SEPTEMBER 2017
www.FIADA.com
Information and Insight for Florida Used Car Dealers
S P I G H N S I N D L O D I I L T U I B ELA BU R AT ESS TH UCC S
ut bo eas a n id ee are e b h h s ha r to s ect t A ff e IAD eth at a u? F , o h g ars rs to ms t elp y e le h 5 y be r 7 em prob that e v es r o g m lve Fo ngin p so w do l bri d he y. Ho an ustr ind e 4. g Pa
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September 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
Sponsor:_____________________________________
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q New Mbr q Associate Mbr
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code of ethics and FCC Consent. Principal Contact:__________________________________ Signature:________________________________________
Payment Method: q Check (made payable to FIADA)
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Card Number:_________________________________________________ Expiration Date:____________CVV:_________ I authorize FIADA to charge my credit card listed above. Name on Card:_____________________________________________________________________________________
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Years in business?__________ Licence# ______________________
FCC Communications Consent: I understand that by providing my mailing address, email address, telephone number and fax number, I consent to receive valuable and timely communications via mail, parcel, email, telephone, text and/or fax from or on behalf of the Florida Independent Automobile Dealers Association (FIADA). This consent shall remain in effect until FIADA receives written revocation signed by an authorized representative.
2 — Independent Dealer —September 2017 | www.FIADA.com | Florida Independent Automobile Dealers Association, 1840 Fiddler Court,www.fiada.com 800.237.0448 | Fax: 850-385-3251 | Email: info@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
Contents September 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
Membership News
10
Back to Basics Terry Myers reminds you that the "As-Is" shield has its limitations.
12
Top 10 Things to Know Dissecting the "As-Is" disclaimer.
Brandi Noegel Regional Vice President
14
NIADA Legal/Regulatory Update Shaun Peterson
FIADA STAFF Lisette Mariner, CAE Executive Director
15
The Good Times Are Almost Here! FIADA is making big plans for the Annual Convention. You won't want to miss the big event.
18
Using a Script Versus Having A Conversation The Telephone Doctor Nancy Friedman is a keynote speaker at the FIADA Annual Convention. Get a preview of what she has to say.
20
Digital Marketing Will Not Replace Human Interaction Digital Marketer Kenny Atcheson says while important, digital advertising cannot be the only strategy.
22
What to Do When You Receive a Towing and Repair Lien Notice Attorneys Dennis LeVine and Kelley Kronenberg discuss the steps to take when you receive this time-sensitive notice.
24
How to Maximize Gross Profits on Auction Cars Three essential steps to acquiring vehicles "on the money."
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
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
Terry Myers Educational Instructor Jason Berthiaume Education and Marketing Manager Victoria Sams Membership Manager Christy Taylor Editorial/Advertising
POSTMASTER:
Send address changes to
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.
www.fiada.com
Correction We apologize for the misspelling of Williams & Stazzone Insurance Agency, Inc. in last month's "Keys to Insurance" article by David Metcalf. Williams & Stazzone Insurance Agency, Inc. is a FIADA Preferred Partner. Find out more about them at www.WSIns.com. September 2017 — Independent Dealer — 3
FROM THE PRESIDENT
Building Relationships Will Build Your Success BY LISA COMPAGNO, FIADA PRESIDENT
A
re your legs tired? Cause you’ve been running through my mind all day. Ah, cheesy pick-up lines. One of the first ways we try to start a new relationship. Our relationships not only shape the way our personal lives evolve but our business lives. This is especially true in the car business. Of course, our lifeblood is based on the relationships we build and maintain with our customers. But, it is also critical to build relationships with your employees, other dealers, vendors, subcontractors, auctioneers, auctions, the local community (including your local tax collector and DMV offices), and your local, state and federal representatives. It is these relationships that make the day-to-day operation of your business run smoothly and life so much easier when issues arise, and we all know issues will arise. I can tell you from personal experience that without nurturing these relationships you will lose battles throughout the course of running your business that either should not have been a battle or should have been won. For instance, recently we bought a vehicle after doing our homework and checking the vehicle’s history for accidents, structural damage brands etc. The vehicle history report was clean. About a month after we purchased the vehicle the history report started showing structural damage. Had we known about the structural damage brand, we never would have purchased the vehicle. Additionally, with the brand, the vehicle’s value depreciated and the lenders we use are not likely to finance such a vehicle. We had the vehicle inspected and could find no signs of structural damage. So, we filed a data correction request with the vendor to have the structural damage brand removed. This got us no where. We then contacted our local vendor representative. She put us in touch with someone at corporate who was not very helpful; nor was the next corporate person we spoke with. Finally, I realized I had a relationship with someone else at corporate who I had met at several of our association conventions and that she was definitely in a position to help. So I reached out to her. Now we are working on a joint resolution to the issue. I could have saved us weeks of headaches, frustrating phone calls and lost opportunities to sell this vehicle had I remembered this relationship.
4 — Independent Dealer —September 2017
This is just the latest example of how the relationships we’ve built in our business have helped us become, and stay, successful. This is also the latest example of how being a member of the association has helped our business. Now, you didn’t think you were going to get through one of my articles without me mentioning the benefit of membership, did you? Another way the association helps us to build relationships is by supporting and visiting our local, state and federal political and administrative leaders. At the end of September, the NIADA is hosting its National Policy Conference in Washington, D.C. All NIADA members are welcome to attend. That includes you! The best way to attend is to let the FIADA know that you will be going so that we can coordinate meetings with our federal legislators from Florida. Last year, FIADA delegates met with Senator Marco Rubio’s office, Congressman Gus Bilirakis’ office and several others. As a group, the NIADA, had presentations from the CFPB and the Department of Labor. This is a great event and one that is well worth your time. For more information about the event visit the NIADA’s website at www.niada.com and go to the Events tab. There is that old adage: “It’s not what you know. It’s who you know.” I used to hate it when people said that to me. But, this was back when I lived in the sterile world of academia where “what you know” seemed to be more important than “who you know.” Looking back, however, I can see where who I knew was equally as important as what I knew. Now, with many years of the “real world” under my belt, I’ve come to believe that what you know, while important, does come in second to who you know. Knowing the right person is critical. We, as an association, want to help you with this critical task. Put us to work for you and build those relationships. Lisa Compagno FIADA President
