16
WASHINGTON UPDATE
24
I N D E P E N D E N T
A U T O M O B I L E
26
BOUNCERS AT THE BARBECUE
D E A L E R S
A S S O C I AT I O N
O F
C A L I F O R N I A
a fresh look and feel
O F A S S O C I AT I O N D E A L E R S A U T O M O B I L E I N D E P E N D E N T T H E O F M A G A Z I N E
DALLAS, TEXAS Permit No. 2079
PAID
T H E
PRSRT Standard U.S. Postage
O F F I C I A L
NIADA CONVENTION RECAP
West Coast Dealer
C A L I F O R N I A
A U G U S T / S E P T E M B E R
2 0 1 5
10
ASSOCIATION NEWS
VISIT US AT W W W.IADAC.ORG
magazine
Inside A U G U S T / S E P T E M B E R
06 NIADA.TV
10 ASSOCIATION NEWS
2 0 1 5
WHAT’S NEW
National Quality Dealer Award Ceremony Online
The final event of the NIADA Convention & Expo honors the crowning achievement for an independent dealer, being named National Quality Dealer of the Year. The entire broadcast of the National Quality Dealer Award Ceremony can be viewed on www.niada.tv under the “Industry Events” channel.
ADVERTISERS INDEX
12 IADAC FALL CONVENTION
14 BEST OF BOTH WORLDS
16 WASHINGTON UPDATE
22
WEST COAST DEALER
| AUGUST/SEPTEMBER
2015
|
W W W. I A D A C . O R G
LEGAL MINUTE
4
24 NIADA CONVENTION RECAP
26 BOUNCERS AT THE BARBECUE
ADESA…..…..…..…..…..…..…..…..…..…..…..…..….IBC ALLEN HAWKINS INSURANCE…..…..…..…..… 24 ALLIANCE INSPECTION MGMT.…..…..…..…. 22 AUTOZONE …..…..…..…..…..…..…..…..…..…..…. 23 AVRS …..…..…..…..…..…..…..…..…..…..…..…..…. 11 BLACK BOOK…..…..…..…..…..…..…..…..…..…..…..5 BRASHER’S SACRAMENTO AA …..…..…..…. BC CARMAX AUCTIONS …..…..…..…..…..…..…..… 25 DEALERSOCKET …..…..…..…..…..…..…..…..…. 20 HIGH TECH LOCKSMITHS …..…..…..…..…..…. 18 LOBEL FINANCIAL CORP…..…..…..…..…..…..…..3 MANHEIM PENNSYLVANIA …..…..…..…..…. 13 MARK-ONE FINANCIAL…..…..…..…..…..…..…. 15 NEXTGEAR CAPITAL …..…..…..…..…..…..…..…. 21 PROTECTIVE…..…..…..…..…..…..…..…..…..…..… 17 TRUECAR…..…..…..…..…..…..…..…..…..…..…..…..…9 VAUTO…..…..…..…..…..…..…..…..…..…..…..…..… IFC
OFFICE
For information on how to become a member please contact larry@IADAC. ORG or (916) 601-4976
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. The West Coast Dealer is published bi-monthly by the National Indpendent 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 The West Coast Dealer, IADAC, 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 2015 by NIADA Services, Inc. All rights reserved. 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
INDUS T RY NE W S
NIADA 2015 Used Car Industry Report Released NIADA’S 2015 USED CAR INDUSTRY REPORT UNVEILED
The 2015 Used Car Industry Report has more sections of data than ever before, with data, analysis and insight from many new industry partners and researchers to provide the best overall snapshot of the used car industry. It also includes consumer data designed to help dealers better understand how the industry and its customer base are evolving, what trends are developing and how to forecast where the industry and your dealership are heading. For the second consecutive year, the Used Car Industry Report includes the complete 2014 NAAA Annual Review, as well as the NADA 2014 Used Vehicle Price Forecast. Among the highlights: NIADA now has a two-year history of member data and
member business confidence survey results to compare. Equifax for the first time has taken that business confidence data from the past few quarters and presented conclusions, opinions and critical business confidence indicators. There are also NABD’s Buy HerePay Here benchmarks, information from Autotrader’s 2015 Automotive Buyer Influence Study, CARFAX’s consumer online search data, Dealertrack’s digital retailing workflow, analysis of the auto finance and subprime markets from Experian, Equifax and Moody’s, and much more. This report was mailed free to NIADA members in July, and is also available to association members online at www.niada. com/publications.php.
AUC T ION NE W S
Whann Tech Partners with vAuto INSTANT ACCESS TO 120 INDEPENDENT AUCTIONS
Auto Genius Labs and the Whann Technology Group have completed an integration allowing dealers to research and purchase vehicles from independent auctions on the WTG Simulcast platform. The WTG Simulcast platform encompasses 120 independent auctions across the country, providing wholesale buyers with remote access, remote bidding, streaming audio and video for each auction lane. The integration gives wholesale buyers on the WTG Simulcast platform instant access CA_1010.qxd:Layout 1
to AuctionGenius’ “heads-up” display, which provides vehicle history reports, vehicle condition information and the latest valuation information to help buyers make informed purchase decisions. Through this partnership, dealers can research and bid on vehicles from some of the nation’s leading independent auction groups, including Alliance Auto Auction, Brasher’s Auto Auction and Dealer’s Auto Auction and locations such as Columbus Fair Auto Auction and Greensboro Auto Auction. 11/19/10
12:04 PM
12:04 PM
Page 4
Executive Committee CA_1010.qxd:Layout 1
Rocco Delapa President Fairfield Auto 1206 N. Texas St. Fairfield, CA 94533
INSIDE INSIDE
11/19/10
Brittany Hibdon Vice President Hibdon Auto Center Orland, CA 95963 530-865-5800 Brittany@HibdonAutoCenter.com EXECUTIVE COMMITTEE
Gus Camacho Rod Davis EXECUTIVE COMMITTEE Sr. Vice President Rod Davis President Rod Davis Auction Camacho Auto Sales, Inc. ChairmanBrasher's of theAuto Board President Rio Linda, CA 95673 Brasher's Auto Auction Lancaster, CA 93534 Brasher’s Auto Auction 916 - 991 - 5555 MAGAZINECONTENTS Rio Linda, CA 95673 rdavis@brashers.com Rio Linda, 916 - 991 - 5555 CA 95673 MAGAZINECONTENTS 6 Named661-945-2609 IADAC Quality Dealer of the Year rdavis@brashers.com gus@camachoauto.com 916-991-5555 Auction Standards Help 6 Named8IADAC Quality Dealer of the Customers Year David Aah1 Credit Applications Do’s & Don’ts 8 Auction13Standards Help Customers rdavis@brashers.com Chairman of the Board David Aah1 Striking Do’s Gold:& IADAC’s 42nd Annual Convention 13 Credit 14 Applications Don’ts North Bay Auto Auction Mehdi Chitgari Chairman of the Board 14 Striking Gold: IADAC’s 42nd Annual Convention Fairfield, CA 94534 North BayStrohmeier Auto Auction Vice President Guy 707 - 864 - 1040 Fairfield, CA 94534 THE CURRENT STATE Classic Chariots Inc. Vice 707 - 864President - 1040 david@nbauto.com THE CURRENT STATE OF THE1611 AUTO INDUSTRY david@nbauto.com W. Vista Way Guy Strohmeier’s OF THEJohn AUTO INDUSTRY McElroy is host of the long-running “AutoMark Glover CA 92083 Auto Center John McElroy hostVista, of television the long-running “AutoMark Glover Sr. Vice President line isDetroit” program, covering all asSr.87 ViceSoda PresidentBay AztecaRd Auto Sales line Detroit” television covering all In as-this presentapects of the program, automotive industry. Azteca Auto SalesGalt, 95632 Lakeport, CACA 95453 pects of thetion, automotive In athis presenta-and insightful McElroyindustry. provides thorough Galt, CA 95632 209-712-1886 tion, McElroy provides a thorough insightful review of where we’veand been, where we now review of where we’ve been, where we now are, and where our industry is headed. Taped are, and where our industry is headed. Taped at the Automotive Fleet & Leasing Association’s at the Automotive Fleet & Leasing Association’s Annual Conference. Annual Conference.
