Welcome to NextGear Capital’s company news page, where we share updated information about our company, community involvement, industry news, auto remarketing information and best practices in financing used vehicle inventory.
The Black Book Pedal Car Auction at the 2014 NAAA annual convention raised $576,300 to benefit the NAAA Warren Young, Sr. Scholastic Foundation, Inc.
FREDERICK, MD.—Pedal cars attracted very adult-sized donations at the National Auto Auction Association’s Black Book Pedal Car Auction, raising more than a half-million dollars to benefit the organization’s nonprofit NAAA Warren Young, Sr. Scholastic Foundation, Inc. The auction was held during the 2014 NAAA Annual Convention in Boston.
Among the 14 candy-colored and fully accessorized, pedal-powered entrants, a Jump Truck custom-built by State Line Auto Auction of Waverly, NY — complete with jumper cables, compressed air system, push bumper, beacon lights, trash receptacle, fire extinguisher and first aid kit — claimed the “Best In Show” title with a winning bid of $102,000. The team of John Williams, Chris Waters and Ed Garrity under the supervision of Rob Bennett invested almost 130 hours in the project, according to State Line President Jeff Barber.
The charity event’s entry fees, vehicle sales, award sponsorships and additional contributions collected a grand total of $576,300 for the association’s annual merit scholarship program.
Four other contestants took home special show awards sponsored by NextGear Capital and judged by the NAAA’s four chapter presidents: McConkey Auction Group, “Most Creative Pedal Car;” Greater Milwaukee Auto Auction, “Best Custom Pedal Car;” Pittsburgh Auto Auction, “Best Accessories;” and, Akron Auto Auction for “Most Unusual Paint Job.”
“I am truly astonished and extremely gratified by the remarkable response to this first-time fundraiser that far exceeded our expectations ten-fold,” said outgoing NAAA President Jack Neshe, explaining that the original goal was $50,000. “I want to express my heartfelt appreciation to all of our auction participants for their generous support.”
Neshe, who also chairs the WYS Scholastic Foundation’s board, had suggested the auction idea a year ago during a visit to NAAA headquarters where he saw a pedal car in the office of Chief Executive Officer Frank Hackett.
“We just thought this offered our members a great way to demonstrate their creativity and craftsmanship in a friendly, fun competition while raising money for our scholastic foundation, which since it began in 2004 has helped 120 deserving students achieve their dreams of higher education,” noted Neshe.
The auction rules allowed the contestants to modify new or pre-owned pedal-powered vehicles or even custom make their own — whether trains, planes or automobiles — as much as their imagination and skill would permit. That included paint, decals, graphics, exhausts, lights, sirens and other parts or accessories.
Handiwork of all the entrants vying to be among the finalists selected to compete in the auction appeared in a display at the CAR Conference in March. The lucky 13 to be included with Black Book’s entry on the auction’s run list were chosen by a random drawing held at the National Independent Automobile Dealers Association Convention this past June in Las Vegas.
In run order the auction contestants and their final bids were: Black Book ($49,500); Capital City/Mountain State Auto Auctions ($10,000); ADESA Indianapolis ($8,500); Akron Auto Auction ($14,000): Sanford Auto Dealers Exchange ($25,000): McConkey Auction Group ($45,000): Manheim ($75,000); Dealers Auto Auction of the Southwest ($10,000); State Line Auto Auction ($102,000); Lynnway Auto Auction Inc. ($45,000); Greater Milwaukee Auto Auction ($25,000); Farmington Auto Auction ($15,000); Pittsburgh Auto Auction ($31,000) and Charleston Auto Auction ($26,000).
“The benevolent spirit of all those who took part was just inspiring,” remarked Hackett. “It was one of the most entertaining and exciting 45 minutes I’ve ever experienced as we approached a half-million dollas and people kept making offers to get us over the mark. For example, Black Book and Lynnway both bought their own cars and then donated them back for resale. It was an amazing evening.”
