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ALABAMA FEBRUARY/MARCH 2012

I N D E P E N D E N T

A U T O M O B I L E

D E A L E R S

A S S O C I A T I O N

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Going Green inside

AUTO RECYCLING IS BOOMING

• BHPH: WHAT’S IN STORE FOR 2012 • COMPLIANCE OVERDRIVE • A YEAR IN REVIEWS

DALLAS, TEXAS Permit No. 2079

PAID

PRSRT Standard U.S. Postage

V isit us at w w w.alabamaiada.com

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Black Book’s Grand Opening of Auto Tim West Auction of Montgomery Named to NAAA Hall of Fame TIM WEST, BLACK BOOK’S VICE PRESIDENT and North American auction director, was inducted into the National Auto Auction Association Hall of Fame during its 63rd annual conference in Chicago. “Tim is extremely knowledgeable, personable and dependable,” NAAA chairman of the board David Angelicchio said. “He’s out there exchanging ideas and sharing information with our members. His efforts have earned him respect as a trusted friend and advisor to many auction owners and general managers. He embodies what it means to be a true NAAA stalwart.” West joins three of his Black Book associates in the NAAA Hall of Fame: Gene McDonald, Dave Cape and Bob Burnett. Since he began his career with Black Book in 1984 as an editorial assistant, West has worked diligently to build personal relationships with those in the industry. During the next decade he served as editor of both the Old Car and Domestic Car guides, then as assistant field coordinator and North American auction director. In that position, West expanded his connections and support during the transition from predominantly locally owned auctions to corporate owned and operated. He manages the overall industry interaction vital to Black Book’s ability to provide accurate and timely information, and oversees the production department, ensuring the quality of the printing and shipping of all the printed guides.

The Grand Opening was held Oct. 27 at the Auto Auction of Montgomery’s new facility at 6142 Troy Highway in Pike Road, Ala. The auction’s sales are Thursdays at 10 a.m., and the in-op sales are the last Thursday of each month at 9:30 a.m. Owner Rex Ingram and office manager Jodie Burton invite all dealers to attend.

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INSIDE

IRS Announces INSIDE 2012 Standard Mileage Rates

MAGAZINECONTENTS

08 What’s in Store for 2012 12 Going Green: Auto Recycling 22 Compliance Overdrive

WHAT’SNEW

R A2Z EDUCATION SERIES - AutoZone Educating the independent dealer to deliver the highest quality service levels to your customers, manage your shop efficiently, train your technicians and maximize profits. niada.tv R Certified Master Dealer Program

March 22-24, 2012

Educates dealers on how to manage and grow a profitable business “Effective Management Practices”, “Business Planning”, “Human Resources”, “Merchandising”. “Financial Management” Call (800)756-4232 to sign up.

R World Automobile Auctioneers Championship Live online coverage of the event begins at 11 am ET on Friday, March 3O, 2012 and is free for all online viewers. visit www.niada.com and click on the “EVENTS” tab or call (303) 807-1108.

ADVERTISERSINDEX ADESA...................................................................11 AutoTrader.com....................................... Back Cover Chase....................................................................13 Manheim.com.........................................................7 Manheim Nashville....................... Inside Back Cover Protective................................................................5 SmartAuction..........................................................9 Sterling Credit...............................Inside Front Cover United Acceptance .................................................3 WAAC....................................................................17

AIADAOFFICE 120 VULCAN ROAD • BIRMINGHAM, AL 35209 PHONE: (205) 942-1000 FAX: (205) 942-3565 WEB SITE: WWW.ALABAMAIADA.COM TO BECOME A MEMBER OF AIADA, PLEASE CONTACT TONY WILKERSON AT (800) 239-2423 OR TONY@ALABAMAIADA.COM

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV NIADA HEADQUARTERS: 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 ALABAMA INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION IS PUBLISHED BI-MONTHLY BY THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORATION, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203; PHONE (817) 640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT ADDITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF AIADA 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 © 2012 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED. VISIT THE NIADA WEB SITE AT WWW.NIADA.COM. STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITOR Andy Friedlander • andy@niada.com ART/PRODUCTION MGR. Christy Haynes • christy@niada.com PRINTING Nieman Printing

THE INTERNAL REVENUE SERVICE (IRS) has announced the 2012 optional standard mileage rates used to calculate the deductible costs of using a vehicle for business, charitable, medical or moving purposes. Beginning Jan. 1, the standard mileage rates will be 55.5 cents per mile for business use, 23 cents per mile for medical or moving purposes and 14 cents per mile in service of charities. The rate for business miles is unchanged from a mid-year adjustment that became effective July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile. The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating a car. The IRS reminds taxpayers they always have the option of calculating the actual costs of using their vehicles rather than using the standard mileage rates.

Executive Committee EXECUTIVE DIRECTOR Tony Wilkerson 205-942-1000 Fax 205-942-3565 tony@alabamaiada.com PRESIDENT Randy Burns Gadsden rburns222@bellsouth.net PRESIDENT ELECT Charles Moring Midland City charlesmoring@sw.rr.com VICE PRESIDENT Todd Oden Birmingham douomto@aol.com SECRETARY/TREASURER Rex Canterbury Fayette rexcanterbury@yahoo.com

CHAIRMAN OF BOARD Ken McFarland Birmingham kmcfarland@compuhelp.net DIRECTORS Barry Searcy Muscle Shoals barrysearcy@bellsouth.net John Dunn Sylacauga johndunnauto@charterinternet.com Lance Turner Anniston usave@cableone.net Willie Colvin Tuscaloosa colvinsales4ser@aol.com Tommy Greene Birmingham swautos@bellsouth.net John Pigg piggenterprises@knology.net Prattville

Paul Claborn paul@wholesalecars.com Albertville Robert Case robertsautosales1@live.com Hartselle Tim Duke timdukeauto@gmail.com Birmingham Wayne Williams autoprofessionals@bellsouth.net Birmingham Chad Tillery jemisonauto@gmail.com Jemison Corey Braxton Auto Professional Car Sales Birmingham, Al ASSOCIATION ATTORNEYS Galese & Ingram PC John Martin Galese & Jeff Ingram

MARK YOUR CALENDAR!!! ALABAMA IADA STATE CONVENTION JULY 12-15, 2012 EDGEWATER RESORT PANAMA CITY BEACH, FLORIDA

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December 30, 2011

MEMORANDUM TO:

All License Plate Issuing Officials

FROM:

Mike Gamble, Assistant Director Motor Vehicle Division

SUBJECT:

Title Procedure – Exemptions from Titling.

