Clean Up Oregon`s Dealer Only Auctions

Clean Up Oregon’s
Dealer Only Auctions
Inside This Issue:
Points to Ponder
AskPatty.com
Minnesota Bridge Collapse
Solutions in Profits for the Franchise and Uniquely Positioned Independent Dealer
• OREGON •
OCTOBER 2007
2
DEALER Solutions
October 2007
4. Thoughts from Monty King & April McVay
5. Points to Ponder
10. AskPatty.com
October 2007
11. Kelly’s Korner: Tracking the Numbers
12. Minnesota Bridge Collapse a Major Wake-up Call
13. Sweeping Changes Occurring
17. OVDA CE Credit
DEALER Solutions
3
▲
THOUGHTS FROM
MONTY KING &
APRIL MCVAY
T
here is an end in sight, finally, to the almost two year review of
advertising and price disclosures at the Department of Justice. On
August 24th, a final chance to oppose or support, show concern
about or ask for changes in the draft rules was held, but only one organization spoke in person, all the others had made written comments or
had meetings with DOJ previous to the final hearing.
OVDA participated in all of those chances, making comments and
getting some changes done. The final rules, when they are published,
will be somewhat different than those first proposed back in 2006,
but the majority of changes are minor, and affect new car dealers
much more than used car dealers.
The two main points OVDA and OPSA made in the closing days of
the comment period on advertising disclosures, rule 137-020-0050
however, were these:
The use of the word wholesale in a dealer name should be stopped
unless the dealer really is only a wholesaler. However, a grandfather clause should be put in allowing any dealer who already uses
wholesale in their name to continue doing so, and to be able to sell
some cars retail, as long as they disclose to a customer they are not
selling them a car at wholesale. Wholesale is, by any definition, a
dealer to dealer sale, not a consumer sale.
This will make Oregon much like all the other states, where the
word wholesale is not allowed except in dealer-to-dealer transactions. Many states actually have separate licenses for wholesalers.
The other benefit is that local governments will not be fooled into
letting people become dealers with at-home offices because they
have wholesale in their names, and then they begin selling retail
out of their homes in residential areas.
Eventually, those grandfathered will retire or go out of business
and Oregon will have a very clean retail/wholesale split of dealer
licensing.
OPSA participated in all these hearings, comment periods and reviews
as well. The primary point in the final OPSA written comment is that
the assembly of a motorcycle should not necessarily be part of an
advertised price, it could be an add-on. Unfortunately this position
was not accepted by the Department of Justice. OPSA members may
want to let the OPSA staff know what would be their preference for
future action? Legislation? One provision, though, is the manufacturer requirements on assembly need to be addressed. How can a
franchised dealer advertise a motorcycle unassembled when their
franchise agreement forbids the sale?
In our conversations with DOJ, however, the style of advertising comments a dealer can make was reviewed, and OPSA is recommending
4
DEALER Solutions
dealers comply with the current rules, of course, that assembly of a
motorcycle be included in the advertised price. Right after the price
can be a statement that says “You can buy this motorcycle for $___
less without assembly”.
Dealers could also warn consumers who are looking at prices on the
internet and from out-of-state advertising to watch out for hidden costs
not disclosed by those dealers. A dealer could say, for instance, “Watch
out for hidden costs by Washington and Internet motorcycle dealers who
do not include assembly in their price,” in their advertisement.
Knowing what the rules are can help a dealer comply with advertising rules, and can give a dealer an advantage over their competitor
who is not paying attention. Competing with dealers under different rule systems is not always the best idea, but sometimes that’s
what competition is all about, excelling in trying times and under
adverse condition.
CURBERS AT THE DEALER ONLY AUCTIONS
Is there really a ‘dealer only’ auction in Oregon anymore? If the ‘dealer
only’ auctions are truly keeping out the curbers, why are they letting
in ‘buyers agents’ that are not employees? If they are not checking
to see if these ‘buyer’s agents’ are not bona fide employees, then
who is? DMV has no procedure or employee card being issued for real
employees, although Oregon law allows them to provide an employee
card. Therefore, it should be up to the ‘dealer only’ auctions to police
themselves. Are they doing that?
There is a rumor that a petition is being circulated stating the signers are ‘for’ maintaining the ability of dealers to send their buyer’s
agents to the auction to represent the dealers. Members and Staff of
OVDA and OPSA also support bona fide ‘payroll’ employees’ representing dealers. In fact, we don’t know anyone who is against ‘bona fide
payroll employees’ being able to represent dealers, whether for Oregon
dealers or out-of-state dealers. But let’s look at the dirty details of
what is actually happening. What is a ‘bona fide payroll employee?’
Is it ‘buyer’s agent?’ Maybe, if the have their own dealer license or
are a ‘bona fide payroll employee.’ They certainly aren’t people who
get a 1099 statement from dealer (unless they have their own dealer
license). They also are not people who pay a dealer $200 for every car
they buy at the auction and sell on the street.
These curbers (and that’s what they really are) are ripping off the
honest dealers, increasing the costs of dealers buying wholesale at
the supposedly ‘dealer only’ auctions and therefore are increasing the
costs of consumers buying cars at retail.
THOUGHTS FROM MONTY
& APRIL ⎥ continued on page 8
October 2007
THIRD PARTY TRADE-IN GUARANTEE?
▲
POINTS TO
PONDER
QUESTIONS FROM A DEALER 1
BOAT REGISTRATION CHECKS
Question: Should I join Carfax? Any idea
how much it costs for members?
Multnomah County Sheriffs every once in a
while tour the moorages in the area checking
for expired registration tags for boats moored
or docked on the rivers.
Answer: The bad thing about Carfax and
Auto Check is they don’t have excellent
programs for dealers. But, whatever they
have, it would be good.
Carfax does not have any kind of ‘association’ rate. They have a different philosophy
about dealers. Its ‘get the consumers to
demand car fax reports from the dealers’,
and make the dealers pay for them, not the
consumers. It seems to be working!
We believe you can sell cars for more, if
you have a clean CarFax report. If it is not
clean, then you can save yourself from
getting sued if there is something that is
bad on it.
