The Truth About Cars » NADA http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 03 Sep 2015 19:10:42 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.4 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars » NADA http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com NADA 2015: I Was At a Convention Full of Auto Dealers and Lived to Tell the Tale http://www.thetruthaboutcars.com/2015/01/nada-2015-convention-full-auto-dealers-lived-tell-tale/ http://www.thetruthaboutcars.com/2015/01/nada-2015-convention-full-auto-dealers-lived-tell-tale/#comments Thu, 29 Jan 2015 01:57:58 +0000 http://www.thetruthaboutcars.com/?p=989746 Last week, I snagged a press pass to the 2015 National Automobile Dealers Association Convention and Expo in San Francisco. That’s right, San Francisco, one of the least car-friendly places in the country, if not the world. Dealers would have to rely on buses to get to their hotels and a few landmarks. They would […]

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Last week, I snagged a press pass to the 2015 National Automobile Dealers Association Convention and Expo in San Francisco. That’s right, San Francisco, one of the least car-friendly places in the country, if not the world. Dealers would have to rely on buses to get to their hotels and a few landmarks. They would have to use public transport to go shopping. And they would have to contend with an area of the country trying to “disrupt” their business model with the likes of Tred and Tesla, both of whom didn’t have exhibits at the event.

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It was a place where numerous dealership owners and managers would network with other dealers (), attend meetings with car manufacturers (“When is Volkswagen going to give us a 7-passenger SUV?”), learn in workshops how to generate greater profits and retain customers (“So I can’t just keep ‘em waiting at my desk for an hour?), purchase new equipment for the showroom and service bay (“How ‘bout three-thousaand for this ‘ere turntable with zero-percent financin’ for eighty-somthin’ months?”), and see Jeb Bush possibly announce his candidacy for president (“He’d better be better than Dubya.”).

Numerous people who’ve dealt would consider a venue full of car dealers the worst place imaginable. They might think it was entirely possible to walk out the convention center doors having bought a Lincoln MKS, a Scion iQ, a Cadillac ELR, and definitely a Dodge Avenger, all on 84-month loans with a 17.5% interest rate. They might think I had to wait hours to get anything done, like picking up my press pass or getting lunch, much like going through the finance room or waiting for the oil change.

Instead, since they’re far from home, dealers do their own activities, away from the customers. They could be doing anything from walking Fishermans’ Wharf to buying new service bays to learning about federal mandates on dealer advertising to getting their heart checked to taking a nap in their hotel room due to the jet lag.

One important activity that NADA holds are workshops for the dealers, which deal with sales strategies, customer retention, marketing plans, financial practices, employee motivational, and service bay optimization, among numerous other subjects. Usually, these workshops are helmed by people who either work for or owns an automotive consulting firm in the field that the session focuses on. For instance, a workshop on digital wholesaling of cars was given by a man who worked for an auction company while a workshop on “building a winning sales team” was helmed by the owner of a sales training firm.

I was really looking forward to shadowing some of these workshops to inform readers about new sales, marketing, service, and finance strategies to be employed the next time they set foot in a dealership. I was going to find out some new strategies that dealers were undertaking to improve their sales and profits. I would help The Truth About Cars live up to its name. Unfortunately and somewhat predictably, press people were not allowed into these sessions. (The reason given to me was that dealers might become uncomfortable with a member of the press in the room and not voice their honest opinions.)

Though I wasn’t admitted into workshops, I was surprisingly allowed to take part in the “NADA Lifestyle Experience,” intended for the spouses of dealers. The organizers provided activities like complimentary manicures, chair massages, COPD/lung function screenings, and having Bloomingdale’s exhibit the newest spring fashions. With the unforeseen free time I had, I took part in the video games portion of the activities where I set the highest score on the first try. Granted, I was easily the youngest there by at least ten years, and I stood out since nearly everyone else were dealers’ spouses. I didn’t set foot in those areas again.

As for the dread that dealers may keep on selling cars during the convention, have no fear. The shoe is on the other foot at the expo, as vendors showcase their products and services for dealers, enticing them to their booths with the promise of gift cards, free tablets, and in one case, entering a contest for a Rolex Submariner. Most of these exhibitors consist of finance, insurance, marketing, classifieds, servicing equipment, IT services, and accessory providers among others. I wouldn’t have been surprised if there were over a thousand exhibitors, all gunning for a shot at a dealer’s business.

