When it comes to loaner programs, opinions are diverse and the debate is robust. Some dealers don’t want anything to do with them while others recognize their value. The concept is simple enough, yet the execution is anything but.

When a service customer brings in their vehicle, your dealership gives them a loaner car for the duration of the repair. Most manufacturers subsidize loaner vehicles for warranty work, and most luxury brands have standards regarding the size of the loan fleet that a dealer must maintain.

For many dealers, OEM contributions set the ceiling for their loaner car program. Other dealers recognize loaners as an effective customer retention tool and have created more generous loaner policies. Let’s consider the benefits of these programs and confront some of the drawbacks — including the expense, the management headaches, and customer abuse — and how to manage them.

1. Understand the Benefits.

Access to loaner vehicles is a major factor in service location choice. Loaners can help close the inconvenience gap created by the distance between your facility and an independent mechanic located closer to your customer’s home.

Additionally, loaner vehicles improve the customer experience and take tremendous pressure off service throughput. A “waiter” is much more sensitive to service delays than a customer who returns to their daily routine in a loaner vehicle.

Loaner programs can also increase dollars per RO. A customer in a loaner vehicle is more likely to approve an additional service request because the extra time required doesn’t affect their schedule. Also, when a customer drives a newer, more decked-out model than they currently own, there is potential for a sale.

2. Turn an Expense Into an Asset.

To optimize your return from loaner vehicles, create policies that leverage their value. For example, loaners should be an explicit closing tool to convert additional service needs. When confronted with a “No,” service advisors should offer loaners, rather than discounts — particularly to waiters.

Also, loaners can be used on an ad hoc basis to relieve waiting room pressure when operations fall behind, rescuing dissatisfied customers. Multiple shifts and expanded weekend hours also provide better loaner utilization, reducing the cost per RO.

How does your loaner program impact your goals to maximize service revenue and improve your customer experience? Calculate the incremental cost and estimate whether you generate sufficient incremental ROs or RO dollars to cover the cost.

If not, think about those trade-offs that hold as much value as possible — expanded coverage for your best customers, for example, or those in certain situations, such as the last visit before warranty end.

3. Run Your Program Like a Rental Fleet.

The majority of dealers are not skilled in managing fleets, which is why many still outsource this function to Enterprise. Poor fleet management results in unnecessary expense and an inadequate customer experience.

To those of us who rent vehicles nearly weekly or have ever used Zipcar, it’s difficult to understand the antiquated sign-out and sign-in procedures at dealerships. We need to look to new technologies to facilitate a more convenient process to better understand when loaner access facilitates or constrains appointments, then invest accordingly to reduce bottleneck.

Finally, if subscriptions become a meaningful part of the industry, dealers will have to become experts in fleet management. We might as well start practicing with our loaner fleets.

When selecting which vehicles to purchase for your loaner fleet, focus on providing consumers “like-for-like.” Most consumers expect to get the same brand or a similar price point. Since our goal is to reduce consumer inconvenience, like-for-like is as much about functionality as quality.

Think about the lifecycle cost of a vehicle, not just the daily depreciation hit. For example, placing a luxury vehicle without a navigation system in the loaner fleet may save you a few dollars a day in depreciation expense, but it delivers a less satisfying experience. Worse yet, the vehicle is likely to sell at a loss or absorb more holding costs once defleeted. These downstream costs often overwhelm the immediate savings in putting an undercontented vehicle in the loaner fleet.

The current industry software that most dealers use to manage their fleets largely focuses on managing contracting and fleet availability. There is a need for a better solution that integrates the process all the way through from online scheduling to pick-up and redelivery.

There is a lot to solve, particularly if you include payments, but there must be better ways to adapt existing technology to create a truly unique experience. The rental industry has relied on rapid return solutions for two decades.

4. Put a Stop to Customer Abuse.

While some customers do abuse the service, most drive respectfully, pay their tolls, and return their loaner in a timely fashion. Habitual abusers should be removed from your program.

It’s important for dealers to establish clear guidelines and make sure customers understand these guidelines. This is better accomplished online than in person, apart from the formal contract. People are more likely to read and acknowledge simple guidelines on their computers than on paper when buried in paragraphs of legalese, particularly when they are anxious to go on their way.

We also need to understand the root cause behind customers trying to take advantage of the dealer. Sometimes they are just inconsiderate people. Access to loaners by repeat offenders should be restricted to the contractual obligation and charged for overage outside policy.

The most frequent abuse is not returning the vehicle in a timely fashion. Again, we should start with clear expectations and then look within. Is it reasonable to expect the customer to return the vehicle before 6 p.m. when we notify them at 5 p.m.? The better we keep customers informed about their completion time, the more likely they can plan their day around redelivery.

Second, we need to look at alternatives, such as Uber vouchers or pick-up services to handle situations such as when a consumer is going to the airport or brought a vehicle home because we missed our promise time.

5. Promote Your Program.

Generous loaner programs should be strategically used and promoted to help dealers build a service brand. Salespeople should clearly communicate their attributes during the selling process.

I have seen dealers bundle loaner vehicle access with unlimited free car washes or free oil changes for life. These dealers then ascribe a value to the package, which they can sell or discount as a closing tool or offer for free to their best customers.

I like this concept because it attaches value to service and removes the “free” or “not available” dichotomy. Many consumers are willing to pay something for the service, particularly if it’s convenient. Rental bills could be discounted based on RO value, aligning additional loaner vehicle costs with the value received.

Online scheduling also has potential for loaner promotion. Some online scheduling tools integrate with loaner management programs with varying degrees of sophistication. Ultimately, online scheduling needs to evolve so that your customers can create their entire writeup and complete the loaner paperwork online. This will require more sophisticated integration than just letting the customer know whether loaners are available.

6. Consider Alternatives.

Providing a loaner vehicle is not always the best option for the customer nor the most economical option for the dealer. Uber, Zipcar, DropCar, or Red Cap could be part of the solution. If your customer just needs to get to work or the airport, Uber may be the best option.

While loaner vehicles will likely remain unique to the franchised dealer value proposition, these other forms of alternative transportation are not, and they could be imitated by independent repair facilities. Therefore, it’s critical that franchised dealers move quickly to incorporate these services into a package of options from which the consumer can choose.

Love ’em or hate ’em, loaner vehicle programs are here to stay. Embrace their potential to help create a service brand, improve the customer experience, and generate incremental customer-pay RO revenue.

Some obstacles must be overcome to create a smooth process. But rather than throw the baby out with the bathwater, consider implementing new technologies, policies, and processes to make your loaner program an integral component of your service operation.

Scot Eisenfelder is CEO of Affinitiv, a marketing technology company serving a dozen automotive manufacturers and more than 5,500 franchise dealers. Email him at scot.eisenfelder@bobit.com.  

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DALLAS — Automotive software provider DealerSocket this week announced the appointment of former General Motors (GM) executive and current Global Team Blue (GTB) COO Kim Brink to its board of directors.  

“We welcome Kim’s deep understanding of the automotive industry, her strategic mindset, and her rich marketing expertise,” said Sejal Pietrzak, president and CEO of DealerSocket. “We look forward to leveraging Kim’s unique strategic perspectives and insights about partnering with automotive dealerships and original equipment manufacturers (OEMs). She will bring significant value to DealerSocket, our board, and to our customers.”

Brink began her career at GM and led the repositioning of both the Chevrolet and Cadillac brands. After more than 20 years at GM, Brink left to lead marketing for NASCAR before joining GTB, the dedicated group of agencies responsible for the Ford Motor Co. account.

Additionally, Brink has championed multiple award-winning creative platforms and was recognized by Automotive News in 2016 as one of 100 Leading Women in the Auto Industry.

“DealerSocket is focused on supporting dealerships with an integrated suite of software to simplify the experience of selling and servicing vehicles,” said Brink. “I look forward to utilizing my automotive and marketing experience to help DealerSocket continue to serve the automotive industry and help dealerships focus on the next generation customer experience, grow, and succeed.”

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ATLANTA — In the race for self-driving cars, building consumer trust when it comes to safety is just as important as building the technology. According to findings from the Cox Automotive’s “Evolution of Mobility Study: Autonomous Vehicles” study, consumer awareness of driverless vehicles has skyrocketed and desire for autonomous features is high.

Conducted by Vital Findings on behalf of Cox Automotive, the study found that 84% of the 1,250 consumers surveyed online in May still want the option to drive themselves. However, only 16% of respondents said they would feel comfortable letting an autonomous vehicle drive them without the option of being able to take control. The number of respondents who believe roadways would be safer if all vehicles were fully autonomous vs. operated by people decreased 18 percentage points in just two years.

“As awareness around the development of autonomous technology increases, we’re seeing some dramatic shifts in consumer sentiment,” said Karl Brauer, executive publisher of Autotrader and Kelley Blue Book. “People now have a deeper understanding of the complexities involved when creating a self-driving car, and that has them reconsidering their comfort level when it comes to handing over control.”

With mobility services as a primary focus area, Cox Automotive continues to study the trends in alternatives to vehicle ownership, autonomous vehicles and other automotive technology, and this study reveals the growing shifts in consumer perception for the various levels of autonomy.

Results of the study indicate that self-driving vehicles are seen as less safe by consumers compared to two years ago, most notably with vehicle autonomy preference shifting from Level 4 to Level 2 — the level currently available in most new vehicles.

The Society of Automotive Engineers currently recognizes five levels of vehicle autonomy, ranging from Level 0 (human-only control) to Level 5 (no human control). In a similar 2016 study from Kelley Blue Book, when survey respondents were asked to make a choice between the different levels, Level 4 autonomy hit the “sweet spot” by providing all the benefits of full vehicle autonomy without stripping away the option of driver control. Now attitudes around self-driving technology have reversed, with nearly half of consumers in Cox Automotive’s new study indicating they would never buy a Level 5 vehicle (49%, up from 30% in 2016).

By demographic, Generation Z (12- to 22-year-olds) and Millennials (23- to 36-year-olds) are less hesitant, with less than half of respondents from those segments saying they would never purchase a Level 5 (Generation Z at 48% and Millennials at 39%).

The likely driver of this change in consumer sentiment toward autonomous vehicles are recent high-profile accidents involving autonomous vehicles, cast a shadow on driverless appeal and software. Study respondents who were unaware of those incidents, including the self-driving fatality in March 2018, are just as likely as those aware of the incident to believe roadways would be safer if all vehicles were operated by people as opposed to autonomous vehicles (54% vs. 55 percent, respectively). Three-fourths of consumers say fully autonomous vehicles need real-world testing to be perfected, but 54% prefer this testing take place in a different town or city from where they live, according to Cox Automotive’s March 2018 self-driving car incident consumer poll.

Despite some negative media coverage, consumers want, and expect, semi-autonomous features, particularly those centered around safety, signaling a disconnect between consumer perception of safety tech features vs. fully autonomous vehicles. In fact, 54 percent of respondents agree that semi-autonomous features make people better drivers. Collision warning alert systems and collision avoidance systems are top-ranked features considered a must-have in the next vehicle purchase/lease.

“There is a major opportunity, and a real need, for automakers and mobility providers to help educate consumers and further guide autonomous vehicles in their development,” said Joe George, president of Cox Automotive’s mobility solutions group. “Autonomous safety feature adoption will be critical in creating future autonomous technology advocates.”

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“We are delighted to see six new members deepen their investment in automotive open source,” said Dan Cauchy, executive director of AGL and The Linux Foundation. “As we continue to advance our platform through the release of AGL UCB 6.0, expanding our global community is crucial. We look forward to further leveraging their expertise in embedded automotive technologies as we advance the connected car ecosystem.”

AGL will participate in this year’s Open Source Summit North America, which will be held Aug. 29–31, in Vancouver. Open Source Summit connects the open source ecosystem under one roof in a unique environment for cross-collaboration between developers, sysadmins, devops, architects and others who are driving technology forward. Dan Cauchy will present “Accelerating Connected & Autonomous Vehicles Through Open Source Software” on Thursday, Aug. 30.

“Spireon has nearly 4 million vehicles connected to our NSpire platform, and data from more than three hundred twenty-six billion driving miles under our belt, so we fully understand the challenges of a fragmented telematics ecosystem that the AGL project seeks to overcome,” said Rick Gruenhagen, CTO of Spireon. “A standardized software stack will accelerate autonomous and other connected vehicle benefits by helping solution providers like Spireon gain secure access to in-vehicle functions and data that have been locked in OEM-specific implementations until now.”

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In Part 1 of this series, we discussed the prevalence of missing personal safety gear and improper waste and parts disposal and recycling. Let’s continue with a tour of your facilities and a hard look at your training program and corporate culture.

1. Facilities

Look for hazardous conditions. You dealers in the Northern states know an icy service drive and customer walkway when you see one. You must know your facility. A leaky roof is not a big deal in most cases — unless there is a river of water pouring through — and can be dealt with as time permits. If the leak affects an electrical box, that’s a different story.

Look inside the compressor room from time to time. Check the operating certificate. Look for stuff that shouldn’t be stored in there. Who knows? You might even find Jimmy Hoffa.

Look for clutter, equipment blocking other equipment, improper storage of hazardous materials, overflowing trash bins and cans, technician storage of spare parts for their hobby and side jobs, and any other items that don’t belong in your shop.

Finally, take a step back. Is your signage current, appropriate, presentable, and readable? Do the signs have a purpose or are they just hanging there on the wall because they have always hung there? Look at your advisors’ workstations from the customer’s point of view. Are any of them cluttered? Messy? Would you want to work with the advisor behind that workstation?

2. Training

The fourth area is training. Every position in your dealership has a safety training requirement. It could be required by the factory, the government agencies that monitor dealership operations, or both. You can’t even operate the vehicle lift without annual certification.

Many stores go out of compliance due to ignorance, apathy, or a change in personnel. It is best to onboard all new hires with a few days of compliance training rather than trying to get them to do it later. Once they start working, it will become nearly impossible to pry them away.

Factory mandated training is typically easy enough to monitor and schedule. You should be getting constant reminders. You just need to pay attention.

Compliance training is a different story. Many people in your store are out of compliance right now — I guarantee it! I’ll give you an example: Have you hired a shuttle driver in the last year? Did they attend a safe driving course, whether online or in a seminar? Get them trained, recheck their MVR at least once a year, and make self-reporting of new moving violations a condition of employment.

3. Culture

Your corporate culture must reflect the importance you place on ongoing safety and compliance training. Your employees must understand the value and why they need it. Without such a culture in place, problems are ignored until they become crises. Accidents become commonplace. Managers put off training and certifications lapse.

Leadership is not a top-down program; it is a lift-up program. The service department is no exception. Get your team onboard by building value in safety. Your advisors and techs will be safer, happier, and more productive, and the time you invest will pay off in improved fixed ops profitability and retention.

Leonard Buchholz is the founder of CarBizCoach. He helps dealers meet performance objectives in service sales, CSI, and profitability, and has extensive experience in evaluating fixed operations and providing corrective training and guidance. Contact him at leonard.buchholz@bobit.com.

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As a testament to his long-standing commitment to client service and his practice in the industry, Richard P. Hackett is being recognized by his peers for the 25th year. In addition, Thomas B. Hudson is receiving the award for the 10th year.

The following Hudson Cook attorneys will be listed in the 2019 Edition of The Best Lawyers in America:

• Robert A. Cook (first included in 2019)
• Ronald D. Gorsline (2011)
• Richard P. Hackett (1995)
• Thomas B. Hudson (2009)
• Eric L. Johnson (2012)
• Curtis Linscott (2019)
• Wingrove S. Lynton (2019)
• Thomas P. Quinn Jr. (2013)
• Ryan S. Stinneford (2011)

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OMAHA, Neb. — Hackers are targeting F&I agencies, says Jeff Wanning, senior vice president of operations for the Central States Family of Companies, including four CSO-affiliated agencies in the past three weeks.

“We’re a little bit alarmed,” Wanning said. “I realize they may or not be targeting agencies specifically, but agents need to be aware of how to protect themselves.”

In several cases, the hack was initiated with an apparently official email request for “validation” of the recipient’s Microsoft Outlook account. If an agent or agency staff member were to click on the link within, the person behind the initial message could begin using their accounts to scan old messages for valuable data and send new messages to request funds.

“The first email we got actually made sense. They knew the vernacular. Up until the time they mentioned Hong Kong, we thought it was legit,” Wanning said, suggesting that agents invest whatever resources are needed to train staff against clicking on phishing messages. He said CSO relies on KnowBe4, one of several companies offering online training. “We require each of our employees to go through the 25-minute training module and the test at the end, and every month, the system sends fake scam emails, and we track who clicks on them.”

John Braganini of Great Lakes Companies confirmed his agency was among those affected by the recent wave of hacks. He said an IT expert found the Portage, Mich.-based company’s database was not compromised, possibly indicating a third party, such as Facebook, was the source of the breach.

“It looks like someone got into my contact directory and had been sending out emails, supposedly from me. They put my name into an email and sent an invoice to about 20,000 people,” Braganini said.

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TORRANCE, Calif. — F&I and Showroom has extended the nomination period for its 2018 F&I Dealer of the Year contest (sponsored by American Financial & Automotive Services Inc.) to Aug. 24. Dealership employees, general agents, vendors, finance sources, and F&I product providers can nominate their dealership or dealer client by clicking here. 

Now in its 17th year, the F&I Dealer of the Year and F&I Pacesetters program recognizes operations with highly profitable F&I departments that demonstrate a commitment to regulatory compliance and customer satisfaction. Dealership employees, general agents, vendors, and F&I product providers are encouraged to nominate their stores and dealer clients for the award.

The magazine will first select six finalists, or F&I Pacesetters of the Year. They will be featured in the magazine’s conference issue and recognized during a special awards ceremony at Industry Summit 2018, which is scheduled for Oct. 8–10 at the Caribe Royale Orlando in Orlando, Fla.

At the conclusion of the ceremony, one finalist will be named the 2018 F&I Dealer of the Year. That operation will appear on the cover of F&I and Showroom’s December 2018 issue, which will feature an extended profile on the winning organization.

To nominate a dealership or dealer group, fill out the contest’s nomination form as completely as possible. List any and all awards or certifications earned by the dealership and its F&I team, as well as describe in detail the process followed by the operation’s F&I staffers. Be sure to note whether the dealership or group employs any special compliance process, such as the National Automobile Dealers Association’s Fair Credit Compliance Policy & Program, or has updated its sales and F&I processes to address new buying habits or to improve the customer experience.

Consumer ratings on DealerRater, Yelp, Google, and Facebook are also considered during the judging process, as well as an operation’s standing with the Better Business Bureau.

For more information or to nominate a dealership or dealer group, click here.

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ORLANDO, Fla. — Biweekly loan processing provider US Equity Advantage announced that Greg Leonard has joined its leadership team as CFO. Leonard has more than 30 years of financial, accounting, and leadership experience with both domestic and international companies, including serving as CFO for Hard Rock Café International, Signature Flight Support, and Floor & Décor Outlets of America.

Leonard is responsible for overseeing USEA’s finance and compliance departments where he will ensure the necessary resources and disciplines are in place to support the company’s continued growth in the automotive market. He will also work closely with state banking departments on the money transmission audits that occur annually with each of the 38 states where USEA holds a money transmitter license.

“Greg brings tremendous skills to our finance and compliance teams from his experience working with large and complex organizations,” said Robert Steenbergh, CEO of US Equity Advantage. “As US Equity Advantage continues to grow, we’ll be well positioned to meet our goals moving forward with Greg as CFO. He will also be very involved in helping to shape the strategic direction of the organization.”

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ORLANDO, Fla. — Organizers of the upcoming Industry Summit announced that Rick McCormick, a top F&I trainer and a prolific speaker and writer, will handle emcee duties for this year’s event, which will be held Oct. 8–10 at the Caribe Royale Orlando in Orlando, Fla.

McCormick said the theme of this year’s event, “Protect the Future of F&I,” illustrates the importance a conference dedicated to preserving F&I production and profitability as disruptive technology and buying habits threaten that department’s very existence.

“I always leave the Summit feeling challenged to do better and equipped with the tools and specific assignments I need to make sure that happens,” he said. “Never has there been a more strategic time for our leaders to assemble. The industry can’t survive without us, but we need to have a path forward.”

McCormick is an in-demand speaker and a valued contributor to F&I and Showroom and Agent Entrepreneur magazines. He serves as national account development manager for Reahard & Associates Inc. Led by founder Ron Reahard, the company provides F&I training in dealerships, at workshops and events, and online.

“Rick’s passion for this business and his love of the people that inhabit it — from dealers and F&I professionals to car buyers — are palpable whenever he takes the stage,” said David Gesualdo, show chair and publisher of the Bobit Business Media group of dealer publications, which includes F&I and AE. “He will set the tone for the show and we thank him for taking on this important job.” 

Registration for Industry Summit 2018 is open at the event’s website. Early-bird pricing ends Sept. 20. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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When people are talking to a stranger who’s trying to get them to buy a $40,000 vehicle, most are naturally cautious about what they say. That’s why you so often hear such excuses as “We’re just looking” or “No, just killing time” when you first meet them.

Wouldn’t it be great if everyone came in with their preferred make, model, color, and equipment in mind and then told you what they’d actually settle for in the end? Well, we all know that ain’t happening.

To make a sale, you have to learn all that on the fly in order to help them get as close as possible to a perfect vehicle. When they’re on the right car, they try harder to buy and pay more than when you stick them into something based on price. To get there, you have to perfect your showroom communication skills. Here are three ways to do it:

1. Read Your Customer Like a Book.

For vehicle sales professionals, communication means asking the right questions at the right time. But wait! There’s more. You actually have to listen when they talk. While I had my accessory business in my two years out of sales, one of the best books I read was “How to Read a Person Like a Book” by Gerard Nierenberg and Henry H. Calero.

I was already somewhat aware of people’s expressions. I could spot when people were happy or sad or when trouble was coming. But as I learned more, I started watching customers and salespeople talk while I was putting “stuff” on cars. If I could hear them, it helped. But even when I couldn’t, I could easily see whether the sale was getting closer or falling apart — just by watching.

When people are uncomfortable, the signs are everywhere. They step back. He crosses his arms and she clutches her purse, and there aren’t any smiles. It was funny to watch the signals couples give each other when they’re ready to go. You know, that slight elbow nudge or that backward nod with that mini frown that says, “Let’s ditch this guy and get outta here.”

When they’re comfortable, the opposite happens: They smile, make more gestures, lean forward when you’re working a deal, or, like a woman I demo’d on a “Z” said to me as she got behind the wheel, “Hold my purse for me, Hon.” You can just tell when it’s going well.

When I was close enough to hear, it’s amazing how customers are saying all the right things, but salespeople keep telling them everything they know and can’t stop talking, so customers get bored and leave.

Start watching other salespeople with a customer. Even if you can’t hear, you can see whether the salesperson is listening or waiting to talk. When they’re listening, it shows. When they’re just waiting to talk, you can see the shallow breathing, they can’t stop the “Uh huh, uh huh” and nodding as they try quietly but urgently to say “Please stop talking so I can talk.”

2. Mind Their Tone and Nonverbal Cues.

There’s more! What customers say and the body language they exhibit helps, but their tone and inflection can give you even more clues. For example, a salesperson asks Bob what he thinks about the truck. Bob crosses his arms and with a “Whatever” tone and inflection, says, “Yeah, it’s nice.” If the salesperson only hears the words and tries to close the sale at that moment, they will fail.

Most people are very surprised at the stats on effective communication:

• Only 7% is verbal.
• 38% is through our tone and inflection (or “how” we say the words).
• The biggest share, 55%, is through our body language.

Yes, as crazy as it sounds, selling requires good communication skills, but most of us never develop those.

3. Close Your Mouth, Shut Off Your Brain, and Listen.

So here’s the big tip of the day: Stop thinking when people are talking. Instead, listen to really understand what they’re saying. Then, as you’re listening, also pay attention to body language and how they’re saying those words.