QUESTION FROM A DEALER 2
Question: Can I refuse to give a customer
a title?
Answer: Yes, we understand that the Department of Justice has stated a dealer may
refuse to give a title to a customer, if they
have such a policy that is non-discriminatory. A dealer may make such a policy, and
OVDA/OPSA believes it to be a good policy,
because people who trade their cars in
generally don’t want other people to know
they have owned the car, know who their
bank may have been or their address and
other information. It is a privacy problem,
really. A secondary question may be, can
I force the customer to pay the $50 title
and Registration processing fee? No. If a
dealer requires the dealership to process,
they cannot force the customer to pay
the processing fee, but they can ask the
customer to pay it. If there is an objection,
the dealer should negotiate a solution, or
just refuse to sell the vehicle.
October 2007
According to Oregon law, boats have to have
current registration to be operated or used
on the rivers, and just because a boat is at
a moorage does not mean the owner can let
the registration expire.
The Sheriffs will cite those owners through
the mail.
QUESTION FROM A DEALER 3
Question: By law, how many days do we
have to pay off a trade?
Answer: 15 days from date of possession.
All parties of interest, the bank (if any) AND
the registered owners have to be paid off.
Some dealers are not paying off the owner
until they get the title from the bank, and
this is wrong. They can get a fine of $1,000
for that type of late payment if there is a
complaint, or DMV just happens to catch it
in a regular review of paperwork.
A new law effective Jan 1, 2008 allows you to
undo the sale on the 14th day so you are not put
in a place where you have to pay off a trade-in
because financing has not been funded, or
approved, etc. It is never a good place to be,
if you have paid off a trade, then find out the
bank is revoking or not going to finance the
vehicle. You are then in a position of having to
give them their trade-in back (and everything
else of value) when you undo the deal, and
then you have a title of a car with no retail
installment contract to require payments.
(Please remember, staff and writers at OVDA/
OPSA and Dealer Solutions are not attorneys,
and do not give legal advice. If you want legal
advice, please see a licensed attorney.)
MANHEIM, Pa.—EBuyfigure.com has
launched a Trade-in Guarantee Voucher,
which guarantees the amount that a tradein vehicle is worth when the consumer
takes it to a dealership. Officials said
the voucher can be taken to any new-car
dealer to use in negotiating the price of
a new car.
“Anyone who has purchased a new car has
experienced the frustration of determining
the value of the trade-in. EBuyfigure.com
is designed to eliminate the hassle of
negotiating a trade-in value with the new
car salesman,” officials explained.
After entering the VIN of the vehicle to be
traded in and answering a few questions
regarding the condition of the car, a
Trade-In Guarantee Voucher stating the
guaranteed value of the trade-in can be
printed out.
If the salesman does not agree to match
or exceed the amount stated on the
voucher, eBuyfigure.com will buy the car
for the amount of the voucher, eliminating the hassle of negotiating with the
new-car dealership or selling the car as
an individual, the company said.
Knowing that eBuyfigure.com will guarantee the value of a trade-in gives an
extra edge in quickly coming to terms on
the final price of a new car, executives
pointed out.
Just submit the Trade-In Guarantee
Voucher to the salesman and leave the
car at the dealership for eBuyfigure.com
to pick up. The title transfers and all paper
work will be handled by the dealership and
eBuyfigure.com, executives concluded.
(from, Autoremarketing e-letter 9-5-07.)
Note from OVDA and OPSA: A guaranteed
amount, minimum amount or range of
amount being offered by a dealer for tradeins, however, is against the Unfair Trade
Practices Act in Oregon. No word on whether
this third party guarantee violates that in
any way, but since it is a third-party offer,
with no financial participation by the dealer,
OVDA/OPSA does not see any violation for
dealerships.
POINTS TO PONDER
⎥ continued on page 6
DEALER Solutions
5
▲
POINTS TO
PONDER
continued from page 5
QUESTION FROM A DEALER 4
Question: I was trying to look something
up on consignments. I’m not sure if I can
do consignments on a out-of-state dealer.
Can I?
Answer: Dealers are not supposed to take
consignments from anyone not on the title,
except another dealer. However, dealers in
other states are not exempt from Oregon
dealer requirements, so they cannot sell
vehicles in Oregon without an Oregon
dealer license. However, we have heard
the Oregon Insurance auctions are taking
consignments from out of state dealers,
and others who are not exempt from dealer
requirements. We know of no investigations
into those activities, although we might
not hear about them until the investigations are complete.
The ‘others’ could be a body shop in Texas
who buys a totaled vehicle at an Oregon
Insurance Auto Auction on the internet
(and does not have a Texas dealer license).
Since the sale is happening in Oregon,
Oregon rules apply. Since the body shop is
not buying the vehicle for any ‘exemption’
in ORS 822.015, we do not believe they are
supposed to be buying in Oregon. They are
going to buy in Oregon, truck it to Texas,
repair it, and sell it out the back door as
a Curber. They cannot buy the vehicle in
Texas because they don’t have a Texas
dealer license.
If this is what is actually happening, and
dealers are telling us it is, OVDA feels
this is very anticompetitive behavior,
and illegal, both in Oregon and in Texas.
Perhaps Oregon Business Regulation and
Department of Justice should look into who
is selling and buying totals in Oregon and
where they are being resold?
CERTIFIED USED CAR PROGRAM FOR INDEPENDENTS
STRONGSVILLE, Ohio—National Automotive
Experts announced it has formed partnerships
with National Vehicle Certification Program
Group, Virtual Motors, Automobile Resource
Group, National Warranty Administration Network, Onsite Analysis and Midas International
to offer independent and franchised dealers
the ability to certify their pre-owned vehicles
through the National Vehicle Certification
Program.
According to officials, this collaboration
enables the dealer to offer a Lifetime
Certified Powertrain Service Contract for
all vehicles certified through the National
Vehicle Certification Program.
The National Vehicle Certification Program
facilitates inspection of vehicles through an
independent, third-party firm at the dealer or
consumer’s location, executives explained.
After a thorough visual inspection and test
drive, the vehicle is photographed and
the images are uploaded to Virtual Motors’
Wholesale Vehicle Network.
