“Over the course of 2011 we made significant progress in increasing the number of transactions processed by DealerTrack and average transaction revenue per car sold. This progress was further impacted by healthy auto credit and car sales trends throughout the year,” said Mark F. O’Neil, chairman and CEO of DealerTrack. “Our subscription business continues to grow, and we believe we have considerable opportunities to expand our average monthly subscription spend per dealer.”

Revenue for 2012 is expected to be between $365 million and $372 million, representing approximately 13-15 percent growth on a pro forma basis after adjusting 2011 revenue to reflect the dispositions of Chrome and ALG, according to DealerTrack. “In our view, we are entering 2012 in a very strong position to continue to grow revenue at a multiple of auto industry growth, and to improve profitability margins while continuing to invest in long-term growth opportunities,” O’Neil said.

As sales rise so does optimism and the optimistic atmosphere evident throughout the halls of NADA 2012 was a welcome change from the more downtrodden mood of the recent past. This wave of positive momentum is evident in the releases and announcements made at NADA for new products, new appointments, mergers, and the growth of mobile and technological solutions. By all accounts the positives far outweighed the negatives at NADA 2012.

Innovation at Its Best

Allstate Insurance Co. and Allstate Dealer Services will have the opportunity to open full-service Allstate agencies inside dealerships. Implementation will bring the insurance agency office to inside the dealership, typically on the showroom floor and operating during the dealership’s hours of business. A licensed insurance professional and a team of support staff employed by the agency owner will be available to assist customers.

According to the company, Allstate and Allstate Dealer Services have tested and modified the program over the last two years, combining the Allstate Exclusive Agency, Good Hands Network Repair Facility and Allstate Dealer Service products with dealer F&I offerings. In addition, they have the ability to integrate Allstate Benefits into the dealer’s employee benefits platform.

Key Appointments

American Auto Guardian Inc.(AAGI), in a recent press release, announced the promotions of Kristen Gruber and Andrew Wilson. Gruber was named vice president of product development. Gruber is a CPCU with more than 20 years of product management and underwriting experience. She joined AAGI in 2007 and has been responsible for the creation of new products and coordinating the related distribution.

Andrew Wilson has been promoted to the sales team as Eastern regional vice president. With 20 years of experience in the automotive industry, Wilson’s career also includes the recruitment, development and leadership of an OEM direct sales force. He joined the AAGI team in January 2012.

In another recent release, Resource Automotive Inc., a unit of The Warranty Group, Inc., announced Steve Barrett has joined the company as executive vice president. He will be responsible for automotive reinsurance. Barrett joined Resource in 1980 as an F&I specialist before moving through the ranks to become the company’s senior vice president reinsurance.

Merger

Allegiance Administrators LLC has been formed as a result of a merger between Dimension Service Corp. (DSC) and National Administrative Service Co. (NASC). The recent announcement is anticipated to provide top-level products and more efficient operations to customers and offer a diverse and flexible portfolio of products.

Mobile Technology

This segment is exploding with faster, better, more interactive apps for those devices we all can’t live without. Here is a quick rundown of a handful of the mobile solutions being promoted at NADA.

An app for the dealer side is DealerTrack’s DealerTrack Mobile. This app utilize the iPhone and/or iPad to create an interactive experience between the dealership and the customer that enhances sales and shortens transaction time. Dealers using this app would have access to the status of credit applications and contracts, credit bureau scores, Red Flags reviews and would be able to perform OFAC checks.

For those still using the Blackberry, RouteOne has made available a free BlackBerry App that can be downloaded from their site. According to RouteOne, dealers using this new app will be able to view and manage deals and leads, access a condensed version of the Deal Manager, Deal Summary and Lead Manager solutions and request and view credit scores instantly.

On the consumer side, Dominion Dealer Solutions introduced the Be Back app and DMEautomotive introduced Driver Connect. Both of these applications are oriented to keep customer loyalty high with features such as 24/7 mobile access to dealership information, appointment scheduling, service history, vehicle recall notifications and maintenance reminders.

