How green are we?

Jun 022010

You hear a lot about going green these days. At the Birdnow Dealerships we take that seriously and were doing it long before it was politically correct or the latest fad.

About 27 years ago when I first owned my Jesup dealership I noticed an employee heading out the door with a pan of old gasoline. I asked him what he was doing and he indicated he was going to dump it outside on the gravel lot. I told him to never do that. We put it in a barrel and when full we paid to have it properly disposed of. When we began our body shop, we contracted with Safety Kleen to properly dispose of old solvents and paints. We also comply with the emission rules for painting operations.

Even before it was required, we bought an oil filter crusher and began crushing used oil filters. At first we burned the used oil in a waste oil heater. I paid nearly twice the cheapest price for a heater in order to get one that more thoroughly and efficiently burned the oil so as to create less pollution. For the last several years though, we’ve had the used oil from them and from our oil changing operations picked up by a licensed recycler. We paid to have the crushed filters properly recycled also. For years we’ve properly disposed of oil rags, wipes, and floor dry products as well as mercury switches and fluorescent lighting tubes. We also pay to have used tires hauled away for recycling.

As the years have gone by, most everything that we’d been doing became required, or the law in most cases.

How do we pay for all of this? We put a small percent charge on each repair ticket with a max cap. This money goes into a bookkeeping account and all recycling fees, and charges are put against that. So far we’re pretty close to even.

When it’s all said and done, though, if we all do our part, we’ll leave a better place for those who follow us.

Insurance, An important part of the cost of a vehicle

Uncategorized No Responses »

Mar 032010

We often suggest that a customer should investigate and compare the cost of insurance for a vehicle they are considering purchasing.

There is a guide that every new vehicle dealer is required by law to furnish you a copy of that compares insurance ratings of new vehicles. The government compiles this book using accident data from most accidents. The rating that a particular vehicle has can greatly affect the premium you’ll pay for collision insurance. Remember that if you finance your vehicle you’ll be required by the lender to have collision and comprehensive insurance coverage. Even if you’re not financing you should have those coverages if your vehicle is worth more than you can afford to lose if it was totaled.

So here’s how it works. A police report says that the driver was going 35 miles per hour and hit a parked vehicle. The insurance company pays the claim to fix the vehicles. That data is compiled along with possibly a million other accident claims each year and the circumstances of the accident. They are then able to spot trends where one vehicle costs more to fix in a similar accident than another. This happens because of the way some vehicles are engineered or built and also because of the cost of repair parts. A large percentage of accidents result in the insurance company paying to have the damaged vehicle repaired so they are very interested in the cost to fix a vehicle.

We once had a Mitsubishi traded in. The customer said they couldn’t afford the insurance, it was three times higher than the same size class and value Chevy we sold them. Recently we found a dash assembly required (because the air bags had deployed in an accident) to fix a Chevy was slightly more than $400.00 and a dash assembly for a similar competitive make vehicle was $3,800.00. That’s why insurance premiums can vary so much from one vehicle to another. Remember that if in a certain accident one car costs $5,000 to repair and a different vehicle costs $8,000 to repair, the insurance company is going to charge a higher premium for the second example.

Finally, when there are safety recalls, that can increase your premiums because it’s not always easy to prove if a vehicles system failed that caused an accident.

Extended Warranties update!

Maintaining your car 2 Responses »

Jan 112010

(Click here to read the earlier post about extended warranties.)

From the St. Louis Post-Dispatch:

US Fidelis suspends sales of service contracts

by Matthew Hathaway

ST. LOUIS POST-DISPATCH

Wednesday, Dec. 30 2009

WENTZVILLE — After laying off hundreds of workers at its massive call center
this month, US Fidelis announced Tuesday that it has stopped selling extended
auto-service contracts.

Meanwhile, Missouri Attorney General Chris Koster is seeking to amend a lawsuit
against US Fidelis to include additional allegations of deceptive practices
that, according to a motion, were directed by the company’s owners, brothers
Darain and Cory Atkinson.

Company spokesman Ken Fields would not answer a reporter’s questions about the
viability of the company, and he denied a request to interview US Fidelis Chief
Executive Chris Riley.

