DALLAS -

Recently an operator came to Ken Shilson and told the founder of the National Alliance of Buy-Here, Pay-Here dealers that he found an easy way to save money on every sale he made at his dealership. Immediately after Shilson applauded the operator on the achievement, he asked the BHPH dealer how he did it.

The dealer indicated his operation doesn’t run a credit report on any potential buyers because “they all have bad credit anyway, so we couldn’t learn anything from it if we did,” according to Shilson’s recap of the encounter. That’s the point where Shilson’s cheering of the decision turned into path of recommendations about how that operator could make a better use of about $5 per deal.

“It’s not a crime in America not to run a credit report from a legal standpoint,” Shilson said. “But it is a crime from a financial standpoint because if you’re making a $10,000 lending decision without any information, you deserve what you get.”

“We’ve just got to be more knowledgeable about what we’re doing if we’re expecting to make better decisions,” he continued.

The valuable information that can be gleaned from a credit report is just one of the many training sessions NABD has planned for its Best Practices Conference, a three-day event that begins on Jan. 18 at the Hilton DFW Lakes Executive Conference Center in Dallas. The credit report session will be hosted by Jennifer Reid, who is the senior director of product marketing for Equifax Automotive Services.

Before joining Equifax, Reid spent several years in the F&I office at franchised dealerships. Reid acknowledged that she, too, had to be trained on how to gather relevant information from a credit report that can give operators a better understanding of the deep subprime customer who might be arriving on their lots.

“It’s really kind of mindboggling as you think about a financial transaction; what hat is the easiest thing on the credit report? It’s the three-digit score,” Reid said.

“Sometimes dealers make the customer all about the score, which especially in the deep subprime space we know that it’s much more than a score,” she continued. “If you’re just using the score, you’re likely not getting the value out of the credit report.

“What is crucial and important is that we help bring the education to understand the data that’s feeding into that score. That’s what’s ultimately going to help dealers, especially buy-here, pay-here dealers, make the right decision,” Reid went on to say.

To peel back what formulated that credit score, Reid plans to explain how the report shows personal information, including address and phone number as well as employment history. She also intends to touch on how credit reports share details about when the customer opened other credit accounts andfor how much, as well as their balances and payment history. Furthermore, Reid plans to touch on how credit reports show any bankruptcies, judgments or other matters handled by a collection agency.

“The customer we see today in the deep subprime is more sophisticated than ever before in understanding what he has to tell you to get that loan,” Shilson said. “You have to be more sophisticated in mining through what he’s telling you and translating that into the credit underwriting decision. That’s where credit bureau reports become so important because they tell the history of where he’s been.

Shilson followed up with two more questions, stating, “If you’re the owner, why would you put millions of dollars at risk without knowing how you’re spending it? If you’re an employee, how can you make a good underwriting decision without understanding how to do these things?”

And Reid made a pledge to any operator who attends this session.

“I’m going to put my dealer hat on when we do this presentation. We want to show how the dealer can incorporate this on a day-to-day basis to help propel his business forward,” she said. “I make a pledge to make sure it’s easily digestible and can walk out of session saying how can I bring this back to my business.”

Other Conference Highlights

For the last four years, NABD hosted a weeklong series of events in Las Vegas where operators can secure a wide array of training. Three of those sessions focused on best operating practices and the fourth on regulatory compliance.

In 2015, the alliance is approaching things a bit differently7 with this new Best Practices Conference, which has the theme, “Working Smarter and Avoiding Compliance Pitfalls.”

Shilson said, “Putting two events side by side puts a lot of stress on our attendees, our exhibitors and the people who are putting on the show. Clearly, we realized that maybe a change in the venues and the offerings would be a wise thing.

“There’s no better way to start off the year than starting it off right. Starting it off right is by getting the necessary training you need for your key people, getting them on the right track,” he continued.

January’s dual-track conference program will include the most popular sessions from these past academies, and some new ones.

The compliance track will feature several of the nation’s leading attorneys and experts including Shaun Petersen, Tom Hudson, and several others who will help attendees learn how to comply with all of the latest legal and regulatory developments.

“It is a ‘must-attend’ for owners, general managers, collectors, compliance officers and key employees,” Shilson said. “These interactive sessions are designed for both experienced operators and those just entering the industry — both independent and franchise operators.

“All attendees will receive a certificate of participation evidencing the training,” Shilson added.

