WASHINGTON, D.C. — The Consumer Financial Protection Bureau’s new rule banning mandatory arbitration clauses in finance contracts was published in the Federal Register on Wednesday, July 19, thereby setting the rule’s effective date. House and Senate Republicans responded the next day by filing joint resolutions of disapproval under the Congressional Rule Act (CRA).

The new rule is due to go into effect September 18. It applies to contracts signed 180 days after the effective date, or March 19. The Senate challenge was filed on July 20 by U.S. Senate Banking Committee Chairman Mike Crapo (R-Idaho) and 23 other Republican Senators. The U.S. House of Financial Services Committee filed its resolution, Res. 111, the same day, with the full House expected to vote on the resolution today after the House Rules Committee approved it by a 9-4 vote.

“The CFPB’s anti-arbitration rule hurts consumers, and it’s another example of the problems caused by this rogue and unaccountable agency,” said Rep. Keith Rothfus (R-Pa.), the resolution’s sponsor. “We know that consumers get better results through arbitration than through class-action lawsuits. Despite the fact that the agency acknowledged this fact in one of its own reports, the bureaucrats at the CFPB have decided they know better.”

Under the CRA, Congress can block rules issued by federal agencies by enacting a joint resolution of disapproval within 60 days after receiving the rule. If both houses pass the joint disapproval resolution and it receives the president’s signature, the resolution becomes law and the rule becomes “of no force and effect.”

Rothfus’ resolution, which was cosponsored by all 34 Republican members of the Financial Services Committee, is likely to gain full House approval. The Senate resolution, however, isn’t so likely, as Republicans hold a slim 52-48 advantage in the Senate. Vice President Mike Pence holds the tiebreaking vote.

“As a matter of principle, policy and process, this anti-consumer rule should be thoroughly rejected by Congress, and I applaud Congressman Rothfus for leading the effort in the House to do just that,” said Rep. Jeb. Hensarling, who has crusaded against the CFPB as chairman of the House Financial Services Committee. “In the last election, the American people voted to drain the D.C. swamp of capricious, unaccountable bureaucrats who wish to control their lives. This CRA is a critical step towards fulfilling our promise to the American people and truly protecting consumers.”

Congressional Republicans aren’t the only ones who have express concerns about the CFPB’s new rule.

In a July 10 letter addressed to CFPB Director Richard Cordray, Acting Comptroller of the Currency Keith Noreika asked the CFPB head to delay publishing the final arbitration rule in the Federal Register until his staff had “a full and fair opportunity to analyze the CFPB data so that I am able to fulfill my safety and soundness obligations.”

“As a prudential regulator for the federal banking system, the OCC should be granted the opportunity to conduct an independent review of the CFPB data to determine the safety and soundness implications of the final rule. I will make every effort to expedite that review,” Noreika wrote.

Cordray responded two days later. “I was surprised to receive your letter,” he wrote, noting that the issuance of the rule marked the conclusion of a multiyear process that included the bureau’s completion of its arbitration study in March 2015. “The rulemaking process itself spanned more than two years. Throughout the process, the bureau consulted repeatedly with representatives of the staff of the Office of the Comptroller of the Currency, as well as the other prudential regulators, precisely to discuss ‘prudential, market, or systemic objectives by such agencies’ in accordance with Section 1022 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

“At no time during this process did anyone from the OCC express any suggestion that the rule that was under development could threaten the safety and soundness of the banking system,” he added, noting that OCC staff issued an email on June 26 confirming the agency has no comments after reviewing a draft of the rule. “Nor did you express any such concerns to me when we have met or spoken.”

Under the CFPB’s arbitration rule, companies can still include arbitration clauses in finance contracts. However, creditors subject to the rule can’t use arbitration to stop consumers from being part of a group action. The rule also includes specific language companies will need to use if they include an arbitration clause in a new contract.

The rule also requires companies to submit to the CFPB certain records, including initial claims and counterclaims, answers to these claims and counterclaims, and awards issued in arbitration. The bureau will also collect correspondence companies receive from arbitration administrators regarding a company’s nonpayment of arbitration fees and its failure to follow the arbitrator’s fairness standards.

Bureau officials said the collected materials, which must be submitted with appropriate redactions of personal information, will allow it to better understand and monitor arbitration. They will also be published on the CFPB’s website beginning in July 2019.

The new rule applies to the major markets for consumer financial products and services overseen by the bureau, including those that lend money, store money, and move or exchange money. Congress already prohibits arbitration agreements in the residential mortgage market and has done the same in many forms of credit extended to servicemembers and their families.

Exempted from the new rule are employers who offer consumer financial products or services for employees as an employment benefits; entities regulated by the Securities and Exchange Commission or the Commodity Futures Trading Commission, which have their own arbitration rules; broker-dealers and investment advisers overseen by state regulators; and state and tribal governments that have sovereign immunity from private lawsuits.

“Originally, arbitration was primarily used for disagreements between two businesses. But over the last quarter-century or so, companies started adding arbitration clauses to their consumer contracts, specifically to block group lawsuits and avoid legal accountability,” Cordray said on July 10, the day the bureau announced its arbitration rule. “… Today’s rule prohibits banks and other consumer financial companies from including mandatory arbitration clauses that block group lawsuits in any new contracts after the compliance date.

“… By restoring the ability of consumers to file or join group lawsuits, the rule gives companies more incentive to comply with the law,” he added. “And the deterrent effect of such cases can more broadly influence the business practices of other companies as well.”

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WILKES-BARRE, Pa. — F&I product provider GWC Warranty has partnered with the Commission on Economic Opportunity (CEO) to sponsor a Food 4 Kids van.

CEO’s Food 4 Kids Summer Program makes nutritious food more available to at-risk children by delivering healthy meals and snacks to parks, playgrounds, libraries and other community sites throughout the summer months when at-risk children are not receiving meals at school. The van sponsored by GWC Warranty makes deliveries five days a week throughout Pennsylvania’s Luzerne and Lackawanna counties.

The Food 4 Kids summer program served more than 64,000 meals in 2016 to children at 82 community sites throughout Northeastern Pennsylvania. Because schools often provide the only opportunities for income-limited children to receive nutritious food, Food 4 Kids helps ensure access to quality meals and snacks during the summer months.

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HANOVER, Md. — CounselorLibrary.com LLC, the publisher of automobile financing and leasing legal compliance services, today announced it has updated its popular “CARLAW F&I Legal Desk Book.”  Winner of the Axiom Business Book Award, the book gives readers 363 things to know about auto dealer finance laws and regulations. 

“CARLAW F&I Legal Desk Book (7th edition) – The Answer Book for Finance and Insurance Professionals,” presents a law-by-law, regulation-by-regulation guide through the legal maze that dealers face every day.  Authored by Thomas B. Hudson, Michael A. Benoit, Ralph J. Rohner and the attorneys at Hudson Cook LLP, this new edition reflects the latest updates to the federal laws and regulations affecting F&I practices. 

Formatted in a straightforward “Q and A” design, “CARLAW® F&I Legal Desk Book (7th edition) – The Answer Book for Finance and Insurance Professionals” addresses many of the everyday compliance issues dealers face and includes links to the actual laws and regulations discussed in each chapter.

The 390-page book is designated as the official text book for the Association of Finance and Insurance Professionals’ Certified F&I Professional Program and is available for $49.95 (plus shipping and handling) at http://www.counselorlibrary.com/public/products-book-fi-legal-deskbook.cfm. 

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PLEASANTON, Calif. — Business analytics solutions provider Dashboard Dealership Enterprises today announced the availability of Executive Eye 3.0, the latest version of the firm’s business analytics suite. It features a completely redesigned graphic user interface (GUI) and advanced predictive budgeting and forecasting tools, according to officials.

Built on a highly intuitive, modern web platform utilizing the latest in software development technology, Executive Eye 3.0 offers speed and security and allows new features and updates to be added quickly. The first thing users will notice is the platform’s new GUI, which features new color themes, more white space, better organization, and a variety of graphic display options that allow dealers to reach meaningful conclusions quickly, according to company officials.

"Reporting has always been clunky, time consuming; often, it’s difficult for dealers to understand how numbers translate into actionable data," said Josh Blick, CEO of Dashboard Dealership Enterprises. "Executive Eye 3.0 is a groundbreaking tool that completely changes the paradigm of how a business analytic reporting tool can be used. Instead of spending time compiling reports, managers instantly have actionable data at their fingertips."

The reporting tool’s user interface was designed with input from Dashboard's Dealer clients. In beta testing, the Executive Eye 3.0 demonstrated a 30% increase in dealership usage compared to average usage of 2.0, according to officials. Additionally, a more efficient design requires 40% fewer clicks to drill down on data.

Executive Eye 3.0 is mobile-friendly across all platforms, including all commonly used operating systems, internet browsers, computers, phones and tablets. No mobile application is needed to view the software and reports on a mobile device. Dealership employees that use tablets can use touchscreens to access menus and perform other functions.

Additionally, Executive Eye 3.0’s enhanced predictive budgeting and forecasting tools allow dealers to view metrics and, assuming no unforeseen changes, know with a high degree of accuracy how the month will end. According to Blick, Dashboard Dealership Enterprise is unique because it approaches forecasting from both a revenue and expense standpoint at the enterprise and dealership level.

"Most reporting applications are very revenue focused, because historically that's how dealers have generated more profit," said Blick. "However, profitability is also achieved by controlling expenses and identifying areas where there is wasteful spending."

Executive Eye 3.0 makes it easy for auto dealers to assess the financial health of one store or an entire group. Dealers can view key performance indicators (KPIs) from all their stores in a side-by-side view, allowing for easy performance comparison and identification of stores that need attention. Additionally, a "Consolidated Doc" report allows dealers to instantly consolidate Docs from individual stores into a single Doc report for an entire group of stores.

Additionally, an advanced messaging tool built into Executive Eye 3.0 enables users to communicate directly with Dashboard's customer support as well as with other users. This was designed so that users can assign tasks, write notes to each other and improve workflow. Reports, alerts and comments can be shared without the need to export data or compose emails outside of the messaging tool.

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DALLAS — Digital Air Strike co-founder and CEO Alexi Venneri has agreed to speak at the upcoming P&A Leadership Summit, organizers announced. The event will be held Sept. 12–13, 2017, at the Gaylord Texan Resort & Convention Center in Dallas, co-located with the annual Industry Summit.

“The story of the value and utility of F&I products will be told online. There is no disputing that,” said David Gesualdo, show chair and publisher of P&A magazine. “We are counting on Alexi to lend her insights into successfully building and maintaining a brand on car buyers’ platforms of choice.”

An accredited trainer, Venneri has established herself as a thought leader in the automotive digital marketing space. Digital Air Strike counts seven of the top 10 OEMs and 27 of the top 30 dealer groups among its thousands of clients in North America. In May, the company earned recognition from dealers and dealership personnel in the 2017 Dealers’ Choice Awards, earning Gold awards in the Digital Marketing and Reputation Management categories.

“Managing social media networks, online reviews and consumer engagement needs to be a collaborative process that leverages strategic process and technology,” said Venneri. “I’m honored to be able to share the top social media best practices that F&I professionals, dealerships and program administrators can leverage to increase consumer satisfaction and sales within the F&I community.”

Registration for Industry Summit 2017 is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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NORTH HILLS, Calif. — Galpin Motors Chairman and CEO Bert Boeckmann was presented with Ford Motor Company’s first “Dealer Hall of Fame” award last week. The honor recognizes his lifetime of achievement, outstanding performance and inspirational leadership.

Galpin Ford also received more than 12 additional awards, including recognition for being the No. 1 volume Ford dealer for a record 27 years in a row.

“The objective criteria is really, which of the dealers in this top volume group are universally admired, respected and loved by folks at Ford Motor Co., Ford Credit, by their employees and especially by other Ford dealers?” asked Mark LaNeve,  vice president of marketing sales  and service for Ford’s U.S. operation during last Thursday’s presentation. “It was my great honor to induct Bert Boeckmann into the Inaugural Ford Hall of Fame.”

Boeckmann joined Galpin in 1953 as a salesman. By 1957, Boeckmann, who was 26 at the time, was general manager of the company. By 1968, he became president and majority stakeholder and the rest is history. Today, Boeckmann is widely recognized as the most honored and successful automobile dealer in America. According to Ford officials, he has achieved a record of success for a single franchise, single location dealer that is unparalleled in the automotive retail industry.

“My father is the most honest man I know, the hardest working person I know and sincerely cares about every customer and employee,” said Beau Boeckmann, president and COO of Galpin Motors. “Without his dedication to our customers and employees, Galpin would not be where it is today. I’m thankful to Ford for their support and recognition, and I couldn’t think of a better first-time recipient than my dad.”

Galpin, which celebrated its 70th anniversary last year, has always been a pioneer in the dealership industry. In the ‘60s, Galpin began leasing cars to individuals before dealerships were even leasing to companies. In 1966, Galpin opened America’s first in-dealership restaurant, The Horseless Carriage, which is still a success today. The dealership also coined the term “Galpinizing” for its world-renowned custom vehicles.

Today, Galpin operates 12 franchises in addition to its customization shop, Galpin Auto Sports.

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TagRail was designed to create a “shoulder-to-shoulder” partnership between sales departments and customers, promoting a transparent, seamless, complete and comfortable experience for all parties. It also provides built-in accountability that provides sales consultants and their managers near real-time feedback designed to create competitive incentives to excel.

The new CEM helps dealerships deliver personalized experiences that create customers for life, according to CEO Kiran Karunakaran.

“Today’s customers want to feel good about the sales consultant and dealership they are considering spending their money with, or they will go elsewhere if this is not their experience that they are accustomed to in other retail environments,” Karunakaran said. “TagRail helps the dealership foster trust and engagement and thereby converting more walk-in traffic into paying customers.”

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DALLAS — StoneEagle announced that registration is now open for Golf for Heroes, a charity tournament scheduled for Sunday, Sept. 10, in conjunction with the annual Industry Summit. The Cowboys Golf Club in Grapevine, Texas, near Dallas, will play host; the course is less than a mile from the Gaylord Texan Resort & Convention center, where Industry Summit will be held Sept. 11–14.

“StoneEagle is excited to host the first annual charity Golf for Heroes tournament benefiting Carry The Load,” said Jason Gillette, vice president of sales and marketing for StoneEagle. “We hope you will join us for a great day of golf and sincerely appreciate your support of Carry The Load, an outstanding organization, dedicated to providing active, meaningful ways to honor and celebrate the sacrifices made by our nation’s heroes.”

Registration will remain open until August 25 or until 72 golfers have registered. Golfers may register individually or as a foursome at the event’s registration page. Clubs are available for rent from The Cowboys Golf Club; players are advised to make rental arrangements ahead of time by calling (817) 481-7277.

The registration fee includes a catered lunch and dinner and prizes for the first-, second- and third-place teams. Players may enter into a raffle for a number of high-dollar prizes, and every player is eligible for one of four bonus prizes:

• Longest Drive (Scotty Cameron Newport Putter)
• Closest to the Pin (Bushnell Rangefinder)
• Hole-in-One (Trip to Super Bowl)
• Putting Contest (Yeti Cooler)

Individuals may also elect to sponsor the tournament. A $3,500 sponsorship includes tournament entry, lunch and dinner for four golfers as well as prominent hole signage and the inclusion of a giveaway item in every player’s gift bag. To become a sponsor or for more information, contact John Day at jday@stoneeagle.com or (855) 937-8729.

“Whether you are a golfer or a supporter of our nation’s servicemembers, police officers and firefighters, you could not ask for a better opportunity than Golf for Heroes,” said David Gesualdo, show chair of Industry Summit and publisher of Auto Dealer Today and F&I and Showroom. “We look forward to seeing you in Dallas, both on the links and on the show floor.”

Registration for Industry Summit 2017 is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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Record360 offers app-based condition reporting software that allows dealers to automate the asset management component within their rental and leasing departments by digitizing vehicle conditions reviews. Record360 eliminates the problem of customers claiming damage while their vehicles are in for repair, or claiming they did not cause damage to a loaner or rental vehicle, according to the firm.

“Our two companies share a common mission, which is to help digitize archaic, paper-based processes still prevalent in the automotive and vehicle rental industry,” said Shane Skinner, Record360 CEO.  “Processes wrapped around rental returns, and now vehicle recalls in particular, continue to be major pain point for dealers and other stakeholders.”

Last summer saw new legislation passed on vehicle safety recalls that established a $5,000 fine if a consumer is put into a rental or loaner vehicle with an outstanding recall. The legislation also requires that rental car agencies fix any and all open safety defects before renting out vehicles to customers.

Determining recall status during the initial inspection process saves time, reduces friction and prevents unnecessary upsets between dealers or car rental agencies and their customers. It also can help prevent customers being put into a rental or loaner vehicle that has an existing recall that should not be on the road.

“Countless damage disputes impact relationships, customer satisfaction, and cause negative reviews. Vehicle condition and claims management processes is dependent on paper or low-fidelity digital reporting and Record360 fills the gap with a modern solution,” said Chris Miller, president of Recall Masters. “Additionally, our integration with Record360 ensures that the user is informed of any open recall in real-time while the initial inspection is done. This helps build trusting relationships between automotive dealers or car rental agencies and their customers.”

For more, visit www.recallmasters.com or visit www.record360.com.

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DALLAS — StoneEagle is seeking sponsors for Golf for Heroes, a charity tournament scheduled for Sunday, Sept. 10, in conjunction with the annual Industry Summit.

The tournament will benefit Carry The Load, a charity dedicated to actively honoring members of the military, law enforcement, firefighters and first responders. It will be held at The Cowboys Golf Club in Grapevine, Texas, near Dallas, less than a mile from the Gaylord Texan Resort & Convention Center, where Industry Summit will take place Sept. 11–14.

“StoneEagle is excited to host the first annual charity Golf for Heroes tournament benefiting Carry The Load,” said Jason Gillette, vice president of sales and marketing for StoneEagle. “We truly appreciate the companies and individuals generously contributing to support Carry The Load, an outstanding organization, dedicated to providing active, meaningful ways to honor and celebrate the sacrifices made by our nation’s heroes.”

Companies and individuals are welcome to sponsor a hole on the course. Sponsorship of each hole costs $3,500 and includes:

• Tournament entry for a foursome
• Lunch and dinner for four
• Prominent hole signage
• Inclusion of a giveaway item in every player’s gift bag

For more information on a Golf for Heroes sponsorship, contact John Day at jday@stoneeagle.com or (855) 937-8729.

“Our hats are off to StoneEagle for organizing this tournament and supporting Carry The Load,” said David Gesualdo, show chair of Industry Summit and publisher of Auto Dealer Today and F&I and Showroom. “It’s a worthwhile endeavor and a truly unique — and highly valuable — sponsorship opportunity.”

Registration for Industry Summit 2017 is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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The new templates support dealers’ lead generation efforts with promotions and fixed operations specials pulled from dealer websites and plugged into their “actively managed” banner advertising in every template used by a dealer’s sales team, according to DealerEFX’s founder and CEO, Jim Lawrence.

“Over the last four-plus years, we had the chance to review the quality of ‘homegrown’ and ‘canned’ email response templates from dealer personnel, OEMs and CRM service providers in dozens of different CRM systems,” Lawrence said. “We found a widespread lack of high-quality email response content and that most email touchpoints in the customer communications lifecycle do not reinforce the OEMs’ or dealerships’ brand and value messages they have spent millions to build and sustain.”

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During the bank’s second-quarter earnings call on July 14, Wells Fargo executives reported auto originations of $4.5 billion. That’s down $2.5 billion from the first quarter and $4 billion from the year-ago quarter. The reason: tighter underwriting standards.

“As we’ve discussed previously, we’ve tightened credit underwriting standards in auto, which has our origination volume down 17% from the first quarter (45% from a year ago),” said CFO John Shrewsberry, noting that the average FICO for auto loans originated during the period rose from 696 in the year-ago period to 719. “As we focus on improving execution and efficiency through increased standardization and centralization, we expect auto loans to continue to decline in the second half of this year.”

Reflecting this tightening was an $82 million decline in consumer credit losses, with net charge-offs down $41 million from the previous quarter. The improvement in overall consumer credit allowed the bank to releases $100 million in reserves for credit losses, officials said.

Additionally, the bank’s total outstanding loan balance declined 4% from the first quarter and 6% from a year ago to $58 billion. Loans 30 days past due increased by $225 million from a year ago on weaker market conditions. 

As for the bank’s commercial portfolio, loans increased 7% from a year ago to $11.5 billion on higher dealer floorplan utilization.

In 2015, Wells Fargo reported record originations of $31 billion. A year later, the bank originated more loans than any other finance source, according to Experian Automotive. In the first quarter of this year, however, Wells Fargo Dealer Services fell to No. 4 on Experian’s market share list, with originations falling 29% on a year-over-year basis.

Several members of the executive team that led the transition from Wachovia Dealer Services to Wells Fargo Dealer Services in March 2010 have also left the company. Tom Wolfe, who headed up the business during its transition to Wells Fargo Dealer Services as president, was named vice president of the bank’s consumer credit solutions in 2012 before retiring in October 2014.

Wolfe’s successor as head of Wells Fargo Dealer Services, Dawn Martin Harp, retired this past April, and Bill Katafias, another Wachovia holdover who served as Wells Fargo Dealer Services’ national product retail credit executive, left the company this past February. In May, he joined Irvine, Calif.-based CRB Auto, a division of Mechanics Bank. 

Wells Fargo’s dealer services business unit is now led by 20-year company veteran Laura Schupbach, who was appointed to the post this past March. She officially assumed her new role in April. Shrewsberry mentioned Schupbach’s hiring during the bank’s recent earnings call, noting that consumer loan growth will continue to be impacted by the actions “we’re taking in our auto portfolio and expected runoff of legacy junior lien mortgage loans.”

Shrewsberry added that the bank is making “modest changes” to generate loan originations for its consumer loan segment, including offering interest-only jumbo mortgage loans to high-quality borrowers and testing credit card offerings through the company’s digital channels.

When asked during last Friday’s earnings call how far the bank’s tightening on auto loans will go, Wells Fargo President and CEO Timothy Sloan responded, in part, “My bet is it will probably stabilize sometime in the first half of next year. I think during that entire time, it’s reasonable to assume that’s the quality of the underlying customer … measured by FICO score will continue to improve.

“I don’t know if it will continue to improve at the levels we’ve seen, but it will continue to be very strong,” he added. “And then my guess is that’s where the business will stabilize sometime in the first half of next year.”

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COSTA MESA, Calif. — The Summer 2017 edition of J.D. Power’s semiannual rankings of automobile manufacturer websites finds that overall satisfaction averages 827 (on a 1,000-point scale) for smartphone users, a “significantly higher” score than the average score of 814 for desktop users.

The satisfaction gap between mobile and PC shoppers increased in three key metrics: information and content (822 for smartphones vs. 804 for desktops), appearance (850 vs. 832) and speed (817 vs. 808).

“It is noteworthy, however, that the ranking of manufacturers’ websites varies considerably between smartphone and desktop shoppers," J.D. Power analysts wrote. "This variation reflects the challenges manufacturers face as they work to deliver world-class shopping experiences across a variety of devices.”

Porsche led all OEMs with an average score of 856, followed by Fiat (852) and Land Rover (849). The lowest scores belong to Nissan (784), Volvo (789) and Honda (792).

For the complete list of J.D. Power’s latest OEM website rankings, click here.

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Automotive Assurance Group has represented Warranty Solutions, an AmTrust company, for more than 14 years. According to officials, the firm has achieved top-producing agent status as well as top agency in various categories over the years. As a well-financed F&I provider, Automotive Assurance Group is now able to offer its dealer clients the resources of AmTrust programs as well as access to the company’s select group of other top-level providers and their portfolio of products.

“We are pleased to welcome Automotive Assurance Group to the AmTrust Financial family of companies and add to the strength of our warranty business,” said Stuart Hollander, president of specialty risk for AmTrust Financial Services’ U.S. operations. “With the addition of Automotive Assurance Group, we have expanded our presence into a new area of the automotive finance and insurance (F&I) market.”

Nick D’Amico, the founder of Automotive Assurance Group, added: “I am thrilled to be working with AmTrust Financial and have no doubt that Automotive Assurance Group can achieve new levels of growth and success under the AmTrust Financial umbrella. I will continue as president of Automotive Assurance Group, helping our dealers achieve and exceed their business and financial goals while providing exceptional personalized service, and truly the best in F&I products and strategy.”

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MCLEAN, Va. — June was an average month in terms of wholesale prices, according to J.D. Power Valuation Services. It reported this week that wholesale prices of used vehicle up to eight years in age fell 2.2%, which in line with the 2.2% average losses recorded over the past five years.

The firm’s Seasonally Adjusted Used Vehicle Price Index remained unchanged at 111.1. However, in spite of the static movement, the index remains significantly lower — 7.6% lower — than where it was in 2016.

At the segment level, mainstream car segment losses led the industry in June, with subcompact, compact, mid-size, and large cars registering price declines between 3.2% and 3.4%. At the top of that range were large cars, which recorded the largest loss among all segments (down 3.4%).

“Large cars have not experienced a loss of this magnitude in June since 2001’s 3.7% decline,” the firm stated in the June edition of its “Used Car and Light Truck Guidelines” report. “Looking back, the segment’s five-year average was a lesser 2.6% for the period.”

Most of the large car segment’s makes and models had a fairly average performance in June. However, 2010 to 2013 Chrysler 300 and Dodge Charger vehicles recorded sharp price declines (as high as 75 for the 2010 Charger), and account for a sizable portion of the segment’s overall monthly volume.

Subcompacts (down 3.2%) and compacts (down 3.3%) also registered sizable losses, although the declines weren’t outside their historical norms. “For example, over the past five years, small cars experienced 3% depreciation while mid-size cars averaged 3.1%,” the firm noted.

Mainstream utility losses were scatted in June. Mid-size utilizes averaged a 1.5% loss, while compact utility prices declined 2.2%. Mid-size van prices declined less than 1% for the month.

Large and mid-size pickups continued their run of wholesale price dominance, with their wholesale prices growing 0.1% and 0.2%, respectively. “Over the past five years, pickup prices have performed well compared to the rest of the industry, on average,” the firm stated in its report. “That stated, prices typically declined slightly during the period. While sales were strong across the board in the mid-size pickup group, 2015 Chevrolet prices were exceptionally strong and increased by an average of just below 3%.”

On the luxury side, all premium segments outperformed the overall industry average in June. Luxury mid-size utilities experience their biggest loss so far in 2017, down by an average of 2.1%. “However, the segment’s loss was nearly identical to the group’s five-year June 2% average decline,” the firm noted. “Remaining luxury segments performed slightly better as losses ranged between 1.2% for luxury large cars to 1.8% for luxury mid-size cars.”

