Wsiada mag 201803 flip

The official publication of the Washington State Independent Auto Dealers Association

March | April 2018

Ask the Power Questions Best Practices to better connect with your customers

Military Lending Act

Social Media Leads

PLUS...

What you need to know about the new DOL tax filing system

People Matter Most.

David Pendergraft GM, DAA Northwest

For us, it’s about more than the bottom line.

Choose an auction with the right priorities.

McConkeyAuctions.com

The official magazine of the

WASHINGTON STATE INDEPENDENT AUTO DEALERS ASSOCIATION

MARCH | APRIL 2018

707 Auburn Way South Auburn, WA 98002 T: 253-735-0267 | F: 253-804-0844 staff@wsiada.com WSIADA.COM Mo Aliabadi, Board President South Tacoma Auto Sales, Inc. mo@southtacomaauto.com Randy Fletcher, President Emeritus In N Out Auto Sales inandoutwa@gmail.com Vacant, Board Vice President Emil Scarsella, Board Treasurer Town & Country Auto Sales e.scarsella@hotmail.com Vacant, Board Secretary J.T. Curry, Board President Emeritus Motors Northwest jt_curry@motorsnorthwest.com

contents

Ken Williamson, Board President Emeritus John’s Auto Mart, LLC johnsautomart@msn.com AJ Hamedian, Chapter President – North Cascade Excellent Choice Auto Sales, LLC ahamedian@yahoo.com Vacant, Chapter President – Vancouver Daniel Pizzarella, Chapter President – Tri Cities TriCities Auto Remarketing | dpizzarella@gmail.com Vacant, Chapter President – Yakima Vacant, Chapter President – South Sound Brian Corigliano, Chapter President – Spokane Globe Motors | globemotorsusa.com WSIADA STAFF Todd C. Elliott, Executive Director Colette Eilers, Receivables/Payables Michael McGaughy, Spokane Auctions Rick Olson, Project Manager Ashlie Seipert, Education | Member Services Mia Froman, Member Services PUBLISHER Sygnifi Networks wsiada@sygnifi.com Copyright 2018 MEMBER

3 | Executive Director’s Message 4 | Events Calendar 5 | Dealer Alert 7 | Best Practices: Ask the Power Questions 10 | Ten Most Common Vehicle Repairs 11 | Auction Listings 13 | Military Lending Act (MLA) Update 15 | Social Media: Dealerships Missing Out 16 | Service Providers Directory 17 | Dept. of Licensing: New tax filing system 19 | Registration Form: Education Fairs 21 | Read and Respond Continuing Ed Quiz 23 | Enrollment Form: WSIADA Membership 24 | Just for Fun

the Front Row | wsiada.com | March-April 2018 |

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ADVERTISER INDEX

EXECUTIVE DIRECTOR’S MESSAGE

P

Leaning into Spring

lease thank our sponsors for their generous support by considering their services and mentioning that you saw them here!

W

elcome to the Spring edition of the Front Row Magazine.

Since there are four inches of snow on the ground as I write this, it doesn’t really feel quite like spring yet.

Officially it won’t be spring until we start preparing the May/June issue!

Spring cleaning is a novel thought for a used car dealer. As you can imagine, we had a difficult time finding a direct correlation between spring cleaning and an independent automobile dealer. Hence, I took a bit of editorial license and included an article on inventory turn where the author references keeping your inventory fresh.

Chapter restructure This spring we are launching a new Chapter. We split the North Sound Chapter into the North Sound Chapter and the North Cascades Chapter. North Sound will extend from Auburn to Everett, and we plan to hold meetings at Drager’s Classics in Shoreline. North Cascades will run from Everett to Blaine and we will hold meetings in Mt. Vernon. At this point, we are considering the Drury Inn. AJ Hamedian will be the new North Cascades Chapter President and we will announce the North Sound Chapter President after the April 11, State Board Meeting.

Chapter Meetings— Spring Agenda

Adesa . . . . . . . . . . . . . . . . . . . . . . . . 6 AUL . . . . . . . . . . . . . . . . . . . . . . . . . . 4 AutoZone . . . . . . . . . . . . Back Cover

Education Fairs

Benchmark . . . . . . . . . . . . . . . . . . . 12

The Eastern Washington Education Fair will be held on Tuesday, July 17 before the DAA Rock and Roll sale.

Sorry, I do not know who the band will be yet. Bound NOT to disappoint.

Our agenda will be similar to last year, however, we will START the day with the Credit Acceptance 20 Group and conclude the day with the WSIADA agenda. It was such a success last year, we are planning to bring the DOL, DOR and AG teams back to talk to us. There is so much going on around the state that it is always good for them to join us. We promise to do a better job with the Happy Hour at the conclusion of the event.

The Western Fair will be held at LeMay again on August 16. Plan for the same structure - Associate Member presentations in the morning and Olympia Partners joining us in the afternoon.

Credit Acceptance . . . . . . . . . . . 12 DAA Northwest . . . . . . . Inside Front LeMay, America’s Car Museum . 18 Lobel Financial . . . . . . . . . . . . . . . . 2 Manheim . . . . . . . . . . . . Inside Back Rekdal Hopkins Howard . . . . . . . . . 9 Shepard & Shepard Insurance . . 11 Skywerks . . . . . . . . . . . . . . . . . . . . . 20 Service Provider Directory . . . . . 16 Smart Office Rewards . . . . . . . . . . . 8 SmartSocial . . . . . . . . . . . . . . . . . . 14

Classifieds We have talked about launching a Classified Ads section of the Front Row Magazine. We are launching one in this issue. Not much in there yet since we are just telling you about it. Our first thought is to give dealers planning to retire or exit the business an opportunity to lease or sell their property to one of the many new dealers looking to upgrade space from their current or original lot. As we progress, we will take on other ads for the good of our Member dealers. Stay tuned.

The spring Chapter meetings are posted at wsiada.com/chapters. The dealer investigators are joining us for a presentation and Q&A session.

The Q&A session will be the most important part of the meeting. For many of you this might be the first time you have seen your investigator since the initial meeting when you MLA update opened shop. Please plan to join us On page 13 you will find Brian King’s to ask even your most challenging article on the MLA. Remember, since questions. You can confirm attendance at wsiada.com/chapters. we have strict non-discrimination CONTINUED ON PAGE 5

TARGET YOUR ADVERTISING DOLLARS! CALL FOR A MEDIA KIT:

253.735.0267

the Front Row | wsiada.com | March-April 2018 |

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Events Calendar NOTE: Please check our online calendar to confirm dates and locations and to see dates further out.

