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• NYIADA’S NEW LOBBYIST • CASH IS KING IN BUY HERE-PAY HERE • MARIADA CONVENTION & EXPO

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Inside

MAGAZINECONTENTS MAGAZINECONTENTS

08 Provisioning: Used Car Science 10 Cash is King in BHPH 14 Auto Shopping Goes Mobile

WHAT’SNEW R A2Z EDUCATION SERIES - AutoZone Educating the independent dealer to deliver the highest quality service levels to your customers, manage your shop efficiently, train your technicians and maximize profits. niada.tv R N  ATIONAL TIRE SAFETY WEEK: June 3-9 National Tire Safety Week is a nationwide event sponsored by the Rubber Manufacturers Association to raise consumer awareness about tire safety, help consumers keep their tires safe and demonstrate the industry’s commitment to motorist safety. Visit www.betiresmart.org and fill out the form to receive your free National Tire Safety Week kit that includes brochures and other materials.

ADVERTISERSINDEX ADVERTISERSINDEX

ADESA...........................................Inside Front Cover Ally .......................................................................11 Auto Use...............................................................13 AutoTrader.com...................................... Back Cover Chase....................................................................12 Corry Auto Dealers Exchange .............................. 15 Manheim.com.........................................................7 NIADA Certified......................................................16 Nowcom .................................................................9 Protective......................................Inside Back Cover STARS GPS .............................................................3 Voisys ...................................................................22 Westlake Financial..................................................5

Car-Ware Named Preferred DMS Provider of NYIADA Car-Ware Inc., a growing provider of dealer management software, full-service website development, hosting and reporting services to independent car dealers, announced it has entered a preferred partnership with NYIADA as a DMS provider. As a result of the partnership, NYIADA members will be offered discount pricing for a limited time. “There is a common belief that when it comes to software, you have to make a tradeoff between price, functionality, reliability and customer service,” Car-Ware president Mike Dooney said. “We are determined to produce modules that are dependable, yet extremely affordable. As rare as this combination is,” we believe you should not have to settle for anything less.” Dooney said Car-Ware solutions are suitable for dealers seeking one software program that will control and track daily operations with minimal up-front cost and free support. The complete one-stop shop program aims to give independent car dealers more options with a robust DMS that provides not only dependability and customer service but is also user-friendly and fully integrated. The accounting, CRM, desking/traffic, finance, Buy Here-Pay Here and inventory management modules provide dealers with a single program that will enable them to manage every aspect of the dealership on a daily basis. By offering an extensive selection of features and modules, Car-Ware gives dealers the benefits they want at a price they can afford. For more information, visit www.car-ware.com or www.newyorkiada.org and click on “Preferred Partners.”

FOR INFORMATION ON HOW TO BECOME A MEMBER OF THE NYIADA, PLEASE CONTACT PAULA FRENDEL (855) 694-2324 nyiada.pfrendel@gmail.com

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV NIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR TROY@NIADA.COM.

THE NEW YORK DRIVING FORCE IS PUBLISHED 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 NEW YORK DRIVING FORCE OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEMBERS OF NIADA, DOES NOT CONSTITUTE AN ENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT (C) 2011 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED. STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITOR Andy Friedlander • andy@niada.com ART/PRODUCTION MGR. Christy Haynes • christy@niada.com PRINTING Nieman Printing

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The Executive Director, Paula Frendel is Proud to Introduce NYIADA’S New Lobbyist We are excited to announce that NYIADA has contracted with New York Capitol Consultants, Inc., to be our New York state government relations representative. Located adjacent to the state Capitol at 33 Elk St., Suite 210, in Albany, NYCCI is a government relations, association management, legislative/regulatory counseling firm established in 1987 by Christopher C. McGrath. Siobhan A. McGrath recently took over management of the firm. For years, she worked closely with her late father on a series of governmental relations projects. A graduate of Rensselaer Polytechnic Institute, Siobhan incorporates her strengths, contacts and considerable management experience to the advantage of the organization and its clients. NYCCI previously lobbied for the Independent Automobile Dealers Association on a number of issues and is excited to again represent this group of hard-working, entrepreneurial New Yorkers. All levels of government are responding to the changing economy, and with those changes come new laws, regulations and standards to which industry must adjust. NYCCI will perform many functions as the independent contract lobbyist for the association, including tracking, management and the negotiation of policy and regulatory proposals within the New York state legislature, executive branch, authorities and various boards. NYCCI’s experienced team works extremely hard to further its clients’ objectives and provide the support they need. NYCCI’s staff associates bring decades of lobbying, legislative, public relations, development and administrative experience. Both have worked in the government, private and not-for-profit sectors and are well equipped to support the objectives of NYIADA. Associate Dennis A. Weakly completed graduate work and research in Urban Planning and Community Development at the University at Albany and is experienced in grassroots organizing and advocacy. He has proven expertise in policy implementation, strategic advocacy planning and producing objective policy, budget and regulatory analyses. Prior to joining NYCCI , associate Kristina Kwacz served as director of public affairs for Assemblyman William L. Parment, developing media outreach, researching and resolving constituent issues, and managing communications. Kristina has experience planning and implementing events from 20 to 700 attendees, and has strong writing, editing and presentation skills. She is adept at building relationships to further organizations’ goals. Siobhan McGrath and her team look forward to continuing their relationship with the NYIADA and furthering the association’s relationship with New York’s decisionmakers.

Community Service Award Nominees

Congratulations to the following independent dealerships for being nominated for this year’s NIADA/Manheim National Community Service Award. Independent dealerships across the nation contribute to their communities every day but often go unrecognized for their community support. Many participate through special projects while others provide sponsorships or financial contributions, or lead innovative community improvement activities. The winning dealership will be named June 13 at the Leadership Awards Banquet during the National Independent Automobile Dealers Association Convention and Expo in Las Vegas. Manheim representatives will present the award along with a $5,000 check payable to the dealership’s chosen charity.

