SINCE 1940
July 2012
www.FIADA.com
A Publication of the Florida Independent Automobile Dealers Association
Information and Insight for Florida Used Car Dealers
Election season is upon us. FIADA breaks it down on page 20. FULTON, MO PERMIT NO. 38
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July 2012 — Independent Dealer — 1
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Dealer Independent
MAILING ADDRESS TELEPHONE FAX WEBSITE EXECUTIVE COMMITTEE
1840 Fiddler Court Tallahassee, FL 32308 (850) 385-2712 (800) 237-0448 (850) 385-3251 www.FIADA.com Brandi Noegel President Christopher Leedom Senior Vice President Jim Kagiliery Chairman of the Board Dino Mercurio Secretary John Cousins Treasurer David Cox, CMD Regional Vice President Frank Fuzy Regional Vice President George Hickey Regional Vice President Steve Marbais, CMD Regional Vice President Paul Matton Regional Vice President
FIADA STAFF
Lisette Mariner Executive Director Terry Myers Educational Instructor Sarah Langley Administrative Director Alex Romans Education Director Leah Nash Membership Coordinator Christy Taylor Editorial/Advertising
Contents July 2012
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 Brandi Noegel
6
Executive Director’s Message Lisette Mariner
8
What’s In It For You? Leah Nash
10
Membership News New, Renewing and Rejoining Members
12
Always Collect Florida Sales Tax Unless... FIADA Instructor Terry Myers explains the exceptions that can be made when collecting Florida sales tax on a deal.
14
The Value of Membership Wayne Andrews of Used Car Supermarket is part of a long-lasting, multigenerational dealership that understands the importance of FIADA membership.
18
Title and Registration Training Take advantage of this new course being offered by the FIADA.
20
Legislative Update FIADA Legislative Advocates Hon. John Grand and Jennifer Lux
24
Are Tax Savings Hidden in Your Building? Accountant Jorge Martinez helps you find helpful tax advantages within your property.
26
FIADA 2012 Annual Convention & Expo Preview! Make your plans to attend the main event, coming in October.
30
Industry News Update on the Implementation of Net Selling Price; June Closes with Strong Sales
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.
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July 2012 — Independent Dealer — 3
FROM THE PRESIDENT
A Golden Opportunity BY BRANDI NOEGEL, FIADA PRESIDENT
T
he Olympic Games are coming up at the end of this month in London. How exciting it is, when every four years the entire world comes together to cheer on the best athletes their country has to offer. It is very interesting how even in the midst of ongoing wars and occupations, the Olympics always seems to evoke a sense of peace and helps us to look for what’s good in other people. If only we could be like that all the time and not just during the Olympics. In its own way, the FIADA seems to foster that global sense of community among the independent dealers it serves. All of us have our individual businesses, and every day we are competing with each other for that market share that seems to be getting smaller and smaller all the time. In an ordinary setting, you may not like the guy across the street yet, when you become an FIADA member, and the other dealer does too, somehow we all get along. I would even say we more than get along, we actually like each other and often times become friends. Just like at the Olympics, we cheer each other’s success, offer advice on how to do better and become that training partner that pushes us to do better than we ever have before. I recently had the opportunity to cheer on my fellow dealers when we all attended the NIADA Annual Convention in Las Sitting at the FIADA table during Vegas. Aside from the NIADA convention with Jim all the educational Winterick and Gina Fuzy. opportunities (which were many), there was time to interact with one another and learn. In fact, the motto for the event was
4 — Independent Dealer — July 2012
“Breakout, Connect, Experience.” The NIADA did an excellent job of creating an environment to do that with other members from around the country. Talk about networking! One of the things that was most exciting was cheering on the FIADA’s nominee for the National Quality Dealer of the Year award. Michelle Graudins of Economy Motors in Live Oak did us proud, presenting herself as the smart, focused business-woman we admire and respect. Thank you Michelle, for being a prime example of what is right with the industry and for being a trailblazer for other females who are interested in being successful used car dealers. Another one of our members going for the gold is the Southeast Car Agency in Gainesville, led by the well-respected Cousins family: John, Bob and Tom. The Cousins jumped on board with our Association’s philanthropy project “Cars For Kids” and hosted the first official car donation at their dealership in June to benefit the Florida Sheriffs Youth Ranch. I am excited about soon hosting my own Cars For Kids event as are Chris Leedom, Jim Kagillery and Frank Fuzy. If you would like information about hosting an event at your dealership, call the FIADA office at (800) 237-0448. Until next time, good selling! Carol (Brandi) Noegel FIADA President www.fiada.com
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July 2012 — Independent Dealer — 5
EXECUTIVE DIREC TOR’S MESSAGE
Be a Driving Force BY LISET TE MARINER, EXECUTIVE DIREC TOR
C
an you believe that the elections are just around the corner? Well from a politician’s standpoint it is and the fundraising is going on full force. The FIADA-PAC has made several contributions to key races around the state. Whether you are voting for president of the FIADA or president of the United States, be an active participant. Your voice matters. With the primaries just around the corner it’s time for you to get involved. Florida’s primary election is August 14. A few of the seats around the state will be determined at the primary. Now is your time to let your voice be heard.
As local elections heat up, you have several opportunities to be involved. • You can contribute the FIADA PAC • Put a sign up at your dealership and/or home • Display campaign materials at your dealership • Volunteer your time by walking in designated neighborhoods distributing campaign material or hold up signs on Election Day for your favorite candidate Whatever your mode of participation, just get involved. You can make a difference.
