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APRIL/MAY 2011

ALABAMA

I N D E P E N D E N T

A U T O M O B I L E

D E A L E R S

A S S O C I A T I O N

ALABAMA DOR: TITLE ASSIGNMENTS AND ODOMETER CERTIFICATION ALSO Tow Companies, The Law and You PLUS The Art and Science of Used Auto Inventory

STATE July 21st - 24th CONVENTION

DALLAS, TEXAS Permit No. 2079

PAID PRSRT Standard U.S. Postage

V isit us at w w w.alabamaiada.com

at Lake Guntersville State Park Resort

INSIDE

AUTO LOT FOR LEASE OR SALE

."(";*/&CONTENTS 6 Alabama DOR: Title Assignments and Odometer Certification 8 Tow Companies, The Law and You 10 The Art and Science of Used Auto Inventory

AIADA NEEDS YOUR E-MAIL ADDRESSES Due to skyrocketing mail costs and the need to communicate in a timelier manner, AIADA has begun the process of moving to all-electronic member communications.

An added benefit is AIADA will send electronic communications to anyone you designate in your dealership at no additional cost. To help expedite the process, please send the e-mail addresses for dealer principals and key employees to Judy Benton at 205942-1000, judy@alabamaiada.com or 205942-3565 (fax).

ADVERTISERSINDEX ADESA............................................................. 9 AutoTrader.com ................................ Back Cover Center Point Auto Auction ................................13 Manheim.com ..................................................5 Manheim Mississippi ........................................7 Manheim Nashville ..................Inside Back Cover Manheim Tennessee .................Inside Back Cover SmartAuction .................................................. 11 Sterling Credit ....................... Inside Front Cover United Acceptance .........................................15 Western General / Protective .............................3

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION 888 /*"%" $0. t 888 /*"%" 57 NIADA HEADQUARTERS: #308/ #-7% t "3-*/(50/ 59 1)0/& '03 "%7&35*4*/( */'03."5*0/ $0/5"$5 530: (3"'' 03 530:!/*"%" $0.

THE ALABAMA INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION IS PUBLISHED BI-MONTHLY BY THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORATION, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203; PHONE (817) 640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT ADDITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF AIADA OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEMBERS OF NIADA, DOES NOT CONSTITUTE AN ENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT © 2011 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED. VISIT THE NIADA WEB SITE AT WWW.NIADA.COM. 45"5& ."(";*/& .(3 4"-&4 Mkhr @kZ__ mkhr9gbZ]Z'\hf EDITOR Fbd^ AZk[hnk faZk[hnk9gbZ]Z'\hf 130%6$5*0/ .(3 CZ\h[ D^kgl cZ\h[9gbZ]Z'\hf "35 130%6$5*0/ .(3 <akblmr AZrg^l \akblmr9gbZ]Z'\hf 13*/5*/( Nieman Printing

AIADAOFFICE 120 VULCAN ROAD #*3.*/()". "- 1)0/& '"9 WEB SITE: WWW.ALABAMAIADA.COM 50 #&$0.& " .&.#&3 0' "*"%" 1-&"4& $0/5"$5 50/: 8*-,&340/ "5 03 50/:!"-"#"."*"%" $0.

MARK YOUR CALENDAR

This facility has a 40-by-75-foot building, three service bays with lifts, a wash bay and lighted and gated lot. It’s

located in the Montgomery, Ala., area. For more information, call 334-361-7315 or 334-312-4038.

NIADA/Manheim

STATE

Community Service Award

Manheim, the world’s largest provider of vehicle remarketing services, cares about its employees, the environment and the communities it serves. From

CONVENTION

fundraising drives and tutoring kids after school to supporting long-term conservation efforts, Manheim and its employees are dedicated to giving back to their communities and know independent vehicle dealerships across the country share in this commitment. For the first time this year, Manheim is recognizing and honoring those dealerships by awarding the 2011 National Manheim Community Service Award at the 65th NIADA Annual Convention and Expo. For more information, contact Georgia Brown, NIADA director of education, at 817-640-3838 or download the nomination form at niada.com (click on the Manheim Dealers Edge link under the Services tab).

J U L Y

21 – 2 4

LAKE GUNTERSVILLE STATE PARK GUNTERSVILLE, AL MORE INFORMATION WILL BE COMING SOON!

&9&$65*7& COMMITTEE &9&$65*7& %*3&$503 TONY WILKERSON

JOHN DUNN SYLACUGA

CHARLES BUTLER ATHENS

FRANK MILES JACKSONVILLE

PRESIDENT KEN MCFARLAND HUEYTOWN

TOMMY GREENE BIRMINGHAM

ERNEST CRUMP JASPER

KERRY MITCHELL ALBERTVILLE

BILLY LEVINS MONTGOMERY

MARK CRUMP JASPER

DINK TUCKER BIRMINGHAM

CONNIE OSWALT NORTHPORT

J.W. CUNNINGHAM NORTHPORT

LANCE TURNER ANNISTON

JAMES DENNIS PRATTVILLE

ANTHONY UNDERWOOD BESSEMER

WILLIE COLVIN TUSCALOOSA

JERRY GILES TUSCALOOSA

JOHN PIGG PRATTVILLE

TRACY HONEA ALBERTVILLE

BARRY SEARCY MUSCLE SHOALS

MIKE JONES DOTHAN

ACTIVE PAST PRESIDENTS TODD SMITH DOTHAN

CHARLES LITTLE SATUSMA VERTA BARR MEHERG TUSCALOOSA

13&4*%&/5 &-&$5 RANDY BURNS GADSDEN VICE PRESIDENT CHARLES MORING MIDLAND CITY 4&$3&5"3: TREASURER TODD ODEN BIRMINGHAM CHAIRMAN OF THE BOARD RONNIE ELLISON CALERA DIRECTORS PAUL CLABORN ALBERTVILLE REX CANTERBURY FAYETTE

O’ NEAL CLEVELAND PLEASANT GROVE

DICK WRIGHT SYLACAUGA HENRY MULLIAX ANNISTON ASSOCIATION "5503/&:4 GALESE & INGRAM PC JOHN GALESE & JEFF INGRAM BIRMINGHAM

DEL MILES JACKSONVILLE

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AL ABAMA DOR:

TITLE ASSIGNMENTS AND ODOMETER CERTIFICATION UTILIZING A POWER OF ATTORNEY Dear Tony: Recently, this office has received several requests for clarification concerning title assignments and federal odometer certification when a power of attorney is utilized. This letter is in response to those requests for clarification. The Federal Truth in Mileage Act of 1986 and rules promulgated there under, require that an odometer certification be made at the time of transfer for motor vehicles not more than 10 model years old and with a gross vehicle weight rating of less than 16,000 pounds. In addition, the federal regulations specifically state that “no person shall sign an odometer disclosure statement as both the transferor and transferee in the same transaction.” Federal regulations provide an exception for signing an odometer disclosure statement on behalf of both the transferor and transferee in cases where the transferor’s title is physically held by a lienholder, or if the transferor to whom the title was issued by the State has lost his title and the transferee obtains a duplicate title on behalf of the transferor. In such cases, the Federal Truth-in-Mileage Act of 1986 permits States to provide a secure power of attorney form for use by an owner when transferring his or her motor vehicle. The secure power of attorney (form MVT 8-4) can be used to disclose the vehicle’s odometer reading in the assignment of title by the titled owner and permits the dealer to complete the assignment of title once the title is received by the dealer. In accordance with federal rules, the odometer disclosure in the title assignment must be exactly as stated in the odometer disclosure made in the power of attorney.

