OCTOBER 2017
www.FIADA.com
Information and Insight for Florida Used Car Dealers
October has been designated as Cybersecurity Awareness month by the Department of Homeland Security. Follow these steps to reduce your risk. Page 17.
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October 2017 — Independent Dealer — 1
Protect. Promote. Preserve. SINCE 1940
Florida Independent Automobile Dealers Association
“
Why Join FIADA? representation A lobbyist and legislative committee that fights for you and the industry’s interests.
EDUCATION FREE continuing education and free unlimited technical assistance calls with FIADA legal counsel.
The number of benefits you receive as a member pays for the price of your membership. For $325 you can’t afford not to be a member.
It costs less than $1.00 per day to get connected.
dedication Access 100+ vendors who specialize in auto industry needs and over 800 dealers Statewide who handle issues like yours.
”
savings
Lisa Compagno,
FIADA member discounts at over 15 auctions in Florida, Georgia and Charleston. A savings of over $2,000.
FIADA President Palm Tree Auto Sales, Stuart, FL
discounts Exclusive savings on advertising opportunities, DMS, financing, floorplanning, GPS and other dealer services. Licensed dealers receive complimentary membership and additional benefits with NIADA.
DUES: $325 Annually
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2 — Independent Dealer —October 2017 800.237.0448 | Fax: 850-385-3251 | Email: info@fiada.com | www.FIADA.com | Florida Independent Automobile Dealers Association, 1840 Fiddler Court,www.fiada.com Tallahassee, FL 32308
Dealer Independent
MAILING ADDRESS 1840 Fiddler Court Tallahassee, FL 32308 TELEPHONE (850) 385-2712 (800) 237-0448 FAX (850) 385-3251 WEBSITE www.FIADA.com EXECUTIVE COMMITTEE Lisa Compagno President Scott Lanier, CMD Senior Vice President Jim Winterick, Sr. Chairman of the Board Christopher Leedom Secretary Brad Joel Treasurer Frank Fuzy Regional Vice President George Hickey Regional Vice President Steve Marbais, CMD Regional Vice President Dino Mercurio Regional Vice President Brandi Noegel Regional Vice President FIADA STAFF Lisette Mariner, CAE Executive Director Terry Myers Educational Instructor Jason Berthiaume Education and Marketing Manager Victoria Sams Membership Manager Christy Taylor Editorial/Advertising
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FIADA • 1840 Fiddler Court Tallahassee, FL 32308 (850) 385-2712 • Call/Text: (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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Contents October 2017
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 Lisa Compagno
6
Executive Director’s Message Lisette Mariner, CAE
8
Legislative Awareness FIADA was well represented at the recent NIADA National Policy Conference in Washington, D.C.; Thank you to the FIADA PAC contributors who helped push the fund more than halfway toward its goal.
10
Back to Basics Terry Myers has some advice for how to make what you learned at the FIADA Annual Convention work for you.
14
Fake News About Your Dealership Digital Marketer Kenny Atcheson emphasizes the importance of making sure the whole story is told about your dealership.
17
Small Business Computer Security Basics October is cybersecurity awareness month. Prepare yourself with the basics on keeping your company's digital information safe.
20 What the Equifax Breach Means for Your Dealership and Customers Reggie Ponsford of Spireon gives some helpful Q & A on what happened in the recent cybersecurity threat as well as what resources you can use to manage the threats. 22
Flood Cars Could be Lurking Just Around the Corner Hurricane season is almost over, but the damage left behind may soon be felt in the automotive industry.
24
Membership News
26
The Top 5 Floor Planning Mistakes Dealers Make Chris Miller of NextGear Capital explains what to look out for when managing your floor planning activity.
28
A Look at Current Legal Issues Attorneys Tom Hudson and Nicole Munro recap recent federal and legal developments of interest to dealers.
30
Industry News October 2017 — Independent Dealer — 3
FROM THE PRESIDENT
Oh, What a Year! BY LISA COMPAGNO, FIADA PRESIDENT
C
iao for now. This is my last Presidents message of the year. By the time you read this our Annual Convention will have come and gone and we will have installed a new President. I thought I'd spend some time with this last message recapping the year and, of course, talking about membership. With regard to membership, I fell a little short of increasing our ranks as I had hoped. I don’t have an exact comparison of numbers due to the timing of the convention and the publication of this issue but mid-October last year we had 821 members. At the beginning of October this year we only had 756 members. In my defense, membership always tends to be higher in an “even” year, i.e. 2016, because of our biannual continuing education requirement. It is unfortunate, however, that the apparent driving force of membership is solely continuing education and not all of the other benefits that come along with membership. It is also unfortunate that the majority of licensed independent dealers in Florida do not make association membership a priority as a critical part of their business operations. As I’ve discussed in several of my President messages, being a member of the FIADA, and by affiliation the NIADA, has helped to improve our business and has added to our success as independent dealers. I look forward to this coming year and some new ideas we are working on to grow membership. If you have any ideas to grow membership, please let us know. Also, keep your eyes peeled for a national sweepstakes sponsored by the NIADA to recruit new members. We will be sure to send out an email blast and include information in our magazine regarding this national sweepstakes when it launches. Despite membership being down, we had an amazing year! We revised our mission statement and implemented a vision statement for the FIADA. We continue to exercise our philanthropic muscle by supporting the Florida Sheriffs Youth Ranches. I invited you to make one of your resolutions this year to get more involved in your industry through FIADA
4 — Independent Dealer —October 2017
participation. How did you do on that resolution? It’s never too late to get involved. We saw a big boost to our PAC fund with over $6,500 being raised in one night at a PAC fund event hosted in Ft. Lauderdale. Additionally, our NIADA Region, Region II, won the NIADA PAC Cup for the third year in a row at the National Policy Conference in Washington D.C. Check out the photos from our trip on page 8. We also will see an evolution in our Annual Convention with the NIADA joining us in Orlando in 2018 for a joint convention. The last time I reported on this we had not yet finalized our plans with the NIADA. But shortly after my Presidents message in May 2017, we decided to work with the NIADA to host a joint convention. It will be in June 2018 (instead of our usual October event) to keep in line with the NIADA’s timetable of events. However, it will continue to offer Florida-centric workshops that will count toward your continuing education and we will also announce our Quality Dealer of the Year. As I come to the end of my term as your President, I’d like to thank all of you who helped me throughout my year. I want to especially thank our Executive Director, Lisette Mariner, who makes this association run so seamlessly and smoothly. I will no longer be your President, but I will continue to serve on the Board as the Chairwoman of the Board. I have also taken on a new role as Chairwoman of the NIADA’s State Presidents and Officers Council, and, you might see me pen a few articles here and there in Independent Dealer as well. I look forward to sharing with you the work we will do on a national level to add value to your membership. Thank you. Lisa Compagno FIADA President www.fiada.com
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EXECUTIVE DIREC TOR’S MESSAGE
Advocacy BY LISET TE MARINER, CAE, EXECUTIVE DIRECTOR
T
he definition of Advocacy is "public support for or recommendation of a particular cause or policy," but what does it mean to advocate for members of the FIADA? It means that we are present at the NIADA National Policy Conference and Meeting in Washington, D.C. and meet with US Senator Marco Rubio’s office and Congressman Brian Mast’s office to educate them on matters such as tax reform and recalls. Understanding the legislative process, both state and federal is key to gaining support. You have an amazing staff at the national and state level who help organize events like this conference to gain access to these important policy makers and legislators. During the National Policy Conference, we spoke to representatives from the Federal Trade Commission, Consumer Financial Protection Bureau, and Small Business Administration. We heard from Rick Dearborn, White House Chief of Staff and the NAAA Auction Standards Committee. Every step of the way, we advocated with the intent of helping dealers with issues from all fronts. We take our job very seriously. We know that ensuring that both Congress and the State legislators are educated on our issues is key to reform. As we often reference, if you’re not at the table you’re what’s being served. That statement is so true, especially in politics. I was happy to see that our efforts of going to Congress and educating our delegates has not gone unnoticed. They now know who we are. The first year I attended we spent a lot of time introducing ourselves and explaining who we 6 — Independent Dealer —October 2017
represent. Now we go and they understand who we are and now are being educated on the issues we face. On the state front, both regulators and legislators contact us to ask about our stance on issues. They want to know how what they do is going to affect the industry. It’s because we are in constant contact with them. The Florida legislative session begins, January 5, 2018, which means that we’ve already started with committee meetings and reviewing bills that are being drafted. The deadline for bills is November 17. Our priority this year is to kill bad bills. Last year we supported the change in transporter tags. It was part of the Department of Motorist Services legislative package. Unfortunately, as what happens with department bills, it got bogged down with controversial things and was not passed. Thus far over 470 bills have been filed. I recently attended an Automobile Dealers Industry Advisory meeting and the Department has indicated that they will not seek any legislation this year, but they are looking at ways to fix the transporter tag issue. If you don’t know, transporter tags are being misused. They are supposed to be renewed annually and a sticker is provided, but often times that sticker is not put on the tag. Hence there are several expired transporter tags on the road. The DMV is looking to clean that up. If you’re interested in joining a committee to help guide the direction of FIADA, please let me know. Signing up is as simple as visiting www.fiada.com, selecting the About tab then clicking on Committees. www.fiada.com
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October 2017 — Independent Dealer — 7
This year's NIADA National Policy Conference was full of updates from regulators such as the CFPB, FTC, and Small Business Administration. And, for the first time ever, a briefing from the White House on key policies affecting the industry. The conference ended with the Day on the Hill, engaging with members of Congress and their staff on issues critical to the independent dealer. Lisa Compagno chairing the NIADA State Officers Council.
