Path to Becoming an Auction Super Seller

While dealers might not want to get rid of inventory that could eventually be sold, sometimes it makes sense for dealers to get rid of unsold inventory to make the best use of their dealership lot space. In order to move a unit that’s been sitting on the lot for a while, a dealer could take it to sell at auction.

Click here to learn more on why a dealer might want to get rid of some inventory at an auction.

How can dealers successfully sell at auction?

Sell at Auction: Path to Becoming a Vehicle or Car Auction Super SellerDealers need to make sure a number of items are in order for a unit to successfully sell at auction.

Pre-register vehicles a week beforehand

Dealers should pre-register the vehicles they are interested in selling at auction a week beforehand.

Pre-registering vehicles allows for full marketing support. If sale day is on a Wednesday, dealers can’t expect their vehicles to get registered for the sale and fully marketed if they bring units in Tuesday at 5 p.m. The auction needs time to register the vehicles, to put images and information on their website, or on their simulcast or pre-sale reports.

If dealers pre-register their units, it gives other dealers time to preview the vehicles they might be interested in purchasing. Buyers have a limited amount of time to check out a car while it is in an auction lane. Many dealers will often walk the auction lot beforehand and make a list of the cars they are interested in bidding on. If the unit isn’t there when these dealers walk the lot, that vehicle won’t be seen by potential buyers.

Price to the market

Dealers need to be prepared to sell and to not take inventory back. In order for that to happen, dealers need to have reasonable expectations in terms of pricing when they bring vehicles to auction. If a dealer has a unit on the floor for $10,000 and the market value is $8,000, that dealer can’t expect to get $10,000 out of that unit. Reviewing the Manheim Market Report helps dealers find an accurate market value for the vehicle they are trying to sell.

Make sure all units are front line ready

By the time the auction rolls around, dealers need to make sure their units are front line ready, which doesn’t just mean that vehicles are sparkly clean inside and out. To be front line ready, each dealer also need to make sure their units appear in the correct lanes, and have condition reports and titles in order by sale day.

Some auctions have lanes with certain categories attached to them, for example a “new cars” lane or a “$4,995 and under” lane. If any units fit within an auction lane category, dealers need to make sure those units get to the appropriate lanes.

Dealers have to disclose all issues associated with a particular vehicle in order to be represented properly. If those issues aren’t disclosed, dealers take the chance of having the vehicle brought back. Lots of buyers, especially online buyers, won’t buy unless the condition report is with the vehicle. If dealers disclose everything, then they can build their reputation up as a credible seller, especially for online buyers.

Having titles present makes for a smoother overall transaction. If dealers are using a floorplanning company, ask the floorplanning company to send titles for pre-sale.

Represent your own vehicles

Some dealers don’t like to represent their own vehicles. If the auction, or someone else, represents a vehicle for a dealer, they might not necessarily get the highest bid possible. This isn’t always the case, but typically when others represent vehicles for dealers they will sell the unit if they get bids within $500 of a dealer’s asking price. Sometimes there will be a counter offer, but it can get lost in the shuffle because of how fast the auction buying and selling process is. Dealers that represent their own vehicles can make a split second decision on whether or not they want to accept an offer that may not quite meet their asking price.

Work with the auctioneer

Auctioneers can’t read a dealer’s mind. If a dealer is on the block and wants a certain amount of money for a unit, that dealer should give the auctioneer an idea of the price they need for that vehicle. That way the auctioneer has an idea of where to start bids. Unless dealers tell them, auctioneers won’t know how much a dealer needs from a particular vehicle.

Become an Auction Super Seller

Selling at an auction can be a great way to switch up inventory and optimize lot space. Keeping these tips in mind puts dealers in a great position to successfully sell units at auction.

VP Reflections | The NIADA National Leadership Conference and Legislative Summit

What an excellent start to the NIADA Leadership Conference and Legislative Summit. I am proud to be part of an industry that is so passionate about legislative involvement, continued growth and the well-being of independent dealers.

