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STATE CONVENTION RECAP

ALSO Tips From the DMV

PLUS Economic Outlook

DECEMBER 2011

WEST COAST DEALER

INDEPENDENT AUTOMOBILE DE ALERS ASSOCIATION OF CALIFORNIA

Quality Dealer Rey Guluarte with Congressman Tom McClintock

DALLAS, TEXAS Permit No. 2079

PAID

PRSRT Standard U.S. Postage

V isit us at w w w.iadac.org

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The NIADA Certified Pre-Owned Program 11/19/10 12:04 PM Page 4

The NIADA Certified Pre-Owned Program was standardized in November of 2010 to reflect a 12 month, 12,000 mile, comprehensive $0 deductible warranty and now that we have close to 12 months under our belts we have the remarkable research to show the impact it has had on dealers.  It was already proven that adding a Certified program to a dealership could turn the inventory quicker and make the dealer more money.  But there was little research showing how much it could impact an CA_1010.qxd:Layout 1 Independent 11/19/10 PM Page 4 Used12:04 Car dealer. By keeping track of when our dealers register their vehicle as certified on NAC’s turn-key Express New Executive Committee Lane system, compared to the date of when the vehicle is retailed, the NIADA Certified Pre-Owned program found that  dealer’s inventory is turning on an average of 21 days.  We have also  were able to 10 DMV Tips (same picture) determine that dealers are getting an average profit of $2,062.28 perExecutive unit.Committee: Rod Davis, President Rod Davis Terry Degmetich 14 Hiring Smarter Mark Glover, Sr. Vice President (New Picture, see below) New Executive Committee Mike Casey, Vice President Picture) President Secretary It is great having this information proving that there is a program out there (Same that can help the 24 State Convention Recap Vince Cardinale, Vice President (Same Picture) Brasher's Auto Auction Greg Meier, Vice President (New Picture, see below) I - Deal Cars Independent dealer sell more cars and make more money.  Terry Degmetich, Treasurer (same Picture) Rio Linda, CA 95673 Mike Gough, Roseville, CA 95678 Executive Committee: Rod Davis, President (same picture) Secretary (New Picture, seePicture, below)see below) Mark Glover, Sr. Vice President (New David Aahl, Chairman the Board (same picture) 916-870- 9254 916 - 991 - 5555 Mike Casey, Vice of President (Same Picture) Vince Cardinale, Vice President (Same Picture) idealmaster@surewest.net rdavis@brashers.com Greg Meier, Vice President (New Picture, see below) Terry Degmetich, Treasurer (same Picture) 6 Named IADAC Quality Dealer of the Year Vince Cardinale R A2Z EDUCATION SERIES - AutoZone Mike Gough, Secretary (New Picture, see below) David Aahl, Chairman of the Board (same picture) 8 Auction Standards Help Customers Educating the independent dealer to deliver David Rod Davis Davis Mark Glover 13 Credit Applications Do’s & Don’ts Rod David Aah1 AahlTerry Degmetich the highest quality service levels to your Vice President Chairman the President Sr. Vice President Chairman of of theBoard Board President Secretary 14 efficiently, Striking Gold: Convention customers, manage your shop train IADAC’s 42nd Annual Brasher’s Auto Auction County Financial North Bay Auto Auction A to Z Motors North Bay Auto Auction Brasher's Auto Auction I Deal Cars Rio Linda, CA 95673 Galt, CA 95632 your technicians and maximize profits. Fairfield,CA CA94534 94534 Winters, CA 95694 Fairfield, Rio Linda, CA 95673 Roseville, CA 95678 916-991-5555 209-712-1886 707-864-1040 niada.tv 925-914-919912 Local 707 - 864 - 916-8701040 9254 916 991 5555 rdavis@brashers.com mark@countyfinancial.com david@nbauto.com Mark Glover THE CURRENT STATE atozmotors1@aol.com david@nbauto.com idealmaster@surewest.net rdavis@brashers.com R TURBO TIPS – Cars.com by Clu 6 Named IADAC Quality Dealer of the Year OF THE AUTO INDUSTRY Mark Glover Vince Cardinale Provides Independent Dealers with practicable Greg Meier Terry Degmetich 8 Auction Standards Help CustomersJohn McElroy is host of the Rod long-running Davis Mike Gough Terry Degmetich “Autoand actionable tips to help you sell more cars now! Rick Gomez 10 10 Que Mark Glover Vice President Treasurer Aah1 Secretary President David Secretary 13 Creditniada.tv Applications Do’s & Don’ts line Detroit” television program, Diablo Motors, San I-Deal Cars Vice President Sr. Vice President covering all asMG Auto Wholesale, 14 Auction Vice President Chairman of the Board Brasher's AutoVacaville, Auction CA 95687 I - Deal Cars Ramon, CA Roseville, CASales 95678 14 Striking Gold: IADAC’s 42nd Annual Convention RJ94583 Auto Brokers Azteca Auto A to95678 Z Motors North Bay Auto Auction pects of the automotive industry. this presentaRio Linda,InCA 95673 Roseville, CA Phone 925-830-8747 916-8709254 In the Sp Phone 707-481-6646 R NIADA Mobile Carmichael, CA18 95608 Galt, CA 95632 Winters, CA 95694 Fairfield, CA 94534 12 Local Auto idealmaster@surewest.net - 991 - 5555 916-870- 9254 tion, McElroy thorough and insightful Get access to Manheim and Independent runprovides a 916 916-425-3349 209-712-1886 925-914-9199 707 864 1040 rdavis@brashers.com idealmaster@surewest.net THE CURRENT STATE by Clunke rgomez739@yahoo.com mark@countyfinancial.com lists,Dealer VehicleofHistory Reports,review Guide Books and we’ve been, where of where we now atozmotors1@aol.com david@nbauto.com amed IADAC Quality the Year Vince Cardinale much more. Free VIN Scanner when youwhere sign our industry is headed. Taped OF THE AUTO INDUSTRY are, and uction Standards Help Customers Mike Casey 10 10CERTIFI Questions Larry Laskowski up!!! Available for Android and iPhone devices. Greg Meier(crop to head shot please) Aah1Association’s NOT PICTURED Greg Meier(crop Mike to head shot please) at the Automotive Fleet &David Leasing Casey Larry Laskowski John McElroy is host of the long-running “Autoedit Applications Do’s & Don’ts Vice President Executive Director Rick Gomez Mark Glover Niada.gigglepop.com DEALER 14 Auction Secur Chairman of the Board Vice President Cal West Motors The Auto Outlet Vice President Treasurer Mike Macaulay Vice Sr. Vice President riking Gold: IADAC’s Annual Convention Annual all Conference. line Detroit”42nd television program, covering asSan Leandro, CAPresident 94577 Roseville, CA 95678 North Bay Auto Auction A toAuto Z Motors Chairman West Motors The Outlet 18 In the Spotligh RJ Auto Brokers IADAC Magazine/WebsiteCal Azteca Auto Sales 510-352-9230 916-601-4976 Dealers pects of the automotive industry. In this presentaCA Galt, 94534 Winters, CA CA 95694 CA carsystems@comcast.net San Leandro, CA 94577 Roseville, 95678 Carmichael, 95608 CA 95632 clwest1977@aol.com autoview@surewest.net CMD CLASSES Fairfield, 707 - 864 - 1040 925-914-9199 510-352-9230 support the 916-784-3408 tion, McElroy provides a thorough and insightful 916-425-3349 209-712-1886 clwest1977@aol.com autoview@surewest.net david@nbauto.com atozmotors1@aol.com dards of th rgomez739@yahoo.com mark@countyfinancial.com ADESA. ..........................................Inside Cover review of where we’ve been, where weBack now

INSIDE

INSIDE Executive Committee INSIDE EXECUTIVE COMMITTEE MAGAZINECONTENTS

WHAT’SNEW

EXECUTIVE COMMITTEE

MAGAZINECONTENTS

EXECUTIVE COMMITTEE

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ADVERTISERSINDEX E CURRENT STATE Dealers who demonstrate THE AUTO INDUSTRY L. Hawkins Insurance.is ...................................19 are, andAllen where our industry headed. Taped

