Compliance Is Not Only Possible, It’s Profitable!

Keith Whann
The Car Counselor

“Compliance” is an interesting word.  Defining it in terms of the motor vehicle industry means having your dealership’s policies, procedures and paperwork in accordance with the law.  Every dealership should have a compliance program, but it doesn’t happen on its own.  Sure, in my 20 plus years representing dealers I’ve heard many of them say “I’ve been doing this for many years (you insert the number) and have never had a problem.”  Of course, that’s the discussion in the exhibit hall, at the auction or over a cup of coffee.  Back at my office, however, I can’t count the number of times I have received a call from that same dealer asking for our help because his streak of luck just ended in a lawsuit or regulatory matter that could cause serious financial harm to the dealership.

Fortunately, most dealers don’t rely on a lucky streak and strive for compliance. They frequently comment, however, that compliance is impossible to achieve because of the overwhelming number of federal and state laws that impact a motor vehicle dealership, not to mention the fact that regulators and courts are continually modifying their interpretations of dealers’ obligations under them.  Yes, it is increasingly difficult to stay current.  But, if your goal is to avoid problems (AND IT SHOULD BE!), keeping up with legal and regulatory initiatives, recognizing their impact on your dealership’s paperwork and procedures, and training dealership personnel are all a must.  So the question remains, are you going to rely on your lucky streak or develop a compliance program?

Did I mention that an effective compliance program can help attract new lending sources for your dealership or help you sell a buy here-pay here portfolio?  It can also enable your dealership to develop a profitable strategy for marketing and advertising vehicles on the internet.  Heard enough?  I have.  For those of you who do rely on luck, the lucky streak is over.  Let’s develop a compliance program for your dealership.

Compliance is something that cannot be delegated; it has to be handled from the top down, starting with the dealer principal.  The good news is that compliance doesn’t have to be as difficult or as costly as many make it out to be.  In fact, there are a number of efficient and cost effective ways for dealers to obtain legal, legislative and regulatory information as it is happening.  A good example of this is the 2nd Annual National Dealer Compliance and Profitability Expo that took place at the Columbus Fair Auto Auction.  Attendance, both live and on the internet, were free.  The Expo featured a full day of education and discussion panels on a wide range of topics impacting motor vehicle dealers.

If you missed the broadcast, all 7 hours of programming are available at http://www.niada.tv/.  Speaking of NIADA.TV, the newly developed online television network should serve as another valuable part of your compliance program.  As I traveled across the Country attending industry conventions and conducting seminars on a various industry related topics, I was continually asked when compliance training that is affordable, timely and easily accessible would be available.  Many dealers also inquired about having materials they could take back to their dealership to conduct training sessions on their own.  Now it’s all available online when it is convenient for you and from the comfort of your dealership at http://www.niada.tv/.  The cost?  Once again, it’s free.

There are also a number of things dealers can do themselves to enhance dealership compliance. Regularly auditing actual deals helps ensure that paperwork is properly completed.  Having someone knowledgeable with the industry look over your advertising and review your website is a good idea as well.  What’s the best place to start?  The overall dealership itself.  Conduct a compliance walk-thru of your dealership and look at it as I would.  Not sure how to do that?  It’s easy if you know what to look for.  Visit the Problem Solved! section of the www.keithwhann.com website and review the article titled “Take A Good Look at Your Dealership: Do You See What I See? and you will be well on your way.  If questions arise during the walk-thru, or in your daily operations for that matter, an answer is often just a click away in the Car Counselor section of the same website.  Once again, it’s free.

Some say compliance is impossible.  It’s not.  You can develop an effective compliance program for your dealership that will not only solve problems before they happen or prevent problems from happening, but will also help increase dealership profitability.  You have to take the first step and, remember, there’s no time like the present.  The benefits are many and the cost is minimal.  Oh, by the way…forget the lucky streak!

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