WEST COAST
DEALER
THE OFFICIAL MAGAZINE OF INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION OF CALIFORNIA | DECEMBER 2018
PAGE 8
2018 IADAC
QUALITY DEALER
DALLAS, TEXAS Permit No. 2079
PAID
PRSRT Standard U.S. Postage
GUS CAMACHO
S TAT E A F F I L I AT E
VISIT US AT W W W.IADAC.ORG
WWW.IADAC.ORG
DECEMBER 2018 WEST COAST DEALER 1
DECEMBER INSIDE
2018
06.........................................President’s Message 08.........................................IADAC Quality Dealer 10.................................... 50th Annual Convention 12.................................................. 20,000 by 2020 14................................. Ride-Hailing v. Ownership 16........................................Electronic Signatures 18..........................................................NIADA CPO
ADVERTISERS INDEX
ADESA.................................................................. 7 AmTrust Financial..............................................13 AutoZone............................................................. 9 AVRS ................................................................ IBC Lobel Financial.................................................... 3 Manheim............................................................. 11 NADA Convention............................................. BC NextGear Capital................................................12 Protective........................................................... 5 Textmaxx Pro ......................................................8 TrueCar...............................................................15 vAuto.................................................................IFC
WHAT’S NEW
NABD SESSIONS ONLINE Check it Out on NIADA.TV All sessions from the NABD Buy Here, Pay Here Subprime Conference powered by NIADA are now available online. The robust offering of education sessions from the BHPH industry’s premier event includes topics such as Facebook Marketplace, underwriting, the effects of the new tax laws, social media, internal controls, industry benchmarks and more from industry leaders. Check it out at NIADA.TV.
OFFICE
For information on how to become a member please contact larry@IADAC.ORG or 916-893-3306.
NIADA HEADQUARTERS
NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838
For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com. West Coast Dealer is published bimonthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203. 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 authors and do not necessarily represent the views of West Coast Dealer or NIADA. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2018 by NIADA Services, Inc.
STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITORS Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT Christy Haynes PRINTING Nieman Printing
EDITORIAL NOTE
CORRECTION Legislation
In last month’s issue it was incorrectly reported the IADAC-sponsored Sales Education bill was signed into law. AB 2026 would have required dealers to be sure their licensed sales staff completed a basic education program. This bill was drafted to provide consumers a measure of confidence that licensed sales staff involved in a sales transaction would have an understanding of the myriad of laws relating to auto sales. Dealers and DMV Investigations would have benefitted also as a result of fewer consumer complaints. AB 2026 passed the Transportation and Appropriations Committees in the Assembly and Senate, plus floor votes in both houses with zero no votes and zero opposition. That in itself is a remarkable feat in California’s legislature. AB 2026 sat on Governor Jerry Brown’s desk until two days prior to the signing deadline and he chose to veto this bill with a stroke of his pen.
IADAC PAST PRESIDENTS LIST GUS CAMACHO, 2015-2017 ROCCO DELAPA, 2013-2015 ROD DAVIS, 2010-2013 DAVID AAHL, 2009-2010 TERRY DEGMETICH, 2007-2009 LUIS ESTRADA, 2006-2007,
2001-2002, 1989-1990 ROGER HANKE, 2004-2006 PEANUT RENFROW, 2003-2004, 1996-1997 FRANK GROMAK, 2002-2003 MIKE MACAULAY, 2000-2001 BOB HENRY, 1998-2000 RAY FOREST, 1997-1998 REX RODEN, 1995-1996
JIM MITCHELL, 1974-1975 VIC SNYDER, 1973-1974 FRANK HAMMER, 1972-1973 MANUEL ROGERS, 1971-1972 JOHN HIATT, 1970-1971 DOUG ALMAN, 1969-1970 BOB SCORDINO, 1968-1969 LUCKY SKYRME, 1966-1968 LEONARD CRAVENS, 1964-1966, 1960-1961
WALT HOWEY, 1962-1964 TRAVIS GODBOLD, 1961-1962 WENDALL ANDERSON, 1959-1960 DICK RAFFERTY, 1957-1959
HONORARY PRESIDENTS
FRANK MURRAY RICK GOMEZ
EXECUTIVE COMMITTEE CHAIRMAN OF THE BOARD
VICE PRESIDENT
Gus Camacho Camacho Auto Sales, Inc. Lancaster, CA
Guy Strohmeier Auto Center 87 Soda Bay Rd Lakeport, CA
PRESIDENT
VICE PRESIDENT
SR. VICE PRESIDENT
VICE PRESIDENT