commitment and day semina CERTIFIED support the principles and ethical business Mike Gough, (crop to head shot please) AutoTrader.com ........................... Inside Front Cover Merchandi McElroy atis the hostAutomotive of the long-running “Auto-Association’s Mark Glover Rick Gomez Fleet & Leasing Mike Casey Larry Laskowski DEALERƒ P standards of the CMD® designation comBlack Book............................................................18 Resources, Sr. Vice President Vice President Vice President Treasurer Detroit” television program, covering all asAnnual Conference. plete aBack four-day that Auto addresses BusiBrasher’s Sacramento Auto Auction........ Cover seminar Azteca Sales RJ Auto Brokers Cal West Motors The Auto Outlet University Mike Macaulay, Magazine Committee Chair • Car Systems Dealers who s of the automotive industry. In this presenta-ness Management, Merchandising, Group ...........................................................9 San Leandro, Roseville, CA 95678 Galt, CA 95632 CA 95608CA 94577 Financial Roseville, CACarmichael, • 916-784-7155 • carsystems@comcast.net Continuing CMD Carco CLASSES McElroy provides a thorough and insightfulManagement, Human Resources, 510-352-9230 916-784-3408 209-712-1886 916-425-3349 Kelley Blue Book...................................................21 At this year’s annual IADAC Convention, attendees received a rare treat in that the Quality Dealersupport the princ and Business clwest1977@aol.com autoview@surewest.net of the CMD mark@countyfinancial.com rgomez739@yahoo.com Luncheon featured speaker Congressman Tom McClintock. Congressman McClintockdards NEXT Lobelbeen, w of where we’ve where we commitment nowPlanning.and CL Northwood University provides thekeynote inDealers whoFinancial......................................................11 demonstrate was introduced by IADAC’s lobbyist, Bill Dohring, who shared an old anecdote that spoke to theday seminar that a Manheim.com ......................................................17 and where our industry is headed. Taped VISIT NIAD structor and awards fourcongressman’s Continuing Education support Nowcom..................................................................5 the principles and ethical business high degree of integrity. Merchandising, e Automotive Fleet &ofLeasing Association’s Larry Laskowski Mike Casey units for comthis course. standards the CMD® designation The main topic was the economy and the partisan battles that perpetuate the low approval ratings Protective ...............................................................3 Resources, and Treasurer Vice President The next class 10-12 at the SuperMedia ual Conference. current Congress receives. Speaking to a group of auto dealer business owners, his comments plete a SmartAuction four-day seminar that addresses Busi-will be Marchthe .......................................................13 The Auto Outlet Cal • West Motors University provid Mike Macaulay, Magazine Committee Chair Car Systems Hotel and Conference Center at DFW. were well received. Congressman McClintock, who is clearly pro-business and fiscally conservative, TD Auto Finance......................................................7 ness Management, Merchandising, Financial Roseville, San Leandro, 94577 Dear Editor: is always Educa here Roseville, CA95678 •several 916-784-7155 • the carsystems@comcast.net made hisCA point times – utilize democratic processCA and vote if you desire change. Carfax Continuing MD CLASSES 916-784-3408 510-352-9230 Management, Human Resources, and Business on the rare occasions th Action Auto R autoview@surewest.net clwest1977@aol.com Northwood Universityand provides the inNEXT CLASS I’d like you to read the following carefully. IADACOFFICE ADESA ........ lers whoPlanning. demonstrate commitment Carfax is constantly looking for ways to needed. Inconsistent odo • You cannot legislate the poor into prosperity by legislating the wealth out of prosperity. andand awards four Continuing Education VISITraise NIADA.CO AutoTrader.co FOR INFORMATION ON HOW TO port the structor principles ethical business Action Auto Recovery.............................................. 6 further improve the exceptional service we example, can a red AutoXplorer.. What one person receives working for, another person must work for without receiving. units for this course. BECOME A MEMBER PLEASE CONTACT Allen L. Hawkins Insurance•Services ....................... 9 without dards of The thenextCMD® designation comprovide our independent dealer customers. results of simple human e Black Book.... LARRY@IADAC.ORG • (916) 601-4976 class will be March 10-12 at the SuperMedia • The government anybody anything the government does not first take from Inside Frontcannot Cover give to We e a four-day that addresses Busi-AutoTrader.com ............................ Brasher’s Sac have• aCar dedicated team of professionals easier for dealers to initi Hotelseminar and Conference Center at DFW. somebody else. Mike Macaulay, Magazine Committee Chair Systems INDEPENDENT Black Book ............................................................. Dear Editor: Carfax is alwaysquickly. here to help, 13 Cars.com We .... Management, NATIONAL Merchandising, Financial that handles any customer requests get aespecially faster resolution. AUTOMOBILE DEALERS ASSOCIATION Roseville, CA • cannot 916-784-7155 • carsystems@comcast.net • You wealth by dividing it. Brasher’s Sacramento Auto Auction ........multiply Back Cover DealerClick .. on the rare occasions that data research is • WWW.NIADA.TV nagement, HumanWWW.NIADA.COM Resources, and Business Check out the newly result efforts, I amthe proud manage more Action Auto Recover • When half ofBack the people get the As ideaathat theyof doour not tireless have to work because other halftomers is going NIADA HEADQUARTERS: J. a L. Von Arxef& Cars.com ......................................Inside Cover looking Carfax is constantly for ways to needed. Inconsistent odometer readings, foroperations BROWN BLVD. • ARLINGTON, TX 76006-5203 ning. Northwood2521 University provides the inADESA .................. to take care of them, and when the other half gets the idea that it does no good to work because to say that we have streamlined our data rekeeping their r Lobel Financia PHONE (817) 640-3838 DealerClick .............................................................. 5 IADAC webs Action Auto Recovery .............................................. 6 further improve exceptional service we for,example, raise of a the redredesigned flagofbut may be the Manheim FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF tor and awards four Continuing Education AutoTrader.com ...... somebody elsethe is going to get what theyprocess. worked that is the can beginning end anyAny nation. Adv search dealer in Califor (800) 682-3837 OR TROY@NIADA.COM. J. L. Von Arx & Associates ..................................... 12 Allen L. Hawkins Insurance Services ....................... 9 provide our independent dealer The customers. AutoXplorer............ results isofeasily simplestarted humanwith error. We’ve made it SmartAuction for this course. at www.iadac.org. THE WEST COAST DEALER IS PUBLISHED BI-MONTHLY BY THE research process tions about their Carfax Manheim Advantage....................................... 11 One ofa the great10, strengths of this nation is that we may enact change ifto a majority wants change. AutoTrader.com ............................ Inside FrontASSOCIATION Cover Western Fund Black Book.............. NATIONAL INDPENDENT AUTOMOBILE DEALERS next class will be March 10-12 at the SuperMedia We have dedicated team of professionals easier for dealers initiate the process and SmartAuction fewmust simple Any Carfax-subscribresearch process canGene ca SERVICES CORPORATION, 2521 BROWN BLVD., ARLINGTON, But there is one catch. 7 You must just vote.aYou act. steps. Even though you are busy We tending to yourto own Western want know what Black Center Book ............................................................. 13.......................................................... Brasher’s Sacramen and Conference at DFW. TX 76006-5203; PHONE (817) 640-3838. PERIODICALS POSTAGE that handles any customer requests quickly. get a faster resolution. We’re helping our cusbusinesses, you must realize there are people who have nothing better to do than to try to redistribute Western Funding ................................................... 16 Dear Editor: Carfax is always here to help, especially ing dealer in California can access their CarCars.com .............. Services at 888-695-1885 Brasher’sPAID Sacramento Auto Auction ........ Back Cover AT DALLAS, TX AND AT ADDITIONAL OFFICES. POSTMASTER: hard-earned Check outoccasions the newly think of the new site. LeIN As your a .................................. result of our dollars. tireless I account am proud tomers manage aNext, moredata efficient business and NATIONAL ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 / Protective Western General 3 efforts, DealerClick ............ on rare that research is you. Cars.comSEND ......................................Inside Back Cover fax atthecarfaxonline.com. serve BROWN BLVD., ARLINGTON, TX 76006-5203. THE STATEMENTS SBthat 783 we washave introduced recently and itdata wouldrehave provided for a short, 30-dayclick period fortoasmoothly. property AUTOMOBIL to say streamlined our keeping their operations running J. L. Von Arx & Asso AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIDealerClick .............................................................. 5Carfax is owner constantly looking for (non) ways to redesigned IADAC website needed. odometer readings, know by e-mailing us at the link which takesItInconsistent you directly to the online to respond to an ADA Compliance notice. would also provide a 120-day period to for make WWW.NIAD VIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE Lobel search process. Anyraise dealer innotflag California that ques-Financial ...... J. L. Von Arx & ..................................... 12 any needed changes to become ADA compliant. InForm. committee, it awas ablebut to muster ahas single VIEWS OFAssociates THE WEST COAST DEALER, IADAC, OR THE NATIONAL on Auto Recovery .............................................. 6FOR further improve the exceptional service we example, can red may be the Data Correction After submitting the Sincerely, INFORMATION ON HOW TO Advantag at www.iadac.org. INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, motion. The research process is easily started with tions about their Carfaxgetanswers@iadac.org. account or theManheim data 2521 Advantage....................................... 10, 11 BROWN n L. HawkinsManheim Insurance Services ....................... 9BECOME THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION A MEMBER form withresults the 17-digit vehicle identification provide our PLEASE independent dealer customers. ........6 of traction, simple human error.why? We’ve made it SmartAuction When aCONTACT logicalsteps. offering such as SB 783 cannot get do you wonder Who areBusiness your PHONE (817) AS MEMBERS OF NIADA, DOES NOT CONSTITUTE AN ENDORSESmartAuction .......................................................... 7 just a few simple Any Carfax-subscribresearch process can call Carfax LALBRACHT@IADAC.ORG We want to know what you Trader.com ............................ Inside Front Cover Western Funding .... MENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT FOR ADVERTIS number requested research, a Carfax reprepresentatives who will not support you?and I know some of you to have had to the pay off ADA activist/ Kari Sloan We have a dedicated team of professionals easier for dealers initiate process and Western2011 Funding ................................................... 16 315-2869 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED. ingextortionists, dealer in California can their CarServices at them 888-695-1885. Itthey isManager, our pleasure Western General /P (800) 682-3837 k Book ............................................................. 13(888) not because youaccess were unable towill provide access for but because know how resentative work with you throughout the Dealer Business think of the new site. Let us our custhat any customer requests quickly. get a faster resolution. We’re helping MAGAZINE MGR./SALES Troy Graff • troy@niada.com THE WEST COAST D WesternSTATE General / Protective .................................. 3 handles work the at system. IADAC does notNext, condone ADA noncompliance. In fact, it is just the opposite. We faxtoaccount carfaxonline.com. click to serveand you. her’s Sacramento Auto Auction ........•Back Cover EDITOR Andy Friedlander andy@niada.com DPENDENT AUTO data verification process confirm the issue Carfax Check out the newly INDEPENDENT As a result of our tireless efforts, I am proud tomers manage a more efficient business and would like to see every member compliant and healthy. NATIONAL INDEPE ART/PRODUCTION MGR. Christy HaynesNATIONAL • christy@niada.com TION, 2521 BROW know by e-mailing us at this: Every single the link which takesyou you directly to the online .com ......................................Inside Back CoverAUTOMOBILE DEALERS PRINTING Nieman Printing ASSOCIATION 640-3838. PERIOD AUTOMOBILE DEAL So if you think don’t have time to vote at the next opportunity, think about has been resolved. In most cases, the entire to say that we have streamlined our data rekeeping their operations running smoothly. erClick .............................................................. 5WWW.NIADA.COM OFFICES. POSTMA Data Correction Form. and After submitting the Sincerely, redesigned IADAC WWW.NIADA.COM • WWW.NIADA.TV deadbeat will be voting, it’s very likely the vote they cast bewebsite to retain the same group that helps FOR INFORMATION ON HOW TO process is getanswers@iadac.org. completed in will just few hours. CATIONS, 2521 B search process. Any dealer in aCalifornia that has quesVon Arx & Associates them takethe your17-digit dollars. vehicle identification BECOME..................................... A MEMBER PLEASE12 CONTACT with NIADA HEADQUARTERS: form MENTS AND OPIN at www.iadac.org. ARLINGTON,process 76006-5203 B Y Laccount A R R Y Lor A Sthe KOW S K2521 I AUTHORSBLVD. AND DO LALBRACHT@IADAC.ORG10, 112521 BROWN BLVD. The •research is easilyresearch, started awith data heim Advantage....................................... BROWN numberTXand requested Carfax tions rep- about Kari their SloanCarfax PHONE (817) 640-3838 COAST DEALER, IA (888)4 315-2869 (817) 640-383 D want E research A to L Manager, Eprocess R Dealer B call O N D H E PHONE L P rtAuction .......................................................... 7FOR ADVERTISING just aINFORMATION few resentative simpleCONTACT: steps. Any Carfax-subscribcan Carfax Business TROY GRAFF DEALERS ASSOCIA We know what you will work with you throughout the Business Unit FOR ADVERTISING IN OR TROY@NIADA.COM. THEIR IDENTIFICAT ern Funding ................................................... 16(800) 682-3837 ingA dealer in California can access their Car-the Services atmotor 888-695-1885. Itdallis our Since pleasure 1993, Bond Source When it comesCarfax to vehicle bonds, (800) 682-3837 OR TR data verification process and confirm issue O ENDORSEMENT NATIONAL TINDEPENDENT H E W E S T C O The A SWest T Coast D E Dealer L EisRpublished DECEMBER 2011 www . i aus ac.or g think of the new site. Let bi-monthly by the National IndTHE COAST DEALER 2010 BY fast NIADA SEI ern General / Protective.................................. 3 Westlake Financial Services has named service. AllWEST five topped th Agency is committed to an dealer principals are not alike. At Bondtheir fax account carfaxonline.com. Next, click to serve you. AUTOMOBILE DEALERS ASSOCIATION hasatbeen resolved. most cases, the entire pendent Automobile Dealers Association Services Corporation,In 2521 DPENDENT AUTOMOBILE STATE MAGAZI service. IADACranked members m Source Insurance we They offer aare: top five auctions forAgency, Q3-2010. Nevada first WWW.NIADA.COM • WWW.NIADA.TV TION, 2521 BROWNMike BLVD Brown Blvd., the Arlington, 76006-5203; (817) 640-3838. know by e-mailing us at com- bondheim EDITOR: H linkTXwhich takes you directly to the online process isphone completed in just a few hours. for a bond mon sense approach to underwriting. A Nancy R. Chapman 640-3838.ART/PRODUCT PERIODICALS PO Periodicals postage paid at Dallas, TX and at additional offices. POSTNIADA HEADQUARTERS: straight quarter, ranking fi CA_1211.indd 4 11/18/11 3:16 PM OFFICES. POSTMASTER: SE Data Correction Form. After submitting the Sincerely, or nchapman@aecbusiness’ net worth is the key along with the 888-855-0100

PS!

Executive Directors Message

Carfax Is Here To Help

BREAKING NEWS! ADVERTISERSINDEX BREAKING NEWS! Carfax Is Here To Help

ADVERTISERSINDEX

DVERTISERSINDEX

BREAKING NEWS! BREAKING NEWS!

ADVER

ADVERTIS

Carfax Is Here To Help

BREAKING NEWS! BREAKING NEWS!

MASTER: Send address changes to NIADA State Publications, 2521 R INFORMATION TO TX 76006-5203 2521 BROWNON BLVD.HOW • ARLINGTON,

“Westlake Remarketing Releases Q3 Top Au getanswers@iadac.org.

PRINTING: Nie


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Scholarship Recipients Sound Off The Victor J. and Ethel G. Snyder Memorial Scholarship helps many young men and women as they seek higher education. Below you’ll find a sampling of the gratitude expressed by this year’s recipients and future leaders.

T H A N K

Y O U

NIADA Association Executive Counsel would like to thank Stars GPS and ServNet for sponsoring the OK City meeting held this past October.

Congratulations to all 33 Scholarship award winners. ****** Thank you for the very generous college scholarship. This check will be used toward my tuition. I am honored to have received one of the scholarships. It is wonderful what your organization does for young adults. Thank you again.

President’s Message

items – we earned more than $15,000 for the Vic We are fast approaching the presidential election and Ethel Snyder Scholarship fund – and my six in the United States. I’m not looking forward to CA_1010.qxd:Layout 1 11/19/10 12:04 PM Page 4 Most sincerely, children thank you all as well. months of degrading and misleading political ads, Alexis Colett I know many members grumbled about the but it does make for interesting talk radio. location. I couldn’t blame them; after all, what The incumbent president will fight relentlessly ****** is there in Oroville? Yet it turned out to be a very for the prestigious status of serving for two terms. accommodating venue. The convention center IADAC, thankfully, is just the opposite. When In no way could I express proper gratitude worked great for the meetings, meals and trade someone serves as president they hope they do for the scholarship awarded to me on show. There might not have been a pool, but the right the first time; if not, a second term is granted behalf of the Victor J. and Ethel G. Snyder bathtubs in the rooms were a close second. Those for redemption purposes. I hope I figure things out Memorial Scholarship. Coming from a who left early Saturday missed an amazing dinner at in the coming year, because three is not an option. family that has struggled to finance my the steak house on the sixth floor. I, for one, would In reality, I appreciate the trust the association sister’s college education, the award go back just for that. has put in me to carry the gavel for one more year. has been such a help in purchasing the Nevertheless, we are always on the lookout The convention in Oroville was a fabulous way to items deemed necessary by my college for new places to go for our meetings, so let Mike end a great year for the association. I appreciate of choice, the University of California, Casey know if you have a favorite spot that would the hard work of Larry and Kathy Laskowski, who San Diego. I would not have been able work for IADAC. labored tirelessly to make the eventTerry Degmetich Rod Davis to finance the required books for my fall a great success. I would also like toSecretaryI appreciate the members of the executive President 2011 classes, or the laptop that will aid my Brasher's Auto Auction Cars who have agreed to another term, and recognize Mary Glover for her hardI - Dealcommittee success within my fine arts major. Riowork Linda, CA 95673 Roseville, CA 95678 those who have come on for the first time. should in putting the auxiliary auction 12 We Local Auto Dealers U 916 - 991 - 5555 916-870- 9254 have another great year. I look forward to seeing you together. David Aahl, Henry Cadle andidealmaster@surewest.net rdavis@brashers.com by Clunkers Thank you for everything you are helping 6 Named IADAC Quality Dealer of the Year in January for our next quarterly meeting. Cardinale I had a great time auctioning off theVince all to accomplish. 8meAuction Standards Help Customers 10 10 Questions for AutoCheck B Y R O D David D AAah1 VIS 13 Credit Applications Do’s & Don’ts 14 Auction Security Chairman of the Board Vice President Sincerely, 14 Striking Gold: IADAC’s 42nd Annual Convention North Bay Auto Auction A to Z Motors 18 In the Spotlight Milan A. Prince

INSIDE

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EXECUTIVE COMMITTEE

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THE CURRENT STATE ****** OF THE AUTO INDUSTRY McElroy is host of the “AutoIJohn want to thank you for long-running your generous line Detroit” television program, allaasscholarship award! This extra covering money is huge to me and my family as we pects blessing of the automotive industry. In this presentalook at the college this tion, McElroy providesexpenses a thoroughcoming and insightful year. honored to bebeen, a recipient reviewI am of where we’ve where of wethis now scholarship. are, and where our industry is headed. Taped at the Automotive Fleet & Leasing Association’s Thanks again, Annual Conference. Aaron Wolfe

CMD CLASSES

****** Dealers who demonstrate commitment and thewrite principles andyou ethical I support wanted to and thank for thebusiness very standards gift of Ithe CMD® from designation comgenerous received IADAC on plete aoffour-day seminar addresses Busibehalf the Victor J. andthat Ethel G. Snyder Memorial Scholarship Master Trust.Financial ness Management, Merchandising, Management, Human Resources, and Business The money will be applied toprovides further the myinPlanning. Northwood University education Embry-Riddle Aeronautical structor andatawards four Continuing Education University Prescott, Ariz., where I will units for thisincourse. be helicopter pilot. Thestudying next class to willbecome be Marcha10-12 at the SuperMedia Hotel and Conference Center at DFW.

