OFFICIAL PUBLICATION PUB. 3 2023 ISSUE 2 2023 KADA CONVENTION
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, contact Jason W. Smith, head of Dealer Commercial Services, 407-237-4011 or Jason.w.smith@truist.com. Truist.com/DealerServices © 2022 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.
©2023 Kentucky Auto Dealer | The newsLINK Group, LLC. All rights reserved. Kentucky Auto Dealer is published four times each year by The newsLINK Group, LLC. for Kentucky Auto Dealer Association 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 Kentucky Auto Dealer Association, 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. Kentucky Auto Dealer is a collective work, and as such, some articles are submitted by authors who are independent of the Kentucky Auto Dealer Association. While the Kentucky Auto Dealer 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. CONTENTS 8 16 19 6 President's Message Onward! By Jason Wilson 7 2023 KADA Executive Committee 7 Who We Are at KADA 8 2023 KADA Convention 11 Save the Date! 2024 KADA Convention 12 Register Today! The Annual KADA Golf Tournament 14 EVs and the Service Department By Justin Carr, Vice President, Warranty Processing Company 16 Partnerships Help Dealers Succeed By Sharon Kitzman, Dominion DMS 19 Capitalize on the Changing Structure of Auto Retailing By Truist 23 Drive Our Industry Forward by Contributing to Our KADET Fund 24 KADA Preferred Partner Programs 26 KADA 2023 District Meetings 4 KENTUCKY AUTO DEALER
Reliability is important. Equal Housing Lender. ©2021 M&T Bank. Member FDIC. CTD-903 210908 V1 Providing stability to auto dealerships since 1951. From the people closing the deal to the vehicles themselves, dependability is everything in the auto industry. Which is why dealers choose to work with M&T Bank for the long haul. Through the industry’s highs and lows, our clients have come to rely on our steady support. We’ve learned the ins and outs of the business along the way, enabling us to deliver the right products - from floor plan to construction financing, merchant services to purchasing cards, and investment management to 401(k) advisory and wealth planning. It’s this dependability that helps dealers like you do what they do best - run their businesses. That’s what understanding what’s important is all about. Get in touch with M&T today. Timothy Flynn Dealer Commercial Services tflynn2@mtb.com 412-398-7655 mtb.com/dealerservices
PRESIDENT'S MESSAGE JASON WILSON Dear Kentucky dealers, As summer is soon coming to an end, I’d like to reflect on our accomplishments so far this year and discuss where we’re headed. In June, we wrapped up our 76th Annual Convention at The Greenbrier alongside Virginia, West Virginia, and Maryland. The Convention was a great success, and we enjoyed a few days of networking, learning and fun. I want to thank our dealers and families who attended, as well as all our vendor partners who made the event possible. Together, we made the 2023 Convention the biggest one to date! During our business sessions, we heard from some incredible speakers who discussed the latest automotive trends and provided tools and motivation to become better leaders. And in the evenings, we let loose at our themed parties, including our KADA 85th birthday celebration. Please enjoy photos from the event in this magazine edition. And mark your calendars for next year's convention, which will be held from June 17-19, 2024, at the Sandestin Golf and Beach Resort in Miramar, Florida. Lately, we’ve been focusing on our partnerships and our plan for the rest of the year and into 2024. One of our goals as your association is to provide you with access to the best resources and services in the industry. We’ve worked hard to build relationships with vendor partners that not only offer competitive pricing and superior products but are also pioneers in their field. One great example is our new partnership with CHAMPtitles and Vitu. As you know, electronic titling and registration will become available to the state early next year, and we have found the perfect solution to streamlining this process for your dealership in these two KADA Partners. Stay tuned for more information about what they offer and how you can ensure your dealership is ready to take the step forward into modernization. I also recommend that, in the meantime, you check out Vitu Interstate for your out-of-state titling and registration needs. They offer a 50-state solution that allows you to seamlessly integrate out-of-state titling and registration transactions into your process. Continue to pay attention to our communications that contain all of this information. And don’t forget to register for our KADA Annual Golf Tournament on September 18 at the Frankfort Country Club. Spots are filling up quickly, so be sure to get your team together and sign up! Please mark your calendars for our District Meetings in the fall (details on page 26). These meetings are so important as we gear up for next year’s General Session. As always, thank you for your continued support and participation. Onward! One of our goals as your association is to provide you with access to the best resources and services in the industry. ONWARD! 6 KENTUCKY AUTO DEALER