Hackett also noted the many magnanimous individual gifts that helped boost the final tally, which included $5,000 each from Auction Finance Corporation, Auto Auction Solutions and Jay Cadigan; $10,000 a piece from Charleston Auto Auction, Lynnway Auto Auction, Janet Barnard and Auction Insurance Agency; and, a $25,000 contribution from NextGear Capital.
Tom Cross, president of Black Book, said he was proud his company could be the main sponsor of the association’s first-ever pedal car auction. “We believe in NAAA’s work on behalf of the industry and are big supporters of the Warren Young Scholastic Foundation. We’re happy to give back to the remarketing community in this role and thrilled at the event’s overwhelming success in raising money for a worthy cause.”
An article detailing the event with photos of all the pedal cars will appear in the November issue of NAAA’s On the Block magazine. State Line’s Best In Show winner will be featured on the covers of both the magazine and the 2015 NAAA Directory.
CARMEL, Ind. – NextGear Capital, the world’s leading independent inventory finance company, announced today that it has added the EDGE ASI Auction Operating System to its floor planning integration with AuctionACCESS, the industry leader in dealer credentialing services.
As a result of this integration, all auctions on the Edge ASI system will have the ability to receive updated NextGear Capital credit availability and originate floor plan transactions through the AuctionACCESS platform.
“Innovative technology solutions have been the hallmark of NextGear Capital since day one,” said Brian Geitner, president of NextGear Capital. “This integration with EDGE ASI furthers our commitment to create and provide simplified solutions that help our customers grow and succeed.”
EDGE ASI auctions will now benefit from automated credit availability and floor plan loan processing with NextGear Capital. Facilitated by the AuctionACCESS platform, this integration will streamline the buying process for NextGear Capital dealers and enable them to floor their vehicles with NextGear Capital more quickly and efficiently.
“Many of our Edge ASI customers have a great working relationship with NextGear Capital and this integration just makes sense,” said Watson McClam, general manager of the Auction Edge ASI Division. “Auctions are already seeing benefits from more reliable availability figures and streamlined post-sale settlement.”
About NextGear Capital:
NextGear Capital is the largest independent inventory finance company in North America, providing flexible lines of credit for dealers to purchase new and used inventory throughout the U.S., Canada and the U.K. NextGear Capital delivers innovative solutions that empower dealers like you to buy and sell inventory with versatile lines of credit that can be used at over 1,000 auto and specialty auctions and other inventory sources. You can floor plan nearly any type of remarketed unit in automotive retail, wholesale, salvage and specialty, including recreational vehicles and trailers, marine, powersports, used heavy trucks, auto salvage and auto daily rentals. NextGear Capital also provides a robust array of services and support allowing you to acquire and sell more inventory. This includes state-of-the-art online and mobile account management tools, market-specific industry and dealer performance data, title services, records management and collateral protection. NextGear Capital is focused on service, technology and simple solutions that will help you stock more vehicles, attract more customers and close more deals. The company is headquartered in Carmel, Indiana and is part of the Cox Automotive group of companies, which includes AutoTrader, Kelley Blue Book, Manheim and vAuto. Visit www.nextgearcapital.com to learn more.
AuctionACCESS is based in Birmingham, Al, and is the leader in helping companies manage their vehicle dealer credentials using a centralized database of dealers and authorized representatives from 128 countries.
About Auction Edge
Auction Edge is the unified technology platform and national marketplace of the independent auto auctions. Auction Edge provides a complete suite of products and services for auction management and is a leading online marketplace representing more than 150 independent auctions.
At the recent NABD Conference and seminar, one of the key messages communicated was the importance of providing additional and necessary training to Buy Here Pay Here (BHPH) dealers across the country due to a change in regulatory environment. For many BHPH dealers, they have taken it upon themselves to put their own money on the street when they are unable to get a consumer financed.
In March 2013 the Consumer Financial Protection Bureau (CFPB) released a bulletin outlining its intent to hold indirect dealers responsible for compliance with fair lending requirements of the Equal Credit Opportunity Act related to dealer interest rate mark ups, participation and reserves. This comes after several lenders came under investigation for being discriminative with their markups.
