SIAMAK LOTFI OREGON QUALITY

NOVEMBER 2014
DEALER
REPRESENTING ALL AUTO, TRUCK, TRAILER, RV AND
INSIDE
•SIX BENEFITS OF SOCIAL SELLING
•WASHINGTON UPDATE
NEWS
POWER SPORT DEALERS OF OREGON
•CONVENTION RECAP
magazine
Congratulations!
SIAMAK LOTFI
OREGON QUALITY
DEALER OF THE YEAR
Oregon is very proud to call you Quality Dealer of the Year!
DALLAS, TEXAS
Permit No. 2079
PAID
PRSRT Standard
U.S. Postage
Visit us at w w w.oiada.com
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ASSOCIATION
NEWS
SIAMAK LOTFI:
OREGON QUALITY DEALER OF THE YEAR
INSIDE
04 CFPB Forcast
06 Generating F&I Profits
08 Six Benefits of Social Selling
10 Washington Update
12 Conversations with Lenders
14 NAAA Pedal Car Auction
16 Joe’s Garage
20 Convention Recap
WHAT’S NEW
Look for Valuable Industry Statistics
FOURTH QUARTER MEMBER
SURVEY RESULTS
Keep your eyes open for results from the
fourth quarter Dealer Member and Business
Confidence Survey, which will be disseminated
mid-November as an addendum to the 2014
Used Car Industry Report. This is a priceless
tool for comparing your stats and sales with
other dealers nationwide. It also serves as a
benchmark for industry data NIADA provides to
regulators, legislators and other entities needing data on the used motor vehicle industry. ADVERTISERS INDEX
Alliance Inspection Mgt....................................13
Ally......................................................................5
Brasher’s Northwest AA....... Inside Back Cover
Brasher’s Portland AA.................... Back Cover
CarMax Auctions..............................................15
DAA Northwest / Seattle....... Inside Front Cover
TrueCar...............................................................7
United Acceptance...........................................11
VAuto...................................................................9
OFFICE
Oregon Independent Auto
Dealers Association 1475 Capitol St. NE
Salem, OR 97301
800-447-0302
CONGRATULATIONS FROM THE ASSOCIATION
Congratulations to Siamak Lotfi, the 2015
Oregon Quality Dealer of the Year!
There have been many changes in Siamak’s
career path. In 1997 he had a contract for towing
cars for the local auctions. In 1999 Siamak
became a wholesaler working with a dealership.
Siamak ventured out and became an Oregon
dealer in 2000 and began his own wholesale
business. In 2009 he opened his first of three
retail locations, first in Cornelius then expanding
his vison and moving to Woodburn in 2012.
The success was great, but unfortunately
the I-5 freeway redevelopment cut through the
dealership. Never daunted, Siamak could see his
next vision in a recently vacated new car lot in
the heart of Salem. He moved his dealership in
May 2014.
At the new location he has become stronger
than ever, with over 30 team members at
Siamak’s Car Company. Siamak relies on their
commitment to the company and in turn they
can rely on his commitment to each of them.
“His commitment to the community in which
he does business can be seen by the relationships
he has developed with the many charities, such
as The Oregon Food Bank, Relay for Life and the
American Red Cross, just to name a few,” said
general manager Mario Nunez. “Siamak is proud
to lend his support to local schools as well.”
Education is a very important part of Siamak’s
Car Company. Not only is Siamak a Certified
Master Dealer but his general manager attended
the 2013 Certified Master Dealer class.
Siamak Lotfi, Oregon is very proud to call
you Quality Dealer of the Year. Once again,
congratulations!
Special Recognition to All of Our
Nominees
NIADA HEADQUARTERS
National Independent Automobile Dealers Association
www.niada.com • www.niada.tv
2521 Brown Blvd. • Arlington, TX 76006-5203
phone (817) 640-3838
For advertising information contact:
Troy Graff (800) 682-3837 or troy@niada.com.
OIADA Dealer News is published 12 times per year by the
National Independent Automobile Dealers Association
Services Corporation, 2521 Brown Blvd., Arlington,
TX 76006-5203; phone 817-640-3838. Periodicals
postage paid at Dallas, TX and at additional offices.
POSTMASTER: Send address changes to NIADA State
Publications, 2521 Brown Blvd., Arlington, TX 6006-5203.
The statements and opinions expressed herein are
those of the individual authors and do not necessarily
represent the views of OIADA Insider or the National
Independent Automobile Dealers Association. Likewise,
the appearance of advertisers, or their identification as
members of NIADA , does not constitute an endorsement
of the products or services featured. Copyright © 2013 by
NIADA Services, Inc.
JACK HOLT RECEIVES AWARD
State Magazine MGR./Sales
Troy Graff • troy@niada.com
Editors
Andy Friedlander • andy@niada.com
Jacinda Timmerman • jacinda@niada.com
Magazine Layout & Graphic Artist
Chantae Arrington • chantae@niada.com
Art Director
Christy Haynes • christy@niada.com
Printing
Nieman Printing
JANET PROPECK RECEIVES AWARD.
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HIS COMMITMENT
TO THE COMMUNITY
IN WHICH HE DOES
BUSINESS CAN BE SEEN
BY THE RELATIONSHIPS
HE HAS DEVELOPED
WITH THE MANY
CHARITIES, SUCH AS
THE OREGON FOOD
BANK, RELAY FOR LIFE
AND THE AMERICAN
RED CROSS, JUST TO
NAME A FEW
Jack Holt of Murray and Holt in Bend,
Oregon: Owner and general manager, Holt
began his career in the auto industry in 1959
while in college. He took over the dealership
in 1967 due to his father’s poor health. The
dealership remained a GM dealership until
2009, when it became independent.
Jack has an outstanding reputation in Bend
as a dealer and is repeatedly acknowledged
by customers, return customers and
employees. Jack has served his community
by volunteering for many organizations. He
has served on several boards, including Bend
Chamber of Commerce for over 20 years.
We are proud to congratulate Jack Holt
for his nomination for 2015 Oregon Quality
Dealer of the Year.
Randy Propeck of Car Shoppe Pro
shares his honor with his very special family,
wife Janet and mother Delores, from MiltonFreewater, Oregon.
The Car Shoppe Pros is truly a family
business. It was established by Dean and
Delores Propeck in 1972. The dealership
moved from Spokane, Washington, to MiltonFreewater in 1978, when it became a full
family dealership with parents Dean and
Delores and son Randy. After Dean’s passing,
Delores and Randy managed the company,
bringing Randy’s wife Janet into the fold
in 2007.
Their Christian values have made them
what they are today, believing in strong
customer service and making the customer’s
buying experience the best possible. The
Propecks are very proud that many of those
great customers are return customers, who
have returned multiple times.
Congratulations to the Propecks for their
nomination for 2015 Oregon Quality Dealer of
the Year.
NOVEMBER 2014
3
OIADA DEALER NEWS
10/30/14 10:08 AM
REGULATORY
NEWS
Revised OSHA Rule Brings Changes for Dealers
NO LONGER EXEMPT BY ERIC SCHMITZ
Effective January 1, 2015, OSHA will
require all employers, including dealers,
to report work-related fatalities to OSHA
within eight hours and to report work-related
hospitalizations, amputations and losses of
eye within 24 hours.
In the past, new and used car dealerships,
among other industries, had been exempt
from completing and posting the OSHA 300
Log based on their Standard Industry Code.
However, under the new regulatory change,
dealerships have lost this exemption and
must keep this accident and injury form up
to date.
Injury reporting will also change
under the new rule. Under the current
regulation, employers are required to
report work-related fatalities and in-patient
hospitalizations of three or more employees
within eight hours of the event. Under the
EFFECTIVE JANUARY 1, 2015, OSHA WILL REQUIRE
ALL EMPLOYERS, INCLUDING DEALERS, TO REPORT
WORK-RELATED FATALITIES TO OSHA WITHIN
EIGHT HOURS AND TO REPORT WORK-RELATED
HOSPITALIZATIONS, AMPUTATIONS AND LOSSES
OF EYE WITHIN 24 HOURS.
new rule, employers must report all workrelated fatalities to OSHA within eight hours
of the event and all work-related in-patient
hospitalizations, as well as amputations
and loss of an eye, to OSHA within 24 hours
of the event.
What is an OSHA 300 Log?
The OSHA 300 Log is used to catalog and
classify injuries and illnesses of any full time,
contract or temporary workers over the course
of a full calendar year. This log is required
even if Worker’s Compensation Loss Runs are
maintained at your facility.
OSHA 300 Logs are now required for all
facilities to allow OSHA to track and measure
injury and illness rates throughout the country
for multiple industries. The OSHA 300 Log
is a more reliable way to track these rates
than workers’ compensation records because
workers’ compensation records vary from state
to state.
