SINCE 1940
OCTOBER 2014
www.FIADA.com
A Publication of the Florida Independent Automobile Dealers Association
Information and Insight for Florida Used Car Dealers
Election Day is almost here. Make the time to cast your vote. The future of your business depends on it. Page 16.
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MAILING ADDRESS 1840 Fiddler Court Tallahassee, FL 32308 TELEPHONE (850) 385-2712 (800) 237-0448 FAX (850) 385-3251 WEBSITE www.FIADA.com E XECUTIVE COMMITTEE Dino Mercurio President Jim Winterick, Sr. Senior Vice President Christopher Leedom Chairman of the Board Phil Risley Secretary Paul Matton Treasurer Lisa Compagno Regional Vice President Frank Fuzy Regional Vice President George Hickey Regional Vice President Steve Marbais, CMD Regional Vice President Govinda Romero Regional Vice President FIADA STAFF Lisette Mariner Executive Director Terry Myers Educational Instructor Sarah Langley Administrative Director Amelia Tillman Member Services Christy Taylor Editorial/Advertising
POSTMASTER:
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FIADA • 1840 Fiddler Court Tallahassee, FL 32308 (850) 385-2712 • Toll Free: (800) 237-0448 Fax (850) 385-3251 • www.FIADA.com The Independent Dealer is a publication of: Florida Independent Automobile Dealers Association, 1840 Fiddler Court, Tallahassee, FL 32308 The magazine is published every month in Tallahassee and distributed to Florida new, used, wholesale and lease/retail car dealers. Advertising rates are available upon request. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of Independent Dealer or the Association. Likewise, the appearance of advertisers, or their identification as members of FIADA, does not constitute an endorsement of the products or services featured.
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Contents October 2014
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 Dino Mercurio
6
Executive Director’s Message Lisette Mariner
8
FIADA Town Hall Meeting is Coming Soon Plan to attend the next free educational session in January.
10
Member News
12
Unlocking the True Potential of Your Dealership The second article in a series of how to turn your Buy Here-Pay Here Dealership into a successful, growing business.
14
When Is a Sale Tax Exempt? Guidelines for when you have to collect sales tax and when you don’t.
16
Legislative Update FIADA Lobbyist Sandra Mortham
17
PAC Contributors There is still time to add your name to the list and help add to the PAC Fund.
20
Problem or Opportunity? Success is a state of mind. If you can see challenges as opportunities, then you have the advantage.
22
CFPB Proposes Rule to Allow Supervision of Larger Nonbank Auto Finance Companies Be aware of what the CFPB is proposing and how it will affect you.
24
A Look at Current Legal Issues The monthly round-up of federal and legal issues affecting auto dealers.
30
Industry News October 2014 — Independent Dealer — 3
FROM THE PRESIDENT
Cherish Your Freedom BY DINO MERCURIO, FIADA PRESIDENT
B
is a chance for you to make a difference and have your voice heard by voting for candidates you think will make our communities, our state, and our nation a better place for us, our children, and our future. Every vote counts and every vote is important. You can even take it a step further by making political donations, offering to put a sign at your dealership for a candidate you feel strongly about, or get involved in the One of the greatest freedoms we have is the campaign itself as a volunteer. One of the But, these are freedom to vote and the ability to elect people we greatest freedoms not the only feel will lead us best, but it’s not effective if you we have is the important don’t participate! freedom to vote and elections taking the ability to elect place this time people we feel will of year. October lead us best, but it’s and November not effective if you don’t participate! So this November, please will bring a flurry of activity from potential candidates on remember to get out and vote! the local, county, state, and even the federal level. We will be bombarded with print, radio and television ads until we are ready to turn blue, but I urge you to sift through the rhetoric Dino Mercurio and political speak. Do a little research on those vying for FIADA President office, get involved in the process, and get out and vote! This y the time you get to read this message, FIADA will have just wrapped up its annual convention and trade show, and a new slate of officers will have been elected to serve on the Executive Committee. They will be charged with leading your association over the next year, making sure the voice of the Independent Dealer is heard, represented and well spoken for throughout the State of Florida.
SPREAD THE WORD! Do your customers know you are an FIADA member? Use the FIADA logo in your advertising and you’ll not only gain credibility but help educate the public about FIADA membership. Need some examples? Check out Park Auto Mall’s latest commercial at their website, www.ParkAutoMall.com and Palm Tree Auto Sales’ ad online at www.palmtreecars.com. 4 — Independent Dealer — October 2014
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We’re hiring your new F&I manager. Find out when they start. Visit newFandImanager.com
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Contact Protective’s Florida representative, Chris Behrens at 866 452 7335 A “National Corporate Partner” has met stringent NIADA criteria demonstrating that it can provide valuable products and services to NIADA members. No legal partnership has been created by the granting of this status, but NIADA does receive compensation from Protective. Limited Warranty Products, Vehicle Protection Plans (VPPs) and GAP are backed by Lyndon Property Insurance Company in all states except NY. In NY, VPPs are backed by Old Republic Insurance Company, Limited Warranty Products are backed by Western General Insurance Company and GAP is not available. Credit Insurance is backed by Protective Life Insurance Company in all states except NY, where it is backed by Protective Life and Annuity Insurance Company.
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October 2014 — Independent Dealer — 5
EXECUTIVE DIREC TOR’S MESSAGE
Committee Involvement Has Big Benefits BY LISET TE MARINER, EXECUTIVE DIREC TOR
A
s we head into local, state and federal elections and close out the hurricane season, I’m reminded of our own new beginnings and ending of a season. You may not be aware but every year, during the FIADA annual meeting, the membership elects officers. Your nominating committee has put forth a wonderful slate of officers including: •
Paul Matton with Park Auto Mall (St. Petersburg) as Senior Vice President • Lisa Compagno with Palm Tree Auto Sales (Stuart) as Treasurer • Brad Joel with Splish Splash Auto Sales (Princeton) as Secretary • Regional Vice Presidents include: • Phil Risley with Cars & Credit of Jacksonville (Jacksonville), • Scott Lanier with Credit Cars (Orlando), • Chris Leedom with AutoMaxx (Sarasota), • Steve Marbais with Marbais Enterprises (Ocoee) and • Govinda Romero with Autoflex (Gainesville).
From L to R: FIADA Lobbyist Sandra Mortham, Senator Ellyn Bogdanoff and FIADA Executive Director Lisette Mariner.
