Mid-Atlantic Dealer News - October 2023

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 U Drive Today Sales & Finance, 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

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

America’s Auto Auction Erie, Corry, PA

George Smouse • gasmouse@zoominternet.net

Smouse Trucks & Vans, Mt. Pleasant, PA

Steve Worley • worleymotors@hotmail.com

Worley Motors, Enola, PA

Tom Brandis • Executive Director

2 | Please Help us Welcome Tommy Brandis as Executive Director

3 | How to Drive Success with Facebook Advertising for Car Dealerships

To effectively achieve advertising goals using Facebook advertising, dealerships must have specific requirements. Let’s explore these requirements and gain insights into the automotive industry.

4 | AI is Not Going to Take Your Job

AI is not just the future; it’s the present. The most important thing for dealers is understanding precisely how it can work for them.

6

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Reputation is Everything!

One Industry Summit panelist said a recent study found that 93% of consumers base their buying decisions on car purchases and service off online reputation.

10

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How to Manage a Small Car Dealership: Tips for Success

Whether you are starting from scratch or taking over an existing dealership, it is important to have a strong foundation in place to ensure long-term success.

14 |

New Technology Changes the Way Dealerships do Business

For car dealerships – particularly independent dealerships – taking advantage of the “next-generation” tech can deliver impressive results.

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New Data Shows More Dealership Customers Prefer Text Messaging

Traditional communication methods like phone calls and emails are losing their effectiveness, leaving dealerships struggling to maintain strong relationships with their customers.

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What’s Needed to Truly Establish a Digital Presence for Used Auto Dealers, Lenders and OEMs

The right digital retail strategy for today’s used dealer goes beyond up leveling a dealer’s web presence.

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Shortcuts and Compliance Are Not Friends

Don’t let process shortcuts short-circuit all the hard work your dealer has put in to make their dealership the success it is today.

Copyright 2023

STAYING FOCUSED ON PROBLEM SOLVING

Our First Step into the Future convention has recently concluded. I’m facing the challenge of writing a monthly letter from the president without the benefit of updates from our convention and executive board meetings. So, let’s shift gears and discuss the current state of the used car market.

There are ongoing discussions about a potential work stoppage by the UAW, which could impact the availability of new cars. It’s worth noting that the average monthly payment for a new car is higher than that of a used car. Specifically, new car payments average around $716 per month, while used car payments average around $526 per month.

Most vehicle financing goes towards used cars, which means many people are finding affordable options for transportation. However, concerns about rising credit card debt and inflation can lead to increased debt and delinquencies.

As independent dealers, we must remain focused on problem-solving. If you need any specific help or have any questions, we’re always here to help in any way possible. It would be advantageous to have a system to support our customers’ potential credit difficulties. Joining a BHPH 20 Group can provide several benefits, including improved financial performance, access to industry insights, networking opportunities with peers, and a support system for addressing common challenges in the Buy-Here Pay-Here business model. n

Please Help us Welcome Tommy Brandis as Executive Director

After more than three decades of owning and operating his own dealership, Tommy Brandis has embarked on a new chapter in his automotive career, one driven by his desire to give back to the industry that has been his life’s work. MARIADA officially welecomed Tommy into the role of executive director for the Association on August 21.

His journey to this pivotal role has been a long and fruitful. Since establishing Advantage Auto Sales and Credit in Quakertown, Pennsylvania, in 1992, his dealership has successfully sold over 10,000 vehicles, a testament to his expertise and dedication. Over the past few years, Brandis has also been actively mentoring his future son-in-law, preparing him to assume a leadership role within the dealership.

Tommy is no stranger to industry leadership, having joined the board of the Pennsylvania Independent Auto Dealers Association in 2007. In 2013, he extended his influence by serving on the MidAtlantic Regional Independent Automotive Dealers Association board. He has also been a valuable contributor to the BHPH Success group on Facebook, which boasts more than 4,300 members.

Tommy Brandis, Executive Director (717) 317-3098 | tommy@piada.org

Nicole Autry, Dealer Set-Up Unit (717) 317-1966 | nicole@piada.org

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

Jessica Barton, Title Supervisor (717) 238-9002 | jessica@piada.org

India Thomas, Title Clerk (717) 238-9002 | india@piada.org

Tammy Farmer, Receptionist (717) 238-9002 x10 receptionist@piada.org

Heather Levesque, Accounting (717) 238-9002 | heather@piada.org

Steve Smith, Office Manager (717) 238-9002 x118 | steve@piada.org

Ashley Bohner, Administrative Assistant (717) 238-9002 | ashley@piada.org

His primary focus is to assist dealers in achieving success. Brandis recognizes the ever-increasing regulatory challenges faced by dealers and aims to equip newcomers with the knowledge they need to avoid common pitfalls and succeed in the industry.

We have the greatest confidence in Tommy’s leadership, highlighting his dedication to the association and alignment with its vision and values. Under his guidance, the association aims to continue growing and positively impacting its members and the industry at large.

Welcome aboard, Tommy!

Bert Straub President MidAtlantic IADA

In the automotive industry, the influence of social media on car buying decisions is substantial. 44% of car buyers visit a dealership’s social media accounts when deciding which automobile to purchase, and 38% of car shoppers rely on social media to assess the dealership’s friendliness and professionalism. To effectively achieve advertising goals using Facebook advertising, dealerships must have specific requirements. Let’s explore these requirements and gain insights into the automotive industry:

1.

FACEBOOK PAGE

A Facebook Page is an essential tool for reaching your audience across both computers and mobile devices. It allows you to showcase your business information, engage with customers through posts and messages, run targeted advertisements to increase awareness and drive sales, and obtain valuable insights based on user actions.

Facebook Page helps car dealers build a brand and community value. Also, they can execute, monitor and review content performance and set specific permissions for their employees to help manage the dealership’s page.

2.

META BUSINESS MANAGER

Meta Business Manager enables advertisers to securely share assets, such as Facebook Pages, Instagram accounts, audience lists, or product catalogs, among multiple team members. It controls user access and permissions for ad accounts, pages, and apps while efficiently tracking ad spending through comprehensive overviews and detailed views.

3.

META ADS MANAGER

Meta Ads Manager is a centralized platform that simplifies the creation, management, and tracking of ads across Facebook, Messenger, Instagram, and Audience Network. To create a successful

How to Drive Success with Facebook Advertising for Car Dealerships

By Sean Toussi, CEO & co-founder, Glo3D.com

ad campaign, start by selecting a campaign objective, such as “Catalog Sales” to showcase inventory and generate sales or “Reach” to maximize ad visibility within your target audience. Understanding the three key components of a Facebook ad— Campaign, Ad Set, and Ad—is crucial. At the campaign level, define your advertising objective. Within the ad set, fine-tune your strategy by setting parameters like targeting, budget, and scheduling. Finally, the ad itself consists of creative visuals to captivate and engage your audience.

