3. The Resulting Numbers Are Often Higher As previously mentioned, you should be evaluating both a statutory submission and a factory submission every year when contemplating a labor-rate increase. In most states, a statutory submission will have different rules than your factory protocol based on a number of specific nuances in the law. We’ve often had dealers ask why they would complete a statutory submission when their factory protocol required less work. Let’s say a manufacturer requires 20 consecutive qualified ROs that have closed in the last 30 days, which is far less than the 100 qualified ROs that most statutes require. You may wonder, how can a dealer get a larger increase providing five times the amount of ROs? One answer is that you can use the last six months of data in most states, rather than the limited timeframe prescribed by most factories. The larger data set for a statutory submission makes sure that your increase is indicative of your typical retail pricing policies, while a truncated period of time may be far less representative or be subject to an unfavorable work-mix. The extra work can seem daunting to a dealer who has only ever performed factory submissions, but it usually pays for itself. HOW DO I GET STARTED WITH MY STATUTORY SUBMISSION? The next time you are due to perform a labor rate increase submission, think twice about automatically submitting your factory RO sample or survey. A statutory submission can seem overwhelming to already overworked dealership personnel trying to focus on selling and servicing cars, but that’s where a qualified and well-referenced third-party vendor comes into play. A third-party vendor that is familiar with statutory submissions can guide you through the unfamiliar process and perform it for you, seamlessly. Before you decide to engage a vendor, you should ask yourself some key questions to make sure you are achieving the optimal result with the least disruption to your business: • Exactly how much work will the vendor be completing for your submission? The process between a vendor and dealer can be very different depending on who you work with. If you’re working with a best-in-class vendor to perform your submission, it should be completing all the work for you. If the vendor is asking you to complete tasks like pulling thousands of repair orders, you may be better off completing the submission yourself. • Does the vendor evaluate which submission type is best for you? Many vendors simply provide one form of submission over the other, without much thought given into which submission is right for the dealer. However, other vendors have processes in place that allow them to review a dealer’s data in a way that can identify the most profitable submission type. Most often, this is a statutory submission, but it is possible that a factory submission could be better — you won’t know for sure unless your vendor evaluates both opportunities. • How is the vendor ensuring you get the best result? Working with a best-in-class vendor means it will have software built specially to ensure the best labor rate submissions, based on both state and manufacturer guidelines. If a vendor says it can produce the best result, ask it how; get specific; there are lots of loose claims out there. Attempting to use spreadsheets or DMS reports may help avoid some unfavorable repairs but will make it nearly impossible to identify the optimal range to submit within the prior six months. Most of the time you can only submit one time per year, so missing the best possible rate will cost you for at least the next 12 months. NEXT STEPS A statutory submission doesn’t have to be as complex as it sounds; that’s why third-party vendors immerse themselves in state laws and factory behaviors, in order to give dealers the industry knowledge and tools needed to get you the best labor rate increase possible. With no commitment necessary, there’s really no reason not to take a look at working with a third-party vendor to see just how much you could be adding to your bottom line. If you’re interested in learning more about a statutory submission or have questions about the process, reach out to one of the labor rate increase experts at Armatus Dealer Uplift at info@dealeruplift.com. Dealers don’t have to lift a finger using Armatus services and are provided a no-obligation estimate of what you could be adding to your bottom line with a labor rate evaluation and submission. Jordan Jankowski is the chief operating officer of Armatus Dealer Uplift, a Hunt Valley, Maryland-based firm specializing in retail warranty reimbursement submissions. Starting as an auditor, Jordan built his knowledge base from the ground up, and today is recognized as an expert in this highly technical arena. Jordan manages a team of over 60 people, who have produced over 17,000 approved retail-warranty submissions. Any dealer who is submitting for a labor rate increase should be evaluating its factory protocol and its statutory protocol to determine which is most advantageous. 17
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