I’d like to thank our President Dino Mercurio for all he’s done this past year. Dino has helped the Association in so many ways. I congratulate him as he continues his service to the industry as the FIADA Chairman of the Board and Chair of the Automobile Dealers Advisory Board. I look forward to working closely with our newly elected President, Jim Winterick, Sr. He’s ready to serve. He recently presented a PAC contribution to Representative Erik Fresen (HD-114) in Miami while FIADA Lobbyist Sandy Mortham and I presented a PAC contribution to former Senator Ellyn Bogdanoff (SD-34) at a fundraiser in Tallahassee. Help them make the association stronger. Now is the time to get involved. One way to get involved and give back is to participate on a committee. Committees meet via conference 6 — Independent Dealer — October 2014
FIADA President-Elect Jim Winterick, Sr. (Left) with Representative Erik Fresen (Right).
call and discuss new programs, current issues and explore ways to improve FIADA services. We have something for everyone. The committees include: Continued on Page 8. www.fiada.com
Y 28 DA T FLOA
SIMUL C AVAIL AST ABLE
CHECK OUT OUR WEBSITES:
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October 2014 — Independent Dealer — 7
INVOLVEMENT PAYS continued from Page 6
Membership: The membership committee is responsible for developing membership in FIADA. Member Benefits: The member benefits committee shall have the authority to recommend FIADA policy concerning all FIADA approved member benefit programs. This includes recommendation of approval of all new programs, amending or canceling current programs. Legislative: The legislative committee has the authority and duty of reviewing
the progress of legislation at the state level, making recommendations regarding legislative issues and keeping the FIADA Executive Committee informed on all legislative matters affecting the independent automobile dealer industry and FIADA. Convention: The convention committee is an ad hoc committee that is charged with reviewing educational programs, sponsorship opportunities, entertainment, theme and general assistance with the annual convention.
Your service on a committee helps the association and provides an opportunity for you to give back to your industry. Your executive committee and board of directors are made up of volunteers that give of their time and expertise. They have made a commitment to you as a member of the association. Help support these wonderful men and women by making a commitment today to serve on a committee. It really isn’t much time at all to serve on a committee. If you are interested in serving on a committee please contact me at lisette@fiada.com or 800.237.0448 ext. 100.
Friday, Nov. 7, 2014 10am-2pm ADESA Tampa 3225 North 50th Street, Tampa, FL 33619 Town Hall Meetings are absolutely FREE to attend. Don’t miss this great opportunity to network with colleagues and ask your burning questions to the experts. All attendees will be entered into a drawing for a Florida vacation getaway, valued at $600.00 sponsored by Anthony Chicklowski and Auto Auction Promotions. Lunch will be cooked onsite by Donatello’s Catering. A Special Thanks to our Sponsors:
ADESA, Anthony Chicklowski and Auto Auction Promotions, Auto Data Direct, and Donatello’s.
Get more info or register online at www.FIADA.com 8 — Independent Dealer — October 2014
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October 2014 — Independent Dealer — 9
MEMBERSHIP NEWS
New Members
SEPTEMBER 2014
101 RACING Deerfield Beach, FL Stephen Goode Sponsor: Amelia Tillman
P.A.C. Wakefield, MA George Nedder Sponsor: Sarah Langley
AAA AUTO GROUP Miami, FL Guillermo Pineda Sponsor: Amelia Tillman
RAMON PRATS Tampa, FL Ramon Prats Sponsor: Terry Myers
APOLLO BEACH AUTO Gibsonton, FL Christopher Maynard GM Sponsor: Terry Myers/Mark Bridgman
RECYCLED RIDES Brooksville, FL Mark Marcotte Sponsor: Terry Myers
BEST CARS OF MIAMI INC. Doral, FL Tony Bolanos Sponsor: Frank Fuzy/Amelia Tillman
RODERICK MCCOWN Bradenton, FL Roderick Mccown Sponsor: Terry Myers
CROWN MOTORS, INC. DBA VOILA AUTO GROUP Orlando, FL Chuck Nemeh Sponsor: FIADA.com
RODERICK SCHARBER Brandon, FL Roderick Scharber Sponsor: Terry Myers
EDDIE MERCER AUTOMOTIVE Pensacola, FL Eddie Mercer Sponsor: FIADA.com
STARS GPS Thomasville, NC Teresa Kelemen Sponsor: Lisette Mariner
IDRIVE MOTORS LLC St Petersburg, FL Pedro Carrasquillo Sponsor: Terry Myers
SUSTAINED MOTION CAR COLLECTION, LLC Fort Myers, FL Carolann Swanson Sponsor: FIADA.com
M & B GOLF CART SALES INC. Cocoa, FL Kevin McGuire Sponsor: FIADA.com
SVR TRACKING San Diego, CA Kelly Venturini Sponsor: Amelia Tillman
MOTOR THIS-MOTOR THAT LLC St Augustine, FL Ralph Valent Sponsor: Amelia Tillman
VIP AUTO GROUP INC Clearwater, FL Albert Wagner Sponsor: Kevin Scott
NUWAYAUTOFL Miami, FL Rishi Burke Sponsor: FIADA.com
ZH CAPITAL HOLDINGS Miami, FL Nelson Hincapie Sponsor: Sarah Langley
10 — Independent Dealer — October 2014
Renewing Members SEPTEMBER 2014 40+ Year Members Noegel’s Auto Sales
Starke, FL
30+ Year Members America’s Auto Auction Jacksonville Marteney Motors Parkway Auto Sales, Inc. 20+ Year Members Skipper Limited, Inc.
Jacksonville, FL Melbourne, FL Homestead, FL Graceville, FL
10+ Year Members Cars & Credit of Jacksonville Encore Motorcars of Sarasota Frontier Motors, Inc. LKQ Daytona Pick Your Part Leedom Group
Jacksonville, FL Sarasota, FL Pensacola, FL Daytona Beach, FL Sarasota, FL
Under 10 Year Members Alley’s Auto Wholesale Answer One Motors Auction Direct USA Auto Express Enterprises, Inc. Auto Plan, Inc. Car City Copart, Inc. FL Sunshine MC Parts Company, High Tech Locksmiths Mattas Motors Skypatrol, LLC Sustained Motion Car Collection, LLC The Motorcoach Store Traditional Motorsports Wholesale Auto Advisors Inc.
Jacksonville, FL Tallahassee, FL Jacksonville, FL Orlando, FL Tampa, FL West Palm Beach, FL Opa Locka, FL Miami, FL Punta Gorda, FL Doral, FL Lehigh Acres, FL Bradenton, FL Lakeland, FL Groveland, FL
Rejoining Members
SEPTEMBER 2014
VALDO AUTO SALES CORP. Miami, FL Carlos Valderrama Sponsor: Amelia Tillman
VEHICLE CLEARING HOUSE Winter Garden, FL Rick Knapp Sponsor: FIADA.com FIADA is your number one source for advice and information. Our network of industry veterans, professionals and consultants can help you find the answers you are looking for. Call us at (800) 237-0448 or go online to www.FIADA.com! www.fiada.com
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October 2014 — Independent Dealer — 11
BHPH TOPICS
Capital Needs of the BHPH Dealer, Part II Part two in a series that explains the need for Buy Here-Pay Here dealerships, and the success they can have if managed correctly. BY RUSS ALGOOD
A
dequate capital is one of the most important aspects of becoming a successful BHPH dealer. The capital needed for a BHPH operation will be substantial ranging from around $500,000 for an operation doing about 5-10 BHPH deals a month up to several million dollars for dealers doing 30 – 50 BHPH deals per month. Actual capital requirements will vary based on the average price of your cars, down payments, and the length of term on the contracts.
working capital to cover 2 months of expenses, plus 25% of the cost of your vehicle inventory to cover curtailments and inventory which is not eligible for floorplan. Floorplan lines of credit are typically used to provide the remaining capital need for inventory. The most common means of funding BHPH receivables is with a finance company or a bank. Banks are typically lower cost, however few banks provide financing for BHPH receivables and most of the banks that do, will require you have well over $5,000,000 in receivables with a long track record of successful operations and excellent financial reporting capability.
