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N A T I O N A L I N D E P E N D E N T A U T O M O B I L E D E A L E R S A S S O C I A T I O N

ALSO Understanding Buy Here-Pay Here Customers PLUS Evaluate Core Inventory to Sell Cars Faster

SCOTT ALLEN NAMED 2011 NATIONAL QUALITY DEALER

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PAIDDALLAS, TEXASPermit No. 2079

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O F F I C I A L P U B L I C A T I O N O F N I A D A N E V A D A

DEALER NEWS AU

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NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM • WWW.NIADA.TVNIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR [email protected] NEVADA DEALER NEWS IS PUBLISHED BI-MONTHLY BY THE NA-TIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION SER-VICES CORPORATION, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203; PHONE 817-640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT ADDITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203. THE STATEMENTS AND OPINIONS EX-PRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF NEVADA DEALER NEWS OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIA-TION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDEN-TIFICATION AS MEMBERS OF NIADA, DOES NOT CONSTITUTE AN EN-DORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT © 2011 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED.

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4 Scott Allen Named 2011 National Quality Dealer6 Understanding Buy Here-Pay Here Customers8 Evaluate Core Inventory to Sell Cars Faster

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Dealer Education

Online video continues to increase in popularity among auto shoppers. Video brings vehicles to life in a way photos just can’t. Sight, sound and motion make it more emotional and engaging for viewers. As a result, video is a powerful merchandising tool that can help influence shoppers to not just buy your make and model, but to buy it from you.

Video Facts• More than 75 percent of Internet users

watch video online• 50 percent of consumers watch videos while

shopping for a car• 66 percent of car shoppers would watch

more video if it were available • 72 percent of shoppers are more likely to buy

a product or service when a video is used

What You Can DoFirst, let’s talk about where you should

be posting videos online. It’s not just about a video’s content – the key is in the wide distribution of your videos. It doesn’t matter how good the video itself may be if it’s not being seen by auto shoppers.

According to an AutoTrader.com Video Survey, vehicle shoppers say they expect to find videos on dealership sites, manufacturer sites and independent sites such as AutoTrader.com. Therefore, it is critical for automotive advertisers to place video content in front of all potential customers. Don’t forget about video sites like YouTube, too.

Now that you know where you’re going to be posting your videos, let’s talk content.

Do-It-Yourself VideosDo a complete video walk-around. Give

shoppers a sense of what it would be like to drive and own the car.

Keep videos to less than one minute. Shoppers will often lose interest if a video is too long.

State the facts. Include price but keep information objective to avoid a sales pitch.

Include information that cannot be gained from photos. (i.e., warranty, single owner, non-smoker, etc.)

Reinforce the retention of information. Show what you are talking about (i.e., show the odometer while talking about mileage).

Use Pan-and-Scan VideoConsider using pan-and-scan videos.

AutoTrader.com offers a personalized, video solution called FastAds that’s based on this technology. This option allows you to use vehicle photos and easily turn them into a virtual walk-around video, narrated by a voiceover with a custom script. It’s a very convenient and easy tool that can effectively showcase any vehicle you are trying to sell.

Leverage Manufacturer AssetsYou don’t always have to make a homemade

video to communicate the message. Most OEMs will have video assets available for your use, so use them when you can’t use the other two options I mentioned already, or use them in conjunction with a do-it-yourself or pan-and-scan video. If you are participating in a manufacturer’s certified pre-owned program, it’s a great opportunity to leverage these assets as many manufacturer’s have commercials specifically dedicated to the CPO message.

Merchandise Your Dealership in a Video, Too

So far, we’ve only focused on videos about your inventory, but your online marketing is about much more than the vehicles you sell. Building confidence in your capability as a dealership is just as important in getting shoppers to choose you.

Tell your story. Do a store video tour and highlight amenities and departments. Show customers why you are a dealership they should do business with.

Use customer testimonials videos. Build a strong image for your prospective customer.

Include dealership information. Be sure to incorporate your contact information, website address, map and directions.

Post your videos on a multitude of sites. Include user-generated sites such as YouTube and other social networking sites, as well as your dealership site, independent sites and anywhere else your inventory is listed.

Howard Polirer is the director of industry relations for AutoTrader.com.

He has helped train more than 10,000 dealers in over 200 cities across the U.S.

on the industry’s best practices to reach automotive consumers. He can be reached at [email protected].

Telling Your Value Story with Video

BY H O WA R D P O L I R E R

FREEDEALER EDUCATION ONLY ON NIADA.TV24/7

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Confirmation of success in business can take many forms. Somemight consider the number of years in operation as a goodsign, while others may put stock in steadily improving annual

sales figures. For Scott Allen, confirmation took another form afterhe was named 2011 National Quality Dealer (NQD) of the Yearduring NIADA’s 65th Annual Convention and Expo in June.

“I think it means I’m on the right track,” said the 49-year-oldTexan, who’s owned and operated Auto Land in Haltom City, Texas,since 1991. Allen, a member of Texas IADA and NIADA for 17years, is the sixth NQD from the Lone Star State, and also is a NIADACertified Master Dealer.

