IADA’s President’s Club Appreciation Event In Conjunction with the Spring Board Meeting & Reception Vol. 35 № 3 A Publication of the Illinois Automobile Dealers Association Automobile Dealer News
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
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 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. Exclusively representing the unique business interests of automobile dealers for 38 years.
CONTENTS Vol. 35 No. 3 Chairman John Alfirevich / (708) 429-3000 Apple Chevrolet Inc. 8585 W. 159th St., Tinley Park, IL 60477 Vice Chairman Jamie Auffenberg / (618) 624-2277 St. Clair Auto Mall Auffenberg Auto Mall 1130 Auffenberg Ave., Shiloh, IL 62269 Secretary/Treasurer Rick Curia / (815) 288-4455 Ken Nelson Auto Group 1100 N. Galena Ave., Dixon, IL 61021 Executive Director Joe McMahon / (217) 753-0220 Illinois Automobile Dealers Association 300 W. Edwards St., Springfield, IL 62704 2024 OFFICERS ©2024 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 8 Scan here to check out the interactive IllinoisDealers.com website! 6 Getting to Know IADA Chairman John Alfirevich 8 IADA’s President’s Club Appreciation Event In Conjunction with the Spring Board Meeting & Reception 14 COUNSELOR’S CORNER State and Federal Regulatory Compliance Considerations for Dealers Looking Ahead in the Wake of the Vendor Cybersecurity Incident By Julie Cardosi, Esq., Law Office of Julie A. Cardosi, P.C. 16 Hiring: It’s Not Just About Skills By Jaime Decker, Ethos Group 18 ELT & GLR What to Know 20 Ensuring Warranty Repair Services Are Properly Funded 22 Is Now a Good Time To Sell? What Today’s Buy-Sell Market Means for Automotive Dealers Considering an Exit By Jennifer Rafael, DSMA 25 Climbing the Automotive Industry Ladder of Success By Sharon Kitzman, Dominion DMS 16 4 Illinois Automobile Dealer News
© 2024 Truist Financial Corporation, TRUIST, Truist purple and the Truist logo are service marks of Truist Financial Corporation. All rights reserved. Truist Securities is the trade name for the corporate and investment banking services of Truist Financial Corporation and its subsidiaries. Securities and strategic advisory services are provided by Truist Securities, Inc., member FINRA and SIPC. | Lending, financial risk management, and treasury and payment solutions are offered by Truist Bank. | Deposit products are offered by Truist Bank, Member FDIC. We’re more than a financial partner. We’re an invested one. True relationships matter. We don’t take this lightly. The best are built on a deep understanding of your short- and long-term goals and always backed by thoughtful, strategic advice in support of your vision. With full-service financial solutions and a deep bench of industry expertise, we’ll build a team around your organization to focus on your success. So, let’s drive further—together. To learn more, visit us at Truist.com/DealerServices.
We were fortunate to interview John Alfirevich, the 2024 chairman of the Illinois Automobile Dealers Association (IADA), about himself, his goals as chairman and his thoughts on the industry. He is the dealer principal at Apple Chevrolet in Tinley Park, Illinois. John, thank you for taking the time to speak with us. Let’s start by asking you to share a little bit about yourself. Before moving into the car business, my family owned and operated two taverns on the east side of Chicago, so work was always in my DNA. I started in the car business with my father before I even had a driver’s license. I’m an “extra effort” guy who believes you have to earn things in life in order to be fulfilled, and it’s the grind or sweat equity where gratefulness is born. In most board rooms, I never thought I was the smartest guy in the room but I’m never afraid to jump into anything and figure it out. Through the years, I’ve learned that with perseverance and using failure as your friend, you can go far in this world and bring good to others. It’s important to me to “give back” because by giving back to hardworking employees and the good people of our community, I receive so much more in return. What about your dealership, Apple Chevrolet? Tell us about the history. In 1963, my father was a partner at Bob Motl Chevrolet on Chicago’s South Side. My dad talked Motl into moving the dealership to 159th Street, which at that time was a two-lane highway. People said the move was ridiculous. Things were tough financially for many years. In 1981, things got so bad we were going through bankruptcy when our advertising executive suggested changing our name to start with the first letter in the alphabet. In those days, a new technology was arising, people were using 411 to get information about car dealers or services, and the software at the time searched in alphabetical order. We took “apple” from the ‘70s jingle “Baseball, hot dogs, apple pie and Chevrolet” and renamed our dealership “Apple Chevrolet.” Believe it or not, the phones started ringing, and there was a huge turnaround in our cash flow. I was in my early twenties at the time and convinced my dad we needed to be sure that name recognition stuck. We needed to brand ourselves differently! That’s when we started our charitable giving programs so the community could never forget our name! As for my family, I have the best loving wife, who truly understands the auto business. I’m very blessed. My daughter, Olivia, now works at Apple Chevrolet, and she’s our project manager. She’s now helping carry on our tradition of community service through helping with our USO and Toys for Tots events and growing the programs. And thanks to Olivia, this year we had our first Pet Adoption Day, where 15 dogs were placed with community residents. Our son, Joey, just graduated from college and is working as a bank intern at Ally Bank, learning business from the bank’s perspective and bringing new ideas to my attention. His focus currently is on finance and insurance for the short term, but he’s eager to learn all aspects. We’re excited to have him learn about the car business in the future. He has plans to apply for the NADA Academy in the next couple of years. What sets your dealership apart? How many people are employed at Apple Chevrolet? What sets Apple Chevrolet apart are our employees. We have great, solid managers, not afraid of change or learning new concepts. We have 115 employees, and I know most of them personally. From day one, our people learn about customer service and the importance of community. We offer several training programs because it’s critical from day one that our employees understand Getting To Know 2024 IADA Chairman John Alfirevich 6 Illinois Automobile Dealer News
