Certified Automotive Remarketer (CAR)

UNIT: Remarketing Channels
COURSE: CAR-1 Selling to Lessee/Driver/Employee

Course Purpose

Includes defining and describing each available vehicle remarketing channel, including driver/lessee, employee/associate, direct-to-dealer, online auction, physical auction and other specialty sales and/or markets.

Learning Objectives

At the completing this course, the CAR candidate will be able to:

1. Describe:
   • Issues involved in remarketing vehicles upstream to drivers and employees.
   • Advantages and disadvantages of the remarketing channel.
2. Describe:
   • Driver Sales - Should fixed or condition-based pricing be used for drivers or employees? Should an inspection be required before a driver is given the price/opportunity to purchase a vehicle scheduled for turn-in? In the upstream process, should the driver have exclusive right to purchase a turn-in vehicle before fellow employees? If there is a period of exclusivity, how long should it last? What repairs/maintenance should be allowed on a vehicle that is to be offered to a driver? How does a company deal with unreported vehicle damage revealed after an upstream inspection?
   • Employee Sales - At what point in the upstream process, and for what duration, should a vehicle be offered to the greater body of employees? What issues must be considered in pricing vehicles to employees versus current drivers? What special requirements are required to offer vehicles to company employees, as opposed to a sale to a current driver/operator? What are the proper ways to offer the availability of company-owned or leased vehicles to the greater body of employees? What precautions must be taken before vehicles are made available? How can a company or lessor leverage the Web and interactive marketing to increase sales penetration?
   • Warranties and Product Liability - In selling vehicles to drivers and employees, what warranties are mandated and/or appropriate? How can a company mitigate the liability normally vehicle condition? Does the company have liability for accidents if the vehicle is defective? Is the company liable to repair or replace the vehicle if the vehicle is improperly described? Does the seller assume used-vehicle dealer liability in the state in which the vehicle is sold?
   • Finance and Insurance - In selling vehicles to retail buyers, albeit company drivers and employees, what role should offering dealer peripheral products (financing, service contacts, etc.) play? What liability does the company or lessor assume when selling or recommending third-party peripheral products? What agent-versus-principal issues in a transaction are invoked by driver and employee sales? Can the employer company sell vehicles to its drivers or employees directly, or must the employer use a corporate lessor and/or an intermediary licensed dealer?
3. Explain the strategies organizations employ in relation to the percentage of sales through this channel.
4. Recognize how market conditions and residual values may impact channel selection.
5. Identify strategies to benchmark sales results compared to other channels.

UNIT: Remarketing Channels
COURSE: CAR-2 Selling to Auto Dealerships (Consignment and Wholesale)

Course Purpose - Consignment

This course will enable the CAR candidate to describe the process whereby a consignor places a vehicle for sale on consignment at a dealership.

Learning Objectives

At the completion of this course, participants will be able to:

1. Explain the reasons why a consignor would place a vehicle on consignment at a dealership.
2. Describe the process of consigning a vehicle to a dealer.
3. Describe the details necessary to complete a successful consignment sale.
4. Describe key elements of the state laws and regulations governing used vehicle consignment sales.

Course Purpose - Wholesale

To acquaint the CAR candidate with the process of wholesaling a used vehicle to a dealer.

Learning Objectives

At the completion of this course, participants will be able to:

1. Describe the reasons for wholesaling to a dealer.
2. Describe the process involved in wholesaling to a dealer.
3. Explain the details necessary to complete a successful wholesale transaction.
4. Describe the possible criteria for proper dealer selection for the type of vehicle involved.

UNIT: Remarketing Channels
COURSE: CAR-3 Online Auction

Course Purpose

Learning Objectives

To define and describe the online auction channel in depth from consignment to sale completion, including auction type selection and methodology as well as the unique challenges of this channel (e.g., arbitration). At the completion of this module, participants will be able to:

1. Define and describe the various online auction types and methodologies:
   • Fixed Price - Buy Now
   • Open Bidding Combination - Open Bidding with a Buy Now Price North of the Reserve
   • Open Sales
   • Closed Sales
   • Dealer Only Sales
2. Identify and define the various policies surrounding online sales including terms of use, registration, payment, title, and arbitration policies.
3. Recall and explain the parameters of online selling including start and end times, proxy bidding, minimum bids, and bid history.
4. Identify and describe the sales process including inventory notification, documentation required for each transaction, and the post-sale activities such as payment, title transfer, and transportation to the buyer.
5. Explain and identify the unique challenges associated with online selling, including 24/7 support and arbitration policies.