CMD CLASSES
Page 4
209-712-1886 mark@countyfinancial.com mark@countyfinancial.com
Larry Laskowski
Larry Laskowski Treasurer Treasurer The Auto Outlet The Auto Outlet Roseville, CA 95678 Roseville, CA 95678
916-784-3408
Beto Beas Secretary Beas Auto Sales Stockton, CA 95202 209-944-5770 hhbeas@aol.com
IN INSI
M Terry Degmetich Treasurer MAGAZINE 12 I-Deal Cars Roseville, CA 95678 12 Local Auto D by Clunkers1 916-870-9254 idealmaster@surewest.net 10 10 Questions for1A Vice President
Terry Degmetich Secretary Terry Degmetich I - Deal Cars Secretary Roseville, CA 95678 I - Deal Cars 916-870- 9254 Roseville, CA 95678idealmaster@surewest.net 916-870- 9254 Vince Cardinale idealmaster@surewest.net Vince Cardinale A to Z Motors Vice President Winters, CA 95694 A to Z Motors Winters, CA 95694 925-914-9199 atozmotors1@aol.com 925-914-9199 atozmotors1@aol.com
14 Auction Security1
916-425-3349 rgomez739@yahoo.com rgomez739@yahoo.com
support the principle d dards of the CMD dd day seminar that addr M Merchandising, Fina R Resources, and Bus University providesU C Continuing Education
Larry Laskowski 18 In the Spotlight Executive Director The Auto Outlet C Rick Gomez Roseville, CA 95678 CERTIFIED MD Rick Gomez Vice President DEALER PRO Vice President RJ916-601-4976 Auto Brokers RJ Auto Brokers Carmichael, CA 95608 Dealers who dem autoview@surewest.net s Carmichael, CA 95608 916-425-3349 Mike Casey
Mike Casey Vice President Vice President Cal West Motors Cal West Motors San Leandro, CA 94577 San Leandro, CA 94577
510-352-9230
ASSOCI AT ION NE W S
A Fresh Look & Feel
WEST COAST DEALER
| AUGUST/SEPTEMBER
2015
|
W W W. I A D A C . O R G
NIADA.TV NETWORK’S NEW DESIGN PROVIDES ADVANCED WAYS TO WATCH AND USE TRAINING VIDEOS BY CHASE TIDWELL
6
It seems ages ago when NIADA introduced a streaming video education website for its dealer members. Now, 11 years later, NIADA has rebranded and re-tooled the NIADA.TV Network to meet the growing needs and technological demands of our online users. The response to the new site design and functionality at the recent NIADA Convention and Expo was overwhelming, from both dealer members and vendors. In the infancy of dial-up connections and long before the YouTube streaming video invasion, NIADA was among the first entities in the world to create an online streaming video educational environment, unveiling NIADA.TV for its dealer members in 2004. The new NIADA.TV was first used to educate members about the OFAC initiative set forth by the federally mandated requirement to fight terrorism after 9/11, and the association quickly realized it had seen the future of instant online news delivery. From that first online educational initiative, NIADA.TV has evolved into a full-fledged industry network. More than 500 hours of quality dealer education is available on the site today, including Automotive Industry News, a weekly streaming video news program accessible on three websites, as well as a slew of vendor partner special monthly programs, auto tips, infomercials and educational sessions from industry events nationwide.
THE NIADA.TV NETWORK HAS BECOME THE FREE, ONE-STOP ONLINE SOURCE FOR AUTOMOTIVE INDUSTRY PROFESSIONALS TO FIND ANYTHING AND EVERYTHING AUTORELATED.
The NIADA.TV Network has become the free, one-stop online source for automotive industry professionals to find anything and everything auto-related. “When we first envisioned NIADA.TV, there was very little, if any, streaming video online, and the complexities of streaming video and slow dial-ups were our number one foe,” NIADA CEO emeritus Mike Linn said. “It took a few years and a whole lot of education before our dealers started catching on, but the quick emergence of broadband Internet connections greatly assisted the cause.” The newly redesigned NIADA. TV site still includes up to two years of automotive educational sessions from conferences and conventions across the country. But it’s now easier to find relevant content through particular channels and keyword searches, and users have the ability to rate and share content through all of their social networks. “Technology has finally caught up with us, and with the emergence of a younger generation of dealers familiar with sharing of content online with their fellow employees and their online social circles, the ability to share and rate the content were two of the most important enhancements we knew had to take priority in the development of the new NIADA.TV website,” NIADA national sales manager Troy Graff said. “Another major improvement to the site is that our entire video platform is now 100 percent compatible for mobile device viewership.” For dealers who are unaware of the extent of the information that can be found on NIADA. TV, the network and its updated website can be a valuable training resource for your dealership and its employees. With so many channels and so much content available, dealers can refer to the site often and
show training videos to their staff as part of their daily or weekly sales/dock meetings. New Channel Debuts The newly designed site also debuts the new Aftermarket/ SEMA Channel, perfect for dealers with service bays and a thriving aftermarket business. And those who don’t have a service bay or don’t know how to start an aftermarket business can learn from the new channel, which teaches how and provides stepby-step instructions, training and tips of the aftermarket trade to help your business grow. “Accessorization is an untapped profit center for many dealerships and it can result in increased vehicle sales and attract new customers,” SEMA senior manager of councils Clayton Drescher said. “To help dealers understand the restyling industry, the SEMA Professional Restylers Organization collaborated with NIADA to produce videos that expose dealerships to the incredible diversity of products and services available through the aftermarket. “Members of the SEMA PRO council, which represents accessory manufacturers, installers and vehicle restylers, are available to help NIADA members expand or develop their accessory programs.” NIADA.TV also provides online training and videos on other network channels, including Sales, BHPH, Operations, F&I, Remarketing, Regulatory and Compliance, Special Features, Industry Events, Association News and more. The new keyword search capability on the site is another great way to obtain video content through the keywords contained in each video’s description. And once you are watching a video of your choice, the new site also recommends similar video content options. Industry Vendors Benefit Dealers aren’t the only ones
who can benefit from the NIADA.TV Network. Vendors and industry partners have found NIADA.TV to be one of the most effective marketing media to reach a highly targeted dealer audience. Most of the industry’s largest and most recognizable brands have invested and continue to invest more of their yearly marketing budgets on NIADA. TV program and channel sponsorships, live broadcast commercials, infomercials and special monthly programming. Among the most recognizable are Autotrader, AutoZone, CARFAX, AFC, Cars.com, Manheim, NextGear Capital, RentA-Wreck, Sirius XM and TrueCar. And there are many more.
