DECEMBER 2018 www.FIADA.com
Information and Insight for Florida Used Car Dealers
GET IN THE GAME The New Year is almost here. Are you ready? Get your strategy together and your focus set for 2019.
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December 2018 — Independent Dealer — 1
January 10-11, 2019 FIADA Town Hall & Board Meeting
July 19-20, 2019 FIADA Town Hall & Board Meeting
January 16-18, 2019 2019 Winter/Spring NIADA Leadership Session
September 23-26, 2019 National Leadership Conference & Legislative Summit
April 12-13, 2019 FIADA Town Hall & Board Meeting
October 17-19, 2019 FIADA Convention
June 17-20, 2019 NIADA Annual Convention & Expo
Get more details and register at www.FIADA.com and www.NIADA.com
The Westin Ft. Lauderdale 400 Corporate Drive, Fort Lauderdale, Florida 33334 Phone: (954) 772-1331 Rate: $179 + tax (single/double occupancy) Free self-parking, free wifi in guest rooms Thursday Town Hall and Friday Board Meeting
Gaylord Texan Dallas, TX
DoubleTree by Hilton St. Augustine Historic District 116 San Marco Ave, St Augustine, FL 32084 Phone: (904) 825-1923 Rate: $199 + tax, single/double occupancy Parking $12 (includes free shuttle & wifi)
The Venetian Las Vegas, NV
2 — Independent Dealer — December 2018
Grand Hyatt Tampa Bay 2900 Bayport Dr, Tampa, FL 33607 Phone: (813) 874-1234 Rate: $149 + tax, double occupancy; $174 triple occupancy; $199 quad occupancy Free self-parking, free wifi in guest rooms
Ritz Carlton Hotel, Pentagon City Washington, DC
Rosen Plaza Orlando, 9700 International Dr, Orlando, FL 32819 Phone: (407) 996-9700 Rate: $159 + tax, single/double ($20 additional person) Free self parking for overnight guest; $8 self parking for day visitors; free wifi in guest rooms
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Dealer Independent
MAILING ADDRESS 1840 Fiddler Court Tallahassee, FL 32308 TELEPHONE (850) 385-2712 (800) 237-0448 FAX (850) 385-3251 WEBSITE www.FIADA.com EXECUTIVE COMMITTEE Brad Joel President Lisa Compagno Senior Vice President Scott Lanier, CMD Chairman of the Board
Contents December 2018
For members of the Florida Independent Automobile Dealers Association
C O L U M N S & F E AT U R E S 4
President’s Message Brad Joel
Jenay Rhoads Treasurer
6
Executive Director’s Message Lisette Mariner, CAE
Luis Giraldo Regional Vice President
8
Membership News
10
Back to Basics Don't just talk about goal setting and business planning, make it happen. Terry Myers helps you get started.
12
Added Insight on the Hope Scholarship Program We have been talking about it for a while, but now that the Hope Scholarship Program has had time to gain traction there are a few questions that might need clarification.
16
One on One With Rob Sickles Independent Dealer asked the FIADA Outside General Counsel Rob Sickles a few questions and the answers could help your dealership stay prepared.
20
Renewal Reminder for Franchised Dealers! If you are a franchise dealer, t's time again to renew your license. The Florida DHSMV wants you to remember a few parts of the process.
24
Preparing Now for a New Year It's so easy to get caught on the hampster wheel and spin right into the next year without reflecting on where you have been. Don't run in circles. Take these suggestions on starting off 2019 with a bang.
26
The Conflict of Interest that May Hurt Your Business Sometimes, vendors you think want to help actually have ulterior motives. Evaluate claims, and the intent of the source, before taking action.
28
A Look At Current Legal Issues Attorneys Tom Hudson and Nicole Munro's monthly collection of legislative and regulatory highlights to keep you in compliance.
Frank Fuzy Secretary
Brandi Noegel Regional Vice President Steve Marbais, CMD Regional Vice President Trever Varney Regional Vice President Jim Winterick, Sr Regional Vice President FIADA STAFF Lisette Mariner, CAE Executive Director Terry Myers Educational Instructor Jason Berthiaume Education and Events Manager Christy Taylor Editorial/Advertising
POSTMASTER:
Send address changes to
FIADA • 1840 Fiddler Court Tallahassee, FL 32308 (850) 385-2712 • Call/Text: (800) 237-0448 Fax (850) 385-3251 • www.FIADA.com The Independent Dealer is a publication of: Florida Independent Automobile Dealers Association, 1840 Fiddler Court, Tallahassee, FL 32308 The magazine is published every month in Tallahassee and distributed to Florida new, used, wholesale and lease/retail car dealers. Advertising rates are available upon request. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of Independent Dealer or the Association. Likewise, the appearance of advertisers, or their identification as members of FIADA, does not constitute an endorsement of the products or services featured.
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30 Industry News News and headlines of interest to the Florida Used Car Industry and beyond. December 2018 — Independent Dealer — 3
FROM THE PRESIDENT
How Can We Help You in 2019? BY BRAD JOEL, FIADA PRESIDENT
A
s we near the end of 2018, I hope that all of you had a good year. December is a time to close out our books and prepare for the next year. It is also a perfect time to make sure you are using all the various things that FIADA has to offer. Let me profile just some of this for you.
FIADA.com Do you know what’s available at www.FIADA.com? You can take advantage of training, self audits, lists of vendors, upcoming events, industry resources and many other tools to help you run your business. The Resources tab alone contains a library where you can download the dealer training school manual, templates to develop red flags rule policies, safeguards rule guidelines, sales tax information, the department memo on allowable uses of dealer plates and more. You’ll also find a helpful links section, news archive and old issues of the Independent Dealer magazine. The website also has a special “members only” section that allows you to create a profile and connect with other members. If you haven’t been to www.fiada.com lately then you need to log on now! Dealer Training School FIADA is the leading provider of new dealer training and continuing education for dealers in the state of Florida. The best news is, as a member, you can access it all as a member benefit. We are fortunate enough to have Terry Myers as our lead instructor in the Dealer Training School. Terry is a walking encyclopedia and graciously shares his knowledge with new dealers in the two-day pre-licensing class. Kevin Scott is a second-generation car guy and is also an integral part of the FIADA DTS program. His courses are taught from first-hand knowledge as both a dealer, vendor and industry expert. Members can attend a Dealer Training School class as a refresher or send a staff member for complete training. We also offer courses with a Title & Registration focus as well as for Continuing Education credit and everything is also available on-demand, online at https://www.fiada.com/page/DTS Coupons We talked about coupons last month, but it doesn’t hurt to say it again. Your membership provides you with over $6,000 in 4 — Independent Dealer — December 2018
discounts in an easy to use mobile app! There are $1,000.00 in auction buy/sell fees and over $5,000 in discounts on advertising, software, office supplies and other services.
Vendor Relationships FIADA is continually working to build relationships with industry vendors that bring value to your membership. Besides the obvious discount programs and coupons, the prestige of being a FIADA member can give you a legup on your competition when it comes to working with vendors. When you get involved with FIADA, you are able to rub shoulders with many of the leaders of these essential companies. The connections you can make at our networking events are unmatched. Also, our “Preferred Vendor” program has helped recognize the top companies and businesses in a variety of industries who are so excited to work with you as a FIADA member that they provide member-only programs, services and in many cases discounts. Insurance, credit reporting, auto parts and shipping are just a few of the industries that FIADA has preferred partner programs available for members. Meetings and More You do know that FIADA has quarterly Town Hall and Board Meetings all over the state, right? The town hall meetings are completely FREE to attend and not only include an informative education session on industry-specific topics, but also a free lunch! The Town Hall meetings and Board Meetings are very informative and provide intimate settings with both vendors and board members who are there to help guide you on many issues. The Annual Convention & Trade Show is back in 2019! The theme is yet to be revealed, but mark your calendar for Oct. 17-19, 2019 to be in Orlando at the Rosen Plaza Hotel for this can’t miss event. With all that in mind, bring on 2019! It’s going to be a great year. Brad Joel FIADA President www.fiada.com
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December 2018 — Independent Dealer — 5
EXECUTIVE DIREC TOR’S MESSAGE
These are a Few of My Favorite Things BY LISET TE MARINER, CAE, EXECUTIVE DIRECTOR
I
started working with the FIADA board of directors June 14, 2011. My first order of business was to attend the NIADA convention in Las Vegas to get to know industry leaders from around the country. See how we fit into the national picture. Then I hit the ground running with my first FIADA Convention that October. I quickly learned that FIADA is a family of wonderful dealers that give of their time to help the industry grow.
