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M A R C H 2 0 2 2 • 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

MID-ATLANTIC

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

TIPS TO STAY COMPLIANT:

During F&I Presentations

Used-Car Market to Remain Robust in 2022, Ally CEO Says

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5 Ways to Fill Open Positions Faster

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Vehicles Hard to Get, But Auto Financing Isn’t

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MIDATLANTIC AUTO DEALERS UNITED 1501 North Front St., Harrisburg, PA 17102

Taking a Multi-Tiered Approach to Fight the Growing Ways Fraudsters Operate

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022 2 82 9 1

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Harrisburg

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Celebrating 40 Years of Dedicated Employees and Loyal Customers Thursday, April 7TH, 2022!

Thank You All!

2 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022

MARCH 2022 | 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 Copyright 2022 Chris Smiley - Advisor Mountville Motor Sales, Columbia, PA rcsmiley@comcast.net Noah Melamed- President Ticket to Ride Auto, Lancaster, PA nmelamed@yourttr.com Michael Brill - Chairman of the Board B&B Automotive of Fairless Hills, Fairless Hills PA 5to5cars@comcast.net Bert Straub, President - Elect 1st Choice Auto LLC, Fairview, PA bertcstraub@gmail.com 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 Kerri Rotunda • kerrir@corryade.com Corry Auto Dealers Exchange, Corry, PA

FEATURES 4 | Tips to Stay Compliant During F&I Presentations Today, more than ever, it’s critically important to train dealership staff to give consumers the right information in a compliant manner. 6 | Taking a Multi-Tiered Approach to Fight the Growing Ways Fraudsters Operate Today’s fraud network is comprised of various, interconnected relationships of different abuse tactics. 8 | Happy Employees Leads to Happy Customers There’s something different about Hendrick Automotive Group that elevates its automotive dealerships above its peers. 10 | KONTOS KOMMENTARY: 2022 Kontos Outlook 2021 was a banner year for wholesale vehicle values. 16 | 5 Ways to Fill Open Positions Faster Many dealerships already had a problem recruiting and keeping employees, but the COVID-19 pandemic has exacerbated the issue. 16 | Firms Partner for Dealer Fraud Protection By Used Car News The company 700Credit LLC announced an alliance that integrates eLEND’s ID Drive, an advanced data capture and driver license authentication solution. 17 | Used-Car Market to Remain Robust in 2022, Ally CEO Says Ally Financial says it expects used-vehicle prices to fall about 15% from today’s near-record highs by the end of 2023. 19 | Data Shows Dealer Sales Activity Healthier When They Keep Ad Budgets Intact Although the pandemic was still a major force in the world, the automotive industry entered 2021 having rebounded from the earliest days of the shutdowns. 20 | Vehicles Hard to Get, But Auto Financing Isn’t Automotive consumers currently may struggle to find the vehicle they want at a decent price amid an inventory shortage. But obtaining auto financing is a cinch today for most people.

DEPARTMENTS 2 | 14 | 18 |

22 |

Advanced Issuing Agent Training Course Schedule 22 | Membership Application 24 | Order Form for Dealership Supplies (PA & MD)

Message from the President: We’ve launched our new website! NIADA Government Report Auction Directory q

MIDATLANTIC INDEPENDENT AUTO DEALERS ASSOCIATION SPONSORS

George Smouse • gasmouse@zoominternet.net Smouse Trucks & Vans, Mt. Pleasant, PA Steve Worley • worleymotors@hotmail.com Worley Motors, Enola, PA Jay Zimmerman • jay@zimmermansauto.com Zimmerman’s Auto Sales, Mechanicsburg, PA WOULD YOU LIKE TO RECEIVE A DIGITAL EDITION OF THE MIDATLANTIC DEALER NEWS MAGAZINE? Email shannon@piada.org

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022 | 1

q PRESIDENT’S MESSAGE

We’ve Launched!

NOAH MELAMED PRESIDENT MIDATLANTIC REGIONAL IADA OWNER, TICKET TO RIDE AUTO SALES FINANCE, LANCASTER, PA

Check out our new website.

We are thrilled to announce that MidAtlantic Regional IADA has launched our new website! Please visit us at midatlanticautodealersunited.org. Some of the great new features of this site include: • • • • • • •

A responsive design tailored to both our Dealers and our Vendors Access to the Members Hub to view relative content and information based on membership status Access to national and related state resources Online event registration with online payments Manage contact information and pay membership dues online Email our staff and Board of Directors And more!

Members, watch for an email from the new system to set your username and password to log in and update your profile, renew your membership, and otherwise manage your account with us. We welcome your feedback or concerns to ensure we serve you well. n

DID YOU KNOW?

midatlanticautodealersunited.org

• • • • •

As of January 2022, there were 5,152,254,587 (5.1+ billion) internet users. The average global Internet user spends 6 hours and 43 minutes online every day. On December 18, 2021, there were over 1.9 billion websites. Global retail eCommerce sales are projected to amount to $5.4 trillion in 2022. Global digital advertising spending is expected to amount to $524.31 billion in 2022. • In the first quarter of 2021, 74% of Google search ad clicks in the US were mobile-based (made via mobile devices).

2 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022 | 3

Tips to Stay Compliant During F&I Presentations BY JEREMY BECK Today, more than ever, it's critically important to train dealership staff to give consumers the right information in a compliant manner. The best way to ensure that your staff maintains compliance is through proper training. In addition, take the time to sit and listen to sales and F&I presentations. The most common mistakes we see, and where staff need the most training, are as follows. USING THE TERM ‘WARRANTY’ INCORRECTLY Sometimes salespeople use the word “warranty” when referring to a vehicle service contract (VSC). This is a definite no-no. If the word “warranty” is in the product, the dealership is not legally allowed to sell the product to the consumer — warranties must be free of charge. This violates the Magnuson Moss Warranty Act to interchange the words “warranty” and “service contract.”

Your dealership could be subject to state and federal enforcement action, potentially unfair and deceptive practice claims, and potentially be held liable to cover repair costs. Scare you? It shouldn't. It should help you ensure that you and your employees are using the correct verbiage and terminology when properly describing products to the customer. It's no different than telling a customer the car is red when it's yellow or that it's a premium trim model when it's a mid-range trim model. The difference is knowledge. Knowing what you don't know, but will be held liable for, is critical.

It is becoming more common for independent dealerships to offer warranties with vehicles that have a certified pre-owned (CPO) status.

4 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022

Warranties are a great value add that gives your dealership a competitive advantage and provides customers with peace of mind and higher levels of customer satisfaction. However, sometimes staff will use the word “warranty” when referring to a VSC because it’s a commonly used word that the average consumer understands. Using the wrong word in this situation can lead to big misunderstandings, especially if the consumer walks away believing that something on their vehicle is covered that isn't. Ultimately, this results in higher levels of customer dissatisfaction and bad reviews for both the dealership and their F&I product vendor, as well as the potential federal violations I mentioned above. During F&I presentations, it's important to clarify the difference between a warranty and a VSC so the consumer does not think they are getting a warranty when they purchase a VSC, or vice versa, when the

customer believes that the warranty that came with their vehicle offers the same benefits as a VSC. USING THE TERM “BUMPER TO BUMPER” When explaining the benefits of a limited warranty that comes with a vehicle, F&I managers sometimes use the term “bumper to bumper.” This is very misleading. Not even the manufacturer warranty when a vehicle is brand new provides bumper-to-bumper coverage, so saying that your limited warranty provides bumper-to-bumper coverage is just wrong.