As recently as April, US Fidelis had boasted about 1,100 employees and claimed
to be the nation’s top seller of extended auto-service contracts, which often
are marketed as “extended warranties.”

The firm was an industry leader, and in the St. Louis area it spawned dozens of
rival companies started by or staffed with former US Fidelis employees.

As with US Fidelis, several of those companies are being sued by Koster for
misleading consumers. On Tuesday, Koster’s office sued four more area
companies: St. Louis-based Carhill Enterprises, which does business as Consumer
Protection Services; St. Charles-based CarSafe, which does business as Dealer
Preferred Warranties; St. Louis-based Dealership Services; and Maryland
Heights-based Dealership Warranties.

Fields, of the Fleishman-Hillard public relations firm, did provide a company
statement attributed to Riley. In it, he said the company had suspended sales
and was focusing on reducing the number of customers who cancel their coverage.

The company has blamed a tide of recent cancellations on the economy as well as
what it considers to be unfair criticism levied against it by consumer groups
and the news media.

“As a result, hundreds of good, hard-working people have lost their jobs and
the St. Louis area has lost hundreds of millions of dollars in annual economic
impact that our company provided,” says the statement, which credited the
company with delivering “more than $280 million in annual economic impact in
Missouri.”

Although sales have been suspended, the company says it still employs more than
200 workers — including customer-service and account-resolution agents who work
with existing customers, which the company has said number more than 300,000.

Keeping most of those customers from canceling is important, but it may not be
enough to keep the company viable, said Philip Jehle, the former chief
financial officer and vice president of operations at US Fidelis. To survive,
it needs new customers.

“If they’re not selling, there’s no revenue,” Jehle said.

US Fidelis customers pay in monthly installments, but that money doesn’t go to
US Fidelis, Jehle said. That’s because the firm gets its money on the front end
— in full and in advance — from companies that finance customers’ purchases.
When those customers cancel, US Fidelis must pay the finance companies back.

Cancellations aren’t the company’s only concern.

On March 6, 2008, Missouri’s then-Attorney General Jay Nixon sued the company
for violating telemarketing laws and for mailing consumers deceptive sales
letters. Litigation of that lawsuit stopped when Missouri joined a multi-state
investigation of the firm.

That investigation now includes at least 43 state attorneys general.

Last week, Koster’s office breathed new life into the state lawsuit by seeking
to amend the original complaint. The amendment would include allegations of 40
current and past business practices that violated consumer-protection and
telemarketing laws.

Koster’s office now accuses US Fidelis of deceiving consumers through the sale
of controversial and unregulated coverage plans that require consumers to
purchase an auto additive. That practice, which is common among
service-contract brokers based in the St. Louis area, was first made public in
August when the Post-Dispatch published a story about the prevalence of what
Koster has since dubbed “the additive scam.”

Additive-based warranties, unlike extended service contracts, do not need to be
refundable or underwritten by insurance companies. The additive-based plans
cover fewer repairs, it’s easier for companies to deny claims and consumers
often are unaware that the product they bought wasn’t, in fact, a service
contract.

Closing dealerships

Uncategorized 2 Responses »

Dec 162009

Last year as part of the restructuring of GM and Chrysler in bankruptcy, approximately 2000 dealers were abruptly terminated, or in the case of GM dealers told that they would lose their franchises no later than October of 2010.

GM and Chrysler claimed that dealers cost them a lot of money. Here’s a good way to look at this. Consider dealers as the only customer of the manufacturers. Also be aware that virtually everything we get from the manufacturer, we pay for. Canceling out dealers would be very similar to a dealer filing for bankruptcy and in the bankruptcy stating that the dealer would no longer sell to people whose last names started with A through the letter D. Less dealers mean less competition and fewer choices for getting service for consumers.

