Today's dealerships face numerous challenges in their pursuit to stay afloat. They are experiencing increased competition, fast-evolving consumers, and tighter margins on car sales than before. Car dealerships must also add new employment regulations and laws to their list of the wave that already impacts how they manage their workforce. The new employment laws and regulations not only exposes car dealerships to lawsuits from workers but also increase the cost of legal compliance and labor.

With so many things to worry about, it can be hard for dealerships to balance their responsibilities with providing great customer service and making decent profits. This is especially true for small and midsize dealerships. Below are some of the employment and legal document management challenges that dealerships around the world face.

Changes in the FLSA Exempt Classifications Interpretation

The FLSA excludes some workers of car dealerships from its overtime requirements. For example, people involved in servicing and selling automobiles are exempted from the list. Auto dealers in the United States have always relied on the guidelines from the labor department, which exclude service advisors from overtime requirements. However, the federal agency reserved its position in 2011 and ruled in favor of overtime pay for the service advisors. The decision to reverse the regulations conflicts with decisions made by courts in other states. That means dealerships must comply with the new guidelines or risk misclassification lawsuits from their former service advisors.

Fair Pay Act

The fair pay act forbids car dealerships from gender-based discrimination when it comes to compensation. However, the bill has been amended twice in two years, creating more litigation for auto dealers. In 2016, the fair pay act was expanded to include all employees irrespective of their position or title. That means car dealerships must involve all their workers when conducting a pay comparison. Later on, the federal agency amended the law to include record keeping requirements. In 2017, the agency expanded the legislation to compel car dealerships to pay disparities based on ethnicity and race. Car dealerships with less ethnic diversity and gender positions are likely to see more litigations and agency action than before.

Workplace Harassment Rules

New workplace harassment regulations in the US went into effect in 2016. These regulations have raised complaint procedure requirements and workplace harassment regulations applicable to workers of car dealerships. Previously, the law required that all car dealerships with more than 50 employees train their supervisors in various topics related to workplace harassment. The new requirements demand that the training to cover supervisor obligations, victim's legal remedies, abusive workplaces, and remedy and strategies to prevent workplace harassment. As such, car dealerships have to comply with strict workplace harassment training regulations while training their supervisors.

Conclusion

Abiding with these and other laws can make a car dealership not only compliant but also prosperous. In many instances, car dealerships need to make slight changes to their existing procedures and policies to remain compliant with employment law requirements.

Car dealerships have a vast amount of assets spread over a large area. This can create an enormous security challenge. Depending on the location and design, criminals have many ways to access and exit the lot. Below are some tips to help protect your dealership from crime.

Positioning of Cars

It is important to position cars in a manner to prevent easy movement or towing. Park vehicles to block driving lanes, entry and exit points. The cars should also have the wheels turned and emergency brakes set. The most valuable cars should be parked in the middle of the lot or on the showroom floor. The key here is to make stealing the vehicles as difficult as possible as a deterrent. Most thieves prefer easy targets to decrease the chance of being caught.

Well-Lit Premises

Proper lighting is an excellent and cost effective way to deter criminals. Thieves prefer to do their work in the cover of darkness to avoid being seen. Good lighting also can improve surveillance video footage. Also, witnesses can get a better view of the perpetrators with proper lighting.

Vehicle Alarms

If the vehicle has an alarm, it should be set. This will be an additional obstacle that thieves would have to overcome. If the vehicle does not have an alarm system, it may be worth the investment to purchase one. This can also add value to the vehicle when it is sold. Also, insurance companies typically give discounts for cars with alarms.

Surveillance System

Installing an outdoor camera system can be an excellent deterrent in preventing theft. Thieves will be less likely to take the risk of being caught on camera. The cameras should be positioned to see the entire lot. The cameras should also be capable of producing quality images at night and inclement weather. If a crime does occur, the video could help law enforcement catch the perpetrators.

Security Patrol

Hiring a security company probably is the best way to prevent theft. Most criminals will not attempt to compromise a dealership if a guard is watching the premises. A security officer can immediately investigate suspicious activity and alert law enforcement if necessary. This is probably the most costly option, but could be well worth the investment.

Controlled Gate Access

Gated access control can prevent vehicles from entering or exiting the lot without proper access. Gates would prevent thieves from driving cars off the lot, or driving vehicles such as tow trucks onto the lot. The gate can also be equipped with an alarm in case criminals decide to climb over the gate. This would immediately alert the police or the dealership of the breech.

Properly Screen Employees and Contractors

Sometimes the biggest threats to a dealership are insider threats. Who better to steal from a lot than employees or contractors. Employees have access to the vehicles and important information. They can either use this to their own advantage or pass it along to friends, family or associates. They also know the type security the dealership has and how to possibly defeat it. Contractors who work on the lot such as groundskeepers, electricians, HVAC, and other trades could gain important information while performing their job. It is important to do proper background checks on all employees. This is not possible with contractors, but only hire reputable firms that do proper background checks on their employees. Also, keep a close eye on contractors and keep them restricted to the areas where they are performing the work.