4.

META PIXEL

By implementing the Meta Pixel on your website, you can target users who have visited your site with automotive inventory ads. The Meta Pixel tracks user actions, such as viewing specific vehicles or entering payment information, allowing for targeted ad delivery to potential customers more likely to purchase. To optimize the effectiveness of these ads, it is essential to integrate custom data events into different website pages. These events should include specific parameters, such as make, model, and year, to enhance the ad’s relevance. Additionally, establishing a connection between your Facebook pixel and the catalog ensures seamless functionality for a successful advertising campaign.

5. VEHICLE CATALOGUE

A vehicle catalog is a comprehensive collection of product information for the inventory you want to advertise. While advertising your complete inventory is recommended for maximum exposure, you can also focus on specific subsets of your offerings using Vehicle Sets. Vehicle Sets allow you to curate particular groups of vehicles to feature in your ads. For example, you can create a Vehicle Catalog with your entire inventory and establish a Vehicle Set exclusively for advertising trucks, while another set can be dedicated to promoting vans.

The approach varies based on the dealership’s size. For dealers with more than 50 vehicles, add inventory by creating and uploading a vehicle feed in Catalog Manager, ensuring all required fields are included. Utilize Vehicle Sets to group vehicles together. For smaller dealers with fewer than 50 vehicles, manually add vehicles to the Vehicle Catalog in Catalog Manager, providing the necessary details for each vehicle. Apart from the size of your car dealership, you need to associate a pixel or mobile SDK with the catalog for tracking and optimization.

6. ATTRIBUTION & OFFLINE EVENTS

Traditional marketing attribution tools often rely on cookies and last-click attribution, which may not provide a complete and accurate understanding of the impact of your ads on business outcomes. Gain valuable insights into the impact of your ads with Facebook Attribution, a powerful tool that measures and analyzes ad performance across multiple publishers, channels, and devices. Car dealers can understand the actual value of the ads and identify the most effective campaign strategies. Most dealers find a 90-day, even-credit model for vehicle sales effective, providing fair estimates across touchpoints. Also, you can combine Attribution with offline events to connect sales back to your advertising efforts. This integration lets you measure how Meta ads contribute to real-world outcomes, providing a comprehensive understanding of campaign effectiveness. n

Sean Toussi serves as the CEO and cofounder of Glo3D.com. He is expert in new technology trends and the auto industry and is regularly featured in publications such as Forbes, Digital Dealer magazine, and UCD magazine. Additionally, he is a member of Forbes magazine’s technology counsel, BoA of NY Auto museum and speaker at the UN economic forum and NIADA conferences.

Hello dealers, I can’t begin to tell you how excited I am to be able to serve you as the Executive Director.By the time you read this, both the NIADA Policy Conference and our first annual convention in Atlantic City will have concluded. Hopefully, I will have already met a few of you at these events. For those who don’t know me, here is a quick summary and background in the automotive industry. My wife Jen and I just celebrated our 30th anniversary in August. We have two amazing daughters.Morgan is 25 and after 7 years at Widener University, just started her career as a Physical Therapist. Alex is 22 and is currently working on her master’s degree in museum management at George Washington University. I began my career in 1992 as the General Manager of Sellersville Charge A Car, which was a new Buy Here Pay Here dealership in Telford, PA. I eventually purchased the business in 2011 and changed the name to Advantage Auto Sales & Credit. Our current location is Quakertown, PA. The day-to-day operations are now being handled by my son-in-law, Gunnar. I have served on the PIADA/MidAtlantic IADA Board since 2007. I’ve held every position, including the role president twice. I am also the co-founder the of BHPH Success page on Facebook.

I have been looking for ways to “give back” to the industry that has provided for my family for the past 31 years. This opportunity couldn’t have come at a better time. I look forward to serving you and other independent dealers across our region and country. n

AI is Not Going to Take Your Job

By Jarrod Kilway, COO, Konect.ai

Now more than ever, the very mention of implementing AI in business evokes polarizing reactions from people, especially when it comes to the automotive industry. Selling cars has always been, and always will be, about people. No automated system could ever replace that. It is understandable that some dealerships are skeptical when it comes to AI. But the truth is, when implemented effectively, AI is tremendously helpful to both consumers and dealers alike. AI is not just the future, it’s the present. The most important thing for dealers is understanding precisely how it can work for them.

UNDERSTANDING CONSUMER GOALS

For a long time, the automotive industry standard when it came to contacting customers was to call, text and email the very second a lead came in. But data has shown that it’s less about making immediate contact and more about being strategic in when exactly you contact a customer. For example, a dealer participating in a case study in April of 2023 reported that 40 percent of their leads were submitted when the dealership was closed. This statistic isn’t surprising when you really break it down. If a customer is contacted by a dealership during their work hours, there is a strong chance they won’t respond. After-work hours are more convenient for a lot of people, and if there’s anything we’ve learned about customers in automotive, it is that convenience is king. AI is accessible 24/7 and it is a helpful tool when it comes to making things easy and efficient for a customer in the early stages of buying a vehicle. AI can provide guests with the immediate gratification of a response at a time that works for them. Of course, a software program won’t always have the perfect answer 100 percent of the time. But

it can assist in driving the customers toward the next steps.

INTEGRATION ACROSS ALL PLATFORMS

The last thing dealers need is yet another portal to log into. So when it comes to AI in automotive, it is important to integrate it into the existing foundation you already have. When everything is kept native to one platform, it makes for a more holistic experience for the consumer and the dealer. When layered with CDPs, dealers are able to utilize AI to be their most effective communication follow-up tool.

A dealership can truly take things to the next level when they integrate AI with their CRM. It’s the separation of consumer activity/action and sales team active/action versus automation and AI. Every dealership would greatly benefit from a deep level of integration with all CRMs. Some people in the industry are apprehensive about this, whether it’s a fear of a competitive product or just of the general unknown, but that is only going to hinder dealers from being able to really develop their strategies and keep up with the OEMs who are already taking action with AI tools.

ASK THE RIGHT QUESTIONS

The automotive industry will continue to see a lot of dealerships come to the market with some kind of AI component. But there are so many variations of what that means. Is it a communication style AI? A Voice AI? What function is it specifically performing? Is it writing vehicle comment descriptions? Enhancing photos and videos? The bottom line for a dealer is asking these kinds of questions to ultimately figure out which AI solution will help their store in operation.

Another thing dealers should keep in mind when looking at AI is to ask the prospective

ADVANCED ISSUING AGENT TRAINING COURSES

Don’t forget about the MARIADA DEALER SERVICE PROVIDER DIRECTORY

ONLINE COURSES for your convenience

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

Members/Nonmembers: $169

REGISTER ONLINE AT MARIADA.ORG

company about their models and how they are training their data. Is it simply creating an interface and doing an API to ChatGPT and calling it AI? Sometimes companies outsource machine learning to another company and the data that the AI is trained in is not always exclusively automotive. It’s about really understanding what AI is and how it will be implemented at the store.