There are three major areas requiring substantial capital for the BHPH dealer. The first two, working capital needed to fund the daily operations of your dealership and the capital required for the inventory on your lot are required There are three major areas requiring for all dealerships. substantial capital for the The third and largest capital requirement BHPH Dealer. Funding daily for BHPH dealers is operations, securing to fund your contract inventory and funding receivables. Only a contract receiables. few dealers are able to handle all of their capital needs without borrowed funds. The lack of adequate A finance capital forces many dealers to sell off company is often contracts after 3-6 months aging. This the best choice practice should only be used as a last for a BHPH dealer resort because it will reduce repeat and selling 75 or fewer referral business. BHPH deals per month. Working with a finance It is recommended you have sufficient company that provides both 12 — Independent Dealer — October 2014
floorplan and contract funding, while allowing you to maintain relationships with your customers, has several advantages. One big advantage of a company that provides both is that a single company will be able to pay off the floorplan on your sold vehicle with the deal funding amount. A single source will also provide floorplan for your repossessions, in both cases eliminating the additional working capital required when using separate sources. Whether you deal with a finance company or a bank, it is important to work with a company who understands and who is committed to the BHPH business.
Russ Algood is the CEO at AMAC, a rapidly growing finance company doing business in though out the Southeast and most of Eastern seaboard of the United States. Anyone wanting more information can contact AMAC at 704-882-7100 (ext. 7509) or visit their website at. www.acemotoracceptance. com
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October 2014 — Independent Dealer — 13
S A L E S TA X
When Is a Sale Tax Exempt? Knowing when to include sales tax, and when it is exempt, can be tricky. Understand the requirements and when to collect it on your deals. BY JAMES SUT TON, CPA, ESQ.
T
he purpose of this article is to go over some of the requirements a Florida car dealer faces when attempting to comply with the sales and use tax collection and remitting responsibilities for the Florida Department of Revenue. Failure to comply with the rules can be devastating to a car dealer and the common “but I remitted every penny I collected” defense does not protect you from liability. While the Florida Department of Revenue may refer to a car dealership as a “business partner,” the Florida Department of Revenue expects the car dealer to be responsible for every mistake and missing document and the resulting sales and use taxes. In case you have not heard, the Florida Department of Revenue has a task force out against the used car dealer industry statewide based on a comparison of DMV reports to sales tax returns. If you have been in the car dealer business a long time, then you might remember that the Florida Department of Revenue used to offer local training classes to new businesses or new employees in old businesses, to make sure that they really knew how to comply with the sales and use tax laws. Unfortunately, these local training programs were cut when the state began running into budget problems in 2008. The best place to start when dealing with Florida Sales and Use Taxes is 14 — Independent Dealer — October 2014
to learn this basic rule: Every sale of tangible personal property in the state of Florida is subject to sales tax unless there is a specific exemption AND the administrative rules for that exemption must be followed to exempt (or partially exempt) the transaction from tax. The second thing you need to know is that you, as the dealer, are responsible for interpreting the law for each transaction to see if an exemption applies as well as collecting (and retaining) all the proper documentation. If the dealer misinterprets the law or does not have the right documentation, executed properly and within the correct time frames in relation to the transaction then the dealer becomes liable for the tax. Of course, the customer always wants to avoid paying the sales tax, but it is the dealer that has been given the responsibility of collecting the tax. No, this does not seem fair in the least, but this is the law that car dealers are forced to deal with. The Department of Revenue does not care in the least that you have collected hundreds of thousands if not millions of tax dollars for the state. If you make a mistake, then your company is liable for the tax. So complain as you might, if you want to stay in the business of car dealer (and avoid potential jail time for sales tax fraud), then you had better learn the ends and out of Florida sales and use tax. At this point, it is probably easiest to break things down into tax exempt, partially tax exempt, and fully taxable transactions.
TAX EXEMPT CAR SALES Every customer wants to know how to exempt the transaction from sales tax completely. Your salesmen probably want to know the same thing so they can get a competitive advantage over the dealer down the street. But, as you learned above, the business owner/ dealer is responsible for collecting and remitting any taxes that are due the state of Florida, so the “fully exempt” scenario is the most dangerous to the business owner. For this reason, a dealer should have a very rigid approval process for any transaction purporting to be tax exempt. Tax exempt transactions can be broken down into three categories: Sales for resale (to other car dealers) • in state dealer: Form DR-13 Resale Exemption Certificate • out of state dealer: follow procedures in Rule 12A-1.007(6) (b), FL Admin. Code. Sales to an exempt organization (tax exempt entity, e.g. County School Board) • Form DR-14 - Consumer’s Exemption Certificate • US Government: proof of sale to US Government (Rule 12A1.038(4)(b), FL Admin Code) Sales shipped out of state/country (not picked up by the customer locally. • Must have shipping documents proving vehicle left the state before the owner took possession and control. This applies to internet sales as well. • Preferable to have the customer sign a statement that the customer accepted delivery of the vehicle out of state (give the date and location, with a witness and notary. Sale to someone from a state with no sales tax • Fully executed Form DR-123 must www.fiada.com
be signed at the time of the sale. Beware, just because you think a transaction falls into one of these categories, it does not magically become exempt. The car dealer is responsible for not only proving that the transaction fits into one of these tax exempt categories, but also must have all the forms required by the FL DOR. We briefly mention the documentation required under each category above. PARTIALLY EXEMPT CAR SALES Sales to someone from a state with sales tax less than Florida • Fully executed Form DR-123 must be signed at time of sale • Collect the buyers home state rate up to Florida 6% • No local surtax charged Sale over $5,000.00 • The local surtax only applies to the 1st $5,000. Thereafter, only 6% state tax rate applies. Trade-in at time of sale only • value of trade does reduces the sales price of the new car for sales tax purposes FULLY TAXABLE CAR SALES • Any car sale that does not meet any of the exceptions above (including paperwork). Even if the taxpayer tells you that they will take the car out of the state the same day she buys it, the tax is due on the full price if the buyer take position of the car in Florida (presuming no other exemptions apply). Protect yourself and your company, make sure you do everything you can to educate yourself and train your employees about the rules and dangers of sales tax collection responsibilities. REVEW YOUR RECORDS FOR MISTAKES Whether you are under a Florida sales www.fiada.com
and use tax audit or not, it is a good idea to periodically have someone review your deal jackets for sales and use tax compliance. If you don’t have time to go through your records for the last three years, then pick one month from each year for review. Note what documents are missing and how you can correct your procedures
intent when you come through a Voluntary Disclosure. Yes, there are people that get arrested for as low as $4,000 of collected but not remitted sales tax in Florida and many of them seem to be used car dealers. Going through the Voluntary Disclosure and paying any collected but unremitted tax
In case you have not heard, the Florida Department of Revenue has a task force out against the used car dealer industry statewide based on a comparison of DMV reports to sales tax returns. to make sure this doesn’t happen in the future. We also recommend that you contact the DMV for a report of all the cars registered in Florida that someone indicated you sold them the car. If this seems like over kill, then you should know that each and every Florida sales and use tax auditor are trained to pull your DMV records. If you have missing transactions, then don’t you want to know it now and possibly correct whatever is causing these transactions to slip through the cracks? If you find problems with your records and possibly under reported sales, then there is a way to come clean that turns the table very much in your favor. We can help you go through a process called a Voluntary Disclosure in which you notify the Florida Department of Revenue that you have some accounting errors. We tell the DOR what was wrong and how much sales tax we need to pay. The Voluntary Disclosure has several advantages over going through an audit. • First, most, if not all penalties are waived when you go through a Voluntary Disclosure. • Second, there is a statutory presumption of no criminal
•
•
all be guarantees that the matter will not turn criminal. Third, the state rarely will conduct a full audit of your records in a Voluntary Disclosure. They usually accept the amounts that you disclosure unless they have alternative information that disputes your disclosed amounts. This means the cost of going through a Voluntary Disclosure can be much cheaper than a full audit. Fourth, there is an unwritten rule that a company that just went through a Voluntary Disclosure usually does not get selected for a full audit for a couple of years after the Voluntary Disclosure. If a company just came clean, then it would likely be a waste of the state’s resources to audit your company. This is not a guaranteed, but it is the likely result.