Brenna Stansberry Park Marina Motors Redding, CA Mehdi Chitgari Classic Chariots, Inc. Vista, CA
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DOUG ROBERTS, 1994-1995 ED DOHNT, 1993-1994 OPIE HENDRICKS, 1992-1993 MANNY PADILLA, 1991-1992 GREG HODGES, 1990-1991 JERRY COWGILL, 1988-1989 DON HEAD, 1987-1988 JOHN BRAUN, 1986-1987 RAY GLOVER, 1984-1986 PAT MATLACH, 1983-1984 LARRY BRASHER, 1982-1983 TOM FIELD, 1981-1982 JIM MCCABE, 1980-1981 ROY WILHITE, 1979-1980 LEONARD BOYD, 1978-1979 JORDAN SUGARMAN, 1977-1978 BOB DUTTON, 1976-1977 TOM KENT, 1975-1976
Brittany Hibdon Hibdon Auto Center Orland, CA Bruce LaVergne
TREASURER
Beto Beas Beas Auto Sales Stockton, CA
SECRETARY
Christina Hinkle ADESA Brasher’s, Rio Linda, CA
MAGAZINE CHAIRMAN
Mike Macaulay Car Systems carsystems40@yahoo.com
ASSOCIATION NEWS | By Brenna Stansberry
PRESIDENT’S MESSAGE
Coming Together
If you weren’t at the IADAC annual convention you really missed out! This single-day event in Sacramento was perfect for dealers to attend and learn about new legislation. We had a great turnout and informative presentations from DMV on the Temp Tag bill and from Dealertrack on F&I. Our new single-day format pleased dealers who cannot be away from their dealerships for multiple day events. As we refine our gatherings we hope to continue increasing attendance as more and more dealers recognize that IADAC provides valuable information for the industry. This year California tallied a great number of fires across the state and we saw communities come together to help those in need. I personally witnessed the Carr fire in northern California and cannot begin to describe the devastation that occurred. Many lost their homes and all belongings, but found help waiting from others. When tragedies such as this occur it is quite special to see generosity pour in from many members of the community. Thanks to all of you who provided help for victims of fire. At the annual convention we witnessed generosity also, but from our vendors who supported the event. We saw dealers come together, involved in conversations between themselves as well as participating in the question and answer session during the DMV Temp Tag presentation.
ASSOCIATION NEWS |
Sometimes it takes a legislative “crisis” to bring dealers together but I want to remind you that IADAC is always there for you, not just in times of need. We are continuously watching your back. All we ask in return is that you support us with membership. That same membership affords you privileges of discounted buy fees at all the major auctions in California. Those discounts easily add up to more than the $299 annual membership dues. So let’s start thinking about IADAC as the group you can always count on for help and join as a member. Our membership needs a boost. Without revenue from new members IADAC cannot sustain. Take the time today to join IADAC. Membership applications can be found at www.iadac.org, or you can use the online portal to sign up.
By Larry Laskowski
EXECUTIVE DIRECTOR’S REPORT
Convention and the Temp Tag Bill
The recent IADAC convention was well attended, primarily due to DMV’s presentation on the temp tag bill, which begins January 2019. IADAC exists for the independent dealer industry. There is not another group who works with state agencies and departments to interpret new regulations and laws for those dealers. Some years ago, IADAC met with representatives from the Toll Authority who sought a solution for lost revenue due to vehicles passing through FastTrack tolls without plates. Initially, the proposed solution was identified as being too restrictive – many dealers would not be able to comply. IADAC opposed that solution until an alternative idea that DMV would implement was introduced. We also indicated dealers would need to be compensated for such a mandate. AB 516, known as the Temp Tag Bill, will require a dealer (retail and wholesale) to complete a report of sale online. For retailers, if the vehicle does not have two regular California metal plates you will need to print two paper plates and affix them to the vehicle. If you are using a first line provider for electronic titling (i.e. DMV Desk aka Vitu, Dealertrack or AVRS) you should contact them to confirm they have a compliance solution for the temp tag requirement. If you are not using a first line provider for electronic titling, send an email to cadmv-quicktags@ffximg.com with this information: • Dealership name. • Owner name. ASSOCIATION NEWS
IADAC WELCOMES NEW MEMBERS McHenry Auto Sales ReGreen Corp California Motor Sales SS Motors Izzy’s Auto Sales
This vehicle was donated by IADAC president Brenna Stansberry’s dealership, Park Marina Motors, to a charity fundraiser for victims of the Carr fire in Redding, Cali.
