Ken Shilson is giving operators an offer perhaps most of their customers might want — a money-back guarantee.
To reinforce what the National Alliance of Buy-Here, Pay-Here Dealers is orchestrating for its upcoming East Coast Conference, Shilson indicated this week that dealer attendees will be able to gather these seven elements to help their business or the NABD founder and president will give them a refund.
Shilson highlighted BHPH operators who come to the event set for Nov. 3-5 in Orlando, Fla., will receive a 12-step roadmap to cost-effective BHPH compliance; a strategy that operators can take back to their stores and implement now.
Furthermore, Shilson pointed out attendees will gather best operating practice tips to compete more successfully in 2016, including:
— Underwriting recommendations that will help “keep them sold”
— Marketing strategies to gain lost market share
— New inventory sourcing and reconditioning tools and techniques for the selling season
— Personal networking opportunities with leading capital providers
— New technology products and services in a sold-out exhibit hall
— Industry benchmarks and other BHPH trends
“Both the workshops and the general sessions feature new content never presented before, and important information that will help attendees succeed,” Shilson said.
The NABD East Coast Conference is scheduled for Nov. 3-5 at the Wyndham Orlando Resort International Drive in Orlando, Fla.
The conference ends at 1 p.m. on Nov. 5 to facilitate travel.
NABD highlighted the Wyndham Orlando Resort International Drive is newly renovated and located next to the hottest new attraction, the Orlando Eye. Shuttle service is available to Disney properties and Universal Studios.
NABD has arranged discounted room rates of only $149 per night with no resort fees, but the special offer expires this week. Attendees can go online to make reservations or by calling (800) 421-8001 and referencing code NABD.
The complete agenda and speaker information is posted and will be continually updated on the NABD website at www.bhphinfo.com. Registrations can be made at the website or by calling (832) 767-4759.
“Don’t miss this conference is you want to be more successful in 2016,” said Shilson, who discussed more highlights about the upcoming conference in the video at the top of this page.
The National Alliance of Buy-Here, Pay-Here Dealers is bringing together seven of the most experienced, knowledgeable legal experts who have several decades of collective experience in the auto regulatory world for the 12th annual NABD East Coast Conference.
The conference theme is “More Success, Less Risk,” and the event is designed for both new and experienced operators. Organizers insisted BHPH dealerships of all sizes will benefit from the conference’s compliance track dubbed Compliance University from the knowledge to be shared by:
— Tom Hudson of Hudson Cook
— Gerald Sachs of Paul Hastings
— Terry O’Loughlin of Reynolds and Reynolds
— David Bafumo of FNI Inc.
— Mark Edelman of McGlinchey Stafford
— Allen Denson of Hudson Cook
— Trisha Cacciola of Hudson Cook
And more legal experts are expected to join other conference panels, too.
”This is the only compliance training designed specifically for BHPH operators. This is the greatest assembly of legal talent at one NABD event that we have ever assembled,” NABD president and founder Ken Shilson said.
NABD East Coast Conference is scheduled for Nov. 3-5 at the Wyndham Orlando Resort International Drive in Orlando, Fla.
Beyond the segment labeled Compliance University, the conference features dual-track workshop sessions starting at 3 p.m. ET on Nov. 3, covering BHPH best operating practices and compliance. The program features many of the nation’s leading attorneys, experts and successful operators who will share their latest tips and insights that bring success in the highly competitive subprime auto finance market of today.
The conference also will open with a first-time attendee reception.
“The compliance workshops will also include affordable compliance solutions which will help operators avoid legal and regulatory mistakes that can cost millions of dollars,” said Shilson, who added that upon completion, all attendees will receive a compliance certificate that proves their participation.
The Best Operating Track includes sessions on:
— Website design and content
— Technology solutions
— Payment devices
— Marketing strategies to gain market share
— Inventory sourcing and reconditioning
— Capital
Shilson highlighted these sessions feature leading experts and operators who will share ideas that succeed in the current environment.
“The workshops will not be infomercials and will benefit both owners and all key employees,” he said.
During the second half of the conference, the dual tracks will combine into the general sessions covering:
— Lease-here, pay-here program
— Using new technology to finance and source inventory
— Collections
— Repossessions
— Payment device best practices
— New benchmarks and trends update
— Accounting /tax tips and update
— Regulatory developments forecast
— Underwriting tips
— Top take-away session
“Both the workshops and the general sessions feature new content never presented before, and important information that will help attendees succeed,” Shilson said.