www.fiada.com
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September 2017 — Independent Dealer — 5
EXECUTIVE DIREC TOR’S MESSAGE
Changing of the Guard BY LISET TE MARINER, CAE, EXECUTIVE DIRECTOR
A
s we prepare for a changing of the guard, I wanted to say thank you to those that have served the FIADA faithfully this year. The FIADA board is an amazing group of dedicated individuals that give of their time, expertise and financial support to the industry and the Association. It has been a pleasure working with each of you! Lisa has done an outstanding job as our President, representing the industry. She was recently elected to serve on the NIADA Officers Council. She will begin her duties at the upcoming Policy Conference in DC. We are so proud and lucky to have her on our team. At the convention in October members will elect a new Executive Committee. The slate of officers will be presented at the member meeting on October 6. If you’ve not registered to attend the convention be sure to use the registration form on page 17 or online at www.FIADA.com/convention. The 2016 NIADA Quality Dealer, Scott Lanier, CMD will serve as FIADA President and I am looking forward to his leadership. If you’re interested in participating in a committee, let me know. Simply send an email to me at lisette@ fiada.com expressing your interest in serving and which committee. The first committee conference calls will be in November/ December. See you in Orlando! 2016-2017 Board of Directors Lisa Compagno, President Dennis Cook, Board Member William Fenton, Honorary Life Director Frank Fuzy, Regional Vice President & Past President George Hickey, Regional Vice President & Honorary Life Director Brad Joel, Treasurer Jim Kagiliery, Past President Gary Kees, Past President & Honorary Life Director Scott Lanier, Senior Vice President Christopher Leedom, Secretary Earl Lewis, Past President Steve Marbais, Regional Vice President & Past President John Mercurio, Honorary Life Director
Thomas D. Mercurio, Past President Peter Mercurio, Honorary Life Director Ralph Mixon, Honorary Life Director W.C. Morrison, Honorary Life Director Ray Morrison, Honorary Life Director Brandi Noegel, Past President Jenay L. Rhoads, Board Member Phil Risley, Board Member Don Scott, Past President & Honorary Life Director Ellis Warren, Past President & Honorary Life Director Ellen Westpfahl, Board Member James Winterick, Sr. Chairman & Past President Jeff Zupec, Board Member
2017 Committee Chairs: Brad Joel, Audit Dennis Cook, Convention Jim Winterick, Sr, Ex-Officio Presidents
Ellen Westpfahl, Member Benefits Scott Lanier, Membership Dino Mercurio, Legislative
Slate of Officers (to be voted on October 6, 2017): Chairman: Lisa Compagno President: Scott Lanier, CMD Senior VP: Brad Joel Treasurer: Phil Risley 6 — Independent Dealer —September 2017
Secretary: Jenay Rhodes Regional VPs: Frank Fuzy, George Hickey, Steve Marbais, CMD, Brandi Noegel, Jim Winterick, Sr. www.fiada.com
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September 2017 — Independent Dealer — 7
MEMBERSHIP NEWS
New Members
AUGUST 2017
#1 AUTO RESELLERS, INC Miami, FL Said Wiggins Sponsor: flhsmv.gov
DUNN-RITE AUTO GROUP Longwood, FL Daniel Dunn Sponsor: Terry Myers
2 GUYS AUTO SALES Pensacola, FL Carl Stark Sponsor: FIADA.com
E & M PLUS, LLC Ocala, FL Evert McClellan Sponsor: FIADA
AUTO NETWORK INC. Pensacola, FL Mehdi Mikhchi Sponsor: FIADA
EBENEZERS MOTORSPORTS Plant City, FL Darris Barney Sponsor: Kevin Scott
AUTOMOTIVE CAPITAL SERVICES Addison, TX Stephen Starks Sponsor: FIADA DEALER PROFIT PARTNERS Riverview, FL Kelly Ream Sponsor: John Cousins
ELITE TRUCK SALES Cape Coral, FL Jorge Antunez Sponsor: Hutchinson Systems Inc ENHANCED CUSTOMS Largo, FL Frank Froelich Sponsor: Terry Myers
Renewing Members
DWAYNE GOLDEN Palm Bay, FL Sponsor: FIADA HARBOR CITY A/S INC W. Melbourne, FL Donald Poussard Sponsor: FIADA NORMAN HICKMORE Stuart, FL Sponsor: Terry Myers
MAGIC IMPORTS OF GAINESVILLE, INC Gainesville, FL Sam Tajali Sponsor: Dealers Auto Auction MENGAR AUTOMOTIVE FINANCE SOLUTIONS Miami, FL Stephanie Garcia Sponsor: Equifax
DEON JOUBERT Boca Raton, FL Sponsor: Terry Myers
PENSACOLA AUTO DEPOT Pensacola, FL Stephen Pearce Sponsor: FIADA
LUXURY AUTO MALL INC Miami, FL Jabran Malik Sponsor: Amelia Tillman
RALPHS PLACE Fort Pierce, FL Ralph Fogg Sponsor: Independent Dealer
LUXURY CAR GURUS LLC Jacksonville, FL Jason Durand Sponsor: FIADA
SONY RAYMOND Tampa, FL Sponsor: FIADA
RHAU ENTERPRISES, INC Miami, FL Barbara Rhau Sponsor: FIADA
THE AUTOBARN Palatka, FL Paul Goldberg Sponsor: Dealers Auto Auction
ROADWAY MOTORS LLC West Park, FL Luis Ramos Sponsor: FIADA
VCFS Rockleigh, NJ Tony Nicolosi Sponsor: Rob Sickles
START AUTO FINANCE Holywood, FL Sobhan Arafa Sponsor: FIADA
VIGGEN AUTOMOTIVE PERFORMANCE Vero Beach, FL Gary Hilberer Sponsor: Kevin Scott
SUNDOWN AUTO LOGISTICS Miami, FL Giancarlo Cardenas Sponsor: FIADA SUNSHINE AUTO Tallahassee, FL Aymen Beshay Sponsor: FIADA.com
AUGUST 2017
30+ Year Members Progressive Motors, Inc. Richard Bell Auto Sales Tampa Machinery Auction
Pompano Beach, FL Deland, FL Tampa, FL
10+ Year Members Anderson's Affordable Auto Auto Mart of Ocala AutoMaxx Cars & Credit of Jacksonville J & C Auto Sales Nice Car, Inc. Showcase Auto Brokers USA, Inc.
Dunnellon, FL Ocala, Fl Sarasota, FL Jacksonville, FL Naples, FL Hollywood, FL Panama City Beach, FL
Under 10 Year Members 3-D Motors, Inc. Alley's Auto Wholesale Ally SmartAuction Autoinspect.us LLC Automotive Financial of America, Inc. B & B Auto Exchange, Inc CARFAX
Tampa, FL Jacksonville, FL Detroit, MI North Miami Beach, FL Orlando, FL Lake Butler, FL Centreville, VA
Rejoining Members
AUGUST 2017
ASAP TOWING & STORAGE, INC. Jacksonville, FL Vince Serrano Sponsor: FIADA
INTERACTIVE FINANCIAL MARKETING GROUP Richmond, VA Travis Weisleder Sponsor: Victoria Sams
8 — Independent Dealer —September 2017
Enterprise Rent A Car Evans Auto Sales Fitzgerald Motors, Inc. Fleet Liquidators of Central Florida LLC Fun To Drive, LLC. GPS Tracking USA Inc. Ituran USA, Inc. Joseph Motors Lazydays Magna Auto Sales March Motors, Inc. Master Car International Inc Moffa, Gainor, & Sutton, PA Palm Beach Auto Wholesale Port Motors, Inc. Pro-Vigil Surveillance Services RPF Sales Sun Financial Holding LLC The Motorcoach Store Value First Auto Sales, LLC
Coconut Creek, FL South Daytona, FL Clearwater, FL Debary, FL Bonita Springs, FL Lutz, FL Fort Lauderdale, FL Lakeland, FL Seffner, FL Titusville, FL Jacksonville, FL Pompano Beach, FL Tampa, FL Lake Park, FL West Palm Beach, FL San Antonio, TX Jacksonville, FL Hollywood, FL Bradenton, FL St. Petersburg, FL
Use the R.E.D. Phone! 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
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September 2017 — Independent Dealer — 9
BACK TO BASICS
Your "As-Is" Shield May Not Provide All the Protection You Thought BY TERRY MYERS
If there is something hiding behind your Buyer's Guide, it is vital to make your customer aware. The non-disclosure of a material fact could be a costly mistake.
