Fiada march web

MARCH 2015

www.FIADA.com www.FIADA.com

Information and Insight for Florida Used Car Dealers

FULTON, MO PERMIT NO. 38

PA I D PRST STD U.S. POSTAGE

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March 2015 — Independent Dealer — 1

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2 — Independent Dealer —March 2015

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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

Paul Matton

Senior Vice President

Dino Mercurio

Chairman of the Board

Contents March 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

8

Nominate Now for 2015 Quality Dealer of the Year We are looking for the best of the best to give the Association’s top honor to.

Steve Marbais, CMD

Regional Vice President

10

Member News

Phil Risley

Regional Vice President

12

Let’s Make History, Again!

Let the 75th Anniversary begin! FIADA invites you to save the date for the Annual Convention and Trade Show coming in October.

Brad Joel

Secretary Lisa Compagno

Treasurer Scott Lanier

Regional Vice President

Christopher Leedom

Regional Vice President

Govinda Romero

Regional Vice President

FIADA STAFF Lisette Mariner

Executive Director Terry Myers

Educational Instructor Jason Berthiaume

Education and Marketing Coordinator

Amelia Tillman

Membership Director 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 Finding Money for Your Customers

Terry Myers outlines options for dealers who will be offering financing to customers.

16

Win a Trip to Vegas You can earn a free NIADA Convention registration and a chance at a FREE trip to vegas with FIADA’s new membership recruitment contest.

18

Legislative Update FIADA Lobbyist Sandra Mortham

20

DHSMV Updates The Department updates on license renewal procedures, continuing education requirements and directions on how to place “unpaid fee” stops.

23

FIADA’s Live Webinar Series is Back!

Go to www.FIADA.com and sign up for the next Webinar series about increasing local SEO and Google Search Rankings.

24

The Rising Cost of Inventory Inventory is expensive and BHPH dealers are needing more and more of it.

How to balance the need with the cost.

26

Learning From Their Mistakes Sales Tax Fraud is a serious issue, and can catch dealers off-guard if they aren’t prepared.

30

Industry News March 2015 — Independent Dealer — 3

FROM THE PRESIDENT

It’s Not the Critic Who Counts, but the Person in the Arena

BY JIM WINTERICK, SR., FIADA PRESIDENT

I

paraphrased those words by Teddy Roosevelt for a reason. Imagine if you heard someone say, “Good news the Florida Legislature is meeting and planning on ways to improve the businesses of independent dealers here.”

You would file it under things you will probably never hear spoken or written about, unless we are dreaming. It has been my experience the words, “Hello I’m from the government and here to help you,” are jokes many of us exchange with each other when we meet other dealers. The reality is quite different from the jocular exchange amongst we who make our living in one of the most federally, state, and locally controlled businesses I can think of. At my last count, I believe we have 14 different licenses to operate in the buying, selling, and servicing of vehicles to consumers.

This, and the litigious nature of assorted groups, make an interesting conglomeration of people seeking solutions to their problems in our pockets.

In my 43 years of automotive retailing, it seems to me every year I have heard many dealers get out of this business.

They say it has become a hassle. That it is expensive and time consuming to meet all the requirements to function profitably, and it’s just no fun anymore. Many of us reminisce of the past. For me that is history. I already got paid for my prior efforts. The future is now. Will we recognize this business in the future? Will we adapt? This business changes rapidly; that is why it’s so much fun.

Nothing is the same one day to the next.

The challenges are many. How do the best independent dealers stay in the game? How do some dealers seem to always be profitable? Always seem to be happy and know what is going on with the used car industry. They seem

4 — Independent Dealer —March 2015

to be ahead of the curve. I will bet if you ask the best of the best you’ll find they are members of the FIADA. I will venture to say that if you visit their location you will see the FIADA membership sign proudly displayed. Ever wonder why this is so? Could it be they are members of the oldest, most established Independent Dealer Association in America because they want to be profitable, viable, businesses? That they are the people we should emulate, if we are serious about being a quality business person that customers want to do business with, if we are proud members of our shared profession?

Isn’t it time you were involved? Are you in this business seriously to make money or are you just hanging around complaining about the way things are? Personally, I can’t pay my bills with grievances of the way things are. Not me. I am a member of the FIADA. I stay informed, I am involved, and I care about how I make my living.

Nothing helps me stay on top of the current state of the used car business better than the association. Our Florida Association has been in the business of helping used car dealers for 75 years.

Nobody cares more for dealers than us. That is why I am a member of the Association. When you hear the words, “I’m from the FIADA and here to help you,” rest assured we are! Join us today. Together we can do something besides complain to each other about the business. Together we can change it to benefit our customers and ourselves. If you are a member, thank you. If you are not, please join us.