For example, don't sell a customer a fiveyear, 100,000-mile contract when they only plan to keep the vehicle for two years. If your only goal is to sell products to make money, regardless of your customers' needs, at some point, your customer will realize they were taken advantage of. Not only will they resent you for selling them something they didn't need, but they will also leave you a bad review and tell their family and friends to never purchase from you.

To the average consumer, the term "bumper to bumper” If you value your dealership's implies that everything is reputation, hold your F&I covered. managers accountable for If you are selling a VSC that does cover conducting a needs analysis literally everything, maybe the term can and tailoring presentations be used, but personally I recommend not using this term during an F&I presentation. to individual needs. Instead, I would have F&I managers take the time to clearly explain what is covered with a limited warranty and what is not — the same with VSCs. Sometimes, I ask dealers when do they make their best decision, when they have more information or less information? Inevitably, the answer is “more information.” Your customers are the same as you. The more information you give them, the better decision they will make, and the more likely that decision will be to purchase a product that gives them a level of coverage they feel comfortable with. SELLING PRODUCTS THE CUSTOMER DOESN’T NEED

Many F&I managers are still not doing a thorough needs analysis with every customer. These days it's important to tailor F&I presentations to individual needs.

QUOTING PAYMENTS Another common area where dealership staff makes mistakes is in quoting payments. It's a pretty common practice to give some wiggle room in the initial quote, so the F&I manager doesn't have to bump up the estimated payment ceiling when they factor in pricing for F&I products.

The best way to ensure that your staff maintains compliance is through proper training. This practice is not only unethical but also illegal. Yet many dealership staff have no idea that what they're doing is wrong. Let's face it, laws and regulations change all the time and vary from state to state, and even on the local level. It's difficult to keep up. Ideally, your F&I partner is keeping you updated and on the straight and narrow with this information. Additionally, they should be

offering guidance on the right and wrong ways to advertise vehicle and product information, especially when payments are included in your advertising. When a car shopper arrives at the finance office, there should be no surprises. If you introduce F&I products early in the car-buying process, the consumer will be prepared for a higher payment because you've already explained the value to them.

The good news is that more technology is becoming available that allows your customers to calculate their own estimated payments right down to the penny, factoring in state and local taxes and fees. When quoting payments, the math has to work for your customer. When you tell them the price of the vehicle, what the payment is, what the terms are, and what the interest rate is, your customer should be able to "do the math" to get to the same payment as you're presenting. If you're unsure of how to maintain compliance while implementing transparency in your F&I department, ask your F&I partner for guidance and training. Your partner should be able to help train your staff and provide materials to help educate your customers. n Jeremy brings over 20 years of experience in the automotive industry to the EasyCare and GWC University training teams. Before joining APCO, Jeremy spent four years as a national training manager, leading internal and external training and development programs in the F&I space, including developing a highly regarded dealer leadership academy. Before that, he spent over 14 years in the retail automotive franchise space.

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022 | 5

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Taking a Multi-Tiered Approach to Fight the Growing Ways Fraudsters Operate BY ANGELICA JEFFREYS, AUTOMOTIVE FINANCIAL SERVICES EXECUTIVE, EQUIFAX Fraud. It’s a term that is often identified by the abuse types or tactics used by perpetrators: account takeover, payment fraud, malicious content, and synthetic ID. This siloed use of terminology has contributed to the belief that fraud activity is siloed. However, fraudsters don’t rely on single activities or single types of abuse. Today’s fraud network is comprised of various, interconnected relationships of different abuse tactics.

Sophisticated Fraud Alerts As organizations shift more of their operations to digital, fraudsters are focusing more of their activities on things like new account fraud and often creating new, fraudulent identities or synthetic identities. Synthetic identity fraud is built on the foundation of a fictitious identity, often created with a combination of real data and fabricated information. Fraudsters then attempt to gain credit with the fictitious identity to monetize it.

In the new digital-centric world, fraudsters are leveraging vast amounts of digital content for the purpose of false information, financial fraud, and phishing attacks. Using different web forums, marketplaces, and social media channels across the internet, fraudsters create spam and scam attacks to trick everyday consumers into sharing sensitive information — later sold or used to steal rewards, store credit, or even cash and identities.

These manufactured identities are used for short-term gain and then abandoned. When this is the case, there is no one for the lender to contact to collect funds. This poses a problem for organizations as these misclassified non-payment matters get sent to collections, further wasting resources. Lenders and dealers are now setting up sophisticated alert solutions that can help protect businesses from losses associated with synthetic identity fraud while minimizing false positives. Delivered in batch or real-time, the alerts use patentpending ML algorithms to detect synthetic identity behaviors and patterns at various entry points.

Seeing Fraud from a Holistic Viewpoint Whether it’s ransomware, loan stacking, loan fraud, payment fraud, or something else, fraudsters don't take a singular approach to attacking businesses. Therefore, there's no such thing as a single fraud solution. Addressing the various forms of fraud requires auto lenders and dealers to leverage the right tools at each stage of the customer journey. Intercepting fraud requires a multidimensional approach. Using multiple fraud point solutions is overly complex and difficult to manage. Lenders and dealers today are leveraging solutions that provide a holistic view of their fraud risk, correlated across a growing number of channels. These solutions use advanced analytics, artificial intelligence (AI), machine learning (ML), and intelligent data orchestration to provide risk managers with insights to help manage fraud decisions throughout the customer journey.

Advanced Identification & Payment Solutions Mobile devices are the new normal for today’s on-the-go consumers. The changes in technology and offerings to accommodate mobile consumers drive even higher expectations to transact with ease. If their experience aligns with their expectation, consumers are more likely to complete transactions and repeat them. Low friction experiences are expected. When consumers encounter friction in a transaction, they tend to abandon it. This leads to both lost revenue and the opportunity to gather valuable consumer insights. As such, lenders and dealers are using API-based payment enablement tools that streamline the way consumers make online payments. These businesses