Mr. Sutton is a Florida licensed CPA and Attorney and a shareholder in the law firm Moffa, Gainor, & Sutton, PA. Mr. Sutton’s primary practice is Florida tax controversy, with a almost exclusive focus on Florida sales and use tax. As always, consult your CPA for tax advice as it relates to your business. October 2014 — Independent Dealer — 15
L E G I S L AT I V E U P D AT E
It’s Not A Cliché, Every Vote Really Does Count BY SANDRA MORTHAM, FIADA LOBBYIST
E
lection Day is almost here. Political ads are dominating TV. Candidate signs are staked out at every intersection and right-of-way available. It might be easy to get annoyed with the non-stop bombardment, but try to keep perspective. Voting is a coveted right for all Americans, and we should be excited about the upcoming chance to exercise it. Making your way to the polls requires effort, but the chance to put your support behind a candidate or a cause you believe in is well worth it. If you don’t think you’re vote makes a difference, consider these historical facts on the power of just one vote: 1645 One vote gave Oliver Cromwell control of England. 1776 One vote gave America the English language instead of German. 1868 One vote saved President Andrew Jackson from impeachment. 1875 One vote changed France from a monarchy to a republic. 1876 One vote gave Rutherford B. Hayes the Presidency of the United States of America. 1923 One vote gave Adolf Hitler leadership of the Nazi Party. 1941 One vote saved the Selective Service—just weeks before Pearl Harbor was attacked. 1990 One vote decided a state House race in Oakland County, Michigan. Your vote counts, so make sure you cast it! Thank you for the donations you made this year to the FIADA PAC fund. As a result of your support, we raised more than half of our goal of $30,000. As impressive as that is, it is not the time to stop. A healthy PAC fund is essential to furthering our efforts and strengthening our voice in Tallahassee. If you have not already donated, use the PAC donation form on page 19 or go online to www.FIADA.com. Let’s move the needle as far as we can before the 2015 Legislative Session begins. 16 — Independent Dealer — October 2014
In the past few months, we have distributed contributions from the PAC Fund to support legislators that are supportive of our industry and interests. Take a look at this list and use it as part of your research when deciding where to cast your vote. State Senators Sen. Lizbeth Benacquisto, SD30 Sen. Jeff Brandes, SD 22 Sen. Joe Negron, SD 32 Sen. Greg Evers, SD02 Sen. Jack Latvala, SD20 Sen. Tom Lee, SD24 Sen. Rene Garcia, SD38 Sen. Kelli Stargel, SD15 Sen. John Thrasher, SD06 Sen. Aaron Bean, SC04 Sen. David Simmons, SD10 State Representatives Rep. Kathleen Peters, HD69 Rep. Keith Perry, HD 21 Rep. Ritch Workman, HD 52 Rep. Erik Fresen, HD 114 Rep. Bill Hager, HD 89 Rep. Doug Broxson, HD 3 Non Incumbents Sen. Chris Latvala, HD 67 Rep. Scott Plakon, HD 29 Sen. Ellyn Bogdanoff, SD 34 It will be interesting to chart the results of the upcoming elections and see what happens on all levels—local, state and federal. I encourage you to get involved in the process. Making a donation, setting up a meeting with your legislator and showing support through phone calls and emails on key issues is our responsibility as United States citizens. Serve your country well by making it a priority to get out and vote. www.fiada.com
PAC CONTRIBUTIONS 56% Complete
$
$ $
,
16770 $
,
Gold Donors AutoMaxx/Leedom Group Cars & Credit of Jacksonville Century Motors of S. Fla., Inc.
Credit Cars Gulfstream Motor Credit Co.
Prime Autos Southeast Car Agency, Inc.
Florida Auto Dealer School Florida Auto Exchange & Remarketing LLC. Galeria Auto Mart, Inc. General Auto, LLC Gulfstream Motors Acceptance Corp. Mortham Governmental Consultants
Noegel’s Auto Sales Tom Bush Auto Plex Wayne Reaves Computer Systems Wheel City Florida, Inc. Xpress Finance, Inc.
Got Car Auto Brokers LLC John Rogers Used Cars Lake Park Auto Brokers MJC Classic Cars LLC Murphy’s Auto Sales Inc Palm Tree Auto Sales PCT Enterprises Of FL, LLC Premier Auto Finance Premier Motor Cars
Ray’s Motor Sales, Inc. Richard Bell Auto Sales Tallahassee Auto Auction The Garage Inc Timeless Motors Turnpike Motors Unica Auto Sales Work Auto Equipment LLC
Gold Donors ABC Autos, Inc. Bond Auto Sales, Inc. - HLD Butler Auto Recycling Buyer’s Zone, Inc. Car Credit Central Florida Auto Wholesale, Inc.