“I’m still a little in shockfrom winning the award,” he said.

“I’m absolutely going to takeadvantage of the opportunityand, yes, we are going tobe marketing it heavily.Joe (Lescota, CMD programinstructor) is going to laugh atthis because one of his jokes isgetting a big gorilla and puttingit on your building. Well, I’vegot a reason to put a gorilla onmy building now.”

While Allen isn’t planningto actually rent an inflatable

primate, he definitely wants topromote the honor, albeit in a

tasteful manner.“We’re getting a huge

archway that’s probably 36 feetwide and about 20 feet

high that isgoing to

come

across our entrance,” he said. “It’s going to say ‘Stophere and see why Auto Land is NIADA’s National Quality Dealer ofthe Year.’”

Allen and 19 fellow candidates from across the country werejudged by a Northwood University panel that looked at a variety offactors to make its selection, including contributions to the auto-motive industry and community involvement. The candidates com-pete for the national award after being named as quality dealers bytheir respective state associations.

Involvement may as well be Allen’s middle name. Besidesbeing active in TIADA (he’s the 2011 president elect) and theFort Worth dealer association chapter (where he served as presidentfrom 2006 to 2010), Allen even formed a business association inHaltom City to fight unfair ordinances that threatened his dealershipas well as others.

Working with others, Allen said, is what’s helped him succeed.“I would say there is power in numbers,” he said. “Part of the

thing that got me into forming the Haltom Urban Business Associa-tion and getting involved in the local planning and zoning processand the city council had to do with the fact that we wanted to builda new building.”

City codes prevented such construction, so Allen, other dealersand even a salvage yard owner got together, and then met with otherbusiness owners in the vicinity, too.

They began to join our association, we had weekly meetingsand then we wrote several letters, made appearances at the citycouncil meetings and before we knew it, they decided maybe theyneeded to revisit this when it went from one or two guys who hadto say something about it to over 100,” he said. “Alone, I know Icould’ve never gotten that done.”

Allen, whose dealership stocks more than 75 vehicles dailyand employs eight people, applied the same idea to how he soughtadvice on improving his business.

“Some of it had to do with losing my father in 2003. He wasa real rock for me. We bounced ideas and thoughts off each otheron a regular basis and I really had a void and was missing somethingthere. At that point, I decided I needed to build a better networkof dealer friends to do those same kinds of things I used to dowith my father and it just snowballed,” Allen said. “I thinkvisibility and strength in numbers would be one of the greatestassets that an association like NIADA, TIADA or any automobileassociation can provide.”

Perhaps Allen’s greatest business epiphaniy occurred when hecompleted the CMD program in 2009.

“It had an immediate impact. I went from a guessing game toknowing where I stand,” he said. “The financial part of it was justamazing, such as being able to drill down to the cost of holding avehicle on your lot per day. I never knew how to get formulas or howto put those numbers together to get those.”

Another aspect of the course Allen appreciated was itstimeliness and flexibility.

“I went into this CMD class was when the economy began totank and Joe Lescota, who had an exact regimen for his classes eachtime, right on the very first day, said, ‘OK guys, you’re hurting and Iknow it and I’m going to throw this book out. There are two or threethings that we’re going to have to cover, but we need to drill downand start talking about your businesses and find out what’s goingon,’” Allen said.

As for the NQD award, Allen said his staff was just as thrilledas he was about being chosen for it. “Immediately, they’re using itin their spiels and they think it builds value,” he said, “and it does,in the company and what we do.”

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2011 BHPH Buyer Study from AutoTrader.com

Key Messages to Communicate Focus on Approval: Since approval is a BHPH shoppers’ top concern, messages about financing approval should take precedence in BHPH dealer advertising – both online and offline. Talk about Speed of Process: When making a dealership selection, many BHPH shoppers are interested finding a dealer who can handle the vehicle purchase process quickly, according to the study. The good news is 83 percent of BHPH dealers complete the buying process in two hours or less. As a result, this message is an important one to include in your advertising. For example, “Get Your Car in Less Than 2 Hours!” Consider Reporting Customer Payments to Credit Bureaus: Only 37 percent of BHPH customers’ payments appear on their credit report; however, 63 percent of BHPH customers would like their payments reported. As a result, BHPH dealers should consider using messages such as, “We Can Help You Rebuild Your Credit.” Just be sure, if you advertise this message, you can follow through on it. Also, don’t forget to vet this message with your legal counsel.

The FindingsFour out of five BHPH customers conduct

research before visiting the dealership. According to the study, 81 percent of BHPH vehicle buyers said they performed either some or a great deal of research as part of the car shopping process before going to a dealership compared to the 19 percent who stated they conducted very little research.

Seventy percent of BHPH shoppers regularly use the Internet; that’s as much as traditional shoppers for general purposes. However, BHPH car buyers do not use the Internet for vehicle shopping as much as traditional auto buyers.

