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CIADA Insider C O L O R A D O I N D E P E N D E N T D E A L E R S A S S O C I AT I O N

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Inside:

• Structuring Profitable Car Deals • Overcome Used Car Stereotypes • Disclosure Rules • Washington Update

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DALLAS, TEXAS Permit No. 2079

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F RON T R A NG E CL A S SES

Colorado Independent Automobile Dealers Association

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THREE STEPS TO STRUCTURE PROFITABLE CAR DEALS

Lakewood, Colorado Education & Training Center 950 Wadsworth Blvd., Suite 101 Lakewood, CO 80214

PRE-LICENSING CERTIFICATION

Make the Right Deal | PAGE 07

Colorado state statute requires anyone applying for a used motor vehicle dealer’s license or a used powersports dealer’s license be certified through a pre-licensing course. This seminar is also offered to salespeople to be able to pass the New Mastery Examination Test. Class is held at least once a week. Check our website for dates.

OVERCOME USED CAR STEREOTYPES

Move Forward with Basic Solutions | PAGE 08

BASIC TITLE TRAINING CLASS

NEWEST RULES OF ONLINE MARKETING

Helping You Accomplish Sales Goals | PAGE 10

DISCLOSURE RULES

Disclose, Disclose, Disclose | PAGE 18

Join us to get updated information to learn the CORRECT way to fill out your paperwork at time of sale and other topics including title compliance, do’s and don’ts for titles and more. This class is held once a month for half a day. Call CIADA for information on these classes, or to get your forms and/or Dealer/Salespersons Bonds. Call 303-239-8000. All classes are subject to change without notice. Please check our website www.ciada.org for any changes.

WASHINGTON UPDATE

www.ciada.org • phone 303.239.8000

NIADA Government Report | PAGE 20

COOKING WITH EDDIE

“Cooking with Nonna” Recipes | PAGE 24

REGULATORY COMPLIANCE STARTS WITH DATA ACCURACY Don’t Omit This Critical Detail | PAGE 26

What’s New

BHPH DEALER MAGAZINE

NIADA now has a magazine devoted to Buy Here-Pay Here! The BHPH DEALER Magazine is published bi-monthly on the even months of the year and is included as a supplement to NIADA’s Used Car Dealer magazine. Visit www.niada.com/bhph_dealer_magazine.php to check out the inaugural issue.

Advertiser’s Index

ADESA .................................................................................................... 9 Alliance Inspection....................................................................20 AutoZone .......................................................................................... 16 Black Book .......................................................................................... 5 Carmax Auctions.........................................................................21 Dealers AA of the Rockies ..................................................IFC Dealership Valuation Services ........................................19 Lobel Financial ................................................................................ 3 Loveland Auto Auction ............................................................. 6 Manheim ..................................................................................10, 11 Manheim Denver .................................................. Back Cover Manheim Littleton CO ............................................................24 Manheim Pennsylvania ........................................................ 13 NextGear Capital ........................................................................... 7 PassTime............................................................................................18 Protective .........................................................................................15 STARS GPS .......................................................................................12 TrueCar ............................................................................................... 17 VAuto....................................................................................................IBC Veros Credit ....................................................................................14

ENROLL IN THE CIADA LEGAL PROTECTION FUND NOW!

Is your dealership

PROTECTED?

CALL 303-239-8000 WITH QUESTIONS.

More than 65 of your fellow dealers have joined!

Board of Directors Officers

Office

For information on how to become a member of CIADA, please contact Todd O’Connell 950 Wadsworth Blvd., Suite 101 • Lakewood, CO 80214 303.239.8000 toddo@ciada.org

NIADA Headquarters

National Independent Automobile Dealers Association www.niada.com www.niada.tv 2521 Brown Blvd. Arlington, TX 76006-5203 phone (817) 640-3838 For advertising information contact: Troy Graff (800) 682-3837 or troy@niada.com.

CIADA Insider is published 6 times per year 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 6006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of CIADA Insider 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 © 2016 by NIADA Services, Inc. STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITORS Jacinda Timmerman • jacinda@niada.com Andy Friedlander • andy@niada.com MAGAZINE LAYOUT & GRAPHIC ARTIST Chantae Arrington • chantae@niada.com ART DIRECTOR Christy Haynes • christy@niada.com PRINTING Nieman Printing

Directors

PRESIDENT Stan Martin Stan’s Auto Sales LLC 303-650-1011

Jim Bode J. Bode Used Cars, Inc. 303-366-1535

VICE-PRESIDENT Dan Berkenkotter Berkenkotter Motors 303-650-8754

Tim Gaylord Gaylord Leasing Company Inc. 303-667-6188

SECRETARY Dean Gunter Mile High Car Company 719-570-7800

Mark Weida Street Smart Auto Brokers 719-434-8443

TREASURER John Lindberg Auto Warehouse 970-490-2886

Teshome Tesfaye Norfolk Motors 303-523-5814

CHAIRMAN Dave Cardella Mountain States Auto Group 303-887-8977

Mike Whistance Country Truck and Auto 303-857-1281 Lucas Jozefkowicz Denver Autos, Inc. 303-573-1333

Past President / Directors Jim Bahne Bahne, Inc 720-934-9806

Mike Bonicelli Nevada Auto Sales 719-635-2533

Peppe DeMarco Highline Motors 970-206-9963

Roger Kirlin Roger Kirlin Auto Sales 303-526-7805 Joe McCloskey McCloskey Motors 719-594-9400

Wally Smith Smith Motors 303-659-0004

Dean Strawn AutoTrek 303-934-5600

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Can We Change Things?

