January 2018 Massachusetts Auto Dealer Magazine by Massachusetts State Automobile Dealers Association, Inc

MSADA, One McKinley Square, Sixth Floor, Boston, MA 02109

auto M a s s a c h u s e t t s

The official publication of the Massachusetts State Automobile Dealers Association, Inc

FIRST CLASS MAIL US POSTAGE PAID BOSTON, MA PERMIT NO. 216

January 2018 • Vol. 30 No. 1

Ma s s a c h u s e t t s

auto D

S ta f f D i r e c t o r y Robert O’Koniewski, Esq. Executive Vice President rokoniewski@msada.org Jean Fabrizio Director of Administration jfabrizio@msada.org Peter Brennan, Esq. Staff Attorney pbrennan@msada.org Jean Harris Administrative Assistant/ Membership Coordinator jharris@msada.org Auto Dealer MAgazine Robert O’Koniewski, Esq. Executive Editor Tom Nash Editorial Coordinator nashtc@gmail.com Subscriptions provided annually to Massachusetts member dealers. All address changes should be submitted to MSADA by e-mail: jbernal@msada.org. Postmaster: Send address change to: One McKinley Square, Sixth Floor Boston, MA 02109 Auto Dealer is published by the Massachusetts State Automobile Dealers Association, Inc. to provide information about the Bay State auto retail industry and news of MSADA and its membership.

Ad Directory Bellavia Blatt & Crossett, P.C. 35 BlumShapiro 34 Boston Herald 40 Ethos Group 2 Leader Auto Resources 11 Lynnway Auto Auction 33 O’Connor & Drew, P.C. 39 Southern Auto Auction 32 ADVERTISING RATES Inquire for multiple-insertion discounts or full Media Kit. E-mail jfabrizio@msada.org Quarter Page: $450 Half Page: $700 Full Page: $1,400

Back Cover: $1,800 Inside Front: $1,700 Inside Back: $1,600

The official publication of the Massachusetts State Automobile Dealers Association, Inc

Ta b l e o f C o n t e n t s

4 5 6 9 10 12 14 18

From the President: Starting 2018 with a Party ASSOCIATE MEMBER DIRECTORY THE ROUNDUP: An Exciting Start to 2018 legislative scorecard TROUBLESHOOTNG: Military Lending Act Interpretation Leaves Dealers at Risk ACCOUNTING: High Profile Breaches: What We Can Learn AUTO OUTLOOK nada Market Beat

Cover Story: 20 MSADA Dealer Summit 24 MSADA Charity Gala 28 The New England

International Auto Show

32 36 37

NEWS From Around the Horn TRUCK CORNER: ATD Set to Unveil Study on the Future Truck Dealer Landscape nada update: Rounding the Corner

COVER PHOTO: BOSTON HERALD

Join us on Twitter at @MassAutoDealers www.msada.org

Massachusetts Auto Dealer JANUARY 2018

From the President

MSADA

Starting 2018 with a Party By Chris Connolly, MSADA President With 2018 well underway, we can now look back on another successful New England International Auto Show knowing that we again presented the best our industry has to offer to an eager public. I want to thank the MSADA staff for their hard work as they put this year’s Dealer Summit and Charity Gala together. The quality bar is raised every year, and it is our staff’s continued dedication that makes this mega event possible. I would also like to take a moment to thank our Gala sponsors. Each of them understands our commitment to helping the next generation of automotive technicians and their support helps us further that goal. We could not do the event each year without them, and it is a privilege and a pleasure that so many have worked with us for more than a decade. A full list of sponsors is available on page 23. If you are a vendor in our industry and do not see your name there, I encourage you “If you have to reach out to us and get involved by contacting Executive Vice President Robert O’Koniewski (rokoniewski@ never called msada.org). As we look over the past year’s sales numbers, some your elected are speculating that the growth cannot continue. We have officials all been in this industry long enough to know that the seas and invited can take us in any number of directions. All we can know them to your for sure today, is that preparedness and diligence is key across all of our operations. dealership, MSADA is here to make sure that while you are making 2018 is the your best move, you do not have to keep your eyes on year.” every piece of legislation locally, on Beacon Hill or down in Washington. I encourage you to check in when you can, to do your part to keep our grass roots strong. If you have never called your elected officials and invited them to your dealership, 2018 is the year. With the NADA Show 2018 around the corner, this is also a good time to thank our own Don Sudbay for his service as NADA Director. Don has ably served in the position through a critical time in our country’s history, helping Massachusetts auto dealers maintain a meaningful presence on Capitol Hill. He has been one of the few among us with their ear to the ground during every twist and turn these past few years. I hope you will join me in offering our thanks for Don’s continued efforts. In addition to the coming NADA action in Las Vegas (see the NADA Update for more details), please keep May 4 clear in your calendar for our MSADA Annual Meeting. Look for more details on that event in the coming months. t

JANUARY 2018

Massachusetts Auto Dealer www.msada.org

Msada Board Barnstable County

Brad Tracy, Tracy Volkswagen

Berkshire County

Brian Bedard, Bedard Brothers Auto Sales

Bristol County

Richard Mastria, Mastria Auto Group

Essex County

William DeLuca III, Woodworth Motors [Open]

Franklin County

Jay Dillon, Dillon Chevrolet

Hampden County

Jeb Balise, Balise Auto Group

Hampshire County

Bryan Burke, Burke Chevrolet

Middlesex County

Chris Connolly, Jr., Herb Connolly Motors Frank Hanenberger, MetroWest Subaru

Norfolk County

Jack Madden, Jr., Jack Madden Ford Charles Tufankjian, Toyota Scion of Braintree

Plymouth County

Christine Alicandro, Marty’s Buick GMC Isuzu

Suffolk County

Robert Boch, Expressway Toyota

Worcester County

Steven Sewell, Westboro Mitsubishi Steve Salvadore, Salvadore Auto

Medium/Heavy-Duty Truck Dealer Director-at-Large [Open]

Immediate Past President Scott Dube, Bill Dube Hyundai

NADA Director

Don Sudbay, Jr., Sudbay Motors

Officers

President, Chris Connolly, Jr. Vice President, Charles Tufankjian Treasurer, Jack Madden, Jr. Clerk, Steve Sewell