With four out of five shoppers conducting research prior to visiting a dealership coupled with the high percentage of BHPH customers already online, the implication is there’s an opportunity for BHPH dealers to reach and influence their shoppers by tapping into the online automotive space with advertising messages and information that resonate with the targeted consumer.

It’s important for BHPH dealers to align their advertising with the unique needs of BHPH shoppers. The need for financing approval drives the shopping process for BHPH shoppers. Nearly two out of three BHPH customers enter the process with securing financing or identifying a dealer as their first priority. While this information is in line with what the BHPH industry has long suspected, the key is to align your advertising messages with the shopping priorities of your customer base. Effectively communicating the right messages in your advertising may dramatically improve the chances of turning a shopper into an actual customer.

In October 2010 and January 2011, the National Alliance of Buy Here-Pay Here Dealers (NABD) and AutoTrader.com teamed up for a groundbreaking study to define the consumer profile of the average BHPH customer and to understand the unique shopping needs of this customer segment. The two-part study included qualitative focus groups conducted in Los Angeles and Dallas and a national quantitative online survey among 606 BHPH buyers who purchased within the previous 18 months.

The results of this study affirm for the first time many common perceptions among the BHPH community about the priorities and behaviors of BHPH customers. There are also some new findings about their Internet usage as well as the amount of research BHPH shoppers are conducting prior to visiting a dealership. Finally, we identify key messages BHPH dealers can focus on to more effectively target their advertising and influence BHPH shoppers during the shopping process.

CONSUMER PROFILE OF THE AVERAGE CUSTOMERBHPH Buyers vs. Traditional Buyers

Understanding Buy Here-Pay Here Customers: 2011 BHPH Buyer Study from AutoTrader.com Word count: 619 In October 2010 and January 2011, the National Alliance of Buy Here-Pay Here Dealers (NABD) and AutoTrader.com teamed up for a groundbreaking study to define the consumer profile of the average BHPH customer and to understand the unique shopping needs of this customer segment. The two-part study included qualitative focus groups conducted in Los Angeles and Dallas and a national quantitative online survey among 606 BHPH buyers who purchased within the previous 18 months. The results of this study affirm for the first time many common perceptions among the BHPH community about the priorities and behaviors of BHPH customers. There are also some new findings about their Internet usage as well as the amount of research BHPH shoppers are conducting prior to visiting a dealership. Finally, we identify key messages BHPH dealers can focus on to more effectively target their advertising and influence BHPH shoppers during the shopping process. Consumer Profile of the Average Customer BHPH Buyers vs. Traditional Buyers

58% Female

50% Female

39 Years Old

47 Years Old

<$50k Annual Income

>$50k Annual Income

44% Married

60% Married

Poor Credit Rating

Excellent/Very Good Credit Rating

The Findings Four out of five BHPH customers conduct research before visiting the dealership. According to the study, 81 percent of BHPH vehicle buyers said they performed either some or a great deal of research as part of the car shopping process before going to a dealership compared to the 19 percent who stated they conducted very little research.


With four out of five shoppers conducting research prior to visiting a dealership coupled with the high percentage of BHPH customers already online, the implication is there’s an opportunity for BHPH dealers to reach and influence their shoppers by tapping into the online automotive space with advertising messages and information that resonate with the targeted consumer. It’s important for BHPH dealers to align their advertising with the unique needs of BHPH shoppers. The need for financing approval drives the shopping process for BHPH shoppers. Nearly two out of three BHPH customers enter the process with securing financing or identifying a dealer as their first priority. While this information is in line with what the BHPH industry has long suspected, the key is to align your advertising messages with the shopping priorities of your customer base. Effectively communicating the right messages in your advertising may dramatically improve the chances of turning a shopper into an actual customer. First Step in the Shopping Process



Key Messages to Communicate Focus on Approval: Since approval is a BHPH shoppers’ top concern, messages about financing approval should take precedence in BHPH dealer advertising – both online and offline. Talk about Speed of Process: When making a dealership selection, many BHPH shoppers are interested finding a dealer who can handle the vehicle purchase process quickly, according to the study. The good news is 83 percent of BHPH dealers complete the buying process in two hours or less. As a result, this message is an important one to include in your advertising. For example, “Get Your Car in Less Than 2 Hours!” Consider Reporting Customer Payments to Credit Bureaus: Only 37 percent of BHPH customers’ payments appear on their credit report; however, 63 percent of BHPH customers would like their payments reported. As a result, BHPH dealers should consider using messages such as, “We Can Help You Rebuild Your Credit.” Just be sure, if you advertise this message, you can follow through on it. Also, don’t forget to vet this message with your legal counsel.

First Step in the Shopping Process

KEY MESSAGES TO COMMUNICATEFocus on Approval: Since approval is a BHPH shoppers’ top concern, messages about financing approval should take precedence in BHPH dealer advertising – both online and offline.

Talk about Speed of Process: When making a dealership selection, many BHPH shoppers are interested finding a dealer who can handle the vehicle purchase process quickly, according to the study. The good news is 83 percent of BHPH dealers complete the buying process in two hours or less. As a result, this message is an important one to include in your advertising. For example, “Get Your Car in Less Than 2 Hours!”