Bronze Donors ALIA Enterprises Answer One Motors Auto Data Direct Autoflex LLC BC Motor Company, Inc. Car Buying Service of Jacksonville Cassat Auto Sales Dennis LeVine & Associates, PA Don Scott www.fiada.com
October 2014 — Independent Dealer — 17
FIADA
POLITICAL ACTION COMMITTEE
A & B A/S of Jacksonville, Inc. AAA Asset Recovery Inc. ABC Autos, Inc. Ace Motors Inc ADESA A/A of Jacksonville ADESA A/A of Sarasota Adesa A/A of Tampa Alas Auto Brokers Inc. ALIA Enterprises All Bus Exchange Alley’s Auto Wholesale Alliance Inspection Mgmt. American Classic Car Sales America’s Auto Auction Jacksonville Anderson’s Affordable Auto Andrew Thomas Motorcars Angelo Auto Wholesale Answer One Motors AP Motorsales LLC Appearance Plus A/S dba C & C Cars Auction123.com Auto Data Direct Auto Express Enterprises, Inc. Auto Express South Auto Mart #1, LLC Auto Plan, Inc. Auto Sales of Winter Garden, LLC Auto Sales Zone LLC Auto Select Auto Superstore of Orlando LLC Autoflex LLC Autoline Preowned Automax AutoMaxx Automotive Fleet Enterprises Autorama Auto Sales AutoRaptor CRM Autoshopper.com Magazine AutoTrader.com Bargain Auto Sales of Lakeland, Inc. BC Motor Company, Inc. Beach Boulevard Automotive Benz Financial Services, Inc. Big O’s Northside Auto Sales BNM Enterprises, LLC Bob Oliva Motors, Inc. Bond Auto Sales, Inc. BookItOut, Inc. Braman Motorcars Bubba Hill Auto Plaza, Inc. Butler Auto Recycling Buyer’s Zone, Inc. C & L Motors
Thank you to our PAC Contributors Together we have raised $16,770 for the FIADA PAC fund and are 56% complete to our goal of $30,000. Car Buying Service of Jacksonville Car City Car Collection of Tampa Car Credit CarBucks CARFAX Cars & Credit of Jacksonville Cars Unlimited Cars.Com Carsforsale.com Car-Time, Inc. Casey’s Auto Wholesale Cassat Auto Sales Celebrity Auto Group Center State Auto Sales Inc Central Florida Auto Wholesale, Inc. Century Motors of S. Fla., Inc. CFS of South Florida Chaney’s Used Cars, Inc. Charleston Auto Auction Charlotte County RV Center, LLC Cherry Cars, Inc. Chicago Motors Inc Chuck Carlson Auto Sales, Inc. Citrus Auto Trader Cochran Motorsports Inc Cocoa Auto Dealers Exchange Copart, Inc. Cox Motors, L.L.C. Credit Cars Credit Cars USA Dealer Funding, LLC DealerCenter DEALERPLATFORM LLC Dealers Auto Auction Dealers Insurance Services, LLC Dealership Capital Partners, Inc. Dennis LeVine & Associates, PA Diamond II Auto Sales, Inc. Dick Moye Auto Sales, Inc. Dimension Motors Inc. Direct Auto Exchange, LLC Don Scott Donny Mills Auto Sales, Inc. DriveTime Sales & Finance Economy Motors Ed Cox Motor Company, Inc. Ed Tillman Auto Sales Eddie Anderson Motors LLC Eddie Mercer Automotive Edison Bridge Auto Sales Elite Autos Elite Jeeps
18 — Independent Dealer — October 2014
Encore Motorcars of Sarasota Enterprise Rent A Car Everyone Drives Auto Sales, LLC Family Auto Mart, Inc. Fett Motors, Inc. Fidelis PPM Financial Insurance Brokers International Firehouse Auto Sales First Auto Sales First Coast Auto Sales First Place Auto Sales Inc FirstSun Financial, Inc. Fleet Lease Disposal Fleet Street Remarketing Floorplan Xpress LLC Florida Auto Auction Properties dba ABC Orlando A/A Florida Auto Dealer School Florida Auto Exchange & Remarketing LLC Florida Auto Exchange Co. Florida Autosport, Inc. Florida Credit Union Florida Fine Cars Inc Foreign Affairs Auto Foreman Motors, Inc. Freeland Moore dba Harbor Nissan Frontier Motors, Inc. G & D Auto Sales Corporation Galeria Auto Mart, Inc. General Auto, LLC Genuine Motorcars, Inc. Gibson Truck World GO Financial Godby Enterprises DBA Universal Auto Sales of Plant City Golden Oldies Auto Sales, Inc. Goldstar GPS guided by Spireon Got Car Auto Brokers LLC Graham Auto, Inc. Gray’s Automotive Greenfield USA Wholesale LLC Gulfstream Motor Credit Co. Gulfstream Motors Acceptance Corp. GWC Warranty Corporation of Florida Haims Motors Inc Hermanos Auto Wholesale DBA The Car Shack HH Sales, LLC High Tech Locksmiths Holdings of South Florida, Inc. dba Automac 2
Hometown Auto Mart, Inc. Hual’s Bikes to Custom Trikes iDrive Auto Group LLC Integrated Dealer Solutions Integrity Auto Sales, Inc. International Auto Group J & J Auto Sales J.D. Byrider J.D. Byrider, Tallahassee Jason Santiago JD Byrider of Bradenton Jeffs Auto Sales and Service, LLC J-Linn Motors John Rogers Used Cars JPM Sales, Inc. Kathy’s Kars Kicklighter Auto Sales LLC Killgore, Pearlman, Stamp, Ornstein & Squires, P.A KPM Auto Exports Inc Kurkin Brandes LLP Lake Park Auto Brokers Larry’s Auto Service Center Lash Auto Sales Latin Motors Lazydays Leedom Group Lovering Auto Sales M & M Auto Sales M & W Auto Sales Macklin Automotive Co. Maher Chevrolet Mancini Automotive, Inc. Manheim Fort Myers Manheim Tampa Manheim’s Central Florida A/A Manheim’s Lakeland A/A, Inc. Marbais Enterprises, Inc. MarkOne Financial Martinez & Associates, CPAs, P.A. Maxx Motors McKinna Auto Sales Mears Motor Leasing Mears Transportation Group Melbourne Auto Mart, Inc. Miami Motorsports MicroBilt Mike Hill Used Cars, Inc. Mike Kashtan’s Superior A/S Millenia Motors, Inc. Millennium Motors MJC Classic Cars LLC Mobility Freedom, Inc. www.fiada.com
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POLITICAL ACTION COMMITTEE
Skipper Limited, Inc. Snider’s Truck & Auto Sales South Florida Car Buyers South Side Kia Southeast Car Agency, Inc. Southeast Fleet Auto Sales, Inc. Southside Autos, Inc. Spanos Imports Splish Splash Auto Sales, Inc. Stepanek’s A/S & Service, Inc. Sterling Credit Corporation SUN FINANCIAL HOLDING LLC. Systems 2000 Tallahassee Auto Auction Tallahassee AutoFinance dba Gary Moulton Auto Cent Tallahassee Salvage, Inc. The Auto Source, Inc. The Auto Village LLC The Car Connection West The Garage Inc The Pinnacle Group The Surety Group The Wholesale Club, Inc aka Target Auto Brokers Timeless Motors
Parkway Wrecker Service PassTime PCT Enterprises Of FL, LLC Ponce Used Cars, Inc. Port Motors, Inc. Premier Auto Finance Premier Motor Cars Prime Autos Pro-Power Auto Sales Company R & L Auto Wholesale Ray Whitts Used Cars Ray’s Motor Sales, Inc. Refine Coach Inc. RFJ Enterprises LLC Richard Bell Auto Sales Riker’s Auto Financial Roney Auto Sales RTG Auto Sales, LLC Sanfer Sports Cars, Inc. Sanford Auto Dealers Exchange Sanmi Auto Express Santa Fe Power Sports Sensible Auto Lending Sharp Deal Automobiles Corp. Showcase Auto Brokers USA, Inc. Sides Cars-Trucks
Mobility Styles Inc Mortham Governmental Consultants Motorcar Gallery, Inc. Murphy’s Auto Sales Inc National Auto Lenders, Inc. National Dealer Services Nationwide Southeast LLC Next Car, Inc. NextGear Capital Nice Car, Inc. No. 1 Auto Sales, Inc. Noegel’s Auto Sales Ocean Auto Sales of Miami, Inc. Off Lease Only Orange County Motors, Inc. Orange Sports Center, Inc. Orlando Lawn Trucks LLC Outdoor Recreation World, Inc. Owl Automotive Group Inc P.A.C. Palm Tree Auto Sales Paradise Auto Brokers, Inc. Paragon Auto Sales, Inc. Park Avenue Motors Park Motors, Inc. Parkway Auto Sales, Inc.
