JANUARY 2015
www.FIADA.com
Information and Insight for Florida Used Car Dealers
As FIADA celebrates 75 years, we need you to help us gain history-making accomplishments in 2015. Be a part of the Association and join us this year. Page 12.
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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 Jim Winterick, Sr. President Paul Matton Senior Vice President Dino Mercurio Chairman of the Board
Contents January 2015
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 Jim Winterick, Sr.
6
Executive Director’s Message Lisette Mariner
Christopher Leedom Regional Vice President
8
Keys to Insurance Kevin O’Connor
Steve Marbais, CMD Regional Vice President
10
Member News
12
Let’s Make History This is a milestone year for the FIADA. Help us explore new ground and further the interests of Florida’s independent dealers.
Brad Joel Secretary Lisa Compagno Treasurer Scott Lanier Regional Vice President
Phil Risley Regional Vice President Govinda Romero Regional Vice President FIADA STAFF Lisette Mariner Executive Director Terry Myers Educational Instructor Amelia Tillman Member Services Christy Taylor Editorial/Advertising
POSTMASTER:
Send address changes to
FIADA • 1840 Fiddler Court Tallahassee, FL 32308 (850) 385-2712 • Toll Free: (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.
www.fiada.com
14 FIADA:1971-1980 Let the 75th Anniversary begin! FIADA kicks off a feature celebrating the history of the Association. 18
Legislative Update FIADA Lobbyist Sandra Mortham
20
Another FIADA Town Hall Meeting is Coming Soon Plan to attend the next free educational session in January.
24
A Look at Current Legal Issues The monthly round-up of federal and legal issues affecting auto dealers.
26
Sales Manager’s Game Plan for the Day Give your sales staff focus and organization for great results.
30
Industry News
UPCOMING EVENTS January 16, 2015 FIADA Town Hall Meeting • 10am -2pm Ft. Myers, FL
July 10, 2015 FIADA Town Hall Meeting • 10am -2pm Cocoa Beach, FL
May 8, 2015 FIADA Town Hall Meeting • 10am -2pm Jupiter, FL
October 22-25, 2015 FIADA Annual Convention & Trade Show Hilton Orlando, Lake Buena Vista, FL January 2015 — Independent Dealer — 3
FROM THE PRESIDENT
Luck is When Preparation Meets Opportunity BY JIM WINTERICK, SR., FIADA PRESIDENT
H
ere we are at the beginning of a new year. Hard to believe another one is done and in the books. As business people we look back on the experience and evaluate the adjustment we should make for the upcoming year. Where were our forecasts and budget good and where were they lacking.
We are having our first, Town Hall meeting of this year in Fort Myers on January 15. This is a great time to come meet other dealers. Presenters will be on hand discussing ways to make your business more profitable and avoid pitfalls that encumber our business. This will be followed on Saturday with our Board of Directors meeting. The business of the
At the FIADA we go through a similar If you are an independent dealer in the state of Florida process. Instead of unit sales, gross the FIADA represents you. If you feel a subject needs profit, labor sales, cost of goods etc., to be looked at either legislatively or by change of rule, we look for ways to increase our membership, and better serve the then get involved. It is your Association, no one else’s. members we have. We also do our homework preparing for the upcoming Association is discussed, including finalization of our 2015 legislative session in Tallahassee and support the national legislative agenda and our committees will report. Both of agenda that NIADA has in Washington. Input from our these meetings are open to dealers and your participation dealer members helps us to formulate the legislative is appreciated. Remember it is your Association. Your issues we pursue. Our Legal and Legislative committee of profession. If you want to have a say in how your livelihood fellow dealers assign to our staff the priorities we think are is derived then you need to be there. important. This is an open discussion to all members. The only catch: you need to participate. I am constantly amazed Rocky Blyer the football player from the Champion by people saying, “You guys need to do this or that.” If you Pittsburgh Steelers spoke at our convention some years ago are an independent dealer in the state of Florida the FIADA and I remember him saying a lesson he learned early in life. represents you. If you feel a subject needs to be looked at “Things are run by those who show up.” either legislatively or by change of rule, then get involved. It is your Association, no one else’s. The fellow dealers Are you a champion? Are you preparing for the best year that work on the statewide issues are not paid. Their only you ever had? The opportunities are there. Or are you motivation for donating their valuable time and money just passing time? Hope to see our many friends from is the betterment to a profession that has given them so Southwest Florida in January, will you be a champion? All much. The selling of used vehicles is my profession. I take your friends will call you lucky. pride in the job and enjoy going to work every day. Some days the enjoyment is better than others. The challenges Jim Winterick, Sr. this profession gives to those willing to grab a hold for the FIADA President ride can be rewarding. 4 — Independent Dealer —January 2015
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January 2015 — Independent Dealer — 5
EXECUTIVE DIREC TOR’S MESSAGE
Your 2015 Plan BY LISET TE MARINER, EXECUTIVE DIREC TOR
W
e’ve had an amazing 2014 and we’re ready for 2015. technical assistance, free online continuing education, auction Last year I asked you to be more involved and to and service coupons, and networking opportunities. We are start taking advantage of your member benefits. always researching opportunities to bring more value to your Well I’m happy to report that many of you did just that. With membership. Your feedback is always appreciated. One way over 200 dealers attending the FIADA Convention, we saw a to get involved and give back is to participate on a committee. 13 percent increase in dealer participation. Though we only saw a one percent increase FIADA has so much to offer and so many in membership this year, I am confident that together we will spread the good news of opportunities for you to participate. Add FIADA the Association and what it means to be a to your 2015 Action Plan and be part of the member!