Associate Members MSADA A ssociate M ember D irectory ACV Auctions Will Morris (860) 670-7867 ADESA Jack Neshe (508) 626-7000 Albin, Randall & Bennett Barton D. Haag (207) 772-1981 American Fidelity Assurance Co. Dan Clements (616) 450-1871 American Tire Distributors Pamela LaFleur (774) 307-0707 Armatus Dealer Uplift Joe Jankowski (410) 391-5701 AutoAlert Jessica Gates (816) 506-0515 Auto Auction of New England Steven DeLuca (603) 437-5700 Auto/Mate Dealership Systems Troy Potter (877) 340-2677 Bank of America Merrill Lynch Dan Duda and Nancy Price (781) 534-8543 Bellavia Blatt & Crossett, PC Leonard A. Bellavia, Esq (516) 873-3000 Blum Shapiro John D. Spatcher (860) 561-4000 BMO Harris Bank Chris Peck (508) 314-1283 Boston Globe Mary Kelly and Tom Drislane (617) 929-8373 Broadway Equipment Company Fred Bauer (860) 798-5869 Burns & Levinson LLP Paul Marshall Harris (617) 345-3854 C-4 Analytics LLC Rob Stoesser (617) 250-8888 Capital Automotive Real Estate Services Willie Beck (703) 394-1323 Catalogs.com David Solar (954) 908-7122 CDK Global Chris Wong (847) 407-3187 Construction Management & Builders, Inc. Nicole Mitsakis (781) 246-9400 Cox Automotive Ernest Lattimer (516) 547-2242 CVR John Alviggi (267) 419-3261 Dealer Creative Mike Otis (315) 382-3675 Dealerdocx Brad Bass (978) 766-9000 Dealermine Inc. Jane Webb (800) 304-3341 DealerSocket Shelly Del Rosario (949) 900-0300 Downey & Company Paul McGovern (781) 849-3100

Eastern Bank David Sawyer (617) 897-1125 EasyCare New England Greg Gomer (617) 967-0303 Ethos Group, Inc. Drew Spring (617) 694-9761 F & I Resources Jason Bayko (508) 624-4344 Federated Insurance Matt Johnson (606) 923-6350 First Citizens Federal Credit Union Joe Ender (508) 979-4728 Fisher Phillips LLP John Donovan (404) 240-4236 Joe Ambash (617) 532-9320 Gatehouse Auto Jay Pelland (508) 626-4334 Gulf State Financial Services Tom Foster (832) 628-1916 GW Marketing Services Gordon Wisbach (857) 404-0226 Harbor First Ron Scolamiero, Michael Scolamiero (617) 500-4080 Hireology Kevin Baumgart (773) 220-6035 Huntington National Bank John J. Marchand (781) 326-0823 Independent Power Systems Mariana Seabra/Ryan Ferrero (978) 998-4079 Todd Stratford, (617) 777-0365 JM&A Group Jose Ruiz (617) 259-0527 John W. Furrh Associates Inc. Kristin Perkins (508) 824-4939 Key Bank Mark Flibotte (617) 385-6232 KPA Tim Whelan (303) 802-3019 Leader Auto Resources, Inc. Curt Murray (978) 201-4797 Lynnway Auto Auction Jim Lamb (781) 596-8500 M & T Bank John Federici (508) 699-3576 Management Developers, Inc. Dale Boch (617) 312-2100 Micorp Dealer Services Frank Salkovitz (508) 832-9816 Mid-State Insurance Agency James Pietro (508) 791-5566 Mintz Levin Kurt Steinkrauss (617) 542-6000 Murtha Cullina Thomas Vangel (617) 457-4000 Nancy Phillips Associates, Inc.

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Nancy Phillips (603) 658-0004 Northeast Dealer Services Jim Schaffer (781) 255-6399 O’Connor & Drew, P.C. Kevin Carnes (617) 471-1120 Performance Management Group, Inc. Mark Puccio (508) 393-1400 PreOwned Auto Logistics Anthony Parente (877) 542-1955 R.L. Tennant Insurance Agency, Inc. Walter F. Tennant (617) 969-1300 Reflex Lighting Daryl Swanson (617) 269-4510 Resources Management Group J. Gregory Hoffman (800) 761-4546 Reynolds & Reynolds Mike O’Connor (860) 462-7958 Robinson Donovan Madden & Barry, P.C. James F. Martin, Esq. (413) 732-2301 Samet & Company John J. Czyzewski (617) 731-1222 Santander Bank Richard Anderson (401) 432-0749 Schlossberg & Associates, LLC Michael O’Neil, Esq. (781) 848-5028 Sentry Insurance Company Eric Stiles (715) 346-7096 Shepherd & Goldstein CPA Ron Masiello (508) 757-3311 Southern Auto Auction Tom Munson (860) 292-7500 SPIFFIT Sean Ugrin (303) 862-8655 Sprague Energy Claude Peyrot (603) 430-7254 SunPower Christie McCarthy, (408) 457-2357 SunTrust Bank Michael Walsh (617) 345-6567 Target Dealer Services Andrew Boli (508) 564-5050 TD Auto Finance Marc Gerhart (781) 697-1525 TrueCar Pat Watson (803) 360-6094 US Bank Vincent Gaglia (716) 649-0581 Wells Fargo Dealer Services Stephen Janetz (215) 986-8498 Zurich American Insurance Company Steven Megee (774) 210-0092

Massachusetts Auto Dealer

JANUARY 2018

The Roundup

An Exciting Start to 2018 By Robert O’Koniewski, Esq. MSADA Executive Vice President rokoniewski@msada.org Follow us on Twitter • @MassAutoDealers

Auto Show – Charity Gala – Dealer Summit On Friday, January 12, your Association and the Massachusetts State Auto Dealers Charitable Foundation held its 21st Auto Show Charity Gala to celebrate our 61st edition of the New England International Auto Show at the Boston Convention and Exhibition Center. We feted over 500 guests, including our dealers, sponsors, and other industry representatives, to raise funds for our auto tech scholarship program. Party-goers were entertained by the rockin’ sounds of the Love Dogs. Based on our previous years’ successes and enthusiasm, we again ran a casino party room where attendees could roll the dice and play cards to win great prizes, all for a worthy cause – our tech scholarships. Congratulations to our big winners, in order of finish: Johna Cutlip, Max Huguenin, Troy Potter, Jesse Pearce, Steve Titus, and Emily Dube. Gala attendees had access to the auto show floor, including five “ride and drive” offerings. This month’s magazine has a full recap of these events. Prior to the evening’s party, we held our fifth annual Dealer Summit where dealers and their key managers heard presentations from Don Reed of DealerPro (“Making the Case for Change in Fixed Ops”); David Pyle of Cox Automotive (“The Near Future of the Auto Industry – Five Key Questions Dealers are Faced with Today”); Hireology’s Max Lowenbaum (“The Best Team Wins”); Mike Hammond of O’Connor & Drew (“Speed Round: The Five Steps to Take Today to Protect Your Data Tomorrow”); Dealer Creative’s Mike Otis and Jeff JANUARY 2018

Massachusetts Auto Dealer www.msada.org

Hayes (“Don’t Skip ‘Click’”); and our staff attorney, Peter Brennan, who provided an update on the ZEV situation in Massachusetts. Finally, we owe a huge debt of gratitude to our generous sponsors for these events. Many of our associate members purchased sponsorships and event tickets, and we have detailed their levels of participation in this month’s magazine. As always, we ask our member dealers to keep our associates and sponsors in mind when they seek various services. Our Dealer Summit and Auto Show Charity Gala would not be the successes they were without this outside support. Thank you to all our sponsors.

MSADA Dealer Support Programs Re-Approved for 2018 Since 2014 your association has administered a program in which we subsidize the cost of certain compliance efforts dealers go through at their stores. Through this program, we have supported dealers’ use of Fisher Phillips for employment law services, such as pay plans, employee handbooks, etc.; KPA and Furrh Associates for OSHA and environmental compliance; and O’Connor & Drew for tax compliance and cybersecurity protections. Your Board of Directors voted at its December board meeting to continue these programs for 2018. In addition to the compliance assistance, your Board voted to reauthorize the community outreach program for 2018, in which we assist dealers’ efforts for up to $1,000 annually. Do not hesitate to contact us regarding these programs so you do not lose out on these services supported by your association.