Consider Reporting Customer Payments to Credit Bureaus: Only 37 percent of BHPH customers’ payments appear on their credit report; however, 63 percent of BHPH customers would like their payments reported. As a result, BHPH dealers should consider using messages such as, “We Can Help You Rebuild Your Credit.” Just be sure, if you advertise this message, you can follow through on it. Also, don’t forget to vet this message with your legal counsel.

S E V E N T Y P E R C E N T O F B H P H S H O P P E R S R E G U L A R L Y U S E T H E I N T E R N E T



BHPH

Understanding Buy Here-Pay Here Customers:

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Evaluate Core Inventory to Sell Cars Faster

Selling cars consistently is a craft few can master. It takes someone with the right combination of character and confidence to close deals. However, many experienced dealers will admit the far greater challenge is buying the right cars for their inventory – cars customers want.

That’s because the market for used cars can be unpredictable. With vehicle values always in swing between public demand and manufacturer supply, many dealers are often unsure which units will bring the greatest return on investment.

While you can’t predict the future, you can improve your chances of selling cars faster and making top-dollar if you know where to focus your efforts. To hit your sales goals, start by evaluating your core inventory.

Finding Your Bread-and-ButterClearly, your main products are used

cars. But, how do you know which are your best-sellers? Cars in your core inventory sell fastest and make you the most money. They are your bread-and-butter. Typically, a vehicle is “core” to your business if you can regularly sell it in less than 30 days and hold more than $1,500 gross profit. Imagine if you could find more of these cars to sell!

The good news is you can, and it’s easy. To identify year/make/model units as potential core inventory candidates, look at sales logs from the past few months. Record how many days it took to sell, and how much gross profit you made on each car. Then, compare to see which units consistently sold fast and gave you the most money. These core inventory units were probably the best value vehicles for your business, and you may want to consider stocking more of them.

Of course, every dealership is unique. Even stores in the same group have distinct qualities that define their character and attract buyers. Some successful business models are Certified Pre-Owned, while others are Buy-Here Pay-Here. So don’t worry if you discover that your top-selling products happen to be minivans, Mazda’s, or even motorcycles. Your goal is to learn which vehicles are best-sellers for your business, not which cars you happen to prefer personally. Ultimately, the year/make/model of the car is not as important as the return on investment it provides to your business.

What’s Hot, What’s Not?Now you can identify cars that sold well

in the past, so take the next step in growing your business. Find out which cars in your area are hot and which are not with help from an inventory management system. An investment in success can bring huge rewards for your business.

Using an inventory management system like AAX by DealerTrack helps you seamlessly evaluate and manage your entire inventory. Getting the right system for your dealership will immediately help identify vehicles in your area that are currently best-sellers, and which are riskier ventures.

For example, a Nissan Altima may be the fastest selling car in your area, but you may only make a couple hundred dollars profit in the end. On the other hand, it may take twice as long to sell an Acura MDX but you can expect to walk away with thousands in gross. As the manager in charge of selecting cars for your inventory, you need to have trusted documentation to support your purchasing decisions. Otherwise, you could end up with carrying costs for cars that won’t turn. Spotting these market trends can be invaluable when considering how much to pay for used cars at auction or trade.

Did you know it’s typical for dealers without inventory management systems to have only 10-15% of core inventory in stock? While you should never have 100% of cars as core inventory, you want

to aim for at least 50%. Remember, you’re an entrepreneur in the used car business. You should still feel free to take on “non-core” cars if you truly believe they will sell. Your competition doesn’t keep all their eggs in one basket, so it’s crucial for you to diversify your inventory as well. Who knows, maybe the best-selling car is one you’ve never tried selling before. Just remember to stay true to your core.

Know Your CompetitionOnce you determine the best-selling

cars on your lot and in your market, the final step is staying competitive with other dealers – especially in terms of how you appear online. To start, make sure your prices are in-line with other online listings. Buyers often look at dozens of search page results with listings of the same types of cars, so you should update your prices regularly to stay relevant online.

Besides pricing, many of your customers want to see vehicle’s history before buying or coming into your dealership. It makes sense that not knowing about open recalls, accidents, repairs, or previous owners can make deals sour quickly. That’s why most inventory management systems and auctions have integrated access to Carfax Vehicle History Reports to help dealers evaluate cars they’re considering. Savvy dealers check the history before acquiring cars to reduce their chances of getting stuck with a car that no one wants to buy. Furthermore, these experienced sellers include Carfax in their own TV, radio, newspaper and online advertising to attract customers and build confidence.

Stock Cars Customers WantThe market for used vehicles can be

diverse and unpredictable, but you can still find cars in your area that sell consistently. You just need to know where to look. Begin by looking within at your core inventory. Once you know which cars customers want to buy, you can maximize the potential of your business by stocking more of those valuable units.

