in Factory Financial Statements Unlocking the Value Dealerships Must Use New Form I-9 As of November 1
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4 UTAH AUTO DEALER 22 ©2023 Utah Auto Dealer | The newsLINK Group, LLC. All rights reserved. Utah Auto Dealer is published four times each year by The newsLINK Group, LLC for the New Car Dealers of Utah and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and dealer 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 New Car Dealers of Utah, 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. Utah Auto Dealer is a collective work, and as such, some articles are submitted by authors who are independent of the New Car Dealers of Utah. While the New Car Dealers of Utah 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. 15 6 Executive Director’s Message Forward Thinking By Craig Bickmore, Executive Director 8 NCDU 95th Annual Convention Recap 9 Thank You, 95th Annual Convention Sponsors! 10 Unlocking the Value in Factory Financial Statements By Glen McMahon, CPA, CMA, Eide Bailly 12 Dealerships Must Use New Form I-9 As of November 1 By Matt Simpson, Fisher Phillips 15 Remaining Competitive in the Car Business: Professionalizing the Family-Owned Auto Dealerships By Kendall Rawls, The Rawls Group 18 Control What You Can By Justin Carr, Vice President, Warranty Processing Company 22 7 Powerful Vehicle Acquisitions Tactics That Will Boost Your Profits By Brian Kramer, Cars.com 26 Driving Utah’s Economy 18 CONTENTSPUB. 5 2023 ISSUE 4
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6 UTAH AUTO DEALER Forward Thinking BY CRAIG BICKMORE, EXECUTIVE DIRECTOR This time of year is an excellent opportunity to look back over the past months and give thanks for our blessings and for the challenges that hopefully taught us valuable lessons. And if all goes to plan, we can use those lessons moving forward. I want to thank our sponsors and the members who attended our 95th Annual Convention in Turtle Bay, North Shore Hawaii. We had a great time catching up and discussing important industry issues. I offer my sincere thanks to Brad Strong of the Strong Automotive Group for serving as the 2023 NCDU President. I am looking forward to working with John Miller, owner of Mark Miller Toyota, as he starts his term as the 2024 NCDU President. 2023 has had its challenges, but the New Car Dealers of Utah faced them head-on. I am so proud of the way our dealers have dealt with regulatory changes and found solutions to issues that have presented themselves in this volatile economy. The FTC Safeguards Rule has now been in effect for almost seven months. We, as an industry, have successfully addressed this regulation change. There have also been recent updates to the 1-9 Forms. Please make sure you are informed of this — we are highlighting the changes in this issue. EXECUTIVE DIRECTOR’S MESSAGE
7 UTAH AUTO DEALER Currently, our industry is faced with the changes that the new FTC Vehicle Shopping Rule will undoubtedly bring. Experts have voiced concerns that this rule will inject large amounts of time, cost and complexity into the vehicle sales process. This undermines industry efforts to streamline and improve customer experiences. On Oct. 4, 2023, Sen. Maron (R-KS) and Sen. Manchin (D-WV) introduced the FTC REDO Act. This bill would stop the proposed rule, which many believe is rushed and has taken an irresponsible approach. NADA expects this legislation to be introduced in the House and is expecting bipartisan support to address this concerning issue. Additionally, topics like LIFO Relief, electrification of the market and catalytic converter theft are being addressed by leaders in Washington, D.C., with input from NADA. Your voice is important in these conversations as well. I encourage you to reach out to the NCDU and your local representatives and engage in the critical conversations that need to be had. As you well know, 2024 is a big election year. It is more important than ever that we elect leaders that will support our industry. Taking time to do research on the candidates and ask thoughtful questions is more imperative than ever. With everything I have mentioned above and many other challenges I haven’t covered in this message, sometimes work, and even life, can seem overwhelming if we let it. When facing change, I think that Margaret J. Wheatley said it best: “In these troubled, uncertain times, we don't need more command and control; we need better means to engage everyone's intelligence in solving challenges and crises as they arise.” And that is where you, the NCDU members, have always stepped up and risen to the challenge. Thank you for all that you do to keep our association and industry strong. As always, don't hesitate to reach out to me with questions, concerns or just to share a great idea. I hope you and yours have a happy holiday season and a wonderful new year! Warmest regards, Craig A comprehensive understanding of your operations puts you in the driver’s seat. Eide Bailly’s dealership diagnostic check identifies issues, highlights strengths, and uncovers opportunities for improvement so you can keep your dealership running at peak performance. use your numbers to fuel success. eidebailly.com
8 UTAH AUTO DEALER NCDU 95TH ANNUAL Convention Recap Turtle Bay, North Shore Hawaii
9 UTAH AUTO DEALER Platinum Sponsors America First Credit Union ComplyAuto Diamond Sponsors Cox Automotive KSL Cars TrueCar Gold Sponsors CBIZ & MHM Goldenwest Credit Union HUB International Silver Sponsors Capital Automotive Real Estate Services IBG/eLeaderTech KSL Television — Channel 5 KUTV 2 News Ray, Quinney & Nebeker UADA Registration Service Company Zion's Bank Zurich Bronze Sponsors ACV Auctions American Fidelity Assurance Avalan Wealth, LLC Bank of America Merrill Lynch KSTU Fox 13 NADA Retirement from Empower Topham Legal Wells Fargo Bank White & Associates Contributors Performance Brokerage Services Steve Freeman Events Thank You 95TH ANNUAL CONVENTION SPONSORS!