2011-24

In accordance with Administrative Rule 810-5-75-.68, the following titling exemptions and title recordkeeping requirements will be in effect starting January 1, 2012: (1)

Effective January 1, 2012, no certificate of title shall be issued for any trailer, semi-trailer, travel trailer, or folding or collapsible camping trailer more than twenty (20) model years old. This exemption is applicable on January 1 of each year and applies to all trailers, semi-trailers, travel trailers, and folding or collapsible camping trailers with a model year, as designated by the manufacturer, older than twenty (20) years from the current calendar year. All utility trailers, other than folding or collapsible camping trailers, are still exempt from titling regardless of the year model. Example: As of January 1, 2012, all 1991 and prior year model trailers, semi-trailers, travel trailers, and folding or collapsible camping trailers are exempt from the titling provisions of Chapter 8, Title 32, Code of Alabama 1975.

(2)

Effective January 1, 2012, no certificate of title shall be issued for any motor vehicle more than thirty-five (35) model years old. This exemption is applicable on January 1 of each year and applies to all motor vehicles with a model year, as designated by the manufacturer, older than thirty-five (35) years from the current calendar year. Example: As of January 1, 2012, all 1976 and prior year model motor vehicles are exempt from the titling provisions of Chapter 8, Title 32, Code of Alabama 1975.

(3)

Effective January 1, 2012, no certificate of title shall be issued for a low speed vehicle. A low speed vehicle is defined as a four-wheeled motor vehicle with a top speed of not greater than 25 miles per hour, a gross vehicle weight rating (GVWR) of which is less than 3,000 pounds and complying with the safety standards provided in 49 C.F.R. Section 571.500. The term includes neighborhood electric vehicles.

NOTE: The exemption from titling does not invalidate any Alabama certificate of title that is currently in effect. However, no subsequent title, including a replacement certificate of title, can be issued if the vehicle is exempt from titling.

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BHPHNews

THE DEALERS WHO ARE TRYING TO THE BEST OF THEIR ABILITY TO DO THE RIGHT THINGS WILL SURVIVE, WHILE THOSE WHO OPERATE IN THE GRAY AREAS WILL FALL BY THE WAYSIDE.

What’s in Store for 2012 WHAT’S IN STORE FOR YOUR STORE IN 2012? If it’s anything like 2011, it should be

another good year to be in the Buy Here-Pay Here industry. The coming year will not be without its challenges, though. In fact, there are certain areas of the industry that could be more challenging than ever. To get an idea of what to look forward to in 2012, we first need to review how 2011 treated the BHPH world. It was probably the weirdest year I can remember in the 15-plus years I’ve been in the business. Tax season was sporadic at best, which pretty much set the tone for all facets of the business for the rest of the year. From a profitability standpoint, the dealers I have the distinct privilege of working with enjoyed an 11 percent overall increase in 2011 versus 2010. This increase was due mostly to the rightsizing of operations. Dealers focused on their entire operations, from top to bottom, on cutting the fat and running their operations based on the cash they were generating instead of relying on lines of credit. I expect this focus to continue in 2012. Though funding sources have become more readily available, most dealers will be focusing again on generating the capital necessary to run their businesses from their businesses. As always, there will be dealers looking to grow aggressively through borrowing, and rates will continue to make this a very viable option. I don’t see rates rising drastically in the coming year, so it will still be a good time to borrow. Having said that, I still see it being more difficult to secure new lines of credit in 2012. It’s going to take some patience and the willingness to educate some institutions about our industry. Our dealer clients saw sales volume increase by almost 6 percent in 2011 despite

a sporadic tax season. Not a record-setting year by any means, but this was driven more by cash management. Dealers seemed to want to sell what their cash flow dictated rather than sell as much as possible. We all know we can sell as many vehicles as we want or have the financial resources to in this industry. There doesn’t seem to be a lack of customers needing or wanting what we have to offer. The same will hold true for 2012. We should have the customers in the market to sell as much as we want. The biggest question will be inventory availability. Now, I’m normally a glass-half-full kind of guy, but when it comes to this, I think the glass may be half empty. Even though the prices somewhat leveled off the last half of last year, the numbers seem to be dwindling even more than usual. Portfolio performance in 2011 included some stabilization from a dollar-loss standpoint, but from a number-loss standpoint, there was a slight increase or worsening in 2010. This was driven by a couple of factors, beginning with the need for inventory. Some dealers accelerated their repo times when a desirable unit was involved. This also helped stabilize the dollar losses, as vehicles were repossessed earlier and in better condition and thus earned higher recovery amounts. The other factor was a renewed focus on underwriting and the overall collection process. Dealers remained more disciplined in both areas, seeking quality over quantity. There will be more of the same this year. Dealers have seen the error of their past ways and are enjoying the spoils of their more disciplined labor. I expect the average charge-off to remain essentially the same and the number as a percent of sold to remain higher than in past years,

and collections dollars to improve as well as overall collection effectiveness. The biggest thing to affect our industry in 2012 will come from the compliance front. The Consumer Finance Protection Act was signed in July 2010, establishing the Consumer Finance Protection Bureau. The rules of the Act were to have been drafted by August 2011, so we were hoping to know what kind of field we will be playing on. But, as with most things in our government, the rules are behind schedule. In the interim, I have already heard from a few dealers who have received a letter from the FTC – the Bureau’s governing body – informing them of pending audits. That has dealers debating whether to remain in the industry, and is causing some who are looking at getting into the industry to delay their entry until the rules are set. This act and bureau are going to separate the men from the boys, so to speak. The dealers who are trying to the best of their ability to do the right things will survive, while those who operate in the gray areas will fall by the wayside. And the waysiders are going to cause the cost of doing business to increase for everyone else. So here is the best advice I can give to dealers, as well as those wanting to get into the business in the coming year: Don’t wait. Don’t wait to get compliant. Don’t wait to spend a little money to do so. Don’t wait to review all processes and procedures. Don’t wait to review all expenses. Don’t wait to review all of your employees. Don’t wait to train. And definitely don’t wait to sell cars, collect money, and make money.

