the Front Row - June 2023

DEALER ALERT: Washington Department of Licensing, Dealer Temporary Permits

LEGISLATIVE UPDATES

The biennium 2023 Legislative session came to a close in April

How to Keep Your Used Vehicle Profit Margins High PLUS 4 Tips to Reduce Staff Turnover at Your Dealership

Image: Doubletree by Hilton, Spokane, WA

THE FRONT ROW

The official magazine of the WASHINGTON STATE INDEPENDENT AUTO DEALERS ASSOCIATION WSIADA.COM

707 Auburn Way South | Auburn, WA 98002 T: 253-735-0267 | F: 253-804-0844 staff@wsiada.com | WSIADA.COM

EXECUTIVE BOARD

Wasim Azzam, Board President All Right Auto Sales | President@wsiada.com

Badie Darwazeh, Board Vice-President Seattle Auto Haus | VPresident@wsiada.com

J.T. Curry, Board Secretary Motors Northwest | Secretary@wsiada.com

Emil Scarsella, Board Treasurer

Town & Country Auto Sales | Treasurer@wsiada.com

CHAPTER PRESIDENTS

Tony Bonnallie – North Cascade Mission Motors | NoCascade@wsiada.com

Victor Perez – North Sound

Route527 Motorsports | NoSound@wsiada.com

David Magarrell – South Sound Auto Sales Consultants, LLC | SoSound@wsiada.com

Rachel Frankel - Vancouver Top Auto Brokers | Vancouver@wsiada.com

Vacant Position – Yakima Yakima@wsiada.com

Vacant Position – Tri-Cities Tri-Cities@wsiada.com

Vacant Position – Spokane Spokane@wsiada.com

AT-LARGE BOARD

Randy Fletcher, Board President (Emeritus)

In-N-Out Auto Sales

Ken Williamson, Board President (Emeritus) John’s Auto Mart, LLC

WSIADA STAFF

Rick Olson, Director of Operations

Mila Froman, Membership Manager

Mary Walton, Accountant

Lane Schulz, Retail Associate

PRODUCTION EDITOR Professional Mojo

Copyright 2023 | WSIADA

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3 LEGISLATIVE UPDATES

The biennium 2023 Legislative session for Washington State came to a close on April 23. This was the first legislative session to convene in all-person since the beginning of the pandemic lockdowns and restrictions shortly after the adjournment of the 2020 legislative session.

6 DEALER ALERT FROM WA DEPARTMENT OF LICENSING: DEALER TEMPORARY PERMITS

The existing e-permitting system will begin issuing the new temporary license plates on June 29. There is no workaround!

8 8 STEPS TO IMPROVE CUSTOMER SATISFACTION AT YOUR DEALERSHIP Great communication is about building relationships with your customers, beyond the sales relationship.

10 LAW FIRM SEEKS CONGRESSIONAL INQUIRY OVER HYUNDAI, KIA THEFTS

A California law firm representing some Hyundai and Kia owners in lawsuits against the carmakers over thefts is urging Congress to take action on the issue.

12 4 TIPS TO REDUCE STAFF TURNOVER AT YOUR DEALERSHIP

By leveraging technology, prioritizing benefits, and creating an enjoyable culture, you can build a stronger, more successful company that staff will want to stay with.

15 WHY CUSTOMERS PAY LATE, HOW TO GET ON-TIME PAYMENTS

In the auto industry, especially for buy-here, pay-here dealerships, finding options to get more consumers to pay on time is critical.

16 HOW TO KEEP YOUR USED VEHICLE PROFIT MARGINS

HIGH

Strap in because the rest of 2023 could be a bumpy ride for auto dealers. Several factors are converging to create a perfect storm of conditions that threaten used vehicle profit margins.

19 NIADA PARTNERS WITH SECURECLOSE

18 SERVICE PROVIDER DIRECTORY

20 READ & RESPOND QUIZ

EDUCATION FAIR EAST: GET THE SCOOP ON SPEAKERS & EARLY BIRD SAVINGS!

THE BIENNIUM 2023 LEGISLATIVE SESSION FOR WASHINGTON STATE CAME TO A CLOSE ON APRIL 23. This was the first legislative session to convene in all-person since the beginning of the pandemic lockdowns and restrictions shortly after the adjournment of the 2020 legislative session.

What does biennium mean? Legislative sessions beginning every odd-numbered year and coinciding with the two-year election cycle is known as a biennium. This year’s regular session was 105 days with over 1500 bills or resolutions pre-filed December 4, 2022.

Of those, only 484 bills (23%) advanced to their respective Senate or House of Representatives and sent to the Governor for signature.

This year, the independent dealers in Washington state were made aware of a bill created by the Attorney General of Washington known as the Used Motor Vehicles Express Warranties Act. It was first in the House of Representatives (HB 1184) and a version in the Senate (SB 5610). These bills would have made it mandatory for dealerships to provide service contracts to their customers.

Customers would not be able to waive this under the bill and it also gave the customers an ability to return a vehicle if a dealership

LEGISLATIVE UPDATE

was unable to repair it after three attempts.

The Association and its members stepped up, with the assistance of the WSIADA lobbyist team, to ensure these bills did not come to the House or Senate floors for a vote and achieved this goal as the session ended. The Association was successful in stopping these bills. The possibility of either bill returning for the 60-day 2024 legislation is still a reality, but the WSIADA is already planning ahead for this.