10 UTAH AUTO DEALER Unlocking the Value IN FACTORY FINANCIAL STATEMENTS BY GLEN MCMAHON, CPA, CMA, EIDE BAILLY Dealerships juggle multiple moving pieces to ensure daily success. From fixed ops to variable ops and everywhere in between, dealership owners have much to plan, track and navigate daily. Successful dealers understand that big-picture review is critical for improved operations, growth and profitability. They know that when all its parts are operating at peak performance, the competitive edge is theirs. But where do you start? You begin by reviewing your factory financial statement. This amazing tool is loaded with information that, when properly utilized, can help a dealer closely monitor each of its departments. Many operators become so entrenched in day-to-day happenings that they don’t take time to step back and consider crucial business benchmarks and KPIs that can help improve operations and profitability. Besides lack of time or focus, some dealers have simply never been taught to read the factory financial statement effectively, so they stay in the rut of the status quo. That was a symptom recognized by a successful Rocky Mountain dealership that called upon Eide Bailly to bring a fresh set of eyes to their accounting department with a Dealership Diagnostic Check. Just like a dealer offers a vehicle diagnostic check to ensure their customers’ vehicles are working at peak performance, Eide Bailly’s multipoint financial inspection does the same for dealerships. Successful dealers understand that bigpicture review is critical for improved operations, growth and profitability. What We Found: Employee Classifications and Overtime In performing a diagnostic review for this dealership, we recognized that “Other Salaries & Wages” expenses per the factory financial statement were out of line with industry standards. As we worked with the dealer to gain more insight into this concern, we discovered that the cause of the higher expenses was primarily the result of employee classifications and overtime.
11 UTAH AUTO DEALER Just like a dealer offers a vehicle diagnostic check to ensure their customers’ vehicles are working at peak performance, Eide Bailly’s multipoint financial inspection does the same for dealerships. In an effort to resolve these two issues, we started by working with the client to determine the correct department and account to categorize employees. For example, a clerical expense that was charged to “Other Salaries and Wages” was re-mapped to a separate clerical expense account. Regarding the overtime reporting, the dealership appeared to be properly staffed, so there shouldn’t have been a need for so much overtime. After further investigation, we were able to determine that, with proper management, the overtime could be (and was) eliminated. While this only saved the dealership a few thousand dollars, the final result of the diagnostic was the proper categorization of employee salary expense, which gave the dealership the ability to quickly identify excessive salary costs. Additional internal control measures were put in place to assist the managers in helping to identify and control overtime. Performing a Dealership Diagnostic is a powerful starting point for affecting the bottom line. What We Found: Parts Inventory As is often the case during the process of the diagnostic check, we discovered more: an unusual adjustment in the parts inventory account. The days’ supply of parts inventory was above industry benchmarks standards. When our dealership advisors discussed the issue with the owner, he confirmed the parts inventory appeared to be outside the dealership norm. We then recommended a physical inventory count be performed on the entire parts inventory. As a result, it was discovered that inventory was overstated by $60,000. We then worked with the dealer to institute new procedures that would more accurately monitor the parts department inventory. The dealership also implemented a regular cycle count of parts bins. Furthermore, we recommended they use a third party for the physical parts at least every two to three years and provided vendor options to the dealership. What We Found: Warranty Labor Rate vs. Customer-Pay Rate Lastly, in reviewing the factory financial statement, we noted the reported warranty labor rate was low compared to the customer-pay rate. The owner was aware of the difference but didn’t have the resources to make the applications necessary to get approval for a higher rate. Eide Bailly assisted with performing an Effective Labor Rate analysis and submitting the application to the factory. The dealership was successful in obtaining a labor rate increase of nearly $10 per hour, resulting in an immediate increase in warranty labor gross profit. At the completion of the Dealership Diagnostic, not only did they make critical adjustments to more accurately provide a true financial picture of the dealership's health, but the dealer took advantage of more than $21,000 in tax savings thanks to the provided advice. These actions led to improved operations overall, as well as more opportunities for growth. When to Work with a Professional While some dealers think they already undergo various financial reviews, leveraging the experienced dealership advisory team at Eide Bailly to bring a multipoint review approach to optimize your dealership operations can have profitable results and provide a clear and accurate financial picture of your dealership health. Glen McMahon helps to lead Eide Bailly’s dealership consulting practice. With more than a decade’s experience in centralized accounting, internal auditing and report building, Glen helps dealerships streamline, simplify and automate dealership accounting functions. Glen’s extensive expertise in financial analysis and CDK/ADP DMS has saved some of the nation’s largest automotive dealerships and single-point stores both time and money.
12 UTAH AUTO DEALER Federal immigration officials just made critical changes to modernize the I-9 employment verification process. The new Form I-9 was made available for employers to use beginning August 1, and all employers must use the new form as of November 1. Here are best practices for compliance, given the new rules in effect. DHS Makes Changes to the Streamlined Form I-9 The new Form I-9 has been available for dealers to use since August 1. However, dealers must use the new form as of November 1. The full list of DHS’s changes include: • Reduced Sections 1 and 2 to a single-sided page by merging some fields; • Moved the Section 1 Preparer/Translator Certification area to a separate, standalone Supplement A that employers can provide to employees if needed; • Ensured the form can be filled out on tablets and mobile devices; • Ensured the form can be downloaded easily and removed the requirement to enter “N/A” in certain fields; • Revised the Lists of Acceptable Documents page to include some acceptable receipts, as well as guidance and links to information on automatic extensions of employment authorization documentation; and • Added a box that eligible employers must check if the employee’s Form I-9 documentation was examined under a DHS-authorized alternative procedure rather than via physical examination. DHS also reduced the length of the Form I-9 Instructions from 15 pages to eight pages and streamlined the steps each actor takes to complete their section of the form, among other changes. Qualified E-Verify Employers May Remotely Examine Form I-9 Documents Under current Form I-9 rules, employers are required to physically examine an employee’s original identity and work authorization documents. DHS has now created a separate framework to authorize alternative document examination procedures as an optional alternative to the inperson physical document examination method. The first alternative DHS authorized is an option for qualified E-Verify employers to remotely examine identity and work authorization documents beginning on August 1. Qualified E-Verify employers are those employers who are in good standing with E-Verify, have enrolled in E-Verify with respect to all hiring sites that use the alternative procedure and comply with all E-Verify requirements. If a qualified employer chooses to offer the alternative procedure to new employees at an E-Verify hiring site, they must do so consistently for all employees at that site. However, dealers may choose to offer the alternative procedure for remote hires only and continue to apply physical examination procedures to all employees who work onsite or in a hybrid capacity, so long as they do not adopt such a practice for a discriminatory purpose or treat employees differently based on their citizenship, immigration status, or national origin. A qualified E-Verify employer may continue to examine documents physically instead of remotely. Additionally, dealers must allow employees who are unable or unwilling to submit documentation using the alternative procedure to submit documentation for physical examination. DEALERSHIP MUST USE NEW FORM I-9 AS OF NOVEMBER 1 BY MATT SIMPSON, FISHER PHILLIPS
13 UTAH AUTO DEALER Requirements of the Alternative Document Review Procedure Within three business days of an employee’s first day of employment, a qualified E-Verify employer (or an authorized representative acting on the employer’s behalf) who chooses to use the alternative procedure must: • Examine copies (front and back, if the document is twosided) of Form I-9 documents or an acceptable receipt to ensure that the documentation presented reasonably appears to be genuine; • Conduct a live video interaction with the individual presenting the document(s) to ensure that the documentation reasonably appears to be genuine and related to the individual. The employee must first transmit a copy of the document(s) to the employer (per Step 1 above) and then present the same document(s) during the live video interaction; • Indicate on the Form