You know those cars you have on your lot that aren’t the same brand of vehicles that you sell at your franchise, and you have no way to certify them to ensure top dollar when they’re sold? Well, we have the solution for you that will both drive more traffic and increase your used car net profits. On today’s show, we’re joined by Tim Roberts, dealer principal of Champion Chevrolet in Indiana, and Larry Dorfman, founder, and chairman of EasyCare and MotorTrend Certified Preowned.
Jim Fitzpatrick: Welcome to the show gentlemen.
Tim Roberts: It’s good to be here, Jim.
Jim Fitzpatrick: Yeah.
Larry Dorfman: Great to be here. Thank you.
Jim Fitzpatrick: Let’s kind of jump right in here. You decided that we may be losing some profit and some opportunities to sell used cars that we can’t certify, so lo and behold, you come across Mr. Dorfman here and say, “Hey, you got a great certified program that might help us with used cars.” Talk to us about that.
Tim Roberts: Yeah, absolutely Jim. You know, we’re making a transition over with our financial provider and we were blessed enough to come across EasyCare and Mr. Dorfman’s products, and along with those products, there was an opportunity to become a MotorTrend Certified dealer in the state of Indiana.
Jim Fitzpatrick: Okay.
Tim Roberts: We really didn’t know too much about it at the time, starting off with EasyCare. We knew the branding behind MotorTrend. We knew it carried a substantial name behind it.
Jim Fitzpatrick: Yeah, that’s for sure. What a brand.
Tim Roberts: The MotorTrend process came in, EasyCare came in, implemented into the store. They didn’t tell us what to do. They actually designed it and developed it around our store, the vehicles that we have. We follow their criteria, their supplemental checklist that we go through to become a MotorTrend Certified Vehicle, and it’s really changed our attitude, our process, and the culture within our store on how we buy vehicles, how we trade for vehicles, how we recon our vehicles. It’s really increased the profitability. We’ve been on the program for a little over 90 days now, and coming back in and revisiting with you, I’m happy to say that we’re up 30% in our product penetration.
Jim Fitzpatrick: Wow. That’s a pretty strong impact in just the first 90 days.
Tim Roberts: Yeah, absolutely. Our profitability has gone up 40% because of the MotorTrend recognition and the brand. There’s a lot of value behind MotorTrend, and it’s educating the consumer on the difference between a regular certified pre-owned vehicle and a vehicle that carries the backing of MotorTrend.
Jim Fitzpatrick: Yeah, for sure. Larry, what was the motivation behind this? I mean, I know you’ve been doing it now for quite some time, and obviously, you saw an opening in the marketplace that just wasn’t being filled. Talk to us about that.
Larry Dorfman: It’s really interesting, because MotorTrend conceived the thought process about eight or nine years ago, and their thought was, “We are such an influencer in the new car market, why are we not an influencer in the used car market?”
Jim Fitzpatrick: Right.
Larry Dorfman: They went out and checked, according to them, almost a dozen different administrators. They want to find somebody to partner with. It is their program. We just have the good fortune of getting to run it and manage it for them. We help put the pieces, with pieces we already had. We’ve created new pieces. So their thought process was, you know, MotorTrend car, truck, SUV of the year. Using that 65, now 70-year-old plus brand to help dealers.
Jim Fitzpatrick: It’s an incredible brand. It’s a household name in automotive.
Larry Dorfman: No question. I think it’s 92% recognized by consumers.
Jim Fitzpatrick: Wow.
Larry Dorfman: So when we took it, that thought process made sense to us, obviously, and we were really happy to get the opportunity to do that as well as the research that they did around all of our products, making them the only MotorTrend recommended Best Buy products, so all of our F&I benefits. For our dealers, what that means is that their finance manager can explain to the customer that this is the one product that MotorTrend recommends for a service contract, or a GAP, or Tire and Wheel. That’s made that difference in penetration at Champion and at other stores.
Jim Fitzpatrick: Right.
