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DEALER NEWS FEBRUARY/MARCH 2012

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Going Green AUTO RECYCLING IS BOOMING

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

DALLAS, TEXAS Permit No. 2079

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INSIDE

MAGAZINECONTENTS

INSIDE

04 BHPH: What’s in Store for 2012 12 Going Green: Auto Recycling 14 Compliance Overdrive

WHAT’SNEW

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

March 22-24, 2012

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

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

ADVERTISERSINDEX ADESA.............................................. Inside Back Cover AutoTrader.com........................................... Back Cover Lobel Financial............................................................5 Manheim.com.................................. Inside Front Cover Protective....................................................................7 SmartAuction .............................................................9 United Acceptance................................................... 13

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV

NIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR TROY@NIADA.COM. THE NEVADA DEALER NEWS IS PUBLISHED BI-MONTHLY BY THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORATION, 2521 BROWN BLVD., ARLINGTON, TX 760065203; PHONE 817-640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT ADDITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF NEVADA DEALER NEWS OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEMBERS OF NIADA, DOES NOT CONSTITUTE AN ENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT © 2012 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED. STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITOR Andy Friedlander • andy@niada.com ART/PRODUCTION MGR. Christy Haynes • christy@niada.com PRINTING Nieman Printing

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FOR INFORMATION ON HOW TO BECOME A MEMBER PLEASE CONTACT CINDY SIRKEL. CINDY@NIADA.COM • 800-756-4232

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THE WORLD AUTOMOBILE AUCTIONEERS CHAMPIONSHIP will be webcast live this year

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

IRS Announces 2012 Standard Mileage Rates

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

Lessons from the Facebook settlement (even if you’r e not Facebook)

BY LESLEY FAIR

THE SOCIAL NETWORKING SERVICE FACEBOOK has agreed to settle Federal

Trade Commission charges that it deceived consumers by telling them they could keep their information on Facebook private, then repeatedly allowing it to be shared and made public. The proposed settlement requires Facebook to take several steps to make sure it lives up to its promises in the future, including giving consumers clear and prominent notice and obtaining consumers’ express consent before their information is shared beyond the privacy settings they have established. The terms of the FTC’s proposed settlement apply only to Facebook. But to paraphrase noted legal scholar Bob Dylan, companies that want to stay off the law enforcement radar don’t need a weatherman to know which way the wind blows. So what practical pointers can your business take from the Facebook case and other recent FTC actions dealing with consumer privacy? Promises, promises: Not making any privacy promises? Think again. Reread your privacy policy to see just what you’re telling customers and visitors you do with their information. And take a look at the privacy settings and other controls you offer. Like any other advertising claim, what you say about how you handle people’s info has to be truthful, not deceptive, and backed up with objective proof. Legal-ease: Now that you have your privacy policy in front of you, show it to a real person — your receptionist, the guy in the warehouse, a member of your family. If they’re not clear on what it says, chances are your customers aren’t sure either. Yes, run it past legal, but like the rest of your site, your privacy policy should be clear, direct and easy to understand. Keep geek-speak and legal mumbo-jumbo to a minimum. Attitudes, not platitudes: “We at Acme Industries use every means to protect your privacy and never share your information without your permission.” Some retailers lace their privacy policies with lofty language, but don’t back up their words with actions. Remember: Statements like that aren’t just yadda yadda. They’re promises you have to keep. For example, the FTC settled a case with a company that claimed, “We are committed to maintaining our customers’ privacy,” and yet failed to protect personal information from a well-known and easily preventable form of hack attack. Color my world: Let’s face it: A lot of privacy policies mumble “Don’t read me.” The type is tiny and the text is dense. They’re often formatted in snooze-inducing shades of gray, in contrast to the eye-catching graphics on parts of the web site designed to sell something. So here’s a crazy idea: How about giving your creative team a crack at rebooting the look of your privacy policy? A little color here, a bigger font there. Why not give it a shot? Ch-ch-ch-changes: For security-minded customers, your information practices may be a key factor in their decision to do business with you. But what if you collected information from them under one set of rules and now want to change what you do? Wise marketers call customers’ attention to the proposed change and get their express OK first. Just editing what you say in your privacy policy won’t alert them to what you plan to do. Time for a tech tune-up: If it’s been a while since you wrote your privacy policy, reconsider it in light of new technology you’ve put in place. What was true back in the day might not be the case if you’ve introduced a mobile app, switched service providers or made other changes to your business. Natural resources: You’ve got a business to run, so save time and money by using free resources from the FTC. Bookmark the Business Center’s Privacy & Security portal (http:// business.ftc.gov/privacy-and-security) for the latest on law enforcement and plain-language compliance suggestions. Visit OnGuardOnline.gov for tips from the federal government and the technology industry.