The inspector pulls fluid samples from the
engine and the transmission and drops
them off at the Authorized Service Center in
the area. The Authorized Service Center will
perform a Scientific Fluid Analysis, which will
help to determine if the vehicle is eligible for
certification, officials reported.
All vehicles certified through National Vehicle
Certification Program will receive a 90-day,
or 3,000-mile, Engine and Transmission Warranty, in addition to being listed at no charge
on the WIN platform and www.fearfreecars.
com, which officials described as a soon-tobe-launched consumer site.
By forming the new partnership with Virtual
Motors, National Automotive Experts, in conjunction with National Vehicle Certification
Program, will now offer the availability of a
Lifetime Certified Powertrain Service Contract
to all individuals purchasing a certified
vehicle, executives highlighted.
The Lifetime Certified Powertrain Service
Contract is available on all cars with less
than 100,000 miles at the time of sale
and no more than 10-model-years old.
“This is an unprecedented opportunity for
independent and franchised dealers to offer
a quality pre-owned vehicle with a lifetime
of peace-of-mind to the purchaser,” officials
claimed.
The partnership between National Automotive
Experts and Virtual Motors also includes the
assistance of Midas International. Executives
explained that Midas will have an active role
in the maintenance requirements for the
certification and Lifetime Certified Service
Contract programs.
National Automotive Experts is based out of
Cleveland, Ohio, and specializes in promoting
and administering various automotive-related
after-market products for dealers and agencies, such as: Warranty Forever, No Use No
Lose, Elite Windshield and Theft Protection
and assistance in opening Producer Owned
Reinsurance Companies.
For additional information about National
Automotive Experts and its offerings, contact Bob
Mancuso, vice president of sales and marketing,
at (877) 222-1645. Virtual Motors is based out of
San Jose, Calif. It provides SmartDesk, which
is a complete DMS system, in addition to
ProfitXpress Special Finance Software, the WIN
Wholesale Inventory Network, F&I products and
services, training and marketing assistance and
many other solutions to the independent and
franchised dealers.
For additional information about Virtual Motors,
contact Ed Marko, vice president of sales and
marketing, at (831) 308-0404, Ext. 104.
(from, Autoremarketing e-letter 9-5-0)
CONFUSED ABOUT TEMPORARY REGISTRATION AND TRIP PERMITS?
ODVA and OPSA has asked DMV to look at changing the name of the ‘Temporary Permit’ into ‘Temporary Registration’. Since they are of the
same size and shape, and go in the same place on a vehicle, many dealers are always confused about what is paid for and when you can
use the ‘free one’.
Just a simple renaming could stop a lot of this confusion among dealers and their employees, especially since it is a civil penalty to use a
temporary permit instead of a trip permit, when a trip permit is the required permit. The only times a dealer can use a ‘temporary permit’
is when the buyer pays the dealer the DMV registration fee (not the title fee) or pays the dealer the $6 transfer fee to move their plate
from their trade-in to their new purchase.
6
DEALER Solutions
October 2007
LITHIA LAYS DOWN GAUNTLET TO REST OF INDUSTRY
Sid DeBoer’s Lithia group has announced L2 Auto, a portal that shows used inventory
across a wide stretch of his empire. What is shown, however, is how they are going to sell
their vehicles.
Basically, they are selling certified used cars. They are promoting several aspects the rest
of the industry will have to take a close look at, as well as the Attorney Generals in all the
states they are marketing in, which is all 50.
Lithia is promoting used sales with these provisions, at least when we looked at the site
August 29.
• 3 day return, no questions asked, no rules
• 60 day warranty. It breaks, they fix it. 100% bumper to bumper.
• Low, negotiation free pricing. They won’t haggle. The listed price is the only one they
will accept.
• 240-point inspection
Of course, the customer now needs to look at the small print at their website,
L2auto.com. It says “The Pricing shown above is believed to be accurate, but we do not warrant
or guarantee such accuracy. The prices shown above may vary from region to region, as will
incentives, and are subject to change. Vehicle information is based off standard equipment and
may vary from vehicle to vehicle. Call or email for complete vehicle-specific information.”
This is the first time we here at OVDA have seen variable pricing in advertising. According
to our knowledge of Oregon advertising rules, the advertised price must be the price they
sell it at, or lower. So, in Oregon, if the vehicle is sold in Oregon at an Oregon location, it
would be at or lower than the price on the internet . We’re also curious about what incentives
there are on a used vehicle. Perhaps they are just using boiler plate language for a new car
site on this used car site and haven’t figured out that won’t work, at least in Oregon.
What we didn’t see on the site, was any indication that if a vehicle was in Denver, and
purchased through L2 Auto, and brought back to Oregon, would a Lithia dealership here
uphold the L2 Auto warranty? A question we would be asking if considering a purchase.
This article was written with an eye toward Oregon advertising of used vehicle rules in mind,
not other states, but many states have similar unfair trade practice rules.
Interesting concepts, however, and definitely a step up in the competition department for
all the other dealers out there that sell used cars and trucks.
AUTO FRANCHISE NEWS
Hillyer’s Mid-City Ford in Woodburn and
Suburban Ford in Sandy have received Ford’s
resident’s award for outstanding customer
service and exemplary dealership operations. Suburban Ford received the ward for
the ninth consecutive year.
Also in the news is a new dealership location by the Kendall Group for their Toyota
franchise. The new site is where Keifer
Mazda was, across form the existing Toyota
store. The facility is being created with the
aim of earning a silver rating from Leadership in Energy and Environmental Design
with it’s energy saving and other ‘green’
features be included in the building.
In Astoria, Lum’s Auto Center will be moving
to Warrenton on alternate Hwy 101 and
expand to 36,000 SF.
REQUIRED POSTING
As an employer, you are required to post
the NEW mandatory Federal Minimum
Wage Poster. All employers, regardless
of size, are required to post the most
recent Minimum Wage poster along with
other required Federal Posters (5), even
if Oregon’s minimum wage is different. If
you don’t have a new poster, you can place
the new Minimum Wage over the old one.