MSADA IRS Form 8300 IRS Reporting by January 31 The IRS requires any person who receives more than $10,000 in cash in a single transaction or a series of related transactions while conducting his or her trade to file a Form 8300 with the agency. A business must file the Form 8300 to report cash paid to it if the cash payment is: • Over $10,000; • Received as: • One lump sum of over $10,000, or • Two or more related payments that total in excess of $10,000, or • Payments received as part of a single transaction (or two or more related transactions) that cause the total cash received within a 12-month period to total more than $10,000. • Received in the course of trade or business; • Received from the same buyer (or agent); and • Received in a single transaction or in two or more related transactions. Under the IRS rules, a business must notify its customers, in writing, by January 31 of the subsequent calendar year that the business has filed a Form 8300 regarding the cash transaction with the customer. (If a letter was sent to the customer at the time of the transaction and the filing of the Form 8300, a second letter is not required.) Neither the code nor the regulations mandate a specific format for the customer letter; the regulations, however, do require the following minimum requirements in the letter: • The name and address of the dealership and a contact person there submitting the Form 8300; • The aggregate amount of reportable cash, received by the dealership filing the Form 8300 during the calendar year, in all related cash transactions; and • A statement that the information contained in the letter is being reported to the IRS. As an alternative to filing the paper Form 8300, businesses may file electronically the Form 8300 using FinCEN’s Bank

Secrecy Act (BSA) Electronic Filing System. E-filing can be done at no charge, and it is a quick and secure way for individuals to file their Form 8300s. Filers receive an electronic acknowledgement of each submission. To receive more information, visit the BSA E-Filing System at http://bsaefiling.fincen.treas.gov/main.html. Additional information regarding the Form 8300 requirements is available at these IRS links: • h t t p : / / w w w. i r s . g o v / B u s i n e s s e s / S m a l l - Businesses-&-Self-Employed/ Report-of-Cash-Payments-Over-10000Received-in-a-Trade-or-Business-Motor-Vehicle-Dealership-QAs • http://www.irs.gov/pub/irs-pdf/f8300. pdf

Deadline for Use of New FTC Buyer’s Guide is January 27, 2018 In November 2016 the Federal Trade Commission (FTC) approved revisions to its Used Car Rule. This rule change included adding air bags and catalytic converters to the list of major defects that occur in used vehicles and requiring the provision of a Spanish language Buyer’s Guide if the sale was conducted in Spanish. Most impactful from this rule was the modification of the Buyer’s Guide that must be displayed in each car that is offered for sale on a dealership’s lot. This rule became effective January 28, 2017, but it allowed a one-year grace period so dealers could use their existing inventory of the current Buyer’s Guide before enforcing compliance with the new Buyer’s Guide. This one-year grace period expires January 27, 2018. As of this date, the old Buyer’s Guides can no longer be used. Enforcement actions for non-compliance with the Used Car Rule can run up to $40,654 per violation. Your MSADA is selling the new Guide through our forms program with Reynolds & Reynolds (phone: (800) 344-0996; email: RDS@reyrey.com). Please refer to our previous bulletins and www.msada.org

magazine writings on this issue for additional information.

Legislative Update – Inspection Station Licenses; Used Vehicle Record Book Reform This month the Senate Committee on Ways and Means reported out favorably Senate 2261, An Act Providing for the Licensing of Certain Motor Vehicle Inspection Stations, which was originally filed several years ago to address the situation in which new franchised dealerships were not able to obtain vehicle inspection licenses to conduct the sticker process prior to vehicle delivery to their customers. Senate 2261 would create a statutory requirement for the Registry of Motor Vehicles (RMV) to grant an inspection facility license, regardless of the saturation of vehicle inspection station licenses within the locale, to any franchised new car dealer that abides by the appropriate rules and regulations and invests a threshold dollar amount of $2.5 million in a new facility or the rehabilitation of an existing facility. On January 25 the full Senate passed this legislation and sent it on to the House for its consideration. (Similar legislation was engrossed by the Senate in the last legislative session but died in the House.) Further, as we were going to press, the Senate Committee on Ways and Means reported out favorably Senate 2269, An Act Relative to the Used Vehicle Record Book, which would reform the 100-year old obligation dealers must comply with regrading maintaining a written log book. The legislation would allow a dealer to comply with the law, in the alternative of keeping a hand-written book, by maintaining the required information in the dealer’s DMS, in a form and format approved by the RMV. The reform of this outdated provision will not impair the ability of the dealer to make this information immediately available upon request by RMV or law enforcement officials, as it replaces the current, outdated requirement to maintain handwritten records that no longer reflects the realities of today’s modern business

Massachusetts Auto Dealer JANUARY 2018

The Roundup technologies. The Senate is scheduled to take up the bill on February 1. The House and Senate each approved this legislation in the last legislative session, but it died during a procedural delay in the House on the last day of that session.

2018 Auto Tech Competition On January 19 MSADA hosted 160 students from 17 vocational technical high schools at the preliminary written test portion of our 2018 auto tech competition in Marlborough. The results of the written test winnowed down the group to the top ten two-person senior class teams from the competing schools and the top four two-person junior teams from the whole group. These teams will compete at the hands-on test on February 10 at Universal Technical Institute’s auto tech educational facility in Norwood. The top senior team will be selected to represent Massachusetts at the New York Auto Show national competition on April 2-4. The top ten teams competing for the state title come from the following high schools: • Assabet Valley Regional Tech High School (two teams) • Bay Path Regional Vocational Tech High School • Blackstone Valley Regional Tech High School • Bristol-Plymouth Regional Tech (two teams) • Cape Cod Regional Technical High School • Nashoba Valley Technical High School • Pathfinder Reginal Technical High School • Upper Cape Cod Regional Technical High School. The schools also fielding junior teams are Assabet Valley Regional, Blackstone Valley Regional, Old Colony Regional, and Upper Cape Cod Regional.

2018 NADA Dealership Workforce Now Open The 2018 Dealership Workforce Study (DWS) is now open for enrollment. NADA and ATD members that com-

JANUARY 2018

plete a questionnaire and submit their payroll records by April 30, 2018, will receive two complimentary reports and a one-year subscription to the DWS Database and Search Tool. The two complimentary reports are: • Automotive Retail: National & Regional Trends in Compensation, Benefits & Retention, which is the industry’s top resource for helping dealers meet their No. 1 challenge of attracting and retaining productive employees. It contains a clear analysis of employment trends, including national and regional data for 60 light-vehicle and commercial-truck dealership career positions as well as data on pay, benefits and turnover and more; and • Compensation, Benefits and Retention: How Your Dealership Compares, which is an individualized comparative report for each participating dealership. Dealerships that participate in the study will also receive access to the entire online DWS Database and Search Tool, which includes more than 1.6 million payroll records from over 10,000 dealerships. The Search Tool categories include: report type (compensation or tenure), franchise/brand, sales volume, geographic location (national, regional and state), dealership department, and job title. For example, a dealership can compare compensation for all service positions in neighboring states by using the Search Tool. Enroll today at www.nadaworkforcestudy.com. For questions, contact Dorenda Fisher at (703) 556-8583 or email workforcestudy@nada.org.