T
here seems to be a misconception that checking the AS-IS box on the Buyer’s Guide covers everything that might come up after the vehicle purchase is complete, giving the dealer complete peace of mind. An excellent article by Shaun Peterson, NIADA’s senior vice president of legal and government affairs, in the August issue of Used Car Dealer magazine brings to light the dangers of trusting too much in too little. An Ohio dealer was sued under Ohio’s unfair and deceptive acts and practices statute for concealing a material fact that could affect the buyer’s purchasing decision, by not disclosing the fact the vehicle had unibody damage. The auction where the dealer made the purchase, had announced that fact and the dealer’s auction receipt showed the vehicle was announced with that fact. The court awarded treble damages. Whoa. Could that happen here in Florida? That is a good question to ask your attorney. What do you think? When the dealer is in the decisionmaking process to purchase a vehicle he/she intends to resell, material facts about that vehicle are important to that 10 — Independent Dealer —September 2017
wholesale buying process. If you, the dealer, discover you were lied too or not told the whole truth, allowing you to make an informed decision, how would that make you feel toward the selling dealer? How do you think the customer and/or the court system would think in a retail setting about the dealership? Remember, the Buyer’s Guide is not sufficient by itself. You need to have a separate document spelling out what AS-IS means. You may be advised by your legal counsel to include and get
signed also, an affidavit to cover material facts not covered by the Buyer’s Guide AS-IS statement. You should be familiar by now, of the need for an affidavit reflecting selling a vehicle with a ‘Brand’ in addition to checking the appropriate box in Section 3 of the HSMV 82040 form. Another example of a material fact. A check mark in the AS-IS box is not a guarantee you won’t have to write a check later for non-disclosure of a material fact. www.fiada.com
Southeastern Auto Auction Is Now Offering Vehicles From:
For your convenience, here are a few excerpts from Shaun's article that are worth repeating:
SAVANNAH, GA
In many dealers’ minds, the “AsIs” disclosure operates almost as a “Get Out of Jail Free” card. When responding to a consumer complaint or lawsuit, and, at times, a regulatory inquiry, I have often had dealers tell me the consumer signed an "As-Is" disclosure statement and thus they are immune from consumer claims.
1000 Vehicles Weekly
Dealer Only Sale (750 Vehicles) Wednesday – 9:30am Public Sale (250 Vehicles) Thursday – 7:00pm
Free Breakfast Every Week!
1000 Vehicles Weekly
While it is required that dealers disclose the existence of a warranty or, where permitted by state law, the lack of warranty, it is important to understand exactly what happens when you check the “As-Is” box on the Buyers Guide and have a consumer sign an “As-Is” disclosure statement.
Offering Vehicles From These New Car Stores:
WEDNESDAYS
THURSDAYS
750+ Vehicles
250+ Vehicles
7PM PUBLIC SALE
9:30AM DEALERS ONLY
All “As-Is” means is you, the dealer, are not providing any warranty with the sale, a fact reiterated by the FTC’s recent changes to the Buyers Guide forms.
EVERY WEEK: All Float/Free Breakfa Offering Vehicles From These Accounts: Sell Online |
BUY ONLINE | All Lanes Available BUY ONLINE | All Lanes Available SELL ONLINE | Via These Industry SELLPlatforms: ONLINE | Via These Industry Platforms: BUYAvailable ONLINE | All |Lanes Available BUY ONLINE | All Lanes BUY ONLINE All Lanes Available BUY ONLINE | ONLINE AllONLINE Lanes Available BUY AllLanes LanesAvailable Available BUY | |All SELLIndustry ONLINE | Via|These Industry Platforms: SELL ONLINE | Via These Platforms: SELL ONLINE Via Industry Platforms: SELLThese ONLINE | ONLINE Via These Industry SELL ONLINE ViaThese ThesePlatforms: IndustryPlatforms: Platforms: SELL | |Via Industry BUY ONLINE | All Lanes Available BUY ONLINE | All Lanes Available ONLINE | Via These Industry Platforms: SELL ONLINE | Via These IndustrySELL Platforms: PAID ADVERTISING
For example, if an alternator goes bad six months after you sell the vehicle, a properly executed “As-Is” disclosure means you are not agreeing to make that repair.
BUY ONLINE | All SELL ONLINE | Via Thes
SM
SM
SM
SM
SM
SM
SM SM
But as that Ohio dealer learned, www.southeasternaa.com | 1712 Dean Forest Rd | Savannah GA | 912-985-9909 www.southeasternaa.com | 1712 Dean Forest Rd | Savannah GA | 912-985-9909 www.southeasternaa.com | 1712 Dean Fo checking the “As-Is” box does not give a dealer freedom to hide |Forest 1712 Forest RdSavannah | Savannah GA | 912-985-9909 912-985-9909 1712 Dean Forest Rd | Savannah |1712 912-985-9909 www.southeasternaa.comwww.southeasternaa.com |www.southeasternaa.com 1712 Dean Forest Rd | Savannah GA | 912-985-9909 www.southeasternaa.com | 1712 Dean |Dean Savannah GADean |Rd 912-985-9909 www.southeasternaa.com Dean Forest Savannah www.southeasternaa.com |GA|1712 RdRd| |GA Savannah GAGA| |912-985-9909 www.southeasternaa.com | Rd 1712 Dean Forest |Forest | 912-985-9909 information known to the dealer that Dean Forest Rd | Savannah GA | 912-985-9909 www.southeasternaa.com | 1712 Deanwww.southeasternaa.com Forest Rd | Savannah GA||1712 912-985-9909 would be material to the consumer’s decision about acquiring a vehicle. If you know a vehicle has prior frame or unibody damage and that fact is not disclosed to a consumer, an “As-Is” disclosure is likely to be no protection for you in a consumer fraud battle. SM
SM
www.southeasternaa.com | 1712 Dean Forest Rd | Savannah, GA 31408 | 912-96
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.
www.fiada.com
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September 2017 — Independent Dealer — 11
1
1
Things to Know
TOP
The "As-Is" Disclaimer Last November, the FTC issued a final rule amending its Used Car Rule, and the changes went into effect January 27, 2017. Recent legal actions concerning the As-Is Disclaimer makes it a great time to dissect the changes and understand the new expectations. For review, below are the changes that have been made, along with a diagram of where they appear on the new form, as well as some helpful resources to stay compliant.
CHANGING THE "AS-IS" DESCRIPTION
The FTC defines an “as is” sale as one without a warranty. If the sale is with a warranty, the buyer’s guide discloses the terms and conditions. In states that do not permit “as is” used vehicle sales, dealerships must use an alternative guide that discloses whether the sale is with a warranty or with implied warranties only. (Not applicable in Florida.)
2 3
MANUFACTURER'S WARRANTIES
Providing a box that dealerships can check to indicate that an unexpired manufacturer’s warranty applies.
WARRANTIES AND SERVICE CONTRACTS
Placing boxes on the face of the buyer’s guide that dealerships can check to indicate whether a vehicle is covered by a third-party warranty and whether a service contract may be available.
4 5
HISTORY REPORTS AND RECALLS
Adding a statement that directs consumers to obtain a vehicle history report and check for open recalls.
SPANISH TRANSLATION AVAILABLE
Adding a statement, in Spanish, to the English-language buyer’s guide, advising Spanish-speaking consumers to ask for the buyer’s guide in Spanish if the dealership is conducting the sale in Spanish.