ABSOLUTELY! BY DAVID CARDELLA, CIADA CHAIRMAN OF THE BOARD

Can we change things? Without a doubt, yes! As I write this article, two bills have passed out of the House transportation committee – curbstoning and total loss branding on titles – and the auctions are no longer running cars under the red/yellow light. The issue with the auctions was easier because they really do try to help us, as our success is crucial to their success. When we showed them the conflict with our laws and the increased potential problems for dealers, they understood and made the necessary changes. The government, on the other hand, is a little more difficult as their decisions affect many industries not just ours. Fortunately, we

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have Aponte and Busam at the Capitol getting our voices heard and our concerns addressed. When we testified and explained how unfair it is to compete against an unlicensed person selling on Craigslist or across the street from us in a parking lot, they understood. When we showed them cars with clean Carfaxes and AutoChecks even though insurance companies had declared them total losses and the negative consequences this created for our customers and our businesses, they understood. They understood because Aponte and Busam educated them on our issues. I hope you helped get these bills passed by calling your senators and representatives when we asked you, because as a large association our voices count. We know what we can accomplish in business as every day we start at zero but by the time we finally go home, have created a paycheck for our employees and ourselves. It’s no different when it comes to our industry. If we want to help ensure our

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industry continues to thrive and provide us a living we all need to become involved, not just your volunteer board members. Help us with these issues and if you see a potential problem inform us so we can address it before it gets out of hand. Help us recruit new members so we have the strongest possible voice. Contribute to our PAC fund, as funds are needed to address our issues. Most of all, make sure you are in compliance with all the rules and regulations because our industry is under attack and your success is our number one priority. This marks our 75th year as a state association, so be proud and help us move forward for the next 75 years! Don’t forget to join us for our third annual Charity Gala dinner December 10 at the Westin Hotel in Westminster. In the past two events you have helped raise over $338,000! Doors open at 5:30. Call to reserve your discounted rooms now!

VW Recalls SUVs BRAKE PEDAL MAY DISLODGE

Volkswagen Group of America, Inc. is recalling 46,700 model year 2011-16 Touareg vehicles. The brake pedal pivot pin may be missing a circlip, allowing the pivot pin to move and the brake pedal to dislodge. If the brake pedal dislodges, the driver may not be able to apply the brakes, increasing the risk of a crash. Volkswagen will notify owners, and dealers will inspect the brake pedal assembly to verify the presence of the circlip and install any missing circlips, free of charge. The manufacturer has not yet provided a notification schedule. Volkswagen’s number for this recall is 46G4.

B HP H P ERSP EC T I V ES

Three Steps to Structure Profitable Car Deals

MAKE THE RIGHT DEAL BY BRENT CARMICHAEL Whether you are concerned about collecting or about meeting sales goals, there are good reasons to make sure the deals you do make are wellstructured. Here are three tips to make that happen. Choose the right term and payment. A sound deal starts with the term. Your deal has to make sense. A low ACV unit on a long term just because we got a good down payment? That simply doesn’t work. Not because the car won’t run the note, but because the customer won’t run the note. Fewer than half the deals we put on the books in the BHPH industry go to term. Almost a third will charge off, and another 20 percent will pay off early either through our effective repeat programs or from our competition. Term should be dictated by two factors: What the customer can afford (based on their verified net income) and your appetite for exposure. If the customer can afford a $300 monthly payment and you are only comfortable with a 30 month term, then that customer’s total contract can only be $9,000. So, you can sell that customer any vehicle on your lot as long as they leave owing you no more than $9,000 in principal and interest. Obviously, because payment is an integral piece of establishing term, it’s also an important factor in a sound deal structure. What we are looking for here is the same as term. The payment date has to be logical. Payment should be due when the customer gets paid and on their next available paycheck, barring any deferred downs. Allowing a BHPH customer to go 30 days without a car payment without a deferred down is asking for trouble. We know our customers have had issues with budgeting money

in the past, why not help them budget better by starting their payment right away? And, to help them even more, have their payment scheduled for the day they get paid. It’s an easy reminder: get paid, make payment. Select the right rate and add-ons. Interest rate is the next aspect of deal structure. Now, before I get hate mail, I’m not suggesting you shouldn’t profit from your state’s usury limits. But, I am saying you may need to adjust this expectation depending on the term and payment deal structure. Yes, interest income is our reward for the risk. However, if the overall deal structure doesn’t make sense, your ability to collect your reward will greatly diminish. Back end or add-on products are similar to interest in the overall scheme of deal structure. While they are great profit generators, their addition to a deal can affect payment and term, not to mention cash flow. It’s a balancing act. You have to decide how you want to divide the money you collect from the customer. Will it go to principal and interest in order to reduce your risk and increase your reward? Or will it go to recoup cost in a product? Use common sense to help the client pick the right vehicle. You can’t forget the customer in the deal structure. Yes, the term, payment, rate and additions are all critical to the hard business aspects of the deal, but you need to keep an eye on what they are buying. Let me give you an example of a deal I came across during a consulting visit. A single mother with four children, two of whom required car seats, was allowed to purchase a Chevrolet Camaro. When I asked the dealer about it, he responded the customer could afford the payment based on his criteria and the term was within his criteria. Okay. Yes, both of those do make sense, but common sense should tell us the deal doesn’t make sense. Sure enough, the owner wanted to be traded out of the vehicle within the first year because it

We know our customers have had issues with budgeting money in the past, why not help them budget better by starting their payment right away? wasn’t big enough. Moral to the story? The overall deal structure has to make sense not only for you the dealer but for the customer as well. Bringing it all together: Make the right deal. So, let’s review three main steps you need to take to create the most profitable deal structure. 1. Term should be dictated by your exposure comfort level. 2. Payment needs to fit the customer’s financial ability. Interest and add-ons need not dictate the term and payment. Instead, term and payment should impact how you set up interest and add-ons. 3. Not only should the vehicle fit the customer’s financial needs, but also their physical and lifestyle needs. Brent Carmichael is an executive conference moderator for NCM. Prior to joining NCM, Brent worked 17-plus years in subprime finance and collections, the last 11 of which were in Buy Here-Pay Here. This article originally appeared on NCM’s Up to Speed blog (http://blog.ncminstitute.com) and is reprinted with permission. CIADA INSIDER

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M A N AG E MEN T G A MEP L A N

Overcome Used Car Stereotypes

categories: the silent ones who never come back, the angry ones who tell everyone and never come back, and the ones who will complain to you and let you correct the problem. Most fall into the first two categories, which means revenues and reputation take a hit more often than not. Spotting Shortcomings Old car shark practices are increasingly rerouting would-be buyers toward more progressive competitors. Telltale old car shark signs include: • Know-it-all, condescending attitude. This is the “father knows best” approach where a sales rep tells a prospect what they want and need and talk down to them at every turn, instead of asking what they want. Even when a prospect has done extensive research, old car sharks often tell them they don’t know what they’re talking about. • Adversarial approach. These guys view themselves as advocates of the dealership, not the customer. Accordingly, they will argue anything they feel isn’t in the dealer’s best interest. Their negotiation tactics are often win/lose and not win/win. • Limited product knowledge. Given many buyers already have researched in-depth the make/model(s) they’re considering, sales reps need to become product specialists, at

