Vol. 34 No. 4 A Publication of the Illinois Automobile Dealers Association Automobile Dealer News Biggest Asset: Depreciation or Appreciation? Are Your People Worth More or Less Today Than When You Hired Them?
Memberships in: • AUTOCPA Group • The American Institute of Certified Public Accountants • The Illinois CPA Society CERTIFIED PUBLIC ACCOUNTANTS Located in Central Illinois, we serve the entire state. Contact us today to learn how we can help your dealership thrive. Drive Your Dealership Toward Financial Success We specialize in automobile dealers in the following areas: • Dealership valuations • Automobile dealer legal support • Buy-Sells for dealerships • LIFO inventory computations • Financial statement analysis • Corporation Income Tax returns • Personal Income Tax returns • CPA prepared financial statements • Dealer estate planning • Employee theft consulting • Internal control studies and audits • Profit consulting • Training office managers/CFO’s • 401K Audits Serving more than 250 Automobile Dealers throughout the United States (309) 662-8797 Email: woodwardassoc@cpaauto.com Website: www.cpaauto.com 1707 Clearwater Avenue P.O. Box 1584 ·Bloomington, IL 61702
Julie a. Cardosi, esq. 3040 spring Mill drive, suite B springfield, iL 62704 (217) 787-9782 jcardosi@autocounsel.com www.autocounsel.com EXCLUSIVE. STRATEGIC. RESULTS. ConCentrations: Dealership Mergers & Acquisitions Dealership Franchise Law Business Litigation / Motor Vehicle Review Board Disputes Manufacturer / Franchisor Relations Business & Commercial Law Advertising Compliance Review Consumer Complaints Dealership Succession Add Points Real Estate Law Employment & Labor Law Federal & State Regulatory Compliance BaCkground: Principal, Private Law Firm Former, IADA Legal Counsel Former, Illinois Assistant Attorney General, Deputy Chief, Consumer Protection Division Drafted Illinois Motor Vehicle Franchise Act Amendments Creating Motor Vehicle Review Board Drafted Illinois Motor Vehicle Advertising Regulations Exclusively representing the unique business interests of automobile dealers for over 30 years. LAW OFFICE OF JULIE A. CARDOSI, P.C.
CONTENTS Vol. 34 No. 4 Chairman David Parkhill / 217.352.4275 Sullivan Parkhill Automotive 440 W. Anthony Dr. Champaign, IL 61822 Vice Chairman John Alfirevich / 708.429.3000 Apple Chevrolet, Inc. 8585 W. 159th St. Tinley Park, IL 60477 Secretary/Treasurer Jamie Auffenberg / 618.624.2277 St. Clair Auto Mall Auffenberg Auto Mall 1130 Auffenberg Ave. Shiloh, IL 62269 Executive Director Joe McMahon / 217.753.0220 Illinois Automobile Dealers Association 300 W. Edwards, Springfield, IL 62704 2023 OFFICERS ©2023 Illinois Automobile Dealer News | The newsLINK Group, LLC. All rights reserved. Illinois Automobile Dealer News is published four times each year by The newsLINK Group, LLC for the Illinois Automobile Dealers Association (IADA) and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the IADA, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. The Illinois Automobile Dealer News is a collective work, and as such, some articles are submitted by authors who are independent of the IADA. While the Illinois Automobile Dealer News encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at: 855.747.4003. Illinois Automobile Dealers Association 300 W. Edwards St. Springfield, IL 62704 T 217.753.0220 / F 217.753.3424 IllinoisDealers.com 14 Scan here to check out the new, interactive IllinoisDealers.com website! 18 6 Executive Director’s Message Legislative Recap By Joe McMahon, Executive Director 7 CVR: The EVR Solution Built for Your DMS 8 Counselor’s Corner Legal Pitfalls of Recording Vehicle Purchase or Lease Transactions By Julie Cardosi, Law Office of Julie A. Cardosi, P.C. 11 Biggest Asset: Depreciation or Appreciation? Are Your People Worth More or Less Today Than When You Hired Them? By Ethos Group 14 Why Wait? How Evaluating Your Dealership Can Help Your Business By Maxime Theoret, CPA and Managing Partner & Jennifer Rafael, Vice President and Partner at DSMA 16 Control What You Can By Justin Carr, Vice President, Warranty Processing Company 18 7 Powerful Vehicle Acquisitions Tactics That Will Boost Your Profits By Brian Kramer, Cars.com 22 Enhanced Vehicle Registration For Customers In All 50 States 4 Illinois Automobile Dealer News