Additional bills that were coming through the Legislature this year included:

FAILED

• SB 5326 – Verification of motor vehicle insurance

This bill would have required an online system for the verification of liability insurance for motor vehicles. The bill failed to leave its committee by March 1st.

• HB 1302 – Vehicle report of sale for motor vehicle dealer endorsement

This bill would have required vehicle dealers to file a report of sale on behalf of the owner trade in, selling or transferring ownership of a vehicle to the dealer. The bill progressed out of the House but failed to pass the Senate Committee for Transportation and had to return to the House Rules Committee for a third reading on April 23rd.

PASSED

• SB 5504 – Open motor vehicle safety recalls

This bill would require the Department of Licensing to provide written notice to the owner of a motor vehicle of an open recall applicable to the motor vehicle. This does not alter the liability of any motor vehicle dealer or manufacturer approved to repair an open safety recall. This bill has been delivered to the Governor’s desk for signature.

• HB 1736 – Collection of vehicle odometer readings registration/ renewal

This bill would require the Department of Licensing to collect vehicle odometer readings at the time of registration and renewal. The requirement would create a better accuracy for odometers in preparation for the Pay-Per-Mile (HB 1832) tax of 2.5 cents per mile that will start in July 2026. This bill has been delivered to the Governor’s desk for signature.

The WSIADA and our lobbyist team will be formalizing a plan for the next legislative session during the summer. Additionally, our lobbyists will be speaking at the Education Fairs this year to educate dealers about the legislative process. n

DIRECTOR OF OPERATIONS MESSAGE

Events that you should not miss!

RICK OLSON, DIRECTOR OF OPERATIONS

Can you believe it’s quickly reaching the middle of 2023? The WSIADA Education Fairs are not too far away. After trying our old location in Lake Chelan last year, we’re returning to familiar settings in Spokane and Seattle for 2023.

Although Lake Chelan is a great venue, several factors make the event difficult to attend for many, such as the travel distance, time of year, length of the convention, etc. We are planning to go back for the Association’s 75th Anniversary in 2028 for multiple days, so put that in your calendars since we are going to ensure it is a familyoriented event around the meetings.

Let’s talk about this year’s event!

Did you know the Association has had a lobbyist since 1981 as a membership benefit? The WSIADA lobbyist team will be speaking on recent legislation, how important it is having a lobbyist as part of your membership, and what to expect from the next year’s legislation.

WSIADA Welcomes New Staff as Retail Associate

WSIADA would like to welcome aboard its newest staff member. Lane Schluz joined the team as the Retail Associate in late April with a focus on our retail sales, both store and online side of the Association. Lane comes with an events background, which will be helpful with Education Fairs coming up this summer in Spokane and Seattle. We look forward to introducing you soon!

Every year we invite state agency representatives from the Department of Licensing, the Department of Revenue, and the Attorney General’s office to speak - in addition to auto industry-related speakers.

Three speakers from the Department of Licensing will join us for topics appealing to East and West. If you have a specific question, you can ask it during the registration process. We know there will be burning questions about the new Temp Permit Paper, DRIVES access, and dealer investigators.

At the time of this article, we haven’t been able to confirm the Attorney General’s office at the East meeting due to scheduling conflicts. They are confirmed for the West in September, however, to discuss topics on the consumer complaints process and provide fresher topics than in past years.

F&I has been a consistently requested topic by attendees, and we have a guest speaker at each location to help maximize the sales potential at your dealership. Service plans,

FTC Safeguards and various topics will be discussed at each location this year.

Spokane will host the Education Fair East on July 18th at the Hilton Doubletree Convention Center in downtown Spokane. We scheduled this event the same week as the MAG Auctions Rock-N-Roll Sale to bring as many dealers to both events as possible.

Seattle will host the Education Fair West on September 21st at the Hilton Doubletree across from SeaTac airport.

Registration is live on our website. Each registered individual will receive a WSIADA goodie bag with several items just for attending. Any staff member can attend these events, not specifically the owners. Early bird pricing is still be available for the Seattle event at the time of this article.

We look forward to seeing you there!

Keep an eye out for us rolling up to your dealership soon!

WSIADA TITLE WORKSHOP

$125 MEMBER // $175 NON-MEMBER

This Workshop is designed to give dealers an in-depth understanding of the business practices, state/federal requirements, and forms needed to complete a transaction. This course offers 3 hours toward Continuing Education requirements and allows attendees to ask the instructor individual and dealership-specific questions. Any employee of a dealership may take this course. Continuing Education hours are issued to the dealership, not to individuals attending.

The curriculum for this workshop includes, but is not limited to:

• How to transfer a title properly in Washington State

• Avoiding common dealer errors including how to detect and avoid fraud.

• How to use e-Permitting, Contracted Plate Search, and other state systems accurately.

• Proper procedures on processing Consignments, Trade-In’s and Private purchases.

• Tips on how to avoid costly penalties with efficiency and organization skills.

You may register and pay online. You’ll receive an email confirmation after your registration is complete. Registration is available until 2:00PM the day the class. In-person registrations on the day of the class are not accepted.

