Insights

Used vehicles are a focus in online marketplaces, but they’re important for new vehicles too. Are you using them to their full potential and to yours?

You have an online presence, but is it reaching as many people as possible? If you’re not using online marketplaces to their full potential, you could be missing out on sales.

In addition to maintaining your own website, or being connected to your brand’s site if applicable, high visibility on marketplaces such as AutoTrader.ca, Clutch.ca, Kijiji.ca, Auto123.com, Carpages.ca and more can give you a considerable advantage.

Are you selling on both sides of the fence?

Many people think online marketplaces are only for buying and selling used cars, but that’s not the case. Not only do these sites cover both, but cross-shopping is surprisingly common. According to marketing data firm Dig Insights, almost half of those who initially visited a marketplace to shop for used cars also considered a new vehicle; while one-third intending a new vehicle checked out the used-car offerings as well. If you have both in front of them, they may be more likely to look at what you’re offering.

The same study found that 77% of used-vehicle intenders visit online marketplaces in their search, far more than those who primarily looked at dealer websites for used models. But among new-vehicle shoppers, dealer websites and online marketplaces were almost in a dead heat, and manufacturer websites were only slightly ahead of them both.

Visiting a dealership in person is still a more popular option for new-vehicle buyers than for those looking at used, but the online numbers tell an important story. You could be missing out if you’re not putting your new vehicles in front of prospective buyers as well as your used ones.

The majority of new-vehicle intenders visited online marketplaces two to five times, far fewer than the majority of used-car buyers who visited eleven times or more. Without as many chances to grab attention from new-car buyers, you have to make your listings stand out.

Advertising your new vehicles

Some customers may be getting out of an older vehicle and haven’t thoroughly checked out a factory-fresh model in quite a while. This means they may not be aware of everything now offered on them, including items that used to be optional but are now either required equipment or included on most models.

These may be mandatory rearview cameras, Apple CarPlay and Android Auto, wireless phone chargers, larger touchscreens, adaptive cruise control, emergency front braking, and more. They may be obvious to you, but not always to your customers; and these shoppers could potentially bypass your vehicle in favour of one that’s advertised with a backup camera, for example, because they’re not aware that every new vehicle has one.

Many of the mainstream vehicles with small turbo engines run on regular-grade gasoline, but again, not everyone knows that – they might associate a turbocharger primarily with a premium sports car that needs equally-premium fuel. If the engine takes 87-octane, mention it as a money-saving advantage.

If you have various trims, then, if possible, advertise at least a midrange model. You can mention farther along in the text that you also have a lower trim and its price. But if you showcase a base trim and it’s sold by the time someone arrives to look at it, they may accuse you of “bait-and-switch” tactics – and they’ll be sure to publicize that on social media, too.

Advertising your used vehicles

Of course you’re familiar with this, but as with new vehicles, list everything your used ones have, even if they seem obvious, in case shoppers don’t know what’s automatically included. Tailor your advertising to the vehicle, such as towing and payload on a truck, or cargo capacity on an SUV.

Advertising your F&I products

On both new and used vehicles, mention your products up front. That includes financing, and especially its availability for those who might have difficulty getting a loan from a bank, such as younger buyers, new Canadians, or those without top credit scores.

Outline the warranty options, including any remaining factory coverage, and the availability of extended warranty plans for peace of mind. Also mention products such as GAP insurance or maintenance service plans.

You don’t want to clutter up your ad with all the details, but a quick run-down of their availability could get people looking more closely at your offering. Don’t assume that “everyone knows all this.” Customers who haven’t bought from a dealership before, including those younger buyers and new Canadians, may not be fully aware of everything you’re able to offer them.

Presenting your vehicles

If you don’t capture your audience’s attention almost immediately on a marketplace, you’ll be swiped to the side. Have an eye-catching photo as your main draw, and then include all the details – this is their virtual walkaround, and the more you show them, the more you’ll pique their interest.

Aim for an uncluttered background in photos, and shoot in front of your store as a landmark when they’re coming to see the vehicle in person. Try to take interior shots on a cloudy day or in light shade, so you don’t get areas washed out by sunlight.

Don’t use filters or alter the background. If shoppers figure out you’ve played with the photo, they may wonder if you’ve digitally enhanced anything on the vehicle too.

If you have to use stock photos for a new vehicle, make it very clear that they are, and that the models in your showroom may have different colours or features.

And finally, switch up your products regularly to keep your marketplace site fresh. Try to have at least a couple from each segment – trucks, compact to large SUVs, cars – on your page at each time, and then rotate your stock through it.

The bottom line

Online marketplaces originally started out primarily for private sellers, but they’ve become essential tools for dealers, and they’re equally important for new vehicles as well as for used. They reach diverse viewers, but you can draw all of them in with the vehicle’s specifications, good photos, and information about your F&I products. It’s an audience that’s eager to see what you’ve got, and it’s relatively easy to give it to them and lead to a sale.

