LAS VEGAS – Independent dealers navigating inflation, inventory issues and other challenges, can find ideas, networking and support through dealer 20 groups.

This summer the National Independent Automobile Dealers Association held a “Hot Topics” session to introduce the 20 group concept.

NIADA 20 Group moderators Ben Goodman and Bill Elizondo gave dealers a taste of how 20 groups can help a dealer address problems or questions.

These are groups made up of 15 to 20 dealers of similar size and business models –from non-competing markets – who meet a few times a year.

In these groups of non-competing dealers, moderators prepare a composite of each dealer’s financials, so members can see where each other stand. They show a dealer where their strengths and weaknesses are.

The meetings last a day and a half.

In this setting, a dealer who is struggling in one area can ask other members who might be doing well in that area.

Elizondo said dealers can talk about different practices that can open a member’s eyes to a more profitable solution.

“Maybe you talk about what you’re doing in collections and you’re not doing payday payments,” Elizondo said. A fellow member may be able to show how payday payments boosted their collections and made them more profitable.

The key is being able to freely discuss your business from soup to nuts with a non-competing dealer who you can share advice and tips with.

 Each member is free to critique each other, helping to improve each other’s business and profitability.

At the NIADA discussion, the moderators mimicked a 20 group “hot topics” session.

“Every time we have one of these meetings, we’ll start at the beginning with what we call a ‘focus statement’ for the meeting,” Goodman said. “Essentially, it’s all the members saying, ‘this is what’s important in my business today.’”

The moderator will go through the group writing each dealer’s topic on aboard to discuss. Over the court of the meeting sessions, dealers will address those topics.

Issues former what collateral protection insurance (CPI) product a dealer uses to collection and repossession practices or hiring/retaining auto techs.

At the NIADA meeting, one topic discussed was the timing of a repossession.

One attendee said 14 days, to give time for the customer to respond to the dealer.

But Darla Booher, a past National Quality Dealer, said the timing depends on the collateral.

“For me, it’s a situation of the collateral is in jeopardy or not,” she said. “It could be day two or day three if the collateral is in jeopardy or if the pickup note wasn’t paid.”

But for a standard account, she would look at between 28 and 32 days.

Another dealer asked how to balance the rising cost of capital with a customer’s monthly payment that is already stretched.

One dealer in the audience said he is simply eating the extra cost and collecting less profit.

“We’re just hoping we’ll outlast the next guy,” the dealer said.

Another attendee said he is extending loans out six months or a year longer than normal.

One dealer said he also extends the length of term to make it more affordable and just hopes he doesn’t have to repo the car.

Goodman warned that the industry standard for buy-here, pay-her deals is 24 months.

“That’s what you’re going to get,” he said. “The analytics show regardless of the length of term, you’re going to get, on average, about 24 monthly of payments.”

It’s better to get money up front, as much as possible, than simply tack on extra months to the term.

“That debate happens in almost every one of our 20 groups,” Goodman said.

Dealers asked about how to improve the recon process and efficiencies.

“You have to track it,” one attendee said. “You have to track everything that moves from start to finish. How long does it take that technician to put those parts on? Or how long does it him take to evaluate or reevaluate the car once the repair is done?”

Another dealer suggested sticking with similar makes and models in your inventory, allowing techs to become familiar with the typical repairs and getting them done more quickly.

The issue of theft came up and what to do about it.

“A wise person once told me, nobody can steal from you unless you trust them,” one dealer said. “It’s the one that you trust the most that will steal from you.”

She said to make sure to audit and do spot checks on petty cash, for example. If petty cash is short $50, where else is money missing?

Another attendee agreed with that assessment.

“We just had someone that’s worked with us for eight years pocket $1,500,” he said. “We would have never caught him if we didn’t have 32 (high def) cameras on site.”

He said those cameras have probably saved him $15,000 to $20,000 over the past two years.

These are the conversations that 20 group members have and they help each other find the answers. Elizondo said many times the members become friends and confidants.

He said the benefit of the 20 groups is every dealer will walk out of a meeting with ideas and a business plan to address these challenges.