2023 KADA EXECUTIVE COMMITTEE Moving the industry forward by advocating for car dealers to ensure that our members are being heard and understood by legislators. WHO WE ARE AT KADA Learn more about what we do by scanning the QR code below. https://www.youtube.com/watch?v=-wWpYIDMUCU JOE CUMMINS CHAIRMAN DON FRANKLIN AUTO GROUP DAVID MOORE CHAIR ELECT MOORE FORD CHRYSLER CENTER ROB MARSHALL VICE CHAIR MARSHALL AUTO GROUP RAY COTTRELL, JR. TREASURER RAY’S FORD CHRYSLER DODGE JEEP RAM NANCY SPARKS PAST CHAIR KERRY AUTOMOTIVE GROUP KIM HUFFMAN PAST CHAIR NEIL HUFFMAN AUTO GROUP CARL SWOPE PAST CHAIR SWOPE FAMILY OF DEALERSHIPS SHANE COLLINS PAST CHAIR BILL COLLINS FORD JIM REYNOLDS PAST CHAIR WALTERS AUTO GROUP DAN RENSHAW NADA DIRECTOR RENSHAW AUTO GROUP WWW.KYADA.COM 7
2023 KADA CONVENTION Thank you to all who attended our 2023 KADA Convention! We had a wonderful time with you and your families at The Greenbrier. Not only did we hear from some incredible speakers, but we celebrated KADA's 85th birthday and had some memorable evenings at our parties each night. 8 KENTUCKY AUTO DEALER
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2024 KADA CONVENTION We hope to see you again next year for our 2024 KADA Convention from June 17-19, 2024, at Sandestin Golf & Beach Resort in Miramar Beach, Florida. SAVE THE DATE! WWW.KYADA.COM 11
REGISTER TODAY! The Annual KADA Golf Tournament The Annual KADA Golf Tournament is teeing off again this September! The tournament will be held on Monday, September 18 at the Frankfort Country Club. You don't want to miss this opportunity to network with your fellow dealers and our vendor partners. Get your team together and register today! SCAN THE QR CODE TO REGISTER. https://kentuckyautodealerskyassoc.wliinc33.com/ events/2023-KADA-Golf-Tournament-61/register CONTACT US TODAY! 801.676.9722 sales@thenewslinkgroup.com Your Customers Are Too. Advertising Space Available. QR Code: website /#ad-space 12 KENTUCKY AUTO DEALER
Plan ahead for your dealership’s long-term legacy Setting up a succession plan is an important consideration for the future of your dealership. Now’s the time to think about your priorities, such as maintaining control, taxes, liquidity, employees and family. What would you like the power to do?® Learn more with our comprehensive overview of Dealer Financial Services Succession Planning at business.bofa.com/dealer. “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. 4882341 05-22-0512
EVs and the SERVICE DEPARTMENT By Justin Carr, Vice President, Warranty Processing Company Components break, and batteries have issues. As the vehicles evolve, there will be new opportunities for service. Starting with Ford, manufacturers seem to be giving the impression that they want to copy Tesla’s methods for handling repairs and eliminate the labor rate or parts markups they currently pay when dealers are involved. Doing so would increase their control and improve their bottom line, so manufacturers are putting requirements in place regarding the repairs a dealer can do. For example, Ford won’t allow dealer service departments to fix certain vehicles without having a specific equipment set. It will be interesting to see how this power play ends. We know dealers must protect the value of their service departments, and we also know that dealers understand service better than the manufacturers do. What are the first steps in finding a better solution? Recognize what the market is today and how it affects you. Also, continue planning for the future by getting clients in the door to repair and service their vehicles, and give them the best experience possible. A general manager may not have an expert to explain why a cost-cutting decision in the service department is a mistake, and it’s easy to miss important variables that drive revenue in the service department when you make decisions from 30,000 feet. Getting parts will continue to be a problem, and some repairs will take longer than others. As a dealer, do what you can to control processes, training and oversight. If you don’t have the bandwidth, find a strong partner who can fill in the gaps and work closely with your team. People are trying to automate the warranty process. It is nice when you can get simple repairs handled, but not everything is cookie-cutter. Your bread and butter comes from a few areas. One is maximizing the bigger repairs and understanding how to get the most out of that newly acquired labor rate or parts mark-up percentage increase. Another is creating efficiencies and processes that benefit the entire service department team. Education is still the key to growth and progress in service departments. Change is tough, but a lot of good can come from it. We’ve seen this repeatedly as disruptors redefine and restore balance to industries. EVs will cause a big shift, complete with changes to policy and procedure. However, as