AI IS NOT THE ENEMY

AI in automotive is not a replacement for anything, it is an enhancement for the entire industry. It will help streamline the overall ecosystem by applying integrations and strategies that will increase employee loyalty and retention and significantly strengthen the overall guest experience. n

Jarrod Kilway is the COO of Konect.ai, the automotive artificial intelligence (AI) platform specially designed to increase customer engagement in automotive.

By Hannah Mitchell, Executive Editor of Bobit's Dealer Group

REPUTATION IS Everything!

With the internet as an easy, accessible, round-the-clock research tool, a company’s reputation is more important in driving business than ever before.

In fact, Scott Sabo, partnership growth manager at customer-engagement platform Podium, calls it “the new word of mouth.”

“It’s become the most crucial aspect of how customers are attracted to businesses,” said Sabo, who recently chose a roofer and a new family dentist online. “In both cases, I said I’m going to take a chance with the one that has the most people saying good things about them.” He’s even going out of his way to drive further to patronize the providers.

A recent study found that 93% of consumers base their buying decisions on car purchases and service off online reputation, said Kyle McEvoy, founder and president of APC Integrated Services Group, which markets on behalf of new-car franchise dealers and car manufacturers.

“If you’re not paying attention to your online reputation, it will hurt you. It’s how people find you,” he said. “On the flip side, if you’re ignoring negative reviews, that’s not good either.”

STANDING OUT

As buyers get more sophisticated about researching sources of new and used vehicles, dealers must not only burnish their reputations, but find ways to stand out from competitors. Putting one’s brand above that of the vehicle’s manufacturer is one goal, and one powerful way to do that is by highlighting your contributions to the communities your dealerships serve.

“Get eyes on your dealership and how you treat your customers,” said Phil Valachi, senior vice president, operations, with Digital Air Strike, which manages customer leads for dealers across the country. “You’re wanting to protect your background but also expand market share.”

One Industry Summit panelist said a recent study found that 93% of consumers base their buying decisions on car purchases and service off online reputation.

Another angle toward that end is maximizing dealerships’ websites so that visitors stick around rather than moving on to other sites.

“The more engaging you make your online assets, the more effective you’ll be in getting your brand out there,” McEvoy said.

TRADITIONAL VS. DIGITAL

Though online marketing is essential today, dealers can’t discount traditional methods, the experts said.

“Why wouldn’t you?” said McEvoy.

And if you employ both methods, having a well-though-out coordination of the two is ideal, he said, mapping out a timeline of the steps on the customer’s journey as you plan strategy. “You might think about return on investment; if the most responsive is text, you might start with that.”

Sabo said the other opportunities are how you can keep the customer moving through that life cycle through your marketing, to get them returning for services.

TRACKING HACKS

To keep up with prospects and active customers, it’s imperative to track them online to see where they are in the process and therefore how best to market to them.

Don’t let the fact that site visitors often abandon their search of your online materials stop you from reaching out, said McEvoy, who advises dealers to track prospects’ IP addresses. And if they don’t fill out your outreach-request form, you can still capture information about them for follow-up.

“Think of it like they walked into your store. You want to know what they were interested in. They’re going to be shopping somewhere, so the more likely you follow them, the more likely you are to get a sale.”

Sabo said dealers should understand what prospects’ profiles look like and therefore why they’re converting to customers, or why not. Once you determine that, you can work to avoid the failures and replicate the successes.

“Is it the offer? How it was displayed? Then tweak that strategy.”

LEADS LOGIC

Once you’ve reeled in a potential customer, following up on the lead is a crucial step in the courting process. And the speed at which you do so makes all the difference in today’s digital world, the experts said.

“It used to be hours, then 15 minutes. Now it’s less than two minutes,” said Valachi. “A lead will go somewhere else.”

“It is the most important thing,” said McEvoy of response speed. “You have to have a system to respond to those.”

He told the story of two companies he shopped with, one of which won his business, the other losing their chance. In the first instance, he secret-shopped, filling out an online form, and was contacted by the company within 60 seconds. In the

second, the company took nearly 24 hours to reach out.

“You do not want to be in that position. Get back as quickly as possible.”

Once you do follow up, make sure you address what they’re asking about, Valachi said. He added that consistency is also key.

FIVE STARS?

The experts agreed that online reviews are an essential component of building and maintaining a solid reputation among the car-buying public. That means not only earning them but seeking them out and responding to them once they’re posted.

It may go without saying that such reviews are free publicity. More than that, they amount to your online “rating.”

Every customer should be given a chance to post a review on their interaction with your business, and you should make the process as simple as possible for them, Sabo said. That way, you’ll get a higher positive rating due to the higher volume of reviews.

“I think you’ll find the vast majority will be positive,” he said. For instance, Uber fares get a mobile prompt to review the ride experience before they leave the car, he said.

Most texts get read, Sabo said, but dealers should “meet the customer where they’re at” by using the technology they’ve found most effective.

In addition, if someone posts a four-or fivestar review of your business, provide them with links to also post reviews on other sites.

“Have a way of acting kind of like a traffic cop to address people who didn’t have a good experience and someone waving your flag,” McEvoy said.

GOOGLING IT

Dealers’ Google Business Profiles can be important pieces of their marketing

strategies, the experts said, so it’s incumbent upon them to consistently manage them.

Valachi advised that profile information be kept up-to-date and accurate and that current offers are highlighted.

Beyond that, “Look at Google vehicle ads. Look at how people shop. Pictures resonate more than text – make sure you bring those two things together … If you don’t have that information out there, they’ll move on.”

Sabo said dealers should also consider how their service customers search for them and to make it simple to get a read on how it is to work with your service department. He added that dealers’ parts and service departments should be in their profiles in order to narrow reviews to those specifically.

DIGGING INTO DATA

Then there’s the homework of analyzing available data about prospects and customers, an important exercise that can’t be overlooked, the experts agreed.

Google Analytics is an unbiased data source, Valachi said, and the fourth generation is best for year-over-year statistics. “GA4 gives visibility and transparency on the traffic you’re driving … so you can shift dollars around to different campaigns. You can change strategies up.”

Third-party data augments the limited information a dealership can gather, McEvoy said.

“Within the people who’ve bought before, some have a higher propensity to buy again,” something you can learn from a third-party provider. “You want to emulate those profiles. Anytime you filter your database, you get much better (return on investment).” n

Hannah Mitchell is executive editor of Bobit's Dealer Group. She's a former newspaper journalist. Her first car was a hand-me-down Chevrolet Nova.

