C A R O L I N A S 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 AT I O N June/July 2011
PREPARING YOUR DEALERSHIP FOR SUMMER LSO A Time-Honored Tradition A PLUS CIADA Quality Dealer Nominations Open
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AUTO DEALER NEWS
V isit us at w w w.t heciada.com
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Carolina’s Quality Dealer of the Year Award
MAGAZINECONTENTS 4 CIADA Quality Dealer Nominations Open 6 A Time-Honored Tradition 16 Preparing Your Dealership for Summer
New education sessions from the Conference of Automotive Remarketing are now running on NIADA.TV Several educational sessions from the recent Conference of Automotive Remarketing (CAR) are now up and running free of charge on NIADA.TV. Over
12 sessions from the recent conference will be posted to www.NIADA.TV throughout April and May, so check back often over the next few months. These sessions will be posted in NIADA.TV’s “Remarketing” Channel as well as in the “New Programs” Channel. Get caught up on the latest in “Remarketing” at your leisure 24/7 by visiting to niada.tv.
Not only is it award season on TV, there are a couple of important awards CIADA members need to keep in mind.
The CIADA Quality Dealer for the Carolinas’ Award is seeking nominations. This recognition is the association’s most prestigious award. Nomination and selection brings high honor to the individual and to the dealership. You serve as an inspiration and model for other independent dealers in the association. CIADA will spotlight several of our nominees in emails in the coming months and ultimately, the winner will be showcased in a future issue of our new CIADA magazine.
By accepting the nomination, I ask you commit to attending the CIADA Annual Convention and Trade show in August to be recognized at the Awards Banquet. Ultimately should you be named as the Carolinas’ Quality Dealer of the Year, you must agree to participate in the NIADA Quality Dealer Awards recognition banquet to be held at the NIADA Annual Convention & Expo in 2012 (should you win the CIADA Quality Dealer Award, we will fund a portion of the expenses associated with attending the national convention). Deadline for nominations is June 17; the nominating form can be found at www. theciada.com.
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1955 to assist members in enhancing their reputation in the marketplace, gain Checkpolitical out theinfluence new Education and Training Consortium (ETC) towith watch list grow. and provide opportunities to interact andour meet other The programs listed this site have met stringent criteria that ensures dealers for the on purpose of sharing business and marketing ideas. that the program or product: sAs Responds toand dealership needs ofAssociation, today; a mature long-standing we are proud to maintain the ideThe Carolinas Independent Automobile Dealers Association was organized in sals Demonstrates history of effectiveness; and principles set by the founders. But today, we offer more…far more. 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Just go to NIADA.com’s page and follow the organized linksmarketing to ETC contact nonADESA............................................................ 9 Carolinas franchised dealer! Auto Finance ................................................ 19 to assist As a mature and long-standing Association, we are proud to maintain the ide1955 members enhancing their reputation in the marketplace, gain Georgia Browninatautomobile 800-682-3837 for more information. Auto Portfolio Services ...................................17 als and principles setAssociation, bywith the founders. But today, we offer more…far political influence and provide opportunities to interact and meet other As a mature and long-standing we are proud to maintain the ide- more. AutoTrader.com ......................Inside Back Cover With a fulltime professional staff, modern technology and world class educadealers for the sharing business marketing ideas. als of and principles set and by the founders. But today, offer more…far more. Auto Use....................................................... 23 Thepurpose Carolinas Independent Automobile Dealers Association waswe organized in tional programs, we have become a strong, effective and influential organizaCarolina Auto Auction .................................... 3 With a fulltime professional staff, modern technology and world class educa1955 to assist members in enhancing their reputation in the marketplace, gain Thethe Carolinas Charleston Auto Auction .................. Back Cover tion that exists for one reason only: To represent independent, As21a maturepolitical and long-standing Association, we become are proud maintain idetional programs, we have a to strong, effective and organiza- noninfluence and provide opportunities to interact withthe and meetinfluential other Independent Chase .......................................................... franchised automobile dealer! Automobile Dealers als13and principles set by the founders. But today, we offer more…far more. Manheim.com ............................................... dealers for thethat purpose of sharing marketing ideas. the independent, tion exists for onebusiness reasonand only: To represent nonAssociation was NADART..................................................14, 15 a fulltime professional staff, modern technology and world class educaWith franchised automobile dealer! organized in 1955 SmartAuction ............................................... The 27 Carolinas Independent Automobile Dealers Association was organized in tional programs, we haveand become a strong, effective and influential As amembers mature long-standing proud organizatoDIRECTOR maintain to assist members STARS GPS............................. Inside Front Cover PRESIDENT EXECUTIVE 1955 to assist in enhancing theirAssociation, reputation inwe theare marketplace, gain the idein enhancing their als and principles set by the founders. But today, weBROWN offer more…far more. tion for one reason only: To represent the independent, nonSterling Credit ............................................... 7 that exists CHARLES SAVERANCE JOHN political influence and provide opportunities to interact with and meet other reputation in the United Acceptance .......................................franchised 20 SAVERANCE FAMILY AUTOstaff, CENTER EXT 105 With a fulltime professional modern technology and world class educaautomobile dealer! marketplace, gain dealers for the purpose of sharing business and marketing ideas.
Meet Our Professional Staff EXECUTIVE CIADA COMMITTEE STAFF
UsedCars.com by Dealix................................ 25 Wayne Reaves .............................................. 11 Western General / Protective .........................As 5
Meet Our Professional Staff
Meet Our Professional Staff
FLORENCE, SC tional programs, we have become a strong, effective and influential organizapolitical influence and provide opportunities tion that exists for one reason only: To represent the independent, nonCarl Mischinski John Brown a mature and long-standing Association, we are proud to maintain the Catherine Neelyideto interact with and PRESIDENT ELECTdealer! Ext 109 Executive Director CARL MISCHINSKI franchised automobile Ext 102 meet other dealers als and principles set by the founders. But today, we offer more…far more.
NATIONAL INDEPENDENT Ext 105 TRACY MYERS AUTOMOBILE DEALERS ASSOCIATION With a fulltime professional FRANK MYERSstaff, AUTOmodern MAXX INC. technology and WWW.NIADA.COM • WWW.NIADA.TV WINSTON SALEM, NC NIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR TROY@NIADA.COM.
tional programs, we have become a strong, effective and influential organization that exists for one reason only: To represent the independent, nonCarl Mischinski John Brown NC VICE PRESIDENT franchised automobile dealer! Ext 109 Executive Director
THE CAROLINAS 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 CIADA 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. STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITOR Mike Harbour • mharbour@niada.com PRODUCTION MGR. Jacob Kerns • jacob@niada.com ART/PRODUCTION MGR. Christy Haynes • christy@niada.com PRINTING Nieman Printing
CIADAOFFICE P.O. BOX 1088 HARRISBURG, NC 28075 PHONE: 704-455-2117 OR 1-800-432-4232 FAX: 704-455-6810 WWW.THECIADA.COM CIADA IS A NON-PROFIT 501(C)6 4
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Director, Dealers Risk & Insurance Services world class educaMeet Our Professional Staff EXT 109
Meet Our Professional Staff
MICHAEL DARROW THE AUTO Carl Mischinski FINDERS INC. Krista Simmons Ext 109 Lisa Kluttz Ext 103 Ext 107 DURHAM, NC
Ext 105 CATHERINE NEELY Administrative Director John Brown Catherine Neely Jayne Harris Executive Director EXT 102 Leslie Waslo Ext 102
Ext 111 105
Meet Our Professional Staff Carl Mischinski John Brown 109 Executive Director SCExtVICE PRESIDENT Ext 105
MALCOLM SHEALOR ASHLEY PREFERRED AUTO Carl Mischinski GROUP INC. Ext 109 MT. PLEASANT, SC
Catherine Neely Ext 102
Krista Simmons John Brown Ext 103 Executive Director Ext 105
Krista Simmons
Lisa Kluttz
Ext 110
LISA KLUTTZ Customer Jayne Harris Lisa Kluttz Service Catherine Neely Ext 111 Ext 107 EXT 107 Ext 102 Jayne Harris
Leslie Waslo
JAYNE HARRIS Ext 110 Ext 111 Ext 103 Ext 107 TREASURER Customer Service LUKE GODWIN Carl Mischinski EXT 111 John Brown Catherine Neely LeslieBox Waslo Krista Simmons Lisa Kluttz INC. Jayne Harris P.O. 1088 Ext 109 GODWIN MOTORS Executive Director Ext Ext 111 Ext102 110 Ext 103 Ext 107 Ext 105 Harrisburg, NC 28075 COLUMBIA, SC
for the purpose of sharing business and marketing ideas.
AsNeely a mature and Catherine Extlong-standing 102
Association, we are proud to maintain the ideals and principles set by the founders. But today, we offer more…far more. With a fulltime professional staff, modern Leslie Waslo and world Exttechnology 110 class educational programs, we have become a strong, effective and influential organization that exists for one reason only: To represent the independent, non-franchised automobile dealer!