THE 2012 NOMINEES ARE:

Ertle Brothers Discount Auto, Sterling, Colo. Noegel’s Auto Sales, Starke, Fla. Southeast Car Agency, Inc., Gainesville, Fla. Matthews Motors, Clayton, N.C. A-1 Auto Sales of Dulles, Sterling, Va. Reel’s Auto Sales, Orwell, Ohio Bourne’s Auto Center, South Easton, Mass.

Fran Morelli Sales & Service, Brockway, Pa. Ed Holewiak’s Auto Sales, Somerset, Mass. Premier Motors-Leasing, Inc., Hardin, Ky. Ron’s Auto Sales, Inc., Lawrenceville, Ga. M&F Auto Sales, Albuquerque, N.M. Alamo Valley Auto Sales, Kalamazoo, Mich. South Tacoma Auto Sales, Inc., Tacoma, Wash. Fairly Reliable Bob’s, Inc., Boise, Idaho

NADA Used Car Guide Chart Impact of the Rising Cost of Gas on Used Vehicle Prices Expected change in used vehicle price under certain gas price scenarios

Source: NADA Used Car Guide

Gas Price Scenario $4.00 $4.50 $5.00 Segment % $ % $ % $ Intermediate Compact 1.7% $179 6.0% $638 10.4% $1,102 Intermediate Midsize 0.8% $103 2.1% $262 1.8% $233 Near Luxury 0.3% $69 -0.2% -$38 -3.0% -$650 Large Car 0.3% $39 -0.3% -$34 -3.2% -$415 Compact Utility -0.3% -$37 -2.8% -$408 -8.7% -$1,272 Luxury Midsize -0.3% -$73 -2.9% -$751 -9.0% -$2,313 Midsize Van -0.4% -$49 -3.2% -$453 -9.7% -$1,355 Midsize Utility -1.0% -$188 -6.4% -$1,144 -16.5% -$2,959 Large Pickup -1.5% -$275 -8.6% -$1,540 -21.3% -$3,817 Large SUV -1.6% -$387 -8.9% -$2,148 -22.0% -$5,298

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PROVISIONING BY DALE POLLAK AND CHAD GOODSON

The New Science of Used Vehicle Sourcing & Sales

These days, dealers are looking for every edge to find quality inventory for their lots. Americans are holding onto their cars longer than ever, causing higher prices at auction and a smaller crop of quality vehicles on which dealers can bid. According to a new study by R.L. Polk, length of vehicle ownership recently hit an all-time high: 71 months for new vehicles and 50 months for used cars and trucks. The study also noted that people holding onto their cars longer has resulted in decreased used-vehicle supply. In this crowded marketplace, you need to assess your strategy for long-term success if you want to outperform your goals and beat the competition. To help, consider this new method dealers are using to better evaluate and acquire in-demand units others might pass up. It’s called provisioning.

What Is Provisioning? Provisioning is defined as the efficient allocation of resources to achieve a successful mission. To be clear, the mission for dealers is to operate a financially successful used car operation. Put simply, for your business to thrive, you need to know what cars to buy, what to pay for them and where to find the right units for your inventory. Provisioning is a new way for dealers to set their used vehicle

strategy (size of inventory investment, ROI/ turn expectations) and efficiently pursue the vehicles necessary to execute their plan successfully. Provisioning is like a science because it provides a methodical approach to buying used vehicles. It helps evaluate certain types of information vital to the success of your used car business. What types of information? Demand: The number of people in your area searching online for a specific vehicle. Interest: The average conversion rate from search results pages to vehicle details pages for a vehicle in your area. Volume: The number of units recently sold in your area. Market days supply: The current available supply of similarly configured vehicles and the rate at which such vehicles have been sold over the past 45 days. Profitability: The spread between average asking price and wholesale price – the auction price vs. list price in your market. Availability: The number of units currently available at auction. Experience: The success of your recent sales for a specific make/model. Analyzing that information on your own isn’t easy. But technology and tools can help you determine the types of vehicles that will deliver the best return on investment every month, giving you a huge advantage on your competition.

What to Pay and Where to Find It Once you determine the cars that sell fast in your market, you’ll want to make sure you pay the right price for them. At auction, there aren’t too many obvious deals these days, but you can still find gems with a little guidance. Many dealers rely on professional buyer solutions like those by vAuto, for example. Those services use in-market data to help determine which units are worth your investment. They can even help you identify the price point at which a vehicle will get the most attention, get you the profit you need and cover your reconditioning costs so you

still hold gross. If you’re a dealer in the Northeast in the winter, you might have difficulty finding enough SUVs to keep your inventory fully stocked. Similarly, a dealer in the South probably can’t find enough convertibles in the summer months. Wherever you are, there’s inevitably a shortage of certain cars in demand. So it can pay to look outside your immediate area for quality inventory. Use online auctions to help keep your lot full of vehicles you know will sell. Online auctions can be some of the best places to find cars at good prices without the hassle of waking up early, checking pages of run lists and elbowing past other dealers to find your spot in the lane. Instead, sit back with your coffee and bid from the comfort of your home or the office.

How to Reduce Acquisition Risk Of course, if you bid online, you won’t be able to “kick the tires” and inspect the vehicles in person, so you’ll especially need to consider the condition and history of those vehicles. Otherwise you might end up paying too much for a car that seems perfect but has reported damage or another incident that could affect its retail value. The key is knowing the cars with good service histories that merit your bids, since those vehicles often sell for better prices. Many successful dealers run a vehicle history report on every car they consider buying as part of their standard procedure to assess a vehicle’s condition and spot any related acquisition risks. Whether through online auctions or in-person trades, this triage ensures the dealer and his buyers feel more confident that the inventory placed on the lot will turn fast and make top dollar. With declining supply and increasing demand for quality vehicles, there is little room to make acquisition mistakes on vehicles you “had a feeling about” but didn’t take the time to carefully vet. Provisioning helps you avoid these mistakes and turns your ability to efficiently and effectively evaluate and acquire used vehicles into a competitive advantage.

