McLEAN, Va. — New-car dealer franchise laws protect consumers during safety recall and warranty claims, create price competition and benefit automakers, says the National Automobile Dealers Association in a new animated video released Wednesday as part of its “Get The Facts” initiative.
“Buying a car is a ... complicated purchase with financing, titling, registration, insurance and trade-ins. Because cars are expensive and car buying is complex, governments set up dealer franchise laws to protect consumers, and dealers make this complex process simple,” the video explains. “But recently, some have suggested weakening these laws or eliminating them to bypass dealers completely — a bad idea and nowhere simple as it sounds.”
The new video explains the central reason why states adopt dealer franchise laws: to protect consumers and provide a competitive business environment.
The dealer franchise network is also supported by automakers as the best and most efficient way to buy, sell and service cars in the marketplace, and “dealer franchise laws just make good business sense,” according to the NADA.
“Factories get to focus on design and building great cars, while dealers invest billions in showrooms and websites to compete for local business and sell cars at a great price,” the NADA said in a statement. “And locally owned dealers
have a huge positive impact on local communities—local businesses that create more than 1 million jobs nationwide, and provide more than 15 percent of local tax revenue.”
NADA’s “Get The Facts” initiative is designed to inform the media, opinion leaders and policymakers about the numerous benefits of America’s franchised new-car dealers through a new webpage and variety of multimedia resources available here.
ORANGE COUNTY, Calif. — An informal online survey conducted by Joe Verde Sales & Management Training Inc. found that the most common car-buying objection (37%) before the salesperson has a commitment was: “I’ll think it over and get back to you.” The survey, conducted in 2013, garnered responses from 153 salespeople.
After the salesperson has a commitment and is negotiating, the three most common objections are: “I’ll think it over and get back to you” and “payments are two high” (both at 20%), and “not enough for my trade” at 19%.
The survey asked: “What is your most common car buying objection today before you have a commitment?” Here’s a list of responses by percentage:
“I’ll think it over and get back to you”: 37%
“I want to shop the competition”: 25%
“Not enough for my trade”: 9%
“I need to check with someone else”: 7%
“It’s too much money”: 7%
“I can buy it for less down the street”: 7%
“I’m not sure this is the right vehicle for us”: 4%
“The payments are too high”: 3%
“I don’t have any more to put down”: 1%
For comparison purposes, the survey also asked: “What is your most common objection from car buyers today after you have a commitment and are negotiating?” Here’s are the top responses by percentage:
“I’ll think it over and get back to you”: 20%
“Payments are too high”: 20%
“Not enough for my trade”: 19%
“The price is too high”: 14%
“I need to check with someone else”: 12%
“I can buy it down the street for less”: 8%
“Too much down payment”: 5%
“Term too big”: 1%
“I’m not sure if this is the right vehicle for us”: 1%
The same survey questions were posted on the site in 2012 and 156 people responded to each. The most common objection received by salesperson before they have a commitment was, again, “I’ll think it over and get back to you.” However, the response was almost double at 38%.
The question “What is your most common objection from car buyers today after you have a commitment and are negotiating?” had slightly different responses in 2012 versus 2013. The top response was “not enough for my trade” at 23%, followed by “payments are too high” at 19%, and “the price is too high” at 17%. “I’ll think it over and get back to you” was in fourth place at 15%.
“People tell you ‘No’ a lot when you’re closing. They’re nervous about spending 20 or 30 grand, and they didn’t know you, like you or trust you an hour ago,” said Joe Verde, president of Joe Verde Sales & Management Training, Inc. “So saying ‘Yes’ in just an hour means really going out on a limb for most customers.
“That’s why you have to make it as easy as possible for them to agree to purchase. If you close correctly, you’ll never ask the standard ‘Will you buy today’ question. Not only that, your negotiation will be about helping themfit this new vehicle they love into their budget, instead of whether you can ‘make them a deal today.’"
FT. LAUDERDALE, Fla. — Auto dealers are enjoying some of the best operating conditions in over a decade, according to a report released this week by Haig Partners.
The Blue Sky Report found that record profits from higher new-vehicle sales and improving fixed operations, combined with a stable economy, are creating a robust buy-sell market for both public and private dealer groups looking to acquire additional franchises.
“The number and value of deals accelerated in the first quarter,” said Alan Haig, president of the firm. “Private dealer groups made 56 acquisitions in all of 2013, but 42 through May of this year alone. Public retailers tripled their activity in the quarter from a year ago, and unlike in recent years, no major acquisitions were made in foreign markets.”
Haig Partners, which advises dealers on the dealership sales process, is paying close attention to the significant recalls of General Motors vehicles. So far, the firm sees no ill-effects on buyers’ interest in GM dealerships. “While GM will be incurring extraordinary costs for the recalls, GM dealers stand to benefit from customers bringing vehicles in for repairs and trading in recalled cars for newer models,” Haig said. “It’s early to call it a nonevent, yet GM’s market share is stable, new-unit sales are increasing, and its stock price is up from a year ago. We’re currently representing the seller of a very profitable GM dealership and we believe it will trade for a franchise-record price.”
The acquisition of the DCH Auto Group by Lithia Motors for more than $363 million confirms Haig Partners’ expectation that buyers would begin to pursue acquisitions of high value dealership groups, as discussed in its 2013 Blue Sky Report.