December 23, 2010

In lieu of utilizing a secure power of attorney, many dealers and financial institutions utilize a “third party” power of attorney to sign an odometer disclosure statement. It should be noted that whenever a third party power of attorney is being utilized to sign an odometer disclosure statement, the third party should not be employed by the dealership. Otherwise, issues may arise regarding representatives of the dealership signing the odometer disclosure statement as both the transferor and transferee in the same transaction. Finally, the signature of the appointee, as named in a secure power of attorney or third party power of attorney, must be entered in the assignment area of the certificate of title. The appointee is required to sign and hand print his or her name and should indicate that he or she is acting as attorney-in-fact by placing the abbreviation P.O.A. or P.A. next to his or her signature. While the name of the buyer can be stamped in the top area of the assignment, both the buyer’s and seller’s printed names must be hand-printed and cannot be stamped (in accordance with federal odometer certification regulations). Additional information is contained in Revenue Rule 810-5-75-.63 and can be accessed at http://www.revenue.alabama.gov/ motorvehicle/mvrules/57563.pdf. Also, this information is addressed at all ETAPS training classes and can be found in the training manual at http://www.revenue.alabama.gov/motorvehicle/pdf/titlesem.pdf. Please feel free to share this information with your members. As always, thank you for your assistance. Respectfully, Mike Gamble, Assistant Director Motor Vehicle Division

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TOW COMPANIES, THE LAW AND YOU Are the towing companies taking advantage of your vehicles with high storage fees and not notifying you as the lienholder? The following is the law in Ala-

bama, so please keep this and use it when you get hit with a large bill: Reports to department of stolen, converted, recovered and unclaimed vehicles; suspension of registration of stolen or converted vehicles. (a) A peace officer who learns of the theft of a vehicle not since recovered or of the recovery of a vehicle whose theft or conversion he knows or has reason to believe has been reported to the department shall forthwith report the theft or recovery to the department. (b) An owner or a lienholder may report the theft of a vehicle, or its conversion if a crime, to the department, but the department may disregard the report of a conversion unless a warrant has been issued

for the arrest of a person charged with the conversion. A person who has so reported the theft or conversion of a vehicle shall, forthwith after learning of its recovery, report the recovery to the department. (c) An operator of a place of business for garaging, repairing, parking or storing vehicles for the public, in which a vehicle remains unclaimed for a period of 30 days, shall within 30 days after the expiration of that period, report the vehicle as unclaimed to the department. Such report shall be on a form prescribed by the department. A vehicle left by its owner whose name and address are known to the operator or his employee is not considered unclaimed. A person who fails to report a vehicle as unclaimed in accordance with this subsection forfeits all claims and liens for its garaging, repairing, parking or storing and is guilty of a misdemeanor punishable by a

fine of not more that $100. (d) The department shall maintain and appropriately index weekly cumulative public records of stolen, converted, recovered and unclaimed vehicles reported to it pursuant to this section. The department may make and distribute weekly lists of such vehicles so reported to it to peace officers upon request without fee and to others for the fee, if any, the department prescribes. (e) The department may suspend the registration of a vehicle whose theft or conversion is reported to it pursuant to this section; until the department learns of its recovery or that the report of its theft or conversion was erroneous, it shall not issue a certificate of title for the vehicle. (Acts 1973, No.765, p. 1147 Ξ38.)

Improve Your Dealership’s Insurance Coverage Chances Following are some of the criteria insurance companies look for when deciding whether to write coverage:

t 1SJPS JOTVSBODF DPNQBOZ BOE MPTT IJTtory: Typically three previous years are required. t /VNCFS PG ZFBST JO CVTJOFTT PS QSFWJous experience if a new dealership: Many insurance companies now require documented proof of prior experience if opening a new dealership. t -PU QSPUFDUJPO BOE BQQFBSBODF 'FODFE well lit, paved, clean, well landscaped and manicured, free of clutter, trash, junk, etc. NOTE: A clean, protected, landscaped, uncluttered appearance tends to tell the insurance company underwriter the dealer is concerned, professional and has a personal investment in the operation. t 0XO PS SFOU *OTVSBODF DPNQBOZ underwriters tend to believe a dealer who owns rather than rents may be more interested in recommended loss prevention and risk management techniques than a dealer without a personal investment in the property. t "MM BVUIPSJ[FE PQFSBUPST PG WFIJDMFT over 21 years old: Many garage policies exclude losses incurred by anyone under the age of 21. Be sure of your policy’s coverage. t (PPE ESJWJOH SFDPSET PG BMM FNQMPZees (whether they are paid via a 1099 or a W-2): Failure to accurately and completely

disclose all authorized drivers may result in cancellation, non-renewal or an exclusion of coverage. t 1SPWJEF BDDVSBUF BOE GSFRVFOUMZ VQdated list of authorized drivers: Provide the insurance company with a list of all employees authorized to operate vehicles held in inventory or service vehicles. If providing a vehicle to an officer, partner, salesperson or any other individual, the dealer should provide that information to the insurance company accurately and on a timely basis including a copy of the operator’s driving record. t "DDVSBUF WBMVF PG BWFSBHF WFIJDMF IFME in inventory. t /VNCFS PG WFIJDMFT TPME BOOVBMMZ ćF majority of insurance companies providing garage insurance only wish to provide coverage to full-time dealers. Typically, they have little or no interest in an individual who operates his dealership as a parttime or sideline business. t -FOHUI PG UJNF BU UIF MPDBUJPO *OTVSance companies are looking for experience, stability and reliability. The lengths of time in business and at the same location are key underwriting criteria for most companies. t $BODFMMBUJPO GPS OPO QBZNFOU PG QSFmium: Insurance companies don’t want to spend their time and resources in the process of collecting premium due to them

and if a dealer has been cancelled by another company for nonpayment of premium, they don’t want to inherit someone else’s problems. t #VTJOFTT PQFSBUJPOT )BT UIF EFBMFSship implemented such loss control programs as key control, effective lighting, employee background checks, safeguarding valuable records and papers, buildJOH QIZTJDBM TFDVSJUZ MPDLT BMBSNT FUD Basically, what steps has the dealer taken to protect his property, building and conUFOUT t .FNCFSTIJQ JO UIF EFBMFS T TUBUF BTsociation: Insurance companies tend to look favorably on those dealers who invest in membership in their trade association. They feel that through membership, such a dealer will be provided current information, access to experts and educational opportunities that enhance their ability to operate a profitable and more liability-free dealership. t #VZ )FSF 1BZ )FSF EFBMFSTIJQT 'PS these operations, the insurance company wants to know the sales volume, number of outstanding contracts, actual number of repossessions and the internal procedures that are in place for repossessions. Most insurance companies do not provide liability or any other coverage for wrongful or improper repossessions.

