dollars. If you don’t have theme park money, then you can’t have a theme park brand. It’s that simple. That’s why you don’t and can’t spend money directly to brand your business. What you need are results. Although you can’t develop a brand overnight, the good news is…results can happen overnight! If your system is sound, ads positioned correctly and marketing uncovers the emotions of your customers, the results will be immediate. You can turn it on and off like a light switch. If you don’t see results right away, one of these factors was faulty.
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Brandscending More good news! Branding can be achieved – without even paying for it. Many people misunderstand our position about branding and believe we’re saying “branding is bad.” Not so. Paying for brand is bad – unless, you have the time and cash to do it properly. Most dealerships don’t. And for those who do, it’s becoming increasingly difficult due to the mass segmentation of the market. However, building brand for free is a wonderful and very real thing. We like to call it “brandscending.” Brandscending is the process by which your company carves out a clear and definite place in the minds of the people who care most. There are several things involved. Learn who your prospects are and what they want and give it to them. That’s being interested. Have a consistent and unique image that’s attached to all of your “results” oriented marketing. Over time, this can help build residual brand effects.
T E N N E S S E E D E A L E R N E W S | NOVEMBER/DECEMBER 2007
By Travis Miller and Jimmy Vee Offer an experience that is fun, unique or risky. Do something that is worth noticing and worth talking about. As people start to notice and talk, your brand value will increase. The key is this: never buy an ad, say absolutely nothing in it and believe you “built a little brand” or “got your name out there.” You did not.
To learn more about how to separate your dealership from the crowd, like the small used car dealer in a tiny Mississippi town who had to install a deli counter (take a number) in his single wide trailer to control the flow of traffic, request our FREE Special Automotive Business Advisory For Used Car Dealers and Managers, a 32-page industry bulletin titled, How To Uncover The Hidden Wealth Buried In Your Used Car Dealership, by visiting www.RichDealers.com
✁ CURBSTONE REPORT TN Motor Vehicle Commission
FAX (615) 741-0651 DEALER INFORMATION (Confidential) Date/Time Observed: ______________________________________ Reported By: _____________________________________ Fax Number: ________________________ Phone Number: ___________________________ (Bus.)_________________________ (Cell) ____________________________________ LOCATION OF VEHICLE Name of Location: _________________________________________________________________________________________ Address: ________________________________________________________________________________________________ Business_______Shopping Center_______Private Property_______Other_______ CONTACT AND VEHICLE INFORMATION Vehicle #1 Contact Name: ________________________________ Year _______ Make_____________ Model_______________ Color __________ VIN _______________________________ Comments: _______________________________________________________________________________________________ ________________________________________________________________________________________________________ Vehicle #2 Contact Name: _________________________________________________________ Year _______ Make_____________ Model_______________ Color __________ VIN _____________________________________________________ Comments: _______________________________________________________________________________________________ ________________________________________________________________________________________________________ Please attach an additional sheet(s) if more than 2 cars are displayed. Please enclose photographs of displayed cars if possible. Mail completed information to: TNIADA * P.O. Box 2219 * Lebanon, TN 37088 • FAX (615) 443-7486
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Compliance is an interesting word, it means having your dealership’s policies, procedures and paperwork in accordance with the law.
Federal Legislative Activity As Congress returns from its summer recess to a mix of old and new items on the Legislative agenda, we find a number of issues that can have a direct impact on the motor vehicle industry.
CAFÉ Legislation The likelihood of Congress passing legislation by the end of the year to raise the fuel economy of the nation's cars and light trucks is diminishing. Even as the White House has called for Congress to take action, the odds are low of House and Senate leaders overcoming procedural hurdles to begin work on compromise legislation, especially with the calendar filled with Iraq and spending Bills, making it unlikely a conference committee will be appointed until those measures are dealt with.
California’s Lawsuit Against Automakers Is Dismissed A lawsuit instituted by California’s Attorney General against the world’s six largest automakers, claiming that the world’s automakers should be held accountable for the impact tailpipe emissions were having on the environment, was recently dismissed. The Court ruled it is impossible to determine to what extent automakers are responsible for contributing to global warming in California and it is up to lawmakers, rather than judges, to determine how responsible automakers are for global warming problems.