Last month, I was able to participate in the 2012 NIADA convention. It was an amazing experience. FIADA was represented well with several members of the board attending and being a part of the process. Frank Fuzy of Century Motors in Pompano Beach was elected as the NIADA Treasurer. Jim Kagiliery of JD Byrider was appointed as Chairman of the NIADA State President’s Council. We had a great group of Florida members, including the FIADA President, Treasurer, Board members and our Quality Dealer Michelle Graudins, of Economy Motors in Live Oak. Chris Martin of Fayetteville, NC was installed as the next NIADA President. Chris is scheduled to attend the FIADA convention in October. I would encourage you to get to know Chris during the dinner Saturday night, October 13. The elections for FIADA board positions will be held at 9:00 am on Friday, October 12 in Camino Hall at the Boca Resort & Spa during the FIADA Annual Convention. Visit www.fiada.com to register to attend convention. If you would like to be more involved in FIADA please contact the FIADA at 800-237-0448 or via email at Lisette@fiada.com. See you soon!
Snapshots from the 2012 NIADA Convention...
yers, (L to R): Terry M and George Hickey is Steve Marba
6 — Independent Dealer — July 2012
Terry Myers wins the Crystal Eagle Award.
(L to R): Brandi Noegel, FIA DA Quality Dealer Michelle Graudins and Lis ette Mariner
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YOUR AUCTION PASCO
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AUCTION 10 YOURPASCO 3141 US HIGHWAY 19 HOLIDAY, FL 34691 1-855-255-4111 4:00PM START TIME 300+ GREAT UNITS
YOUR AUCTION TAMPA BAY
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AUCTION 17 YOURPASCO 3141 US HIGHWAY 19 HOLIDAY, FL 34691 1-855-255-4111 4:00PM START TIME 300+ GREAT UNITS
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AUCTION 24 YOURPASCO 25
YOUR AUCTION TAMPA BAY
3141 US HIGHWAY 19 HOLIDAY, FL 34691 1-855-255-4111 4:00PM START TIME 300+ GREAT UNITS
3010 SCHERER DR. ST. PETE, FL 33716 1-800-675-4444 3:00PM START TIME 800+ UNITS
YOUR AUCTION FT MYERS
SCANLON LEXUS ACURA SUTHERLIN NISSAN
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AUCTION 31 YOURPASCO 3141 US HIGHWAY 19 HOLIDAY, FL 34691 1-855-255-4111 4:00PM START TIME 300+ GREAT UNITS
YOUR AUCTION FT MYERS
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July 2012 — Independent Dealer — 7
BY LEAH NASH, MEMBERSHIP COORDINATOR
We Are Here For You!
I
n my last article, I talked a lot about the FIADA family and the networking opportunities available to you as a member. I wanted to take a moment now to introduce you to the FIADA staff. FIADA staff offers technical assistance to you as a member benefit. Whenever you have a question about the automotive industry, just call 800.237.0448 to reach the friendly FIADA staff at the office, which is located in Tallahassee. Feel free to stop by; our address is 1840 Fiddler Court, Tallahasee, FL 32308.
Meet The Team. Lisette Mariner is the Executive Director of FIADA and our fearless leader. She has a background in association management and is one of the hardest working people that I know. I think that she may be connected to her computer, even when she is sleeping! Lisette is always available for members and answers inquiries promptly. She is constantly thinking about how to improve processes for members and how to implement new ideas that will make things easier for our members. You can reach Lisette at lisette@fiada.com. Sarah Langley, Administrative Director, pretty much knows everything about FIADA. She has been with FIADA for five years now and knows all of the ins and outs of the industry. Sarah is also a digital whiz and manages the FIADA website, as well as our brand new database system. Sarah can answer almost any question or point you in the
right direction. You can reach Sarah via email at sarah@ fiada.com. Alex Romans is FIADA’s Education Coordinator. Along with Sarah, Alex is also available for technical assistance. Alex works with our instructor Terry Myers to be sure the continuing education that you need, as well as other informational education courses. To reach Alex, email her at alex@fiada.com. And then there’s me, Leah Nash. I’m FIADA’s Membership Coordinator and I travel around the state to meet with dealers about becoming a member or seeing how FIADA can help you. Please feel free to email me when you have questions about membership. My email address is leah@fiada.com. If you haven’t met the FIADA staff yet, please plan on attending the Annual Convention, which will be held on October 11th – 14th, Boca Raton Resort & Club. The entire FIADA staff will be there, as well as the FIADA Board of Directors, other members and FIADA partners. The Annual Convention is a wonderful opportunity to put names with faces, network and learn more about your industry! Please visit fiada.com for more information or to register. Don’t forget, if you register for the Annual Convention before August 31st, you will receive $100 off family and corporate registrations and $50 off dealer express registrations.
Visit FIADA.com and click on “Join FIADA” to become a member or renew your membership, or scan this code with your mobile device. If you do so after reading this article, type Leah Nash in the Sponsor Name section of the online application. You may also contact Leah Nash at leah@fiada.com to join or if you need membership recruitment assistance. If you would like to receive FIADA Facebook updates, please like the FIADA page at facebook.com/FLIndAutoDealersAssoc. 8 — Independent Dealer — July 2012
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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. Lifetime Engine Warranty, Limited Warranty, Vehicle Service Contracts (VSCs) and GAP are backed by Lyndon Property Insurance Company in all states except NY. In NY, VSCs are backed by Old Republic Insurance Company. GAP, Lifetime Engine Warranty and Limited Warranty are not available in NY. 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.
