Mid-Atlantic Dealer News - July 2023

J U LY 2 0 2 3 • M I D AT L A N T I C AU TO D E A L E R S U N I T E D. O R G

MIDATLANTIC

DEALER NEWS H I G H L I G H T I N G P E N N S Y L V A N I A • M A R Y L A N D • D E L A W A R E

7 Steps to Grow Your Used Car Dealership & Boost Profits KEY STRATEGIES FOR RUNNING A PROFITABLE MIDATLANTIC INDEPENDENT CAR DEALERSHIP

Sales Objections You Need to Master in 2023 MIDATLANTIC AUTO DEALERS UNITED 1501 North Front St., Harrisburg, PA 17102

LEGISLATIVE UPDATE

MAIADA’S John Odorisio Testifies before House Consumer Protection, Technology & Utilities Committee Re: Catalytic Converter Issue

Catalytic Converter Thefts Top 64,000 in 2022 NEW DATA IS JUST A SNAPSHOT OF AN UNDERREPORTED CRIME

PLUS

6 Reasons Why Consumer Lending is Ready for an Overhaul MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023 | 1

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2 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023

JULY 2023 | CONTENTS

The official magazine of the

MIDATLANTIC INDEPENDENT AUTO DEALERS ASSOCIATION

PENNSYLVANIA • MARYLAND • DELAWARE 1501 North Front St., Harrisburg, PA 17102 (717) 238-9002 midatlanticautodealersunited.org Noah Melamed - Chairman Ticket to Ride Auto, Lancaster, PA nmelamed@yourttr.com Chris Smiley - Advisor Mountville Motor Sales, Columbia, PA rcsmiley@comcast.net Bert Straub, President 1st Choice Auto LLC, Fairview, PA bertcstraub@gmail.com Vacant, President - Elect John DeFilippo - Treasurer DeFilippo Bros. Motorcars, Prospect Park, PA john.m.defilippo@gmail.com Clint Weaver- Secretary America’s Auto Auction Harrisburg, Mechanicsburg, PA clint.weaver@americasautoauction.com Tom Hodges, Vice-President Tom Hodges Auto Sales, Hollywood, MD tom@tomhodgesauto.com Dan Limongelli, Vice-President Jo Dan Motors, Plains, PA jodanmotors@gmail.com Michael Mansour, Vice-President Car Connection, Inc., New Castle, PA mike@carconnection1.com Beth Melamed, Vice-President Ticket to Ride Auto, Lancaster, PA bmelamed@yourttr.com Tom Brandis • tombrandis@netscape.net Advantage Auto Sales & Credit, Quakertown, PA Lisa Cohowicz • lisac@nepautoauction.com North East Pennsylvania A/A, Scranton, PA Jeff Dreier • dreierauto@hotmail.com Dreier Auto Sales, Shavertown, PA April Hollobaugh • ajautosalestitusville@gmail.com A&J Auto Sales, Titusville, PA Kevin Luring • k.luring@yahoo.com ADESA PA, York, PA James Makia • james@exclusivemotorcarsmd.com Exclusive Motorcars, Randallstown, MD Dan McNamee • dtlcars@aol.com Daniel Thomas Auto Sales, Croydon, PA Gregg Pachik • gregg.pachik@manheim.com Manheim Philadelphia, Hatfield, PA

FEATURES 2 | Catalytic Converter Thefts Top 64,000 in 2022 In total, the nation experienced more than 64,000 catalytic converter thefts in 2022, which represents a 207% increase from 2021.

3 | Executive Director John Odorisio Testifies before House Consumer Protection, Technology & Utilities Committee The testimony delivered by Executive Director Odorisio was in support of House Bill 791 (Isaacson-D), which amends the Scrap Material Theft Prevention Act, further providing for identification requirements for sale of scrap materials to scrap processors and recycling facility operators.

6 | The Sales Objections You Need to Master Climbing interest rates and fluctuating used car prices have brought on new fears and doubts for car shoppers this year.

7 | Unique Benefits of Car Payment Reimbursement (CPR) provides unique automobile benefits to all valid drivers of whom have a financial obligation to pay, such as a lease or a loan.

8 | 7 Steps to Grow Your Used Car Dealership & Boost Profits Running a successful MidAtlantic independent car dealership requires strategic planning, excellent customer service, and effective marketing strategies.

10 | 6 Reasons Why Consumer Lending is Ready for an Overhaul The consumer lending industry’s limitations are becoming more evident, which means it’s time to rethink things and overhaul it in a more holistic, consumer-friendly and inclusive way.

18 | Dealers are Stayin’ Alive as Retail Continues to Shift The challenge for dealers is to embrace continued enthusiasm for preordering and grow their online offerings, including F&I. 22 | CARFAX finds 2.5M vehicles tagged for recalls on roads In the CARFAX study, six states had more than 100,000 unrepaired vehicles, with California leading the way (245,000). The other state with more than 100,000 recall vehicles still on the road include Pennsylvania (106,000).

DEPARTMENTS 2 | 3 | 4 |

President’s Message Legislative Update Executive Director’s Message

14 | 16 | 24 |

The CarLawyer© Auction Directory Order Form for Dealership Supplies (PA & MD)

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MIDATLANTIC INDEPENDENT AUTO DEALERS ASSOCIATION SPONSORS

Kerri Rotunda • kerrir@corryade.com Corry Auto Dealers Exchange, Corry, PA George Smouse • gasmouse@zoominternet.net Smouse Trucks & Vans, Mt. Pleasant, PA Steve Worley • worleymotors@hotmail.com Worley Motors, Enola, PA WOULD YOU LIKE TO RECEIVE A DIGITAL EDITION OF THE MIDATLANTIC DEALER NEWS MAGAZINE? Email heather@piada.org

Copyright 2023 MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023 | 1

q PRESIDENT’S MESSAGE

Catalytic Converter Thefts Top 64,000 in 2022

By UsedCarNews Staff A new report based on insurance claims released by the National Insurance Crime Bureau shows a surge in catalytic converter thefts across the country. In total, the nation experienced more than 64,000 catalytic converter thefts in 2022, which represents a 207% increase from 2021. Leading the country are California and Texas, which experienced more than 32,000 catalytic converter thefts last year.

“This new data is just a snapshot of an underreported crime that affects communities across the nation,” said David J. Glawe, President and CEO of NICB.

BERT STRAUB, PRESIDENT MIDATLANTIC IADA MANAGER, 1ST CHOICE AUTO, LLC FAIRVIEW, PA Well, kids should be out of school and summer should be in full swing. The car market still struggles, so where do we find a positive? Here it is. New car manufacturers are starting to loosen up with rebates and incentivized interest rates, which should only be a help to independent dealers. Inventory is a positive for those of us in the subprime markets. Unfortunately, default rates climbing can only mean customers with credit challenges will still need a vehicle.

The COVID world is seemingly in the rearview, and we are proud to now be hosting our first Convention in years, so gear up to join us for the First Step to the Future! I’m excited about the lineup we’ve already secured, and the notable speakers who have made themselves available to join us. We will be announcing further benefits of being a member of the MidAtlantic Independent Automobile Dealers Association. We offer more than just a coupon book, although it helps. Please watch for more details on our new Convention, and if any of you are interested in giving back to the industry, please do not hesitate to contact us for details about becoming a board member. We are always looking for new ideas to help strengthen the association. n

Based on insurance claims, thefts of catalytic converters increased significantly from 2020 through 2022. Insurance claims for these thefts increased 288% from 16,660 claims in 2020 to 64,701 in 2022. Catalytic converter theft claims had an upward trend trajectory throughout 2020 and 2021 and theft claims in 2022 were significantly higher than in previous years.