Phone: 704-455-2117 or 1-800-432-4232 Harris Leslie Waslo Fax:Jayne 704-455-6810 Ext 111 Ext 110WASLO LESLIE www.theciada.com SECRETARY DRIS Accounts Manager P.O. Box 1088 WILL DAVIS 110 CIADA is a non-profit EXT 501(c)6 Harrisburg, NC 28075 G & B AUTO SALES OF Phone: 704-455-2117 or 1-800-432-4232 LOUISBURG INC. Fax: 704-455-6810 LOUISBURG, NC Jayne Harris Leslie Waslo Krista Simmons Lisa Kluttz www.theciada.com Ext 111 Ext 110P.O. Box 1088 Ext 103 Ext 107 Harrisburg,CIADA NC 28075 is a non-profit 501(c)6 CHAIRMAN OF Phone: 704-455-2117 or 1-800-432-4232 THE BOARD P.O. Box 1088 Fax: 704-455-6810 BOBBY HOFFMAN Harrisburg, NC 28075 www.theciada.com SPEC HOFFMAN AUTO SALES Phone: 704-455-2117 or 1-800-432-4232 1088 ASHEBORO, NCFax: 704-455-6810P.O. Box CIADA is a non-profit 501(c)6 Harrisburg, NC 28075 www.theciada.com Phone: 704-455-2117 or 1-800-432-4232 704-455-6810 CIADA is a non-profitFax: 501(c)6 www.theciada.com Krista Simmons Ext 103
Lisa Kluttz Ext 107
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CIADA P.O. Box 1088 is a non-profit 501(c)6 Harrisburg, NC 28075 Phone: 704-455-2117 or 1-800-432-4232 Fax: 704-455-6810
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A time-honored tradition: Memorial Day and the 4th of July
I would like to thank all independent auto dealers in North and South Carolina who have family and friends who have given the ultimate sacrifice for the freedoms we enjoy as citizens of the United States of America. While we have officially celebrated Memorial Day, the importance of this holiday is often over looked. In part, it’s
my favorite time of the year for several reasons among them; mid-summer is my birthday and the Fourth of July is in part, the real reason my family is here in America. But you will have to wait until a future edition of the CIADA Magazine to read more about my ancestry. For now, let’s focus on Memorial Day and the Fourth of July. It would serve us well to take time out from our busy schedules to be reminded about what Memorial Day is all about. Memorial Day, originally called Decoration Day, is a day of remembrance for those who have died in our nation’s service. It started with the Civil War. Memorial Day was officially proclaimed on May 5, 1868, by General John Logan, national commander of the Grand Army of
the Republic, in his General Order No. 11. man committee, consisting of Thomas The holiday was a response to the Jefferson of Virginia, John Adams unprecedented carnage of the Civil War, of Massachusetts, Roger Sherman of in which some 620,000 soldiers on both Connecticut, Benjamin Franklin of sides died. The loss of life and its effect on Pennsylvania and Robert R. Livingston communities throughout the North and of New York, to draft a formal statement South led to spontaneous commemorations justifying the break with Great Britain. of the dead. Drafted by Thomas Jefferson from On May 30 of that year, President June 11 to June 28, 1776, the Declaration Ulysses S. Grant presided over the first of Independence is the nation’s Memorial Day ceremony at Arlington most cherished symbol of liberty. National Cemetery – which, until 1864, In unforgettable phrases, Jefferson was Confederate Gen. Robert E. Lee’s expressed the convictions in the minds plantation. and hearts of the American people. Memorial Day was declared a federal What Jefferson did was to summarize a holiday in 1971. philosophy in self-evident truths and set Waterloo, N.Y., is considered the forth a list of grievances against the king birthplace of this holiday because the to justify breaking the ties between the people of Waterloo were the first to colonies and Great Britain. proclaim a day on May 5, 1866, to honor On July 2nd, the Continental Congress the soldiers who died in the Civil War. They voted in favor of Lee’s resolution for closed their businesses and placed flowers independence in a near-unanimous vote and flags on the graves of their soldiers. (the New York delegation abstained, Taps, the 24-note bugle call, is played at but later voted affirmatively). On that all military funerals and memorial services. day, John Adams wrote to his wife It originated in 1862 when Union Gen. Dan Abigail that July 2 “will be celebrated, Butterfield “grew tired of the ‘lights out’ call by succeeding generations, as the great sounded at the end of each day. ” Not long anniversary Festival” and the celebration was orga The Carolinas Independent Automobile Dealers Association after, the melody was used at a burial for should include “Pomp and Parade... 1955 members in enhancing their reputation the marketpla theto firstassist time, when a battery commander Games, Sports, Guns, Bells, in Bonfires ordered it played in lieu of the customary and Illuminations from one end of and mee political influence and provide opportunities to interact with three rifle volleys over the grave. this Continent to the other.” On July dealers the purpose business marketing ideas. It is for customary on Memorial of Daysharing to fly 4, Congress and formally adopted the the flag at half staff until noon, and then Declaration of Independence, written raise it to the top of the staff until sunset. largely by Jefferson. As a Independence mature and weFourth are proud to maintain Day long-standing Association, Known as the of July and On July 4, 1776, we claimed our Independence Day, July 4 has been a more…fa als and principles set by the founders. But today, we offer independence from Britain and democracy federal holiday in the United States since Withwasaborn. fulltime professional staff, modern technology and world class Every day, thousands leave their 1941. native homelands to we comehave to the land of would like to thank all independent tional programs, become a Istrong, effective and influential or the free and the home of the brave so they auto dealers in North and South tion canthat exists for one independen experience the American dream.reason only: CarolinaTo whorepresent have family andthe friends When the initial battles in the who have given the ultimate sacrifice franchised automobile dealer! Revolutionary War broke out in April for the freedoms we enjoy as citizens of 1775, few colonists desired complete the United States of America. From the independence from Great Britain. By the American Revolution to today, we must middle of the following year, however, never forget to thank those who stand many more colonists had come to favor for freedom. independence, thanks to growing hostility against the king. Sincerely, On June 7, the Continental Congress John Brown met at the Pennsylvania State House Executive Director (later Independence Hall) in Philadelphia, Virginia delegate Richard Henry Lee introduced a motion calling for the colonies’ independence. Amid heated debate, Congress postponed the vote on Lee’s resolution, but appointed a five-
Meet Our Professional Staff
Carl Mischinski Ext 109
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BY JO H N BROWN
John Brown Executive Director Ext 105
Catherine Neely Ext 102
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Has your dealership implemented a process for engaging customers and shoppers with QR codes? If the answer
Point Scan Sell QR CODES 101: QR codes have optimized the way information is shared, making it easier to direct somebody to your information on-site, such as inventory, coupons, service, specials, blogs, events and more.
is no, don’t worry because you’re not alone. If you don’t know what a QR code is or have heard of it and don’t know how it can benefit your dealership, you’ll find some answers here. QR (Quick Response) codes are becoming increasingly popular for any business looking to provide information to current and potential customers quickly and effortlessly. The codes are a byproduct of the smartphone movement sweeping America. Nielsen reports 31 percent of U.S. mobile phone owners had a smartphone as of December 2010 and expects smartphones to become the majority by the end of this year. eMarketer predicts smartphone ownership will reach 43 percent of the U.S. mobile population by 2015. QR codes have optimized the way information is shared, making it easier to direct somebody to your information on-site, such as inventory, coupons, service, specials, blogs, events and more. Smartphone owners have access to a wide variety of apps and QR code readers are a standard app on most, if not all, smartphones. Because the technology is so new and progressive, not all QR code scanners can read all QR codes, but these instances are rare and will become fewer as the technology advances. The basis for QR codes is quite simple and nearly the same as the standard barcode seen on merchandise tags or VIN stickers on vehicles. Barcodes were developed to carry information in a very small space that is scan-able; they’re limited in that they are horizontally shaped. QR codes work the same way, but more information can be carried since they are based on horizontal and vertical dimensions, so there is no limitation to what or how much information can be included. Common types of QR-coded information include URLs, text, phone numbers and SMS. Remember, each QR code is unique, so there is no end to the possibilities here. Here is an example of how using QR codes can help you gather potential customer’s information. Say you have customers looking at vehicles after normal business hours (or on Sundays), but choose to call later to learn more about a certain one. This is the typical thought process of many people. By having a QR code on your vehicle, you can get someone engaged into requesting more information at that moment while lessening the risk of the customer losing interest by morning.
At the same time, your potential customers are excited because they get to use their smartphone technology by simply scanning the QR code. From there, they can get to your mobile website, maybe grab a mobile coupon or check out whatever dealership info you want to share. We recommend you have some type of quick form for people to complete for a coupon. Guess what? Now you have contact information; in other words, my friends, you’ve got leads! As with email 15 years ago and texting 5 years ago, people are excited about how technology is giving them more ways to communicate today. During the sales process, a lot of customers will prefer this because of the non-invasive way of communicating with the dealership. You will see companies offering a free online book by scanning a QR code in an airport or a major advertisement in a publication with a code printed in the corner. These are all enticements that target engagement from potential customers at the peak of their initial excitement or curiosity. Because it is effortless to scan a QR code, pairing them with a marketing strategy will help you capitalize on customers engaging when their emotional excitement is high. The more time that passes, the more distant the customer becomes. You can see how powerful QR codes can be with convenience and timing. Be careful not to be overwhelming in requesting the customer’s information. Use QR codes in a variety of different ways to not only generate leads, but to deliver your message. For instance, in your next mailer, create a QR code that sends them to a web form that gives the customer a free car wash. All they have to do is complete and submit the form, then present the generated coupon to a sales manager. For a softer approach, implement a process to get more Facebook fans by creating a QR code that takes a person to your Facebook Fan page, keeping them totally in their comfort zone. Be sure to scan the codes in this column to better understand how QR codes can work for your dealership. BY DUSTIN JANSSON
Dustin Jansson provides consulting for e-commerce and social media strategies for dealers, as well as providing a full suite of inventory management, marketing, and photography solutions. Staying ahead of the technology curve in the autos business is his passion. Contact him at 303232-3435 or dj@dealernetsolutions.com.