Association that watched out for you every day!
Things to look forward to in 2015 are the elimination of the Florida Hurricane tax that was levied after the horrible 2004 and 2005 hurricanes, FIADA’s 75th Anniversary celebration at the 2015 Annual Convention, and FIADA continuing to protect your interest. Other interesting things we might see are the Google car and the Apple watch. As technology shifts and cultures evolve, the industry will certainly adapt to meet our customers’ needs. Come see what you’re missing at the next town hall meeting, January 16 at the Hyatt Place Ft. Myers. A panel of industry experts will discuss data security, legal issues and how to protect your business. Through the generous support of sponsors like Auto Data Direct, Wayne Reeves, and AFC we can continue to provide a great learning opportunity for dealers for free. Register to attend at www.FIADA.com. Save the date for our May 8 meeting in Jupiter and July 10 meeting in Cocoa Beach. Of course, you also don’t want to miss the FIADA 75th Anniversary event October 22-25 at the Hilton Orlando, Lake Buena Vista. Remember to be an active participant in shaping your future. FIADA offers many member benefits, such as, complimentary 6 — Independent Dealer —January 2015
Committees meet via conference call and discuss new programs, current issues and explore ways to improve FIADA services. We have something for everyone. Your service on a committee helps the Association and provides an opportunity for you to give back to your industry. Your executive committee and board of directors are made up of volunteers that give of their time and expertise. They have made a commitment to you as a member of the Association. Help support these wonderful men and women by making a commitment today to serve on a committee. It really isn’t much time at all to serve on a committee. If you are interested in serving on a committee or just have an idea you’d like to share, please contact me at lisette@fiada.com or 800.237.0448 ext. 100. FIADA has so much to offer and so many opportunities for you to participate. I hope that you will add FIADA to your 2015 Action Plan and share the good news with a friend. Be part of the Association that watches out for you every day! www.fiada.com
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January 2015 — Independent Dealer — 7
KEYS TO INSURANCE
Insurance Predictions for Data Breaches Are the New Year Everyone’s Concern! BY KEVIN O’CONNOR, INSURANCE AGENT OF RECORD
IT
he upcoming FIADA Town Hall Meeting in Fort month and one of the focus topicstois am Myers excitedistothis announce the resurrection of “Keys data breach and privacy I thought it would Insurance, ” a column I wroteissues. for many years in this be a good time tothroughout write a brief on the that The has magazine thecolumn 1990s and up subject until 2005. permeated the media in recent months. column touched on the subjects relating to the insurance needs of the non-franchised motor vehicle dealer. I doubt there is a dealer in our Association that hasn’t heard of this the major that ahave recently Starting month,data we breaches will be doing quarterly edition occurred. In just the last two years, many household names of the column. We plan to discuss subjects such as risk have experienced breaches. A few of costs the more management ideasmassive to helpdata reduce your insurance and notable along with the number of records breached: eliminate unnecessary claims, changes in insurance market • Home Depot‒56 million and coverage availability, new conditions, trends in pricing • Target‒70 million products available to the dealer industry and more. • JP Morgan Chase‒76 million • million ThisAdobe‒152 past year was a challenging year in our business, • Ebay‒145 especially heremillion in Florida. A new “wind modeling” system was implemented which completely changed the way Studies havecarriers revealedlook thatata data breach cost a company certain areas.can This new system in the neighborhoodidentified of $200 per record breached. It’shad not that non-coastal areas difficult to do the mathmore and see the impact these than issueswas have hurricane exposure on corporate financials.previously believed and pricing of policies were revised Being small businesses we often think,accordingly. “This can’t happen The to us. It only affects big companies”. Unfortunately, claimsthat from couldn’t be further from the truth. Claims against auto 2012’s dealers are occurring on a regular basis. Bruce Townsend, Hurricane deputy director of the U.S. Secret Service statedSandy “there had is no question” that auto dealerships are being targeted. To a devastating prove his point, large dealers like Soniceffect Automotive and the on the Dealers Asbury Automotive Group (in Orlando, FL) have already Open Lot insurance made the news with expensive breaches. marketplace. As a result, the insurance Smaller dealers normally possess all of carriers the information are now about their customer that alooking hacker more wouldclosely need to able to at be flood steal their identity. The exposure storage ofthan that ever sensitive data, along before making with the fact that many small dealers have minimal data IndependentDealer Dealer—January — January 2014 810——Independent 2015