electric vehicles go mainstream, there will still be plenty to do in dealership service departments. EVs need maintenance and repairs despite dealer concerns that EVs require less maintenance than other vehicles because they have fewer parts and no need for engine-oil changes or regular service visits. For many dealerships, the service department’s bread-and-butter revenue mainly comes from work involving alignments, brakes, electrical systems, suspensions and tires. So it will help worried dealers to remember what’s on EVs: brakes, electrical systems, tires, steering systems and suspensions. Lube, oil and filter services have been the entry point for most service departments. Still, because EV batteries are heavy, EVs weigh more than otherwise similar vehicles with gas-powered engines. The weight wears out tires faster. Since EV tires need to be rotated and replaced more often, tire maintenance and replacement will be the new entry point for EVs. Additionally, EV repairs are usually expensive. History tells us that new technologies need an iron-out period, and EVs are no exception. 14 KENTUCKY AUTO DEALER
When managers see markets drop, it’s easy to make hasty decisions without understanding the impact of that decision on the service department. Managers might think they can find cheaper ways to do things, but then receivables shrink or inefficiencies cut into profit margins. Claims fall, revenue decreases and management doesn’t get the same knowledgeable reporting. That’s why it is important to think about how decisions affect everyone down the line as well as planning for the future. Everything will fall into place if we make good moves that benefit everyone. The service department must ensure their people understand their role and do their jobs to legitimately maximize warranty dollars. If the department can structure itself properly, which includes processes and efficiencies, they will be ready for the future. That future includes a rebounding market. When that happens, you want to be ready to absorb the full level of profitability by making sure the service department can deal with increased work without hiring staff. Manufacturers always make changes, so you need to hire and retain staff with the knowledge to direct repair orders. A Service Manager, Technician or Service Advisor like that can bring everyone else up. Even though it can be hard to find and hire staff with tribal knowledge, a lower-cost person doesn’t have the same skills. Skilled team players are expensive because they know their roles and what they should be doing. They stay in front, training and lifting the department. Hiring the right person or partner is like deciding whether to buy steak or Jello. Jello costs much less, but it is no substitute for steak. If you end up hiring inexperienced staff in critical positions, in the absence of having a lot of senior people, it is easy for bad habits to spread. Then you have bigger problems to fix and miss out on the money you could have been earning. Cleaning up these types of internal messes pulls your critical team members down rabbit holes they shouldn’t be in. Although many dealers don’t have the time and money to train in-house, they can create partnerships by consulting and outsourcing with a good outside company that acts like a life coach and mentor for their business. The dealership can use a consulting company to keep employees on track and responsible, including new people. The consultants can do stand-in work when employees are gone, lift teams, and keep them on track. The right company will actively find patterns of problems, spoon-feed dealers the information they need and give them options to improve. Dealers can then learn from the consultant’s processes and keep moving forward. With a nonbiased partner, you can find ways to help everybody and grow the service department. It’s important to know why you are doing something because you will get stuck or slide backward if you do things for the wrong reasons. Success comes from acting purposefully for all the right reasons. Although EVs are a big change, they offer dealers many new opportunities. Justin Carr is a VP at Warranty Processing Company, which recently relocated to Texas. Justin works with dealers nationwide to increase efficiencies within service departments and educates dealer staff on why efficiencies matter. Since EV tires need to be rotated and replaced more often, tire maintenance and replacement will be the new entry point for EVs. WWW.KYADA.COM 15