As for June auction trends, sales volumes of models up to eight years in age fell by 4.7% from May, reaching 373,188 units in June. Last June, vehicle volume for the age group only reached 350,603 units.

Late-model vehicle volume, or units up to three years in age, reached 244,116 in June, which was 5.7% lower than May’s 258,803 units. Late-model volume sits at 1.46 million units through the first half of 2017, which is 7.9% higher than a year ago, according to the firm.

At the segment level, late-model midsize pickup volume was up 3.2% from May, while mid-size van volume increased 1.2%. On the opposite end of the spectrum, large car volume fell the most in June and was down a significant 22.4%. The drop puts the segment’s yearly tally 10.6% below the same period in 2016. On a month-over-month basis, volume was for most of the other segments.

“Through the first half of 2017, late-model mid-size car volume reached 297,291 units and accounted for the lion’s share of industry volume,” the firm noted. “The group’s yearly tally was 4.5% greater than the first half of 2016.”

Late-model compact utilities have also account for a significant amount of total industry volume in 2017. The group’s share reached 218,094 units through June, which is 28.2% greater than the same period in 2016.

Look ahead, the firm expects wholesale prices of vehicles up to eight years in age to decline by approximately 2% in July on a month-over-month basis. On a year-over-year basis, July is expected to perform slightly better than the 2.2% drop observed in July 2016.

“At the segment level, mainstream losses are expected to be relatively consistent across the board,” the firm stated in its report. “Mid-size and large pickups continue to perform very well and are forecast to outperform the industry average. Losses for all premium segments are forecast to fall by slightly more than the industry average for the month.”

In terms of full-year expectations, used prices are expected to decline by about 6% in 2017, about two points worse than 2016% 4% loss. “Ongoing increases in supply, higher incentives, and a normalizing retail environment — including credit conditions — will ultimately dictate losses,” the firm noted.

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BOCA RATON, Fla. — A new study reveals an apparent appetite among consumers for chatbots, but it concluded that these digital boxes that allow customers to converse with a human or AI-enabled bot still have ways to go before impacting business.

Released today by mobile marketing firm 3Cinteractive Corp. (3C), the Chatbot Consumer Report provides an in-depth look at how consumers interact with chatbots and their preferences on using the technology when communicating with brands. Its findings are based on an online poll of 500 U.S. households.

According to results, a quarter of the consumers surveyed said they use chatbots on a daily basis (40% alone for Millennials).When consumers were asked why they thought chatbots were not valuable, 71% said the chatbot could not answer their question or help them. That means businesses will need to expand the capabilities of their chatbots as the technology advances to keep up with growing consumer expectation, 3C officials said.

When asked which tasks they’d prefer a chatbot to handle for a brand vs. a human, checking order status (46%) and product research (42%) rose to the top of the list. But for other tasks, consumers polled still preferred humans over chatbots — 50% for customer service inquiries, and 44% for making an appointment or reservation.

This data is critical for brands since 83% of respondents said they would be more loyal to a brand for offering a chatbot that enables these tasks. Additionally, Business Insider reported earlier this year that 80% of business plan to have chatbots by 2020.

“Choosing the right chatbot strategy for your brand is critical, it's not one size fits all,” said Margie Kupfer, vice president of marketing at 3C. “Understand your customer preferences and build your chatbot strategy around a specific function that benefits the customer. Starting small and executing your chatbot successfully ensures a positive brand experience and allows you to learn more about your customer in order to scale your chatbot into other business functions.”

Click here to download the complete report.

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ATLANTA – To further enhance transaction speed, RMS Automotive and vAuto are making the evaluation and acquisition of manufacturers’ premium off-lease and off-program vehicles more convenient for dealers.

The partnership integrates open sale inventory listed on manufacturers’ digital sales platforms powered by RMS Automotive into vAuto’s Stockwave tool. This enables dealers to save time sourcing high-quality used vehicles and manufacturers to greatly increase exposure of their inventory to Stockwave’s growing buyer base.

“Our partnership with vAuto is another example of how RMS Automotive leverages its connectivity to other Cox Automotive brands to drive more informed decision-making for our clients,” said Nick Peluso, president of RMS Automotive. “This initiative provides dealers unequalled access to pre-auction inventory and helps manufacturers accelerate transactions by channeling the right vehicles to the right dealers at the right time.”  

Having opened its online remarketing channel to all dealers last summer, BMW Financial Services NA LLC is among the first commercial consignors to incorporate their wholesale inventory into Stockwave. For Stockwave dealers, the integration means they can view pre-auction inventory found on BMWGroupDirect.com in customized search streams that allow them to rank vehicles or vehicle types by cost, availability and other factors to aid in their purchase decisions. It also helps BMW Financial Services better manage the buying experience through its branded marketplace by leveraging Stockwave’s broad dealer audience, officials said.

“The collaboration with RMS Automotive is part of the Stockwave promise – that we make the task of acquiring wholesale inventory more efficient and profitable for dealers,” says Randy Kobat, senior vice president of Inventory Software Solutions for Cox Automotive’s Retail Solutions Group. “The first step, of course, is having all wholesale inventory in one place. Our partnership with RMS Automotive brings us another step closer to this important goal.”

Stockwave’s inventory stream includes nearly 300,000 auction vehicles through deep, direct integrations with leading auctions across the country. The Stockwave team is also working to integrate wholesale inventory from other OEM-related sources, officials said.

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MADISON, Wis. — Authenticom scored a tentative victory on Friday in its antitrust lawsuit against CDK Global and Reynolds and Reynolds. The data integration provider was granted a preliminary injunction that prevents the two software makers from blocking access to their DMS offerings while the case proceeds.

The order, signed by Judge James Peterson of the U.S. District Court for the Western District of Wisconsin, calls for all three parties to “agree on all terms of the injunction” or submit “competing proposals” by July 21, effectively creating a framework by which Authenticom can — with dealer authorization — continue to access data entered into CDK and Reynolds’ systems.

“The Court’s ruling today is an important step forward not only for Authenticom, but for the automotive industry as a whole. Authenticom can now meet the data integration needs of both dealers and vendors without the threat of Authenticom’s dealer-authorized data access being blocked,” said Steve Cottrell, Authenticom’s founder and chief executive, in a prepared statement. “We look forward to providing secure, cost-effective, and reliable data integration services to our existing and future customers, finally without the threat of being hindered by CDK’s and Reynolds’ anticompetitive conduct.”

Authenticom’s directors filed suit against CDK and Reynolds on May 1, claiming the data-security measures undertaken by the two DMS providers have threatened its survival by limiting access to data stored in their DMS offerings and may be a violation of the federal anti-monopoly Sherman Act.

Describing the case as “complicated, both legally and factually,” Judge Peterson’s order states, in part, “Authenticom’s evidence establishes at least a moderate chance of success in proving that defendants have violated the Sherman Act. And the balance of harms tips sharply in favor of Authenticom, because Authenticom is clearly at risk of going under without a preliminary injunction.”

In separate statements, CDK and Reynolds executives expressed disappointment in the ruling. In an email to F&I and Showroom, Reynolds and Reynolds spokesman Tom Schwartz said the company plans to appeal the court’s final injunction once it is issued.

Making reference to the testimony of Eric Rosenbach, former head of cybersecurity efforts for the U.S. Department of Defense, Schwartz said Rosenbach and Reynolds’ directors agree the company’s policies are designed to “protect the operational integrity and security of its DMS” on behalf of its dealer clients.

“Reynolds continues to believe that unauthorized access to its DMS is unlawful and Reynolds intends to file counterclaims in the litigation to that effect,” Schwartz said.

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CHICAGO — Innovative Lending Solutions LLC announced the release of Stip Trac, an automotive loan management system designed to help dealers track cash flow, collecting necessary loan documents, or stips, and keeping an open communication line with car buyers before and after their purchase.  

Stip Trac features a dashboard that allows users to track cash owed by a bank, set “contact-in-transit” limits, and track money in transit by salesman. It also provides status updates on any deal in transit, held at dealership, funded, etc. Users can also look up the age of a deal and missing stips, as well as add internal notes that can be viewed by all parties involved with the loan.

Stip Trac also allows dealers to add additional stips to a loan at any time, push welcome calls to the bank, and gain real references and referrals from customers. It also provides users with a "contact list" on their cell phone, and the ability to approve or deny stips as they are received.

The new tool also features a custom messaging so users can send an urgent message to the car buyer. It also offers automatic push notifications and a dealer-branded app that allow users to monitor a loan’s progress on their smartphones.

For the consumer, Stip Trac helps protect them from identity theft. It can also eliminate additional trips to the dealership to drop off loan-related documents, speeding up the finance process at the dealership.

"Stip Trac is a needed tool to improve the automotive loan process for car dealerships and consumers. Using Stip Trac removes a lot of the stress that today's finance managers are facing today,” said Ed Maisonneuve, president and CEO of Innovative Lending Solutions LLC. “We truly built this so the delivery process is a smooth one. As a finance manager, I can't tell you how many times a deal came into my office with missing documents, bad references, missing signatures. StipTrac 100% eliminates that.”

For more, visit www.StipTrac.com.

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RANCHO DOMINGUEZ, Calif. – EVOX Images, a provider of automotive stock photography, 360-degree automotive imaging, and global build-to-order automotive content solutions, today announced that its free VR app RelayCars has reached more than one million downloads.

RelayCars features the most expansive and high-quality VR automotive library on the market and is one of the most popular automotive VR apps on the Oculus Samsung Gear VR store and Google Play store for Android, according to company officials.

“Reaching this milestone is a celebratory event for us and also shows that VR is becoming an important component for the future of car shopping,” said David Falstrup, CEO of EVOX Images. “Consumer needs are driving technological advancements in every aspect of our lives. We’re showing consumers a new way to research vehicles without ever leaving the comfort of their couch.” 

The VR app provides a truly immersive, automotive VR experience that lets users explore every make and model available since 2015 — from trucks, cars, and SUVs to exotics and muscle cars — in six different virtual showrooms.

EVOX utilizes its industry-leading 360-degree imaging — which it supplies to more than 20,000 dealer websites and the top automotive websites — to power its new virtual reality technology.

Within the past year, the EVOX VR team has extended technology offerings with the introduction of showrooms, virtual cinema, vehicle configurator capability, VR product clinics, and more.

For more, visit www.relaycars.com.

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The CXO of the Year awards are given to C-level executives who are at the top of their respective fields and show outstanding achievements and performance in their roles. Those selected for the award are chosen for small, medium, large, public, private, and government agencies, each demonstrating the importance of providing strong leadership, visionary innovation sound business strategies, and social responsibility in Utah business.  

“I feel very honored to receive this award. These past 10 years with Alpha Warranty have been an amazing journey and I look forward to many more ahead,” Lindsey said. “I feel very fortunate to work alongside such talented individuals that challenge the status quo in our industry and make our company one of the top service providers in the country.”

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ALBANY, N.Y. — Auto/Mate Dealership Systems' dealership management system (DMS) is now fully integrated with Superior Integrated Solution's Darwin Automotive F&I platform. Dealers using Auto/Mate's Automotive Management Productivity Suite (AMPS) now have direct access to Darwin's patented F&I solution.

With both systems fully integrated, all data entered into the Darwin F&I application is instantly and securely updated in Auto/Mate’s DMS, and any changes made in the DMS are reflected in the Darwin F&I application in real time.

"Darwin takes the details from each deal, vehicle and customer financial situation to determine what the ideal presentation will be for that customer," said Mike Esposito, president and CEO of Auto/Mate Dealership Systems. "In today's customer-centric world, this type of prescriptive selling is necessary to improve and speed up the typical car-buying experience."

Jeff Stafford, chief marketing officer for Darwin, added: "Auto/Mate's Open/Mate integration program makes it easy for vendors to integrate, as it is based upon open standards and there are no expensive certifications required. Additionally, Auto/Mate's team of technology experts is friendly, fast and professional."

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Reyes, whose career includes 10 years in the automotive industry, will oversee the development and implementation of strategies designed to increase awareness of Helion's services.

"Tracey brings a wealth of marketing knowledge to this position and I'm excited to have her energy, expertise and guidance for achieving our vision for the future," said Erik Nachbahr, founder and president of Helion Automotive Technologies.

Reyes previously served as a marketing director for Digital Air Strike and marketing manager for Dealertrack. She’s also served as director of marketing for Paypro Corp. and assistant marketing manager with First Data Merchant Services.

"Helion's unique service offerings are one of the best kept secrets in the automotive industry, and I look forward to changing that narrative," said Reyes. "The main challenge lies in educating auto dealers about how IT services should be viewed as an investment that can help them grow and reach their business objectives, versus an expense to be contained."

Helion's service offerings include end-to-end management of hardware infrastructure, software applications support, help desk support, data and cybersecurity solutions, communications and more. For more, visit www.heliontechnologies.com.

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In June, small pickups registered the lowest monthly depreciation of 0.1%. Vehicles in this segment include the Toyota Tacoma, Chevrolet Colorado, GMC Canyon, Nissan Frontier and the Honda Ridgeline. They collectively finished June with an average price of $21,328, a 7.3% decrease from a year ago.

Subcompact cars recorded the largest depreciation during the month at 2.8%. Vehicles in this segment include the Chevrolet Sonic, Ford Fiesta, Honda Fit, Toyota Yaris, Nissan Versa, Kia Soul and the Hyundai Accent. They collectively finished June with an average price of $6,554, a 22% decrease from a year ago.

The segment with the largest 12-month depreciation is prestige luxury cars (25.4%). Vehicles in this segment include the BMW 7-Series, Lexus LS 460, Porsche Panamera, Jaguar XJ, Mercedes Benz S-Class and the Audi A8. They collectively finished June with an average price of $34,894, down from $46,781 one year ago.

Over the past three months, the values of two segments have remained relatively unchanged: full-size pickups and small pickups, which have inched up 0.2% in value, according to Black Book.

Subcompact luxury CUVs registered the largest monthly depreciation in June of 1.8%. Vehicles in the sub-compact luxury crossover segment include the Audi Q3, BMW X1, Mercedes Benz GLA Class, and the Mini Cooper Countryman. Vehicles in this segment finished the month with an average value of $16,388, an 18.9% decrease from a year ago.

“Falling gas prices in the month of June resulted in pockets of strength in used-vehicle valuations,” said Anil Goyal, senior vice president of automotive valuation and analytics for Black Book. “Pickup trucks and large utilities have been strong so far this year while small cars have continued to drop, but the remainder of 2017 is expected to show differing trends in terms of vehicle retention strength.”

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According to ADESA Analytical Services’ monthly analysis of wholesale used-vehicle prices, the average wholesale price for a used vehicle in June was $11,067, down 0.7% from May but up 4.7% from a year ago.

“Compact and fullsize pickup trucks and minivans show significant average price gains for the month, while most other model classes registered month-over-month declines or modest increases,” Kontos stated in his June Kontos Kommentary.

Average wholesale prices for used vehicles remarketed by manufacturers were down 1% month over month and down 1.9% year over year. Prices for fleet/lease consignors were down 1.1% sequentially and up 3.2% annually. Average prices for dealer consignors were up 0.9% vs. May and up 7.7% relative to June 2016.

“Price softening continues to be evident when holding constant for sale type, mode-year age, mileage, and model-class segment,” Kontos added. “As the table show, average prices for both of these two bellwether car and truck segments were down by about 4% year over year, reflecting growth in off-lease supply.”

Certified pre-owned sales were down 6.6% from May and 0.8% from a year ago, according to Autodata Corp. On a year-to-date basis through June, CPO sales were up 1.2%.

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Welcome to an action-packed edition of Auto Dealer Today. This month, we run the gamut from tax reform and store security to machine learning and chatbots. Every topic and writer was carefully selected in support of our single, unifying vision for this magazine: to give you, the reader, a competitive edge in a rapidly evolving auto retail industry.

Having a vision is a key component of success in any field, and it’s central to the theme of “How to Become a Visionary Leader,” in which Auto/Mate’s Mike Esposito lays out a five-step plan for business owners and managers. He encourages you not only to create a vision but to find ways to get other people to share it and be willing to take risks along the way.

Over the past 15 years, your vision of a business built on profits from new-car sales has been irrevocably altered. Your profit centers are used cars, F&I, special finance and fixed ops. TV, radio and newspaper ads are now supplemented (if not replaced) by digital and social marketing campaigns. You are likely, at this moment, to be considering any number of new service providers, online retail partnerships, and finance channels. Your vision is changing with the times.

The same is true in the publishing world, and I’m not just talking about the digitization of the printed word. When we launched ADT’s sister publication, F&I and Showroom, our vision was a magazine supported by advertisers in the “F” segment; in particular, captive finance companies. We quickly learned the “I” in “F&I” offered a broader, deeper network.

In September, we will converge in Dallas for Industry Summit, a four-day training event that was originally known as the F&I Conference. Understand that the magazine and the event were born in a time when the finance office was, in most dealerships, a silo — a separate and often undervalued pursuit, kept out of the way of the sales department.

So too for the Vehicle Service Contract Administrators Conference (VSCAC), replaced five years ago by P&A Leadership Summit (PALS). VSCs remain a rich and rewarding topic of conversation, but speakers and attendees working in that segment want to share insights and learn more about every F&I product in your lineup.

Today, Industry Summit includes sessions dedicated to building effective, compliant processes throughout the front end. The Best Training Day Ever, F&I Think Tank, Special Finance Conference, Compliance Summit and PALS are all under the same roof. Our event has quite necessarily evolved along with the industry in which we all work.

I hope you enjoy Mike’s article as much as I did. It is a useful and practical guide for dealers and managers and a strong message for an industry in which leadership can too often be lacking. But I must also urge you to be willing to rethink your own vision whenever circumstances permit. It is a worthwhile mental exercise for any business owner. In the auto retail arena, which is frequently altered by rapidly changing habits and disruptive new technology, it is absolutely essential. 

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Just a few years ago, no one would have used a chatbot, because they simply didn’t exist in the capacity that they do now. Until recently, no one would have purchased an item — much less a vehicle — from a robot. Now, suddenly, we find ourselves living with Siri, Alexa, Google Assistant and Cortana — platforms that are changing the way we see artificial intelligence forever. They aren’t just robots anymore; they have become our personal assistants.

In the automotive world, chatbots are also showing us something we’ve never seen before. Facebook’s chatbots are driving prospects before they ever visit the dealership. Chatbots can point prospects to new inventory and schedule appointments. This marks a major turning point in the evolution of the technology.

What Are Chatbots?

Chatbots are artificial intelligence-powered computer programs that simulate human conversation. The end result is a polished and seamless conversation that prospects can use freely. Chatbots give prospects the answers they are looking for in real time, and there can even allow prospects to request more information or schedule appointments. How cool is that?

When I first mentioned chatbots to the Bryan Honda sales team, they gave me a “deer-in-the-headlights” look. Then I had them try out HondasfromHome.com, a chatbot that operates within Facebook messenger.

I could tell that, within a few clicks, they got it. They saw the potential here. In real time, a prospect could search our entire inventory, schedule an appointment, schedule a service, get in touch with a live person, and even get pre-approval for financing — all without leaving Facebook messenger!

On the dealership’s end, the 100% capture rate is a huge plus. If someone clicks on the messenger app for more information, they are automatically added to that page’s data list. With new and exciting tools like the new Facebook ads campaign for messenger, ads and updates can be sent straight to leads, saving dealers and sales managers a lot of time and money.

Why Are Chatbots Important?

Just as with so many of the other new digital marketing strategies out there, chatbots can create revolutionary change. … Although I should add that chatbots aren’t really “new” at all. Michael Mauldin introduced Verbot in 1994. (He called it a “ChatterBot.”) What is new is their growing presence in the automotive realm. The tide is turning fast, and that’s what I really find remarkable.

To be sure, automotive disruptors are taking advantage of the rise of the new automotive ecommerce. Just check out Carvana, Shift and Vroom. Or take a look at ­AutoNation. American’s largest vehicle retailer is piloting online sales kiosks with CarServer and Walmart. And we can’t forget about TrueCar, the car shopping website that entered into a financing agreement with JPMorgan Chase to streamline the loan process.

It’s easy to see that leading automotive companies are leveraging digital to the fullest and making it work for them. Now it seems that ecommerce tools like chatbots are becoming a necessity as opposed to a luxury. When digital marketers learn the right way to use and market them, the sky is the limit. The HondasfromHome.com bot I mentioned? It was designed to create, customize and train chatbots for dealerships. The first two weeks of beta testing produced more than 200 conversations.

This technology may never take the place of real people. But if you have already dismissed them as a flash in the pan, just take a look around you. Chatbots are here to stay, my friend! 

Rico Glover is chief digital officer at Bryan Honda in Fayetteville, N.C., and a nationally recognized expert in dealership digital marketing. Contact him at rico.glover@bobit.com.

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Marty Hamm spent more than 18 years working in security and security contracting. Half of that time was with private firms and the other was with the State of Tennessee. He served for more than six years as an elite correctional emergency response team (CERT) officer with the state’s corrections department. When inmates tried to escape, act out, or sneak in contraband, Hamm and his team were sent to set them straight. 

His job nowadays is a little less dangerous, but he’s just as passionate about it. After suffering a shoulder injury, Hamm decided to switch career paths. 

He landed at Alexander Chevrolet Buick GMC in Dickson, Tenn., just over three years ago. He was hired by the dealership’s general manager, Allan Ledford, who said Hamm’s work ethic and knack for drawing in customers is unmatched throughout the dealership. 

“He goes above and beyond the typical call we expect,” Ledford says. “It’s rare in today’s world.”

In Hamm’s first month on the job, he sold 16 cars — a considerably high number even for some seasoned veterans. His GM says Hamm has “a magnetism that draws people to him.” Hamm says he just likes being around people. 

“People tell me all the time I can talk to anybody,” he says. “I can find something in common with a farmer or a DJ at a radio station.”

Today, Hamm averages just over 25 units per month, new and used. He reached the 30-unit mark five times last year, including a personal best of 34. (The store totals about 155 units per month among 13 salespeople.)

General Motors awarded Hamm its Mark of Excellence two years in a row. In 2015, Hamm sold 264 units and jumped to selling 319 cars in 2016. He says about 60% of his sales at this point are through repeats and referrals.  

“We don’t know how he does it,” Ledford says of Hamm. 

According to Ledford, not only does Hamm “continue to excel in average monthly sales” but he oversees the internet and social media functions for the dealership while “maintaining an absolute perfect CSI from all individuals he has contact with.”

Hamm spends a lot of time keeping up with customers, mainly through Facebook. After he sells someone a car, he takes a picture with them and posts it online. He says he’s on “all the social media sites”: Twitter, LinkedIn, Instagram. He regularly converses with customers there too. 

But the contact doesn’t end there. He tells his customers to “call or text anytime.” Hamm will set up service appointments for his clients or sometimes call just to ask, “Hey, how are you doing?” He sends thank-you notes to anyone he’s sold to, along with handwritten birthday cards and Christmas cards.   

Not only does Hamm have a good rapport with his customers, he is popular among colleagues within the dealership. He always has time to help out some of the newer salespeople, Ledford says. He says that salespeople will sometimes listen in on Hamm’s conversations to pick up on ideas to emulate. 

“They respect him,” Ledford says. “They’ll say, ‘I want to be like Marty.’”

Stephanie Forshee is the former senior editor of Auto Dealer Today and F&I and Showroom. She has expertise in dealership operations, sales and F&I. Email her at stephanie.forshee@bobit.com.

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Sometimes you get blindsided. Sometimes you can see something coming from a mile away. This is one of the latter. Dealerships that employ flim-flam artists are about to get slammed.

When I use the term “flim-flam artists,” I am referring to those folks, usually but not always resident in the dealership’s F&I operation, who are committing felonies.

Avoid These and Other Crimes

One of the sorts of felonies I’m referring to is “powerbooking,” or overstating the features and equipment of a car in order to bulk up the loan-to-value ratio, thus conning a finance company into a larger advance on a contract than the car would ordinarily bear. The practice violates several federal and state laws — the sorts of laws that come with civil penalties, jail time and orange jumpsuits.

Another involves creating new (and false) information for the buyer’s credit application. This one is sometimes accompanied by the counterfeiting of the various “stips,” such as proof of income, proof of employment, proof of and length of residency, and the like. Again, federal and state laws are implicated, and these are also the sorts of crimes that can get you an orange jumpsuit.

Fake or “loaned” down payments, “side notes” that are never enforced, “straw” purchasers, the list of ways to defraud the banks, sales finance companies and credit unions that buy the dealership’s retail installment contracts goes on and on.

And I haven’t even started on the sorts of fraud that dishonest dealers pull on consumers. An example is “We can’t get you bought” — telling a buyer that the dealership cannot get financing unless the buyer agrees to buy GAP or a vehicle service contract. This violates federal disclosure laws unless the cost of the required additional product is included in the disclosed finance charge and annual percentage rate.

Another example is telling a buyer that the original financing for the car fell through and that the buyer must return to the dealership and sign another contract, when the buyer is under no contractual or legal obligation to do so. Fraud like this could but usually doesn’t result in jail time (more’s the pity), but these violations are certainly actionable by enforcement authorities and by private plaintiffs’ lawyers representing consumers.

An Unlikely Foe

So, who’s going to rain on the parade of dealers who tolerate fraud in their operations? The Consumer Financial Protection Bureau and the Federal Trade Commission, for sure, but both of these organizations have regularly attacked dealer fraud. They will continue to do so, but their efforts aren’t the “crackdown” mentioned in the title to this article.

The crackdown I see coming is from the companies that buy retail installment contracts from dealers. Those companies themselves have recently found themselves under attack by state attorneys general for tolerating fraudulent contact by the dealerships from which they acquire RICs. The result was millions in penalties and settlement agreements under the terms of which the targeted companies agreed to ride fraud patrol on their dealers.

Just as dealers have conferences periodically to catch up on new developments, the AGs from the various states talk and meet regularly to share information on their latest efforts to enforce the laws. You can bet that the AGs involved in these actions will be crowing about their successes to their colleagues from other states.

The companies involved in these actions will certainly be tightening up their antifraud practices, but they won’t be the only ones. Every finance company, bank and credit union in the business of buying RICs from dealers has by now gotten the word that the AGs are targeting dealer fraud. They will be parsing every word of the settlement agreements to see what steps the companies were required to incorporate into their RIC-buying process.

Is It Hot in Here?

Several vendors are hitting the market with various sorts of verification solutions that will assure the buyers of RICs that the contracts they are buying and the information supporting those contracts is on the up-and-up. Look for a new round of revisions to dealer agreements that will increase your responsibilities for fighting fraud.