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F&I Perspectives Since the credit crisis began a couple of years ago, it’s no secret used vehicle inventory has been tight. The Cash for Clunkers program only compounded the problem. Now, the tragic and devastating disaster in Japan has disrupted the automotive supply chain, causing a ripple effect not only from the suspension of new car production, but also from a lack of component output.
With further strain in the market, our industry has to rethink the new timeframe to reach equilibrium. This following indications of a peak in the index: wholesale used vehicle prices (on a mix-, mileage- and seasonally adjusted basis) declined 1 percent in February after rising in each of the previous five months, according to the Manheim Used Vehicle Value Index. The trend has been prices at the auction have strengthened because of the decrease in new deliveries. Many franchise dealers have built up used inventories in anticipation of a new vehicle shortage that will trickle down to a used vehicle shortage. As a result of these factors, used prices are likely to remain high, making strategic inventory selection even more important for dealers. Given market factors, dealers are wise to deepen their understanding of lender programs to help determine the right inventory to have on the lot. Here are suggestions for navigating challenges and keeping deals profitable. Relationship, relationship, relationship The dealer-lender relationship cannot be undervalued, especially when the market is tight. If you haven’t already developed a strong relationship with your lenders, now is the time. View it as a partnership. Build an honest and professional relationship with underwriting. Talk to your credit analyst. Leverage the knowledge of your account manager or sales rep to gain more insight into the program. Ask for training when needed, so staff can be well educated on making the process as smooth as possible. A good
dialogue with your lenders goes a long way to avoiding funding problems that can cost time and money, leaving you with unsold units. Start at the source Dealers going to the auction to source inventory will face higher prices, but can prepare by carefully reviewing available lending programs prior to making purchases. A strong understanding of program guidelines is critical to avoiding the costly mistake of buying the wrong inventory. Some examples of this preparation include: Know which pricing guides are used. NADA, Kelley Blue Book or Black Book? Pay attention to trends in value, too. For example, NADA recently announced its used auto values for April would reflect large increases in most vehicle segments compared to March, based on the impact of the crisis in Japan. At the time of the announcement, auction prices for two-to-five-year-old compact cars in March had increased by about 11 percent compared to February. There is little question price increases are to be expected in the short-term.
Don’t shy away from asking for what you need to understand and master the program. Strengthening your lender relationships may even help you stay on profit targets and solve some of the main challenges you face in today’s market. Understand the guidelines used to structure deals. Which adds are allowed and which are not? Some lenders will allow leather, sunroof or wheels. Others will not. Knowing which adds are permitted can mean
BY U RI SZAPI RO
the difference between making $1,000 or $2,000 on a deal. Don’t lose out on value. The last thing dealers want in a strained market is a short deal. Auction receipts. Lenders may be more open to a slightly bigger advance or other adjustments when you have proof of higher auction prices. Ask if an original auction receipt could be worth a few hundred dollars more in advance. Mileage and term flexibility. Some lenders may be more flexible or generous with mile allowances and/or terms due to the tightness of the market. The assumption is vehicles are on the road longer now because of reduced inventory. However, these adjustments may not be advertised or published with the program guidelines. Here is where that strong working relationship comes into play. Ask about such adjustments. For example, whereas before the lender wanted a limit of 60,000 miles for a 60-month loan, now 65,000 might be acceptable. Or lenders might be willing to add six months to the term on premium imports as a way of helping the dealer. Staying in touch with your lender can give you the confidence of knowing you have some leeway going to auction. Having a close relationship with lenders is strategic advantage, especially during a tough period in the market. Dealers are wise to communicate with lenders more often, be receptive and pay attention to the program details and guidelines. Don’t shy away from asking for what you need to understand and master the program. Strengthening your lender relationships may even help you stay on profit targets and solve some of the main challenges you face in today’s market. What’s more, the effort you put in now will pay off beyond the bump in the road today, and into the future. BY URI SZAPIRO Uri Szapiro is vice president of originations at AFS Acceptance, LLC, an established, full-service auto finance company serving franchise and independent car dealers’ subprime financing needs since 1996. For more information, visit www.afsacceptance.com or call 877-223-3254.
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NEW NIADA MOBILE SERVICE
FOR SMART PHONES PUTS KE Y APPR AISAL DATA , MEMBER NE WS AT YOUR FINGERTIPS BY SCOTT LI L JA , VI CE PRESI D ENT, N IADA M EM BER SERVI CES
This spring, NIADA members will have access to a new mobile application tool from NIADA that will enhance their productivity and profitability and stay up to date on the latest developments impacting their dealership. This new tool, NIADA Mobile Service, is accessible by Apple iPhones, Android-type phones and other select models. It puts at members’ fingertips a wealth of critical data to help them make better vehicle appraisal, purchase and retail sales decisions. Now, members can access their subscriptions to appraisal services from NADA Guidebook, Kelley Blue Book, Black Book, and Galves Auto Price List. They also will access run lists from participating auctions. Furthermore, NIADA Mobile Service links them by smart phone to select content on NIADA.com. Here’s how NIADA Mobile Service will streamline your operations: On the lot or on line: More quickly appraise a vehicle, for customers at your lot or those selling online through sites such as Craigslist. Access your guide book vehicle appraisal service or a market report – or your subscription vehicle history report service – on the specific unit. Have at your fingertips the right current facts to pencil your best deal. Buying from auction: You can access the auction’s pre-sale run list while at the auction or sitting in your office. You may view the inventory then, once you land on a unit you like, press on the appropriate smart phone icons to pop up auction-supplied information about the unit, its appraisal data, and a vehicle history report. Continual and timely updates ensure you have the freshest available data. During a moment of downtime: Activity suddenly slows its hectic pace for a few minutes, so you use the time to access the NIADA website. There you check some key association information or watch a NIADA.TV video you’d put off. The service also alerts you to urgent messages that might require immediate action. Designed for NIADA
NIADA Mobile Service was developed by leading automotive mobile applications developer and NIADA technology partner and advisor GigglePop.com Inc. The company is importing NIADA web content and coupling it with existing GigglePop software mobile applications. GigglePop’s technology is known
for speed, accuracy and, of course, mobility. Its fat-finger icon or button designs are a special value when searching for key information when working in distracting environments like auctions. These large icon designs help users easily find and stroke with their fingers the right icons or buttons they want, reducing keystroking errors. As NIADA’s technical partner, GigglePop will continue to support Mobile Service and be an industry liaison for NIADA Mobile. Accessible subscription guidebook data and features through Mobile Service include:
Customizable software settings All guidebook regions or states include s VIN look-up decoder s Stores booked vehicles, recall in an instant s Enter personal notes on booked vehicles s Lists and sorts appraised vehicles s Re-values saved vehicles with each new update s Automatically updates wirelessly s Barcode scanning capability s Seamless integration with all GigglePop valuation tools, including vehicle history report subscription services and auction run lists s SmartBid Market Report s Large easy-to-read fonts s s
NIADA Mobile Service also makes your day at the auction simple, easy and productive. Accessible auction run list data from participating auctions includes: s
s s
s s s
s s
Search by lane or run number to view auction vehicle data Barcode scanning capability Continual auction run list updates even while auction is in progress View those late arrivals Save target vehicle data for future reference Enter personal notes and bid pricing on specific vehicle records Lists and sorts saved target vehicles Seamless integration with all GigglePop valuation tools, including Guide Books, Vehicle History and participating Market Reports
In addition to providing mobile access to these key services, NIADA Mobile Service also connects members to select NIADA content on the NIADA site. Wherever you are, you can stay on top of moving legislative decisions, regulatory compliance issues, new NIADA member services and educational programs.
Especially in today’s market, still recovering from the recession, this mobile service will help members operate more profitably. It puts at hand the insight needed to buy and sell more profitably and keep abreast of industry news and events influencing the used vehicle retail market. The more competitive dealers today are clearly adapting to our changing industry by using mobile technologies and solutions to help them better manage their used vehicle operations, inventories, vehicle sourcing and retail sales processes.
DELIVERS TANGIBLE MEMBER BENEFITS Members’ use of the NIADA Mobile Service tool will help them:
I dentify quality, retail-ready inventory: Mobile accessibility to auction inventory as well as vehicle valuation guides can help dealers meet challenges presented by the economic fallout from the last three years’ depressed vehicle sales, drop in leasing activity and reduced stream of fleet rentals into the remarketing stream. s Source the right-priced vehicle for the customer: Reduced levels of wholesale units flowing into remarketing channels have made it more difficult to source and match the right vehicle to customers’ ability to pay. NIADA Mobile Service helps dealers locate those vehicles at an acquisition price the customer can afford and finance, while providing enhanced profit for the dealer. s
Often spread thin by needing to be in the office, on the lot and at the auction seemingly simultaneously, the independent used auto dealer must use time and resources wisely. By adding this new Mobile Service tool to the NIADA portfolio of member services, the association helps its members access critical association information and related vehicle valuation, history reports and auction run list services right from their smart phone. As market needs continue to change and dealers seek new ways to remain competitive, like purchasing inventory outside their local market areas and using web-based competitive vehicle analysis and pricing tools, GigglePop and NIADA will continue to enhance Mobile Service to help dealers make the most informed and profitable business decisions.
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N A D A R T R E T I R E M E N T P L A N S O F F E R Y O U F I D U C I A R Y A S S I S TA N C E I N Y O U R R O L E O F S P O N S O R I N G A P L A N
Choosing the Right Retirement Plan for Your Small Business Did you know that NIADA and NADART have partnered to offer its members the exclusive opportunity to sponsor a plan that affords small businesses the same features and advantages as those of larger businesses?