DEALER ALERT WASHINGTON DEPARTMENT OF LICENSING: DEALER TEMPORARY PERMITS

IMPORTANT DATES

• June 29, 2023 – Temporary license plates will replace temporary permits generated in the e-permitting system.

• July 14, 2023 – Last day to issue existing paper dealer temporary permits.

• July 15, 2023 – Last day to assign paper permits to a vehicle transaction.

• September 1, 2023 – All dealer temporary permits remaining on a vehicle are considered invalid. (Hard Temps)

The existing e-permitting system will begin issuing the new temporary license plates on June 29, 2023.  There is no workaround, manual process, or alternate method to generate temporary permits in the e-permitting system on or after this date.  Any unused paper dealer temporary permits in a dealer’s possession may be issued for valid purposes until 11:59pm PST on July 14, 2023, and are required to be registered in the system within 24 hours.  Paper dealer temporary permits still affixed to a vehicle on September 1, 2023, will be deemed invalid.

This statewide change is a new process for all vehicle dealers, county auditors and sub-agents.  Required customer fees remain the same.

TEMPORARY LICENSE PLATE REQUIREMENTS AND PROCESS CHANGES

Temporary license plates must be printed on durable paper (remain unaltered in field conditions for a minimum of

four months).

Customers will receive up to two temporary license plates –one for the front and one for the back, dependent on standard vehicle plating requirements – and are placed outside the vehicle where permanent plates will be located.  Current samples of the design of these plates are attached, subject to minor changes before launch.

To replace the previous paper dealer temporary permits (that were filled out by hand), a new “Unassigned temporary license plate” will be available through e-permitting.  These plates are intended to be generated and printed in advance and must be filled out when placed on a vehicle.  Unassigned temporary license plates must be registered with DOL within 24 hours of issuance to a vehicle.  Unassigned temporary license plates are to be printed on the same durable paper to meet the statute requirements.

ADDITIONAL INFORMATION

Printing new temporary license plates will be through the e-permitting system, as it is today.

• Unused existing e-permitting credits will be retained in the dealer’s account and may be used for the new temporary license plate beginning June 29, 2023.

• Unassigned temporary license plates will also be made available to purchase and print through e-permitting, and do not require a

vehicle transaction to obtain.

• Similar to dealer license plates, unassigned temporary license plates will be available in limited quantities.  Information on how to request a higher limit will be provided at a later date.

• New online self-service purchasing of e-permitting credit and unassigned temporary license plates will be available at launch inside the e-permitting system. Please note: this is a new feature being added –you will still be able to purchase and add credit to e-permitting at your local licensing office, but using online self-service is preferred.

• DOL does not currently recommend any specific paper or ink supplier or product.

PAPER AND INK REQUIREMENTS

Paper should be manufactured and sold specifically for the purpose of temporary license plates.

• 8.5” x 11” size (Full-size plate will be 6” x 11” with a 2.5” x 11” tear-off containing additional information.)

• White stock (matte finish preferred, but not required.)

• Prior to printing, sheets should be blank, no security features required.

• Ink should be indelible when printed on the temporary license plate paper stock and of a quality to withstand prolonged exposure to weather.

In a desire to be more accessible to dealers and maintain a footing in the ever expanding digital age, WSIADA has its own mobile app for dealerships to utilize features that the Association has available. The app is for members and nonmembers. It’s free and easily downloadable through your smartphone app store. Options that are available:

• Dealer Alerts

• Events Calendar

• Online Store

• Smart Dealer Auction Discounts

• the Front Row Magazine

• Dealer Auction Schedules

• Sponsor Contact Information

• and much, much more!

8 STEPS TO IMPROVE

Customer Satisfaction at Your Dealership

By Bill Springer, DriveSure

Achieving high levels of customer satisfaction at a dealership can be challenging. Today’s consumers have high expectations and demand a seamless and enjoyable experience when purchasing or servicing a vehicle. And unhappy customers are more likely to spread negative word-of-mouth, leading to a decrease in business and overall profitability.

Higher customer satisfaction helps boost retention, and boosting retention by only 5% can increase your profits by up to 95%.

So how can you improve the customer satisfaction levels at your dealership?

1INTRODUCE A HYBRID SALES + F&I STAFF MODEL

A Hybrid Sales/F&I Staff Model involves training sales staff to handle both sales and finance and insurance (F&I) responsibilities.

This can help lift customer satisfaction by reducing the number of handoffs and allowing customers to discuss F&I products at the beginning of the process, rather than being passed from person to person (which happens with the typical sales-to-F&I handoff).

In fact, a Honda dealership in Anchorage found that implementing a hybrid role led to a 90 percent drop in chargebacks (the money a dealership must repay when customers refinance loans or cancel F&I products).

2ADOPT CUSTOMER SATISFACTION ROADMAPS OR CHECKLISTS

One way to improve customer satisfaction is to create a customer experience roadmap that focuses on customer satisfaction and care, rather than just sales volume.

Salespeople can use a checklist to ensure a smooth delivery, with items like showing the customer all key tech features or ensuring the BEV or hybrid vehicles are charged when they leave the lot. These can be VIN-specific lists that change depending on the vehicle.

Have the customer sign off on the list to confirm everything has been covered. Some dealerships use tablets to make this whole process easier.

