Automotive Compliance Consultants president Terry Dortch recapped what he described as “sad and unfortunate” news about employee crimes against dealers. Before going into a few tips for protecting the dealership against such activities, Dortch highlighted a few recent headlines about such occurrences, including:

• Florida couple accused of stealing $2 million from S.C. car dealership, warrants say.

• Kentucky dealership employee arrested and charged with three counts of theft by deception.

• Pennsylvania dealership controller headed to jail after embezzling $10 million.

Dortch acknowledged the criminal activity itself is detrimental, but the breach of trust can be worse. Whether informal or formal, Automotive Compliance Consultants insisted employees make a covenant with their employer when they agree to give their services for compensation.

Said a dealer whose longtime employee was charged with falsifying vendor payables to steal from the dealership, “The crime feels like the betrayal of a family member.”

A survey a few years ago by an accounting firm noted that a third of dealership respondents had “experienced actual or attempted fraud.” Of those, 62 percent of the fraud perpetrators were employees.

“These events can seem to happen out of the blue, but often in retrospect behaviors, practices and outside activities were warnings about such individuals,” Dortch said. “These individuals are often more concerned with what they get from their position than what they can contribute.”

Automotive Compliance Consultants explained that operators can consider these defenses for asset theft:

• Security cameras to watch over parts and materials inventory shelves, supply rooms, parking lots and other outside areas to observe suspicious activities.

• Limit access to areas like the parts department, main office, F&I office, cashier office, materials closets and parts storage.

• Note employees’ lifestyles, habits and behaviors that seem suspicious or otherwise indicate they may live above their visible means.

• Employees hanging around in areas where they have no legitimate reason to do so is a red flag.

• Enforce your internal controls policies.

For back-office defense, Automotive Compliance Consultants shared these suggestions:

• Don’t allow one person to have complete control of bank accounts. Have one individual handle payoffs of trade-in balances and another control license and title activities; have a third person manage the day-to-day bill paying. This would mean having multiple accounts.

• Conduct regular audits of the books; auditing by a third party preferred.

• Daily review the DOC or daily operating control sheet. Look at vendor expenses closely and know each vendor and the service they provide. Look for any abnormalities in the expense, i.e. is it way too high for the service they are providing?

• Investigate anything that looks different or out of place on vehicle values, bank statements, inventory balances or number of ROs.

• Don’t shrug off any swing in profit, revenue or payables — always investigate.

• Pay close attention to used inventory and the water that exists. Market fluctuations will occur, but you don’t want to see large swings that could signal something amiss.

• Pay close attention to your wholesaled vehicles run a report at least monthly to see what is being wholesaled and check the price it was sold at.

• Pay close attention to contracts in transit — again, this could mean something other than just waiting on stips or stipulations, the documents required by a lender to fund a loan, such as proof of income, residence, and proof of insurance.

• Check bank statements personally; randomly look for abnormalities.

• Keep an eye on used car reconditioning; if looks out of place, dig deeper.

• Conduct monthly inventory of all vehicles, used and new, and match to the dollar amount on the books and/or floor plan.

And when it comes to data security, Automotive Compliance Consultants recommended that operators engage a managed security services provider to monitor your store’s network and alert your IT staff when an intrusion occurs so immediate action can be taken.  Absent such real-time network monitoring, the dealership will likely remain open to network compromise and perhaps substantial loss.

Finally, Automotive Compliance Consultants stressed that dealerships need to make sure every employee knows that no internal theft of any kind will be tolerated — and be sure they understand violations will cause dismissal, at least, and criminal prosecution often.

“Sometimes having a third party audit the dealership’s exposures will provide the most prevention and peace of mind,” Automotive Compliance Consultants added.

Automotive Compliance Consultants specializes in dealership compliance, providing in-dealership consultations and analysis, compliance audits and training, and offers solutions for all compliance needs. The Automotive Compliance Consultants staff has extensive experience in the automotive retail industry and focuses exclusively on dealership compliance issues.