Jim Winterick, Sr. FIADA President www.fiada.com

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Contact Protective’s Florida representative, Chris Behrens at 866 452 7335 A “National Corporate Partner” has met stringent NIADA criteria demonstrating that it can provide valuable products and services to NIADA members. No legal partnership has been created by the granting of this status, but NIADA does receive compensation from Protective. Limited Warranty Products, Vehicle Protection Plans (VPPs) and GAP are backed by Lyndon Property Insurance Company in all states except NY. In NY, VPPs are backed by Old Republic Insurance Company, Limited Warranty Products are backed by Western General Insurance Company and GAP is not available. Credit Insurance is backed by Protective Life Insurance Company in all states except NY, where it is backed by Protective Life and Annuity Insurance Company.

www.fiada.com

March 2015 — Independent Dealer — 5

EXECUTIVE DIREC TOR’S MESSAGE

Vegas Madness

BY LISET TE MARINER, EXECUTIVE DIREC TOR

W

hile everyone else is talking about March Madness and their predictions for the NCAA championship, I’ve got Vegas Madness on the brain. The NCAA tournaments are an American tradition that sends millions of fans into a synchronized frenzy each year. It’s this chaos that gives the tournament its March Madness nickname. March Madness is the concentrated hype of 68 teams vying for college basketball’s biggest prize.

A big thank you to Paul Matton of Park Auto Mall in Pinellas Park, Fl. He’s already recruited 10 members, six in the month of February.

Vegas Madness is a synchronized frenzy of dealers recruiting dealers for a chance to win a trip to Las Vegas. The rules are simple, recruit five members to the association and receive an entry for the grand prize drawing of one round trip coach ticket to Las Vegas to attend the 2015 NIADA Convention, June 22-25, a four night stay at the host hotel, Caesar’s Palace, and a complimentary registration for the convention. For every five memberships, you receive another entry. But everyone’s a winner. When you recruit members, not only are you paying it forward by sharing your passion for the industry, you are helping to make FIADA stronger. But wait there’s more… you receive a discount code for the NIADA Convention. You’ll receive half off convention registration for every five, making your registration free if you recruit 10. That’s a $549 value.

Becoming a member is easy. Complete the membership application on page 17. Add your name in the top right corner as the sponsor. If you are a non-member, you can add yourself as the sponsor and count it as one of the five members needed for the Vegas contest. Fax your completed application to the office at 850-385-3251. You can also join online at www.

FIADA.com.

Get in the game! Many of you receiving this month’s magazine are not members of the association. Don’t be left out. Recruit yourself and four others for your chance. Hurry, the contest ends at midnight on April 30.

Dealers join for all sorts of reasons, but some of the top reasons are for legislative representation, the amazing technical assistance line, to support the industry, free continuing education, for the auction coupons and discounts on services.

Why are you a member? Why are you not a member? Share your thoughts with me at lisette@fiada.com.

Friday, May 8, 2015 • 10:00am - 2:00pm Jupiter Resort & Spa • Jupiter, FL 5 North A1A, Jupiter, Florida 33477 6 — Independent Dealer —March 2015

Save the date for the next Town Hall meeting. Find out more, or register online at www.FIADA.com www.fiada.com

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March 2015 — Independent Dealer — 7

The Best of the Best The Quality Dealer of the Year Award is FIADA’s top honor.

Nominations are now being accepted for this year’s winner.

I

n the used car industry, there are few awards that hold more respect than the Quality Dealer of the Year. In Florida, the Quality Dealer award is the top honor, and is given to a dealer who has built a career on superior customer service, strong principles, business success, community involvement and association leadership.

To ensure that the “best of the best” are chosen for this award, FIADA opens up the call for nominations to all dealers.

Nominations should be submitted to the Association by June 30. The nominees will be presented to the

Awards Committee at the July Board of Directors Meeting for the final selection.

If you are a successful dealer that conducts business in an ethical manner and gives back to your community, or you work for a dealer who embodies these values, use the application below to submit your nomination.

The Florida Quality Dealer winner will be announced at FIADA’s 2015 Convention (Oct 22-24, 2015) at the Hilton Orlando, Lake Buena FL. The FIADA Quality Dealer award recipient will then compete with other state quality dealers for

the national quality dealer award at NIADA’s Convention in 2016.

Nominations can also be submitted online at www.FIADA.com. Click on the “About” tab and then “Quality Dealer” for the online application.

