Jordan Cox, Director of Regional Client Solutions, and Ashley Stockmann, Director of Portfolio Management, sat down to discuss specific source strategies. NextGear Capital clients have the opportunity to floor plan non-auction purchases. They take a deep dive into how to use this feature in Account Portal and the benefits it can have to your business.
Dealer Spotlight: How a Thesis Paper Made a Savvy Dealer
Gabi Furdyna is anything but your typical independent dealer. “I’m originally from Wroclaw, Poland. I used to be a professional tennis player and I came to the United States after I received an athletic scholarship from the University of Maryland. After I received my bachelor’s degree, I received a full academic scholarship to get my master’s degree. When I needed to purchase my first car, I met my now ex-husband who owned the dealership I went to. He had about 20 to 30 vehicles in inventory, after we had been dating for awhile, I started to see ways he could make improvements to his dealership. I mentioned this to one of my professors and he encouraged me to build my master’s thesis on improving the performance of a car dealership and that’s how I got my start in the automotive industry.”
Furdyna says her thesis proved to be valuable in expanding the dealership. “As soon as we implemented the recommendations I made, we doubled our volume which was incredible because that was back in 2008 during the Great Recession. We then opened a second location in Ellicott City, Maryland and I started running that location by myself. I quickly started selling an average of 100 cars a month. Unfortunately, we were renting that property and the landlord unexpectedly gave us only 90 days to vacate the property. I was also pregnant with my first child at this time and I wanted to find a property that was closer to home so it would be easier to care for my child. We eventually found a dealership that fit the bill and was also in a busy location near a mall, but we had to rent again, and I really wanted to find a dealership we could own so we wouldn’t be in the same situation again. I saw a story on news about how the city of Waldorf, Maryland was the fastest growing area for car dealerships in the country, so I drove up there right away and found a dealership that was for sale with 20 acres. So, we opened our third dealership and that’s the location I operate out of right now.”
After Furdyna separated from her husband, despite having several years’ experience running dealerships, she was treated like a new dealer whenever she applied for a loan because the previous dealerships had been in her husband’s name. “When I separated from my husband and reached out to lenders that I had worked with for years, I kept running into dead ends when trying to secure financing. As part of our divorce settlement, I had to give my ex-husband all of the vehicles I had at the Waldorf dealership. I then started purchasing some inventory using my own capital. I have 12 employees and they’re all wonderful and stuck by me, but I was also paying their wages out of my own pocket too.”
It was at this point when she knew that it was time to look for other financing options. “I decided to reach out to NextGear Capital last October. I spoke to Samantha Houston and she helped me immediately apply for financing and I was approved for a $900,000 line of credit in just a few days. I was so grateful and used the entire line in less than a week. I then spoke to my Portfolio Manager, Bruce Paxton, and he asked me to submit some more paperwork so he could do a deep dive into my financials. After a little more time, I was approved for a $2 million line of credit. Since receiving that increase, I’ve been able to floor over 200 units with an average turn time of about 45 days. Whenever I talk to Bruce, I always tell him that I’m ready to take on more inventory because we’re booming.”
Furdyna said that another reason she likes NextGear Capital is because she gets so much more with her floor plan than just funding. “I use Account Portal every day and love it. The audit process is so much easier than what I experienced with a different finance company. I just take a picture on my phone and submit it in the portal. It also gives me a complete overview of how many cars I have and how many I’ve paid off and all I have to do to make a payment is click on a button no matter where I’m at. It’s very intuitive and easy to use.”
She’s also a fan of some other Cox Automotive products. “I get most of my inventory from Manheim. They do a good job of giving a thorough overview of their vehicles in a virtual environment, so I feel comfortable buying inventory online. I use Dealertrack DMS to help streamline all of our accounting and I’m also looking into using Dealertrack Compliance to help protect the dealership against identify theft. That’s one of the biggest challenges we’ve faced during the pandemic since so much paperwork is submitted electronically and we have to make sure we’re extra cautious to protect the dealership from fraud.”