Pre-Licensing Workshops (9am to 5pm)

MON APR 30 | 7 - 9pm Dragers International Classics 18805 Aurora Ave. N., Seattle 98133

North Cascade (NEW)

THU MAR 08........Auburn HQ

THU APR 12..........Auburn HQ

WED APR 18........Spokane

South Sound

Title Workshops

THU MAR 29 | 8:00 - 10am Griot’s Garage 3333 S 38th St, Tacoma 98409

(9am to 1pm)

THU MAR 15........Auburn HQ

TUE MAR 20.........Tri-Cities

THU APR 26..........Auburn HQ

TUE MAY 01..........Location TBD

MON MAR 19 | 7 - 9pm Clover Island Inn 435 N Clover Island Drive Kennewick 99336

TUE MAY 01 | 7:30 - 9pm Location TBD

Education Fairs

Vancouver TUE APR 03 | 12:30 - 2:30pm Manheim Portland 3000 N Hayden Island Drive Portland, OR 97217

TUE JUL 17 Holiday Inn Spokane Airport 1616 S. Windsor Dr., Spokane

Spokane

Education Fair West

Chapter Meetings Tri-Cities

North Sound

Yakima

TUE MAR 20 | 7:30 - 9:30am Hilton Garden Inn 401 Yakima Avenue, Yakima 98901

Education Fair East

WED APR 18 | 7 - 9pm Hilton Garden Inn Spokane Airport 9015 US-2, Spokane 99224

THU AUG 16 LeMay - America’s Car Museum 2702 East D Street, Tacoma

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4 | the Front Row | wsiada.com | March-April 2018

CONTINUED FROM PAGE 3

DEALER ALERT

laws you don’t want to ONLY stop selling GAP to military members and their sphere of influence.

APR 1 2018

WA DOL

Coming Attractions….

Facebook. We have been active on Facebook for a while. If you have not visited in a while make sure you check out all our new postings. Don’t forget to like us before signing off.

Mobile App. It’s here! It is a free app available in the app store, simply search from WSIADA.com.

Make sure you get us feedback, particularly if there is something you think we should add.

Auction App. We have started the review process with the Auctions around our new mobile Auction App. When we launch, dealers will no longer need to carry our Auction cards, everything will be electronic.

If you have multiple buyers attending multiple Auctions, no problem, you can have more than one Dealer representative using the application simultaneously. You will even be able to use the application if you are transacting business online.

This will be great for rural dealers who cannot find the time to get to one of our Auctions in person.

Smart Social. Smart Social is active as anyone who has been on social media lately can attest. The new development that we are launching that our platform provides is the ability to set up a private social network. We have received feedback from several of our Associate Members that the private social networks can be a great way to share importance business insights without sharing with the world. There is a major difference with our app. WSIADA owns it and controls the rules of engagement on the platform, which means that the Dealer Principals control access and content through your feedback to us. Watch for login instructions on our website or in an upcoming email from us. On this final point, make sure we have the current email of the Dealer Principal of your dealership so we can get you set up in advance.

Dealer-Altered Applications

The information below explains what vehicle licensing offices will require when a dealer has altered a title application after the customer signs the form.

Background Alterations made to dealer title applications are increasing the number of title applications rejected by the Department of Licensing (DOL) in Olympia. We are clarifying what is acceptable and what is required in the event of an alteration.

Alterations DOL considers a typed dealer title application altered when it contains handwritten or stamped (non-signature) vital or important information.

•

Crossing out a lienholder and adding a different lienholder

•

Handwriting or stamping a lienholder on a typed and printed application Handwriting a Lessee or Lessor on a typed and printed application

New WSIADA Team Member.

Check out the column regarding or new team member. Still a considerable amount of training before she will be up to speed. We are considering having her cover the dealer hotline.

Finally, make sure you periodically check Dealer Alerts. When you download the WSIADA mobile app, the Alerts will be on the lower left corner of the screen under the lightning bolt. We typically post important items as an alert even

If alterations are made to a title application, the dealer must complete a Certificate of Fact (COF) that includes the vehicle or vessel information, an explanation of the alteration, and a signature. If a COF is not included with the title application, DOL will not release the title.

Start Date

Here are three examples:

•

The following is critical for you to know because it can affect your customer:

Dealers must attach a COF to all altered title applications by April 1, 2018. Vehicle licensing offices will not process these transactions without a COF and DOL will reject title applications from dealers that do not meet this requirement.

Please contact a vehicle licensing office for additional details or questions.

SOURCE: Washington State Department of Licensing

before sending out an email and clearly before an article can hit the Front Row. For example, Rick posted the DOL article in this issue on February 22, 2018.

Need addition copies, or back copies of the Front Row? Save a tree and find what you need at https:// www.wsiada.com/the-front-row.

Todd C. Elliott, WSIADA the Front Row | wsiada.com | March-April 2018 |

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• • • • •

BEST PRACTICES

Ask the Power Questions

By Rick McCormick

L

istening is the most important part of communication; specifically, listening with the intent to learn more about the other person. To do this, you need to ask the right questions at the right time.

base your next question. In fact, these questions tend to turn a conversation into an interrogation.

2. Open-Ended Questions

Open-ended questions cause customers to relax and expand upon In an environment in which there I’d like to take you back, for a their answers. More importantly, they is no sales pressure, customers are minute, to a memory — yours, not provide you with the information you asked great questions that encourmine. Maybe it was a job interview, need to sell your products. These a discussion with another employee, age them to talk while the F&I manager listens to better understand their questions utilize words such as who, or even a meeting concerning your what, where, when, why, and how. performance. A question was posed situation. Otherwise, customers will that changed the entire atmosphere. provide guarded responses and seek Open-ended questions should be to move the process forward quickly. a creative effort to produce an You know the one. It made you, or in-depth answer by the customer the other person, stop and think.

So, what type of questions are we and must be more than what I call The response then opened a door going to ask? There are three types of a “one-fact” effort. Your open-ended or shifted events. What made the questions designed to help customers questions could include: difference is the question. see the need for products, which will • Who will be driving the car? make their ownership experience See, great questions are the most more enjoyable. Let’s review. effective method to having a • How long do you normally keep productive conversation with your your vehicles?

