The Value – Issue #10: New Dealer Tool Helps Bridge Gap Between Sales and Service

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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Vin-UP Launch in Canada Provides Acquisition Tool in the Service Bay

Mobility Sales Solutions has partnered with Canadian Black Book to power its Vin-UP offering.  The ‘in-lane’ service customer vehicle upgrade program has now launched in Canada.

The tool works through a physical handheld scanner which vin-scans vehicles while in service and outputs a coupon with a buy-back value, in combination with OEM and dealer incentives.  Canadian Black Book is the exclusive provider of valuation data to power the system as well as the sale arm for Canada.  Vin-UP is a lead generation and vehicle acquisition tool used in service departments to help feed the sales pipeline.

“Fewer and fewer customers enter the dealership from the front door today.  Vin-UP provides a very positive way to generate qualified leads from those customers entering from the service entrance,” says Bruno Lucarelli, President, Mobility Sales Solutions LLC.  “The approach is less intrusive, whereby the service lane specialist or used car manager offers to buy a customer’s car versus a sales rep trying to sell them a car,” he adds.

The theory being that, offering to purchase a client’s vehicle first is a soft sell strategy that can be easier for some to digest compared to hard selling showroom floor sales tactics.  Transitioning customers from the service bay to the sales floor is a method to retain existing clients so not to lose them to other competing dealerships.

“Canadian Black Book has come a long way from our days selling little black books to dealers.  Today we are continuously looking for innovative ways to help dealer sell more cars using our data.  This is certainly a good example of that,” says Brad Rome, President, Canadian Black Book.

Dealers would choose the vehicle model year(s) that they want to target for buy-back.  Service centers would scan all vehicles, which builds CRM data that can be easily integrated into DMS systems.  Qualified vehicle owners receive an instantly generated offer at which point they could be transitioned to sales.  If clients are not ready to sell/buy, the scan will be kept in the dealership database for future marketing and sales efforts.

As part of the Canadian launch, Vin-UP was piloted over the past 2 months, at BMW Canbec in Montreal, part of the AutoCanada Dealer Group.  “We are forever looking for ways to produce new quality leads and Vin-UP has opened our eyes to a new friendly approach to generating leads from our own service area,” says Martin Taillandier, General Manager, BMW Canbec.   “We will certainly be moving forward to deploy this tool on a full-time ongoing basis.”

The service is based on either a monthly subscription fee for the Vin-UP unit, with the dealership following up leads using its own BDC or the program offers lead follow-up services, provided by Suivitel, which only charges a fee per scheduled appointment.

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For interview requests or questions, please contact:

Conrad Galambos
Media Relations
Canadian Black book
905-979-7039
cgalambos@canadianblackbook.com

The Value – Issue #9: August 2018 Used Vehicle Retention Index

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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Canadian Black Book’s Used Vehicle Retention Index has set a new record high level of 103.6 for August, besting the previous record set last month.  The strong economy, along with favorable exchange rates for continued used vehicle exports to the US, have helped keep retained values at levels not seen during the thirteen years the index covers.

Sifting through the segments we do see that Compact Car, although down 2 points from last month’s mark remains a significant 12 points above its value 12 months ago.  Compact Luxury CUV/SUV has remained as hot as you might expect.  It is down 1 point from last month but remains at near record levels and up 31 points from the same time last year, clearly an in-demand vehicle type.  Full-size Crossovers are down 2 points this month and remain at stable levels, but down considerably from record levels set in the summer of 2016.  Similar to the Full-size SUV’s, Pickup Trucks remain strong with a gain of almost 2 points from last month, still below record levels from the summer of 2016.

Luxury Cars are down 4 points of retained value from last month, and down from their record levels set in February of this year.  Mid-size cars are up almost 6 points this month, setting a new record level for a segment that is on the endangered species list for a few OEM’s.   Sub-Compact Car, which has struggled in recent times, has posted a gain of almost 12 points this month to come within striking distance of its previous record high from 13 years ago.  Higher fuel prices are certainly helping this along, as well as much improved product offerings in the segment.

Certainly, all industry eyes are on the NAFTA renegotiations, at the time of writing this commentary.  If any vehicle types or nations are singled out for tariffs by the U.S. it is our expectation that the coming months will see some very dramatic shifts in value.