security measures in place makes the independent dealer a prime target. it difficult to find policies on dealers that never had an issue in past years. These changes caused a number of So what can happen totoyou in the event data is market insurance companies withdraw from your the Florida breached and how can you mitigate the exposure? or limit what they offer causing a supply and demand issue This subject is far tooraised complicated forthe mepositive to do it justice in which subsequently rates. On side, the this short column. is involved with the Red Flag insurance industryThe has FTC record surplus capital thanks in Rules and to thelower Gramm-Leach-Bliley Act Safeguards large part than expected catastrophe lossesrule. over Most of the states have their own laws in addition the the last few years and increased investments yields.toMost federal laws. It’s important to note expect that ourthe own state of the insurance industry analysts trend ofof Florida just passed the 2014 Florida Information Protection increasing rates to slow or even reverse in the near future. Act which is considered onecrystal of the balls strictest in the country. Unfortunately there are no to tell us what to expect in 2014. All we can do is keep a close eye on the In addition todo theour various laws you contend which industry and best to keep the readerswith, of this column have expensive notification requirements and fines, there ahead of the curve. are also civil issues. The damaged parties are very likely to class action lawsuits against the dealership their Onfile a personal note, I wanted to thank the FIADAfor Board damages. of Directors for the vote of confidence in electing us their Agent of Record. Our team of insurance professionals The short answers are the obvious ones. Don’t credit specialize in your industry and make it our jobstore to know card information, protect personal information such how your business works and understand what your as social security prevent employee access dealership needs numbers, to best protect your assets. We are to that information… there are any no real secrets here. My available for questions from association member main reason for the article is to make sure that you aren’t whether they are clients or not and we will do our best to “burying your head in the sand” when it comes to this answer those questions in a completely impartial manner. subject. Start by reaching out to your existing vendors and ask advice on how to mitigateisthe Many We for hope that Keys to Insurance an exposure. informative and of the people you are already paying for services can be a interesting column and proves to the readers that insurance big help. Your IT service providers, software companies, can be fun. attorneys, accountants and yes, even your insurance agents, can offer free ideas to help keep you safe. Kevin O’Connor of Dealers Insurance Services, Inc. is the There be a panel of experts discussing the subject at the FIADAwill Insurance Agent of Record. If you have insurance Fort Myers Town Hall meeting and I’ d highly recommend related questions, contact FIADA at (800) 237-0448 or visit attending. We hope to see you there! the DIS website at www.dealersinsurance.com. www.fiada.com www.fiada.com
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January 2015 — Independent Dealer — 9
MEMBERSHIP NEWS
New Members
DECEMBER 2014
ACI DEVELOPMENT CORP.
IMEL ENTERPRISES, LLC
Jacksonville, FL Ronald Overs Sponsor: NIADA
Bradenton, FL Ian Howard Sponsor: FIADA.com
ALLEN PARKER
MODERN MUSCLE CARS
Pensacola, FL Sponsor: Terry Myers
Ocala, FL Andrew Ackerman Sponsor: FIADA
BIARTI AUTO NICKOLAUS GOODHEART
Plantation, FL Bernardo Turbides Sponsor: NIADA
Tallahassee, FL Sponsor: Terry Myers RCK AUTO SALES, LLC
CARS OF JAX, INC.
Ft. Pierce, FL Kathryn Kreisner Sponsor: Kevin Scott
St. Johns, FL Ammar Shakhtour Sponsor: Auctions CMOBILITY SALES, LLC
SCARRITT
Charlotte, NC Jim Branning Sponsor: Amelia Tillman
Tierra Verde, FL Francis Scarritt Sponsor: Don and Kevin Scott
EPC MOTORS, LLC
SOUTHEASTERN AUTO AUCTION
Sebring, FL Jennet Tirban Sponsor: Kevin Scott
Savannah, GA Bill McCready Sponsor: Lisette Mariner
HOUSE CYCLE WORLD, INC.
Tampa, FL Joseph Finan Sponsor: Terry Myers
Rejoining Members
DECEMBER 2014
NORTH FLORIDA MOTOSPORTS, LLC.
Gainesville, FL Frank Curcio Sponsor: Amelia Tillman
Help strengthen the FIADA team—Become an MVP today! Get your name on the roster at www.FIADAcom 10 — Independent Dealer —January 2015
Renewing Members 30+ Year Members Car Collection of Tampa Mears Motor Leasing 20+ Year Members Cherry Cars, Inc. Fett Motors, Inc. Integrity Auto Sales, Inc. 10+ Year Members ADESA Auto Auction of Jacksonville Auction123.com Auto Superstore of Orlando, LLC Big O’s Northside Auto Sales Family Auto Mart, Inc. Gibson Truck World Neal’s Wheels Ultimate Image Auto, Inc. Used Car Supermarket Wayne Reaves Computer Systems Under 10 Year Members A & A Auto Sales, Inc. Accel Motorsports, Inc. Ace Motor Acceptance America Choice RV Autoflex, LLC Autoline Preowned Automotive One, Inc. Car Buying Service of Jacksonville Charlotte County RV Center, LLC Citrus Auto Trader Ex-Change Auto, Inc. Financial Insurance Brokers International First Place Auto Sales, Inc. Florida Autosport, Inc. Landress Auto Wrecking, Inc. M & M Auto Sales Macklin Automotive Co. MarkOne Financial Mobility Styles, Inc. Owl Automotive Group, Inc. PCH 1 Motorsports RHRM Royal Administration Services Silverauto Super Cars Auto Sales, Inc.