Respectfully, Henry Cadle III

ADVERTISERSINDEX

Fairfield, CA 94534 707 - 864 - 1040 david@nbauto.com

Winters, CA 95694 925-914-9199 atozmotors1@aol.com

Senior VP Message Mark Glover Sr. Vice President Azteca Auto Sales Galt, CA 95632 209-712-1886 mark@countyfinancial.com

Rick Gomez Vice President RJ Auto Brokers Carmichael, CA 95608 916-425-3349 rgomez739@yahoo.com

CERTIFIED MASTER DEALERƒ PROGRAM

Dealers who demonstrate c support the principles and ethic dards of the CMD“ designation faces. I have personally talked to several Oroville, Calif., was the home of the 43rd Annual dayfirst-time seminar that addresses Busin attendees since the convention and they cannot Financial Mana IADAC Convention in October. The Gold Country Merchandising, Larry Laskowski Mike wait Caseyfor next year to come around. They have all Casino hosted more than 100 dealers and vendorsVice President Resources, and Business Plann Treasurer saidMotors it was informative and could help benefit them this year atThewhat was said to be one of the bestCal West Auto Outlet University provides the instructo Roseville, CA 95678 San Leandro, 94577 in theirCAown dealership. We had some Continuing great guest conventions in recent years. Education units for th 916-784-3408 speakers and seminars put on by a few of our The convention week started with our vendors510-352-9230 autoview@surewest.net clwest1977@aol.com NEXT CLASS OCTOBER vendors that were appreciated by all. setting up their booths at Brashers Auto Auction FOR MOR I want to give special thanks toVISIT theNIADA.COM past on Tuesday, then moving to San Francisco Bay presidents of IADAC who were in attendance on Wednesday, then over to North Bay Auto for their continued support. This convention has Auction on Thursday. According to our vendors, Mike Macaulay, Magazine Car Systems shown IADAC is growing in numbers again and will the week leading up to the Committee convention Chair was a •huge New Executive Committee Roseville, CAthem • 916-784-7155 continue to grow as time goes on. Our goal for next success for to be able to • seecarsystems@comcast.net and talk to that Action Auto Recovery ..................... year’s convention is 250-plus in attendance. My many dealers in a three-day period. We want to Executive Committee: Rod Davis, President (same picture) ADESA ........................................... Mark Glover, Sr. Vice Presidentthanks (New Picture, seeagain below) challenge to all the dealers who were in attendance give special to all the auctions who Mike Casey, Vice President (Same Picture) AutoTrader.com Vince Cardinale, Vice President (Same Picture) is to bring one new dealer to next year’s convention................................ participated in the week’s events leading up to Greg Meier, Vice President (New Picture, see below) AutoXplorer..................................... Terry Degmetich, Treasurer (same Picture) Doing that will help us to achieve this Black goal.Book....................................... the convention, for helping make it such a Mike Gough, Secretary (New Picture, see and below) David Aahl, Chairman of the Board (same picture) I would like to personally thank our Executive successful convention. Brasher’s Sacramento Auto Auction . Dear Editor: Carfax is always here to help, and especially Director, Larry Laskowski, his wifeCars.com Kathy for all This was the fourth year in a row ........................................ work that into theisconvention to DealerClick ..................................... I have attended the convention, on andthe the rarehard occasions that was dataput research make it such aodometer huge success. this year Ilooking was greeted by a to lot of needed. new Carfax is constantly for ways Inconsistent readings, for J. L. Von Arx & Associates .............

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JOIN FIND THE ANSWERS   If a dealer buys a car with current tags on the plate but the fees were paid with a dishonored check, who is responsible for the check?

Join IADAC and get the answer. It could save you hundreds of dollars.   If you have a Buy Here-Pay Here lot and DMV leaves you off the title and your customer sells the car, who is liable? Join IADAC and get the answer. It could mean getting your car back.   If a tow company tows and impounds your car but fails to notify you within 72 hours, how many days can the tow company charge you for storage? Join IADAC and get the answer. We’re talking about a lot of money you will be paying out for storage.

Victor J & Ethyl G. Memorial Scholarship IADAC held its 43rd Annual Convention on October 7-8 in Oroville, Calif. The Gold Country Casino did a great job handling all of our needs and requests. We had a great attendance and huge hearts this year. I am happy to announce that we raised $15,730. It was over whelming and gratifying to see all the bidders that put their paddles up in the air. It was a really fun auction, and once again, how can I possibly thank David Aahl, (North Bay Auction) Rod Davis (Brasher’s Auction) and, this year, Henry Cadle (ManheimFresno). There is no way that we could have raised this money without the auctioneers. They went above and beyond their duties for the night and the success we had has a lot to do with them. Thanks to those who donated items and money for the auction items – County Financial, Brasher’s Auto Auction, North Bay Auto Auction, ADESA Auto Auction, Manheim-Hayward, MG Auto Wholesale, Inc., IADAC’s Alameda-Contra Costa Chapter, Auto City, CARSystems, RJ Auto Brokers, A to Z Motors, Cal West Motors, I-Deal Cars, Inc., Three Amigos Auto Sales, Copart, EZ Lettering, Premier West Finance, Reliable Credit Union and Larry and Kathy Laskowski. I want to send out special thanks to everyone who purchased auction items to help fund the Victor J. and Ethel G. Snyder Memorial Scholarship program so college kids in the IADAC family can get a little help with the soaring cost of higher education. It was awesome to see how many families present at the convention have benefited from the scholarship program. I feel truly blessed that I am able to make a little difference in the lives of these families. Once again a big thank you to all of you dealers and vendors who helped make a young person’s dream come true. I am looking forward to being the chairperson again next year and working with some new faces who want to make this another great success story. P.S. Rod and David, I will be ready for anything you throw my way next convention! Mary Glover Auxiliary Auction Chairperson

Taylor Davis winner of the first Pinewood Derby at the 43rd Annual IADAC Convention. (left),

Pictured with (from left) his father Rod Davis, “Judge Judy” Gomez and Rachel Degmetich.

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IndustryNews

NMVTIS Created to Help Dealers In today’s economic environment, there is a great deal of fraud taking place and if you aren’t careful, it could be your wallet and reputation that suffers. To prevent fraud and protect both dealers and the general public, many dealers are utilizing the National Motor Vehicle Title Information System, or NMVTIS. The system, run by the U.S. Justice Department, was created to prevent the introduction of branded or stolen motor vehicles into interstate commerce, thus protecting auto dealers and consumers from fraud and reducing the use of stolen vehicles for many other illicit purposes. Through NMVTIS, businesses and consumers are empowered to check the VIN of any vehicle they are considering acquiring at an exceptionally low cost. Readily available to used auto dealers, providers of NMVTIS data also encourage wholesalers, among others, to check VINs before investing in vehicles, thus keeping them even one step further from unsuspecting buyers. The data available through NMVTIS is unique in that, unlike commercially available services, it’s a government program with strict regulations regarding reporting. NMVTIS information includes timely data from state motor vehicle agencies and other entire sectors (such as insurance, auto recyclers, junkyards and salvage businesses) that are addressed by the Anti-Car Theft Act. Regulations require all states to participate in the NMVTIS program, and all entities are required to provide specific information to NMVTIS in a specific format. This uniformity is intended to serve as a reliable source of title and brand history for autos, and also elevates the likelihood that a vehicle stolen in Maine will be caught if resold in Florida. The accuracy and timeliness of the information, is what

IT IS ALSO IMPORTANT TO KNOW A NMVTIS VEHICLE HISTORY REPORT IS INTENTIONALLY CONCISE, AND IS ONLY INTENDED TO PROVIDE DATA ON THE FIVE KEY INDICATORS ASSOCIATED WITH PREVENTING THEFT AND FRAUD.

differs from private vehicle history reporting services. Information is updated by most states in real time and by all states within, at a minimum, several days of any transaction occurring. The system contains more than 30 million salvage and total loss records, and imposes strict penalties on entities that fail to report required information. NMVTIS also includes information on buses, trucks, motorcycles, recreational vehicles, motor homes and tractors. As a dealer, there are certain scenarios that should be investigated before investing in a used auto, and NMVTIS is the most accurate, cost-effective source of this information. In addition to accurate, timely information on a vehicle’s title history, the system can flag any brands given to a used vehicle, as well as provide salvage and total information, and odometer readings. This means it’s likely that a vehicle that has been flood, or totaled and rebuilt, or even had the odometer tampered with, will be identified. According to the DOJ, the existence of NMVTIS has led to a decline in motor vehicle thefts. By reducing the market for stolen vehicles, a natural decline in thefts was sure to follow. In Virginia alone, a 17 percent decrease in thefts was reported when the state engaged with NMVTIS. Arizona, one of the first and most active NMVTIS participant states, has experienced a 99 percent recovery rate on stolen vehicles. And in Florida, a car theft ring responsible for cloning more than 250 cars, valued at $8 million, was disbanded. Does this mean dealers are now safe due to the mere existence of NMVTIS? Unfortunately, they are not. There are still land mines to be aware of. NMVTIS is designed to collect information from states, but not to change or streamline laws and terminology to from state to state. Each state has its own laws and terminology, which may be different from its neighbors. That’s why it’s important to know the definitions in the states you are searching (if you find a used vehicle has a history there). The NMVTIS service provider has a glossary of most terms on its website. It is also important to know a NMVTIS Vehicle History Report is intentionally concise, and is only intended to provide data on the five key indicators associated with preventing theft and fraud. If your needs go beyond these indicators, it may be best to supplement your NMVTIS search with additional reports from other providers who specialize in different types of information.

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DMVNews

Investigators Launch Statewide “Curbstoner” Enforcement Sweep Protecting consumers from deceitful, unlicensed dealers was the mission of more than 160 investigators from the California Department of Motor Vehicles, who on Sept. 17 fanned out across more than 50 cities targeting unscrupulous curbstoners who prey on disadvantaged buyers by disguising themselves as private sellers with the intent of flipping unsafe used vehicles. Investigators said these unlicensed car dealers typically purchase low-end vehicles from dealers, salvage yards and auctions, and usually do little, if any, mechanical or safety reconditioning. Undercover officers issued 120 citations during the operation. Curbstoners can face several thousand dollars in fines and fees for each confiscated vehicle. “Many times the vehicles curbstoners sell are crashes waiting to happen,” investigations deputy director Kathryn Door said. “By towing and issuing citations, we hope to wipe out their profit and prevent them from putting dangerous vehicles onto California roads. Curbstoners not only put unsuspecting consumers at risk, they also harm business and rob taxes and fees desperately needed to fund public services.” Investigators said curbstoners create pop-up lots by parking multiple vehicles in one location, clogging city streets, public parking lots and private property. They also lure potential buyers by advertising on websites like Craigslist, using different seller names but the same phone number.

TERMS, FACTS and TIPS: • Curbstoning is the repeated, unlicensed “flipping” of used cars for profit. • Curbstoners are people who actively and regularly buy and sell vehicles without a license, proper permits or a legally established place of business and who many times represent themselves as private sellers in order to attract buyers.

Nuisance: Curbstoners often turn high-traffic areas into instant parking lots, lining up cars at gas stations, supermarkets, convenience stores, on private property or even the side of the road. They deprive shoppers of places to park, and the inconvenience and unsightliness drives away business. Fraud: Consumers can easily become victims of fraud involving issues like odometer tampering, undisclosed frame damage or salvage rebuilt vehicles, faulty safety devices, mechanics or promissory liens and other problems that may not be truthfully disclosed at the time of sale. A consumer has no recourse. Criminal: The most common crime committed by curbstoners is tax fraud. When an unsuspecting customer buys a car, the curbstoner will leave the title blank or “open.” Without the curbstoner’s name on the document, he is able to pocket the money (usually cash) and avoid paying state sales tax, federal income tax and any other declarations legally required. PROTECT YOUSELF • Be suspicious of cars and vehicles suddenly parked in undesignated areas. • Monitor free advertising sites, like Craigslist, for cases in which the same contact phone number appears on various private-party listings. • Compare contact information on “For Sale” signs to see if it is the same. • Verify the name on the Certificate of Ownership (title) matches the seller’s name. • Steer away from sellers who accept only cash and refuse checks or money orders. • A curbstoner will not let you have the vehicle independently inspected or provide maintenance records that match the car. • A curbstoner will not allow you to conduct a vehicle history report because it will detail if the vehicle was sold at auction. This 2006 Mercedes Benz SUV is an example of the kind of cars curbstoners sell to unsuspecting buyers. It was involved in an out-of-state accident and was so badly damaged it is not safe to drive. When investigators inspected the cosmetically refurbished vehicle (After), they found the frame had been welded together, it contained no air bags and the rear door did not line up.