The new Federal Minimum Wage is $5.85
per hour. You are also required to pay and
post the higher Oregon Minimum Wage,
$7.80 per hour.
But, beware of the mailers you might get
that look really official, wanting $40 or $60
for a set of the posters. There are better
ways of getting the posters.
MOTORCYCLE TEMPORARY PERMIT AVAILABLE
The temporary motorcycle permits are available to order. Call 503-945-5052, the Business Regulation Office, to order. However, the customer copy is
supposed to have instructions printed on the right side. Those instructions did not get printed on the current permit for some unknown reason.
The permit is placed on the back of the motorcycle and there are instructions at the top saying where to place the permit. The only thing
that is missing is the instructions on the customer copy that tells the person to keep the customer copy available for inspection. The
dealership should tell the customer to keep the copy with them in case they get stopped.
We have heard from DMV that the second time the permits get printed, the instructions to the buyer will be printed on the right side. The
dealer, however, should go ahead and remind the customer each time the permit is issued that they should keep their copy available for
inspection, at least until they get their regular plate.
Permits of all types are kind of confusing to dealers, so why isn’t the Temporary Permit instead called the Temporary Registration? Nobody
knows. Certainly the name change would make sense, for both the auto Temporary (registration) Permit and for the Motorcycle Temporary
(registration) Permit. OVDA and OPSA have asked DMV what they think of the idea, and hope
POINTS TO PONDER
to get an answer back in late September.
⎥ continued on page 8
October 2007
DEALER Solutions
7
▲
POINTS TO
PONDER
FIRM OFFERS OF CREDIT
continued from page 7
AUCTION GM BECOMES NIADA
PRESIDENT ELECT
Evidently there are not enough dealers
who want to be president of NIADA
because they recently chose the General
Manager and Chief Operating officer (and
part owner?) of the Corry Auto Dealers
Exchange (An auction in Pennsylvania) as
NIADA’s President Elect.
Bad policy. We don’t doubt the abilities,
intents or desires of Mr. Swift, but wonder
why, if he wants to be an officer of a
national association, he would not choose
the National Auto Auction Association.
Also, why, with the thousands of member
dealers nationwide, would NIADA dealers
choose an auction representative as the
dealer president.
Dealers should remind their local associations that although most dealer auctions
have dealer licenses, auctions are still
vendors of dealers. They exist because
dealers need and want a place to conduct
wholesale business together with no retail
pressures, no curbers cutting in and with
dealers from their own state and from out
of state bringing vehicles in for sale.
We believe the melting together of dealer
associations and auctions should handled
carefully. Auctions have historically
supported dealer associations very well.
Never, however, should auction people take
over state or national dealer association
leadership roles.
FROM DEALERTRAC
The winners and losers for the 1st half of
2007 in sales:
Winners:
Saturn
Mitsubishi
Lincoln
Jeep
21%+
20.6%+
14.5%+
113.4%+
Losers:
Scion
Buick
Jaguar
Hummer
28.9%27.9%27.4%17.3%-
So if you’re thinking of any in the last
group, now might be the time…
And if you want to know who’s really
leading the way, Toyota beat both Ford
and Chevrolet in May & June sales in the
US to become #1.
Here’s an opinion! That’s all, just an
opinion. If you are looking for a good
car to drive—not to be seen in—just a
great value, you can not beat late-model
used from Ford, Chevrolet and Chrysler.
Low resale value makes these cars a real
steal. Or you could pay $25,000+ for a
new Accord…
A quote from Cars.com: “According to
Dealertrac, a market research firm, Credit
Union rates in December of 2004 were an
average of 1.68% lower than bank rates on
48 month new car loans, and 2.06% lower
on used car loans.”
▲
THOUGHTS FROM
MONTY & APRIL
continued from page 4
Who is gaining by this situation? Dealers illegally letting those
unlicensed dealers access to the auctions. The curbers themselves.
The auctions.
We come across, again and again, companies
marketing in Oregon mailing services to
dealers, who are getting their mailing lists
through a credit reporting agency (there
are only 3 main agencies) offering credit to
consumers.
A recent article, by Thomas Hudson, of Hudson
Cook LLP, who writes Spot Delivery, Carlaw
and other books and articles in industry
magazines, talked about how many class
action suits there are and have been in the
United States, against car dealers who picked
the wrong company to advertise with who
are making an offer to sell cars with credit,
without making the offer a firm one. The
answer? Almost 250 class action suits AT
THE SAME TIME had been filed at one point!
Whether you are right, or wrong, it is still a
pile of money for the attorneys.
OVDA has several agencies it works with on
compliance with the rules for those and other
types of advertising mailers. This is not an
easy subject, but then again it really isn’t too
hard. The offer must be firm. The dealer should
not lie about anything they say or offer. The
offers must be real. It must only have a few
conditions (like they are still working) and it
must be for a specific amount of money, not
a range of money.
In Oregon, the general debate is, how much?
Certainly, in Oregon it is enough to buy a car,
because they are offering the funding (loan)
for the customer to buy a car at that specific
dealership, from that specific lender. No other
lender can take advantage of the offer.
Who are the agencies that work with OVDA?
Call the office if you are interested
Upon the recommendations of our members, we have put in this
magazine a page called ‘Clean Up Oregon’. We asked dealers what they
thought of the statement, and whether we should put it in the Dealer
Solutions magazine for general distribution. It was an overwhelming
response. Not one dealer said ‘No, don’t do it!’ Just rip it out and deliver
it to somebody: DMV Business Regulation, a ‘dealer only’ auction, or
even OVDA or OPSA. Just do something.
It is time this stopped. The ‘dealer only’ auctions should stop this.
DMV Business Regulation should stop this. Dealers should stop this.
Who goes first?
Take a look at the law. ORS 822.005 says who is a dealer. It includes, in
subsection (3) ‘anyone who acts as any type of agent’. A ‘Buyer’s Agent’ who
is not an employee, based on that law, needs their own dealer license.
8
DEALER Solutions
Monty King
President, OVDA
April McVay
President, OPSA
October 2007
calendar
October
November
October 7 to 9
12th Annual National Speical Finance & Buy-Here,
Pay-Here Conference
Caesar’s Palace, Las Vegas
Leedom & Associates, visit www.twentygroups.com
for information.
