3 Ways to Safeguard Your Dealership in a Consumer-Driven Market
After a few roller-coaster years, consumers are still interested in buying cars and car inventories have continued to stabilize to meet their needs. Still, the industry is expected to see declines in consumer demand and increases in auto loan delinquencies in 2024. These changes result from various economic factors, including high interest rates, rising car prices, and other financial strains on consumers.
As auto dealers look for ways to serve reluctant consumer buyers, and auto lenders work to address more loan delinquencies, federal and state regulators are monitoring the industry to ensure consumers are being treated fairly.
Here are three initiatives you can take on to ensure your dealership remains compliant:
1. Establish a culture of compliance
The best way for dealerships to protect themselves in this environment is by creating a culture of compliance, data security, transparency, and honesty with customers.
Here are some of the ways to do that:
- Documentation – Establish processes to document your compliance and risk assessments for every deal and store that data securely. Using an electronic system to track and record your completed processes for each deal can be invaluable in the event of an audit or regulatory inquiry.
- Consistency – One of the hallmarks of many consumer protection regulations is non-discrimination. Be sure every customer receives the right consumer notices at the proper times during the deal process to document any exceptions. Create a systematic customer complaint system and work to resolve complaints using a consistent process with timelines and escalation procedures.
- Data Protection – More and more state data privacy laws require businesses to provide certain rights regarding personal information collected by the business. Consider using secure digital storage solutions to ensure that you are protecting and storing customer data your state-required period.
2. Protect your reputation and your profitability
Today’s consumers are empowered to seek remedies from a variety of sources when they have a negative experience. Between the online complaint databases maintained by the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC), state attorneys general, data protection agencies, and the Better Business Bureau, the risks to your dealership of a prolonged consumer dispute multiply.
Consistently following compliance best practices is the best way to protect customers and avoid the ramifications of non-compliance.
3. Download the 2024 Dealertrack Compliance Guide
Sign up now and get the free guide to serve as a compliance reference all year long. Know which regulations apply to your dealership so you can build a solid compliance plan to safeguard your business.
Disclaimer: This is not meant as legal advice, and we do not purport to provide any legal or regulatory analysis. Consult with your attorney for any legal, regulatory, or compliance questions you may have.
