FIADA 1940-2015
Y E A R S
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MARCH 2016
Test your knowledge and see if it’s time for a refresher course.
PAGE 22 FULTON, MO PERMIT NO. 38
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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 Jim Winterick, Sr. President Lisa Compagno Senior Vice President Dino Mercurio Chairman of the Board Govinda Romero Secretary
Contents March 2016
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, CAE
8
Member News
10
Back to Basics FIADA Dealer Training School Instructor Terry Myers cautions dealers who do not think they want to help customers with financing.
12
Auto Thefts Steal (Your) Sales David Metcalf explains why your dealership needs to have secure procedures for key boards and test drives.
14
Member Spotlight Bruce and LaNette Neal of Dealers Auto Auction have been FIADA members for decades and are helping grow the Association by sponsoring a new member every month.
Send address changes to
18
Legislative Update The 2016 Session is nearly over. Lobbyist Sandra Mortham gives an update on what’s happened and what to expect in the last few days.
The Independent Dealer is a publication of: Florida Independent Automobile Dealers Association, 1840 Fiddler Court, Tallahassee, FL 32308
22
What’s Your Dealer IQ? Take our short quiz and see how you score. You might find it’s time for a refresher course with one of our convenient continuing education options.
24
A Look at Current Legal Issues Attorneys Tom Hudson and Nicole Munro recap recent federal and legal developments of interest to dealers.
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Industry News
Scott Lanier Treasurer Brad Joel Regional Vice President Christopher Leedom Regional Vice President Steve Marbais, CMD Regional Vice President Brandi Noegel Regional Vice President Phil Risley Regional Vice President FIADA STAFF Lisette Mariner, CAE Executive Director Terry Myers Educational Instructor Jason Berthiaume Education and Marketing Coordinator Amelia Tillman Membership Director Christy Taylor Editorial/Advertising
POSTMASTER:
FIADA • 1840 Fiddler Court Tallahassee, FL 32308 (850) 385-2712 • Toll Free: (800) 237-0448 Fax (850) 385-3251 • www.FIADA.com
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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March 2016 — Independent Dealer — 3
FROM THE PRESIDENT
Can You Help Me, Help You? BY JIM WINTERICK, SR., FIADA PRESIDENT
T
hose are the famous words we dealers often use when proposing an offer. We Independent Dealers are just that, independent. I am often asked by other dealers, “what’s in it for me?” When it’s a car deal that’s easy, of course it is an opportunity for financial gain. I have found that most of us are extremely interested in money and security. We want more of each. We are motivated by the prospect of increasing each one exponentially. Surely no one is surprised when another fellow dealer approaches anyone of us and proposes an opportunity to have more of either. We analyze the proposal and reflect on the decision utilizing our life experience and intelligence. Allow me to continue. Are you currently a member of your trade association? Are you interested in improving your bottom line? Are you looking to grow your dealership and stay viable as a business, this year and the next and there after? The answer to more profits and continued viability of your business is, the Florida Independent Auto Dealers Association. We are your fellow dealers working alongside our professional staff in Tallahassee to grow and improve the used car and truck dealers of our state. We are the voice of the Dealer in matters concerning the ongoing onslaught of regulatory demands put on our business by those who lack understanding of what we do. We are your trade association and we need your help. In numbers there is strength. We need each and every one of you to help us grow our membership. We need each of you to ask the dealers you know to join us. Your friends, your competitors, your wholesalers you buy from, your acquaintances, the dealer in the lane buying your cars, the pain in the *** dealer that always complains; anyone and everyone that is a dealer making their living in our business in this great state needs to be a FIADA member. If each and every one of us just
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signs one new member we will double our membership. It is through increased membership that we build our importance in Tallahassee. Our members, are voters and constituents. Politicos notice such things. Together we are strong; individually we are lambs to be picked off one by one. This month, I challenge you to work on developing a new member for all of our benefit. The member sign-up sheet is included in this magazine, pull it out take it to the auction and ask somebody you know to join. It’s not as difficult as you may think. After all, how hard is it to sell a friend on a good deal? And they will receive financial benefit from our coupon book offers in excess of $8,000. A small investment and an $8,000 return? What a great friend you’ll be. You will also be helping your fellow dealer become a better dealer. You will support your own business into the future. You will help your association become more influential in the halls of government. Your support will show your fellow dealers you are serious about your association. Their membership shows they care about how they make a living. Those outside our profession will notice that we are serious and need to be respected. Join us in growing your association because in unity there is strength; “From many one.” There is only one association that stands for the used car and truck dealers of Florida and that is your association--the FIADA. Come along for the ride of your life. We need each other. Get out there and sign someone up for our collective good. Happy selling and great prosperity! Jim Winterick Sr. FIADA President www.fiada.com