BY BRENT CARMICHAEL EXECUTIVE CONFERENCE MODERATOR NCM ASSOCIATES INC. BCARMICHAEL@NCM20.COM

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IndustryNotes

Handling the Negatives A YEAR IN REVIEWS

WITH 2011 GONE and a new year ahead,

many of us are excited to put the past behind us for more reasons than just the economy. For many dealers, 2011 was a year when the review became a constant battle to overcome. Many sites that were advertised and became well known as consumer review portals have grown in popularity, such as dealerrater.com, pissedconsumer.com, cardealercheck.com and ripoffreport.com, to name a few. Those sites were created to give consumers a voice to let others know about the experiences they have had with businesses. But consumers are not the only people leaving reviews on the sites. A large number of dealers also played a part during the 2011 Year in Reviews, leaving negative information online about their competition by pretending to be angry customers. And many companies that claim to offer online reputation management services are also leaving negative information online, then contacting the businesses they left false claims about and offering to help get the bad reviews removed. Are dealerships really slandering the competition to make a quick buck? Are online businesses purposefully leaving negative reviews so they can charge to get them removed? Sadly, in a down economy, the answer is yes. Is it fair? No. But can you change it? Yes! There are a lot of legitimate companies that offer reputation management, but you can always help tip the scales at little to no cost to your business, other than the time spent on it. The No. 1 time consumers are exposed to negative listings online is when they are conducting research on a specific dealership by typing the name of the dealership into a search engine. Search engines traditionally only display 10 listings per page and consumers focus primarily on the listings showcased on Page 1. A sample “heat map” using a search for the word “something” illustrates the percentages of the results consumers click on when searching online: While the first listing of a Google search received 56 percent of the clicks, the second dropped to 13 percent. By the fourth listing, the percentage was down to 4 percent.

Search for “something” POS. PCT. OF CLICKS 1 56.36 2 13.45 3 9.82 4 4.00 5 4.73 6 3.27 7 0.36 8 2.91 9 1.45 10 2.55

There is not really a way to get online reviews removed from listing services. If, however, you can get the negative reviews bumped down to page 2, it is almost as if they do not exist at all. Because there are only 10 results per page it is not that difficult to get negative reviews pushed down – if you can create items to replace them on the first page. There are many free business directory listings you can create with as little as an email address and a password. When consumers are doing research about your business and deciding whether or not they should buy from you, the main content typed into a search engine is the name of your business. Because the name of your business is also found within the business directory listings, this can help regain the first page of the search engines with listings that you control. Here are 50 top sites that allow you to create business directory listings for your dealership: 1. Google 2. Bing 3. Yahoo! 4. Yelp 5. Merchant Circle 6. LinkedIn 7. YellowPages.com 9. Whitepages 10. Supermedia 11. Yellowbook 12. CitySearch 13. Mapquest 14. Biznik 15. Local.com 16. Foursquare 17. ThinkLocal 18. CitySlick 19. USYellowPages 20. MyCity 21. Outside.in 22. Dex 23. BizJournals.com 24. TeleAtlas 25. Justclicklocal 26. Discover our Town

27. Metrobot 28. Best Deals on 29. twibs 30. LocalEze 31. Kudzu 32. CityVoter 33. Manta 34. Zipweb 35. MatchPoint 36. UsCity.net 37. Local Site submit 38. InfoUSA 39. Axciom 40. Infignos 41. Yellowassistance 42. ChoiceVendor.com 42. Myhuckleberry 43. Genieknows 44. MojoPages 45. Brownbook 46. Magic Yellow 47. CitySquares 48. TeleAtlas 49. Navteq GPS 50. Judysbook

A good tip when setting up a business directory listing is when you are asked to choose an email and a password for each site, choose one that is not easy to crack, but use the same one for each directory site. The last thing you want is to forget the information needed to change your business directories in the future as your business information changes.

BY MICHAEL D. JACKSON MICHAEL D. JACKSON IS CEO OF AUTO SEARCH TECHNOLOGIES, INC. HE CAN BE REACHED AT (949) 608-0809 OR CEO@ AUTOSEARCHTECH.COM.

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GREENNews

Going Green A U T O

R E C Y C L I N G

AS WE COME INTO the second month of

the 2012, how are your business New Year’s resolutions evolving? I’m sure on the list there are goals to increase profitability and growth, and to improve customer service. What about going green and saving you and your customers money at the same time? The auto recycling business is booming and helping its customers do just that. There are about 8,400 auto recycling businesses in the United States generating about $23 billion each year. Auto recycling is the practice of removing and reusing automotive parts from inoperable vehicles, then safely disposing of the portions of the car that cannot be salvaged. It is performed at auto salvage yards, also called auto recyclers. Auto recycling prevents the waste of usable parts and materials, and promotes environmental conservation by reusing vehicle components instead of disposing of them in a landfill. There is no product recycled more than the automobile. More than 10 million vehicles reach the end of their lives each year, which equates to acres and acres of landfill space. The auto recycling industry saves that space – 95 percent of vehicles retired from use are recycled. The process saves an estimated 85 million barrels of oil per year, which would have been used to make replacement parts. About 84 percent of each vehicle is recycled in one way or another. Some 40 percent of the ferrous metal for scrap processing comes from auto recycling. Oils and fluids recycled by the auto recycling industry are equivalent to eight Exxon Valdez oil disasters every year. “One of the meanings of recycle is to reuse,” said Jason Hilsman, owner of Ace Auto Recyclers in Iowa City, Iowa. “Reusing auto parts helps the environment by saving on the energy and waste produced in making new parts. And, of course, the price is cheaper.” On average, purchasing a green, recycled part from a recycling yard will save 50 to 75 percent of the original equipment

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B O O M I N G

manufactured price. Because buying used parts from an auto recycler is cheaper than buying them new, repair shops can not only lower the cost of a repair for customers, but can also lower insurance rates if the repair is an insurance claim. Auto salvage yards also commonly offer recycling of older vehicles for scrap. The yards recycle batteries, tires, fluids and thousands of tons of metal a year. And auto recyclers provide owners of rare, out-ofproduction vehicles a chance to obtain hardto-find replacement parts. Recycled vehicles go through a thorough tear-down and inspection process on delivery to the recycler to ensure the highest quality parts for resale. When a vehicle comes into the recycler, it receives a stock number for tracking, and the VIN is checked to make sure it matches the title. Pictures are taken of all angles of the vehicle and the VIN number, allowing the auto recycler’s customers to see a part before it is delivered and be knowledgeable on the part’s condition prior to a sale. The vehicle is then inventoried. All parts are checked, including checking whether the car starts, runs and drives, and a check of all part of the transmission. If the auto recycler decides no parts have any value, fluids are drained and tires, battery and catalytic converter are removed to prepare the car for scrap and crushing. If the auto recycler will keep the car for its inventory, the catalytic converter and battery are removed and the vehicle is placed in the yard. The fluids are not drained until the car is dismantled. Then the fluids are drained and the usable parts are ready to sell. In 2008, a group of auto recycling businesses from across Iowa banded together to improve the purchase process and quality of recycled parts. “When we started the group, the idea was to get 20 of the most progressive auto recyclers in the state to sell a better product by improving the quality of the part, description of the part, the delivery time for less down time for the repair shop, and to

