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AUGUST 2016 / CAR LINES 1
MANAGEMENT MATTERS / BY KEVIN BAUMGART
DOES YOUR DEALERSHIP VALUE ITS INTERVIEW PROCESS?
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>> Be Prepared for the Right Hire
BY THE TIME a candidate reaches the interview stage, it’s clear they have grabbed your attention as a potential hire for your dealership. The interview process is an irreplaceable component of your dealership’s overall hiring strategy. It’s also the point at which both the employer and job seeker determine if it’s worth their time to move forward with the process. What’s at Stake for Employers? Taking the time to speak with a candidate in person is critical to determine if someone is a good fit for the role. It’s also an integral part in persuading top talent to work for your dealership. Research from LinkedIn found that 87 percent of job seekers said a great interview experience would make them reconsider a job offer even if they have initial doubts. In a competitive job market, this can make the difference between hiring an all-star and a dud. Conversely, 83 percent of candidates say a negative encounter during an interview will erode their interest in a position. Getting the interview process down to a science begins far in advance of the inperson visit. Employer Due Diligence You will want to use the early stages of the hiring process to get as much information about the applicant as possible to ensure you’re making the right decision by inviting them in for an interview. Hiring technology has come a long way in enabling auto dealers to evaluate job seekers before they ever step foot in the dealership. Employers should take advantage of tools that test hard skills, soft skills, culture fit and aptitude. Based on the results of these evaluations, you’re able to better gauge whether they meet – or even exceed – the requirements established in your job description. This adds insight that employers can use in conjunction with resumes and applications to make informed judgments about applicants and if they should bring them in for an interview. Once you’ve completed these critical steps, you need to make sure you are prepared to meet the candidate inperson. How to Prepare for the Interview No detail is too small as you prepare for the interview. Consider what type of impression you’ll leave after you’ve invited a candidate to talk about a specific position and you forget their name, the www.iiada.com
job they applied for or refer to past work experiences belonging to another applicant. This is the candidate’s first impression of what it would be like to work at your dealership. It’s important to get it right. You should also have your interview questions prepared in advance and in front of you when you sit down for the interview. Be sure to have questions that will help you effectively identify whether the candidate can perform all necessary tasks defined in the job description. Addressing your priorities up front and asking questions about measurable criteria will help you determine their ability to do well in the role. At the end of an interview is a great time to allow candidates to ask questions, which helps set expectations for the candidate and the interviewer. If you are prepared for this exchange in advance, it is easier to sell top talent not just on the role, but also on your dealership as a place to work. As much as the employer is judging the candidate, the potential new hire is also forming opinions about working for the dealership, and a great impression will win over all-star candidates. An Extensive Process The interview is the singular component in hiring that carries the most weight for both the employer and candidate. It’s crucial you have a rocksolid process in place – built on strong intel about each applicant – that will make the encounter productive and illuminating for all parties involved. Kevin Baumgart is VP of Business Development at Hireology. He has spent his entire 15-year career in sales and sales management for entrepreneurial and start-up companies. This article originally appeared on NCM’s Up to Speed blog (blog.ncminstitute.com) and is reprinted with permission.
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WHAT’S NEW
New PassTime Series on niada.tv Get more from your GPS! There is a new video series on niada.tv that identifies how PassTime GPS tracking solutions facilitate higher rates of return on financing based upon improved customer payment performance. It also discusses PassTime’s wireless GPS telematics products. Check out this new series and much more at niada.tv!
06 RULES GOVERNING OVERTIME 08 INDIANA LEGISLATIVE UPDATE 10 4 ESSENTIALS FOR BIG SALES IN THE DOG DAYS OF SUMMER 12 IS YOUR RFC COMPLIANT WITH THE IRS? 14 CARLAWYER 16 G OLF TOURNAMENT 18 NIADA CONVENTION 22 D OES YOUR CONTENT MARKETING STRATEGY INCLUDE VIDEO?
MANHEIM APPOINTS NEW GENERAL MANAGER FOR INDIANA >> Emily Decker is a 20-Year
Industry Veteran
BUILDING ON ITS EFFORTS TO PROMOTE
talent with proven skills and a passion to drive success, Manheim has named Emily Decker as general manager of Manheim Indianapolis. This new appointee will focus on enhancing the client experience
ADESA........................................................... IFC Autotrader .....................................................IBC Black Book........................................................ 5 Dyer Auto Auction.............................................. 7 Kesler Schaefer AA............................................. 9 Manheim ..................................................... 10,11 Manheim Indianapolis....................................... 3 Manheim Pennsylvania..................................... 13 NextGear Capital.......................................... 12, 19 VAuto..................................................Back Cover
OFFICE
For information on how to become a member of IIADA, please call 219.661.0287 128 S. East Street # 1393 Crown Point, IN 46308 iiada@comcast.net • www.iiada.com
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. Car Lines is published 10 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 76006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of Car Lines 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. All 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
Andy Zay
Zay Leasing & Rentals, Inc. 4957 N. Broadway Huntington, IN 46750 Phone: 260.356.1588 azay@sbcglobal.net Fritz Kreutzinger
Chairman of the Board Legislative Chairman Fritz Associates P.O. Box 168 Fishers, IN 46038 317.842.2228 Fax: 317.842.7900 fritzauto@aol.com Tony Del Real
Vice President
Del Real Automotive Group 1002 Walnut Avenue Frankfort, IN 46041 Phone: 765.446.9204 tdelreal@delrealauto.com Bruce Norton
Treasurer
Drive1 USA, Inc. 1512 W. 96th Avenue Suite C Crown Point, IN 46307 Phone: 219.670.0542 Bnorton@drive1usa.com Sharon Brennan
Secretary
Fritz in Fishers 8599 E. 116th Street Fishers, IN 46038 Phone: 317.842.2228 sharonb@fritzinfishers.com Tricia Trent Trent Auto Sales 1327 N 6th St. Vincennes, IN 47591 812.882.3772 Fax: 812.882.1986 ttrent01@yahoo.com Jennifer Cotton Dyer Auto Auction 219.865.2361 Fax: 219.322.1761 bcotton@dyerauction.com
4 CAR LINES / AUGUST 2016
by tapping the company’s innovations, efficiencies and expanding services. A 20-year veteran of Manheim, Decker started as a dealer registration administrator and took on various roles with increasing responsibility at Manheim’s Tampa, St. Petersburg and Lakeland locations. Most recently she served as assistant GM at Manheim Statesville. In addition to her enthusiasm for the business, Decker is engaged in company leadership programs including Manheim’s Guiding Coalition, the Cox mentor program, Women with Drive and the prestigious Cox Leader’s Edge program. “Emily is a powerful addition to our GM ranks,” said regional vice president Tim Janego. “Our clients and the Indianapolis team will benefit from her deep knowledge, insight and commitment.”