Remember, customer preferences can change quickly in this business. The last thing you need is to be stuck with carrying costs for unpopular cars that won’t sell. Prepare by regularly checking the performance of your inventory. Try using inventory management systems and vehicle history to help choose cars. These proven tools can help dealers identify vehicles that regularly sell for the most profit in your area. You can sell faster, improve your buying power and make better decisions for your business by arming yourself with information about your core inventory cars.

BY D E N N I S C A R E Y A N D C H A D G O O D S O N

value

THE MARKET FOR USED

VEHICLES CAN BE DIVERSE AND UNPREDICTABLE,

BUT YOU CAN STILL FIND

CARS IN YOUR AREA THAT SELL CONSISTENTLY.

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An Independent Perspective: Surviving the

Used-Inventory Crunch

more difficult to acquire at a price that won’t completely erase store margin.

Underwood offered what veteran dealers readily understand, “Small cars are easy to sell, but the problem is they have very thin margins.”

Is the Inventory Solution Online?When asked about whether online

avenues would be a better route to find vehicles that would turn, Underwood gave a mixed assessment.

“The online route obviously gives you more coverage area but the problem is that you’re buying cars in different locations. If you only have one or two in each area, you’ve got to try to group them together to get the transportation done in time,” Underwood explained.

“Buying a truckload is hard to do unless you’re paying a considerable price for them. Sometimes, you’re only buying maybe two in Dallas and one in Hattiesburg (Miss.),” he continued.

“If you’ve got 10 cars scattered across the Southeast, you’ve got a problem trying to get them back in a reasonable time or getting a good price on getting them back,” Underwood went on to say.

Even if logistics can be difficult, Underwood has seen plenty of online activity while he’s been at a physical auction.

“I think a lot of dealers are buying online. I’ve seen dealers from all across the country bidding on cars. That’s the advantage, you have the opportunity to buy either in lane or online,” Underwood observed.

Franchise Stores Feeling the Pinch, Too

While Underwood is a veteran independent dealer and is at the top of NIADA, he doesn’t think franchise stores are having any easier of a time finding inventory.

“The old stories back in the day were the new-car dealers were getting the trade-ins so they don’t have as difficult a time. But I don’t find that to be true,” Underwood told Auto Remarketing. “I think the new-car dealers are not getting the trade-ins that they got in the past. And if so, they’re not the quality of car that they’re used to because now they’re retailing high-mileage cars on franchise dealer lots now more than ever.

“New-car dealers are standing toe-to-toe with independent and they’re bidding on these cars, too. And they’re paying the price,” he acknowledged. “You may find in many cases where a franchise dealer will stay a little longer and pay more for it. But they’re still facing the same dilemma.”

Buyers Still in the MarketThough inventory managers are

struggling to scour auction lanes to find turn-ready models, Underwood thinks

buyers are still coming to lots or shopping online, ready to make a deal.

“It’s not a problem with traffic. The problem is how we’re paying the price for cars. People come in and they want to buy cars. They’re looking to do business. That’s not the problem,” Underwood insisted.

“And it’s not isolated to a certain location. People are coming into the stores to do business. The problem is we all have a small inventory to choose from and our margins are now less than they’ve ever been because we’re paying more for the cars,” he continued.

“We’re not seeing people necessarily complain so much about the price of the car. The problem is getting them financed and getting them to put enough down. It’s a three-ring circus – the finance company, the dealership and the customer – and we’ve all got to agree upon what’s a fair value,” Underwood added.

What If Gas Prices Drop?Analysts also have been projecting

fuel costs eventually will dip from the nationwide average that’s at about $4 per gallon. Should gas prices fall significantly, dealers could be left in the lurch with lots of fuel-efficient models because as Underwood said, “Americans don’t like small cars.”

NIADA’s president conceded, “The biggest fear right now is you buy a car at a certain value and, by chance, tomorrow the market just drops. Now when you’re retailing that car, you’re cost base is retail-plus. You can lose money on 30, 40, 50 cars on the lot. That’s the biggest fear right now.

“Falling gas prices would take the pressure off the small cars,” Underwood predicted. “We all know we’re paying too much for small cars based on the emotion of good gas mileage. There’s no reason why the 2010 Hyundai Accent should bring $10,500 or $11,000. You could probably buy that car new for not much higher than that.”

Advice to Fellow DealersUnderwood has been instructing his

lot personnel to use a strategy that could work for any size dealership – franchise or independent.

“You have to get cars that are as close to retail possible, but you’re going to pay the money for it,” Underwood asserted. “Back in the old days, you could go out and replace a car tomorrow. Today you probably can’t. You need to make money when you sell that car.

“You’ve got to make sure you buy right,” he went on to say. “There’s an old saying in the car business: You make your money when you buy the car; you realize the profit when you sell it. If you buy right, that’s half the battle.”

R E P R I N T E D O N B E H A L F O F N I C K Z U L O V I C H , S TA F F W R I T E R , A U T O R E M A R K E T I N G

Speaking for independent dealers from Connecticut to California, Auto Remarketing caught up with Anthony Underwood this week while he was driving back to his dealership after making one of his biweekly auction trips.