Many of these vendors’ displays are immense. When I first walked into one of the exhibition halls, the Hunter Engineering Company (I only mention Hunter in detail since I have their flyer) had a full replica of a service bay on the convention center floor showcasing how quickly inspections could be performed on a car utilizing their equipment and sensors. Chrysler and Bosch had even larger service bay replicas with multiple cars and constant demonstrations of their products. It was clear that companies wanted a piece of the dealer service revenue.

Meanwhile, the companies that took care of finance, insurance, marketing, classifieds, and other products had mini-structures (some were two stories) constructed on the floor of the convention center. Companies like Reynolds and Reynolds, Ally Financial, and Autobytel were in that category, attempting to do as much business as they could, with structures about half the size of Formula 1 team hospitality structures. These companies had dedicated conference and waiting rooms as well as large television screens explaining what their firms did. Some firms even hired athletes like Joe Montana, Steve Young, Jerry Rice, Dan Fouts, and Reggie Jackson to bring foot traffic to their structures.

After seeing all the business and meetings that occurred during the two days I visited the NADA Convention, I’ve seen how significant auto dealers are to the American economy. Other than the manufacturers and dealers whom we encounter directly when buying or servicing a car, I saw the countless other businesses both small and large that are an integral part of your automotive research and buying experience.

And most importantly, I managed to get out the doors of the convention center with my bank account intact and no ELR appearing in my driveway.

Satish Kondapavulur is a writer for Clunkerture, where about a fifth of the articles are about old cars and where his one-time LeMons racing dreams came to an end, once he realized it was impossible to run a Ferrari Mondial. He’s probably the only person in the world who’s driven both a Bentley Continental GT and Chrysler 200 around Laguna Seca.

 

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New or Used? : Vroom! Crunch! Cha-Ching! http://www.thetruthaboutcars.com/2014/06/new-or-used-vroom-crunch-cha-ching/ http://www.thetruthaboutcars.com/2014/06/new-or-used-vroom-crunch-cha-ching/#comments Thu, 12 Jun 2014 19:47:47 +0000 http://www.thetruthaboutcars.com/?p=842650 Troyochatter submits this request for your perusal. Hey there, I have a dilemma that you might be able to help with. Got a sec? My brother had a motorcycle accident. All is well, but here’s the issue. The bike is a 1996 Honda Nighthawk that books for $1895…except I have never seen one sell for […]

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Source: Gallagher.com

Source: Gallagher.com

Troyochatter submits this request for your perusal.

Hey there, I have a dilemma that you might be able to help with.

Got a sec?

My brother had a motorcycle accident. All is well, but here’s the issue.

The bike is a 1996 Honda Nighthawk that books for $1895…except I have never seen one sell for  that cheap.

AND.. his is a one year only model, in yellow, and it is mint.

The insurance company wants to total it. But I have looked at it and, honestly, high end, maybe $600 total in parts and labor puts it back to 98% before it was wrecked.

Steve flippantly Says: Offer to keep it with a salvage title and find out the price difference. Then you can paint it purple with green zigzags like those old Kawasaki Ninjas.

Troyo:  See, that’s the thing, it’s not even close to totaled. So can he keep it and request a salvage title and xxx amount of dollars?

Steve: Yes and no. Older vehicles are historically undervalued and typically, you have to offer examples of why their valuation is wrong. All older vehicles, cars and motorcycles, have been historically undervalued in certain price books. The best thing you can do is visit them all. NADA often provides higher valuations due to their primary clientele (banks and finance companies), while Kelly Blue Book does a good job as well with the consumer side. Although older vehicles in general tend to be a bit of a hit or miss, depending on their rarity and the fact that average older vehicles tend to have fewer accurate data points.

He should use Ebay’s completed items, Craigslist, and Cycle Trader to find examples that reflect what he had, which won’t be easy. Even an expert’s opinion in the industry can go a long way. I have helped insurance companies with automotive appraisals. But motorcycles are a very different animal.

 

 

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FTC Launches Investigation Into Deceptive Marketing Of Biweekly Payments http://www.thetruthaboutcars.com/2014/05/ftc-launches-investigation-into-deceptive-marketing-of-biweekly-payments/ http://www.thetruthaboutcars.com/2014/05/ftc-launches-investigation-into-deceptive-marketing-of-biweekly-payments/#comments Fri, 23 May 2014 13:00:53 +0000 http://www.thetruthaboutcars.com/?p=829377 The Federal Trade Commission is launching an investigation into biweekly payments sold as a product by dealership finance departments on the basis that consumers may not be getting their money’s worth with such payments. Automotive News reports the National Automobile Dealers Association’s Legal and Regulatory Affairs unit “received a number of questions and comments about […]

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The Federal Trade Commission is launching an investigation into biweekly payments sold as a product by dealership finance departments on the basis that consumers may not be getting their money’s worth with such payments.

