Let’s put in the work to improve the customer experience

A Message from VADA President and CEO Don Hall

January 2025

  

One in four drivers is underwater on their auto loan (an average of $7,200 in negative equity), with a car payment averaging $780 a month. An alarming number of people don’t even qualify for a loan.

New car prices are 27% higher than 2019, averaging $48,000 (and base-model SUVs closer to $60,000).

Auto manufacturers aren’t helping to bring these rising costs under control. Some OEMs have moved production to Mexico, cutting labor while keeping the same MSRP or even raising it. Meanwhile, CEOs of major automobile makers earn more in the time it takes to walk from the parking lot to their office than a factory worker earns in a year.

And while times may be good and sales projections for 2025 show nothing but growth and profitability, bear in mind the financial strain taking a toll on consumers and the signals of a growing affordability crisis. Before the holidays, the total U.S. supply of unsold new vehicles was more than 3 million for the first time since the pandemic (an 85 days’ supply), and up nearly 30% since 2023.

These are some hard truths about the automotive industry that I believe are reflective of a growing disconnect between the industry, its products, and the consumers we serve. Another truth: We’ve made the car-buying experience too difficult and expensive. Yet, some dealers — and to be sure, not all — cling to outdated practices, many of which are being heavily scrutinized by federal regulators.

Today’s consumer spends about seven hours researching online before stepping into a dealership. They arrive informed, yet some sales reps treat them as if they’re clueless. Instead of transparency, some continue to create obstacles, hiding pricing details until the prospect is deep into the F&I process. While financial decisions are ultimately up to the individual, dealers can do our part by providing transparent pricing, clearly disclosing fees and add-ons, and actively working to match customers with vehicles that fit their budget and needs, rather than pushing for more expensive options.

It’s no wonder when we hear consumers are losing faith in traditional dealerships, especially as manufacturers like Ford and VW flirt with direct sales models (which are prohibited in Virginia). While direct-to-consumer efforts have failed in the past, the perception persists that buying direct offers equals a better experience — and that perception is our problem to fix.

It’s time for a reset, and the solution is simple: Customers first.

We must rethink every step of the buying process to make it more transparent, efficient, and respectful of the customer’s time and intelligence. The days of treating customers as adversaries rather than partners must end.

It’s only by focusing on the customer experience that we can build trust and ensure a thriving future for our industry.

The auto industry is at a crossroads, and it’s up to us as manufacturers, dealers, and professionals to choose the path forward — or face the consequences.

One minute for Fair Pay: Take Action on Warranty Recall Bill

Virginia lawmakers from around the Commonwealth are in Richmond for the 45-day General Assembly session. This year, VADA is championing a bill to bring fair reimbursement to dealers and their technicians for warranty and recall work to ensure your compensation is closer to the “door rate.”

To get this bill passed requires your voice. In VADA’s Action Center, you can sign your name to a pre-written letter to your local legislator expressing support for this bill.

Many have already done so. Here are some of the comments they sent to their legislators.

• From a dealer: Technicians are very hard to come by and it's not fair that I have to pay them extra money when the OEM shorts them the time required for a job.

• From another: I have to pay my technicians a significantly higher rate of pay to perform warranty work and recalls due to this manipulation of the rate of reimbursement by the OEM. Warranty work should not be a losing effort on my part. I have no say in the labor time standards that the OEM sets, or how much I charge for each part that is required. Fair is fair, and this is not fair.

• From a tech: Our Owner/Dealer Principal pays our Technicians 25% additional flag time for Warranty work because of the Low warranty reimbursement flag time from our Manufacturer. We pay it because we think its fair to our employees and the right thing to do.

• And from another: Combined, I have lost over 5,000 labor hours due to warranty and recall time. As shop foreman, I see it among all of the technicians, and some of those hours could make or break their paychecks. Long-term, the bill will increase technician retention and create a better environment for new technicians starting on their journey in the automotive field.

I couldn’t have said it better than that. Support Virginia’s automotive techs with fair pay.

Don't Be Left Out: Dealer Day is January 29

 

Advocate for our warranty/recall bill and show lawmakers the importance of the franchise system.

VADA Dealer Day at the Capitol 2025
Wednesday, January 29, 2025
Hilton Richmond Downtown
(Then walking to meetings at the Virginia State Capitol)
Start: 501 E. Broad Street
Richmond, VA 23219
11 a.m. — 3 p.m.