BOARD MEMBERS President
ADVERTISER’S INDEX
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INSIDE
AUCTION NEWS /
Kim Graham Kim Graham, Inc. 1648 A US 31 S Greenwood, IN 46143 317.888.0100 Fax: 317.888.8900 k.motors@sbcglobal.net
Harold Drees H.T.D., Inc. 200 E. Main Street Thorntown, IN 46071 317.402.2312 Fax: 765.436.7222 htdinc@msn.com
Ed White White’s Auto Sales 1105 McKinley Ave. Rensselaer, IN 47978 219.866.7553 Fax: 219.866.7256 edwhite123@att.net
Doug Alvey First Class Auto Sales, Inc. 695 W. 900S Hebron, IN 46341 219.996.2600 Fax: 219.531.4628 talvey65@yahoo.com
John Stumpf Greater Kalamazoo Auto Auction P. O. Box 697 Schoolcraft, MI 49087 269.679.5021 jstumpf@kalamazooaa.com
Andrew J. Inabnitt Approval Auto Credit Inc. 9825 Huggin Hollow Rd. Martinsville, IN 46151 317.422.8001 Fax: 317.422.8020 joe@approvalautocredit.com
Tony Houk Kesler-Schaefer Auto Auction, Inc. 5333 W. 46th Street Indianapolis, IN 46253 317.297.2300 Fax: 317.297.6236 skesler@ksaa1.com Tyler Trent Trent Auto Sales 1327 N 6th St. Vincennes, IN 47591 812.882.3772 Fax: 812.882.1986 ttrent01@yahoo.com
David D. Baldwin II Best Deal Auto Sales, Inc. 1875 SR 8 Auburn, IN 46706 260.357.0099 Fax: 260.357.0090 dbthesecond@yahoo.com Debbie Andersen Executive Director 128 S. East Street # 1393 Crown Point, IN 46308 219.661.0287 iiada@comcast.net
Travis Baldwin Best Deal Auto Sales 2526 Scotswolde Drive Fort Wayne, IN 46808 Phone: 260.483.7999 travisbaldwin@ bestdealautosalesonline.com Taryn Sanchez Whites Auto Sales LLC 1105 N. McKinley Avenue Rensselaer, IN 47978 Phone: 219.866.7553 twhite1517@att.net
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IIADA REGULATORY MATTERS / BY HUTH THOMPSON, LLP
RULES GOVERNING OVERTIME
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>> Changes Effective December 1
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The rules will significantly
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A CHANGE IN THE RULES GOVERNING OVERTIME
has been coming for two years, with a sneak preview of proposed modifications last year. But on May 18, the Department of Labor came out with its new final rules, which take effect on December 1, 2016. The rules will significantly raise the salary level used to determine whether employees are eligible for overtime and will affect more than 4 million salaried employees, according to the DOL. The Obama administration’s goal was to reset the income threshold to the point it would have reached, with period inflation adjustments, had it not been frozen more than a decade ago. Under the new rule, the wage threshold test is more than doubling from today’s $23,660 ($455 per week) to $47,476 ($913 per week). The limit will be adjusted every three years beginning January 1, 2020. Employees earning less than $47,476, regardless of their job responsibilities, are deemed non-exempt, and therefore entitled to overtime pay. Exempt or Non-exempt? Unless specifically exempted, employees covered by the Fair Labor Standards Act must receive pay for hours worked in excess of 40 in a workweek at a rate of not less than one and one-half of their regular rates of pay. Not only will employers have to pay the overtime, they’ll also be liable for payroll taxes on it. Two tests determine whether employees should be treated as “exempt,” and thus not entitled to overtime pay: 1. A pay threshold test, and 2. A duties test, under which employees who “primarily perform executive, administrative, or professional duties,” are deemed exempt. Regulations spell out those criteria in greater detail. Highly Compensated Threshold In a related change, the pay threshold for “highly compensated” also went up – from $100,000 to $134,004. Employees earning above that higher amount, regardless of whether their jobs would be classified as non-exempt under the “duties” test, can still be treated as exempt, and thus not entitled to overtime pay. So, beginning in December, whether employees whose pay falls between $47,476 and $134,004 are to be eligible for overtime pay as non-exempt workers will be determined by the same duties test that has been in place for years. Note: Employees’ pay for purposes of determining their exempt/non-exempt status includes nondiscretionary bonuses, incentive pay and commissions, as long as those payments occur at least on a quarterly basis and don’t exceed 10 percent of the employee’s compensation.
raise the salary level used to determine whether employees are eligible for overtime and will affect more than 4 million salaried employees, according to the DOL.
OPPOSITION TO THE FINAL RULES
MANY ORGANIZATIONS reacted negatively to the new overtime rules. Here are excerpts from statements issued by four groups: National Restaurant Association: “Restaurants operate on thin margins with low profits per employee and little room to absorb added costs. More than doubling the current minimum salary threshold for exempt employees, while automatically increasing salary levels, will harm restaurants and the employer community at large. “More than 80 percent of restaurant owners and 97 percent of restaurant managers start their careers in nonmanagerial positions and move up with performance-based incentives. These regulations may mean that salaried employees, who have worked hard to get where they are, could be subject to becoming hourly employees again.” American Council on Education: “Requiring such a dramatic and costly change to be implemented so quickly will leave many colleges with no choice Salaried employees who, thanks to the soon-to-be higher income threshold will be entitled to overtime pay, don’t need to be switched to being paid an hourly wage or to punch a time clock. However, for salaried non-exempt employees below the threshold, it’s important to track time worked to ensure the hours: a) Don’t exceed 40 hours a week, or b) That employees are awarded the overtime pay they have earned. Overtime pay will need to be determined based on calculating what the employee’s salary translates to on an hourly basis for a 40-hour workweek. Impact Assessment Here are some immediate steps to consider in response to the new rules. Start by
but to respond to this regulation with a combination of tuition increases, service reductions and possibly layoffs.” National Retail Federation: “In the retail sector alone, hundreds of thousands of career professionals will lose their status as salaried employees and find themselves reclassified as hourly workers, depriving them of the workplace flexibility and other benefits they so highly value.” National Association of Manufacturers: “Manufacturing is a pathway to the middle class for millions of men and women who make things in America. However, this regulation creates barriers to opportunity, severely limiting flexibility and dramatically increasing red tape, especially for small manufacturers who cannot afford the burdens of a 99 percent salary increase for management employees who are exempt from overtime pay. Even worse, the administration has also required there to be future automatic increases, which creates uncertainty in planning in future years.” In addition to business and not-forprofit organizations, some Republican members of Congress also oppose the new rules and say they will try to block them.
