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Compliance- AKA the “Rules” Part 2

This is the second in a multi part series about “Rules”. Last time we raised questions about how important it is to get compliant. As a small business owner and operator, you know it can be tough keeping up on what’s going on in your business, much less what is going on in the world around you. We began a discussion about how you find time to address all the “Rules”. Which rules are more important than others? What are the risks involved in not following a “Rule”? How much are typical fines for an item? Most importantly, how do you know where to spend your time?

In my last blog, I discussed the State Independent Dealer Associations.  Hopefully, you have at least looked around to see what they have to offer. This link will take you to that Blog :https://afsdealers.blog/2019/02/08/compliance-aka-the-rules/

The Bureau of Consumer Finance Protection (BCFP), is another resource you can use. The web site offers many articles and frequently asked questions are answered in a simple, plain English format. Also, there are articles about emerging topics and proposed laws.  For example, how exciting would it be to have a customer come in and ask for a date change on their account, bringing their own spreadsheet and budget with them? The BCFP’s blog page offers just such a spreadsheet for the consumer to use. (https://www.consumerfinance.gov/about-us/blog/adjusting-your-bill-due-dates-can-help-you-stay-top-your-bills-and-manage-your-cash-flow/). You might even be able to get your customer to use the tool kit provided by the Bureau to help them finish paying for their vehicle.

The Bureau also issues reports on what types of complaints they get and from where- see (https://www.consumerfinance.gov/data-research/research-reports/complaint-snapshot-50-state-report/)  to find your state in the list.

Lastly, the Bureau released a new version of its electronic regulation platform called Interactive Bureau Regulations (previously known as eRegulations). Interactive Bureau Regulations includes the most used features that were available through eRegulations, but now allows the Bureau to more quickly and efficiently amend the content of the regulations presented on the Bureau’s website. This means that the information provided will be more accurate and up-to-date than what was previously available through eRegulations. Interactive Bureau Regulations also includes a new feature that allows users to select multiple regulations when conducting a word or term search.   Most notably, this is where you may investigate the regulations that govern much of your business, Regulation “M”, “Z”, and many others. You can see this at: (https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/)

In my next blog, I will discuss some other great resources for you to use when considering Compliance.

There will be further discussion on this and many other issues you face at our next National Dealer Seminar.  Feel free to email info@afsdealers.com for information about the next seminar.

–Joyce Guest, February 22nd, 2019

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Sell Less Cars & Make More Money

Not too long ago, collections had a core philosophy in one fundamental element; “You have an obligation with this debt.” A car, a credit card, even a house were obligations to a commitment made in order to receive goods or services. When a collection issue came up, that basic truth dictated how the collection process would proceed. The basic premise was, “You owe this debt. You agreed to pay it, so do the right thing…pay it!”

As the demographics in the consumer base evolve, the approach to advertising, sales and even collection practices must evolve in order to be effective within that demographic. At one time, credit was something held very dear to most people. It was not to be used unless it was an absolute emergency or to purchase a home. Many will remember when a credit card was manually imprinted on a double receipt. Before computers, and all of the automation and background checking, it was used based on another basic principal, “Trust”.

Relationships coupled with trust are the key to minimizing loss while increasing cash flow. Let’s say you loan a friend $100. Your friend agrees to pay you when he gets paid this Friday. Your friend comes to you and says, “I’m sorry, I only have $75. I had to pay for some medications after I caught the flu.” Would you say, “No! If you don’t have the entire $100 I can’t accept it.” Of course not. You would take the $75 and work out something for the other $25. You thought enough of your friend to loan them the money. What if this friend had a history of borrowing and not paying back loans with your circle of friends? Then the question would be, “Why would you loan the money with the expectation of a different result?” Historically, they had shown not to pay. So whose fault would it be when they default?

The relationship starts during the sales process. Treating customers in an honest and fair way by explaining all of the details of the deal and making sure they are able to fulfill those obligations are the beginning of a good relationship built on trust. Failing to put your customers in the best position to succeed is not only wrong, it’s bad business. The day your customer purchases the car is one of the happiest days they’ll experience during the term of the loan. This is the opportunity to explain their responsibility and that making a car payment is usually not easy. What do they do if they can’t pay all or any of their payment? It is a used car and it will require repairs at some point. Are those repairs covered by warranty? Are they responsible for the cost? Is the payment still due if it isn’t running? This is the first and only opportunity the dealership has to set the tone for the relationship. The more (potential) issues you can address during the beginning of this relationship, the more likely the relationship is to make it to the goal of any BHPH/LHPH deal, Payoff!

“Sell less cars, and make more money.” This principal is not only more profitable requiring less cash flow, it provides much better service to your customers and even your community. The way to do that is through building a relationship built on trust. Not only trusting that the customer will fulfill their obligation, but that the customer can trust we the dealer fulfill ours.

– Roger Newton, February 15th, 2019