The former NIADA president (his term ended in June), called the search for inventory – especially fuel-efficient models – “amazing.”

“You talk with seasoned dealers who have been in the business for 30 or 40 years and they all say, ‘It’s the worst I’ve ever seen it,’” Underwood shared with Auto Remarketing.

“The best description out here is dealers are saying it’s not any fun anymore. It staggers the imagination that we’re paying this,” Underwood added.

While returning to his store located near Birmingham, Ala., Underwood recollected his own personal experience with a gas sipper. Three months ago, he spotted a 2011 Ford Focus coming down the lane and bought it for $11,500 despite his instincts telling him that was too much.

“Now that same vehicle is $13,500, maybe $14,000. To make it worse, a 2009 Focus is bringing $11,000 now. That’s just how ridiculous it is. When’s it going to end? I don’t know,” said Underwood, who was NIADA’s National Quality Dealer of the Year in 2003.

“Most dealers have a memory like an elephant,” he continued. “We all remember what we paid a year ago or two years ago. That’s the paradox of it all. This is an unprecedented time we’re dealing with. We don’t have a playbook to know what we’re doing.”

Some analysts have tried to compare the current situation with 2008, especially in terms of gas prices. However, Underwood doesn’t believe that’s necessarily a fair assessment.

“Keep in mind, when gas spiked three years ago, people were trying to dump SUVs and you could buy them for a song. Now, there’s no escape. There’s no particular vehicle category that has a price break,” Underwood surmised.

And that especially seems to be the case with fuel-efficient models. Even units such as the Chevrolet Cobalt – a model Underwood thinks dealers used to be able to find “any day of the week” – are becoming

newsR E P R I N T E D W I T H P E R M I S S I O N BY A U T O R E M A R K E T I N G

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Want to increase your sales? Sell to women buyers.

1. SELL SAFETY! Quality and performance are givens. But safety is still a priority and concern for women. Women are often thinking about their family members or their growing family when purchasing a vehicle. For a used vehicle, they will definitely ask questions about previous owners and will review Carfax history report. Be sure you are ready to answer.

2. SELL SPACE! Women don’t have to have big cars, but like closets and nooks in a home, women want spaces or places to put and tuck stuff…sunglasses, coffee cups, luggage, shopping bags, snacks for the family and more. So, seat pockets, compartments, and cup cubbies are a must.

3. SELL MAINTENANCE! Women want the convenience of service and maintenance options. Used vehicles do come with a certain amount of risk. Including service and maintenance plans in the purchase of a used auto enhances the one stop shopping deal that women look for.

4. SELL GREEN! Not necessarily the color, but the environmental friendliness. Women do look for unique colors in vehicles and

these are getting easier to find. But for the most part, women are going green. Naturally nurturing, women are conscious of the changes in the environment and want to do their parts in keeping it clean and safe. Share knowledge about the used vehicle’s emission, miles per gallon, and more.

5. BE PATIENT! When a woman enters your site or lot, she is expecting to begin a mutual relationship with you, one of trust and loyalty. She wants your name, your attention and her questions answered. She may need two or more visits before a decision is made. So get ready to treat her well. Hopefully she will buy and love her newly purchased vehicle. For added value, she’s going to remember the treatment and tell all of her friends.

These selling tips are by no means in any order of importance. They are all equally important when marketing your vehicles to women.

BY S Y E D A Z A MSyed Azam is the president of AutoJini.com, a leading provider of website solutions for auto dealers. Contact him at [email protected] or 515-232-2024.

The issue isn’t about whether or not women are buying vehicles. They are. According to all the latest industry research, women even play a lead role in vehicles purchased by most men. And women are buying used vehicles as much as new ones. But don’t presume a woman’s expectations or process will change.

When it comes to a new or used vehicle, women’s expectations are pretty much the same. Just like men, women expect a newly purchased auto to perform well. And like men, women search for the best quality their money can buy when purchasing a used vehicle. So where’s the difference?

Well, one fact you might first consider is women do lots more homework and planning than men prior to a vehicle purchase. They may not be ready to purchase on the first visit. Consequently, you might want to practice patience when marketing to women.

H E R E A R E FIVE QUICK SELLING TIPS T O H E L P Y O U M A R K E T Y O U R V E H I C L E S T O W O M E N :

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S O , W H A T I S T H E B O T T O M L I N E ? L I K E A N Y S A V V Y C O N S U M E R , A U T O D E A L E R S W A N T O P T I O N S .

Dealers Want Better Auto Transport Options from Auto Auctions

Results from ShipCarsNow’s 2011 survey of independent and franchise auto dealers show dealers want more auto transport options when buying vehicles online from wholesale auto auctions.

Preliminary results show the number of dealers who buy pre-owned vehicles via online auction is steadily increasing year over year, and those auctions are increasingly located farther away from the dealership. More dealers report they are expanding their search for wholesale autos

nationwide. In 2009, 75 percent of dealers reported they usually sourced inventory within 50 miles of their dealership and only 14 percent were shopping as far away as 500 miles or more. In ShipCarsNow’s 2011 dealer survey, 35 percent of dealers reported they shop nationally and more than half of the survey respondents said they planned to buy more inventory online in 2011 compared to 2010.