1. Closed-Ended Questions customer before any attempt to • How many miles a year sell them anything. That is our needs Closed-ended questions, which can do you drive? discovery — the most important part be answered with a “Yes” or “No,” of the F&I process. But before we • Where do you normally park should be held to a minimum and can get to the questions, we need your car during the day or night? only used when necessary. These to create a safe environment. A safe questions do not provide you with We should utilize these great environment encourages an open any new information on which to questions. However, these one-fact discussion by everyone involved. the Front Row | wsiada.com | March-April 2018 |

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questions will not promote the open discussion we need to not only discover the necessary facts but also the motivations and feelings about why they are buying and how they will use this vehicle. To uncover those, we must utilize the third and most effective question type.

•

Environmental and tire protection: How would you describe a typical month of use with your vehicle?

•

Dent-and-ding: How would you describe a typical weekend for you and your family?

There are two “magic words” that, when used as a part of a power question, engage the mind of the customer at a high level and create a picture in their mind that motivates them to buy.

3. Power Questions These are open-ended questions on steroids. Power questions prompt customers to describe what something might look like. Here are a few examples that will hopefully prompt you to create even more: •

Icebreaker: What factor was the most impactful to help you reach your level of success in your line of work?

•

Needs discovery: What word best describes the vehicle you’re trading in today and why?

•

Service contract: What is the one technology feature on your car that excites you the most?

in person or on video, hundreds of F&I deliveries. The F&I managers who ask quality questions normally end up asking 20 to 30 questions as they progress through the required paperwork and before the menu is presented to the customer.

They also have a tremendous amount of information and reasons why their customers need several of the products they offer. And they will have numerous opportunities to use the most powerful tool any F&I manager has: “You told me earlier …”

The great thing about power questions is they naturally lead to follow-up questions and more discussion. I have observed, either

F&I managers who ask more closedended and one-fact questions can end up talking more than the customer. They also gain fewer reasons why their customers need their products.

Say the Magic Words

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There are two “magic words” that, when used as a part of a power question, engage the mind of the customer at a high level and create a picture in their mind that motivates them to buy. The first word is “describe.” When you ask a customer to describe something, it immediately paints a picture in their mind that their response will vividly describe. Referring to that response in your interaction provides a powerful way to move them to consider the products you are discussing. In fact, consider the following word-track: “Earlier, you described a typical weekend for your family as being a non-stop schedule of soccer games that usually involves several other child passengers. That’s why the environmental protection is critical for you, so all of that activity will not permanently damage the interior of your vehicle and hurt its trade value later.”

When you refer to the scenario they described, it is much more powerful than any scenario you come up

with. That’s power selling with power questions.

The second magic word is “one.” When you ask a customer to single out one piece of information, their mind immediately starts a process of sifting through information like going through a box of index cards. This brings a sense of urgency or importance to an area you want to highlight and brings the most important fact to the surface. In short, it makes them think. One of the struggles in our fast-paced environment is to get customers to slow down and think about the ramifications of the major purchase they are making.

Ask your next customer, “What is the one technology feature on this new car that excites you the most?”

This sets up a discussion about the high level of technology inside the vehicle and the urgency to protect against the high cost of repairing a possible failure of that technology or replacing it.

It also makes you aware of the level of engagement each customer has

with the technology on their vehicle and the level of effort you might need to use to enable them to realize how much more advanced the vehicle is compared to their trade-in.

Power questions create an open dialogue with the customer and the conversation that follows is based on his or her situation. That is a conversation your customers will be interested in and one that will enable them to see themselves using the products offered. Power questions provide at least seven benefits to our efforts: •

Increased levels of engagement

•

Greater trust and openness in less time

•

Forces the customer to think

•

Creates conversations and eliminates the presentation

•

Moves customers to take ownership of their own conclusions

•

Naturally leads to more questions, both by you and the customer

•

Creates a helping environment as opposed to a selling environment

Every F&I manager asks their customers questions. However, if an intentional effort is made to develop questions that provide the deeper interaction needed to make our invisible products visible to the customer, we will see better results. The questions we ask need to be updated regularly so we can provide the most effective customer-focused process. Few things will have more of an impact on your ultimate success in F&I. Rick McCormick is the national account development manager for Reahard & Associates Inc., an F&I training company providing classes, workshops, in-dealership and online training. Email him at rick. mccormick@bobit.com.

Copyright © 2018 F&I and Showroom.

Used with permission.

the Front Row | wsiada.com | March-April 2018 |

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Car Care Council Releases List of Top 10 Most Common Vehicle Repairs

The Trophy Case

EDITOR’S NOTE: Many of you may have seen this article, or just know this from experience. If so, good refresher. If not, take some time and integrate some if not all of these into your vehicle inspection process.

Think about it this way, if these are the most common vehicle repairs and you take care of them, it’s a lot less likely that the car is coming back to your dealership during the Implied Warranty period. HAPPY CUSTOMER!!! ~ Todd Elliott

C

hanging the oil and oil filter, replacing wiper blades and air filters, and scheduled maintenance top the list of most common vehicle repairs, the Car Care Council said this week.

The list was developed by market research company IMR Inc. and shared with the Car Care Council, a nonprofit organization promoting the benefits of regular vehicle care. The following are the Top 10 most common vehicle repairs performance by vehicle owners and their trusted repair shops: 1. Oil/oil filter change 2. Wiper blade replacement 3. Air filter replacement 4. Scheduled maintenance 5. New Tires 6. Battery replacement 7. Brake work 8. Antifreeze added 9. Engine tune-up 10. Wheels aligned/balanced Copyright © 2018 Auto Dealer Today.

Used by permission.

10 | the Front Row | wsiada.com | March-April 2018

Get your plate frames and inserts from WSIADA!

YOUR logo, YOUR style Competitive Pricing Support WSIADA

Get started today in the online store at www.wsiada.com or call (253) 735-0267.

LET US SET YOUR DEALERSHIP FOR FREE!

AUCTION LISTINGS For a current calendar view, visit WSIADA.com and select “Calendar” from the top navigation menu.