To read the FTC’s Facebook settlement, visit www.ftc.gov/opa/2011/11/privacysettlement.shtm LESLEY FAIR IS A SENIOR ATTORNEY WITH THE FEDERAL TRADE COMMISSION’S BUREAU OF CONSUMER PROTECTION AND HAS REPRESENTED THE COMMISSION IN NUMEROUS INVESTIGATIONS OF DECEPTIVE NATIONAL ADVERTISING. A RECIPIENT OF THE PAUL RAND DIXON AWARD FOR LAW ENFORCEMENT AND THE FTCS AWARD FOR OUTSTANDING SCHOLARSHIP, SHE NOW SPECIALIZES IN BUSINESS EDUCATION AND COMPLIANCE.

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BHPHNews

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

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

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

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

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

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

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IndustryNotes

Handling the Negatives A YEAR IN REVIEWS

WITH 2011 GONE and a new year ahead,

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

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

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

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

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

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

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USE TESTIMONIALS TO GROW YOUR BUSINESS GETTING AND USING A LIST OF STRONG TESTIMONIALS IS EASIER THAN YOU THINK. THE FOLLOWING TIPS WILL HELP YOU GET TESTIMONIALS TO INCREASE YOUR PROFITS.

WHICH ARE YOU MORE likely to believe: a

company representative telling you how great his product or service is or a recommendation from another person about how it worked for them? If you’re like most people, the words from a fellow consumer pull more weight than even the best written ad copy. That’s why no matter what product or service you’re selling, you need to use testimonials from satisfied customers in every ad and marketing piece you create. One of the main reasons people don’t buy something is that they’re fearful of making the wrong decision. So when they see that a product or service is endorsed by someone else — someone in their same situation — that fear is minimized. Therefore, testimonials are a great way of influencing others to feel comfortable about buying your products or services. Unfortunately, few business professionals actively seek out testimonials from their customers and clients. They mistakenly wait for people to give them testimonials, and when they do get them, they don’t know how to use them effectively. Getting and using a list of strong testimonials is easier than you think. The following tips will help you get testimonials to increase your profits.

How to Get Them

Choose satisfied customers who represent your target demographic: The best testimonials are written by people who are similar to your ideal customer. Therefore, be specific about whom you solicit a testimonial from. Look over your customer files and choose the people who exemplify the best case scenario for your product or service. Say to them, “I’d love for you to share your experience with Product A. Would you please write a short testimonial?” Most people will cheerfully say yes. Since you want more happy customers just like these, let their words sell for you. Offer to write the testimonial for them: Often, if someone declines your request to write a testimonial, it’s because they’re too busy or feel they don’t have adequate writing skills. In that case, offer to write the testimonial for them. Simply say, “I’ll be glad to write the testimonial for you. Just tell me what you’d like to say about the product. You can review what I write and we can use it as is or you can change it.” Most people will leave the testimonial as is, happy they didn’t have to take the time to write it. Look through your past notes and correspondence: Chances are you’re sitting

on a pile of testimonials and don’t even know it. Go back through your past emails and correspondence from customers and clients. Are there a few nice sentences in some of those messages? If so, ask the person if you can use their words in your marketing materials. They’ll often agree.