2015 Quality Dealer of the Year Nomination Form I would like to nominate: Name:________________________________________ Name of Dealership:______________________________ Address:_______________________________________________________________________________________ City, State, Zip:__________________________________________________________________________________ Phone:________________________________________ Email:__________________________________________ Why this dealership is a quality dealer. (Include community involvement and dealer accomplishments) ______________________________________________________________________________________________ ______________________________________________________________________________________________ ______________________________________________________________________________________________ Nominator Information: Your Name:_____________________________________________________________________________________ Phone:________________________________________ Email:__________________________________________ 8 — Independent Dealer —March 2015

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March 2015 — Independent Dealer — 9

MEMBERSHIP NEWS

Renewing Members

New Members

20+ Year Members Auction Insurance Agency Economy Motors J.D. Sanders, Inc. Marbais Enterprises, Inc. Mears Transportation Group Roney Auto Sales Shade Tree Auto Repair

FEBRUARY 2015

ACCOUNTING AND TAX RESOURCE CENTER Weston, FL Maria Leonardo Sponsor: Amelia Tillman BLUE HEAVEN AUTO SALES INC Miami, FL Herby Joseph Sponsor: FIADA C & J AUTO COLLECTION, INC Crestview, FL Cristie Woodbury Sponsor: FIADA COMBS & COMPANY Lakeland, FL Phil Combs Sponsor: Amelia Tillman ESC SALES INC Kissimmee, FL Joselyn Cruz Sponsor: Manheim GARZA MOTORS INC. Largo, FL Jerry Garza Sponsor: Terry Myers JAB MARKETING INC. Seminole, FL James Bushert Sponsor: Paul Matton LINK’S AUTO SALES, INC. Sanford, FL Edward Link Sponsor: Scott Lanier

MICHAEL PARKER Saint Petersburg, FL Michael Parker Sponsor: Terry Myers PERFORMANCE CYCLEZ Leesburg, FL Jeff Pirrello Sponsor: FIADA PETE’S CUT RATE AUTO SALES INC. Saint Petersburg, FL Tim Peters Sponsor: Paul Matton PG ACQUISITIONS GROUP, INC. West Palm Beach, FL Jorge L. Gonzalez Sponsor: DBA Convention PRIVATE ALLSTAR CARS LLC Pinellas Park, FL Pavel Kubing Sponsor: Paul Matton RENEWIT CAR CARE Seminole, FL David Cavill Sponsor: Paul Matton UNITED AUTO LEASING & SALES Tampa, FL Michael Gutierrez Sponsor: Paul Matton WORLDWIDE MOTORSPORTS & EQUIPMENT LLC North Venice, FL Daniel Marr Sponsor: Terry Myers

Rejoining Members

FEBRUARY 2015

CARS INN, INC. DBA LUCKY CARS Pinellas Park, FL Rafael Diaz Sponsor: Paul Matton

INSURANCE AUTO AUCTIONS Jacksonville, FL Nalini Singh Sponsor: Amelia Tillman

FIRST COAST AUTO SALES Jacksonville, FL Guy Marvin Sponsor: FIADA

THE SURETY GROUP Louisville, KY Scott Reinke Sponsor: FIADA

HUAL’S BIKES TO CUSTOM TRIKES Cantonment, FL Denise Hual Sponsor: Amelia Tillman

10 — Independent Dealer —March 2015

FEBRUARY 2015 Birmingham, AL Live Oak, FL Alachua, FL Ocoee, FL Orlando, FL Plant City, FL Bartow, FL

10+ Year Members Appearance Plus Auto Sales dba C & C Cars Automotive Fleet Enterprises Big Boys Toys Florida, LLC Butler Auto Recycling Cassat Auto Sales Dixie Motors LLC Ed Tillman Auto Sales Fleet Street Remarketing Gene Gorman’s Auto Sales J.D. Byrider Millenia Motors, Inc. Northwest Florida Auto Sales Prestige Auto Sales Quincy Auto Mart, Inc. Tampa Carstore, Inc. Tax Refund Services, Inc. Tropical Auto Sales

Pinellas Park, FL Pinellas Park, FL Panama City Beach, FL Pensacola, FL Jacksonville, FL Live Oak, FL Jacksonville, FL Largo, FL Punta Gorda, FL Jacksonville, FL Longwood, FL Ft Walton Bch, FL Ocala, FL Quincy, FL Tampa, FL Tampa, FL North Palm Beach, FL

Under 10 Year Members Auto Express South Big Truck Rental LLC Bonita Auto Center Inc. Car Surplus Inc. Celebrity Auto Group EJ’s Quality Autosales Elite Autos Foreign Affairs Auto Gorilla Custom Motors, Inc. Ian’s Auto Exports Inc. dba Ebenzz Motors Instant Wheels Used Cars Insurance Auto Auction JD Byrider of Bradenton Kathy’s Kars Kicklighter Auto Sales LLC KPM Auto Exports Inc Lake Park Auto Brokers Lane Mashburn Inc. dba Amelia Auto Mart Ocala Auto Dealers Exchange Orange Sports Center, Inc. Outdoor Recreation World, Inc. Palm Tree Auto Sales Paradise Auto Brokers, Inc. PFS Financial Services of Florida Ponce Used Cars, Inc. Powerfun Inc. Rously Bercy(BMM Auto Sales Inc) Routh’s Equipco dba Gravely of Bradenton Strickland Auto Solutions Inc Sunrise Financial Associates Sunshine Used Car Sales The Garage Inc Transcor Recycling, LLC Wheel City Auto Finance Centers Zeal Motor Group Inc.

