Issue link: http://read.dmtmag.com/i/636351
FINANCIAL Some dealerships think compliance is a head- ache, but I've noticed that with the majority, it doesn't even cause the least bit of stress. How- ever, if you don't know that something is about to pounce on you, then you will never stress over it. In today's environ- ment, managing com- pliance should at least cause some dealers to lose sleep, especially if your process hasn't kept up with regula- tions, training, forms, growth and employee turnover rates. There are a ton of laws and regulations that apply to F&I. Red Flags rule, OFAC checks, Risk-Based Pricing Notice, Truth-in-Lending Act ("TILA") and "Regula- tion Z", Fair Credit Reporting Act ("FCRA"), amended by Fair and Accurate Credit Transac- tions Act ("FACTA"), Consumer Leasing Act ("CLA") and Regulation M are among them. And most of them are handled by completing and submitting the proper paperwork. But how could all of those not cause powersports dealers to lose any sleep? You typically won't find motorcycle deal- ers in the news over a lack of compliance, but unfortunately there really is a lot happening behind closed doors. And it's likely that you still won't hear much about it in 2016. In my last article, I talked about chargebacks, and this has something to do with some of those chargebacks. If a customer purchases a motorcycle from your dealership but is called back a few days or weeks later to correct errors on paperwork, then you'd better make sure that customer has signed a form, so they understand that the terms, lender, correct spelling of their name or something else has changed. Otherwise, there's a chance that you're going to be held liable for the repossession of that motorcycle, if it gets repossessed. But there's more. The bank will want all of its money back. The customer will want all of his down payment/money back; protection product income needs to be returned, and you might never see the motorcycle again. Of course, you've got to pay your attorney and the customer's attorney. But the good part about this is that it will never be in the news. The bad part is without dealers hearing about this kind of stuff happening, many think that this busi- ness is still immune to it. Compliance issues are only a headache when you figure out that you should have been compliant and paid attention to the laws. Many powersports dealers are still small enough that the people going after them aren't trying to get enormous amounts of money, but rather "just" a few hundred thousand dollars. So you might be wondering, "How do I stay compliant?" Begin with becoming familiar with the laws and regulations that I mentioned above, and don't forget that there are compli- ance experts in our industry. Also, locate some training or informa- tion on staying compliant. A lot of industry people think that compliance infractions have something to do with deception, and some of it does, but don't begin to think that if you're not deceptive then you're in the clear. In 2015 I watched a lot of good money be taken from some very nice dealers, and it had nothing to do with deception, but at times only one signa- ture was missing on one piece of paper. PSB Tommy Ady is an F&I sales expert with more than 25 years in the powersports retail business. He is a trainer and consultant for Gart Sutton & Associates. Contact him at tommy@tommyady.com. 8 • February 15, 2016 • Powersports Business www.PowersportsBusiness.com Are your dealership's compliance checks in place? STOCK MARKET WATCH DEALER FINANCIAL SNAPSHOT 2015 V. 2014 Same Store Sales for CDK Global Recreation dealers increased 4.2 percent overall in 2015 when com- pared to 2014. The Northeast was the only region to see an increase in all four categories and was up 5.8 percent overall. Both service department sales and major unit sales were up in all five regions, while parts decreased in four of the five. The Midwest saw the biggest decline in parts, down 5.1 percent. All five regions reported overall increases through 2015. PARTS SALES Parts saw 683 dealers up and 752 down. SERVICE SALES In service, 814 dealers were up, and 599 were down. MAJOR UNIT SALES 686 dealers were up in major unit sales, while 625 were down. NORTHWEST -2.2% Parts Department 4.4% Service Department 5.3% Major Units 3.8% Overall MIDWEST -5.1% Parts Department 5.4% Service Department 2.9% Major Units 1.8% Overall NORTHEAST 0.1% Parts Department 3.9% Service Department 7.5% Major Units 5.8% Overall SOUTH -2.5% Parts Department 5.7% Service Department 5.2% Major Units 4.6% Overall WEST -1.1% Parts Department 6.3% Service Department 5.6% Major Units 5.0% Overall UNITED STATES -2.3% Parts Department 5.4% Service Department 5.2% Major Units 4.2% Overall Stock Price Percent Company Ticker 1/22/16 Change Spy Inc. XSPY $0.10 228.4% Speedway Motorsports, Inc. TRK $18.28 -11.8% MarineMax, Inc. HZO $16.23 -11.9% Dover Corporation DOV $53.29 -13.1% TCF Financial Corporation TCB $12.13 -14.1% Brunswick Corp. BC $42.23 -16.4% ArvinMeritor ARM $6.96 -16.6% ARI Network Services, Inc. ARIS $3.63 -19.3% Arctic Cat, Inc. ACAT $12.33 -24.7% Universal Technical Institute UTI $3.48 -25.3% POWERSPORTS BUSINESS WINNERS AND LOSERS MARKET WATCH Change 01/22/16 from 12/31 % Change Powersports Business Index 215.192 -19.85 -8.44 Dow Jones Index 139.979 -11.58 -7.64 S&P 500 Index 129.787 -9.33 -6.70 Source: Wells Fargo Securities LLC STOCK MARKET ACTIVITY F&I SOLUTIONS FOR MORE ON THE SAME STORE SALES DATA For more information on this report and other industry data, contact: cdkrecreation.com/dataservices TOMMY ADY 50 100 150 200 250 300 350 5/1/15 5/22/15 6/19/15 7/24/15 8/14/15 9/11/15 10/16/15 11/6/15 12/4/15 12/31/15 1/22/16 PSB INDEX VALUE DOW JONES INDEXED S&P 500 INDEXED