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ALSO Online Sales Success: Let Your Listings Do the Talking PLUS State Dealer and Auction Profiles

MOBILE COMMERCE TAKES CENTER STAGE

APR

IL/M

AY 2011

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U.S. Postage

PAIDDALLAS, TEXAS

Permit No. 2079

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WEST COASTDEALER

I N D E P E N D E N T A U T O M O B I L E D E A L E R S A S S O C I A T I O N O F C A L I F O R N I A

ADVERTISERSINDEXAction Auto Recovery ...................................16ADESA.........................................................13Allen L. Hawkins Insurance Services .............. 9AutoTrader.com .....................Inside Front CoverBlack Book ...................................................17

Back CoverLobel Financial .............................................. 7Manheim.com .................... Inside Back CoverNowcom ....................................................... 5Portfolio .......................................................15SmartAuction ...............................................11Western General / Protective ......................... 3

INSIDE

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION

NIADA HEADQUARTERS:

THE WEST COAST DEALER IS PUBLISHED BI-MONTHLY BY THE NATIONAL INDPENDENT 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 INDI-VIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF THE WEST COAST DEALER, IADAC, OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEMBERS OF NIADA, DOES NOT CONSTITUTE AN ENDORSE-MENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT 2011 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED.

EDITOR

Nieman Printing

CONTENTS14 Online Sales Success: Let Your

Listings Do the Talking

16 Mobile Commerce Takes Center Stage

20-21 State Dealer and Auction Profiles

FOR INFORMATION ON HOW TO BECOME A MEMBER PLEASE CONTACT

IADAC OFFICE

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Rod DavisPresidentBrasher’s Auto AuctionRio Linda, CA 95673916 - 991 - [email protected]

David Aah1Chairman of the BoardNorth Bay Auto AuctionFairfield, CA 94534707 - 864 - [email protected]

Mark GloverSr. Vice PresidentAzteca Auto SalesGalt, CA [email protected]

Larry LaskowskiThe Auto OutletRoseville, CA [email protected]

Terry DegmetichSecretaryI - Deal CarsRoseville, CA 95678916-870- [email protected]

Vince CardinaleVice PresidentA to Z MotorsWinters, CA [email protected]

Rick GomezVice PresidentRJ Auto BrokersCarmichael, CA [email protected]

Mike CaseyVice PresidentCal West MotorsSan Leandro, CA [email protected]

Mike Macaulay, IADAC Magazine/Website Chairman [email protected]

I had a personal experience the other day at a Northern California auction after purchasing a vehicle. I tried to write a check for the purchase and was told, “You are over your limit; we cannot sell you this vehicle.” Well, that kind of made me mad, as I pay cash for my entire inventory and have always owned my entire inventory. The auction fixed the problem after a few heated phone calls, but that got me thinking about a subject for discussion.

Auctions set buying limits on dealer customers as a matter of protection against fraud. We all know that’s necessary in our industry. Many dealers, including me, don’t know they even have a limit. Does your auction tell you what your limit is and notifies you of any change? My problem was with an auction that had given me a $200,000 limit. They changed the limit because I had not been there recently to $20,000, but I purchased a $25,000 vehicle. I am not saying this to put any auction in a bad light, but I only want to make dealers aware of this procedure.

Clarity on this issue can only mean good for our shared interests.

Manheim, the world’s largest provider of vehicle remarketing services, cares about its employees, the environment

and the communities it serves. From fundraising drives and tutoring kids after school to supporting long-term conserva-tion efforts, Manheim and its employees are dedicated to giving back to their com-munities and know independent vehicle dealerships across the country share in this commitment.

For the first time this year, Manheim is recognizing and honoring those dealerships by awarding the 2011 National Manheim Community Service Award at the 65th NIADA Annual Convention and Expo. For more information, contact Georgia Brown, NIADA director of education, at 817-640-3838 or download the nomination form at niada.com (click on the Manheim Dealers Edge link under the Services tab).

EDITORIAL COMMENT:

NIADA/Manheim Community Service Award

Mark Your Calendars for the 2011 National Tire Safety Week!RMA’s tenth annual National Tire Safety Week will be held June 5-11.

The annual event is an initiative of the RMA’s “Be Tire Smart – Play Your PART” program, a year-round effort designed to help drivers learn the simple steps they can take to ensure that their tires are in good working condition. RMA is the national trade association for tire manufacturers.

Tire manufacturers and retailers nationwide will work to educate motorists about proper tire care and maintenance. RMA provides tire retailers, auto dealers and automotive repair shops with free “Be Tire Smart” brochures and other materials. Many participating retail outlets use the opportunity to promote tire care through advertising, promotions, free tire pressure checks and conducting media outreach.

More than 22,000 tire and auto service outlets participated in the 2010 National Tire Safety Week. RMA released a survey of more than 5,400 vehicles that showed half with at least one under inflated tire. Nearly 20 percent of vehicles had at least one tire under inflated by 8 pounds per square inch (psi). Under inflated tires waste fuel, risk safety and cause tires to wear out faster.

Tire and auto retailers who are interested in obtaining free RMA materials for National Tire Safety Week can order them online at www.betiresmart.org. Those who have partici-pated in the event before can expect to receive materials again this year.

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Kicking off the new year and his term at the helm of

The meeting covered a number of topics that included the new infrastructure, the scholarship fund, new website features and more.

There were a number of IADAC past presidents in attendance lending their experience and thoughts to the discussion. Those included David Aahl, Terry Degmetich, Don Head, Ray Forest, Bob Henry, John Hiatt and Mike Macaulay. IADAC benefits from the wisdom and experience of those who have given to the association and continue their involvement.

The sponsors of the event should be recognized for their continued support of IADAC. Special thanks to Chris McGuiness with Adesa Sacramento, Kevin Cullop with AUL Warranty Corp., John Brasher with Brasher’s Sacramento Auto Auction, Kevin Sullivan with Nationwide Finance and David Aahl with North Bay Auto Auction.

The attendees were pleasantly surprised to find such a gem at Wine and Roses. The accommodations were excellent as was the food and the staff was attentive to our every need. After the meeting and dinner, some guests relaxed to live music in the lounge. Most of the group staying the night met the next morning for breakfast before beginning local activities or heading home.

The group discussed the next quarterly meeting venue and suggestions were made that would take us to the Santa Rosa area, although other possibilities are being considered. April 29 is the date tentatively set for that meeting. John Hiatt and Bob Henry offered to help select a suitable venue for that meeting.

of 2011 in Lodi. I know that Lodi is not the destination most travelers are looking for, but it turned out to be a great venue! The desserts were out of control huge but I didn’t see many people complaining, and congratulations are in order to Mike Casey for actually finishing his. For those who did not hear the story about David Aahl and his Wii experience, you are missing out – be sure to ask him about it the next time you see him. I have never seen Terry Degmetich laugh so hard.