DEALERS AREN’T THE ONLY ONES WHO CAN BENEFIT FROM THE NIADA.TV NETWORK. VENDORS AND INDUSTRY PARTNERS HAVE FOUND NIADA.TV TO BE ONE OF THE MOST EFFECTIVE MARKETING MEDIA TO REACH A HIGHLY TARGETED DEALER AUDIENCE. “One problem that turned into a great opportunity on the video production front for NIADA. TV was the fact that many auto vendors have very little video content in their marketing repertoire,” Graff said. “NIADA. TV provides a very valuable, experienced and, most important, very economical alternative to fulfill their video and streaming commercial production needs. “When vendors find out they can use these new commercial videos and special video projects for many of their own marketing initiatives above and beyond placement on NIADA.TV, it is an easy sale.” The NIADA.TV studio at the association’s headquarters in Arlington, Texas, continues to host many client and vendor CONTINUED ON PAGE 8
CONTINUED FROM PAGE 6
WEST COAST DEALER
| AUGUST/SEPTEMBER
2015
|
W W W. I A D A C . O R G
A FRESH LOOK & FEEL
8
WITH SO MANY CHANNELS AND S O M U C H C O N T E N T AVA IL A B L E , DE ALERS CAN REFER TO THE SITE OF TEN AND SHOW TRAINING V I D E O S T O T H E I R S TA F F A S PA R T O F T H E I R DA ILY O R W E E K LY S A L E S / D O CK M E E T I N G S.
“ T H E N I A DA .T V S TA F F A R E T R U LY T O P - N O T C H P R O F E S S I O N A L S. T H E Y W E R E E X T R E M E LY E A S Y T O W O RK W I T H A N D S AV E D U S I N P R O D U C T I O N C O S T S.”
productions. The state-of-the art studio provides vendors with easy access to a video production location just a few minutes from Dallas-Fort Worth International Airport, the country’s third-largest airport, in the center of the United States. The studio includes up to a three-camera shoot capability and a green-screen wall with room to shoot an entire panel of experts. Live broadcasts of special industry events, educational sessions and panel discussions can also be easily shot at the new studio. AutoZone was among the first to use the facility when NIADA. TV filmed and produced its A-to-Z Video Education Series using green-screen technology at the studio. Since then, the studio in Arlington has hosted shoots for AFC, Penske and Rent-A-Wreck, to name a few. Trainers such as Paul Webb use NIADA.TV’s production capabilities for their sales training videos. The NIADA.TV production team also travels across the country to shoot various company videos, special programming series and automotive events, conventions and conferences. “The NIADA.TV staff are truly top-notch professionals. They were extremely easy to work with and saved us in production costs,” AFC vice president of marketing and business development Neill Waters said. “From script writing to shoot direction to post production sound and special effects and editing, the NIADA.TV solution was the way to go for us.
“We couldn’t be happier with our new six-part monthly special program series 2-Minute Tip that is currently airing on the NIADA. TV network. The feedback received throughout the industry has been excellent. We can’t wait to get back to Dallas later this year for some follow-up shooting. Live Events Among NIADA.TV’s greatest accomplishments annually are the live webcast of the NIADA Quality Dealer of the Year Awards, live from the NIADA Convention, and the World Automobile Auctioneers Championship. The edited rebroadcast of each of those yearly events can be found by clicking on the Industry Events Channel. “The live webcast of those two huge industry events is yet another testament to the brilliant staff and team we have assembled for NIADA.TV,” NIADA executive vice president Steve Jordan said. “Michael Marashlian and his production team in California played an integral role in the start-up and continued success of NIADA.TV, and that legacy is now carried on by staff producer Reid Mullins.” Online streaming video is a powerful marketing tool that is expanding by the day. As competition for online viewing continues to grow, NIADA is committed to its online mission to educate dealers through the NIADA.TV Network. Federal and state regulatory issues continue to re-shape the used auto industry daily, and Jordan believes NIADA.TV is the perfect medium to deliver relevant and timely information on the go. Everyone, from franchise and used vehicle dealers to their employees, from the entire auto industry to the consumer auto enthusiast, has a reason to check out NIADA.TV. At the very least, dealers owe it to themselves to view the most recent NIADA Convention education sessions. NIADA Online Convention As part of the new site, NIADA. TV for the first time now hosts the
THE NIADA ONLINE CONVENTION WILL ALSO FEATURE THE ENTIRE NATIONAL QUALITY DEALER OF THE YEAR AWARDS AND THE YEARLY NIADA LEADERSHIP AWARDS BANQUET, EACH FILMED LIVE FROM THE CONVENTION.
AFC vice president of marketing and business development Neill Waters
brand new NIADA Online Convention. The microsite within NIADA. TV, scheduled to debut in mid- to late July, houses videos of every general session, breakout session and special event of the most recent NIADA Convention. It will begin by bringing viewers all of the content and excitement of the 2015 event, held last month in Las Vegas. “The educational content from our annual convention has always been displayed on NIADA.TV, but it was typically always scattered throughout the site,” NIADA director of events Holly Swanzy said. “Having a complete area of the website that specifically houses the NIADA Convention educational content in one themed area is a brilliant way to promote the NIADA Convention and all of its fanfare for the future.” Besides housing all of the education videos, the new NIADA Online Convention includes the first NIADA Virtual Trade Show. Online viewers can search the VTS area by company and watch a short video of that company’s product and service offerings directly from inside the vendor’s NIADA booth. The NIADA Online Convention will also feature the entire National Quality Dealer of the Year Awards and the yearly NIADA Leadership Awards Banquet, each filmed live from the convention. The NIADA Online Convention will be free for all convention attendees using the email address they provided at registration. The NIADA Online Convention will also be made available to dealers who did not attend the convention for a onetime yearly fee of $149.
“THE LIVE WEBCAST OF THOSE TWO HUGE INDUSTRY EVENTS IS YET ANOTHER TESTAMENT TO THE BRILLIANT STAFF AND TEAM WE HAVE ASSEMBLED FOR NIADA.TV.” NIADA executive vice president Steve Jordan
“Every year we receive questions from convention attendees about obtaining access to educational sessions they were not able to physically attend while in Las Vegas,” Swanzy said. “Attendees can find it all in one spot online, and they don’t have to pay anything additional for it. Plus, they can always find a session they attended and liked and wanted to share with their other employees when they get back to the dealership.” The Online Convention and Virtual Trade Show, as well as the redesigned site with its increased capabilities, represent the latest step in the ongoing evolution of the NIADA.TV Network, which has been on the cutting edge of Internet streaming video since Day 1. We invite you to visit www. niada.tv and discover what’s new at the premier online source for video education for the used vehicle industry. CHASE TIDWELL IS NIADA’S VICE PRESIDENT OF MEDIA SERVICES.