Fort Myers, FL Tampa, FL Bonita Springs, FL Mary Esther, FL Sarasota, FL Jacksonville, FL Port Orange, FL West Palm Beach, FL Boca Raton, FL West Palm Beach, FL Jacksonville, FL Orlando, FL Bradenton, FL Saint Petersburg, FL Jacksonville, FL Lake Park, FL Lake Park, FL Fernandina Beach, FL Ocala, FL Orlando, FL Panama City, FL Stuart, FL Pompano Beach, FL Tampa, FL Fort Myers, FL Tavares, FL Coral Springs, FL Bradenton, FL Chiefland, FL Orlando, FL West Palm Beach, FL Doral, FL Tampa, FL Sioux Falls, SD Maitland, FL

www.fiada.com

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March 2015 — Independent Dealer — 13

BACK TO BASICS

Finding Money for Your Customers

BY TERRY MYERS

Exploring the topic of financing and how to give customers the options they need.

W

e love to buy, but we hate to be sold! When we are ready to buy, we need money! It is no different for your customers.

Surprise, not everybody has cash!

When the customer is ready to buy and they need help with financing their purchase, will you be ready and able to help them?

Over the next few articles, we will discuss what is needed to get ready, make connections, and find qualifying and financing options available to marry the right car with the right customer for the right amount of cash.

Let’s get started. As a quick review, there are basically three ways to handle financing: • Direct financing, which is the Buy-here, Pay-here model.

• Indirect financing, where you shop the customer via third party financing companies.

14 — Independent Dealer —March 2015

•

Direct them to a financing resource, such a telling them, “Go see Ed down at ABC bank, etc.”

First things first, are you properly licensed? To finance anyone directly, indirectly, or direct them to a financing resource, the dealership needs to hold a Motor Vehicle Retail Installment Seller license. Here are some basic questions and answers about the Motor Vehicle Retail Installment Seller license: How do you get this license?

Go to http://www.flofr.com/StaticPages /MotorVehicleRetailInstallment.htm and choose Motor Vehicle Retail Installment license.

What does it cost?

It is $175.00. If you are worried about the cost, please note, I call this a license to make money! You cannot finance direct, indirect or advise where they should get financing until you have this license.

How long is it good for?

The license runs from January 1 of each ODD NUMBER year, i.e. 1/1/2015, through December 31 of each EVEN NUMBER year, i.e.

12/31/2016.

Where can I use the license?

The license is issued to your dealership in the county in which your dealership is located. If you have a dealership in a different county, you need to obtain licensing for that county, as well.

It is important to remember, if you hold an ‘Off premise/Tent sale’ in an unlicensed county and will be offering financing from that location, you need to contact the Department of Financial Services and obtain a ‘Branch Office’ license.

In my observation, there is a financing resource for every deal that makes sense. If you are properly licensed, there is no reason to turn a deal away.

You make more profit on some deals and less on others. The important element for you is the word profit.

Also, to get paid, you will need a Lien Provider Number to place onto the HSMV 82040, Application for Title and Registration. If you plan to be the finance company (Buy HerePay Here), you need your own Lien Provider number. We will address this in next month’s article. You do want to get paid, right?

Terry LB Myers is an author, lecturer, FIADA instructor and FADS owner/instructor. Terry can be reached at (727) 804-7375 or tmyers@ floridaautodealerschool.com. Feedback is appreciated and encouraged. Copyright 2015.

www.fiada.com

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March 2015 — Independent Dealer — 15

Recruit at least 5 new members before April 30, and you could win a trip to Vegas and a free registration to the 2015 NIADA Annual Convention.

March is vegas madness!

It’s Vegas, baby! FIADA wants to send you to the NIADA Annual Convention & Expo in Las Vegas. Here’s how to win:

sponsor 5 new Members

and get 1/2 off NIADA Convention Registration PLUS an entry to win the free trip

sponsor 10 new Members

and get a FREE NIADA Convention Registration PLUS 2 entries to win the free trip

the vegas grand prize: For every 5 new members you sponsor for FIADA, you’ll get an entry into a drawing for a chance to win a complete Vegas package that includes: • Airfare to Las Vegas (1 coach ticket) • Single Registration for the NIADA Convention • 4 night stay at Caesar’s Palace 16 — Independent Dealer —March 2015

Contest ends APRIL 30, 2015 For more on the Vegas contest go to www.FIADA.com! www.fiada.com

Dealer Membership Application

www.fiada.com

Sponsor

March 2015 — Independent Dealer — 17

L E G I S L AT I V E U P D AT E

Get Ready to Go

BY SANDRA MORTHAM, FIADA LOBBYIST

T

he 2015 Legislative Session began on March 3rd with the Governor giving the State of the State address. Every session there are over 2000 bills filed and this year is no exception. Thankfully, many of these bills will never be heard by any committee in the legislative process. Most business owners would prefer that less legislation is needed rather than more government bureaucracy.

