There, I said it.

 

Well…actually…it’s what a client said to a vendor, after I pointed out a large problem at the dealership.  This client was saying because I had found this problem, I was calling his dealership ugly…

 

His dealership was particularly ugly on that issue.  I’ll bet yours is, too.

 

How are you preparing for things which might go wrong?  Do you have procedures or do you react as the problems arise?  Your clearest thinking happens when you are not under pressure or “under the gun.”  That’s why I urge you to consider these items ahead of time.  You’ll be glad you did.  Preparation is important and, in parlance, the juice IS worth the squeeze!

 

Two Main Paradigms

 

In considering governance, risk, and compliance (GRC) at your dealership, there are two (2) types of measures you should consider:

 

Preventative measures:   How you can stop a problem from developing.

 

Mitigative measures:  How to conclude a problem when it lands in your lap.

 

The more time you spent on the preventative paradigm, the less time will to be required to be reactive and, therefore, have to worry about mitigative measures.

 

Let’s concentrate on preventing concerns at your store instead of dwelling on ameliorating issues as they (inevitably) arise. Our business is the people business, so unchecked and unmonitored, their risks automatically become your risks!

 

Here’s a litmus list of four (4), random items to consider to determine if you should be winning baby pageants or you’ve been hit with an ugly stick:

 

  • Is anyone monitoring your sales agents’ advertising? Are they advertising vehicle prices without your reviewing them?  If you allow this practice without auditing their advertising, you are asking for a “bait and switch” claim or regulatory issue.  You will be held responsible for their ads, whether it’s fliers being placed on windshields or postings on Facebook or a blog.  Sales agents must adhere to the Federal Trade Commission’s (FTC) advertising guidelines.  For more information, NADA has a ninety-six (96) page guide called “Driven: Federal Advertising Requirements.”

 

  • At dealerships, problems begin “on two legs,” with customer and employee problems being the largest component of the issues which arise on a day-to-day basis. The third issue which creates the most “heat” at the store are unintentional advertising violations which I see all the time.  When is the last time your marketing department communicated with the sales department to ensure all sales agents understood “the specials” which were being advertised?  Never, you say?  Consider changing that policy and here is why.  Often, customers will arrive at the store and say they are interested in the Lollipop One model at $669 a month.  The uneducated sales agents will promptly tell the customer that they cannot get the vehicle for that price because of “blah blah blah.”  The customer leaves – upset – because they were “baited and switched.”  If only the marketing team had communicated that the ad says forty (40%) percent down at 5.9% APR for seventy-two (72) months!  Consider having a ten (10) minute sales meeting whenever your advertising changes to explain the ads to all of the sales agents.

 

  • Inside your store, who monitors your insurance policies? In other words, do you have an individual who would actually compare last year’s policy with this year’s policy to compare the forms?  You would be amazed at the changes the insurance companies make without disclosing them to you.

 

  • One of the biggest issues I see, literally on a daily basis, is the inadequacy of dealership websites’ disclosures. Has anyone looked at it for reasonability or understandability?  Is it “clear and conspicuous” as is required by the Federal Trade Commission (FTC)?  Can a regular person understand what it is saying?  (Or when you launched your website, did you use the “stock” language?)  The problem here is class action exposure.  I routinely see an approximately two thousand five hundred ($2500) dollar mistake on each vehicle because the “internet price “ is not tied to the disclaimer with a asterisks or similar mark.  If there is no asterisks, then the taxes, title, license, and processing fee are considered INCLUDED in the asking price.  Do the math, $2500 x 200 vehicles per month x many years is a super-large number.  Please do not overlook this important item.  Disclaimers should be written to reflect “how” you transact your individual store.  That said, here is an example of a disclaimer I just wrote for a large auto group which you can use to work from:

 

CUSTOMER MUST PRESENT A DATED “PRINT OUT” (i.e. paper copy)  OF ADVERTISED INTERNET PRICE TO THE SALES MANAGER UPON ARRIVAL AT DEALERSHIP IN ORDER TO RECEIVE THE OFFER OF THE ADVERTISED PRICE. Vehicle information is based off standard equipment and may vary from vehicle to vehicle.  All specifications, prices and equipment are subject to change without notice. Prices and payments do not including state and local taxes, titles, tags, and documentation charges of $xxxx.  Accessories and color may vary. All inventory listed is subject to prior sale. The vehicle photo displayed may be a manufacturer photo only and may not match exactly to the vehicle that interests you.  Prices do not include available manufacturers rebates which are available if qualifications are met with that manufacturer, as each is different. Due to market conditions, prices are subject to change at any time without notification. If you have any questions regarding our pricing, please email Lucille Magillicutty at luc@abcmotors.com.  Vehicle internet prices also do not include any added equipment and/or buyer selected suspension lift, body lift, any truck body (for commercial vehicles), custom wheels, custom tires, custom paint, or other similar aftermarket products (either depicted or not depicted on website) on these specialty items, which can be added to a vehicle.  ABC Motors relies on third party companies to display the pricing and technical specifications. Technology glitches can cause the incorrect information to display and the dealership is not responsible for the resulting errors.  These prices are not to be combined with any other ABC offers. The results of the payment calculator should only be used as an estimate. Actual financing plans require more complex calculations.

 

So, based on these four (4) items, is your baby ugly or not?

 

As the cheerleaders have been heard saying for years:  “U-G-L-Y, you ain’t got no alibi?”

 

If you need an alibi, I’m your guy. 😊