MOVE FORWARD WITH BASIC SOLUTIONS BY SCOTT BERGERON

I still remember the first time a person asked me what I did for a living. When I said I was a car salesman, you would have thought a siren had gone off. People gathered and started telling their worst experiences, as if I was responsible. I once heard that if a customer is happy with you, that person will tell three people, but if unhappy, 11 will hear about it. Apparently, I was one of those 11, as I had to hear all the horror stories from everyone nearby. Unfortunately, the horror stories so prevalent in the 80s continue today, and with social media and sites like Yelp, customers can tell thousands, not just a handful. Our reputation as an industry is still tarnished, and while many of us are working to change that, it’ll take more than just doing our part. As owners and managers, we have to stop tolerating the one bad apple that can spoil the bunch, at least the apples we manage and hire. Used Car Dealer Stereotypes Didn’t Happen in a Vacuum Pushy, know-it-all, condescending used car salespeople – the stuff of stereotypes – often tie back to routines learned 20-50 years ago. Their tactics still work at many dealerships, especially longstanding operations with longtime sales reps that sell to older buyers. Many dealerships have survived on repeat business from customers accustomed to hard-sell, in-your-face sales techniques. While a few gruff words may be exchanged, there’s familiarity and trust that supersede the unpleasantness. With today’s younger and more educated buyer, who will spend countless hours researching every possible choice through social media, all that is changing. Today, most car shoppers, not just the young ones, are researching, pricing and evaluating the quality and reputation of used cars and used car establishments. As a result, fewer prospective used car buyers will tolerate the old ways. They fall into three

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least to a point. Often, sharks will attempt to skate on this – preferring instead to spend time strong-arming, manipulating and playing ridiculous shell games with pricing. Aggravating the personnel problem can be dealership deficiencies. A dealership where cars are parked haphazardly, aren’t displayed in any kind of order, lack cleanliness, and generally look sloppy are all neon signs to would-be customers that the dealership doesn’t have much respect for itself, or likely its customers. Customers now expect a pleasant buying experience where they can feel acknowledged, in comfortable and clean surroundings. Solutions Start with Basics Rules of successful sales have changed. Used car dealer steps to counteract old-style people and presentations include: • Making the sales force advocate for customers, not the dealership. To do this, one key requirement is to follow the “two ears, one mouth” protocol – a clear directive to listen more than talk. When I first sold, my managers would listen to me close deals. I got roundly criticized for advocating my dealership first, the customer second. Customers need to feel you’re working in their best interest. One of the best examples of customer advocacy is Costco. They continue growing rapidly

in part because members know the retailer has their back, and will collaborate with them to solve problems instead of challenging them. • Being truthful and transparent. When my son was used car shopping recently, the salesperson went out of his way to disclose a repainted spot I wouldn’t have noticed. Going that extra mile to tell the truth generated considerable goodwill, helped lead to a sale, and has resulted in referrals. In the same vein, sometimes salespeople have to share truths buyers don’t want to hear, but it’s important to explain candidly what the real deal is. For example, a bluebook value of $10,000 on a car being sold for $12,000 may be due to regional preferences that make the car more popular and valuable. While the customer may not want to pay the premium, at least he or she should understand why. Then, there’s always the repair history. Let’s face it, if you don’t disclose it, chances are the customer already has a Carfax, and hiding an issue can lead to a customer walking away and telling you they will “be back.” • Knowing their cars. With most customers shopping online and setting appointments, wouldn’t it make sense to do some research about the make and model you’re about to present before they arrive? Googling “walk around Audi A4,” as an example, will give you instant credibility when you know how to pop the hood and the fuel cap. • Taking and showing pride in their operation. Talk to virtually any auto dealer consultant, and the first thing they’ll talk about is first impressions. Credibility soars when a prospect walks into a showroom/facility that has its act together, from its welcoming and clean facilities to a workforce that displays confidence and competence. New stereotypes painting the used car industry in a positive light are just around the corner for those willing to move forward in today’s car buying environment. Former dealer executive Scott Bergeron is the founder and principal of Daily Gameplan (www. dailygameplan.com), a national sales team productivity solutions provider. Bergeron is a major advocate of common-sense approaches to dealership front end challenges. Bergeron can be reached at 303.918.3169 or scott@ dailygameplan.com.

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SO CI A L MEDI A

Newest Rules of Online Marketing

HELPING YOU ACCOMPLISH SALES GOALS BY KATHI KRUSE

It’s hard to believe, but we are almost through the first half of the year. How far along are you in achieving your dealership’s goals for 2016? The digital marketing landscape continues to evolve. SEO, social media, content marketing and online reviews are no longer standalone strategies. All

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these intertwine and support each other, and it’s extremely important to clarify exactly how you’ll leverage these online marketing pillars to grow your business. Where does your store fit in the digital marketing landscape? I continue to be concerned about dealerships’ reluctance or slow adaptation to Google’s requirements and customers’ needs, especially when it comes to digital presence. There’s a lot of conversation (both online and off) postulating how some dealerships or business models won’t survive in the next 5-10 years. I’ve been helping dealers navigate social media, content marketing, SEO and online reviews for years and sometimes it