Despite being prosperous during COVID, Furdyna says that she’s had to make some adjustments. “Our customers are looking to spend less money and are more concerned about their payments. My ex-husband and I used to specialize in selling luxury cars because that’s what our customers wanted but now the average vehicle I sell is about $11,000. I still sell some higher end cars, but I’ve increased the number of vehicles that I carry on my lot that are $10,000 or less. I also offer contactless delivery and make sure the vehicles are sanitized thoroughly before they’re delivered. And of course, I continue to discuss the importance of following protocols and procedures with my staff to ensure that we’re keeping both ourselves and our customers safe.”
Despite all of the ups and downs she’s experienced recently, Furdyna says she still has big plans for the future. “My ultimate goal is to open a Tesla dealership on the property I currently own while continuing to run my current dealership. I support innovative technology because I think that’s our future. I just turned 35 and this is the fifth dealership I’ve had a part in opening and I really enjoy what I’m doing. I love to help people. I have clients that have been coming to me for the last 12 years, some of whom have purchased up to 10 cars from one of my dealerships because they feel comfortable working with me. I want to build something bigger so I can provide a good life to my children and our two cats that I adopted during the pandemic.”
Now that she’s a seasoned dealer, she said if a new dealer is looking for suggestions on how to get started it’s to keep things simple. “My advice for new dealers is to start small and to keep costs down as much as possible. It’s also important to find the right lender who will best support your dealership needs and goals. For me that’s NextGear Capital, their floor plan allows me to purchase the cars I need and provides me with additional resources that help me to run my dealership more efficiently. I love NextGear Capital! They’ve been a great partner during a challenging time in my life and have provided me with the support I need to rebuild my business.”
To get started with a NextGear Capital floor plan, contact us or apply today.
The Cox Auto Experience: What to Expect
Leading up to the annual NADA Convention & Expo, Cox Automotive is hosting a virtual event unlike any other you’ve seen before. Catch a front row seat on January 25 for the first ever Cox Automotive Experience – a free, 10-day virtual event featuring the solutions and insights that will define a new way forward for the automotive industry. An experience packed with thought leaders, industry insights, panel discussions and more, NextGear Capital hopes to see you there!
Download the Infographic here or visit NextGear Capital’s Cox Automotive Experience page.
The Top 5 Reasons Car Dealers Should Attend CAE
For its inaugural year, the Cox Automotive Experience has been designed to provide dealers with a plethora of useful and timely information so that they can start 2021 strong. The two-week event begins on January 25 and is jammed packed with presenters covering a variety of topics. Here are the top five things you can expect to learn if you attend the Cox Automotive Experience:
- Meet New Cox Automotive President Steve Rawley – Rawley is going to be kicking off CAE with the Cox Automotive Town Hall. This will be a great opportunity to hear from the new president including what his goals and outlook for the industry are. Chief Product Officer Marianne Johnson will also be discussing key milestones from a product perspective and what dealers have to look forward to in 2021.
- 2021 Market Outlook – Dealers will hear from Chief Economist Jonathon Smoke about his projections and predictions on what to expect from the market this year.
- Learn How to Create a Personalized Experience – If you’re looking for ways to improve the car buying process at your dealership, then you’ll want to join Jessica Stafford, Senior Vice President of Consumer Solutions as she walks dealers through best practices on creating the ultimate client-centric car shopping experience.
- Client Resilience Panel – If you want to hear how other dealers survived the past year then you should check out the client resilience panel. Independent dealers will be able to engage with other dealers during this interactive panel as they share what challenges they experienced in the past year, as well as what changes they plan on carrying through into 2021.
- Create a Winning Wholesale Strategy – No matter how large or small your dealership, inventory challenges were top of mind for everyone over the past year. During this session, dealers will be presented with tips for better understanding market data and the tools available to make better purchasing decisions in an increasingly competitive wholesale market.
Don’t miss this opportunity to gain insights from some of the top experts in the automotive industry so you can chart a course to a successful 2021 . To register for the no-cost event, sign up here. You can also sign up for a NextGear Capital product demo here.
The Cox Automotive Experience: A Preview
Thad Sykes, Associate Vice President of Sales at NextGear Capital, sat down with Pete Grupposo, Vice President of Dealer Sales at Manheim to preview The Cox Automotive Experience. The Cox Automotive Experience is a 10-day virtual event featuring industry insights, inspiring discussion, and the Cox Automotive solutions to help your business find a new way forward for automotive. This free event begins on January 25th and concludes on February 5th. Don’t miss it! Register for the event here.