3IMPROVE THE WAITING EXPERIENCE

Many dealerships have an uncomfortable waiting experience, whether it’s in the showroom or the service department. This can lead to agitated and unhappy customers, lowering their overall satisfaction with the dealership.

When customers are unhappy with their waiting experience, they may feel frustrated or even resentful towards the dealership, leading to negative word-ofmouth and a decrease in customer loyalty.

To improve customer satisfaction, dealerships can focus on these main areas:

A more comfortable waiting experience

Find ways to make the waiting experience more comfortable, such as offering better entertainment, food and beverages, more comfortable chairs, or other amenities.

Eliminating the wait

Another option is to eliminate waiting entirely by offering to pick up or drop off customers when they come in for service. Rideshare is becoming increasingly popular as a dealership amenity as well.

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BETTER COMMUNICATION AND MANAGING EXPECTATIONS

You can also reduce some of their frustration by communicating expectations as early as possible in the process and being as accurate as possible when telling them how long they can expect to wait.

Great communication is about building relationships with your customers, beyond the sales relationship. If something changes, explain why and let them know how it affects their wait time. You may need to take steps to right the situation if the wait time is getting unrealistic (such as with a discount).

Speaking of communication…

5IMPROVE YOUR COMMUNICATION CHANNELS WITH CUSTOMERS

Great communication is the low hanging fruit of customer satisfaction. Effective communication with customers is key for building long-term relationships and boosting retention at your dealership.

Here are a few channels to consider improving or adding:

• Direct mail: personalized direct mail pieces can remind customers about upcoming service appointments or offer special deals.

• Text messages: the majority of customers prefer to receive updates about their service via text message.

• Email reminders: sending personalized emails to customers can congratulate them on their new car purchase or provide helpful tips and information,

building the relationship beyond promoting services.

• Clear website: a well-organized and informative website can make it easy for customers to find information about services, creating a positive experience.

7CREATE A CUSTOMER FEEDBACK LOOP

Creating a customer feedback loop is an important step in continually gathering insights and improving the overall customer experience at your dealership.

• In-person communication: ensure that sales and service teams have clear communication processes in place, including follow-up phone calls and thank you notes.

Post-sale communication in particular is important, as it’s often overlooked as a moment for improving satisfaction.

6IMPROVE THE POST-SALE OR POST-SERVICE EXPERIENCE

While upselling is important for revenue, make sure it doesn’t come before providing quality service to customers. After a customer has purchased a car or received service at your dealership, continue to improve the process by providing a positive post-sale or post-service experience.

Some ways to do this include:

• Sending a personalized thank you after their purchase

• Showing them how to set up an appointment for future services

• Scheduling their first service appointment at the time of vehicle delivery

• Giving customers a specific contact in your service department

For post-service, have your service advisors explain the work that was done, why it was necessary, and what they might recommend during the next visit. The post-sale and post-service interactions are pivotal retention moments that shouldn’t be treated lightly.

This can be done through surveys or casual conversations with customers, but it’s important to remember to respond and take meaningful action based on the feedback received.

Without a response or action, the feedback loop fails to be effective. By constantly receiving and responding to customer feedback, your dealership can keep its finger on the pulse of your customer base and make ongoing improvements to the customer experience.

8PROVIDE UNIQUE, VALUEADDED INCENTIVES

One of the quickest ways to boost customer satisfaction is by offering new amenities and incentives that show you understand their needs and expectations. A single amenity may not win over hordes of new customers but continuing to offer new and unique benefits can help establish long-term relationships with existing customers and keep them coming back.

One way to do this is by using a service like DriveSure, which empowers new-car dealerships to provide a suite of renewable benefits with every qualifying service visit. These benefits (like dealer-loyal roadside assistance, and road hazard tire protection) set your dealership apart from the competition and give your customers a compelling reason to return to you more often for service. n

Great communication is about building relationships with your customers, beyond the sales relationship. If something changes, explain why and let them know how it affects their wait time. You may need to take steps to right the situation if the wait time is getting unrealistic (such as with a discount).

Law Firm Seeks Congressional Inquiry Over Hyundai, Kia Thefts

By ADT Staff

Law firm said past automaker testimony before Congress resulted in action on vehicle safety issues.

A California law firm representing some Hyundai and Kia owners in lawsuits against the carmakers over thefts is urging Congress to take action on the issue.

It’s the latest development in a series of pushbacks against the South Korean brands to more aggressively address the thefts of models without immobilizing antitheft technology as standard.

Multiple major U.S. cities have sued the automakers, about two dozen attorneys

general have urged them to take stronger action about the thefts, and 18 states have asked a federal regulator to recall the 2011to 2022 models in question.

Now MLG Attorneys at Law has written a letter to Washington Sen. Maria Cantwell to take up the matter as chairwoman of the Committee on Commerce, Science and Transportation. The firm said in a statement that the committee has previously brought automakers to testify before Congress, resulting in action on vehicle safety issues.

MLG said it’s leading a class-action lawsuit against Hyundai and Kia over the thefts. It said it’s now representing a growing list of personal-injury cases related to the thefts.