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seems like the needle has barely moved. Everything else is moving at such a fast pace and, judging by what I hear from a lot of dealers, sitting on the sidelines seems to be the common go-to strategy. A manager in one of my conference sessions said, “Car sales are at an alltime high. What do I need with online marketing?” Warren Buffett said, “In the business world, the rear view mirror is always cleaner than the windshield.” Just a few short years ago, every dealership was struggling to figure out what to do in the Great Recession. Using the above mindset – “Car sales are at all-time highs” – as an example, all-time highs mean the end of growth is near. Also, subprime delinquencies are at 20-year highs (and there’s a bubble happening similar to the mortgage meltdown). Add these indicators to all of the outside pressures on the dealership business model (Uber/Lyft, ride-sharing, self-driving cars, etc.) and you’ll see it would be prudent to forecast for the coming downturn – no matter what it looks like. From my years as a dealership manager, 60 percent of which was as a CFO, I can’t ignore trends. Online is how we all communicate today and becoming savvy in this arena will ensure your store has every chance to reach today’s buyers. THE 7 NEWEST RULES OF ONLINE MARKETING Getting and keeping customers is proving to be more and more difficult. Many dealership marketers seem to be ignoring a basic fact: people like to buy from businesses they know, like and trust. That isn’t just some cliché. Selling to people who actually want to hear from you is more effective than interrupting strangers who don’t. These newest rules of online marketing will help you understand what it takes to win customers and make informed decisions about how to drive more leads and sales to your store. Assume nothing. • Consumers. They’re getting a 5-star experience with online sellers like Amazon. How are you delivering the same experience, or better? • Competitors. What are your competitors doing better than you? Nothing short of fearless assessment and measured improvement will do. • Google. What exactly are you serving up to search engines? Search strategies today compared to even just a year ago are drastically different. Google is wickedly adept at recognizing quality content to serve its users. Do you know the ranking factors Google employs? Invest. Resolve to build stronger relationships with current and new customers. The

amount of time and effort spent is directly proportionate to the results achieved. We live in a world where no one wants to see ads from brands they don’t know. Why? Zero trust. Ad blocking is up 48 percent in the U.S. and growing. However, your ads are welcome in cases where you’ve invested in customer relationships and built a strong following. Profit isn’t a purpose, it’s a result. Empathize. A brand that can put themselves in their customers’ shoes, and deliver the information needed to make the right choice, secures a customer for life. Teach. With so much content on the web and very little trust, it’s overwhelming for consumers to research even the most common products. That’s why we’ve all turned to our social networks and online ratings sites for answers. The days are gone when you could walk into a store and get a trustworthy recommendation. A business today must leverage its assets to be a teacher not a seller. Social selling (using social media to build a network by providing value to give and receive referrals) is a fantastic solution to grow your business. Incorporate social selling within your sales process: • Differentiate yourself from the “sales sharks.” • Don’t be all about making the deal. • Pass on valuable information. • Use social media to teach, not sell. • Be a publisher (all good sales people are content marketers too!). • Develop your network through giving and getting referrals. • Leverage paid social to drive leads. • Don’t be afraid to ask for the sale. Curate. Everyone loves valuable information. People who consistently deliver solid, original, high quality content are considered thought leaders. Spend 30 minutes per day consuming content that’s helpful to your business growth and helpful to your customers. Schedule posts (via Hootsuite, Post Planner, Buffer or others) on social media sites to broaden your thought leadership. Advocate. Create a community online that mirrors your offline community. I’m always delighted to find a brand on social media that listens to their customers. Brand loyalty is born when someone at the store is there monitoring, responding and advocating for customers should they have an issue or want to give feedback. Listening > Advocacy > Loyalty. Care. A step further from advocacy is to

authentically care. Every time I fly JetBlue, they see my check-in at the airport and tweet me a nice message. They make me feel special and I feel like they care. When they announced they would abandon their “first bag free” policy, it wasn’t the best news, but their previous efforts to make me feel special softened the blow. Evidence that you care can only come from authentic action. Being able to document that well in the form of blog posts and social media content is a musthave strategy in 2016. Your goals for the second half of 2016: It all boils down to this: Attracting,

CREATE A COMMUNITY ONLINE THAT MIRRORS YOUR OFFLINE COMMUNITY. engaging and selling to today’s hyperconnected buyers requires focused attention and a solid plan to drive leads and sales. These seven new rules will guide you to accomplishing your sales goals and finishing the year strong. Kathi Kruse is an automotive social media marketing expert, blogger, consultant, author, speaker and founder of Kruse Control Inc. Kruse Control coaches, trains & delivers webinars focused on integrating social media and online reputation management into dealership operations.

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P RODUC T S & SER V ICES

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Manheim Denver Recognized for Furthering Industry Education OPERATION COLLISION PROGRAM EMPLOYER OF THE YEAR

Lincoln College of Technology named Manheim Denver’s Collision Program its Employer of the Year for 2015 for its initiative to give undergraduate and graduate students real world exposure to the automotive industry. The award was presented during the school’s Stars & Bars student award ceremony on Feb. 1. With a shortage of skilled auto technicians in the area, and Manheim Denver’s increased needs for skilled personnel to support its expansion plans, Manheim established a career development program with Lincoln College of Technology in May of 2015.

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“There remains a scarcity of skilled technicians in the area since the recession, when many migrated to support what was a booming oil business in North Dakota,” said Tim Van Dam, general manager, Manheim Denver. “We were excited to partner with the excellent program at Lincoln College of Technology to help prepare these students for the future opportunities in a changing industry with real life application.” As part of the program, students were invited for a behind-the-scenes tour of the Manheim operation, located in Aurora. The students gained hands-on experience of intake, the body shop, mechanics and detail facilities as well as observing an auction in action. In addition, several members of the Manheim team presented to students over the course of the year, reviewing the benefits of working in the industry. Manheim also hosted a hiring event to bring on students as part time drivers during sales and further expose them to the business behind the scenes.

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ADESA Adds Apple Watch Option

“We have hired close to 30 students as part time team members. Out of those students we have hired two as full time body shop team members and one student as a full time technician,” HR manager Marla Jones-Newman said. “We hope to build a pipeline of talented techs for our shops and vehicle entry, as well as more part time student employees who are motivated to be part of the Manheim team after graduation.”

APP INCLUDES NEW FEATURES BY USED CAR NEWS ADESA has launched its Marketplace app for the Apple Watch. The original Marketplace app available on iOS allows registered auto dealers to find, research, price and purchase vehicle inventory, both online and at ADESA auction locations across the country. The Apple Watch app includes many popular features of Marketplace, such as “Watch Lists” – which tracks vehicles of interest – and GPS. In addition, the Marketplace app has been enhanced with new features, including the following: • An improved VIN scanner that links directly to vehicle history. • Updated condition report details, with tire condition and an inspection summary. • A “My Purchases” view with in-lane, LiveBlock and DealerBlock transactions. • Coupon code acceptance. • DealerBlock outbid notifications for iOS.