Region II won the NIADA PAC cup for the third year in a row.
FIADA delegates ready for the Day on the Hill.
88 — — Independent Independent Dealer Dealer —October —October 2017 2017
Texas Congressman Roger Williams, a fellow car dealer, receives the inaugural congressional award from Steve Jordan.
Lisa clarifying statements from the Small Business Administration Panel.
A sunset view of the Capitol Building.
Outside of Florida Senator Marco Rubio's office.
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BACK TO BASICS
You've Got the Information, Now Do Something With it! BY TERRY MYERS
The FIADA Annual Convention provided all the tools and information you need to grow your business. Take the time to utilize these resources and put a plan in action.
"G
ood works do not make a good man, but a good man does good works.”—Martin Luther
By the time you read this, you will have {or should have} experienced the annual FIADA Annual Convention in Orlando. Now is the time to review what you learned and determine how to institute those good ideas into your dealership policies and procedures. Guest "mountain top" speakers are great for inspiration and motivation. However, when all is over, it is time to return to the valley.
It is your responsibility to take charge every day. Ask yourself, “Who is in charge today?” The answer should be YOU. Block out one day and a two-hour time frame, right now! On that day, lay out all the collected information into a separate pile, away from al the ‘free’ stuff distractions. From the collected information, put the first item in front of you. Pick up the second item and place it in front of, or behind the first item, depending on which you feel has more value to your business. Continue this process through the entire pile. Don’t let yourself be distracted and stray from this simple, but important task.
GOT A TECHNICAL QUESTION AND NEED SOME ADVICE?
Use the R.E.D. Phone!
FIADA is your number one source for advice and information. Technical questions, legal questions, regulatory questions...bring them on! Our network of industry veterans, professionals and consultants can help you find the answers you are looking for. Members can call or text us anytime at (800) 237-0448 or access our online resources 24/7 at www.FIADA.com. It pays to be a member!
REPRESENTATION | EDUCATION | DEDICATION—FIADA! 10 — Independent Dealer —October 2017
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Once completed, you have a pile with, what you feel, is the most important item on top, down to the least important on the bottom. Take each item one at a time and ask yourself, “What value would this product bring to my dealership, if I were to incorporate it? What would it cost in the way of time and money to incorporate it? Am I willing to invest that time and money? Should I start the investigative process this coming Monday?” If the answer is yes, call the needed contacts first thing Monday morning. Make appointments to learn more. If the item does not seem to have the value you first thought, throw it away and move to the next item.
Taking each item in order means the most important items get reviewed and/or done first. Any other order would take just as long to complete and but the most valuable, profitable items might never get the attention they deserve.
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Do not take more than two hours on any project. Any succeeding item can wait until the next weekly, two-hour session. Do this weekly until all items have been reviewed.
It is your job/responsibility to make decisions. You don’t make bad decisions, you just make more decisions. You find the right way to do something or you find the right way not to do something. Articles are the opinion of the author and are not intended to be legal or accounting advice. The intent is to share thoughts and concepts that help the business owner(s) find new and perhaps revisit, ways to be as successful as they are capable of being. Terry can be reached at (727) 804-7375. Email: tmyers@floridaautodealerschool.com. Feedback is appreciated and encouraged. Terry LB Myers, author, lecturer, FIADA instructor, FADS owner/instructor.