N OTE: Insurance companies unanimously state the biggest problem with dealers is their failure to fully disclose any and all authorized operators. Garage liability insurance and other applicable coverage is not designed to allow the dealer to provide automobiles to spouses, children, parents or friends. Keep in mind should the insurance company learn of or discover there are undeclared operators, the dealer may face nonrenewal, cancellation or a refusal to provide coverage after a loss has occurred. Further, in some states, failure to accurately disclose all authorized drivers may violate state statutes related to fraud and misrepresentation. 8

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THE ART AND SCIENCE OF USED AUTO INVENTORY Building a profitable used auto inventory requires having the right information and the talent to know how to use it. Over the years, I’ve been blessed with tremendous mentors who have provided me with valuable insights, one of which is managing a used vehicle department is both a science and an art. While there are no

cookie-cutter solutions applicable to every scenario, there are tried and true blocking and tackling strategies that can help any department maximize results. When it comes to proper inventory mix, there are several ways a dealership can study information to improve volume,

USED CAR MANAGERS SHOULD BE AWARE, AT THE VERY LEAST, OF THE TOP-SELLING VEHICLES IN THEIR MARKET BY MAKE, MODEL, AND YEAR AS WELL AS THE TOP-SELLING VEHICLES AT THEIR STORE HSPTT BOE 30* )PXFWFS CFGPSF UIF JOGPSmation can be broken down, the store must have the information. While this may seem obvious to some, I am routinely presented with departments that fail to accomplish this seemingly simple task. Used car managers should be aware, at the very least, of the top-selling vehicles in their market by make, model, and year as well as the top-selling vehicles at their store. All too often when I ask used auto managers to name the three top-selling used vehicles in their markets, they look at me like a deer in headlights. Or, they BVUPNBUJDBMMZ SFTQPOE i)POEB "DDPSEw PS i5PZPUB $BNSZ w ćBU T HSFBU 8IBU ZFBS 8IBU USJN MFWFM 8IBU NJMFBHF CBOE )PX

many of these have been sold at your store JO UIF MBTU EBZT 8IBU XBT UIF BWFSBHF BHF XIFO JU XBT TPME There are several tools available to help managers accumulate this data, such as Auto Exchange for internal data and Cross Sell for external data. Once this data is collected, it is imperative management consistently identify which vehicles sell in their market (internal and external). That’s the science part of the equation; it’s not especially difficult to identify commodity type vehicles and, if you’re willing to travel or pay, to procure them. Further breakdown of historical internal and external trends is, however, necessary. Specifically, it would be beneficial to track sales volume, aging, and gross profit for specific COS bands. These could be broken down as follows:

$0 – $5000 $5,001 – $10,000 $10,001 – $12,500 $12,501 – $15,000 $15,000-plus The used auto dealer should be aware of and actively track each of the above categories for each price band in used cars, trucks, SUVs, and vans, comparing the current stocking mix to what has yielded the greatest success. The categories can be broken down further into import/domestic categories as well, if needed. This information, coupled with knowledge from external tools, is used to direct buying specific inventory at specific price points to generate specific results. The art of used vehicle inventory comes from identifying and procuring vehicles that put your store ahead of the curve. For example, a few years back fuel prices spiked and, as a result, highly economic, smaller pre-owned vehicles were suddenly at a premium, while large pickups and SUVs could be bought for a dime a dozen. The market was quickly flooded with these gas guzzlers, but few people had the vision or foresight to accumulate them. Those who did were those who had the knowledge and experience to understand the

ebb and flow of the used car market, so they loaded up on these vehicles at very cheap prices. It’s not difficult to guess what happened to their profits when the price of fuel went back down. Recognition of these opportunities is not always easy; often it comes from experience. I believe we are involved in one as I type this column. Thanks to the Cash for Clunkers program, new car inventories are generally low; there are fewer trades in most used inventories and the price of vehicles at auction has gotten higher. While this could mean several different things depending on your market, I would think the potential for increased gross profit, even on vehicles more traditionally thought of as commodity cars, is greater than ever. )PQFGVMMZ ZPV SF USBDLJOH UIF USBEF capture rate. A normal benchmark for capturing trades is 55 percent of appraisals. Because of today’s market conditions, I would encourage all managers to aggressively get involved with customers and inquire about their desire to trade their vehicle, as well as ensure your store is appraising every vehicle possible. Further, I believe it’s imperative to improve the appraisal capture rate by 10 percent or more. Used autos are at a premium and the extra money put into a trade has never been a better investment. This type of forward thinking involves risk some dealers simply may not be willing to accept. Those who do so are more frequently ahead of the used vehicle game. The science of used inventory can be resolved by accumulating information, breaking it down (all the way to COS bands, if you really want to be detailed) and buying and trading aggressively according to trends. The art requires experience and guts. BY BI LL MOKRY

Bill Mokry is a sales and F&I specialist for Service Group, an insurance and financial services company that provides income development training and servicing solutions to auto dealerships. His many years of dealership experience include several as general manager of a successful used car operation. He can be reached at bmokry@sgifs.com.

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APPS

GOING MOBILE IN YOUR DEALERSHIP One of the new keys to the success of your business is your smart phone. You can operate your dealership on-the-go, making fast, informed

decisions that will ultimately improve your bottom line. More than 440,000 mobile sites and over 500,000 mobile apps exist today, including a growing number of auto-industry related apps. It may seem daunting to integrate this emerging technology into your business, but these tools are a must-have for both acquisition and retail. V What

are ‘mobile apps’ and how do they help dealers?

An app is a software application that helps people accomplish tasks faster. Among other things, an app can use the hard drive of the mobile device to store data for faster recall and operation, perform calculations, access hardware features such as camera and GPS – and all without an Internet connection. At its core, the Internet revolution was about how technology harnessed the power of information to generate efficiencies, and this is exactly the opportunity mobile apps offer to dealerships today – providing information on-the-go and tying it all together to take action. V How

can mobile apps streamline your business?

Mobile browser-based tools provide dealerships with more on-the-go visibility but lack a built-in ability to act in real-time on information organically across the dealership. But, just as a mobile app enables onUIF HP TUPDL USBEJOH GPS FYBNQMF BO BQQ TVDI BT F$BS-JTU T A5SVF 5BSHFU Mobile’ allows dealerships to take a massive dataset and a complex, multi-step, -vendor and -personnel process and make it all work from a single handheld device. ćF A5SVF 5BSHFU .PCJMF BQQ HJWFT EFBMFSTIJQT NPCJMF BDDFTT UP QSJDJOH data from multiple books, current data from top online marketplaces and the ability to filter, organize and view the data geographically for territory (including vehicle pricing from competitive dealerships). Other functions include VIN scans, taking/adding/removing photos, JOUFHSBUJOH $BSGBY 7FIJDMF )JTUPSZ 3FQPSUT BOE TIBSJOH BQQSBJTBMT BOE pricinsg with other mobile devices. "SF UIFSF PUIFS CFOFĕUT UP HPJOH NPCJMF On the acquisition side, smart phones provide access to information you need to stock your lot with cars that customers want. It’s no secret that the used car supply is decreasing due to rising demand, so the competition for quality units is getting tighter. Think about the top concerns your customers have when shopping for a used car: previous damage, maintenance, ownership history, and PG DPVSTF QSJDF 5PPMT MJLF $BSGBY 7FIJDMF )JTUPSZ 3FQPSUT BSF SFBEJMZ available through various mobile devices to verify this important JOGPSNBUJPO BOE CJE XJUI DPOĕEFODF )BWJOH ZPVS NPCJMF EFWJDF IBOEZ helps you tie it all together quickly and successfully acquire the right cars for your lot. Today’s mobile devices provide access to information that brings transparency and process effi ciency to dealers. The possibilities mobile is opening up for our industry are truly extraordinary – and in the current economic climate, leveraging new and user-friendly technology is key to moving more cars and saving money in the process.

SPRING

INTO ACTION NOW VIEW OVER 450 HOURS OF DE ALER EDUC ATION SES SIONS A S WELL A S OTHER SPECIAL TR AINING SEMINARS AND MONTHLY DE ALER TIP S 24/7 AT W W W.NIADA.T V

BY LEN CRITCH ER AN D LANCE VICKERY Len Critcher is CEO of eCarList, provider of award-winning inventory management and online marketing solutions that make it easy for dealerships to fully own and control the vehicle merchandising process through one unified platform. Lance Vickery is director of dealer business at Carfax and has spent more than 25 years in the auto industry.

