Why MIADA? Page 4 Federal Regulations, Privacy Information and You Page 8 Mobile Commerce Takes Center Stage Page 14
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MAGAZINECONTENTS TS 4 Why MIADA? 8 Federal Regulations, Privacy Information and You 14 Mobile Commerce Takes Center Stage 19 A Failed Social Media Strategy
MIADAEVENTS 5 METRO DETROIT CHAPTER MEETING:
Tuesday, April 12, 7 p.m., American Polish Cultural Center, 2975 E. Maple Road, Troy
5 MID-MICHIGAN CHAPTER MEETING: Contact Leon Fransisco at 517-272-5000.
5 NORTHERN MICHIGAN CHAPTER MEETING: Contact Dennis Craig at 231-938-2627.
5W EST MICHIGAN CHAPTER MEETING:
Monday, April 18, 6:30 p.m., Brann’s Steakhouse, Grand Rapids.
All events are listed online at:
www.miada.org ADVERTISERSINDEX
ADESA ..............................................................7 AutoTrader.com .................................. Back Cover Cars.com ............................................................5 Chase .............................................................15 Greater Kalamazoo Auto Auction ..................... 11 Lakeside Insurance Agency ................................14 Manheim.com ........................... Inside Front Cover Smart Auction .....................................................9 United Acceptance ............................................13 Western General / Protective...... Inside Back Cover
NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION 888 /*"%" $0. t 888 /*"%" 57 NIADA HEADQUARTERS: #308/ #-7% t "3-*/(50/ 59 1)0/& FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF 03 530:!/*"%" $0.
THE DRIVELINE IS A PUBLICATION OF THE MICHIGAN INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION INC., BUT IS ALSO MAILED TO NON-MEMBER DEALERS IN MICHIGAN IN AN EFFORT TO ENCOURAGE THEM TO JOIN AND SUPPORT OUR EFFORTS TO IMPROVE THE PROFIT POTENTIAL FOR THE INDUSTRY. THE DRIVELINE IS PUBLISHED QUARTERLY BY AUTOMOTIVE DEALERS RESOURCE OF MICHIGAN, 55 E LONG LAKE RD. PMB 233, TROY, MI AND THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORATION, 2521 BROWN BLVD., ARLINGTON, TX 76006. PERIODICAL POSTAGE IS PAID AT ARLINGTON TX, AND AT ADDITIONAL OFFICES. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF THE MICHIGAN INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION INC., AUTOMOTIVE DEALERS RESOURCE OF MICHIGAN, OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEMBERS OF THE MICHIGAN OR NATIONAL ASSOCIATIONS DOES NOT CONSTITUTE AN ENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. FOR 30 YEARS, WE HAVE WORKED TO REPRESENT THE INDEPENDENT AUTOMOBILE DEALERS IN MICHIGAN. WE NEED YOUR SUPPORT. PUBLISHER/EDITOR AT LARGE: Nancy R. Chapman FRONT COVER BY Mike Morgan STATE MAGAZINE MGR./SALES Mkhr @kZ__ mkhr9gbZ]Z'\hf EDITOR Fbd^ AZk[hnk faZk[hnk9gbZ]Z'\hf PRODUCTION MGR. CZ\h[ D^kgl cZ\h[9gbZ]Z'\hf ART/PRODUCTION MGR. <akblmr AZrg^l \akblmr9gbZ]Z'\hf PRINTING Gb^fZg Ikbgmbg`
FOR INFORMATION ON HOW TO BECOME A MEMBER PLEASE CONTACT NANCY CHAPMAN AT NCHAPMAN@MIADA.ORG & -0/( -",& 30"% t 1.# TROY, MICHIGAN 48085 PHONE: 248-828-7010 WEB SITE: WWW.MIADA.ORG
The Purpose for Which MIADA was Organized R E P R I N T E D F R O M T H E M I A D A A R T I C L E S O F I N C O R P O R AT I O N , J U N E 2 2 , 19 81
To unite in common organization those engaged in the automobile business and others interested in said business and in the welfare of our State;
To protect and promote the mutual interest of its Members; To formulate and maintain ethical standards for the guidance of its members in their relations with each other and with the public; To advocate necessary public improvements and oppose unnecessary or wasteful expenditure of public funds; To promote and encourage the enactment of just and reasonable laws and ordinances affecting the licensing, regulating and conducting of the automobile business, and to oppose the enactment of those that would be unjust and unreasonable; To correlate the activities of the National Independent Automobile Dealers Association with the Michigan Independent Dealers Association and local dealer Associations in this State.
Board of Directors PRESIDENT Ed Ophoff Ophoff Motor Sales 2921 S. Division Wyoming, MI 49548 ph: 616-452-7761 fax: 616-452-3530 edwoph@aol.com CHAIRMAN OF THE BOARD Art Douglas Jim Douglas Auto Sales 1153 Baldwin Rd. Pontiac, MI 48340 ph: 248-332-8326 fax: 248-332-1323 art@jimdouglasauto sales.com VICE PRESIDENT Jerry Drouillard Autohaus 4411 Delemere, Royal Oak, MI 48073 48-549-3636 fax: 248-549-7805, gdro999@hotmail.com SECRETARY Fred Wagner Centerline Auto Financing 25637 Van Dyke, Centerline MI 48015 ph: 586-755-3755 wagnerfw48@yahoo.com
DIRECTORS: Ray Campise Certified Motors 23509 Little Mack Ave. St. Clair Shores, MI 48080 ph: 586.775.7000 fax: 586.775.7003 sales.cmotors@gmail.com Nigel Fox Sovereign Auto Purchasing 730 N Main Flushing, MI 48433 ph: 810-487-2020 fax: 810-487-2022 nkfox@aol.com Tony LoBretto Alamo Valley Auto Sales 6100 West D Avenue Kalamazoo, MI 49009; ph: 269-344-8250 fax: 269-344-8231 alamovalley@gmail.com Rick Rynberg Rynbergâ&#x20AC;&#x2122;s Car Company 3880 Holton Rd. Muskegon, MI 49445 ph: 231-744-1441 fax: 231-744-6813 Debbie Richards Ellis Richards Motors 24900 Gratiot Eastpointe, MI 48021 ph: 586-778-0606 fax: 586-778-0215 lilellis@ameritech.net.