ASSOCI AT ION NE W S
Message from the Executive Director DISRUPTIVE BUSINESSES
Every year the California legislature passes several hundred bills, many of which create or enhance protection for consumers. In order for those bills to pass through appropriations or fiscal review the authors may claim there will be no associated cost to the state or monetary increase as a result of passage. By creating a new law punishable by penalty, enforcement must be carried out by someone or some agency. As more and more laws are created and no compensation for additional enforcement is made, the weight of enforcement creates a burden which can only reduce the overall efficiency of the enforcers. To law-abiding legitimate business owners, enforcement divisions are their greatest hope for maintaining a level playing field with their competition. Business owners rely on our lawmakers to provide
equal protection by treating similar businesses alike. When enforcers are over-burdened or understaffed and underfunded, a scenario is created that is ripe for lawbreakers. Enter the new age of disruptive businesses. Among the most common disruptive businesses are the ridesharing companies Uber and Lyft but also include the “room for rent” business Airbnb and others. Auto sales companies such as Beepi, Shift and others have now invaded the auto sales industry. These companies have tilted the playing field to their advantage by deliberately ignoring existing laws. Compliance costs money and by not complying, the savings create a profit margin not available to law-abiding businesses. The media has helped them significantly by publishing articles about these new start-ups. These reports only serve to increase exposure for their services without
noting the blatant avoidance of laws, which could leave the consumer vulnerable on what is typically the second largest purchase a consumer makes. Few articles discuss their disregard for law. Failing to provide a comprehensive report, journalists have the power to present a onesided review without a clear warning, which should be made for consumer awareness. Will enforcement get their act together and take action against these up-starts or will legitimate businesses be forced to join the growing disruptive crowd? Time will tell, but in the meantime legitimate businesses suffer lost profit as a result of having to share the pie with illegal operators. Today’s business environment is much more complicated than it has been in past, particularly here in California. Business owners should realize political issues are creating change in all industries and
BY LARRY LASKOWSKI
some proposed changes can be devastating. Political savvy is no longer an option – it is something which business owners must have. Thankfully for independent dealers, IADAC’s lobbyist Bill Dohring is at the Capitol every day watching for bills that may influence the auto industry. Plus, he works with DMV and other groups to help the industry sustain profitable businesses. Your membership in IADAC supports our actions, but it is a good idea to know your local representatives also. If you’re not able to do that, at least become educated and exercise your right to vote. I guarantee those who look to further regulate and restrict your profitability are voting. As Albert Einstein said, “The world is a dangerous place to live; not because of the people who are evil, but because of the people who don’t do anything about it.”
ASSOCI AT ION NE W S
President’s Message
WEST COAST DEALER
| AUGUST/SEPTEMBER
2015
|
W W W. I A D A C . O R G
DEFENDING YOU AT THE CAPITOL BY ROCCO DELAPA
10
I talk to dealers often about our industry and find many are unaware of the never-ending legislative battle being fought at the Capitol. Nearly every year bills are introduced that would serve to negatively impact our livelihoods. IADAC’s lobbyist Bill Dohring is your defender who helps diminish the negative impact of those bills. What you should know is that almost every auto related bill introduced would negatively impact you and your dealership. Mr. Dohring, along with lobbyists for the new car dealers and other industry proponents, is your only defense against those harmful bills. Do you know why dealers have a doc fee and why it has increased over the years? As legislation places additional burdens on dealers, industry lobbyists have asked to be compensated for those tasks. A recent example is the $10 increase we received in the doc fee (now $65) when it was mandated
that dealers run a NMVTIS report on all vehicles offered for sale. Or how about in 2009 when legislation proposed your dealer bond be raised to $100,000? Lobbying efforts by IADAC and Bill Dohring were rewarded by maintaining the bond requirement at $50,000. IADAC also introduces legislation to benefit dealers. We partnered with Assemblyman Felipe Fuentes to author a bill which was passed that allowed law enforcement to tow and impound vehicles offered for sale by curbstoners. To retrieve the vehicle from impound, the new law required the curbstoner to do a full transfer on the vehicle, including paying any back fees, sales tax and impound and storage fees. That measure took a big bite out of the potential profit of curbstoners while benefitting legitimate dealers. IADAC is a non-profit organization. Our first goal is not to amass a huge balance sheet – it is
I URGE THOSE OF YOU READING THIS MAGAZINE WHO ARE NOT IADAC MEMBERS TO JOIN IADAC SO WE MAY CONTINUE TO HAVE REPRESENTATION AT THE CAPITOL.
to represent California dealers for the benefit of the auto industry. However, it is an objective to maintain a positive balance so the work we do representing California dealers can continue. We achieve that by growing our member base. I urge those of you reading this magazine who are not IADAC members to join IADAC so we may continue to have representation at the Capitol. Membership is just $299 annually but the discounts offered by all the major auctions in the state will easily exceed the cost of membership. Add to that benefits from the National Independent Automobile Dealers Association, scholarship awards and much more and you’ll see why the catchphrase is “it’s a no-brainer!” I’ve said it before and I’ll say it again, IADAC membership doesn’t cost, it pays! Rocco DeLapa, USMC Semper Fi!
Oc 9 thantober d 10 th
ASSOCI AT ION NE W S
IADAC Fall Convention at Lake Tahoe
SAVE THE DATE!
SAVE THE DATE!
pace and a dealer needs help to stay informed of changes in law and compliance requirements to avoid penalty. Plus, new products designed to help your dealership run smoother, more efficiently and save you money will be in the spotlight at the vendor expo. Don’t miss this chance to add profit to your bottom line! Special guest speakers will discuss pertinent current issues along with important dealership practices. Don’t miss this opportunity to improve your business model and expand your customer base. Your nearby dealers will be at this event looking to get an advantage on you! In addition to the informative
sessions you’ll find opportunity for fun and prizes. Add to that the beauty of Lake Tahoe and ample gaming and you’ll find this could be that perfect getaway/business expense. The Quality Dealer of the Year award will be presented at the conclusion of the event on Saturday. If you would like to nominate a dealer you think represents the industry as an excellent dealer please email Larry@iadac.org. Event information with dealer and vendor registration forms can be found online at www.iadac.org. Look under the “Events” tab on the top menu bar. Register now and reserve your room!