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Cash Is King in Buy HerePay Here

The two keys to Buy Here-Pay Here are risk management and cash management. Both, as always, are hot topics. More so now with everything that is going on in the automotive industry and the economy in general. But cash – and the availability or the management thereof – seems to be on everyone’s mind, and in some cases closing their doors. Cash is not as available as it was this time last year. The good news is it is still available, which isn’t true in some other unfortunate industries. It’s just not as easy to find or secure, not to mention afford, since the rates we enjoyed a year ago are no longer there. Local banks and credit unions appear to be the best sources for lines of credit. The large regional and national banks still seem to be staying out of the car business. Local banks and credit unions have smaller organizational charts and usually less turnover, leading to a more stable decision-making future. The three necessities to securing a line with those sources are patience, persistence and preparation. The days of simply walking into a bank and securing a line of credit on a handshake and a promise to pay are long gone. Local banks and credit unions have learned from the mistakes of the regional and national banks and have become smarter and more sophisticated in their approval process. Patience is needed because local banks and credit unions need a complete education on our industry. Not everyone is

familiar with what we do and how we do it. In some cases, it can be hard to convince a bank to loan money to a business that will in turn extend credit to someone who has shown little ability to repay it. They need a K-through-12 to make their decision and continuing education after the line is secured. Persistence is needed because the days of lending institutions seeking out beneficiaries of their generosity have just about ended, especially to those dealing with subprime clientele. BHPH dealers have to be willing to go door-to-door and sell our business to lenders. In most cases, it will take knocking on more than one door. And once in the door, it will take more than one cast to reel them in. Preparation is the determining factor to success, initially and in the future. Because banks and credit unions have become more sophisticated in their decision-making, BHPH dealers have to provide more sophisticated information to them. Performas, financial statements and cash-flow analysis are a few examples of data that needs to be provided up front to obtain a line and on an ongoing basis once a line is secured. The key to maintaining a good relationship with a capital source is providing as much information in the beginning as possible and to keep doing so on a regular basis so they never have to ask for anything. Full and accurate disclosure is paramount. Put yourself on the other side of the desk. What would like to know if it was your money? In this instance, there really is no such thing as too much information. Having all the access in the world to capital will be worthless unless you know how to manage it. In today’s tight credit market, BHPH dealers have to manage not only their credit lines, but cash in general. Not understanding how to manage available cash has closed more BHPH dealers’ doors than any other cause. It is that important. The best tool to effectively manage cash is common sense. Don’t spend what you don’t have. Too many dealers feel the need

to live the lifestyle. Success can breed contentment and contentment can breed laziness, which usually leads to failure. A cash-flow model helps keep common sense at the forefront. The model can be very detailed or simplified to cover the basic cash-in, cash-out categories. Either way, it should show a one-, three- and possibly five-year analysis, and should be updated at least annually or when there has been a change to the overall business model. Adding a location, an increase or decrease in ACV, or even a change in underwriting standards can impact cash needs. The model should be realistic. Pie in the sky and wishful thinking serve no purpose. Having the model is only the first step. Having the discipline to manage to it is the challenge. Without it, a dealer might as well have the “sell some cars, collect some money” business plan and hold on for dear life – a plan that is not used by successful BHPH dealers. The model should be looked at on a monthly basis and compared to actual performance. That way, adjustments can be made immediately to either the model or the personnel in charge of managing to it. Cash is king in our business. Not only the availability of it, but the effective management of it as well. There are BHPH dealers who operate without the need of a credit line because they understand how to manage cash. There are BHPH dealers who operate within credit lines effectively because they understand how to manage cash. But there are too many dealers experiencing capital reductions and, in some cases, all-out line calls because they don’t understand how to manage cash. Having the patience, persistence and preparation to obtain and secure cash, then the discipline to manage it, will take a load off your mind and help keep your doors open.

BY BRENT CARMICHAEL

EXECUTIVE CONFERENCE MODERATOR NCM ASSOCIATES INC. BCARMICHAEL@NCM20.COM

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Three “think outside the box” techniques when shopping for health insurance. Anyone who had has the experience of shopping for health insurance knows it’s not an easy task. Figuring out ways to keep premiums affordable can be a major struggle. Shopping for apples-to-apples coverage with several carriers is nearly impossible and premiums for similar plans are vastly different from one carrier to the next. So what’s a person to do? Purchasing health insurance requires a “think outside the box” approach. Here are three

simple tips to help you along the way: • Consider shopping for a much higher deductible than you are accustomed to. Shop for plans that have a $10,000 deductible or more. It may shock you how drastically lower premiums will be. Too much risk for you? We will show you a way to combat that next. If you would like to see a rate for a higher deductible in comparison, visit www.NIADAHealthPlans. com for an instant online rate. • To offset the high deductible, consider purchasing a critical illness rider, which attaches to your major medical policy. Critical illness riders pay a cash benefit for conditions like cancer, heart disease, stroke, coma and kidney disease, and the benefit can be used to pay off your deductible and leave you with additional money for other expenses, such as loss of income. Riders can be purchased to cover your deductible or more – up to $100,000 in cash coverage. Believe it or not, the premiums are very affordable. • A  lso to help offset risk, consider purchasing an accident rider to attach to your major medical policy. Like critical illness riders, accident riders pay a cash benefit for accidents or injuries such as cuts, burns, broken bones or strained and pulled muscles. Again the benefit can be used to pay your deductible in the event you or your family is injured. If you have children,

especially ones in sports, this is a must-have rider. The premiums are even more affordable. So what types of claims will you then need to worry about? Since health care reform passed, additional benefits have now been added so you will not have to pay out of pocket for adult and child wellness exams, such as checkups, immunizations, lab work, mammograms, pap smears, PSAs and EKGs. They are all covered at 100 percent with no deductible. Why purchase a lower deductible when it’s covered regardless? Additionally, there are no lifetime maximums. After your deductible, you are covered at 100 percent until infinity. There are no lifetime caps like $2 million, $3 million, etc. If you have a $20 million medical bill, your insurance must now cover it. With a high-deductible policy you will have to pay for such claims as office calls for a cold/ flu, asthma, skin disorders (other than cancer) and other forms of illness. However, most people would rather save $300, $400 or more per month and pay for the occasional office call themselves. And you will still receive the insurance company’s discounted rate for office calls. Doing the same thing over and over again and expecting a different result … well, you know the rest. Thinking “outside the box” can not only save you money, but can also provide you with better coverage than you had before.