Ted Cooper Genesys Systems 360 E. Maple Rd. Troy, MI 48083 ph: 248-597-1003 fax: 248-597-1012 ted@gensystems.com
Chris Connelly Connelly Car Company 7556 North US-27 St Johns, MI 48879, ph: 989-224-0068 fax: 989-224-1898 hubcapsccc@voyager.net
Jetre Ormsbee Ormsbee Implement Co. Inc. 241 M-68 Hwy East, Afton, MI 49705, ph: 231-238-9928 fax: 231-238-9938
Mike Tokie Jackâ&#x20AC;&#x2122;s Auto Service PO Box 52 Grawn, MI 49637 ph: 231-218-1978 fax: 231-947-7438, jacksautoservice@ gmail.com
Jeffrey Braatz Paradise Motors Inc. 8212 W. Saginaw Hwy. Lansing, MI 48917 ph: 517-627-3900 fax:517-887-3920 jeffbraatz@yahoo.com Dennis Craig Instant Car Credit P.O. Box 146 Acme, MI 49610 ph: 231-938-2627 fax: 231-938-0399 iccinc@charter.net Leon Fransisco Fransisco Automotive Enterprises 1835 E. Jolly Road Lansing, MI 48910 ph: 517-272-5000 fax: 517-887-7268 leon@frognet.net
Robert VanCoillie Vanâ&#x20AC;&#x2122;s Motor Sales, Inc. 1507 Garfield Rd. Traverse City, MI 49686, ph: 231-995-0614 fax: 231-995-0613 vansmotors@bignet north.net Jim VerWys Superior Automotive 1100 S. Washington Ave. Holland, MI 49423 ph: 616-396-7600 sales@superiorautomotivedeals. com
&9&$65*7& %*3&$503 Nancy R. Chapman ADR of Michigan 55 E. Long Lake Rd. PMB 233 Troy, MI 48085 ph: 248-828-7011 fax: 248-828-7012 nancy.chapman@ buyadr.com
CHECK With Bond Source Insurance Agency For Your Bonds r Quick Turnaround Service within Michigan r Easy One Page Application r No Financial Statements Required in Most Cases r Checks and Credit Cards Accepted r Lost Title Bond Service r High Risk Bonding Sources Available
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Dealer Bond Rates MI MVD $10,000 Bond: MIADA Member: $100/1 yr; $250/3 yr (for qualifying dealers)
FOR INFORMATION ON THESE AND OTHER BONDS: Apply over the phone at: 888-855-0100 * fax: 888-855-7111 or email: nchapman@aec-mgmt.com 3
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DRIVELINE
It’s really not a question whether we should support MIADA, it’s a hard fact that we must! In these days, the used car market is changing constantly.
Why MIADA?
More new car dealers are becoming used car specialists. It’s through our tutoring that they have learned that there is a great deal of income to be made in used car sales. As small independent “Mom and Pop” used car dealers throughout the State of Michigan, the way to survive is through “togetherness.” I believe, in these times, it is imperative that all used car dealers get involved with MIADA. We need your support, your ideas and your good sound leadership through the coming years. Currently, we have some of the finest leadership we could have in MIADA. However, we also need ideas from used car dealers up and down the State. We need a constant form of education. We must learn that the
little “Mom and Pop” used car lot can no longer survive with just one source of income. I believe in this day and age, it is going to take the average used car lot at least two or three sources of income. This can come in many ways, such as financing your own cars. Not only is this a great source of income, it also brings more customers to your lot. Another way would be to own your own small rental company or repair facility. There are many ways of diversifying. There are many dealers who have other ideas and we need you to share them. We need you to come to our meetings or send us your ideas for publication in this newsletter. From this, we can all get a lot stronger and still grow together. The day of “Mom and Pop” used car lot is not finished. A strong MIADA in numbers and actively participating in this organization can be the answer.
FAMILY AFFAIR
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The following comment seems to express what we here at MIADA are feeling: “MIADA is a dad’s club. It’s for older people. Besides, he doesn’t want me there, away from the store.” This is the response we have heard when we ask whether young, second-generation dealers will be attending MIADA functions. We suspect these feelings are not unique. Please bring your successor family members or other successor with you to MIADA functions. It will be a growth experience for them and be good for everyone’s health and outlook, and take only a few hours away from your dealership. MIADA is not a club! It is a serious business by, for and with the present and future generations. If the newer people don’t take part in MIADA today, they will not be knowledgeable in the future.
MEMBERSHIP
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Reprinted from MIADA Newsletter, February/March 1988
V Reprinted from the MIADA Newsletter, Editor’s Comments, February/March 1988.
REPRINTED FROM MIADA NEWSLETTER, DECEMBER1987/JANUARY 1988
SOME MEMBERS KEEP THEIR ORGANIZATION STRONG, WHILE OTHERS JOIN AND JUST BELONG. SOME DIG RIGHT IN, SOME SERVE WITH PRIDE, SOME GO ALONG JUST FOR THE RIDE. SOME ALWAYS VOLUNTEER TO DO THEIR SHARE, SOME LAY BACK AND JUST DON’T CARE. AT MEETING TIME THE SAME ALWAYS SHOW, WHILE THERE ARE THOSE WHO NEVER GO. SOME ARE ALWAYS GLAD TO PAY THEIR DUES AHEAD, WHILE SOME GET BEHIND FOR MONTHS INSTEAD. SOME DO THEIR BEST, SOME BUILD, SOME MAKE, SOME NEVER GIVE, BUT ALWAYS TAKE. SOME DRAG, SOME PULL, SOME DON’T, SOME DO. STOP AND CONSIDER, WHICH ONE ARE YOU?
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ODOMETER TAMPERING GETS STIFFEST SENTENCE EVER! Under the current 10-year old federal law, odometer tampering is a felony violation and is subject to a $10,000 fine along with a possible one year plus one day jail sentence, upon conviction for each separate offense Washington, D.C. – The most severe sentence and highest dollar fine ever handed down in the history of the federal government’s odometer anti-tampering law was recently levied against a Georgia used auto dealer.
Homer McDonald, a prominent wholesale used auto dealer in Cornelia, Ga., was sentenced to serve 11 years in a federal prison and was fined $193,000. This was a result of his conviction of 95 criminal counts of odometer tampering, according to Don Randall, the Automotive Service Association’s Washington, D.C.-
based legal representative. McDonald’s used vehicle corporation also was fined $158,000 while two company employees, also convicted of odometer tampering, were each given four-year jail sentences. “This conviction is the result of the most extensive investigation of odometer tampering ever conducted by the federal government,” said one National Highway Traffic Administration official. Under the current 10-year old federal law, odometer tampering is a felony violation and is subject to a $10,000
fine along with a possible one year plus one day jail sentence, upon conviction for each separate offense, Randall told ABRN. True mileage is an important factor in establishing the selling price of a used vehicle. Odometer tampering costs the American public more than two billion dollars a year, the NHTA estimates. “I’ve detected an increase in enforcement activities by the federal government recently against odometer fraud,” observed Randall.
