Just like the dealers he serves, Brent Carmichael found ways to adapt.
The 20 group moderator, consultant and instructor with NCM Associates joined the podcast to describe how dealer gatherings have continued to be beneficial despite the pandemic creating restrictions on travel and indoor assembling.
To listen to this episode, click on the link available below, or visit the Auto Remarketing Podcast page.
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Altamont Capital Partners said the investment firm is “impressed” with Kinetic Advantage, a newly formed floorplan financing company led by industry veterans Marty McFarland, Randy Dohse and Chris Brady.
While specific terms of the transaction were not disclosed on Monday, Altamont announced that it committed “significant equity capital” to Kinetic that so far has a presence in 21 markets.
Led by McFarland, who co-founded Dealer Services Corp. (DSC) in 2005, and joined by Dohse as chief operating officer and Brady as chief information officer who both worked with McFarland at DSC, other members of the highly experienced leadership team at Kinetic are Joe Keadle as senior vice president of of operations and Joe O’Brien as senior vice president of sales and marketing.
The group formed Kinetic with the vision to provide a better floorplan experience to independent dealers by streamlining the customer experience, increasing flexibility and offering increased transparency around fees, all enabled by a market-leading technology platform.
Launched in 21 markets to date, leadership said Kinetic will operate nationally with relationships across auction platforms. In total, the company has secured more than $225 million of initial debt and equity funding to support its expansion.
“Having operated in the auto sector our entire careers, my team and I see a real need for a new provider that can serve as a truly platform agnostic floorplan financing partner to independent dealers,” said McFarland, Kinetic’s chief executive officer.
“We recognize the pain points present in the industry — which have only been exacerbated by the pandemic — and are optimistic that our entry into the market will provide a welcome solution to our new dealer and auction partners,” he continued.
And now Kinetic has more resources for market entry thanks to involvement from Altamont, a private investment firm based in the San Francisco area with more than $2.75 billion of assets under management. Two if tis managing directors discussed the support of Kinetic.
Keoni Schwartz said, “We were impressed by the vision that Marty and his team discussed in our initial dialogue and are thrilled to partner with Kinetic. We have deep familiarity with floorplan financing through our prior investment activity and current portfolio, and recognize the clear market need for a true partner to dealers that will provide transparent pricing, a hassle-free collateral audit process and technology solutions that deliver a more streamlined experience.”
Sam Gaynor added, “Altamont has a track record of backing best-in-class operators in financial services to address market needs, and that is the case with Kinetic. We have committed significant equity capital to the business to support its ambitious loan growth forecast and look forward to leveraging our breadth of operational resources to ensure the success of its national rollout.”
Stephens acted as the exclusive financial advisor and Ropes & Gray and Morrison & Foerster served as legal counsel to Kinetic and Altamont. Financing for the transaction was provided by MidCap Financial.
The company’s annual convention had to be virtual this year to accommodate safety precautions amid the COVID-19 pandemic, but Byrider still honored 15 different franchise store operators.
The chain of buy-here, pay-here stores handed out Franchises of the Year Awards in three separate categories and also gave the Founders Award for operators celebrating a 10- or 20-year anniversary.
The Franchise of the Year award recognizes best overall performance based on internal store rankings and a measure of how the business has contributed to the Byrider franchise community. The recipients included:
— Single point: Keith Kocourek and Jennifer Freiboth in Wausau, Wisc.
— 2-3 stores: Mark Bedgood, Bill Evans and Dale Boone in Longview, Tyler, Waco and Killeen, Texas
— 4 or more stores: Russ Larson and Jeff Lee in Davenport, Iowa as well as Joplin, Springfield and Columbia, Mo.
Recipients of the Founders Award included:
— Jim Kagiliery and Jim Thompson (20th anniversary) with locations in Jacksonville, Port Richey and Pinellas Park, Fla.
— Ward Griffith and Brad Helms (20th anniversary) with locations in Glen Burnie and Randallstown, Md.