A retirement plan is a valuable tool for recruiting and retaining quality employees, as well as an excellent investment for a small business. Both employers and participating employees reap a number of benefits for starting and contributing to a retirement plan. Employers can benefit from starting a retirement plan because their employer contributions are tax deductible. As an added benefit, small businesses may qualify for a tax credit associated with starting the plan. According to the Department of Labor, this credit equals 50 percent of the cost to set up and administer a plan, up to a maximum of $500 per year for each of the first three years of the plan. Employees benefit from participating in a retirement plan in several ways. High contribution limits ($16,500 for pre-tax contributions for 2011) let them save large amounts for retirement and catch-up contributions allow those age 50 or older to save an additional $5,500 beyond the regular contribution limits. If the plan has adopted the Roth 401(k) Contribution feature, participants may invest their after-tax dollars for retirement, and are not constrained by the wage limitations of a Roth IRA. Certain low- and moderateincome employees can also earn a tax credit, known as “Saver’s Credit”, for participating in their employer-sponsored retirement plan. NADART retirement plans offer you fiduciary assistance in your role of sponsoring a plan. In order to help you administer the plans, we will assume the role of Plan Administrator and recordkeeper. NADART has provided automobile dealers with affordable, high-quality retirement plans since 1957. This experience, combined with easystreamlined administration, allows us to provide NIADA members with exclusive services at an affordable cost. Our Sub20 Plan, designed for companies with 20 or fewer employees, was specifically designed and focuses on the needs of small businesses, including:
Trustee and Custodial services A variety of different investment options 24/7 online plan account access Online Investment Guidance Comprehensive educational materials Roth 401(k) Contributions AD DITIO NAL I N FO RMATIO N about NADART’s products and
services, including the Sub20 Plan, can be found at www.nadart.org/retirement. You may also contact NADART at 800-462-3278 or at nadart401k@nada.org.
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Summertime and the Sellin’ is Easy It gets hot during the summer in south Georgia. Real hot. How hot, exactly?
“So hot our sales people don’t even want to get out there,” said Larry Mannion of M&M Motors in Hinesville, Ga., about 35 miles southwest of Savannah. “I’m talking really hot, you know, like that 100-degree index. I usually take the attitude that if someone is on the lot looking for a car when it gets like that, he must need a car pretty bad, because it’s so hot. I mean, who wants to be out there?” Nevertheless, people are out there buying cars in the heat of summer, even in places like Hinesville and Tyler, Texas, were the temperature regularly climbs above 100 in July and August. So a dealer who wants to snag some of that business needs to play it cool – with his customers and his inventory – even when it’s broiling outside. That means little touches like plenty of chilled water or soft drinks available for potential car buyers, or running the air conditioning for a few minutes to cool off the car before inviting customers in for a test drive. It means checking the coolant level and the AC of every car on the lot before a customer wants to look at it. It means being prepared for the inevitable heat of summer. “One thing you have to remember is our business is all emotional,” said Joe Lescota, chairman of the Automotive Marketing department at Northwood University in Midland, Mich., and the instructor for the NIADA’s Certified Master Dealer program. “It’s a very psychological business. You have to kind of cast the logic out the door a little bit and think about the consumer and the consumer’s experience. Think about how you can make the customer experience much more enjoyable.” In the summer, that’s all about cool, from the look of the offices – fresh paint in light colors – to placing misters outside, an inexpensive touch that can lower temperatures 20 degrees or more on a hot day. “Hook them up to a garden hose and they can blow a cool mist over where customers will be,” Lescota said. “Think about creating a psychologically cool environment. Have water for the customer, but not just in a water cooler. I like a big bucket filled with ice, where you can actually see bottles of water chilling. That’s psychologically refreshing. Let the customer stay inside as much as possible and provide a huge washtub full of ice and water or soft drinks.” It doesn’t hurt to keep the cars cool, too. Lescota suggests investing in a large tent or canopy to put over some of the inventory, protecting it from the sun and, in climates where sudden hailstorms can pop up, hail damage. “Think about putting as much of the inventory as possible under one huge tent,” he said. “I really encourage dealers to get a professional
tent or awning company. If I’m looking at lots and one guy’s inventory is out in the sun baking all day, and another’s is in the shade, I can see the difference.” And dealers shouldn’t be afraid to get the word out about their cool touches through their advertising. After all, none of those ideas will bring in customers who don’t know about them. “Dealers not only need to do these things – they need to tell the public about it – advertise it,” Lescota said. “‘Our vehicles are in the shade,’ or, ‘Come on in for some ice-cold water.’ Let people know it’s ice cold. Remember the old days when movie theaters used to advertise ‘icecold air conditioning?’ There is a psychological response to that.” That is also true of the dealership’s grounds. Summer is prime time for weeds, those persistent pests that seem to constantly be growing in cracks in the pavement. “You have to look at your property, and that’s an everyday thing, too, because weeds can pop up overnight,” Lescota said. “We have a tendency to look past those things.” The one thing that can’t be looked past is the temperature, which can climb to 130 degrees inside a closed car in hotter climates. If a customer wants a test drive, making him get into that blast furnace isn’t likely to sell him on a vehicle. “We’ll go out and crank the vehicle and bring it up front for them and sit inside and talk to them for awhile and let the vehicle cool off,” said Brian Pool, co-owner — along with his father, Scott — of Autohouse Auto Finance in Tyler, Texas. “Let the AC run.” Lescota is all for that. He also said rolling the car’s windows down on hot, sunny days can keep the interior from getting too bad in the first place. Sales consultant Jan Kelly of Kelly Enterprises said having windows tinted can help, too. “If it gets too hot in there, when I get in that car, I’m not thinking, ‘Wow, this is a nice car.’ I’m thinking, ‘I hope I don’t get a third-degree burn,’” he said. “And of course, don’t just throw a customer in the darn car. Let the salesperson crank the car and cool it down, so when the customer gets in the car, it’s an ‘Ahhh’ feeling as opposed to an ‘Ow, this hurts’ feeling.” Jim Coury, owner of Integrity Auto Sales, has been selling cars in steamy Port Orange, Fla., since 1987, so he knows a thing or two about dealing with heat. One of his major changes for summer is his of hours of operation, a move aimed at increasing traffic of customers trying to avoid the hottest part of the day. In the winter, Coury’s lot closes at 6 p.m., sometimes earlier. In summer, it will be open until 8 or beyond. “We find people don’t want to be out in the middle of the day in the heat and get into a car
that feels like it’s about 180 degrees,” he said. “We post 8 o’clock hours but a lot of times we are here even later.” Coury also changes his advertising during the summer, buying more radio ads to target people out driving or at the beach. “Radio advertising does well in the summer – you get a lot more bang for your buck that time of year,” he said. As for the cars themselves, Lescota said it’s worth the extra time and effort to keep the inventory looking clean and sharp. That can be especially difficult in summer, when the hot sun tends to fade paint and upholstery, and dust and debris tend to blow in from the surrounding area. While keeping the vehicles out of the sun is preferable, it isn’t always feasible, so a dealer has to be prepared to clean the inventory often. “People buy visually, so you need to be sensitive to making sure every single car, every single day, looks fresh,” Lescota said. “It’s easy to get a car looking good for the lot. The hard part is keeping it looking good while it’s on the lot. That’s why it’s very important for the dealer to make sure he’s got a good coat of wax on the car. And have the porter wipe the cars down first thing in the morning, not anywhere near the afternoon because that water will cause water spots and some water spots can be very, very, very difficult to get out. A lot of that preparation needs to be done very early in the morning.” Lescota also suggested washing the windows with a solution of one part ammonia to four parts water to “make them absolutely sparkle.” “People might say that kind of stuff isn’t a big deal,” he said. “Of course it is. Look at how any person shops. If I’m at a store and I find something on the shelf that has dust on it, I put it back and I look for a box or can that doesn’t have dust on it. Dust says it’s old. Dust says it’s stale. It might not be, but that’s what it says. That’s a very powerful tool that can motivate a potential buyer.” Not all of the issues facing cars sitting in the heat of summer are cosmetic. Some can be legal – the heat can make stickers face or even fall off, including required FTC stickers and Monroney stickers. And the heat can even keep a car from starting. “Believe it or not, we have to make sure we keep the cars started once a week because batteries take just as much of a beating in the summertime as they do in the winter,” Coury said. “The heat is just as bad for a battery as the cold. It’s funny, it will be the dead of summer and you’ll be going, ‘What the heck? All these batteries are going bad on me.’ The heat is really tough on those batteries. So we make sure we have a lot of batteries in stock, ready to go.” Ross Turner, assistant commercial category manager for AutoZone, an NIADA National
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MISSING BLANK COLORADO CERTIFICATES OF TITLE BY AN DY FRI ED LAN D ER
Member Benefit provider, suggests keeping a careful eye on the cars’ rubber items – such as belts, hoses, tires and wiper blades — because rubber can be greatly affected by heat. And an extra thorough wash might be a good idea when the weather warms up, especially in places that had rough winters. “Remember that it wasn’t just snow and mud that accumulated on the cars,” he said. “If they were driven, there were also salts, sands and other melting chemicals that have built up on the auto’s finish. Cleaning the interiors and exteriors more thoroughly might set one dealer out ahead of another when it comes to customer impressions.” Summer can even affect the type of cars a dealer wants on the lot. Kelly said the hot items – pun intended – for the upcoming summer will be fuelefficient vehicles. “The price of gas is going to continue to rise, which means fuel-efficient is in again,” she said. “The fuel-efficient ones are going at a premium. In fact, there might be a shortage of fuel-efficient cars. I hear dealers are having a hard time getting inventory.” At least one dealer already is finding that to be the case. “We’re trying to buy stuff that gets decent gas mileage as we look forward toward summertime,” Pool said. “We’re having trouble finding any inventory. We’re keeping our eyes on gas prices and trying to stock a lot of stuff that gets good fuel economy – cars and small SUVs – and trying to stay away from diesel trucks with the price getting close to $4 a gallon. “We want to get some stuff in here that we can sell. We used to buy SUVs and Suburbans and Tahoes because people were getting ready to go on vacation in the summer and they’d buy those bigger vehicles to carry their families in. But not these days.” Summer actually brings more than heat when it comes to weather. In some areas, it means sudden hailstorms or tornadoes that can pop up at a moment’s notice. In Florida and along the Gulf coast, it means the beginning of hurricane season. Coury found that out the hard way in 2004, when Florida was pounded by four hurricanes – Charley, Francis, Ivan and Jeanne – which left his dealership a wreck. That summer reinforced the need to have a storm plan, whether that’s a tent or cover to keep cars out of the hail in Texas or places to hide Florida cars from hurricane-force winds and storm surges. “One thing I have to do constantly is storm preparedness,” he said. “We rehearse where cars are going and what to do. I’m very close to the water here, probably 100 yards from the Intracoastal Waterway. So I have to worry about any storm surge, flooding, high winds. “During one of the hurricanes we had, I put a bunch of cars together in a big square, not realizing the shingles were going to blow off my roof and skin up every car there was. So I try to take the largest assets and protect them the best, and do what I can do with the rest of it.”