So, what does this mean for online and simulcast auto auctions? ShipCarsNow reports 63 percent of dealers

surveyed said they think online auto auctions should improve transportation options. Almost half said they would purchase more vehicles online if auctions improved auto transport services and increased reliability of condition reports. Suggestions that ranked highest included providing the transportation cost before or during the bidding process and the ability to see discounts for multiple vehicle shipments, as well as the ability to combine vehicles with other dealers’ for economies of scale. Dealers also reported they’d like to see multiple auto transport bids, and that price and reliability are key requirements for any auction offering auto shipping services.

So, what is the bottom line? Like any savvy consumer, auto dealers want options. They want to shop where they want, and when they want. They want vehicles delivered safely, timely and economically. And they want the transaction process to be intuitive and hassle-free. Innovative auto transport companies and online auto auctions need to collaborate to develop the tools and services that dealers need.

For more information about ShipCarsNow’s 2011 Dealer Survey, visit www.ShipCarsNow.com; the complete survey report will be available soon.

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BY M I C H A E L D . J A C K S O Nweb

Reviews containing no negative information or very little positive information can become a key factor in the decision-making process of where customers will buy vehicles. Make sure the scale is tipped heavily in your dealership’s favor by ensuring you have a dynamic presence.

Business Directory ListingsThese are a great and free way to

ens ure potential consumers can see your business name repetitively when conducting research on your dealership. Whether you’re an established business that’s been around for awhile or a recent startup that wants to look that way, being in a directory will add valuable online visibility for your dealership. Most all business listings allow you to insert your site’s URL, and if you need to battle any negative online reviews, a good way to combat those remarks is to include the URL directly to a page in your site dedicated to positive client testimonials. When setting up a business profile listing, make you sure keep a clear record of the username and password to your profile in case you need to edit any of the content at a later date.

News ReleasesNews releases are very commonly

overlooked as an advertising medium, yet this is a great tool to utilize for building your online reputation for free. Releases can be picked up by many outlets and redistributed in various media channels without you having to do all of the legwork. If you help support local charities, non-profit organizations or even donate to a local cause, make sure to send out a release about your business’s philanthropic efforts. Releases can also give you great content to use in your social media and blog postings, and if your dealership uses social media, having good content to use is like gold.

Social MediaSocial media pages are becoming

more popular for consumer research and reviews because they show up in the search engines when your consumers are conducting their online research. Social media can give a snapshot and insight into the dealership as well as its employees. Most businesses’ social media pages do have friends or followers that are customers, and this gives them the ability to contact them to find out how they feel about your business.

Displaying customer testimonials on a weekly basis will allow you to always make sure positive content is displayed on your social media outlets so when your consumers find your dealership’s page, it’s reinforcing your reputation. Setting up a schedule of what you post on each day can make it easier to keep updated, too; plus, it will allow your employees to follow along.

A schedule could look like this example:• Monday: Client Testimonial• Tuesday: Prize Giveaway Winner• Wednesday: Sales Announcement• Thursday: News Release• Friday: Photo/Video • Update

BlogsBlogs are an inexpensive to set up

and are quick and easy to maintain. They can provide easy access to dealership news and information for your consumers, and they help make your dealership appear more accessible and authoritative. Even if you have an internal blog in your site, having an external blog for your company provides yet another channel to help grow your reputation and footprint to spin additional positive aspects of your business.

Linking TogetherFrom websites, paid listing services,

free online listing services and social media outlets to blogs, business directories and news releases, building your online footprint can be easy. Linking them together can create more value than you can imagine. It’s no secret link-building for your site can add positive SEO factors. The more links that point to your site, the higher the site will climb in the search engine rankings. Linking between your other online outlets is also equally important.

If you have a page dedicated to client testimonials or a section pertaining to them in your social media, add links in your business directory listings to allow those researching your company to find them.

Michael D. Jackson is CEO and co-founder of Auto Search Technologies Inc. (www.autosearchtech.com). For more information, contact him at 949-608-0809, 949-892-5322 (fax) or [email protected].

The Web is considerably immense, and there are many places to take into account when advertising online.

In this day and age, having a dynamic web presence versus just a web presence is important. Traditionally when a dealership thinks of online advertising, the first thing that primarily comes to mind is the cost. You can’t traditionally get anything in the world unless you pay for it, or can you?

There are many free resources available to auto dealerships for online advertising that are rarely used to their fullest potential. Sometimes, these avenues are actually the ones that are the most important when it comes to building and growing your online business dynasty.