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JOE MCMAHON EXECUTIVE DIRECTOR Illinois Automobile Dealers Association Executive Director’s Message Legislative Recap We often highlight the proactive IADA legislative successes that the Illinois dealership industry achieves through your united grassroots efforts. We actually spend much more time defending our industry by defeating legislative proposals that would place unnecessary burdens on franchised dealers. We’d like to take this opportunity to list just a small sample of bills that were introduced during the most recent legislative session that would have adversely affected our industry, but we were able to keep from becoming law. For this purpose, we’ve just listed the summary description, as each bill may contain pages of details that would have adverse effects on dealerships. As your IADA Executive Director, and on behalf of our IADA Directors, we appreciate your membership, support and grassroots efforts! House Bills Defeated • HB 1006 & SB 2217 — Creates the Family Leave Act: Would require private employers of more than 50 employees to provide six weeks of PAID leave for a variety of issues. • HB 1381 — Creates the Right Know Act: Would provide that any commercial website that collects personal information shall make burdensome notifications and create a data protection plan. • HB 1514 — Motor Vehicle Tax Receipts: Would require receipts collected from the sale of motor vehicles to be distributed to the municipality where the motor vehicle is titled or registered. Currently, tax monies are distributed to the municipalities where the dealership is located. • HB 1527 & SB 1978 — Defines Disablement Technology: Would provide that disablement technology shall NOT be used as an aid to the physical retrieval of a vehicle as part of a repossession. Requires dealers that sell a vehicle containing disablement technology to comply with specified requirements. • HB 1634 & SB 2050 — California Emissions Standards: Would provide that, by Dec. 1, 2023, the Illinois Environmental Protection Agency SHALL ADOPT and implement motor vehicle emissions standards from California. • HB 2934 — Repeals the Warranty Reimbursement Law for Labor and Parts: Legislation that was passed and signed into law that ensures dealerships and technicians alike receive fair and adequate compensation for all warranty work completed became effective Jan. 1, 2022. The warranty reimbursement legislation was difficult to pass through the General Assembly, and the vehicle manufacturers and Illinois Manufacturers Association have been trying to repeal this law and go back to their old reimbursement policy before the legislation could take effect. • HB 3374 — Electric Vehicle Recycling Act: Would provide that, after 60 days of the enactment of this Act, manufacturers of electric vehicles that contain hazardous components and batteries must begin to implement a collection program that facilitates the removal of these items. Senate Bills Defeated • SB 1357 — Plate Mounting: Would provide that all dealers shall ensure a registration mount is installed on the front and rear of every motor vehicle that is sold. Dealer must provide for all costs associated with mounting. • SB 1365 — Creates the Right to Know Act: Would provide that any operator of a commercial website or online service that collects personally identifiable information through the Internet about individual Illinois customers shall notify those customers of certain information pertaining to its personal information sharing practice. • SB 2090 — Repair of Advanced Driving Assistance Systems: Would provide that service providers, insurance companies and third-party administrators working on advanced driving assistance systems, or assuming responsibility for repairs, be required to undergo additional training and provide additional notices to customers. Sincerely, Joe McMahon IADA – Executive Director 6 Illinois Automobile Dealer News
CVR: THE EVR SOLUTION BUILT FOR YOUR DMS THE BEST CUSTOMER VEHICLE REGISTRATION EXPERIENCE IN ILLINOIS CVR is the only choice for automotive dealers who demand an EVR solution with a flawless, robust and secure integration to your DMS. Unlike our competitors, we’ve partnered with the IADA to deliver a faster and more efficient titling and registration process. Your customers won’t have to do anything after the sale except drive away happy in a fully registered vehicle. We’ve also teamed with Automotive Titling Corporation (ATC), to offer a full in or out-of-state solution that creates an integrated, 50-state workflow within your CDK DMS. The strongest integrations and solutions available for your DMS are here right now. To learn more and get started, email a CVR representative at cvr-il@cvrconnect.com or call 800.333.6995 © 2022 CVR. All Rights Reserved. 22-4261 SPEED/ACCURACY No more rekeying of data BETTER PROTECTION Safer consumer data CUSTOMER SUPPORT The finest in the industry INTEGRATION Connect with your DMS We also work with the IADA to provide compliance and training webinars to keep your staff up to date. As the builders of the first EVR for use in Illinois over 20 years ago, not only have we learned how to do this right, we know from experience how to treat you right. That’s why we’re committed to innovation while continuing to provide the most complete account service and customer support in the industry.