PARTNERSHIPS HELP DEALERS SUCCEED By Sharon Kitzman, Dominion DMS Ideally, vendors and businesses work together as partners. Having a genuine relationship and being able to problem-solve together is an advantage no matter what. The auto business is not exempt. Dealerships have done well during the last couple of years. But there’s a downside to good times: dealerships sometimes develop bad habits because it becomes so easy to wait for customers to come to them instead of going out and finding new ones. Without leadership and a good plan, teams can fall apart quickly. As John C. Maxwell said, “Teamwork makes the dream work, but the vision becomes a nightmare when the leader has a big dream and a bad team.” Having a vendor as an ally in business can play a crucial role in the success or failure of an organization. Organizations should work to strengthen their vendor relationships in the same manner that they focus on team development and fostering customer loyalty. Once your goals are set and your vendor has committed to working with you, it’s important to maximize the relationships so you continue to get the most out of your tools. Here’s how to keep relationships going so you see the best results: Team Training and Support Working with vendors to come up with a well-thoughtout training plan for your team helps with integrating new products into your dealership. At times, it can be hard to implement new tools because daily routines are set, and everyone is pressed for time. That’s why it’s important to work closely with your vendor to set your team up for success. When possible, bring in a vendor representative to train and educate your employees. That way, everyone understands how to use the new product. Key Performance Indicators (KPIs) Vendors should provide you with KPIs. KPIs create targets for your teams to hit, milestones to track progress, and insights to help organizations make better decisions. Using feedback from KPIs will help you to continually improve performance. Communication Set up regular check-ins with vendors to talk about what’s working and what’s not. This is where you can get the help you need. A receptive vendor will use your feedback to improve its product, so be honest. It is also important to establish open channels of communication for your team to ensure everyone using the vendor tools knows how to get help if they need it. Long-Term Training Training is not simply finished after the initial setup. Follow-up training from your vendor is important because it allows your team to give feedback, get questions answered and allows for training as the product develops new features. You’ll keep your staff engaged and maximize the value of your dealership tools. A good vendor is there to help you achieve your goals, so make sure to stay on the same page, keep your communication going, and continue to look for ways tools can benefit your dealership. Having a great relationship with a vendor who has a vested interest in your business can prove to be beneficial in a number of ways: Cost Savings Being a good customer — with consistent orders and on-time payments — can lead to vendors offering volume discounts and having special deals. 16 KENTUCKY AUTO DEALER
You already know about an increase in EV sales, but specifics are harder to find. How many will be built, and where will they be distributed? When will the national charging infrastructure become a reality? Additionally, what are the next steps in putting digital technology into ever-more-connected cars? How will tech partnerships with auto manufacturers affect product offerings and sales strategies, including the market for accessories? Also, what progress is being made on autonomous cars? Will interest rates continue to rise? How will that affect the drop in used car prices as market conditions stabilize and supply chains return to normal? What about the regulatory environment? Major changes in finance, insurance and lending have all taken place. How will dealers create a consistent sales experience for customers? Will they refine multi-channel coordinated marketing? Will they go to Gen Z’s current search engine favorite, TikTok? As the market changes, finding low-hanging fruit may be more difficult. Establishing and maintaining solid vendor Timely Deliveries In order for you to meet your obligations and provide excellent customer service, you need to have the tools you need delivered on time. That’s what’s great about having a good relationship with your vendor, they will prioritize you. Vendors will deliver the goods ahead of time. In addition, they’ll make sure that you get the best training and will follow up. Vendor Support When issues arise, the vendor will be prompt in their responses. More than likely, they’ll go beyond the basics to address your problem and compensate you for your trouble. Customization As your vendor begins to understand your business, they can provide you with unique and customized products that can create a competitive advantage over other businesses in the marketplace. Customer Satisfaction A strong relationship with your vendor can also impact other relationships, that of your customers and your company. When you deliver goods and services on time and free from issues, your customer relationships will become stronger. This can foster loyalty and trust as they will feel that their money is well-spent. There is more to consider. Recent trends in the auto industry are affecting dealerships, and dealers will have to adapt. What are some of those changes? Now is the right time to return to selling basics — focusing on customer service while maintaining cost efficiency, quality and developing your market are key. WWW.KYADA.COM 17