This Dealer Knows Good Customer Experience
Jordan Baker’s first job was hardly what he would call glamorous. “My career began in the car business when I was 12-years-old. My family owned dealerships in Grand Rapids, MI and I would do odd jobs like pulling weeds and washing cars, so I basically started from the bottom and then slowly worked my way up.”
After spending several years learning the ropes at various car lots, Baker decided it was time to take the plunge and in 2018 opened his own dealership Comodo Motors. “We started out small and grew with a swift force averaging 50 vehicles on our lot. At first I only used my own cash, but it quickly became apparent that our growth and goals of expansion would not be viable based on a cash-only system that was tied up in payroll and reconditioning. That’s when I decided to use a floor plan. Now we average just over 100 cars on the lot at any given time.”
When it was time to pick a floor plan provider, a previous encounter made the decision easy. “I made the choice to work with NextGear Capital because they were very professional and organized. My Portfolio Manger, Jacob Clemons, is extraordinary. He always goes above and beyond working with us and is exceptionally responsive which is greatly appreciated in such a busy industry. I’ve also found that they have some of the lowest fees in the industry and will do everything from flooring a car to holding titles. NextGear Capital makes me feel like a true partner instead of just another number.”
Another thing that’s impressed Baker about working with NextGear Capital is the Account Portal tool. “Our Comodo team is made up of 10 people and everyone loves Account Portal. It’s so simple to use and has everything we need in one place. The ease of access to account information aids in being able to plan for payments, purchases and early vehicle payoffs, which helps properly direct company cash-flow.”
Baker says that he’s also an avid user of several other Cox Automotive brands. “I work with Manheim and appreciate how accessible information regarding past, present and future transactions is to find on their website. In addition, both AutoTrader and Kelley Blue Book help our sales team and customers have a better understanding of the true market price for our vehicles. All of these products along with NextGear Capital help us to enhance the Comodo Experience.” 
Unlike a lot of other dealerships, Comodo was surprisingly prepared when the pandemic hit. “I’ve been an advocate for digital retailing from the beginning, so when COVID started we were already in ‘pandemic mode’. We designed our website so that customers are able to complete most of the sales journey online. They can get pre-approved, see their trade-in value, do a full video walk-around of each vehicle available on our lot and reserve the car they’re interested in purchasing all before coming in to finalize their paperwork. We’ve always offered local at-home deliveries but have modified them to be completely contactless making for a convenient, customer-centric experience.”
Part of creating that experience for Baker includes putting customers in both an efficient and aesthetically pleasing environment. “My wife started painting out of our house about 5 years ago when we lived down in Florida. When we moved back to Michigan her business was going really well, and we were selling a lot of her paintings from our house. So, when I opened my dealership, we decided to use some of the showroom space to display her artwork and that’s when we officially opened Copper Corners Art Gallery. Having artwork on the walls makes for a very relaxing environment and our customers certainly appreciate it. It’s also been really cool, to work with my wife every day.”
Now that Baker’s been successfully running his business for a few years, when asked what advice he has for other dealers getting started, he said not to be afraid of change. “The biggest thing that you can take from all of this is you have to be okay with new things happening. Being in the business for a long time, we’ve seen that there are a lot of people in the automotive industry that don’t really want to change, and you have to be flexible. If this past year has taught us anything, it’s that this industry changes so quick. Look at what’s happened with inventory and we’re seeing what’s happening with online retailing. If you’re not open to it, you aren’t bringing anything to the table and you’re going to fall behind. A big part of this is adapting to what the customer wants. If the customer wants a more digital and visual experience, then you have to give it to them. Honestly, its made things so much more efficient for my business. On the floor plan side, I’m obviously an advocate for NextGear Capital because of their transparency when it comes to things like audits, titles and fees. I’ve seen multiple floor plan companies and this one is by far the best. So if there’s a dealer out there looking for a floor plan company, he needs to partner with NextGear Capital.”
When thinking about the future, Baker says he’s very optimistic. “Five years from now I anticipate significant expansion at our location, growing into a large-scale family owned and operated dealership unlike any other. Floor planning with NextGear Capital has given me a secure way to increase inventory and flourish as a business. The culture we’ve built at Comodo is honesty, transparency and a comfort level that makes you feel like you’re at home. That’s another way my business aligns with NextGear Capital and that’s what the Comodo Experience is all about.”