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EXECUTIVE DIREC TOR’S MESSAGE
If You’re Not Learning, You’re Not Living BY LISET TE MARINER, CAE, EXECUTIVE DIRECTOR
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members is to provide accurate, informative education ou can teach an old dog new tricks! Since this is my to members in a variety of ways. I listed some of the CE birthday month, I’ve been pondering age. I know I options earlier. We offer such a variety of options to get CE make it a point to try to learn something new every credit for a few reasons, but mainly so you have choices on day. Look through the eyes of a child and be inquisitive. what and how you learn. If you are a traditional classroom FIADA has so much to offer. We are helping you to learn every day through our online courses, webinars, town hall meetings, and even through the questions we receive through Some of you may look at the CE requirement as a our technical assistance lines. necessary evil to doing business, but I hope the As we approach license renewal time majority of you look at it as an opportunity to for dealers, there is no doubt you know of learn more about this industry. the CE requirement you are responsible for. Before you can renew your license, you must have completed at least eight hours of kind of student, then we have an in-person course that gives continuing education from a DMV approved course. The you written materials and a live instructor. If you prefer credits must also be earned before April 30, 2016. electronics and need flexibility on how and when to get your Some of you may look at the CE requirement as a CE, we have an online course that is available when you are. necessary evil to doing business, but I hope that the majority You can read about both of these options on page 22. of you look at it as an opportunity to learn more about this If you like a little “fun” with your learning, then you’ll industry. Constantly changing state and federal regulations like our amazing Annual Convention workshops and panel make it a necessity to stay educated on the legal aspects of discussions. These are the best in the industry, bar none your business. For dealers who are on the biennial renewal and always have the most talented, experienced teachers. cycle, the CE courses help to fill in the blanks on things that This year’s convention will be October 20-22, 2016 at you may have forgotten or need to learn, every two years. the Renaissance Orlando at SeaWorld in Orlando. More So many other industries require CE credits, and for information and details will be made available soon, as we good reason. Doctors, health care workers, teachers, realtors, lock-down preparations. and others are constantly continuing their education. Think If a “free lunch” is more your style, then make plans to about it, would you want to see a surgeon who had not had attend the Town Hall Meeting also in Orlando at the Rosen any new training since they graduated medical school twenty Shingle Creek on April 8. Though this will not meet your CE years ago? Sure, they are skilled and know what they are requirement with the state, these meetings are always timely doing, but do they know the best way? You want a physician and relevant and give you face-to-face access with our legal who stays on top of the latest innovations and knows the partners, vendors and officials. Plus, thanks to sponsors like most efficient and technologically-advanced way to perform Auto Data Direct, lunch is complimentary. It’s a win-win. procedures that will improve your outcome and recovery You can find more information about all of these CE time. Your customers feel the same way about you. They opportunities at www.FIADA.com. Even if you have already want to buy their cars from a dealer who is professional, completed your credits, I would suggest still signing up. To stays current with legal and regulatory issues and does things quote America’s beloved author Dr. Seuss, “the more that you the right way. Continuing Education helps you do that. know, the more places you’ll go!” I feel that one of FIADA’s main responsibilities to its 6 — Independent Dealer — March 2016
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MEMBERSHIP NEWS
New Members
Renewing Members
FEBRUARY 2016
30+ Year Members Panama Motor Sales Inc.
FEBRUARY 2016
AFFORDABLE AUTO MOTORS, INC. Jacksonville, Florida Kel Alia Sponsor: John Cousins/Dealers Auto Auction
PENCO INTERNATIONAL CORP. Weston, Florida Hector Urrea Sponsor: Terry Myers
COLUMBUS AUTO SALES Tampa, Florida Alex Balmaseda Sponsor: Kevin Scott
QUEMATI AUTO Lakeland, Florida Oluwaseun Kudaisi Sponsor: Terry Myers
DATAKOVA AUTO GROUP LLC Tampa, Florida Kirk Simmons Sponsor: Carrie Keiper
ROCKETEER LLC Jacksonville, Florida William Granger Sponsor: Janet Curry
DEEP SOUTH SPECIALTIES LLC Lakeland, Florida Troy Nibarger Sponsor: Carrie Keiper
SPARTAN FINANCIAL PARTNERS Spartanburg, South Carolina Rachel Swain Sponsor: Amelia Tillman
HAINES CREEK AUTO SALES Leesburg, Florida Jackie Donahue Sponsor: Jennifer Finlay
SWERVE AUTO LLC Longwood, Florida Swerve LLC Sponsor: ASC / Jeff Mclintock
L.V. AUTO GROUP, LLC Sanford, Florida LeVon Hodges Sponsor: www.FIADA.com
Rejoining Members
BRIDGET LAPOINT Cape Coral, Florida Bridget LaPoint Sponsor: Terry Myers
FEBRUARY 2016 AVIV VENTURES INC Davie, Florida Eve Sardi Sponsor: FIADA CROWN MOTORS, INC. DBA VOILA
MARRERO ENTERPRISES Brooksville, Florida Carlos Marrero Sponsor: Terry Myers
AUTO GROUP Orlando, Florida Chuck Nemeh Sponsor: Amelia Tillman
MAZ MOTORS Palm Harbor, Florida Valerie Maz Motors Sponsor: DHSMV
GAS BUGGIES Lehigh Acres, Florida Tim Parmenter Sponsor: Amelia Tillman / Rejoin Mailing
MIKE’S PERFORMANCE GARAGE, LLC Port St Lucie, Florida Mike Day Sponsor: Amelia Tillman
NATIONWIDE FLEET SERVICES INC Apopka, Florida Kirt Foque Sponsor: Lisette Mariner
MOTO LABS LLC Clearwater, Florida Aaron Pennamacoor Sponsor: Kevin Scott