That’s why it’s so critical to develop your skills now. No matter what your next customer says or what they mean, you’re prepared to respond with the best response and the best follow-up question to keep your sale moving forward.

Just don’t put off more success. Do something now to improve.

Joe Verde is the president of Joe Verde Sales & Management Training Inc. and an award-winning trainer who has worked in the car business since 1973. Contact him at joe.verde@bobit.com.

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CARMEL, Ind. — Auction and remarketing services provider ADESA (div. KAR Auction Services Inc.) announced that Brenda Aden has been named general manager of ADESA Brasher’s, located near Sacramento.

“Brenda has extensive experience in auction operations, employee development, and customer service — serving as an example to those on her team and a true advocate for our customers,” said Srisu Subrahmanyam, COO of ADESA. “During her more than 20 years in the industry, she has worked in nearly every aspect of the auction business, established strong industry relationships, and fostered a customer experience-focused culture.”

Aden has been the general manager at ADESA Las Vegas since 2016, and during her tenure the auction was honored as a “Best Auto Auction to Work For” by Auto Remarketing and earned numerous company awards. In July, Aden was recognized as one of Auto Remarketing’s "Power 300" for 2018.

Aden began her auto auction career as a block clerk in Denver and quickly took on responsibilities within the front office and floor planning departments. She transitioned into managerial roles at locations in Orlando and Las Vegas. She became an assistant general manager during the opening of Premier’s Las Vegas Auction. Aden joined ADESA in 2010 and played a key role in opening the ADESA Las Vegas facility in 2011.

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CARMEL, Ind. — The first half of 2018 has been a strong year for used vehicle values, and a growth in upstream remarketing is playing a helpful role.

Various factors had market analysts predicting that used vehicle values would suffer in 2018 — one of the largest factors being the expected off-lease tidal wave that would bring a surge in supply of three-year-old vehicles. The tidal wave hit, but the market has so far able to absorb the extra supply. Tom Kontos, chief economist for KAR Auction Services, believes upstream remarketing is the reason.

“We were really thinking there would be more impact due to supply growth this year. The remarketing industry itself has done a really good job of spreading the volume into various channels,” said Kontos. “Cars that used to end up at auctions are being sold upstream at the grounding dealers. Off-lease units don’t make it to auction; they get sold right at the turning point.”

Kontos expects the rise in upstream remarketing to continue, which is good news for used-vehicle values as more off-lease units return to market in the next two years.

Depreciation through the first half of 2018 stands at 13.7%, which is much lower than the 16.3% rate recorded one year ago. According to Kontos, that means used-vehicle values are performing about 3% better this year than they were in the first half of 2017.

The way things have played out has surprised Anil Goyal, executive vice president of operations for Black Book. He predicted that depreciation would be higher this year. The executive agrees that growth in upstream remarketing has helped, but he believes the ride-sharing business has helped as well.

Used vehicles make ideal vehicles for drivers in the ride-sharing environment due to their lower acquisition costs and availability, he noted.

As the ride-sharing business continues to grow, it’ll be another factor helping used-vehicle values stay in line as supply continues to grow, as more drivers in the business segment will mean more demand for the extra supply. 

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ATLANTA — Used-vehicle sales continued their strong performance in the wholesale market in July, as an "abnormal bounce" that began in June continued through July with a 1.51% increase in overall values. The increase brought the Manheim Used Vehicle Value Index for the month to 136.9, a 5.1% increase from a year ago.

Pricing from the Manheim Market Report (MMR) increased as a result of "a strong economy at its peak, with mounting affordability challenges for the consumer that favor growth in used-vehicle sales at the expense of new.

"The catalyst for even stronger price movement this summer is the fear of import tariffs leading to higher prices in the future,” the firm noted in its report. “Higher prices and the related declining level of supply create a psychological feedback loop for consumers, encouraging buying now with the expectation that prices may be higher later.”

The past year has brought price gains in all of the major market segments, and more affordable vehicles have seen the greatest increase in value. Compact cars and midsize cars have outperformed the market, while vans, utility vehicles, and pickups have underperformed the overall market.

Used-vehicle sales volume increased by 3% on a year-over-year basis in July. The annualized pace of used-vehicle sales is up 1% over last year, led by franchised used-vehicle sales and private party used-vehicle sales. Manheim's estimate of the July used SAAR of 39.2 million would be the strongest July in six years.

New-vehicle sales in July fell 3% from a year ago. July’s SAAR came in at 16.7 million, which was flat vs. last year’s 16.7 million SAAR. July is just the second month this year the SAAR came in below 17 million. Cars continue to see sharp declines as sales in July fell 17% compared to last year. Light trucks outperformed cars in July and were up 4% year over year. New vehicle sales on a year-to-date basis are up 1% vs. last year, according to Manheim.

Fleet sales have bolstered the new vehicle market in 2018, but fleet purchases declined in July relative to June. Despite the decline, the volume of fleet sales was up 26% from a year ago and 9% year-to-date. Retail sales are down 0.2% year-to-date, but July saw the strongest retail SAAR (14.7 million) for the year.

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Across all lender segments (luxury captive, mass market captive and noncaptive), lender relationship is the heaviest-weighted driver of satisfaction.

“If lenders can ensure credit staff is readily available and knowledgeable, they will see a boost in dealer satisfaction,” said Jim Houston, senior director of the automotive finance practice at J.D. Power. “Satisfaction declines by 163 points, on a 1,000-point scale, when dealers are not able to reach the credit staff. Additionally, if lenders can communicate the best contact for dealers to reach out to for non-traditional questions, the resolution time decreases, which will, in turn, increase dealer satisfaction.”

The 2018 U.S. Dealer Financing Satisfaction Study is based on responses from 4,476 automotive dealers. The study was fielded between April and May 2018 and measures auto dealer satisfaction in four segments of lenders: noncaptive, captive mass market, captive luxury market, and floor planning.

The noncaptive analysis evaluates the dealer/lender relationship across three factors: relationship, provider offerings, and application/approval process. In the captive mass market and luxury segments, four factors are evaluated: relationship, provider offerings, application/approval process and lease return. Three factors are measured in the floor planning segment: relationship, portfolio management, and provider credit line.

The following are the rankings from the firm’s 2018 study:

• Captive Luxury Segment: Mercedes-Benz Financial Services ranked highest in overall dealer satisfaction (976), followed by Audi Financial Services (944), and Infiniti Financial Services (942).

• Captive Mass Market Segment: Volkswagen Credit ranked highest in overall dealer satisfaction (956), followed by Subaru Motors Finance (928) and NMAC (901).

• Noncaptive Segment: Citizens One Auto Finance ranks highest in overall dealer satisfaction (921), followed by TD Auto Finance (917), and Chase Automotive Finance (869).

• Floor Plan: TD Auto Finance ranks highest with a score of 994, followed by Mercedes-Benz Financial Services (989) and Volkswagen Credit (984).

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ATLANTA — Cox Automotive announced the formation of Mobility Solutions group, a new business division focused in part on mobility as a service for consumers and fleets. It will also house the newly acquired Clutch Technologies, a technology platform powering subscription access for the automotive industry.

“Cox Automotive is continually evolving — delivering digital retailing solutions for the immediate term while developing and investing in solutions that will fuel new models for consumer mobility and enable fleet management solutions well into the future,” said Sandy Schwartz, president of Cox Automotive. “The future of mobility as a service is a massive business opportunity, with some estimates at well in excess of $1 trillion by 2030. Our goal is to grow our presence in that part of the business and help all our partners and clients successfully navigate the many new opportunities.”

Cox’s Mobility Solutions Group will be led by President Joe George and already includes the Autotrader, Dealer.com, and Kelley Blue Book brands. David Liniado, vice president of new growth and development, Jenny Bedard, head of finance, and Vince Zappa, president of Clutch Technologies, will report to George and help build a team to further develop Cox Automotive’s mobility capabilities.

“Cox Automotive has played a large role in introducing vehicle subscriptions to the marketplace,” said George. “And, we’re already pros at reconditioning, managing vehicles as assets, perfecting the consumer experience and developing elegant software solutions to make complex operations more efficient and profitable. We’re looking forward to helping clients disrupt the traditional car-buying and ownership models in ways that are advantageous for their businesses.”

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Reid brings nearly two decades of diverse automotive experience to her new role, working for and with dealerships, industry associations and automotive finance companies. She joined Equifax Automotive Services in April of 2013 from the automotive lending industry, where she spent six years focused on the OEM and indirect lending business for JP Morgan Chase.

Reid also spent three years working with large automotive strategic partners and resellers; before that, she spent two years in product marketing for Equifax Automotive Services. She holds a degree in automotive marketing and management from Northwood University.

“We’re excited to have Jenn leading our U.S. automotive marketing team as her rich and diverse expertise will help us continue to build the right solution sets so we can deliver value that amplifies profit potential for our partners,” said Craig Crabtree, senior vice president and general manager of Equifax Automotive Services. “Jenn has lived and breathed nearly every aspect of the broader automotive ecosystem, and because of that she is extremely qualified to lead a dedicated team of professionals committed to driving great value to the industry.

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George Orwell immortalized the notion of an all-seeing and intrusive government as “Big Brother” in his classic novel “1984.” The recent Supreme Court decision in Carpenter v. United States reminds us that Big Brother does, in fact, exist. And some of the same issues that arose in Carpenter can arise at your dealership.

For those of you who don’t read Supreme Court decisions as part of your normal workday, here’s the Carpenter case in a nutshell: Every time your phone connects to a cell tower, it generates a time-stamped record called cell site location information. Timothy Carpenter was convicted for four robberies, in part because his CSLI placed him near the scene of those four robberies at the time they were committed.

In short, Big Brother was watching. Carpenter was able to get his conviction overturned, arguing that his CSLI could not be obtained without a warrant based upon probable cause. Five justices agreed and today he is a free man (who, presumably, will never again take his cellphone to “work”).

We live in a connected, archived digital world. What rights do dealers have to listen to, record, and review employee and customer communications in such a world? What can a dealer do as Big Brother?

The short answer is “a lot.” But there are legal rules and limits to such behavior, as well as ethical and business considerations.

1. Incoming Calls to the Dealership

Incoming calls to a dealership may be monitored and recorded, provided the dealership notifies callers of this fact. We are all familiar with the standard “This call may be monitored or recorded” disclaimer when we dial a customer service number. If you intend to monitor or record incoming phone calls, you should adopt this practice.

In addition, employees need to be made aware. In writing is best; it may be included in your dealership’s employee handbook, and a process put in place to document that the employee received it and agrees to be bound by its terms.

2. Outbound Calls

Outgoing calls are more difficult to monitor or record than inbound calls for the obvious reason that the employee making the call must provide the disclosure. Ensuring that is difficult, and the downside is huge: allegations of illegal wiretapping.

When it comes to consent to recordings, there are two main positions: one-party consent and all-party consent. In states with the former, only one party to the recording (presumably the caller) needs to consent to the recording. Consult the map below. If you are in an “all-party” state, everyone on the call must know of the recording and consent to it. Since employees do not always make the required disclosure, most employers in all-party consent states only monitor incoming calls to avoid litigation.

3. Reasonable Expectations of Privacy and the ECPA

Employees have no reasonable expectation of privacy even when employers have promised it. In Smyth v. Pillsbury (1996), the court held that an employer could read personal emails even when it had told employees it would not.

In Quon v. City of Ontario (2010), the Supreme Court held that a police officer had no expectation of privacy in the text messages he sent over an employer-issued device, even though his commanding officer promised him his messages would not be monitored. The court reasoned that the officer should have ignored what his commanding officer told him and relied upon the boilerplate language in a form he was given with the device.

Dealerships have a legitimate interest in ensuring their employees treat customers well on the phone and don’t make misrepresentations in those calls. From this flows the general right to monitor and record calls as described above. There is a federal law, however, that puts some limitations on that right. The Electronic Communications Privacy Act restricts individuals and organizations, including dealerships, from intercepting personal wire, oral, or electronic communications.

Under the ECPA, even if a call is being monitored for legitimate business reasons, if a personal call comes in, the employer must hang up as soon as it becomes obvious the call is personal. A dealership may monitor a personal call only if the employee knows the particular call is being monitored — and consents to it.

All of this assumes the calls (or emails) are passing through dealership phone equipment or computer networks. Recording private calls made on employee-owned cellphones remains a very big no-no, unless the employee consents.

What if employees consent to having their own phones monitored? If they consent, you could install some truly creepy software. How creepy? Imagine every text message they send, every website they visit, and every phone call they make being logged and forwarded to you. Even their locations can be recorded and disclosed. Think I’m making this up? Check out Mobile-Spy.com and see for yourself.

4. Video Monitoring

When I was a boy (back in the Carter administration), video monitoring was fairly rare. Cameras were big and clunky, low-resolution, and black and white. Recording happened on VHS or Betamax tapes, which were limited in their capacity. And all of it was very expensive, so video recording was most often seen in connection with high-security environments and, of course, casinos.

But now, video recording equipment is small, high-resolution, and in living color. It is also cheap, and therefore showing up in ever more locations, such as building lobbies, 7-Elevens, and along highways — and, incidentally, within dealerships.

It is now possible for you to record and store virtually everything that happens anywhere on your premises. Keeping an eye on inventory on the lot and in the parts department seems innocuous enough. But how about the restrooms?

This gets us back to the concept of reasonable expectation of privacy. The expectation of privacy in public spaces is low. The expectation of privacy in the bathroom is high. Most of the dealership space falls somewhere in between those two extremes — the F&I office, for example.

Articles have been written about the wisdom and procedures for recording the F&I transaction; I will not repeat their substance here. But for all the reasons set forth above, be sure to give notice to customers before video (and audio) recording of the delivery process. And if you’re conducting video surveillance on dealership property, post that fact around the perimeter and near the building entrances.

What all this drives home is that Big Brother is, in fact, watching. And if you want to be Big Brother, you need to be very, very careful.

James S. Ganther Esq. is the co-founder and CEO of Mosaic Compliance Services. He is a dealer compliance expert and a prolific writer and speaker. The author gratefully acknowledges the assistance of Tony Molino Esq. in researching the legal precedents and regulations discussed in this article. Email Ganther at jim.ganther@bobit.com.

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You probably walk through your dealership every day, greeting managers and staff, looking around, and asking questions. On your next tour through the shop, the parts department, the service drive, and the waiting room, you are likely to notice obvious issues, such as missing fire extinguishers and major spills. But many issues are off the dealer’s radar, and some represent serious violations of federal, state, and local safety standards that can turn into major headaches if they aren’t uncovered in time.

In the first of this two-part series, we’ll discuss two common violations you can identify and address immediately: personal safety gear and waste and parts disposal and recycling.

1. Safety Gear

Every employee who enters your service department requires safety gear and safety training for certain situations — whether or not they work in the shop full-time. Here are seven common violations you can check for today:

• Eye safety. Every technician, advisor, and parts person should be issued a pair of safety glasses. They should acknowledge, in writing, that they have them and agree to use them. There should be a spare box of glasses for anyone else who enters the shop.
• Ear safety. Same as above: Issue earplugs and have extras readily available. Some of the loudest noise in the shop comes from the technician’s hand tools, not from revving engines.
• Dust mask. Anytime there is going to be an airborne discharge of material, whether solid or gas, there should be a mask available and in use.
• Protective gloves. Some jobs require the use of gloves. No arguments!
• Shoes. When protective or nonslip footwear is required, they must be worn.
• Hair. There’s nothing wrong with long hair, it just needs to be tied out of the way or tucked under a hat.
• Uniforms. It may sound silly, but techs and advisors in jeans is not a good look, and shop uniforms are specifically designed to minimize the danger of moving mechanical components. Spring for the pants or coveralls and make sure they are worn.

2. Disposal and Recycling

If you are walking through your shop and you notice an unattended pile of Oil-Dri in a service bay, that is a violation. It sounds petty, but it could be a signal of other violations that are more serious, and it could demonstrate the culture of your shop when it comes to safety and hazardous waste compliance.

Since everything in a dealership disposal stream is regulated, ask your service manager plainly: “Are all your waste disposal manifests up to date?” If there is hesitation or avoidance on the manager’s end, that might be something you would want to investigate.

Look at the waste disposal tanks. Are they free from clutter, or is there a pile of old soiled rags on top of them, empty parts boxes, drain pans with oil or coolant, old parts or empty food wrappers, or anything else that doesn’t belong there? There should not be any spills on the ground around them either. And there must be a clear pathway so they can be accessed in an emergency.

Finally, check your recycling program. Batteries, components with circuit boards, and tires, among other items, are subject to strict guidelines. Ask your service manager whether any of these items are going out with the trash. Any hesitation or avoidance on their part are clues your disposal stream might be out of compliance.

Check back Wednesday for Part Two of our series, in which we will cover facilities, training, and culture.

Leonard Buchholz is the founder of CarBizCoach. He helps dealers meet performance objectives in service sales, CSI, and profitability, and has extensive experience in evaluating fixed operations and providing corrective training and guidance. Contact him at leonard.buchholz@bobit.com.

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The industry originated 7.96 million auto loans during the period totaling $179.7 billion, a 0.3% and a 2.7% increase in both accounts and balances. Subprime originations totaled 1.841 million during the period for a total balance of $32.9 billion, representing 23% of total originations and 18.3% of total balances.

During the first quarter of 2017, subprime's account and balance of total originations was 24.3% and 19.5%, respectively.

"Consumer Credit Trends show that originations through April of this year, as reported through June, both in terms of accounts (+0.5%) and balances (+2.3%) are up over the same time last year," said Gunnar Blix, deputy chief economist for Equifax. "Our data indicate that a bump in lease activity, as well as a continued shift toward affordable used cars, may be driving the trend, and these increases are primarily being driven by customers with prime credit.”

According to Equifax, the average amount financed in April was $22,917, a 3.6% increase compared to April 2017. The average subprime loan during the same period was $18,411, a 2.3% increase compared to April 2017.

On the least front, more than 1.31 million leases were originated during the first quarter totaling $21.34 billion — a 1.3% increase in accounts but a 1% decrease in balances compared to the year-ago period. According to Equifax, that was enough to account for 14.2% of all auto loans originated during the period, and 10.6% of balances.

The firm also noted that 124,300 of those leases were originated to consumers with subprime credit for a total balance amount of $2.14 billion — a 2.1 decrease in accounts and a 2.3% decline in balances. Subprime’s share of total leases was 9.5% during the quarter, with balances accounting for 9.8%.

The average balance of all leases originated in April was $16,329, a 3.04% decrease from April 2017. The average subprime lease amount during the same timeframe was $17,333, a 1.19% decrease from April 2017.

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In a post-sales peak automotive retail climate, in which it’s reported dealers pay approximately $32 per day on average in holding costs for vehicles that sit on lots, dealers simply cannot afford to let time kill their bottom line, said Todd Hutto, vice president and general manager of Dealertrack’s Lender DDS/CMS Solutions division.

“Identifying profit opportunities for dealers and lenders through our network continues to be top-of-mind for Dealertrack,” Hutto said. “We’ve seen titled vehicles sell at a faster clip in our current environment, creating a clear opportunity for dealers looking to move inventory faster, ultimately reducing holding costs to boost profitability.”

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MOUNTAIN VIEW, Calif. — Connected device management and security provider Zingbox announced new research that shows how a car’s driver can be subject to cybersecurity attacks through the car’s “infotainment” system, the embedded operating system powering the iPad-looking displays found on many recent new vehicles.

Daniel Regalado, Zingbox’s principal security researcher, has agreed to demonstrate the vulnerability at the DefCon 26 Car Hacking Village in Las Vegas tomorrow. In a statement released today, the company revealed that Regalado teamed with independent researchers Gerardo Iglesias and Ken Hsu to break into a car’s infotainment system and reverse-engineer its main components with one goal in mind: to infect the operating system with malware and prove the system could be controlled remotely through SMS messages, using the driver’s own phone to compromise their personal data and safety.

“In order to provide real-time security to all IoT devices, Daniel Regalado and others on Zingbox’s research team continuously push the boundaries of IoT vulnerability research,” said Xu Zou, the company’s CEO and co-founder. “We’re glad to share our latest findings with the broader security community and raise the awareness of the impact of IoT device vulnerabilities.”

An auto infotainment system depends on the Internet of Things to operate. The fact that an infotainment system can be breached suggests the need for stepped-up IoT cybersecurity solutions similar to what is already available for such devices in healthcare, financial services, and manufacturing. This would protect drivers, especially the millions of car renters around the world, Regalado said.

“The fact that we can infect a car’s infotainment system and expose private data sheds light on an important vulnerability for manufacturers going forward,” he added, noting he has also recently hacked a telepresence robot, an IV pump, and other medical devices.

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MOXY provides a system designed to streamline the sales and deal closing process for product administrators, dealers, agents and finance companies. Additionally, the company’s IMOXY web and mobile portal provides an easy way to monitor transactions, view rate programs, and identify any special rules or guidelines from various administrators.

“F&I Express integration sets the stage for expanding our IMOXY web and mobile portal to Agents, VSC, and aftermarket product administrators and financial entities at an accelerated rate,” said JJ Demma, managing partner at Moxy Solutions.

Brian Reed, CEO and president of F&I Express, added: “One of our core values at F&I Express is relationship building. We look forward to the opportunity to expand our network by adding Moxy Solutions and Red Shield to the platform.”

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SAN FRANCISCO — Jeep, Ford, and Acura each enjoyed significant gains in consumer interest in June, according to the latest report from Jumpstart Automotive Media’s shopper insights team.

Jeep’s share of interest on Jumpstart sites increased by 15% from June 2017 to June 2018. In the past year, Jeep has leapfrogged Nissan and BMW and now is the fifth-most-shopped brand, up from No. 7 in June 2017. Additionally, the first half of 2018 was Jeep’s best sales half-year ever with $495,000 in sales, according to Automotive News.

Ford has seen the most growth (20%) in shopper interest year-over-year among the top 10 brands and has been the most-shopped brand for 11 of the past 13 months. Jumpstart analysts singled out the highly anticipated reintroduction of the Ranger pickup, which has been the most-researched model on Jumpstart sites for three of the past five months — despite the fact that it won’t arrive at dealerships until early next year — as well as the EcoSport SUV and Mustang Shelby GT 500.

Acura’s share of interest increased 14% from the prior month, mainly due to the launch of its new RDX, analysts said. Within the compact luxury SUV/CUV segment, the RDX gained a 35% share of segment compared to May and increased 70% from June 2017. Gaining two spots on the ranking, RDX surpassed Lexus NX and BMW X1 to become the share of segment leader.

Trucks and utilities remain hot commodities, said Colin Thomas, senior analyst of strategic insights at Jumpstart, but they aren’t the only vehicles driving traffic online.

“Jeep has captivated many shoppers with its rugged off-road capabilities and exterior styling, while Ford and Acura continue to build versatile trucks and utilities and performance-driven cars that are desirable to many shoppers today,” Thomas said.

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Over the past decade, state auto associations have worked diligently to revamp their state’s dealer franchise laws to include a statute that supports retail reimbursement for warranty parts.

States like Maine, Florida, and New Jersey laid the groundwork in the mid- to late 2000s. Currently, more than 40 states have laws that require the manufacturer to reimburse the dealer at the same rates it charges its retail customer; California, Colorado, Iowa, and Minnesota are all set to pass similar laws by the end of this year. Most state laws also allow the dealer to submit for a warranty labor rate increase using a similar process as the manufacturer’s standardized process, which often limits the amount of the annual increase.

Thousands of dealers across the country have exercised their rights for retail reimbursements for warranty parts and are currently reaping the benefits. Many dealers in the northeastern part of the country, where the laws have been on the books for five to 10 years, have generated hundreds of thousands if not millions of dollars of additional gross profit without increasing volume.

When these laws first became publicized, many dealers were skeptical. Some thought manufacturers would resist approval or seek retribution. However, as the years have passed, most manufacturers have complied, and we’ve seen no real examples of retribution. It truly is a no-brainer. In fact, one Honda dealer in New Hampshire called it “the biggest no-brainer in the history of the auto industry.”