Dealers will promptly begin to feel the heat of a tightened monitoring and buying process. The crackdown is on the way. It would be a really good idea to get out in front of this one.

One final thought, lest readers think that I am unfairly claiming that dealer fraud is widespread. I don’t. I believe that most dealerships are operated in a legal and compliant way. But the continued reports of “evildoers” indicate that there are dealerships that misbehave.

In the lawyering trade, the joke is that 90% of the lawyers give the other 10% a bad name. In the car business, I think it’s closer to the truth that 10% of the dealers give the other 90% a bad name. It’s the dealerships in that 10% group that the good guys in this business have to thank for the coming crackdown.

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.

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As large companies like Amazon and Alibaba enter the aftermarket auto parts business, should brick-and-mortar retailers and auto manufacturers be nervous? With their vast reach, popularity and insane margins, these larger ecommerce companies are primed to disrupt the aftersales service category like never before. And given the resources they can dedicate to virtually any new business vertical, auto dealers must step up their game — or at the very least evolve — to keep pace.

Here are three areas where both manufacturers and traditional aftermarket part providers can devote their attention to provide a necessary added boost:

1. Keep an Eye on Pricing

Service parts pricing is one of the most significant contributors to success in aftersales service. Monitoring competitor pricing can help aftermarket auto parts retailers and manufacturers seize the upper hand in a street fight with an Amazon.

In a recent Bloomberg report, RBC analyst Scot Ciccarelli referred to Amazon as a “dangerous” competitor in the category. Yet while it has huge reach and a potential pricing advantage, the average replacement parts buyer — a segment that represents a majority of aftersales customers — doesn’t have the knowledge to purchase parts without guidance.

This means that specialty shops (think AutoZone or NAPA) and local dealerships are likely to have the upper hand over the “big names” — especially if they stay on top of pricing.

Beyond keeping tabs on competitor pricing, specialty shops and manufacturers can win even as Amazon moves into their lane by adopting more modern service parts price-optimization solutions. Cost-plus formulas and Excel spreadsheets must be replaced by scientific and dynamic pricing methods that offer a data-driven approach to the optimized price of a part. If implemented, this can immediately translate into better margins.

2. Better Manage Parts Inventory

With Amazon’s popular Prime service, the company offers irresistible features such as same-day delivery. But even same-day delivery doesn’t replace the ease and speed of running to the shop around the corner in the middle of a project. And it’s all the more reason why shops and manufacturers must have the right service parts in stock at the right time. For example, Target saw a 40% reduction in “out-of-stocks” during the 2015 holiday season by simply taking a more scientific approach to inventory management.

Not having parts in stock has ramifications for your dealership’s bottom line and customer loyalty. You can’t afford to let this happen, especially with the influx of competition throughout the retail category.

3. Adopt Data Management

From in-car performance statistics to customer loyalty insights and marketing information, the aftersales service category is a deep reservoir of data that points the way to greater profitability. With all the data that’s produced and available, the opportunities to manage opportunities and anticipate obstacles are limitless.

The do-it-yourself aftermarket service parts business is currently a $50 billion industry. And right now, although it’s up for grabs, sticking to the status quo won’t help your dealership. You must embrace an updated approach. If you do, the service parts category could be yours for the taking.

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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Amazon and Uber have raised expectations for a seamless, technology-enabled customer experience, but most dealers and fixed-ops managers are still setting appointments and managing the service process the old-fashioned way. As senior vice president of marketing and managed services for Xtime (div. Cox Automotive), industry veteran Jim Roche has dedicated himself to modernizing the dealership service experience. Auto Dealer Today caught up with Roche to discuss how simple tools such as online appointment scheduling are changing the game for dealers.

ADT: Jim, we’ve all read the reports. We knew the good times couldn’t last forever. What do dealers need to do to remain profitable when sales decline?

Roche: I’ve been working with dealers for 34 years, and I count many dealers and fixed-ops managers as friends. I also have the advantage of doing public speaking regularly, talking with large groups of dealers and hearing their concerns. Dealers say — and this is also based on recent market research — 65% of dealers say retention is their No. 1 priority, and retention starts in the service department. The overall goal is profitable growth, and retention is the foundation for profitable growth.

ADT: Are dealers addressing that priority?

Roche: Dealers are lagging in terms of investing in new technology that enables a better service visit. The experiences you and I have outside of automotive are shaping our expectations when we take our vehicles in for service. I use Amazon, Uber, OpenTable — fabulous experiences that are technology-enabled. Dealers understand the primary driver of retention is the customer experience. But the market research shows that 85% of dealers don’t currently have the technology that enables a superior experience.

ADT: What are they missing?

Roche: There are so many things. In no particular order, some dealers still do not provide a digital appointment-setting experience. For those of us accustomed to the Amazon experience, or using OpenTable to book any restaurant in your city, or using Delta Airlines’ app to book a flight, it seems obvious. Service-lane and service-bay technology are also important items. Have you ordered a pizza online from Domino’s recently?

ADT: I have. You see a graphic depiction of the process and track the status of your pizza.

Roche: Look at Domino’s revenue before and after they added that interface, which was part of the overall makeover of the company. Those are the things that are shaping our expectations. We want to be able to schedule anything, anywhere, anytime, online. If you extend that to service, we want to see the day and time, our service advisor’s name, pricing, and whether we can have a loaner car. Have you been to a dealership for service lately?

ADT: I have had a good experience and a bad experience. For the bad experience, they told me to bring it in first thing in the morning and they’d handle it right away. I was there all day. The next time, I made an afternoon appointment. They were ready for me and I was in and out in half an hour.

Roche: It shows you how schizophrenic the experience can be. When you had a bad experience, you said you came in early, as requested. Dealers don’t have to do that. They just have to load the shop properly. The No. 1 reason why customers don’t come in at appointed times throughout the day is because they didn’t know they could. And that’s self-perpetuated by the dealer. If you’re doing proper appointment scheduling, you can be told to come in at 1 p.m. and it will be done by 3 p.m.

ADT: How many dealers would you say are doing that?

Roche: Probably 50% of the market is doing proper online scheduling, but that’s just the scheduling component. Another aspect is the service lane — only about 25% of dealers are using some form of mobile tech in the service lane today. Think about that experience. You drive up, you’re greeted at your car by someone with a mobile device. If you scheduled an appointment, they know who you are and why you’re there. They do a quick walkaround, make a note of anything else you might need. Quick swipe of the finger and you’re on your way.

Another example of many is that we should send service updates via text. In the most recent J.D. Power survey, 67% of consumers said they would be positively influenced by text updates. They wanted them and would be positively influenced by getting them. But only 3% reported receiving them.

ADT: Do you believe the other 97% of customers know what they’re missing? I don’t mind text updates, but I don’t mind not getting them.

Roche: Generally, I’d agree with you, for now. But our expectations continue to be raised by experiences outside automotive. The fact is that some dealers have it figured out and others are lagging. As it relates to understanding customer satisfaction, there are three levels: implicit, explicit and latent. Implicit are the things you don’t ask for; it’s implicit that you’ll receive them and not receiving them displeases you. Explicit are the things you ask for and the service provider agrees to. If you don’t get those things, again, you’re dissatisfied.

Latent is those things you don’t expect and may not know exist. You get them and you’re delighted. You say you’d like to bring your vehicle in for service and the dealer’s response is, “Not only will we look at it, we will pick you up, we will give you a loaner, and the tech will take you for a test drive once it’s fixed.” You didn’t ask for it but receiving it delights you.

No amount of latent will make up for a lack of implicit or explicit. But I think the point is, dealers can own their market by delivering a superior experience enabled by technology.

ADT: It’s not a revolutionary concept. Dealers use Amazon.

Roche: Of course they do. Think of the standard technology adoption curve: First you have the early adopters, then the large, middle part of the curve and then the laggards enter the market. The early adopters have been doing these things. Now we’re moving into mass adoption. More and more, we are seeing dealers who understand they have to provide an Amazon- or Uber-like experience.

ADT: What made it worth the investment for the early adopters?

Roche: It was a variety of things. After the recession, the need for fixed ops for survival was impressed upon dealers. The increasing awareness of the need for customer retention is a driver in that. Again - dealers realize the foundation of profitable growth is retention. Dealers spend so much money on advertising to bring in new customers. One of the reasons they have to do that is poor retention. The business would shrink without new customers.

Now, sales have plateaued, and they may have started on a downward curve. New-vehicle profit margins are less than 5%. Used is now at or around 9% or 10%. Now contrast that with the service business. Based on Cox Automotive research, less than one in three service visits takes place at a dealership. The amazing part of that is they sold all the cars. But set that aside. Recapturing some of that remaining 70% is a huge opportunity.

ADT: How long have you been working on this?

Roche: Xtime started off back in the dotcom days. But we’ve been in the automotive vertical with Xtime for about 12 years. We started with an online appointment-scheduling tool, and that’s still our flagship product. Last year, we introduced Spectrum, a suite that has four modules: Invite, Schedule, Engage and Inspect. And the most important part is they’re completely integrated. We’re going to modernize the service experience.

ADT: Have you had dealers try these tools and say they prefer the old-fashioned way?

Roche: I have never heard a dealer say that, ever. What we do hear dealers say is, “I can’t get my staff to do this.” Implementing a behavioral or cultural change is the hardest part. We help them understand and implement those process changes.

ADT: How would you advise a dealer who is on the fence about modernizing service?

Roche: Obviously, I would like every dealer in the world to have Spectrum. That’s probably not going to happen. But every dealer in the world should at least have dynamic online appointment scheduling. There is no instance I can think of where this technology is not available to me in every other walk of life. And there is a demonstrative competitive advantage in being first. So my advice is to find the best vendor for your price point and then start with scheduling.

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Reed’s session, “Working Together for Each Other’s Benefit,” will offer both groups the opportunity to better understand the challenges they face in today’s auto retail and finance industry. As president and CEO of F&I Express, Reed has built relationships with leading companies in both segments.

Among other projects, Reed has devoted time and resources to building a platform designed to streamline the product-cancelation process. He cited the recent passage of new rules governing GAP refunds in several states as an example of an increasingly hostile regulatory environment lenders and product providers must work together to address.

“Through this session, we hope that lenders and providers will gain a better understanding of each other’s challenges,” Reed said. “If we are successful, we will establish a framework for improved lines of communication and a working process that benefits everyone.”

Registration for Industry Summit 2017 is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount. To discuss sponsorship and exhibition opportunities, contact show chair David Gesualdo at (727) 947-4027 or via email.

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First Choice Car Care is designed to appeal to buyers of older vehicles who desire investment protection at a reasonable cost, according to company officials. It also encourages dealers to retail units profitably they would otherwise wholesale for a loss.

“These plans help us sell an additional 50 to 75 high-mileage units a year, and because of their competitive pricing, they also help me close more subprime deals,” says Angela Barrett, lead finance manager for Jenkins Nissan in Leesburg, Fla. The dealership retails about 150 new and used vehicles a month.

Barrett added that the costs of the plan give the dealership more wiggle room when it comes to trades. “That can make the difference for a prime deal, because now we have a retail outlet for these cars,” she said. “That makes us a reasonable front and back profit on units we’d otherwise have to wholesale at a loss.”

Part of the Consator Group of Companies, First Choice Car Care covers eligible vehicles 20 years and newer and have under 150,000 on the odometer when sold. It also offers five years investment and budget protection, and provides 50,000-, 75,000-, and 100,000-mile coverage options.

The First Choice Car Care VSC covers most domestic brands, including orphans and most luxury and import models. For either vehicle class, consumers can choose either a basic plan for powertrain, turbo/supercharger, and four-by-four and all-wheel-drive transfer case components, or the Enhanced plan. The later adds drive axle, air conditioning, electrical, and fuel system protection.

All programs include wear and coverage, towing, rental, roadside assistance, and trip interruption. And coverages may be transferrable to a new owner should the original purchaser sell the covered vehicle.

The First Choice Vehicle Service Contract program is administered by Allegiance Administrators. First Choice Vehicle Service Contracts are backed by Assurant, which has more than $30 billion in assets and is an “A”-rated carrier with A.M. Best.

For more, contact Lloyd Trushel, president of First Choice Car Care, at Lloyd@consatorgroup.com

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“We’re thrilled to be a designated RCI partner,” said Matt Rodeghero, AutoLoop Chief Product Officer. “Data drives everything we do, and this certification helps ensure that we can securely access the information needed to deliver the best user experience — for both dealers and their customers.”

AutoLoop offers dealers a comprehensive marketing and engagement solution through the AutoLoop Customer Engagement Suite, and the new Reynolds and Reynolds certification further enhances its offering.

“By synchronizing the AutoLoop platform and Reynolds and Reynolds products, we’re able to offer real-time access and updates for customers who use products from each organization,” Rodeghero said. “It’s a big win for everyone.”

AutoLoop is also certified as an RCI partner for the Reynolds and Reynolds ERA DMS.

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“Our local and mobile strategy meets the needs of independent and franchise dealers through multiple sales channels, giving clients choices to do business when and where it serves them best, “said Randy Beil, the company’s vice president of mobile and local.

The new, smaller, Manheim auction sites offer multi-consignor auctions as well as Simulcast, inspection and reconditioning services. Financing options through NextGear Capital and assurance packages through DealShield are also available.

Joey Huang of Great Lakes Auto Group, who has offered inventory at Manheim Cleveland since it opened last year, attributes these services, which are not available in local dealer-to-dealer sales, to wholesale business growth.

“As a consistent consignor, we have watched our sales climb. We are currently running about 50-60 cars every other week, which are mostly imported trade-ins under $7000,” said Huang. “The inclusion of Manheim’s condition reports on our listings has led to incredible in-lane and internet action.”

Manheim will hire full- and part-time staff to run these new one-to-four lane operations, making a positive impact on local economies through increased employment opportunities and visiting dealers’ spending in these markets when participating in sales. New Locations are:

• Manheim St. Louis Gateway, 1550 E State Route 15, Bellville, IL 62221
• Manheim West Texas, 614 E County Rd 7200, Lubbock, TX 79404
• Manheim Montgomery, 3711 Wetumpka Highway, Montgomery, AL 36117
• Manheim Lilburn, 313 Luxomni Rd, Lilburn, GA 30047
• Manheim American Fork, 221 S 500 E, American Fork, UT 84003
• Manheim Wilmington, 6220 Market St, Wilmington, NC  28405

“Our expansion decisions have been dealer-driven,” Beil said. “In many cases, clients collaborate with us to open facilities because they want an open, transparent marketplace that delivers better pricing and vehicle retention than typically available at traditional dealer-to-dealer sales, such as bid lot sales or dealer self-hosted lot auctions. In addition, through Simulcast and OVE, we are able to extend the buyer base and increase the sales percentage.”

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Mission Control is an artificial intelligence social media listening and consumer engagement platform that provides Digital Air Strike’s thousands of clients the ability to track all analytics in a single and very actionable dashboard.

“I am extremely proud of our innovative product and technology teams. It’s exciting to have our Mission Control platform recognized for the way it leverages social media intelligence to make it actionable for businesses nationwide. Initial feedback indicates that it is already proving to be a game-changer for our thousands of clients,” said Alexi Venneri, cofounder and CEO of Digital Air Strike.

Mission Control was designed to offer actionable social media and review site data at every level — from a single brick and mortar location to a multi-location brand. This is the second People’s Choice Award won by Digital Air Strike. The company’s Review Surge 4.0 technology received a People’s Choice Award for Favorite New Product in 2015.

Digital Air Strike also announced it was named from more than 3,600 nominations as the winner of four American Business “Stevie” Awards including Management Team of the Year and Online Marketing Campaign of the Year for a social advertising campaign that achieved such stellar results Facebook featured it as a Success Story. Digital Air Strike was also a finalist in the highly competitive category of Best Facebook Community/Engagement Campaign in the 2017 PR News Social Media Awards, and was named a finalist for Best Social Media Campaign and Social Agency of the Year in the 2017 Incite Group Corporate Social Media Awards.

Co-founder and CEO Alexi Venneri, was also recently named a Desert Mountain Region finalist in the 2017 Entrepreneur of the Year Awards (EY). Finalists from each region were voted on by a panel of independent judges for the opportunity to be considered for the national Entrepreneur of the Year award.

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AUGUSTA, Maine — With Governor Paul LePage’s signing of S.P. 531 into law on June 12 — legislation that clarifies what GAP is and does, and defines how it is sold — the Guaranteed Asset Protection Alliance is now two states away from reaching its 2017 goal.

Set to take effect on Jan. 1, 2018, Maine’s new law mirrors the model act developed by the GAPA, an alliance of GAP providers, underwriters and finance sources that is managed by Tallahassee, Fla.-based law firm Meenan P.A. Aside from the consumer protections it puts in place and the tools its gives state regulators to discipline bad actors, Maine’s new law offers GAP providers protections as well.

“In some cases, GAP is regulated by just an opinion offered by the state’s department of insurance or the insurance commissioner, but it’s only good as long as that person is in office,” said Rob Berger, president of the GAPA and executive vice president and director of operations for F&I product provider Wise F&I. “But commissioners get voted out, and opinions change. That’s why GAPA goes into states that might already allow GAP from an opinion. Once GAP gets into the books, an insurance commissioner can’t say, ‘I don’t want it.’ So it protects the product.”

Maine was one of four states the GAPA targeted this year, Berger said. Alabama, another state targeted by the alliance, passed similar legislation that was signed into law by Governor Kay Ivey on May 26. Remaining is New Jersey and Wisconsin.

The Texas Legislature also passed a GAP bill in mid-May — legislation signed into law by Governor Greg Abbott on May 26. Berger said the bill, Senate Bill 1052, wasn’t initiated by the GAPA. Set to take effect Sept. 1, the legislation amends current state law governing the sales of debt-cancellation products, allowing GAP to be sold in connection with the financing of motorsports and powersports vehicles. It also allows the product to be sold on lease transactions.

The new Texas GAP law also states that finance sources can satisfy their GAP waiver refund obligations by providing written instructions to dealers and GAP administrators, and by ensuring that refunds or credits are made no later than 60 days after the termination of a debt-cancellation agreement.

The main thrust of the GAPA’s model act is to clarify that a GAP debt waiver is not insurance, according to Meenan P.A.’s Timothy J. Meenan. It also clarifies the roles of the dealer, the administrator and the creditor, ensures that GAP waivers contain clear coverage and disclosures as well as the correct structure to ensure consumers get the proper amount waived after their vehicle is totaled.

Considered one of F&I’s core products, GAP is designed to protect consumers by paying the difference between the value of their vehicle at the time it’s totaled (or stolen and not recovered) and the balance owed on the loan. For dealers, the product puts consumers who suffered a total loss of their vehicle back in the market for a new car.

Maine’s law states that a GAP waiver must either be included in the auto finance agreement or attached to it as an addendum. It also states that the waiver may be sold for a single or monthly payment, but “may not be considered a finance charge or interest” when disclosed in compliance with the Truth in Lending Act. The new law also states that the waiver must remain part of the finance contract when the contract is assigned, sold or transferred.

As for consumer protections, Maine’s new law requires that GAP waivers sold in the state include a 30-day “free-look” period in which the borrower can cancel the waiver and receive a full refund. The waiver contract must also provide clear instructions on how to obtain waiver benefits, and prohibits dealers and other creditors from requiring that consumers purchase the protection to obtain credit or to secure better terms.

Additionally, Maine’s GAP law says a consumer is entitled to a refund of any unearned portion of the purchase price of the waiver if it is canceled or the finance agreement is terminated early. If the latter happens, the law states that “the borrower must provide a written request within 90 days of the event terminating the finance agreement” to receive that refund. The waiver must also disclose the method for calculating the amount of the refund.

Berger said the alliance’s lobbying efforts are already in full swing in New Jersey and Wisconsin, noting that there are still more than 20 other states that have yet to define GAP as a waiver through legislation. Before the end of the year, he added, GAPA will create a new list of states to target in 2018.

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In 2009, Warranty Solutions launched the eco-friendly EcoMind product option, providing additional mechanical breakdown coverage for the parts that help vehicles run more efficiently, burn fuel more cleanly and reduce overall emission output. Throughout the last nine years of Warranty Solutions’ partnership with the Arbor Day Foundation, on average, 25 trees were planted for each EcoMind product option purchased. 

“Most of our customers are parents and they purchase the EcoMind product option for the benefit of future generations,” said agent partner Cary Berman. “EcoMind helps to keep the vehicle running clean, and at the same time, we work with the Arbor Day Foundation to plant trees.”

Plantings have occurred in 18 forests nationwide, including: Big Thompson Canyon, Colo.; Washington Department of Natural Resources Northwest Region, Wash.; Washington Klickitat District, Wash.; Tillamook State Forest, Ore.; Idaho National Forest, Idaho; Modoc National Forest, Calif.; Plumas National Forest, Calif.; Pike National Forest, Colo.; Black Forest, Colo.; Upper Altamaha River Watershed, Ga; Bayfield County Forrest, Wis.; Pere Marquette State Forest, Mich.; Michigan State Forest, Mich.; Manchester State Forest, S.C.; Little River State Forest, Ala.; Cary State Forest, Fla.; Bastrop State Park, Texas; and the Mississippi Alluvial Valley, Miss.

“We are grateful for the stewardship of our nation’s forests by Warranty Solutions and the example they set,” said Dan Lambe, president of the Arbor Day Foundation. “Because of their commitment forests and the lives they impact have been changed for the better across our great nation.”

Founded in 1972, the Arbor Day Foundation has grown to become the largest nonprofit membership organization dedicated to planting trees, with more than one million members, supporters, and valued partners. Their vision is to help others understand and use trees as a solution to many of the global issues we face today, including air quality, water quality, climate change, deforestation, poverty and hunger.

As one of the world's largest operating conservation foundations, the Arbor Day Foundation, through its members, partners like Warranty Solutions, and programs, educates and engages stakeholders and communities across the globe to involve themselves in its mission of planting, nurturing and celebrating trees. For more, visit arborday.org.

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Customer service and technical support are critical components of any automotive technology. And, while most dealerships have learned how to compare product features, they still don’t know how to evaluate the quality of a vendor’s support offering. Having hired many customer service representatives in the automotive industry, I’ve developed a list of five attributes that every rep should possess. You can use the same criteria when evaluating the quality of support being offered by your vendors.

1. Empathy: Nobody calls a technology support team because they are having a good day. This is the first and most important thing that support representatives need to understand. In order to successfully serve someone who is frustrated, frazzled or upset, reps have to be able to put themselves in the shoes of their clients. To successfully solve a problem that is not their own, support team members need to understand and feel what the client is actually going through.

2. Intelligence: Once we have established that a customer service candidate can demonstrate empathy, we begin to test for intelligence. Dealership technologies are complex products and our clients are trying to solve complex problems. For this reason, we look for people with both technical expertise and critical thinking skills. They need to know how our system is supposed to work but they also need to think about what a customer is trying to accomplish.

Most customer service calls come from dealership personnel who are trying to learn a process or solve a business problem and have nothing to do with a product failure. Dealerships should expect their tech vendors to provide customer support teams capable of serving both types of needs.

3. Attention to Detail: When evaluating a customer service offering, dealerships should expect representatives to be detail-oriented. Complicated problems often involve thorough research, careful documentation, and meticulous communication. Many support requests require multiple phone calls with the client and collaboration with several internal departments. Staying organized as these complex processes unfold requires a special set of skills and a serious attention to detail.

4. Winning Mindset: Some of the qualities that make great customer service representatives are not so obvious. For example, we look for people who absolutely hate to lose. We believe that the drive to win translates into a refusal to fail when solving customer problems. We also find that these personalities tend to take it personally when a customer is not satisfied with an interaction. Highly competitive service reps will go to the ends of the earth to resolve a support issue.

5. Teamwork: When you place a customer service or technical support call, you’ll probably interact with just one individual. But behind the scenes, those people are part of team. No one employee can know everything about a product or have all the knowledge necessary to solve every customer’s problem. Members of a support team rely on one another and often collaborate behind the scenes to generate solutions. It’s not enough for dealerships to have access to a single customer service representative. They should expect the backing of a full support team.

When dealerships purchase new technologies, they are also selecting support teams to go along with those technologies. When evaluating new products, most dealerships generate a list of features, but don’t know what to expect when it comes to technical support. Dealerships should demand that vendor support teams demonstrate the same attributes that technology companies look for when they hire.

Kurt Olnhausen is the vice president of operations at Dealertrack DMS. Email him at kurt.olnhausen@bobit.com.

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The revamped website features a responsive design and delivers near real-time title, salvage, and insurance total loss events. Officials said the new designed also provides a simple, user-friendly interface for creating an account or accessing the company’s vehicle history and title reports.

“At instaVIN, we are focused on simplifying vehicle history research for our customers and providing them with the most detailed and up-to-date data possible,” said instaVIN CEO Jim Irish. “Our newly enhanced vehicle history reports are easier to understand and include cautions and warning indicators for various events. New functionality and responsive design allow customers to request and view free VIN checks and buy reports on computer, tablet or any mobile device on any browser platform.”

Users also receive access to a streamlined report dashboard with new functionality. Dealer and commercial customers can now order instaVIN reports in batches up to 100 VINs. There are new filter options to deliver condensed reports, and additional HTML functionality to embed links from web ads, allowing for easier visibility for online shoppers.

Additionally, instaVIN car history reports now include an optional original factory window sticker with build data for an additional charge. The window sticker includes VIN-specific standard and factory-installed options and packages, original MSRP, EPA mileage and safety ratings, warranties, code guide information, and engine and transmission specifications. The Monroney style window stickers serve as a valuable remarketing tool for sellers and provide buyers with more transparent insight into the vehicle’s original options and cost.

The new instaVIN website is available at www.instavin.com.  

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LAWRENCEVILLE, Ga. — Black Book (a div. of Hearst Business Media)’s Used Vehicle Retention Index rose modestly in June, increasing from 112.3 in May to 113.0. On a 12-month basis, the index has dropped 4.5% from last June.

It was the second time in the past three months the index registered an increase — April’s reading showed a slight increase due to a stronger-than-expected spring selling season for used vehicles. The index’s rise in June was due in large part to falling gas prices, which helped drive the sale of used trucks, crossovers and SUVs. The downside of falling gas prices was the continued acceleration in depreciation for subcompact and compact cars, the firm noted.

“In addition to falling gas prices, which are playing a role in driving a little more interest for certain trucks today, there are generally some very good deals out there for used vehicles currently,” said Anil Goyal, senior vice president of automotive valuation and analytics for Black Book. “These are the primary reasons why we are seeing some bounce off the lows in used car retention trends.”

The Index dates back to January 2005, when Black Book published a benchmark index value of 100.0 for the market. During 2008, the index dropped 14.1%. During 2011, the index rose strongly from 113.3 to 123.0 by the end of the year, as the economy picked up steam and used-vehicle values rose higher. It continued to remain relatively stable, rising slightly until May of 2014. That’s when the index peaked 128.1.