Nov 6
Tuesday Live Class, Wilsonville Holiday Inn
Board Room, 8:30 a.m.
Oct 12
Friday, Live Class, Wilsonville Holiday Inn
Board Room, 8:30 a.m.
Oct. 19
Cascade Auto Auction, Portland,
Government Vehicles Auction,
(503) 492-9200
Oct. 23-26
Kelly Enterprises F&I Seminar 4-Day Advanced
Portland
www.JLKelly.com (800) 336-4275
Oct 25
Thursday – Live Class, Wilsonville Holiday Inn
Board Room, 8:30 a.m.
Nov. 11-13
NABD Underwriting and Collections Conference.
Wyndham Greenspoint, Houston, TX
(713) 290-8171
Nov 15
Thursday, Live Class, Bend Deschutes A room at the
Riverhouse, Noon to 5 p.m.
Nov 16
Friday, Live Class, Wilsonville Holiday Inn
Board Room, 8:30 a.m.
November 27
Buy Here Pay Here Collections Training Seminar.
Sarasota, FL
Leedom & Associates, (800) 966-8733
Nov 30
Friday, Live Class, Wilsonville Holiday Inn
Board Room, 8:30 a.m.
Oct 25
Buy Here Pay Here Collections Boot Camp,
Washington, DC,
Leedom & Associates, (800) 966-8733v
December
Dec 13
Thursday, Live Class, Wilsonville Holiday Inn Board Room, 8:30 a.m.
Dec 27
Thursday, Live Class, Wilsonville Holiday Inn Board Room, 8:30 a.m.
Note special start times in Klamath Falls and Medford
October 2007
DEALER Solutions
9
•
D
ealers are always talking about how to
sell cars to women, but don’t usually do
anything about training their staff on
how women think about cars. It is estimated
that over 50 percent of all cars are bought
by women, and women influence the sale of
85 percent of all cars. To quote Jody DeVere
of AskPatty.com, “You can spend hundreds of
thousands of dollars on how to bring women
into the dealership, but if they don’t have a
great experience while they’re there, you’ve
just thrown away a lot of money.”
Have you or your staff actually gone to someplace like AskPatty.com and looked at what
is available?
We at OVDA/OPSA did just that, and it was interesting, to say the least. On their ‘Womanars’
Podcasts, there are seminars and conversations
from a variety of women who are prominent in
the industry giving their views and expertise
away to women, and of course are available to
you and your staff, right on line, all for free.
The current podcasts are:
• Alternative Fuels, Hybrids, and Efficient Vehicles Oh My! By Cristin
Lindsay, Senior Director of the Automotive X-Prize, 20 minutes.
• eBay Motors: Tackling the Worlds’
Largest Online Marketplace by Sarah
Draley, Vice President of Marketing
and Acquisitions at Rocket City Automotive Group, Inc, 20 minutes
• How to Read a Tire’s Sidewall and Tire
Safety 101, by Mary Aichimayr, managing editor of Tire Review Magazine,
20 minutes
• How to Sell Your Car Private Party and
Get the Most Money out of Your Older
Vehicle by Heather Conary, Founding
partner of Illumination Design Creative Services, 30 minutes
10 DEALER Solutions
•
•
•
•
Know What You Are Buying: Make
Sure to Get a Pre-Purchase Inspection,
by Kim Walker, Peak Automotive, and
‘The Most Female Friendly Shop in the
Triangle (NC), 20 minutes
Under The Hood: Lori Johnson Teaches
the Importance of Oil and Coolant, Lori
Johnson, Owner and instructor of ‘Ladies, Start Your Engines!’, 20 minutes
Why are Women Different?, by Marti
Barletta, CEO and founder of ‘The
TrendSight Group’, about marketing to
women. 40 minutes
Financing A Vehicle and Knowing about
Insurance and Warranties, by Jenny
Trostel, owner of ‘Saab of Baltimore’,
20 minutes
How to Buy a Great Used Car, by Amy
Mattinat, Author of book of same title,
columnist on auto repairs, maintenance
car care and safety, 30 minutes.
Want to be a ‘Certified Female Friendly Dealer’?
They have a training program for dealers
to obtain this certification. And, they say,
women are going to their site looking for
female friendly certified dealers in the dealer
locator and will come to your lot because of
that certification. We did a search of ‘Certified Female Friendly Dealers’ within 50 miles
of Salem, and came up with only one dealer,
Lexus of Portland.
Dealer Solutions asked AskPatty.com
Question: What is in it for an independent
dealer?
Peter Martin CEO of AskPatty.com
Answer: Number one is the valuable training
to become more effective selling to women.
Two, the ability to be listed on the AskPatty.
com site and third, receive additional exposure in local markets utilizing our co-branded
advertising and marketing programs.
This program is focused and tailored to women
and that’s where AskPatty.com can help a
dealer as an independent or franchise dealer.
We look at your advertising budget and ask,
“Is there any money focused on women, who
are more than 65% of the customer base?” A
large portion of the budget should be reaching
out to this influential demographic.
Are dealers paying attention to the trend? It’s
obvious dealerships have some room to grow
here. While our main program was designed for
the franchise dealer we developed a program
Jody DeVere of AskPatty.com
AskPatty.com
⎥ continued on page 11
October 2007
KELLY’S KORNER
Tracking the Numbers
By Jan Kelly
W
hen you are promoted into senior management, you end one
chapter of your career and enter the realm of numbers. There
really is no mystery to our industry—it is all in the numbers.
The difference in just getting by or having an outstanding year is in
the numbers. While every business wants to cut expenses, many cut
the wrong expenses. It is the wise business management team that
can identify what to cut. I was recently asked why I have the F&I
managers source customers. By knowing what brought a customer into
the dealership, senior management can make an intelligent decision
on where to place its advertising dollars. How many repeat or referral
customers do you get? How many listen to country and western radio
and how many listen to Christian radio? How many watch late night
cable TV? If you have no response to those questions, you are at the
mercy of the advertising rep who walks into your office with someone
else’s information.