NORTH FLORIDA MOTOSPORTS, LLC Gainesville, Florida Frank Curcio Sponsor: Amelia Tillman
NATIONS TRUCKS Sanford, Florida Derick MacKenney Sponsor: Carrie Keiper
TK-TRADING INC. Summerfield, Florida Brian Baker GM Kevin Scott
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20+ Year Members Caicos Trading & Equipment Marbais Enterprises, Inc. Mears Transportation Group Roney Auto Sales 10+ Year Members Auto Add-Ons, Inc. Cassat Auto Sales Credit Acceptance Corporation Gene Gorman’s Auto Sales Insurance Auto Auction J.D. Byrider Millenia Motors, Inc. Northwest Florida Auto Sales Prestige Auto Sales Southeast Fleet Auto Sales, Inc. Under 10 Year Members Accounting and Tax Resource Center ASC Warranty, Inc. Autoflex LLC Bonita Auto Center Inc. C & J Auto Collection Car Solutions LLC Cars of Jax Inc Celebrity Auto Group College Auto Sales of FL, LLC Corona Auto Sales LLC Dan’s Deals On Wheels Auto Sales, Inc. Dealer Consulting Services, Inc. Delray Exotic Motors DMC Motors of Florida EJ’s Quality Autosales Elite Autos FH Equipments Inc Foreign Affairs Auto Good Rides, Inc. Gorilla Custom Motors, Inc. Got Car Auto Brokers LLC Guaranteed Auto Finance Inc. Hasco Medical Inc Instant Wheels Used Cars JD Byrider of Bradenton Kicklighter Auto Sales LLC Lake Park Auto Brokers Outdoor Recreation World, Inc. Palm Tree Auto Sales Pegasus Classic Cars LLC Penske Truck Leasing Co LLP Powerfun Inc. SS Auto Group Strickland Auto Solutions Inc The Connection Motors, Inc. The Garage Inc The Wholesale Club, Inc dba Target Auto Brokers Townsend Motors, Inc.
Jacksonville, Florida Miami, Florida Ocoee, Florida Orlando, Florida Plant City, Florida Tavares, Florida Jacksonville, Florida Southfield, Michigan Punta Gorda, Florida Orlando, Florida Jacksonville, Florida Longwood, Florida Ft Walton Bch, Florida Ocala, Florida Clearwater, Florida Pembroke Pines, Florida Mountain Home, Arkansas Gainesville, Florida Bonita Springs, Florida Crestview, Florida West Palm Beach, Florida Saint Johns, Florida Sarasota, Florida Miami, Florida Auburndale, Florida Davie, Florida Miami, Florida Boynton Beach, Florida Orlando, Florida Jacksonville, Florida Port Orange, Florida Orlando, Florida West Palm Beach, Florida Stuart, Florida Boca Raton, Florida Hollywood, Florida Kissimmee, Florida Londonderry, New Hampshire Jacksonville, Florida Bradenton, Florida Jacksonville, Florida Lake Park, Florida Panama City, Florida Stuart, Florida West Palm Beach, Florida Reading, Pennsylvania Tavares, Florida Merritt Island, Florida Chiefland, Florida Hialeah, Florida Doral, Florida Sarasota, Florida Auburndale, Florida www.fiada.com
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BACK TO BASICS
Put Your Money Where Your Money Is BY TERRY MYERS
Dealers who proclaim they will only do “cash deals” are really leaving a lot on the table. Helping customers finance their vehicles will keep your sales and profits healthy.
T
here’s a lot of money in metal, but the real money is in money!
It is interesting to me the number of times I hear from prelicensing students, “I will only do cash deals” or, “I will never finance or help customers get financing.” Countering this belief in the class is nonproductive and might be detrimental to helping the new dealer pursue their dreams. They find out soon into the real world of wheels that financing directly or indirectly is as important to the health of their business as breathing is to them personally. They just have to discover it for themselves. Recently, the NIADA purchased Leedom and Associates Buy-Here Pay-Here training programs and, with the help of Chuck Bonnano, probably the foremost teaching and hands-on authority in the industry, have nationalized the training process. FIADA and other state IADA association members now have access
to everything from the basics to fullblown peer-to-peer twenty groups. Put $10,000 into a CD at the bank and what percent return can you expect? Put $10,000 into an investment that you control and now what kind of investment percent can you expect? Like any good investment, you need to do your homework. What do you know about the customer, the car and the cash? What do you know about you? Truth is your best research tool. Where do you find and how do you recognize the truth? What do you do with the information? Does the deal make financial sense to all parties – the customer, you and the financial resource? After research, should this be a cash only customer or does financing make sense? Some customer’s history shows them as good payers that keep their word and you want to be the bank. Some customer’s history shows them as good payers for a period of time and you might want to be the bank for
a short while and then sell/convert the contract to cash with a willing outside source. Some research reveals customers you would not touch with a ten-foot pole. There are companies out there with twelve-foot poles. Why leave money on the table? Properly licensed with your Electronic Lien Provider number and your Motor Vehicle Retail Installment Seller license, you don’t have to turn away business. With proper training and a good Dealer Management system, such as vendor Wayne Reaves Software, their verbal, live and online support resources, as well as other extended training resources such as the NIADA’s new Buy Here-Pay Here training tools, you maintain control and decide what makes the most financial sense to you and your dealership. The majority of dealers that choose to not help their customers with needed financing soon find out that their business may have the same fate as not breathing would have for the dealer him/herself. Yes, there is a lot of money in metal, however, the real money is in money. 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) 804-7375. Email: tmyers@floridaautodealerschool.com. Feedback is appreciated and encouraged. Terry LB Myers, author, lecturer, FIADA instructor, FADS owner/ instructor.