WEST COAST DEALER
| AUGUST/SEPTEMBER
2015
|
W W W. I A D A C . O R G
Save the date! You won’t want to miss the 47th annual IADAC fall convention October 9 and 10 at Harvey’s Lake Tahoe. Dealer registration is just $99! Catch up on the latest offerings in our industry and that $99 price includes your meals during the event! Special discounted room rates are available for our IADAC members. The event runs all day Friday and Saturday until 1:30. We have tailored this schedule to take you away from your businesses for as short a time as possible. If you have not attended an IADAC convention before, now is the time! Changes in the auto industry are happening at a frantic
12
IADAC PRESIDENT ROCCO DELAPA
SA F E T Y WATCH
Ford Announces
4 RECALLS NO INJURIES REPORTED BY AUTO REMARKETING STAFF
Ford Motor Co. recently issued four safety recalls in North America. Only one accident and no injuries are known to be related to the recalls. The vehicles recalled are as follows, according to Ford. 2015 Lincoln MKZ A compliance recall is active for certain 2015 Lincoln MKZ vehicles made between Feb. 17, 2014, and March 19, 2015, at the Hermosillo Assembly Plant, numbering 22,616 units, which have a possible park lamp issue. When the headlamps are on, the park lamps are brighter than regulations allow, which may adversely affect the vision of oncoming drivers. Ford said 21,435 of the vehicles are in the U.S., 1,066 are in Canada and 115 are in Mexico. 2015 Ford F-150 Ninety-one F-150s made between Jan. 30 and Jan. 31 at the Dearborn Truck Plant are being recalled for a potential underbody heat shield issue. For affected vehicles, the underbody heat shields may be improperly installed or missing, increasing fire risk. Seventy-three of the vehicles are in the United States, 18 are in Canada. 2014 Ford Focus, Edge, Escape & Transit Connect; 2014-2015 Ford Fiesta Several Ford models are being recalled for a potential fuel pump issue. The vehicles include 50,157 of the following: certain 2014 Focus, Edge, Escape and Transit Connect vehicles, as well as certain 2014-2015 Fiesta vehicles. These vehicles have a potential issue with the nickel plating on the fuel pump, which may cause it to seize and may cause the vehicle to not start or stall while driving, the latter increasing the risk of a crash. There is currently one allegation of an accident that Ford is aware of that may be related to the condition. 45,505 of the vehicles are in the United States and federalized territories, 4,618 are in Canada and 34 are in Mexico. 2013-15 Ford Fusion & Lincoln MKZ; 2015 Ford Edge Several Ford models are being recalled for a potential steering gear motor attachment issue. Totaling 518,313 units, the affected models include certain 2013-15 Fusion and MKZ vehicles as well as certain 2015 Edge vehicles. In what Ford calls corrosion states and provinces of North America, the potentially affected vehicles may have steering gear motor attachment bolts that may fracture due to corrosion cracking, resulting in the steering system potentially reverting to manual steering mode, making the vehicle more difficult to steer. 487,301 of the vehicles are in the United States and federalized territories; 31,012 are in Canada.
DE A L ER SP OT L IGH T
Best of Both Worlds DEALER CUSTOMIZES LINCOLN WITH MODERN UPGRADES
DJ Johal sells cars by day, and creates art after hours. To say he is passionate would be an understatement.
WEST COAST DEALER
| AUGUST/SEPTEMBER
2015
|
W W W. I A D A C . O R G
soft, lazy, primitive suspension can take the fun out of driving one of the classics. DJ solved that problem by gutting one of the rarest classics and fitting a modern day drive train underneath. His most recent project is a very limited production 1964 Lincoln four door (suicide rear doors) convertible. The new chassis and drive train is Lincoln also, but some 48 years newer. The donor car was a 2012 Lincoln Town Car, which also provided the interior, including the dash. Adding modern day upgrades made this car a Owner of California Auto pleasure to drive, not to mention Sales in Stockton, outside the much safer. DJ added minor dealership DJ the artist creates his custom touches to the body such masterpieces using Detroit iron. as blacked out trim and bumpers, Those nostalgic, classic vehicles plus 20� wheels made especially are the basis for his work but, as for this car with the exact offset to many of us know, they are great fit the wheel opening. It seems this to look at but often not so great to Lincoln really is the best of both drive. Huge steering wheels and worlds!
14
ASSOCI AT ION NE W S
IADAC Quality Dealer of the Year ACCEPTING NOMINATIONS
It’s that time again! If you know of a deserving dealer we urge you to send us your nomination for the Quality Dealer of the Year award! Annually this award is presented at the fall convention. This year’s event will be October 9 and 10 at Harvey’s Lake Tahoe. The Quality Dealer of the Year will be announced during the Quality Dealer Luncheon.
FROM LEFT: 2014 QUALITY DEALER NOMINEES MIKE MCCARTHY AND MEHDI CHITGARI AND 2014-2015 QUALITY DEALER OF THE YEAR AWARD WINNER JERRY KHAN. THE AWARD WAS PRESENTED BY BRIAN KELLY, SECRETARY OF THE CALIFORNIA DEPARTMENT OF TRANSPORTATION.
This award is open to all IADAC dealer members. Qualified nominees are outstanding, compliant dealers who provide a high level of customer satisfaction. At the convention, ballots are provided to all in attendance along with a bio for each nominee. Vote tallying is done by the previous year’s award winner and our keynote speaker will announce the winner at the conclusion of the event. Nominees must be present at the convention to be considered for the award. Please help us out and make your recommendation for that special dealer who goes above and beyond to give his customers the best car-buying experience. You may submit your nominations to larry@iadac.org. Please send them as soon as possible to allow for processing.
WASHING TON UP DAT E
NIADA Government Report
WEST COAST DEALER
| AUGUST/SEPTEMBER
2015
|
W W W. I A D A C . O R G
HERE’S A RUNDOWN OF SOME OF THE LATEST GOVERNMENTAL ISSUES AND ACTIVITY AFFECTING THE USED CAR INDUSTRY FROM NIADA REGULATORY COUNSEL SHAUN PETERSEN AND NIADA LOBBYIST SANTE ESPOSITO.
16
Consumer Financial Protection Bureau Diversity standards: The CFPB was among six federal agencies that issued final new diversity and inclusion standards that took effect June 10. They apply to all entities regulated by the CFPB. The agencies were required by statute to create an Office of Minority and Women Inclusion and develop standards for assessing the diversity policy and practices of entities regulated by them. The standards take into account an entity’s size, assets, number of employees, structure, revenues, number of members and/or customers and other factors. The CFPB is soliciting comments, due Aug. 10, about how the requirement might affect regulated entities. NIADA is evaluating whether to submit comments. Larger Participant Rule: The CFPB released its final rule defining non-bank larger participants in automotive financing, giving the bureau authority to supervise any nonbank entity that makes, acquires or refinances 10,000 loans or leases in a year. The rule takes effect 60 days from the date it is published in the Federal Register – likely late August. NIADA submitted comments about the proposed rule in December, suggesting, among other things, that additional larger participant rules specific to Buy Here-Pay Here dealers might be needed. The CFPB said it is within its jurisdiction to consider a BHPH-specific rule, as it considers BHPH a different business model than other forms of auto finance. NIADA will continue to work with the CFPB regarding the BHPH market. The CFPB also updated its guidance on monitoring auto finance companies, saying it will closely watch direct marketing to consumers for deceptive tactics, assess whether information companies provide to credit bureaus is accurate, review debt collection practices and closely watch compliance with the Equal Credit Opportunity Act. The rule and guidance