A box of blank Colorado title certificates failed to be delivered to the El Paso County Motor Vehicle Office on Friday, March 11. The control numbers are
H8192001 through H8194000.
SECURITY FEATURES INCLUDE:
• Printed on 8 ½ x 11 security paper. • Control number is on the lower right hand corner printed in red. • The background is composed of three vertical stripes. The outside stripes are light blue in color; the center stripe is light salmon pink with the state seal printed in the center. Please note the missing title certificates with the control numbers listed above are now void and may not be used as proof of ownership. If presented for any vehicle ownership purpose, they will be considered fraudulent and if any of them are turned in to your office, forward the information to Crystal Soderman, title services manager, at csoderman@dor. state.co.us or the Colorado State Title Section at 303-205-5608.
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Don’t Miss Convention’s State of the Industry Session
Among the many opportunities offered to attendees of NIADA’s 65th Annual Convention & Expo in Las Vegas is the General Session at 9 a.m. on Tuesday, June 21. Entitled “State of the Industry and
Setting the Course,” the kick-off session will feature discussion and audience interactions that focus on federal legislation, regulations and compliance, future issues, plans of action and how these will affect your dealership operations. There will be many topics covered during the session, so we’ll simply recap a few of the most important ones here: NIADA’s meeting with the White House, the Consumer Recall Protection Act of 2011, the FTC and CFPB.
followed this legislation when it was first known as S.3302, the Senate Motor Vehicle Safety Act of 2010. Its stated purpose is “to prohibit the sale of any product to a consumer that is subject to a recall, and for other purposes.” The bill directs the Transportation Department secretary, through NHTSA, to issue a regulation to require persons who terminate a motor vehicle contract due to flood or water damage, collision, fire damage, theft and recovery, or any circumstance that adversely affects the fair market value of the vehicle to disclose information of such vehicle damage to the public. The association has already scored a partial victory during the Senate draft. Working primarily with Sen. John Thune, R-S.D., his staff (Brenden Plack), and committee staff (Alex Hoehn-Saric and Chris Herndon), and as a result of concern raised by Whann and his proposed suggestion, section 310 was dropped. This provision would have seriously hurt used vehicle commerce by imposing tremendous compliance costs and liability exposure for dealers while increasing the safety risk for consumers by pushing unremedied vehicles into the unregulated, private-sale used market. NIADA will continue to monitor SB 330 as it continues its way through the lawmaking process.
Assisting the FTC The White House
Last year, NIADA General Counsel Keith Whann and Federal Advocates, the association’s governmental advocacy partner, sought to meet with the Obama administration during the creation of the Consumer Financial Protection Bureau. The association sent a letter to President Obama requesting “the opportunity to work with the administration to reform our industry in common-sense ways that achieve real safeguards for consumers, that promote accountability and transparency, and that really work.” The White House replied to our request and the meeting took place just a few months ago. Whann and Federal Advocates’ Sante Esposito were afforded the opportunity to meet with Obama’s special assistant for justice and regulatory policy. As Whann reported in this column in April, the trio had a great conversation about legal, regulatory and policy issues related to the auto industry. A framework for an ongoing dialogue was established and the parties agreed to explore possible areas where there may be regulatory or policy gaps in the industry that should be examined. FEDERAL ADVOCATES is NIADA’s governmental
advocacy partner. To read past lobbying reports, visit www.niada.com/legislative_and_legal.php
The Consumer Recall Protection Act of 2011
Also known as SB 330, NIADA closely
Perhaps no other agency has had more of NIADA’s attention than the FTC, which held an April roundtable to “explore consumer protection issues pertaining to motor vehicle sales and leasing” and to determine “what consumer protection issues, if any, exist that could be addressed through a possible rulemaking or other initiative.” Whann was a part of that landmark event, which consisted of six panel roundtable discussions on topics from understanding the motor vehicle sale to dealer bankruptcies, plus a lot in between. The discussions were moderated by FTC staffers and Whann was fortunate enough to be asked to participate on two panels. As he mentioned in the May issue of UCD, it was a productive day despite the time constraints. According to Whann, given the fact there appears to exist a somewhat unbalanced and hostile view amongst some in the regulatory community towards dealer-assisted financing, one of the most important tasks as an industry will be to assist the FTC and the consuming public in better understanding the mechanics of dealer-assisted financing. We must also collectively establish a factsbased record upon which the question of whether to engage in unfair and deceptive practice rulemaking may be considered. To learn the latest about these and other vital topics, be sure to attend the NIADA Convention and Expo at Caesar’s Palace in Las Vegas later this month.
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INDUSTRY
MobileApps Manheim Manheim has invested heavily in mobile technology during the past several years with a mobile website and, more recently, an iPhone app. The mobile site replicates much of the functionality of Manheim.com, while the iPhone app allows dealers to instantly scan VIN barcodes to pull up MMR results.
Cars.com During the past four years, Cars.com has been the trailblazer in the mobile sphere of online automotive shopping. The site was the first to launch an optimized mobile product for vehicle shoppers in June 2007, giving them on-the-go access to the most popular tools on the wired site, including listings and research. Since then, Cars.com has made several upgrades and added new functionality, making the mobile site faster and easier to use.
Black Book With Black Book’s mobile apps for iPhone and Android, you can take the industry’s most timely, independent, and accurate market values with you on your phone or other mobile device. Add the power of daily updates, and you have a near real-time valuation resource. Because Black Book’s mobile apps are built specifically for iPhone and Android, they run faster and are more responsive.
While at an auction, dealers are able to scan the VIN barcode located on the work order sticker. If the dealer isn’t at auction, he can scan the VIN barcode from the manufacturer label on the vehicle. Dealers also have the ability to input the VIN or year, make and model to obtain MMR. And they can save their MMR searches on the mobile app.
Upcoming functionality will include the ability to review CarFax and Autocheck reports, bid-and-buy-now functionality as well as an app for Android phones.
iPhone App Cars.com released a free iPhone app for car shoppers in February 2010. The app allows mobile shoppers to search dealer and private party listings efficiently and easily to locate the vehicle they want while away from their computer or on the lot. This smartphone app continues to be extremely important to the Cars.com business, as nearly one-third of all mobile visits to Cars.com are made from the iPhone. The Cars.com app gives car shoppers access to the most popular functions on the Cars.com website, including the ability to search millions of new, used and certified vehicles.
Android App Cars.com further expanded their mobile product line with the release of a free Android app in March 2011. The app, similar to the site’s iPhone product, exposes dealer inventory and helps customers find the best vehicle for them while on the go. The app gives Android users access to the most popular features of the Cars.com site.
VIN SCANNING: Simply scan the vehicle’s VIN barcode with your phone’s built-in camera and it will be automatically booked out for you. You also have the ability to further customize the evaluation by adding location, mileage, and optional equipment. VEHICLE HISTORY REPORTS: Sure the vehicle may look good, but how will you know if it has a checkered past? CARFAX vehicle history reports are integrated and are available at the touch of a button, and Experian’s AutoCheck will be available in June.
EXTENSIVE MARKET COVERAGE: Black Book’s mobile apps cover the last fifteen model years, and include more than 18,000 separate used vehicle values. Black Book provides wholesale, trade-in, and retail values for vehicles in a wide range of conditions (extra clean, clean, average and rough). Vehicles can be looked up by inputting the VIN, either manually or by scanning the VIN barcode or with our easy-to-use drilldown menus.