6 7 8 9
SPANISH ACKNOWLEDGEMENT
Providing a Spanish translation of the statement that dealerships may use to obtain a consumer’s acknowledgment of receipt of the buyers guide.
MAJOR DEFECTS ADDITIONS
Adding airbags and catalytic converters to the buyers guides’ list of major defects that may occur in used vehicles.
IMPORTANT:
BUYERS GUID
Spoken promises
VEHICLE MAKE
WARRANTIES
are difficult to enfo
rce. Ask the deal er to put
MODEL
E
all promises in writin
g. Keep this form .
YEAR
FOR THIS VEHIC
VEHICLE IDENT
LE:
IFICATION NUMB
ER (VIN)
AS IS - NO DEA LE
THE DEALER DOE
S NOT PROVIDE
A WARRANTY
DEALER WAR
R WARRANTY
FOR ANY REP
RANTY
FULL WARRAN
TY.
AIRS AFTER SAL
E.
LIMITED WARRAN TY. The dealer will pay ____% that fail during the of the labor and warranty period. ____% of the parts Ask the dealer for explain warranty for the covered coverage, exclu systems sions, and the deal a copy of the warranty, and for state’s laws may any documents er’s repair oblig give you additiona that ations. Implied l rights. warranties unde r your SYSTEMS COV
ERED:
DURATION:
NON-DEALER WA RRANTIE
S FOR THIS VE
HIC
LE: MANUFACTURER ’S WARRANTY STILL APPLIES components of . The manufacturer the vehicle. ’s original warranty MANUFACTURER has not expired on some ’S USED VEHICLE WARRANTY APP LIES. OTHER USED VEHICLE WAR RANTY APPLIES . Ask the dealer for a copy of the warr anty document obligations. and an explanat ion of warranty coverage, exclu sions, and repa ir SERVICE CON TRACT. A serv ice contract on coverage, dedu this vehicle is avai ctible, price, and lable for an extra exclusions. If you vehicle, implied charge. Ask for buy a service cont warranties unde details about r your state’s laws ract within 90 days may give you addi of your purchase tional rights. of this ASK THE
DEALER IF YOU R MECHANIC CAN INSPECT THE VEHICLE ON OR OBTAIN A VEH OFF THE LOT. ICLE HISTORY REPORT AND how to obtain a CHECK FOR OPE vehicle history repo N SAFETY REC rt, visit ftc.gov/u You will need the ALLS. For infor sedcars. To chec vehicle identifica mation on k for tion these sites. open safety reca number (VIN) show lls, visit safercar. n above to mak gov. e the best use of the resources on SEE OTHER SIDE for important add used motor veh itional informa icles. tion, including a list of major defects that may Si el concesiona occur in rio gestiona la venta en españo l, pídale una cop ia de la Guía del Comprador en español. Here is a list of some
major defects that
Frame & Body tive welds, or rusted Frame-cracks, correc through twisted frame Dog tracks—bent or
may occur in used
vehicles.
Cooling System radiator Leakage including water pump Improperly functioning
Electrical System Battery leakage alternator, generator, Improperly functioning Engine ing normal seepage battery, or starter Oil leakage, exclud Cracked block or head Fuel System able Belts missing or inoper to camshaft leakage Visible Knocks or misses related sories Inoperable Acces lifters and push rods devices Gauges or warning discharge Abnormal exhaust Air conditioner Shaft Transmission & Drive Defroster & r ing Heate exclud e, or leakag Improper fluid level m Syste Brake normal seepage broken Failure warning light ed case which is visible Cracked or damag pressure (DOT spec.) faulty Pedal not firm under vibration caused by e (DOT spec.) Abnormal noise or shaft Not enough pedal reserv transmission or drive in straight line Does not stop vehicle functioning in any gear or shifting er Improp (DOT spec.) or chatters slips clutch l Manua Hoses damaged Specs) (Mfgr. Differential ing Drum or rotor too thin or leakeage, exclud ss less than 1/32 inch Improper fluid level Lining or pad thickne ing or leaking normal seepage Power unit not operat housing which is damaged parts nical mecha Cracked of damaged or Structural visible faulty Air Bags vibration caused by Abnormal noise or differential
Steering System at steering wheel Too much free play (DOT specs.) more than 1/4 inch Free play in linkage or jams Steering gear binds d improperly Front wheels aligne (DOT specs.) d or slipping Power unit belts cracke improper level Power unit fluid m Suspension Syste ed Ball joint seals damag or damaged Structural parts bent nected Stabilizer bar discon Spring broken ing loose mount er absorb Shock ed or missing Rubber bushings damag or missing Radius rod damaged or functioning Shock absorber leaking improperly Tires 2/32 inch Tread depth less than Sizes mismatched Visible damage Wheels e or repairs Visible cracks, damag or missing Mounting bolts loose Exhaust System Leakage Catalytic Converter
WHERE TO GET THE UPDATED FORM
Download a copy of the revised form online at https://www.ftc.gov/tips-advice/business-center/guidance/buyers-guide
WHEN TO USE THE UPDATED FORM
Dealers were given a year from the rule's effective date to transition from one form to the other. All dealers must begin using the new forms by January 27, 2018.
10
BRUSH UP ON AS-IS
DEALER NAME
The FTC's "Dealer's Guide to the Used Car Rule" is a publication that explains how to prepare and display the Buyers Guide and provides a compliance checklist. Download it from the Resource Library at www.FIADA.com. ADDRESS
TELEPHONE
CONTACT: TS AFTER SALE,
12 — Independent Dealer —September 2017
FOR COMPLAIN
www.fiada.com e
this label befor vehicle. Removing contract to buy this form is part of any (16 C.F.R. 455). information on this ) violates federal law riving IMPORTANT: The test-d of se (except for purpo consumer purchase
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September 2017 — Independent Dealer — 13
L E G I S L AT I V E U P D AT E
Federal Actions You Need to Know About BY SHAUN PETERSON, NIADA
NIADA is your voice in Washington D.C., advocating for independent dealers, the used vehicle industry and small business. Here’s a look at the latest news and NIADA efforts regarding legislative, regulatory, PAC and grass roots activities.
O
n the Legislative front, the use of payment assurance devices has attracted attention on Capitol Hill. Sen. Bill Nelson (D-Fla.) – the ranking Democrat on the Senate Committee on Commerce, Science and Transportation – recently sent a letter of inquiry to several Buy HerePay Here dealers and subprime finance companies across the country. While Sen. Nelson acknowledged what we in the industry have been pointing out for years – the use of the devices allows creditors to extend more credit on better terms for better vehicles to customers who otherwise might not qualify for those terms – his letter expresses the concerns of consumer advocates about data privacy and safety. Nelson cited unsubstantiated claims from consumers who said their vehicles were shut off while they were driving. He also attempted to link the use of the devices and an alleged rise in subprime auto loan delinquencies to the 2008 mortgage crisis. In response to the letter, I traveled to Washington D.C. with NIADA legislative committee and BHPH commission member Mike Brill to meet with the senator’s staff.