are available at www. consumerfinance.gov. Arbitration: More than 80 House and Senate Republicans sent a letter to CFPB director Richard Cordray asking the CFPB to revisit its study on arbitration, saying the process that led to the study was not fair, transparent or comprehensive. The lawmakers asked the bureau to reopen the study, seek public comment and provide a cost-benefit analysis to understand how a similarly situated consumer would fare in arbitration as compared to a lawsuit. Disparate impact: American Banker reported the CFPB is nearing settlement agreements with American Honda Finance Corp., Toyota Motor Credit Corp. and Nissan Motor Acceptance Corp. related to claims the three entities had unintentionally discriminated against minority borrowers. The report said the CFPB claims the companies did business with dealers who marked up loans at higher rates to minorities. They will reportedly limit the discretionary pricing allowed to dealers and pay consumer restitution. And in a case followed closely by the financial services industry, the Supreme Court ruled 5-4 that disparate impact is a valid legal theory under the Fair Housing Act. While the case did not specifically deal with the Equal Credit Opportunity Act and automotive lending, the CFPB and others will likely use the case to continue their pursuit of disparate impact claims in automotive lending. Federal Trade Commission Abernathy Motor Company and its two owners settled a lawsuit filed by the FTC alleging they failed to comply with the Used Car Rule, the result of a 2012 sweep of dealers in Jonesboro, Ark., and the dealership’s alleged failure to display Buyers Guides in its vehicles after the FTC’s warning. The dealership will pay a $90,000 civil penalty. Department of Justice The owner of a Louisianabased media firm was sentenced to 135 months in prison for
orchestrating a $1.2 million dollar scheme to bill dealerships in Louisiana for fictitious advertising services. Department of Labor The department released proposed rule, endorsed by the President, to raise the threshold for overtime-exempt salaried workers from $455 a week ($23,660 a year) – below the poverty threshold for a family of four – to a projected $970 a week ($50,440 a year) in 2016, making overtime pay and the minimum wage required for nearly 5 million more employees. That threshold would be automatically updated based on inflation or wage growth over time. NIADA will review the proposed rule and make appropriate comments to the department. National Motor Vehicle Title Information System The NMVTIS enforcement coordinator sent a letter to approximately 700 Florida businesses, including some used car dealerships, that had registered for a NMVTIS reporting ID number but had never used it to report vehicles to the agency. Those required to report are junk or salvage yards, which are defined as “an individual or entity engaged in the business of acquiring or owning [junk or salvage] automobiles for 1) resale in their entirety or as spare parts or 2) rebuilding, restoration, or crushing.” Based on the letter, DOJ believes used car dealers might meet one of those definitions. LEGISLATIVE REPORT Military Pay Allotment The Senate passed its version of the Fiscal Year 2016 National Defense Authorization Bill on June 18 – without the NIADAproposed language calling for the Secretary of Defense to brief the Armed Services Committee on the “process and justification” for the recent decision to prohibit military personnel from using their pay allotments to purchase motor vehicles and other personal items, which had been included in the House-passed version. NIADA continues working with Armed Services Committee member Sen. Lindsey Graham
RUNDOWN OF SOME OF THE LATEST GOVERNMENTAL ISSUES (R-S.C.) and Sen. Thom Tillis (R-N.C.) with a focus on having the Senate recede to the House in conference on the bill. H.R. 1737, Reforming CFPB Indirect Auto Financing Guidance Act NIADA joined with other stakeholders in signing a June 10 letter of support of the bill, introduced April 13 by Rep. Frank Guinta (R-N.H.), which now has 108 bipartisan cosponsors. The bill would rescind the CFPB’s controversial 2013 auto financing guidance that claimed dealer discretion on interest rates creates a risk of discrimination and provide a more transparent and accountable process for dealing with the issue. The goal is to get as many bipartisan cosponsors as possible to pressure the CFPB to initiate its own self-reform and/or convince House leadership to move the bill.
AUC T ION NE W S
Brasher’s Fresno Auto Auction Grand Opening AUCTION GROUP CELEBRATES NEW LOCATION
WEST COAST DEALER
| AUGUST/SEPTEMBER
2015
|
W W W. I A D A C . O R G
The independent chain of Brasher’s Auto Auctions has added a Fresno, California, location to their group of auctions in California, Utah, Idaho, Nevada and Oregon. The grand opening was held on May 15. The festivities included games and prizes plus a record number of attendees and consigned vehicles. “Imitation is the most sincere form of flattery” was expressed by the auction staff, who adorned themselves with general manager Larry Champagne’s signature straw hats and whistles and joined him to kick off the event. Brasher’s auction chain has a proven track record and has plans to grow this location in the future. Brasher’s Sacramento AA president John Brasher was on hand for the event along with assistant general manager Rod Davis.
18
AUCTION STAFF ADORNED THEMSELVES WITH GENERAL MANAGER LARRY CHAMPAGNE’S SIGNATURE STRAW HATS AND WHISTLES TO KICK OFF THE EVENT.
P RODUC T S & SERV ICES
M A N AGEMEN T M AT T ERS
NextGear Integrates KBB Values Within Apps
Theft Tricks DON’T FALL FOR THIS ONE
WEST COAST DEALER
| AUGUST/SEPTEMBER
2015
|
W W W. I A D A C . O R G
Auto dealers have any number of things to be wary of when it comes to operations, policy, compliance and much more. But we can’t forget we are targets for thievery also. While you constantly shore up your defenses trying to protect your inventory, thieves too lay awake at night concocting new ways to gain the advantage. It’s usually pretty gut wrenching to come to your store in the morning to find that a vehicle has been stripped or stolen during the night. One method that has popped up is for the thief or an accomplice to visit during the day and ask to see a vehicle. After they look the car over, they will politely lock the car and switch the key with an identical-looking key but with a different cut. As long as you don’t have another customer on that vehicle before closing you may not be the wiser. Later, after hours, the thief will return and drive the car off the lot. The solution to this problem is to create a policy that doesn’t provide an opportunity for the thief to switch keys. If your sales staff just tosses keys to customers when they’re busy with other things, you are inviting trouble. Make sure you know you got your key back from the customer.
20
INTEGRATION PROVIDES CURRENT MARKET-REFLECTIVE VALUES BY SUBPRIME AUTO FINANCE NEWS STAFF
ONE METHOD THAT HAS POPPED UP IS FOR THE THIEF OR AN ACCOMPLICE TO VISIT DURING THE DAY AND ASK TO SEE A VEHICLE. AFTER THEY LOOK THE CAR OVER, THEY WILL POLITELY LOCK THE CAR AND SWITCH THE KEY WITH AN IDENTICAL-LOOKING KEY BUT WITH A DIFFERENT CUT.
In effort to help dealers monitor their floor planning resources more efficiently, NextGear Capital has added Kelley Blue Book values to its myNextGear Web and mobile applications. As a result of this integration between the two Cox Automotive business units, NextGear Capital customers can now receive current market-reflective values at no additional cost for new and used vehicles. “By continually adapting the way we put information in front of our customers, we can offer them greater flexibility in how they do business,” said Bryan Everly, chief technology officer with NextGear Capital. “We are constantly challenging ourselves to make our product better, and that includes providing cross-platform functionality with other Cox Automotive solutions,” Everly continued.
The addition of Kelley Blue Book values comes less than a year after NextGear Capital added MMR values to myNextGear. Through these evaluation tools, dealers have access to entry-level data to help them make informed purchasing and selling decisions from either the comfort of their office or on the go. “Trusted by consumers and the industry, it was a natural choice to provide Kelley Blue Book values to NextGear Capital customers,” said Dan Ingle, vice president of vehicle values and industry solutions for Kelley Blue Book. “Kelley Blue Book’s information will not only help mitigate risk, but this aligns with the overall company strategy to provide relevant marketreflective values at the point they are needed in the transaction process.”
21
WEST COAST DEALER
|
AUGUST/SEPTEMBER 2015
|
W W W. I A D A C . O R G
L EG A L M AT T ERS
Legal Minute CLRA DEMAND LETTERS: WHAT EVERY DEALER NEEDS TO KNOW
If you sell cars for a living, chances are you’ve received a CLRA demand letter. The Consumers Legal Remedy Act, or “CLRA,” provides remedies for numerous categories of misrepresentations (or omissions of important facts) made during the course of a consumer transaction. The CLRA’s provision of attorney’s fees for the prevailing party makes it a favorite claim of plaintiff’s lawyers where even a minor technical violation in a sales document can serve as grounds to recover a large attorney’s fees award.