“No one’s shying away from very large transactions,” Haig said. “There’s no better use of capital than other investment opportunities, and lenders are more than willing to finance deals. As the buy-sell market began to recover from the doldrums of the recession, there was a concern that sellers had unrealistic valuations for their businesses. But many dealerships have grown into these valuations, so we are seeing buyers and sellers reach agreement on prices.”
The firm’s Blue Sky Multiples were unchanged from its year-end Blue Sky Report. Haig said that some adjustments would likely be made based on mid-year data.
By: Automotive News
DETROIT (Bloomberg) -- In response to Morgan Stanley’s concerns about potential delays, Ford Americas chief Joe Hinrichs said the new aluminum-bodied F-150 truck remains on track for its introduction later this year.
Ford is retooling two factories to make the pickup, part of a plan this year to add 16 new models in North America. The company says its new F-150 is about 700 pounds lighter than the steel version it will replace.
“Everything is on schedule and everything is going as planned” with the F-150 introduction, Hinrichs told reporters today at the automaker’s headquarters. “I’m very confident in this vehicle,” he said.
The company had previously said that it would lose production of more than 90,000 of its F-Series pickups, its best-selling and most profitable model, as it retools factories for the new aluminum-bodied truck.
The series of plant shutdowns will reduce the company’s sales, market share and profits in the lucrative pickup truck market, Hinrichs said earlier this month.
“We see scope for near-term negative surprise with the changeover,” Ravi Shanker, a Morgan Stanley analyst wrote in a note today. “Expect a slow changeover, with tight supply.”
The company may also see lower margins on the new truck versus the old model, he wrote.
Source: http://www.autonews.com/article/20140624/OEM04/140629950/aluminum-ford-f-150-remains-on-track-hinrichs-says Resource: Cars.com: Service Department Reputation a Key Factor in Car-Buying Decision Cars.com: Service Department Reputation a Key Factor in Car-Buying Decision
Woodhouse Auto Family in Blair, Neb., has been weathering a flood of
new customers in the wake of a hailstorm that damaged nearly 4,400
vehicles last week at its three stores, including its “Truck Mountain”
Ford truck dealership.
To clear the lots of the struck vehicles, Woodhouse declared a “hail
sale” the day after the storm, marking stickers down by anywhere from
$1,000 to $15,000. Lisa Cole, Woodhouse Family Auto marketing director,
said in an e-mail that by Saturday, more than 150 customers were waiting
to speak with a salesperson. Woodhouse’s Web site said e-mails and
phone messages may not be returned for two to three weeks.
Woodhouse Ford said all of its 2,500 pickups at “Truck Mountain” were
damaged. The dealership is the nation’s top-selling store for F-series
pickups.
The situation in Nebraska underscores how dealerships can use “hail
sales” to sell vehicles with dents or cracked windshields -- and attract
new customers to their lots.
Tim Olson, president of Dent Terminator, a paintless dent repair
company in Tulsa, Okla., said in such situations, customers feel as if
they have the upper hand.
“It’s like blood in the water,” Olson said. “People sense that
[dealerships] are at a disadvantage, bringing people into the
marketplace that weren’t there before.”
Peak Kia in Littleton, Colo., has been holding a hail sale since
storms on May 20 and May 24 damaged 425 vehicles, creating an average of
$6,000 worth of damage per car.
Bill Byerly, owner of Peak Kia, said about one-third of the discounted vehicles were sold the weekend following the storm.
“We want to try to retail everything,” Byerly said on June 9. “We may sell them all in a month or six weeks from now.”
Byerly said past hail sales have proven profitable for Peak Kia, but
they won’t know the effect of the latest storms until the end of the
month. Kia has been providing the dealership with fresh inventory to
replace the rapidly sold hail-damaged vehicles.
While hail sales are an effective way of clearing lots for dealers,
the discounts may not be as equally beneficial for customers. Olson said
that if a hail-damaged vehicle isn’t repaired after purchase, insurance
companies can discount the damage from future accident coverage.
“There are benefits for consumers, but also ‘gotchas,’” Olson said.
“…When [an insurance company] looks at a car and sees hail damage, they
figure what that would have cost and deduct it from the current cost of
the accident.”
Olson said an indicator of the severity of hail damage is if the
paint is broken or cracked at the edges of the vehicle’s panels. Such
damage would cause the car to rust within six months.
Dealerships can hire PDR companies to do repairs on site, or repair
lightly damaged vehicles in their service centers to further incentivize
customers. Olson said competitive pricing among PDR companies allows
for high profit margins for the dealerships that hire them.
Cole said in an e-mail that Woodhouse was repairing some of the
discounted vehicles at the dealerships. However, it is too soon to tell
if the massive sale will be profitable.
Mark Cooley, general manager at Nebraska Auto Auction Inc. in
Lincoln, said the auction house is expecting to receive vehicles damaged
in the June 3 storm soon, though it is too soon to know how many and
which dealers will be selling them.
“The [insurance] adjusters have been way behind,” Cooley said. “We usually get a couple hundred, they sell easily.”
He added that the dealerships his firm works with typically end up benefiting since their insurance has paid for the damages.
Cole said in an e-mail that salvaged vehicles will be taken away, but they will try and sell all of the damaged cars.
“The hail sale will continue until all vehicles with damage are sold,” Cole wrote.