Catalytic Converter Theft by State Mandated in the U.S. since 1975, catalytic converters neutralize harmful gases in engine exhaust that contribute to air pollution and smog and are bolted to the underside of cars or trucks as part of their exhaust system. Catalytic converters contain platinum, rhodium, and palladium, rare earth metals that are more valuable than gold. Often metal recyclers pay between $50 to $250 for a catalytic converter and up to $800 for one removed from a hybrid vehicle. It can cost between $1,000 and $3,500 or more to replace a catalytic converter that is stolen, depending on the type of vehicle.

Legislative efforts are under way to address the rising number of thefts. New bills and amendments are being introduced to increase requirements for catalytic converters sellers, impose due diligence obligations on metal recycling entities, and establish penalties for unauthorized sellers and buyers engaging in fraudulent practices related to catalytic converter purchases. In 2022, NICB’s Office of Strategy, Policy, and Government Affairs tracked 163 legislative bills across 37 states, with 31 bills enacted. So far in 2023, 94 bills are being tracked across 39 states, with 12 bills already enacted. n

2 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023

Executive Director John Odorisio Testifies before House Consumer Protection, Technology & Utilities Committee

BY TYLER BURKE, ASSOCIATE, MILLIRON & GOODMAN GOVERNMENT RELATIONS As part of PIADA’s ongoing advocacy against catalytic converter theft in the C ommonwe a lt h, PIADA’s Executive Director John Odorisio was asked to testify before the House Consumer Protection, Technology & Utilities Committee regarding how Pennsylvania’s independent auto dealers are harmed by catalytic converter theft.

Last session, PIADA’s advocacy on this topic helped the Pennsylvania legislature to pass legislation that reclassified catalytic converters as a “secondary metal” which increased the penalties for catalytic converter theft in the Commonwealth.

This session, the legislature is seeking to address ways to make it more difficult for stolen catalytic converters to be sold. On Tuesday, June 6, John Odorisio testified before the committee. Below is a portion of his testimony: The theft of catalytic converters has reached epidemic proportions in both Pennsylvania and across the country, with incidents of catalytic converter theft doubling in Pennsylvania in recent years.

For example, a January 2023 TribuneReview article titled: “Surveillance work leads police to Western Pa. catalytic converter theft suspects” provides a good example of how such thefts impact auto dealers in Pennsylvania. The article stated as follows:

same time, Moon police were investigating the thefts of $20,000 worth of catalytic converters from tow trucks.’

Thefts have continued to increase along with the value of precious metals within the catalytic converters. Catalytic converters have valuable metals inside them and only take a matter of minutes to steal, especially for experienced thieves.

These parts can then be sold at scrap yards for around $50 to $200, although most end up being shipped overseas.

The theft of catalytic converters has severe financial repercussions on small automobile dealers. Once a catalytic converter is stolen from an automobile dealer, they are then responsible for covering the large insurance deductible (average $2,500) associated with their policy. Replacing a stolen catalytic converter can cost anywhere from $1,000 to $2,500, accounting for both the part itself and the labor to install it.

Many small automobile dealers across the state simply cannot afford multiple catalytic converters being stolen off their lot.

The testimony delivered by Executive Director Odorisio was in support of House Bill 791 (Isaacson-D), which amends the Scrap Material Theft Prevention Act, further providing for identification requirements for sale of scrap materials to scrap processors and recycling facility operators.

It would also require scrap processors and recycling facilities to collect additional information for transactions that include a catalytic converter such as: • The year, make, model and vehicle identification number of the vehicle from which the catalytic converter was removed.

• A photograph of the catalytic converter.

• A photograph of the seller.

In addition, House Bill 791 would empower the scrap processor or recycling facility to withhold payment to the seller for a period of 48 hours. During those 48 hours, the scrap processor or recycling facility operator shall keep the catalytic converter intact and safe.

PIADA will be sure to keep you updated regarding this issue and all relevant issues that are currently being addressed in Harrisburg. n MIDATLANTIC IADA CONVENTION RETURNS

‘The catalytic converter thieves hit in early December at Jim Shorkey auto dealerships in North Huntingdon and North Union, Fayette County, police said. There was a total of 35 catalytic converters taken from Mitsubishi Outlanders at both locations — two were left behind on the ground — causing $124,000 in damage.” “Around the MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023 | 3

q EXECUTIVE DIRECTORS MESSAGE

JOHN ODORISIO EXECUTIVE DIRECTOR MIDATLANTIC IADA As some of you know all too well, many banks are pulling out of indirect lending for independent dealers. No one is sure how long this will last given some recent high profile bank failures. While this isn’t good news, it is not the first time we have been through this.

Those in business in 2008 remember the implications of the financial crisis and how many bankers abandoned our industry then. It also happened in 2001 after the 911 attacks. I realize this is of little comfort, but it does show that we as an industry can make it through by calling on our resourcefulness in times like this. We have asked our lobbyist to closely monitor the situation and keep us abreast of any developments, positive or negative that we need to know.

We can’t promise to resolve this but we can and will offer some solutions in the name(s) of lenders who may be able to help. One place to turn to is the Credit Union Dealer Link (CUDL) or call 800-972-0999. As we get more options, they will be posted on our website: piada.org.

If you’re looking for another healthcare option, please check our website. The details aren’t finalized as of this writing (June 2), but should be by the time you read this article. We hope you’ll take a look and see if our sponsor’s program can work for you and your dealership.

May you enjoy this meaningful day with your loved ones! Let us live the real essence of being an American and be of service to our nation with our whole hearts!. Independence Day is a day of freedom to express our pride in being a nation of hope and prosperity.

Praying for safety and good health.

“In the truest sense, freedom cannot be bestowed; it must be achieved.”

-Franklin D. Roosevelt

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The Sales Objections You Need to Master in 2023

By Susan Gaytan, Director of Dealer Engagement & Training, Alan Ram’s Proactive Training Solutions

C

limbing interest rates and fluctuating used car prices have brought on new fears and doubts for car shoppers this year.

Being proficient with these objections is essential for sales teams to survive and thrive in the current market.

When it comes to converting sales prospects, here are the top three sales objections I hear reps struggle with along with some pro tips on how to effectively respond to these objections. These tips will work for training across the board, including automotive phone sales training, automotive BDC training, auto Internet-BDC and even sales managers.

#1

What’s your best interest rate?

I’ve had meetings with six different dealers in the past week regarding interest rates and the challenges that higher rates pose to shoppers. The Federal Reserve raised interest rates for the ninth time in a row in March, and this has ultimately affected the way that your inbound sales calls are being handled. Sales and BDC reps are getting the rate question come up while working sales prospects on the phone and online, and they’re handling the question like an objection or roadblock.

They are not equipped with the right responses and will eventually either go down a rabbit hole or just turn the client away unintentionally.

To sustain volume and gross, reps need to master this part of the call.

You want to address the question without regurgitating everything you have heard about interest rates.

This is not the time to show off what you know. “I understand your concern, and I assure you that our finance team will do everything they can to help with that. When would be a good time to review interest rate options with you?” is an example of addressing the rate question and offering a solution. Here’s a tip: Leverage your finance managers. You have professionals that are there to help you. They are 6 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023

trained in special circumstances. Get them involved if you need to and tell the customer to “set up an appointment to come and see our finance specialist.”

Automotive sales training at this stage is so important in order to arm salespeople and BDC reps with the best responses.

#2

Your price is too high, can you come down? Ahh…the age-old price question.

