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Oklahoma Independent Automobile Dealers Association

DEALERS’ RESOURCE October 2012

OIADA Gives Back. In This Issue • OIADA 2012 Scholarships • Oklahoma Dealership Prevails in Title 42 Case • Inventory: What Are We To Do?

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OIADA, P.O. Box 6905, Moore, OK 73153

Visit Us Online At www.e-oiada.com OK_1012.indd 1

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MAGAZINE CONTENTS 04 06 10 12 20 22

OIADA 2012 Scholarship Dealer Compliance Review OKDOCC Changes Dealership Prevails in Title 42 Case Look Out for Open Recalls Inventory: What Are We To Do?

ADVERTISERS INDEX 71B Auto Auction...................................................... 15 ADESA...............................................Inside Back Cover Albright Insurance .................................................... 7 Ally .......................................................................... 13 AutoTrader.com.......................................................... 5 Chase....................................................................... 20 Chickasha Auto Auction............................................ 21 Dealer Center............................................................17 Dealer’s Auto Auction of OKC......................Back Cover Dodah.com .............................................................. 11 Jordan Insurance Group............................................. 9 Loftis Wetzel Insurance............................................ 25 Manheim.com.......................................................... 19 Manheim North Texas...................... Inside Front Cover NIADA Certified......................................................... 24 Oklahoma Auto Exchange......................................... 18 United Acceptance................................................... 23 Voisys ...................................................................... 34

WHAT’S NEW NIADA.TV Now available at www.niada.tv: • Building an Effective Dealership Website with Michael D. Jackson

• Tracking Devices with Jay Rose • L egislative/Regulatory Scene with Shaun Petersen and panel

• Avoiding The Potholes with Ken Shilson •F  eel Unstoppable in 60 Minutes with Ruben Gonzalez

NIADA Dealer 20 Groups

NIADA’s new 20 Groups program is designed for NIADA’s independent dealers as they do business today in BHPH, retail or both. Take your profits to the next level. Visit www.niada20groups.com

OIADA OFFICE

813 NORTHWEST 34TH MOORE, OK 73160

EMAIL: odell.morgan@sbcglobal.net ROSE & ODELL MORGAN, Executive Directors

AMBER SNOOK, Administrative Assistant

JACKIE GARNER, Office Manager

JARED MORGAN, Electronics/ Software Technician

LYNNA KAY, Programmer STEVE MORGAN, Consultant MIKE MORGAN, Technical Aide

FOR INFORMATION ON HOW TO BECOME A MEMBER OF OIADA PLEASE CONTACT ROSE OR ODELL MORGAN AT 405-232-2947.

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.

OIADA BOARD OF DIRECTORS PRESIDENT

Chris Goad Regal Motors 3515 N. May Oklahoma City, OK 73112 405-917-5800 managerokc@regalcars.com

CHAIRMAN OF THE BOARD

John Easttom Auto Mart of Elk City P.O. Box 981 Elk City, OK 73648 580-225-1100 automart@cableone.net www.daaokc.com

VICE PRESIDENTS

John T. Longacre, IV Taft Motors, Inc. 722 S. Linden St. Sapulpa, OK 918-224-7700 taftmotorsinc@msn.com Julian Codding Reliable Motors, Inc. 9201 S. Shields Oklahoma City, OK 405-912-5000 juliancodding@msn.com Monte Shockley Shockley Auto Sales 2605 N. Broadway Poteau, OK 74953 918-647-3999 sas@clnk.net

INDUSTRY NEWS

Auction Update: Manheim The Manheim 2012 Q2 update is a quick look at web traffic, online visits and transactions at Manheim.com for the second quarter of 2012. Mobile: Mobile visits to Manheim.com are up an astounding 368 percent over last year – 4.76 million vs. 1.02 million for the second quarter of 2011. One in three customers accessed Manheim.com on a mobile device, an indication mobile is becoming increasingly popular in the auto remarketing industry as dealers use smartphones to conduct business at their convenience. More customers are choosing to do business online – 25 percent of all transactions for the quarter were made by an online buyer. Digital visits: Digital visits to Manheim are up 12 percent over last year. Simulcast turns 10: More than 4 million vehicles have been purchased via Simulcast since its launch in 2002, representing almost $60 billion worth of inventory. Buying: More than 30,000 customers bought vehicles online in 2012. Selling: More than 20,000 customers sold a vehicle online in 2012.

Glenn McDaniel I-35 Credit Auto 1113 SE 51st St. Oklahoma City, OK 73129 405-670-4100 gtamcd@aol.com David McQuerry McQuerry Motors, Inc. 1302 N. Harrison St. Shawnee, OK 74801 405-273-8171 mcquerrymotors@yahoo.com

OIADA CONTACT INFO

Dealers’ Resource is a publication of Automotive Dealers Resource of Oklahoma (ADR) produced on behalf of the Oklahoma Independent Automobile Dealers Association (OIADA), P.O. Box 6905, Moore, OK 73153. The Dealers’ Resource is published monthly by the National Independent Automobile Dealers Association Services Corporation. Periodical postage paid at Arlington, TX, and at additional offices. POSTMASTER: Send address changes to OIADA, P.O. Box 6905, Moore, OK 73153. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of ADR of Oklahoma, the Oklahoma Independent Automobile Dealers Association or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of OIADA or NIADA does not constitute an endorsement of the products or services featured. Copyright © 2011 by O&R Morgan, Inc. dba OIADA. All rights reserved. Dealers’ Resource is a publication of Automotive Dealers Resource of Oklahoma on behalf of the Oklahoma Independent Automobile Dealers Association (OIADA), but is mailed to all dealers in the state in an effort to educate and encourage non-members to join the Association and support our efforts to improve the image and profit potential of the industry. For 55 years, we have worked to represent the independent motor vehicle dealer in Oklahoma. We need your support. FRONT COVER BY Mike Morgan STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITOR Andy Friedlander • andy@niada.com ART DIRECTOR Christy Haynes • christy@niada.com PRINTING Nieman Printing

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SCHOLARSHIP OIADA 2012 Scholarship Recipient: Adriana Danielle Sharp

Adriana Danielle Sharp, daughter of John and Susan Sharp of Sharp Automotive Group in Tulsa, graduated from high school with a 3.9 grade point average and was named a 2012 Oklahoma Academic Scholar. Her community service work includes Project Elf, Race for the Cure, Tulsa Angel Tree, Relay for Life, blood donations to the Red Cross, the Haiti Christmas Project and Charity: Water. “I’ve always felt compelled to do everything I can to assist men, women and especially children with medical ailments,” Adriana said in her application. “I love interacting with people and building long-lasting relationships with them. For me, a medical career is the ideal combination of personal interaction and actually aiding those with a specific need. “By pursuing a college education, and hopefully a degree from one of the nation’s top medical schools, I can attain my career goal of becoming an acclaimed physician, working with people in need and drastically extending and improving their quality of life.” Monte Freeman of America’s Auto Auction at 8544 E. Admiral Place in Tulsa was the sponsor for the OIADA scholarship presented to Adriana Danielle Sharp. America’s Auto Auction features a dealer-only sale each Wednesday at 2 p.m. Consigned vehicles come from banks, credit union repos, fleet lease, new car store trades, rentals and national remarketing clients. America’s Auto Auction of Tulsa also features a public/ dealer sale Mondays at 6 p.m. Hundreds of vehicles are available for sale. For more information, call America’s Auto Auction at 918-832-1050.

