Here's the tip of the month if you are looking to get a Used Car Dealer Bond in California. Are you ready for it? Check your Experian Credit Score. Most bond carriers are not using Transunion, Equifax, or Nexus Lexis. They are using Experian and if you don't know your score, you may be in for a rude awakening when you go to purchase your dealer bond for the 1st time or when you renew your upcoming dealer bond at expiration. Check your Experian Credit Score today...just another great tip from Your Car Dealer Bond.

 

For starters, YCDB can help new-comers into dealer industry from start to finish. If you are getting your California DMV Dealer License in 2018, no bond company can help you get to the finish line quicker. Here's the DMV New Dealer Checklist in case that comes in handy:

 

The YCDB Quicktips Series will give you and your sale personnel tons of great tips, tricks, and hacks to get your business to the next level, regardless if you are new into the business or you have been a retail motor vehicle dealer for the past 20 years. https://www.cal-surety.com/blog/used-car-dealers/

 

Choosing a car dealer insurance company to protect your inventory and garage liability is a tough decision. Mainly due to all the agencies you can choose from but again experience matters. YCDB has over 20 years of experience working for an insurance company and I can share my insights with you. When going through your options, it is important to not just look at the financial savings, but the person helping you secure that dealer insurance protection. If you ever were to submit a claim to your insurance company, you want it to be processed without any hassle. 

 

Here's another value-add from your friends at YCDB and that is that we are tired of seeing great used car dealers not make it and have to close up shop. The biggest culprit of closing down an auto dealers doors is that they lose focus on the what got them to the dance or they get stuck to the idea that they don't need to evolve their business. Whether creating a stunning logo, super-elegant business cards, or the most professional dealer website, YCDB is here to help. Our developers are on standby and our designers are second to none. Give us a chance to earn your business in more than way and ask about our BUNDLE DISCOUNTS!
https://youtu.be/-Cg2FcZmpDs

 

Used Car Dealer-Branded email is a must in 2018. https://www.cal-surety.com/dealer-branded-email/ If you are struggling to sell more cars but you are sending out emails from an AOL, Yahoo, Gmail, or Hotmail account you are behind. Your competition has an advantage over you but we can help you remove that disadvantage TODAY. https://www.cal-surety.com/dealer-branded-email/

 

Here's one that I'm supremely excited about. No other surety bond agency in this country has designed a mobile application strictly to help their customers get and stay organized. The YCDB Mobile App is 1st in class and just another way that we are leaving our competition in the dust in 2018!

 

Lastly, don't forget to check out the Your Car Dealer Podcast going live in July 2018. This exciting podcast is the very 1st of its kind that is designed solely for the success of Used Car Dealers. The Your Car Dealer Podcast is going to explore how to increase ROI but cutting expenses, lowering your dealer exposures, and increasing your sales (by a lot)! 

 

Remember that above all else, YCDB is probably best known for having the best rates on California Motor Vehicle Dealer Bonds!

The Car Buyer's Bill of Rights affects wholesalers, auto brokers, and retail auto dealers across the state of California. Regardless of dealership size or license type, used car dealers often fall into the trap and pay dearly for it in the end. 

The California Department of Motor Vehicles (DMV) has a variety of rules and regulations demanded of an individual seeking to obtain or renew a dealer license. A car dealer bond is required in the amount of $10,000 or $50,000 depending on the dealer type and sales volume. You would think that this extends over to auto dealer insurance also, right? WRONG!  

No such insurance requirement exists so licensed used car dealers across the state never buy dealer insurance. This puts the public in harm’s way and creates dozens, if not hundreds, of unpaid claims annually. The nature of a used car dealer is to never waste money. Therefore, if the inspector is not asking for it, then there is no need to buy it.
 

How many Licensed Motor Vehicle Dealers do not have a Dealer Insurance Policy?