•
Educating legislators
•
The FIADA Board of Directors and Committee Members
•
Working with regulators to solve problems
•
Talking with dealers about successes and failures
•
When dealers connect with the mission of the FIADA and help grow the association
• Partnering with We were digging industry suppliers to ourselves out of a create more value for financial hole and "I quickly learned that FIADA is a family of members it was my mission wonderful dealers that give of their time to to help us find • Keeping the resources to be Association financially help the industry grow." a healthy strong healthy organization. We • Recruiting had to build our dealers to be an active participant of the association partnerships and restore faith in the dealer community. My background is in association management. I came from the Florida Society of Association Executives (yes, there is an association for associations). Before that I was with the Florida Chamber of Commerce and the Florida Medical Association. I have a wealth of experience working with statewide organizations and representing key groups. Here are a few of my favorite things to do for FIADA: • Connecting dealers with the right resources
I hope you have a wonderful holiday season and get to enjoy a few of your favorite things as we say goodbye to 2018 and welcome 2019. Remember if you have any feedback to let me know at lmariner@fiada.com or text or call 800-237-0448. I look forward to continuing to work with you to make FIADA the best organization out there representing the independent dealer.
Registration is now open for Digital Dealer 26! Digital Dealer will be back in Orlando, April 9-11 at the Orange County Convention Center. Go online to https://www.digitaldealer.com/ conference/attendee/register/ to register now. Use code EIRFFIADA100 to get $200 off registration. 6 — Independent Dealer — December 2018
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December 2018 — Independent Dealer — 7
MEMBERSHIP NEWS
New Members
NOVEMBER 2018
ABT KEYSTONE AUTO LENDERS LLC
HHOTT CAR SALES
PALM BEACH MOTORS
XLFUNDING LLC
Jupiter, FL Thomas Rosenberg Sponsor: FIADA
Pompano Beach, FL Howard DeWolfe Sponsor: Independent Dealer
Lake Worth, FL Adam Rafael Sponsor: Jason Berthiaume
Indianapolis, IN Garrett Weyrich Sponsor: FIADA
CASH AUTOMOTIVE GROUP Sarasota, FL Tyler Cash Sponsor: FIADA
INVESTMENT AUTOMOTIVE GROUP DBA GREAT DANE MOTORSPORTS
JOSEPH CLEMONS
Boone, IA Sponsor: Kevin Scott DEALER CONSULTING, LLC
Clermont, FL Kevin Scott Sponsor: Kevin Scott G & A AUTO SALES
Oakland Park, FL Guetry Louis Sponsor: Mark Miller Case Auto GLOBEX AUTO SALES
Orlando, FL Kevin King Sponsor: FIADA.com
Renewing Members
Pompano Beach, FL Stuart Siegle Sponsor: Intl Auto Group JD'S MOTORS
Edgewater, FL Jade Stone Sponsor: Kevin Scott
PARADISE AUTO SALES
Navarre, FL Tracy Brewer Paradise Auto Sales Sponsor: FIADA
Rejoining Members NOVEMBER 2018
GAINESVILLE AUTO SALES & TRIPLE D'S HARDWARE & SUPPLIES INC. SERVICE Interlachen, FL Weston, FL Jim Walker Darin Richards Sponsor: John Cousins/Dealers Auto Sponsor: FIADA Auction WHEELS AND KEELS, LLC
NELIVAN AUTO
Niceville, FL Thomas Arena Sponsor: FIADA
Altamonte Springs, FL Leo Pena Sponsor: FIADA OPUS VEHICLE TITLES AND REGISTRATIONS
Indianapolis, IN Doug Pillow Sponsor: FIADA.com
WHEELZ AND DEALZ
HARTLEY MOTORS Arcadia, FL Stephen Hartley Sponsor: FIADA
Port St Lucie, FL Glen ZImmerman Sponsor: Jeff McClintok/ASC
NOVEMBER 2018
50+ Year Members John Rogers Used Cars
Orlando, FL
40+ Year Members ABC Autos, Inc. Southside Autos, Inc.
Tampa, FL Orlando, FL
30+ Year Members Richard Bell Auto Sales
Deland, FL
20+ Year Members Integrity Auto Sales, Inc. United Acceptance, Inc.
Port Orange, FL Smyrna, GA
10+ Year Members Appearance Plus Auto Sales dba C & C Cars Auto Data Direct AutoMaxx Central Florida Used Car Mart Gibson Truck World Reliable Used Cars, Inc. dba Deland Reliable Cars Wayne Reaves Computer Systems
Pinellas Park, FL Tallahassee, FL Sarasota, FL Mascotte, FL Sanford, FL Deland, FL Macon, GA
8 — Independent Dealer — December 2018
Under 10 Year Members Autocar Financial, LLC CARFAX Corvette Experience Courtesy Auto Center First Place Auto Sales, Inc. FirstSun Financial, Inc. Gainesville Auto Sales & Service Gator City Motors LLC HH Sales, LLC Irotema Holdings LLC Lane Mashburn Inc. dba Amelia Auto Mart Lovering Auto Sales Magna Auto Sales Mattas Motors MITS at CMI, LLC National Auto Auction Association National Auto Lenders, Inc. Parkway Wrecker Service The Car Guys Thoroughbred Dealer Services Used Car Supermarket Vehicle Clearing House
Davie, FL Centreville, VA Oakland Park, FL Longwood, FL Gainesville, FL Jacksonville, FL Interlachen, FL Gainesville, FL Jacksonville, FL Land O Lakes, FL Fernandina Beach, FL Lakeland, FL Titusville, FL Punta Gorda, FL Largo, FL Frederick, MD Miami Lakes, FL Tallahassee, FL Melbourne, FL Flowery Branch, GA Tallahassee, FL Winter Garden, FL www.fiada.com
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December 2018 — Independent Dealer — 9
BACK TO BASICS
What are Your Long-Term Plans? BY TERRY MYERS
It's fun to dream about the future but less exciting to plan for it. However, if you want to turn a dream into a reality you need a realistic way to make it happen.
W
here do you see your dealership one, three or even five years from today? Will you have the customers you want and need to support those goals? Can you ‘wish’ this to happen or do you have a plan to "make" it happen?
Most of us realize the value of goal setting and business planning. We even have the best of intentions to actually do it! But, do we? What usually holds us back is not knowing where to start and then how to do it. Hey! I am no different than you. This is not a fun project. It takes work. Where do we start? First let’s look backward over this past one to five years, one year at a time and month by month. What do the records say? Use this chart to fill in your personal data. YEAR 2018 2017 2016 2015 2014
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Next. Review each year month by month. For example, Jan 2018-2014. Ask yourself, “Why this sales number? Did anything unique happen this ‘particular’ month to affect this month’s sales? Is this something I see repeating each year in this month? If the answer is yes, then what can I do the month prior to maximize the income and/or minimize the expenses in this same month of 2019-2023? Write it down. Then, project your realistically achievable new sales or financial goal for each month, year by year. Visualize the month taking place and the events unfolding. Adjust as needed. YEAR 2019 2020 2021 2022 2023
JAN
FEB
MAR
APR
10 — Independent Dealer — December 2018
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
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Finally, as each new month happens, take special note of the results. Write down any new event that you held or the community around you held that may have affected that month’s results. Were there any national events that may have affected your intended results? Remember September 11, 2001, the national financial melt-down events, sickness? No detail is too small to help you plan ahead for next year. If you create this in an Excel spreadsheet, you may ‘Insert Comments’ directly into each month’s cell. These notes will help you with preparing for next year’s sales and activities.
the answers mean. Only you can decipher what happened or think will happen in your future. To truly get a picture of the future, keep up to date with anything that has to do with your industry. Read anything and everything you can get your hands on from the FIADA, NIADA, Used Car News, Auction
newsprint, magazines and regulatory agencies. If you are not active in your associations then you are leaving money on the table. What are your long-term plans? “What you know makes you money. What you don’t know costs you a fortune.”