I-9, by completing the corresponding box, that an alternative procedure was used to examine documentation to complete Section 2 or for reverification, as applicable; • Retain a clear and legible copy of the documentation (front and back, if the documentation is two-sided); and • Create an E-Verify case if the employee is a new hire. DHS Provides Relief for Certain Employers Enrolled in E-Verify During COVID-19 Flexibilities Perhaps the most significant development was the alternative solution DHS offered qualified employers who were left with the arduous task of bringing in all the employees they hired remotely during the COVID-19 pandemic to review their original documents and annotate their I-9s by the August 30 deadline. Qualified E-Verify employers can use the alternative procedure to satisfy the required physical examination of an employee’s documents for that Form I-9 if the dealer: • Was enrolled in E-Verify at the time they performed a remote examination of an employee’s Form I-9 documentation for Section 2 or reverification while using the COVID-19 flexibilities; • Created an E-Verify case for that employee (except for reverification); and • Performed the remote inspection between March 20, 2020 and July 31, 2023. These dealers should not create a new case in E-Verify. All qualified employers that use the alternative procedure instead of physical examination as described above must follow the steps of the alternative procedure and add “alternative procedure” with the date of examination (meaning the date the employer performed a live video interaction as required under the alternative procedure) to the Section 2 Additional Information field on the Form I-9 or in Section 3, as appropriate. January 12-15, 2024 Mountain America Exposition Center Scan the QR code to learn more and purchase tickets. https://autoshowutah.com/ GET YOUR TICKETS TODAY!
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15 UTAH AUTO DEALER Remaining Competitive IN THE CAR BUSINESS PROFESSIONALIZING THE FAMILY-OWNED AUTO DEALERSHIPS BY KENDALL RAWLS, THE RAWLS GROUP The Importance of Professionalism in Family-Owned Auto Dealerships In the current corporate landscape, family-owned enterprises are facing challenges as they vie for success against bigger conglomerates and nationally recognized brands. In the automotive industry, where consolidation is prevalent, family-owned dealerships are under significant strain to keep pace with their larger counterparts and stay relevant. One viable solution for family-owned dealerships to gain a competitive advantage is to adopt a more professional approach to running their business. The Role of Culture in FamilyOwned Auto Dealerships Successful family-owned dealerships or auto groups often neglect formalities that can lead to problems such as nepotism, inconsistent policies, and toxic family/business interactions. These issues can have a negative impact on performance and drive away valuable talent. Without top talent, family business owners will struggle to stay competitive, and the value of the business will decline rapidly. To remain competitive and grow the business, it is crucial to create an attractive culture that retains employees and customers while also performing well. The Unique Advantage of FamilyOwned Auto Dealerships At the NADA 2023 “Growth Strategies for the Family-Owned Business” workshop, Champ and Kendall Rawls discussed a unique approach for family businesses to succeed. Rawls suggested keeping
16 UTAH AUTO DEALER the “family” aspect in a family-owned business as it can provide a competitive advantage over private and public companies. Additionally, leveraging the existing name recognition in the community can be beneficial. To achieve success, it is essential to promote your dealership(s) as a local family-owned business while also incorporating the formalities of successful mega dealers and public companies. This approach can help maintain the family aspect while still achieving growth and success. Strategies for Professionalizing Your Family-Owned Auto Dealership Elevate the professionalism of your business by formulating, systematizing and transmitting your fundamental values. Construct a purpose statement, a future outlook and objectives and ensure that you and your team adhere to these indispensable principles. By applying this methodology, you can rest assured that your family enterprise will not only endure but also prosper. The Benefits of Professionalizing Your Family-Owned Auto Dealership To professionalize your family business, it is advisable to develop job descriptions for all positions, identify and adhere to core values, and establish standardized processes and procedures. This approach will result in increased efficiency and effectiveness in running your business and also position your business as one that values its employees and customers, thereby standing out in your community. “Professionalizing” your family business will mitigate emotional distractions allowing your people to focus on the purpose of their positions. By professionalizing your business, you are also building value in your business, which will support your longterm growth and succession strategy. Consider the following as it relates to achieving your family and business vision. 