V Reprinted from MIADA Newsletter, December 1987/January 1988
WE GET LETTERS
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we get letters
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Federal Regulations, Privacy Information and You ADR does extensive research and analysis on issues of concern to auto dealers. We do not offer legal advice. This particular report deals with
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LET US TAKE A MOMENT TO SAY IN SPITE OF WHAT ONE MAY UNDERSTAND OF THE RULES, AUTO DEALERS ARE COVERED WHEN THEY SELL VEHICLES WHETHER CASH OR CREDIT.]
recent federal regulation implementation deadlines. An aggregate of federal regulations govern the collection, use, and safeguarding of personal non-public customer information. Each set of regulations, often termed a rule, derives from a particular Congressional act or executive order enacted for a specific purpose. While each act or order may have been developed independently, once incorporated into the Code of Federal Regulations, it becomes dependent on existing regulations, often relying upon definitions or language in other areas. Consequently, when interpreting any single rule, you must view the body of regulations as a whole and consider the impact other rules have on your rule of interest. At best, it can be a time-consuming process to extract the information you need and determine its applicability to you as an auto dealer. Since your business is selling vehicles and ours is helping you comply with the law, we’re glad to provide you with the following summary of laws and regulations concerning privacy information. We’ll give a short history of each, show their relationship to each other, and explain their relevance to you, the auto dealer.
Privacy Act We’ll begin with the Privacy Act itself, formally titled the Financial Services Modernization Act of 1999. Also known as the Gramm-Leach-Bliley (GLB) Act, it opened the way for financial services companies such as banks, insurance companies, and stock brokerage companies to merge. Since Congress then recognized these newly merged institutions might have unlimited access to and use of their customers’ consolidated personal information, the act included protection for the consumer. The Federal Trade Commission’s implementation of this act with regards to consumer privacy issues applies to businesses under their jurisdiction who are engaged in financial activities as described in the Bank Holding Company Act of 1956. Both the Privacy rule and the Safeguards Rule derive from the GLB. The Privacy Rule, as implemented by the FTC, requires financial institutions – including auto dealers – to provide the customer written notice of the kinds of information they collect, what they use it for, how they protect it, and to provide the customer an option to restrict sharing that information in some cases. The Safeguards Rule, also implemented by the FTC, requires the same financial institutions to develop, implement, and maintain a comprehensive information security program. The program must be in written format and must contain administrative, technical, and physical safeguards appropriate to your business. In 2006, Congress enacted the Financial Services
Regulatory Relief Act to provide regulatory relief and improve productivity for insured depository institutions, and for other purposes. This Act amended the GLB Act by directing responsible regulatory Agencies to “…jointly develop a model form which may be used, at the option of the financial institution, for the provision of disclosures under this section.” This amendment resulted in the new privacy notice you began using in January.
Executive Order 13224 In the wake of the terrorist attacks on Sept. 11, 2001, President Bush signed into law Executive Order 13224. It declared all properties of specifically “listed” persons to be blocked and forbade any U.S. person from engaging in any transaction or dealing of those assets. Accordingly, auto dealers are prohibited from selling a vehicle to or buying a vehicle from any person or entity included among those listed persons. To insure compliance with this order, auto dealers must do two things – first, identify the individual you are dealing with. To do this, you should collect sufficient identifying information, such as name, address, date of birth, social security number or tax identification number, and/or passport number. Second, you must determine whether that individual is listed. The Office of Foreign Assets Control (OFAC) in the Treasury Department maintains the list of persons (termed Specially Designated Nationals or SDNs) whose assets are blocked. You can access the list thru the MIADA website at www.miada.org. Select menu item Resources, then Blocked Persons List. The complete listing of SDNs is available in either PDF or plain text format. Be aware that penalties for violation of this order are severe. Violators may be subject to civil fines as well as criminal prosecution and multi-year imprisonment.
USA Patriot Act As the war on terror intensified after 9/11, Congress passed the USA PATRIOT Act. The formal title is “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.” As the name implies, the act’s intention was to afford law enforcement agencies the authority necessary to combat terrorism. A variety of existing acts were impacted, including the Money Laundering Control Act of 1986 and the Bank Secrecy Act (BSA). For purposes of the Patriot Act, a variety of businesses are considered financial institutions, including a business engaged in vehicle sales, including automobile, airplane, and boat sales, as well as travel agencies, insurance companies, telegraph companies, the U.S. Postal Service and casinos. As originally written, all defined financial institutions including auto dealers would have been subject to the act’s requirements to implement anti-money CONTINUED ON PAGE 10
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laundering programs and verification of identification procedures. As of this date, however, vehicle sellers and various others are temporarily exempted from the anti-money laundering program requirements. In addition, regulations governing verification of identification procedures have not yet been extended to vehicle sellers. Vehicle sellers are not exempted, however, from the act’s requirements implemented as information sharing between federal law enforcement agencies and financial institutions. In short, auto dealers must be prepared to respond to requests for customer information from Financial Crimes Enforcement Network (FinCEN), a Treasury Department agency. Upon written notification from FinCEN, you must search your customer records for accounts and transactions involving specified individuals or entities. Your records must have sufficient identifying information for you to distinguish between individuals of same or similar names, typically by referring to the individual’s date of birth, address, Social Security number, tax identification number and passport number, if applicable. If you determine you’ve transacted business with the specified individual, you are required to respond in a prescribed and timely manner to FinCEN, providing them with identifying account information.
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ENTER SITE AND CLICK ON NEW PROGRAMS
The Fair Credit Reporting Act (FCRA), passed in 1970, was enacted to promote the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. The FCRA was subsequently amended by the Fair and Accurate Credit Transactions Act (FACTA) of 2003. FACTA added several new provisions to the FCRA dealing with the accuracy and privacy of consumer credit information. The regulations known as the Red Flags Rule and the Address Discrepancies Rule both derive from FACTA. The Address Discrepancies Rule is outside the scope of this article and will be addressed at another time. The Red Flags Rule requires certain businesses and organizations to implement a written identity theft prevention program. The program must be designed to detect the warning signs of identity theft as well as define procedures to prevent the crime and mitigate the damage. As implemented by the FTC, the Red Flags Rule became effective Jan. 1 and applies to financial institutions and creditors under its jurisdiction holding covered accounts. Additional information regarding the rule and its relevancy to you as an auto dealer can be found in separate articles in this publication. While these acts all began as separate laws, the implementing rules regarding consumers’ nonpublic personal information in many cases overlap and must be considered in relation to the whole. And the intent of the whole is for businesses to appropriately handle and adequately protect that information. Regardless of whether or not you consider your business to be a financial institution, you are collecting sensitive information any time you sell a vehicle, whether it is a cash or credit deal. As mentioned above, you are required by Executive Order 13224 and by the Patriot Act to collect and verify personal identity information from your customers. This information will necessarily include items such as name, date of birth, address, and Social Security number or taxpayer ID number. Thus, because your dealership uses, collects and is in possession of such information, your business and you personally are liable for the proper handling and protection of that information. Suffice it to say, it’s not our intent to force any dealer to comply with these rules. But we believe it’s the association’s responsibility to provide an option for dealers to comply in the simplest, most reasonable way. We are not attorneys, but we do offer solutions designed to free the auto dealer from the quagmire of government regulations by creating for you a bona fide error defense we believe will afford the dealer protection. For information about the Privacy Notice, Risk-Based Pricing Notice and the Red Flags Program, visit www.buyadr.com or contact ADR of Michigan at 800-364-8833 or nancy.chapman@buyadr.com.