Tom Bush Auto Plex Tomlinson Motor Company Top Car Sales Toy Store Traditional Motorsports Turnpike Motors Ultimate Image Auto, Inc. Ultimate Motorcars of Florida, Inc. Unica Auto Sales United Acceptance, Inc. United Auto USA Corp UsedCars.com by Dealix Van’s Cars & Trucks Veneauto Cars VIP Auto Sales Waterfront Auto Sales, Inc. Wayne Reaves Computer Systems Wheel City Florida, Inc. Wholesale Auto Advisors Inc. Williams & Stazzone Insurance Agency, Inc. Wise Way Auto Sales, Inc. Wolters Kluwer Financial Services Woodall Auto Wholesale, Inc. Work Auto Equipment LLC Xpress Finance, Inc. Your Auction of Tampa Bay
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October 2014 — Independent Dealer — 19
BUSINESS BASICS
Problem or Opportunity? Customers are holding on to their vehicles longer, but that doesn’t have to be a bad thing for auto dealers With the right prospecting, leads can be found in a variety of places. BY JAY PRASSEL
O
ne of the advantages of working with dealers around the country, is there are always new challenges and solutions being discussed. A recent Polk Study said the average age of all light vehicles on the road now stands at a record high of 11.4 years. It was 11.2 years last year and in 2002 it was 9.8 years. It has continued to rise in age for 11 consecutive years. “These are interesting times for the automotive aftermarket,” said Mark Seng, vice president of Polk’s aftermarket practice. “Customers from independent and chain repair shops should be paying close attention to their business plans and making concerted efforts to retain business among the do-it-for-me audience, while retailers have a unique and growing opportunity with potential consumers wrenching on their own vehicles.” Americans are holding onto cars and light trucks longer for economic reasons, particularly since the recession, and because vehicles are engineered and assembled to last longer, analysts say. This may seem like a problem for the retail auto industry, but it also presents some great opportunities. If you have a service center, these are potential customers as they have to maintain and repair these older, higher mileage vehicles.
20 — Independent Dealer — October 2014
For the sales department, this is a great source of prospects as at some point they will have to replace their vehicle as opposed to repairing it. The most prevalent prospecting resource in today’s automotive industry is the Internet. Automotive websites abound and provide information and dealership inventory specifics to the potential retail buyer. Manufacturers and individual dealers alike compete for “ownership” of the elusive “Internet lead.” Response time, the information provided to the consumer, and the ability to meet and exceed the consumer’s expectations, typically determine who wins the “ownership” competition. Nearly 100 percent of today’s retail automotive prospective buyers will research their purchase using the Internet (and most of them will do this before they ever set foot in a dealership showroom). Automotive manufacturers and their finance entities represent another valuable source of prospecting resources. Manufacturer retail consumer leasing agreements are maintained in computer space, and reports of pending lease terminations are a valuable prospecting tool. Pending lease terminations produce the necessity for a vehicle owner to make a replacement vehicle purchase decision and thus they become a very viable prospect. In today’s automotive environment, with numerous manufacturers having
been closed, the number of “orphaned owners” has escalated dramatically. Automotive manufacturers and state licensing offices possess names and addresses of retail vehicle buyers who have been displaced by the closing. These are valuable prospective customer names for retail dealerships. Current dealership service customers are also good prospects. Successful dealerships utilize their vehicle service history records to identify customers with high mileage or recent high vehicle service expenses. Once identified, dealership sales personnel initiate contact to determine if service customers are actually new vehicle prospects. In addition to the potential prospective customer resources noted above, a recent vehicle buyer referral is a valuable prospecting tool. Many sales consultants mistakenly avoid asking for referrals from a recent vehicle buyer, often because they have had limited success asking in the past. This is one area where past history will not determine future events. Each vehicle buyer should be asked if they have friends, family or neighbors who are currently considering a vehicle purchase. An existing customer is your best reference for a potential customer. Combining effective customer prospecting tools with effective showroom floor management tools is the winning formula for increasing dealership traffic and ultimately, increasing vehicle sales. Ask your management team: are we average, below average or above the industry average? Jay Prassel of Premier Performance Group, LLC is a national trainer and consultant who has worked for over 38 years helping dealers achieve net profit improvement. Contact him at 847.910.1681 or Jay@ Prassel.com www.fiada.com
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October 2014 — Independent Dealer — 21
F E D E R A L U P D AT E
CFPB Proposes Rule to Allow Supervision of Larger Nonbank Auto Finance Companies The Consumer Financial Protection Bureau expands its jurisdiction on automobile leases and seeks input on proposed rule.