Change in every organization begins by looking at production numbers,
identifying where weakness is, and then making a plan of action. Often,
the action is asking questions. Other times, the action is education on
a correct process. And other times, when people refuse to grow, they
need to be invited to drink coffee elsewhere.
Article written by: Jan Kelly, President of
Kelly Enterprises. She is a sales trainer and
consultant, convention speaker, and writes
frequently for industry publications. For
information about training opportunities
or joining our F&I 20 Groups, visit www.
JLKelly.com.
Kelly Enterprises F&I Training Calendar
By viewing the closing ratios of the Sales Department, the wise manager
can identify the strengths and weaknesses of each sales consultant.
Perhaps you have a person who conducts a great interview, but cannot
do a walk around on a vehicle.
The managers who watch the trends, production, and closing ratios will
know where to spend advertising dollars. They will also know what skill set
to focus on during their educational meetings or one-on-one coaching.
▲
ASKPATTY.COM
continued from page 10
that really works well for the independent used car dealerships, because
of the many requests by independent dealers who wanted to become
certified female friendly.
Because of the high US divorce rate, many women have credit challenges and are single people or heads of household. We reach out to
these women and assist them by arming them with expert advice on
purchasing a vehicle. If you take care of them, they will bring their
friends. If you don’t, they tell all their friends!
4-Day F&I Seminar Schedule
October 23-26 Portland, OR
November 6-9 Dallas, TX
2-Day Advanced F&I Seminar Schedule
December 13-14 Portland, OR
Kelly Enterprises P.O. Box 821665 Vancouver, WA
98682, Corporate Office Ph (800) 336-4275
Fax (800) 980-9420 • Email: [email protected]
Web: JLKelly.com
Working with the dealers – This aspect is run by Peter Martin.
Question: Is there a benefit for the small dealer?
Answer: Yes, if they are looking to grow, they will have a competitive
advantage. The AskPatty.com certified female friendly programs helps
small dealers partner with our strong and trusted brand by women.
Women don’t start out dealership loyal. They are looking for what the
dealer has to offer and the smaller used dealer can compete on a level
playing field by giving women a superior car buying experience.
We have One Goal—provide information to women about their automotive needs. There are two aspects of that goal, two charges, with two
leaders who run our programs.
We (AskPatty.com) continue to grow. We just launched the AskPatty.
com Auto Finance Center, a new service that assists women in financing their next purchase for a new or used car, in partnership with
myAutoloan.com. Women can qualify online for a loan with a quick
and easy pre-approval process, this allows women to walk into the
dealership with a check in hand.
Empower Women – This aspect is run by Jody DeVere
For information on how to sign up as a dealer, go to askpatty.com.
October 2007
DEALER Solutions
11
Minnesota Bridge Collapse
a M a j o r Wa ke - u p C a l l
A quarter of U.S. bridges need massive work
A
merican Highway Users Alliance President and CEO Greg Cohen addressed the
Minnesota bridge collapse on behalf of
road users nationwide.
“First and foremost, the American Highway Users Alliance offers sincere condolences to the
victims and their families and friends affected
by this terrible catastrophe. Our hearts and
prayers are with them,” Cohen stated.
“The collapse of the I-35W bridge serves as a
major wake-up call that we cannot continue
to let our nation’s infrastructure fall into disrepair. A quarter of U.S. bridges need major
work because our main highways and the
Interstates have reached a midlife crisis. Time
and time again, civil engineers have warned
that a crisis is imminent. Now is the time to
get to work,” Cohen remarked.
“We need to invest in bridge and road infrastructure, particularly related to safety
measures. On a typical day, 118 people are
killed on our nation’s roads - about one-third
of whom would have survived if road safety
investments were made. Also, there should
be enough redundancy in the highway system
that if a bridge or road needs to be closed
for emergency repairs or replacement there
is an adequate alternative route for motorists to use.
As a public service, The Highway Users has
provided a direct link to the National Bridge
Inventory on our web site, www.highways.
org. However, we call on the Federal Highway Administration to simplify the inventory
so that motorists can easily look up their
local bridges. Currently, users must spend a
significant amount of time researching the
12 DEALER Solutions
database to easily understand the coded bridge
inspection information.
According to the American Society of Civil Engineers, the nation’s roads and bridges require
$9.4 billion invested per year over the next 20
years to be sufficiently maintained.
“It is time for Americans to realize that we will
have to pay for a solution and help prevent any
further catastrophes. However, the increase will
be rejected if Americans think the money will
be diverted for wasteful projects, so we need
to make sure Congress is held accountable to
improve the current federal highway program.”
“In the long term, it is also vital to promote the
engineering profession as a national priority.
It’s a shame that the heyday for American
civil engineering in this country was half a
century ago. There should be a strong and
steady stream of engineers trained to properly maintain and improve our nation’s aging
infrastructure,” Cohen noted.
Monty King, President of the Oregon Vehicle
Dealer Association is a Board member of the
Oregon Highway Users Alliance, affiliated of
the National Highway Users Alliance. April
McVay, President of the Oregon Power Sports
Association is a member of the Oregon Highway
Users Alliance.
The History of the Oregon Gas Tax
Year
Tax (Cents) Years since increase 2007 .24 Cent Value
1919
1921
1923
1930
1933
1949
1967
1982
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
2007
1
2
3
4
5
6
7
8
9
10
11
12
14
16
18
20
22
24
2414
n/a
2
2
7
3
16
18
15
1
1
1
1
1
1
1
1
1
1
.24
.12
.23
.37
.50
.80
.53
.44
.17
.18
.19
.21
.22
.25
.27
.29
.31
.33
.35
3,700
Population x 1,000
1,521
The CPI inflation calculator used, uses the average Consumer Price Index for a given calendar
year. See calculator at http://data.bls.gove
October 2007
Sweeping Changes Occurring
by Ed Curry, Ward’s Dealer Business
Why is this important? Simple. The Internet has caused the tide of
competition for the franchised dealer to move from the independent
dealer body to the private-sale arena. This will change many things
for years to come if this becomes a trend. As a franchised dealer, take
note and start reacting today.