We appreciate the continued support of many of our past IADAC presidents. We hope that trend continues. Their input and experience in the association is invaluable.

I’m excited about the traveling chapter meetings Larry Laskowski is starting in March. We hope you will support those when they are at your local auction and you get fellow auto dealers to join us, too. We rely heavily on the dealers who understand the importance of the association as a voice of reason to those dealers who don’t. The auction cards alone pay for the membership many times over – seems like a no brainer to me, but I’m just an auction guy, so what do I know?

We look forward to another quarterly meeting in April with even more dealers. We are discussing Santa Rosa, but it is not yet confirmed. If anyone has an idea for a better venue, please let us know.

The next few months should be interesting in the auto business. The supply of used vehicles is the low and the demand is high. Hopefully, new cars, trucks and vans keep selling and the used auto supply increases. Inconsistency is the only constant in an ever-changing business. You’ve made it this far: don’t give up…keep fighting the good fight!

PRESIDENT’S

and dealers are struggling to deal with it. Wholesale prices are on the rise due to a shortage of desirable inventory and there is no evidence it will change soon. Franchised dealers need to see more new inventory to see increased availability of trade-ins. Fewer off-lease vehicles and fewer repos have compounded the problem.

So what’s the fix? Time. As banks begin to relax stringent lending criteria, new auto sales and leasing will improve. More loans, more repos. Time. As we wait for things to get better, a dealer needs to pay attention to the details. The last thing a dealer needs at a time like this is to be faced with a problem that turns his attention from his business, such as a DMV investigation or civil matter. IADAC will be holding meetings at auto auctions near you, and we’ll be bringing you information and solutions to help keep you out of trouble and boost your bottom line.

Remember, IADAC is always working for you, scanning proposed legislation and providing benefits that save you money and help you work more efficiently. Don’t forget your IADAC membership automatically partners you with the National Independent Auto Dealers Association where many additional benefits are available, from prescription drug discounts to reduced shipping costs with FedEx.

So you’re not sure if you’re an IADAC member? Just because you receive this publication doesn’t mean you are a member. Most California dealers receive our magazine, member or not. If you’d like to find out, just contact me. It’s easy to join and I’ll personally guarantee every dealer will save much more than the cost of membership dues. Watch for announcements that detail our traveling chapter meetings and join us for an informative free lunch and solutions to your problems.

STATE EXECUTIVE’S

By Larry Laskowski IADAC State Executive �� By Rod Davis, IADAC President: ��

Quarterly Meeting RECAP OF JAN. 21

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PAST PRESIDENTS

With the major focus this year in

California being the state budget,

we find ourselves very fortunate no

legislation has yet been introduced

to harm the used auto industry!

During the last four years, as many of you know, we’ve had to fight what started to be the three-day right for the consumer to return the vehicle after the sale. Thanks to the lobbying efforts of IADAC, the bill was amended to require the dealer to disclose the fact the buyer could return the vehicle, but had to pay a fee to do so. According to the state DMV, very few customers are not paying the fee to return vehicles.

IADAC was also able to defeat a bill that would have increased your dealer bond to $150,000, an amount that would have put most honest dealers out of business because they could not qualify for the bond. Most people do not understand the bond isn’t insurance, but merely a guarantee the dealer makes to pay back the bonding company should a claim arise.

Is DMV Making You Pay For Bad Checks From the Prior Owner For Registration Fees?

If the answer is yes, you should explain to DMV about vehicle code section 9562 (c) that says if the fees were paid with a bad check, the dealer doesn’t have to pay for them provided the dealer can show proof of a valid sticker on the plate or the registration. Not knowing this can cost you thousands of dollars a year.

Been Ripped Off By Tow Companies For Impounds, DUI Impounds, and Impounds For Driving Without A License?

If you’re the legal owner of a vehicle that gets impounded, the tow company must notify you within 72 hours it has that vehicle. Should it fail to notify you prior to the lien sale date, it can only collect 15 days storage and fees for failing to notify you.

As to impoundments for drunk driving and driving without a drivers license, the impounding agency must notify the legal owner within 48 hours and must release the vehicle to the lien holder, which then must hold the car for the remainder of the impound as required by law and not release it to the registered owner.

Mechanic’s Liens

If you’re holding the note on a vehicle and the registered owner wants repairs totaling more than $750, the shop must contact you to approve the repairs. If it fails to notify you, then files a lien against the vehicle, not only do you not have to pay, but you can go after the company that did the repairs and get up to $ 1, 750 since it failed to notify you for your permission to do the repairs.

As noted above, this information is for members of IADAC. Without this association, you may not be in business today.

If you have any questions about the current statutes and how they affect your business, IADAC members may contact me at 916-806-4326 or [email protected].

I thank all of you for your participation in IADAC!

IF YOU’RE THE LEGAL OWNER OF A VEHICLE THAT GETS IMPOUNDED, THE TOW COMPANY MUST NOTIFY

YOU WITHIN 72 HOURS IT HAS THAT VEHICLE. SHOULD IT FAIL TO NOTIFY YOU PRIOR TO THE LIEN SALE DATE,

IT CAN ONLY COLLECT 15 DAYS STORAGE AND FEES FOR FAILING TO

NOTIFY YOU.

David Aahl, 2009-10Terry Degmetich, 2007-09Luis Estrade, 2006-07Roger Hanke, 2004-06Peanut Renfrow, 2003-04Frank Gromak, 2002-03Luis Estrada, 2001-02Mike Macaulay, 2000-01Bob Henry, 1998-2000Ray Forest, 1997-98Peanut Renfrow, 1996-97Rex Roden, 1995-96Doug Roberts, 1994-95Ed Dohnt, 1993-94Opie Henricks, 1992-93Manny Padilla, 1991-92Greg Hodges, 1990-91Luis Estrade, 1989-90Jerry Cowgill, 1988-89Don Head, 1987-88John Braun, 1986-87Ray F. Glover, 1984-86Pat Matlach, 1983-84Larry Brasher, 1982-83Tom Field, 1981-82Jim McCabe, 1980-81Roy Wilhite, 1979-80Leonard Boyd, 1978-79Jordan Sugarman, 1977-78Bob Dutton, 1976-77Tom Kent, 1975-76Jim Mitchell, 1974-75Vic Snyder, 1973-74Frank Hammer, 1972-73Manuel Rogers, 1971-72John Hiatt, 1970-71Doug Alman, 1969-70Bob Scordino, 1968-69Lucky Skyrme, 1966-68Leonard Cravens, 1964-66Walt Howey, 1962-64Travis Godbold, 1961-62Leonard Cravens, 1960-61Wendall Anderson, 1959-60Dick Rafferty, 1957-69

HONORARY PRESIDENTFrank Murray

By Bill Dohring ��


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FEDERAL ADVOCATESLOBBYING REPORT

F E B R U A R Y 2 0 1 1

��12th Congress IssuesOn Feb. 3, Federal Advocates met with

NADA to discuss upcoming issues for the 112th Congress and various pending matters. As we jointly see it, the issues for Congress are fuel economy and green gas within the context of energy legislation, the Consumer Financial Protection Bureau and its mandates, the Toyota Safety Bill (which we both believe is dead), possible Congressional oversight that may impact the industry and the National Highway Traffic Safety Administration reauthorization effort (a priority of Sen. Jay Rockefeller, D-WV, who’s chairman of the Senate Commerce Committee).