Your sales team, including managers, is probably rusty in this area so this is definitely one that you want to review with your team. After re-stating your ad price, reps need to immediately include any valuable perks that would benefit the shopper. What makes your experience different? Does your dealership offer something that others don’t? This is precisely the time to include those perks, instead of waiting until after the sale. If a shopper persists on price, make sure that you are including the value of their trade.

To the educated buyer today, the most important thing is the bottom line price which must include their trade value.

If you wait to bring up their trade after the fact, you could run into more price challenges.

#3

I need your best offer on my trade before I come down. Vehicle trades and acquisitions are hot and most dealerships have recognized the opportunity by pushing more trade and appraisal activity through their sales teams. But naturally, some folks won’t come down to the dealership unless they know they’re getting the best offer for their car. Sales reps need to know how to navigate this objection. Simply put, they need to know how to get them into the dealership so they can accurately evaluate their trade in person. “Mr. Shopper I completely understand. I have found that the most aggressive trade-in offers typically happen here at the dealership where we can see your car in person. When would be a good time for us to get together?” is an option.

The Bottom Line You want to encourage your shoppers to come and see you in person whenever (Continued on next page)

(Continued from previous page) possible. Shoppers are going to be more flexible in person at the dealership because their decision-making process goes from logical to emotional. Aim to get your online leads on the phone and you’ll have a much better time communicating and addressing those concerns.

Once you’ve heard the shopper’s objection, respond with care. There is no need to get defensive or impatient. They are voicing a concern. They are telling you what you will need to do to close them later. Express your desire to truly help them. This is ultimately what people want. The way that you respond to their objection will make or break the deal. And always, always, end your response with a question to bring the conversation back to your conversion steps.

A shopper’s objection is not a rejection. It is merely an inquiry that needs clarification.

These could be golden opportunities for you to win the shopper’s trust and gain a customer for life. n Susan Gaytan, Director of Dealer Engagement & Training at Alan Ram’s Proactive Training Solutions, brings over twenty years of automotive experience and dealership management expertise to her role.

She is responsible for integrating training solutions and helping dealerships maximize the effectiveness of training.

Unique Benefits of Car Payment Reimbursement

BY THOMAS F. LOVETERE, CEO & PRESIDENT, DRIVERS CONNECTION, INC. FOUNDER OF THE CPR PROGRAM | DEALERSHIPS.CPRFORCARS.COM

CAR PAYMENT REIMBURSEMENT (CPR) provides unique automobile benefits to all valid drivers of whom have a financial obligation to pay, such as a lease or a loan. No credit or background checks or motor vehicle checks required.

If you have an accident (regardless of fault), or your vehicle is stolen or recalled, vandalized, totaled, and even if a mechanical breakdown lands your customers vehicle in a repair facility for a short period of time, eligibility is met to start to receive the exclusive benefits the CPR protection program provides.

Once our professional administrators receive notification for any of the aforementioned events, they contact the repair facility to begin our exclusive process that will

monitor the entire repair and transactional services required in order to get your customers car back where it belongs as soon as possible, without a hassle to you and your customer.

Not only that, being a member of the CPR family, we will reimburse you or your customer for all expenses up to $500, provide up to $1,000 reimbursement for the replacement of your vehicle if it is deemed totaled, and most of all, and all important, reimburse them their monthly lease or loan payment that is certainly due and payable regardless of the disposition of their vehicle when the unknown occurs. Your customers monthly car payment is ours.

Protection is for the life of the lease or loan up to five years, plus, we provide up to three

consecutive months of car payment protection and up to three requests for reimbursement up to a $7,500 limit.

Nobody in the world provides this protection.

Nobody including their own automobile insurance carrier provides or offers this exclusive protection.

Our promotional material will be directing everyone to contact their dealers, especially all PIADA members, to ask for the CPR auto protection program. We are also asking all PIADA used and new automobile dealerships to join the CPR family of dealerships and provide this all important protection. The CPR program protects your customers’ financial stability and much more when the unknown occurs.

Why not offer to all - as everyone deserves CPR in a time of need. n

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023 | 7

7 Steps to Grow Your Used Car Dealership & Boost Profits

BY PROFESSIONAL MOJO MARKETING Running a successful MidAtlantic independent car dealership requires strategic planning, excellent customer service, and effective marketing strategies. With the right approach, you can expand your dealership and increase your profits, while still ensuring every customer gets the care they demand. Let’s discuss seven essential steps to grow your MidAtlantic independent car dealership and achieve long-term success.

BUILD A SOLID REPUTATION Establishing a strong reputation is crucial for any business, and that is doubly true for a used car dealership, which is an industry historically plagued by poor word of mouth. Any independent auto dealer can overcome the preconceived ideas, however, if it focuses on providing excellent customer service, transparency, and fair pricing. Encourage satisfied customers to leave positive reviews online and leverage word-of-mouth referrals. A reputable dealership will attract more customers, leading to increased sales opportunities. One of the best things you can do is join the MidAtlantic Independent Automobile Dealers Association.

Consumers know that MAIADA dealers abide by a solid code of ethics and will receive a fair shake.

DEVELOP A COMPREHENSIVE MARKETING STRATEGY To expand your customer base, invest in a comprehensive marketing strategy.

Utilize both traditional and digital marketing channels to reach a wider audience.

Consider implementing search engine optimization (SEO) techniques to improve your website’s visibility in search engine results. Utilize social media platforms, online classifieds, and email marketing campaigns to engage potential customers and promote your inventory effectively. Don’t let others dissuade you from using any of these tools. Some will say that email is outdated or TikTok is only for 15 year olds. Both are wrong. Each marketing channel still delivers real value in your overall marketing strategy if you know your target audience and you provide the right message at the right time in the right way. If you are unsure about how to craft a marketing strategy, we recommend that you research other independent auto dealerships who have a successful plan in place or consider taking a few courses to develop a customized game plan for your business. Creative tactics go a long way in achieving your long-term marketing goals.

ENHANCE ONLINE PRESENCE A strong online presence is essential for business growth. Create a user-friendly website that showcases your inventory with detailed descriptions and high-quality images. Incorporate online tools that allow customers to browse your inventory, schedule test drives, and even apply for financing online. Leverage social media platforms to share engaging content, interact with potential customers, and run targeted advertising campaigns. Trust us, even if you believe you are doing the most already on social, you can still do more. It is time consuming, but less so if you use wise tools and focus on your target audiences.

DIVERSIFY YOUR INVENTORY Given the current inventory market, this is a tough one. Expand your inventory to cater to a wider range of customers. Offer a variety of vehicles in different price 8 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023

7 STEPS TO

GROW YOUR USED CAR DEALERSHIP AND BOOST PROFITS CEMENT YOUR REP

A strong reputation is the foundation of your dealership, leading to better word of mouth. Work on reviews and transparency.

DEVELOP A STRATEGY Utilize both traditional and digital marketing, but do it with purpose and intent, knowing your customer base.

REV UP ONLINE Incorporate online tools that allow customers to browse, view, finance and even purchase your vehicles online.

DIVERSIFY INVENTORY Consider expanding inventory to reach a wider range of buyers and stay informed about consumer trends.

PROVIDE FINANCING Offering flexible financing can boost sales. Seek out and partner with reputable lenders.

TRAIN YOUR PEEPS invest in training and developing your employees.

Great employees result in more sales.

MAKE FRIENDS

Forge strategic partnerships with local businesses and organizations to expand your dealership's reach.

ranges, from budget-friendly options to luxury models. Consider stocking hybrid or electric vehicles to attract eco-conscious buyers. Stay informed about market trends and popular models to ensure you have a well-rounded selection that meets the demands of your customer base. A MAIADA membership includes thousands of dollars in savings at participating auctions.