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THANK YOU PAC CONTRIBUTORS With your help, we made it more than halfway to our goal of $30,000. There's still time to make a donation. Use the form on page 13, or make a donation online at www.fiada.com. GOLD DONORS Auto Data Direct Cars & Credit of Jacksonville Frank Fuzy, Century Motors of S. Fla., Inc Credit Cars
Dealer Consulting, LLC Edward Goodman Gulfstream Motor Credit Co. Mortham Governmental Consultants
Prime Autos Southeast Car Agency, Inc Teri Wallington Wheel City Florida
DealerSocket Ellen Westpfahl Florida Auto Dealer School Frontier Motors, Inc Good Rides, Inc Graham Auto Sales
Hermanos Auto Wholesale Insurance Auto Auction Joanna Petropoulos Marbais Enterprises, Inc March Motors, Inc Michael Samaan
Midnite Motor Classics Moffa, Gainor, & Sutton, PA Noegel’s Auto Sales Palm Tree Auto Sales Richard Delio Save A Lot Auto LLC
Silverauto The Motorcoach Store Trucks Unlimited Inc Turnpike Motors United Acceptance, Inc
Bubba Hill Auto Plaza, Inc Butler Auto Recycling Buyer’s Zone, Inc C & J Auto Collection C & L Motors Inc Car Buying Service of Jacksonville Car Collection of Tampa Car Credits Car Solutions LLC Car Spot of Central Florida CarBucks Carlisle Events Car-Time, Inc Casey’s Auto Wholesale Cassat Auto Sales Celebrity Auto Group Centec Equipment Sales Central Florida Sales & Leasing Charleston Auto Auction Citrus Auto Trader Corona Auto Sales LLC Corvette Experience Creel Motors Dealer Consulting Services, Inc Dealer Profit Partners DealerCenter DEALERPLATFORM LLC Dealers Auto Auction Diamond II Auto Sales, Inc Dick Moye Auto Sales, Inc Dimension Motors Inc Direct Auto Exchange, LLC Discovery Auto Center LLC DMC Motors of Florida Donny Mills Auto Sales, Inc DriveTime Sales & Finance East Coast Insurors, Inc Ebenzz Motors Economy Motors Edison Bridge Auto Sales ETS Autos Evans Auto Sales E-Z Pay Cars LLC Fett Motors, Inc Financial Insurance Brokers Int'l Firehouse Auto Sales Inc First Auto Sales First Coast Auto Sales First Leasing Corp First Place Auto Sales Inc FirstSun Financial, Inc Fisher & Phillips LLP Fitzgerald Motors, Inc Fleet Lease Disposal Fleet Liquidators of Central Florida LLC Fleet Street Remarketing Floorplan Xpress LLC-OK
Florida Auto Exchange Co. Florida Autosport, Inc Florida Credit Union Florida Fine Cars Inc Florida Highline LLC Fort Myers Auto Mall Fortegra Freeland Moore dba Harbor Nissan Fun To Drive, LLC G & G Sales and Service Galeria Auto Mart, Inc Gateway Auto Sales, Inc Genuine Motorcars, Inc Gen-X Motors Gibson Truck World Global Wholesale Motor Company Godby Enterprises DBA Universal Auto Sales of Plant City Golden Eagle Management Services LLC Golden Oldies Auto Sales, Inc Got Car Auto Brokers LLC Greenway Auto Sales Haims Motors Inc Haines Creek Auto Sales Harold D. Corey Auto Broker Hawley Motor Sales, Inc HH Sales, LLC High Tech Locksmiths Highway Motors Inc Hollands Auto Parts House of Cars USA One LLC Integrity Auto Sales, Inc Interactive Financial Marketing Group Ituran USA, Inc J & C Auto Sales J.D. Byrider, Jacksonville J.D. Byrider, Panama City J.D. Sanders, Inc Jacks Auto Sales JD Byrider of Bradenton Jeff’s Auto Sales & Service Jim Douglas Sales and Service, Inc Jimmie Wells Auto Sales, Inc J-Linn Motors John Paul Motors LLC. K.K. Car Company, Inc Kathy’s Kars Kicklighter Auto Sales LLC Lake Auto and Truck Larry’s Auto Service Center Lash Auto Sales Latin Motors Lazydays Le Bo Auto Brokers Leedom Group Lighthouse Used Cars and Trucks Lovering Auto Sales
Luke Neely M & M Auto Sales Macklin Automotive Co. Maher Chevrolet Mancini Automotive, Inc Martinez & Associates, CPAs, P.A. Max Torque Auto Group Maxx Motors McKinna Auto Sales Mcphails Auto Sales Mears Motor Leasing Mears Transportation Group MicroBilt Mike Hill Used Cars, Inc Mike Hubbard Mike Kashtan’s Superior A/S Mike’s Performance Garage, LLC Millenia Motors, Inc Mission Auto Sales MJC Classic Cars LLC Modern Corp Auto Sales Naples Motorsports National Dealer Services Nations Trucks Nationwide Southeast LLC NextGear Capital Nice Car, Inc Norman Hickmore Ocean Auto Sales of Miami, Inc O’Donnell Automotive Off Lease Only OK CARZ Only Used Trucks Orlando Car Deals Orlando Longwood Auto Auction Outdoor Recreation World, Inc Owl Automotive Group Inc Palm Beach Auto Wholesale Paradise Auto Brokers, Inc Passport Leasing Corp PassTime Patriot Automotive Consulting Paul Yoder Auto Sales, Inc PCT Enterprises Of FL, LLC Penske Truck Leasing Co LLP Ponce Used Cars, Inc Port Motors, Inc Premier Motor Cars Premier Truck Center LLC Presidential Leasing Inc ProGuard Warranty Inc Pro-Power Auto Sales Company Quality Equipment & Parts Inc R & L Auto Wholesale Ray’s Motor Sales, Inc Regional Wholesale Inc Richard Bell Auto Sales
Rick’s Auto Marketing Center South Riker’s Auto Financial Riverland Sales LLC Roney Auto Sales Schirras Auto Inc Select Motors Group Inc Sides Cars-Trucks Somerset Automotive Sales South Side Kia Southeast Auction Finance, LLC Southeast Car Agency, Inc Southeast Fleet Auto Sales, Inc Southeastern Auto Auction Southside Autos, Inc Space Coast Auto Auction Spanos Imports Splish Splash Auto Sales, Inc Sport Classic Motorcars, LLC SRQ Auto LLC Stepanek’s A/S & Service, Inc Steve’s Auto Sales LLC Strategic Dealer Services Streetside Classic Cars Sun Financial Holding LLC Sunshine Kia of Miami Tallahassee AutoFinance dba Gary Moulton Auto Cent Tampa Bay Truck And Auto Wholesale TextBox The Auto Source, Inc The Garage Inc THE MIAMI AUTO STORE The Wholesale Club, Inc dba Target Auto Brokers Tomlinson Motor Company Toy Store TradeRev Ultimate Image Auto, Inc United Auto USA Corp Used Car Supermarket Vac-Con, Inc Value First Auto Sales, LLC Van’s Cars & Trucks Vegter Automotive VIP Auto Group Inc Warren’s Auto Sales Wayne Reaves Computer Systems Westside Motor Sales Wheel City Auto Finance Centers Williams & Stazzone Insurance Agency, Inc Woodall Auto Wholesale, Inc Worldwide Auto Credit LLC WorldWide Motors LLC Xpress Finance, Inc Younes Investment Inc Your Auction of Tampa Bay
SILVER DONORS Angelo Auto Wholesale Austin Bullock, Century Motors of S. Fla., Inc. CARFAX Continental Motor Group Copart, Inc Dealers Insurance Services, LLC
BRONZE DONORS 3445 Car Store, Inc A & J Mobility Inc A.R.A. GPS Systems, Inc ABC Autos, Inc ABCOA/Deal Pack Software Accounting and Tax Resource Center Ace Motor Acceptance Corp Ace Motors Inc ACV Auctions Inc ADESA Jacksonville ADESA Sarasota Adesa Tampa Advance Auto Parts Alas Auto Brokers Inc Allans Auto Sales Alley’s Auto Wholesale America Choice RV American Classic Car Sales American Recovery Association Anderson’s Affordable Auto Andrew Thomas Motorcars AP Motorsales LLC Apex Auto, Inc Argentum Financial, LLC Ashton Agency, Inc ASI 3 LLC Auction123.com Auto Add-Ons, Inc Auto Dealer Solutions LLC Auto Dealers Wholesale Auto Express Enterprises, Inc Auto Market of Florida Corp Auto Sales Plaza Inc Auto Select Auto Use Autocar Financial LLC Autoflex, LLC Autoinspect.us LLC Autoline Preowned AutoMax Ocala AutoMaxx Automotive Finance Corporation Automotive Fleet Enterprises Autorama Auto Sales AutoTrader.com B & C Autonet B&A Auto Sales of Central Florida Barton Used Cars South Inc Baseline Auto Sales, Inc BC Motor Company, Inc Beach Boulevard Automotive Beach N Rides and Rentals Best Automotive LLC Big Truck Rental LLC BNM Enterprises, LLC Bob Oliva Motors, Inc Broad and Cassel
12 — Independent Dealer —October 2017
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SUPPORT THE FIADA PAC Your PAC Contribution helps spread awareness and gain support of issues affecting independent dealers in the state’s capitol. There’s still time to get your contribution in before the session starts if you make it today.
