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ALSO Illinois State Quality Dealer: Richard OrmsbyPLUS The 3 Dimensions of Mobile Marketing for Dealers

A DEAL IS A DEAL?

I L L I N O I S I N D E P E N D E N T A U T O M O B I L E D E A L E R S A S S O C I A T I O N

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

V i s i t u s a t i l - i a d a . c o m

DEALER’S EDGE

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

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T H E D E A L E R ’ S E D G E SEPTEMBER/OCTOBER 2011

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i l - i a d a . c o m

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM • WWW.NIADA.TVNIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR [email protected] DEALER’S EDGE IS PUBLISHED BI-MONTHLY BY THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORATION, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203; PHONE (817)640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT ADDITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDI-VIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF THE DEALER’S EDGE, THE ILLINOIS INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION, OR THE NATIONAL INDE-PENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEMBERS OF IIADA OR NIADA, DOES NOT CONSTITUTE AN EN-DORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPY-RIGHT © 2011 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED. VISIT THE NIADA WEB SITE AT WWW.NIADA.COM. STATE MAGAZINE MGR./SALES Troy Graff • [email protected] Mike Harbour • [email protected]/PRODUCTION MGR. Christy Haynes • [email protected] Nieman Printing

ADVERTISERSINDEXAFC – Automotive Finance Corporation ...... 7AutoTrader.com ........................... Back CoverCars.com ................................................... 11Chase .......................................................... 16Chicago Car Auction .................................... 5Dyer Auto Auction .................................... 20Insurance Auto Auctions ............................. 17Leedom Group .......................................... 13Lohman Companies ........... Inside Front CoverManheim.com ............................................. 18Protective ..................................................... 3ShipCarsNow .............................................. 19Smart Auction .................... Inside Back CoverTD Auto Finance ........................................... 9United Acceptance ..................................... 15

DON’T FORGET TO VISIT OUR WEBSITE FORIMPORTANT INFO: WWW.IL-IADA.COM

ChairmanRandy CraseCrase Auto Connection25355 E. Ames St.Channahan, IL [email protected]

PresidentGordon TormohlenTormohlen’s Good People Automotive1800 S. Ihm Blvd.Freeport, IL [email protected]

1st Vice PresidentAnthony FerraroPayless Motorsport13449 S. Pulaski RoadRobbins, IL 60472708-388-2300 [email protected]

TreasurerLori Chignoli-CoraChignoli Auto Sales1850 Essington RoadJoliet, IL [email protected]

SecretaryEric NelsonNelson Automotive Inc.1801 S. BusseMt Prospect, IL [email protected]

Directors:Mark AlcornCarlyle Auto Sales1708 BroadwayRockford, IL [email protected]

Paul GluchowskiTurner Acceptance4454 N. Western Ave.Chicago, IL [email protected]

Melanie BrownChicago Car Auction2731 Belvidere RoadWaukegan, IL [email protected]

Amy Goodnight Lohman Companies 3901 15th St.Moline, IL [email protected]

Alex TovstanovskyPrestige Motor Works Inc.8959 Hanslik CourtNaperville, IL [email protected]

Janette PeakPJP Auto Enterprise3100 S. Douglas Springfield, IL [email protected]

FOR INFORMATION ON HOW TO BECOME A MEMBER OF IIADA, PLEASE CONTACT BRUCE EKLUND AT 800-987-6627 OR [email protected].

Board of Directors

MAGAZINECONTENTSINSIDE

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4 2011 Illinois State Quality Dealer: Richard Ormsby

6 A Deal is a Deal? 8 The 3 Dimensions of Mobile Marketing

for Dealers

Ormsby Motors has deep roots in Crystal Lake, Ill., dating back to 1918 when Richard “Dick” Ormsby’s grandfather started an auto repair shop operating across the street from the dealership’s current location. Richard is Illinois’s 2011 State Quality Dealer and began his automotive career at that dealership as a lot boy in 1959.

The dealership has been a successful business through the best of times and the worst of times. Dick says their philosophy of keeping employees happy has played a huge role in that success. One of those happy employees has been there 43 years and will testify the family has always had great business ethics and given their best for their customers.

That willingness to help has spilled over into the community where the dealership has sponsored Little League Baseball for more than 50 years and has been a “long time, faithful member” of the local Chamber of Commerce. Dick also served on the Downtown Crystal Lake Main Street Committee, generously contributing equipment, facilities and know-how, and has remained a Friend of Scouting throughout the years.

Dick and his dealership, now a fifth generation home-town business, have set an example of high standards and integrity as an active member of the Illinois IADA and NIADA. In June, he was recognized and honored along with the 17 other state quality dealers during the National Quality Dealer Awards Banquet at the 65th Annual NIADA Convention and Expo in Las Vegas, Nev.

2011 Illinois State Quality Dealer: Richard Ormsby

t

The Manheim Used Car Market Report (UCMR) is the definitive source of information and trends that shape wholesale

and retail used vehicle markets. The 2011 Mid-Year Report strives to help readers navigate an automotive industry facing rapid change. NIADA members may download a FREE copy of the Mid-Year UCMR via the instructions below. And new for 2011 – the Mid-Year UCMR is now available via iPhone, iPad and Android devices at no additional charge in addition to being available via the traditional .pdf format.

Free Mid-Year Used Car Market Report

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www.stopcurbstoning.com

A Used Car Field Guide for Detecting Collision Repair

It used to be fairly easy to spot the signs of a collision repair: overspray, bad color matching, and misaligned body panels. Now, with computers assisting with everything from frame straightening to color matching, it’s a lot harder to tell if a vehicle has been in a collision, especially if the repair was done well.

That’s great if you want your car �xed after an accident. But it makes things hard if you’re looking for a good used car.

NOTE: We’re not saying to avoid any car that’s had bodywork. A vehicle that’s been properly and professionally repaired after a minor fender-bender could be a terri�c bargain. We are saying to watch for disparities between what a seller says and what his or her vehicle shows.

Of course, no one can catch all the bad cars. That’s why an inspection by a trusted, experienced mechanic, along with a

vehicle history report form a service like AutoCheck, are absolutely vital steps to take before payingmoney for any used car from a private party.

However, here are some quick, simple things you can watch for when you’reout looking at cars. One element on your side is simple greed: curbstoners want to maximize their pro�ts. After all, they only need to fool a buyer long enough to collect the cash. So, curbstoned cars rarely get top-notch repair treatment.

At A GlanceA walk around the vehicle in good light will often disclose whether or not a body panel has been replaced or repainted. Look at thecar from several angles to make sure the color matches across all the body panels.

Look also at the re�ections in the paint – factory paintwork is mirror-smooth, even when dirty or dinged up. Signs of repair often reveal themselves in a slightly rippled re�ection, or a re�ection that doesn’t exactly line up across two body panels. Be sure to look at re�ections from several angles.