Counselor’s Corner Dealerships have been considering the use of video and audio recording of vehicle purchase or lease transactions to enhance customer service and security, as well as to mitigate potential disputes. Before implementing any such recording practices, it is essential to understand the legal complexities under state and federal law underlying this issue. As a general rule under Illinois or federal law, it is unlawful to record a telephone call or private conversation in which you are not a party and do not have a party’s consent. Additionally, the federal wiretap law prohibits placing a recording device on a person or telephone, in an office or elsewhere to secretly record a conversation between two persons who have not consented. Illinois has some of the strictest laws in the country pertaining to audio and video recording. Under the Illinois eavesdropping law, contained within the Illinois Criminal Code (720 ILCS 5/14-1 et seq.), there are specific provisions and requirements relating to recording conversations. A significant provision under Illinois’ eavesdropping statute is the two-party consent requirement. That is, all parties to the recorded conversation or transaction must know about and permit the recording party to record, and consent to being recorded. In a vehicle transaction, this would typically include the customer and dealership personnel. Thus, if a party is not notified of, or consented to, the recording, a violation of this statute has occurred. The form of notification should be clear and conspicuous whether through signage, written disclosures, or recorded message on a telephone call. And as with any form of written consent, it should be expressly granted, informed, and clear and conspicuous. A violation of this law is a felony. Injured parties are also entitled to civil remedies, including injunctive relief and actual and punitive damages. In addition to the requirement of obtaining the customer’s informed consent prior to recording, questions also arise concerning whether dealership employees can be recorded by the dealership, including as part of a customer transaction, without the employee’s individual prior consent, and whether the employee can be required to consent as a condition of employment. These are important legal considerations that each dealership should discuss with their private attorney as a number of issues, including privacy, labor and dealership agency, must be evaluated. Legal Pitfalls of Recording Vehicle Purchase or Lease Transactions JULIE CARDOSI Law Office of Julie A. Cardosi, P.C. 8 Illinois Automobile Dealer News
The contents of any recording must be protected from inadvertent disclosure or even hacking and should not be retained longer than necessary. In a vehicle transaction, a recording might contain “non-public personal information” as defined under privacy laws such as the federal Gramm Leach Bliley Act. If so, dealerships are required under the FTC Safeguards Rule to safeguard the recording, and other federal privacy laws would require the dealership to make required disclosures to the customer. Additionally, video recording without audio may also have legal implications. There has been a spike in claims under the federal Video Privacy Protection Act (VPPA) (18 U.S.C. 2710), a statute enacted several years ago to address the privacy of consumers in video rental and sales transactions. The VPPA has been effectively repurposed to enforce privacy and prohibit the disclosure of “personally identifiable information” from video records without the customer’s informed, prior written consent. Moreover, there has also been an increase of litigation against businesses in Illinois under the Biometric Information Privacy Act (BIPA) (740 ILCS 14/1 et seq.). This Illinois law addresses the collection by a private entity of “biometric identifiers” and “biometric information” from any person, which includes both dealership customers and employees. “Biometric information” includes any information based on a person’s biometric identifier used to identify that person, regardless of how it’s collected. And a “biometric identifier” includes a person’s retina or iris scan, fingerprint, voiceprint, and scans of hand or face geometry. BIPA prohibits an entity from collecting or obtaining a person’s biometric identifier or biometric information unless the entity: (a) informs the person in writing (i) that a biometric identifier/ information is being collected or stored, and (ii) of the purpose and term length for which the biometric identifier/information is being used, collected, or stored; and (b) receives a written release from the person of that person’s biometric identifier or biometric information. Any business that collects biometric information or biometric identifiers must formulate written policies that set forth a retention schedule, as well as guidelines for the permanent destruction of records of biometric identifiers after the initial purpose for collecting the information has been satisfied or 3 years after collection, whichever is earlier. Illinois dealerships considering recording vehicle transactions must navigate the complex legal landscape with their counsel to ensure compliance with both state and federal laws, including the potential privacy concerns which come into play when capturing and handling customer information and data. This includes establishment and implementation of clear policies and compliant disclosures, consent, collection and record maintenance practices to avoid legal pitfalls. Julie A. Cardosi is Principal of the private firm, Law Office of Julie A. Cardosi, P.C., of Springfield, Illinois. She has practiced law for over 37 years and represents the business interests of franchised motor vehicle dealers throughout Illinois. Formerly in-house legal counsel for the Illinois Automobile Dealers Association, she concentrates her private practice in the areas of dealership operations and compliance matters, transfers of ownership, mergers and acquisitions, franchise law, commercial real estate transfers, dealership employment and other areas impacting day-to-day dealership operations. She has also served as former Illinois Assistant Attorney General and Deputy Chief of the Consumer Fraud Bureau of the Attorney General’s Office. The material discussed in this article is for general information only and is not intended as legal advice and should not be acted upon as such. Dealers should consult their own private legal counsel for application to their specific circumstances. For more information, Julie can be reached at jcardosi@autocounsel.com, or at 217-787-9782, ext. 1. 9 Illinois Automobile Dealer News