FOR MORE INFORMATION, PLEASE CALL THE NIADA HEALTH PROGRAM AT 1-888-308-9340 OR VISIT WWW.NIADAHEALTHPLANS.COM

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NIADA to Launch New 20 Group Program After repeated requests from its members, the National Independent Automobile Dealers Association has announced it is entering the 20 Group business. NIADA CEO Michael Linn announced the NIADA 20 Group program, which will organize and moderate groups of independent auto dealers from around the country to meet and share new ideas and best practices. Linn said the move is being made after repeated requests from within the group’s membership of nearly 20,000. Dealers have voiced a strong desire to share best practices and operational data between the various member sets. “NIADA members have historically been a tight-knit group of dealers. Developing a 20 Group platform for them to facilitate ideas and compare operational practices is a natural extension of their close relationships,” Linn said. “Additionally, we have mounting feedback from dealers participating in existing 20 Group models who feel their best interests are being underserved or even ignored. One dealer told me she felt the escalating cost to participate in her current 20 Group was not

worth the combative discussions she endures or the pressure she gets to conform to their benchmarks. “For 66 years as a nonprofit trade association, NIADA has represented the voice of independent auto dealers and has found ways to help them improve their businesses. I can assure you NIADA and our 20 Group program will always put the needs of our dealers first. We will never sacrifice the quality or service we provide our dealers.”

THE NIADA 20 GROUP PROGRAM WILL BE UNDER THE DIRECTION OF JOE LESCOTA, WHO

JOE LESCOTA

WAS RECENTLY INTRODUCED AS NIADA’S NEW DIRECTOR OF DEALER DEVELOPMENT, EFFECTIVE JUNE 1.

The NIADA 20 Group program will be under the direction of Joe Lescota, who was recently

introduced as NIADA’s new Director of Dealer Development, effective June 1. “Even the most successful independent dealers are constantly seeking new ways to improve their businesses,” Lescota said. “They know the slightest change in sales, financing, service or operational policy can have a major impact on their profitability. Our 20 Groups will be a great way for NIADA dealers to stay on track because colleagues will be there to prod, poke and encourage improved performance. The new platform will match dealers of like size, sales volume and revenue mix for maximized compatibility. They will share ideas and best practices and learn from one another regardless of size or geographical region. “No independent dealer is too large or too small to contribute, learn and benefit from the collaborative dialogue of a 20 Group discussion. Every one of our members is encouraged to participate.” The first phase of NIADA’s 20 Group format will focus on independent auto retail operations. More information will be available at the NIADA Convention & Expo in June at Caesars Palace in Las Vegas.

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Smart Dealers Should Aim Their Ads at Smartphones Did you know that men aged 30-49 do more mobile shopping than other age groups? That 50 percent of the popular Groupon’s business over the next couple of years will come from mobile devices? That Starbucks has taken more than 3 million micropayment transactions? A Leger Marketing survey reported one in 10 respondents said they’d rather lose their mother-in-law than their cellphone. Those trends and figures are not only interesting, they affect mobile shopping for cars and trucks as a whole. Understanding the upcoming trends will help car dealers see how important mobile sites, mobile applications and mobile marketing campaigns will be. In 2011, mobile auto consumers climbed 60 percent. Used car sales are soaring, and more people are looking to buy thanks to a comfort level they have achieved with the state of the economy. According to Google/Compete Research, 81 percent of smartphone users access the Internet on their mobile devices, and one of three searches has a local intent. Out of all the mobile shoppers in the world, 17 percent are looking at automotive websites and 53 percent of those end up at a dealership buying a car. Because shoppers use their mobile phones to search for “stuff” in time of need, you have an opportunity to reach them when they are ready to buy or shop your dealership. According to Go Mobile, adding GPS capability to mobile phones has transformed the phone into a targeted weapon focused on the immediate surroundings. According to the 2011 Auto Shopper Behavior Study by Google/Compete/R.L. Polk, today’s auto shoppers research and decide faster, use searches to navigate and compare, and expect dealer sites to be helpful. The study also determined: • Mobile shoppers watch videos to discover and compare brands. • Some 81 percent of mobile auto shoppers make a decision within three months. • New car purchasers tend to search for “Offers” first, followed closely by “Build Your Car,” “Locate a Dealer” and “Search Inventory. ” • More shoppers than ever are searching inventory on third party sites – 42 percent of them searched “Inventory” first, then “Model Information” (32 percent) and “Trade-In” (29). “Request a Quote” and “Reviews” were next, cited by 22 percent. • The most frequent research conducted on