BELOW
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Fair and Accurate Credit Transactions Act (FACTA)
ARE SOME HELPFUL RESEARCH LINKS:
Federal Trade Commission: www.FTC.gov Treasury Department: www. Treasury.gov Government Printing Office: www.GPO.gov (contains links to the Code of Federal Regulations, the Federal Register, and the United States Code)
This report is not legal advice. You are urged to contact legal counsel for its application to your operation.
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SALES
ONLINE SALE S SUCCE S S: LET YOUR LISTINGS DO THE TALKING Anyone can start selling cars using the Internet, but those who are most successful give buyers the right information during the shopping process. Sellers can break through
the clutter of online used car sales by giving consumers photos, compelling descriptions and vehicle history while they shop. If you’re not already online, you need to be. Eighty percent of consumers today use the Internet to help find their next car. Furthermore, shoppers visit less than two dealerships before deciding to buy – conducting research online before visiting any lot. Typically, they start by visiting third-party automalls like AutoTrader.com and Cars. com. A quick search can return hundreds of listings for vehicles similar in style and price. Since you can’t sell online shoppers face-toface, your listings have to do the talking. Focus your marketing efforts on two lead-generating areas that attract the most attention: Search Results Pages (SRPs) and Vehicle Details Pages (VDPs). The SRPs and VDPs are the most
prominent places to communicate the value of your used car inventory online. When shoppers click on SRPs, they go to VDPs to browse additional photos, read about features, see the vehicle history and locate the seller. Getting shoppers to click on SRP listings generates more leads from your VDPs. The vehicle description you provide on SRPs is your first opportunity to reach shoppers. Try to describe the car’s benefits as if shoppers were standing in front of you. Be brief but informative. For example, you might say, “this van comfortably fits up to eight people” or, “we offer low financing” or, “includes Free Carfax Vehicle History Report.” You don’t want potential customers glancing past your listings because they didn’t peak their interest. Photos are another way seasoned online sellers grab the attention of used car shoppers on SRPs. Use the best image as the SRP ‘thumbnail’ image on SRPs and save detailed images for the VDP. You can build confidence with online
consumers by linking Carfax Reports to SRP and VDP listings. Shoppers are more likely to buy from open and up-front sellers and your listings will stand out even more. To connect with online shoppers, you need to think like them. By giving buyers relevant information to help them make an educated decision, you can compete online and sell cars faster. Top dealers consistently get more leads because they pay attention to how their car listings appeal to online consumers. Make your SRPs stand out in the crowded online marketplace and more shoppers will click through to your VDPs. More clicks equals more leads and ultimately, more sales. BY DALE PO LLAK AN D LAN CE VICKERY
Dale Pollak, founder of vAuto, is a highly sought-after authority on maximizing profits from used vehicle operations, working extensively with Dealer 20 Groups, Dealer Associations and large dealer enterprises across the country. In addition to his regular contributions to auto industry publications like Dealer Magazine, Pollak is a published author of 2 books, Velocity: From the Front Line to the Bottom Line and Velocity 2.0: Paint, Pixels and Profitability. Lance Vickery is director of dealer business at Carfax and has spent more than 25 years in the auto industry.
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DRIVELINE
FEBRUARY 2011
FEDERAL ADVOCATES LOBBYING REPORT As part of the review, GAO is speaking with all of the stakeholders in the process such as dealerships and dealership representatives. 12th Congress Issues On Feb. 3, Federal Advocates met with NADA to discuss upcoming issues for the 112th Congress and various pending matters. As we jointly see it, the issues for Congress are fuel economy and green gas within the context of energy legislation, the Consumer Financial Protection Bureau and its mandates, the Toyota Safety Bill (which we both believe is dead), possible Congressional oversight that may impact the industry and the National Highway Traffic Safety Administration reauthorization effort (a priority of Sen. Jay Rockefeller, D-WV, who’s chairman of the Senate Commerce Committee). Harrington also mentioned a General Accounting Office study (see separate heading) which Rep. Ed Towns, D-NY, and chairman of the 111th Congress House Governmental Affairs Committee, requested on section 310 of the Senate Toyota bill. It would’ve required dealers to provide info to buyers on a vehicle’s history. Lastly, we both agreed it’s important to continue monitoring relevant activity of the FTC.
SBA Floorplan Financing Program The federal government relaunched its suspended floorplan financing program for small dealerships, this time with loan limits of $5 million rather than $2 million. The Small Business Administration’s new rules, which addressed nuts-and-bolts questions of how the financing will work, were published online in the Federal Register on Feb. 8. The Obama administration began a pilot floorplan program in May 2009 during the depths of the recession, but it never got off the ground because of banks’ reluctance to extend credit. A law enacted in September 2010 increased the loan limits and in October, the SBA adopted a rule expanding eligibility for the program to the majority of dealerships. The SBA also suspended the program in October and has been working since with lenders in an attempt to increase their participation. The pilot program will continue through September 2013. To address various issues related to the program, a conference call was held with Whann, and the SBA’s Steven Smits, associate administrator, and Patrick Kelley, senior advisor, Office of Capital Access.
Consumer Financial Protection Bureau Meetings
Department of Defense Pam McClelland, a DOD senior program analyst, has taken over for Dave Julian and Frank Emery in the Office of Military Community and Family Planning in the Office of the Deputy Undersecretary of Defense. Per a conversation with her on Feb. 15, NIADA will send information to her, at her request, on how the association can assist service members in purchasing pre-owned vehicles. Pending her review, a meeting or conference call will be scheduled with Whann.
On March 4, NIADA General Counsel Keith Whann and Federal Advocates will be meeting with Holly Petraeus, director of the Consumer Financial Protection Bureau’s Office of Service Member Affairs, to introduce NIADA and to discuss various auto industry issues related to the newlycreated CFPB. In addition, a meeting request is pending with Richard Cordray, CFPB general counsel, to discuss various consumer auto issues and the soon-to-be appointed Consumer Advisory Board.