For franchised dealers, certified pre-owned unit sales continue to
grow. CPO unit sales reached a new all-time high 1.64 million. Yet
ome sweeping changes are taking place just off the radar screens
there are hundreds, even thousands of dealers that are not really in
of most pre-owned departments. While these changes are occurring
that market segment.
almost unnoticed, they will have an impact of historic proportions.
They already are affecting your pre-owned success.
The dealers that are competing for the CPO business are getting
better at it. Every month since January of 2006, the premium prices
For the first time in years, private-sale transactions outnumbered used-vehicle
paid for CPO units have increased, showing that we are no longer
deliveries by both franchised dealers and independent dealers. The used-car
industry recorded roughly 42 million transactions to customers in 2006. Of
Sweeping Changes Occurring
that, franchised dealers captured about 34%, independent dealers 30% and
⎥ continued on page 15
private-party transactions 35%.
S
October 2007
DEALER Solutions
13
CLEAN UP OREGON’S “DEALER ONLY” AUCTIONS
Turn this page in to any ‘dealer only’ acution or Oregon’s DMV Business Regulation Office in person or by fax or mail.
ORS 822.005 states a person has to have a dealer license if they; (c) Act(s) as any type of agent for the
owner of a vehicle to sell the vehicle or acts as any type of agent for a person interested in buying a vehicle to buy
a vehicle.
Bona fide ‘payroll’ employees are exempt from this rule. According to this law anybody with a
letter that says that person is a ‘buyer’s agent’ for a dealership must have their own dealer license
unless they are a bona fide ‘payroll’ employee. There is no exemption anywhere for an auction
to avoid this requirement.
I want Oregon’s ‘Dealer Only’ auctions to:
• ensure they only let in dealers and legitimate dealer payroll employees (both Oregon
and Out-of-State dealers).
• publicly define what is a legitimate ‘Buyer’s Agent’. (See above, somebody who
has a dealer’s license or a bona fide payroll employee)
• publicly define what is an unlawful ‘Buyer’s Agent’
• ensure cars bought by out-of-state dealers and their employees leave Oregon.
• limit to at least 1 year the time a Buyer’s Agent’s auction card is valid*.
* ‘Forever’ is not acceptable.
I do not want to have to continue to compete with curbers at Oregon’s ‘Dealer Only’
auctions.
I want:
• dealers who are helping curbers get into the ‘Dealer Only’ auctions to be banned from
the auctions and turned into DMV
• the ‘Dealer Only’ auctions to do everything necessary to stop unlicensed ‘buyer’s agents’
who are not real dealer ‘payroll’ employees from getting into the auctions.
• curbers turned in to Oregon’s DMV Business Regulation office so they can be fined
according to the curber law.
Address and fax numbers of Oregon’s Dealer only auctions and DMV’s Business Regulation Office
Oregon Business Regulation Office
Chief Investigator
1905 Lana Ave NE
Salem, OR 97314
Fax: 503-945-5289
Northwest Auto Auction
General Manager
90485 Auction Way
Eugene, OR 97402
Fax: 541-689-6049
Cascade Auto Auction
General Manager
23585 NE Sandy Blvd
Portland, OR 97060
Fax: 503-492-0115
Portland Auto Auction
General Manager
3000 N. Hayden Island Dr.
Portland, OR 97217
Fax: 503-240-6317
OVDA note to Dealers: This is a statement to
the management of these organizations about
their business policies, not a statement to their
employees or others who do not set the policies
in their organizations. Please be courteous
to the management and employees of these
organizations as these issues are discussed.
Statement is provided by the Oregon Vehicle Dealer Association. PO Box 4290, Salem, OR 97302, Fax: 503-763-1233
14 DEALER Solutions
October 2007
▲
SWEEPING CHANGES
OCCURRING ⎥
continued from page 13
just taking a traditional used-vehicle customer and “forcing” them
into a CPO unit.
When this happens, there is little or no premium paid. In fact, the
average premium paid for a CPO unit in January of 2007 ($1,692), is
more than double the premium paid in January of 2006 ($806). These
numbers obviously vary by brand, but still increased by over 100%.
Pre-owned inventory will continue to become scarcer. Trades taken in
on new-vehicle deals have declined by 20% from 1996 to 2006. Trades
taken in on used-vehicle deals have declined by 16% over the same
period. Inventory purchased at auctions has increased by 31%.
What’s going on? Well, behind the scenes, there was a huge drop in
lease volume in the 2002 to 2004 time frame, which causes a lower
number of off-lease units to enter the market when the leases expire.
Also, more leasing customers are opting to purchase their units when
they come off lease.
Add to this the fact that in 2007, rental companies will control over
50% of the units in their portfolios as risk units. So, there could be
trouble ahead for inventory procurement, at least for the late-model
program vehicles. To top it off, many manufacturers are scaling back
from rental fleet sales.
October 2007
The Internet will continue to grow in both retail transactions (dealer
and private) and dealer-inventory transactions. Last year 27.5% of all
used-vehicle customer transactions were initiated or conducted via the
Internet. AutoTrader.com boasts of over $99 billion in transactions.
eBay Motors now sells one unit every 60 seconds and ATC-OnLane
reported over 114 units sold per hour. And they are open 24 hours a
day, 7 days a week.
Most dealerships have become serious about selling new vehicles online.
When you consider that reliable estimates show seven of 10 automotive
Internet users will or did buy a used vehicle online, it’s time to get
serious about the Internet aiding our pre-owned departments.
Related to that is a fundamental shift in advertising media consumption
and the advertising business in general.
In the future, advertising will be digital, personal and measurable. It
will be delivered to individuals based more on their personal circumstances than through an interruption-based technique, such as the
way TV and radio are today.
The newspaper landscape and the advertising agency landscape are
changing rapidly to adjust. Newspapers are folding and selling out in
record numbers. The old standby print “liner” ad is dying. Monitor your
advertising effectiveness with a vengeance and think about digital
marketing and advertising.
Ed Curry is director of pre-owned operations for NCM in-house
training and consulting. He can be reached at [email protected].