mobile phones was comparing features at 55 percent, followed by price comparisons at 47 percent and reading general car and truck information at 44 percent. • The advertisements cited as most useful by mobile users were online videos at 52 percent, sponsored or paid search engine listings (49 percent) and, surprisingly, newspaper ads at 45 percent. All that data should speak loudly to car dealers. We must start following shoppers through this complex yet simple path to purchase rather than relying on traditional online destinations alone. Car dealers need to examine their digital presence and understand navigation is the key to helping auto shoppers do research through many mobile portals. So here are six things to take to the next level: GPS-based marketing: Location-based services are mobile marketing platforms dealers can use to engage shoppers and develop promotions. Dealer apps: A basic app, including inventory, costs about $300 per rooftop, but it’s worth its weight in gold. You can also allow users to accept notifications and send out weekly sales and alerts. Mobile-friendly websites: A developer can easily add codes to your home page to adjust to tablet or cell sizes, allowing your website to display content quickly and optimize even on a very small screen. Mobile ad campaigns: Target customers who are looking to fill an immediate need – oil changes, tire rotations, a special of the week, manager’s special or aged inventory on sale. QR or 2D codes: Incorporate QR codes on all web pages and in newspaper or magazine ads. A QR code is a symbol with an embedded URL. When smartphone users scan it, it drives them to the URL. Some areas to advertise are: browse a website, send an email, make a phone call, Google maps, Foursquare venue, latest tweet, follow us on Facebook, Wi-Fi network inside dealership, or any text or message you want the customer to see. YouTube channel: According Google/ Compete, video ads drive initial interest – online videos ranked as the most useful ad format and a significant influence of brand choices. The last bombshell is that YouTube led two of three shoppers to the car/truck they ended up buying, indicating that YouTube is a leading driver to get

customers to notice your vehicles. The new iPhone has an assistant named Siri. She finds answers to questions from the user. If a mobile phone user asks, “Where is the closet dealership?” Siri will deliver a specific answer with directions. She will only deliver one answer. The problem from a car dealer’s standpoint is she is not a search engine or a database. She will only deliver qualified filtered results. Siri reportedly uses Wikipedia and Yelp, among other websites, as information providers. Each of those sources work differently. Wikipedia provides encyclopedia-style information but can be modified by any user. Yelp is a national review community. Dealers should make it a point to claim their information on those sources and keep watch on reviews and information regarding their dealership. Many believe Apple’s goal is to move completely away from Google – there are rumors about a partnership with Bing to help power Siri (so make sure your dealership is listed with Bing). In a study by the Arora Report, 40 percent of Siri users reported no need to search Google. That provides evidence those users changed their habits, and as a result, Google searches could decline as Siri becomes widely available. The latest trends and statistics indicate the mini-computers we call phones will be at the heart of any and all tasks in the near future, especially auto shopping. That makes a difference for advertising purposes, including the manner in which dealers reach potential customers. Convenience is king, and phones are becoming the go-to resource in our everyday lives. Today’s users are looking for detailed vehicle information, interesting videos and compelling mobile ads to direct their search for a vehicle. This is a once-in-a-lifetime generation changer. As smartphones get smarter and consumer expectations rise, the automobile industry needs to offer the services customers are expecting. All dealerships’ advertising needs to be geared toward the mobile phone war.

BY DANI LUNSFORD DANI LUNSFORD IS A NATIONAL SALES AND MARKETING EXECUTIVE WITH SHOWCASE PUBLICATIONS, INC. SHE HAS BEEN IN THE RETAIL AUTOMOTIVE INDUSTRY FOR 14 YEARS, WORKING IN SALES, SERVICE, E-COMMERCE MANAGEMENT AND AS A CONSULTANT TO IT COMPANIES AND DEALER GROUPS. SHE CAN BE REACHED AT DANI@AUTOSHOPPER.COM.

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2012 MARIADA Convention & Expo Mark your calendars for Sept. 9-10 at the Trump Taj Mahal in Atlantic City, N.J., because you will not want to miss this event. Get ready for the biggest automotive conference the Northeast has seen in years. The New York IADA, New Jersey IADA, Pennsylvania IADA, Ohio IADA, Virginia IADA and Maryland/Delaware IADA have joined forces to create the Mid-Atlantic Regional Independent Auto Dealers Associations Convention & Expo. We will be joined by vendors, sponsors, exhibitors and renowned industry speakers to provide the latest and greatest education as well

as the latest cutting-edge automotive products and service offerings. Come on down for fun. Enjoy the MARIADA golf tournament, the Intercostal Waterway boat trip or Trump Casino. Stay for power-packed education. We will have general sessions, small group classes and breakout sessions covering an assortment of industry topics such as legal compliance issues, web technology, Buy Here-Pay Here and sales training. Make sure your dealership stays ahead of the game with the latest and greatest tips from industry professionals.

For more information please visit www.mariadaconference.org or call 855-694-2324

Lessne Named 2012 State Quality Dealer Michael B. Lessne, owner of Alpine Motors in Wantagh, was named New York’s 2012 Quality Dealer of the Year. Lessne began selling cars as a college student to earn extra money during the summer. His father, who is in the cement business, was using some property owned by the family to park his trucks, and Lessne “felt it was a nobrainer to throw some cars out front, as the strip was always one of the busiest car dealer locations on Long Island.” Lessne started with five cars in 1994 and now averages 100 on his lot. His dealership has been named the best used car dealership on Long Island by the Long Island Press for the past four years. He said his philosophy is to never sell a car he wouldn’t drive himself. “I started the business from the ground up, learning all aspects of the business hands-on, including buying, selling, reconditioning and financing,” Lessne said. “I never worked in a dealership and taught myself. “I had a love for cars growing up … I bought my first used car in 1994 – a 1992 Corvette with 3,000 miles on it. I sold it in 1996 with 13,000 miles to use the money for working capital and made a profit on the car after using it four years.” Lessne, who serves as vice president of the NYIADA, will represent New York as a nominee for the National Quality Dealer of the Year Award, which will be presented at the NIADA Convention & Expo in June in Las Vegas. Congratulations to New York Quality Dealer of the Year Michael B. Lessne! 15

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Warrantech to Administer New NIADA CPO Program NIADA has selected Warrantech, an AmTrust Financial Services company, to administer its all-new NIADA Certified Pre-Owned Vehicle Program. The NIADA CPO Program is the premier certification option for independent automobile dealerships seeking to effectively compete in the certified pre-owned vehicle market. Warrantech, a leading provider of extended service contracts for the automotive industry, will administer the plan, address all post-sale customer needs, and customize dealer and consumer marketing materials. The company will work closely with NIADA’s state affiliates to launch the program nationwide in May 2012. “Our research is telling us that 65 percent of consumers begin their vehicle search looking for a certified pre-owned vehicle, and that number is growing,” NIADA CEO Mike Linn said. “NIADA is committed to helping our members give customers what they are looking for and offer a top-notch buying experience for car buyers in their communities. We see the NIADA CPO Vehicle Program as a primary way for NIADA members to further separate themselves from their competitors and give customers a better vehicle with additional peace of mind after the sale.”