&/5&3 4*5& "/% $-*$, 0/ /&8 130(3".4 12

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State Legislature kicks off 2011 session The Alabama Legislature began its 2011 regular session last month with new leaders, 49 new members (out of 140), a strict new ethics law most don’t understand, a potential move to dramatically restrict access to members’ offices and a record budget deficit. Other than that, it should be business as usual!

AIADA is already working with the Department of Revenue to review its proposed changes to the dealer tag and licensing laws. The Alabama Civil Justice Reform Committee is putting the final touches on a potential tort reform package and rumors are flying about many other bills. With so many new members and new restrictions on lobbyists, dealers’ grassroots contacts will be more important than ever. We’ll keep you posted.

FEDERAL CONSUMER BUREAU LAUNCHES WEB SITE The new federal Consumer Financial Protection Bureau (CFPB), created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, has launched its website at www.consumerfinance.gov and employed a police shield for a not-so-subliminal message on its home page. The bureau is expected to officially launch on July 21. While dealers won an amendment to the law that generally exempts them from rulemaking, supervisory and enforcement authority of the CFPB, NADA points out while the exclusion is significant, dealers will still be impacted by the new law. For example, while dealers aren’t regulated, the CFPB has the authority to regulate finance sources that take assignment of dealers’ finance and lease contracts. Those sources are likely to impose new contractual duties on dealers to ensure the sources can comply with the new rules. The Federal Reserve Board and possibly the Federal Trade Commission, which can still regulate dealers, could take a me too position and simply copy CFPB regulations. Also, under the law, the FTC has new streamlined authority to regulate unfair or deceptive dealer practices. Another provision in the act that could impact dealers is one designed to improve the asset-backed securitization (ABS) process which requires federal banking agencies to issue regulations requiring finance sources that raise lending funds through the sale of ABS to retain a portion of the risk in the contracts they assign to third-party investors. This so-called skin-in-the-game provision could force dealers to retain a percentage of the risk in ABS loans.

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MOBILE COMMERCE

WITH CONSUMERS LOOKING FOR VEHICLES, PARTS AND ACCES SORIES This past holiday season, surveys and statistics showed what many analysts and industry observers were thinking: mobile commerce is growing by leaps and bounds, and every industry is in on the trend, including automotive.

In 2011, smartphones are forecasted to account for half of the mobile phone market, according to The Nielsen Co. On top of that, an ABI Research report says mobile online shopping will generate $119 billion in sales by 2015, accounting for 8 percent of the e-commerce market. When car dealers make it easy for their business to be found through a mobile web browser, loyalty campaigns, marketing initiatives, text promotions and sales can attract and retain customers. What are consumers browsing with UIFJS TNBSU QIPOFT ćF TBNF UZQFT PG items they started browsing on computers: researching purchase decisions, cost comparisons and finding the location of physical items. Recently, eBay reported a substantial increase in mobile traffic, where sales more than tripled in 2010 to near $2 bilMJPO JO HSPTT NFSDIBOEJTF WPMVNF -BTU year, vehicle purchases led all categories on eBay mobile applications in terms of GMV, while parts and accessories were number two in terms of the total number of items purchased. Dealers know when they have a physical lot, customers still come to kick the tires when the sales office is closed. Now, today’s consumer might still come to the lot, but he or she will also pull out a smart phone, check the hours of the dealership and research the same make and model for competitive pricing. The same thing is happening even if the consumer doesn’t drive to a physical lot. A consumer may be in his garage working on a car and need to find a part or accessory. Instead of going inside and turning on the computer, he’s browsing his smart phone to find the part, price and local availability. Just as e-commerce has completely changed the way we do business, wireless devices and smartphones are again altering what we know about consumers’ purchasing behaviors. Seeing similarities in mobile commerce and e-commerce, auto dealers ask themselves a familiar question:

would anyone really buy a car from their TNBSU QIPOF In 2010, more than $118 million in car and truck purchases were made via the eBay mobile application – more than 12,600 vehicles were sold. Parts were the second biggest category in mobile last year, with more than 911,722 parts purchased, and more than $60 million in sales. For independent dealers, mobile applications and mobile commerce are the must-have digital tools of 2011. With smartphones capable of surfing, downloading apps and co nnecting with coworkers and friends in an instant, researching and shopping for vehicles, parts and services is a natural extension. For example, a business traveler waiting at an airport may use that downtime to look for a needed part for his car or browse available vehicles for a new truck. If an independent dealer’s inventory is not readily available on a mobile app, chances are there’s an entire customer segment that may not see what’s for sale. A recent ForeSee Results survey found 30 percent of consumers used a mobile phone to research products on the Internet, compared with 11 percent in 2009. Those making a purchase through a mobile phoWWne increased from 2 percent in 2009 to 11 percent in 2010. For example, Tilo Steurer, founder and owner of Eurocar, the West Coast’s largest independent dealership of its kind, sells and buys vehicles and regularly uses eBay’s mobile app to buy cars, parts and accessories. “I purchase anywhere from five to 10 cars every month, most of the time through the eBay mobile app,� Steurer TBJE )F BMTP VTFT UIF F#BZ NPCJMF BQQ to keep track of his business while not in the office. With any form of sales – online, mobile or in-store – customers consider the credibility of the seller and business before making a purchase. Building that credibility takes consistent communication, which is made easier when dealers can keep in touch through mobile and online sources. “Communication is very important, especially when making an expensive online purchase such as a luxury car,� Steurer said. “With the eBay mobile app, I can re-

spond more quickly to customer questions, which builds credibility and increases the opportunity for a sale.â€? To accommodate this growing trend, eBay Motors is launching a mobile app that will provide a customizable buying experience optimized for vehicles, parts and accessories, as well as unique social and community features for the enthusiast.Â

FOR DEALERS, HAVING PARTS, ACCESSORIES AND VEHICLES AT A CONSUMER’S FINGERTIPS IS AN IDEAL WAY TO EXTEND MARKETING AND SALES WITHOUT A LOT OF DEVELOPMENT AND TECHNICAL EFFORT. Features include VIN scanning and a virtual garage to give enthusiasts personalized information. After searching for a vehicle, users can share it with friends and social networks or ask the seller a question. Users can create “car cards� for their vehicles which display photos and stats about the vehicle and can be used in searches for parts and accessories. On the garage tab, consumers can input and store the vehicles they own or scan the VIN barcode with the iPhone’s camera to populate information. In the garage, car owners can create to-do list for vehicle projects, store custom parts searches and share the garage with their social network. For dealers, having parts, accessories and vehicles at a consumer’s fingertips is an ideal way to extend marketing and sales without a lot of development and technical effort. Mobile commerce is still in its infancy but is growing at a faster pace than e-commerce. With the Internet available wherever consumers are with their smart phones, it’s only a matter of time before mobile commerce becomes a dominant form of purchasing. Because of the similarities to e-commerce, consumers are quickly adopting m-commerce and expecting businesses to be on board.

BY CLAYTO N STAN FI ELD, EBAY MOTO RS 14

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The new law prohibits “any person” from providing “anything” to a public official or public employee for the purpose of “influencing official action.”