Every dealership reaches customers through various channels, but are you omnichannel? What is it, and why should you be?

Omnichannel marketing strategy isn’t new, but it is something not all dealerships have embraced, and that could be costing them business and money. Not only does it help get customers engaged and into your store, but it can reduce some of the pain points that may prevent them from recommending you to others.

Most dealers are already working with multichannel strategies, and that’s a good start, but an omnichannel approach can move you up to a new level of customer service.

What is a multichannel strategy?

As its name implies, a multichannel strategy reaches your customers across a number of different channels. You may have your own website, links on your brand’s consumer site, social media pages, mobile apps, or marketplace ads. These are all channels where customers can interact with you.

The disadvantage to multichannel

All of these can do a great job of grabbing your customers’ attention, but each channel is treated as its own entity. Each may sit in its own data silo, separated from other your touchpoints with the customer. For example, customers may provide their personal information when they do an online build-and-price, but when they come into your store, they have to provide it all over again to the salesperson, which is frustrating.

Multichannel may also prevent departments from optimally working together. Data silos can inhibit sales, service, or parts from each looking at a customer’s complete history, preventing the symbiotic relationships of all working together for the customer’s benefit.

What is an omnichannel strategy?

Instead of separate data silos, omnichannel seamlessly “weaves” data throughout the customer experience. As customers switch between channels, their information is integrated. Someone can land on your website, make a service appointment, look at a new vehicle, or watch a video on your social media with all of their data following with them to the next channel they choose. Almost all dealerships today are multichannel, but are less likely to be omnichannel.

The advantage to omnichannel

Omnichannel creates a seamless shopping experience for the customer, which in turn makes it easier for them to move forward into new channels without the need to repeat their information to each new segment where they want to connect with you.

It also has numerous benefits for the dealership. Leads from the dealer or manufacturer websites can be seamlessly integrated into the follow-up process, and from there, transferred to the right people. When someone does a build-and-price on your site and then comes into your store, you can immediately look up the vehicle they were considering, and any trade-in or financial information they may have provided. Rather than a cold start, you’re already well into the shopping and purchasing process.

In virtually all dealerships, the sales and service departments operate their own operations independently. That’s to be expected, but in many cases, a single customer is treated as two customers – one at sales and one at service.

Information is centralized with omnichannel, including the customer’s contact and financial information, sales and service preferences, previous purchases, and even how and where they looked for you online. In the bigger picture, this can allow you to concentrate your marketing efforts, maximize the return on your advertising dollars, and better handle your customer appointments.

It also gives you the ability to centralize your inventory information, so your new and used vehicles appear in all of your online channels – and can come off across them all when something’s sold.

Omnichannel can potentially supply information to all departments. Salespeople can know a customer’s coming in for service and can fill the waiting time with what’s new in the showroom; or F&I can check a vehicle’s mileage from service records and proactively offer warranties or other products.

Your brand and marketing are the same across all channels. Consumers like consistency in the messaging they receive, along with quality of service and attention.

What it takes to make omnichannel work

Omnichannel can do some pretty impressive stuff, but it can’t do it alone. Everyone in the dealership has to be board with the information that’s being handed to them, and to seamlessly follow through on every transaction as the next step of the customer’s omnichannel experience.

Customers who reach out, across any channel, must be answered right away. That could involve using some form of AI chatbot, whether it’s to provide an immediate form of contact before a salesperson is able to answer, or outside of business hours when real people aren’t available to reply.

Whenever customers come into the brick-and-mortar store, the first person to greet them should ask if they’ve interacted with you virtually; and if they have, start from there. They’ve already moved along in their purchasing journey, and if you pick it up directly from their last step, you’ve saved time for everyone and created a more seamless experience for them.

The bottom line

Going omnichannel will likely require professional assistance, and there will be some time and money involved, but the results can be worth it. Customers already expect connected cars, and now they expect connected dealerships too. By guiding them through an interconnected car-shopping experience, you’re on the path to an interconnected purchase and beyond.

The third quarter of 2024 is now behind us, and it brought both encouraging and not-so-great news for dealers, as well as for consumers. The Bank of Canada cut its overnight rate by 25 basis points three times, the last in September that brought the rate to 4.25%, which helps to get buyers considering purchases. Some forecasters are expecting additional cuts totaling 50 basis points by the end of the year, and more again in 2025.

However, the pace of job gains slowed over three months through to the end of August, while the unemployment rate rose to 6.6%. On the brighter side, the average hourly wage for permanent employees continues to be ahead of inflation.