Exclusive Motorworks KAS Auto Sales Tred Digital Air Strike Empire Auto Team
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Wishlist Autos UMS Banking CA Lease Returns Borba Registration Route 40 Auto Emporium
• Owner email address. • Best phone number to reach owner. You will be contacted with notification for training and enrollment in the program. Without this you will be out of business on January 1, 2019. IADAC has received many inquiries on this new program from members and non-members alike. We have been helping all dealers to make sure they are informed on this new regulation. Those of you who are not members can say “thank you” by joining IADAC. Yes, we are helping you because our representation includes all dealers but as a non-profit we have overhead to pay. Sign up today and find out about the benefits you’ve been missing. Dues are just $299 annually and the benefits easily negate that cost. Besides, we have a money back policy if you aren’t happy as a new member. Just return the unused VIP Auction Discount Cards for a full refund. The annual convention wouldn’t have happened without help from those companies who support you dealers. Special thanks to the event sponsors listed below whose generosity allowed the event to happen: • Auto Data Direct • Insurance Auto Auctions • Rivington Insurance Partners • Nationwide Finance • Vitu Temp Tags • Dealertrack • TrueCar • AutoZone
ASSOCIATION NEWS
2018 IADAC QUALITY DEALER OF THE YEAR
Congratulations, Gus Camacho!
IADAC’s 2018 Quality Dealer of the Year, Gus Camacho, has an awesome history. This is truly a great American success story. Gus’ immigrant father introduced him to the car business at an early age as he started out by washing cars and other entry level jobs his father assigned. He went on to attend Pepperdine University, where he received a degree in business. After returning home, Gus turned the business from a healthy 20-person operation to having over 100 employees and currently selling over 250 cars a month. Camacho Auto Sales currently holds over 2,100 active inhouse loans. On top of all that, Gus has been very involved in the community from an early age. His family instilled in him great respect and appreciation for the local community he and his employees serve. The list of organizations to which he has given his time and money is vast. Some of the highlights include serving as president of Lancaster West Rotary Club, which is a full time job in itself. During that year Gus helped raise over $100,000 to donate back to the community. He also provides
Gus Camacho with his wife Rhonda yearly scholarships to the local high school. Although Gus is now a new car franchise owner, he continues to support IADAC and the independent auto industry. We are all very thankful for his continued involvement. Through his connections he was pivotal in getting AB 2026, the sales education bill, introduced and passed through the legislature this past year, though Governor Brown ultimately vetoed it. Our industry certainly needs more people like Gus to help improve our industry. After being in business for over 35 years Gus has been presented with many local honors and has appeared on local television and radio stations talking about marketing, growing a business and the used car business in general. Gus is the first to say he could not have accomplished any of these many feats without the love and support of his wife, his family and his great employees. IADAC proudly awards the 2018 IADAC Quality Dealer of the Year to Gus Camacho.
2018 IADAC Quality Dealer of the Year Gus Camacho (right) accepting award from 2017 Quality Dealer of the Year Bruce LaVergne from Pacific Auto.