Last year, the index fell by just 6.4%.

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DALLAS — Industry Summit attendees will step into the “House of Happiness” when award-winning F&I director Gregory Paul “G.P.” Anderson returns to F&I Think Tank to deliver “The Art of the Presentation,” event organizers confirmed this week.

Anderson, selected as a 2008 F&I Pacesetter by F&I and Showroom, will take to the stage at 11:40 a.m. on Thursday, Sept. 14. He will cover the steps to his three-products-per-deal F&I process, from the initial customer meet-and-greet and explanation of the process to his secrets to turning an objecting customer into an engaged and willing buyer.

“What made F&I Think Tank rock last year was having F&I pros like G.P. — individuals from the box — on stage sharing their secrets to success,” said Gregory Arroyo, show chair and editorial director of F&I and Showroom and Auto Dealer Today magazines. “Yes, he will entertain, but what attendees will learn is the keys to consistent production — every day, every time, without fail, no exception.

F&I Think Tank, which has partnered this year with “Mad” Marv Eleazer’s Ethical F&I Managers and F&I trainer Shaka Dyson’s F&I 20 Group ─ two of the industry’s premier F&I manager social media groups ─ is being held as part of Industry Summit 2017 (Sept. 11-14) at the Gaylord Texan Resort & Convention Center in Dallas.

Anderson’s session will touch on topics he says most training sessions overlook, including the importance of vocal intonations, pace, and conversational selling. He will also explain what the “lender of preferred rate” means to F&I producers and why it’s key to connecting with today’s rate-conscious car buyers.

The 28-year industry veteran currently serves as finance director at Park Rapids, Minn.-based Thielen Motors, one of the magazine’s 2008 F&I Pacesetters. Anderson, who also won the magazine’s 2011 F&Idol award in a landslide, also contributes to Auto Dealer Today’s monthly “Over the Curb” column.

Anderson was also selected as one of the top F&I producers in the nation by General Motors in 2012.

Anderson is a student of his craft, having studied under such legendary sales trainers as Jackie Cooper, David Lewis, Paul Cummings and Jim Ziegler. From them, he learned the importance of preparation, professionalism, and connecting with customers.

“Tony Robbins says you need to go from zero to a million miles an hour in one three-hundredth of a second — as fast as you can blink,” Anderson said. “Do you have enough skill, enough professionalism and enough stories that you can do that on a consistent basis? The key to success in the F&I office is being real. You don’t have to play all these stupid games. People want to give you their money. Money follows service. You can’t get them all, but the numbers are stacked in our favor.

“Hey, we’re doing five cars by 12 noon; they’re buying one car every five years,” he added. “The key, again, is can you sit down and have a relaxed conversation? And that’s what I’m going to delve into at F&I Think Tank.”

Registration for Industry Summit 2017 is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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New products include CX - Photo AI, which uses artificial intelligence to boost underperforming ads with optimized stock photos. Photo AI was built to create more relevant and visually appealing ads for viewers, as well as detect when ads are running without any image. CX - Amplified Mobile Pages offers dealers fast-loading, mobile-friendly VIN landing pages optimized to drive high-value conversions such as click-to-contact and click-for-price for every unit.

As global consumers rely more on smartphones for their shopping, AMP delivers faster, conversion-enhancing pages allowing dealers to make the most out of mobile, according to Len Short, founder of LotLinx.

“The auto industry is constantly evolving, particularly with the shift from traditional ad spend to digital campaigns and outreach,” Short said. “With these new consumer-oriented products, we’re taking a ‘dealer-first’ approach with solutions specifically designed for dealers who are faced with increased days-on-lot metrics. This is an exciting step forward for our company.”

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In an era in which car buyers have come to expect hyper-personalized experiences — think Netflix or Amazon, with their amazingly accurate recommendations — auto dealers have a lot of room for improvement. Many still believe that an email newsletter with the recipient’s name in the greeting counts as a personalized offer.

But we are seeing a growing cohort of dealers who are harnessing technology to provide truly individualized experiences. A key enabler for this is a technology called “machine learning,” a type of artificial intelligence. Machine learning entails finding patterns in highly complex data sets that are beyond the capability of a human brain. Marketing platforms that utilize the technology can automatically act on the consumer insights it generates.

Given customers’ need for individualized communications, machine learning is positioned to become a critical component of any successful retailer’s marketing arsenal — and it is now within reach for auto dealers.

While this may sound intimidating, the implementation of an engagement program driven by machine learning can take care of these tasks in an automated fashion with little to no manual intervention required from dealership staff. In practice, the program continuously tracks customer behavior online, merges that data with any offline sources (like CRM or DMS data) and then analyzes this aggregated data set to predict what information consumers might like to receive and what they may be shopping for.

Customer Needs Are Changing

A vehicle purchase tends to be fundamentally tied to a person’s identity and view of themselves. At the same time, changing lifestyles result in changing vehicle needs. We must remember that customers and prospects are human beings with rich, complex and ever-changing lives.

The best salespeople in the world know their customers’ likes and dislikes, their preferences, and their changing tastes. The capacity of the human brain, however, limits us from achieving this type of sales nirvana, and frequent turnover at dealerships often results in the further loss of salespeople along with their relationships.

In this environment, machine learning-enabled platforms assist the sales team by tracking the behavior of each customer, learning and memorizing their preferences, and predicting their future needs. Key capabilities include:

• Track customer behavior across the web
• Connect to the CRM, DMS, website, social channels and other data sources
• Leverage aggregated and cross-checked data to drive insights
• Drive actions and automatically direct engagement via multiple channels

By enabling dealers to easily run multistage automated campaigns, machine learning helps move prospects and customers along in the sales cycle in a personalized way. Engagement is automated depending on a recipient’s response, with predictive models choosing to send a different offer to a customer it detects shopping online for a specific model, to one who has recently clicked on a video of a new vehicle or one who might be in need of service or a new lease.

In addition, by using behavioral data to predict who may be in market, the technology can detect likely buyers and tip off the sales team to contact them before the competition.

Investing in machine learning goes beyond merely future-proofing your dealership’s marketing infrastructure. The customer’s car-buying experience will be enhanced and simplified by the added personalization and efficiency brought to it. The customer will be better equipped with relevant information at every stage of their lifecycle and the dealership staff will have a better understanding of their own customers.

This does not mean total value of the customer’s interaction with the dealership will be derived from a purely technological experience. It means this technology will bring customers to the dealership on their own terms. It will assist the dealership’s sales team in their roles as trusted advisors to the customer. If done right, blending technology and in-store professionals will deliver an amazing customer experience delivered with a human touch. 

Valerie Vallancourt is vice president of marketing for Outsell and an expert in driving revenue through dealership digital marketing. Email her at valerie.vallancourt@bobit.com. 

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Auto dealers around the country struggle to protect their valuable inventory every single day. As technology improves, so do the skills and capabilities of professional car thieves. Combined with the ineffective security solutions currently in place at most dealerships, it’s a recipe for disaster.

Security technology has come a long way. Upgrading your equipment can help you fight back against theft, vandalism, trespassing and more. Here’s how it works:

Unbiased Evidence

Dealerships can be a dangerous place for both employees and guests. Areas such as service bays and body shops have the potential to cause injury, and a good criminal can easily take advantage of this fact.

Internal theft is another common problem and one that many dealers don’t deal with correctly. Employees who casually take auto parts and materials are the main contributors to “inventory shrinkage,” and there is typically no evidence to prove the theft took place.

You can prevent frivolous lawsuits and shrinkage by installing a reliable video surveillance system that operates at all hours of the day. The key is to keep a close watch on departments most susceptible to injury claims or theft. This ensures video footage is always available if an unbiased record of events is needed.

Protection for Vulnerable Inventory

Inventory is most vulnerable at night, when your dealership is closed. Without proper security measures, thieves can easily break into vehicles and cause damage or drive away with valuable merchandise.

Many dealers hire security guards to mind the store overnight. This is a costly situation that, frankly, doesn’t seem to do much to prevent these incidents from occurring. Utilizing smart cameras that have intrusion-detection capabilities takes this burden off security guards who struggle to protect the entire property on their own. The cameras are capable of instantly detecting trespassers. When the perimeter is breached, the system sends an alert to security agents in a remote location. These agents can communicate with intruders and contact law enforcement.

Solutions such as these lower false alarms, improve inventory protection levels, and decrease the risk of injury or death to vulnerable security guards.

Custom Protection

Most dealers do little research when choosing security tools and solutions for their properties. This is a mistake. Every store has a unique set of vulnerabilities. You need a security solution that protects your high-risk zones.

Hiring an unbiased security consultant can help streamline operations and build a plan that will have a much better chance at success than a generic, one-size-fits-all approach. Work with a consultant who has no incentive to sell you equipment from a certain manufacturer. They should understand which solutions will serve your needs best.

Recent advances in security technology have the potential to greatly lower the likelihood of another crime taking place at your dealership. The key lies in creating a customized system that can grow with your business. Keeping up with innovations as they hit the market is critical to your mission to outsmart criminals and safeguard your valuable inventory. 

Jordan Lippel is chief business development officer at Elite Interactive Solutions and an expert in remote guarding and security evaluation. Email him at jordan.lippel@bobit.com.  

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Connected cars, self-driving cars, online car-buying portals, virtual-reality test drives, cars that can diagnose their own maintenance needs — all these changes and more are coming down the pipeline. You and your dealership need to be prepared. If you resist these changes until the last minute, it may be too late to adapt.

One thing’s for sure: Visionaries are changing the auto industry. When I say “visionaries,” you know the type of leader I mean: Jeff Bezos with Amazon, Steve Jobs with Apple, and Elon Musk with SpaceX and Tesla. These men aren’t just the leaders of their respective companies. They are visionaries who have transformed entire industries.

A visionary’s success stems not from finding a better way to do something, but creating an entirely new way of doing something. The sea changes they create are swift and strong. As dealers and vendors in the auto industry, we can all try to swim against the current, but, ultimately, the tide will overcome. At that point, we have but one choice: Adapt or die.

As leaders, how do we adapt our businesses to thrive in a visionary’s vision of the auto industry? The best way is to become a visionary yourself. If you begin to think, feel and act like a visionary, you will be prepared for the coming changes, rather than have to respond in a frantic attempt to keep up. If you are ready, here are a few pointers.

1. Create a Vision.

Visionaries ask big questions and create their vision from the answer. Elon Musk asked, “Why aren’t we going to Mars?” Steve Jobs asked, “Why can’t everyone have their own personal computer?”

To create a vision for your dealership, you have to ask big questions. What will the auto industry look like five years from now? What will your dealership look like in a world with self-driving cars? How will you stay competitive? Where will most of your revenue come from?

Turning a bold vision into reality can take years, so it’s important to ask these questions now.

2. Identify Your Customers’ Aggravations.

The most successful visionaries find unique ways to solve their customers’ problems. IKEA’s method of selling partially assembled furniture was not conceived as a bold innovation. It was an observation that employees made when they removed the legs from a table so it could fit it into a customer’s car. “Why should we put the legs on the table in the first place?” they asked. The obvious answer was that they shouldn’t.

Visionaries are great observers. As a leader, you must try to understand what your customers’ frustrations are. Identify the processes that make the car-buying process faster. Identify the processes that make the service experience better. What problem does your customer have that they don’t even know about? Identify it and solve it. You will create a need and a service that will vault you from mere leadership into visionary territory.

3. Be Willing to Take Risks.

Google cofounder Larry Page is one visionary who is known for taking risks. As a college student, he proposed hacking the Palm Pilot to make it do something it wasn’t supposed to do. His senior adviser told Page it couldn’t be done and encouraged him to choose a different project. Page agreed that he didn’t know if it could be done, but he tried it anyway. Guess what? Page did it and got an A+.

If you want to change the way you do business, you’re going to get a lot of pushback — especially if you have no idea whether an idea will work or not. But if you believe strongly in something, do it anyway.

Your idea may fail. You may get the “I told you so.” Don’t let that deter you. Modify your idea and try again until you find something that succeeds. Visionaries take risks, are willing to fail, and never give up.

4. Be Openminded and Curious.

Visionary leaders approach problems with openmindedness and curiosity. They are not locked into one solution. During World War II, when many conventional battle tactics failed, Winston Churchill was forced to view situations with a new perspective and try new ways of dealing with the enemy.

Every leader has moments of clarity, but they also have moments of opacity — when they don’t know what to do in a situation, for example, or when something they thought was right turned out to be wrong. When this happens, visionaries reach out to others for new ideas and new perspective.

Successful visionaries also connect and communicate with large networks of people. Staying within a closed, small network of your family, long-time friends and local community, you are not likely to be exposed to a lot of new ideas. Read, explore and network with people in other industries to gain new perspective.

5. Get Other People to Share Your Vision.

Bold visions create hope. Visionary leaders communicate their vision to others in a way that gets them excited about it. This is a critical skill to develop if you want your vision to become a reality. No visionary succeeds alone. You need your employees and other stakeholders to get on board. We must put some thought and time into how we will influence others.

Steve Jobs did an incredible job at getting people excited about Apple products. His notorious secrecy generated buzz leading up to each new product launch. His demos were legendary. This was no accident. He spent an enormous amount of time planning each new launch and meticulously thought out every detail.

When Elon Musk had a vision for the Hyperloop, he shared his thoughts on the basics of how it would work. But he was already running two companies and didn’t have time to work on specifics. So he launched a global competition for engineering students to create pods that will safely transport humans through a vacuum tube at 700 miles per hour.

If you have a bold vision for your dealership’s future, share it with your managers and employees. Acknowledge you need their input. Let them help you develop the idea, identify flaws, and take ownership of it with you. Think about how you can create excitement around your ideas. Encourage competition.

Leadership is hard. Becoming a visionary is even more difficult. Leaders are often wrapped up with the everyday details of running a business. To be a visionary requires removing yourself from some of this so you have time to research, explore, observe, brainstorm and network. But the results of your efforts will be tangible. Visionaries define where their industry is going. They are more successful than their peers who resist change until the last minute.

Mike Esposito is president and CEO of Auto/Mate Dealership Systems and an expert in dealer management system (DMS) technology. Contact him at mike.esposito@bobit.com.

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Pratt joined GWC Warranty in 2010 and shortly thereafter was named director of strategic alliances. In her previous role, Pratt pioneered new business avenues for GWC by partnering with national and regional lenders to help them increase portfolio performance by mitigating risk caused by mechanical failure. Simultaneously, her efforts have assisted dealers in securing reliable financing sources for vehicle and F&I sales. In her newly expanded role, Pratt will continue to grow existing lender partnerships while seeking out new opportunities in the financial services community, according to CEO and President Rob Glander.

“Since joining GWC, Wendy Pratt has done an exceptional job introducing GWC Warranty to countless companies by showcasing the value vehicle service contracts provide for lenders’ portfolios,” Glander said. “During her time at GWC, Wendy has become a very well-respected player in the automotive financial services community, and her continued presence in this field stands to benefit lenders, dealers and GWC alike.”

Pratt, a University of North Carolina at Greensboro graduate, has more than 12 years’ experience in the automotive and finance industries. Her track record of creating and cultivating successful partnerships earned her recognition as one of Auto Remarketing’s 2016 Trailblazers, Innovators and Disruptors, which honored automotive industry leaders who have blazed new trails in the industry with innovative ideas and solutions that disrupt the status quo and improve profitability.

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The study was essentially a trial run of Clarivoy’s Multi-Touch Attribution solution, which was designed to help dealers understand how all their digital marketing investment efforts — not just the last click or interaction — influence the car-buying journey.

The initial use of Clarivoy’s solution revealed that Google Analytics misses the cost-effective conversion value of sites such as Cars.com. For instance, on average, dealers who implemented the multitouch attribution solution saw conversions on their sites attributed to Cars.com increase by 37% with a 20% decrease in cost after two months in the trial.

The results were even more dramatic when dealers considered the conversions that occurred directly on Cars.com. The addition of Cars.com data — Cars.com leads, vehicle description pages (VDPs), and trackable walk-ins — to this multitouch attribution model allowed one dealer to identify 11,390 conversion events that happened on the Cars.com site in addition to the original 103 reported by Google Analytics.

According to Clarivoy CEO Steve White, auto dealers typically rely on Google Analytics to help them understand the impact of their advertising. However, the true value of a third-party auto site doesn’t show up in Google Analytics as it is by default set up to give all of the credit to the last click.

“Typically, what we see is a lot of third-party websites do not get the credit they deserve because in most cases the last engagement that occurs with the dealer’s website is either branded search, organic or direct traffic,” said White. “As a result, sites such as Cars.com become invisible to Google Analytics when trying to evaluate performance. Dealers needed a solution that helps them see the actual impact a partner like Cars.com really brings and the ability to compare that to their other marketing channels in one dashboard.”

To read the complete results of the Clarivoy/Cars.com study, click here.

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DALLAS — Is F&I dead? That’s the question Cox Automotive executive Jason Barrie will address at Industry Summit 2017, which is scheduled for Sept. 11–14 at the Gaylord Texan Resort & Convention Center, organizers announced this week.

To Barrie, who serves as associate vice president of market performance for Cox Automotive brands Dealertrack F&I and VinSolutions, the idea that the F&I story doesn’t have a good ending in today’s digital drive is nonsense. On Wednesday, Sept. 13, at 4:20 p.m., he will show attendees how the changing behavior of today’s customer actually makes F&I more valuable for everyone.

“This is a very touchy topic that stirs the emotions, and there’s no one more qualified and better able to address it than Jason,” said David Gesualdo, show chair and publisher of F&I and Showroom and Auto Dealer Today. “Since 2005, he has helped drive Dealertrack’s growth from a credit application portal to an enabler of sales and F&I dealership workflow. We’re excited to have him.”

Barrie has more than 12 years of automotive experience between Dealertrack and Cox Automotive, where he is now responsible for product operations, partner relations, and market analytics for VinSolutions and Dealertrack’s F&I solutions. He joined Dealertrack in 2005 from Horizon Blue Cross Blue Shield, where he served on the healthcare provider’s product marketing and ecommerce teams.

The executive began his career in 1997 at public relations firm Miller Shandwick Technologies, where he worked with industry leaders such as Compaq and Dun and Bradstreet.

At Industry Summit, Barrie will delve into recent consumer research like Cox Automotive’s 2017 Car Buyer’s Journey report, which revealed that 65% of car buyers think the car-buying process takes too long. He will explain how technology can address such consumer pain points and create a better connection between buyers and F&I.

“Thanks to online research and digital retailing tools, close to 80% of the shoppers who come to your dealership are prepared to buy — and, as a result, expect deals to get done faster. That’s great for car sales, but what about F&I product sales?” Barrie said. “Well, there’s a better way to sell F&I, and it starts with using technology to create a stronger personal connection with customers.

“Technology won’t kill F&I. It will create opportunities to add more value for shoppers, and more opportunities to improve F&I profit per vehicle retailed,” he added.  

Registration for Industry Summit 2017 is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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ElevateCare is a 5-in-1 bundle product that includes Tire and Wheel, Key/Remote Replacement, Paintless Dent Repair, Windshield Protection, and Roadside Assistance. In addition, ElevateCare also provides two options for tire and wheel: cosmetic and curb for alloy and cosmetic and curb for chrome.

“Unlike many industry offerings, Alpha Warranty Services has not private labeled Summit Protection, but created this product internally based on agent and dealer demand,” the F&I product provider stated in its press release, adding, “Alpha Warranty is built on innovation and bringing the right tools to the dealerships and agents who partner with them.”

The standalone tire-and-wheel protection is the same coverage offered in the ElevateCare bundle, both products offering six vehicle classes, including coverage for exotic vehicles.

The standalone key/remote replacement offering provides a replacement key or remote, including aftermarket, to customers that have damaged, lost or had their keys stolen.

Along with the release of Summit Protection, Alpha Warranty Services has also updated the Zoom sales portal to be an all-in-one platform for VSC, GAP and ancillary products.

For more, visit www.AlphaWarranty.com.

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Consumers interested in taking advantage of a store credit card incentive, for example, can use Text for Credit to secure that card through their mobile device — a particularly exciting innovation considering smartphone ownership is nearing 100% for adults aged 18 to 44, according to Alex Lintner, Experian’s president of consumer information services.

“Technology has brought vast improvements to consumer banking, insurance and investing services, but the credit application process has remained largely unchanged,” Lintner said. “With Text for Credit, consumers will get real-time access to credit, creating a better experience for the consumer and increased conversion for lenders and businesses.”

In an Experian survey, consumers were asked to identify their top three concerns about applying for credit or financing in a retail location. More than half (58%) cited privacy concerns, and 42% cited the length of time it takes to apply. These concerns translate to lost revenue — 12% of consumers said they have walked away from a purchase because it was taking too long to get approved for credit, while 16% have walked away because the person in front of them was applying for credit.

Additionally, 21% of consumers said they would consider purchasing a car in the next six months if they could shop credit offers and apply via mobile device quickly and securely. Seventeen percent said the same about clothing, and 15% said they’d consider purchasing a large appliance.

Text for Credit users will follow a four-step process:

1. Consumers seeking credit text a keyword such as “CREDIT” to a short code supplied by a merchant or a credit issuer, the same way some retailers now allow consumers to “text to buy.”
2. Consumers then receive a text message response that takes them to a hosted website where they can apply, review credit offers and receive an instant decision.
3. In most cases, consumers will be recognized by their device credentials, which lets them avoid filling out a lengthy credit application.
4. If approved, consumers will have immediate access to the credit via a barcode or account details sent to their device.

“Experian is taking the credit industry into the real-time economy with this innovative, convenient and confidential new way to apply for credit. For consumers, Text for Credit means no more paperwork, no more anxious minutes hoping for credit approval and dramatically reduced risk from a paper-extensive exchange of sensitive information,” Lintner said. “In fact, consumers can find out what they qualify for before they come to a dealership or a retail store, and that can translate to big sales increases.”

To see Text for Credit demonstrated on Facebook Live and Periscope July 11, click here at 9:30 a.m. PT or here at 10:00am PT.

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What does that mean? It means you should be advertising on Facebook! Here’s how it’s done:

Line Up Your Targets

If you advertise through the newspaper, TV, radio or any other traditional advertising source, you’re spending thousands of dollars to broadcast a single message to a general audience. However, there may only be a handful of people in your audience who are looking to buy a car. If they don’t see the car they’re looking for in your advertisement, they’ll probably forget about you.

Facebook allows you to target someone who lives close to your dealership and wants to buy a new SUV and tailor an ad specifically to them. You can target by automotive behavior, income level, job title, net worth or any of a number of other attributes through the use of Facebook ads.

This ability to specifically craft your message makes Facebook a goldmine for auto dealers. Let’s say “John” is a potential customer of your dealership. John has never bought from your dealership, but he’s a big car enthusiast. While looking for a new SUV, John finds your website. After browsing for a few minutes, John gets a phone call from his sister, who’s just arrived from out of town, and John goes to pick her up from the airport.

At this point, two things can happen: In the first scenario, John forgets about your dealership and, after a few weeks, he sees a great offer from a rivaling dealership. On that same visit, John decides to buy a new luxury SUV, and paid in cash. In the second, that evening, John sees another ad from you while on Facebook for the exact SUV he was looking at on your website. The next day, he purchases the SUV from your dealership, in cash.

Before you learn how to create the ad, it’s crucial to know what makes Facebook such an advertising machine. That’s where the Facebook pixel comes into play.

Get to Know the Facebook Pixel

Facebook describes the Pixel as an analytics tool that allows users to track the “actions” (e.g. viewing a specific page) its users take on your website. Using the Facebook pixel, you can, among other things:

• Track how many people your ad has reached and how engaged people are with said ad
• Show ads to people who have visited a certain page or watched one of your videos
• Create audiences of people similar to top buyers

The Facebook pixel presents a massive opportunity for car dealerships. You can use it to show someone an ad for the exact car they were looking at on your website — but on Facebook. Your ad copy could say something like “We noticed you were looking at our [insert car here]. Want to take it for a test drive?” This is known as “retargeting,” and it is very effective.

Retargeting allows you to reach people that are already familiar with your brand, which means they have already engaged with an ad from you, or they have been to your website, and have therefore exhibited interest in buying a car from you. Most of our successful campaigns come from retargeting, and I cannot stress enough how crucial this could be for your dealership.

Another powerful feature of the Facebook pixel is the ability to create Lookalike Audiences, a feature which allows you to find people similar to your existing customers. For example, if you have a list of buyers for a specific model of car, you can use that to create a Lookalike Audience and show them an ad for that exact car.

Build Your Facebook Ad

There are three core components to creating a Facebook ad: campaign, ad set, and the ad itself. Your Campaign is your objective — to create awareness, consideration or conversion. Ad set is the audience you selected to target. The ad could be a mobile, desktop, video or image.

1. Campaign: Your campaign screen should look something like this if you’re creating a campaign in Facebook’s Ad Manager:

As you can see, there are three core objective options, awareness, consideration and conversion. The objective you choose will depend on what your goal for the ad is. If you want people to come to your website to check out a new sale, then you’ll choose traffic or conversion. It is important to note that you should treat each objective differently, as Facebook will show your ads to different segments of your potential audience based on which objective you picked.

One strategy that I find effective is to run a captivating video as an ad either for the video views or engagement objective. This allows me to reach people that are likely to watch and interact with my content.

After my ad has been shown to cold traffic (people who haven’t heard of me), I run another ad to people who have watched at least 50% of my video, this time prompting them to come into the dealership for a test drive, or a similar offer. People that view this ad are much more likely to convert to my offer, because they have already engaged with my content.

2. Ad set: The ad set on the campaign is where all the targeting happens. There’s a lot happening in this section, so let’s break this down. The first option is conversion, which is only applicable to conversion campaigns.

If you’re running a conversion ad, this is where you specify what qualifies as a conversion. Examples of this would be “view content,” “lead” or any action you would like to promote. Next, choose whom you’re showing your ad to.

You will be able to modify the location, age, gender, language, interests and behaviors. If you are running a retargeting or lookalike audience campaign, this would be selectable in the “custom audience” field, as long as you have already created an audience. I recommend keeping the audience size within 25 miles.

As for age and gender, this really depends on your objective for the ad. If you’re trying to sell Ford F-150s, it’s safe to say your ads will perform better with males. Use existing auto sales data to determine what demographic will be best.

“Interest” and “behaviors” is where things get intriguing. This is where you can target people based on when they’re looking to buy a car, what make of car they’re looking to buy, and whether they’re looking to buy new or used, as we did in our previous example with the Toyota. This allows you to test multiple combinations of highly targeted ads, all for a very low upfront investment. This is truly what makes Facebook ads so powerful. Even if only one campaigns performs well, that one campaign could be responsible for hundreds of thousands of dollars in revenue.