Harrington also mentioned a General Accounting Office study (see separate heading) which Rep. Ed Towns, D-NY, and chairman of the 111th Congress House Governmental Affairs Committee, requested on section 310 of the Senate Toyota bill. It would’ve required dealers to provide info to buyers on a vehicle’s history.

Lastly, we both agreed it’s important to continue monitoring relevant activity of the FTC.

��Consumer Financial Protection Bureau Meetings

On March 4, NIADA General Counsel Keith Whann and Federal Advocates will be meeting with Holly Petraeus, director of the Consumer Financial Protection Bureau’s Office of Service Member Affairs, to introduce NIADA and to discuss various auto industry issues related to the newly-created CFPB. In addition, a meeting request is pending with Richard Cordray, CFPB general counsel, to discuss various consumer auto issues and the soon-to-be appointed Consumer Advisory Board.

��SBA Floorplan Financing ProgramThe federal government relaunched its

suspended floorplan financing program for small dealerships, this time with loan limits of $5 million rather than $2 million. The Small Business Administration’s new rules, which addressed nuts-and-bolts questions of how the financing will work, were published online in the Federal Register on Feb. 8. The Obama administration began a pilot floorplan program in May 2009 during the depths of the recession, but it never got off the ground because of banks’ reluctance to extend credit. A law enacted in September 2010 increased the loan limits and in October, the SBA adopted a rule expanding eligibility for the program to the majority of dealerships. The SBA also suspended the program in October and has been working since with lenders in an attempt to increase their participation. The pilot program will continue through September 2013. To address various issues related to the program, a conference call was held with Whann, and the SBA’s Steven Smits, associate administrator, and Patrick Kelley, senior advisor, Office of Capital Access.

��Department of DefensePam McClelland, a DOD senior

program analyst, has taken over for Dave Julian and Frank Emery in the Office of Military Community and Family Planning in the Office of the Deputy Undersecretary of Defense. Per a conversation with her on Feb. 15, NIADA will send information to her, at her request, on how the association can assist service members in purchasing pre-owned vehicles. Pending her review, a meeting or conference call will be scheduled with Whann.

��GAO StudyThe GAO review was requested by Rep.

Towns earlier last year that focused on the auto safety recall process. As part of the review, GAO is speaking with all of the stakeholders in the process such as dealerships and dealership representatives. GAO’s audit work is nearing its completion and GAO is due to issue the report on June 15. Pending that, Jim Leonard, an analyst with the GAO’s Physical Infrastructure Team, has discussed with NIADA its views on the issue and the role of pre-owned vehicle dealerships. NIADA’s Mike Linn and Whann discussed this issue with Jim Leonard and other analysts of the GAO earlier this month.

��White House Meeting ScheduledA March 4 meeting with Steve Croley,

special assistant to the President for Justice and Regulatory Policy in the Office of Domestic Policy, has been scheduled to introduce the association to the administration and to provide a briefing on its views on auto consumer issues.

FEDERAL ADVOCATES is NIADA’s governmental advocacy partner. To read past lobbying reports, visit www.niada.com/legislative_and_legal.php

As part of the review, GAO is speaking with all of the stakeholders in the process such as dealerships and dealership representatives.


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Building a profitable used auto inven-tory requires having the right information and the talent to know how to use it. Over the years, I’ve been blessed with tremen-dous mentors who have provided me with valuable insights, one of which is manag-ing a used vehicle department is both a

science and an art. While there are no cookie-cutter solutions applicable to every scenario, there are tried and true blocking and tackling strategies that can help any department maximize results.

When it comes to proper inventory mix, there are several ways a dealership can study information to improve volume,

gross and ROI. However, before the infor-mation can be broken down, the store must have the information. While this may seem obvious to some, I am routinely presented with departments that fail to accomplish this seemingly simple task.

Used car managers should be aware, at the very least, of the top-selling vehicles in their market by make, model, and year as well as the top-selling vehicles at their store. All too often when I ask used auto managers to name the three top-selling used vehicles in their markets, they look at me like a deer in headlights. Or, they automatically respond “Honda Accord” or “Toyota Camry.” That’s great! What year? What trim level? What mileage band? How

many of these have been sold at your store in the last 90 days? What was the average age when it was sold?

There are several tools available to help managers accumulate this data, such as Auto Exchange for internal data and Cross Sell for external data. Once this data is col-lected, it is imperative management consis-tently identify which vehicles sell in their market (internal and external). That’s the science part of the equation; it’s not espe-cially difficult to identify commodity type vehicles and, if you’re willing to travel or pay, to procure them. Further breakdown of historical internal and external trends is, however, necessary. Specifically, it would be beneficial to track sales volume, aging, and gross profit for specific COS bands. These could be broken down as follows:

$0 – $5000$5,001 – $10,000$10,001 – $12,500$12,501 – $15,000$15,000-plus

The used auto dealer should be aware of and actively track each of the above cat-egories for each price band in used cars, trucks, SUVs, and vans, comparing the current stocking mix to what has yielded the greatest success. The categories can be broken down further into import/domes-tic categories as well, if needed. This in-formation, coupled with knowledge from external tools, is used to direct buying spe-cific inventory at specific price points to generate specific results.

The art of used vehicle inventory comes from identifying and procuring vehicles that put your store ahead of the curve. For example, a few years back fuel prices spiked and, as a result, highly economic, smaller pre-owned vehicles were sudden-ly at a premium, while large pickups and SUVs could be bought for a dime a dozen. The market was quickly flooded with these gas guzzlers, but few people had the vision or foresight to accumulate them. Those who did were those who had the knowl-edge and experience to understand the

ebb and flow of the used car market, so they loaded up on these vehicles at very cheap prices. It’s not difficult to guess what happened to their profits when the price of fuel went back down.

Recognition of these opportunities is not always easy; often it comes from experience. I believe we are involved in one as I type this column. Thanks to the Cash for Clunkers program, new car inventories are generally low; there are fewer trades in most used inventories and the price of vehicles at auction has gotten higher. While this could mean several different things depending on your market, I would think the poten-tial for increased gross profit, even on vehicles more traditionally thought of as commodity cars, is greater than ever.