It appears most dealers have recovered from the CDK Global cyberattack, and the industry is working to help prevent security issues in future. But on the production side, the U.S. dock workers’ strike will undoubtedly affect parts supply to auto factories.

Looking at Canadian sales

Industry analyst DesRosiers reports that September’s sales were an estimated 157,000 vehicles, down 3.6% from September 2023. As the company said, “A month ago, we warned that it would be difficult for the market to continue its string of year-over-year gains during the final four months of 2024. Well, unfortunately we were proven correct…”

The company offers two reasons to partly explain the decline. First, September 2023 was one of the first months with improved vehicle availability, and so September 2024 was up against a “fairly strong comparable.” Secondly, September 2024 had three fewer selling days than in 2023, due to timing of the Labour Day holiday.

Still, on a year-to-date basis at the end of the 2024 third quarter, “the market is now at 1.41 million units,” DesRosiers reported, “still up a very respectable 8.1% from the first nine months of 2023.” The SAAR (seasonally adjusted annualized rate) for September 2024 was 1.78 million, “broadly in line with what we saw in July and August.”

Some standouts among automaker sales

Among automakers reporting sales, DesRosier noted some standouts in year-to-date sales to the end of September. Volkswagen led in percentage gain among higher-volume brands, up 55.8%. Subaru was up 31.7% and Mazda was up 26.0%, with both exceeding sales of 50,000 vehicles so far. On a volume basis, General Motors was leading the market with 216,000 units, up 9.7% over the same period in 2023.

Metrics at the dealer level

J.D. Power released its Canadian auto market metrics for the end of September 2024, covering a number of important factors for dealers. Over the last 12 months, 50% of new-vehicle buyers financed their purchases, while the other half split evenly between paying cash or leasing. For used vehicles, 53% financed, 45% paid cash, and 2% took a lease.

The average monthly payment on a new loan in September 2024 was approximately $870, down from the year’s peak of $910 in June 2024.

Lease payments over the last year fell as low as $740 in March 2024; went up to $800 in May; and stayed close to that before dropping to about $780 in September 2024.

That same month, 53% of new-vehicle loans were 84 months or longer, and that was the lowest percentage it had been in the past 12 months. It peaked in February and March 2024, with nearly 60% of loans that length, but has been on a slow decline since then.

Days-to-turn on new vehicles was around 55 days in September 2024, and that’s held fairly steady since March 2024. In September 2023, vehicles sat for an average of just 35 days. For used vehicles, the average in September was just over 80 days, up from about 78 days in July 2024, but down from 85 days at the beginning of the year.

New-vehicle prices in September 2024 averaged $48,000, while the average transaction price was about $45,000, and that was pretty much the case for both since June 2024. A year ago, in September 2023, the average vehicle price was just over $50,000, and the average transaction price was $47,000. In September 2024, 20% of vehicles traded in had negative equity. A year prior, only about 17% of trade-ins were underwater.

Plugging into plug-ins

Zero-emission vehicles (ZEV), which includes battery-electric (BEV) and plug-in hybrids (PHEV), rose to 65,700 units in Canada in the second quarter of 2024, according to Scotiabank’s Global Auto Report. While third-quarter results weren’t yet available, the report noted it was a 38% increase over the second quarter of 2023 and the highest quarterly ZEV sales to date.

Quebec was the major driver, with more than half of all ZEV new registrations during the period. However, the report also noted this could be a short-term surge, as the province plans to reduce the amount of its “green” rebates in 2025 and 2026, and eliminate the program entirely in 2027.

Forecasters are also watching the federal government’s plan to implement a 100% tariff on all EVs built in China, which has the potential to affect supply and affordability.

The takeaway

- There was a sales slowdown at the end of the third quarter, but it wasn’t unexpected and, so far, sales overall are on target for approximately 1.78 million vehicles in 2024.

- The Bank of Canada cut its rate to 4.25% and forecasters are anticipating more reduction by the end of the year, which should help to stimulate vehicle purchases.

- Following some upheaval at the beginning of the year, metrics such as days-to-turn, vehicle and transaction prices, and monthly payments generally stayed steady during the third quarter.

- Dealers who work with their customers to find the right financing for their budgets and their borrowing “comfort zones” should have higher success with both new and used vehicles.

It’s said that “age is just a number,” but numbers are what the car business is all about. Generations tend to differ in how they research and shop for a car, and what they expect from a dealership. Understanding them is key to reaching them when selling vehicles and products.

Of course, while their birthdates may categorize them, they’re individuals first and foremost. You will get older customers who do virtually everything online, and younger ones who want to be led through the process.

But generally, these insights and tips may better serve all your customers, no matter their age. Some may quibble over the exact dates, but these are generally how the groups are determined.