8 Steps for Creating a Growth & Succession Strategy 1. Determine your vision. Your vision may be to get out of day-to-day so you can focus on strategic growth and mentoring, to spend more time on hobbies and less time at work, or a combination of both. Whatever it is, it will involve some form of growth and change. • What is the WHY behind what you are doing now and what you want to be doing in the future? • Where do you see yourself in the next 5-10 years? 2. Share your vision with your trusted advisors. • Lean on expert advisors and trusted leaders to provide perspective and support based on where you want to go. Business, personal and family success is not a solo endeavor; it requires a team effort. 3. Evaluate who and what will be impacted based on where you are now and where you want to grow and transition into. • What resources do you need? • What infrastructure is required? 4. Develop a strategy with your team of advisors and key leaders to achieve your vision. • How will you develop or acquire the resources needed? • What is your one-year, two-year, three-year strategy? • Who is driving each project and how frequently will you meet to review the strategy? 5. Consider the possible, probable and potential issues that can impact achieving your vision such as: • Unexpected health scare or death of the owner/ key leader • Inflation, recession, supply chain, technology, political or regulatory issues • Conflict with business partners • Family issues influencing or impacting business decisions • Issues with strategic vendor(s) impacting business performance 6. Develop A, B, and C plans, considering your strengths, weakness and outside opportunities and threats; so no matter what is thrown your way, you have options to fulfill your vision. 7. Lean on your team of expert advisors to educate you so you can make well-informed decisions. 8. Re-evaluate your vision and proceed where necessary through steps one through seven. Kendall Rawls knows and understands the challenges that impact the success of a family-owned business. Her unique perspective comes not only from their educational background; but, more importantly, from her experience as a second-generation family member employee of The Rawls Group — Business Succession Planners. For more information, visit seekingsuccession.com or email info@rawlsgroup.com.
18 UTAH AUTO DEALER Control What In business, as in life, there are some things you can control and others you can’t. However, there are many controllable aspects of your dealership. For example, you can control how you spend your time, allocate your resources, respond to challenges and obstacles, and the suppliers you choose as partners to propel your success. Cycles Are Inevitable The automotive industry goes through cycles just like other industries. In 2019, dealers sold over 17 million vehicles. In 2020, it was less than 14.5 million vehicles. The number fell even lower in 2022 to less than 13.9 million. We’ve seen this before and know sales and service will pick up. The best thing you can do is get deep processes in place so your dealership can grow when sales rebound. A finely tuned service department can pick up the dealership. Warranties matter because they impact service revenue. When fewer vehicles are fixed, maximizing the profit margin for each repair is more important than ever. Payroll and Process Hold Hands This is worth discussing. If you make the process efficient now, you can keep your overall payroll smaller and may not need to hire anyone later. Having your house in order helps you avoid having to hire unneeded staff during the rebound, which can maximize your margin of profitability. Why Dealers Need a Warranty Service Partner No matter how successful you think your dealership is, you can strengthen it by looking at processes and training employees. Employees should know what matters and how they contribute to the dealership’s success. Understanding their role helps them to feel part of the bigger picture. This strengthens your culture and can help reduce turnover. Dealers who ignore issues with efficiency or timeliness hurt their dealerships in multiple ways that can affect their dealership’s longevity. First, managers need to know which processes are working or failing. Revenue can decrease if a manager cuts costs without understanding which costs grow revenue. For example, a manager might not realize a highly paid employee’s value in lifting the entire service department and training younger, less experienced employees. Being wellpaid doesn’t equal being overpaid. Second, dealers sometimes expand their payroll instead of maximizing their margin within the service