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July April2012 2012— —Independent IndependentDealer Dealer— —99
MEMBERSHIP NEWS
New Members
JUNE 2012
747 AUTO SALES & LEASING Plantation, FL Lawrence Austin Sponsor: Dealer Track
MAINLAND AUTO SALES, INC. Holly Hill, FL John Matias Sponsor: FIADA
ABSOLUTE SURETY, LLC Orlando, FL Blair Ashton Sponsor: FIADA
MECHANICAL BREAKDOWN PROTECTION, INC. Lees Summit, MO Ed Koehler Sponsor: FIADA
BRENNAN AUTO GROUP Plantation, FL Bill Brennan Sponsor: FIADA DAVID ROMMEL Punta Gorda, FL Sponsor: Kevin Scott DAVID BALDWIN Coconut Creek, FL Sponsor: Kevin Scott GODBY ENTERPRISES DBA UNIVERSAL AUTO SALES OF PLANT CITY Plant City, FL William Godby Sponsor: FIADA HOT ROD HANKS DETAIL & CUSTOMS, INC. Umatilla, FL Henry Bogan, Jr. Sponsor: Terry Myers
MJC CLASSIC CARS, LLC Lakeland, FL Michael Calhoon Sponsor: Kevin Scott PROFESSIONAL AUTOMOTIVE SERVICES, LLC Largo, FL Scott Chambers Sponsor: Kevin Scott THE AUTO TOY STORE Fort Lauderdale, FL Steven Dworkin Sponsor: FIADA TRIPLE B MOTORS, INC. Orlando, FL Jose Rosario, Sr. Sponsor: Terry Myers WHOLESALE AUTO NETWORK Jacksonville, FL Jason Coatney Sponsor: FIADA
Rejoining Members ABCOA/DEAL BACK SOFTWARE Jacksonville, FL Evie Hedy AUBREY’S AUTO SALES Delray Beach, FL Tracy Aubrey AUTO LEASE GROUP Pompano Beach, FL Sheryl Spencer CARBUCKS Greenville, SC Jeff Miles CARSFORSALE.COM Tea, SD Aaron Oestreich
JUNE 2012
Renewing Members 30+ Year Members Langston Motors
JUNE 2012 Eustis, FL
20+ Year Members Century Motors of S. Fla., Inc. Manheim Tampa Maxx Motors Mike Hill Used Cars, Inc. Mike Kashtan’s Superior A/S Motorcar Gallery, Inc. Park Motors, Inc. Southeast Car Agency, Inc.
Pompano, FL Tampa, FL Princeton, FL Panama City, FL Pinellas Park, FL Ft. Lauderdale, FL Jacksonville, FL Gainesville, FL
10+ Year Members Benz Financial Services, Inc. Gallagher Promotional Products GTS Auto Sales J & J Auto Sales Warren’s Auto Sales William H. Fenton Co., Inc. World Imports, USA, Inc.
North Miami, FL Longwood, FL Ft. Lauderdale, FL Ft. Pierce, FL Avon Park, FL Westfield, MA Jacksonville, FL
Under 10 Year Members America Choice RV American Recovery Association Chicago Motors, Inc. Dennis LeVine & Associates, PA Direct Auto Exchange, LLC G & D Auto Sales Corporation Hinshaw & Culbertson, LLP JK Motorsports Millennium Motors PCT Enterprises of FL, LLC Reliable Rides, Inc. Scotti’s Auto Repair & Sales Sensible Auto Lending Value First Auto Sales, LLC Woodall Auto Wholesale, Inc. Yukon USA, Inc.
Windermere, FL Irving, TX Miami, FL Tampa, FL Tallahassee, FL Tampa, FL Tampa, FL Riverview, FL Winter Park, FL Englewood, FL Plantation, FL Sarasota, FL Old Saybrook, CT St. Petersburg, FL Ocoee, FL Winter Park, FL
CHECKERED FLAG AUTO SALES Lakeland, FL Steven Dorer OCEAN AUTO SALES OF MIAMI, INC. Miami, FL Adenis Gomez REDMOND-TREMMEL INVESTMENTS, LLC Destin, FL Sonny Redmond TITLE TECHNOLOGIES, INC. Dallas, TX Trey Pittman
10 — Independent Dealer — July 2012
FIADA.com is your dashboard to member benefits. Go online to get the latest news, resources and reference materials, upcoming events and connected with fellow members.
www.fiada.com
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July 2012 — Independent Dealer — 11
Always Collect Florida Sales Tax
UNLESS... There are some exemptions to collecting sales tax on a vehicle sold in Florida, specifically when it comes to exporting out-of-state. BY TERRY MYERS
A
ll out-of-Florida sales are taxable unless the vehicle is committed to the export process. The information that follows was provided, in part by the Department of Revenue in response to questions on this very topic: Rule 12A-1.0015(2)(b), FAC, in part says, “When a dealer sells tangible personal property, commits the property to the exportation process at the time of the sale, and the exportation process remains continuous and unbroken until the property is exported from Florida, the dealer is not required to collect the tax.” Examples of commitment include: 1. The dealer is required by the terms of the sale contract to deliver the property outside Florida using the dealer’s own mode of transportation. Florida Administrative Code 12A-1.007 (7)(b), covers this situation with a suggested Affidavit that the dealer may want to copy. Delivery requires notarization of both parties by a Notary of the state where delivery takes place. Some states may require the delivering dealer to collect and remit sales tax to them. Wow. To find out more contact the Florida Department of Revenue, or its counterpart, in other the states. Taxing authorities and rates can be found at www.taxadmin.org 12 — Independent Dealer — July 2012
(click on State Comparisons, then Sales Tax Rates). Be certain to confer with legal counsel since this action may also require licensure in that state. 2. The dealer is required by the terms of the sale contract to deliver the property to a carrier, licensed customs broker, or forwarding agent for final and certain movement of the property to a destination outside Florida. The carrier, customs broker or forwarding agents must be actual businesses. 3. Regardless of how the actual sale transaction is conducted, if the dealer delivers the vehicle to a freight forwarder or other type of shipping agent for further shipment outside of the state, Florida sales tax does not apply. It is immaterial whether the shipping company was hired by the seller or the buyer in this instance. The same exemption applies whether the motor vehicle is being shipped to another state or another country. A DR-123, Affidavit for Partial Exemption of Motor Vehicles Sold for Licensing in Another State, is not applicable in any of these instances as the transactions are exempt from Florida sales tax. A receipt from the shipping/ freight forwarder to substantiate that the motor vehicle was accepted for further transport out-of-state is sufficient to establish this exemption.