2018 Dues Invoices Earlier this month your Association sent out 2018 dues invoices to all our dealership and associate members. Our members’ dues help fund the Association’s activities on their behalf, including our lobbying on Beacon Hill and in Washington, our member counsel services, and our education and training activities. Over the last several years we have witnessed quite a bit of economic disruption

Massachusetts Auto Dealer www.msada.org

in our industry, including governmental over-regulation. More than ever, our dealers need a strong MSADA. MSADA will continue to lead on the various issues that threaten the viability of our dealerships. We will strive tirelessly to keep you informed of developments in our industry and how they will play out in Massachusetts. These efforts also include working closely with NADA to better serve our members. Our strength lies in our members. With your continued support and membership renewal, we can build on our current foundation and begin to enhance your Association’s core purposes of communication, advocacy, and education.

Save the Dates: Leadership Summit – March 8, Natick; Annual Meeting – May 4, Boston; Dealer Day on Beacon Hill – May 23; Dealer Hall of Fame Ceremony – October 3-5, Chatham We have a number of important events lined up for our members in 2018. On March 8 at the Verve Hotel in Natick, we will conduct our third annual leadership summit in conjunction with our F&I partner, Ethos Group. Your Association will conduct this year’s Annual Meeting on Friday, May 4, at the Mandarin Oriental Hotel, in Boston. We are lining up a number of exciting industry speakers for the day. Be on the lookout for our invitation and registration materials. Also, be sure to circle Wednesday, May 23, for our annual Dealer Day on Beacon Hill, when we schedule meetings for our attending dealers with their legislators at the State House, to lobby on the important issues of the day for dealers and our industry. Finally, in order to honor those who have been titans within our industry in Massachusetts, your Association will conduct its inaugural Dealer Hall of Fame ceremony October 3-5 at the Chatham Bars Inn on Cape Cod. Be on the lookout for nomination and registration materials. t

MSADA

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Massachusetts Auto Dealer JANUARY 2018

Troubleshooting

MSADA

Military Lending Act Interpretation Leaves Dealers at Risk By Peter Brennan, Esq.

MSADA

Staff Attorney The Department of Defense (DoD) recently set off a panic amongst the dealer legal community when it issued an interpretation of the Military Lending Act (MLA) that could have major repercussions for automobile dealers throughout the country that sell ancillary products such as GAP to active duty members of the military or their dependents. Much of the information below comes from NADA and has been previously discussed in MSADA Legal Bulletins #71 & #72 of 2017. If you have not previously done so, please review this issue with your legal counsel immediately. The MLA imposes a number of duties and restrictions on businesses that extend credit to military members. Certain transactions are exempted from these requirements, including any credit transaction that is intended to finance the purchase of (i) a motor vehicle when the credit is secured by the motor vehicle being purchased or (ii) other personal property when the credit is secured by the personal property being purchased. In 2015, the DoD issued a regulation that greatly expanded the types of consumer credit covered by the MLA (generally expanding coverage to any type of credit covered by the Truth In Lending Act). However, the exceptions for motor vehicle financing and other personal property financing remained. Shortly before the amendment took effect in 2016, the DoD JANUARY 2018

issued a narrow interpretation of the personal property financing exclusion which generally stated that financing items beyond the personal property being financed took the transaction outside the scope of the personal property exemption to the MLA’s requirements. At that time, the DoD did not address the motor vehicle financing exemption, despite the fact that the motor vehicle exemption was worded identically to the personal property exemption. For more than a year, the DoD was silent on the issue. Then, on December 14, 2017, the DoD, without seeking comment from the industry, determined that the MLA would apply to certain transactions between automobile dealers and those considered “covered borrowers” under the MLA. According to this new interpretation of the MLA, if, as part of a vehicle financing transaction with a “covered borrower” under the MLA, a creditor: (i) extends financing for a credit-related product or service (such as GAP insurance or credit insurance), or (ii) provides cash out financing, the creditor must comply with the full range of duties and restrictions imposed by the MLA. The interpretation applies retroactively to all transactions since October 3, 2016. The term “covered borrower” in the MLA refers to “active duty” service members and their dependents. It is important that dealers screen all customers through a DoD website (listed below) or a nationwide Consumer Reporting Agency (CRA) report to determine if a customer has “covered borrower” status under the MLA before offering GAP, Credit Life, or Credit Accident and Health products to that customer, and that none of these products should be offered to a customer considered a “covered borrower” under the MLA. A dealer can afford themselves of a legal safe harbor if they (1) run the customer’s name and personal information through the following DOD website to determine

Massachusetts Auto Dealer www.msada.org

the customer’s status before offering the products: https://mla.dmdc.osd.mil/mla/#/ home; or (2) use a nationwide Credit Reporting Agency, or reseller of the CRA’s reports, that provides an indicator or code on the report of all customers with active duty or active duty dependent status. Please note that these safe harbor methods are only effective if the dealer timely creates and maintains a record of the search and the information that was discovered. Why is it so important to avoid the long arm of the MLA? For starters, the penalties for violations are severe, with knowing violations treated as criminal misdemeanors subject to federal prosecution. Even an unknowing violation risks a civil penalty that could include having the transaction declared void, $500 per violation in actual damages, punitive damages, attorney’s fees, and a private right of action which leaves the business at risk of class action litigation. There is also concern within the dealer legal community that, under the MLA, a dealership that lacks a banking license is prohibited from taking a security interest in a vehicle in a transaction that is subject to the MLA, although this issue has not yet been litigated. Finally, please note that it is against the law to ask for a copy of a customer’s military identification, as this constitutes a violation of Title 18, U.S. Code, Part I, Chapter 33, Section 701, and is punishable by fine and/or imprisonment. While a dealer or other commercial establishment may request to see a military/government identification, you may not photocopy or duplicate it in any way. t If you have questions regarding this or any other issue please contact Robert O’Koniewski, MSADA Executive Vice President, at rokoniewski@msada.org, or Peter Brennan, MSADA Staff Attorney, at pbrennan@msada.org, or by phone at (617) 451-1051.