Automotive News reports the National Automobile Dealers Association’s Legal and Regulatory Affairs unit “received a number of questions and comments about biweekly payment F&I products,” and that the FTC recently issued civil investigative demands — requests for documents and/or testimonies — to dealerships regarding how biweekly payments are marketed by the latter’s finance departments. The organization emphasized to its members that finance employees are aware of and are properly trained “to accurately and adequately disclose all fees and costs, and not to overstate any potential benefits.”

Though biweekly payments are meant to bring consumers out of negative equity and the overall loan debt faster than other methods, NADA delivered an example where the fees associated with such payments ultimately hinder any savings on interest. The example given has a consumer save $656.61 on interest for a $27,342.96 loan on a vehicle, but pays $613.50 in total fees over 110 payments, providing little value for the consumer.

NADA concludes by warning dealers that deceptive marketing of savings allegedly offered by biweekly payments would land the dealers and their finance managers under the gun of the FTC.

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Musk Blames Car Dealers For Lackluster EV Sales http://www.thetruthaboutcars.com/2013/06/musk-blames-car-dealers-for-lackluster-ev-sales/ http://www.thetruthaboutcars.com/2013/06/musk-blames-car-dealers-for-lackluster-ev-sales/#comments Wed, 05 Jun 2013 13:50:04 +0000 http://www.thetruthaboutcars.com/?p=490915 Tesla’s Elon Musk found someone to blame for the lackluster sales of EVs, and the death of some EV makers: Car dealers, and their National Automobile Dealers Association NADA. “The auto dealers association is definitely creating some problems for us, making it harder to get things done,” Musk said at Tesla’s shareholder meeting with Reuters […]

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Picture courtesy greenoptimistic.com

Tesla’s Elon Musk found someone to blame for the lackluster sales of EVs, and the death of some EV makers: Car dealers, and their National Automobile Dealers Association NADA.

“The auto dealers association is definitely creating some problems for us, making it harder to get things done,” Musk said at Tesla’s shareholder meeting with Reuters taking notes. Tesla wants to sell its cars directly to consumers, which is against the law in most states. Attempts to have the law changed “met stiff resistance from dealer groups around the country,” Reuters says. Musk keeps trying.

Musk has said car dealers are bad advocates for electric cars because they rely mostly on gas-powered vehicles. Musk told shareholders that the traditional dealer model “didn’t work for Fisker, didn’t work for Coda. In the last 90 years, when did it work?”

NADA spokesman David Hyatt fired back:

“Industry experts say Fisker failed because it rushed its product to market before engineering problems were resolved. Coda did not receive government loans and was under-capitalized.”

“Thank goodness there are independent dealers left to try to help the customer. Manufacturers and brands may come and go, but the dealers are there for the long term.”

Car dealers are a very formidable lobby group. Fighting windmills would stand better chances.

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Tesla Factory Stores Under Fire From Dealer Groups http://www.thetruthaboutcars.com/2012/10/tesla-factory-stores-under-fire-from-dealer-groups/ http://www.thetruthaboutcars.com/2012/10/tesla-factory-stores-under-fire-from-dealer-groups/#comments Mon, 08 Oct 2012 18:31:41 +0000 http://www.thetruthaboutcars.com/?p=463005 Tesla’s sales model, with factory-run outlets selling directly to customers, is coming under fire while dealer groups such as NADA are citing the apparent illegality of factory-owned sales outlets. Dealers are worried that Tesla’s method, which allows for online reservations of vehicles in addition to the shopping mall showrooms, will marginalize their way of selling […]

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Tesla’s sales model, with factory-run outlets selling directly to customers, is coming under fire while dealer groups such as NADA are citing the apparent illegality of factory-owned sales outlets.

Dealers are worried that Tesla’s method, which allows for online reservations of vehicles in addition to the shopping mall showrooms, will marginalize their way of selling vehicles. This fear was articulated by Bob O’Koniweski, executive VP of the Massachusetts State Automobile Dealers Association, who told Automotive News

“If a manufacturer sees that Tesla is successful with this kind of business model, who’s to say they don’t break out their own EV product lines and create a separate system that bypasses dealers?…It’s extremely problematic.”