UNIT: Remarketing Channels

COURSE: CAR-4 Physical Auction

Course Purpose

The CAR candidate will be able to describe all the functions and the processes that take place at a physical auction, starting with the assignment process of a vehicle to completing the sale and delivering the vehicle.

Learning Objectives

At the completion of this course, participants will be able to:

1. Explain both the used vehicle auction process and specialty sales physical auction process.
2. Describe the vehicle assignment and check in/receiving process.
3. Describe the preparation and reconditioning process.
4. Explain lot management, the sale lanes, and the order of sale.
5. Explain the auctioneer duties and the interaction with the buyer and seller.
6. Explain the arbitration process, “if” bids, open and closed sales, cross-line buying, promotions, and online sales.
7. Describe the documentation details necessary to finalize the sale and the arrangement of delivery transportation to the buyer.

UNIT: Pre-sale Activities

COURSE: CAR-5 Verification/Condition Reporting/Inspection Transportation/Grounding

Course Purpose

This course will provide the student with a thorough understanding of the identification, documentation, acquisition and transportation process involved in the pre-sale activity.

Learning Objectives

At the completion of this course, the CAR candidate will be able to:

1. Describe the methods and processes required to locate and take custody of a vehicle from the lessee.
2. Explain and/or describe elements of the condition reporting and inspection process, including:
   • The purpose of the condition reporting process.
   • Identify and describe the components of a quality inspection.
   • Describe the differences between wholesale and retail inspection reports.
   • Explain the factors affecting the cost of an inspection report.
   • Explain the value of a condition report as it relates to the remarketing process.
   • Recognize and describe the factors affecting the condition grade of a vehicle.
3. Describe the documentation necessary to support the acquisition process.
4. Identify transportation options and processes.
5. Describe auction arrival processes and documentation.
6. Explain the pre-auction sale documentation process.

UNIT: Pre-sale Activities
COURSE: CAR-6 Vehicle Reconditioning

Course Purpose

This program aims to provide the skills required for the participant to run a reconditioning program. The course will be geared toward fleet management/leasing companies, finance companies, and remarketing companies.

Learning Objectives

Upon completion of the course, the participant will have will have incorporated the skill set required to effectively manage a reconditioning program. Participants will learn when it is profitable to recondition a vehicle or sell it as is. They will learn how to restore a vehicle to its optimal salable condition. They will learn about the viability of vehicle condition reports. They will also learn about the importance of “appearance reconditioning” and “mechanical reconditioning” to enhance a vehicle’s resale value.

UNIT: Pre-sale Activities
COURSE: CAR-7 Lease Maturity

Course Purpose

This course will identify the skills required to effectively manage a lease end-of-term program. The outcome to be achieved varies from portfolio to portfolio, or client to client, predicated on the program goals.

The primary goal of the manufacturer/captive finance company is substantively distinct from that of the pure financial lessor. However, this course unit focuses on independent financial institutions. Their objective is portfolio profitability enhancement. To the extent that strategies employed in the lease termination program operate with this objective as the guiding principle, the opportunities to significantly influence the outcome exist. The course will allow the participant to develop a comprehensive understanding of the several potential paths lease maturity management may follow to effect the desired outcomes. This course is specific to closed end lease units. A different course will cover the process to sell to open-end units to drivers and employees.

Learning Objectives

Upon completion of the course, the participant will have incorporated the skills set required to effectively manage a lease end-of-term program. The participant will develop an understanding of specific achievable program outcomes based on the client or wholly owned portfolio goal.