The carmakers have expedited measures intended to prevent thefts and help vehicle owners get their models insured, including speeding up a software update and working with insurer AAA to insure affected models. But the increasingly loud pushback from various corners maintains they’re not doing enough. n

SWOOPER FLAGS

Swooper Flags may vary from 10 to 21 feet in height and are made from flag material. They typically reply on wind and are an excellent way to give your dealership or more visibility! Some have pole kit designs, while others use a water base. Click the link below to learn more and shop our varity of products.

The WSIADA WEBSTORE offers a variety of popular products, supplies, and forms that dealers find most useful at discounted prices. Members get 15% off on most products. Save yourself time by ordering through the online store and have it picked up from one of our locations. Be sure to check the store and buy from WSIADA!

4 Tips to Reduce Staff Turnover at Your Dealership

By Bill Springer, DriveSure

Employee morale and retention are critical issues in new-car dealerships. High turnover not only damages business performance but also results in significant financial costs. To mitigate these problems, dealership owners and managers must take steps to keep their teams engaged, motivated, and satisfied.

In a previous article, we discussed how to keep your team sharp and satisfied, where we explained how dealerships improve morale by:

1. Offering platform-specific onboarding and training

2. Training employees in soft skills

3. Hosting internal workshops led by team members

4. Creating a certification program to gamify employee development

5. Providing access to online learning programs

With that as a starting point, let’s explore what else you can do to retain staff —

especially in the midst of current dealership staff shortages.

LEVERAGE TECHNOLOGY FOR EMPLOYEE SUPPORT AND ENGAGEMENT

Employee satisfaction comes partly from making work less tedious. Whether that’s improving service lane efficiency, its capacity, or making administrative tasks simpler, every step makes a difference. Modern tech offers increasingly helpful solutions to support employees and keep them engaged. Digital assistants, for example, can help alleviate the workload and improve customer experience, leading to happier and more motivated employees.

By leveraging technology, prioritizing benefits, and creating an enjoyable culture, you can build a stronger, more successful company that staff will want to stay with.

By taking over tasks like setting service appointments and answering store hour questions, digital assistants allow employees to focus on more customer-oriented tasks — rather than getting bogged down by the busywork that often leads to burnout.

Moreover, the use of digital assistants creates a better working environment and improves job satisfaction by providing additional support. Employees no longer need to worry about issues like missing inbound calls while making outbound calls, since digital assistants can act as a safety net.

Similarly, providing a digital retailing option can help sales staff spend less time on each sale they make, and wasting less time on customers who aren’t actually ready to buy.

By incorporating technology into your dealership’s operations, you can create a more engaging, supportive, and efficient workplace. To really lay the groundwork for great satisfaction though, it helps to have great benefits and an enjoyable work environment.

PRIORITIZE BENEFITS THAT EMPLOYEES CARE ABOUT

A strong benefits package is huge for employee engagement and retention. Offering comprehensive benefits such as good healthcare coverage, retirement programs, flexible hours, and continuous training can make a significant difference in your employees’ overall satisfaction.

For millennials in particular (who make up over 60% of dealership hires), a manageable work-life balance and competitive compensation are more enticing than traditional performancebased pay structures. With the current labor shortages, failing to offer an attractive deal here risks losing mechanics to other dealers and competitors.

Of course, sometimes not everything will be in your budget, so you need to ask yourself: what benefits can I provide my team that will set my dealership apart from

competitors? You may want to discuss this with your staff and see what would make the biggest difference for them —the biggest benefits aren’t always financial.

By adapting to the changing times and offering flexibility, easy schedule alterations, and even telecommuting (at least for some roles, such as BDC employees), you can demonstrate your commitment to employees’ well-being.

CREATE AN ENJOYABLE WORK ENVIRONMENT

Empathetic leadership and an inclusive culture play a crucial role in employee engagement. There are countless ways to do this, but here are some places to start:

• Cultivate an open and transparent communication culture: encourage open dialogue and transparent communication by maintaining an open-door policy, holding regular meetings where staff can express concerns, and inviting feedback from employees (anonymous or otherwise). This approach fosters trust and collaboration within your team and makes employees feel valued. Address any workplace issues promptly and ensure that employees feel heard and supported.

• Recognize and celebrate successes: simple recognition for hard work or a job well done can go a long way. Acknowledge and reward individual and team achievements through public recognition, awards, or small tokens of appreciation. Celebrating successes can boost morale and create a sense of unity and pride within your team.

• Provide a clear path forward: nobody wants to feel like they’re stagnating. Providing no-cost training and outlining career progression tracks are essential to employee satisfaction. By supporting technicians and advisers in their growth, you can create a more positive workplace atmosphere, leading to higher retention rates.

• Offer better incentives to those who stay longer: whether someone doesn’t

have much higher they can climb, or you just want to keep high-performing staff around, retention bonuses can be a big help. Sometimes this is a one-off bonus that grows with each additional year, or you may want to consider having preset salary increases that staff can look forward to as they stay at the company longer. Incentives like these should be clearly communicated from the start so they have something to work towards.

Sometimes however, creating an enjoyable work environment is less obvious.

INCREASE CUSTOMER SATISFACTION

Where would you rather work: a dealership that the community loves and trusts, or one with a mixed reputation, where it’s not uncommon for customers to come in with accusatory tones and assumptions that you’re trying to rip them off?

Clearly, the second work environment sounds tense and uncomfortable — not somewhere you’d be excited to show up each day.