At least 45% at any given time and as much as 60% when times get tough. There are hundreds of wholesalers across the state that think that their personal auto policy is going to extend to vehicles that they bought under their business license. These dealers are sorely mistaken! The rude awakening hits them when they read the exclusion section of their personal insurance policy and see the business purpose exclusion. This means that any claims that happen while operating your business autos will not be paid. 

Make sure the wholesalers you are buying your inventory from have insurance. The dealers that don’t carry insurance are typically the ones with the worst loss history.

Finding the Right Insurance Producer

Most producers do not specialize in Used Car Dealership Insurance nor have access to companies who write this insurance line. It is imperative you search around to find one who not only is knowledgeable with this product, but that is also prepared to build a policy that is specifically for your dealerships needs.

Experience matters and you get what you pay for when it comes to finding the most knowledgeable insurance producers to insurance your dealership needs. Deductibles, sub-limits, minimum limits, aggregate exposure, total insured value, prior damage. These are just a few of the most common terms that a well-informed insurance producer will understand and be able to explain to you in plain terms. If you are going to spend thousands of dollars on insurance every year, you should be getting your money’s worth!
 

New in Business (aka New Ventures)

New dealers (i.e. operations in business less than 36 months) generally provide a resume and/or experience questionnaire substantiating their experience in the garage automotive industry. In addition to industry experience, the insurance companies ask how much capital has been invested and other info that it typically contained in a business plan. 

New Ventures will typically be surcharged 10 – 20%, depending on the rating plan of your insurance carrier. It makes sense since this segment of the industry creates the most insurance claims.

 Leverage your Dealer Insurance 

Get creative of how to utilize your insurance policy to set yourself apart from some of your competitors that may be offering similar vehicles for less. After all, a car dealer that doesn’t carry insurance is putting his customers in harms’ way from day one. 

Loss Runs

Loss runs are free of charge and they are reports provided by your insurance company that certify the claim activity on each of your policies. 

·       To obtain loss history, the request must come directly from the insured and in writing (mailed request, fax, or email.) The date the insurance company receives your request, they have up to 10 business days to fulfill your request.

If you plan to switch your insurance company for your next policy term of insurance, request loss runs for the previous 36 months and approximately 45 days prior to your policy expiration date. Your new insurance company will request loss history when reviewing to provide a quote.

Five (5) quick-tips to consider if you are purchasing dealer insurance:

 1)    Inventory Coverage – 

-        Includes purchase price and the reconditioning on your autos, but does not include expected profit. Example:

o   you buy a car at the auction for $2,000 and put in $500 to get it ready for sale.

o   then you can only claim at much as $2,500 if this vehicle is a total loss. 

o   You would likely have a $1,000 deductible that the insurance company would cut you a check for $1,500 if you had a total covered loss.

* It does not matter how much you were planning on selling that vehicle for since your “expected profit” is not covered. 

 

2)    Why every dealer needs Garagekeepers Coverage? 

-        Garagekeepers Coverage is designed to protect you against claims arising out of physical damage to vehicles owned by others that are left in your care, custody, or control. This includes vehicles that are being serviced, repaired, stored, and test-driven.

 

3)    How Medical Payments Coverage is useful even if I have medical insurance?

-        Medical Payments Coverage covers medical expenses sustained by you and/or your passengers if involved in an accident in a Covered Auto. It can also be used for small claims on your premises such as a trip and fall by a customer. 

 

4)    What is Scheduled Vehicle Coverage & why would I purchase it? 

-        Scheduled Vehicle Coverage provides Liability and Physical Damage Coverage to vehicles specifically listed on your policy. This coverage should be considered when you own a personal vehicle in yours or your spouse’s personal name, rather than the business name.

-        In most cases, it makes most sense to dissolve your personal lines auto insurance policy that you carry through Geico or Progressive. Insuring those personal exposures under your car dealer policy can result in having more coverage for less money. The icing on the cake is being able to write off the cost as a legitimate business expense.

 

5)    What is Contents Coverage & why would I purchase it?