ACCOUNTING

MSADA

High Profile Breaches: What We Can Learn By Robbie Harriman O’Connor & Drew

It has been said of cybersecurity attacks that it is not a matter of if, but when. When an attack on a high-profile target is successful and a breach occurs, the victim immediately becomes a sacrificial lamb. Media frenzy takes hold. At this point, the victim is no longer a victim in the public eye, but a pariah. Clients, consumers, and shareholders demand answers and that points of fault be identified. In the wake of a breach, speculation, blame-placing, and criticism take place – which effectively places the organization under a microscope. While much of this negative publicity is warranted, such events can also act as great case studies for breach prevention. While it is unfortunate that these breaches occur, they often motivate others to re-evaluate their security posture. In short, we can learn from their mistakes. Here are five breaches that can teach us some valuable lessons about the importance of the fundamental controls that make up security frameworks. 1. Equifax. This is probably the most known and talked about breach in recent history. Last September, Equifax announced that it had suffered a major data breach that exposed 143 million Americans’ financial data, making it one of the largest breaches in history. The cause of this breach was tragically simple – an unpatched vulnerability. Solution: Vulnerability Scanning. Vulnerability scanning can ensure that vulnerabilities are discovered and patched before they can be exploited. In the case of Equifax, the flaw was patched upon discovery, but by the time it was patched

the attack had already been executed. So, while patch management is crucial, you cannot patch what you do not know needs patching. 2. Tewksbury Police Department. A local police department made national news when it was infected with a variation of crypto-ransomware known as Crypto-Locker. Crypto-ransomware is malicious software that encrypts data, scrambling files thereby making them unreadable to the user. The data can be decrypted only by paying the attacker a ransom. While there are several preventative controls that can help, there is one crucial measure that can be depended on when all others fail. Solution: Backups. Frequent backups are critical in recovering from ransomware. Restoration from backup is often the only mechanism to restore this encrypted data. If you cannot restore from backup, you may be looking at paying the ransom. Some advanced variants can even traverse your network and infect mapped drives and storage devices. For this reason, it’s crucial to have an offline or segregated backup solution. 3. Beau Townsend Ford-Lincoln (Vandalia, Ohio). Though not as high profile as some of the previous breaches, this attack involved a man-in-the-middle attack which resulted in the interception of a $736,225.40 transfer. The transfer was intended to go from Don Hinds Ford in Fishers, Indiana, to Beau Townsend Ford-Lincoln. Solution: Phishing Campaigns. “Attack” your employees via simulated phishing exercises before a malicious attacker does. Validate the effectiveness of your security awareness training program, and identify users who are prone to clicking on suspicious links or opening suspicious attachments. Employees at all levels of the organization should know how to identify an illegitimate email. Simple training like this could have prevented the wire transfer fraud which af-

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fected Beau Townsend Ford-Lincoln. 4. Anthem Medical. In February of 2015, Anthem was the victim of an attack that led to the theft of 78.8 million current and former customers’ personal information. The cause of this breach? A single user at an Anthem subsidiary clicking on a link in a phishing email. Solution: Mail Protection – While phishing campaigns may be effective in deterring employees from opening emails, a spam filter is the first line of defense. Additionally, spam filters can notify employees when they are sending or receiving emails outside of the organization. 5. DealerBuilt. This software company provides management systems for auto dealers all over the country. Last year, it was discovered that 128 dealership systems were being backed up to DealerBuilt’s central systems with no encryption and directly exposed to the internet. This led to a massive breach of personal employee and customer information Solution: Encryption. Critical data, especially that which contains personal identifiable information, should be encrypted during transmission and encrypted at rest. While we hear most often about breaches affecting large enterprises, attacks on small businesses are very common, just not as highly publicized. In fact, over 70% of cyberattacks target small businesses, and 60% of small and medium-sized businesses go out of business after a successful cyberattack. Cybersecurity is a challenge in this rapidly-evolving landscape. While there may not be a single solution, there are security frameworks that can be applied to any environment to enhance your security posture. t Robbie Harriman is an IT Auditor with O’Connor & Drew, P.C. He can be reached at rharriman@ocd-tech.com

Massachusetts Auto Dealer JANUARY 2018

Troubleshooting

MSADA

Military Lending Act Interpretation Leaves Dealers at Risk By Peter Brennan, Esq.

MSADA

Massachusetts Auto Dealer www.msada.org

the customer’s status before offering the products: https://mla.dmdc.osd.mil/mla/#/ home; or (2) use a nationwide Credit Reporting Agency, or reseller of the CRA’s reports, that provides an indicator or code on the report of all customers with active duty or active duty dependent status. Please note that these safe harbor methods are only effective if the dealer timely creates and maintains a record of the search and the information that was discovered. Why is it so important to avoid the long arm of the MLA? For starters, the penalties for violations are severe, with knowing violations treated as criminal misdemeanors subject to federal prosecution. Even an unknowing violation risks a civil penalty that could include having the transaction declared void, $500 per violation in actual damages, punitive damages, attorney’s fees, and a private right of action which leaves the business at risk of class action litigation. There is also concern within the dealer legal community that, under the MLA, a dealership that lacks a banking license is prohibited from taking a security interest in a vehicle in a transaction that is subject to the MLA, although this issue has not yet been litigated. Finally, please note that it is against the law to ask for a copy of a customer’s military identification, as this constitutes a violation of Title 18, U.S. Code, Part I, Chapter 33, Section 701, and is punishable by fine and/or imprisonment. While a dealer or other commercial establishment may request to see a military/government identification, you may not photocopy or duplicate it in any way. If you have questions regarding this or any other issue please contact Robert O’Koniewski, MSADA Executive Vice President, at rokoniewski@msada.org or Peter Brennan, MSADA Staff Attorney, at pbrennan@msada.org or by phone at (617) 451-1051.

ACCOUNTING

MSADA

High Profile Breaches: What We Can Learn By Robbie Harriman O’Connor & Drew

fected Beau Townsend Ford-Lincoln. 4. Anthem Medical. In February of 2015, Anthem was the victim of an attack that led to the theft of 78.8 million current and former customers’ personal information. The cause of this breach? A single user at an Anthem subsidiary clicking on a link in a phishing email. Solution: Mail Protection. While phishing campaigns may be effective in deterring employees from opening emails, a spam filter is the first line of defense. Additionally, spam filters can notify employees when they are sending or receiving emails outside of the organization. 5. DealerBuilt. This software company provides management systems for auto dealers all over the country. Last year, it was discovered that 128 dealership systems were being backed up to DealerBuilt’s central systems with no encryption and directly exposed to the internet. This led to a massive breach of personal employee and customer information Solution: Encryption. Critical data, especially that which contains personal identifiable information, should be encrypted during transmission and encrypted at rest. While we hear most often about breaches affecting large enterprises, attacks on small businesses are very common, just not as highly publicized. In fact, over 70% of cyberattacks target small businesses, and 60% of small and medium-sized businesses go out of business after a successful cyberattack. Cybersecurity is a challenge in this rapidly-evolving landscape. While there may not be a single solution, there are security frameworks that can be applied to any environment to enhance your security posture. t Robbie Harriman is an IT Auditor with O’Connor & Drew, P.C. He can be reached at rharriman@ocd-tech.com

Massachusetts Auto Dealer JANUARY 2018

AUTO OUTLOOK

JANUARY 20178 Massachusetts Auto Dealer

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MSADA

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Massachusetts Auto Dealer JANUARY 2018

AUTO OUTLOOK

JANUARY 20178 Massachusetts Auto Dealer

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MSADA

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Massachusetts Auto Dealer JANUARY 2018

18 JANUARY 2018

Patrick Manzi

NADA Senior Economist

Boyi XU

Economist

JANUARY 2018

Massachusetts Auto Dealer www.msada.org

MSADA

NADA MARKET BEAT

JANUARY 2016

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Massachusetts Auto Dealer JANUARY 2018

2018 MSADA DEALER SUMMIT

Dealer Summit: Robert O’Koniewski MSADA Executive Vice President MSADA Executive Vice President Robert O’Koniewski welcomed dealers, associate members, and sponsors to the 2018 Dealer Summit at the New England International Auto Show with positive words about where the industry is heading. Remaining engaged in what is occurring at all levels is critical for dealers to understand how new laws and regulations might affect their bottom lines, O’Koniewksi said. The summit is one of many ways MSADA helps its members stay on top of the latest trends. The afternoon program featured speakers from across the automotive industry offering dealers insight into the road ahead. The common theme throughout: The only certainty is change.