CONTACT US TODAY! 801.676.9722 sales@thenewslinkgroup.com Your Customers Are Too. Advertising Space Available. QR Code Enjoy your association news anytime, anywhere. Scan the QR code to visit our online publication to stay up to date on the latest association news, share articles and read past issues. illinois-auto-dealer-news.thenewslinkgroup.org 10 Illinois Automobile Dealer News
Continual education is imperative for the consistent growth and success of your company. Biggest Asset: Depreciation or Appreciation? Are Your People Worth More or Less Today Than When You Hired Them? By Ethos Group Consistent Training Means Consistent Growth and Value Commodities typically depreciate over time, meaning their value or worth slowly diminishes the longer we keep them. We either have a depreciating asset (i.e., car, trailer, boat) or an appreciating asset (i.e., real estate). Often, we say that our greatest assets in business are our people. Competence, experience and consistent growth give them this designation. However, that really depends on how much we help them learn and grow. A common belief is that if they are winners, they will self-educate for consistent growth. The reality is complacency and comfort set in quickly with most people. Once they learn just enough to become somewhat successful, they rely on that stagnating ability to continue growing in their career. This may be enough for them but bad for the growth of your business. 11 Illinois Automobile Dealer News
Continual education is imperative for the consistent growth and success of your company. This education must come from multiple channels. Corporate training, self-education and outside learning opportunities must not only be encouraged but required. We have found in our industry that, often, we don’t expect our people to continue to learn and grow. The experienced employees with good to moderate success help to create our own comfort zone or expected results. We don’t want to bother them with the same old training efforts. We just leave them alone and expect them to naturally get better with time. The problem with that idea is we don’t really get better at anything we do with just repetition. We get better with perfect practice, analysis of execution and learning new ideas about a subject. We should always push our people to work toward their personal potential. Their potential is always greater than their current reality, no matter how successful they are. Growing your business comes directly through the growth of your people: • Train expectations • Monitor progress • Push employees to the next level • Reward growth “Not every difficult and dangerous thing is suitable for training, but only that which is conducive to success in achieving the object of our effort.” — Epictetus In any business, people are the greatest asset. Without the right people, the company’s vision can never be executed. It is imperative that education, training and personal growth be not only encouraged but required. This is the only way your number one asset will grow in value and be worth more today than yesterday. Take the steps today for your asset appreciation. For more information, please contact: • Chris Nesseth at (319) 270-4779 or cnesseth@ethosgroup.com • Ian Drake at (913) 952-0110 or idrake@ethosgroup.com 12 Illinois Automobile Dealer News
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We all know someone who waited until the last minute to get a service they needed: car insurance, that warrantee on their largest appliance, or a list of valuable items they would like insured in their home. And what did they wait for? A car crash, a fridge malfunction, or a flood. Well, we feel the same way about your dealership evaluation. The time to have it conducted is when things are going smoothly — we believe that there is no need to wait until an interested buyer knocks on your door (or your literal roof caving in) to know your business’ worth. So, let’s go through this question together: Why now? Your Dealership’s Biography Having a true thousand-mile view of your dealership’s financial health and capability can act as a dashboard for your business, help you know where you are now, and more importantly, where you are going (or can go). From the value of the brick & mortar to the KPIs that make up your dealership’s bottom line. A true deep dive under the hood allows you to diagnose areas that you may want to pivot (or preserve) to reach your business’s fullest potential. Waiting for your next 20 Group to know where you need to improve no longer needs to be the norm. Imagine a dedicated evaluation report with all the metrics to help you make informed decisions for the future with complete confidentiality. We’re living in an era where you can assess the health of your vehicle with a few touches on your infotainment system; assessing your dealership’s financial health can be just as efficient. No Surprises Assessing your business regularly is a lot like having your car serviced: no one wants unpleasant and costly surprises. A dealership evaluation is a preventive exercise that allows you to analyze areas of improvement and the good practices of