REGISTRATION REGISTRATION

Entry Entry Deadline: Deadline: June June 20,20, 2016 2016

4-MAN 4-MAN SCRAMBLE SCRAMBLE GetGet your your foursome foursome together together Singles Singles willwill be assigned be assigned to atofoursome a foursome Call Call us with us with anyany questions: questions: (303) (303) 239-8000 239-8000 Registration Registration available available online online CIADA.ORG CIADA.ORG Dealership/Co. Name: ________________________________ Dealership/Co. Name: ________________________________ Contact Person: ______________________________________ Contact Person: ______________________________________ Email:_______________________________________________ Email:_______________________________________________ Phone Number: ______________________________________ Phone Number: ______________________________________ Golfer 1: _____________________________________$95.00 Golfer 1: _____________________________________$95.00 Golfer 2: _____________________________________$95.00 Golfer 2: _____________________________________$95.00 Golfer 3: _____________________________________$95.00 Golfer 3: _____________________________________$95.00 Golfer 4: _____________________________________$95.00 Golfer 4: _____________________________________$95.00 Total $ ________ Total $ ________ Check Check Enclosed Enclosed Mail Mail to: to: CIADA CIADA 950 950 Wadsworth Wadsworth Blvd. Blvd. Suite Suite 101 101 Lakewood, Lakewood, CO CO 80214 80214 Fax Fax and and Charge Charge by Credit by Credit CardCard Fax Fax to: (303) to: (303) 237-3305 237-3305 Cardholder Cardholder Name:_______________________________________________ Name:_______________________________________________

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Nissan Recalls Rogues for Fuel Pumps

Nissan North America Inc. is recalling 46,671 model year 2014 Nissan Rogue vehicles manufactured July 25, 2013, to Dec. 21, 2013, and Feb. 1, 2014, to June 7, 2014. Improper nickel-plating of components within the fuel pump may result in the fuel pump failing. If the fuel pump fails, the vehicle may stall without warning, increasing the risk of a crash. Nissan will notify owners, and dealers will replace the fuel pump, free of charge. The manufacturer has not yet provided a notification schedule.

Ford Recalls Transits for Seatbelts

Ford Motor Co. is recalling 48,990 model year 201516 Transit vehicles manufactured Feb. 13, 2014, to Jan. 13, 2016, and equipped with rear passenger seats. The rear seatbelt buckles may be damaged if a heavy object is placed on, or impacts, the top of the buckle. The damage may prevent the buckle from latching or from remaining latched. Ford will notify owners, and dealers will modify or replace the seatbelt buckles, depending on their location in the vehicle, free of charge. Remedy parts are currently unavailable. Owners were notified of the recall in March and will receive a second notice when remedy parts become available. Fordâ&#x20AC;&#x2122;s number for this recall is 16S06.

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CIADA Ambassadors WELCOME NEW AMBASSADORS: •L uis Ortega American Finance •S teve Perkins Centennial Leasing • M ichael Whetstone, ADESA Colorado Springs •S teven Clay American Finance

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HIGHLIGHTING BRAND NEW CIADA AMBASSADORS

These newest members are helping get the word out to members and non-members alike about legislative, legal and compliance issues facing the industry. In addition, they are well versed in explaining the benefits of being a member and joining CIADA, the largest statewide association representing the automotive industry. CIADA membership is a good business decision. This group has proven to be very beneficial to the association by growing general membership and adding dealerships to the Legal Protection Fund. Last month the association passed a milestone, surpassing 1,000 members for the first time since 2009. The ambassadors are also helping the industry stay viable by generously

contributing their talent, time and expertise. Working together, the ambassadors are a potent force strengthening the association for everyone’s benefit. A strong trade association is mandatory to be more proactive when addressing the many factors influencing today’s business climate, which become more evident every day. Strength and quick response time is also necessary when fighting matters that could negatively affect your dealership. With the ambassadors’ involvement, these issues are addressed more effectively. This action group is helping CIADA spread the word when required. Thanks to all of the ambassadors who are working on behalf of all in the used car business.

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RUL ES

Disclosure Rules DISCLOSE, DISCLOSE, DISCLOSE

To stay out of court and protect your business – disclose, disclose, disclose. The Auto Industry Division recently finished updating “rulemaking” for the “Material Particular’s” disclosure requirement per state Regulation 12-6-118 (3) (i). There will always be some gray areas because the consumer attorneys, association attorneys, auto industry division and attorney general’s office, while agreeing on some points, are in complete disagreement on others. Therefore, the rulemaking process did not clarify everything hoped for but it’s certainly an improvement over the old broader definition of “material damage” that had been in force for many years. The following is the updated language that now guides what is necessary to disclose: “Material particulars” means those details concerning a vehicle for sale

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that are essential or necessary for a reasonable prospective buyer to know prior to making the decision to buy or not to buy a vehicle. Disclosure Process Prior to the signing of the contract, the seller shall produce a written document disclosing all known material particulars. Both the seller and buyer must sign the document. The document is deemed to be part of the contract. A signed copy of the contract and the disclosure document shall be provided to the buyer at the time of sale. The seller shall retain a copy of the contract and the disclosure document. “As Is” Statement A statement by the seller to the buyer that a vehicle is sold “as is” does not relieve the seller of the disclosure obligations imposed by this regulation, nor does it relieve the seller of any other disclosure obligations otherwise required by state or federal law. An “as is” statement solely disclaims implied warranties under provisions of the “Colorado Uniform Commercial Code,” Title 4, C.R.S. Non-Exclusive List Of

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“Material Particulars” Material particulars include but are not limited to any of the following: 1. The motor vehicle is a “salvage vehicle” as that term is defined in the Colorado “Certificate of Title Act,” part 1 of article 6 of title 42, C.R.S. 2. The motor vehicle has sustained damage, whether repaired or not repaired, of the following types: a. Frame or unibody damage of any grade or type. b. Flood, fire or hail damage. c. Accident or collision damage. 3. The motor vehicle has been modified in a way that impacts warranty coverage. 4. The motor vehicle had been declared a “total loss” by an insurance company. 5. The motor vehicle had been stolen. 6. The motor vehicle had been used as a police vehicle, vehicle for hire, rental vehicle or a loaner or courtesy vehicle, if such use is clearly ascertainable from a title brand, from information obtained from a prior owner, from a Vehicle Identification Number

(VIN), from a State-issued Identification Number, or from any other source. 7. The motor vehicle had been put to a use or had been altered in such a way that a reasonable person would consider unusual or extraordinary, such as use as a racing vehicle. Matters Generally Not Considered “Material Particulars” This list is not intended to be all-inclusive. Material particulars do not generally include the items on the following list: 1. Normal wear and tear. 2. Completed or prior mechanical repair. 3. General maintenance. 4. Repair or replacement of tires, wheels, glass, handlebars, moldings, radios, in-dash audio equipment or the like, provided that the repair or replacement was completed in a manner reasonably comparable to manufacturer’s specifications and provided any repaired or replaced item is functioning at the time of sale in the manner that a reasonable person would expect. 5. Touch up paint for minor scratches, dents, or dings.