To download the August 2018 Index Click Here.

The Value – Issue #9: Maximum Loan Advance on Any Vehicle On Your Lot? Business Managers Should Know!

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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By Yves Varin, National Director Business Development, Canadian Black Book

Today’s business manager has to contend with a lot of data to finalize lending agreements and close sales.  Data comes in all shapes and sizes, from the client, the banks, from internal software and more.  That being the case and understanding that customers’ time is at a premium, it is critical that the business manager is prepared with ALL the data they need, at a moment’s notice.

A key piece to this data puzzle, is for the business manager to have a clear sense of a given ‘loan to value ratio’ before finalizing the finance deal.  Armed with an accurate maximum loan value, takes out risk and can save valuable time for the customer and the dealership.

Currently most banks and sub-prime lenders build their retail finance programs based on Canadian Black Book average wholesale values, plus a percentage ranging from 120 to 180 per cent.  The overage is used to cover the costs of aftermarket products, or in an increasing amount of cases, to absorb negative equity resulting from the past contract.  If you are not using the proper tools, the calculation of this overage percentage is far from an exact science, but it can be.

This surplus amount is not based on any secured asset (like the vehicle itself) and therefore is inherently at risk and can be a guess.  What happens today, if the customer’s credit qualifies, is that the financial institution approves this questionable amount, under pressure to fill quotas in an environment of competitive banks.  Competition forces lenders to approve these ‘over-and-above ratios’, whether they are exaggerated or not.

Lenders, by and large, already access accurate third party valuation data integrated directly into their adjudication systems.  These banks and other lending institutions rely on MSRP numbers, average wholesale values, loan values and fair market value data in conjunction with their own lending conditions to assess the value of the collateral asset. This ever-evolving matrix or scoring card, which varies from one financial institution to another, constitutes their own “secret sauce”, so to speak.

So here’s the thing!  Much of the same can happen at the dealership level first, to speed up the process and put the business manager in a position of knowing what that ‘final loan to value ratio’ is quickly.  It makes so much sense for the business manager to get the same valuation data prior to submitting a credit application to the lender.  Knowing ahead of time what the maximum advance on a given vehicle is, gives the business office a clear understanding of what amount of dollars not to exceed, allowing the deal to fit within the lender’s parameters.  The trickle down of this knowledge is that sales associates can tailor their efforts to match vehicles to buyers.

Thinking of the process in three steps helps.  First, purchase quality vehicles at auction or via the trade-in; second, match the right vehicle to the prospective buyer (especially for sub-prime); and third, submit the application to the lender pre-populated to match their criteria.

Done this way, deals would not require time consuming manual reviews by a credit officer and more often would instantly acquire the approval.  Perhaps such deals would have been accepted regardless, however, in short, this saves time and we all know that in a vehicle sale – minutes matter!

Historically, it was the norm for the business manager to have a physical ‘Black Book’ on the desk to get this data.  There was no guess work, it was just an analog process.  The revolution in technology and shift to digital at dealerships has altered this once standard business office technique.   Lenders have not changed much over the years, while a new generation of business managers have steered away from proven tactics.  But there are contemporary digital tools available that can fill this gap.  Yes, there is a cost associated, but when compared to bank reserves that quickly add up to $1000 per deal, a dollar a day per user to get the right data at the right time, will be well worth it.

Dealer principals should encourage business managers to embrace these best practices and use the right tools, following the lead of what lenders are doing.  The goal is simple…to optimize the potential of each finance deal.

The Value – Issue #9: Canadian Black Book Kathy Ward Memorial Golf Tournament Raises Over $100k For Charity

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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Newly Named ‘Canadian Black Book Kathy Ward Memorial Golf Tournament’ Helps To Raise Over $100k For Charity in 2018

September 10, 2018, Markham, ON – For the twenty-first year of the tournament, it was renamed the Canadian Black Book Kathy Ward Memorial Golf Tournament, in honour of the host’s former long-time CEO.   To cap off a very special year for the tournament was the announcement that $109,680 were raised for the Tim Horton Children’s Foundation since Kathy’s passing last December.