Florida sales tax only applies if the selling dealer delivers the vehicle within Florida to someone who is not in the business of transporting goods. The DR-123 form is only applicable in those situations where the customer or his representative (who is not a shipper or freight forwarder) accepts delivery of the motor vehicle within the state and the buyer is a resident of another state. Sales tax is applied at that state’s sales tax rate (as low as 0% but never more than 6%, or any % in between). Residents of another country pay the full 6% and the DR-123 is not applicable. Florida county tax only applies to Florida registered vehicles. The Department of Revenue site contains a wealth of information. You can access the Ask a Question Form online at https://askdor.state.fl.us/FAQ/ FAQSearch.aspxif you need more specific clarification. www.myflorida.com/dor/ forms is where you will find GT-400400, which is the Department’s training manual for motor vehicle dealers. Just because we don’t like a requirement, it does not mean we can ignore or change it. Please take advantage of the existing resources before you initiate an action. The Florida Department of Revenue has many valuable resources available to us. If we have difficulty finding what we need we can visit a local office and/or go the FAQs section and ask for a specific written answer to our questions. The DOR, your attorney and the FIADA are an unbeatable combination. Remember, “What you know makes you money. What you don’t know costs you a fortune.” Terry Myers is an instructor for the FIADA Dealer Training School and owner of Florida Auto Dealer School. www.fiada.com
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July 2012 — Independent Dealer — 13
DEALER PROFILE
The Value of Membership Used Car Supermarket’s Wayne Andrews opens up about the value of a good reputation and of membership in FIADA. BY CHRIST Y TAYLOR
A
lot can be learned from a dealership that has been in business for 38 years, just ask Wayne Andrews of the Used Car Supermarket in Tallahassee. His father, Fred, built the original Used Car Supermarket with a business partner, Gary Donaldson, in 1974 making it one of the first independent dealerships in Tallahassee. Since then, the dealership has remained focused on one thing; building and maintaining a superior reputation. In the early days of the dealership the inventory was mostly inexpensive automobiles and tractors, mostly paid for in cash. There was a time when they also sold Wells Cargo trailers and held an Ugly Duckling rental franchise, also. In 1987, the dealership moved to its current location at 3120 W. Tennessee Street in Tallahassee with three acres of property, four service bays, three lifts and three large offices. In the early 1990s, Gary Donaldson was killed in an auto accident coming home from the auto auction. Fred Andrews, the Supermarket’s patriarch, tried to manage on his own but poor health made it difficult to take on the details of the day-to-day duties a thriving independent dealership requires. Wayne had experience with
14 — Independent Dealer — July 2012
Wayne Andrews (L) with his dad, “Friendly Fred.” Used Car Supermarket has spent nearly four decades striving to create a family atmosphere for its customers.
both used car sales and mechanical skills and stepped in to help in 1993. “We were doing a lot of buy-here, pay-here business at the time,” Wayne explained. “Also, at this time a lot of secondary and subprime lenders popped up and we slowly transitioned to sell more financeable units while still selling a few buy-here, pay-here units.” In 1997, Wayne’s brother Robert came on as a salesperson and soon after Finance Manager. The business was really growing, thanks to the booking market conditions. Used Car Supermarket had a staff of six sales associates, a sales manager, and three service personnel in addition to Robert and Wayne. With an average of 70 units kept in the monthly inventory, the team was
“rocking and rolling” to record sales, hitting its highest point in August 2001 when they sold 62 vehicles. There was no stopping the momentum, until everything came to a halt during the aftermath of the 9-11 disaster. “Since that time we have never reached 50 units sold, much less 62. During this long recession our numbers have slowly dwindled. We now sell 30-35 vehicles each month have two sales associates, two service personnel, a finance manager and a GSM,” Wayne said. The Great Recession has taken its toll on many used car dealers and forced everyone into survival mode. The inventory pool following Cash for Clunkers has made good vehicles scarce and as consumers are keeping their cars longer, sales have been spread thin. www.fiada.com
The Used Car Supermarket searches to find the best cars available, brings them back for a full inspection in their ASE Certified service department and then offers them for sale with a 90-day powertrain warranty. Most of their deals are done through local credit unions, offering customers’ rates as low as 1.99%, but they do offer secondary financing and some buy-here, pay-here options. “We recondition our vehicles to make them be all that they can be, spending an average of about $600 per unit. We try to have something for everyone in inventory,” Wayne said. “We don’t claim to be the cheapest, just the best value and the best bang for your buck.”
Wayne says being able to do the right thing by understanding the laws and rules surrounding used car sales is possible thanks to his FIADA membership. Joining FIADA was a “nobrainer” when he considered all of the member benefits and knowledge it provides.
the feeling that they are part of the family. Wayne says building the trust of their customers and maintaining the high-standard of an impeccable reputation is what it is all about. “You can ask any of our competition and they will tell you what kind of people we are,” Wayne said. “We are
“Being an FIADA dealer is very important to us,” Wayne said. “FIADA is always working for us in so many ways whether it’s sharing information, offering up new ideas, keeping us abreast of new things on the horizon that we may not have access to otherwise; I can go on and on. And heck, FIADA is the best value on earth. You get all the auction discounts and Continuing Education and that adds up to a lot more than your dues.”
