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CATA Bulletin
May 8, 2006


Dealers respond quickly to most online leads: poll

November 18, 2010

Dealerships answer nearly one in five Internet leads within 15 minutes, and nearly all leads are responded to within two hours, a recent survey shows.


Only 3 percent of the leads went unanswered after 120 minutes, according to the Dealer Communications poll. The results:


On average, how long does it take your sales team to respond to Internet leads?

15 minutes or less


15 to 30 minutes


30 minutes to 2 hours


2 to 4 hours


More than 4 hours



If your response time is two hours or less, how does your pay plan encourage timely follow-up?

Not at all


Bonus tied to response time


Response time addressed through other goals (close ratios, kept appointments, other)



Auto buyers flocking to dealer Web sites

November 18, 2010

Used nearly as often as newspapers

New-car buyers visiting dealership Web sites have increased by more than 70 percent over the past four years, according to market research released April 24 by Friedman-Swift Associates, an automotive marketing research firm in Cincinnati, Ohio.


Last year, 30 percent of new-car buyers visited dealers’ Web sites, compared to 35 percent who looked at dealers’ advertising in local newspapers.


"Newspapers have to be concerned," says Friedman-Swift Associates President Judy George. "Five years ago, dealerships centered their advertising strategy on big ads in local newspapers. Now, more car buyers use dealer Web sites which, in some markets, are less expensive than the cost of a single newspaper ad."


The Friedman-Swift research, based on telephone surveys with 12,270 new car customers in 2005, shows the number of people using dealer Web sites is climbing rapidly.


"In 2001, only 17 percent of new-car buyers went to their dealer’s Web site before they bought a car," said George. "Now, more people see the Internet as a quick source of information about a specific car or a specific dealership."


Import car buyers are more likely to click on a dealership Web site than GM, Ford or Chrysler owners, according to Friedman-Swift’s research.


Thirty-six percent of import car buyers in 2005 looked at their dealer’s Web site before they bought their vehicle, compared to 25 percent of domestic car buyers, George said.


While the number of people who go to Web sites has surged, the number who use newspapers to help choose a dealership has declined slightly. Three years ago, George said, the number of car buyers who consulted local newspapers before they bought their car was 37 percent.


Dealership buy/sell update: It’s a buyer’s market but sellers don’t know it

November 18, 2010

Domestic dealerships continued to be the drivers of buy/sell activity during the first quarter of 2006, said the president of the Apex Group, a firm that develops buy/sell packages for its dealership clients.


Greg Gilmore said that, despite what dealers may have heard, "overall valuations of dealerships have actually remained consistent with last year. Any difference in multiples is attributable to individual franchises. Valuations for Toyota, Honda, BMW, and Lexus continue to climb, while goodwill for domestic dealerships appears to have settled in at 1.5 to 2.5 times actual earning potential before taxes."


That means there still is plenty of opportunity for savvy dealer operators in the market for expansion.


For automotive manufacturers looking to extend their market presence, Gilmore sees Hyundai as "the industry’s most aggressive manufacturer" with respect to adding new franchise points.


Dealership buy/sells have become considerably more complicated, with the rising cost of prime real estate, factory "image" programs, and ballooning floor plan expenses posing more important considerations in negotiating dealership transaction prices.


Hybrids certified for new energy tax credit

November 18, 2010

The Internal Revenue Service permits the following hybrid-vehicle factory certifications and credit amounts:


  • 2006 Ford Escape Hybrid, front-wheel drive: $2,600
  • 2006 Ford Escape Hybrid, 4WD: $1,950
  • 2006 Mercury Mariner Hybrid, 4WD: $1,950
  • 2005 Toyota Prius: $3,150
  • 2006 Toyota Prius: $3,150
  • 2006 Toyota Highlander 4WD Hybrid: $2,600
  • 2006 Toyota Highlander 2WD Hybrid: $2,600
  • 2007 Toyota Camry Hybrid, $2,600
  • 2006 Lexus RX400h 2WD: $2,200
  • 2006 Lexus RX400h 4WD: $2,200
  • 2007 Lexus GS 450h, $1,550


The tax credit for hybrid vehicles applies to vehicles purchased on or after Jan. 1, 2006. It replaces the tax deduction of $2,000 that previously was allowed for the purchase of new hybrid vehicles before Dec. 31, 2005.


The new tax credits come at a time when sales of some hybrids have begun to slow, according to The Wall Street Journal. "Hybrids like the Toyota Prius and Honda Civic Hybrid," the newspaper reported, "still enjoy strong demand.


"But the slowdown for some other models comes as more consumers are questioning whether hybrid vehicles deliver sufficient fuel savings in real-world driving to justify the extra cost of the technology.

"Consumer demand for hybrid gas-electric vehicles is being watched closely by auto executives and advocates of technology to cut automotive petroleum consumption."


As gasoline prices climb, sales of new vehicles with 8-, 6-, 4-cylinder engines remain stable—for now

November 18, 2010

Despite the perception of rising gas prices, U.S. consumers continue to buy about the same proportion of new vehicles equipped with eight-, six- or four-cylinder engines as they did in the summer of 2005, according to the real-time retail transaction data released April 24 from the Power Information Network (PIN). 

In January, February and March of 2006, nearly one-quarter of all new vehicles purchased by consumers in the United States have been equipped with eight-cylinder engines. In July, August and September of 2005, sales rates of eight-cylinder vehicles were 28 percent, 23 percent and 24 percent, respectively.