how important it is for a customer who may walk in with a frown to leave with a smile. We pride ourselves on being the best and therefore offer the best in training, education and superior health and wellness benefits. We are a family. Our team meetings are solution-based, and we try hard to grow the bottom line by serving our customers with integrity. What’s best for the customer is always what’s best for Apple Chevrolet. Year to date, Apple Chevrolet continues to donate to over 94 organizations in and around the community. We feel blessed to not only support by giving, but also to get involved on a greater level, such as our USO event, where we’ve raised over $150,000 to date since inception. Every year at the USO event, we host local veterans and their families at the dealership with a BBQ and a 21-gun salute. What advice do you have for people just starting out in the business? I try and tell every new salesperson who comes through the door that they should stop thinking they sell cars. Just make a friend today. What you need to do is make a friend and create trust. That customer may not buy a car that day, but they’ll remember you. People sense it when you work too hard at selling a car. Make a friend, build trust and you’ll be surprised where that takes you, if you are in it for the long haul. Over time if you make a friend, you build a bond that cannot be broken. The worst thing you can do is make a mistake on something like pricing. But it happens; you really can’t go back on your word; you have to honor it. What excites you most about this industry? What keeps me excited in this business is helping my staff build their families. We have so much opportunity in this industry if we do our job! What keeps me energized is the technology. When I see an advancement in a car, a diagnostic tool, or through AI, I get excited. And technology is only going to get better. What about electric vehicles (EVs)? From where I sit, this is the first time in history that we have what I call a “political” car. Evolution has made this industry great and profitable, with vehicles built for customer appeal and safety at heart. Now, as dealers, we’ve been told how they want us to sell cars in the future, and it doesn’t seem realistic for millions of reasons, including affordability. In 2022 and 2023, I spent three-quarters of a million dollars to make our dealership EV-ready and that equipment is already obsolete. We need to slow down this pace of production. This is happening too quickly. In my Chevy world, the market needs cargo vans and work trucks for their livelihood. Sure, everybody wants a clean, safe environment. Still, the rush to EVs is problematic on a number of levels, and this interview is much too short! How did you get involved in IADA leadership? When I first talked to my dad about joining an industry board, he said I didn’t need the headaches. I loved my dad but disagreed. I want to be in the know, helping firsthand to solve some of the bigger problems we all share. I like to contribute solutions by working together with other members of the IADA to identify and solve problems facing auto dealers throughout the state. I never hesitate to take someone’s great idea and work to implement it. Most importantly, I truly believe in the franchise system are industry has come to know. What are some of your goals as chairman of the IADA? One important goal is to promote the franchise model. There’s nothing better than having a hometown dealer distribution system. We’re in the neighborhoods, giving money to baseball and softball teams, cheerleading squads and the like. There’s a lot of talk about selling cars directly from the manufacturer. That takes away from the trust and the relationships local dealers have built in their communities. If someone has trouble with their car, they can come to the shop and get it fixed by someone they trust. They don’t have to go online or call a random 800 number, but instead, talk to a dealer they know and trust. The franchise model has been around for decades, and it is a model that works. We need to be resourceful by constantly getting that message out. I’m particularly proud of the efforts of the IADA in supporting a group of 26 Ford dealers who challenged Ford’s “Model e” electric vehicle allocation modifications. The Ford dealers hit a home run, winning the protest, and this decision benefited the entire dealership industry. IADA also coordinated with the Illinois Attorney General’s Office to challenge a lawsuit filed by Volkswagen against the recently enacted warranty reimbursement law which has enabled dealers and service technicians to get adequately reimbursed for warranty repairs. The Volkswagen lawsuit was dismissed, and the warranty reimbursement law stands. The IADA is heavily involved in the lawsuit against Rivian and Lucid to challenge the issuance of dealer’s licenses to motor vehicle manufacturers. Direct sales by manufacturers erode the important dealer and consumer protections embedded in the Illinois Motor Vehicle Franchise Act. 7 Illinois Automobile Dealer News