DECEMBER 2014 Tampa, FL Orlando, FL Fort Myers, FL Pinellas Park, FL Port Orange, FL Jacksonville, FL Weston, FL Orlando, FL Interlachen, FL Melbourne, FL Sanford, FL Fanning Springs, F Tallahassee, FL Tallahassee, FL Macon, GA Fort Pierce, FL Orlando, FL Matthews, NC Ocala, FL Gainseville, FL Atlantic Beach, FL Longwood, FL Keystone Heights, FL Port Charlotte, FL Lecanto, FL Pinellas Park, FL Coral Gables, FL Gainseville, FL Tallahassee, FL Bonifay, FL Cape Coral, FL Avon Park, FL Jacksonville, FL Weeki Wachee, FL Longwood, FL Tarpon Springs, FL Ocoee, FL Hanover, MA Zephyrhills, FL Bonita Springs, FL www.fiada.com
www.fiada.com
January 2015 — Independent Dealer — 11
FIADA invites you to be a part of the history-making journey this year.
T
he Florida Independent Automobile Dealers Association will celebrate its 75th anniversary this year, and hopes to honor the men and women who blazed a path founding the oldest independent automobile dealers association in the country. For the past seven decades, our members have been helping to advance the agenda of the “little guy.” It’s a heroic accomplishment. We can’t stop, though, until every dealer in Florida is a member.
With respect for the history of our Association, we stand ready to take on the new challenges that face dealers such as overregulation, abusive litigation, and ever-changing technological advancement. We need you on our team to explore new frontiers and reach goals we would have never imagined possible. When you join FIADA, you will not only be helping to write our new history, but also will receive a vast collection of benefits and services designed specifically to help used car dealerships succeed. Benefits like: •
OVER $8,000 IN COUPONS
•
FREE TRAINING
•
TECHNICAL ASSISTANCE
•
FREE ONLINE CONTINUING EDUCATION
•
INDEPENDENT DEALER MAGAZINE
•
ONLINE DEALER RESOURCES
•
DEALER SERVICE PROVIDER DIRECTORY
•
NIADA MEMBERSHIP AND BENEFITS
And so much more!
Use this application, or go online to www.FIADA.com to join now. 12 — Independent Dealer —January 2015
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January 2015 — Independent Dealer — 13
The History of
fiada Y
1971-1980
ou can trace back current regulations and enforcements back to the 1970s as consumer advocacy issues began to take center stage across the country. As distrust for government grew with the war in Vietnam, so did distrust in big business. An unintended casualty of was the small used car dealer. Suddenly, dealers everywhere began to be caught up in a wave of bad PR and stereotypical accusations that resulted in new legislation aimed at consumer protection. The Federal Trade Commission reported that the automobile business was the most complained about industry in the country. This led to legislation that is still enforced today, such as the Truth-in-Lending Act and national safety standards and regulations. The FIADA fought back by updating it’s Code of Ethics, which was adopted in 1973:
Independent Dealer magazine continues its recap of the Association’s history, leading up to the 75th Anniversary this October.
FIADA Code of ethics:
fair dealing toward the general public. Members have a general duty of integrity, honor and selves informed of and federal laws and shall endeavor to keep them state ty, coun city, all with ly comp shall bers Mem II. those laws governing their business. ess reputation of another member or competitor. III. A member shall not intentionally injure the busin advertising and selling. IV. Members shall employ truth and accuracy in with the sale of a motor vehicle. V. A member shall stand by any guarantee given d bring disrepute to the motor vehicle industry. VI. A member shall not perform any act which woul obile buying public any scheme designed to deceive or defraud the autom , found e wher halt, or se expo shall bers Mem VII. and aid in prosecuting those guilty of such acts. r served. ess methods to the end that the public will be bette busin ve impro to strive tantly cons shall bers Mem VIII.
I.
1971
Ja ck W
ille ynne, Jackwonv
1972
Pau l Dowd, Orlando
14 — Independent Dealer —January 2015
1973
Bo ll e bJ nv i acks o s k on , J ac
1975
1974
Ed
Ferna ndez, Ta
mpa
Ro yS
imp so
n , F t. L
le da r e au d
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Image continued to be an issue throughout the decade of the 1970s, and the FIADA concentrated legislative efforts around licensing. The focus had to be quickly shifted, however, in 1978 as the threat of an increase in the dealer surety bond became a hot topic. Effective Jan. 1, 1978, the dealer surety bond was raised from $5,000 to $25,000 and became a requirement. The condensed balance sheet option was no longer accepted. Oil and energy were the big focus for the 1970s, and had as much impact on the auto industry as any other. Energy Committees were formed on the state and national Association levels, looking for legislative help on the matter. Oil prices eventually came down, but not before they took their toll on car shoppers, who no longer looked for large, energyinefficient, older cars and instead wanted smaller ones that got better gas mileage. In 1978, one of the biggest issues that rallied dealers together was the concern with Personal Insurance Protection (P.I.P.). A temporary tag could not be issued to a customer
1976
M.L
do . Vau ghan, Orlan
without proof of this coverage. As a result of FIADA involvement, a bill was passed that helped ease some of the restrictions. Other legislative highlights of the 1970s included an establishment of a fast title service “dealer’s desk” which cost dealers $5 per use, but guaranteed a 72hour turn around time on titles. FIADA closed out the decade with 800 members, the highest since its inception. Always looking for new ways to motivate membership recruitment, the last surge of the 1970s was spurred by Oscar Houchins of Kissimmee. At the 1979 July Board Meeting, he challenged members to sign up new members and started a “pot” with $100, suggesting that the dealer who had recruited the most members by the October convention could walk away with it. Eighteen other members accepted the challenge, paid their $100 entry fee and started recruiting. Ironically, Oscar was the winner of the $1,900 for signing up 61 new members in just four short months.