relationships is vital. Now is the right time to return to selling basics — focusing on customer service while maintaining cost efficiency, quality and developing your market are key. That means using your DMS to give you the information about customers you need. NADA keeps statistics about many aspects of the auto business, but one of those statistics has to do with inventory. About 2% of the people in a dealer database return to the market every month, but that doesn’t mean they return to the dealership where they bought their last car. Very few customers are loyal to a specific dealer, but a good DMS can help you to identify helpful information about customers: When was the last time they did business? Did they buy or lease? Pay cash? Buy insurance? What was their payment range? How do you track your customers who aren’t coming back to your dealership? The technology is now there to know when customers visit other dealers. Dealers can use that information to determine why their customers are going elsewhere and possibly find ways to bring them back. Google Analytics (GA3) is making way for a unified GA4 specification written by the Automotive Standards Council, due in November 2023. Also, you can look forward to tracking across all vendors and outcome-oriented conversion signals that replace clicks. With the pandemic over and concerns about disease fading, how is shared mobility developing? We know fewer people are currently buying new automobiles. Of those who do, they don’t often have much equity in their old one. Will younger people continue to avoid buying or driving cars, or will they finally decide that getting a license and having a car is worth the time and money? What will happen to the subscription-based services manufacturers are experimenting with? Some people are coming in to return leased vehicles and walking out with a substantial check instead of another leased vehicle. If fewer people are buying automobiles, that also means there are fewer used automobiles. Optimizing revenue streams has become critical to staying in business. Dealers and vendor partners both benefit from communicating ideas and solutions for the problems they see. It’s easy to spend time on administrative tasks instead of building relationships and talking with business partners is as important as any other task. Maximizing your vendor relationships will increase your return on your technology investments and keep your dealership ahead of the curve. Finding a balance is key. Listen to our VUE Points podcast to stay up to date with news and current events related to the automotive software and retail industry. https://www.dominiondms.com/podcasts/ Sharon Kitzman leads the launch and long-term growth of Dominion DMS. Previously, she managed the strategic direction and product development for Reynolds & Reynolds and Dealertrack. Her experience spans every area of dealership software development, including sales, marketing, product lifecycle management, process re-engineering, OEM management, professional services, and customer services. Kitzman is a recognized leader in the automotive industry for her expertise in DMS technology. She received numerous accolades for her leadership, including Automotive News Top 100 Leading Women 2015 and 2020, Auto Remarketing Women in Retail 2021, and AutoSuccess Women at the Wheel 2021. She has a Bachelor of Business Administration from Ohio State University. 18 KENTUCKY AUTO DEALER
Do I Stay in the Business or Exit? The auto retail market has remained strong in recent years — despite a turbulent economy — leaving many dealers in a surprisingly secure position. While that may be welcome news today, it’s only natural to wonder what tomorrow might hold for your dealership. You’ll need to adapt to keep up with recent technologies converging on the business. That includes retooling the services you offer and training your staff as more electric vehicles (EVs) become available. Servicing automated vehicles will add even more complexity and require additional skills. Don’t forget the rise in online customer shopping and buying. There’ll be more rebuilding needed to restructure your entire sales process from top to bottom using the latest technology. These changes will all require investment, management time and organizational energy. Larger dealership groups with more scale and greater access to capital should have no problem making these changes, but such opportunities could present significant challenges for smaller dealers. This combination of capital needs and major technology-driven change in a fragmented industry like auto retailing creates the perfect conditions for consolidation. If you’ve ever thought about acquiring other businesses or selling and transitioning your own, now’s the time to consider your options. Take Advantage of the Thriving Buy-Sell Market Start by analyzing the state of play with mergers and acquisitions in auto retailing. Buy-sell activity in the auto retail market is booming right now. Dealership profitability continues to outperform expectations, and CAPITALIZE ON THE CHANGING STRUCTURE OF AUTO RETAILING By Truist WWW.KYADA.COM 19