6 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022

can provide real-time payment options leveraging a suite of sophisticated data to the consumer while limiting risk of cardnot-present fraud. Aside from payment options themselves, lenders and dealers are now leveraging sophisticated data from partners and carriers to authenticate a consumer’s identity. This allows for pre-population of consumer data during online checkout or form completion, providing a simpler experience with less friction. Businesses then benefit from quicker and easier digital consumer verification and lower transaction abandonment. While this technology is important, dealers and lenders are going one step further. To fight fraud effectively without disrupting the consumer’s experience, organizations are changing how they approach identity authentication and fraud prevention in today’s digital era. Through layered authentication practices, dealers and lenders can vet consumers properly, accurately, and thoroughly at the first point of contact to develop a baseline for subsequent interactions with each consumer. This enables businesses to determine if consumer behavior is consistent or if there's an anomaly that might indicate fraud. The impetus to get digital authentication right the first time provides dual protection for the business and the consumer. Fraudsters know there is no singlesource tactic to steal a victim’s identity or perpetrate into the inner system of a business. Businesses involved in the automotive industry are also realizing that there is no single-source tactic to fraud prevention and are now taking important steps to cover all possible bases to thwart the rising threat of fraudulent activity. n

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Happy Employees Leads to Happy Customers

BY RONNIE WENDT, OWNER OF IN GOOD COMPANY COMMUNICATIONS There’s something different about Hendrick Automotive Group that elevates its automotive dealerships above its peers. The dealership group topped the list of all U.S. publicly or privately held groups in the online Reputation study released in October. The brand earned the highest sentiment and visibility score to gain a Reputation score of 836, compared to a score of 769 for the second highest overall and private dealership group, Holman Automotive Group. Hendrick also had an impressive showing in Reputation’s Top 100 Dealerships with eight of its dealerships in the Top 10. Hendrick Lexus Charleston rose from No. 2 in the last report to No. 1 in the 2021 report, followed by Hendrick Volvo Cars of Charleston in the No. 2 slot. Hendrick Lexus Kansas City took the No. 4 spot while Hendrick Lexus Northlake took No. 5, (BMW of Southpoint (No. 6) Hendrick Lexus Charlotte came in at No. 8 and Hendrick Lexus Kansas City as No. 9. (Lexus of Pleasanton (No. 10) Greg Gach, president of Hendrick Automotive Group and Hendrick Companies, first thanks customers for trusting them with their business, noting it’s their reviews that put the company in the No. 1 spot for online reputation for three consecutive years. But he adds that values focused on customers also led to these rankings. “Providing the very best customer service

and taking care of people is at the heart of our company culture, and our 11,000 teammates live out these values every day,” he says. “They are why we have both the top-rated dealership overall and the top dealer group. At every level, our people make the difference. We are so proud of them for this amazing achievement.” CULTURE CHANGES CUSTOMER RELATIONSHIPS Upon learning of the Reputation scores, Chad Jernberg, vice president of Customer Experience at Holman Automotive, said, “Holman is—and always will be—a customer-centric business where delivering an exceptional experience remains our top strategic priority. The voice of our customers serves as a catalyst for change, and we’ve made a concerted effort to amplify their feedback across our entire organization in order for our service-oriented culture to thrive and evolve.” This focus lives and dies on company culture, says Gach. “We see ourselves as not in the car business but in the people business. The people part of our business begins with taking care of our employees,” he says. The culture of taking care of your own starts with the chairman and CEO of Hendrick Automotive Group, Joseph Riddick “Rick” Hendrick III. “He tells us repeatedly that our people are our most important asset, and he takes that to heart,” Gach says. So much so that during the pandemic, the dealership group of 93 car dealerships didn’t furlough anyone. The company provided 80% salaries to those employees in areas

8 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022

where health guidance prevented businesses from operating. “We had some dealerships in California that had to close their doors and Mr. Hendrick made sure everyone got paid, which was huge,” Gach says. Every dealership also hosts monthly luncheons that recognize outstanding performers and give all employees a chance to win prizes. The events develop comradery that carries over to customers. “Employees prioritize people over profits in their customer interactions,” he says. “Obviously, we must make profits to keep the lights on. But if you treat employees well, they are excited to come to work. Customers see that excitement and have a much better experience.” A commitment toward continuous improvement represents a core value. Here, the automotive group also stands ready to deliver. The Ricky Hendrick Scholarship Fund, for example, has provided education assistance to over 3,200 employees. And Hendrick University provides online training to staff and partner with local technical colleges to help technicians hone their skills. It’s these efforts that lead to satisfied employees and little turnover. Though the dealership turnover sets a little higher than the management company, Gach reports it is still far less than their peers. “The proof in the pudding is that we have hired many quality people because of referrals from existing teammates. These people enjoy working here so much that they referred us to their friends,” Gach says.

CARING FOR CUSTOMER’S COMMUNITIES Customers are drawn to how the dealership cares for its community, Gach adds. The company always provides disaster relief when areas, where it has stores, get hit by natural disasters.

purchase online. “The most important thing is that you follow up quickly and show that you care about them, want their business, and want them to have a good experience,” Gach adds. “We are constantly training our teams how to best use online tools and provide a better customer experience.”

“We have a robust system in place to provide water, diapers, baby food, etc. to teammates and communities affected by natural disasters,” Gach says, noting the company helped areas of Texas affected by the severe winter storm and areas affected by Hurricane Florence.

He admits the shortage of new and used cars has challenged the selling process. With 9,000 used cars available, the company can usually meet customer needs. But if they cannot, they sell deeply into the pipeline. But this process only works with transparency and open communication, according to Gach.

The Hendrick Cares initiative encourages employees to respond to community needs and step up when they see an opportunity. The company supports local schools and food banks and it’s Hendrick Get Set. Go! Competition funds education projects that increase student access to science, technology, engineering and math (STEM). To date, the company has provided 230,000 holiday meals, $2 million to food banks, 5.5 million pounds of food, and $100,000 for STEM education needs. Hendrick Automotive Group strives to always follow the philosophy of Rick Hendrick, who says, “It’s our civic duty to take care of the people in our community, and a moral duty just for mankind.” PUSHING A POSITIVE CUSTOMER EXPERIENCE Pandemic lockdowns challenged every dealership’s ability to service customers; Hendrick dealerships were no exception, reports Gach. Both Brian Johnson, vice president of marketing at Hendrick Automotive Group, and Gach stress their first strategy was to improve their online game. “We had to provide a great experience,” Gach says. “When someone starts the process, you have to get back to them right away, especially with the chip shortage impacting inventories.” He says it involves understanding how people want to shop and meeting them where they are. For instance, some people want to start the process online and finish in the store while others want to do the entire