The big ticket items for the legislature to address this session are solutions to Amendment One, a major new water policy that passed on the ballot, passing a budget that has an additional $1 billion to spend (tax cuts will be on the table), Medicaid Reform, testing in schools, and prison reform. These are all huge items which affect every citizen in Florida.

FIADA and your lobbyists are watching over 25 bills that deal with everything from used tires, labor regulations, tracking devices, automobile insurance requirements, towing, and many more. We

FIADA

POLITICAL ACTION COMMITTEE

will keep your Executive Director, Lisette Mariner, informed on any issues where you might need to call your legislator to give your recommendations. You will get all the talking points you need to make the contact.

It is important to stay tuned to Lisette during these 60 days in case we need your help. There is nobody better to get the attention of a legislator than one of their constituents. Dino Mercurio, your FIADA Legislative Chairman, has been a phenomenal help in making sure we have the information we need to communicate to House and Senate members.

Our goal this session is to get the penalty for curbstoning increased from $100 to $500. This will be done in the amendment process and we will be diligently looking for the right bill to tack it on. Stay tuned and be on “ready” if we need your assistance to make calls or send emails.

SUPPORT THE FIADA PAC FUND! Your PAC Contribution helps spread awareness and gain support of issues affecting independent dealers in the state’s capitol.

CONTRIBUTION INFORMATION Contributor’s Name:________________________________________________________________________________ Dealership/Company:_______________________________________________________________________________ Street Address, City, State, Zip:___________________________________________________________________________ q Check q Credit Card (one time) q Monthly Credit Card Contribution (until cancel) q $500 q $250 q $100 q $50 q $25 q ______

PAYMENT INFORMATION Credit Card Information:

q

Visa

q

MasterCard

q

American Express

q

Discover

Name on Card: Card number: Exp Date:

Sec. Code:

Billing Phone:

Billing Address 18 — Independent Dealer —March 2015

www.fiada.com

IT TO ’S RE TIM NE E W !

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2015 — Independent Dealer — 19 www.fiada.com LOW RATES • FAST RELIABLE SERVICE • FLORIDA BASED • March FAMILY OWNED & OPERATED

D H S M V U P D AT E S

It’s Renewal Time

•

Dealer License renewal reminders have been sent out to all licensed dealers in the state. Gather the right documents and get your renewal application in before April 30.

H

ere in the Sunshine State, independent auto dealers represent a significant part of our business communities. The Department of Highway Safety and Motor Vehicles reminds independent dealers, auctions, salvage dealers and wholesale dealers that now is the time to renew your dealer license.

Renewal applications, fees and required documents must be filed to ensure the timely renewal of your motor vehicle dealer’s license.

html/forms.html. The Regional Office list can be accessed at http://www. flhsmv.gov/dmv/BUR_Field_Ops_ Address.pdf and the Dealer Training Schools at http://www.flhsmv.gov/ dmv/L_Dealer_Trng_Sch.pdf.

On Feb. 13, 2015, the Department e-mailed renewal notices and applications to all 6,852 licensed independent dealers, auctions, salvage dealers and wholesale dealers.

A completed renewal application form (HSMV 86720, “Renewal Application for Motor Vehicle, Mobile Home, or Recreational Vehicle Dealers”) must be submitted to the local Regional Office responsible for your dealership. This form is available on the Department’s website at http://www.flhsmv.gov/

The following documents are required with the renewal application:

House Bill 7125 passed giving dealers the option for biennial renewal of their license. This law went into effect on July 1, 2013. The Renewal form HSMV 86720 will allow for the option of renewing for a two-year period.

Primary Location: • Completed license renewal application form HSMV 86720.

• $75 annual renewal fee for the primary location. If the completed application, all required documents, and fee are not received for the primary location by April 30th, a $100 delinquent fee is due for a total

•

•

•

•

renewal fee of $175. Checks must be made payable to DHSMV. $150 biennial license renewal fee if you are opting for a biennial (two years) renewal. Checks must be made payable to DHSMV. An original surety bond, original irrevocable letter of credit, or original continuation certificate in the amount of $25,000 for motor vehicle dealers, auction dealers and independent dealers.