PROVIDE FINANCING OPTIONS Offering flexible financing options can significantly boost your sales. Partner with reputable lenders to provide competitive interest rates and flexible terms. Ensure your financing process is streamlined and customer-friendly. Promote your financing options prominently on your website and in your marketing materials to attract buyers who may need assistance in purchasing a vehicle. MAIADA members receive access to vetted partners who are ready to help you grow your business and provide the right financing for your customer base.

7 STEPS TO INVEST IN EMPLOYEE TRAINING ANDYOUR DEVELOPMENT GROW USED CAR Your dealership’s success DEALERSHIP ANDheavily relies on your staff ’s expertise and professionalism.

BOOST PROFITS Invest in continuous training and development CEMENT YOUR REP programs to reputation enhance A strong is the their knowledge of foundation of your dealership, the automotive industry, customer service leading to better word of mouth. Work on reviews and skills, and sales techniques. Encourage a transparency. positive work environment and motivate your DEVELOP A STRATEGY Utilize both traditional and employees by offering performance-based digital marketing, but do incentives. A well-trained and and motivated team it with purpose intent, knowing your customer will help you deliver base. exceptional customer experiences, resulting in customer loyalty and REV UP ONLINE increased sales.online tools that allow Incorporate customers to browse, view, finance and even purchase your vehicles online.

COLLABORATE WITH LOCAL DIVERSIFY INVENTORY Consider expanding inventory BUSINESSES AND ORGANIZATIONS to reach a wider range of and stay informed Forge strategic buyers partnerships with local about consumer trends. businesses and organizations to expand your dealership’s reach.

Consider collaborating PROVIDE FINANCING Offering flexible financing with can auto repair car rental boost sales. Seek out shops, and partner with reputable agencies, and insurance providers.

Offer lenders. exclusive discounts or cross-promotional TRAIN customers, YOUR PEEPS and in opportunities to their invest in training and return, they can refer potential buyers to developing your employees.

Great employees result in more sales.

your dealership. Participating in community events and sponsoring local sports teams or charities will also increase your dealership’s visibility and enhance your reputation.

No matter your level of experience, growing a used car dealership requires a multi-faceted approach that encompasses reputation building, marketing strategies, online presence, inventory diversification, financing options, employee training, and collaboration with local businesses. By implementing these seven steps, you can position your dealership for even greater success, attract a broader customer base, and boost profits. Remember that consistency and adaptability are key as you navigate the ever-evolving automotive industry. With dedication and strategic planning, your dealership can thrive and establish itself as a trusted and sought-after destination for used car buyers.

Why not start today by leveraging the expertise found at MAIADA? We’re here for you. n

MAKE FRIENDS

Forge strategic partnerships with local businesses and organizations to expand your dealership's reach.

2023 ADVANCED ISSUING AGENT TRAINING COURSES

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IN-PERSON COURSES

ZOOM COURSES

The in-person training courses will be provided by Pennsylvania Association of Notaries, a PennDOT approved instructor. All classes begin at 9:00AM. No refunds and may not be transferred to another class date.

Members: $125; Non-members: $150

The ZOOM training courses will be provided by Pennsylvania Association of Notaries, a PennDOT approved instructor.

All classes begin at 9:30AM. Class size limited – registration closes ten business days prior to class date.

No refunds and may not be transferred to another class date.

Members: $99; Nonmembers: $129

Thursday, September 21

Deadline to register: September 6 MANHEIM PHILADELPHIA AA 2280 Bethlehem Pike. Hatfield, PA 19440

Thursday, October 5

Deadline to register: September 20 GARDEN SPOT AA Robert Rd. & Apple St., Ephrata, PA 17522

ONLINE COURSES The online training courses will be provided by Pennsylvania Association of Notaries, a PennDOT approved instructor.

Members/Nonmembers: $169

Thursday, July 20

Deadline to register: July 5

REGISTER ONLINE AT MARIADA.ORG

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023 | 9

FINANCIAL HIGHLIGHT

6 Reasons Why Consumer Lending is Ready for an Overhaul 1

Under traditional credit models, the only option for borrowers in this situation is to consider subprime lenders. A strong borrower should not be banished to the subprime category simply because traditional credit ratings don’t account for the entire picture.

Among the limitations of the current consumer lending model are:

The consumer lending industry’s limitations are becoming more evident, which means it’s time to rethink things and overhaul it in a more holistic, consumer-friendly and inclusive way.

BY AMITAY KALMAR Today’s consumer lending industry is steeped in tradition carved out over several decades. Although the general public – or anyone else, to be sure – doesn’t know all the factors that comprise the modern credit score, there’s a general understanding that a higher score equals more creditworthiness and better offers from lenders.

Conversely, a lower credit score – or no credit score at all – equates to subprime loan offers with unfavorable terms or in many cases, no ability to secure loans.

Unfortunately, while the latter category does include car buyers whose credit histories are questionable, it also includes consumers with stellar incomes and payment histories who simply haven’t had the opportunity to build sufficient credit according to traditional means. For example, a doctor who recently immigrated to the U.S. from a foreign country may not have a history that the credit bureaus track, leaving them with no credit score and no ability to secure financing for a car whose payments they can certainly afford.

10 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023

Old Methodologies. Although it’s seen as the industry standard, the FICO model is decades old and is limited in the scope of data it considers. New lending models from several new lending players see borrowers as “more than just a score,” analyzing thousands of data points to determine creditworthiness. While the data points will include FICO when a score is available, creditworthiness is judged in a much more holistic manner.

2

A Lack of Transparency. The loan process is an often slow, analog and opaque process, especially for consumers. From application to signing the contract, more modern lending technologies allow for consumers to handle the entire process on their phones. The process becomes much more appealing for borrowers who prioritize transparency and speed.

3

“

The consumer lending industry has relied on a legacy-based approach, but its limitations are becoming more evident, which means it’s time to rethink things and overhaul it in a way that’s more holistic, consumer-friendly and inclusive.

Complexity: Many lenders can pre-approve borrowers “quickly” based on a soft credit pull, but the formal approval process can move at a much slower pace. The technology exists to provide faster, easier approvals and funding; companies working toward transforming the industry are making use of such technology, making the process friendlier for everyone involved.

4

Good Consumers Being Left Out. Would-be car buyers with no Social Security number, no ITIN, or thinto no-credit histories are usually denied loans for vehicles they desperately need to be productive and successful. Rather than relying on a single source, such as a FICO score, to determine the consumer’s ability to secure a loan, companies are disrupting tradition by introducing neverbefore-seen levels of fairness, equity and opportunity through holistic approaches to the loan process.

5

Buyers Getting Stuck with NonCompetitive Loans. Predatory loans with high rates, long terms and little protection are common for those who don’t conform to traditional credit scoring models. When consumers are limited in terms of their borrowing options, the outcome can be far worse than getting no loan at all. New models and technologies that consider a much broader set of data points eliminate the need to have a traditional credit score but doesn’t disqualify buyers from securing loans with competitive terms.

6

Dealers Losing Opportunities. Car dealers have become accustomed to turning away car shoppers with thin to no credit history. This limits

their revenue and creates bad feelings and reputations. Dispensing with outdated credit scores that only offer a narrow snapshot of a buyer’s creditworthiness allows dealers to turn those buyers into loyal, happy customers.

New methods can open new revenue streams, however. For new-car sales, margin contraction and limited profit potential are cyclical issues dealers face.

New lending technologies offer guaranteed backends for franchise dealers. Further, while traditional funding leaves dealers waiting days to receive payment for the car, new lending partners make same-day funding the norm.