As a result, the CFPB is turning a bright light on car dealers, notably BHPH dealers, and upping the scrutiny of certain unscrupulous practices, which include:
- Collections violations
- Disparate lending violations
- Predatory lending violations
What is most concerning is that the majority of dealers within the BHPH space are not aware of these changes or the increased government focus on the industry. Dealers found to be non-compliant could face fines or possibly criminal charges.
According to David Bafumo, president of FNI Incorporated, some issues that the CFPB are most concerned about include:
- Product value
- Terms & Conditions are disclosed
- Product cost is accurately explained
- Marketing materials are accurate
- All consumers are treated equally – opportunity and cost
- Products are optional
- Products are cancellable
- Sellers have processes to a) track product and provider performance and b) help customers with products
One of the best ways for a dealer to make sure they are not violating any compliance regulations is to develop a clear Compliance Management System (CMS) to follow. While a CMS is often an integral part of financial institutions, many dealers do not include one in their dealership’s compliance guidelines.
Here are four simple steps a dealer can make to incorporate a CMS into their dealership.
1) Appoint a compliance officer
Depending on the size of the dealership, this could be the owner or someone on the staff. This person is charged with making sure all compliance policies are being followed.
2) Develop a fair-lending policy
Set-up a policy that states you will not act discriminate towards any ethnicity, sexual orientation, demographic or nationality.
3) Have a few loans reviewed
Take the time to hire an attorney who specializes in this area and have them look over a random sample of your loans to make sure you are federally compliant. Ask for feedback on any red flags they notice and where you could be doing a better job.
4) Create a distinct applicant review
Dealers need to take a step back and look at who it is they are lending to. Are you targeting a certain demographic? You need to be consistent in all your lending operations to maintain compliance, so taking time to review to make sure you are following your fair-lending policy will assist you in this.
By following these steps, dealers can provide a consistency to their operations and thus follow their CMS.
For more information, check out the some of the resources and information available on the BHPH website.
This article is not to be considered legal advice. To better understand the CFPB, the Equal Credit Opportunity Act, fair lending requirements or other regulations facing BHPH dealers, please consult a licensed attorney.
Category: Articles, Company News, Floor PlanningTags: automotive remarketing, bhph, buy here pay here, cfpb, compliance regulations, consumer financial protection bureau, NextGear Capital | Comments Off
NextGear Capital has announced its expansion into the Marine industry through its Diversified Products division. With this expansion, the company will look to establish itself as a leading provider of floor plan financing solutions to the industry.
“We are very pleased to announce our entrance into the Marine industry, where there remains a shortage of available capital to provide adequate floor plan solutions for both manufacturers and dealers,” stated Frank Ford, Vice President of Diversified Products with NextGear Capital. “Having expanded beyond the company’s core offerings of auto floor plan, the Diversified Products division and its unique offerings have been well-received in the RV industry and we believe they will be just as accepted in the Marine space as well.”
The company recently brought on Marine industry veteran Bob Bejesky to serve as National Account Manager for NextGear Capital’s Diversified Products division. In this role, Bejesky will be responsible for establishing and developing manufacturer relationships and programs as well as assisting with sales and marketing efforts.
by Karen Millwood
I’ve discussed in recent posts how being connected to technology and being ‘mobile’ is becoming more and more of a necessity for a viable business in today’s market. I’ve also discussed the necessity to turn inventory as quickly as possible to maximize your profitability. Now, let’s discuss putting the two together.
In a recent industry publication from Auto Remarketing, the pulse in the used car market is changing yet again to “wholetailing.” With the technology available from a smartphone or tablet, trends are showing many more dealers are selling virtual inventory – directly to consumers, right from the auction lanes. Black Book is adding a profit calculator app. Many dealers are scanning VINs and calculating their profit on the spot before they make the buy, which allows for quicker decision-making. Selling from the auction lane cuts down on turn time, as well, since dealers are now able to have a consumer lined up before leaving the auction.
