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Old 02-25-2015, 09:48 AM   #1
XDCX
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Default Nissan of Hawthorn, NJ discovers they're missing 90 cars - recover 32...

A news report indicates that Nissan of Hawthorn discovered they were missing 90 vehicles from their rental fleet - police have recovered 32 so they're down to 58 missing vehicles. For the full report - click here

The report indicates a dealership employee has been charged for stealing $126K from Nissan of Hawthorn - he'd take the money for the rental car and not keep track of the rental. Not only did the dealership lose track of 90 rental cars, it appears it took them almost a full year before they figured out something wasn't right.

The report indicated the majority of the recovered vehicles were picked up by police departments that use patrol cars with license plate readers - an apparent benefit of Big Brotherism....
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Old 02-25-2015, 03:40 PM   #2
tnpartsguy
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What's stunning about this is that it took so long to figure it out....

I think this is what happens when dealers get involved in a Daily Rent A Car System and have no ideal how to do it. We had a very successful DRACS years ago, and they are getting their toes wet again currently.

#1, make it a department, and account for it's revenues or losses on the monthly statement!!

#2, do a weekly 'floorplan' inspection. Most of these DRACS units are floored, not owned by the dealer, and the GM/GSM and the DRACS manager should weekly discuss where the vehicles are. We had to touch every car that wasn't in rental once a week (we did keep a few at a remote location at a body shop that was about 25 miles away).

#3, 14 days. That's the longest you allow anyone to stay in a unit. If they want to recontract, fine, bring them in and switch the unit out, don't let them stay in it more then 14 days. We have one lady that started driving a delivery route between middle TN and southern FL (we do not know for SURE what she was delivering, but we have some guesses now), and was putting 1,200~1,400 miles PER WEEK on our car. Most factory DRACS don't want you to put more than 4,500~5,000 miles on these units, so if we have left her in a month, we would have had to ground the unit when it did come back.

That's just a few of the crazy things that came up when we had GMDRACS the 1st time... I'm hoping it doesn't go crazy again.
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Old 02-26-2015, 05:09 PM   #3
mryan55
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I've never done the Chrysler rental program, although the dealers I know who do generally have a single person responsible for all the rental contracts, tracking the fleet, etc.

I guess if a GM or owner isn't too in touch with the rental cars or the specifics of the program some might get abused -- although this example seems extreme.

How many vehicles does this dealership have that there are 90 units in the rental fleet that can go missing and unnoticed?

I wonder if Nissan counts rental units as retail units in the month where they go into DRAC service? If so I guess that might explain why a dealer would amass a large number of rentals, especially if it help them hit a volume goal.
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Old 02-27-2015, 10:05 AM   #4
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Quote:
Originally Posted by tnpartsguy View Post
What's stunning about this is that it took so long to figure it out....

I think this is what happens when dealers get involved in a Daily Rent A Car System and have no ideal how to do it. We had a very successful DRACS years ago, and they are getting their toes wet again currently.

#1, make it a department, and account for it's revenues or losses on the monthly statement!!

#2, do a weekly 'floorplan' inspection. Most of these DRACS units are floored, not owned by the dealer, and the GM/GSM and the DRACS manager should weekly discuss where the vehicles are. We had to touch every car that wasn't in rental once a week (we did keep a few at a remote location at a body shop that was about 25 miles away).

#3, 14 days. That's the longest you allow anyone to stay in a unit. If they want to recontract, fine, bring them in and switch the unit out, don't let them stay in it more then 14 days. We have one lady that started driving a delivery route between middle TN and southern FL (we do not know for SURE what she was delivering, but we have some guesses now), and was putting 1,200~1,400 miles PER WEEK on our car. Most factory DRACS don't want you to put more than 4,500~5,000 miles on these units, so if we have left her in a month, we would have had to ground the unit when it did come back.

That's just a few of the crazy things that came up when we had GMDRACS the 1st time... I'm hoping it doesn't go crazy again.
Great post - thanks for sharing your experience.

I agree that it's possible for a dealership to develop a successful DRAC program but I've also heard a fair number of horror stories where the DRAC program turns out to be a money losing operation because no one is responsible for running the department.

In the case of Nissan of Hawthorn, I wonder if there's more to the story? It's hard to imagine that the problem with the DRAC department could go on so long or become so large without being detected earlier.
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Old 02-27-2015, 10:10 AM   #5
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Quote:
Originally Posted by mryan55 View Post
I wonder if Nissan counts rental units as retail units in the month where they go into DRAC service? If so I guess that might explain why a dealer would amass a large number of rentals, especially if it help them hit a volume goal.
That's a great question - and it might be the missing link that provides the explanation for what happened and why it took so long to be discovered.