For information, contact Dortch at terry_dortch@compliantnow.com or visit www.compliantnow.com.

By Jim Maxim, Jr.

I want to present here five F&I performance calculations that if you regularly work them and respond appropriately your F&I department will produce more profit. First, all business and industries when measuring performance or production use metrics called Key Performance Indicators (KPI). 

We will look at five F&I metrics considered the top five KPI’s in the F&I industry. KPIs reveal how you’re doing – and help identify any issues or problems to address. Since money is involved here, tracking and measuring these KPIs should be mastered by every dealer and F&I manager.

Healthy F&I departments and their managers work at mastering each of these metrics:

1.PVR is Profit per Vehicle Retail in dollars. This calculation is Total Dollars Profit = Finance Reserve + F&I Product Income ÷ by Total Units Sold

PVR is the most popular F&I metric and KPI. Most experts in the F&I industry would agree that PVR is King and is the most common metric referred to in measuring F&I performance.  The goal and objective are for F&I to achieve higher PVR.

How to improve PVR: Given today’s downward pressure on financial reserve, hope for improved PVR rests on the F&I manager’s F&I product sales penetration. Consumer buying behaviors have changed over the years. With consumers owning and keeping vehicles longer, many protection products now offer more value to them. Consider training the F&I team about these changing consumer buying behaviors and how they change customer wants and needs. 

F&I managers must change how they present F&I products, so product value is evident in the buyers’ minds.  Perhaps the most powerful tool F&I managers are using today that helps increase PVR is an F&I menu presentation system.  In 2015, MaximTrak did a survey of dealers using its e-menu technology that showed the digital platform responsible for per-vehicle retail (PVR) lifts of $538 and 52% product penetration lifts. 

2.Individual F&I Product Sales Penetration (%) is the # of F&I Product Sold ÷ Total # Vehicle Units Sold. For example: 60 VSC Sold ÷ 100 Units = 60%.

Notes:                                         

• Vehicle Service Contract - most popular of all F&I products
• VSC – most profitable in dollars
  - impacts other departments in the store like parts and service
  - good if the vehicle comes back with a trade

How to improve penetration: Developing new skills and product knowledge through training can help F&I staff make incremental improvements by learning new ways to engage with customers, build rapport, and offer what customers truly value. 

For instance, F&I managers that interview the customer by asking questions better understand customers’ needs for F&I protection products.  Top F&I performers interview the buyer and then perform a thorough needs analysis before doing a menu presentation. 

Electronic F&I menus are now incorporating “smart survey” techniques that analyze consumer responses based on a lifestyles survey. Smart surveys capture answers to the questions F&I typically would y ask a customer. These surveys can be incorporated in the sales process while sales finalizes the deal for F&I.  Smart surveys identify respondents’ lifestyle traits and provide F&I information on the customers need for protection products. Smart surveys include a system that “learns” about the customer - their driving habits, ownership plans, risk profile, and more. The result helps consumers – and F&I managers - recognize what optional protection products would bring the most value to them. 

This technology: 

• Reveals to buyers and F&I about customers’ personal risk analysis and compares it with the protection products offered at the dealership.
• Provides insight into customers’ driving habits and ownership plans that help in understanding customer buying behaviors and interests.  This helps give dealers valuable insight into the F&I products that appeal to its customers and the products or services the customer is most likely to consider purchasing.
• Dealers can utilize data to determine the products F&I should offer. This helps dealers in working with its vendors in designing new products and services for F&I to offer customers based on their needs and interest in buying.

Technologies like this that helps to match customers to the right products can make less experienced F&I managers more confident and responsive when discussing protection products with their customers. 

3.Average F&I Products Sold per Unit is Total # of F&I Products Sold ÷ by Total Vehicles Units Sold. For example: 250 F&I Products Sold ÷ 100 Vehicle Units Sold = 2.5             

How to improve products sold per vehicle: Having a third or fourth product presented to every customer every time is the third leg of a strong F&I product offering. For your dealership, this might be a dealer-branded prepaid maintenance plan or a bundled package of protection productsPresenting a fourth or fifth product can increase F&I penetration and PVR, but also customer retention and service sales.  A high-end menu system will ensure the right products are presented every time. Ask your F&I agent for new ideas to help you increase the number of products sold per deal.
 