The program begins at 2 p.m. on Jan. 18 and concludes by 1 p.m. on Jan. 20. NABD explained the event is designed to minimize the time key employees are away from their operations.

“What they will learn at this conference will enable them to succeed in today’s highly competitive BHPH marketplace. Learn more, earn more,” Shilson said.

In the best practices track, some of the nation’s best operators will share their tips and techniques, which will help attendees overcome the competitive market challenges from the special finance industry, credit unions and others.

The compliance track will help attendees avoid the legal and regulatory mistakes which are being carefully monitored by the Consumer Financial Protection Bureau, state attorneys general and the Federal Trade Commission.

“All of these sessions will be interactive so attendees can get answers to their questions. Multiple attendees are encouraged to participate in both of the educational tracks,” Shilson said.

The exhibit hall will feature more than 70 leading service and product providers, who will help operators be more successful. The exhibitors include:

— New capital providers
— New technology providers
— Add-on products
— Auctions
— CPA
— Collection and underwriting products.

Two receptions will be held in the exhibit hall to facilitate networking between attendees, sponsors and experts. The program also includes a luncheon on Jan. 19 and a breakfast with exhibitors on Jan. 20.

Exhibit space is limited, so interested sponsors are encouraged to contact Keith Shilson at (832) 767-4759 at their earliest opportunity while space is available.

NABD insisted the Hilton DFW Lakes Executive Conference Center is an exceptional venue located near DFW Airport.

Shilson noted ground transportation is provided between the airport and the hotel, for the attendees’ convenience and savings. Attendees from the Dallas area can enjoy free surface parking at the hotel.

Furthermore, NABD has arranged discounted room rates of $169 per night with no resort fees, while supplies last. In addition, significant attendee discounts are available for registrations received on or before Dec. 19.

 

Conference Agenda

Sunday, Jan. 18

10 a.m. to 8 p.m.: Registration / Networking

Track 1: Operating Best Practices

2 p.m.: How to Succeed in BHPH Today

3 p.m.: Website Best Practices

4 p.m.: Competing Successfully for the Best Customers

5 p.m.: Selling Contracts — What Things to Consider

6 to 8 p.m.: Welcome Reception with Exhibitors

Track 2: Compliance Best Practices

2 p.m.: Compliance Management Systems — What’s Needed

3 p.m.: Handling Customer Complaints Efficiently & Effectively

4 p.m.: IRS Update

5 p.m.: Payment Device Compliance Training

6 to 8 p.m.: Welcome Reception with Exhibitors

Monday, Jan. 19

7:30 a.m. to 9 a.m.: Late Registration

Track 1: Operating Best Practices

7:30 a.m.: Networking Coffee with Exhibitors

9 a.m.: How to Read an Automotive Customer’s Credit Report

10 a.m.: Capital Solutions — Lines of Credit / Floor Plans

11 a.m.: Payment Devices and BHPH Customers

Noon: Exhibit Hall Networking

1:15 p.m.: Networking Luncheon

2:30 p.m.: Monitoring Performance / Benchmarks Update

3:30 p.m. Lowering Reconditioning Costs

4:30 p.m.: Selecting the Right Dealer Management Software

5:15 p.m.: Acquiring the Right Inventory

6 p.m.: Networking Cocktail Reception with Exhibitors

Track 2: Compliance Best Practices

7:30 a.m.: Networking Coffee with Exhibitors

9 a.m.: Pursuing Recoveries — Yes or No?

10 a.m.: Technology Compliance Solutions

11 a.m.: Legal Q&A – Fair Lending Practices

Noon: Networking Luncheon

1:15 p.m.: Exhibit Hall Networking

2:30 p.m.: Compliance Best Practices — A Different Perspective

3:30 p.m.: Handling a Regulatory Investigation / Responding to a CID

4:30 p.m.: Add-On’s — Regulatory Challenges

5:15 p.m.: Regulatory Update

6 p.m.: Networking Cocktail Reception with Exhibitors

Tuesday, Jan. 20

7:30 a.m.: Networking Breakfast with Exhibitors

9 a.m.: Using the Internet to Connect With Customers

10 a.m.: Best Operating Practices Panel

11:15 a.m.: Best Collection Practices Panel

12:15 p.m.: Compliance / Best Operating Practices — Takeaways

1 p.m.: Conference Wrap-Up / Prizes