*According to Greystripe 2011
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Odometer Replacement on Exempt Vehicles NAAA has been presented with the following scenario: A customer bought a vehicle that was exempt, but the odometer had been replaced with one that had significantly fewer miles (280,000 to 108,000). The seller did not Despite the age of this interpretation it remains relevant as the statute has not changed.
announce that, so the seller was told he had to buy it back. The seller balked saying that being exempt it didn’t matter. Although disagreeing with his argument, we checked with a few other auctions and were surprised that many auctions agreed with the seller. A review of the National Highway Traffic Safety Administration (NHTSA) website found information explaining that an odometer rollback was illegal on an exempt
vehicle but did not address odometer replacement. A call was made to the NHTSA for clarification. The NHTSA confirmed that all laws concerning odometers, except title documentation, apply to exempt vehicles. NAAA Arbitration Policy (http://www. naaa.com/pdfs/NAAAArbitrationPolicy_ Jan2011.pdf) states on page 7, item 10, that the seller must announce these discrepancies. Additionally, the NHTSA also states that auctions are required to record the mileage on exempt vehicles somewhere in the records even if it does not get recorded on the bill of sale. The federal statute concerning odometer service, repair, and replacement is 49 USC 32704 and the statute concerning auction records is 49 USC 32705(e). Additional guidance concerning auction companies may be found in the Code of Federal Regulations under 49 CFR 580.9. The following is an excerpt from a previously issued interpretation letter concerning odometer replacement procedures. It is from NHTSA General Counsel Frank Berndt written to Key Scales
Ford, Inc. on September 25, 1980. Despite the age of this interpretation it remains relevant as the statute has not changed. “This is in response to your letter of September 4, 1980, in which you requested information on the proper procedures to be followed with respect to the odometer setting when a new odometer/speedometer head is installed. When an odometer is repaired or replaced the mileage on the repaired or new odometer must be identical to that on the odometer before the repair or replacement. In those instances where the odometer is incapable of registering the same mileage, the odometer must be adjusted to read zero and a notice in writing must be attached to the left door frame of the vehicle specifying the mileage prior to the repair or replacement of the date of such service. There is no specified format for the notice, but it must include the above information.” For additional concerns, the point of contact in NHTSA’s Office of Chief Counsel is David Case at david.case@ dot.gov or 202.366.2239. In order to receive a written interpretation you will need to describe your particular concerns and questions in writing. NHTSA’s response will be posted on their website to serve as guidance for others.
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Ford F-150, Mercedes-Benz M-Class Recalls
By ADR Staff
FORD F-150, LINCOLN MARK LT Ford is expanding a recall of F-150 and Lincoln Mark LT light trucks. In January 2010, the National Highway
The recall on the expanded population is expected to begin on or about May 9. Owners may contact the Ford customer relationship center at 866436-7332. Ford’s recall campaign number is 11S18.
Transportation Safety Administration (NHTSA) opened an investigation into inadvertent airbag deployments. As a result of that investigation, Ford recalled about 144,000 2005 and 2006 model year F-150s in March. The most recent announcement expands the recall to include certain model year 2004 through 2006 F-150s as well as certain model year 2006 Lincoln Mark LTs. A total of 1,325,000 units are affected. According to the NHTSA documents, if the airbag clockspring jumper wire comes in contact with the driver side frontal airbag lower horn plate, the wire insulation may become chafed, creating a potential for a short circuit. If this occurs, the airbag warning lamp may illuminate indicating service is required. As a result, the driver side frontal airbag could inadvertently deploy increasing the risk of injury or loss of vehicle control if occurring while in motion. Ford will notify owners and instruct them to take their vehicles to a Ford or Lincoln dealer to have a new clockspring jumper wire installed that incorporates a protective mesh cover. Repairs will be performed free of charge. The recall on the expanded population is expected to begin on or about May 9. Owners may contact the Ford customer relationship center at 866436-7332. Ford’s recall campaign number is 11S18.
MERCEDES-BENZ M CLASS
Mercedes-Benz is recalling certain model year 2000 through 2002 M-Class and model year 2000 through 2004 M-Class AMG vehicles. The recall affects 136,751 units. The cruise control system in the affected vehicles allows the driver to disengage the system in a number of ways, including tapping the brake pedal, using the cruise control stalk, or braking the vehicle enough to reach a certain rate of deceleration. Mercedes-Benz has determined that, under certain circumstances, use of the brake pedal may not automatically disengage cruise control as expected by the driver, although the other means of deactivating cruise control remain fully operative. Specifically, where the driver pumps the brakes rather than applying consistent pedal force, the level of force required may be unusually high. The difficulty or delay in disengaging the cruise control can increase the risk of a crash. Dealers will repair the vehicles free of charge. The safety recall is expected to begin during September. Owners may contact Mercedes-Benz at 800-367-6372. Editor’s note: Owners may contact the NHTSA vehicle safety hotline at 888-327-4236 (TTY 1-800-424-9153). For more information about these and other recalls, visit http://www.safercar.gov.
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STOP CURBSTONING RELEASES CONSUMER GUIDE: D E T E C T I N G C O L L I S I O N R E PA I R We know that used car buyers today must navigate a minefield of unscrupulous sellers and haphazardly repaired vehicles. Among the worst offenders are “curbstoners”
– unlicensed individuals who buy and sell used cars to make a quick buck from unwary victims. That is why we put together a handy guide to help used car buyers detect collision repair. “ A Used Car Field Guide for Detecting Collision Repair ,” is an online booklet full of useful tips for spotting subpar repair work, ensuring there are no disparities between what a seller says and what the car shows. We’ll share some quick, simple things you can do to uncover any telltale signs of collision damage when buying a used car, including: • How to identify whether body panels have been replaced • How and where to detect paint abnormalities • How to detect frame damage, and more!
A Used Car Field Guide for Detecting Collision Repair www.stopcurbstoning.com It used to be fairly easy to spot the signs of a collision repair: overspray, bad color matching, and misaligned body panels. Now, with computers assisting with everything from frame straightening to color matching, it’s a lot harder to tell if a vehicle has been in a collision, especially if the repair was done well.
vehicle history report form a service like AutoCheck, are absolutely vital steps to take before paying money for any used car from a private party.
That’s great if you want your car fixed after an accident. But it makes things hard if you’re looking for a good used car.
However, here are some quick, simple things you can watch for when you’re out looking at cars. One element on your side is simple greed: curbstoners want to maximize their profits. After all, they only need to fool a buyer long enough to collect the cash. So, curbstoned cars rarely get top-notch repair treatment.
NOTE: We’re not saying to avoid any car that’s had bodywork. A vehicle that’s been properly and professionally repaired after a minor fender-bender could be a terrific bargain. We are saying to watch for disparities between what a seller says and what his or her vehicle shows. Of course, no one can catch all the bad cars. That’s why an inspection by a trusted, experienced mechanic, along with a
At A Glance A walk around the vehicle in good light will often disclose whether or not a body panel has been replaced or repainted. Look at the car from several angles to make sure the color matches across all the body panels. Look also at the reflections in the paint – factory paintwork is mirror-smooth, even when dirty or dinged up. Signs of repair often reveal themselves in a slightly rippled reflection, or a reflection that doesn’t exactly line up across two body panels. Be sure to look at reflections from several angles. If the car is so dirty that you can’t see reflections, you might need to ask for the car to be washed. While you’re sighting down the sides of the car, check to make sure the body panels all fit flush, and that the gaps between the panels are even from top-to-bottom and side-to-side.
Good places to look for paint overspray or excess paint include: Around electrical conduits in door jambs Near door, hood, and trunk hinges On window and door seals Around seals and fittings in the engine compartment firewall Along the trim pieces inside wheel wells
Sun damage typically affects large body surfaces like hoods and roofs. When you see small patches of peeling clear-coat, especially in corners and other hard-to-reach areas, they may indicate a poorly prepped paint job. At the same time, beware of too-perfect paint. Even a garaged, well-cared-for used vehicle will have small paint chips and even minor dings. If the chin fascia beneath the front bumper is pristine, it may have been recently replaced or repainted.
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FuelEconomy It shouldn’t be surprising one of the first considerations shoppers coming into your showroom will mention is fuel economy. The latest Kelley Blue Book Market Intelligence Survey concerning consumer sentiment and gas prices revealed the current economic situation, coupled with concern over the rise in fuel prices, has further caused an increasing number of new- and used-vehicle shoppers to change their vehicle consideration criteria. In April, KBB discovered the vast majority of shoppers — 84 percent, in fact — said gas prices have influenced vehicle considerations, revealing a steady increase in the role fuel prices have played in purchase decisions since January. In addition, analysts found 90 percent of the latest Kbb.com survey respondents expect gas prices to climb even more during the next 30 days. KBB pointed out that those planning to purchase their next vehicle to get better fuel economy has been on the rise since the beginning of 2011, increasing 12 percentage points from January to April. When asked about the effect of the economy on future vehicle purchases, analysts reported 58 percent of consumers said the economy has caused them to make a downgrade. The most popular downgrade was engine size (41 percent), followed by decreased vehicle size (40 percent), less or eliminated vehicle options (35 percent)
and switching from new to used (32 percent). Kelley Blue Book Market Intelligence officials explained they employed the Van Westendorp pricing model as a research strategy to understand consumers’ price sensitivity, discovering that rising gas prices continue to outpace consumer acclimation to a higher price point for fuel. Analysts calculated the current optimum price point for gasoline has risen since the beginning of this year, from $3 per gallon (with an acceptable range of pricing from $2.75 to $3.25) in January and February, to the current optimum price point of $3.23 (with an acceptable range of pricing from $3.07 to $3.41) in April. Therefore, if prices remained around $3.23 per gallon, KBB contends shoppers likely would not make major changes in vehicle consideration criteria. However, at the $4 per gallon price point, the firm believes 70 percent of consumers will feel that gas is so expensive it will affect their vehicle consideration. And at $5 per gallon, KBB stressed that almost all shoppers (92 percent) say their vehicle consideration will be affected. Furthermore, Kelley Blue Book found its latest Kbb.com survey revealed that despite steadily climbing gas prices, many shoppers feel their personal economic situations are somewhat improving. Survey orchestrators determined the number
of respondents indicating that their current economic situation is “poor” decreased by 5 percentage points from 27 percent in February to 22 percent in April. Also, KBB noted concerns about becoming unemployed decreased 9 percentage points from 34 percent in March to 25 percent in April. “As we head into summer driving season, gas prices are going to continue to be a hot topic both in the auto industry and among the cardriving American public,” explained Jack Nerad, executive editorial director and executive market analyst for Kelley Blue Book. “Auto manufacturers increasingly are offering more fuel-efficient vehicles, not only due to the federally mandated Corporate Average Fuel Economy (CAFE) regulations, but also because of rising consumer demand, as indicated by the latest kbb.com survey findings,” Nerad continued. “It’s important for shoppers to know that there are more fuel-efficient options today than ever before, from sub-compact cars to deckedout luxury rides and even highly efficient trucks and SUVs, many of them offering astounding fuel economy numbers, especially in light of the features and safety they offer,” he went on to say. The latest Kelley Blue Book Market Intelligence survey about consumer sentiment and gas prices was fielded to 480 in-market new- and used-vehicle shoppers on Kbb.com from April 12 to 18.