4.Ratio between Finance Reserve Gross and F&I Product Gross – there are two calculations here: Finance Reserve Ratio (%)  = Total  Finance Reserve $ ÷ Total F&I Gross $, and
F&I Product Gross Ratio (%) = Total F&I Product Gross $ ÷ Total F&I Gross $.                         

Goal and objective are to have a higher F&I product gross ratio -This is because the sale of F&I products provide these values:

   1. Customer retention for the dealership
   2. Tangible values to the customer
   3. Higher resale value on the vehicle.
 

NOTE: Finance rate markup provides zero value to the consumer
 

How to improve product reserve/gross ratio – Improving the sale of retention-building products can help boost these key ratios. VSCs, prepaid maintenance plans, and other products that link buyers back to the dealership help build retention and drive service profits. F&I can increase sale penetration of such products by gaining more knowledge of how these products benefit the consumer and gives F&I confidence in presenting their value in compelling ways; if buyers see F&I is not bought into these products’ value, why should the consumer want to buy?  Utilizing state-of-the-art interactive sales tools like incorporating a Factory Warranty Review presentation using visuals that include graphs helps sell VSC products. 

5.Menu Utilization – an indicator that shows the frequency in utilizing a menu presentation system for offering and selling F&I products: Total # F&I Menu’s Printed ÷ Total Units Sold = Menu Utilization %. 

F&I menus are generated by F&I managers as either paper or paperless menus.  Electronic F&I menu systems now have reporting available that tracks F&I managers using an F&I menu presentation system and sales tools that include:

• Needs analysis interview
• F&I product sales tools that include graphs and videos
• E-F&I Menu presentation, either printed or electronically prepared and signed.
• Waiver form for products accepted and declines, either printed or electronically prepared and signed.

       Notes: 

• Instead of measuring utilization based on # or units, electronic F&I menu systems can measure time. Measuring time helps to evaluate F&I managers’ use of various sales tools, capabilities, and functionality that come with e-F&I menu systems.
• Measuring F&I manager utilization of all resources that come with an e-F&I menu system helps
  support F&I menu training.  Measuring F&I manager utilization of a menu system provides for an effort-based reporting tool.
• Menu utilization measures for quality results while F&I production measures quantitative results.
• High usage of an e-F&I menu system and all the sales tool that come with the system can correlate to increase F&I production and profits for the dealer.

Manage by facts

Using data to manage a department eliminates subjectivity and emotion and helps managers focus on reality. The reality is within the data accessible from the store’s dealer management system or third-party F&I software platform. 

You will find these reporting tools very useful: 

1. F&I Menu Reporting –   F&I reports created with data generated from e-menu systems.
2. Dashboard Reporting – Dealer reports generated through F&I platform integration with the DMS.
3. Distributor Reporting – For enterprise reporting from the platform for dealer groups and their F&I agencies.
4. Utilization Reporting – Reports created that measure F&I managers the use and efforts of an F&I menu system as a tool for selling F&I products.
5. Delivery-Type Reporting – Digital sales report analyzing in-store and online F&I activities and sales. 

Many changes are taking place in the automotive industry. We are seeing more OEM’s manufacturing and introducing EV’s in the marketplace. This may suggest the need for tracking the sale of F&I products by vehicle type.  This report, whether standalone or part of the dealer’s dashboard reporting, tracks the sale of F&I products across various channels, e.g. online versus in-store. This will be an important metric to watch as we move forward more deeply into the digital dealership.

Automobile dealers face many challenges in running their business. The competition for customers today is greater, and profit from the sale has been thinned by the OEMs. This has resulted in the need to generate more revenue from F&I to make a deal profitable.  Now, dealers also are facing the risk and loss of revenue from finance reserve and possible increasing regulatory pressure for add-on pricing as well, from the Consumer Financial Protection Bureau. 