Hendrick Automotive Group communicates regularly with teammates and customers to ensure everyone understands where things are. That also is the pinnacle upon which they build their service centers. “We have to make sure people have safe and reliable transportation,” Gach says. “The key is to communicate with the customer, put them in a loaner if we can, and do our best to constantly touch that customer to tell them how we will do our best to take care of them.” He adds teammates strive to communicate with customers how they want to be communicated with, whether it’s messaging, texts, email or phone. “We teach teammates how to communicate and answer customer questions quickly no matter what platform they are on,” he says. “We communicate with the customer where they want to communicate and do so as efficiently as possible.” NAVIGATING THE NEGATIVE Though customers put Hendrick Automotive Group at the top of the list for online service, Gach is quick to add “we’re not perfect. Even though we have an outstanding reputation and a great score, we still get negative reviews sometimes.” How teammates answer reviews—even negative ones—is the key to the company’s success, he adds, noting the company gets managers involved to resolve negative reviews immediately. “Most of the time it’s because of a communication challenge,” he says. “The

customer didn’t know the part was on order or the vehicle was in transit. Usually, we can handle the problem quickly and even get the review upended.” With plenty of positive reviews, it’s easy to rest on your laurels. But Gach says the company is not afraid of negative reviews because they help dealerships address another core value—continuous improvement. “One of my lines is, ‘What did we learn here today?’” he says. “if we got a review, how did it happen? How can we prevent it from happening again? Sometimes it’s not something we can control. Those instances help us train our teams on how to message the consumer around that.” Negative reviews can drive down Google rankings, so it’s also important to encourage satisfied customers to leave reviews. Provide technology that makes it easy for customers to leave reviews, he says. Hendrick dealerships use Reputation’s communications platform to gather reviews. When customers finish their service work or sale, Hendrick teammates push a link to the customer that they can click on to leave a review. Targeted top-level training further elevates the customer experience, adds Gach. Hendrick Automotive Group uses its Reputation score to provide consistent training to teammates at every store. The company looks at dealership scorecards, online reviews, and Reputation scores regularly. “Every dealership knows where they stand and how well they are doing for the month,” Johnson says. “We have teammates at the management company dedicated to this. We have a dedicated team at Reputation that supports the management company and the dealerships. But overall, we just make it a priority to maintain an outstanding online reputation.” This, he adds, makes marketing the company easy. “It’s social proof that we provide great service,” he concludes. t

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022 | 9

KONTOS KOMMENTARY

2022 Kontos Outlook By Tom Kontos, Chief Economist, KAR Global 2021 was a banner year for wholesale vehicle values. On a full-year basis, we saw values above pre-COVID/2019 levels by 30% for the year, as a perfect storm in used vehicle demand faced a perfect drought in used vehicle supply—much of which was brought on by the chip shortage. As we look ahead to 2022 and what the year may bring for our industry, there are several key things to keep in mind and look out for as the year unfolds—consider this my Kontos Krystal Ball: Repossessions will probably be the “first responders” to the used car shortage. Because of government stimulus plus deferrals and forbearance programs that banks and lenders have provided, people were able to postpone or avoid potential repossessions. We will possibly now see an uptick in repos as these programs are slowly phased out—not back to pre-pandemic levels, but we should see increases. In mid-2022, I suspect we will be talking a whole lot less about the chip shortage, as manufacturers use creative new approaches to address this problem. New car inventory will move closer to normal helping used vehicle demand stabilize. I also anticipate more stable wholesale values—in other words no dramatic rises or falls in 2022. We will likely see a return to pre-pandemic seasonal patterns with the usual uptick during tax season in the spring, and a gradual softening the rest of the year. In general, I will be keeping my eye on the economy—focusing on employment, inflation and GDP growth. One area that is of major concern to many economists is inflation and the spillover impacts that might accelerate higher interest rates that could potentially make new and used vehicles less affordable. As we transition to renewables from fossil fuels and electric vehicles from internal

combustion engines, it’s going to be costly and will take a while to figure out how we will produce and consume energy in a new way. These things take time and will be expensive in the near term. This is important to keep in mind, as we see more and more electric vehicles entering the car ecosystem. In short, 2021 brought us new records in pricing and new lows for inventory. I’m looking forward to analyzing trends for all of our customers and partners throughout 2022 with the hope that greater stability will be beneficial to both. n Disclaimer: The views and analysis provided herein relate to the vehicle remarketing industry as a whole and may not relate directly to KAR Global. The views and analysis are not the views of KAR Global, its management or its subsidiaries; and their accuracy is not warranted. Forward-Looking Statements: The statements contained in this report and statements that the company may make orally in connection with this report that are not historical facts (including, but not limited to, expectations, estimates, assumptions and projections regarding the industry and business) may be forward-looking statements. Words such as “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “promises”, “likely to” and similar expressions identify forward-looking statements. Forwardlooking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in the company’s Securities and Exchange Commission filings. The company does not undertake any obligation to update any forward-looking statements.

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12 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022

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As the nation’s leading provider of end-to-end wholesale vehicle solutions, Manheim is here to help you be more successful with the in-lane and online tools you need.

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MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022 | 13

NIADA GOVERNMENT REPORT

NIADA, Washington Update BY BRETT SCOTT, NIADA VICE PRESIDENT OF GOVERNMENT AFFAIRS income cap on increases in the child tax credit to target the money to low-income families while extending that credit for 10 years, as Manchin had previously proposed. Reuters’ sources said the slimmed down bill would still likely cost more than $1 trillion. NIADA is your voice in Washington D.C., advocating for independent dealers, the used vehicle industry and small business. Here’s a look at the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities.

LEGISLATIVE

President Biden’s top legislative priority – the massive social spending package known as the Build Back Better act – was effectively sunk in December, when Sen. Joe Manchin (D-W.Va.) announced he would not vote for it because of concerns about inflation, deficit spending and what he called an attempt to “reshape our society.” But that doesn’t mean the White House has given up on salvaging at least parts of it.

NIADA joined more than 80 trade association and business groups in signing a letter to House and Senate leaders opposing the “multi-trillion-dollar tax increase included in the Build Back Better bill” and asking them to “focus instead on the challenges confronting American families and businesses today – rising prices, labor shortages, and ongoing supply chain constraints.”

REGULATORY

The Federal Reserve Board and the Consumer Financial Protection Bureau announced the dollar thresholds used to determine whether certain consumer credit and lease transactions are exempt from Regulation Z (Truth in Lending Act) and Regulation M (Consumer Leasing Act) in 2022.

Reuters, citing unnamed sources, reported the Administration is looking for a “reset” of the $1.75 trillion bill with an eye toward keeping its climate change proposals while reducing or cutting other items in an attempt to win Manchin’s support.

By law, the agencies are required to adjust the thresholds annually based on the annual percentage increase in the consumer price index for urban wage earners and clerical workers, known as CPI-W. Transactions at or below the thresholds are subject to the protections of the regulations.

Manchin’s vote is crucial because the Senate is split 50-50 between Democrats and Republicans, and with the GOP solidly against the bill, every Democratic vote is needed to pass it using the budget reconciliation process.

Based on the annual percentage increase in the CPI-W as of June 1, 2021, the protections of Regulations Z and M generally will apply to consumer credit transactions and consumer leases of $61,000 or less in 2022.

The White House is considering cutting back or cutting out measures such as paid family leave, universal pre-kindergarten and home healthcare, as well as placing an

Private education loans and loans secured by real property (such as mortgages) are subject to Regulation Z regardless of the amount of the loan.