14 — Independent Dealer —September 2017
We spent an hour educating the staff about the use of the devices in BHPH dealerships and their related finance companies. We explained the devices are a tool for dealers and finance companies to communicate with customers to assist in account servicing, rather than immediately repossessing a vehicle. We assured them that it’s not possible for payment assurance devices to shut off vehicles while they are in operation because the devices are not connected to the engine. Sen. Nelson has not indicated his intentions in light of the information we provided. We do not anticipate the Republicans being interested in any action at this time. NIADA will continue to monitor the situation.
REGULATORY
Toward the end of the Obama administration, the Department of Labor issued a rule that would significantly change the salary threshold for white-collar employees to be exempt from overtime compensation, raising it from $23,660 annually ($455 per week) to $47,476 annually ($913 per week). But in November, just before the Dec.
1 date when it was supposed to take effect, a federal judge in Texas issued a temporary injunction against the effective date of the rule. After hearing arguments in the case, Judge Amos Mazzant permanently struck down the rule on Aug. 31, saying the government had overstepped its authority. And last month, the Department of Justice asked the court to dismiss its pending appeal of the judge’s temporary restraining order. Just before the judge’s ruling, the Department of Labor published a new request for information asking for feedback on questions defining the duties and appropriate salary level one must have before being exempted from overtime, including whether nondiscretionary bonuses and incentive payments should be considered a portion of the salary. One of the issues from the struck-down rule being examined by the request is whether that salary level should be automatically updated. NIADA is reviewing the request and will submit appropriate comments. Shaun Peterson is the NIADA Sr Vice President of Legal & Government Affairs
www.fiada.com
T
he good times are about to roll! The 2017 FIADA Annual Convention is just weeks away and promises to deliver a line up of educational sessions, informative speakers and fun networking events to enjoy with your whole family. Hosted at the Omni Orlando Resort at ChampionsGate, you will enjoy first-class accommodations in the heart of Central Florida with easy access to local attractions and sights.
KEYNOTE SPEAKERS NIADA'S Chuck Bonanno, national director of the NIADA 20 Group Program will bring his thirty years of experience to the table as the Convention Keynote Speaker. Also on the line-up, "The Telephone Doctor" Nancy Friedman. Get details on these, and all the educational opportunities online at www. fiada.com. Click on the Convention tab.
Convention Sponsors A special thanks to our 2017 Sponsors: Marquis
Gold
Silver
Bronze
Chuck Bonanno NIADA 20 Groups www.fiada.com
Nancy Friedman The Telephone Doctor September 2017 — Independent Dealer — 15
Don't Forget, you will also be able to get ALL of your state mandated continuing education credits for the 2018 license renewal period at the FIADA 2017 Annual Convention! Sessions and Topics:
Sessions subject to change.
Legal Update Robert Sickles, PA, Managing Partner, Broad and Cassel and FIADA General Counsel Legislative Update Sandra Mortham, FIADA Lobbyist Division of Motorist Services Update Common Mistakes and Tips for Title & Registration Work Panel discussion moderated by Kevin Scott, Dealer Consulting LLC Florida Sales & Use Tax — The Tax Man is Coming James Sutton, CPA, Moffa, Sutton & Donnini, PA Buying Vehicles at Auction Panel discussion moderated by Anthony Compagno, Palm Tree Auto Sales Buying Vehicles Online Panel discussion moderated by Jason Little, Economy Motors Advertising on Facebook and Google: An Evolutionary View of Wholesale Acquisition Majd Saboura, Director of Wholesale Business Development, vAuto Automotive Disruption: Millenials, Mobile and Marketing Zach Klempf, Founder & CEO, Selly Automotive
2017 Exhibitors: ABCOA/Deal Pack Software Ace Motor Acceptance Corporation ACV Auctions Inc ADESA All American Bonds and Insurance Ally SmartAuction America's Auto Auction Jacksonville ARA GPS ASC Warranty, Inc. Auction123, an ARI Company Auto Data Direct, Inc. Automotive Finance Company AutoNation Auto Auction Autotrader Auto Use CAR Financial Services, Inc CarGurus Dealer Lead Track Dealer Profit Partners DealerSocket Gravitational Marketing Insurance Auto Auction Inc. Ituran USA, Inc. Kelley Blue Book
Tentative list as of 9/4/17.
Lobel Financial LotMonkey, LLC Manheim MicroBilt Nationwide Southeast LLC NextGear Capital Orange Auto Tag Agency PassTime GPS PrimaLend Capital ProGuard Warranty Rent A Wreck Used Car Rental / Priceless Car Rental SDA, Inc. Sheriffs Ranches Enterprises, Inc. Spartan Financial Partners Tax Refund Services Tax Max TradeRev TRUECar United Acceptance, Inc. vAuto VEMO Auto Auctions Veros Credit Wayne Reaves Software & Websites Williams & Stazzone Insurance Agency, Inc.
IT'S BACK! The Saturday Night Annual Banquet and Awards Ceremony will return this year with a fun and glamorous Masquerade Ball theme. Enjoy live music by the MPire Band on Saturday night.
16 — Independent Dealer —September 2017
www.fiada.com
2017 FIADA ANNUAL CONVENTION
OCTOBER 5-7, 2017 | OMNI ORLANDO RESORT AT CHAMPIONSGATE COMPANY INFORMATION Company:____________________________________________________________________________________________________________ Address:_________________________________________________________ City, State, Zip:________________________________________ Phone:___________________________________________________________ Fax:________________________________________________ E-mail:__________________________________________________________ Website:_____________________________________________
REGISTRATION INFORMATION FULL ACCESS PASS (Includes all events and meals)
REGULAR (9/1 - 9/30)
ON-SITE (10/1-10/7)
Badge Name:______________________________________________________________________ MEMBERS
[
] $299
[
] $349
ADDITIONAL FULL ACCESS PASS (Available with purchase of Full Access Pass)
[
] $349
[
] $399
Badge Name:______________________________________________________________________
[
] $195
[
] $195
Badge Name:______________________________________________________________________
[
] $195
[
] $195
[
] $100
[
] $100
Badge Name:______________________________________________________________________ MEMBERS
[
] $124
[
] $149
ADDITIONAL EVENT TICKETS
[
] $149
[
] $175
NON-MEMBERS
SPOUSE FULL ACCESS PASS (Available with purchase of Full Access Pass) Badge Name:______________________________________________________________________ Tickets to the Annual Banquet are included with all Full Access Passes. For our planning purposes, will you and your guests be attending the Annual Banquet on Saturday evening?
Yes
No
EDUCATION PASS (Does not include meals) NON-MEMBERS
Saturday Night Gala Dinner Banquet (semi-formal attire)
Qty:________________
X $75
X $75
Friday Night Expo Hall Grand Opening Dinner
Qty:________________
X $50
X $50
Friday/Saturday Breakfast
Qty:________________
X $25
X $25
Friday/Saturday Lunch
Qty:________________
X $25
X $25
FULL ACCESS AND SPOUSE FULL ACCESS PASSES includes all meal functions, seminars and exhibit hall access and is eligible for continuing education credit. Additional Full Access passes and Spouse pass are only available with a Full Access registration. Valid FIADA membership required for FIADA member registration rates. CHILD REGISTRATIONS AVAILABLE Contact FIADA at (800) 237-0448 for details and to register.