OSHA will use the data from the logs to
determine the following:
•The number of workers who are injured or
made ill in the workplace.
•The types of injuries and illnesses
sustained.
•Departments and jobs that have the
highest occurrence of injuries and
illnesses.
•Priorities for correcting job hazards.
To stay compliant with the new rule,
the following must be listed on the OSHA
300 Log:
•Death.
•Work days missed.
•Restricted work.
•Job transfers.
•Medical treatment beyond first aid.
•L oss of consciousness.
•Significant injury or illness diagnosed by
a licensed medical professional.
As the rule change approaches, KPA
will be providing a variety of training and
webinars. Please visit www.dealerwebinars.
com to view a webinar, or contact info@
kpaonline.com to learn more.
ERIC SCHMITZ IS VICE PRESIDENT OF PRODUCT AND BUSINESS
DEVELOPMENT AT KPA. KPA PROVIDES SOFTWARE AND CONSULTING
SERVICES THROUGH TWO INDUSTRY-SPECIFIC PRODUCT LINES:
HR MANAGEMENT AND ENVIRONMENTAL HEALTH AND SAFETY. TO
LEARN MORE, VISIT WWW.KPAONLINE.COM OR CALL 866.356.1735.
THIS ARTICLE ORIGINALLY APPEARED ON NCM’S UP TO SPEED
BLOG (HTTP://BLOG.NCMINSTITUTE.COM) AND IS REPRINTED WITH
PERMISSION.
4
REGULATORY
NEWS
CFPB Forecast: 4 Dealer Areas
Where Bureau Might Focus
RICK HACKETT SHARES INSIGHT
Rick Hackett, former assistant director at the
Consumer Financial Protection Bureau and current
partner at Hudson Cook, told the crowd of more
than 600 attendees at AutoStar Solutions’ seventh
annual Innovate conference the four areas of auto
lending he believes the CFPB will focus on next year.
As an established expert in auto compliance,
Hackett first addressed the fact that the CFPB is
indeed interested in Buy Here-Pay Here dealers in
the same way bureau officials are interested in large
finance companies.
“Up until now, the CFPB’s only way to investigate
a non-bank auto finance source — including Buy
Here-Pay Here dealers and independent lenders
— has been civil investigative demands, which are
narrow in scope,” Hackett said. “Last week, the
CFPB announced plans to extend their oversight
by supervising non-bank auto finance sources that
make, acquire or refinance 10,000 or more loans or
leases per year. That equates to around 38 additional
companies. And some of those companies are likely
represented here today.”
Hackett then shared where the bureau might turn
its attention during the next 12 months, including:
•Discrimination.
•Credit reporting.
•Ancillary products.
OIADA DEALER NEWS
OR_1114.indd 4
NOVEMBER 2014
BY BHPH REPORT STAFF
•Compliance management system
examinations.
Expounding on this list, Hackett said credit
reporting accuracy is the responsibility of
the furnisher (that is, auto dealers or finance
companies), no matter who provides the
technology interface.
“You must exercise extreme caution when
selecting vendors for credit reporting. Insist they
fix known errors,” Hackett said. “If you know of
bad service from a vendor, complaining is not
enough. It’s all about results.”
Hackett recommended the following steps
for selling ancillary products with 100 percent
compliance:
•Make sure your technical disclosures house
is in order. This includes truth-in-lending
compliance and your state’s disclosure rules.
•Ensure that voluntary products are truly
voluntary and that the consumer understands
their cost. Menu selling can help with this.
•Train and monitor your sales personnel
around what “voluntary” really means. If you have
one F&I manager with 90 percent penetration on
GAP insurance, but your average among other
employees is 40 percent, take a closer look at the
sales tactics your high performer is using.
•Use common sense regarding the suitability of
each product for each customer. For example, you
should not sell GAP insurance to a customer with
a 50 percent down payment.
•Stay consistent with pricing. If you normally
charge 100 percent markup, but it can vary up to
500 percent, those variable pricing outcomes look
a lot like disguised finance charges to the CFPB.
When asked about complaint management
systems, Hackett said it can be hard to distinguish
a complaint from a mere inquiry.
“When my clients are developing a complaint
management system, I advise that it’s better to
be over-inclusive both in establishing categories
and in training personnel to identify ‘complaints,’”
Hackett said. “The data will later show that
many ‘complaints’ are actually questions that are
resolved with an explanation and no need for an
adjustment.”
Hackett also shared that CFPB enforcement
strategy attorneys talk frequently with the
industry-specific committees of the National
Association of Attorneys General. He said one
of their goals is to find cases where the CFPB
and attorneys general can tag team or allocate
resources, depending on who possesses the most
effective regulatory tools.
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F&I
MATTERS
Generating F&I Profits
without a Dedicated
F&I Professional
TALK ABOUT BENEFITS THROUGHOUT SALES PROCESS
6
OIADA DEALER NEWS
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NOVEMBER 2014
Teeing up the F&I products and
services
Value in the products and services
of all the ancillary products should be
seen throughout the dealership. Review
the trade interview sheet and your trade
interview process. Do you simply run a
Carfax, followed by an online value of
some sort?
The trade negotiations might be easier
if your sales associate takes the time to
ask all the right questions before he or
she obtains the market value. Questions
include:
• When you purchased your trade
vehicle did you also purchase a service
agreement?
• When you purchased your trade
vehicle did you also purchase
protective coatings for it?
• Did you purchase a separate security
system for your vehicle?
• Do you have all the service records for
the time of your ownership?
• Have the air bags been deployed?
• Is it a salvaged vehicle?
• A re the miles correctly shown, or have
you had the odometer replaced?
• A sk the customers about the last
engine & transmission service, tire
rotation, etc.
The answers are not deal breakers.
They are merely information needed to
establish the true market value of the
trade-in. The sales associates should
also employ the use of sound effects.
Remember the value of “oohs” and
“aahs.”
Asking about the current vehicle’s
service agreement creates value and will
open the customer’s ears when advised of
the opportunity to purchase the valued
protection for the new (to them) vehicle.
Some smaller dealerships will show a
payment with a service agreement and
a payment without a service agreement
on the work sheet. If you employ this
strategy it is essential that the retail cost
of the service agreement be displayed on
the worksheet and the word “optional”
appear next to the dollar amount of
the policy. It is essential the worksheet
also contain the payment without the
service agreement. The disclosure of the
transaction must be transparent.
BY JAN KELLY
When selling a previously owned vehicle,
it is important to let the customer know that
depending upon the age of the vehicle and
the current mileage the vehicle qualifies for
____ years and _____ miles of mechanical
protection. While most previously owned
vehicle policies are stated coverage only,
the presenter should review the coverage
with the customer so he or she can make an
informed decision.
There is danger in a salesperson talking
about a service contract too early in the
process. The result may be the policy being a
cost of sale item rather than a profit stream.
How to avoid this trap? The management
and sales team must make it clear on the
worksheet that the policy is not part of the
selling price of the vehicle. The policy has a
separate cost and by law must be disclosed
on a separate line of the retail installment
contract. It is optional and purchased at the
sole discretion of the customer.
The dealership could place a notice on the
side windows of the vehicles that qualify for
service agreements. Example: “Alert – This
vehicle qualifies for a ____ year ____mile
service agreement. Be sure to inquire with
our sales personnel about the benefits and
cost of the policy.”
Recently I have seen some policies for very
high mileage vehicles. The coverage is stated
coverage limited in scope. I equate these
policies to major medical insurance on a
person. While major medical does not cover
everything, it covers the major items and
it is a true blessing should the person ever
require it.
The goal is to talk about the protections
all the way through the sales process.
You should provide opportunities for the
customer to say yes to the additional dollars
spent.
A change of face is always best when
presenting ancillary products and service to
any customer. The reality is that often that
change of face is not possible and the sales
personnel will need to take a breath and
make the additional presentation. They will
also need to be sold on the value of these
products and services.
JAN KELLY IS PRESIDENT OF KELLY ENTERPRISES. SHE IS AN
EDUCATOR AND CONSULTANT, CONVENTION SPEAKER AND WRITES
FREQUENTLY FOR INDUSTRY PUBLICATIONS. FOR INFORMATION
ABOUT EDUCATIONAL VENUES OR JOINING AN F&I 20 GROUP, CALL
800.336.4275 OR VISIT WWW.JLKELLY.COM.
F&I Matters
Many of your dealerships may be small
in size but large in heart. Your location
may not lend itself to a special office for
a finance person. Your personnel may be
limited in numbers and your dealership
not open the same hours as a franchise
dealership. In fact, your operation might
mirror that of a “boutique dealership,”
one that is open 9 a.m. to 6 p.m. and
closed on Sundays.