Ethics Law Could Impact You Your next-door neighbor is on your town’s city council. You and your wife

invite the councilman and his wife over to your home for dinner. During the evening, you discuss issues impacting your city and coming before the city council. You express your opinions on how the councilman should vote on those issues and encourage him to follow your advice. Did you know you have committed a crime under the new ethics law, which UPPL FČFDU .BSDI While charges and countercharges are raging in the media with certain lawmakers alleging lobbyists are plotting to water down the new law even before it takes effect, a minor change in the language of the existing law could put citizens at risk as in the above example. Today, the law prohibits a public official

or public employee from soliciting or receiving, and “any person” from offering or providing, a “thing of value” in order to influence official action.” Now the law contains six exemptions to “thing of value” (such as meals and hospitality) as long as there is no “quid pro quo” (i.e. “I’ll give you a cup of coffee if you vote for my bill”). The new law prohibits “any person” from providing “anything” to a public official or public employee for the purpose of “influencing official action.” So presumably in the example above, if the dinner conversation did not include any issues coming before the city council or an attempt to influence the councilman’s vote, the neighbor could pay for the dinner of the councilman and his wife. Clearly, this would be very difficult to control, particularly if the dinner party

included a number of people. Alternatively, if you want to talk with a public official to attempt to influence his or her official action, make sure you don’t provide anything to that official, even a cup of coffee. On a related issue, a provision in another ethics bill created questions as to whether or not a person selling goods or services to a state government entity (i.e. cars to the Alabama Department of Public Safety) would have to register with the state as a lobbyist. In an opinion issued February 2, the Alabama Ethics Commission said the salesperson would not have to register as a lobbyist if the sales are conducted in the ordinary course of doing their business. AIADA will keep you posted on future developments.

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ONLINE SALE S SUCCE S S: LET YOUR LISTINGS DO THE TALKING Top dealers consistently get more leads because they pay attention to how their car listings appeal to online consumers. Almost anyone can start selling cars using the Internet today, but those who are most successful give buyers the right information during the shopping process. Sellers like you can break through

the clutter of online used car sales by giving consumers photos, compelling descriptions and vehicle history they want to see while they shop. If you’re not already online, you need to be. The best way to increase used car sales is to be where the most people shop. Eighty percent of consumers today use the Internet to help find their next car. Once your business is established online, you’ve got to make buyers take notice of your online listings. This is vital to online selling success. Consumers visit less than two dealerships on average before deciding to buy. Why so GFX .PTU TIPQQFST OBSSPX UIFJS EFBMFS choices down by doing extensive research online – listings, pricing, customer reviews, etc. In fact, when consumers finally do visit a dealership, they have specific cars and prices already in mind and are armed with details about each car. Typically, shoppers start by visiting thirdparty online automalls like AutoTrader.com and Cars.com. A quick search can return hundreds of dealer listings for vehicles similar in style and price. Internet managers and used car dealers with online inventory know the top concern is getting buyers to notice their cars and contact them. Since you can’t sell online shoppers face-to-face, you have to rely on your listings to do the talking. So how do you make them stand out GSPN UIF SFTU 'PDVT ZPVS NBSLFUJOH FČPSUT on two lead-generating areas that attract the most attention: Search Results Pages (SRPs) and Vehicle Details Pages (VDPs). Did you know only 4% of online shoppers that see your listing in their search results actually click through to the detail QBHF GPS ZPVS DPOUBDU JOGPSNBUJPO 'PS BMM the money you spend to post your cars for sale online, it’s in your best interest to highlight your inventory properly. The SRPs and VDPs are the most prominent places to communicate the value of your used car inventory online. When a

shopper clicks on an SRP listing, they go to the VDP to browse additional photos, read about features, see the vehicle history and locate the seller. The key is getting more shoppers to notice and click your SRP listings so you generate more leads from your VDPs. The vehicle description you provide on SRPs is your first opportunity to tell consumers what they should know. SRPs give you a limited amount of space to market your vehicles, so use that space wisely. Be brief but informative. A vehicle description should not be exclusively technical. Remember, shoppers don’t know as much about cars as you do and detailed features may not mean as much. Things like automatic transmission, power windows and air conditioning, which are standard on most vehicles, shouldn’t be the focus of your selling points. You don’t want potential customers glancing past your listings because they didn’t peak their interest. Generally, your listings also include a small photo when they appear on typical SRPs. It might sound obvious to seasoned sellers, but photos are one of the best ways to grab attention of shoppers during their online used car search. Use the best fullMFOHUI QIPUP GPS UIF TNBMM AUIVNCOBJM JNage on your SRPs and save detailed images of the interior and other angles for consumers to browse while on the VDP. There are several quick improvements that can make your listings more attractive to online shoppers. One is to use relevant information to attract attention. The more details you can provide the better your listings look. For example, it’s easy to find IVOESFET PG A 'PSE &YQMPSFST XJUI UIF same trim package for sale online, so make sure you tell potential customers why they should buy yours. Try to describe the car’s benefits unique to a specific customer – as if they were standing in front of you. For example, you might say, “this van comfortably fits up to eight people” or, “we offer low financing on all our cars” or, “this car shows no reported recalls and comes with a Carfax Vehicle )JTUPSZ 3FQPSUw JO UIF WFIJDMF EFTDSJQUJPOT on your SRPs.

SO HOW DO YOU MAKE THEM STAND OUT FROM THE REST? FOCUS YOUR MARKETING EFFORTS ON TWO LEAD-GENERATING AREAS THAT ATTRACT THE MOST ATTENTION: SEARCH RESULTS PAGES (SRPS) AND VEHICLE DETAILS PAGES (VDPS). To connect with more online shoppers, you need to think like one. You can compete online and sell cars faster by giving buyers relevant information to help them make an educated decision. Another great way to build confidence with online consumers, in addition to providing a good photo and description, is to link your Carfax Reports to your SRP and VDP listings. You’ll stand out on SRPs by offering these reports free. Plus, being open and up-front builds trust with online shoppers, making them more likely to buy from you. Top dealers consistently get more leads because they pay attention to how their car listings appeal to online consumers. Build consumer confidence by providing trusted information in your listings. Make your SRPs stand out in the crowded online marketplace and more shoppers will click through to your VDPs. More clicks equals more leads and ultimately, more sales. BY DALE PO LLAK AN D LAN CE VICKERY Dale Pollak, founder of vAuto, is a highly sought-after authority on maximizing profits from used vehicle operations, working extensively with Dealer 20 Groups, Dealer Associations and large dealer enterprises across the country. In addition to his regular contributions to auto industry publications like Dealer Magazine, Pollak is a published author of 2 books, Velocity: From the Front Line to the Bottom Line and Velocity 2.0: Paint, Pixels and Profitability. Lance Vickery is director of dealer business at Carfax and has spent more than 25 years in the auto industry.

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Q&A With NIADA President Anthony Underwood:

2011 Used Car Market Report

National Independent Automobile Dealers Association (NIADA)

Anthony Underwood was named president of NIADA in 2010. He started selling cars in Alabama in 1977, and he opened his first dealership in 1994 with five vehicles. Anthony’s two stores sell a combined total of 800 vehicles each year. He has been an active member of the NIADA and Alabama IADA for many years. Anthony has served on the boards of both NIADA and AIADA. He was named NIADA National Quality Dealer of the Year in 2003 and, that same year, earned his Certified Master Dealer certification. How have independent dealers adjusted their businesses in the last three years? Independent dealers have faced unprecedented challenges in the last three years. Even though the overall economy is improving, dealers are still struggling with limits on inventory and consumer credit. But dealers are resilient and have adjusted by stocking fewer vehicles and focusing on the types of vehicles that turn quickly. Solid inventory management underpins the successful dealer. Many dealers have retrained employees to ensure that everyone is contributing to the success of the business. Employee productivity has improved as staffs have been reduced to the current level of sales. In the process, we have learned to run our stores more efficiently. We have also seen a shift to the Buy-Here, Pay-Here model by dealers who have access to capital. In our store, we have cut in half both our staff and our inventory. We have also expanded the number of lenders we rely on to finance our customers. We are now sourcing some inventory online, buying vehicles that will sell quickly, and generating more sales based on specific customer orders.