From the service team to the sales staff, dealerships have an especially hard time overcoming common stereotypes about their trustworthiness. That’s why we’ve written extensively about improving customer satisfaction at dealerships. Consider some of these tips to make your staff’s customer interactions more pleasant:

• Be proactive about addressing common service complaints

• Adopt customer satisfaction roadmaps or checklists, with a customer feedback loop to address common issues

• Improve your communication channels with customers to increase transparency, and improve the postsale or post-service experience

• Offer prepaid maintenance plans in the service lane, so customers get discounts, and service staff can identify problems early, before they become expensive. n

Why customers pay late, how to get on-time payments

Late payments from customers impact many facets of a business, restricting cash flow, taking up resources and costing other opportunities.

In the auto industry, especially for buyhere, pay-here dealerships, finding options to get more consumers to pay on time is critical.

During a recent webinar held by the National Independent Automobile Dealers Association, Bruce Gaskill, Senior Director of Integration Partnerships at PayNearMe presented research on why customers pay late and some solutions to increasing ontime payments.

“A late payment, even a couple days late, can, for a smaller business, impact payroll and daily operating expenses,” Gaskill said.

“Anything you can do to keep your best customers on time has many pluses.”

PayNearMe polled 2,600 consumers, asking 30 questions about paying bills. The survey hit across different demographics to provide a representation of the U.S. population. Of the respondents, 51 percent said they were late on at least one recurring payment with a 12-month period. Thirty-one percent said they were late on up to three payments in that span and 18 percent were late on four to 10 bills.

“It’s not specific to non-prime lenders,” Gaskill said. Among individuals 60 and older, 92 percent had three or fewer late payments. In contrast, those 44 and younger were four times more likely to pay late.

According to the research, a lack of funds drives consumers to pay late, but it isn’t the primary reason for missing payments. For those 45 to 60, procrastination caused 33 percent to pay late. In those 30 to 44, approximately 30 percent reported overlooking physical mail and emails.

Of respondents under 30, 11 percent were late on every payments and 30 percent late every other month.

The younger generations were also not likely to use traditional banking methods,

30 percent using digital backs for primary accounts. Business Insider reported more than 50 percent of these age groups using digital wallets and more than 75 percent using digital payment apps.

Looking at 140,000 transactions totaling $42 million at 40 BHPH dealerships, 79 percent of payment transactions were completed with debit cards, 13 percent with cash, 7 percent with digital wallets and 4.3 percent with cash apps.

Gaskill suggests accepting as many forms of payment as possible.

“If you are not accepting digital wallet currency, they do have money they can pay you but that money is trapped in these tender types you are unable to accept,”

The research shows younger people are more apt to set up autopay. Another suggested solution to getting an increase in on-time payments is using smart links in texts. The links take the customer to a portal where a card is saved and allows them to make a payment in less than a

“There’s a 90 percent reduction in inbound calls and more on-time payments,” Gaskill said.

“You want to remove as much friction as possible…A gentle reminder and frictionless customer experience are the two things that eliminate procrastination.”

“The younger generation scores themselves lower on average when it comes to paying their bills on time,” Gaskill said.

Strap in because the rest of 2023 could be a bumpy ride for auto dealers. Several factors are converging to create a perfect storm of conditions that threaten used vehicle profit margins, including rising interest rates, waning consumer confidence, a potential recession, falling retail prices and a tight supply of three- to four-year-old vehicles due to fewer leased vehicles hitting the markets.

However, there is some good news. Unemployment remains low and new vehicle prices remain high, which means that plenty of car shoppers will qualify for financing and will opt for used vehicles. Demand should remain stable throughout the year.

Regardless of market conditions, 75 percent of auto dealers are placing a greater emphasis on their used-vehicle

How to Keep Your Used Vehicle Profit Margins High

By Josh DeYoung, Vice President of Sales, Velocity Automotive

business this year, according to an Automotive News survey conducted in January 2023. Top strategies are accepting less gross profit per used vehicle sold and reducing retail prices and profit targets.

While a decline in used-vehicle gross profit might be expected, it’s not inevitable for all dealers. Focusing on the following strategies can help to keep your profit margins higher than the market average.

SMART ACQUISITION STRATEGY

Being smart about how much you pay for inventory is essential. Pay too much, and the potential for profit sinks; offer too little, and you send the trade somewhere else. Most dealers rely on inventory management software as a guide for how much to pay for used vehicles. However, this

software alone does not tell the whole story. Market prices are aggregate and do not include every detail about what makes one piece of inventory more valuable than another. With so much technology today, sometimes it isn’t easy to properly value one car from the next.

Working out the true value of a vehicle requires the use of the original factory window sticker data. Which features and packages are included on a particular vehicle? Does it have upgraded technology? Managers have long used this data to assess vehicle value, but historically this data has been challenging to obtain or access, especially at an auction.

Fortunately, it is now possible to access window sticker data from your inventory management software app on your smartphone. This eliminates the need to log in to another system, download PDFs from the internet or call staff from remote locations. So, managers can easily access window stickers to calculate offers rapidly and confidently so that you can obtain more vehicles at the right price, setting you up to make a healthy margin.

IMPROVE RECONDITIONING

According to J.D. Power, the average number of days it takes for used vehicles to sell at franchise dealerships is 42 days. Some factors affecting this time lag, such as transit times, are largely out of the dealer’s control.