Last night we heard from a number of senators who are truly committed to our industry and who work tirelessly to protect the interests of independent dealers. These leaders work hard to keep legislation fair for both dealers and consumers in the drafting, voting and promoting stages of bills that directly affect the automotive industry.

I am also inspired by the representation from the state independent dealer associations at this conference. For independent dealers that don’t feel like they have access to the legislative and regulatory information that most directly affects their business, state associations are a great resource for support and an excellent channel for state-specific communication.

The general session this morning started with a presentation regarding the Consumer Financial Protection Bureau (CFPB). This is definitely a hot topic, and this post can’t do justice to the information shared. However, I strongly encourage dealers to visit the CFPB website for more information about current and upcoming policy and legislation. Setting up a Google Alert with the keywords of “CFPB” and “consumer finance” will ensure that dealers will never miss a potential update.

The Associate Director of the Federal Trade Commission (FTC), Lois Greisman, presented at the second session this morning with a legislative update regarding FTC regulations.

A topic of focus touched on unfair or deceptive marketing and communications through misinformation or not disclosing enough pertinent information. Greisman made the interesting point that FTC actions not only protect the consumer, but also the dealer, against unfair competition. She spoke to the claim that dealers make regarding the robust inspection of used vehicles for sale. The danger is that many times safety issues are found during these inspections but not disclosed. Future FTC action and focus will continue on the relationship between inspection and the disclosure of needed repairs.

She also highlighted the topic of data security. Data security, the protection of consumer or personal data, is an FTC focus and is highly prioritized. “Start With Security” is a business guide presented by the FTC that provides businesses with a guide for keeping sensitive information secure.

I am honored to help provide transparency and assist by representing the field of inventory finance to the officials that shape the industry with the legislation they create, and I’m encouraged by each and every person that is passionate about improving the lives and businesses of dealers and consumers through the legislative process. Be sure to follow NextGear Capital’s social media accounts for live updates.

NextGear Capital at the NIADA National Leadership Conference and Legislative Summit

NIADA National Leadership Conference

Just as dealers need to be aware of both compliance and legal requirements for their dealership, legislators must be cognizant of the needs of their independent dealer constituents. It would be quite challenging for a single independent dealer to get the attention of a senator, government official or executive. So in order to ensure legislators fully understand dealer needs, the National Independent Automobile Dealers Association (NIADA) hosts their annual NIADA National Leadership Conference and Legislative Summit. Three NextGear Capital team members will be in attendance for the 2016 session to represent the field of inventory finance.

What is the Summit?
The NIADA National Leadership Conference and Legislative Summit is a legislative whirlwind. For three days in September, dealers and industry leaders will meet with senators and government officials to inform them on the state of the industry, sharing the needs and capabilities of independent dealers with the those responsible for voting on the bills and laws that shape the automotive industry. Attendees have the opportunity to bring to light how legislative changes will affect thousands of automotive dealers, essentially serving as the voice of independent dealers nationwide. The goal is to provide transparency and assist in shaping the industry by keeping officials abreast on what they can do to keep the needs and of dealers in mind when drafting, voting and promoting different bills that directly affect the automotive industry.

The conference begins with a briefing session, where all attendees learn about current and upcoming regulations and legislation that could potentially affect the automotive industry. Regulatory agencies, such as the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), the Department of Labor (DOL) and the Department of Justice (DOJ) each present on regulation updates. The following day, attendees split into groups and meet with key legislators to ask questions and discuss upcoming regulations and bills.

Why does this matter?
Industry legislation is discussed, passed and vetoed every day in Washington DC. However, unless legislators are intimately familiar with an industry, it can be difficult to create legislation that is fair to both dealers and consumers. Involving leaders in the automotive industry not only offers a seat at the table, but provides some balance and keeps things fair for both dealers and consumers.

Interested in learning more?
Be sure to follow NextGear Capital’s social media accounts, where Vice President of Marketing Susan Moritz will be sharing news and updates live from the event.

Tom Hudson Webinar Summary

How do you ensure your advertisements meet FTC and CFPB requirements?* Dealers carefully budget each year for their advertising dollars and work hard to remain compliant. However, recent FTC and CFPB requirements now restrict what dealers can and cannot do in their marketing and disclosure practices. Additionally, the CFPB is in the process of banning the use of the kinds of arbitration agreements that many dealers use to protect themselves from class action lawsuits.