14 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022

POLITICAL ACTION COMMITTEE

Last month, NIADA’s political action committee increased the reach and scope in Washington with the addition of Christina Perez as NIADA’s new director of government affairs. NIADA-PAC will be Christina’s primary focus. She’ll work to get association members engaged in the PAC, as well as raising awareness of the PAC and educating NIADA member dealers about the importance of participating. She’ll also be involved with lobbying on Capitol Hill to advocate for independent dealers, the used vehicle industry ad small business, and will represent NIADA in meetings with members of Congress and other government entities.

GRASS ROOTS

Florida: The state’s Department of Highway Safety and Motor Vehicles could suspend Carvana’s dealer license because of delays in transferring titles to vehicles sold by the online auto retail giant. Television station WFLA in Tampa reported the department sent an email to Carvana in December giving the company until Jan. 31 to resolve all title-related issues and submit title applications for vehicles sold before Dec. 21, 2021. Otherwise, FDHSMV said it “may commence administrative action to suspend Carvana’s dealer license in Florida.”

The email said FDHSMV “remains concerned with Carvana’s apparent inability to comply with the provisions of Florida law requiring a dealer to apply for title within 30 days of the sale and the impact that has on Florida consumers.” WFLA said the email exchange between the department and Carvana included a spreadsheet showing 300 vehicle sales nationwide dating to late 2019 in which the title has not yet been transferred – more than 100 of them in Florida. Carvana, America’s second-largest used vehicle retailer, reached a settlement with Florida regulators in 2021, according to WFLA, agreeing to pay $500 each to 12 customers who had waited three to eight months to receive their titles. It had previously had its license suspended for 180 days in Wake County, N.C., for violating the state’s dealer licensing laws – including failing to deliver title work in a timely manner. North Carolina: On Dec. 1, 2021 a state law went into effect making catalytic

converter theft a Class I felony and requiring businesses that buy used catalytic converters to get documentation and maintain detailed records on people who sell the devices to them. According to the National Insurance Crime Bureau, catalytic converter theft claims to insurance companies rose 326 percent – from 3,389 to 14,433 – between 2019 and 2020, as the prices for the metals inside them, including platinum, palladium and rhodium, have risen sharply. North Carolina is among 10 states that enacted new laws regulating catalytic converters and their theft or sales in 2021. Virginia State Sen. Frank Ruff Jr. said he plans to introduce a bill based on the North Carolina law that would make the theft of a catalytic converter a felony and would require anyone in possession of one that had been removed from a vehicle to be an authorized scrap seller or have a bill of sale, receipt or other documentation. n

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2/14/22 5:15 PM MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022 | 15

5 Ways to Fill Open Positions Faster By Christina Wofford, Senior Vice President of Marketing & Communications, Digital Air Strike Many dealerships already had a problem recruiting and keeping quality employees, but the COVID-19 pandemic has only exacerbated the issue. The “Great Resignation” also resulted in 4.4 million people quitting their jobs in September alone, according to the U.S. Labor Department. Remote employment has grown exponentially, while candidates for customer-facing jobs have only decreased. Competition for qualified candidates is fierce, while recruiting has become even more of an online affair. Here are five ways to use technology to fill open positions faster:

Post Jobs on Your Google Business Profile (formerly known as Google My Business). The average person searches on Google 3-4 times a day. Since Google owns more than 90% of the worldwide search market, your dealership is missing out if you’re not promoting your open positions on your Google Business Profile, which shows up on the first page of Google when consumers and job seekers search for you. This is a great place to promote your open positions, great benefits, and even testimonials from happy employees.

Start Social Recruiting on Social Media. More than 55 million companies are listed on LinkedIn, with 14 million open jobs posted. Almost 2 billion users visit Facebook daily. Make sure your jobs are posted across social media – – including on Facebook’s feature just for recruiting, Facebook Jobs. Go a step further and don’t just post your open positions on social media but make sure your feeds include posts that would make someone WANT to work at your dealership. Highlight employees, your benefits, and why someone will enjoy a career in the automotive industry. Encourage your employees to comment on and share the posts to extend your reach and explain why others want to work for you.

Use Social Ads to Promote Competitive Positions. Advertise your open positions to active job seekers on social media and get creative with targeting. Use geo-targeting to reach candidates based on demographics, interests, and online behaviors. Include location targeting to promote your open positions to your competitors’ rock star employees and reach younger workers graduating from college or a trade school. Find an outstanding creative and marketing team to design an enticing ad and write eye-catching copy to ensure your ads attract more candidates.

Utilize an AI Chatbot on Your Website. Visitors to your website may also be looking for a job. Feature your open positions prominently and in an interactive way by including them in your website chat with links to your open positions and an explanation of all your great benefits. Make sure your chatbot is also linking to your current positions and benefits. With AI, your chatbot can ask/ answer qualifying questions and do some of the heavy lifting so your team can step in to reach out to serious contenders only.

Protect and Promote Your Reputation as an Employer. More than 70% of job seekers read reviews about companies, and 33% of candidates have rejected an offer because of bad reviews. Make sure your reputation correctly reflects your dealership. Monitor and manage sites like Glassdoor, 38 million employer reviews, and 50 million monthly site visitors. Respond to all reviews and use your responses to good and bad reviews as an opportunity to explain and showcase the benefits of working at your dealership. Take the work out of hiring by following these five easy steps. Expert marketing teams can get the job done right if your dealership doesn’t have time to monitor and post jobs. n

16 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022

Firms Partner for Dealer Fraud Protection By Used Car News The company 700Credit LLC, a provider of credit reports and compliance solutions, along with eLEND Solutions, an automotive FinTech company, announced an alliance that integrates eLEND’s ID Drive, an advanced data capture and driver license authentication solution. The integration is designed to help auto dealers protect their business and reputation from the serious and growing threat of identity and financial fraud and classify their showroom traffic by looking at their FICO score. “The challenges of identity fraud have only grown,” said Ken Hill, managing director, 700Credit. “Our alliance with eLEND means that now our dealer customers, with the swipe of a driver’s license, can authenticate that license, pre-screen the customer, and perform a Red Flag ID Verification including Synthetic Fraud. The combination of document and data verification between 700Credit and eLEND’s products offers auto dealers powerful protection, while also enabling rapid digital data capture and export.” The addition of ID Drive means that 700Credit dealer customers can rapidly confirm identity and pre-screen their showroom clients through the ID Drive scanner at the beginning of the sales process. This shields them against fraud while providing visibility into the customer’s buying power upfront so they can provide customers with an accurate payment quote at the top of the sales funnel. “Because ID Drive prequalifies upfront, auto dealers can rapidly get the customer into the right deal structure, accelerating the transition to, and through, F&I, which can reduce costly rehashes,” said Pete MacInnis, CEO and founder of eLEND Solutions. “This creates important efficiencies for dealerships and provides a better customer experience.” n

Used-Car Market to Remain Robust in 2022, Ally CEO Says

Ally reports U.S. consumer auto loan and lease originations, including new and used, were $10.9 billion in the fourth quarter, up 19.8% vs. a year ago. By Jim Henry Ally Financial says it expects used-vehicle prices to fall about 15% from today’s nearrecord highs by the end of 2023, but the company adds that so far in early 2022, there’s no sign of a significant decline, so potentially there’s upside to the forecast. “Used-car prices, we see them within our financial trends as moderating,” Ally CEO Jeffrey Brown says in a Jan. 21 conference call to announce fourth-quarter earnings. “But if you look at the environment, usedcar prices are still very strong. Our outlook this year is a really robust used-car market.” In a separate forecast earlier this month, Cox Automotive says it expects the Manheim Used Vehicle Value Index to decline just 3% by the end of 2022 vs. 2021. For its key auto finance segment, Ally reports pre-tax income of $839 million for the quarter, an increase of 49% vs. a year ago. U.S. consumer auto loan and lease originations, including new and used, were $10.9 billion in the fourth quarter, up 19.8% vs. a year ago.