If the car is so dirty that you can’t see re�ections, you might need to ask for the car to be washed. While you’re sighting down the sides of the car, check to make sure the body panels all �t �ush, and that the gaps between the panels are even from top-to-bottom and side-to-side.

Good places to look for paint overspray or excess paint include:

Around electrical conduits in door jambs

Near door, hood, and trunk hinges

On window and door seals

Around seals and �ttings in the engine compartment �rewall

Along the trim pieces inside wheel wells

Sun damage typically affects large body surfaces like hoods and roofs. When you see small patches of peeling clear-coat, especially in corners and other hard-to-reach areas, they may indicate a poorly prepped paint job.

At the same time, beware of too-perfect paint. Even a garaged, well-cared-for used vehicle will have small paint chips and even minor dings. If the chin fascia beneath the front bumper is pristine, it may have been recently replaced or repainted.

We know that used auto buyers today must navigate a minefield of unscrupulous sellers and haphazardly repaired vehicles. Among the worst offenders are “curbstoners” – unlicensed individuals who buy and sell used cars to make a quick buck from unwary victims.

That is why we put together a handy guide to help used auto buyers detect collision repair. “A Used Car Field Guide for Detecting Collision Repair,” is an online booklet full of useful tips for spotting subpar repair work, ensuring there are no disparities between what a seller says and what the vehicle shows.

To access the booklet, visit stopcurbstoning.com.

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Free Mid-Year Used Car Market Report

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Retailers • Rental Operators • Salvage Dealers • Wholesalers

AFC local branches provide inventory �nancing solutions, including lines of credit for:

To learn more or apply for your AFC line of credit, contact your local Area Sales Manager:

Michelle and Mandy - AFC Indianapolis Representatives

INVENTORY FINANCING SOLUTIONSNATIONAL COMPANY. LOCAL BRANCHES.

Experience the highest level of customer service with AFC!

Je� MartinArea Sales Manager

815-641-5042Email: Je�.Martin@auto�nance.com

A Dealis a Deal?B Y Z U R I C H F I N A N C I A L S E R V I C E S G R O U P

NEW FEDERAL AND STATE CONSUMER LAWS ARE PASSED

EVERY YEAR, SO IT IS IMPORTANT TO UNDERSTAND

AND EDUCATE DEALERSHIP

PERSONNEL ON HOW TO COMPLY.This Loss Prevention Bulletin is provided for informational purposes only. Please

consult with qualified legal counsel to address your particular circumstances and needs. Zurich is not providing legal advice

and assumes no liability concerning the information set forth above.

FACTS

It should be no surprise to you how many federal consumer laws and regulations affect the typical

automobile dealer. The Truth in Lending, Equal Credit Opportunity and Fair Credit Reporting acts are all too familiar. The same is true of regulations Z and B and the various Federal Trade Rules, including the Used Car Rule. Then, of course, there are state unfair business practice acts, common law fraud, misrepresentation and improper disclosure to consider.

The fact is you must be more careful than ever to ensure a deal is put together the right way. As the stack of paperwork that must be signed by your customer grows, so does the opportunity for mistakes and mistakes can cost you money – perhaps far more money than you realize. The winter issue of The Specialist reported a recent fraud and failure-to-disclose situation where a dealer’s customer was awarded $218,000 in punitive damages (not insurable in many states) as the result of a lawsuit involving damage disclosure. The customer was told the vehicle was “in perfect condition,” “had never been wrecked” and was a “one-owner vehicle.” Evidence later proved none of these assertions were true. Take appropriate measures to protect your dealership from damage disclosure and truth in lending complaints and lawsuits.

We offer the following suggestions:MANAGEMENT ISSUES• Provide extensive training to sales and F&I personnel on all consumer laws.• Have legal counsel review all sales, leasing and other applicable documents for compliance with federal, state and local laws.• Implement a vehicle sales checklist to establish standard procedures for staff.• Have customer sign or initial forms as needed.• Establish policies to address ethical business practices and ensure your management team abides by them.TRADE-INS• Perform a title search to verify mileage, past ownership and lien holders.• Develop and use a seller’s disclosure, customer title disclosure and trade-in certification or equivalent forms to document mileage, prior damage, airbag deployment, salvage vehicles, frame damage, etc.• Odometers must be inspected carefully for rollback, replacement or tampering.• Vehicle appraisers (and managers) must be diligent in evaluating trade-ins and determining prior damage manager.

AUCTION VEHICLES• Use a title search firm or state agencies to check vehicle history.• Deal with auctions that guarantee the title is free and clean.• Don’t purchase vehicles with prior frame damage.

RETAIL TRANSACTIONS• In conjunction with legal counsel, consider developing and implementing a buyer’s arbitration agreement requiring the customer to seek relief through an arbitration process in lieu of litigation. We neither recommend nor disfavor arbitration agreements. This is a business decision that only you and your advisors can make. Note: as of Jan. 1, 1999, the American Arbitration Association (AAA) will not administer an arbitration proceeding if the signed agreement does not meet minimum standards established by its National Disputes Advisory Committee. The AAA’s Consumer Due Process Protocol includes a statement of 15 principles intended to protect consumer rights.• To avoid being held financially responsible to a creditor deemed unsecured by a bankruptcy court, process the title work promptly to ensure timely perfection in all cases within 20 days after the vehicle is delivered.• If the customers’ creditworthiness is questionable, delay the delivery as the 20 days noted above does not begin until the vehicle is delivered.• Be very cautious with deals involving out-of-state paperwork or missing titles, it may be difficult to process the necessary title paperwork• Videotape the sales transaction in the business office, but only after the customer (and your employee) voluntarily agree to be videotaped. Consult your legal counsel to determine how long the tape should be kept and the potential risk of not taping or saving all transactions. While videotaping can be a good idea, it isn’t one you should proceed to undertake without careful thought of all ramifications. New federal and state consumer laws are passed every year, so it is important to understand and educate dealership personnel on how to comply. Your legal counsel and auto dealer associations are excellent resources for keeping appraised of these new regulations. Contact your local Zurich account executive for additional information on how these laws affect your business. If you have any questions or comments, contact your Zurich account executive or the Loss Prevention Department at 800-821-7803.

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Retailers • Rental Operators • Salvage Dealers • Wholesalers

AFC local branches provide inventory �nancing solutions, including lines of credit for:

To learn more or apply for your AFC line of credit, contact your local Area Sales Manager:

Michelle and Mandy - AFC Indianapolis Representatives

INVENTORY FINANCING SOLUTIONSNATIONAL COMPANY. LOCAL BRANCHES.

Experience the highest level of customer service with AFC!

Je� MartinArea Sales Manager

815-641-5042Email: Je�.Martin@auto�nance.com

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FACTS

The 3 Dimensions of Mobile Marketing for Dealers

88 percent of mobile phone users said they’d be more likely to buy a vehicle from a dealer with a mobile website. Having a mobile website can significantly increase your ability to engage potential customers and sell autos. However, not having one can seriously limit your ability to compete with tech-savvy dealers.