Articles are the opinion of the author and are not intended to be legal or accounting advice. The intent is to share thoughts and concepts that help the business owner(s) find new and perhaps revisit, ways to be as successful as they are capable of being. Terry can be reached at (727) 8047375. Email: tmyers@floridaautodealerschool.com. Feedback is appreciated and encouraged. Terry LB Myers, author, lecturer, FIADA instructor, FADS owner/instructor.
Or do it by hand, on a calendar or sheet of paper. Clarity only comes from putting it down in writing. When you attend special events, such as auctions, conventions, etc., capture ideas you might want to incorporate into your future planning. The national/state convention this year in Orlando, had some major eyeopening future changes explored and their timing. Investigate how ideas like these might help you achieve your future goals. Insert the ideas into your calendar. We regret more what we did not do than…what did not work as we thought it should. Remember you do not make mistakes. You find the right way to do something or the right way ‘not’ to do something. No one can do this for us. There are plenty of fancy-schmancy business planning tools we can spend a lot of money on and still have no idea what www.fiada.com
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December 2018 — Independent Dealer — 11
R E G U L AT I O N S & C O M P L I A N C E
Added Insight on the Hope Scholarship Program The Hope Scholarship Program is moving full steam ahead. Here are a few frequently asked questions from dealers over the past few months.
O
ct. 1 marked the official launch of the Hope Scholarship Program created by the Florida Legislature. A priority of leadership in the Florida House of Representatives, the Hope Scholarship gives public schoolchildren who have been victims of violence or bullying at school, the opportunity to transfer to another public school or attend an eligible private school. Scholarships are funded by dollar-for-dollar tax credits of up to $105 on the state sales tax on due at the time of purchase of an eligible vehicle in Florida. Automobile dealerships, tax collectors and private tag agents are required to provide the Hope Scholarship Program Contribution Election form (DR-HS1) to the vehicle purchaser at the time of the transaction and allow the purchaser to make the election. Since the program began, more than $4 million has been collected for the program, according to Step Up For Students, the nonprofit organization administering the program. “We are encouraged by the enthusiastic response to this new program from car buyers and automobile dealers,” said Heidie Nesset, who as director of strategic partnerships at Step Up For Students is leading the roll out of the program. “Thanks to their generosity, even more Florida students will be able to access the safe learning environments they need to find success.” As the second reporting and remittance period approaches, a list of frequently asked questions from automobile dealers is below: What do I do with the DR-HS1 forms I collected from customers? 12 — Independent Dealer — December 2018
The Hope Scholarship Contribution Election (form DRHS1) remains part of your internal record keeping for future reference. You do not need to send the forms along with your reporting to the Department of Revenue or Step Up For Students. How can I make my payment? The preferred payment method is through electronic submission. Step Up For Students has created a secure, online payment portal to submit your payment electronically. You can access the portal at www.StepUpForHope.org. If you would like to mail your payment, please send it to Step Up For Students, ATTN: Hope Processing, PO Box 54429, Jacksonville, FL 32245. I have a security feature on my bank account, what is Step Up For Students’ Company identification number to initiate payment and authorize a payment to Step Up For Students? Step Up For Students Hope Scholarship, Company ID: E593649371. If you need a W-9, please contact HopeScholarshipInfo@sufs.org. Who do I make my check out to? Checks should be made out to “Step Up For Students” for your Hope Scholarship contribution collections. I want to overnight my payment to Step Up, what is the street address? Step Up For Students, ATTN: Hope Processing, 4655 Salisbury Road, Suite 400, Jacksonville, FL 32256 Can I submit my reporting documentation to the Department of Revenue electronically? Continued on page 14 www.fiada.com
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December 2018 — Independent Dealer — 13
HOPE SCHOLARSHIP continued from Page 12
Yes, you can submit at https://taxapps.floridarevenue. com/HopeScholarship. You will need to register as a new user if you’ve not used this electronic reporting portal before. For the Department of Revenue’s reporting page, do I need to create multiple user log-ins for each of my locations? The DOR’s DR-HS2 user login information is not tied to the dealership or a single FEIN. A single user can submit reports for multiple locations. There is no need to create a log-in for each. I’ve already submitted my Hope Scholarship Program, Dealer Contribution Collection Report (DR-HS2) to the Florida Department of Revenue, why is Step Up For Students also asking for it? Step Up For Students is statutorily required to collect the DR-HS2 reporting documentation along with your payment. If you’ve submitted your DR-HS2 electronically to the Department of Revenue, the confirmation you receive is sufficient to submit along with your payment. You can submit an electronic version of the DR-HS2 to
HopeScholarshipInfo@sufs.org. If you are mailing your payment, please include your DR-HS2 report along with your mailed payment to Step Up For Students. How do I print the DR-HS2 Submission Confirmation page to send to Step Up For Students? Please print the page as a PDF, take a screen shot or snip a picture. You can also print a hard copy and scan the document to submit the documentation electronically. I use a DR-15EZ for my sales tax reporting, where do I list Hope credits? The Department of Revenue did not update the DR15EZ to reflect credits taken for the Hope Scholarship. You will need to use the DR-15 if you have Hope credits to report. I did not collect any Hope contributions this month, do I need to complete the DR-HS2 reporting? If you do not have any Hope contributions, no DRHS2 reporting is required. In fact, the electronic reporting portal will not allow for a $0 entry.
Continuing Education for 2019 Do you need to renew your CE credits? FIADA has a variety of FREE and affordable CE compliant courses that count as credit and provide a perfect opportunity for you and your team to brush up on the basics. Get course details and register at www.FIADA.com
Online: FREE for members | $39.95 for non-members In Person: $79 for members | $99 for non-members Register by phone at 1.800.237.0448 Register online at www.FIADA.com
In Person Course Schedule: Tampa
Ramada Inn 11714 Morris Bridge Rd,
March 1, 2019 and April 5, 2019
Jacksonville
Orlando
Manheim 10817 New Kings Road
Manheim’s Central Florida Auto Auction 9800 Bachman Road,
March 6, 2019
March 8, 2019
14 — Independent Dealer — December 2018
Tallahassee
Oakland Park
Ocoee
1840 Fiddler Court
The Corvette Experience 4090 NE 9th Ave
Manheim Ocoee 11801 W Colonial Dr
March 11, 2019
March 18, 2019
March 29, 2019
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DON’T IGNORE YOUR TAXES
UNTIL IT’S TOO LATE. OUR SERVICES • Florida sales tax audits, appeals and litigation • Criminal sales tax defense • Corporate sales and transactions support
• IRS services including audit, appeals, collection, tax court litigation • Tobacco tax, wholesale alcohol tax, and other
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tax issues
Call 888.966.8216 or visit www.MSDTaxLaw.com | www.FloridaSalesTax.com
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PARTNERS: Joseph C. Moffa, CPA, Esq. | James H. Sutton, Jr., CPA, Esq., LLM Gerald J. Donnini II, Esq., LLM | JerryDonnini@FloridaSalesTax.com OFFICES: Fort Lauderdale, Tampa, Tallahassee December 2018 — Independent Dealer — 15
MEMBER BENEFITS
one –on– one with
ROB SICKLES T
FIADA Outside General Counsel
he technical assistance line and access to an attorney that specializes in the automotive industry is a major FIADA member benefit. Attorney Rob Sickles has been helping dealers for over two decades and brings valuable legal experience to the Association as the Outside General Counsel. To spotlight this member benefit, Independent Dealer asked him a few questions that provide some interesting insight into the industry and maybe your dealership.