-        Contents Coverage provides replacement cost for your personal property, including leased business personal property you have a contractual responsibility to insure in the event of a fire, burglary, vandalism, and collapse. Consider your computers, tools, furniture, fixtures, machinery and equipment.    
 

Coverages to Consider for Reasons Less Discussed 

·       Damage to Rented Premises Coverage (DTRP)

-        Also known as Fire Legal Liability, provides liability coverage for property damage caused by a fire to premises leased or rented to you and arising out of your negligence.

·       Broad Form Drive Other Car Coverage

-        For businesses not individually owned this coverage may be used to extend the garage policy to insure partners or corporate officers when they borrow or rent cars in their name and do not have protection of their own personal auto policy. The individuals named in the endorsement become insureds while using autos they do not own.

·       Broad Form Products

-        Provides coverage for property damage to its product(s) even if the resulting damage was caused by a defect existing in the product at the time it was sold to a customer. 

·       False Pretense Coverage

-        Provides coverage in the event the insured is tricked or schemed into voluntarily parting with a covered auto or the insured acquires an auto from a seller who did not have legal title.
 

What Should I Expect During an Inspection?

Also known as a loss control or a loss prevention inspection. These in-depth inspections are scheduled and conducted generally within 30 days from your policy effective date. Inspectors write up an extensive report about your dealership and report back to the insurance company. The insurance company then compares the report to what’s disclosed on your application and looks for hazards threatening your business. 
 

Inspections can help you save money on your dealership insurance and keep you and your employees safe. The fewer the hazards means you are less of a risk to the insurance company, which means your premiums could be lower. Remember, an inspection of your business for insurance purposes is nothing to be nervous about. If an inspector finds something that you need to fix to maintain your insurance rates, you'll be given plenty of opportunity to do so before any action is taken.

Seven (7) Great Safe Practices to Follow:

1.     Keys to your vehicles should be secured in a safe hidden place during business hours and in a lock box during non-business hours.

2.     Do not allow drivers to operate your vehicle if they are not listed on your policy.
 

3.      Posting restricted area signs in sections of your buildings/premises where only employees are allowed.
 

4.     Prior to an accompanied test drive, you take a photo copy of the customer’s driver’s license and personal auto policy. Have the individual sign a test drive agreement that indicates their insurance is primary. You should also limit the drive to 30 minutes and on a predetermined route.

5.     Report all new hires to your insurance company immediately upon hiring. 
 

6.     Have your fire extinguishers serviced on an annual basis by a licensed contractor or by the local fire department.
 

7.     Do not loan your dealer plates to anyone under any circumstances.

 

Purchase Price Disclosure for Items Included in the Monthly Payment

The dealer must provide a written document with the price of specified items purchased and their effect on installment payments (California Civil Code §2982).

Prohibited "Certified" Used Vehicles

Used cars advertised as "certified" must meet specific requirements. The dealer must perform a complete inspection of the vehicle and provide consumers with a copy of the inspection report.

Dealers are prohibited from advertising a vehicle as "certified" if the:

Record of Complaint Form

If the dealer fails to comply with their legal obligations, please complete and mail a Record of Complaint Form (INV 172A) to the Department of Motor Vehicles at one of the addresses listed on the form. These are the rotten apples that spoil a bunch and have given this industry a bad name for decades. With that said, be prepared to have to prove your case to a DMV Investigator so you had better have your ducks in a row. 

  

Dealer-to-Dealer Disputes

When possible, attempt to resolve the problem with the other party or firm. If unable to obtain a resolution, completing and mailing the Record of Complaint Form (INV 172A) to the Department of Motor Vehicles will usually trigger an investigation.

Contacting a private attorney, pursuing a judgment through the small claims division of your local county court, or a legal aid group for assistance are always options as well. Refer to the County Government section of your local telephone directory for the county court in your area. 

 

 

California Used Car Dealer Insurance Buyer’s Guide Disclaimer.

