New developments in NCAA rules allow brands to ramp up their use of student-athletes in advertising. This poses a strong opportunity for companies across sectors—even auto dealerships. But there are risks to consider. In this article, we will explore the NCAA’s NIL deal, best practices to keep in mind when working with student-athletes, and the benefits businesses can expect to see as a result. 

What Is an NIL Deal? 

NIL stands for Name, Image, and Likeness. It refers to college athletes’ right to control and profit off the use of their name, image, and likeness. Recent policies expanded the athletes’ rights within the NCAA and allowed them to increase the monetization of their personal brand. An NIL deal is an agreement between one of these student-athletes and a company, where the company can advertise using the athlete’s NIL, and the student receives a profit in return.¹

How Do NIL Deals Affect Car Dealerships?

In many college towns, local auto dealers are allowed to provide vehicles to student-athletes in exchange for promotional and advertising opportunities. This has the potential to be an effective marketing method, but it is important to keep in mind the risks—you may have a teenager driving an expensive vehicle, and you want to make sure your vehicle is adequately protected. Otherwise, your dealership can have excessive liability in the event that something happens to the car. Note that state laws may vary on this topic, so be sure to double-check any local fine print. 

Additionally, while a typical lease involves a customer paying for the driven miles per year, this may not be the case with an NIL deal. Some dealerships may structure it based on an amount of time, allowing the student-athlete to rotate between different cars on a semi-regular basis with no mileage stipulations. It can also benefit the student, allowing them to essentially test drive and experiment with various vehicles before hopefully purchasing one down the road.³ 

Best Practices to Avoid Risk in an NIL Deal

Always Have a Formal Written Lease Agreement 

Without a lease agreement, the dealership is responsible for liability beyond what is covered for the car, even when it is loaned to a student-athlete. But the lease agreement can help protect the dealership by obtaining an additional lease coverage policy, or by placing additional liability on the bank that backs the car loan. 

Check the Driver’s License, Background, and Insurance 

Make sure to pull a motor vehicle record (MVR) on the driver to see their history and any accidents—this can help ensure you are entrusting the vehicle to a safe and reliable driver. Additionally, require the driver to obtain and prove insurance.   They should at a minimum have the standard liability 100/300/100 policy coverage ($100,000 coverage per person, $300,000 in bodily injury coverage per accident, and $100,000 in property damage coverage per accident).

Create a Usage Agreement 

Make sure you are clear in the agreement on who can drive the vehicle (i.e. excluding Family members and friends). Consider extending this provision to lease agreements, where such clauses might not be standard.²

How an NIL Deal Can Benefit Your Dealership

As you may expect, you will have the occasional customer who is a fan of the athlete or team and comes in to purchase a car because of the association with your brand. But beyond these few additional sales, working with a student-athlete can help you gain social media followers and engagement, increased shares of posts, and other forms of brand awareness that are harder to track but ultimately invaluable to the growth of your business. Working with a student-athlete can help your brand grow, even when it is not directly connected to a purchase from a team fan.³ 

Here are a few notable NIL partnerships (past and present) with athletes from dealers throughout the country:

• Kendall Auto Group, Bo Nix (Oregon Ducks Quarterback)
• Mark Wahlberg Chevrolet of Columbus, Marvin Harrison Jr. (Ohio State, Wide Receiver) 
• Sarchione Auto Gallery, C.J. Stroud  (Ohio State, Quarterback) 
• Hollingsworth Richards Ford, Myles Brennan (LSU Football, Quarterback)

Partner With ACV Auctions for Top-Quality Used Car Inventory

A NIL deal is a strong publicity option for a dealership that is hoping to grow its business. As you look to expand your footprint, you will need the inventory to match. Work with ACV Auctions to fill your lot with the best vehicles available. Each vehicle on our site has been personally inspected by a member of our team and comes with a detailed report to match. That way, you can be sure about what you bid on. Learn more and get started today. 

Sources 

1. “NCAA Name, Image, Likeness Rule.” NCSA. Retrieved February 16, 2024. https://www.ncsasports.org/name-image-likeness 
2. AutoSuccess. 2022. “NIL Spells Challenge for Auto Dealerships.” AutoSuccess. Retrieved February 16, 2024. https://www.autosuccessonline.com/nil-spells-challenge-for-dealerships/  
3. Wittry, Andy. 2022. “Here’s how taxes, liability, and ROI factor into NIL deals for cars.” On3Nil. Retrieved February 16, 2024. https://www.on3.com/nil/news/cj-stroud-ohio-state-football-nil-car-deal-g-wagon-phil-jurkovec-zay-flowers-boston-college/