Adesa | adesa.com/seattle

Tuesday: Consignment 9:30AM Alternate Tuesday: Specialty 8:30AM Thursday Night: InOp Sale 4:45PM

Adesa | Portland

adesa.com/portland Thursday: Consult website

Bowen-Scarff Ford Lincoln

bowenscarff.com

Call 253.243.5251 for days and times

Copart | copart.com

Times vary: Consult website

CTM Unlimited

See website for auction dates and times: www.ctmunlimitedauction.com

DAA | Seattle | daanw.com

Friday: Dealer and Fleet/Lease 9:00AM Alternate Friday: Heavy Metal*

9:00AM (Lane 8) Monthly GSA Public Auctions:

1:00pm as scheduled” *Mechanically-challenged/cosmetically damaged/nonrunning inventory

DAA | Northwest | daanw.com

Weekly auctions: Thursdays at 9:00am; Monthly promotional event auctions:

Wednesday at 2pm &

Thursday at 9:00am Monthly MotorSports auctions:

Thursdays at 11:00am (Lane 8) Monthly RV auctions:

11:00am (Lane 8);

Heavy Metal auctions:

8:30am as scheduled (Lane 8); NOTE: MotorSports, RV and Heavy Metal auction dates can be found at daanwmotorsports.com

Ehli Auto Auctions | ehliauctions.com Last weekend of every month.

IAA - Insurance Auto Auctions iaai.com See website for dates and times

Kaman | kamanauctions.com Thursday: Noon

Manheim | Seattle manheim.com/locations/SSAA/events Monday: OVE Event Sales Tuesday: Alternate weeks Ford Factory

(Closed sale) - 10:00am;

Crossborder Mobile Sale - 1:00pm Wednesday: General Sale Weekly 9:00am

All sale dates and times are subject to change. Please verify with the Auction or manheim.com.

Manheim | Portland manheim.com/locations/PAA/events Tuesday: Open Sale: 9:00AM

the Front Row | wsiada.com | March-April 2018 |

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Washington State Independent Auto Dealers Association

Membership Benefits • Auction discount cards... a $$5000+ value!

• Dealer advocacy • Dealer hotline • 10% off most WSIADA services and products • Legislative updates • Legal support program • Convenient billing • Regional continuing education opportunities • Subscription to the Front Row magazine Protect your own interests and support the auto industry in Washington State.

Join WSIADA or renew your membership today!

See enrollment form on page 23.

12 | the Front Row | wsiada.com | March-April 2018

LEGISLATIVE UPDATE

The Current Status of the Military Lending Act Quagmire

By Brian King and Michael Oates

D

ealers have undoubtedly read or heard about a recent change in the way a federal law called the Military Lending Act (MLA) is

impacting dealers. The issue hit the industry unexpectedly when, on December 14, 2017, the Department of Defense (“DOD”) published a new interpretive rule pertaining to the MLA. The DOD’s new rule substantially revises a rule the DOD previously issued regarding the application of the MLA to the sale of vehicles.

lender-dealer agreements, such arrangement may also result in a lender claiming a dealer violated a provision of the lender-dealer agreement by including GAP in a financed sale to an individual covered by the MLA.

is secured by that motor vehicle), and also finances optional leather seats within that vehicle and an extended warranty for service of that vehicle is eligible for the exception . . . .” “[A] credit transaction that includes financing for Guaranteed Auto Protection insurance or a credit insurance premium would not qualify for the exemption . . . .”.

Dealer Response

Thus, the DOD has taken the position that GAP products are not exempt, and thus transactions involving GAP must comply with the MLA.

Initially, compliance with the MLA appeared impractical but at least technically possible, for at least some The DOD’s rule created shock waves transactions. Recently, however, throughout the industry. Industry the National Automobile Dealers leaders are presently working on the Association (“NADA”) commissioned issue with the hope of resolving the the Maryland law firm of Hudson matter so dealers have additional Cook to provide an analysis of guidance moving forward. The the topic. Hudson Cook’s analysis purpose of this article is to briefly concluded that the practical effect outline the issues as they presently of the DOD’s ruling is that it would exist for Washington dealers. not be possible for a motor vehicle dealer to originate a transaction Brief Background involving a customer covered by the MLA that finances GAP, unless Pursuant the DOD’s new rule, the transaction was unsecured. In although vehicle transactions are Hudson Cook’s opinion, it is highly exempt from the MLA, a vehicle unlikely that any dealer or finance loan that finances a credit related product or service is not exempt from source will be willing to originate or purchase an unsecured transaction the MLA. The Rule states in part: given the economic risk it would “[A] credit transaction that financing present. Based on our review of the purchase of a motor vehicle (and

Effectively, there does not appear to be a viable path for dealers to comply with the MLA. Penalties for violating the MLA include both civil and criminal penalties, including the right of rescission, fines, monetary damages, and imprisonment for up to one year. Absent additional clarification or revisions to either the MLA or the DOD’s Rule, it appears the best course of action is for dealers to immediately discontinue selling GAP to individuals covered by the MLA, since dealers are likely unable to comply with both the DOD’s current interpretation of the MLA and also lender requirements regarding the perfection of a security interest. (It is important to the note that the MLA covers certain active duty military as well as their dependents.)

As a result of the Rule, dealers should be determining whether each and every one of its customers is covered CONTINUED ON PAGE 24