In closing, there are numerous threats to your dealership. Many of these threats can be minimized by following the tips above.

There is no such thing as car dealership insurance, but it should be one of the most important considerations for dealership owners. If you’re thinking of starting or your own car dealership, you must have several insurance policies, including property and casualty coverage on all your cars. Most importantly you should have fleet insurance, as it’s impossible for car dealers to insure each of their cars individually. However, the coverage isn’t car insurance, but it does cover your vehicles in case of an accident.

To protect your car's against theft, loss, vandalism and other damage you’ll also need car lot insurance. Keep in mind that no dealership can legally sell vehicles without lot insurance. However, the considerations for insuring your car dealership don’t stop there; you must also ask important questions, know the specifics of the types of insurance you need and learn ways to save on your insurance premiums.

Ask Important Questions

Asking questions is an essential part of purchasing any type of insurance. These questions will ensure you obtain the right kind and amount of coverage. Purchasing insurance for your dealership is much like purchasing insurance for your car, and requires the same types of questions. For example, some good question to ask are: What discounts are available? Do you specialize in insurance for dealerships? How much insurance does my dealership need? Can the policy be changed easily? What are the premium options?

These are all important questions that should be asked, but you may also bring other specific and personal questions to the table. This will ensure that all your bases are covered even before you obtain a quote. Each insurer’s answers to these questions should be used to help you learn more about the coverage you need, compare services and narrow down your options; much like with traditional auto insurance.

Learn the Specifics of Dealership Insurance

If you’re going to run a car dealership, knowing the specifics of the type of insurance you can obtain and need is of utmost importance. First you should know that individual vehicles in a fleet can’t be registered to a car dealer, so the dealership must purchase liability insurance. Secondly, and most importantly, all car dealerships should have property and casualty insurance. These two insurance types combined will provide the proper protection your cars need. Liability limits are set in this type of coverage, which ensures you’ll be paid if there’s an accident during a test drive and more. The coverage also insures your vehicles in case of a fire, weather damage, theft and pretty much anything else that could happen to them.

You’ll also need commercial car insurance coverage that’s unique to car dealers – dealership insurance. Dealership insurance is designed for the automotive industry, and covers areas that property and casualty coverage can’t. For example, it covers: any loaner vehicles you loan to customers, cars you’ve obtained, but haven’t completely purchased yet, customer cars you’re performing maintenance on, damage to a customer’s vehicle while being driven by an employee and accidents before or during a test drive (caused by customers or employees).

Learn Ways to Save on Your Insurance Premiums

Dealerships don’t qualify for traditional car insurance discounts, but there are some discounts specifically designed for them. First, you can save money on your insurance premium if you provide employee training. Many insurers even provide a list of training courses they offer discounts for or offer discounts for creating a new training program.

Next, insurers offer reduced rates to dealerships that routinely check a customer’s driving history before making a sale. They also provide discounts to dealerships that have security on their lot, such as overnight security officers, security systems and cameras. Unbelievably, insurance companies also offer discounts to dealerships whose cars are only test driven on a pre-determined route. Apparently, driving the same route every test drive reduces the risk of an accident.

Finally, if you conduct employee background checks, you also qualify for discounts on your insurance premium. For the insurance company, this ensures a dealership isn’t hiring criminals or individuals with questionable backgrounds.

Investing in a car dealership is a major venture that requires major considerations, including insurance coverage. If you don’t know how to protect yourself, your vehicles and your employees, you could be out of business before you’ve even started. Most importantly, you can’t legally sell cars from a car lot without some type of insurance. So, keep this in mind, and don’t skimp on learning all that you can about car insurance and insurance coverage for your dealership.

When a person decides to start a car dealership, insurance needs to be part of their planning. It is a requirement for a dealership to have vehicle insurance. It is to their benefit to have an insurance product designed to cover each of their vehicles as well as the business. A dealership having protection for their vehicles against potential accidents, theft as well as vandalism and more is essential.

Dealership Physical Damage Coverage

This is designed to provide a car dealership protection for trailers and any type of vehicle a dealership has in its possession to sell. It's possible to have such coverage extended to protect other types of land motor vehicles. This could include scooters, golf carts as well as construction equipment and more. Vehicles on a dealership lot that may be there for consignment as well as a floor plan may also be covered. The declaration section of the insurance policy will identify the classes of vehicles that will be provided coverage.

