A Publication of the Florida Independent Automobile Dealers Association
Information and Insight for Florida Used Car Dealers
14 ANNUAL CONVENTION
A WRAP-UP OF HIGHLIGHTS FROM THE EVENT
22 LEGISLATIVE UPDATE
AN UPDATE ON THE STATUS OF REPOSSESSION STOPS
The first in a series of articles aimed at helping you understand your rights as a lienholder and how you can try to recover your money. Page 11.
FULTON, MO PERMIT NO. 38
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October 2012 — Independent Dealer — 1
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MAILING ADDRESS 1840 Fiddler Court Tallahassee, FL 32308 TELEPHONE (850) 385-2712 (800) 237-0448 FAX (850) 385-3251 WEBSITE www.FIADA.com E XECUTIVE COMMITTEE Brandi Noegel President Christopher Leedom Senior Vice President Jim Kagiliery Chairman of the Board Dino Mercurio Secretary John Cousins Treasurer
Contents October 2012
For members of the Florida Independent Automobile Dealers Association
C O L U M N S & F E AT U R E S 4
President’s Message Brandi Noegel
David Cox, CMD Regional Vice President Frank Fuzy Regional Vice President George Hickey Regional Vice President Steve Marbais, CMD Regional Vice President Paul Matton Regional Vice President
Executive Director’s Message Lisette Mariner
What’s In It For You? Leah Nash
Membership News New, Renewing and Rejoining Members
FIADA STAFF Lisette Mariner Executive Director
What Happens When Your Customer Files Bankruptcy? The first in a series of articles related to bankruptcy topics. Get a primer on bankruptcy basics including terms, timelines and tips.
2012 Annual Convention & Expo Wrap Up We are back from the beach with a fresh set of ideas and new energy. Take a look at the fun we had and the things we learned.
Thank You to our Convention Sponsors Recognition of the businesses and corporations that made the Annual Convention a success.
Title and Registration Training Take advantage of this new course being offered by the FIADA
Legislative Update An update on the status of repossession stops.
Legal Round-Up Attorneys Thomas B. Hudson and Nicole Frush Munro update dealers on important federal news and ongoing litigation of importance to dealers.
Don’t Walk Too Close to the Cliff HR specialists Landrum Human Resource Companies explain the dangers of not enforcing employee workplace standards.
Terry Myers Educational Instructor Sarah Langley Administrative Director Leah Nash Membership Coordinator Christy Taylor Editorial/Advertising
Send address changes to
FIADA • 1840 Fiddler Court Tallahassee, FL 32308 (850) 385-2712 • Toll Free: (800) 237-0448 Fax (850) 385-3251 • www.FIADA.com The Independent Dealer is a publication of: Florida Independent Automobile Dealers Association, 1840 Fiddler Court, Tallahassee, FL 32308 The magazine is published every month in Tallahassee and distributed to Florida new, used, wholesale and lease/retail car dealers. Advertising rates are available upon request. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of Independent Dealer or the Association. Likewise, the appearance of advertisers, or their identification as members of FIADA, does not constitute an endorsement of the products or services featured.
October 2012 — Independent Dealer — 3
FROM THE PRESIDENT
Then and Now BY BRANDI NOEGEL, FIADA PRESIDENT
o be President of the FIADA you need to love the automotive business. This is my last article as President and I have been very pleasantly surprised that so many of you have told me you read my articles and I thank you for your support. It has been a pleasure to have served you for the past two years and though it has been very rewarding it has sometimes also been very challenging. I am thankful to have had the hard work of the Executive Committee for their help in making this year a success. We have seen great success in the Board’s projects this year such as improving our computer system enhancing the database, and updating our website. We have also enjoyed a renewed interest in the FIADA Facebook page, thanks to the help of our Executive Director Lisette Mariner and Membership Coordinator Leah Nash. Terry Myers has done a great job with enhancing our education offerings through Continuing Education Classes, Dealer Training School sessions and the Florida Dealer Title and Registration training, which still has a few classes available through the end of the year. Soon, most of these courses will be available online at www.FIADA.com giving you the opportunity to participate from your computer. I believe it is very important to have good training for dealers and their employees and I think our efforts this year have helped. In addition to these classes I just mentioned, we must also remember the Town Hall Meetings held around the state that used expert speakers and open forums to keep you informed on issues that might affect your business. This year the FIADA worked with the Florida Sheriffs Youth Ranches in the state by organizing “Cars for Kids” events and bringing a greater awareness to the needs of this organization. Hundreds of underprivileged boys and girls either live at one of the ranches around the state or go to a youth camp administered by the Florida Sheriffs Youth Ranches and by helping them we are helping Florida’s children live healthier and more productive lives. This is not a government sponsored program and the Florida Sheriffs Youth Ranches operate off of donations and contributions, so all of our help is greatly appreciated.