Get Ready for the Cox Automotive Experience
In 2021, dealers will be able to attend the first-ever Cox Automotive Experience (CAE). This free 10-day virtual event will provide dealers with industry insights and solutions to help keep business moving forward in the new year. Unlike in-person events, dealers will be able to have one-on-one interactions with subject matter experts from some of the top brands in the automotive industry in a low-pressure environment.
Events will include a Cox Automotive Town Hall lead by Steve Rowley and Marianne Johnson, panels on topics like Client Resilience lead by Rich Contu, Creating a Personalized Buying Experience lead by Courtney Clark and the 2021 Market Outlook featuring Jonathan Smoke. Many brands will also be unveiling their latest solutions and tech, like NextGear Capital’s FirstGear program. Dealers will also have the opportunity to participate in demos from companies like Manheim, Kelly Blue Book, Autotrader and more!
If you’ve never had the opportunity to attend an in-person tradeshow or conference before, this is the perfect opportunity to test drive all the benefits a convention has to offer in a virtual environment. Make time to create connections with participating brands to ensure you have access to the support you need to make the most of 2021. Another unique benefit of registering for CAE is post-event access to all the content presented which will be available through the end of February.
Independent dealers can schedule their pre-set demo with a NextGear Capital sales team member here.
Thad Sykes and Brad Burns Discuss Online Auctions
Thad Sykes, Associate Vice President of Sales at NextGear Capital, sat down with Brad Burns, General Manager at Manheim St. Pete. In the video, they discuss the shift to online auctions and the steps they are taking to accommodate dealers during the pandemic.
When in-person auctions started to close down during the pandemic, many independent dealers found themselves having to quickly adjust to buying and selling their inventory online. Since many dealers had not been big online buyers prior to the pandemic, they didn’t realize how they could enhance their current inventory offerings through these platforms. Not only are online auctions convenient and efficient, but if you know how to leverage them correctly, they can help give you the upper hand whether you’re buying or selling inventory. Check out this blog for tips on mastering virtual auctions.
Finding Your Way Forward: December 2020
Helping Others During the Holidays
Marcos Esquivel of Esquivel Auto Depot in Rialto, California has been working at his family’s dealership since he was just a young boy and knows firsthand that the car business can be a roller coaster. Despite this, for the past 10-years, he’s sponsored an annual Christmas event at his dealership to give back to underprivileged families in his 
local area. Previous events featured a free meal and toys for over 300 families, pictures with Santa Claus and stations for face painting. Unfortunately, like just about everything else, Esquivel had to cancel this year’s event due to COVID. However, he still plans on working with local schools to sponsor three families who’re currently going through a financial hardship so that their Christmas is a little brighter. Esquivel is hopeful that he can resume the event next year, even if means scaling it back to keep everyone safe. “We will hopefully be able to host the event again next year. I like the way everyone gets together and has a good time celebrating with food and family, but we want to make sure that everyone is safe as well.”
Embracing Online Auctions During COVID
When Annette Williams and her family contracted COVID in May, she had to make some quick business decisions to keep her dealership Champion Financial up and running. “We were already taking precautions to keep ourselves from contracting COVID. I was working remotely from home, handling all the paperwork for the dealership, and my husband was conducting in person business by appointment only. He was the one who started showing symptoms, and we think that it was contracted at the lot. Later, both myself and daughter caught it. Luckily, the symptoms were mild and manageable, and we were very fortunate that we could quarantine at home without having to go to the hospital.”
One of the first changes Williams made was buying inventory exclusively online, “We had already started testing the waters before the pandemic, but we became full-fledged 
once it started.” She says her husband handles most of the inventory buying for their dealership located in Dolton, IL. “There’s been some challenges with transportation. Before COVID we would usually get the vehicles here within 3 to 4 days but now we have to wait almost 15 days sometimes. I’m guessing it has to do with a lot of other dealers buying online too. But despite the delay, it’s really nice being able to get cars from out of state. Especially with the colder months approaching, it’s convenient and allows us to have more flexibility with our inventory.”
While she’s glad that her dealership is still thriving, she says the biggest lesson she learned during this ordeal is the importance of keeping everyone safe. “Protect yourself, your family and customers. I’ve hired a minority owned business who comes into the dealership two times a week to sanitize. You can’t live off fear, but you need to take the necessary precautions to protect your inner circle and keep your customers safe.”