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N IADA/NAC CERTI FI ED PRO G R A M
GROWS WITH NEW PA R T N E R S H I P S, E N H A N C E M E N T S
NAC is the administrator of the NIADA Certified program. The warranties are backed by an A-rated insurance carrier with more than $26 billion in assets, a figure that gives dealers with the peace of mind provided only by a fully insured program.
BY CHRISTINA SCHRANK
To give independent dealers the ability to compete with franchise dealers offering manufacturer certified pre-owned vehicles, NIADA and NAC (formerly National Auto Care) last year created NIADA Certified. The program
includes comprehensive 12-month, 12,000-mile warranty coverage with no deductible, 24-hour roadside assistance, towing, rental and more. In November 2010, the program underwent significant changes to incorporate more value for dealers and even higher satisfaction for customers. NIADA Certified added additional team members experienced in the used vehicle market to ensure processes were put in place that would support dealer certified success. Today, the program is supported by an active training calendar with contribution from strategic partners and best practice review. “Certified used autos has become its own listing category. Between new and used, the NIADA Certified program levels the playing field and allows independent dealers the opportunity to compete for those consumers looking for certified inventory,” said Greg Levi, NIADA Certified strategic relationship director. “The program allows independent automobile dealers the opportunity to create their own competitive program.” Subject to a comprehensive inspection, NIADA Certified vehicles include a 12-month, 12,000-mile limited warranty with a zero dollar deductible. Dealers will now be supported through ongoing training and best practices review by the
NIADA Certified team. Better yet, even with the increased warranty coverage, the same eligibility guidelines for NIADA Certified qualify, including most 10-yearold or newer vehicle models with less than 100,000 miles. “The independent market needed an answer to the manufacturers’ certification program and the NIADA certification program lives up to the promise,” Levi said. The positive consumer experience is assured by repairs that can be made at any licensed repair facility and with a program that’s supported by 25 years of administration experience. After a vehicle has passed an inspection that meets the program’s certification standards, it’s then registered with NIADA Certified through our unique online Express Lane™. Following registration, the dealer has access to a free copy of an AutoCheck® vehicle history report, the ability to print a compliant buyer’s guide, print a clean and professional inspection checklist which can be used in either the showroom or online, plus the capability to export certified inventory to third party portals including Auttr Motors, eBay® Motors, and EVERYCARLISTED. com®. These exports provide the ability to advertise the vehicle as NIADA Certified and offer it with a limited warranty that begins when the vehicle is retailed to the consumer. These many new partnerships with third party portals, especially its newly announced affiliation with eBay® Motors, allow the dealer’s NIADA Certified inventory to be discovered with a search for certified inventory alongside manufacturer results. NIADA Certified
is the first independent certification program to be recognized with the manufacturer programs. And, because our system is Web-based, all of this – and much more – is accessible to dealers in just a few simple clicks. The program coverage enhancements have allowed us the opportunity to grow and add to our strategic partnerships, provide above-and-beyond support and service and give dealers a way to offer consistent value to consumers and solidify relationships with lenders. NIADA Certified most recently partnered with eBay® Motors as one of our program’s inventory exports. Each program dealership will have its NIADA Certified inventory exported to eBay® Motors classifieds, providing a free listing to be displayed to all within a 200-mile radius of each dealer. Also, NIADA Certified recently announced a partnership with OPENLANE, an online auction company which now offers program listings to dealers on Open Auction. This new listing acknowledgement gives the NIADA Certified brand additional creditability and provides an option to those dealers who want to wholesale inspected vehicles which meet the program’s certification standards. “These many new third party online portal partnerships are vital to the success of our NIADA Certified program,” said Michael Linn, CEO of NIADA. “The recognition and powerful marketing arm these online portals provide is invaluable to all of the dealers who participate in the program. It’s like free advertising, and research proves over and over again CO NTI N U E D O N PAG E 26
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that online listings that promote certified vehicles sell faster and for a larger profit.” The NIADA Certified team also has focused efforts on building partnerships with lenders in order to create incentives and discounts on funding for NIADA Certified vehicles. Recently, NIADA Certified announced Columbus Finance, Inc., a lender serving the central Ohio market, agreed to give dealers an additional 10-percent advance (up to $1,000) and will offer customers one percentage point off program rates when purchasing a NIADA Certified vehicle. The team also is working with additional lenders to put together similar partnerships and lender opportunities to dealers across the country. “As our NIADA Certified program continues to grow, so will the lender partnerships associated with it, at the local, statewide and national levels,” said Linn. “Over the past four years, NIADA has been highly successful at bringing lenders and dealers together, and the NIADA Certified program is another great opportunity to expand on great relationships like the one locally that was just announced in Ohio.”
save the date
JUNE 19-23, 2011
The NIADA Certified team is excited about the momentum that’s been building during the first quarter of 2011. Today, there are 120 dealers participating in the program in 30 states around the country and the number is growing weekly. Those dealers are enjoying the benefits of the NIADA Certified team’s support before, during and after initiation into the program. Now, after signing on to participate in the free program, dealers attend an online implementation webinar hosted by our NIADA Certified team. The webinar is interactive and allows our team to review the program, tools, best practices and, most importantly, how to get the program started within a dealership. The training is available for both the dealer and their personnel every week. Once implementation training has been completed, marketing materials are sent to the dealership and our training team follows up to ensure the dealer has all the information and tools needed to succeed. Our team then consistently communicates with each dealer on items such as program enhancements and additional training
s s s s s s
opportunities and continues to review best practices. NAC is the administrator of the NIADA Certified program. The warranties are backed by an A-rated insurance carrier with more than $26 billion in assets, a figure that gives dealers with the peace of mind provided only by a fully insured program. There is zero dealer liability for repairs that fall under the warranty period. All dealers on the program receive a contractual liability insurance policy issued directly from the insurance company. For more information on NIADA Certified, call 800-840-2567 or visit www. niadacertified.com. Don’t forget to visit often, as the site is constantly updated with new and exciting information, announcements and program enhancements. NIADA Certified also can be followed on Facebook, Auttr and Twitter. CHRISTINA SCHRANK
is the vice president of marketing for NAC and a 15-year veteran of the auto industry. NAC has been developing innovative, value-based aftermarket products and competitive service agreement programs for automotive, power sports, and recreational vehicles for almost 30 years.