Dear MARIADA Member,

As we move through the 2023-2024 legislative session, it is more important than ever to continue the fight and support the Independent Auto Dealers PAC!

We need your support moving forward and throughout the legislative session. We are focused on multiple issues including:

• Removal of abandoned vehicles from auto auctions

• Creating an independent dealer education program for the Commonwealth

• Modifying the process for impound and salvage vehicles to ensure lienholders and lessors’ vehicles are not held hostage and to ensure lessors are made whole if a vehicle is illegally crushed

Last session, your support of our industry’s political action committee, the Independent Auto Dealers PAC, helped PIADA to many victories, particularly pertaining to the theft of catalytic converters, and issues with dealer license plates.

PIADA’s board of directors, staff, and lobbyists will continue to advance the industry’s agenda and push for positive change, but your individual financial commitment to Independent Auto Dealers PAC is needed today. Please send a personal check (corporate checks are prohibited by state law) payable to Independent Auto Dealers PAC for $100, $250, $500, or $1,000 today.

"Campaign Finance Reporting Law prohibits corporate contributions. If donations to the PAC are drawn from an LLC account or partnership account, please provide a written statement for our records, indicating that you are permitted to make this contribution under Campaign Finance Reporting Law."

Our focus is to lobby for legislation and regulations that will either decrease costs to operate your business or lower the impact on your operations.

Your contribution is vital to advancing our industry. We count on contributors like you to be viable in the political world. Please continue to be a financial supporter of Independent Auto Dealers PAC and send your personal contribution today. Again, thank you for your thoughtful and generous commitment.

Your support of the Independent Auto Dealers PAC is a personal investment in the future of Pennsylvania’s independent auto industry.

Sincerely,

John Defilippo MARIADA Treasurer

MARIADA is GROWING!

MidAtlantic IADA is currently seeking qualified candidates for these roles:

• Title Department Lead –Pennsylvania (starting at $23/ hour)Ideal candidate will have a minimum of 3 years PennDOT and/ or CVR experience

• Title Clerk – Pennsylvania, Retail and/or Salvage (starting at $20/ hour) Ideal candidate will have a minimum of 1 year PennDOT and/ or CVR experience

• Administrative Assistant (starting at $18/hour) Administrative Assistants are given preference for future title clerk positions. All pay plans are based on proven experience. We also offer medical, dental, vision and retirement plans. There will be additional upcoming advancement opportunities. Submit resume and cover letter to: kathy@piada.org or call Kathy at 717-238-9002 for more information.

“Every man owes a part of his time and money to the business or industry in which he is engaged. No man has a moral right to withhold his support from an organization that is striving to improve conditions within his sphere.”

PRESIDENT THEODORE ROOSEVELT

How to Manage a Small Car Dealership: Tips for Success

Discover essential tips and strategies for successfully managing a small car dealership.

By AutoRaptor

Running a successful car dealership requires a combination of industry knowledge, great customer service, and effective management skills. Whether you are starting from scratch or taking over an existing dealership, it is important to have a strong foundation in place to ensure long-term success. In this article, we will explore the key aspects of managing a small car dealership and provide you with tips to help you achieve success in this competitive industry.

Understanding the Basics of Car Dealership Management

When it comes to managing a small car dealership, having a solid understanding of the basics is crucial. This involves having a well-thought-out business plan that outlines your goals, strategies, and financial projections. A business plan not only serves as a roadmap for your dealership but also allows you to secure financing and attract potential investors.

But what exactly goes into a business plan for a car dealership? Let’s dive deeper into the

importance of a business plan and the key elements that make a dealership successful.

The Importance of a Business Plan

A business plan is your foundation for success. It helps you define your target market, identify your competitive advantage, and set realistic goals for your dealership. A well-crafted business plan serves as a blueprint to guide your decisions and actions, ensuring that you stay focused and on track.

When creating a business plan for your car dealership, consider including sections on market analysis, marketing and sales strategies, financial projections, and operational plans. These sections will provide a comprehensive overview of your business and demonstrate your understanding of the industry.

Key Elements of a Successful Dealership

Creating a successful car dealership requires attention to various key elements. First and foremost, you need to have a strong team of professionals who share your vision and are committed to delivering exceptional

customer service. Your team should consist of knowledgeable salespeople, skilled technicians, and efficient administrative staff.

In addition to a strong team, having the right inventory mix is crucial. Understanding your target market is essential in determining the types of vehicles that will appeal to your customers. Conduct thorough market research to identify the demographics, preferences, and buying habits of your potential customers. This information will help you curate a diverse inventory that meets their needs and desires.

Implementing effective marketing strategies is another key element of a successful dealership. Utilize both traditional and digital marketing channels to reach your target audience. Develop a strong online presence through a userfriendly website and active social media accounts. Consider partnering with local businesses and organizations to increase your visibility in the community.

Lastly, providing ongoing training and development opportunities for your staff is crucial. The automotive industry is constantly evolving, and it’s important for your team to stay updated on the latest technologies, sales techniques, and customer service practices. Invest in training programs and workshops to ensure that your staff is equipped with the knowledge and skills necessary to excel in their roles.

Understanding Your Market

To effectively manage a small car dealership, you must have a deep understanding of your target market. Research the demographics, preferences, and buying habits of your potential customers to tailor your inventory selection and marketing efforts. Stay up to date with industry trends and monitor your competitors to stay ahead of the curve.

Consider conducting customer surveys and focus groups to gather valuable insights about your target market. This information will help you make informed decisions about inventory selection, pricing strategies, and marketing campaigns. By understanding your market, you can position your dealership as the go-to destination for customers seeking quality vehicles and exceptional service.

In conclusion, managing a small car dealership requires more than just basic knowledge. It requires a well-crafted business plan, a strong team, the right inventory mix, effective marketing strategies, and a deep understanding of your target market. By focusing on these key elements, you can set your dealership up for success in a competitive industry.

Building a Strong Team

A successful small car dealership relies on a strong team working together towards a common goal. This starts with hiring the right people who possess relevant experience and a passion for the automotive industry.

Hiring the Right People

When hiring for your dealership, look for candidates who not only have the necessary skills but also fit well with your dealership’s culture. Seek out individuals who are professional, customer-focused, and have a genuine interest in cars. Conduct thorough interviews, check references, and consider personality tests to ensure a good fit.

Training and Development

Investing in training and development for your team is essential for their growth and the success of your dealership. Provide regular training sessions to enhance their product knowledge, customer service skills, and sales techniques. Encourage continued learning and offer incentives for certifications and professional development.

Fostering a Positive Work Environment

A positive work environment is vital for employee satisfaction and retention. Create a culture that promotes open communication, teamwork, and recognition of achievements. Encourage a healthy work-life balance by offering flexible scheduling and comprehensive benefits packages.