1977
G ar
y Kees, Orlando
do ley H olley, Orlan
A 1976 survey of members of the National Independent Automobile Dealers Association provides some interesting facts about what used car lots looked like nearly 40 years ago.
AVERAGE LOT: • • • •
22,044 square feet 68% of member’s lots were paved 22% of member’s lots had coverings 61% used pole lighting and 39% used string lighting
SALES STATISTICS: • 84% of sales were made during daytime hours. 16% in what was considered twilight and evening hours. • $48,788 was the average monthly sales volume. • $447 was the average monthly advertising budget.
DEALERSHIP OPERATIONS: • Average staff size was 4 employees. • The average number of years in business was 15.7 • The average age of the dealer operator was 46. • 81% of members said they were not interested in a new car franchise. • The average net worth was $117,603. • 56% of dealers had service departments. • 63% had reconditioning departments.
1980
1979
1978
J ol
1976: THE AVERAGE DEALER
Ea
lle rl L ewis, Jacksonvi
Do
nS werd
le rda e d u lin, Ft. La
RELIVING HISTORY You will also want to check out the new video that features the FIADA story. The video was unveiled for the first time at the FIADA Annual Convention and captures the uniqueness of the Association as told by its members and volunteers. You can watch it on our YouTube channel or scan the QR code on this page. 16 — Independent Dealer —January 2015
www.fiada.com
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January 2015 — Independent Dealer — 17
L E G I S L AT I V E U P D AT E
2015 Session is Just Around the Corner BY SANDRA MORTHAM, FIADA LOBBYIST
M
eet your Committee Chairmen for the Florida Legislature as well as the members of the committees. See below for the committees that are of particular interest to FIADA’s legislative agenda. Once we have our legislative proposal, we will be asking you to contact your legislator from your area. They need to hear from you as a constituent and voter in the District. Your PAC contributions were put to excellent use this past cycle and we had every endorsed candidate elected but one for a 95 percent success rate. Please take a moment and contribute to the PAC today! Appropriations Subcommittee on Transportation, Tourism, and Economic Development Chair: Senator Jack Latvala (R) Vice Chair: Senator Jeff Clemens (D) • Senator Jeff Brandes (R) • Senator Nancy C. Detert (R) • Senator Miguel Diaz de la Portilla (R) • Senator Audrey Gibson (D) • Senator Dorothy L. Hukill (R) • Senator Maria Lorts Sachs (D) • Senator Geraldine F. “Geri” Thompson (D) Committee on Transportation Chair: Senator Jeff Brandes (R) Vice Chair: Senator Dwight Bullard (D) • Senator Oscar Braynon, II (D) • Senator Greg Evers (R) • Senator Denise Grimsley (R) • Senator Wilton Simpson (R) • Senator Geraldine F. “Geri” Thompson (D) 18 — Independent Dealer —January 2015
Transportation & Economic Development Appropriations Subcommittee Chair: Representative Clay, Ingram (R) Vice Chair: Representative George R. Moraitis, Jr. (R) • Representative Bruce Antone (D) • Representative Frank Artiles (R) • Representative Bryan Avila (R) • Representative Colleen Burton (R) • Representative Brad Drake (R) • Representative W. Keith Perry (R) • Representative Kathleen M. Peters (R) • Representative Lake Ray (R) • Representative Hazelle P. “Hazel” Rogers (D) • Representative Richard Stark (D) • Representative Victor Maneul “Vic” Torres, Jr. (D) Highway & Waterway Safety Subcommittee Chair: Representative W. Gregory “Greg” Steube (R) Vice Chair: Representative Holly Raschein (R) • Representative Laryy Ahern (R) • Representative Bryan Avila (R) • Representative Brad Drake (R) • Representative Dave Kerner (D) • Representative Mike La Rosa (R) • Representative Chris Latvala (R) • Representative W. Keith Perry (R) • Representative Michelle Rehwinkel Vasilinda (D) • Representative Ronald “Doc” Renuart (R) • Representative Irving “Irv” Slosberg (D) • Representative Richard Stark (D)
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January 2015 — Independent Dealer — 19
Friday, January 16, 2015 • 10:00am - 2:00pm Hyatt Place Fort Myers at the Forum | Ft. Myers, FL 2600 Champion Ring Road, Fort Myers, FL 33905
Join Us for Free Training, Networking, Vendor Expo and Lunch. Sessions Include: Legal Forum
Minimizing Your Risk for a Claim in Today’s Regulatory Landscape Dealers face a barrage of compliance issues and regulatory scrutiny. What you did yesterday may not hold true today. Join FIADA’s Outside General Counsel, Rob Sickles, as he discusses the consumer claims landscape and the latest compliance issues.