Max Lowenbaum Hireology When Max Lowenbaum began working at applicant training and career website Hireology, he found himself in a situation dealers face every day. “My job was to hire and train and onboard millennials,” he explained. “I learned very quickly that this generation is different.” If dealers are willing to change, he said, their dealerships will reap the benefits of an undervalued workforce that is emerging as tomorrow’s leaders. Outlining novel sales compensation and interviewing methods, Lowenbaum stressed the need for dealers to adapt to the workforce pool or risk being left behind. JANUARY 2018 Massachusetts Auto Dealer

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MSADA MSADA

Revving up for 2018 Mike Hammond O’Connor & Drew “I am not going to help you sell more cars,” O’Connor & Drew’s Mike Hammond opened, “but I might help you save your business.” The business world is losing the war against cyber attacks, Hammond noted. “Small businesses are getting pummeled, but there are very basic steps people can take to ward off attackers.” Thieves will more often look for the car doors that are open rather than smash windows. “Those little things are the targets of opportunity, and those are the ways people are being breached,” he said. Dealers need to realize the value of the information they store about their customers, and take basic steps to secure it. “Dealers will say that info is only in the DMS, but then we will go in and see six months of copied driver licences and credit application data.” Hammond says the time to do a check-up or establish proper safeguards is now, before victimization occurs.

David Pyle Cox Automotive David Pyle began by sharing the story of selling his first car, in 1989, and buying his son his first car 29 years later. “The conversation was the same,” he began. The retail model for automobiles has been in place for 115 years, Cox explained, and it is finally moving toward something unrecognizable from the days of Henry Ford. The average price of a vehicle has risen dramatically higher than what many can afford, Pyle notes. “The payment shopper has become more and more important,” he said. “As the length of loans increase to longer than five years, we do not see this slowing down.” When it comes to goods that buyers cannot live without, Pyle added, cars have also now taken second place to smartphones. So what is a dealer to do? Pyle points to digital advertising as a way to be where the customers are, but that dealers should not conflate that idea as customers wanting to actually buy online. Instead, he says, the future of the industry will depend on research being performed online by customers, and dealers who earn their trust still being the go-to place to secure the sale.

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Massachusetts Auto Dealer JANUARY 2018

Dealer Summit: Revving up for 2018

Mike Otis and Jeff Hayes Dealer Creative Dealer Creative representatives Mike Otis and Jeff Hayes offered dealers several ways they can refresh their TV advertising. “If we start talking about what is interesting to us as the dealer, that may not be of interest to the consumer,” Otis said. “While a consumer might be out shopping for a car, they might not be shopping for a dealer just yet.”

Think cute, not corny, they said. Humanizing a dealership is what will set it apart. “We need to change the perception that people are thinking, ‘They are selling me something,’” Hayes said. Breaking with decades of convention, the duo offered that dealers should try to say nothing for the first five seconds of an ad. “Put in front of the viewer something that they are truly interested in.”

JANUARY 2018 Massachusetts Auto Dealer

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MSADA MSADA

Peter Brennan MSADA Staff Attorney

Don Reed DealerPro “If the only thing I accomplish in speaking with you today is to get you to think big, that will be a success,” DealerPro’s Don Reed opened. “What is holding you back?” he asked. “It is our comfort zone. And all your employees have comfort zones. We have to become the comfort zone movers, expanding a comfort zone to get different results. Something has to change.” Success, Reed says, is a choice. “Choice number one is to do exactly what you did last year, and choice number two is to try something different.”

While less than 2 percent of all vehicles sold in Massachusetts are zero emission models, MSADA Staff Attorney Peter Brennan says dealers need to keep their eye on this emerging market to ensure they are taking advantage of the Commonwealth’s incentives to put more on the road. “If we keep the momentum going, we may achieve levels similar to California by 2025,” Brennan said. Brennan points out that the Association remains wary that manufacturers could eventually receive credit for simply dumping Zero Emission Vehicles on dealership lots without accountability for whether they are sold. Uncertainty in Washington means some of these rules could be a more remote possibility than under the previous executive administration. In the meantime, the MOR-EV program in Massachusetts continues to gain popularity and will likely remain well-funded.

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Massachusetts Auto Dealer JANUARY 2018

MSADA GALA

A D SA

JANUARY 2018 Massachusetts Auto Dealer

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MSADA MSADA

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Massachusetts Auto Dealer JANUARY 2018

CASINO NIGHT

JANUARY 2018

Massachusetts Auto Dealer www.msada.org

T hank You From the New Car Dealers of Massachusetts and the Auto Tech Scholarship Students you have helped, we thank our event sponsors. ROCKET FUELED TrueCar NITROUS BOOSTED Cox Automotive HIGH OCTANE Albin, Randall & Bennett Fisher Phillips Northeast Dealer Services TD Auto Finance SHOT-OUT-OF-CANNON FAST Armatus Dealer Uplift Blum Shapiro CVR DealerDOCX Reynolds & Reynolds WELCOME GIFT SPONSOR SunPower CASINO ROOM SPONSOR Ethos Group FULL BAR SPONSORS American Fidelity Oâ&#x20AC;&#x2122;Connor & Drew FOOD STATION SPONSORS ACV Auctions American Tire Distributors Boston Herald Lynnway Auto Auction Santander Bank Southern Auto Auction Zurich DESSERT STATION SPONSOR Key Bank Murtha Cullina RACING STATION SPONSORS BMO Harris Bank Huntington Bank PARTING GIFT Burns & Levinson FRIENDS OF THE SCHOLARSHIP PROGRAM Bank of America/Merrill Lynch Downey & Company Performance Management Group www.msada.org

Massachusetts Auto Dealer JANUARY 2018

NEW ENGLAND INTERNATIONAL AUTO

JANUARY 2018

Massachusetts Auto Dealer www.msada.org

MSADA

SHOW

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Massachusetts Auto Dealer JANUARY 2018

NEW ENGLAND INTERNATIONAL AUTO MSADA DEALER SERVICES

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SHOW

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Massachusetts Auto Dealer JANUARY 2018

NEWS from the NEWS from Around Around the Horn Horn from Around

NEWS the Horn

NORTHAMPTON

TommyCar Auto Group Donates Funds to Veterans The TommyCar Auto group donated to the Northampton Veteran Affairs Medical Center $10 from every vehicle sold for the month of November. The stores were able to raise a total of $1,480, with co-owner Carla Cosenzi presenting a check in December. “Our veterans have dedicated and sacrificed their lives to protect and keep our country safe,” said Carla Cosenzi, president of Northampton Volkswagen, Country Nissan, and Country Hyundai. “As a business owner, it is my obligation to give back to our veterans when our veterans give so much.” The Northampton Veterans Affairs Medical Center provides primary, specialty, and mental health care to 120,000. The money donated will assist in several services and health care programs available for veterans.

