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COMPLIANCE TIPS
He said as used car prices come down and Shilson noted that dealers must continue
these vehicles compete with new car and to rein in expenses as inflation through-
certified pre-owned sales, there will be out their business continues. He said it’s a
intense pressure by manufacturers and fi- lot more difficult for the small operator to
nance companies to keep transactions oc- compete because their buying power is lim-
curring. This may create a situation where ited compared to large operators or chains.
finance companies lower their credit stan-
dards deep enough to allow more subprime “Dealers are going to have to invest mon-
SPONSORSHIP customers to buy new and late-model, ey in technology to compete in today’s
lower-mileage vehicles, competing directly marketplace,” Shilson said. “Having the
latest in communications technology,
with higher-end BHPH dealers.
OPPORTUNITIES Bonanno said it will take time before the in- as well as inventory and dealer manage-
ment software is essential. You are going
dustry will know for sure the effects of the to have to invest in your people as well.
Get them before off-lease returns, and that the only serious Training and education are essential to
they are gone! negatives for the BHPH industry — dra- success.”
matic rises in the prime lending rates and if
securitizations dry up. Bonanno noted that the number of retir-
Is your company looking ing BHPH dealers exceeds the number
to connect with hundreds “It would take something really dramatic to of dealers getting into the business. He
of independent auto harm the industry right now, a recession or notes the high cost of entry into the busi-
dealer professionals? a significant increase in unemployment,” he ness prevents operators from starting a
said. “If there are not major changes likes BHPH they way they did even a decade
It can be difficult to make this, there will be no major changes in the ago, with a relatively small investment
a lasting impression when deep subprime marketplace.” and slow growth.
your company is competing
for attention. Increase your Ken Shilson, president of the National Al- “That means there will be fewer dealers
brand awareness and liance of Buy Here Pay Here Dealers, said competing for the same number custom-
credibility by making an dealers have lost some of their better cus- ers,” Bonanno said. “That may sound
impact as a Sponsor at the tomers to finance companies working with like it will increase market share, but the
2017 GIADA Convention and manufacturers who have bought deeper in larger chains with their marketing and
Trade Expo! the past 2 years. number of locations will take that market
share.”
Convention Sponsors made an “The playing field has changed dramati-
impact in 2016 cally and dealers will have to work smarter Petersen said many of the same legal and
and more efficiently to get back the market legislative issues facing traditional re-
Get Started Now share they have lost,” Shilson said. tail independent dealers will be on the
agenda for BHPH dealers as well. Among
Ready to sponsor or need This market change with deep-subprime these are:
expert advice on which customers (who prior to 2014 purchased
opportunity is best for your BHPH vehicles from independent oper- • Open recall notifications
organization? ators) subsequently bought and financed • CFPB reform and passage of the Fi-
them from franchise dealers, independent nancial Choice Act
VIEW SPONSORSHIP finance companies and credit unions. • Arbitration policy review by the CFPB,
OPPORTUNITIES • Tax reform and how it will affect small
Shilson said new accounting standards on businesses
Now is your time to talk to us credit losses is something BHPH must rec- • Department of Labor Overtime Rule
about one of these amazing ognize and act on. being reviewed and implemented.
sponsorship opportunities before
these slots are filled! “This new standard requires dealers to Bonanno noted that NIADA’s 20 Group
provide life-of-loan loss reserves,” Shilson program continues to grow. An expan-
Contact us today and we’ll get said. “This could affect a dealer’s borrowing sion of groups serving the lease here-pay
your spot reserved: email us at ability and there is serious consideration as here marketplace will roll out in 2017, as
convention@giada.org! to how banks or finance companies regard well a Digital Marketing 20 Group, one
current covenants in finance documents for Business Development Centers, and
with dealers.” another for Service 20 Groups. n
GIADA Independent Auto Dealer FEBRUARY 2017 | 7