Hopefully, you’re tracking the trade capture rate. A normal benchmark for capturing trades is 55 percent of appraisals. Because of today’s mar-ket conditions, I would encourage all managers to aggressively get involved with customers and inquire about their desire to trade their vehicle, as well as ensure your store is appraising every vehicle possible. Further, I believe it’s imperative to improve the appraisal capture rate by 10 percent or more. Used autos are at a premium and the extra money put into a trade has never been a better investment.

This type of forward thinking in-volves risk some dealers simply may not be willing to accept. Those who do so are more frequently ahead of the used vehicle game. The science of used inventory can be resolved by ac-cumulating information, breaking it down (all the way to COS bands, if you really want to be detailed) and buying and trading aggressively according to trends. The art requires experience and guts.

BY BILL MOKRY Bill Mokry is a sales and F&I specialist for Service Group, an insurance and financial services company that provides income development training and ser-vicing solutions to auto dealerships. His many years of dealership experience include several as general manager of a successful used car operation. He can be reached at [email protected].

USED CAR MANAGERS SHOULD BE AWARE, AT

THE VERY LEAST, OF THE TOP-SELLING VEHICLES

IN THEIR MARKET BY MAKE, MODEL, AND

YEAR AS WELL AS THE TOP-SELLING VEHICLES

AT THEIR STORE

THE ART AND SCIENCE OF USED AUTO INVENTORY


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Almost anyone can start selling cars using the Internet today, but those who are most successful give buyers the right information during the shopping

process. Sellers like you can break through the clutter of online used car sales by giving consumers photos, compelling descriptions and vehicle history they want to see while they shop.

If you’re not already online, you need to be. The best way to increase used car sales is to be where the most people shop. Eighty percent of consumers today use the Inter-net to help find their next car. Once your business is established online, you’ve got to make buyers take notice of your online list-ings. This is vital to online selling success.

Consumers visit less than two dealerships on average before deciding to buy. Why so few? Most shoppers narrow their dealer choices down by doing extensive research online – listings, pricing, customer reviews, etc. In fact, when consumers finally do visit a dealership, they have specific cars and prices already in mind and are armed with details about each car.

Typically, shoppers start by visiting third-party online automalls like AutoTrader.com and Cars.com. A quick search can return hundreds of dealer listings for vehicles similar in style and price. Internet manag-ers and used car dealers with online inven-tory know the top concern is getting buyers to notice their cars and contact them. Since you can’t sell online shoppers face-to-face, you have to rely on your listings to do the talking.

So how do you make them stand out from the rest? Focus your marketing efforts on two lead-generating areas that attract the most attention: Search Results Pages (SRPs) and Vehicle Details Pages (VDPs).

Did you know only 4% of online shop-pers that see your listing in their search results actually click through to the detail page for your contact information? For all the money you spend to post your cars for sale online, it’s in your best interest to high-light your inventory properly.

The SRPs and VDPs are the most promi-nent places to communicate the value of your used car inventory online. When a

shopper clicks on an SRP listing, they go to the VDP to browse additional photos, read about features, see the vehicle history and locate the seller. The key is getting more shoppers to notice and click your SRP list-ings so you generate more leads from your VDPs.

The vehicle description you provide on SRPs is your first opportunity to tell con-sumers what they should know. SRPs give you a limited amount of space to market your vehicles, so use that space wisely. Be brief but informative. A vehicle descrip-tion should not be exclusively technical. Remember, shoppers don’t know as much about cars as you do and detailed features may not mean as much. Things like auto-matic transmission, power windows and air conditioning, which are standard on most vehicles, shouldn’t be the focus of your sell-ing points. You don’t want potential cus-tomers glancing past your listings because they didn’t peak their interest.

Generally, your listings also include a small photo when they appear on typical SRPs. It might sound obvious to seasoned sellers, but photos are one of the best ways to grab attention of shoppers during their online used car search. Use the best full-length photo for the small ‘thumbnail’ im-age on your SRPs and save detailed images of the interior and other angles for consum-ers to browse while on the VDP.

There are several quick improvements that can make your listings more attractive to online shoppers. One is to use relevant information to attract attention. The more details you can provide the better your listings look. For example, it’s easy to find hundreds of ‘2005 Ford Explorers’ with the same trim package for sale online, so make sure you tell potential customers why they should buy yours.

Try to describe the car’s benefits unique to a specific customer – as if they were standing in front of you. For example, you might say, “this van comfortably fits up to eight people” or, “we offer low financing on all our cars” or, “this car shows no reported recalls and comes with a Carfax Vehicle History Report” in the vehicle descriptions on your SRPs.

To connect with more online shoppers, you need to think like one. You can compete online and sell cars faster by giving buyers relevant information to help them make an educated decision.

Another great way to build confidence with online consumers, in addition to pro-viding a good photo and description, is to link your Carfax Reports to your SRP and VDP listings. You’ll stand out on SRPs by offering these reports free. Plus, being open and up-front builds trust with online shop-pers, making them more likely to buy from you.

Top dealers consistently get more leads because they pay attention to how their car listings appeal to online consumers. Build consumer confidence by providing trusted information in your listings. Make your SRPs stand out in the crowded online marketplace and more shoppers will click through to your VDPs. More clicks equals more leads and ul-timately, more sales.

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

SO HOW DO YOU MAKE THEM STAND OUT FROM THE REST?

FOCUS YOUR MARKETING EFFORTS ON TWO LEAD-GENERATING

AREAS THAT ATTRACT THE MOST ATTENTION: SEARCH RESULTS

PAGES (SRPS) AND VEHICLE DETAILS PAGES (VDPS).

Top dealers consistently get more leads because they pay attention to how their car listings appeal to online consumers.

ONLINE SALES SUCCES S: L E T Y O U R L I S T I N G S D O T H E T A L K I N G

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Portfolio General Management Group and The Warranty Group/First Extended have joined NIADA to jointly provide the best profit solutions to independent dealers who sell vehicle service contracts and other ownership protection products, such as GAP, anti-theft and appearance protection. The unique benefit of the offering is NIADA dealers will profit from VSC sales and from premiums and investment income.

Portfolio and The Warranty Group are the nation’s leading providers of reinsurance management for F&I products sold in dealerships. The dealer’s profits from reinsurance are considerable. Since 1990, more than three million Portfolio contracts have been issued totaling more than $1.2 billion put into dealer-owned reinsurance companies. After claims are paid and investment income earned, Portfolio dealers average an after-tax return of more than 40 percent of the money put into their companies. Reinsurance is the NIADA dealer’s best way to profit twice from the same sale in the dealership.

“We see no reason why NIADA dealers should not have the same profit opportunities that franchised dealers have enjoyed for years,” said Steve Burke, Portfolio president. “Portfolio’s philosophy of 100-percent ownership by the dealer means that they can build a new personal wealth asset from activities already taking place in their dealerships. We joined NIADA to help its dealers take advantage of this opportunity.”