— Aaron Zeigler and Todd Simerman (20th anniversary) with locations in Kalamazoo and Lansing, Mich.
— Jim Park and Mark Morris (20th anniversary) who are based in Marietta, Ohio with stores in Parkersburg, South Charleston, Clarksburg, Morgantown and Barboursville, W.Va.
For the past 30 years, the Byrider convention has provided an opportunity for franchisees, suppliers and corporate leaders to join together from across the country for comradery and to acknowledge the significant achievements of individuals who have contributed to the company’s success and celebrate historic milestones.
Although this year’s convention looked a little different, Byrider said it aimed to achieve the same goals.
“We all wish that we could be together this year, but I am so proud of each of the award recipients we were able to acknowledge during our virtual company convention,” Byrider chief executive officer Craig Peters said in a news release
“This has been such a hard year for everyone, and each award recognition is well deserved. Our franchisees faced unprecedented challenges in 2020 and proved they could succeed even in the most extreme of circumstances,” Peters continued.
Byrider vice president of franchising Chris Hadley added, “Congratulations to all of our award recipients! The franchisees are key drivers of our company’s goals.
“It is an understatement to say that 2020 was a curveball, but our franchisees rose to the challenge and delivered the customer service that our customers have come to expect from the Byrider brand,” Hadley went on to say. “I am so encouraged by the perseverance displayed across our company this year and look forward to when we can celebrate in-person again.”
A web browser is the gateway to so many business and personal activities nowadays. And ABCoA wanted to make sure its latest tool for dealerships and subprime finance companies can be utilized through that technology path.
During its recent 2020 User Conference and Deal Pack Boot Camp, ABCoA unveiled its newest dealership and lender management software to more than 900 attendees: Deal Pack Web.
The company highlighted Deal Pack Web is web-based dealership and lender management software that can be accessed using any modern browser. It is hosted securely by ABCoA in conjunction with Amazon Web Services with significant performance and design optimizations.
“Developing a cutting-edge ecosystem of software and payment solutions that enable used car dealerships and subprime finance companies to easily manage all aspects of their business is our mission at ABCoA,” ABCoA president Jonathan Hedy said in a news release.
“When designing a new product, we work hard to ensure feature parity between our current offering (Deal Pack Pro) and our newest offering (Deal Pack Web) at the time of launch,” Hedy continued. “Both products will continue to be developed and supported in parallel — giving users freedom to choose.
“Best of all, users migrating to Deal Pack Web will not endure a complex data conversion, steep learning curve or any price increase whatsoever,” he said.
By using the same MS-SQL database, the company said conversions from Deal Pack Pro to Deal Pack Web are literally seamless with zero data loss.
While the Deal Pack Web user interface is totally new and optimized for modern web browsers, ABCoA pointed out that workflows and navigation remain similar to Deal Pack Pro, so both new and existing users feel comfortable using Deal Pack Web with its intuitive design.
While there is no sunset planned for Deal Pack Pro — it will continue to be offered to customers and enhanced with new features — the company sees Deal Pack Web becoming the preferred choice for users because of its modern design and performance improvements.
The company said Deal Pack Web is available now at rates as low as $75 per month.
Deal Pack first debuted in 2000 as a Windows-based application targeting PC users. This expanded ABCoA’s customer base, who had been accustomed to UNIX-based software utilizing IBM hardware.
Over the years, Deal Pack evolved into ABCoA’s flagship application and remains the only software in the marketplace to offer a fully integrated general ledger capable of over 150,000 journal entries unique to subprime financing.
For more information about ABCoA Deal Pack, call (800) 526-5832 or visit www.abcoa.com.
EFG Companies is fully aware that operators likely are tracking every penny that flows through their businesses nowadays. As a result, this week the company bolstered its formal fraud detection program for dealers, creating significant roadblocks against fraud and theft while protecting dealer reinsurance positions.
