Get Ready for the Cox Automotive Experience

Cox Automotive Experience graphic

Cox Automotive Experience graphicIn 2021, dealers will be able to attend the first-ever Cox Automotive Experience (CAE). This free 10-day virtual event will provide dealers with industry insights and solutions to help keep business moving forward in the new year. Unlike in-person events, dealers will be able to have one-on-one interactions with subject matter experts from some of the top brands in the automotive industry in a low-pressure environment.

Events will include a Cox Automotive Town Hall lead by Steve Rowley and Marianne Johnson, panels on topics like Client Resilience lead by Rich Contu, Creating a Personalized Buying Experience lead by Courtney Clark and the 2021 Market Outlook featuring Jonathan Smoke. Many brands will also be unveiling their latest solutions and tech, like NextGear Capital’s FirstGear program. Dealers will also have the opportunity to participate in demos from companies like Manheim, Kelly Blue Book, Autotrader and more!

If you’ve never had the opportunity to attend an in-person tradeshow or conference before, this is the perfect opportunity to test drive all the benefits a convention has to offer in a virtual environment. Make time to create connections with participating brands to ensure you have access to the support you need to make the most of 2021. Another unique benefit of registering for CAE is post-event access to all the content presented which will be available through the end of February.

Independent dealers can schedule their pre-set demo with a NextGear Capital sales team member here.

Virtual Auctions: No Longer a Thing of the Future

While some independent dealers were buying online pre-pandemic, the bulk of inventory acquisition was done in-lane. The pandemic pushed the marketplace online and it looks as if it’s there to stay. In a time of ever-thinning profit margins and inventory shortages, if leveraged correctly, online auctions can provide an efficient, profitable enhancement to a dealership’s operation model.

Low Inventory Levels Affect 53% of Independent Dealers

Adding online auctions to your purchasing strategy can help ensure you’re offering consumers the widest array of vehicles possible.

To read more, download our Infographic here.

 

5 Tips for Conquering Online Auctions

As more independent dealers gravitate towards buying online, it’s important to understand that you can maximize success by knowing how to best leverage virtual auctions in your inventory strategy. Whether you’re buying or selling for wholesale or retail, the online auction process works for just about any inventory type. Here are 5 tips for setting yourself up for success in a virtual auction environment: 

  1. Educate Yourself – Even if you’ve purchased inventory online before, it never hurts to take the time to make sure you know all the intricacies associated with online buying and selling. Each platform works differently, so you want to make sure you have a thorough understanding of the one you’re using before sale day. Some like Manheim, offer tutorials on their website that walk you through step-by-step so that you can confidently buy and sell inventory.
  2. Increase Your Inventory Exposure – One of the advantages that comes with both buying and selling your inventory online is the amount of reach you’ll have. You’ll attract buyers from several miles away, while also having quick access to view inventory in the next state over, making it easier to find the vehicles your customers are looking for.
  3. Know the Basics – Do you know what a green light vehicle means? Do you know the difference between a condition report and a vehicle detail page? While you might think you’re already an expert when it comes to auctions, you may be surprised that you have a few things to learn when it comes to virtual ones. It doesn’t hurt to take some time to brush up on the basics so that you don’t suddenly feel out of your element during a sale.
  4. Take Advantage of Real-Time Information – Online auctions provide the most up-to-date data from buyers and sellers bidding on vehicles, which empowers dealers to quickly optimize their strategy to meet market demand. Use filters to narrow your search and quickly find the inventory you’re looking for and sign up for notifications when those vehicles hit the auction block. You can also search for inventory by categories such as mileage, location, year, make and model creating for an efficient process.
  5. Anonymity – One of the top perks of online auctions is how easy it is to outmaneuver your competition. Instead of worrying about hiding your bids from a neighboring dealership who might try to drive up the price on a vehicle, you can bid anonymously helping you secure the best price on your inventory.

Online auctions offer more than connivence and as they continue to evolve and technology improves, it’s a good idea to try to stay on top of any new enhancements that become available. Remember that the more prepared you are, the better your chances will be for securing the inventory you need which can help you to stand out among other independent dealerships!

Thad Sykes and Brad Burns Discuss Online Auctions

Thad Sykes and Brad Burns

Thad Sykes, Associate Vice President of Sales at NextGear Capital, sat down with Brad Burns, General Manager at Manheim St. Pete. In the video, they discuss the shift to online auctions and the steps they are taking to accommodate dealers during the pandemic.