Here are the top five things you need to know about warranty parts reimbursement at retail rates:

1. Calculate the Impact on Your Bottom Line.

The additional gross profit generated from a warranty parts rate increase to retail can be huge. The average dealer picks up approximately $8,000 to $12,000 per month in additional gross profit. Some dealers can generate more than $30,000 a month. However, the results for each dealership will vary based on the volume of warranty parts sales and markup percentage.

The average dealer’s retail rate typically ranges from 70% to 90% over cost. Most manufacturers pay 40% over cost. If a dealer is approved at 80% markup over cost, that dealer would in effect double their warranty gross profit.

There is a drastic difference among the average markups charged by dealerships to their retail customers for parts. Some dealers have been approved at over a 100% markup. Others have been approved below 60%. The main reasons for such discrepancies directly relate to the parts matrix in place and discounting practices.

Too often, dealers do not implement an aggressive enough parts matrix to maximize their profitability. Other times, the matrix is effective; however, discounts are utilized too liberally, reducing the rate and profitability. Both scenarios can cost you thousands of dollars a month in gross profits.

2. MSRP Is Not the Same as Retail.

Some manufacturers pay list pricing or MSRP, which most dealers perceive as a 67% markup. But MSRP is a price matrix determined by the manufacturers. On average, MSRP typically pays between 50% and 60% markup over cost. For some manufacturers, such as Subaru, it can be even lower.

If your dealership employs a reasonably aggressive price matrix, it is usually well worth submitting for retail rates. Regardless of your situation, it is critical to calculate the impact on your bottom line to determine the revenue opportunity.

3. Your Factory Won’t Just Give It to You. 

Most state statutes include a provision that requires the dealer to submit 100 sequential qualifying customer-pay repair orders to the manufacturer to substantiate its retail rate, a.k.a. the “100-RO analysis.” Even without this provision, most manufacturers will still require the 100-RO analysis.

It should be noted that the "100" designation may be somewhat misleading. Analysis requires the dealer to include all nonqualifying repair orders and results in the accumulation of substantially more than 100 total ROs due to maintenance, internals, and warranty. It could take more than 1,000 actual repair orders to accumulate 100 “qualifying” repair orders.

This process can be very time-consuming. Additionally, all manufacturers do not interpret these state laws equally. They can reduce the rate substantially or reject the submission if material errors exist. This has the potential to prolong the process and cost you money.

4. Retribution Has Yet to Materialize.

This is the No. 1 fear of dealers who hesitate on submitting, but the best evidence of the lack of retribution is the bankruptcy proceeding that occurred nearly a decade ago: Several New Jersey Chrysler and General Motors dealers had exercised the rights to retail reimbursement at that time. Both manufacturers had the opportunity to enact retribution on these dealers, yet did no such thing. Since that time, GM has been the most vocal to its dealers about potential retaliation, but it ultimately amounts to empty threats.

5. Time Is of the Essence.

This is a huge win for the dealer without any real downside, but time is of the essence. The sooner you are approved, the sooner your dealership can begin reaping the benefits of the higher rate.

Due to the labor-intensive nature of this project, it typically takes dealership personnel six to nine months to submit and receive approval from the manufacturer. Partnering with a company that is well-versed in these submissions can streamline the process and maximize the impact.

Francis X. O’Brien II, CPA, CIA, CFE, is principal of O’Connor & Drew PC and has expertise in dealership operations, including warranty parts and labor reimbursement analysis as well as internal controls and fraud investigation.

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PLANO, Texas — Mike Groff, who became Toyota Motor Credit Corp.’s seventh employee when he joined the fledgling company in 1983, will retire as the captive’s president and CEO on Aug. 31, 2018, the company announced today. The executive, who also served as a member of the company’s board of directors and CEO of Americas Region of Toyota Financial Services International Corp. (TFSIC), will serve as an advisor to TFS until Nov. 16.

Appointed to replace Groff is Mark Templin, who joined Toyota in 1990 and has served as chairman of the Toyota Motor Credit Corp. (TMCC)’s board of directors since May 2016. He also serves and is expected to continue to serve as director, president and COO of TFSIC and director and group COO of TFS. From April 2013 to December 2017, Templin also served as managing officer of Toyota Motor Corp.  

“Mark brings a global depth of knowledge and experience in both the finance and automotive sides of the business,” said Groff. “His Lexus background means he knows how to deliver best-in-class customer experiences. I know the company will be in good hands with Mark at the helm.”

Groff first served as an operations administrator, a role that entailed a wide range of responsibilities as the company started operations and began to grow. Groff then transferred to Toyota Motor Insurance Services (TMIS) in 1991, and held positions in product development and management. After three years with TMIS, Groff transferred back to TMCC and held a series of progressive leadership positions in the areas of sales, marketing, strategic planning, information technology, and customer service. He was instrumental in the rebranding of TMCC and TMIS as Toyota Financial Services.

In 2013, Groff was named the captive’s president and CEO. Under his leadership, TFS joined Toyota Motor North America Inc. (TMNA) in a successful relocation of its headquarters to a modern campus in Plano, Texas. According to officials, Groff has led continued growth at TFS and the company now ranks as one of the nation's largest auto finance providers. 

The captive has more than four million active customer accounts, over eight million insurance agreements in force, total assets of more than $120 billion, and employs approximately 3,300 team members across the country. In addition, he was responsible for TFS operations in Canada, Mexico, Puerto Rico, Argentina, Brazil, and Venezuela.

Under Groff's leadership, TFS also expanded its commitment to corporate social responsibility. The company introduced a series of programs to support underserved youth, provide scholarships, and promote financial education among young people. TFS is a major sponsor of the Boys and Girls Clubs of America and the Girl Scouts of the USA, where the company introduced the "Driving My Financial Future" campaign. 

Groff, a national trustee for the Boys and Girls Clubs of America, coupled the company's philanthropic donations with opportunities for team member involvement. Under his leadership, TFS received the prestigious Points of Light Foundation Civic 50 award four times, an honor that recognizes the 50 most community-minded companies in the nation.

Since joining Toyota Motor Sales (TMS) in 1990, Templin has held a number of positions. He previously served as group vice president and general manager of the Lexus Division for TMS, overseeing all aspects of Lexus' U.S. automotive operations, including sales and marketing, retail development, customer satisfaction, and product planning. His responsibilities included coordinating sales activities, dealer relations, parts and service operations, and marketing operations of four regional offices around the country. He concurrently served as general manager of the Lexus planning division, TMC, working closely with international Lexus affiliates.

Templin also served as general manager for the Lexus Southern area, assistant general manager for both the Southern and Western area Lexus offices, sales administration manager, retail operations manager at Lexus' national headquarters in Torrance, Calif., and vice president of parts, service, customer satisfaction, and training for the Lexus division. Templin also served as vice president of Lexus marketing and vice president of Scion.

"I am honored to lead Toyota Financial Services operations in the U.S. and the Americas Region," said Templin. "Mike has positioned the company for continued success and I look forward to building on our strong heritage of delivering the best products and services to meet the needs of our customers and dealer partners. I know that we can be a great partner to the automotive side of the business in achieving Akio Toyoda's vision of mobility for all."

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LAWRENCEVILLE, Ga. — Black Book (div. Hearst) released its updated Used Vehicle Retention Index. The index ticked up 113.9 in July, a 0.5% improvement from June (113.3) and a 0.7% increase from the same month a year ago (113.0).

The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on two- to six-year-old used vehicles, as percent of original typically equipped MSRP. It is weighted based on registration volume and adjusted for seasonality, vehicle age, mileage, and condition.

Leading the July index increase were subcompact cars, which enjoyed a 1% increase from June. Sporty cars, premium sporty cars, compact, mid-sizers, and full-sizers all had gains over 0.5%, while the full-size and pickups and full-size luxury SUV segments showed declines.

“The Black Book Index strength over the last year is a clear reflection that there is strong demand for many segments of used vehicles — particularly for cars,” said Executive Vice President of Operations Anil Goyal. “While we are forecasting typical seasonal depreciation pattern through the remainder of the year, dealers and remarketers should continue to see increasing sales volume on used vehicles, driven by continued employment growth and high consumer confidence.”

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Here’s the scenario: All three F&I managers just took new customers into their offices, with three more buyers on the sign-in sheet and a fourth just closed on a vehicle. How long will the fourth customer have to wait to get into the F&I office? 

The answer to this question depends on several factors: 

• • How long does each F&I turn take?
• • How long does each F&I manager take to “prepare” for their next customer?
• • At what point does the customer start the F&I process? 

The F&I time delay is the total amount of time it takes for a customer to move from “Yes, I want to buy the vehicle” to accepting delivery. This time includes starting, engaging, and finishing the F&I process. 

Working as the F&I director for a large retail store that sold 800 units per month, I had to address the problem and figure out a way to solve it. Let’s take a closer look at the example above. On average, it takes the F&I manager one hour per F&I turn and 10 minutes to prepare for the next customer, which includes loading the information into the CRM and preparing the menu and the paperwork. At this rate, the fourth customer may have to wait two hours and 20 minutes before he or she is able to start the F&I process.

This type of wait is unacceptable. Let’s find a better way to handle this situation.

Utilizing an electronic interview for the F&I process allows the customer interview to start within approximately five minutes of the customer saying “Yes” to the car. Electronic interviews can be conducted on a dealership iPad or the customer’s smartphone.

These tools allow customers to view product demonstrations and explanations and self-select F&I protection programs prior to meeting with the F&I manager. We have already reduced the average time for an F&I turn from 60 minutes to 20 minutes simply by utilizing technology.

The F&I manager will then simply review the customer’s purchase information, confirm the optional products chosen, recommend one or two additional products if appropriate, and then electronically complete the deal utilizing digital signatures. Some business managers can even present customers with a flash drive containing all of their completed and digitally signed paperwork.

As an added benefit to the dealership, the F&I manager can electronically submit the product contracts to its provider and remit the retail installment contract or lease agreement to the finance source. A realistic time for a complete turn is 20 minutes, with no more than five minutes of preparation time.

In our hypothetical situation above, the customer has started his or her digital interview, electronic product presentation, and product selection process within five minutes of agreeing to buy. This process should take 20 minutes, on average, to complete. When the customer is finished, the sales consultant will take the tablet and start the delivery process of the customer’s new vehicle at his or her desk — also using a tablet for the vehicle review.

Approximately 20 to 25 minutes into the delivery process, the F&I manager will greet the customer at the sales consultant’s desk and escort him or her back to her office. The customer will spend no more than 20 additional minutes in the business office before being turned back to the sales consultant, who will complete the delivery process. 

By simply integrating technology into the sales and F&I process, the F&I time delay has gone from 140 minutes to 60. The fourth customer will be leaving the dealership far happier than the first three.

Having participated in this type of F&I process, both as a consultant and customer, I can testify that it is pleasant and profitable for the dealership and quick and painless for the customer.

Digital sales and F&I are the future. Staying on the cutting edge of technology makes our processes faster, more compliant, and more profitable, and benefits the customer and dealer alike.

Demetrios Lahiri is vice president of sales for American Financial & Automotive Services Inc. Email him at demetrios.lahiri@bobit.com.

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The purchase also adds the Hyundai brand to the group’s portfolio. Serving as general manager for both stores, which are located near another Morgan dealership, Brandon Honda, on Adamo Drive in Tampa, will be Jerry Clark. He was recruited out of Maryland, officials said.

"The Brandon Hyundai and Brandon Mitsubishi acquisitions are exciting on many fronts,” said group CEO Brett Morgan. “They bring an excellent volume brand like Hyundai to our group and extend our presence in a Brandon market where we have always enjoyed doing business.”

Bennett Acuff, vice president of Morgan Auto Group, added: "We have long known and admired the seller, John Wendkos, who has owned car dealerships for almost 50 years, and we’re honored that he chose to sell the dealerships to us. These acquisitions present the perfect mix of great brands and a stellar location.”

The Tampa-based dealer group now represents 10 brands across 10 stores in Tampa alone, including Honda, Toyota, Ford, Chrysler, Dodge, Jeep, RAM, MINI, and the newly acquired Hyundai and Mitsubishi. Morgan Auto Group also has BMW and Lamborghini stores in Sarasota as well as a car wash, International Auto Spa.

As for Clark’s hiring, Tom Moore, COO of Morgan Auto Group, noted: "We are very fortunate to have Jerry Clark join our team as the general manager for both Brandon Hyundai and Mitsubishi. Jerry started his career in 1983 as a salesperson in Hagerstown, Maryland. Since then, he has held virtually every position that a car dealership has to offer, including over 20 years as a general manager. This depth of experience provides Jerry with the skill level needed to train our team members to deliver outstanding customer service in both the sales and service operations.”

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We really hate to say “We told you so,” but we told you so. We’ve run several articles in Spot Delivery pointing out a problem that we see over and over in dealers’ buyers orders. Here’s the problem:

Under the Uniform Commercial Code, as enacted in most states, a car sale gives rise to two so-called “implied warranties” — implied because they need not be expressed, either orally or in writing. These two implied warranties are the implied warranty of merchantability and the implied warranty of fitness for a particular purpose. In most states, the UCC permits a seller to “disclaim” these implied warranties and sell a vehicle with no warranties at all — an “as-is” sale.

The UCC imposes a requirement for such a disclaimer, though. It must be in writing and “conspicuous.” We see buyers order after buyers order in which the warranty disclaimer appears in ordinary text surrounded by other ordinary text, or in which the disclaimer is in bold type or in capital letters but is surrounded by other provisions also in bold or caps. Such presentations, we have warned, will fuel plaintiffs’ claims that they are not “conspicuous.” A recent Connecticut case illustrates the point.

Motion Granted

Ismet Krasniqi bought a used Audi A6 from A Better Way Wholesale Autos Inc. Almost two years later, Krasniqi learned that the car had structural damage from prior collisions, rendering it unsafe to drive and potentially life-threatening in the event of a crash.

Krasniqi sued Better Way for breach of the implied warranty of merchantability, violation of the Connecticut Unfair Trade Practices Act, and breach of express warranty, seeking $8,007 in actual damages, $25,000 in punitive damages, and post-judgment interest. Better Way failed to answer the complaint, and Krasniqi moved for a default judgment. The U.S. District Court for the District of Connecticut granted the motion in part and denied it in part.

Krasniqi claimed that Better Way breached the implied warranty of merchantability under the Connecticut version of the UCC by selling him a car that was unsafe to drive.

The court noted that Better Way attempted to disclaim the implied warranty of merchantability with language to that effect in the sales contract. However, the court found that the disclaimer was not conspicuous because it was in the “same font size, color, and typeface as the other text on the page, [was] not set apart from other text or in all capital letters, and include[d] no specific header.”

Because the court found that the disclaimer was unenforceable, it went on to address whether Krasniqi established that Better Way breached the implied warranty of merchantability and determined that he did. Specifically, the court found that Krasniqi sufficiently alleged that Better Way is a merchant that sold a car that was not merchantable and caused Krasniqi damages, and that Krasniqi gave Better Way notice of his injury in the form of a demand letter.

Next, Krasniqi claimed that Better Way violated the CUTPA by failing to perform a safety inspection, as required by Connecticut law, or by selling a car notwithstanding the defects and failing to disclose those defects, as required by Connecticut law. The court found that Krasniqi adequately established a claim for relief under the CUTPA.

Finally, Krasniqi claimed that Better Way breached the express warranty that the vehicle had undergone a safety inspection and that it was safe for operation. The court found that Krasniqi did not establish the breach of express warranty claim because he failed to provide to the court the form on which Better Way allegedly made an express warranty.

Punitive Damages

The court awarded Krasniqi the requested $8,007 in actual damages, representing $7,357 for the diminished value of the vehicle as of the date of sale and $650 for the cost of a vehicle inspection. The court also awarded the requested $25,000 in punitive damages for recklessly violating the CUTPA and exposing Krasniqi or anyone else driving or riding in the car to a “significant risk of serious bodily harm.” Finally, the court awarded Krasniqi post-judgment interest at the rate of 4.75% per annum, the current bank prime interest rate.

It’s hard to tell how much effect the loss of the disclaimer of implied warranties had on the court’s decision, but you have to believe the dealership would have been in much better shape if it could have argued that the buyer had been warned — and warned conspicuously — that the sale was “as-is.”

Thomas B. Hudson is a partner in the firm of Hudson Cook LLP, publisher of Spot Delivery, and the author of several widely read compliance manuals. Contact him at tom.hudson@bobit.com. ©CounselorLibrary.com 2018, all rights reserved. Single print publication rights only, to Auto Dealer Today (7/18). HC No. 4823-3533-5532

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ALBANY, N.Y. — Auto/Mate Dealership Systems has hired Shayne Dyer as the company’s new regional sales manager for the Florida territory.

Based in Orlando, Dyer will be responsible for cultivating and managing relationships with franchise auto dealerships in the region. “I look forward to representing an industry leader that provides such great software, value and support to its customers,” said Dyer.

Prior to joining Auto/Mate, Dyer worked as a strategic services consultant and implementation specialist with DealerSocket.

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Your supply chain is long and highly unpredictable. Your workforce is transient. Some chefs are temperamental and some bartenders are bookies. You can get sued by just about anybody who works for you or with you. Grease fires happen. Slips and falls happen. People choke on your steaks and are poisoned by your chicken. Do you deliver? Good luck to you. Vicarious liability is a killer.

Ten years ago, there was no safer investment than a Subway franchise. Did you know the world’s largest restaurant chain closed 350 U.S. stores in 2016, 800 more in 2017, and is expected (by some estimates) to shutter another 500 or so by the end of this year? CEO Suzanne Greco says the company is “strengthening market share.” Longtime franchisees could argue their market share was a whole lot stronger before there was a Subway on every other block. And that’s to say nothing of the recent public relations nightmare that will haunt that company for decades. That’s right: Those $5 footlongs are really only 11 inches!

It is more than likely that among the hundreds of erstwhile Subway franchisees are a good number of smart, driven, pragmatic entrepreneurs who did everything right. They didn’t serve rotten lettuce or harass their employees. They failed due to bad decisions made at world headquarters hundreds or thousands of miles from their stores.

About one in five U.S. franchised dealerships closed in the first years of the Great Recession, including more than 1,000 General Motors franchises. It was a low point for factory-dealer relations, but GM recovered from bankruptcy — so well, in fact, that in 2015, when many highlines were introducing downmarket models, GM’s directors decided take Cadillac to new heights. Johan de Nysschen, fresh off a long run at Audi and a cup of coffee with Infiniti, sold them on a plan to put Cadillac in direct competition with the German highlines, with pricing to match.

Trainer, forecaster, and ADT columnist Jim Ziegler didn’t buy it for a second, and he said so, repeatedly, to anyone who would listen. In this issue’s edition of “On the Point,” the Alpha Dawg takes a victory lap down memory lane, rightfully pointing out that he was among the first to predict that de Nysschen’s plan was doomed to fail and Lincoln would steal Cadillac’s crown, all to the detriment of the loyal dealers and customers who helped build the brand. It’s a great read and a cautionary tale for factory executives.

By the way, that restaurant-failure metric is completely made up. As Forbes recently reported, a definitive study of new U.S. businesses opened between 1992 and 2011 found that 17% of eateries closed within a year, a lower rate of failure than landscapers (19%), independent mechanics (also 19%), and real estate agents (21%). So go ahead and open that pizza joint. Just think twice before you offer delivery.

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TORRANCE, Calif. — Get compliance certified, hear from the F&I industry’s leading product providers, experience the latest digital retailing solutions, and learn from the industry’s top F&I trainers. That will be the scene this October at the Caribe Royale Orlando in Orlando, Fla., where dealers, F&I professionals, agents, and the F&I industry at large will converge for Industry Summit 2018.

Connecting the three-day event will be keynote addresses from two experts in the F&I field, including the special finance guru Greg Goebel. The event’s tagline, “Protect the Future of F&I,” makes clear that the industry’s drive toward a more digitized car-buying experience will be a top-of-mind topic at Industry Summit 2018.

“There are plenty of events out there addressing digital sales and marketing, but none have truly addressed the potential impact digital retailing will have on the future of F&I,” said David Gesualdo, publisher of Auto Dealer Today and F&I and Showroom magazines. “Industry Summit fills that void for dealers and their F&I teams, while also offering them the opportunity to earn compliance certification and learn from the who’s who in compliance and F&I training.”

Opening with a welcome reception on Sunday, Oct. 7, Industry Summit’s educational program kicks off on Monday, Oct. 8, with a full day of compliance education led by a roster of compliance experts, including Gil Van Over, president of gvo3 & Associates and executive director of Automotive Compliance Education (ACE). The day will end with “Is It Compliant,” a Jeopardy-styled game that will have a panel of compliance experts offering their take on audience responses to common objections. 

Van Over, who also pens a monthly column in F&I and Showroom, then opens Day Two with his ACE review and testing at 9 a.m. on Tuesday, Oct. 9. To earn ACE certification, Industry Summit attendees must be present for the comprehensive review session and earn a grade of 80% or better on the exam that follows. Those who succeed will receive a framed diploma and opportunities to renew their certification annually.

The second half of Day Two will feature Industry Summit’s new Tech Shootout. Designed to allow dealers to learn about the latest in digital sales and F&I technology, the challenge will feature 10-minute presentations from 10 of the leading technology providers. Audience members will then cast their vote on their favorite presentation and solution, with the winner announced the following day.

Also kicking off at 1 p.m. is a program geared toward F&I product providers and administrators. However, the sessions offer dealers an opportunity to get an insider’s view on the challenges, trends and advancements in the F&I product side of the business. The day ends with the IAS-sponsored ‘Ask Frenchy’ session. Part training workshop, part keynote, the session features F&I veteran and IAS executive Eric “Frenchy” Mélon. He will tackle objections and F&I-related questions submitted by attendees.

The industry’s top F&I trainers will take to the stage on Day Three for more than four hours of F&I training on the latest F&I sales techniques and process tweaks. The day will also feature Day Two of Industry Summit’s product providers and administrators program.

“We are heading to Florida with a more unified program, one that will allow dealers to learn about the real issues and opportunities facing the F&I industry while their F&I teams get compliance certified and trained by the best in the business,” Gesualdo said. “We’re also mixing in a little fun into our education program with our Tech Shootout, ‘Ask Frenchy’ session, and ‘Is It Compliant’ objection-handling game. Mixed in will be a host of networking opportunities and an exhibit hall designed to allow dealers to explore the latest in F&I products and technology.”

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Line\5 can fund many deals within 24 hours, but also offers a wide range of flexible funding options to help dealers with their scheduling, according to the company’s CEO, Justin Lane.

“These options are another example of Line\5 listening to what our partner dealers want. And we invite all dealers to contact us for details of how we can help them,” Lane said, noting that Line\5 will also offer electronic rating, contracting, signing, and re-signing, with menu integrations for each of the company’s products. “This means dealers will be able immediately to find the best plan and the current rate for their customers. Not only that, but the system will instantly generate the correct contract wording ready for signature. So agreements can be completed and signed online right away, on the lot or offsite, wherever works best for the dealer and the customer.”

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SOUTHFIELD, Mich. — Consumer preferences for SUVs continue to rise, and at a faster pace than five years ago, according to a new loyalty and defection based on new loyalty and defection analysis from IHS Markit.

According to the firm, more than 35% of U.S. households with a sedan in the garage that returned to market for a new vehicle between April 2017 and March 2018 acquired an SUV, up from just 24% five years ago. However, not all consumers are moving to the popular body style at the same pace.

The IHS Markit analysis found variances among ethnic groups, household income, and age levels. For instance, the propensity to defect from a sedan to an SUV was much higher among Asians than African American or Hispanic consumers, according to the analysis.

According to the firm, nearly 40% of Asian sedan owners who returned to market for a new vehicle during the study period defected from a sedan to an SUV. That’s significantly higher than Hispanics (31.9%) or African Americans (31%).