With three unique plans under the NIADA CPO program, dealers will be able to select the option that is right for their market and their customer base. These options include: • A three-month/3,000-mile limited warranty that includes 36 months/36,000 miles of engine and air conditioning component coverage. • A six-month/6,000-mile limited warranty that includes 36 months/36,000 miles of engine and AC component coverage. • A 12-month/12,000-mile limited warranty. The NIADA CPO limited warranty options include coverage of engine, air conditioning, turbocharger or supercharger, automatic and manual transmission, transfer case, drive axle, steering components, select electrical components and seals and gaskets. For more consumer choice and confidence, the NIADA CPO limited warranty options above can be supplemented by adding the extended NIADA Total Care or the NIADA Total Care Plus coverage, which includes front and rear suspension, brakes, fuel system, cooling system and additional electrical components. “In re-tooling the NIADA CPO Program, we recognized independent dealer business models vary widely and that we had to offer additional CPO options to specifically meet the operational

demands of our dealers,” NIADA Chief Operating Officer Steve Jordan said. “Warrantech’s successful track record with independent auto dealers, varying product offerings, world-class claims operation, nationwide sales footprint and long term commitment to support the success of our dealer members made the partnership decision easy to make.” In addition to the coverage, NIADA and Warrantech will provide dealers with comprehensive sales training on how to use the CPO program to sell more vehicles and extended service contracts, as well as marketing support that includes in-store signage and promotional materials. “Warrantech is honored to have been selected by the 66-year old NIADA as its CPO program administrator,” Warrantech CEO Sean Stapleton said. “We applaud the time-honored tradition of excellence NIADA member dealers observe, including their adherence to a strict code of ethics. We feel that commitment mirrors Warrantech’s dedication to excellence and drive to provide superior products and continued quality customer service.” For additional information regarding the NIADA CPO program please call (877) 310-0288 or email automotivesales@amtrustgroup.com

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Latest NMB Partner Provides Emissions Diagnostics PH2 Solutions has joined NIADA’s National Member Benefit program, offering the association’s members its awardwinning PH2 Validator emissions diagnostic technology for a $259 savings with multiple payment plan options. The diagnostic software of choice for dealers and their on-site staff rapidly identifies emission-related issues on virtually all 1996 and newer vehicles, helping save time and resources on “Check Engine Light” maintenance and repairs, emission inspection compliance, fuel consumption, vehicle

acquisition and remarketing, and reducing customer “comebacks.” ”NIADA is delighted to be working with PH2 Solutions in assisting our members to resolve ‘Check Engine Light’ and vehicle emissions issues,” NIADA vice president of member services Scott Lilja said. “NIADA is confident PH2 Solutions will be a tremendous hit with our members who have vehicle service operations as well as those that outsource.” The PH2Validator earned first place in SEMA’s Best New Tools and Equipment Products category for 2012, and Motor magazine named it one of its Top 20 Tools for 2011. PH2 Validator’s easy-to-use application was developed specifically to address independent repair shop challenges such as OBDII false code problems, no code faults, costly long drive cycles and other emissionsrelated repairs. The diagnostic software redefines conventional factory drive cycles to 10 miles or less by engaging the on-board computer (PCM) with its patented automated repetitive requests of all supported monitors simultaneously, resulting in rapid monitor

completion if conditions are met. If readiness conditions are met, the monitors complete. If they are not met, driving beyond 10 miles will not change the outcome, and the PH2Validator’s automated data stream analysis provides technicians with a real-time record of clues as to why by simultaneously and continuously capturing out-of-range operating values and prioritizing them by seriousness. Exclusive NIADA member-only pricing is also available to repair shops handling member repairs. “We are honored to partner with NIADA and even more excited to offer members this game-changing technology that truly makes life easier for dealers, technicians and service centers, affording them the ability to move inventory faster and more efficiently,” PH2 Solutions president and CEO Mark L. Scotland said.

FOR MORE INFORMATION, CONTACT NIADA@PH2SOLUTIONS.COM, AND TO ORDER, VISIT WWW.PH2SOLUTIONS.COM/ NIADA0818 OR CALL (973) 902-5517.

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Help us reach 1,000 ‘Likes’ before the 2012 NIADA Convention and be entered for a chance to win a FREE Full Access Registration at NIADA’s 2012 Annual Convention & Expo, a $495 value! The first 1,000 likes will be entered into the drawing for the Grand Prize. Like Us at NIADA.com 17

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NIADA Legislative Team Update Here’s the latest from the National Independent Automobile Dealers Association’s team of lobbyists and advocates in Washington, D.C.