your dealership. It’s an exercise that highlights performance but also areas where your business can do better. This in-depth analysis of your dealership’s activities also allows you to detect business trends that you may want to pursue or improve, especially if you feel shortchanged by your fiscal year (we know you’re thinking of your tax return as you read this). In short, this one- to twoweek exercise will allow you to take stock of your business from every angle. Be Better Equipped for Short, Medium, and LongTerm Planning Are you thinking of expanding your portfolio or maybe retiring? No matter what stage of your professional life you are in, an annual business valuation is an indispensable tool for clear and precise planning of your business activities. Anthony Codispoti, DSMA Manager of Valuations, notes that among the thousands of appraisals that have been performed over the past decade, there have indeed been several instances in which results showed a 2030% difference in value from what a dealer thought their dealership was worth. Such a difference, whether higher or lower than expected, can paint a clearer picture of what your fiscal future will look like. So, whether you are creating a succession plan for the next generation or seriously thinking of business growth, both projects could be greatly enhanced with a little preparation — and additional information. Don’t Underestimate the Power of a Balance Sheet Thanks to the rising inflation rates, a clear and precise balance sheet of your business is crucial when negotiating. Indeed, dealership transactions can be quite complex, and the current economic climate (inflation, brink of recession, etc.) unfortunately further complicates negotiations. This is why a dealer in expansion mode should know their business inside and out. A balance sheet is your best asset Why Wait? How Evaluating Your Dealership Can Help Your Business By Maxime Theoret, CPA and Managing Partner & Jennifer Rafael, Vice President and Partner at DSMA 14 Illinois Automobile Dealer News
EXPLORE THE DNA OF DSMA ENGINE OIL IS IN OUR DNA. • Largest automotive M&A team in North America • 97% of deals sold at asking price or greater • 1700+ dealership valuations • 425+ sold transactions Automobiles are in our blood. That’s why clients put their trust in us when they are ready to buy or sell a dealership. Work with someone with the same bloodlines. Hire DSMA. GREG BROWN M&A Associate greg.brown@dsma.com JONATHON MORONI Business Development Manager jonathon.moroni@dsma.com JENNIFER RAFAEL Vice President, Partner jennifer.rafael@dsma.com OUR MIDWEST TEAM BUY AND SELL WITH CONFIDENCE Visit DSMA.com/Midwest for details. Contact us today to recieve a complimentary initial consultation. when approaching investors and financial institutions in order to accomplish your next acquisition goal. In the same breath, a dealer wishing to sell will equally be much better equipped to deal with potential buyers when knowing the exact net worth of their business. Proactive + Prepared = Peace of Mind Don’t wait for a crash in the industry to act. By conducting a regular valuation of your dealership, you are being proactive. Such preparedness shows that you are ahead of the curve. Proper knowledge of your dealership’s accurate value will help you deal with various industry crises ... or, better yet, prevent them. And you know who loves to see that? Financial partners. Prepare for the Unexpected Although grim topics, when faced with a separation, divorce, or even death, dealers or their teams often find themselves completely rushed and in no state to evaluate their business. These unexpected events can occur at any time on a personal level and can greatly affect the day-today operations of your dealership. If this happens, having an accurate assessment of your business can help you maneuver challenging times and even protect your estate in the event of your death. Maximizing Your Dealership’s Value Lastly, you can’t grow your dealership without knowing its true value. Make sure you partner with experts who can appraise your dealership and give you an accurate representation of your business’s value on the market. So, we ask you again: What are you waiting for? At DSMA, we have the certified staff and sophisticated tools to accurately value all vehicle dealerships, regardless of their market or location. We use QUOTUS™, a confidential and secure digital platform we’ve developed internally over the past few years, which allows us to evaluate a dealership in every respect — with the most precise data on the market. It is the most reliable automotive market intelligence in North America, which allows you to maximize the value of your dealership. This tool benefits not only automotive dealers but everyone in the motorcycle, heavy truck, agriculture, marine and heavy vehicle industries. Please contact Jennifer Rafael, Vice President and Partner at DSMA at (312) 927.9561 or Jennifer.rafael@dsma.com or visit dsma.com to learn more. 15 Illinois Automobile Dealer News
Control What You Can By Justin Carr, Vice President, Warranty Processing Company In business, as in life, there are some things you can control and others you can’t. However, there are many controllable aspects of your dealership. For example, you can control how you spend your time, allocate your resources, respond to challenges and obstacles and the suppliers you choose as partners to propel your success. Cycles Are Inevitable The automotive industry goes through cycles just like other industries. In 2019, dealers sold over 17 million vehicles. In 2020, it was less than 14.5 million vehicles. The number fell even lower in 2022 to less than 13.9 million. We’ve seen this before and know sales and service will pick up. The best thing you can do is get deep processes in place so your dealership can grow when sales rebound. A finely tuned service department can pick up the