Correction: A quick correction to one of the Case Studies found in the “Discretionary (County) Sales Surtax Updates” article in the January 2016 issue of Independent Dealer. Please note the following correction to Case Study 3: A $30,000.00 sale times six percent is $1,800.00, plus .5% times the $5,000.00 cap equals $25.00 (not $15.00). The total tax is $1,825.00. 10 — Independent Dealer — March 2016
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March 2016 — Independent Dealer — 11
KEYS TO INSURANCE
Auto Thefts Steal (Your) Sales BY DAVID METCALF, WILLIAMS & STAZONNE INSURANCE AGENCY
Forget crowbars and coat hangers, auto thieves are using technology and lax dealer security measures to steal cars off the lot. Make sure your dealership is protected.
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ecent FBI statistics state that auto theft is on the rise. Auto dealerships are attractive targets for thieves. Many dealers have seen a spike in auto theft in the past few months. Theft from a dealership is often viewed as a “victimless crime” by organized theft rings and teenage gangs. Gangs are stealing several cars at a time to use in other crimes, joy rides or races and then abandon the cars – often with thousands of dollars in damage. According to one report 41 percent of vehicles stolen from
sold as parts and scrap for as much as $30,000. In addition to the theft of autos there is a rise in the theft of “Smart Keys” and remotes. These items are portable and easily sold costing hundreds of dollars to replace or re-key the dealer’s cars. Thieves simply gain access to the dealership office and help themselves to all the keys which can sometimes be seen hanging on a wall inside. In one recent case thieves stole all the keys one night and used the VINs posted
Many used car dealers are vulnerable due to fewer security measures in place than new car dealers. Weak security and key controls are major contributors to theft, burglary, and vandalism.
auto dealerships are never recovered. These cars are usually targeted by theft rings for resale, parts-stripping or export. Another recent statistic states that certain models in the $20,000 range can be stripped and 12 — Independent Dealer — March 2016
on dealer website to match keys with cars and came back the next night for the cars they wanted. Technology is playing a larger role in auto theft and today’s thieves have become very sophisticated in their efforts.
If you have theft coverage, your carrier will reimburse you for the cost of the car less deductible which may be $1,000 or higher. There is no coverage for lost profit on the unit, lost business while restocking, or your time in dealing with the loss. This is called the “hidden cost” of claims. Some carriers also exclude coverage for “Theft from Unprotected Lots” which means if you do not have adequate security they may not pay your claim. Other carriers exclude theft when the key is in or on the vehicle (including a window lock box). This should be reviewed with your agent. Do not wait until you have a claim to find out you have no coverage. Many used car dealers are vulnerable due to fewer security measures in place than new car dealers. Weak security and key controls are major contributors to theft, burglary and vandalism. How can you protect yourself from these losses? Use perimeter posts, barriers, or fences with locking gates, alarms with motion detectors, and exterior www.fiada.com
Making your dealership more secure will encourage thieves and vandals to go down the street and look for an easier target. David Metcalf is a garage liability insurance specialist and an agent at the Williams & Stazzone Insurance Agency – a Preferred Provider of Insurance to FIADA members. Questions can be directed towards 800-868-1235 and info@wsins.com.
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lighting. Enable all vehicle alarms when vehicles are unattended. Secure paper titles, registrations, and keys in a safe or locking cabinet – never leave them out in the open or in public view during business hours. If a key is missing – secure the vehicle immediately. Do not release a customer vehicle until the customer identity is verified. Accompany customers on ALL test drives. Many law enforcement agencies will not pursue “theft” of vehicles on unaccompanied test drives – referring dealers to use civil remedies for recovery. And remember, your theft coverage won’t help you either when your customer decides to keep your car (aka steals it). That’s where False Pretense coverage comes into play and will be included in one of our next articles.
FIADA is your number one source for advice and information. Technical questions, legal questions, regulatory questions...bring them on! SINCE 1940
www.fiada.com
Our network of industry veterans, professionals and consultants can help you find the answers you are looking for. Members can call us anytime at (800) 237-0448 or access our online resources 24/7 at www.FIADA.com. It pays to be a member!
March 2016 — Independent Dealer — 13
MEMBER SPOTLIGHT
Dealers Auto Auction: Giving the Gift of FIADA BY CHRISTY TAYLOR
Bruce and LaNette Neal are doing their part to strengthen the Association by sponsoring one new member a month.
MEMBER 2016
Do you know a member who deserves the spotlight? Let us know at info@FIADA.com.