TOTAL:
$
PAYMENT INFORMATION [
] I have enclosed a check made payable to FIADA
[
] I will be using a credit card
Name (as it appears on card):_______________________________________ Company:______________________________________________ Credit Card Billing Address:_______________________________________________________________________________________________ Credit Card Number:_________________________________________________________________
Exp Date:__________________________
Authorized Signature:_________________________________________________________________ CC Security Code:____________________ CANCELLATION POLICY: If cancellations are received in writing before 5pm on Monday, September 4, 2017, we will refund your registration fee. If cancellation is received between 9/5/17 and 9/29/17, we will refund your registration fee less a $25 processing fee. Fees cannot be refunded for registrations canceled after 9/29/17 or for no-shows. PHOTO/VIDEO RELEASE: By registering for the 2017 FIADA Annual Convention, I hereby grant permission to use any and all photographic imagery and video footage taken of me at this event and activities pertaining to this event, without payment or any other consideration. I understand that such materials may be published electronically or in print, or used in presentations or exhibitions.
HOTEL INFORMATION: Omni Orlando Resort at ChampionsGate. Hotel stay is separate from convention registration. Reservations must be made by SEPTEMBER 4, 2017 to qualify for group discount of $179 per night (plus tax) For reservations call 1-800-THE-OMNI (800-843-6664).
Return this completed form, or register: Mail: FIADA, 1840 Fiddler Court, Tallahassee, FL 32308 Fax: (850) 385-3251 Online: www.FIADA.com www.fiada.com
Call/Text: (800) 237-0448
September 2017 — Independent Dealer — 17
Hear Nancy Friedman at the 2017 FIADA Convention! Details on page 16!
Using a Script Versus Having a Conversation BY NANCY FRIEDMAN, THE TELEPHONE DOC TOR
S
Telephone (and face-to-face) interaction can be tricky for some people. Should you help prompt them with a script or teach them the art of conversation? That is the question.
Well what’s wrong with that, Nancy? Aren’t you supposed to read a script?
When you have someone you really want to hire (or is already on staff), but you’re not happy with the ‘read’ or the audition, go for Drama 101. Bring in a newspaper or magazine article. Tell them they’re being interviewed for their local TV Station, FOX News or CNN. Ask them to read the article as they would on the air. Be patient. It’s very sobering.
Yes, but it’s the old how you read it that counts. We have all been accosted by a phone call, inbound or outbound, with someone poorly reading their script. Yawn, yawn; barf, barf or worse.
Scripts are ok if used right. But those that use scripts need to be great improv folks. Improv is not easy. But it’s a good exercise in having a conversation. Some of us are good at it, some are not.
With a professional script, there are written words for the other person to respond. In your business script, there’s normally only words for what your employee is saying. There are no words for the customer, the responder (the other actor/or the customer). Oh, there may be some things like ‘if the customer says this; you say that. If the customer says that; you say this.’ (Sort of like “eat this; not that.”)
Let’s face it. The folks coming into the work place today, aren’t very versed in ‘conversations.’ After, “Hey, how ‘ya doing?” or “Hey, what’s up?” there’s not much else. So, we’re going to need to teach them; show them; help them a) how to read a script or b) How to handle and interact in a conversation. Neither is a piece of cake.
cripts were designed for actors. End of subject! Actors know how to read a script. Most folks don’t. It’s that simple. When you give a person a script they tend to ‘read’ it.
So, what happens if the customer says something that makes the rep go off course in your script? Do we say, “Excuse me, sir, that’s not in my script?” Here’s a big time tip: If you want to continue using scripts, that’s fine; however, I suggest you have the person who will be reading the script actually read the script to you before they get on the phone, or better yet, read it to you over the phone. How does it sound? Tape it. Let them hear it too. (Let them go to another room and call in on your cell or another phone. It’s not a big deal.) The best place to do this is in the initial interview. But what happens if you already have them on board? And now after reading this blog you realize they’re just reading the script blah, blah, blah. 18 — Independent Dealer —September 2017
One other thing about scripts. I’m a professional actress and have worked with some big names over the years. We all memorized a script. Anyone who has written a script (the author) doesn’t like you to change their words. And you shouldn’t. They were written with a reason. Often, employees who are given a ‘script’ tend to change the wording without asking or realizing why words are there. Not a great idea. I repeat: Script are for actors. Now let’s talk about “conversations.’ Some of us can have a conversation with a tree and come out looking good. We understand a conversation. We know how to ask questions. We’re quick on our feet. We turn on a dime. But we’re not all the same. Some of us need a bit of help. (Ok, most.) Think about having the staff use some sort of aided recall for conversations. www.fiada.com
Aided recall includes bullet points that help guide the conversation along. They allow the person to handle a conversation better until they ‘get it’ and perhaps stand on their own. It’s a cheat sheet, if you will. Aided recall or bullet points are words or short phrases that will help the rep remember the entire phrase/sentence. They’re the ‘important’ words you don’t want to miss from the conversation. Example: If we wanted the rep to say: “I’m calling for a donation. You made a $50 pledge last year and we hope we can count on you this year.” The aided recall bullet point might be “donation/thank you/again? Please.” You see, it’s key words that make the conversation good. And bullet points help. Did you ever notice on some of the talk shows how some of the famous folks can’t handle a simple conversation? That’s because they can only handle a script. The words need to be written out for some folks. And some folks can turn on a dime and have a great conversation. There are pitfalls to both the script and the conversation. Make sure you know what your folks are best at doing.
KEY POINT: Be sure you hear (or audit) them on the phone before you put them on the phone with your customers. Remember, most folks taking or making calls for you are not seasoned salespeople or actors. They need rehearsal time. The other day I called a cable company with my problem. It was obvious the young lady was ‘reading’ a script. It was not fun. I thought long and hard before I said, “Suzie, please put your script away and just talk with me.” There was dead silence. I told her it would be ok. She started to make excuses. And I said again, “Please, just talk with me.” She did and she was so much better than the script. It all worked out. I know I felt better and I believe she did as well. Nancy Friedman, president of Telephone Doctor Customer Service Training, is a featured customer service speaker at franchise, association, and corporate meetings around the world. A popular TV guest, she appeared on Oprah, The Today Show, CNN, FOX News, Good Morning America and CBS This Morning, as well as hundreds of other radio, television and print outlets around the world, including the Wall Street Journal, USA Today and Financial News. The author of 9 books on her chosen topics, Nancy’s passion to help corporate America improve their communications, is second only to the material she delivers.