4 — Independent Dealer — October 2012
The FIADA Legislative Committee was very active this past year under the guidance of Chairman Dino Mercurio and Lobbyist John Grant. They met with legislators face to face and talked to them about our industry. Going forward, It looks like we will continue to have a lot of good support in the coming legislative session. As Chairman of the Board next year, I will continue to encourage education for all dealers and employees. The car world as we did know it is continually changing and to stay in business you need to stay educated in the business. FIADA is the best resource for dealers around the state to be able to keep up. I hope along the way you have tried some of my ideas, tried to learn new technology, attended a Town Hall Meeting and an education class or a board meeting. I had a lot of fun at the Annual Convention last week, and am proud of our efforts to put the fun back into the Association with events like this. A special thanks to Convention Committee Chair, Frank Fuzy, for ensuring this year’s convention was a great one full of education, fun, and fellowship. One last thing, remember to take care of your ELT registration before the end of the year. You must now sign up with your provider and can get assistance in doing that at the state’s website www.flhsmv.gov or with the Division of Motorist Services Procedure Manual and forms www.3.flhsmv.gov/dmv/proc/. Remember, FIADA members get free activation when using Auto Data Direct as an ELT provider. In closing, I just want to personally say “Thank You” to each of you and look forward to new opportunities with the FIADA. Good luck to incoming President Chris Leedom as he gains the gavel and presses onward in the good fight of strengthening this Association that has been committed to serving the needs of independent auto dealers for over 72 years. Carol (Brandi) Noegel FIADA President www.fiada.com
October 2012 — Independent Dealer — 5
EXECUTIVE DIREC TOR’S MESSAGE
The Party’s Over... Or Is It? BY LISET TE MARINER, EXECUTIVE DIREC TOR
e are still unpacking and unwinding from the Annual Convention and Expo in Boca Raton, and I am still enjoying the memories and the good times we had. The weather was perfect, the hotel was first-class and the seminars and courses were top-notch. Then of course there were the parties. I can still smell the popcorn in the Expo Hall during the Family Fun Night and am still humming “Crocodile Rock” from the amazing Elton John tribute during the Awards Gala. If you were there, then you know what I mean. The Annual Convention may be packed up for another year but that does not mean the FIADA is sitting around doing nothing. Quite the opposite. When one event finishes another one is just beginning. Take for instance the upcoming Title and Registration seminars in Tampa on Nov. 5 and Orlando on Dec. 21. Or, the January Board of Directors Meeting and Town Hall meeting soon after. As an Association we are always working to provide you with new opportunities for continuing education, networking, professional development and business building. Keep reading the magazine, watching your inbox and logging on to www.FIADA.com to see what’s next on the agenda. Though the year is always full of events and meetings, the Annual Convention is probably the largest event the FIADA produces. It is our “crowning jewel” if you will. Thanks in large part to our sponsors, we are able to provide members an affordable weekend of learning, networking and fun. A special thank you must go to our Platinum Sponsor Manheim Auctions; Gold Sponsors eBay Motors, Leedom Group and Nowcom; Silver Sponsors A Dealer’s Journal, GWC Warranty and Spartan Financial Partners; and Bronze Sponsors ADESA, Auto Data Direct, Inc., Assured Vehicle Partners, Carfax, Dealer Funding, LLC, Goldstar GPS, Insurance Auto Auctions, Inc., Mechanical Breakdown Protection, Inc., Microbial Block Corporation, Title Technologies, Inc., Triumph Consulting Services, and Westlake Financial Services. Because of the generosity
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of our sponsors, we can bring down the costs of planning such an elaborate event to a price-point that does not break the bank. This year’s Expo was one of the best as well with a sold-out exhibit hall featuring 56 vendors representing products and services of value to all independent dealers. The exhibit hall was always buzzing and I saw lots of smiles as I looked around the room. The exhibit hall is kind of like a “mall” of sorts where you can stop by and pick up everything you need in one place, from lending services to promotional products to computer software to collateral protection. If you were not able to make it to the Expo, please check out our list of vendors with their contact information at our website at www.FIADA.com. These are all companies who care enough about independent dealers to take the time to meet with them one-on-one and help them find the right solutions for their business. You cannot get much better than that. I am always impressed by the FIADA leadership, but I was especially proud of our Board and Executive Committee at the Convention. Convention Commitee Chair Frank Fuzy and his wife Gina were the consummate hosts by helping to secure events like the Past President’s dinner cruise and the Gala entertainment and also sponsoring the take-away gifts at the beach day on Sunday. Past President Brandi Noegel was a stunning Master of Ceremonies at the Gala and incoming President Chris Leedom sparked excitement and enthusiasm about his vision for the future of FIADA during his acceptance speech. And of course, who can forget Paul Matton running around in his rainbow wig and clown shoes on Friday night? We may have closed the books on this one, but I’m excited to start thinking about next year, aren’t you? www.fiada.com
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BY LEAH NASH, MEMBERSHIP COORDINATOR
What’s In For You? is a series of articles that focuses on what FIADA can provide to you as part of its valuable member benefits. Leah Nash is FIADA’s Membership Coordinator and will be traveling statewide to meet with potential members and current members to determine what member benefits are most appreciated. Look for Leah at your dealership or an auction near you. Be sure to say hello!
ne of my favorite parts of this job is running into new dealers who are looking for guidance and find that in an FIADA member. It especially makes me proud when this happens organically and I find that one of our Board members have really made an effort to cultivate a new dealer. I had the pleasure of speaking to a brand new dealer, Scott Dawley, and he told me he got the chance to speak to incoming President of FIADA, Chris Leedom. Scott decided to reach out to Chris after learning that Chris was on the FIADA Board of Directors and lived in the same area as he did. Here is Scott’s story: Scott was in the Information Technology (IT) industry and, after learning about more employment cuts, decided to make a career change that, he decided, would have to last him for the next 20 years. He decided to pursue the idea of owning a used car dealership. He inquired about it at the DMV and was directed to FIADA. Scott took the pre-licensing class with Terry Myers and noticed that Chris Leedom, on the FIADA Board of Directors, was in his geographic area. He decided to email him:
Hello Chris. My name is Scott Dawley. Yesterday, I completed my pre-licensing class with Terry Myers to become a used car dealer in Sarasota. In our manual, I noticed that you are the current Senior Vice President for FIADA and also located in Sarasota. I just wanted to introduce myself and begin surrounding myself with the right people. For the most part, I am going at this alone and as a new dealer, you could imagine I am getting a lot of advice. My starting date should be before 8/15 with approximately 5 cars and working primarily through
8 — Independent Dealer — October 2012 September 2012
internet sales. I hope to hear from you and maybe meet with you one day. Regards, Scott” Scott received this response from Chris:
Scott, congratulations!! I believe you will find the business to be very rewarding. I am based here in Sarasota and would be happy to meet with you for lunch some day. Just let me know when you think might be the best time and we can get together. FIADA provides a tremendous backdrop of resources that are here to support you and help you succeed as a dealer. Chris
Chris also included his contact information and asked for FIADA staff to follow up with Scott about attending the upcoming Convention. Scott was extremely impressed and did meet Chris for lunch. He found Chris to be extremely knowledgeable, open and informative. Chris gave Scott great advice and even opened his own dealership up to Scott for help or access to inventory. “For Chris, who is as busy as he is with his own success, to take the time out for someone just starting out and give me valuable advice is priceless,” says Scott. “His impression will last though out the life of my dealership wherever it takes me.” Visit FIADA.com and click on “Join FIADA” to become a member or renew your membership, or scan this code with your mobile device. If you do so after reading this article, type Leah Nash in the Sponsor Name section of the online application. You may also contact Leah Nash at email@example.com to join or if you need membership recruitment assistance. If you would like to receive FIADA Facebook updates, please like the FIADA page at facebook. com/FLIndAutoDealersAssoc. www.fiada.com
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August 2012 — Independent Dealer — 9 October 2012 — Independent Dealer — 9
New Members aLLIANCE INSPECTION MGMT. Long Beach, CA Eric Gettemy Sponsor: FIADA AUTO ELITE GROUP Pompano Beach, FL MacKenzie Pierce Sponsor: FIADA CAR MASTERS OF SOUTH FLORIDA Miramar, FL Eduardo Dasilva Sponsor: FIADA DALLAS CATHY Land O Lakes, FL Sponsor: FIADA DISCOVERY AUTO CENTER LLC Tampa, FL Rabih Semaan Sponsor: FIADA
KATHY RENNIE Safety Harbor, FL Sponsor: FIADA
30+ Year Members Ray’s Used Cars Tampa Machinery Auction
MG AUTO SALE CORP Orlando, FL Mustafa Ghulam Sponsor: Leah Nash
20+ Year Members Chuck Carlson Auto Sales, Inc. Toy Store
Pompano Beach, FL Largo, FL
10+ Year Members Auto Brokers of Orlando Florida Auto Dealer School Frontier Motors, Inc. Independent Credit, Inc. Leedom Group Lighthouse Children Home, Inc. Refine Coach, Inc. Williams and Stazonne
Orlando, FL St. Petersburg, FL Pensacola, FL West Palm Beach, FL Sarasota, FL Tallahassee, FL Miami, FL Cocoa Beach, FL
Under 10 Year Members A Dealer’s Journal Auction Direct USA B & B Truck Coral Central Florida Used Car Mart Chip’s Used Cars Copart, Inc. Dealers Insurance Services, LLC DealerTrack Encore Motorcars of Sarasota Enterprise Rent A Car Florida FIne Cars, Inc. King Insurance Martin’s Used Cars, Inc. Nice Car, Inc. No. 1 Auto Sales, Inc. Planet PreOwned S.W. Motorsports of Bradenton Splish Splash Auto Sales, Inc. Tallahassee Salvage, Inc. The Motorcoach Store Traditional Motorsports Veneauto Cars Vettes Unlimited Waterfront Auto Sales, Inc.
Homestead, FL Jacksonville, FL Tampa, FL Mascotte, FL Atlantic Beach, FL Riverview, FL Orlando, FL South Jordan, UT Sarasota, FL Coconut Creek, FL Miami, FL Gainesville, FL Ocala, FL Hollywood, FL Hollywood, FL Orlando, FL Bradenton, FL Princeton, FL Havana, FL Bradenton, FL Lakeland, FL Gainseville, FL Crestview, FL Port St. Joe, FL
OMNI AUTO SALES, INC. Miami, FL Orestes Espinal Sponsor: Don Scott TAHO TRADING, INC. Coral Gables, FL Ricardo Laporta Sponsor: FIADA XTREME AUTO WHOLESALERS, INC. Ocoee, FL John Papatzanakis Sponsor: FIADA
GROUPCAR LLC Miramar, FL Martin Delloca Sponsor: GWC
Rejoining Members S E P T E M B E R microbilt Kennesaw, FL Nina Norris
Rolling Wheels Inc Fort Lauderdale, FL Irvine Fraser
Is It Time to Renew Your FIADA Membership? Log in to www.FIADA.com to acces the online membership renewal portal.
SEPTEMBE R 2012 Dade City, FL Thonotosassa, FL
FIADA is your number one source for advice and information. Technical questions, legal questions, regulatory questions... bring them on! Our network of industry veterans, professionals and consultants can help you find the answers you are looking for. The best part is, it’s free to FIADA members. Call us anytime! 10 — Independent Dealer — October 2012
Independent Dealer is taking a closer look at the topic of Bankruptcy. Here is the first of a series of articles that will examine the issue and provide you with strategies you can use to protect yourself. By CHRIST Y TAYLOR
f you are in the Buy Here Pay Here business, or have ever extended credit to a customer, then chances are you have had to try to protect yourself from a customer filing for bankruptcy. According to the Administrative Office for the U.S. Courts, more than 1.5 million consumer bankruptcy filings were processed between September 2011 and 2012, a 14 percent increase from the previous year. There are a lot of terms, definitions, rules and timelines that go along with a bankruptcy case and understanding it can be confusing. Bankruptcy can be quite challenging to understand, and depending on your involvement, can require different things. Before you can develop strategies to protect the money you are owed, you need to have a solid grasp of bankruptcy procedures and protocols. Here is a basic primer on bankruptcy that can be helpful no matter if you are an expert or trying to understand it for the first time. The first thing you need to do when a customer files for bankruptcy is identify what type it is. Chapter 11, reserved mostly for businesses, and Chapter 13 filing is used when the goal is reorganization. Debtors work with the court to create a repayment plan that will allow them to pay back the debts that they owe. The majority of bankruptcy filings, however, are Chapter 7. In Chapter 7, businesses file because they plan on permanently closing and individuals file because they are looking for a “fresh start.” In either case, assets are liquidated and debts are discharged to clean the slate. When a customer files for bankruptcy, creditors are required by law to stop trying to collect on the debt. Trying to make contact with the customer or collect a Continued on Page 12. October 2012 — Independent Dealer — 11
BANKRUPTCY BASICS continued from Page 11.
