Pub. 3 2023 Issue 3

OFFICIAL PUBLICATION PUB. 3 2023 ISSUE 3 REMAINING COMPETITIVE IN THE CAR BUSINESS Professionalizing the Family‑Owned Auto Dealership ANNUAL KADA GOLF TOURNAMENT

We’re more than a financial partner. We’re an invested one. True relationships matter. We don’t take this lightly. The best are built on a deep understanding of your short- and long-term goals and always backed by thoughtful, strategic advice in support of your vision. With full-service financial solutions and a deep bench of industry expertise, we’ll build a team around your organization to focus on your success. So, let’s drive further—together. To learn more, contact Jason W. Smith, head of Dealer Commercial Services, 407-237-4011 or Jason.w.smith@truist.com. Truist.com/DealerServices © 2022 Truist Financial Corporation, Truist, Truist purple and the Truist logo are service marks of Truist Financial Corporation. All rights reserved. Truist Securities is the trade name for the corporate and investment banking services of Truist Financial Corporation and its subsidiaries. Securities and strategic advisory services are provided by Truist Securities, Inc., member FINRA and SIPC. | Lending, financial risk management, and treasury and payment solutions are offered by Truist Bank. | Deposit products are offered by Truist Bank, Member FDIC.

©2023 Kentucky Auto Dealer | The newsLINK Group, LLC. All rights reserved. Kentucky Auto Dealer is published four times each year by The newsLINK Group, LLC. for Kentucky Auto Dealer Association and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of Kentucky Auto Dealer Association, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Kentucky Auto Dealer is a collective work, and as such, some articles are submitted by authors who are independent of the Kentucky Auto Dealer Association. While the Kentucky Auto Dealer encourages a first print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at 855.747.4003. CONTENTS 8 13 18 6 President’s Message Working Hard and Supporting Dealers By Jason Wilson 7 2023 KADA Executive Committee 7 Save the Date KADA Legislative Reception 8 Chairman’s Message The Importance of Our KADET Fund By Joe Cummins 9 Contribute to KADET Today! 10 Annual KADA Golf Tournament 13 Control What You Can By Justin Carr, Warranty Processing Company 16 Dealerships Must Use New Form I-9 Beginning November 1 By Matt Simpson, Fisher Phillips 18 7 Powerful Vehicle Acquisitions Tactics That Will Boost Your Profits By Brian Kramer, Cars.com 20 Remaining Competitive in the Car Business Professionalizing the Family‑Owned Auto Dealerships By Kendall Rawls, The Rawls Group 22 Why Wait? How Evaluating Your Dealership Can Help Your Business. By Maxime Theoret, CPA and Managing Partner & Jennifer Rafael, Vice President and Partner at DSMA 24 KADA Preferred Partner Programs 26 Kentucky Horsepower 26 Mark Your Calendars for Our 2024 KADA Family Convention! 4 KENTUCKY AUTO DEALER

Reliability is important. Equal Housing Lender. ©2021 M&T Bank. Member FDIC. CTD-903 210908 V1 Providing stability to auto dealerships since 1951. From the people closing the deal to the vehicles themselves, dependability is everything in the auto industry. Which is why dealers choose to work with M&T Bank for the long haul. Through the industry’s highs and lows, our clients have come to rely on our steady support. We’ve learned the ins and outs of the business along the way, enabling us to deliver the right products - from floor plan to construction financing, merchant services to purchasing cards, and investment management to 401(k) advisory and wealth planning. It’s this dependability that helps dealers like you do what they do best - run their businesses. That’s what understanding what’s important is all about. Get in touch with M&T today. Timothy Flynn Dealer Commercial Services tflynn2@mtb.com 412-398-7655 mtb.com/dealerservices

PRESIDENT’S MESSAGE JASON WILSON Dear Kentucky dealers, The past couple of months have been busy with meetings, events and preparing for the coming year. Recently, I joined dealer association leaders across the nation at the Capitol for the annual NADA Washington Conference. We spent time meeting with Kentucky legislators or members of their office to discuss key federal issues impacting dealerships today. We discussed fixing the FTC’s “Vehicle Shopping Rule,” how electric vehicle mandates are going too far too fast, supply chain disruptions, catalytic converter theft and more. These meetings were extremely productive as we were able to connect personally with our legislators in Congress as well as bring to light important issues affecting our industry today on a national level. I have also been participating in and leading various Automotive Trade Association Executives (ATAE) meetings. We meet throughout the fall to discuss association activities, initiatives, concerns, communications and more. These meetings are extremely fruitful as they provide an opportunity to learn from and brainstorm We focused this year’s agenda on industry updates, association activities and providing an update on the status of electronic titling and registration. WORKING HARD AND SUPPORTING DEALERS with my peers across the country who are leading their state and metropolitan associations. We have also been busy forming new partnerships with various vendors who we believe offer the best and latest in products and services that can benefit your dealership. I cannot stress enough how important it is that you check out these KADA-vetted partners. Not only do we believe they offer the best in the industry, but by supporting them, you are supporting your association and, therefore, your business. Our Annual Golf Tournament in September was a huge success, and I’d like to thank our dealers and vendor partners who came out. You can see more highlights from the event on page 10. By the time you read this, our KADA District Meetings will have ended, but we have been busy preparing for these. We focused this year’s agenda on industry updates, association activities and providing an update on the status of electronic titling and registration. Not only do these meetings present a chance to build personal relationships with local legislators, but they are a chance to understand the issues affecting our industry, learn more about the association and engage with fellow dealers. As the 2024 Legislative Session nears, these district meetings are vital to ensuring we have a clear, consistent and prominent voice. As always, I encourage you to be active and participate in these meetings and events. Your support truly makes all the difference. Onward! Jason Wilson 6 KENTUCKY AUTO DEALER