Adriana Sharp receives her $1,000 scholarship check from Monte Freeman of America’s Auto Auction. From left: John Sharp, Susan Sharp, Adriana Danielle Sharp, Monte Freeman, Sydney Freeman.

WINNERS OIADA 2012 Scholarship Recipient: Max Logan Atteberry

Max Logan Atteberry, son of Bruce and Melody Atteberry of OK Auto Remarketing in Norman, graduated from Washington High School with a 4.23 grade point average and was named valedictorian of his class. Max’s entire life has been spent around cars and trucks, and he has developed a pretty good knowledge of how a motor vehicle works and how to fix problems when they arise. He has been designing tools and parts to make things easier and more efficient ever since he could pick up a wrench. During Max’s junior year he enrolled at the Oklahoma School of Science and Math (OSSM). His success at OSSM solidified his desire to study engineering. “My plan is to attend the University of Oklahoma and receive a master’s degree in mechanical engineering, then start a career in the automotive or aerospace industry,” he said. “My dream is to be able to influence automotive or aerospace technology differently from anything the world has ever seen. Even after starting a career, I plan to continually learn and keep educating myself so I can better understand and contribute to making a better world for tomorrow.” Gary Smith of Dealers Auto Auction of OKC at 1028 South Portland in Oklahoma City was the sponsor for the OIADA scholarship presented to Max Logan Atteberry. Dealer-only sales are held each Thursday at 8:30 a.m. GSA sales are held once a month. Santander and Dollar Thrifty Automotive Group vehicles run weekly. For more information, call 405-947-2886.

Gary Smith (right) presents Max Logan Atteberry (second from right) a $1,000 scholarship check. Also on hand were (from left) Macy Atteberry, Bruce Atteberry and Melody Atteberry.

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Dealer Compliance Review Federal regulatory agencies are steadily increasing their oversight and enforcement activities. For instance, the Consumer Financial Protection Bureau (CFPB) is positioning itself to supervise non-depository financial institutions, including Buy Here-Pay Here dealers, that it determines are engaging in activities that pose risks to consumers. The Federal Trade Commission recently settled its first action against a car dealer for violations of the GrammLeach-Bliley Act Privacy Rule. The summary provided below might help used dealers review their compliance of relevant federal acts and regulations. As background, the FTC and the CFPB share authority for a number of acts. The CFPB has rulemaking authority with respect to BHPH and LHPH dealers for the financial regulations, such as ECOA, TILA, FCRA and the Privacy Rule. Other than that specific rulemaking authority, the FTC retains its role as primary regulatory agency for the used dealer industry, including enforcement of any rules authored by the CFPB. The CFPB has no specific authority over non-BHPH and non-LHPH dealers. Equal Credit Opportunity Act (ECOA) Description: This act (Title VII of the Consumer Credit Protection Act) prohibits lending practices discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance or good faith exercise of any rights under the Consumer Credit Protection Act. The act also requires creditors to provide applicants, on request, with the reasons underlying decisions to deny credit. Scope: BHPH, third-party finance dealers Rulemaking: CFPB, Federal Reserve Board Dealer relevance: • Prohibits discriminatory actions in credit transactions. • Requires adverse action notices when credit is denied. The Fair Credit Reporting Act also requires adverse action notices in limited cases. For any given customer, requirements of both acts can be satisfied by a single, appropriately formatted notice. Truth in Lending Act (TILA) Description: This act (Title I of the Consumer Credit Protection Act) requires all creditors who deal with consumers to make certain written disclosures concerning finance charges and related aspects of credit transactions, including disclosing an annual percentage rate. The

AN OVERVIEW OF THE RULES

act also establishes certain requirements for advertisers of credit terms. Scope: BHPH, third-party finance dealers Rulemaking: Oklahoma (Oklahoma is one of five states exempt from certain sections of the TILA), CFPB, Federal Reserve Board Dealer relevance: • Oklahoma dealers are governed by the state’s version of certain sections of the TILA. • TILA requires specific disclosures on retail installment sales contracts, such as APR, finance charge, amount financed, total of payments, total sale price and payment schedule. Credit term disclosures must be clear and conspicuous. • Governs advertising of credit terms. If certain credit terms are mentioned in the advertising piece, other terms such as APR must also be disclosed. The rule is intended to ensure that all important terms of a credit plan, not just the most attractive ones, appear in an ad. • TILA applies to credit transactions in which the amount does not exceed a certain threshold. In Oklahoma, the 2012 threshold is an amount financed of $50,000. The federal TILA threshold for 2012 is credit extended of $51,800. The thresholds are adjusted for inflation Jan. 1 of each year. Consumer Leasing Act (CLA) Description: This act, amending the Truth in Lending Act, regulates personal property leases that exceed four months in duration and are made to consumers for personal, family or household purposes. The statute requires certain lease costs and terms be disclosed, imposes limitations on the size of penalties for delinquency or default and on the size of residual liabilities, and requires certain disclosures in lease advertising. Rulemaking: Oklahoma (Oklahoma is one of five states exempt from certain sections of the TILA), CFPB, Federal Reserve Board Scope: LHPH Dealer relevance: • Requires specific lease term disclosures such as amount due at delivery, total of payments, payment calculation, payment schedule and early termination information. Like the TILA disclosures, certain formatting requirements apply. • Governs advertising of lease terms in a manner similar to TILA for credit sales. • Applies to leases for a period of more than four months and with a total contractual cost falling under a specified threshold. In

