June 2011 Independent Dealer by FIADA

SINCE 1940

June 2011

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A Publication of the Florida Independent Automobile Dealers Association

Information and Insight for Florida Used Car Dealers

The car business is an energetic, dynamic industry to be a part of, and so is the FIADA. Get involved and start having fun! JULY BOARD MEETING Page 12 2011 FIADA ANNUAL CONVENTION Page 23 TOP 10 REASONS TO BE A MEMBER Page 31

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June 2011 — Independent Dealer — 1

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FROM THE PRESIDENT

FIADA Stands For FUN! BY BRANDI NOEGEL

t is easy to feel discouraged with all the negativity surrounding our industry right now. Sales are too low, wholesale prices are too high and the profit margin where they meet in the middle is getting smaller. My best words of encouragement: don’t give up— brighter days are just around the corner. Let me also suggest that now, more than ever, is the time to belong to the Florida Independent Automobile Dealers Association and to be active in your membership. I hope you already know what the FIADA is, but just in case, here are a few quick facts. We are an organization that was formed by dealers, and continues to be led by dealers. We are not a state agency or a government office so we do not enforce rules or regulations. We do seek to educate dealers about what the laws are, update you on changes and help you find ways to stay compliant. We also speak for you in Tallahassee so that when legislators are presented with proposed laws that could affect your dealership, we are there to explain the pros and cons that can help them make an informed decision. We also have a list of member benefits that are too long to recap in this message. They range from vendor discounts and coupons to complimentary legal advice and consultation. You can see the complete list at our website (www.FIADA.com), but remember to check it often as we are always adding to it and creating new member services that bring real, tangible value to your membership. Sometimes, though, the benefits to membership are not ones that can be put on a piece of paper. Being a part of the FIADA is more than legislative protection and member benefits, it’s about belonging to a group that understands where you are coming from. When you are a FIADA member, you enter a special brotherhood, or sisterhood, that is unlike any other professional organization you might belong to. FIADA is a family. My husband, Larry, and I started attending FIADA conventions over 30 years ago. The moment we walked through the door, we felt welcomed. I can remember the

4 — Independent Dealer — June 2011

big, booming voice of Bob Galloway easing our fears of “fitting in” as he personally introduced us to member after member. We didn’t know it when we arrived, but we were about to be instantly initiated into the friendliest, most fun-loving group of people we had ever met. From then on we were faithful attendees. Sure, we came for the seminars and the education first, but we also came for the parties and receptions. We looked forward to catching up with friends in the hospitality suite and being entertained at the special events. We never missed a convention from that moment on. How could we? It would be like missing out on homemade mashed potatoes at Thanksgiving dinner or forgetting to fill the stocking on Christmas morning. The cover of this magazine is so fitting for this moment in time as both an Association, and as an industry. FIADA: Fun. Again! Most of us have chosen our profession because we love what we do. If it feels lately that you have forgotten what your inspiration was, then I have some good news; FIADA can help you rediscover it. With the July Board Meeting and Town Hall meeting coming up next month at the Ritz Carlton Palm Beach and the Annual Convention at the Gaylord Palms in Orlando in October there are two chances within the next six months to kick-back, have some fun and feel encouraged. After a long, hard season of recession and worry, I cannot think of anything that would be more energizing. You deserve a little “free time” so please take us up on the offer. If you are not a member, join now. If you have never been to a board meeting or convention, register for it today. You can find out more about the Board Meeting on page 12 and the convention on page 23. Make the effort and you will experience first-hand that FIADA stands for FUN! Sincerely, Brandi Noegel, FIADA President www.fiada.com

Contents June 2011

MAILING ADDRESS 1840 Fiddler Court Tallahassee, FL 32308 TELEPHONE (850) 385-2712 (800) 237-0448 FAX (850) 385-3251

For members of the Florida Independent Automobile Dealers Association

WEBSITE www.FIADA.com EXECUTIVE COMMITTEE Brandi Noegel President Jim Kagiliery Chairman of the Board Dino Mercurio Secretary John Cousins Treasurer Jim Kagiliery Regional Vice President

C O LU M N S & F E AT U R E S 4 6 8

FIADA STAFF Steve Jordan CEO Lisette Mariner Executive Director Terry Myers Educational Instructor Sarah Langley Administrative Director Alex Romans Education Director Christy Taylor Editorial/Advertising

12 14

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 Board Meeting and Town Hall Meeting The Certified Advantage Find out what NIADA Certified dealers are discovering; selling certified preowned vehicles is a valuable tool.

Capture the Code Auto Data Direct is making history by using a Quick Response code to provide instant access to the vehicle’s history.

An Open Opportunity FIADA’s Executive Director Steve Jordan will soon lead the National Independent Automobile Dealers Association and FIADA will welcome Lisette Mariner to the ED position.

FIADA Annual Convention Your first preview, and chance to register, for the 2011 FIADA Annual Convention and Trade Show.

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

Warning: Late Payments Can Lead to Repossession Rob Sickles, FIADA’s general counsel, answers the question of if you need a Notice of Intent to Repossess if you have accepted late payments from a customer.

George Hickey Regional Vice President

Chris Leedom Regional Vice President

Executive Director’s Message Steve Jordan

Frank Fuzy Regional Vice President

Steve Marbais, CMD Regional Vice President

President’s Message Brandi Noegel

Member Testimonial Eddie Lambert, EJ’s Auto World

FIADA. Fun. Again! Be a part of the party. Join FIADA today with this membership application.

What Happens When Carfax Gets It Wrong? Vehicle history provider Carfax has some explaining to do when it comes to the Carfax History Impact and Price Calculator.

UPCOMING EVENTS July 15-16, 2011 FIADA Board of Directors Meeting Ritz-Carlton Palm Beach Manalapan, FL

October 13-15, 2011 FIADA Annual Convention & Trade Show Gaylord Palms Resort Orlando, FL June 2011 — Independent Dealer — 5

EXECUTIVE DIREC TOR’S MESSAGE

Passing the Torch BY STE VE J ORDAN, F I ADA EXEC UTI VE DI REC TOR

lthough Mike Linn, CEO of the National Independent Automobile Dealers Association (NIADA), has been crafting his succession plan for the past year or so, it was brought to my attention back in March that he was actively looking to find the next CEO of NIADA as his retirement draws closer. At the quarterly Association Executives Committee & State President’s meeting in March at the NIADA, Mike was publicly discussing the search that was underway to find his successor and immediately something inside me sparked. I remember talking to Mike about a few business related items and began asking him how the search was going. One question led to another and Mike finally asked, “Well, gosh Steve, you’re asking a lot of questions. Does that mean you are interested in the position?” I quickly responded with, “Well, if you’re looking for a young, energetic car dealer from Florida that has successfully managed a state IADA, has national level non-profit experience, lobbying expertise and grew up in Texas with family close by, then I might just be your guy.” At that point, the spark became a flame. After some additional conversations and formalities, I was informed of my selection and asked to join the NIADA as Chief Operating Officer until Mike Linn’s retirement. At which point I will succeed him as CEO. The way this whole opportunity has evolved and how all of the selection details have come together would suggest there is a greater purpose at play. Needless to say I am honored and humbled by the opportunity to continue the journey we have started together here in Florida and excited about representing the best interests of independent automobile dealers on a national scale. In a couple of short years, we have accomplished a lot in Florida by increasing membership, righting the financial ship, passing major curb stoning laws, beating up on a few rogue politicians and by just plain having fun again. By definition an association is a group of people with a common purpose and I believe we can share a 6 — Independent Dealer — June 2011