open communication to all repair shops,” said Mike Swift, president of QRP Central and owner of Trails End Auto & Truck in Des Moines. QRP Central is a group of 18 familyowned professional automotive recyclers that function as trading partners to provide customers with quality recycled used auto parts. The group is committed to the highest quality of recycled and new aftermarket auto parts, delivered on time as described, usually within 24-48 hours. The combined inventory of the 18 independent auto recyclers is massive: more than 11,000 vehicles purchased annually, more than 1 million parts in computerized inventories and nearly 26,000 parts vehicles stored on site. In addition, yard management technology has advanced to give auto recyclers access to more parts from around the nation. QRP holds its parts inspection process to a higher standard. One of the first things it decided as a group was to make sure there are no surprises. Every step is taken to make sure a part is good. If it is not a good part but is still usable with repair, the recycler makes sure the customer knows and can make an informed decision. All parts that leave QRP auto recyclers go through a three-point inspection process. They are inspected first by the salesperson, then the parts puller, then the delivery driver. If a part is shipped, the last person to check the part is the shipping department. Another important aspect for QRP customers is that the businesses are locally owned. “When a repair facility purchases a green recycled part from QRP Central, it is not only saving the environment but helping keep jobs and revenue in the city, county and state,” Swift said. For more information on using recycled auto parts for your business, visit www. qrpcentral.net.

BY QRP CENTRAL

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A L A B A M A

Associate AIADA Member Honored

TOMMY COBB, CEO OF TUSCALOOSA CREDIT UNION, was

named Credit Union CEO of the Year by the Southeastern Credit Union Managers Association. The award was given at the organization’s annual conference and was presented by Mark Johnson, president of SCUMA and CEO of Naheola Credit Union of Pennington, Ala. The SCUMA CEO of the year is chosen by popular vote among credit union CEOs and managers across the southeast. Tommy was recognized by his peers for his abilities of effectively and efficiently managing Tuscaloosa Credit Union while demonstrating exemplary personal characteristics in working with his members, staff and the community. Those characteristics were especially recognized during the tornado relief efforts, as Tommy worked closely with members of Calvary Baptist Church and other civic organizations within the community. Congratulations Tommy!

N E W S

Peritus Portfolio Services Teams With AIADA

IN CONJUNCTION WITH THE ALABAMA INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION, Peritus Portfolio Services, a Southlake, Texas-based

finance company that specializes in the purchase of open bankruptcy accounts, announced an alliance program with the AIADA. Effective for February and March 2012, any current member in good standing with the AIADA who completes a transaction of bankruptcy notes with Peritus Portfolio Services will qualify to have its AIADA membership paid for by Peritus for one year, at renewal time. Dealers who are not members of the AIADA can qualify after completion of their first transaction with Peritus – the first year’s new membership fee for AIADA will be paid for by Peritus. “The corporate directors at Peritus realize the importance of membership in the AIADA and how it directly affects the success and future existence of the independent dealer in Alabama,” said Rod A. Heasley, executive vice president of Peritus Portfolio Services. AIADA executive director Tony Wilkerson said, “Not only is this a wonderful opportunity for current BHPH members to save some money, this is also an opportunity for the AIADA to increase our new membership ranks. Peritus will offer our dealers a unique service that directly helps increase their cash flow.” For more information, contact Michael Abrams, who is helping Alabama Buy Here-Pay Here dealers with the program, at mabrams@dealerite.com or (205) 967-9405. Rod Heasley of Peritus can be reached at (248) 880-7263 or rodh@ peritusservices.net

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IndustryNews

You Demanded and CARFAX Listened: Ad Campaign Changed

AFTER PERSISTENT REQUESTS DURING the past year from

NIADA, our state executive offices and dealer members across the country, CARFAX recently revised its television commercial campaigns. The latest changes to the campaign were made in August and have been running throughout the fall and winter. Of the notable changes, CARFAX removed the word “Free” from the commercial voiceover, and also removed the phrase “from a reputable dealer.” The revised commercials can be viewed at http://www.youtube.com/ user/Carfax CARFAX is also in the process of testing an entirely new commercial campaign, with a tentative release date of April 2012. NIADA and its dealer members will be active participants in the critical commercial testing phase. CARFAX also created a new NIADA liaison and client manager position to better assist NIADA, the state association executive offices and individual dealer members. Kathy Collins, the association’s point person with CARFAX, is already hard at work reaching out to several of our state affiliates on some new and exciting partnership initiatives for 2012. Kathy has set up a new network of CARFAX regional contacts to handle dealer complaints about particular CARFAX VHR discrepancies. If you have questions or issues with any CARFAX reports, please call your state executive office, which will have the new regional and state contact information readily available.

NIADA/Manheim National Community Service Award 2012 INDEPENDENT DEALERSHIPS NATIONWIDE contribute every day to their communities but often go unrecognized for their community support. While many participate through special projects, others provide sponsorships and financial contributions, or lead innovative community improvement activities. The NIADA/Manheim National Community Service Award was created to honor those independent dealerships. Nominees must be members in good standing of the National Independent Automobile Dealers Association and nominations may be made by the dealership, a community business or organization, the state independent automobile dealers association, a community member or even a loyal customer. Five finalists will be selected, and the winning dealership will be named June 13 at the Leadership Awards Banquet during the Annual NIADA Convention & Expo in Las Vegas. Manheim representatives will present the award, along with a $5,000 check made payable to the dealership’s chosen charity (which must be classified as a charitable organization under section 501(c)(3) of the Internal Revenue Code). The nomination form can be found by clicking on “Manheim Dealer’s Edge” under the “Services” tab on NIADA.com. Please submit the form, along with the required nomination packet contents, by April 1 to the Community Service Award Selection Committee, NIADA, 2521 Brown Blvd., Arlington, TX, 76006. For additional details please contact Georgia Brown at (800) 756-4232. 14

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W E L C O M E N E W M E M B E R S A N D R E N E WA L S WELCOME NEW MEMBERS