When in-person auctions started to close down during the pandemic, many independent dealers found themselves having to quickly adjust to buying and selling their inventory online. Since many dealers had not been big online buyers prior to the pandemic, they didn’t realize how they could enhance their current inventory offerings through these platforms. Not only are online auctions convenient and efficient, but if you know how to leverage them correctly, they can help give you the upper hand whether you’re buying or selling inventory. Check out this blog for tips on mastering virtual auctions.

Dealer Home Services: Providing Your Clients a Safe, Hassle-Free Car Buying Experience

While uncertainty in the market continues to disrupt the traditional car buying experience, dealers have embraced new ‘buying alternatives’ for their consumers. Working to accommodate car buyers’ concerns, dealers across the nation are expanding business outside their physical location. 88% of Cox Automotive clients, both franchise and independent dealers, provide services beyond their brick and mortar locations.¹ These services are referred to as Dealer Home Services. Dealer Home Services, historically known as white-glove services, include contactless amenities such as video walkarounds, virtual consultations, at-home test drives, local home delivery and much more.

Download the infographic here to read more.

Using an Automotive Floor Plan at Online Auctions

Due to the COVID-19 pandemic, online auctions are increasing in popularity. With some in-lane auctions suspended, independent dealers are now having to buy inventory online or through Simulcast. There are many differences between online and physical auctions, but both allow dealers to purchase vehicles on an automotive floor plan. 

 One of the key advantages floor plan financing offers is the ability to pay for inventory across both physical and digital auction sources. As more dealers purchase inventory digitally, the ability to floor plan vehicles from these online auctions becomes more and more apparent.  

Find an Online Auction 

 Before you make any online auction purchases, make sure you are on a reputable auction website. Some notable online auctions are OVE.com, Manheim Express and ACV. These auctions make it easy to view and sort through inventory. 

When you use your floor plan at any of those auctions, NextGear Capital will send the money for the vehicle directly to the auction. If you find a vehicle you’d like to buy that is not at an auction, like on Craigslist for example, you can still put it on your automotive floor plan. NextGear Capital dealers are able to floor plan non-auction purchases, but doing so incurs a small fee.   

Floor Plan Check-out Process 

Once you find a vehicle you’d like to buy at auction, the process is simple. Before you make a bid, make sure you know the max amount you’re willing to spend. Once you have that in mind, all you need to do is make a bid and win!  

 When you win a bid for a vehicle, you’ll begin the check-out process. Though every digital auction check–out will vary, a few key options remain the same. You’ll have the opportunity to select a method to pay for your vehicle purchase, and a floor plan will often be one of those options. 

By using a floor plan as your method of payment at online auctions, you are streamlining the digital buying process. Many online auctions, like Manheim Express, have integrated floor plan options, helping dealers get gate passed and on their way. 

 Transportation 

After purchasing a vehicle from a digital auction, transporting it to your lot becomes a new challenge. Integrating transportation services into your purchasing strategy can further streamline the digital buying process. Many digital auctions have integrated transportation options. Dealers are able to select a provider and move vehicles directly to your lot. Depending on the floor plan provider and the transportation you select, you may be able to floor plan your transportation charges. 

NextGear Capital has partnered with Ready Logistics, Central Dispatch, and Manheim Express deliver a wholesale buying, transportation and financing solution. By combining four Cox Automotive brands, shared clients in the U.S. can easily add transportation costs to their floor plans with just a few clicks on the Manheim Express app. 

Not a NextGear Capital dealer? Learn more about our automotive floor plans by contacting us or applying today! 

Finding Your Way Forward: December 2020

Helping Others During the Holidays

Marcos Esquivel of Esquivel Auto Depot in Rialto, California has been working at his family’s dealership since he was just a young boy and knows firsthand that the car business can be a roller coaster. Despite this, for the past 10-years, he’s sponsored an annual Christmas event at his dealership to give back to underprivileged families in his local area. Previous events featured a free meal and toys for over 300 families, pictures with Santa Claus and stations for face painting. Unfortunately, like just about everything else, Esquivel had to cancel this year’s event due to COVID. However, he still plans on working with local schools to sponsor three families who’re currently going through a financial hardship so that their Christmas is a little brighter. Esquivel is hopeful that he can resume the event next year, even if means scaling it back to keep everyone safe. “We will hopefully be able to host the event again next year. I like the way everyone gets together and has a good time celebrating with food and family, but we want to make sure that everyone is safe as well.”