The conference ends at 1 p.m. on Nov. 5 to facilitate travel.
The exhibit hall will include all the latest products and services that increase BHPH profits and cash flow. Two receptions, a breakfast and a luncheon are included that are designed to allow attendees to network with other operators, experts and exhibitors.
NABD highlighted the Wyndham Orlando Resort International Drive is newly renovated and located next to the hottest new attraction, the Orlando Eye. Shuttle service is available to Disney properties and Universal Studios. NABD has arranged discounted room rates of only $149 per night with no resort fees.
“Attendees are encouraged to bring their families to enjoy the nation’s most popular family destination — Orlando,” Shilson said.
“Successful BHPH operators today must understand and adapt to the changing market environment. The old ways aren’t working anymore,” he continued. “This conference will definitely help attendees compete more successfully while avoiding the new regulatory pitfalls. The Orlando destination is an attractive and affordable venue.”
The complete agenda and speaker information is posted and will be continually updated on the NABD website at www.bhphinfo.com. Registrations can be made at the website or by calling (832) 767-4759.
Space and room availability is limited and early registration discounts are expiring soon. Space and room availability is limited and early registration discounts are expiring soon.
Exhibitors can call Keith Shilson at (832) 767-4759 to learn more about space still available.
With the closing weekend of August upon us, Hudson Cook senior partner and chairman Tom Hudson shared his Top 10 list of practices buy-here, pay-here dealers need to recognize so they not only avoid a bad month, but the possibility of being on their way out of business.
Items such as promissory notes, deal jackets and other written policies are all mentioned by Hudson, who will deliver a keynote speech with his predictions for the next five years in the business at Innovate: The Independent Dealer Industry Conference on Sept. 20-23 in Fort Worth, Texas.
“In my 42 years practicing consumer financial services law, I've seen a lot of egregious violations by dealers, but these top them all," Hudson said.
“Let's face it — the newer regulations are highly complicated,” he continued. “It can be tempting to just bury your head in the sand and pretend you’re doing fine. If you choose that route, though, it's only a matter of time before you get a big surprise in the form of an investigation or lawsuit.”
Hudson previewed his Innovate keynote speech by outlining these clues that your dealership might use to turn an extra vehicle or two to close the month but that might soon lead to an operation shut down:
1. You don't know the difference between promissory notes and retail installment contracts.
Many dealers call the contracts that buyers sign “notes,” but they aren’t. They are retail installment contracts. Notes and retail installment contracts are completely different documents, subject to different laws. Dealers who trade vehicles for signed contracts need to understand those contracts.
2. You charge cash buyers less than you charge buyers who finance.
This is one of the biggest red flags in today’s market and must be avoided at all costs. If the financed price is higher, regulators may conclude you added an undisclosed finance charge. You may also be in violation of usury laws.
3. Your idea of obtaining documents that comply with state and federal law is to photocopy the deal jacket documents from the last place you worked.
Many well-established dealers — both buy-here, pay-here and franchised — use documents that are outdated, designed for use in other states, copyrighted, crafted by lawyers who don't know what they are doing, or are otherwise invalid.
4. You don't know the difference between precomputed retail installment contracts and interest-bearing (so called "simple interest") retail installment contracts.
Some dealers use precomputed contracts and service them as interest-bearing contracts, and vice versa. This is a huge no-no.
5. You think all your prior experience in the car business, which consists only of dealerships that sell retail installment contracts to unrelated financing sources, is enough to get by.
If you are new to the buy-here, pay-here world, you absolutely must learn how the activities of servicing, collections, repossession and sale of repossessed vehicles are regulated. If not, you will be flying blind with regard to half of your business.
6. You don't budget for legal compliance costs in your ongoing expenses.
In addition to up-front formal training, you must pay real attention to compliance issues by participating in dealer associations and 20 Groups; reading industry publications; and creating, implementing, updating and funding a credible compliance program for your dealership. Dealers should also prioritize in-person training at conferences like Innovate with a wide variety of compliance courses.
7. Your accountant and your lawyer are not well-versed in the car business.
Missing critical tax or compliance advice because your accountant and/or attorney is inexperienced with dealers is a shortcut to the poorhouse.
8. You think you can just buy your advertising from an ad agency without taking responsibility for the content of the ads.