answering these questions: • How many of your employees will be newly classified as non-exempt? • How many of them routinely work more than 40 hours a week? • What would it cost you if they continue to work more than 40 hours per workweek and are eligible for overtime? • What systems do you need in place to monitor employees’ hours carefully after the new rules go into effect? The DOL says employers “may use any method they choose for tracking and recording hours” as long as it’s complete and accurate. Once you get a basic handle on this information, you’ll face more questions. Suppose, for example, you don’t implement any changes and your payroll costs go up by
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INDUSTRY NEWS / BY USED CAR NEWS
FTC SCHEDULES DISCLOSURES WORKSHOP
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more than you can manage. You would then need to address questions like these: • What if we hire some part-time people to keep newly non-exempt employees from having to exceed 40 hours a week? • Will it be more economical to give raises to employees who are currently earning somewhat less than $47,467, to get them to the exempt level and avoid having to track their hours and pay them overtime? • Can we reduce or eliminate overtime hours? • Can we lower the salaries or wages of employees who will become entitled to overtime pay so that, when they earn overtime pay, they will wind up earning the same amount as they did before? • Can we make adjustments to our employee benefits program to offset the rise in payroll cost? There are no easy answers. Each possible response raises its own issues. For example, if you’re currently paying for all or a portion of employee benefits such as group life and longterm care insurance, you could shift those over to “voluntary” (employee-paid) status. But doing so would certainly be a takeaway, and many employees would resent it – although perhaps not as much as an actual wage reduction. No Free Lunch Another way you could blunt the impact of cutting pay or benefits is to increase non-exempt employees’ vacation benefits. However, there’s no “free lunch.” Doing this could increase the total hours that non-vacationing employees would need to work to cover for their vacationing colleagues, thereby driving up overtime pay. Any such adjustments would need to be considered in light of the overall competitiveness of your labor market and your total compensation package. Although other employers in your area will probably be facing the same pressures, losing valued employees might cost you more than having to pay some overtime. Suppose you raise the pay of employees who are near the threshold and routinely work more than 40 hours a week to keep them in the exempt category. That solves the overtime problem but could have negative ripple effects. For example, one issue is “pay compression,” or the narrowing of the spread in pay between high and average performers, veteran employees and new hires, or employees and their supervisors. Some resentment is inevitable. That, in turn, could put pressure on you to give raises to employees already above the exempt threshold. That might be necessary as a way to restore the original spread and make things “fair” in the eyes of the higher paid workers. This assumes they will become aware of pay changes occurring among their colleagues. While that’s not often the case, it’s a safe bet many will figure it out. “Can We Talk?” It’s also a safe bet your employees will have heard about the impending rule change, and they’ll be looking to you for answers about how it will affect them. For most employers it’s probably wise to begin engaging employees on the topic, even if you haven’t mapped out the details of how you will respond. An honest “we’re figuring this out” answer can be better than silence. For more information on the final rules, consult with your payroll or tax adviser.
Putting Disclosures to the Test
THE FEDERAL TRADE COMMISSION will host a public workshop on Sept. 15 to examine the testing and evaluation of disclosures that companies make to consumers about advertising claims, privacy practices, and other information. The FTC’s workshop will explore how to test the effectiveness of these disclosures to ensure consumers notice them, understand them, and can use them in their decision-making. The workshop, called “Putting Disclosures to the Test,” is aimed at encouraging and improving the evaluation and testing of disclosures by industry, academics, and the FTC. Effective disclosures are critical in helping consumers make informed decisions in the marketplace. The FTC has a long commitment to understanding and testing the effectiveness of consumer disclosures, and is especially interested in learning about the costs and benefits of disclosure testing methods in the digital age. Among the areas where disclosures play a key role in consumer protection are: disclosures in advertising, designed
to prevent ads from being deceptive; privacy-related disclosures, including privacy policies and other mechanisms to inform consumers that they are being tracked; disclosures in specific industries designed to prevent deceptive claims, including jewelry, environmental claims, and fuel economy advertisements. The FTC is soliciting presentation proposals for the event, which may be submitted to disclosuretesting@ftc.gov. More information on the proposal process is available on the workshop’s website. Members of the public may also submit comments for the workshop online. The public comment period will remain open until Nov. 2. The workshop is free and open to the public. It will be held at the Constitution Center, 400 7th St., SW, Washington, DC 2024.
AUGUST 2016 / CAR LINES 7
LEGISLATIVE NEWS / BY IIADA STAFF
EFFECTIVE
DAYS FOR DELIVERY OF TITLE INCREASES TO 31 AND TEMPORARY
T
he Indiana Independent Automobile Dealers Association understood our members’ inability to provide customers with their title in 21 days and we are pleased to announce the law has changed! The types and geographic locations of lenders, the geography of our customer base, mail delivery, and title processing have changed. These changes are the reason we educated and worked with our legislature to make delivery of title time requirements more reflective of business conditions.
Customer financing has become specialized with subprime financing making up the majority of the financing market. These companies, along with credit unions, state and nationally chartered banks, have given us the ability to meet the needs of our individual customers. However, the physical location of lenders can be almost anywhere, making it increasingly difficult to get titles. This is in contrast to times when the majority of lending was underwritten by a local bank or credit union who held the title in their safe, all located down the street from the dealership.
Internet presence is now as important
from other states and countries. Buying habits have changed from the times when the majority of vehicle sales came from a customer driving by the dealership to see your inventory or seeing an ad in the local paper. The logistics of delivering a title to a customer many states away increases the time needed to get the title to the customer.
Consumer protection remains in place. The safeguards that protect a consumer purchasing a vehicle in Indiana include: • Indirect Retail Lenders – Lenders are continuously monitoring their dealers to make sure they are compliant and solvent. • Floor Plan Inspections – Dealers who borrow money to finance their inventory are subject to regular inspection by their floor plan lenders. • Dealer Inspections – Dealers are subject to inspections by the Dealer Services Division under the Indiana Secretary of State Office. • Consumer Complaints – A bad “online review” can do a lot of damage to a dealer and his reputation. Indiana’s attorney general investigates customer complaints against Indiana dealers. • Dealer Bonds – Dealers must maintain a $25,000 bond to ensure clear title.IIADA is working for you!
as physical location to most dealers. Today’s customers are shopping your inventory online 8 CAR LINES / AUGUST 2016
www.iiada.com
JULY 1,2016
PLATES INCREASE TO 45 DAYS
WORKING TOGETHER Working together we were able to get this legislation written and passed. Fritz Kreutzinger, IIADA legislative chairman, laid much of the groundwork for this legislation through the Motor Vehicle Advisory Board meetings with the Indiana secretary of state.
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Indiana’s new car dealers endorsed the legislation to extend time for delivery of title. Thank you to the legislators who listened and heard our concerns!
IIADA IS WORKING FOR YOU!