KADA LEGISLATIVE RECEPTION February 7, 2024 5:30 PM-8:00 PM The Foundry on Broadway, Frankfort Registration details to follow. 2023 KADA EXECUTIVE COMMITTEE JOE CUMMINS CHAIRMAN DON FRANKLIN AUTO GROUP DAVID MOORE CHAIR ELECT MOORE FORD CHRYSLER CENTER ROB MARSHALL VICE CHAIR MARSHALL AUTO GROUP RAY COTTRELL, JR. TREASURER RAY’S FORD CHRYSLER DODGE JEEP RAM NANCY SPARKS PAST CHAIR KERRY AUTOMOTIVE GROUP KIM HUFFMAN PAST CHAIR NEIL HUFFMAN AUTO GROUP CARL SWOPE PAST CHAIR SWOPE FAMILY OF DEALERSHIPS SHANE COLLINS PAST CHAIR BILL COLLINS FORD JIM REYNOLDS PAST CHAIR WALTERS AUTO GROUP DAN RENSHAW NADA DIRECTOR RENSHAW AUTO GROUP SAVE THE DATE WWW.KYADA.COM 7

CHAIRMAN’S MESSAGE JOE CUMMINS Dear Kentucky dealers, With a tight Governor’s race ahead, it is more important than ever that we are active and engaged. We’ve had much success over this last General Session, enacting policy that further strengthens and protects franchise dealers’ rights. We were able to ensure that manufacturer direct sales are prohibited, retail reservations must be assigned to dealers, military members do not need a Kentucky driver’s license to register a vehicle in the state and much more. We also look forward to seeing our Modernization Bill in full effect very soon and, with that, the digitalization of titling and registration in Kentucky. All these achievements were only made possible through your support, participation and KADET contributions. Our industry and business constantly face threats. Securing pro-business and pro-dealer policies takes hard work, and it’s a fight we can’t win unless we have your investment to help elect and support legislators who care about our industry. Every role in the dealership is impacted by these political decisions, and it’s why we ask that you encourage your staff to contribute to our KADET fund. Whether it’s general managers, dealer operators, parts and service directors, finance and insurance managers or used/new car managers, everyone can play their part. As new laws and regulations decide the future of our trade, we also look to our next generation of car dealers for support and participation. THE IMPORTANCE OF OUR KADET FUND So, if you haven’t donated yet, please donate today and encourage those in your dealership to donate as well. And if you have contributed but not the maximum of $2,000, please consider doing so. If you have already contributed, thank you very much for your support. Our automotive industry creates jobs, boosts community involvement and charitable support and drives the economy. We need legislators in office who understand all that we contribute to the state of Kentucky and who support our businesses. Thank you for your support, Joe Cummins KADA Chairman Don Franklin Auto Group Every role in the dealership is impacted by these political decisions, and it’s why we ask that you encourage your staff to contribute to our KADET fund. 8 KENTUCKY AUTO DEALER

CONTRIBUTE TO KADET TODAY! With a tight Governor’s race ahead, we need to be engaged now more than ever. Our industry faces constant threats, and only through having a strong, unified voice can we successfully protect and propel our business. Building and maintaining relationships with the legislators who represent you in each of your districts is how we are able to achieve this. Which is why we ask that you please consider donating to our KADET fund today. For more information about contributing to KADET, contact Melissa Peach at mpeach@kyada.com. THANK YOU TO THOSE WHO HAVE CONTRIBUTED SO FAR THIS YEAR! Below is a list of KADA’s President’s Club members: PRESIDENT’S CLUB — $2,000 Joe Cummins Nancy Sparks Tim Sparks Kim Huffman David Moore Joe Cross Vickie Fister Dan Renshaw Bill Cole Dwain Taylor Ray Cottrell, Jr. Dann Hughes Tim Kanaly Rob Marshall Trey Marshall Mike Hyde Jeff Eickholz Fred Tolsdorf Tammy Coats Mark Pogue David Daunhauer Bob Hook III Kevin Collins David Jaggers Tammy Goodwin Tim Short Carl Swope Tom Gill John Zimmer Jack Kain Larry Craig Todd Justice Travis Flaherty Ed Hyde Gary Haupt NEXT GEN PRESIDENT’S CLUB — $1,000 Alex Pogue Tyler Jaggers Phillip Gill Deborah Renshaw Parker Please scan the QR code to donate today. https://kentuckyautodealerskyassoc.wliinc33.com/events/ GIVE-TO-KADET-PAC-CAMPAIGN-42/register WWW.KYADA.COM 9