I’ve seen a need to clarify a variety of hundreds of situations and misunderstandings for dealers over the years. California used car dealer have always had tons of insurance questions that I hope to answer here. In addition, while I was attempting to be thorough without diving into too much detail, this Buyer’s Guide was designed to be exactly that…a guide. The California Department of Insurance and the California Department of Motor Vehicles websites should be referenced for information that is more official.

 

Please give me your thoughts and be brutally honest. 

If you can appreciate the work that went goes into developing a document like the California Used Car Dealer Insurance Buyer’s Guide, let me know. Let me know how we can improve this and future content for you.
 

I can go into as much detail as you folks would like to see. I just need the feedback from my dealer friends out there to kick me in the right direction on what information that would like me to include in future revisions or separate documents.

Not enough info or do you think I can help your business? I am here to serve.

 

Mike Ramos

866-357-4405
 

Also check out the Your Car Dealer Podcast available on iTunes: https://ycdb.us/YCDB-Podcast 

 or click here to hear it on Stitcher Radio:  https://ycdb.us/Podcast-Stitcher

 

So if you've got a $5,000 claim on your hands, then you would get a $4,000 check because you're paying the first $1,000 of it. That's sort of the way that works. They charge you a certain amount of it ... you can usually make a down payment, and then make monthly payments after that. That's used auto dealer insurance. 

 

That's not a bond. A bond is very different. A surety bond is basically a guarantee from a third party. The guarantee is coming from the surety company on behalf of the auto dealer. 

 

Potential bond claims: 

1) the dealer stops making his payments to the auction, 

2) dealer to dealer disputes because one of them didn't pay up; 

3) maybe the dealer offered an extended warranty but didn't pony up the service. 

4) maybe they sold a car on suspect pretenses or whatever have you. 

5) DMV fees.

 

Those bond claims all could and do happen. Then once the bond company pays out, they give you a certain amount of time to pay it back.  They may charge you a little bit of an admin fee for having to push around the paper. 

 

And then they're going to turn around and they're going to hit your, bond with a claim and then cancel your bond. If that bond gets canceled, they tell the DMV. The DMV shuts down your license. You gotta start everything all over. Go back to the pre-licensing education. You're going to have to go through the entire rigamarole again of getting licensed. Take the DMV test, all of that stuff because your bond got canceled because it was a bond claim. 

 

And they want every penny back. There's no you pay the first X amount, and then they pick up the tab on the rest. You pay every penny of all surety bond claims. This bond is saying that you are going to fulfill your obligations and if you don't, this bond is going to step up and protect the public, protect the DMV, which is the state, which is going to protect other dealers from that dealer that's going out and causing these claims. It's going to protect the auction. But then the surety company is coming for you after.

 

That's what a surety bond is for an auto dealer, used car dealer, motor vehicle dealer, whatever you want to call it. That's what it is. In different states, the DMV requires a different bond limit. 

 

In California, if you're a wholesale dealer that's selling 24 cars or less per year then you can obtain a $10,000 auto dealer bond. 

 

If you're selling 25 cars or more, that's a $50,000 bond. If you're still doing wholesale only. And guess what. If you're retailer, $50,000 bond. If you're an auto broker, $50,000 bond. Wholesale dealers selling 25 cars or more per year, $50,000 bond.  

 

Here's the carve out. If you're a retail motorcycle only dealer then you  also qualify for a $10,000 bond. Every other segment of licensees will have to have the $50,000 bond. 

 

Please subscribe down below if you got anything out of this video. 

 

We would love the chance to earn your auto dealer bond business, especially if you are in California. Don't go float your business out to these guys in Ohio, or out in the middle of nowhere. Oregon, Washington, Pennsylvania, Florida. YCDB is a family owned company that wants to work hard to earn your business. 

 

We're going to give you an awesome rate on your dealer bond but more importantly we are going to give you fantastic service. And things like these videos are going to come for free. Let us earn your business on this. We'd love to help you in any way we can. This is Mike at Your Car Dealer Bond saying thanks again!