AUGUST 2016 / CAR LINES 9
SALES MATTERS / BY BRENT CARMICHAEL, NCM ASSOCIATES
4 ESSENTIALS FOR BIG SALES IN THE DOG DAYS OF SUMMER
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>> The Right Plan for Summer Profit
THE DOG DAYS of summer are here. The typical BHPH dealer will sell 30 to 35 percent of their annual units in the first three months of the year. They will also realize about the same
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percentage of their annual profit in the first quarter. So, if you got off to a slow start this year, summer could be the only way to salvage your annual sales. However, it’s going to be a lot harder. But you can profit in the summer – with the right plan. Good sales in the summer are no different than selling in the first-quarter heydays. It just requires more focus and drive because your customers have less money and can be harder to find. The four steps I outline below will give your team the skills and focus to make sales, even in the most challenging months. Step One: Develop the right skills. The first of the key ingredients, and
most important, is simply training. Welltrained salespeople can sell any time of year. Set up a training schedule to get your team on point. Both phone training and basic sales skills training should be done weekly, at a minimum. Specifically, address how to overcome objections. Role playing is a good way to accomplish this. Educate your staff on how to set effective appointments by recording and reviewing the calls. Lot traffic is at a premium during the dog days, so make sure your people know how to handle effectively what opportunities they do have. Step Two: Keep up appearances. Appearance is critical. Now, I’m not necessarily talking about your employees’ appearance, which should always be neat and professional, but your overall lot appearance. Over my many years in the business and as an executive conference moderator with NCM Associates, I’ve discovered the No. 1 reason BHPH customers choose a dealership is that it looked good when they drove by. Let’s take this at face value and make sure your lot is the best-looking one in town! Fortunately, improving your lot appearance isn’t difficult. Make sure it is always neat and orderly. Arrange vehicles evenly and with a good mix of colors and styles. Don’t have them face all four directions of the compass! Host a lot party or rodeo at least once a week to force yourself to keep the lot fresh. And don’t forget the cars themselves. You should consider the vehicles on your lot as your mannequins and treat them the way a fine department store treats theirs. Keep them fresh, neat, clean and always ready to sell. That goes for overall lot appearance as well. A fresh coat of paint and some weed killer can do wonders. Step Three: Entice your customers. Successful dealerships understand you can’t just wait for clients. Good marketing brings people to your lot, so develop a plan that offers attractive incentives. Summer is a time when repeat and referral programs really pay dividends. And it is also a good time of year to focus on referrals, not just with your customer base but with outside companies and people as well. If you are not already paying referrals to non-customers, it’s something you should give some serious consideration to. I can assure you some, if not all, of your competitors are doing it. Marketing also extends to your web presence. Make sure your website is up to date. Read through your “About Us” sections and any testimonials – do you need to make changes? Review your employee introductions – has anyone left or been promoted? Do the photos need to be replaced? Reviewing photos is of particular importance if you display inventory. I was on a dealer client’s website the other day and the inventory photos had snow on the vehicles! It’s also critical you check any advertised specials. You don’t want someone stopping in for a deal that’s no longer current!
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SAFETY WATCH /
BMW RECALLS VEHICLES FOR CHILD SEAT RISK
Summer is a time
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>> May Increase Risk of Injury
BMW OF NORTH AMERICA LLC is recalling certain model year 2011-17 X3 sDrive28i, X3 xDrive28i and X3 xDrive35i vehicles manufactured July 2, 2010 to April 14; 2015-17 X3 xDrive28d vehicles manufactured March 10, 2014 to March 31; and 2015-17 x4 xDrive28i, X4 xDrive35i and X4 xDriveM40i vehicles manufactured March 3, 2014 to April 15. The affected vehicles have lower anchor bars for securing child restraint seats that may become damaged when using the European-ISOFIX-type, rigid-style connector, child restraint system. Damaged lower anchor bars may increase the child’s risk of injury in the event of a crash. BMW will notify owners, and dealers will weld a reinforcing bracket to the lower anchor bars and the vehicle body, free of charge.
when repeat and referral programs really pay dividends. And it is also a good time of year to focus on referrals, not just with your customer base but with outside companies and people as well.
Step Four: Get your message out. If you want to make the most of the dog days of summer, make sure people know about you. In this very competitive industry, advertising in some form or fashion is a must. The two most popular advertising media are, of course, television and radio. And, contrary to popular belief, use doesn’t drop off in the summer. Advertising is only effective when it reaches the right folks with the right message. When promoting in these channels, remember to advertise to your customer, not yourself. Chances are your buyers watch different television stations than you do and may even listen to different radio stations. Select ad placements where your clients are watching and listening. If you aren’t certain what media your customers are using, survey both new and existing customers to gauge their entertainment preferences. In other words, just ask them. Moving past traditional media, there are many options in social media to get your message out. I won’t go into them here, but I recommend you get the basics. As you can see, the formula for selling in the dog days is the same as selling in the heydays. Although there are usually fewer opportunities, you can capitalize on what you have when you pay more attention to detail. And it doesn’t need to be expensive – the two most important items outlined above are the least expensive. With the right mix of training, lot maintenance, and marketing and advertising, I know you can keep the dogs at bay. Brent Carmichael is the executive conference moderator at NCM Associates. This article originally appeared on NCM’s Up to Speed blog (blog.ncminstitute.com) and is reprinted with permission.
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AUGUST 2016 / CAR LINES 11
MANAGEMENT MATTERS /
IS YOUR RFC COMPLIANT WITH THE IRS?
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>> Know Where You Stand
SEEMINGLY, IRS audits for small businesses have become scarcer as the service focuses their efforts on the high net income. That trend can lead to a false sense of security for taxpayers. It is especially true for Buy HerePay Here dealers due to the dealer’s ability to determine the discount rates they are using, and thus “manage” their tax liabilities. A Related Finance Company is held to strict guidelines by the IRS. To that point, there is an audit technique guide and checklists published by the IRS for RFCs. The checklist has 26 items on it, but the overarching point of the list is to determine whether the operating dealership and the RFC are set up and operating as separate stand-alone entities. Certain qualities the IRS looks for AUCTION NEWS / BY AUTO REMARKETING STAFF
ADESA INDIANAPOLIS RAISES $34K
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>> Benefits Juvenile Diabetes
ADESA INDIANAPOLIS recently hosted two charity events that together raised more than $34,000 for the Juvenile Diabetes Research Foundation, an advocacy group for people with Type 1 diabetes. “This is a cause that is close to my heart,” said ADESA Indianapolis general manager Dave Emerson, a past corporate chairman of the local Indianapolis Walk to Cure Diabetes, which benefits JDRF. “I’m overwhelmed each year at the generosity of our customers, and I thank them for their continued support.” One of the charity events was the seventh
are whether the RFC has its own employees, pays its own expenses and has a separate facility, and whether both companies have their own bank account. The biggest risk for BHPH dealers lies in determining their discount rate. The discount rate should reflect the actual discount rate observed in the dealer’s market. The strongest support to determine the actual discount rate is to receive portfolio values from an independent third-party that understands the industry. If third-party valuations aren’t being used then the dealer needs to show quantifiable evidence that their discount rate reflects the market. A BHPH dealership has many advantages as well as potential pitfalls if it comes under audit. Dealers should know where they stand in regards to their compliance. Knowing the basics allows owners to have the information available to make informed decisions and mitigate their risk. If you are a BHPH owner, a compliance check is in order. For assistance in navigating this complex area or for other tax or accounting needs contact Craig Todderud, CPA (ctodderud@ somersetcpas.com) or Jane Saxon, CPA (jsaxon@somersetcpas.com).
annual car show, which attracted 71 cars and motorcycles from the local community and beyond. It also featured a silent auction of all donated items. New to this year’s event was a petting zoo, face painting and the addition of Salsa Verde restaurant. The event brought in more than $18,000. The second event was a wine tasting, attended by 150 people and raising more than $16,000. More than 15 Indiana wineries donated wine for the wine pull, and Mallow Run Winery of Bargersville, Ind., provided the wine tasting. Indiana artist Nicholai Shaver created a one-of-a-kind painting of the tasting as it was happening, which was then auctioned during the live auction. The painting sold for $3,200 and will be on display at the ADESA Indianapolis auction. “My team unites every year to host the car show and make it an entertaining and festive event,” Emerson said. “They really outdid themselves this year by adding the petting zoo and the wine tasting. Our customers thoroughly enjoyed both events.”