ASSOCIATION NEWS
HURRICANE RELIEF
Donate or Apply Online
The NIADA Foundation is actively taking applications for the Disaster Relief Fund to assist victims of hurricanes Florence and Michael. NIADA Foundation president and CEO Steve Jordan said, “We are committed to helping our friends and colleagues in the automotive industry get through this trying time. Our thoughts and prayers go out to all those affected or displaced by these massive storms.” To donate, or apply for assistance, visit www.niada.com/disasterrelief.php. All contributions received will be donated to those needing relief from the effects of flooding, property damage or other disaster-related needs attributable to this weather event. Donations will be made in collaboration with the Carolinas IADA, Florida IADA, Georgia IADA and the Virginia IADA and will be considered on a case-by-case basis as identified through this collaborative disbursement relationship. The NIADA Foundation is a tax exempt nonprofit organization under section 501(c)(3) of the Internal Revenue Code and is qualified to receive tax deductible contributions including bequests, devises, transfers or gifts.
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AUCTION NEWS
ADESA GOLDEN GATE ANNIVERSARY SALE
Huge Success
ADESA Golden Gate knocked it out of the park again this year with a huge anniversary sale. Over 3,100 units were consigned and nearly 60 percent sold. This was the first offering where three “virtual sales” lanes were used. This relatively new program allows dealers to view and bid on vehicles in the lanes and online while viewing only pictures and details on screen. Consignors participating in the virtual sale were Volkswagen Credit, American Honda, and BMW Financial. There were over 1,200 bidders in total for this racing-themed event. Thousands of dollars in prizes were given away to lucky winners. ADESA Golden Gate is located at 18501 W. Stanford Rd. in Tracy, California.
ADESA Golden Gate General Manger Jeff Hoyt
WWW.IADAC.ORG
DECEMBER 2018 WEST COAST DEALER 9
ASSOCIATION NEWS
IADAC ANNUAL CONVENTION
Celebrating 50 Years
This year marked the 50th annual convention for the Independent Automobile Dealers Association of California. The event was held at the Embassy Suites in Sacramento. With a view of the state capitol in one direction and the Sacramento River in the other, the location proved to be quite picturesque. Dealers packed the conference room to find out details about the temp tag bill, which starts January 1, 2019. Earlier in the week a limited number of vendors attended a trade show at ADESA Golden Gate in Tracy and at Manheim San Francisco Bay in Hayward. For the vendors it is a chance to see hundreds of dealers in one place, and dealers were able to check out products and services of which they may not have known. IADAC thanks general managers Jeff Hoyt and Greg Beck for opening their facilities to make this happen. The first session was provided by Ed Cox with Dealertrack. He discussed consumer demand for a new, improved F&I experience and how dealers have slowly adapted to meet these needs. Today’s consumer doesn’t want to spend hours in the finance department but would rather handle that process online prior to a dealership visit. Savvy dealers are gradually changing policies to accommodate these trends. DMV guests Andrew Conway, Marvin Hardley and Violet Malko teamed up to provide an overview of AB 516, the temp tag bill. After the presentation a lengthy question and answer session ensued, which helped dealers understand the program. Also, concerns were brought up that had not been considered by DMV so it was an informative session for them also. The scholarship auction raised $20,000 for children of IADAC dealer members who have enrolled in college or post-high school educational programs. Past president and trustee Don Head indicated 11 students received awards this year. IADAC new executive committee members are as follows: • Chairman of the Board: Gus Camacho • President: Brenna Stansberry • Sr. Vice President: Bruce LaVergne • Vice-President: Mehdi Chitgari • Vice-President: Brittany Hibdon • Vice-president: Guy Strohmeier • Treasurer: Beto Beas • Secretary: Tony Harb For more information on AB 516 you can go to the IADAC website: www. iadac.org. Email Larry@iadac.org with any questions you may have.
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2017 Quality Dealer recipient Bruce LaVergne with 2018 Quality Dealer recipient Gus Camacho
From left to right: IADAC president Brenna Stansberry, State Quality Dealer award recipient Gus Camacho and director Larry Laskowski.
Past President Don Head installing new IADAC Executive Committee
Left to right: John Hayes, ADESA Sacramento GM Laura Seek and Pal Singh. John and Pal bid $1,600 for parking spots to benefit the IADAC Scholarship.