CONTRIBUTION INFORMATION Contributor’s Name:_________________________________________________________________________ Dealership/Company:________________________________________________________________________ Street Address, City, State, Zip:____________________________________________________________________
q
Check q
q
$500
Credit Card (one time contribution) q q
Credit Card Information:
$250 q
q Visa
$100 q
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MasterCard
Monthly Credit Card Contribution (until cancel)
$50 q
q
$25
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American Express
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PAYMENT INFORMATION Name on Card: Card number: Exp Date:
Sec. Code:
Billing Phone:
Billing Address Authorized Signature
Make your check payable to FIADA-PAC and mail to: FIADA • 1840 Fiddler Court • Tallahassee, FL 32308 If making payment via credit card, you may fax your contribution form to 850.385.3251
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October 2017 — Independent Dealer — 13
D E A L E R O P E R AT I O N S
Fake News About Your Dealership Fake news can be all too real when it comes to affecting the reputation of your business. Be proactive and make sure you are monitoring all the online outlets that can spread the misinformation. BY KENNY ATCHESON
T
here has been a lot of talk regarding fake news over the last year. The political season brought the problem to the forefront. Unfortunately, because I am a media expert I know that fake news has been spreading for a long time—especially in the digital realm. Some fake news is meant to generate money. Fake news is oftentimes fronted by outlandish headlines that are meant to garner clicks to certain websites so that website owners can show advertisers that their “news” gets millions of views per month. The fake news you should concern yourself with is what is being spread about your dealership.
The truth is: someone at your dealership sold a vehicle to them at an agreed-upon price—that incidentally they thought was fair at the time. They signed an agreement that said the car would be repossessed if their payment was “X”
The first two things that the complaining customer said were true in the minds of the reader. This can and does lead whoever reads or hears about the negative online review to think the entire story is true.
Just because you know that the news is fake doesn't mean your potential customers know. A competitor or a disgruntled employee can create a fictitious name, go to Google, and write an online review telling people that your dealership ripped them off. That scenario is rare, but what is not rare are actual customers who complain online about your dealership—and leave out important details, such as they missed payments for three months.
The best lies—or fake news—to spread are those that contain some truth. Partial truths may be shared to start the communication; such as the online review which leads the reader or listener to trust what they consume before they get to the fake part. For example, a customer has had their car repossessed. They go to your Google page and tell potential customers 14 — Independent Dealer —October 2017
that your dealership can't be trusted. They purchased a car from this place, paid more than it was worth, they were one day late on the payment and called the dealership to tell them the payment was on the way, but the payment was late because they had to take their kid to the doctor—and then the vehicle was repossessed from the hospital parking lot! What a big meanie you are.
days late. When the payment was one day late you spoke to them and told them to get their payment in by a certain date or you would be forced to repossess the vehicle. The truth is also that the customer did in fact purchase a vehicle from your dealership. Although it was at an agreedupon price, the stigma that used car dealers sell vehicles for more than they are worth is already out there. So the first two things that the complaining customer said were true in the minds of the reader. This can—and does—lead whoever reads or hears about the negative online review to think the entire story is true. Continued on page 16. www.fiada.com
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FAKE NEWS continued from Page 14.
During a recent consulting call, a new client asked me how to stop getting negative reviews. It's a common question I get from dealers. It is worthy of a two-part answer.
won't hurt as much if there are 150 positive reviews. Negative reviews will get buried by positive comments from happy customers.
1. Launch a customer Feedback & Review System that encourages complaining customers to vent internally. There should be signage in the building and in communications with customers, alerting them where to go to share their feedback. Many customers who complain on Google or Facebook would use an internal system if there was one in place. But because your dealership may not offer one, they complain publicly and leave out important details. This is not my opinion. I have factual data to back this up. We did a case study of one client who used our Feedback & Review System for their dealership. Out of 56 customer complaints, only two went public over a given time.
Fake news has been in the news so much lately because it can be hugely detrimental to the country. It can be hugely detrimental to your business. You can choose to do something about it.
2. Saturate your dealership’s Google and Facebook pages with positive reviews. Having one or two negative reviews
Kenny Atcheson is the founder of Dealer Profit Pros and author of Marketing Battleground: How to Deploy Under-the-Radar Strategies to Explode Your Profits. Kenny offers private consulting and he teaches workshops and speaks at conventions and 20 Groups. His company offers several marketing and advertising programs which include Private Consulting, a Referral Results Training Program, a Newsletter Program, a Feedback & Review & Complaint Management System, Google Pay-Per-Click Management, Facebook Pay-Per-Click Management, Direct Mail Campaigns, Copywriting, and more. His website can be found at www.DealerProfitPros.com
FIADA's app has been revamped and is ready to go. Download it now at your mobile app store. With the new app, you'll have all your FIADA benefits right in your back pocket:
upcoming events The entire Association calendar is synced with the app and you can register to attend with a simple tap.
coupons Access your FIADA Member Coupons from the auction lane if you want. No paper needed! The app keeps track of coupons that have been redeemed.
social Connect with FIADA via Facebook, twitter or YouTube and get updates of social interaction.
additional features Get mobile-ready features of www.FIADA.com from our new app, including photos, videos and other resources. 16 — Independent Dealer —October 2017
SINCE 1940
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B U S I N E S S O P E R AT I O N S
Small Business Computer Security Basics If you’re running a small business with only a few employees, you’ve learned about a lot of things – accounting, marketing, HR, you name it. And you probably depend on technology, even if it’s only a computer and a phone. You can’t afford to get thrown off-track by a hacker or scammer. BY THE FEDERAL TRADE COMMISSION
O
ctober is National Cybersecurity Awareness Month, according to the U.S. Department of Homeland Secruity, so what better time to focus on a few computer security basics to help your company, even if you’re the only employee, improve security. If you have employees, train them to follow these tips.
PROTECT YOUR FILES & DEVICES
Keep your software up-to-date. No matter what operating system, browser or other software you use, keep it up to date. Set it to update automatically so you don’t leave holes hackers can exploit. Back up your files. No system is completely secure. Create offline backups of important files. That way, if your computer is compromised, you’ll still have access to your files. Use strong passwords. The longer the better – at least 12 characters. Complexity also helps strengthen a www.fiada.com
password. Mix numbers, symbols, and capital letters into the middle of the password, not at the beginning or end. Don’t use patterns to lengthen a password. Never use the same password for more than one account, or for personal and business accounts. If you write them down, lock them up. Consider using a password manager, an easy-toaccess application that allows you to store all your valuable password information in one place. Be sure to protect your password manager with a strong master password, and only use a password manager from a reputable company. Don’t share passwords on the phone, in texts or by email. Turn on two-factor authentication. For accounts that support it, twofactor authentication requires both your password and an additional piece of information to log in to your account. The second piece could be a code sent to your phone, or a random number generated by an app or a token. This protects your
account even if your password is compromised. Don’t leave your laptop, phone or other devices unattended in public, even locked in a car. They may contain sensitive information – and they’re costly to replace. If they go missing, the information stored on them may fall into the hands of an identity thief. You also can turn on device encryption to encrypt all data on each device. This reduces the risk to sensitive information in case your device is stolen or misplaced. Password protect all your devices. If you access your business network from an app on your phone or tablet, use a strong password for the app, too.