JOE SCOTT MOTOR COMPANY LLC MONTGOMERY

DAVID HARRIS HARRIS MOTORS CROSSVILLE

AL LIVINGSTON TOP FLIGHT AUTO SALES LLC WETUMPKA

JAMES & REGGIE GOINS GOINS AUTO SALES MUSCLE SHOALS

GARY & TERESA DANIEL 278 WEST AUTO & EQUIPMENT AUCTION LLC CULLMAN

KIRKLAND MOTOR CO TUSCALOOSA

HUGH EDWARDS JR. HUGH’S USED CARS MARION

WILLIAM SAIN TOWN & COUNTRY FORD BESSEMER

JIMMY BLACK THE AUTO SUPER CENTR LLC CENTRE

JERRY DEWBERRY JERRY’S TRUCKS & CARS MEXIA

CHRIS AVANT TROY AUTOMOTIVE GROUP MONTGOMERY

THOMAS GREGERSON THOMAS SEAN AUTO MART ATTALLA

MORRIS KENNEDY KENNEDY USED CARS MUSCLE SHOALS

GARY OWEN TRUCKS PLUS INC ORANGE BEACH

DAVID BARNES JR TROPICAL AUTO SALES LLC CULLMAN

DANNY MCGEE MIDFIELD MOTOR CO. INC BIRMINGHAM

DON LEWIS TUSCALOOSA CREDIT UNION NORTHPORT

BILL THAMES MOTOR VEHICLES INC BIRMINGHAM

WINSTON SMITH WINSTON SMITH USED CARS CENTRE

CHARLES & LISA LIVINGS/ HUBERT GLOVER UNITED AUTO WHOLESALE LLC SLOCOMB

HENRY D MULLINAX MULLINAX AUTO SALES INC ANNISTON

WALTER BOYD WOODLAND HILLS AUTO SALES TUSCALOOSA

ALFONSO NORMAN ALFONSO AUTO SALES LLC MONTGOMERY ALA ASHOURI ALA SALES INC HOOVER STEVEN W. & TANYA NETHERY ARTEC TRACTOR & EQUIPMENT INC NAUVOO

MAXX MOTOR CO INC BESSEMER PARAMOUNT AUTO LLC BIRMINGHAM PIGG ENTERPRISES PRATTVILLE SMITH-DAVIS MOTORS INC ALBERTVILLE

OCTOBER RENEWALS

JOE WALVIS, SHAWN SMITH CASH TO LEND MOBILE

NORMAN ANTONIO ANTONIO AUTO SALES INC BIRMINGHAM

BARON HARGROVE, RANDY MALONE, GARY RYAN CLASSIC MOTORSPORTS LLC ATHENS

BRIAN SCOTT BRIAN SCOTT MOTORS LLC ALBERTVILLE

JOHN MITCHELL DECATUR HWY AUTO & TRUCK SALES GARDENDALE STACY BRAZIL EMPIRE AUTO SALES SARDIS MOBAYED HAYTHAM EXPRESS MOTORS GADSDEN CECIL COX, CONTACT FULTONDALE AUTO SALES LLC FULTONDALE MEL ADAMS LAST CHANCE AUTO SALES DOTHAN NAN POLLOCK, CONTACT MANHEIM AUCTIONS ATLANTA, GA GARY HILYER SECURITY MUTUAL CORPORATION FORT PAYNE ATES JABER SOUTHERN AUTO CREDIT STERRETT AUSTIN TANNER/TOMMY TOMPKINS TNT AUTO SALES LLC SARALAND, AL

SEPTEMBER RENEWALS

(not in last magazine) ALABAMA MOTORS OF IRVINGTON INC. IRVINGTON B & B MOTORS DOUBLE SPRINGS BUDGET SALES INC CLEVELAND CAR FINANCIAL SERVICES INC HOOVER FRANK H. SIMS INSURANCE MOBILE FT. PAYNE AIRPORT SALES INC/DBA THE CAR LOT FT. PAYNE

CHARLES JOHNSON CHARLES JOHNSON AUTOMOTIVE INC HEADLAND KEN MCFARLAND CITY AUTO SALES HUEYTOWN BARNEY CLARK CLARK AUTO & ELECTRIC PELL CITY JARED IRBY COASTAL AUTO SALES LLC/ DBA CARCREDITMD.COM MOBILE

E GAYLE JENNINGS OLD GLORY MOTOR CO LLC TUSCALOOSA JOE C PARKER PARKWAY MOTOR CO INC DOTHAN THOMAS L BRIMER POKEY BRIMER AUTO SALES OXFORD FRANK JOHNSON QUALITY REBUILT AUTOS LLC BOAZ RALPH SMITH RALPH SMITH MOTORS MONTGOMERY

TORREY COCHRANE CONTRMPORARY MITSUBISHI TUSCALOOSA

REED INGRAM REED INGRAM MOTORS MONTGOMERY

ISSA TASHMAN DAVID’S AUTO SALES HOOVER

ERIC RICHARDS RICHARD’S MOTORS GADSDEN

DON ALSTON DON’S AUTO SALES BIRMINGHAM

HORACE D TANKERSLY RIVERCHASE USED CAR CENTER INC BROWNSBORO

JERRY SKIPPER DOTHAN TRUCK & AUTO DOTHAN JAMES WILSON DREAM & DRIVE MONTGOMERY STEVE EDGE EDGE MOTORS INC GADSDEN JOHN T EVANS EVANS MOTOR CO WETUMPKA JAVAD KHOLAFAI FOURWAY AUTO SALES LLC MOBILE GARY MITCHELL GARY MITCHELL MOTORS FT. PAYNE GARY PLIMPTON GRI MOTORS GADSDEN MICHAEL DRESDNER HANDICAPPED DRIVER SERVICES-ALABAMA INC BESSEMER