JANUARY 2018

Massachusetts Auto Dealer www.msada.org

MSADA

DEALER SERVICES BOSTON

Herb Chambers Makes Christmas Donation On Christmas Eve, Cardinal Seán P. O’Malley and Herb Chambers, owner and CEO of the Herb Chambers Companies, joined Catholic Charities of Boston and members of the Menino family in helping to distribute 4,000 Christmas gifts to nearly 400 children and families at Catholic Charities’ Teen Center at St. Peter’s in Dorchester during the center’s annual Christmas Gift event. Established by the late Mayor Thomas Menino over 20 years ago and sponsored through a combined effort from the Menino family, Catholic Charities, and area parishes, the Christmas Gift event provides needy children and families with presents for the holidays. This year, several organizations made contributions in support of the Menino family’s endeavors, including Herb Chambers, who presented Cardinal O’Malley with a gift of $25,000 during the event.

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Massachusetts Auto Dealer JANUARY 2018

NEWS from Around the Horn WAKEFIELD

Subaru Dealership Raises Funds for Make-A-Wish Foundation Subaru of Wakefield teamed up with Make-A-Wish Massachusetts and Rhode Island to host a “Pack the Outback” toy drive, asking customers and community members to donate toys for wish kids and their siblings as part of the tenth annual Subaru “Share the Love” event. Wish children in attendance at the toy drive included Nikolas Hourican, 10, of Beverly, diagnosed with Stage 4 Kidney Disease (wished to go to Grand Canyon); Grace Evans, 9, of Peabody, diagnosed with uncontrolled Epilepsy and Tuberous Sclero-

JANUARY 2018

sis (wished to go on a Walt Disney-themed Cruise); and Molly Malone, 17, of Lynnfield, diagnosed with Ewing Sarcoma (wished to go to Paris Fashion Week). During the 2017 Subaru “Share the Love” event, Subaru donated $250 for every new Subaru vehicle sold or leased from November until January to participating charities selected by the purchaser, including Make-A-Wish America. In addition, Subaru of Wakefield chose Make-A-Wish Massachusetts and Rhode Island as the “Hometown Charity.”

Massachusetts Auto Dealer www.msada.org

MSADA GREAT BARRINGTON

Former Pontiac Dealer to Celebrate 100th Birthday with Community Local resident William F. Dempsey celebrated his 100th birthday in January. An open house in his honor was scheduled to be held at First Congregational Church. Dempsey was born in Bridgeport, Connecticut, and moved to South Egremont, Massachusetts, with his family in 1921. His father bought an old livery/ buggy business there and started an automobile repair shop. In 1936, the business moved to Railroad Street, Great Barrington, under the name of Dempseyâ&#x20AC;&#x2122;s Garage. In 1949, Bill and his brother, Matt, relocated the business to 42 Bridge Street. Dempseyâ&#x20AC;&#x2122;s Garage became the oldest Pontiac dealership in Western Massachusetts. The business also had GMC,

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Buick, Triumph, and Oldsmobile franchises. Bill retired from the business in 1983. Dempsey and his wife, Lucile, have been married for 68 years. For decades, they enjoyed traveling across the country in motorhomes. They have traveled to 48 of the 50 states. Until five years ago, he was able to drive their American Coach RV, car in tow, to Jensen Beach, Florida, each winter. Dempsey is a member of the First Congregational Church, a past president of Rotary, a former board member of the Great Barrington Savings Bank, and a 70-year member of the Great Barrington Cincinnatus Lodge. He served in the United States Navy from 1941 to 1945. t

Massachusetts Auto Dealer JANUARY 2018

TRUCKOUTLOOK CORNER AUTO

MSADA

ATD Set to Unveil Study on the Future Truck Dealer Landscape By Steve Parker

Baltimore Potomac Truck Centers ATD Chairman Steve Parker is chairman of ATD, a division of NADA, which represents 1,800 heavy- and medium-duty truck dealerships. He is president of Baltimore Potomac Truck Centers in Linthicum, Maryland, which operates five full-service commercial truck dealership

locations

with

Mack, Volvo, and Hino Trucks franchises in Maryland and Virginia.

JANUARY 2018

our numbers and providing customers with reveWhen I rang in the New Year with my wife, nue-generating uptime through product sales, serSue, and our family, I could scarcely believe that vice and parts, etc. However, an equally important the flashing numbers on the television heralded facet of what we do revolves around managing our 2-0-1-8. As a father and grandfather, I wondered people. This includes recruiting our staff and givwhat the future has in store for my family. And ing them the constant training they need to remain as a truck dealer, I wondered what it has in store competitive in today’s business, providing opporfor the commercial truck industry. If you have tunities for management development so people thought the same thing, I am pleased to tell you can remain confident at the highest tier, and fosterabout ATD’s new study, Commercial Truck Dealer ing the cornerstones of any good business, such as Future Landscape. And it will help make sure that customer skills, employee loyalty, and job satisfacyou and your dealerships have a bright and clear tion. The crystal ball says that if we put our people path ahead. first, the robust numbers will follow. Truck dealers are working at breakneck speed ATD looks forward to unveiling the full results to navigate an ever-evolving market and changing of this study during the ATD Show in Las Vegas, technology. The way we operated our stores even March 22-25. If you want a good look at our fujust a few years ago is not the same way we operture, you must atate them today. tend. Do not miss The average “If you think the answer to all the ATD Industry truck dealer our problems lies in emerging Roundtable panworks extremeel where expert ly hard to meet technology or reduced economists will the challenges regulation, think again!” discuss issues that that have come impact your busifrom the modness today. New this year is an exclusive ATD ern era—complex manufacturer and supplier deExpo with hours before and after each general mands, ever-increasing big data, government regusession located adjacent to the general session aulations and, above all, consumer demand. ditorium. I invite everyone to attend the ATD WelLast year ATD commissioned ACT Research, a come Reception on the ATD Expo floor as well recognized and leading publisher of commercial as the final night Gala at Encore Beach Club. All vehicle industry data in North America, to exATD attendees can partake in the NADA Show’s amine the future landscape of our market. After programs. NADA will provide revved-up digital researchers held extensive qualitative interviews programs, more than 100 educational workshop with noteworthy industry leaders, truck dealers, sessions, and dynamic lifestyle programs. Finally, OEM representatives, and other important stakeexclusive OEM meetings are your chance to meet holders, four critical themes emerged—and I am with top executives and plan for your 2018. eager to share one right now. Here at ATD, we strive to remain forward lookIf you think the answer to all our problems lies in ing and prepare for the challenges ahead. Because emerging technology or reduced regulation, think the truth is, our future is already here. We want to again! While our product is trucks, the ‘name of make sure you are ready for it. I look forward to the game’ is people. The study identifies a dynamic seeing all of you in Las Vegas where we can naviI have emphasized throughout my tenure as ATD gate the landscape together! chairman: at its core a truck dealership is a people business. Of course, our stores survive based on t

Massachusetts Auto Dealer www.msada.org

NADA Update

By Don Sudbay

Rounding the Corner Don Sudbay, President of Sudbay Automotive Group, represents MSADA members on the NADA Board of Directors. He welcomes your

questions

and

concerns

(donsudbayjr@sudbay.com). While we are mired in the depths of winter, all of us should hopefully have our sights set on the upcoming NADA Show in Las Vegas coming in March. If you have not already registered, you will find all the information you need at www.nada.org. In the meantime, I encourage you to participate in the #WomenAutomotive campaign NADA has launched, detailed below. It is a great opportunity to highlight your business as part of a national platform.