Operation Ruse Control, led by the Federal Trade Commission and 32 law enforcement partners, resulted in 252 enforcement actions against dealers. The FTC is on a tear over dealer ads, and dealers need to understand that they are responsible for what their ad agencies do.
9. You don't have written policies for privacy safeguarding, red flags, underwriting, servicing and all your other compliance responsibilities.
Maintaining up-to-date policies is one of the clearest ways you can communicate your good faith effort to comply with regulations.
10. You think you don't need to worry about this compliance stuff because you “take good care” of your customers.
Unfortunately, it just doesn't work that way anymore. Inevitably, something will tip off a lawyer or regulator, and you will wish you had your legal house in order.
To get more detailed, real-world knowledge on buy-here, pay-here law, operators can join Hudson and some of the most-respected legal experts in the country at Innovate: The Independent Dealer Industry Conference, Sept. 20-23 in Fort Worth, Texas.
The event will feature more than 80 different classes — all more than an hour long — that dive deep into compliance, collections, finance, accounting, operations and more.
Officials insisted Innovate is one of the only events or independent dealers and finance companies with two full compliance tracks, which by themselves cover 16-20 different topics.
“In total, attendees will access more than $10,000 in legal insight for the price of admission,” organizers said.
AutoStar and DealerSocket, its parent company, expect more than 600 attendees at this year's conference, including major exhibitors and financial institutions that will showcase the latest dealership technology, best practices and industry solutions.
To view the full schedule or buy tickets, visit www.MyInnovate2015.com.
Perhaps the most recent quarterly performance by America’s Car-Mart shows that GPS technology cannot singlehandedly improve charge-offs and credit losses for buy-here, pay-here operators.
During a quarter where retail sales and revenue improved, Car-Mart executives said they were “very disappointed” with net charge-offs as a percent of average finance receivables rising 7.8 percent in the first quarter of their 2016 fiscal year. That reading is up from 6.3 percent for the prior year quarter.
Also frustrating Car-Mart leadership was the Q1 provision for credit losses coming in at 27.7 percent of sales versus 24.6 percent for the same quarter a year earlier.
Elsewhere on the performance side, the company indicated collections as a percentage of average finance receivables remained relatively flat at 14.0 percent from 14.1 percent for the prior year quarter. Furthermore, Car-Mart highlighted that its accounts more than 30 days past due dropped to 3.8 percent from 5.8 percent as of April 30, a move that represented a decrease of $7.7 million.
Car-Mart president and chief executive officer William “Hank” Henderson tried to explain what happened as the company opened its fiscal year.
“We certainly anticipated some elevated loss levels as we started the quarter with a high 5.8 percent of our finance receivables being 30-plus days past due,” Henderson said. “Also, as we had mentioned, we were somewhat disappointed in our collections for the fourth quarter and knew that we were facing some challenges heading into this year.
“Operational inconsistencies among dealerships, including issues with the effective utilization of our GPS technology in our collection practices, as well as other distractions related to policy changes and our software implementation, contributed to the poor results,” he continued.
“Additionally, the competitive landscape remains intense, but we feel that our issues are more attributable to our own lack of consistent blocking and tackling,” Henderson went on to say.
Earlier this calendar year, Car-Mart indicated that it had about 80 percent of its inventory equipped with GPS technology with plans to have devices installed on all of its retail units within six months. That process along with several other operational and technology changes appear to be impacting the company’s performance.
“We have spent several years now building an infrastructure to support a larger customer base,” Car-Mart chief financial officer Jeff Williams said before rattling off eight specific areas, including:
— Information technology
— Compliance
— Associate support and training
— GPS technology
— Centralization of non-core lot level administrative functions
— Manager-in-training program
— Customer payment technology
— Credit reporting
“These investments were made to provide better service to our customers and our field associates and to allow for productivity improvements for existing dealerships as well as to support growth from new dealership openings,” Williams continued. “While we are disappointed with the current quarter's results, we are always looking long-term and do expect that we will see benefit from these investments in the future
“The competitive landscape remains challenging, but as Hank mentioned, we know that we can do so much better at helping our customers succeed,” Williams went on to say. “Our bottom line results are always dependent on our customers succeeding on their individual contracts with us.”
As of the close of Q1, Car-Mart reported its active accounts base stood at approximately 65,600, pushed in part by a retail unit sales increase of 6.6 percent to 12,244 units. Company dealerships turned an average of 28.9 units per month in the first quarter, up slightly from 28.4 units a year earlier and 28.1 units in the previous quarter.