Embracing Online Auctions During COVID

Annette Williams at Champ FinancialWhen Annette Williams and her family contracted COVID in May, she had to make some quick business decisions to keep her dealership Champion Financial up and running. “We were already taking precautions to keep ourselves from contracting COVID. I was working remotely from home, handling all the paperwork for the dealership, and my husband was conducting in person business by appointment only. He was the one who started showing symptoms, and we think that it was contracted at the lot. Later, both myself and daughter caught it. Luckily, the symptoms were mild and manageable, and we were very fortunate that we could quarantine at home without having to go to the hospital.”

One of the first changes Williams made was buying inventory exclusively online, “We had already started testing the waters before the pandemic, but we became full-fledged once it started.” She says her husband handles most of the inventory buying for their dealership located in Dolton, IL. “There’s been some challenges with transportation. Before COVID we would usually get the vehicles here within 3 to 4 days but now we have to wait almost 15 days sometimes. I’m guessing it has to do with a lot of other dealers buying online too. But despite the delay, it’s really nice being able to get cars from out of state. Especially with the colder months approaching, it’s convenient and allows us to have more flexibility with our inventory.”

While she’s glad that her dealership is still thriving, she says the biggest lesson she learned during this ordeal is the importance of keeping everyone safe. “Protect yourself, your family and customers. I’ve hired a minority owned business who comes into the dealership two times a week to sanitize. You can’t live off fear, but you need to take the necessary precautions to protect your inner circle and keep your customers safe.”

Community Relations Keeps the Holiday Spirit Going at NextGear Capital

While there will be no Holiday Party at NextGear Capital this year, NextGear Capital’s Community Relations team has come up with some ideas to keep the holiday spirit alive for its team members. Earlier this week, they hosted a virtual holiday card party where participants connected on Teams and listened to holiday music while creating cards for local assisted-living and nursing home residents who’ve been isolated during the pandemic from family and friends. Lauren McNabb, Events and Community Relations Coordinator at NextGear Capital says, “Although it was a virtual event, we hope that by participating, team members felt they were still able to bring holiday joy to those who need it most in our community and also enjoyed chatting with each other while listening to festive music.”

There will also be an opportunity for team members to participate in a Virtual Trivia Night in December where they will have the opportunity to win prizes and are encouraged to wear their ugly holiday sweaters. This is a fundraising event so each team’s entry fees will be donated to Gleaner’s Food Bank.

Mastering Virtual Auctions

Dealer walking through an empty auction

Dealer walking through an empty auctionWhen in-person auctions started to close down during the pandemic, many independent dealers found themselves having to quickly adjust to buying and selling their inventory online. Since many dealers had not been big online buyers prior to the pandemic, they didn’t realize how they could enhance their current inventory offerings through these platforms. Not only are online auctions convenient and efficient, but if you know how to leverage them correctly, they can help give you the upper hand whether you’re buying or selling inventory.

Here are some tips for mastering virtual auctions to give you a competitive edge:

