F&I and Showroom March 2011

LAUNCH

At Mercedes-Benz of San Francisco, Chip Kirby and Ash Zaki Hold the Future of Automotive Retailing in Their Hands. CHARGING

Dealers, Lenders Say Theyre Ready to Rebuild

STOPPERS8 New Sales-Driving Tools

MARCH 2011 $10.00

MAD MARV: DONT QUIT JUST YET | EDIT: TECHNOLOGY REBOOT | LEGAL: REGULATING SPOT DELIVERIES

A BOBIT PUBLICATION FI-MAGAZINE.COM

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2 F&I and Showroom March 2011

March 2011 Volume 14, Issue 3

Dealer Profi le

12 Mobilizing the Dealer ExperienceMercedes-Benz Financial Services is taking its mobile strategy where no company has gone before, but offi cials say the company wont push its vision of the future on dealers.

Vehicle Finance Conference

18 Ready to Charge AheadIts clear that lenders and dealers are feeling good about the road ahead. The two sides met at the 2011 Vehicle Finance Conference to reaffi rm the importance of their relationship.

NADA 2011

24 8 Show StoppersWeb-based tools ruled the aisle ways at this years NADA Convention and Expo in San Francisco. Here are eight solutions that caught the magazines attention.

Finance and Insurance

28 Pulling Out All the PropsThe right prop can be the perfect objection killer, but you must choose your tools wisely. F&I trainer shares a few of his top picks.

4 Letters

6 Editorial Page

8 Developments

32 Sales Driver

34 Mad Marv

36 Legal

39 Bottomliners

40 Ad Index

44 Industry Trends

Departments

Features

F&I and Showroom (ISSN 2154-1728) (USPS 018-706) (CDN IPM# 40013413) is published monthly, by Bobit Business Media, 3520 Challenger Street, Torrance, California 905031-1640. Periodicals Postage Paid at Torrance, California 90503-9998 and additional mailing offi ces. POSTMASTER: Send address changes to F&I and Showroom, P.O. Box 1068 Skokie, IL 60076-8068. Please allow six to eight weeks for address changes to take effect. Subscription Prices: United States $20 per year; Canada $35 per year; Foreign: $35 per year. Single copy price: $10; Fact Book: $30. Please allow six to eight weeks to receive your fi rst issue. Bobit Business Media reserves the right to refuse nonqualifi ed subscriptions. Please address editorial and advertising correspondence to the executive offi ces at 3520 Challenger Street, Torrance, California 90503-1640. The contents of this publication may not be reproduced either in whole or in part without the consent of Bobit Business Media. All statements made, although based on information believed to be reliable and accurate, cannot be guaranteed and no fault or liability can be accepted for error or omission.

12

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24

Contents Endorsed as the offi cial publication

of the Association of Finance & Insurance Professionals

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2011 Innovative Aftermarket Systems L.P. All Rights Reserved.

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Charge-Backs 101TO THE EDITOR: Mad Marvs article, Controlling Charge-Backs, in the February issue was very informative.

I have several suggestions and comments. Ive been an F&I manager for a very long time (probably longer than Marv). One of the things I have always done is to calculate (manu-ally, using the lenders formula) the estimated fi nance reserve, and I have always been within a dollar of what was actually paid. This takes less than a minute to do and it keeps your accounting department very happy.

Marv was correct in saying that the various DMS providers are not always accurate. By the way, there are lots of ways to fi gure out fi nance reserve, but the most predominate ways to do so are via the ratio method and the fi nance charge at the contract rate minus the fi nance charge at the buy rate.

My other comment concerns the handling of a lenders requests for cancellations or refunds. I never use the lenders fi gures. Upon receiving a request, I always contact the provider of the service contract, GAP, etc., and start the cancellation process. The lenders request usually contains the two most important items impacting the cancellation: the date of cancella-tion and the vehicles mileage. Hav-ing always used the most reputable product providers, I have never, ever had a lender reject the refund amount calculated by the provider.

Keep up the good work, Marv.

Steven EisenbergBusiness Manager

Shively Motors Inc.Chambersburg, Pa.

Sales vs. F&I TO MAD MARV ELEAZER: I really en-joyed your December column (Who Needs Em?) on the relationship be-tween sales and F&I. I think, as F&I guys, we all need to be reminded that were not the gods of the dealership. Its funny how my salespeople can get so worried about bringing me a cash deal. As I learned during the train-ing I received from JM&A, I always

remember to tell them, Great job! Thanks for the reminder.

Thomas StalteriFinance Director

Williams Chevrolet Honda KiaTraverse City, Mich.

Update Those Pay PlansTO THE EDITOR: I just wanted to com-pliment Lon Leneves pay plan article (Pay Plan Reboot, Page 30) in the February issue. I worked in the deal-er services department for a large, national bank for four years. I was on salary and, according to my contract, expected to work 40 hours per week.

Well, after working every other Saturday and attending early-morn-ing meetings and 5 p.m. conference calls, I ended up working 52 to 60 hours per week. I didnt think too much about it until another offi cer sued the bank for back pay. So, Lon is correct: It is important to pay atten-tion to laws and pay plans.

Jim ChapekF&I Manager

Sportline Auto SalesColumbus, Neb.

Opposition to Feds Credit Insurance Proposals TO THE EDITOR: Hey Greg, I want to thank you for your Fed Proposal Reveals Evidence GAP column in the February issue. The more people are aware of [these proposed disclo-sure requirements] and the ridiculous methods the Fed is using to come to its conclusions, the more people will get involved.

As you are aware, the Fed has de-ferred this issue to the Consumer Fi-nancial Protection Bureau. However, my company is not really comforted by that fact, considering the politi-cal views and history of the people in charge of [the bureau], the total power they will have, and the lack of Congressional oversight. [The CFPB] will have the power to do basically whatever it wants.

Klay KelsoSales Trainer

The Plateau GroupCrossville, Tenn.

Letters


Vice President Group Publisher, Auto Group

Sherb Brown

Publisher, Dealer GroupNational Sales Manager

David Gesualdo727-947-4027

[email protected]

Executive EditorGregory Arroyo

[email protected]

Managing Editor / Art DirectorTariq Kamal

[email protected]

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[email protected]

Sales & Marketing CoordinatorTracey Tremblay

E-Media and Print Production Manager

Brian Peach310-533-2548

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I just want to say that I believe the iPad, or at least the dormant tablet category it awoke, will revolution-ize the automotive retail industry. In fact, I think its already revolu-tionizing how the industry views whats possible.

My certainty is partially fueled by the scene I walked into in early February. I had just hoofed it across

downtown San Francisco to the Pal-ace Hotel for J.D. Power and Associ-ates Industry Roundtable. The dark-ened ballroom was lit from below by a blue hue emanating from the sea of iPad devices in the audience. But the users werent Gen Yers. Heck, they werent even Gen Xers.

See, the real reason why this Gen Xer believes the iPad will change our business is because a baby boomer told me so. Crossbow Group Inc.s Ashley Herndon is a veteran of the starter-interrupt segment and he re-called the big plans he had when, in 1993, Apple rolled out its Mes-sagePad you may remember it as the Newton. The industry was on the verge of a breakthrough, but the world, unfortunately, wasnt ready.

Well, folks, that time has come.See, this Gen Xer is a little tired

of hearing about what Gen Y wants and how the industry must cater to that generations needs. Frankly, I think this race to get the car-buying experience online to appease Gen Y

is distracting us from whats really possible. And besides, buying a ve-hicle is a personal thing, and I dont think thats been lost on Gen Y.