Baby Boomers: 1946-1964 (60 to 78 years old) 

Insights: Boomers remember when car shopping was visiting numerous dealerships, studying printed brochures, and – sometimes with good reason. They’ve been buying cars long enough to know things have changed, but they still appreciate a personal touch and guidance through the process.

They’re not crazy with their money, but tend to have more disposable income. Many buy what they want rather than the cheapest deal they can find, and your customer service is going to sell them on you. They grew up with fewer brands and some are loyal to what they’ve “always driven,” but many are willing to see what different nameplates have to offer. 

Tips: Don’t rush through the transaction. They’ve done this before, but they still want to know everything at each step. Don’t assume they need a specific type of vehicle; older drivers are in everything from minivans to sports cars. Determine if they’re familiar with high-tech items, rather than assume they aren’t – “Have you used a self-parking feature before?” They may be more open to extended warranties or protection features that can take the hassle out of future issues.

Make sure everyone, including the service department, knows how they want to be contacted. Many prefer phone calls or emails to text messages, and will be frustrated if that isn’t respected. Remember this: Younger buyers depend heavily on recommendations from trusted family members. Those are the people across your desk right now, and you want to make the best possible impression on them so they send those younger buyers to you. 

Generation X: 1965-1980 (44 to 59 years old)

Insights: Generation X, especially at the upper end of the scale, tends to be close to Boomers for the buying process. However, they may be helping their children or grandchildren with finances or living arrangements. As a result, even though they come into the showroom alone, they might be in the market for family vehicles.

They tend to do more online research than Boomers, and will dig deeper into it. Even so, they appreciate in-person attention throughout the process. They may not have as much disposable income as Boomers do, but they’re comfortable with credit as long as they’re getting value and reliability for what they’re financing. They can also be picky about how they’re contacted, so be sure to ask.

Tips: These customers already know about car choices and features. What might be uncertain is what fits them. They may be looking toward retirement, helping their families, wondering when to downsize, and more. Walk them through their requirements as well as their budgets.

While both Boomers and Gen Xers need to trust their dealers, Gen X tends to put it above brand loyalty. They want to move at their own place through the deal. If they don’t feel they’re considered an equal part of the equation, they’ll go elsewhere.  

Millennials: 1981-1996 (28 to 43 years old)

Insights: Millennials grew up as technology developed, and they are very active online.  They may not have the same level of financial freedom as their parents, but they’re comfortable with taking on debt. Many have young families and vehicle practicality is essential to them. Their lives are busy and even minor inconveniences are issues, so reliability is a key factor.

They’ve already researched everything about the vehicles in your store, and they’re not interested in hashing it all out again over a desk. They want to get right to the test-drive, and they want the paperwork to be fast and smooth too. If you meet their expectations, they’ll be loyal. They emphasize value, and are most likely to appreciate complimentary add-ons such winter tire storage.  

Tips: Millennials have no patience for pain points, and they’ll tell everyone online about any they experience. If something’s unavoidable, explain everything as it happens, rather than just type it silently into the screen. Let them know the issue might be with their credit rating or other factors, so they don’t think it’s something you’re doing poorly.

They’ve already been through every vehicle online and decided what they want, so give it to them. If you don’t have the exact new model, a similar used vehicle may be a better fit than another new one that’s “close enough.” Millennials have a lot of financial responsibilities and tend to hold onto their vehicles longer, so suggest protection products or scheduled maintenance plans to help retain the value.

Generation Z: 1996-2010 (Driving age to 28 years old)

Insights: Gen Z has never known a non-Internet world, and it’s the first group you’ll lose if your online appeal isn’t there. “Z” is the most likely to be influenced by online reviews and ratings. They’re not brand-loyal; their primary concern is how your dealership is perceived by others. Encourage all your satisfied customers to leave online reviews for others to see.

Many Gen Z are buying their very first vehicle. Features that appeal to older consumers, such as embedded navigation or satellite radio, are not in the picture; wireless connectivity, screen size, and tech functions are. But Gen Z may overestimate some technologies, such as thinking hands-free or highway-assist driving systems are actually autonomous systems. Make sure they understand exactly what they’re getting.

They are comfortable online and prefer doing as much of the buying process digitally as they can. They may even want a FaceTime call with a salesperson before they decide to come in.

Tips: Gen Z buyers live by online shopping, where everything is open 24/7. Your website should always offer communication, such as an AI assistant after hours, to engage them so you can follow up later. They may be into instant messaging, but they don’t want to be rushed through the process. It’s important for them to understand everything they’re being asked to sign, and they’ll leave if they don’t think everything is fair.

As we look back at the second quarter of 2024, a lot has been going on. The Bank of Canada reduced its rate to 4.75% from 5% in June, and with further cuts expected. That did get some customers to loosen their purse strings, but outside forces managed to put a bit of a damper on sales.