Congratulations to all the winners! 1st Place Shawn Parker Bob Barnard Austin Napier Preston Watkins 2nd Place George Hernandez Michael Crouse Jim Cullen Mark Johnson Closest to the Pin Matt Mutchler Longest Drive Shane Bigelow Longest Putt Michael Marrah ANNUAL KADA GOLF TOURNAMENT Thanks to everyone who came out for our Annual KADA Golf Tournament! We had a blast on the green with our dealer members and vendor partners! 10 KENTUCKY AUTO DEALER

This event is a blast every year and a great opportunity to network with dealers and vendor partners. We encourage you to attend and invite members of your staff! WWW.KYADA.COM 11

Plan ahead for your dealership’s long-term legacy Setting up a succession plan is an important consideration for the future of your dealership. Now’s the time to think about your priorities, such as maintaining control, taxes, liquidity, employees and family. What would you like the power to do?® Learn more with our comprehensive overview of Dealer Financial Services Succession Planning at business.bofa.com/dealer. “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: | Are Not FDIC Insured | Are Not Bank Guaranteed| May Lose Value | ©2022 Bank of America Corporation. All rights reserved. 4882341 05-22-0512

In business, as in life, there are some things you can control and others you can’t. However, there are many controllable aspects of your dealership. For example, you can control how you spend your time, allocate your resources, respond to challenges and obstacles, and the suppliers you choose as partners to propel your success. Cycles Are Inevitable The automotive industry goes through cycles just like other industries. In 2019, dealers sold over 17 million vehicles. In 2020, it was less than 14.5 million vehicles. The number fell even lower in 2022 to less than 13.9 million. We’ve seen this before and know sales and service will pick up. The best thing you can do is get deep processes in place so your dealership can grow when sales rebound. A finely tuned service department can pick up the dealership. Warranties matter because they impact service revenue. When fewer vehicles are fixed, maximizing the profit margin for each repair is more important than ever. Payroll and Process Hold Hands This is worth discussing. If you make the process efficient now, you can keep your overall payroll smaller and may not need to hire anyone later. Having your house in order helps you avoid having to hire unneeded staff during the rebound, which can maximize your margin of profitability. Why Dealers Need a Warranty Service Partner No matter how successful you think your dealership is, you can strengthen it by looking at processes and training employees. Employees should know what matters and how they contribute to the dealership’s success. Understanding their role helps them to feel part of the bigger picture. This strengthens your culture and can help reduce turnover. Dealers who ignore issues with efficiency or timeliness hurt their dealerships in multiple ways that can affect their dealership’s longevity. First, managers need to know which processes are working or failing. Revenue can decrease if a manager cuts costs without understanding which costs grow revenue. For example, a manager might not realize a highly paid employee’s value in lifting the entire service department and training younger, less experienced employees. Being well-paid doesn’t equal being overpaid. Second, dealers sometimes expand their payroll instead of maximizing their margin within the service department. Many people play a role in the life cycle of a warranty claim. Since people compensate for inefficiencies with workarounds, the results can affect the whole service department adversely. Hiring more people instead of improving the process costs you hard dollars and lets the service department continue to be inefficient. Increasing the profit margin is smarter than spending money unnecessarily; also, maximizing your margin when it is harder to make a profit will serve as preparation to grow profits more efficiently later. To improve how your dealership works, evaluate and improve the quality of your business decisions. Running a dealership is complicated. Getting knowledgeable and objective advice from outside the dealership can help you examine and improve your business’s processes. Your goal should be to capture every warranty dollar, but you must be granular to do that, and a General Manager’s job is typically not granular in that department. Instead, hire a warranty company to act as your partner. What the Right Partner Should Do A warranty partner can get receivables flowing and protect your dealership from audit problems, but they don’t just lift warranty claims. A good one boosts the service department by making it unnecessary for the service manager to spend time in the weeds. They also help the team work together more efficiently. Tech enablement is important on the fixed operations side of a dealership, but deep tribal knowledge and an equally deep understanding of data are also important. The warranty company helps the service manager focus on growth by fixing processes and providing insights and information. Owners and General Managers often don’t have a front-row seat to the intricate details that get and protect CONTROL WHAT YOU CAN By Justin Carr, Warranty Processing Company WWW.KYADA.COM 13