department. Many people play a role in the life cycle of a warranty claim. Since people compensate for inefficiencies with workarounds, the results can affect the whole service department adversely. Hiring more people instead of improving the process costs you hard dollars and lets the service department continue to be inefficient. Increasing the profit margin is smarter than spending money unnecessarily; also, maximizing your margin when it is harder to make a profit will serve as preparation to grow profits more efficiently later. To improve how your dealership works, evaluate and improve the quality of your business decisions. Running a dealership is complicated. Getting knowledgeable and objective advice from outside the dealership can help you examine and improve your business’s processes. Your goal should be to capture every warranty dollar, but you must be granular to do that, and a General Manager’s job is typically not granular in that department. Instead, hire a warranty company to act as your partner. What the Right Partner Should Do A warranty partner can get receivables flowing and protect your dealership from audit problems, but they don’t just lift warranty claims. A good one boosts the service department by
19 UTAH AUTO DEALER You Can making it unnecessary for the service manager to spend time in the weeds. They also help the team work together more efficiently. Tech enablement is important on the fixed operations side of a dealership, but deep tribal knowledge and an equally deep understanding of data are also important. The warranty company helps the service manager focus on growth by fixing processes and providing insights and information. Owners and General Managers often don’t have a front-row seat to the intricate details that get and protect the money on a warranty repair. Although state laws are being implemented to combat dated factory policies, dealerships should not solely focus on getting a labor rate and parts markup increase. These types of increases will certainly help the bottom line, but are they being as impactful as they could be? Some dealers don’t maximize the warranty to include items like rentals, test drives, or any additional work that needs to be done so the repair is handled correctly the first time. They may skip signing and approving add-ons, which could ultimately result in you losing that money down the road. Sometimes employees leave items off claims because they don’t know how to get an advanced repair order paid. Teach them. Checks and balances in the warranty process are important to maximize repair orders. Adjustments that appear on the warranty schedule are not necessarily a bad thing. Imbalances are an opportunity to gain knowledge, fight for additional dollars and make corrections to processes or systems that improve efficiency. Too many dealers are submitting repair orders to the manufacturer before they are closed to the DMS system. Once they are paid, they are closed to the DMS for that amount. How can you ensure that you have collected every dollar in that process? What is your tool to monitor progress? In the previously mentioned scenario, there is nothing on the schedule that would show you that a rental was left off or a part was marked up incorrectly. It also creates risk and potential audit liability. Was a recurring problem not identified? Are you giving the manufacturer just reason to recapture your legitimate dollars stating that a repair didn’t follow policy and procedure? Be conscious that you are getting all the dollars the manufacturer will pay, and avoid closing repair orders after the manufacturer has released the credit statement. Audit each claim to ensure it complies with the policy and procedure, and nothing is missing. Ensure all codes are applied, identify and understand all variances before reconciling the differences, and update everything daily. It is easy to keep a schedule clean and running clean when you touch it every day. When warranties fall behind, they become a mess. When that happens, the work it takes to clean them up is extremely time-consuming and can involve many staff. By controlling the things you can, you make it easier to achieve your goals and objectives. You also minimize the risks associated with uncertain or uncontrollable factors. The right warranty company can help you create a clean, complete process. A WHOLE NEW WAY TO WHOLESALE Introducing Dealer Exchange, a FREE service by KSL Cars • Move inventory easily and locally • Avoid costly auction fees • Buy and sell wholesale right on KSL Cars • Quickly move listings from retail to wholesale https://cars.ksl.com/dealer-exchange BY JUSTIN CARR, VICE PRESIDENT, WARRANTY PROCESSING COMPANY Justin Carr is a VP at Warranty Processing Company, which recently relocated to Texas. Justin works with dealers nationwide to increase efficiency within service departments and educates dealer staff on why efficiencies matter. To learn more, please visit warrantyprocessing.com.