the Front Row | wsiada.com | March-April 2018 |

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Pacific Coast Auto Center The Auto Connection Farm & Home Supply, Inc Avila's Auto Sales, Inc Pacific Highway Sales LLC The Trade Store & Affordable Car Rentals Frank Sparling Bayview Motor Club, LLC Palomino's Automotive, Inc TMS Motor Sports Friesen Motorsports BBJ Auto Sales Paragon Auto Sales Tom's Car Store Inc Globe Motors Best Auto Parts, Inc Park Avenue Auto Totem Lake Auto Sales Gold Key Motors Best Buy Auto Sales Pasco Auto Wrecking, Inc TRED Good Guys Cars and Trucks Best Line Motors LLC Patriot Automotive Tri-Cities Auto Remarketing Grand Auto Sales Bidadoo Auctions Paul Christensen Motor Co True's Auto Plaza Gray Motors, Inc Binford Metals, LLC Peters & Keatts Equipment, Inc. U.S.A Auto Sales Greenacres Motors BNW Motors Platinum Wholesale Autos, Inc V.L.S. LLC Heaverlo NW, Inc Brink's Car Sales Prestige Auto Connection Vancouver Car Company High Mountain Horsepower Bruce Kirkham's Auto World, LLC Prestige Motors, Inc. Vaqueros Auto Sales Hopkins Automotive Bryson Sales & Service of Washington, Inc Puyallup RV Vista Auto Sales and Leasing, Inc Import Auto Sales Budget Rent-A-Car Port Angeles Quality Auto Center Washington Auto Finance, LLC J & H Auto Sales Camco Auto Group Rad Towing Inc. Washington Cars, Inc J&R Auto Sports LLC Car Emporium of Spokane Rallye Auto Sales Inc Yaktown Motors Jace Foster Carhop Randco Tanks JFK Auto Sales and Service Carmona Auto Sales Randy's Auto Sales Inc & Motorsports JJ's Auto Investments Carr Auto Group, Inc Reality Auto Sales Jolley Roger's RV Cars R Us Red Sun Moto Joseph Gjerstad Carson Cars Inc Redline Motors LLC Kalispel Tribe of Indians Carstars Reliable Auto Sales LLC Kaman Auctions, LLC Cats Exotics, Inc Rhine Equipment Company Landmark Motors, Inc Cedardale Truck & Trailer Sales, LLC Ride Auto Sales LLC Low Auto Sales LLC Central Leasing, Inc Rons Auto Sales Main Drag Auto Sales & Transport, LLC Championship Motors Route527 Motorsports, Inc Mainly Muscle Cars, LLC Checkered Flag Motors Ruddell Auto Mall Marquez Motors Cliff's Cycle Center, Inc Russ Dean Family RV McKenna Motors Compass Point Auto Sales, LLC S & P Auto Memory Lane Motors Complete Automotive, Inc Salvagebid LLC Millennium Motors, Inc Consumer Auto Liquidators ShredSupply, Inc Mimeco, LLC Crosspointe Autoplex Simple Car Company Miranda's Used Car Crown Auto Sales Smittys Outdoor Power Equipment Mission Motors Inc Crown Hill Automotive Snohomish Equipment Rental & Sale Motorcars Limited Dave Chapman Auto Sales Specialty Mobility North East Washington Auto Sales Davenport Motor Company Sunnyside Automotive Group LLC Northend Truck Equipment, Inc Debbie Olson Sunrise Automobile Corp Northwest Autoway Doggett Autobrokers Sunset Cars of Auburn Northwest Motorsports, Inc E-Z Buy Motors, Inc Tacoma Autos LLC Olympia Auto Sales, LLC Easy Auto Sales LLC Tacoma Car Sales LLC Olympic Auto Sales Econex Motorsports Taylor Auction, LLC Osprey Equipment and Leasing Inc Enterprise Rent-A-Car TDI Motors Owen's Yamaha Suzuki Harley Davidson Excellent Choice Auto Sales The Auto Connection Pacific Coast Auto Center Farm & Home Supply, Inc The Trade Store & Affordable Car Rentals Pacific Highway Sales LLC Frank Sparling TMS Motor Sports Palomino's Automotive, Inc Friesen Motorsports Tom's Car Store Inc Paragon Auto Sales Globe Motors Totem Lake Auto Sales Park Avenue Auto Gold Key Motors TRED Pasco Auto Wrecking, Inc Good Guys Cars and Trucks Tri-Cities Auto Remarketing Patriot Automotive Grand Auto Sales True's Auto Plaza Paul Christensen Motor Co Gray Motors, Inc U.S.A Auto Sales Peters & Keatts Equipment, Inc. Greenacres Motors V.L.S. LLC Platinum Wholesale Autos, Inc Heaverlo NW, Inc Vancouver Car Company Prestige Auto Connection High Mountain Horsepower Vaqueros Auto Sales Prestige Motors, Inc. Hopkins Automotive Vista Auto Sales and Leasing, Inc Puyallup RV Import Auto Sales theSales Front Row | wsiada.com | March-April Washington Auto Finance, LLC Quality Auto 2018 Center J & H|Auto Washington Cars, Inc Rad Towing Inc. J&R Auto Sports LLC

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SOCIAL MEDIA

Study: Dealerships Missing Out With Facebook Messenger, After-Hour Leads EDITOR’S NOTE: This article might be focused on Franchise dealers, but trends in our space are certainly set to follow what occurs in the Franchise dealer space. ~ Todd Elliott

O

nly 16% of the 1,500 dealerships mystery-shopped by Digital Air Strike responded to internet leads within 15 minutes and 18% didn’t respond at all. The findings are part of the social media firm’s 2018 Mystery Shop Study, which was conducted over a four-month period and included leads submitted on a dealers’ websites and through Facebook’s Messenger app.

While the remaining 66% of dealers did respond to the test leads submitted, Digital Air Strike noted that industry best practices indicate that a customer is three times more likely to visit the dealership when a lead is responded to within 10 minutes.

“We wanted to get a better understanding of how dealers truly respond to leads,” said Alexi Venneri, co-founder and CEO of Digital Air Strike. “The results reveal a tremendous opportunity for dealerships and manufacturers to improve their lead responses, including increased use of Facebook Messenger combined with the power of Facebook Marketplace, and to leverage more engagement

tools such as financing calculators, vehicle photos/video and afterhours quoting tools that can bridge the gaps we found in automotive consumer interactions.”

As part of its mystery-shop, the social media firm sent tested dealers a specific vehicle request that

included questions that required specific answers. The top dealership ranked by OEM that responded with the information requested and did so within 15 minutes included Fiat at 34%; Toyota at 20%; Mercedes at 18%; Ford at 17%; and BMW at 16%. The average time across all stores and all OEMs to respond to a lead was more than 24 hours, with some dealers taking up to four days to respond. Additionally, only 36% of dealers shopped responded to requests submitted afterhours.

“This potentially represents lost business as multiple manufacturers have stated that up to 40% of all consumer leads are submitted when CONTINUED ON PAGE 17

the Front Row | wsiada.com | January-February 2018 |

15

Service Provider Directory WSIADA service providers are best in class. We invite you to explore their services and please mention that you saw their listing in the Front Row magazine.