The sales performance lifted company revenue 8.9 percent to $143 million, leaving Car-Mart with $4.6 million in net income or 52 cents per diluted share.
Car-Mart now has 143 dealerships in its network after bringing aboard a store in Rolla, Mo., on Aug. 14. The company’s footprint is on track to expand to 11 states as its growth pipeline eight new locations, including one in Iowa.
As the company irons out its processes — including improved underwriting and leveraging of GPS technology, Henderson is confident in what Car-Mart can accomplish going forward.
“We are disappointed with our results for the quarter, but we are not deterred. We have opened almost 50 stores in the past five years and the majority of which of have done very well, and you can’t have that level of growth without a few bumps in the road,” Henderson said.
"We have great shared vision of the company,” he continued. “We are building an extremely capable and dedicated team to get us here. We have a solid plan in place to correct our shortcomings and we will work it intensely.
“When we fall short and make a mistake, we gained valuable experience that makes us better provided the course that we learned from it,” Henderson went on to say. “This recent quarter has gotten our attention drawn to exactly where it needs to be and I fully expect we will better for it.”
Buy-here, pay-here dealers who use FEX DMS or AutoStar Solutions and have questions about their store software platforms now that they're both owned by DealerSocket have the opportunity to see how the company’s future single dealer management system is going to operate.
DealerSocket announced on Friday that it will merge the best elements of FEX DMS and AutoStar Solutions software into a single DMS the company says will be tailored for independent and BHPH dealers. DealerSocket acquired FEX DMS back in February and then brought AutoStar into its portfolio in May.
“It’s so interesting in that we’ve gotten those two companies together,” DealerSocket chief executive officer Jonathan Ord told BHPH Report during a conversation at the annual conference hosted by the National Alliance of Buy-Here, Pay-Here Dealers in Las Vegas only days after the second DMS acquisition.
“During a joint meeting we said we’re getting all the smartest guys in the room, and we’re building our next generation product that’s going to really help buy-here, pay-here dealers,” Ord continued. “Everyone just lit up. They’re all really excited about it. It was so great to see their enthusiasm and reignition into the space.
“A lot of them have been doing it for quite a long time, and a lot have come to us after the acquisition saying they’ve never been more excited about where going from a product perspective with a rejuvenation of life into both companies,” Ord went on to say.
DealerSocket will reveal the name and specific features of its new DMS, along with details on the future of FEX DMS and AutoStar software, in a special live presentation followed by open Q&A session at the upcoming Texas Independent Automobile Dealers Association (TIADA) conference. Both local and out-of-state dealers are invited to attend the free event that’s separate from the dealer association’s conference.
The session is scheduled for Aug. 10 beginning at 11:50 a.m. It will be held at JW Marriott San Antonio Hill Country Resort and Spa, the site of TIADA’s event.
Presenters include:
— Matt Redden, chief sales and marketing officer at DealerSocket
— Greg Levi, director of product management at DealerSocket and former director of product management at Finance Express
— Antonio Rajan, vice president of independent sales at DealerSocket and former chief revenue officer at AutoStar Solutions
"Nearly 2,000 independent dealerships across the country — and at least one out of every three TIADA members — use either FEX DMS or AutoStar Solutions,” Rajan said. “We’re thrilled to meet with our customers in person and share the future roadmap of both brands.
“This is the first time we will address all the questions they've been wondering about. What do these acquisitions mean to me? Will I be able to keep my current DMS? And for how long? What will the new software look like?"
Admission to the presentation and Q&A is free, and attendance at the TIADA conference is not required. However, officials indicated dealers who attend both will receive a $300 discount for the full conference. They said a discount code will be emailed upon registration for the DealerSocket session, and the discount is valid for both local and out-of-state dealers.
"The landscape for independent dealers is changing — from compliance to competition for inventory and customers, as well as access to tools to compete in the marketplace,” Levi said.
“DealerSocket's integrated approach to managing inventory and customers, marketing, and loan servicing is uncharted territory in the independent dealer market. We look forward to previewing these exciting plans for our loyal users."
To register for the special session, visit id.dealersocket.com/TIADA.
DealerSocket will soon announce dates for presentations at additional state independent dealer association conferences.
The company will also discuss its independent DMS, along with the future of FEX DMS and AutoStar, at its two upcoming conferences.
