Should I join the association ?

So you own a dealership and want to consider joining an association? Well association membership can be anywhere from $300 per year to over $ 2,500 a year depending on the size of the association, the size of your dealership and how active they are and what they really do for you.
Consider this when looking to join an association. What is my return on investment (ROI). In today’s digital age much of what the small, poorly funded state associations claimed as benefits are readily available via a simple web search. Maybe you are in a state that requires continuing education? Is your state’s association the only approved vendor for such continuing education? Probably not. And the state associations that do offer the courses usually do not discriminate against non-members taking the course.
“I get my Dealer Bond from them” great, there are a dozen dealership insurance brokers/agents that would give you a competitive quote for your bond. In fact, the brokers can usually quote multiple sureties for you to find the best deal. Your Association likely has some type of “kick back” agreement not only with the bonding entity but also with many of their “approved vendors” or “exclusive” vendors.
More and more we see clients around the country pulling back from the State associations and focusing their time on the National level associations (NADA, NIADA, ATD, etc.). These organizations seem to be in a position to update members about legislative changes and happenings on a federal and state level and also have robust lobbying arms working for their members.
“What about legislative changes, new dealer education, F & I education? “you ask. Again, vendors and your national associations, franchise / factory representatives and product vendors are great “free” resources for much of these needs. One east coast association for independent auto dealers actually handles two states yet the membership levels continue to drop, the website is archaic and the “benefits” for members are just not worth the price of admission in many pre-owned dealer’s minds. Ask around at your regional auctions, talk to your wholesalers and peers. Are they members?

A few advantages to look for when trying to justify joining a smaller association:

1. Do they offer a service I cannot get elsewhere and if so, do I HAVE to be a member to order or buy it?
2. Do they publish a regular magazine or newsletter with valuable regulatory or legislative info?
3. Can they point to achievements made by their active lobbying of your state government?

In the end, look at your ROI when sizing up a state or local association. And ignore the pressure to join for benefits that may not truly be there.

Avoid lending to GEICO customers

Raleigh, NC. – Our offices nationwide are noticing a disturbing trend dealing with customer loaner car accidents. The cases involve a dealer loaner vehicle being damaged and the customer who borrowed the vehicle is insured with Geico. In every single case the customer has signed a contract agreeing to be responsible for the damage to the “borrowed” car and have been at fault for subsequent damage. We recommend either completely avoiding lending an auto to those customers or at the very least confirming the customer carries comprehensive and collision on the Geico policy. Essentially Geico is claiming they are secondary in the loss and are forcing dealers to utilize their own physical damage policies first and Geico awaits the subrogation demands (months and sometimes years later) and at best they are offering to pay only 50% of the loss.

Hmm… this commercial provides a great image.

In one case, an Illinois customer who borrowed a vehicle caused a total loss to a $28,000+ new car loaner and Geico refused to pay the claim even though the customer signed a contract saying they are responsible. After the vehicle was sold at salvage Geico only offered to pay half of the $22,000 balance. This leaves the dealerships carrier “holding the bag” for the $10,000 they paid. This also left the dealer holding the bag for the $1,000 deductible which was not reimbursed. The “insult to injury” comes at insurance renewal time when the dealership realizes an increase in the cost of their inventory insurance due to claims like these.

In another case in North Carolina, Geico again refused to pay on a $18,000 total loss leaving the dealership “holding the bag” on a $2,500 deductible.

Regardless of what carrier your customers have when borrowing a loaner car it is a good idea to confirm:
1) They carry comprehensive and collision coverage, if they do not carry this coverage they do not get a loaner!
2) They sign a strong loaner car agreement tying them to the liability.
3) They understand that they can and likely will be personally sued if their insurance carrier does not make the dealer whole.

Things only get worse when bodily injury is involved. Our team is thus recommending to our clients that you avoid loaning to customers of Geico. We are also actively assisting in lawsuits in which the dealership is suing the customer for failure to pay for the loss to the loaner vehicles. For more information, sample loaner car agreements or advice on dealing with these types of issues please contact our office at 888-802-3441 ext 701 or via email at info@adig1.com.