For the dealer, the Be Back app enables dealers to monitor and act on a customer’s ability to evaluate his vehicle’s equity, schedule service appointments and shop for new and used inventory. An equity alert shows the consumer the value of his trade-in and alerts the dealer to the consumer’s interest in its equity. The app also enables users to search consolidated, up-to-date, new and used inventory across all a dealer group’s stores with detailed vehicle info and photos.

Driver Connect enables dealers to send targeted customer communications and also integrates the DMS and DMEautomotive Loyalty Program so users can manage and redeem their loyalty points, according to the company. Additional app tools of Driver Connect include Find My Car, Find Local Parking, My Parking Meter, Gas Station Locator and more.

Hardware Upgrade

Reynolds and Reynolds presented the refreshed docuPAD. This interactive F&I selling tool and document processing system, with a screen that is 50 percent larger than before, now sits on top of the F&I desk rather than being flush-mounted into an F&I producers work station. The latest software enhancements to docuPAD include direct integration with the Reynolds ERA and POWER dealership management systems (DMS), thereby eliminating the need for dealers to re-key deal data in the DMS, according to the company.

Distractions

This brief overview would be remiss if it didn’t address a couple distractions within the industry. One quickly became known as the “Taj Mahal” affect. According to a study by Glenn Mercer issued at a press briefing during NADA, dealers are not convinced that the upgrades expected of them to their facilities will result in increased ROI.

Mercer explained, “These programs — intended to encourage dealers to invest in store expansion, modernization and standardization — can place significant financial burdens on dealers, yet there is little hard evidence on the return of investment this spending might yield.”

Jason Stein of Automotive News writes, “In better times, margins — rather than just survival tactics — are on everyone’s mind, which means factory-mandated dealership improvements are a touchy subject…”

Another major distraction, the controversy of TrueCar. This storm continues to brew. Mike Colias for Automotive News shared in his presentation that CEO Earl Hesterberg of Group 1 Automotive, Inc. believes TrueCar.com is harmful to dealers and automakers and questions the online shopping site’s value to the industry.

Several states are probing into whether TrueCar’s business model of guaranteeing online shoppers big discounts from participating dealers violates state franchise laws. Damage to the dealer’s pricing and margins along with the concerns over the security of the data, which TrueCar has access to from the dealer’s computer systems, appear to be the main areas of concern.
As a result of feedback from dealers, TrueCar has stated that they are working on changes to its business model, moving some dealers to a subscription-based rate not related to sales volume.
Looks like 2012 has the making of another interesting year for the automotive industry!

The app enables dealers to check the status of credit applications and contracts, including contracts-in-transit and funded agreements, according to DealerTrack. Dealers also can view credit bureau scores, conduct Red Flags reviews, perform OFAC checks right from the app.

“From the showroom and the F&I office to the general manager’s office and service department, we feel mobile technology is going to be an integral part of a dealer’s workflow, helping drive efficiency and improve the overall automotive retail experience,” said Raj Sundaram, senior vice president, DealerTrack. “With this latest mobile app from DealerTrack, dealers will be able to make more informed decisions and better manage their businesses.”

This builds upon the relationship established in early 2011 when DealerTrack’s Aftermarket network was chosen as the technology platform supporting the sales of Mercedes-Benz Financial Services’ exclusive line of vehicle protection products sold by Mercedes-Benz dealers.

The DealerTrack credit application network allows dealers to electronically submit credit application data to the industry’s most diverse network of banks, independent finance companies, captives, and credit unions.

The DealerTrack credit application network, which has grown from five lenders in 2001 to more than 1,100 lenders today, continues to expand and remains the automotive retail market’s largest finance network.

“DealerTrack is positioned to support Mercedes-Benz Financial Services’ leadership role as the primary lender of choice for Mercedes-Benz dealers across the United States,” said Dietmar Exler, vice president, Mercedes-Benz Financial Services.