Whether you realize it or not, the advent of the iPhone and devices like it have changed the way consumers think as well. No longer does Gen Y need Mom or Dad to play wing-man on the road to a sale. All Gen Y

needs is an iPhone to Google what-ever it doesnt understand.

The Internet also changed the game for technology providers, but in a good way. As weve seen in recent years, technology providers are moving away from their device-dependent strategies to Web-based solutions. That means all you have to do is fi gure out what hardware youll need to access these tools.

A new study conducted by the Boston Consulting Group found that about two-thirds of U.S. consumers are now somewhat or very familiar with e-readers and tablet devices. That means the iPad is one piece of hardware your employees are prob-ably using already. And as you all know, the more your staff is famil-iar with a device, the more theyll use it.

Now, wouldnt it be cool if the iPad could be used to harness Dealer-Tracks new prequalifi cation tool for its CreditOnline solution? I mean, imagine your sales guy sitting inside

a vehicle with a wavering customer and then being able to based on the customers credit profi le and lender guidelines pull up payment options or the customers monthly payment to get a commitment. Thats pretty powerful stuff, right?

Reynolds big thing this year is its new Retail Management System, a concept that represents a whole new

line of customer-facing tools. Ron Lamb, the new president of Rey-nolds, used a large square to symbol-ize the companys dealer manage-ment system. He then drew a circle around the square to symbolize the companys new RMS push. As he said, the DMS is great at capturing and storing data, but what it doesnt do well is connect with consumers. The companys new RMS will.

By the way, one of the new solu-tions under Reynolds new RMS is a sales tool that runs on the iPad. It allows sales staff to create prospects, search inventory and do a lot more from the Apple device.

That study I mentioned earlier also surveyed magazine subscribers. They found that readers will spend about an hour using a magazines app, but only a few minutes on the same publications Website. Yeah, I think the iPad is going to revolution-ize a lot of industries. I just hope that both of our industries will be part of that revolution.

Dont Let Gen Y Distract

Letter from the Editor

The industry is on the verge of regaining some of the control it lost to the Internet, but the way dealers view technology must change before order is restored. By Gregory Arroyo

The advent of the iPhone and devices like it have changed the way consumers think as well. No longer does Gen Y need Mom or Dad to play wingman on the road to a sale.

All Gen Y needs is an iPhone to Google whatever it doesnt understand.

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Borgmann to Lead Capital One Auto Finance CAPITAL ONE HAS NAMED KEVIN

Borgmann as the new presi-dent of its auto fi nance unit. A 10-year veteran of the company, Borgmann brings experience from Capital Ones corporate strategy, Internet and credit card units, as well as several years of work on the consult-ing side. Borgmann shared his goals for the companys auto unit in an exclusive interview with F&I and Showroom.

To read the full interview, go to www.fi -magazine.com/webexclusive/capitalone.

GM Financials rollout of a prime leasing program in 16 states may seem to indicate that the company formerly known as AmeriCredit is leaving its roots be-hind. Company offi cials, however, maintain that the former subprime fi nance company is merely sticking with the game plan General Motors set

forth when it purchased the company last October: Fill the fi nance gaps.

Since successfully piloting a new GM prime lease program in Ohio last December, the Fort Worth, Tex-as-based company has extended the lease offering to 15 additional states. The goal now is to expand the pro-gram nationwide by this summer.

When we were acquired by GM, the purpose was to fi ll in the fi nanc-ing gaps, said Caitlin DeYoung, spokesperson for GM Financial. Our main focus was to get a leasing program out and prime leasing was the fi rst priority.

Aside from Ohio, the prime lease program is now available in Connecti-cut, Delaware, Indiana, Kentucky, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia and West Virginia.

Offi cials said the company also is eyeing a return to the Canadian mar-ket by the middle of the year or soon-er, and is considering an expansion of its lease offerings to customers downstream on the credit spectrum.

As for retail installment contracts, DeYoung said originations will out-pace what AmeriCredit did last year,

but would not offer a target increase. She added that although GM Finan-cial is being positioned to help GM dealers, the former independent fi -nance company will continue to serve non-GM dealers under the Ameri-Credit banner.

What we are looking to do is pro-vide a competitive fi nancing option for GM dealers, DeYoung said. Our current infrastructure is not built to take on 80 percent of GMs business and were not looking to do that.

Dan Berce, the companys presi-dent and CEO, echoed that statement at the 2011 Vehicle Finance Confer-ence in February, where he joined Ally Financials Tim Russi on a CEO panel.

GM bought us not to be the new GMAC; they bought us to plug the gaps, Berce said. They bought us to bring back leasing.

Dealers Slow to Respond to Internet Leads SIGNIFICANT SHORTFALLS REMAIN

in dealers responses to Inter-net leads, according to the 2010

ResponseLogix Mystery Shopping report. The

study of 1,300 U.S. dealerships found that 12 percent of

leads received no response. Fifty-eight

percent of responses did not in-clude the price, and 30 percent of responses involved price quotes.

The median response time was three minutes, mostly driven by automatic responder systems. For price quotes the median response time was 1.1 hours, and 70 percent of those responses included quotes for just one vehicle. The percentage of price quotes received in less than 20 minutes was below 1 percent.

The dealers who can respond with a multi-vehicle price quote right away, showing full vehicle detail and accurate pricing and incentive information, will estab-lish the customers trust and win the day, said Tom Mohr, CEO of ResponseLogix.

GM Financial Not Looking to Replace GMAC

Fort Worth, Texas

Developments


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GM bought us not to be the new GMAC; they bought us to plug the gaps. They bought us to bring back leasing.

Dan Berce, GM Financial

CART PHOTO ISTOCKPHOTO.COM / COREAY, FORT WORTH PHOTO BY ADAM STANFORD

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FI0311warrantech.indd 1 2/4/11 3:27:25 PM

Douglas J. Herbergerwas named president of Allstate Dealer Services and will be responsible for manag-

ing the companys F&I products and services. Herberger, who spent 30 years with General Motors, most recently directed the automakers multibillion-dollar parts, service and accessories business.

The Warranty Group Inc. has appointed John Curtis as senior vice president general counsel and corporate

secretary. Curtis served as presi-dent and CEO of First Extended Corp., which was acquired by The Warranty Group in 2001. Since the acquisition of The Warranty Group by Onex Corp. in 2006, Curtis has served on the board of directors as chairman of the governance committee.

Asbury Automotive Group Inc. announced in February its succes-sion plan in anticipa-tion of President

and CEO Charles R. Oglesbys retirement on July 31.

Senior Vice President and CFO Craig T. Monaghan has assumed the role of president and CEO.Senior Vice President and COO Michael Kearney was promot-ed to executive vice president. Oglesby will

continue as chairman of Asburys board of directors. In addition, Asburys board elected Thomas DeLoach, a current Asbury director and former Mobil Corp. executive, to serve as a lead independent director.

Ally Takes Top Spot in New FinancingALLY FINANCIAL FINANCED

more new-vehicle purchases in the United States than any other lender in 2010, according to Experian Automotive. More than 803,000 new cars were fi nanced by the former captive lender, resulting in nearly $23 bil-lion in retail contracts. In total, Ally fi nanced nearly 1.2 million vehicles or $31.6 billion in consumer auto contracts in the U.S. last year. It also provided fi nancing for more than 2.8 million vehicles sold to more than 5,000 dealers in 2010, an increase of nearly 80 percent from the prior year.

Two Detroit Dealers Take Sears OfferSEARS AUTHORIZED INDE-

pendent Auto Centers LLC announced the

opening of two new franchises at the sites of two veteran Detroit-area auto dealers. The Galeana Auto Group location in Warren, Mich., and the Century Sales location in Taylor, Mich., are the latest additions to the Sears Auto Center family. The program was created by Sears Automo-tive in October 2009 to give dealers a chance to transform their dealer-ships into automotive

service businesses and continue serving their communities. All Sears Auto Centers franchises are backed by the buy-ing power, distribution network and corporate support of Sears Inc.