Same goes for any aged units you have. If that vehicle just isn’t selling at the auction and it’s burning a hole in your pocketbook from daily hold cost, try to upload and sell it to a consumer for the wholesale price you would take at auction to get out of it. Other profit opportunities may remain through warranties or added features sold directly to the consumer.
The profit calculator would still come in handy for this transaction as well.
Try the concept of virtual inventory and the profit calculator app. I am a firm believer that turning inventory quickly is the key to success and these are more tools at your fingertips to help you attain your business goals.
In all aspects of life, we build and nurture relationships. Whether it is with our spouses, friends, or co-workers, developing a strong relationship is paramount. This holds true for dealers too, who strive to find a lender that they can trust and with whom they can have a long and prosperous business relationship.
The relationship between dealers and lenders is vital to each other’s success. With so many different avenues (auctions, finance companies, floor plan companies, etc.), there are many different people dealers must rely on to make their business successful. Building strong relationships with the right people can go a long way in helping a dealer’s bottom line.
Lenders can be a great asset to help dealers grow their businesses. As such, dealers should view the relationship with their lender as a great opportunity to tap into an important resource. Lenders have a wealth of knowledge in the industry which allows them to help dealers make key decisions involving their floor plan and business. By taking advantage of this opportunity and working together, both parties will experience positive results.
Transparency is key to building the relationship. Both the dealer and the lender have specific goals, and being open and upfront will allow both parties to collaborate on the best way to reach their respective goals. Conversely, when dealers are not being transparent with their lender, it will hinder them in their ability to help you reach your goals.
A successful dealer-lender relationship is built on trust. This trust can be accomplished by building and gearing it towards a balance. It can’t benefit just one side. The dealers that have the best relationships with their lenders are the ones who are willing to work on developing a trusting partnership with their lender. Therefore, the dealer needs to feel comfortable coming to their lender for advice on questions pertaining to their floor plan or growing their business, as this will allow both parties to strive to reach their common goals.
It’s really important that dealers leverage their relationships to help them run their businesses, and equally important to think about the future as well as the present when it comes to their relationships. Anybody can shake somebody’s hand and ask them about the weather, but to have a true understanding and investment in somebody’s success is what truly defines a relationship.
NextGear Capital has announced the creation of its Ambassador Program for its field representatives. Through this program, the company will partner with industry experts to provide certified training modules to further develop its field representative’s dealership business and industry knowledge.
“We care about our dealer’s success and know that they want a partner that understands their business,” said NextGear Capital President Brian Geitner. “By furthering our educational platform with various industry experts, our field representatives will gain expert knowledge and become ambassadors to the industry, allowing us to continue fostering consultative relationships with our dealers to ensure they remain successful.”
As part of the Ambassador program, NextGear Capital is providing dealer training through various state independent automotive dealer associations. The company is nearing the completion of its first Ambassador training module, which is based on the NIADA’s Certified Master Dealer program. Read more
NextGear Capital customers who want easier and faster sales financing for subprime customers will have it, as a result of Manheim signing an agreement to purchase an equity stake in Go Financial, a subprime auto finance company.
This deal creates a unique opportunity for Manheim to invest in a growing subprime auto finance segment – independent dealers who want to take greater control over the financing options they offer their retail customers. Go Financial is owned by DriveTime Chairman Ernie Garcia and DriveTime President and CEO Ray Fidel. Go Financial will operate independently from Manheim and DriveTime. Headquartered in Phoenix, Go Financial employs a staff of 175.
“Our stake in Go Financial supports our goals of delivering the types of products and services that dealers need to grow and compete,” said Patrick Brennan, group vice president of Manheim Financial Services. “Together, Go Financial and NextGear Capital will provide an easier and more convenient way for independent dealers to finance their subprime customers.” Read more
by Karen Millwood
Account Executive for NextGear Capital, Inc.