Since inception in 1997, the tournament has raised over $500,000 for the charity of choice of the late Kathy Ward.  Kathy’s husband Harm DeJonge and their son William DeJonge-Ward, committed generously earlier in the year to match any donations made in her name, up to $50,000.  Between the tournament itself, website donations and money raised by the TADA (Trillium Automobile Dealers Association) at its golf tournament in August, Harm and William’s contribution was maximized, making this an exceptional year for donations to the foundation.

“I really don’t have the words to express how thankful we are at Canadian Black Book in recognizing how giving the auto industry has been this year towards Kathy’s charity of choice,” says Brad Rome, President, Canadian Black Book.  “All the golfers, the TADA, Harm and William, really stepped up and provided donations that are not only welcome, but really unprecedented for our fundraising efforts to date.”

The Canadian Black Book, Kathy Ward Memorial Golf Tournament was held at one of Canada’s premier private golf courses, Magna Golf Club in Aurora and hosted 120 golfers from the auto industry from across Canada.   The tournament was sold out once again and played on Monday September 10th, in extremely rainy and windy conditions.

“William and I are committed to honouring Kathy’s ambition to send over 1000 under privileged kids to Tim’s camps (a cost of approx.. $1000.00 per child),” says Harm DeJonge.  “With the support of Canadian Black Book, all of its affiliates, sponsors and the drive of all of the golfers, we are more than half way there to fulfilling Kathy’s ambitions!  Still a way to go, but thrilled that the tournament participants were there to share in Kathy’s dream and be part of that dream.  Let’s continue to fulfill her dream,” he adds.

“Kathy was a great friend to me and the TADA.  It was our honour to focus our fundraising on a cause so close to the heart of one of Canada’s auto industry icons.” says Todd Bourgon, Executive Director, TADA.

The winning foursome, in the scramble format tournament, were Martin Douglas, Mark Would, John Christianson, and Omar Khan, who carded an impressive -7.

As in previous years, the tournament’s partner sponsors are four of Canada’s premier financial institutions: Bank of Montreal, Royal Bank of Canada, Scotiabank and TD Canada Trust.

The Value – Issue #8: Mr. Sharing Economy, in the Fast Lane!

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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By: Brian Murphy, VP Research and Editorial, Canadian Black Book

Like many of you, I have a fairly long drive into work each morning.  In some respects, I don’t mind.  It gives me quiet time to think, listen to the news, and make a few calls (hands free of course).  To be honest, I can’t say every morning I contemplate the growth of the sharing economy, as it has been called, but recently I did just that.  By sharing economy, I am referring to the businesses of the world that are embracing the idea of shared assets to generate revenue, such as Uber, Lyft and Airbnb.

Photo by ARAS Imaging (www.arasimaging.com)

So, back to my commute.  On a sunny summer morning, I “met” a member of the sharing economy.  He was driving much too slow, in the passing lane of one of Toronto’s busiest highways.  I tried my best not to get too animated about his lack of highway manners, but then I noticed the car itself.

A few things jumped out at me.  First is that it is a new car and the top trim, with AWD too.  I know the model just launched a few weeks earlier, it was the first one I had seen on the road.  The next observation I had on my slow driving friend, is that he has both an Uber and a Lyft sticker on the rear window of his car.  Interesting, and a possible dramatic ‘oh-no’ for my unhurried friend!

I know there are many people who drive for services like Uber and Lyft on a casual basis and not as a full-time job.  However, I wondered if this driver is a full timer and now is driving a brand new vehicle and could potentially drive more than 80,000 km a year as a means of employment?  If so, things may not go well, from a cost of ownership perspective.

This particular car really grabbed my interest.  I checked the OEM’s website and Mr. Sharing Economy can finance it for 84 months (seven years!) for a very attractive $100 a week, with top trim, and AWD.  Deal?  Well, it depends on how he uses it.  Most of the assumptions about ownership and depreciation today are based around a consumer driving 20,000 km per year.  If this gentleman drives the average amount, his car will have about 180,000km on it when he pays it off.  The car will still be alive, but certainly heading off to the sunset years ahead of its service life.

What if this gent has really bought into the whole sharing economy concept and he drives 60,000km per year?  His Uber and Lyft stickers seem to suggest he is at least partially involved in these two enterprises.  So, when his shiny car is paid off he will have over 400,000 km on it.  If it does make it that far, which I don’t think it will.  You can probably guess that his vehicle will be worth $100 at that point, but only if it has three quarters of a tank of gas in it.  Ouch.  He will never have any equity in the car and depending on his luck he might still be paying for it years after it has gone to the big scrap heap in the sky.  I assume that he is not leasing the car, which would be another set of nasty circumstances.