the money on a warranty repair. Although state laws are being implemented to combat dated factory policies, dealerships should not solely focus on getting a labor rate and parts markup increase. These types of increases will certainly help the bottom line, but are they being as impactful as they could be? Some dealers don’t maximize the warranty to include items like rentals, test drives, or any additional work that needs to be done so the repair is handled correctly the first time. They may skip signing and approving add-ons, which could ultimately result in you losing that money down the road. Sometimes employees leave items off claims because they don’t know how to get an advanced repair order paid. Teach them. Checks and balances in the warranty process are important to maximize repair orders. Adjustments that appear on the warranty schedule are not necessarily a bad thing. Imbalances are an opportunity to gain knowledge, fight for additional dollars and make corrections to processes or systems that improve efficiency. Too many dealers are submitting repair orders to the manufacturer before they are closed to the DMS system. Once they are paid, they are closed to the DMS for that amount. How can you ensure that you have collected every dollar in that process? What is your tool to monitor progress? In the previously mentioned scenario, there is nothing on the schedule that would show you that a rental was left off or a part was marked up incorrectly. It also creates risk and potential audit liability. Was a recurring problem not identified? Are you giving the manufacturer just reason to recapture your legitimate dollars stating that a repair didn’t follow policy and procedure? Be conscious that you are getting all the dollars the manufacturer will pay, and avoid closing repair orders after the manufacturer has released the credit statement. Audit each claim to ensure it complies with the policy and procedure, and nothing is missing. Ensure all codes are applied, identify and understand all variances before reconciling the differences and update everything daily. It is easy to keep a schedule clean and running clean when you touch it every day. When warranties fall behind, they become a mess. When that happens, the work it takes to clean them up is extremely time-consuming and can involve many staff. By controlling the things you can, you make it easier to achieve your goals and objectives. You also minimize the risks associated with uncertain or uncontrollable factors. The right warranty company can help you create a clean, complete process. Justin Carr is a VP at Warranty Processing Company, which recently relocated to Texas. Justin works with dealers nationwide to increase efficiency within service departments and educates dealer staff on why efficiencies matter. To learn more, please visit warrantyprocessing.com. Contact us today to place your announcement ad 14 KENTUCKY AUTO DEALER

Find your new lending partner today. Andrew Carman andrew.carman@gecreditunion.org 513.577.8807 Voted Cincinnati’s Best Credit Union for a fifth year. Helping you to finance them In our line of business, partnering with a dealership is something we don’t take lightly. General Electric Credit Union (GECU) has proudly served the Greater Cincinnati Tri-State area for nearly 70 years, financing nearly $6 billion in auto loans in the last five years—and we are just getting started! We’re excited to come to the heart of the Bluegrass state as our dedicated team understands where you want to go, and we do it all with you in mind. Experience the GECU difference. Insured by NCUA | Equal Opportunity Lender

under a DHS-authorized alternative procedure rather than via physical examination. DHS also reduced the length of the Form I-9 Instructions from 15 pages to eight pages and streamlined the steps each actor takes to complete their section of the form, among other changes. Qualified E-Verify Employers May Remotely Examine Form I-9 Documents Under current Form I-9 rules, employers are required to physically examine an employee’s original identity and work authorization documents. DHS has now created a separate framework to authorize alternative document examination procedures as an optional alternative to the in-person physical document examination method. The first alternative DHS authorized is an option for qualified E-Verify employers to remotely examine identity and work authorization documents beginning on August 1. Qualified E-Verify employers are those employers who are in good standing with E-Verify, have enrolled in E-Verify with respect to all hiring sites that use the alternative procedure and comply with all E-Verify requirements. If a qualified employer chooses to offer the alternative procedure to new employees at an E-Verify hiring site, they must do so consistently for all employees at that site. However, dealers may choose to offer the alternative procedure for remote hires only and continue to apply physical examination procedures to all employees who Federal immigration officials just made critical changes to modernize the I-9 employment verification process. The new Form I-9 was made available for employers to use beginning August 1, and all employers must use the new form by November 1. Here are best practices for compliance, given the new rules soon in effect. DHS Makes Changes to the Streamlined Form I-9 The new Form I-9 has been available for dealers to use beginning August 1. However, dealers must use the new form by November 1. The full list of DHS’s changes include: • Reduced Sections 1 and 2 to a single-sided page by merging some fields; • Moved the Section 1 Preparer/Translator Certification area to a separate, standalone Supplement A that employers can provide to employees if needed; • Ensured the form can be filled out on tablets and mobile devices; • Ensured the form can be downloaded easily and removed the requirement to enter “N/A” in certain fields; • Revised the Lists of Acceptable Documents page to include some acceptable receipts, as well as guidance and links to information on automatic extensions of employment authorization documentation; and • Added a box that eligible employers must check if the employee’s Form I-9 documentation was examined DEALERSHIPS MUST USE NEW FORM I-9 BEGINNING NOVEMBER 1 By Matt Simpson, Fisher Phillips 16 KENTUCKY AUTO DEALER

work onsite or in a hybrid capacity, so long as they do not adopt such a practice for a discriminatory purpose or treat employees differently based on their citizenship, immigration status or national origin. A qualified E-Verify employer may continue to examine documents physically instead of remotely. Additionally, dealers must allow employees who are unable or unwilling to submit documentation using the alternative procedure to submit documentation for physical examination. Requirements of the Alternative Document Review Procedure Within three business days of an employee’s first day of employment, a qualified E-Verify employer (or an authorized representative acting on the employer’s behalf) who chooses to use the alternative procedure must: • Examine copies (front and back, if the document is two-sided) of Form I-9 documents or an acceptable receipt to ensure that the documentation presented reasonably appears to be genuine; • Conduct a live video interaction with the individual presenting the document(s) to ensure that the documentation reasonably appears to be genuine and related to the individual. The employee must first transmit a copy of the document(s) to the employer (per Step 1 above) and then present the same document(s) during the live video interaction; • Indicate on the Form I-9, by completing the corresponding box, that an alternative procedure was used to examine documentation to complete Section 2 or for reverification, as applicable; • Retain a clear and legible copy of the documentation (front and back, if the documentation is twosided); and • Create an E-Verify case if the employee is a new hire. DHS Provides Relief for Certain Employers Enrolled in E-Verify During COVID-19 Flexibilities Perhaps the most significant development was the alternative solution DHS offered qualified employers who were left with an arduous task of bringing in all the employees they hired remotely during the COVID-19 pandemic to review their original documents and annotate their I-9s by the August 30 deadline. Qualified E-Verify employers can use the alternative procedure to satisfy the required physical examination of an employee’s documents for that Form I-9 if the dealer: • Was enrolled in E-Verify at the time they performed a remote examination of an employee’s Form I-9 documentation for Section 2 or reverification while using the COVID-19 flexibilities; • Created an E-Verify case for that employee (except for reverification); and • Performed the remote inspection between March 20, 2020 and July 31, 2023. These dealers should not create a new case in E-Verify. All qualified employers that use the alternative procedure instead of physical examination as described above must follow the steps of the alternative procedure and add “alternative procedure” with the date of examination (meaning the date the employer performed a live video interaction as required under the alternative procedure) to the Section 2 Additional Information field on the Form I-9 or in Section 3, as appropriate. WWW.KYADA.COM 17