payment from them is in violation of bankruptcy code and can open you up to a lawsuit. The proper procedure once a bankruptcy is filed, is to contact the attorney or court appointed trustee to work out an arrangement on how your debt will be handled. All of this starts when the creditor receives a “341” notice about the case. The 341 notice, which supplies the details and deadlines for the proceedings not only gives the creditor the bigger picture of the debtor’s financial situation but it also informs them of what type of bankruptcy is being filed, the date it was filed, the court that will preside over the case, the deadline to file a proof of claim, the details of when and where the first meeting of creditors will be and the rules for collecting what is owed. The 341 notice is a very important document, and when it is received should be opened with immediate action. The first thing to do after receiving the 341 notice is to take note of the deadline to file a “Proof of Claim” form with the bankruptcy court (see Figure 1). A Proof of Claim is usually printed on the back side of the bankruptcy notice, but can be downloaded from the www. uscourts.gov website. The bankruptcy notice will also include instructions on how to complete the Proof of Claim form. The Proof of Claim puts you on the list of creditors who are to be paid from the filer’s remaining assets. Attach copies of documents that support your claim, such as the certificate of title or loan agreement. Once the deadline for submitting Proofs of Claim has passed, the Trustee will review the claims to determine if there are any objections. Objections can be made for various reasons, such as claims that lack documented support, late filing, incorrect amount owed, incomplete forms, lack of signature, mischaracterization of the type of debt and so forth. After all of the claims have 12 — Independent Dealer — October 2012
been reviewed, the Trustee will file an Objection to Claims with the court, which will give the grounds for the objections on each objected claim. The Trustee will ask that the claims either be rejected entirely, reduced or changed. The Objection will include a date and time for a hearing. If your claim is included in the Objection, you will need to attend the hearing to defend your position. One of the next things to happen is a “341” Creditors Meeting for the courtappointed trustee, the debtor and creditors. At the meeting, the debtor will explain their reasons for filing bankruptcy and what is going to be done. As a creditor, you are invited to attend this meeting and may have the chance to ask questions of the debtor. You can also object to the repayment or reorganization plan that has been submitted if you feel the debt owed you is not being addressed fairly. Additionally, within the first four months of the bankruptcy case the debtor will be working on a
reorganization and/or repayment plan. When the trustee approves the plan, it is sent to all of the creditors for review. For the plan to be approved, the debtor needs to have the consent from more than 50 percent of the total number of creditors and from more than two-thirds of the debt owed. The process of filing bankruptcy, providing proof of claim and verifying it, approving a plan to repay the debt claims and then actually receiving payment can be quite lengthy, with the average case taking anywhere between four and seven months. There are also filing fees, court fees and attorney fees that must be paid. Creditors should consult with their attorney, and decide what the course of action should be. Pursing the claim will depend largely on how much debt is owed, the cost of time, money and resources to pursue it and the chances of being paid back. The information included in this article is general in nature and is not intended to be legal advice. Anyone reading this infrmation is advised to seek advice from an attorney regarding the applicability to their individual circumstance.
FIGURE 1: PROOF OF CLAIM A proof of claim should be filed by the creditor to stake their legal claim to any assets or payments made under the assets liquidation or repayment plan of a bankruptcy case. Proof of Claim forms usually are included with the bankruptcy notice and contain instructions on how to fill them out correctly. If needed, creditors can download a PDF of the Proof of Claim, also called the B 10 (Official Form 10) at the United States Court’s website by logging on to www.uscourts.gov. Click on the Bankruptcy tab and then follow the Quick Links to Bankruptcy forms www.fiada.com
MARK OF SERVICE
We wear our commitment to dealers proudly on our sleeves. Count on the Dealer Avenue team for dedicated service at ADESA. Visit us online at ADESA.com/sell.
ADESA Jacksonville 904-764-1004 Sale day: Thursday
ADESA Ocala 352-351-5100 Sale day: Friday
ADESA Sarasota 941-756-8478 Sale day: Friday
ADESA Tampa 813-620-3600 Sale day: Monday
© 2012 ADESA, INC.
Contact your nearest ADESA location:
October 2012 — Independent Dealer — 13
he weather was perfect, the resort was spectacular and the camaraderie was contagious at FIADA’s 63rd Annual Convention and Expo. It was a jam-packed weekend with plenty of opportunities for learning and fun. For the first time, FIADA unveiled a set of seminars that were conducted in Spanish, giving a multi-lingual option for attendees. The exhibit hall was sold out with a wide selection of vendors and suppliers. There were new faces, as well as familiar ones and some that had not been around for a while. It was the perfect place to meet, greet and reconnect.
Dealers packed the house to get important industry updates and information.
It was great to catch up with old friends, like George Hickey, Bob Galloway and Bob Snider.
Keynote Speaker D.J. Harrington suggested looking at things differently for a positive change. (L to R) Brandi Noegel, Gina Fuzy and Frank Fuzy clowning around at the Family Fun Night. 14 — Independent Dealer — October 2012
The Elton John tribute thrilled the audience at the Annual Gala. www.fiada.com
“GoldStar GPS – We can’t imagine doing business without them.” “Our dealership has been in business since 1956 and since the GPS craze first came onto the market I have tried many different GPS companies. GoldStar GPS is by far the best solution available. Their devices are the most reliable, their tech support is extremely helpful, and the customer service team is professional and always there when we need them. There is no possible way to have the peace of mind our BHPH dealership needs without GoldStar GPS.”
Don Owen, Owner OWEN MOTORS, INC. l Sarasota, FL
CALL TODAY: 1-866-655-8825 GoldStarGPS.com
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October 2012 — Independent Dealer — 15
ll roads led back to the Expo Hall where Friday’s Family Fun Night featured carnival games and goodies along with the first chance to network with exhibitors. Saturday offered more time for resource-gathering as well as the chance to win some amazing prizes in both the vendor and FIADA sponsored door prize drawings. Stand It! was a popular game at Manheim’s booth.
Chris Leedom looking marvelous. FIADA’s future is in good hands!
FIADA gave away a brand new Kindle and a Samsung Galaxy Tab. Things are looking up for this exhibitor.
Gina Fuzy was happy winning a signed Dan Marino poster.
