Category Archives: F&I and Showroom

Sharpen Your Survival Skills

It was only a few months ago that every expert, analyst, automobile industry pundit and alleged researcher was predicting numbers as high as 20 million new-vehicle sales in 2018. What were these fools smoking? They can’t all live in Denver, can they?

The Trump election should have taught the world that you can’t trust polls and researchers to tell the truth — especially when they have a vested interest in the outcome and they trade in deliberately false pseudo-information.

“There simply aren’t enough customers in the pipeline. We buried them in 72- and 84-month loans with no down payments. They have no hope of getting out in this trade cycle or the next. We refinanced negative equity on three generations of trade-ins. Cheap used cars are going to totally kill new-car sales and the auctions.”

Well, enough of that. It’s here. The retail car business is crashing in spite of the soaring stock market. Sorry, Bill Clinton, but it’s not the economy, stupid. It’s saturation.

Read the whole article here on F&I and Showroom.

Sales Rock Stars Still Exist

In an era where manufacturers and hostile vendors are telling dealers to reduce salesperson pay plans, I can name 30 to 40 people off the top of my head who are making more than $40,000 a month selling cars. And they’re doing it in all kinds of markets.These individuals come from all backgrounds, are of different ages, have different makeups, and sell both imports and domestics. But they have two things common: They all became a brand within a brand, a dealership within a dealership. See, these individuals reach out to their communities and generate their own business and manage relationships and referrals.

These individuals come from all backgrounds, are of different ages, have different makeups, and sell both imports and domestics. But they have two things common: They all became a brand within a brand, a dealership within a dealership. See, these individuals reach out to their communities and generate their own business and manage relationships and referrals.

Read the whole article here on F&I and Showroom.

The New Stooges

If you don’t know who Larry, Curly and Moe were, you might be a millennial. Early in the morning or late at night when I’m scanning through the upper tier of cable channels, I still sometimes come across an old “Three Stooges” short. And I can’t turn away. These guys were masters of slapstick, an art form left over from the vaudeville era.

Hard to say which one was the biggest idiot, but I think most fans will agree it was Curly, whose famous “n’yuk n’yuk n’yuk” laugh became a Stooges trademark. This comic trio was so absurd that you felt ashamed to admit you watched them. Of course you did, though. You couldn’t help yourself.

The Three Stooges are long gone, but their legacy lives on in the so-called “disrupters” who are trying to wring the profitability out of your operation.

The latest acceleration of stupidity into reality is the race to completely automate the sales and F&I process and transact and contract the sale online. Now that these modern-day Stooges have the technology figured out, they are in a race to see who can come to market first.

Read the whole article here on F&I and Showroom.

Is Your Quick Lube Driving Away Business?

After 41 years in this business, I must admit I was naïve about dealership service when I visited my local Ford dealership for an oil change. After all, the sign on the building said “Quick Lane.” I was gobsmacked when they told me it would be a four-hour wait for a simple oil change.

They spent a fortune building a manufacturer-approved, state-of-the-art quick lube, but there’s nothing “quick” about it. It is embarrassing to me that Valvoline Express can take a walk-in just about anywhere in the country and have them in and out in less than a half hour — and that’s if they’re busy.

I knew this topic would require more research, so I called around and tried to schedule a simple oil change with every Ford dealer on my side of town. Just to be fair, I called a couple Chevrolet dealers as well. The answers varied from “We’ll see you in two hours” to “How’s next Thursday?” The one constant was that I needed an appointment, and that is the mentality that is allowing everyone from the national chains to the car wash mechanics to kick your behind.

Even more embarrassing is the fact they clobber us on Google. Service is such big business, and most franchised dealers are stuck in the Stone Age. You put all the emphasis on sales and just assume you’re making money in service. You could be doing a lot better, and it starts with oil changes.

Read the whole article here on F&I and Showroom.

Who Shot the Dealer?

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Historians have put the story to bed and closed the book. I say, however, that only the most ignorant and naïve among us could actually believe that a lone gunman — particularly a bitter, delusional nutcase like Lee Harvey Oswald — could have pulled off the assassination of President John F. Kennedy.

I just read some interesting memoirs on the topic. Some suggest Kennedy’s widow, Jackie Onassis, actually believed Vice President-turned-President Lyndon Johnson was behind the plot until the day she died. Others say the fact that Oswald himself was killed by Jack Ruby, a low-level Mafia associate, means Kennedy must have had some run-ins with mob bosses.

Read the whole article here on F&I and Showroom.

Stop Flushing Those Ad Dollars

To be frank and borderline crude here, most of you dealers are pissing your money away. You are totally ineffective and inept with your advertising dollars.