7 POWERFUL VEHICLE ACQUISITIONS TACTICS THAT WILL BOOST YOUR PROFITS Compared to this time last year, inventory levels continue to improve. But we’re still not back to the number of available new and used vehicles pre-pandemic. Thankfully, there are always new tactics you can implement to help to improve your dealership’s ability to acquire the right vehicles, at the right price. Here are seven that will keep your lot stocked with fresh vehicles in the months to come. TACTIC #1: Use the Power of “Why Sell” During the height of the inventory shortage, as retail prices on used inventory soared, many consumers took advantage of favorable market conditions to consolidate the number of vehicles in their family fleet while improving their financial position at the same time. This shift in selling intent was clearly observable when looking at search trends for keywords like “sell my car” and “sell my car for cash today.” When we fast forward to today, this trend isn’t slowing down. Search volume for related keywords is still elevated well above pre-inventory shortage levels. That’s why it’s important not to focus your marketing and messaging on just “trades.” When you leave out the option for consumers to sell their car to you without buying one, you’ll be missing a key opportunity to acquire additional inventory. Be sure to keep your dealership top of mind for consumers offloading their current ride by combining a connected marketing campaign with your unbeatable local selling experience. TACTIC #2: Maximize Trade/Sell Engagement on Your Website If you want your website visitors to know your dealership will buy their car, you have to tell them. So, back up and amplify your “why sell” message on your website and other marketing channels. Overall, you want to highlight the benefits of trading or selling a car to your dealership. Be sure to include details like providing a guaranteed offer, avoiding the hassle of private sales and saving time and money. On your website, your trade/sell messaging should be front and center, making that experience only a click or tap away. Additionally, make sure to maximize your impressions by linking your trade/sell landing page to your main menu, and don’t forget to place a prominent CTA above the fold on your homepage. TACTIC #3: Provide Consistent Values Across Your Platform With the proliferation of trade-in, digital retailing and chat widgets being mixed and matched on dealer websites, a growing problem has emerged where consumers receive different values for their vehicle on your website depending on the experience they’re using. For example, you may have a trade-in widget embedded on a landing page that provides an estimated value range for a vehicle. But the trade-in phase of your digital retailing tool uses a different source of data, resulting in an alternate value provided for the same vehicle. You’ll build trust by providing a consistent appraisal experience across your website platform. In turn, you’ll increase your chances of acquiring more vehicles. Take action by appraising a personal vehicle using the same tools on your website that your By Brian Kramer, Cars.com 18 KENTUCKY AUTO DEALER

consumers use. Are you getting matching values across your different tools, or do they differ depending on the experience you’re using? TACTIC #4: Optimize Your Trade-In Page for Local SEO When you turn to Google to search using keywords related to selling or trading in a vehicle, you’ll typically find that a majority of the organic results belong to the big-name brands in auto. However, if you look closely, you’ll see that Google also will provide searchers with links to relevant local dealerships on the first page of results and in the map pack, if you have relevant content published on your website. It’s not enough to embed your trade-in tool on a basic landing page and expect it to be enough to crack the rankings by itself. You must also optimize and add content to that page that explains your process, and share your message of a local, quick, convenient and trustworthy experience. TACTIC #5: Market Your Experience Online Once you’ve refined your trade/sell message and have optimized that experience across all areas of your website, now it’s time to go to market with a strong message targeted to local consumers looking to maximize the value of their vehicle. You’re probably already running search engine marketing campaigns for your inventory, name and/or location; but do you have a campaign set up specifically for vehicle acquisition? With the majority of searches taking place on mobile devices, it’s hard to ignore the fact that the first one or two screens of the search results are sponsored listings. So even if you have an optimized trade/sell landing page that ranks organically, you still want to be able to catch a consumer’s attention right from the start with a well-placed ad and with your dealership’s value propositions. For the biggest impact, look to increase your trade/sell reach by utilizing your other marketing channels like display, social and video to ensure that you’re sharing your message with local in-market consumers during all stages of their journey across platforms and devices. TACTIC #6: Get Trades from Traditional Ads Just as the inventory shortage was brought about by the pandemic, so was the accelerated adoption of technology that changed consumer behavior. One such technology is the QR code, which had been largely overlooked for a decade, but now has become a common feature in our daily lives. If you want to make sure you’re giving your dealership every opportunity to acquire more cars, use QR codes in your newspaper, direct mail and TV advertising. When scanned, they’ll lead a consumer directly to the trade/sell experience on your website. QR codes not only create engaging offline-to-online experiences, but they also provide a better insight into the ROI of your traditional advertising campaigns — which historically has been challenging to prove. TACTIC #7: Future-Proof Your Follow Up It’s important to understand that all the opportunities in the world to acquire a vehicle won’t mean a thing if you haven’t developed a specific follow-up process for your dealership. Too often, a trade or sell lead gets treated just like any other sales opportunity. It hits the CRM, and then a salesperson or BDC agent picks up the phone to give them a call. More often than not, they leave a voice message, and then the CRM automated email follow-up process kicks in for the next 90 days. As fewer people answer phone calls from unknown numbers and email continues to become less urgent for consumers to check regularly — texting has become the best way to follow up with all of your leads to get an immediate response. Closing Thoughts No matter how your dealership’s inventory is being affected by industry trends, there are always ways to enhance your vehicle acquisition process. Start by looking for simple ways to improve the tactics you’re already embracing. If you don’t see the level of results you want, try one (or all) of these tactics that you haven’t used before, and watch how it will make your acquisition operations more effective for today, and the future. WWW.KYADA.COM 19