16 — Independent Dealer — October 2012
2012 Exhibitors A Dealer’s Journal A.R.A. GPS Systems, Inc. ADESA Alliance Inspection Management ASC Warranty Auction123.com Auction Genius AutoRevo AutoTrader.com Auto Data Direct, Inc. Auto Finance Auto Use Automotive Capital Resources AutoRaptor CRM CARFAX Dealer Funding, LLC Dealers Insurance Services, LLC Dealership Capital Partners Demandforce eBay Motors GoldStar GPS GWC Warranty Inilex, Inc. Insurance Auto Auctions, Inc. Ituran USA Inc. JP Morgan Chase Bank, N.A. Leedom Group Manheim MarkOne Financial www.fiada.com
McNutt Auto Logistics Mechanical Breakdown Protection Inc. Microbial Block Corporation MiroBilt National Auto Lenders Nowcom PassTime Positive Impact Solutions Rent A Wreck Used Car Rental and Leasing RouteOne LLC SmartAuction SouthEast Financial, LLC SiriusXM Software and Websites by Wayne Reaves Spartan Financial Partners Sterling Credit Corporation Systems 2000 Tax Refund Services - Tax Max Title Technologies, Inc. Triumph Consulting Services United Acceptance, Inc. UsedCars.com by Dealix Vet Shield/Vet Cars Warrantech (NIADA CPO) Westlake Financial ALPS Westlake Financial Services Williams & Stazzone Insurance Agency, Inc.
October 2012 — Independent Dealer — 17
FIADA Attorney Rob Sickles and FIADA Lobbyist Sandra Mortham briefed attendees with a Legislative Update.
Chris Leedom answers questions after his Keys to Buy Here Pay Here Success seminar.
Division of Motorist Services Deputy Director Steven Fielder and MASS Program Manager Felecia A. Ford. Federal Trade Commission Staff Attorney Robin Thurston talked about advertising practices. Attorneys Lewis Kuhl and Bill Denius. Brandi Noegel with keynote speaker D.J. Harrington.
It was standing room only in the education sessions.
18 â€” Independent Dealer â€” October 2012
Audience participation was key.
President’s Award Frank Fuzy Man of the Year Dino Mercurio Woman of the Year Christy Taylor Membership Recruitment Eagle Award Winners: (Top Row, L to R) Dino Mercurio, Don Scott, Bob Higgins; (Bottom Row, L to R) Terry Myers, John Cousins, Leah Nash and Sarah Langley. Not pictured: Kevin Scott. Cars for Kids participants: Palm Tree Auto Sales, Noegel’s Auto Sales and Southeast Car Agency.
Sarah Bannister accepting the Auction Person of the Year Award on behalf of Ellen Westphall.
Administrative Director Sarah Langley recognized for her 5 years of service to FIADA. NIADA President Chris Martin (L) extends the gavel to FIADA President Chris Leedom.
Outgoing FIADA President Brandi Noegel thanked for her service with the Crystal Gavel.
FIADA Quality Dealer Brandi Noegel (R) with daughter Ashley.
Frank Fuzy and Chris Martin rubbing shoulders with Elton John.
See more convention photos online at www.FIADA.com. October 2012 — Independent Dealer — 19
thank you Convention sponsors Thank you to the following sponsors supporting the FIADA Annual Convention and Expo.
20 â€” Independent Dealer â€” October 2012
What is acceptable proof of ownership in Florida, other states and/or countries? When is notarization acceptable/required?
Processing title paperwork correctly translates into faster processing by the tax collector’s office, helping dealers complete deals quickly and efficiently.
When and how does a lien get added/removed?
In FIADA’s new Title & Registration Training seminar students will use a manual, examples and case studies to help clarify ownership transfer starting with the MCO, ‘new’ title through the ‘used’ title. Training is hands on and students will get the opportunity to complete their own sample title paperwork. Special $79 rate for FIADA members if you register now.
Where do I find proof of present and past ownership, odometer readings and brands?
Upcoming Seminars: Tampa, November 5 │ Orlando, December 21
To register, call (800) 237-0448 or go to www.FIADA.com
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October 2012 — Independent Dealer — 21
L E G I S L AT I V E U P D AT E
An Update on Repossession Stops
uring the Division of Motorists Services Update Panel Discussion at the Annual Convention the topic of Repossession Stops was discussed. Below is a Fact Sheet that was distributed at the meeting that gives the background, problem and possible solutions to the subject. BACKGROUND In 2009, Florida passed Statute Section 320.1316 after a recommendation from the Automobile Lenders Industry Task Force to investigate problems within the automotive industry. The purpose of the statute was to help lien holders recover vehicles without court intervention. Under the Statute, when a lien holder notified the Department of Motor Vehicles (DMV) that a registered owner refused to comply with a demand for surrender, the driver’s name was placed on a list called “Surrender Stop.” Drivers on this list were not allowed to be issued license plates or vehicle registrations until the vehicle is recovered or the lien holder removes the person’s name from the list. THE PROBLEM A registered owner filed a lawsuit against the DMV. The lawsuit claimed that the current version of Section 320.1316 does not contain a procedure for the registered owner to dispute a demand for surrender. Technically, Florida Statute Section 320.02(17) states that if a registration applicant’s name appears on this list, DMV may withhold the renewal, registration or replacement registration of any motor vehicle owned by the applicant. Since the statute states “may withhold” instead of “must withhold,” the Division of Motor Vehicles has taken the position that they are not required to enforce the registration stops now. A POSSIBLE SOLUTION FIADA recognizes that DMV does not wish to be the messenger between lien holders and registered owners,
but lien holders need the protections afforded to them by law. FIADA is suggesting that Section 320.1316 be amended so that: 1. The form submitted to DMV by a lien holder be verified as true and accurate under oath by the lien holder or an authorized representative. 2. Registered owners may challenge the registration stop in the circuit court and recover their reasonable attorney’s fees and costs; and 3. That Section 320.02(17) be revised to require DMV to stop issuing license plates, revalidation stickers, or replacement license plates for anyone whose name appears on the list until their name is removed or ordered by a court. FIADA believes that these changes will eliminate any burden on DMV in resolving the handful of disputes they receive, and it will keep the protections that were granted in 2009. Surrender Stop also will limit the number of court actions filed by lien holders to recover hidden vehicles. The system proposed by FIADA is very similar to that through which a customer can challenge a motor vehicle repair shop’s lien or a towing and storage lien by filing a court action and posting a bond. Stay tuned for future developments on the Repossession Stop and other items on FIADA’s legislative agenda as the 2013 session approaches. FIADA’s Legislative Chairman Dino Mercurio and Lobbyist Sandra Mortham will be providing additional insight over the months to come and will give further details of any proposed legislation as it is created. In the meantime, consider using the form on page 23 to make a contribution to the FIADA PAC and help protect the rights of independent dealers in the upcoming session and others to come.