“Mercedes-Benz dealers will now experience a more efficient and integrated F&I workflow that leverages our aftermarket and industry-leading credit application networks, all while connecting with their captive lender,” said Robert Granados, vice president and general manager, Sales and F&I Solutions, DealerTrack.

“This partnership shows how the DealerTrack network and solutions can be an integral part of a total end-to-end workflow for dealers nationwide.”

In addition to its credit application and aftermarket networks, DealerTrack will be demonstrating its new mobile apps for its credit application network and for vehicle inventory management and merchandising, as well as its DMS offering and popular Compliance solution, in the DealerTrack Booth at the upcoming NADA Convention and Expo, in Las Vegas, February 4th — 6th, 2012.

The DealerTrack credit application network allows dealers to electronically submit credit application data to the industry’s most diverse network of banks, independent finance companies, captives, and credit unions.

The DealerTrack credit application network, which has grown from five lenders in 2001 to more than 1,111 lenders today, continues to expand.

“With the overall improvement in the automotive retail industry, the DealerTrack credit application network continues to be the biggest credit network for dealers and lenders,” said Mark O’Neil, chairman and chief executive officer, DealerTrack.

“The number of lenders that continue to join our credit application network is a bright spot for the automotive retail industry and the economy in general.”

As part of this milestone achievement, DealerTrack will be running a promotion for all dealers in the United States, in which dealers can win $1,111.

For the promotion, DealerTrack will be asking dealers to refer lenders who aren’t already electronically connected to the DealerTrack network. If the referred lender electronically connects to the DealerTrack network before December 31, 2011, the dealer has a chance to win $1,111 cash prizes.

The enhancements, which were launched on July 20, are available to all dealerships on the DealerTrack credit application network at no charge.

The Dodd-Frank Act further extends the necessary credit score disclosure information required in Adverse Action Notices. Under the Dodd-Frank Act, businesses that use credit scores to make a credit decision must provide the credit score used, the primary reasons affecting the score, and the range of possible credit scores for the model used, among other information, within the Adverse Action Notices.

With the new functionality, any dealership using the DealerTrack credit application network will be able to generate Adverse Action Notices with the required disclosure information.

In addition, dealerships subscribed to the DealerTrack Compliance Solution will be able to continue to securely and electronically store all Adverse Action Notices generated through DealerTrack and monitor activity on the one-of-a-kind compliance dashboard.

This premium functionality is especially useful in helping dealers not only maintain compliance within their dealership, but in helping them prove it in the event of an FTC or Attorney General audit.

According to Robert Granados, vice president and general manager, Finance Solutions, DealerTrack, “We continue to engage dealers from across the country and stay abreast of updates to federal and state regulatory requirements. It is our goal to continue to deliver industry-leading tools and powerful reporting capabilities to help dealers comply with these regulations.”

The DealerTrack Compliance solution helps protect a dealership throughout the sales and F&I process, including credit reports, credit application submissions, menu presentations, and document storage and retrieval, as well as compliance with the Red Flags Rule, the Risk-Based Pricing Rule and Dodd-Frank Act requirements.

The DealerTrack solution allows dealers to work all deals on one fully integrated and secure platform to streamline the process and protect their dealership and its customers.

The new Red Flags Guarantee from DealerTrack will cover associated government-issued fines up to $25,000, should a dealership be cited for non-compliance with the Red Flags Rule while using the DealerTrack Compliance Solution.

“With auto identity theft on the rise, a new era of regulatory requirements has emerged, and DealerTrack has dealers covered when it comes to compliance,” said Robert Granados, vice president and general manager, Finance Solutions, DealerTrack.

“Backed by our extensive experience navigating the compliance and regulatory landscape and years of safeguarding dealers from identity theft, we can confidently offer this guarantee. No other company delivers the breadth of compliance safeguards coupled with such a guarantee.”

The DealerTrack Compliance Solution helps protect a dealership throughout the sales and F&I process, including credit reports and Red Flags, credit application submissions, menu presentations, and document storage and retrieval.

The solution allows dealers to work all deals on one fully integrated and secure platform to streamline the process and protect their dealership and its customers.