Placements are where your ad is shown. I typically find Facebook and Instagram feeds to be the most effective. An exception to this is if I’m running a retargeting ad, in which case I’ll turn all placements on. The purpose of retargeting ads is to keep your dealership in the forefront of your prospect’s mind.

Facebook Advertising works on a bidding system, which means your daily budget dictates the amount of people your ad reaches. I start almost all of my ad sets at $5/day because I like to test many different ad sets. This allows me to minimize my investment, as some ad sets will perform much better than others and I can cut out the poorly performing ad sets quickly.

3. Ad: The ad is what your audience will actually see in the placements you have chosen. You can choose between single image, carousel, slideshow, collection and single video. I find video ads to be the most effective, because they generally result in the lowest cost per impression and are more likely to be shared.

One great ad feature is the “Use Existing Post” option, which allows you to take advantage of posts that have already racked up many likes and comments. This is great for ads because it gives the dealership credibility through social proof, increasing the click-through rate (CTR) of ads.

The key to great ads are to use a captivating piece of content, such as a video or image, coupled with engaging ad copy. However, the single most important aspect of the ad is the opening line! Without a strong hook, the effectiveness of the ad drops significantly.

To write a good hook, I like to ask a question that results in an implied “Yes” from my target audience. Couple that with good targeting, and you’ve got an irresistible offer! For example, If I use my previous example of targeting for someone looking for a new Toyota SUV, my hook might sound something like: “Want to test-drive a new Toyota RAV4?”

After the hook, a few other elements I include in every ad are scarcity, building rapport, and making an offer. Once you have put it all together, you’ll get something that looks like this:

Using only this information, you should be able to boost your dealership’s revenue through effective Facebook advertising. However, if you don’t implement these strategies properly, or at all, then you are leaving money on the table, especially since only 10% of car dealerships are utilizing Facebook. Now is definitely the time to take advantage of this massive opportunity.

Jayden Maharaj is the CEO of Axis Marketing, a company that specializes in digital marketing for small businesses and ecommerce companies. Contact him at jayden.maharaj@bobit.com.

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“The volume of transactions is up more dramatically than supply thanks to real demand from dealers and, in turn, consumers,” said Jonathan Smoke, chief economist for Cox Automotive. “Broadly speaking, the second quarter was supported by continued low unemployment and strong consumer confidence remaining near a 16-year high.”

Indicative of a stable U.S. economy, first quarter GDP growth was revised from the previous estimate of 1.2% to 1.4%. Experts predict the second quarter will likely come in stronger at a level of growth consistent with what the economy has experienced throughout this current expansion.

Despite the strength in wholesale used-vehicle prices, new-vehicle sales year to date are down 2% compared to last year. Franchised dealers have had more than four million new units in stock for the previous five months, and new-vehicle sales in June slipped 3% from last year. Except for light truck sales, which were up 4% year over year, much of the decline can be attributed to a downturn in car sales, which were down 13% year over year.

For used-vehicle pricing trends, all major car segments — excluding compact and midsize car classes — were up from a year ago, with especially strong increases in pickups and vans. Second quarter wholesale pricing for all vehicle segments included:   

• Compact cars, typically one of the weakest segments, experienced some relative strength in comparison to the midsize car class with prices down a modest 0.4%.
• Midsize cars were the weakest segment compared to last year with a 2.1% decline.
• Pick-ups and vans experienced the most significant increase of all car classes, with pick-ups climbing 7.5% vs. last year and vans following closely behind at 7.4%.
• SUVs and CUVs increased 2% from last June, slightly weaker than the overall market.
• Luxury Car values increased 1.4% over the same period last year and remain relatively weak compared to the overall market. The small gain can partially be attributed to ongoing efforts for more efficient remarketing of cars in this class.

For rental risk pricing, the average price for these units sold at auction in June was down 4% from last year, but was up 0.2% compared to May. SUVs and CUVs accounted for 32% of June rental risk sales vs. 30% last June, and the share of compact cars fell from 25% to 23%. The average miles for rental risk units was 2% below June 2016, rounding out at 40,600 miles last month — significantly less than the record-breaking 50,000-plus miles recorded in June 2015.

“The May and June Index results challenge concerns that increasing wholesale supplies from near-peak off-lease volumes and rising rental volumes would lead to rapidly declining used-car values,” said Smoke. “On the contrary, strong retail demand for recent model-year used vehicles is encouraging dealers to buy more vehicles at auction and the increased demand is more than offsetting the higher supply.”

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WASHINGTON, D.C. ─ Two years after studying it and more than a year after proposing to ban finance companies from blocking consumers from joining group lawsuits, the Consumer Financial Protection Bureau (CFPB) today issued its anticipated rule prohibiting the use of mandatory arbitration clauses in finance contracts.

According to CFPB officials, the bureau received 110,000 comments after it issued its proposed rule in May 2016 and request for public comment. The finalized rule is set to take effect 60 days following its publication in the Federal Register and applies to contracts entered into more than 180 days after that.

“Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong,” said CFPB Director Richard Cordray. “These clauses allow companies to avoid accountability by blocking group lawsuits and forcing people to go it alone or give up. Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can take action together.”

Arbitration clauses typically state that either the company or the consumer can require that disputes between them be resolved by privately appointed individuals, or arbitrators, except for individual cases brought in small claims court. The CFPB charged that finance sources use such clauses to block class action suits, which allow a few consumers to pursue relief on behalf of everyone who believes they were harmed by a company’s practices.

Almost all mandatory arbitration clauses, the CFPB further charged, force each harmed consumer to pursue individual claims against the company, no matter how many consumers are injured by the same conduct. The bureau added that consumers almost never spend the time or money to pursue formal claims when the amounts at stake are small.

That was one of the conclusions of the bureau’s report on arbitration clauses, which was released in March 2015. It also showed that at least 160 million class members were eligible for relief over the study’s five-year examination period. Settlements during that study period totaled $2.7 billion in cash, in-kind relief, and attorneys’ fees and expenses.  

The study, which also reviewed more than 1,800 consumer finance arbitration disputes ruled over a three-year period beginning in 2010 and more than 3,400 individual federal lawsuits, found that consumers were awarded less than $175,000 in damages and less than $190,000 in debt forbearance in arbitration suits vs. just less than $1 million in federal lawsuits.

But industry groups and legal insiders said not all findings in the study supported the elimination of mandatory arbitration clauses. They point to findings related class action cases where the principal purpose of seeking class relief was to pressure a settlement. According to the study, members of such class actions received either nothing or next to nothing.

The study also found that class action cases almost never make it to trial, while a significant percentage of arbitration proceedings actually resolve the disputes, the study’s critics said last year when the CFPB first proposed its ban on arbitration clauses.

“Late last year, the CFPB released a study on arbitration, which the bureau says shows that consumers are harmed by arbitration agreements as opposed to class action lawsuits. However, a careful review of the CFPB’s study demonstrates that the opposite is true …” the American Financial Services Associated stated at the time. “In 60% of class actions studied by the CFPB, consumers received no remuneration at all.

“In the 15% of cases where consumers received monetary compensation in class actions, they received an average of just $32.25, after waiting an average of 23 months,” the association added. “In contrast, consumers who prevailed in arbitration agreements, on average, received $5,389. The real winners in class action lawsuits are plaintiffs’ attorneys, who divided approximately $424 million in fees.”

In today’s announcement, the bureau highlighted another finding in its report — that three out of four consumers the bureau surveyed did not know whether their credit card agreement had an arbitration clause.

Under the new rule, companies can still include arbitration clauses, but creditors subject to the rule can’t use arbitration to stop consumers being part of a group action. The rule also includes specific language that companies will need to use if they include an arbitration clause in a new contract.

The rule also requires companies to submit to the CFPB certain records, including initial claims and counterclaims, answers to these claims and counterclaims, and awards issued in arbitration. The bureau will also collect correspondence companies receive from arbitration administrators regarding a company’s nonpayment of arbitration fees and its failure to follow the arbitrator’s fairness standards.

Bureau officials said the collected materials, which must be submitted with appropriate redactions of personal information, will allow it to better understand and monitor arbitration. They will also be published on the bureau’s website beginning in July 2019.

The new rule applies to the major markets for consumer financial products and services overseen by the bureau, including those that lend money, store money, and move or exchange money. Congress already prohibits arbitration agreements in the residential mortgage market and has done the same in many forms of credit extended to servicemembers and their families.

Exempted from the new rule are employers who offer consumer financial products or services for employees as an employment benefits; entities regulated by the Securities and Exchange Commission or the Commodity Futures Trading Commission, which have their own arbitration rules; broker-dealers and investment advisers overseen by state regulators; and state and tribal governments that have sovereign immunity from private lawsuits.

In October 2015, the bureau published an outline of the proposals under consideration and convened a Small Business Review Panel to gather feedback from small companies. The bureau also sought comments from the public, consumer groups, industry, and other interested parties before continuing with the rulemaking, bureau officials noted.

“Originally, arbitration was primarily used for disagreements between two businesses. But over the last quarter century or so, companies started adding arbitration clauses to their consumer contracts, specifically to block group lawsuits and avoid legal accountability,” Cordray said “… Today’s rule prohibits banks and other consumer financial companies from including mandatory arbitration clauses that block group lawsuits in any new contracts after the compliance date.

“… By restoring the ability of consumers to file or join group lawsuits, the rule gives companies more incentive to comply with the law,” he added. “And the deterrent effect of such cases can more broadly influence the business practices of other companies as well.”

A spokesperson for the National Automobile Dealers Association said the trade group is reviewing the rule. The National Independent Automobile Dealers Association, however, didn't hide its disappointment in a statement issued today, noting that the rule will force small business to bear the additional cost of defending class action litigation — a cost that "will ultimately be borne by consumers."

"We are disappointed that the bureau has decided to adopt this ill-conceived rule," said NIADA CEO Steve Jordan, adding that the association will urge lawmakers to overturn the rule when Congress considers CFPB reform. "Today's action shows the CFPB has decided to put the interests of class action lawyers above those of the very consumers the bureau is mandated to protect.

"Arbitration has proven to be a faster, less expensive and more effective means of resolving consumers disputes than class-action lawsuits," he continued. "And consumers who receive an award in arbitration almost always receive more than they would in a class-action lawsuit, a point proven by the CFPB's own research."

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“The fact that Helion is among the top MSPs in the world demonstrates the degree to which the automotive industry recognizes and embraces the importance of technology to current and future business operations,” said Erik Nachbahr, founder and president of Helion Automotive Technologies. “In the last 10 years, the auto industry has been completely transformed by technology, and there is still much more change ahead.”

Helion’s offerings include end-to-end management of hardware infrastructure, software applications support, help desk support, data and cybersecurity solutions, communications and more. The company claims more than 650 auto dealership clients and 28,000 end users, an average of 300 help desk calls per day, and the resolution of more than 6,000 IT issues per month.

To read MSPmentor’s complete list, click here.

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A “remote-control” tool within VisionMenu’s vSignature module can display sales tools, multimedia presentations, menus, disclosures, product forms, laser forms and more. F&I by Design presentations can be facilitated via the mobile device of the user’s choice or remotely, with a “one-click” connection to their customer’s mobile phone, according to the company.

VisionMenu’s electronic platform allows for erating, econtracting, and esigning. Provider rates are electronically retrieved simultaneously, econtracted direct to the provider’s portal, and then esigned through the vSignature module. This patent-pending technology was designed to allow any PDF to be signed by the customer as the F&I manager points and clicks to direct them through the signing process.

VisionMenu has a certified interface with Reynolds and Reynolds, CDK, Dealertrack, Dealerbuilt, Automate and Autosoft for both VisionMenu and VisionReport products, in addition to the roughly 80 direct integrations with product providers claimed by the company.

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O’Loughlin is the director of compliance for Reynolds and Reynolds and a familiar face at the Summit series of events, for which organizers have relied on his experience as an attorney, compliance expert and former regulator with the Florida attorney general office’s Economic Crimes Section.

“We have in Terry O’Loughlin an expert who has seen compliance issues from both sides of the fence,” said David Gesualdo, show chair and publisher of Auto Dealer Today and F&I and Showroom. “His appearance on the Compliance Summit stage is a credit to our event.”

O’Loughlin has been a steadfast supporter and regularly featured speaker at Compliance Summit, which he believes offers a unique opportunity for dealers. He referenced “The Impact of Federal Regulation on Franchised Automobile Dealerships,” a 2014 NADA report that found the average dealer spends $183,000 on federal regulatory compliance efforts per year, a staggering cost which too few dealers fully comprehend.

“Dealers have to have more of a hands-on approach. They have to engage to some degree to know and understand the issues,” O’Loughlin said. “If they don’t occasionally participate in conferences like this, they won’t be able to intelligently converse with the people in their employ who work with these issues daily.”

Registration for Industry Summit 2017, which includes Compliance Summit and Automotive Compliance Education (ACE) certification as well as The Best Training Day Ever, F&I Think Tank and Special Finance Conference, is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount.

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DALLAS — Organizers of the annual P&A Leadership Summit have announced that Terrence J. O’Loughlin Esq. will deliver the opening luncheon keynote at the 2017 event, which will be held Sept. 12–13 at the Gaylord Texan Resort & Convention Center in Dallas. PALS, Compliance Summit and the inaugural Lender Summit will be co-located with the annual Industry Summit; O’Loughlin will address all three groups.

“Terry O’Loughlin’s legal acumen is beyond reproach, and his address will inject a much-needed dose of compliance education into the PALS agenda,” said David Gesualdo, show chair and publisher of P&A magazine. “Executives in the F&I product provider and administrator segment are keenly interested in regulatory issues, and few can address them as confidently and competently as Terry.”

O’Loughlin currently serves as director of compliance for Reynolds and Reynolds. He joined the company in 2006 after serving as a regulator in the Economic Crimes Section in the office of Florida’s state attorney general. He is a prolific writer and speaker and a fixture at the Summit series of events, for which he has tackled compliance issues from the perspective of dealers, agents, product providers and more.

Although the basic tenets of regulatory compliance apply to any person or company involved in the auto retail and finance industry, O’Loughlin said he will tailor his address to educate and inform the PALS crowd.

“Regulations and court cases have given us models upon which we can rely to determine what we must do, at a minimum, to comply with the law,” O’Loughlin said. “At P&A Leadership Summit, we will discuss the inherent risks and covert concerns attendees need to be apprised of and how to weave those requirements into their business plans.”

Registration for Industry Summit 2017 is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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The average, which is up 6.8% from five years ago, was recorded during the same month the average amount financed registered its biggest uptick in 2017. It rose by $631 from May to $30,945. Also setting a new mark for the year was the average monthly payment, which rose from $510 in May to $517.

"Stretching out loan terms to secure a monthly payment they're comfortable with is becoming buyers' go-to way to get the cars they want, equipped the way they want them," said Edmunds Executive Director of Industry Analysis Jessica Caldwell. "It's financially risky, leaving borrowers exposed to being upside down on their vehicles for a large chunk of their loans, but it's also a sign that consumers are still confident enough in the economy to spend more on their vehicles and commit to paying for them longer."

Edmunds also reported that the average APR dipped just below 5% for the first time since February, averaging 4.96% in June. The APR has increased 5.7% from a year ago and 13.6% from five years ago.

On Monday, Kelley Blue Book reported that June’s average transaction price grew by $511 from a year ago to $34,442, which was slower than normal for the month of June. The average, however, remained relatively flat with May.

“Transaction prices grew more slowly than normal in June, increasing less than 2 percent,” said Kelley Blue Book analyst Tim Fleming. “As the industry enters a ‘post-peak’ environment for new-car sales, more pressure will be placed on transaction prices.”

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HERNDON, Va. — VW Credit Inc. (VCI) today announced it is making an equity investment in automotive fintech firm AutoGravity, pending customary regulatory approvals. According to company officials, the strategic investment supports the captive’s goal to digitize the customer financing process.

The announcement means finance options from Volkswagen Credit are now available to the more than 400,000 consumers who have downloaded the AutoGravity car-shopping and financing mobile app. Additionally, the captive has launched the Volkswagen Credit smartphone app, powered by proprietary AutoGravity technology and available for iOS and Android.

“Customers are becoming more demanding of mobile technology and the world of auto financing is no exception,” said VW Credit President and CEO Horst Meima. “We are ready to become a leader in shaping this part of the industry and believe that AutoGravity can help get us there.”

Through investment and partnership, according to officials, VW Credit has positioned itself to realize the full potential of AutoGravity's technology. Volkswagen dealers benefit from a new source of potential car buyers.

Based in Irvine, Calif., AutoGravity, which appeared on the cover of F&I and Showroom's January 2017 issue, offers car buyers across the U.S. the ability to obtain up to four personalized financing offers on the vehicle of their choice. Designed with state-of-the-art security, AutoGravity protects consumers’ information with advanced bank-level encryption and proprietary data security technologies, ensuring sensitive information is processed securely.

“Mobile technology is a game changer for consumers, dealers and lenders. We have pioneered a digital experience that saves time and improves satisfaction for all parties through a device we are intimately familiar with — the smartphone.” said Andy Hinrichs, CEO at AutoGravity. “AutoGravity has experienced substantial growth since our first app hit the marketplace in the summer of 2016. This investment will help us accelerate in the face of rapidly growing consumer and industry demand.”

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NORCROSS, Ga. — Premier Chevrolet Buick GMC has been selected to be the first dealership in West Virginia able to certify its pre-owned vehicles with the exclusive Motor Trend Certified designation. According to officials, Motor Trend Certified vehicles are vigorously inspected, upgraded, and backed by a Motor Trend Certified seal of approval, plus comprehensive vehicle protection from EasyCare.

Motor Trend Certified Dealers are carefully selected and appointed based on their focus on quality and a positive customer experience. They must have a history of excellent customer reviews and outstanding service. Motor Trend certification allows Premier Chevrolet Buick GMC to offer Motor Trend Certified Pre-Owned vehicles and Motor Trend Certified Service in the Morgantown area.

"Premier Chevrolet Buick GMC is excited to be awarded with West Virginia's first Motor Trend Certified dealership,” said Dealer John Cognac. “We look forward to our partnership with MOTOR TREND to provide top-quality vehicles to the people in and around Morgantown.”

Steve Richards, vice president of the Motor Trend Certified Program driven by EasyCare, added:  “Premier Chevrolet Buick GMC’s strong commitment to Morgantown area consumers made them a natural choice to be West Virginia’s first MOTOR TREND Certified dealer.”

Premier Chevrolet began offering Motor Trend Certified vehicles in May 2017.

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I once again find myself in a reflective mood. Been doing that a lot lately. People keep telling me the industry is changing, and the disruptors keep taking shots at the dealers and traditional processes.

At heart, I am a car guy. But if the truth be known, I still reminisce about the magical days when I was a celebrity rock jock in the ’60s and ’70s. I wouldn’t have missed those times for anything in the world. In those days, being a disc jockey at a major rock station was the coolest job in the world.

I think this mood crept over me last week when Gregg Allman died. What affected me most was that he was my age, and I knew him and his brother Duane before they were famous. I met the Allmans in 1969. I was a DJ and they were playing at Jacksonville nightclubs, calling themselves “The Second Coming.” As a rock jock, I had the opportunity to meet a lot of the legendary groups of the day. My biggest regret is that I never got to meet the Beatles or even see them perform. I was fortunate enough to have had several lengthy conversations with Elvis.

In 1970, shortly after the Fab Four disbanded, George Harrison released “All Things Must Pass.” Produced by Phil Spector, the triple album featured Bob Dylan, Eric Clapton, Ringo Starr, Billy Preston and a dozen other music legends of the day. In the liner notes, Harrison wrote, “All things must pass, but only for them to be born again.”

Last month, in this magazine — and in numerous speeches, blogs and articles I’ve written and performed — I talked about all the external forces and disruptors that are planning, scheming and orchestrating the automobile dealer apocalypse. Make no mistake about it, we are under attack on many fronts, and it appears our enemies are winning.

There are mass minions of absurdity chasing the millennial mythology and screaming they are the champions of the customer experience for the greater good of the industry and, presumably, of all mankind. Truthfully, these pompous pious frauds make me want to heave. It’s about the money, pure and simple.

Carvana Stock Tanks

I’ve written extensively about Carvana, another classic disruptor out to assassinate dealers with their “customer-friendly” approach and vending machines that spit out cars when you insert some kind of bogus coin into a slot. Carvana’s business model is to deliver the cars to the consumers under the tagline “That didn’t suck. In fact, I liked it!”

Their commercials go out of their way to portray car dealers as crooks. They say millennials are tired of your crap and won’t do business with dealers if you don’t change your process. How many times, from how many sources, have we heard that theme?

Well, let’s take a look at who the crooks really are!

A recent Bloomberg article about Carvana dated June 6 is titled “Cars in Vending Machines, a Fading IPO, and an Ex-Con Owner.” Wow!

Let’s start with the part about the fading IPO. Carvana had a rough first day in the public markets. They priced their stock at $15 dollars per share, a figure ordinarily designed to show a substantial increase on Day One to create what is known in trading circles as “pop.” Well, it didn’t. Instead, it burst, ending the day at $11.10 per share. Within just a couple of days, Carvana stock bottomed out at $8.72. In fairness, the stock has since rebounded, closing as high as $13 per share at press time — still a serious dump after opening at $15, especially since the market is soaring otherwise. In other words, this is, so far, a $225 million pile of crap.

Before they even went public, Carvana raised $460 million and burned through so much cash so fast that they were down to their last $39 million before the IPO. Even with the infusion of investors, some analysts are saying they are good for another year and a half before they go belly-up — sort of like their ill-fated competitor, Beepi, which bit the big one earlier this year after blowing through $150 million.

I despise Yelp, but I looked at Carvana reviews anyway just to see what was there. Lo and behold, there are some really stinky reviews on Yelp and some of the other rating services. What struck me as strange was that all the reviews were either five stars (the best rating) or one or two stars (the worst) That struck me as perhaps a little too convenient.

Nevertheless, Wall Street is giving Carvana a “buy” rating. That sounds great until you realize nine out of 10 of those analysts appear to be with companies that underwrote the IPO. In other words, maybe they have skin in the game.

Then comes that really disturbing part of the Bloomberg headline that said something about an ex-con owner. As a matter of fact, it might have been correct to say several ex-con owners.

Remember that Carvana is a spinoff of DriveTime Automotive Group, which is privately owned; the majority share owner of DriveTime and Carvana is Ernest Garcia II. His son, Ernie Garcia III, is the CEO of Carvana. Garcia’s partner, Raymond Fidel, is the CEO of DriveTime.

Bloomberg (and subsequently several other publications) has since come out with the background story that Ernie Garcia II and Raymond Fidel were convicted of bank fraud and securities fraud in the early ’90s in the famous Charles Keating/California Thrift Lincoln Savings and Loan Association scandals that rocked the national economy. Garcia and Fidel pled guilty and exchanged testimony against Keating and others for reduced sentences of three years’ probation each.

There are no laws requiring that the records and past of the company principals be disclosed in an IPO. But I feel there certainly is a moral and ethical issue when you fail to inform the people buying your stock about your executives’ criminal history. The Garcias hold 97% of Carvana voting stock. I wonder if knowing that the controlling shareholder and operator was convicted of securities fraud in one of the biggest scandals in U.S. history would have affected the decision to invest.

To better understand Carvana’s dedication to the customer experience, you just need to look at DriveTime. They are deep into subprime. They make most of their money from finance. They uniquely lay off a lot of their paper to third parties rather than carry all of it on their own books. According to what I’ve read, DriveTime had to pay $8 million to settle a Consumer Financial Protection Bureau charge that DriveTime’s hundreds of collection agents used heavy-handed, abusive tactics, and that 46% of their finance customers were delinquent. Of course, I wasn’t there, but does anybody besides me think that sounds sleazy?

Regardless, these people are passing themselves off as the customer-friendly, great-experience alternative to the dirty rotten car people.

Derailing the Seoul Train

Just when you thought the Germans and the French had cornered the market on corporate arrogance, South Korea just lapped the track and passed them all. For years, I’ve been a cheerleader of the Hyundai and Kia product. As a matter of fact, I’ve written articles praising Kia as one of the most dealer-friendly franchises.

The leadership team in Seoul is another story. They have lopped off more heads than the Red Queen in “Alice in Wonderland.” They fired their U.S. CEO, Dave Zuchowski, back in December. He was just another in a string of superstar executives the Koreans burned through. It’s almost ask if they are only looking to hire screw-ups. They haven’t yet caught on that they need only look in the mirror.

Now, Derrick Hatami, who served as Hyundai’s stateside sales chief, has departed unexpectedly. Like most of the industry, Hyundai experienced a brutal May. Their U.S. sales dropped more than 18%, down to 58,259 units. Again, May was a down month for everybody, and as I have repeatedly predicted, it’s not going to get better anytime soon.

Hatami is a super competent manager. He was immediately snapped up as the new head of U.S. sales and marketing for Volkswagen America. Following his departure, I sense a strong undercurrent of turmoil and chaos in the Hyundai ranks. That’s to say nothing of the deeper problems the manufacturer has ignored.

First of all, I have written and spoken repeatedly about Hyundai’s Genesis marque. I predicted Genesis was going to be spun off as a separate luxury brand five years ago or more. I remember when former Hyundai CEO John Krafcik told me flat out that was never going to happen. I told him it definitely was, and I also said it was a bad idea. They finally made it official in late 2015.

There was a time when Hyundai and Kia could have owned the market. Their quality and price point could not be matched. Honda, Nissan and Toyota were on the defensive. That is when Hyundai should have, could have, might have moved to crush their competitors and permanently become a driving force. Genesis was a distraction. The reason they are suffering now is lowered quality, the wrong product, and overproduction.

When the market swung from fuel-sippers back to big pickups and SUVs, Hyundai bucked the trend and focused on breaking into the luxury and near-luxury markets. With gasoline prices low and stabilized, the public has moved on. Heck, even Honda came out with that wimpy Ridgeline “pickup.” (Hiring Chuck Norris to appear in their commercials couldn’t put lipstick on that pig.)

But Hyundai charged ahead and launched the Genesis. They got ahead of themselves by going after established brands like Audi, BMW, Lexus and Mercedes-Benz with a $50,000 to $80,000 price tag. The launch wasn’t a total failure, but they’re still trying to turn it into one. They are running the plants at capacity, producing way too many units, setting unrealistic sales numbers, and — from what I hear — beating up dealers who fail to meet them.

Then there’s the engine problems. … Oh, I’m sorry, was that supposed to be a secret? Is it true they’ve even replaced defective engines with defective engines? Is it really a casting problem as I have been told? How many dealers are holding cars for engine swaps?