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www.uaidirect.com Se Habla Español September 2017 — Independent Dealer — 19
D E A L E R O P E R AT I O N S
Digital Marketing Will Not Replace Human Interaction It may seem that everyone's "going digital" when it comes to sales and marketing. While there is some truth to that, it still cannot replace good 'ol fashioned relationship building. BY KENNY ATCHESON
T
he more digital and automated things become, the more effective is human interaction. My friend Richard is hosting a convention about digital currency, such as Bitcoin and other crypto-currencies. Because of their excitement, top digital company heads and experts on that topic are already creating a buzz about the conference. Google honchos send team members around the country to host workshops about Internet marketing. A few months ago I was hired to speak at a conference in Texas. I got on a plane, flew to San Antonio, stayed in a hotel, and then conducted a face-to-face workshop about “Digital Marketing.” I hope you see the irony here. Unless your customers are strange Russian cosmonauts such as Lev Andropov, played by Peter Stormare in the 1998 film Armageddon—people need face-to-face human communication. Face-to-face also happens to be more effective—which is of course more important than being efficient. Imagine if someone invented a vehicle that was fueled by water and got unlimited miles per gallon not using gas at all. However, that vehicle could only go 10 miles before needing a refill. It’s highly efficient but not at all effective. Digital marketing has changed advertising—and I love it. We do it. We sell it. We are good at it. However, it does not replace human interaction. It is “in addition to.” What about Amazon Taking Over the World with Digital Marketing? I am fully aware of Amazon. This company is the behemoth taking over the world, putting retailers out of business because of innovative technologies that allow anyone to order everything they need with a click of a mouse. Amazon has been referenced a slew of times in my email and print newsletters because of their innovations. 20 — Independent Dealer —September 2017
Amazon leaders: • Popularized product reviews • Improved product reviews by allowing people to vote on the helpfulness of a review • Launched intuitive technology that makes the shopping easier with messages such as, customers that bought this item also looked at this item… Guess what else Amazon muckety-mucks are doing? Amazon will be opened in physical brick and mortar book stores around the country. You might say, “If you go into a book store you will see an older demographic.” Even if that is true, here is what else Amazon management did: Amazon heads bought Whole Foods Market for $13.7 billion. There are plenty of young people walking around Whole Foods with $8 jars of mustard in their basket. It appears as though the company whose leaders have done the best job of digital marketing are investing increasingly more into face-to-face customer interactions. Don’t let your salespeople get sucked into thinking that only social media, email, texting, and Google Ads are the only way to get a customer’s attention. Help them to realize that the best sales and marketing happens by phone or in person. And the main job of a phone call is to get the customer to come in for a face-to-face conversation and to physically see the dealership, the vehicle, and the people who want to help. 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-PerClick Management, Facebook Pay-Per-Click Management, Direct Mail Campaigns, Copywriting, and more. His website can be found at www. DealerProfitPros.com
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September 2017 — Independent Dealer — 21
D E A L E R S H I P O P E R AT I O N S
What to Do When You Receive a Towing and Repair Lien Notice BY DENNIS LEVINE AND KELLEY KRONENBERG
The clock starts ticking the moment you receive a towing or repair lien sale notice for a vehicle you hold a lien on. Act quickly to protect your security interest.
F
lorida statutes set out very strict time limits by which a Lender holding a lien/security interest on the vehicle can take action after receiving a towing or repair lien sale notice to prevent the sale of the vehicle and loss of its lien. Needless to say, we see a lot of fraud related to lien sales and autos. Therefore, we recommend auto lenders and lessors set up procedures to guard against losing a car to a lien sale. Auto lenders must act quickly to protect their security interest when dealing with lien sales. Upon receipt of a lien sale notice, we recommend lenders immediately take the following steps:
•
Contact the customer to find out any information about the vehicle
•
Contact the party asserting the lien and/or the noticing company (e.g. Best Lien Services) to attempt to resolve. Immediately request the following -
•
Documentation of the asserted lien (e.g. bills for towing, storage or repair estimate, and repair invoices, signed authorizations for repairs)
•
The right to inspect the vehicle
22 — Independent Dealer —September 2017
•
Confirmation in writing if advised the car was picked up by the customer, or told the lien sale will be postponed or cancelled
•
Did the vehicle have GPS? If so, obtain history and match it up with dates of the repair work order
•
Contact the insurance company to see whether a claim for damage has been made
•
Look at CarFax or similar data bases to determine whether the car has been serviced recently, or been involved in an accident and there is a police report (e.g. www.BuyCrash.com) Do not delay—the clock is ticking toward the lien sale date or the date by which a Lender can post a bond. In the event you do not obtain documentation and arrange an inspection of the vehicle within two days of receipt of the lien sale notice you should contact your counsel. For more information on the subject of replevin, contact Dennis LeVine and Kelley Kronenberg at (813) 223-1697 or by email at dlevine@kklaw.com. www.fiada.com
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September 2017 — Independent Dealer — 23
D E A L E R S H I P O P E R AT I O N S
How to Maximize Gross Profits On Auction Cars BY DALE POLLAK, vAUTO
Taking a systematic approach to identifying, purchasing and managing vehicles at auction will help you acquire vehicles "on the money."
I
f you ask dealers for their top complaint about the used car business, many will say it’s difficult, if not impossible, to acquire wholesale vehicles “on the money.” Dig a little deeper, and the root of the complaint becomes clear—dealers believe they can’t make the gross profit they would like to see in their used vehicle department, particularly on units they acquire from auction. Part of the complaint owes to market conditions. Front-end grosses on most used vehicles simply aren’t what they used to be, thanks to increased price transparency. National Automobile Dealers Association data shows that the front-end gross profit as a percentage of the sales price of used vehicles has declined 20 percent over the last several years and, judging from recent industry reports, the downward trend continues. But I would submit that the real reason dealers find auction cars profit-problematic owes to the ways they identify, purchase and manage these vehicles as part of their broader inventory management strategy. Let’s take a closer look at each… Identify: It used to be OK to just go to the auction and buy some cars. Not anymore. The market’s too competitive, transparent and volatile for such gut24 — Independent Dealer —September 2017
driven guesswork. The best dealers today know exactly what they plan to buy before they spend any time in the lanes or online. They are extremely precise, as well, placing the highest priority on cars that meet the color-, condition-, equipment-, mileage- and profit-parameters that fit their market. Most use technology and tools to achieve this level of precision, purpose and specificity with their auction buy lists. It shouldn’t be too surprising that dealers who operate in a less sophisticated manner often have the most difficulty finding the right cars. Purchase: Today’s best dealers approach the purchase of an auction unit the same way. It’s a dispassionate, stone-cold analysis. They assess whether they can buy the car they need on the money, with precise knowledge of the profit to expect, given how much they’ll pay for the car and put into it. They use technology and tools to estimate all the cost inputs— acquisition price, packs, post-sale inspections, transportation, and other fees, and determine their potential gross before the bidding starts. Likewise, these dealers are disciplined. They rarely purchase outside their preset parameters and, when they do, they have a very good reason. Manage: Top-performing dealers know that, in today’s market, auction cars represent their most costly and
risky used vehicle investments. This understanding drives the care and precision they apply to consistently knowing the right cars and buying them on the money. But this understanding carries further—to each day and every stage the dealer owns this more costly and risky investment. Auction cars get more attention and scrutiny in reconditioning, in online merchandising and in the ongoing reviews of asking prices compared to trade-in vehicles. This level of extra-scrupulous management oversight is necessary to maximize profit and minimize risk. As one dealer put it, “I don’t like to have any over-age vehicles in my inventory, but I absolutely hate it when we let auction vehicles age. More often than not, we end up with a loss we could have avoided.” Dealers who strive to heed these three best practices will typically find improvements in their front-end gross profits. Such gains stand to reason: They’ve got the right cars, they bought them correctly and they’ve done everything they can to maximize each unit’s return on investment. These dealers may still believe that front-end gross profits aren’t what they should be for auction-sourced inventory. But this belief is more of a commentary on current market conditions, and the all-points effort that’s now required to optimize used vehicle performance and profitability. These dealers understand there’s money to be made with auction vehicles if you have the fortitude and know-how to make it. Dale Pollak serves as executive vice president for Cox Automotive, a position he’s held since the company he founded, vAuto, became part of the Cox family in 2010. www.fiada.com