Community Relations Keeps the Holiday Spirit Going at NextGear Capital
While there will be no Holiday Party at NextGear Capital this year, NextGear Capital’s Community Relations team has come up with some ideas to keep the holiday spirit alive for its team members. Earlier this week, they hosted a virtual holiday card party where participants connected on Teams and listened to holiday music while creating cards for local assisted-living and nursing home residents who’ve been isolated during the pandemic from family and friends. Lauren McNabb, Events and Community Relations Coordinator at NextGear Capital says, “Although it was a virtual event, we hope that by participating, team members felt they were still able to bring holiday joy to those who need it most in our community and also enjoyed chatting with each other while listening to festive music.”
There will also be an opportunity for team members to participate in a Virtual Trivia Night in December where they will have the opportunity to win prizes and are encouraged to wear their ugly holiday sweaters. This is a fundraising event so each team’s entry fees will be donated to Gleaner’s Food Bank.
Mastering Virtual Auctions
When in-person auctions started to close down during the pandemic, many independent dealers found themselves having to quickly adjust to buying and selling their inventory online. Since many dealers had not been big online buyers prior to the pandemic, they didn’t realize how they could enhance their current inventory offerings through these platforms. Not only are online auctions convenient and efficient, but if you know how to leverage them correctly, they can help give you the upper hand whether you’re buying or selling inventory.
Here are some tips for mastering virtual auctions to give you a competitive edge:
- Familiarize Yourself with Different Format Options – One of the benefits that comes with buying and selling vehicles online is the access to the numerous options out there. With so many different platforms available, it may seem daunting to know which one is going to work best for your needs. It’s a good idea to take time beforehand to do research so that you fully understand how each one works, ensuring you’re selecting the right online partner auction for your dealership.
- Know Your Vehicle Location – Something buyers need to be aware of is the vehicle’s location for all inventory being considered for purchase. Online auctions are able to offer you more variety by listing vehicles that aren’t just available onsite. Make sure you know if the vehicle you’re bidding on is located at the actual auction lot or 100 miles away. Extra transportation costs can eat away at your profits so knowing your vehicle’s location can help make sure you bid without any costly surprises.
- Understanding Online Arbitration – Arbitrating vehicles purchased online might sound like a big undertaking and one you may even think you’ll run in to more than with in-lane purchases. However, arbitration rates have actually gone down since moving to a more digital environment thanks to digital tools like in-depth videos and Condition Reports. The NAAA has established policies for both buyers and sellers purchasing in an online environment and encourages that they are used as a guideline. Everything from title discrepancies to understanding the sale light system are covered, so this is a reliable tool you can use to know you’re not going to purchase a lemon.
- Become a CR Expert – Knowing how to read a condition report is crucial if you’re going to buy and sell vehicles confidently online. CR’s have improved since online buying has grown in popularity and they feature more detailed information than ever before. Sellers can use the information in the condition reports to help discuss any concerns with potential buyers and reduce the chances of their customers being dissatisfied with their purchase.
- Access to Extra Resources – One of the myths about virtual auctions is that you won’t have access to things like Post Sale Inspections, transportation and reconditioning services, but that’s not the case! Most virtual auctions still offer buyers all of these additional services and in many cases, you can even have a PSI or recon done onsite at the auction, even if the vehicle was purchased online.
- Easy Integration– Another convenient part of buying or selling your vehicles online is how easily you can integrate things like a floor plan into the process. Floor plans can help free up cash so that you have more flexibility to get the inventory you need right away. Additionally, if you select a floor plan provider on the same platform as the auction you’re using, they will already be integrated, making for a seamless process.
- Don’t Be Afraid of Fees – Another misconception about virtual auctions is that you’ll pay more fees. This isn’t true because the fees associated with onsite and online buying are comparable and you might actually be able to save some money by taking advantage of special promotions that are only available with online vehicle purchases.
By taking the time to do some research, you’re going to be able to take command when you bid on and sell inventory online. You’ll be able to participate in multiple auctions at once, acquiring the inventory your customers are looking for in a lot in less time, so you can get them into your customer’s hands and off your lot faster. This can help reduce your costs, increase your margins, and put cash in your hand earlier in the process driving your dealership towards increased success.