“Perhaps surprisingly, 55.7% of African American sedan owners opted to stay with a sedan for their next vehicle purchase, versus only 49.6% of Hispanic and 43.5 percent of Asians,” the firm noted. 

Various age groups also showed different patterns for defection from sedans as well.  During the April 2017 to March 2018 timeframe, the propensity to defect from sedan to SUV decreased as age increased. Loyalty to sedans is extremely high among older consumers and varies by nearly 20 percentage points from the youngest consumers to the oldest.

“Many marketers may not realize the importance of continuing to target their sedan marketing and advertising efforts toward older buyers,” said Tom Libby, loyalty principal at IHS Markit. “These consumers sometimes have more buying power as well, which means an important group of prospective customers could be at risk of being missed in advertising and marketing efforts.”

Household income levels also contribute to consumer preferences and defection rates. The analysis found as incomes rise, consumers are more likely to defect from a sedan to an SUV. Conversely, the propensity of sedan owners to choose another sedan when returning to market declines as income levels increase. The data suggests the healthy U.S. economy itself is contributing to the flourishing SUV business.

The complete analysis by IHS Markit covered new vehicle transactions from April 2017 to March 2018, including purchases and leases among owners who had acquired a new vehicle during the 12-month timeframe. The SUV/CUV body style as defined by the research includes SUV and CUV models collectively. In addition, the second vehicle may be an addition to the household fleet, not necessarily a replacement. Age and income levels reported in the analysis are based on the head of household, who may not be the primary driver.

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IRVINE, Calif. — Thanks to market demand quickly backing away from cars, average transaction prices in July rose 2.9% from a year ago, or $985, to $35,359, Kelley Blue Book reported this week.

Cars are expected to make up only 31% of July sales, down from 36% in the year-ago period. This decline is pushing transaction prices up as consumers opt for pricier SUVs and trucks, the firm said.

“Prices also are likely to strengthen as the average days in inventory has begun to recede for the first time this decade,” said Kelley Blue analyst Tim Fleming, “which is a sign automakers are managing production well in the post-peak demand era.”

Volkswagen Group’s average transaction price grew 4.1% in July, primarily on the strength of the Volkswagen brand. Volkswagen prices increased 5% due to the company’s Atlas and Tiguan SUVs, which have brought the brand’s sales mix of utility vehicles from 15% to nearly 40%. The redesigned Jetta also performed well, with its average transaction price rising 6%. Audi transaction prices were flat for the month, though the Q5 did show strong improvement with a 4% increase in its average transaction price.

Another great performer was Ford Motor Co., whose average transaction prices grew 4% in July 2018. Lincoln’s average transaction prices increased 10%, thanks to the meteoric rise of the new Navigator (up 33%). Ford also reported a big month. Its average transaction price rose 4%, thanks to the 5% increase in the average transaction price of its refreshed F-150. The new Expedition also was strong, with its average transaction price rising 14% — pushing it near the top of the full-size SUV segment.

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WASHINGTON, D.C. — Three weeks after announcing the completion of a seven-state sweep regarding compliance with its Used Car Rule, the Federal Trade Commission announced on Wednesday it has charged a group of four dealerships with a range of illegal activities, including falsifying consumers’ income and down payment information on credit applications and misrepresenting financial terms in vehicle advertisements.

According to the regulator, this was the FTC’s first action alleging income falsification by dealerships. Its complaint names Richard Berry as a defendant and Linda Tate as a relief defendant. They operate a group of four dealerships in Arizona and New Mexico, near the border of the Navajo Nation.

“Buying a car is one of the biggest purchases consumers make. When consumers tell an auto dealer how much they make and how much they can pay upfront, the dealer can’t turn those facts into fiction,” said Andrew Smith, the FTC’s recently confirmed director of its Bureau of Consumer Protection. “The FTC expects auto dealers to be honest with consumers from the first advertisement to the final purchase.”

Since at least 2014, according to the complaint, Tate’s Auto allegedly increased its sales by falsifying consumers’ monthly income and down payments on credit applications and finance contracts submitted to finance sources. The four dealerships named in the complaint are Tate’s Auto Center of Winslow, Tate’s Automotive, Tate Ford-Lincoln-Mercury, and Tate’s Auto Center of Gallup.

The regulator charged that, during the sales process, Tate’s Autos asked consumers to provide personal information — including their name, address, and monthly income — and told them the information would be submitted to financing companies. But instead of using consumers’ actual information, the complaint alleges, Tate’s Auto falsely inflated the numbers, making it appear that applicants had higher monthly incomes than they really did. The dealerships also allegedly inflated the amount of a customer’s down payment.

 “We’re not talking about nickel-and-dime discrepancies,” wrote Lesley Fair, senior attorney with the FTC’s Bureau of Consumer Protection, in an Aug. 1 blog post on the FTC’s website. “According to just one of the examples in the complaint, a consumer told Tate’s she had a fixed monthly income of about $1,200, but a Tate’s staffer allegedly inflated it to $5,200 in the paperwork.

“Wouldn’t consumers spot the false information? Not necessarily,” Fair continued. “The complaint charges that the defendants often used tactics that prevented people from reviewing the documents. Tate’s personnel allegedly rushed some consumers through the process; had them fill out forms over the phone or in places like grocery store parking lots or restaurants; or altered the documents after consumers signed them.”

The FTC charged that consumers, many of whom are members of the Navajo Nation, were approved for financing based on the false information the group’s dealerships provided. These consumers, the regulator further alleged, defaulted at a higher rate than qualified buyers.

The FTC also charged in its complaint that Tate’s Auto’s advertising deceived consumers about the nature and terms of financing or leasing offers. For example, the group allegedly advertised discounts and incentives without adequately disclosing limitations or restrictions that would prevent many customers from qualifying for the offers.

The regulator also alleges that Tate’s Auto’s social media ads violated the FTC Act, the Truth in Lending Act, and the Consumer Leasing Act by failing to disclose required terms. The FTC is now seeking an injunction barring the defendants from such practices in the future.

“One YouTube ad claimed the featured car ‘can be in your driveway for only $169 per month,’” Fair wrote in her blog. “In fact, consumers can’t buy that car for the advertised monthly payment. That amount applies only to a lease. What’s more, the FTC says the ad didn’t clearly disclose that to get that monthly payment, consumers must shell out $2,899 plus other fees at lease signing.

“Then there’s the online ad where the company touted an ‘incentive’ discount of $5,250,” Fair continued. “But buried behind multiple hyperlinks was the fact that the discount was available only to consumers who trade in a 1995 or newer vehicle or terminate a lease from another car company 30 days before or 90 days after delivery.”

The FTC’s complaint charges that Berry, acting as owner of the four dealerships, formulated, directed, controlled, had the authority to control, or participated in Tate’s Auto’s allegedly illegal conduct. The FTC also charges that Tate received hundreds of thousands of dollars from the other defendants, including funds directly connected to the alleged unlawful conduct.

 “The complaint charges that over time, others in the industry got wise to what Tate’s was doing,” Fair wrote in her blog. “In December 2015, a major financing company that regularly worked with Tate’s conducted a review. The company reported inflated income on 17.9% of applications from Tate’s Auto Center of Gallup, 37.5% of applications from Tate’s Auto Center, 38.7% of applications from Tate’s Nissan Buick GMC, and 44.8% of applications from Tate’s Auto Center of Winslow.”

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the District of Arizona.

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CARMEL, Ind. — Digital auction platform provider TradeRev partnered with CarsArrive Network to save dealers money while fostering an expanded, coast-to-coast auction marketplace, the companies announced. TradeRev is offering free vehicle transportation for dealers purchasing vehicles in qualifying states. TradeRev and CarsArrive Network are business units of KAR Auction Services Inc.

“TradeRev is committed to making the buying and selling of automotive inventory as fast, fair and easy as possible for dealers,” said Becca Polak, president of TradeRev and chief legal officer for KAR Auction Services Inc. “Dealers want seamless purchasing options at a value. By tapping into KAR’s resources, this partnership with CarsArrive helps sellers reach a broader group of buyers and helps buyers expand their purchasing market area far beyond local at no additional cost.”

From now until Sept. 30, 2018, dealers who purchase vehicles on TradeRev from sellers in New York, New Jersey, or Pennsylvania will receive free vehicle transportation. Dealers buying in qualifying Western states from sellers in qualifying Western states receive free vehicle transportation through Dec. 31. Qualifying Western states include Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming, all according to the announcement.

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SANTA MONICA, Calif. — Zero percent finance deals were slower to materialize for car shoppers in July, according to the latest report from Edmunds. Zero percent finance deals accounted for 6.92% of sales in July 2018, compared to 11.34% in July 2017 and 11.18% in July 2013. Analysts note that this is the lowest share of zero percent finance deals seen in July since 2005.

“Zero percent finance deals typically peak in summer months as a tried-and-true automaker method of spurring outgoing model-year vehicle sales, so this appears to mark the end of a fairly long-lived tradition for the industry,” said Jeremy Acevedo, Edmunds’ manager of industry analysis. “While inventory isn’t at the alarming level it was at this stage last year, how automakers navigate their model-year selldown will be critical through the rest of the year as the market contracts and prices continue to rise.”

Edmunds analysts point to the scarcity of zero percent finance deals as the driving force behind interest rates sustaining near-record average highs in July. The annual percentage rate on new financed vehicles averaged 5.74% in July 2018 compared to 4.77% in July 2017, representing the largest year-over-year jump in APR that Edmunds experts have seen so far in 2018.

“Interest rates might be down slightly month-over-month, but they’re still hovering near a nine-year high,” said Acevedo. “With more Fed rate hikes ahead, it’s not likely that APRs will be going down anytime soon.”

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CARMEL, Ind. — Vehicle remarketing and technology solutions provider KAR Auction Services Inc. has named Edmund Field president of the company’s Preferred Warranties Inc. (PWI) business unit, which offers extended service contract plans for pre-owned vehicles and serves independent used-vehicle dealers, small franchise retail automotive, and powersports dealers. 

Field will be responsible for leading PWI’s operations and digital and mobile product development and advancing the company’s market growth strategies. He will be based at KAR’s global headquarters in Carmel, Indiana.  

“Edmund joins PWI at a time of great opportunity, as the company nears the completion of our nationwide expansion by the end of the year,” said Paul Kramarz, senior vice president of risk at KAR business unit, AFC. “Edmund’s extensive experience and leadership skills will be instrumental in PWI aligning with KAR strategic initiatives and achieving a leading position within the industry.” 

With more than 20 years of automotive industry experience, Field joined KAR earlier this year as the director of new product development. Before coming to KAR, Field was at Volkswagen Group and VW Credit Inc., where he supported the areas of insurance, sales and business development, new product development, contact center operations, fleet management and manufacturing.

During his time at VW Credit, Field was responsible for the development and launch of Volkswagen Financial Protection Services as a startup insurance entity selling and administering a full suite of insurance protection products to Audi, VW, and Ducati dealers in the U.S. market. Field also held several management roles at VCI’s customer service center in Libertyville, Illinois.

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ORLANDO, Fla. — Robert “Bob” Harkins will serve as master of ceremonies for this year’s Compliance Summit and P&A Leadership Summit, both of which will be held as part of the upcoming Industry Summit, organizers announced.

Harkins is a fixture of the Summit series of events due to his exhaustive preparation and boundless energy, said David Gesualdo, show chair and publisher of F&I and Showroom and Auto Dealer Today magazines.

“Bob will once again make a difficult job look easy as he takes on emcee duties for two events in three days, and we thank him in advance for taking the point at showtime,” Gesualdo said.

The event will be held Oct. 8–10 at the Caribe Royale Orlando in Orlando, Fla., with Compliance Summit set for Monday, Oct. 8, and P&A Leadership Summit sessions starting Tuesday afternoon and concluding midday Wednesday.

“I look forward to hosting not one but three action-packed days at this year’s Industry Summit,” said Harkins, who serves as vice president of training for the American Guardian Group of Companies. “Compliance Summit and the P&A Leadership Summit share a common goal of informing and inspiring their audiences, and I am honored to take part.”

More information about Industry Summit 2018, including registration, is available at the event’s website. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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“Bridget is a well-established innovator with a remarkable record of leveraging software to bring operational and profitability solutions to auto retailers. Before choosing to join Rapid Recon, she was actively pursued by some of the best-known technology companies in this space. We are delighted she chose to join the Rapid Recon team,” said Dennis McGinn, Rapid Recon’s founder and CEO.

Townsend most recently was COO and co-founder at Vin Voyager. She had been vice president of vendor management and vice president of market performance for, respectively, DealerSocket and Dealertrack.

“I’ve been involved in software development and implementation within the automotive sector for 18 years, and this product, Rapid Recon, has such a direct and material impact on a dealer’s business," Townsend said. "I wanted to work with this team and solution whose high value is very apparent and very measurable."

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When young Forrest Gump first met Jenny, sitting side-by-side in the school bus, she asked him, “Are you stupid or something?” To which Forrest replied, “Mama says stupid is as stupid does.” I wonder what Jenny would have said if she had met little Alan Batey on the school bus — or, for that matter, any of the top executives at General Motors who were involved in hiring Johan de Nysschen to head up Cadillac.

Of course, in a bubble of arrogance, supported by an inbred culture, these people think they’re brilliant. It reminds me of the words of Belgian humorist Philippe Geluck: “When you are dead, you don't know that you are dead. It is difficult only for the others. It is the same when you are stupid.”

In June, GM finally parted ways with our boy Johan, but only after he singlehandedly destroyed the last remaining shreds of a great brand that was already on the ropes. Cadillac still has a faint heartbeat, but its directors are all standing around its deathbed, holding defibrillator paddles and praying their luxury division won’t flatline.

Let’s Review

Loyal readers know I predicted this outcome in seven issues of this magazine alone, dating back to 2015, when de Nysschen first appeared on the scene. I warned about it in numerous speeches to dealer associations and private dealer groups. I wrote about it in my blogs and in online forums, where I am prolific. I looked at Johan’s business plan and the word “nincompoop” immediately popped into my head. Imagine how I felt about those who hired him.

In February of 2017, I wrote:

But I am scratching my head at Cadillac’s latest foray into the marketing schemes of its president, Johan de Nysschen. Disclaimer: I don’t like this guy. I think he’s another arrogant, clueless manufacturer executive taking his company — and his dealers — in the wrong direction. He’s trying to move Cadillac upstream and sacrificing most of its existing customer base.

A month earlier, I wrote this highly predictive piece:

The bigger problem — the elephant in the room, so to speak — is what to do with de Nysschen. If his time has run out, they have to find a noncontroversial, low-key way to drop-kick him through the goalposts without alarming the stockholders. It might reflect poorly on them that they let it go this far already without pulling the trigger. Of course, I am assuming a lot here, thinking the top management of General Motors doesn’t want to admit they allowed this human wrecking ball to totally destroy their flagship luxury brand.

Way back in November of 2016, I wrote:

Message to Mary, Alan, and Johan: It’s not going to turn out the way you think it is. It’s going to fall apart, and the metro dealers will dig in and refuse to make any further facility investments or advertising commitments. Nobody is going to want to pay for the weak and risky return on investment you’re offering. And nobody wants to cash out for $180,000, but I bet plenty of dealers will elect to abandon the Cadillac marque and put their personnel and facilities to work for other, more dealer-friendly products. Look for a massive exodus from the brand as dealers take down their signs and walk away.

If you think that’s prescient, remember what I wrote in August of 2016, shortly after de Nysschen’s “Virtual Vision” became public:

Cadillac’s division president, Johan de Nysschen, appears to be clueless and naive as he steers the Titanic toward the iceberg. De Nysschen is the Donald Trump to my John Oliver. I keep talking about him and he keeps giving me new material.

That was just the start of a 12-paragraph diatribe. And it followed yet another powerful prediction:

Well, Lincoln lovers, it’s time to sound the trumpets. The 2016 product line is the dawn of a renaissance. The new Continental is the car the world has been waiting for. Some people say they stole the design and lines from Bentley. Do I care? The car is gorgeous, and it gets back to what a Lincoln is supposed to be. We also get a redesigned Navigator and — get this — there’s a hot chance they’ll reintroduce a mid-sized crossover and call it the Aviator. … And what better time to introduce these new models and gather some momentum than while Cadillac is making foolish moves in design, marketing, and model lines?

How cool is that? I wrote that back in March 2016, when Johan was still arranging his office furniture and his bosses were singing “Don’t Worry, Be Happy.” And, finally, I first mentioned de Nysschen in an article I that appeared in this magazine back in February 2015, researched and written a month or so before publication:

To help their luxury marque compete alongside Audi, BMW, and Mercedes-Benz, GM hired a new brand manager, Johan de Nysschen, whose 20-year career at Audi heralded the incredible success that brand enjoys today. Between Audi and Cadillac, he spent a couple years at Infiniti. The problem, as I see it, is that he appears to be dead-set on reinventing Cadillac as a premium luxury brand. He has said they have to be willing to cast away some brand loyalists so they can attract a more desirable, higher-end luxury clientele. If I was a Cadillac dealer, I’d be furious. They’re going to throw away customers you’ve cultivated in your communities in the hopes of luring buyers away from the Germans? What if it doesn’t work?

Around that time, de Nysschen said, “We cannot deny the fact that we are leaving behind our traditional customer base. It will take several years before a sufficiently large part of the audience who until now have been concentrating on the German brands will find us in their consideration set.”

I called it a risky roll of the dice then and I stand by that assessment. I said Johan was opening the door for Lincoln to retake their segment, and so he did. There’s no denying that I predicted this trainwreck with pinpoint accuracy.

Now What?

GM is currently offering $10,000 rebates on their flagship Cadillac Escalade SUV. Why? Because Lincoln is on fire. The new Navigator is red hot and the Aviator is getting ready to square off against the Chevy Tahoe and GMC Yukon Denali. While Cadillac was raising prices and collecting awards, Lincoln came out of its coma and got to work building some really great new luxury vehicles with real names and appeal backed by effective marketing.

I want GM and all its hardworking dealers to succeed. So I will offer this advice: Keep clearing out the dead weight lest you find yourself sitting before Congress again, hat in hand. The profits you made in the last 10 years will not be sustainable in a downward cycle. Stop hiring Europeans just for the perceived cachet and stop mimicking their easily forgettable alphanumeric model-names. Bring American luxury back into style and stop trying to be Audi.

I hope this article offends somebody who is used to a herd of sycophants applauding their every move. GM could make many additional billions if Mary Barra would hire me as her No. 2 and grant me broad powers to drain their executive swamp. Of course, they could have saved billions just by listening to me in the first place. They must have thought I was stupid or something. At least Jenny had the good sense to ask.

Jim Ziegler is the president of Ziegler SuperSystems Inc. and one of the nation’s best-known dealer consultants, trainers, and speakers. Email him at jim.ziegler@bobit.com.

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Directors said CMS University evolved out of recurring conversations Compli had with business executives who knew they needed a CMS but didn’t know how to set one up or even what one looked like.

“Nobody likes to read a 1,500-page textbook. But that’s about how much material regulators expect you to know about building a compliance management system,” said Brian Larson, the company’s consumer finance director. “That’s when the light bulb went off and we decided to jump in and make it easier for companies to implement a CMS by sharing our vast industry knowledge for free.”

Each of the four videos in the online seminar series are an hour or less in length and cover executive oversight, compliance program structure, consumer complaint response, and internal audit preparation. Courses include easy-to-follow video lectures led by attorneys and industry veterans, instructional readings, and the ultimate Prep for the “Test” Guide. Larson said the materials support companies’ efforts to build a sound CMS that can better withstand regulatory scrutiny.

“Our program is not just for setting up a CMS. It also helps companies with an established CMS to easily audit their program to discover where they need to focus their resources,” he said.

CMS University is not a degree-granting institution offering accredited courses; however, it does offer highly specialized insider compliance knowledge and expertise that anyone who handles compliance at their company can benefit from, according to the provider.  

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ATLANTA — LexisNexis Risk Solutions released its comprehensive 2018 True Cost of Fraud report for the retail sector. Findings show fraud is escalating at an unprecedented pace in an industry already operating on very thin margins.

The LexisNexis Fraud Multiplier, which measures the cost for each dollar of fraud loss, found that this year, every dollar of fraud costs merchants $2.94, up from $2.77 a year ago, a 6% increase. The report also found the volume of successful and thwarted fraudulent attempts rising steeply at the companies surveyed — from a monthly average of 238 to 306 successful fraudulent transactions, year-on-year, and from 257 to 313 prevented fraudulent transactions.

Mobile commerce continues to be the sector most susceptible to fraud, particularly with identity fraud. Mid- to large-size mobile commerce merchants that sell digital goods see 39% of the fraud losses from identity theft, including synthetic identities. Though these merchants appear to have shown signs of investing in fraud prevention solutions in the past year, many still struggle with identity fraud. This is likely due to the types of solutions that these merchants are implementing.

“The hotly competitive retail landscape means merchants must meet customer expectations for convenience and continually drive business growth,” said Kimberly Sutherland, senior director, fraud and identity management strategy, LexisNexis Risk Solutions. “However, these key drivers also have increased risk for identity-related fraud, especially with the rise of synthetic identities and the volume of botnet orders. Therefore, it’s crucial for retailers to not just invest in a large number of fraud prevention solutions, but the right combination and layering of the solutions to defend against different threats.”

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WASHINGTON, D.C. — On a per capita basis, Virginia leads the nation in speeding enforcement and Delaware hands out the most reckless driving citations, according to the latest dangerous driving report from WalletHub. Delaware also earned a No. 1 overall ranking among “strictest states,” finishing No. 8 in the speeding enforcement category.

WalletHub compared driving laws in all 50 states and the District of Columbia to determine which states take the hardest line on dangerous driving behavior. Other strict states include Colorado (No. 2), Arizona and New Mexico (T-3), and California (5). The most lenient states include Texas (51), Mississippi and Oklahoma (T-49), and New Jersey and Nebraska (T-47).

The analysis also showed that nearly 75% of the states and Washington, D.C., have absolute speed limits, which means that exceeding the limit is enough evidence for a conviction. However, about 26% of the states leave room for interpretation with prima facie laws — or a mixed combination of absolute and prima facie rules — allowing speeders to argue in court that their speed was, in fact, reasonable.

In addition, the report compares financial penalties across states. For example, the average maximum cost of a ticket for reckless driving is $845, with a low of $100 (in Kentucky, Mississippi, New Mexico, and Ohio) and the highest at approximately $6,250 (Oregon).

To read the full report, click here.

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MONTVALE, N.J. — Mercedes-Benz is bringing its A-Class compact sedan to the U.S. market later this year as a 2019 model that will give buyers a new entry point just below the CLA and the first vehicle with the brand’s next-generation infotainment system that will also appear in the 2019 Sprinter van.

The 2019 A-Class will arrive with dimensions that are 3 inches shorter (179.1 inches) and a wheelbase that’s 1.1 inches longer (107.4 inches) than the CLA. It’s also 0.3 inches taller (56.9 inches) and will likely offer more headroom. Mercedes-Benz is debuting the vehicle in Brooklyn, New York, this month.

The luxury sedan would likely compete with BMW’s 2 Series (174.7 inches long) and perhaps the Lexus IS (184.3 inches in length). Trim grades will include the A220 and A220 4Matic powered by a 2.0-liter turbocharged inline-four cylinder engine that makes 188 horsepower and 221 pound-feet of torque mated to a seven-speed dual clutch transmission.

The 2019 A-Class will arrive with the Mercedes-Benz User Experience multimedia system, which replaces the outgoing Comand system. MBUX brings augmented reality capabilities and intelligent voice control with natural speech recognition with a high-resolution touchscreen display and touchpad on the center console. Optional driver-assisting features introduced with the 2018 S-Class include a semi-autonomous driving mode, automatic emergency braking, lane change assist, and rear automatic braking.

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Capital One’s founder, chairman, and CEO, Richard Fairbank, also noted that ending loans were up 8% compared to the year-ago quarter. He said that, although “competitive intensity” is increasing, “we still see attractive opportunities to grow.”