The recon process has a huge impact on how long a vehicle is at the dealership, and this process is firmly within the dealer’s control. Many dealers don’t track recon as closely, or their methods are outdated and inaccurate. I recently worked with a dealership that took up to 21 days to get their vehicles fully retail ready. This causes great cost and loss. Ideally, once a vehicle is received at the dealership, the recon process should take no longer than five to seven days.

Digitizing the process and integrating recon information with your CRM is an effective fix for this problem because you can’t fix what you can’t measure, and you can’t measure what you can’t see. Visibility from within the existing systems that your staff uses makes it easier for managers to hold service staff accountable for deadlines.

Additionally, the CRM is where salespeople, BDC agents and sales managers live for a good part of their day. Providing insight into the recon process from within the CRM allows your sales team to see which vehicles have been received and where they are in the recon process. Keeping salespeople in the recon loop further helps accelerate the sales process because they can estimate when a vehicle will be ready for retail and set appointments with interested customers.

MERCHANDISE WITH TRANSPARENCY

Consumers want to complete more of the car-buying process at home, which means they want more information upfront to help make a decision. According to the Capital One 2023 Car Buying Outlook survey, only 21 percent of consumers believe the car buying process is very or fully transparent, versus 68 percent of dealership principals and employees. Dealers need to close this gap. And you do this through transparency and making the information consumers require easily available to make a buying decision.

The more data you provide, the more car shoppers will trust you, and the more sales you will make. If they have to surf the internet to find information about your car, they will soon land on your competitor’s website. You must captivate and engage today’s shoppers – or – risk losing the deal. You don’t have to reveal how much you paid for a vehicle, but being transparent about dealer add-ons, interest rates and other fees helps alleviate typical customer obstacles to buying.

Additionally, try automating touchpoints with consumers. For example, what is the automated lead response when you receive a lead? Instead of telling a car shopper they have to wait and talk to a salesperson, set up an automated response to include a complete digital portfolio of their vehicle of interest; this includes window sticker data, service recon records, CarFax, Google reviews of your dealership, links to value proposition videos, and other information that a car shopper can’t get from the vehicle display page (VDP). Open rates on these automated emails are as high as 70 percent.

Another automation that increases customer engagement is price change alerts. When a customer record is associated with a vehicle of interest, and there are price changes on that vehicle, an email is automatically sent to the customer, alerting them of a price change. Salespeople have too much going on to remember to do these little things, and automation is a great way to keep customers engaged.

While most dealers are prepared to accept less gross profit per used vehicle sold, it doesn’t mean that your dealership has to. Fight to keep every dollar of gross, using technology to streamline your acquisition, recon and merchandising strategies. n

Josh DeYoung currently serves as vice president of sales at Velocity Automotive. Josh deeply understands industry trends, dealer operations, customer preferences and competitor activity. He is results-driven with a proven track record in leading high-performing sales teams.

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 & Tax Services

CLA Connect (509) 664-9630 claconnect.com

RH2 | Rekdal Hopkins Howard (425) 658-1400 rh2cpas.com

Auctions

ACV Auctions (800) 553-4070 acvauctions.com

Adesa Portland (503) 492-9200 adesa.com/portland

Adesa Seattle (253) 735-1600 adesa.com/seattle

Copart Auto Auction (253) 847-8300 copart.com

CTM Unlimited Auctions (877) 396-5808 ctmunlimitedauction.com

Ehli Auctions (253) 572-0990 ehliauctions.com

Insurance Auto Auction (IAA) Seattle (206) 658-6900

iaai.com

Insurance Auto Auction (IAA) Spokane (509) 891-2388

iaai.com

Kaman Auctions (425) 640-5111 kamanauctions.com

MAG Auctions Spokane (509) 244-4500 magauctions.com/daanw

Learn more on inside front cover

MAG Auctions Seattle (253) 737-2200 magauctions.com/daasea

Learn more on inside front cover

Manheim Portland (503) 286-3000 manheim.com

Manheim Seattle (206) 762-1600 manheim.com

Learn more on inside back cover

Yarbro Auctioneers (509) 765-6869 yarbro.com

Benefits & Health Insurance Washington Retail Association (360) 943-9198 waretailservices.com

Bonds and Commercial Insurance Farmers - Karen Dunn Insurance Agency (253) 964-7070