In addition to depreciation, the owner of this shiny ridesharing vehicle is probably looking at 4-5 sets of tires, and he may be required to have snow tires as well. There are likely over 50 oil changes, 500 car washes etc.  There will also be some major component failures over that time, probably about 3 or 4 brake jobs, wheel bearings, and a transmission if he is lucky.  I wonder if he has done the math.

If he accidentally writes the car off partway through this seven year loan, he might find he is in a difficult place with respect to his small insurance payout (for an extremely high mileage car!) and the rather large balance remaining on the loan.  Given all these costs just to be on the road, I wonder how he will make a living wage.  It won’t be easy and likely not a sustainable way to run his little business.

My commuter musings are not meant to be a criticism of Uber and Lyft, but rather a cautionary note to anyone who is thinking of jumping into driving for the sharing economy.  Make sure you have done the math and understand the real costs.  Furthermore, driving with a brand-new car is probably the worst thing you can do.  Consider a used car that has been through at least the first 24 months of the greatest deprecation.  To avoid maintenance nightmares, do your research into which cars are bulletproof for reliability.

To those of you in the business of financing and leasing cars, I ask – are you fully prepared for Mr. Sharing Economy?  Today, most car leases prohibit use for business, but are you protected from risks like this?  Perhaps vehicle inspections every 12 months to check the odometer could de-risk the business for you.  Similarly, on loans, the value of the car is the security you have for future payments, but what happens when the value of the asset falls to $0 in a very premature way?  Is your risk of default higher on a $15,000 loan when the asset is now only worth a faction of that amount?

As the sharing economy grows (and if it is sustainable!) I am going to predict that vehicles will need to self report their mileage regularly to the lender or lessor and have tracking technology activated to have financing in place.  If enough lenders and lessors are stung by this phenomenon, you can bet that will be the case.   Maybe even Big Brother can get this guy to move out of the passing lane?

The Value – Issue #8: TalkAUTO: A Drive Down Memory Lane

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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By: Brian Murphy, VP Research & Editorial, Canadian Black Book

TalkAUTO…This event holds a special meaning to me in my career.  I’ve been around it in some capacity since its inception in 2012.  Over the years I’ve had the pleasure of helping organize the event, moderate discussions, present my work, network with my peers, stuff materials in shopping bags, meet new people, and sit back and listen to the business and automotive knowledge being shared from the industries best.

In year one, I clearly remember how concerned we all were about getting people into the seats.   Our registration numbers were quite good, but we still questioned whether or not enough registrants would actually show up to justify the efforts put into creating this conference.  Well on November 14th, 2012, the day came and all trepidation was quelled.  Over a hundred attendees from across the industry took it in.

Fast forward, only two years later and a new panic set-in on event day.  Do we have enough seats?  The staff organizers at Canadian Black Book and J.D. Power had to stand at the back, to free up some chairs for attendees to sit in.  Now the event easily amounts to over 400 guests each year.

I have a unique perspective given that I have worked with both title sponsors of TalkAUTO, in the past with J.D. Power and now with Canadian Black Book.  Over the years, my career has demanded a hefty travel schedule, but I do whatever I can to be in town for TalkAUTO.  It really is that important to me to be there, and absorb the wisdom from all the speakers and touch base face-to-face with Canada’s auto industry movers and shakers.  And, I’ve been able to share what I know through my own presentations (which I always spend way too much time over-preparing for).

The highest compliment we could afford this event, would be to say that its content seems to always be relevant, hitting the mark on current industry issues, opportunities and trends.  It’s the content and those experts that provide it, which makes this such a desirable annual gathering, not to miss.

To me, all the efforts put into presenting this day become worth it, when after TalkAUTO each year, I get numerous emails from attendees asking for copies of any or all of the presentations they just witnessed.  This proves to me that the agenda and subsequent content, provides real value to those in the room.  And I know that I am not the only person close to the event getting asked for those decks.