Regardless of your business model, the
products and services of the traditional
finance office can make a huge difference
in your bottom line. The question is
how to achieve the presentation of the
products and services without extra
personnel.
Sales Process
The sales manager should manage the
sales process. The basic steps to the sale
are as old as time.
• Meet and greet the customer.
• The sales associate conducts a needs
assessment or interview.
• Based upon the information gleaned,
the sales associate proceeds to product
selection.
• Product demonstration.
• Write-up and negotiations begin.
• Secure the sale.
• Documentation of the sale (F&I process).
• Delivery of the unit.
• Follow up with the customer.
• A sk the customer for referrals. Make
appointments to show your vehicles
and make additional sales.
When you think of interviewing the
customer, think of location! The lot has too
many distractions going on (traffic noise,
inventory, weather, etc.). The best practice
is to bring the customers inside and
conduct the needs assessment at the sales
associate’s workstation.
The sales associate should seek advice
from the sales manager regarding the
correct product selection. The sales
associate should be able to relay the basic
information about the customer (these
inquiries are essential in selecting the right
vehicle to show). This information includes
name, residence, workplace, whether
the purchase is a replacement vehicle or
additional, current vehicle and what they
like about it as well the current monthly
payments and the lien holder of a trade in.
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SOCIAL
MEDIA
6
Benefits of Social Selling
You’d Be Crazy to Miss!
TIME TO GET OFF THE FENCE
8
OIADA DEALER NEWS
OR_1114.indd 8
NOVEMBER 2014
Buyers are engaging in online
communities, asking questions from their
peers to provide feedback on products, and
researching solutions prior to any sales
conversations. With a process for social
selling, your salespeople can be in a position
to listen and monitor what’s being said
and respond to the conversations through
thoughtful, value-added responses (not with
sales pitches).
2. Reputation Management.
We’ve all heard by now that between
80 and 95 percent of buyers’ decisions
are influenced by online reviews. Studies
show that more and more buyers are not
only researching your business, they’re
researching your salespeople.
Have you ever done a Google search on
your salespeople? It would be good to know
what your prospects see when they search.
With a process for social selling (and
training to go with it), when a buyer
Googles your salesperson, the salesperson’s
optimized, well-planned social profile speaks
for him or her before anyone else does.
3. Lead Generation.
Generating new revenue opportunities is
getting harder. Cold calling is dying. People
are clicking on banner ads less and less. One
of the benefits of social selling is that once
your salespeople have established their
social presence, they can monitor, listen
and engage in conversations around the
products and services the company sells.
I recently witnessed a conversation
on Twitter by one of my dealer coaching
clients. He was monitoring the #Lexus
hashtag for sales opportunities. He
came across a local user who was having
trouble with his car’s battery and had
tweeted about it.
My client reached out to him, offered
help and the customer came into the store
that day. They got him what he needed
and it turned out that his lease was
expiring in a few months. What better
way to develop the path to the sale than by
providing assistance when the customer
really needs it?
4. Customer Retention.
Every business would like to maintain and
grow a loyal customer base. However, most
revert to manipulative marketing and sales
tactics to get the transaction “in the books.”
The point is to get them coming back again
and again – not buy once and then disappear.
Social selling allows you and your
salespeople to maintain contact with your
customers in a very non-invasive way.
Sharing helpful content and answering
people’s burning questions inspires customer
loyalty.
Attracting repeat customers costs five to
seven times less than what it takes to attract
a new one. Focus your customer retention
programs around helping your salespeople
produce the right kind of content that keeps
your customers coming back for more.
5. A Sense of Attachment = Sales.
When your salespeople are connected with
customers through social media, it adds a
layer of familiarity to each transaction. These
transactions are not one-way streets. Each
sale is an exchange between people.
When a relationship is established, the
customer experience improves. People who
rave about their experience tell others about
it. The benefits of social selling culminate in
referral business.
6. Increased Productivity.
The numbers don’t lie: 78 percent of
salespeople using social media outsell their peers.
If your customer is online and your
products are online, shouldn’t your
salespeople be online?
KATHI KRUSE IS AN AUTOMOTIVE SOCIAL MEDIA MARKETING EXPERT,
BLOGGER, CONSULTANT, AUTHOR, SPEAKER AND FOUNDER OF KRUSE
CONTROL INC. KRUSE CONTROL COACHES, TRAINS & DELIVERS
WEBINARS FOCUSED ON INTEGRATING SOCIAL MEDIA AND ONLINE
REPUTATION MANAGEMENT INTO DEALERSHIP OPERATIONS.
Social Media
Are you still on the fence about
implementing a process for social selling
within your company? Maybe you’re looking
for more proof that you need to have your
sales team be more social. With numbers as
high as 70 percent of the sales process done
by the time a prospect contacts you, the time
is now to turn your salespeople into savvy
social sellers.
Technology has transformed the way we
buy. It continues to replace outdated sales
tactics.
Before the phone or email were widely
accepted, many were skeptical and stuck
to their old comfortable ways. It’s the same
today with social selling. But things are
moving too fast – if you don’t have a sales
process that includes social selling, you’re
leaving money on the table.
True, not every salesperson will adapt
easily to every facet of the social selling
process, but many of your salespeople may
already be working social media to attract
customers. They’ve recognized the benefits
of leveraging their networks to connect with
prospects, foster those relationships and
create digital word of mouth.
If you can’t quite see the value yet, check
out these six benefits of social selling you’d be
crazy to miss out on:
1. Shortened Sales Cycle.
Research happens online and drives
offline sales. According to an extensive study
by ADLittle called “Spinning the Wheel,” the
research phase in vehicle purchases has been
dramatically shrinking over time.
Eighty percent of surveyed customers
stated they performed the whole prepurchase research within eight weeks.
Social channels can be the catalyst for those
purchase intentions. Nearly 70 percent
of respondents stated they spent more
time online than offline for pre-purchase
information gathering, with a relevant
number researching online only.
BY KATHI KRUSE
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WASHINGTON
UPDATE
National Independent Automobile Dealers Association
NIADA Government Report
HERE’S A RUNDOWN OF SOME OF THE LATEST GOVERNMENTAL ISSUES AND ACTIVITY AFFECTING THE USED
CAR INDUSTRY FROM NIADA REGULATORY COUNSEL SHAUN PETERSEN AND NIADA LOBBYIST SANTE ESPOSITO.
10
REGULATORY REPORT
Consumer Financial
Protection Bureau
The CFPB held a field hearing on
automotive finance issues Sept. 18 in
Indianapolis. NIADA was extended an
invitation to attend directly from the
CFPB.
The bureau announced three
administrative actions during the
hearing: a proposed rule defining larger
market participants in auto finance, a
supervisory report on discrimination in
automotive financing and a white paper
explaining the methodology used by the
CFPB in its 2013 guidance document to
determine disparate impact in indirect
auto lending.
Proposed larger market
participant rule: The Dodd-Frank
Act gave the bureau the authority to
supervise “larger market participants”
among non-banks in the automotive
finance industry, monitoring their
compliance with federal consumer
financial laws and regulations. But it
must first create a rule to define what a
larger market participant is.
The proposed rule defines the term
as an entity that makes, acquires or
refinances 10,000 or more loans or leases
in a year. The bureau estimates that
standard will include about 38 companies
representing 90 percent of the market.
NIADA is reviewing the proposed rule
and will submit comments before the late
November deadline.
Supervisory report: The
supervisory report detailed what
the CFPB asserts are accounts of
OIADA DEALER NEWS
OR_1114.indd 10
NOVEMBER 2014
LEGISLATIVE REPORT
H.R. 5403, Reforming CFPB
Indirect Auto Financing Guidance
Act
The CFPB’s 2013 guidance sought to
eliminate dealers’ flexibility to discount
the interest rate offered to consumers to
finance vehicle purchases, an attempt
to change the $905 billion auto loan market
and limit market competition without public
comment and without analyzing the impact
on consumers.
With the CFPB’s actions likely to raise the
cost of credit for car buyers, H.R. 5403 was
developed on a bipartisan basis to rescind
the CFPB’s flawed auto finance guidance
and make the bureau more transparent and
accountable in future auto finance guidance
by requiring public participation before it
is issued.
The bill, introduced Sept. 8 by Reps.
Marlin Stutzman (R-Ind.) and Ed Perlmutter
(D-Colo.), has 92 cosponsors.
The CFPB claims negotiated interest rates
create a “significant risk” of unintentional
disparate impact discrimination. After more
than a year and 11 requests from members of
Congress from both parties, the CFPB finally
released information about its methodology
in September – information that still did not
address many of the concerns raised (see
Regulatory Report).
