Friday, December 28, 2007

Good F&I Introduction before going into the box

**Importance of the Meet & Greet

by Arzu Algan (ADI)

The customer has probably spent several hours with a salesperson,
and now is introduced to a new individual who has the power to make,
or break, the transaction. The fear of the unknown is always scary,
so there is bound to be some trepidation on the customers behalf.

To help put the customer at ease, the F&I manager needs to let him
know he is in his corner. So the Meet & Greet will set the stage for
the Finance Manager for the next 20-30 minutes. He can do this by
congratulating the customer on his purchase, and talking about the
excellent decision he made by talking up the vehicles attributes.
Once the customer is comfortable the F&I manager should brief the
customer on the next step in the sales transaction to eliminate the
fear of unknown.

Use your own words to relate to the customer, but convey the
following information:

Congratulations, Mr. and Mrs. Smith. Im sure youre going to love
your new ________, which gets great gas mileage for an SUV. May I
call you John and Jane?

My name is Jeff Myers, and Im the finance manager. Im going to
prepare all the legal and registration paperwork, so youll be able
to drive home in your new car. Ill also assist you with financing,
if you need it, and discuss how you can protect your new investment.
The whole process should take about 20 minutes, and while were doing
the paperwork, your new car is being prepared for delivery.

Before we begin, can I offer you a soft drink or a cup of coffee?


Very simple. I use an approach similar to this one. Meeting the customer before having them brought to you will increase product sales because they are already somewhat comfortable with you.


Wednesday, December 26, 2007

Auto Dealer Closes Lot, Agrees to Change Ad Practices

Auto Dealer Closes Lot, Agrees to Change Ad Practices.
By Tim Christie
The Register-Guard 2007

A Eugene auto dealer has agreed to shut down one of his lots, stop what state officials called misleading advertising and pay $10,000 in a settlement agreement with the state Department of Justice.

John P. Kiefer, owner of Kiefer Kia, Kiefer Mazda and U.S. Auto Wholesale, all in Eugene, and CarMart Inc. in Portland, made false credit offers, misled consumers with some advertising and hid the true ownership of one of his dealerships, department officials said Monday.

"When dealerships purposefully confuse buyers in advertising as to whom they are dealing with and exactly what type of deal they are getting, our office must step in and stop the conduct," Oregon Attorney General Hardy Myers said.

"They requested we settle the matter, so that's what we did," Kiefer said. He said he felt his business was being careful with its advertising before, but will now "redouble our efforts to make sure our advertising is compliant" with state law.

To settle the charges, Kiefer reached an agreement called an Assurances of Voluntary Compliance with the Department of Justice. In the deal, in which he admitted no violation of the law, Kiefer agreed to:

• Permanently shut down CarMart, a used car lot in Portland, and not to open another used car store in the Portland metro area for at least one year.

Kiefer said the decision to close CarMart was made before the advertising issues arose with the state. "There was never a recommendation, request or suggestion (to close the lot) until I told them I would close it," he said.

• Advertise using only names of dealerships licensed with the Department of Motor Vehicles and, for one year, submit copies of all ads and direct mail flyers to the Justice Department staff for review 14 days before publication.

• Pay $10,000 to the Justice Department's Consumer Protection and Education Fund.

The Justice Department received numerous complaints about CarMart, department spokeswoman Jan Margosian said. Aimed at consumers who had filed for bankruptcy, the offer enticed customers with a prequalified certificate that supposedly was good for up to $24,995 in financing. Investigators found that consumers were not prequalified for any loan.

Consumers complained that CarMart refused to undo deals and return deposits and consumer trade-ins when the company was unable to obtain financing as negotiated. Oregon's Unlawful Trade Practices Act requires dealerships to do all three.

Kiefer's U.S. Auto Wholesale also ran afoul of investigators. The dealership was not a licensed dealership through the state Department of Motor Vehicles. Several times earlier this year, the dealership advertised a "vehicle disposal" sale at Gateway Mall in Springfield, calling it the "exclusive Oregon location" for a "West Coast auto disbursement" sale. In reality, it was a Kiefer sale, and thus there was no "exclusive Oregon location" nor a "West Coast" sale, the state said.

"When it comes to consumer protection laws in Oregon, advertising needs to be truthful," Margosian said.

Finally, investigators said there was deceptive advertising on an electronic billboard at Kiefer's Eugene Kia dealership, offering consumers free gas. Newspaper ads and placards on individuals cars also offered "free gas for a year" with the purchase of a new Kia.

In what investigators called "mice type" - so small it was barely readable - under each offer, consumers were told the deal was "a combination offer" and to "make your best deal on a package price ... Gas Offer is $500 gas card." State staff found the ads not to be clear and conspicuous and that $500 would not cover gas for a year for a typical driver.

Good post from ADI

Dealership Sales Methodology
by ADI on the December 26th, 2007

People love cars and the decision-making process: the model, equipment, color and so forth. They take pride in the possession of a new car. What they generally don’t like is the experience of shopping for a new car. They often feel manipulated and mismanaged. Regardless of the deal they negotiated, there is always the feeling they could have done better, or that they were “taken.” Many are convinced that an undercurrent of dishonesty runs through the retail automotive business.