Personally (and without trying to toot my own horn), I’ve taken great delight having an OEM tell me how much they appreciated my presentation.  They’ve passed it around their Canadian head office, and then across the pond to their corporate parent, where it became a helpful planning resource.

Similarly, I recall a meeting with a senior management team of a financial institution to discuss a particular industry subject.  I sensed that the one executive was in agreement with what I was saying. Always a good sign.  Then he opened his desk drawer and pulled out my TalkAuto presentation in hard copy and said he had this from the year before, and what we were talking about was on about slide five!  Again, given how much time it takes me to prepare for these, this is what makes it worth it!

TalkAUTO really is a premier Canadian auto industry networking occasion.  Given the amount of OEMs around the GTA, you might assume that more of these events would exist, but they don’t.  Gathering a strong representation from OEMs, dealers, finance, suppliers, parts, academia, media, and more provides real opportunities to talk the talk.  I know for fact, that many important business connections, deals and even jobs are had as a result of TalkAUTO.

But it is not always perfect.  In 2017, during my presentation, onstage I did have a slight mix-up where I said I worked at J.D. Power, instead of Canadian Black Book and got a few strange looks.   (Note to self, try not to make that mistake when your boss is sitting twenty feet away).  .  It was an honest mistake, yet good thing Brad Rome has a great sense of humour!

The feedback we get about TalkAUTO is overwhelmingly positive.  About the only complaint I hear about TalkAuto is that someone didn’t know about it and didn’t get registered in time or rearrange their calendar to avoid conflict with another commitment!

TalkAUTO Canada 2018 is November 7th, so mark it down!  Registration is open at www.talkauto-canada.com .  Oh, and it’s free!  I know I’d regret missing it!

The Value – Issue #8: July 2018 Used Vehicle Retention Index

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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The Canadian Black Book Used Vehicle Retention Index is mirroring the hot summer weather much of Canada has had recently! The July industry index of 103.3 is only 0.01 off the record high mark from April of this year. This is an excellent indicator of how strong values continue to be, despite growing used car supply in Canada and the U.S.. The July index is up 0.3 points from last month and a strong 2.4% from the same time last year.

Surveying the different segments, we see that compact car has posted a significant lift from July of last year with a 7.5% gain. Compact car prices had previously fallen in 2016, so the current increase is partially a price correction, and we expect renewed interest in smaller cars given higher gasoline prices. Sub-compact cars are following a similar course with gains of 11.1% since last year and 5.1% from last month. Smaller cars are one of the most active segments in the market at the moment and will be one to watch in the coming months.

Full size pick-up trucks are down 3.1% from last year, but up 1.1% from last month. Small pick-ups are also down almost 1% this month, and down by 1% from the same time last year. We expect more headwinds for truck pricing in the coming months as more supply comes back from leases ending, both in the USA and Canada.

Mid-Size Luxury CUV/SUV are also slowing with drops of 0.8% this month and 2.2% from last year. Minivans are only off 0.3% from last month but theare in a pretty significant slide of 6.7% versus 2017.

So far the index does not show any response to suggestions of coming import tariffs from the U.S. administration, and that is another positive observation for a sunny month for the industry.

To download the July 2018 Index Click Here.

The Value – Issue #7: Bordering On Chaos? – By Brian Murphy

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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Tariffs and the Canadian Used Car Market

By now, many of you have likely had at least a few sleepless nights pondering the possible grief U.S. vehicle tariffs could create for the Canadian auto industry.  I certainly have in recent weeks. I’m writing this article, just days after Canada Day 2018 and our government’s imposition of reciprocal tariffs on steel, aluminum and a menu of other products, so nothing has happened yet with respect to vehicle tariffs.

Brian Murphy
Brian Murphy, VP Research & Editorial, Canadian Black Book

I’m hoping (perhaps praying) that nothing will happen, other than a new NAFTA deal fair to all parties.  The impact of new tariffs would be devastating.  I recently read that John White, President of the CADA, described the potential damage, before the House of Commons Standing Committee on International Trade, as “tsunami-like” and that is the most concise explanation I have seen yet.

Much has been covered about possible impacts of these terrible tariffs on new cars, but I would like to steer the narrative towards the impact on our used car market and values.