business.farmers.com/karendunn

Shepard & Shepard Insurance Solutions (855) 396-0488

shepquote.com

Learn more on page 14

Dealer Management Systems

Carousel Software (509) 926-8848 carouselsw.com

Digital Marketing Glo3D (416) 575-4448

glo3d.com/washington-glo3d

Finance and Insurance

Dynamic Dealer Services, Inc (208) 818-6931

dynamicdealerservices.com

NW Dealer Financial Services (425) 922-3560

northwestdealerservices.com

Learn more on page 11

OneMain FinancialSouthern WA (360) 726-3263

jason.eidsvik@omf.com

Learn more on page 7

Southwest Dealer Services (206) 571-3068

swds.net

Floor Plan Companies AFC

(253) 333-0300

afcdealer.com

Learn more on page 11

Floorplan Xpress (503) 621-9260

floorplanxpress.com

Legal Services

Davies Pearson, P.C. (253) 620-1500

dpearson.com

Lending Lobel Financial Corp. (503) 653-8000

lobelfinancial.com

Nationwide Northwest (206) 259-0203

nac-loans.com

Reliable Credit Association (253) 240-1818

reliablecredit.com

Satellite Radio SiriusXM (866) 659-3961

siriusxmdealerprograms.com

Learn more on page 7

Risk Management

ATTM Technologies (206) 350-2886

attm-tech.com

Vehicle and Fleet Management

Passtime GPS (866) 335-2611

passtimegps.com

Vehicle Service Plans

GWC Warranty

(425) 233-4705

gwcwarranty.com

TITLE WORKSHOPS

June 28 | 9:00 am - 12:00 pm

July 26 | 9:00 am - 12:00 pm

EDUCATION FAIRS

NIADA partners with SecureClose

SecureClose LLC, which provides an automated avatar loan closing system for a legally compliant, consistently transparent closing every time, along with e-sign and electronic vault, has been selected by the National Independent Automobile Dealers Association as its newest bronze National Corporate Partner.

Amos “Ace” Christian, the founder and CEO of SecureClose, has been a BHPH dealer for 27 years. Based on real-life experiences, Christian developed the SecureClose Avatar to provide a consistent, transparent customer experience, by combining a recorded avatar presentation of legally compliant disclosures, with electronic document presentations, E-Signature, and secure UCC Article 9 compliant cloud vault document storage.

SecureClose LLC is based in Mesa, Ariz., and is managed Christian and President Stan Heintz - both with extensive experience in BHPH operations.

EAST - JULY 18

9:00 am - 5:00 pm

Doubletree by Hilton, Spokane (800) 757-6131

“SecureClose was created to eliminate the ‘he said, she said’ that dealers face with consumers, who then go to regulators and attorneys with complaints,” Christian said. “Just this year, Jan 1 to Mar 31, consumers filed 1,681 complaints with the CFPB related to vehicle loans. That’s an 18.3 percent increase quarter over quarter and a 43.7 percent increase year over year. I want dealers to have proof, when these regulators come knocking, that they were transparent and compliant during their interaction with the consumer.”

WEST SEPT 21

9:00 am - 5:00 pm

Doubletree by Hilton, Seattle (855) 610-8733

*Ask for WSIADA Education Fair Rates

For these and other upcoming events, REGISTER AT WSIADA.COM

With an ever-increasing emphasis on compliance in all facets of BHPH operations, SecureClose Avatar provides dealers with a proven system to ensure every closing is identical. Sales documents, finance contracts and other state-related documents are imported from the dealer’s DMS or CRM software. A recording (video and audio) of the closing is created as an avatar explains each document as if an attorney was in the room with the customer. Once the consumer confirms that they fully understand and agree to the content of each page, they digitally sign each document. Upon completion, the dealer’s “Authoritative Original” Retail Installment Contract and other documents automatically transfer into the SecureClose Vault along with the video recording. The customer also receives copies of the e-signed documents by email and can review the video closing for 10 days.

The SecureClose Vault meets the stringent UCC Article 9 requirements for storage of “Authoritative Original” electronic chattel paper (the signed retail installment contract). The storing of electronic contracts adhering to these requirements is of utmost importance for banks and bulk purchasers to accept and monetize the dealer’s contracts. n

READ & RESPOND: JUNE

The WSIADA READ AND RESPOND quiz allows the reader to earn one hour of continuing education credit toward the dealership’s required annual renewal. Payment options are available for members of the association and non-members also for notification to the Washington State Department of Licensing. A passing grade will be granted for scores of 80% or greater. If a passing grade is not granted, the reader may retake the quiz.

1: Negative word-of-mouth and decreased customer loyalty can make a customer unhappy during which experience at a dealership?

A: Service

B: Waiting

C: Test Drive

D: Buying

2: Dealer temporary permits (AKA Hard Temp) on vehicles will be invalid as of which date?

A: July 1, 2023

B: September 1, 2023

C: July 15, 2023

D: July 14, 2023

3: The original factory sticker data can be the best option to finding the true value of a vehicle?

A: True

B: False

4: Hyundai and Kia are being sued by vehicle owners because of which increased issue not being addressed?

A: Electric vehicles

B: Diesel engine vehicles

C: Catalytic Converter Thefts

D: Anti-theft technology

5: Which bill in the 2023 legislative session would have required independent auto dealers to provide a mandatory warranty if it had passed?

A: SB 5326

B: HB 1302

C: SB 5610

D: HB 1185

6: Self-service purchasing of e-permitting credit will be a new feature for dealers in DRIVES.

A: True

B: False

7: This bill would require which agency to provide written notice to the vehicle owners when an open recall is applicable?

A: Department of Justice

B: Department of Revenue

C: Department of Ecology

D: Department of Licensing

8: Legislative sessions beginning every odd-numbered year and coinciding with a two-year election cycle is known as a Triennium.

A: True

B: False

9: This generation is not likely to use traditional banking for car payments.

A: Younger generation

B: Generation X

C: Generation Y

D: Baby boomers

10: Where is the required placement for the new temp permit paper?

A: Back Window

B: Front Window

C: Front and rear license plate holder

D: Where ever the dealership wants

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.

q I have read and understand the disclaimer above.