Tesla has apparently bypassed existing dealer franchise laws by offering online reservations if sales cannot be conducted on site. Dealers have asked four states to conduct investigations into the legality of Tesla’s sales model. Meanwhile, the chairman of NADA issued this rather ominous statement

“Tesla may not yet recognize the value of the independent, franchised dealer system, but as its sales increase, NADA is confident it will re-examine its business model…Other companies such as Daewoo did. All companies should be complying with existing laws in the same way dealers are required to.”

Tesla has denied that it is trying to reboot the existing sales model, with George Blankenship, their VP of Sales, telling AN “That’s the last thing on our agenda.”

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Used Car Prices Heading South http://www.thetruthaboutcars.com/2012/05/used-car-prices-heading-south/ http://www.thetruthaboutcars.com/2012/05/used-car-prices-heading-south/#comments Thu, 31 May 2012 13:56:16 +0000 http://www.thetruthaboutcars.com/?p=446988 Did we tell you a month ago to sell your used car now if you want to get the most mullah out of your clunker? We (or rather NADA) called the peak correctly. Used car prices are heading south. Said Jonathan Banks, senior analyst with the National Automobile Dealers Association (NADA) Used Car Guide: “The […]

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Did we tell you a month ago to sell your used car now if you want to get the most mullah out of your clunker? We (or rather NADA) called the peak correctly. Used car prices are heading south.

Said Jonathan Banks, senior analyst with the National Automobile Dealers Association (NADA) Used Car Guide:

“The trend of rising prices for used cars will reverse course in June because of declining gasoline prices combined with a normal seasonal slowdown in consumer demand for used cars.”

Model Year

Make/Model

Jan.

May

Jan.-May
(% Chg.)

June

 

June vs. May
($ Chg.)

June vs. May
(% Chg.)

2009

Toyota Camry

$11,510

$13,235

15%

$12,560

$675

– 5%

2009

Honda Civic

$10,987

$12,187

11%

$11,587

$600

– 5%

2011

Toyota Prius

$18,875

$21,225

12%

$20,325

$900

– 4%

2010

Hyundai Elantra

$10,742

$12,167

13%

$11,667

$500

– 4%

2011

Nissan Versa

$10,527

$11,702

11%

$11,252

$450

– 4%

2009

Dodge Caliber

$8,132

$9,157

13%

$8,807

$350

– 4%

2011

Ford Fusion

$14,237

$15,662

10%

$15,112

$550

– 4%

2009

Chevrolet Cobalt

$7,465

$8,565

15%

$8,265

$300

– 4%

Nada figures that  used-car values will decline by about 2 percent, while truck values will fall by about 1 percent. Prices for used compact and midsize cars will fall by an average of 2.4 percent, Nada predicts.

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Watch Out: Your Dealer Is In Trouble, And He Needs Your Money http://www.thetruthaboutcars.com/2012/05/watch-out-your-dealers-is-in-trouble-and-he-needs-your-money/ http://www.thetruthaboutcars.com/2012/05/watch-out-your-dealers-is-in-trouble-and-he-needs-your-money/#comments Mon, 21 May 2012 15:41:28 +0000 http://www.thetruthaboutcars.com/?p=445380 Five years ago, car dealers throughout the country were hit hard by carmageddon. Now, they are about to get hit again where it really hurts: In the workshop, where the real money is being made. The auto sales collapse of 2008 winds its way through the years like a diet through an anaconda. While showrooms […]

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Five years ago, car dealers throughout the country were hit hard by carmageddon. Now, they are about to get hit again where it really hurts: In the workshop, where the real money is being made. The auto sales collapse of 2008 winds its way through the years like a diet through an anaconda. While showrooms were empty five years ago, now it’s the service bays that are deserted.

Says a J.D. Power and Associates study quoted by Automotive News [sub]:

“The number of vehicles in operation that are 5 years old and newer will dip to 63 million this year, forecast to be the low point of the industry’s downturn and recovery, according to J.D. Power and Associates. Late-model vehicles traditionally represent the sweet spot for repair and maintenance work for dealership service departments.”

Why will this be more painful than empty showrooms? In 2011, the service and parts business represented 13 percent of overall sales for the typical dealership but contributed 72 percent of dealership operating profits, according to the National Automobile Dealers Association (NADA). Used car sales often contribute one third of the profits, new car sales often are loss leaders.

Dealer workshops would have no problem surviving the trough if they would have held on to owners of older vehicles. The servicing of older vehicles can be the most profitable part of the business, new vehicles on the other hand need less and less service. However, owners of older vehicles typically give dealer workshops wide berth.