I’m told that automotive advertisers spent more than $4 billion on paid search in 2016. Most of that went to Google. From everything I’ve been able to glean, I am going to estimate that another $3 billion was spent on so-called lead providers. That’s $7 billion in pursuit of the Holy Grail, aka the first page of Google search results.

Well, I can tell you from experience that most of you flushed that money down the toilet.

In the early 1920s, John Wanamaker created and operated one of the first department stores in the United States. He invented the price tag, among other accomplishments, and coined the saying, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

Read the whole article here on F&I and Showroom.

CPO: Are You In or Out?

It’s going to be the hottest game in town. The question is, will your dealership be sitting at the table or watching from the sidelines?

I’ve been predicting for much of the year that used-car values would take a monumental dump in the fourth quarter due to the glut of off-lease and fleet units returning to market. What I didn’t count on was Donald Trump getting elected to the presidency.

Yes, I am a huge Trump supporter, believer, and advocate, but, like many of you, I was beginning to buy into the belief that Hillary had him beat. So with the uncertainty came the miscalculation that pre-owned values would drop significantly due to the flood of used inventory returning to an already saturated market.

Well, it appears I was wrong — at least for now. Look, I still believe we’re on the path to market saturation, as every prospect out there already owns two cars. Long-term financing and escalating prices will eventually kill the market, the cycle having repeated itself in Ground Hog Day fashion every five years since World War II.

Read the whole article here on F&I and Showroom.

Fasten Those Seatbelts

Did you hear those loud thuds? That was the sound of car sales hitting the wall in September and October. It’s the first week of November, and sales don’t look great this month, either. It’s amusing hearing people blaming the slowdown on pre-election jitters. Once it’s over, they say, everything will be great again.

By the time you read this, the election will be over. I’m willing to bet sales didn’t spike up. Hey, I’ve been calling this sales dip for nearly a year now. Now analysts and manufacturers are beginning to accept that the market is reaching saturation. Kelley Blue Book warned 2016 sales will fall short of 2015 levels, and Ford reluctantly admitted U.S. sales are off 10%.

I’ve also warned since May that used-car values were going to take a hit in the fourth quarter. Now many dealers are up to their necks in inventory they should have turned for a short loss. Of course, your pre-owned manager swears he can sell his way out of it.

General Motors took the first hit. And it has been doing some fancy footwork ever since, transferring its losses to dealers as a glut of over-residualized off-lease and fleet units return to the market. Now Ford, Toyota, and Fiat Chrysler are facing the same dilemma.

Read the whole article here on F&I and Showroom.

Harry’s in a Slump

Even the best of us can fall into a slump. But when my friend Harry, a top salesman at his General Motors store in small-town America, messaged me through Facebook a few months ago, I could feel his pain through his words.

“Hey buddy, I am in the worst slump of my sales life. I need some Alpha Dawg help, as I am not sure what to do at this point,” he wrote. “I’m thinking of going to Walmart to try to ‘up’ some people in the parking lot. Jim, I cannot quite put my finger on it, and I would appreciate your tips and help.”

Well, nobody — and I mean nobody — knows prospecting better than I do. I am the master of generating my own business. “Harry, you’re a rock star. It’s time to get on the phone and start calling past customers and asking for sales and referrals,” I replied. “I also want you to start calling people who are selling their trucks on Autotrader and on Craigslist. Tell them you’ll pay cash for their truck. They just need to make an appointment to bring their truck in for a cash offer.”

Harry replied, “Will do, Jim. I never thought of using Autotrader or Craigslist to prospect.”

Read the whole article here on F&I and Showroom.

Time to Pay the Piper

I’m sure you’re all familiar with the story of the Pied Piper of Hamelin. Although more legend than truth, it’s based on events dating back to the Middle Ages, around 1284.

As the story goes, the German town of Hamelin hired a piper who promised to solve it’s rat infestation by luring them into the Weser River with his magical pipe. As the story goes, the dastardly Mayor of Hamelin refused to pay the piper the gold he had promised. In retaliation, the piper used his pipe to enchant the children of the town. They followed him to Keppenberg Mountain, where they were magically swallowed up.

One theory is that the piper was a professional rat catcher, and the children who disappeared were actually victims of the plague the rats carried. The earliest known record of this story is from Hamelin, where the piper’s image was set in stained glass in the town’s now-destroyed church. So, yeah, the pied piper was a real person.

No, I’m not using this month’s column to analyze this Brothers Grimm fairytale. I just see some parallels between the Mayor of Hamelin and the modern car dealer, with the piper being that salesperson or manager who was run out of the business because of an increasingly reduced pay plan.

Read the whole article here on F&I and Showroom.