Panel Discussion
Everything You Wanted to Know About Privacy/Data Breach and More! With the rise of data breaches in recent years, businesses both large and small must take additional measures to safeguard data. Join our panel of experts as they discuss data breaches and how you can make sure you are in compliance with laws concerning this issue including: • Red Flag Rules • Safeguard Rules • Florida Information Protection Act
Hot Topics in the Payments Industry
Plain Talk on PCI Compliance & Influencing Consumer Behavior Come learn about PCI Compliance and other payment control issues like Convenience Fees and Surcharge Rules. Attendees will learn: • PCI Compliance • Convenience Fees • Surcharge Rules
Town Hall Meetings are absolutely free to attend. Lunch will be provided courtesy of Auto Data Direct. Don’t miss this great opportunity to network with colleagues and ask the experts your burning questions. Register today! A Special Thanks to our Sponsors: AFC, Auto Data Direct, Inc., & Wayne Reaves Software and Websites
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October 2013 — Independentwww.fiada.com Dealer — 20
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The celebration begins...
The Florida Independent Automobile Dealers Association’s
ANNUAL CONVENTION & TRADE SHOW Celebrating 75 years of serving Florida’s used car dealers. Mark your calendar for Oct. 22-24, 2015. Don’t miss it! Details to come
10.22.15
Hilton Orlando Lake Buena Vista, FL
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January 2015 — Independent Dealer — 23
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. FEDERAL DEVELOPMENTS No More Allotments. On November 21, in an effort to curb allotment system abuses, the Department of Defense announced a policy change that will prohibit servicemembers from using new allotments to buy, lease, or rent personal property, effective January 1, 2015. The allotment system allows servicemembers to make discretionary allotments from their pay and set up automatic payments to creditors for a variety of purposes. Under the new policy, personal property includes vehicles, appliances or household goods, electronics, or other tangible and movable consumer items. The policy change will not affect existing allotments and does not prohibit allotments to savings accounts or investments, to support dependents, or to pay insurance premiums, mortgages, or rents. The change applies only to active duty servicemembers, not military retirees or DoD civilians. Beating the Used Car Rule to Death. The FTC has twice sought comments on proposed changes to the Used Car Buyers Guide as part of its systematic review of its rules and guides. The FTC now seeks comments on more potential Rule revisions that would: (1) require dealers to indicate on the Buyers Guide whether they obtained a vehicle history report and, if so, to give a copy of it to consumers who request it; (2) revise the Buyers Guide statement describing the meaning of an “As Is” sale in which a dealer offers a vehicle for sale without a warranty; and (3) move boxes to the front of the Buyers Guide for dealers to 24 — Independent Dealer —January 2015
indicate whether non-dealer warranties apply to a vehicle. The FTC proposes the additional amendments to promote consumer access to vehicle history information, to clarify the meaning of “As Is” in the sale of used vehicles without warranties, and to make disclosures about non-dealer warranties more prominent. The FTC also seeks comment on six questions and many subparts concerning the proposed Rule modifications. Comments are due on the new proposed amendments by January 30, 2015.
Implications for the Indirect Auto Finance Market - that examined the proxy methodology used by the CFPB to determine disparate impact to legally protected groups. The study of more than 8.2 million auto financing contracts found that alleged pricing disparities between minorities and non-minorities for auto financing rates were not supported by data.
BHPH Servicing Woes. On November 19, the CFPB took its first action against a “buy-here, pay-here” car dealer. The CFPB claims that DriveTime employees harassed borrowers at work, harassed borrowers’ references, made excessive and repeated calls to wrong numbers, provided inaccurate repossession information to credit reporting agencies, failed to properly handle consumer complaints about alleged inaccurate information DriveTime furnished to credit reporting agencies, and failed to implement reasonable procedures to ensure the accuracy of consumers’ credit information. DriveTime must pay $8 million as a civil money penalty, end its allegedly unfair debt collection tactics, fix its credit reporting practices, and arrange for harmed consumers to obtain free credit reports.
On November 19, 16 state attorneys general wrote a letter to CFPB Director Cordray encouraging the CFPB to exercise its statutory authority to regulate the use of mandatory pre-dispute arbitration clauses in consumer agreements for financial products or services. The attorneys general, all Democrats, expressed concern about such clauses and related class action prohibitions, noting that “[o]ver the past decade, judicial decisions and business practices have diminished consumers’ rights and bargaining power with respect to contracts for financial services. Today, the average consumer nominally assents to all kinds of contracts without any opportunity or bargaining power to negotiate better terms. In such an environment, it is incumbent upon regulators with the power to effect change, such as the Bureau, to ensure that consumers have meaningful avenues for redress against those with whom they contract to provide financial services.” The AGs’ call for action comes despite the fact that the CFPB’s study on arbitration is incomplete.