The Red Flags Rule, which is enforced by the Federal Trade Commission (FTC), requires businesses and organizations to adopt and implement an Identity Theft Prevention Program. The program should be designed to detect, prevent and mitigate identity theft when establishing or maintaining consumer credit and certain business accounts.

The potential liability dealers could face from not complying with the rule includes, but is not limited to, $3,500 per violation under the Fair and Accurate Credit Transactions Act of 2003, up to $16,000 in penalties under the FTC Act, and potential lawsuits from the FTC and State Attorney Generals.

This membership, valued at $3,500, will enable DealerTrack to offer valuable AFIP products and services to their clients at a rate significantly lower than retail. In addition to its other offerings, DealerTrack clients will have access to the popular AFIP Certification Program courses, allowing them to certify their F&I personnel in the federal and state regulations that apply to auto finance and leasing to defend against expensive fines and lawsuits or damaging media exposés.

Additionally, because AFIP Certified F&I Professionals sign AFIP’s industry-derived code of ethics, DealerTrack dealers can be confident that their personnel can be held personally accountable for their dealings with customers.

Upon awarding the prize, AFIP Executive Director David Robertson noted, “DealerTrack has a great reputation and we’re excited to find out how we can help them give their dealers one of the most valuable training programs in the auto industry.”

The DealerTrack credit application network allows dealers to electronically submit credit application data to the industry’s largest and most diverse network of banks, independent finance companies, captive finance companies, credit unions and regional banks. The DealerTrack credit application network has grown from five lenders in 2001 to 1,000 lenders today.

“The DealerTrack credit application network has been the foundation upon which we have built DealerTrack. We continue to draw strength from our success in this area as we grow into the only truly open and integrated, end-to-end solution provider for the automotive retailing industry,” said Mark O’Neil, chairman and chief executive officer, DealerTrack Holdings, Inc.

“As the nation’s economic recovery continues, we are seeing more and more lenders of all types join our credit network, and become active in the indirect auto finance market. We believe that the addition of new lenders to our network is an extremely positive sign for dealers, giving them confidence that a broader range of competitive financial resources are available to help them sell more cars.”

The credit application network is one component in the DealerTrack Performance Suite of solutions. The integrated DealerTrack Performance Suite is the industry’s most complete offering of high-value automotive management solutions and services for dealers, including Dealer Management Systems (DMS), Inventory Management, Sales, F&I, Compliance, and Processing Solutions and Services.

The integration, approved via DealerTrack’s OpenTrack Certification program, allows for seamless and secure connectivity between the AEROS CRM application and the DealerTrack DMS. The certified integration ensures the integrity of the customer, vehicle, F&I, general ledger, service and parts data exchanged between the two companies’ systems, reported F&I and Showroom.

“As DealerTrack continues to forge its leadership as a diverse technology solutions company for the automotive industry, it’s important that our dealers recognize e-autobusiness and its solutions as certified by DealerTrack to meet the customer relationship management needs of today’s auto retailers,” said Christian Thornton, managing director of e-autobusiness.

“DealerTrack is committed to supporting technology needs through our OpenTrack Program, which enables secure, real-time integration between systems running in a dealership and DealerTrack solutions,” said Allan Stejskal, vice president and general manager of DealerTrack DMS. “Working closely with OpenTrack-certified partners, such as e-autobusiness, we can deliver an effective, easy and affordable integration platform that allows our mutual dealer customers to use the solutions that best fit their needs and businesses.”

The addition of a certified integration with the DealerTrack DMS now ensures that AEROS seamlessly integrates with all major DMS systems in use by automotive retailers.

e-autobusiness’ AEROS CRM Software Suite, is a modular application that lets dealers build the level of sophistication in their CRM that best fits their business needs and budget. Dealers can add components as needed, over time. Certified by 15 manufacturers, the AEROS Software Suite helps dealers experience bottom-line results in sales, service, F&I, special finance, and parts, while providing web-based CRM, internet lead management, BDC control, lease and finance desking, and new media customer marketing.