similar cause and enjoy the relationships that go along with that at the same time. I have truly enjoyed my time working in and with Florida’s dealer community and I want to thank those who serve on the FIADA Board of Directors and Executive Committee for their commitment to the Association and industry. I consider many of them my close personal friends. Some of the sharpest, greatest men and women I’ve had the good pleasure of working with serve on the FIADA Board and our Association is better for it. Not much time lapsed between accepting the new position and finding my own successor here in Florida with a similar spark and “fire in the belly.” The transition has already begun as the ad-hoc search committee has found my successor in Lisette Mariner. Lisette comes to FIADA with an impressive list of valuable credentials and transferable association management experience with the Florida Society of Association Executives, the Florida Chamber of Commerce and the Florida Medical Association, to name a few. Her engaging personality and energetic approach to managing associations is exactly the kind of spark the FIADA needs at this time as we continue to grow membership, spread the FIADA message and keep operations tight. I have enjoyed working with Lisette as she has already proven she is the right fit. I will continue to work with her and the entire team here through June, July and beyond to ensure continuity of operations and to assist her in any way I can to ensure a stable transition. Even as I head back home to Texas and the NIADA office, my responsibilities will include working with state affiliates and their leadership teams. So even though I am passing the torch to Lisette, I will never be too far away. Whether it is here in Florida or from the national office, I will always be humbly... At your service,

Steve Jordan www.fiada.com

Minimum Wage Increases

lorida’s Minimum Wage went up six cents an hour on June 1, brining it to $7.31. The increase especially comes into play when settling up with commissioned sales staff. They have to make at least $7.31 per hour, regardless of how many cars they sell. If you are using the old number, you could get it wrong.

Keep Up-to-Date With Legal Advice

Rob Sickles Hinshaw & Culbertson, LLP Tampa, FL 800.237.0448 www.fiada.com

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any of you may already have solid legal counsel from a licensed attorney that has deep experience in representing dealers and ensuring compliance, but if you are in need of legal assistance or seeking out counsel, the FIADA can recommend licensed attorneys who specialize in the automotive industry. Call FIADA at (800) 237-0448 or go online to www. fiada.com to access the list. As a member benefit FIADA members have access to Rob Sickles, our outside general counsel, who is available for legal and technical assistance questions through our office. If you are not a member, join today and you can have access to Rob and his legal assistance as well.

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Does Florida Require Notice of Intent to Repossess When You Accept Late Payments? BY R OB S I C KL ES , F I ADA GENERA L COU N S E L

have received a substantial number of calls from dealers across Florida asking whether they are required to serve Notice of Default and Intent to Repossess on customers from whom they have accepted late payments but with whom they have run out of patience. It is my understanding that the questions were triggered by a recent article in another publication that discussed Florida as being among the states that required strict compliance with the terms of the Retail Installment Sales Contract in order to prevent a customer from claiming waiver or estoppel in situations where a bank, a dealer, or a finance company has consistently accepted late payments from a customer, but then elects to stop that practice. The short answer to the question is to send the Notice, although it may not prevent a claim of waiver or estoppel. The reasons are discussed below. The legal requirement to furnish Notice of

8 — Independent Dealer — June 2011

Default and Intent to Repossess arises out of a series of cases from the 1970’s and one case from 1936. In Ford Motor Credit Company v. Waters, 273 So. 2d 96 (Fla. 3d DC 1973), the Appellate Court cited to a 1936 Florida Supreme Court Case, Commercial Credit Co., Inc., v. Willis, 126 Fla. 444 (Fla. 1936), in order to allow a claim of wrongful repossession to proceed to a trial where the customer established a course of dealing in which the seller accepted partial payments and late payments and the creditor did not provide notice that he would no longer engage in this course of dealing and that future late payments would result in repossession of the collateral. The Ford Motor Credit Company case is important because the retail installment sales contract in question stated “wavier by seller of any default shall not be deemed a wavier of any other default.” The Appellate Court in the Ford Motor Credit Company decision found that this provision permitted the creditor to declare a default and repossess the automobile, but it did not permit the creditor to do so without notification of the change in its practice.

Dealers should make sure that some form of this language appears in their Retail Installment Sale Contracts. In 1986, Ford Motor Credit once again found itself in an Appellate Court defending its repossession of a vehicle. In Walker v. Ford Motor Credit Corp., 484 So. 2d, 61 (Fla. 1st DCA 1986), customers had filed suit against Ford Motor Credit alleging conversion, replevin, trespass and other claims arising out of the repossession of their automobile. Ford Motor Credit obtained summary judgment, meaning that judgment was entered in its favor without a trial, based on the fact that the customers had not made their payments as scheduled and the contract in question authorized the repossession of the vehicle. The Appellate Court, in what is likely a situation where bad facts resulted in bad law, found that the Trial Court was incorrect in giving Ford Motor Credit a judgment without a trial based upon Ford Motor Credit’s course of dealing with its customers. In this case, Ford continued on page 10.

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June 2011 — Independent Dealer — 9

A more practical solution is to provide your late paying customers with a letter advising the acceptance of the late payment should not be deemed a waiver nor act as an estoppel against you. Motor Credit had a 48 month Retail Installment Sale Contract with its customers. The customers had made 43 payments on the contract and 41 of those payments were accepted by Ford Motor Credit at least 1 month late. Just prior to the repossession, Ford Motor Credit complied with the earlier decision and sent the customers a Notice of Default and Intent to Repossess informing them that if they did not bring all payments current by December 23, the automobile would be repossessed. On December 22, Ford Motor Credit received a partial payment and the customers requested that they be allowed an additional week to make the remainder of the payment. Two weeks passed and the customers made a payment by check, which was dishonored by the bank. By this time, the dispute had extended into January and, on January 20, an account representative from Ford Motor Credit contacted Mr. Walker at his place of employment and informed him that Ford Motor Credit had received another dishonored check. In response, the customer stated that he would be in the following day with cash to pay the November and December installments. The customer failed to appear the following day and was called by Ford’s collectors. Once again, the customer promised to come in the following day with cash but he did not do so. Ford Motor Credit was unable to reach the customer again and on February 2, the customer’s vehicle was repossessed without further notice of default or intent to repossess. The Trial Court granted judgment 10 — Independent Dealer — June 2011

in Ford Motor Credit’s favor and concluded that by sending a Notice of Default and Intent to Repossess, Ford Motor Credit prevented the customers from reasonably relying upon any prior dealings with Ford Motor Credit regarding the acceptance of late payments. The Appellate Court rejected this finding by the trial judge and instead stated “when a creditor’s conduct of habitually accepting late payments rises to the level of waiver, then notice of intent to declare a default is ineffective to revoke such waiver and allow repossession; the creditor must pursue other remedies such as a suit on the note.” As a result, the Appellate Court sent the matter back to the Trial Court so that a jury could determine how these unresolved factual issues relating to waiver should be decided. It is important to note that the Court did not address whether the agreement in the Walker case contained the same “no waiver” provision discussed in the Waters case from 1973. Perhaps that is the reason why the Appellate Court found the Notice of Default and Intent to Repossess as insufficient. In a more recent decision, involving a mortgage foreclosure, a Florida Appellate Court found that the creditor’s acceptance of late payments did not prevent foreclosure. In Tompkins v. Jim Walter Homes, 656 So. 2d 963 (Fla. 5th DCA, 1995), the Trial Court refused to accept a customer’s defense that the creditor’s acceptance of late payments acted as an estoppel which should have prevented the creditor from foreclosing without providing actual