1. The goal of the pure financial lessor - banks, credit unions, independent lease funding sources - is one that:
   • Mitigates potential losses that result from the exposure that may exist between the vehicle’s lease residual value and true market value.
   • Captures the equity when lease market value exceeds lease residual value.
   • The manufacturer/captive finance company’s primary goal, addressed in another unit of the course curriculum, is customer retention, influencing the lessee to consider a new vehicle purchase of the same nameplate or in the same family of nameplates. While mitigation of lease residual risk is important as a secondary goal, once the lessee indicates that he/she has no interest in purchasing their leased vehicle, the initial conversations typically address new -vehicle purchase, which is the manufacturer’s primary goal.
2. Case studies, accompanied by metrics, must be used to establish sensitivity to the influence of variables and become familiar with the exigencies of the marketplace. The specific skills set presented includes:
   • A description of the distinct differences between the goals of the pure financial lessor and those of the manufacturer/captive finance company.
   • Needs-based consultative sales skills.
   • An explanation of the impact of various offers and propensity to achieve each offer’s desired outcome.
   • Listening skills to address lessee desires.
   • To achieve desired program results, the strategies for the careful hiring for attributes, verbal and critical thinking skills, training for non-scripted interactive outcome-based dialog, honing and mentoring to enhance client or wholly owned portfolio performance, coupled with methodologies to enhance lease consultant retention.
   • Description of the holistic approach and tools necessary to effectively manage a client’s or wholly owned lease-end portfolio.
   • The ability to calculate the economic impact of each negotiation between the lessee and the lease maturity management consultant.
   • Recognition of the dynamic nature of lessee offers in response to the ever-changing marketplace realities, and the crafting of lessee offers that demonstrate value to the lessee.
   • Identification and discussion of alternative sales channels, including sale to lessee, pre-auction to the dealer upon grounding, sale via Internet sites, and traditional physical auction. Fixed price, bid sales, and negotiation strategies in one-on-one sales to the dealer will be addressed. The participant will be able to assess each distinct sales channel effectiveness, benefits, marketing methodologies, and benchmarking to ensure, on a portfolio basis, net sales price maximization.
   • The capability, flexibility, and capacity of the systems infrastructure required to effectively manage the lease maturity initiative.
   • Reporting necessary to demonstrate value of, and incremental return from, the lease maturity management program.

UNIT: Pre-sale Activities
COURSE: CAR-8 Marketing

Course Purpose

The purpose of this marketing course is to provide an insight and a comprehensive guide into what is necessary to develop an effective pre-sale marketing program to maximize the remarketing of a portfolio’s used vehicles.

Learning Objectives

Upon completion of this module, the candidate will be able to:

• Explain how to attract as an expansive a qualified buying pool as possible.
• Explain how to create an exciting and compelling sales atmosphere.
• Describe how to establish and maintain the consignor’s brand image.
• Explain how to build a base of repeat buyers.
• Describe how to create opportunities to sell vehicles as early as possible in the selling cycle.
• Explain how to attain the highest sale percentage at each sale event.

UNIT: Pre-sale Activities
COURSE: CAR-9 Services: Finance / Vehicle History Reports

Course Purpose

The course purpose is to cover two remarketing pre-sale services: Vehicle History Reports (VHR) and Financial Services:

Vehicle History Reports
This section of the module illustrates and explains the need to employ vehicle history reports (VHRs) throughout the remarketing cycle. The various aspects of a VHR and how those aspects may impact vehicle value are also described.

Financial Services
The purpose of this section is to provide the CAR candidate in-depth knowledge of financial services and service contract offerings that can benefit the purchaser of end-of-term fleet vehicles.

Learning Objectives

At the completion of this course, participants will be able to:

Vehicle History Reports

• Describe the use of VHRs throughout the remarketing cycle
• Define the various title brands and events contained in a VHR
• Recognize when a brand or particular event may affect or enhance vehicle value
• Describe various forms of vehicle history reports
• Describe the origin of vehicle history report data
• Explain a sample vehicle history report

Financial Services

• Describe automotive lender practices
• Define consumer protection laws
• Review credit reports * Explain risk-based pricing
• Calculate debt-to-income ratio
• Calculate payment-to-income ratio

UNIT: Pre-sale Activities
COURSE: CAR-10 Repossession Process

Overview

Each year 16-17 million new and more than 14 million used cars are sold in the United States. With new cars costing an average of $28,479 (according to the second quarter 2007 Comerica Auto Affordability Index) and used cars costing $13,900 (according to edmunds.com), it is clear that the automobile market is strong and growing. Interest rates on auto loans have also remained low, and many borrowers have taken advantage of the current market by purchasing new or used cars.

