Managing Car Dealer Advertising Posts

A search engine bar with magnifying glass that signifies car dealer advertisingA key component of car dealer advertising is the information dealers make available online. What dealers present on their websites and digital advertising to potential customers can directly impact future customer interactions. If a car buyer can’t see any pictures or read any details about a vehicle’s history, they’ll likely move on. To avoid that outcome, dealerships must put care and consideration into their digital advertising posts.

Generating Leads and Exposure
Placing listings on sites like Kelley Blue Book, Autotrader or even doing a campaign with Dealer.com are some of the most popular ways to generate leads. In this form of car dealer advertising, it’s important to view posts as more than just lead generators. They can also create great exposure if executed properly.

Creating Posts That Achieve Results
To get people in the door for dealership visits, it’s important to create posts that resonate. Good car dealer advertising posts focus on the following areas:

  • Exceptional Photos: Photos are the first impression a buyer has of a vehicle. Not only do these pictures need to be clear and of good quality, but they need to show detail. Customers expect to see every inch of the car in these photos, and are looking to see everything from the tires to the space behind the driver’s seat. They don’t bother with dealership visits until they are confident in the merchandise.
  • Quality Content: Every used vehicle has a backstory. Car buyers want, and need, to have information about the vehicle’s history. Don’t leave out the details. What’s the current mileage? Has all maintenance been documented? What special features are available? Did the previous owner smoke? Providing details tells the story of the vehicle, and shows transparency to potential customers.
  • Accessible Contact Information: Let’s say a customer liked the photos and the description on a particular posting, and now wants to take a look at the vehicle in person. Dealers help to facilitate an easy buying process by making dealership contact information easily accessible. Including multiple contact methods will also increase chances of Without accessible dealership contact information, customers will move on.

When these ads turn into in-person visits, dealerships will need to confirm where the lead came from. Be sure to coach front-line team members to ask customers,“Where did you hear about us?”

Car dealer advertising is only as effective as the effort put into the photos and descriptions of each post. Without captivating photos and a detailed description, buyers might pass on their next vehicle. To turn that search for a vehicle into a buy, or at least a visit to the lot, dealers need to spend a few extra minutes on their posts. This can pay off quickly and creates long-term relationships with buyers who trust their dealerships.

Three Reasons Dealers Should Attend the 2017 NIADA Convention & Expo

speaker at NIADA conference and expo presenting to crowdDealers looking to improve their dealership operations will often need to seek out reputable sources for industry information. With constantly changing industry conditions, it’s important for dealers to stay in tune with best practices and network with other dealers. One annual opportunity to get an industry refresh is the National Independent Automobile Dealer Association (NIADA) Convention & Expo in Las Vegas. For dealers who are on the fence about registering for the NIADA Convention & Expo, here are three reasons to consider attending.

Training and Education
One of the major highlights of the convention is the number of educational sessions available. Industry experts and thought leaders will speak on a variety of topics relevant to automotive dealers. Subject matter for these sessions will range from topics on sales and leadership, technology, overall compliance to topics specific to BHPH dealers. The most frequently cited “don’t miss” experiences of the conference are the compliance breakout sessions. These sessions dig in deep to current and upcoming legislation that affect dealer business.

Meet Dealer Partners
Dealers will frequently use other tools and solutions to solve individual dealership issues. At the convention, dealers will have the opportunity to meet face-to-face with vendor representatives and learn about the various solutions they offer. While one dealership won’t utilize every service available, dealers can take the time to explore the variety of options available.

Network with Other Dealers
Each day of the conference will be spent with other dealer colleagues. With so many dealers in one place, auto dealers will be able to discuss shared struggles and best practices, which can lead to a shared knowledge base, community and sounding board for new ideas.

Get an industry refresh, learn from other dealers and network with potentially valuable dealer partners at the National Independent Auto Dealers Association Convention & Expo in Las Vegas.

NextGear Capital Wins Indianapolis Symphony Orchestra Award

Patty Turner accepts "Biggest Fan" award on behalf of NextGear Capital from the Indianapolis Symphony Orchestra

Patty Turner accepts "Biggest Fan" award on behalf of NextGear Capital from the Indianapolis Symphony OrchestraThe Indianapolis Symphony Orchestra (ISO) recently held their Donor Volunteer Appreciation Concert at the Hilbert Circle Theatre; a free, private concert held annually to honor donors, sponsors and volunteers of the ISO. Prior to the concert, awards were handed out to recognize patrons and donors for exemplary support of the ISO in the last year.

This year, NextGear Capital was honored with the Biggest Fan award which recognizes an individual or company who, in a short amount of time, has exhibited enthusiastic support of the ISO through sponsorship, promotion and exposing new patrons to the programs. Patty A. Turner, Sr. Director of Internal Events & Community Relations, accepted the award on behalf of NextGear Capital from Gary Ginstling, CEO of the Indianapolis Symphony Orchestra.