Hendrick Picks Reynolds CRM SolutionHENDRICK AUTOMOTIVE

Group has selected Reynolds and Reynolds

Contact Management as its primary customer re-lationship management tool. The agreement will allow Hendrick deal-ers to handle follow-up activities for prospects, sold customers and ser-vice customers from one tool. The CRM solution also integrates with the Reynolds ERA dealership management system, which is currently used in all Hendrick stores.

DealerTrack Acquires Polks Price and Spec BusinessDEALERTRACK HOLDINGS

Inc. has acquired Polks U.S. Price and Spec Busi-ness, including the popu-lar Vehicle Comparator Service, which delivers price and specifi cation reports to manufacturer and retailer Web-sites. The newly acquired business will be merged into DealerTracks subsid-iary, Chrome Systems Inc.

Developments


WARRANTECH CORP. HAS

signed a three-year con-tract to serve as the underwriter of the Volvo Increased Pro-tection (VIP) Program. Term options for new vehicles range from four to eight years and 50,000 to 120,000 miles beyond the manufactur-

ers warranty, and one to four years and 12,000

to 60,000 miles on eligible used vehicles. Through the VIP Program,

dealers have access to War-

rantechs online tools for contract issuance, coverage verifi cation and claims.

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theMobilizing

Dealer

Ash Zaki isnt sold on the idea of consumers buying solely online. No, his vision of the future dealership is

one in which the showroom and the online experience are fused together. The bridge to that future, he believes, could be the Apple iPad, which is why hes excited about the quickly evolving mobile strategy undertaken by his captive lender.

Zaki is chief operating offi cer of Mercedes-Benz of San Francisco, which sits underneath the Bayshore Freeway connecting Oakland and San Francisco. The 50-year-old op-eration was one of 40 dealerships se-lected by Mercedes-Benz Financial Services (MBFS) last May to pilot its iPad-compatible MB Advantage software. It was again selected in February as the launching pad for the fi nance companys newest mobile of-fering: an iPad-compatible F&I pre-sentation tool that aims to connect the F&I process to the showroom.

I think this tablet technology is exactly what will marry the show-room and online experience, says Zaki. It was just a matter of time

before it was integrated into the auto-motive vertical.

Rolled out in late February to deal-ers who signed up to carry MBFSs line of F&I products, the presen-tation tool takes aim at that small window of time customers spend in the showroom before transitioning into F&I. As of now, the mobile F&I presentation piece is nothing more than an interactive F&I brochure, using icon-dressed buttons to help customers delve deeper into the companys aftermarket vehicle pro-tection products.

Offi cials at MBFS, however, are quick to note that this is not the sec-ond coming of the F&I kiosk, a de-cades-old concept that was supposed to mark the end of the F&I manager. Instead, they describe the tool as the entry point to a whole new set of dealer tools.

We dont prescribe any process to our dealers. We just want to give them the utmost level of fl exibility, said An-dreas Hinrichs, vice president of market-ing at MBFS. We are

simply saying, Well provide you the device, well provide you the mobil-ity that comes with the device and we want you, the dealer, to fi gure out the best way of doing business with it.

Dealer-Led TechnologyIn February, Hinrichs served as a panelist during the American Finan-cial Services Associations Vehicle Finance Conference in San Fran-cisco, where he and Dietmar Exler, head of MBFS, touted the companys mobile strategy during separate pan-el discussions. And although other companies talked about their interest in the mobile realm, its clear MBFS is in the drivers seat.

In our case, we decided to drive the bus, Hinrichs said during the conferences Evolution of the F&I Offi ce panel.

The fi nance arms mobile strategy was launched in October 2009 be-

hind an iPhone app that al-lowed customers to wireless-

Mercedes-Benz Financial Services is taking its mobile strategy where no organization has gone before, but offi cials say the company wont

push its vision of the future on dealers. By Gregory Arroyo


Dealer Profile

PHOTOS BY GREGORY ARROYO

Ash Zaki, COO of Mercedes-Benz of San Francisco, dem-onstrates MBFSs new iPad-compatible tools. Behind him is Chip Kirby, an MBFS dealer rep.

FI0311profile.indd 12FI0311profile.indd 12 3/4/11 5:50:25 PM3/4/11 5:50:25 PM

March 2011 F&I and Showroom 13


ly manage their MBFS accounts. It took a mere 15 months for the app to attract approximately $15 million in consumer lease and loan payments, or about 25,000 payments. Thats when the company knew it was on to something.

That something became a little clearer when MBFS offi cials caught wind last February around the time it was preparing to release the smartphone version of its consumer app of Apples plan to launch the iPad. Hinrichs says the thought of Apple entering the tablet category changed everything.

When we became aware of Apples impending [iPad] announcement, it really sparked our curiosity, Hin-richs says. We thought it could cre-ate a new device category that would be very applicable to our business.

Figuring the iPad would open the door to a slew of new tablet devices, the company decided to move away from its device-dependent strategy to one that was built around its dealer point-of-sale system, the aforemen-tioned MB Advantage. The compa-nys software team knew it was the right decision when they got their hands on an iPad simulator four months before the devices launch.

Hinrichs says the work that went into making MB Advantage com-patible with Apples iPad and Safari browser means the road is paved for newer solutions down the road. It is a device-independent strategy, he

says. Whatever tablet PC you want to use, you can use.

As Apple began rolling out the iPad last May, MBFS kicked off a six-month pilot program for its new mobile tool at 40 dealerships, becom-ing one of the fi rst companies in the world to take the consumer-oriented iPad and give it a business applica-tion. Each regional manager was giv-en 10 iPads, which were then distrib-uted to dealer relations managers like Chip Kirby. He was asked to select two dealerships from his Northern California area to run the new tool through its paces, and Mercedes-Benz of San Francisco was one of them.

I knew the dealership and Ash, in particular, would embrace the tech-nology, Kirby says. If you look around this dealership, youll see fl at-panel screens hanging throughout the showroom and that every desk has a computer. That level of technology is not typical.

The companys six-month pilot phase of its mobile tool ended last


Dealer Profile

If you look around this dealership, youll see

fl at-panel screens hanging throughout the showroom

and that every desk has a computer. That level of technology is not typical.


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October. Zakis team put several fea-tures to the test, including one that al-lowed front-end staff to execute tasks such as starting loan applications, checking for fi nancing options and grounding lease-return vehicles. Since leasing represents 60 to 70 percent of the stores business, the store proved to be the perfect testing ground.

The dealerships staff led demon-strations of the mobile tool during a media event held at the store the day before the start of the 2011 NADA Conference and Expo in February. Staffers showed off the solutions lease-return functionality, which

guides users through fi ve screens and a series of questions and check-offs before asking the customer to provide an acceptance signature right onto the iPad.

The presentation ended with staff-ers wirelessly printing out copies of the inspection sheets a feature that wasnt available during the pilot program. That functionality became available last November when Apple released its iOS 4.2 Software update.

That was the last piece of the puzzle, Kirby says. Without it, you would ground the vehicle and then tell customers you had to walk over to a desktop computer to do every-thing you were trying to avoid. Wire-less printing, along with the signature capability, really did take the mobile initiative to the next level.