there’s plenty of available capital to put to work for your business. Public dealership companies want to expand, family offices are looking for investment opportunities and private equity (PE) firms like the high rates of return on equity in the auto industry. Blue sky values remain high for top franchise brands, with sales volume — a driver of brand value — pushing the leading premium and mainstream brands above their competitors. Import brands are favored over domestic brands, and buyers today are more comfortable with longer payback periods following acquisitions. “We’re seeing more and more private equity, family office and institutional investment in the automotive retail business, which for decades was closed to outside capital,” explains James Taylor, Head of Automotive at Truist Securities. “As we move forward, we're going to see even more of this type of capital infusion. Businesses will likely stay private, but the capital will be coming in from outside the automotive industry.” Consolidation will continue as dealerships expand through acquisitions and outside investors move more capital into the business. As the size and scale of a dealership offer even greater competitive advantages, the number of owners may decline faster than the historical 2% annual rate. Consider transitioning your business. Are you ready to take stock of the future you’ve envisioned for yourself and your dealership? Start by asking these questions: • Do you want to continue working as much as you are today? • Are there other projects you would prefer to be working on right now? • How will potential disruptors — like EVs, automated vehicles and digital experiences — affect your business strategy and desire to continue in the industry? • Are your plans for the future dependent upon the value of your real estate holdings? • Should you stay and expand your business by acquiring additional franchises/locations that would provide economies of scale and contribute to your bottom line? • How would taking on private capital partners affect the future of your dealership? A transition decision is a major one. Considering opportunities and longterm plans now will help you and your business prepare for shifts in the economy later. Think About the Future of Your Dealership While planning your next steps, be sure to offer suggestions to help guide the direction of your business after you’re gone. There are plenty of ways your company can still support your employees, your community, and — depending on how you structure your exit — even you after the transition. Make Sure Your Family Is Equipped To Handle a Transition In an industry where privatelyowned dealerships are largely comprised of family-owned and operated businesses, family transitions are common. Do you view your business as a legacy for your children and grandchildren? Would you like to see your heirs working in the company that you built? What if your children aren’t interested in running the business? What if they need more experience or don’t have the necessary skill set to be successful owners/operators? You might have many reasons to avoid planning a family succession. Maybe the planning cost is too high, or you don’t want to give up control. Maybe you’d rather not think about your own mortality. Families that successfully integrate the next generation into the business start the process early, providing support, education and experience. If you’d rather not burden your heirs with costly litigation, unexpected taxes, and contentious relationships, or if you don’t want to leave them a failed business, plan ahead. Manufacturers are more likely to approve a family transition if comprehensive planning has taken place well in advance. Taxes are an especially important consideration for any transition plan. Tax regulations that specifically apply to family-owned businesses could reduce or eliminate certain discounts and deductions which affect transfer value, so be sure to consult your tax advisors before finalizing any transition plans. What Happens When Your Heirs Refuse To Run the Business When keeping your business in the family isn’t an option, consider selling it to private or public groups to secure funding for the next stage of your life. Privately-owned dealership groups are looking to add additional franchises to complement their own dealerships. They have the experience, staff and organizational skills to take over your business with relatively little disruption. Private dealers that have strong track records often receive manufacturer approval with ease, simplifying the closing process. Family offices that aren’t currently in the automotive sector have emerged as a non-strategic investor group. Family offices evaluate investment opportunities based on long-term viability. They want to diversify their holdings and collect a solid return on their investments. They’re able to identify with a single-sector business as well as the family aspects of auto retailing. Not quite ready to exit the business? Want to take equity out of your company? Family office investors usually allow next-generation dealers to remain minority partners 20 KENTUCKY AUTO DEALER