How long have you been working with car dealers and operations. Steve thought about this for a few minutes and how did you get introduced to the industry? he said that I needed to learn it because we were going to be I have been representing automotive dealers for almost representing the stores that Sonic had just purchased. 20 years. My involvement with dealers started in 1999 when What types of dealers do you work with? (franchise, I was an associate attorney. One of the partners at the independents, BHPH, large, small, etc.) time, Steve Burton, was friends with the owner of a Ford I work with all types of dealers. I have clients that are dealership that had just been sold to Sonic Automotive, franchise dealers and independent dealers. I even have Inc. At the time Sonic had just a few wholesale dealer clients. moved into the Florida market I also represent buy here-pay Rob Sickles (L) receives the Man of the Year and they did not have Florida here dealers and some finance Award from Scott Lanier (R). counsel. The partner had arranged companies that purchase paper a meeting with the general counsel from dealers. The size of these at Sonic and I was asked to prepare clients range from giant companies a memo outlining the issues that with operations across the country auto dealers in Florida regularly to the smaller family run stores. faced so that the partner could speak intelligently about the issues When did you start working with during this meeting. FIADA? After spending a few hours I got involved with FIADA in looking into the issues, I went back 2006. At that time I had quite a to the partner and told him that few dealership clients and one there was no way I was going to be of the independents that I was able to put together a memo on the representing was a member and he issues because there were too many suggested that I attend a meeting of them. I explained that there were Federal and state that was here in Tampa. After that I attended a few more laws that regulated dealers and that there were 5 different meetings and became the outside general counsel for state agencies that regulated some aspect of a dealer’s FIADA in March of 2007. 16 — Independent Dealer — December 2018
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Do you notice a difference between dealers who are FIADA members and those who are not? In some ways yes and in other ways no. In my experience dealers that are members of FIADA are more inclined to help other dealers and the industry as a whole. They do not necessarily view other dealers as “competitors” in a battle for the same customers, but rather they tend to try and do what is best for all dealers. FIADA members also seem to be a little more proactive in trying to avoid litigation before it becomes an issue. They seem to understand that compliance efforts can really payoff. What do you enjoy most about working with dealers? It is my clients. I have represented some of them for almost 20 years and I view them as friends. It helps that most dealers that I work with are just fantastic people. It seems like this industry attracts those that are outgoing and charismatic, but that also have business sense. In my experience they tend to want to do the right thing and despite public perception, more often than not dealers treat their customer’s fairly when a problem arises after the sale. What is one thing you wish dealers would do to protect themselves from litigation? Have a yearly compliance review of the dealership’s sales, financing and if applicable collections operations. The old saying that an ounce of prevention beats a pound of cure is absolutely applicable here. What's the most asked question through the technical assistance line? There are a lot. I will say that advertising issues and customer complaints top the list. It is tough because I cannot review ads for dealers through the technical assistance line and I hate telling them I can’t do it. Occasionally, dealers also www.fiada.com
want to ask me about an ad that a competitor is running and whether it is legal, which is not something that I can discuss either. The customer complaint issue is much easier because I can talk the dealer through potential outcomes. The best advice I try to leave them with is to make a business decision on the customer, not an emotional one.
Motor Vehicle Dealer Handbook is another. What was the most difficult case you have been a part of? The class action cases are always tough. Dealers that are open to several years of liability for something that was in a form present difficult defense issues and the stakes are very high. In some instances it is literally a bet the company situation. When we are able to have success in those cases, it really matters to the dealers and their employees.
What's the biggest legal issue/threat facing dealers today? It is a broad category, but consumer claims top the list. More lawyers are focusing on the industry as a whole and the result is that every action a dealer takes is under scrutiny. The claims arise in a variety of contexts from advertising issues, to contracting issues, to post sale collections and credit reporting issues. What do you recommend for dealers to stay compliant (e.g., attending FIADA meetings, reading trade publications, etc.)? Attending FIADA and other industry group meetings is a big help. Finding a lawyer that you trust and that knows your business and goals is also key. Not every dealer approaches compliance the same way. Some say “what’s the risk of me doing X?” and then they make a decision to do X or not do X based on the potential consequences of the act. Others want to be 100 percent in compliance with every law, even if it means that they are taking the most conservative approach to everything. There is not really a right or wrong approach. It just comes down to business risk tolerance in most instances. Are there general resources, like websites or hotline numbers, that you would suggest dealers could use for minor questions or just for review? The Federal Trade Commission’s web site has some good resources. (www.ftc.gov) The Florida DMV’s
How do the outcome of cases involving dealers effect the rest of the industry? There are a couple of ways. First, if the case goes to the appellate level, it can establish law for the entire state. We did that with a case regarding the applicability of Florida’s usury statutes to automotive sales a few years ago. While the statutes seemed to carve out the rates charged in installment sales contracts, there were no cases on this issue. We won the case at the trial level for my client, and we ultimately won the appeal. This case expressly permits licensed installment sellers and sales finance companies to collect interest in excess of 18%. In another situation a few years ago, a dealer retained counsel that was not familiar with industry issues and lost an appellate case involving a lienholder’s ability to post a bond to secure the release of a vehicle from a mechanic’s lien. Based on that decision, lienholders were not able to bond vehicles out of mechanic’s lien situations without hiring a lawyer and filing a lawsuit. This increased the costs of these situations to the industry as a whole. Ultimately, FIADA lobbied to get the law changed and now lienholders can post bonds without filing a suit, so the association responded to the bad decision; however the decision did impact the industry for a period of time.
December 2018 — Independent Dealer — 17
ARE YOU COMPLIANT? Can You Answer Yes to the Questions Below?
Yes/No
Possible Fine and/or Penalties $1,000/each to $46,000+/ each
Do you make each customer of a ‘qualified’ vehicle aware they may redirect $105, or a lower qualified amount, to the HOPE SCHOLARSHIP fund?
$1,000/day to $10,000
Are you transferring ownership within the required 30-days?
$1,000/each
Are you collecting, electronically reporting and remitting sales tax by the end of the business day prior to the 20th?
$0.00 collection allowance, + Taxes, + Penalties, + Interest
Are you checking each customer against the SDN list to obtain permission of how to proceed?
Million$$$ in fines, Loss of assets business & personal, + too many years in jail
Are you following state and federal Repossession laws?
Court Fines & Attorney Fees
Do you obtain HSMV 84061 for customers who do their own Title & Registration in another state or country?
$1,000/each
Do you obtain a copy of the customer’s Notarized DOR-123 as proof you had a right to charge at that state’s rate?
Taxes, penalties & interest on what was not exempt without the DR-123
Do you provide and obtain a signed Pollution Control statement to retail customers and a signed one for the file?
$1,000/each
Do you have a Motor Vehicle Retail Installment Seller license and remember to renew it each even year December?
$500/each unlicensed transaction from January 1 of the odd number year
Are you paying off liens of trade-ins within the required 10 business days, as per f.s.319.24 (5)(a)?
Sanctions/Fines, Court Costs, Attorney Fees, Jail
Are you carrying forward all Brands of acquired vehicles to the retail customer on HSMV 82040 and providing the required Affidavit they signed acknowledging the brand?
Reimburse customer for Major Repairs, Principal, Interest
Are you reporting qualifying Cash or Cash Equivalent Transactions to the IRS on IRS 8300, with a Copy to the Florida DOR and a letter to the customer within the required time frames?
$25,000/each nonreported qualifying event
When you advertise a vehicle for sale, is it in one of your Designated Display slots?
$1,000/each
Do you take a Tax Credit for qualified Repossessed Vehicles on the DR95B within the allowable time frame or lose that benefit?
Credits may only be applied within 12-months of the qualifying event
Are you able to timely produce records of all retail and wholesale transactions within the last 5-years when asked in an audit?