If your car is out of warranty and still being serviced by a dealer, watch for serious upselling. They need your money more than ever.

 

 

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Sell Your Car Now, Or Forever Keep The Piece … http://www.thetruthaboutcars.com/2012/04/sell-your-car-now-or-forever-keep-the-piece/ http://www.thetruthaboutcars.com/2012/04/sell-your-car-now-or-forever-keep-the-piece/#comments Tue, 10 Apr 2012 15:28:44 +0000 http://www.thetruthaboutcars.com/?p=439182 Used car prices have been rising for a while to a degree that sometimes it can be cheaper to buy new than used. If you have been sitting on the fence, it could be time to hop on down. Used car prices are predicted to peak within the next two months. Already, deals on new […]

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Used car prices have been rising for a while to a degree that sometimes it can be cheaper to buy new than used. If you have been sitting on the fence, it could be time to hop on down. Used car prices are predicted to peak within the next two months.

Already, deals on new cars are not as common as a few months ago when carmakers splurged with incentives. Now, the National Automobile Dealers Association (NADA) Used Car Guide predicts that trade-in values on used cars will go all acme on you within the next few weeks.  Said Jonathan Banks, executive automotive analyst at NADA:

“The most advantageous time this year to trade in a used car will be April through May because values will be higher. Last year, used vehicle prices remained high through July because of a new-vehicle shortage stemming from the natural disasters in Japan, which led to a spike in demand for used vehicles. This year, used-vehicle prices will return to a more normal seasonal pattern.”

On the other hand, if you are not eager to sell, don’t. Keep in mind that NADA is the club of automobile dealers, and they want you to buy new even more than sell used. Because of carmageddon, supply of clean cars under five years is low and will remain low for a while.

Year Make/Model Apr Jan $ Increase  % Increase
2011 Kia Rio $9,100 $7,700 $1,400 15%
2009 Toyota Prius $15,675 $13,750 $1,925 12%
2009 Toyota Camry $12,900 $11,450 $1,450 11%
2007 Honda Civic $7,975 $7,100 $875 11%
2011 Mazda Mazda3 $12,100 $10,800 $1,300 11%
2009 Nissan Altima $12,675 $11,325 $1,350 11%
2010 Chevrolet Aveo $9,075 $8,125 $950 10%
2010 Ford Focus $11,225 $10,075 $1,150 10%
2010 Dodge Caliber $10,625 $9,600 $1,025 10%
2009 Chevrolet Cobalt $6,650 $5,975 $675 10%

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Get An All Expense Paid Sync And MyFord Touch Course. At Your Ford Dealer http://www.thetruthaboutcars.com/2011/02/get-an-all-expense-paid-sync-and-myford-touch-course-at-your-ford-dealer/ http://www.thetruthaboutcars.com/2011/02/get-an-all-expense-paid-sync-and-myford-touch-course-at-your-ford-dealer/#comments Mon, 07 Feb 2011 12:55:17 +0000 http://www.thetruthaboutcars.com/?p=383124 Ford brought two pieces of good news for their dealers at this year’s NADA meeting: The dealers will get more cars. And they will get more cash. But wait, there will be less … Ford will increase its production targeted at its U.S. dealers by 13 percent this quarter. If the market wants more, Ford […]

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Ford brought two pieces of good news for their dealers at this year’s NADA meeting: The dealers will get more cars. And they will get more cash. But wait, there will be less …

Ford will increase its production targeted at its U.S. dealers by 13 percent this quarter. If the market wants more, Ford will make more. They will even lay on more shifts, says the Wall Street Journal.

What usually makes dealers much happier: Ford will dole out extra spiffs. Ford dealers will get $50 for every vehicle they order with Sync and $75 if they order cars equipped with Sync and MyFord Touch. This “technology allowance” is meant to reimburse the dealers for the extra time it takes to teach customers how to use the in-vehicle technology.

Dealers had been complaining that the new technology eats up their precious time. Automotive News [sub] wrote recently that “delivering a new vehicle used to take a dealer 45 minutes. It now could take up to two hours for some. That’s productivity time lost by the salesperson who could be making another sale instead of teaching a customer three different ways to turn on or adjust the air conditioning.”

So that was the good news. “Later Sunday, Czubay and Jim Farley, Ford’s global marketing chief, told Lincoln dealers that Ford wants to reduce the retail network from 434 showrooms to about 325 in the country’s 130 largest markets,” writes the Freep. There had to be a catch.

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