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RETAIL WARRANTY REIMBURSEMENT ARMATUS WORKS WITH 50% OF UTAH DEALERS ON AVERAGE, UTAH DEALERS ADDED $89,028 IN LABOR UPLIFT ANNUALLY ON AVERAGE, UTAH DEALERS ADDED $87,720 IN PARTS UPLIFT ANNUALLY ARMATUS HAS COMPLETED OVER 129 SUBMISSIONS IN UTAH The new Utah Warranty Reimbursement law went into effect on May 4th, 2023. While some dealers were previously able to submit for retail reimbursement under the old law, the new law provides significant advantages to help you achieve your true retail rates and all dealers should be taking advantage of this opportunity. Reach out to us today for a no-obligation evaluation of your parts and labor rates. OUR COMMITMENT TO OUR CLIENTS: ÙYou Won’t Lift a Finger: Armatus does all the work for you. ÙFully Contingent Fee: You only pay when you are approved. ÙSpeed and Accuracy: No one can complete a submission faster. ÙData Governance: Your customer information is safe with us. (888) 477-2228 info@dealeruplift.com WWW.DEALERUPLIFT.COM
7 POWERFUL VEHICLE ACQUISITION TACTICS THAT WILL BOOST YOUR PROFITS BY BRIAN KRAMER, CARS.COM 22 UTAH AUTO DEALER
23 UTAH AUTO DEALER TACTIC #3: Provide Consistent Values Across Your Platform With the proliferation of trade-in, digital retailing and chat widgets being mixed and matched on dealer websites, a growing problem has emerged where consumers receive different values for their vehicle on your website depending on the experience they’re using. For example, you may have a trade-in widget embedded on a landing page that provides an estimated value range for a vehicle. But the trade-in phase of your digital retailing tool uses a different source of data, resulting in an alternate value provided for the same vehicle. You’ll build trust by providing a consistent appraisal experience across your website platform. In turn, you’ll increase your chances of acquiring more vehicles. Take action by appraising a personal vehicle using the same tools on your website that your consumers use. Are you getting matching values across your different tools, or do they differ depending on the experience you’re using? TACTIC #4: Optimize Your Trade-In Page for Local SEO When you turn to Google to search using keywords related to selling or trading in a vehicle, you’ll typically find that a majority of the organic results belong to the big-name brands in auto. However, if you look closely, you’ll see that Google also will provide searchers with links to relevant local dealerships on the first page of results and in the map pack, if you have relevant content published on your website. It’s not enough to embed your trade-in tool on a basic landing page and expect it to be enough to crack the rankings by itself. You must also optimize and add content to that page that explains your process, and share your message of a local, quick, convenient and trustworthy experience. TACTIC #5: Market Your Experience Online Once you’ve refined your trade/sell message and have optimized that experience across all areas of your website, now it’s time to go to market with a strong message targeted to local consumers looking to maximize the value of their vehicle. You’re probably already running search engine marketing campaigns for your inventory, name and/or location; but do you have a campaign set up specifically for vehicle acquisition? With the majority of searches taking place on mobile devices, it’s hard to ignore the fact that the first one or two screens of the search results are sponsored listings. So even if you have an optimized trade/sell landing page that ranks organically, you still want to be able to catch a consumer’s attention right Compared to this time last year, inventory levels continue to improve. But we’re still not back to the number of available new and used vehicles pre-pandemic. Thankfully, there are always new tactics you can implement to help improve your dealership’s ability to acquire the right vehicles at the right price. Here are seven that will keep your lot stocked with fresh vehicles in the months to come. TACTIC #1: Use the Power of “Why Sell” During the height of the inventory shortage, as retail prices on used inventory soared, many consumers took advantage of favorable market conditions to consolidate the number of vehicles in their family fleet while improving their financial position at the same time. This shift in selling intent was clearly observable when looking at search trends for keywords like “sell my car” and “sell my car for cash today.”When we fast forward to today, this trend isn’t slowing down. Search volume for related keywords is still elevated well above pre-inventory shortage levels. That’s why it’s important not to focus your marketing and messaging on just “trades.”When you leave out the option for consumers to sell their car to you without buying one, you’ll be missing a key opportunity to acquire additional inventory. Be sure to keep your dealership top of mind for consumers offloading their current ride by combining a connected marketing campaign with your unbeatable local selling experience. TACTIC #2: Maximize Trade/Sell Engagement on Your Website If you want your website visitors to know your dealership will buy their car, you have to tell them. So, back up and amplify your “why sell” message on your website and other marketing channels. Overall, you want to highlight the benefits of trading or selling a car to your dealership. Be sure to include details like providing a guaranteed offer, avoiding the hassle of private sales and saving time and money. On your website, your trade/sell messaging should be front and center, making that experience only a click or tap away. Additionally, make sure to maximize your impressions by linking your trade/sell landing page to your main menu, and don’t forget to place a prominent CTA above the fold on your homepage.