Community outreach is one of NextGear Capital’s core company values and its commitment to our local, national and international community is demonstrated through sponsorships, in-kind donations, community partnerships, and most importantly, through team member volunteerism. NextGear Capital strives to be a positive force in our communities and is committed to supporting the causes that mean the most to its team members.

Founded in 1930, the mission of the Indianapolis Symphony Orchestra is to inspire, entertain, educate and challenge through innovative programs and symphonic music performed at the highest artistic level. The ISO began with volunteer musicians and over the years grew to become one of the nation’s most renowned orchestras, having the opportunity to entertain all over the United States, on television, the radio and in over a dozen countries. In addition, the ISO was the first orchestra to receive a letter of commendation from a president and still holds the world record for appointing the youngest conductor.

NextGear Capital began a partnership with the Indianapolis Symphony Orchestra in 2014 with an associate sponsorship at Symphony on the Prairie. In the second and third years of partnership, NextGear Capital started bringing larger groups to the Prairie, finding value in using the sponsorship as a unique way to entertain team members and their family members.

This year, NextGear Capital is planning to combine its annual picnic for team members and their families to enjoy its sponsored Symphony on the Prairie concert, “The Music of Michael Jackson” on Saturday, August 26.

Dealership Floor Plans: What is the right amount of capital?

Dealer using First Gear

dealer on car lot using phone to manage dealership floor plansHaving access to the right amount of capital is essential for a dealership’s business to run profitably and grow efficiently. Dealerships stay accountable and profitable when they have the correct amount of credit on their dealership floor plans. Not having enough, or even having too much capital on hand, can lead to issues and problems for a dealership down the road. So how can a dealer find out if they have the correct amount of capital on hand?

Learn about what happens if a dealer has too much or too little capital on hand.

A simple and effective formula makes it easy for a dealer to learn how much capital they truly need. This formula simply entails taking a dealer’s cost of goods sold, divided by yearly lot turns. Please note that the number used for a dealer’s cost of goods sold means the total cost of inventory for a year, which includes reconditioning costs.

Depending on a dealer’s current inventory and sales goals, the dealership floor plans credit amounts will vary. Let’s work through a few examples of how this formula can play out for a dealer.

If a dealer’s cost of goods sold is $500,000 to support $625,000 in sales, and assuming a dealer has five turns a year, this dealer should only need a $100,000 line of credit to aid dealership efficiency and profitability.

Let’s try another situation. Assume a dealer’s cost of goods sold is $2 million dollars to support $2.5 million in sales. If this dealer has six turns per year, this dealer should only need about $333,000 to ensure a balanced amount of capital to run their dealership efficiently.

Use this formula to calculate how much capital your dealership needs. How do your dealership numbers line up? Use this formula in conjunction with the formulas found in our “Three Floor Plan Finance Formulas Every Dealer Should Know” to gain a full picture of your dealership’s balance of inventory, capital and sales goals.

3 Mistakes Dealers Make When Buying Auto Dealership Inventory With Cash

Some dealers believe purchasing inventory with cash is the best option for their dealership. Keep in mind auto dealership inventory must often be purchased with a focus on the type of inventory that will sell, initial cost, in addition to a careful eye on overall dealership expenses. When the following three mistakes occur, it becomes clear that using a dealership’s own capital to purchase inventory is not the best choice for dealers.

#1: Dealers fail to assign a value to the cost of funds
Dealers who purchase auto inventory using their cash often fail to assign a value to the cost of funds. That is, dealers fail to consider all of the factors that contribute to the cost of using their own cash to purchase inventory. By using their own capital or cash to purchase inventory, dealers are tying up the use of their funds. This means they can’t use their cash on hand for any other expenses. In addition, since those dollars are locked into dealership inventory they only get their initial investment back when the vehicle sells above the initial purchase price.

Consider what those funds could be doing. When a dealership uses floor plan financing to make inventory purchases, their capital is still available to them to pay for other dealership expenses.

#2: Dealers forget that inventory depreciates in value
Would an investor purchase $1 million in stocks knowing that the next day it would be worth five or ten percent less and that the initial stock value would never return? Of course not. But when auto dealership inventory is purchased with cash, that’s the exact investment a dealer is making.

Those who buy with cash will often hold onto vehicles long term–they can’t sell them and don’t want to take a loss. So, dealers hold on to inventory. Though this action doesn’t seem like it would lead to a loss, the lack of discipline on that initial cash investment leads to loss.

The longer a dealer holds on to a piece of inventory, the more that inventory depreciates. If a dealer purchases inventory that sits on their lot for over a year, not only does the end sale price have to make up for how much the vehicle depreciated, but it also needs to be enough for a dealer to cover any expenses in addition to profit.