GAO Study The GAO review was requested by Rep. Towns earlier last year that focused on the auto safety recall process. As part of the review, GAO is speaking with all of the stakeholders in the process such as dealerships and dealership representatives. GAO’s audit work is nearing its completion and GAO is due to issue the report on June 15. Pending that, Jim Leonard, an analyst with the GAO’s Physical Infrastructure Team, has discussed with NIADA its views on the issue and the role of pre-owned vehicle dealerships. NIADA’s Mike Linn and Whann discussed this issue with Jim Leonard and other analysts of the GAO earlier this month. White House Meeting Scheduled A March 4 meeting with Steve Croley, special assistant to the President for Justice and Regulatory Policy in the Office of Domestic Policy, has been scheduled to introduce the association to the administration and to provide a briefing on its views on auto consumer issues. FEDERAL ADVOCATES is NIADA’s governmental advocacy partner. To read past lobbying reports, visit www.niada.com/legislative_and_legal.php
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APPS
Going Mobile in Your Dealership One of the new keys to the success of How can mobile apps streamline your business? your business is your smart phone. You can Mobile browser-based tools provide
operate your dealership on-the-go, making fast, informed decisions that will ultimately improve your bottom line. More than 440,000 mobile sites and over 500,000 mobile apps exist today, including a growing number of auto-industry related apps. It may seem daunting to integrate this emerging technology into your business, but these tools are a must-have for both acquisition and retail.
What are ‘mobile apps’ and how do they help dealers? An app is a software application that helps people accomplish tasks faster. Among other things, an app can use the hard drive of the mobile device to store data for faster recall and operation, perform calculations, access hardware features such as camera and GPS – and all without an Internet connection. At its core, the Internet revolution was about how technology harnessed the power of information to generate efficiencies, and this is exactly the opportunity mobile apps offer to dealerships today – providing information onthe-go and tying it all together to take action.
due to rising demand, so the competition for quality units is getting tighter. Think about the top concerns your customers have when shopping for a used car: previous damage, maintenance, ownership history, and of course, price. Tools like Carfax Vehicle History Reports are readily-available through various mobile devices to verify this important information and bid with confidence. Having your mobile device handy helps you tie it all together quickly and successfully acquire the right cars for your lot. Today’s mobile devices provide access to information that brings transparency and process effi ciency to dealers. The possibilities mobile is opening up for our industry are truly extraordinary – and in the current economic climate, leveraging new and user-friendly technology is key to moving more cars and saving money in the process.
dealerships with more on-the-go visibility but lack a built-in ability to act in realtime on information organically across the dealership. But, just as a mobile app enables on-the-go stock trading, for example, an app such as eCarList’s ‘True Target Mobile’ allows dealerships to take a massive dataset and a complex, multi-step, -vendor and -personnel process and make it all work from a single handheld device. The ‘True Target Mobile’ app gives dealerships mobile access to pricing data from multiple books, current data from top online marketplaces and the ability to filter, organize and view the data geographically for territory (including vehicle pricing from competitive dealerships). Other functions include VIN scans, taking/adding/removing photos, integrating Carfax Vehicle History Reports and sharing appraisals and pricinsg with other BY LEN CRITCH ER AN D LANCE VICKERY mobile devices. Len Critcher is CEO of eCarList, provider of award-winning Are there other benefits to going mobile? inventory management and online marketing solutions that On the acquisition side, smart phones make it easy for dealerships to fully own and control the merchandising process through one unified platform. provide access to information you need to vehicle Lance Vickery is director of dealer business at Carfax and has stock your lot with cars that customers want. It’s spent more than 25 years in the auto industry. no secret that the used car supply is decreasing
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MOBILE COMMERCE
WITH CONSUMERS LOOKING FOR VEHICLES, PARTS AND ACCES SORIES
This past holiday season, surveys and statistics showed what many analysts and industry observers were thinking: mobile commerce is growing by leaps and bounds, and every industry is in on the trend, including automotive.
In 2011, smartphones are forecasted to account for half of the mobile phone market, according to The Nielsen Co. On top of that, an ABI Research report says mobile online shopping will generate $119 billion in sales by 2015, accounting for 8 percent of the e-commerce market. When car dealers make it easy for their business to be found through a mobile web browser, loyalty campaigns, marketing initiatives, text promotions and sales
can attract and retain customers. What are consumers browsing with their smart phones? The same types of items they started browsing on computers: researching purchase decisions, cost comparisons and finding the location of physical items. Recently, eBay reported a substantial increase in mobile traffic, where sales more than tripled in 2010 to near $2 billion in gross merchandise volume. Last year, vehicle purchases led all categories on eBay mobile applications in terms of GMV, while parts and accessories were number two in terms of the total number of items purchased. Dealers know when they have a physi-
cal lot, customers still come to kick the tires when the sales office is closed. Now, today’s consumer might still come to the lot, but he or she will also pull out a smart phone, check the hours of the dealership and research the same make and model for competitive pricing. The same thing is happening even if the consumer doesn’t drive to a physical lot. A consumer may be in his garage working on a car and need to find a part or accessory. Instead of going inside and turning on the computer, he’s browsing his smart phone to find the part, price and local availability. Just as e-commerce has completely changed the way we do business, wireless devices and smartphones are again altering what we know about consumers’ purchasing behaviors. Seeing similarities in mobile commerce and e-commerce, auto dealers ask themselves a familiar question: would anyone really buy a car from their smart phone? In 2010, more than $118 million in car and truck purchases were made via the eBay mobile application – more than 12,600 vehicles were sold. Parts were the second biggest category in mobile last year, with more than 911,722 parts purchased, and more than $60 million in sales. For independent dealers, mobile applications and mobile commerce are the must-have digital tools of 2011. With smartphones capable of surfing, downloading apps and co nnecting with coworkers and friends in an instant, researching and shopping for vehicles, parts and services is a natural extension. For example, a business traveler waiting at an airport may use that downtime to look for a needed part for his car or browse available vehicles for a new truck. If an independent dealer’s inventory is not readily available on a mobile app, chances are there’s an entire customer segment that may not see what’s for sale. A recent ForeSee Results survey found 30 percent of consumers used a mobile phone to research products on the Internet, compared with 11 percent in 2009.