A New Year at NADA By Mark Scarpelli, NADA Chairman I am extremely proud of the thousands of franchised auto dealers across the nation. Despite an ever-changing landscape in our retail business, we closed out 2017 with 17 million new-car and -truck sales. We are looking toward 2018 with optimism and confidence. We saw many challenges to the dealer business over the past year, and, thanks to the passion and hard work I’ve seen around me, we are in much better standing for 2018. I am proud to say that we have been successful in our efforts to

“NADA is pushing ahead so that we have a secure and stable industry into the future.” prevent elimination of dealer discretion and consumer discounts in auto financing. We rightly advocated for our customers, and Washington heard us loud and clear. NADA’s alternative policy ensures fair credit compliance and also preserves the ability of dealers to offer discounts to our customers. We also successfully fought attempts to ground all

used vehicles at the dealership with open recalls – again standing with our customers and preventing Washington from imposing a costly trade-in tax on consumers. And, most recently, we preserved 100-percent deductibility on floor plan interest, a cornerstone of the dealership business model. However, the work never ceases. NADA is pushing ahead so that we have a secure and stable industry into the future. The newest challenges have come in the form of legislation to regulate self-driving vehicles, and we are continuing to advocate legislation that explicitly preserves state vehicle licensing and franchise laws. And as we navigate the Trump Administration, we are staying on top of tax reform and critical issues that will affect our operations, such as LIFO and the estate tax. We have worked harder than ever to build stronger relationships with our manufacturers. I have made it my priority to address the negative impact of stairstep programs headon. During my chairmanship, NADA has had many meetings with OEMs to share the results of our landmark study that highlights the importance of transparency, trust, loyalty, and commitment to our brands. Dealers are in resounding agreement that factory efforts should help our customers and our businesses, not harm them. You can be sure NADA will continue to expand this platform so that dealers and OEMs work symbiotically, as we should. It was my privilege to address this very issue in front of the automotive press in Detroit last October as an advocate for my fellow dealers. Finally, the fight to defend our franchise system will never end. NADA has embraced a dynamic approach, and we have pushed newer social media platforms to spread the news about the benefits of the franchise system, especially in times of dire need. The 2017 hurricanes and California wildfires ravaged homes, businesses, and families. But the amazing network of dealers who quickly stepped up to help fellow dealer families in their darkest hours has made lasting impacts on thousands of our employees. I’m proud that together we have raised millions of dollars for the NADA Emergency Relief Fund—funds that are still being distributed today. I cannot say this enough—I’m so proud to be an auto dealer. And I’m proud of the work we’ve done to power this industry for more than a century. We have stood the test of time, and we are ready to tackle the next 100 years. I hope to see you all in Las Vegas for the 2018 NADA Show, where we will ring in our 101st year as your national association and your strongest ally. I wish you and your employees a prosperous 2018! www.msada.org

Massachusetts Auto Dealer JANUARY 2018

NADA Update Dealership Managers and Directors Encouraged to Attend the Upcoming NADA Show in Las Vegas The NADA Show (formerly the NADA Convention & Expo) is not just for dealer principals. That is why NADA is encouraging dealership managers and directors to have frank discussions with their bosses, or vice versa, about attending the upcoming NADA Show. Shirley Quinn, fixed operations manager at Laurel Toyota in Johnstown, Pennsylvania, has worked in the retail-auto industry for more than 40 years. She has attended the past nine conventions with her management team from the dealership group. “Whether you are a seasoned manager or a new manager, my advice is to attend the NADA Show,” said Quinn. “The educational workshop topics are new year to year and based on the ever changing automotive world we live in.”

MSADA Ohio. “One of the challenges is figuring out how to put these opportunities in the shopping cart when women are doing their research.” We need to do a better job sharing this story. And to do that, we need your stories. Are you a woman who works in automotive retail? If yes, please share a quick video talking about your experience, and join us in encouraging other women to consider pursuing automotive careers. Share a little about who you are, what you do, and why you would encourage other women to pursue similar careers. What do you want other women to know about why a career in a dealership might be right for them? What do you wish you knew before you started your own dealership career? What are the top three benefits to working at a dealership that women probably do not know about? Post the video publicly on Facebook, Instagram, or Twitter, and be sure to include the hashtag: #WomenInAutomotive.

“There have never been more opportunities for women to create lasting, impactful careers in automotive retail.” All dealership managers and directors -- in sales, marketing, e-commerce/internet, social media, CRM, BDC, CPO, fixed operations, and finance and insurance -- are encouraged to take a close look at the workshop schedule. NADA Show 2018 returns to Las Vegas from Thursday, March 22, to Sunday, March 25, offering 60 new workshops, which include the six traditional tracks, the new Distinguished Speaker Series, Super Session, and Specialty Workshop. In all, there are 102 workshop sessions as well as the keynote speaker sessions, sold out Expo, and numerous networking events. “It is team building for the managers who attend the NADA Show,” Quinn added. “And we bring this information back to the dealership and share it with the other sales, service, parts, and body shop managers from our stores. We benefit so much from it.”

#WomenAutomotive Video Competition While women currently represent only about 19 percent of dealership employees in the United States, there have never been more opportunities for women to create lasting, impactful careers in automotive retail. “There are so many choices,” said Michelle Primm, managing partner at Cascade Auto Group in Cuyahoga Falls,

JANUARY 2018

We will keep an eye out for your videos and share our favorites here. AND as some added incentive, we will send a free Apple Watch to our 10 favorite submissions. Winners will be chosen in advance of NADA Show in March.

NADA Seminar: Advanced Parts Management -- February 19-23 NADA’s Advanced Parts Management week-long seminar will be held from February 19-23, 2018, at NADA headquarters, in Tysons Corner, Virginia. NADA instructor Mark Michalski will teach participants how to take their parts department to the next level by improving inventory integrity. Attendees will learn and discuss important topics like parts turn, fill-rate, and ways to improve business operations, as well as analyze and discuss their dealership’s performance. Participants will walk away with the tools to make significant process improvements. The key areas covered include Perfecting the Mix, Profit-Centering, Know the Customer Needs, Personnel Techniques, Deep Dive into DMS, Case Study and SWOT Analysis, and Headache Relief – Best Practices. Register here: https://www.eventbrite.com/e/advanced-parts-management-seminar-tickets-41150572470. t

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MSADA