When it comes to the design of your mobile website, simplicity is crucial. It should have minimal words and pictures. Then, visitors will feel comfortable browsing your inventory on their phones. Try using touchable text and large buttons. That’ll make it easier for visitors to ‘thumb-surf ’ through your site and contact you. Don’t hide critical information such as your phone number or email address in a graphic. Remember, visitors are likely to abandon your mobile site if they can’t easily access information they want.

If you have a mobile website but don’t feel like you’re getting enough value yet, it may pay to consider mobile marketing resources such as those offered by AutoRevo. The company’s proven techniques help dealers boost online response rates so they can sell more. For example, some dealers use AutoRevo mobile tools to help sell inventory on Facebook Marketplace or eBay. Other dealers like to track performance metrics of their mobile website and paid search campaigns to help identify areas of their business that need improvement.

2ND DIMENSION – WHY LOCAL SEARCH IS VITAL

Now that you know how valuable your mobile website can be, it’s time to start promoting it. Then, Internet search engines and more shoppers can find you online. Focus on local search marketing – it’s your best opportunity to see results fast.

Did you know researchers saw a 500-percent increase in mobile searches from 2008-2010? Not surprisingly, they found Google to be the most frequently used search engine. So make sure your dealership and mobile website are visible on Google Places. Then, shoppers can find you faster.

Luckily, claiming your business listing with Google Places is a free, straightforward process – just follow the instructions online at google.com/places. To help shoppers find your mobile site while searching, you’ll want to use keywords on Google Places such as: used cars, your city, your dealership name, and, for franchise dealers, your OEM affiliation. Also, include your

local phone number and a link to your mobile website.

You can add up to 10 photos and five videos on Google Places. Use these as opportunities to show customers why your dealership is the best place to buy. For example, the logo used by Carfax Advantage Dealers helps them stand out and build confidence with online buyers. It shows shoppers that every auto sold comes with a free Carfax Vehicle History Report. The power of a trusted brand can give you an edge over other dealers in your area.

Important: When it comes to search marketing, it’s important to avoid duplicate content between your main and mobile websites. Otherwise, it could have a negative impact on your search rankings. In other words, don’t run your mobile website on the same exact URL as your main website.

Try using variations like: m.yourdealership.com, mobile.yourdealership.com or yourdealership.mobi to make your mobile URL appear different to the search engines. Without a unique web address, your mobile site runs the risk of penalty for duplicate content by Google.

3RD DIMENSION – QR CODES AND THE FUTURE

If you’re ready to try something new, tell your marketing team to include a Quick Response (or QR) code with your next newspaper or print advertising opportunity. It can instantly turn an offline consumer into an online shopper.

Today, QR codes are one of the hottest trends in mobile marketing. These black and white barcodes are generally the size of postage stamps, and link users to mobile websites. You simply scan a barcode with your smartphone from a printed piece and are sent to a specific mobile website. It’s great for marketing because it’s a curious way to get consumers to interact with your dealership.

A relatively new technology, QR codes saw a reported 1,200-percent increase in scanning from July to December 2010. This fast and engaging marketing method could be the way you take business to the next level.

Most of us couldn’t get through the day without our smartphones or mobile devices. Yet many independent dealers haven’t even attempted to reach this massive mobile audience. With so much opportunity out there, you need the right mobile marketing strategies in place to engage a greater number of shoppers and sell more vehicles.

B Y C H A D G O O D S O N , P R O C E S S I M P R O V E M E N T M A N A G E R , C A R F A X

Did you know there are about 300 million mobile phones in the U.S. active today? That’s practically

one for every American. We rely on smartphones to help do our jobs, keep up with current events and shop for things like used autos. Indeed, phones today can do almost anything and are the constant center of attention for many of us.

The prominence of our phones provides greater opportunity for dealers to reach potential customers more efficiently and effectively. However, you need a proven search marketing strategy to successfully capture the attention of this massive audience and sell more vehicles. If you’re an independent dealer, you need to know the three dimensions of mobile marketing.

1ST DIMENSION - YOUR MOBILE WEBSITE

You need a mobile website to stay competitive in today’s used vehicle marketplace. Why? Customers expect you to have one. A recent survey showed

TO HELP SHOPPERS FIND YOUR MOBILE SITE WHILE SEARCHING, YOU’LL WANT TO USE KEYWORDS

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Independent Auctions: The Dealer’s FriendBY JOHN POTEET, MANAGING PARTNER, LOUISIANA’S 1ST CHOICE AUTO AUCTION

More than half of the 316 auto auctions in the National Auto Auction Association

(NAAA) are independently owned and operated. Those 176 independents make up the largest group of auctions in the NAAA and include some of the most innovative, creative entities in the industry. When it comes to customer service and dealer responsiveness, this group is second to none.

Independent auctions are very similar to independent dealers because they are often family-owned businesses and may have only one location. Yet, no matter how large or small, they understand – just as independent dealers do – the importance of customer service. When dealers visit an independent auction, they are often dealing with the owner of the business; that can make a difference in how quickly issues are resolved because owners know how important it is for an independent to get things done effectively and efficiently.

Many dealers believe independent auctions may not have the technology or the products of a chain auction, but that’s far from the truth. The services offered by independent auctions rival the latest in auction offerings by the large chains. Independents offer the basic services a dealer would expect from an NAAA auction, and most offer other services such as reconditioning, mechanical work, and transportation. In addition, many offer live simulcast sales, Internet sales through OVE, SmartAuction, or OpenLane, post-sale inspections, and array of floor planning services including MAFS, AFC, and DSC among others.

The influence of independent auctions is felt throughout the industry. Owners and managers play pivotal roles in arbitration standards, industry legislation, electronic condition reports, and NAAA standards for certification. The impact of independents is so significant 10 of the last 15 and four of the last five NAAA presidents have come from independent auctions.

Louisiana’s 1st Choice Auto Auction sums up the independents devotion to service with one Cajun French word, “lagniappe.” Pronounced LAN-yap, it means that little something extra you get when doing business with a merchant. The auction adopted this philosophy when it opened for business in 2002 to convey to dealers they were more than customers, they are special. Managing Partner John Poteet also believes outstanding service begins with outstanding people, and the tradition of lagniappe is perpetuated by the employees’ drive to go above and beyond the customers’ expectations.

An important component of Louisiana’s 1st Choice Auto Auction’s success is the commitment to the latest and best technology for their dealers. Many independent auto auctions in the NAAA are on the cutting edge of auction technology which enhances the customer experience, even when the dealer can’t see the technology in action. This goes from the latest in auction software to implementing platforms such as Auction Pipeline, AWG simulcast, Auction Access, and social networking sites such as Facebook and Twitter. As technology advances, independents are searching for better and faster ways to please their customers and make their employees more efficient.