But unforeseen financial roadblocks can turn a car payment that once seemed manageable into a financial burden, leading some to default on their loan and, ultimately, repossession of the vehicle.

Most U.S. banks and loan companies use the services of an automobile repossession firm. As a result of the financial difficulties of many American consumers, the repo business is a billion dollar industry.

Course Purpose

This course will help CAR candidates recognize and explain the unique elements surrounding repossession processes. Specifically, candidates will be able to explain the activities and functions necessary whenever vehicle repossession takes place. They will also gain insight into determining state-specific repossession laws, as well as how to keep up to date on repossession news and events.

Learning Objectives

At the completion of this module, participants will be able to:

• State the reasons as to why vehicle repossession is necessary.
• Describe the details that take place before the actual repossession of the vehicle occurs.
• Describe the elements necessary for an actual physical repossession to take place.
• Explain the legal guidelines that must be followed in vehicle repossession.
• Describe the different types of repossessions.
• Identify sources to help explain the repossession process, as well as stay updated on repossession law.

UNIT: Actual Sale Activities
COURSE: CAR-11 Dealer/Auction Selection

Course Purpose

Upon completion of this course, the CAR Candidate will be able to explain and describe the decision factors and the process involved when a remarketer selects a vehicle auction.

Learning Objectives

At the completion of this module, participants will be able to:

• Explain the process for selecting a vehicle auction.
• Define the benchmarks for auction performance.
• Describe the various activities to be analyzed and agreed upon in the auctioning process.

UNIT: Actual Sale Activities
COURSE: CAR-12 Branding and Certification

Course Purpose

Branding your portfolio means that buyers will be able to always recognize and trust your vehicles to be consistent in quality, appearance, and condition. The course will explain how to establish such a program.

Learning Objectives

At the completion of this course, participants will be able to:

• Recognize the potential for Vehicle Certification within their portfolio
• Define the parameters for a VC Program
• Discuss VC opportunities with their auction partners
• Describe an effective vehicle selection procedure
• Describe a logical vehicle inspection process
• Define the parameters for reconditioning vehicles
• Explain the value of VC to their buyers
• Illustrate the potential benefits for the ultimate retail customer
• Demonstrate the value of VC to their Management

UNIT: Actual Sale Activities
COURSE: CAR-13 Guidebooks and Pricing

Course Purpose

• To ensure that the student has a thorough understanding of:
  • The processes utilized by each of the primary guidebooks to determine vehicle values.
  • How guidebook statistics can be used to determine vehicle values and market performance.
  • How floor pricing is established.

Learning Objectives

At the completion of this module, participants will be able to:

• Name each of the primary guidebook suppliers.
• Explain the data acquisition methods of the major guidebooks.
• Describe how book values are used for evaluation purposes.
• Explain the factors that influence market value.
• Identify the benefits of incorporating these factors into floor pricing decisions.
• Describe the impact of incorrect floor pricing on overall success in the auction lane.

UNIT: Post-sale Activities
COURSE: CAR-14 Arbitration

Course Purpose

This module covers arbitration activities as part of the remarketing process. The seller can always establish, or design, his/her own criteria for arbitration with the selling venue. This then becomes the seller’s profile or announced conditions prior to offering the vehicles for sale. The seller is always responsible for the odometer mileage readings on the block sheet and titles, except for negligence on the part of auction personnel. Specifically in this course, the IARA Certification candidate will:

• Review the National Auto Auction Association (NAAA) General Arbitration Policies, adopted April 21, 2006. (Appendix. A)
• Learn the Sale-Light System in the NAAA General Arbitration Policies and the NAAA Seller Disclosure Requirements under Seller Responsibilities.
• Learn the Sale Day, Seven Day and As-Is Arbitration section of the NAAA General Arbitration Policies.
• Review the NAAA Structural Damage Policy, approved September 13, 2002. (Appendix B)
• Learn the various systems used by auctions to record the actual sale on the block. These systems include cassette, video, and digital video recorders used to determine the bidder number, sale price, announcements, etc. These recorders are used by the auctions to resolve disputes.
• Review the arbitration polices adopted by auction clients, such as factory, captive finance, and fleet/lease that may differ from the NAAA General Arbitration Policies.