According to DesRosiers, the Canadian new-vehicle market had enjoyed 19 consecutive months of year-over-year increases coming into the end of the second quarter. Canadians bought 169,000 vehicles in May 2024, marking a 9,000-unit increase from May 2023.

But then June stayed virtually the same at 169,000, and while that’s upbeat considering we’re still overcoming the last of the pandemic issues, no one wants to see the market lose its momentum.

Much of that appears tied to one of the biggest stories in the industry: the cyberattacks on dealer software provider CDK Global, which crippled some 15,000 stores in Canada and the U.S.

Canadian Black Book reported a decline in wholesale vehicle prices in early June, with truck prices falling by 37% more than car segments. Demand for auction inventory increased both in Canada and the U.S., especially since many vehicles were selling through other channels before they reached the auction block. Even though used-vehicle prices are expected to fall a bit more throughout the rest of the year, they are still above pre-pandemic levels, and are expected to remain that way possibly into 2026.

Sales trends and prices

Depending on the source, forecasts for 2024 new-vehicle sales are between 1.77 and 1.9 million units. Sales were 1.7 million in 2023, the highest in four years although still 7% lower than the pre-pandemic average.

Among automakers reporting numbers, General Motors led by volume during the first six months of 2024, with almost 141,000 new vehicles sold. Volkswagen had the sharpest gain year-to-date, up 53.9% on sales of more than 40,000 units; while Subaru was next at 43.4% increase on sales of some 36,000 vehicles.

The average new vehicle price is around $66,400. That’s about a 7% increase from last year, and likely includes the fact that premium SUVs have become a hot category for shoppers and could reach their highest levels in years.

As mentioned, used-vehicle retail prices have softened, and in mid-June 2024 the average listing price was $33,900, according to Canadian Black Book. Full-size pickups and full-size SUV prices took a considerable hit during June, while subcompact crossovers/SUVs were among those retaining most of their value. Compact commercial van prices rose – vehicles like the Ford Transit Connect and Mercedes-Benz Metris – possibly because all have been discontinued and businesses may be “stocking up” on them.

What’s driving the Canadian market?

While the Bank of Canada rate cut wasn’t huge, it was enough to prompt buyers who were ready to strike as soon as the cost of lending went down. According to AutoTrader, lower interest rates and increased availability had many shoppers switching to buying new cars rather than used. An increasing number of trade-ins increased the supply of used vehicles and subsequently lowered their prices overall.

Who is buying, and what are they choosing?

New Canadians are a robust source of sales, and many dealers reach out proactively to them. An estimated 32% purchase a vehicle within the first month of their arrival.

Among age groups, slightly more than half of millennials (ages 25-34) are less likely to purchase a vehicle, due to a combination of borrowing costs plus their overall cost of living. When they do, then along with the younger Gen Z, vehicle technology and connectivity are important considerations, as is the way they purchase them. Virtually all age groups use online research to some degree, but younger shoppers are far more dependent on it and prefer to do as much as possible online, including their financing.

Ford’s F-150 remains the best-selling model in Canada, but some six out of every ten vehicles sold is an SUV, which is slightly higher than pickups. Quebec had the highest number of zero emission vehicle (ZEV) registrations in the first quarter of 2024, with a slight decline in battery electric vehicles (BEVs) but a rise in plug-in hybrids (PHEVs). As more automakers offer new vehicles with plugs, and with 80% of Canadians living in urban areas, ZEV registrations are still a small slice of the market but are expected to increase.

The Takeaway

• Lower interest rates, increased vehicle inventory, incentives, and some remaining pent-up demand are helping to move the Canadian vehicle market forward.
• Prices for new vehicles are generally higher than last year. Those for used vehicles have softened but are still above pre-pandemic levels and should stay there for at least one or two more years. As new-vehicle prices rise, the used market becomes more attractive to many buyers.
• The CDK cyberattack weakened sales at the end of the second quarter, but they should rebound in the third quarter.
• Dealers who prioritize online research and shopping, and who reach out proactively to new Canadians, should enjoy a higher level of success with both new and used vehicles.

It may have originally been just a fictional story line in the Terminator movies, but artificial intelligence (IA) is now a reality. And it’s no longer an “if” your dealership should adopt it, but “when.” The key is to know how to use it to your advantage; its limitations and how to work around them; and most importantly, when you shouldn’t be using it.

There are numerous software providers with a wide array of products, including chatbots, analytics, digital dashboards, inventory integration, mobile apps, and more, whether for a single store or across multiple dealerships. Look for one that will customize the package to your specific needs.

Chatbots can be a useful addition to your website. When a customer visits, the chatbot may be embedded in the body of the site, or appear as a pop-up, with an invitation to connect such as, “How can I help you today?”