B
ruce and LaNette Neal have been around the auction block a few times, literally. They have been familiar faces in Florida’s used car industry and continue to be today as owners of Dealers Auto Auction in Gainesville. The Neal’s actually met at an auto auction in West Palm Beach. Bruce has been primarily in sales for his career and LaNette in administration. Their partnership in marriage, and business, seems to be very complimentary and over the years has grown into a successful family business. It started with Neal Auctioneers in the 1990s, where they specialized in mobile auctions selling new car dealer trades all over south Florida. In 2006, the Neal’s purchased the Alachua Auto Auction at 3728 NE 4th Street in Gainesville. They renamed the business to Dealers Auto Auction and have created a small sale with high percentage every Thursday at 6 p.m. With about 200 cars coming through the lanes, they usually sell around 120 each week. The average sale is right in the independent dealer sweet spot at $3,900 and about 88 percent of the vehicles are new car dealer trades. Dealers Auto Auction has two other satellite locations, one on the East Coast in Merritt Island 14 — Independent Dealer — March 2016
and the other just a little further south in Stuart. Merritt Island is a monthly sale, scheduled for the second to last Thursday of the month, and Stuart is bi-weekly moving over 200 cars every other Monday. Bruce says the focus of Dealers Auto Auction is on local dealership relations while maintaining a family oriented style of management. He hopes dealers see it as a well-run auction that treats everybody the way they want to be treated. “Independent dealers are the heartbeat of this business. Without them, we
wouldn’t be here,” Bruce said. “I love this business and the people in it.” The Neal’s have also been long-time supporters of the Florida Independent Automobile Dealers Association first joining over 20 years ago. They have maintained their membership and support over the years because they believe in what the association stands for and the great service it provides independent dealers. So, when FIADA member John Cousins approached Bruce about sponsoring new members it was without hesitation he said yes. Bruce talked with LaNette and their two sons, and all decided it was a go. www.fiada.com
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March 2016 — Independent Dealer — 15
DEALERS AUTO AUCTION continued from Page 14.
“That’s the great thing about small businesses, you can make decisions and implement them in a snap of the fingers,” Bruce said. Dealers Auto Auction committed to sponsoring a new FIADA member every month. At their monthly meeting, the sales department chooses one dealer to sponsor, and the commitment is to do that for at least the rest of the year. Dealers Auto Auction also provides a $75 off buysell fees in the FIADA Coupon Book of Savings that all new and renewing members receive.
TOWN HALL Join us for a day of education, networking and a FREE LUNCH.
April 8, 2016 Rosen Shingle Creek 9939 Universal Blvd Orlando, Florida, 32819
s te r Re gi at e o n l i n c om . A D F IA
Town Hall Meetings are FREE to attend. Don’t miss this great opportunity to network with colleagues and ask your burning questions to the experts.
Go to www.FIADA.com to save your seat. Stick around and join us for the FIADA Board of Directors Meeting on April 9 from 9:00 am - 3:00 pm at the Rosen.
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“We have been associated with FIADA for over 20 years and would highly recommend the association and the ideals they represent,” Bruce said.
Join us for the next FIADA
16 — Independent Dealer — March 2016
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March 2016 — Independent Dealer — 17
L E G I S L AT I V E U P D AT E
2016 Legislative Session Wrap-up BY SANDRA AND ALLEN MORTHAM, FIADA LOBBYISTS
P
riority # 1: Success of the Lienholder Bill by Representative Jay Trumbull HB 641 and Senator Garrett Richter SB 772
We monitored and/or killed bills this session related to increased regulation on advertising, tires, salvage, just to name a few.
This was the marquee issue for the 2016 Florida Legislative Session. While our issue was included in the original bill by Rep. Jay Trumbull (R-Panama City), it was not without drama because the bill was one of the major legislative priorities of the Department of Agriculture and Commissioner Adam Putnam (R-Polk County). His staff was very gracious in working with our people including Rob Sickles and our Executive Director Lisette Mariner to get the language hammered out in the original bill.
Since we are still three days out from sine die (end) of the regular session, we are still actively monitoring the bills dealing with the Dept. of Transportation and the Dept. of Highway Safety and Motor Vehicles. These are the agencies for which most of our regulation and oversight occur so we pay special attention to everything that touches their statutes. We have also been very keenly watching any bills that could have been utilized as possible vehicles for bad amendments that could have adversely affected FIADA members to include issues such as title work etc.
The session was a roller coaster ride for this bill and everyone working on it because it was amended in almost every committee on both the House and Senate side. Our language was in the bill, then out of the bill in the House...it was not in the original bill in the Senate, but included at a subsequent committee stop along with other language that made the bill very contentious in the Senate. It appeared for quite some time that the bill was destined to fail because of a lack of agreement between the House and Senate as well as some of the stakeholders. We were able to overcome these and other obstacles through hard work, a little luck and I would be remiss if I didn’t acknowledge the kind assistance that we got from the franchise dealers and their lobbyist David Ramba with whom we have always had a fantastic personal and working relationship. The bill as of this moment has passed the legislature and is awaiting presentation to the Governor. Thanks to the dealers for their support on this issue, especially Dino Mercurio and Jim Winterick. Be sure and watch for a possible request from Lisette to contact the Governors Office to lend your support as well. 18 — Independent Dealer — March 2016
Aside from any issues popping up in these final days of session, we have had another fantastic year! We got our top priority, must pass bill done and we have been very successful thus far making sure none of those undesirable bills and / or amendments have been passed. We are looking forward to the Governor signing the Dept. of Agriculture bill and thus ending the 2016 regular session. We are hopeful that this year will NOT include any special sessions, however there is a possibility for at least one based upon the fact that the budget as passed by the House and Senate is not nearly what the Governor had asked for in his pre-session requests and there could be extensive vetoes of member projects as a result. This may or may not trigger a special session to consider the over-ride of some or all of these vetoes. If this looks more and more likely to occur, then we will keep you posted! Thank you all so much for the opportunity to work for you! Session is almost over, but it is never too late to give to the FIADA PAC. Use the form on page 26 or go online to our website at www.FIADA.com to make a donation. www.fiada.com