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Intimidated by Digital Marketing? Don’t be! 6. Completed recall repair, provided the repair was done by a dealer authorized by the manufacturer to perform such repairs. Please note every month there are dealers paying fines or worse when found not to have disclosed the above mentioned items. Hail damage seems to have more confusion than some of the others do – repaired or nonrepaired hail needs to be disclosed if you know about the damage. Thank you and please contact me with any questions. Todd O’Connell 303-239-8000 toddo@ciada.org

YOU CAN DO THIS BY CHELSEA MAGEE It doesn’t matter what amazing deal, video or article you have, unless someone sees it! That’s why digital marketing is so important. It drives traffic to your website, and that traffic to your website drives leads to your CRM. Sounds easy and not super complicated, right? It all starts with search. Fortunately, Google wants it to be that way. Most traffic starts with search. After all, whenever someone has a question, what’s the first response? I always say, “Just Google it!” Your customers use Google to look up certain vehicles, your dealership reputation and much more. In fact, the search engine giant receives more than 3.5 billion searches per day. A solid digital plan makes their searching easy and quick, like a

drive thru window. You don’t need a web developer. So often, I find dealerships think digital marketing is a super complicated thing. Many are concerned that they need to have – or hire – someone with extensive technical knowledge, like a website developer. You’ll probably be surprised to read that the best online marketing strategies aren’t about understanding computers, but understanding people! People are the secret to digital marketing. Expanding your online presence starts with learning what online shoppers expect so you can get consumers’ attention. Think about what grabs your attention at drive thru windows. Is it the price? Probably not – it’s about the tantalizing photos and descriptions. Digital marketing is about offering the right content, images and offers in the right places. Once you understand how your customers interact with the web, you can identify the best mobile strategy, website design and social media presence. Then you learn how to

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use performance metrics to gauge your results. This part is a little technical, but with many resources to guide you, you don’t need to worry! You can do this. Really, the biggest takeaway I want you to get from this is that digital marketing isn’t all that different from skills you already have: understanding what customers need and knowing how to talk to them. It’s just that you’re doing it in a different way. When you focus on people, not the technology, you can see that the digital landscape is really all about relationship building… with a few extra bells and whistles! Chelsea Magee has been involved in digital throughout her career. She is the Client Success Director at NCM and oversees their online training website, digital marketing and social media. This article originally appeared on NCM’s Up to Speed blog (http:// blog.ncminstitute.com) and is reprinted with permission.

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WA SHING T ON UP DAT E

NIADA Government Report

HERE’S A RUNDOWN OF SOME OF THE LATEST GOVERNMENTAL ISSUES AND ACTIVITY AFFECTING THE USED CAR INDUSTRY FROM NIADA SENIOR VICE PRESIDENT OF LEGAL AND GOVERNMENT AFFAIRS SHAUN PETERSEN AND NIADA LOBBYIST SANTE ESPOSITO OF KEY ADVOCATES.

REGULATORY REPORT Consumer Financial Protection Bureau The CFPB released its latest supervision report from examinations of banks and nonbanks, highlighting the remediation of $14.3 million to approximately 228,000 consumers. The CFPB focused on several types of violations, including inaccurate reporting to credit reporting agencies and failure by debt collectors to cease collecting on debts after the consumer made a request to cease debt collection communications. Federal law says after a consumer notifies a debt collector

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in writing that he or she refuses to pay a debt or wants a debt collector to stop making contact, the collector must, with few exceptions, stop. Department of Justice Gerald McDonald, 52, of Madrid, N.Y., pleaded guilty to conspiracy to submit false statements to influence a financial institution. McDonald, CEO and part owner of Parkway Country Polaris, Parkway Dodge Chrysler Jeep and Parkway Chevrolet Oldsmobile, admitted he conspired with salespersons and sales managers to submit false information to banks on consumer bank loan applications. In order to ensure an unqualified borrower would qualify for a loan, a coconspirator would either falsely state on the loan application that a cash down payment had been made on a vehicle when no such payments had been made or overstate the amount in the financing applications. McDonald knew of and approved the use of this practice. Department of Labor OSHA finalized its rule for handling whistleblower complaints filed by individuals

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alleging violations of the Dodd– Frank Wall Street Reform and Consumer Protection Act. Section 1057 of Dodd-Frank prohibits retaliation against employees who have provided or are about to provide their employer, the CFPB or other governmental authority with information relating to any act they reasonably believe violates Dodd-Frank or other rules promulgated by the CFPB. Complaints must be filed within 180 days of the alleged retaliation and can be verbal or in writing. The complaint must only alert OSHA of the existence of alleged retaliation and that he or she wants OSHA to investigate. Following the investigation, OSHA will release its written findings on whether the complaint has merit within 60 days. The parties will have an opportunity to respond and meet with the investigator to present testimony. OSHA has the authority to assess against the company any costs and expenses reasonably incurred by the complaining party in relation to the complaint, including attorneys’ and expert

witness fees. The agency can also award the employer reasonable attorneys’ fees, not exceeding $1,000, if the Department of Labor finds the complaint is frivolous or has been brought in bad faith. Environmental Protection Agency NIADA joined a group of related industry trade associations, including SEMA and NADA, in sending a letter to the EPA Administrator urging her to withdraw a proposed rule that would threaten the racing industry. In July 2015, the EPA issued a proposed regulation that would make the act of converting a motor vehicle into a race car illegal if the emission system is taken out of compliance from its stock configuration – even if the vehicle is used solely at racetracks and never on public roads. Federal Trade Commission Annual complaint report: In its annual report of complaints filed in 2015, the FTC found nearly 94,000 auto-related complaints. That represented 3 percent of all complaints, putting automotive eighth among complaint