dealership. Warranties matter because they impact service revenue. When fewer vehicles are fixed, maximizing the profit margin for each repair is more important than ever. Payroll and Process Hold Hands This is worth discussing. If you make the process efficient now, you can keep your overall payroll smaller and may not need to hire anyone later. Having your house in order helps you avoid having to hire unneeded staff during the rebound, which can maximize your margin of profitability. Why Dealers Need a Warranty Service Partner No matter how successful you think your dealership is, you can strengthen it by looking at processes and training employees. Employees should know what matters and how they contribute to the dealership’s success. Understanding their role helps them to feel part of the bigger picture. This strengthens your culture and can help reduce turnover. Dealers who ignore issues with efficiency or timeliness hurt their dealerships in multiple ways that can affect their dealership’s longevity. First, managers need to know which processes are working or failing. Revenue can decrease if a manager cuts costs without understanding which costs grow revenue. For example, a manager might not realize a highly paid employee’s value in lifting the entire service department and training younger, less experienced employees. Being well-paid doesn’t equal being overpaid. Second, dealers sometimes expand their payroll instead of maximizing their margin within the service department. Many people play a role in the life cycle of a warranty claim. Since people compensate for inefficiencies with workarounds, the results can affect the whole service 16 Illinois Automobile Dealer News
department adversely. Hiring more people instead of improving the process costs you hard dollars and lets the service department continue to be inefficient. Increasing the profit margin is smarter than spending money unnecessarily; also, maximizing your margin when it is harder to make a profit will serve as preparation to grow profits more efficiently later. To improve how your dealership works, evaluate and improve the quality of your business decisions. Running a dealership is complicated. Getting knowledgeable and objective advice from outside the dealership can help you examine and improve your business’s processes. Your goal should be to capture every warranty dollar, but you must be granular to do that, and a General Manager’s job is typically not granular in that department. Instead, hire a warranty company to act as your partner. What the Right Partner Should Do A warranty partner can get receivables flowing and protect your dealership from audit problems, but they don’t just lift warranty claims. A good one boosts the service department by making it unnecessary for the service manager to spend time in the weeds. They also help the team work together more efficiently. Tech enablement is important on the fixed operations side of a dealership, but deep tribal knowledge and an equally deep understanding of data are also important. The warranty company helps the service manager focus on growth by fixing processes and providing insights and information. Owners and General Managers often don’t have a front-row seat to the intricate details that get and protect the money on a warranty repair. Although state laws are being implemented to combat dated factory policies, dealerships should not solely focus on getting a labor rate and parts markup increase. These types of increases will certainly help the bottom line, but are they being as impactful as they could be? Some dealers don’t maximize the warranty to include items like rentals, test drives or any additional work that needs to be done so the repair is handled correctly the first time. They may skip signing and approving add-ons, which could ultimately result in you losing that money down the road. Sometimes employees leave items off claims because they don’t know how to get an advanced repair order paid. Teach them. Checks and balances in the warranty process are important to maximize repair orders. Adjustments that appear on the warranty schedule are not necessarily a bad thing. Imbalances are an opportunity to gain knowledge, fight for additional dollars and make corrections to processes or systems that improve efficiency. Too many dealers are submitting repair orders to the manufacturer before they are closed to the DMS system. Once they are paid, they are closed to the DMS for that amount. How can you ensure that you have collected every dollar in that process? What is your tool to monitor progress? In the previously mentioned scenario, there is nothing on the schedule that would show you that a rental was left off or a part was marked up incorrectly. It also creates risk and potential audit liability. Was a recurring problem not identified? Are you giving the manufacturer just reason to recapture your legitimate dollars stating that a repair didn’t follow policy and procedure? Be conscious that you are getting all the dollars the manufacturer will pay, and avoid closing repair orders after the manufacturer has released the credit statement. Audit each claim to ensure it complies with the policy and procedure, and nothing is missing. Ensure all codes are applied, identify and understand all variances before reconciling the differences and update everything daily. It is easy to keep a schedule clean and running clean when you touch it every day. When warranties fall behind, they become a mess. When that happens, the work it takes to clean them up is extremely time-consuming and can involve many staff. By controlling the things you can, you make it easier to achieve your goals and objectives. You also minimize the risks associated with uncertain or uncontrollable factors. The right warranty company can help you create a clean, complete process. Justin Carr is a VP at Warranty Processing Company, which recently relocated to Texas. Justin works with dealers nationwide to increase efficiency within service departments and educates dealer staff on why efficiencies matter. To learn more, please visit warrantyprocessing.com. By controlling the things you can, you make it easier to achieve your goals and objectives. 17 Illinois Automobile Dealer News