Inventory Management

Managing your dealership’s inventory is key to maximizing sales and profitability. It involves selecting the right vehicles, implementing effective pricing strategies, and maintaining optimal stock levels.

Choosing the Right Vehicles

When selecting vehicles for your inventory, consider your target market’s preferences, budget constraints, and local demand. Research market trends, analyze sales data, and stay informed about new models and features. Aim to strike a balance between popular vehicles and niche options to cater to a wide range of customers.

Pricing Strategies

Implementing effective pricing strategies is crucial for profitability. Conduct market research to understand the pricing trends and average margins in your area. Consider factors such as vehicle condition, mileage, and demand when pricing your inventory. Regularly review and adjust your prices to stay competitive in the market.

Managing Stock Levels

Optimizing your stock levels is essential for cash flow management and reducing holding costs. Monitor your inventory turnover rate and adjust your orders accordingly. Utilize inventory management software to track sales, reorder points, and lead times. Collaborate with suppliers to ensure timely deliveries and negotiate favorable terms.

Marketing Your Dealership

Effective marketing is vital to attract customers and create brand awareness for your small car dealership. Take a strategic approach to develop a comprehensive marketing plan that encompasses both online and offline strategies.

Developing a Marketing Plan

A well-developed marketing plan outlines your goals, target audience, and marketing tactics. Identify your unique selling propositions and create compelling messaging to differentiate your dealership from competitors. Utilize various marketing channels such as social media, search engine optimization, email marketing, and traditional advertising to reach a wider audience.

Online Marketing Strategies

The digital landscape offers numerous opportunities to promote your dealership online. Create a professional and user-friendly website that showcases your inventory, pricing, and dealership information. Utilize search engine optimization techniques to improve your website’s visibility in search engine results. Engage with potential customers through social media platforms and leverage online advertising to reach specific demographics.

Offline Marketing Techniques

While online marketing is crucial, don’t overlook the power of offline marketing techniques. Attend local events and community gatherings to build connections and brand recognition. Utilize traditional advertising methods such as radio, television, and print media to reach a broader audience. Establish partnerships with local businesses and offer referral incentives to generate word-of-mouth marketing.

Managing a small car dealership can be a challenging endeavor. However, with a solid business plan, a strong team, effective inventory management, and a strategic marketing plan, you can set yourself up for success. Stay updated with industry trends, continuously adapt your strategies, and focus on delivering an exceptional customer experience. By implementing these tips, you can steer your small car dealership towards long-term success in this dynamic and competitive industry. n

BE T TER, FASTER

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.

VISIT OUR MID-ATLANTIC LOCATIONS

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New Technology Changes the Way Dealerships do Business

By Kevin Grauman President and CEO of QLess

We’re living in the era of Big Data, on which nearly everything we do leaves a digital imprint of some sort.

Retailers – including car dealerships – can use that data to gain a better understanding of their customers and their businesses.

On top of that, today’s new retail technology makes the buying experience more efficient for both sides of the retail equation.

For car dealerships – particularly independent dealerships – taking advantage of the “nextgeneration” tech can deliver impressive results.

According to Cox Automotive’s 2019 Car Buyer Journey Study, the average customer spends just shy of three hours at the dealership. But customer satisfaction rapidly falls off after just 90 minutes –about halfway through the typical experience.

Dealerships need to find a way to drastically reduce the time spent shopping for cars, and new technology can do just that.

That same study also indicated digitizing paperwork and negotiations can turn the average car-buying process from a three-hour ordeal into an experience that takes 90 minutes or less –exactly within customer expectations.

For the dealership, cutting sales times in half lets you theoretically double the number of sales you can make in a day, but perhaps an even bigger benefit of completing transactions in that 90-minute window is creating optimal customer satisfaction.

(Conintued on next page)

(Continued from previous page)me Happy customers mean more referrals, better reviews and a host of other benefits for your business. ness.

Digital retail platforms can improve other areas of your business as well.

Some, for example, offer the ability to give customers quotes on trade-ins before they ever set foot on your lot.

New appointment and line-management technology can change how your dealership handles in-person traffic, turning physical lines into virtual queues and automatically adjusting appointment times to fill in for no-shows, which, according to a 10to8 survey, have become more common during the COVID-19 pandemic.

All of that can help keep your dealership running efficiently and maximize the advantage you get from keeping customer sales experiences to 90 minutes or less.

Digital-first dealership Carvana turned 2020 into a showcase of just how effective the new retail model can be, with record sales and revenues.

But any dealership can take a similar approach using off-the-shelf solutions. And embracing that technology isn’t hard. Most new digital retail platforms will integrate directly with your existing software toolkit.

The more you bring modern tech into your dealership, the more you’ll benefit from the wealth of customer data it generates.

Perhaps the biggest change in retail over the past decade is the amount of customer data companies have access to. Analyzing and interpreting that data gives you a number of potential advantages, from identifying and preemptively addressing customer complaints to creating custom-made buyer incentive programs.

All that data allows dealerships to maximize the lifetime value of a customer.

In other words, it’s not just about making a single sale. It’s about getting repeat business, referrals and more. And it’s something major dealerships are fully embracing.

For example, CarMax recently invested $50 million in a minority stake in Edmunds in order to improve its digital retail capabilities.

Digital-first retail isn’t a trend for the auto industry, it’s a new standard – just as it is in every other major consumer market.

In its 2019 investigation into the changing nature of automotive retail, McKinsey Consulting estimated purchasing journeys for new cars will shift from zero digital transactions in 2018 to 10-25 percent digital in the next few years. For used cars, the projected increase is from 6 percent digital to 25-50 percent.

As businesses adopt and adapt to new technology, there is a window for early adopters to get an advantage over the competition. But that window is closing as more and more dealerships decide to take their operations into the 21st century by embracing digital retail and the wealth of consumer data it provides. n

Kevin Grauman is president and CEO of QLess, a line management system used by retail, education and government industries. He has a proven track record as a successful U.S.-based executive leader and entrepreneur and has been recognized as one of the 100 Superstars of HR Outsourcing in the USA by HRO Today magazine.

5 MUST-READ BOOKS FOR INDEPENDENT CAR DEALERS

As fall begins to heat up, so does the used car market. So, this is a prime opportunity to capitalize on increased demand and boost sales. However, navigating the intricacies of the industry can be challenging. To gain a competitive edge and enhance your business acumen, dealers can turn to these five books, each offering unique insights and strategies to thrive.

1. "The Art of Negotiation" by Chris Voss

2. "Car Buying Revealed: How to Buy a

Car and Not Get Taken for a Ride" by Brian Munroe

3. "Jab, Jab, Jab, Right Hook: How to Tell Your Story in a Noisy Social World" by Gary Vaynerchuk

4. "Crushing It!: How Great Entrepreneurs Build Their Business and Influence-and How You Can, Too" by Gary Vaynerchuk

5. "Car Business 101: #CrazySh*tCarDealersDo" by Max Zanan

New Data Shows More Dealership Customers Prefer Text Messaging

By Bill Springer, DriveSure

With the level of competition in the vehicle service business, staying connected with customers is a constant challenge. Traditional communication methods like phone calls and emails are losing their effectiveness, leaving dealerships struggling to maintain strong relationships with their customers.

