We have been with a company for many years that has offered a program to make our extended service contracts refundable in the event the customer doesn't make a claim against the warranty. It has been a great program for many years and has helped us to sell extended warranties at a pretty high level. Unfortunately, this company has now lost its backing and is closing up shop.

     The reason for my post is two-fold. 1- I want to know if there is any other company out there that offers a product to make service contracts refundable. They need to be a reputable, well-established company in order for us to consider them for the fact that we don't want to deal with this again.  We have done a little bit of research on our end and couldn't really find any company that seemed like a good candidate. 2- I want to know if the majority of the dealerships out there use such a product and offer refundable warranties. We have been selling our warranties that way the entire 9 years I have worked at this store. When I did finance, the main part of my warranty pitch was explaining how great the refundability was and I think it really helped me be successful as a finance manager. I couldn't imagine selling warranties and never being able to make them refundable at the end of the term.

     Let me know what you guys think. We would love to get signed up with a comparable company so we can sell warranties the way we know how. Otherwise, we may have to change our warranty pitch and re-train our finance department. Any input would be great.

We currently use Vauto to manage our used car inventory and absolutely love it. To anyone who is unfamiliar, it is a program that is used to manage inventory, track turn and market day supply on every vehicle in inventory, and compares your price to every "like mine" vehicle out on the market. It is a great tool and has helped us be very successful with our used car department.

With that said, we are having some issues with our new car department and are considering making some changes. We were hoping to find a similar tool to vauto that we can use for our new car inventory. The most important criteria we are looking for is market day supply info and a price comparison function.

Is anyone aware of a company that offers a product close to what we want? I contacted vauto and they don't have anything available for new. Let me know if there is anything that you guys are aware of. Thanks!

     Like everyone knows, the finance department is arguably the most important department of the dealership. Dealerships are relying more and more for strong #'s from their finance department in order to be successful. With that said, the GM has asked me to spend time with our 2 finance managers and evaluate the entire department. I am going to review their #'s over the last 12 months and find areas where we can improve the department both in overall gross and product penetration. I'm happy to spend as much time as is needed with them due to the fact that I get paid on the overall gross generated from the sales department. If they do better, I do better.

     With that said, I know what we expect from them is a very lofty but attainable goal.  The reason I know our goals are attainable is because I was able to do them on a fairly regular basis. I did finance when times were better and banks were easier to deal with. So I'm wondering if it is a totally different game now and if the #'s that we did back in the day are still attainable.

Here's what we expect out of them:

1. Warranty penetration: 55% with $1000 in markup
2. Gap penetration: 30% with $400 in markup
3. Credit life penetration: 12% with approx $150 in markup
4. Chemical penetration: 25% with $200 in markup
5. Etch penetration: 85% with $261 in markup
6. Finance penetration: 75% with approx $350 reserve

In total, the goal is $1500 per car. That is new and used combined.

     I was wondering if those #'s are attainable or if the goals need to be modified due to current market conditions. Are there dealers who's finance guys are still putting up these kind of #'s?? Let me know

     We have been going back and forth lately on what a detailers responsibility should be. I am the used car manager at a franchise Ford store and used cars are very critical to our success. We have had tons of issues with keeping our display at a level where we have enough cars to sell. The main reason for the lack of displayed vehicles is the delay with our detailer in getting cars out.

     We just recently hired a part time detailer to help out and we have definitely made an improvement. Even still, I feel like we aren't near as efficient as we could and should be. The reason I think we aren't very efficient is because we require our detailers to do a lot of things other than just detail the car. The GM of the store says that it is their responsibility to deliver a completely finished, perfect product. So, aside from the detail they have to: Buff the car when applicable, put on etch sticker, put on dealer logo and plate frame, gas the car, bookout the car, print carfax, print buyers guide and kelly retail sticker, sticker and park the car on the lot. All that probably takes a good 20-30 minutes to complete.

     I think we should have our lot techs take care of all the extracurricular stuff to free up time for our detailers in order for them to be 100% efficient. They have plenty of time to take care of those items so I don't think there is any reason why they can't help us out with that. The only negative with my plan is that it may be difficult to track down a lot tech to finish up the process. My rebuttal to that objection is that we can easily institute a process to where the lot techs are continuously checking to see which car needs to be finished up. That way the detailer doesn't waste any time looking for the lot tech.

     Anyway, I feel like our system is somewhat broke. We are getting into the busier months and I feel like the more dialed in this process is, the more successful we will be. Used is everything right now and we need to make sure we are on our A game. Any suggestions? Do most dealerships require as much as we do out of their detailers?

     The GM of our store and the used car buyer are having a disagreement as to what a used car buyer's responsibility should be.  We are making a few changes in our management team and the used car buyer wants to take on the used car manager responsibilities (pricing, managing recon, merchandising, marketing etc).

     The GM's argument is that a store should have a buyer who's only responsibility is to acquire inventory and a used car manager who handles the rest of the responsibilities that I already mentioned.  He says that you should never mix the two. A used car buyer should be paid on the volume of cars that we sold of his and the time in which they turned. A used car manager should be paid with the rest of the management team on the overall gross generated by the sales department. He thinks it is impossible for one person to do both jobs efficiently and not effect the volume/gross of the store.

     Our used car buyer's argument is that he used to do both jobs at another dealership that he worked at and managed to do a very good job. He says that both jobs go hand in hand, and it is easier to just do everything yourself rather than rely on someone else to do their job.

     I'm somewhat stuck in the middle but definitely agree more with the GM than I do with the buyer. We sell 70-80 used cars a month on average and I feel like there is way too much work involved to maintain that level. It would be one thing if we worked at Bob's auto and sold 20-30 cars per month, but we don't. I think that anytime you overload somebody with too many responsibilities, inevitably something will suffer. What are your guys' thoughts????