The Dealership’s Principal must sign the surety bond and Irrevocable Letter of Credit.

Copy of proof of Garage Liability insurance which must include at a minimum, $25,000 combined single limit liability coverage including bodily injury and property damage protection and $10,000 personal injury protection or a general liability policy coupled with a business automobile policy which must include at a minimum, $25,000 combined single-limit liability coverage including bodily injury and property damage protection and $10,000 personal injury protection. Signature of the insurance agent is required on all insurance policies.

Please note: Salvage Dealers are exempt from Garage Liability Insurance

CONTINUING EDUCATION REQUIREMENTS FOR INDEPENDENT DEALERS

T

he Department sent a reminder notice on 2/19/2015 for Continuing Education to all the licensed Independent Motor Vehicle Dealers. The Florida Law requires independent dealers to submit the completed Continuing Education certification to the Regional Office once every 2 years.

Dealers were advised to please disregard the notice if they had already completed and submitted the continuing education certificate to the regional office.

Pursuant to section 320.27(4)(a), Florida Statutes, “…

Each independent dealer shall certify that the dealer 20 — Independent Dealer —March 2015

(owner, partner, officer, or director of the licensee, or a full-time employee of the licensee that holds a responsible management-level position) has completed 8 hours of continuing education prior to filing the renewal forms with the department. Such certification shall be filed once every 2 years. The continuing education shall include at least 2 hours of legal or legislative issues, 1 hour of department issues, and 5 hours of relevant motor vehicle industry topics…”

If your pre-licensing or continuing education is over two Continued on page 22. www.fiada.com

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 2015 — Independent Dealer — 21

D H S M V U P D AT E S

How to Place an “Unpaid Fee” Stop You have protection against unpaid registration and title fees. DHSMV shares the procedure for filing an unpaid fee stop, and the information you will need to provide.

T

he Department of Highway Safety and Motor Vehicles is charged with the responsibility of maintaining a valid registration of a motor vehicle while in consistent operation on the streets and highways of this state. Under Section 319.23(6)(a), Florida Statute, the motor vehicle dealer must apply for title and registration on behalf of the purchaser.

Part of this process in monitoring the Motor Vehicle Dealer operations is ensuring they are in compliance with Section 320.02(16), Florida Statutes, which authorizes the department to withhold a registration or re-registration of a vehicle. As a part of this process the motor vehicle dealer must either collect title and registration fees at the time of purchase of a vehicle or pay applicable fees in advance. It has become a practice by the dealers to pay the applicable fees necessary and obtain the title, registration and decal/license plate then collect the fees from their purchaser at a later date.

If the occasion arises and the purchaser doesn’t reimburse the dealership for the title, registration and decal/license plate fees the department has a process in place, which is known as the “Unpaid Fee” stop. The dealership must notify the department in writing and the department is then authorized to withhold a registration or reregistration of the vehicle until such time the purchaser does reimburse the dealership. Below are the listed items necessary for this department to place and maintain this “Unpaid Fee” stop.

Documents required for placing the “Unpaid Fee” stop against the registration: 1. The request on letterhead from the dealership with the year/make/ model and vehicle identification number.

A. The dealerships name, complete address and phone number.

B. The owner(s), name and DL number.

C. The amount owed which must match the total fees that print on the Application for Vehicle/ Vessel Certificate of Title form HSMV 82041 and the fees on the Certificate of Registration.

2. Copy of the Certificate of Registration (transfer/ renewal /original) 3. Copy of the Application for Vehicle/Vessel Certificate of Title form HSMV 82041.

4. C.O.D.(Title & Registration Fee Notice) including: A. Florida Statute (320.02,(16) B. purchaser name with the original signature of the purchaser and date C. dealership name D. fee range

CONTINUING EDUCATION REQUIREMENTS FOR INDEPENDENT DEALERS years old or almost at the end of the 2 year period, please ensure that you complete your continuing education with one of the Dealer Training Schools approved by the Department. Please submit a copy of your completed continuing education certificate to the Regional Office responsible for your dealership.

offices at the Department’s website at http://flhsmv.gov/ dmv/BUR_Field_Ops_Address.pdf.

The list of Dealer Training Schools and Regional Offices is attached for your convenience. You can access the Dealer Training School list at http://www.flhsmv.gov/dmv/l_ dealer_trng_sch.pdf. You can access the list of regional 22 — Independent Dealer —March 2015

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FIADA’s Webinar Series is Back!

FIADA Members enjoy FREE access to the live webinar series.

Go to www.FIADA.com to register for the next session.

Local SEO for Auto Dealers - How to Win the Google Rankings Race Thursday, March 26 at 10:00 AM Join FIADA and Greg Gifford of AutoRevo to learn about increasing your Google Rankings and maximizing your SEO.