How are independent dealers coping with the shortage of used vehicles? Independent dealers are confronting two challenges: higher prices and fewer pre-owned cars in the marketplace. Independent dealers are spending more time and effort to find the right inventory. Everyone is going to more auctions, both online and in person, as well as tapping local wholesale sources. Some dealers have been very successful in buying inventory directly from private owners. Three or four years ago, dealers were able to find plenty of vehicles under 70,000 miles and three or four years old at acceptable prices. But independent dealers have modified the age and condition guidelines to reflect what their customers can afford. As a result, dealers are doing more reconditioning to get vehicles frontline ready.

You are quoted as saying “We will never go back to business as it was in the past.” Can you explain what you meant by that? Our business model has changed. New car dealers are getting more into the pre-owned business, so we have to meet that challenge. Franchised dealers offer service departments, larger facilities, and access to newer inventory. NIADA members know that they have to continue to improve their business skills and adapt to this new competition. NIADA can teach dealers to run more efficient operations, but the business of selling cars is still about knowing your market and your customers and being responsive to their needs. Independent dealers need access to information to enable them to make quick decisions. NIADA helps independent dealers stay abreast of the national and local economic, regulatory, and business issues facing our industry and each dealer.

How is NIADA monitoring the potential rules under the new Consumer Financial Protection Bureau? We have encouraged members to stay connected with one another by attending local and national meetings and by contacting their legislators on issues that could impact our business, in particular Buy-Here, Pay-Here. The NIADA website includes a blog where dealers can find information on local and national issues and answers to their specific questions.

You are a strong advocate for dealer education. What resources does NIADA provide dealers? NIADA is serious about education, and we recognize that it is one of the strongest things we have to offer our members. Knowledge is power, and what you don’t know can hurt you. Our three-day Certified Master Dealer Program gives dealers the critical skills and information they need to meet the challenges of operating successfully in a challenging environment. NIADA and its industry partners provide dealers with online and in-person training that covers the full range of inventory and dealership management topics. For example, the NIADA/Manheim partnership teaches dealers how to buy and sell vehicles online through The Wholesale Institute training on NIADA TV.

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Tom and Tony:

Recently, this office has seen an increase in the number of ETAPS applications that were not placed in “submitted� status prior to being sent to this office. In other words, the designated agent is not paying for the title application before sending it in for processing. In order to effectively address this issue, ETAPS applications that received in this office without being placed in “submitted� status will be returned and placed in a “returned nonpayment� status. These applications will remain in “returned non-payment� status until the designated agent places the application in “submitted� status through ETAPS and returns the title application package to this office for processing. In the event that the designated agent fails to timely submit the returned application packages to this office within sixty days, access to ETAPS will be suspended. Please feel free to distribute this information to your members. Respectfully, Mike Gamble, Assistant Director Motor Vehicle Division Alabama Department of Revenue P.O. Box 327610 Montgomery, AL 36132-7610

AUCTION %*3&$503:

MVD: Designated Agent Alert

ABC – ATLANTA 444 Joe Frank Harris Parkway Cartersville, GA 30120 Sale every Tuesday 6 p.m. & Friday 11 a.m. Phone: (770) 382-1010

)*()8": %&"-&34 AUTO AUCTION 2100 Hwy. 101 Rogersville, Al (256) 247-3600 Sale Day – Thursday 10:30 a.m.

"#$ #*3.*/()". 1046 A.E. Moore Drive Moody, AL 35004 Sale every Wednesday 12:30 p.m. Inops at 12 pm Phone: (205) 640-4040

,&--&: "650 "6$5*0/ 3485 US Hwy. 431 Attalla, AL 35954 Sale every Tuesday night Phone: (256) 538-9095

ADESA ATLANTA AUTO AUCTION 5055 Oakley Industrial Blvd. Fairbum, GA 30213 Sale every Wednesday 10 a.m. & Friday 6:30 p.m. Phone: (770) 357-2277

-0/( #&"$) "650 "6$5*0/ */$ 8494 County Farm Rd. Long Beach, MS 39560 Sale every Wednesday 3 p.m. Phone: (228) 452-2030

"%&4" 0' #*3.*/()". 804 Sollie Dr. Moody, AL 35004 Sale every Monday 6:30 p.m. & Wednesday 9 a.m. Phone: (205) 640-1010

-06*4*"/" 4 45 $)0*$& Auto Auction 18310 Woodscale Rd. Hammond, LA 70401 Sale every Tuesday 9 a.m. Phone: (985) 345-3302

"%&4" ,/097*--& 1011 Adesa Pkwy Lenoir City, TN 37771 Sale every Tuesday 6:30 p.m. & Friday 9:30 a.m. Phone: (865) 988-8000

MANHEIM CENTRAL FLORIDA 9800 Bachman Rd. Orlando, FL 32824 Sale every Wednesday 9 a.m. Phone: (407) 438-1000

ADESA OF MEMPHIS 5400 Getwell Rd. Memphis, TN 38118 Sale every Tuesday 9 a.m. Phone: (901) 365-6300

MANHEIM NASHVILLE 8400 Eastgate Blvd. Mt. Juliet, TN 37122 Ford Factory Sale every other Monday 11 a.m. Open Sale every Wednesday 9 a.m. GM Factory Sale every other Thursday 10 a.m. Nissan Factory Sale once per month Friday 9 a.m. Phone: (615) 773-3800

"-#"/: "650 "6$5*0/ 1421 Liberty Expressway SE Albany, GA 31702 Sale every Thursday 6:30 p.m. Phone: (229) 435-7709 ATLANTA AUTO AUCTION 4900 Buffington Rd. Red Oak, GA 30272 Sale every Thursday 9 a.m. Phone: (404) 762-9211 #*3.*/()". "650 "6$5*0/ 125 Meadland Circle Birmingham, AL 35023 Sale every Thursday 6 p.m. Phone: (205) 744-4030

MANHEIM TENNESSEE 1450 Lebanon Road Nashville,TN 37210 Fleet Lease and Dealer Consignment sales every Monday at 4 p.m. and every Tuesday at 10:30 a.m. Total Resource Auction every Monday at 1 p.m. Phone: (615) 244-2140 www.manheimtennessee.com

CENTER POINT AUTO AUCTION 100 13th Ct. NE Birmingham, AL 35215 Sale every Tuesday 6 p.m. Phone: (205) 856-6527

MANHEIM MISSISSIPPI 7510 US Hwy. 49 N Hattiesburg, MS 39402 Sale every Monday 5 p.m. & Thursday 9 a.m. Phone: (601) 268-7550

$)"55"/00(" "650 "6$5*0/ 2120 Stein Dr. Chattanooga, TN 37421 Sale every Tuesday 10 a.m. Phone: (423) 499-0015

MANHEIM METRO ATLANTA 2244 Metropolitan Pkwy SW Atlanta, GA 30315 Sale every Tuesday noon Phone: (404) 767-3652

DEALERS AUTO AUCTION OF HUNTSVILLE 26125 Hwy 72 Athens, AL 35613 Sale every Tuesday 9:30 a.m. Phone: (256) 232-0201