User Summit 2015 will be Aug. 18-20 in San Diego. For more information, visit usersummit.dealersocket.com.
INNOVATE: The Independent Dealer Industry Conference will be Sept. 20-23 in Fort Worth, Texas. For more information, visit www.myinnovate2015.com.
Mike Marak is the president of M&M Auto Sales in Hiawatha, Iowa, boasting more than three decades of buy-here, pay-here experience.
Marak chose to spend three days in Dallas last week for the Best Practices Conference hosted by the National Alliance of Buy-Here, Pay-Here Dealers. Judging by what he shared with NABD afterward, it seems to have been time and money well spent.
“Everything was great,” Marak said. “I did not hear one bad speaker. I learned something in every session, and I have been in the business 31 years.”
NABD highlighted that BHPH operators from throughout United States attended the three-day event, which wrapped up on Jan. 20. The dual-track program focused on best operating practices and compliance for BHPH.
And Marak wasn’t the only dealer who thought spending time away from the store to come and gather information on compliance, collections and underwriting was a prudent move.
“NABD is the leading voice and authority in our industry. There is no close second,” said Al Gardiner, owner of St. Mary’s Motors in Lexington Park, Md. “This show and other NABD contributions are an absolute must for dealers whose livelihood depends on the BHPH industry.”
Jack Bridges, chief operating officer of Credit Now Auto Co. and Atlantic Acceptance Corp., offered a similar assessment.
“Having attended virtually every one of (NABD’s) national conferences over the years, I came expecting to gather a wealth of information and that is exactly what the show delivered and so much more that it’s simply amazing,” Bridges said.
“(NABD’s) conferences are, simply stated, a must for anyone that is serious about learning, improving and growing their BHPH business,” he continued. “In fact, I would say a lot of Credit Now Auto Company’s success over these many years is due in a large part to what we have learned at (NABD's) shows, then brought home and put into practice.”
NABD founder and president Ken Shilson indicated the educational sessions featured 11 dual-track workshops on Sunday afternoon and Monday.
Compliance topics included legal and regulatory updates, handling regulatory investigations, compliance systems and an IRS update. The best operating practices sessions focused on areas such as the Internet, integrated technology solutions, add-ons, maximizing recoveries, performance benchmarks, inventory and reconditioning and capital alternatives.
On Tuesday morning, the workshop sessions combined into a single track, featuring both best operating and best collections panels and a presentation on the new AutoTrader.com Buy-Here, Pay-Here Center.
The best practices sessions featured many of the nation’s most successful operators and industry experts. The compliance program included leading attorneys Tom Hudson, Terry O’Loughlin, Patty Covington, Eric Johnson, David Silverman, Myles Stevenson, Gerald Sachs and other chief compliance officers.
“All the sessions were interactive so attendees could ask questions and get answers to their questions on how to become compliant, and ways to improve their profitability and cash flow, and regain market share,” Shilson said.
“These sessions helped attendees take a proactive approach toward making 2015 a better year,” he continued. “In the highly competitive environment of today, training like this has never been more important. Attendees left with many new ways to increase market share and to avoid legal and regulatory mistakes that could cost them millions.”
Joyce Caudill, vice president of Richwood Acceptance in Walton, Ky., insisted that Shilson and NABD “have their fingers on the pulse of the BHPH industry.”
Caudill emphasized how discussions about the Consumer Financial Protection Bureau taking a great interest in the BHPH space are some of the main takeaways she had from the event.
“As our industry continues to come under close scrutiny and tighter regulation, real-time information on what the CFPB and other regulators are doing, planning on doing and honing in on, is more important than ever,” Caudill said. “The legal experts on the panel were top notch, not afraid to answer the hard questions and get us all on the right path to compliance.
“The technology experts have listened and are treated our business as the real player it is for even more credit challenged customers than ever,” she continued. “Putting all the information in a friendly, exciting format, at one place makes dealer education easier than ever. I tell everyone I know in the business that these conferences are a ‘must do,’ except our competition.”
And dealers weren’t the only attendees who gained valuable experiences out of NABD’s latest event offering. Mike Downey is the vice president of sales and marketing at Auto Master Systems.
“It is obvious that NABD has a great understanding of the needs of today’s dealers by dedicating a conference to the important topics surrounding operation and compliance,” Downey said. “The quality of content offered, and their selection of highly qualified speakers makes attending this conference an easy decision for BHPH operators who want to improve their business.