 

 

Perhaps we can help you place your used car dealer insurance? Hit this link: https://www.cal-surety.com/dealer-insurance/

 

YCDB can also help you develop your dealer brand in 2018! We are super excited about building a stunning logo for you or professional business cards. We are here to serve and wow you with you graphic design and website development. Give us a shout today and let us know what you need: https://www.cal-surety.com/contact-us/

 

Lastly, we offer a service that can help you migrate away from your current Free Email Providers like Gmail, Yahoo, or Outlook to an email that has been branded to your business like Mike@BestAutoSales.com for instance.

 

We are here to earn your business in a variety of ways!

 

866-357-4405

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Please comment below or take this survey:

 

 

I think new cars are going to become more expensive due to the passing of the 15% Steel and Aluminum Tariffs. I also believe that the car manufacturers will pass those costs down to the consumer from everything that I've heard or read. And this is why I'm asking for the comments down below. Because there may be something that we're all missing, but it seems like the tariffs will make the new car, they're going to make those new cars so much more expensive which will push those buyers away. Keep in mind that these tariffs will be working in concert with the rising interest rates, which I also understand are still on the horizon. That's going to push away and push out some of those buyers that currently are buying new. 

My thought is that in future years it's going to be less attractive to buy new because the financing incentives aren't there and the price of these vehicles are going to be that much more expensive because of the tariffs. So, again, I'd love to hear your feedback on this question. Maybe there's something that I'm missing. And again, not good, bad, or indifferent, just trying to get my arms around this. And there's a bunch of you guys out there and you know who are you geniuses, that understand this stuff way better than I do. This is Mike Ramos from Your Car Dealer Bond & I'm really humbly asking for some feedback. Please put them in the comments below and please try to keep it civil. I'm just asking the question, I’m not taking sides or advocating anything in either direction. 

I will give a shout out next week in all of my videos and the Your Car Dealer Podcast. Here the link the only podcast that is dedicated to the success of the used car dealer industry:

 

Whatever dealership you own or you're connected to, no matter where you're at in the country. I'd really love to hear your comments and I will share everything that I good, even some of the bad, and either way. I really want to definitely highlight the folks that are out there and some of you guys that are out there give me some great insights to this because I'm really curious. If there's some piece of this that I'm missing.

 

If we can help you in any way, our phone number is 866-357-4405. No matter where you're at the in the country, we can help you save money on your surety bond. In California, we've got the best, I mean just fantastic rates, great payment plans, you name it. Two-year bonds that save you 25% to 35% for reals. My website is www.cal-surety.com and our email is info@YourCarDealerBond.com  

 

By the way, we have some great content in the video vault if you haven’t had the chance to check it out just yet. Perhaps your sales team needs to step up their game? The YCDB Video Vault has put together short, FREE videos to help you increase your ROI. Our videos are designed to help you sell more cars and reduce your overhead.

 

I've got a bunch of videos that are going to, The Rule of 300, The 80 20 Rule, I mean I'm helping you train your sales guys. It's one of the most costly expenses you're going to have is training your sales guys. Send them to the YCDB Video Vault and they're going to be selling machines helping you maximize your ROI. We go through a SWOT analysis video that really is a must!!! Check out the links below for sure and if you appreciate the content, the subscribe to our channel, like the video if you liked it, and share it with a friend! 

 

Best Used Car Dealer Videos of 2018:

1) Used Car Dealers and Salespeople (make MORE money now with the Rule of 300)!

2) Awesome Tip for Car Dealers and Salespeople in 2018 (80-20 Rule for Growth)

3) Attn Used Car Dealers! Sell more now (SWOT Analysis video)

4) How did Your Car Dealer Bond (YCDB) get Started?