There are different types of chatbots to consider if you plan to add one, or upgrade what you have:

Rule-based chatbots are programmed to look for and recognize keywords. When they do, they generate a response likely to be the most appropriate. For example, if a customer types in something like “What are your hours?” or “When do you open?” then the chatbot will pick up on the “hours” and “open” keywords, and respond with a predetermined response – in this case, when you’re open and closed. They tend to be the least expensive, but they’re limited to the words and responses they know. If your customers use the chatbot for complex questions, they may be frustrated by its inability to respond correctly.

AI-powered chatbots use natural language processing and machine learning. Rather than just pouncing on keywords, they determine what the person is asking, and then come up with the best response to match the question.

Generative AI chatbots, such as ChatGPT, in simplest terms, use their database to look for words and patterns to understand what’s being asked, and then formulate a reply. These doesn’t use predetermined responses and so are closest to how a real person would answer. The questions and responses further train the system for improvement.

Customers increasingly want to be able to shop or research 24/7, and a major benefit to chatbots is that they’ll provide some level of communication when your dealership is closed. You also don’t have to tie up an employee to monitor questions for live chats. The chatbots can’t do it all, though, and you still need to communicate directly with customers as necessary. Chatbots don’t have all the answers, and they don’t have the human touch that can be essential to a sale.

Telephone chatbots work similarly, asking questions and responding to the answers. These can also be useful, but tread carefully: You don’t often find people who say they love automated phone attendants, and being asked what you want rather than being told “Press 1 for this” doesn’t really make it better.

Help with writing. As much as people are now more dependent on quick texts, there’s still a need for longer written communication, whether it’s to answer emails, write performance reviews, and more. Programs such as ChatGPT can definitely help with this, as you enter the points you want the piece to cover and let AI write it up for you. It’s almost instantaneous, but never send it out without carefully proofreading everything. AI is sophisticated, but it’s not perfect; it’s not unusual to find factual errors, or sentences that go in another direction away from what you intended.

Advertising can use AI help, but only to a certain extent. You can use it to help write advertisements for vehicles or products, but never run a photo through AI to enhance it. Customers have to trust that what they see in your ad is what they’ll get at your store, and you’ll lose your credibility if customers detect that a vehicle’s picture has been “doctored.” You should even be cautious about digitally cleaning up backgrounds, since customers may wonder if that’s the only thing you’ve altered.

Number-crunching. AI has the potential to analyze data and give you an immediate answer on what’s happening, and across wide swaths of your business. Some of the possibilities include:

Inventory analysis. AI can show you such information as which vehicles sit longest on your lot; what configurations and trim levels are most in demand; and what vehicles and trims are being searched out by customers on your website.

Product sales analysis. In addition to determining which F&I products rack up the highest number of sales, AI can cross-reference them against other factors, such as which aftermarket items are most likely to be bundled into specific financing products, or which vehicles generate the highest warranty sales. Product sales can even be sliced as thin as the customers’ age, income, or trade-in, enabling you to better target your approach to them.

Overall, artificial intelligence can improve customer satisfaction, make tasks easier, and help run your dealership more efficiently. The key is to getting the best AI products for your needs, and then using them to their maximum potential.

Auto theft is a huge issue in Canada right now, and for dealerships as well as consumers. The “old days” of trusting everyone are over.

Vehicle theft is a big part of it, but you also have to protect yourself and your customers from identity theft, fake identification, and falsified records. Here are some suggestions on how to do that.

Protect yourself from vehicle theft
Auto theft is usually a crime of opportunity. Your goal is to make it as inconvenient as possible to make off with a vehicle.

• Sales and service key boxes shouldn’t be visible to the public, and should be checked daily to ensure all keys are there. Store second-set keys separately. Watch for “customers” who seem interested in where you keep your keys. At closing, lock the key box and the door to the room where it’s kept. A coding system is more secure than putting the vehicle information on the key tag.
• Consider an electronic key system. Depending on the system, these can register when a key went out and who has it; limit accessibility; and even track keys by GPS.
• Never leave a vehicle with the key in it, even if it’s in the service drive-through. When you bring a vehicle to the door for delivery or after a service visit, shut it off and hold the key. Thieves have been known to jump into a running vehicle in those few seconds between when you get out and the customer gets in.
• Ideally, the after-hours drop box should have a chute that sends keys inside the building. If that’s not possible, it should have a baffle so keys can’t be fished out of it.
• Put premium vehicles at the back of the lot with not-quite-as-enticing models parked in front. At night, block the gate with an inexpensive used car.
• On test-drives, ask for a second (or even third) piece of ID along with the driver’s licence, and photocopy the front and back of all. Watch for fakes, especially with out-of-province licences. Most provincial alcohol/gaming sites have information on how to spot a fake. Print out and distribute their guidelines to staff for quick access. When a customer returns from a test-drive, immediately use the key to ensure it wasn’t switched for another one.
• Thieves watch for routines, so switch up regularly. Don’t send someone to the bank at the same time each day; vary which doors you unlock or lock first.
• If you suspect someone and they leave, call any neighbouring dealers with a heads-up. You can create a “neighbourhood watch” where everyone works together.