Asked by an analyst to elaborate on his view on competition in the auto finance market, Fairbank was blunt.

“I’ve said many times, the auto business is hypersensitive to competition, even more so than the card business, because there’s a dealer standing in the middle of every transaction and … when the dealers see a particular lender who is more aggressive or has a lower underwriting or whatever, there is a big movement that way and they try to drive others there as well,” he said. “So this is an important question that you’re asking.”

Fairbank noted that, in the years following the Great Recession, Capital One jumped on a “once-in-a-lifetime” opportunity to fund the subprime segment when other auto finance sources remained cautious. He indicated that, as the economy improved and competitors joined the fray, competitive practices “we’re not fans of” began to proliferate.

“It is very clear that the usual window that we enjoyed for about a year and a half, we should not expect that to be there, and … our expectation is things will return to a more normal competitive environment and it will move along in the cycle as things do,” Fairbank said. “We still see good growth opportunities, but we know which direction this thing is moving.”

Companywide, Capital One reported growth in net income — up to $1.9 billion from $1.3 billion in Q1 — as well as net revenue of $7.2 billion (up 4%), a 3% increase in marketing sped, and a 5% decrease in operating expenses.

“Capital One delivered another quarter of strong financial performance as we continued to invest to grow and drive our digital transformation,” Fairbank said.

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PONTE VEDRA BEACH, Fla. — National Auto Care Corp. announced it will be acquired by Lovell Minnick Partners, a private equity firm with offices in Philadelphia, Los Angeles, and New York. The acquisition is subject to receipt of standard regulatory approvals and satisfaction of customary closing conditions.

NAC, established in 1984 and acquired by Trivest Partners in 2012, is headquartered in Jacksonville, Fla. NAC is one of the longest-operating providers of products such as vehicle service contracts, guaranteed asset protection, limited warranty, tire, wheel and a full suite of ancillary protection products nationwide.

The executive leadership team at NAC will continue its day-to-day management of the company, and it will maintain operations at its current locations — in Westerville, Ohio, and Miami and Ponte Vedra Beach, Fla.

Through its independent agents, NAC supports over 2,300 partners that distribute its products. These include automobile dealers, credit unions, financial services companies, recreational dealers, and other strategic partners across North America. Company President and CEO Tony Wanderon said he is looking forward to the growth and opportunities NAC’s partnership with LMP will bring to NAC and its partners.

“LMP has strong experience investing in service-oriented businesses across the finance and insurance value chain that will prove invaluable as NAC builds upon our flexible and customized solutions to support our agency distributor partners in driving sales and profitability,” Wanderon said. “We believe LMP’s expertise in identifying and negotiating strategic transactions will add significant value to our acquisition strategy.”

While Wanderon and his team are excited about the changes, he notes that NAC enjoyed five years of outstanding success under its previous majority investor, Trivest Partners, which served as a great asset in NAC’s path to becoming a dominant player in the finance and insurance industry.

“NAC is the premier national market leader in developing innovative products that help protect consumers from a wide range of risks that can arise with Vehicle or Power Sport ownership,” said Trevor Rich, a partner at LMP. “We look forward to partnering with President and CEO Tony Wanderon, who is an accomplished veteran and innovator in the automotive protection industry, and his experienced team at NAC, as our investment positions the company to aggressively pursue acquisitions that complement its strong growth trajectory.”

LMP has a strong record of investing in and building fast-growing businesses across the insurance value chain, including J.S. Held, a specialty advisory firm providing property loss consulting, dispute resolution and construction and development services, and Worldwide Facilities LLC, one of the largest wholesale insurance brokerage companies in the U.S. Houlihan Lokey served as financial advisor to NAC and Trivest, and Sandler O’Neil was advisor to LMP. Madison Capital Funding LLC and NewStar Financial Inc. are providing debt financing for the transaction, which is expected to close in the third quarter of 2018, all according to the announcement.

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The presidency of Donald J. Trump has been making big waves in the automotive industry since his first day in office. But there are arguably more eyes on the retail and manufacturing sectors now than at any point during his tenure thus far. The reason is Trump’s decision to impose new tariffs on imported steel and aluminum and quite possibly on foreign-branded vehicles as well.

Manufacturers are paying particularly close attention to the tariffs and are overwhelmingly opposed to them. In an interview with NPR, Ann Wilson of the Motor and Equipment Manufacturers Association said, “Members have already been hit by steel and aluminum tariffs and retaliatory tariffs from China” and the “ongoing tariff fight will mean a slowdown and job cuts” in the automotive industry. Furthermore, even with new agreements being struck with the EU, the situation is still creating an uncomfortable and unclear ecosystem for auto manufacturers worldwide.

Regardless of circumstances, the factories and their dealer networks need to have the business infrastructure and resources in place to ensure success now and in the future. Here are three key areas of focus: 

1. Pricing

Purchase price has been a primary topic of discussion in conversations surrounding the Trump tariffs. In fact, according to USA Today, some analysts are even predicting that the tariffs could raise the purchase price of vehicles by upwards of $5,000. Obviously purchase prices are directly tied to moving vehicles off the lot, and as consumers continue to own vehicles for longer periods of time, trade-ins could become sparser — especially if tariffs price them out of the market.  

Car buyers were already testing alternative ways to access vehicles prior to any news about tariffs. Now, we can expect an increasing number of drivers to explore subscription-based models where they pay a monthly fee directly to the manufacturer to access to vehicles and cover insurance and maintenance. Brands like BMW, Cadillac, Mercedes-Benz, Porsche, and Volvo — in addition to third party providers — have already launched vehicle subscription services, and we are likely to see similar models from other leading automotive brands. 

2. Service

Maintenance and repairs are already big revenue sources for dealerships today, but as more consumers keep their existing vehicles on the road for longer — and others explore subscription-based models — maintenance has become more important than ever. If service has long been a suboptimized area of your business, in times of economic uncertainty, it’s critical to ensure your steady streams of revenue are performing to their fullest potential. 

This is not your responsibility to bear alone. Many manufacturers still adhere to the traditional, reactive, "break-and-fix" model. They must invest heavily in predictive analytics and IoT solutions to redefine the way they manage service. Because consumers are paying for access, automakers must stay ahead of demand and preemptively repair vehicles before they fail. Manufacturers that adopt sophisticated, cloud-based solutions and new business processes to optimize service parts inventory levels will maximize vehicle uptime, revenue, gross profits, and operational efficiency — and elevate the overall customer experience.

3. Parts

One of the biggest wild cards in the fallout from the Trump tariffs is not just what will happen to the prices of vehicles themselves, but the parts that comprise them. Unfortunately, there already is no shortage of gray market and online vendors encroaching on your parts sales. This trend will continue as pricing becomes a bigger factor in consumer purchasing decisions. 

Too many manufacturers are still using outdated methods like cost-plus or simple spreadsheets to manage parts pricing. Competitively priced parts will become more important than ever. Expect more OEMs to adopt emerging technologies in that space as well. 

Dealers and manufacturers are rightfully on edge about what might happen next in the ongoing Trump tariff saga. And given how fluid the situation is, we will have to keep our eyes and ears open for the foreseeable future. Meanwhile, you and your factories must do whatever it takes to maximize fixed ops revenue so you can weather the next challenge — tariff-related or otherwise. 

Gary Brooks is CMO of Syncron. He is a 20-year marketing veteran with expertise in revenue-focused B2B campaigns. Contact him at gary.brooks@bobit.com.

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NEW YORK — Marketing technology provider Vivial released an interactive ebook developed to help automotive businesses enhance their digital presence based on seasonal trends.

The user-friendly and eye-catching format offers compelling statistics that build the case for ramping up customer engagement efforts over the next few months; practical tips for getting started with Google; steps for developing social media profiles; and resources that are downloadable at the click of a button, according to Laura Cole, vice president of marketing for Vivial.

“Our main goal at Vivial is to make it easier for our customers to increase their visibility and connect with their target audiences — and summer is the prime time to do this,” Cole said. “We’ve developed our summer ebook to serve as the ultimate guide to help local businesses rank the highest, trend the hottest and make the biggest splash this season. The ebook is another example of how Vivial is constantly innovating to provide education for our customers.”

Vivial’s analysts found that, with temperatures on the rise, so is consumer spending. All manner of businesses in the auto industry see a rise in activity and sales in the summer, including rentals, washing and detailing, and maintenance, and the average car buyer only visits two dealerships before purchasing. A spike in auto body repair can also be seen likely thanks to the increase in drivers on the road, according to the authors.

To read the ebook, click here.

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LAWRENCEVILLE, Ga. — Black Book (div. Hearst) released a new analytics-driven report that looks at why certain vehicle models were discontinued over the last several years and how they’ve retained their values.

Analysts noted that some car and truck models, despite their popularity, are discontinued simply because manufacturers move production strategies in a new direction. Such models appear to retain their values better than their segment average, while others see retention values plummet. Black Book conducted an analysis that includes a mix of small and midsize cars, trucks, SUVs, and minivans. Their discontinuation dates vary over the last few decades, and the reasons for their discontinuation are as diverse as the vehicles themselves.

As an example of this analysis, Black Book data shows that the Toyota FJ Cruiser, whose last model-year was 2014, has actually gone up in value by 25.7% compared to other vehicles that were listed in its segment. The Hummer H2 is second-best in retention at 18.5%.

The FJ Cruiser was acclaimed for its off-road performance and known for its quirky combination of a wide stance and short wheelbase. In 2014, the FJ Cruiser’s last model-year of production, it sold only about 14,000 units. Given the uniqueness of this vehicle and the relative high demand from enthusiasts, it became a modern collectible. The change in three-year retention for FJ Cruisers was a whopping 26 percentage points better than the average for the midsize SUV/CUV segment.

Conversely, the Mazda MPV minivan, last produced in 2006, has lost 15.8% of its value compared to other vehicles in its segment, and the Mercury Milan has lost 9.5% compared to others in its segment since it was discontinued in 2011.

To view the complete analysis, click here.

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SAN FRANCISCO — Life Story Media announced that “Driven By Integrity: The Gaudin Family Story” received honors in the “Biography” and “Branded Content” categories in the 39th Annual Telly Awards.

The competition included films produced by AOL Studios, Bloomberg, CBS Interactive, Discovery Communications, ESPN, Ogilvy and Mather, and The History Channel. This year’s program received a record number of submissions, requiring recruitment of over 200 additional judges from companies such as Vimeo, Discovery Networks, and the National Association of Broadcasters.

“Life Story Media is pushing the boundaries for video and television innovation and creativity at a time when the industry is rapidly changing” said Sabrina Dridje, managing director of the Telly Awards. “This award is a tribute to the talent and vision of its creators.”

“The Gaudin family had a story that needed telling,” said producer/director and Life Story Media owner Julie Miller. “From wagon wheels to steering wheels, the Gaudin Motor Company is one of the oldest Ford dealerships in America. But the family’s story is about more than success in business. It’s about how the family’s success reflects its heritage, and how that heritage helped inspire a community’s future.”

“I’m thrilled that we have recorded our family’s and family business’ history for future generations. I feel that’s my responsibility,” said Gary Ackerman, Gaudin’s third-generation owner. “There was this passion that my dad and my grandfather both had for being involved in their community. I often tell our team members if you’re not involved in trying to make Las Vegas a better place to live, you’re not totally involved in the mission of our business.”

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HERNDON, Va. — U.S. customers will be able to configure and reserve their 2019 Audi e-tron, the first all-electric vehicle from Audi, on Sept. 17. The e-tron will make its global debut on the same day at an event in San Francisco, and full e-tron specifications, including pricing, will become available online. A refundable $1,000 reservation fee will be required.

Directors said the new Audi reservation system is part of a plan to create a digital ecosystem for Audi owners to confidently go electric. After customers place a reservation, they will be able to track it online and with their local dealer. Audi plans to share more details on this ecosystem and offerings for U.S. customers at the San Francisco event.

As an electric SUV that includes integrated digital tools, in-home charging solutions and the support of Audi of America’s 303 dealer partners, the e-tron will allow owners to confidently choose electric performance knowing they have Audi support of a full ecosystem, said Scott Keogh, president of Audi of America.

“We’re introducing a premium, customer-centric vehicle in a premium, customer-centric way,” Keogh said. “With our owners and our dealers, this process allows us to offer transparency from reservation and build all the way through delivery.”

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SAN FRANCISCO — Wells Fargo reported earlier this month a $10.3 billion year-over-year decline in auto loan balances in the second quarter due to bank's continued runoff of its auto loan portfolio. Executives, however, said auto originations, which fell 3% from the prior-year period to $4.4 billion, have stabilized over the last three quarters and that the bank is positioned for to begin growing its auto business once again.

John Shrewsberry, senior executive vice president and CFO, said the bank expects auto loan portfolio balances to begin growing by mid-2019. Asked if he expects the pace of its auto portfolio decline to slow, the executive said originations should be flat to up in the coming quarters.

“It’s just a question of how fast we’re amortizing in the more seasoned portfolio,” he said. “So where those lines cross, whether it’s late this year, early next year or a little bit later into next year, is hard to judge, unless we see quarter by quarter what the originations are. But I would say that we’re happy that we sort of stabilized and are now viewing the origination path as growing.”

The bank has been mired in regulatory scandals since September 2016, when it entered into settlement agreements in which it disclosed that it had opened several million unauthorized retail customer accounts and fired thousands of employees for improper sales practices between 2011 and 2015.

More recently, it was disclosed that Wells Fargo charged hundreds of thousands of borrowers for unneeded collateral protection insurance for their automobiles — a revelation that resulted in the bank entering into $1 billion worth of consent orders with the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC).

Wells Fargo also agreed in May to pay a $480 million fine to resolve a class action lawsuit filed by shareholders who charged the bank with misstating or failing to disclose details about its sales practices. And in April, the Federal Reserve ordered Wells to freeze its growth until it could prove it had improved internal controls. Wells was also ordered to replace several members of its board of directors.

This week, the bank announced it had successfully completed the requirements of a September 2016 consent order with the OCC related to compliance with provisions of the Servicemembers Civil Relief Act. The OCC announced in a posting on its website last Friday that the consent order had been terminated.

The announcement came after the bank reported that second-quarter earnings fell to $5.19 billion from $5.86 million in the year-ago quarter. The bank also revised its first-quarter earnings downward after agreeing to the pay the fines to the CFPB and OCC.

Revenues also declined to $21.6 billion from $22.2 billion in the year-ago quarter. Net interest income was $12.5 billion, up $70 million from a year ago. Noninterest income fell 8% from a year ago to $49 billion.

Consumer loan balances were down $10.4 billion on a year-over-year basis and $2.8 billion from the first quarter, while auto loan balances fell $1.9 billion from the first quartert due to tighter credit underwriting. Commercial auto loans fell 5% from the prior-year period to $10.9 billion on lower dealer floorplan loans.

Net chargeoffs were down $95 million from the first quarter largely due to improved severity and seasonality, the banks said. On a year-over-year basis, chargeoffs were down $13 million, reflecting lower outstanding loans and lower early losses from higher quality new originations. As for delinquencies, auto loans 30-plus-days past due decreased $57 million from the first quarter and $39 million from a year ago.

“To emphasize, as John said, in the auto business, I think we’ve seen the inflection, plus or minus,” said CEO Tim Sloan. “And we should be able to grow originations from here. Where the lines cross, as John mentioned earlier in terms of growing the overall portfolio, it’s likely to happen sometime in the first half of next year — not 100% certain when.”

As for the bank’s overall performance, Sloan added: “During the second quarter we continued to transform Wells Fargo into a better, stronger company for our customers, team members, communities and shareholders. I’m also pleased with our [comprehensives capital analysis and review], which demonstrates the strength of our diversified business model, our sound financial risk management practices, and our strong capital position, and enables us to return more capital to our shareholders in alignment with our goal of creating long-term shareholder value.”

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The automotive industry is constantly being challenged by outside influences, including tech companies and marketing agencies, many of which are attempting to streamline the car-buying process by minimizing the role played by dealership sales consultants. Customers who once relied on your expertise and guidance are finding it elsewhere.

Now is the time to remind ourselves of the basic principles behind the traditional showroom selling system and how to optimize the sales training we deliver. Let us do so with the help of the “Big Three” of Greek philosophers: Socrates, Plato, and Aristotle. How would each of these great thinkers train your sales team?

Socrates

Socrates (c. 470–399 BC) is known for not having any written works. He understood that thoughtful interaction is the greatest quality given to humankind. As a sales manager, he would reinforce the need for sales consultants to effectively communicate with customers as well as each other. That ability is an important leadership attribute the people you train will recognize, learn from, and emulate.

Socrates would “set the stage” for public debates — sharing thoughts, concepts, and knowledge in hopes of sparking discussions among his peers. Classroom-style training can improve productivity, but how are your trainees applying what they’ve learned? Pay close attention to your consultants’ physical location and posture on the lot and in the showroom, their body language in the fixed position and in motion, and their level of verbal discourse when speaking with customers on the phone and in person.

Plato

Plato (c. 428–c. 384 BC) is known for expressing the importance of order, form, and structure. The road to the sale is a system that must be taught to each sales consultant and then readjusted over time for continuous growth. For example, knowledge is provided in two forms, and they are dependent upon each other:

A priori knowledge is a universal truth and cannot be refuted. Plato would argue that great sales consultants are not born; they are made. He would train based on a system: One must know the steps to the close and how to sell the product, the organization, and oneself. This type of knowledge is only gained if managers accept the responsibility to share it.

A posteriori knowledge is gained by individual experience through observation and can be refuted. Thus, sales consultants will learn through trial and error how to navigate their way through a deal. This type of knowledge allows for creativity, allowing each trainee to develop their own identity.

Aristotle

Aristotle (384–322 BC) pursued an understanding of individual potential and capacity. As managers of the next generation, your duties go beyond desking deals. Evaluating talent and growth on your sales floor can be tricky, particularly if you do not have a method in place.

If he were a sales manager, Aristotle would know that the effectiveness of telling, showing, and recitation will vary based on the individual, and he would urge caution when offering support. For example:

• If managers provide too much assistance to a sales consultant, the consultant’s capacity remains idle and their potential is limited. Those who always expect a “helping hand” will grow slowly.  

• If managers provide zero or not enough assistance to a sales consultant, the consultant will believe his high level of potential is going to waste and his level of capacity is nonexistent — a resentful underperformer.

• If managers provide assistance in moderation, the consultant’s potential and capacity is challenged through success and failure. This leaves the consultant in a position to accept responsibility when assistance is not present and be grateful when assistance is provided.

Socrates shined a light on the importance and value of human discourse. Plato showed us that knowledge is gained through guidance by facts and personal experience, as separate entities and as a unit. Aristotle emphasized individual potential and capacity. Socrates taught Plato and Plato taught Aristotle, preserving and perpetuating their field of study. Dealers and managers are experts at passing down knowledge. The ability to do so in the face of constant disruptions will help keep us in business in the decades ahead.

Phillip Hellstrom is founder of Phelcan Group LLC and a 17-year automotive retail professional with expertise in sales training and customer relations. Email him at phillip.hellstrom@bobit.com.

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LONDON — The former factory executive credited with resurrecting the Fiat and Chrysler brands — and then combining them — died Wednesday morning at the age of 66. Sergio Marchionne had abruptly resigned as CEO of Fiat Chrysler Automobiles on Saturday; the official announcement cited “unexpected complications” that arose in the days following surgery for an undisclosed condition.

“Unfortunately, what we feared has come to pass. Sergio Marchionne, man and friend, is gone,” said John Elkann, a member of the Agnelli family, founders of the Fiat brand, in a statement. “Over the past 14 years together we have lived through successes and difficulties, internal and external crises, but also unique and unrepeatable moments, both personal and professional.”

Born in Chieti, Italy, in 1952, Marchionne emigrated with his family to Toronto, Ontario, Canada, at the age of 13. After earning an MBA from the University of Windsor and a law degree from York University, Marchionne worked as an accountant, tax specialist, and chief executive, first joining the automotive industry as Fiat S.p.A.’s CEO in 2004. Two years later, Fiat turned its first profit in five years; in 2009, Marchionne made the first of several moves that would result in the Italian carmaker’s acquisition of the struggling and recently bankrupt Chrysler Group and its rechristening as Fiat Chrysler Automobiles.

Marchionne was considered unique among industry executives — shrewd but genial and outspoken, favoring rumpled sweaters over jackets and ties, and committed to reviving the Fiat and Chrysler brands and merging the companies when the prevailing wisdom said it couldn’t be done.

“I believe that the best way to honor his memory is to build on the legacy he left us, continuing to develop the human values of responsibility and openness of which he was the most ardent champion,” Elkann said.

Michael Manley, an 18-year Chrysler veteran who most recently served as division head for FCA’s Ram and Jeep brands, was appointed to succeed Marchionne as FCA’s CEO.

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ORLANDO, Fla. — Organizers of the upcoming Industry Summit announced that registration is now open for the event, which will be held Oct. 8–10 at the Caribe Royale Orlando in Orlando, Fla. Industry Summit’s 2018 agenda will include F&I and sales training sessions, Compliance Summit and ACE certification, a host of networking opportunities, and new features such as Technology Shootout and sessions devoted to the R/V segment

Presented by F&I and Showroom and Auto Dealer Today, the “one pass” event remains focused on training, processes, technology, and compliance in an industry defined by change — to vehicles, buying and spending habits, and regulatory priorities. The theme of this year’s Industry Summit is “Protect the Future of F&I,” and the timing is critical, said David Gesualdo, show chair and publisher of F&I and ADT.

“Dealers must rally to protect their profit centers, and it starts with F&I, where deals are closed and the car buyer’s relationship with the service department is cemented,” Gesualdo said. “No threat to that profit center should be taken lightly, and our speakers will set themselves to the task of defending it with every tool in their arsenals.”

Registration for Industry Summit 2018 is open at the event’s website. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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“Manheim Express is a whole new channel and a whole new way to do business in the Manheim Marketplace,” said Grace Huang, president of Cox Automotive Inventory Solutions. “We are bringing the power of the Manheim Marketplace to the dealer’s lot, in the palm of their hand. On top of that, we are launching the industry’s only wholesale guaranteed first bid and are integrating 3D and 360‑degree vehicle imaging technology that leapfrogs the competition.”

After completing a few quick steps in the Manheim Express mobile app, dealers will have all of the information they need to evaluate a vehicle so that they can decide to take a “Guaranteed First Bid,” list it in the Manheim Marketplace, order an inspection or consign it to a Manheim operating location, according to the provider.

“Manheim Express is another example of how Manheim continues revolutionizing inventory wholesaling and how Manheim Marketplace is uniquely positioned to meet clients wherever they are — even off their lots,” said Huang.

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CINCINNATI — Swapalease announced the results of a user survey intended to reveal the best trucks and SUVs for “glamorous camping,” also known as “glamping.” Analysts asked users in top travel markets which vehicles they believe are most comfortable for experiencing the best elements of nature without leaving behind the comforts and conveniences of home. 

The top vehicles for glamping as voted on by Swapalease users in five states are as follows:

1. California: Land Rover Range Rover

Swapalease users in California named the Land Rover Range Rover as the perfect vehicle for glamping due to its high level of comfort: The seats offer power recline, heated calf-rests and footrests as well as a hot stone massage feature. The Range Rover also boasts cooled cup holders and a refrigerated front rear console.

2. Texas: Chevrolet Silverado

Texas users said that the Chevrolet Silverado is the ideal vehicle for glamping in Texas due to its storage capabilities, extra space, longer cabin, and wide bed suitable for stargazing. The Silverado includes built-in tie-downs for setting up camp in the bed as well as a 120-volt power outlet for accessories.

3. Arizona: Jeep Grand Cherokee

The Jeep Grand Cherokee was selected by Arizona users for its ease of travel and rugged terrain-performance capabilities. The Grand Cherokee includes a panoramic sunroof and folding seats ideal for sleeping in the cabin or storing larger glamping-trip extras such as bikes or hiking gear.