Currently there are a large number of used cars exported to the U.S. from Canada each year.  Since 2015, it has been reported by many to be in the 200,000 – 350,000 unit range.  This has primarily been driven by a weaker Canadian dollar and a historical shortage of used cars in the U.S.

When the Canadian dollar passed below $0.80 in 2015 it triggered the opportunity to profit by exporting cars south.  Given the current exchange rate, and even with falling U.S. used car prices, this model is still a profitable practice.  This exodos of cars and trucks of all stripes has helped keep Canadian used car prices at record high levels.

The Canadian Black Book Used Vehicle Retention Index, which tracks the value of two to six-year-old vehicles, continues to set month over month all-time records.  This strong value storyline is partially due to this export activity and our generally healthy economy, both of which create strong demand and raise prices.

Stronger used car values have rocket-propelled new car sales numbers, as retailers and OEM’s pull delighted customers out of leases and loans early and put them into new vehicles.  A 25% tariff would derail all this export activity and have a massive impact on the Canadian used car landscape.

The specific impact a tariff will have has a great deal to do with the actual terms and conditions written into the policy.   It’s difficult to anticipate exactly what that fine print would look like.  I’ve assumed that any tax imposed by our southern friends on new cars would also be applied to used cars.  This would avoid games being played with shipping a new car with 50km on it and calling it a used car.

If a used tariff does come true, it would matter if it was applied to all cars regardless of country of origin or just cars produced outside of the U.S. market.  It could also depend greatly on how and if the U.S. redefine their content rules for what constitutes a U.S. car vs a foreign car.  There are lots of “what-ifs” and “it depends” that exist at this point in time.

If we assume a tariff is applied only to vehicles manufactured outside of the U.S., we could reasonably expect the values of those specific vehicles to fall sharply at Canadian auctions almost immediately after the tariff is implemented.  Buyers for the U.S. market would simply no longer purchase these at Canadian auction.

If tariffs are more broadly applied to all cars coming from Canada, regardless of origin, the result for used vehicles that are being exported today would be a fall in value.  Lower prices for some vehicles would then spill over, as other vehicles fall in value due to competitive market pressure.  Over time we expect that some ‘made in U.S.A.’ vehicles may then see a nice rebound in prices.

So, why would there be this up and down roller coaster?

Presumably the Canadian government would respond to a U.S. tax buy imposing a similar 25% duty on new U.S. made cars.  Canadian consumers would likely (over time) look to the used market to buy that vehicle that was now much more expensive as a new model, due to the import tax.  How long this may take depends on how much inventory dealers and OEM’s have, which always varies from car to car and region by region.  For some higher-end SUVs and trucks some cost of the tariff could be absorbed by OEMs, but they would likely lower incentives, making for much higher monthly payments.

With a lot fewer U.S. built new cars coming into the Canada, given lower demand, supply for those vehicles would be very tight and used prices might be almost “like new” for lightly used units.

On top of everything, dealers would be affected greatly as well.  If certain used car prices fall at auction, this would mean retail prices would also be affected forcing dealers to “reprice” their used inventory, resulting in much lower prices.  How big the impact is depends on how fast consumers substitute used cars for new.

No matter how I look at this situation, I see no “winning” on either side of the border, only painful losses!  Retaliatory tariffs by Canada and other nations to any U.S. action will create lower demand for U.S. product instantly.  Without that export demand, many U.S. auto sector workers will subsequently be out on the street, and their Canadian cousins will be right there with them, talking about how great things used to be in the old days.  I beg for cooler heads to prevail, the economies of both countries and this great auto business of ours are counting on it.

The Value – Issue #7: Used Vehicle Operations Getting Technical. Let’s Talk Software. – By Cole Reiken

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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Software really is at the heart of most of the business operations at today’s dealership.  I’m not discounting the importance of good people, great thinking and hard work, but the fact remains that technology is integral in the selling of vehicles today.  Software is deployed to manage marketing of new and used, accounting, sales, inventory, HR, and I could continue down the long list of specific tactical elements where software helps dealers do business.

Cole Reiken, Vice President, Digital Strategy & Product Management, Canadian Black Book

The focus here will be on used vehicle operations and what I see as constituting best practices for the used business unit to concentrate on.  As you know, there is much to consider.

Off the top, it is critical for used car managers to understand which vehicles to purchase, pricing trends in the market and how much they should be paying for those vehicles.  The right vehicle valuation software is crucial to help provide this knowledge.