States Can Regulate Greenhouse Gas Emissions Meanwhile, a federal judge in Vermont has ruled that states can adopt their own greenhouse gas emissions rules without violating federal authority for fuel economy regulation. In rejecting the attempt to block state-imposed fuel economy standards, the judge stated that the industry had not proved the regulations were illegal, unsafe or unattainable. Under a U.S. Supreme Court order last April in another climate case, agencies are drafting first-ever federal greenhouse gas emissions limits for cars and trucks. The administration is expected
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to offer its greenhouse gas proposal by year end, but Congress still may have to help mesh new federal greenhouse gas rules with the long-existing fuel economy program. Right To Repair Legislation Returns Right to Repair legislation is back on the forefront after the House Energy and Commerce Chairman reintroduced a Bill that would require automobile manufacturers to disclose to vehicle owners, repair facilities, and the Federal Trade Commission information necessary to diagnose, service or repair vehicles. Similar Legislation has been introduced three times since 2001 without success. This time, a provision that would have allowed lawsuits to be brought against manufacturers if sufficient information is not provided has been removed.
Federal Regulatory Developments NHTSA To Address Safety Issues The head of the National Highway Traffic Safety Administration pledged action on a number of key auto safety and regulatory issues before the end of the year. NHTSA is working internally to figure out a way to come up with a regulatory structure that combines its authority with that of the Environmental Protection Agency's. Emissions Rules The Bush administration is moving ahead on emissions rules to regulate tailpipe emissions as an air pollutant under the Clean Air Act, as the EPA is currently writing broad new rules to limit fuel consumption, as a result of President Bush’s so-called “20-in-10” plan to reduce gasoline consumption by 20 percent in 10 years. New Air Bag Regulations And Fuel Economy Estimates On The Way As of September 1, 2007 all automakers must place frontal and side crash test and roll over rating information on vehicle window stickers. Also, as a result of the 2005 Congressional Order, the stickers will show significantly lower fuel economy estimates for 2008 vehicles because the EPA introduced new testing procedures last December that more closely reflect real-world driving conditions. In one of the most significant safety regulations in recent decades, automakers will have to equip all vehicles with side curtain air bags that provide head and torso protection in dangerous side-impact crashes by 2013. While side-impact crashes account for only 9 percent of crashes, they account for more than 20 percent of auto fatalities. For the first time, NHTSA will require automakers to provide head protection for rear seat passengers.
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Other Activity Of Interest Bankruptcy Filings Increase Consumer bankruptcy filings increased 17.3 percent nationwide in August from the previous month, according to the American Bankruptcy Institute. Data provided by the National Bankruptcy Research Center indicates the figure was also up 31.2 percent from August 2006. Hybrid Sales On The Rise Sales of new hybrid vehicles in the United States are on the rise, up 49 percent in the first seven months of this year, due largely to a boom in sales in the Midwest, which rose 57 percent. Recent predictions indicate total U.S. new hybrid sales will exceed 300,000 this year, comprising just over 2 percent of all sales. U.S. consumers bought 254,545 hybrids in 2006. Case Of The Month Our case of the month involves the advertisement of a car on the Internet, the use of out-of-date paperwork in the deal and confusing practices in the F & I department. It involves dealership compliance. Compliance is an interesting word, it means having your dealership’s policies, procedures and paperwork in accordance with the law. Every dealership should have a compliance program, but it doesn’t happen on its own. Sure, in my 20 plus years representing dealers, I’ve heard many of them say, “I’ve been doing this for many years (you insert the number) and have never had a problem.” Of course, that’s the discussion in the exhibit hall, at the auction or over a cup of coffee. Back at my office, however, I can’t count the number of times I have received a call from that same dealer asking for our help because his streak of luck just ended in a lawsuit or regulatory matter that could cause serious financial harm to the dealership. Fortunately, most dealers don’t rely on a lucky streak and strive for compliance. The good news is that compliance doesn’t have to be as difficult or as costly as many make it out to be. But Compliance is, however, something that cannot be delegated; it has to be handled from the top down, starting with the dealer principal. Who does the case involve and what is the outcome? The case involves your dealership and the outcome depends upon you. Problems or profitability, it is up to you. To help make sure profitability is in store for your dealership, visit NIADA.TV and check out the program titled: Who says compliance can be easy: Me!