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extremely honest and always do the right thing no matter the situation. We bring our family values to work with us every day.”
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July 2012 — Independent Dealer — 15
16 — Independent Dealer — March 2012
www.fiada.com
What is acceptable proof of ownership in Florida, other states and/or countries? Processing title paperwork correctly translates into faster processing by the tax collector’s office, helping dealers complete deals quickly and efficiently. In FIADA’s new Title & Registration Training seminar students will use a manual, examples and case studies to help clarify ownership transfer starting with the MCO, ‘new’ title through the ‘used’ title. Training is hands on and students will get the opportunity to complete their own sample title paperwork. Special $79 rate for FIADA members if you register now. Upcoming Seminars: Orlando, July 27 │ Tallahassee, August 24 │ Fort Lauderdale, September 10 Jacksonville, October 2 │Tampa, November 5 │ Orlando, December 21
When is notarization acceptable/required? When and how does a lien get added/removed? Where do I find proof of present and past ownership, odometer readings and brands?
To register, call (800) 237-0448 or go to www.FIADA.com
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18 — Independent Dealer —July 2012
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L E G I S L AT I V E U P D AT E
Qualifying is Over, The Races are Set BY HONORABLE JOHN GRANT and JENNIFER LUX, FIADA LEGISLATIVE ADVOCATES
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fter months of wrangling, negotiation, legislative sessions, more special sessions and justice department review, there is no more speculation about who will run for what and where in Florida’s congressional and legislative races. Qualifying closed on June 8. Interparty contests will square off in the primaries on August 14 and the general election will be in November. With the primaries coming a week earlier than usual and mixed with all the hype of the Republican National Convention in Florida, a lower than usual voter turnout is projected. There is only one statewide race, for incumbent Senator Bill Nelson where there is no Democratic primary and scant interest in the Republican one. There are pockets in the state where there are hotly contested local races that will bring people to the polls, but for the most part, a voter turnout of less than 20% is projected. That means that your vote will count more than ever. But the primaries are just the warm-up to “Florida Elections 2012.” Our state will be a focal point in the general election. First, we have an “in play” race for the U.S. Senate, one that could determine which party controls the Senate in 2013 and beyond. It will be a close race between incumbent Senator Bill Nelson and whoever wins the Republican primary (likely Connie Mack). Millions of dollars will pour into the state from all over to fund the Senate battle. But the granddaddy of all races in all states will be the contest for Florida’s prized 29 electoral votes for President of the United States. Florida’s electoral votes represent 11 percent of the total and since a party needs only half plus one to win, The Sunshine State represents 22 percent or nearly a quarter needed to win.
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With other states definitely in one column or another before the race begins, there are only a small number of states left “in play” and the two biggest are Florida and Ohio. It is safe to say that no party can win the White House without wining Florida, so before all the advertising is over you will think you sold a car to both President Obama and Governor Romney! For some time now since the GOP nominee, Governor Romney, has secured enough convention votes to win the nomination, all reputable polls put the contest in Florida within the statistical margin of error and it will probably continue to be that way right up until election day. It will be a tight and close race with America’s future held in the balance. Florida has gone Republican in all but three presidential elections since 1952, but one of those was the last election in 2008 when the state went for Obama. The electoral college is state by state, winner take all, unless by legislation a state votes to apportion electoral votes by congressional districts. Two states have done that. In 1994, the Florida House of Representatives passed such a bill and Governor Chiles said that if the Florida Senate passed it, he would sign it. I was in the senate at the time and we debated the bill long and hard. It failed by one vote. If it had passed, Al Gore would have been elected President in 2000. I can tell my grandchildren that my one vote elected George W. Bush President! Florida is a different state than it was when the last reapportionment was done and the new districts reflect those demographic changes. You can expect greater Hispanic representation in the legislature and while the Republicans will remain in control, there are still more Continued on Page 22. www.fiada.com
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July 2012 — Independent Dealer — 21
LEGISLATIVE UPDATE continued from Page 20.
Democrats registered and the new reapportionment provides for more theoretically Democratic access seats, so the ratio after election is expected to be slightly more in favor of the Democrats with the Republicans still in clear control. In the newly passed Florida House districts that will be in effect from 2012 to 2022, Obama won 54 seats in the 2008 election. Obama ran between 48% and 50% of the two party vote in fifteen additional districts, bringing the potential attainable Democratic number to 69 House seats. Thus, you can expect the Demo-
Nearly one in four voters in Florida is registered as something other than a Democrat or a Republican, or not affiliated with any party at all, according to state Division of Elections records. Headed into the August Republican primary, the percentage of voters in Florida who identify themselves with the GOP is at one of the lowest points since 1994. Despite claiming roughly 4.1 million registered voters at the moment, the Republican Party of Florida still represents just 36.2 percent of the electorate.