And now there’s even a government investigation alleging that, perhaps, Hyundai and Kia were too slow to acknowledge defects and institute “public recalls.” (Do they mean as opposed to secret recalls? I thought only the Japanese manufacturers did those.)

I’m told they recalled 470,000 engines in 2015, and now there’s another 1.2 million engines under the new recall. The supposed problem is engine failure caused by sand in the casting of the blocks. The article in the Detroit press just said it was “debris” from the plant. Whether it’s sand, debris or something else, it appears some kind of crap has contaminated these engines during manufacture.

Hyundai and Kia have benefited from the work of some of the brightest and the best top management in the U.S. market. If I were a top OEM executive, that is the last place I’d want to be. They have systematically abused and even humiliated some really great managers. I suspect they’re having some difficulty finding new meat.

That’s Amazing!

I just wrote about this in last month’s article, and now The Detroit News has a story about the ripple effect of driverless cars throughout the U.S. economy.

I tried really hard not to write about autonomous vehicles this month, but that’s all there is in the industry news right now. Every vendor, manufacturer and talking head is droning on about driverless cars. It seems like everybody wants one, except the consumers.

This past Saturday, I was a phone-in guest on a Dallas local radio talk show. The scheduled topic was (you guessed it) “Autonomous Cars and Carvana.” I was in my groove. It was classic Ziegler. The hosts were laughing so hard I could picture the tears running down their faces.

The TDN article said exactly what I wrote about last month. They predicted that autonomous cars will be a $7 trillion industry. I didn’t have a number on my article, but, as I said then, there will be a lot of ancillary products, services and new infrastructure associated with converting the entire driving fleet on the roads to autonomous vehicles.

You didn’t really think they were going to allow you to keep human-operated vehicles on the road once they reached saturation with the new technology, did you? Silly dealer! Your old self-operated vehicles will be obsolete museum pieces. They may even be illegal to operate on public roads.

This entire clamor to get to self-driving cars is about the money. Oh, I almost forgot, they also plan to eliminate dealerships in the process. The articles I’ve read all talk about ridesharing and Uber-type fleets; the most recent wave of everything I’ve seen says private ownership of vehicles is coming to an end.

As a matter of fact, here comes Cox Automotive developing a vehicle subscription service allegedly to allow consumers to book available vehicles from a dealer’s inventory and drive it for a while without buying it. But I’m sure Cox is doing this for the good of the dealers.

Put a Positive Spin on It

Remember when Toyota kept trying to make everyone believe Scion was a millennial car, even when they couldn’t get millennials to buy them? It would have been too embarrassing to admit it was a cheap, funny-looking brand driven by seniors, and their entire experiment was a dismal failure based on false premises.

Even when they finally discontinued Scion, they still announced it was a great success story. Of course, we all saw through that and laughed at the inane claims they made.

Now we’ve got one full year behind the Lexus Plus no-haggle pricing program. The program is a monumental failure. Dealers don’t want it, the public doesn’t want it, and the manufacturer doesn’t get it. The dealers that went on the program want off because they’re getting creamed. It doesn’t work in a competitive market and these factory guys (and gals) don’t get reality. They want the entire transaction done by one sales representative, including finance, without negotiation. That ain’t gonna happen.

First of all, they were expecting dealers to sign up in massive numbers. They didn’t. Why, you ask? Because high-end buyers are some of the toughest hard-core negotiators on the planet. The internet has expanded your market area to most of the country, so you’re competing with everybody.

No-haggle doesn’t work, particularly in the highline segment, because those customers don’t want it. The article I read said only 13 dealers are signed up for it out of 237 Lexus dealers in the U.S. Of course, in their usual naïve, clue-impaired way, Lexus execs are saying, “This is fine. Smaller classes mean more individualized training.” What they really should be saying is, “This crap isn’t working and it looks like it isn’t going to work. Let’s scrap it and try to find a productive way to spend our time and money.”

I’m a Little Worried About Ford

Shake-ups in top management with the car manufacturers is commonplace. The higher up your position, the thinner the ice. Well, last week, Ford Motor Co. replaced their president and CEO, Mark Fields, with Jim Hackett, who previously led the factory’s Ford Smart Mobility division.

I first met Mark Fields back in 2008 when Alan Mullaly was CEO. Personally, I really like the guy. I know a lot of Ford dealers were not in love with him. Can’t say I agreed with everything he did or said, but personally, aside from business, I could talk to the man and he listened.

When Mullaly ran the show, I could always get him on the phone to discuss dealer concerns and issues as I saw them. Not that I could ever change his mind, but he did listen. He was exceptional at personal relations. I would say the same for Fields as well as Mark LeNeve. In the coming months, maybe I can establish some kind of a relationship with Hackett.

Like George Harrison said 45 years ago, “All Things Must Pass.” There’s a lot of people, manufacturers and vendors taking shots at the car dealers. These vendors are not your friends. Their goal is thinly disguised to eliminate you, eradicate you, and take you down as they pillage your profits for their own.

Their game plan is to tarnish our good name. They want to create distrust that will drive a wedge between us and the public. In case you haven’t noticed, it’s a war. Your future is hanging in the balance. At this point, I do not see the NADA doing much more than limping off of the battlefield bruised and wounded. If the future is what they say it’ll be, we won’t be part of it, and I believe that will be a sad day for consumers.

My wife, Debbie, and I just returned from a Caribbean cruise. After traveling 200 days a year on business for the last 25 years, in and out of dealerships, speeches and seminars, it was really nice to take a full seven days on a real vacation. Of course, I was going nuts without a phone in my ear and a keyboard in front of me. I have been threatening to slow it down and this is the first attempt to see what it feels like. Well, I have to say, it didn’t suck. In fact, I liked it! 

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Death, we’re told, and taxes are the only sure things in life. The big difference, of course, is that no one is debating revisions to the laws of death. But tax reform is a common theme when political administrations change. The Trump administration, assisted by Republican majorities in both houses of Congress, has promised tax reform. Some sort of change is likely this year. What kind of changes should we expect? And what kind of changes should dealers support?

From the myriad of possibilities, this article will focus on three: corporate tax rate, capital investment deductibility, and estate taxes.

Corporate Taxation

With a few publicly traded exceptions, car dealerships are small businesses. Per NADA, the average dealership has around 70 employees. Since the Great Recession, small businesses created 67% of all new jobs in the U.S. So what’s good for small businesses (read: “dealerships”) should be good for the U.S. economy as a whole.

And what do small businesses need most? According to Business.com, cash flow and access to capital are two of the greatest needs. Publicly traded dealer groups have, by definition, access to capital through the stock markets. The majority of dealers do not. Access to capital, in itself, softens cash flow constipation and fuels growth.

Here (drum roll, please …) is where tax policy comes into play. Every dollar a dealership has to pay in taxes is one less dollar the dealer can use to manage cash flow or invest back into the business, creating jobs and generating profit. And right now, the American corporate tax rate is wholly noncompetitive.

The chart on this page isn’t entirely accurate. The United States does not have the highest corporate tax rate in the world. We have the third highest tax rate in the world, just behind Puerto Rico (39%) and the United Arab Emirates (55%). Still wondering why IT and healthcare companies want to relocate to Ireland (12%)?

President Trump has proposed a corporate tax rate of 15%, which would move the U.S. from the worst corporate tax rate of any major country (no offense, Puerto Rico and UAE), to one of the more favorable. (The worldwide average corporate tax rate is 22.5%.) To put this in more concrete terms, would Apple really have moved 6,000 jobs to Ireland if the tax differential were only 3% instead of 26%?

In even more concrete terms, the average domestic franchised new car dealership had pre-tax earnings of $1,235,709 in 2016 (thank you, NADA). For those dealerships that are C-corporations, a 38% tax rate creates a tax bill of $469,569. A 15% tax rate would result in a tax bill of $185,356. Know any dealers who could profitably invest an extra $284,213?

Capital Investment Deductibility

Lowering the corporate tax rate will make America a more attractive place to do business, but that’s only one piece of the puzzle. Another important piece is the deductibility of capital investments.

Currently, businesses are allowed to depreciate the cost of capital investments. Depreciation is the deduction of a portion of the cost of an asset over time. The period of time depends on the type of investment, and there are various methods of calculating depreciation (straight-line, sum-of-the-year’s digits, double-declining balance, and so on). It’s complicated, but the preference for business owners is to depreciate the expense as quickly as possible.

Then there’s expensing. Expensing an asset means to write off its entire cost in the year the investment was made. This has the effect of lowering your tax liability. Expensing incentivizes investment and improvement.

For example, say an OEM wants Average Dealership (the one with taxable income of $1,235,709) to invest $1,000,000 in showroom enhancements. Average Dealer agrees and makes the investment. Let’s say that under current depreciation rules, Average Dealer may deduct 20% of that investment every year for five years. (Again, the actual depreciation schedule varies according to the nature of the asset, so I’m making this up.) That means Average Dealer may reduce her taxable income from $1,235,709 to $1,035,709, and her tax bill from $469,569 to $393,569 — a $76,000 savings.

If Average Dealer could have expensed the entire $1,000,000 cost in the year it was incurred, however, her taxable income would have dropped to $235,709 and her tax bill to $89,569 — a savings of $380,000. Under which scenario is Average Dealer more likely to make the investment? And by making the investment, employing architects, carpenters, masons, concrete finishers, electricians, painters and the occasional lawyer, all of whom will pay tax on their incomes arising from that investment?

While all of this sounds great, please note that this change to depreciation rules is not an announced part of the Trump tax plan as of the date I write this. But the funny thing about the tax policy genie is that, once he’s out of the bottle, no one can predict where he’ll go. All dealers can do is hope … and write their congressmen.

Estate Tax

Trump wishes to repeal of the “death tax,” as estate taxes are commonly called by their opponents. There is something vile about the very concept of estate taxes. A dealer can work hard all his life, pay taxes on every dime of income he ever earns, and upon his death it all gets taxed again — just because he died.

The reality is a little more nuanced. Under today’s estate tax rules, when a dealer (or anyone else, for that matter) dies, he may leave an unlimited amount to his spouse or a charity. This provides for the widow — a good thing — and kicks the estate tax can down the road until the widow dies.

As soon as the Grim Reaper leaves, the Tax Man cometh. Under current estate tax law, any asset that is part of your estate receives a new “stepped-up basis.” That means that, for capital gains purposes, the value of the asset is not what the decedent (the legal term for “dead guy”) paid for it, but its value on the date of the decedent’s death. Thus, a share of stock that cost $1 when the decedent bought it and is worth $10 when he dies, goes to any beneficiary — not just a spouse — with a $10 basis. This can take a big chunk out of any tax bill if and when that stock is sold for more than $10.

In any event, the first $5,490,000 (adjusted annually for inflation) of the estate is exempt, and the widow has an additional $5,490,000 exemption. In plain English, this means that — with appropriate planning — a couple can exempt the first $10,980,000 from taxation. The rest will be assessed estate tax at the rate of 40%.

In other words, my kids will not need to worry about estate taxes. In fact, the Tax Policy Center states that only 0.019% of all decedents pay any estate tax. That’s one in 517 decedents, for those of you without a calculator. But with current dealership valuations, reinsurance accounts, and the price of real estate, it is not unlikely for many Average Dealers to leave estates above the exempt amount. Plus, there’s Warren Buffett and Roger Penske. Just sayin’.

How likely is the type of reform we discussed above? If reason rules, very likely. This is because, at least with respect to the corporate tax rate, the Trump proposal may wind up looking very much like what his predecessor’s proposed revision to the corporate tax rate looked like. Recall that Obama proposed a reduction of the corporate tax rate to 28%, and a tax on American manufacturers of 25%. Even as I write this, the rhetoric out of the West Wing suggests the actual tax rate may fall in the 15% to 20% range, which, in Beltway-ese, means “somewhere north of 20%.”

Why the upward tendency? For Trump’s tax reform to be “revenue-neutral,” and therefore able to be passed with a simple majority in the Senate, a repeal of Obamacare will be necessary. If that is not fully repealed, revenue-neutrality of the corporate tax rate at 15% simply isn’t possible. There are a lot of ingredients in play at the sausage factory.

Still, with a Republican-controlled House, Senate, and White House, there is every reason to believe the federal tax code will change in 2017. Whether or not those changes will include the three we discussed here remains to be seen. But regardless of which changes actually get made, they are likely to benefit small businesses — like dealerships — and their owners.

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. Email him at jim.ganther@bobit.com.

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NORCROSS, Ga. ─ Paul Miller Auto Outlet was selected to be the only dealership in Lexington, Ky., able to certify its pre-owned vehicles with the exclusive Motor Trend Certified designation. According to company officials, Motor Trend Certified Vehicles meet the highest standards in the pre-owned market, with every vehicle vigorously inspected, upgraded, and backed by a Motor Trend Certified seal of approval and comprehensive vehicle protection from EasyCare.

Motor Trend Certified Dealers are carefully selected and appointed based on their focus on quality and a positive customer experience, according to EasyCare. They must have a history of excellent customer reviews and outstanding service. Motor Trend certification allows Paul Miller Auto Outlet to offer Motor Trend certified pre-owned vehicles and Motor Trend certified service in the Lexington area.

"We're thrilled to partner with Motor Trend to launch the Paul Miller Auto Outlet Motor Trend Certified program,” said JP Miller, Dealer. “We've spent more than 60 years focusing on customer service and satisfaction, and this program will allow us to provide our customers with even more peace of mind and confidence in their pre-owned vehicle.”

Steve Richards, vice president of the MOTOR TREND Certified Program driven by EasyCare, added: “Paul Miller Auto Outlet’s six decades-strong commitment to Lexington area consumers made them a natural choice to be named as a MOTOR TREND Certified dealer.”

Paul Miller Auto Outlet began offering Motor Trend Certified vehicles in May 2017.

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ALEXANDRIA, Va. ─ The nation’s 9,600 international nameplate franchises registered their fourth straight sales dip in June, but dealers remain satisfied with what they view as a healthy market, according to the American International Automobile Dealers Association (AIADA).

International auto sales in the United States totaled 816,332 units in June, down 31,936 units from May and 5,455 from June 2016. The seasonally adjusted annual rate (SAAR), according to AutoData Corp., was 16.51 million, down from 16.80 million in June 2016.

“Dealers are feeling confident about the second half of 2017,” said AIADA President Cody Lusk. “In this healthy but flat market, they are focusing on the basics ─ excellent customer service, competitive pricing, and great products.”

Asian brands occupied 46% of June’s market, down from 47% in May and ahead of the 44.6% share posted by domestic nameplates. Overall, Asian nameplate dealers sold 678,171 light vehicles in June, a 1.5% decline from a year ago.

European brands sold 138,161 units last month, up from 134,006 in May and 133,370 units in the year-ago period. European brands occupied 9.4% of the U.S. market last month, up from 8.8% in the year-ago period.

As for consumer preference, trucks and SUVs continued to lead the way, with sales of cars falling 13.2% from a year ago in June. In fact, six of the month’s top-selling vehicles fell into the truck or SUV/crossover categories. The Ford F-Series took top honors, following by the Chevrolet Silverado and Ram pickups.

In fourth place was the Nissan Rogue, which displaced the Toyota RAV4 as the most popular crossover for the month. The RAV4 fell into fifth place, while the Chevrolet Equinox fell into the No. 10 spot.

As for cars, even models that made June’s Top 10 sellers list still experienced a decline in overall sales. The Honda Civic, for instance, was the most popular car for the month, taking sixth place. However, sales were down 2.8% from a year ago. The Toyota Camry finished in eighth place with sales down 9.5%, while the Toyota Corolla finished at No. 9. Despite recording a 4.9% sales decline.

Prices and profits remain high, according to the AIADA, with the average vehicle in June selling for a record $31,720.

By brand, Infiniti led the way with an 11% sales improvement from a year ago, while Subaru was up 11.7%. Volkswagen registered a 15% sales increase from last year’s depressed numbers.

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DALLAS — Organizers of the annual Industry Summit and P&A Leadership Summit have announced that subprime auto finance expert Greg Goebel will serve as the evening keynote speaker for this year’s event. Both events will be held in September at the Gaylord Texan Resort & Convention Center in Dallas, and Goebel will address both groups.

“Greg Goebel brings a unique and highly informed perspective to our stage, and we anticipate a full room for his presentation,” said David Gesualdo, show chair and publisher of F&I and Showroom and P&A magazines. “His constant, detailed monitoring and analysis of the special finance segment will prove invaluable to our group.”

Goebel’s address will begin at 5:05 p.m. on Tuesday, Sept. 12. As the CEO of DealerStrong, a prolific writer and speaker, and the industry’s leading special finance trainer and consultant, he is expected to deliver insights and analysis on the state of the auto finance industry and U.S. economy. He is also expected to release his highly anticipated Special Finance Benchmarks, an annual report based on data contributed by dealers nationwide.

“This is an excellent opportunity to get a large and diverse crowd up to speed on the SF industry,” Goebel said. “There is much to share and much to gain — for our companies, the industry, and our customers. We look forward to seeing you there.”

Registration is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount. All attendees are invited to attend any session at Industry Summit, which also includes The Best Training Day Ever, F&I Think Tank and Compliance Summit.

To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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IRVINE, Calif. ─ Transaction prices grew slower than usual for the month of June, rising $511, or 1.5%, from a year ago to $34,442, according to Kelley Blue Book.

Compared to May, transaction prices were flat. The vehicle information site noted that as the industry enters a “post-peak” environment for new-car sales, more pressure will be placed on transaction prices.

“Kelley Blue Book is seeing more mixed results among manufacturers and popular segments, such as full-size trucks and mid-size cars, both of which are flat, as well as compact SUVs, which rose 1 percent,” said Tim Fleming, analyst for Kelley Blue Book.  “These trends are likely to continue as retail sales weaken.”

Nissan North America’s average transaction prices rose an impressive 6% year over year in June.  The Infiniti brand realized a 2% decline, which was overshadowed by 7% gains at the Nissan brand. A higher mix of trucks and SUVs is responsible for the large increases in the Nissan brand, while the new Armada SUV again saw the greatest improvement, climbing 19%.  The Infiniti brand’s average was lowered primarily by the new entry-level QX30 crossover, which is transacting in the $35,000 range.

Hyundai-Kia’s average transaction prices were flat in June, with the Hyundai brand down 4% and the Kia brand rising 2%. The Kia Sportage has continued to perform well with a year-over-year improvement of 3%. Meanwhile, the new Genesis brand is seeing a strong start in its first year, with average transaction prices just north of $50,000.

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NASHVILLE, Tenn. ─ Mark Kaczynski is leaving his post as president of Nissan Motor Acceptance Corp. to become vice president of administration and finance for Nissan Motor Co.’s luxury brand Infiniti, the automaker announced on Thursday.

Replacing Kaczynski as president of Nissan’s captive finance company is Kevin Cullum, who was promoted from his general manager post at Nissan Canada Finance. Both leadership changes are set to take effect on Aug. 1.

The automaker also announced that, effective July 1, Alain Ballu, current director of international projects and partnerships for RCI Bank, will replace Cullum as general manager of Nissan Canada Finance.

Kaczynski, who will be based in Hong Kong and report to Infiniti Motor Co. President Roland Krueger, was named president of NMAC in December 2011. He has also served as a board member for Nissan Global Reinsurance as well as Alliance Inspection Management since 2011. He originally joined Nissan in 2007 as director of marketing and sales.

Cullum will report to Rakesh Kochhar, senior vice president of finance and global sales finance business unit, and will be based in Franklin, Tenn.

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Finance Concepts will now have access to Portfolio’s resources to help accelerate its growth plan. The transaction, terms of which were not disclosed, also further strengthens Portfolio’s relationship with the F&I agency and its portfolio of dealer clients. No changes in leadership are expected, officials said.

“We are very pleased to be adding one of the finest automotive finance and insurance agencies in the country to the Portfolio group of companies,” said President and CEO Brent Griggs. “Perry Montoya and Jeff Burnett have led Finance Concepts to exceptional growth since its founding in 2005, and we are delighted that they will continue that leadership as part of the Portfolio team.”

Brad Cooper, managing partner of Capital Z, added: “Our strategy for Portfolio combines continued strong organic growth with strategic acquisitions of successful agencies run by first class management whose business philosophy and approach are consistent with ours. Finance Concepts meets each of these criteria and this acquisition significantly strengthens Portfolio’s distribution network.”

For more, visit www.portfolioreinsurance.com.

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“Ten years of us ranking at the top says a lot about how dealers regard our programs,” said Brent Griggs, president and CEO. “We are grateful that our clients took the time to vote to demonstrate their high level of satisfaction with Portfolio.”

Chief Sales Officer Dan Haugen added, “I also want to express our thanks to all of our dealers for this vote of confidence in Portfolio. We are focused 100% on our dealers’ need for success in the dealership and the reinsurance company, so it’s rewarding to have their votes for us each year. It means we are doing a good job, but we will never rest on our laurels in this fast-changing industry.

“It’s essential to also thank all of our independent agents, who are the face of Portfolio in the dealerships every week, and our managing directors and reinsurance specialists who support our agents and dealers,” Haugen continued. “Everyone here in the home office recognizes their hard work and dedication in meeting each dealer’s needs is why we are ranked at the top every year.”

The survey was conducted over four weeks during March and April of this year. In an audited process where hundreds of dealer principals and other dealership personnel scored their satisfaction with providers in 34 categories of products and services. Survey respondents are asked to cast votes only for providers with which they have firsthand knowledge and experience.

In addition to identifying their primary providers in each category, respondents must rate their providers in four qualities: (1) the product or service provided; (2) customer support and service; (3) the overall value for dollars spent; and (4) whether the dealer would recommend the provider. The quality of the votes is weighted more heavily than the quantity in order to level the field for smaller providers.

The complete list of winners can be found here. Further coverage will be published in the August 2017 print issue of Auto Dealer Today. Award winners will be honored in September at Industry Summit in Dallas.

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Welcome to a tech-heavy edition of Auto Dealer Today. In our cover story, dealership IT expert Erik Nachbahr offers a list of five pressing issues you must address before completing the acquisition of a dealership. Item No. 1 is software. Simply put, if any store you own or plan to buy is using unlicensed software, you are sitting on a time bomb.

Unlicensed software takes many forms. An employee may download pirated software and install it on one of your machines. They may bring software they purchased at home to use on their work computer. Multiple users can get by with the purchase of a single license if they all use the same login and password. Each of these practices is a violation of the provider’s copyright, and each is illegal.

Perhaps you or your employees view unlicensed software as a victimless crime. I realize Bill Gates won’t go hungry if you steal a copy of Microsoft Office. But nor will he face punishment if you get caught.

It happens every day. The Business Software Alliance sees to it. The BSA enforces software copyrights by going after individuals and businesses that download, share or sell pirated software or install multiple copies of purchased software. The fact that you have never heard of nor been audited by the BSA should not make you feel safe. A disgruntled employee or vendor can rat you out to the agency — confidentially — at NoPiracy.org.

The implications are dire. If your dealership is found to be in violation of the U.S. Copyright Act, the owner can recoup actual damages (the cost of their product) plus attorney’s fees. If they are so inclined, they can even attempt to pursue any profits gained from the use of their software.

According to Nachbahr, one dealer paid a total of $1.5 million to settle charges of using pirated software on 300 computers. Another was fined $50,000 shortly after acquiring a store that had unlicensed software on its computers when the dealer bought it.

Of course, only a slender fraction of the dealer body will ever be subject to a BSA audit. But every dealership that runs on unlicensed software does so with a heightened risk of security issues. An employee who downloads a copy of Photoshop from The Pirate Bay has no way of knowing whether it is infested with spyware, malware, ransomware or viruses. Should your customers’ personal information be breached in a cyberattack, fines leveled by the BSA will be the least of your worries.

I am not an attorney, and no part of this page should be taken as legal counsel. But I urge you to follow Nachbahr’s advice. Conduct a thorough IT assessment of your store and any dealership you may wish to purchase. Failing to do so subjects you, your business and your customers to an unacceptable level of risk. 

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Relationships. Some are simple, some are complicated. Some drive you crazy and some bring you peace. Most of us have a relationship in common: the factory relationship.

At the dealership level, the factory can at times seem like Zeus on Olympus. Perhaps if we pray enough, do enough good deeds, and make enough sacrifices, we will be blessed. The blessing may be additional inventory, help on a problem, or even a simple call or note of appreciation for a job well done.

At other times, the factory can seem like an overpowered government entity that can audit you at a moment’s notice and make your life a living hell.

I feel there are some general rules that can be applied to the dealer/factory relationship. As you read this, bear in mind we are talking about one-on-one interactions. The NADA and dealer advisory panels have their own work to do. So let’s discuss three ways to improve our relationships with our factory reps.

1. Get to Know Them.

As with any new relationship, you must ask questions and give answers to get to know each other and establish boundaries and expectations. Maybe they would like to grab lunch or dinner. Maybe you don’t like surprise visits. Maybe there is damage from the last relationship that needs to be repaired.

Is this person a factory employee? Yes, but they’re still a person, same as you, and this is a relationship business.

2. Seek Guidance.

One of the best ways to make people feel good about themselves is to seek their opinion or ask for help. They will feel empowered, and who knows? You may get some great advice!

To improve your results, be genuine and think big. They may have access to DMV registrations. They may be able to share competitive numbers or winning strategies from other dealers. You never know unless you ask.

3. Play Ball.

Work to hit your numbers. Take time to talk with your reps. Take their surveys. Attend their functions. Be polite and gracious. Again, this is how life should be lived anyway. Rarely is rudeness or abruptness the best approach. A spirited debate is healthy as all get out. Just don’t be a jerk.

We all work in the same business and we all have a job to do. Factory reps chose the path that led to a low-risk, steady-income, 9-to-5 job. Chances are they are not as passionate as the daredevils who read this magazine, and that’s OK. Think of it this way: In warrior times, some people fought the battles and someone else had to make the swords, shields, and armor.

Well, in this business, we are the warriors. And like Apollo Creed told Rocky Balboa, “See, we’re born with a killer instinct that you can’t turn off and on like, like some radio. We have to be right in the middle of the action, ’cause we’re the warriors. And without some — some challenge, without some damn war to fight, then the warrior may as well be dead, Stallion.”

We all have a job to do. The work our factory reps do is important. It serves a purpose and, hopefully, brings fulfillment to their lives. Be kind, open-minded and willing to work to build the relationship. Until next we meet, stay true to your vision. 

Jason Heard is the general sales manager at Lee’s Summit (Mo.) Honda. He is a 20-year industry veteran with extensive sales and sales management experience. Contact him at jason.heard@bobit.com.  