EFG highlighted its multi-point program now includes:
— Real-time call and repair order monitoring and auditing
— In-depth training
— Proprietary claims system lockdown protocol
— Cutting-edge virtual claims inspections
EFG said these measures are all designed to save the dealership more than $100,000 annually in fraud and claims savings.
According to the Coalition Against Insurance Fraud, fraud accounts for up to 10% of claims costs for U.S. insurers, with 32% of insurers saying fraud was as high as 20% of claims costs. In the F&I industry, EFG acknowledged those costs directly affect dealership reinsurance positions, impacting the dealer’s bottom line, underwriting profit and investment income.
To protect client reinsurance positions from fraud and ensure quality customer service, the company said every inbound call to EFG’s claims operations is recorded. Furthermore a dedicated audit team reviews more than 300 claims and calls per month, checking for:
— Consistency with process
— Adherence to policy language/contract
— Validation of labor time and parts pricing
— Confirmation of mechanical failure
— Quality assurance of the transaction, including recorded call review
— Fraud detection
EFG went on to mention the company’s trained supervisors review audited calls and claims directly with the associates who handled each claim. The entire claims operations team participates in quarterly training sessions designed to keep them ahead of any industry trends.
With those processes in place, the company said that 72% of claims are handled by EFG in just one phone call. The company added that the cycle time on 75% of EFG claims is one day while 96% of claims are paid electronically within one hour of claim approval.
Additionally, EFG said it restricts the hours in which claims may be approved using a proprietary claims system lock down protocol. With this measure in place, the company said claims submitted after normal business hours will not be processed until the following business day, giving EFG greater control and oversight.
Furthermore, EFG mentioned that it has implemented a virtual claims inspection technology designed to significantly reduce claim cycle time and protect client reinsurance positions from claims fraud.
Based on a two-month internal benchmark dealer analysis of 89 claims, this technology saved EFG clients more than $10,000 in potential fraud and onsite claims cycle time.
With this in place, EFG said it increased its detection rate of claims that require a greater level of investigation by 3.5 times.
“Implementing this technology benefits our clients in three very specific ways,” said John Pappanastos, president and chief executive officer of EFG.
“First, it improves customer satisfaction and retention by creating greater efficiency in a given service appointment,” Pappanastos continued in a news release. “Second, it enables dealerships to service more vehicles, as they are spending less time waiting for approvals and payments. Lastly, and most importantly, our automatic adjudication software dramatically improves fraud detection to protect our clients’ reinsurance positions.”
The software-based technology fits directly into EFG’s existing claims process, enabling the company to process specific claims virtually, eliminating the need for costly, time-consuming claims inspectors.
Additionally, leveraging the virtual inspection database, the company noted its technology can detect fraudulent claims including duplicate claims and claims with false information.
In these instances, EFG said a physical inspection is requested to validate the claim, which can saves the dealer thousands of dollars.
“Our dedication to quality customer service is the reason we are able to better safeguard our clients’ reinsurance positions,” said Jay Hartmann, vice president of operations at EFG.
“We’ve always operated from the principle of keeping a promise to a customer at a time when they need it most,” Hartmann continued. “This results in EFG providing award-winning claims administration, getting customers back on the road and in their vehicles.”
To learn more about EFG, go to www.efgcompanies.com.
Because 2020 has been a trying time for so many operators, Ignite Consulting Partners is offering buy-here, pay-here dealerships and finance companies that specialize in subprime paper the chance to get something valuable that’s tangible, both intellectually and financially.
The compliance firm is joining with four other leading industry service providers for a free, 90-minute educational event where attendees also have the opportunity to win $2,500 in cash prizes.
The event is scheduled for Oct. 27 at 2 p.m. (ET) and is set to include:
— Tax Max: Experts will discuss how dealers can prepare to prosper during what they’re calling the “most important tax season ever.” Tax Max will review the current economic environment and share best practices from its 25 years of experience to educate dealers.
— Secure Close: The firm’s software can help dealers digitize most components of their deal jackets. Secure Close can automate the closing, online application and verification process in a new digital deal jacket, ensuring all components are 100% compliant.