This is perhaps one of the most common mistakes dealers make when purchasing inventory. Purchased inventory depreciates more the longer it sits on a dealership lot. However, when a dealer uses a floor plan, dealers don’t have to use their own capital to purchase inventory and can use their cash on hand for other expenses.

#3: Dealers forget to be disciplined in purchases
Dealers who do not make wise buying decisions can get stuck with aged inventory. Funds are tied up in inventory and tough to liquidate at a profit. In addition, without other sources of capital or lines of credit, these dealerships are limited in what they can buy at peak consumer buying times. That can create situations where they are leaving opportunities on the table. Discipline in purchasing and knowing the type of inventory that will sell can mitigate aged inventory.

When using someone else’s money to make investments, decisions are made more efficiently and with a better eye on profit. For today’s investor in auto dealership inventory, that has to be the bottom line.

NextGear Capital Closes $400 Million Securitization

Next Gear Capital in Carmel Indiana.NextGear Capital, a Cox Automotive brand, announces that the NextGear Floorplan Master Owner Trust successfully completed the sale of $400 million of privately placed 144A Asset-Backed Notes, Series 2017-1. The company’s sixth successful securitization transaction, which further broadens the investor base, included the issuance of $400 million of “Aaa/AAA/AAA” rated Class A Notes.

“Since our inaugural bond securitization in 2014, NextGear Capital has been a regular issuer in the term markets as we support the substantial growth of our lending platform,” said Dave Horan, NextGear Capital’s chief financial officer. “We continue to be delighted with the level of interest from current and new investors, as well as the bond market’s overall receptivity to our business model.”

NextGear Capital is the most comprehensive provider of lending products and support services for the automotive remarketing industry. It provides $20 billion in annual funding to more than 22,000 auto dealers throughout the United States, Canada, United Kingdom, and Ireland.

Utilizing the Right Amount of Capital From Dealer Floor Plan Providers

Dealer floor plan providers are typically the easiest way to access additional capital for a car dealership. However, access to the right amount of capital to purchase inventory is essential for a dealership’s business to run efficiently. Not having enough, or even having too much capital on hand can sometimes lead to problems for a dealership down the road.

Not Enough Capital
Not having enough capital is a common problem for automotive dealers. A lack of capital often means that a dealer is not able to purchase enough inventory to sustain their dealership. The lack of cash flow means that money is tied up in inventory and is depreciating, and the rest of it is often tied up in overhead. When dealers don’t have enough capital they will frequently turn to dealer floor plan providers to bridge that capital gap.

The line of credit initially given to a dealer by a floor plan company depends on a number of factors. However, a good floor plan company will continually work with a dealer to make sure they always have the appropriate amount of capital. However, on occasion, a dealer might have too much capital available.

Too Much Capital
Having too much capital can also lead to a number of problems. If they are not careful, too much capital could put dealership buyers in a position where they make bad decisions. They might not carefully purchase inventory tailored to their lot simply because they have the capacity to purchase a greater number of units.

Having excess inventory that doesn’t address market demand can cover up for sloppy purchasing. Which in turn, can make it a difficult problem to identify and resolve.

An excess amount of inventory can also cause the dealership sales team to become lax, since the extra inventory reduces the focus on aged units.

Just Right
Dealerships stay accountable when they use the correct amount of capital. At NextGear Capital, we typically recommend a 70/30 mix of a dealer’s floor plan and cash on hand, respectively. A balanced amount of capital means a dealership has enough on their floor plan to purchase new inventory, and enough cash on hand to ensure overhead is covered.

Keeping this balance is essential for dealers wanting to operate a profitable and efficient dealerships. Dealers who are concerned about their current floor plan balance should contact their dealer floor plan providers to ensure a balanced amount of capital.

NextGear Capital Made No Excuses in March

Throughout the month of March NextGear Capital, in partnership with Cox Automotive, holds their annual “No Excuses” campaign to encourage team members to take advantage of the company’s volunteering-on-the-clock policy. Over the course of the month, team members across the nation volunteered in activities both in and out of the office to help make a difference in their communities.

NextGear Capital had a goal of reaching 1,500 hours of volunteer time for the month. This goal was shattered when over 2,225 volunteer hours for the month of March were logged, a 148 percent increase over the original goal. In addition, volunteer participation increased 109 percent.

Some of these NextGear Capital volunteer hours were spent contributing to a number of organizations which include: The American Red Cross, Special Olympics Indiana, St. Jude Children’s Research Hospital, Gleaners Food Bank and Big Brothers Big Sisters of Central Indiana.