THINK BEFORE YOU SHARE YOUR INFORMATION
Protect account information. Every time someone asks for business information – whether in an email, text, phone call or web form – think Continued on page 18. October 2017 — Independent Dealer — 17
COMPUTER SECURITY BASICS continued from Page 16.
default passwords, so change yours to something only you know. The same goes for any default “user” passwords. Use long and complex passwords. Visit the company’s website to learn how to change the password.
about whether you can really trust the request. Scammers will say or do anything – or pretend to be anyone – to get account numbers, credit card numbers, Social Security numbers or other credentials. Scammers will rush, pressure or threaten you to get you to give up company information. Only give sensitive information over encrypted websites. If your company is banking or buying online, stick to sites that use encryption to protect your information as it travels from your computer to their server. Look for https at the beginning of the web address in the address bar of your browser. Look for https on every page of the site you’re on, not just where you log in.
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Turn off any “remote management” features. Some routers offer an option to allow remote access to your router’s controls, such as enabling the manufacturer to provide technical support. Never leave this feature enabled. Hackers can use them to get into your network.
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Log out as administrator. Once you’ve set up your router, log out as administrator, to lessen the risk that someone can piggyback on your session to gain control of your device.
PROTECT YOUR WIRELESS NETWORK
Set up your router securely. If your small business has a wireless network, your "access point" is probably a cable or DSL modem connected to a wireless router, which sends a signal through the air. Your router directs traffic between your local network and the internet. Any device within range can pull the signal from the air and access the internet. If you don't secure your router, strangers could easily gain access to sensitive personal or financial information on your devices. •
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Keep your router’s software up to date. Before you set up a new router, and periodically thereafter, visit the manufacturer’s website to see if there’s a new version of the software available for download. To make sure you hear about the latest version, register your router with the manufacturer and sign up to get updates.
Change the name of your router from the default. The name of your router (often called the service set identifier or SSID) is likely to be a standard, default ID assigned by the manufacturer. Change the name to something unique that only you know. Visit the company’s website to learn how to change the router name.
Use encryption on your wireless network. Encrypt the information you send over your wireless network, so that nearby attackers can’t understand your communications. Encryption scrambles the information you send into a code so that it’s not accessible to others. Modern routers offer WPA2, the strongest wireless encryption widely available. To protect your data, use it.
Change your router's pre-set password(s). Hackers know the
Wireless routers often come with the encryption feature turned off.
You must turn it on. The directions that come with your router should explain how. If they don't, check the company’s website. Limit access to your network. Allow only specific devices to access your wireless network. Wireless routers usually have a mechanism to allow only devices with particular unique Media Access Control (MAC) address to access to the network. If you want to provide free Wi-Fi for your customers, set up a second, public network – separate from the network for your business devices.
BE CAREFUL WITH WI-FI HOTSPOTS
If you’re on the go, Wi-Fi hotspots in coffee shops, libraries, airports, hotels, and other public places are convenient – but often they’re not secure. In fact, if a network doesn’t require a WPA2 password, it’s probably not secure. To protect your information when using wireless hotspots, send information only to websites that are fully encrypted – look for https on every page. And avoid using mobile apps that require sharing personal or financial information over public Wi-Fi.
KNOW WHAT TO DO IF SOMETHING GOES WRONG
Plan ahead so you know what to do if a hacker gets into your system. There are steps you can take to minimize the damage if you discover malware on your computers, that your email has been hacked, or even if someone takes over your system and demands a ransom to return control of it. And if someone accesses personal or financial information that they shouldn’t, take steps to respond to that data breach.
Check out a special publication from the FTC at https://www.ftc.gov/tips-advice/business-center/guidance/start-security-guide-business and find additional resources on cybersecurity at https://www.ftc.gov/about-ftc/bureaus-offices/bureau-consumer-protection/small-businesses.
18 — Independent Dealer —October 2017
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October 2017 — Independent Dealer — 19
B U S I N E S S O P E R AT I O N S
What the Equifax Breach Means for Your Dealership and Customers With over 143 million Americans affected by the recent data break at Equifax, you are bound to experience some of the fallout. Here are some helpful guidelines to help you through. BY REGGIE PONSFORD, SPIREON
Y
our customers may be impacted by the latest big data breach affecting Equifax, one of the three nationwide credit-reporting agencies, which compromised private credit and financial information for 143 million Americans. The breach can raise issues for dealers that offer financing and need to check customer credit. Customers may have questions, or worse, have “credit freezes” or alerts on their credit reports. A recent article in the NADA newsletter entitled “The Equifax Data Breach: What Dealers Should Know” provided some good information on how dealers may be affected by the breach. To help your finance team navigate these unique challenges and help consumers at risk, we’ve compiled some additional links that may help answer some of your questions: What should my dealership do if we see a fraud alert or get a “frozen credit” report? Fraud alerts and frozen credit have different functions and need to be addressed in different ways. In both cases, the customer places these alerts on their account to prevent fraudulent activity. What is a fraud alert and how do I deal with it? Fraud alerts are warnings a consumer places on their credit file to notify you that there may be a potential case of identity theft 20 — Independent Dealer —October 2017
or fraud. These alerts typically last 90 days and are free for the consumer to place. You may still run the customer’s credit as normal, but before creating a new line of credit for this consumer, your dealership should take extra steps to confirm the customer’s identity.
Customers may have questions, or worse, have "credit freezes" or alerts on their credit reports. What is a credit freeze and how do I deal with it? In a credit freeze, no one can access the customer’s credit, including the customer, until the freeze is removed. Customers must contact a major credit agency to create a PIN and place these freezes, as well as contact them again using the special PIN to remove the freeze. In some cases, there are fees for the customer to freeze/unfreeze their credit. In this case, the customer must take action before you may review their credit. To learn more about fraud alerts and credit freezes, view the FTC’s Frequently Asked Questions at https://www.ftc.gov/news-events/ blogs/business-blog/2017/09/fraudalerts-vs-credit-freezes-ftc-faqs. Where can my customer find out if they’re affected or get information
about the breach? Customers can find out if they are affected at this link: https://trustedidpremier. com/eligibility/eligibility.html. It is recommended that they only use this site on a trusted and secured connection. How can my customer protect themselves? Whether or not their information was exposed, consumers can get a free year of credit monitoring through Equifax after checking if they are affected. Consumers should closely monitor existing credit cards and bank accounts for unfamiliar activity. Consumers may also get a free credit report from annualcreditreport.com to check for new accounts or inquiries they may not have authorized. Customers can visit identitytheft.gov/ databreach for more tips to deal with identity theft or the threat of identity theft as a result of the breach. It is important to keep track of financial news that may impact your customers and business. Taking these extra steps will protect your business and protect your customers, giving both of you extra piece of mind. Spireon is the leading provider of aftermarket telematics solutions in the U.S., providing businesses and consumers with powerful insights to track, manage and protect their most valuable assets. Learn more at www. spireon.com. www.fiada.com
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INSURANCE ALERT
Flood Cars Could be Lurking Just Around the Corner After the debris has been removed and the roofs have been replaced, dealers will find conditions are ripe for a second surge of hurricane damage—flood cars and misbranded titles. BY KEVIN O’CONNOR, CIC, CRM
I
t has been an active hurricane season to say the least. Hurricanes Irma and Harvey are proving to be two of the costliest storms in history. While it's much too early to know what the actual damages from these two storms will be, most of our sources estimate it will be well in excess of $200 Billion. While much of the recovery expenses will go to property damage on homes and businesses, extensive storm surge and flooding has caused historic vehicle losses, seeing as Houston and many areas of Texas have a higher car ownership rate than the national average. Most estimates are expecting Irma and Harvey will produce more total loss flood cars than any storm in history. We have heard numbers in excess of 1,000,000 vehicles were lost!