notice of the foreclosure. In finding that the Trial Court’s rejection of this defense was proper, the Appellate Court noted that the customer admitted that she had received phone calls about her delinquent account and that she was threatened with foreclosure during these calls. Additionally, the Appellate Court found that notice of default and acceleration could have been imputed because a certified letter was delivered to a post-office box, but was not picked up. This issue was once again discussed in LRB Holdings Corporation v. Bank of America, 944 So. 2d 1113 (Fla. 3d DCA 2007). In LRB Holdings, the Trial Court granted the creditor on a commercial loan, summary judgment in its favor. The customer appealed claiming the acceptance of late payments prevented the creditor from proceeding. The Appellate Court disagreed with the customer and affirmed the Trial Court’s decision. In reaching its decision, the Court focused on the content of the contract between the parties and expressly stated “[h]ere the note’s acceleration clause provided that upon default, the lender may declare the entire unpaid principal balance and all accrued unpaid interest immediately due without notice. The note also declared that the borrower would be in default for failure to make the payment on time.” In stark contrast to decision in the Walker v. Ford case discussed above, the Appellate Court in this case found that the creditor’s acceptance of 39 of the first 48 payments late did not act as a bar on the creditor’s right to accelerate the note without notice www.fiada.com

to the customer. If fact, the Appellate Court noted that the bank could have declared the customer in default any of the previous 39 times that it did not make its payment on time, but did not do so. The Appellate Court then ruled that “although the bank previously accepted LRB’s late payments, the note specifically provided that the lender may delay or forego enforcing its rights or remedies under the note, without losing them, and that the bank can enter a default without providing the borrower notice.” So, where do these decisions leave a Florida Dealer that has accepted late payments from a customer? First and foremost, you will only run into an issue with a customer that files an action over the repossession of a vehicle. Assuming you are faced with such a claim, you will have potential defenses; even without a Notice of Default and Intent to Repossess, provided that your retail installment sales contract indicates that you may proceed with repossession without notice despite prior late payments or the retail installment sales contract indicates that your delay in enforcing your rights is not a waiver of those rights. The LRB Holding Corporation case provides you with an argument that you are permitted to proceed in this manner. The answer to the question of whether providing Notice of Default and Intent to Repossess cures all prior dealings with the customer is also unclear. You will recall that the creditor in the Walker case complied with the Notice of Default and Intent to Repossess requirement, however, the Appellate Court found that that compliance with that obligation did not alter the prior course of dealing argument that was raised by the customers. So giving the Notice may not eliminate potential claims in all cases. The safest course of dealing when accepting late payments from customers appears to have the customer sign a document agreeing that the original terms of the RISC are not altered, that www.fiada.com

the acceptance of the late payment is a mere accommodation to the customer for the customer’s benefit and that the customer acknowledges that such conduct is not a waiver nor should it act as an estoppel against the creditor. Recognizing that this practice is likely not realistic as customers are not going to come in and sign a document with every late payment, a more practical solution is to provide your late paying customers with a letter following receipt of a late payment which advises the customer that the acceptance of the late payment should not be deemed a waiver nor act as an estoppel against you. This letter should also reiterate the next contractual due date for a payment. Such letters could be used to show any attempt by the customer to rely on a course of dealing argument is not reasonable because the creditor has advised the customer in writing at all times that acceptance of a late payment should not be construed in that fashion. While this practice may not prevent someone from getting the issue to a jury as is shown by of the cases noted above, it will provide you with some additional protection and an argument against such claims by a customer. *** Quick note on spot delivery and conditional financing language. In April, a Circuit Court Judge in the Eleventh Judicial Circuit covering Miami-Dade County, Florida entered an Order denying a dealer summary judgment and, more importantly, granting a plaintiff summary judgment in a spot delivery/conditional financing situation. In Cuello v. Bangel Motor Company, Ltd. d/b/a Maroone Honda of Miami, Case No. 02-7078CA06, the Circuit Judge ruled that the dealer’s delivery of a vehicle to a customer under a spot delivery/conditional finance situation, and the subsequent unwinding of the transaction in which the customer was given back her down payment and made completely whole, violated Chapter 520 of the Florida statutes and the Federal Truth in Lending Act. The judge expressly found that the dealership violated

Chapter 520 when it simultaneously required the customer to obligate herself under the Retail Installment Sales Contract while disavowing both its own status as a “creditor” in the RISC and the finality of the essential provisions which were disclosed to the customer. As a result, the Court concluded that the dealership’s use of documents which negated the finality of the financial disclosures made in the RISC constituted a violation of TILA and Chapter 520 of the Florida statutes. The result of this finding was an award of the amount listed in the finance charge box on the RISC to the customer as a penalty, as required under Chapter 520 and likely, an award of attorneys’ fees to the customer as 520 provides for both the penalty and attorneys’ fees. Importantly, the finance charge award is not based upon the finance charge actually paid by the customer, but rather the amount listed in the Truth in Lending Act disclosures on the RISC in the Finance Charge box is the amount awarded as the penalty. While this Decision is not binding on other Florida Courts, it is the first decision in Florida that essentially negates spot delivery or conditional financing arrangements and that punishes a dealer for the practice. Dealers using either of these practices should be aware of this decision and aware of the potential exposure relating to this decision. Dealers could face exposure simply by having conditional language in their contracts even if it is not asserted based on this Court’s ruling and reasoning because the Judge found that the dealership had violated Chapter 520 based upon the conditional nature of the transaction, not on the actual unwinding. Rob Sickles is FIADA’s outside general counsel. He is available to members for legal and technical assistance questions by calling (800) 237-0448. June 2011 — Independent Dealer — 11

All dealers invited to attend the third quarterly board meeting of 2011. The Ritz-Carlton Palm Beach 100 South Ocean Blvd Manalapan, FL 33462 Group Rate: $179/night plus tax For reservations,please call the hotel at 888-856-4273 and mention you are with the FIADA, or register online from www.FIADA.com. Just click on the link to Reserve Online to access the portal.

Featuring: • Town Hall Meeting & State Legislative Update • Legal & Regulatory Flash Points: Open Legal Forum for Dealers • Winning Big Profits by Offering Certified Pre-Owned Vehicles • Buy Here Pay Here Finance & Collections Training • Vendor & Sponsor Expo Go to www.FIADA.com to RSVP now for this seminar. 12 12— —Independent Independent Dealer Dealer — — June June2011 2011

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“DEALER” SPOKEN HERE We speak your language. Our dedicated, experienced staff provides the service you need—before, during and after the sale. Contact the Dealer Sales and Services team at your local ADESA auction or visit ADESA.com/sell.