Accounting Services Rekdal Hopkins Howard (425) 658-1400 rh2cpas.com

Please see our ad on page 9

Auctions Adesa Seattle

(253) 735-1600 adesa.com/Seattle

Please see our ad on page 6

Adesa Portland

(503) 492-9200 adesa.com/Portland

Bowen Scarff Ford Lincoln

Yarbro Auctioneers (509) 765-6869 yarbro.com

Auto Museum LeMay Car Museum

(253) 779-8490 AmericasCarMuseum.org Please see our ad on page 18

Benefits / Health Insurance Benefit Consultants NW (800) 945-4193 bcnw.com.org

Skywerks

(206) 999-6699 skywerks.com

Please see our ad on page 20

Credit Acceptance

Please see our ad on page 4

Please see our ad on page 12

(800) 826-3207 aulcorp.com

(206) 696-2264 dpccorp.net

Please see our ad on page 12

Drive Dealer Solutions

Hecht & Hecht Insurance

(253) 847-8300 copart.com

(800) 609-0979 hechtins.com

The F&I Group, LLC

CTM Unlimited

Shepard & Shepard Business Solutions

Northwest Dealer Financial Services

(509) 244-4500 daanw.com

Please see our ad on the inside front cover

DAA Seattle

(253) 737-2200 daaseattle.com

Ehli Auctions

(253) 572-0990 ehliauctions.com

Insurance Auto Auction (IAA) (206) 658-6900 iaai.com

Kaman Auctions

(425) 640-5111 kamanauctions.com

Manheim Portland (503) 286-3000 manheim.com

Manheim Seattle (206) 762-1600 manheim.com

Please see our ad on the inside back cover.

Please see our ad on page 11

Car Care Griot’s Garage

(253) 922-2200 griotsgarage.com

(253) 279-3260 creditacceptance.com

Benchmark Dealer Services Innovative Finance (new!)

Copart Auto Auction

DAA Northwest

(253) 620-1500 dpearson.com

AUL Corp

(253) 243-5251 bowenscarff.com

(855) 396-0488 shepquote.com

Davies Pearson, P.C.

Finance and Insurance Lending

Bonds and Commercial Insurance

(360) 273-5808 ctmunlimitedauction.com

Legal Services

(425) 478-7242 drivedealersolutions.com (360) 710-9545 thefandigroup.com

(206) 718-7234 (Western WA) (509) 705-7597 (Eastern WA) nwdfs.com

Southwest Dealer Services (206) 571-3068 ian.fee@swds.net

Western Fidelity Insured Services, Inc.

(877) 635-2021 innovativeauto.com

Lobel Financial Corp.

(253) 839-2600 lobelfinancial.com

Please see our ad on page 2

United Finance

(503) 238-6475 unitedfinance.org

Marketing Sygnifi Networks (734) 418-7073 info@sygnifi.com sygnifi.com

Parts & Service Advance Auto Parts

(877) ADVANCE advanceautoparts.com

AutoZone

(425) 283-4158 wfisinc.com

(866) 727-5317 sc53@autozone.com

(866) 813-1429 dealersocket.com

Floor Plan Companies

Staffing

Custom Signs

AFC

JobDepotUSA (new!)

(253) 333-0300 afcdealer.com

(877) 868-7635 info@jobdepotusa.com

Floor Plan Xpress

Surveillance/Security

CRM Systems Dealer Socket

Sign Dog

(253) 445-6424 signdog.com

Dealer Management Systems (DMS)

(509) 703-6558 fpxus.com

Carousel Software

(855) 372-2329 nextgearcapital.com

Dennis Demattia demattia@mailforce.net (509) 926-8848 carouselsw.com

Frazer Computing, Inc. (888) 963-5369 frazer.com info@frazer.com

16 | the Front Row | wsiada.com | March-April 2018

Nextgear Capital

Identity Theft Protection LegalShield

253 905-9111 legalshield.com

Please see our ad on the back cover

Pro-Vigil Surveillance (210) 858-1105 pro-vigil.com

Vehicle and Fleet Management Spireon

(800) 557-1449 spireon.com

options that may be better suited to their budgets.

CONTINUED FROM PAGE 15

dealerships are closed,” the firm noted in its press release.

“Consumers are shopping after work when no one is at the dealership to respond; however, there are innovative tools that can provide intelligent responses to consumers even after hours.”

“According to multiple industry sources, up to 45% of all consumers end up purchasing a different vehicle than the one they originally inquire about, so providing multiple vehicle choices in a response to a consumer has been shown to increase the chances of closing a deal with that consumer,” Digital Air Strike noted.

The mystery-shop also revealed that 64% of dealerships didn’t respond to leads on Facebook Messenger, which 1.3 billion consumers use as a direct line to reach business.

Making that connection even more relevant is Facebook Marketplace, which allows pre-owned vehicle inventory to automatically be showcased to consumers closest to dealerships.

Additionally, 53% of dealerships shopped by the social media firm did not respond with a price or any vehicle information despite requests for that information. And only 31% of those that did provided included lease and rebate information.

“Whether it is a lack of knowledge or ability to leverage this powerful tool, many dealers are missing sales if they don’t respond to consumers on Facebook,” the firm noted.

“Consumer use of Facebook Messenger is exploding and, according to Facebook, “autos” is one of the most popular categories on Facebook Marketplace with millions of Americans looking at vehicles each day.”

According to study results, only 25% of dealerships provided preowned vehicle options, and only 15% provided additional new-

vehicle options. That means that 85% of dealerships are missing the opportunity to give customers

Washington Department of Transportation: New system for filing State taxes coming

O

n March 19, 2018, the Washington State Dept. of Revenue will launch “My DOR” as the secure portal for all online services. Businesses and tax professionals will be able to access all their tax and business licensing accounts using their SecureAccess Washington (SAW) login. There will be a new look for the online excise tax return, reseller permit application, tax credits application, and bill pay. The Department

will retire its existing online service portal, My Account/e-File, and taxpayers will begin filing electronically and accessing their tax accounts in My DOR. To help prepare businesses, the Department of Revenue will host a series of free live webinars starting March 7. Continuing education credit is also available. For more information including a complete schedule, visit dor.wa.gov/mydor.

As for content included in dealers’ responses, only 19% included vehicle photos and only 1% included video in their response. The firm pointed to findings in its sixth annual Automotive Social Media Trends Study as evidence that content does matter, with 48% of car buyers saying a faster and more detailed response that includes actual vehicle photos and video would make them buy from one dealership over another.

Copyright © 2018 F&I and Showroom.

Used by permission.

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the Front Row magazine is the most effective way to reach over 1,600 automobile dealers in Washington State.

Contact WSIADA for more information about targeting your ad dollars today!