Don’t Stand In Line, Go Online! Doing business with the DMV has never been easier. The DMV offers an array of services to customers 24 hours a day, seven days a week through its website, including online appointments for written and drive tests, vehicle registration and driver license renewals, selection of personalized license plates, changes of address and payment of fees via secure debit transactions. Customers can also effect transactions by calling DMV customer service at (800) 777-0133. DMV is a department under the Business, Transportation and Housing Agency.

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Backdating Controversy Continues in California The controversy over “backdating” automobile sales contracts continues in California, despite a Court of Appeal decision last year that ruled against a new car dealer for engaging in the practice (Nelson v. Pearson Ford, 186 Cal. App. 4th 983 (4th Dist. 2010)). To further confuse matters, the Pearson Ford appellate panel later ordered a trial judge to reinstate his initial decision in a case involving Raceway Ford, rejecting the backdating legal theory despite the fact that the lower court’s ruling seemingly conflicted with that of the Pearson case. The conflicting cases and legal theories have created uncertainty in one of the most important areas of automobile retail sales – the rewriting of automobile sales contracts – and highlight the contentious relationship between the auto industry and the Rosner Law Firm of San Diego, which has been pursuing the backdating cases. In the Pearson Ford decision, the California Court of Appeal, 4th District, held that an auto dealer who placed the original date of the sale on a rewritten contract was “backdating” a contract in violation of certain state and federal laws. However, prior to the publication of that ruling on July 15, 2010, retired Judge Dallas Holmes issued

a decision on April 16, 2010 that rejected the backdating legal theory. Instead, Judge Holmes agreed with the dealership that the rewritten contract constituted a “novation” of the original contract. A legal “novation” is when a second contract is substituted for the original contract to reflect or correct terms in the initial drafting of the document. The substituted contract remains effective as of the date the first contract was entered into. The “novation” theory is distinct from the conflicting legal theory that views the first contract as having been rescinded and the second contract as a completely new contract, requiring that it be dated as of the date the rewritten contract was signed. Because the Pearson Ford case was issued after Judge Holmes rendered his decision, the judge “vacated” his decision – that is, he reissued it, saying that he felt legally compelled to change his decision as a result of the Pearson Ford opinion. But that dealer appealed to the appellate court, arguing that the trial court had waited too long to change its mind and was legally obligated to enter its initial decision in favor of the dealership. The appellate court agreed and ordered the trial judge to reinstate his initial

BY L AWRENCE W. MILES, JR.

decision in favor of the dealership. Despite Raceway Ford’s initial victory, it seems likely that case will be appealed to the same appellate court that decided the Pearson Ford case, meaning the Raceway Ford case could force the 4th District to reconsider its Pearson decision, distinguish the two cases, or reaffirm Pearson. Raceway Ford’s lawyers have been arguing that the appellate court wrongly decided Pearson and the trial judge in the Raceway Ford case had it right. The Raceway Ford decision could put the brakes on at least a half-dozen similar lawsuits against dealers throughout the state as legal analysts wait for the 4th District to provide further guidance. Meanwhile, the general manager of Raceway Ford has created a website (http://halrosner. com) attacking the plaintiffs’ law firm, the Rosner Law Firm of San Diego. The dealership said it has spent more than $1 million dollars in the Raceway Ford defense, and it intends to recover its attorney fees from the plaintiffs, encouraging the losing plaintiffs who might be on the hook for the fees to sue their attorney for legal malpractice. Stay tuned for continuing developments in this remarkable litigation.

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A Strong Dealership Starts with the Right People

BY JIM STICKFORD

As the saying goes, you only have one chance to make a good first impression. For car dealers, that means hiring the right staff – people who can make the buyer feel at ease – to interact with the public as sales people and service staff. Maurice Van Collie started his Detroit-area dealership back in 1958. He’s semi-retired now, but when he wanted a salesman, he asked his colleagues if they knew a salesman who still wanted to sell but maybe didn’t want to be in a high-pressure environment. If he needed someone to work in the service department, he’d call up a local high school shop teacher and ask if he knew any bright kids looking for some work and experience. He’d then give the youth the opportunity to get real-world experience until he’d decide to go on to greener pastures. Then Van Collie would start the process all over again. But the days when a dealer could take such a relaxed attitude are gone. Hiring has become more complicated – and more dangerous. These days, having a plan in place when it comes time to hire a new employee is imperative. A bad hire is an expensive mistake to live with. Case in point: Hussein “Sam” Mahrouq, owner of an Automax dealership and a Dollar Rent A Car Sales franchise in Arlington, Texas, can testify to what a bad hire can do to an operation in only a few days. As part of a Texas program to offer customers incentives to buy clean-running newer cars in order to get more polluting older vehicles off the road, Mahrouq’s dealership performs emissions tests on its cars. One employee, though, decided doing all those tests was just too much work and signed off on a number of vehicles without actually doing the inspections. He was caught and fired. But the Texas attorney general’s office sent a letter to Mahrouq a year later saying it had discovered the bogus scans. The result was a $50,000 fine. Mahrouq said he spoke with an attorney and was told he had a very good chance of beating the charge in court, but between legal costs and the bad publicity that would accompany a lengthy court battle he would be better off paying the fine and working to get his side of the story out to the public. That one bad hire, in just three weeks, cost Mahrouq $50,000 in fines and a lot of bad publicity a year after the fact. All that despite the fact the problem was discovered by the dealership and the employee was fired. Mahrouq said he has hiring procedures in place. He does a drug test and a criminal background check, but when you run a small operation, it can be difficult to make sure someone is squeaky clean. “We care about things like auto theft,” Mahrouq said. “This guy did have the proper license needed for doing scans. We found out the ‘clean’ scans were done over three days during the three weeks he worked for us. All that damage done in three days.” Old-school dealers like Van Collie operated in different times. Dealers who work like that these days are asking for trouble. The best way for a dealer to protect himself is to have procedures in place and to be careful. A mistake can end up costing a dealer money, or even his dealership.

Know What You Want Joe Lescota, chairman of the automotive marketing department at Northwood University and instructor for the NIADA’s Certified Master Dealer program, said hiring starts with a plan. The dealer needs to know what he wants and what type of person fits in the dealership’s environment. “A dealer has to ask questions like, ‘What’s our philosophy?’” Lescota said. “If you want to run a high-pressure sales operation, then you have to hire a person who fits that mold. If you want to hire a low-pressure operation you have to find the right person for that kind of environment. It’s complicated. If you hire the wrong person and they don’t work out, you have to start the interview process all over again. And who wants that?” So, Lescota said, have a structured process in place for hiring. There should be at least three interviews per post. If there are three finalists, that means there should be nine interviews. Give the appropriate staff a say in who’s hired If you’re hiring someone for the service department, the head of service should participate in the process, not just the general manager or owner. When hiring someone for the sales department, the head of sales should be there. That way no one can say they were “stuck” with someone the big boss hires, which in and of itself can go a long way toward making sure a hire works out. And if that person doesn’t work out, management can be held responsible. “The third interview should take place during a meal,” Lescota said. “One, it’s a relaxed atmosphere. You can see them interact with the wait staff. Is the potential hire friendly and outgoing? That should tell you something about the person in question. Do they order a couple of scotches during the middle of the day? That’s a clue to that person’s personality and work habits. How much of your money do they spend during the lunch? Do they get the most expensive thing or do they get a burger and soup? These are all clues that help you make the right decision.” Avoiding the wrong things is as important as doing the right things People rarely check references, Lescota said, and he doesn’t understand why. “Not to check references is nuts,” Lescota said. “If I learn someone I want to hire was fired or left a position, I will check his resume and see if there are gaps in his employment record. If you don’t question those gaps, you could be missing something, like the person was in prison or in rehab.” Employers often don’t give drug tests, and Lescota believes that is a huge mistake. His response to someone who says he is a teetotaler and has never taken an illegal drug in his life and says he’s offended by the mere notion of having to take a drug test – tough. “If someone doesn’t have a substance abuse problem, they having nothing to lose by taking a test,” Lescota said. “If someone has a problem, then that test can save a dealership a lot of money.

Substance abusers tend to be people who will steal from a dealership. I don’t care if a potential hire’s feelings might be hurt by a drug test.” Lescota said all a dealer has to do is imagine what would happen to his dealership if a salesperson high on drugs took someone for a test drive and there was an accident. Jan Kelly, president of Kelly Enterprises, a Vancouver, Wash.-based consulting company that advises motor vehicle dealers, agrees. “If nothing else, a dealership should have a drug policy as part of its anti-theft efforts,” Kelly said. “In the old days, management might be shocked that staff might want to use drugs, but in this day and age, they shouldn’t be surprised.” Kelly said another mistake dealers make is hiring just anybody to fill a position. “Too many dealers are too quick to fill a position with a body instead of talent or even potential talent,” Kelly said. “It’s important to have processes in place when hiring. Conflict occurs between owners and staff over processes that aren’t clear or pay plans that are constantly being changed. If you want to drive a top sales person away from your dealership, the best way is to change the pay plan.” Have clear, defined job descriptions and procedures so hires and management know what to expect There are three things dealers should do, Kelly said, when preparing to hire someone. First, have a detailed job written description prepared. Just as important is to have a way to measure how well that job is being done. Finally, have a plan in place for training the person to do the job he is being hired for. It’s not the fault of the new hire if he or she doesn’t really know what that job entails. Personality profiles really work Kelly and Lescota are both big fans of personality profiles. The forms aren’t that expensive and there are ways to order them via the Internet. The person filling out the form answers hundreds of test questions that tell the prospective employer the type of personality the potential hire has. “People say they can fool the tests,” Lescota said. “All that shows is that person is deceptive. But this is important. Once you hire someone, you’re stuck with them.” Kelly said knowing a potential hire’s personality is important because a dealership needs a mix of types. She said there are four basic personality types for employers to look at. There’s the steady-Eddie type, which makes up about 57 percent of the population. Those, she said, are plodders. They don’t like change, and are very dependable and loyal. They’ll also hold a grudge. Then there are the drivers. They make up about 5 percent of the population. They are go-go-go types – but a little goes a long way. There are the analytical types, who constitute about 17 percent of the population. Kelly calls them bean counters, which is valuable, but they don’t want to talk to people. They can be trained to do so, but for them it can almost be torture. CONTINUED ON NEXT PAGE

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HiringNews

“ONE WAY OF KNOWING IF A DEALERSHIP IS ATTRACTIVE TO FEMALE EMPLOYEES IS TO SEE IF WOMEN FEEL COMFORTABLE SHOPPING AT THE LOT.” Finally, there are the interactive people, about 21 percent of the population. These people can talk to others, but they’re the types who run late and never quite finish what they’re doing – something always seems to come up. “You won’t want a whole team of steady-Eddies,” Kelly said. “They will need a whole bunch of attaboys to keep them motivated. It can be exhausting. You will want a blend of types. One analytical is all right. A couple of egomaniac guys will be competitive and that’s not bad. If you have a couple of driven people, be prepared to tell them that things will be done your way.” Don’t forget to hire people who can sell to women Jody DeVere, CEO of the website Ask Patty, said women influence upwards of 70 percent of all car sales. Dealers who hire people who can’t sell to women are really doing themselves no favors. “One of the challenges dealers have is they don’t get enough women applying for jobs,” DeVere said. “Many employees come to the business through family or Northwood [University]. But if dealers want to make the experience better for women, many of whom have children, have things like flex scheduling and good benefit packages.” A dealer doesn’t always have to go to the same well to get sales staff. One place they can look for sales staff is the real estate business. Realtors are used to working nontraditional hours and are skilled at listening to customers and what they want. One way of knowing if a dealership is attractive to female employees is to see if women feel comfortable shopping at the lot, DeVere said. If women feel comfortable shopping there, it often means that the environment is inviting for women to work at the dealership. Women, DeVere said, are good at listening. Their sales skills tend not to be hard-sell. Not all customers want to deal with a woman salesperson, and that’s OK. But having women on staff can be a great benefit to dealers. Do your homework Janel Bryan, manager of Auto Brokers in Englewood, Colo., has been hiring staffers in one capacity or another for 20 years. She’s used the services of a staffing agency and agrees that going through references is just common sense. Bryan said a criminal check means more than checking for felonies. She also checks driving records. Her dealership specializes in taking customers to auctions and picking out a car there. That means her sales people spend a lot of time driving customers to and from auctions. Poor driving habits, as reflected in the records, mean huge potential dangers to customers and the dealership, not to mention increased insurance costs. “I am a detail-oriented person,” Bryan said. “I’ll even look at shoes and socks when giving an interview. If someone is applying for a sales job, is he wearing the appropriate kind of shoes? Are they shined? Are his socks dress socks, or is he wearing sweats? Even if someone is wearing jeans, you can tell if that person takes pride in his experience.” BY JIM STICKFORD 15

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CustomerService

Do You Know Your Collection CSI?