Contact your nearest ADESA location:

ADESA Jacksonville 904-764-1004 Sale day: Thursday

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ADESA Miami 786-515-2500 Sale day: Tuesday

ADESA Ocala 352-351-5100 Sale day: Friday

ADESA Sarasota 941-756-8478 Sale day: Friday

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Dealers selling certified pre-owned vehicles with NIADA Certified are discovering

BY C HRIS T Y TAY LO R

IADA Certified was created on three principles: Give independent dealers the chance to compete with franchise counterparts. Allow dealers to offer competitive, comprehensive warranties at an affordable price that would bolster customer confidence. Bring even more value to FIADA and NIADA membership. With exciting new features and partnerships NIADA Certified has unveiled over the last few months, the program is providing all of that and even more value than ever before. For a quick recap, the NIADA Certified program is a certified preowned program offered exclusively to FIADA/NIADA members and administered by NAC. It includes 12-month, 12,000 mile warranty coverage with no deductible, 24-hour roadside assistance, towing, rental and more. Customers are immediately attracted to the term “certified pre-owned” and are willing to pay more for the status. That has been the experience of Reza Tadaiyon of Fairland MV Leasing in Pompano Beach. Tadaiyon says when he explains the value of a certified pre-owned vehicle, how it has undergone extensive mechanical scrutiny to be eligible and also comes with a far-reaching warranty, customers are always on board. “NIADA Certified is the best tool I have. I can sell with more confidence with NIADA behind it,” Tadaiyon said.

14 — Independent Dealer — June 2011

As a smaller dealer, Tadaiyon sells the majority of his inventory over the internet. He says that offering certified pre-owned vehicles has made it easier for out-of-state buyers to purchase a vehicle that is miles away and sometimes sight unseen. When creating slideshows of his inventory that he posts online, Tadaiyon overlays the NIADA Certified logo on the cover photo as well as creating the second photo to be a stand alone graphic of the logo and the 12 month/12,000 miles highlighted benefit. This way when a customer sees his car on AutoTrader, they know immediately it is certified pre-owned and can infer what that means for adding value to the listing. Recently, the NIADA Certified program announced a partnership with eBay Motors, one of the leading internet auto marketing sites available to dealers. Dealers who offer NIADA Certified vehicles can export their inventory to eBay Motors classifieds, providing a free listing to be displayed to all potential customers within a 100mile radius. The dealer does not have to have an eBay Motors account to participate, just a valid email address. In addition to the new eBay perk, there are a few more added-value partnerships that have been folded into the NIADA Certified program. OPENLANE is an online auction company for dealers to buy and sell vehicles. Through its website at Openlane.com, NIADA Certified dealers who wish to wholesale their

inventory now have access to a new “NIADA Certified” listing category, signaling buyers that the vehicle has passed the certification process and can be retailed with a comprehensive warranty. There has also been much effort put in by the NIADA Certified team to work with lenders to create funding incentives and discounts for NIADA Certified vehicles. One of the first to come on board was Ohiobased Columbus Finance, Inc. who agreed to give dealers an additional 10-percent advance (up to $1,000) and offer customers one percentage point off program rates when purchasing a NIADA Certified vehicle. As the success of this partnership builds, talks with other lenders are also being made. “As our NIADA Certified program continues to grow, so will the lender partnerships associated with it at the local, statewide and national levels,” NIADA CEO Mike Linn said. Those new partnerships just may be the extra push consumers need in a still sluggish economy with stricter funding requirements. Greg Pope of South Florida Trucks in Pompano Beach says today’s market conditions are hard for everyone, but the NIADA Certified program will be key in helping things turn around. “It is fantastic when you can give a customer a warranty of that level. It gives them a vote of confidence in what you are selling,” Pope said. Tadaiyon at Fairland affirms that www.fiada.com

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February 2011 — — Independent Independent Dealer Dealer — — 15 15 June 2011

thought. Having NIADA Certified vehicles has been a deciding factor in not only selling his cars, but building his reputation. A certified pre-owned program like NIADA Certified can help with both. “As an independent dealer you are selling your dealership first, yourself second and the car last,” Tadaiyon said. By explaining how NIADA Certified works, and the stability behind it with NAC as the administrator, customers are easily able to put their faith in all three. The other benefit to participating in NIADA Certified is the access to its trainings and marketing resources. After signing on to participate, which has no up-front cost, dealers attend an online implementation webinar hosted by the NIADA Certified team. The interactive webinar allows the team to present an overview of the program, tools, best practices and tips to dealers and their staff. The information gives

valuable, real-world advice on how to get the program started within a dealership and how to market it effectively. The next phase of support comes when dealers receive marketing materials, such as window hangers and signage that come ready-to-use with little preparation. Dealers also have ongoing communication with the NIADA Certified team to stay up-to-date with program enhancements, additional training opportunities and best practices review. Another benefit to NIADA Certified is no risk or liability for the participating dealer. “With NAC as the administrator of the NIADA Certified program, warranties are backed by an A rated insurance carrier with more than $26 billion in assets, a figure that can give dealers peace of mind,” Christina Schrank, vice president of marketing for NAC said. “There is zero dealer liability for repairs that fall under the warranty period. All dealers on the

program receive a contractual liability insurance policy issued directly from the insurance company.” The momentum behind the NIADA Certified program continues to build. NIADA Certified vehicles are showing up all across the country and the reputation and reach of the program is gaining popularity with customers. To sign up, a dealer must first be a member of the Florida Independent Automobile Dealers Association, which can easily be done by calling (800) 237-0448 or going online to www.FIADA.com. (There is also a membership application on page 32 of this magazine). More information on the NIADA Certified program can be found at www.NIADACertified.com as well as by following on Facebook, Auttr and Twitter. Dealers can also call (800) 840-2567 to speak directly with a NIADA Certified representative and begin the sign-up process.

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Are you set to comply with the new state law governing metal plate transfers? Beginning July 1, 2010 ALL automobile dealers will be required to notify the Department of HSMV via an electronic system when transferring a metal plate for a customer. TitleTec has been certified to offer this system to dealers. The Temporary Plate Transfer must be completed before the customer leaves your lot. If you are currently using TitleTec’s Metal Tag EFS System you are exempt from the metal plate transfer statute change.

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or nearly two decades, consumers have been programmed to ask for the vehicle history report when buying a used car and even if they do not understand what they are reading, they feel safer having a piece of paper that can give them a glimpse at the car’s past life. The consumer demand has made it essential to prove the pedigree of every vehicle on the lot and now a new product promises to make it even easier for the consumer to feel confident while at the same time providing potential leads to the dealer. Auto Data Direct, Inc., a Tallahassee-based technology company that provides titling, registration and other support services for dealers, has a new product that utilizes the flexibility of a Quick Response (QR) code to access vehicle history data. Named the Dealer ADD StiQR (state title information quick response), this new program allows dealers to input a VIN number into ADD’s internet-based system and output a window sticker from a desktop printer. The StiQR will include the basic facts like make and model along with a QR code customers can access from their phone to gain immediate access to the dealer’s website, descriptive details about the car and information about the car’s history pulled straight from the National Motor Vehicle Title Information System (NMVTIS). How’s that for information at your fingertips?