253.735.0267

the Front Row | wsiada.com | March-April 2018 |

17

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18 | the Front Row | wsiada.com | January-February 2018

buys the vast majority of its inventory at auction, runs its own inspection centers where vehicles are examined and brought up to retail condition.

“So basically our policy is 90 days of lot time for a vehicle,” Fidel says.

“Our dealerships have an average 70-day supply, so they are turning inventory more than five times a year.” DriveTime’s tracking system is proprietary, he says. “We developed our own. We don’t use off-the-shelf software,” Fidel says.

INVENTORY MANAGEMENT

Turn, Turn, Turn.

Key to used-car profits? Control inventory.

By Jenny King, Automotive News

T

he used-car lot can yield a rich harvest, but it is also scattered with land mines.

When it comes to managing usedcar inventories, “most dealerships are flying by the seats of their pants,” says used-car dealership consultant Tommy Gibbs, of Tommy Gibbs & Associates in Treasure Island, Fla. “Used-car inventories are based on what someone thinks vehicles are worth,” Gibbs says. “There is no methodology for keeping track of stock.”

And they are more volatile than new-vehicle stocks, says dealer consultant Dennis Puskaric, of Dendi Enterprises Inc. in Hobe Sound, Fla. Values rise and fall constantly. “At the same time, they are more controllable,” Puskaric says. “You can choose what you buy.

The manager needs to determine the right mix.”

In general, consultants say, dealers need to pay greater attention to how much is invested in each used vehicle, including reconditioning costs. That is what software vendor Dale Pollak has in mind with his new mPower Auto tracking system. Pollak, a Chicago lawyer and consultant, says his software gives each used vehicle a score. “The typical inventory management system today tells the dealer what he or she has,” says Pollak, who grew up working in a familyrun dealership. “It does not produce solutions or business directions.” Pollak says the key is how much money is invested in each car, compared with its wholesale value. “The dealer wants to build equity in inventory,” he says.

Keeping score Pollak’s program assesses the value of each car daily. This produces a percentage score for each vehicle

that indicates how close the car is to the price the dealer desires to get for it. Information is updated daily and delivered to a desktop computer or Web-enabled mobile phone, he says.

Tim Ciasulli, dealer at Planet Honda in Union, N.J., says mPower “measures everything—You can’t manage what you can’t measure.” Ciasulli, who has a typical inventory of 125 to 150 used vehicles, says he was concerned that he might lose some deals if his staff didn’t offer top dollar for trades. But that hasn’t been the case. Putting “more intelligent numbers on trades”

Puskaric’s Recommendations

Consultant Puskaric takes a hardnosed approach when it comes to turn times. Tight control should include an 8 o’clock Monday morning review, so vehicles that “have grown whiskers” can be taken to auction the same week, he says.

Puskaric recommends a 45-day turn time on used vehicles. “When a car has been on the lot 21 days, the manager should check to see how many people have seriously looked at it, have taken it for a test drive,” he says. Keeping good records on all vehicles is worth the effort, Puskaric says. If the interest in a vehicle is low, he suggests finding out what’s wrong.

Does the vehicle need a better spot on the lot?

Puskaric discourages putting spiffs on vehicles that have been around for a long time. That can create a poor sales climate, with staff waiting for some vehicles to get incentives and not showing them to customers until they do. The consultant says some dealers have Saturday auctions to which they invite independent dealers who might be interested in used vehicles they are unable to sell.

• A 45-day turn time on all used vehicles • Regular checks on how many people have looked seriously at or test-driven each vehicle • Limiting incentives on vehicles that have been on the lot awhile • Identify aging vehicles every Monday morning to be taken to auction that week

has made appraisals more accurate.

And for the most part, customers are willing to go with what is offered.

Turnaround time Phoenix-based DriveTime, which owns almost 90 independent used-car stores, allows itself 120 days to sell a vehicle before reselling it at auction.

The company sold about 55,000 vehicles last year. “It may take us 20 to 30 days between buying a vehicle and putting it on a lot,” says DriveTime CEO Ray Fidel. The company, which

Karl Schmidt, general manager at Morrie’s Mazda and Maserati of Minneapolis in Minnetonka, Minn., recently discovered that his store was “overappraising Saturns.” Not only would customers take less for them, he says, but the store could turn them more quickly by pricing them lower. Schmidt, who has set his sights on going from 7.5 turns a year to 10 to 12 on the used-vehicle lot, says the dealership took in an early 1990s Corolla with 170,000 miles in trade for $500, only to learn it was bringing $1,500 at auction.

“After you acquire, you need to manage,” Schmidt says. “You must ask, ‘Where do I go with this car?’”

SOURCE: autonews.com. Used by permission.

the Front Row | wsiada.com | March-April 2018 |

19

20 | the Front Row | wsiada.com | March-April 2018

READ AND RESPOND | the Front Row MAR/APR 2018

T

he purpose of this Read and Respond quiz is to verify one has read the content of this issue of the Front Row. All of the answers for the questions provided are included in the content of the issue. WSIADA’s Read and Respond quizzes earn 1 hour of continuing education credit. A passing grade will be granted for scores of 80% or higher.

Payment is required prior to the Washington State Department of Licensing being notified of completed continuing education. The Front Row Read & Respond policy has been updated; please contact WSIADA for payment information.

Please be advised that the information contained in WSIADA’s the Front Row is, to the best of our knowledge, current and correct. However, we caution readers not to use the information provided to them as final authority. Its purpose is to be a guide. Any legal advice should be regarded as general information. It is strongly recommended that one contact an attorney for counsel regarding specific circumstances. Some articles may express opinions and/or suggestions for best practices. Likewise, the appearance of advertisers or their identification as members of WSIADA, does not constitute an endorsement of the products or services featured.

DEALERSHIP NAME CHECK:

DEALER#

BUSINESS PHONE

FAX

I HAVE READ AND UNDERSTAND THE DISCLAIMER ABOVE.