IADA’s President’s Club Appreciation Event In Conjunction with the Spring Board Meeting & Reception 8 Illinois Automobile Dealer News
IADA welcomed all our Illinois dealers who are members of the NADA President’s Club along with our board of directors. A cocktail hour and program were hosted at the Lincoln Presidential Library and Museum. Paul Metrey, NADA executive vice president of public policy, and Gary Gilchrist, 2024 NADA chairman, addressed the members, and then the museum was open exclusively for Illinois President’s Club donors. The event was designed to thank all our dealers who participated at a high level in supporting the legislative efforts of NADA. IADA offers our sincere thanks to all dealers who participate and support both our state IADA and national NADA PACs. We offer special gratitude to Jamie Auffenberg, Auffenberg Auto Mall in Shiloh, and Ryan Gremore, O’Brien Auto Group in Bloomington, who serve as NADA national PAC director and NADA Illinois director, respectively. IADA also held our Annual Spring Board of Directors Meeting & Reception the following day at our Association Office. The reception is a nice way for us to thank the state legislators, staff and other government agency personnel for their support of our efforts throughout the year. Thanks to all our directors who offered their time and efforts to steer IADA in the direction to best support and strengthen the dealership franchise model! 9 Illinois Automobile Dealer News
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Anticipate every turn In an industry that’s always evolving, your dealership can rely on our Dealer Financial Services team’s 90 years of experience to see what’s around the corner, forward-thinking insights to prepare you, and technology to keep you ahead of the curve. What would you like the power to do?® Brad Bartsch, bradley.w.bartsch@bofa.com Tony Garcia, anton.r.garcia@bofa.com Diana Zamudio, diana.zamudio@bofa.com business.bofa.com/dealer ©2024 Bank of America Corporation. All rights reserved. 5949042 12-23-0324 Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value “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, derivatives, 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., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA. Anticipate every turn In an industry that’s always evolving, your dealership can rely on our Dealer Financial Services team’s 90 years of experience to see what’s around the corner, forward-thinking insights to prepare you, and technology to keep you ahead of the curve. What would you like the power to do?® Brad Bartsch, bradley.w.bartsch@bofa.com Tony Garcia, anton.r.garcia@bofa.com Diana Zamudio, diana.zamudio@bofa.com business.bofa.com/dealer ©2024 Bank of America Corporation. All rights reserved. 5949042 12-23-0324 Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value “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, derivatives, 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., which is a registered broker-dealer and Member of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. is a registered futures commission merchant with the CFTC and a member of the NFA.
Counselor’s Corner State and Federal Regulatory Compliance Considerations for Dealers Looking Ahead in the Wake of the Vendor Cybersecurity Incident Dealerships in Illinois and throughout the nation were recently impacted by the cybersecurity incident of third-party service provider, CDK Global, bringing dealership operations to a halt for a time — with aftershocks of that attack still looming weeks later.1 Affected dealerships adapted to the incident by resorting to pen and paper, as opposed to relying on their DMS systems, for so many aspects of their automotive businesses. In addition to working through logistical and operational problems from the incident, dealers must assess their legal obligations for compliance with applicable state and federal laws. It is imperative that affected dealerships evaluate the scope and effect of this cyber incident and determine their compliance obligations. Just because the incident was directed at a third-party vendor, does not alleviate a dealership’s responsibility for compliance. Dealerships utilize such vendors for a range of operational services from customer relational management systems (CRMs) to transactional and financial processing services and more. Despite reliance on the third party for these services, dealerships are responsible for their data and are the regulated entity under applicable laws. This means that dealerships have certain obligations following such a cyber incident. At a minimum, affected dealerships should obtain an incident report from the vendor2 and determine what, if any, dealership data may have been compromised, which includes evaluating the potential impact on customer and employee information. After determining whether dealership data was involved, certain state and federal notice and other requirements may be triggered. Dealers may have to give notice within specific time periods to customers, employees, regulatory agencies including the Illinois attorney general’s office3 under state breach notification laws4 and the Federal Trade Commission (FTC)5 under federal law.6 Under the amended FTC Safeguards Rule, financial institutions — which includes dealers — must provide electronic notice to the FTC as soon as possible and not later than 30 days after discovery of a notification event involving the information of at least 500 consumers. An unauthorized acquisition of unencrypted customer information is a “notification event” under the Rule. If the Rule’s notification requirement was triggered, each dealer may be required to file a breach notification with the FTC. However, as the recent incident is under internal