As your FIADA legislative advocates, we have been The best time and way to get legislators attending fundraisers, to vote for and with us is to support and handing out vote for them when they are running for checks from election and re-election. your PAC and making friends with candidates running crats to be more competitive in the for open seats and informing them of November election. FIADA issues we will be asking them to support once elected. But Democrats, unlike the GOP, suffer from significant drop-off down ballot. The best time and way to get legislaIn the 2000 election Al Gore carried tors to vote for and with us is to sup17 Florida State House districts that port and vote for them when they are were won that very same day by Rerunning for election or re-election. publicans. Conversely, the Democrats During our time representing the won just five seats carried that same FIADA we have made a lot of friends day by George W. Bush. The swing on our issues and they will continue between Gore and Bush districts was to look to us for guidance on automoGOP plus 12 and they left that elective and transportation issues after tion cycle with a 77-43 majority in the the election and during the upcoming House. sessions of the legislature. And then there is another factor. As you read this, we are about a Partisanship is out and independence month away from the primary and is in. Not many years ago in excess of we have posted a list of candidates the 90% of all voters identified themselves FIADA is supporting and endorsing. with one of the two major parties. We encourage you to identify those in But in 2012, the overall percentage your dealership area, donate to them, of voters identifying with the Demoget involved in their campaigns, discratic and Republican parties in the play their signs on your locations and state as a whole has ebbed to its lowest invite them to visit your dealership. point at any time in recent memory. 22 — Independent Dealer — July 2012
ELECTORAL COLLEGE 101 The Electoral College is one of those things we hear a lot about at every election, but do you understand how it works? What exactly is the Electoral College? The Electoral College is made up of 538 people from all 50 states and Washington, D.C., called electors. According to the Constitution, they are responsible for electing the President and Vice President. The winning candidate needs a majority (270) of the 538 electoral votes. How many electoral votes does each state get? The same number as its delegation in Congress: however many seats it has in the House of Representatives (which is based on population) and the Senate (always 2). In 2012, Florida has 29 electors, an increase of 2 votes. The state’s population increased by 2,818,932 or 17.6 percent to 18,801,310 in 2010. How does a candidate win? Each state’s electoral votes are awarded on a winner-take-all basis (except in Maine and Nebraska). The candidate with the most popular votes in a state gets all of that state’s electoral votes. It is possible to win the national popular vote, but not the electoral vote, for example, when George W. Bush won the election against Al Gore in 2000. To understand how it works, think about the election not as a single contest, but as 51 separate elections. One candidate must win enough of those 51 contests to accumulate 270 electoral votes. www.fiada.com
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July 2012 — Independent Dealer — 23
Are Tax Savings Hidden In Your Building? Look to your property as not just an investment but also a tax deduction. BY JORGE MARTINEZ, CPA
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ost dealers think of their business real property as a long term investment that will appreciate over time and give them a healthy return for their retirement. Although that is usually true, the underlying and mostly hidden value of real property lies in being able to leverage the depreciation on that property as a tax deduction giving the owner free cash flow. How can depreciation generate free cash flow? We will explore that very item in this article.
or personal property for depreciation purposes. In 2004 the Internal Revenue Service issued a “Cost Segregation (Cost Seg) Audit Technique Guide,” which defined the way Cost Seg studies are to be performed.
The depreciation of property whether real (building) or personal (equipment) allows us to take a current deduction on tax returns and therefore reducing taxable income. The problem with depreciating business real property is that your building is depreciable over 39 years, even though most of the permanent or temporary attachments on the building can be depreciated over shorter time frames. Here lies the potential tax savings that can be found by applying Cost Seg techniques.
Now that we have some history behind us, let’s examine a few examples of what we are discussing. Cost Seg allows us to look at your business real property and identify and reclassify personal property currently included in real property assets. Some examples are non structural elements of your building such as flooring products, electrical, air handling systems, security, network wiring, doors and ceiling tiles just to name a few. You can also segregate exterior land improvements such as landscaping, paving and signage. There are also indirect construction costs that can be included in the segregated cost pool.
In 1962 Congress enacted the Investment Tax Credit (ITC) to encourage businesses to invest in modernization of industrial facilities. The ITC was repealed in 1986, but the U.S. Tax Court ruled that the testes developed under the ITC still apply to determine if an asset should be treated as real
Segregating out the non-structural elements, exterior land improvements and the indirect construction costs allows the reallocation of assets from the 39 year depreciation pool to the 5, 7, 10 and/or 15 year depreciation pool. For example, if you purchased a building for $2,000,000, excluding the
24 — Independent Dealer — July 2012
land, you would take a depreciation deduction of $51,282 per year. However, if parts of that building could be segregated out to the lower lived assets, say $500,000 to the 10 year property life, your deduction would be $88,462 or an increase of $37,180. This increased depreciation would mean a tax savings of $13,013 per year for ten years at the maximum tax rate of 35 percent. A further advantage of Cost Seg is the ability to claim deductions that should have been taken in prior years in the current year by using the rules under Internal Revenue Code Section 481(a) which we will call the catchup depreciation rules. Using the previous example, if the building was purchased five years earlier, we can take a current deduction of $185,900 ($37,180 x 5 years) in addition to the extra $37,180 for the following five years. The catch-up depreciation rule allows us to recapture an additional tax savings in year one of $65,065 ($185,900 x 35%). In order to take advantage of the tax savings allowed by the law, a Cost Seg study must be performed. A Cost www.fiada.com
As you can see, the benefits of Cost Seg studies can be substantial for
those that qualify. These studies are being used by more and more businesses in order to accelerate their tax deductions, therefore allowing greater tax refunds or reduced tax liability in current years. Although the Cost Seg study is quite complex to perform, it can be done with minimal interrup-
tion to your business and significant tax benefits in relation to the cost of preparing the study. Contact your CPA to determine if a Cost Seg study would be beneficial to your business, or call my office at (407) 834-0777 for a no cost evaluation to determine if a study is beneficial to your business.
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Seg study requires several steps to be strictly adhered to in order to be compliant with the Internal Revenue Service audit guidelines. Some of the important guidelines to be adhered to are: preparation by individuals with expertise and experience, detailed description of the methodology used in the study, legal analysis of the allocations done, determination of unit costs and engineering analysis, identification and listing of Section 1245 property, and proper end user reporting. The last steps in the Cost Seg study is preparing the change of accounting method forms (Form 3115), analysis of the alternative minimum tax implications, bonus depreciation, short year analysis, like kind exchange and county reporting requirements, and the 481(a) catch-up depreciation calculation.
www.fiada.com
July 2012 — Independent Dealer — 25
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Contact us for a FREE QUOTE:
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DEALER EXPRESS REGISTRATION For all seminars and training events. No meals.