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FOR DEALERS, HAVING PARTS, ACCESSORIES AND VEHICLES AT A CONSUMER’S FINGERTIPS IS AN IDEAL WAY TO EXTEND MARKETING AND SALES WITHOUT A LOT OF DEVELOPMENT AND TECHNICAL EFFORT. BY CLAYTO N STAN FI ELD, EBAY MOTO RS
Those making a purchase through a mobile phone increased from 2 percent in 2009 to 11 percent in 2010. For example, Tilo Steurer, founder and owner of Eurocar, the West Coast’s largest independent dealership of its kind, sells and buys vehicles and regularly uses eBay’s mobile app to buy cars, parts and accessories. “I purchase anywhere from five to 10 cars every month, most of the time through the eBay mobile app,” Steurer said. He also uses the eBay mobile app to keep track of his business while not in the office. With any form of sales – online, mobile or in-store – customers consider the credibility of the seller and business before making a purchase. Building that credibility takes consistent communication, which is made easier when dealers can keep in touch through mobile and online sources. “Communication is very important, especially when making an expensive online purchase such as a luxury car,” Steurer said. “With the eBay mobile app, I can respond more quickly to customer questions, which builds credibility and increases the opportunity for a sale.” To accommodate this growing trend, eBay Motors is launching a mobile app that will provide a customizable buying experience optimized for vehicles, parts and accessories, as well as unique social and community features for the enthusiast. Features include VIN scanning and a virtual garage to give enthusiasts personalized information. After searching for a vehicle, users can share it with friends and social networks or ask the seller a question. Users can create “car cards” for their vehicles which display photos and stats about the vehicle and can be used in searches for parts and accessories. On the garage tab, consumers can input and store the vehicles they own or scan the VIN barcode with the iPhone’s camera to populate information. In the garage, car owners can create to-do list for vehicle projects, store custom parts
searches and share the garage with their social network. For dealers, having parts, accessories and vehicles at a consumer’s fingertips is an ideal way to extend marketing and sales without a lot of development and technical effort. Mobile commerce is still in its infancy but is growing at a faster pace than e-commerce. With the Internet available wherever consumers are with their smart phones, it’s only a matter of time before mobile commerce becomes a dominant form of purchasing. Because of the similarities to e-commerce, consumers are quickly adopting m-commerce and expecting businesses to be on board.
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NIADA/Manheim Community Service Award
Product Discounts for NIADA Members NIADA members can save up to 29 percent on select FedEx® shipping services. For more information or to enroll in this program, visit www.1800members.com/ niada or call 800-636-2377 (8 a.m.–6 p.m. Eastern, Mon.-Fri.). Renting a car just became easier and economical with the new Thrifty Car Rental Discount Program for NIADA members. Visit www.thrifty.com/?iata=00227148& PromotionCode=NIADA to receive a 5 percent discount off Thrifty’s already low rates anywhere or any size vehicle in the U.S. A 24-hour advance reservation is required and reservations can only be made through this URL or via the link on the NIADA website. Offer is valid for travel until Dec. 31, 2011. AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the United States with over 4,350 stores across 48 states, the District of Columbia and Puerto Rico. NIADA members have access to AutoZone’s “hot-shot” delivery program including discounts on more than 750,000 product level SKUs in over 70 distinct product categories. For more information, view www.niada.com/dealers_edge.php
Manheim, the world’s largest provider of vehicle remarketing services, cares about its employees, the environment and the communities it serves. From fundraising drives
and tutoring kids after school to supporting long-term conservation efforts, Manheim and its employees are dedicated to giving back to their communities and know independent vehicle dealerships across the country share in this commitment. For the first time this year, Manheim is recognizing and honoring those dealerships by awarding the 2011 National Manheim Community Service Award at the 65th NIADA Annual Convention and Expo. For more information, contact Georgia Brown, NIADA director of education, at 817-6403838 or download the nomination form at niada.com (click on the Manheim Dealers Edge link under the Services tab).
Plans to cover groups and individuals. A promise to cover everyone. We have a broad range of group plan options, including PPO, Flexible Blue (HSA), HMO, Dental and Vision. We also offer affordable individual health care for you and your family, at any stage of your life. Blues group and individual members have unparalleled statewide and nationwide access to the doctors and hospitals they need. We accept everyone, regardless of medical condition and will never drop your employees for health reasons. Our nonprofit mission means you can trust us to put your needs first instead of paying dividends to stockholders. We reinvest in health care for Michigan. Because Michigan is our home. For more information, contact: Michigan Independent Automobile Dealers Association 248-828-7010 bcbsm.com
MiBCN.com
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A FA I L E D S O C I A L M E D I A S T R AT E GY Itâ&#x20AC;&#x2122;s often hard to say what a companyâ&#x20AC;&#x2122;s goal is when using social media. We can assume all day long the underlying goal is to
make money. However, its actual goal may be to increase product awareness or find out what people really think about the business itself. But in one case, Iâ&#x20AC;&#x2122;d like to assume an auto dealership in Tucson, Arizona, thought it was their last chance at survival. I donâ&#x20AC;&#x2122;t quite remember the day when this dealer started following me, but I decided it would be wise to follow them back. I kept a close eye on what it was doing and saying.  The all-too-often tweet looked like this: â&#x20AC;&#x153;If you own a Suzuki Equator <Your Town>, <company name> wants to be your one stop automotive destination. Visit our FB page.â&#x20AC;? And that was it. Minus the occasional video post, there was nothing but that same format tweet. And the video posts were only URLs. There was no information. This is all I saw for months... and then: the dealership was in trouble. It announced it would be closing the doors. A week of tweets proclaiming the last chance to get 33 percent off all new inventory was all that remained. One thing Iâ&#x20AC;&#x2122;d like to point out is I have no idea why it was closing. The owner couldâ&#x20AC;&#x2122;ve had a medical reason or just wanted to retire. But as I have seen many times, auto dealers tend to have this notion social media is an overnight fix to their declining sales.Â
Please understand if you build a social media strategy, youâ&#x20AC;&#x2122;re only building a â&#x20AC;&#x153;how to talk with peopleâ&#x20AC;? strategy. Social media is not an overnight fix, itâ&#x20AC;&#x2122;s a way to grow relationships. Donâ&#x20AC;&#x2122;t believe me? KLM (the Dutch airline owned by Air FranceKLM Group) decided it needed to take a different approach with social media. It wanted to get social. So at its Amsterdam Airport Schiphol hub, KLM started searching for people who were tweeting about flying on KLM and being at the airport. The airline would research the person using Facebook, buy a gift that matched the person and then hand-deliver it. Now thatâ&#x20AC;&#x2122;s being social. Itâ&#x20AC;&#x2122;s a strategy that will actually help create repeat customers. If KLM had just constantly tweeted about how great their flights were, nothing would ever have happened. Oh, and the impact had? KLM generated more than a million impressions. LESSON LEARNED: social media requires conversations with people, not your normal marketing hoopla. Would you like to view KLMâ&#x20AC;&#x2122;s video about its social media efforts? Visit www.youtube.com/watch?v=pqHWAE8GDEk.
By Mike Morgan, ADR Consulting LLC, t NJLF NPSHBO!CVZBES DPN
How You Fail With Social Media Letâ&#x20AC;&#x2122;s assume for a moment social media was the ownerâ&#x20AC;&#x2122;s plan to save his dealership. Where did he go wrong? The key problem people face with social media is they forget itâ&#x20AC;&#x2122;s Social. You have to connect and talk with people. Imagine you are at a party. Everyone is mingling and chatting about life. There are conversations about business going on, but thatâ&#x20AC;&#x2122;s not the main focus. And then Steve shows up. Steve stands in the middle of the room and starts shouting, â&#x20AC;&#x153;Now in stock at Steveâ&#x20AC;&#x2122;s Auto Sales: a new Ford Taurus only $23,995!â&#x20AC;? The room stops. Everyone looks at Steve for a moment, but nobody has anything to say in response. The masses go back to their conversations. Steve thinks he made an impact. So, he waits a few minutes and then screams it again. This time everyone just ignores it. And so it continues for the rest of the party. If you were attending that party, would Steve have annoyed you? You bet he would have driven me nuts. Thereâ&#x20AC;&#x2122;s a good chance I would have left the party. So when this dealership continued to keep posting the same thing over and over, I began to ignore it. Therefore, its social media strategy failed it.