MIDFIELD CAR AUCTION 1468 Hartman Industrial Blvd. Midfield, AL 35228 Sale every Wednesday and Saturday-6:30 p.m. Phone: 205-923-6535 PENSACOLA AUTO AUCTION 401 West Burgess Rd. Pensacola, FL 32503 Sale every Thursday 9:30 a.m. Phone: (850) 477-3063

DEANCO AUTO AUCTION 3664 South Oates St. Dothan, AL 36301 Sale every Wednesday 10 a.m. Phone: (334) 792-1116 (&03(*" $"30-*/" AUTO AUCTION 884 E. Ridgeway Rd. Commerce, GA 30529 Sale every Wednesday 3 p.m. & Friday 6 p.m. Phone: (706) 335-5300 (&03(*" %&"-&34 AUTO AUCTION 7205 Campbellton Rd. Atlanta, GA 30331 Sale every Tuesday 10 a.m. Phone: (404) 349-5555 (3&"5&3 /&8 03-&"/4 AUTO AUCTION 61077 St. Tammany Ave. Slidell, LA 70460 Sale every Wednesday 9:30 a.m. Phone: (504) 643-2061

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(6-' 45"5&4 "650 "6$5*0/ --$ 6615 Mobile Hwy. Pensacola, FL 32526 Sale every Tuesday 9:30 a.m. Phone: (850) 944-1945

SHOALS NORTH ALABAMA AUTO AUCTION 651 Fairground Road Muscle Shoals, AL (256) 381-2745 Sale every Tuesday night @ 6:30 p.m. SOUTH ALABAMA AUTO AUCTION LLC 27472 Wilcox Road Robertsdale, Al 251-964-7012 Sale Days – Tuesday & Thursday 6:30 p.m. Sat. Auction @ 11 a.m. :063 "6$5*0/ 3010 Scherer Dr. N St. Petersburg, FL 33716 Sale every other Tuesday 11 a.m. – Birmingham The Jim Burke Automotive Group Phone: (800) 675-4444

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new and renewing members WELCOME NEW MEMBERS S. FRANCIS MOUAWAD A1 AUTO SALES SEMMES ALEKSANDR GORBATYUK ACCELERATED DESIGNS USED CARS HUNTSVILLE JONATHAN AND APRIL PERKINS ALLIANCE AUTOS LLC BIRMINGHAM MARK BOUDOUSQUIE/LISA BOUDOUSQUIE ANGELO’S WHOLESALE HARTSELLE DAVID BEASON, MARKET MANAGER AUTO FINANCE (B’ham only) SPARTANBURG, SC LESTER AVERY BAMA AUTO AUCTION FT. PAYNE

JOEL OWENS DRIVE AND SAVE BIRMINGHAM

ANDREW TURNBULL TURNBULL GROUP LLC STERRETT

JERRY KILPATRICK JERRY V. IILPATRICK MOTORS INC. BOAZ

DARRELL PETTIE FIRST CLASS AUTO SALES BESSEMER

DONNY CROWE TUSCALOOSA CHEVROLET INC. TUSCALOOSA

JIMMY WELLS JIMMY WELLS USED CARS INC. RAINSVILLE

SUE SKIPPER G. S. AUTO EXCHANGE GREENVILLE

BOBBY WARD U S AUTOMOTIVE BIRMINGHAM

JOHN DUNN JOHN DUNN AUTO SALES SYLACAUGA

GARY RYALS GARY’S AUTO SALES GULF BREEZE, FL

VERLON AND SHEILA PAINTER VERLON PAINTER MOTORS INC. ALBERTVILLE

DON W. CROFT K C’S USED CARS SCOTTSBORO

RAMI ACHDUT HIGHLINE IMPORTS INC. BIRMINGHAM

RHONDA JOLLY WOODALL & HOGGLE INSURANCE AGENCY BOAZ

DAVE DEWOLF KELLEY AUTO AUCTION ATTALLA

TRACY HONEA HONEA MOTORS INC. ALBERTVILLE ROBERT J BARNETT J B AUTO WHOLESALERS DOTHAN

LARRY D. PUCKETT COMMUNITY CARS INC. PRATTVILLE

DARYL NELSON JD BYRIDER DAVENPORT, IA

CHRISTOPHER ELLISON ELITE TRAK GPS WOODSTOCK, GA

KEN HARRIS KEN HARRIS AUTO SALES MORRIS

KATHRYN HOWARD HOWARD AUTOS INC. MCCALLA

MORRIS KENNEDY KENNEDY USED CARS MUSCLE SHOALS

NEIKA WILLIS K AND K AUTO SALES AUBURN CHRIS MUNDY MUNDY MOTOR CO. INC. CHELSEA JOSH RYAL/ROBERT COX UNIQUE AUTOMOTIVE LLC ENTERPRISE RENEWALS MIKE PEAVY/NANCY THOMAS A & P AUTO SERVICE INC. MONTGOMERY TERRY J. INGRAM APPROVED AUTO SALES LLC DOTHAN R JOE ANDREANI AUTOMAX OF NORTH ALABAMA MADISON CHARLES W. REDDEN, PRESIDENT AUTOTEC LLC BIRMINGHAM SHERRY FOSTER AUTOTRADER.COM CHARLOTTE NC GEORGE ADKINS BUY GEORGE AUTO SALES INC. HUEYTOWN BARBARA CANNON JENNINGS CANNON CARS BIRMINGHAM MICHAEL W. CARROLL CARROLL’S AUTO SALES PIEDMONT JIM CLARK CENTER POINT AUTO AUCTION BIRMINGHAM KEN WILLIAMS, PRESIDENT CENTRAL MOTORS INC. JASPER PHILLIP BENTLEY III CREDIT NOW AUTO SALES HUNTSVILLE ROBERT C BRYANT CROWN AUTO SALES MOBILE DAVID E DAVIS DAVIS AUTO SALES EDWARDSVILLE DAVID DAWOUD DAWOUD AUTO SALES BIRMINGHAM STEPHEN/BARBARA DENNIS DENNIS AUTO SALES BIRMINGHAM DEWEY BARBER/D SCOTT BARBER DEWEY BARBER CHEVROLET INC. WARRIOR

SAMEER YOUSEF KING MOTORS STERRETT OZZIE KING KING’S AUTO SALES LLC MUSCLE SHOALS J. R. OWEN KREDIT KING INC. MONTGOMERY M C MORRIS LONG BEACH AUTO AUCTION LONG BEACH, MS TERRY LOWERY LOWERY BROTHERS MOTORS INC. BOAZ JAMES A CONHEADY MAGNOLIA AUTO SALES INC. DECATUR CHARLES T MALONE/LISA MALONE MALONE AUTO SALES INC. CITRONELLE MIKE DELONGCHAMP MONTGOMERY AUTOMOTIVE GROUP INC. MONTGOMERY JEFF CORNELIUS/MITCH MORGAN QUALITY AUTO SALES GUNTERSVILLE JOHN HIGHTOWER III ROAD RUNNER AUTO SALES TUSCALOOSA RAY RODDAM SAM’S AUTO SALES BIRMINGHA R GLENN ALBERTSON SOUTH ALABAMA AUTO AUCTION LLC ROBERTSDALE JULIA SCHEFANO SOUTHERN WHOLESALE AUTOMOBILES LLC BIRMINGHAM

KEN & TRACI WRIGHT WRIGHT AUTO SALES INC. MONROEVILLE JEFF WREYFORD/MIKE GERRISH AFFORDABLE MOTORS LANETT LEON J ALEXANDER ALEXANDER DODGE/CHRYSLER/JEEP ALBERTVILLE BASMA LUBAD ANAHEIM AUTO AUCTION BIRMINGHAM