NextGear Capital team members were eager to volunteer. “It’s easy to get wrapped up in the daily grind of work and our own personal lives,” said Lisa Long, North Central Regional Director. “This opportunity was an excellent reminder that while it’s important to help yourself, it’s even more important to help others.” Long spent some volunteer time making no-sew blankets for St. Jude Children’s Research Hospital. She said, “It was a fulfilling experience knowing that I was giving warmth and comfort to a child going through a rough time and that this one blanket will bring a smile to a little boy or girl’s face.”

 

The results of this year’s No Excuses campaign truly speak to NextGear Capital’s commitment to community.

  • 49 pints of blood were donated to the American Red Cross
  • $2,747 raised for Special Olympics Indiana
  • 48 no-sew blankets were hand crafted for St. Jude Children’s Research Hospital patients
  • 10,392 meals packed in one hour and six minutes benefitting Rise Against hunger
  • 200 burritos made and packaged for the homeless youth of Outreach Inc.
  • 254 dog toys and 93 catnip toys made for the animals at the Humane Society for Hamilton County
  • 22 team members inspected and sorted 10,194lbs of food which will go towards feeding 8,485 food insecure families in Central Indiana
  • $10,703 worth of coupons were cut, sorted, counted and shipped to a Naval Base in Yokosuka, Japan for military families to use
  • 259lbs of nonperishable food items donated to St. Mary’s Food Bank Alliance
    1 home framed for Habitat for Humanity

NextGear Capital is always excited to help others in the community, and the team is already looking forward to shattering goals for next year’s No Excuses campaign.

Keyword Tools for Digital Used Car Dealer Advertising

Dealer using online toolsDealers know that for a majority of car buyers, a customer’s journey to buy a car from a dealership begins online. According to a study from Autotrader and Kelley Blue Book, car buyers spent 60 percent of their time online in the vehicle purchasing process. Because of this, used car dealer advertising is adjusting and pivoting to adapt to the role search plays for a car buyer. Dealers are now spending marketing dollars to increase their presence in the search advertising space.

In order to ensure that digital used car dealer advertising will show up in front of potential customers, it’s essential to do proper keyword research. Google recently released findings that determined five micro-moments and the five questions that car shoppers will typically ask themselves before a car purchase. Car shoppers will frequently ask themselves: Which car is best? Is this the car right for me? Can I afford it? Where should I buy it? Am I getting a deal?

Dealerships looking to align their search strategy with these top questions car shoppers ask can turn to a few different resources to aid in their keyword strategy.

Analytics
Website analytics are essential in order for dealerships to learn how potential customers reach, and what potential customers look at, on a dealership’s website. Depending on the type of analytics a dealership website may use, there may be opportunity to see keywords users searched for before visiting. Check out the different reports available on the dealership’s website analytics platform. What keywords were searched? In addition, note how potential customers end up visiting the dealership’s website. What did they look at? Knowing the answers to these questions will help inform a dealership’s paid search keyword and subsequent campaign strategy.

Paid Search Keyword Planners
Common search engines and their search advertising platforms will often have a keyword planning tool. These tools can show search volume data and trends in addition to similar or related keywords. Dealers using these tools will also be able to see how competitive it might be to own a particular keyword.

A cohesive strategy for used car dealer advertising can not only mean a dealership earns brand awareness, but also potential leads and customers. Using these tools and resources together will allow dealerships to effectively use their marketing and advertising budget with measurable results.

Get MORE with NextGear Capital’s New Website

Dealers can look forward to new features Image of NextGear Capital's new website where dealers can learn more about how to efficiently use their floor plan line of credit and enhanced capabilities with the launch of the new and improved NextGear Capital website. Core website functionality will remain the same, but improved design and enhanced services and resources means that dealers will get MORE out of their visits to the NextGear Capital website, and in turn, their floor plan line of credit. Highlighted below are just a few of the new features available via our new website.

Improved Access to Dealer Resources
Dealers need more than just a floor plan line of credit to be successful. Accessible resources exploring dealership best practices and industry insights ensure dealers are up-to-date on the latest industry news and trends necessary for dealerships to thrive. This redesign ensures NextGear Capital webinars, industry insights, case studies, videos and white papers from industry thought leaders are easy to access and explore.

Simple To Use Auction Finder
Want to find a new place to source inventory? NextGear Capital’s new and improved auction finder tool reveals auction locations locally and around the country. Search by location or name and state to simply find and view auctions in a dealership’s surrounding areas.

See How Other Dealers Use NextGear Capital
How do other dealers do MORE with NextGear Capital? A section of the new website is dedicated to individual dealer testimonials. Learn how other dealers use a NextGear Capital floor plan line of credit to build their businesses, improve dealership cash flow and purchase more inventory.

Our enhanced and improved website means that it is easier for dealers to find floor plan financing information when, and where it is needed most. Get MORE out of the time you spend on the NextGear Capital website.

As you use the new site, please do not hesitate to share how we can continue to improve the online experience. We value and appreciate your input. Please provide any feedback you may have here.