Of course, as dealers become more technologically sophisticated, auctions must respond to their needs. For example, Louisiana’s 1st Choice Auto Auction offers free Wi-Fi for dealers enabling them to use their wireless devices to get the latest information regarding in-sale vehicle information. Another important tool for buyers is the ability to buy online with a simulcast auction. However, sellers can also utilize simulcast to sell vehicles. This is a great feature allowing remote repping for dealers and institutional sellers who cannot attend the auction.

According to Poteet, dealers can still buy and sell in the lanes as always, but at Louisiana’s 1st Choice, they also have the options of using simulcast, or buying and selling 24/7 with OVE, OpenLane, SmartAuction, and Auction Pipeline. This choice of buying and selling platforms is unique to independent auctions and gives dealers a greater opportunity to conduct business than any other venue.

MANY DEALERS BELIEVE

INDEPENDENT AUCTIONS MAY NOT HAVE THE

TECHNOLOGY OR THE PRODUCTS OF A

CHAIN AUCTION, BUT THAT’S FAR FROM

THE TRUTH. THE SERVICES OFFERED BY INDEPENDENT

AUCTIONS RIVAL THE LATEST IN AUCTION OFFERINGS BY THE

LARGE CHAINS. --- JOHN POTEET, MANAGING PARTNER,

LOUISIANA’S 1ST CHOICE AUTO AUCTION

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SEVENTY PERCENT OF BHPH SHOPPERS REGULARLY USE THE INTERNET

Key Messages to Communicate Focus on Approval: Since approval is a BHPH shoppers’ top concern, messages about financing approval should take precedence in BHPH dealer advertising – both online and offline. Talk about Speed of Process: When making a dealership selection, many BHPH shoppers are interested finding a dealer who can handle the vehicle purchase process quickly, according to the study. The good news is 83 percent of BHPH dealers complete the buying process in two hours or less. As a result, this message is an important one to include in your advertising. For example, “Get Your Car in Less Than 2 Hours!” Consider Reporting Customer Payments to Credit Bureaus: Only 37 percent of BHPH customers’ payments appear on their credit report; however, 63 percent of BHPH customers would like their payments reported. As a result, BHPH dealers should consider using messages such as, “We Can Help You Rebuild Your Credit.” Just be sure, if you advertise this message, you can follow through on it. Also, don’t forget to vet this message with your legal counsel.

Understanding Buy Here-Pay Here Customers: 2011 BHPH Buyer Study from AutoTrader.com Word count: 619 In October 2010 and January 2011, the National Alliance of Buy Here-Pay Here Dealers (NABD) and AutoTrader.com teamed up for a groundbreaking study to define the consumer profile of the average BHPH customer and to understand the unique shopping needs of this customer segment. The two-part study included qualitative focus groups conducted in Los Angeles and Dallas and a national quantitative online survey among 606 BHPH buyers who purchased within the previous 18 months. The results of this study affirm for the first time many common perceptions among the BHPH community about the priorities and behaviors of BHPH customers. There are also some new findings about their Internet usage as well as the amount of research BHPH shoppers are conducting prior to visiting a dealership. Finally, we identify key messages BHPH dealers can focus on to more effectively target their advertising and influence BHPH shoppers during the shopping process. Consumer Profile of the Average Customer BHPH Buyers vs. Traditional Buyers

58% Female

50% Female

39 Years Old

47 Years Old

<$50k Annual Income

>$50k Annual Income

44% Married

60% Married

Poor Credit Rating

Excellent/Very Good Credit Rating

The Findings Four out of five BHPH customers conduct research before visiting the dealership. According to the study, 81 percent of BHPH vehicle buyers said they performed either some or a great deal of research as part of the car shopping process before going to a dealership compared to the 19 percent who stated they conducted very little research.

Key Messages to Communicate Focus on Approval: Since approval is a BHPH shoppers’ top concern, messages about financing approval should take precedence in BHPH dealer advertising – both online and offline. Talk about Speed of Process: When making a dealership selection, many BHPH shoppers are interested finding a dealer who can handle the vehicle purchase process quickly, according to the study. The good news is 83 percent of BHPH dealers complete the buying process in two hours or less. As a result, this message is an important one to include in your advertising. For example, “Get Your Car in Less Than 2 Hours!” Consider Reporting Customer Payments to Credit Bureaus: Only 37 percent of BHPH customers’ payments appear on their credit report; however, 63 percent of BHPH customers would like their payments reported. As a result, BHPH dealers should consider using messages such as, “We Can Help You Rebuild Your Credit.” Just be sure, if you advertise this message, you can follow through on it. Also, don’t forget to vet this message with your legal counsel.

Understanding Buy Here-Pay Here Customers2 011 B H P H B U Y E R S T U D Y F R O M A U T O T R A D E R . C O M

In October 2010 and January 2011, the National Alliance of Buy Here-Pay Here Dealers (NABD) and AutoTrader.

com teamed up for a groundbreaking study to define the consumer profile of the average BHPH customer and to understand the unique shopping needs of this customer segment. The two-part study included qualitative focus groups conducted in Los Angeles and Dallas and a national quantitative online survey among 606 BHPH buyers who purchased within the previous 18 months.

The results of this study affirm for the first time many common perceptions among the BHPH community about the priorities and behaviors of BHPH customers. There are also some new findings about their Internet usage as well as the amount of research BHPH shoppers are conducting prior to visiting a dealership. Finally, we identify key messages BHPH dealers can focus on to more effectively target their advertising and influence BHPH shoppers during the shopping process.

CONSUMER PROFILE OF THE AVERAGE CUSTOMERBHPH Buyers vs. Traditional Buyers

The FindingsFour out of five BHPH customers

conduct research before visiting the dealership. According to the study, 81 percent of BHPH vehicle buyers said they performed either some or a great deal of research as part of the car shopping process before going to a dealership compared to the 19 percent who stated they conducted very little research.

Seventy percent of BHPH shoppers regularly use the Internet; that’s as much as traditional shoppers for general purposes. However, BHPH car buyers do not use the Internet for vehicle shopping as much as traditional auto buyers.

With four out of five shoppers conducting research prior to visiting a dealership coupled with the high percentage of BHPH customers already online, the implication is there’s an opportunity for BHPH dealers to reach and influence their shoppers by tapping into the online automotive space with advertising messages and information that resonate with the targeted consumer.

It’s important for BHPH dealers to align their advertising with the unique needs of BHPH shoppers. The need for financing approval drives the shopping process for BHPH shoppers. Nearly two out of three BHPH customers enter the process with securing financing or identifying a dealer as their first priority. While this information is in line with what the BHPH industry has long suspected, the key is to align your advertising messages with the shopping priorities of your customer base. Effectively communicating the right messages in your advertising may dramatically improve the chances of turning a shopper into an actual customer.

First Step in the Shopping Process

KEY MESSAGES TO COMMUNICATEFocus on Approval: Since approval is a BHPH shoppers’ top concern, messages about financing approval should take precedence in BHPH dealer advertising – both online and offline.