Garage Liability Insurance

This is insurance designed to cover the legal liability for car dealerships with claims of bodily injury. It can also provide protection against property damage that occurs during business operations. There are two parts to this type of insurance. A dealership must list in the policy who is insured. They must also choose a limit for the insurance. This will involve a provision in the policy to protect against any and all legal issues involving garage operations. It should include the maintenance, ownership as well as operation of the vehicles when in a dealership's garage and more.

False Pretense Coverage

The cheapest car insurance product can provide effective protection for a car dealership who loses a vehicle because of a scheme, trick or false pretense. This coverage is important because when a car dealership voluntary parts with a vehicle in this way; it is not considered a form of theft. In this situation, the dealership has voluntarily given a vehicle to a person for a false reason. This coverage often protects a car dealership when a person takes a vehicle for a test drive and does not return the vehicle. False Pretense Coverage can protect a car dealership in various scenarios.

Dealers Open Lot Coverage

This is often referred to as auto physical damage coverage. It is designed to provide coverage for any physical damage that occurs to vehicles owned by a car dealership. This type of insurance product acknowledges that car dealerships are a unique business. It is designed to cover the risks involved with a dealership having vehicles on an open lot. This coverage can be for passenger vehicles, RV units and more. It will cover used, new service as well as demonstrator vehicles. Most insurance companies will require a dealership to insure the entire value of their inventory.

Reporting Form

This requires an insured dealership to file a report with the insurance company showing their inventory values on a regular basis. Most insurance companies require it to be done within 15 days from the end of a reporting period. This can be once a month or once a quarter. A dealership could be penalized if it neglects to submit reports as required. A penalty could be payment of only 75 percent paid for a loss. It won't matter the limit shown on a policy's declaration page.

Non-Reporting Form

This requires a dealership to submit to the insurance company the maximum value of all vehicles located on their property at any one time during the term of the policy. If a dealership gives an insurance company a lower value than what is actually of their premises: they could be penalized.

A car dealership needs to purchase insurance specifically designed to provide protection for the risks associated with having a car lot. This is essential because these insurance policies are created to meet the unique needs of those in the auto dealership industry.

The Toughest Selling Points and How to Beat 'Em

Car dealers like to sell a lot of vehicle inventory. Sometimes it is hard to get cars off the lot quick enough for the next batch of new vehicles to come. Customers generally have to rely on lending to get nicer cars, so that is something that smart car dealers try to provide. Most people like to buy vehicles on credit. It is hard for a customer to buy vehicles if their credit rating is poor. Having flexible lending options available to customers is sometimes useful. Another option is having leasing available. This article has some ways that your dealership can increase sales for vehicles.  

Look At The Sale From The Customer's Perspective 

As a car buyer, the goal is to get a great deal for a low price. As a car dealer, the goal is to get a high price for every vehicle on the lot. Making those two goals match is the challenge of selling cars. If it is hard to lower the price, one neat way to increase sales is to make it a great deal. Customers like it if the vehicle is newer, low miles, clean interior, and a nice paint job. Dealerships who have a high price ceiling may want to consider prioritizing making the vehicle really nice to buy. The price of insurance is also often a factor. Bankrate emphasizes how small cheap cars that are bought by young people have higher insurance premiums. Cheap auto insurance quotes can help encourage sales.

Try Price Matching

Some retail stores do this. If a competitor is offering a low price on a particular vehicle, offer to price match. Many customers shop around before they make a decision on what car to buy. Running price matching deals can encourage more sales. Look at the financial revenue that you are taking in to see how much you can match the prices of competitors. It is hard to price match if expenses are too high. Trying to make expenses less can give your dealership flexibility to be more competitive.

Know The Popular Car Models 

Some cars just do not sell as well. Having a large inventory of vehicles that do sell well can encourage more revenue. Pickup trucks, despite their size, are one of the best selling vehicle types in the U.S. This is not true if you live in another country. Knowing the needs of your particular market can help increase sales. Markets on the East Coast will also probably not want pickup trucks as much as those in the U.S. South.

Measure Your Sales Staff Effectiveness

Some people are not as great at selling. Having a metric of how many vehicles each staff member helped sell can help with assigning employees to the job where they are succeeding. There are several qualities that make great salespeople. Checking sales staff to see if they line up with many of them can help vehicle inventory get sold quicker.

Show Information From Trusted Resources

Vehicle resources like the Kelley Blue Book and Fuelly give buyers an independent way to see how good a particular car is to buy. The Kelley Blue Book collects vehicle ratings by people who have owned a certain model of car. It also has expert reviews. If each vehicle on your lot has information from a third party factual resource, that can help customers make up their mind quicker.

Conclusion

Getting cars sold is sometimes challenging, particularly if a competing dealer next door is running great deals. These suggestions can help your dealership become more effective and good at getting cars sold. There are many other tips out there from pro car salesman.