4. Colorado: Ford Expedition

Swapalease users in Colorado voted the Ford Expedition as their vehicle of choice for trips that require a longer drive time. The expedition is known for its adaptive cruise control, drive-time reminders, smart windshield wipers, and connectivity features.

5. Washington: GMC Terrain 

Washington users selected the GMC Terrain as their vehicle of choice for glamping trips. The GMC Terrain is known for its navigation techniques that are compatible with almost all devices, whether they be Apple or Android. 

“We have seen an increase in customers searching for leases that have practical capabilities, but also fit their changing lifestyle needs,” said Scot Hall, Swapalease’s executive vice president of operations. “Our customers know that they can have every feature they desire through leasing, rather than having to compromise on luxuries or practicality due to budget restrictions.” 

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ORLANDO, Fla. — Industry Summit will continue to consider pitches for Technology Shootout until next Wednesday, Aug. 1, organizers announced. The event will be held Oct. 8–10 at the Caribe Royale Orlando in Orlando, Fla., with Technology Shootout scheduled to commence at 2 p.m. on Tuesday, Oct. 9.

Show chair David Gesualdo said the new feature has sparked interest among providers in numerous categories, including fintech, mobility, website and social media development, inventory management, and more.

“We were hoping for new and intriguing ideas from a cross-section of the industry, and so far, that is exactly what we have seen,” said Gesualdo, publisher of F&I and Showroom and Auto Dealer Today. “We look forward to reviewing more entries and putting on a show to remember.”

Organizers will select the top 10 entries based on the topic’s value to attendees and its industry-changing potential. Each finalist will have 10 minutes of stage time followed by a real-time audience vote. Companies and individuals are invited to submit an idea in the form of a 500-word (max.) description via email by midnight ET next Wednesday, Aug. 1.

More information about Industry Summit 2018 is available at the event’s website. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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DALLAS — F&I product provider EFG Companies today announced the launch of a new dynamic digital portal designed to boost F&I producer knowledge, reinforce training learnings, and reduce the cost of a poor hiring decision for a dealership.

The EFG Learning Opps Through Virtual Engagement, or LOVE, was developed in response to complaints from dealers and general managers about the short-term impact of sending F&I producers to training. When training isn’t reinforced in the dealership, officials noted, improvements are quickly negated by diminishing returns.

“It’s clear that using multi-sensory learning methods with interactive tools better enables F&I managers to effectively deliver measurable results to a dealership’s bottom line,” said EFG Companies President and CEO John Pappanastos. “That’s why we developed EFG LOVE for our F&I class graduates.”

In addition to fortifying the lessons learned from EFG’s in-classroom training, EFG LOVE equips dealers with information and best practices on how to both sell to, and employ, the soon-to-be largest generation in the workforce with the most buying power — Millennials.

Numerous industry studies have shown that the automotive retail industry faces a recruiting and staffing crisis. The 2017 National Automobile Dealers Association (NADA) Workforce Study reported that retail automotive suffered from a 43% turnover rate, an 88% attrition rate among female new hires, and a below average rate of Millennial new hires when compared to other industries. Additionally, 65% of dealers state that recruiting and hiring is their No. 1 challenge — greater than customer acquisition or generating revenue.  

Officials note the company has placed hundreds of top performers at automotive dealerships across the country in its more than 40-year history. This has resulted in the deliberate buildout of a core-competency sourcing model to identify the core qualities of top performers. EFG LOVE pairs this top performer profile with industry statistics and trends to better enable dealers to develop high-performing teams.

“EFG LOVE helps shorten the onboarding time for new hires, keeps employees motivated, and accelerates the knowledge growth needed for a successful career,” said Steve Roennau, vice president of training and compliance with EFG Companies. “We created the content to enable the user to self-select actionable lessons in multiple digital formats. The more a producer can easily select materials that help them overcome their daily challenges, the more they will display the successful behaviors that they learned in our training.”  

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LONDON — Fiat Chrysler Automobiles has named Ram truck and Jeep head Michael Manley as its chief executive officer, after medical complications forced Sergio Marchionne to step away from the company, FCA has announced.

Manley established himself as a masterful manager of FCA's Ram and Jeep brands in recent years and positioned himself as the logical successor to Marchionne, a dynamic and plain-spoken leader who led the company out of bankruptcy after taking control of bankrupt Chrysler in 2009 during the global financial crisis.

"Mike Manley is a logical, solid choice to replace Marchionne in light of the success of Jeep and FCA's future being dependent on the success of Jeep and other global brands," said Michelle Krebs, executive analyst at Autotrader.

Manley was named to the role on July 21, after "unexpected complications arose while Mr. Marchionne was recovering from surgery that have worsened significantly in recent hours," according to an FCA statement. FCA also named Manley chief operating officer of the NAFTA region that includes commercial and retail sales in Canada and Mexico.

John Elkann, chairman of FCA's Netherlands-based holding company Exor, praised Marchionne's "management skills and unusual intelligence" as well as his "human qualities, his generosity, and the way he understood people."

Manley has been heading the Ram truck brand since October of 2015 and heading the Jeep brand since June of 2009.

Prior to those roles, he was the chief operating officer for FCA's APAC (Asia-Pacific) region. He was also the lead executive for Chrysler's international activities and was responsible for implementing the cooperation agreements for distribution of Chrysler products through Fiat's international distribution network. In December of 2008, Manley took on the role of executive vice president of international sales and global product planning operations, where he was responsible for product planning and sales activities outside North America.

Manley also served as vice president of sales strategy and dealer operations from 2003 to 2007. Manley joined DaimlerChrysler in 2000 as a director of network development for the United Kingdom.

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In recognition of its commitment to quality and value, Line\5 will be invited to send representatives to the awards ceremony at October’s Industry Summit at the Caribe Royale in Orlando, Fla.

“I’d like to thank all the readers of Auto Dealer Today and F&I and Showroom who took the time to record their appreciation of our efforts to serve our growing network of partner dealers,” said Justin Lane, the company’s CEO. “Winning Platinum in the new category of F&I Financing is a just reward for our team’s hard work in providing dealers with the fast, simple and flexible service they need.”

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Burlington, Vt. — Digital advertising agencies now have access to a scalable, artificial intelligence-driven ad platform with Fluency, a firm co-founded by Dealer.com founder Mike Lane and experts in the fields of ad tech, mar tech, engineering and client relations.

Fluency is a business-to-business (B2B) ad platform provider for industry-focused digital advertising and marketing agencies, which, to date, have had to choose between investing in an expansive in-house team to build and manage a proprietary platform, or partnering with a platform provider that may have limitations in scalability, personalization and reach.

“Digital advertising agencies, whether they realize it or not, are caught in the middle of ineffective options, all resulting in poor performance that results in churn of staff and clients,” said Lane, who serves as the firm’s CEO. “Our team recognized this and knew we could fix it. By using AI and our deep experience in ad tech and programmatic buying, we are serving up sophisticated automation — it is the only way for agencies to grow, scale and outperform the competition.”

Fluency’s easily integrated platform leverages a flexible open data exchange strategy: push data in and pull data out on demand so it can be utilized at all times to automate decisions and power campaigns. Users have a single point of entry to manage an entire campaign, monitor performance and launch the full portfolio across all accounts and channels. Tasks can easily be grouped together so updates are quick, accurate and consistent. This eliminates the risks associated with false advertising, outdated information and inconsistent branding, as well as the excessive time and money spent on manual operations and troubleshooting.

Fluency is founded by Lane, Eric Mayhew, Scott Gale and Brian McVey. The team previously worked together for several years growing an automotive-focused digital marketing company into a formidable disruptor valued at over $1 billion.

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“I look forward to representing a company that is on the cutting edge of automotive software development, and at the same time, has established a reputation of outstanding customer support,” Everhart said.

Everhart is based in Phoenix and brings more than 20 years of sales and management experience in the retail automotive industry to the position. Prior to joining Auto/Mate, Everhart worked at CDK Global and PBS Systems. He also owned and operated Autosoft South, a regional distributor for Autosoft DMS.

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I frequently speak at industry conferences. When my presentation is over, there are always a few folks from the audience who have questions or who just want to talk about the legal side of the car business.

When there are questions, it sometimes seems that there’s something of a “flavor of the month” thing going on — I’ll get several questions that are either identical or that have small variations on a central theme.

At this year’s National Independent Auto Dealers Association in Orlando, that theme seemed to be service contracts in general, and in particular, whether a dealer may require a credit buyer to buy one. Like most legal questions, the answer to this one is easy, except when it isn’t.

TILA and Reg Z Implications

The easy part of the question is whether the practice of requiring a service contract in connection with the credit sale of a vehicle violates the federal Truth in Lending Act and Regulation Z. The answer to that question is a simple “No,” because, as you might guess, the federal disclosure requirements tend to deal with disclosure rather than the substance of the transaction. It isn’t far from the truth to say, “The feds don’t care what you do, as long as you disclose it correctly.”

But the fact that federal disclosure laws don’t prohibit the practice doesn’t mean that the practice is not affected by them. In this case, the key to the application of federal law is the word “required.” When a dealer requires a service contract in financing contracts, but not in similar cash transactions, the charge for the service contract must be treated as a finance charge, added to other finance charges and included in the APR calculation. That’s pretty basic.

A little more esoteric is just how the charge must appear in the federal disclosure part of the retail installment contract. It should be shown as a “prepaid finance charge.” That means that most generic retail installment contracts cannot be used because they do not incorporate a prepaid finance charge disclosure.

And then there’s state law. In states that have definitions of “finance charge” that mirror or operate like the federal disclosure laws, several problems arise. First, there may be a state law that simply prohibits requiring the purchase of a service contract. Then there’s the disclosure issue which, in a lot of states, will require the same sort of analysis required at the federal level.

Are we done? Nope.

Authority Exceeded

Most states impose a rate cap for finance charges. In such states, the cost of the service contract, when added to other finance charges in the deal, may produce a rate so high that it exceeds the state’s maximum permitted rate.

Finally, there is the issue of how finance charges must be computed at the state level. Some states require that finance charges be computed only by applying a rate to a declining balance. An upfront charge such as the fee for a service contract won’t meet that test.

One conference dealer attendee kept arguing that requiring a service contract couldn’t create the difficulties I described to him. Finally, he said, “My DMS provider says that by simply including the cost of the service contract in the itemization of amount financed, I’m disclosing everything correctly!”

In response, I asked, “But have you told the DMS provider that you are requiring the buyer to purchase the service contract, or does the DMS provider believe that the purchase is voluntary? Go ask the DMS provider that question.” The dealer left to wander over to the DMS provider’s booth in the exhibit hall, and I didn’t hear from him again.

From several recent AG actions, I can tell you that this one is a front-burner problem. If you’re requiring buyers to buy service contracts, pull down the shades, flip the sign on the door from “OPEN” to “CLOSED,” lock the doors, and go visit your lawyer.

Thomas B. Hudson is a partner in the firm of Hudson Cook LLP, publisher of Spot Delivery, and the author of several widely read compliance manuals. Contact him at tom.hudson@bobit.com. ©CounselorLibrary.com 2018, all rights reserved. Single print publication rights only, to Auto Dealer Today (7/18). HC No. 4820-5588-3116

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Jacobson most recently served as dealer sales and service manager in the San Francisco office of Toyota Financial Services, starting in 2013; starting in 2007, he held the same position in the Sacramento office of TFS. He is credited with helping the company’s production in insurance, finance and lease, loans, and floorplan. He earned the University of Toyota’s “Master” certification in Toyota Quality Financial Management in 2002, and represented his region at both Dealer Council and Dealer Advertising Association meetings throughout his tenure as DSSM. In 2015, he was named National Champion in TFS’s Dealer Simulation contest at the National Sales Conference.

“Pete is a perfect fit with Portfolio. He has known us as a competitor for many years, and brings vast experience working with dealer principals in all aspects of their operations,” said Graye Wolfe, Portfolio’s managing director for the Western U.S. “As a former dealer, I respect what he brings to the table and predict he will be very successful as one of our reinsurance specialists.”

CSO Dan Haugen added, “Portfolio’s growth has always been based on putting the most talented industry veterans in the field to serve our dealer clients. Our future growth depends on the same, with experienced reinsurance specialists working with our agents to deliver our unique value proposition to new dealer clients. I am enthusiastic about Pete joining our sales team, because he has the qualifications and energy help us build our business.”

A 1983 graduate of the University of the Pacific with a B.S. in economics, Jacobson began his career with GMAC in California. He was hired by Toyota Motor Credit Corp. in 1991 as a dealer relations manager and would promoted to performance development manager in 2000, when TMMC merged with Toyota Motors Insurance Services.

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ORLANDO, Fla. — Gregory Arroyo, editorial director of F&I and Showroom and Auto Dealer Today, will reprise his role as moderator of Industry Summit’s annual “From the Boardroom” panel session, organizers announced today,

The panel will feature top executives from F&I product companies and software firms, who will tackle the big questions facing the F&I trade as the industry continues to push for a more digitized car-buying experience.

“There’s a reason why our tagline this year is ‘Protect the Future of F&I,’” said Arroyo. “This drive to move the sales and F&I processes online has clouded our industry’s future and raised a slew of questions — questions I hope to tackle with panelists.”

The discussion will also look at the new wave of compliance, with state attorneys general vowing to take up the Consumer Financial Protection Bureau’s torch now that its dealer participation guidance has been repealed. The panel will also look at the Federal Trade Commission, which is fully staffed for the first time in years and has a new director of consumer protection.

The panel will also examine the impacts of rising interest rates and record transaction prices, as well as look at F&I production and what’s driving it in today’s margin-compressed environment. Trends in auto finance will also be a key focus, particularly the pullback by banks, the market share grab by credit unions, and the overall retreat from the subprime tiers.

“We’ve seen a lot consolidation on the F&I product provider and agent sides of the business. Could this be the result of today’s digital transformation?” Arroyo noted. “Sometimes, when you’re going through a transformation, you don’t even know you’re going through it. And that’s what we’ll find out this October during Industry Summit’s annual ‘From the Boardroom’ panel discussion.”

Industry Summit is scheduled for Oct. 8–10 at the Caribe Royale Orlando, in Orlando, Fla. For more information or to register, visit www.industrysummit.com. To discuss sponsorships and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email at Dgesualdo@mgigusa.com.

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MCLEAN, Va. — June was an especially strong month for the used-vehicle market, resulting in J.D. Power Valuation Services’ Seasonally Adjusted Used Vehicle Price Index increasing 1.2 points from May to 118.2. Compared to a year ago, the index was up 4.1 points.

Over the last five years, June losses have averaged 2.2%. This June, wholesale prices for used vehicles up to eight years in age fell by 0.9% compared to May.

“Losses at the segment level were less than historic norms across the board on both the mainstream and premium sides of the market,” the firm noted in its monthly report. “Midsize pickups and large utilities segments returned the best performance for the month.”

Following the positive trend the firm observed over the past several months, midsize pickup prices increased 0.6% — the segment’s best result since 2009. This is despite the past five years’ price movement for this segment being flat to down slightly.

After declining 6.3% in May, large utility prices bounced back slightly in June. “This was the first time in 2018 that prices for the segment increased and the group’s best showing for the period in 2018 that prices for that segment increased and the group’s best showing for the period since 2009,” the firm noted in its report. “However, when looking at month-over-month price movement for this group, it’s important to remember that the overall sample size is small compared to others. So any material change in prices is amplified.”

At the opposite end of the spectrum, premium segments recorded some of the largest losses for the month. Large premium car and midsize premium car prices fell by more than 2%, following closed by midsize premium SUV and compact premium car with losses of 1.6% and 1.5%, respectively. However, losses observed in these segments were less than what’s typically recorded for the period, the firm said.

Looking at auction trends, volume for units up to five years in age declined 16.3% compared to May and 2.8% from a year ago. As a result, year-to-date later-model volume now sits 2.3% above year-ago levels and continues to increase with each passing month.

“At the segment level, some of the largest volume increases are still observed among SUV segments,” the firm said. “Compact premium SUV volume is up 53.3% and large SUV volume is up 26.3%. In terms of volume share, cars reached 52.2% and trucks are at 47.8%.

“Overall, we are anticipating a 6.5% increase in supply for vehicles up to five years in age this year, which is slightly less than the 6.6% increase recorded in 2017,” the firm added. “We believe that most of this year’s increase will be driven by a 14.2% increase in off-lease volume followed by an 8% increase in rental supply and 2.7% increase in regular retail purchase supply. Supply is expected to peak in 2019 before leveling off.”

Looking ahead, the firm expects July wholesale prices of vehicles up to eight years in age to decline by less than 1%. As for the firm’s full-year forecast, it expects used prices to increase by approximately 1% in 2018, up from the 0.8% forecast it reported last month.

“Negative forecast factors hurting used vehicles continue to be incentives, an anticipated increase in used supply, worsening credit conditions and increasing gasoline prices,” the firm noted in its report. “However, positive factors (e.g., favorable labor conditions, strengthening housing prices, long-term quality improvements) will outweigh the negatives.”

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ATLANTA – The Manheim Marketplace achieved record growth across its digital channels in the first half of 2018, the company announced today. The company said it observed double-digit growth in digital transactions, volume and sales as wholesale vehicle buyers and sellers continue to adopt a faster, more cost-effective way to move inventory.

During the first half, 45% of all vehicles were sold to a digital buyer on Manheim.com, OEM-specific Private Stores, OVE or Simulcast. Digital offsite dealer sales, transactions happening outside a physical auction location, experienced particularly strong growth, increasing 32.6% over 2017.

“Our clients are benefiting from the incredible audience of active buyers and engaged sellers in the Manheim Marketplace,” said Zach Hallowell, vice president of Manheim Digital Marketplace and RMS Automotive. “With significant upgrades to our digital auction technology, intelligent search functionality, Manheim Market Report valuations, OEM build data penetration, and condition reports, dealers have the peace of mind to feel confident in their digital purchases.”

RMS Automotive achieved several all-time records in the first half with its Private Stores seeing unprecedented sales levels from BMW/MINI, Mercedes-Benz, Nissan/Infiniti, Porsche, and Volvo. And buyers originating through co-listing generated 40% of total Private Store open sales. The co-listing capability allows open sale vehicles listed on the RMS Automotive Private Stores to be simultaneously offered on Manheim.com and OVE.

OVE achieved a major milestone of 3 million transactions since the platform launched in 2013, in part due to record months in March, May, and June, with transactions up 15.8% over 2017.

The company also reported the completion of several client-focused improvements to its digital channels during the period. They include the following:

• Insight Condition Reports: Manheim rolled out a new Insight Condition Report that features more manufacturer data, crisper photos, and improved visuals.
• Manheim Express: Debuted at NADA 2018 and launching nationwide on July 25, the Manheim Express mobile application offers dealers a self-service way to list and sell inventory in the Manheim Marketplace.
• New OVE Search: Manheim launched the automotive industry's first intelligent search for wholesale inventory on OVE, reducing search time and delivering more accurate and personalized search results.
• AI-Powered Optimization Solutions: Combining machine learning with Cox Automotive’s unmatched proprietary data assets, RMS Automotive created an AI-powered Optimization product suite — Pricing, Location, and Reconditioning — that provides vehicle-specific recommendations that inform data-driven decisions to drive the highest portfolio value for commercial clients.
• Manheim Market Report (MMR) Enhancements: Manheim continues investing in MMR, making it more accurate through the addition of OEM build data and by leveraging machine learning and data science to adjust for other factors like condition and mileage variability.

“We are feeling bullish as we see an increase in cross-channel buying and selling, the cornerstone of the Manheim Marketplace,” said Derek Hansen, vice president of offsite solutions at Manheim. “The success we’ve seen so far this year fuels our desire to continue enhancing the digital experience and building trust with our buyers and sellers.”

Over the next few months, the company reported, Manheim Marketplace buyers and sellers will benefit from additional enhancements being implemented to improve their user experience. They include:

• Enhanced Vehicle Detail Page (VDP) on OVE: The goal is to provide clients with the most relevant information at a glance. Insight Condition Reports information will be visible on OVE VDPs, making inventory sourcing easier and faster.
• Manheim Seller Dashboard: Sellers will have the necessary information to make more data-driven decisions across their entire vehicle portfolio, while providing clearer insight into what actions are required to maximize their returns.
• Personalized Vehicle Recommendations: To help buyers quickly find the right car, Manheim is leveraging deep data science capabilities and massive data set to provide highly relevant and personalized recommendations based on buyers’ previous activities.

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DAYTON, Ohio — The Reynolds and Reynolds Company and Penske Automotive Group today announced the two companies have extended their exclusive agreement for Reynolds to provide the Reynolds Retail Management System to all Penske new-car dealerships in the U.S. and Puerto Rico.

Under the new agreement, Penske intends to integrate electronic document management to improve workflow and efficiency and install the Reynolds docuPAD system in F&I departments across more than 120 Penske dealerships. Reynolds docuPAD system is an interactive tabletop tool designed to engage customers and improve the F&I process by creating a consistent presentation, safeguarding compliance, and improving the effectiveness of the F&I process.

“We have had the privilege of doing business with Roger Penske for some 30 years now,” said Bob Brockman, chairman and CEO of Reynolds and Reynolds. “We all take a lot of pride in working with their team and everyone here is committed to delivering the best possible products, services, and results to them. The standards they hold are high, and we look forward to the opportunity to continue to meet those standards.”

Roger Penske, chair and CEO of Penske Automotive Group, added: “We are pleased to extend our relationship with our long-term partner, Reynolds and Reynolds. The Reynolds Retail Management System is fully integrated into all of our U.S.-based auto dealerships providing our teams with consistency and some of the best products in the industry. We look forward to taking the next step with Reynolds as we implement the docuPAD system and working with their team of talented individuals to improve our operations.”

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Dent Wizard’s acquisition includes both auto service brands operating under the company’s LLC: Image Auto, the Syracuse, N.Y.-based provider of mobile reconditioning services, primarily through auto dealerships; and Rim Doctor, a full-service mobile wheel refinishing and custom coatings shop. The areas serviced by both businesses include Central and Western New York, and Eastern Pennsylvania into Northern Philadelphia.

Image Auto’s CEO, Paul J Daly, who founded the company in 2004, will serve Dent Wizard by working to deepen dealer relationships through outreach marketing and brand building. Image Auto’s management team of Jeremy Kappes, Peter Schultz, and Tyrell Zechin also bring many years of experience to Dent Wizard, all according to the announcement. Terry Koebbe, chairman of Dent Wizard, led the acquisition effort.

“I’m super excited about having Paul and the rest of his team join Dent Wizard,” Koebbe said. “They have developed a winning culture and have built a reputation for high quality repairs and excellent customer service. I expect this joining of the two companies to be a win for everyone, especially all of our customers.”

“This move is going to supercharge our vision at Image Auto, which is to deliver a holistic cosmetic reconditioning solution to dealers that will truly be a weapon in their ongoing battle with margin compression,” Daly added. “The combination of Dent Wizard’s relationships, experience and resources with our team’s passion, energy and progressive thinking are a home-run. I believe our new partnership with Dent Wizard will mark a substantive change in the way dealers solve their cosmetic reconditioning challenges at scale. Great things ahead!”

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NIAGARA FALLS, N.Y. — Wheel’s Automotive Dealer Supplies Inc. and Monroneylabels.com, two companies that specialize in vehicle signage and information, have teamed up to jazz up the Monroney Label and add a little merchandising punch to the mandated sheet of paper.

The new venture, according to officials with both companies, has led to the first significant upgrade and merchandising improvement in decades for this essential information label. The Automobile Information Disclosure Act of 1958 mandated the disclosure of equipment and pricing on each new automobile sold in the United States. The Monroney window sticker was named after Senator Mike Monroney from Oklahoma.

“It’s about time,” said Richard Ashworth, Wheel’s president. “Now buyers will truly take notice of these dealer-branded Monroney Labels, because they’re merchandised more professionally to attract shopper attention and deliver a silent, 24/7 sales story.”