— Ituran USA: For operators still trying to balance productivity versus compliance in their repossession and recovery process, Ituran will explain how technology can increase the effectiveness of this critical BHPH and auto-finance process.
— Buckeye Dealership Consulting: With year-end right around the corner, the firm said now is the time for dealerships to reassess their reinsurance strategy or put one in place before 2021 begins. Buckeye Dealership Consulting plans to share how operators can turn “risk into dollars.”
And speaking of dollars, Ignite Consulting Partners highlighted that $2,500 in prizes will be available to all registrants who attend the entire event, including a grand prize of $1,500 and two additional prizes of $500.
“There’s never been an educational event like this. It’s an opportunity you don't want to miss,” Ignite Consulting Partner said.
Registration for the session can be completed on this website.
Especially now during the coronavirus pandemic, operators need other ways of reaching their customers other than a face-to-face conversation.
Textmaxx Pro, a national text message communication platform with special expertise in the automotive retail marketplace and part of the Leedom Group, recently entered a new partnership with the National Independent Automobile Dealers Association’s National Member Benefit program.
NIADA’s 16,000 independent dealer members now can use Textmaxx Pro’s fully compliant business texting technology to communicate more effectively with their teams, their customers and their prospects.
“We are pleased to welcome Textmaxx Pro to as our newest National Member Benefit partner,” NIADA director of business development James Gibson said in a news release. “NIADA has used this platform’s texting services at NIADA Conventions and other events. It’s been a great way to stay connected with our members and a key ingredient in our mobile communication strategy.”
The company emphasized that text messaging has become a primary means of communication between consumers and the businesses they choose to interact.
Textmaxx Pro’s award-winning platform employs technology that can allow for nearly instantaneous communication with clients. The company said studies have shown more than 90% of individiuals who receive a text read it within three minutes and 40% respond within 15 minutes.
Of those consumers who opt into a text or messaging platform, 77% never opt out, according to Textmaxx Pro.
NIADA members can immediately reap the benefits of the new partnership. Textmaxx Pro is offering complimentary use of the platform for 45 days, and “managed services” support for 60 days.
Textmaxx Pro explained its offer allows for turnkey integration into the business, eliminating administrative work for dealerships and finance companies so they can focus on business with a tool to effectively communicate and engage customers in the current challenging environment.
“The economic fallout of the COVID-19 pandemic has been intense and dramatic, and virtually no business has gone untouched,” Textmaxx Pro chief executive officer Chris Leedom said. “As a longtime automotive retailer who understands the necessity of getting back to business as soon possible after such an economic shock, we’ve pledged to help our clients and NIADA members achieve that through timely, effective communication using our platform.
“We have seen incredible usage and adaptation over the past 60 days with dealers and finance companies using texting as a primary method of communication,” Leedom went on to say.
For more information or to sign up for the complimentary Textmaxx Pro NIADA member benefit, call (866) 367-6889 or text “SMSNIADA” to 95000. To request a demo, visit textmaxxpro.com.
Byrider returned to stake a claim in the Windy City market with a revamped store about 30 minutes from downtown Chicago.
The chain of buy-here, pay-here dealerships recently re-established itself in Bridgeview, Ill. In celebration of the grand opening, Byrider hosted a store event to showcase Bridgeview’s new Byrider store and branding.
Village of Bridgeview trustees also attended the ribbon-cutting ceremony to officially welcome Byrider back to the neighborhood.
The dealership is Byrider’s 32nd corporate-owned store and is located at 9150 South Harlem Avenue in Bridgeview.
Company leadership shared an update earlier this year about its rebranding initiative as well as future growth opportunities.
A couple of years after hosting college basketball personality Dick Vitale as the keynote speaker for its annual convention, the National Independent Automobile Dealers Association is venturing into another part of the sports world for a headliner at this year’s event.