FTC & CFPB requirements in dealer advertising tom hudson webinar.These developments were driven by a few different factors. Namely, federal and state legislation and regulation, dealers and finance companies, technological advances and consumer demand and expectations.

Tom Hudson, the CEO of CounselorLibrary.com and Editor-in-Chief of CARLAW® recently hosted a NextGear Capital webinar, providing dealers with an in-depth look at how these legal developments affect their business, and discussed possible steps to take to consider.

Training: Do you really understand the legal requirements?

Dealers need to have a firm understanding of the law in order to open and run a successful dealership. For smaller dealerships, knowing and understanding compliance regulations can be especially challenging. However, it is helpful to take the time to really dig in and understand the ins-and-outs of compliance. There are a few helpful trainings to get dealers started on earning a deep understanding of their compliance requirements. Tom Hudson recommends the AFIP certification program, the NAF certification program and NIADA training.

Addressing Compliance: Are you ensuring you are following legal requirements?

How does your dealership ensure legal requirements are being followed? Most dealers are regulated either by the CFPB or the FTC. Dealers who are regulated by CFPB requirements are required to have a compliance management system, which is recommended for dealers regulated by the FTC as well. Be sure to check with your dealership’s regulating agency to make sure your compliance system follows regulation. If you are interested in seeing more of Tom Hudson’s webinar, please click here.

*All rights reserved. Opinions presented are those of the presenter, not necessarily NextGear Capital, Inc. This presentation does not constitute legal advice nor it is intended to constitute legal advice. It also is not intended to establish an attorney-client relationship. The content of and materials related to the presentation are not substitutes for consulting with an attorney regarding one’s particular case or situation.

How Can a Used Car Dealer Keep Customers Happy?

Used Car Dealer and Frustrated Customer in used car dealershipYou could do a lot in 90 minutes. You could watch three 30 minute shows, walk six miles, or as a used car dealer, you could create an exceptional customer satisfaction experience during the car buying process at your dealership. A Cox Automotive study found that customer satisfaction at dealerships is highest within the first 90 minutes at the lot. After 90 minutes, customer satisfaction begins to drop.

Depending on where a potential customer starts their buying process, the typical transaction at a dealership could last close to three hours, almost double the 90 minute window of peak customer satisfaction. Consumers walk into dealerships everyday excited and ready to buy, but leave unsatisfied due to the amount of time it took to close a deal. That deal your salesperson worked so hard to close, closed with an unsatisfied customer.

Of course, certain processes take time and have to happen for a sale to close, but how can dealerships ensure that customers are leaving satisfied with their car buying experience?

Value your customer’s needs
Every customer wants both their time and needs to be valued while shopping, especially for a larger ticket item such as a car. An experience focused on making sure buyers know the used car dealer they’re working with are putting their needs first helps to reduce the gap that can be felt between a salesperson and consumer. This could be as simple as staying later to work around full time work schedules, or making sure there are toys and activities around for a customer’s child to play with.

Keep it authentic and transparent
As a used car dealer, you know the vehicle buying process backwards and forwards. Sometimes getting back to the basics with customers is all it takes to create a more enjoyable buying experience. Making sure customers have an idea of what needs to happen between the time they choose a vehicle to purchase, and the time they finish signing the dotted line can help to improve transparency between your dealership and the customers it serves.

Can you bridge the gap between in-store and online?
The lines between shopping in-store and online are continually blurring. The idea of ensuring customers have an idea of what needs to transpire before the purchase of a vehicle should be mirrored both in-store and online. Many buyers want to complete a majority of the car buying process online before even stepping into a dealership.

Here are a few steps in the car buying process you could add to your dealership’s website to benefit customers that want to do a majority of their car buying online.