Patrick Donahue, president of Resource Dealer Group of The Warranty Group, said, “We are looking forward to working with Portfolio’s agents to help NIADA dealers choose the best option in a dealer-owned program. Our First Extended Service Corporation and Resource have worked hand-in-hand with Portfolio for over two decades as allies in the effort to give the dealer every available benefit from being in this business.”

Jeffrey Braatz, NIADA’s 2009 National Quality Dealer of the Year, welcomes Portfolio to NIADA and recommends them highly. “Five years ago, I didn’t think such a program could be true to its promise,” he said. “Now I not only have a personal asset to take care of my family’s future, but one that helps me take care of my customers.”

FOR MORE INFORMATION, VISIT WWW PORTFOLIOREINSURANCE.COM OR CALL STEVE BURKE AT 877-789-6200.

Portfolio, The Warranty Group/First Extended Join NIADA

®

A Washington state man is going to jail for a finance scam authorities said hurt independent dealers across the U.S. Steven P. Drury, of Vancouver, Wash., was sentenced in early February by a U.S. district judge to two years in prison and three years of supervised release for money laundering. Judge Benjamin H. Settle ordered Drury to pay $219,000 in restitution to various car dealers who were victimized in the scheme.

In 2005, Drury established Auto Credit Solutions. For three months during 2005 and 2006, the company marketed itself to used auto dealers claiming for a fee it would bundle a dealership’s

auto loans and market them to investors, essentially selling the car dealers’ collectable debt. For this service, Auto Credit Solutions required the auto dealers to pay Auto Credit Solutions the car buyers’ first two to three months’ payments. The company collected the fees, but never marketed the loans.

In his plea agreement, Drury agreed Auto Credit Solutions had fraudulently charged more than 50 dealers $122,000. He also agreed to make restitution of $541,124 to dealers who had dealt with other similar businesses he had been charged with operating (including Sub-Prime Financial Services, Easy Credit Store, Instant Funding Systems, Great Northwest Financial Services, and Western Empire

Financial Services). However, because not all of the dealerships could be identified from available records, the amount of restitution that could be ordered was $219,000.

Drury was indicted April 15, 2010, and pleaded guilty Aug. 3.

His co-defendants who participated in the scheme face shorter prison terms. Last November, Shannon Huggins, 33, also of Vancouver, was sentenced to four months in prison and six months of home detention with three years of supervised release. Ben King, 31, another Vancouver resident, will be sentenced in March. Both pleaded guilty to mail fraud.

MAN WHO PREYED ON DEALERS GETS FEDERAL SENTENCE


can attract and retain customers.What are consumers browsing with

their smart phones? The same types of items they started browsing on comput-ers: researching purchase decisions, cost comparisons and finding the location of physical items.

Recently, eBay reported a substantial increase in mobile traffic, where sales more than tripled in 2010 to near $2 bil-lion in gross merchandise volume. Last year, vehicle purchases led all categories on eBay mobile applications in terms of GMV, while parts and accessories were number two in terms of the total number of items purchased.

Dealers know when they have a physi-

cal lot, customers still come to kick the tires when the sales office is closed. Now, today’s consumer might still come to the lot, but he or she will also pull out a smart phone, check the hours of the dealership and research the same make and model for competitive pricing.

The same thing is happening even if the consumer doesn’t drive to a physical lot. A consumer may be in his garage working on a car and need to find a part or acces-sory. Instead of going inside and turning on the computer, he’s browsing his smart phone to find the part, price and local availability.

Just as e-commerce has completely changed the way we do business, wireless devices and smartphones are again alter-ing what we know about consumers’ pur-chasing behaviors. Seeing similarities in mobile commerce and e-commerce, auto dealers ask themselves a familiar ques-tion: would anyone really buy a car from their smart phone?

In 2010, more than $118 million in car and truck purchases were made via the eBay mobile application – more than 12,600 vehicles were sold. Parts were the second biggest category in mobile last year, with more than 911,722 parts pur-chased, and more than $60 million in sales.

For independent dealers, mobile ap-plications and mobile commerce are the must-have digital tools of 2011.

With smartphones capable of surfing, downloading apps and co nnecting with coworkers and friends in an instant, re-searching and shopping for vehicles, parts and services is a natural extension.

For example, a business traveler wait-ing at an airport may use that downtime to look for a needed part for his car or browse available vehicles for a new truck. If an independent dealer’s inventory is not readily available on a mobile app, chances are there’s an entire customer segment that may not see what’s for sale.

A recent ForeSee Results survey found 30 percent of consumers used a mobile phone to research products on the Inter-net, compared with 11 percent in 2009.

This past holiday season, surveys and

statistics showed what many analysts

and industry observers were thinking:

mobile commerce is growing by leaps

and bounds, and every industry is in on

the trend, including automotive.

In 2011, smartphones are forecasted to account for half of the mobile phone mar-ket, according to The Nielsen Co. On top of that, an ABI Research report says mo-bile online shopping will generate $119 billion in sales by 2015, accounting for 8 percent of the e-commerce market.

When car dealers make it easy for their business to be found through a mobile web browser, loyalty campaigns, market-ing initiatives, text promotions and sales

W I T H C O N S U M E R S L O O K I N G F O R V E H I C L E S , P A R T S A N D A C C E S S O R I E SM O B I L E C O M M E R C E

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APRIL/MAY 2011 T H E W E S T C O A S T D E A L E Rw w w . i a d a c . o r g

Those making a purchase through a mo-bile phone increased from 2 percent in 2009 to 11 percent in 2010.

For example, Tilo Steurer, founder and owner of Eurocar, the West Coast’s larg-est independent dealership of its kind, sells and buys vehicles and regularly uses eBay’s mobile app to buy cars, parts and accessories.

“I purchase anywhere from five to 10 cars every month, most of the time through the eBay mobile app,” Steurer said. He also uses the eBay mobile app to keep track of his business while not in the office.

With any form of sales – online, mo-bile or in-store – customers consider the credibility of the seller and business before making a purchase. Building that credibility takes consistent communica-tion, which is made easier when dealers can keep in touch through mobile and online sources.

“Communication is very important, especially when making an expensive online purchase such as a luxury car,” Steurer said. “With the eBay mobile app, I can respond more quickly to customer questions, which builds credibility and increases the opportunity for a sale.”

To accommodate this growing trend, eBay Motors is launching a mo-bile app that will provide a customizable buying experience optimized for vehicles, parts and accessories, as well as unique social and community features for the enthusiast.

Features include VIN scanning and a virtual garage to give enthusiasts person-alized information. After searching for a vehicle, users can share it with friends and social networks or ask the seller a question. Users can create “car cards” for their vehicles which display photos and stats about the vehicle and can be used in searches for parts and accessories.