Downturn Presents OpportunitiesAside from demonstrating the mo-bile MB Advantage system, the me-

dia event at Mercedes-Benz of San Francisco also marked the unveiling of the companys new F&I tool which arrived about fi ve months af-ter the company sent iPads to all 355 U.S. Mercedes-Benz dealers. Kirby, who spent nine of his 24-year indus-try career in retail, believes MBFS is on the verge of redefi ning the dealer-ship experience.

I dont know if its going to take six months or fi ve years, but I see things moving toward an environ-ment where every sales and fi nance representative is equipped with an iPad-like device, he says. This will

be an environment where you can sit with a client and say, Here are the products we think you need. And if the client isnt interested, you simply fl ick the products off the screen and out of the equation instead of having to change the numbers, recalculate everything, reprint the contract and put it in front of the customer.

For his part, Zaki has already tak-en steps toward that future. Like most dealerships, Zakis new-to-used sales ratio swung more toward pre-owned during the downturn. But the drop in new sales didnt stop him from mak-ing investments in his stores digital infrastructure.

Im a tech guy in car salesmans clothing, so I like technology, says Zaki, who also spent time in the semiconductor industry. What you may not know about me is that I helped build what I believe was the fi rst automotive multimedia Website back in 1995. And I can tell you,

not much has changed since then in terms of achieving our ultimate goal of combining Website technology with the showroom experience. The iPad, however, does change things.

Zaki also is looking at some addi-tional handheld devices that will al-low his service advisors to take pay-ments in the service drive. Hes even exploring the possibility of allowing customers to use their mobile devices to pay for repairs before they pick up their vehicle.

As for the new F&I tool, Zaki says hes still ironing out the details on how the presentation tool will fi t into his front-end processes, but he sees the possibilities.

As this gets more defi ned and the speed of calculations increases, I can see us reaching a point in the showroom where were moving from simply talking about features and benefi ts of the car itself to discussing what the customers lease payments will be, Zaki says. So, Im looking forward to seeing how the F&I func-tionality evolves.

That evolution might not be too far off. Mercedes-Benzs captive fi nance arm completed in January the rollout of a new electronic validation tool for dealers. Company offi cials say that marked the companys fi rst step toward e-contracting under its eStrat-egy initiative. Add in the pilot pro-gram MBFS is kicking off this month to test a new connection that Dealer-Tracks Aftermarket Network is cre-ating between Mercedes-Benz deal-ers and the companies underwriting its F&I products, and its not hard to imagine a day in the near future when dealerships will be able to use a tab-let to electronically rate and contract F&I products from the showroom.

This is just the beginning, Hin-richs says. With what weve devel-oped, you can take the iPad right up to the car, punch in the last eight dig-its of its VIN and pull up all eligible fi nance and lease programs related to that vehicle. This is where it becomes very powerful, because now you can transfer the customers desire for the vehicle into the F&I process.


Dealer Profile

The ability to send inspection sheets directly from the iPad to a printer was the last piece of the puzzle, according to Chip Kirby, a dealer relations manager for Mercedes-Benz Financial Services.


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Ready Charge AheadT

he mood at this years Ve-hicle Finance Conference, held at San Franciscos Westin St. Francis Ho-tel immediately prior to

NADA 2011, was exponentially more positive than in 2009 and 2010. It was clear from the way fi nance executives discussed the strategies they fell back on during the credit crisis that theyre feeling a lot better these days. Deal-ers serving as panelists wondered aloud about whether that would mean a return to the way things used to be.

With the economy on the upswing, members of the host organization, the American Financial Services Associa-tion (AFSA), and dealers in attendance spent much of their time on the dais reaffi rming the importance of their relationships. But there was also a call from dealers for lenders to be more available, look beyond credit scores and restore the personal interactions they once had with F&I offi ces.

Lets not focus on credit score, lets buy the customer, said Michelle Primm, director for the National Au-

tomobile Dealers Association and managing partner of Cascade Auto Group in Cuyahoga Falls, Ohio. Tell me how to get my paper bought, dont just look at your rate chart.

Stephen Wade, president of Ste-phen Wade Auto Center in St. George, Utah, would take over as the NADA chairman for 2011 a few days later. Addressing the AFSA crowd, he called for a return to the days when F&I managers interacted with the same buyer on every deal.

Cindy Kanellis, the F&I director for Freemont Automotive Retailing Group, had her own request. Were working weekends and were work-ing nights, she said. We need our buyer. We need them on weekends.

Not Out of the WoodsThe state of the still-recovering econ-omy wasnt lost on dealers, either. William Underriner, 2001 NADA vice-chairman and president of Un-derriner Motors in Billings, Mont., talked about reports that foreclosures could rise again this year. The soon-

er that happens, the better off well be as an industry, he said.

David Wyss, chief economist for Standard & Poors, confi rmed the re-cession is over. But, he added, It just doesnt feel like a good expansion. The biggest problem, he said, is the housing market, which is coming off one of the worst periods for home building since World War II.

Wyss said it could take another six months before that market gets into balance, and noted that four states California, Nevada, Arizona and Florida were responsible for half of the nations foreclosures.

If the economy slips back into de-cline, Wyss said the Federal Reserve will not be able to lower the federal funds rate as it has in the past. Be-cause its near zero, the Fed is look-ing at other types of rates to lower. Despite fears of infl ation, Wyss said the Fed has no other choice.

[The economy] is too squishy for the Fed to take its foot off the gas pedal, he said.

Wyss said all markets had bot-

Its clear that lenders and dealers are feeling good about the road ahead. The two sides met at the 2011

Vehicle Finance Conference to reaffi rm the importance of their relationship. By Gregory Arroyo


Vehicle Finance Conference

to

PHOTOS BY GREGORY ARROYO

FI0311afsa.indd 18FI0311afsa.indd 18 3/7/11 11:33:35 AM3/7/11 11:33:35 AM

Ally Financials Tim Russi, Mercedes-Benz Financial Services Dietmar Exler, Toyota Financial Services George Borst and GM Finan-cials Dan Berce weighed in on the current state of the auto fi nance industry. David Wyss, chief economist for the S&P, said the key to a full economic turnaround is the still-lagging housing market. Cindy Kanellis said todays consumers are a lot more re-alistic than three years ago.

tomed out by March 2009, less than four months after the fi nancial market froze in the fourth quarter of 2008. It was like we all joined hands and walked off a cliff, he said.

As for when he thinks the 8.5 million jobs lost during the down-turn will be restored, Wyss said he doesnt expect to see any major im-provements until the third quarter of 2012. Others speakers at the confer-ence said it wont be until 2016 before the national unemployment rate falls to 5.3 percent. The good news, said Wyss, is that jobs are coming back faster than they have during previous recessions.

Payroll usually recovers last. In 2001, it took 17 months for employ-ment to come back, he said, noting that it was the American consumer who pulled the economy out of the recession.

They kept spending, Wyss said. Im not sure that will work again.

The good news is the American consumer is borrowing less and saving more. The term down pay-

ment is no longer viewed as a relic of a concept. But whats good for the consumer may not be good for the still-recovering automotive industry. And, as Wyss pointed out, there are more registered cars than registered drivers.

He fi nished his thoughts with this: Cars will need to be replaced.

Rebuilding the MarketThe good news in auto fi nance is that auto loan defaults are doing well. The rate of defaults peaked in 2009 at 2.8 percent, and has since dropped to 1.77 percent. Loss rates have also fallen to pre-recession levels, another reason for the better mood at the Ve-hicle Finance Conference.

Theres a different energy in the room than last year, said Chris Stinebert, AFSAs president and CEO.

George Borst, president and CEO of Toyota Financial Services (TFS), talked about the moment his com-pany realized the economy was in trouble. It was December 2007, the month the Great Recession offi cially

started. Thats when the company be-gan shifting its budget toward pull-ing in as many customer payments as possible. It was a year of collec-tions, Borst said.