  • Inventory: Showcasing your inventory online shows customers what you have in stock. Depending on what your potential customers are looking at, they can know at a glance whether or not your dealership offers the vehicle they are looking for.
  • Price Negotiation: Price negotiation is likely the most painful part of the car buying process. It involves multiple dealership departments and can appear quite cumbersome to consumers who are accustomed to making immediate purchases. A tool like MakeMyDeal allows for a direct line of communication between customer and dealer. Deals and terms can be finalized before a showroom visit. This can help dealers understand what buyers are looking for in terms of features and prices, in addition, it can build trust between used car dealers and customers.
  • Trade-ins: If a customer wants to trade in their vehicle, it can take time to determine the value of their trade-in and what they can put towards a new purchase. Including a realistic trade-in appraisal tool on your website can help to increase transparency between buyer and used car dealer, and can help streamline the trade-in process.

The key to putting these tools online is making sure that buyers who start the purchase process online will be able to pick up where they left off if they make an in-store visit. Whether a buyer starts their journey online or in-store, a cohesive online to in-store buyer experience is necessary.

Improving customer satisfaction not only makes the car buying process less painful for customers, but can also help to build customer loyalty. An Autotrader study found that customer loyalty to a dealership is stronger than their loyalty to vehicle make. The study also found that 30 percent of used car buyers return to a dealership where they previously purchased a vehicle or had previously had their vehicle serviced.

If your used car dealership isn’t leaving customers satisfied with their car buying experience, change is possible – and rewarding!

How Should Automotive Dealers Reach Generation Z?

Just when you thought you had millennials figured out, get ready for 80 million strong Generation Z. Gen Z holds the influence of $200 billion in spending power, and luckily for automotive dealers, ninety-two percent said they plan to own a car.

automotive dealers gen zBorn basically with a cell phone in their hands, Gen Z is made up of true digital natives who have never existed in a world without the internet. This generation was born between 1998 and 2016, and their formative years were influenced by the last breaths of the economic boom of the ‘90s, the Great Recession and the war on terrorism.

A recent study from Autotrader and Kelley Blue Book highlights the trends Gen Z will be looking for when they gear up to purchase a car. So what should automotive dealers do if they want to reach this generation?

It’s All About The Experience—Both Digital and Face-to-Face
Even though Gen Z grew up in the digital age, they still highly value face-to-face interaction with sixty-seven percent reporting they would rather car shop in-store. This generation values a positive experience above all, including convenience and price. However, this face-to-face interaction might look differently than typical, past appointments with potential customers.

Moving forward, dealerships need to consider taking on the role of an “experience center,” because Gen Z will most likely do their research on multiple digital outlets before stepping foot in a dealership. The main purpose of their visit will be to take their prospective purchase on a test drive, and to see for themselves what add-ons and options are available.

Integrated, Visual and Interactive
If dealerships are now taking on the role of an “experience center,” automotive dealers need to make sure they are reaching Gen Z where they are online.

Dealers can create the positive experience this generation is looking for by tapping into the generation’s digital, highly visual and interactive nature. Gen Z is accustomed to moving seamlessly between their devices and the real world, with an expectation that the information needed should do the same. Websites and promotions should be readily available to Gen Z and should move uninterrupted across devices between the online and offline world.

Strong visuals and fewer words are effective when trying to reach Gen Z. With their expectation of integrated and interactive information, consistent and interactive advertising messaging and design throughout Gen Z’s favorite sites and social media platforms is crucial to capturing the attention of this generation.

The closer an automotive dealer can get to providing a positive experience for this generation digitally, the closer this same dealer can get to providing a positive experience with Gen Z face-to-face.

Dealer Social Media: Tips for Your Dealership

Where does your dealership stand on the social media spectrum? When it comes to dealer social media, are you digitally savvy or is your online presence sporadic or worse even, non-existent? Let’s be honest. The buying cycle of consumers in the digital space has significantly shifted, and dealerships need to be prepared to adjust to changing consumer demands.

Take a look at some of these numbers from Think with Google.