JOHN FIKES SHOALS NORTH ALABAMA AUTO AUCTION MUSCLE SHOALS WESLEY BENEFIELD SOUTHERN USED CARS INC OXFORD

ROYETTA LINK USED CARS FOR SALE LLC ALEXANDER CITY GARY HILYER WHEELS OF FT PAYNE FT PAYNE

NOVEMBER RENEWALS

ROGER E WOOD WOOD BROTHERS AUTOS ALES BIRMINGHAM

PAUL MAYE 84 AUTO SALES/DBA PAUL MAYE REPTON

DECEMBER RENEWALS

WILLIAM J HARDY ADGER AUTO ADGER BOB SELMAN AUTO BARGAIN CENTER INC TUSCALOOSA

JAMES DUPREE JR ALL AMERICAN AUTO SALES CULLMAN TOM ADAMS JR AUCTION INSURANCE AGENCY BIRMINGHAM

ROBBY STOREY AUTO EXPO MERIDIANVILLE

KEN JACKSON, CONTACTJACKIE AUSTIN, OWNER AUSTIN MOTORS & AUTO PART BESSEMER

RAYMOND CRISWELL BARGAIN MOTORS JACKSON

CHRIS BALL AUTO MAX USA INC TUSCALOOSA

BILLY/JEFF/KEVIN/PAINTER BILLY PAINTER & SONS MOTORS BOAZ

RANDY BESHEARS, PRESIDENT BESHEARS AUTO SALES INC OXFORD ALVIN CARLISLE CARLISLE CLASSY CARS BIRMINGHAM

IRENE JOYNER CALCO INC GLENCOE REX CANTERBURY CANTERBURY AUTO SALES FAYETTE MICHAEL W CARROLL CARROLL’S AUTO SALES PIEDMONT

JULIA SCHEFANO SOUTHERN WHOLESALE AUTOMOBILES BIRMINGHAM

JIMMY DANIEL DANIEL MOTOR CO INC MONTGOMERY

JIMMY L ST CLAIR ST. CLAIR AUTO SALES CENTRE

CARSON THOMPSON DEEZZ MOTORS LLC BIRMINGHAM

JERRY CORNELIUS SUPERIOR AUTO SALES INC ALBERTVILLE

KATHY R HARBIN E Z RIDE AUTO SALES JASPER

ISAM ABDULLA T & T INTERNATIONAL MONTGOMERY

CHRIS RICHARDS ECONOMY AUTO MART INC GADSDEN

LARRY DON TEAGUE TEAGUE AUTO SALES INC FT. PAYNE

ERNEST CRUMP/MARK CRUMP ERNEST CRUMP MOTOR CO JASPER

CLEM WEBSTER THE CAR SHOPPE PELHAM

SUE SKIPPER G. S. AUTO EXCHANGE GREENVILLE

CLINT COMPTON CLINT COMPTON MOTORS ALBERTVILLE TIM JACKSON DISCOUNT AUTO SALES PELL CITY CHRIS HADDER HOMETOWN AUTO SALES LLC JASPER TONY MANN KAT USED AUTO SALES FORT DEPOSIT MICHAEL W REEVES M & D AUTO SALES INC FOLEY REINALDO ESCOBAR RPN MOTORS INC ALABASTER JAMES RAY RAY’S USED CARS CEDAR BLUFF WALID YOUSIF SPEED AUTO SALES STERRETT

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CONGRATULATIONS ON THE ONE-YEAR ANNIVERSARY OF BAMA AUTO AUCTION IN FORT PAYNE, UNDER THE NEW OWNERSHIP OF LESTER AVERY. THE AUCTION’S SALES ARE THURSDAYS AT 6:00 P.M., AND LESTER INVITES ALL DEALERS TO ATTEND.

TONY WILKERSON CONGRATULATES JOHN FIKES ON THE FIRST ANNIVERSARY OF THE SHOALS NORTH ALABAMA AUTO AUCTION. SALES ARE TUESDAYS AT 6:30 P.M. ALL DEALERS ARE WELCOME. 16

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World Automobile Auctioneers Championship HA

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THE WORLD AUTOMOBILE AUCTIONEERS CHAMPIONSHIP will be

webcast live this year for the first time, courtesy of NIADA.TV. The live webcast of the 2012 WAAC can be viewed in its entirety on the home pages of www.niada.tv, www.niada.com and www.waacnet.net . Coverage begins at 11 a.m. Eastern time on Mar. 30 and is free for all online viewers. Cheer on your hometown favorite auctioneers and ringmen, and catch all the fun and excitement of the 2012 World Automobile Auctioneers Championship at your leisure, exclusively on all three websites. For more detailed information please visit www.niada.com and click on the “Events” tab, or call (303) 807-1108.

AUCTION DIRECTORY

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ABC – ATLANTA 444 Joe Frank Harris Parkway Cartersville, GA 30120 Sale every Tuesday 6 p.m. & Friday 11 a.m. Phone: (770) 382-1010 ABC BIRMINGHAM 1046 A.E. Moore Drive Moody, AL 35004 Sale every Wednesday 12:30 p.m. Inops at 12 pm Phone: (205) 640-4040 ADESA ATLANTA AUTO AUCTION 5055 Oakley Industrial Blvd. Fairbum, GA 30213 Sale every Wednesday 10 a.m. & Friday 6:30 p.m. Phone: (770) 357-2277 ADESA OF BIRMINGHAM 804 Sollie Dr. Moody, AL 35004 Sale every Monday 6:30 p.m. & Wednesday 9 a.m. Phone: (205) 640-1010

KELLEY AUTO AUCTION 3485 US Hwy. 431 Attalla, AL 35954 Sale every Tuesday night Phone: (256) 538-9095

ADESA OF MEMPHIS 5400 Getwell Rd. Memphis, TN 38118 Sale every Tuesday 9 a.m. Phone: (901) 365-6300

LOUISIANA’S 1ST CHOICE AUTO AUCTION 18310 Woodscale Rd. Hammond, LA 70401 Sale every Tuesday 8:30 a.m. Phone: (985) 345-3302

ATLANTA AUTO AUCTION 4900 Buffington Rd. Red Oak, GA 30272 Sale every Thursday 9 a.m. Phone: (404) 762-9211 AUTO AUCTION OF MONTGOMERY 6142 Troy Highway Pike Road, AL 36064 Sale: every Thursday 10:00 a.m. Phone: (334) 288-3399 BAMA AUTO AUCTION 4103 Gault Avenue South Ft. Payne, AL 35967 Sale: every Thursday 6:00 p.m. Phone: (256) 304-0947 BIRMINGHAM AUTO AUCTION 125 Meadland Circle Birmingham, AL 35023 Sale every Thursday 6 p.m. Phone: (205) 744-4030

about the hottest car on the market. It’s the Chevrolet Camaro, which won the SEMA Award as the Hottest Car at the 2011 SEMA Show last month in Las Vegas. The victory was the second in a row for the Camaro, which remains the only winner in the award’s two-year history. The Fiat 500 was named Hottest Sport Compact Car, while the Ford F-Series for the Hottest Truck and the Jeep Wrangler for the Hottest 4x4/SUV. The Ford and Jeep were also repeat winners. The awards were determined by the more than 2,000 exhibitors at the SEMA Show, a trade show produced by the Specialty Equipment Market Association to showcase products that improve automotive performance, safety and convenience, as well as those that enhance appearance and comfort. The vehicles in each category selected by the most exhibitors to display their products at their booths earned the SEMA Award, which honors the vehicles specialty-equipment manufacturers believe are the best platforms for accessorization and showing this year’s coolest products.