Learning Objectives

Upon completion of this module, the candidate will be able to:

1. Describe the required announcements at auction. Based on distributed condition reports that include problems covered in the module, the candidate will discuss how to represent the vehicles and make the proper announcements.
2. Explain the buyer’s arbitration rights under Ride and Drive, Auction Guarantee, or As-Is, based on the seller’s announcements. This activity includes a discussion on arbitration time limits and financial limits on various drivability and historical non-visible arbitration issues. Drivability issues include transmission or engine problems, air conditioning problem, etc. Historical issues include not actual miles (previously TMU), flood, frame/unibody damage, etc.
3. Describe the difference between unibody damage, frame damage, and unibody-on-frame damage.
4. Discuss and answer questions about the general requirements of the buyer and seller concerning announcements, after learning what constitutes unibody/frame/unibody-on-frame damage and seller disclosure requirements.

UNIT: Post-sale Activities
COURSE: CAR-15 Title Process

Course Purpose

In this overview of the vehicle titling process, the Certified Automotive Remarketer (the CAR) candidate will learn the definition of a title and when, where, why, and how a title is used. A caveat, however: this course is not meant to be all-inclusive or to cover all possibilities that may be encountered in the titling process. Every state has its own set of titling rules and regulations; therefore, anyone involved in titling work should become familiar with his or her state requirements.

Learning Objectives

• Upon completion of the course, the CAR candidate will be able to:
• Identify a title, its purpose, and use.
• Define standard terms applicable to the title perfection process.
• Identify the state agency that issues titles. List one nationally recognized resource that contains state title regulations.
• Match title brands with their definitions; for example: Lemon Law, Salvage, Reconstructed, and Stolen Vehicle.
• Discuss the benefits of a remarketing company’s ability to grant a power of attorney.

UNIT: Post-Sales Activities
COURSE: CAR-16 Benchmarking - Pre and Post-Sale

Course Purpose

This course will help develop and improve the CAR candidate’s remarketing skills with emphasis on specific functions applicable to benchmarking and/or establishing performance measures for pre-sale and post-sale activities. The candidate’s awareness of the primary remarketing processes for both end-of-term leases and repossessed vehicles (including “other than auto,” such as motor homes, boats, motorcycles, etc.) will be strengthened. Candidates will develop an appreciation of how all the relevant pre-sale and post-sale activities are impacted by applicable performance benchmarks. Relevant remarketing activities covered in this process include:

• Channel selection
• Verification
• Transportation
• Grounding
• Inspection
• Reconditioning
• Lease End-of-Term Process
• Marketing
• Finance & Warranty
• Vehicle history reporting
• Repossession Processes.

Learning Objectives

At the completion of this course, participants will be able to:

1. List in detail specific activities applicable to the pre-sale and post-sale processes and explain how these activities interact and impact ultimate remarketing results.
2. Define each specific pre-sale and post-sale remarketing activity in a manner that demonstrates the cause-and-effect relationships between the remarketing process steps.
3. Explain how actions taken on one pre-sale/post-sale activity impact any one or more other steps in this process.
4. Identify the underlying factors (internal and external) that affect each pre-sale/post-sale remarketing activity and explain how these factors impact decision-making in each remarketing function.
5. Explain the importance of measuring each pre-sale/post-sale activity, as applicable, against recognized industry benchmarks.

Benchmarking pre-sale and post-sale activities is an important aspect of the remarketing function, in large part because it is the primary method used to measure and evaluate remarketing performance. Through benchmarking, each relevant activity is continuously monitored for conformance to accepted performance standards, which, in turn, leads to improved productivity and reduced net costs to the company. Each pre-sale and post-sale activity is addressed in the course with a focus on known benchmarks. In areas lacking established benchmarks, information on standards either under development or planned for future consideration is noted.

UNIT: Post-sale Activities
COURSE: CAR-17 Factors that Influence Vehicle Resale Values

Course Purpose

The goal of this course is to provide the information required for the participant to effectively assess the impact, both positive and negative, of the following factors that influence vehicle values:

• Marketplace conditions.
• Model.
• Engine size.
• Trim level and options.
• Color.
• Mileage.
• Damage.
• Condition.

The ability to effectively evaluate these factors requires a honing of critical analytical skills to establish effective vehicle valuations. The influence of these factors varies on a vehicle year, make, and model-specific basis. A holistic approach provides the tools necessary not only to perform the required assessment, but also to strategically manage remarketed portfolios.