investigation, the National Association of Auto Dealers (NADA) arranged for a filing accommodation with the FTC for dealers if the notification requirement under the Rule is triggered.7 There are still a wide range of FTC Safeguard Rule requirements to which dealerships must adhere, and the NADA arrangement would not apply to state breach notification requirements. The Illinois Personal Information Protection Act (Act) would require dealerships to provide notice of a breach to the Illinois Attorney General’s Office (if required to notify more than 500 Illinois residents), in addition to providing notification to the affected Illinois residents, following discovery or notification of the breach or unauthorized acquisition of computerized data that compromises the security of the personal information maintained by the dealership. The notice, as well as the “personal information” definition, timing, contents and methods for BY JULIE CARDOSI, ESQ. LAW OFFICE OF JULIE A. CARDOSI, P.C. 14 Illinois Automobile Dealer News
giving the notice, certain exceptions and other pertinent provisions, are expressly delineated in the Act. A violation of the Act is an unlawful practice under the Illinois Consumer Fraud and Deceptive Business Practices Act.8 Dealers should review and update their vendor contracts in the wake of the recent cybersecurity incident. Additionally, dealers should ensure their compliance with applicable state and federal laws relating to safeguarding and protecting information and maintain and update their incident response procedures in the event of a future cybersecurity incident. 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 38 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 dayto-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. 1. At the time this article was written, July 1, 2024, important details regarding the cyberattack had not been publicly available, including without limitation, information concerning whether dealer customer data was affected. 2. Though a vendor response might not be immediately forthcoming, the dealership should at least document the request for the incident report was made by the dealership. 3. https://illinoisattorneygeneral.gov/Consumer-Protection/For-Businesses/ Data-Breach/ 4. Illinois Personal Information Protection Act, 815 ILCS 530/1 et seq. 5. https://www.ftc.gov/business-guidance/privacy-security/gramm-leachbliley-act/safeguards-rule-form 6. FTC Safeguards Rule, 16 CFR Part 314 7. At the time this article was written, the security incident was under internal investigation by CDK and information regarding the incident was unavailable to dealers who were thus not able to determine whether the notification requirement was triggered. Because of this, NADA advised dealers that it worked with CDK and the FTC to permit CDK to file one electronic notification with the FTC for purposes of the federal Safeguards Rule requirement on behalf of all affected dealers in the event the service provider determines the requirement is triggered under federal law. Dealers can opt out of having CDK in this recent cybersecurity incident from handling this aspect on their behalf in which event the dealer would be required to file its own breach notification if it determined a notification requirement was triggered. 8. 815 ILCS 505/1 et seq (see page 16). 15 Illinois Automobile Dealer News
Hiring: It’s Not Just About Skills By Jaime Decker, Ethos Group Finding great employees is tough. One of the first things we look for when hiring people is whether or not they have the skills to do the job. Although skills are extremely important, they may not be the first thing to look for when filling a specific position in the dealership. There are some positions that require some previous experience, but these skills may not lead to the experience we are trying to create for our customers. In the book “Setting the Table,” Danny Meyer, the founder and CEO of Union Square Hospitality Group, suggests that to create the best experience for customers and employees, you must not only hire based on skill level. He suggests looking beyond just skill; look for some very important and specific personal qualities as well. Meyer defines these qualities as having a high hospitality quotient (H.Q.). Meyer owns several of the most awarded restaurants in the United States. From 2- and 3-star Michelinrated restaurants in New York, to the modern-day “roadside” burger restaurant, Shake Shack. Meyer states, “We hire 51% based on their H.Q., and 49% based on their skills.” As an employer, we have a clear idea of the skills needed, but it’s the specific qualities we are looking for in our candidates that will create a point of separation from the rest. Meyer highlights seven key qualities that we should aim to find in our candidates to ensure we hire the best employees. Let’s take a look at these traits and apply them to our industry: 1. Kindness It’s not rocket science; people like people who are kind. Kindness transcends all cultural and economic barriers. It’s also very good for you physically when you are kind. It is good for your blood pressure, your heart and your mental well-being, and has proven to produce large levels of dopamine in your system. This is good for the giver and the receiver of kind acts. However, it only works when duplicated repeatedly. A onetime act of kindness is great, but the fuel burns off quickly. We must refill the tank by being kind time and time again for it to really work. Be kind once, and you feel good for a bit. Be kind all the time and you always feel good. 2. Optimism Too often, people are disappointed that we’re not “doing as good” as we did before. True, without optimism, you’ll set yourself up to be right. According to the NADA, the auto industry is on pace to sell almost 16 million new cars this year! The most we have ever sold is 17.5 million. We are up over last year in volume, and it’s going to continue. If we are worried about yesterday, we forget about today’s opportunity. Optimism is not only a requirement for a great employee but also vital to a team’s success. 16 Illinois Automobile Dealer News