  • Familiarize Yourself with Different Format Options – One of the benefits that comes with buying and selling vehicles online is the access to the numerous options out there. With so many different platforms available, it may seem daunting to know which one is going to work best for your needs. It’s a good idea to take time beforehand to do research so that you fully understand how each one works, ensuring you’re selecting the right online partner auction for your dealership.
  • Know Your Vehicle Location – Something buyers need to be aware of is the vehicle’s location for all inventory being considered for purchase. Online auctions are able to offer you more variety by listing vehicles that aren’t just available onsite. Make sure you know if the vehicle you’re bidding on is located at the actual auction lot or 100 miles away. Extra transportation costs can eat away at your profits so knowing your vehicle’s location can help make sure you bid without any costly surprises.
  • Understanding Online Arbitration – Arbitrating vehicles purchased online might sound like a big undertaking and one you may even think you’ll run in to more than with in-lane purchases. However, arbitration rates have actually gone down since moving to a more digital environment thanks to digital tools like in-depth videos and Condition Reports. The NAAA has established policies for both buyers and sellers purchasing in an online environment and encourages that they are used as a guideline. Everything from title discrepancies to understanding the sale light system are covered, so this is a reliable tool you can use to know you’re not going to purchase a lemon.
  • Become a CR Expert – Knowing how to read a condition report is crucial if you’re going to buy and sell vehicles confidently online. CR’s have improved since online buying has grown in popularity and they feature more detailed information than ever before. Sellers can use the information in the condition reports to help discuss any concerns with potential buyers and reduce the chances of their customers being dissatisfied with their purchase.
  • Access to Extra Resources – One of the myths about virtual auctions is that you won’t have access to things like Post Sale Inspections, transportation and reconditioning services, but that’s not the case! Most virtual auctions still offer buyers all of these additional services and in many cases, you can even have a PSI or recon done onsite at the auction, even if the vehicle was purchased online.
  • Easy Integration– Another convenient part of buying or selling your vehicles online is how easily you can integrate things like a floor plan into the process. Floor plans can help free up cash so that you have more flexibility to get the inventory you need right away. Additionally, if you select a floor plan provider on the same platform as the auction you’re using, they will already be integrated, making for a seamless process.
  • Don’t Be Afraid of Fees – Another misconception about virtual auctions is that you’ll pay more fees. This isn’t true because the fees associated with onsite and online buying are comparable and you might actually be able to save some money by taking advantage of special promotions that are only available with online vehicle purchases.

By taking the time to do some research, you’re going to be able to take command when you bid on and sell inventory online. You’ll be able to participate in multiple auctions at once, acquiring the inventory your customers are looking for in a lot in less time, so you can get them into your customer’s hands and off your lot faster. This can help reduce your costs, increase your margins, and put cash in your hand earlier in the process driving your dealership towards increased success.

A Franchise Background Led to Success for This Dealer

floor plan cars

When Tony Harb started working with his dad after completing high school, he had no idea it was going to lead to a lifelong career, “I started in the automotive industry when I was 18 years old, right out of high school. I didn’t have any plans at the time, but since my father was already working at a dealership, that’s how I got started which turned into a lifelong venture for me.”

Harb found that he enjoyed the industry and started to slowly work his way up the ranks. “I started working on the franchise side as a salesperson, then as a sales and general manager at different dealerships. A few years later, a friend of mine from high school called me up and said he knew about a dealership available for sale which piqued my interest because if I bought it, I would be able to both run and own a dealership. So, in early 2017 I opened Just Better Cars in Rosedale, CA and along with my 15 employees, we’ve slowly been able to grow the dealership. We currently average about 80 vehicles in our inventory each month.”

Even though he didn’t have any previous experience with a floor plan, Harb knew he wanted to use one from the start. “The main reason I wanted to get a floor plan was to make sure I had the capital I needed to be flexible. I chose NextGear Capital because the previous owner of the dealership I purchased already had a relationship with them and they offered me some good term plans, so it was an easy decision. When you’re running a dealership, especially one as large as ours, there are a lot of moving parts, so I wanted to work with a company that was going to make the process easy. Sometimes, I need to make quick adjustments to my inventory based on things like seasonality, market changes and now COVID, and my floor plan provides me with the functionality and support I need.”

Harb says that he’s also been impressed with how simple it’s been to manage his floor plan. “NextGear Capital has created an easy platform that’s simple to manage. If you understand the concept of money management, asset deprecation and how a floor plan plays into that, you won’t have any headaches or heavy lifting. The ability to delegate certain functions out of Account Portal has been a win for us too, because I have people in my office manage it. They’re the ones who keep the ball rolling and they’ve had absolutely no issues. It’s not something I have to worry about keeping my eyes on.”

Like a lot of other independent dealerships, Just Better Cars is surrounded by competitors on the same street, but Harb says that he’s found a way to set himself apart. “We work hard to provide our customers with a really good product that stands out over other independent dealers. They come to us because of our reputation and they say that our cars are always in excellent shape. We run our independent dealership like a franchise dealership in the sense that we have salespeople who answer leads, and managers that help them follow up on them. It is a complex system of making sure that our leads get handled, and we follow-up and form relationships. We know that the market is probably going to be very different in five years and one of our goals is focused on slowly growing our dealership so that we can still be a viable player and own more market share in the future.”