TYESHIA ROBERTSON LET’S RIDE AUTOMOTIVE BIRMINGHAM NORMAN DODSON/BOB LECROY MCD MOTORS INC. MOBILE DAVE LAWSON MIDFIELD CAR AUCTION/TITLES LLC MIDFIELD STANLEY FOWLER NORTHWOOD AUTO SALES LLC NORTHPORT MARK A ODOM SR ODOM CHEVROLET INC. EUTAW

JAMES BLASIUS AUTOMOTIVE CREDIT CORP. SOUTHFIELD, MI RANDY BESHEARS BESHEARS AUTO SALES INC. OXFORD BILLY THOMPSON BILLY THOMPSON MOTORS SYLACAUGA

FRANKLIN PEACOCK PEACOCK AUTO SALES SLOCOMB BILLY L PRESSLEY PRESSLEY AUTO SALES OXFORD CHRISTOPHER HARRIS R C MOTORS INC. BIRMINGHAM

J SHANNON BROWN BROWN KAR MART INC. ALBERTVILLE

RAY BELL RAY BELL MOTORS LLC MONTGOMERY

JAMES L WILABAY CVC AUTO SALES INC. ALBERTVILLE

J R REID REID’S AUTO SALES EIGHT MILE

BUDDY M ROBINSON C & E AUTO SALES OXFORD RAY DOSS/MAURICE NUBY CARS-4-YOU INC. dba PREFERRED IMPORTS LEEDS LAMAR CHASTEEN CHEROKEE LTD. PIEDMONT DAVID ANDREWS/JIM BRANNON CITY AUTO FINANCE LLC MEMPHIS TN O’NEAL CLEVELAND CLEVELAND AUTO SALES SPRINGVILLE

BOBBY SANDERS SANDERS MOTOR CO. WETUMPKA BOBBY L SANDERSON SANDERSON TRUCK SALES DECATUR GARY SHERRILL SHERRILL MOTOR CO. TUSCALOOSA STAN GILLARD STANS CAR SALES LLC IRONDALE RUSSELL L SIRMANS STATEWIDE AUTO SALES LLC BIRMINGHAM

CHRISTOPHER T HOWLE CRIS HOWLE AUTO SALES LILLIAN

ROBERT STEPHENS STEPHENS T RUCK & EQUIPMENT SALES MILLBROOK

DARRLE PALMER DARREL PALMER MONTGOMERY DONNIE W DEAN DEANCO AUTO AUCTION INC. DOTHAN DONNIE & KENNY GALLOWAY GALLOWAY AUTO SALES ALBERTVILLE

LON SMITH SOUTHEAST FLEET SALES INC. MOBILE

RONNIE WARE/DON GENTRY GENTRY & WARE MOTOR CO. OPELIKA

CHARLIE BAKER STRATEGIC SOLUTIONS LLC BIRMINGHAM

RICHARD GILBERT/RICHARD BAKER GILBERT & BAKER FORD BOAZ

LARRY JEAN SYBLE’S AUTO SALES TONEY

PETE SELLERS GULF COAST MOTORS INC. BAY MINETTE

JOSH GUNTHER TEAM GUNTHER KIA DAPHNE

DAVID FARMER/GREG & KIM BATTLES HERITAGE REALTY & AUCTION CO INC. TRUSSVILLE

MARK JACKSON TRADEMARK AUTOMOTIVE GROUP TUSCALOOSA

BRENDA S WOOD J. M. WOOD AUCTION CO. MONTGOMERY

THURMAN D PARKER T. PARKER AUTO SALES WETUMPKA MITCH EARLY/JOHN WATSON THE LEMON LOT LLC DOTHAN MIKE TIDWELL TIDWELL MOTORS ONEONTA DAVID HOLLEY VALLEY SELECT MOTORS VALLEY WAYNE GRAVES WAYNE’S AUTO SALES ALABASTER WAYNE REAVES WAYNE REVES AUTO SCHOOL/ COMPUTER SYSTEMS MACON, GA JIMMY SHELTON WE FINANCE AUTO SALES LLC HAZEL GREEN STEPHEN M/LINDA WHITE WHITE’S TIRE & TOWING INC. FLOMATON

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Sorting Through Exceptions to the Risk-Based Pricing Notice The FTC’s risk-based pricing notice requirements became effective Jan. 1. To comply with these requirements, dealers

must alert consumers when they are getting different credit terms than others based on credit information. The good news is the requirements give options for how and when you provide the notice. That’s also the bad news because the options and exceptions can make it difficult to figure out if you’re in compliance. To help you sort through the maze, here are some of the important exceptions and how they apply to you.

Your dealership doesn’t need to provide a notice if: t You don’t do risk-based pricing of credit terms. This applies if every consumer whose application is approved is offered credit on the same terms. t You don’t use credit reports in any way to make a credit decision. If your dealership directly contacts employers and other references and is not otherwise using any third party information, then the risk-based pricing notice is not required (it sounds rare, but there are dealers who qualify for this exception).

A notice isn’t required for a specific transaction if: t The credit requested is not for a consumer purpose (personal, family or household use). t The transaction is a consumer lease. t The consumer applies for a specific credit product and is approved for those terms. t You offer specific terms to a pre-screened group and extend credit on the offered terms to one of them. t The consumer is a co-signer (which is different from a coborrower), guarantor, surety or endorser in the transaction.

Independents Remain Profitable in Challenging Environment Our team at Manheim Consulting had the pleasure of interviewing NIADA President Anthony Underwood for a question and answer session discussing the state of the used vehicle market from the perspective of independent dealers as we compiled the recently released, 16th annual Used Car Market Report (UCMR).

Underwood framed the challenges facing independent dealers in a way that confirmed what our data was telling us: independents are encountering higher prices for inventory at the wholesale level and finding fewer pre-owned vehicles in the marketplace. In response, these dealers are focusing on sound inventory management practices, and using all available sales channels – including online – to source just the right inventory to meet their customers’ needs. We examined these and other trends in the UCMR, which is Manheim’s annual analysis of the forces shaping the used auto industry. As part of the ManheimNIADA Dealer’s Edge partnership, I’m happy to let you know you can download the entire report free of charge by taking a very brief survey at www.surveymonkey.com/s/manheim. As a comprehensive analysis of the trends shaping the automotive industry, the 2011 UCMR contains much more valuable information pertaining to independent dealers, as well as chapters on other aspects of the industry, including rental, leasing, fleets, repossessions and salvage. I encourage NIADA members to download their free copy of the UCMR, and as always, please e-mail me any time with your questions. BY TOM WEBB Tom Webb is chief economist for Manheim Consulting. Contact him at Thomas. webb@manheim.com, follow him via Twitter at www.twitter.com/TomWebb_ Manheim and read his blog at www.manheimconsulting.typepad.com.

t The consumer’s application is denied and you provide an adverse action notice. t You provide the consumer with the credit score disclosure instead of the risk-based pricing notice. The disclosure is an alternative form authorized by the regulations. If you use it, you must provide it to all consumer applicants instead of providing a risk-based pricing notice only to the portion of applicants who are not receiving your most favorable credit terms. It is likely some of these exceptions apply to your dealership and its transactions. Before relying on an exception, review the regulation or discuss it with your legal counsel to be sure you implement it correctly. The regulation can be found at 16 CFR §§ 640.1-.6. BY CH I P ZYVO LOSKI Chip Zyvoloski is senior attorney for indirect lending at Wolters Kluwer Financial Services. For more information, visit www. wolterskluwerfs.com/indirect.

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