 

Would you consider connecting with YCDB on Social Media:

 

Check out Your Car Dealer Bond on Twitter:

 

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Here's the Your Car Dealer Bond Google Plus Account:

 

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Here's how to find Your Car Dealer Bond on YouTube:

 

Connect with Your Car Dealer Bond on Instagram:

 

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Can a Wholesale Dealer Sell to the Public?

A Profitable Way to Start Flipping Cars in California in 2019.

The California Wholesale-Only Car Dealer Model.

California’s Retail Used Car Dealer Model.

In 2019, is Auto Brokering the Ultimate Car Dealer Sales Model?

Still Debating on a Wholesale, Auto Broker, or Retail Car Dealer License in 2019?

California Car Dealer Education Services.

The Simple California DMV Dealer License Checklist for 2019.

7 Generic Terms for a Car Dealer Bond.

6 Generic Terms for a Car Dealer Bond.

Used Car Dealer Bond Intro.

3 Quick Ways to Understand a Car Dealer Surety Bond and what it does in 2019.

1 Simple Way to know if I need a car dealer surety bond?

The Best Way to apply for a Car Dealer Surety Bond.

Do you know how much a Dealer Surety Bond Costs in 2019?

Top 3 ways to Reduce the cost of my Used Car Dealer Bond.

What are my options if I don’t want to purchase a surety bond in 2019?

Top 5 Reasons that Used Car Dealers should NEVER Post the $50,000 Themselves.

3 Significant Ways  that Bond Claims Affect You.

5 Extremely Useful Tips to consider if you are purchasing a motor vehicle dealer bond.

3 of the Most Common Surety Bond Misconceptions.

The Used Car Dealer Bond Market [2019 edition]

The Surety Bond Format in Simple Terms!

Why does the DMV require a bond?.

Bad Credit, No Credit, or Not a Citizen?

Are all Surety Bonds the same – is the only difference the cost?

Do I need Dealer Insurance to get my California DMV Dealer License?

14 Critical Used Car Dealer Services provided by YCDB!

Why Trust Your Car Dealer Bond LLC (YCDB) to help you?

How is YCDB Different than EVERY Other Surety Bond Service in California?

Best Resources for a Used Car Dealer.

 

A California Curbstoner is someone that sells more than 5 vehicles per year without becoming a licensed car dealer. Flipping a car to make a profit a couple times a year could just be a nice sideline business but the DMV cut-off is 5 per year. 

 

ü  Keep in mind that California Curbstoning laws vary from other states.

 

These Curbstoning laws are in place to protect licensed California used car dealers that have significant overhead to run a legal dealership. 

 

Even though a great bond agency in California like Your Car Dealer Bond can help you keep you surety bond costs low, your lot lease, reconditioning, payroll, various taxes, DMV, auction fees, dealer insurance, dealer management software, marketing can be mostly if not managed properly. 

 

 

 

Can a Wholesale Dealer Sell to the Public?

 

No! Just so we are on the same page, a wholesale dealer cannot sell vehicles to the general public. A wholesale car dealer can only sell to other licensed motor vehicle dealers. The wholesale car dealer may however, purchase from any car dealer auctions, private parties, and wholesale or retail car dealers.

 

 

A Profitable Way to Start Flipping Cars in California in 2019.

 

Making money flipping cars is not a new concept but the ways of marketing a dealership have changed. Flipping cars in California is a big business and can be very profitable as long as you are buying and selling your inventory with a large enough profit margin to account for all the expenses.

 

ü  “Buy low and sell high,” is the mantra in the used car business. If you can master the art of buying used cars for a low price and selling it to someone else for “the right price”, then you can get started with a very profitable business.

 

Notice the language we are using here…”the right price”. Knowing how much your expenses are per month is necessary to know how much you need to make on each car. Selling too many loss leaders is usually not a “Best Practice” for California used car dealers!

 

Although, you can also start flipping cars to experience something fun and interesting in your free time. It does require a time commitment to get things off the ground. But always remember that you get out what you put in! Patience is the key.