REMAINING COMPETITIVE IN THE CAR BUSINESS Professionalizing the Family-Owned Auto Dealerships By Kendall Rawls, The Rawls Group The Importance of Professionalism in Family‑Owned Auto Dealerships In the current corporate landscape, family-owned enterprises are facing challenges as they vie for success against bigger conglomerates and nationally recognized brands. In the automotive industry, where consolidation is prevalent, family-owned dealerships are under significant strain to keep pace with their larger counterparts and stay relevant. One viable solution for familyowned dealerships to gain a competitive advantage is to adopt a more professional approach to running their business. The Role of Culture in Family-Owned Auto Dealerships Successful family-owned dealerships or auto groups often neglect formalities that can lead to problems such as nepotism, inconsistent policies and toxic family/business interactions. These issues can have a negative impact on performance and drive away valuable talent. Without top talent, family business owners will struggle to stay competitive, and the value of the business will decline rapidly. To remain competitive and grow the business, it is crucial to create an attractive culture that retains employees and customers while also performing well. The Unique Advantage of Family-Owned Auto Dealerships At the NADA 2023 “Growth Strategies for the Family-Owned Business” workshop, Champ and Kendall Rawls discussed a unique approach for family businesses to succeed. Rawls suggested keeping the “family” aspect in a family-owned business as it can provide a competitive advantage over private and public companies. Additionally, leveraging the existing name recognition in the community can be beneficial. To achieve success, it is essential to promote your dealership(s) as a local family-owned business while also incorporating the formalities of successful mega dealers and public companies. This approach can help maintain the family aspect while still achieving growth and success. Strategies for Professionalizing Your Family-Owned Auto Dealership Elevate the professionalism of your business by formulating, systematizing and transmitting your fundamental values. Construct a purpose statement, a future outlook and objectives and ensure that you and your team adhere to these indispensable principles. By applying this methodology, you can rest assured that your family enterprise will not only endure but also prosper. The Benefits of Professionalizing Your Family-Owned Auto Dealership To professionalize your family business, it is advisable to develop job descriptions for all positions, identify and adhere to core values, and establish standardized processes and procedures. This approach will result in increased efficiency and effectiveness in running your business and also position your business as one that values its employees and customers, thereby standing out in your community. “Professionalizing” your family business will mitigate emotional distractions allowing your people to focus on the purpose of their positions. By professionalizing your business, you are also building value in your business, which will support your long-term growth and succession strategy. I am extremely excited to share with you our passion for growing sustainable family businesses. Consider the following as it relates to achieving your family and business vision. 20 KENTUCKY AUTO DEALER

8 Steps for Creating a Growth & Succession Strategy 1. Determine your vision. Your vision may be to get out of day-to-day so you can focus on strategic growth and mentoring, to spend more time on hobbies and less time at work, or a combination of both. Whatever it is, it will involve some form of growth and change. • What is the WHY behind what you are doing now and what you want to be doing in the future? • Where do you see yourself in the next 5-10 years? 2. Share your vision with your trusted advisors. • Lean on expert advisors and trusted leaders to provide perspective and support based on where you want to go. Business, personal and family success is not a solo endeavor; it requires a team effort. 3. Evaluate who and what will be impacted based on where you are now and where you want to grow and transition into. • What resources do you need? • What infrastructure is required? 4. Develop a strategy with your team of advisors and key leaders to achieve your vision. • How will you develop or acquire the resources needed? • What is your one-year, two-year, three-year strategy? • Who is driving each project and how frequently will you meet to review the strategy? 5. Consider the possible, probable and potential issues that can impact achieving your vision such as: • Unexpected health scare or death of the owner/key leader • Inflation, recession, supply chain, technology, political or regulatory issues • Conflict with business partners • Family issues influencing or impacting business decisions • Issues with strategic vendor(s) impacting business performance 6. Develop A, B, and C plans, considering your strengths, weakness and outside opportunities and threats; so no matter what is thrown your way, you have options to fulfill your vision. 7. Lean on your team of expert advisors to educate you so you can make well-informed decisions. 8. Re-evaluate your vision and proceed where necessary through steps one through seven. Kendall Rawls knows and understands the challenges that impact the success of a family-owned business. Her unique perspective comes not only from their educational background; but, more importantly, from her experience as a second-generation family member employee of The Rawls Group — Business Succession Planners. For more information, visit seekingsuccession.com or email info@rawlsgroup.com. WWW.KYADA.COM 21