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March 2015 — Independent Dealer — 23

BHPH SUCCESS

The Rising Cost of Inventory

BY DAVID ALGOOD

How do Buy Here-Pay Here dealers balance the increased costs of inventory with the need to keep more cars on the lot?

T

he Buy Here Pay Here (BHPH) business has long been a tremendous source of profit for many car dealers. In the “good ole days” the down payments would come close to covering the cost of the vehicle, leaving the dealers with very little cash in deal (CID) and financing the profit.

Throughout the years, dealers have faced significant increases in the average vehicle cost, while down payments have remained relatively flat, leaving the business model of old far behind. Currently, BHPH dealers are toting a far larger note then ever before. Down payments nearly cover the cost of the tax, tag, title and the processing fee, leaving the dealer

24 — Independent Dealer —March 2015

financing the full cost of the car, as well as the profit. This changed landscape has made it far more expensive, forcing those who wish to be a BHPH dealer to either have very deep pockets or seek financing from banks or finance companies to reach a point of positive cash flow.

This article will highlight the key differences in inventory price points, the effect on cash flow and how to pick the right partner to grow or enter the business.

According to the Subprime Analytics the average vehicle cost (including reconditioning) through August of 2014 was $6,654 up from $5,029 in 2009. In only four years the average

vehicle cost went up by $1,625, while the average down payment fell from $1,039 to $868 leaving dealers with an additional $1,796 average CID. This additional cash outlay has put a strain on many BHPH dealers making the use of an outside finance source more enticing. While outside financing allows dealers to overcome the higher cost of inventory, it doesn’t come without a price. The fact is by using outside financing, BHPH dealers lose control of nearly every aspect of the loan structure, the equity within the deal, monthly cash flow and the ability to collect from the customer. While outside finance may be tempting, a relationship with a capital provider such as a bank or finance company that specializes in BHPH, is certainly a rung above. A line of credit can be the best of both worlds, allowing the dealer to still have positive cash flow on higher priced inventory, while controlling the loan structure, keeping the customer relationship and most importantly building equity in the business.

Not only has the increased cost of inventory made the BHPH business more expensive, dealers now seem to need to keep a larger supply of inventory on hand in order to sell the same amount. As of 2009 the NCM Associates, Inc. provided BHPH dealers with a benchmark average of 72.5 days of inventory supply as dealers were turning their inventory rather quickly. The latest NABD report in 2013 had the benchmark number at an average of 94 days of inventory supply. This additional 21.5 days may not seem like much, however when combined with the increased average cost of vehicles this means dealers are carrying a vehicle that on average cost about $6,654 more for an additional 21.5 days requiring over $100,000 in additional capital. The additional cash outlay furthers the appeal of a capital provider or line of credit to purchase inventory. www.fiada.com

While most dealers realize there are numerous advantages to being in the BHPH business, most do not have sufficient capital to make it work.

While inventory cost continue to rise, a capital partner is more important than ever. A BHPH dealer will likely need between $500,000 and $5,000,000 of working capital to fund their operation, however with the correct partner, the need for selffunding can be less than $100,000. A

capital provider that understands all aspects of the BHPH business is essential in helping grow a successful operation.

David Algood is the Director of Sales and Marketing at AMAC, a rapidly growing finance company doing business in the Eastern half of the United States. Anyone wanting more information can contact AMAC at 704882-7100 (ext. 7509) or visit their website at www.acemotoracceptance.com.

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March 2015 — Independent Dealer — 25

S A L E S TA X I S S U E S

Learning From Their Mistakes When used car dealers get arrested for Sales Tax Fraud, they provide a lesson all dealers need to learn.

BY JAMES SUT TON, CPA, ESQ.

I

n July 2014, at least a dozen used car dealers were arrested on charges of sales tax fraud, according to new releases by the Florida Department of Revenue.

From the calls I have received since then, that was only the beginning.

Charges filed against those used car dealers for collected but not remitted sales tax ranged from as low as $14,000 to over $500,000.

The dealerships were located all over the state including Longwood, Hollywood, Sanford, Orlando, Miami, Winter Springs, Davie, and Largo. If convicted, the used car dealers face anywhere from five years in jail and $5,000 in fines to 30 years in jail and $10,000 in fines – on top of having to pay back the taxes, interest, and investigation fees.

Florida law requires business owners that sell, repair, rent, or provide services to act as an agent to the state and they must remit all sales tax collected to state of Florida. Car dealers are a significant source of sales tax revenue for the state of Florida and, as such, face close scrutiny from the Florida Department of Revenue. Car dealers throughout Florida are at risk because the FL DOR has records directly from the DMV as to exactly which vehicles are sold by a dealer. In fact, the FL DOR announced plans to start a statewide audit campaign on the used car dealer industry starting late summer, 2014. If you are in this industry, then please take your sales tax responsibilities very, very seriously.