3. Work Ethic There is nothing better than a hard-working employee. Leaders love people that they don’t have to monitor to make sure they are doing the right thing and not just “keeping busy.” We want people to work with us, not just for us. Employees with strong work ethic are those types of people. Not only do they work hard alone, but they tend to be a team player as well. These people need great coaches! You can have the best people in the world and still not find success. That’s where you, the coach, make a difference. When you find someone with a great work ethic, you can teach them anything. They are willing to learn, and they will bust their tail to make the coach proud. 4. Curious Intelligence When people are inquisitive about things, it is a great indicator of someone who wants to grow. If you are partners with a person who never asks questions, you should be concerned. Curiosity is a sure way to learn, grow and become a better leader and teammate. We know that eight out of 10 consumers who purchased something in the last several years stated, “The salesperson never asked me what I wanted or needed before they tried to sell me something.” These consumers are looking for professionals who are curious about them. If we are not asking important questions and remaining curious, we are not selling. We are just assuming. There is no need for me to explain what happens when you assume. 5. Empathy According to studies, empathy is the number one thing people look for in their leaders today. It’s important that we hire people who can empathize and not just sympathize. If they can understand how to “see” things through others’ eyes, they have a direct road map on how to communicate with our customers and walk them through the decision-making process. When we know how people feel, we have the upper hand on delivering an exceptional customer experience, presenting the right products to each customer, and communicating that “we know” how it feels to be a customer. 6. Self-Awareness You can’t grow until you know. Growth starts with selfawareness. Hire people who can honestly evaluate both their strengths and weaknesses. We need people to be honest with us about their needs for success, rather than just telling us what they think we want to hear. This openness helps us to make specific improvements and lead them more effectively. One size doesn’t fit all, it fits one. Knowing how people see themselves helps us to bring out their best. 7. Integrity There is nothing more important for our culture and our reputation than to have a building full of people who do what they say and say what they do. At the end of the day, that’s what matters. Someday, all of us will walk away from this amazing business that we love. People won’t talk about how many cars we sold or how much money we made. They will talk about the kind of people we were and how much they did or didn’t enjoy working or doing business with us. If we can have people who have a common cause, and follow through on promises made, we can’t help but be successful. Integrity is the only thing we take with us when we are done, so make sure we are adding people with it to our team. Something to keep in mind if you are looking for these qualities in your candidates — be sure that you have these qualities as well. People tend to gravitate towards like-minded people. Raise your own “hospitality quotient” and you’ll notice that the right people will be drawn to you, and you’ll be excited to welcome them aboard. For more information on how Ethos Group can help your dealership develop more leaders in your F&I office, sales management tower and your sales floor in 2024, please contact Chris Nesseth at cnesseth@ethosgroup.com or (319) 270-4779, or Austin Shane at ashane@ethosgroup.com or (319) 296-8760. 17 Illinois Automobile Dealer News
THESE COMBINED SOLUTIONS OFFER NUMEROUS ADVANTAGES, INCLUDING: The Electronic Lien and Title (ELT) program provides a robust platform for lenders to securely and efficiently file, confirm, store, manage, and release liens electronically. ELT is integrated with the Global Lender Registry (GLR), serving as a comprehensive database to help dealers locate lenders with greater ease. ELECTRONIC LIEN AND TITLE (ELT) Faster & More Secure Lien Releases: Lien releases are securely expedited through ELT, ensuring faster processing times. Elimination of “Lost” Titles: A reliable and easily accessible digital repository safeguards lien and title documentation, effectively eliminating concerns related to the misplacement of titles. Reduced Costs: ELT significantly diminishes costs associated with the printing and handling of paper documents, presenting a more cost-effective approach to lien management. What to Know ELT & GLR TRANSFORMING VEHICLE TITLE MANAGEMENT IN ILLINOIS IL SOS AND CHAMP UNVEIL NEW ELECTRONIC SYSTEM GLOBAL LENDER REGISTRY (GLR) Comprehensive Lender Database: Access an extensive list of lenders spanning multiple states, ensuring you find the right match for your needs. Consistent Lender Data Across Applications: Our standardized data set ensures your information remains consistent across all types of liens, enhancing accuracy and efficiency. Seamless Dealer Processing and Intelligent System: Even if a lender is not yet in our system, the process remains smooth with a temporary lender code, ensuring no delays in your deals. Additionally, our platform continuously improves with use and feedback, providing the most accurate lender recommendations over time. © 2024 CHAMP Titles®. All rights reserved.