H.R. 749 and S. 635, Annual Privacy
Notice Requirement
Recently, the CFPB proposed some
changes to the Privacy Rule, specifically the
part that deals with providing an annual
privacy policy. On July 14, NIADA submitted
comments noting that while the concept
of removing the annual privacy policy
requirement when there is no change to the
document and the customer’s information
is not being shared with non-affiliated third
parties has merit, the delivery method
proposed by the CFPB is flawed.
The comments included specific
concerns with requirements that hurt small
businesses, such as maintaining a dedicated
toll-free phone line. NIADA recommended
that the bureau support H.R. 749, which has
already passed the House of Representatives,
and S. 635, which is pending in the Senate.
That legislation does not include such
onerous requirements on small businesses.
The bills would, in general, eliminate a
costly and duplicative requirement originally
passed under the Gramm-Leach-Bliley Act
that all financial institutions mail their
customers a copy of their privacy notice each
year even if there has been no change in their
privacy policy.
While NIADA supports both bills in
concept, the preference is for enactment
of House-passed H.R. 749 given concerns
over a requirement to provide electronic
access to the most recent disclosure
statement that is included in the Senate
bill but not the House bill.
Washington Update
THE CFPB’S 2013
GUIDANCE SOUGHT TO
ELIMINATE DEALERS’
FLEXIBILITY TO DISCOUNT
THE INTEREST RATE
OFFERED TO CONSUMERS
TO FINANCE VEHICLE
PURCHASES, AN ATTEMPT
TO CHANGE THE $905 BILLION
AUTO LOAN MARKET AND
LIMIT MARKET COMPETITION
WITHOUT PUBLIC COMMENT
AND WITHOUT ANALYZING
THE IMPACT ON CONSUMERS.
discrimination in auto lending at banks
it has supervised for the past two years.
The bureau claims minority borrowers
paid more for auto loans than similarly
situated non-Hispanic white borrowers
and said supervisory actions aimed
at indirect auto financing institutions
resulted in approximately $56 million
in remediation for up to 190,000
consumers.
Disparate impact white paper:
The white paper said CFPB examination
teams use a proxy methodology to help
them determine race and national origin
of loan customers.
The bureau uses consumers’ last
names and places of residence and
proxies them against U.S. Census Bureau
data to calculate the probability that an
individual belongs to a specific race and
ethnicity based on his or her last name.
Exam teams then update that probability
based on the demographics of the area
where the person resides, again using
Census Bureau data.
NIADA believes the white paper does
not address the concerns that have been
raised to the bureau. The methodology
does not account for errors in the proxy
determination and does not address
economic impact or other issues asserted
by the industry since the guidance was
issued in March 2013.
NIADA will continue to express
its concern to the bureau over its
methodology and is working with
Congress to pass legislation revoking
the bureau’s guidance document (see
Legislative Report).
The white paper and supervisory
report are available at www.
consumerfinance.gov/reports.
Increase in thresholds for Reg Z
and Reg M: The CFPB and the Federal
Reserve Board have announced increases
in the dollar thresholds under Regulation
Z and Regulation M for exempt consumer
credit and lease transactions. Both
thresholds have been increased by
$1,100. In 2015, Regs Z and M will apply
to credit transactions and consumer
leases of $54,600 or less.
W W W. O I A D A . C O M
10/30/14 10:08 AM
BHPH
PERSPECTIVES
9
Steps to an Effective Collections Call
BASIC STEPS FOR MORE EFFECTIVE COLLECTIONS
Many Buy Here-Pay Here dealers seem to have
one thing in common. They all struggle with
effective collections calls. The main reason is
usually lack of training.
Here are some basic steps to an effective
collections call:
1. THE GREETING. I still believe the best
way to start a call is “Good morning/afternoon/
evening.”
Starting a collections call with the word “good”
helps lower defenses. It also helps reassure the
customer’s choice. Take a moment to thank for
them choosing you over a competitor.
2. IDENTIFY THE CUSTOMER. The
biggest mistake here is asking, “Is (customer’s
name) there?” The answer is typically “no.”
Try assuming gender specific. If you are calling
a female customer and a female answers, simply
say, “Hi, (customer’s name). How are you today?”
You will very likely be right.
If it’s someone else, ask, “May I please speak
with (customer’s name)?” Too often collectors ask
if the person is there, in or available. It is more
effective to assume the person is all of
those because the number you are calling is the
best number the customer gave you to reach him
or her.
3. IDENTIFY YOURSELF. Tell the
customer who you are and who you are with.
W W W. O I A D A . C O M
OR_1114.indd 11
There is no big secret here. Even if you are using
a blocked call line, they know it is likely a bill
collector of some sort.
4. A STRATEGIC PAUSE. As soon as
you identify yourself, let there be a moment
of silence. They will typically start verbally
vomiting in an effort to get you off the phone as
quickly as possible.
I say let them get it all out and take some
notes. I would rather have one 20 minute phone
call to figure out what is really going on than
five shorter calls over a week to get the same
information.
5. REQUEST PAYMENT IN FULL
TODAY. Even though they have given reasons
why they supposedly can’t pay, you still need to
bring them back to reality with the business at
hand. Show a little empathy, as in “I’m sorry to
hear that,” but then set your expectations.
Simply say, “How are you going to make your
payment of $___ today?” This tells them you
are expecting payment in full and you expect it
today.
6. VERIFY SOME INFORMATION.
Before you move forward with arrangements,
make sure you verify some information
regarding the account. Address, phone numbers,
job numbers or place of employment would be
the most common, but don’t be afraid to verify
BY BRENT CARMICHAEL
reference information, especially if you have had
difficulty reaching them or leaving messages
with them.
7. THE SOLUTION. Make sure the solution
is in the best interest of the company and the
customer. It really needs to make sense for both
parties to be effective.
8. CLOSE THE CALL. Thank the
customer for not only taking time to talk with
you about the account, but also for their business.
They could have not answered the phone, not
called in or called another creditor, but they
didn’t. They called you or answered your call, so
show a little gratitude. It will go a long way.
9. DOCUMENT EVERYTHING
FROM THE CALL. This way everyone in
your organization knows what you know. If you
happen to not there, your coworkers have all
the information necessary to take care of the
customer.
Practice these nine steps on every collections
call, whether it is incoming or outgoing, and I
assure you that you will not only collect more
money, but not have to work as hard to get it.
BRENT CARMICHAEL IS ONE OF THE INDUSTRY’S MOST WELL
RESPECTED BUY HERE-PAY HERE EXPERTS. HE IS EXECUTIVE
CONFERENCE MODERATOR FOR NCM ASSOCIATES, INC. PRIOR
TO JOINING NCM, BRENT WORKED 17-PLUS YEARS IN SUBPRIME
FINANCE AND COLLECTIONS.
NOVEMBER 2014
11
OIADA DEALER NEWS
10/30/14 10:08 AM
COMPLIANCE
OVERDRIVE
Conversations With Lenders
THE IMPORTANCE OF A STRONG RELATIONSHIP
12
In times when lenders seem to be
making more auto loans and credit
availability is not necessarily the most
serious issue facing our marketplace, it
is important for dealers to understand
they gain a competitive edge when they
are able to maintain strong, effective
relationships with their lenders. These
dealers tend to secure more approvals
and on more favorable terms. When they
benefit, the customer benefits.
When it comes to advertising the old
adage holds true: Know your customer.
When it comes to the success of your
dealership: Know your lenders.
While some basic principles continue
to be key to maintaining good working
relationships with your lenders, the
reality is credit applications often are
incomplete, and even this most basic
starting point can be a challenge. When
dealers collect customer details, they
have an opportunity to get to know their
customers better and help their lenders
more effectively gauge risk. Finance
managers must understand proper
processes involved in taking credit
OIADA DEALER NEWS
OR_1114.indd 12
NOVEMBER 2014
and document preparation fees set out
in the documents, to ensure they comply
with state laws. And we are always on the
lookout for anything that’s unusual or
suspicious about the transaction that could
be a possible indication of fraud.
As most financing providers do, we have
our own internal processes for documenting
our checks on the prescribed requirements.
Finance providers and dealers are both
responsible for ensuring transactions are
well-documented and in compliance with
applicable laws because, ultimately, we
want to set the stage for the best possible
customer experience.
Are there any red flags you look for
in particular?
Repeat issues are often regarded as red
flags. For example, the following situations
could prompt additional scrutiny:
•Dealers who submit forms that have to
repeatedly be sent back for completeness or
accuracy.
•Dealers who have an excessive number
of held or suspended contracts over a
certain period of time.
•Dealers who submit applications that
are routinely declined, and/or where there
seems to be a pattern of misrepresentation
between the credit application and booked
funding package.