QUIZ TAKER’S NAME

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MAIL: 707 Auburn Way South; Auburn, WA 98002 FAX: 253-804-0844 EMAIL: staff@wsiada.com

8. Innovative Auto Finance joined the

4. What are the Magic Words during communications of a sale?

WSIADA as a Sponsor recently. What

a. Please and Thank you

service do they offer?

b. Describe and one

a. Lending

c. All of the above

b. Borrowing

d. None of the above 1. The Department of Defense’s position on GAP products are

9. AJ Hamedian holds the Chapter

5. Todd Elliott holds what position in the WSIADA?

President position for what Chapter?

a. Exempt

a. Executive Director

a. North Sound

b. Not Exempt

b. Class Instructor

b. Spokane

c. Janitor 2. Dealer Investigators will be available at

d. All of the Above

the Spring Chapter Meetings in 2018

e. None of the Above

a. True b. False

b. False

that are important in listening? a. Open-Ended Questions b. Closed-Ended Questions c. Power Questions d. None of the Above

d. South Sound

6. Closed-Ended Questions can often turn a conversation into an interrogation a. True

3. What are the three types of questions

c. North Cascade

7. WSDOT is launching a new system for filing state taxes on what date?

10. MLA (Military Lending Act) was changed, unexpectantly, on December 14, 2017 a. True b. False

a. March 19, 2018

11. 66% of dealers responded to test

b. March 7, 2018

leads through Facebook Messenger

c. April 1, 2018

a. True

d. March 30, 2018

b. False

e. All of the Above the Front Row | wsiada.com | March-April 2018 |

21

READ AND RESPOND | continued 12. Last year Education Fairs were a great

15. Open-Ended questions cause

success. Who will be returning for 2018?

customer to relax and expand upon their

a. Department of Licensing

answers

b. Attorney General’s office

a. True

c. Department of Revenue

b. False

d. All of the above e. None of the above 13. The mobile app is now available through the app store on your smart phone.

16. Facebook Marketplace has potential to increase dealer sales with after hour leads? a. True b. False

14. Who released the Top 10 Most Common Vehicle Repairs List? a. Safety Council b. Car Care Council c. North American Council of Automotive Teachers

a. True b. False 19. Power Questions are considered open-ended questions on steroids. Why is that? a. Can naturally lead to follow-up questions b. Helps to engage the mind of the customer at a high level

17. What is the new feature in the Front

c. Creates a picture in the customers mind to motivate them to buy

Row that will benefit dealers wanting to

d. All of the above

retire or lease property?

e. None of the above

a. True b. False

18. 45% of all consumers end up purchasing the vehicle they inquired about.

a. Mobile App b. Education Fairs c. Classifieds d. Smart Social

20. WSIADA offers both a monthly and annual membership option? a. True b. False

WSIADA STAFF NEWS Stella Gayle Jan 31 2018 20 1/2” long 8lbs 4oz

Stella joined the Siepert family, Ashlie, Chris and Sophia at 12:54 AM on January 31. Of course, babies NEVER arrive at noon or 2 o’clock in the afternoon!! It will be a few years before Stella is ready to join the WSIADA team, but we do expect to have Ashlie back in a few weeks.

22 | the Front Row | wsiada.com | March-April 2018

Washington State Independent Auto Dealers Association

Membership Enrollment

YES!

It is important to be to be recognized as a professional!

Enclosed are my annual dues to ensure that my business has all the advantages WSIADA/ NIADA provides to put me at the forefront of my profession.

By completing this form, I am consenting to and giving WSIADA/NIADA, its affiliates and subsidiaries, my permission to (until I give written notice to discontinue) contact me and provide information to me at the mailing and e-mailing addresses, telephone and fax numbers I have provided.

I hereby certify that (I am/we are) eligible for membership in WSIADA.

SIGN Member Name Business Name

Dealer #

Address City

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Website:

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Membership Category: $450 Dealer Member: [a] limited to any sole proprietorship, partnership or corporation which is engaged in buying and selling motor vehicles as a principal part of its business; and [b] must hold a vehicle dealer’s license issued by the Washington State Department of Licensing.

Business Name

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DISCLAIMER: Monthly installments will be charged on the 1st of every month. Receipts will be emailed unless otherwise requested.

This agreement will continue until/unless the card holder revokes consent in writing. If provided card is declined, WSIADA may continue to attempt to process payment(s) or request updated payment information. If payment is declined and no card update issued, dealer will be invoiced for remaining balance and access to WSIADA services will be suspended until balance is paid in full.

DELIVER

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EMAIL(as a scanned attachment) staff@wsiada.com the Front Row | wsiada.com | March-April 2018 |

23

JUST FOR FUN

Email your industry jokes, cartoons or funny photos to staff@wsiada.com

CONTINUED FROM PAGE 13

by the MLA through the Department of Defense database (https://mla. dmdc.osd.mil/mla/#/home) or some other reliable program prior to finalizing any financed transaction.

Once again, the MLA covers not only active military members, but also many of their dependents.

The legal issues facing dealers are further complicated by the fact that military personnel are a protected class under Washington’s antidiscrimination laws. This creates additional legal issues for Washington dealers. For this reason, the ultimate safe approach is to discontinue offering GAP in Washington in all finance transactions. Given Hudson Cook’s recent analysis, however, we believe dealers are effectively unable to obtain financing for MLAcovered members when GAP is included in the transaction. Because of this reality, it is the inability to obtain financing (because of the

MLA and lender requirements), and not the dealer’s own act, that is ultimately preventing dealers from offering GAP to customers covered by the MLA.

from each customer necessary to determine whether the customer is covered by the MLA, but the dealership should not copy any military identification.

Please be aware that this remains a fluid issue. Dealer attorneys and association representatives are attempting to address this issue in Washington, D.C. Dealers should consult with their legal counsel and follow industry updates closely, as this information is likely to change, either because of a change in the law or because additional agencies or legal authorities provide additional guidance or comment on this very sensitive and complicated issue.

This article is intended to summary current issues facing motor vehicle dealers and is not intended as legal, accounting, or other professional advice. Dealers should consult with their own legal counsel regarding an appropriate strategy based on the specific information applicable to each dealership and the advice of the dealership’s legal counsel.

As a final note, dealers need to remember that federal law prohibits the photocopying of any military identification. Title 18, US Code Part I, Chapter 33, Section 701. Therefore, dealers should obtain information

24 | the Front Row | wsiada.com | January-February 2018

Brian King and Michael Oates are attorneys with Davies Pearson, P.C. in Tacoma, Washington.

For more information visit www.dpearson.com.

the Front Row | wsiada.com | January-February 2018 |

25

WASHINGTON STATE INDEPENDENT AUTO DEALERS ASSOCIATION 707 Auburn Way South Auburn, WA 98002 WSIADA.COM

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