WHAT IS A QR CODE? As smartphones and devices become more and more popular, this gateway to a new digital world has the potential to bring customers right to your dealership. 18 — Independent Dealer — June 2011

Smartphones and devices have become somewhat of a phenomenon in the last few years. According to a research study by technology expert comScore, over 45.5 million people in the United States owned smartphones in 2010 out of 234 million total subscribers. By the end of 2011, The Neilsen Research Company predicts more smartphones will be in use than “feature” or traditional cell phones with a number somewhere around 145 million. Why are smartphones, and devices such as the iPad and other wi-fi enabled tablets so popular? They

are portable, they are cool and they offer pocket-sized access to instant information and entertainment. With a smartphone, there is no such thing as “down-time” anymore and even the five minutes you spend waiting for a deposit at the bank can be used to surf the internet or watch a television show. The apps available for mobile phones are becoming as sophisticated and advanced as the devices themselves. One of the latest crazes is the use of QR codes. Short for Quick Response code, the QR code is a twodimensional code that can be placed www.fiada.com

“Our company has grown by listening to our customers ± t he dealers ± a nd finding ways to help them better serve their customers,” said Jim Taylor, President of Auto Data Direct, Inc. “The ability for a dealer to provide this type of detailed information at the point of sale increases the consumer’s confidence in their product. The StiQR is a very effective and efficient way to get pertinent information in the hands of consumers.” For five dollars each, dealers will receive a blank sticker and two initial pulls off the NMVTIS system. Once the QR is generated, the dealer opens the final sticker using Adobe Acrobat and prints it as a normal document, meaning there is no special program or equipment to buy. “Throughout the development and testing process for this new product, we wanted to ensure that it was easy for the dealer to implement and for the consumer to use,” Taylor said. “I believe we’ve achieved both of those goals. Consumers are already accessing information at grocery anywhere (i.e., magazines, newspapers, clothing) and when scanned by the camera of a smart device will take the user to a webpage, launch an email application or connect to some other multi-media digital content for a truly interactive experience. The only requirement is to download a free barcode reader app to the device. Marketers are taking full advantage of QR popularity. Companies like Best Buy are placing them in their advertisements to link shoppers directly to the product specification and order page. Magazines and newspapers are using QR codes to drive traffic to their websites by offering additional resources or information on articles. There seems to be no limitation to the uses of the www.fiada.com

stores and other retail outlets using free QR code applications on their smartphones. When our team unveiled the StiQR at the Washington Auto Show in January, we watched children walk up to our booth and scan the code.” Customers seem more than ready to embrace this new technology. According to a study by Pew Research Center, 60% of American adults access the internet with a cell phone or other mobile device and the numbers are growing every day. The same study reports that smart phone use is growing fastest among 30 to 49-yearolds, which could be considered a prime, car-buying demographic. The live ADD StiQR has proven to have versatile uses for the dealer. For starters, sales staff can use them as an “ice breaker” to make contact with shoppers and innocently capture their information. With phone in-hand, the salesman can scan the code, share the info with the customer and offer to email them a copy for their own review. The customer walks away QR code and as they become more mainstream, they are showing up everywhere. One of the best benefits for a company using QR codes in marketing efforts can be found in the ease of making them as well as the ability to track how they are being used. There are several web-based companies that will generate QR codes for free. Some of the most popular include Google’s URL shortener (www.goo.gl), Kaywa by Datamatrix (www.qrcode.kaywa.com) and Zebra Crossing’s QR generator (www.zxing.appspot.com/generator). A simple internet search of “qr code generators” returns a long list of sites that can create a QR code with customizable features including size, file format and color.

confident in the car’s reliability and the salesman leaves with a real, working email address and other contact information. When the dealership is closed, the StiQR can also act as a “silent salesman” designed to share basic information upon the customer’s scan and again capturing email addresses if the customer chooses to send a copy of the history report to himself. Dealers have access to the scan reports and can also use the data to see which cars are being scanned and which are not, which could tell the dealer a lot about his inventory and even fine-tune what types of cars are most popular with potential buyers. The history accessed by the code is data taken straight from the NMVTIS, a U.S. Department of Justice database that contains information from 39 states currently reporting to the system. Consumers will see either green check symbols or yellow exclamation points next to brand categories like “Total Loss,” “Salvage” and “Flood,” as well as title history and insurance information. continued on page 20. Dealers who are interested in pushing the technology envelope could use QR codes to market their own businesses. Including your website’s QR code on a business card or even on your signage makes it that much easier for a customer to connect. Incorporating a QR code in your newspaper ad that links to a Google map of your business can help your customers find you easily. If you start using QR codes in marketing materials, make sure you track them. Most of the code generators can provide you with analytic information that will include how many times the code was scanned as well as the time it was scanned. All can be useful when trying to crack the code on your marketing strategy. June 2011 — Independent Dealer — 19

CAPTURE THE CODE continued from page 19. Auto Data Direct President Jim Taylor (right) gives Governor Rick Scott a preview of the SitQR product. Florida dealers are among the first to have access to this new technology that uses QR codes to link to a vehicle history.

The history is intentionally concise and visually simple to give the consumer just enough information to know they are safe to buy the car. NMVTIS reports major, critical data about the vehicle but does not include minor accidents, service history or evaluation guides. “The NMVTIS vehicle history provides data that will give the consumer piece of mind that the vehicle is safe. It will tell them if there were any Salvage records, Odometer Discrepancies or Title Brands,” Taylor said. The StiQR product is now available to dealers and can be purchased through the company’s website at www. ADD123.com. By entering the promo code FIADA when completing the sign-up, ADD will give a percentage of the sale back to the Association to be used for enhancement of current and future member benefits. FIADA

is also working with ADD to develop a member’s only sticker that will allow FIADA dealers using StiQR to include the Association’s logo on the sticker for an extra layer of customer confidence. “As an Association we are always looking for ways our dealers can

leverage technology to sell more cars and provide better customer service,” FIADA Executive Director Steve Jordan said. “This product does that by helping customers through the sales process and making them even more comfortable with the vehicle they are purchasing.”

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FIADA Executive Director Steve Jordan was recently selected to be the next CEO of the National Independent Automobile Dealers Association and his successor in Florida Lisette Mariner looks forward to carrying on the tradition of excellence.

nder the right circumstances, change can be good. In fact, when the outcome is sure to be a positive one, you might consider change as an opportunity. That is exactly how the FIADA sees the selection of Steve Jordan as the next CEO of the National Independent Automobile Dealers Association. Back in April, Jordan announced to the FIADA Board that he had accepted the position offered by the National Independent Automobile Dealers Association. Jordan will join the NIADA team as the Chief Operating Officer and will be the head of staff, public relations liaison and advisor to the NIADA state executives and he will be the “CEO-in-waiting” until current CEO Mike Linn retires. Linn has been at NIADA’s helm since 1999, and was the Executive Director of the Carolinas IADA for 12 years prior to that. It was not until now with the selection of Jordan that Linn chose to fill the COO position with a candidate who was not only capable of doing the job, but would also be the one to move into the Executive Director position when the time came. Jordan’s unique experience with both non-profit management and real-world dealership experience made him an ideal choice. “Steve was the best fit out of all the candidates,” Linn said. “He’s got the non-profit experience that is crucial to this position, but he is unique because he has also been a dealer.” “I am very excited about working with NIADA, and look forward to taking the blueprint of success that we laid out in Florida and applying that to other states,” Jordan said. “Together, we have accomplished a lot over the last few years and I’m very honored to have been a part of it.”