The consumer lending industry has relied on a legacy-based approach, but its limitations are becoming more evident, which means it’s time to rethink things and overhaul it in a way that’s more holistic, consumerfriendly and inclusive. It’s a win-win for everyone and a welcome improvement in an industry ready for change. n Amitay Kalmar is the co-founder and CEO of Lendbuzz, which provides auto loans to deserving borrowers, including those without a Social Security number, no credit history or thin credit.

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023 | 11

3rd Annual Summer Slam Car Show

7th Annual Summer Slam Sale Tuesday, August 29 9:30AM

Sunday, August 27 9AM - 1PM

Hosted by Manheim Baltimore-Washington to benefit Wounded Warriors Day on the Bay 7120 DORSEY RUN ROAD | ELKRIDGE, MD | 21075

FREE & OPEN TO THE PUBLIC • EVENT IS RAIN OR SHINE Ample parking available at no cost!

VEHICLE REGISTRATION:

$20 Registration Fee | To Pre-Register Visit: https://tinyurl.com/mrxptk6r A variety of Food Trucks will be on site.

Flag Presentation at 9AM Trophy Ceremony at 12:30 PM

Rules of Show:

All Manheim and Maryland state traffic laws must be obeyed Speed limit on lot is 15 MPH • No animals allowed • No alcohol is allowed

12 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JUNE 2023

MANHEIM BALTIMORE-WASHINGTON PRESENTS

JOIN US ON TUESDAY, AUGUST 29!

2,000 UNITS

Please join us for our 7th Annual Summer Slam event sale and enjoy a day of home runs, your favorite ballpark food, and amazing inventory!

16 LANES

First 200 clients in the doors will get a complimentary lunch ticket, a commemorative Summer Slam tee-shirt, and the chance to get an autographed baseball by our favorite baseball team's mascot!

The CARLAWYER

©

By Eric Johnson, Partner in the law firm of Hudson Cook, LLP, Editor in Chief of CounselorLibrary.com’s Spot Delivery®

Here’s our monthly article on selected legal developments we think might interest the auto sales, finance, and leasing world. This month, the developments involve the Federal Trade Commission, Department of Justice and the Consumer Financial Protection Bureau. As usual, our article features the “Case(s) of the Month” and our “Compliance Tip.” Note that this column does not offer legal advice. Always check with your lawyer to learn how what we report might apply to you or if you have questions.

FEDERAL DEVELOPMENTS On May 1, the Federal Trade Commission obtained court orders permanently banning three individual defendants and their affiliated companies from participating in telemarketing and from advertising, selling, or assisting in any debt relief product or service. The FTC had alleged that the defendants violated the Telemarketing Sales Rule by using telemarketers to call consumers, falsely claiming to be affiliated with a particular credit card association, bank, or credit reporting agency and promising they could greatly reduce or eliminate consumers' credit card debt in approximately 12-18 months. The FTC also alleged that, in marketing their services, the defendants claimed to use several spurious methods to reduce or eliminate consumers' credit card debt. For example, they falsely claimed that consumers may qualify for a federal debt relief program or that a consumer did not owe the debt because it had not been "validated." Finally, the FTC alleged

that consumers who agreed to sign up for the debt relief program were charged an upfront enrollment fee of thousands of dollars depending on a consumer's available credit, and they were falsely told it was part of the debt that would be eliminated as part of the program. Consumers were also charged monthly fees ranging from $20-$35 for "credit monitoring" services. The court orders impose a judgment of approximately $17.5 million, which is partially suspended based on the defendants' surrender of assets and their inability to pay the full amount.

On May 12, the Department of Justice filed a complaint on behalf of the Federal Trade Commission against XCast Labs, Inc., alleging that the Voice over Internet Protocol services provider violated the Federal Trade Commission Act and the Telemarketing Sales Rule by assisting and facilitating illegal telemarketing campaigns. Specifically, the FTC alleged that the company transmitted billions of illegal robocalls to consumers, including calls that delivered prerecorded messages to numbers on the National Do Not Call Registry, calls that failed to disclose the identity of the seller of the services being marketed, calls that falsely claimed affiliations with government entities such as the Social Security Administration, calls that contained other false or misleading statements to induce purchases, and calls that transmitted false or deceptive caller identification numbers.

The complaint also alleges that XCast Labs continued to transmit these calls even after being alerted by the FTC of their illegality.

The complaint seeks monetary civil penalties and a permanent injunction to prohibit future violations.

On May 23, the CFPB announced a $9 million civil monetary penalty against a large bank to resolve allegations that the bank violated consumer financial protection laws and rules that protect individuals when they dispute credit card transactions. The CFPB sued the bank in January 2020 and alleged that the bank

14 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023

failed to properly manage and respond to customers’ credit card disputes and fraud claims. If entered by the court, the stipulated judgment and order would require the bank to fix its credit card practices by ensuring that the treatment, handling, and resolution of billing error notices and unauthorized use claims comply with the law, including prohibiting its employees from requiring customers to provide a fraud affidavit signed under penalty of perjury in support of a credit card claim. The bank must also ensure that it refunds any fees or other amounts, calculated from the date of the error or unauthorized use, in response to valid billing error notices and unauthorized use claims. Finally, the bank will pay a $9 million penalty to the CFPB’s victims relief fund.

CASE(S) OF THE MONTH Vehicle Financing Extended to ActiveDuty Servicemember Was Not Covered

by Military Lending Act Despite Inclusion of GAP Insurance, Processing Fees, and Prepaid Interest: An active member of the U.S. military obtained financing to buy a 2011 GMC Acadia SUV. In addition to the cost of the vehicle, the transaction financed the cost of guaranteed asset protection, a processing fee, and prepaid interest. The servicemember sued the finance company, claiming that it violated the Military Lending Act by failing to disclose various fees, failing to disclose the true cost of credit, and requiring him to submit claims to arbitration. The finance company moved to dismiss the complaint, and the trial court granted the motion, finding that the financing was not covered by the MLA. The U.S. Court of Appeals for the Fourth Circuit affirmed. The MLA excludes certain transactions that do not qualify as "consumer credit," including any "'loan procured in the course of purchasing a car[,] when that loan is offered for the express purpose of financing the purchase and is secured by the car ... procured.'"

Because there was no dispute that the

financing was procured in the course of purchasing a car and was secured by that car, the appellate court focused on whether the financing was offered for the express purpose of financing the car purchase. The appellate court said that this appeal hinged on what Congress meant when it used the phrase "for the express purpose." If that phrase means "for the sole purpose," then no amount other than the price of the vehicle may be financed. If that phrase means "for the specific purpose," then the inclusion of other items in the amount financed is permitted, and the transaction is still exempt. The appellate court then proceeded to engage in statutory interpretation, including a review of dictionary definitions of the meaning of "express," some treatises on grammar and logic, prior court decisions, and an "examin[ation of] the relevant phrase in its statutory context," before reaching the conclusion that, in the context of the MLA, the phrase "for the express purpose" does not mean "for the sole purpose." A dissent argued that the "vehicleloan exception should not be construed broadly" and that "[u]nscrupulous lenders are bound to take advantage of the wide-open exemption by strapping new products and add-ons to car loans, at a discreet but sizeable expense to service members." See Davidson v. United Auto Credit Corporation, 2023 U.S. App. LEXIS 8747 (4th Cir. (E.D. Va.) April 12, 2023).