With dealers facing more competition for customers, thinning profit margins, and potential loss of F&I revenues, dealers will need to depend more heavily on real-time data. These KPIs, when put into detail reports,  gives management crisp direction on how to make informed and intelligent business decisions for running the business and improving the dealer’s bottom line. 

Jim Maxim, Jr. is President of MaximTrak Technologies, www.maximtrak.com.  Reach him at maxim@maximtrak.com

CRYSTAL LAKE, IL, July 13, 2016 – The sad and unfortunate news about employee crimes against auto dealers continues, so a few tips for protecting the dealership against such activities is timely, notes

Terry Dortch, president of Automotive Compliance Consultants. 

A few recent headlines about such occurrences: 

• Florida couple accused of stealing $2 million from S.C. car dealership, warrants say
• Kentucky car dealership employee arrested and charged with three counts of theft by deception.
• Pennsylvania dealership controller headed to jail after embezzling $10 million. 

The criminal activity itself is detrimental, but the breach of trust can be worse. Whether informal or formal, employees make a covenant with their employer when they agree to give their services for compensation. 

Said a dealer whose long-time employee was charged with falsifying vendor payables to steal from the dealership. “The crime feels like the betrayal of a family member,” he said. 

“These events can seem to happen out of the blue, but often in retrospect behaviors, practices, and outside activities were warnings about such individuals,” Dortch said. “These individuals are often more concerned with what they get from their position than what they can contribute.” 

A survey a few years ago by an accounting firm noted that a third of dealership respondents had “experienced actual or attempted fraud.”  Of those, Sixty-two percent of the fraud perpetrators were employees! 

Consider these defenses for asset theft: 

• Security cameras to watch over parts and materials inventory shelves, supply rooms, parking lots, and other outside areas to observe suspicious activities.
• Limit access to areas like parts department, main office, F&I office, Cashier office, materials closets, and parts cores storage.
• Note employees’ lifestyles, habits and behaviors that seem suspicious or otherwise indicate they may live above their visible means.
• Employees hanging around in areas where they have no legitimate reason to do so is a red flag.
• Enforce your internal controls policies. 

For back office defense: 

• Don’t allow one person to have complete control of bank accounts. Have one individual handle payoffs of trade-in balances and another to control license and title activities; have a third person manage the day-to-day bill paying. This would mean having multiple accounts.

• Conduct regular audits of the books; auditing by a third party preferred.
• Daily review the DOC or Daily Operating Control sheet. Look at vendor expenses closely and know each vendor and the service they provide. Look for any abnormalities in the expense IE is it way too high for the service they are providing.
• Investigate anything that looks different or out of place on vehicle values, bank statements, inventory balances, or number of ROs.
• Don’t shrug off any swing in profit, revenue, or payables --always investigate!
• Pay close attention to used inventory and the water that exists. Market fluctuations will occur, but you don’t want to see large swings that could signal something amiss.
• Pay close attention to your wholesaled vehicles run a report at least monthly to see what is being wholesaled and check the price it was sold at.
• Pay close attention to contracts in transit – again, this could mean something other than just waiting on Stips or stipulations, the documents required by a lender to fund a loan,  such as proof of income, residence, and proof of insurance.
• Check bank statements personally; randomly look for abnormalities.
• Keep an eye on used car reconditioning; if looks out of place, dig deeper!
• Conduct monthly inventory of all vehicles, used and new, and match to the dollar amount on the books and/or floor plan.

Data security:

• Engage a Managed Security Services Provider to monitor your network and alert your IT staff when an intrusion occurs so immediate action can be taken.  Absent such real-time network monitoring, the dealership will likely remain open to network compromise and perhaps substantial loss. 

Make sure every employee knows that no internal theft of any kind will be tolerated – and be sure they understand violations will cause dismissal, at least, and criminal prosecution often. Sometimes having a third-party audit the dealership’s exposures will provide the most prevention and peace of mind.