Protect your dealership from fraud

• Be wary if someone frequently checks notes when filling out any forms. Most people have to double-check some items, of course, but watch for those who look like they’re working from a “cheat sheet.” Compare application forms for consistency in spelling and numbers.
• Look for information about new scams by using Google, the Competition Bureau of Canada, and your insurance or credit providers. Keep your staff up-to-date on scam detection.
• Authenticate all information given, including matching a trade-in’s ownership against the customer’s data before adding it to the deal.
• “Synthetic” identity fraud is where people create identities and credit scores using a combination of real and false information. Warning flags on a credit report can include numerous credit inquiries in a short period; credit history out of sync with the person’s age; or inconsistencies between the report and the information the person gives you. Work with your credit providers on best practices to avoid fraud.
• As much as you’d like to think otherwise, your employees could be part of the problem. It used to be just parts or supplies going home with them. Today, it can include stealing customer data; “straw purchases” when they manipulate information to get a loan on someone’s behalf; or stealing credit card numbers or chargebacks. Do a thorough background check when hiring, and immediately investigate any accounting discrepancies or irregularities.

Protect your customers from theft

• Consider offering aftermarket protection devices, either during purchase or at follow-up visits or the service counter. These can include tracking devices, Faraday key pouches, steering wheel or pedal locks, wheel chock locks, or battery disconnectors.
• Protect your customers’ personal information as closely as your own. Never leave files lying around; keep filing cabinets locked; and lock all offices at night. Equip all computers with privacy screens, and shut off the monitor if you have to leave your office. Use a paper shredder, or if you use a shredding company, ask for a locked bin for documents waiting to be shredded.
• Don’t talk to your customers on speakerphone. Keep their half of the conversation private, and make sure your voice isn’t carrying through the store for others to hear.
• Use proven data security measures on your computer systems, including on your credit/debit machines; set the computer system so everyone must frequently change their passwords; and avoid using emails for sensitive information, such as credit card numbers.

All of this is a lot of work and usually involves spending money, but these days, it isn’t “if” your dealership will be targeted but “when.” And overall, it’s easier to prevent crime than to deal with it after it happens.

Everybody gets angry on occasion – it’s just part of being human. For most people it’s relatively fleeting, but for some, long or frequent outbreaks are a fact of life. If it’s an issue for someone in your dealership, it can affect relationships with other employees and with customers. It can also be difficult to deal with it, and you may need to tread carefully to address the problem.

Look for warning signs. Some are obvious, such as screamers or people who throw things. Others are harder to identify. When anger bubbles up, it could manifest in passive-aggressive behaviour; sabotaging the work of others, or the dealership’s operations or reputation; gossiping or spreading rumours; excessive absenteeism or inattention; directly bullying others; or obsessive and dangerous behaviours such as road rage.

Pay attention when you know people have stressful conditions outside of work, too. Those going through situations such as divorces, or issues with their children or aging parents, may be more likely to fly off the handle when something goes wrong at work. Someone who’s putting in longer hours or desperately trying to close deals could have money issues, and that can also create a strain that worsens when anything minor goes wrong.

You have a responsibility to other employees. Any situation can have the potential to go sideways, but fortunately, very few workplace anger incidents turn bad enough to end up on the six o’clock news. Even so, no one should have to tolerate scenes or harassment in their workplace. You need to step in when there’s an outburst, even if it’s someone who rarely loses their cool. Try to get them away from everyone – “C’mon, let’s go get a coffee and talk about this.”

It’s very important to recognize that responsibility and to work towards a solution. If something does go wrong, or the situation is allowed to stay simmering, your dealership might be legally liable for knowingly permitting a toxic workplace environment to flourish.

Watch for patterns and office dynamics. Some get mad at things ¬– a glitchy phone, for example – while others get mad at people. There can be underlying anger issues in both cases, but if it’s people-on-people, look for outside factors. The problem might not be with the person who’s outwardly angry, but the one who’s constantly goading them into misbehaviour. Be on the lookout for bullying, power plays, and anything else with the potential to flare up.

Be cautious about how you handle the issue. If someone is truly disruptive, you may consider requiring them to take anger management courses; or if the situation is bad enough, terminating their employment. The problem for you is that they may be legally protected from this, including by regulations that cover hiring and firing practices; or that recognize medical or mental health conditions that can trigger this behaviour; or that determine the inability to control outbursts is a disability.