On the garage tab, consumers can in-put and store the vehicles they own or scan the VIN barcode with the iPhone’s camera to populate information. In the garage, car owners can create to-do list for vehicle projects, store custom parts

searches and share the garage with their social network.

For dealers, having parts, accessories and vehicles at a consumer’s fingertips is an ideal way to extend marketing and sales without a lot of development and technical effort.

Mobile commerce is still in its infancy but is growing at a faster pace than e-commerce. With the Internet available wherever consumers are with their smart phones, it’s only a matter of time before mobile commerce becomes a dominant form of purchasing. Because of the similarities to e-commerce, consumers are quickly adopting m-commerce and expecting businesses to be on board.

FOR DEALERS, HAVING PARTS, ACCESSORIES AND VEHICLES AT A CONSUMER’S FINGERTIPS IS AN IDEAL WAY TO EXTEND MARKETING AND

SALES WITHOUT A LOT OF DEVELOPMENT AND TECHNICAL EFFORT.

BY CLAYTON STANFIELD, EBAY MOTORS

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More than 50 percent of used vehicles

listed for more than 30 days have at least

one price drop, according to a study

released in late February by leading online

automotive community CarGurus.com.

Think about the top concerns your customers have when shopping for a used car: previous damage, maintenance, ownership history, and of course, price. Tools like Carfax Vehicle History Reports are readily-available through various mobile devices to verify this important information

and bid with confidence. Having your mobile device handy helps you tie it all together quickly and successfully acquire the right cars for your lot.

Today’s mobile devices provide access to information that brings transparency and process effi ciency to dealers. The possibilities mobile is opening up for our industry are truly extraordinary – and in the current economic climate, leveraging new and user-friendly technology is key to moving more cars and saving money in the process.

Used Auto Prices Reduced After 30 Days

NIADA members can save up to 29 percent on select FedEx® shipping services. For more information or to enroll in this program, visit www.1800members.com/niada or call 800-636-2377 (8 a.m.–6 p.m. Eastern, Mon.-Fri.).

Renting a car just became easier and economical with the new Thrifty Car Rental Discount Program for NIADA members. Visit www.thrifty.com/?iata=00227148&PromotionCode=NIADA to receive a 5 percent discount off Thrifty’s already low rates anywhere or any size vehicle in the U.S. A 24-hour advance reservation is required and reservations can only be made through this URL or via the link on the NIADA website. Offer is valid for travel until Dec. 31, 2011.

AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the United States with over 4,350 stores across 48 states, the District of Columbia and Puerto Rico. NIADA members have access to AutoZone’s “hot-shot” delivery program including discounts on more than 750,000 product level SKUs in over 70 distinct product categories. For more information, view www.niada.com/dealers_edge.php

Product Discounts for NIADA Members

Confused about what the Internal

Revenue Service requires from dealers at

tax time?

Don’t worry, as the IRS has an entire section of its website dedicated to automotive businesses. We’ve included a few tips here.

As most dealers already know, the IRS requires each person engaged in a trade or business who, in the course of conducting that trade or business, receives more than $10,000 in cash in one transaction or in two or more related transactions must file a Form 8300. The agency recommends filers should keep a copy of each Form 8300 for five years from the filing date.

Form 8300s should be filed by the 15th day after the date the cash was received. The form should be filed on the next business day if that date falls on a Saturday, Sunday or legal holiday. The filer must give a written statement to each person named on a required Form 8300 on or before January

31 of the year following the calendar year in which the cash is received and a copy of this statement kept for your records.

Changing your accounting method? That generally requires IRS approval. To get approval, you must file Form 3115, Application for Change in Accounting Method. A change in your accounting method includes a change not only in your overall system of accounting but also in the treatment of any material item.

If you finance the purchase of your property, instead of having the buyer get a loan or mortgage from a third party, you probably have an installment sale. It is not an installment sale if the buyer borrows the money from a third party and then pays you the total selling price.

FOR MORE INFORMATION, VISIT WWW.IRS.GOV/BUSINESSES/SMALL/INDUSTRIES/ARTICLE/0,, ID=98978,00.HTML .

IRS Offers Helpful Auto Dealer Tax Tips

V IE W OV ER 450 HOUR S OF DE A L ER EDUC A T ION SE S S ION S A S W E L L A S

O T HE R S P EC I A L T R A IN ING S E MIN A R S A ND MON T HLY DE A L ER T I P S 24/7 A T

W W W.N I A DA .T V

SPRING INTOACTIONNOW


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2011Used CarMarket Report

How have independent dealers adjusted their businesses

in the last three years?

Independent dealers have faced unprecedented challenges in the last three years. Even though the overall economy is improving, dealers are still struggling with limits on inventory and consumer credit. But dealers are resilient and have adjusted by stocking fewer vehicles and focusing on the types of vehicles that turn quickly. Solid inventory management underpins the successful dealer. Many dealers have retrained employees to ensure that everyone is contributing to the success of the business. Employee productivity has improved as staffs have been reduced to the cur-rent level of sales. In the process, we have learned to run our stores more efficiently. We have also seen a shift to the Buy-Here, Pay-Here model by dealers who have access to capital.

In our store, we have cut in half both our staff and our inventory. We have also expanded the number of lenders we rely on to finance our customers. We are now sourcing some inventory online, buy-ing vehicles that will sell quickly, and generating more sales based on specific customer orders.

How are independent dealers coping with the shortage

of used vehicles?

Independent dealers are confronting two challenges: higher prices and fewer pre-owned cars in the marketplace. Independent deal-ers are spending more time and effort to find the right inventory. Everyone is going to more auctions, both online and in person, as well as tapping local wholesale sources. Some dealers have been very successful in buying inventory directly from private owners.

Three or four years ago, dealers were able to find plenty of vehi-cles under 70,000 miles and three or four years old at acceptable prices. But independent dealers have modified the age and condi-tion guidelines to reflect what their customers can afford. As a result, dealers are doing more reconditioning to get vehicles front-line ready.

You are quoted as saying “We will never go back to

business as it was in the past.” Can you explain what

you meant by that?

Our business model has changed. New car dealers are getting more into the pre-owned business, so we have to meet that challenge. Franchised dealers offer service departments, larger facilities, and access to newer inventory.

NIADA members know that they have to continue to improve their business skills and adapt to this new competition. NIADA can teach dealers to run more efficient operations, but the business of sell-ing cars is still about knowing your market and your customers and being responsive to their needs.

Independent dealers need access to information to enable them to make quick decisions. NIADA helps independent dealers stay abreast of the national and local economic, regulatory, and busi-ness issues facing our industry and each dealer.

How is NIADA monitoring the potential rules under the

new Consumer Financial Protection Bureau?