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If you have known me for more than five minutes, you have probably been subjected to my sermon about the critical differences between a car loan and a retail installment contract. “Loans” and retail installment contracts, like Golden Retrievers and Yellow Labs, share a number of characteristics, but they are different critters.

People in our business, and people who regulate our business, use the term “loan” sloppily, when they really mean to refer to retail installment contracts. Usually that sloppy usage doesn’t matter. But sometimes it does.

Written Into Law

One of my favorite “sometimes it does” episodes occurred several years ago in Texas. The legislature in the Lone Star State passed a bill they thought would fix a problem in the Texas law regulating retail installment contracts. Instead of using the term “retail installment contract” in the legislation, the drafter got sloppy and used the word “loan.”

As it turns out, “loan” was a defined term under Texas law, and was defined to expressly exclude retail installment contracts. The badly drafted legislation had absolutely no effect on the retail installment sales laws. And, to put a little icing on the cake, the legislature in Texas meets only every other year, so it took two years to correct the drafting error.

We’ve criticized the Consumer Financial Protection Bureau on a number of occasions for the same mistake. Based on their recent press releases regarding enforcement actions, we can add to the list of offenders the attorneys general of Delaware and Massachusetts.

But we aren’t done! Along comes a lawyer who was either blissfully ignorant of the distinction we keep harping on, or who knew the difference between the two terms but decided he might be able to put one over on an inattentive judge. Here’s how that went.

Ambrose Industrial Services Corp. obtained a loan from Advantage Funding Commercial Capital Corporation that was secured by a truck. Jennifer Ambrose, AISA’s owner, personally guaranteed the loan.

AISC eventually defaulted on the loan, and AISA and Ambrose filed for bankruptcy. Advantage Funding repossessed the truck after the bankruptcy court granted it relief from the automatic stay. Advantage Funding filed a claim as part of Ambrose’s bankruptcy case, and Ambrose objected.

Ambrose alleged that Advantage Funding was a sales finance company and had violated the Georgia Motor Vehicle Sales Finance Act when it failed to give notice after repossessing the truck.

A Loan Is a Loan

The U.S. Bankruptcy Court for the Northern District of Georgia ruled for Advantage Funding. The court wasn’t buying what Ambrose’s lawyer was selling, finding that Advantage Funding was not a sales finance company under the MVSFA because it did not purchase a retail installment sale contract from a seller and was not engaged in the business of buying retail installment sale contracts.

Advantage Funding’s security interest in the truck arose under the terms of a note. Because Advantage Funding was not a sales finance company, it was not subject to the notice requirements under the MVSFA. In any event, Ambrose waived any right to notice under the terms of the personal guarantee. The court found that the waiver was valid and enforceable because it did not violate public policy.

Sometimes the distinction matters. So repeat after me: A loan is a loan, and an installment sale is an installment sale. Then say it again. And again.

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. 

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Founded by President and CEO Randy Crisorio, UDS has been providing its F&I performance package to franchised dealers since 1982. It consists of a “top-tier product suite, award-winning training, in-store coaching and development, and unmatched technology offerings,” according to the company.

“We have achieved this milestone through the hard work and dedication of our team and our culture of delivering extreme value to our dealer partners,” said Crisorio. “We will continue as market leaders for another 35 years through innovation and growth aimed at keeping our dealer partners ahead of the F&I curve.”

UDS maintains a diversified portfolio of product options for its dealer partners from some of the industry’s most recognized and trusted providers in the industry. The firm's training component includes classroom, dealership, and online applications, while its development business offers in-store coaching, AutoMenu delivery technology, AutoTracking performance reporting, monthly profit analysis and performance review, incentive administration, and more.

Additionally, UDS brings expertise in various profit participation programs, including reinsurance, to maximize dealer wealth.

For more on the company, visit www.UDSDealerServices.com.

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SANTA MONICA, Calif. — After five straight years of market-share gains, the SUV segment may be poised for a slowdown, according to a new analysis from Edmunds.

While incentive spending overall is up 23% so far in 2017 compared to 2016, incentives on SUVs are up as much as 47%. And despite these attractive offers and relatively strong demand, SUVs are now starting to linger longer in the showroom. Between January and May of 2017, an SUV sat for an average of 61 days on the dealer lot before it was sold, compared to 56 days for the same time period in 2016.

“For the last few years, SUVs almost seemed to sell themselves. But as the market starts to level off, automakers are having to work a little harder and make the deals a little bit sweeter to hit their sales targets,” said Jessica Caldwell, Edmunds’ executive director of industry analysis. “The silver lining is that SUV demand isn’t completely hitting the wall, but even this hot segment isn’t immune to the dip the entire market is experiencing this year.”

Even though the auto sales are softening, Edmunds expects that strong economic conditions and enticing deals will be enough to rally sales in the back half of the year. The firm's analysts maintain their sales forecast of 17.2 million vehicles for 2017, representing a 2% decline from 2016’s record high and the fourth-best auto sales year in U.S. history.

Edmunds forecasts that 1,479,042 new cars and trucks will be sold in the U.S. in June for an estimated seasonally adjusted annual rate (SAAR) of 16.6 million. This reflects a 2.3% decrease in sales from May 2017 and a 2.3% decrease from June 2016.

“While six straight months of sales declines sounds troubling, June is sandwiched between two major holiday sales events, which makes it a bit of a gloomy month historically,” Caldwell said. “Car shoppers are savvy enough to know automakers push the deals on holiday weekends and are willing to hold off on buying until they know they’re getting a hot bargain.”

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DALLAS — Organizers of the upcoming Compliance Summit announced that James S. Ganther Esq. will serve as a featured speaker for the Easy-to-Implement Processes and Controls portion of the agenda. The event will be held Sept. 11–14, 2017, at the Gaylord Texan Resort & Convention Center, as part of Industry Summit.

“Jim has been an ardent supporter of Compliance Summit as well as a highly valuable speaker,” said David Gesualdo, show chair and publisher of Auto Dealer Today and F&I and Showroom magazines. “We are counting on him to deliver the practical advice and instructions dealers need to build and maintain bulletproof processes.”

Ganther is a high-profile attorney, compliance expert and author, the cofounder and CEO of Mosaic Compliance Services, and a member of the National Association of Dealer Counsel. In his Compliance Summit presentation, he will discuss how forces within and outside the regulatory bodies, including the digitization of F&I, are contributing to the need for processes and controls that can withstand scrutiny.

“Technology will make compliance mandatory,” Ganther said, noting that dealers understand the need for compliance training, a “defined element” of the CFPB-mandated compliance management system (CMS), but must also be prepared for audits and enforcement actions. “You can have easy-to-implement processes in place that make that independent audit a breeze.”

Registration for Industry Summit 2017, which includes Compliance Summit and Automotive Compliance Education (ACE) certification as well as The Best Training Day Ever, F&I Think Tank and Special Finance Conference, is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount.

To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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TALLAHASSEE, Fla. —On Monday, Florida Gov. Rick Scott signed into law legislation that ensures the state’s franchised dealers receive fair compensation for entering a factory image program and prohibits OEMs from taking “unsupported, punitive actions against dealers.”

The new law specifically ensures that the flow of benefits related to an OEM-order renovation don’t erode 10 years after construction is completed — even if that image program stops and another one starts. The bill, CS/CS/H.B. 1175, was unanimously approved by the Senate on May 5 and was approved by the House in late April by a 104-12 vote.

“Even though the OEMs always characterize these [facilities-update] programs as voluntary, the thing that makes them required is the incentives and other compensation programs they are wrapped in,” said Ted Smith, president of the Florida Automobile Dealers Association (FADA). “So this bill strikes at the heart of the program by ensuring that while dealers still do not have to do any of these programs, if they do, they have protections if and when an OEM starts and stops programs on the sale or service facility. So the dealer will continue to receive the benefits after completion of his project.”

Not only are dealers who enter a factory image program entitled to the associated benefits and incentives for 10 years, they are entitled to any increase in those benefits between the prior program and a new or revised one takes effect.

The new law also prohibits manufacturers from establishing, implementing or enforcing criteria for measuring a dealer’s sales or service performance that is “unfair, unreasonable, arbitrary, or inequitable,” and does not account for local and regional “criteria, data, and facts.”

If a vehicle OEM enforces a new performance measurement standard, the law entitles Florida franchised dealers to a written description of how the new criteria were “designed, calculated, established, and uniformly applied.”

The new law took effect upon the bill’s signing.

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NEW YORK — Bankrate Inc. has released the results of its latest Car Affordability Survey, which uses vehicle prices, insurance rates, sales tax, population and personal income levels to identify the U.S. cities in which new cars are most affordable. This year’s Top 10 list is headlined by Washington, D.C., and includes cities in every region but the Southwest and Southeast.

10 Most Affordable U.S. Cities to Buy a Car

1. Washington, D.C.
2. San Francisco
3. Boston
4. Seattle
5. Minneapolis-St. Paul
6. Baltimore
7. Denver
8. San Diego
9. Chicago
10. Portland, Ore.

“Our latest Car Affordability Study shows typical households in most of America’s larger cities don’t earn enough to afford the average new vehicle, under a common budgeting rule for buyers,” Bankrate’s Claes Bell wrote, referring to the “20/4/10” rule, which restricts car buyers to a minimum 20% down payment on a four-year loan that will eat up no more than 10% of their annual income. “You may need to stay away from those pricey cars in the showroom and focus on the less expensive models at the back of the lot.”

The consumer-facing survey and affordability list does not purport to rank prices, incentives or discounts offered by dealers in each city. It is designed to reflect what a median-income earner can reasonably afford to spend. In our nation’s capital, that number is a hair over $37,223.41. In Miami, which is ranked last on Bankrate’s 25-city list, the “affordable” price is less than $14,000.

Bell’s analysis highlights the ever-stretching loan terms that have marked the resurgence of the auto retail and finance industry since the Great Recession. The author cites Experian data that shows about three-quarters of new-car loans come with at least a five-year term.

“The length of an auto loan may not seem important, especially with today’s more reliable autos routinely going well beyond 100,000 miles without major issues,” Bell wrote. “But playing by the 20/4/10 rule can make a big difference in your long-term financial well-being.”

To read Bankrate’s full list of affordable car cities and Bell’s complete analysis, click here.

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DETROIT — With new-vehicle sales in June expected fall to their lowest level since 2012, the auto industry is on pace to record its weakest first half since 2014, according to forecast partners J.D. Power and LMC Automotive.

The two firms expect new-vehicle sales to total 1.17 million units in June, a 1.3% decrease from the year-ago period. They also put the seasonally adjusted annualized rate (SAAR) for retail sales 13.1 million units, a decrease of 51,000 units from a year ago.

For the first half, retail sales are projected to be down 1% from last year.

“While the retail selling rate has declined in four of the first six months, the broader concern remains the negative health indicators behind the sales results,” said Deirdre Borrego, senior vice president of automotive data and analytics at J.D. Power.

Borrego pointed to total incentive spending as one of those indicators, which rose 11.7%, or $2.5 billion, from a year ago, to a record $25.2 billion through June. On a per-unit basis, spending for the average new vehicle through June has increased $416 from a year ago to $3,770. On trucks and SUVs, incentive spending has risen by $484 from a year ago to $3,645, while spending on cars has jumped $345 to $3,983.

Average incentive spending per unit to date through June is expected to come in at a record $3,661, surpassing the previous high for the month of $3,370 in June 2016. Spending on trucks and SUVs is expected to be $3,494, up $350 from a year ago. Spending on cars is expected to rise by $249 to $3,955.

Incentives as a percentage of MSRP are at 10% so far in June and are on pace to exceed the 10% level for the 11th time in the past 12 months.

And despite the record spending on incentives, the average new-vehicle retail transaction price to date has risen to a record $31,720, surpassing the previous high, set in June 2016, of $31,073. At that level, consumers are on pace to spend $37.1 billion on new vehicles in June, about $263 million more than last year and a record for the month.

As for sales, Trucks account for 63.7% of new-vehicle retail sales through June 18 — the highest level ever for the month of June and the 12th consecutive month above 60%. Days to turn, the average number of days a new vehicle sits on a dealer’s lot before being sold to a retail customer, remained at 70 through June 18, the highest level since July 2009 (80 days).

Fleet sales are expected to total 309,900 units in June, down 5.7% from June 2016 on a selling-day adjusted basis. Fleet volume is expected to account for 21% of total light-vehicle sales, a decrease from 21.7% in June 2016.

“As the U.S. auto market enters the fourth month in a row of a sub-17 million-unit selling rate, nerves are being tested. The primary driver of the decline in the total sales pace is a pullback in fleet volume, which is projected to be down 8% for the first half of 2017, while retail sales, assisted by elevated incentives, are projected to contract by 0.6% for the same period,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive. “It will be challenging in the second half of the year to keep pace with 2016, so some additional weakness and further risk are expected in both fleet and retail volume, but a year still expected above 17 million units should not be considered a poor performance.”

The prolonged pullback in fleet volume combined with the leveling off of the retail market has led to another trimming of LMC’s outlook for 2017. The firm cut its 2017 total light-vehicle sales forecast to 17.1 million units, down from 17.2 million last month and a decline of 2.6% from 2016. The retail light-vehicle outlook has also been reduced by 50,000 units but continues to round to 13.9 million units, a decline of 1.8% from 2016. Fleet volume is now expected to be down 6.1% from 2016.

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LONG BEACH, Calif. — FrogData announced the hiring of Chris Dulla as national sales director. Dulla comes to FrogData with more than 30 years of combined executive experience at Heiser Automotive Group and CDK Global.

In his new position, Dulla will be responsible for overseeing the entire sales organization and establishing and driving sales for the company’s data analytics platform. The solution was designed to deliver advanced reporting, business insights and predictive analytics to help dealers make the right decisions to improve productivity and profitability.

“Chris brings a wealth of knowledge to his position as national sales director. He knows the difficulties dealership managers face through the time he spent leading Heiser Automotive Group, and he also knows the vendor-side challenges through his two decades of leadership roles while at CDK Global,” said Tej Soni, founder of FrogData. “He understands the value of analyzing dealership data and putting the results into practice and can speak from a position of experience and authority. We could not be happier to have him on the team.”

As president of Heiser Automotive Group, Dulla oversaw, developed and implemented revenue and profit growth strategies for five dealership locations with 320 employees. Previous to Heiser, Dulla held the position of vice president at ADP Dealer Services (now CDK Global). In this role, he was responsible for driving sales and revenue for the CRM product line, with oversight for product marketing and development.

“When the executive team showed me the ins and outs of the FrogData system and the analytics it provides, I had to get involved. This is a game-changer for the industry,” said Dulla. “We look forward to rolling it out and showing dealer managers just how powerful this tool is when determining efficiencies and profitability across their dealer organizations.”

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With direct access to valuable Carfax information such as title brands, mileage readings and service history, plus the new VIN-specific Carfax History-Based Value, finance sources can more accurately assess vehicles as collateral, according to Doug Glagola, vice president of enterprise solutions at MeridianLink.

“Simplifying and streamlining loan processing for our clients is our top priority,” Glagola said. “This integration with Carfax is a much-anticipated benefit that makes critical vehicle history and value information impacting a loan available without having to leave the LoansPQ platform.”

Carfax reports were designed to help users identify vehicles with potential problems that affect their safety and value. Issues such as accidents and flood damage or scams like odometer fraud and title washing can reduce vehicle values by as much as 50%, lead to more costly repairs and increase the risk of loan default. Using Carfax Reports and the Carfax History-Based Value — a price based on a vehicle’s unique history — lenders can adjust their loan-to-value ratio, according to the company.

“We’re constantly developing innovative solutions that help protect members of the financial services industry and their customers,” said David Lackey, general manager of the Carfax Banking & Insurance Group. “Most often, auto lenders look primarily at the individual requesting a loan, but evaluating the specific vehicle on a lending application is a truly novel concept. Working with partners like MeridianLink, we’re transforming the way lenders approach the loan approval process.”

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“To say that we are delighted would be something of an understatement,” said Eddie Eckert, president of SouthwestRe. “We are both humbled and honored to be receiving this award. Thank you to everyone who voted. You have said clearly, and for all to hear, that SouthwestRe’s reinsurance programs are among the finest in our entire industry.”

“SouthwestRe deserves credit for breaking into what had been a perennial three-way race in an extremely competitive category,” said Tariq Kamal, associate publisher of ADT and F&I. “It’s clear their dealers stepped up on their behalf this year.”

The Dealers’ Choice Awards will be presented during a special ceremony at Industry Summit, held from September 11–14 at the Gaylord Texan Resort Hotel & Convention Center in Grapevine, Texas, near Dallas.

“I look forward to meeting with, and personally thanking, as many of our dealer clients as I possibly can during this year’s Industry Summit,” Eckert said. “We are very grateful to them, and to everyone who voted to include SouthwestRe in this year’s winner’s circle. Your vote of confidence in our company and in the reinsurance services we provide is very much appreciated by all of us at SouthwestRe.”

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QUANTUM covers touch and display screens, Bluetooth components, driver assist detection and warning systems, parking sensors and assist systems, USB ports and power points, along with earlier technology such as factory-installed navigation systems, built-in TV screens and DVD players, audio systems, and backup and forward camera systems.

QUANTUM addresses the needs of the new- and used-car buyer who may not have ever experienced a mechanical breakdown covered by a traditional VSC, but is well aware of the need to keep new technology components in good working order. QUANTUM also is priced lower for those customers who choose not to purchase a traditional exclusionary coverage VSC yet who value keeping their newest technology components functioning as intended, according to the provider.

“The market has spoken. Our dealers have spoken. This is a ‘high interest/high demand’ product especially for millennial car buyers,” said Tanya Stevenson, Portfolio’s vice president of product sales and development. “We listen to what our dealers want to meet customer needs and to gain every bit of profit from their F&I departments. QUANTUM provides one more opportunity to deliver value to their customers, and to optimize their PVR.”

QUANTUM is available to all dealers, regardless of their primary provider of reinsured vehicle service contracts. As with all Portfolio-reinsured VSC products, the dealer will choose the range of terms and deductibles offered to customers to fit local market needs; QUANTUM can be reinsured only by Portfolio.

“Our company is totally dealer-centered, and we know their F&I departments need every tool in their box to meet customer needs while delivering profit to both the dealership and the reinsurance company affiliated with it,” said Chief Sales Officer Dan Haugen. “QUANTUM is Portfolio’s latest effort to accomplish this win-win-win, but it is hardly our last. We will continue to develop profitable product solutions for current Portfolio dealers, and future Portfolio dealers.”

As of press time, QUANTUM is approved in 42 states, is pending in seven more, and has provisions to receive financing from both Ford and Toyota, among other auto finance sources.

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IRVINE, Calif. — New-vehicle sales are expected to fall nearly 4% year over year to a total of 1.46 million units in June 2017, resulting in an estimated 16.3 million seasonally adjusted annual rate (SAAR), according to Kelley Blue Book.

“Kelley Blue Book projects June will be yet another down month of sales with expected declines in both fleet and retail,” said Tim Fleming, a KBB analyst. “With manufacturers continuing to announce production cuts at their plants following weaker consumer demand, it all but solidifies 2017 as a down year."

Fleming said the vehicle information site is also seeing lease penetration rates come down from record highs. Incentives are also slowing as a result. "Both are good signs for the long-term health of the automotive industry and show manufacturers’ commitment to profitability and preserving future used-car values,” Fleming added.

June 2017 would represent the fourth month in a row under 17 million SAAR, the longest period since a six-month streak from September 2014 through February 2015. After a record year of sales in 2016 and seven consecutive year-over-year sales increases, Kelley Blue Book’s forecast for 2017 calls for sales in the range of 16.8 million to 17.3 million units, which represents a 1 to 4% decrease from last year.

Key highlights from KBB’s June forecast include:

• New light-vehicle sales, including fleet, are expected to hit 1,460,000 units, down 3.6% compared to June 2016 and down 3.5% from May 2017.
• The seasonally adjusted annual rate (SAAR) is estimated to be 16.3 million, down from 16.8 million in June 2016 and down from 16.6 million in May 2017.
• Retail sales are expected to account for 79.7% of volume in June 2017, slightly up from 79.4% in June 2016.

Volkswagen Group could see the highest volume growth in June 2017, which would bring its market share up to 3.5 percent. These potential gains are in part due to the year-over-year comparison of a weak 2016, though recently launched models such as the Audi A5, Volkswagen Golf Alltrack and the new Atlas SUV will likely be responsible for most of the increases. These new models should push both car and truck sales for Volkswagen into positive territory for the month.

Ford Motor Co. is likely to lose the most market share of the major manufacturers, projected at 1 percent. The declines can be primarily attributed to an expected drop in fleet sales, which would affect sales totals for the higher fleet models such as the Fusion, Focus and Transit vans. In June, Kelley Blue Book estimates Ford’s retail mix to be 68 percent, an increase of 4% year-over-year.

While the sales growth for compact SUVs has slowed with the rest of the industry and is projected at just 3% in June 2017, the segment’s share of the market continues to steadily rise. Kelley Blue Book projects just over a one point increase in share for compact SUVs, as the top models in the segment, including Toyota RAV4, Nissan Rogue and Honda CR-V, continue to grow and push more than 30,000 units per month on a regular basis.

Perhaps more quietly, mid-size SUVs are also increasing in popularity with consumers, and Kelley Blue Book expects this segment to gain a point of market share this month.

“Like compact SUVs, much of the growth for mid-size SUVs is expected to come from the segment’s most popular models,” said Fleming. “The Toyota Highlander, Ford Explorer and Jeep Grand Cherokee, all of which are projected to have double-digit growth, are driving gains for the mid-size SUV segment.”

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"Traditionally, dealerships were set up to reward individual performance rather than team performance," said Mike Esposito, president and CEO of Auto/Mate Dealership Systems. "As the retail automotive landscape changes, dealers are exploring new ways of structuring management and how to approach things like employee pay plans and customer communications. Building a workplace that fosters a team mentality is key to achieving new organizational objectives."

Numerous studies document the benefits of team building. Members of a team communicate more effectively and have better relationships; motivate each other and hold one another accountable; learn to better identify their own and others' strengths and weaknesses, and adjust responsibilities accordingly to maximize productivity; report higher levels of employee satisfaction, morale and happiness; promote mutual respect and understanding of fellow employees; have each other's back; work together to achieve organizational objectives; and prevent rogue employees from doing things their own way

“The Auto Dealer's Guide to Team Building” lays out eight steps dealers can follow to create a workplace that promotes a team philosophy. The ebook explains how, in dealerships, teams can be organized not only by department but also into cross-functional teams for the purpose of solving problems and improving dealership-wide processes.

For more, visit www.automate.com.

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WILKES-BARRE, PA. – F&I product provider GWC Warranty named Andrew Roke as its new product manager. As a member of the marketing department, he will be responsible for managing GWC’s suite of products while evaluating new opportunities for innovative product enhancements.

Prior to joining GWC, Roke held several positions in operations and marketing product management. Most recently, he served as strategic product manager for Cornell Cookson in Mountain Top, Pa. He previously spent several years with Aramark, working in the cleanroom and uniform services divisions in Scranton, Pa., and Los Angeles, respectively.

Roke is a 2011 graduate of Misericordia University in Dallas, Pa., where he earned a bachelor’s degree in business management. He also holds a Master of Business Administration from Marywood University in Scranton, Pa.

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RICHMOND, Va. — Officials with CarMax Auto Finance, a subsidiary of CarMax Inc., said a focus on its online prequalification portal drove a 7% gain in first-quarter originations from a year ago.

The portal has been live at all CarMax locations for two full quarters. Officials said the next step is to offer customers home delivery, although they said the service will stop short of a complete online buying experience.

"Customers are engaging well with this offering and it continues to contribute to increased online leads, which we believe ultimately generate incremental sales," said President and CEO Bill Nash during the company’s June 21 earnings call to discuss first-quarter performance. “Now we’re focused on improving the experience and proactively marketing our online financing capability nationwide.”

The auto finance company recorded $1.5 billion in first-quarter originations, up from $1.4 billion in the year-ago quarter. The firm did not disclose a total origination count or total outstanding balances.

According to officials, state regulations prevent the automotive retailer from allowing consumers to complete vehicle transactions online. The used-vehicle retailer will instead deliver vehicles to a customer’s home for test-drives. If the customer agrees to purchase after testing the vehicle, the associate accompanying the vehicle will be trained to help the consumer complete the deal paperwork.

Officials also said the pre-owned dealer group is testing an online appraisal tool in its Charlotte, N.C., market. It is designed to allow customers to submit condition reports on their trade-in online to receive an appraisal value. Nash said the company plans to expand that pilot to two more Charlotte stores.

"We continue our home delivery test and one key learning we found is that human intervention at the right time is important to giving our customers the personalized experience they expect," Nash said. "Our goal with this test is to build the functionality needed to fully integrate our online and in-store experiences that we can offer as much or as little the car buying process online as each customer wants."

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The 1st Equity Payment Auto Budget Payment Plan is issued and administered by issued by an FDIC-insured bank. The program is designed to provide customers with third-party bill payment services using a virtual prepaid card account.

To complete the process, a customer fills out the consumer agreement, which IPPI then forwards to the bank. The bank then reviews the agreement — as well as the results of IPPI's CIP / OF AC checks — and upon the bank's acceptance, it becomes effective. The bank is liable for the money services owed to the consumer, and IPPI merely act as the bank's limited agent for purposes of managing and marketing the program, according to Guy Manasse, CEO of First Equity Payment, which now has active customers nationwide.

“We strongly believe this structure is far more beneficial to consumers than the traditional monthly payment,” Manasse said. “We are proud to be working directly with the bank to be able to expand this option to even more consumers, both in the state of Texas and nationwide.”

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DALLAS — Organizers of the annual Industry Summit announced that John Vecchioni of American Financial & Automotive Services will serve as master of ceremonies at the 2017 event, which will be held Sept. 11–14 at the Gaylord Texan Resort & Convention Center in Dallas.

“I always look forward to the new ideas I get when I am at Industry Summit,” Vecchioni said. “I am reminded that the millionaires of tomorrow are just getting started today. I’m proud to play a role in it all.”

Also known as “The F&I Professor,” Vecchioni is a trainer with American Financial’s F&I University, a division of the Automotive Training Academy. He is a 25-year industry veteran with expertise in sales, F&I and compliance. Known for his engaging, conversational style, Vecchioni has served in numerous roles at Industry Summit, delivering featured presentations, joining panels, and emceeing past events.

“The industry knows John as ‘The F&I Professor.’ I prefer to think of him as ‘Mr. Reliable,’” said David Gesualdo, show chair and publisher of F&I and Showroom and Auto Dealer Today. “Whatever the topic, whatever the role, he delivers. Master of ceremonies is no small job, but he has our full faith and confidence.”