Used-vehicle originations accounted for 64% of Ally’s fourth-quarter U.S. consumer auto originations, up from 51% a year ago. Ally ends the fourth quarter with 21,076 active dealership relationships, up 12.6% vs. a year ago. That’s the 12th year in a row the number of dealership relationships has increased, the bank says. For full-year 2021, auto originations were $46.3 billion, up 31.9% vs. 2020. For the near future, Ally’s guidance is for the annual rate for auto originations to continue in the range of low $40 billions, Brown says. “We’re large. We’re fast. Dealers like us,” he says. “We respond very quickly.” Ally says auto-

decisioning accounts for 70% of its approved credit applications in auto and related insurance in 2021.

mortgages and credit cards, fourth-quarter net income attributable to common shareholders was $624 million, down 9.2%.

For all Ally Financial business segments, including auto finance and insurance, online banking, brokerage and wealth management,

For full-year 2021, Ally net income attributable to common shareholders was $3 billion, almost triple 2020. n

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CORRY AUTO DEALERS EXCHANGE 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 corryade.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

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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 Weekly Sales Wed. 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 BLOOMSBURG AUTO AUCTION 25 Ridge Road, Bloomsburg, PA 17815 570.784.2306 Wednesday 10:00 AM bloomaa.com CENTRAL PENNSYLVANIA AA Exit 178 of I-80, Lock Haven, PA 17745 800.248.8026 / Fax: 570.726.7841 Thursday 9:45 AM Office: MTF 8-5:30 W-Th 8-6:00 cpaautoauction.com

GREATER ERIE AUTO AUCTION 7700 Avonia Road, (Exit 16 of I-90 & PA Route 98) Fairview, PA 16415-0916 814.474.3900 / 877.474.GEAA Fax: 814.474.4969 Tuesday 1:45 PM greater-erie.com LEHIGH VALLEY AUTO AUCTION 3880 Lehigh St., Whitehall, PA 18052 610.435.5554 / Fax: 610.435.5557 Wednesday 5:00 PM lehighvalleyautoauction.com MANHEIM KEYSTONE 488 Firehouse Road, Grantville PA 17028 717.469.7900 / Fax: 717.469.2842 Every Monday 11:00 AM manheim.com MANHEIM PENNSYLVANIA 1190 Lancaster Rd., Manheim, PA 17545 717.665.3571 / Fax: 717.665.9265 Exotic Highline Sales every other Thursday - 9:00 AM Every Friday Sale 8:30 AM manheim.com MANHEIM PHILADELPHIA 2280 Bethlehem Pike, Hatfield, PA 19440 215.822.1935 / Fax: 215.822.8140 Tuesday 9:30 AM TRA Sale - Tuesday 12:30 PM Office: M-Th 8:30-5:00; F 8:30-1:00 manheim.com MANHEIM PITTSBURGH AA 21095 Route 19, Cranberry Twp., PA 16066 724.452.5555 / Fax: 724.452.1310 Wednesday 9:00 AM manheim.com

18 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022

NORTH EAST PENNSYLVANIA AA 860 N. Keyser Ave., Scranton, PA 18504 570.207.CARS / Fax: 570.207.1860 Tuesday 10:00 AM nepautoauction.com PERRYOPOLIS AUTO AUCTION Route 51 S. Perryopolis, PA 15473 724.736.4445/ Fax: 724.736.0466 Friday 9:45 AM perryautoauction.com MARYLAND BSC AMERICA/BEL AIR AUTO AUCTION P.O. Box 200, 4805 Philadelphia Rd. Belcamp, MD 21017 410.879.7950 / Fax: 410.893.1515 Thursday 8:30 AM at Clayton Station Thursday 8:00 AM at Bel Air in Belcamp bscamerica.com MANHEIM BALTIMORE-WASHINGTON 7120 Dorsey Run Rd., Elkridge, MD 21075 410.796.8899 / Fax: 410.799.0512 Tuesday Sale, 9:30 AM Tuesday Frontline Sale, 9:00 AM TRA/Salvage, 1:00 PM manheim.com NEW JERSEY ADESA AUCTION OF NEW JERSEY 200 N. Main, Manville, NJ 08835 908.725.2200 / Fax: 908.725.3446 Consignment Sale Thursdays 8:45 AM Topline Sale 9:00 AM monthly Thursdays GM Factory Sale Bi-weekly Tuesdays 10:00 AM adesa.com MANHEIM NEW JERSEY AA 730 Rte. 68, P.O. Box 188 Bordentown, NJ 08505 609.298.3400 / Fax: 609.298.4489 Wednesday 9:00 AM manheim.com NEW YORK ADESA BUFFALO 12200 Main St., Akron, NY 14001 716.542.3300 / Fax: 716.542.3547 Sale Tuesday 9:00 AM Boat & RV Sale 2nd Tuesday Monthly 11:00 AM Ford Factory Tuesday Monthly 9:00 AM Office: M-Tu: 8-5, W: 8-4, Th: 9-4, F: 9-3 ADESA.com/Buffalo

ADESA LONG ISLAND 425 Patchogue Yaphank Rd. Yaphank, NY 11980 631.205.5000 adesa.com/longIsland ADESA SYRACUSE 5930 State Rte. 31, Cicero, NY 13039 315.699.2792 adesa.com/syracuse BUFFALO AUTO AUCTION 5300 Lockport Road Lockport, NY 14094 716.549.4800 deeregunner@hotmail.com MANHEIM ALBANY 459 Route 146, Clifton Park, NY 12065-0440 518.371.7500 jay.waterman@manheim.com manheim.com MANHEIM NEW YORK AA 2000 Dealer Drive, Newburgh, NY 12550 845.567.8400 / Fax: 845.567.8410 Every Thursday 9:00 AM Ford Factory Closed Sale Bi-Weekly 10:00 AM Heavy Truck & Equipment Sale First Thursday of the Month 11:00 AM manheim.com MANHEIM ROCHESTER 20 Cairn Street, Rochester, NY 14611 585.328.2277 sara.fico@coxautoinc.com manheim.com ROCHESTER- SYRACUSE AUTO AUCTION 1826 State Route 414, P.O. Box 129 Waterloo, NY 13165 315.539.5006 sprankie@rsautoauction.com rsautoauction.com STATE LINE AUTO AUCTION 830 Talmadge Hill Rd. S. Waverly, NY 14892 607.565.8151 / Fax: 607.565.8659 GM Financial Open Sale –EVERY Friday, 9:20 AM GM Financial Closed Sales as Scheduled Dealer Consignment Sale –EVERY Friday, 9:20 AM statelineauto.com WEST VIRGINIA MOUNTAIN STATE AUTO AUCTION Route 2, Box 835, Shinnston, WV 26431 304.592.5300 / Fax: 304.592.3510 Monday 10:30 AM Office: 9:00-5:00 mtstateaa.com