BY BRENT CAR MICHAEL E XECUTIVE CON FERENC E MODER ATOR NCM A SSOC IATES INC . bcarmichael@ncm20.com

How would your collection department’s CSI (Customer Service Index/Indicator) measure up to everyone in the Buy Here-Pay Here industry? Most BHPH operators haven’t given it a second thought. As of yet, there hasn’t been a national BHPH CSI developed, but it’s something that must be tracked and monitored to have any hope of future success. In today’s highly competitive BHPH marketplace, a low CSI will not only cost you money, it could literally cost you your entire business. Obviously customer service and satisfaction is important in all facets of the business from sales to service to collections, but in the recent economic and competitive climate, how the customer is treated during the collection process will set you up for future success – or failure. The BHPH business is widely recognized, and rightly so, as a collection or risk management business. Yet often the service after the sale, so to speak, is neglected or simply ignored. The most successful operators thrive on repeat and referral business – a direct result of providing good overall customer service. And those same operators usually experience a better performing portfolio, which, again, is what this business is all about. One of the biggest challenges to providing effective collection customer service comes from the top. Some operators still cling to an old-school train of thought. They have already provided service by selling and financing a vehicle for a customer when more than one other dealer said no. Another car in that same train carries the thought that the customer has signed a contract and that’s where the obligation ends. These thought processes are filtered down and can affect everyone’s attitude in the organization toward their greatest asset, the customer. I’m not saying the customer is always right, but he is becoming more right every day. Another sizeable challenge in providing good collection customer service is setting the right tone. The first collection customer contact usually occurs when a payment is missed or there is a service issue, neither of which is particularly positive from the customer’s viewpoint. Too often it is assumed that the customer is either lying in regard to his circumstances or simply trying to get something for nothing. Both of those lead to an overly aggressive posture, usually through bullying or ultimatums, to try to exert some form of control over the customer. Very rarely does this work effectively in the long run. The key to setting the right tone is getting customers to first like you. If they like you, they will trust you. And if they trust you, they will respect you. Once they respect you, they will be much more likely to accept what you have to say – good, bad or indifferent. It all begins with listening. We were given two ears and one mouth for a reason. We should listen twice as much as we speak. The like-trustrespect dynamic is instrumental in setting the right tone. Set the wrong tone and it will be an arduous collection task for the length of the note. But rest assured if you set the wrong tone, you will not have to worry about that customer, or anyone he knows, once he is paid off. There are many ways to develop and foster customer service and satisfaction. Customer rewards programs have proven successful in other industries and are now picking up steam in BHPH. Most everyone has a repeat and referral program, but collection and service reward programs are becoming more prevalent. I can hear those of you on the old-school train: “Reward them for doing what they are supposed to do anyway? Never!” In today’s ultracompetitive BHPH market, that might be just what it will take to thrive. Anything to separate you from the competition, provide added value to the customer and keep him paying you.

THE KEY TO SETTING THE RIGHT TONE IS GETTING CUSTOMERS TO FIRST LIKE YOU. IF THEY LIKE YOU, THEY WILL TRUST YOU. AND IF THEY TRUST YOU, THEY WILL RESPECT YOU. ONCE THEY RESPECT YOU, THEY WILL BE MUCH MORE LIKELY TO ACCEPT WHATEVER YOU HAVE TO SAY _ GOOD, BAD, OR INDIFFERENT. IT ALL BEGINS WITH LISTENING. WE WERE GIVEN TWO EARS AND ONE MOUTH FOR A REASON. WE SHOULD LISTEN TWICE AS MUCH AS WE SPEAK. Whether it is the customer receiving credit for making payments on time or incentives for keeping up with the regular maintenance of the vehicle, the key is just having something in place. Deciding to renew or extend your commitment to customer service and satisfaction is step in the right direction. The next step is how to effectively track and monitor progress, or lack thereof. There are a few ways to do this. Written surveys and call recording services or systems seem to be the most popular and effective. Written surveys should be simple and concise. Multiple choice and/or number grading are the easiest to track and quantify. Open response can sometimes be just that, and often it is not legible and so not of much value. Surveys can be done at the time of sale, as the customer pays off or at the time any service is performed, whether it’s warranty, customer pay, or best of all, goodwill. It’s a good practice to include your employees. If the right tone was set, who better to know what the customer’s likes and dislikes are? Regardless of whom it’s from or when, all feedback can be valuable. Call recording services or systems are also valuable in tracking and monitoring how well your organization is handling your customers. One bit of advice: Remove all sharp objects and anything that can be thrown or broken prior to listening to the first set of recordings. You will be astonished at what and how things are said to your potential and existing customers by your employees. Once you get past the initial shock, they will provide a great avenue for training and holding your remaining staff accountable. Recordings can also provide a means of verification in a “we said, they said” scenario, preventing a possible legal nightmare. Customer service and satisfaction is more important now than ever. Competition for the BHPH customer is already fairly stiff and, with the issues befalling the new car industry and the arrival of the new credit-crunch customer, interest is growing by the minute. The like-trust-respect dynamic is the key not only to sales success, but more importantly, collection success. Today’s BHPH customers only want what we all want. They want to be treated with courtesy and respect. The truly successful operators already understand this and act accordingly, a simple fact that will derail the old-school train.

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PAST PRESIDENTS NIADA Annual Convention & Expo Set for June 11-14, 2012 The NIADA announced its 66th Annual Convention & Expo will be held June 1114, 2012 – a week earlier than previously scheduled – at Caesars Palace Hotel and Casino in Las Vegas. NIADA’s showcase event will offer an expanded dealer education program for 2012, including more sessions covering more topics than ever before, as well as an enhanced Expo featuring more companies representing all facets of the automotive industry. Expo exhibit dates are June 12, 13 and 14. The Convention, to be held for the third consecutive year at spectacular Caesars Palace, will kick off with activities beginning on Monday afternoon, June 11. Online registration will open in December. Details will be available at NIADA.com. Rooms at Caesars Palace will be available at the discounted rate of $154 per night.

NIADA’s Annual Convention & Expo provides its members with an opportunity to network with their peers, participate in quality education sessions and gather valuable information they can take back and apply toward their dealerships’ success. Educational offerings will cover topics for both retail and Buy Here-Pay Here dealers. The event is also a gateway for vendors to build and foster relationships with dealers through the Expo, an industry marketplace of topnotch vendors showcasing their products and services and the benefits they can provide to dealers. NIADA has held its Annual Convention & Expo since 1947 and has continued to flourish as the most sought-after and reputable used motor vehicle industry event for automobile dealers.

David Aahl, 2009-10 Terry Degmetich, 2007-09 Luis Estrade, 2006-07 Roger Hanke, 2004-06 Peanut Renfrow, 2003-04 Frank Gromak, 2002-03 Luis Estrada, 2001-02 Mike Macaulay, 2000-01 Bob Henry, 1998-2000 Ray Forest, 1997-98 Peanut Renfrow, 1996-97 Rex Roden, 1995-96 Doug Roberts, 1994-95 Ed Dohnt, 1993-94 Opie Henricks, 1992-93 Manny Padilla, 1991-92 Greg Hodges, 1990-91 Luis Estrade, 1989-90 Jerry Cowgill, 1988-89 Don Head, 1987-88 John Braun, 1986-87 Ray F. Glover, 1984-86 Pat Matlach, 1983-84 Larry Brasher, 1982-83 Tom Field, 1981-82 Jim McCabe, 1980-81 Roy Wilhite, 1979-80 Leonard Boyd, 1978-79 Jordan Sugarman, 1977-78 Bob Dutton, 1976-77 Tom Kent, 1975-76 Jim Mitchell, 1974-75 Vic Snyder, 1973-74 Frank Hammer, 1972-73 Manuel Rogers, 1971-72 John Hiatt, 1970-71 Doug Alman, 1969-70 Bob Scordino, 1968-69 Lucky Skyrme, 1966-68 Leonard Cravens, 1964-66 Walt Howey, 1962-64 Travis Godbold, 1961-62 Leonard Cravens, 1960-61 Wendall Anderson, 1959-60 Dick Rafferty, 1957-69

HONORARY PRESIDENT Frank Murray

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FTC PERSPECTIVES

It’s Always Time to Be on the Lookout for Scams Most dealers follow Federal Trade Commission happenings to get the latest on legal compliance. But the FTC also works to protect businesses in their role as consumers. Companies with a retail presence are a favorite target of B2B con artists. Getting the inside scoop on how B2B scams work can help you shield your company from fraudsters in the future. For example, the FTC just mailed out refund checks to small businesses ripped off by two telemarketing operations that allegedly tricked them into paying for business directory listings they didn’t order.  By falsely claiming the business had already agreed to buy the listings, the defendants got people to pay money they didn’t actually owe. OK, we’re not expecting the network to sign on for a season of CSI: Commercial Scam Investigators — though if you’re interested, have your people call our people — but a behind-thescenes peek into how these scams operate can clue your dealership in on what to look for.

The Directory Listing Scam:  In this operation, fraudsters contact businesses claiming to “verify” that a company wants to “renew” its listing. Of course, there is no existing listing — and maybe not even a real business directory — but the employee who picked up the phone doesn’t know that. Persuasive double-talkers bulldoze them into saying yes and often play back a tape of the call if the company complains. When a business

disregards the dunning letters, the bad guys up the ante by threatening to ruin their credit or take them to court.  Read “Throwing the Book at Business Directory Scams” at http://business.ftc. gov/documents/alt024-throwing-book-businessdirectory-scams for steps to make sure your staff is wise to this scheme.

The Toner Phoner Flimflam:  Every dealership needs office supplies, but you might not have a formal procurement process in place. So when supplies show up at the door, employees pay for them, assuming a colleague must have OKed the buy. The box contains unordered toner cartridges, or maybe it’s empty. Either way, the company is left holding the bag — and the bill.  Share “Avoiding Office Supply Scams” (http://business.ftc.gov/ documents/bus24-avoiding-office-supply-scams) with employees and follow the tips on streamlining and safeguarding your purchasing process. The URL Hustle: “Your web address is about to expire if you don’t pay immediately to renew your registration.”  That’s enough to send an online dealer into warp speed.  Since the invoice emphasizes that time is of the essence, some businesses pay first and ask questions later.  Of course, the invoice isn’t from the entities that really handle things like that. It’s from a fraudster, banking on the fact that companies with a web presence will be too busy to investigate. “The Dupe of URL”

(http://business.ftc.gov/blog/2010/09/dupe-url) suggests practices to reduce the risk of getting stung by a domain name scam. The Charity Con:  Dealerships often make it a point to support worthy causes in the community. So when a group claiming to help firefighters, veterans, police or kids asks a company to buy space in a calendar or publication, they’re happy to chip in. Of course, crooks cover their tracks by picking names confusingly similar to reputable charities, so it’s hard for businesses to find out they’ve been had. “Donating to Public Safety Fundraisers” (http://business.ftc.gov/documents/ bus31-donating-public-safety-fundraisers) offers advice for making sure your donated dollars wind up with reputable groups. Looking for more information on complying with the law and protecting your business from fraud? The FTC’s Business Center has a special portal for the automotive industry. Choose “Automobiles” from the “Selected Industries” tab at http://business.ftc.gov. What will you find there? Guidance on complying with the FTC’s Used Car Rule, updates on the agency’s motor vehicle roundtables, brochures and videos on avoiding a data security “oops” with customers’ financial information, and other publications on need-toknow topics written with a maximum of how-to and a minimum ho-hum.  BY LESLEY FAIR

LESLEY FAIR IS A SENIOR ATTORNEY WITH THE FEDERAL TRADE COMMISSIONS BUREAU OF CONSUMER PROTECTION.

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Follow up! Two Very Important Words:

EconomicOutlook

The U.S. economy appears to be at an economic crossroad: to the right lies recovery and prosperity and to the left awaits a second recession, a plummeting stock market and rising unemployment. With current economic data that points in the direction of each of these paths, it becomes difficult to predict which outcome is more likely for the United States in the coming months. In its most recent release, the Bureau of Economic Analysis announced an advance estimate of 2.5 percent for the third quarter U.S. gross domestic product. This follows an even weaker second quarter GDP, which settled at a lowly 1.3 percent. Inflation increased in September to 3.9 percent. This is combined with gold and silver prices that are again on the rise after sliding directly following the United States’ credit downgrade. Together these metrics suggest higher inflation in the U.S.’s future.

Key September/October Data Positive Signs U.S. productivity remains among the highest in the world, while U.S. non-financial corporations’ cash reserves remain at nearly $2 trillion. The October Conference Board Global Leading Economic Indicators Report shows the U.S. and China increased by 0.2 percent and 0.5 percent, while Europe decreased by 0.6 percent. Though automobile, SUV and light truck sales were down 1.7 percent in September relative to August 2011, they were up 9.9 percent relative to September 2010. Monthly total light vehicle sales have exceeded one million units for the past seven months. Personal disposable income is up 3.2 percent relative to September 2010 and now sits at $968.3 billion. Construction spending increased further in September and is now 48 percent higher than January 2011.

Negative Signs The unemployment rate remained unchanged at 9.1 percent in September as nonfarm payroll employment increased by 103,000 and private sector employment increased by 91,000. Oil prices climbed in October, surpassing $90 a barrel. Housing starts slid for the second straight month. Consumer confidence dropped considerably in October, reaching its lowest level since March 2009.