Once your potential customers have researched and found the desired vehicle they wish to purchase, you’d be surprised how much research they will conduct on your actual business to learn if you’re a creditable dealership via sites such as RipOffReport.com, DealerRater.com, and CarDealerCheck.com. Consumer reviews play a valuable role in researching whether they should buy from your dealership or not. The number one resource for a consumer is on the Internet. This is traditionally started by the consumer conducting a search for the name of your business by a search engine of their choice (Google, Bing, Yahoo, Ask, Lycos). The results displayed within the first several pages of results will ultimately play a large decision during the consumers buying process.

VSFree

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Green Earth Technologies Making Green Motor Oil and Cleaning Products

It’s easy to get burned out on green products being advertised to the auto industry and consumers, and it is important to do a little bit of homework to make sure the company isn’t merely “greenwashing.” Green Earth Technologies which domestically produces G-OIL, 5W-30 Motor Oil – an API certified bio-degradable, bio-based, full synthetic green motor oil – the product has been clean and legitimate enough to end up on shelves at Walmart and The Home Depot. Its G-Clean Concentrated formulas now carry the Eco Options label, The Home Depot’s certification for products that meet certain environmental performance criteria for cleaning. Every product with the Eco Options label has less of an impact on the environment than competing products, the company says. Other green auto products offered by the company include G-Clean Glass Cleaner with a plant-based formula, Bio-Synthetic 2-Cycle Engine Oil, and G-Clean Mold & Mildew Stain Remover, a concentrated dissolvable detergent.

REPRINTED - AUTOMOTIVE DIGEST

Lescota has conducted workshops and educational seminars for General Motors, Ford, Chrysler, Honda and many other automakers.

Joe Lescota, Northwood University’s automotive marketing department chair, was named the winner of the 2011 Ring of Honor award at the National Independent Automobile Dealers Association (NIADA) 65th Annual Convention & Expo at Caesars Palace last night. Inductees to NIADA’s Ring of Honor are a prestigious and honorable circle of men and women who have dedicated their careers to the automobile industry, according to Michael R. Linn, NIADA’s CEO.

Lescota, who has more than a quarter-century of retail automotive experience, is the instructor for NIADA’s Certified Master Dealer Program and sits on the board of trustees of the NIADA Foundation.

“He has filled every management position within all departments of various dealerships, including dealer operation. He quickly gained a reputation for developing

innovative management techniques leading to reduced employee turnover and increased customer retention and satisfaction,” Linn said. “Joe is a person for whom I have great admiration and respect.”

Lescota has conducted workshops and educational seminars for General Motors, Ford, Chrysler, Honda and many other automakers. He served as the program director for the Automotive Satellite Television Network and helped to introduce college credit courses into dealerships nationwide via distance learning.

In addition, Lescota, was named Man of the Year by the Association of Finance and Insurance Professionals in 2006 and has received Northwood’s Faculty Excellence Award five times in the last decade. He is the twenty-first inductee to the NIADA Ring of Honor.

J O E L E S C O TA ( L ) M I K E L I N N ( R )

2011 Ring of Honor AwardNIADA HONORS

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A recent U.S. Supreme Court decision marks a turning point for auto dealers in the use of arbitration agreements to avoid class action lawsuits and class arbitration. On April 27, the court ruled under the Federal Arbitration Act such agreements are enforceable, helping dealers avoid lengthy legal battles with hundreds or thousands of disgruntled consumers.

In position papers, press releases and letters to Congress, numerous state and metro dealer asso-ciations had pointed to arbitration agreements with waivers of class arbitration as a means to quickly, ef-ficiently and cost-effectively resolve consumer dis-putes in the place of class-action lawsuits. Arbitra-tion agreements that include waivers of class-action arbitration can help dealers avoid a tarnished reputa-tion, a decreased customer base and millions of dol-lars in damages and legal fees resulting from a class-action suit. The associations have also contended that the agreements benefit consumers by helping them get complaints taken care of more rapidly and saving them the cost of attorneys’ fees.

Recent cases highlight the favorable impact the Su-preme Court decision could have on the industry. For example, a California dealer made headlines in Feb-ruary when a Court of Appeals judge ruled against it in a class-action lawsuit dating back to 2007. The suit was tied to the dealer’s practice of backdating a sales contract and including insurance in the purchase price of the vehicle. The Court of Appeals’ decision will allow 1,500 auto buyers to have their purchase contracts rescinded, which is estimated to cost the dealer up to $30 million. And in March 2010, a Mis-souri dealer group settled a class-action lawsuit tied to document preparation fees for $8.8 million. That suit was filed in 2008.

A well-crafted arbitration agreement that avoids resolving disputes in court and prohibits class ar-bitration can help dealers avoid legal landmines like these. Because the Supreme Court’s decision removes a significant obstacle to the enforceability of these agreements, independent auto dealers who have been uncertain about using them in retail in-stallment sales contracts or leases may be inclined to give them a second look. Those dealers already using them have a reason to feel more confident that they will be enforced if challenged in court.

BY CHIP ZYVOLOSKI Chip Zyvoloski is senior attorney for indirect lending at Wolters Kluwer Financial Services. For more information, visit www.wolterskluwerfs.com/indirect.

Supreme Court Ruling Provides Clarity On Arbitration Agreements

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