WHY WAIT? How Evaluating Your Dealership Can Help Your Business. By Maxime Theoret, CPA and Managing Partner & Jennifer Rafael, Vice President and Partner at DSMA We all know someone who waited until the last minute to get a service they needed: car insurance, that warrantee on their largest appliance or a list of valuable items they would like insured in their home. And what did they wait for? A car crash, a fridge malfunction or a flood. Well, we feel the same way about your dealership evaluation. The time to have it conducted is when things are going smoothly — we believe that there is no need to wait until an interested buyer knocks on your door (or your literal roof caving in) to know your business’ worth. So, let’s go through this question together: Why now? Your Dealership’s Biography Having a true thousand-mile view of your dealership’s financial health and capability can act as a dashboard for your business, help you know where you are now, and more importantly, where you are going (or can go). From the value of the brick & mortar to the KPIs that make up your dealership’s bottom line. A true deep dive under the hood allows you to diagnose areas that you may want to pivot (or preserve) to reach your business’s fullest potential. Waiting for your next 20 Group to know where you need to improve no longer needs to be the norm. Imagine a dedicated evaluation report with all the metrics to help you make informed decisions for the future with complete confidentiality. We’re living in an era where you can assess the health of your vehicle with a few touches on your infotainment system; assessing your dealership’s financial health can be just as efficient. No Surprises Assessing your business regularly is a lot like having your car serviced: no one wants unpleasant and costly surprises. A dealership evaluation is a preventive exercise that allows you to analyze areas of improvement and the good practices of your dealership. It’s an exercise that highlights performance but also areas where your business can do better. This in-depth analysis of your dealership’s activities also allows you to detect business trends that you may want to pursue or improve, especially if you feel short-changed by your fiscal year (we know you’re thinking of your tax return as you read this). In short, this one- to two-week exercise will allow you to take stock of your business from every angle. Be Better Equipped for Short, Medium and Long-Term Planning Are you thinking of expanding your portfolio or maybe retiring? No matter what stage of your professional life you are in, an annual business valuation is an indispensable tool for clear and precise planning of your business activities. Anthony Codispoti, DSMA Manager of Valuations, notes that among the thousands of appraisals that have been performed over the past decade, there have indeed been several instances in which results showed a 20-30% difference in value from what a dealer thought their dealership was worth. Such a difference, whether higher or lower than expected, can paint a clearer picture of what your fiscal future will look like. So, whether you are creating a succession plan for the next generation or seriously thinking of business growth, both projects could be greatly enhanced with a little preparation — and additional information. Don’t Underestimate the Power of a Balance Sheet Thanks to the rising inflation rates, a clear and precise balance sheet of your business is crucial when negotiating. Indeed, dealership transactions can be quite complex, and the current economic climate (inflation, brink of recession, etc.) unfortunately further complicates negotiations. This is why a dealer in expansion mode should know their business inside and out. A balance sheet is your best asset when approaching investors and financial institutions in order to accomplish your next acquisition goal. In the same breath, a dealer wishing to sell will equally be much better equipped to deal with potential buyers when knowing the exact net worth of their business. Proactive + Prepared = Peace of Mind Don’t wait for a crash in the industry to act. By conducting a regular valuation of your dealership, you are being proactive. Such preparedness shows that you are ahead of the curve. Proper knowledge of your dealership’s accurate value will help you deal with various industry crises ... or, better yet, prevent them. And you know who loves to see that? Financial partners. Prepare for the Unexpected Although grim topics, when faced with a separation, divorce, or even death, dealers or their teams often find themselves completely rushed and in no state to evaluate their business. These unexpected events can occur at any time on a personal level and can greatly affect the day-to-day operations of your dealership. If this happens, having an accurate assessment of your business can help you maneuver challenging times and even protect your estate in the event of your death. Maximizing Your Dealership’s Value Lastly, you can’t grow your dealership without knowing its true value. Make sure you partner with experts who can appraise your dealership and give you an accurate representation of your business’s value on the market. So, we ask you again: What are you waiting for? At DSMA, we have the certified staff and sophisticated tools to accurately value all vehicle dealerships, regardless of their market or location. We use QUOTUS™, a confidential and secure digital platform we’ve developed internally over the past few years, which allows us to evaluate a dealership in every respect — with the most precise data on the market. It is the most reliable automotive market intelligence in North America, which allows you to maximize the value of your dealership. This tool benefits not only automotive dealers but everyone in the motorcycle, heavy truck, agriculture, marine and heavy vehicle industries. Please contact Jennifer Rafael, Vice President and Partner at DSMA at (312) 927.9561 or Jennifer.rafael@dsma.com or visit dsma.com to learn more. 22 KENTUCKY AUTO DEALER