Further, Florida sales tax is required to be separately stated on the customers invoice and Florida law mandates that the taxes collected be the property of the state from the moment it is collected from the customer. Therefore, despite putting these amounts in their own checking accounts, business owners must segregate sales tax collect and remit it to the state in a timely fashion.

In every news release regarding the arrest of a used car dealer, the Executive Director of the Florida Department of Revenue is quoted saying: “It is an honor to serve the vast majority of Florida businesses who comply with State tax requirements.

For those that don’t, it is our job to enforce the law and ensure honest businesses are not placed at a competitive disadvantage by those who ignore the law or worse intentionally collect and steal taxpayer dollars.”

Collecting but not remitted Florida sales tax is a crime under Florida law and must be taken extremely seriously. It is shocking to many business owners to know that the Florida Department of Revenue is dramatically more likely to arrest a business owner for tax fraud than the Internal Revenue Service (“IRS”).

The Florida Department of Revenue will charge and put the business owner in jail if the taxes and all associated penalties, interest, fines and costs are not remitted.

26 — Independent Dealer —March 2015

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trial. Therefore, it is wise to have an attorney speak on your behalf.

Mr. Sutton is a Florida licensed CPA and Attorney and a shareholder in the law firm Moffa, Gainor, & Sutton, PA. Mr. Sutton’s primary practice is Florida tax controversy, with a almost exclusive focus on Florida sales and use tax. Visit the website at www.floridasalestax.com. As always, consult your CPA for tax advice as it relates to your business.

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If you or someone you know has collected but not remitted Florida sales tax, then please contact an attorney experienced in Florida sales and use tax criminal defense for a confidential conversation to discuss his or her options. There are mechanisms in place that allow individuals or their attorney to negotiate with the state to enter into a payment plan. While the monetary sanctions can be harsh, it is better than losing one’s freedom.

Like any other crime, anything

said by you is an admission and can be used against you at a criminal

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While both the IRS and the FL DOR will put tax liens on the business property (called a “Tax Warrant” in Florida), the Florida Department of Revenue will also charge and put the business owner in jail if the taxes and all associated penalties, interest, fines, and costs are not remitted.

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March 2015 — Independent Dealer — 27

Our online application is simple and easy with a quick turnaround time.

FIADA members get special discounts. Go to DealersInsurance.com today to get started.

28 — Independent Dealer —March 2015

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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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March 2015 — Independent Dealer — 29

INDUSTRY NEWS The Writing’s On the Wall

Make Plans to Attend the NIADA Convention & Expo Ready. Set. Change. The National Independent Automobile Dealers Association is preparing for their Annual Convention and Expo at Caesar’s Palace in Las Vegas, June 22-25, 2015. The Convention will feature specialized training sessions, federal and regulatory updates, networking opportunities and more.

The prestigious Quality Dealer of the Year award will also be presented at the NIADA Convention. Find out more about the agenda and registration at niadaconvention.com.

Don’t forget, by participating in the FIADA Vegas Madness contest, you can get discounts for registration as well as a chance to win the grand prize of a free registration,

Thank you to Manheim Auctions for partnering with FIADA on a new marketing campaign “Get A Hold of Your Future.” The posters, which emphasise taking action with FIADA membership, were printed by participating auctions and displayed in highly-visible areas. Look for them next time your at the auction.

The FIADA poster is displayed in the top middle section of the display case at Manheim Ft. Myers.

Updated State Tax Rates Available Online The Florida Department of Revenue recently issued a Tax Information Publication (TIP) which includes information concerning nonreciprocal states (Arkansas, Mississippi and West Virginia) and military service members’ exemptions (North Dakota and Tennessee). You can view the information online at www.

FIADA.com or at the Department’s link at: http://dor.myflorida.com/dor/ tips/tip15a01-01r.html.

transportation to Las Vegas and a stay at the Convention’s host hotel. Turn to page 20 for more details.

FIADA Member Raises $40,000

The Cars for Kids program has been a member favorite since it began a few years ago, and hundreds of thousands of dollars have been raised to benefit the Florida Sheriffs Youth Ranches as a result. Recently, Alachua County businesses and FIADA members combined efforts and raised more than $40,000 for the charity. The business included Mears Motor Leasing, Dealer Auto Auction and Southeast Car Agency.

The Florida Sheriffs Youth Ranches are members of the FIADA, and operates three residential child-care campuses and three Youth Camps all over the state.

The businesses were recognized for their efforts in a recent issue of the Gainseville Sun newspaper.

Don’t forget to Like us on Facebook! Check out our page and follow us at www.facebook.com/FLIndAutoDealersAssoc 30 — Independent Dealer —March 2015

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32 — Independent Dealer —March 2015

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