Automotive Compliance Consultants specializes in dealership compliance, providing in-dealership consultations and analysis, compliance audits and training, and offers solutions for all compliance needs. The Automotive Compliance Consultants staff has extensive experience in the automotive retail industry and focuses exclusively on dealership compliance issues. 

For information, contact Terry Dortch at terry_dortch@compliantnow.com or visit www.compliantnow.com.

Most days of the week, Paul Ciardiello is the new car director and general sales manager for Manly Honda in Santa Rosa, California. But on Mondays he’s Chef Paul at nearby Redwood Gospel Mission cooking up savory meals for more than 350 homeless individuals and recovering addicts. 

For Ciardiello, second from left in photo, his volunteer work at the mission is part atonement, a slice of “I’ve been there too,” and a unique opportunity to practice his first love, cooking for others. Ciardiello is more than Chef Paul to the mission’s diners. He’s also a skilled, highly rated former professional chef who happened to walk into a Manly Auto Group dealership a few years ago to buy a car. 

“They must have liked something I said or how I presented myself, because out of the blue they offered me a job,” Ciardiello recalled recently, still sounding astounded at the chance offer and opportunity put before him. “I said no, I’m a chef. I got into my car and drove to the new restaurant I was to open in three weeks.” 

He grew up in the restaurant business. A dishwasher at 13, he spent 22 years working in restaurant kitchens. “I had good reviews by the food critics, and then a few years ago I came from Connecticut to Santa Rosa to work for noted celebrity chef Michael Chiarello, who like me, specializes in Italian-influenced California cuisine.” 

Some say God’s hands in events is easier to see in the rearview mirror. Ciardiello is one. “I arrived at the restaurant and was told by the owners we weren’t opening, that I wasn’t to order the $35,000 in wine, that the investment money had been lost in a Ponzi scheme. I was out of work,” Ciardiello said. 

He drove back to Manly and asked if the offer was still good. Along the way, he noticed three poorly clothed individuals sharing one cup of coffee on a particular cold Sonoma County winter morning. That experience led to his researching the Internet for organizations giving back to and servicing the Santa Rosa community. His search took him to Redwood Gospel Mission. 

“I’d been there, I’d been homeless. When I contacted the Mission they asked me why I wanted to volunteer, to come in and cook for them, and I told them, “A car guy has to get to heaven too, but that mostly I have been blessed and didn’t want to take that fortune for granted,” he said. 

Matt Sutton, far left in photo, is Food Service Manager for the Mission, and supervises Paul. “He’s about the longest serving volunteer here,” he said. “The residents count on him and come up with recipes to stump him. Paul’s actions speak volumes and he ministers to our guests by them. He is consistent and reliable, and they know that he really cares.” 

Recalling walking into Manly’s that day, Ciardiello said, “There are not many industries where an individual can walk in at 35 years old and within 10 years later have done what I’ve been given the opportunities here,” he said. “It is mind boggling to think how I went from working 90 hours a week for the pay I received to now working fewer hours, with less stress, more income and time for my family. I got lucky, and I know it.” 

Ciardiello works a four-hour shift at the mission every Monday. With a sous chef and other help from residents of the Mission’s 12-step program, he prepares meals for the Mission’s homeless population, its addiction recovery residents, and for an affiliated nearby women’s shelter. 

He works with whatever food products are available. Much of it is donated. FoodNetwork Star Guy Fieri films his Guy’s Grocery Games nearby and donates show food products to the Mission. 

The Mission feeds upwards of 300 individuals daily. Mission residents and especially Ciardiello’s kitchen crew can’t wait for him to arrive to assemble and prepare the meal they’d devised for him that day. As he does, he teaches food safety, sanitation and meal preparation basics. By the time most of his kitchen crew have completed their six-to-12-month recovery program, they’ve also earned a certificate in food service. Then a new inbound recovery crew rotates in and, as Ciardiello said, he starts again with the basics, “This is how you chop an onion...” 