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COVER STORY
W
ell, how did you do? How did your employees score? If the answer for either of these question is less than 100 percent, then it’s time for a refresher course. The DMV requires you to renew your Continuing Education (CE) Credits every two years. If you last took a CE course in 2014, you must complete another class by April 30, 2016. FIADA has these easy and convenient options available:
Whether you are a newbie or a veteran, take this quick quiz and test your knowledge of some of the fundamentals of being a Florida independent car dealer. Unfair competition/curbstoning fines were raised on October 1, 2016 to: a) $100 b) $250 c) $500 d) $1,000 Dealers must claim a sales tax refund within (_?_) months of a repossession. a) 3 b) 6 c) 9 d) 12 May a dealer place a STOP on a registration with proper documentation? a) Yes b) No The IRS and the Florida DOR have stepped up audits to discover employees disguised as? a) Parents b) Officers c) Independent Contractors d) Silent Partners Currently, there are proposed federal legislative efforts to (1) 'Ban Arbitration' and (2) 'Stop dealers from selling vehicles with Open Recalls until fixed', right? a) Yes b) No Answer Key: 1) b; 2 ) d; 3) a; 4) c; 5) a 22 — Independent Dealer — March 2016
ONLINE Title & Registration or Continuing Education Members FREE Non-Members $39.95 This option includes two DMV approved courses to choose from. Because it is online, it also allows you to work at your own pace and start and stop when you need to. After completion, you will be able to print your certificate immediately. IN PERSON Continuing Education Members $79 Non-Members $99 An in-person classroom setting allows you the chance to interact with FIADA’s knowledgeable instructors, ask questions and get real-life practical examples of how rules and regulations affect your dealership. This course is DMV approved and at the end, you will leave with your certificate in hand. For more information on either of these courses, as well as a list of upcoming dates and locations, please visit www.FIADA.com and click on the Dealer Training School tab. You can also call the FIADA office at (800) 237-0448 for questions or to register for a course. www.fiada.com
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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 Offering cars that are “certified preowned,” “inspected” or “guaranteed”? If some of those cars you are offering are subject to open recalls, you urgently need to review your advertising in light of the recent FTC action described below. FEDERAL DEVELOPMENTS Spanish, Anyone? On January 22, the FTC issued its newest Spanish-language fotonovela in an effort to educate Spanish-speaking consumers about the car buying process and increase awareness of possible scams. The CFPB Rides Herd on a BHPH Dealer. In late January, the CFPB announced a consent order with Herbies Auto Sales, a Colorado buyhere pay-here used car dealer. The CFPB alleged that Herbies engaged in abusive acts or practices through its sales process and misled consumers about the cost of credit. The CFPB charged that Herbies unlawfully advertised a misleadingly low 9.99 percent APR, without disclosing a required warranty, the cost of a required payment reminder device and other credit costs as finance charges. The CFPB claimed that the ads helped Herbies convince consumers they would get the 9.99 percent APR instead of the much higher rate actually charged. According to the CFPB, Herbies violated the Truth in Lending Act and the Dodd-Frank Act by hiding finance charges and advertising a lower APR than consumers received and by misrepresenting finance charges and APRs in marketing materials, showroom window displays, and TILA disclosures. Hidden finance charges, according to the CFPB, included 24 — Independent Dealer — March 2016
costs, only in financed transactions, for a required repair warranty and for a required GPS payment reminder device. The Bureau also alleged that Herbies hid finance charges because Herbies refused to negotiate prices with credit customers but did negotiate with cash customers, resulting in a finance charge for credit customers that should have been included in the disclosed cost of credit. Finally, the Bureau claimed that Herbies’ sales process lured consumers into the dealership with an inaccurate APR and then kept them in the dark about the true cost of financing the cars they were buying, thereby taking advantage of consumers’ inability to protect their interests in selecting or using Herbies’ financing. Although you would never know it from the CFPB announcement, Herbies did not agree to any of the CFPB’s allegations, entering into the consent order solely for purposes of settlement. Under the order, Herbies must provide $700,000 in consumer redress. A civil penalty of $100,000 is suspended as long as the consumer redress is paid. Herbies also agreed to stop deceiving consumers during the financing process and must not misrepresent interest rates, finance charges, or amounts financed, or any other fact material to consumers concerning the financing of any vehicle. Herbies also must clearly and prominently post the purchase price on all automobiles for sale when offering financing. Finally, Herbies must give consumers certain information about the financing offer, including the actual APR, the car price, and all finance charges, and get a signed acknowledgment from buyers that they received the required information before or at the time financing is offered.
CPO, Warranted and Guaranteed Cars With Open Recalls. On January 28, the FTC announced proposed consent orders with General Motors Company, Jim Koons Management and Lithia Motors Inc. under which the companies have agreed to settle separate FTC administrative complaint allegations that each touted how rigorously they inspect their cars, yet failed to disclose that some of the cars they were selling were subject to unrepaired safety recalls. The FTC’s complaint against GM cited the company’s representations for “Certified PreOwned Vehicles,” while the complaint against Koons dealt with that company’s purported “guarantee,” and the Lithia complaint involved the company’s “warranty.” For each company, the charge was similar – in describing the program and touting the inspection of the vehicles, the companies failed to disclose that some of the vehicles were subject to open (unrepaired) recalls. The proposed consent orders remain in effect for 20 years, and prohibit the companies from claiming their used vehicles are safe or have been subject to a rigorous inspection unless they are free of unrepaired safety recalls, or unless the companies clearly disclose the recalls in close proximity to the inspection claims. The proposed orders also would prohibit the companies from misrepresenting material facts about the safety of used cars they advertise. LITIGATION Insurance Policy Covering “Wrongful Repossession” Did Not Cover Claims that Pre- and Post-Sale Notices Violated State Law: A dealership was insured under two insurance policies. One provided up to $500,000 for www.fiada.com
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March 2016 — Independent Dealer — 25
LEGAL ROUND-UP continued from Page 24.