The ADESA Indianapolis car show was one of two charity events sponsored by the auction in recent months to raise money for JDRF.
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LEGAL UPDATE / BY THOMAS B. HUDSON AND NICOLE FRUSH MUNRO
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>> Keeping You Informed with
the Latest Governmental Issues and Activity in the Used Car Industry
WE’RE BACK, passing on what we’ve recently learned about legal developments in the auto sales, finance and lease world. This month, we feature developments from the Consumer Financial Protection Bureau and the Federal Trade Commission, as well as our “Case of the Month.” Remember – we aren’t reporting every recent legal development, only those we think might be particularly important or interesting to the industry. Why do we include items from other states? We want to show you new legal developments and trends. Also, another state’s laws might be a lot like your state’s laws. If attorneys general or plaintiffs’ lawyers are pursuing particular types of claims in other states, those claims might soon appear in your state. Note this column does not offer legal advice. Always check with your own lawyer to learn how what we report might apply to you, or if you have questions. This Month’s CARLAWYER Compliance Tip Signed up for the CFPB’s complaint portal yet? You need to be monitoring complaints from all sources, and the CFPB offers one more source for determining whether your customers are unhappy with you. And taking care of complaints is one of the most effective ways of staying out of the regulators’ crosshairs. What, exactly, are you waiting for? Federal Developments Speaking of complaints, on May 24, the CFPB released its monthly complaint report, which highlights trends in the complaint data the bureau receives through its Consumer Complaint Database. The report includes complaint data specific to certain companies, overall complaint volume and complaint volume by state, and other trends in the data. Each month, the report spotlights complaints about a particular issue and complaints from a particular geographic location. The latest report focuses on complaints related to credit reporting and highlights complaints from consumers residing in New Mexico. Are you involved in title lending? On May 18, the CFPB released a report on the title loan business. The CFPB’s report demonstrated 20 percent of borrowers who obtain a singlepayment auto title loan have their car or truck seized by their lender when they default. Evidently, that means 80 percent of these borrowers managed to get past their dire financial problems without having their cars seized, but that narrative doesn’t advance the CFPB’s agenda. According to the CFPB’s research, lenders
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You need to be monitoring
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THE CARLAWYER
complaints from all sources, and the CFPB offers one more source for determining whether your customers are unhappy with you
renewed more than 80 percent of these loans on the due date because borrowers could not otherwise repay the loan. The report examined nearly 3.5 million anonymized, singlepayment auto title loan records from nonbank lenders from 2010 through 2013. The CFPB concluded from its study these auto title loans have issues similar to payday loans, including high rates of consumer re-borrowing, which can trigger high costs in fees and interest. Warranty rule changes on the way: On May 18, the FTC proposed to amend the rules governing Disclosure of Written Consumer Product Warranty Terms and Conditions (“Disclosure Rule”) and PreSale Availability of Written Warranty Terms (“Pre-Sale Availability Rule”) to implement the E-Warranty Act, which allows for the use of websites to disseminate warranty terms to consumers in some circumstances. The Disclosure Rule specifies the aspects of warranty coverage that must be disclosed in written warranties, as well as the exact language that must be used for certain disclosures with respect to state law regarding the duration of implied warranties and the availability of consequential or incidental damages. Under the Disclosure Rule, warranty information must be disclosed in simple, easily understandable, and concise language in a single document. The warrantor must disclose any limitations on the duration of implied warranties on the face of the warranty, as mandated by the MagnusonMoss Warranty Act. The FTC proposes to revise the Disclosure Rule to specify that disclosures mandated to appear “on the face” of a warranty posted on an Internet website or displayed electronically must be placed close to the text of the warranty terms begins. The Pre-Sale Availability Rule details the methods by which warrantors and sellers must provide warranty terms to consumers prior to sale of the warranted item. The FTC proposes to revise the Pre-Sale Availability Rule to allow warrantors to post warranty terms on websites if they also provide a non-Internet method for consumers to obtain the warranty terms and satisfy certain other conditions. Are you up to speed on your credit reporting responsibilities? On May 9, the FTC announced a $72,000 settlement with Credit Protection Association, a debt collection agency, resolving allegations the
company violated the Fair Credit Reporting Act by failing to have adequate policies and procedures in place to handle consumer disputes of information the company provided to credit reporting agencies and by failing to adequately inform consumers about the outcomes of its investigations about disputed information. In addition to the civil penalty, the company will be required to adopt new procedures that comply with the requirements of the FCRA’s Furnisher Rule. The FTC also released a blog post discussing its settlement with Credit Protection, noting the case offers compliance guidance for other companies covered by the Furnisher Rule. Adios, arbitration agreements in credit contracts: On May 5, the CFPB issued a proposed rule limiting mandatory arbitration clauses in a wide variety of contracts. The CFPB is seeking comment on a proposal to prohibit companies from using class action waivers in pre-dispute mandatory arbitration clauses with consumers. Companies would still be able to include arbitration clauses in their contracts, but for contracts subject to the proposal, the clauses would have to say explicitly that they cannot be used to stop consumers from being part of a class action in court. The proposal provides the specific language that companies must use. The proposal also requires companies using pre-dispute arbitration agreements to submit to the CFPB claims, awards, and certain related materials filed in arbitration cases to allow the bureau to monitor arbitrations to ensure the process is fair for consumers. Comments on the proposed rule are due by August 22. Case of the Month Dealership’s inflation of “cash price” to compensate for trade-in over-allowance did not violate TILA: A consumer agreed to buy a new car from a dealership for $31,322. The manufacturer’s suggested retail price for the car was $24,150. The dealership subtracted $3,500 from the $31,322 price for the car that the consumer traded in as part of a promotion in which the dealership agreed to provide a $3,500 discount for any tradein, regardless of the trade-in’s actual value, which in this consumer’s case was close to $0. In cases where the dealership gives the $3,500 discount, the buyer agrees not to negotiate
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of amount financed represented a true and accurate description of the terms to which she agreed. After the court dismissed the consumer’s federal claims, it declined to exercise jurisdiction over her state law claims. Just because the court found for the dealer on the Truth in Lending claim doesn’t mean the dealer is home free. The court didn’t rule on the buyer’s state law unfair trade practice claims, leaving the buyer free to bring those claims in state court. Note that we have seen these “$X dollars for anything you can push, pull, drive or drag” ad campaigns successfully attacked in other cases – you should avoid these sorts of advertisements. See Morales v. Barberino Brothers, Inc., 2016 U.S. Dist. LEXIS 59726 (D. Conn. May 5, 2016). So there’s this month’s roundup! Stay legal, and we’ll see you next month. Tom (thudson@hudco.com) and Nikki (nmunro@hudco.com) are partners in the law firm of Hudson Cook, LLP. Tom has written several books and is the publisher of Spot Delivery, a monthly legal newsletter for auto dealers. He is Editor in Chief of CARLAW, a monthly report of legal developments for the auto finance and leasing industry. Nikki is a contributing author to the F&I Legal Desk Book and frequently writes for Spot Delivery. For information, visit www.counselorlibrary. com. Copyright CounselorLibrary.com 2016, all rights reserved. Single publication rights only, to the Association. (6/16). HC# 48514777-3234.