IT IS SIMPLE, HERE‘S HOW... LENDER CODE SYSTEM: Lienholder Registration: P-Code: If the Lender Code starts with a 'P', the lender does not accept electronic titles and requires a paper title to be mailed out. T-Code: If the Lender Code starts with a 'T', a temporary code is issued to proceed electronically. However, a paper title may be issued if the lender is not found. Non T or P Code: Any other letter that you may see will denote that the transaction is electronic. Examples: D12345IL or E12345IL. The lienholder will be notified electronically when the title is marked for release by the Illinois SOS. How Does ELT Work? IMPORTANT NOTE: © 2024 CHAMP Titles®. All rights reserved. 1 Lienholders are assigned a unique number to register in the State of Illinois. 2 Electronic Notification: When this ELT number is used in a transaction, an electronic notification is instantly sent to the lienholder, confirming their status as a secured party on the vehicle. 2 Accuracy is crucial! If an incorrect Lender Code is entered and a title is issued, correcting it will cost $50. However, if an ERT Correction sheet is attached, the correction for the Lien Holder and Lender Code can be processed without the fee.
IADA ensures automakers properly fund warranty repair services provided by trained, experienced technicians at auto dealerships. Below is an Op-Ed that IADA recently provided to the Chicago Tribune addressing their editorial on May 27. We welcomed the recent court ruling upholding the stronger consumer protections that Illinois lawmakers enacted to require automakers to properly fund warranty repair services provided by trained, experienced technicians at auto dealerships. We strongly disagree, however, that these protections are costing consumers money, as the Tribune presented in its editorial on May 27, 2024. In fact, evidence shows the opposite, and the benefits are clear, according to a recent study. Before this law, automakers were significantly underestimating repair times and paying less than fair-market wages for certified technicians completing important warranty repairs and factory mistakes. These limitations, enforced by manufacturers enjoying record profits and looking to reduce their costs from warranty programs that provide owners with important safety corrections, previously impacted technicians’ ability to correctly diagnose problems or ensure the quality of their repairs. Now, vehicles with design flaws and manufacturing defects are updated by technicians afforded the time to do the job correctly and safely. A recent study documents the positive impacts of the law for both drivers and mechanics. The Illinois Economic Policy Institute and Project for Middle Class Renewal at the University of Illinois Policy Study evaluated the law and its effects and concluded the positive economic impacts of HB 2940 have occurred at no cost to Illinois’ car owners, taxpayers and new vehicle dealers. This is good news for drivers whose vehicles may need to undergo updates covered by their new car warranties. Vehicle owners benefit from experienced professionals taking the necessary time to diagnose issues and correct engineering and production errors, resulting in fewer disruptions to their lives or multiple visits for service. And the peace of mind knowing their car or truck has been serviced correctly. As cars become more technologically advanced, adopt improved safety features and are engineered to increase efficiency, it is paramount that the trained technicians who repair these vehicles are respected and compensated for their expertise. Under this law, workers are benefiting financially. According to the study, Illinois vehicle dealership workers’ earnings have increased by $143 million annually, helping to solidify auto mechanics as a career opportunity in an industry that has been losing workers and facing challenges in hiring new technicians. The study also found that there was already a 9% reduction in employee turnover. While it is important for any industry to attract the next generation of workers, this law also ensures that current technicians no longer suffer under unrealistic deadlines and corporate pressures for bigger profit margins for auto manufacturers. The increased earnings have an impact across our state and in our communities. Our technicians are also your family members, friends and neighbors who have more spending power to support local businesses, save for retirement and begin college funds. In addition, Illinois auto dealers contributed almost $45.9 million in charitable causes in 2023, helping to support needed programs and non-profit organizations in communities across the state. “The data shows that this bipartisan law fixed a manufacturers’ defect and delivered wins for local businesses, skilled mechanics and taxpayers,” concluded University of Illinois Professor, PMCR Ensuring Warranty Repair Services Are Properly Funded 20 Illinois Automobile Dealer News