Read the statute for yourself!
Would you like to know exactly what the law currently says about Repossession Stops? Go online to www.leg.state.fl.us and type in 320.02 in the search bar, or scan this code with your mobile device. 22 — Independent Dealer — October 2012
Use this form to make your contribution, and mail to the FIADA office at 1840 Fiddler Court, Tallahassee, FL, 32808
SAVE THE STAMP! You can also make a contribution to the FIADA PAC by going online at www.FIADA.com!
October 2012 — Independent Dealer — 23
A Look At Current Legal Issues BY Thomas B. Hudson and Nicole Frush Munro, Hudson Cook, LLC
ere is a monthly collection of selected legislative and enforcement highlights, and a recap of some of the many auto sale and financing lawsuits Hudson Cook, LLC follows each month. (Note that this column does not offer legal advice. You should consult your dealership lawyer with any legal questions.) Federal Law (It’s All CFPB) What do you think of the CFPB’s 5-Year Plan? On September 25, the Consumer Financial Protection Bureau posted a draft strategic plan for the years 2013-2018 on its website and is seeking comments on the plan until October 25, 2012. The draft plan sets forth four strategic goals of the CFPB: (1) prevent financial harm to consumers while promoting good practices that benefit them; (2) empower consumers to live better financial lives; (3) inform the public, policy makers, and the CFPB’s own policymaking with data-driven analysis of consumer finance markets and consumer behavior; and (4) advance the CFPB’s performance by maximizing resource productivity and enhancing impact. The CFPB predicts that, by adopting these goals, it will encourage the development of a consumer finance market place (1) where customers can see prices and risks up front and where they can easily make product comparisons; (2) in which no one can build a business model around unfair, deceptive, or abusive practices, and (3) that works for American consumers, responsible providers and the economy as a whole. By the time you see this article, the time for comment may have already passed. So, what does this mean to dealers? It means that the CFPB plans on sticking around, even if there is a Republican President, a Republican Congress, and a conservative U.S. Supreme Court – not that we’re predicting the outcome of any election. The Bureau will continue to encourage clear disclosure of prices and risks associated with financial products and services and engage in enforcement actions and rulemakings designed to prohibit unfair, deceptive, or abusive practices. It means it’s time to clean the house, since your mother-in-law is here to stay. The CFPB Takes its Third Major Enforcement Action. In early October, the CFPB announced an enforcement action with orders requiring three American Express subsidiaries to refund an estimated $85 million to approximately 250,000 customers for illegal card practices and pay more than $27 million in civil monetary penalties. In its press 24 — Independent Dealer — October 2012
release, the CFPB indicated the action was the result of a multi-part federal investigation which found that at every stage of “the consumer experience,” from marketing to origination, servicing and debt collection, American Express violated consumer protection laws. The Federal Deposit Insurance Corporation and the Utah Department of Financial Institutions discovered the alleged illegal activities during a routine examination of an American Express subsidiary, the American Express Centurion Bank. The FDIC transferred parts of the investigation to the CFPB when the Bureau opened its doors last year and the agencies worked together to resolve the matter. Alleged violations include deceptive sales of a credit product, the imposition of illegal late charges, age discrimination, consumer reporting failures, and misleading debt collection practices. This enforcement action comes on the heels of actions against Capital One and Discover. In July, the CFPB announced its first public enforcement action with an order requiring Capital One Bank (U.S.A.), N.A. to refund approximately $140 million to two million customers and pay an additional $25 million penalty to the CFPB’s Civil Penalty Fund. The action resulted from an examination through the CFPB’s supervision process that identified deceptive marketing tactics used by Capital One’s callcenter vendors to pressure or mislead consumers with low credit scores or low credit limits into paying for “add-on products,” such as payment protection and credit monitoring, when they called to activate their credit cards. On September 24, the FDIC and the CFPB announced that the agencies issued an order requiring Discover Bank to refund approximately $200 million to consumers and pay a $14 million civil money penalty for using deceptive telemarketing and sales tactics in connection with various credit card “add-on” products. Specifically, the agencies alleged that the telemarketing scripts Discover used for selling the company’s payment protection, credit score tracking, identity theft protection, and wallet protection products misled consumers about whether there was a charge for the products, misled consumers about whether they had actually bought the products, enrolled consumers without their consent, and withheld material information Continued on Page 26. www.fiada.com
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October 2012 — Independent Dealer — 25
LEGAL ROUND-UP continued from Page 24.
about eligibility requirements for certain benefits. The order also required Discover to institute changes to its telemarketing of these products and to submit to an independent auditor who will report to the CFPB and FDIC on Discover’s compliance with the order. These are the first in a probable string of enforcement actions. As the CFPB enacts regulations defining larger participants and the online and offline complaint processes take shape, the pool of enforcement targets will expand. We suspect some of our dealer friends might be swimming in that pool. What in the world is a CID? On September 21, the CFPB blogged about CIDs. That, my friend, is a “civil investigative demand.” The CFPB uses CIDs to gather information relevant to an investigation. A CID is authorized by law and issued to people and institutions which may have the information sought by the CFPB. A CID consists of a list of questions and requests documents, paper and electronic, to be used in the investigation. The CFPB isn’t the first federal agency to issue a CID. The Federal Trade Commission has been using them for years. In its blog, the CFPB states that it carefully considers what to request in each CID. We’ve seen a number of these CIDs and “careful consideration” is not the first thought that
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Car dealers, boat dealers, RV dealers–all businesses that sell personal property on credit–are subject to a bewildering thicket of federal and state laws and regulations. Responsibility for compliance usually falls on the general manager of the dealership or the manager of the “finance and insurance”, or “F&I” department. Sometimes the person responsible for sales and credit compliance has received some training dealing with these legal issues. But sometimes, the person shoved into the deep end of the pool as the compliance officer doesn’t have a clue what he or she is responsible for, and doesn’t know where to start.