$9900
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CORPORATE REGISTRATION Add additional employees for $195 each.
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HOTEL ACCOMMODATIONS: BOCA RESORT & BEACH CLUB
$24900
F A M I L Y REGISTRATION
EARLY-BIRD P R I C I N G
Includes access to meals and events for dealer, spouse and kiddos.
Rates valid through Aug. 31, 2012. Go online and use Promo Codes:
$34900
EARLYBIRDEXPRESS
www.fiada.com
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EARLYBIRDFULL
for Family and Corporate Registrations for Dealer Express Registration
ROOM RATE: $169/PER NIGHT RESERVATION LINE: 8 8 8 - 5 5 7 - 6 3 7 5 MENTION FIADA TO RECEIVE GROUP DISCOUNT. July 2012 — Independent Dealer — 27
CONVENTION PREVIEW
s: ONE, tCOME h g i l h g i H Featured COME ALL, The fun never stops at FIADA’s 2012 Annual Convention. Here are some must-see events and activities.
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Friday night is Family Fun Night with special carnival games and circus entertainment.
FRIDAY, OCTOBER 12, 2012
A TRIBUTE TO
SIR ELTON JOHN
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and rock out to H music celebrating H the pop icon.
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Español
H Now you have the H option to attend a
seminar en Español! Look for this symbol H on the schedule. H
FIADA 2012
(TENTATIVE SCHEDULE)
9:30am - 10:45am Keynote Address: Pam Bondi, Florida Attorney General (invited)
2:30pm - 3:30pm OPTION 1 OPTION 2
11:00am - 12:00pm Education Sessions:
Education Sessions: Leveraging Online Auctions Building Your Business for Free— There’s an App for That
3:45pm - 5:00pm
Education Sessions:
OPTION 2 Improve F&I
OPTION 1
FTC – Advertising
OPTION 3 What Finance Companies are Looking for Español From Independent Dealers
OPTION 2
Doing Business in Spanish with English Forms
OPTION 1 Protect Your Business from Fraud
1:15pm - 2:15pm
Education Session: DMV Update, Panel Discussion
SATURDAY, OCTOBER 13, 2012
Español
6:00pm - 9:00pm
(TENTATIVE SCHEDULE) 1:45pm - 3:00pm
9:00am - 10:15am Buy Here, Pay Here Topics
Family Fun Night in the Exhibit Hall Carnival games, Entertainment, Silent Auction
Education Sessions:
OPTION 1
Branding Your Dealership for Success
OPTION 1 5 Easy Steps to Boosting your Online Presence
OPTION 2
Best Practices for Success in Managing Online Inventory
OPTION 2 Latest Legal Battles, It Could Happen to You
3:15pm - 4:30pm
Closing Keynote Address: D.J. Harrington, the Car-Diologist
OPTION 3 Latest Legal Battles, It Could Español Happen to You
6:30pm - 9:30pm
Awards Gala Dinner Entertainment: A Tribute to Sir Elton John
10:30am - 11:45am Education Sessions:
SUNDAY, OCTOBER 14, 2012 10:00am
(TENTATIVE SCHEDULE)
Immerse Yourself in Water & Fun! Enjoy the beautiful half-mile stretch of private beach. Delight in the limitless ways your family can enjoy the water, sand and sea. First 50 participants at the Boca Raton Boat Shuttle receive complimentary beach bag, towel and sunscreen, courtesy of Century Motors.
REGISTER ONLINE NOW AT FIADA.COM! 28 — Independent Dealer — July 2012
www.fiada.com
CONVENTION REGISTRATION REGISTER ONLINE NOW AT WWW.FIADA.COM OR CALL 800.237.0448 COMPANY INFORMATION Company: ____________________________________________________________________________________________________ Mailing Address: _______________________________________________________________________________________________ City/State/Zip: ________________________________________________________________________________________________ Phone: __________________________________________________
Fax: ______________________________________________
E-mail: __________________________________________________
Website:___________________________________________
EARLY BIRD DISCOUNT
REGISTRATION INFORMATION 1. DEALER EXPRESS REGISTRATION
Through 8/31/12
Badge Name: _______________________________________________________________
[ ] $149
[ ] $99
Badge Name: _______________________________________________________________
[ ] $149
[ ] $99
Badge Name: _______________________________________________________________
[ ] $349
[ ] $249
Additional Attendee: __________________________________________________________ Additional Attendee: __________________________________________________________
[ ] $195 [ ] $195
[ ] $195 [ ] $195
Badge Name: _______________________________________________________________
[ ] $449
[ ] $349
Spouse Name: _______________________________________________________________
[ ] Included
[ ] Included
Child Name: ________________________________________________________________
[ ] Included
[ ] Included
Child Name: ________________________________________________________________
[ ] Included
[ ] Included
For all scheduled seminars and training events, but does not include meals.
2. CORPORATE REGISTRATION
All corporate registration attendees are allowed access to all events and meal functions.
3. FAMILY REGISTRATION
Family Package attendees are allowed access to all events and meal functions.
TOTAL REGISTRATION FEES:
$
PAYMENT METHOD [ ] I have enclosed a check made payable to FIADA Credit Card Type:
[ ] Visa
[ ] I will be using a credit card
[ ] Master Card
[ ] American Express
[ ] Discover
Name (as it appears on card): ______________________________________ Company: _____________________________________ Credit Card Billing Address: _______________________________________________________________________________________ Credit Card Number: ____________________________________________
Exp Date:______________________________________
Authorized Signature: _______________________________________________________________
CC Security Code:____________
CANCELLATION POLICY: If cancellations are received in writing before 5pm on Monday, September 10, 2012, we will refund your registration fee. If cancellation is received between September 11th - September 30th, we will refund your registration fee less a $50 processing fee. Fees cannot be refunded for registrations cancelled after October 1st, or for no-shows. PHOTO/VIDEO RELEASE: By registering for the 2012 FIADA Annual Convention, I hereby grant permission to use any and all photographic imagery and video footage taken of me at this event and activities pertaining to this event, without payment or any other consideration. I understand that such materials may be published electronically or in print, or used in presentations or exhibitions.