Current Issues In all my years in the retail auto industry and of all the things I’ve experienced in selling vehicles, I’ve found the most impactful way to generate more sales is to follow up with guests who do not purchase the first time they visit your dealership. That’s right. Study after study (I do a lot of them) clearly has shown that a typical retail dealership, whether franchised or independent, only effectively manages to achieve a 25 percent “be-back” rate of guests who leave without making a purchase on their first visit. That says 75 percent of the guests are not returning to that dealership to make a purchase. Yet studies clearly show that guests who do return to gather more information or to reevaluate their first visit are closed 50 percent of the time versus a 19 percent rate on initial visits. So the real question is, why are these high-percentage closing rate types of potential customers not returning? The answer is … they were never asked to return. No one ever followed up with them. Over the years, I have been able to track many of these guests with a follow-up call regarding their initial visit. In more than 80 percent of the cases, when I ask, “Has anyone contacted you since your visit to the dealership?” the answer is an emphatic “NO.” I wanted to put some teeth into my research in an attempt to determine the financial impact should a dealership develop and implement a

consistent (consistency is essential) follow-up procedure for guests who do not make an initial purchase. I selected a dealership averaging 49 retail used vehicle sales per month and turning its used vehicle inventory a minimum of four times per year. With a clear focus on getting more guests back into the dealership for a “second shot,” the management team agreed to practice a very rigid and dedicated system of having managers follow up with the guests rather than the sales team – just for a controlled benchmark; the sales staff got the deal if the returning customer made a purchase. Here are the results: Management involvement improved the return rate of guests from 25 percent to 34 percent within seven days, leading to a 31.5 percent increase in the effective closing rate. That led to a 30 percent increase in the used vehicle inventory turn rate. By getting management involved in the follow-up process, monthly used vehicle sales went from 49 retail units to 64 by month’s end, generating an additional $31,105 in gross and reducing operating expenses by approximately $2,795. All because management got more involved in the follow-up process of guests who visited the dealership but did not make a purchase on that initial visit. What would happen if your management team and sales team followed up, followed up, followed up and followed up? BY DR. TIMOTHY NASH AND JOE LESCOTA

Students interested in studying the automotive industry can contact Dr. Timothy Nash at tgnash@northwood.edu for information about Northwood’s programs Dr. Timothy Nash, an associate professor in Economics, Business and Public Policy, heads specialty programs, including Automotive Aftermarket and Automotive Marketing, for Northwood University. Joe Lescota is chairman of the Automotive Marketing Department at Northwood University and the instructor for the NIADA Certified Master Dealer program.

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DMV Tips:

Common Transfer Mistakes I’m sure all of you would like to submit documents and/or fees to the Department of Motor Vehicles so your DMV applications are completed the first time. We’ve recently asked DMV what prevents applications from being processed the first time – one and done. Here are a few suggestions from the business/industry service centers: Correct fees are not submitted: The DMV has a handy fee calculator at http://dmv.ca.gov/ FeeCalculatorWeb/index.jsp. Fees can be calculated for new vehicles, nonresident vehicles and used vehicle purchases. The fee calculator can also be used to calculate the vehicle license fee paid in previous registration years for tax purposes. As soon as a billing notice is generated, registration renewal fees can be determined. The Report of Sale is incomplete: The salesperson’s name or number is not shown on the Report of Sale, or the customer’s signature(s) are missing. Vehicle/Vessel Transfer and Reassignment Form (REG262) errors or omissions: Such as the Odometer Disclosure Statement in Section 3 on the form is not completed. In addition, the Code of Federal Regulations, Title 49 Sections 58.0.5 © and 580.5(f) require the odometer disclosure statement from an individual, which must contain both his or her original signature and hand-printed name in his or her own writing; or from a business, which must contain both an original signature by an authorized agent and the name of the business, which may be hand-printed, typed or computer-generated. Vehicle Industry News WIN memo 2010-37 was issued to remind industry partners of this requirement. Incomplete transfers: Chain of ownership could be incomplete – documents must support how the vehicle was sold, traded, etc. from the original owner to the latest purchaser. Perhaps there are missing signatures. Either the owner(s) must sign the documents or an acceptable Power of Attorney can be used. Or the legal owner information is missing. If a new purchaser obtained a loan for the vehicle, it is critical for the new legal owner’s name and address to be included on the documents. If there is no legal owner, the word “NONE” should be printed in the new legal owner section. Application for Replacement Plates, Stickers, Documents (REG 156): This form is not being submitted when replacement plates are needed, such as when one plate is missing or when special interest plates were removed and kept by the original owner.

Digital Odometer Tampering

IndustryNews

The National Auto Auction Association (NAAA) recently issued notice to its members to be on the alert for digital odometer tampering. The NAAA has received reports of digital odometer tampering through the use of odometer mileage programming devices. Since odometers do occasionally malfunction, manufacturers provide legitimate repair facilities security codes to use with authorized odometer mileage programming devices. The NAAA indicates the codes may have been compromised, allowing non-authorized devices to be manufactured and sold online. The NAAA further reports that the National Highway Traffic Safety Administration (NHTSA) is familiar with the practice and has been in contact with auto manufacturers about the issue. The NAAA recommends its member auctions be on alert for potential mileage discrepancies that crop up between time of check-in and sale and between time of assignment and delivery to the auction, as this could be an indication that the vehicle was tampered with to decrease its value and provide a fraudulent benefit to the ultimate buyer of the vehicle. Individuals with information concerning odometer fraud schemes are encouraged to contact the NHTSA’s Office of Odometer Fraud at 202-366-5953. Complaints concerning a single vehicle should be reported at the state level.

January 1, 2012, fee collection changes Effective with vehicle registration expiration dates of January 1, 2012, and later, the laws (Senate Bill 94/2011) surrounding when renewal payments/fee collection must be made revert back to their pre-July 1, 2011, status. • California Vehicle Code (VCV Section 1661: DMV) will be required to issue renewal billing notices 60 days in advance of the vehicle registration expiration date. • VCV 4000(a) (4) is rescinded and does not allow additional time for obtaining current registration. • VCV4601(c) rescinds the requirement that does not allow renewal of registration not more than 75 days prior to the expiration of the current registration. Therefore, renewal fees due on or after January 1, 2012 can be accepted within 75 days of the expiration date. • CVC 5902.5 (b) is rescinded and requires payment of full renewal fees for January 1, 2012, and later expiration dates if an application for registration transaction is filed within 30 days of the vehicle registration expiration date. • CVC 9554 (a)(2) rescinds the 30-day penalty grace period for late renewals (expiration dates of July 1 through December 31, 2011) and reverts back to preJuly 1, 2011, penalty rate structure timeframes. 21

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IRS

New IRS Form 8300 in Effect The IRS has issued an updated Form 8300 dealers must use to report cash transactions of more than $10,000, effective July 1. Cash

payments of more than $10,000 in one transaction or in two or more related transactions must be reported to the IRS using the new form, available at www.irs.gov/pub/ irs-pdf/f8300.pdf. The IRS strictly enforces the filing of Form 8300 cash reports and audits New Jersey dealers for compliance. First-time offenders can be fined as little as $50 for each violation of the cash reporting rules. However, the IRS can revisit those dealerships and treat each unreported transaction on the second audit as a willful violation and could fine as much as $25,000 per transaction. Dealers must file IRS Form 8300 if the cash paid to them is received as:

• One lump sum of more than $10,000 • Installment payments that cause the total cash received within one year of the initial payment to total more than $10,000, or • Other previously unreported payments for a related transaction that cause the total cash received within a 12-month period to total more than $10,000. Defining Cash In addition to coin and currency, cash includes these items with a face amount of $10,000 or less: •C  ashier’s checks • Bank drafts • Traveler’s checks • Money orders If a dealership receives any combination of the above totaling less than $10,000, the dealership does not need to file Form 8300. However, if a customer pays with any combination of cash totaling more than $10,000 (i.e., a customer pays $5,000 in cash and $6,000 with a bank draft), then the transaction is reportable. Form 8300 must be filed within 15 days of when the cash was received.

• Checks are not cash when drawn from: • Business accounts • Certified personal checks • Individual’s personal account • Loan proceeds Dealers can verify loan proceeds through a copy of loan papers, a written statement from the bank or similar documentation. Any checks with a face value of more than $10,000 are not required to be reported on Form 8300. Instead, the entity that issued the check for more than $10,000 must report the transaction. Mironov, Sloan & Parziale Offers Form 8300 cash reporting reviews. Mironov will review your dealer’s books and records to determine compliance with cash reporting requirements. For pricing or to schedule a review, contact George Berry at 800-572-7101. George Berry is a partner with Mironov, Sloan & Parziale, LLC, a certified public accounting and consulting firm serving more than 300 automobile dealerships in New Jersey and the greater regional area. For more information, visit www. mspcpa.net. B Y G E O R G E B E R R Y, C P A

IndustryNews

Subprime Auto Loans are on the Rise The latest Equifax National Credit Trends Report declared auto finance companies have significantly increased lending. In fact, the growth is more than 47 percent during the past two years. Analysts discovered auto finance lenders outpaced bank and credit union lending to subprime borrowers during the past two years, as well. Equifax defines subprime borrowers as consumers with credit scores less than 640. According to the most recent monthly report, there were 854,800 auto finance companyoriginated loans in July, compared to 581,300 for July 2009. Equifax tabulated that vehicle loans to subprime borrowers now account for 38.5 percent of all auto loan originations for auto finance companies and 17.6 percent for banks and credit unions — numbers that are quickly approaching pre-recession levels. By contrast, analysts pointed out 820,200 loans were originated by banks and credit unions for the same period in July, versus 832,000 for July 2009. That’s a decrease of less than 2 percent. Equifax mentioned delinquency rates continue to improve for outstanding vehicle loans currently 60 or more days past due. Michael Koukounas, senior vice president of special client services for Equifax, indicated the rate is now down to 1.63 percent of loans, compared to a peak that was near 3 percent. Koukounas believes the decline reflects a continuation of sustained credit retraction that

the auto lending industry is experiencing earlier than other loan types. “With unemployment rates remaining elevated for a prolonged period, auto lenders have proactively adopted more comprehensive data and verification tools for greater loan-level transparency in evaluating a wider band of consumers, which has helped enable the auto lending industry to recover more quickly than others,” Koukounas explained. To support his theory, Koukounas pointed out that in July, 1.7 million auto loans were originated, worth $32 billion collectively. From January through July, he said, 11.3 million new auto loans were originated — a 13.2 percent increase over the same span last year. The collective amount of these loans is 14.8 percent greater than in 2010, climbing to $213.9 billion. Equifax’s report also revealed the average monthly payment has remained relatively unchanged during the past year. For auto finance company-originated loans, the payment ticked up to $407 in July from $404 in the same month last year. For bank and credit union-originated loans, the payment slid down to $364 in July from $377 in July of last year. Equifax insisted the changes clearly show that the growth the industry is experiencing is tied to increases in number of loans rather than an increase in average loan amount. SubPrime Auto FinanceNews

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CONVENTIONRECAP

IADAC

The 43rd Annual IADAC Convention in Review The 43rd Annual IADAC Convention was held Oct. 7-8 at the Gold Country Casino and Hotel in Oroville, Calif. Auto dealers and vendors from all over the state met to partake in the scheduled events and enjoy spirited discussion with other attendees. Many vendors participated in the preconvention trade show, which began three days prior to the actual convention. Tuesday, vendors set up booths at Brasher’s Sacramento Auto Auction. Wednesday, the show was at Manheim San Francisco Bay and it wrapped up Thursday at North Bay Auto Auction. IADAC thanks the auctions for their gracious accommodations and support of IADAC and the vendors. Once at Gold Country, the group received valuable information from guest speaker Vito Scattaglia, the DMV deputy chief who reviewed the September illegal dealer sting that netted many impounded vehicles and numerous citations. The reporting of illegal dealer activity by IADAC members contributed to the total. Participants bid generously at the Auxiliary Auction, resulting in more than $15,000 raised for the Victor J. and Ethel G. Snyder Memorial Scholarship fund, which awarded 33 scholarships this year. Auctioneers David Aahl, Rod Davis and special guest Henry Cadle kept the action lively. Saturday’s first guest speaker was Mike Jackson of Auto Search Technologies, who gave an informative seminar on website strategies and search engine optimization. For a sampling of Mike’s thoughts, go to www.iadac.org and search the video library. The Quality Dealer of the Year Award was determined by a vote of the IADAC members at the convention. Of the seven deserving nominees, Rey Guluarte of Autos Guluarte in El Centro was the winner. Topping it off, he was presented the award from the keynote speaker, Congressman Tom McClintock. Congratulations to all the nominees. In the final event, the dealers competed in the first IADAC Pinewood Derby. Dealers were asked to construct a vehicle from the same block of wood as the Cub Scouts use. The event showed remarkable attention to detail for many, but also exposed a lack of engineering – the first entry down the track shed an axle and a wheel. The winner of the doubleelimination bracket was Taylor Davis.

SPECIAL THANKS TO ALL OUR SPONSORS: Brasher’s Sacramento Auto Auction Manheim San Francisco Bay North Bay Auto Auction Carco Group/Check that Vin.com Crossbow Group Automotive Finance Corp. Auto Search Technologies

Nationwide Financial Carmax Zurich Insurance AutoTrader.com Route One Chase Custom Auto AUL Warranty Corp. Copart

UsedCars.com by Dealix Auto Revo Target Media GWC Warranty Premier Auto Credit County Financial Repo City Auto Factory

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A different breed of curbstoner, and yet another way cities leak revenues. www.stopcurbstoning.com If there’s such a thing as a profile of a typical curbstoner, it’s someone who buys cars cheap, cleans them up, and flips them for a profit to unsuspecting consumers under the pretense of being a private party. But recently, we’ve become aware of an entirely different type of curbstoner – and curbstoning. These are rogue tow truck operators who buy junked or non-running vehicles and resell them, either whole or in parts.