$1,000/each
Do you dispose of private information as required by the Federal Disposal Rule?
$3,895/each
Do you have a Bill-of-Sale and required Odometer Statements for every vehicle purchased and sold?
$1,000/each
Do you always know what your Employees, 1099 and W-4, are doing under your authority?
Your entire business and more
PAID ADVERTISING
Do you have the NEW 2018 FTC BUYER’S GUIDE displayed on EVERY QUALIFIED used vehicle?
Any fine is too much. This is a partial list of rules, laws and regulations dealers must be aware of and comply with. It is nowhere exhaustive. Fines, penalties, jail time and bad publicity can jeopardize your business and your future! 18 — Independent Dealer — December 2018
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December 2018 — Independent Dealer — 19
F R O M T H E S TAT E
•
Renewal Reminder for Franchised Dealers!
• • •
The Florida DHSMV reminds dealers the licensing period is from January 1, 2019 to December 31, 2019.
T
he Department of Highway Safety and Motor Vehicles reminds franchised dealers (VF) and service facilities (SF) to renew their dealer license prior to their license expiration on Dec. 31, 2018. On Oct. 15, 2018, the Department emailed renewal notices and applications to 737 licensed franchised dealers. On Nov. 13, 2018, the Department emailed a second renewal reminder notices and applications to 594 licensed franchised dealers. As of this date, 80% of the licensees due to expire on December 31, 2018, have not yet renewed. A renewal package was mailed to those dealers without an email address. A completed renewal application form (HSMV 86720, “Renewal Application for Motor Vehicle, Mobile Home, or Recreational Vehicle Dealers”), fee and required documents must be submitted to the local Regional Office responsible for your dealership. This form is available at https://www.flhsmv.gov/pdf/ forms/86720.pdf on the Department’s website. The Regional Office list can be accessed at https://www.flhsmv.gov/pdf/ dealerservices/ms_regional_offices.pdf, also on the Department’s website. The following documents are required with the renewal application:
Primary Location: • A completed license renewal application form HSMV 86720. This form is available on the
•
•
•
•
•
Department’s website at: https:// www.flhsmv.gov/pdf/forms/86720.pdf A $75 annual license renewal fee for the primary location. If the completed application, all required documents, and fee are not received for the primary location by Dec. 31, a $100 delinquent fee is also due, for a total renewal fee of $175. Checks must be made payable to DHSMV. A $150 biennial license renewal fee if you are opting for a biennial (two year) renewal. Checks must be made payable to DHSMV. An original surety bond, original irrevocable letter of credit, or original continuation certificate in the amount of $25,000 for franchise motor vehicle dealers. The Dealership's Principal must sign the surety bond and Irrevocable Letter of Credit. Copy of proof of Garage Liability insurance submitted must include, at a minimum, $25,000 combined single limited liability coverage, including bodily injury and property damage protection and $10,000 personal injury protection. Certificate of garage liability insurance signed by the garage liability insurance agent is required. Copy of certification from the Division of Corporations showing current registration of the business and fictitious name(s) (on-line access at www.sunbiz.org).
Supplemental Location: • A completed license renewal application form HSMV 86720. This form is available on the Department’s website at: https://
20 — Independent Dealer — December 2018
•
www.flhsmv.gov/pdf/forms/86720.pdf A $50 annual renewal fee. Make check payable to DHSMV. A $100 biennial license renewal fee if you are opting for a biennial (two year) renewal. Checks must be made payable to DHSMV. A copy of the surety bond, irrevocable letter of credit, or continuation certificate in the amount of $25,000 that was submitted with the primary location renewal application. A copy of the certificate of garage liability insurance that was submitted with the primary location renewal application. This certification must include, at a minimum, $25,000 combined single limit liability coverage, including bodily injury and property damage protection, and $10,000 personal injury protection. Copy of the Certificate of Garage Liability insurance is required and must be signed by the garage liability insurance agent
The Department has moved to electronic communication of important notices, renewals and legislative changes to licensed dealers statewide. Therefore, it is important for dealers to update their renewal application with a current business email address for their dealership. Dealers are advised to avoid using email addresses of their staff on the application as notices may not reach their dealership if the staff member no longer works at the dealership. Dealers are advised to immediately notify the Regional Office responsible for their dealership of any changes in their business email address.
To ensure proper processing of renewal applications, dealers are advised to submit their completed renewal application, required documents and fee to the regional office. They are further advised not to submit their application to Tallahassee. All checks must be made payable to DHSMV. www.fiada.com
Dear Fellow Car D
ealers,
to Dealer Independent Au an am I d an el ad Jo Industry My name is Br President of your e th so al am I a. ile Dealers in South Florid pendent Automob de In a rid lo (F A Association, FIAD Association). e myself today to introduc I am writing n Hall our Quarterly Tow to u yo te vi in to and , you’re ve never attended Meeting. If you ha g we tin ch quarterly mee missing out. At ea d an other s, board members or nd ve y ke ve twork ha whom you can ne s er al de t en nd indepe our a free lunch that with while having . sponsor provides e each we most often se It’s a funny thing, ting over pe n. We are com another. other at an auctio get to know one to e tim e th ke om ta g where you vehicles and seld attend this meetin to ity un rt po op ce similar Please take this e industry and fa m sa e th in l al e w they will see that we ar d to talk about ho ou pr e ar ho w y tell man eration. I have to issues. I have met op r ei th in on es that go u don’t know know everything ith the FIADA, yo w g in at ip ic rt pa stry. you, if you’re not ing on in our indu go is t ha w t ou orida meeting. much ab e our last South Fl nc si le hi w a en ok forward to It has be ity to attend. I lo un rt po op is th s is tend. You will Please don’t m date aside and at e th t se se ea Pl A.com to seeing you there. r website at FIAD ou t si vi se ea Pl did. be glad that you us. t ou learn more ab s, Warmest Regard
Brad Joel President, FIADA www.fiada.com
December 2018 — Independent Dealer — 21
Protect. Promote. Preserve. Florida Independent Automobile Dealers Association
SINCE 1940
Why Join FIADA? REPRESENTATION A lobbyist and legislative committee that fights for you and the industry’s interests.
EDUCATION FREE continuing education and free unlimited technical assistance calls with FIADA legal counsel.
DEDICATION Access 100+ vendors who specialize in auto industry needs and over 800 dealers statewide who handle issues like yours.
SAVINGS Over $2,000 in FIADA member discounts and coupons that are available instantly with an easy to use mobile app.
DISCOUNTS Exclusive savings on advertising opportunities, DMS, financing, floorplanning, GPS and other dealer services.
DUES: $325 Annually
Sponsor:_____________________________________
Company Name:________________________________________________________ q New Mbr q Associate Mbr Address:______________________________________ City:____________________ State:______ Zip:_________ Phone:_____________________________ Fax:_____________________________ Email:_______________________ By signing I agree to the FIADA
code of ethics and FCC Consent. Principal Contact:________________________________ Signature:_______________________________________
Payment Method: q Check (made payable to FIADA)
q Visa
q Mastercard
q American Express
q Discover
Card Number:________________________________________ Expiration Date:__________________ CVV:_________ I authorize FIADA to charge my credit card listed above. Name on Card:___________________________________________________________________________________
Dealer Type: q Retail
q BHPH
q Wholesale
Years in business?__________ License# ____________________
SUPPORT THE FIADA PAC Your PAC Contribution helps spread the awareness and gain support of issues affecting independent dealers in the state's capitol.
q
$500
q
$250
q
$100
q
$50
q
$25
q
_________
FCC Communications Consent: I understand that by providing my mailing address, email address, telephone number and fax number, I consent to receive valuable and timely communications via mail, parcel, email, telephone, text and/or fax from or on behalf of the Florida Independent Automobile Dealers Association (FIADA). This consent shall remain in effect until FIADA receives written revocation signed by an authorized representative. 800.237.0448 | Fax: 850-385-3251 | Email: info@fiada.com | www.FIADA.com | Florida Independent Automobile Dealers Association, 1840 Fiddler Court, Tallahassee, FL 32308
22 — — Independent Independent Dealer Dealer — — June December 22 2018 2018
www.fiada.com www.fiada.com
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D E A L E R O P E R AT I O N S
Preparing Now for a New Year BY JENNIFER FINLAY
Don't let one year fade into another without really evaluating where you have been and figuring out where you are going.