Discuss the issue with the HR department, if you have one; or reach out to governing bodies in your jurisdiction for labour relations, or health and safety. Be sure to document any outbursts, so you have a record of the person’s behaviour. The last thing you need, in addition to the anger issues, is a lawsuit for wrongful dismissal. There may even be the potential for repercussions if you label that person as disruptive or otherwise determine “what’s wrong with them,” either directly to the person or to other employees or customers. You have to be very careful in these situations.

Involve the entire dealership. While you might not be able to single out someone for anger management courses, you could consider bringing in a life coach or other professional to make presentations to everyone. It’s a commitment in time and expense, but it could ultimately be beneficial to everyone, especially if it touches on life skills beyond just anger management, such as relationships with customers and coworkers, or balancing work and home life. This can even ultimately improve people’s health, since intense anger issues may contribute to problems such as high blood pressure and heart attacks.

Are you watching for your own issues? Studies have shown that many people who have anger management issues don’t actually realize that they do. This can be especially true if that anger manifests itself in quieter ways, such as passive-aggressive behaviour or sabotage instead of more-visible reactions such as yelling or throwing things. Are issues quicker to upset you, are people getting on your nerves, do you find yourself overreacting to relatively minor problems? This is the time to sit down, take a deep breath, and consider your behaviour. Everyone gets angry, but if it’s happening too frequently, it’s time to take a closer look and work towards finding a solution.

It’s safe to say that few people like employee performance reviews. Managers seldom like writing them up, and they can be extremely stressful for employees. Some companies have eliminated them, but that’s not necessarily a great idea. They can be helpful for your employees, and just as importantly, they can be a two-way street with the potential to help you improve your business.

If you’re not already doing these reviews, you should consider it. Everyone knows you’re already looking at their sales numbers, and how they shape up as employees overall. A performance review is up front about all that, and gives them a chance to present their side of the story on any negative points, and provide input on anything the store could improve. What should you know to make the most out of performance reviews?

They shouldn’t be a substitute for regular communication. You should always have an eye on the dealership’s “thermometer,” seeing what’s running hot or cold. Periodic one-on-one meetings, even just to have a conversation, can alert you to issues before they escalate. Employees should know that they can talk to you any time they need, without having to wait for their official reviews. The frequency of your performance reviews can vary, but twice-yearly or quarterly may provide better results than an annual review.

Numbers aren’t always everything. Someone who closes a lot of deals needs to be recognized for it – and along with the pay cheque and any bonuses, a “thank you” or “great job” goes a surprisingly long way.

Everyone wants a dealership full of top-grossing performers, but always look at the big picture. You may have salespeople whose numbers aren’t quite at the top, but they score high in customer satisfaction – taking their time with customers, following up with them, helping with their vehicle’s service, and so on. If they’re bringing up your CSI and getting new customers into your store, they’re very valuable as well.

Frame criticism properly. No one likes to be told they’re doing something wrong, but doing it properly can lead to a positive outcome.

• Be specific with any complaints. Rather than, “Customers don’t like the way you talk to them,” cite examples, such as, “We noticed you were a little snarky over a customer’s trade-in.”
• Don’t present hearsay about them. No one should be told, “I’ve heard that some people don’t like the way you do this.” If you are hearing gossip about someone, talk to those employees directly to get the full story.
• Recognize where the problem initiated. Did you provide the right training from the start? Do all your employees know what’s expected of them? You may even have to go up the chain – are your managers properly trained in how to teach new employees the ropes?

Be prepared to accept criticism. A one-way review isn’t using the interview to its full potential. Don’t just analyze the employee’s performance; ask that person to analyze the dealership’s performance. You might not like what you hear, but it could be useful to improving the dealership. “I didn’t think that was an issue, but it sounds like it’s not the best way for us to do things. How do you think we can make it better?”

Is each employee in the right position? A dealership obviously doesn’t offer as much opportunity for advancement as a large corporation does, but use the review discussion to see how each person fits into the position they occupy. When you do, don’t automatically think “up.” Some people may be racking up sales and profit numbers, but it’s extremely stressful for them to do that. This might be someone who would like to step back a bit into a lower-key role, but doesn’t know how to ask for it.

Finish up with a forward plan. You know how your employee has performed in the past – that’s all in the review. Where are you both going from here? You should have already had a plan outline ready, but be flexible. Make changes as needed, depending on what the two of you have discussed during the review. That can include the part you need to play in that plan, such as providing additional training, or handling any issues with other people in the dealership.

Follow up again one-on-one within a month or so, to find out if that person thought of something later that should have been brought up, and if any issues that concerned either of you have been resolved. A performance review is more than just how someone has performed. If it’s done right, it’s a chance for both of you to learn, to grow, and ultimately, to improve the dealership’s performance to everyone’s benefit.