NIADA Annual Leadership Conference On March 22-23, Federal Advocates – NIADA’s lobbying firm – attended the NIADA Annual Leadership Conference and participated in a panel presentation on advocacy efforts and status regarding various meetings and legislation, including S.1449 and a proposed auction sale amendment. The formulation of an Association PAC was also discussed. D.C. Meetings On March 7, NIADA met with staff members of the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission. With respect to the CFPB, there are three areas of immediate interest and direct interest to the association. The first is the regulatory role the CFPB will play with respect to motor vehicle financing. While there has not yet been any activity with respect to this issue, NIADA, through Shaun Petersen, the association’s legislative/ regulatory/compliance counsel, will continue to monitor the process. The second issue relates to education of servicemembers. Pursuant to the law, the CFPB is required to ensure “servicemembers and their families are educated and empowered to make better informed decisions regarding consumer financial products and services offered by motor vehicle dealers, with a focus on motor vehicle dealers in the proximity of military installations,” and “complaints by servicemembers and their families concerning such motor vehicle dealers are effectively monitored and responded to, and where appropriate, enforcement action is pursued by the authorized agencies.” NIADA will be pursuing options/opportunities for assisting the CFPB in that effort. The third area of interest pertains to the Consumer Advisory Board that the CFPB is

directed to establish. The board is charged with advising and consulting with the bureau “in the exercise of its functions under the federal consumer financial laws, and to provide information on emerging practices in the consumer financial products or services industry.” NIADA is monitoring the membership appointment process to the board with interest. Legislative committee chairman Chris Martin has submitted an application for appointment.

Executive Agencies Regulatory Review Shaun Petersen will be leading the regulatory review effort on behalf of NIADA. He will be reporting on the FTC meeting noted above and developments in the regulatory process. Federal entities of interest include the FTC, EPA, NHTSA, IRS and SBA. Early last year the President issued executive orders 13563 and 13579, which directed all federal agencies, including independent agencies such as the FTC, to prepare plans for the periodic review of existing regulations in order to determine whether those regulations should be modified, streamlined, expanded or repealed. In September, as an example, the FTC issued a 10-year review schedule and accelerated its review of a number of rules and guides in response to recent changes in technology and the marketplace. NIADA, where appropriate, will coordinate its review efforts with the National Automobile Dealers Association. Auction Sales Discussions are ongoing regarding consumer and law enforcement issues related to auction sales. Pending those discussions, an April 9 meeting with the Senate was cancelled at the request of Senate staff. That stakeholder meeting was to include, but was not limited to, the NHTSA, FBI, Department of Homeland Security, staff of members Pryor, Lieberman, Blumenthal,

Waxman and Butterfield, the National Auto Auction Association, NADA, NIADA and representatives of various auction companies. An attempt was made by Sen. Pryor (D-Ark.) to file and pursue an amendment to the Senate Highway Bill that would require auction companies to make available certain information to bidders at the time of sale and certain information that would have to be maintained and possibly made available to the public after sales. Following NAAA negotiations with the senator, he agreed to not file or pursue the amendment pending a dialogue with the affected stakeholders. While the amendment/issue does not on its face necessarily directly impact NIADA, we will continue to monitor the situation to ensure the association’s interest are protected. S.1449, the Motor Vehicle and Highway Safety Improvement Act S.1449 is the bill that had an onerous recall provision/process included in an earlier version of the bill considered last Congress. We lobbied for its exclusion and the language was not part of the July 2011 introduced version of the bill. Working in conjunction with NADA, committee members were contacted on Dec. 13 to guard against any attempts to reinstate the language. No effort materialized. As currently constructed, nothing in the bill directly impacts the automobile industry. S. 1449 was included in S.1813, the omnibus Highway Bill that passed the Senate last month. In the House, jurisdiction over the S.1449 issue is shared between the Transportation and Infrastructure Committee and the Energy and Commerce Committee and is expected to also be addressed within the context of the House Highway Bill. To date, there is no comparable provision in the bill being drafted. Timing and final resolution regarding it are also uncertain although mid-April may be the target date for House floor action. The current program, which expired March 31, was extended until June 30 by Congress to allow more time for final resolution of a highway bill.

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Polk Provides Internet Reporting to Autobytel

Automotive marketing intelligence firm Polk has announced it is providing Internet lead conversion reporting to Autobytel, provider of third-party auto lead generation, for its dealer and OEM customers. Autobytel and Polk worked together to create a solution that defines vehicle sales conversion rates for Autobytel auto leads. It includes conversion reporting at a variety of levels, including OEM, vehicle segment type and those leads that are dealer-assigned. The partnership allows Autobytel to provide transparency in lead quality to its customers and establishes quantifiable metrics for return on investment. It also enables dealers to better understand lost opportunity revenue and identify Internet lead competitors, helping them align their follow-up strategies with customers. For more information, visit www.polk.com or www. autobytel.com.

We invite you to join us for the 2012 MARIADA Conference & Expo September 9th - 10th at the Trump Taj Mahal in Atlantic City New Jersey.

Conference Agenda

Be There.... At the Trump Taj Mahal in Atlantic City, New Jersey on Sunday and Monday, September 9 and 10, 2012. We will be joined by many Vendors, Sponsors, Exhibitors, Renowned Industry Speakers, providing their latest and greatest Products and Services offerings. Be There to Share in the Learning, Networking, and Fun. Speaking of Fun, Show up a day early, meaning Saturday, September 8 for Golf by the Water (not golf balls in the Water) and an Intracoastal Waterway Boat Trip for Fun with Friends, Colleagues, and Family! We are finalizing details and will begin offering and accepting registrations shortly for the Conference. The price for Owners and Employees from Members of NYIADA will be inexpensive ($195 per individual) and pay back big time and beyond in new knowledge for how to make money and stay in compliance with the many laws while doing it. We made the Conference a drive-able distance on a day when most dealerships are closed to try to make this as easy and do-able as possible for any and all of our Members.

Where & When September 9th-10th 2012 Trump Taj Mahal 1000 Boardwalk Atlantic City, NJ 08401

PLEASE JOIN US IN OUR EFFORT TO HELP YOU IN YOUR BUSINESSES BY ATTENDING THE CONFERENCE. Visit www.mariadaconference.org for registration forms and details. Thank you, Paula Frendel Executive Director NYIADA 565 Hunts Point Avenue Bronx, NY 10474 (855) 694-2324 (NYIADA4) WWW.NEWYORKIADA.ORG

Experian Enhances Its AutoCheck Reports Experian Automotive announced the launch of AutoCheck速 Elite, a program that gives car dealers information and insights into the market, the vehicles and the people who buy them. In addition to the vehicle history data of the original AutoCheck, AutoCheck Elite allows dealers to access reports providing in-depth insights into dealer sales performance, vehicle registrations and consumer demographics in their market. Dealers can use that information to evaluate their sales performance against the competition, track sales trends of the most popular makes and models, and better understand the consumers in their market. And AutoCheck Elite dealers receive other features, including access to AutoCheck best practices training, a sales event marketing guide and enhanced showroom materials. For more information, visit www. experianautomotive.com.