Which is better: Experience or a rookie?

     We are in the process of interviewing and hiring 3-4 guys in order to get our sales team to an appropriate level for the spring and summer. The other sales manager and I are in agreement with the owner that we need the help going in to the busier months but we are struggling to find the right guys. Part of the problem is that the owner only wants us to hire someone that has a good amount of previous sales experience under his belt ( car sales or not). His take is that if we hire a person who already has experience, we will have to spend less time training him and getting him where we need him to be.  While I think experience is really important, I don't think that should be the determining factor as to whether or not we will hire them.

     My take is that ideally we would like to hire a guy with some sales experience, but I think we should be more open minded. We put our prospective employees through a screening process and the lady that does that for us asks them about sales experience. She doesn't even set up an interview with people that don't have experience. I think we could be turning away some really good candidates and I haven't even had a chance to meet them. I tried to argue the point by telling him that his 2 managers ( myself and the other desk manager ) were both hired with no sales experience whatsoever. I like the idea of taking a young, ambitious guy and training and molding him into a superstar. But that's just me!

     So who's right? Do you go for instant gratification and get a mediocre guy with some experience or do you look for a guy that could be great and invest the time into him?

     We have had an eternal struggle at our dealership with getting sales guys to attend the BDC on a regular basis. I'm sure most dealers have had similar difficulties convincing their salespeople to leave the floor for an hour every day and go to the BDC. We have a few guys that see the vision and have bought in to the benefits of their efforts in the BDC. The problem is trying to get all of our salespeople to buy in so we don't feel like we are forcing them to go up.

    I feel like we have tried just about everything to get them to cooperate. We have tried: letting them make their own schedule, trying to show them success stories because of hard work in the BDC, reminding them constantly, negative reinforcement if they fail to go up at least 75% of the time, and positive reinforcement by spiffing them for just showing up. Nothing has seemed to work over the long term. It sucks that you have to spiff them to do their job, that doesn't seem right to me!

     Anyway, I know there are many dealers out there that have very successful BDC departments and I want to know what the secret is. I know how important it is to have a scheduled time dedicated to both sold and unsold follow up. Are my guys just lazy? Should I give them the boot and start with a clean slate? Let me know what you guys have done that works.

     Everybody has heard the term "misery loves company" and that's what I hope to accomplish from this post. It's no secret that December is a slow month in the car business but this December seems to be especially brutal.  I was hoping to see if the amount of cars we have been selling lately is average so I can feel a little bit better about the situation, or if we just flat out suck!

     We average probably 90 cars in December, so that would average to 3.5 - 4 cars per day. In the last 10 days we have sold 13 cars ( new and used combined ).  Last weekend we sold only 1 on Friday and 3 on Saturday. To make matters worse, I am used car manager, and only 4 of those 13 cars over the last 10 days were used. OUCH!!!     

     So how is everyone else out there doing this month? I realize if everyone is doing crappy like me that won't put us in a better position, but it sure as hell will make me feel better about our performance. Let me know how it is going for you guys out there. Also, don't respond back to me if for some reason your dealership is killing it right now!

     I'm sure we are in the same boat as most dealers right now, but I have been getting lectured about how my front end gross for used cars is too low lately. Anyone that knows used cars is aware of the fact that the market shifts quite a bit in October/November and it is really easy to get yourself in a bad position with regard to what you own your inventory for.  As a result, we have been pretty much buried in half of our inventory the last couple of months.

     In the past, we used to wholesale out of a lot of these cars towards the end of the year but now we keep everything and retail out of it. That strategy poses a problem when it comes to adhering to some sort of a turn policy. We figured we would just take the hit on the front end gross rather than take a huge wholesale loss for 2 months, and hopefully minimize the loss with any back end money made.  I feel like it is the best way to go and the owner and I both agree on this strategy.  However, he still gets all frustrated when our front end per car is $300 or so less than normal. It's a lose-lose for me!

     So the reason for the post is to figure out how we are doing compared to other stores.  We average approx $1400 per car on the front throughout most of the year ( used only ).  We have averaged right around $1000 over the last couple of months counting all the cars that were losers. I don't think those numbers are all that bad, but the GM thinks different. What is average gross these days on a used car? Are we really leaving that much money on the table? For my sake, I hope not! Let me know what you guys think.  P.S. The gross I'm referring to is after all costs including pack.

     I have been brainstorming a lot lately on ways to rally the troops. Anybody that has worked in the car business knows that November is the start of 4 pretty slow months in a row. The guys are already starting to feel the affects of the downturn in traffic and as a result are already starting to complain. I want to try to do everything I can to help keep them motivated and to keep things somewhat interesting around here.  The only thing is that I am on a limited budget.

     We have tried Christmas at the dealership during December as a fun way to compensate and spiff the salesguys.  We would go buy like $6,000 worth of stuff (tv's, laptops, digital cameras, and basically anything else they have at Costco!)  The response that we got was always really good, but the problem we had the last time was that everyone needed the cash more than they needed the gifts, so they returned like 90% of the stuff to Costco. I'm pretty sure the guys are in the same boat this year and would rather have the money vs. the gifts. It is way too much work to go buy all that stuff and get it here to the dealership if they are going to just take it back the next week.

     With that said, we need a fun, affordable way to keep things interesting around here during the holiday season. Like I said before, we can't break the bank because the owner of the store keeps us on a budget. So we need a really good idea. Let me know what you guys have tried in the past that has been successful.  Keep in mind that the program needs to be tied to selling cars and needs to reward productivity for the guys that are pushing hard during the slow months. I don't want to just hand out free money! Let me know what you guys think.