  • Dealer social media tipsSixty-six percent of recent purchasers say, “YouTube was one of the best places to watch ‘in-action’ videos of vehicles I considered buying.”
  • Twenty-eight percent of the buying population feels that social media greatly influences the narrowing of their brand or model consideration.
  • Twenty-seven percent said that social media greatly influences their identification of a dealership from which to purchase, with sixty-nine percent indicating that a friend’s favorable post about a dealership positively impacted their opinion of the dealership.
  • Approximately two-thirds of those who use Facebook in the automotive purchase process indicated that a friend’s favorable post about a brand or vehicle positively impacted their own opinion of that brand or vehicle.
  • Among the 2,000 car shoppers surveyed by Dealer.com, “Twitter has a 45 percent visitation rate, and 22 percent of respondents use it at least daily.”

These numbers paint a clear picture: dealers need to be leveraging the social media piece of the digital marketing puzzle. Whether you are just starting out or you’re a dealer social media expert, here are a few tips to ensure a successful social media presence.

But First…

Everyone’s goal is to turn social media likes and fans into real world purchases and referrals. A lot of dealers might say, “Social media is too much work and it won’t sell me any cars.” They don’t believe that it works if they can’t track it. Then those same dealers turn around and put thousands of dollars in advertising towards traditional channels like TV, radio and billboards, which arguably have much smaller measurable impact. The truth is, there are a lot of ways to measure engagement and sales through social media efforts compared to traditional advertising methods.

While it is possible to make sales through social media, keep in mind social media is really all about connecting with your audience. Boring content and a static account won’t bring people back to visit your dealer social media pages, or visit your dealership in-person. What content will your audience connect with which will consequently keep your brand in the spotlight?

Be Realistic and Consistent

With these things in mind, be realistic about the social media goals you set. Who is available to man your dealer social media and what content are you able to produce? How consistently are you able to produce it and can you maintain that workflow? After your content is published, how do you measure whether or not it was successful? With any effort, ensuring that clear objectives are set at the beginning is a key to managing and monitoring a campaign’s success.

Make Social Media Management Easy

Once those questions are answered, you can begin mapping out how you want to handle day-to-day social media management. Luckily, there are a numerous tools available to help you accomplish your social media goals.

  • Scheduling Tools:Who has the time to log in to individual social media accounts to consistently post updates? Using social media scheduling tools like Hootsuite, Buffer, Sprout Social or Social Pilot enables you to schedule a number of posts in advance. These tools offer a number of other features like content calendars allowing you to schedule social media posts around events or annual sales.
  • Understanding Engagement and Return On Investment: What did people do with your post? Did they scroll by it? Like it? Click through to your website and fill out a lead form? Most social media sites, and even some scheduling tools, offer a suite of analytics so you can dig into the audience’s engagement with your content. Google Analytics is an excellent free tool that gives you the ability to monitor what your audience interacts with on your website. When your social media efforts are integrated with your website, you can gain an accurate picture of your audience and the content they are interested in viewing.
  • Use Your Resources: Your employees don’t just have one skill, for example, an IT member may have an excellent photography skills and be proficient on Instagram. Tap in to those accessible resources and reward employees who come up with posts that garner the most shares or likes to encourage them to continue contributing to the success of your social media. Allow your teams to freely brainstorm ideas, and don’t shoot ideas down. Powerful campaigns come from engaging with your customers, so talk to them about what they think and enable them share their story. This results in a free way of learning more about your demographic and in many cases powerful client testimonials.

Running a successful dealership and creating a strong dealer social media presence isn’t easy and can take a lot of time that you might not have. If you aren’t interested in managing your dealer social media yourself, there are services like Dealer.com that specialize in social media management for dealerships. They will work with you to make sure your dealer social media presence and overall strategy helps you to connect with your community and audience.

It starts with taking time to evaluate your social media presence and goals, then coming up with a content plan to make concentrated efforts to connect with your audience. Get these things squared away and you’ll be on your way to becoming savvy in social media.

NextGear Capital Enters Agreement with CarMax Auctions

man on car lot pointing out cars that used floor plan financing for used car dealersNextGear Capital has announced a new agreement with CarMax. The agreement with CarMax, the nation’s largest retailer of used vehicles, will allow dealers to use their NextGear Capital lines of credit at all 68 CarMax auction locations.