Above: One of the estimated 1,000,000 cars flooded as a result of Hurricane Harvey. Below: After the water is gone, flooded cars can be covered with mold.
Determining the amount of damage on a flood car can be very tricky to an insurance claims adjuster who may be unable to evaluate the extent of the damage without disassembling components such as door panels and engine parts them to inspect for water and corrosion damage. While rust and water are the obvious issues, the electrical systems create the real problem for insurance companies. When electrical components have failed, the components have to be removed individually and substituted on a trial and error basis to determine which are failing. 22 — Independent Dealer —October 2017
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The suspected components would then be replaced and a system test using manufacturer supplied test equipment would be needed in order to determine if the system is again functioning. This process would need to be completed by the franchised dealer and is far beyond the scope of what an independent, insurance company approved body shop has the capability of doing. The tedious troubleshooting that is required makes it almost impossible for an insurance company to estimate the cost of repair forcing them to treat the vehicle as a total loss. Once an insurance company “totals” a flood damaged vehicle, the state agencies require that the vehicle’s title be “branded,” telling any future buyers the status of the vehicle. This “branded” title is then reported to the National Motor Vehicle Title Information System (NMVTIS), the national database of vehicle histories. If everything is working according to plan, a buyer of a vehicle in Florida should easily be able to determine if that vehicle had been totaled by an insurance company. With this knowledge, that buyer could then make an informed decision on whether they want to purchase it or not. While NMVTIS is a good start at managing the problem, the system isn’t perfect. We have seen in the past, reports of insurance carriers not “branding” the title as required or reporting it prior to its sale at salvage auctions allowing the vehicle to be sold with a clean title and into other states with the buyers having no knowledge of its history. Even if the title is branded, the vehicle may be moved to a different state and retitled under that state’s laws as a clean title through a process called title “washing.” Finally, there is no standardized branding system across the different states making it difficult to identify the vehicle’s flood history. www.fiada.com
Once an insurance company "totals" a flood damaged vehicle, the state agencies require that the vehicle's title be "branded," telling any future buyers the status of the vehicle. In addition to the issues the NMVTIS project has, it doesn’t address any of the uninsured vehicles. The sad truth is that many of these vehicles will make their way back into the marketplace and be sold to unsuspecting buyers as well. These vehicles come from a number of sources including but not limited to: • Self insured commercial fleets— Companies send the damaged vehicles to salvage auctions under the original clean title paperwork. Most of the salvage auctions report these sales to NMVTIS, however the paperwork will still show as clean. • Privately owned vehicles—These are often sold on sites such as Craig’s List or Ebay or sent to out-of-state auctions. In most cases, the owner of the vehicle has no legal duty to disclose the damage so a less than scrupulous rebuilder could repair it and sell it as a clean vehicle. This sale could take place privately or through an auction placing the retail dealer at risk. Not knowing about the damage, the dealer sells the car to a customer only to have them return with their attorney months or years later. So what can be done to avoid ending up with one of these cars as either a consumer or a dealer? First, check the NMVTIS database. The vast majority of vehicles being totaled by insurance companies will show up there. If the vehicle is not in the database, it’s up to the buyer to do whatever investigative work they can to track down a problem.
The second process would be an extensive inspection. Most dealers have the experience to spot flood damage on the surface, but the lack of any signs of water doesn’t guarantee the vehicle is safe. For example, a large used car dealer noticed he had been doing an unusual amount of brake jobs on low mileage cars and decided to take a closer look to see why. To his surprise, once the door panels had been removed there were signs of corrosion caused by salt water. This damage was not visible at the time of purchase. Not wanting the liability of selling a damaged car, this particular dealer ran the vehicles back through the auction under a “Red Light” and took a large loss. Unfortunately, these vehicles will still end up being sold to retail buyers by dealers willing to “roll the dice.” Another way to protect against unknowingly buying a flood damaged car, is by getting a Post-Sale inspection (PSI) when offered at the auction. A PSI, can range between $75 and $100 and includes a rigorous check of the vehicle for numerous items including flood damage. At the end of the day, many of these vehicles will make it back out onto the highways of the country and there is very little that can be done to stop it. Be vigilant in your investigations before buying your inventory and avoid taking any chances. Kevin O’Connor and Dealers Insurance Services have been helping dealers with insurance needs for 27 years. He may be reached at (321) 285-9678 or online at www.dealersinsurance.com. October 2017 — Independent Dealer — 23
MEMBERSHIP NEWS
New Members
SEPTEMBER 2017
AMERICAN CAR CENTER Memphis, TN David Norton Sponsor: FIADA
AUTO MANAGER INC Canoga Park, CA Mark Garland Sponsor: FIADA
Renewing Members
NEXT RIDE LLC Largo, FL Trever Varney Sponsor: ASC Warranty
PAYMENTVISION Jacksonville, FL Eugene ORourke Sponsor: Software Partner
TOA ALTA Puerto Rico Jimmy Aponte Sponsor: Kevin Scott
SEPTEMBER 2017
20+ Year Members United Acceptance, Inc.
Smyrna, GA
Williams & Stazzone Insurance Agency, Inc.
Melbourne, FL
Corvette Experience
Oakland Park, FL
DealerSocket
San Clemente, CA
Galaxy Auto Services, Inc.
Orlando, FL
Jacksonville, FL
Hermanos Auto Wholesale DBA The Car Shack
Hialeah, FL
Auto Data Direct
Tallahassee, FL
National Auto Lenders, Inc.
Lighthouse Children Home, Inc.
Tallahassee, FL
Parkway Wrecker Service
10+ Year Members Angelo Auto Wholesale
Prime Autos
West Palm Beach, FL
Tallahassee, FL
PassTime
Littleton, CO
Sunbelt Dealers Assistance Inc.
Under 10 Year Members All American Bonds and Insurance
Winter Park, FL
Car's Trade Center, LLC
Rejoining Members
Miami Lakes, FL
Atlanta, GA
Treasure Coast Automotive Holdings LLC dba CARite of Cocoa
Cocoa, FL
Orlando, FL SEPTEMBER 2017
BLUMS AUTO MART Port Orange, FL Eric Blum Sponsor: FIADA
CHRIS CARROLL AUTOMOTIVE Pensacola, FL Christopher Carroll Sponsor: FIADA.com
TALLAHASSEE AUTOFINANCE DBA GARY MOULTON AUTO CENTER Tallahassee, FL Gilbert Starleigh Sponsor: FIADA
SAVE THE DATE! FIADA and NIADA are teaming up for a joint convention and expo in 2018. Join us for nextlevel education, events and entertainment.
June 18-21, 2018 Orlando, FL 24 — Independent Dealer —October 2017
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October 2017 — Independent Dealer — 25
F LO O R P L A N N I N G F Y I
The Top 5 Floor Planning Mistakes Dealers Make One of the benefits of floor planning is that it frees up cash for expenses and business investments, but there are a lot of moving parts among the basics that dealers need to know. BY CHRIS MILLER, NEXTGEAR CAPITAL
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loor planning is a basic process: Open a line of credit, purchase inventory with that credit, sell inventory and pay back the loan. However, intertwined among the basics are a lot of moving parts that can cause complications. While many variables are beyond the dealer’s control, such as the economy or auction prices, it’s important to understand the five most common mistakes that dealers can avoid:
MISMANAGING CASH FLOW
One of the benefits of floor planning is that it frees up cash for expenses and business investments. However, a common mistake is not taking into account that many of these bills mature at the same time. Improper cash management may cause dealers to get into a borrowing cycle that provides little wiggle room and therefore creates a shell game of constantly shifting cash from one debt to another.