Harb says one of the biggest challenges he’s faced as an independent dealer is finding the right inventory. “I think buying inventory for dealers is a lot like fishing. When you go to the pond and everyone is standing there with their pole in the water, you have to be flexible and find another pond. We widen our search by looking for inventory at different auctions so we’re not in competition with the same dealerships. That’s why I’ve always done a lot of buying online. I’ve learned to rely on the condition reports that are provided by the online auctions and I trust the grade system because I know the vehicles have been inspected before getting a green light. I know some other dealers are struggling with buying digitally but I think it’s the way we’ll be buying cars in the future.”

While just like other dealerships, the pandemic caused Harb to make some changes, but he wasn’t as heavily impacted as other dealers. “We haven’t been effected as much by COVID restrictions like dealerships in other parts of the country have, so we still have quite a bit of our customers who want to come into the dealership. However, we still try to make it a quick and easy process when they come in. We’re also fortunate because we have a large showroom since our building used to be an old BMW dealership in the 70’s, which allows us to practice social distancing easily. We’ve put a lot of protocols and procedures in place, and I think our customers feel safe because of that. The main challenge we faced was a lack of inventory just like everyone else, but that’s when we leaned into online buying and just went wherever the cars and pricing made the most sense.”

Harb is also involved in his community through EveryONE Matter Ministry. “They’re a faith-based group who help single mothers and families who are homeless or are facing a homeless situation. We help by donating cars to the organization on a quarterly basis so those people can secure long-term housing. The car is a critical component, and they have an 87 percent success rate of people who graduate from their program and are able to get back on their feet again and move on to bigger things. We feel lucky to play a part in supporting this organization.”

Now Senior Vice President of the Independent Automobile Dealers Association in California, when asked if he had any advice to other dealers who’re just getting started, Harb said it’s really very simple. “My advice would be to make sure you understand how cash flow works at your dealership. If you don’t, and aren’t able to manage, it could be your worst enemy. However, if you understand cash flow and take on a floor plan, it gives you a great opportunity to grow your footprint. It gives you the flexibility to make sure you have the capital you need to set yourself up for success. I feel confident using NextGear Capital as my floor plan provider. They make the process easy and there are no surprises.”

5 Ways White Glove Services Can Set You Apart

As independent dealers face an increasingly competitive market, it’s important to find ways to set yourself apart from the competition when it comes to targeting consumers. While some things may be out of your control, like wholesale prices or inventory availability, making customer-centric changes at your dealership can help create a higher level of customer satisfaction and in return, more vehicles sold. Here are some ways white glove services can help you take command of your local market:

  1. Create an Easy Sales Process – Whether it’s offering electronic approval or adding online penciling to your website, customers in the market for a used vehicle are naturally going to be drawn to dealerships that make the purchasing process the easiest.
  2. Virtual Car Shopping – One of the top pain points for car shoppers is the time it takes to travel from dealership-to-dealership to look at vehicles. You can eliminate this inconvenience by scheduling virtual walkarounds using apps like Zoom, so that interested buyers can see selected vehicles in real-time without having to leave their home or office.
  3. Local Home Delivery – Convenience is the name of the game when customers are asked what improvements could be made to the car buying process. That’s why more dealers are offering home delivery to customers within a certain radius of their dealership. This service gives the customer a VIP experience while also saving them a trip to the dealership.
  4. Extended Test Drives – Having additional time to test drive a vehicle is something car shoppers are looking for. In fact, being able to test out a vehicle for 24 hours is going to give them more assurance that they’re making the right purchase than a quick drive around the block. By allowing consumers to take a vehicle home with them and see how it looks in their driveway, you’re establishing a level trust which will help to strengthen your relationship.
  5. Hassle-Free Maintenance – Having a maintenance shop at your dealership is a good way to create an extra stream of income, but you could enhance it by including vehicle pickup and delivery to your location. Consumers have said they would be willing to pay up to an additional $20 for service pick-up and delivery. Getting oil changes or needed repair work can be a headache for consumers who don’t have a lot of extra time on hand, and many are willing to pay for the convenience this service provides.

As more purchasing decisions are being made online, consumers are going to want to see that same convenience and speed incorporated into the vehicle purchasing process. Not only will these services set you apart from other independent dealers, but they could be a way for you to bring additional cash flow into your dealership. Remember that your customer’s have numerous choices when it comes to finding a vehicle and are going to be drawn to dealerships who provide the types of services that are going to make their life a little easier.