Generally, if we keep seeing the same
thing over and over, it’s a red flag and it
raises concerns as to whether the dealer
is committed to submitting high quality
applications and funding packages.
Closing Remarks
My conversation with Brad reminded
me that in our fast-paced world, speed
can sometimes seem more important
than quality. But if the quality of credit
information passed to the lender is not 100
percent (e.g., not using current application
forms, not providing all required data, not
providing accurate data, not describing a
transaction that fits the lender’s program
requirements, etc.), then it will result in
lender rejections and rework. The rejections
and rework will require more of dealer’s
time than doing it well the first time – and
the rejections and rework can create lender
frustration and eventually threaten the
relationship.
The same probably holds true in
relationships with our customers,
coworkers and families. In the interest of
cultivating good relationships across the
board, sometimes we just need to slow
down so we have the best chance of getting
it right the first time.
CHIP ZYVOLOSKI IS A SENIOR ATTORNEY FOR INDIRECT LENDING
AT WOLTERS KLUWER FINANCIAL SERVICES. FOR MORE
INFORMATION, VISIT WWW.WOLTERSKLUWERFS.COM/INDIRECT.
Compliance Overdrive
WHILE SOME BASIC PRINCIPLES
CONTINUE TO BE KEY TO
MAINTAINING GOOD WORKING
RELATIONSHIPS WITH YOUR
LENDERS, THE REALITY IS
CREDIT APPLICATIONS OFTEN
ARE INCOMPLETE, AND EVEN
THIS MOST BASIC STARTING
POINT CAN BE A CHALLENGE.
WHEN DEALERS COLLECT
CUSTOMER DETAILS, THEY
HAVE AN OPPORTUNITY TO GET
TO KNOW THEIR CUSTOMERS
BETTER AND HELP THEIR
LENDERS MORE EFFECTIVELY
GAUGE RISK.
applications correctly and have the tools
to get to know their customers in depth.
There are some basic yet important
questions dealers should be addressing in
their daily operations to ensure potential
issues are addressed. To help gather some
insights, I asked Brad Laughlin, senior
compliance director for Auto Finance at
Ally Financial, a few questions regarding
this most critical relationship to the
health of any successful dealership.
What makes for a good
relationship between a dealer and
his finance provider when it comes
to consumer financing?
One of the most important things for
the dealer to understand is that from
the finance provider’s perspective, the
relationship is really a balance between
considering the needs of both the
dealership and the consumer. When there
is honesty and transparency throughout
the entire financing process – from
how dealers arrange financing for their
customers, how they present ancillary
products and add-on products and how
they conduct themselves during the
transaction – the result is more likely to
be satisfactory to all parties.
What are the most common
compliance/documentation
mistakes you see on consumer
credit applications received from
dealers?
The number one problem is the
submission of unapproved credit
application forms. It could be a form
from a different finance provider, or an
old version of a form that has since been
updated.
Submitting applications not fully
completed can also lead to problems,
including issues that may ultimately
impact the consumer. Sometimes
when there are new or revised forms,
dealership systems are not fully updated
to account for those changes, which
can lead to incomplete or inaccurate
documentation being submitted.
Dealers interact with a number of
financing sources every day and it’s
important to recognize which forms,
information and disclosures are required
by each finance source.
When dealers submit funding
packages, finance providers are
focused on documentation. What
requirements do you look for
outside the documents themselves?
Outside of the documentation, we look
at a number of things. Most importantly,
we conduct fair lending monitoring.
We also check the finance charge rates
BY CHIP ZYVOLOSKI
W W W. O I A D A . C O M
10/30/14 10:08 AM
REGULATORY
MATTERS
Regulatory Issues Remain in the Spotlight
TA K E AWAYS F ROM RECEN T CF P B F IEL D HE A RING
the law and be subject to the same level of
The Consumer Financial Protection
oversight,” said Cordray. “This expansion of
Bureau’s increased regulation of auto dealers
coverage is important to protect consumers,
and lenders has been one of the major
but it also will remove a distortion in the
storylines this year. Recently, the CFPB held
marketplace and is a matter of simple fairness
a field hearing in Indianapolis to discuss
to competitors who should play by the same
the state of the auto financing industry.
rules in the same way.”
Held on the campus of Indiana University
Questions raised over CFPB’s
Purdue University Indianapolis, this hearing
recommendations
consisted of remarks from CFPB director
Prior to the hearing, the CFPB released
Richard Cordray, a panel discussion from
a new supervisory highlight report, in
various experts in the world of finance and
which the agency describes its fair lending
testimony from consumer and civil rights
supervisory activity in the indirect automobile
groups.
lending market. Within this report, the
Here are three key takeaways from the
CFPB proposed several methods dealers and
event:
lenders can undertake to help them remain
Extension of oversight to captive
compliant and avoid discrimination. These
lenders
methods include:
In his opening remarks, Cordray
•Increase internal monitoring.
announced a proposal for CFPB’s reach
•Eliminate dealer discretion to mark up
to extend to larger nonbank auto lenders,
interest rates by switching to a flat fee model.
which includes captive lenders. According to
•Develop and implement more intensive
Cordray, nonbank auto finance companies
compliance management systems.
have never been subject to any supervision at
During the panel discussion, concern was
the federal level, despite lending hundreds of
voiced over the CFPB’s recommendation
billions in credit to consumers.
to switch to a flat fee model to mitigate the
“It should not matter whether you get
risk of discrimination due to marked up buy
a loan or lease from a company that has
rates. The panel raised the issue that this
a banking charter versus one that does
one model does not consider the economic
not – every auto lender should be following
W W W. O I A D A . C O M
OR_1114.indd 13
BY NEXTGEAR CAPITAL
impact of altering the auto finance market, as
switching to flat fees would increase the cost
of credit for consumers and doesn’t solve the
discrimination problem.
Transparency and education vital for
consumers
Educating consumers and being more
transparent was another hot topic during
the panel discussion. Because the car
buying experience can be a lengthy and
taxing process, with long and complicated
disclosures, many consumers don’t know what
they’re getting into when they purchase a car.
While organizations such as the NADA have
created publications for consumers promoting
financial literacy, the CFPB would like to see
dealers and lenders do a better job themselves
of simplifying the process for the consumer.
The event was met with positive feedback
from those in attendance and it’s apparent
that many organizations within and outside
the auto industry are supportive of the CFPB’s
efforts to curb discrimination and bad lending
practices. While it remains to be seen what
the end result will be from this proposed
extension to regulate nonbank auto lenders, it
is clear that dealers and lenders need to have
their ducks in a row to ensure all consumers
are being treated equally and fairly.
NOVEMBER 2014
13
OIADA DEALER NEWS
10/30/14 10:08 AM
AUCTION
NEWS
NAAA Pedal Car Auction Pushes
Beyond Half-Million Dollar Mark
$576,30 0 BENEF I T S N A A A WA RREN YOUNG, SR. SCHOL AS T IC F OUNDAT ION, INC.
14
Pedal cars attracted very adult-sized
donations at the National Auto Auction
Association’s Black Book Pedal Car Auction,
raising more than a half-million dollars to
benefit the organization’s nonprofit NAAA
Warren Young, Sr. Scholastic Foundation, Inc.
The auction was held during the 2014 NAAA
Annual Convention in Boston.
Among the 14 candy-colored, fully
accessorized pedal-powered entrants, a Jump
Truck custom-built by State Line Auto Auction
of Waverly, NY – complete with jumper cables,
compressed air system, push bumper, beacon
lights, trash receptacle, fire extinguisher and
first aid kit – claimed the “Best In Show” title
with a winning bid of $102,000. The team of
John Williams, Chris Waters and Ed Garrity
under the supervision of Rob Bennett invested
almost 130 hours in the project, according to
State Line president Jeff Barber.
The charity event’s entry fees, vehicle
sales, award sponsorships and additional
contributions collected a grand total of
$576,300 for the association’s annual merit
scholarship program.
Four other contestants took home special
show awards sponsored by NextGear Capital
and judged by the NAAA’s four chapter
presidents: McConkey Auction Group for “Most
Creative Pedal Car,” Greater Milwaukee Auto
Auction for “Best Custom Pedal Car,” Pittsburgh
Auto Auction for “Best Accessories” and Akron
Auto Auction for “Most Unusual Paint Job.”
“I am truly astonished and extremely
gratified by the remarkable response to this
first-time fundraiser that far exceeded our
expectations tenfold,” said outgoing NAAA
president Jack Neshe, explaining the original
goal was $50,000. “I want to express my
heartfelt appreciation to all of our auction
participants for their generous support.”
Neshe, who also chairs the WYS Scholastic
Foundation’s board, had suggested the
auction idea a year ago during a visit to NAAA
headquarters where he saw a pedal car in the
office of chief executive officer Frank Hackett.