HOTEL ACCOMMODATIONS
Please contact the Boca Raton Resort & Club, A Waldorf Astoria Resort directly at 561.447.3386 and mention you are part of the FIADA Annual Convention to receive the group rate. Reservations must be made by September 10, 2012 to receive the FIADA group discount of $169 per night, plus tax. This reduced group rate will not be guaranteed after this date. Reservations will be accepted upon a space available basis.
MAIL/FAX REGISTRATION TO: FIADA, 1840 Fiddler Court, Tallahassee, FL 32308 FAX 850.385.3251 www.fiada.com
July 2012 — Independent Dealer — 29
INDUSTRY NEWS Update on the Implementation of Net Selling Price Recently, the Department issued a Dealer Advisory BIO/12-05, subject “Update Regarding Implementation of Net Selling Price.” To clarify this advisory; the Electronic Filing System (EFS) was modified to delay the mandatory entry of the net selling price. However, the FRVIS system was not and as of July 1, 2012, was rejecting transactions without this information. On July 3, 2012, the FRVIS system was modified to allow additional time before mandating the entry of the net sales price. This information can continue to be entered and dealers and tag agents are encouraged to begin entering this information if they have it available. However, mandatory entry of the net sales price will be delayed and required for any transactions with an acquired date of August 1, 2012 or later. Dealer Advisory from the Division of Motorist Services, Bureau of Issuance Oversight
NMVTIS Vehicle History Reports in Spanish Auto Data Direct now offers Spanish translations of NMVTIS Vehicle History Reports. To see a sample, scan this code or go to http:// www.add123.com/ sample-bilingualreport Got news? Send it to us for consideration at info@FIADA.com 30 — Independent Dealer — July 2012
Edmunds.com: June Closes Strong to Keep 2012 Auto Sales at Solid Strength June auto sales continued at a healthy pace for an estimated Seasonally Adjusted Annual Rate (SAAR) of 13.9 million light vehicles, according to Edmunds.com. “While 13.9 SAAR is not as impressive as the performance in the first quarter of this year, this month’s results are still strong, considering that deferred demand following last year’s earthquake has virtually dried up,” says Edmunds. com Senior analyst Jessica Caldwell. “But the healthiest sign for the industry is the pure volume of sales. June is expected to be the third highest-selling month since May 2008.” Edmunds.com estimates that 1,270,901 new cars were sold in June. The projected sales would be a 4.7 percent decrease from May 2012, but a 20.7 percent increase (unadjusted for number of selling days) from June 2011. Edmunds.com estimates that retail SAAR will come in at 11.3 million vehicles in June, with fleet transactions accounting for 19.0 percent of total sales. An estimated 2.98 million used cars were sold in June, for a SAAR of 37.0m (compared to 3.15 million -- or a SAAR of 36.1 million -- used car sales in May). SALES VOLUME FORECAST, BY MANUFACTURER Sales Volume GM Ford Toyota Chrysler Honda Nissan Industry
June-12* 233,987 201,980 184,512 143,521 126,610 88,113 1,270,901
* Forceast of June 2012 numbers
June-11 215,335 193,421 110,937 120,394 83,892 71,941 1,052,772
May-12 245,256 215,699 202,973 150,041 133,997 91,794 1,334,131
Change from June-11** 8.7% 4.4% 66.3% 19.2% 50.9% 22.5% 20.7%
** June 2012 had 27 selling days; June 2011 had 26
Charleston Auto Auction Managers Become IARA Certified Automotive Remarketers (C.A.R.) Charleston Auto Auction recently announced two more of its management staff have become IARA Certified Automotive Remarketers (C.A.R.). Joining the graduates of this program are General Manager Laura Taylor McCready Taylor and Assistant General Manager Bill McCready. This certification is conducted by the International Automotive Remarketers Alliance (IARA). To become certified, the candidate must complete a comprehensive twenty (20) course curriculum encompassing all aspects of the remarketing industry. Charleston Auto Auction now has three (3) Certified Automotive Remarketers including Chris Wise, National Remarketing Manager, who was the first in the country to receive this recognition. www.fiada.com
2011-2012 FIADA EXECUTIVE COMMITTEE:
BRANDI NOEGEL President Noegel’s Auto Sales Starke, FL (904) 964-6461
CHRISTOPHER LEEDOM Senior Vice President AutoMaxx Sarasota, FL (941) 309-1111
DAVID COX, CMD Regional Vice President Cox Motors, L.L.C. Lakeland, FL (863) 686-9300
FRANK FUZY Regional Vice President Century Motors of S. FL Pompano Beach, FL (954) 785-0369
JIM KAGILIERY Chairman of the Board J.D. Byrider Jacksonville, FL (904) 400-6190
DINO MERCURIO Secretary Independent Credit, Inc. West Palm Beach, FL (561) 686-8673
JOHN COUSINS Treasurer Southeast Car Agency Gainesville, FL (352) 377-7787
STEVE MARBAIS GEORGE HICKEY Regional Vice President Regional Vice President Marbais Enterprises, Inc. Bond Auto Sales Ocoee, FL Tampa, FL (407) 877-7422 (813) 238-7478
PAUL MATTON Regional Vice President Park Auto Mall Pinellas Park, FL (727) 639-1112
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