Talk about Speed of Process: When making a dealership selection, many BHPH shoppers are interested finding a dealer who can handle the vehicle purchase process quickly, according to the study. The good news is 83 percent of BHPH dealers complete the buying process in two hours or less. As a result, this message is an important one to include in your advertising. For example, “Get Your Car in Less Than 2 Hours!”

Consider Reporting Customer Payments to Credit Bureaus: Only 37 percent of BHPH customers’ payments appear on their credit report; however, 63 percent of BHPH customers would like their payments reported. As a result, BHPH dealers should consider using messages such as, “We Can Help You Rebuild Your Credit.” Just be sure, if you advertise this message, you can follow through on it. Also, don’t forget to vet this message with your legal counsel.


With four out of five shoppers conducting research prior to visiting a dealership coupled with the high percentage of BHPH customers already online, the implication is there’s an opportunity for BHPH dealers to reach and influence their shoppers by tapping into the online automotive space with advertising messages and information that resonate with the targeted consumer. It’s important for BHPH dealers to align their advertising with the unique needs of BHPH shoppers. The need for financing approval drives the shopping process for BHPH shoppers. Nearly two out of three BHPH customers enter the process with securing financing or identifying a dealer as their first priority. While this information is in line with what the BHPH industry has long suspected, the key is to align your advertising messages with the shopping priorities of your customer base. Effectively communicating the right messages in your advertising may dramatically improve the chances of turning a shopper into an actual customer. First Step in the Shopping Process


With four out of five shoppers conducting research prior to visiting a dealership coupled with the high percentage of BHPH customers already online, the implication is there’s an opportunity for BHPH dealers to reach and influence their shoppers by tapping into the online automotive space with advertising messages and information that resonate with the targeted consumer. It’s important for BHPH dealers to align their advertising with the unique needs of BHPH shoppers. The need for financing approval drives the shopping process for BHPH shoppers. Nearly two out of three BHPH customers enter the process with securing financing or identifying a dealer as their first priority. While this information is in line with what the BHPH industry has long suspected, the key is to align your advertising messages with the shopping priorities of your customer base. Effectively communicating the right messages in your advertising may dramatically improve the chances of turning a shopper into an actual customer. First Step in the Shopping Process

BHPH

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VIDEO

Online video continues to increase in popularity among auto shoppers. Video brings vehicles to life in a way photos just can’t. Sight, sound and motion make it more emotional and engaging for viewers. As a result, video is a powerful merchandising tool that can help influence shoppers to not just buy your make and model, but to buy it from you.

Video Facts• More than 75 percent of Internet users

watch video online• 50 percent of consumers watch videos

while shopping for a car• 66 percent of car shoppers would watch

more video if it were available • 72 percent of shoppers are more likely to

buy a product or service when a video is used

What You Can DoFirst, let’s talk about where you should

be posting videos online. It’s not just about a video’s content – the key is in the wide distribution of your videos. It doesn’t matter how good the video itself may be if it’s not being seen by auto shoppers.

According to an AutoTrader.com Video Survey, vehicle shoppers say they expect to find videos on dealership sites, manufacturer sites and independent sites such as AutoTrader.com. Therefore, it is critical for automotive advertisers to place video content in front of all potential customers. Don’t forget about video sites like YouTube, too.

Now that you know where you’re going to be posting your videos, let’s talk content.

Do-It-Yourself VideosDo a complete video walk-around. Give

shoppers a sense of what it would be like to drive and own the car.

Keep videos to less than one minute. Shoppers will often lose interest if a video is too long.

State the facts. Include price but keep information objective to avoid a sales pitch.

Include information that cannot be gained from photos. (i.e., warranty, single owner, non-smoker, etc.)

Reinforce the retention of information. Show what you are talking about (i.e., show the odometer while talking about mileage).

Use Pan-and-Scan VideoConsider using pan-and-scan videos.

AutoTrader.com offers a personalized, video solution called FastAds that’s based on this technology. This option allows you to use vehicle photos and easily turn them into a virtual walk-around video, narrated by a

voiceover with a custom script. It’s a very convenient and easy tool that can effectively showcase any vehicle you are trying to sell.

Leverage Manufacturer AssetsYou don’t always have to make a homemade

video to communicate the message. Most OEMs will have video assets available for your use, so use them when you can’t use the other two options I mentioned already, or use them in conjunction with a do-it-yourself or pan-and-scan video. If you are participating in a manufacturer’s certified pre-owned program, it’s a great opportunity to leverage these assets as many manufacturer’s have commercials specifically dedicated to the CPO message.

Merchandise Your Dealership in a Video, Too

So far, we’ve only focused on videos about your inventory, but your online marketing is about much more than the vehicles you sell. Building confidence in your capability as a dealership is just as important in getting shoppers to choose you.

Tell your story. Do a store video tour and highlight amenities and departments. Show customers why you are a dealership they should do business with.

Use customer testimonials videos. Build a strong image for your prospective customer.

Include dealership information. Be sure to incorporate your contact information, website address, map and directions.

Post your videos on a multitude of sites. Include user-generated sites such as YouTube and other social networking sites, as well as your dealership site, independent sites and anywhere else your inventory is listed.

Howard Polirer is the director of industry relations for AutoTrader.com. He has helped train more than 10,000 dealers in over 200 cities across the U.S. on the industry’s best practices to reach automotive consumers. He can be reached at [email protected].

BY H O WA R D P O L I R E R

Telling Your Value Story with Video

DR IV ING TR AFF IC

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We have all heard the latest advertising strategy adopted by a growing number of auto dealers. Refrains from “I’m

online only,” and “…print advertising doesn’t work anymore” are fairly common. There are very compelling reasons to adopt this posture as a part of an overall marketing plan for a dealership. Data suggests most auto buyers use the internet to educate themselves about manufacturers, specific vehicles and pricing.

Many dealers report people to their showrooms come armed with printouts of vehicles available for sale at other dealers (even if those autos are from outside the market they are in), with the latest on rebates, trade-in values and anything else they can find online to aid in their attempts to drive the selling price downward.

A dealer who uses a website, dealer feeds and e-mail leads as their sole tools for selling vehicles is missing a large portion of the buying public. Industry reports show niche publications remain a viable and effective tool for driving traffic to lots – both franchise and independent.

The 2009 NIADA Used Car Industry Report, the 2008 Northwood Dealer Walk-in Study and the NADA Data Report show the Internet is the number one media source driving walk-in traffic. According to these studies, the next best driver of walk in traffic is not newspapers, radio, TV or direct mail. The report discovered the most

effective choice of media other than the Internet is classified magazines.

An advertising plan that combines Internet advertising and a classified magazine provides nearly 70 percent of all walk-in traffic generated by advertising. It is critical this migration of buyers from daily newspapers to niche publications that feature the inventories of local dealers be recognized by all size dealerships. If there is an automotive classified magazine in your market, you can be sure dealers using this marketing tool are enjoying excellent response to their printed message.

HOW DO WE KNOW THIS?Telephone call tracking reports, as well as

the significant number of copies of these print products that are picked up each and every week demonstrate the car-buying public rely on this form of advertising to help them in their decision-making process.