To better understand consumer preferences, DriveSure conducted the 2023 Dealership Service Retention Report.

They found customers are increasingly busy and prefer quick, convenient updates. They’re juggling multiple responsibilities and don’t have as much time to answer calls or sift through emails. This mismatch in communication preferences can lead to customer dissatisfaction, missed service appointments, and ultimately, a decline in dealership loyalty.

The solution? Embracing text messaging as your primary communication channel with customers. In their report, they found a significant shift towards texting as the preferred communication method among customers. By adapting to this change, dealerships can meet customers where they are, improve communication efficiency, and enhance customer satisfaction and retention.

WHY TEXTING?

Imagine a busy customer who is always on the go. They’re juggling work, family, and personal commitments, and they don’t have time to take a phone call or sift through a pile of mail.

But a text message? It’s quick, convenient, and accessible. It’s a small ping that fits more easily into their hectic schedule, providing them with the information they need without demanding too much of their time.

• Unlike phone calls, which can be disruptive, or emails, which can get lost in a crowded inbox, text messages are quick, direct, and less intrusive.

• They respect the customer’s time, allowing them to read and respond at their leisure.

• Texts offer real-time communication, ensuring customers receive timely updates.

• Texting adds a personal touch, fostering a stronger connection between the dealership and the customer.

• About 98% of text messages are read within 2 minutes, and often within seconds. Meanwhile just 20% of emails get seen within that 2 minute window.

THE POWER OF TEXTING: A CLOSER LOOK AT THE NUMBERS

In their survey, they asked customers multiple questions about their communication preferences at different points in time.

It should come as no surprise that customers prefer texting DURING service visits — in fact, 68% of respondents prefer text updates during service visits, up from 60% in 2020. Meanwhile, phone calls were only preferred by less than a fifth of respondents (18%).

However, this preference is taking hold elsewhere too. When they asked “Which communication method do you prefer most when receiving updates or information from your dealership BETWEEN SERVICE VISITS?” the results were telling:

a strong preference for texting (46%) over email (34%).

• The only group to still prefer email was the “55 and over” crowd, but even this group has seen an 11 percent increase in preference for texting in recent years, now at 35%

THE URGENCY FOR DEALERSHIPS TO ADAPT

These findings send a clear message to dealerships: it’s time to adopt a robust strategy for sending text messages to customers.

The good news is that progress is being made. More dealerships are sending texts (up to 75% from 58% in 2020), but even if you’re in that majority you might not be leveraging texting enough, so keep an eye out for moments when your emails or phone calls could have been a text instead.

DEALERSHIP CUSTOMER PREFERENCES: WHAT ELSE IS CHANGING?

The DriveSure 2023 Dealership Service Retention Report underscores one of the many trends they’ve been tracking closely since 2020: text messaging is rapidly becoming the communication method of choice for many vehicle owners. This shift in communication preference presents a unique opportunity for dealerships to connect with their customers in a way that’s both timely and relevant.

It’s also part of why DriveSure provides services like a Maintenance Marketing System is to simplify this process, enabling streamlined service reminders and customer communication through automated followups across multiple channels.

• Text messaging preferences rose from 32% in 2020 to 40% in 2023.

• Preference for email dropped from 50% to 43%.

• Preferences for phone calls (13%), mail (3%), and mobile apps (1%) remained steady.

When they broke down the responses by age, the preference for texting was even more pronounced among younger customers:

• Participants aged 18-34 vastly preferred texting (56%) over email (24%).

• Participants aged 35-54 still showed

If you’re in the remaining 25% who haven’t yet adopted texting for consumer communications, you need to start now. With so many dealerships still not using text, you don’t want to be stuck in that group as the number continues to drop, when dealerships with outdated communication methods become increasingly out-of-touch.

Adopting new communication methods is about meeting customers where they are and communicating with them in a way that respects their time and preferences.

But beyond these changing communication preferences, the 2023 report gives more insight into the changing preferences of customers, from the amenities they prefer to the reasons they go elsewhere for service.

By downloading their 2023 retention report (resources.drivesure.com/2023-dealershipservice-retention-report), you’ll gain a deeper understanding of the evolving preferences of your customers. This knowledge can empower your dealership to adapt and thrive in a changing landscape, ensuring you remain the go-to place for your customers’ maintenance, tires, and repair needs. n

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PENNSYLVANIA

ADESA MERCER

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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

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Tuesday 9:00 AM pittautoauction.com

AMERICA'S AA - HARRISBURG

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MANHEIM KEYSTONE

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Every Monday 11:00 AM manheim.com

MANHEIM PENNSYLVANIA

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Exotic Highline Sales every other

Thursday - 9:00 AM

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MANHEIM PHILADELPHIA

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Tuesday 9:30 AM

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MANHEIM PITTSBURGH AA

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NORTH EAST PENNSYLVANIA AA

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What’s Needed to Truly Establish a Digital Presence for Used Auto Dealers, Lenders and OEMs

By Ken Hill, Managing Director, 700Credit

The auto industry has been laserfocused on digitizing the retail shopping experience for several years, especially since the pandemic in 2020. However, the right digital retail strategy for today’s used dealer goes beyond up leveling a dealer’s web presence. This thinking has evolved, and many in the industry now realize that the sweet spot consumers want when shopping for a car will take a truly omnichannel approach – where customers want to research and build deals online, but still appear in the showrooms at some point in the process when it’s convenient.

The convergence of tools for an omnichannel environment

Driving this omnichannel movement will be continued economic uncertainty and shifting consumer behavior. These trends include a consumer desire for convenience, so they can do as much remotely before coming into the store, save money and have the flexibility to buy when, where, and how they want.

In order to truly enable this experience for consumers, used vehicle-focused retailers, lenders, and OEM partners must team together and leverage the right tools and resources that are advanced enough to power a digital shopping experience in an omnichannel environment.

The lack thereof for this combination of digital-enabling shopping continues to be a pain point for consumers. In fact, roughly 84% of dealers have adopted a digital retailing tool of some kind, but only 30% are maximizing its use in the store, according to dealership technology giant CDK Global Inc.’s 2023 Friction Points Study. What the digital technology adoption statistics show is that dealerships are using digital retailing products as online tools, but relatively few also use them in the physical store.

Pre-qualification technologies as just one example

As an example of a key element of one of

these resources, used dealers must leverage sophisticated pre-qualification tools in a way they never have before. Transitioning the consumer from the digital retailing experience into the dealers’ CRM experience and not starting the car buying process over for the consumer is still a significant challenge for the dealership.