while providing you with liquidity immediately at favorable valuations. Private equity firms (PE) are increasingly moving into the dealership market in pursuit of promising returns. PE buyers are often willing to accept longer payback periods, particularly when investing in premium franchise segments. The key to a successful PE acquisition is securing experienced management to lead the dealership/dealer group after the acquisition. PE firms typically retain dealership managers as minority partners to run the business and smooth the transition process, which helps secure manufacturer approval. Public groups need to grow to meet investor expectations. They’re expanding their territories, shoring up existing footprints and using their scale to invest in new technologies. Ready to leave your company but don’t have a succession plan in place yet? Public companies might be a good fit for you and your business. They have leadership experience and performance records that can help secure manufacturer approval for your transition deal. Create an Active Succession Plan Are you a seller, buyer or shareholder in today’s market? If meeting looming technology changes head-on is a challenge that excites you, consider acquiring another dealership. Investing in a company that aligns with your goals can be a prudent and lucrative decision. Growth through strategic purchases of complementary franchises and/ or dealer locations can improve your economies of scale, making major expenditures and improvements more cost-efficient. That can boost profits and business value, setting you up for even greater opportunities in the future. Make a Decision Should you stay or should you go? It’s a complex decision. Dealership valuation, franchise multiples, manufacturer approval, legacy and succession considerations all come into play. Preparing for an eventual transition early on — putting your personal finances in order, preparing the business, and maximizing your company’s value — will help ensure the integrity of your dealership and your retirement funding. Do you want to stay in the business, or are you ready to move on? Your options are plentiful. Talk to your Truist relationship manager about what’s best for you and your dealership, and they can schedule a confidential discussion on your options with the Truist Securities Automotive Retail Team. Go to truist.com for more information. MATH PROBLEMS AREN’T THE ONLY PROBLEMS WE SOLVE. LET US SOLVE YOURS. It’s impossible for a business owner to foresee every challenge a business will face or to know how to respond to every situation. At Bowden & Wood, we can offer you many standard solutions to your problem, or we can develop some more creative solutions when the standard answers won’t cut it. » Advisory » Strategic Planning » Buy/Sell Consulting » Retirement Planning » Audits and Reviews » Financial Statements » Taxes » Accounting and much more! (502) 583-0262 info@bowdenandwood.com bowdenandwood.com CALL OR EMAIL US TODAY. WWW.KYADA.COM 21
Find your new lending partner today. Andrew Carman andrew.carman@gecreditunion.org 513.577.8807 Voted Cincinnati’s Best Credit Union for a fifth year. Helping you to finance them In our line of business, partnering with a dealership is something we don’t take lightly. General Electric Credit Union (GECU) has proudly served the Greater Cincinnati Tri-State area for nearly 70 years, financing nearly $6 billion in auto loans in the last five years—and we are just getting started! We’re excited to come to the heart of the Bluegrass state as our dedicated team understands where you want to go, and we do it all with you in mind. Experience the GECU difference. Insured by NCUA | Equal Opportunity Lender
DRIVE OUR INDUSTRY FORWARD BY CONTRIBUTING TO OUR KADET FUND As we've seen over the past few years, there are constant threats to our franchise system and our business. Whether it’s industry changes, manufacturer demands or economic influences, we face many challenges. In order to confront these together with a unified voice, we need your support and participation. Building and maintaining relationships with the legislators that represent you in each of your districts is how we are able to protect pro-business and pro-dealer rights. It is how we are able to ensure that our elected officials understand the needs and issues that we face in the dealership community. Which is why we ask that you consider donating to our KADET fund today. WE are the car dealers, and WE need to have a strong voice. Thank you to our 2023 President’s Club members: • Joe Cummins • Nancy Sparks • Tim Sparks • David Moore • Kim Huffman • Shane Collins • Joe Cross • Vickie Kain Fister • Bill Cole • Dan Renshaw • Ray Cottrell, Jr. • Dwain Taylor • Dann Hughes • Tim Kanaly • Rob Marshall • Trey Marshall • Mike Hyde • Jeff Eickholz • Fred Tolsdorf • Tammy Coats • Mark Pogue • David Daunhauer • Bob Hook III • Kevin Collins • David Jaggers • Tammy Goodwin • Tim Short • Carl Swope • Tom Gill • John Zimmer NextGen President's Club members: • Alex Pogue • Tyler Jaggers • Phillip Gill • Deborah Renshaw Parker For more information about contributing to KADET, contact Melissa Peach at mpeach@kyada.com. Please scan the QR code to donate today. https://kentuckyautodealerskyassoc.wliinc33.com/events/GIVE-TO-KADET-PAC-CAMPAIGN-42/register WWW.KYADA.COM 23