It was also a year of analytics. Adem Yilmaz, corporate manager of consumer risk for TFS, said the captive fi nance company began rede-veloping its score cards at that time. The goal was to identify the portfolio segments responsible for losses. Al-though those score cards performed better than expected, he offered a word of warning.

Cant rely on historical data to pre-dict the future, he said. We have to look at the psyche of the consumer.

William Shope, vice president of portfolio management for Omni Financial Corp., echoed Yilmazs comments. Predicting consumer be-havior is not the strength of the score card, he said.

Middle Tier Lending NeededMissing at this years Vehicle Finance Conference were the calls from deal-



ers for subprime fi nancing. What is needed, dealers said, is fi nancing for the middle tiers.

We got fi nancing for the A cus-tomer, we got subprime [fi nancing] for the D customer, said Underriner. What we need is fi nancing for the B and C customer. Those are the people who make this country run.

Brian Leary, F&I director for Utahs expansive Larry H. Miller group, echoed Underriners com-ment. He said 20 percent of his busi-ness is made up of subprime, and added that he expects that to increase next year as more subprime fi nance sources become available. Thats our biggest hurdle, getting advances on nearprime customers, he said.

For both new and used, the share of loans made to nonprime, sub-prime and deep subprime customers increased from 36.42 percent in the fourth quarter of 2009 to 38.42 in the year-end quarter of 2010, according to Experian Automotive. However, this still trails what was seen in the fourth quarters of 2007 and 2008, when loan share for credit-challenged customers stood at 44.63 percent and 41.03 percent, respectively.

Greg Oltman, fi nance director for Van Tuyl Dealer Group, said hes noticed that consumers who couldnt get loans during the downturn have yet to return. That could be one rea-son why subprime isnt as big of a problem as it was in 2009. Another

reason might be that lenders can get a better read on a subprime customer than on a nearprime customer be-cause they have already bottomed out. With nearprime customers, its more diffi cult to gauge whether

theyre ascending or descending the credit ladder.

Whatever the case, Freemonts Kanellis said she sees a change in todays subprime customer. [Sub-prime] customers are more realis-tic. And when they come in, theyre coming in with a down payment, she said. Theyre also coming in with a better attitude.

The Funding Is ThereOne development that could turn the tide for the middle tiers is an improve-ment to the health of the securitiza-tion market, where fi nance sources sell loan pools to gain funding.

Toyota Financial Services Borst talked about the companys success in the asset-backed securities (ABS) mar-ket in the last six to eight months. We see it as a vibrant market, he noted.

Dan Berce, president and CEO of GM Financial, said the market is as good as it was in 2006 and 2007. The ABS market is open for busi-ness, he said.

Dietmar Exler, head of Mercedes-Benz Financial Services, indicated that his company could be active this year in the ABS market, saying itll be one of the tools it will consider this year.

Tim Russi, executive vice president of Ally, also talked about the com-panys activity in the ABS market, saying, I think the world is open. He also talked about the benefi ts of the companys bank holding status, which has allowed it to diversify its sources of funding.

Leasing could also pick up the slack this year. And with Berce telling the audience that GM Financial may be taking General Motors new prime leasing program down the credit stream, leasing might also be used to fi ll the nearprime fi nancing gap.

Whatever plays out, Wade said the relationship between dealers and lenders must continue to strengthen. Im excited about where were going. Were moving in the right direction, he said. And if were going to be ef-fective, we need to stick together.


Adem Yilmaz, corporate manager of consumer risk for TFS, said fi nance sources cant rely on historical data alone to predict the future. The consumer must also be considered.

Stephen Wade, the 2011 NADA chair-man, called for a return to the days when F&I managers interacted with

the same buyer on every deal.

We got fi nancing for the A customer, we got sub-

prime for the D customer. What we need is fi nancing for the B and C customer. Those are the people who

make this country run.


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1 2

Tools to help dealers rule the Internet were in abundance at this years NADA Convention and Expo, set inside San Fran-

ciscos Moscone Center where 363 exhibitors vied for the attention of more than 18,000 attendees.

Solutions that allow dealers to tap into todays mobile marketing phe-nomenon were prevalent, but so was an emerging strategy that allows technology providers to deliver their solutions through the Web. The idea is to allow dealers to select the Web-enabled device theyll use to access these new solutions which could spell savings for dealers.

Heres a look at some of the prod-ucts that caught our attention at this years show:

DealerApp Vantage: Going MobileThe company showcased an upgrad-ed version of its mobile marketing tool, DealerApp Vantage Pro. Deal-ers can now build their own dealer-ship app that displays inventory in real time and sends service appoint-ment reminders. The tool also al-lows dealers to personalize the apps for their customers based on the ve-hicle they currently own.

The app builder comes equipped with a Toolkit feature that provides one-touch dialing for roadside assis-tance. Other features include a gas price fi nder, parking assistant and a database of owners manuals. The app can even turn a mobile device into a working fl ashlight.

Dealers can also load the app with dealership promotions and event in-formation. The app also allows cus-tomers to get price quotes, schedule service appointments, make pay-ments, order parts and contact any department at the dealership via one-touch dialing.

The app-building tool also allows dealers to take advantage of RSS feeds so their customers can receive dealer and manufacturer news and recall alerts. Dealers can also man-age their stores social media sites and Websites via the apps back-end management tools.

The lite version of the companys mobile builder is available for $19.95 a month. The pro version is avail-able for $49.95 per month. Consum-ers can download the lite version of the app for free on their Android and Blackberry mobile devices, and both versions on their Apple devices. For more information, visit www.dealer-appvantage.com.

@utoRevenue: Manage What They SayThe marketing services arm of Autobase CRM rolled out PRIME Response, a new online reputation management solution that allows dealers to profi le, track and infl uence whats being said about their dealer-ships online.

The solutions profi le controls provides dealers with the ability to manage their online profi le and dis-tribute content to third-party sites. Dealers can promote their stores car-buying experience, send coupons, pro-mote events, post videos and more.

The tool also boasts a track fea-ture that allows dealers to follow what

Web-based tools ruled the aisleways at NADA

2011. Here are some solutions that caught the

magazines attention. By Justina Ly


NADA 2011

Show-S

EXPO HALL PHOTOS BY TARIQ KAMAL

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34

5

their customers are saying about their store and their competitors. It does this by monitoring data streams in social networks, RSS feeds and in-dexed search results. Additionally, dealers can track their stores ratings and consumer reviews.

PRIME Response also offers in-fl uence controls to help dealers get their customers to write online re-views about their store. These reviews can then be directed to third-party Websites, as well as other consumer forums. Users also have access to an @utoRevenue reputation specialist to assist them with their marketing efforts. For more information, visit www.autorevenue.com.

eCarList: Level the Playing FieldeCarLists TrueTarget Mobile App was designed to offer dealers an an-swer to the Carfax report-wielding consumer. The software provider has equipped its mobile solution, named the most innovation solution of 2010

by Drivingsales.com, with a direct connection to Carfaxs Vehicle His-tory Reports.

Dealers can use TrueTarget to ac-cess pricing and appraisal insights from their mobile phones, as well as manage, photograph and market their inventory on vehicle listing sites. The app includes retail market data from online marketing sites like Cars.com, AutoTrader.com and eBay. Dealers also can access wholesale pricing data from NADA, Galves, Auction-Net and more. More importantly, the app allows dealers to fi lter, organize and view data geographically. Deal-ers can even fl ag pricing from com-peting dealerships.

The app, which can work on the iPhone and Android-based mobile

devices, is available to non-Carfax subscribers starting at $75 per month. For more information, visit www.ecarlist.com/TrueTarget.