Oklahoma, the threshold for 2012 is $50,000. The federal threshold for 2012 is $51,800. Both thresholds are adjusted for inflation Jan. 1 of each year. Fair Credit Reporting Act (FCRA) Description: The act protects information collected by consumer reporting agencies such as credit bureaus. Information in a consumer report cannot be provided to anyone who does not have a purpose specified in the act. Companies that provide information to consumer reporting agencies have specific legal obligations, including the duty to investigate disputed information. Also, users of the information for credit, insurance or employment purposes must notify the consumer when an adverse action is taken on the basis of such reports. Scope: BHPH dealers, third-party finance dealers, any dealer involved in the credit process Rulemaking: CFPB with respect to RiskBased Pricing Rule for BHPH dealers, FTC with respect to Risk-Based Pricing Rule for non-BHPH dealers, FTC with respect to Red Flags Rule and Disposal Rule for all dealers Dealer Relevance: • The FCRA is implemented through a number of regulations, or rules, that apply to dealers. • The Risk-Based Pricing Rule requires a risk-based pricing notice be provided to the customer if you or your third-party finance entity uses information from a credit report, such as a customer’s payment history, to establish the price and other terms, specifically the annual percentage rate (APR) of the credit being offered or extended. • The FTC has issued specific guidance that states the Risk Based Pricing Rule requirement applies to dealers whose thirdparty finance entity uses information from a credit report to establish the buy rate. The dealer, not the third-party finance entity, is responsible for providing the notice. • The Red Flags Rule applies to dealers that offer financing or collect or process credit applications for third-party lenders. The rule requires covered dealers to develop, implement and maintain a written identity theft prevention plan. • The Disposal Rule dictates consumer personal private financial information, including consumer credit reports, be disposed of in a particular fashion. The rule applies to both C O N T I N U E D O N N E X T PA G E

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paper and digital information. • Both the FCRA and the Equal Credit Opportunity Act require adverse action notices be provided consumers in the event credit is denied. The FCRA notice requirements can be satisfied through appropriate use of sample notices defined by the ECOA. Gramm-Leach-Bliley Act (GLB Act) Description: Title V, subtitle A of this act generally governs the protection of consumers’ personal financial information by financial institutions. The Privacy Rule and the Safeguards Rule implement portions of subtitle A. The Privacy Rule requires financial institutions develop and provide notice of their privacy policies to customers. The Safeguards Rule requires financial institutions implement a plan to physically safeguard consumers’ personal private financial information. Scope: BHPH dealers, third-party finance dealers, any dealer involved in the credit process Rulemaking: CFPB with respect to Privacy Rule for BHPH dealers, FTC with respect to Privacy Rule for non-BHPH dealers, FTC with respect to Safeguards Rule for all dealers Dealer relevance: • The FTC recently settled its first action again a dealership for violations of both the Privacy Rule and the Safeguards Rule. That dealership is now subject to 20 years of auditing, reporting and FTC oversight. • The Privacy Rule requires covered dealers provide notice outlining their activities involving the collection, protection and sharing of consumers’ personal financial information. Customers must be afforded an avenue to opt out of having information shared with certain parties. The notice must be specific to the particular dealership and should reflect the actual practices of the dealership. • The Safeguards Rule requires covered dealers develop and maintain a written plan outlining their procedures to safeguard, or physically protect, consumers’ private financial information. The plan must be specific to the dealership and should accurately reflect the policies in place. Unfair and Deceptive Acts or Practices (UDAP) Description: UDAP is regulated at both the state and federal levels. At the federal level, Section 5(a) of the FTC Act provides that “unfair or deceptive acts or practices in or affecting C O N T I N U E D O N PA G E 8 7

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Dealer Compliance Review

commerce … are … declared unlawful.” “Unfair” practices are defined as those that cause “substantial injury to consumers which is not reasonably avoidable by consumers themselves.” In determining deception, the FTC considers whether a certain representation, omission or practice is likely to mislead when viewed from the perspective of a reasonable consumer. State UDAP laws generally follow the FTC UDAP statute, with emphasis on consumer protection. Scope: All retail and wholesale dealers Rulemaking: Oklahoma, FTC Dealer relevance: • Broadly prohibits unfair and deceptive practices. • Examples of UDAP activities include selling a vehicle without disclosing certain known damage, installing a GPS tracking device without disclosure, misleading advertising. • Oklahoma UDAP specifically forbids misleading advertising statements regarding price, price reductions and availability of product, and using bait and switch techniques. • Oklahoma UDAP specifically prohibits the use of obscene or profane language when contacting a debtor for debt collection. Holder in Due Course Rule (HIDC) Description: Formally titled Preservation of Consumers’ Claims and Defenses, the rule was developed under the FTC’s authority to regulate UDAP and was designed to protect consumers involved in certain third-party finance situations. The rule ensures that any holder of a loan contract or consumer credit contract is subject to all claims and defenses the debtor could assert against the seller. Scope: Third party finance dealers Rulemaking: FTC Dealer relevance: • The rule requires sellers to include specific “holder” language in the text of any consumer credit contract they execute with a buyer. The language must be in at least 10-point, boldface type. • The rule applies to any transaction subject to the Truth In Lending Act. Used Car Rule Description: Formally titled Used Motor Vehicle Trade Regulation Rule, the rule was developed under the FTC’s authority to regulate UDAP. The rule was designed to prevent dealers from misrepresenting the mechanical condition of a used vehicle and to spell out the terms of any warranty offered. The rule requires dealers to disclose, prior to sale, whether a used vehicle is sold without any warranty, and to make available the terms of any written warranty. Scope: All dealers Rulemaking: FTC Dealer relevance: • Requires FTC “As Is” Buyer’s Guide be posted prominently and conspicuously in the

vehicle prior to offering it for sale. • If a sale is conducted in Spanish, a Spanish-language Buyer’s Guide must be posted. • Applies to used vehicles with a GVWR of less than 8,500 pounds, a curb weight of less than 6,000 pounds and a frontal area of less than 46 square feet. • Motorcycles, agricultural equipment and vehicles sold for scrap are exempted. Magnusson-Moss Warranty Act Description: Title I of this act authorizes the FTC to develop regulations for written and implied warranties. The act directs the FTC to establish disclosure and designation standards for written warranties, specifies standards for full warranties and establishes consumer remedies for breach of warranty or service contract obligations. Scope: All dealers Rulemaking: FTC Dealer relevance: • The FTC “As Is” Buyer’s Guide required by the Used Car Rule does not serve as a written warranty. The Buyer’s Guide tells the customer whether or not a warranty is offered. • Any warranties offered must be written, must be titled as either “full” or “limited,” and must clearly state what is covered and what is not, the period of coverage, action you will take to correct problems, how the customer can obtain warranty service and how state law affects your customer’s rights. • Written warranties must be available to consumers before they buy. • Tie-in sales provisions are generally prohibited. • Deceptive warranties are prohibited. • The act makes breach of warranty a violation of federal law and enables consumers to recover attorneys’ fees. • The act does not address warranty advertising. Deceptive warranty advertising would be considered a violation of the Unfair and Deceptive Acts or Practices section of the FTC Act. Federal Odometer Act Description: This act is intended to prohibit tampering with motor vehicle odometers and to provide safeguards to protect purchasers in the sale of motor vehicles with altered or reset odometers. Scope: All retail and wholesale dealers, auction houses Rulemaking: Federal Transportation Department, Oklahoma UMV&PC Dealer relevance: • Requires an odometer disclosure statement for any transferred vehicle. • Federal law is satisfied by completion of disclosure on space provided on vehicle title. • Oklahoma UMV&PC wants the disclosure statement prepared at the time the deal is transacted. Since the title often isn’t available, a separate form might be required.