GENERAL INTEREST On November 19, the American Financial Services Association released the results of a study it commissioned - Fair Lending:
LITIGATION Purchaser of Vehicle “As-Is” Not Prevented from Asserting Fraud Claim: Prior to buying a used car, the www.fiada.com
who worked on the car at a separate repair facility. The mechanic told her that he had replaced the alternator and there was nothing else wrong with the car. The buyer then bought the car without any warranty. A notice, the application for title, and Continued on Page 27
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purchaser asked the salesman if the car had been in an accident because she did not want a previously damaged vehicle. The salesman told her the car had not been in an accident and that it was in good working order. The salesman also told her to contact the mechanic
It’s time to change your approach to F&I compliance
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To order, visit us at www.counselorlibrary.com/offer/spot or call us at 877-464-8326. Also follow us on: www.fiada.com
January 2015 — Independent Dealer — 25
SALES TRAINING
Sales Manager’s Game Plan For The Day
customer leaves without buying. The salesperson needs to fill out an Up card then bring customer to you. Before they leave, sign off the card, interview customer and look for a way to help customer today, or find true objection. •
Check your salespeople’s game plan during the day to insure daily success.
•
Have salespeople fill out Success Guide before they go home each night.
BY GEORGE DANS
If your sales department could use some organization and focus, have your sales manager follow these steps.
W
e often complain that our salespeople are not organized and for the most part are on the hope program or waiting for the UP Bus to drop off prospects. Management needs to have an organized game plan to succeed every day. Add these duties to your sales manager’s daily tasks and watch things fall into place. •
•
•
Review log sheet and any working deals from day before and review. Always do a save-a-deal meeting to insure that deals that were worked can be saved. Talk to other managers so that you know what happened and what needs to be done to make deals. Get your team ready for the day. You are the face of the day, it should be positive and uplifting. Motivate, encourage, inspire, train, teach, coach. Make It Fun; call it Team 15. Update month to date salesperson spread sheet. Print out for each salesperson to review for a quick 10-15 minute meeting. Look for plus and minus percentages with each salesperson
•
Check lot and make sure it is ready and marketable today to sell! This one speaks for itself.
•
Make sure that service lane participation is being followed
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through with. Have a dedicated salesperson work the service area when the most customers are there. •
Team leaders need to be outside with salespeople controlling flow of traffic with sales team.
•
Training salespeople daily will help you sell more vehicles right away. Pick a subject and then train on it make sure that salespeople are role playing, along with practicing their vehicle walk around.
•
Review salesperson’s game plan for the day. Review their Daily Work Plan beginning of shift and end of shift that calls were made. Look at their George Dans Monthly Success Guide. Sign it off and now they are ready to work.
•
Manage any sales conflicts between salespeople.
•
Insure that online sales training is being done. George Dans’ Supersystem.TV or factory training is being done.
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Handle heat issues with customers.
•
100% turn. Have every salesperson turn every customer to you before the
George Dans has been helping automotive dealerships reach the next level in sales, gross and team performance since 1993. He has championed several training seminars and workshops on a factory level for Toyota, Honda, Daimler Chrysler and Kia - all resulting in measurable increases in unit sales, market share and customer satisfaction. George has recently completed custom inhouse training for dealerships in Canada, Puerto Rico, and Mexico; plus he has spoken for several NIADA groups and IADA groups.
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LEGAL ROUND-UP continued from Page 25
Disguised Finance Charge Claim Requires Proof that Increased Vehicle Price Was Charged to Credit Customers Only: A car buyer financed her purchase at a rate of 25 percent. After the buyer filed a Chapter 13 bankruptcy petition, she filed an adversary proceeding against the assignee of her finance contract. The bankruptcy court dismissed the adversary proceeding, and the U.S. District Court for the Eastern District of Michigan affirmed. The district court rejected the buyer’s argument that the assignee’s proof of claim must be disallowed because it is the result of a transaction that violated Michigan’s Motor Vehicle Sales Finance Act. The MVSFA prohibits a finance charge in excess of 25%. In order to qualify as a “finance charge” under the MVSFA, the charge must not be payable in a comparable cash transaction. The district court found insufficient the buyer’s claim that the excess amount she paid for the car over the retail price was a finance charge unless she could show that the excess amount was www.fiada.com
charged to her solely because she was a credit customer and would not have been charged to her if she was a cash customer. The district court noted that the buyer did not make this claim and did not allege that the dealership sells cars to cash customers for one price and to credit customers for a higher price. See In re Allen-Morris (Allen-
Morris v. Nicholas Financial, Inc.), 2014 U.S. Dist. LEXIS 153366 (E.D. Mich. October 29, 2014). Tom (thudson@hudco.com) and Nikki (nmunro@hudco.com) are partners in the law firm of Hudson Cook, LLC. (410) 8655411 or www.counselorlibrary.com.