OVER-EXTENDING
Far too often, dealers over-extend themselves when it comes to inventory. When you purchase more inventory than you can sell, you put yourself at risk if you can’t make the payments. Moral of the story: Just because you are approved for a 26 — Independent Dealer —October 2017
$250,000 line of credit doesn’t mean you have to go out and spend it all at the next auction. Buy in proportion to your sales figures.
COMMUNICATING INADEQUATELY WITH YOUR FLOOR PLAN PROVIDER
No business likes surprises, especially finance companies. Keep your floor plan provider abreast of any changes or issues regarding your business. Won’t be able to make a payment on time? Let them know ASAP. By being proactive and honest, you stand a better chance of your floor plan provider working with you to help resolve issues.
RAISING RED FLAGS
There are three red flags that your floor plan company is always watching for: NSF’s, Collateral Audits and Turn-times. NSFs. Insufficient funds (or NSFs) are directly correlated to points #1 and #2 above. When you can’t make your payments on time, or your checks/ ACH’s bounce, rest assured that your floor plan provider is now watching your account closely. This is one of the biggest indicators that there is an issue with how you’re managing your account and ultimately how
the creditor views their chances of being repaid. This puts the floor plan provider at risk because they have advanced funds on a certain piece of collateral. Collateral Audits. Your floor plan company is a collateral-based lender and that collateral is the physical inventory – not the title of the vehicle. It’s important that the collateral can be physically verified based on the agreed terms, usually monthly. When your floor plan provider can’t verify inventory, a red flag is raised. If you need to move inventory to another location for a big tent sale or to an auction, let your floor plan provider know. Turn Times. Used inventory should be turned every 45 days, because your ability to make money on aged inventory goes down over time. While this may not fit every dealer’s business model, your floor plan company is going to get nervous if they see a vehicle on your lot for an extended period. Many times dealers hold inventory “looking for the right buyer” instead of cutting their loss and moving the unit at auction so they can acquire fresh inventory.
IMPROPERLY MANAGING THE ACCOUNT
When you open a floor planning account, find out when payments are due and what different resources are available, such as valuation tools or payment schedules, that can make it easier to run your business. Your floor plan representative is also a valuable resource who can provide great insight. Chris Miller is Director – Strategic Initiatives for NextGear Capital. Learn more about NextGear Capital online at www.nextgearcapital.com www.fiada.com
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October 2017 — Independent Dealer — 27
LEGAL ROUND-UP
A Look At Current Legal Issues BY THOMAS B. HUDSON AND NICOLE FRUSH MUNRO, HUDSON COOK, LLC
A monthly collection of selected legislative and regulatory highlights, and a recap of some of the many auto sale and financing lawsuits followed each month. COMPLIANCE TIP State attorneys general have targeted car dealers in a number of recent, highly-publicized enforcement actions. Has the AG in your state been active? How can you find out? That’s easy – just task your compliance officer with the chore of checking the AG’s website weekly, looking over the previous week’s press releases, and reporting to top management what he or she finds. If your AG’s going after dealers, those press releases will tell you so, and will identify the sorts of conduct the AG is challenging. FEDERAL DEVELOPMENTS Federal Bill Would Ban Sales of Used Cars With Open Recalls. U.S. Senators Blumenthal (D-CT) and Markey (D-MA) and U.S. Representative Schakowsky (D-IL) recently introduced legislation (H.R. 3449) to ensure that used vehicles containing recalled, unsafe parts are repaired before being sold or leased. Dealers currently may sell or lease cars with outstanding recalls. The Used Car Safety Recall Repair Act would require used car dealers to repair any outstanding safety recalls before selling or leasing used automobiles. Manufacturers and new car dealers are prohibited from selling vehicles containing recalled parts, but no current law prohibits used car dealers from selling or leasing vehicles with open recalls. The sponsors say that the proposed legislation addresses the gap in consumer protection that confuses car buyers who believe they are buying a product with safety assurances. The House bill is co28 — Independent Dealer —October 2017
sponsored by Representatives Pallone, Jr. (D-NJ), Rush (D-IL), Butterfield (D-NC), and Matsui (D-CA). FTC Offers Security Help. The FTC released several blog posts as part of its “Stick with Security” initiative to educate businesses about the best practices to secure consumer data. The FTC will publish a blog post every Friday for the next few months focusing on the 10 data security principles addressed in its “Start with Security” guide for businesses. Based on information from the FTC’s investigations and enforcement actions and questions from businesses, the blog posts will use a series of hypotheticals to illustrate the steps companies can take to safeguard sensitive data in their possession. CASE OF THE MONTH Sharay Freeman went to A Better Way Wholesale Autos to buy a used car. She signed a retail purchase order, which set forth a cash purchase price of $10,995, a VIN etch service fee of $198, a dealer conveyance fee of $598, sales tax of 6.35 percent, an unspecified amount for registration of the vehicle, which she reasonably expected to be under $150, and a deposit of $2,500. Although the purchase order stated “No Refund of Deposit,” a salesman allegedly told Freeman that the deposit would be returned if A Better Way could not obtain financing for her. Using an online calculator and these figures, Freeman determined that her monthly payments would be about $320, which she could afford.
Freeman provided a $2,500 deposit, and A Better Way tried to secure financing. Freeman did not approve of the financing terms obtained by A Better Way, so she asked for her deposit back. The terms included ancillary products and services that Freeman did not want, and the payments were more than she could afford. A Better Way refused to give her deposit back and attempted to arrange new financing. Under the new terms, the sale price of the car was more than previously advertised, and the number of payments increased. Freeman declined the new financing as well and sued A Better Way, claiming that it violated the Connecticut Unfair Trade Practices Act and engaged in fraudulent misrepresentation. The trial court ruled in favor of Freeman, awarding her both compensatory and punitive damages, and A Better Way appealed. The Appellate Court of Connecticut affirmed the trial court’s decision. In finding that A Better Way violated the CUTPA, the appellate court noted that A Better Way expressly represented the cost of the vehicle, that there would be additional costs for sales tax, conveyance fees, a VIN etch fee, registration, and unspecified finance charges, and that Freeman’s deposit would be returned if financing could not be obtained. The appellate court concluded that these representations implied that there would be no other mandatory charges and that a legal rate of interest would be charged www.fiada.com
and were made for the purpose of inducing Freeman to pay a substantial cash deposit. Freeman reasonably interpreted these representations to mean that her deposit would be refunded if financing could not be obtained for the vehicle at a legal rate of interest for the advertised price and only those additional charges that had been disclosed. A Better Way failed to explain that the deposit would be nonrefundable if it offered any financing on any terms, including terms that required Freeman to purchase services she did not want or to pay more than the advertised price. As further support for its finding of unfairness, the appellate court found that A Better Way violated the public policy of the Truth in Lending Act by failing to disclose the financing terms to Freeman before requiring a substantial nonrefundable deposit and violated Connecticut advertising regulations by failing to sell the car for the price advertised.