Wheel’s specializes in innovative marketing products for automotive retailers. One if its more popular Monroney Label holders is Magic Cling, a reusable car-window label holder that offers like-new merchandising appeal.

Wheel’s Magic Cling window sticker holders can be custom ordered in any size or shape. These holders leave no residue when removed from car windows, and they can be reused up to 50 times, according to the company. It is one of several types of Monroney Label holders available from wheelsauto.com.

While each new vehicle is delivered with a factory-applied Monroney Label, used-car departments and used-car dealers must source this vehicle data from VIN explosions, and print and apply — or attach online digital versions to each corresponding vehicle for sale online. 

“Seventy percent of vehicles listed for sale on the internet are missing or have misdirected factory options listed,” said Ned Nielsen, a former multi-franchised dealer who now serves as president of MonroneyLabels.com. “We help dealers ensure this vital seller information is present on each used car, and now, with our venture with Wheel’s Auto, this essential label is presented in such a way it builds value into that vehicle in the shopper’s mind.”

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IRVINE, Calif. — AutoGravity today named replacements for its chief executive and chief technology officer (CTO), who reportedly left about two months ago.

Alex Mallman, who most recently served as president and CEO of Mercedes-Benz Auto Finance China, replaces AutoGravity’s co-founder and CEO Andy Hinrichs, who left in May, according to the Orange County Business Journal. The fintech firm also announced that Jason Bonifay will replace Sheng Wang, who reportedly left two weeks after Hinrichs’ departure.

A company spokesman only confirmed Hinrichs has left the company, but offered no further details. The former chief executive lists himself as a fintech entrepreneur and digital executive on his LinkedIn page, which notes that his time as head of AutoGravity ended in May 2018.

“Alex has the unique ability to translate vision and strategy into world-class execution, which enables a compelling consumer experience,” said Benedikt Schell, chief experience officer and member of the Daimler Financial Services AG’s board of management. “With millions of users embracing AutoGravity, the company has paved unprecedented digital roads in the industry. Under Alex’s leadership, adoption of AutoGravity’s award-winning technology is expected to accelerate exponentially.”

Schell also serves as chairman of AutoGravity’s board of directors.

The new appointments come as the startup hit a new milestone, reaching two million users in less than two years since its initial launch. According to the company, the milestone represents more than $2 billion in financing requests.

The company also claims to have partnered with more than 2,200 dealerships across the U.S. and more than 20 of the nation’s largest banks and captive lenders, including Hyundai Finance, Mercedes-Benz Financial Service, Nissan Motor Acceptance Corp., TD Auto Finance, US Bank, and Volkswagen Credit

Hinrich was coming off a nearly 20-year career with Daimler Financial Services when he and AutoGravity COO Nicholas Stellman, another Daimler Financial Services veteran, founded the fintech firm with the backing of Daimler AG in October 2015. The first version of the firm’s tool was silently released in early 2016. It allows shoppers to secure vehicle financing or a lease on their mobile device before visiting a dealership.

In July 2017, the fintech firm announced that VW Credit made a $30 million equity investment in the company. Earlier that year, Daimler announced it was investing a “double-digit million euro amount” into AutoGravity.

This past March, the company earned the Orange County Business Journal’s Excellence in Entrepreneurship Award. Hinrichs also received Automotive News’ All-Star Award in 2017 and the publication’s 2018 Excellence in Entrepreneurship Award. AutoGravity also took home the grand prize in F&I and Showroom’s F&I Digital Media Awards at last year’s Industry Summit, and was named Entrepreneurial Company of the Year in May 2017 by Frost & Sullivan.

Wang, whose LinkedIn page notes that she left the company this month, was one of five honored in May at the Orange County Business Journal’s 24th annual Women of the Year awards. She joined the company in March 2016 as head of product and was named CTO this past December.

Mallman was appointed as president and CEO of Mercedes-Benz Auto Finance China in 2014. He began his career in 1998 with Mercedes-Benz in Brazil and held several senior management and managing director positions in the American and Europe, including president and CEO for Mercedes-Benz Financial Services in Spain and Portugal.

“I’m extremely excited to join the AutoGravity team and further revolutionize the digital car-buying experience for customers,” he stated in the company’s press release. “The company is full of amazingly talented people, market-leading technology, and unmatched momentum. With our focus on constantly exceeding the expectations of consumers, dealers, and lenders, AutoGravity will become the digital standard for car buying and financing.”

Bonifay joined the AutoGravity leadership team in May as vice president of engineering. He previously served as vice president of development for product and engineering at CDK Global. He also spent five years as vice president of software engineering at Bankruptcy Management Solutions. Before that, he served as CTO at Propero Software.

“AutoGravity has established a reputation as a leading innovator in the automotive industry. The opportunity to provide technical leadership and drive innovative solutions during this era of rapid growth is an exciting and welcome challenge for me,” he said. “I look forward to contributing to AutoGravity’s mission to revolutionize the digital car-buying experience.”

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The MaaS market is expected to grow to a $358 billion market in the U.S. by 2025, up from $38.6 billion in 2017. The HyreCar/DriveItAway partnership allows DriveItAway affiliated franchise and independent car dealers to immediately list their vehicles on the HyreCar platform, extending a new opportunity to dealers in 34 states and the District of Columbia.

“Our program offers the best of everything, today, for a car dealer,” said John F. Possumato, longtime automotive retail industry veteran and founder and CEO of DriveItAway. “By providing a new, easily managed shared mobility department, our dealers are preparing for the ‘mobility as a service’ future which will allow a quick and efficient way to create new scalable revenue streams. Most importantly, we are also introducing a new customer base for the store for vehicles sales and fixed operations. As a ‘path to ownership’ to our driver customers, we are enabling new buyers to the store, not ‘poaching’ current prospects in the market.”

DriveItAway has positioned itself as a leader in dealership-focused shared mobility solutions. Possumato, through DriveItAway, conceived and created the “Lyft Your Down Payment” program and the “Drive For Your Down Payment” program, where car dealers can implement a rental program for ridesharing drivers who want to raise money to buy a vehicle. These programs create a “path to ownership” which, in turn, leads to more vehicle sales and more fixed operations revenue for the store, all according to the announcement.

“This partnership underscores our mission to building roads to financial freedom,” said Joe Furnari, CEO of HyreCar. “We are focused on creating strategic alliances that expand our supply of vehicles, which will provide us with the infrastructure to scale. We are excited to become the franchise solution for vehicle suppliers who want to tap into the growing mobility industry.”

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PHILADELPHIA — Software developer GoMoto today announced that its Virtual Service Advisor Platform has been certified to integrate with Autosoft’s DMS.

GoMoto’s Virtual Service Advisor is cloud-based kiosk technology for the service lane that provides streamlined, self-led customer check-in. With the integration, Autosoft DMS users can open repair orders, update customer appointments and information, and offer vehicle trade appraisals and upsell every customer.

“Automotive dealers are looking to improve the consumer journey and deliver the dealership experience of the future,” said GoMoto CEO Todd Marcelle. “Consumers are used to self-service technology across many other retail environments and expect the same from the automotive industry. Bryce Veon and his team at Autosoft have continually pursued progressive integrations to ensure their dealers are able to adopt the latest technology to maintain a competitive advantage.”

Deal Novotniak, Autosoft Connect Program director, added: “Our dealers rely on us for a complete end-to-end dealer management system that allows them to run their business seamlessly, efficiently, and profitably. With the integration of GoMoto’s self-service kiosk, our dealers can maximize their profit potential with an innovative, cutting-edge service lane solution.”

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CHICAGO — Ally Financial and the National Association of Minority Automobile Dealers (NAMAD) honored Karmala Sutton, dealer in training at Honda of Kenosha in Bristol, Wis., with the first-ever Ally Sees Her Award today during NAMAD's 2018 Annual Membership Meeting in Chicago.

Sutton received the award in recognition of her success as an auto retail leader, her dedication to giving back and her commitment to building the next-generation of minority dealers, who are underrepresented across the country.

"I'm humbled to be recognized for doing things that I'm passionate about," Sutton said upon learning of the award. "I'm committed to the auto industry and look forward to working with NAMAD to help my peers succeed. Without giving back to improve the lives of others and make the communities where we live and work better, success is hollow."

Inspired by the Association of National Advertisers’ #SeeHer campaign to elevate women in media and marketing, Ally created the award to recognize promising, young women leaders in the auto retail industry. As part of the award, Ally will make a $10,000 donation to the charity of Sutton's choice: CRU Agape Center, a Chicago based non-profit that works with local churches and community centers. Sutton has earmarked the funds to help the homeless and children in communities troubled by violence.

"Being from the Chicago area and having the NAMAD meeting here in Chicago this year, it made sense to have the donation make a difference here in the city, especially in the communities that need it most," Sutton said.

Her dedication to giving back to the community can be traced back to values instilled in her by her church and a high school mission trip to Ghana with Opportunity International, a microfinance not-for-profit that helps economic development in poor areas throughout the world. During her college years, she became involved with Locks of Love, giving her time and even her own hair to the nonprofit. Through her dealership, she has led efforts to benefit Toys for Tots. She also has volunteered on NAMAD NextGen's executive board for four years, serving as president for the last two years. NextGen helps prepare aspiring auto dealers to succeed in the industry.

Sutton has been an influential voice in NAMAD's efforts to mobilize the sons and daughters of our current dealers and also shed a bright light on our current up and coming Minority managers who will be our future dealers, said Damon Lester, NAMAD president. "Her commitment to helping her peers become strong dealers who carry our industry into a bright future is an inspiration."

Sutton began her automotive career as a co-chair of the Northwood University Auto Show of the Palm Beaches while attending college. She graduated from Northwood University in West Palm Beach in 2010 with a Bachelor's in Business Administration and an Associate degree in Hospitality Management. After graduation, Sutton worked as a buyer for Carmax, where she honed her skills and found a love for the automotive retail industry. She then went to work at her family's Honda of Kenosha dealership as the pre-owned manager.  As the dealer in training, Sutton works beside her father, Nathaniel Sutton, owner of Sutton Auto Team, to understand the business. Sutton Auto Team has two additional dealerships in suburban Chicago.

"We're excited to honor Karmala with the inaugural Ally Sees Her Award. She embodies the hard work, determination, and leadership potential that this award was designed to recognize and we look forward to all she will accomplish in the years to come," said Jacqueline Howard, senior director of corporate citizenship at Ally. "Her enthusiasm for giving back also makes her a beacon of caring in the community, which is fundamental to being a strong dealer."

Howard added, "At Ally, our motto is 'Do It Right,' which means supporting dealers who are often the backbone of their communities and are helping move the industry forward. It also means promoting diversity and women in leadership. The more young women and girls see leaders like Karmala, the more they are empowered to rise to become leaders themselves." 

In addition to supporting Sutton's chosen charity, Ally will make an additional $5,000 available to charities selected by NAMAD members. During the annual conference, Ally will give $100 gift cards to 50 NAMAD members, who can use the cards to make donations to the charities of their choice.

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“It is with a combination of disappointment and excitement that I announce the retirement of Ray Branch,” said Les Silver, chairman KEEPS Inc. “Ray had a distinguished career spanning all aspects of dealership fixed operations from OEM, to dealership, to consulting, to the founding of KEEPS 25 years ago. He was instrumental in pioneering the concepts behind KPIs in general and the use of ROAMs analytics software to guide service management in the optimization of service department performance. He made a tremendous contribution to both the industry and KEEPS Inc., and he will be missed.”

Branch founded KEEPS in 1993. As well as creating many of the automotive industry’s most critical KPIs, he is also widely respected for developing some of the best management practices used by top operators in the retail automotive industry today. Branch partnered with Silver, founder of Newgen Results, MPI and Service Repair Solutions, in 2013. In 2016, Fraser McCombs Capital partnered with KEEPS, assisting with the acquisition of Dynatron Software, which is now a wholly owned subsidiary, all according to the announcement.

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LAWRENCEVILLE, Ga. — Black Book (div. of Hearst Autos) today announced the integration of its vehicle valuation data with Motorsport Network’s MYEV.com, a car-shopping platform dedicated exclusively to the buying and selling of electric vehicles (EVs).

While traditional car shopping platforms cater to standard internal combustion engine (ICE) vehicles, Motorsport Network has positioned MYEV.com as a solution to combat the lack of EV-specific search tools as electric vehicle ownership and adoption rates skyrocket globally. With today’s announcement, Black Book valuation data will be integrated with all EVs listed in the MYEV.com system, which will help buyers and sellers ensure they’re reviewing the most accurate and up-to-date valuations within the market.

“The market for EVs will only continue to grow in more significance as we move forward,” said Eric Goeres, president of automotive for Motorsport Network. “As this demand increases and we see an influx of buyers and sellers in the MYEV.com marketplace, it will be imperative to have a valuation partner such as Black Book available for our valued users.”

According to the International Energy Agency (IEA), a record number of EVs (1 million) were sold in 2017, more than doubling the number of EVs on the road. It is estimated that 125 million EVs will be on public roads by 2030. According to Black Book data, the three-year retention rate on a 2015 model-year EV Compact Car is 33.2% — 25.5% on a 2014 model-year EV.

In addition to EV inventory, MYEV.com will also soon include plug-in hybrid electric vehicles (PHEV) within their marketplace, also supported by Black Book valuations.

“Over the years Black Book has been committed to building the most accurate valuation data available for EVs and alternate fuel-focused segments,” said Jared Kalfus, executive vice president of revenue for Black Book. “We are pleased to be a valuation partner for an important EV marketplace such as MYEV.com, and we believe their market will grow along with widespread adoption and use of EV vehicles over time.”

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ATLANTA — Cox Automotive, in partnership with the National Association of Minority Automotive Dealers (NAMAD), awarded its Rising Star Award to William Montez “Monte” Perkins II, general sales manager with Taylor (Mich.) Chevrolet. Perkins was chosen based on nomination criteria, including being a NAMAD member under the age of 40 who has demonstrated a strong commitment and contributions to the automotive industry.

In nominating Perkins, Marjorie A. Staten, president of the General Motors Minority Dealers Association, said, “Monte was 11 years old when he first attended the GM Minority Dealer Summer Conference with his family. It was very apparent that Monte, even at this very young age, had a passion for cars and dealerships, and was eager to learn all that he could about the car business. … He said his dream was to be the ‘best dealer ever.’ I knew then that he was going to be a force in the automotive industry.”

Perkins’ career began in a management role in Merollis Chevrolet, where he developed a strategic vision that his staff adopted and fully supported. Through his stewardship, the dealership was profitable every year of the 16 years in which the Perkins family owned Merollis Chevrolet. 

Perkins’ father sold the Merollis Chevrolet dealership in October 2017, when Perkins transitioned into a management position at Taylor Chevrolet, also owned by his father. In the short time in this role, he has successfully laid the foundation to achieve the same success he achieved at Merollis Chevrolet.

Nicole Ashe, senior vice president of talent, diversity, and culture for Cox Automotive, presented the award at the NAMAD annual meeting awards dinner in Chicago on July 12.

“On behalf of Cox Automotive and in partnership with NAMAD, I am honored to recognize Monte for his lifelong dedication and success in car sales. Monte’s passion and drive are felt by his staff and customers alike,” Nicole Ashe.  

“I am honored to receive this prestigious award,” said Perkins. “I feel so fortunate to be raised in a family committed to this industry, and for my father to provide this foundation that has changed my life. This is a complex and challenging industry, and I am grateful to have learned from such a successful organization. I’ve dedicated my life to dealerships and look forward to teaching the next generation of young people the benefits of working in automotive.”

When not working in the dealership, Perkins continues to help shape the next generation through volunteer and local youth organizations, such as speaking at the Southfield Lathrup Falcons Football Program, where he played quarterback. Speaking at the awards banquet, Perkins chose to speak on “Life After Football” and shared his love for the automotive business. Perkins said he believes in the importance of today’s youth to understand the many opportunities to be successful in life in other ways beyond professional sports or entertainment.

Cox Automotive is donating $5,000 to one of its national diversity partners in Perkins’ honor. He chose National Urban League, a nonprofit organization with a mission of empowering African-Americans through economic self-reliance, parity, power, and civil rights.

“We are grateful for all that Cox Automotive has contributed to NAMAD, the GMMDA, and the minority dealer network over the years,” Staten said. ”Cox is a true partner and we are honored by its generous and unwavering commitment to help our dealers build their businesses, attain profitability, and create a strong legacy in the automotive industry.”

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HOFFMAN ESTATES, Ill. and ATLANTA — CDK Global Inc. today announced it has entered into a definitive agreement to acquire ELEAD1ONE. The value of the transaction, which was unanimously approved by CDK’s board of directors, was not disclosed.

The deal was first reported on Sunday by The Banks Report, which described the acquisition as checking off “several boxes for CDK while filling a big product hole — a viable integrated CRM platform with significant market share.” According to CDK’s press release, ELEAD1ONE works with approximately 4,000 auto dealership across North America.

“As we looked at how best to rapidly address the needs of dealers in today’s evolving marketplace, we determined that ELEAD1ONE’s centerpiece CRM offering a fully integrated suite of layered applications fit well with our diversified product offerings,” said Brian MacDonald, president and CEO of CDK Global. “In addition, ELEAD1ONE’s well-regarded customer service capabilities will complement our focus on delivering an outstanding experience to its dealer customers. We look forward to helping dealers deliver a great customer experience with our combined products and services.”

ELEAD1ONE’s automotive customer relationship management (CRM) software and call center solutions enable seamless interaction between sales, service and marketing operations to provide dealers with a customer acquisition and retention platform. According to The Banks Report, CDK is acquiring a company with annual revenue of more than $100 million.

“ELEAD1ONE dealers demand superior performance from the most advanced and integrated CRM software solution in the automotive industry,” said ELEAD1ONE Founder and CEO Hugh Hathcock. "Recognized as a clear industry leader, ELEAD1ONE has consistently developed and delivered powerful cutting-edge dealer solutions, combining CRM with our successful ELEAD1ONE Contact Center, and Fixed Ops platform."

Judy Hathcock, founder and president of ELEAD1ONE, added, “Together with CDK, the integrated companies will leverage vast resources to continue to invest in state-of-the-art information technology, innovative software application development, and highly effective communication platforms that emphasize superior user experiences with significant measurable ROI and reporting. Together we remain dedicated to focusing on innovation, support, and delivering the highest quality technology, products, and services."

According to The Banks Report, the deal was submitted to the Federal Trade Commission several days ago and should close within a month following a regulatory review. The FTC halted CDK Global’s acquisition of Auto/Mate this past March. The media out said it does not believe federal regulators will block this transaction.

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WASHINGTON, D.C. — The Federal Trade Commission, working jointly with 12 partner agencies in seven states, conducted the first compliance sweep of car dealerships since its amended Used Car Rule took effect earlier this year, the regulator announced today.

The sweep was conducted in 20 cities nationwide between April and June 2018. According to the FTC, inspectors found Buyers Guides on 70% of the more than 2,300 vehicles inspected, with almost half of those displaying the revised Buyers Guide. Of the 94 dealerships inspected, 33 had the revised Buyers Guide on more than half of their inventory, and 14 had revised Buyers Guides on all of their used cars.

“Why check things out now? Well, dealers were required to start using the new version of the guide on January 28, 2018,” wrote Colleen Tressler, a consumer education specialist for the FTC, wrote in a blog posted today on the regulator’s website. “And here’s what we found. Of the more than 2,325 vehicles inspected, almost half had the revised Buyers Guide. Dealers not displaying the revised guide received letters warning them to bring their dealerships into compliance.”

Under the amended Used Car Rule, which took effect on Jan. 28, 2018, dealers must display a revised window sticker, or Buyers Guide, on each used car they offer for sale. The revised guide changes the description of an “As Is” sale, places boxes on the face of the guide dealer can check to indicate whether a vehicle is covered by a third-party warranty and whether a service contract may be available, and adds airbags and catalytic converters to the Buyers Guide’s list of major defects that may occur in used vehicles, among other changes.

Dealers who fail to comply face penalties of up to $41,484 per violation. State and local law enforcement agencies also enforce the recently amended rule.

Over the coming weeks, according to the FTC, dealerships that were not displaying the revised Buyers guide can expect follow-up inspections to ensure they have brought themselves into compliance with the amended rule.

The FTC, along with its partner agencies, inspected dealership in the following areas: 1) Burbank, North Hollywood, Richmond, San Bruno, San Jose, San Pablo, and Van Nuys, California; 2) Jacksonville, Florida; 3) Chicago, Illinois; 4) New York, New York (Queens); 5) Brooklyn Heights, Cleveland, East Cleveland, and Cleveland Heights, Ohio; 6) Arlington, Dallas, and Grand Prairie, Texas; and 7) Lakewood, Puyallup, and Tacoma, Washington.

Agencies involved include the California Department of Motor Vehicles Inspection Division; district attorney’s offices in Contra Costa County, Los Angeles County, Santa Clara County, San Mateo, Calif.; the Florida Bureau of Dealer Services; the Cuyahoga, Ohio, County Department of Consumer Affairs; the Ohio Bureau of Motor Vehicles; the City of Chicago Department of Business Affairs and Consumer Protection; the New York City Department of Consumer Affairs; the Texas Department of Motor Vehicles; and the Washington State Office of the Attorney General.

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ST. LOUIS — Dent Wizard International today announced the hiring of Jim Powers as the company’s new CFO. Powers officially assumed his new role on July 2 and reports to Dent Wizard CEO Mike Black.

Powers comes to Dent Wizard having served in various leadership roles. He most recently served as president and CEO for St. Louis-based UniGroup Inc. and its subsidiaries, including United Van Lines, Mayflower Transit and other relocation and logistics-related entities. Prior to UniGroup, Powers held executive management positions with Viasystems Technologies, Crain Industries, Berg Electronics and Moog Automotive.

“Dent Wizard’s on a tremendous growth path, which has been continuing for more than seven years,” said Black. “Jim brings the intellectual capital and experiences that will help us continue the trend. I’m excited to have him on the senior team, and look forward to his strategic support for years to come.”

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RICHMOND, Va. — McGeorge Toyota is the latest dealership to add Roadster’s Express Storefront digital retailing platform to its website, the dealership announced today.

The new website feature, which the dealership refers to as “McGeorge @Home,” allows customers to complete a vehicle purchase from home without ever stepping foot inside the dealership.

“While we’ve always had customers tell us how much easier our buying process is compared to some of our competitors, we realize that people’s time is more precious than ever,” said Bob Farlow, McGeorge Toyota’s general manager. “Our @Home program is a way to help save our customers both time and money, all while making the entire process more efficient for everyone involved.”

In order to take advantage of the McGeorge @Home program, customers must first visit www.mcgeorgetoyota.com to search for their desired vehicle. Once a vehicle is selected, customers click “schedule a test drive.” After submitting some brief information, a McGeorge Toyota representative will help schedule an appointment.

At the agreed time, a McGeorge sales representative will deliver the vehicle to the customer’s home or workplace, hand over the keys, and buckle up for a test drive. If the customer decides to buy, the McGeorge specialist can appraise a potential trade-in and complete the paperwork process onsite. Should the vehicle not live up to the buyer’s expectations, the representative will work to help find and deliver something more suitable. At no point does the customer ever need to leave their home or office.

“We want to help make the entire car-buying experience something customers look forward to,” Farlow said. “After all, driving off in a brand-new car is an exciting feeling. We want customers to feel that way all throughout the buying process, not just after they’ve driven off the lot.”

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ORLANDO, Fla. — Organizers of the annual Industry Summit announced that Automotive Compliance Education (ACE) has agreed to once again offer onsite compliance certification to registered attendees for no additional charge. The event will be held Oct. 8–10, 2018, at the Caribe Royale Orlando in Orlando, Fla., with ACE certification scheduled for the morning of Tuesday, Oct. 9.