“We’re proud to be a part of it and look forward to the next one,” Downey went on to say.
And Tax Refund Services and TaxMax founder Bill Neylan added, “The NABD show is a must for all buy-here, pay-here dealers, as well as any vendor in the industry who are looking to better their business.”
NABD announced it will hold its 17th annual National Conference on May 19 through May 21 at the Wynn Hotel Resort and Casino in Las Vegas.
“The Wynn is the finest, five-star, Las Vegas hotel and casino. NABD offers unprecedented room discounts with no resort fees while supplies last,” Shilson said.
In addition, NABD plans to hold a BHPH Boot Camp on Aug. 22 and 23 in Monroe, N.C.
For more information on these upcoming events, visit www.bhphinfo.com or call (832) 767-4759.
Just before Thanksgiving arrives and the holiday season cranks up in earnest, the National Alliance of Buy-Here, Pay-Here Dealers is giving veteran operators as well as professionals who want to close 2014 by learning more about the industry the chance to see all elements of a thriving operation in action.
NABD's next BHPH Boot Camp is set for Nov. 8 and 9 in Monroe, N.C., just east of Charlotte. Attendees will have the opportunity to examine all parts of the BHPH operation of Ingram Walters, who has been associated with NABD since its inception and has been running his own dealerships for more than 20 years.
Doug Radcliff went to a previous boot camp. Radcliff has been the general manager of the Sam Swope Advantage Plan in Louisville, Ky., for more than 20 years. The Sam Swope Automotive Group is the largest franchised dealer group in Kentucky and has a thriving BHPH division.
“I told Ingram that I’ve been doing this for 22 years. I was hoping to come down and maybe get one or two little pointers here and there. Fortunately, I came back with 100 of them,” Radcliff said.
“We’re not in a 20 group for buy-here, pay-here, so their boot camp and seeing the operation from start to finish was extremely good and very helpful,” Radcliff added.
Walters, along with NABD founder Ken Shilson, intend to use the two days to outline every step that it takes to create a successful BHPH store, from establishing a related finance company, regulatory compliance, underwriting and collections, to finding inventory that will turn quickly.
Space is limited for this session. Dealers and other interested individuals can register for the boot camp by visiting bhphinfo.com.
NABD Announces Details of BHPH Best Practices Conference
While also getting ready for that boot camp, NABD also released early details of its BHPH Best Practices Conference, which will be at the Hilton DFW Lakes Executive Conference Center in Dallas on Jan 18 through Jan. 20. The conference theme will be, “Working Smarter and Avoiding Compliance Pitfalls.”
For the last four years, NABD has hosted several popular BHPH Dealer Academies prior to their annual National BHPH Conference each May in Las Vegas. Three of those focused on “best operating practices” and the fourth on regulatory compliance.
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 continued.
The program begins at 2 p.m. on Jan 18 and concludes by 1 p.m. on Jan. 20 and 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 that 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.
NABD insisted 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.
The exhibit hall will feature more than 70 leading service and product providers, who will help operators be more successful, including: new capital providers, new technologies, add-on products, auctions, accountants, collection and underwriting products, and much more.
Two receptions will be held in the exhibit hall to facilitate networking between attendees, sponsors and experts. The program also includes a luncheon on Monday and a breakfast with exhibitors on Tuesday morning.
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 highlighted the Hilton DFW Lakes Executive Conference Center is an exceptional venue located near DFW International Airport. Ground transportation is provided between the airport and the hotel for the attendees’ convenience and savings. Attendees from the Dallas area will enjoy free surface parking at the hotel.
NABD has arranged discounted room rates of only $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. A preliminary agenda and more information is available online at www.bhphinfo.com or by calling (832) 767-4759.
Compliance technology provider SecureClose wrapped up AutoStar Solutions’ seventh annual Innovate conference on Wednesday with a list of 10 recommendations for how to significantly decrease risk from lawsuits and government actions pertaining to the F&I closing process.
Brent Chavez and Joe Perkins of SecureClose first cited the latest move by the Consumer Financial Protection Bureau to expand its supervision to large non-bank auto finance companies. Chavez said dealers and finance companies have experienced more expansion of government regulation in the last several years than at any other time in his career.