director, and study coauthor Robert Bruno, Ph.D. “Its effectiveness should encourage the state of Illinois to strengthen educational and enforcement efforts and other states to consider enacting their own warranty parity policies.” Other states are considering their options, as Illinois is not the only state choosing to place drivers and mechanics above corporate profits. At least four other states have enacted similar warranty parity laws. California, Wisconsin and Montana had laws prior to 2023, while Minnesota became the newest state with a policy in October 2023. Other states, like Colorado and deeply conservative Texas, have also introduced bills to end the two-tiered compensation system in automotive repairs. The economic impacts are clear. According to a study conducted by Auto Outlook, an independent automotive marketing firm, franchise car dealerships are responsible for 15.3% of Illinois retail employment. That translates to 87,800 jobs for state residents directly or indirectly employed by the new car industry. The same study reports that in 2023, new franchised automobile dealerships in Illinois collected or paid $3.37 billion in state and local taxes, an average of $4.81 million per dealership. Franchise auto dealers have long provided the reassurance of reliable, accountable service to protect the safety of the driving public. Our dealerships are making large-scale investments to prepare for more sales and service of electric vehicles, which will require more training and expert professionals as more of these vehicles hit the roads. The car-buying experience is continuously transforming, providing significant new opportunities for consumers, but one constant remains: Cars will need maintenance and repairs, even brand-new ones. It is nice to know that in Illinois, we are focused on the well-being of consumers and workers who provide that important service rather than on corporate automakers’ bottom lines. 21 Illinois Automobile Dealer News
Is Now a Good Time To Sell? What Today’s Buy-Sell Market Means for Automotive Dealers Considering an Exit By Jennifer Rafael, DSMA As a dealership Principal, the questions of if and when to sell require significant consideration. After all, when it comes to a legacy into which you’ve likely poured a sizable amount of sweat equity, it’s important to ensure that any potential transition reflects the value of the asset you’ve built. If selling your dealership is an option you’re considering, the right time to do so is always the timing that works best for you. External market factors will always be in play. The key to making a successful exit as a dealer is to navigate those factors to your greatest possible advantage. That said, a sizable contingent of dealership principals is finding themselves asking as of late, could now be the right time to sell? What’s important to know now if you’re a dealer eyeing an exit is that selling your business in a successful and profitable manner — even in today’s sometimes unpredictable market — is entirely possible when you have a strong team backing you. The question of “When is the right time to sell at top dollar?” is certainly relevant, but another question that is perhaps even more important is, “Who is the right partner to help me sell at top dollar?” A strong buy-sell partner who is well-versed in the intricacies of auto dealership mergers and acquisitions can help situate you in the best possible position in any given market. If you’re looking for the right partner, DSMA would like to invite you to discuss how our team can be the right fit for you in today’s evolving landscape. Post-COVID, there are many insecurities about the market. The industry initially encountered inventory and production shortages. However, as the pandemic subsided, the balance shifted markedly. Dealerships found themselves inundated with new inventory while facing difficulties in acquiring used inventory at profitable margins. Furthermore, rising interest rates have compounded the complexity of the situation. All this has meant profits are down for brands across the landscape of OEM. But that doesn’t necessarily equal a true negative impact for the industry. By exploring not only historical values, but future values as well, DSMA ensures that our service is relevant to the market. Through our strategic process, we’ve examined issues experienced during the last three years and projected modeling of what the next three will look like, based on market conditions. This approach allows us to right-size our values and make them relevant to today’s market. In other words, we give our customers a data-driven snapshot of the future — one that right now suggests it’s a good time to sell. Here are just a few reasons why dealers choose DSMA as their trusted advisor when considering making an exit from their business: • Strong network of interested buyers: Today’s dealership buy-sell market contains a healthy volume of dealers looking to acquire, which is one of the reasons why now may be an advantageous time for exiting dealers. Importantly, though, buyers must be chosen wisely. Different kinds of dealerships need different kinds of buyers. A qualified buyer is one who is likely to be approved by your dealership’s OEM, is familiar with your local market and has experience running a dealership of similar size and scale. A partner with a robust array of active candidates has a large pool to draw from when matching you as a seller with a buyer who will provide the right fit for your specific circumstances. • Industry-leading business valuations: As a dealer preparing for an exit, the importance of an accurate valuation cannot be overstated. A dealership’s valuation is one of the most influential factors in attracting the right buyer candidates for your business. A business assessed too high above market rate will struggle to attract buyers, leading to a longer time on the market, leading in turn to increased hesitancy among potential buyers. Meanwhile, a business assessed too low will reduce the returns seen by the exiting dealer. Producing truly accurate business valuations is what we do. • Full-service capabilities: Mergers and acquisitions require a diverse range of specialties. From legal experts to financial advisors, marketing consultants and more, many experts are required to ensure an efficient and