ASSOCIATION NEWS | By Paul John
NIADA Begins New Membership Initiative
The National Independent Automobile Dealers Association has begun a new nationwide membership initiative. Its goal is to reach 20,000 members by 2020. The organization will reach this goal by focusing on the states with the highest growth opportunity. This simple strategy measures current market share – number of members compared to number of licensed dealers. NIADA state-affiliated associations that provide more dealer educational programs and effective advocacy at the state capital – and are able to negotiate exclusive member discounts for their members – generally have a bigger footprint, typically between 30 and 60 percent market share penetration. NIADA has already begun working with the state organizations by working closely with the state directors and their board members to understand their state-specific challenges as well as develop a clear understanding of their goals. And more importantly, NIADA is working with states’ leadership on specific strategies that will pave the way for state associations to grow and stay relevant.
Paul John is NIADA’s vice president of national field operations. He can be reached at paul@niada.com or 770-616-5156.
ACCELERATE |
By GWC Warranty
EARNING TRUST IN F&I
Showing Customers the Value of F&I Products
Perhaps the most difficult obstacle to overcome in the F&I office is getting your customers to trust that the products you’re offering will be worth the added cost. Establishing that trust is the first step in building the foundation for long-term F&I success. But how do you go about gaining the trust of someone whose money you’re looking to spend on additional products like a vehicle service contract? Just like most things in life, honesty is the best policy in the F&I office. Being upfront about monthly costs, coverage limitations and the company backing your products will help customers feel the confidence they need to feel to make a service contract purchase. Payment Transparency For the vast majority of customers, you’re negotiating on monthly payment and getting them on board with how the cost of a service contract impacts what hits their bank accounts each month. At a glance, the added cost can be staggering, especially in a world where 78 percent of people are living check to check. But breaking it down by daily cost could help overcome this hurdle. For example, the daily cost of a $300 payment is roughly $10 a day. If you add $50
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per month for a service contract, that daily cost is just over $11 a day. This nominal daily increase compared to the cost of major repairs can help customers see the value in added vehicle protection. Coverage Transparency Not all coverage levels were created equally. It’s important to impart this to your customers. If you’ve mastered your menu selling strategy, working backwards from the highest level of coverage achieves this goal for you. Focusing on what customers miss out on and using this technique in tandem with highlighting small daily cost differences, it’s easy to spell out value that will help your customer see you have their long-term financial interests in mind. Provider Reputation Customers may object to a service contract due to the industry’s reputation. But working with a reputable partner has its benefits – most notably your ability to showcase that reputation to customers. When you can show customers the product you’re selling is backed by a company with decades of experience and billions in claims paid, peace of mind will come easily – and quickly. Showcase Past Results Does your customer still not trust your F&I process? Even the most difficult customers can’t deny real-life results. Keep close a file of past work orders or a claims paid report and show that difficult buyer all the money VSCs have saved your past customers. No customer can refute the value of a VSC after seeing exactly what it’s done for people in their shoes.
MARKET WATCH
RIDE-HAILING V. OWNERSHIP
Recent AAA Study
It’s impossible to ignore the impact of ride-hailing companies. You would be hard-pressed to drive a mile without seeing a vehicle with an Uber or Lyft sticker in the window. The widespread popularity of Uber and Lyft would make it seem as though ride-hailing must be a great alternative to vehicle ownership. Without owning a vehicle you would eliminate many expenses such as insurance, fuel, maintenance and depreciation, to name a few. When you factor in the costs of vehicle ownership versus ride-sharing, what is the bottom line? It could be as close as a coin toss, right? Would it surprise you to learn one costs about twice the other? A 2018 AAA report sums it up in simple terms. You will find that report here: https://newsroom.aaa.com/2018/08/ ride-hailing-double-cost-car-ownership Many people have chosen to provide rides on a part-time basis while others treat it as a full-time job. One full timer who drives for Uber and Lyft both said he drives 200-250 miles per day (52,000-65,000 annually presuming a 5-day work week). Depreciation and maintenance are huge factors for a vehicle owner but what about a branded title? A full-time Uber or Lyft vehicle is by definition a livery vehicle, or taxi cab, and those vehicles will have titles branded as “Prior Taxi.” There is usually a significant devaluation for “Prior Taxi” branded title vehicle upon resale. That is, if the vehicle is declared as such. In many cases Uber and Lyft vehicles are not identified as having been livery (prior taxi) vehicles. A lack of legislative measures that would mandate labeling of these vehicles for consumer protection fails to protect consumers who may unknowingly purchase prior ride share vehicles.