This year’s Industry Summit includes F&I Think Tank, the Special Finance Conference, The Best Training Day Ever, Compliance Summit and Automotive Compliance Specialist certification by Automotive Compliance Education (ACE). Attendees holding a full show pass are welcome to attend any session on the agenda, including ACE certification, for no additional charge.

Registration for Industry Summit 2017 is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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DALLAS — Organizers of the upcoming Industry Summit announced the annual Special Finance Conference will return for the seventh consecutive year. The event will be held Sept. 11–14, 2017, at the Gaylord Texan Resort & Convention Center in Dallas. It will be a homecoming of sorts for the SF Conference, which was held in Dallas before joining forces with the former F&I Conference to create Industry Summit in 2011.

Special Finance Conference remains the industry’s premier training event for dealers and dealership professionals. The curriculum includes the basics of setting up and operating a special finance department and advanced instruction in BDC, sales, F&I and more.

The conference also marks the annual release of Goebel’s Special Finance Benchmarks, a comprehensive report built from data contributed by hundreds of dealerships around the United States.

“Special Finance Conference is a powerful event and an integral part of Industry Summit,” said David Gesualdo, show chair and publisher of F&I and Showroom and Auto Dealer Today. “Dealers working in the subprime space — and those who aspire to do so — simply cannot miss it.”

Registration for Industry Summit 2017 is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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Certain states are more prone to specific disasters than others. In Florida, we have to worry about hurricanes. In California, it’s earthquakes. But your auto dealership does not have to be located in either of these states to worry about disaster preparedness.

Just about every state in the union faces the possibilities of some kind of natural disaster. In Florida and all other states along the East Coast, the main risks to your dealership are hurricanes and tropical storms. The official Atlantic Hurricane has already started. It runs from June 1 to November 30. And by all accounts, we are now expecting a “somewhat higher than normal” Atlantic Hurricane Season.

Even if your dealership is not threatened by Hurricane Season, emergency preparedness can be the key to your dealership “weathering the storm.” So it is never too late, nor too soon to prepare for natural disasters.

Preparedness for Personal Safety

As part of your preparedness for the safety and security of staff and customers, it is always a good idea to assign a “captain” or “emergency coordinator” to take the lead during any disaster. Check among your staff if you have any employees with military, first-aid, or other specialized training that would make them ideally suited for this task.

Have your captain or emergency coordinator check all public safety gear and equipment, including firefighting equipment and first aid materials. Repair and replace faulty items as necessary. In addition to fire safety equipment and first aid kits, you may want to budget for Automatic External Defibrillators (AEDs), and other “shelter-in-place” supplies that may be needed. Make sure all employees know how to access and use these supplies.

Make sure you have an evacuation plan in place so you are prepared should an emergency occur during business hours. Make certain that considerations have been made for employees and/or customers with medical conditions, disabilities, or other special needs.

Dealerships also should have an employee communications plan. This plan starts with each employee having a list of all employee addresses, home phone, and mobile phone numbers. A call system should be established, with department heads and other “captains” calling designated employees to find out if their homes suffered damage and if they need any assistance.

In addition to having a plan in place for employee communications, you need to know who to contact in an emergency, and how they can help. Be sure you have contact information for:

• Local and state police
• Fire department and emergency medical services
• Local government officials, emergency management office
• Local public health agency
• Local American Red Cross chapter
• National Weather Service
• Utility companies
• Neighboring businesses
• Preparedness for Structural Damage

If your dealership is in an area that should come under a hurricane watch or warning, cover all glass windows and doors with shutters, paneling or other protective material, such as plywood or Masonite. Use large plastic bags to protect items such as computers from water damage.

It is advisable to have a supply of heavy sheeting, air conditioning duct tape and some sandbags set aside for securing first-floor doorways against flood water. Just make sure to take before and after pictures of the business or plant to aid in insurance or tax credit claims after the storm.

Additionally, check drains on the roof of the building to ensure they are clear and able to drain off the heavy rain that usually accompanies a hurricane. Clogged roof drains could cause the roof to collapse from the weight of accumulated water, or cause damage to the interior of the building if water on the roof becomes deep enough to cover vent pipes and run down inside the building.

Physical preparations should include having enough generators — and the necessary gas — to operate the office and other facilities if electricity is off after a storm or other disaster. If you have a built-in generator for backup power, test it under load to make sure it is operating properly.

If you should need to close your dealership and secure and lock it down in preparation for an impending storm, be sure to advise local law enforcement if the business will be empty of people or if security guards will be on site. If guards are to remain on site, their safety should be provided for.

Also shut down all incoming power, electric, gas and water lines. Before restoring service, check all utilities. If there is a question about the condition of the utilities, call the appropriate company. Lastly, disconnect all electrical appliances and equipment such as computers, copiers, coffee makers, electric clocks, calculators, etc. so they do not create excessive surge when electric power is restored.

Business Continuity and Easing Recovery

Just as important as preparing for a disaster is having a plan for recovery in its aftermath. So check your policies before their annual renewal dates to make sure that coverage has kept pace with exposure. That review should be extensive for property and casualty policies and for business interruption insurance.

Business interruption insurance is critical. This type of insurance, often called “business income insurance,” provides money to a policyholder for a pre-designated period to replace lost revenue and cover payroll when a business needs to be shut down due to disaster. Dealerships should study their business interruption policies to be certain of what damages are covered. Some events you think are covered under a standard business interruption policy, such as flooding, wind damage, and/or earthquake damage, may not be, and you may need to speak to your agent to obtain separate policies for specific damage your dealership may be prone to.

Daily electronic backups of important documents, files and databases are also crucial to your recovery after a storm or other disaster. Dealerships should make copies of those records and store them in an offsite, physically secure facility. Articles of incorporation, accounts receivable, client records and important personnel and administrative documents should be among the priorities for back-up.

Other key business continuity preparation issues include:

• Credit: Because insurance payments can be delayed, it is important to maintain a sufficient line of credit for business continuation.
• Tax Issues: Depending on the magnitude of the disaster, federal aid may be available in the form of tax breaks at the end of the year. Thus, it is critical to stay up-to-date on tax policy changes.

The Recovery Process

After a hurricane or other disaster, recovery for a dealership involves rebuilding the physical structures and rebuilding the financial structure. But remember, in the wake of a disaster, the main goal should be to restore customer confidence by getting the doors to your showroom back open as soon as possible, which means a partial reopening may be better than remaining closed.

Here are some specifics from the Florida Automobile Dealers Association that can help your dealership get back up and running more easily after the storm:

• Locate a source for mobile trailers in the event that your showroom is demolished. These trailers will serve as headquarters for cleanup and will be useful in the event that your sales operations will need to continue from these temporary quarters.
• Ensure that you have a contractor available who can also help you dry out your facilities. Contractors with drying equipment and dehumidifiers are extremely helpful.
• Talk to the people that handle your trash dumpsters and be sure that you can get additional dumpster facilities for clean up after the storm.
• Contact area firms for bobcat and front-end loaders for debris removal.
• Have a team of handy/strong employees who can help your employees at their homes if necessary.
• Develop a plan for your replacement inventory. Several dealers noted that it was important to remove their damaged vehicles before any new inventory can be brought in. It is important to have a plan because there will likely be a delay. And when you decide to return to sales, you may have insufficient inventory available.

Most dealerships have tremendous problems locating skilled labor to help with damaged roofs and other structural work. For those with steel buildings, the need to contact contractors in advance is even more important as these supplies may or may not be available after a major storm.

Cash flow and traditional forms of credit may be interrupted in the aftermath of a hurricane or other major disaster. Your dealership may qualify for federal grants or low-cost disaster recovery loans.

A disaster preparedness plan for your business is one of those things that you have but hope you never use. Proper disaster planning can go a long way to giving you the peace of mind that comes with knowing that your business is ready, willing, and able to shift into disaster response mode, whenever it may be necessary.

Ira Silver, CPA/ABV/CFF/CVA/CGMA, and Mark R. Thaw, CPA/CGMA, are principals in the tax and accounting department at MBAF. They can be reached at isilver@mbafcpa.com or mthaw@mbafcpa.com.

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NORTH HILLS, N.Y. — Dealertrack (div. Cox Automotive) will cut the ribbon on its new, $50 million, 230,000-square-foot facility in the Village of North Hills, N.Y., today.

Currently headquartered in nearby Lake Success, the company is one of the largest on Long Island and has committed to remaining there with a 17-year lease. Located at 3400 New Hyde Park Road, the new building will house nearly 600 employees with room for many more.

“When Dealertrack originally announced the new building plan three years ago, it was a vision driven by our team members to have a work environment that inspired innovation and collaboration, and overall health and wellness in the workplace,” said Dean Tilsley, Dealertrack’s senior vice president of finance and operations. “As we have grown over the years, we have done so with an unwavering commitment to the Long Island metro area. We are proud to offer our team members a state-of-the-art facility where they can continue to develop solutions that are changing the way the world buys and sells vehicles, and also contributes to local economic prosperity.”

The 10-acre, LEED-specified building features indoor basketball and volleyball courts, a cafe, cardio room and yoga studio, indoor and outdoor dining areas, game rooms, a walking trail, and an indoor cricket pitch, among other amenities.

In an exclusive interview with Auto Dealer Today/F&I and Showroom, Tilsley said plans for the new headquarters were already underway when Cox Automotive acquired Dealertrack in 2015, and no discussions about relocating to Cox’s Atlanta headquarters or another major city were held.

“Like most companies, we’re competing for talent. We want to attract people working in Manhattan to Long Island,” Tilsley said, noting that the cost per square foot of exercise, training, religious and maternity rooms would be prohibitive in an urban setting. “We can do that here.”

Tilsley noted that the new building stands between the Northern State Parkway and the Long Island Expressway, both of which are central transportation routes. Dealertrack will also send company shuttle buses to pick up employees at local train stations, while car commuters will have access to an 832-space parking lot and electric-vehicle charging stations. Despite the building’s size, Tilsley said it was designed with sustainability and carbon reduction in mind, and Dealertrack plans to be a good neighbor.

“We understand our role here in Nassau County and in Long Island,” Tilsley said. “All around the country, Cox has a great track record of working with local charities. We look forward to playing a bigger role in the community. We are an integral part of it.”

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“Gil Van Over has been among the few true movers and shakers in dealership compliance,” said David Gesualdo, show chair and publisher of Auto Dealer Today and F&I and Showroom. “We are lucky to have him and we look forward to his address.”

Van Over is the founder of gvo3 & Associates and the executive director of Automotive Compliance Education (ACE). His presentation will be part of the “Your Responsibilities” portion of the Compliance Summit agenda, which will also include sessions devoted to “Rules and Regulations” and “Easy-to-Implement Processes and Controls,” as well as “Is It Compliant?,” an open forum among speakers and attendees.

In addition to his speaking role, Van Over will lead the onsite, ACE-sponsored review session and exam for Automotive Compliance Specialist certification, which will be offered free of charge to Industry Summit attendees for the second consecutive year.

“I am honored to be part of the upcoming Compliance Summit,” Van Over said. “This robust and topical event covers a number of compliance-related topics while creating networking opportunities to share ideas and best practices. Included is a must-do ACE certification review and testing session.”

Registration for Industry Summit 2017 is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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This year’s awards were based on a comprehensive online survey open only to dealers and dealership professionals. They were invited to vote for their preferred vendors, suppliers, trainers and finance companies and score them on performance, value and whether they would recommend each company to another dealer.

“USEA has experienced positive growth in the past year, expanding to four additional states — Michigan, Vermont, New Mexico and Tennessee — to offer our AutoPayPlus automated biweekly payment service to more dealer partners,” said USEA CEO Robert Steenbergh. “This award is recognition of our continued ability to provide both the dealer and car buyer with value and an exceptional experience through the entire customer lifecycle; from helping car buyers better afford their loan payment and purchase additional F&I products to trading out earlier and returning to the dealer in a positive equity position.”

USEA dealerships sell approximately 57% more F&I products on biweekly deals as opposed to standard retail deals, according to the company’s 10-year analysis. In addition, results from USEA’s top dealer groups reveal a 63% increase in per-vehicle financed income on AutoPayPlus customers. The company’s dealer service support includes a dedicated team experienced in automotive retail finance and an online dashboard designed to allow dealer personnel track their deals and commissions in real time.

For a complete list of this year’s Dealers’ Choice Award winners, click here.

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NEW YORK — Concerns about a subprime auto finance crisis are no more, at least according to the S&P/Experian Consumer Credit Default Indices. It showed that default rates for auto loans have drifted down in the last four months, but not all consumer credit categories were a picture of health in May.

The composite rate for consumer credit defaults dropped four basis points from April to 0.86%. By segment, auto loan and first mortgage defaults decreased five basis points each from April to 0.85% and 0.64%, respectively. The bank card default rate, however, increased 13 basis points from April to 3.53% — a 48-month high.

"The pictures of auto loans and mortgages are quite different,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “At the beginning of the year there were reports of a sub-prime crisis in auto loans; these concerns seem to be behind us. The first mortgage default rate remains at 1%, lower than the pre-crisis period. Rising home prices and increases in the equity mortgage borrowers have in their home are helping lower default rates.”

Blitzer noted that one factor playing into rising bank card defaults and stable defaults on mortgages and autos are interest rates: about 4% on mortgages and 4.4% on auto loans, compared to 12%-18% on bank card loans.

He added that in the past, default rates began to climb around the same time the growth of bank card credit outstanding began to slow. He noted that year-over-year growth of bank card credit outstanding peaked at 6.8% last November and was at 5.7% in April, the latest figure available. Bank card defaults rose from 2.81% in November to 3.35% in April, and up to 3.53% in May.

When comparing the bank card default rate among the four census divisions, the default rate in the South is considerably higher than the other three census divisions. The East South Central Census Region — comprised of Kentucky, Tennessee, Alabama, and Mississippi — has the highest bank card default rate. As per the Bureau of Labor Statistics, these states have some of the lowest median household income.

"Easy come, easy go: bank cards, where borrowing money requires simply swiping a credit card, are experiencing rising defaults, while defaults on other kinds of consumer credit, which depend on paperwork, are flat or down," said David M. Blitzer, managing director  and chairman of the Index Committee at S&P Dow Jones Indices. "Default rates on bank cards are at the highest level since May 2013.”

Overall, four of the five major cities saw their default rates decrease in the month of May. New York experienced the largest decrease, down nine basis points from April to 1.01%. Los Angeles reported a default rate of 0.66% for May, dropping three basis points from the previous month. Dallas came in at 0.67%, down two basis points from April. Miami was down one basis point from April to 1.29%. At 0.97%, Chicago was the only city reporting a default rate increase of three basis points from the previous month.

Jointly developed by S&P Dow Jones Indices and Experian, the S&P/Experian Consumer Credit Default Indices represent a comprehensive measure of changes in consumer credit defaults. They track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien, and second mortgage lien. For more, visit www.consumercreditindices.standardandpoors.com.

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SAN FRANCISCO — Jumpstart Automotive Media has released its share of shopper interest data for the month of May. The report reveals that shopper interest across all luxury SUV/CUV segments is up 2% from April.

The report also shows that loyalty to midsize sedans is strong, with 49% of midsize sedan shoppers exclusively looking at vehicles in this category, and interest in midsize sedans across Jumpstart’s portfolio of sites is up for the second consecutive month (+4% in April and May). 

“As shopper interest in SUVs and CUVs has grown exponentially over the past few years, luxury auto brands have been expanding their lineups to include more size, feature, and price-point options. And we’re seeing that these brands are now experiencing broad audience appeal,” said Libby Murad-Patel, vice president of marketing and strategic insights for Jumpstart.

Murad-Patel added that, despite experiencing an 11% decrease in loyalty in 2015 and 2016, interest in midsize sedans has grown every month this year. “As loyalty continues to be a challenge, especially amidst the growth in SUV and CUV options, this is impressive.”

Among other findings, Jumpstart’s report revealed that the Ford EcoSport, Nissan Rogue Sport and Toyota C-HR are leading the charge in the subcompact SUV segment, which grew by 15% in May. Minivans drew 13% more shopper interest when compared to the year-ago period, led by the Chrysler Pacifica Hybrid and Honda Odyssey.

Toyota and Mazda both enjoyed 6% gains. In addition to the brand-new C-HR, interest in Toyota vehicles was led by the Yaris (19%), RAV4 (16%) and Corolla (15%). Mazda’s most sought-after models were the CX-9 (up 20%), MX-5 Miata (18%) and Mazda6 (17%).

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DALLAS — Organizers of F&I Think Tank announced that trainer and F&I futurist Tony Dupaquier will serve as emcee of this year’s event, which is being held as part of Industry Summit 2017 (Sept. 11–14) at the Gaylord Texan Resort & Convention Center in Dallas.

The announcement marks the return of Dupaquier to the Industry Summit stage. The more than 25-year industry veteran currently serves as director of training at The Academy, an Austin, Texas-based training firm focusing on dealership front-end operations. At F&I Think Tank, Dupaquier will guide the daylong event’s discussions, which begin at 9 a.m. on Thursday, Sept. 14.

“I am honored to emcee F&I Think Tank this year. We will look at F&I’s past, present, and where we’ll be in the future,” Dupaquier said. “We’re also going to talk best practices and technology, but ‘the customer’ will dominate F&I Think Tank in 2017. This is going to be one heck of an event.”

F&I Think Tank was created in partnership with Ethical F&I Managers, a more than 7,000-member Facebook group founded by F&I and Showroom’s “Mad” Marv Eleazer. The event was designed to recreate the information exchange that takes place daily in EFI by offering several open forum-type sessions that allow attendees to share ideas and techniques and pose tough-to-handle customer objections or situations to top F&I trainers and industry insiders.

This year, the event has added F&I 20 Group as a partner. The more than 10,000-member Facebook group was created by F&I trainer Shaka Dyson, who joins Dupaquier as one of several top F&I trainers on the F&I Think Tank Roster.

Dupaquier worked every position in variable operations and is a former Nissan National Walk-Around Champion. He is considered one of the industry’s most forward-thinking F&I and sales trainers and consultants, and been a featured speaker at the National Automobile Dealers Association’s annual convention, as well as numerous dealer 20 Group and dealer associations.

“Tony is best known for his Stump the Pro session at Industry Summit, and we’re excited to have him guide the discussions at F&I Think Tank,” said Gregory Arroyo, show chair and editorial director of F&I and Showroom and Auto Dealer Today magazines. “But he’ll have his work cut out for him. Yes, his role is emcee, but he’ll be responsible for refereeing what I expect will be passionate discussions and debate about the future of the F&I profession.”

Registration for Industry Summit 2017 is open at the event’s website. Attendees who register by Aug. 11 will enjoy a $100 discount. To discuss sponsorship and exhibition opportunities, contact David Gesualdo at (727) 947-4027 or via email.

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The car lease marketplace pointed to a higher-than-normal influx of applicants looking to take over higher end luxury leases, especially high-priced SUVs that come with payments in the $600s and $700s each month. Applicants for leases in this price range usually result in higher declines from applicants failing to meet the credit requirements of the lease company.

Year to date, the car lease credit approval rate has registered a monthly average of 61.1%, which compares to 67.7% for the same period last year. Over the last three months, the lease credit approval rate has averaged 62.1%.

“We’ve been tracking a rise in the number of people searching and attempting lease takeovers on higher-priced luxury SUVs recently,” said Scot Hall, executive vice president of Swapalease.com. “With a healthy economy and moderate fuel prices, we believe people are feeling confident in obtaining a higher monthly vehicle payment each month. Unfortunately, their attempts aren’t always successful, especially if their credit just doesn’t match the appetite for their desired vehicle.”

Swapalease.com matches a person wanting out of their existing vehicle lease contract with a car shopper looking to take over a short-term vehicle lease. The marketplace has several thousands of cars and trucks available for transfer to anywhere in the continental U.S.

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Despite the glimmer of positivity after February’s abnormally weak performance, the firm found that the 31-day period underperformed J.D. Power’s expectations for the month.

“In lieu of a mitigated February federal tax season bounce back, J.D. Power Valuation Services’ seasonally adjusted used-vehicle price index managed to increase for the first time in a year and grew 0.8% to 111.1,” the firm noted in its report. “While positive, May’s index figure was 7.6% below May 2016.”

At the segment level, mainstream segment losses were led by the usual suspect, mid-size cars. Wholesale prices for that segment fell by 2.6%. “Prices were weak for all mid-size models, but especially for the Nissan Altima, which experience declines around 4%,” the firm noted. “Additionally, late model-year Altima volume accounted for 20% of all mid-size car volume over the past few months, which has helped keep prices for the group depressed.”

Like their sedan counterparts, mid-size van values also softened. Prices for the segment fell 2%. Most of this was due to a 70% increase in 2017 model-year volume, which was traced back to an elevated number of Kia Sedona units returning to the marketplace, according to J.D. Power’s report.

“While at the opposite end of the spectrum, mid-size pickups continue to perform exceptionally well, despite a 37% year-to-date increase in late-model volume,” the firm stated. “On the luxury side of the market, luxury mid-size car prices tumbled by 2.6% following a strong April showing.”

Additionally, luxury large utility prices fell 2.1%, which was the segment’s worst May since 2012. The firm attributed the decline to a sharp 8% increase in month-over-month auction volume.

Conversely, luxury compact car prices remained strong and increased by a slight 0.1%. So far, according to the firm, year-to-date volume of luxury compact cars is down 10% compared to a year ago, ultimately aiding in strong prices for the group.

Looking at auction trends, auction sales volume of models up to eight years old fell 3% from the prior four-week period to 366,212 units. Volume for this age group of vehicles reached a lesser 360,394 units in May 2016.

Late-model vehicle volume, or units up to three years old, was essentially unchanged from April at 210,426 units. Late-model volume now sits at 1.24 million units through the first five months of this year, which is 7% greater than the 1.16 million units in the year-ago period.

At the segment level, late-model compact car volume was up 6% month over month, while large pickup and mid-size car volumes grew 2% and 1%, respectively. Subcompact car volume fell by 3%, while mid-size pickup and mid-size van volume decline 4% and 10% respectively.

For June, wholesale prices of vehicles up to eight years in age are expected to decline by approximately 1.9%, which would be slightly better than what occurred in June 2016.

At the segment level, mainstream losses are expected to be fairly consistent, with the exception of mid-size and large pickups. They continue to perform very strongly and are forecast to perform significantly better than the industry average. Losses for all premium segments are forecast to fall around the industry average.

“In terms of full-year expectations, used prices are expected to decline by around 6% in 2017, which is two points worse than 2016’s 4% loss,” the firm noted in its report. “Ongoing increase in supply, higher incentives, and a normalizing retail environment — including credit conditions — will ultimately dictate losses.”

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SOUTHFIELD, Mich. — A new global survey on consumer preferences for automotive technology finds more consumers desire advanced technology in their next new vehicle. However, their willingness to pay for technology demonstrates a wide variety of viewpoints from consumers across leading global markets, according to a new study conducted by business information provider IHS Markit.

More than 5,000 vehicle owners intending to purchase a new vehicle within the next 36 months were surveyed in the 2017 Automotive Connected Services and Apps Consumer Analysis, representing five key automotive markets: the United States, Canada, China, Germany and the United Kingdom. This is the fifth annual survey of its kind from IHS Markit. It was designed to identify key attributes for consumers, providing insight into preferences, desires and future interest as new-vehicle intenders return to market.

“This year’s survey includes consumer input on 31 technologies, from a variety of viewpoints,” said Colin Bird, automotive technology analyst for IHS Markit and co-author of the report. “Suppliers and automakers alike will be able to use these findings to help drive future business decisions and technology investments, while determining future product offerings.”

Comfort Comes First

Interestingly, creature comforts topped consumers’ interests at the top of the list of technologies those surveyed would be willing to pay for. Consumers in four regions reported the highest propensity to invest in a sunroof in their new vehicle, with consumers in Germany willing to spend an additional $642 USD to have their next new vehicle equipped with one. Consumers surveyed in China agreed to pay $440 for similar technology.

Alternatively, consumers in the U.S. were most likely to pay for a rear-seat entertainment system, indicating a threshold investment of an estimated $640. Rear-seat entertainment ranked second for UK and China audiences, with a price point of $388, but did not resonate as a top choice by consumers in any other region included in the survey.

According to IHS Markit forecasts, by 2022, significant volumes of new vehicles will be equipped with telematics (87% U.S.; 91% German; 92% U.K.; 89% Canadian; and 54% of Chinese vehicles) and more than half of the global fleet of vehicles in operation will be connected.

In comparison, 32% of all respondents surveyed agreed that telematics would be a feature they would be willing to pay for in their next new vehicle. In-car Wi-Fi was noted by 29%. However, when asked about cost, both technologies were mentioned with a much lower price point by consumers willing to pay for them and different price points that varied by region.

Roadside Assistance, Crash Notification, Navigation Are Top of Mind

More than half of all respondents indicated they already have at least one vehicle that featured an infotainment or navigation system that offered features such as roadside assistance, stolen vehicle assistance, crash notification or turn-by-turn navigation. These features garnered the most interest for future vehicles as well, across all geographies. 32% of respondents globally indicated roadside assistance as the most important telematics feature in a new vehicle, with stolen-vehicle assistance important to 28% of respondents.

Automatic crash notification and turn-by-turn navigation were both preferred by about 25% of respondents. The inclusion of real-time traffic information was overwhelmingly preferred by 51% of total respondents, with dynamic routing and a desire for maps to be updated wirelessly based on current conditions preferred by 41% for routing and 36% for wireless updates respectively.

For consumers surveyed in China, however, remote vehicle control from a smartphone was the most popular feature. More than a third of respondents in the region indicating that feature was most important to them. Respondents in China represented a slightly younger demographic than in other countries, with the vast majority living in urban centers where technology was more widely accepted.

Integrated Apps Are the New Radio

As in-vehicle technology continues its growth trajectory, so too does consumer desire to integrate their mobile apps into their vehicle. Among those surveyed, nearly all consumers who had familiarity with replicating their smartphone system onto an in-vehicle display indicated they were interested or somewhat interested in having this feature in their next new vehicle.

In addition, nearly half of all respondents indicated navigation apps as the leading use of smartphone apps in the vehicle. Weather apps followed with 40% of respondents using them in the vehicle, and 36% of respondents use music apps while in their vehicle. This creates significant opportunity for screen projection solutions, such as Apple CarPlay and Android Auto.

“Consumers expect a lot from their next vehicle,” Bird said. “Their expectations are constantly evolving as well, as consumers expect development and implementation of these technologies in vehicles to be introduced as quickly as consumer electronics such as smartphones and tablets. It’s up to OEMs and suppliers to determine how to best address these challenges and ramp up business plans accordingly.”

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