For example, in the Bay Area, there is a print product (Bay Classifieds) that moves more than 40,000 copies every week. This publication, available in thousands of locations, is gobbled up 52 weeks a year by people who make the conscious choice to look for the latest copy.

In the area around rural Oroville, Calif., Great Northern Wheels & Deals sees nearly 25,000 copies of its publication gobbled up each and

every week. Throughout California, from the Recycler in Los Angeles to The Nickel in Redding, auto buyers consistently grab their copy of these publications.

If print is really dead, how do we explain this consistent demand from buyers for a print product that provides them with information from which they can make an informed buying decision? Shouldn’t we have seen an eroSion of demand for these products “…because everyone shops on the Internet?”

The publishers of these and other niche publications report strong demand for the products, and are proud of the product’s ability to generate e-mail leads, telephone calls and walk-in traffic. These print products provide dealers, large or small, the opportunity to tell a story about what makes their stores unique. Many dealers report customers walking onto lots with the print product in hand asking to see a particular car featured in a print ad. This is likely the best quality up a dealer can hope for.

Contrasting that type of potential buyer to some of the Internet leads dealers receive from all over the country, we can see the local buyer carrying a local publication and talking to a local dealer is what every dealer would like to have more of. Kevin Aylmer is vice president for Target Media Partners and an IADAC associate member and supporter.

Is Automotive Print Advertising Dead (or Dying?)

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1. SELL SAFETY! Quality and performance are givens. But safety is still a priority and concern for women. Women are often thinking about their family members or their growing family when purchasing a vehicle. For a used vehicle, they will definitely ask questions about previous owners and will review Carfax history report. Be sure you are ready to answer.

2. SELL SPACE! Women don’t have to have big cars, but like closets and nooks in a home, women want spaces or places to put and tuck stuff…sunglasses, coffee cups, luggage, shopping bags, snacks for the family and more. So, seat pockets, compartments, and cup cubbies are a must.

3. SELL MAINTENANCE! Women want the convenience of service and maintenance options. Used vehicles do come with a certain amount of risk. Including service and maintenance plans in the purchase of a used auto enhances the one stop shopping deal that women look for.

4. SELL GREEN! Not necessarily the color, but the environmental friendliness. Women do look for unique colors in vehicles and

these are getting easier to find. But for the most part, women are going green. Naturally nurturing, women are conscious of the changes in the environment and want to do their parts in keeping it clean and safe. Share knowledge about the used vehicle’s emission, miles per gallon, and more.

5. BE PATIENT! When a woman enters your site or lot, she is expecting to begin a mutual relationship with you, one of trust and loyalty. She wants your name, your attention and her questions answered. She may need two or more visits before a decision is made. So get ready to treat her well. Hopefully she will buy and love her newly purchased vehicle. For added value, she’s going to remember the treatment and tell all of her friends.

These selling tips are by no means in any order of importance. They are all equally important when marketing your vehicles to women.

BY S Y E D A Z A MSyed Azam is the president of AutoJini.com, a leading provider of website solutions for auto dealers. Contact him at [email protected] or 515-232-2024.

The issue isn’t about whether or not women are buying vehicles. They are. According to all the latest industry research, women even play a lead role in vehicles purchased by most men. And women are buying used vehicles as much as new ones. But don’t presume a woman’s expectations or process will change.

When it comes to a new or used vehicle, women’s expectations are pretty much the same. Just like men, women expect a newly purchased auto to perform well. And like men, women search for the best quality their money can buy when purchasing a used vehicle. So where’s the difference?

Well, one fact you might first consider is women do lots more homework and planning than men prior to a vehicle purchase. They may not be ready to purchase on the first visit. Consequently, you might want to practice patience when

H E R E A R E FIVE QUICK SELLING TIPS T O H E L P Y O U M A R K E T Y O U R V E H I C L E S T O W O M E N :

FAQS

Want to increase your sales? Sell to women buyers

Edmunds.com, the premier online resource for automotive information, released its 15 best used vehicle bets for 2011 in June. A total of 11 makes are represented on the list, with four makes (Ford, Honda, Hyundai and Toyota) each contributing two models.

BY SEGMENT, THE WINNERS ARE: •�Compact�Sedan: 2004-2009 Hyundai Elantra•Midsize�Sedan: 2004-2009 Nissan Altima•Large�Sedan: 2006-2009 Hyundai Azera•Coupe: 2004-2009 BMW 3 Series•Convertible: 2004-2009 Mazda Miata•Wagon:�2004-2009 Pontiac Vibe•Compact�SUV/Crossover: 2004-2009 Honda CR-V•Midsize�SUV/Crossover:�2004-2009 Ford Explorer •Large�SUV/Crossover: 2004-2009 Chevrolet Tahoe •Minivan/Van: 2004-2009 Honda Odyssey•Compact�Truck: 2004-2009 Toyota Tacoma •Large�Truck: 2004-2009 Ford F-150 •Luxury: 2004-2009 Infiniti G35/G37 •Hybrid: 2004-2009 Toyota Prius•Sport�Compact: 2004-2009 Subaru Impreza WRX

A team of Edmunds.com editors assembled the list, which emphasizes the most important criteria to consider when researching and deciding on a used vehicle: reliability, safety, value and availability. Eligibility was limited to vehicles ranging in age from 2 to 7 years.

For more details on Edmunds.com’s selection process and for a brief description of all the cars on this year’s list, visit 2011 Used Car Best Bets at www.edmunds.com/car-reviews/best-used-cars.html.

Edmunds.com Names Best Bets on Used Autos for 2011

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Small Business Financial Tune-Up: Business Succession Plan

Green Earth Technologies Making Green Motor Oil and Cleaning Products

It’s easy to get burned out on green products being advertised to the auto industry and consumers, and it is important to do a little bit of homework to make sure the company isn’t merely “greenwashing.” Green Earth Technologies which domestically produces G-OIL, 5W-30 Motor Oil – an API certified bio-degradable, bio-based, full synthetic green motor oil – the product has been clean and legitimate enough to end up on shelves at Walmart and The Home Depot. Its G-Clean Concentrated formulas now carry the Eco Options label, The Home Depot’s certification for products that meet certain environmental performance criteria for cleaning. Every product with the Eco Options label has less of an impact on the environment than competing products, the company says. Other green auto products offered by the company include G-Clean Glass Cleaner with a plant-based formula, Bio-Synthetic 2-Cycle Engine Oil, and G-Clean Mold & Mildew Stain Remover, a concentrated dissolvable detergent.

www.iaai.com

© 2010 Insurance Auto Auctions, Inc. All rights reserved.

Stephen CortezChicago Area Auction [email protected] • 630.335.0907

The IAA Hybrid Auction Model combines live and live-online bidding into one auction event selling to buyers from more than 100 countries. Let us show you how our live auctioneers, IAA Run & Drive® lanes, and onsite previews promote your vehicles’ full value for high retentions.