“ACE has become an integral part of our events, and we are pleased that our audience has so eagerly embraced this important training opportunity,” said David Gesualdo, show chair and publisher of F&I and Showroom and Auto Dealer Today. “It’s clear there is an insatiable appetite for compliance education at every level of our industry.”

ACE certification is open to auto dealers and dealership personnel as well as agents, auto finance executives, and F&I product providers and administrators. ACE’s executive director, Gil Van Over, said a new certification, “Product Specialist,” was designed in part to inform conversations among dealers and agents concerning the structure and sale of F&I products.

“This offering is geared toward the people who provide product, financing, or consulting services to the dealer community. Dealers often look to us for compliance assistance or oversight. Understanding what the products do that dealers sell to customers is just as important on the features and benefits to sell the products,” Van Over said.

To earn ACE certification, Industry Summit attendees must be present for a comprehensive review session that will begin promptly at 9 a.m. on Tuesday, Oct. 9, and earn a grade of 80% or better on the exam that follows. Those who succeed will get a framed diploma and opportunities to renew their certification on an annual basis.

More information about Industry Summit 2018 is available at the event’s website. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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Headquartered in Napa, Calif., AUL is one of the nation’s leading auto warranty providers and specializes in vehicle service contracts for used cars. Directors say the firm has administered more than 2 million vehicle service contracts across the country.

“While earning industry awards is always gratifying, it is competitions such as the Dealers' Choice Awards, where winners ultimately are selected by your customers, that we really take to heart,” said Jimmy Atkinson, president and CEO of AUL. “But this award is not just for AUL. We share this award with our amazing network of agents and dealers, without whom this award would not be possible. To them, we say congratulations and thank you for your dedication, hard work, and partnership.”

This year’s competition included 34 categories and gave voters the opportunity to recognize any company based upon on the quality of their product or service, overall customer service, value for money spent, and whether their customers recommend the company to another dealer.

“We work extremely hard to ensure we offer the best products and provide industry leading customer service and support. And to earn a Platinum Award this year confirms that together with our partners, we are on the right track,” Atkinson added.

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OJAI, Calif. — The Paint Spy Accident Detector was designed to offer automotive professionals a high-quality, precision-built tool that quickly reveals hidden body damage, repaint, or rust repair. Paint Spy’s neodymium magnetic technology senses the thickness of car paint and tells the user within minutes whether they should buy the car or walk away. Its compact size allows it to be carried in a pocket or purse.

The device was invented by car-buying specialist Greg Macke, who saw the need for an inexpensive tool that anyone could use to inspect a car for hidden body damage.

“We developed the Paint Spy for car buyers, never anticipating the excitement it would generate among auto dealerships,” Macke said. “It’s clear that dealers, used-car managers, and sales consultants are looking for new tools to streamline the trade-in process, and we want all of them to own a Paint Spy.”

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ORLANDO, Fla. — This year’s Industry Summit will include the first-ever Technology Shootout, a new feature designed to increase engagement and interaction among attendees and give technology providers an opportunity to showcase the latest advancement in digital sales and F&I.

Industry Summit will be held Oct. 8–10, 2018, at the Caribe Royale Orlando in Orlando, Fla. The Technology Shootout, which will include a series of 10 presentations of 10 minutes each, followed by an audience vote facilitated by the Industry Summit mobile app, will begin at 2 p.m. on Wednesday, Oct. 9.

Any company serving the dealer segment — including tech firms, F&I product providers, and banks and finance companies — is welcome to submit a brief (500-word) description for consideration by Auto Dealer Today and F&I and Showroom’s team of editors and publishers.

Show chair and publisher David Gesualdo said submissions will be judged on value to attendees and impact on the industry.

“We have fielded a number of pitches and inquiries already, and it’s clear there is heightened interest among attendees as well as service providers to advance and optimize showroom and F&I processes,” Gesualdo said.

More information about Industry Summit 2018 is available at the event’s website. To submit an idea for Technology Shootout or discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email no later than Thursday, July 26. 

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ORLANDO, Fla. — Industry Summit will once again play host to a ceremony honoring the winners of the 2018 Dealers’ Choice Awards, presented by Auto Dealer Today. This year’s event will be held Oct. 8–10 at the Caribe Royale Orlando in Orlando, Fla., and the ceremony will follow F&I and Showroom Pacesetter and Dealer of the Year awards, which begins at 5:15 p.m. on Wednesday, Oct. 10.

“The DCAs have become a highlight of the Industry Summit schedule, and with good reason: It’s the culmination of years — sometimes decades — of hard work and dedication to quality of product and customer service,” said David Gesualdo, show chair and publisher of Auto Dealer Today and F&I and Showroom.

The Dealers’ Choice Awards are based on a survey open only to dealers and dealership personnel throughout the month of May. Voters are asked to write in the name of their vendor, supplier, or finance source in at least five of 34 categories and rate them in terms of product quality and value, customer service, and whether they would recommend each company to another dealer.

More information about Industry Summit 2018 is available at the event’s website. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

If your company won a 2018 Dealers’ Choice Award and has not been officially notified, contact Associate Publisher Tariq Kamal via email.

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ChannelNet’s highly scalable, patented SiteBuilder software platform now offers an advanced integrated portal that enables companies to operate more efficiently and cost effectively. Extensive customization options enable multiple business divisions to communicate seamlessly internally as well as externally with vendors, customers, and other third parties, while maintaining brand identity and security. The open architecture platform integrates easily with a company’s existing applications, systems and proprietary technology, all according to Paula Tompkins, the company’s CEO.

“Most B2B portals miss the mark when it comes to optimizing a business user’s experience,” Tompkins said. “Our new B2B platform addresses the needs of today’s business professionals who demand instantaneous information organized around their usage patterns that includes fully integrated functionality. A typical business-to-business relationship has multiple stakeholders all with very different needs. ChannelNet’s technology enables them to transact and manage their relationship within a dynamic, multichannel marketplace.”

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TORRANCE, Calif. — F&I and Showroom is now accepting nominations for its 2018 F&I Dealer of the Year and F&I Pacesetters contest, which is being sponsored by American Financial & Automotive Services Inc. for the second year in a row. The nomination period ends Aug. 15, 2018.

Now in its 17th year, the F&I Dealer of the Year and F&I Pacesetters program recognizes operations with highly profitable F&I departments that demonstrate a commitment to regulatory compliance and customer satisfaction. Dealership employees, general agents, vendors, and F&I product providers are encouraged to nominate their stores and dealer clients for the award.

“This is my favorite time of year, when we get to honor the top F&I operations in the nation,” said Gregory Arroyo, editorial director of F&I and Showroom and Auto Dealer Today magazines. “And I’d like to thank Arden Hetland and the team at American Financial & Automotive Services for giving us the opportunity to do so by once again sponsoring our annual awards program.”

Hetland, president of American Financial & Automotive Services, added: “We are proud to sponsor the F&I Pacesetter and F&I Dealer of the Year contest. For over 35 years, we have prided ourselves in giving back to the industry.  Sponsoring these awards for the second year in a row is our way of saying thank you.”

The magazine will first select six finalists, or F&I Pacesetters of the Year. They will be featured in the magazine’s conference issue and recognized during a special awards ceremony at Industry Summit 2018, which is scheduled for Oct. 8–10 at the Caribe Royale Orlando in Orlando, Fla.

At the conclusion of the ceremony, one finalist will be named the 2018 F&I Dealer of the Year. That operation will also appear on the cover of F&I and Showroom’s December 2018 issue, which will feature an extended profile on the winning operation.

To nominate a dealership or dealer group, fill out the contest’s nomination form as completely as possible. List any and all awards or certifications earned by the dealership and its F&I team, as well as describe in detail the process followed by the operation’s F&I staffers. Be sure to note whether the dealership or group employs any special compliance process, such as the National Automobile Dealers Association’s Fair Credit Compliance Policy & Program, or has updated its sales and F&I processes to address new buying habits or to improve the customer experience.

Consumer ratings on DealerRater, Yelp, Google, and Facebook are also considered during the judging process, as well as an operation’s standing with the Better Business Bureau.

“Great product penetration rates and per-copy averages will get you noticed, but we look at the complete picture when selecting the six finalists and our eventual F&I Dealer of the Year,” Arroyo said. “Again, we’re looking for highly profitable F&I departments that demonstrate a commitment to regulatory compliance, ethics, and a customer-centric F&I Process. If that describes your store or your client, nominate them today.”

For more information or to nominate a dealership or dealer group, click here.

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CYPRESS, Calif. — Mitsubishi Motors North America Inc. (MMNA) announced a new dealer visual identity program that will take effect later this year. As part of the initiative, Mitsubishi Motors Corp. (MMC) will introduce an updated exterior and interior design in approximately 5,000 dealerships worldwide.

The program is largely based on the new brand message, "Drive your Ambition,” and is intended to provide a better customer experience in a high-quality retail environment. The design features striking black, white and gray color schemes with dynamic red lines as an accent.

"This is the first dealer visual identity update in 16 years and we are confident it will bring a new energy and a uniform look to our dealerships across the country," said Marv Baisden, senior director of dealer relations for MMNA. "Dealers are very excited about the upgrade and we look forward to seeing the first dealerships showcase the design this fall."

Lewisville Mitsubishi in Lewisville, Texas, will be one of the first dealerships to incorporate the new visual identity. The retail operation is currently building a 35,000-square-foot dealership on five acres outside of Dallas. The facility's target completion date is October 2018. MMNA plans to replicate this new design in 25 dealerships by the spring of 2019, with the remaining stores to follow in the coming years.

Mitsubishi has partnered with its dealership sign vendor, Architectural Graphics Inc., to execute the visual identity program.

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HARTFORD, Conn. — New Country BMW of Hartford, Conn., has unveiled the “ultimate showroom” after completion of a $6.5 million renovation. New Country remained open for business during the entire construction period that began in January 2017, as documented in an Auto Dealer Today profile of GM Job Pimentel.

“Since New Country opened 22 years ago, BMW has added an impressive number of new models that we need additional space to properly display,” said Tim Parker, vice president for New Country Motor Cars of Hartford. “Our customer base has increased accordingly, and adding three lanes to our service area will make it much more convenient.”

And while customers are waiting for their car to be serviced, they will be able to relax in the sleek and stylish waiting area, or in the new Isetta Coffee Bar. The Isetta was the unconventional, egg-shaped BMW design that is said to be the very best micro-car of its time since it debuted in 1953. Visitors can also peruse the retail display of available BMW lifestyle accessories and clothing.

“As a designated 2014 Center for Excellence by BMW of North America, we hold ourselves to the highest of standards when it comes to providing the best customer service in Connecticut,” said Parker, “This renovation and expansion will ensure an impeccable experience for everyone who stops by.”

An official grand opening celebration is planned for the fall.

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AUBURN HILLS, Mich. — Fiat Chrysler Automobiles has introduced a new program aimed at identifying, developing, and placing dealer candidates as it works to strengthen and enhance its U.S. dealership network.

The Dealer Market Investment Program will cultivate and provide financial support to proven, high-potential individuals who want to operate a Chrysler-Dodge-Jeep-Ram or Alfa Romeo-Maserati dealership but have limited funds. The program seeks to match potential dealers with specific markets where they can succeed, said Reid Bigland, the factory’s head of U.S. sales.

“This program places the support of FCA behind high-potential dealer candidates and tells them we have their backs as they enter the retail vehicle sales business,” Bigland said.

Candidates apply through a process that requires demonstrated leadership skills, financial acumen and customer satisfaction, as well as a proven track record of exceptional sales performance. Candidates must also participate in FCA’s dealer assessment and development program and invest substantial amounts of their own start-up capital.

FCA — through its relationships with Chrysler Capital and Ally Financial — will provide 85% of the funds needed to cover a dealership’s working capital through low-interest loans while the potential dealer covers the remaining 15%.

For the real estate investment, Chrysler Capital and Ally Financial will provide 80% of the funding, FCA will provide 15% and the potential dealer will cover the remaining 5%.

“High-potential candidates, whose mere constraint may be a lack of capital, are given support for their startup costs while using their funding to jump-start operations at the dealership,” said Al Gardner, Head of Network Development. “We expect a variety of individuals to use this approach to quicken their impact in the market where they are establishing their dealership.”

FCA recently piloted the program at Northland Chrysler-Jeep-Dodge-Ram in metro Detroit.

“This is an area of the market that has tremendous growth potential,” said Bashar Cholagh, Senior Manager of Market Representation, Dealer Network Diversity and Technologies. “We worked closely with Eddie Hall III and his partner Ken Thomas to provide them this opportunity through the program. In less than one month, they had the keys to the dealership doors and are now selling our vehicles.”

Hall said the Dealer Market Investment Program gave him and Thomas the wherewithal to start making improvements immediately. 

“We have already picked out new furniture and have a painter set to come out within the next 30 days,” Hall said. “We also now have some reserve capital, so we can do a full-scale remodel.”

With the deal complete, Northland is now the only African-American owned Chrysler-Jeep-Dodge-Ram dealership in metro Detroit.

“My dad, Eddie Jr., was born and raised in Detroit, I was raised in metro Detroit, and Ken was born and raised in Detroit, so owning this store at this time when Detroit is making a comeback is very important to us,” Hall said. “This is really a full-circle moment for us.”

Thomas, who first began his automotive industry career working as a technician at Northland more than 33 years ago, said he hopes others will also take advantage of this opportunity.

“This program is exactly what I had been looking for,” Thomas said. “I believe that this program will set the standard for what a dealer development program should look like in the future.”

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This new team of five highly skilled and experienced account managers will be led by Area Vice President Cynthia Bodden and will service GWC Warranty’s largest dealership partners. GWC Warranty’s highest-volume dealers will receive an even greater level of individualized service focused on delivering value that helps these dealers sell more cars and be more profitable.

“At GWC Warranty, we have spent the past 20-plus years providing dealers a best-in-class service experience,” said Brian Stach, Chief Revenue Officer at GWC Warranty. “Over that time, we have seen how our largest dealer partners require a unique and personalized level of service. In an effort to provide such without sacrificing the best-in-class experience we provide all GWC dealer partners, we proudly introduce our highly specialized Major Account Management Team.”

Robert Chandler joins GWC as major account manager for the Northeast United States. A University of Massachusetts graduate, Chandler has nearly 15 years of experience in the automotive and finance industries with companies such as Dealertrack, Hitachi Capital of America, and Allstate Dealer Services.

David Hartmann, the major account manager for the Central United States, has 20 years of sales experience, including over a decade in the automotive and F&I industries with large franchise dealerships.

Joseph Kontz has been hired as the major account manager for the Mid-Atlantic United States. Kontz has spent the past nine years in the automotive industry as a franchise dealer sales representative and an F&I executive with Zurich Insurance.

Alicia Murray has joined GWC as the Major Account Manager for the Southeastern region of the United States. Murray brings more than two decades of sales and management experience to GWC, including more than 15 years in the automotive industry as an F&I manager at a franchise dealership and a dealership training specialist with Ally Financial Dealer Products & Services.

Chad Staples is now the Major Account Manager for the Western part of the country, having spent nearly a decade in sales and account management, including several in the insurance and automotive industries. Staples is a 2009 graduate of Arizona State University’s W.P. Carey School of Business.

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On Friday, English’s attorney, Deepak Gupta, posted a statement on Twitter that English is stepping down from her role as deputy director and that she plans to file court papers today to bring her litigation over the leadership of the CFPB to a close following President Trump’s nomination of Kathy Kraniger as permanent director of the agency.

“I will be stepping down from my position at the Consumer Financial Protection Bureau early next week, having made this decision in light of the recent nomination of a new director,” the statement, attributed to English, reads. “I want to thank all of the CFPB’s dedicated career civil servants for your important work on behalf of consumers. It has been an honor to work alongside you.”

On Monday, Mulvaney announced that Brian Johnson, who currently serves as the bureau's principal policy director, will assume the bureau's second leadership post as acting director. Prior to his appointment to the CFPB, Johnson served as senior counsel to Rep. Jeb Hensarling (R-Texas) at the House Financial Services Committee.

Mulvaney described Johnson as an "indispensable advisor," noting that he was the first person he hired at the bureau. "Brian knows the bureau like the back of his hand. He approaches his role as a public servant with humility and unsurpassed dedication," Mulvaney said in a statement released late Monday. "His steady character, work ethic, and commitment to free markets and consumer choice make him exactly what our country needs at this agency."

When Cordray resigned on Nov. 24, 2017, he elevated English, his former chief of staff, to deputy director — a move that established her as acting director until the Senate confirms Trump’s permanent appointee. 

Hours after Cordray’s announcement, Trump appointed Mulvaney as acting director, citing his authority under the Federal Vacancies Act (FVRA) of 1988. English filed suit two days later (Nov. 26) to block the appointment, arguing that she was the rightful acting director due to a successor statute in the CFPB-creating Dodd-Frank Act.

English’s attorneys also questioned whether allowing Mulvaney, who once characterized the bureau as a “sick joke,” to continue serving as a White House official would compromise the bureau’s independence. The argument was backed by the former lawmakers who championed the CFPB-creating Dodd-Frank Act.

“That was our intent, to strip this away from the politics of the moment, to give consumers the sense of confidence that there was one place here — when it came to their financial services — [where] there would be people watching out for them, regardless of political party or partisanship,” said former Sen. Chris Dodd during media call this past November.

On Nov. 29, three days after filing suit, English’s request for a restraining order to block Mulvaney’s appointment was denied by U.S. District Judge Timothy J. Kelly. English’s attorneys then filed an amended complaint on Dec. 6, 2017, requesting a preliminary injection to remove Mulvaney as acting head of the agency. That request was also denied by Kelly, a ruling set the stage for English’s appeal.

“The Court finds that English is not likely to succeed on the merits of her claims, nor is she likely to suffer irreparable harm absent the injunctive relief sought,” Judge Kelly wrote in his 46-page decision. “Moreover, the balance of the equities and the public interest also weigh against granting the relief. Therefore, English has not met the exacting standard to obtain a preliminary injunction.”

Kelly’s ruling set the stage for English’s appeal, on which a three-judge federal appeal panel in Washington, D.C., has yet to issue a ruling.

On June 19, Trump nominated Kraninger, a White House budget official who works under Mulvaney and served as an aide to several Republican senators, to serve as the next director of the bureau. The announcement came a week before Mulvaney’s interim term was set to end.

"I have never worked with a more qualified individual than Kathy. Her commitment to the law, to protecting consumers and to defending what works in our vibrant financial services sector, all while respecting hard-working taxpayers who pay their bills and play by the rules ensures that the bureau will be in good hands throughout her term,” Mulvaney said in a statement issued the same day Kraninger’s nomination was announced. “Vigorous independence, sharp-as-a-tack intelligence, and simple, old-fashioned, Midwestern humility make her the ultimate public servant. I know that my efforts to rein in the bureaucracy at the Bureau of Consumer Financial Protection to make it more accountable, effective and efficient will be continued under her able stewardship."

Critics like Democratic Sen. Elizabeth Warren, however, have questioned Kraninger’s qualifications for the job because of her lack of experience in financial regulation or consumer protection.

.@realDonaldTrump’s nominee to run the @CFPB, Kathy Kraninger, has no track record of helping consumers, Warren, who considered the architect of the CFPB, tweeted the day Kraninger’s appointment was announced. “That’s bad news for seniors, servicemembers, students — and anyone else who doesn’t want to get cheated. And it gets even worse.”

As for English’s Friday announcement, Warren said the following in a statement: “From the earliest days of the CFPB, Leandra has directed her passion and formidable skills to building a strong, professional agency that stands up for consumers. I’m grateful for her service and wish her the best in her future endeavors.

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ST. PETERSBURG, Fla. — LotMonkey today announced it is expanding its in-dealership merchandising solution into four new markets, including Philadelphia, Louisville, Ky., Long Island, N.Y., and northern New Jersey.

Dealers in these four new markets can now use LotMonkey’s system to create on-the-lot marketing materials, including license plate inserts, window stickers, windshield graphics and more. LotMonkey already services more than 200 dealers in more than a dozen markets. The new markets are just four of several new markets the company is expanding into over the next several months.

“We are extremely excited about the growth of LotMonkey into new markets. Dealers quickly see how our platform makes marketing and merchandising a breeze,” said LotMonkey CEO John Wingle. “The problem is dealers have limited options or direction as to how to go about effectively merchandising their lots in a manner that actually improves customer experience and bridges the gap between online and on the lot. The solution is our platform, which enables them to strategically and professionally merchandise in a way that actually improves customer experience and bridges that gap.”

LotMonkey’s web-based merchandising platform allows dealers to instantly create and customize a virtually infinite array of point-of-sale visuals designed to transform dealership lots, showrooms and service drives into strategic retail environments that better engage, inform and influence customers.

“We created LotMonkey to empower dealers and hand them the keys to their in-store branding and marketing,” Wingle said. “With our LotMonkey platform, dealers in these four new market areas can now have complete creative control over the customization of their brand, their merchandising and their point of sale needs to ultimately create a customer experience that will encourage shoppers to return for service needs or future purchases.”

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“We have been very fortunate to have a parent company like Credito Real. With their unwavering support of our platform and the financial resources to back it up, we are now in a good position for growth and we will be leveraging the Credito Real brand to help us achieve new heights,” said CRUSAfin CEO Scot Seagrave. “Competition is fierce, but I am confident we can provide unique opportunities for our growing dealer base and continue to work closely with our customers by helping them improve their credit through our ‘Better Credit Is a Better Life’ initiative.”

Seagrave noted that CRUSAfin offers products for franchised and independent dealer partners. “Working to help dealers find solutions for their traditional subprime customers as well as their customers currently in an open bankruptcy has been our focus over the last several years and we will continue to grow these market segments,” said Seagrave. "Through a network of dealers across the U.S., consumers can find the car they want and the financing they need. “In the process, they’ll step onto a path designed to improve their financial future by improving their credit."

Additionally, CRUSAfin recently implemented a program focused on helping unbanked customers. “This effort falls right in line with our parent company’s effort to achieve their mission of becoming the largest non-bank financial institution for Latin Americans in the world. We are excited to help them reach this goal,” said Seagrave.

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ALBANY, N.Y. — State Attorney General Barbara D. Underwood today announced a settlement requiring Bay Ridge Honda of Brooklyn (N.Y.) to reform its business practices and pay more than $423,000 in restitution and penalties after the office received dozens of complaints from New Yorkers about unwanted charges and fraudulent sales tactics that targeted non-English speakers.

Many of the consumers who complained were Mandarin and Cantonese speakers who negotiated their sales or lease contracts in Chinese, but were only provided English documents that they later discovered contained different terms and unwanted and costly aftermarket items in their bills, according to the AG’s announcement.

Under the settlement, Underwood obtained restitution for 47 New Yorkers “known” to have been harmed by the dealership’s practices, as well as requirements that the dealership stop engaging in the alleged deceptive practices, and modify employee training and the processing of consumer complaints. Bay Ridge Honda also agreed to ensure future sales and lending documents are translated into the language the dealership conducts business in with consumers, prior to signing any documents in English.

“We have zero tolerance for unscrupulous businesses that prey on immigrant communities and non-English speakers,” said Attorney General Underwood. “This office will continue to protect the rights of all New Yorkers, of all backgrounds.”

Attorney General Underwood alleged that Bay Ridge Honda engaged in a variety of deceptive practices, misleading consumers about the true cost of their purchases — including unlawfully selling unwanted aftermarket items, such as supplemental service contracts, GAP policies, or special protections for tires, fabric, glass, or paint that added thousands of dollars to the auto sale or lease contracts.

The investigation also found that the dealership falsely promised to refinance consumers’ loans. For example, when consumers complained that the dealership had overcharged them or included unwanted extra aftermarket items in their contracts, dealership staff would falsely promise to refinance to a lower rate after a few months of payments. Ultimately, the dealership did not honor these refinancing promises, Underwood said.

Under the Consent Order, Bay Ridge Honda will refund $269,525 to the 47 known parties. In addition to restitution, the dealership will also pay $153,648 in penalties, fees, and costs to the state.

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