IRS Form 8300 Reporting Requirement Description: The law requires trades and businesses to report cash payments of more than $10,000 to the federal government by filing IRS/FinCEN Form 8300. The information provided on the form assists law enforcement in its anti-money laundering efforts. Scope: All retail and wholesale dealers, auction houses Rulemaking: IRS and Financial Crimes Enforcement Network, Department of the Treasury (FinCEN) Dealer relevance: • Applies to vehicle sales on which $10,000 or more in cash is received from the same buyer in a single transaction or in related transactions. • Cash does not include a cashier’s check, bank draft, traveler’s check or money order. • Generally, Form 8300 must be filed within 15 days after the cash is received. • A written statement must be sent to each subject customer notifying them of the Form 8300 filing by Jan. 31 of the year after the year in which the customer made the cash payment. • Special reporting provisions are made for suspicious activity cash payments. Executive Order 13224 Description: Executive Order 13224 was signed into law by President George W. Bush in the days shortly after the terrorist attacks on Sept. 11, 2001. The order declares all properties of specifically “listed” persons to be blocked and forbids any U.S. person from engaging in any transaction or dealing of those assets. The Office of Foreign Assets Control (OFAC), Department of the Treasury, maintains a list of persons, termed “Specially Designated Nationals” or SDNs, whose assets are blocked. Violators of the order may be subject to civil fines as well as criminal prosecution and multiyear imprisonment. Scope: All retail and wholesale dealers, auction houses Rulemaking: OFAC Dealer relevance: • All dealers are prohibited from selling a vehicle to or buying a vehicle from any person or entity included on the SDN list. • To ensure compliance, dealers must first identify the individual involved in the transaction, typically by collecting information such as name, address, date of birth and tax identification number. Second, dealers must determine whether the individual is listed by reviewing the OFAC SDN list. • The list is available online through the OIADA website (www.e-oiada.com). Select menu item “Resources” then “Blocked Persons List.” Note: This article is provided for informational purposes only. It is not legal advice. For its application to your situation, please consult your attorney.

BY ADR STAFF

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IN THE INDUSTRY

F R O M U . S . D E PA R T M E N T O F H E A LT H A N D H U M A N S E R V I C E S

New Hire Reporting Federal law requires all employers, regardless of size, to report all new hires, re-hires and employee terminations. New hire reporting is the process by which you, as an employer, report information on your newly hired employees to a designated state agency shortly after the date of hire. New hire reports are matched against child support records at the state and national levels to locate parents who owe child support. This is especially helpful for interstate cases, in which one parent lives in a different state from his or her child, which are often the most difficult cases for states to resolve. With new hire reporting, state child support enforcement agencies have the ability to issue income-withholding

orders – the most effective means of collecting child support – more quickly. The state child support agency does two things with the new hire data. First, the agency compares the information submitted against current state child support files to locate parents. Second, the agency promptly passes the new hire information to the National Directory of New Hires, a component of the Federal Parent Locator Service within the Federal Office of Child Support Enforcement. This service compares the data from the employer’s state with child support information from other states and, when a match is found, provides the information to the appropriate state agency.

For Oklahoma employers, the reporting agency is the Oklahoma Employment Security Commission (OESC). The following information is required: W-4 elements, state of hire and date of hire (first day of work). You can optionally report occupation, salary, date of birth, OK employer account number, availability of health insurance for dependents and recall (re-hire) date. For more information or to report online, go to the OESC website at www.ok.gov/oesc_web. Select the ‘Employers’ link on the left side of the screen, then select the ‘New Hire Reporting’ link. You can contact the OESC new hire office at 1-866-553-2368 or CSED. EmployerAssistance@okdhs.org.

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W W W. O K D O C C . S TAT E . O K . U S

Oklahoma Department of Consumer Credit Update: Notice To Lenders Listed below are changes in the maximum charges that a Lender may make on items that are affected by changes in the Consumer Price Index Indicators, Consumer Price Index for Urban Wage Earners and Clerical Workers. The designated sections and the corresponding dollar amounts effective July 1, 2012 are as follows (2011 amounts are represented by strikeouts and the 2012 amounts are represented by underlines. PART 2. MAXIMUM CHARGE CHANGES EFFECTIVE 7-1-12 O.S. 14A § 2-201. Credit service charge for consumer credit sales other than revolving charge accounts (1) With respect to a consumer credit sale, other than a sale pursuant to a revolving charge account, a seller may contract for and receive a credit service charge not exceeding that permitted by this section. (2) The credit service charge, calculated according to the actuarial method, may not exceed the equivalent of the greater of either of the following: (a) the total of (i) thirty percent (30%) per year on that part of the unpaid balances of the amount financed which is $1,380.00 $1,410.00 or less; (ii) twenty-one percent (21%) per year on that part of the unpaid balances of the amount financed which is more than $1,380.00 $1,410.00 but does not exceed $4,600.00 $4,700.00 and (iii) fifteen percent (15%) per year on that part of the unpaid balances of the amount financed which is more than $4,600.00 $4,700.00; or (b) twenty-one percent (21%) per year on the unpaid balances of the amount financed. § 2-203. Delinquency charges (1) With respect to a consumer credit sale, refinancing, or consolidation, including a revolving charge account, the parties may contract for a delinquency charge on any installment not paid in full within ten (10) days after its scheduled due date as follows: (a) an amount not exceeding the greater of five percent (5%) of the unpaid portion of the scheduled installment or $23.00 $23.50. PART 5. SUPERVISED LOANS - CHANGES EFFECTIVE 7-1-12 O.S. 14A 3-508A. Loan finance charge for supervised loans (1) With respect to a supervised loan, including a loan pursuant to a revolving loan account, a supervised lender may contract for and receive a loan finance charge not exceeding that permitted by this section. (2) The loan finance charge, calculated according to the actuarial method, may not exceed the equivalent of the greater of either of the following: (a) the total of (i) 30% per year on that part of the unpaid balances of the principal which is $1,380.00 $1,410.00 or less; (ii) 21% per year on that part of the unpaid balances of the principal which is more than $1,380.00 $1,410.00 but does not exceed $4,600.00 $4,700.00; and (iii) 15% per year on that part of the unpaid balances of the principal which is more than $4,600.00 $4,700.00; or (b) 21% per year on the unpaid balances of the principal.