How to Write Them

Show results: Whether you write the testimonial or your customer does, it needs to specifically show what results the person experienced from the product or service. A testimonial that simply says what a wonderful company you have or how nice you are is not saying anything meaningful for the reader. A specific testimonial will speak to results. For example: “Dr. Smith’s treatment ended my 20year battle with migraines.” “Joe’s contracting remodeled my kitchen for $2,000 less than other bidders.” “Jones and Johnson CPA Firm reduced my tax liability by 30 percent.” The more specific a testimonial is, the stronger it sells for you. Specific testimonials take away the fear of making the wrong decision and help people feel safe about making the purchase. Keep it short: Each word of the testimonial should have value. Therefore, if someone writes you a page-long testimonial, edit out any words that don’t directly address the end result he or she received from your service or product. This doesn’t mean you change the meaning of what someone writes; you simply edit out the parts that don’t contribute to the meaning. For example, if someone writes a page about everything your company did to help them save 30 percent on their heating and cooling bills, you can condense it to one sentence, as in “As a result of ABC Company’s inspection of our home, we saved 30 percent on our monthly utility bill.” Often, the more words you take out, the stronger the testimonial becomes. Also, it’s easier to read and will stand out more. Include a name and title when possible: Rather than attribute your testimonial to “John S., Nebraska,” use the person’s real name, company name, title, and/or location whenever possible, as in “John Sanders, salesperson at Acme Company,” or “John Sanders, Omaha, Nebraska.” This makes your testimonial more believable. Most people will be happy to include their full name and other information, because the strongest human desire is to feel appreciated and recognized. Getting their name in print somewhere fulfills that need and is often perceived as fun.

How to Use Them

Include a testimonial or two in your ads and marketing pieces: Whether you’re doing a print, online, radio, or TV ad, be sure to include some testimonials. For print, it’s best to have testimonials stand alone from the text rather than try to weave them into the ad copy. For radio and TV, either the announcer or an actor can recite the testimonial, or if your customer is agreeable, have him or her appear in your radio or TV spot to give the testimonial personally. Other marketing pieces that should feature your testimonials include your web site, brochures, direct mail pieces, postcards, billboards, newsletters and even social media updates. Create a book of testimonials: Each time you receive a kind letter from a customer or client, highlight the key parts (the parts that state benefits to the customer), put the letter in a clear plastic sleeve and compile it in a big binder. Keep this book or binder of testimonials in your store or office for customers to browse through while they’re waiting. Or, if your business is online, create a page where you feature all your testimonials. There’s no limit to how many testimonials you can include in your book or on your page. Frame your best testimonials: If you have a store or office, frame some of your best testimonial letters and post them on your walls. Again, highlight the best parts so your customers can easily see the benefits. If you don’t get foot traffic (or if you go to your customers), put the best testimonial letters in your “leave behind” kit — the package of information you leave behind for the prospect.

The Ultimate Sales Tool

The next time you’re writing copy for an advertisement or marketing piece (and struggling with what information to include) simply go to your past testimonials. It’s always better when someone else sings your praises, so let your customers sell for you. The sooner you start using testimonials in every marketing message you create, the sooner you’ll realize that testimonials really are the ultimate sales tool.

BY PAM LONTOS PAM LONTOS, PRESIDENT OF PAM LONTOS CONSULTING, CONSULTS WITH BUSINESSES AND EXPERTS IN THE AREAS OF SALES, MARKETING AND PUBLICITY. SHE IS THE AUTHOR OF I SEE YOUR NAME EVERYWHERE: LEVERAGE THE POWER OF THE MEDIA TO GROW YOUR FAME, WEALTH AND SUCCESS. SHE CAN BE REACHED AT (407) 522-8630 OR PAMLONTOS@GMAIL.COM, OR BY VISITING WWW. PAMLONTOS.COM.