Contact us or visit www.iaai-advantage.com to learn moreabout IAA’s Live Advantage!

PROVIDING THE

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One Car One Difference turns donated vehicles into charity dollars.Make a difference in 2011 – visit 1car1difference.com

101846iaa_DealersEdge_HP_Vertical_PRINT_16DEC10.indd 1 12/16/10 3:31 PM

Dealers Want Better Auto

Transport Options from

Auto Auctions

Results from ShipCarsNow’s 2011 survey of independent and franchise auto dealers show dealers

want more auto transport options when buying vehicles online from wholesale auto auctions.

Preliminary results show the number of dealers who buy pre-owned vehicles via online auction is steadily increasing year over year, and those auctions are increasingly located farther away from the dealership. More dealers report they are expanding their search for wholesale autos nationwide. In 2009, 75 percent of dealers reported they usually sourced inventory within 50 miles of their dealership and only 14 percent were shopping as far away as 500 miles or more. In ShipCarsNow’s 2011 dealer survey, 35 percent of dealers reported they shop nationally and more than half of the survey respondents said they planned to buy more inventory online in 2011 compared to 2010.

So, what does this mean for online and simulcast auto auctions? ShipCarsNow reports 63 percent of dealers surveyed said they think online auto auctions should improve transportation options. Almost half said they would purchase more vehicles online if auctions improved auto transport services and increased reliability of condition reports. Suggestions that ranked highest included providing the transportation cost before or during the bidding process and the ability to see discounts for multiple vehicle shipments, as well as the ability to combine vehicles with other dealers’ for economies of scale. Dealers also reported they’d like to see multiple auto transport bids, and that price and reliability are key requirements for any auction offering auto shipping services.

So, what is the bottom line? Like any savvy consumer, auto dealers want options. They want to shop where they want, and when they want. They want vehicles delivered safely, timely and economically. And they want the transaction process to be intuitive and hassle-free. Innovative auto transport companies and online auto auctions need to collaborate to develop the tools and services that dealers need.

For more information about ShipCarsNow’s 2011 Dealer Survey, visit www.ShipCarsNow.com; the complete survey report will be available soon.

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We’ve often heard the phrases “Don’t expect what you can’t inspect” and “Knowledge is power.” These could not be more true than they are today in the dealer controlled financing industry (Buy Here-Pay Here, Lease Here-Pay Here and Rent-to-Own). Knowing how well your dealership and portfolio are performing compared to industry standards and compared to your own historical performance is invaluable. If you don’t inspect it, you can’t track it. If you can’t track it, there is no accountability. If there is no accountability, there is no motivation for change.

As a consultant and trainer to DCF dealers across the nation, I am often amazed when talking with prospective clients about their business results. It is surprising to see how many dealers do not track their own dealership’s key figures – figures that are very relevant at determining the overall health of

Don’t Do Business Without It

T R E N D S P O T T I N G :

news

Your data is like gold; mine it often.

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the lot. The figures these dealers did know were typically as of the previous month’s end-of-the-month reports. They knew last month, or maybe even last year, they collected X amount in payments or booked X amount of profit or sold X number of units. But, they don’t know how those numbers truly compare to previous months, years or even industry standards.

Most dealer management systems provide adequate reports which would enable a dealer to see static results, for example, or how many units sold and average deal structure, current inventory totals and averages, current delinquency and accounts receivable totals and more. However, very few, if any, of these systems provide any type of trend analysis reports. It is up to the dealer to record key figures on a monthly and even weekly basis to perform any meaningful analysis. The term trend analysis refers to the concept of collecting information and attempting to spot a pattern, or trend, in the information.

Having the ability to spot trends can be invaluable to a DCF dealer collecting payments on a weekly basis. Spotting a dangerous trend early enough allows dealers to take corrective action prior to having a major issue. The trick is to know what to look for.

We have seen dramatic reductions in the average reconditioning expenses at a lot where, it turns out, the manager had been planning to quit and open his own lot. Had this trend not been spotted, the results could have been catastrophic, leaving the new management to deal with a poor performing portfolio with lots of mechanical issues. This dealer was able to set new policies for vehicle inspections quick enough to contain any major issues.

At another location, a dealer was enjoying what appear to be his lot’s typical low delinquency rates; however, because this dealer was also monitoring the staff’s collection effectiveness, he spotted a trend indicating there was a strong possibility of fraud. With some further investigating, this dealer was able to obtain proof of employee theft within just a few weeks. Putting an end to what most certainly could have lasted months had he not been tracking weekly performance.

The first step to take to have the ability to spot these types of trends is to record data. Determine which key figures you want to track and enter those across the top of your page as the column headers. The first column should be for the date and each line or row will start with the date the data is recorded. If you are recording weekly data, pick one

day of the week (Friday, Saturday, etc.) and record data as of that day each week. As you continue to enter your information, it won’t take long before you have mounds of valuable data, data that you can now use to spot trends and to aid with forecasting.

You can use a simple ledger card, but this is the 21st century and a spreadsheet will allow for much more flexibility. There are several free options available today on the web; Google Docs (www.docs.google.com), Microsoft Excel Online (www.OfficeLive.com) and Open Office (www.OpenOffice.org). Google and Microsoft each offer a decent basic spreadsheet that can be accessed online and Open Office has a complete one that can be installed on your computer.

Webster defines data as factual information used as a basis for reasoning, discussion, or calculation. Data mining has been defined as the extraction of implicit, previously unknown, and potentially useful information from data. Don’t expect what you can’t inspect. Your data is like gold; mine it often.

Don Miller is a senior consultant and supervisor of Constellation’s DCF Consulting Group, a consulting firm specializing in BHPH start-ups, training, consulting and analytics. For more information, visit www.ConstellationAuto.com/dcf.

BY D O N M I L L E R

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What can a used dealer to do add revenue in these challenging economic times? Surveying dealers

at the recent NIADA convention in Las Vegas, we found many different approaches to this challenge of growing profits in a challenging economy.

Many of the dealers we spoke with were selling service contracts, warranties, gap insurance, and credit insurance, all reputable products sold to the customer who is already purchasing a vehicle.

Vehicle rental is an often overlooked program that can actually bring customers in who would otherwise not have a reason to set foot on your sales lot. Many of the dealers we spoke with at the convention that did offer rentals said it had been the difference between them surviving the tough economy of the last several years and often made the difference between the dealer principals drawing a paycheck or not.

Adding a rental operation several years ago has become one of the smartest moves Joe Baldwin ever made. The owner of Baldwin Motor cars in Lafayette, Ind., bought a

Rent-A-Wreck franchise in 2000 while his retail market was still strong. At times as the market has weakened, he said, his rental operation, which he operates from the same facility as his Buy Here-Pay Here store, has kept the business a success.

“Without the rental business, I would be out of business by now,” Baldwin said. “I guarantee it.”