I’ll admit that some dealers might have been too close to one another, but wouldn’t it have been a better plan to allow the market (that means the customers) choose which dealers would survive? Many dealers lost franchises because the manufacturer wanted to combine their brands under one roof. Here’s an example of that: In the Waterloo Cedar Falls area, Holdiman Motor lost their Jeep and Chrysler franchises. Those franchises have already been given to a different dealer who had the Dodge franchise. Even in bankruptcy the Jeep and Chrysler franchises had considerable value yet the manufacturer took them from one dealer and gave them to another dealer. This, I’m pretty sure of, was done with no payment to Holdiman, or charge to the other dealer.

There are rules and laws that protect dealers from manufacturers using such tactics. But in the shroud of bankruptcy they were able to bypass those laws. There are also rules and laws that protect dealers from unfair competition and also require that all dealers pay the same amount for their new vehicles from the factory. Those laws and rules were created years ago to ensure that there were convenient service and price competition available to consumers and that little dealers wouldn’t be unfairly forced out of business. The alternative will be no place but large towns having auto dealers. The big dealers would like that, you won’t….

I’d love to hear your thoughts on this subject.

Let’s talk about: Taxes and buying a vehicle

Purchasing a vehicle No Responses »

Oct 282009

This article is mainly meant for my Iowa friends. And of course you need to consult with your tax preparer before you ever make a purchase that involves your consideration of a tax write off or deduction.

In Iowa, this is the last chance to deduct the use tax (the 5% added on for road construction) that is added on any vehicle purchase. We often refer to it as sales tax, but it’s really called use tax.

There are also some very good tax deductions for purchases made for business. Again, you need to discuss this with your tax advisor. Using my companies as an example, we are going to purchase two new trucks with snow plows. They are 100% deductible this year. We are also going to purchase a five year old truck with a plow also. That one, because it’s used, is 20% deductible this year and the remaining 80% at the rate of 20% per year for the next four years.

This year inventory is lower that I ever remember. This is in part because of the success of the cash for clunkers program, and also plant shut downs because of retooling, etc.

Every year we have customers that wait for the last minute and then are in a big hurry to get something bought. They sometimes ask us if they can order and pay for a vehicle in December, but take delivery after the first of the year. It’s my understanding that if the IRS is aware that is what happened, they’ll disallow it.

Take advantage of the selection now, or pick from what we have coming, or we’ll even locate a vehicle for you at another dealership, if we don’t have what you want.

Cash for Clunkers – thoughts from an auto dealer who was in the trenches!

How a dealership works No Responses »

Oct 202009

I’m sure you all heard about the cash for clunkers program the government approved a few months ago. Now that the dust has settled, here are the thoughts I have.

First of all, the program was approved months before it was able to be implemented and used. The final rules didn’t come out until a few days before the program began.

Second, the website that we dealers were to use was overwhelmed most of the time, but most especially in the beginning. There were also lots of vague and unclear rules as well as rumors. One of those rumors was that only a certain amount of dealers would be allowed in the program. That caused most to be on line at 6am central time on opening day, along with dealers in other parts of the country, as early as 4 am on the west coast. Of course, that overloaded the system, maybe even caused it to melt down…. It never seemed to recover. Then, there was the next big rumor. It was announced, only on some internet news sites, that the program would be shut down at 8 am the following morning. Any sales not in the system by then wouldn’t be honored. There was a concern that no one knew for sure when the money would all be committed, and what would happen to those last rebates if the money was gone. Think what your reaction would be if you’d bought a car from us, got the Cash for Clunkers rebate, only to have us call you back and say that the rebate was not available because we couldn’t get the sale reported or the money ran out? So, my staff was at the dealerships as late as 1:30 am trying to get all of our sales reported. This, all because the website was so slow.

Other reporting problems were: We’d get a sale rejected, but there would be no explanation what was wrong. The response would simply say that there was an error, or multiple errors. We later found that a rejection was caused by there not being a comma after a persons last name, before their first.

Many dealers (not us) had to stop the program because they had so much money outstanding waiting for government payment, that they couldn’t do any more. Or in some cases they became worried that the government somehow wouldn’t pay.