O
n, September 17, 2014, the Consumer Financial Protection Bureau proposed a rule to allow it to supervise certain nonbank auto finance companies. The proposed rule brings new oversight to larger nonbank auto finance companies who are not affiliated with larger depository institutions. Affiliates of depository institutions with assets over $10 billion became subject to CFPB supervision on July 21, 2011. What Types of Transactions are Covered? The CFPB rule will cover non-bank companies engaged in extending credit for the purpose of purchasing an automobile or in leasing of automobiles to consumers. The proposed rule also covers companies that purchase automobile finance credit or lease transactions. The definition would cover both direct loans and retail installment sales transactions by dealers. Notably, the Bureau exercised (for the first time) its authority to expand the scope of products covered as “financial products or services” by adopting a broad definition of covered leases. The general definition of leases covered by Bureau jurisdiction in the Dodd-Frank Act is limited to leases that are “the functional equivalent of purchase finance arrangements.” Most closed-end auto leases do not result 22 — Independent Dealer — October 2014
in lessee ownership of the vehicle without exercise of a purchase option, and are therefore not the “functional equivalent” of a purchase. The Bureau has expanded automobile leases covered by its jurisdiction by adding leases that federal rules permit banks to enter into. A bank may enter into a lease so long as the consumer is responsible for maintenance, upkeep, insurance and registration and the bank expects to recover its investment, plus a return, through a combination of lease payments and the residual value of the vehicle. The proposed rule excludes auto dealers who are otherwise exempt from CFPB jurisdiction and also excludes buy-here-pay-here dealers (i.e., dealers who fall under CFPB jurisdiction because their consumer paper “is not routinely assigned to a nonaffiliated third party finance or leasing source”). For the purposes of supervision, the Bureau will cover the related finance companies of BHPH dealers if they meet the transaction volume criteria for larger participants. The proposed rule appears to cover portfolio purchases that are not directly related to the purchase of individual vehicles, although it does exclude “investments in asset-backed securities.”[1] For purposes of the proposed rule, an “automobile” is defined as “any
self-propelled vehicle primarily used for personal, family, or household purposes for on-road transportation. The term does not include motor homes, recreational vehicles (RVs), golf carts, and motor scooters.” The proposed rule covers refinancing of automobile purchase and lease transactions, as well as purchases of those refinance transactions. The proposed rule does not reach non-purchase transactions secured by a vehicle, such as an auto title loan, unless that loan is used to refinance an existing purchase money transaction. Who is Covered? If a company enters into or purchases the covered transactions described above, it will be deemed a “larger participant” and be subject to CFPB supervision if “annual originations” exceed a threshold of 10,000 transactions per year. The term “annual originations” includes both new transactions and purchases of existing transactions. All transactions of affiliated companies are aggregated for purposes of the transaction count. The CFPB estimates that the proposed rule will cover 38 companies, and roughly 91% of the transaction volume and 7% of the number of participants in the nonbank vehicle finance market. What Does “Supervision” Mean? The Dodd-Frank Act gave the CFPB authority to supervise “larger participants” in consumer financial markets as defined by rule. The Bureau can oversee larger participants’ activity to ensure compliance with federal consumer financial laws. These laws include the “enumerated consumer laws,” such as the Truthin-Lending Act and the Equal Credit Opportunity Act, as well as the more general powers of the Bureau to police unfair, deceptive, and abusive acts and practices. Continued on Page 26. www.fiada.com
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October 2014 — Independent Dealer — 23
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 Have you named a compliance officer yet? With all the increased emphasis on compliance in the F&I process, it’s high time you did. And hiring’s just the first step. Unless you can find someone who actually has compliance training (and good luck with that), you’ll need to arrange for training. After training, the compliance officer will need to build a compliance program. We’ve written several articles on how to go about doing that – if you want a copy of the articles, just email us. FEDERAL DEVELOPMENTS CFPB Hits the Road The CFPB will be holding a field hearing on auto finance on September 18, 2014 in Indianapolis, Indiana. The hearing will feature remarks from Director Cordray, as well as testimony from consumer groups, industry representatives, and members of the public. The event is open to the public, but RSVP is required to attend. A livestream of the event will also be available. We think it is likely that the Bureau’s release of its “larger participant rule” for auto finance companies will be timed to coincide with the event. Finance Company Tagged for Providing Inaccurate Information On August 20, the CFPB announced that it ordered First Investors Financial Services Group Inc., a mostly subprime auto finance company, to pay a fine of $2.75 million for allegedly providing inaccurate information about its customers to credit reporting agencies. The CFPB found that when FIFS discovered that it was furnishing inaccurate information to the credit reporting agencies, it notified the 24 — Independent Dealer — October 2014
vendor, but did nothing more. According to the CFPB, FIFS did not fix the flaws in the computer system that was providing the inaccurate information or take any steps to correct the inaccurate information it had furnished. The CFPB alleged that FIFS continued to use the flawed system for years after discovering the problem. FIFS allegedly provided inaccurate information about consumers’ payments, overstated the amount by which consumers were past due on their accounts, inaccurately reported the date of first delinquency, inflated the number of times consumers were delinquent on their accounts, and reported that consumers’ vehicles were repossessed when they were actually voluntarily surrendered to the lienholders. CFPB Tackles Servicemember Abuses On August 14, the CFPB announced that it obtained a consent order with USA Discounters, Ltd., a company that operates a chain of retail stores near military bases and offers financing for purchases. USA allegedly tricked thousands of servicemembers into paying fees for legal protections servicemembers already had and for certain services that the company failed to provide. Specifically, servicemembers making purchases from USA were required to pay a $5 fee for a company called SCRA Specialists LLC to be their representative with respect to their rights under the Servicemembers Civil Relief Act. USA portrayed SCRA Specialists as an independent representative that would be available to receive notices of lawsuits filed by USA, inform USA of a change in a servicemembers’ address, and verify servicemembers’ military status. The CFPB alleged that SCRA
Specialists’ services were unfairly and deceptively marketed by USA and that many of the services were never actually performed. Under the settlement, USA will provide over $350,000 in restitution to servicemembers who paid the $5 SCRA Specialists fee and will pay a $50,000 penalty to the CFPB’s Civil Penalty Fund. LITIGATION Dealership’s Reporting of Car It Sold to Buyer as Stolen Could Constitute Adverse Action under Equal Credit Opportunity Act: A woman bought a car from the dealership where she worked. After a dispute arose as to whether she had paid the entire down payment, the dealership bought the contract back from the finance company and filed a police report for theft of the vehicle. The buyer sued the dealership and its owner for violating the Equal Credit Opportunity Act by failing to provide her with a notice of adverse action. The federal trial court refused to dismiss the complaint. First, the court found that there was a genuine issue of material fact as to whether the dealership was a creditor under ECOA since the dealership extended credit to the buyer and then assigned the contract to a finance company. Next, the court found that a genuine issue of material fact existed as to whether the dealership took adverse action against the buyer because, according to the court, in order to report the vehicle as stolen, the dealership would have had to revoke or modify the extension of credit, which would constitute adverse action. The court also found that a genuine issue of material fact existed as to whether the dealership gave oral notice of adverse action to the buyer. See Simmons v. www.fiada.com
are interested in it is not grounds for the exercise of personal jurisdiction.” See Corigliano v. Classic Motor Inc., 2014 U.S. Dist. LEXIS 97556 (D.N.J. July 17, 2014). In the other case, a Nebraska resident bought a Mustang Continued on Page 26.
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Courts Address Jurisdiction over Outof-State Car Dealers: Two cases we report on this month discuss the issue of a court’s jurisdiction over out-of-state car dealers. In one case, a New Jersey resident bought a convertible from a California dealer. He viewed the car in California, signed documents in California, and wired the purchase price to the dealership in California. Later, he sued the dealership and its owner for fraudulent representations in federal court in New Jersey. The court dismissed the complaint for lack of personal jurisdiction. The court found that the defendants’ only contacts with New Jersey were that the dealership contacted the buyer in New Jersey by phone and/or email and provided photographs to him via the Internet. The court found that such limited communications were insufficient to confer specific jurisdiction over
the defendants. As for general jurisdiction, the court found that print advertisements in national publications do not constitute “continuous and systematic” contacts and that “a passive website that does little more than make information available to those who
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Expo Enterprises, Inc., 2014 U.S. Dist. LEXIS 97777 (M.D. La. July 18, 2014).
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October 2014 — Independent Dealer — 25
LEGAL ROUND-UP continued from Page 22
after seeing the car on the website of a North Carolina company. After a series of emails and phone calls, the buyer bought the car for purposes of presenting the vehicle at auto shows in Nebraska. The buyer never travelled to North Carolina to see the car; instead, the seller arranged for a shipper to deliver the car to Nebraska. After determining that the car was not show quality, the buyer sued in Nebraska. The Nebraska trial court awarded a default judgment to the buyer, and, as required by North Carolina law, he filed a “Docketing of Foreign Judgment” in a North Carolina trial court to enforce the judgment. The North Carolina trial court found that the seller did not have sufficient minimum contacts with Nebraska necessary for a Nebraska court to have personal jurisdiction. A North Carolina appellate court reversed. While the seller’s actions were insufficient for general jurisdiction, appeals court found that the conduct was sufficient for a Nebraska court to exercise specific jurisdiction. The appellate court noted that although no one from the selling company physically entered Nebraska, it intentionally directed actions towards Nebraska by advertising on websites accessible to Nebraskans, negotiating with the buyer over several days, receiving the buyer’s payment from Nebraska, and shipping the car to Nebraska. See Meyer v. Race City Classics, Inc., 2014 N.C. App. LEXIS 810 (N.C. App. July 29, 2014). Tom (thudson@hudco.com) and Nikki (nmunro@hudco.com) are partners in the law firm of Hudson Cook, LLC. (410) 865-5411 or www. counselorlibrary.com.