Vehicle Purchase Agreement's Integration Clause Rendered Any Contemporaneous Agreement Between Parties Relating to Sale, Including Arbitration Agreement Signed by Parties on Same Day as Purchase Agreement, Unenforceable: An individual bought a used vehicle from a dealership. The purchase agreement contained an integration clause stating: "This [c]ontract includes all the terms, conditions, restrictions, limitations and other provisions on both the face and the reverse side hereof. This contract cancels and supersedes any prior contract and as of the date hereof comprises the complete and exclusive statement of the terms of the [c]ontract relating to the subject matters covered hereby." The purchase agreement also had a large box at the bottom where "other terms agreed to" could be noted, but that space was empty, and a checkbox labeled "NONE" was marked with two Xs. The buyer and the dealership also signed a

separate arbitration agreement the day they signed the purchase agreement. Later, the buyer sued the dealership, alleging fraud and other deceptive sales practices. The dealership moved to compel arbitration, and the trial court denied the motion.

The Court of Appeals of Utah affirmed the trial court's decision, concluding that the plain language of the purchase agreement's integration clause rendered any contemporaneous agreement between the parties related to the sale, including the arbitration agreement, unenforceable.

According to the appellate court, "[t]he Arbitration Agreement was signed on the same date as the Purchase Agreement, though it is not clear which was signed first. Thus, the plain language of the integration clause renders the Arbitration Agreement canceled if it was signed before the Purchase Agreement and excluded if it was signed the same day - on 'the date hereof ' - but afterward. In other words, the text of the integration clause serves as both a backward-looking and a forwardlooking invalidation of agreements made outside the Purchase Agreement.... And the Arbitration Agreement does indeed address some of the 'subject matters covered' by the Purchase Agreement, rendering it voided by the integration clause. [The dealership] acknowledges that 'both the Purchase [Agreement] and Arbitration Agreement ... dealt with the same subject matter.' ... Not only do both agreements have to do with the same overall transaction, but the Arbitration Agreement addresses warranties, which is a topic explicitly and repeatedly discussed in the Purchase Agreement. Both documents also discuss the condition of the vehicle.

Accordingly, the plain language of the integration clause precludes the Arbitration Agreement's application because the Purchase Agreement 'comprises the complete and exclusive statement of the terms of the [c]ontract relating to the subject matters covered hereby' - including these overlapping topics." The appellate court also noted that the dealership could have easily integrated the arbitration agreement into the purchase agreement by writing "arbitration agreement" in the section for "other terms agreed to," instead of leaving that space blank. Or, if the dealership had wanted its standard arbitration agreement to apply to its standard purchase agreement

for all sales, it could simply have stated so in the prepared portion of the purchase agreement. Not only did the parties omit mention of the arbitration agreement, they double-checked the box marked "NONE" for other terms, reflecting the parties' intent not to be bound by terms outside of the purchase agreement. Accordingly, the arbitration agreement could not be added to the terms of the fully integrated purchase agreement. See Montes v. National Buick GMC, Inc., 2023 Utah App. LEXIS 46 (Utah App. May 4, 2023).

COMPLIANCE TIP The first case describes the huge win for the auto industry that the consumer’s retail installment contract was subject to the autofinancing exemption and, therefore, the transaction was not subject to the Military Lending Act. The second case illustrates the dangers of including an integration clause in a document that explicitly states that it is the complete and exclusive statement of the parties’ terms and then having a separate document signed like an Arbitration Agreement. The appellate court noted that the dealership could have easily integrated the arbitration agreement into the purchase agreement by writing "arbitration agreement" in the section for "other terms agreed to," instead of leaving that space blank. Or, if the dealership had wanted its standard arbitration agreement to apply to its standard purchase agreement for all sales, it could simply have stated so in the prepared portion of the purchase agreement. Hindsight is 20/20. Make sure you’re reading all of your documents together, carefully, and especially if one or more has an integration clause.

So, there’s this month’s roundup! Stay legal, and we’ll see you next month. n Eric (ejohnson@hudco.com) is a Partner in the law firm of Hudson Cook, LLP, Editor in Chief of CounselorLibrary.com’s Spot Delivery®, a monthly legal newsletter for auto dealers and a contributing author to the F&I Legal Desk Book. For information, visit www. counselorlibrary.com. ©CounselorLibrary. com 2023, all rights reserved. Single publication rights only to the Association.

HC# 4886-6973-9111.

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023 | 15

AUCTION DIRECTORY PENNSYLVANIA ADESA MERCER 758 Franklin Road, Mercer, PA 16137 724.662.4500 / Fax: 724.662.8716 Friday 9:00 AM Office M-W: 9-4:00; TH: 9-5:00; F: 8-5:00 adesa.com ADESA PA I-83 Ex. 28 (Old Ex. 12), 30 Industrial Rd. York, PA 17406 717.266.6611 / Fax: 717.266.7650 Wednesdays 9:00 AM; INOPS 8:30 AM Specialty Sale every 4th Wed 8:30 AM adesa.com ADESA PITTSBURGH 378 Hunker Waltz Mill Rd. New Stanton, PA 15672 724.925.4700 / Fax: 724.925.4701 Tuesday 9:00 AM pittautoauction.com AMERICA'S AA - HARRISBURG 1100 S. York St., Mechanicsburg, PA 17055 717.697.2222 / Fax: 717.697.2234 Thursday 8:45 AM harrisburgautoauction.com AMERICA’S AA - LANCASTER 1040 Commercial Ave., P.O. Box 406 East Petersburg, PA 17520 717.569.5220 / Fax: 717.569.3109 Wednesday 9:00 AM; INOPS 8:30 AM americasautoauction.com AMERICA’S AA - PITTSBURGH 55 E. Buffalo Church Rd. Washington, PA 15301 724.225.1777 / Fax: 724.225.7223 Thursday 12:30 PM americasautoauction.com America’s AA – Erie P.O. Box 317, 12141 Route 6 West Corry, PA 16407 814.664.7721 / Fax: 814.664.7724 Thursday 10:00 AM 3 Lanes Dealer Consign, Fleet/Lease americaserie.com BLAISE ALEXANDER AUCTION 350 Fairfield Rd., Montoursville, PA 570.435.8391 Mondays: 10:45am blaisealexanderauction.com BLOOMSBURG AUTO AUCTION 25 Ridge Road, Bloomsburg, PA 17815 570.784.2306 Wednesday 10:00 AM bloomaa.com

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16 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023

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MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023 | 17

Dealers are Stayin’ Alive as Retail Continues to Shift

The challenge for dealers is to embrace continued enthusiasm for pre-ordering and grow their online offerings, including F&I.

By Nancy Dunham Wards Intelligence surveyed dealers throughout the U.S. to chart retail automotive's present health, electrification challenges and future opportunities. This is part of a series analyzing our survey results.

“There are more tears shed over answered prayers than over unanswered prayers.”

That well-known quote may sum up the situation many car dealers currently face.

Our January report noted the most prevalent 2023 wish by dealers was more inventory.

Well, that wish was granted – and then some – for many dealers who report their lots now are flooded with inventory.

But that’s not true throughout the retail landscape. In general, the availability of most models across vehicle segments remains below historical levels. Although U.S. new-vehicle inventory finished April at nearly 55% above April 2022, the overall 35 days’ supply pales compared with prepandemic norms of 65 days or more.

want vehicles under $25,000, but it’s too soon to forecast, Brauer says.

Industry insiders have long predicted that the demand for vehicles of the past few years would end once chip availability rebounded, production increased and pricing weakened. That is now coming to fruition, with control of the market shifting more toward buyers and away from sellers.

Of course, rollercoaster production that has recently led to an array of shortages and quickly turned to overabundance is just one headache dealers now face. As Silicon Valley Bank and other financial institutions struggle to remain afloat in some form, the economic index sinks and the stock and bond markets experience turmoil. Those factors leave dealers facing higher costs – from payroll to supplies and utilities – and lower sales volumes.