W
e are coming to the end of 2018. Looking back, how was your year? Did you achieve your goals? Did you even have goals in place? What were your biggest struggles? Were you able to stay within budget? Did you have a budget? These are some of the questions you should be asking yourself in preparation for the coming year. Having a structured plan of action is one of the best ways to get started with a new year. Running a business is timeconsuming and at times exhausting. Staying in front of potential problems or shortcomings that could sabotage your growth is critical to your success. Believe me, I know first hand how easy is it is to neglect things. Sometimes its tough to just get through the regular day to day tasks. There are bills to be paid, payroll to deal with, finding the right inventory, selling enough vehicles and the list goes on and on. The fact remains, however, just keeping up will not push you forward. You know the saying, " you can't keep doing the same thing and expect a different outcome". If you want to sell more, grow the business, be more in compliance, build your reputation etc, you have to work at it. The end of the year is the perfect time to create a plan that will work for you. Let's face it, the month of December is not one of the busiest, so set aside some time, and determine where you want to be this time next year. Here are a few tips and ideas to get you started. Spending. One of the best ways to do this is to look at your P&L and Vendor Statements. Highlight the non-fixed expenses. For example, your electric and water bills will
24 — Independent Dealer — December 2018
not fall into this category. Non-fixed expenses would be things like water delivery, uniforms, printing expenses, office supplies, interest rates, bank fees, title services etc. Shop these items, see what else is out there. I guarantee none of these vendors or suppliers will ever call you and offer you a better deal because you have been with them for how ever many years. It doesn't work that way. If you find a better deal, call your current vendor and give them an opportunity to match or beat what you found. You will be shocked at the amount you can shave off your accounts payable. Internal processes. This could include anything from sales procedures, advertising methods, hours of operation, the amount of your dealer fee and any policies concerning deposits, money back guarantee or in-house warranties. Take a look at these things, do you recall there being any issues with any of them in the past year? Is your dealer fee still enough to cover what you need it to? Do you not have a dealer fee but wish you did? Are customers deposits refundable if they change their mind? Is that working for you? All of these things can be adjusted. It would not be my advice to change these things back and forth throughout the year, that shows inconsistency and overall not a good practice. However, the end of the year is a great time to make these decisions and have a plan ready for January 1. Your exposure. This is such an easy thing but surprisingly I see many dealers fall short in this area. Of course, the end goal in this business is selling inventory. It's how the money comes in to sustain operations. All too often I see dealers with tunnel vision focusing solely on that. There is a proper path to that end goal and if you don't recognize it you will never be as successful as you could be. Exposure is simple, it goes hand in hand with relationship building. It doesn't have to cost a lot or consume a great deal of your time but, it must be addressed consistently and frequently. So, what is this exposure I am talking about? Easy, get involved! There are so many ways to get your business in the spotlight. A great way to get started is by joining an association like the Florida Independent Automobile Dealers Association. They have a huge network of dealers as well as industry resources that
www.fiada.com
benefit dealers significantly. They also host events throughout the year that provides the opportunity to build relationships with others in the industry. Another way to gain exposure and achieve brand recognition is to sponsor things in your community. This could be a toy or food drive, blood drive, a little league team or even have staff members trade off volunteering at an animal shelter or food bank. Most of these events will have some sort of literature printed to make the community aware. Your company name will be on it and given to their target market. These types of exposure methods have a dual outcome. Number one, it gets your name out there, number two, it makes everyone know you are the type of business that they want to do business with. How will you get new and different exposure this new year? Training and education. This too is an area I see dealers neglecting. Don't make that mistake. Proper and ongoing training and education is a must. Starting with the on boarding of new employees. You should have a detailed description and job outline in place for each employee. This reduces confusion about what you expect and how you expect duties to be carried out. It seems like a simple concept but you would be surprised at how important it is. You know how
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you want the business to run, you have a vision of sales and customer service. Put a training process in place that will ensure your employees understand that vision and then give them the tools to make it happen. Continued education is equally important, not just for employees but also for owners and managers. Regulations, laws, and statutes change more frequently than most dealers know. Staying on top of changes in these as well as industry trends will keep you at the front and out of trouble as well. Trying to stay in compliance with the DMV, the Department of Revenue, the Federal Trade Commision, the Attorney General and the IRS can be time-consuming and tedious when attempted on your own. There are several companies that offer training in these areas. Don't try to go it alone. It's a more efficient use of your time to have help. Think about what you need to learn in the coming year that will help protect your business. Safety. As a business owner, of course, you want your employees to have a safe, hazard-free work environment. A safety manual is a good start as well as regularly scheduled maintenance checks around the property. In addition to that, the safety of customers should be a priority. One injury could potentially cost you what you've worked so hard to build. An end
of year physical inspection of the property and any equipment will determine if any repairs need to be made to go into another successful year. Appearance. Take the time to pull up to your dealership slowly, try and get all the tasks you are going there to accomplish out of your mind. Look at everything, really look. Are things overgrown? Is the building paint faded? How is your signage? We tend to overlook these things as a result of being driven to get into the office and get things done. Do the same thing when you step in the office. Is there clutter? Sit on the other side of your desk where your customer sits, see things from their perspective. How does it look? Do you have things to make your customer comfortable while they are there? Do you have an area for children to be occupied? The more comfortable your customer is the more you will have and keep their attention. So think about what you could improve at your property and in your office. Jennifer Finlay is a senior account manager with the Florida Auto Tag Agency. She can be reached at jennifer@flatags.com
December 2018 — Independent Dealer — 25
D E A L E R O P E R AT I O N S
The Conflict of Interest that May Hurt Your Business BY KENNY ATCHESON
Don't let your vendors' best interest get in the way of your own.
T
he other day I saw an advertisement that read, “Join the revolution. Email is dead, SMS is alive and well.” The company running the ad is one that offers text message marketing. I didn’t bother clicking on the ad because I already knew what they would declare:
• • •
Open rates for text messages are 95% compared to 7% email open rates. Text messages are opened within five minutes of being sent. Email is antiquated.
Some of that is true; but some is not. Direct mail, Yellow Pages, newspapers, TV, radio, and email have all been declared dead. Perhaps you’ve heard these: • • • • • • • • • •
The Internet killed newspapers. The Internet killed direct mail. The Internet and smart phones killed print media. Google killed Yellow Pages. Facebook killed all kinds of media. Email killed direct mail. Texting killed email. YouTube killed television. Podcasting killed radio. Ebooks and Kindle killed printed books.
The truth is, yes—some of these media channels are less effective than they used to be. Yet some are still useful when managed appropriately. Nearly all are still valuable at the right price. If you were offered a full-page newspaper ad for a year for $5 you would be silly not to do it—because it’s only five bucks. So, the real consideration is value. An interesting irony to notice is that many killers of “dead media” use that same media to grow their own media: 26 — Independent Dealer — December 2018
• • • •
Google heads send direct mail to business owners to recommend Google for advertising. Directors of email software platforms send direct mail to entrepreneurs. For a few months now, Facebook moguls have been running a two-page spread in the print version of the magazine AdAge—promoting their online video tools. YouTube muckety mucks run ads on television about their recent promotion.