The participant will use case study, accompanied by metrics, to establish sensitivity to the influence of valuation variables and to marketplace exigencies from a bidder/buyer perspective.

The course defines a scientific approach to the market-centric-driven valuation process. As a professional remarketing manager, the participant will develop the proclivity and proficiency to understand and quantitatively ascribe vehicle-specific true market value that will ultimately result in effective portfolio performance.

Learning Objectives

At the completion of this module, participants will be able to:

• Explain a process, based on benchmark data, to assess vehicle values, moving the process from one of subjectivity to scientific analysis.
• Describe and effectively quantify the dollar impact of damage, both mechanical and physical/cosmetic, enabling the participant to develop the proficiency to effectively determine market value of a given vehicle.
• Describe the positive impact on valuation for vehicles for which selected colors and options, specific engines, low mileage, and/or “retail-ready” condition create incremental bidder/buyer demand, thus generating sale prices above average benchmark values.
• Describe the negative impact on valuation for vehicles for which selected colors, lack of specific options, specific engines, high mileage, and/or mechanical and physical/cosmetic condition detract from bidder/buyer demand, thus generating sale prices below average benchmark values.
• Explain how to establish vehicle-specific reserve/floor prices reflecting market-driven sale values to enhance the number of vehicles sold as a percentage of the quantity consigned for sale, accompanied by sale prices reflecting true market value.
• Explain the validity of the vehicle condition report to ensure it reflects the vehicle’s true condition and to quantify and document the specific dollar impact of mechanical and physical/cosmetic damage described on that report.

UNIT: Post-sale Activities
COURSE: CAR-18 Vehicle Resale Performance and Arbitrage

Course Purpose

The CAR candidate must be able to illustrate how the factors such as color, options, engine variables, mileage and vehicle condition levels influence resale values. Describe how reconditioning can enhance resale value. Identify and discuss the potential effects arbitrage plays in the remarketing process.

Arbitrage has been defined as the “purchase of a good in one market for immediate resale in another market in order to profit from a price discrepancy.” As a vehicle seller, the remarketer has many choices for a resale channel (i.e., driver, dealer, online, physical auction) and the selection of outlets within each channel (e.g., the online provider if you choose the online channel, the auction company and location if you choose the physical auction channel). Many of the vehicle wholesalers active in the used vehicle market place take advantage of price discrepancies from one market to another in order to extract profit. As a vehicle seller, the remarketer should be aware of arbitrage from both a positive standpoint (making the market more fluid/efficient) and the negative (potentially leaving “money on the table” if selling in a suboptimal market/channel).

Learning Objectives

At the completion of this module, participants will be able to:

• Define arbitrage
• Define how arbitrage relates to channel selection
• Explain how to measure price discrepancies from one geographic location to another
• Explain the role of a dealer wholesaler (motivations, opportunities)
• Explain how to measure and use vehicle arbitrage to an advantage
• Describe how to reduce vehicle arbitrage through better channel and location choice

UNIT: Legal, Ethics and Terminology
COURSE: CAR-19 Legal and Ethics

Course Purpose

Upon completion of the course, the CAR candidate will have a cursory knowledge of the legal and ethical issues involved in remarketing: Auction Firm/Auctioneer Licensing; Sales Tax; Product Liability; Disclosure Obligations; Agent/Principal Law. The course will focus on a brief overview of the legal aspects associated with used vehicle remarketing. NOTE: The course is not sufficient for the candidate to obtain a dealer license or auctioneer license, nor to rely on for legal advice.

Learning Objectives

At the completion of this module, participants will be able to:

• Explain the legal status for all the parties involved in the auction remarketing process.
• Explain the sales tax requirements.
• Explain the seller’s disclosure obligations and product liability.
• Describe the primary legal issues involved with the remarketing process.
• Describe the agent/principal legal aspects.
• Explain and give examples of ethical and non-ethical behavior.

UNIT: Legal, Ethics and Terminology
COURSE: CAR-20 Terminology

Course Purpose

To enable the candidate to become acquainted with the terms and phrases used in the remarketing industry.

Learning Objectives

Completion of this course will give the candidate a familiarization of remarketing terminology, thus facilitating comprehension of the other IARA remarketing courses.