Nissan has a reputation for using some aggressive Dealer Cash stair-step programs - if dumping inventory into the DRAC program counted as a sold unit that could explain why the DRAC inventory grew so large...
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Old 02-28-2015, 05:57 PM   #6
mryan55
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Originally Posted by XDCX View Post
That's a great question - and it might be the missing link that provides the explanation for what happened and why it took so long to be discovered.

Nissan has a reputation for using some aggressive Dealer Cash stair-step programs - if dumping inventory into the DRAC program counted as a sold unit that could explain why the DRAC inventory grew so large...
I only think of this because the two facing Nissan dealers in my immediate market often seem to sell a lot of units at the end of the month, even if there isn't traffic...

The also seem to always have large numbers of model year old vehicles with miles, and from what I hear they are usually pretty big losers on the front end. Robbing Peter to pay Paul in a sense, but I don't fault them for taking advantage of a program that helps dealers cash in.

FCA actually allowed a C, D or E dealer to count up to 8 Chrysler 200 loaners as retail back in late 2014 (A and B size stores could count 4 if I recall) with the only stipulation being holding the car for 90 days before retailing. I didn't do any since the wouldn't be DRAC units for me store more than they would be abused loaners give out to anyone who asked.

I would also be worried that if we did the 200 DRAC program and sold one on day 91 that corporate audit would look for any way to get the incentive money and volume money back.. since the normal rule is 180 days. Of course, other dealers smelled this to so FCA actually issued a written adjustment to the policy.
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Old 03-01-2015, 10:41 AM   #7
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Quote:
Originally Posted by mryan55 View Post
I only think of this because the two facing Nissan dealers in my immediate market often seem to sell a lot of units at the end of the month, even if there isn't traffic...

The also seem to always have large numbers of model year old vehicles with miles, and from what I hear they are usually pretty big losers on the front end. Robbing Peter to pay Paul in a sense, but I don't fault them for taking advantage of a program that helps dealers cash in.
I agree and I guess it's good that Nissan might be giving their dealers the option of dumping cars into DRAC to hit a Dealer Cash objective. The tough part is I'm sure the DRAC units would be added to the next Dealer Cash objective and the dealer would face the same quandary at the end of the next program.

Quote:
Originally Posted by mryan55 View Post
FCA actually allowed a C, D or E dealer to count up to 8 Chrysler 200 loaners as retail back in late 2014 (A and B size stores could count 4 if I recall) with the only stipulation being holding the car for 90 days before retailing. I didn't do any since the wouldn't be DRAC units for me store more than they would be abused loaners give out to anyone who asked.

I would also be worried that if we did the 200 DRAC program and sold one on day 91 that corporate audit would look for any way to get the incentive money and volume money back.. since the normal rule is 180 days. Of course, other dealers smelled this to so FCA actually issued a written adjustment to the policy.
I actually like programs like the one you described. I always figured the program's not for everyone but if a dealer has the resources to manage the DRAC cars and can create a source of used cars that can be perfect flip vehicles - it can be a "win win" for both the store and the factory.
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Old 03-01-2015, 07:34 PM   #8
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We do Enterprise and Toyota Rent-A-Car on site, so we've chosen to limit it to two options.

Dealers have certainly had success with flipping the DRAC cars -- the first DRAC 200s were eligible to come out of service in January... and if dealers have had luck like I have with the 2015 200s that I purchased from Enterprise, the margins are quite good on these lightly used 200s.

All told it's actually a quite nice vehicle... I'm just worried that some consumers won't even give it a chance because of the 200 name... time will tell, but for now FCA remains nothing more than a bit player in the midsize segment.
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Old 03-27-2015, 09:45 AM   #9
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Default Update - Even more vehicles missing - total = 119

An updated news report indicates the number of stolen rental cars from Nissan of Hawthorn has increased. For the full report - click here

The dealership notified police that an additional seven vehicles are missing and police reports have been filed on another 22 vehicles that have been returned to the dealership with damage.

At one point the dealership had 119 rental cars missing....

Police continue to recover vehicles - approximately 10 - 12 per month mostly through the use of license plate readers.
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Old 04-03-2015, 10:13 AM   #10
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Originally Posted by mryan55 View Post
I only think of this because the two facing Nissan dealers in my immediate market often seem to sell a lot of units at the end of the month, even if there isn't traffic...

The also seem to always have large numbers of model year old vehicles with miles, and from what I hear they are usually pretty big losers on the front end. Robbing Peter to pay Paul in a sense, but I don't fault them for taking advantage of a program that helps dealers cash in.
It seems that Honda's Senior VP of Automotive Operations in the U.S. shares your suspicion.

I just created a thread where John Mendel from Honda alleges that Nissan has their dealers dump new cars into their in-dealership rental fleets to garner sufficient sales to outsell Honda.

Here's a link to the other thread - click here
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