As a result, Chavez urged dealers to:
1. Record your sale closings.
2. Script your disclosures.
3. Document your training.
4. Establish clear processes and procedures.
5. Get an outside compliance review.
6. Appoint a compliance manager.
7. Develop a customer complaint procedure and log.
8. Manage your vendor compliance.
9. Automate processes for improved accuracy and consistency.
10. Implement a proactive review process to catch violations before it’s too late.
“As a car dealer myself for more than 20 years, I understand the pressures dealers face on a daily basis,” SecureClose founder Ace Christian said. “To be quite honest, the last five years have been the toughest for me due to changes in the market, increased competition, hard-to-find inventory and the biggest one — government regulation.”
Christian said the F&I office is one of the most heavily regulated areas of a dealership. With so many constantly changing checklists and disclosures — combined with the element of human error and fatigue at the end of a long day — Christian acknowledged violations are bound to happen.
Christian said dealers need a way to automate the closing process to ensure consistency, along with a reliable method to record closings and store them for easy access.
“Video recordings by themselves are not a complete solution,” he said. “I can’t tell you how many times I’ve seen dealers videotape closings that — when watched back later — clearly show violations. Not to mention the technical difficulties inherent with quality video coverage and storage.
“Training also doesn’t fix the fact that your F&I guy is a human being,” Christian said. “After a 12-hour day, he’s tired. He wants to go home. The customer wants to go home. So maybe he forgets a point or two. What’s the big deal? Well, when that forgetfulness comes back to bite you in a year after the customer has sued and that F&I guy no longer works for you, it is a huge deal.”
Christian demonstrated for attendees how SecureClose can help dealers ensure every closing is fully compliant by utilizing computer screens that verbally walk customers through each closing document. He explained all information used adheres to the latest national and state-specific regulations. Buyers can pause or rewind as many times as they wish to make sure they understand the contract terms — but no fast-forwarding or skipping any steps.
An electronic signature tablet captures signatures and places them in the appropriate spots in the document. A front-facing camera records audio and video of the entire process, including everything shown and done on the system screen.
Once the presentation is complete and all documents signed, audio and video of the customer plus the recording of the on-screen activity can be combined in a comprehensive ClosingRecord, which is stored on a secure online server for future retrieval. The dealer or customer can view this complete record at any time.
“SecureClose protects the customer and the dealer from being taken advantage of,” Christian said. “It’s the answer to most of the regulations coming out of Washington, D.C., right now. And it’s certainly a vital component of any dealership that wants to stop lawsuits before they start.”
Christian has used various versions of SecureClose at his dealership in Arizona for the past year.
“I received several attorney demand letters during that time. I just sent them the ClosingRecord for those deals, and I never heard from them again,” Christian said.
Steve Levine is chief legal officer for AutoStar Solutions, which acquired a 50-percent stake in SecureClose earlier this year. Levine is expecting finance companies will champion SecureClose to their dealers.
“It’s not just a buy-here, pay-here solution,” Levine said. “When retail dealers use this product, finance companies can have confidence their dealers conducted a fully compliant closing. That means no complaints from the consumer six months down the road, after the lender has already acquired the contract.”
SecureClose is available nationwide. Levine said the company is following an aggressive installation schedule to make SecureClose available to dealers of all sizes.
Collecting More During Payment Proccess
Elsewhere at the Innovate conference, Susan Perlmutter, chief revenue officer for Sigma Payment Solutions, shared with BHPH dealers several strategies for lowering the costs of payment acceptance.
“Once you combine a collector’s hourly pay, overhead and the cost of the credit card payment, you’re looking at more than $6 per payment,” Perlmutter said. “You can offset that amount by allowing a provider such as Sigma to pass a convenience fee to the consumer.
“The other option is self-service consumer payment channels,” she continued. “This empowers your customer to pay with no staff interaction. No human error, no vacation or sick days. You can accept payments 24 hours a day, seven days a week, 365 days a year. Your collectors can then focus their attention on delinquent customers.”
Sigma Payment Solutions’ automated options include pay-by-text, kiosks and Interactive Voice Response (IVR). Perlmutter pointed out each of these choices can help dealers bring costs down to 55 cents per payment — a savings of about $5.75.
Strategy for Small Dealers
David Brotherton, consultant and 20 Group leader at Leedom & Associates, led a class teaching smaller BHPH dealers and focused on ways they can “level the playing field” against larger competitors. Brotherton offered three tips:
1. Learn as much as you can about the customer. The more you know about your potential buyer, the greater your chance to get them sold. Once they visit your dealership and hear your program details, you have a tremendous advantage over the dealer down the street — so don’t waste the opportunity.