Larry Dorfman: That was the thought process, and for us, we love differentiation. We love any time we can get on the forefront of something, and I’d love to point a question to you Tim, because I talk to dealers a lot about the program with calls, and sometimes we talk to dealers who go, “Well, you know, I’ve got a really big brand in my town, right? I’ve got a big brand, and I’m concerned that if I match this up with a MotorTrend thing that my brand sort of gets swallowed up,” and I don’t think there’s a better place to go get information from than the dealer. How have you worked to blend it and make sure your Champion Chevrolet brand, which is really big in your area, continues to be the brand that’s in the forefront?
Tim Roberts: It’s a good observation, Larry. One of the things that we didn’t stop doing was advertising Champion Chevrolet. We continued to advertise Champion Chevrolet and bring in the differentiator into the market, different than what other dealers have in the marker, different than other dealers have in the state on the MotorTrend brand has allowed us to actually step our branding up on Champion that much more. Between our reviews on Google, DealerRater, you know, when you’re running a five star Google review or a 4.7 Google review behind you and now you’re adding the MotorTrend brand name behind you, there’s a lot more consumer satisfaction behind it and ease of mind.
Jim Fitzpatrick: Talk to us about the impact that it’s had in the marketing online, because as you know, people will shop for certified preowned only, if they’re online and they’re looking to purchase a pre-owned vehicle it will be, “Where are my certified pre-owned vehicles?” Now, you’re able to do that with a non-Chevrolet product, right?
Tim Roberts: Yeah, absolutely. You know, as we discussed on the previous interview, the OEMS CPO program is pretty limited in what they offer out there, and really nobody knows what a OEM CPO program consists of today.
Jim Fitzpatrick: That’s right. That’s right.
Tim Roberts: But the way that branding and merchandising and marketing that EasyCare does with MotorTrend on the products and for us in help with their marketing team, it’s really sets us apart from our competition. You know, having that six month, 7,500-mile guarantee up front on the vehicle, having the exchange policy on the vehicle, having the wheel and tire coverage immediately. Consumers are seeing that and saying, “Why aren’t I getting this for this other dealer? Why doesn’t the OEM offer me this?” With the MotorTrend name behind it, it just continues to grow for us. The overlays on our pictures on the website, the credibility of MotorTrend has built value in the pricing of the vehicle. Everybody’s using market-based pricing today. Everybody’s willing to discount market-based pricing, depending on the vehicle. At this point, we don’t have to because we don’t need to discount that vehicle to the consumer because the brand is behind it with MotorTrend and EasyCare.
Jim Fitzpatrick: Sure. Looking down the road, is this something that you want to really expand upon and open up more used cars on this program and expand your used car operation?
Tim Roberts: Yeah, absolutely. As the OEM is changing and new car sales volumes are dipping, we have to find alternative ways to make profit and have profitability within the store. On the MotorTrend program, it’s really shown as that’s the right direction in profitability. The more vehicles that we can have MotorTrend certified on our lot means increased profits, increased work with the technicians and in the back end of the shop, continuously having the used car manager buy quality vehicles, putting quality vehicles back in the community and maintaining our customer retention. At the end of the day, it’s all about our retention.
Jim Fitzpatrick: That’s right.
Tim Roberts: If you don’t have the customers …
Jim Fitzpatrick: And because of the MotorTrend certified brand associated with your dealership, those people are going to have more of a propensity to come back to get their vehicle serviced there because they now know that it’s MotorTrend certified.
Tim Roberts: Absolutely.
Jim Fitzpatrick: I think more so than if it’s an OEM program, where they can go to any Chevrolet dealer. If they go, “Well, I don’t have to go back to Champion, I got this …” But in their mind, they’re thinking, “Well, I got to go back to Champion because they’re the actual MotorTrend certified program,” right?
Tim Roberts: Absolutely.
Larry Dorfman: Great point, Jim.
Jim Fitzpatrick: Yeah, and we all suffer from a low retention in the auto industry with regard to cars coming back after you sell them, right?
Tim Roberts: Yeah, absolutely.
Jim Fitzpatrick: Huge advantage.
Tim Roberts: Yes.
Jim Fitzpatrick: For sure. Well, guys, I want to thank you so much for joining us. This has been great, and as I said, hopefully, we can have you back to see how things are rolling out.
Tim Roberts: Yeah. Thanks.
Larry Dorfman: Thank you.
Jim Fitzpatrick: Great.
Thank you for watching the official resource of the retail automotive industry. This has been a JBF Business Media production.