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NEW YORK INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION 565 Hunts Point Ave. | Bronx, NY 10474 855-694-2324 (NYIADA4) | Fax 718-328-1445 paula@newyorkiada.org www.newyorkiada.org

MEMBERSHIP APPLICATION It is important to me to be recognized as a professional! Enclosed are my annual dues of $350 to make sure that my business has all the advantages the NYIADA provides to put me at the forefront of my profession. By completing this form, I am consenting to and giving NYIADA, its affiliates and subsidiaries, my permission to contact me and provide information to me at the mailing and email addresses, telephone and fax number(s) I have provided. Business Name: _________________________________________________________ Contact Person: _________________________________________________________ Mailing Address: ________________________________________________________ ________________________________________________________ Physical Address: ________________________________________________________ (if different from mailing)

________________________________________________________

Phone: ____________________________

Fax: ____________________________

Email Address: __________________________________________________________ Website Address: ________________________________________________________ Dealer License Number: ________________________ How did you hear about NYIADA? _________________________________________ Please mail application and $350 check or money order made payable to New York Independent Automobile Dealers Association (NYIADA) to the address above. Thank you for being a member of NYIADA! “Individually we struggle to be heard, collectively we cannot be ignored.” 21

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ComplianceOverdrive

Watch 24/7

Reducing the Impact of Consumer Complaints

CHECK OUT WHAT’S NEW ON

NIADA.TV

Who Is Your Customer? Paul Webb explains how knowing your customer better can help you sell, sell, sell. Tamara Darvish’s Outraged video from the CAR Conference: Find out why the “taking out” of America’s hometown car dealers impacts not only dealers, but also automotive remarketers.

The concept or image of the “complaint department” isn’t anything new, and has provided fodder for jokes and comic strips over the years. But the decision by the Consumer Financial Protection Bureau (CFPB) to expand its consumer complaint system to include complaints regarding vehicle and consumer loans is no laughing matter. If you haven’t been to the site yet, consider taking a look. The site, www.consumerfinance.gov/ complaint, makes it very easy for anyone to register a complaint. It asks for a description of what happened, the desired resolution and the parties and products involved. The CFPB’s decision to start accepting and reviewing complaints related to vehicle loans should get your attention for a few reasons. First and foremost, it signals that the CFPB is gaining momentum and is ready to try to identify and resolve current problems in the industry – and to prevent future ones. Second, the complaint process opens a whole litany of questions about how the CFPB will respond to complaints and how dealers will be involved. We don’t know much about the process yet, but hope the CFPB will provide more detail soon. For now, the question all dealers should be asking themselves is, “How do I avoid complaints in the first place?” It seems consumer finance complaints can originate in at least three ways: • You did something wrong and the customer complains about it. • The customer didn’t understand the agreement and thinks you did something wrong as a result. • You did everything right, but the customer has unreasonable expectations and complains. You can take steps to avoid or reduce the impact of all three scenarios, particularly when it comes to finance and insurance (F&I) processes. You did something wrong Customers should complain if you misrepresent, overstate or lie about the products and services you provide or the nature, reason and amount of charges. If you are running your business that way – or you have a renegade employee who is committing such acts – you should expect whatever consumer complaints, lawsuits and/or criminal charges come your way. The complaints and the liability they bring can be avoided if you run an honest and high-integrity business. You also need internal oversight, management and audit processes to help discover and eliminate any employee misconduct. Customer didn’t understand Some reported court cases I’ve read seem to be based on a lack of consumer understanding that spun out of control. The dealer didn’t necessarily do anything wrong, but the consumer seemed surprised at having to pay for cover insurance, or the gap amount, or having a vehicle repossessed, or any of a number of other predictable outcomes. The financing documents generally cover the fees, responsibilities and consequences, but the consumer didn’t read or understand them until long after the documents were signed. In one recent case, the consumer asserted he hadn’t read the retail sales contract or been given time to read it. He said he simply signed and initialed where he was told to. He later complained and sued regarding a number of obligations he hadn’t understood, and the lawsuit didn’t turn out well for the dealer. One strategy to avoid this would be to take the time at closing to educate the consumer. You could point out key provisions of the documents, such as late payment provisions, failure to insure, and conditions of and consequences of default. You could emphasize the importance of reading the documents and asking questions before signing, and back it up with a willingness to give consumers time to read and ask basic questions. The idea is, if you tell the consumer what happens on default, he or she is not surprised – and is less likely to complain – if the car is repossessed. Customer is unreasonable There will always be unreasonable customers whose expectations far exceed the terms of your sales agreements, warranties and commercial reasonableness. With those folks, you might not be able to avoid complaints. However, a regulator is more likely to conclude that a complaint is unreasonable if its investigation shows you run an honest, high-integrity business, have compliant processes and documentation in place, work hard to educate customers and set appropriate expectations. While you can’t always please everyone, running a high-integrity business and educating your customers will undoubtedly help prevent customer complaints. The more positive view is that you won’t just be avoiding complaints and mitigating reputational risk, you will be building customer satisfaction and retention. Either way, it’s an investment well worth making.

BY CHIP ZYVOLOSKI

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

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THE NEW YORK PAID page 8 Visit us at www.newyorkiada.org MAY/JUNE 2012 • NYIADA’S NEW LOBBYIST • CASH IS KING IN BUY HERE-PAY HERE • MARIADA...

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