LEGAL NEWS /
DEALER ALERT: NEW RENTAL RECALL RULES IN EFFECT >> Loaner Vehicles May be Affected
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the sale price, and the dealership adds $3,500 to the sale price. The consumer sued the dealership for violating the federal Truth in Lending Act and the Connecticut Unfair Trade Practices Act. The federal trial court granted the dealership’s motion for summary judgment. The consumer claimed the dealership violated TILA by failing to accurately itemize the amount financed and failing to accurately disclose the finance charge in the retail installment contract she signed. Both arguments were based on the fact the dealership inflated the cash price of the car the consumer bought to compensate for the trade-in discount it gave her for a car with almost no value. First, the court found the dealership accurately disclosed the finance charge. The consumer claimed the increase in the sale price of the car to compensate for the trade-in discount constituted an undisclosed finance charge. The court disagreed, noting that because the dealership increased the sales prices of its cars to offset the tradein allowances in both cash and credit transactions, the increase did not amount to a finance charge. Second, the court found the dealership accurately itemized the amount financed. The court noted that although the consumer agreed to a bad bargain, the itemization
RENTAL CAR COMPANIES with an average of 35 or more vehicles in a rental fleet are now prohibited from renting those vehicles if they are subject to an open recall. That requirement, which applies to vehicles with a gross vehicle weight rating of 10,000 pounds or less, was part of the Fixing America’s Surface Transportation Act (FAST Act), which was signed by the President in December. The National Highway Traffic Safety Administration now has authority to investigate and enforce the new provisions on rental companies. While the new rule clearly applies to rental vehicles, the law does not state whether “loaner” vehicles are subject to the limitations. Dealers are encouraged to consult their attorneys for specific legal advice on the issue. NIADA successfully lobbied Congress to keep harmful provisions out of the FAST Act, including an amendment that would have prohibited dealers from selling or leasing used motor vehicles with an open recall. Nevertheless, NIADA encourages all dealers to use the VIN lookup tool found at NHTSA’s safercar.gov website regularly to check their inventory for open recalls and to have those vehicles fixed, if possible, before selling, leasing, renting or loaning them. When a repair is not possible, dealers are strongly encouraged to disclose the existence of all open recalls to their customers prior to sale.
AUGUST 2016 / CAR LINES 15
Join Us
for our 2016 IIADA
Registration Fee: $ 95 per person • Breakfast and registration 9 a.m. • Dinner after golf included • Team Awards to 1st, 2nd and 3rd place, longest drive, closest to the pin, longest putt • Golf chairmen: Fritz Kreutzinger, David Baldwin and Joe Inabnitt
Golf Registration Participants’ Names:
Don’t miss out! Please register early to reserve your place!
Participants’ Company:
1._____________________________________________________________________Company_________________________________________________________ 2._____________________________________________________________________Company_________________________________________________________ 3._____________________________________________________________________Company_________________________________________________________ 4._____________________________________________________________________Company_________________________________________________________ No. of golfers_____________________ @ $ 95 _______________________________Total Enclosed_____________________________________________________ _____Check or money order included
Fax Registration – CREDIT CARD ONLY to: 219.663.5294 _____Visa _____ MasterCard Card No._________________________________________________Expiration Date________________________________________ Name on Card (please print)_________________________________________________Address of Cardholder___________________________________________ Phone____________________________________________________________Card Holder’s Signature__________________________________________________
SEND ENTRY FEE TO: IIADA • P.O. BOX 1393 • CROWN POINT, IN 46308 • FAX REGISTRATION – CREDIT CARD ONLY TO: 219.663.5294
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IRONWOOD GOLF CLUB • 10955 FALL ROAD • FISHERS, IN
Golf Tournament-Awards Day-Trade Show Excellent sponsorship opportunities are available for our 29th Anniversary Golf Tournament-Awards Day-Trade Show Event on September 11, 2016, at Ironwood Golf Club in Fishers. Market your company and support the Indiana Independent Automobile Dealers Association All sponsors will be recognized at the tournament, on our website (iiada.com) and in our Car Lines publication. CALL 800.310.3112 OR EMAIL IIADA@COMCAST.NET FOR DETAILS
Sponsor Exclusive Opportunity Platinum –
Diamond –
Gold –
Silver –
Bronze –
Sponsorship of dinner and driving range. Outing registration for foursome.
Sponsorship of breakfast. Outing registration for foursome.
Sponsorship of a beverage cart. Outing registration for twosome.
Sponsorship of closest to the pin, longest putt or longest drive.
Sponsorship of golf hole.
$3,000 Includes
YES!
$2,000 Includes
$1,500 Includes
$600 Includes
$300 Includes
WE WANT TO BE A SPONSOR FOR THE IIADA 25TH ANNIVERSARY GOLF TOURNAMENT-AWARDS DAY-TRADE SHOW. PLEASE INDICATE THE SPONSORSHIP OF CHOICE.