NIADA announced this week that Pro Football Hall of Famer and former Dallas Cowboys wide receiver Michael Irvin will appear during the NIADA/NABD Convention and Expo that runs from June 15-18 in Las Vegas.
Before being a part of three Super Bowl championship teams in Dallas, Irvin also was part of a college football national championship team at the University of Miami. Among his other activities, Irvin appears on television as an analyst on the NFL Network.
“He knows what it takes to be a champion,” NIADA said about Irvin in its announcement. “He is a business man and philanthropist. He loves to inspire others, while traveling around the country speaking to millions of people doing motivational and spiritual sharing.”
NIADA is offering early bird discounts for its annual event at the MGM Grand in Las Vegas. Operators can go to this website for more details.
Craig Peters became Byrider chief executive officer in June 2017. Two years later, the company put in motion a series of changes and improvements.
“We rebranded the business, and we really wanted to make sure that we were in a position to really live up to the brand,” Peters said during a phone interview with BHPH Report in January.
Stemming by results Peters shared, the strategic pivots and modifications are helping Byrider to stay on a profitable path, highlighting double-digit improvements in some performance metrics.
To recap, Byrider explained a year ago that it would be implementing strategic business changes to enhance the customer experience, including an improved website and an optimized purchase process to provide customers with a broader selection of vehicles.
Management indicated the strategic highlights of its brand relaunch included:
• A new brand identity to provide a more contemporary look for customers
• An updated website to provide an improved user experience
• Updated training for all sales associates
• A new purchase procedure to ensure high-quality cars are available for customers
• Technology investments to support car buying, vehicle service and customer experiences
“As a result of the renewed commitment and a lot of the other initiatives that we’ve designed to attract more customers, we’ve seen our corporate earnings have grown (10 times) over the last couple of years. It’s been a very promising run over the last couple years, and 2019 was no exception,” Peters said.
“Customers have responded very positively,” he continued. “We’ve increased transparency. We’ve improved the sales process. We also have a more attractive mix of inventory. It’s all helped to drive our same-store sales up in 2019 by 10%, attracting more customers and converting more of those approvals into sales. It’s been quite successful for us.”
And successful not just for Byrider’s corporate locations but also the ones operated by its network of franchisees. Of that network, 47% have ran their Byrider franchise for 10 years or longer, according to Byrider vice president of franchising Chris Hadley.
Hadley joined the conversation to highlight how Byrider’s newest location in Tennessee and Wisconsin are all off to flourishing starts this year.
“When you start to look at some of the main reasons why and we’re delivering those results, first and foremost is probably the playbook that we have in place for new operators,” Hadley said. “We’ve been in business now for 30 years, and we continually work to upgrade our playbook and make sure that our key learnings are delivered to our franchisees and help them have successful openings.
“We have a really experienced franchise support staff that works really closely with these franchisees, not only before they open, but after they opened,” he continued. “We also spend time here in Carmel with them. We go out and visit them, and we continue to make sure that they’re looking for the things that you need to as you open up a new store.
“We do have a tremendous asset as well and our franchise body,” Hadley went on to say. “One of our biggest benefits to our franchise system is our franchisees are very collaborative. They’re willing to share their experience and take their best practices and help new franchisees.”
US Labor Department registers Byrider’s service technician apprenticeship program
Byrider also addressed another important element of its business beyond the financing and retailing of vehicles.
As part of National Apprenticeship Week last November, Byrider announced its service technician apprenticeship program received registration by the U.S. Department of Labor. The company underwent a rigorous process that took over five months to complete, in partnership with Ivy Tech Community College in central Indiana, one of the largest single-accredited statewide community college systems in the country.
The apprenticeship program is slated to begin at select Byrider locations in the greater Indianapolis area. Over time, the company highlighted the program will expand to include apprenticeship programs in other states and partnerships with a broad range of technical schools.
As part of the program, Byrider will offer tuition assistance for students and provide an automotive toolkit for apprentices upon completion of the program, which can cost upwards of $2,000.