“We just thought this offered our members
a great way to demonstrate their creativity and
craftsmanship in a friendly, fun competition
while raising money for our scholastic
foundation, which since it began in 2004 has
helped 120 deserving students achieve their
dreams of higher education,” noted Neshe.
The auction rules allowed the contestants
to modify new or preowned pedal-powered
vehicles or even custom make their own –
whether trains, planes or automobiles – as
much as their imagination and skill would
permit. That included paint, decals, graphics,
exhausts, lights, sirens and other parts or
accessories.
Handiwork of all the entrants vying to
be among the finalists selected to compete
in the auction appeared in a display at the
CAR Conference in March. The lucky 13 to
be included with Black Book’s entry on the
auction’s run list were chosen by a random
drawing held at the National Independent
Automobile Dealers Association Convention
this past June in Las Vegas.
In run order the auction contestants and their
final bids were: Black Book ($49,500); Capital
City/Mountain State Auto Auctions ($10,000);
ADESA Indianapolis ($8,500); Akron Auto
Auction ($14,000); Sanford Auto Dealers
Exchange ($25,000); McConkey Auction Group
($45,000); Manheim ($75,000); Dealers Auto
Auction of the Southwest ($10,000); State
Line Auto Auction ($102,000); Lynnway Auto
Auction Inc. ($45,000); Greater Milwaukee
Auto Auction ($25,000); Farmington Auto
Auction ($15,000); Pittsburgh Auto Auction
($31,000) and Charleston Auto Auction
($26,000).
“The benevolent spirit of all those who took
part was just inspiring,” remarked Hackett. “It
was one of the most entertaining and exciting 45
minutes I’ve ever experienced as we approached
a half million dollars and people kept making
offers to get us over the mark. For example,
Black Book and Lynnway both bought their own
cars and then donated them back for resale. It
was an amazing evening.”
Hackett also noted many
magnanimous individual
gifts helped boost the
final tally, which included
$5,000 each from Auction
Finance Corporation, Auto
Auction Solutions and Jay
Cadigan; $10,000 apiece
from Charleston Auto
Auction, Lynnway Auto
Auction, Janet Barnard and
Auction Insurance Agency
and a $25,000 contribution
from NextGear Capital.
Tom Cross, president of
Black Book, said he was
proud his company could
be the main sponsor of
the association’s first ever
pedal car auction. “We
believe in NAAA’s work on
behalf of the industry and
are big supporters of the
Warren Young Scholastic
Foundation. We’re
happy to give back to the
remarketing community
in this role and thrilled at
the event’s overwhelming
success in raising money
for a worthy cause.”
BEST IN SHOW WINNER: STATE LINE AUTO AUCTION OF WAVERLY, NY - PEDAL CAR SPONSOR AND HIGHEST BIDDER (LEFT TO RIGHT) PAUL BARBER, AUCTION PRESIDENT JEFF
BARBER AND EMILY BARBER.
OIADA DEALER NEWS
OR_1114.indd 14
NOVEMBER 2014
W W W. O I A D A . C O M
10/30/14 10:08 AM
OIADA/NIADA
MEMBER NEWS
Freeman Motor Co. to Host
Food Packing Event
NOVEMBER 16 EVENT TO HELP FEED HUNGRY
Freeman Motor Co. is
hosting a second annual food
packing event November 16 in
their Portland showroom. Their
crew, along with approximately
900 volunteers, expect to
package 280,000 grain based
meals that will be divided
between the Oregon Food Bank
and Africa New Life Ministries.
In addition to helping local
needy within the community
through the Oregon Food Bank,
food will be shipped to Rwanda
to assist families and children
that ANLM supports with
education, shelter, spiritual
guidance and food.
Last year’s food packing
event was birthed out of owner
Eric Freeman’s involvement
with Africa New Life
Ministries. The purpose of the
event was to raise money, buy
food and get it packaged and
shipped to Rwanda to benefit
the many people who do not
have enough to eat in the
communities that Africa New
Life serves.
Additionally, the company
helped ANLM buy a truck to
be used to travel the distances
between African towns that
had previously been traveled
on foot or bike. Eric and Jenny
Freeman have also sponsored
a child in Africa through the
organization.
The company is involved
with various organizations in
Portland and looks for ways
to serve and assist them.
This includes donating their
showroom for fundraising
events, hosting charity events
and employees acting as valet
drivers to help raise funds for
an organization that works
with abused children.
15
W W W. O I A D A . C O M
OR_1114.indd 15
NOVEMBER 2014
OIADA DEALER NEWS
10/30/14 10:08 AM
JOE’S
MARKET
GARAGE
It’s That Time
of Year Again
WHAT WILL YOUR BUSINESS PLAN LOOK LIKE?
16
It’s hard to imagine that 2015 is just a few
weeks away, and it’s already time to plan
what the new year will look like for your
business.
That’s right, it’s time for you to decide
what your business will look like in the new
year.
Success is no accident. Success
comes from careful planning and then
implementing those plans so they become
your reality.
So what will your year look like?
I understand it can be challenging
to think about a new year when you’re
trying to salvage what’s left of this one,
but you have to be ready to hit the ground
running on Jan. 2, 2015. You can’t waste
precious days “cleaning up 2014” while the
competition has already started the race.
When a dealer thinks about forecasting
he typically thinks about how many units
he wants to sell, how much gross profit he
wants to make on each unit or how many
sales dollars he wants to generate. He
might even forecast how many wholesale
units he anticipates selling and whether he
anticipates making a profit or loss on those
wholesale units.
What will your business plan look like for
the new year? What are you forecasting?
The first thing I ask my clients is, “How
much money do you wish to personally
make?” I firmly believe dealers need to
consider their own personal financial needs
and goals before they can forecast targets
for their company.
How much money will you need to enjoy
the quality of life you feel you deserve? How
much money do you wish to contribute to
charitable entities? And so on. That type of
forecasting and planning requires a dealer
to think about net profit rather than gross
profit.
Isn’t gross profit what dictates how much
net profit you’re going to make? Yes and no.
Gross profit is what you earn – but net profit
is what you get to keep of what you earn.
In order to forecast a net profit for the
dealership, the dealer must also forecast
expenses for the business.
Operating expenses should never be
a surprise. Any dealer I ever met who
failed to make a profit also failed to
forecast expenses, or at least forecast them
correctly.
Do you have a salesperson or persons?
How much sales compensation do you
forecast paying out in 2015? You know
you’re going to want to motivate your sales
team from time to time and you’re probably
going to need to move out some of those
OIADA DEALER NEWS
OR_1114.indd 16
NOVEMBER 2014
BY JOE LESCOTA
older units you have in stock.
And let’s not forget those times you
want to reward your sales staff for hitting
that high gross or for exceeding their unit
sales forecast. Sooner or later you’ll throw
caution to the wind and begin handing out
spiffs, bonuses and incentives as the mood
strikes you, and thus begins the downward
spiral of profitability.
I’m all in favor of rewarding outstanding
sales achievements by salespeople, but
you still have to decide how much money
you’re going to be paying out or you’ll end
up paying out way more than you originally
anticipated.
Sales compensation is one of the three
major expenses I found contribute most
to the loss of dealers’ profits. To stay
within reasonable industry guidelines a
dealer should keep the amount spent on
salesperson compensation to 18-24 percent
of total gross profit of unit sales.
As a side note, because of the increasing
competition in today’s highly efficient
marketplace, many dealers have chosen to
pay their sales staff a flat rate fee per unit
sold rather than a percentage of an everdecreasing gross profit per retail unit sold.
Those dealers have discovered paying a
flat rate commission permits them to:
• Turn their inventory more rapidly because
salespeople are not focusing on gross
profit per sale.
• Hire salespeople who are truly consumerfocused rather than profit-focused.
• Sell more total units, allowing them to
gain market share.
• Focus on “super gross” – selling more
units at a lower gross profit per unit
retailed allows for more units sold, leading
to more F&I income, more reconditioning
profits (65 percent of recon cost is profit
back to the dealer), more service dollars
(for dealers with their own service
departments), and the opportunity to take
in more trade-ins, which leads to more
access to inventory.
Don’t go into 2015 without a solid
business plan. You have time to evaluate
where you are today and compare to where
you thought you would be. The best way to
achieve success is to plan for it.
And while you’re at it, let NIADA help you
to achieve success even faster by becoming
a Certified Master Dealer and discover the
other two major profit-robbing expenses.
JOE LESCOTA, A VETERAN OF MORE THAN 25 YEARS IN THE
AUTOMOTIVE INDUSTRY, IS NIADA’S DIRECTOR OF DEALER
DEVELOPMENT AND INSTRUCTOR FOR NIADA’S CERTIFIED
MASTER DEALER PROGRAM. HE CAN BE REACHED AT JOE@
NIADA.COM.