www.fiada.com

“Together, we have accomplished a lot over the last few years and I’m very honored to have been a part of it.” Steve Jordan, FIADA Executive Director

June 2011 — Independent Dealer — 21

Under Jordan’s supervision, the FIADA ushered in a new era of political awareness and, with help from FIADA Lobbyist John Grant, was successful in keeping the voice of the independent dealer heard in Tallahassee. As an Association, FIADA saw an increase in membership, revenue and convention attendance under Jordan’s guidance. “Steve has really set Florida on a straight course and he is leaving it in good shape,” Linn said. “Steve’s personality is very dynamic, and he really helped get the ball rolling for some of the goals we wanted to accomplish,” said Past President Jim Kagiliery. Kagiliery also chaired the search committee who interviewed dozens of well-qualified applicants. “I am confident in the replacement we have chosen, though, and am positive the momentum will continue.” Jordan’s successor is Lisette Mariner, who will leave her post as Director of Education and Events for the Florida Society of Association Executives (FSAE) to take the FIADA Executive Director position. Mariner’s resume includes management experience with groups including the Florida Chamber of Commerce and the Florida Medical Association. At FSAE, Mariner is responsible for developing seminars, planning events and securing speakers for the Association’s meetings and conventions. One of Mariner’s first priorities as Executive Director will be to spend one-on-one time with members. She

22 22 — — Independent Independent Dealer Dealer — — June June 2011 2011

looks forward to holding town hall meetings, as well as visiting dealerships to talk directly to members and get a feel for the Association. Though she hopes to travel the entire state, she is particularly excited about spending time in South Florida. As a Miami native, Mariner speaks fluent Spanish and hopes to use that skill when connecting with bi-lingual dealers. “I’m very excited about getting out there and meeting members, and asking what they need and where they need us to go. Where do they need help and what can we do to assist,” Mariner said. Her years of experience in association management give Mariner the mindset of focusing on member’s needs. A strong belief in customer service pushes her to sincerely learn from members and immerse herself into their working environments. Taking on the member’s passion, and learning from them first-hand, Mariner says, will help her become an effective translator of dealer issues to legislators in Tallahassee and state and federal regulatory agents. She will look for ways to “bridge the gap” between legislators who are unfamiliar with the business and the dealers on the front-line who will have to live with legislative decisions. From the moment she interviewed with FIADA, Mariner says she could see how family-oriented the members are. That infectious camaraderie is one of the things that was intriguing to her when accepting the position and something that makes her excited to roll up her sleeves and get to work. She

officially started on June 15, and will spend the next few months working with Jordan and the rest of the FIADA staff to ensure a smooth transition. She is confident that a change in the driver’s seat will only push the Association ahead in its race. “Steve has done such a wonderful job of setting a path for success. FIADA is growing at a fast rate and we will be able to continue the momentum,” Mariner said. One of the first chances for members to meet Mariner face-to-face will be at the upcoming Board Meeting, July 15-16 at the Ritz Carlton Palm Beach. She will also be front and center at FIADA’s Annual Convention at the Gaylord Palms in Orlando this October. As COO, Jordan will still be working closely with FIADA and offering his expertise and support, and members should be excited about having a “home-grown” guy in such a prominent, national position. In the end, a transition such as this one will benefit everyone involved. Linn suggests that hiring well-qualified, experienced professionals, like Florida and NIADA have, is a necessity “Things are evolving, just like the entire automotive industry, and they are evolving at a rapid pace. Association management is the same way,” Linn said. “All over the country, no matter if you are selling automobiles or inventing widgets, in order to be successful and meet the needs of members, you have to have the right people in place.”

www.fiada.com www.fiada.com

www.fiada.com

June 2011 — Independent Dealer — 23

Experience Old Florida at the Gaylord Palms Resort & Convention Center in Orlando, the site of FIADA’s 2011 Annual Convention and Trade Show. This year’s convention will include top-level education sessions, an energetic exhibit hall and plenty of opportunities for family fun and entertainment. Make plans now to attend the industry’s top event. Log on to www.FIADA.com/convention.cfm for more details. FIADA’s special room rate at the Gaylord Palms Resort is $144 a night, including resort fees. Hotel amenities include: wired and wireless internet connection, fitness center, complimentary in-room beverages, daily newspaper and local shuttle service. Space is limited. Reserve your room by calling (407) 586-2000. Ask for the FIADA group rate.

CHOOSE YOUR REGISTRATION PACKAGE:

Dealer Express Registration $99

For all seminars and training events. No meals.

HOTEL INFO:

Corporate Registration $249

Family Registration $349

FIADA Group Room Rate $144

and then $195 for each additional employee.

Includes dealer, spouse and kiddos.

Per night, including resort fee.

The FIADA Golf Tournament is back! Hosted at the Celebration Golf Club, the FIADA Golf Tournament will be fun for all skill levels. The best ball scramble format with shotgun start will include prizes for the winning team, closest to the pin, longest drive and a chance to win a hole-in-one grand prize!

TOURNAMENT REGISTRATION:

Transportation is provided to the golf course from the hotel. Lunch begins at 12:00 noon. Net Proceeds benefit the FIADA PAC Fund. Contributions to the FIADA PAC are voluntary and not tax deductible.

24 — Independent Dealer — June 2011

www.fiada.com

COMPANY INFORMATION

Company:__________________________________________________________________________________________ Mailing Address: ____________________________________________________________________________________ City/State/Zip: ______________________________________________________________________________________ Phone: __________________________________________ Fax: ____________________________________________ E-mail: __________________________________________

REGISTRATION INFORMATION

Website: ________________________________________

(Please Note: fees in each category will increase by $100 after September 12, 2011.)

1. DEALER EXPRESS REGISTRATION Badge Name: ___________________________________________________ Badge Name: ____________________________________________________

[ ] $99 [ ] $99

For all scheduled seminars and training events, but does not include meals.

2. CORPORATE REGISTRATION Badge Name: ___________________________________________________ Additional Attendee: ______________________________________________ Additional Attendee: ______________________________________________

[ ] $249 [ ] $195 [ ] $195

All corporate registration attendees are allowed access to all events and meal functions.

3. FAMILY REGISTRATION Badge Name: ___________________________________________________ Spouse Name: ___________________________________________________ Child Name: _____________________________________________________ Child Name: _____________________________________________________

[ [ [ [

] $349 ] Included ] Included ] Included

Family Package attendees are allowed access to all events and meal functions. CE Credits and Certificates of Completion available for active FIADA members, corporate attendees and family attendees upon request.

4. GOLF TOURNAMENT Individual Player: ________________________________________________ Foursome: ______________________________________________________

[ ] $75 [ ] $275

Individual players will be paired up with other players. Please list names of foursome players in space provided. Net Proceeds benefit the FIADA PAC Fund. Contributions to the FIADA PAC are voluntary and not tax deductible.

TOTAL REGISTRATION FEES:

PAYMENT METHOD

[ ] I have enclosed a check made payable to FIADA Credit Card Type:

[ ] Visa

[ ] Master Card

$__________

[ ] I will be using a credit card [ ] American Express

[ ] Discover

Name (as it appears on card): ____________________________________ Company:______________________________________ Credit Card Billing Address: _____________________________________________________________________________________ Credit Card Number: ________________________________________________

Exp Date: ________________________________

Authorized Signature: X __________________________________________________ CC Security Code: ____________________ CANCELLATION POLICY: Refunds may be honored with a 72-hour notice. Please submit cancellations in writing.