“Guys here in recovery or those just out of prison tell me that their day goes by much quicker and enjoyable on the day they’re with me in the kitchen,” Ciardiello said. “We engage in conversations about suffering, how Jesus suffered, and how our emotions are so raw and the hunger for healing so intense. I love these kinds of conversations, and one reason I love being there is to hear those kinds of redemption stories.” 

Jim Leman writes about automotive retail operations from Grayslake, IL. He too works with the homeless and spends his Wednesday mornings volunteering at a food pantry. You can reach him at jimleman@gmail.com

By David R. Missimer

Dealers often ask us how they’re to respond to someone requesting information about why the dealership ran their credit.

The nature of these requests is one of two motives:

• The consumer is demanding to know why the dealership ran their credit, or
• The consumer is a victim of identity theft

The dealership may receive requests for information from a phone call, correspondence from the consumer, correspondence from an individual claiming to represent the consumer or law enforcement.

The response is conditioned on whether the request is for identity theft information, or concerns previous credit inquiries by the dealership.

Usually for most franchised dealers, our recommendation is simple and straightforward – reply as the dealership, as it is the “User” of the credit report and not a “Furnisher” of information under the Fair Credit Reporting Act (FCRA).

However, and to be clear, if the dealership finances transactions (BHPH) or reports information to consumer reporting agencies on particular consumers, the dealership then is a “Furnisher” under FCRA and has very different obligations to investigate and respond to claims from consumers.

This article addresses the requirements the “User” of a consumer report must respond to consumer inquiries.

The previous credit inquiry

Frequently consumers will question a credit inquiry from the dealership that shows on their credit report will be to demand it be removed, or that information be sent to them verifying the dealership had a permissible purpose of requesting the consumer report. The dealership’s only obligation is to verify it had a permissible purpose of running credit on the individual. This can be accomplished by locating the signed credit application in either the deal file or dead deal folder.

Once you confirm a signed credit application for the consumer, the only response required is to advise the individual that credit was run at their request and the dealership has a signed credit application on file.  Do not send, email, or fax a copy of the application to the individual inquiring.

Once the dealership is satisfied that appropriate documentation exists for the credit request, nothing further is required. The only time a consumer should be provided a copy of their signed credit application is when you are 100% certain they are who they say they are, or in response to an identity theft claim.

Identity theft

Under FCRA, the User of a credit report must provide certain information to a victim of identity theft, law enforcement officials identified by the victim, or authorized individuals investigating the claimed identity theft on behalf of the victim. Before providing any information, however, the dealership must receive a written request for information, and verify both the identity of the individual claiming to be a victim of identity theft, and the theft itself.

A request for information from an Identity Theft Victim must:

• Be in writing, and
• If not initially provided, then at the dealership’s request, include available relevant information concerning the alleged Identity Theft, including the date of the transaction and any other identifying information.

Once an acceptable written request is received, the dealership must verify both the claim of identity theft and the identity of the person claiming their identity was stolen. To prove the claim of theft, the victim must provide a copy of a police report and a completed Identity Theft Affidavit.

To check the identity of the person making the theft claim one of the following, at a minimum, must be provided:

• A government-issued identification card;
• Personally identifiable information of the same type provided the Dealership by the unauthorized person; or
• Identifying information typically requested from customers financing their purchase.

Once the victim has made the request, and both the existence of a theft claim and the claimant’s identity have been verified and only then, must the dealership turn over information concerning that transaction.

The next time a consumer contacts your dealership demanding you take action concerning their credit report don’t panic. Follow the above guidelines and respond accordingly.

The consumer may not be satisfied with your response to their prior credit inquiry, but can take no action against the dealership that ran the bureau for a permissible purpose. If that consumer believes another used his or her identification at your store, let them take the necessary steps to report it as identity theft.

The easiest identity theft scam in the world is to contact a creditor and demand they send a copy of the credit application.

For more information on this subject, contact the author or visit www.compliantnow.com.