“CASH PAID FOR ANY VEHICLE RUNNING OR NOT” You may have seen listings like that one on free classified ad websites, or posted on telephone poles or community bulletin boards. Sometimes, it’s from a salvage yard that needs to boost its inventory or a scrap yard looking to make a legitimate profit through recycling. But often, it’s from one of these rogue tow truck operators. Here’s how they work. They buy basically junk cars for $200-$300 apiece. If the car runs, they fix it up enough to sell it to an unsuspecting buyer, typically doubling or tripling their money as a curbstoner with little effort. They don’t take title to the vehicle, so there’s no paper trail associating them with the junker. Instead, the title jumps directly from the previous owner to the buyer, hence the term “title jumping.” Title jumping is illegal. But, because there’s no direct paper trail, enforcement is difficult when buyers don’t insist on conducting business with the registered owner of the vehicle. But what if the vehicle doesn’t run? That’s when things get interesting, and every bit as profitable. First, easily removed parts are listed for sale online. Such resalable parts may include wheels, headlights, taillights, emblems and trim, and even the glass and seats. With the rise of online classified ads, those parts easily find willing cash buyers on the used parts market.

After the saleable parts are salvaged and sold, what’s left is recycled as scrap metal. For instance, if it doesn’t find a buyer as an intact used part, a used catalytic converter can bring $40-$80 or more as scrap, depending on the converter, the market, and the price of unrecovered platinum. Aluminum wheels are worth $10-$15 per wheel as scrap, even if damaged and unusable as wheels. The radiator and wiring harness may contain scrap copper worth $10-$30. What’s left is simply sold for scrap at about $300 per ton. With an average of a ton and a half of scrap per vehicle, that’s $450.

But what if the vehicle doesn’t run? That’s when things get interesting, and every bit as profitable.

Once again, the perpetrator doubles or triples his or her money, most of it in cash, with no trace of any transaction taking place. And, a busy rogue tow truck operator could easily flip hundreds of vehicles per year. If an operator averaged only one car a day at $250 per car in profit, that adds up to $91,250 in under-the-table income every year. Many flip – and make – much more.

In most cities, auto parts salvage and resale are regulated businesses, requiring licensing and, in some areas, additional inspections and permits. So these parts curbstoners, like regular curbstoners, generate unlicensed, largely untaxed business profits while taking sales from legitimate local businesses. 1

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Dealer Profiles

IADAC Quality Dealer Nominee 2011 Bart Malpass-California Classics My grandfather was a car man, my father was a car man and I tried to do numerous other jobs from construction management to running my own detail shop so as not to be a car man. But by the age of 21, I had completed two years of college, was married and had been hired by a Chevy dealer outside Baltimore, Md. – and was still running a detail shop on the side. After a year of that, I moved back to California and worked for Todd’s Fine Cars, in sales, Fairfield Toyota, in sales, and Avery Greene Motors, in management. All  on the retail end of the business.  In 1979 I  added a son and in 1981 a daughter to my family, and a daughter arrived in 1986. That gave me incentive to increase my income. I had started working in the wholesale part of the business in 1980, and in 1983 I incorporated my current business, California Classics, Inc. It was a great decision to incorporate, as it gave me flexibility to expand the business. My wife, Joie, was a business major in college, and she was a real asset. We have worked together since we started dating in 1968. I have seen the car business change and grow with the advance of the cell phone, the computer and high-tech cars. The industry has always fascinated me, but what I enjoy even more is working with other individuals who find this business to be their passion. You either have it or you don’t, and I have seen more of “the don’t.” I respect the men and women I have crossed paths with over the years who have helped me and who I have had an opportunity to help as well. Many managers have gone from a management position at one dealer to another dealer based on the recommendations I have had the pleasure to give them. Many excellent and knowledgeable auto managers and owners have met with me to discuss the business and how we can improve how we do things, and how working together the retail/trade side can be helped by the wholesale end by moving product and keeping the capital moving, increasing the bottom line for the dealer as well as wholesaler through California Classics, Inc. I am 59 years old and still smiling and still enjoying the business as I try to find the lighter side with as much humor as possible. I went into this business with a commitment to do business in an honorable and honest manner, and that is still who I am today. I thank those of you who nominated me for this honor and those of you who choose to vote for me. This is a verification of the values that I have committed to live each day believing. This business has been good to me and I hope my involvement in the connections I have had with you have also been good for you. Thanks for the great memories I have had and are yet to come! Thirty-eight years in the business and still going strong!

IADAC Quality Dealer Nominee 2011 Guy StrohmeierGuy Strohmeier’s Auto Center To fellow members of IADAC, First let me say what an honor it is to be selected as a nominee of the Victor Synder Memorial Quality Dealer of the Year Award. To even be nominated is humbling and thrilling at the same time. I started Guy Strohmeier’s Auto Center more than 11 years ago with the hopes of providing quality cars at great prices in our little community of 5,000 people in Lakeport, Calif. I had previously worked more than 10 years at an independent in sales/finance/ detail and managing the smooth transition from service to front-line ready. Even during the last three tumultuous years, we have managed to grow, and even opened a new dealership in Ukiah, Calif., about 50 miles away. I have always loved selling, and we retail 40-50 a month and wholesale about 15. We have worked very hard with many franchise dealers and I do a little buying for them, which allows me to keep a good eye on the ups and downs of changing prices. One of the most enjoyable and profitable experiences I have had is when I took and passed the Certified Master Dealer program. I have used what I learned to deal with inventory problems, employee problems, financial decisions and other situations that occur daily at the dealership. Our motto has been and will always be “Business by the Book,” and our key to success is taken from Luke 6:38: “Give and it shall be given unto you with good measure, pressed down, shaken together and running over shall it be given back to you.”

Guy Strohmeier’s has given away more than 25 cars in 11 years, to the Boy Scouts of America, Lakeport Sober Grad Night and various schools and clubs to encourage and support our local community. We don’t spend much money on advertising but our repeat and referral business has been better than 70 percent each and every month for 10 years. I am also the auctioneer for a local high school auction to help raise money for safe and sober graduation nights. We also support the community by having our own Buy Here-Pay Here program. We sell 4-6 cars a month, helping people repair their credit and get re-established. These folks are a continuing source of repeat and referrals, and many are now getting back financing. We are also a California Gold Shield Smog Station and have a full-service auto repair, providing the community lower-cost repairs than the franchise dealerships. My wife Sandy and I have been married 32 years and have three children and two grandchildren who are a continual source of blessing to us. Thank you again for your consideration of Quality Dealer of the Year.

IADAC Quality Dealer Nominee 2011 Jonnie JohnsonParadise Cars I was born in 1947 in Sacramento, California where I was raised and attended schools in the area. I graduated from C.K. McClatchy High School in 1964 and from there, went on to college majoring in Criminal Justice. In 1966, during the Vietnam War I was drafted into the U.S. Army. I was sent to Fort Ord in California as a Morse Code Operator and later stationed in Wildflecken, Germany where I spent many years. While completing my military obligation and service, I returned to College to pursue my degree while also working for Sacramento County. During this time I also had a job at the UC Davis Department of engineering which I enjoyed a great deal. I started my Criminal Justice career with the Department of Corrections, State of California. This was a very demanding and dangerous job and after many years with the department of corrections, I left that field of work and went full force into my lifelong hobby of restoring Volkswagen Bugs. I especially enjoyed restoring 1960-1970 V.W. Bugs. My neighbors wanted to purchase these vehicles after seeing the results of my restoration, and so history began…I opened a small location in 1983 on El Camino Avenue in Sacramento in an 8 foot trailer. In 1992, I purchased my present location on Auburn Blvd. where I am currently located. We’ve always believed in fair, honest dependable deals and vehicles and never deter from this path. It’s easier to do it right the first time, then to clean up a mess later on. In my spare time I ride my 2007 Harley RoadKing with my wonderful wife Vickie. We’ve been together for 37 years and have 3 boys and 2 girls. I’ve restored a 1997 Rolls Royce, a 1962 Corvette and a 1970 Camaro SS 396 and still have all of them! I was a member of the Fullerton Diving Team and was featured in Sports Illustrated in diving. I am currently a member of the “Patriot Guard” in which we welcome home military members or escort K.I.A. soldiers of all U.S. branches throughout the U.S.A. Previously, I have tutored underprivileged children in Math and English. I am currently an IADAC delegate member and a 25 year Brasher’s “Silver Anniversary” recipient. All I can say is that it’s been a fun and fast 28 years, but it’s time to start thinking of retirement and to go visit the grandkids!

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IADAC Quality Dealer Nominee 2011 John J. Ferriaolo, Sr. John’s career in the auto industry began in 1958 with Eagal Ford in Stockton. He was 17 years old. To supplement his income he would drive cars from Sacramento to Stockton for $5 each at night. After two years he went to work for Chase Chevrolet. He stayed there for eight years, but wanted to get in to management. It was the 1960s and Chase felt he was too young for management since he was only in his 20s John left Stockton for the “big” town of Lodi and worked for Geweke Ford, again trying to get into management. He then started a company known as Courtesy Motors of Lodi, which soon became Courtesy Lincoln-Mercury. Being only 28 years old and naïve he became the minority stockholder in a family-owned corporation without a buy-sell agreement. Apparently, his backers were not pleased when he aggressively locked up three corners of Pine and Stockton streets with lease/purchase agreements. He was soon removed from the corporation. In 1970, John opened a lot on the corner of Pine and Cherokee in Lodi. He received two months free rent for cleaning up the old service station that had been abandoned for years. His inventory consisted of three vehicles that were all on consignment. He called the lot Ferraiolo’s House of Hardtops. The first few years were hard, but fun. John would get up at 4 a.m. and go to the lot to wash all the cars, then return home to change into business attire and open the lot. The House of Hardtops continued to grow for another 12 years. As life goes on, priorities change. John decided to go back to Stockton and open a wholesale automobile business, the Auto Factory. The business has been very successful, especially prior to 2008. John truly feels, by the grace of God, he has made it through the hard times. He still works six days a week and his cell phone rings on Sundays. John was proud to be named Dealer of the Year in 2000. John is the proud father of five and grandfather of nine. The one thing John enjoys besides automobiles is cooking. He really enjoys cooking for family and friends. He is in his glory when cooking for church functions with all his old cronies. An old friend of John’s, who’s known him since his youth, was in our office recently. He used the word “integrity” to describe John. This gentleman is over 80 years old. What a compliment! Personal Profile John J. Ferriaolo, Sr., owner, opened the Auto Factory in 1980. He began his professional career in the auto business in 1958, after graduation from Stockton High School. Since that time he has been employed in, owned and operated a number of highly successful auto dealerships throughout San Joaquin County. John graduated from the Ford Motor Company Dealer and Management Institute and is also a graduate of the Dale Carnegie Course in

Effective Speaking and Human Relations. His hobbies include collecting artistic recreations of various cartoon characters and their creators (a substantial number of which presently decorate his offices), cooking and entertaining friends. The Auto Factory Company Profile The Auto Factory was founded by John J. Ferriaolo, Sr. The company sells used vehicles to licensed wholesale auto dealers exclusively. It obtains this inventory from individual owners, auto dealers disposing of trades, rental car companies, other wholesale brokers, banks and credit unions, among many others. At present, the Auto Factory maintains approximately 150 wholesale accounts. Whenever necessary and in accordance with the preferences of individual dealers, the inventory can be safety checked, detailed, smogged, reconditioned and/ or repaired prior to delivery. The purpose of providing these services is to assure individual buyer satisfaction. The staff at the Auto Factory is comprised of hand-picked, experienced, professional sales, administrative and finance personnel. The average tenure of each staff member in the auto business is more than 20 years. Many bring specialized skills such a classic car restoration, auto racing and auto repair.

IADAC Quality Dealer Nominee 2011 Greg Meier-Diablo Motors I was born in 1960 and grew up in Walnut Creek, Calif., in a typical suburban home, but cars were in my blood before I even knew it. My grandfather and his four brothers (Cortese) had returned from World War II and started a Richmond used car lot back in 1947. It had grown to a chain of 28 franchise dealerships throughout the Oakland/Berkeley/El Cerrito/Richmond area by the 1960s, but they had sold them all off by the time I was a teenager, so I didn’t even have a chance at the “legacy.” My first real job (not counting neighborhood yardwork and pet-sitting since age 10) at 15 years old was at a local gas station (back then they were called “service stations”), where I learned to be a mechanic so I could work on my pride-and-joy 1966 Mustang. I learned a lot about cars, and about good service, during those three years, and actually flipped a few cars as a hobby during my college years to help pay for school. Though cars have always been my hobby and passion, I actually studied to be an architect, before changing majors to commercial art after a boring stint as a repetitious draftsman for two years. After years of logo design and other corporate experience, including becoming the top salesman of the year and a corporate sales trainer, I had a fateful run-in with the DMV Investigations Unit for selling my two personal cars every year. It appears you can’t flip your personal car every six months just because you want to. Yes, I registered them

all and paid the taxes, but apparently it put me on the radar of an overzealous DMV investigator. This state employee just couldn’t understand how someone like me could enjoy changing cars every six months without making a profit (not much changes here!), and would be on me like stink on something stinky until I got a dealer’s license. So I did a little soul-searching and realized that I still liked cars better than wearing a suit, so I gave notice to my boss and opened Diablo Motors in February of 1994. My life has never been the same! I started with two cars and the cheapest office I could find, and have grown it to 15,000 square feet of highline inventory on the main drag in San Ramon. I am proud of Diablo Motors’ perfect Better Business Bureau Honor Roll status, with zero complaints over our 17 years in business. Diablo Motors is still the only Diamond Certified car dealership in all of Contra Costa and Alameda counties – seven years in a row now. I attribute our success to our wayless-sleazy salesperson-free environment, my dedication to uncompromised quality and complete customer satisfaction, and my desire to offer 1-5-year-old clean highline cars for less than the competition. So I am now able to change cars whenever I feel like it (ha, DMV!) and sell what I like to sell. I even met my wife, who was once a customer of mine! (Well, she’s still my toughest customer, but now she just doesn’t actually pay anymore!) I am thankful for my family, my health, my good reputation in the community and for my involvement in our valuable association, where I continue to learn and grow. I now live in Danville, Calif., with my wife, 14-year-old daughter, and three dogs. I am an avid cyclist, water skier, and snow skier. “Life’s too short to drive a crummy car.”