successful transaction. It starts with our team of “matchmakers,” who do the heavy lifting for you to identify targeted, relevant and qualified buyers to successfully take over your business. From there, DSMA handles every step of the process — from due diligence to OEM approval and more. “As a dealer eyeing an exit, timing is a consideration, but timing isn’t everything,” said Jennifer Rafael, Vice President & Partner at DSMA. “Any set of market conditions come with their own pros and cons. When it comes to making the most successful and profitable exit possible, the most influential factor will always be the partner you choose to be your advocate in navigating those market conditions.” With the right partner by your side, you’ll be in the best possible position to make the most profitable exit possible under the market conditions surrounding you. If you’re a dealer considering whether now could be the right time for you to make a move, you can contact local trusted mergers and acquisition advisors in your market by visiting www.dsma.com. 22 Illinois Automobile Dealer News
OUR MIDWEST TEAM MIKE FUNK M&A Associate michael.funk@dsma.com 312.674.4556 JENNIFER RAFAEL Vice President, Partner jennifer.rafael@dsma.com 312.927.9561 JONATHON MORONI Business Dev. Manager jonathon.moroni@dsma.com 312.674.4556 GREG BROWN M&A Associate greg.brown@dsma.com 312.674.4556 CHRIS HAWLEY M&A Associate chris.hawley@dsma.com 312.674.4556 KEVIN CHRIST M&A Associate kevin.christ@dsma.com 312.674.4556 ZACH HICKSON M&A Associate zach.hickson@dsma.com 312.674.4556 LET DSMA STRUCTURE YOUR AUTOMOTIVE GROWTH. With over 1,900 valuations and 450 completed transactions, we are the leading mergers and acquisitions firm worldwide. DSMA’s extensive industry knowledge and tailored support services will help you find your colony. Contact us today to learn more about our 100+ acquisition opportunities. BUY@DSMA.COM +1 833-650-4188 DSMA.COM BUILD YOUR OWN HIVE.
A Better Core in 2024 DominionDMS.com (866) 928-3210 1515 South Federal Highway, Suite 406 Boca Raton, FL 33432, USA SCHEDULE YOUR DEMO Discover how VUE By Dominion DMS gives your dealership: Hearing the cries of the automotive community, we developed a brand new cloud core DMS, called VUE. This software is flexible, efficient and innovative. Schedule a demo and upgrade to a Better Core in 2024. EFFICIENCY INNOVATION FLEXIBILITY SAVINGS Personalization, Engagement, and Speed – the holy trinity of an amazing customer experience. Being a cloud-core DMS and using agile development methodologies means that we can keep dishing out top-notch solutions for our dealers and partners. Dominion DMS is easy to learn and simple to use. You have easy access from any web connection and you get to choose the apps you want and need to drive your success. Behold, VUE! Waving a magic wand to make DMS core fees vanish into thin air. Franchise dealerships can now save while still enjoying our best in class accounting, parts, sales, and service modules.
Climbing the Automotive Industry Ladder of Success By Sharon Kitzman, Dominion DMS In the auto industry, there is a gap between the number of women in leadership and those who buy cars. Maintaining that discrepancy is risky because it shows a lack of innovation when serving the market. Interestingly, women buy 62% of all vehicles today. Even if they don’t purchase directly, they influence 85% of car-buying decisions. Yet, while more women are in automotive leadership roles than ever, the statistics are still not great. According to Deloitte’s recent study, women account for 47% of the labor force but only 27% of the auto-industry workforce, even though those who do really enjoy it (Women at the Wheel study). The 330 women surveyed, also in a study by Deloitte and Automotive News, have an average tenure of 15 years at the same company and over 26 years in the industry. More than 80% are senior managers (directors, vice presidents and other C-suite occupants), and almost 60% are in marketing, sales, operations or product development. In most industries, women prefer conducting business with other women. Whether it’s their banker, doctor, lawyer, psychologist or salesperson, most women want to deal with the same gender because they feel more heard than when dealing with a man. Even though most women have done their research, they want someone who can understand them and listen. Can a man do this? Absolutely! But sometimes, women need to see another woman in the business before they will walk through the door in the first place. So why are there not more women in our industry? From the day in 1882, when Bertha Benz became the first person to complete a long-distance automobile trip, women have popularized the automobile and staged and led many noteworthy developments. There are many reasons why the auto industry fits well with women, and perhaps we all need to do a better job of highlighting those: 1. It’s a great industry for a career change. Many people find the need to switch careers, and the auto industry is an exceptional place to land. For many women looking to return to the job market after a leave of absence, the auto industry has many soft-skill jobs that offer a solid career path, from accounting to finance and beyond. 2. The opportunity to learn new skills. The auto industry offers a wide range of positions, each requiring specific skills to be learned and mastered. 3. A wealth of lateral job moves. Not all job moves need to go straight up. The auto industry has many opportunities that zig-zag, yet they still allow for growth. 25 Illinois Automobile Dealer News
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