categories. Debt collection was first at 29 percent, followed by and identity theft at 16 percent. Volkswagen lawsuit: The FTC filed a lawsuit against Volkswagen Group of America for deceptive advertising practices related to its “clean diesel” engines. The FTC claims that the illegal emission defeat devices made the claims untrue. Federal courts NIADA joined NADA, the California New Car Dealers Association and the National Mobility Equipment Dealers Association in filing a brief with the Ninth Circuit Court of Appeals in support of a dealership sued by a former employee for violation of the Americans with Disabilities Act. The issue in the case is whether a dealership must provide temporary hand controls to disabled employees to test drive a vehicle offered for sale. The case, Tate v. Family Auto Group, Inc., will have an oral argument in the coming months.

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LEGISLATIVE REPORT S. 2663, Reforming CFPB Indirect Auto Financing Guidance Act On March 10, Sen. Jerry Moran (R-Kan.) introduced the bill with no cosponsors. It was decided to move ahead rather than waiting to find a Democrat to cosponsor the bill, which passed the House by a 332-96 margin in November. Introducing the bill, which would rescind the CFPB’s controversial 2013 auto financing guidance action regarding the alleged disparate impact on minorities of dealer discretion and provide for a more transparent and accountable process, adds additional pressure on the CFPB to revisit the issue and address industry concerns. NIADA is now turning its attention to seeking support for an affirmative vote on the bill should it come up, either as a separate vehicle or as an amendment to another bill. The auto finance guidance issue received much attention during the House Financial Services’ recent hearing on the CFPB’s semi-annual report to Congress. The committee’s Oversight Subcommittee is also planning a hearing on the issue.

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C OOK ING W I T H EDDIE

FRONT RANGE AUTO’S EDDIE COUCH SHARES HIS FAVORITE “COOKING WITH NONNA” RECIPES EDDIE’S CHALLENGE: SO YOU THINK YOU CAN COOK?! SUBMIT YOUR FAVORITE RECIPE TO CIADA FOR A TASTE TEST AND CHANCE TO COMPETE WITH EDDIE’S CULINARY SKILLS.

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Back By Popular Demand

Directions 1. Cook spaghetti in a large pot of boiling salted water until tender but firm. Drain and refresh with cold water. 2. Heat oil in a large nonstick skillet over medium heat. Add bacon and cook until browned. Add onions and cook, stirring occasionally, until golden, Neapolitan 10 to 12 minutes. Add garlic and cook Spaghetti Pie until fragrant, about 1 minute. Transfer Ingredients mixture to a small bowl and let cool • 1 Lb. spaghetti, cooked and slightly. Wipe out pan. drained 3. Whisk together eggs, ricotta • 1 teaspoon olive oil cheese and milk in a large bowl. Stir in • 4 strips uncooked bacon the onions, Parmesan, parsley, basil, • diced 1-1/2 cups chopped onion salt and pepper. Add spaghetti and • 1 teaspoon minced garlic mix all ingredients together. • 6 large eggs 4. Add a thin layer of olive oil to • 1 cup Whole Milk Ricotta Cheese coat pan and place over medium heat. • 1/2 cup milk Pour in mixture and distribute evenly • 3/4 cup freshly grated Parmesan in pan. cheese 5. Cook until underside is golden, • 2 tablespoons chopped fresh moving pan around on burner to parsley ensure even cooking, about 6 minutes. • 1 teaspoon salt Invert a large platter over skillet, • 1 teaspoon freshly ground grasp platter and skillet with oven pepper mitts and carefully turn over. Lift off skillet and re-coat pan with a small amount of olive oil. 6. Slide mixture back into the skillet and cook until bottom is golden, cover and allow the pie to cook all the way through till firm inside. 7. Slide spaghetti pie onto a platter.

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S A F E T Y WAT CH

Subaru Hoods Might Open Unexpectedly

POSSIBLE MALFUNCTION ADDRESSED IN TWO PHASES

Subaru of America Inc. is recalling 77,000 model year 2006-14 Tribeca vehicles manufactured Nov. 16, 2004, to Jan. 27, 2014. Due to a possible malfunction of the hood safety system and hood lock system, the hood may open unexpectedly while driving. If the hood unexpectedly opens while driving, it may interfere with the driver’s visibility, increasing the risk of a crash. Subaru will notify owners, and dealers will complete this recall in two phases. Phase one will involve inspection, cleaning and lubricating the hood safety and hood lock systems. If after this is performed the hood latch does not operate properly, it will be replaced with a new current style part. Phase two will involve installing an improved hood safety system and hood lock system. The manufacturer has not yet provided a notification schedule. Subaru’s number for this recall is WQX-59 (phase one) and WQY-60 (phase two).

Membership Application Membership Application

CIADA # : ___________________ CIADA Acct # :Acct ___________________

Date:__________________ Date:__________________ Select One: Entity Type:

Select One:

Used Car Dealer

Entity Type:

Individual

Wholesale

Wholesale Partnership

Partnership

Franchised

Associate Member

Franchised

Corporation

Associate Member

Ltd Liability Co (LLC)

Business Name: _________________________________________________________________________________ DBA/Trade Name: ______________________________________________________________________________

usiness Name: ________________________________________________________________________________ Dealer # :____________ Physical Address:___________________________________________________________

BA/Trade Name: _____________________________________________________________________________ City:____________________________ State:_________ Zip:_______ County:_____________________________

Mailing Address: ___________________________________City:__________ State:________ Zip:____________ aler # :____________ Physical Address:__________________________________________________________ Business #___________________Fax #________________ Cell #________________Home #__________________

ty:____________________________ State:_________ Zip:_______ County:____________________________ E-mail Address:____________________________________ Web Site:____________________________________

ailing Address: ___________________________________City:__________ State:________ Zip:____________ Owner #1:__________________________________ Spouse:____________________________________________