“We’re proud to announce the first-ever Byrider apprenticeship program registered by the Department of Labor. It seems fitting to announce our registration during this national week that shines a light on the importance of training and educating students about apprentice opportunities that allow them to gain valuable skills and prepare for careers in a variety of industries,” Peters said at the time of the announcement.
“As we look to the future, creating an avenue for people to learn hands-on job skills in automotive repair will position students to grow and prosper in an industry where highly skilled technicians are desperately needed,” Peters continued.
Byrider explained that achieving Department of Labor Registration involved creating program standards by identifying key competencies, as well as designing a framework of both on-the-job and related training to ensure each apprentice is successful.
The company noted the Byrider apprenticeship program is unique in that it will provide students the opportunity to work on a wide range of vehicle models, unlike most other automotive apprenticeships that focus primarily on just one vehicle brand. This allows students in the Byrider program to obtain broad experience on cars that range in age, make and model, which can enhance the student’s marketability and provide more job opportunities.
Official added the Department of Labor registers on average 1,600 apprenticeship programs annually across the nation. The goal of the program is to help ensure a comprehensive apprentice program experience for students and provide companies with high quality, skilled employees in a variety of industries.
Curbing fraud with new solution
Another business component where Byrider made investment is looking to keep fraud out of its portfolio.
Late last year, Byrider selected PointPredictive’s risk scoring solutions to help better segment high- and low-risk applications and dealers to improve profitability, expand loan availability and enhance the lending experience for both consumers and dealers.
As part of the integration, Byrider will use the company’s scoring solution — Auto Fraud Manager with Auto Fraud Alert Reporting — to identify misrepresentation and prevent default on high-risk applications while streamlining the approval process of low-risk applications to improve and expedite both the consumer and dealer loan funding experience, ultimately expanding their loan portfolio profitably.
Byrider selected PointPredictive’s machine learning AI scoring after extensive testing of the solution and evaluating retrospective results.
“In our retrospective test with PointPredictive, we saw a significant lift in identifying defaults tied to misrepresentation and fraud,” Byrider chief risk officer Gary Harmon said.
PointPredictive launched Auto Fraud Manager with Auto Fraud Alert Reporting to help address the $6 billion annual problem of misrepresentation and fraud that plagues the auto lending industry. The solution uses machine learning to mine historical data from applications across the industry to pinpoint where fraud is happening.
More than 60 million applications have been evaluated and scored by the unique machine learning AI system which is continuously learning new patterns as they emerge.
“PointPredictive is excited to partner with Byrider to help them achieve better relationships with their borrowers and their dealer network,” PointPredictive chief executive officer Tim Grace said.
“Our solutions have proven to help lenders reduce their risk of early defaulted loans and, in the process, help them streamline loans for reduced stipulations and friction in the lending process. By better targeting risk, the end beneficiaries are their dealers and borrowers who can see a reduction in the time it takes to fund loans,” Grace went on to say.
Reflections of time with Byrider
As referenced previously, Peters is quickly approaching three years as the top executive at Byrider. He discussed what the experience with Byrider has been like compared to his previous time in the automotive industry.
“I used to go to NADA years and years ago and it was largely about the car itself,” Peters said. “You go to NADA these past couple of years and it’s dominated by technology. Just the amount of disruption and innovation, that was a key learning for me because that it really needs to form our long-term strategy, ho we continue to invest and building out technology, building out data and analytics capabilities, enhancing our digital retailing capabilities.
“I think the key thing is you’ve got to continue to innovate to stay ahead of the of the competition,” he added.
No matter what future changes might be down the road, Peters is confident in the group Byrider has.
“I work for a great company. We’ve got a strong leadership team. I work alongside a terrific set of strategic partners that support our business and help us grow, and we have a great set of franchise owners as well,” Peters said.
“The enhancements we’ve made to the retail model, attracting new customers, it’s been quite transformative for us and that’s been very exciting to be involved with,” he went on to say.