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CARLAW® F&I Legal Desk Book: 360 Things to Know About Auto Dealer Finance provides a compliance roadmap for “green pea” and seasoned compliance officers alike. Each chapter addresses a topic of crucial interest to dealerships. The topics cover the compliance waterfront, and include: ● The Truth in Lending Act and Regulation Z ● The Consumer Leasing Act and Regulation M ● The Equal Credit Opportunity Act and Regulation B ● The Fair Credit Reporting Act ● The Federal Trade Commission’s Used Car Rule ● Federal Advertising Rules ● The Magnuson-Moss Warranty Act ● Arbitration ● and more . . . Each chapter is authored by lawyers who deal with that chapter’s subject every day and in detail. The authors present their information in an easy-to-follow, Q&A format, with as little “legalese” and as much useful and practical information as possible. The goal each time is to give the reader a solid, basic working knowledge of the topic covered. For years, dealers have needed a source for comprehensive, no-nonsense information on the legal requirements they face. Now they have one that quickly will become their principal resource for credit compliance information:
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comes to mind when these CIDs crossed our collective desks. While the CIDs typically do not ask for the middle name of your first born son, the information requested is quite expansive and required to be provided to the CFPB in a particular format in a very short period of time. Dealer groups have already spent a great deal of money and time responding to the requests. A recipient of a CID may challenge a CID by petitioning the CFPB’s Director. The Director can respond in three ways: he can reaffirm the information request, modify the demand, or set it aside altogether. Recently, PHH Corporation, a mortgage lending company, petitioned to modify or set aside a civil investigative demand claiming that the CID failed to identify the “nature of conduct constituting the alleged violation that is under investigation” as required by law. Further, PHH claimed that the CID was overly broad and unduly burdensome. In his first response, Director Cordray ordered PHH to comply with the Civil Investigative Demand within 21 days. Litigation Breach of Peace Where Incident Between Repossessor and Car’s Owner Took Place After Repossession Was Complete: A car owner was injured when he tried to stop his vehicle from leaving the parking lot when it was being repossessed for nonpayment. He testified that he approached the car when he heard the engine start and saw a person in the car. The repossessor testified that he had already reversed the vehicle out of the parking spot and shifted into drive when the car owner jumped onto the hood of the vehicle. The car owner sued, and the trial court determined that a breach of the peace occurred during repossession. The secured creditor appealed, arguing that the evidence was legally insufficient to support the trial court’s judgment because the repossession was complete before the car owner approached the vehicle and was injured. The Court of Appeals of Texas affirmed. The appellate court found that there was no conclusive evidence that the repossessor completed the repossession of the vehicle before any breach of the peace occurred. The record contained evidence demonstrating that the car owner confronted the repossessor as he was in the process of removing the vehicle from its parking place and attempting to drive it from the owner’s apartment complex. Furthermore, the repossessor did not stop the vehicle after contact with the owner. See Price Auto Sales, Inc. v. Sanders, 2012 Tex. App. LEXIS 7274 (Tex. App. August 29, 2012). Tom (firstname.lastname@example.org) and Nikki (email@example.com) are partners in the law firm of Hudson Cook, LLC. For information, call 410-8655411, 410-865-5430, or visit www.counselorlibrary.com. Copyright CounselorLibrary.com 2012, all rights reserved. Single publication rights only, to the Association. (10/12) HC# 4849-1314-9969.
26 — Independent Dealer — October 2012
September 2012 — Independent Dealer — 27
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Don’t Walk Too Close to the Cliff BY Jim Guttmann, SPHR, landrum human resource companies
• Accounting Manager Bob Handsome is interviewing to hire a new accounting clerk. He’s behind closed doors while meeting privately with a very attractive young lady. The interview has been going on for about three hours now. Co-workers can hear some giggling coming from the room. • Maintenance Supervisor Billy Bulldozer is in middle of chastising one of the accounting clerks for parking in his spot. The spot isn’t really designated for the Maintenance Supervisor but he claims it anyway. Billy is a bully sometimes but he’s like that with everyone. • Warehouse Manager Julie Vocals is posting to Facebook that Cliff Hanger Inc. would be a wonderful place to work except that it’s unfair that Mr. Forbearance has taken away their break area to create another office. Other employees chime in that he just doesn’t care about the employees. They start making some very unflattering comments about him. • Safety Supervisor Laura Funtimes is making reservations for an evening out for dinner and drinks with some of her subordinates who she considers her friends. This time, however, she is inviting another subordinate along for
the first time, provided he agrees to be the group’s designated driver. • Benefits Manager Joe Loveable is making the rounds giving all the women hugs and offering shoulder massages. Everyone seems to love Joe. Most of the time Joe can’t remember the name for each lady so he just refers to them as honey, babe, sweetie or cutie. It doesn’t take long for Chief Operating Officer Mike Stern to hear about the “shenanigans” going on in the Operations area and he is not amused. He would really just love to fire all of them, including Mr. Forbearance. Surely some kind of employment law is being violated here, Mr. Stern thinks. He asks for advice from the General Counsel as to what he can legally do about it. The answer he gets is not what he had hoped for. Although the conduct seems questionable and may lead to some unfavorable situations for
Cliff Hanger, there is no evidence that any employment law has been violated at this point in any of these situations. So, if no law has been broken, is the conduct permissible? Consider this, avid golfers have played through thunderstorms and were not hit by lightning; however, why should anyone put himself in jeopardy if it’s not necessary? The best thing that Mr. Stern should do is “sternly” talk to Mr. Forbearance about his management team and expectations as to appropriate conduct. At Cliff Hanger, staff members should be told to avoid walking too close to the cliff in terms of how they conduct themselves. They just might fall off that cliff through a misstep and unknowingly violate an employment law. If that should happen, Cliff Hanger Inc. may be faced with a true “cliff hanger” in court. Do you have some employees who walk too close to the cliff?
