Clean Up Oregon`s Dealer Only Auctions
Transcription
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