We have encouraged members to stay connected with one another by attending local and national meetings and by contact-ing their legislators on issues that could impact our business, in particular Buy-Here, Pay-Here. The NIADA website includes a blog where dealers can find information on local and national issues and answers to their specific questions.

You are a strong advocate for dealer education. What

resources does NIADA provide dealers?

NIADA is serious about education, and we recognize that it is one of the strongest things we have to offer our members. Knowledge is power, and what you don’t know can hurt you. Our three-day Certified Master Dealer Program gives dealers the critical skills and information they need to meet the challenges of operating successfully in a challenging environment.

NIADA and its industry partners provide dealers with online and in-person training that covers the full range of inventory and deal-ership management topics. For example, the NIADA/Manheim partnership teaches dealers how to buy and sell vehicles online through The Wholesale Institute training on NIADA TV.

Anthony Underwood was named president of NIADA in 2010. He started selling cars in Alabama in 1977, and he opened his first dealership in 1994 with five vehicles. Anthony’s two stores sell a combined total of 800 vehicles each year. He has been an active member of the NIADA and Alabama IADA for many years. Anthony has served on the boards of both NIADA and AIADA. He was named NIADA National Quality Dealer of the Year in 2003 and, that same year, earned his Certified Master Dealer certification.

Q&A With NIADA President Anthony Underwood:

National Independent Automobile Dealers Association (NIADA)

��

w w w . i a d a c . o r g T H E W E S T C O A S T D E A L E R APRIL/MAY 2011

20

Since opening Guy Strohmeier’s Auto Center in May 2000 in Lakeport, Guy says “Luke 6:38 has been one of our foundational blocks for success.” He’s one of the few Certified Master Dealers in the nation. Having passed the CMD class from Northwest University with professor Joe Lescota has been one of the keys to riding out the last 11 years in this tumultuous economy.

His service department is another key to the store’s growing success as an independent. The dealership has a California Gold Shield Smog Station and Service Manager Jeff Smart has worked to make them a NAPA Auto Care Service Center, bringing value and name recognition to their dealership.

Most people who visit Guy’s dealership say “it feels nothing like the dealerships they have frequented over the years. Their vehicle locating service allows them not to feel pressured to buy that day, but by leaving a description of the vehicle they want and Guy will find it.”

Guy started working for Bill McVey of Airport Auto Brokers in Lakeport in 1989.

After 11 years, he decided to venture out on his own. Now, 11 years later and 8,000 vehicles sold, he opened a second location in Ukiah.

“In order to find the 50 or so retail cars and 10-15 wholesale cars we need each month, I have to depend on my relationships with auctions like ADESA Sacramento and their great staff,” he says.

Guy encourages other dealers to join their local and national associations like IADAC, which Guy Strohmeier’s Auto Center has been a member of since he opened his doors.

The dealership has been blessed to give away to the Lake County community over 25 vehicles to the Boy Scouts, High School Sober Grad Nights, Reading Programs and Little League Baseball.

Guy believes in Proverbs 22:1A: “A good name is better to be chosen than great riches,” and says, “Giving is our number one form of advertising. If someone makes the effort to come into the dealership, we are going to help in some way.”

THE “BOOK”

BROTHERS IN THE BUSINESS

the Sacramento area. From working in all aspects at franchise dealers to owning an independent car lot, they’ve done it all. Most dealers throughout the state have met one or more of the LeDouxs.

Tom LeDoux helped with membership development in the early IADAC days. He was always willing to mentor fellow dealers trying to make it work.

Brother Jim passed this last year. No one can remember Jim without a big smile and firm handshake. He was always ready to make a deal!

Jerry and Chuck are still plying their trade and looking for one more home run.

Pictured with the brothers are sisters Loraine and Gloria.

�


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BY MIKE MACAULAY, IADAC MAGAZINE CHAIRMAN

PROFILE:

Since the Silver State doesn’t have an active association, many dealers there see value in joining IADAC.

Harry started in the car business working for his dad in the early 1970s. He opened his first Harry’s Quality Cars store in 1974. Harry now owns and operates two locations in Reno, Nev.

The main theme for his success is selling high-quality vehicles to a growing Northern Nevada market. Sales average about 80 units a month, with Buy Here-Pay Here a main focus. Many BHPH dealers sell lower-priced vehicles, but Harry instead sells nicer vehicles, plus he’s careful in choosing customers and has a low loss rate. “Reno is a high transient area, so we are very careful on picking the right vehicle and customer,” he says.

An active member of his community, Harry knows success has responsibilities and he thinks long-term involvement is key to a strong customer base. Harry met wife Paula at the Reno Auto Auction (now Brashers Reno Auto Auction). Paula was the office manager at Brasher’s and now she runs the office operations for Harry’s Quality Cars.

��

Brasher’s Reno Auto Auction is run by Jeff Brasher and Scott Crane, assistant general manager. The sales, office and lot staff are professional and ready to assist dealers make their auction experience a success. They are known for warm and outgoing hospitality. Brasher’s Reno has consignment and attendance from all over the Western states. Many California dealers regularly attend the Wednesday sale. Brasher’s welcomes all dealers and participates in the IADAC Auction Card program.

The auction has monthly truck, RV and SUV sales. A big “Spring Break Out” sale is planned for in early May. Many thanks to Brasher’s Reno Auto Auction for participating in all of IADAC’s endeavors!

AUCTION PROFILE: ��

��Shown here with Harry is Scott Crane, assistant general manager of Brasher’s Reno Auto Auction.


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IADAC’s recently updated website, www.iadac.org , has a new feature that is of great value toour members. It is a Question and Answer (Q&A) blog for the use of our members. Memberscan ask any industry related question. We have a panel of industry experts that will give theirbest opinion on the matter at hand. This service is free to our members.

This feature is unique to California. We are leading the way, nationwide, to providing real timeinformation to our members. Just think; the next time you wake up at 3am with an issuebugging you……..click on to us and ask!

P.O. Box 343 , Roseville, CA 95661��

Here’s how it works:

1) Send an email to IADAC through our websiterequesting your login and password(all members have them issued)

2) Log in to the “Members Only” section, usingyour login and password

3) Check our library of FAQ (frequently askedquestions) for the answer to your question

4) Ask your question, giving us as muchinformation/background as possible - we wantto get it right the first time.

5) Your question will be answered within acouple days - you will be sent a link to theanswer posted on our site, and the Q&A will beadded to our FAQ!

Please email Mike Macaulay directlywith any concerns or advice to helpget the ball rolling. Spread the wordto all your friends!

Mr. Rey Guluarte, of Autos Guluarte- El Centro, CA, has volunteered totranslate any questions posted inSpanish.

Mike MacaulayIADAC Magazine/Website ChairmanEmail- [email protected]

S TAT E W I DE W E B S I T E F E AT U R E S A N N O U N C E D!