IADAC Quality Dealer Nominee 2011 Rey GuluarteAutos Guluarte Date of Birth: June 22, 1949 Status: Married Four children: Rey Jr., Annie, Jeanette and Diana Education: Elementary grades 1-6 at Benito Juarez Elementary School in Mexicali, B.C., Mexico. High School at Institute Salvatierra Mexicali, B. C., Mexico College/degrees/special training/ certification: Marketing and Sales at Volkswagen of Mexico in Puebla Mexico, Sales Manager diploma for Volkswagen Dealers, Imperial Valley College for computer system basics courses. Job history • Tire and battery assistant distributor in Mexicali, B.C., Mexico, 1968-1969 • D epartment of auto sales in Volkswagen in Mexicali, B.C., Mexico, 1971-1974 • S ales manager at Volkswagen in Mexicali, B.C., Mexico, 1978-1982 CONTINUED ON NEXT PAGE

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Dealer Profiles •M  otores De Mexicali company salesman for Chevrolet dealer 1978-1982 • O pened auto business in Santa Cruz, Calif., Autos Guluarte 1983-1987 • O pened Autos Guluarte Inc. in El Centro, Calif., 1987-present. Small dealership with sales of 100-150 per year. The business consists of two employees at hire status, with and additional assistance from wife, Any Guluarte, daughters and son. We guarantee 50-50 all cars, finance in-house with 50 percent down, 12 payments. Social/Sports/Clubs/Community Service • A ctive 20-30 club delegate 1973-1981, conventions assisted in Calgary, Canada in 1973, Ciudad Juarez Mexico in 1975, El Salvador, San Salvador 1976, Eugene Oregon USA in 1978. • B lue Knight Motorcycle Law Enforcers Club, Imperial Valley, Calif., 1978-1981 • A utomobile Club Filis quarter-mile race club founder in Mexicali B.C., Mexico, 1967 • P articipant in the 1000-mile off-road races in Baja B.C. at the Cierro Prieto off-road race class 16 1976 • P resident of the A.V.A.C.U. association of Automobile Dealers in Mexicali, B.C. Mexico 1980 • I .V.A.D.A. founder Imperial Valley Auto Dealer Association. President 1995-2000 Delegate of IADAC in the Imperial Valley where I was nominated with the “Most Prestigious” Award for Dealer of the Year, Victor J. Snyder Memorial Quality Dealer, August 16, 2011. Initiated as a salesman in 1969, selling tires and batteries for automobiles. I implemented a sale system of consignation in batteries that was very successful. Then I initiated in automobile sales for Volkswagen Mexico, B.C. Interesting point: The sales manager invited me to sell autos, which to me seemed impossible. He told me I had the potential for that specific job. Hands were shaken and I took his offer. He offered me a threemonth contract with a promise I could walk away and go back to my old job at the tire and battery business if I was not satisfied as a dealer. It was a drastic change for me and was very difficult at the moment. The payoff was amazing. After three months working as a sales person for new vehicles, the accountant pulled me aside and asked me if I have lost my commission check since the account showed the amount untouched. I answered with a no, followed by his confused question asking why I hadn’t cashed it yet. I told him the truth – I didn’t need it. It was the funniest comment ever said in the company. Things were good, very good for me. Moving from selling batteries to being a car dealer was a 300 percent improvement. I was given a brand new car for personal use, a 1971 Super Beetle. Benefits were through the roof. The car was insured and I had gasoline privileges and other benefits. For me, it was like winning the lottery. After enjoying all the benefits the company had to offer, I did not want to know anything about batteries and tires.

On my first sale my manager suggested I check repair orders in the shop and look for four-year old cars with the most needed repairs. I found a VW with two years of use but extremely damaged. The car was very well equipped and loaded with accessories. It belonged to Ignacio Reyes, and I paid him a visit at his home. At the time, Mr. Reyes was having a family reunion. As he asked me to come inside, I introduced myself. As I began to talk he stopped me and told me he didn’t do any deals without a shot of tequila first. I rejected his offer since I was on the clock, so he refused to continue and rejected the deal. Mr. Reyes was a hard-working man who worked with cattle and had little education, but he was a great businessman and very intelligent so I accepted his “caballito” tequila shot and refused to let him go. After giving him the price for the trade he jumped off the seat, got up and yelled, “Woman, bring me my gun to kill this cabron (jerk)!!” That was the first time and most difficult sale of my career and did not want to know anything about deals and new cars. I felt horrible and unprepared for such situations, but the thought of my new car and privileges stopped me. How much I did not want my old job back or to take my old car back like a loser, took me away from such thoughts. I apologized to Mr. Reyes and told him I was going back to my office to consider a new value on the trade, and with the help of my manager, we closed the deal. From my point of view now it was a good and helpful experience. After that sale, all my other ones were much easier to me. Every time I have conversations with other dealers about those types of sales, we know we have to see them as challenges. After coming up from a bad start and fixing the problem, the feeling of satisfaction overwhelms. One of my biggest challenges as a dealer was adapting to living and working in the United States. In 1983, I moved to Santa Cruz to start selling new cars at Pacific Coast Chryslers and Volvo. Luckily, my father was a U.S. citizen and he helped me become a citizen as well. I worked at Pacific for two months, and the system of waiting for clients to show up didn’t make me comfortable since I was used to going to the client. They told me I would deal with the Hispanic community, which was not what I expected. I was forced to speak English to them and my English was very limited. It bothered me how the salesmen were treated – lots of pressure on us and the language they used to us was very offensive. Two months later, I opened my own business in Santa Cruz. I met a great friend who was a dealer himself, by the name of Lee Roy. He became my first friend in the United States. He made an appointment at the DMV in Capitola and I got the training. Two months later my own dealership was open to the public, Autos Guluarte. I was visited by a businessman, Jim Haas, who helped with my insurance and asked me to join IADAC. IADAC has been like a school to me. I have learned a lot from other members in meetings and conventions. Belonging has been a privilege. We are kept informed about the automobile industry and law changes. I had

the honor to meet lobbyist Bill Dohring, who has been a great help and friend. He has come to the Imperial Valley to present and join local attorneys and members of the association. Bill has worked with us in combating illegal dealers in our area. Our clients are always treated with respect and honesty. These are the keys to avoiding dilemmas and lawsuits. After 20 years in the business, I have only been sued once and taken to court. The case was senseless and the judge dismissed the case. I have been audited three times, once by the IRS, two by DMV, which went well. I have never been penalized for incomplete paperwork, mileage or fraud documentation or other reasons.

IADAC Quality Dealer Nominee 2011 G. Rocco Delapa-Fairfield Auto Sales After 30 years in the business, the last 20 of which were in retail, G Rocco Delapa runs Fairfield Auto Sales (and now Vacaville Auto Sales) like a well-oiled machine. It could be because of his six-year tour in the Marines – he is a Vietnam veteran. It could come from the many jobs he had prior to getting into the car business, from working in a paper clip factory to detailing cars to becoming a gemologist. Either way, Rocco has one thing that has always helped Fairfield Auto Sales flourish: the word of mouth from Rocco’s many satisfied customers. Rocco is a member of the Faith Lutheran Church and makes regular donations and contributions to the church. He is a member of the Knights of Columbus, the Elks Club, the Moose Lodge and the Rotary Club. Each of these clubs is important to Rocco, and he stays vigilant in his time and other contributions to each. Rocco also contributes to local government works, for both the city of Fairfield and the city of Vacaville. Rocco has been married to his wife, Margie Delapa, for 21 years, and she is his partner in crime and his partner in business. When he is working late to satisfy customers at their Vacaville lot, she is ensuring the happiness of each of their Fairfield customers. Somehow despite the pressure of running two lots, buying cars at auction (North Bay Auto Auction is Rocco’s fourth home) and keeping up with all his charitable work, Rocco still finds time to travel to San Diego and visit his three children and three young grandchildren. Rocco is far from done with this business. Though retirement has been on his mind for quite a while, Rocco still looks for new ways to expand his business every day and still finds new ways to impress his growing list of clients. From cars to SUVs, Rocco knows what his customers want and works hard to make sure that they always get it.

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El Centro Named Quality Dealer of the Year

BY JULIO MOR ALES

With 28 years in the business as an auto dealer, Rey Guluarte never imag­ined his relatively small lot located in the often ­unheard-of Imperial Val­ley would be singled out for the state’s top honor by his peers. One of seven nominees for the coveted Quality Dealer of the Year award, Guluarte said he hadn’t even bothered to invite his family with him to the awards re­ception. Yet he did win. By one vote. “A lot of dealers have been around for 50 years and never get this honor,” Guluarte said in Spanish. “This is great news for the Valley.” Citing Guluarte’s untir­ing effort to stop unli­censed car dealer activity, U.S. Rep. Tom McClin­tock, R-4th District, awarded the El Centro business owner the award Oct. 8 at the 43rd Annual IADAC Convention in Oroville. Guluarte owns Autos Guluarte and was selected as the winner by his peers, who also noted his support of the IADAC and its schol­arship program. A member of the Im­perial Valley Automobile Dealers Association, Gu­ luarte said his busi­ness never promises po­tential customers any­thing that cannot be delivered. Last year, Autos Gulu­arte sold about 100 vehi­cles, he said. Even in a sluggish economy his business has benefitted from good word-of­mouth and returning cus­tomers. “One family has bought eight cars from me,” Gu­luarte said. Rarely does he have to repossess a car, Guluarte said, noting he is al­ways willing to work with clients who are trying to make ends meet and can­not afford to lose their auto. Careful consideration of the client’s needs is what Guluarte said he feels makes his business a standout in compari­son to large lots that have 200-300 cars on site. While he and his broth­ers used to operate a chain of Autos Guluarte, only his El Centro site remains since his brothers’ retire­ment. “With my daughters in college, I have to keep working,” Guluarte said. Guluarte said he will now represent California for a shot at the National Quality Dealer of the Year award at the NIADA Convention in Las Vegas, June 11-14. Through the years, Gu­luarte has worked with local law enforcement, the Department of Motor Ve­hicles and county officials to help protect the public by stopping unlicensed sales. Additionally, Guluarte has worked with other dealers throughout the state, helping them start similar programs in their areas. Dealers that sell cars without a license pose problems to consumers because most of those cars are not safety checked or smog checked. Problems with the ve­hicle’s title are not un­common when dealing with unlicensed dealers, according to the associa­tion’s website. Guluarte is currently president of the Mex­ican Dealers Association in the Valley and is in­volved with many community projects. He resides in El Centro with his wife and two daughters, both of whom received $1,000 scholar­ships from the association this year. Julio Morales is a staff writer for the Imperial Valley Press in El Centro, Calif. .

ComplianceOverdrive

Looking for Those Common Threads Have you ever tried staring at a Magic Eye poster or book? At first glance, they look like complex, two-dimensional designs. However, if you view them in just the right way, images seem to pop out in 3D. But it can be a difficult task because the designs are intricate and sometimes overwhelming. For those in the auto finance world, it’s easy to get the same feeling when looking at the vast number of regulatory changes taking place each year. With so much happening at once, it can be hard to see the big picture. That’s why it’s important to take a step back and look for the patterns. So what have we been seeing in 2011? A common thread across recent laws and regulations is a strong focus on the credit decision process. Three areas in particular offer key examples of this:

Denial Notices: Section 1100F of the Dodd-Frank Act and its implementation regulations require disclosing a credit score and related information in adverse action notices when that information is used as part of the credit decision. The purpose is to encourage applicants to review credit report and credit score information to see if errors or inaccuracies are causing credit denials. Risk-Based Pricing Notices: The federal risk-based pricing rule requires dealers, lenders and third-party providers to notify consumers when they receive materially less favorable credit terms than others based on consumer report information. The idea is to give consumers more information and prompt them to review their credit report information to confirm it is correct. It can also help consumers avoid unnecessarily accepting higher credit costs due to credit record errors and inaccuracies. Privacy Disclosures: The new model privacy notices aim to create more consistency in how vendors, including dealers and lenders, present information. The disclosures are given at the beginning of the credit transaction process so consumers can choose a vendor with privacy disclosures most in line with their information-sharing preferences. The new form is required to be comprehensible to consumers, with a clear format and design; provide clear and conspicuous disclosures; enable consumers to easily identify sharing practices of a financial institution so they can compare privacy practices among financial institutions; be succinct; and use an easily readable type font. In each of these cases, the laws and regulations focus on preventing consumer misunderstanding, controlling consumer information, encouraging review of credit records for errors and preventing fraud. These are all actions that take place when a consumer is completing a credit application and a credit decision is being made. These new laws and regulations are aimed at helping borrowers and buyers be more informed at the front end of the credit process. Arguably, this also helps dealers and lenders prevent problems up front, a particularly important benefit during difficult economic times. It is better to have informed customers and accurate credit information at the time of the credit decision. Spotting issues after the sale will often be too late to avoid the losses they will bring. Like those Magic Eye images, patterns across the regulatory environment aren’t always easy to see at first. But if you adjust your focus, you can train your eye to spot the common threads and see the bigger picture. This can ultimately lead to a better understanding of regulators’ key concerns and help your dealership maintain compliance. BY CHIP ZYVOLOSKI

Chip Zyvoloski is senior attorney for indirect lending at Wolters Kluwer Financial Services. For more information, visit www.wolterskluwerfs.com/indirect. 30

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