Pre-qualification tools today must enable customers to know their terms on vehicles across a dealer’s inventory within minutes, including monthly payments and annual percentage rate (APR).

This is especially critical since inflation and rising interest rates are forcing customers to have a better understanding of what they can afford from the beginning of their shopping processes, allowing them to find vehicles that fit their needs and budget. This is extremely critical, especially today as dealership inventories are once again rising. With more vehicles to choose from, it’s understandable that customers’ appetites will grow larger. The right prequalification tools will help dealers match the right customer with the right vehicle, early on in the sales process.

Once pre-qualified on a dealer’s website or mobile app, customers can adjust filters such as down payment to see how it affects their terms or filter to show only vehicles that meet their monthly payment budgets.

This approach will also strengthen a used dealer’s ability to embrace more of a credit-first strategy. Dealers recognize the importance of integrating a smarter credit-first conversion strategy, and leading options today are centered around solutions built around helping customers shop based on payment possibilities.

Credit-first strategies provide a one-toone personalized shopping experience, allowing consumers to shop simultaneously for their vehicle and financing across a retailer’s entire inventory and finance programs, for all available terms, with

rebates, incentives, specials, ePrice, trade-in equity, etc. calculated and applied.

This approach also enables a frictionless shopping experience, and it helps dealers increase the quality of their leads so that they can pinpoint the customers who are qualified, ready, able, and willing to buy now.

The combination of data and technology helping retailers build the right lead-gen and conversion strategy will separate those retailers who thrive, versus those retailers who simply try to survive in the months and years ahead in this new digital ecosystem.

With the emergence of today’s digital and online shopping, the desire to build a more comprehensive and complete omnichannel ecosystem will only grow in importance. As more used dealers and partners continue with their digital retailing transformation they will embrace this strategy with their car-shopping consumers. Having the right tools in place will help them elevate their customer satisfaction scores, prevent fraudulent threats, and ultimately sell more vehicles. n

Ken Hill is managing director for 700Credit, the automotive industry’s leading provider of credit reports, compliance, identity verification and soft pull products. For more information please visit 700credit.com.

Shortcuts AND Compliance

ARE NOT FRIENDS

By Gil Van Over, Executive Director of Automotive Compliance Education

Once upon a time, I was part of corporate America while working for one of the captives. While in corporate America, I had an accident with my right hand, which ended up requiring a cast. I couldn’t grab the steering wheel with my right hand, my putter grip was abysmal, and I couldn’t write or sign my name.

As a supervisor in my branch office, I was responsible for completing a checklist on every repossessed account to ensure all the required steps from repossession to disposal had been completed.

I had to initial a box by each completed task to properly finish the checklist. Since I couldn’t drive, putt, or write, I just assumed my boss would understand if I marked a simple checkmark in each box. I evidently didn’t know my boss very well. “Shortcuts are not acceptable!” he bellowed when he reviewed the first of a stack of repossessions I had completed.

I assume shortcuts develop in many industries, companies, or processes. Some of the shortcuts I witness in dealerships create potential compliance concerns. As a trusted advisor to your dealer clients, you should be on the lookout for these shortcuts and discuss the potential risk with them.

Handwriting Product

The form in the file either reflects the free price (blank or N/A) or the wrong price, or the correct price that has been handwritten in. Oftentimes, when the price is corrected, the customer has not initialed the change. This begs the question, exactly what does the customer’s copy show?

Hopefully, the customer’s copy is consistent with the dealer’s copy, otherwise there could be some explaining to do if the customer ever decides to file a complaint or litigation and the file is requested in discovery.

Taking the shortcut to not having the DMS corrected or programmed or not properly loading the deal is potentially putting the validity of the transaction at risk.

Used Car Buyer’s Guide Disclosure

The FTC Used Car Rule is very specific about the language that must be used to properly disclose any remaining warranty. Most dealers have a solid process to properly make this disclosure. For example, the Used Car Rule says that using shorthand terms such as “factory warranty remaining” is not a sufficient disclosure. The vendors who manage the buyer’s guide process for dealers generally have the correct, safeharbor language.

or F&I managers forget to have the customer sign the gap enrollment form.

Almost every dealership employee understands that forging a customer’s signature to a form is a crime. Others rationalize that the customer did agree or knew that they agreed to the privacy policy or signed a menu and contract agreeing to purchase GAP, so it is all right to sign their name.

Forging a customer’s name is never an acceptable shortcut.

Not Reviewing the Buyer’s Order/RISC

During your next managers sales meeting, ask how many of your managers have read and understand each section, front and back, of the buyer’s order, the retail installment sales contract, and the lease agreement. After all, they are likely signing these documents on behalf of the dealership. Isn’t it reasonable to expect that they have read and understand all the provisions they are asking customers to agree to?

Pricing

In a perfect world, the customer signs at least three documents disclosing the acceptance and pricing of voluntary protection products: menu, buyer’s order (or PCD in California), RISC/lease, and enrollment form. There are times when the product price does not print on the enrollment form, instead it is either left blank or prints as “N/A.” Other times, the dealer management system (DMS) picks up the wrong price, perhaps printing the price of the vehicle service contract on the maintenance form.

The process falls apart when a used vehicle is sold before the vendor has an opportunity to put a correct buyer’s guide on the vehicle. Sometimes it falls apart when the salesperson gets lazy and handwrites a buyer’s guide instead of taking the guide off of the vehicle or printing one from the dealer’s software. Going the shortcut route thinking you are saving time leads to noncompliance with a federal law.

Signing Customer Names

People get busy. Salespeople fail to get the customer’s signature on the privacy notice,

Sometimes a shortcut is just being lazy instead of understanding the very basics of your job. Don’t let process shortcuts shortcircuit all the hard work your dealer has put in to make it the success it is today.

Continued good health and good selling. n

Gil Van Over is the executive director

of Automotive Compliance Education

(ACE), the founder and president of gvo3 & Associates, and author of “Automotive Compliance in a Digital World.” Email him at gvo@bobit.com.

Don’t let process shortcuts short-circuit all the hard work your dealer has put in to make their dealership the success it is today.

The CARLAWYER©

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

The CFPB is seeking, among other things, redress to consumers, civil money penalties, and an injunction to prevent future violations.