The appellate court also found that A Better Way acted unethically by requiring Freeman to either forfeit her deposit or accept financing terms that included unwanted products and services or a higher price for the car than what was advertised. Finally, the appellate court found that A Better Way’s conduct harmed consumers and competitors by drawing in customers with substantially lower prices than other dealers and then requiring customers to buy extras to ensure that A Better Way still makes a profit. Freeman v. A Better Way Wholesale Autos, 2017 Conn. App. LEXIS 287 (Conn. App. July 18, 2017) Tom (thudson@hudco.com) and Nikki (nmunro@hudco.com) are partners in the law firm of Hudson Cook, LLP. For information, visit www.counselorlibrary. com. Copyright CounselorLibrary. com 2017, all rights reserved. Single publication rights only, to the
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October 2017 — Independent Dealer — 29
INDUSTRY NEWS Most Car Owners Claim They Act on Recall Notices, But Compliance Data Suggests Far Fewer Do A recent consumer survey from Stericycle Expert Solutions found that a majority of Americans claim to take action when they receive automotive recall notices. But data from other industry sources suggests those consumers may believe they are more compliant than they actually are. The survey of more than 1,100 Americans revealed that an astounding 87 percent of respondents say they act on automotive recall notices most or all of the time. Yet NHTSA, which tracks automotive recalls more precisely based on actual automobile Vehicle Identification Numbers (VINs), found that only 61.7 percent of recalled cars get repaired, even after sending car owners multiple recall notices over 18 months. "The results suggest a discrepancy between the good intentions of automobile owners and what they actually do when they receive a recall notice," said Wayne Mitchell, Director of Automotive Solutions, Stericycle Expert Solutions. "The lesson for automobile manufacturers is to explore new communication channels for reaching consumers and to provide more convenient options for them to respond." The survey found automotive recalls rank low compared to other product segments like food and drugs,
which respondents said are their most important recall concerns. By comparison, just 21 percent of respondents ranked automotive recalls as their first or second top concern. The survey also revealed that standard recall outreach efforts may be falling flat. Just 46 percent of respondents said they had received one to four automotive recalls, while 37 percent claim they have never received a single recall notice. According to the survey findings, recall compliance rates vary by generations. Baby boomers (ages 55+) are most likely to say they respond to all or most auto recalls, with 91 percent claiming compliance, compared to just 78 percent of millennials (ages 18-34). "This is another example where communication techniques come into play," Mitchell said. "A multichannel approach – including emails, text messages, and outbound calls – has been proven to raise repair rates, and it may be even more beneficial among millennials. They are accustomed to communicating on their terms, which usually means through mobile and online digital channels. Routine recall mailers may simply end up in their junk mail pile."
Cox Automotive Promotes Exec to Senior Vice President Cox Automotive named Patrick Brennan as senior vice president of Inventory Solutions, Marketplace, following the recent promotion of Grace Huang to president of the Inventory Solutions Group. In this newly titled role, Brennan leads auction and digital operations for Inventory Solutions. Brennan most recently served as senior vice president of Logistics Solutions for Cox Automotive, improving the efficiency and client experience of Ready Logistics and Central Dispatch. Prior to that, he held positions of increasing responsibility with Cox Automotive and performed in operational and finance leadership roles for Manheim. Brennan reports to Huang. Cox Automotive is seeking a replacement for the senior vice president of Logistics Solutions. 30 — Independent Dealer —October 2017
Do you have an interesting hobby? A secret talent no one knows about? Received a special accomplishment?
Our dealers are more than just their dealerships. We want to know more about what you do when you leave the lot. Send us a photo and tell us about it. You can email your submission to us at info@fiada.com or post it on our social media pages. You could be featured in the next magazine! www.fiada.com
2016-2017 FIADA EXECUTIVE COMMITTEE:
LISA COMPAGNO President Palm Tree Auto Sales Stuart, FL (772) 288-2099
JIM WINTERICK, SR. Chairman of the Board Gulfstream Motor Credit Miami, FL (305) 253-2335
STEVE MARBAIS, CMD GEORGE HICKEY Regional Vice President Regional Vice President Bond Auto Sales, Inc. Marbais Enterprises, Inc. Ocoee, FL Tampa, FL 33604 (407) 877-7422 (813) 238-7478
CHRISTOPHER LEEDOM BRAD JOEL Secretary Treasurer AutoMaxx Splish Splash Auto Sales Sarasota, FL Princeton, FL 33032 (941) 309-1111 (305) 258-1191
BRANDI NOEGEL DINO MERCURIO Regional Vice President Regional Vice President Noegel’s Auto Sales Independent Credit, Inc. Starke, FL West Palm Beach, FL (904) 964-6461 (561) 686-8673
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FRANK FUZY Regional Vice President Century Motors of S. Fla., Inc. Pompano Beach, FL 33064 (954) 785-0369
SCOTT LANIER, CMD Senior Vice President Credit Cars Orlando, FL 32808 (407) 295-6211
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October 2017 — Independent Dealer — 31
MANHEIM FLORIDA ALWAYS NEARBY.
Manheim Daytona Beach 1305 Indian Lake Road Daytona Beach, FL 32124 386.255.2500 Sale: Wed 3 PM Total Resource Auction every Wed 2:30 PM Manheim Fort Lauderdale 5353 S State Road 7 Davie, FL 33314 954.791.3520 Sale: Fri 9 AM Total Resource Auction Tue 9 AM Ford Open Sale every other Fri Manheim Fort Myers 2100 Rockfill Rd Fort Myers, FL 33916 239.476.9800 Sale: Wed 4 PM Total Resource Auction every other Wed 3 PM Specialty Sale last Wed monthly 2 PM Galloway Direct Off Site Sale 2nd & 4th Tues 12 PM Manheim Jacksonville 10817 New Kings Rd Jacksonville, FL 32219 904.768.9981 Sale: Thurs 1 PM Total Resource Auction every Thurs 12:40 PM Manheim Lakeland 8025 N State Road 33 Lakeland, FL 33809 863.984.1551 Sale: Wed 2 PM Specialty RV/Boat Sale 1st Wed monthly 9 AM
32 — Independent Dealer —October 2017
Manheim Orlando 11801 W Colonial Dr Ocoee, FL 34761 Sale: Tues 9 AM Highline Exotic Sale Kicks off every 4th Tues 11 AM with Mercedes & BMW Chrysler Closed Factory Sale bi-weekly on Mon 12:30 PM GM Closed Sales bi-weekly on Mon 1 PM Nissan Infiniti Closed Sale 1st Wed monthly 9 AM Manheim Palm Beach 600 Sansbury Way West Palm Beach, FL 33411 561.790.1200 Sale: Thursday 9 AM Exotic Highline Sale every 4th Wed 9:30 AM Manheim St Pete 14950 Roosevelt Blvd Clearwater, FL 33762 727.531.7717 Sale: Thurs Weekly 2:30 PM inops Regular Sale 3 PM Manheim Tampa 401 S 50th St Tampa, FL 33619 813.247.1666 Sale: Thursday 9 AM Total Resource Auction Mon 9:30 AM at Cone Road location Ford Factory Sale every other Wed 10 AM Manheim Caribbean 1050 Carretera 865 KM 4.7 Bo. Candelaria Toa Baja, PR 00949 787.261.7300 Sale: Thurs 12 PM Salvage Sale Thurs 11 AM
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Manheim Central Florida 9800 Bachman Rd Orlando, FL 32824 407.438.1000 Sale: Wed 9 AM Total Resource Auction Wed 8:30 AM “Manheim Imperial Nights” Sale Tues 4 PM Specialty Heavy Truck & Equipment Sale Second Thurs Monthly at 10 AM
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