You might be thinking, Well those are all examples of business-to-business media which is different than business-to-consumer. Consumers stop utilizing a media first. It’s true that Floridian consumers don’t send direct mail very often. However, they do receive direct mail—and it works when done right. We’ve received an astonishing number of comments from a dealer’s “consumer” customers saying how much they enjoy the dealer’s printed newsletter that is sent via direct mail. Different media distribution channels are not dead; they just need to be used differently with the overall value taken into context. So-called “experts” pronounce different media dead all the time. These “experts” have something to sell and you can bet it’s not the thing they are pronouncing dead. Always consider if the person speaking to you has an agenda. Most advertising agencies make more off of you with one media versus another. This may be why they require a long-term contract. Even if what they do isn’t successful, they still get paid. That doesn’t mean they don’t want you to succeed, but the conflict of interest is strong. Continued on page 31. www.fiada.com
Insurance and bonding specialists for the auto industry for over 30 years
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December 2018 — Independent Dealer — 27
LEGAL ROUND-UP
A Look At Current Legal Issues BY THOMAS B. HUDSON AND NICOLE FRUSH MUNRO, HUDSON COOK, LLC
A monthly collection of selected legislative and regulatory highlights, and a recap of some of the many auto sale and financing lawsuits followed each month. COMPLIANCE TIP Do you sell so-called “ancillary products” like GAP, vehicle service contracts, tire protection and the like? If so, do you mark those products up the same amount for all buyers? Do you have a written markup policy for these sales? If you don’t, you might be skating on this legal ice without understanding the risk. Yet another item to put on your “talk to my lawyer” checklist. FEDERAL DEVELOPMENTS Have You Been Overbiffed? Buyhere, pay-here dealers should pay attention to this development. On November 1, the FTC and the New York AG’s Office announced that they have sued six corporations and one individual, Robert Heidenreich, who controlled a New York-based debt collection operation, for tricking people into agreeing to pay more than they allegedly owed, according to defendants’ own business records. A federal court temporarily halted the operation’s illegal activity and froze its assets. The complaint alleged that the defendants’ employees often completed forms showing they demanded more money than consumers allegedly owed (known as “overbiffing” in the debt collection industry). In many cases, according to the complaint, consumers agreed to pay more than they allegedly owed. The complaint also alleged that employees pretended to work for law enforcement agencies and threatened consumers with arrest. Other collectors falsely claimed to work 28 — Independent Dealer — December 2018
for attorneys and told consumers they would face lawsuits if they did not pay alleged debts. The FTC and NY AG allege that these practices violated the FTC Act, the Fair Debt Collection Practices Act, and similar New York State laws. Report Card Time. On November 9, the Bureau released its semi-annual report to Congress for the period of October 1, 2017 through March 31, 2018. The report addresses, among other things, the proposed rules the Bureau intends to issue during the upcoming period, as reflected in the Bureau’s Spring 2018 Unified Agenda, such as the proposed debt collection rule and the proposed rule to reconsider the Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule. The report also notes the final rules the Bureau intends to issue during the upcoming period, as also reflected in the Bureau’s Spring 2018 Unified Agenda, including finalizing an amendment to Regulation P concerning annual notice requirements under the GrammLeach-Bliley Act. On November 16, the Bureau published its semi-annual regulatory agenda as part of its Fall 2018 Unified Agenda. Bridging the GAP. On November 20, the Bureau announced a settlement with a major finance company, resolving allegations that the company engaged in deceptive acts and practices in connection with the marketing of its guaranteed asset
protection product, in violation of the Consumer Financial Protection Act of 2010. The Bureau also alleged that the company misrepresented to consumers who had missed at least one payment on their vehicle financing contracts the impact of receiving extensions of the maturity dates of their contracts, including by not clearly and prominently disclosing that the additional interest accrued during the extension period would be paid before any payments to principal when the consumers resumed making payments. Under the terms of the consent order, the company must, among other provisions, provide approximately $9.29 million in restitution to certain consumers who purchased the addon product, clearly and prominently disclose the terms of its contract extensions and the add-on product, and pay a $2.5 million civil penalty. Listen Up, High-end Dealers. On November 21, the Bureau and the Federal Reserve Board announced that they are increasing the dollar thresholds in Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) for exempt consumer credit and lease transactions. The Dodd-Frank Act provides that the dollar amount thresholds for TILA and the CLA must be adjusted annually by any annual percentage increase in the consumer price index. Because there was an annual percentage increase in the consumer price index as of June 1, 2018, TILA and the CLA generally www.fiada.com
will apply to consumer auto credit transactions and consumer auto leases of $57,200 or less beginning January 1, 2019. CASE OF THE MONTH Dealership Violated TILA, EFTA, and Connecticut Unfair Trade Practices Act and Breached Warranties in Connection with Car Sale. How many different ways can a dealer get into compliance trouble in connection with the credit sale of a vehicle? Read on! A salesman told a potential buyer of a used car that the car was $16,900 and that it was “clean and had never been in an accident.” The retail installment contract listed the car’s purchase price as $18,000, and the buyer was told that the $1,100 discrepancy was a “bank fee.” The buyer alleged that he was not given a copy of the purchase order or the RIC.
Second, the court found that the dealership violated the EFTA by requiring the buyer to set up preauthorized electronic transfers of the contract payments as a condition of financing. Third, the court found that the dealership breached the implied warranty of merchantability by selling a car that was unsafe to drive while it knew or should have known about the car’s condition at the time of sale. Then the court found that the dealership also breached an express warranty because it told the buyer that the car was “clean and had never
been in an accident,” and the buyer relied on that statement when he decided to buy the car. Finally, the court found that the dealership’s negligent misrepresentation of the condition of the car elevated its breach of warranties to the level of a CUTPA violation. The buyer also established that the dealership violated the CUTPA by violating TILA and potentially violating Connecticut’s Retail Installment Sales Financing Act when it misrepresented the car’s purchase price. See Alexis v. PMM Enterprises, LLC, 2018 U.S. Dist. LEXIS 184367 (D. Conn. October 29, 2018).
Tom (thudson@hudco.com) and Nikki (nmunro@hudco.com) are partners in the
It’s time to change
law firm of Hudson Cook, LLP. For information, visit www.counselorlibrary.com. Copyright CounselorLibrary.com 2017, all rights reserved.
your approach to F&I compliance
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About nine months later, the buyer learned that the car had sustained significant structural damage before he bought it and was unsafe to drive. your approach to F&I compliance He returned the car to the dealership, revoked acceptance, and sued the WITH THIS SPECIAL OFFER... dealership, alleging violations of the Truth in Lending Act, Electronic Subscribe to Spot Delivery and, at no Fund Transfer Act, and the additional Subscribe charge,towe will send you a Connecticut Unfair Trade Practices Spot Delivery and, at no Act as well as breach of impliedcopy and of your choice of any of our legal additional charge, we will send you a express warranties. The buyer moved copy of yourCARLAW, choice of any of our legal II compliance books, CARLAW for a default judgment. compliance books, CARLAW, CARLAW II Street Legal or Legal CARLAW III Reloaded. Street or CARLAW III Reloaded. First, the federal trial court found that the dealership violated TILA by not giving the buyer a copy of the contract containing the required disclosures before consummation of the agreement and by including the To order, visit us at $1,100 “bank fee” in the purchase www.counselorlibrary.com/offer/spot To order, visit us at price on the RIC. The court noted or call us at 877-464-8326. that inclusion of the “bank fee,” Also follow us on: www.counselorlibrary.com/offer/spot which was an additional charge beyond the price at which the or call us at 877-464-8326. dealership would have sold the car Also follow us on: for cash, allowed the dealership to understate the finance charge. www.fiada.com
December 2018 — Independent Dealer — 29
INDUSTRY NEWS
News and headlines of interest to the Florida Used Car Industry and beyond
Ford Is Inventing Technology to Eliminate New-Car Smell
You might love that new-car aroma, but for buyers in China, it's a major headache. So Ford is looking into ways of ridding its brand-new cars of the aroma Most of us love that new-car smell, the aroma of fresh upholstery and carpeting. Plenty of us try to recapture it through the application of Little Trees air fresheners or other scent-dispersal methods, trying to evoke that freshfrom-the-factory aroma in our used vehicles. But as it turns out, not everybody appreciates that brand-new scent. In particular, new-car buyers in China have a major aversion to the aroma of a freshly-assembled vehicle. More than 10 percent of drivers complained about the odor of their brand-new cars, the most frequent complaint of all, according to J.D. Power. So Ford is setting out to create technology that will eradicate that new-car smell, hoping to eliminate this complaint among Chinese customers. Yes, you read that right: A maker of brand-new cars is looking for ways to air out that signature new-car smell, according to the Detroit Free Press.