WATCH
The Internet
Continues to
Influence the
Auto Shopping
Process
STUDIES SHED LIGHT ON CONSUMER T RENDS
According to the recently released J.D. Power
2014 New Autoshopper Study, the more time
someone spends on the Internet during the
car-shopping process, the more dealerships they
are likely to visit. The study examines the use
of digital devices, websites and apps during the
car-shopping and research process.
The study found that, on average, automotive
Internet users are shopping online for nearly 14
hours prior to buying a vehicle. Individuals who
spend 12 or more hours on the Internet end up
visiting an average of 3.3 dealers prior to buying,
while those who shop between five and 11 hours
visit an average of 2.5 dealers. Shoppers who
spend between one and four hours online, visit
an average of two stores.
Another study, commissioned by Cars.com, The
Digital Influence: How Online Research Keeps
Auto Shoppers in Control found that just half of
car shoppers tend to contact a dealership before
they physically enter a showroom. A summary of
the report found that most shoppers felt they had
access to so much information online they could
control the dialogue with the dealership on their
own terms.
While the Internet is playing a larger role in
the car-shopping process, the dealership visit
itself is still very important. Seeing, touching and
test driving a vehicle are still important to many
buyers and can’t be replicated by an Internet
search.
WHILE THE INTERNET
IS PLAYING A LARGER
ROLE IN THE CARSHOPPING PROCESS,
THE DEALERSHIP VISIT
ITSELF IS STILL VERY
IMPORTANT.
In the past, consumers relied heavily on
dealership staff to educate them about the
vehicles for sale. With the proliferation of online
resources, consumers are more educated about a
vehicle’s specific attributes before they set foot in
a dealership showroom.
The Cars.com study found that 68 percent of
shoppers used online sources (online searches,
dealer websites and independent research sites)
to find a dealership. Outdoor ads and radio
advertisements were identified by 9 percent and
8 percent of respondents, respectively, as other
ways to find a dealership.
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ASSOCIATION NEWS
Oregon
Independent
OIADA ~ Oregon Independent Auto Dealers Association
Auto Dealers Association
Your only nationally recognized association since 1948.
OIADA, here to help, support, educate and promote quality dealers in Oregon.
Here are the great benefits of OIADA membership:
• Oregon Dealer News is delivered to our dealers monthly, filled with quality up to date
business articles.
• Included in each Dealer News Magazine is 30 minutes towards continued education,
free to OIADA members, which now means returning eight answer sheets a year. This
is a savings of $75 annually.
• OIADA Auction Punch Card: Our valued auction houses in Oregon, Washington and
California are offering $50 savings on your buy and sell fees, a value of $1,100.
• OIADA offers members discounts on all meetings, educational programs and
conventions, with an annual savings of over $200.
• OIADA members receive a discount on most forms, a savings of up to $100 or more
annually.
• Quarterly regional dinner meetings, an outreach to bring programs, education and
conversation to all areas within Oregon.
• Annual convention will host a variety of programs including eight or more hours of
continued education. Quality Dealer of the Year Awards and Banquet. At a savings of
$100 for OIADA members.
• Opportunities for OIADA members to be awarded Oregon’s Quality Dealer of the Year
and to compete for the National Quality Dealer of the Year at our national convention.
• National education opportunities, becoming a Certified Master Dealer and more.
• National access to Dealers 20 Groups .
• OIADA has on contract a lobbyist to bring forth interests and to protect our dealers at
the state level.
• OIADA hosts a required certified 8-hour Pre-License Class. Upon completion dealers
will receive the DMV required 8-hour certificate.
• Title and registration classes, savings of $35 for OIADA members.
• Help and support with your issues is just a phone call away.
• Automatic membership with NIADA and the NIADA Used Car Dealer Magazine.
• Access to NIADA’s annual convention.
• Opportunities for scholarships, both state and national.
• NIADA offers OIADA members a wide variety of discounts to members, from education
to everyday business expenses.
18
Contact OIADA at 503-362-6839 to start your enrollment for all these great opportunities as a
member of OIADA.
Annual Savings
$1100
Auction Punch Card
$ 100
Forms
$ 75
Education
$ 100
OIADA Convention
$ 50 Driven to Learn & Regional Meetings
$ 1425 Bottom Line Savings
$325 Cost of Membership ~ OIADA helping you succeed.
OIADA DEALER NEWS
OR_1114.indd 18
NOVEMBER 2014
OIADA
Forms Store
YOU CAN EASILY ATTAIN FORMS NEEDED FOR
EVERYDAY BUSINESS
Don’t let yourself run out of the forms
you need to do business every day. OIADA
has four ways for you to get forms:
1.
2.
3.
4.
You can order forms any time of the day
online at OIADA.com. All you need is
an email address.
You can stop by one of three locations
within the Oregon auction houses
during auction day.
You can pick up forms at the OIADA
office, located at 1475 Capitol Street NE
in Salem.
You can call the OIADA Office MondayFriday. We will ship your order that day.
In most cases, it will be delivered to you
overnight by UPS.
Don’t be caught without a Secure
Odometer Form or Secure Power of Attorney.
These forms are DMV forms and each has
a registered number assigned to the dealer
who purchased them, so don’t lend yours out
and do not borrow from your neighboring
dealer.
When you purchase these forms, it’s a
good idea to pull them out of the packet
and slip a reminder near the bottom to call
OIADA and order more. You can even add
the phone number (503-362-6839) on the
note.
Did you know that our members get
a discount on most state forms? OIADA
members save an average of $100 or more
every year.
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10/30/14 10:08 AM
ASSOCIATE MEMBERS
ACCOUNTING SERVICES
Delap, CPA
Adam Puckett
Lake Oswego, OR 97035
503-697-4118
ADVERTISING
Affiliated Media LLC
Aaron Jarvis
503-683-2574
Carsforsale.com
Aaron Oestretch
605-306-3302
AutoTrader.com
Ed Merrick
503-747-9162
Carjohnny.com
Thomas Garza
888-435-3000
Cars.com
James Lynch
312-601-5052
The Oregonian
Rich Fryback
503-221-8486
UsedCars.com by Dealix
Tamara Garris
847-397-1700
AUTO SERVICES &
ACCESSORIES
Auto Marketing Specialist
Gary Palaniuk
503-519-7725
AUTO DETAILER
Show Room New
Mike Barthe
P O Box 822073
Vancouver, WA 98682
360-882-8162
Northwest Auto Accessories
Craig Lessard
503-288-5700
DAA Northwest
Mitzi Vanvoorhis
509-244-4500
Credit Concepts
Jason Moon
541-342-8545
NextGear
Robert Torbet
503-358-3911
SHOWROOM/BUSINESS
JANITORIAL
JaniKing
Morgan Thomas
1500 Valley River Dr., STE # 205
Eugene, OR 97401
503-535-9758
DAA Seattle
Dave Blake
Auburn, WA 98002
253-737-2200
JP Morgan Chase Auto
Finance
Jeff DeGarmo
503-201-4370
Manheim Seattle
Auto Auction
Ray Priest
206-762-1600
Lobel Financial
Tom McConkey
503-653-8000
INSURANCE & BONDING
Hecht & Hecht
Insurance Agency
Evelyn Hecht
503-542-1131
Show Room New
Mike Barthe
360-882-8162
COMMERCIAL CLEANING
JaniKing
Morgan Thomas
541-868-8080
PRIVATE AUCTIONS
Brasher’s Northwest
Auto Auction
Mark Melton
541-689-3901
Brasher’s Portland Auto
Auction
Jerry Hinton
503-492-9200
Crosspoint NW Dealer
Auction
Brian Hardy
503-594-2800
Manheim Portland
Auto Auction
Ray Priest
503-286-3000
OUT-OF-STATE AUCTIONS
ADESA Seattle Auto Auction
Jason Arcaro
253-735-1600 x 213
PUBLIC AUCTIONS &
AUCTIONEERS
Commercial Industrial
Auctioneers
Ray Beal
503-760-0499
Insurance Auto Auctions, Inc.
Ryan Hall
503-253-1500
Petersen Auction
Group of Oregon
Curt Davis
541-689-6824
Nationwide Insurance
Mark Tischer
503-339-4165
Oregon Auto Finance
Gary Veum
541-868-0472
Oregon Community
Credit Union
Rich Black
541-681-6311
Reliable Credit Association
David Marx
503-462-3022
Shepard & Shepard
Business Solutions
Todd Shepard
509-396-0488
The Summit Group of Oregon
John Petrie
503-581-2825
LEASING
Oregon Roads, Inc.