NextGear Capital floor plans are currently accepted at over 1,000 live and online auctions, and may be used with inventory sources such as trade-ins, off street purchases and loan payoffs. It is anticipated that NextGear Capital floor plans will be accepted at all CarMax auction locations as of August 8, 2016.

“We recognize CarMax as a company with high integrity and a reputation built on strong values and exceptional customer service. NextGear Capital shares these values and service-centric approach to business and is pleased to join efforts with CarMax in providing additional value to our dealers. We are committed to providing our dealers the tools necessary to be successful. The ability for dealers to utilize their NextGear Capital lines of credit at CarMax will enable greater access in sourcing inventory,” said Randy Dohse, senior vice president of sales and operations at NextGear Capital.

Industry Leader Closes $1.95 Billion Financing Securitization

auto floor plans vs cashNextGear Capital, Inc., the most comprehensive provider of lending products and solutions for the automotive remarketing industry, is pleased to announce the recent closing of its $1.95 billion securitized bank facility. Led by The Bank of Tokyo-Mitsubishi, the two year securitized facility provides flexibility and tremendous lending capacity through a large six bank syndicate. The amended bank facility complements the existing privately-placed AAA rated ABS term bond financings that NextGear Capital has in place through 2019.

Commenting on the new facility, Greg Hurst with The Bank of Tokyo securitization group, noted, “The banks were thrilled with the opportunity to participate in this facility and partner with such a great company that is known for its strong management team. The banks view our relationship with NextGear Capital as a long-term partnership and we look forward to being a part of NextGear Capital’s growth plans.”

David Horan, Chief Financial Officer of NextGear Capital commented on this latest financing.  “With the responsibility of supporting a growing dealer body of over 23,000 across North America, it is critical that NextGear Capital has a strong bank group that fully understands our business and is committed to our growth objectives, both short and long term. This facility, coupled with our ABS bond offerings, provide the growth capital to deliver on our mission of supporting the inventory financing needs of our independent dealer clients.”

 

NextGear Capital Provides Valuable Dealer Resources

Chris Tingler using account portal on his mobile device

As a vested partner dedicated to dealer growth and success, our dealer resources and educational efforts are focused on helping dealers succeed, regardless of whether or not they’re a NextGear Capital customer. In order to best serve and assist dealers in developing their business, we keep them up-to-date and connected to the latest industry trends, technology and dealer resources.

Dealer resources for NextGear Capital include free quarterly dealer summitsWe connect dealers to thought leaders within our industry through the Cox Automotive Dealer Learning Center, as well as our free quarterly series featuring in-person Dealer Summits and online Webinars. These complementary dealer resources are not only comprehensive, but allow dealers to learn from some of the industry’s leading voices.

The Cox Automotive Dealer Learning Center houses research and market reports, which provide details on the health and state of the industry. There you can also find dealer resources such as whitepapers, case studies, shopper insights and best practices to help dealers learn about what others are seeing within the industry. Dealer Summits grant the opportunity for NextGear Capital teams to meet with dealers face-to-face, and for dealers to connect with their peers as they learn from industry leaders. For those who can’t always travel to the Dealer Summits, our quarterly webinars give independent dealers the opportunity to remotely learn from industry experts.

Each of these resources span a variety of relevant topics such as best practices on sourcing, buying and selling your inventory –  valuable information that dealers can immediately start putting into practice.

Dealer resources for NextGear Capital includes webinars. The next webinar will be hosted by Tom Hudson.Our next webinar titled, “What Recent Federal Enforcement Actions Mean for Dealers” will be led by Tom Hudson, CEO of CounselorLibrary.com and Editor-in-Chief of CARLAW ®. He’ll be covering the recent FTC restrictions on dealer advertising and disclosure practices, and the CFPB’s recent bans on certain arbitration agreements and how these changes can affect a dealership. The webinar will occur August 25, at 2:30 p.m. Register now to reserve your spot.

We strive to be accessible to all dealers. Contact us and let us know if there are additional dealer resources you would like to see available. We look forward to continuing to serve dealers with unparalleled access, industry-leading solutions and valuable dealer resources to aid independent dealership success nationwide.