§ 3-508B. Loan finance charge for loans with principal of $1,380.00 $1,410.00 or less. (1) On loans having a principal of $1,380.00 $1,410.00or less, a supervised lender may charge in lieu of the loan finance charges specified in Section 3-508A, the following amounts: (a) on any amount up to and including $137.95 $140.95, a charge may be added at the ratio of $4.60 $4.70 for each $23.00 $23.50 of principal; (b) on any loan in an amount in excess of $137.95 $140.95 up to and including the amount of $161.00 $164.50, there shall be allowed an acquisition charge for making the loan not in excess of one-tenth (1/10) of the amount of the principal. In addition thereto, an installment account handling charge shall be allowed not to exceed $13.80 $14.10 per month; (c) on any loan in an amount in excess of $161.00 $164.50 but not more than $322.00 $329.00, there shall be allowed an acquisition charge for making the loan not in excess of one-tenth (1/10) of the amount of the principal. In addition thereto, an installment account handling charge shall be allowed not to exceed $16.10 $16.45 per month; (d) on any loan in an amount in excess of $322.00 $329.00 but not in excess of $460.00 $470.00, there shall be allowed an acquisition charge for making the loan not in excess of one-tenth (1/10) of the amount of the principal. In addition thereto, an installment account handling charge shall be allowed not to exceed $18.40 $18.80 per month; (e) on any loan in an amount in excess of $460.00 $470.00, up to and including $690.00 $705.00, there shall be allowed an acquisition charge for making the loan not in excess of one-tenth (1/10) to the amount of the principal. In addition thereto, an installment account handling charge shall be allowed not to exceed $20.70 $21.15 per month; (f) on any loan in an amount in excess of $690.00 $705.00 but not more than $1,380.00 $1,410.00 there shall be allowed an acquisition charge for making the loan not in excess of onetenth (1/10) of the amount of the principal. In addition thereto, an installment account handling charge shall be allowed not to exceed $23.00 $23.50 per month. LIMITATIONS ON CREDITOR’ REMEDIES § 5-103. Restrictions on deficiency judgments in consumer credit sales (2) If the seller repossesses or voluntarily accepts surrender of goods which were the subject of the sale and in which he has a security interest and the cash price of the goods repossessed or surrendered was $4,600.00 $4,700.00or less, the buyer is not personally liable to the seller for the unpaid balance of the debt arising from the sale of the goods, and the seller is not obligated to resell the collateral. (3) If the seller repossesses or voluntarily accepts surrender of goods which were not the subject of the sale but in which he has a security interest arising from a sale of goods or services and the cash price of the sale was $4,600.00 $4,700.00 or less, the buyer is not personally liable to the seller for the unpaid balance of the debt arising from the sale. In addition, fee of $25.00 is established for amended and duplicate licenses or registrations and for returned checks due to insufficient funds.

V I S I T W W W. PAY N E A R M E . C O M

Westlake Financial Adds PayNearMe’s Technology

PayNearMe, the cash transaction network, has launched PayNearMe Lending, a cash payment system for subprime lenders, and has teamed with Westlake Financial Services to integrate PayNearMe’s technology into existing systems, enabling customers to repay retail installment contracts in cash 24/7 at any of 6,600 participating 7-Eleven® stores nationwide. Using PayNearMe, customers of Westlake’s network of more than 15,000 new and used car dealers will be able to make account payments in cash at their local 7-Eleven store, where a unique loan barcode or PayNearMe Card is scanned at the register. With PayNearMe, the transactions are completed instantly, and consumers’ accounts are credited instantly. “PayNearMe offers a remarkably simple way to make our collections process more efficient,” Westlake director of operations John Mason said. “We anticipate reduced operational costs while adding payment locations for our customers.” “Subprime lenders need to make cash payments as easy as possible for themselves and their consumers,” PayNearMe CEO Danny Shader said. “We’ve dramatically changed how cash payments are made by opening up thousands of additional payment locations, accessible any time they are needed.” PayNearMe Lending, a secure hosted web application, provides a comprehensive turnkey service lenders can use to accept cash payments without integration. Lenders can set up PayNearMe Lending in less than 15 minutes and start collecting immediately, and can add additional sites almost instantly. Because PayNearMe Lending does not require any integration with existing systems, it can be used by lenders of any size. “We appreciate that PayNearMe allows our customers to make payments at any time,” Tidalwave Finance Corp. president Ted Beresford said. “In fact, we’ve been pleasantly surprised by how many customers make their payments at 10 p.m.”

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K N O W YO U R R I G H T S

Oklahoma Dealership Prevails in Title 42 Case An Oklahoma Buy Here-Pay Here dealership recently prevailed when it challenged a Title 42 Possessory Lien. By knowing and asserting its rights under Title 42, the dealership successfully denied payment to the claimant, quickly regained possession of the vehicle, re-sold it in a timely fashion, and eventually received a monetary settlement from the claimant. In late December 2011, the dealership received a Title 42 Notice of Possessory Lien for a vehicle it had previously sold. The dealership held a lien on the 2005 model year vehicle, the note was in default and the dealership had a right to repossess. The vehicle had an approximate value of $10,000. The Possessory Lien Notice listed “collision repair, parts and labor $4,700; title service $100” as the basis for the lien. Review of the notice showed it to be deficient with respect to Title 42 requirements. Notably absent were an itemized statement of the repairs and the date the work was allegedly performed, a statement that the vehicle owner had authorized the repairs and a statement that the repairs had actually been performed. The dealer received a Notice of Sale a few days later and made an effort to physically inspect the vehicle, as was this lienholder’s right under Title 42. In addition, the dealer repeatedly contacted the claimant requesting written evidence of the repairs. Only after being contacted by the dealer’s attorney did the claimant provide documentation for the alleged repairs. The repair invoice was dated October 2011, exactly 60 days prior to the date the lien notice was mailed. The invoice itemized 35 hours of labor and included charges for parts and supplies. The invoice also revealed that $1,500 of the lien amount was for 60 days’ storage. It wasn’t until after the dealer’s attorney filed a petition in court that the vehicle was released to the dealer. On inspection, the dealer determined neither body work nor repairs had been performed on the vehicle. And based on the dealership’s GPS tracking data, it was apparent the vehicle was not in storage at the claimant’s facility in late November and early December 2011. The dealer’s attorney filed an amended petition claiming relief for Title 42 violations, conversion of the vehicle to claimant’s personal use and fraud, and asked for treble charges, attorney fees and punitive damages. The claimant’s response asserted the vehicle’s owner had requested collision repairs and said the repairs had, in fact, been made. But in light of the evidence, the