Joseph McKinney
541-683-2277
SERVICE CONTRACTS
A.U.L./D.P.C.
Jim Bangert
360-834-3333
Rick Leathers Auctioneers
Rick Leathers
503-668-5326
Smartway Auto Advisors
Sheldon Harris
503-795-7700
Automotive Business
Developers
Shannon Meany
541-944-9186
Woodburn Auto Auction
Steve Morin
503-981-8185
The Equitable Finance Co.
Brandon Fox
503-808-7939
Auto Services Company
Susan Williams
800-442-7116
DEALER SOFTWARE
Frazer Computing
Michael Frazer
888-963-5369
United Finance
Todd May
503-238-6488
Protective Life Insurance
Dylan Doran
818-836-1455
FLOORPLAN FINANCING
Floorplan Xpress
Josh Chandler
503-621-9260
TRAINING
OIADA/NIADA Certified
Pauline Sill
503-362-6839
FINANCING
Credit Acceptance
John Bragg
360-980-2214
19
MEMBER BENEFITS
There is not another association that works harder than
we do to provide its vendors with exposure, leads and
other lucrative opportunities. Please review some of the
following programs and areas that we help promote those
businesses that support OIADA.
Marketing: Opportunity to give coupons to dealer
members, included in all dealer packets. Ad space on
inside pages all presentation folders sent throughout
the year. Meal sponsorships available for Pre-License
classes, Title & Registration classes.
Databases: Access to all OIADA membership databases
for mailings. We require a review of the info that you will
be sending to our members. Associates may have a list
quarterly or 4 times a year. Each time you get a list you
may use it only once for a mailing. Just send us an e-mail
request for current database and we’ll be glad to send to
you once we review your marketing page.
OIADA Magazine & Service Provider Listing: Your
company and contact information will be listed in OIADA’s
Dealer Service Provider Directory in our magazine that
is distributed to around 2000 dealers every month of
the year. We also have great rates for those companies
interested in additional exposure in OIADA’s popular and
well read “Oregon Dealer News”
Website Listing and Link: If your company has a website,
we will add your company link to our company website as
well as listed in Oregon Dealer News.
Regional Meetings (7) and Membership Drives: Many
of OIADA’s Associate Members like to get involved in
helping with OIADA’s regional meetings. Also our auction
hosted membership drives. Those vendors who agree
to participate get the benefit of meeting larger groups of
dealers in one location while being able to establish a
relaxed relationship with future potential prospects.
ASSOCIATION
Special Speaking and Sponsorship Opportunities:
OIADA is always having events going on where the
environment is ideal for sponsors to participate. Some
examples of this are regional meetings, golf tournaments,
auction membership drives and of course our annual
convention and trade show.
Developing Strategic Relationships: Network with
other companies who associate themselves with
our association. Either during our regional meetings,
membership drives or board meetings.
Annual Convention and Trade Show: Participate in our
once a year convention and trade show for maximum
exposure and opportunities. Call for information on
Reception, Tradeshow, Meal and Golf Tournament
sponsor levels.
NEWS
CERTIFIED MASTER DEALER PROGRAM
HELPING DEALERS MANAGE AND GROW BUSINESSES
The CERTIFIED MASTER
DEALER® program was
developed in 2001, in
collaboration with Northwood
University, to help dealers
manage and grow their businesses. Since then,
it has grown into one of the industry’s most
respected training programs.
Dealers who attend this training are
committed to the industry, support ethical
business standards and practices, and are
W W W. O I A D A . C O M
OR_1114.indd 19
leaders in their communities. They bring a wide
range of experience to each class, and leave
with new strategies for analyzing their business
practices and increasing their bottom line.
Instruction is provided by Joe Lescota,
NIADA Director of Dealer Development and
former retail automotive executive with more
than 25 years of frontline dealership, selling
management and training experience. For more
information, please contact Georgia Brown at
(800) 472-8101.
NOVEMBER 2014
OIADA DEALER NEWS
10/30/14 10:08 AM
CONVENTION RECAP
CONVENTION RECAP
20
OIADA DEALER NEWS
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CONVENTION RECAP
21
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OIADA DEALER NEWS
10/30/14 10:08 AM
INDUSTRY
NEWS
vAuto Founder Dale Pollak Named
Poling Chair at Indiana University
N A MED L E A DER- IN - RESIDENCE BY HIS A L M A M AT ER
22
Dale Pollak, founder of vAuto, Inc. and
an alumnus of Indiana University’s Kelley
School of Business, has been named a
leader-in-residence at the school, its Poling
Chair of Business and Government, for the
upcoming year.
“I am honored and privileged to be part of
this prestigious program at the Kelley School
of Business,” said Pollak, who will continue as
executive vice president for Cox Automotive
while serving as the Poling Chair. “I’m looking
forward to engaging Kelley students and
learning as much from them as they might
from me.”
The Poling Chair was established in 1993 by
the late Harold “Red” Poling, a Kelley School
alumnus and Ford Motor Co. chairman and
chief executive officer from 1985 to 1994.
Recipients of the Poling Chair are given the
charge to stimulate discussion in the areas of
leadership, the critical interactions between
private business and government in matters of
public policy, enterprise competitiveness and
economic growth. Pollak will interact with
students and faculty at the Kelley School in
Bloomington and Indianapolis through 2015.
Idalene “Idie” Kesner, dean of the Kelley
OIADA
School and the Frank P. Popoff Chair of
Strategic Management, said she knows
students will be inspired by Pollak, who is
visually impaired.
“Dale often talks about the hurdles you
have to jump through to become a successful
entrepreneur. He has met those challenges in
his career and his personal life. He believes
you shouldn’t let anything hold you back, and
he is a wonderful example of that.”
As vAuto founder, Pollak led the creation
of inventory management solutions and
best practice performance management to
help retail automotive dealerships appraise,
manage and price their new and used vehicles
based on real-time market data. His current
roles with vAuto and Cox Automotive include
strategic planning and product development.
Pollak also is author of three books:
“Velocity Overdrive: The Road to
Reinvention,” “Velocity 2.0: Paint, Pixels
and Profitability,” and “Velocity: From The
Front Line To The Bottom Line” (all New Year
Publishing LLC).
Prior to vAuto, Pollak served as vice
president of sales and business strategy at
Digital Motorworks, the market leader in data
integration and application development for
original equipment manufacturers, mega
dealers and third party providers. He helped
build the company from inception to its
successful acquisition by ADP in 2002.
Pollak earned a Bachelor of Science degree
in business administration from IU and is a
graduate of the General Motors Institute of
Automotive Development. He also earned
a law degree from DePaul University and
was a four-time winner of the American
Jurisprudence Award for top performance in
his class.
CONTINUING EDUCATION PROGRAM
Read & Respond and Certify Below
PROGRAM COMPLETE THIS TEST AND CERTIF Y BELOW THAT YOU HAVE READ THE ARTICLES FOR NOVEMBER 2014.
“GENERATING F&I PROFITS WITHOUT A DEDICATED
F&I PROFESSIONAL”
True/False: Location isn’t important when interviewing a customer.
Which of the following is NOT a basic sales step listed in
the article?
a)The sales associate conducts a needs assessment or interview.
b) Advertising.
c) Product demonstration.
d) Follow up with the customer.
True/False: The sales associates should also employ the use of
sound effects.
“6 BENEFITS OF SOCIAL SELLING”
“GETTING TO KNOW THE LENDER”
True/False: Dealers who maintain strong, effective relationships
with their lenders tend to secure more approvals and on more
favorable terms.
What is most important in maintaining a good relationship
between a dealer and his finance provider?
a)Understanding the relationship is really a balance between
considering the needs of both the dealership and the consumer.
b) Mutual profit.
c) Honesty and transparency.
d)A & C.
e) None of the above.
I certify to OIADA that I have personally read these articles in The Oregon Dealer News Magazine
for November 2014. STOP!! Before you sign and send this form, make sure you have answered and
completed all the quiz questions to receive Continued Education Credits.
What percentage of buyers are influenced by online reviews?
a) 80-95%
b) 55-65%
c) 70-80%
d) 35-50%
My Name _______________________________________________________________(printed)
True/False: One of the benefits of social selling is that once your
salespeople have established their social presence, they can
monitor, listen and engage in conversations around the products
and services the company sells.
Dealer License Expiration Date: (Month)_________________________ (Year)______________
Dealership Name _________________________________________ Dealership # ___________
Signed: _________________________________________________Date ___________________
F A X T O : 5 0 3 - 3 6 4 - 7 3 31 O R M A I L T O O I A D A , 14 7 5 C A P I T O L S T N E , S A L E M , O R E G O N 9 7 3 01
OIADA DEALER NEWS
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