Autobytel: Getting a CommitmentThe online leads and marketing pro-vider unveiled a new consumer pur-chase request tool designed to tran-sition shoppers into buyers. Called WebLeads+, the new program pres-ents a dealerships Website visitors with special offers, incentives or cou-pon forms to entice them to submit a purchase request.

The new tool also allows dealers to provide leads with personalized offers, lock in pricing or discounted pricing. And if customers leave the site, WebLeads+ will keep the of-fer live to get the potential buyer to re-engage the Website. The program is available for $295 per rooftop for Autobytel clients. For more informa-tion, visit www.autobytel.com.

Reynolds: Get Your Free Mobile SiteThe rumors are true: The Reynolds and Reynolds Co. has extended its free mobile Website offer to all U.S. franchised dealers. And heres the kicker: You dont even have to use the companys dealership manage-ment system. The offer is being used to promote the Reynolds Web Solu-tions WebMakerX software suite.

The basic mobile Website allows dealers to share their sites most im-portant features with mobile device users, including new- and used-ve-


-Stoppers

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8

hicle inventory, vehicle photos, deal-ership contact information and pay-ment calculator.

Reynolds Web Solutions also of-fers a number of other automotive mobile marketing features, includ-ing inbound and outbound text mar-keting, a send-to-mobile widget and more. For more information, visit www.reynoldswebsolutions.com.

CUDL: Credit Union PortalOn display at the Credit Union Di-rect Lending (CUDL) booth was a new dealer portal Website aimed at helping dealers secure credit union fi nancing, access prequalifi ed credit union members and monitor activity on CUDLs lending platform.

The company, which adminis-ters an auto lending network for credit unions and the CUDL Au-toSMART vehicle shopping site, is providing dealers with a better look into the credit union world by allow-ing them to search for member loan pre-approvals and view the national, regional and credit union message boards housed on the CUDL system.

A Dealer Queue feature was added to allow users to view and track pending and funded deals. Dealers also can access key data, in-cluding the number of credit unions and credit union members using the CUDL platform in their local region. Other information at hand includes the number of loans and total loan amount funded through the platform. Dealers can also track the number of visitors to the CUDL AutoSMART vehicle shopping site, as well as the number of views their inventory and store information received.

Regional rollout of the new portal is scheduled for the second quarter. For more information, visit www.cudl.com.

Chrome: Quoting Payments OnlineDealerTrack Holdings Inc.s sub-sidiary, Chrome Systems Inc., has launched PaymentDriver, an online fi nance payment calculation service for dealership Websites. The solution was designed to help dealers convert online consumers into highly quali-fi ed prospects.

Car buyers can use Payment-Driver to calculate monthly pay-ments for specifi c vehicles based on current fi nance rates and residu-als available from each dealerships fi nance partners. Built as a Web service, PaymentDriver also can be integrated into mobile applications, online vehicle research and inven-tory workfl ows on portals, as well as manufacturer and dealer Websites. In addition, dealers can customize lender and rate choices to provide round-the-clock access to competi-tive rates and programs, according to the company.

For more information, visit www.chrome.com.

MAX: Manage Your AdvertisingMAX (Marketing through Automat-ed eXpertise) is a new division under the INCISENT Technologies um-brella. The new business unit show-cased two new Web-based solutions at NADA 2011, both designed to help

dealers manage their online sales and advertising efforts.

The MAX for Selling Elite solution is an iPad app that arms salespeople with the same information consumers research online, including reviews, ratings and more. Salespeople can use the app to access Carfax vehicle his-tory reports, access reviews from J.D. Power and Associates, Kelley Blue Book and Edmunds.com, run price

comparisons and create prepopulated sell sheets that can be e-mailed to customers. The iPad app is available for $399 per month for one user and $99 for each additional user.

Also on display was MAX Ad, a Web-based platform that allows dealers to create advertisements for new and used inventory and distrib-ute them to third-party Websites. The system uses the MARK Engine, which aggregates vehicle informa-tion available online, such as season-ality, vehicle age and industry trends. It can then generate ads based on that data. The system is available to deal-ers for $299 per month.

For more information, visit www.maxadsystems.com.

Be sure to check out the April issue of F&I and Showroom for more coverage of the 2011 NADA Con-vention and Expo.


NADA 2011

NADA 2011 attracted a crowd of more than 18,000 attendees to San Franciscos Moscone Center, where they were greeted by 368 exhibitors.

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PropsPulling Out

Props arent just for the-atrical productions; they can be the perfect tool for selling intangibles like F&I products. Not only do

they serve as great visual aids, but they can also liven up your F&I pre-sentation. More importantly, a well thought-out prop can help develop a dialogue with your customers.

Just remember that a prop cant sell your products by itself. You fi rst need a well-rehearsed presentation, which should include questions that will help you gain an understanding of your cus-tomers ownership habits. Here are a few examples:

Mileage question: How many miles a year will you be driving, and how long do you plan on keeping the vehicle?

Raise awareness: What is your insurance deductible and do you know if they offer discounts for theft-deterrent devices?

Plant the seed: Well be paying off the remaining balance on your trade. Are there any products for which we should be applying for a refund?

Now, whatever you do, dont spring your props on your custom-ers without getting their permission

fi rst. Heres a nice way to do just that: There are three things you can-not control while you own this car: weather, the driving habits of others and road conditions. Do you mind if I share something with you? Also try: I dont expect your new car to break down, but you never know. Do you mind if I share something with you?

Mightier Than the SwordWhen youre pitching products from

the menu, use your pen like a conductors baton. See,

the pen can be used

to control the pace of your presentation. It can also be used to direct your customers focus. For example, if you want your customer to look down at your menu, point your pen down or toward specifi c sections on the menu while making verbal points about your products.

Additionally, keep a pad of paper close by so you can jot down spe-cifi c points youve made about your products. Feel free to draw illustra-tions during your presentation or close. Illustrations can communi-

cate a much stronger message than words alone.

Just the Facts, MaamAn evidence manual is a must-have for any F&I manager. And as the say-ing goes, a picture is worth a thou-sand words. So, dust off your camera and snap a few shots of your service department, diagnostic equipment and toolboxes. You also want to get a few shots behind the parts counter, as this will help you illustrate to your customer the investment the dealer has made to keep the shop running effi ciently. Pictures of vehicles that have been repaired by a paintless dent repair technician are also help-ful. Just remember to make your evi-dence manual look neat and tidy.

Before-and-after photos of re-conditioned vehicles treated

with environmental pro-tection are also good to in-

clude in your manual. Photos of trade-ins being appraised by the used-car manager are another must. They help to illustrate how a vehicles condition can affect its resale value. Just make sure youre pointing out how your products will positively impact the fu-ture value of your customers vehicles when showing off your photos.

Copies of repair orders par-ticularly those showing the cost of a

The right prop can be the perfect objection killer, but choose your tools wisely. By Gerry Gould



All the

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We Fund OPEN Chapter 13 Bankruptcies We Fund OPEN Chapter 7 Bankruptcies BEFORE 341 Meeting

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toolbox with a tipped-over juice box and coffee cup, each bonded to a melted plastic material Ive colored to look like juice and coffee.

Yes, these sales tools are a bit comical, but theyre also effective. What you do is leave your creation on the visitors chair in your offi ce. Once your customer sees it, pick it up plastic liquid attached and explain how easily stains can be removed if interior fabric guard is applied. The goal is to get them to inquire about the consumer kit you have sitting on your desk. Their inquiry is your green light to break down the features and benefi ts of your protection products.