claimant admitted he did not gain possession of the vehicle until mid-December, just days before he mailed the Title 42 notices. He obviously could not have performed repairs in October, nor could the 60-day storage charge be substantiated. The claimant eventually came forward and made a monetary offer to settle in favor of the dealership. The dealership accepted and the issue was resolved in August. By knowing his rights under Title 42, and by legally asserting those rights, the dealer prevailed. Following is a summary of the Title 42 sections applying to this case. (NOTE: Different sections of Title 42 apply when a Class AA wrecker operator is involved.) First, know that if a claimant fails to “substantially comply” with any of the relevant Title 42 requirements, you may proceed against him for all damages, including conversion, if the vehicle has been sold. If the notices are shown to be knowingly false or fraudulent, you could be entitled to treble damages. If you prevail in the case, you shall be entitled to all costs, including reasonable attorney fees. Title 42 Notice of Possessory Lien Requirements The notice shall be mailed (certified mail) not later than 60 days after the first services are rendered, and shall be signed by the claimant and notarized. If the claimant is a business, the name of the contact person must be shown. Lien Notice shall include: •A statement that the notice is a notice of a possessory lien. •The complete legal name, physical and mailing address, and telephone number of the claimant. •The complete legal name and physical and mailing address of the person who requested the service or storage, such as the vehicle owner. •A description of the vehicle and the complete physical and mailing address of its location. •An itemized statement describing the date(s) the services were performed, the materials furnished and the compensation claimed. •A statement that the service or storage was authorized by the vehicle owner and the service was actually performed, or, if the only service was storage, a statement that the property was abandoned and storage fees will accrue as allowed by law is permissible. Permissible storage charges: •May only be assessed beginning with

the day the notice is mailed as evidenced by certified mail, or, if storage results from an agreement or arrangement that was primarily for the purpose of storage, charges may be assessed beginning not more than 60 days prior to the date the notice was mailed. Charges must be in accordance with the original agreement. •Shall not exceed the storage fees established by the Corporation Commission for nonconsensual tows. The current maximum outdoor storage rate for a single automobile or motorcycle as of October 2012 is $15 per day. The maximum indoor storage rate is $25 per day. Other rates apply for larger and multiple vehicles. Title 42 Notice of Sale Requirements At least 10 days prior to the sale, the Sale Notice must be posted in three public places in the county where the property is to be sold. On the day of posting, the Sale Notice must also be sent by certified mail to all interested parties, including the owner and lienholder. Any interested party shall be permitted to inspect the vehicle and verify the services, such as repairs, were actually rendered (unless storage of an abandoned vehicle is the only service). Proceedings for foreclosure must begin within 30 days after the Lien Notice is mailed. The date actually sold must be within 60 days after the Sale Notice is mailed. Sale Notice shall include: • A statement that the notice is a Notice of Sale. •The names of all interested parties known to the claimant. • A description of the vehicle to be sold. • A notarized statement of the nature of the service performed, the date of service, name of the person authorizing the service or that the property was abandoned if storage was the only service. • The date, time and exact physical location of the sale. • The name, complete physical address and telephone number of the claimant. If the claimant is a business, the name of the contact person must be shown. If you have questions, or need help with a Title 42 issue, feel free to contact the OIADA staff for an appointment to discuss your issue. If you believe you have been a victim of a fraudulent Title 42 claim, notify your state senator, state representative and OIADA. Note: This article is provided for informational purposes only. It is not legal advice. For its application to your situation, please consult your attorney.

BY ADR STAFF

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INDUSTRY NEWS

Trade-Ins Getting Older

Car dealers are receiving trade-ins that are three to four years older than tradeins received a few years ago, according to estimates from Black Book’s analysts. And with 900,000 more trade-ins than last year expected in 2012, the majority of vehicles entering the used car market are model year 2000-2005, which makes higher mileage tradeins the new normal. Black Book estimated the majority of trade-ins now average between 125,000 and 150,000 miles, and F&I experts have reported a rise in vehicles with 200,000 miles. The analysts said Buy Here-Pay Here dealers will benefit the most from the older inventory, and there is plenty of demand as consumer credit has forced more shoppers to seek those deals. Vehicles older than 2005 are more difficult to finance. According to Black Book, the aged inventory will impact dealers through 2014 before trade-ins begin falling again in age and mileage. “Americans are holding onto their cars longer today, and this aged vehicle is what’s being traded in as we’ve seen a rise in new-car sales activity,” Black Book managing editor Ricky Beggs said.

Prepaid Plans Drive Service Loyalty

Prepaid or complimentary maintenance plans combined with excellent service delivery are among the best ways to win and retain consumer loyalty – especially “next-gen” customers, according to a survey conducted by DMEautomotive. The national consumer survey showed 56 percent of consumers with a prepaid or complimentary service plan are likely to continue servicing at dealership after the plan expires – only 20 percent said they were unlikely to do so – and 62 percent of those who use a plan for “all” maintenance are likely to stick with their dealer. Roughly one in four U.S. vehicle owners (22 percent) have a dealer/OEM prepaid or free service plan. Nextgeneration consumers – those under age 35 – are more likely to have a plan (31 percent) than those over 35 (18 percent) – and are more likely to have all maintenance done under the plan or at the dealer (72 percent) than those over 35 (61 percent).

MARKET NEWS

Report: Expect to See More Hybrids Expect to see more hybrids cruising around the world’s highways in the next few years. According to market research report distributor ReportStack.com, the global hybrid car market is expected to grow at a rate of 18.92 percent over the next three years. The cause for the potential double-digit growth: increasing global oil consumption, the report, titled “Global Hybrid Car Market 2011-2015,” explained. Moreover, as governments around the world try to cut down on fuel emissions, the hybrid car market has “been witnessing an increase in initiatives by governments to create awareness and acceptance of hybrid cars,” the report said. The report also cites labor arbitrage, such as the various advantages offered

by the hybrid car to the end user, such as energy efficiency, less pollution, better performance, reduced dependency on natural resources and more, as reasons for the hybrid market expansion. That said, even with the push from politicians, the high cost of hybrid cars is acting as a barrier to the market growth, the report said. ‘’With the time and research on the development of the battery systems of hybrid cars, the overall cost of batteries and total cost of ownership will decrease,” an analyst from the publishing automotive team said. “By 2014, the total cost of ownership of plug-in hybrid electric vehicles with a battery of 10 kilowatthours will be below that of an internal combustion engine vehicle, and by 2017, the total cost of ownership of plug-in

hybrid electric vehicles with a battery of 15 KWh will be lower than an internal combustion engine vehicle. “The total cost of ownership of battery electric vehicles will be less than an internal combustion engine vehicle by 2020 with the development of batteries. This reduction in cost will fuel the growth of the global hybrid car market.” Who will benefit most from this potential growth? The vendors currently dominating the hybrid market space include Toyota Motor Corp., Honda Motor Co., Ford Motor Co., and Nissan Motor Co. Ltd., the report noted. General Motors Co., BMW AG and Volkswagen Group are also expected to play a role in the future fuel-efficient vehicle market.