Data Shows Dealer Sales Activity Healthier When They Keep Ad Budgets Intact By Lauren Donalson, Senior Director of National Accounts at PureCars Although the pandemic was still a major force in the world, the automotive industry entered 2021 having rebounded from the earliest days of the shutdowns. If anything, automotive brands and dealers found themselves having to address a lack of inventory, not a lack of demand from shoppers. Automotive marketers all over the U.S. have continuously reevaluated strategies for 2021 ad budgets. Some retailers followed the belief that they should pull back on advertising since they weren’t worried about promoting vehicles when there is a lack of inventory. However, this has proven to cause deeper problems toward long-term customer relationships and loyalty.

If anything, those dealers who wisely shifted their advertising message have fared better than those who pulled their advertising altogether. What we’ve learned through the pandemic It is true, hindsight is certainly 20/20. With months of inventory shortage history now in the rearview mirror, there is a lot that can be gleaned from understanding dealer ad spend patterns, especially when industry observers look at the trends of dealers who cut off ad spending compared with those that did not. Simply put, the data suggests dealers who continued to spend on ad strategies grew their market share, and those who cut their ad spending lost sales. This data insight also includes ad spending strategies this past summer that may have been altered as a result of the ongoing microchip shortage that saw fewer new cars and trucks hitting dealer lots.

Reduced ad budgets equal larger sales drop-off Unfortunately for those dealers who pulled back on ad spending, they ended up feeling more pain in overall sales drop-off compared with dealers who modified advertising messages and strategies and increased budgets. For example, between the months of March and August earlier this year, dealers who decreased their advertising spending between 50% and 89% saw their sales volume drop by 28%. However, those dealers who actually increased their advertising spend by just 9% during the same time period saw a much lighter drop in sales at just 9%, according to PureCars dealership advertising spending data from September. The main difference in philosophy is what limited the drop off in sales performance. Dealers who pulled back in advertising looked at their showroom traffic in relation to lower inventory levels and thought there was no need to promote deals on new cars and trucks. However, savvy dealers looked at this past summer as an opportunity to make varying levels of budget increases in their spending. What’s more, they realized promoting vehicles that may or may not be on the lot was not the right thing for their customers. Instead, they modified their advertising messages and instead focused on promoting vehicle buy-back opportunities to increase inventory, and they also promoted service and repair options to boost revenue further. When customers come in for service and repair it gives dealers and their staff an excellent chance to discuss buy-back options with customers who give strong consideration to increased trade value and a discussion on other inventory on the lot. n

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022 | 19

Vehicles Hard to Get, But Auto Financing Isn’t BY STEVE FINLAY, RETIRED WARDSAUTO SENIOR EDITOR Automotive consumers currently may struggle to find the vehicle they want at a decent price amid an inventory shortage. But obtaining auto financing is a cinch today for most people. “Availability of funds is higher now,” says Andy Mayers, whose duties at Cox Automotive include serving as the company’s lender solutions strategist. “It’s easier for people to get credit.” That’s somewhat mollifying for today’s inmarket car consumers who face an inventory dearth caused by a global microchip shortage. It has resulted in automakers cutting production and dealers raising prices as demand outpaces supply.

basically a ‘grid’ and eliminates the need to resubmit loan applications” if the original submission requires amending.

“If someone changes terms, you don’t have to refile,” he says. “That benefits everyone – the consumer, dealer and lender.”

enough information for me to give.’” Another trend Mayers notes is the overall increased popularity of digital auto retailing. It gained traction during the height of the COVID pandemic.

Another digital trend Mayers cites: Online auto shoppers now can readily upload and send so-called loan stipulations such as a driver’s license, proof of employment and W-2 forms.

Cox Automotive says its data indicates dealers who offer flexible digital experiences are five times more likely to get a shopper’s lead submission, experience a 46% higher close rate than from other lead sources, and earn 24% higher gross profit per deal. Consumer satisfaction with car buying has increased with digitization, reaching an alltime high of 72% in 2021, up from 60% in 2019, according to a Cox Automotive study.

It’s not particularly hard to forge a pay stub, but technology allows lenders to better verify stipulation information such as income.

Most auto consumers follow a hybrid approach that consists of both online shopping and in-store visits.

“Say that someone applying for a loan is a truck driver living in a particular area,” Mayers says. “The technology can match the demographics, such as job-related income levels for people living in specific geographical areas.”

But Mayers foresees a day when A-to-Z online auto buying, including digital contracting, becomes commonplace. He notes several Cox Automotive units, such as Dealertrack, are working toward that.

“The higher prices haven’t affected the availability of credit,” Mayers tells WardsAuto. Because the product shortage has hampered vehicle sales, there are fewer auto loans these days. But the amount of money lent typically is higher than before, “a $43,000 loan vs. a $34,000 loan,” Mayers cites as an example. The scarcity of dealer lot stock has hit automakers’ financing arms more than other lenders. “It’s been a negative for the captives,” Mayers says. Credit unions, on the other hand, “are capturing more business.” His work entails tracking lending trends, particularly as technology plays a greater role in the credit-driven automotive marketplace. For instance, technology now allows lenders to respond to a credit application by providing a “menu” of term options depending on different deal structure scenarios, such as down payment amount and loan-to-value, or how much money a car buyer wants advanced in relation to the price of the vehicle. “Lenders now have the ability to return multiple decisions,” Mayers says. “It’s

When applying for auto loans, some people exaggerate their income and job titles to enhance the chances of credit approval. The auto-financing world is full of stories about that, such as a cook claiming to be a chef. But conversely, many consumers tend to under-report their earnings, especially if they are in higher income brackets, Mayers says. “Their thinking is, ‘That’s

20 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022

It includes what he calls a “lights-out” lending process. “That means everything is in order and all the work is done when the contract package is received.” Comparing complete digital auto retailing and lending to autonomous-vehicle development, he says, “We’re not at level 5 yet,” the industry-designated point at which a vehicle totally drives itself. n