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SUNDAY, JUNE 10, 2012 3:00 pm – 7:00 pm

Registration

MONDAY, JUNE 11, 2012 8:00 am – 9:00 pm 10:00 am – 12:00 pm 12:00 pm – 1:00 pm 3:00 pm – 5:00 pm 5:30 pm – 7:00 pm 7:00 pm – 9:00 pm

Registration EC/Svcs/Foundation Boards & Past Presidents Meeting EC/Svcs/Foundation Boards & Past Presidents Lunch BOD Meeting Cigars & Martinis Convention Kick-off Reception

TUESDAY, JUNE 12, 2012 7:00 am – 7:00 pm 9:00 am – 10:00 am 10:15 am – 11:30 am 11:30 am – 1:00 pm

Registration CONVENTION OPENING SESSION GENERAL SESSION Lunch

EDUCATION ON THE HOUR, EVERY HOUR 1:00 pm – 1:45 pm 2:00 pm – 2:45 pm 3:00 pm – 3:45 pm 4:00 pm – 4:45 pm 5:00 pm – 9:00 pm

Breakout 1, Breakout 2 Breakout 3, Breakout 4 Breakout 5, Breakout 6 Breakout 7, Breakout 8 Expo Grand Opening w/ Dinner

WEDNESDAY, JUNE 13, 2012 8:00 am – 6:00 pm 9:00 am – 10:00 am 10:00 am – 11:00 am 8:00 am – 2:00 pm 11:00 am – 3:00 pm 3:00 pm – 3:45 pm 4:00 pm – 4:45 pm 7:00 pm – 9:00 pm

Registration GENERAL SESSION GENERAL SESSION NQD/Scholarship Interviews Expo Open w/ Lunch Breakout 9, Breakout 10, Breakout 11 Breakout 12, Breakout 13, Breakout 14 National Leadership Awards Banquet

THURSDAY, JUNE 14, 2012 8:00 am – 3:00 pm 10:00 am – 12:00 pm 8:00 am – 5:00 pm 9:00 am – 9:45 am 10:00 am – 10:45 am 11:00 am – 2:00 pm

Registration State Presidents Council Meeting Association Executives Council Meeting GENERAL SESSION GENERAL SESSION Expo Open w/ Lunch

SOLUTION SESSIONS 2:00 pm – 4:00 pm 5:30 pm – 9:00 pm 9:00 pm – 11:00 pm

Breakout 15, Breakout 16, Breakout 17, Breakout 18, Breakout 19, Breakout 20 National Quality Dealer Awards Broadcast & Banquet NQD After-Party

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Going Green A U T O

R E C Y C L I N G

AS WE COME INTO the second month of

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

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

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

BY QRP CENTRAL

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MarketingNews

Creating Serious Buzz with Video Marketing VIDEO MARKETING HAS THE ABILITY to

boost your local search ranking and drive quality traffic, via the social community, back to your website. There is a huge market on video distribution sites like YouTube and Vimeo just waiting to be tapped. Take a look at some of these quick and simple ways your dealership can get started with video marketing: Testimonials: These are a great way to promote your dealership – real people from the community expressing a positive opinion about their experiences. Think of it as online word of mouth, which is always the best advertising. A simple 20-40 second video of various interviews placed on your website, blog, social media and video distribution sites will give potential customers another reason to trust your services. People want real-life examples. Testimonials give them that. When the new owner drives away singing your praises, ask if he’d like a picture on his phone to share with his Facebook friends. How-to videos: Interested consumers

are searching online for videos to help them solve their problems. Think vehicle safety or enhanced performance tips, maybe a short clip on installing child safety and booster seats or the importance of proper tire pressure. Short videos like these are great ways to give your dealership the reputation of wanting to help people without asking for anything in return. Like the old adage says: Give in order to receive.

Interview the dealer: Record a short welcome message from the dealer or general manager. Include local involvement, which can help the community relate to your dealership through a personal connection, not just the business one. Remember to keep it short and sweet to keep your viewers engaged and wanting more. Incorporating video on your website, utilizing keyword strategy and distributing throughout the web will boost your overall search ranking. Successful dealers evolve with the times – in order to stay ahead of the game it is imperative to maximize your online visibility and reputation by becoming an active part of the social media community. You can start by capitalizing on the value in video SEO.

BY CHRIS MARENTIS CHRIS MARENTIS IS THE FOUNDER/CEO OF GENNEXT MEDIA, AN INTERACTIVE MEDIA AND MARKETING COMPANY, AND CREATOR OF THE SUREFIRE SOCIAL LEAD GENERATION MARKETING SYSTEM. FOR MORE INFORMATION, CALL (703) 896-7688, EXT. 111.

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ComplianceOverdrive

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

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

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

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

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