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September 2017 — Independent Dealer — 25
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:____________________________________________________________________
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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
26 — Independent Dealer —September 2017
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September 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 This one’s easy. Note the announcement of the CFPB’s new arbitration rule, discussed immediately below. If the documents your dealership uses in its transactions with customers include arbitration provisions, those provisions are going to require a legal review in time to meet the March, 2018 deadline. You can’t start that process too soon! FEDERAL DEVELOPMENTS Arbitration Alert! On July 10, the CFPB issued a new rule banning companies from using mandatory arbitration clauses that prohibit consumers from seeking class relief. The rule also requires covered providers of certain consumer financial products and services that are involved in an arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the CFPB and also to submit specified court records. The DoddFrank Act required the CFPB to study the use of mandatory arbitration clauses in consumer financial markets and authorized the CFPB to issue regulations in the public interest, for the protection of consumers, and based on findings consistent with the CFPB's study. The CFPB's study, released in March 2015, showed that credit card issuers representing more than half of all credit card debt, and banks representing 44 percent of insured deposits, use mandatory arbitration clauses. Yet, three out of four consumers the CFPB surveyed did not know whether their credit card agreement had an arbitration clause. The study did not address how 28 — Independent Dealer —September 2017
findings regarding credit cards applied to other financial products and services. In October 2015, the CFPB published an outline of the proposals under consideration and convened a Small Business Review Panel to gather feedback from small companies. Besides consulting with small business representatives, the CFPB sought comments from the public, consumer groups, industry, and other interested parties before continuing with the rulemaking. In May 2016, the CFPB issued a proposed rule and asked for public comment, receiving more than 110,000 comments. The final rule's effective date is September 18, 2017. The rule requires mandatory compliance for pre-dispute arbitration agreements entered into on or after March 19, 2018. Rules, Rules, Rules and More Rules On July 20 the CFPB issued its Spring 2017 rulemaking agenda. In addition to the arbitration rule, the agenda lists proposed activities related to payday, auto title, and similar lending products, debt collection, overdraft programs on checking accounts, larger participant and nondepository lender registration, prepaid financial products and modernizing, streamlining, and clarifying consumer financial regulations. The Bureau will also carry out its Dodd-Frank Act mandate to assess the effectiveness of significant rules five years after they are implemented, including seeking public comment, and will begin the first in a series of reviews of existing regulations that the CFPB inherited from other agencies through the transfer of authorities under the
Dodd-Frank Act. Finally, the Bureau announced that it recently formed an internal task force to coordinate and deepen its focus on concerns about regulatory burdens and projects to identify and reduce unwarranted regulatory burdens consistent with its objectives under section 1021 of the Dodd-Frank Act. Did We Make the Top Five? On July 6, the CFPB issued a release outlining the top five complaints it was receiving regarding financial products and services. The top five, you ask? 1. Debt collection: Facing a debt you don’t owe (27 % of complaints) 2. Mortgages: Problems when you’re unable to pay (23%) 3. Credit reporting: Incorrect information on your credit report (17%) 4. Credit card: Billing disputes with your credit card company (10%) 5. Bank account or service: Account management questions (10%) If our math is correct, that’s 87% of the complaints the CFPB has fielded. You’ll note that auto financing and leasing didn’t make top billing. CASE OF THE MONTH Car Buyer's Fraud Claim Failed Absent Evidence of Buyer’s Damages: A buyer bought a used car for $21,641 and obtained a "clean" title to the car from the New York State DMV. He drove the car 43,000 miles during the two years he owned it. When he tried to renew the car's registration, the DMV told him it could not renew the registration due to a salvage notation www.fiada.com
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in the vehicle history. The DMV issued him a salvage title. The buyer told the dealership where he bought the car about the salvage title and traded in the used car for a new one. The dealership assessed the tradein value of the used car at $14,700. The buyer sued the dealership for damages of $18,355, the amount he had paid the dealership to date, for, among other things, violations of New Jersey's Consumer Fraud Act. The buyer claimed that the dealership hid the fact that the used car was a salvage vehicle. The trial court granted the dealership's motion for summary judgment. The Superior Court of New Jersey, Appellate Division, affirmed. Under the CFA, a plaintiff must show he suffered either an out-ofpocket loss or a loss in value due to the defendant's unlawful conduct. As the appellate court explained, the buyer sought a full refund of the car's purchase price, which was not the correct measure of damages. The correct measure of damages was the
difference in value between the car as represented to the buyer and the car as it was in fact. However, the buyer did not demonstrate that the car was worth less when the dealership sold it to him than the amount he paid for it. According to the appellate court, the buyer also did not demonstrate that the dealership valued the car incorrectly as a trade-in, especially because the buyer drove it 43,000 miles. Because the buyer did not demonstrate he suffered any loss either when he bought the car or when he traded it in, his CFA claim failed. See Lee v. Hudson Toyota, 2017 N.J. Super. Unpub. LEXIS 1621 (N.J. Super. App. Div. July 5, 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 Association. (2/16). HC# 4848-8454-3277.
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September 2017 — Independent Dealer — 29
INDUSTRY NEWS Help Texas Independent Dealers affected by Hurricane Harvey Through the NIADA Foundation
“We are committed to helping our friends and colleagues in the automotive industry get through this trying time. Our thoughts and prayers got out to all those affected or displaced by this massive storm," Steve Jordan, NIADA Foundation President and CEO said. The NIADA Foundation will be collecting donations for a Hurricane Harvey Disaster Relief fund. 100% of the contributions received will be donated to those needing relief from the effects of flooding, property damage or other disaster related needs attributable to this weather event. Donations will be made in collaboration with the Texas IADA and will be considered on a case by case basis as identified through this collaborative disbursement relationship. Contributions which will assist the Hurricane Disaster Victims directly may be made online at http://www.niada. com/hurricaneharveyrelief.php or mailed to: National Independent Automobile Dealers Association Foundation 2521 Brown Boulevard Arlington, Texas 76006
Did Audi ship thousands of cars with same VIN? Prosecutors investigating Audi's involvement in the Dieselgate scandal have stumbled onto a stranger mystery: Investigators found documents suggesting that thousands of vehicles exported to China, Korea and Japan may have been stamped with identical vehicle identification numbers. The discovery, reported by the German business journal Handelsblatt, was made when investigators searched Audi's audit department for documents related to the Dieselgate scandal during a wide-ranging raid in March. It came after the German Transport Ministry accused the company of cheating on emissions testing for 24,000 Audi A7 and A8 diesels. According to the report, Audi's auditors had the documents about duplicate VINs because they were assessing a "risk of discovery." Audi professed ignorance, with a spokesman saying, "We are not aware of the fact the VIN numbers have been issued more than once." VIN numbers are supposed to be unique to each vehicle, with 17 digits and capital letters that identify that vehicle's DNA — including features such as where a car was built, the model year and engine specifications. They're used to track recalls, ownership histories, registrations and thefts, among other things. Under EU and German laws, VIN numbers are
supposed to remain unduplicated for at least 30 years. Investigators told Handelsblatt they were puzzled as to why Audi would produce vehicles under common VIN numbers. Audi, a division of Volkswagen Group, in June issued a recall for around 24,000 A7 and A8 models built between 2009 and 2013. It later said it would update engine software blamed for the emissions cheating scandal on up to 850,000 diesel cars. The VIN mystery adds a new wrinkle. If nothing else, the duplicate VINs would make for an interesting Carfax search. From Autoblog: https://www.autoblog.com
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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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September 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
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
32 — Independent Dealer —September 2017
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