WEST COAST DEALER
| AUGUST/SEPTEMBER
2015
|
W W W. I A D A C . O R G
BY TIMELY PROVIDING THE CONSUMER WITH AN APPROPRIATE OFFER FOR “CORRECTION, REPAIR, REPLACEMENT, OR OTHER REMEDY” THE DEALER MAY BE ABLE TO SETTLE THE CASE EARLY AND AVOID LITIGATION ALTOGETHER.
22
The CLRA demand letter, or “pre-suit notice,” is required by law to be sent at least 30 days before a plaintiff can sue for damages under the CLRA. The caveat “for damages” is important and has created a loophole under the CLRA’s attorney’s fees provision where a plaintiff can file an action under the CLRA for “injunctive relief” before the 30-day notice period has expired and later amend their complaint to include “damages.” The effect of this legal maneuvering is to start the meter running on their attorney’s fees as early as possible, fees which they will include as part of any settlement negotiations and which they are entitled to collect if they prevail at trial. The concept behind the pre-suit letter is to provide an opportunity to resolve the consumer’s complaint without resorting to litigation. The act gives the alleged violator 30 days after the notice to agree
to give the complaining consumer an appropriate “correction, repair, replacement, or other remedy” (Cal. Civ.Code § 1782(b)). If the consumer rejects the offer, his claim for damages will be barred. By timely providing the consumer with an appropriate offer for “correction, repair, replacement, or other remedy” the dealer may be able to settle the case early and avoid litigation altogether. But even in the event a lawsuit has already been filed or a consumer proceeds with a lawsuit notwithstanding the corrective offer, the rejection of the timely remediation offer can cut off an individual plaintiff’s right to damages under the CLRA and may lessen, or eliminate altogether, a plaintiff’s right to attorney’s fees. Determining the appropriate response to a CLRA demand letter requires time to investigate the particular circumstances of the case and formulate a corrective offer that complies with the statute. With that in mind, it is critical that the dealer
BY THE SCALI LAW FIRM
transmit the CLRA demand letter to its attorney immediately after receipt so that an appropriate response under the statute can be put together and sent out within the 30-day time period. And if the CLRA demand letter includes an ASFA violation? A dealer’s window for a pre-litigation response shrinks to a mere 10 days. We’ll have more on how to respond to consumer complaints of an ASFA violation next month ARTICLE PROVIDED BY CHRISTIAN J. SCALI, ROBERT D. DANIELS, JOHN P. SWENSON OF THE SCALI LAW FIRM, IADAC PREFERRED PROVIDER: (213) 618-4371.
JOHN P. SWENSON
CHRISTIAN J. SCALI
ROBERT D. DANIELS
INDUS T RY NE W S
NABD Conference BHPH DEALER’S CANDY STORE
|
W W W. I A D A C . O R G
www.iadac.org, click the green “Sign up for Newsletter” button on the left border and add your name and email address. Your information will not be used to solicit.
AUGUST/SEPTEMBER 2015
mitigate liability and improve their profitability. You can find out about upcoming events such as this by signing up for the IADAC newsletter, a free service. Go to
|
BHPH model is unique, an owner should recognize that hidden profit may exist in areas not normally considered. One suggestion was that the creation of a secondary finance company could save significant tax dollars. Each session was interactive and the audience appreciated the opportunity to ask questions of the speakers. Dealers face new obstacles every day in heightened regulations, scrutiny from CFPB, FTC and other government agencies and must be able to present some awareness of these trends in their day to day operations. At conferences such as this dealers can learn how to
WEST COAST DEALER
In May, Ken Shilson and company held their annual BHPH Conference at the Wynn in Las Vegas. The event featured numerous concurrent sessions covering every topic imaginable targeting the BHPH business model. Over 1,500 dealer attendees were on hand and many vendors packed the expo hall. Dealers had access to information regarding compliance, capital, inventory, losses, portfolio purchasers, reconditioning, payment devices and much more. Every session was packed with dealers from across the country seeking information to improve their businesses. Because the
23
ASSOCI AT ION NE W S
2015 NIADA Convention THE 69TH ANNUAL NIADA CONVENTION AND EXPO WAS ALL ABOUT CHANGE
WEST COAST DEALER
| AUGUST/SEPTEMBER
2015
|
W W W. I A D A C . O R G
The 69th annual NIADA Convention and Expo was all about change – and there was plenty of that. For starters, 20 percent of those on hand at Caesars Palace in Las Vegas were attending the NIADA Convention for the first time. And for only the second time in association history, a woman – Darla Booher of South Carolina – was named National Quality Dealer of the Year. Of course, the change referenced in the event’s “Ready, Set, Change” theme is the change that is sweeping the used vehicle industry into the future – the rise of technology, better informed customers, increasing government regulation and much more. And that, too, was very much in evidence at The Used Car Industry Convention, from beginning to end. Helping independent dealers adapt to those changes and thrive was the driving force of the convention, starting with Joe Lescota’s standing-room-only dealership marketing/merchandising workshop Monday morning and continuing through the NIADA director of dealer development’s
24
wrapup session Thursday afternoon. In between were almost two dozen dealer training opportunities covering all aspects of the industry – from sales to financing to management and more – many of them part of tracks focused on retail, Buy Here-Pay Here and compliance. The convention’s highlight was delivered by former Navy SEAL Robert O’Neill, who electrified a packed ballroom with his keynote address, “Never Quit: The Story of a Life Built on Successful Missions.” O’Neill mixed an inspiring message about success, preparation, trust and perseverance with thrilling and humorous stories of his demanding SEAL training, when he learned that stress is self-created and must be set aside, and his often harrowing missions. And there was plenty more going on. The convention opened with a poolside Cigars and Martinis Welcome Reception that drew its biggest crowd ever, and closed with a rocking party that followed the crowning of the newest National Quality Dealer. The NQD ceremony was one of
two events honoring the industry’s best, along with the National Leadership Awards Banquet, at which Frank Fuzy was introduced as NIADA’s new president. Not to mention an Expo Hall filled with companies offering the industry’s top products and services. It all added up to one of the most successful conventions in the association’s history. Boosted by the influx of first-timers, attendance was up 8 percent from 2014. And the reviews were outstanding. “Other conventions I’ve been to often seem like more of a show,” said Todd Hoagey of Auction Direct USA, New York’s State Quality Dealer and a first-time attendee. “The NIADA Convention was a workshop. Dealers wanted to learn how to improve their business and NIADA provided a great range of topics to assist them in doing that.” Next year’s event will again be in Las Vegas, but at a new venue – the Mirage. Planning has already begun for the 70th NIADA Convention and Expo, set for June 13-16, 2016. Save the date and don’t miss your chance to be part of The Used Car Industry Convention and Expo!
M A N AGEMEN T M AT T ERS
EMBRACING TECHNOLOGY IN EVERY AVENUE OF BUSINESS THESE TOOLS CAN PROVIDE INSIGHT ON POTENTIAL MARKET OPPORTUNITIES TO DEVELOP YOUR BUSINESS AND IMPROVE INCOME OPPORTUNITIES.