Social Media Shouldnâ&#x20AC;&#x2122;t Be a Strategy When kings and queens ruled the world, their children were married for strategic reasons. Every relationship was part of a strategy. As business owners, we tend to think of relationships the same way, thinking â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ll play golf at certain country club so I can meet the right people,â&#x20AC;? or â&#x20AC;&#x153;I go to a specific church so I can visit with people who can afford the cars I sell.â&#x20AC;? We do it all the time, but people can see through such things. Social media shouldnâ&#x20AC;&#x2122;t be a strategy; it should be a meeting place to learn about your customers, find out how you can help them and build a transparent business people can trust. 19
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ORDER ONLINE, BY PHONE, FAX, OR MAIL ADR of Michigan 55 E. Long Lake Rd., PMB 233, Troy, MI 48085 www.buyadr.com 888-855-0100 ¡ Fax: 888-855-7111
NOTE: Payment must accompany your order. Prices include MI sales tax. Prices are subject to change without notice. 3OHDVH DOORZ ZHHNV IRU FXVWRPL]HG RUGHUV. Make check payable to: ADR of Michigan ɡ MasterCard ɡ American Express Credit Card Account Number: Credit Card Charge to:
SHIP TO NAME ADDRESS
IS THIS A RESIDENTIAL ADDRESS? YES___ NO___
ɡ VISA
Date of Order
ɡ Discover
Name on Card:_____________________________________________________________ Exp. Date:_________________________ Customer Security Code (CSC):_____________
CITY, STATE, ZIP CODE
Billing Address:____________________________________________________________
(AREA CODE) PHONE
(AREA CODE) FAX
Signature (required for credit cards only)
PAGE 1 FORMS
AMOUNTS
UNIT PRICE
RD-108, 4-Part NCR
50 250 500
12.75 60.00 115.00
Imprinted RD-108, black ink
250 500
145.00 205.00
Privacy Forms (Complete FTC Worksheet online at: www.buyadr.com)
100 500
30.00 50.00
FTC Buyers Guide, 2-Part NCR, with adhesive
100 500
15.50 72.50
FTC Spanish Buyers Guide, 2-Pt NCR, with adhesive
100 500
14.00 65.00
Deal Jacket
100 500
22.25 101.25
Odometer Forms 3-Part NCR
QUANTITY
TOTAL
ADVERTISING SUPPLIES
AMOUNTS
UNIT PRICE
Windshield Numbers Peel & Stick 7- '
- * + / ; <
$=
per dozen
3.25
> ?# > ? / @
* + / 0 Down, 4Cylinder, 4x4, 6-Cylinder, Air Conditioning, All Wheel Drive, Automatic, Certified, Diesel, Down, Extra Clean, Financing Available, Gas Saver, Great Gas Mileage, Lease, Leather, Like New, Loaded, Low Mileage, One Owner, Per Month, Reduced, Sharp, Special, V-8, Warranty
per dozen
3.50
per dozen
7.50
'E K + ' # Q
'E K + ' #
per dozen
7.50
X
'E K + ' #
per dozen
7.50
11.75 53.75
@
'E K + ' #
per dozen
7.50
per book
28.50
Z
'E K + ' #
per dozen
7.50
MI Retail Purchase Agreements 3-Part NCR
100 500
23.00 100.00
[
'E K + ' #
per dozen
7.50
Imprinted MI Retail Purchase Agreement, 3-Part NCR, black ink
500 1000
241.75 341.75
AMOUNTS
UNIT PRICE
50
12.50
'E K + ' #
per dozen
7.50
Mirror Tags: Fluorescent Colors: As Advertised, Lease - Pink or Yellow Blank - Green, Red, Pink, Yellow Red Tag Special, Was/Now - Red Sale - Green, Red, Pink, Yellow Special - Green, Red, Pink, Yellow
pack of 50
18.50
Antenna Flags: Fluorescent Colors Yellow, Multi, Red-White-Blue or Red
per dozen
21.00
Antenna Flags: Black & White Checkered
per dozen
21.00
American Cloth Clip on Flags
per dozen
21.00
each
21.00
AMOUNTS
UNIT PRICE
500 250 250
35.00 21.00 27.00
100
8.00
HARDWARE Thumb Screws Pan Head Screws
100
8.00
Hex Head Screws
100
8.50
Metric Screws
100
8.00
License Plate Magnet, Vinyl Coated
QUANTITY
TOTAL
\
'E K + ' #
per dozen
7.50
'E K + ' #
per dozen
7.50
'E K + ' #
per dozen
7.50
each
8.75
AMOUNTS
UNIT PRICE
NADA Used Car Guide
1 book
8.00
NADA Older Car Guide
1 book
30.00
NADA Recreation Vehicle Guide
1 book
45.00
Pennants: 120 ft. String Multi-Color
NADA Marine Appraisal Guide (7-
SUPPLIES
BOOKS
1 book
45.00
NADA Motorcycle-Snowmobile Guide
1 book
30.00
NADA Classic Car Guide Book
1 book
30.00
AMOUNTS
UNIT PRICE
Grease Pencils - Yellow or White
each
1.00
!
"#$ # %# Fluorescent Colors - Red, White, Pink, Yellow or Blue
each
9.00
# !
"#$ # %# Fluorescent Colors - Pink, Green, Yellow or Orange
each
5.00
% !
"#$ # %# Fluorescent Colors - White, Red, Yellow, Black or Blue
each
4.00
ADVERTISING SUPPLIES
TOTAL
QUANTITY
TOTAL
Year Model Slogan Oval
100 500
QUANTITY
QUANTITY
TOTAL
Key Tags - Blue Cardboard Yellow Hard Plastic ^ #$#?
- Red, White, Blue, Green or Yellow QUANTITY
TOTAL
Red/Blue Stock Stickers Single Edged Razor Blades
box of 100
7.75
each
2.50
Rubber Plate Holders
each
12.00
Snow Rakes
each
17.00
Metal Scraper
REV. 2/21/2011
PAGE 1 SUBTOTAL
Available Online at: www.buyadr.com 22
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U EX\DG ZZZ
FRP
3$*(
ADDITIONAL FORMS
AMOUNTS
UNIT PRICE
Customer Proposal - 2 Part: Provides info the dealership needs to complete a transaction.