2. Measure activity levels before results, at least initially. Activity will ultimately yield results, so pay more attention to follow-ups, phone calls, emails and in-person visits. Get those numbers as high as you can, execute well, and results will follow.
3. Invest in a comprehensive Customer Relationship Management (CRM) system. Whether you sell 10 vehicles or 200 vehicles per month, you must use a CRM to legally and effectively communicate with your customer base. For example, using a fully compliant CRM with a texting feature will protect you from a devastating lawsuit settlement because you didn’t strictly adhere to the CAN-SPAM Act.
Full-length video of all the Innovate general sessions will be available soon on AutoStar Solutions’ YouTube channel.
The largest contingent ever attended the most recent BHPH Boot Camp hosted by the National Alliance of Buy-Here, Pay-Here Dealers at the site of iCars, Ingram Walters’ dealership in Monroe, N.C.
A total of 27 attendees from 15 different dealerships from throughout the U.S. took the opportunity to examine all parts of the BHPH operation owned by Walters, who has been associated with NABD since its inception and has been running his own dealerships for more than 20 years near Charlotte.
Walters along with NABD founder Ken Shilson used the Boot Camp on Aug. 2 and 3 to outline every step that it takes to create a successful BHPH store, from establishing a related finance company, regulatory compliance, underwriting and collections to finding inventory that will turn quickly.
“This allowed attendees to attend classroom training and to receive in-the-field training at one of the nation’s best operations,” Shilson said.
The boot camp training covered all areas of BHPH operations including building a successful business model, acquiring and reconditioning vehicles, best underwriting and collection practices, financial management and monitoring, compliance, technology solutions, and maximizing recoveries.
All attendees received projection modeling software, a complete policies and procedures and human resources manual, and other resource materials including legal and compliance materials supplied by Hudson Cook, sample pay plans, a reconditioning plan and much more.
“For a very modest investment, attendees received invaluable training and resource materials which can help make them millions,” Shilson said. “The opportunity to see iCars, receive individual instruction and learn best practices provided a unique experience.
“It takes capital, technology and knowledge to prosper in BHPH today,” he continued. “The old ways of doing things don’t work like they used to because of increased competition and different industry economics. Operators must develop new ways to prosper, and incorporate capital and technology, along with sound operating practices, to remain competitive.
“This boot camp included participation from three leading technology providers: Auto Master Systems, PassTime and Spireon. In addition, Flock Specialty Finance helped attendees understand innovative new ways to capitalize their operations. The sessions ended with one-on-one meetings with attendees to develop a strategic action plan,” Shilson went on to say.
For operators who were unable to participate in the August session, the next boot camp is planned for Nov. 8 and 9 also at iCars.
NABD’s next major event will take place just after 2015 begins. Walters and Shilson will host a new gathering — the Best Operating Practices and Compliance Conference. It’s set to start just as tax season intensifies — Jan. 18 through 20 at the Hilton DFW Lakes Executive Conference Center in Dallas.
“We have moved our next event to January 2015 rather than holding it just prior to our National Conference (in May at Las Vegas) as we have in the past,” Shilson said. “This will minimize the length of time attendees must be away from their respective operations to gain this important training.”
NABD also announced it will hold its 17th annual National Conference at the Wynn Las Vegas on May 19 through 21.
Operators can gather more information and registration details by going to bhphinfo.com or calling NABD at (832) 767-4759.
Along with the move to begin printing the magazine, BHPH Report is also rolling out free online training for buy-here, pay-here dealers.
The first installment in the publication’s Buy-Here, Pay-Here Webinar Series is set to include experts from FEX DMS, PassTime USA and NCM Associates.
The free webinar is scheduled for Tuesday beginning at 2 p.m. ET.
The Buy-Here, Pay-Here Webinar Series offers a unique, fresh approach and information provided in the BHPH marketplace today. BHPH Webinars feature three non-competing, best-in-class companies providing brief (15-25 minutes) presentations and training to the audience.
“The goal is to provide a valuable selection of content that will be attractive to a significant dealer audience and connecting those operators with the participating experts to help to keep sales and collections flowing,” said BHPH Report editor Nick Zulovich, who will be the moderator for the event.
The first session is scheduled to feature:
— Tara Bauman of FEX DMS
— Brent Carmichael of NCM Associates
— Corinne Kirkendall of PassTime USA
BHPH operators can complete the registration for this free session here.