HOTEL ACCOMMODATIONS

Please contact Gaylord Palms Resort directly at (407) 586-2000 and mention you are part of the FIADA Annual Convention to receive the group rate. Reservations must be made by Sept. 12, 2011 to receive the FIADA group discount of $144.00 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

June 2011 — Independent Dealer — 25

$10,000 Grand Prize $5,000 Second Place $2,000 Third P lace Drawing will be held on Saturday, Oct. 15, 2011 at the 2011 FIADA Annual Convention. PLUS, $500 to the seller of the winning ticket and cash prizes for the top three ticket sellers.

Special Membership Tickets Now On Sale! Get your ticket for a chance at $10,000. Tickets are $50 each. Only 1,000 tickets will be sold. Call FIADA at (800) 237-0448 or go online to www.FIADA.com.

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26 — Independent Dealer — June 2011

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June 2011 — Independent Dealer — 27

MEMBER TESTIMONIAL

My FIADA Story: NAME: Eddie Lambert, EJ’s Auto World, Inc. LOCATION: Panama City, FL YEARS IN BUSINESS: 37 KIND OF BUSINESS: Retail sales MEMBER SINCE: 1981 ACCOMPLISHMENTS: Past FIADA Regional Vice President, Past FIADA Secretary, Bay County IADA Founder

The FIADA held a membership drive in Panama City in 1981, and Eddie Lambert found himself sitting down, learning about the Association from fellow dealer CE Thomas. Knowing it was a wise move for his business, and admiring the example of this well-known dealer, Eddie signed up and became one of only a handful of FIADA members along the North Gulf at that time. From that day forward, Eddie has always been impressed with the knowledge, resources and friendships he has received from his membership. Early on as a FIADA member, Eddie became an advocate himself for dealers in Bay County. Panama City was trying to pass an ordinance that would prevent businesses, including independent dealers, from flying flags or pennants outside of their businesses. The dealers were fighting mad over the issue, not just because they saw the flags as a way to bring attention to their dealerships, but also because it was a way to show their pride as dealers. Eddie organized the group of outspoken dealers into the Bay County Independent Auto Dealers Association, and with support from FIADA, led the group to a victory against City Hall, granting them freedom to fly their flags again. Soon after, Eddie received an invitation to serve on the FIADA Board of Directors and he was happy to accept. He traveled to Board Meetings, Annual Conventions, Membership Drives and more over the past several years to learn about his industry and from his peers. He remembers visiting dealerships in an attempt to recruit members and being welcomed with open arms to spend some time and witness life “behind the scenes.” He says he learned a lot from that experience and was able to implement things in his own dealership that he saw working well for others around the state. In the same way, Eddie says he would attend the quarterly Board Meetings with much anticipation to hear the “money saving/making ideas” that would be presented by fellow dealers. He would take those priceless nuggets home and often see immediate financial results. EJ’s Auto Sales is a family business with Eddie, his wife and his son (EJ). By being members of the FIADA they have always had the peace of mind that even though they are small in size, they are just as educated and prepared about issues facing the industry as their larger counterparts. PAID ADVERTISING

Want to tell your FIADA Story? Email us at info@fiada.com 28— —Independent IndependentDealer Dealer— —June June2011 2011 28

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June 2011 — Independent Dealer — 29

30 — Independent Dealer — June 2011

www.fiada.com

Top Reasons Why You Should Belong to FIADA Auction Buy/Sell Fee Discounts • FIADA’s relationship with auctions provides you with over $1,175 in discounts on auction buy / sell fees. That’s $1,175 in immediate cash flow savings. • In addition, you will receive over $6,000 in discounts on advertising, software, education, forms, shipping, office supplies and more.

Help Your Business Win

• As a member, you’re part of an association that’s 70 years old. So, even if you’re just starting out, you don’t have to look like it. You will have access to the FIADA logo for use on your print and electronic communications. You will also receive the FIADA Code of Ethics Certificate and a FIADA Member Decal to display in your store location.

• Pick up new ideas and network with other dealers and industry service providers at our annual convention and quarterly board meetings. • Need to contact another dealer in another part of the state or across the country? With FIADA’s online member directory you can contact dealers across the state for assistance. Have a customer that moved across the country? Through our affiliation with NIADA, FIADA is a part of a nationwide network of independent dealers that can assist you with finding your customers and your cars. • FIADA Members receive the DMV required online continuing education course for free. Simply login with your Member ID and password to access the complimentary course. • By donating to the Political Action Committee you can directly support candidates and elected officials in state offices who have a positive relationship with the automobile industry.

Industry Compliance Made Simple

• Keep abreast of the latest rules and regulations affecting Florida’s Independent Dealer. FIADA

publishes Independent Dealer magazine to keep you up-to-date. Also as late breaking changes occur, FIADA will keep you updated via email blasts.

• Stay compliant with new federal regulations. FIADA provides the tools and resources necessary for dealers to comply with the Red Flags Rule and Safeguards Rule. • FIADA members also have access to information regarding other compliance issues such as sales tax, titles and registrations. • Have questions about the automobile industry? As an FIADA member, help is always just a phone call away. FIADA members have unlimited access to our in-house expertise to give assistance to common problems that can be cumbersome and technical.

Annual Dues: $300 www.FIADA.com/Join-FIADA.cfm (800) 237-0448

www.fiada.com

June 2011 — Independent Dealer — 31

Independent Dealer Magazine

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E D I T O R I A L F E AT U R E

Independent Dealer first ran this article in April 2011, and since then has received positive feedback from members. We are reprinting it here, for the benefit of this issue’s statewide audience.

hanks to a nationwide television campaign targeted at car buyers, consumers are now being conditioned to say, “Just show me the CARFAX” when they walk onto your lot. Consumers are also being told to believe ± in the same commercials ± that only reputable dealers will offer a CARFAX vehicle history report when asked. Are customers to believe that quality dealers who offer viable vehicle history report alternatives like the Experian AutoCheck or a report from the National Motor Vehicle Title Information System (NMVTIS) are not reputable? The Board of Directors of the Florida Independent Automobile Dealers Association (FIADA) answers that 34 — Independent Dealer — June 2011

question with a resounding, “No! Consumers are not to believe that.” One FIADA board member says that his dealership is now using other vehicle history reports and only giving a CARFAX as a last resort when pressed by the customer. In part, this decision was made because of how dealers are portrayed in their TV ads, but also because the information isn’t always accurate. This board member asks, “What happens when a customer comes to the lot and is given a CARFAX with erroneous or conflicting vehicle history data? CARFAX isn’t the one selling the car or answering the questions face-to-face. It’s my reputation on the line at that point, not CARFAX’s.” So what happens when

a reputable dealer is cajoled into giving out CARFAX vehicle history data that isn’t reputable? They seek other solutions. In one particular example, this dealer was selling a 2009 Mercedes-Benz SL550 with one owner, 16,760 miles and seven service records that showed two complete sets of new tires. In reality, only one tire had been replaced each time due to small road hazard reasons. Without calling the previous owner for clarifying the erroneous information, a customer could believe there was something wrong with the suspension or alignment. Examples like this are springing up all over and it makes selling cars with a CARFAX harder. www.fiada.com

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June 2011 — Independent Dealer — 35

[

]

So now dealers and consumers are to believe that CARFAX is now in the business of pricing cars they have never seen or inspected, based on potentially flawed or unconfirmed data?