DEALER Solutions
15
CE CREDIT
(50 minutes for each month)
Fax or mail this form in (503-763-1233) for CE credit for DMV Dealer License renewal*
Signature below certifies you have read the entire magazine issue.
Name: ____________________________________________Signature: _____________________________________________________
ODL: _____________________________________________DMV Dealer #: __________________________________________________
Dealership Name: ________________________________________________________________________________________________
E-mail Address: __________________________________________________________________________________________________
Fax # : _________________________________________________________________________________________________________
Wrong answers will be emailed, faxed, or mailed back to you corrected and you will get an update on your CE hours.
OCTOBER 2007 ISSUE:
Thoughts from: Oregon law says “anyone who acts as any type of agent” has to have a dealer license unless they are on the exemptions list,
is a bona fide employee of a dealer or a ‘dealer only auction’’ lets them in because a dealer told them to.
True_____________ False ___________
Motorcycle Temporary Permit: The dealership should tell the customer to keep the copy with them in case they get stopped.
True _____________
False___________
Third Party Trade-in: A guaranteed minimum amount being offered by a dealer for trade-ins is not against the Unfair Trade Practices Act
in Oregon.
True _____________
False___________
Boat Registration: A boat needs current registration tags on it even if it is just sitting in the water at a moorage and not being operated
on the river.
True _____________
False___________
POINTS TO PONDER ARTICLES:
Question from a dealer 2: A dealer has 15 days from date of possession to pay off all parties of interest, even if they don’t have the title
back from the bank yet.
True _____________ False___________
Question from a dealer 3: If a dealer requires the dealership to process, they cannot force the customer to pay the processing fee.
True _____________ False___________
Question from a dealer 4: Dealers are not supposed to take consignments from anyone not on the title, except another dealer from Oregon
or another state.
True _____________ False___________
*This education is Free to members of OVDA. Non-members may enroll in “Education Only” program for $75 per year. Backdates available by
e-mail. PO Box 4290, Salem, OR 97302 Toll free 877-541-CARS (2277).
October 2007
DEALER Solutions
17
INDUSTRY SERVICES
See our website for links to some of these vendors.
ADVERTISING
AUCTIONS – PUBLIC
FEDERAL COMPLIANCE
Auto Trader Magazines
800-533-0371
Auto Mart Magazine
800-758-2886
Mudd Group Marketing
Advertising and Public Relations
800-FOR-MUDD www.mudd.com
I-5 Auctions
541-673-5636 (Roseburg)
Petersen’s Auction Group
541-689-6824
RUCompliant.com
503-659-8868
NWBBI, Inc.
206-723-4445
Swift Direct Marketing
(Direct Mail & Print Advertising)
503-649-4111
AUCTION–DEALER ONLYNORTHWEST
ADESA Seattle
253-735-1600
Brasher’s Idaho AA
800-346-7938
Brasher’s Reno AA
775-828-2437
Dealer’s Northwest AA
509-244-4500
South Seattle Auto Auction
206-762-1600
AUCTION–DEALER ONLYOREGON
Cascade Auto Auction
800-300-3200
Portland Auto Auction
503-286-3000
Northwest Auto Auction
800-905-3901
18 DEALER Solutions
Zakula Beal Auctioneers
503-283-3373
BONDING AND INSURANCE
SERVICES
Kelly Martin Insurance
Agency
877-912-6400
Hecht & Hecht Insurance
800-609-0979
OVDA
877-541-2277
Zurich –
Portland 800-391-1732
Eugene 541-461-9160
CAR RENTAL COMPANIES
Enterprise Rent-A-Car
503-692-8400
FINANCING
Car Financial Services, Inc.
800-252-7411
Finance Express
640-667-8765
Fireside Bank
503-643-0494
People’s Credit
Savings & Loan
800-531-4420 ext. 33 or 17
Reliable Credit Association
503-462-3022
Western Funding, Inc
503-786-5911
SERVICE CONTRACTS
Auto Services Co.
503-705-7597
Guardian Warranty
800-482-7357 Ext. 183
Wynn’s –
Rock Solid Protection
503-659-8868
Zurich –
Portland 800-391-1732
Eugene 541-461-9160
TRAINING
OVDA Forms
503-399-9199
Buy Here Pay Here Conf.
713-290-8171
JM&A – F&I and Sales
206-331-0386
Joe Verde Group –
Leadership, Sales &
Sales Management
800-445-6217
Kelly Enterprises
F & I Training
800-336-4275
OVDA Dealer Education
503-399-9199 or
[email protected]
DMV Secure Forms
503-399-9199
OADA Form Orders
1-877-541-2277
Asierus Network Support
801-542-7800
Auto Manager
800-300-2808
F&I Central
866-219-0926
Finance Express
630-667-8765
GUIDE BOOKS
Deborah Lush, Att.
Heltzel, Upjohn, Williams,
Yandell, Roth, Smith & Petersen, PC
503-585-4422 ext. 303
Oregon Roads
Eugene 541-683-2277 (CARS)
FORMS
COMPUTER
MANAGEMENT SYSTEMS
CORPORATION ASSISTANCE
LEASING SERVICES
FOR DEALERS
Black Book
800-554-1026
Kelly Blue Book
800-854-0585
NADA Books
800-966-6232
INSURANCE
See Bonding and Insurance
October 2007
October 2007
DEALER Solutions
19
The Dealer Forms Program is affordable, efficient and easy to use.
Installs on your computer in less than 2 minutes. Your business information & color logo
come already installed; you’ll never need to hand-write them!
Vin Checker
DMV Forms
Inventory & Sold Reports
Customize
for Vehicles,
Motorcycles &
RV/Trailers
Choice of form sets.
A “set” has all of the forms
one needs to complete that
type of transaction.
Or select
individual forms.
Create Reports
Color logo
Transaction details
automatically fill in.
The customer’s & your
business information
automatically fills in.
The form is ready to
be printed and
signed!
Demo Disc
Available
ORDER TODAY!
Email [email protected]
Call toll free 877-541-2277
PRSRT STD
U.S. POSTAGE
PAID
SALT LAKE CITY, UT
PERMIT NO. 6699