The requirement that the engine be destroyed in the clunker trade in vehicles was not a good idea at all. It caused vehicles to have to be hauled, rather than driven to the salvage yard at a much larger cost. It will further cause the price for used engines to go up and be in shorter supply. If the goal was to stop the clunker trade in from ever being used on the road again all that would have been needed is the requirement the title be transferred to a junking certificate. There are many folks who can’t afford any option but to fix up their old vehicle, believe me I know as we help many people in this way from our Birdnow Auto Recycling business at Fayette.

In the end, we got all of the money promised, and sales were good for a month….

Extended warranties

Maintaining your car No Responses »

Oct 142009

What’s the scoop on extended warranties?

I notice lots of ads on TV, spams on my email, cards in the mail, even phone calls wanting to sell the above.

Here’s what you need to know. I personally don’t buy extended warranties on anything. But, I would buy one on a vehicle. Here’s why. A vehicle is very complicated, and it’s not a throwaway item. Consider a higher priced item such as a refrigerator. It sits in the corner, doesn’t get bumped over the road, go from 25 below to 100 above, and only has a couple of moving parts, but an extended warranty might cost as much as 25% of it’s purchase price. On the other hand, a good extended warranty for a vehicle will only cost 5 or 6 percent of the purchase price.

Here’s the most important information of all, if you decide to buy an extended warranty. Buy it from the dealer that you expect to get your service at. I could tell you stories of other extended warranty “companies” that:

Made us wait five days before an adjustor could come and look at the broken part.
An adjustor that examined a vehicle, left, and told the warranty company he didn’t think the vehicle had been serviced properly. (not the case at all) but coverage was denied.
A company that denied coverage after we had taken out the transmission because they’d already paid another dealer to fix it.
A company that denied a claim because some total limit had been reached.
Numerous occasions where my staff had to wait on hold for up to an hour to get to talk to the company.
Numerous times that a company either went out of business or never existed in the first place! There are actually scams that solicit you to pay them and send a worthless piece of paper. The trouble is, by the time you try to file a claim, it could be months or even years later.
So many loopholes that we can’t get authorization on a repair that appears that should certainly be covered.
Not being able to get paid at all after we thought we had authorization.

Our policy, as well as most dealers, is that we’ll be happy to repair your vehicle, but you’re on your own to collect from a warranty company other that the ones we represent. Simply put, if you buy our warranty, it’s almost like factory warranty, we handle all the paperwork.

Remember that we’re interested in making sure you’re satisfied with and get a good value on a legitimate product. Our reputation is at stake as well.

Ready for winter?

Maintaining your car No Responses »

Oct 032009

Here are some important service items to help you prepare for winter!

Check the level of antifreeze, it should be at least -35.
Flush and fill your car’s cooling system. Check belts & hoses
Check battery and charging system.
Check brakes.
Inspect your tires and have them rotated and balanced. Inspect front end parts and check for proper alignment
And of course, don’t neglect changing your motor oil. We recommend in nearly all cases to do this every 3000 miles.
A routine coolant system flush is quick, inexpensive and easy way to prevent sludge, lube the water pump & protect from corrosion. We recommend doing this every 5 years or 50,000 miles. We are aware that some manufacturers recommend longer mileage intervals, but we think to be excellent preventative maintenance to do this at lower mileage intervals.
Another item that is critical is a transmission flush. The need for this varies for various vehicles. For instance, a truck that hauls, tows, or plows snow should be flushed at 25 to 30 thousand miles. Cars can go as much as 60,000 miles, but in all cases should be done every five years. Again, this differs from what your owners manual might say, we are only using our years of experience to make these recommendations.

There are many things you can do to prepare for winter, but when it comes to the mechanical components of your car, you should trust our experts to analyze and tune-up your vehicle as needed. We’ll be happy to check most all that we list above at no charge. In other words if we find your belts, hoses, antifreeze protection level to be adequate, we don’t charge for that. You only pay for actual needed services!

Not only will you have peace of mind on the road, your car will last longer, run smoother, and use less gas.

How green are we?

Insurance, An important part of the cost of a vehicle

Extended Warranties update!

US Fidelis suspends sales of service contracts

Closing dealerships

Let’s talk about: Taxes and buying a vehicle

Cash for Clunkers – thoughts from an auto dealer who was in the trenches!

Extended warranties

Ready for winter?

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