W W W. I A D A C . O R G
your business and improve income opportunities. In this business, you need to take advantage of any resource that can help increase your bottom line, and that means having the right technology. So next time you’re talking with your floor plan account representative, you should make it a point to ask what the company is doing to stay ahead of the technology game.
|
right technology to allow you to efficiently make purchasing decisions. What’s exciting is that floor planning has never been faster or easier. The availability of online and mobile solutions allows you to manage your account directly from your computer, tablet or smartphone. This includes making payments, viewing titles and reviewing key performance indicators specific to your account. Technology advancement has also allowed for cross-platform functionality, meaning you should ask if your floor plan provider is integrated with evaluation tools such as MMR, Black Book or Kelley Blue Book. These tools can provide insight on potential market opportunities to develop
AUGUST/SEPTEMBER 2015
and online. With the abundance of information available to consumers, it’s imperative that dealers also take advantage of the technology available to them. At bare minimum, it’s important to understand online avenues like OVE and Cars.com when it comes to purchasing and selling inventory. However, there are a number of other tools, like vAuto’s AuctionGenius or ProVision, which can help you accurately source and manage inventory with the click of a button. Additionally, in a world where time is money, the technology offered by your floor plan provider can be beneficial to your bottom line. Therefore, it is vital you partner with an inventory finance company that offers the
BY NEXTGEAR CAPITAL
|
Technology has grown by leaps and bounds over the last few years, which means consumers are more tech-savvy today than at any other time in history. Not only do consumers have a wide scope of information available to them via online channels such as Autotrader, Cars.com and TrueCar, but the use of social media as a community to discuss questions, issues and wants continues to rise. In a recent study by Capgemini, 73 percent of 10,571 individuals stated they are more likely to buy a specific model or brand if they find positive comments on social media. This showcases the importance of being accessible, responsive and proactive in delivering value-added services to your customers, both in person
WEST COAST DEALER
TECHNOLOGY ADVANCEMENTS AND FLOOR PLANNING
25
COMP L I A NCE OV ERDRI V E
Bouncers at the Barbecue
WEST COAST DEALER
| AUGUST/SEPTEMBER
2015
|
W W W. I A D A C . O R G
RED FLAGS, OFAC AND FORM 8300
26
Summer is finally here. It’s that time of year when we find ourselves surrounded by friends and family at the cabin or at home around the grill. Unfortunately, sometimes an unexpected (and usually uninvited) guest shows up that you’ve never heard of. When you meet, you’re not sure if you should relax or hide your valuables! At the auto dealership, you need to go beyond backyard handshakes. You need to know that when you do business with your customers they are who they say they are. In this installment of Compliance Overdrive, we’ll chew on red flags, Office of Foreign Assets Control (OFAC) and money laundering reporting requirements. They essentially act as the “bouncers” at your party and are designed to prevent you from doing business with dishonest people, such as identity thieves, people the U.S. government prohibits us from doing business with and money launderers. You don’t want them at your party and you don’t want to sell them a vehicle. The Federal Trade Commission’s “Red Flags” Rule (16 Code of Federal Regulations 681) requires creditors to create
programs to identify patterns, practices or activities that indicate possible identity theft. Generally, programs need to include reasonable policies and procedures to: (1) identify relevant “red flags” (patterns, practices and activities indicating a credit applicant might not be who she/he says she/he is); (2) determine ways to detect red flags; (3) determine appropriate responses to red flags when they are detected; and (4) provide for periodic updating of the Identity Theft Prevention Program. The program needs to be approved by your board of directors or a committee of the board. It also needs the board, a committee of the board or designated senior manager to oversee the program development, implementation and administration. You must also require staff training with periodic refreshers. And finally, it should include oversight of your service providers. Identifying and avoiding potential identity theft at an early stage can save your dealership money and time. Frankly, in today’s market, a dealership should have a Red Flags program even if it wasn’t required. It’s simply a good business practice. So take time this summer to review your Red Flags Program. Make sure it’s up to date and that everyone in your dealership is following it. Dealerships are prohibited from doing business with individuals and entities on a special list published by the U.S. Treasury Department’s Office of Foreign Assets Control. OFAC publishes and continually updates a list of these blocked individuals and businesses (“Specially Designated Nationals” or “SDNs”) as part of Treasury’s Sanction Programs. On its website, Treasury describes the list as “individuals and companies owned or controlled by, or acting on behalf of, targeted countries.” It also lists “individuals, groups and entities, such as terrorists and narcotics traffickers designated
under programs that are not country-specific.” By presidential executive order, their assets are blocked and people in the U.S. are prohibited from doing business with them. As part of your dealership’s compliance program, you should always check a potential buyer’s name against the current OFAC SDN list. The list changes with some regularity, so your process needs to include a way to make sure you are checking against the most current list. You can check the list manually by using the list on OFAC’s website or use commercially available software. Note that before you block a transaction, make sure the potential buyer not only exactly matches a name on the list, but also matches a number of other identifying information provided by OFAC for that person or business. The Treasury’s website “Resource Center – Sanctions” page has a step-by-step process to help you determine when you have a quality SDN match and should call the OFAC Hotline. Obviously, doing business with an SDN is illegal. It can also be very damaging to your dealership’s reputation. Consider reviewing your OFAC policies and procedures to ensure you are following the requirements and reviewing every customer and employee. Make sure you are always using the most current OFAC list. Federal law also requires certain transaction information be reported to the IRS and the Financial Crimes Enforcement Network (FinCen). Generally, when a business receives more than $10,000 in cash (U.S. or other currency) in one or more related transactions, the business must file IRS Form 8300. Any transactions you conduct with the same customer within a 24-hour period are considered “related transactions.” The requirement is designed to help the government identify possible money laundering of currency obtained through illegal acts or terrorist activities. There are many different scenarios that
BY CHIP ZYVOLOSKI
NOW IS A GOOD TIME TO REVIEW YOUR POLICIES AND PROCEDURES FOR IRS FORM 8300 TO ENSURE YOUR DEALERSHIP HAS AT LEAST ONE OR TWO EMPLOYEES WHO ARE FAMILIAR WITH THE VARIOUS POSSIBLE SCENARIOS AND CAN CORRECTLY RESPOND WHEN THEY OCCUR. might require you to complete IRS Form 8300 and several exceptions from coverage, which are outlined in the document. It’s important for your dealership to have policies and procedures in place so that IRS Form 8300 is completed when required. Failing to file Form 8300 when required is illegal. And again, it would be damaging to your dealership’s reputation if became known that you failed to report large currency transactions. Now is a good time to review your policies and procedures for IRS Form 8300 to ensure your dealership has at least one or two employees who are familiar with the various possible scenarios and can correctly respond when they occur. The Red Flags Rule, OFAC check and Form 8300 requirements are not new, but they are critical tools in the ongoing battle against financial crimes, including terrorism. Use these “bouncers” to keep untrustworthy people from ruining your dealership’s summer business. CHIP ZYVOLOSKI IS A SENIOR ATTORNEY FOR INDIRECT LENDING AT WOLTERS KLUWER FINANCIAL SERVICES. FOR MORE INFORMATION, VISIT WWW.WOLTERSKLUWERFS.COM/INDIRECT.