By Keith Whann, NIADA General Counsel
Compliance
NIADA LEGAL, LEGISLATIVE & REGULATORY SUMMARY
MANAGEMENT Tips
By Mark Tewart, Tewart Enterprises, Inc.
Define Your Tolerations What are your tolerations? In dealerships, we train and consult with a common theme in management as weakly defined tolerations. The manager lacks a clear and even idea of what tolerations are acceptable or not acceptable. If a manager is not clear about what their tolerations are, they cannot communicate those to the salesperson. When the tolerations are not defined, the staff does not know and by nature will feel out what they can do. The manager then reacts in a negative and sometimes heated manner to correct the behavior. This behavior has now set a pattern for reoccurrence. Sit down and write down what is acceptable and what is not. Clearly communicate what is not acceptable. When you communicate, your staff knows the boundaries. If someone chooses to ignore those boundaries, you must take action immediately. You can't wait to see if it happens again. You can't ignore it and hope the other team members won't follow. You must set and enforce your tolerations. A manager with weak tolerations is forever frustrated and usually blames the team for the problems. However, it's the manager that has set in motion the problems through cause and effect. Lack of action can define the cause as much as action.
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Level of Membership ❑ Dealer: Any individual who is licensed or will be licensed to sell motor vehicles. Dealer License #: ______________________ Year business began: ___________________ Membership Fee: $295
Members Receive:
Coupon Value Over $10,000
ABC Murfreesboro $600.00 Buy/Sell Fees ABC Nashville $600.00 Buy/Sell Fees ADESA Atlanta $600.00 Buy/Sell Fees ADESA Lexington $600.00 Buy/Sell Fees ADESA Knoxville $600.00 Buy/Sell Fees ADESA Memphis $100.00 Buy/Sell Fees - plus $$$ in auction services Airport Auto Auction $600.00 Buy/Sell Fees Manheim Atlanta $200.00 Buy/Sell Fees Manheim Bishop Bros. $1200.00 Buy/Sell Fees Bristol Auto Auction $200.00 Buy/Sell Fees Chattanooga Auto Auction $1200.00 Buy/Sell Fees Horn Lake Auto Auction $600.00 Buy/Sell Fees - plus $$$ in auction services Huntsville Auto Auction $250.00 Buy/Sell Fees East Tennessee Auto Auction $200.00 Buy/Sell Fees Mid-America Auto Auction $600.00 Buy/Sell Fees Manheim’s Nashville Auto Auction $600.00 Buy/Sell Fees Manheim’s Tennessee Auto Auction $600.00 Buy/Sell Fees - plus $$$ in auction services Tallahassee Auto Auction $600.00 Buy/Sell Fees
Primary Business: ______________________ Membership Fee: $295
Sponsor Name:_______________________________________________________ Company Information Company Name: ________________________________________________________ Contact Name:______________________________ Title:_______________________ Address (mailing address): ________________________________________________ City: ___________________________________ State: __________ Zip: ___________ Phone:_____________________________ Fax:________________________________ Secondary Phone: _______________________________________________________ E-mail: _______________________________ Web site: _________________________
FTC Communication Consent Due to FTC proposed rule changes regarding the regulations for faxing information, please read the following and sign below so you may receive valuable and timely information from the TNIADA. I understand that by providing my mailing address, e-mail address, telephone number and fax number, I consent to receive communications via mail, parcel, e-mail, telephone, and/or fax on behalf of the Tennessee Independent Automobile Dealers Association (TNIADA). This consent shall remain in effect until TNIADA receives a written revocation signed by an authorized representative.
X _______________________________________________________ Authorized Signature
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Payment Information: ❑ Enclosed is my check made payable to TNIADA. Please charge my : ❑ Visa ❑ MasterCard Card Number: _____________________________________ Exp. Date:____________ Name on Card (please print): ______________________________________________ Signature: X _______________________________________ Amount: _____________
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❑ Associate: Any business who provides products and/or services to dealers and other related industry workers.
T E N N E S S E E D E A L E R N E W S | NOVEMBER/DECEMBER 2007