CFPB RULE continued from Page 22
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In the exercise of its supervisory powers, the Bureau generally begins by asking a company to provide substantial information and documentation in advance of a visit by Bureau examiners. Those examiners then spend significant time at the company, reviewing company records, interviewing employees and testing transactions. An examination can lead to various levels of confidential supervisory action, including imposition of orders to cease violation of federal consumer financial laws and provide consumer redress, and may also lead to a public enforcement action. What are the Next Steps? If the rule is finalized, the proposal would be the Bureau’s fifth larger participant rule. Prior rules involved markets for money transmitters, student loan servicing, debt collection, and consumer reporting. After the comment period of 60 days from publication in the Federal Register, the Bureau may take three to 6 months to process and prepare a response to all of the significant comments it receives. Those responses are published with the final rule. Once a rule is final, it usually takes effect a month or more after it is published, and the Bureau is usually prepared to send initial examination letters to some market participants in days or weeks after the rule is effective. Comments on the proposed rule may be submitted through the website at www.regulations.gov for 60 days after its publication in the Federal Register. [1] Since the supplemental material indicates that the Bureau does not intend to cover securitization of auto finance transactions, the draft rule will require fine tuning to exclude all the intermediary parties who “own” those transactions in the process of a securitization, and possibly also the special purpose entity who holds title in a securitization. www.fiada.com
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October 2014 — Independent Dealer — 27
28 — Independent Dealer — October 2014
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October 2014 — Independent Dealer — 29
INDUSTRY NEWS
CarMax Auctions Shows Off New Look and Thanks Wholesale Customers Throughout the month of October, CarMax Auction sites will host catered meals and provide giveaways to dealers to thank them for their business. CarMax Auctions will open its newest facility in the Portland area at 13750 SE Johnson Road in Milwaukie on October 20. With more than 60 locations, CarMax Auctions offer dealers a fast and efficient auction process; a wide selection of makes and models that range in year, mileage and condition; and several payment options. CarMax has sold more than three million wholesale vehicles since 1996. The CarMax Auctions website provides a sneak-preview of vehicle inventory with photos, along with free Auto Check vehicle history reports on every vehicle. Wholesale customers also can receive email alerts when specific vehicles become available. All this information and the registration process can be found at carmaxauctions.com, as well as more information on Customer Appreciation Month. CarMax was founded more than 20 years ago to fundamentally change the way car buying is done. The company makes the process more ethical, fair and transparent by offering a no-haggle, no-hassle experience and an incredible selection of CarMax Quality Certified vehicles. CarMax Auctions prides itself on doing business with the same integrity and transparency.
Mobile Website Leads Lead to Greater Social Media Sharing of Vehicle Information Auto shoppers using a smartphone are more likely to share vehicle information on social media when they have a satisfying online experience with an automotive manufacturer (OEM) or third-party automotive site, according to the J.D. Power 2014 Automotive Mobile Site Study. The study, now in its third year, has been redesigned to capture details on content and tool usage while measuring what content is most effective on OEM and thirdparty automotive websites on a smartphone during the vehicleshopping process. The study examines website usefulness across four key measures (in order of importance): information/content, navigation, appearance and speed. Satisfaction is calculated on a 1,000-point scale. One-third (33%) of shoppers say they “definitely will” share vehicle information via social media after an exceptional experience (overall scores of 901-1,000), compared with only 3 percent of shoppers after a poor experience (scores of 500 and lower). Among shoppers using an OEM or third-party automotive website, 45 percent say they either “probably will” or “definitely will” share information via social media about a vehicle they researched. “When vehicle shoppers have a positive experience on an OEM or third-party site, they are more likely to share the content they find useful or interesting with others,” said Arianne Walker, senior director,
automotive media & marketing at J.D. Power. “This provides auto brands a great opportunity to get their content out in front of consumers through social media. The challenge is not only having great content to encourage sharing, but also ensuring that consumers have an outstanding experience no matter what site they are accessing on their smartphone.” KEY FINDINGS • Shoppers who share vehicle information on social media are more likely to share imagery, such as exterior images (48%), interior images (42%) and videos (40%) than other less visual content, such as payment/lease (18%) or dealer information (25%). • Use of videos, interior 360° and exterior 360° tools has a significant positive impact on satisfaction among smartphone shoppers when researching how a vehicle looks on both OEM and third-party websites. • When researching vehicle information shoppers who access an OEM website on a smartphone are much more likely to use a build and price tool (43%) than those who shop on third-party sites. (30%). However, vehicle shoppers accessing a third-party website on a smartphone are more likely to use an inventory search tool (36%) than those on an OEM site (32%). • The largest gap (90 points) in satisfaction between OEM (806) and third-party sites (716) is in appearance of the website.
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2013-2014 FIADA EXECUTIVE COMMITTEE:
DINO MERCURIO President Independent Credit, Inc. West Palm Beach, FL (561) 686-8673
JIM WINTERICK, SR. CHRISTOPHER LEEDOM PHIL RISLEY Senior Vice President Chairman of the Board Secretary Gulfstream Motor Credit AutoMaxx Cars & Credit of Jacksonville Miami, FL Sarasota, FL Jacksonville, FL (305) 253-2335 (941) 309-1111 (904) 616-4074
LISA COMPAGNO Regional Vice President Palm Tree Auto Sales Stuart, FL (772) 288-2099
FRANK FUZY Regional Vice President Century Motors of S. FL Pompano Beach, FL (954) 785-0369
GOVINDA ROMERO Regional Vice President Autoflex LLC Gainesville, FL (407) 468-9974
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STEVE MARBAIS GEORGE HICKEY Regional Vice President Regional Vice President Marbais Enterprises, Inc. Bond Auto Sales Ocoee, FL Tampa, FL (407) 877-7422 (813) 238-7478
PAUL MATTON Treasurer Park Auto Mall Pinellas Park, FL (727) 639-1112
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October 2014 — Independent Dealer — 31
Manheim Caribbean Subasta De Autos Bo. Candelaria Carretera 865 Km 4.7 Toa Baja, PR 00949 Phone: (787) 261-7300 Sale Day - Thursdays 11:30am
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General Motors Closed Factory Sales bi-weekly on Monday at 1:00 p.m.
Palm Beach Nights, Mondays, 4:00 p.m.
Toyota & Lexus Sell-A-Thon every other Thursday at 4:00 p.m.
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Total Resource Auction every Thursday 11:00 a.m.
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32 — Independent Dealer — October 2014
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