FCC Imposes Record-Breaking Fine Against International

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 Consumer Financial Protection Bureau, Federal Communications Commission, Federal Reserve Board, Federal Deposit Insurance Commission, Federal Trade Commission, other federal agencies. 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

CFPB Sues Servicer for Wrongfully Disabling and Repossessing Vehicles, Failing to Ensure GAP Refunds, DoubleBilling for Insurance, and Wrongfully Applying Payments. On August 2, the CFPB sued a servicer of auto financing contracts originated by a buy-here, payhere dealership affiliate. The CFPB alleged that the servicer: (1) wrongfully disabled buyers’ vehicles using starter-interrupt devices when the buyer was not in default or was in communication with the servicer about upcoming payments; (2) failed to ensure refunds of guaranteed asset protection insurance premiums when buyers were entitled to a refund because they paid off their financing early or their car was repossessed;

(3) double-billed buyers for collateral protection insurance;

(4) wrongfully applied buyers’ payments first to late fees or collateral protection insurance instead of accrued interest; and

(5) wrongfully repossessed buyers’ vehicles.

Network of Robocallers. On August 3, the FCC imposed a record-breaking fine of approximately $300 million against an international network of companies that made illegal robocalls to consumers in order to sell purported “auto warranties.” The companies allegedly made over 5 billion robocalls to more than 500 million phone numbers during a 3-month span in 2021 that allegedly were placed without prior express consent, included numbers on the National Do Not Call Registry, failed to identify the caller, failed to provide a callback number that allowed consumers to opt out of future calls, and used misleading caller identification.

FTC Updates National Do Not Call Registry Access Fees.

On August 17, the FTC issued a final rule to update the fees charged to entities accessing the National Do Not Call Registry, effective October 1, 2023. The first five area codes are free, and exempt organizations may obtain the entire list for free. The cost of accessing a single area code will increase by $3 to $78. The maximum charge to any single entity for accessing all area codes nationwide will increase by $662 to $21,402. The fee for accessing an additional area code for a half year will increase by $1 to $39.

Agencies to Hold Roundtable Discussion on Special Purpose Credit Programs.

The CFPB, OCC, HUD, and FHFA will hold a roundtable discussion on September 12 with representatives from community groups and industry trade organizations on the availability and benefits of special purpose credit programs. The Equal Credit Opportunity Act and its implementing Regulation B permit creditors, under certain circumstances, to design and implement

special purpose credit programs to extend credit to persons who would otherwise be denied credit or would receive it on less favorable terms. The agencies’ roundtable event is open to the public via livestream.

CASE(S) OF THE MONTH

Dealership Violated California’s Automobile Sales Finance Act by Failing to Indicate that Portion of Downpayment Would be Paid in Installments After Date of Purchase: An individual bought a used vehicle from a dealership on June 22, 2019. The parties agreed that the buyer would pay a $2,000 downpayment—$1,000 on the date of purchase and then another $1,000 in three installments drawn from his bank account: $333 on July 8, 2019, $333 on July 20, 2019, and $334 on August 5, 2019. The buyer’s monthly payments would begin on August 6, 2019. However, the retail installment sale contract stated that the buyer paid a $2,000 downpayment in “Cash, Cash Equivalent, Check, Credit Card, or Debit Card” on the date of sale and that he would pay no “[d]eferred [d]ownpayment[s].” After the purchase, the dealership assigned the RISC to a finance company. The buyer later sued the dealership, its surety, and the finance company, alleging, among other claims, violations of California’s Automobile Sales Finance Act. The trial court concluded that the dealership violated ASFA, ordered the buyer to return the car, and awarded him $15,995.50, the amount he paid for the vehicle.

The Court of Appeal of California affirmed the trial court’s decision. Under Section 2982(a)(6) of ASFA, dealers are required to disclose all the terms of a conditional sale contract in a single document. Among other things, the single document “must itemize the purchaser’s downpayment.” The itemization must state: (1) the agreed value of the property being traded in; (2) the prior credit or lease balance, if any, owing on the property being traded in; (3) the net agreed value of the property being traded in; (4) the (Continued on page 24)

(Continued from page 22) amount of any portion of the downpayment to be deferred until not later than the due date of the second regularly scheduled installment under the contract; (5) the amount of any manufacturer’s rebate; (6) the remaining amount paid or to be paid by the buyer as a downpayment; and (7) the total downpayment. The appellate court found that the three installments the buyer agreed to make after the vehicle purchase but before the first scheduled payment were deferred downpayments that had to be itemized in the RISC under Section 2982(a)(6). Because the buyer and the dealership agreed that he would pay half of his $2,000 downpayment in installments after the date of the purchase, but the RISC stated that the buyer put down a single $2,000 downpayment with no further installments, the appellate court agreed with the trial court that the dealership violated ASFA and concluded

that the trial court properly rescinded the RISC and awarded the buyer damages. See Chavez v. Golden Auto Group, Inc., 2023 Cal. App. Unpub. LEXIS 4471 (Cal. App. August 1, 2023).

COMPLIANCE TIP

Our case of the month illustrates the importance of describing the terms of the transaction properly in your contract. This includes any deferred down payments that your customer has agreed to make after the vehicle purchase but before the first regularly scheduled payment. You should ensure that your contract is properly disclosing all of the specific items that you’re required to disclose under federal and state law. Also, timing can be really important. For example, federal Truth in Lending disclosures must be provided to the consumer “prior to consummation” (a term the meaning of which can vary by state, but will likely be the point at which

the buyer becomes bound to proceed with the transaction). Federal disclosures, then, must be provided before the buyer signs on the dotted line. Does your state also have timing and/or presentation requirements? If so, do you know what they are, and are they and the federal requirement baked into your deal closing process?

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# 4877-0275-4173.

Autotrader Unveils 2023 Best Cars for Dog Lovers!

With National Dog Day held during the final weekend of the dog days of summer, Autotrader unveiled its list of the 2023 Best Cars for Dog Lovers, highlighting the best vehicles for people who have canines.

Before getting into the rundown of the 10 vehicles, Autotrader mentioned general features many of the selections have that make it easier to transport one or more four-legged family members. Features the editors deemed most important included:

• Durable seats: Vinyl, leather, and faux leather are the preferred seating materials for dog lovers, thanks to their durability and easy cleaning.

• Low cargo floor: A tall cargo floor can intimidate even a big dog. A low floor makes a vehicle accessible to small dogs and those with mobility issues. Rugged interior: Even the best-behaved dogs can accidentally cause damage to delicate surfaces. A rough-and-ready interior can better stand up to dog nails (and slobber).

• Accessories: Several manufacturers include dog accessories, like pet screens, in their catalogs. The aftermarket also supplies great harnesses, kennels, and other pet travel essentials. Some are universal, some model-specific.

• Cargo tie-downs: Automotive pet accessories are much more secure when using cargo tie-down hooks.

With those attributes in mind, the 2023 model-year vehicles Autotrader said are “paw-fectly suited for dogs and their owners” are:

1. Audi Q3

2. Ford Bronco Sport

3. Honda Pilot

4. Hyundai Venue

5. Jeep Grand Cherokee L

6. Kia Soul

7. Subaru Forester

8. Tesla Model Y

9. Toyota Sienna

10. Volvo V60 Cross Country n