indemnity from and defense against suits for damages arising from the dealership’s “wrongful repossession” of an automobile and was linked to a separate $25 million umbrella policy. The other provided for up to $25,000 for costs in defending against suits arising from the sale of a car. The dealership sold a car to consumers and later repossessed and sold it for nonpayment. Prior to the sale of the car for nonpayment, the dealership sent the consumers a notice informing them that for a $25 charge, they could request an accounting. After the sale, the dealership sent them a notice charging them attorneys’ fees. The dealership sued the consumers for the deficiency balance, and they counterclaimed, alleging that the dealership’s pre- and post-sale notices violated the Uniform Commercial Code and the Missouri Motor Vehicle Time Sales Act. The dealership tendered the counterclaims to the insurer for defense and indemnity under the larger policy. The insurer refused, asserting that the claims did not constitute claims for “wrongful repossession.” The dealership sued, and the insurer moved for summary judgment. The trial court granted the motion, concluding that the larger policy only applied to repossessions that were wrongful, not to wrongful debt collection practices after repossession. The U.S. Court of Appeals for the Eighth Circuit affirmed. The appellate court found that the procedures required by statute for disposition of repossessed property are not part of the repossession process because sale of repossessed property is a separate event that takes place after repossession is complete. See Wolfe Automotive Group, LLC v. Universal Underwriters Insurance Company, 2015 U.S. App. LEXIS 21649 (8th Cir. (W.D. Mo.) December 15, 2015). Tom (thudson@hudco.com) and Nikki (nmunro@hudco.com) are partners in the law firm of Hudson Cook, LLP. For information, visit www.counselorlibrary.com. Copyright CounselorLibrary.com 2015, all rights reserved. Single publication rights only, to the Association. (2/16). HC# 4848-8454-3277.
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The Florida Department of Revenue is initiating a statewide audit campaign against Florida used car dealers, starting late summer 2014. The Department obtained DMV records of all used cars sold in Florida and is comparing these records against sales tax returns filed by used car dealers. Based on this information, the Department will estimate what taxable sales should have been for each used car dealer and initiate desk audits, full audits, and criminal investigations based on the level of estimated underreporting. These estimates can be erroneous and do not take into account financing charges, repossessions, sales to out of state residents, or other factors that can affect sales tax. Even worse, it only takes $301 of collected but not remitted sales tax to face felony charges and up to 5 years in jail under FL law.
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The Law Offices of Moffa, Gainor, & Sutton, PA concentrate in the area of Florida sales and use tax controversy and we are qualified to assist used car dealers in a defense against the Florida Department of Revenue. Whether you have underreporting, you’re not sure whether your company is ready for a sales tax audit, or you simply have questions about which FL DOR forms to file (e.g. Form DR-123), then please contact our law offices today for a FREE INITIAL CONSULTATION.
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March 2016 — Independent Dealer — 27
INDUSTRY NEWS NIADA CPO Press Kit Launch NIADA is pleased to announce the launch of the NIADA CPO Program Press Kit. This resource was developed to assist our CPO program member dealers in telling their unique, customercentric, market-innovator story surrounding their adoption of the NIADA CPO program and how it conveys trust, ethics, market value, safety and customer peace of mind to the local newspaper, radio, TV and digital media outlets in your market. As local media disseminate the information within the CPO program press kit, consumers in your market will attain a much deeper understanding of the value certified pre-owned vehicles represent and the brand confidence, trust and integrity NIADA stands for within this program. That helps your used vehicle inventory stand out versus competitors, and provides a level playing field with the CPO programs of new car franchise stores. Go to http://www.niadacertified.com/dealers/presskit to review and download the information.
PassTime Prevails in Patent Validity Challenge PassTime, a leading provider of GPS and Payment Assurance Technology solutions, is pleased to announce that the United States Patent and Trademark Office invalidated the entirety of a patent owned by LunarEye and which was the subject of a patent lawsuit claiming infringement by certain PassTime products. The patent, 6,484,035, had claimed an apparatus and method for triggerable location reporting and listed Alvin C. Allen, Jr. (a.k.a. Chuck Allen) as the alleged inventor. In its opinion of February 2, 2016, a panel of three judges of the Patent Trial and Appeal Board for the United States Patent and Trademark Office ruled that PassTime “has shown by a preponderance of the evidence that claims 1–24 of the ’035 patent are unpatentable” and entered an order that “claims 1–24 of U.S. Patent No. 6,484,035 B2 are held unpatentable under 35 U.S.C. § 103.” On September 28, 2015, the Patent Trial and Appeal Board had previously found that claim 3 of the patent was invalid, which had been the sole subject of a prior validity challenge by PassTime.