Last year, Ford created a team of 18 people with highly sensitive noses to identify the offending scents in new cars and help find ways to eliminate them. These "Golden Noses" sniff every component of a car's interior, rejecting those that might be deemed unfavorable to Chinese buyers. Now, Ford has gone to the next step, applying to patent a new technology that will bake off and air out the offending aromas—most of which stem from volatile organic compounds emitted by upholstery, plastics, or the sound deadening or adhesive materials involved in constructing a car's interior. A spokesperson from the automaker told the newspaper that it has no specific plans to incorporate this tech into production vehicles at this time. Source: roadandtrack.com
NAAA Contracts CARS Recon as Technician Recruiters
National Auto Auction Association also donates $50,000 to support the National Automobile Dealers Association’s technician career education and promotion initiatives Two major steps have been taken by the National Auto Auction Association to help auction members meet the skyrocketing demand for trained vehicle technicians, the trade organization’s leadership announced during its 70th annual convention here this month. NAAA has allocated $75,000 to contract CARS Recon, Inc., as a third-party provider of full- time recruitment services that can assist member auctions with filling their technician positions. The company will use social media and traditional recruiting methods, as well as alliances with trade schools and community colleges, to solicit job applicants at an auction’s request. It will then review the submissions and conduct phone interviews to screen for qualified candidates before referring them to the auction to complete the employment process. In addition, the association is donating $50,000 the National Automobile Dealers Association Foundation’s Workforce Initiative, which is designed to promote careers in the auto service and repair field. As the first trade association to join NADA’s outreach and educational efforts, NAAA’s gift will fund the program’s operational activities that include creating a brand-neutral website, 30 — Independent Dealer — December 2018
videos, digital media, marketing materials, exhibits at institutional conferences and military separation offices, and career fairs around the country. These initial measures are in part the result of a study of the shortage in the auto auction industry conducted for NAAA by automotive industry analyst Glenn Mercer earlier this year. Entitled “Solving the Technician Challenge,” the report concluded recruitment was more of an issue than retention for auctions, and recommended taking proactive steps focused on vocational awareness, job promotion and hiring efforts. Addressing the critical shortage of automotive technicians has been a top priority of outgoing NAAA President Warren Clauss during his term. According to the U.S. Bureau of Labor Statistics, an average of 76,000 mechanics would be needed each year in the next decade to replace those retiring or leaving the industry and to fill some 46,000 projected new openings. The field saw a 10 percent decline in employment during the recent recession, with just 38,829 technical school graduates entering the workforce in 2016. www.fiada.com
Successful 2019 continued from Page 26.
marketing, and sales strategies, place a higher value on an organization with people who are on your side, not on someone with a company who is there only to sell you something.
Me? I like what works for your company. I don’t care if its digital, print, television, radio, newspaper, postal mail, or carrier pigeon—so long as it works.
seller placed more value on the real estate agent because the real estate agent was on their side.
Years ago, there was a rift between mortgage agents and real estate agents. The mortgage agents were agitated and jealous when real estate agents made 3% on the purchase of a house while the mortgage agent made 1%. The mortgage agents cried, “We do more work! Our licensing, testing, and documentation is more difficult to navigate! Our skill level is higher!”
Kenny Atcheson is the founder of Dealer Profit Pros and author of Marketing Battleground: How to Deploy Underthe-Radar Strategies to Explode Your Profits. Kenny offers private consulting and he teaches workshops and speaks at conventions and 20 Groups. His company offers several marketing and advertising programs which include
As you consider your advertising,
Whether or not the mortgage agent was correct, I told them that I held both licenses—so I had no bias. I explained that people believed the mortgage agent was selling something to them, but the real estate agent represented them. The home buyer or
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2018-19 FIADA EXECUTIVE COMMITTEE:
BRAD JOEL
President Splish Splash Auto Sales Princeton, FL 33032 (305) 258-1191
Senior Vice President Palm Tree Auto Sales Stuart, FL (772) 288-2099
LISA COMPAGNO
SCOTT LANIER, CMD
LUIS GIRALDO
BRANDI NOEGEL
STEVE MARBAIS, CMD
Regional Vice President Veneauto Cars Gainesville, FL (352) 870-2278
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Regional Vice President Noegel’s Auto Sales Starke, FL (904) 964-6461
Chairman of the Board Credit Cars Orlando, FL 32808 (407) 295-6211
Regional Vice President Marbais Enterprises, Inc. Ocoee, FL (407) 877-7422
FRANK FUZY
JENAY RHOADS
Secretary Treasurer Century Motors of S. Fla., Inc. Florida Auto Exchange Co., Inc Pompano Beach, FL 33064 Dunedin, FL (954) 785-0369 (727)-796-2886
TREVER VARNEY
Regional Vice President Next Ride LLC Largo, FL (727) 559-1191
JIM WINTERICK, SR.
Regional Vice President Gulfstream Motor Credit Miami, FL (305) 253-2335
December 2018 — Independent Dealer — 31
MANHEIM FLORIDA ALWAYS NEARBY.
Manheim Daytona Beach 1305 Indian Lake Road Daytona Beach, FL 32124 386.255.2500 Sale: Wed 3 PM Total Resource Auction every Wed 2:30 PM Manheim Fort Lauderdale 5353 S State Road 7 Davie, FL 33314 954.791.3520 Sale: Fri 9 AM Total Resource Auction Tue 9 AM Ford Open Sale every other Fri Manheim Fort Myers 2100 Rockfill Rd Fort Myers, FL 33916 239.476.9800 Sale: Wed 4 PM Total Resource Auction every other Wed 3 PM Specialty Sale last Wed monthly 2 PM Galloway Direct Off Site Sale 2nd & 4th Tues 12 PM Manheim Jacksonville 10817 New Kings Rd Jacksonville, FL 32219 904.768.9981 Sale: Thurs 1 PM Total Resource Auction every Thurs 12:40 PM Manheim Lakeland 8025 N State Road 33 Lakeland, FL 33809 863.984.1551 Sale: Wed 2 PM Specialty RV/Boat Sale 1st Wed monthly 9 AM
Manheim Orlando 11801 W Colonial Dr Ocoee, FL 34761 Sale: Tues 9 AM Highline Exotic Sale Kicks off every 4th Tues 11 AM with Mercedes & BMW Chrysler Closed Factory Sale bi-weekly on Mon 12:30 PM GM Closed Sales bi-weekly on Mon 1 PM Nissan Infiniti Closed Sale 1st Wed monthly 9 AM Manheim Palm Beach 600 Sansbury Way West Palm Beach, FL 33411 561.790.1200 Sale: Thursday 9 AM Exotic Highline Sale every 4th Wed 9:30 AM Manheim St Pete 14950 Roosevelt Blvd Clearwater, FL 33762 727.531.7717 Sale: Thurs Weekly 2:30 PM inops Regular Sale 3 PM Manheim Tampa 401 S 50th St Tampa, FL 33619 813.247.1666 Sale: Thursday 9 AM Total Resource Auction Mon 9:30 AM at Cone Road location Ford Factory Sale every other Wed 10 AM Manheim Caribbean 1050 Carretera 865 KM 4.7 Bo. Candelaria Toa Baja, PR 00949 787.261.7300 Sale: Thurs 12 PM
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Manheim Central Florida 9800 Bachman Rd Orlando, FL 32824 407.438.1000 Sale: Wed 9 AM Total Resource Auction Wed 8:30 AM “Manheim Imperial Nights” Sale Tues 4 PM Specialty Heavy Truck & Equipment Sale Second Thurs Monthly at 10 AM
Salvage Sale Thurs 11 AM
32 — Independent Dealer — December 2018
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