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t’s a typical Monday afternoon for Fred Forbearance, Operations Director at Cliff Hanger Inc. Cliff Hanger is a key distributor of fireworks around the world. Mr. Forbearance is having difficulty assembling his staff for a Monday afternoon meeting because they are all apparently busy.
INDUSTRY NEWS CarMax Feels The Pinch of Scarce Used Car Inventory
CarMax Inc posted a quarterly profit below market expectations as a dearth of vehicles, a lingering effect of the 2008 recession, dragged on the largest used car retailer in the United States. “We do believe the decrease in the supply of used vehicles since 2008 has adversely impacted our sales over the last couple of years,” CEO Thomas Folliard said on a conference call with analysts. CarMax benefited as more consumers bought used cars during the recession. But a slump in new car sales during the tough times has led to a shortage of used cars for dealers today. The company said it bought fewer cars from people visiting its stores for the second consecutive quarter. It bought cars from 28 percent of prospective sellers in the quarter ended August 31, down from a buy rate of 30 percent a year earlier, as declining prices put off sellers. —Source: Sagarika Jaisinghani, Reuters.com
Forbes’ List of Worst Used Cars
Sorting through lists of reliability surveys, safety ratings, resale values and other experiences, Forbes Magazine recently put together a list of 10 Used Cars To Avoid. The list includes: 1. BMW X 5 2. Cadillac STS 3. Chevrolet Aveo 4. Chevrolet Colorado/GMC Canyon 5. Chrysler Sebring/Dodge Avenger 6. Chrysler Town & Country/Dodge Grand Caravan 7. Dodge Nitro/Jeep Liberty 8. Jaguar XF 9. Jeep Wrangler/Wrangler Unlimited 10. Lincoln MKS The magazine noted that it came down especially hard on under-performing luxury vehicles, whose prices skyrocketed by about 22 percent from 2009-2011 (NADA Used Car Guide) and have considerably higher costs of replacement parts and labor.
DriveTime Sale Signals Continued Growth in Subprime Market The sale of deep subprime lender DriveTime and its loan portfolio to a group of investors and Santander Consumer USA is the latest sign of growth in the business of lending to the least-creditworthy borrowers, analysts said. DriveTime, which also operates used-car dealerships in the southern U.S., stated in a regulatory filing last week that it plans to sell its business of used-car dealerships to a “new entity owned by third-party investors,” which it didn’t name in the filing. Separately, it will sell its loan portfolio to the Banco Santander unit. The sale comes as the business of lending to borrowers with the worst credit ratings has been booming, attracting private-equity players such as Kohlberg Kravis Roberts, Centerbridge Partners and Warburg Pincus, which together bought a 25% stake in Santander’s auto-finance unit last year. Dundon DFS bought another 10% stake. But DriveTime and the sector also are drawing scrutiny from the new Consumer Financial Protection Bureau, according to filings and another subprime lender. In April, DriveTime said it received a Civil Investigative Demand from the CFPB asking for certain documents and information on the business. The bureau didn’t allege any violation, the company said in a regulatory filing in April. DriveTime is known for reaching borrowers with credit scores that fall below the typical subprime credit 30 — Independent Dealer — October 2012
requirements of most firms, which according to Standard & Poor’s means FICO scores of 550 to 619. The DriveTime sale shows “the subprime space is still drawing a lot of attention from equity investors, and that there are people still looking to get in,” said Malcolm Dorris, a partner at law firm Dechert LLP, which represents subprime auto lenders, including in asset-backed-securities sales. Those investors include hedge funds, as well as private-equity firms. DriveTime’s loan portfolio rose 8% in the second quarter to $1.61 billion from the same period a year earlier, according a filing in August. In the sale of the firm, DriveTime shareholders would receive $700 million and buyers would assume existing debt. Santander’s purchase of DriveTime’s portfolio is a sign of “growing interest in subprime auto finance,” S&P analysts said in a note on the transaction. Trends in financing subprime auto loans, especially in the securitization markets, are encouraging more lending as well. Santander and DriveTime have increased fundings through asset-backed securities where investors have been flocking for higher-yielding bonds that limit risk because most carry high investment-grade ratings and are shortterm. —Source: Al Yoon; Dow Jones Newswires www.fiada.com
2011-2012 FIADA EXECUTIVE COMMITTEE:
CHRISTOPHER LEEDOM Senior Vice President AutoMaxx Sarasota, FL (941) 309-1111
DAVID COX, CMD Regional Vice President Cox Motors, L.L.C. Lakeland, FL (863) 686-9300
FRANK FUZY Regional Vice President Century Motors of S. FL Pompano Beach, FL (954) 785-0369
JIM KAGILIERY Chairman of the Board J.D. Byrider Jacksonville, FL (904) 400-6190
DINO MERCURIO Secretary Independent Credit, Inc. West Palm Beach, FL (561) 686-8673
JOHN COUSINS Treasurer Southeast Car Agency Gainesville, FL (352) 377-7787
STEVE MARBAIS GEORGE HICKEY Regional Vice President Regional Vice President Marbais Enterprises, Inc. Bond Auto Sales Ocoee, FL Tampa, FL (407) 877-7422 (813) 238-7478
PAUL MATTON Regional Vice President Park Auto Mall Pinellas Park, FL (727) 639-1112
BRANDI NOEGEL President Noegel’s Auto Sales Starke, FL (904) 964-6461
October 2012 — Independent Dealer — 31
32 — Independent Dealer — October 2012