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2022 ADVANCED ISSUING AGENT TRAINING COURSES IN PERSON AT THE FOLLOWING LOCATIONS Monday, Monday, March March 14, 14, 2022 2022 AMERICA’S AMERICA’S AA AA –– HARRISBURG HARRISBURG 1100 S. York St.,1100 Mechanicsburg, PA 17055 • Clint PA Weaver • 717.697.2222 S. York St., Mechanicsburg, 17055 Monday, April 25, 2022 Monday, April 25, 2022 ADESA - PITTSBURGH AA ADESA - PITTSBURGH AA 378 Hunker Waltz Mill Rd., New Stanton, PA 15672 378 Hunker Waltz Mill Rd., New Stanton, PA 15672 Carly Bishop• 724.925.4700 Monday, May May 16, 16, 2022 2022 Monday, NORTHEAST PENNSYLVANIA AA NORTHEAST PENNSYLVANIA AA Arcaro && Genell Genell Restaurant, Restaurant, 443 443 South South Main Main St., St., Old Old Forge, Forge, PA PA 18518 18518 Arcaro Lisa Cohowicz • 570.650.2781 Monday, June 13, 2022 Monday, 13, 2022 MANHEIM June PHILADELPHIA AA AA19440 2280MANHEIM BethlehemPHILADELPHIA Pike, Hatfield, PA 2280 Bethlehem Pike, Hatfield, PA 19440 Monday, 19, 2022 CharlesSeptember Polina 215.822.1935 GARDEN SPOT AA Monday, September 19, 2022 Robert Rd. GARDEN & Apple St., Ephrata, SPOT AA PA 17522 Robert Rd. & Apple St., Ephrata, PA 17522 • Kristi Kohl • 717.738.7900 PIADA Members: $99 • Non-Members: $129

PIADA Members: $99 • chapter Non-Members: Contact PIADA today: $129 Contact PIADA chapter today: Email Cynthia@piada.org or call 717.238.9002. Email Cynthia@piada.org or call 717.238.9002.

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DO IT QUICK! Call 717.238.9002 and Say “I Want to Join!” & we’ll take the info over the phone (M-F 8:30-4:30) Dealership _________________________________________________ Owner/President(s)__________________________________________ DIN #_________________________________ or  Special Member  Corp.

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Number of Employees _______________________________________ Street Address______________________________________________ City __________________________________ State_____ Zip _______ County__________________ Dealership Anniversary (mm/yy)______ E-mail _____________________________________________________ Website____________________________________________________ Ph. (____) ___________________ Fax (____) _____________________ To assist our lobbying effort, your party affiliation is requested.  Democrat  Republican  Independent  Decline to answer PIADA yearly dues are $399.00 and MDIADA & DIADA are $299.00 (which include $60 NIADA dues). You will receive all NIADA benefits including a discount prescription drug card, Used Car Dealer magazine, and dealer advocacy to officials in Washington, D.C. (Contributions or gifts to PIADA PAC are not deductible as charitable donations for Federal tax purposes; however, the $399 dues payments are deductible by members as an ordinary and necessary business expense.) By my signature below, I affirm that: I support the PIADA Code of Ethics and want to strengthen the business and public image of the Independent Automobile Dealer; I request membership in the MARIADA, 1501 North Front Street, Harrisburg, PA 17102, 717.238.9002, Fax (717) 238-3870, www.piada.org, and I authorize PIADA to fax or e-mail important information to me.

Name Name on on Card:_________________________________________________ Card:_________________________________________________

Signature __________________________________________________ My check(s) in the amount of: (Membership Fees are  PA Dealer $399.00 non-refundable.)  MD/DE Dealer $299.00  Plus a voluntary PAC fund contribution to PIADA PAC of $25 or more. (Must be individual check, not a corporate check. Corporate checks for PAC fund contributions are not permitted by PA law.)  Plus a $20 donation to the MidAtlantic Regional IADA Scholarship Fund. Or please charge this amount to my credit card: Card type:  Visa  MasterCard  American Express  Discover

Card Card ## ________________________ ________________________ Security Security Code Code ______ ______ Exp. Exp.Date_____ Date_____

Name on Card ______________________________________________

Signature Signature_____________________________________________________ _____________________________________________________ Fax Fax (We’d (We’d prefer prefer fax) fax) to to 717.238.3870 717.238.3870 Or Or Mail Mail to: to: PIADA, PIADA, 1501 1501 North North Front Front Street, Street, Harrisburg, Harrisburg, PA PA 17102 17102

Card Number ______________________________________________

SPECIAL SPECIAL THANKS THANKS TO TO OUR OUR ANNUAL ANNUAL SPONSORS: SPONSORS:

Printed Name _______________________________________________

Phone Phone (____) (____) ___________________Fax ___________________Fax (____) (____)_____________________ _____________________ Number Number Attending Attending ______ ______

NAMES NAMES OF OF ATTENDEES: ATTENDEES: ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ Card CardType: Type:  VISA VISA   MasterCard MasterCard   Discover Discover  American American Express Express

Security Code ___________ Expiration Date ____________________ Signature __________________________________________________ Date ______________________________________________________ Received by MARIADA Rep. _____________________________ Date ________________________________________________ OR Mail to: MARIADA, 1501 North Front St., Harrisburg, PA 17102. If using a credit card, you may fax this application to PIADA at 717.238.3870.

22 | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022 20| MIDATLANTIC | JANUARYDEALER 2022 NEWS MIDATLANTIC DEALER NEWS

BECOME A MEMBER, ACCESS THOU$ANDS IN BENEFITS! » $20,000 Savings with Dealer Discount Book » Dealer Services & Licensing Assistance » Title Call Center » Online Title & Registration Services » Dealer, Retail, & Salvage Title Processing » Legal & Regulatory Compliane Training

» Networking Events » National & Local Lobbying for Dealers » Print & Digital Trade Publications » Timely Dealer News Updates » Audit Prep Assistance » NIADA Membership

Discover the power of membership! 717-238-9002 MidAtlanticDealerNews-MAR2022-PRINT.pdf

2/4/22

1:47 PM

Get to know your Mid-Atlantic Staff Shannon Becker Associate Executive Director (717) 238-9002 x18 shannon@piada.org Tammy Helman, Title Consultant/ PennDOT Certified Trainer (717) 238-9002 ext. 28 C tammy@piada.org M

Nicole Autry, Dealer Set-Up Unit (717) 238-9002 x26 / nicole@piada.org Y Tammy Farmer, Receptionist (717) 238-9002 ext. 10 receptionist@piada.org

Cynthia Slemons, Membership Specialist (717) 238-9002 x16 cynthia@piada.org

CMY

Lisa Drank, Title Call Center (717) 238-9002 x27 / lisa@piada.org Barbara Stake, Online Registration Department (717) 238-9002 x15 barb@piada.org Heather Levesque, Accounting (717) 238-9002 heather@piada.org MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022 | 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 45. $ 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 45. $ 00 30. $ 00 30. $ 00 30. $ 00 30.

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

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

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

$ 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 Shannon at 717.238.9002 x 18 Shannon@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________ All forms come in packs of 100 unless otherwise noted.

24 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022

1,000 + Unit s

WEDNESDAY, MARCH 23TH 6 LANES START AT 8:30AM

Pre-Sale and After-Sale Prizes and Giveaways! MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • MARCH 2022 | 25