24 UTAH AUTO DEALER from the start with a well-placed ad and with your dealership’s value propositions. For the biggest impact, look to increase your trade/sell reach by utilizing your other marketing channels like display, social and video to ensure that you’re sharing your message with local in-market consumers during all stages of their journey across platforms and devices. TACTIC #6: Get Trades from Traditional Ads Just as the inventory shortage was brought about by the pandemic, so was the accelerated adoption of technology that changed consumer behavior. One such technology is the QR code, which had been largely overlooked for a decade, but now has become a common feature in our daily lives. If you want to make sure you’re giving your dealership every opportunity to acquire more cars, use QR codes in your newspaper, direct mail and TV advertising. When scanned, they’ll lead a consumer directly to the trade/sell experience on your website. QR codes not only create engaging offline-to-online experiences, but they also provide a better insight into the ROI of your traditional advertising campaigns — which historically has been challenging to prove. TACTIC #7: Future-Proof Your Follow Up It’s important to understand that all the opportunities in the world to acquire a vehicle won’t mean a thing if you haven’t developed a specific follow-up process for your dealership. Too often, a trade or sell lead gets treated just like any other sales opportunity. It hits the CRM, and then a salesperson or BDC agent picks up the phone to give them a call. More often than not, they leave a voice message, and then the CRM automated email follow-up process kicks in for the next 90 days. As fewer people answer phone calls from unknown numbers and email continues to become less urgent for consumers to check regularly — texting has become the best way to follow up with all of your leads to get an immediate response. Closing Thoughts No matter how your dealership’s inventory is being affected by industry trends, there are always ways to enhance your vehicle acquisition process. Start by looking for simple ways to improve the tactics you’re already embracing. If you don’t see the level of results you want, try one (or all) of these tactics that you haven’t used before, and watch how it will make your acquisition operations more effective for today, and the future. Essential cleaning products to keep Utah customers and employees safe since 1991. Prepare your showroom, service department and cleaning bay areas to move effectively into the future. Contact us today to see how we can help you shine! (800) 488-2436 | Salt Lake City, UT brodychemical.com
25 UTAH AUTO DEALER Enjoy your association news anytime, anywhere. Scan the QR code to visit our online publication to stay up to date on the latest association news, share articles and read past issues. utah-auto-dealer.thenewslinkgroup.org Now that you are reaping the harvests of your success, what are you doing about planting the seeds for tomorrow’s success? The time for sowing the seeds for future success is when you are successful! Now is not the time to relax. Make sure you have the right business partner relationships that will help carry you into the future, not live on past successes! 24 years of putting YOUR dealership profits FIRST! WWW.FIRSTINNOVATIONS.COM WWW.FIRSTINNOVATIONS.COM Find Out What Hundreds of Dealerships Across The Country Already Know The First Group Family of Companies Better Products • Better Prices • Better Service
Source: Center for Automotive Research, NADA, S&P Global, Taxfoundation.org, U.S. Bureau of Labor Statistics, U.S. Census Bureau $894M $11.9B 1% Includes income taxes paid for direct, indirect and induced jobs. PAYROLL TOTAL SALES (all dealerships) REGISTRATIONS STATE SALES TAX PAID NATIONAL AUTOMOBILE DEALERS ASSOCIATION NADA Industry Analysis | 8484 Westpark Drive, Suite 500, Tysons, VA 22102 | 800.557.6232 | economics@nada.org NADA Legislative Affairs | 412 First St. SE | Washington, DC 20003 | 800.563.5500 | legislative@nada.org 141 DEALERSHIPS (new car) 25,730 TOTAL JOBS (created by dealerships) Includes 10,774 direct jobs and 14,957 indirect and induced jobs. 76 EMPLOYEES (average per dealership) Driving Utah’s Economy Annual Contribution of Utah’s New-Car Dealers Numbers reflect annual economic activity during 2022. $82,927 Average Annual Earnings $318M State and Federal Income Taxes Paid Utah’s Share of Total U.S. New-Vehicle Registrations $802M
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. Paul Cluff paul.cluff@bofa.com 208.908.2099 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
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