FIADA Executive Director Steve Jordan has been fielding calls from dealers around the state who are losing patience with the CARFAX position in the marketplace. He said, “FIADA dealers are committed to excellence, integrity and a strict Code of Ethics and are growing more concerned with how they are being portrayed by CARFAX in the media. It would be like Coca-Cola launching TV ads saying that Coke products are only served in restaurants with clean kitchens. Restaurant owners would be furious. They would have customers coming in asking if they served Coke and if not, they’d leave. I’m sure there would be onslaughts of complaints from café owners that serve Pepsi that also have clean kitchens and good food. It’s ridiculous, and our dealers are taking note.” In a recent article in the Used Car News, Jeffrey Bellant gives an account of a spirited debate that took place at the recent International Automotive Remarketers Alliance conference in Las Vegas where CARFAX was put on the hot-seat. Participants in a breakout session voiced concerns over CARFAX’s usage of phrases like “possible frame damage” or “possible odometer rollback.” Many participants said the word “possible” should be avoided since the problem either exists or it doesn’t. Gerry Bayer, vice president of data for CARFAX, Inc. said he’ll take the feedback from the meeting and

36 — Independent Dealer — June 2011

“seriously consider” suggestions about matters…like possible odometer roll-backs. “We are there to give you information to help you make better decisions,” Bayer said, “and to help you sell cars faster.” Feedback the FIADA is getting from its dealers would suggest otherwise. However, Bayer also said the company is ultimately creating the product for consumers. Here we go. CARFAX is now positioning itself as the ultimate consumer advocate? This idea further frustrates dealers who are not only facing erroneous or misleading vehicle history data, but are now having to contend with the CARFAX Price Calculator. In April 2010, CARFAX introduced a new feature to their vehicle history report called the CARFAX Price Calculator and the CARFAX History Impact. According to their press release, the History Impact works “by analyzing market pricing and millions of used car transactions” to suggest an adjusted retail book value “based on the information in the CARFAX vehicle history reports.” It is common knowledge that the CARFAX vehicle history reports do not always contain accurate or empirical data. So now dealers and consumers are to believe that CARFAX is now in the business of pricing cars they have never seen or

inspected, based on potentially flawed or unconfirmed data? There now seems to be as many questions about why CARFAX is in the vehicle pricing game as to how their formula works to determine the adjusted retail book value of a car their company has never seen. CARFAX receives data from more than 34,000 different sources, including motor vehicle agencies in the U.S. and Canada, auto auctions, service facilities, insurance companies and more. CARFAX is dependent upon the accuracy of the data supplied to them by these agencies and sources, and for them to draw conclusions based on these multiple data streams, the entire system would have to work seamlessly and without error. “How the CARFAX formula works to determine an adjusted book value is a complete mystery,” Jordan says. “According to dealers we are talking to, CARFAX either can’t or won’t disclose how their algorithm works. If they could effectively manage these data sources accurately that would be one thing, but why they are pricing cars in the first place is an even bigger mystery.” One example of how CARFAX is managing data through the History Impact formula came to us from an FIADA member and Florida dealer. This dealer sent in a CARFAX vehicle history report that showed a 2006 Ford F-150 Crew Cab pickup registered as a personal vehicle with one owner, no accident damage and a Title History guaranteed “No Problem” on actual mileage or brands. The last reported odometer reading was 815,293 miles with estimated miles driven per year of 197,860. There are seven vehicle service entries and no issues noted under Additional History.

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June 2011 — Independent Dealer — 37

According to CARFAX the net affect of the vehicle history report for this ’06 F-150 is an adjusted retail book value of +$240. No kidding. If a consumer is to believe CARFAX is their advocate, then they are also to believe they should pay an additional $240 above retail book for a truck with 815,293 miles. With incidents like this the CARFAX History Impact is frustrating dealers and consumers alike and many are asking, “How is that consumer protection?” One could say this is an isolated mistake and it’s just an error. But isn’t that the point? If the data used in this formula is not inherently accurate or the formula somehow doesn’t consider excessive mileage of 815,000 miles plus, then how can you suggest a price for a car at all, especially when you’ve never seen it or inspected it? Under Florida Statute 501.976, the section of state law that defines unfair and deceptive trade practices for Florida’s motor vehicle dealers, a motor vehicle dealer would not be permitted to: represent previous usage or status of a vehicle unless the dealer had correct information regarding the history of the vehicle; represent the quality of care, regularity of servicing, or general condition of a vehicle, unless known to be true and supportable by material fact; or represent orally or in writing that a vehicle has not sustained structural or substantial skin damage unless the statement was made in good faith and the vehicle has been inspected by the dealer or his or her agent to make sure the vehicle has incurred such damage. So, how is it right that CARFAX can make material representations about the condition of a vehicle, suggest an adjusted retail book value without ever having inspected the vehicle and not be subject to the same unfair and deceptive trade practices applied to 38 — Independent Dealer — June 2011

into the Price Calculator and they are not going to back down from it now.”

the dealer that is selling the car? The FIADA Board of Directors and a growing group of Florida’s dealers argue it is not right. For a dealer to make the same representation as CARFAX on any car without having inspected it and confirmed the condition would be a violation of the State’s unfair and deceptive trade practices and this may need to be a focus of our legislative agenda moving forward with the FIADA legislative committee. Additionally and more to the point, this is not an isolated incident. Over recent weeks, the FIADA has been sent dozens and dozens of real-time CARFAX vehicle history reports that show multiple and conflicting data and dealers are asking for answers. One dealer who did not want to be named was told by his local CARFAX representative that, “CARFAX has invested too much time and money

Repeated attempts to contact CARFAX in response to the questions raised in this article have gone unanswered at the time of this printing. So what can we do? The dissemination of information and knowledge within any association provides power. Knowledge is power. But the real power comes from an organized and systematic call to action to express our concerns as reputable dealers committed to excellence who have been cornered into using vehicle history reports that contain unconfirmed data and having to lower prices simply because CARFAX says so. If you are fired up about this issue, and want to help, here are a few things you can do:

THE CALL TO ACTION

Express your concerns with CARFAX business practices by doing the following three things:

Contact CARFAX directly and tell them you do not like the way they are portraying car dealers in their national TV and media campaigns. Ask them to stop this and run different commercials.

Dick Raines, President (703) 934-2664

Larry Gamache, Communications Director (703) 934-2664, ext. 4108

Contact CARFAX and ask them to remove the CARFAX Pricing Calculator and the History Impact Sections from their vehicle history report. It is our position that CARFAX does not need to engage in sight unseen price adjustments.

Gerry Bayer, VP of Data (703) 934-2664 ext. 4452

Dave Sutton, Nat’l Director of Data Acquisition (703) 934-2664 ext. 4250

Contact the CARFAX Dealer Hotline to resolve any problems that you have with vehicle history report data accuracy or any questions you may have. Call the CARFAX customer service line at (888) 695-1885.

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June 2011 — Independent Dealer — 39

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