Southeastern Auto Auction of Savannah Breaks Records On Wednesday, February 24th Southeastern Auto Auction of Savannah held its second annual “Cars, Cash & Caring Sale”. The “Cars” portion of the sale featured a large run of vehicles offered to a record breaking number of dealers in attendance. The “Cash” portion of the sale featured $25,000 in Cash & Prizes that was given away after the sale. This consisted of $15,000 cash, Samsung Ultra 4K TVs, Bose Sound Systems, Yeti Coolers, Drones and much more. The “Caring” portion of the sale featured a donation of over $5000 to Shriners Hospital for Children. This donation came from money raised through 50/50 drawings and an auction contribution for every transaction made
over the previous five weeks. Shriners Hospital for Children is committed to providing the best care for children in the specialty areas of Orthopedics, Burn Care, Spinal Cord Injury and Cleft Lip and Palate, regardless of the family’s ability to pay. “It was a great day for selling cars, giving away prizes and helping a great organization like Shriners Hospital for Children. Our generous dealers always come through when given an opportunity to help.” stated Bill McCready the auctions V.P. Southeastern Auto Auction is located in Savannah, GA and holds a Dealer Only Sale every Wednesday at 10:00am and a Public Sale every Thursday at 7:00pm.
AMAC Expands into Texas and Mississippi Ace Motor Acceptance Corp. (AMAC), a capital provider for BHPH dealerships, is excited to announce their expansion into the states of Texas and Mississippi. AMAC’s BHPH in a Box program provides automotive dealers the capital to grow their BHPH business, including funding for receivables and floor-plans to expand their inventory. AMAC also provides collection expertise to assist 28 — Independent Dealer — March 2016
the dealer’s staff or to handle all of the collections for the dealer, either way the customer may still pay at the dealership. Additional benefits of the program include insurance tracking, reports package and training. Dealers wanting more information can contact AMAC at 704-882-7100 ext: 7509 or visit their website at http://www. acemotoracceptance.com www.fiada.com
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March 2016 — Independent Dealer — 29
INDUSTRY NEWS
Southeast Car Agency and NIADA Foundation Team Up to Fight Hunger
700 Credit Offers Dealer Webinar
NIADA Foundation Trustee and FIADA Member John Cousins is making a difference in his community. After applying for and receiving a grant from the Rotary Club, working to secure a donation from the NIADA Foundation, and making a contribution along with his sons Bob and Tom from Southeast Car Agency, John was able to present checks totalling $5,000 to the Bread of the Mighty Food Bank in Gainesville. Great job, John!
700Credit is offering a webinar on compliance challenges dealers face under the new Federal rules and regulations to all their preferred members. This free webinar is April 6 at 11:30 am to 12:30 pm. This Adverse Action, Red Flag and Risk-Based Pricing compliance webinar will cover: • How to manage Adverse Action obligations • Adhering to Risk Based Pricing regulation guidelines • Crafting an Identity Theft Prevention Program and solutions for Red Flag regulations Register now at https://attendee. gotowebinar.com/register/ 2874705407955420417.
Director of Bread of the Mighty Food Bank Marcia Conwell, receives checks Southeast Car Agency co-owners Tom and Bob Cousins (right) and John Cousins (left).
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2015-2016 FIADA EXECUTIVE COMMITTEE:
JIM WINTERICK, SR. President Gulfstream Motor Credit Miami, FL (305) 253-2335
LISA COMPAGNO Senior Vice President Palm Tree Auto Sales Stuart, FL (772) 288-2099
DINO MERCURIO Chairman of the Board Independent Credit, Inc. West Palm Beach, FL (561) 686-8673
BRAD JOEL CHRISTOPHER LEEDOM STEVE MARBAIS, CMD Regional Vice President Regional Vice President Regional Vice President Splish Splash Auto Sales Marbais Enterprises, Inc. AutoMaxx Princeton, FL 33032 Ocoee, FL Sarasota, FL (305) 258-1191 (407) 877-7422 (941) 309-1111 30 — Independent Dealer — March 2016
SCOTT LANIER Treasurer Credit Cars Orlando, FL 32808 (407) 295-6211
GOVINDA ROMERO Secretary Autoflex LLC Gainesville, FL (407) 468-9974
PHIL RISLEY BRANDI NOEGEL Regional Vice President Regional Vice President Noegel’s Auto Sales Cars & Credit of Jacksonville Jacksonville, FL Starke, FL (904) 616-4074 (904) 964-6461 www.fiada.com
of Tip the Month
Reduce Aged inventoRy When a car has been on your lot 30 – 60 days, there is usually a reason it hasn’t sold. Each month you should personally inspect and test drive each aged unit. In many cases reconditioning will be required to quickly sell it. Either do the needed reconditioning or wholesale the unit and replace it with a fresh unit that will sell.
WhAt’s included: Funding for Receivables
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Ace Motor Acceptance Corp. (AMAC) specializes in supplying capital to BHPH dealers. Our BHPH in a Box™ program provides capital to fund contracts and floorplan lines of credit to purchase inventory. By offering both, AMAC improves your cash flow by allowing you to pay off your floorplan when the deal is funded. We understand what it takes to grow your business. AMAC allows you to maintain your customer relationship, leading to increased repeat and referral business. Instead of selling off your portfolio or doing an expensive payment stream, AMAC has a superior program that allows you to retain strong monthly cash flow from customer payments. We approve you, not your customer. The BHPH in a Box™ program is the most complete program in the industry. To learn more call AMAC today at 704-882-7100 ext. 7509.
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March 2016 — 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
32 — Independent Dealer — March 2016
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 Salvage Sale Thurs 11 AM
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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
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