KADA PREFERRED PARTNER PROGRAMS Kentucky Automobile Dealers Association (KADA) is pleased to recommend a broad range of products and services aimed at controlling expenses in every facet of the dealership. The following products and/or services are recommended by the association's Board of Directors and endorsed through the association. These vendors are reviewed periodically to ensure the quality of products and services meet the needs of our dealers and can provide special pricing through group buying. Dealer Online Platform Tom Rodriguez, (352) 931-1318 torodriguez@acvauctions.com Workers Compensation John Foresman, (502) 489-6255 jforesman@uscky.com Security Software & Services Scott Hudson, (513) 520-4187 scott.hudson@aura.com Dealership Supply Needs Chris Haas, (513) 772-2886 chaas0906@gmail.com Warranty Parts & Labor Reimbursement Leonard Bellavia, (516) 873-3000 lbellavia@dealerlaw.com Electronic Titling & Registration LT Slater, (216) 392-0695 lt@champtitles.com Complete Set of Solutions for the Auto Dealers Ernest Lattimer, (516) 547-2242 ernest.lattimer@coxautoinc.com Cybersecurity Compliance Sherryl Nens, (661) 210-3453 sherryl@complyauto.com Automotive Compliance Solutions Josh Koronich, (614) 325-0217 josh.koronich@comply.net Customer Engagement Technology Aris Woolfolk, (757) 814-0248 awoolfolk@digitalairstrike.com 24 KENTUCKY AUTO DEALER
Dual Price Strategy Technology Amberly Joseph, (817) 404-9253 amberly@dealermerchantservices.com F&I Products & Services Brad Geren, (502) 472-3671 bgeren@dpg-inc.com Todd Howard, (859) 382-3252 thoward@dpg-inc.com Kevin Voges, (812) 204-2251 kvoges@dpg-inc.com Larry Dorfman, (404) 732-5910 ldorfman@easycare.com Group Health Insurance & Voluntary Benefits Colin Royster, (804) 545-3013 croyster@integrumadvisors.com Ben Hoffman, (804) 357-6004 bhoffman@integrumadvisors.com Lawyer Accountant Brokerage Leonard Bellavia, (516) 873-3000 lbellavia@dealerlaw.com Settlement Recovery Services Kimberly Johnson, (818) 640-3164 Kimberly.johnson@mcaginc.com Service Department Products & Programs Robert Buffington, (859) 240-2989 rbuffington@mocmidatlantic.com NADA Retirement Program Jeff Liwacz, (609) 529-3546 jeff.liwacz@empowerretirement.com Kentucky F&I Forms Library Rose Pottkotter, (567) 279-3573 RoseMary_Potter@reyrey.com Mobile Learning Platform Jay Petznick, (816) 896-4587 jay@rocked.us Automotive Finishes Patrick Shaw, (859) 509-0382 patrick.shaw@sherwin.com Financial Wellness Platform Danijel Velicki, (757) 995-3134 danijel@getsqwire.com Matt Ridjaneck, (757) 355-2242 matt@getsqwire.com Electronic Vehicle Transactions Dave Spencer, (916) 857-6063 dspencer@vitu.com WWW.KYADA.COM 25
2023 DISTRICT MEETINGS LEXINGTON Tuesday, October 10 Embassy Suites by Hilton 1801 Newtown Pike Lexington, KY 40511 LOUISVILLE Wednesday, October 11 Hurstbourne Country Club 9000 Hurstbourne Club Ln. Louisville, KY 40222 NORTHERN KENTUCKY Thursday, October 12 Holiday Inn Florence 7905 Freedom Way Florence, KY 41042 WESTERN KENTUCKY Tuesday, October 17 Lake Barkley State Park 3500 State Park Rd. Cadiz, KY 42211 BOWLING GREEN Wednesday, October 18 Holiday Inn University Plaza 1021 Wilkinson Trace Bowling Green, KY 42103 *Please note that the meetings in western Kentucky and Bowling Green are Central Standard Time. Each meeting will start with a reception at 5:30 pm and dinner following at 6:00 pm. ONE LAST THING ... Did you know that you can enjoy your association news anytime, anywhere? Scan the QR code or visit: kentucky-auto-dealer.thenewslinkgroup.org/ Check it out! The new online article build-outs allow you to: • Stay up to date with the latest association news • Share your favorite articles to social channels • Email articles to friends or colleagues There is still a flipping book for those of you who prefer swiping and a downloadable PDF. 26 KENTUCKY AUTO DEALER
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. Harsha Ramayya harsha.ramayya@bofa.com 615.749.3442 business.bofa.com/dealer Making business easier for auto dealers. Especially now. “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
This magazine is designed and published by The newsLINK Group, LLC | 855.747.4003 Kentucky Automobile Dealers Association 152 Consumer Ln. Frankfort, KY 40601 502.695.3333 THE FIRST DMS WITH A $0 CORE FEE. EVERYTHING YOU NEED, NOTHING YOU DON’T. DominionDMS.com INTRODUCING CLOUD-NATIVE FLEXIBILITY SECURITY & CUSTOMIZATION AN AVERAGE OF $6,500 IN SAVINGS PER MONTH
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