HIGHWAY 101 DEALERS AUTO AUCTION 2100 Hwy. 101 Rogersville, Al (256) 247-3600 Sale Day – Thursday 10:30 a.m.

LONG BEACH AUTO AUCTION, INC. 8494 County Farm Rd. Long Beach, MS 39560 Sale every Wednesday 3 p.m. Phone: (228) 452-2030

AMERICA’S AUTO AUCTION 6615 Mobile Hwy. Pensacola, FL 32526 Sale every Tuesday 9:30 a.m. Phone: (850) 944-1945

TO THOSE WHO CUSTOMIZE cars, there seems to be no question

GREATER NEW ORLEANS AUTO AUCTION 61077 St. Tammany Ave. Slidell, LA 70460 Sale every Wednesday 9:30 a.m. Phone: (504) 643-2061

ADESA KNOXVILLE 1011 Adesa Pkwy Lenoir City, TN 37771 Sale every Tuesday 6:30 p.m. & Friday 9:30 a.m. Phone: (865) 988-8000

ALBANY AUTO AUCTION 1421 Liberty Expressway SE Albany, GA 31702 Sale every Thursday 6:30 p.m. Phone: (229) 435-7709

Camaro Again Named SEMA Show’s Hottest Car

GEORGIA DEALERS’ AUTO AUCTION 7205 Campbellton Rd. Atlanta, GA 30331 Sale every Tuesday 10 a.m. Phone: (404) 349-5555

CENTER POINT AUTO AUCTION 100 13th Ct. NE Birmingham, AL 35215 Sale every Tuesday 6 p.m. Phone: (205) 856-6527 CHATTANOOGA AUTO AUCTION 2120 Stein Dr. Chattanooga, TN 37421 Sale every Tuesday 10 a.m. Phone: (423) 499-0015 DEALERS AUTO AUCTION OF HUNTSVILLE 26125 Hwy 72 Athens, AL 35613 Sale every Tuesday 9:30 a.m. Phone: (256) 232-0201 DEANCO AUTO AUCTION 3664 South Oates St. Dothan, AL 36301 Sale every Wednesday 10 a.m. Phone: (334) 792-1116 GEORGIA-CAROLINA AUTO AUCTION 884 E. Ridgeway Rd. Commerce, GA 30529 Sale every Wednesday 3 p.m. & Friday 6 p.m. Phone: (706) 335-5300

MANHEIM CENTRAL FLORIDA 9800 Bachman Rd. Orlando, FL 32824 Sale every Wednesday 9 a.m. Phone: (407) 438-1000 MANHEIM NASHVILLE 8400 Eastgate Blvd. Mt. Juliet, TN 37122 Ford Factory Sale every other Monday 11 a.m. Open Sale every Wednesday 9 a.m. GM Factory Sale every other Thursday 10 a.m. Nissan Factory Sale once per month Friday 9 a.m. Phone: (615) 773-3800 MANHEIM MISSISSIPPI 7510 US Hwy. 49 N Hattiesburg, MS 39402 Sale every Monday 5 p.m. & Thursday 9 a.m. Phone: (601) 268-7550 MANHEIM METRO ATLANTA 2244 Metropolitan Pkwy SW Atlanta, GA 30315 Sale every Tuesday noon Phone: (404) 767-3652 MIDFIELD CAR AUCTION 1468 Hartman Industrial Blvd. Midfield, AL 35228 Sale every Wednesday and Saturday-6:30 p.m. Phone: 205-923-6535 PENSACOLA AUTO AUCTION 401 West Burgess Rd. Pensacola, FL 32503 Sale every Thursday 9:30 a.m. Phone: (850) 477-3063 SHOALS NORTH ALABAMA AUTO AUCTION 651 Fairground Road Muscle Shoals, AL (256) 381-2745 Sale every Tuesday night @ 6:30 p.m. SOUTH ALABAMA AUTO AUCTION LLC 27472 Wilcox Road Robertsdale, Al 251-964-7012 Sale Days – Tuesday & Thursday 6:30 p.m. Sat. Auction @ 11 a.m. YOUR AUCTION 3010 Scherer Dr. N St. Petersburg, FL 33716 Sale every other Tuesday 11 a.m. – Birmingham The Jim Burke Automotive Group Phone: (800) 675-4444

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Scholarship Program - Ladies Auxiliary Directions and Qualifications for the Applicant 1. To be eligible, applicant must: (a)Be a high school senior by state standards (b)Be the son, daughter or grandchild or in the guardianship of an active AIADA member (in case of guardianship must provide legal documents) (c)Must supply a transcript of courses, grades, class ranking, and scores on college entrance exams such as SAT or ACT taken by applicant (d)Provide a personal resume’ reflecting extra curricular, civic and personal activity of applicant while in High School. (e)Application must be signed by all required to sign. (f)In order to be more fair and equitable we request that you DO NOT include a photo with this application. However, we do require a presentable press photo to be supplied by the winner(s) of this award. 2. All information included in this application must be completed by applicant and returned to: AIADA Ladies Auxiliary Scholarship Committee P.O. Box 19627 Birmingham, Al. 35219 or the application can be delivered during the hours of 8:30 AM to 4:30 PM Monday thru Friday (except holidays) to120 Vulcan Road Birmingham, Al. 35209 ALL INFORMATION SUPPLIED BY APPLICANT IS FOR USE BY THE SCHOLARSHIP COMMITTEE OF THE LADIES AUXILIARY OF AIADA AND WILL BE TREATED AS CONFIDENTIAL.