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ASSOCIATION NEWS
ASSOCIATION NEWS
By Mike Macaulay – West Coast Dealer Chair/Editor
By Mike Macaulay – West Coast Dealer Chair/Editor
IN REMEMBRANCE
EDITORIAL COMMENT
Looking to the Future
IADAC Members
Our 50th Anniversary Convention was a success. It was decided to be a one-day format. Our executive director Larry Laskowski did a wonderful job putting it all together. We had speakers on timely issues and a well-attended meeting. Some folks want to go back to a multiday schedule, but this did work and everyone could get back to selling cars the next day. I am sure you are all happy to hear my tenure as magazine chair/editor will be extended for another year. The phrase “no good deed goes unpunished” comes to mind. Just kidding – I do enjoy serving IADAC and am glad to help. The new year brings with it a number of industry changes. As noted, the new paper plate system will be functioning by midDecember. I remember the old paper plates circa early 70’s and before. They were a hassle. I hope this system works better. I think I just dated myself. Two issues ago, I wrote an article titled “Baby You Can Drive My Car.” You may want to read or re-read that piece as it deals with real changes in the very near future to our industry. It speaks of the new generations not wanting personal transportation. We need to adjust our thinking to accommodate the future customer base. Please email me at carsystems40@yahoo.com to request a copy. We do have a Q&A column for all dealers. Industry questions will be answered in real time and then published for all to see in a following magazine issue. Please forward questions to me or Larry Laskowski at the IADAC office.
LEGAL MATTERS |
Our annual convention had a sad note during my Magazine Committee report. I was asked to say a few words about IADAC member passings this year. We lost two past presidents, a long time regular member, and a long time associate member. Past president Ray Glover passed early this year. I wrote an article about Ray in an earlier issue. He was one of the most active and helpful presidents in IADAC history. Ray helped me personally on many occasions. He was always ready with a helping hand and traveled throughout the state in support of IADAC. Past president John Hiatt passed a few months ago. There was an article published in our last issue. John was also a past NIADA president and contributed much to our industry on the state and national level. He was my dear friend and mentor. We all miss John’s soft-spoken and professional manner. Longtime IADAC member Ron Wolfe passed recently. He was active at the local and state level. Ron contributed to every IADAC cause and helped whenever he could. Mark Glover spoke of Ron at the convention. Ron Wolf was a respected dealer and IADAC member. He attended almost every Sacramento chapter meeting and many state conventions. He will be missed. Mason Hobart also passed recently. He was a longtime IADAC associate member. Mason greatly supported the Santa Rosa/North Bay local chapter. Every meeting saw Mason contributing prizes in support. Mason never missed a local meeting and attended many state conventions. He was a passionate supporter of our industry. He will be missed.
By James S. Sifers
ELECTRONIC SIGNATURES IN VEHICLE SALES
Not Currently Allowed in California
Electronic transactions have vastly simplified the way many industries document deals. Several of my automobile dealership clients have inquired as to whether vehicle transactions can be documented electronically. Currently, the answer to that question is no. Despite the aging equipment used to memorialize deals found in many automobile dealerships, including dot matrix printers with cutting edge 1980s technology, California has exempted new and used vehicle leases and sales from its version of the Uniform Electronic Transactions Act. In reviewing the apparent contradiction between the prevalence of electronic signatures and the prohibition on the same for vehicle sales and leases, we first must look at the governing law. Cal. Gov. Code
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§ 16.5 generally allows the use of a “digital signature” so long as it complies with a few requirements, primarily the requirement that the authenticity of the signature can be authenticated. On its face, Section 16.5 allows electronic signatures for documents submitted by a dealer and a buyer to the Department of Motor Vehicles. Going beyond just documents submitted to public entities, Cal. Civ. Code § 1633.7, which applies to contracts/signatures in general, essentially states electronic signatures may not be denied “solely because it is in electronic form.” Section 1633.7 goes on to state that “[a] contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation,” and that “[i]f a law requires a signature, an electronic signature satisfies the law.” (Cal. Civ. Code § 1633.7(b) & (d).) Given California’s broad acceptance of electronic signatures, which is codified by Cal. Civ. Code § 1633.6(1) and which notes the purpose of these laws is “to facilitate electronic transactions consistent with other applicable law,” many dealers are confused as to why then they are not allowed to use electronic signatures for vehicle sales and leases.