David R. Missimer, dmissimer@compliantnow.com is General Counsel for Automotive Compliance Consultants Inc. He spent 28 years in private practice as a seasoned litigator and trial lawyer representing lenders, auto dealers and numerous other entities and individuals. He has worked with dealership compliance issues since 2003. He joined Automotive Compliance Consultants in 2003. He is a member of American Financial Services Association and National Automotive Finance Association as General Counsel of Automotive Compliance Consultants Inc.

A new white paper from MaximTrak Technologies leads auto dealers into the present and future potential of digital F&I platforms for improving F&I profitability and customer satisfaction. 

“The digital revolution has influenced F&I best practices for more than a decade, led by digital cutting-edge e-menu technology. Today the industry is being driven by multichannel, high-touch, visual tools that integrate with the industry, use predictive technology, are easy to use, and engage consumers proactively in the F&I experience,” notes Jim Maxim, Jr, president, MaximTrak Technologies. 

This new report notes recent results of dealers using digital technologies to boost PVR and aftermarket product penetration. Across a study of 270 dealers and 1.5 million transactions, PVR increased $538 per deal and service contract penetration lifts of 52% per deal.  

“Every dealership I talk to wants new opportunities to maximize F&I profitability. Those dealerships that embrace the right technology experience better results…more than they thought possible. Profitability is not elusive…it is a choice,” Maxim says. 

Click here to download this report (http://offers.maximtrak.com/future_of_f-i). 

This white paper also details MAXIMTRAK FLITE, a digital platform that combines a state-of-the-art touch screen, tablet technology, and a unique “smart survey” with MaximTrak’s fully integrated, compliant and comprehensive system. It is designed to put the F&I customer in control in a whole new way. With FLITE, a buyer’s entire buying process is enhanced and streamlined with interactive videos, surveys, product recommendations, package building, and more. With the flick of a finger, customers are guided through a consistent, frictionless, and enjoyable sales experience transforming the vehicle delivery process and driving dealer profitability. 

To learn more and for a personal demonstration, contact 1.800.282.6308 or email sales@maximtrak.com. Click here to download this report.

More than 100 companies at NADA this year marketed products and services aimed at making fixed operations more efficient and profitable. The big question coming out of NADA is this: did dealers grasp onto the better ideas to help them eliminate costs, improve service volume, and increase customer retention? 

“If not, that’s a big miss,” says Ryan Williams, president of Fidelis PPM, revenue- and retention-building prepaid maintenance software. “Dealers should already be investing in solutions that create new revenue streams and then hold on to it.” 

Coincidently, international sales strategist Grant Cardone, a name well known in automotive retailing, shared similar caution, in his article “Prepare for a Massive Recession,” in Entrepreneur magazine.  “Don’t wait for it to get here - operate like it is here now,” Cardone wrote. “Stop ALL spending except on those things that can increase income. Do NOT spend to consume; spend only to increase income. 

With monthly proven ROI and 20% service growth, products such as prepaid maintenance programs meet these criteria, Williams says. “When programs like this can deliver a three-year retention average of 68% and $70 per RO upsell, their contribution to a dealership’s profitability can be enormous.” 

 Dealers should ask the following when considering products or services that are being offered: 

• Does your retention program drive consumers to your shop?
• Is the customer experience it delivers positive enough, so they come back again?
• Are there accountability tools baked into the solution to measure the lift in customer-pay dollars for each visit, so program ROI can be proved? The dealers Williams met with at NADA were actively gauging vendors’ service-profitability ideas. They were also seeking advice about solutions that didn’t require them to reinvent how their service department operates.  

Programs that enhance existing processes, such as prepaid maintenance plans that drive buyers back to the selling dealership, help retain customer business and keep service bays occupied. Such plans produce: 

• 85% first-year retention, 65% each of the following two years
• $70 customer-pay upsell per repair order
• On average $1,105 in customer-pay service business a year with you, for the majority of the six years consumers own their vehicles today 

“Every decision a dealer makes about an investment factors in at least two objectives: How will it streamline operations to remove waste and cost, and how will it drive service volume, retention, and thus revenue,” Williams notes. 