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S O U R C E : W W W. N H T S A . G O V

NHTSA Recalls Suzuki Forenza, MY 2004-2006 Suzuki Reno, MY 2005-2006 NHTSA ID number: 12V397000 Electrical system: Wiring: Interior/under dash Units affected: 101,688 Suzuki is recalling certain model year 20042006 Forenza and model year 2005-2006 Reno vehicles manufactured from Sept. 23, 2003 through Mar. 7, 2006. Increased resistance due to poor contact between the terminals of certain wires can generate heat that can melt the splice pack used to connect the power circuit wires for the headlamps. That can result in intermittent or total loss of low/high beam headlamp function. If the headlamps fail to function, it will lead to reduced driver visibility, increasing the risk of a crash. Suzuki will notify owners and Suzuki dealers will reconnect the affected wires with two heat-shrink crimps, free of charge. The safety recall is expected to begin during September 2012. Owners can contact Suzuki at 1-714-996-7040. Suzuki’s recall campaign number is NU.

Buick Rainier, MY 2006-2007 Chevrolet Trailblazer, MY 2006-2007 GMC Envoy, MY 2006-2007 Isuzu Ascender, MY 2006-2007 Saab 9-7X, MY 2006-2007 NHTSA ID number: 12V406000 Electrical system Units affected: 249,260 General Motors is recalling certain model year 2006 Chevrolet Trailblazer EXT and GMC Envoy XL and 2006-2007 Chevrolet Trailblazer, GMC Envoy, Buick Rainier, Saab 9-7X and Isuzu Ascender vehicles originally sold or currently registered in Connecticut, Delaware, Illinois, Indiana, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, West Virginia, Wisconsin and the District of Columbia. Fluid can enter the driver’s door module, causing corrosion that could result in a short in the circuit board. A short can cause the power door lock and power window switches to function intermittently or become inoperative. The short can also cause overheating, which could melt components of the door module, producing odor, smoke or a fire. A short in the circuit board could lead to a fire, increasing the risk of personal injury. The remedy plan is

still being finalized. A notification schedule has not been determined yet. Buick, Chevrolet and GMC owners will be notified by GM. Buick owners may contact the owner center at 1-800-521-7300, Chevrolet owners at 1-866694-6546, and GMC owners at 1-866-9969463. Isuzu owners will be notified by Isuzu Motors. Owners can contact Isuzu customer service at 1-800-255-6727. Saab owners will be notified by Saab Cars North America. Owners can call Saab customer service at 1-855-880-0808. Chevrolet Express, MY 2003-2004 GMC Savana, MY 2003-2004 NHTSA ID number: 12V388000 Fuel system, gasoline: Storage: Tank assembly: Filler pipe and cap Units affected: 9,389 GM is recalling certain model year 20032004 Chevrolet Express and GMC Savana vehicles equipped with a left-side cargo door and originally sold or currently registered in Connecticut, Delaware, Illinois, Indiana, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, West Virginia, Wisconsin and the District of Columbia. Water and road contaminants can become trapped in the protective conduit that covers the fuel filler pipe and can cause the pipe to corrode. Significant corrosion can allow fuel to leak during refueling, and in the presence of an ignition source, there is an increased risk of fire. GM will notify owners, and dealers will install a new fuel filler neck, free of charge. GM has not provided a notification schedule. Owners can contact the Chevrolet owner center at 1-866-694-6546 and GMC at 1-866996-9463. GM’s campaign number is 12166. Mercedes Benz G55, MY 2011 Mercedes Benz G550, MY 2011 NHTSA ID number: 12V380000 Structure Units affected: 189 Mercedes-Benz is recalling certain model year 2011 G550 and G55 (AMG) vehicles manufactured from Sept. 20, 2010 through April 27, 2011. During the front passenger airbag deployment, parts of the molding strip could come loose and become a projectile in the passenger compartment. In the event of the passenger airbag deployment, if the molding strip comes loose, there is an

increased risk of personal injury. MercedesBenz will notify owners, and dealers will reinforce the connection between the molding strip and airbag cover flap, free of charge. The safety recall is expected to begin during September 2012. Owners can contact Mercedes-Benz at 1-800-367-6372. Chevrolet Impala, MY 2008-2012 NHTSA ID number: 12V377000 Suspension: Front: Control arm: Lower arm Units affected: 36,413 GM is recalling certain model year 2008-2012 Chevrolet Impala police vehicles because the front lower control arms can fracture. This safety recall does not include non-police Chevrolet Impala vehicles. A broken control arm can result in the loss of control of the vehicle, increasing the risk of a crash. GM will notify owners, and dealers will replace both front lower control arms, free of charge. The safety recall is expected to begin on Aug. 21, 2012. Owners can contact the Chevrolet owner center at 1-866-694-6546. GM’s campaign number is 12104. Lexus HS250 Hybrid, MY 2010 Toyota RAV4, MY 2006-2011 NHTSA ID number: 12V373000 Suspension: Rear Units affected: 780,584 Toyota is recalling certain model year 2006 through 2011 RAV4 and 2010 Lexus HS250H passenger vehicles manufactured from October 2005 through September 2010. If the nuts for adjusting the rear wheel alignment are improperly tightened during service, the rear suspension arm (rear tie rod) can develop unwanted movement and rust, leading to thread damage and eventual failure. Failure of the rear tie rod will cause an abrupt change in the vehicle’s alignment. Failure of the rear tie rod could cause a loss of vehicle control, increasing the risk of a crash. Toyota will notify owners, and dealers will inspect the rear tie rod nut for looseness and replace any suspect tie rod found loose. Dealers will also affix instructions in multiple places to prevent improper servicing in the future. Owners can contact Toyota at 1-800331-4331 or Lexus at 1-800-255-3987. FOR MORE INFORMATION, VISIT WWW. NHTSA.GOV OR WWW.SAFERCAR.GOV.

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INDUSTRY WORKSHOP

Manheim Launches Online Learning Center Manheim has announced the launch of the Learning Center, a resource dedicated to educating dealers on Manheim’s buying and selling services. The Learning Center site (www. manheim.com/tlc), which features brief video overviews of remarketing tools and how to use them, is designed to be a self-service dealer resource aimed at delivering practical tools that can be used in day-to-day business operations. “Whether it’s through classroomstyle workshops, live webinars or answering questions on sale day, Manheim has always been dedicated to educating our dealers,” vice president of dealer sales Susie Heins said. “The Learning Center is an online extension of our educational offerings, giving dealers access and convenience, anytime and anywhere.”