Some providers can also supply you with a fabric demo card, which is an effective demonstration tool. Sim-ply dip the card into a cup of coffee or soda and pitch away.

Flank Their ObjectionsYour customers may know that manufacturers are extending out their powertrain warranties. What they may not realize is that there are still a lot of holes your products can fi ll. Dont be afraid to ask what their understanding of the factory war-ranty is and, once theyve answered, fl ank their I dont need it objec-tion with a couple of objection-han-dling tools.

First, pull out the laminated desk mat most service contract providers provide to set the record straight. Use it to point out specifi c components your service contract can cover, the length of coverage, as well as other benefi ts your program offers.

If the customer remains uncon-vinced, show him or her a window regulator. Theyre not likely to recog-nize it, and theyll be amazed at the

claim related to the products you of-fer are also good additions to your manual. You should also include a copy of a recent invoice your dealer-ship paid to the dent repair techni-cian. This will demonstrate to your customers that vehicle damage can happen anywhere if it can happen on your lot.

Not Just a Novelty ActYou can get a little cre-ative when pitching envi-ronmental protection. For exteriors, treating half of a detached hood with paint pro-tection is a perfect demonstration tool. For interior protection, youll have to get a little creative. I equip my



PHOTOS COURTESY UNITED DEVELOPMENT SYSTEMS


cost to repair or replace it. Most im-portantly, you want to tell them that the part wont be covered under any powertrain warranty.

If the customer still objects, pull out a vehicle computer. Explain to the customer how todays vehicles are like computers on wheels because virtually every component runs off of one of these devices, which makes them more expensive to repair. Fin-ish up your pitch by explaining that these units can only be replaced when they fail.

Jarring PitchNothing tells the story of the ben-efi ts of tire-and-wheel protection than a mason jar fi lled with tire de-bris. Just make sure to explain each road hazard contained in your jar. For customers who say theyll take their chances, a damaged rim might be the only way to go. Just make sure to point out how tire-and-wheel pro-

tection works when showing off your damaged rim prop.

The Mini Cart A mini shopping cart is a great way to start a conversation about paintless dent removal. Once the customer sees it, try this line: The reason I keep

this on my desk is to remind myself to park as far away from the real ones as possible, because you never know when one will bump into your car. However, the only real way to avoid them is to never drive your car. Obvi-ously, this is not an option for you. This is your opportunity to close with the following: Now, wouldnt you agree its better to have it and not need it than to need it and not have it, espe-cially for such a low monthly cost?

When used properly, props will help you get closer to a Yes with your customer. They work because they evoke a memory in the custom-ers mind. If things go as planned, that memory will help the customer real-ize why he or she needs your protec-tion products.

Gerry Gould is director of training for United Development Systems Inc. He can be reached at [email protected].

[email protected]

Old Republic Insured Automotive Services, Inc.

One Name. One Resource.One Powerful A+ (Superior) Rated Partner.

Celebrating 36 years in the automobile warranty business as both the administrator and insurer. All programs are fully insured by Old Republic Insurance Company, rated A+ (Superior) by A.M. Best Company.

Programs offered:Vehicle Service Contracts Dealer Participation Programs

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Contact Sales and Marketing800-331-3780, ext. 7386 or email [email protected]

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Employees cant train themselves. But before you launch your stores in-house training program, check out this primer on what it takes to get the most out of your sales team. By Cory Mosley

T he coaching and development of sales staff always sounds like the right thing to do, but very rarely is it done consistently and, more importantly, properly. Many times, we assume the best person for the job is the one with a managers title. Unfortunately, thats not always the case.

Take a recent conversation I had with a sales manager. He remarked to me that one of his salespeople was on thin ice because he wasnt clos-ing his customers. I asked about his stores training program. We dont have a formal training program, he responded, adding that he personally shadows his salespeople and that his experience in the real-estate busi-ness served as the only reference his team needed.

Apparently, poorly performing salespeople are supposed to miracu-lously get better at their jobs. I asked the manager if he could coach his salespeople. I dont have time, he said, which I took to mean he didnt know how.

See, according to Dr. John C. Hall and John Steuermol innovators in the fi eld of selection testing there are seven critical components to be-coming a great coach. Lets examine each one and see if we can turn you into the coach your dealership and your team needs.

Be your own ally: The primary focus here is to instill in your sales team a positive and optimistic outlook. You want to keep them from play-ing mental games against each other and fostering negativity that impedes

performance. So, rather than start-ing another Saturday sales meeting by telling your staff how much they suck, think of a positive way to moti-vate them to victory.

Maximize your return on energy: Coach your sales team to avoid com-mon distractions and unproductive activities, such as coffee klatches, during high ROI times of the day. It

is so easy to misuse your time when you work the car schedule, so be sure to provide your team with a game plan for winning the day.

Prospect: This is a great opportunity to share and exchange strategies on how to prospect both inside and out-side the dealership.

Develop a compelling story: Help your team develop sales approaches that speak to the needs of your stores most common type of clients. All customers are not the same, so why should the sales approach be?

Become a master of communication: The core focus here is to help your sales team communicate the brand and dealerships message effectively. Identify and reinforce particular com-

ponents of your stores sales message that add the most value.

Sharpen the saw: Although its sad to say, the idea of continuous learning among sales professionals is very rare-ly taken seriously. Ive been in dealer-ships all over the country, including some of the largest dealership groups, and can only recall one that had a rec-ommended reading list for ongoing improvement. That dealership also provided spiffs to encourage team members to read and advance their skills. Its no wonder the store boasted the highest grosses in its area.

Keeping Score: Show me a sales-person who doesnt want to win, and Ill show you one who isnt making money or hitting their sales objec-tives. Top performers who really care about what they do want to know that they are crushing it, so track and monitor your salespeople regularly and encourage them along the way.

We have more technology and widgets at our disposal than ever be-fore, but so does the competition. Thats why your employees remain a critical factor in differentiating your store from your competitors, so be sure to utilize and develop that tal-ent. Change your approach and see what happens. I promise you wont be disappointed.

Cory Mosley is principal of Mosley Train-

ing LLC, a nationally recognized train-

ing provider focused on new-school

techniques, products and services.

E-mail him at [email protected].

7 Team-Building Must-Haves

Sales Driver

Top performers who really care about what they do

want to know that they are crushing it, so track and

monitor your salespeople regularly and encourage

them along the way.

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September 26-28, 2011 Las Vegas Hilton www.IndustrySummit.com

Im a Green Pea.

I Think I Can Do Better. I Want to Reach the

I Dont Know What F&I Stands For. I Have Never Seen a Red Flag.

If They Want to Pay Cash, Thats Fine With Me.I Do Enough E-mailing at Home.

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Now that the do more with less period is over, you might be fantasizing about greener pastures at some other store. Before you pull the trigger, here are a few questions you need to ask yourself. By Marv Eleazer

Should you go or should you stay? Thats a question some of us have had to ponder while walking our chosen career paths. And if youve spent any amount of time in the car business, you know youll face insurmountable obstacles along the way. We all have maximum tolerance levels, so how you deal with those bumps in the road will de-termine whether its time to pack it up or stay the course.

As for me, I cant imagine myself doing anything else. I love what I

do. In my opinion, few professions can compare to the excitement and reward of working in an automobile dealership, especially the fi nance of-fi ce. The thrill of putting impossible deals together is a feeling I just cant do without. I especially like that no two days are ever the same.

But even I know that working conditions can get complicated. Its a harsh reality we all must face. Sadly, the problems that drive us out of our jobs are usually rooted in our own egos.