Registration rates start at only $395. Register online at www.niada.com Caesars Palace is the host hotel and offers $144 per night room rates. Education for all aspects of your business. Solutions and Services for your dealership in the exhibit hall. Evening events to network with peers in the industry. And Much much more
need additional information? Go to www.niada.com or call (800) 682-3837
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F EDER AL ADVOCAT ES LOBBY ING REPOR T
NIADA’S WHANN PARTICIPATES IN FIRST FTC ROUNDTABLE I have just returned from the FTC roundtable entitled “The Road Ahead: Selling and Financing Motor Vehicles” held at the Wayne State University School of Law in Detroit, Mich. Choosing a law school as the venue for the
event was perfect! So many of the discussions centered around complicated fact patterns, the application of overlapping federal and state laws and variations and inconsistencies from state to state, you felt as though you were sitting in a law school classroom. The program consisted of six panel roundtable discussions on the following: Understanding the Motor Vehicle Sale and Credit Transaction, From Both Prime and Subprime Perspectives; Interest Rates, Dealer Reserves and Markups; Payment and Locator Devices and Consumer Privacy; Spot Delivery; Contract Add-Ons and Vehicle Title Problems and Dealer Bankruptcies. The panels consisted of five members each (one had four) and had a mix of regulatory, industry and consumer representatives. They were moderated by six different FTC staff members, all of whom I have met on my trips to Capitol Hill (and have had the opportunity to discuss the issues being considered in the roundtables) and they did an excellent job facilitating discussion. While all other industry members were limited to participating on a single panel, I was asked to participate on two (I volunteered for all six). I took it as a compliment, but you decide for yourself. The goal for the day was to “explore consumer protection issues pertaining to motor vehicle sales and leasing” and to determine “what consumer protection issues, if any, exist that could be addressed through a possible rulemaking or other initiative.” All in all, I would say the day was quite productive. However, with the individual roundtables lasting only 30 to 90 minutes, it was difficult at times to get into depth on many of the subjects. Consider the challenge in even being able to explain something as basic as what is a motor vehicle dealer and how do they operate? Franchised or independent? Big or small? Metro or rural? Three-party paper financing or two-party paper financing, with a little Buy Here-Pay Here thrown in for good measure? And we are only beginning to scratch the surface! As background, the Dodd–Frank Wall Street Reform and Consumer Protection Act is a federal statute in the U.S. that was signed into law by President Barack Obama on July 21, 2010. The act is categorized into sixteen titles and from the and, from the estimates I have seen, requires regulators create 243 rules, conduct 67 studies, and issue 22 periodic reports. The stated aim of the legislation is: “To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘too big to fail,’ to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.” So what exactly does the act do? This description from Wikipedia is one of the best I have seen: “The Act changes the existing regulatory structure, such
as creating a host of new agencies (while merging and removing others) in an effort to streamline the regulatory process, increasing oversight of specific institutions regarded as a systemic risk, amending the Federal Reserve Act, promoting transparency and additional changes. The Act establishes rigorous standards and supervision to protect the economy and American consumers, investors and businesses, ends taxpayer funded bailouts of financial institutions, provides for an advanced warning system on the stability of the economy, creates rules on executive compensation and corporate governance, and eliminates the loopholes that led to the economic recession. The new agencies are either granted explicit power over a particular aspect of financial regulation, or that power is transferred from an existing agency. All of the new agencies, and some existing ones that are not currently required to do so, are also compelled to report to Congress on an annual (or biannual) basis, to present the results of current plans and to explain future goals. Important new agencies created include Financial Stability Oversight Council, the Office of Financial Research, and the Bureau of Consumer Financial Protection.” It should be noted while section 1029(d) of DoddFrank confers on the FTC authority to prescribe rules under the Administrative Procedures Act with respect to unfair or deceptive acts or practices by motor vehicle dealers it does not, however, expand or otherwise address the authority the FTC already possesses under the Federal Trade Commission Act to initiate enforcement action against unlawful behavior. Given the fact there appears to exist a somewhat unbalanced and hostile view amongst some in the regulatory community towards dealerassisted financing, one of the most important tasks as an industry will be to assist the FTC and the consuming public in better understanding the mechanics of dealer-assisted financing. We must also collectively establish a facts-based record upon which the question of whether to engage in a UDAP rulemaking may be considered. Over the past 27 years (the last 16 as outside general counsel to NIADA) I have had the opportunity to work with federal regulatory agencies, including the FTC, to promote independent dealers’ compliance with federal statutes and regulations and to educate consumers about the car buying and financing processes. Never in this time period has there been an issue as important to independent dealers and the future of our industry as this. It will change the landscape of how cars are sold and financed for years to come. We will continue to be actively involved in the process as things progress and I look forward to having the opportunity to discuss the issues in greater detail at the NIADA Convention & Expo in June. Until then, you can stay current with the latest developments by following me at www.facebook. com/keithwhann and twitter.com/keithwhann. See you in Las Vegas! FEDERAL ADVOCATES is NIADA’s governmental advocacy partner. To read past lobbying reports, visit www.niada.com/ legislative_and_legal.php
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CIADA 56th ANNUAL CONVENTION AND EXPO
Marriott Grande Dunes Resort, Myrtle Beach, SC August 4-7, 2011
ATTENDEE REGISTRATION FORM (Exhibitors - please use exhibitor registration form)
COMPANY INFORMATION
DEALER NO.
Company
Mailing Address
Telephone
City/State/Zip
Fax
Lot Address
City/State/Zip
Website
REGISTRATION INFORMATION
Education, Expo & Banquets (entry to all events)
$210 each
Quantity
Item Total $
______
_________
Badge Name(s):_____________________________________, _____________________________________
Expo & Banquets (entry to all events except educational sessions) $185 each
Child $85 each (7-14 yr)
______ ______
_________ _________
Badge Name(s):_____________________________________, _____________________________________ Badge Name(s): Child ______________________________, Child _______________________________
Expo Only (entry to expo only - Friday, August 5th)
$95 each Child $50 each (7-14 yr)
______ ______
_________ _________
Badge Name(s):_____________________________________, _____________________________________ Badge Name(s): Child _______________________________, Child ______________________________
Banquet Only (entry to Saturday night banquet only)
$95 each
______
_________
Badge Name(s):_____________________________________, _____________________________________
$25,000 Grand Drawing Ticket - $10,000 Grand Prize
$100 each
(10 Winners - You do not have to be present to win)
______ Total $ Amount
_________ _________
Kid’s Only Party
Name(s):____________________________Age______, _________________________Age______ (Age 2-12, Saturday, August 6th, 6-10pm)
PAYMENT INFORMATION: FULL PAYMENT MUST ACCOMPANY REGISTRATION FORMS TOTAL $ AMOUNT
Check Enclosed (Please make payable to CIADA)
Credit Card #
VISA
Mastercard
Expires ____________________ V-Code __________________
Credit Card Billing Street Address _______________ ________________________ City,State,Zip_______________________ ___________________ Name on card_________________________________________________ Email (for receipt)_____________________________________________ Signature_____________________________________________________ IN THE EVENT OF CANCELLATION, NOTICE MUST BE POSTMARKED BY JULY 1ST FOR A REFUND MINUS A $25.00 CANCELLATION FEE PER PERSON. NO REFUND WILL BE GIVEN FOR CANCELLATIONS POSTMARKED AFTER JULY 1, 2011.
MAIL OR FAX THIS FORM TO:
HOTEL INFORMATION:
RATES:
CIADA P.O. Box 1088 Harrisburg, NC 28075 Fax: 800-992-4232
Reservations: Marriott Grande Dunes Resort Myrtle Beach, SC 29575 (800) 644-2881
Group: CIADA Room rate: $185 per night Rate cut-off July 4, 2011
APP CODE
LAST 4
AMOUNT
DATE
FOR ADMIN USE ONLY
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CARFA X L AUNCHES ADVANTAGE PROGRAM FOR DEALERS NEW PROGRAM DESIGNED TO INFLUENCE SHOPPER’S DEALER CHOICE, ENHANCE CONFIDENCE
Carfax is giving dealers a powerful new way to attract customers using the Carfax brand. The Carfax Advantage™ Dealer Program distinguishes Carfax-subscribing dealers that are committed to transparency. Through the program, partici-
pating dealers can set themselves apart from their competition. Used car shoppers know they can buy with greater confidence when shopping at any Carfax Advantage dealership. “Being a Carfax Advantage dealer with unlimited access to Carfax Reports, Carfax has quickly become one of our most valued partners,” said Adam Warmka, general sales manager at Dick Brantmeier Ford Lincoln Kia in Wisconsin. “We use them when we’re buying cars to make sure everything checks out and our salespeople are constantly asking for printed copies so they can show our customers. Every car we list online has a Carfax Report. Carfax is in our advertising, out in front of our dealership and on every car in our inventory. We use them every day.” According to recent research, more than 80% of used car shoppers surveyed said they would prefer to shop at a Carfax Advantage dealership. Carfax Advantage dealers have another way of building confidence with used car buyers and help customers make faster buying decisions. “Our participation in the Carfax Advantage program has helped us build credibility with customers,” said Dan Moltz, general manager at Car Center of Waldorf, Md. “We show the Carfax up front on every car. Customers appreciate it and the result is additional sales and higher customer satisfaction. Also, by pulling Carfax Reports prior to buying inventory, we shorten our turn, which we all know increases retained earnings. The more you turn, the more you earn.” As part of the program, participating dealers have unlimited access to Carfax Vehicle History Reports and Carfax Auction Quick Check, plus a Consumer Information Pack for every car being retailed. Carfax also provides enhanced point-of-sale materials for free, including new items that highlight Carfax Advantage dealerships. “Transparency greatly influences consumers when making their dealer choice,” said Bill Eager, vice president of Carfax. “Thousands of consumers we tested said that the Carfax Advantage program means trust and confidence. They know immediately that a Carfax Advantage dealer will show them the Carfax. As a result, participating dealers enhance their reputation and sell more cars faster.”
PRE-GAME WARM-UP:
REVIEW FINANCING PRACTICES AHEAD OF CFPB AND FTC RULES It’s the beginning of the baseball season. Experts are poring over team rosters, game schedules and statistics to predict the season’s outcome. The fun and fear is the
element of the unknown. The same is true of the new Consumer Financial Protection Bureau. As it takes shape, we are checking its roster of leaders and their speeches and public announcements to predict first-year activities. The fear, not so much the fun, is the element of the unknown. One unknown is how the bureau and the Federal Trade Commission will define an unfair, deceptive, or abusive act or practice in motor vehicle financing. The Dodd-Frank Act authorizes them to make and enforce rules to prevent such acts and practices in consumer financial products and services. Many states already have similar statutes, but each state has its own unique definitions and case law. Some states have developed a large body of case law defining the standard, but the Dodd-Frank Act will add a unique layer of federal law, regulations and court decisions. State attorneys general also can sue to enforce federal law, so we may see case law develop based on unique state decisions to enforce. In addition, state laws that provide greater consumer protection will continue to be enforceable. The FTC recently announced it’s conducting public roundtables in three to five cities around the U.S. to discuss consumer protection issues in connection with motor vehicle sales and leasing. It published a list of discussion topics indicating the acts and practices under the most intense scrutiny. The list includes yo-yo financing, finance company incentives to dealers resulting in more expensive credit, interest rate mark-ups and upfront charges of which the consumer is unaware, negative equity financing, selling and financing add-on products and services and use of GPS location devices. Details may be found at ftc.gov. Information from the roundtable meetings will likely shape the FTC’s view on whether the practices discussed are in any way unfair, deceptive, or abusive acts or practices. The meetings will likely be a game changer. Whether or not you participate in the meetings, you should review your dealership’s practices in these areas. The legal standard for review will develop over time. For now, I suggest the common person standard: Would you be comfortable having your practices displayed on the Jumbotron at the ball game? BY CH I P ZYVOLOSKI 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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