The ever-changing auto remarketing industry has seen more changes in recent years than ever before. Today more than ever, having a floor plan partner is very important to the small business owners’ vitality. If you are looking to grow an existing business, or beginning the journey of business ownership, it is important to have a good inventory finance partner to assist in expanding or getting your new business off the ground. A floor plan can ensure you have fluid cash flow, a variety of inventory to increase your consumer base, and can make buying inventory a simpler process.
Why a Floor Plan Company?
There are several things you should know and take into consideration when choosing a business partner in inventory finance. An inventory finance plan, known as a “floor plan,” can increase your cash flow. A floor plan gives you the option and the freedom to use your money where it is needed most, instead of being tied up in inventory on your lot. It provides the flexibility to purchase a variety of inventory that can drive more consumers to your lot.
As your consumer base widens, so do your profits! With cutting edge technology now offered by floor plan companies today, it has never been faster or easier. Now you are able
to manage your account from your computer, tablet or smartphone. This includes making
payments, viewing titles and reviewing key performance indicators specific to your account.
These tools can provide insight on potential market opportunities to develop your business
and improve income opportunities.
Know Your Numbers
When researching which floor plan partner is right for you, it is very important to know your numbers. A good floor plan company will ask you in detail about your business model before quoting you term plan fees. Every business model is different, catering to various demographics: specific locations, types of consumer (cash vs. financing), etc. Other factors, such as average price, turn time, retail, wholesale, specialty units, power sports units, etc. may be considered in the equation as well.
Know Your Business Model
When the time comes to have this conversation with a prospective floor plan partner, it is important to know your business model and be well-versed in presenting it. What is your average inventory turn time? How many cars must you sell per month to pay your operating expenses (your break even number)? What are your operating expenses? What is your average profit margin per car? These are all key questions a good business person should know. Knowing these numbers and reviewing them on a consistent basis is key in establishing where you were, where you should be, where you are going, and how long it’s going to take to get you where you need to be.
Keep in mind that floor plan companies are discretionary lenders. The less risk you appear to be, the more likely you are to get that great term plan fee structure and the amount of money your business needs. Be proud to share your numbers with your floor plan company. Let them check inventory and see your financials when asked. They aren’t just trying to be nosy. Their review can factor in to determining your fee structure and the line of credit you qualify for. Also, you should know your credit score and any hiccups on your credit, as this could negatively affect the term plan you qualify for. It doesn’t necessarily mean you would not qualify for a floor plan line of credit. However, it could affect how much you pay for one initially.
Know Your Needs
Last but not least, once approved, don’t use the entire line of credit all at once. It is important to maintain discipline and floor plan responsibly. Space your purchases out over a period of time. Loading up a quarter of a million dollars worth of inventory in a single week could be a huge mistake. The payoff on that inventory will come due at the same time and if they haven’t sold, you will be paying a considerable amount of money all at once. This is important to keep in mind as you are flooring inventory.
You work hard, so make your money work for you! Focus on developing and perfecting your operation and take care in choosing the business partners and tools you work with. To shift your business into the NextGear of growth and development, a floor plan may provide the buying power you need to sustain a thriving business model. Buy wisely, increase your cash flow, and be aware of your numbers. You’ll make more money in so doing. It’s time to shift!
NextGear Capital has announced the appointment of Bryan C. Everly to the role of Chief Technology Officer. Everly will be responsible for directing all aspects of information technology including architecture, security and compliance, application development, infrastructure and program management.
“Technology has always been at the forefront of what NextGear Capital is about, as we are continually looking for ways to better meet our customer’s needs,” said Brian Geitner, president of NextGear Capital. “Bryan brings more than 20 years of progressive experience in the technology field and we are excited to have him on board.”
Everly previously served as Vice President of Engineering for the Integrated Marketing Management application division of Teradata, a leading Enterprise Data Warehouse company. He has also served as Sr. Director of Development for ExactTarget, a Salesforce.com company, and was founder and managing partner for PeopleStrategy in Fishers, Ind. He is a U.S. Air Force veteran and resides in Indianapolis. Read more
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