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the buyer’s guide that she signed stated that the car was sold “AS-IS.” Two days after purchase, the car started leaking fluids. The buyer towed the car to a repair facility and was told that the car had previously been in an accident, had serious damage, and was unsafe to drive. The buyer sued for fraud for the representations made by the salesman and the mechanic that induced her to buy the car. The trial court granted summary judgment for the buyer. The appellate reversed, finding that genuine issues of material fact existed concerning what the salesman and the mechanic said to the buyer, but noted that buying a car “as-is” does not automatically preclude the buyer from asserting a fraud claim. See Melton v. George’s Used Car Sales, Inc., 2014 Mich. App. LEXIS 2025 (Mich. App. October 23, 2014).
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January 2015 — Independent Dealer — 27
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2014-2015 FIADA EXECUTIVE COMMITTEE:
JIM WINTERICK, SR. President Gulfstream Motor Credit Miami, FL (305) 253-2335
PAUL MATTON Senior Vice President Park Auto Mall Pinellas Park, FL (727) 639-1112
DINO MERCURIO Chairman of the Board Independent Credit, Inc. West Palm Beach, FL (561) 686-8673
LISA COMPAGNO Treasurer Palm Tree Auto Sales Stuart, FL (772) 288-2099
BRAD JOEL Secretary Splish Splash Auto Sales Princeton, FL 33032 (305) 258-1191
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SCOTT LANIER GOVINDA ROMERO PHIL RISLEY CHRISTOPHER LEEDOM STEVE MARBAIS, CMD Regional Vice President Regional Vice President Regional Vice President Regional Vice President Regional Vice President Autoflex LLC Credit Cars Marbais Enterprises, Inc. Cars & Credit of Jacksonville AutoMaxx Gainesville, FL Orlando, FL 32808 Ocoee, FL Jacksonville, FL Sarasota, FL (407) 468-9974 (407) 295-6211 (407) 877-7422 (904) 616-4074 (941) 309-1111
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January 2015 — Independent Dealer — 29
INDUSTRY NEWS AutoNation Moves to an Online Storefront
As car shoppers get more and more connected to the online shopping experience, industry giant AutoNation, the largest U.S. retailer of new cars, announced it will be transitioning to an online storefront and set pricing on new and used cars. Modeled after sites like TrueCar. com and CarGurus.com, AutoNation’s new Web portal allows customers to research prices that reflect current market values — usually discounted from the sticker price — and put a deposit on a car. Later, the company will offer online bids for trade-ins and arrange auto loans. The focus to online sales is meant to phase out the “closing” session triangle between customers, salesmen and managers at the dealership. Consumers say they want less haggle and straighter-deals, and the new approach is AutoNation’s response to that request. With 225 dealerships nationwide, AutoNation could ramp up the pressure on other dealers to transform the way they serve customers. AutoNation recently launched its SmartChoice Express digital sales tool in Florida and will roll it out next year to California and other states where it has multiple dealerships. AutoNation has reportedly spent more than $100 million putting all of its dealerships under one brand name and developing the technology for the sales tool. The AutoNation system will review recent sales data to determine prices for each model, usually with a discount off the manufacturer’s suggested retail price, the typical starting point for negotiations.
Chrysler Recalls 67,000 Pickup Trucks
drivers don’t follow recommended starting procedures, the truck could move when the ignition key is turned. Vehicles with manual transmissions are required to have interlock mechanisms that stop the motor from being started unless the clutch is depressed. The company is recalling Dodge Dakota, Dodge Ram 1500, 2500, 3500 and Mitsubishi Raider pickups that were made between July 2005 and June 2006. Nearly 55,000 of them are in the U.S. FCA US LLC, the former Chrysler Group LLC, will replace the switches at no cost to consumers. The company said it only used the faulty wire during the period covered in the recall.
Fiat Chrysler is recalling about 67,000 model year 2006 and 2007 pickups because of a problem that could allow the trucks to be started without the clutch being depressed. Chrysler said one death is associated with the problem. The National Highway Traffic Safety Administration had opened an investigation into the trucks in May after receiving a report of a child starting a 2006 Dodge Ram 3500 pickup without using the clutch. The truck moved forward, striking and killing another child, the safety agency said. The company said Monday that a wire in the clutch ignition interlock switch could break in trucks with manual transmissions. That could keep the truck from starting, or if
TransUnion: More Auto Credit in the 2015 Forecast
TransUnion’s annual auto loan forecast calls for auto loan debt to continue to rise to $18,244 at the end of 2015. This would mark 19 consecutive quarters of increases since the first quarter of 2011, when auto loan debt per borrower stood at $14,954. The TransUnion forecast calls for the national auto loan delinquency rate (the ratio of borrowers 60 or more days past due) to end 2014 at 1.20 percent, and increase slightly to 1.27 percent at the end of 2015. Source: Used Car News
Source: Associated Press
U-Save Truck & Car Rental is a NIADA Member Benefit
U-Save Car & Truck Rental has been approved by the National Independent Automobile Dealers Association as an endorsed NIADA National Member Benefit partner. U-Save has been in the rental car business for more than 35 years, with over 200 car and truck rental locations around the world. U-Save provides car rental discounts to businesses, individuals, and families with fast, friendly, economical service. U-Save has teamed up with NIADA to offer franchise opportunities to existing used car dealers. For more information, visit http://www.usave.com/franchise.
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