The basics of the automotive sales process are well known. First you advertise to get people in the door. As soon as they are on the premises, you determine the model that interests them and explain the product highlights. While conducting this walk-around presentation, you point out the performance, safety and comfort features. After a test-drive around the neighborhood, you get down to the basics of making the deal: checking and appraising any trade, presenting your first offer at pricing, and taking a deal to management (or sometimes taking management to the deal). With offers, counter-offers and negotiations complete, it’s time to talk financing. After presenting the other dealer services, an F&I (Finance and Insurance) manager calculates the financing, rate and monthly payments. By the time the customer picks up the new car, the salesperson is already focused on the next customer.

That’s the way cars and trucks have been sold for more than 70 years. Today’s consumers require better service, professional qualities and excellent product knowledge. The only way to guarantee an enjoyable shopping experience for your customers is to follow a sales process that is firmly grounded in meeting customer needs and exceeding their expectations:

Attract new customers without relying merely on price-oriented advertising.
Welcome the prospective buyer and establish a relationship, removing the customer’s apprehensions about the process of shopping for a new car.
Determine your customer’s needs, then target your presentation of product features and benefits to meet those needs.
View the delivery process as the beginning of a productive relationship – not the end of the sales process.
These procedures not only help turn prospects into buyers, but set the stage for long-term customer relationships that result in both repeat and referral sales. Today the customer cannot be manipulated by old-fashioned, high-pressure sales techniques. Instead, their needs must be identified through communication.

The same rules apply to the transaction in the Finance Office: customers expect the open communication, respectful treatment, and superior product knowledge they experienced on the sales floor to continue while they meet with the F&I Manager. Should this expectation be disappointed, the customer is likely to abandon the transaction all together.

In the past, F&I Mangers and salespeople alike may have spent 10 percent of the time building rapport with the customer, 30 percent presenting products and 60 percent closing the deal. Nowadays successful F&I personnel and salespeople invest 50 percent of the time building rapport, 40 percent presenting products and dealer services, with the remaining 10 percent usually more than enough to close the deal. Today’s focus is on the relationship between the customer and the dealership personnel, rather than just the mechanics of the deal.

Friday, December 21, 2007

Massive ESC Fraud Conviction. Wow!

Former Ford dealer pleads to fraud charges
Wednesday, December 05, 2007
By John S. Hausman

Tony Allen Nielsen will avoid state prison under a sentencing commitment Tuesday by 14th Circuit Judge Timothy G. Hicks. That still leaves the option of a county jail term of up to a year when Nielsen is sentenced at 8:30 a.m. Jan. 11. Hicks allowed Nielsen to remain free on bond until sentencing.

Nielsen also is expected to be socked with a huge restitution tab. Prosecutors say he has already paid back more than $300,000 that authorities say he stole by defrauding hundreds of customers.

Nielsen, 43, now of Wayland, pleaded to three counts of larceny by conversion of more than $1,000 but less than $20,000. A no-contest plea is not an admission of guilt but results in conviction, and judges treat it as a guilty plea at sentencing. It's allowed when a defendant faces civil liability, as in Nielsen's case.

The criminal charges against Nielsen were the outcome of a complicated, yearlong investigation that included repeated interviews with more than 400 victims allegedly defrauded in an extended warranty scam and failure to pay off loans on trade-in cars. Investigators also painstakingly scrutinized reams of financial documents.

At the time of the fraud -- from April 2005 through August 2006 -- Nielsen owned and operated Discovery Ford at 3001 W. Holton-Whitehall.

The dealership has had a new owner since November 2006 and a new name, Whitehall Ford. Nielsen has no connection with the current dealership.

State Police in August 2006 began investigating Discovery Ford after police were contacted by a customer who had taken a vehicle to another Ford dealership and found out the car never was registered for an extended warranty.

Investigators quickly found that the dealership had allegedly failed to forward money paid by customers for extended warranties. In many cases, the payment was $2,000.

The investigation soon spread. Authorities believe Nielsen defrauded hundreds of customers and kept hundreds of thousands of dollars that should have been forwarded to insurers and lenders.

Only three charges were filed because additional counts would not have increased Nielsen's possible sentence exposure, Prosecutor Tony Tague said earlier.

All the convictions relate to the extended warranty issue. In each count, the theft victim is listed as Vehicle One Warranty Service. That's because that insurance company ended up paying for the extended warranties.

The other broad area of fraud -- involving some 25 victims -- involved lenders' liens on customers' cars. Discovery Ford allegedly failed to pay off existing loans on vehicles traded in by customers for new vehicles. The dealership also allegedly failed to forward customers' payments for "gap insurance" to cover the difference between the value of a car totaled in an accident and the amount owed on a new car.

Prosecutors and police met several times with those victims and wound up with an arrangement under which Nielsen paid off all of the loans and gap insurance.