Light-duty trucks are one exception to the lower-than-usual inventory. During the chip shortage, automakers tended to focus on producing high-margin models, such as pickups, so less pent-up demand existed for the trucks once the chip crisis began to ease.

Now, Ford is offering significant incentives to keep trucks moving off lots. General Motors, which idled some Silverado/Sierra plants for two weeks to keep inventories in check, is expected to do the same, Karl Brauer, executive analyst with iSeeCars, tells Wards.

Yet dealers need vehicles priced below $25,000-$30,000. It’s unclear if automakers will fill that void. GM’s reintroduction of the budget-friendly Trax, which has a sticker price of $20,400, may start a trend for automakers looking to attract those who 18 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023

The Wards Intelligence survey of more than 300 U.S. owners/operators, general managers, chief financial officers and sales and service staff from dealerships of various sizes provides some insights into the state of the industry. The cross-section of respondents from both new- and usedvehicle dealers ranges from small (monthly sales of 80 units and below) to large (monthly sales of 81 or more units).

So, with these new economic factors in mind, how will dealers increase revenue in the next 12 months? (See chart below) Dealer respondents projected that fixed ops would be an area of growth for them during 2023, and so far they seem to be correct.

AutoNation reports parts and service revenue increased 7.6% in the first quarter vs. a year ago, to $1.1 billion on a same-store basis. Lithia Motors’ Q1 revenue for service,

body and parts was $669.9 million, up 9.4% vs. a year ago, also on a same-store basis.

Cox reports buyers purchased more F&I products in 2022 (67%) than in 2021 (59%).

The same growth can’t be said for used-car prices, which were riding high during the chip shortage that hampered new-vehicle production but have fallen ever since. March 2023 prices fell almost 5% from September and nearly 9% from March 2022, according to iSeeCars.

Dealers may have some breathing room with bringing F&I online as only 30% of car buyers applied for credit online and 15% signed paperwork online in 2022, according to Cox.

Despite 42% of dealers citing improved relations with OEMs as important to their futures, most appear satisfied with how their OEMs treat them, with only 6% saying their relationships are poor or worse.

Dealers indicate they need continually improved relationships and strong

The Cox Automotive Group reports March 2023 used-vehicle sales through dealerships (not private-party transactions) came in at an estimated 1.8 million in March, down 3.5% from March 2022. The statistics may be skewed due to a rise in cash sales, Cox reports, a trend that has taken hold due to rising interest rates.

Perhaps it’s not surprising that most survey respondents (86%) say streamlined F&I processes and improved relationships with lenders (cited by 81%) are the factors most critical to their dealerships’ future successes.

Dealers and other retailers know the recent pandemic changed shoppers’ expectations about service.

As we reported earlier, data from the 2022 Cox Automotive Buying Journey Study shows the majority (61%) of vehicle buyers were “satisfied” with their car buying processes, but that’s down five percentage points from the previous year.

High satisfaction with pre-ordering, including solid communication among dealers and customers, may explain why satisfaction rates remained high as the pandemic lingered, Cox reports.

The challenge is for dealers to embrace continued enthusiasm for pre-ordering and grow their online offerings, including F&I. That could further boost dealers’ profits.

Lenders seem to be rising to the challenge of working more closely with dealers.

Equifax is one such company offering lending based on “alternative credit data” that gives a holistic view of customers’ financial pictures. Analysts expect to see such partnerships grow as vehicle prices continue to rise.

Another interesting finding from the Wards Intelligence survey responses is that most retailers (82%) believe improved relationships with their OEMs are critical.

Historically, automakers and dealers generally have had a less-than-harmonious relationship from time to time. That heightened as manufacturers over-built vehicles and pushed dealers to take them, many of which sat on lots for weeks.

partnerships with manufacturers and stronger brand loyalty to continue retail success.

But manufacturers’ fast-track plans to sell, and service electric vehicles currently is a pain point for dealers.

Most survey respondents (81%) report electric-vehicle adoption will negatively impact their businesses in some way. The top reasons include the cost of retrofitting their service departments and stocking necessary parts (21%), the potential drop in service/ parts revenue (19%) and lower vehicle sales (13%). Only 18% of respondents do not expect BEVs to impact some part of their operation negatively.

(Continued on next page)

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023 | 19

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(Continued from previous page) If findings in a recent J.D. Power study are accurate, the manufacturer-dealer divide may grow further as the BEV activity heightens.

The J.D. Power study shows pricing and accessibility of public charging and ambiguous tax credits play a significant role in buyers’ decisions not to purchase BEVs.

their subsequent purchases. That number has grown steadily in the first three months of this year to 21% in March 2023.

Chairman Geoffrey Pohanka sought to smooth relations between dealers and manufacturers in his inaugural address at the National Automobile Dealers Assn.’s 2023 show in Dallas.

Adding to that is a dip in BEV sales, down from 8.5% in February 2023 to 7.3% in March 2023.

“Dealers and their OEMs essentially want the same things: to give customers a great buying experience and to sell a lot of cars and trucks,” he told attendees at the January show.

The decline is a concern because J.D. Power data shows an increase in consumers who are “very unlikely” to consider an EV for

Whether dealers or automakers can truly define that “great buying experience” and deliver it cost-effectively is the question. n

We host a myriad of tools to help independent dealers in the tristate area grow their businesses.

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INDUSTRY NOTES: RECALLS

CARFAX finds 2.5M vehicles tagged for recalls on roads Early in May, BMW joined Ford, Honda and Fiat Chrysler, issuing a “Do Not Drive” warning for 90,000 vehicles built between 2000 and 2006 for the recall of a defective Takata air bag. Two weeks later Chrysler announced a “Park Outside” warning with the recall of 2014 to 2016 Jeep Cherokees due to a fire risk.

Unfortunately many of the dire warnings of life- and property-threatening defects are not being heeded. A new study released

by CARFAX shows more than 2.5 million vehicles tagged with “Do Not Drive” or “Park Outside” safety recalls remain unrepaired as of May 1.

with a high risk of causing a fire, and owners are advised to park these vehicles outside of garages and parking structures, and away from buildings.

“Do Not Drive” and “Park Outside” notifications are recalls issued by automakers and federal safety officials. A “Do Not Drive” recall advises drivers not to operate their vehicles because a serious safety issue could lead to an accident or physical harm.

A “Park Outside” recall is issued for vehicles

“It’s heart-breaking. On average 20 to 25 percent of these vehicles are not getting fixed and the need is so urgent,” said Patrick Olsen, Editor in Chief at CARFAX. “CARFAX is working to raise awareness and trying to bring those numbers down.”

CARFAX studied five years of recalls and painstakingly searching through individual registrations and safety inspection reports to see if consumers had the repairs made to the vehicles. “We were startled by the numbers we found,” Olsen said.

Olsen suggested a variety of factors could have impacted the lack of repairs, including the notifications being required to be sent through first-class mail, or consumers dismissing the notices as scams. “There’s also a significant portion of people that don’t have the time or the ability to give up their vehicles for a period of time. It’s how they get to work and is part of their livelihood,” Olsen said.

Under the two orders, the National Highway Traffic Safety Authority (NHTSA) states repairs are free and the dealership and manufacturer will tow the vehicle for free.

In the CARFAX study, six states had more than 100,000 unrepaired vehicles, with California leading the way (245,000). The other state with more than 100,000 recall vehicles still on the road were Texas (242,000), Florida (237,000), New York (118,000), Pennsylvania (106,000) and Ohio (101,000).