When selecting your valuation tool, it is important to know what type of data is provided.  For instance, auction reporting data provides insights on what used vehicles sold for at auction versus data sourced from retail listing prices from vehicles posted online.  Dealerships should hone in on tools that provide more comprehensive value and trend data that includes auction results, industry sales data and upstream OEM sales from across Canada.

Okay, now that we (hypothetically) have that knowledge in place, how and where are the best tech methods to source those vehicles?  Using the power of the internet to leverage online auctions and participating in simulcasts work best.  They help increase reach by covering a larger geographic distance, as opposed to attending actual auctions themselves.  On top of that, transporting vehicles is relatively inexpensive.  This can all be done at a desk in the dealership.  In doing so you may identify regional opportunities to find specific pricing on specific types of vehicles.  The best case scenario would be to couple this technique with your newly installed valuation tool to help recognize the best vehicles to purchase.

It’s also wise to pay close attention to vehicle appraisal tools employed in your used car department.  You want your appraisal tool to allow you to review the vehicle at auction or during the trade-in process.  The best versions of this software capture vital details about the vehicle’s current condition.  The most sophisticated will offer photo capture options, to record vehicle condition regarding its general state, any damage and to document features or equipment.

Now that you’ve sourced the right vehicles and purchased them, they begin to add up on the lot.  Deploying an inventory management system can help organize, monitor, and drive efficiencies.

Inventory management software goes further than your standard DMS which track the likes of your floor plans and interest costs.   Although a basic feature, tracking vehicle time on lot and turn times is vital reporting data for your operation.  Further to that, most systems will identify the units on the lot that sell fastest, helping you with some marketing and sales decisions.

Good inventory tools will generate templated used vehicle listings that can be syndicated to your website as well as the major listings websites, like Canadianblackbook.com.  Needless to say, this is a major time saver and can bring consistency to the marketing plan.

All of the above are considerations when tooling your used vehicle team with software, however, the most important piece of deploying (any form of) software or technology is the process or workflow.  Quite frankly, it can be a culture shock.  Determining the composition of a dealership’s workflow is the most important task when trying to optimize this system.  If your software solution does not fit or you have to adopt a new workflow to fit the system, then the full feature set and ROI, will certainly not be realized.

The key is training.  I’m not talking about training that shows you to ‘click here and…do that’.  No, proper team training that puts the focus not just on the clicks but ties that back to YOUR process.  Training ensures that all team members understand the functionality and how it can help them day-to-day.

After all, the growth of software within any dealership equates to a cultural shift that’s not always easy.  It’s a cultural shift that we need to embrace, but only if the solutions chosen actually fix existing problems or inefficiencies.  The right software in you used car operation can do both.

The Value – Issue #7: June 2018 Used Vehicle Index Commentary

Welcome to The Canadian Black Book – The Value. Our goal is to provide our clients and partners with news, event updates, new initiatives and opinions from Canada’s trusted source for vehicle values and automotive insights. In this edition we cover:

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The Canadian Black Book (CBB) Wholesale Used Vehicle Retention saw a small decline of 0.4 per cent for June, the first decline since January of this year.  The index remains at a very high level overall and reflects that vehicle retained values are still at some of the highest levels since the tracking began in 2005.  Compared to June of last year the index is still a strong 3.9 percent ahead.

Looking across the segments in greater detail, the Subcompact and Compact Cars have shown impressive growth of 8 per cent and 7.4 per cent respectively since the same time last year.  Subcompact cars are up 0.6 percent from last month alone.  No doubt some higher fuel prices are helping these two segments stay strong.

Compact crossovers continue to strengthen their values, not surprising the Canadian market’s love for this type of vehicle.  The popular segment is up by 4.4% from last year and 0.5% from last month alone.

Mid-size car shows a surprising gain of 7.4 per cent from June of last year, posting one of the biggest year over year increases of any segment, but still down 1.4 per cent from the beginning of the year.

On the negative side of the ledger, full size pickup trucks are down 2.2% from last year and down 0.7% just this month.  Luxury cars are down 1.5% from the same time last year, as are minivans which showed a decrease of 3.9% year to date and 1.3% from last month.

To download the Index for June 2018 CLICK HERE