Sales rates of six- and four-cylinder engine-vehicles also have been constant. New cars and light trucks with six-cylinder engines have accounted for 40 percent to 42 percent of all new-vehicle retail sales during the past nine months, and products with four-cylinder engines have comprised about 30 percent to 33 percent overall. 

"So far, the perceived gas price increases have not had any discernable impact on new-vehicle buying patterns, at least with regard to the size of the engine," said Tom Libby, senior director of industry analysis at PIN.


"Gas prices are certainly becoming a popular dinner and water cooler discussion topic, but consumers appear to be conditioned to prices at current levels," said Jeff Schuster, executive director of global forecasting at J.D. Power Automotive Forecasting.  

"We do not expect a significant change in the kinds of vehicles consumers purchase as a result. It is, and will be, all about choice for consumers. There are several smaller vehicle options coming, as well as fresh products in the full-size SUV segment," said Schuster.


Additionally, the days-to-turn rate (the number of days a vehicle spends on a dealership lot) has remained constant for each of the engine categories: new vehicles with eight-cylinder engines have turned about every 68 to 74 days; six-cylinder vehicles every 61 to 68 days; and four-cylinder vehicles every 39 to 49 days.  

Four-cylinder vehicles have consistently turned faster than the overall industry average (59 to 65 days), while six-cylinder and eight-cylinder vehicles have turned slower. 


PIN’s data are based on the collection and analysis of daily new- and used-vehicle retail transaction information from more than 10,000 automotive dealership franchises in North America. The data incorporate consumer demand and sales information.


FLSA mandates records retention

November 18, 2010

Under the Fair Labor Standards Act, dealers must make, keep and preserve records. Although no particular order or form is prescribed, records must list information in detail.


Well-documented records and timekeeping are very important because controversies often are resolved in favor of employees when necessary documentation is lacking. In addition to FLSA records referenced below, it is recommended that detailed job descriptions and written pay plans be maintained for all employees.


Keep the following records for employees entitled to both minimum wage and overtime:


1.      Full name and employee symbol or number identifier used on any records

2.      Social Security number

3.      Home address, including ZIP code

4.      Date of birth, if under age 19

5.      Sex and occupation

6.      Day and time and day when employee’s workweek begins

7.      Regular hourly pay rate and basis on which wages are paid

8.      Hours worked each workday and total hours worked each workweek

9.      Total daily or weekly straight-time earnings or wages

10.    Total weekly overtime excess compensation

11.    Dates, amounts and nature of additions to and deductions from wages

12.    Total wages paid each pay period

13.    Date of payment and the pay period covered by the payment


For exempt employees, limited records must be kept:


  • For employees covered by the "white collar" and outside salesperson exemptions, maintain and preserve all of the items listed above except for 6 through 10. Note the basis on which wages are paid for each pay period to permit a calculation of total remuneration, including perks and fringe benefits.
  • For salespeople, partsmen and technicians, maintain and preserve all of the items listed above except for 6 and 9. Keep data and information regarding the basis on which wages are paid.
  • For commission employees, maintain and preserve all of the items listed above except for items 6, 8, 9 and 11. Note if individuals are commission employees and keep copies of employment agreements that show the basis of compensation, the length of the agreement, and the effective dates.


These and other records must be preserved for at least two to three years, depending on the type of record. For more details or for more information on the FLSA, see the NADA publication, "A Dealer Guide to the Fair Labor Standards and Equal Pay Acts," from which this article is excerpted. That and other NADA publications can be ordered online at  


NADA seminar coming to Rosemont

November 18, 2010

Service managers, general managers, and fixed operations managers can benefit from a four-and-one-half-day NADA seminar, "Take Control of Your Service Department," that will be held June 12-16 at the Hyatt Rosemont hotel, near O’Hare International Airport.


Robert Atwood of the NADA Dealer Academy will teach attendees to lure back service department customers and increase customer satisfaction and improve gross profits.


Cost is $1,850 for members of the National Automobile Dealers Association or $1,750 for NADA 20 Group members and DCA graduates. The fee for NADA nonmembers is $2,350.


To register, call 800-252-6232, ext. 2, or visit



November 18, 2010

Office Manager Supervise staff, oversee accounts payable/receivable and cash transactions. Implement end-of-month closing, manage customer service. Michael McKee, 708-444-4093.

Is your dealership ‘deaf friendly’?

November 18, 2010

Deafness is the second most common disability, and more than 28 million Americans are deaf or hearing impaired. Figures from the 2000 U.S. Census Bureau show about 700,000 deaf and hard-of-hearing people reside in the Chicago market.


Some dealers have considered providing sign language interpreting services. American Sign Language—a visual and manual language made up of signs created with the hands, facial expressions, and body posture and movement—is the primary language of the "functionally deaf."


When a deaf or hard-of-hearing person buys a car, he needs clear and accurate communication.


"I often rely on a sign language interpreter to make situations more accessible. I prefer to have things presented to me in my native language, ASL," said deaf Chicagoan Raymond Rodgers. Rodgers owns an interpreting referral agency, Deaf Communication By Innovation.


Since both public and private organizations must comply with the Americans with Disabilities Act, which, among other things, regulates communication for the deaf and hard-of-hearing, the demand for interpreters has increased dramatically.


Rodgers recommends dealers to use qualified interpreters from an interpreting referral agency, for the best communication with deaf customers who know ASL.