_____Platinum $3,000 _____Diamond $2,000 _____Gold $1,500 _____Silver $600 _____Bronze $300 _____Total Payment by ______ Check ______ Visa ______ MasterCard ______ Credit Card Number_________________________________________________________________________ Expiration Date __________________________________ Contact Name:______________________________________________________________________________ Organizational Name:______________________________ Address:_____________________________________________________________________________________________________________________________________ City_____________________________________________________________________State___________________
Zip Code___________________________________
Phone __________________________________________________________________Signature____________________________________________________________ PLEASE SEND OR FAX TO: IIADA • P.O. BOX 1393 • CROWN POINT, IN 46308 • PHONE: 219.661.0287 • FAX: 219.663.5294
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AUGUST 2016 / CAR LINES 17
ASSOCIATION NEWS ///
ASSOCIATION NEWS /
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NIADA CONVENTION RECAP >> Reinvention Creates Success for 70th Annual
NIADA Convention and Expo
FROM THE VENUE TO THE CONTENT , the 2016 NIADA Convention and Expo was all about reinvention. While the theme of “Success By Reinvention” was created with the idea of helping dealers thrive in the rapidly changing used car business, it fit the industry’s biggest event just as perfectly. NIADA celebrated its 70th annual Convention in a new venue – the recently renovated Mirage, which provided a larger yet more intimate setting – as well as a sold-out 60,000-square foot Expo Hall with more than 170 exhibitors and the most extensive dealer education agenda in history, featuring more sessions on more topics than ever before. It also included more attendees than ever before. The 2016 Convention obliterated the event’s attendance record, sailing past the previous mark, set in 2006 at the Las Vegas Hilton, by a staggering 24 percent. The number of dealers and first-time attendees both rose by 30 percent or more. “I got what I came for,” said Sean Schuetz of Klass Motors in Santa Ana, Calif. “I wanted to learn new ways to take my business to the next level, and I’ll be spending the next several months implementing what I learned at my dealership. It was the most informative convention I have attended.” While the education is always the focus, there was, of course, a 18 CAR LINES / AUGUST 2016
lot more happening. Kris “Tanto” Paronto, one of the heroes of the infamous Sept. 11, 2012 terrorist attack on the U.S. diplomatic mission in Benghazi, Libya, told the harrowing story of those 13 hours in a gripping keynote address that left the overflow crowd standing and cheering. Paronto discussed courage and handling adversity and crisis situations, as well as the decision of himself and his CIA Annex security team to speak out about what happened that night in the face of conflicting reports from government and media that told a different story. Attendees also had a chance to celebrate, dance and loosen up at the Cigars and Martinis and Margaritas welcome reception in a lush, tropical setting at poolside, and at a disco-themed closing party following the crowning of Florida’s Scott Lanier as the 2016 National Quality Dealer. In addition to the NQD ceremony – webcast live as always on NIADA.TV – the previous night’s National Leadership Awards Banquet introduced new NIADA president Billy Threadgill as well as honoring NIADA scholarship recipients and the winners of awards for the top performers within the association and the used vehicle industry. “I can honestly say my experience was far above and beyond my expectations,” said Daniel Johnson of LiteHouse Auto in Lakewood, N.Y., a first-time attendee. “We will not miss a Convention from here on out.” The 2017 NIADA Convention and Expo will be back at The Mirage and is scheduled for June 12-15, 2017. Save the date and don’t miss your chance to be part of the used vehicle industry’s biggest event of the year!
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Please call 800-310-3112 for more information on Associate Memberships. 700 Credit Ann Carson 202.422.2351 aclarkA@700credit.com www.700credit.com Affordable Computer Systems Greg Goresen 800.488.9992 acsi@digicove.com www.acsds.com AFC Ryan Lewis 2950 E. Main St. Plainfield, IN 46168 317-453-1172 ryan.lewis@autofinance.com Ally-Smart Auction Jeff Kubicki 317-650-0331 jeffreykubicki@ally.com www.smartauction.biz Alpha Omega Group Brad LeBlanc 513.317.9861 brad@aogllc.com Ashton Agency Inc. Dealer Insurance, Bonds Kathy Alexander 407.678.5900 kalexander@ashtonagency.com Auction Insurance/Robinson Adams Insurance Tom Adams/Debbie Thompson 800-239-1327 www.robinsonadams.com Auto Services Co. Inc. Susan Williams/ Clayton Morgan 800-442-7116 AutoZone Gerry Sutter gerald.sutter@autozone.com 440.263.3389 Black Book National Auto Research Larry Knapp lknapp@blackbookusa.com 800.554.1026 CAR Financial P. O. Box 20229 Knoxville, TN 37940 865.573.3355 Cars.com 175 W. Jackson Blvd., 8th Fl. Chicago, IL 60604 800-298-1460 dealers.cars.com Consolidated Automotive Services Chris Walsh 812.988.8300 www.consolidated autoservices.com Custom Facilities 317.259.0038 lcolle@cfidm.com BuildMyDealership.com CVR-Computerized Vehicle Registration Ron Zimmerman 317.522.6256 Fax: 866.231.4996 rzimmerman@cvrreg.com DealerRater Amy Rosenfield 800.266.9455 amy@dealerrater.com DealerSocket Kym Tran 949.900.0300 x759 ktran@dealersocket.com id.dealersocket.com
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Keystone Insurers Group Lori Simpson 570.473.2146 lsimpson@keystoneinsgrp.com
Dealertrack Diane Zewalk 115 Pohesanut Dr., Ste. 201 Groton, CT 06340 860-448-3177 Fax: 860-448-3187
Law Office of Eugene Mogilevsky LLC 1512 N. Delaware Street Indianapolis, IN 46202 317.331.5648 eugene@egmlegal.com
Dealer Dynamix Joe Ventura info@dealer-dynamix.com 866.970.8929
Lincolnway Insurance Services Greg St. Germain 336 E. Lincoln Hwy. Schererville, IN 46375 219-865-2227 gregg@lincolnwayinsurance.com
Dealer Funding Curt Massey 770.883.3883 cwm@dealerfunding.com www.dealerfunding.com Diversified Vehicle Services Glenna Deviers 317.862.9100 www.diversifiedvehicleservices.com Drive1 USA, Inc. Bruce Norton 1512 W. 96th Ave., Ste. C Crown Point, IN 46307 Phone: 219.670.0542 Email: Bnorton@drive1usa.com Donn Wray, Attorney at Law Katz & Korin PC Phone: 317.464.1100 dwray@katzkorin.com Envirotest Systems Jennifer Kharchaf 1171 Breuckman Dr., Ste. B Crown Point, IN 46307 888-240-1684 Fax: 219-661-8409 indiana@esph.com Floorplan Xpress Jason Burns jburns@floorplanxpress.com 317.719.9276 Frazer Computing Inc. 6196 US Hwy 11, P O Box 569 Canton, NY 13617 888.963.5369 www.frazer.com GoldStar GPS guided by SPIREON Cesar Yepez 949.697.3459 cyepez@spireon.com GWC Warranty Carmie Fruits - Indiana Dealer Consultant PO Box 7900 Wilkes-Barre, PA 18773 317-374-6271 cfruits@gwcwarranty.com www.gwcwarranty.com HBK CPAs & Consultant Rex Collins 330.758.8613 rcollins@hbkcpa.com Heritage Acceptance Corporation Curt Holmes cholmes@hfgnet.com Insurance Professionals-Dealer Specialists Mike Lee 8509 Zephyr Dr. Indianapolis, IN 46217 317-432-1092 Fax: 317-300-0501 teamallenc21@comcast.net Insurance Professionals of New Palestine Network Benefits of Mid America 35 W. Main St. P.O. Box 467 New Palestine, IN 46163 Office: 317-861-4411 800-688-7988 Cell: 317-750-3032
Mighty Auto Parts of Central Indiana David McCabe 317.685.8650 mightyautopartsindy@gmail.com Nationwide Cassel LLC 773.777.7600 www.nac-loans.com NextGear Capital Lori Kahre 1320 City Center Drive Suite 100 Carmel, IN 46033 Phone: 317.571.3845 www.nextgearcapital.com PassTime Jake Frank 303.623.5339 jjones@passtimeusa.com Penn Warranty Corporation Jude Tuma/Michael Roe 1081 Hanover St. Wilkes Barre, PA 18706 800-356-9441 michael.roe@pennwarrantycorp.com www.pennwarrantycorp.com Preferred Warranties, Inc. Gregg Reidenbach/Guy Loeffler 800-548-1121 info@warrantys.com www.warrantys.com Professional Financial Services Matt Reece Phone: 864.237.6090 Matt.Reece@pfs-corp.net Nat Rieder Nat.Rieder@pfs-corp.net Phone: 614.935.9808 Reliable Auto Finance Lester Dean PO Box 9700 Wyoming, Michigan 49509 616.438.3591 Fax: 616-245-5978 lesterd@reliableautofinance.com Somerset CPAs Jane Saxon, CPA 3925 River Crossing Pkwy. Indianapolis, IN 46240 317.472.2183 jsaxon@somersetcpas.com Teipen, Selanders, Poynter & Ayres, P.C. Certified Public Accountants Barnett Sapurstein, CPA 317.598.6700 bsapurstein@teipencpa.com Turner Acceptance Jonathon Turner Phone: 773.290.5007 turneracceptance.com Universal Publications PO Box 628 Plainfield, IN 46168 317.203.5118 publicationsinc.universal@ yahoo.com Verifacto, Inc. Enrique Castiblanco info@verifacto.com 678.916.8311
SAFETY WATCH /
SOME NEW CARS STILL INCLUDE FAULTY AIRBAGS Four Automakers Selling Cars with Defective Airbags
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ASSOCIATE MEMBERS IIADA Associate Membership is available to automotive related businesses.