3. In the same calendar year the scholarship is awarded, applicant must have filed an application for admission and be accepted to an accredited college or technical school prior to the fall term of the chosen institute. The applicant must provide this information and provide a mailing address of the office of admissions or the appropriate recipient of the scholarship monies 30 days prior to the first day of fall registration. If the awarded scholarship monies are not properly filed for and collected by the beginning of the next calendar year the scholarship will be considered abandoned and the funds returned to the Ladies Auxiliary of the AIADA for future scholarship funding. It is the scholarship recipient’s responsibility to make all of the arrangements for college admission and to provide all the information needed to the Ladies Auxiliary Scholarship Committee in order to fulfill the financial obligations of this committee. 4. The AIADA Ladies Auxiliary scholarship is in the amount of $1,000.00 for one (1) year. The Scholarship Committee of the Ladies Auxiliary will review the application and the scholarship will be awarded to the winning nominee(s) with the best record of academic achievement, community involvement, and will be weighted with the amount of work history and extra curricular activity in which the applicant has been a successful participant. The best-rounded individual with the best records reflecting the ability to achieve and succeed at the next level will be the recipient of this award. 5. Scholarship recipients will be notified by March 31, 2012. In addition to a press release in the local newspapers, awards day at the recipient’s high school, recipient(s) will be honored at AIADA’s annual convention during the awards banquet. APPLICATION DEADLINE: FEBRUARY 29, 2012 To apply for the National Scholarship, go to niadafoundation.org for an application.

Scholarship Application In your own limited words answer the following Date of application:_________________ questions: Name: ________________________________________ First Middle Last 1.What is your most memorable experience of high school? ______________________________________ Date of Birth:_______________________ ____________________________________________ ������������������������������������������� Home Address:�������������������������������� ____________________________________________ City: _________ State:_____ Zip:____________ County: ___________________

2.How has your exposure to the automobile business affected your life?����������������������������� ������������������������������������������� Mailing Address:������������������������������� ������������������������������������������� ____________________________________________ City: _________ State:_____ Zip:____________ County: ___________________ Signature of Applicant: ____________________________________________ Home Phone: ___________ Fax:_________Cell: _______ Printed name of Applicant: Email Address: _________________________________ ������������������������������������������� Name of High School: ___________________________ Signature of Parent or Guardian: Date of Graduation: _____________________ ������������������������������������������� Date of Awards Day: ���������������������������� Printed name of Parent or Guardian: ������������������������������������������� Name of guidance counselor: ______________________ Signature of guidance or career counselor: Name of Local Newspaper: _______________________ ������������������������������������������� Name of Dealership (how eligible): _________________ Printed name of guidance or career counselor: ������������������������������������������� Relationship to qualified dealer: ___________________ Signature of qualifying dealer: Name of Parent(s) or Guardian(s): __________________ ������������������������������������������� _____________________________________________ Printed name of qualifying dealer: Name of institute that applicant plans to attend: _______ ������������������������������������������� _____________________________________________ Must Include Following: Transcript of Grades.Resume’ ,SAT or

Course of study or major planning to pursue:__________ ACT scores (should be on transcript) _____________________________________________ Optional: Letters of recommendation (maximum of 5) 20

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ComplianceOverdrive

What is Your Agreement? WHEN IT COMES TO THE AGREED-ON SALES finance terms between a dealer

and a buyer, a lot of questions need to be addressed to avoid misunderstandings and, consequently, compliance and legal troubles for a dealership. What is the “agreement?” Is it in the credit application, buyer’s order, conditional delivery agreement, trade-in summary, manufacturer’s warranty, retail contract, other documents, or in some combination of them? If the terms are found in many documents, how do you know which ones? In short, if you can’t easily determine which documents comprise your complete sales financing agreement then you are going to have challenges enforcing it. If the terms of those documents don’t all agree with each other, you are also going to have challenges enforcing them. A strategy to avoid confusion is to say one document comprises the entire agreement between the parties. For example, a retail installment sales contract (RISC) may include a provision (usually near the signatures) that the entire sales financing agreement between the parties is in the RISC. This makes the RISC the one and only document containing the entire and final terms of the transaction. This is a “merger” or “integration” clause because it merges or integrates all terms into one agreement. The advantage is that if there is litigation, the one and only document needed to interpret the rights and responsibilities of the parties is the RISC. But a recent court decision highlights how the advantage of a merger clause can turn into a disadvantage. In Duval Ford v. Rogers (District Court of Appeals, Florida, 2011), the court held that a dealer could not enforce its arbitration provision in the buyer’s order. Why? Because the RISC included a merger clause, saying that it contained the entire agreement between the dealer and buyer. Since the arbitration provision wasn’t in the RISC (and wasn’t included by reference), it fell outside the terms of the agreement. This was a case in which the merger clause kept out terms the dealer wanted to be a part of the final agreement. That disadvantage of a merger clause can be overcome with an adjustment to the clause. A variation of the single document approach is including in the RISC specific references to other documents saying they are also a part of the merged terms. Together, the RISC and the referenced documents describe the entire agreement between the parties. For example, the RISC could say the parties signed a separate conditional delivery agreement, which is incorporated into and made a part of the RISC by reference. The RISC could also note that

warranty documents are provided separately, including the Federal Trade Commission’s used car window form. Incorporating other documents by reference allows the parties to agree that a specific set of documents comprise the entire agreement. If you use this approach, you need to make sure the RISC includes cross-references to all the separate documents you want included in your final agreement. It may sound like you should incorporate everything by reference into the RISC – that way you have it all covered. Not so. Another recent Florida decision points out the potential danger of including other documents. In Cuello v. Maroone Honda of Miami (Cir. Court, 11th Judicial Cir., Florida, 2011), the court found it was inconsistent to have RISC terms that purported to be final but then have a separate conditional delivery agreement saying the terms might not be final. The court held that the inconsistency created a Truth in Lending violation and corresponding state statute violations. One lesson from that case is that the documents you choose to represent the entire sales financing agreement need to be consistent with each other (though whether the RISC and conditional delivery agreement are truly inconsistent is controversial and a topic unto itself). The RISC should include a cross-reference and maybe even a brief explanation about the other specifically included documents so all parties understand that they work together and why. Perhaps another lesson from the Cuello case is that dealers should carefully choose the documents they want to be enforced as part of the final sales financing agreement between the parties. For example, preclosing documents may reflect incomplete terms or terms in flux due to information not yet available or in negotiation. They might not include additional warranty protection or service products a buyer decides to purchase at closing. Merging those documents and terms would potentially create confusion about the actual agreed-on final terms. The market’s response to recent Florida cases is still being determined. For now, it is clear that in Florida, or any other state, the best course of action is to review and determine which documents are intended to be a part of your final sales financing agreement with a buyer and then confirm that your RISC and other documents make it clear.

BY CHIP ZYVOLOSKI Chip Zyvoloski is a senior attorney for indirect lending at Wolters Kluwer Financial Services. For more information, visit www.wolterskluwerfs. com/indirect.

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INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION PAID • BHPH: WHAT’S IN STORE FOR 2012 • COMPLIANCE OVERDRIVE • A YEAR IN REVIEWS Visit us at www....