For reasons unstated in the law, California has exempted new and used vehicle sales and leases from its version of the UETA. (Cal. Civ. Code § 1633.3(c).) While electronic documentation certainly has an appeal with respect to potentially streamlining how deals are documented – i.e. reduced overhead costs, electronic records, etc. – automobile dealers in California can not yet take advantage of these benefits. This is particularly galling in an industry rampant with litigation claims of forged documents. Electronic documents have the potential to reduce these claims. In 2017, former assemblyman Matt Dababneh from the 45th District and assemblyman member Jay Obernolte from the 33rd district authored a bipartisan bill that would have amended California’s existing law and allowed the use of electronic signatures in vehicle sales and leases. (https:// leginfo.legislature.ca.gov/faces/billTextClient. xhtml?bill_id=201720180AB380; AB 380.) The goal of AB 380 was to bring vehicle sales and leases into the permissible transactions authorized by California’s version of the nationally accepted UETA. However, as of the writing of this article, California has not taken any steps to bring auto dealers into the 21st century as it relates to electronic signatures. For the time being, California’s automobile dealers are still required to obtain wet ink signatures in all of their sales and leases. James S. Sifers, Esq., is a partner with Madison Law, APC and practices real property, business, and employment litigation. Sifers specializes in consumer defense, particularly in the automotive finance field.
ASSOCIATION NEWS
NIADA PARTNERS WITH DEALERSHIPS TO OFFER CPO VEHICLES Two New Dealerships Added to the CPO Family
RLB Sales & Leasing and 6th Gear Auto – both of Fort Worth, Texas – are now proud members of the NIADA Certified family. To celebrate, NIADA held kickoff launches at both dealerships. “It’s important to us to be here,” said Warrantech business development manager and program administrator Mike Sims. “Not only to us as a whole, but to these dealerships as clients, as partners of ours with NIADA.” Scott Lilja, NIADA’s senior vice president of member services, was also on hand to offer support and explain the benefits of partnering with NIADA. “We’ve been around for 73 years protecting dealers’ interests, putting together programs to help them get to that next level in terms of differentiation and quality, and trust and transparency with consumers. And that’s what the NIADA CPO program is really about.” The NIADA Certified Pre-Owned Program offers high-quality used vehicles backed by a powerful warranty with nationwide reach, and backed by NIADA – a national association whose more than 15,000 members are dedicated to integrity and subscribe to a strict code of ethics. For a vehicle to be considered “NIADA Certified,” it must undergo a 125-point inspection conducted by a licensed repair facility and be backed by a rigorous vehicle history report. Once all requirements have been met, dealers are then able to offer these vehicles to their customers along with a number of features and benefits, including the following: • A CARFAX vehicle history report. • Special financing for qualified customers. • Flexible, fully customizable warranty options. • Roadside assistance, towing, vehicle rental and lost key/lockout service. Offering these benefits is already paying big dividends for both dealerships. “My turnover is in the 40s now and that’s what I’m really proud of,” said 6th Gear Auto Sales owner Chris Johnson. “We’re selling cars faster, but more importantly, our systems, our procedures and our policies through Warrantech have helped us sell more cars through our training processes.” “It adds value to what we’re doing here,” said RLB Sales & Leasing general manager Shane Collins. “It adds value to every vehicle we sell. We’ve already seen the uptick. We’re pacing 60 cars this month when last month we did 30, so we’re excited. It’s going to be a long, happy journey.” To learn more about how your dealership can become NIADA Certified, visit niadacertified.com/dealers or call 1-877-3100288 to sign up today.
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6th Gear Auto – Fort Worth, Texas
RLB Sales & Leasing – Fort Worth, Texas