You know how it goes: Everything is going along smoothly, sales are robust, grosses are great and your commission isnt bad, either. Then it happens. Staffers start taking each other for granted and personal respect goes right out the window. Tempers begin to fl are, even over the tritest issues. Soon, youre caught up in the melee. The thought of com-

ing into work turns your stomach, and the money youre making isnt worth the hassle of interacting with your coworkers or your boss.

Thats when you begin fantasizing about greener pastures. Kenny Rog-ers said it best: You got to know when to hold em, know when to fold em.

Nobody relishes the idea of chang-ing jobs, but sometimes it seems in-evitable. However, before you make your decision, be certain the prob-lems youre facing arent fi xable. In

fact, here are six questions you need to answer honestly before you start updating your rsum:

What is best for my long-term career?

What is best for those in my care? What must I have from this job

or employer to stay? What will I absolutely not toler-

ate if I stay? What will I lose if I leave? What do I expect to gain if I stay?I cant answer these questions for

you, and neither can anyone else. You must analyze your own situa-tion and weigh the answers carefully before proceeding. The answers are even more serious and complicated if youve been at your present store for a long time, so tread carefully and be honest with yourself.

Its vital that you understand whats motivating you to consider a job change, because youre doomed

to end up in the same situation with your next job if you dont. Its also important that you dont overreact to the situation youre facing, and that you plot your course with great care. And remember, a few months worth of bad turnovers or low fi nance pene-tration is an internal issue that can be corrected. Im talking about far more diffi cult issues here, such as:

Dealers downwardly modifying your pay plan

Constant battles with co-managers Verbal or sexual harassment

No resolution of internal prob-lems that hurt your performance

Unacceptable market conditions that are impacting your pay

Increased work schedules with little time off

No F&I backup person, making vacation time nearly impossible

Being pressured to commit fraudThere are times when youve gone

the distance and can bear no more, leaving you to decide whether to holdem or foldem. But when you take the plunge for better or worse own that decision. Dont look back and get caught in the coulda-shouda-woulda. The new job will have its ups and downs, but remember why you left and be the best you can be.

Marv Eleazer is the fi nance manager at

Langdale Ford in Valdosta, Ga. E-mail

him at [email protected].

Know When to Fold em

Mad Marv

I love what I do. In my opinion, few professions can compare to the excitement and reward of working in an automobile dealership, especially the fi nance offi ce. The thrill of putting impossible deals together is a feeling I just cant do without.

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Im an Experienced Salesperson.

I Think I Can Do Better. I Want to Reach the

I Dont Believe in Digital Ups. I Let the Finance Guy Worry About the Financing.

I Say Leaderboards Are for Golfers. I Have Never Sold Two Cars to the Same Buyer.

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Legal

There still is room in auto retail for spot deliveries, but a balance between the needs of dealers and consumer advocates must be struck. By Tom Hudson

If done correctly, a spot delivery transaction can be a win-win situ-ation for all involved. Being able to leave the dealership with a vehicle pending the assignment of the retail installment sales contract (RISC) to a fi nance source makes the dealer and the customer happy. The customer gets to enjoy his or her new ride while the dealer and the fi nance company con-fi rm that the information the customer provided is complete and accurate.

Done incorrectly and/or unethically, a spot delivery deal can be viewed as a deceptive or abusive dealer practice by consumer advocates, state regulators and courts. The former have for years railed against spot deliveries. They re-fer to them as yo-yo deals, and be-lieve dealers intentionally spot deliver cars to customers knowing they will be unable to assign their RISC without having them return to the store to re-contract with new terms that are more detrimental. But when pressed for proof that these abuses occur frequent-ly, they can offer little or no evidence.

Consumer advocates simply want spot deliveries outlawed. They pressed the issue before congressional com-mittee hearings on bills that eventual-ly led to the Dodd-Frank Act, and you can bet theyll press the issue with the Bureau of Consumer Financial Pro-tection (CFPB). When they do, they will point to stories like these:

A customer buys a spot-deliv-ered car, only to be called back to the dealership two months later because the deal is being rescinded.

A customer trades in his car for a spot-delivered car. Three days later, he is told his RISC cannot be assigned. He returns to the dealership only to

fi nd that the car he traded in was sold. He receives the trade-ins wholesale value and, if he owed money on it, must repay the lienholder. Mean-while, hes walking, not driving.

A customer buys a spot-deliv-ered car and signs a RISC. She does not sign any sort of rescission or unwind agreement, and no such language is contained in the RISC. Notwithstanding the absence of any contractual right to require the cus-tomer to return the car, the dealer, un-able to assign the RISC, demands that the customer return the car and re-contract. When the customer refuses, the dealer repossesses the car despite the buyer not being in default.

I have no doubt that these sorts of situations happen occasionally. Some-times they happen because the dealer has never had the spot delivery process vetted by an attorney. Sometimes they happen because of mistakes. Some-times it happens out of simple abuse.

When the new CFPB addresses spot deliveries, I hope it doesnt throw the baby out with the bathwater. If President Obama were to appoint me as the bureaus director, I would fi rst tell my staff to research how often abuse occurs. Only if the staff deter-mined that abusive practices were oc-curring in signifi cant numbers would I consider regulating the practice.

If evidence showed that dealers were behaving badly when they en-gaged in spot deliveries, Id have the staff address the practices they be-lieved to be harmful to consumers, not ban spot deliveries altogether.

Additionally, regulations would be based on the best practices of deal-ers who spot deliver on a daily basis.

They might, for instance: Allow for mutual rescission until

the contract is assigned; Require a dealer to keep the cus-

tomers trade-in until the customers RISC is assigned;

Provide a reasonable period (say, 10 business days) for the assignment of the RISC, beyond which the deal could not be unwound;

Prohibit a dealer from imposing any fees other than charges for excess wear and use, or damage to the car;

Prohibit a dealer from requiring a customer to re-contract if the RISC could not be assigned;

Prohibit any unwinding of a deal unless the customer has agreed to it in writing. (This last one, in my view, isnt necessary since a dealer gener-ally has no unwind rights absent the customers written agreement, but the prohibition might still serve to edu-cate dealers and consumers alike.)

No doubt there are other protec-tions and prohibitions my staff might consider. As long as they are based on real evidence and dealer best practices, they might well be accept-able. At the end of the day, though, spot deliveries have their uses, and, if done correctly, can benefi t dealers and customers alike. Throw out the bathwater. Keep the baby.

Thomas B. Hudson Esq. is a partner in

the law fi rm of Hudson Cook LLP and

author of several books. For more on

his books, visit www.CounselorLibrary.

com. CounselorLibrary.com 2011, all

rights reserved. Based on an article

from Spot Delivery. Single print publica-

tion rights only, to F&I and Showroom

magazine. HC# 4843-1317-8120 (2/11).

Spot Deliveries: Pitch the Bathwater, Not the Baby

FI0311legal.indd 36FI0311legal.indd 36 3/4/11 5:47:57 PM3/4/11 5:47:57 PM


The F&I Conference, Vehicle Service Contract Administrators Conference and the nations only Agent Symposium will unite

on September 26-28 at the Las Vegas Hilton to become one comprehensive event: Industry Summit 2011.

We all know that success in automotive retail requires close contact between dealers and the fi nance sources, agents, trainers

and product providers that serve as their partners. Combining three powerful conferences to form Industry Summit 2011

represents a crucial step toward reaching that goal.

Its a new era. Join us September 2628 at the Las Vegas Hilton for the fi rst-ever Industry Summit 2011!

To learn more, call 800-576-8788 or visit www.IndustrySummit.com.

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AF0

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AT BOBIT BUSINESS MEDIA, WERE KEEPING THINGS

You can feel confi dent that

F&I and Showroom March 2011

Documents

Transcript of F&I and Showroom March 2011