25


Social media continues to be a white-hot subject. It’s fueled in no small part by the top players in the field that are beginning to

look more like financially viable businesses. Twitter is predicting $150 million in revenue this year. Foursquare has six million users and its co-founder would have you believe it’s worth $250 million. Facebook banked an astonishing $1.86 billion in revenue in 2010 and some analysts value the company at $50 billion.

That’s not bad for a set of businesses the oldest of which hasn’t seen a seventh birthday.

Social network users are engaged on an hourly basis sharing family pictures, relationship status, resumes, and opinions on every subject imaginable. A growing number of consumers have both personal and professional profiles and an overwhelming 93 percent of those active in social media expect businesses to have a social media presence.

Many independent dealers know this is a powerful and influential space, but only a minority are clear about how to manage their presence and what, if any, ROI can be derived from a commercial online presence.

It’s important to remember the five laws of social media.

It is social

This means that all social media interaction is about a conversation between at least two people. Many dealerships make the mistake of operating in a broadcast mode, blasting out information about sales, products, and business offerings. In the social space, this is unwanted noise. The magic happens when the employees of the dealership, customers, potential buyers, and brand enthusiasts all build an organic discussion around individual objectives. Dealers want to sell cars. Consumers want to get to and from work reliably, express their style, and get a good deal.

One dealership in the Southwest offers a regular schedule of updates that includes maintenance and performance tips updated by its chief mechanic, as well as the latest information available about vehicle reliability. Site guests believe the dealership isn’t just trying to sell them just any car, but a car they can rely on.

It is personal

The most effective social online presence comes with a face and a personality. The important thing for dealers to know is a real human advocate creates credibility with customers. The communication style should be personal, too. Dealers know their markets and their customers. Great online community mangers talk to guests as if they were standing on the showroom floor.

Top social marketers have potential customers arrive at the dealership shaking hands and saying how good it is to finally meet.

Content is kingThose interested in your social media

presence have an expectation you’ll deliver information they can use. Customers see the dealer as an authority on automobiles. They look to dealerships for information that will guide them through a sea of choices to the car best suited for them. Dealers delivering online content on things such as vehicle reliability, overall satisfaction and trends are far more likely to have shoppers visit their store.

Don’t spam

Social media sites are not substitutes for radio, TV or newspaper advertising. Community members aren’t interested in sale specials, inventory, financing or information if those things aren’t catered to their specific needs. This does not mean dealers shouldn’t post inventory for customers to see; what it does mean is dealers shouldn’t blast fans with service deals and lowered prices. In social media, a business or a friend can be banished with one click.

Listen and respondThis one seems easy, as most businesspeople

think they do this all the time. The challenge here comes when a complaint or perceived slight is posted in an open forum. The first reaction for most is to be defensive or, at least, to explain a gripe away. That has proved to be discrediting and incites the audience to defend their position. The proven, successful response is to fully recognize an unhappy comment and ask how to make it right. Customers who complain about an issue aren’t trying to hurt the business; they themselves are hurt. These people were expecting a successful experience and are letting management and the world know they didn’t have one. Forget the problem and get them to the solution. Credibility will skyrocket. DONALD FOY is the executive director of Manheim’s DRIVE Center. In that role, he oversees innovation research, discussion and testing for Manheim. Contact him at [email protected] and visit his blog www.matters2me.com.

MAKING SOCIAL MEDIA Work for Your Dealership BY DONALD FOY


26


The FTC’s risk-based pricing notice requirements became

effective Jan. 1. To comply with these requirements, dealers must alert consumers when they are getting different credit terms than others based on credit information. The good news is the requirements give options for how and when you provide the notice. That’s also the bad news because the options and exceptions can make it difficult to figure out if you’re in compliance. To help you sort through the maze, here are some of the important exceptions and how they apply to you.

Your dealership doesn’t need to provide a notice if:You don’t do risk-based pricing of credit terms. This applies if every consumer whose application is approved is offered credit on the same terms. You don’t use credit reports in any way to make a credit decision. If your dealership directly contacts employers and other references and is not otherwise using any third party information, then the risk-based pricing notice is not required (it sounds rare, but there are dealers who qualify for this exception).

A notice isn’t required for a specific transaction if:The credit requested is not for a consumer purpose (personal, family or household use).The transaction is a consumer lease. The consumer applies for a specific credit product and is approved for those terms. You offer specific terms to a pre-screened group and extend credit on the offered terms to one of them. The consumer is a co-signer (which is different from a co-borrower), guarantor, surety or endorser in the transaction.The consumer’s application is denied and you provide an adverse action notice. You provide the consumer with the credit score disclosure instead of the risk-based pricing notice. The disclosure is an alternative form authorized by the regulations. If you use it, you must provide it to all consumer applicants instead of providing a risk-based pricing notice only to the portion of applicants who are not receiving your most favorable credit terms.

It is likely some of these exceptions apply to your dealership and its transactions. Before relying on an exception, review the regulation or discuss it with your legal counsel to be sure you implement it correctly. The regulation can be found at 16 CFR §§ 640.1-.6.

BY CHIP ZYVOLOSKI Chip Zyvoloski is senior attorney for indirect lending at Wolters Kluwer Financial Services. For more information, visit www.wolterskluwerfs.com/indirect.

Sorting Through Exceptions to the Risk-Based Pricing Notice

Our team at Manheim Consulting had the pleasure of interviewing NIADA President Anthony Underwood for a question and answer session discussing the state of the used vehicle market from the perspective of independent dealers as we compiled the recently released, 16th annual Used Car Market Report (UCMR).

Underwood framed the challenges facing independent dealers in a way that confirmed what our data was telling us: independents are encountering higher prices for inventory at the wholesale level and finding fewer pre-owned vehicles in the marketplace.

In response, these dealers are focusing on sound inventory management practices, and using all available sales channels – including online – to source just the right inventory to meet their customers’ needs. We examined these and other trends in the UCMR, which is Manheim’s annual analysis of the forces shaping the used auto industry. As part of the Manheim-NIADA Dealer’s Edge partnership, I’m happy to let you know you can download the entire report free of charge by taking a very brief survey at www.surveymonkey.com/s/manheim.

As a comprehensive analysis of the trends shaping the automotive industry, the 2011 UCMR contains much more valuable information pertaining to independent dealers, as well as chapters on other aspects of the industry, including rental, leasing, fleets, repossessions and salvage. I encourage NIADA members to download their free copy of the UCMR, and as always, please e-mail me any time with your questions.

BY TOM WEBBTom Webb is chief economist for Manheim Consulting. Contact him at [email protected], follow him via Twitter at www.twitter.com/TomWebb_Manheim and read his blog at www.manheimconsulting.typepad.com.

Independents Remain Profitable in Challenging Environment

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