Home Address:_________________________________________________________________________________ usiness #___________________Fax #________________ Cell #________________Home #_________________ City:____________________________ State:_________ Zip:_______ County:_____________________________

mail Address:____________________________________ Web Site:___________________________________ Owner #2:___________________________________ Spouse:____________________________________________

wner #1:__________________________________ Spouse:____________________________________________ Home Address:__________________________________________________________________________________

City:____________________________ State:_________ Zip:_______ County:______________________________ ome Address:_________________________________________________________________________________

Membership Dues Are $225.00 annually, which includes $60 for NIADA. ty:____________________________ State:_________ Zip:_______ For income tax purposes, member dues paid to CIADA are deductible as a business expense. CIADA estimates thatCounty:____________________________ 13.33% of all dues paid to CIADA are utilized for nondeductible lobbying expenditures. All members are advised that this percentage of dues paid to CIADA in the tax year 2016 is non-deductible for income tax purposes. Consult your tax advisor. By completing this form, I am consenting to and giving CIADA, its affiliates and subsidiaries, my permission to contact me and provide information to me at the mailing and e-mail address, telephone and fax number(s) I have provided.

wner #2:___________________________________ Spouse:___________________________________________

Please Support Your Political Committee Fund: ome Address:_________________________________________________________________________________ Select contribution amount to be included with payment below:

$200 $75 $50 ty:____________________________ State:_________ Zip:_______ County:____________________________ ---------------------------------------------------------------------------------------PLEASE INDICATE PAYMENT METHOD:

Membership Dues Are Please $225.00 annually, which includes $60 for NIADA. remit payment with this completed application.

come tax purposes, member dues paid to CIADA are deductible as a business expense. CIADA estimates that 13.33% of all dues paid to CIADA are utilized for non ble lobbying expenditures. members are advisedaddress that thisbelow) percentage of dues paid to CIADA in the tax year 2016 is non-deductible for income tax purposes. Con CheckAll (payable to CIADA-see your tax advisor. Credit Card: this form, I am consenting to and giving CIADA, its affiliates and subsidiaries, my permission to contact me and By completing provide information to me at the mailing and e-mail address, telephone and fax number(s) I have provided. NAME ON CARD: ________________________________________________________________________________________

Please Support Your Political Committee Fund: BILLING ADDRESS:______________________________________________________________________________________ Select contribution amount to be included with payment below: CREDIT CARD #:__________________________________________________EXPIRATION DATE:___________________ $200 $75 $50 VERIFICATION CODE (Last 3 digits on back):______________ AUTHORIZED SIGNATURE:______________________________________________________

---------------------------------------------------------------------------------PLEASE INDICATE PAYMENT METHOD: Mail or Fax Application to: COLORADO INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION Please remit payment with this completed application.

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DE A L ER B ES T P R AC T ICES

Regulatory Compliance Starts with Data Accuracy

to a lender can create an ongoing financial liability. For example, if you submit a credit application that incorrectly states a Nissan Altima has an SL trim package when really it was an S trim package, your dealership could be responsible for the difference between the stated value and the actual collateral value. Many lenders will audit the loan documentation when a loan results in a repossession and subsequent charge-off. If the lender finds the dealer overstated equipment, which inflated the stated value of the collateral, the dealer will likely be requested to compensate the lender for the difference. In the past this could cost dealers several hundred dollars to a few thousand dollars, in addition to creating tension between the dealer and its retail lender. Today, however, with advancements in technology the stakes are higher for dealers as lenders now see this behavior as a red flag. Lenders can easily audit a dealer’s entire portfolio by using technologies that use vehicles’ VIN numbers to access the actual manufacturer’s build sheet for a vehicle in question, leaving no doubt as to exactly which loans contained “power booking.” This could result in the lender terminating their relationship with the dealer and requesting a larger demand letter. Compliance and accuracy go hand in hand. Repeatedly making simple mistakes when completing forms, or using the wrong forms to document a transaction,

DON’T OMIT THIS CRITICAL DETAIL BY CHET HEUGHAN

How many times have you heard the phrase “The devil is in the details”? That statement has never been more applicable to automotive dealers than it is today. When considering financial risks to their businesses, most dealership owners and managers tend to spend more time focused on issues such as hidden damage on vehicles purchased at auction, aging inventory, contracts in transit and the possibility of another downturn in the economy while often omitting an issue of critical importance to their business. One of the largest risks to a dealer’s financial future is accuracy – or better stated, the lack of accuracy – in loan documentation. Inaccurate sales documentation in financed transactions can create a lingering risk to your business. Your risk starts from the time you submit a credit application to the lender. Something as simple as an incorrect bookout submitted along with the credit application

can appear to be predatory or deceptive. Inadvertent noncompliance with state and federal guidelines when preparing loan documents can be another area where risk can accumulate over time. A typical retail installment contract can contain more than 150 fillable fields. Making sure the correct information goes into each field may seem like a no-brainer, but what if you’re selling four aftermarket products and your retail installment contract only provides three lines to disclose the information? Some dealers simply combine two of the products or include the product in the selling price. These aren’t good ideas! This approach may pass a lender’s due diligence process, so it must be compliant, but don’t rely on the lender to be your failsafe. Lenders are not perfect

and they don’t catch everything. This issue could be caught months or years later during an audit of the lender’s indirect loan files or it could be questioned by your customers. What was a simple solution to a problem caused by not having enough lines on the contract could easily be viewed as nondisclosure or as deceptive and predatory practices, which can carry large financial penalties or be the basis of a consumer lawsuit. Choosing the right loan documents that are up to date with current legislation along with the enhanced market features needed to support the sale of the many insurance and aftermarket products available in the market today is a sure way to reduce noncompliance and ultimately financial risk. Using the same old loan documents you’ve always used or the free documents made available from your lender may not be the best practice. Choosing a loan documentation supplier that warrants their product, has a comprehensive program for monitoring pending and enacted regulations, and completes timely revisions of their products can go a long way to reducing your compliance risks. Of course, there are many more risks to your business – market conditions, competition and availability of inventory, just to name a few. Many of these risks are outside your control, but you can control a large portion of your risk by demanding data accuracy from your staff and the vendors who provide you with products and services. Chet Heughan is director of AppOne® Risk Mitigation Services and Indirect Lending for Wolters Kluwer. For more information, please visit www. wolterskluwerfs.com.

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