EXPLORE THE DNA OF DSMA GREG BROWN M&A Associate greg.brown@dsma.com JONATHON MORONI Business Development Manager jonathon.moroni@dsma.com ENGINE OIL IS IN OUR DNA. • Largest automotive M&A team in North America • 97% of deals sold at asking price or greater • 1700+ dealership valuations • 425+ sold transactions Automobiles are in our blood. That’s why clients put their trust in us when they are ready to buy or sell a dealership. Work with someone with the same bloodlines. Hire DSMA. BUY AND SELL WITH CONFIDENCE JENNIFER RAFAEL Vice President, Partner jennifer.rafael@dsma.com OUR MIDWEST TEAM Visit DSMA.com/Midwest for details. Contact us today to recieve a complimentary initial consultation.

KADA PREFERRED PARTNER PROGRAMS Kentucky Automobile Dealers Association (KADA) is pleased to recommend a broad range of products and services aimed at controlling expenses in every facet of the dealership. The following products and/or services are recommended by the association’s Board of Directors and endorsed through the association. These vendors are reviewed periodically to ensure the quality of products and services meet the needs of our dealers and can provide special pricing through group buying. Dealer Online Platform Tom Rodriguez, (352) 931-1318 torodriguez@acvauctions.com Workers Compensation John Foresman, (502) 489-6255 jforesman@uscky.com Security Software & Services Scott Hudson, (513) 520-4187 scott.hudson@aura.com Dealership Supply Needs Chris Haas, (513) 772-2886 chaas0906@gmail.com Warranty Parts & Labor Reimbursement Leonard Bellavia, (516) 873-3000 lbellavia@dealerlaw.com Electronic Titling & Registration LT Slater, (216) 392-0695 LT@champtitles.com Complete Set of Solutions for the Auto Dealers Polly Penna, (303) 981-1298 polly.penna@coxautoinc.com Cybersecurity Compliance Sherryl Nens, (661) 210-3453 sherryl@complyauto.com Automotive Compliance Solutions Josh Koronich, (614) 325-0217 josh.koronich@comply.net Customer Engagement Technology Aris Woolfolk, (757) 814-0248 awoolfolk@digitalairstrike.com 24 KENTUCKY AUTO DEALER

Dual Price Strategy Technology Amberly Joseph, (817) 404-9253 amberly@dealermerchantservices.com F&I Products & Services Brad Geren, (502) 472-3671 bgeren@dpg-inc.com Todd Howard, (859) 382-3252 thoward@dpg-inc.com Kevin Voges, (812) 204-2251 kvoges@dpg-inc.com Larry Dorfman, (404) 732-5910 ldorfman@easycare.com Group Health Insurance & Voluntary Benefits Colin Royster, (804) 545-3013 croyster@integrumadvisors.com Ben Hoffman, (804) 357-6004 bhoffman@integrumadvisors.com Lawyer Accountant Brokerage Leonard Bellavia, (516) 873-3000 lbellavia@dealerlaw.com Settlement Recovery Services Kimberly Johnson, (818) 640-3164 Kimberly.johnson@mcaginc.com Service Department Products & Programs Robert Buffington, (859) 240-2989 rbuffington@mocmidatlantic.com NADA Retirement Program Jeff Liwacz, (609) 529-3546 jeff.liwacz@empowerretirement.com Kentucky F&I Forms Library Rose Pottkotter, (567) 279-3573 RoseMary_Potter@reyrey.com Mobile Learning Platform Jay Petznick, (816) 896-4587 jay@rocked.us Automotive Finishes Patrick Shaw, (859) 509-0382 patrick.shaw@sherwin.com Financial Wellness Platform Danijel Velicki, (757) 995-3134 danijel@getsqwire.com Matt Ridjaneck, (757) 355-2242 matt@getsqwire.com Electronic Vehicle Transactions Dave Spencer, (916) 857-6063 dspencer@vitu.com WWW.KYADA.COM 25

JUNE 17-19, 2024 The Sandestin Golf and Beach Resort Miramar Beach, FL MARK YOUR CALENDARS FOR OUR 2024 KADA FAMILY CONVENTION! Stay tuned for registration details. MATH PROBLEMS AREN’T THE ONLY PROBLEMS WE SOLVE. LET US SOLVE YOURS. It’s impossible for a business owner to foresee every challenge a business will face or to know how to respond to every situation. At Bowden & Wood, we can offer you many standard solutions to your problem, or we can develop some more creative solutions when the standard answers won’t cut it. » Advisory » Strategic Planning » Buy/Sell Consulting » Retirement Planning » Audits and Reviews » Financial Statements » Taxes » Accounting and much more! (502) 583-0262 info@bowdenandwood.com bowdenandwood.com CALL OR EMAIL US TODAY. Kentucky Horsepower is the official podcast of the Kentucky Automobile Dealers Association. Scan the QR code to listen to the latest news and current events related to the automotive industry. https://kentuckyhorsepower.buzzsprout.com/ 26 KENTUCKY AUTO DEALER

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