Wayne Webb, a consultant with Peer Group Resources Inc., which organizes 20 Groups for rental car operations, said by adding rental franchises to their operations, dealers have increased traffic by as many as 150 potential customers per month with only 25 rental units.

Baldwin’s rental fleet represents the bulk of his inventory. He typically keeps 60 rental units and as few as 15 retail units.

“When I first bought the rental franchise people laughed,” Baldwin said. “They told me I was never going to make any money with it.”

His goal was an extra $5,000 a month. The rental operation earned Baldwin $100,000 in the first year. Baldwin said his key to success was buying the right inventory.

Rent-A-Wreck franchisees stock their own inventory, and more than 100 of their nearly 200 franchisees also are dealers.

Mel Morris started a sales and service operation in Canton, Mich., prior to buying a Rent-A-Wreck franchise in 1992. He runs Canton Auto Sales, Mel’s Auto Clinic and Rent-A-Wreck from of the same building.

“When business is good you’re selling a car every day, repairs are up and most of the rental fleet is out,” he said. “All aspects of the business feed into each other.”

The increased traffic from the rental operation brings more opportunity to sell autos. He also rents a lot of vehicles to people awaiting repairs, which allows him to bid on any of their future repair jobs.

“It all works together. Customers come in to rent a car, see the cars I have for sale and end up buying one from me at a later date,” Morris said.

For more information about Rent-A-Wreck, or to find out about adding a rental franchise to your dealership, contact Andrew Iatridis at 469-939-6132 or [email protected].

Used Dealers Add Rental Franchise to Supplement Business

Special Notice: Certificate of Title Required to Sell Used Vehicles

Several dealers have received

notices from the Illinois Secretary of State requiring the dealership to obtain a $20,000 bond. The notice goes on to say the bond requirement has been reinstated for the recipient because of delinquent transmission of title, registration, or taxes to the state. We have learned the Secretary of States Office has stepped up its enforcement of Section 3-115 of the Vehicle Code. The code requires a properly assigned certificate must accompany each vehicle sold in Illinois. IIADA recommends you obtain the certificate before you sell it. Otherwise, you are likely to receive notice from the Secretary of State requiring you to obtain a three-year, $20,000 bond or your dealer license will be suspended.

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APPLICATIONType of Membership: Regular ____________ Associate ___________ (non-dealers) _____________

New Member: (company) _____________________________________________________________

Owner’s Name: __________________________________________________________________________

Mailing Address: __________________________________________________________________________________________

City/ State/ Zip: ____________________________________________________________________________________________

Phone Number: _____________________________________ Fax: _________________________________________________

E-mail Address: ___________________________________________________________________________________________

Kind of Business: (check all that apply) Independent Franchise RetailBuy Here Pay here Wholesale Auction House Body Shop Re-builder Salvage Yard Classic Cars

ANNUAL DUES $299 • MAKE CHECKS PAYABLE TO: ILLINOIS INDEPENDENT AUTOMOBILE DEALERS ASSOCIATIONP.O BOX 7266 • ROCKFORD, IL 61125

PROGRAMS TO HELP YOU SAVE MONEY• Access to Insured Warranty & Service Agreements• Online Marketing and Advertising of Inventory• Vehicle History Report Discounts• Access to Customer Financing and Leasing Options• Networking with Dealers Nationwide• Discount Automotive Guide Books Subscriptions• Discount on State Approved Business Forms• Standardized Dealer Accounting Software• Annual College Scholarships for Family• NIADA Insurance• Prescription Drug Discounts• Savings on Shipping Services• Hotel & Rental Car Discounts• Telephone and Other Utilities Savings• Vehicle Transportation Services• Marketing Supplies & Printing Services REPRESENTATION• Federal Legal, Legislative and Regulatory Tracking and ReportingPUBLICATIONS • Used Car Dealer Magazine

• Annual Used Car Industry Report• Illinois Dealer’s Edge• IRS Audit Technique Guide for the Independent Used Car Dealer• NIADA’s Standardized Dealer Accounting Manual/CD• Legislative Alerts• NIADA Annual Buyer’s Guide

PROFESSIONAL DEVELOPMENT• Dealer Education Provided at Annual Convention• Certified Master Dealer Program• NIADA.TV’s Online Dealer Education Training Videos• NIADA Annual Convention & Expo• Access to Industry Education Providers• NIADA Membership Certificate• Adhering to NIADA Membership Code of Ethics

MEMBERSHIP APPLICATION & BENEFITS

To see all benefits & discounts visit http://www.Niada.com/benefit_program.php

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As an attorney, I find that many people are surprised to learn I am also a magician. It’s a fun and challenging hobby that can offer good lessons. For example, you quickly learn that things

are not always what they seem. To master most techniques, you need to clearly understand what’s happening beyond the visual component.

This lesson also applies to regulatory compliance. For dealerships, it particularly rings true when it comes to relationships with third-party service providers and their products. A company might appear to be reputable on the outside, but it could be just an illusion.

There are risks involved with all third-party relationships, whether they involve backend products dealers sell to buyers, such as credit life insurance, GAP insurance, extended warranties or service contracts, or operational products dealers buy or license from third-parties, in-cluding consumer credit information, loan documents or software.

One risk with third-party relationships is whether the vendor un-derstands and satisfies its unique regulatory compliance requirements. As a dealer, do you understand where your responsibilities end and the vendor’s begin in terms of service, performance and providing any required disclosures? A vendor’s compliance failure may ultimately cause your dealership to be out of compliance too. So how do you pro-tect your dealership’s reputation and ensure your vendors understand and are focused on compliance? Here are some questions to consider in the due diligence process:

• Does the vendor stand behind its products and services with a warranty or other written representations?

• Does it have stable management and finances to support its obliga-tions to you and your customers?

• Does its business history suggest that it will be around several years from now to fulfill its promises?

• Does it have a customer service area that is responsive to customer questions and problems?

• Does it understand the laws and regulations that apply to its prod-ucts and services? For example, does it know whether its product is considered insurance in your state? If it is an insurance product, is the vendor licensed to sell that particular type of insurance in your state?

• Is the vendor current on law or regulatory changes that affect its products and services (are its marketing materials and customer contracts in compliance and up-to-date)?

• Is the vendor the subject of any complaints to regulators, investiga-tions, and/or is it involved in any serious litigation?

Dealers want to make sure their customers are getting the best ser-vice possible, and regulatory compliance issues can greatly impact that goal. Third-party providers may have relationships with hundreds or thousands of dealerships. Their offerings may include a number of products in multiple states, which can increase the chances for error or oversight.

In a regulatory environment that’s constantly changing, the dealer needs to confirm that its vendors are keeping up with state and federal laws. A third-party provider might say the magic words you want to hear, but it’s up to you to make sure it’s not hocus-pocus.

BY CHIP ZYVOLOSKI Chip Zyvoloski is senior attorney for indirect lending at Wolters Kluwer Financial Services. For more information, visit www.wolterskluwerfs.com/indirect.

What You See Isn’t Always What You GetFREE

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want......when you want

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