FOUR AUTOMAKERS – Fiat Chrysler, Mitsubishi, Toyota and Volkswagen – are still selling new vehicles that include the defective Takata airbags responsible for the largest recall in automotive history, a U.S. Senate report said. The vehicles are being sold even though their manufacturers know they will have to be recalled by 2018. During an investigation by Senate Commerce Committee, the companies confirmed they are selling cars equipped with Takata airbags that feature ammonium-nitrate inflators without chemical drying agent, citing engineering and supply challenges to explain why they are still relying on the faulty airbags. The vehicles are legal to sell but must be recalled by 2018. So far, almost 70 million cars in the U.S. and 100 million worldwide have been recalled. The inflators can rupture, causing them to explode and send metal shrapnel into the passenger compartments, and have been linked to 13 deaths and more than 100 injuries. The new vehicles with the Takata airbags include the 2016-2017 Mitsubishi i-MiEV, 2016 Volkswagen CC, 2016 Audi TT and 2017 Audi R8. Toyota and Fiat Chrysler declined to name the new models that use the inflators, but Toyota said it expects to produce about 175,000 of the cars for the U.S. through July 2017.
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AUGUST 2016 / CAR LINES 21
INDUSTRY PERSPECTIVE / BY DALE POLLAK
VIDEO CONTENT is exploding across the Internet, in social media feeds and in social hubs. Given the growing quanitity of visual content in newsfeeds on social media, you can capitalize on video marketing. Even more, you can shoot, edit and produce these videos inexpensively. How is this possible? 1. Write a script. 2. Record a voice over. 3. Use Adobe to create the graphics. 4. Get a video recorder for live video. 5. Use Adobe After Effects for video editing. 6. Add music using sound effects. 7. Publish.
You can also use PowerPoint to video edit if money is a factor and Adobe is out of your budget. Video content marketing allows consumers to satisfy their information and entertainment needs all at once. It’s also a great way for small business owners to compete with larger businesses. Video is unrivaled when it comes to reaching your target audience. YouTube reports over a billion viewers, almost one-third of the people on the Internet every day. Video content is straightforward, quickly shared and easily accessible. It’s easy to create a business channel where all of your video content can be found through an organic search. Since buying a car is a visual experience and your dealership website is primarily based on images, it makes sense to include video content as a way to build relationships with customers. You’ll make personal connections through your website and build prosperous business connections in the process. Some examples for you to consider are: • Stories from customers. • A fictional series. • Personal stories. • Documentary style videos. • An interview. All of these ideas will help your customers connect to your dealership. This can be a fun and exciting way to not only brand your dealership but engage existing and new customers as well. In content video marketing storytelling is crucial. It’s effective because people love stories and they connect to authentic human experience. It creates an emotional investment. Content can be defined as experimental as much of it is based on trial and error. You post content and track it through Google Analytics to see how it’s ranking in the search engines. You want to know how many website visitors are clicking on it and how long they’re staying on the page. Most B2C business owners know content marketing is the most commercially important part of your digital marketing campaign. Why? The object of content marketing is to help and inform consumers. It is to show people your business knows the industry and their expertise is credible. Mastering a video content marketing campaign will help you build relationships with your customers before they step foot on the premises. Content tells people why your products are good and how it benefits them. For dealerships this might include financing options, reliability, and what sets you apart from the competition. Content allows the consumer to view your offerings, and if presented well, compels them to buy from you. Online marketing reports indicate content videos outperform other content types in driving conversions. Videos increase consumers’ understanding of products and services and website visitors are more inclined to purchase a product after watching a video. Moreover, you can expect to see a rise in interactive and personal video content to help turn viewers into leads.
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REFLECTIONS ON MY FIRST NIADA CONVENTION >> Pleasantly Surprised
I HAD THE PRIVILEGE of attending my first National Independent Automobile Dealers Association convention [in June] in Las Vegas. Quite honestly, I wasn’t sure what to expect, but I was pleased to discover many similarities with my experiences at 47 National Automobile Dealers Association conventions for franchise dealers. First, many of the dealers I met are as astute and keen about their business as many franchise dealers. They understand the wholesale and retail marketplaces are changing fast, and they are wisely seeking new ideas, tools and ways to make their businesses more profitable and successful. Second, like many franchise dealers, the independent dealers are deeply committed to their businesses. It’s their money on the line every day. They are hands-on, pragmatic operators, some of whom are likely to pick up a wrench or a chamois cloth to get a car ready for retail. Third, I was struck by the family nature of the event itself. I met dealers, their wives and their children on the NIADA floor – a reminder that many, if not most, dealers of all types are by their nature a family affair. Finally, I was pleased to be a part of Cox Automotive’s impressive presence on the NIADA floor – a testimony to our commitment to serve independent dealers as we collectively transform the way the world buys and sells cars. My hat’s off to NIADA’s Steve Jordan, CEO, and Joe Lescota, director of dealer development, for hosting an enlightening, productive and well-run event. This year’s NIADA convention may have been my first, but it most definitely won’t be my last. Dale Pollak is the founder of vAuto and an executive with Cox Automotive. This column was published on his website, www. dalepollak.com, on June 18.
SAFETY WATCH /
BRIDGESTONE RECALLS TIRES FOR TREADS >> Tread May Separate
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>> Video Outperforms in Driving Conversions
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DOES YOUR CONTENT MARKETING STRATEGY INCLUDE VIDEO?
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ONLINE MARKETING / BY KATHY R. TAFOLLA, LOBEL FINANCIAL
BRIDGESTONE/FIRESTONE North America Tire (Bridgestone) is recalling 32 Firestone FR710 tires, size 205/65R16, and Champion Fuel Fighter tires, sizes 205/65R15 and 205/70R15, manufactured March 27 to April 9. These replacement passenger car tires may have been manufactured with inconsistent rubber coverage over the steel plies. As a result, the tread may separate. A tread separation increases the risk of a crash. Bridgestone will notify the owners who purchased the tires, and dealers will replace the tires, free of charge. The manufacturer has not yet provided a notification schedule.
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