7 Powerful Vehicle Acquisitions Tactics That Will Boost Your Profits By Brian Kramer, Cars.com 18 Illinois Automobile Dealer News
Compared to this time last year, inventory levels continue to improve. But we’re still not back to the number of available new and used vehicles pre-pandemic. Thankfully, there are always new tactics you can implement to help improve your dealership’s ability to acquire the right vehicles at the right price. Here are seven that will keep your lot stocked with fresh vehicles in the months to come. TACTIC #1: Use the Power of “Why Sell” During the height of the inventory shortage, as retail prices on used inventory soared, many consumers took advantage of favorable market conditions to consolidate the number of vehicles in their family fleet while improving their financial position at the same time. This shift in selling intent was clearly observable when looking at search trends for keywords like “sell my car” and “sell my car for cash today.” When we fast forward to today, this trend isn’t slowing down. Search volume for related keywords is still elevated well above pre-inventory shortage levels. That’s why it’s important not to focus your marketing and messaging on just “trades.” When you leave out the option for consumers to sell their car to you without buying one, you’ll be missing a key opportunity to acquire additional inventory. Be sure to keep your dealership top of mind for consumers off-loading their current ride by combining a connected marketing campaign with your unbeatable local selling experience. TACTIC #2: Maximize Trade/Sell Engagement on Your Website If you want your website visitors to know your dealership will buy their car, you have to tell them. So, back up and amplify your “why sell” message on your website and other marketing channels. Overall, you want to highlight the benefits of trading or selling a car to your dealership. Be sure to include details like providing a guaranteed offer, avoiding the hassle of private sales and saving time and money. On your website, your trade/sell messaging should be front and center, making that experience only a click or tap away. Additionally, make sure to maximize your impressions by linking your trade/sell landing page to your main menu, and don’t forget to place a prominent CTA above the fold on your homepage. TACTIC #3: Provide Consistent Values Across Your Platform With the proliferation of trade-in, digital retailing and chat widgets being mixed and matched on dealer websites, a growing problem has emerged where consumers receive different values for their vehicle on your website depending on the experience they’re using. For example, you may have a tradein widget embedded on a landing page that provides an estimated value range for a vehicle. But the trade-in phase of your digital retailing tool uses a different source of data, resulting in an alternate value provided for the same vehicle. You’ll build trust by providing a consistent appraisal experience across your website platform. In turn, you’ll increase your chances of acquiring more vehicles. Take action by appraising a personal vehicle using the same tools on your website that your consumers use. Are you getting matching values across your different tools, or do they differ depending on the experience you’re using? TACTIC #4: Optimize Your TradeIn Page for Local SEO When you turn to Google to search using keywords related to selling or trading in a vehicle, you’ll typically find that a majority of the organic results belong to the big-name brands in auto. However, if you look closely, you’ll see that Google also will provide searchers with links to relevant local dealerships on the first page of results and in the map pack, if you have relevant content published on your website. It’s not enough to embed your tradein tool on a basic landing page and expect it to be enough to crack the rankings by itself. You must also optimize and add content to that page that explains your process, and share your message of a local, quick, convenient and trustworthy experience. TACTIC #5: Market Your Experience Online Once you’ve refined your trade/sell message and have optimized that experience across all areas of your website, now it’s time to go to market with a strong message targeted to local consumers looking to maximize the value of their vehicle. You’re probably already running search engine marketing campaigns for your inventory, name and/or location; but do you have a campaign set up specifically for vehicle acquisition? With the majority of searches taking place on mobile devices, it’s hard to ignore the fact that the first one or two screens of the search results are sponsored listings. So even if you have an optimized trade/sell landing page that ranks organically, you still 19 Illinois Automobile Dealer News