100
$23.00
Trade-In Vehicle Appraisal - 2 Part: Ensures information is available to represent vehicle for sale.
100
$23.00
Test Drive Agreement - 2 Part: Obtains important customer information, including insurance coverage.
100
$23.00
Good Will Repair Acknowledgement - 2 Part: Protects the dealer’s ability with regard to implied warranties.
100
$23.00
Wholesales Purchase Agreement - 2 Part
100
$23.00
Acknowledgement of AS-IS Sale - 2 Part: Verifies that the consumer is satisfied with vehicle & understands the transaction.
100
$23.00
Delivery Confirmation - 2 Part: Verifies that the consumer is satisfied with the vehicle and understands the transaction.
100
$23.00
Delivery Confirmation-S: Spanish version of the above form.
100
$23.00
Delivery Confirmation-F: Other foreign language versions of the Delivery Confirmation.
100
$23.00
Interpreter’s Acknowledgement - 2 Part: For use when sale is conducted in language other than English
100
$23.00
Customer Delivery Checklist - 2 Part: Records existing rights and/or responsibilities of the parties.
100
$23.00
Notice to Co-Signer - 2 Part: Discloses the obligations they are undertaking by agreeing to act as a co-signer.
100
$23.00
Insurance Coverage Acknowledgement - 2 Part: Confirms customer’s obligation to maintain insurance coverage.
100
$23.00
F & I Product Confirmation - 2 Part: Confirms which products the consumer purchased.
100
$23.00
Authorization to Release Payoff Info - 2 Part: Dealership can get protected information concerning a lien release.
100
$23.00
Used Vehicle Limited Warranty - 2 Part: Enables the dealership to sell a vehicle with a “Limited” warranty.
100
$23.00
Deposit Receipt - Documents transaction information required to comply with UDAP statutes
200
$21.00
Arbitration Agreement
100
$23.00
Service Loaner Agreement
100
$23.00
Acknowledgement of Voluntary Resign
100
$23.00
MI SHIPPING CHART* $ Amount of Order Shipping Charge 1.00-30.00 30.01-50.00 50.01-70.00 70.01-90.00 90.01-110.00 110.01-119.99
ZZZ EX\DG U
Now View Products & Place Orders Online! Visit Us at: www.buyadr.com
$9.00 $11.00 $16.00 $18.00 $19.75 $21.00
MINIMUM PURCHASE FOR FREE FREIGHT $125 *Residential Addresses add $4.50 to Freight
QUANTITY
FRP
TOTAL
SUBTOTAL: PAGE 2 SUBTOTAL: PAGE 1 TOTAL MIADA MEMBER DISCOUNT (10%) FREIGHT (refer to chart) **GRAND TOTAL **Complete Payment Information on the Top of Page 1 23
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MI DEALER ORDER FORM Wolters Kluwer Financial Services/Bankers Systems Inc.
Retail Installment Contracts & Security Agreements
MI Dealers Receive
WKFS/BSI Retail Pricing
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(when placed through ADR of Michigan only)
Simple Interest without Late Fee (RS-SI-MV-MI)
Through ADR of MI â&#x20AC;
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MAIL TO: ADR of Michigan, 55 E. LONG LAKE RD PMB 233, TROY, MI 48085 FAX TO: 888-855-7111 PHONE ORDERS: 888-855-0100 ORDER ONLINE: www.buyadr.com Prices are subject to change without notice
25
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Sorting Through Exceptions to the Risk-Based Pricing Notice The FTC’s risk-based pricing notice requirements became effective Jan. 1. To comply with these requirements, dealers
must alert consumers when they are getting different credit terms than others based on credit information. The good news is the requirements give options for how and when you provide the notice. That’s also the bad news because the options and exceptions can make it difficult to figure out if you’re in compliance. To help you sort through the maze, here are some of the important exceptions and how they apply to you.
Your dealership doesn’t need to provide a notice if: t You don’t do risk-based pricing of credit terms. This applies if every consumer whose application is approved is offered credit on the same terms. t You don’t use credit reports in any way to make a credit decision. If your dealership directly contacts employers and other references and is not otherwise using any third party information, then the risk-based pricing notice is not required (it sounds rare, but there are dealers who qualify for this exception).
A notice isn’t required for a specific transaction if: t The credit requested is not for a consumer purpose (personal, family or household use). t The transaction is a consumer lease. t The consumer applies for a specific credit product and is approved for those terms. t You offer specific terms to a pre-screened group and extend credit on the offered terms to one of them. t The consumer is a co-signer (which is different from a coborrower), guarantor, surety or endorser in the transaction.
Independents Remain Profitable in Challenging Environment Our team at Manheim Consulting had the pleasure of interviewing NIADA President Anthony Underwood for a question and answer session discussing the state of the used vehicle market from the perspective of independent dealers as we compiled the recently released, 16th annual Used Car Market Report (UCMR).
Underwood framed the challenges facing independent dealers in a way that confirmed what our data was telling us: independents are encountering higher prices for inventory at the wholesale level and finding fewer pre-owned vehicles in the marketplace. In response, these dealers are focusing on sound inventory management practices, and using all available sales channels – including online – to source just the right inventory to meet their customers’ needs. We examined these and other trends in the UCMR, which is Manheim’s annual analysis of the forces shaping the used auto industry. As part of the ManheimNIADA Dealer’s Edge partnership, I’m happy to let you know you can download the entire report free of charge by taking a very brief survey at www.surveymonkey.com/s/manheim. As a comprehensive analysis of the trends shaping the automotive industry, the 2011 UCMR contains much more valuable information pertaining to independent dealers, as well as chapters on other aspects of the industry, including rental, leasing, fleets, repossessions and salvage. I encourage NIADA members to download their free copy of the UCMR, and as always, please e-mail me any time with your questions. BY TOM WEBB Tom Webb is chief economist for Manheim Consulting. Contact him at Thomas. webb@manheim.com, follow him via Twitter at www.twitter.com/TomWebb_ Manheim and read his blog at www.manheimconsulting.typepad.com.
t The consumer’s application is denied and you provide an adverse action notice. t You provide the consumer with the credit score disclosure instead of the risk-based pricing notice. The disclosure is an alternative form authorized by the regulations. If you use it, you must provide it to all consumer applicants instead of providing a risk-based pricing notice only to the portion of applicants who are not receiving your most favorable credit terms. It is likely some of these exceptions apply to your dealership and its transactions. Before relying on an exception, review the regulation or discuss it with your legal counsel to be sure you implement it correctly. The regulation can be found at 16 CFR §§ 640.1-.6. BY CH I P ZYVO LOSKI Chip Zyvoloski is senior attorney for indirect lending at Wolters Kluwer Financial Services. For more information, visit www. wolterskluwerfs.com/indirect.
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