In November, the NHTSA reported a person being killed by an airbag rupture in a Ford Ranger under a “Do Not Drive” warning. “These are real concerns and could unfortunately have real consequences if they are not worked out,” Olsen said.

Consumers and dealerships may check for free to see if their car has any open recalls at Carfax.com/recall. n

22 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023

1-800-366-2141 | 88 Auction Road | Manheim, PA| 17545 | www.dealergoodies.com MIDATLANTIC DEALER NEWS MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023 | 23

MARYLAND FORMS DEALERS CAN ORDER SECURE FORMS QUANTITY PRICE TOTAL $ DUE Secure Power of Attorney (3 part-50 per package) Secure Dealer Reassignment (1 part-100 per package)

$ 00* $ _____ 20. ________ $ 00 $ _____ 20. ________ Total Secure forms order $ ________ 6% Maryland Sales Tax ________ Shipping ________ TOTAL enclosed for Secure forms $ ________

Shipping Cost: 1 – 4 packs = $10.00 5 – 10 packs = $15.00 Over 10 packs – Please call ahead for pricing.

NON-SECURE FORMS

QUANTITY $MEMBER NON-$MEMBER TOTAL $ DUE

Cash Sales Contracts (100 per pack) Odometer Mileage Statement (100 per pack) FTC Buyers Guide (100 per pack) Check one:  AS IS  IMPLIED Restricted Power of Attorney (100 per pack) Deal Jackets (100 per pack) Test Drive Agreements (100 per pack)

_____ _____ _____

47.00 18.00 $ 00 28. $

$

94.00 36.00 $ 00 56.

________ ________ $ ________

$

$

$

$

$ 00 $ _____ $10.00 20. ________ $ 00 $ 00 $ _____ 24.

48. ________ $ 00 $ _____ $28.00 56. ________ Total Non-Secure forms order $ ________ 6% Maryland Sales Tax ________ TOTAL enclosed for Non-Secure forms $ _________ TOTAL AMOUNT DUE $ _________

Dealership ________________________________________________________________________ Dealer # (required) _________________________________________________________________ Member  Yes  No Contact Name ___________________________________________ Email _____________________________________________________________________________ Address __________________________________________________________________________ (FEDEX & UPS WILL NOT DELIVER TO P.O. BOX)

City_______________________________________________State ______Zip _________ Phone ______________________________Fax ______________________________________ Card Type:

 VISA

 MasterCard

 AMEX

Name on Card ___________________________________________________ Exp. Date________ Card Number _____________________________________ Security Code________ Make checks payable to: PIADA or fill out payment information below: Card Type:

 VISA

 MasterCard

 AMEX

 Discover

Name on Card ___________________________________________________ Exp. Date________ Card Number _____________________________________ Security Code________ We cannot process orders until payment is received.

Signature ____________________________________________ Date ___________________ For questions you may contact Cynthia Slemons at 717.238.9002 ext. 16 or Cynthia@piada.org.

PENNSYLVANIA FORMS DEALERS CAN ORDER DESCRIPTION QUANTITY MEMBER NON-MEMBER MEMBER EXT NON-M EXT $

“As is” Supplemental Statement Buyers Guide Plastic Holders (50) Buyers Guide Window Form Buyers Guide Window Form (Spanish) Consignment & Sales Agreement Form Deal Jackets Fees Chart (wall mount) Fraud Hotline Poster Installment Sales Contract (100) Interpreter Confirmation of Translation Key Tags (250) Lease Agreements Limited Warranty No Purchase Required Disclosure Notary Receipt Pad Odometer Mileage Statement Power of Attorney Disclosure Forms Rental Agreements Retail Buyer Order Form Secure Power of Attorney Secure Power of Attorney Log Book Temp Tag Log Book Title Release Authorization Used Vehicle Record

$

_____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____

24.00 $ 00 40. $ 00 20. $ 00 18. $ 00 25. $ 00 30. $ 00 14. $ 00 14. $ 150.00 $ 00 25. $ 00 32. $ 00 78. $ 00 26. $ 00 24. $ 00 15. $ 00 18. $ 00 18. $ 00 32. $ 00 32. $ 00 50. $ 00 15. $ 00 15. $ 00 15. $ 00 15.

48.00 80.00 $ 00 40. $ 00 36. $ 00 50. $ 00 60. $ 00 28. $ 00 28. $ 300.00 $ 00 50. $ 00 64. $ 156.00 $ 00 52. $ 00 48. $ 00 30. $ 00 36. $ 00 36. $ 00 64. $ 00 64. $ 00 50. $ 00 30. $ 00 30. $ 00 30. $ 00 30.

_____ _____ _____ _____ _____ _____ _____ _____ _____

$

28.00 28.00 $ 00 28. $ 00 28. $ 00 28. $ 00 28. $ 00 28. $ 00 28. $ 00 28.

$

$

$

$

_______ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______

_______ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______

$

$

$

$

$

$

ADP FORMS Customer Delivery Check List Customer Proposal Damage Disclosure Delivery Confirmation Goodwill Repair Acknowledgement Insurance Coverage Acknowledgement Lease Spot Delivery Agreement Notice to Co-Signer Trade-In Appraisal

$ 56.00 _______ $ _______ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ Subtotal _______ $ _______ 6% Pennsylvania Sales Tax $ _______ $ _______ Shipping $ per pound + Special Shipping $ at cost. Total w/o shipping $_________ Please make checks payable to PIADA, 1501 North Front St., Harrisburg, PA 17102 (call in to receive shipping cost to include in payment) or you may fax orders to 717.238.3870 with credit card information. *All orders MUST be accompanied by a method of payment. *Must provide DIN if applicable.

Dealership ________________________________________________________________________ Contact_______________________________________________Date ________________

FOR INFORMATION ON MEMBERSHIP...

Address __________________________________________________________________________

MIDATLANTIC IADA = PIADA + MDIADA + DEIADA Contact Cyndi atat717-238-9002 x16 Contact Shannon 717.238.9002 x 18 Shannon@piada.org Cynthia@piada.org www.piada.org • www.mdiada.org • www.deiada.org

City_______________________________________________State ______Zip _________

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Phone _____________________Fax ____________________*DIN ___________________ Card Type:

 VISA

 MasterCard

 AMEX

Name on Card ___________________________________________________ Exp. Date________ Card Number _____________________________________ Security Code________

24 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023

All forms come in packs of 100 unless otherwise noted.

America’s Auto Auction Lancaster Join Us in Welcoming

Now Running at

America’s Auto Auction Lancaster For More Information Check our Social Media or Contact Greg Gimber in Fleet/Lease Dept.

Running 800+ Dealer Consignment On Wednesday Starting at 9am.

Contact Inside Sales by Thursday to request Numbers! 717.569.5220 x406

New to our Auction?

We would love to see you!

Contact Edna in Dealer Reg to get setup in a few minutes!

717.569.5220 x224

1040 Commercial Ave, East Petersburg, PA 17520 717.569.5220 | www.aaalancaster.com | www.edgepipeline.com

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023 | 25

Pictured Below Are Just A Sampling Of The Exceptional Vehicles To Be Offered At The Upcoming Sale

1949 Chevrolet Deluxe Tin Woody

1950 Mercury Monterey

1962 Chevrolet Impala Wagon

1965 Ford Falcon Convertible

1972 Olds Cutlass

1978 Chevrolet Corvette

1980 Chevrolet LUV

1986 Chevrolet Camaro Z28 IROC

1987 Chevrolet C10 Silverado

1992 Pontiac Grand Prix

1993 Chevrolet Corvette CVT

2002 Mercedes SL500

26 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • JULY 2023