want to be able to catch a consumer’s attention right from the start with a well-placed ad and with your dealership’s value propositions. For the biggest impact, look to increase your trade/sell reach by utilizing your other marketing channels like display, social and video to ensure that you’re sharing your message with local in-market consumers during all stages of their journey across platforms and devices. TACTIC #6: Get Trades from Traditional Ads Just as the inventory shortage was brought about by the pandemic, so was the accelerated adoption of technology that changed consumer behavior. One such technology is the QR code, which had been largely overlooked for a decade, but now has become a common feature in our daily lives. If you want to make sure you’re giving your dealership every opportunity to acquire more cars, use QR codes in your newspaper, direct mail and TV advertising. When scanned, they’ll lead a consumer directly to the trade/ sell experience on your website. QR codes not only create engaging offline-to-online experiences, but they also provide a better insight into the ROI of your traditional advertising campaigns — which historically has been challenging to prove. TACTIC #7: Future-Proof Your Follow Up It’s important to understand that all the opportunities in the world to acquire a vehicle won’t mean a thing if you haven’t developed a specific follow-up process for your dealership. Too often, a trade or sell lead gets treated just like any other sales opportunity. It hits the CRM, and then a salesperson or BDC agent picks up the phone to give them a call. More often than not, they leave a voice message, and then the CRM automated email follow-up process kicks in for the next 90 days. As fewer people answer phone calls from unknown numbers and email continues to become less urgent for consumers to check regularly — texting has become the best way to follow up with all of your leads to get an immediate response. Closing Thoughts No matter how your dealership’s inventory is being affected by industry trends, there are always ways to enhance your vehicle acquisition process. Start by looking for simple ways to improve the tactics you’re already embracing. If you don’t see the level of results you want, try one (or all) of these tactics that you haven’t used before, and watch how it will make your acquisition operations more effective for today, and the future. NEW NAME SAME PEOPLE AND SERVICE YOU’VE KNOWN FOR YEARS We are pleased to announce that Somerset CPAs and Advisors has joined CBIZ and MHM. Together, CBIZ and MHM are one of the nation’s Top 15 accounting providers.* 800.469.7206 | cbiz.com Effective Feb. ’23 *Accounting Today – March 2023 CBIZ is a business consulting, tax and financial services provider and works closely with MHM (Mayer Hoffman McCann P.C.), an independent CPA firm providing audit, review and attest services. CBIZ and MHM are members of Kreston Global, a worldwide network of independent accounting firms. © Copyright 2023. CBIZ, Inc. NYSE Listed: CBZ. All rights reserved. 20 Illinois Automobile Dealer News
Ethos Group partners with retail automotive dealers to promote an ethical, customer-focused approach to the sale, financing and servicing of automobiles. We drive profits and customer retention by helping the dealership create a world-class ownership experience. IADA Endorsed Income Development Company Chris Nesseth | 319.270.4779 cnesseth@ethosgroup.com Ian Drake | 913.952.0110 idrake@ethosgroup.com www.ethosgroup.com Training Consulting Recruiting Compliance Products Technology INCREASE REVENUE. REDUCE RISK. LOWER OVERHEAD.
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Running a dealership comes with its share of uncertain terrain. But one thing is certain. Our Dealer Financial Services team is dedicated to being by your side with the resources, solutions and vision to see you through. Brad Bartsch bradley.w.bartsch@bofa.com 469.201.9755 Tony Garcia anton.r.garcia@bofa.com 312.438.8356 business.bofa.com/dealer Making business easier for auto dealers. Especially now. Diana Zamudio diana.zamudio@bofa.com 312.234.2466 “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: | Are Not FDIC Insured | Are Not Bank Guaranteed | May Lose Value | ©2022 Bank of America Corporation. All rights reserved. 4826555 08-22-0145
Illinois Automobile Dealers Association 300 West Edwards Street Springfield, Illinois 62704 This Magazine Is Designed and Published by The newsLINK Group, LLC | 1.855.747.4003 BROWN & BROWN Overview Brown & Brown Dealer Services (BBDS) is an F&I performance company aimed at helping to build tailored solutions for today’s vehicle retailer. The complexities inherent to the F&I business demand a white glove approach with the flexibility to satisfy a variety of brands or markets. The BBDS network of providers helps ensure the proper F&I program is developed and executed to help maximize upfront sales and profits, provide a top-tier customer ownership experience and create wealth-building opportunities downstream. How We Can Help Our BBDS team is comprised of experienced and knowledgeable F&I specialists that have worked with dealers for decades. They are equipped with access to the industry’s top product providers, a top-rated training and development program and commercial insurance products to help you find solutions to fit your business needs. F&I Products • Flexibility to help fit your needs • Access to A-rated providers • Two in-house administration companies • Wealth-building opportunities on products Training Solutions • F&I Management Certification School • Learning Management Systems (LMS) delivering online training • Monthly webinars and video training archive • Ethics & Compliance Certification Participation Programs • Program selection based on your goals and objectives. NCFC, CFC, Retro or DOWC • Nationally recognized team that specializes in evaluating and configuring personalized solutions • No obligation evaluation of your current program Property & Casualty • More markets for your risks mean more choices to help meet your individual business and personal needs • Knowledgeable professionals to help identify your unique risks and find solutions to help protect your assets Employee Benefits • • Health Collective Purchasing Arrangement that includes a dedicated service representative to help you with premium savings, national and regional coverage and to DEALER SERVICES The Broker for the Dealer Custom F&I Programs That Help Deliver Results and Profits Brown & Brown Dealer Services 263 Shuman Blvd. • Naperville, IL 60653 | bbrown.com | (847) 612-9361
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