“If a dealer isn’t evaluating purchases for their ability to achieve both goals, dealers leave potential revenue on the table. That’s not the way to situate the dealership for leaner days ahead.” 

Williams notes that most any vendor’s service offering, especially from those marketing prepaid maintenance and related programs, must offer the dealer measurability. 

“Most programs cannot substantiate their retention promises, and dealers putting faith in such plans have misplaced hope,” he says. 

Fidelis PPM is the authority in helping dealers retain customers through process-driven prepaid preventive maintenance retention programs. These programs drive consumers into participating dealers’ service  departments. Deep reporting tools provide dealers with detail-rich accountability metrics.

For more information, visit www.getfidelis.com    or email Williams at ryan@getfidelis.com

Reconditioning workflow evangelists such as Dennis McGinn, founder, and CEO of Rapid Recon, says GMs who create a Time-to-Market workflow culture among recon, service and used cars can help dealers: 

• Drive down recon costs – up to a quarter-million-dollars or more a year
• Get vehicles frontline ready in four to five days – not 10 to 12!
• Increase inventory turns 2.5 times for every five days shaved in recon 

“The message from this year’s NADA was ‘be prepared.’ Dealers recognize that leaner times ahead will require other parts of their business to pick up any slack. Recon is an ideal hidden treasury,” McGinn said. “Getting a dealership to this level of recon efficiency and profitability is a GM-level responsibility.” 

Here's more: 

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“If the general manager isn’t involved in one of the highest profiting departments in the store, you might have the wrong GM,” Tom Dunn, General Manager for the Fred Martin Superstore, Barberton, Ohio, told me. 

“If you don’t care about improving reconditioning, why should your staff?” says Edward Hyde, dealer principal of the Legacy Auto Network, London, Kentucky. 

Dealers who successfully establish this culture start by replacing outdated and largely ineffective reconditioning tracking methods such as whiteboards, spreadsheets and sticky notes with automation. They assign a management-level champion to manage its daily oversight, and they use their reconditioning software to structure work and then monitor and control its outcome to specific time deadlines.

Network and data security for your auto dealership is serious business! You just cannot operate an automobile dealership safely and without undue stress unless modern systems, security tools, and network protection are in place to keep good data safe and keep out bad data and cyber troublemakers.

You want and need the facts – clearly presented, to make the right decision about how to best protect you and your customers’ valuable assets from data hacking and cybercrime.

Better understanding and application of just three data security best practices will keep your dealership well protected, secure, and productive. We invite you to learn more. Download brief here.

CRYSTAL LAKE, IL, March 15, 2016 – From the CFPB’s encroaching influence on dealer finance and insurance practices to new challenges in human resources to increasing cyber crime exposures and day-to-day OSHA and EPA requirements, dealers in 2016 juggle considerable change.

“Dealership compliance in 2016 is increasingly difficult, given so many regulatory and social influences on the business today. Dealers want answers – and prefer not to wade through paperwork to find them, and we’re at NADA in Las Vegas again this year to provide direction,” said Terry Dortch, president, Automotive Compliance Consultants.

Dealers and their staff can visit the company at Booth 468C, where the compliance firm’s general counsel and vice president David Missimer also will answer questions, review why the CFPB is pushing dealers to adopt Compliance Management System software and practices, and address dealers’ other compliance challenges.

Also offering guidance will be representatives from Automotive Compliance Consultant’s network and data compliance partner, Nuspire Networks.     

Third-party access to the dealer management system for additional data applications needed by  CRM, data mining, lead generation systems, for example, are making dealership networks increasingly active targets for cyber criminals, Dortch said.

Automotive Compliance Consultants specializes in dealership and auto finance compliance, providing in-dealership consultations and analysis, compliance audits and training, and offers solutions for all compliance needs. The Automotive Compliance Consultants staff has extensive experience in the retail automotive industry and focuses exclusively on dealership compliance issues. For information, contact terry_dortch@compliantnow.com  or visit www.compliantnow.com