Manheim worked closely with customers in an effort to make the site design user-friendly and to offer information they felt was important. The site requires no log in, allowing dealers who are not Manheim customers to take advantage of the educational tools. The tools include tutorials on understanding OVE.com and Simulcast, bidding and buying on a mobile device, floorplanning vehicles with MAFS, registering vehicles for an in-lane sale and other topics. Dealers can also access The Wholesale Institute workshop information from the website. For more information, visit www. manheim.com/tlc.

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·  Friendly and knowledgeable staff committed to serving you!

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WITH A WARM MEAL AND COMFORTABLE ENVIRONMENT, YOU’LL ENJOY A BUYING EXPERIENCE THAT WILL BRING YOU BACK WEEK AFTER WEEK!

Stars GPS

We are pleased to include Stars GPS as an OIADA Branded Provider of vehicle tracking and recovery solutions for our industry. Stars GPS specializes in providing the best technology with personal service, training and support for the independent and franchise dealership. For more information, go to www.stars-gps.com, email info@stat-gps.com or call 877-828-4770.

David L. Nunn, Esq.

David L. Nunn heads the Edmond, Okla., law office of David L. Nunn, P.C., which serves the greater metro Oklahoma City area. We are pleased to include Mr. Nunn as an OIADA Select Provider of legal services to the industry. David L. Nunn, P.C. is located at 17 East First Street, Edmond, OK 73034. He can be reached at 405-330-4053 or by fax at 405-330-8470. Mr. Nunn is included as a Select Provider not because he asked to be, but because we know the quality of service that he provides to dealers.

B & C Auto Transport, Inc.

B & C Auto Transport takes pride in providing fast, dependable transport service to auto dealers nationwide. We are pleased to include B & C Auto Transport, Inc. as an OIADA Select Provider of transport services for auto dealers nationwide because of its record of providing outstanding service at reasonable rates. Call 405-381-0114 or 405-641- 6057 (cell), or email BCAutoTransportInc@gmail.com.

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Unrepaired open recalls are an important factor in vehicle evaluations” CARFAX COMMUNICATIONS DIRECTOR LARRY GAMACHE

A T H I R D O R M O R E O F A L L R E C A L L E D V E H I C L E S A R E N O T F I X E D B Y T H E I R O W N E R S . A R E A N Y I N YO U R I N V E N T O R Y ?

Finding Open Recalls Should be a Dealer Priority Manufacturer recalls are a common occurrence, with hundreds of recalls issued every year affecting millions of cars. In fact, more than 20 million cars were recalled in 2010 alone. But what is alarming about recalls is how many go unfixed by their owners – roughly a third or more of all recalled units. And thousands of those cars are bought and sold every day. It’s believed there are anywhere from 40 million to 60 million cars out there with unfixed recalls. In just the past two years, roughly 12 million cars with open recalls were added to the growing tally. And some of those vehicles are moving daily through auto auctions and being taken in on trade. While finding and fixing open recalls is everyone’s responsibility, it’s up to retailers to take the proper

steps to identify any potential issues. Many are already keeping a sharp eye out for evidence of things like flood damage, odometer rollbacks or previous accidents. But what about open recalls? In 2010, a plumber from Delaware named Bob Knotts bought a van for his business from a local independent dealership. He never asked about open recalls, never checked for them and was never told if any existed. Around midnight his wife ran into the house from walking the dog, screaming that smoke was pouring out of the van. The entire front cabin was engulfed in flames. The van was destroyed. “It caught fire from an electrical component under the driver’s seat that was recalled and never fixed,” Knotts said, standing next to the van parked less than five feet from his home. “My house

could have caught on fire, or I could have been driving it. Had it spread to the back of the van, where I keep a propane torch and glue that’s highly flammable, it would’ve been a complete fireball. “Not knowing there was an unfixed recall cost me $8,000.” One way to tell if a car has an open recall is to check the vehicle history. Most manufacturers report their open recall information to CARFAX. When you’re evaluating a vehicle or looking at the auction run list, consider getting a CARFAX Vehicle History Report to help you pinpoint which vehicles have open recalls before taking them into inventory. “We understand that recalls are a concern for our customers,” said Ryan Corey, president of Autoline Automotive in Atlantic Beach, Fla. “It’s up to us to

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make sure the cars we’re selling have had potential issues addressed. “As an independent dealer, we take full advantage of tools like CARFAX reports that help identify open recalls. Any recalls that show up are taken to get fixed before we retail that vehicle. In fact, as a CARFAX Advantage Dealer, we run a CARFAX report on every vehicle we sell as well as any vehicle we buy. It’s a key part of our everyday operations and builds trust with potential buyers. We know we’re doing right by our customers and are putting the best cars on our lot.” Checking the vehicle history for every unit on your lot helps you make better buying decisions and builds confidence with customers. It can be to your advantage to let your customers know upfront about an open recall and help them get it fixed. Auto manufacturers understand the importance of informing their customers about a recall. Customer safety and the company’s reputation are at stake. With so many of those vehicles changing hands before they’re fixed, most manufacturers choose to work directly with CARFAX to reach the greatest number of buyers and sellers. “Ford is committed to communicating

safety recall information to vehicle owners in an open and transparent manner as part of our commitment to top quality,” Ford recall and service programs operations manager Robert Case said. “Ford was the first major automaker to establish a relationship with CARFAX to provide open safety recall information as we recognized the CARFAX Vehicle History Report as a valuable tool used by many consumers and business entities.” Independent dealers can save time and choose the right cars by checking for open recalls through a vehicle history report prior to acquisition. If you already have vehicles on your lot with open recalls, the smart and safe thing is to take them in to be closed. Show your customers the report and the service receipt with the recall completion. Customers will appreciate your honesty and focus on safety. “Unrepaired open recalls are an important factor in vehicle evaluations,” CARFAX communications director Larry Gamache said. “Estimates are that nearly a third of all recalled vehicles aren’t fixed by their owners. CARFAX is working with leading manufacturers, our dealer customers and consumer advocates to

alert people to open recalls and make sure more of these are fixed.” Used car shoppers are looking to dealers to make them aware of any issues like open recalls. Be informed about the cars you’re retailing before they even reach your lot – CARFAX can help. To become a CARFAX subscriber, NIADA members can visit www.carfaxonline. com, call 877-606-9119 or visit www. niada.com and click on the “Links” tab.

BY CARFAX

“CHICKASHA AUTO AUCTION...WHERE SERVICE SELLS!”

AUCTION SALE EVERY THURSDAY NIGHT! Dealer registration forms, additional sale information and directions are available on our web site: chickashaautoauction.com

Auction starts at 6:30pm

Dinner is served from 5:30 till 6:30pm. • We have a host of New Car Stores, Loan companies, Banks, and credit unions. • We strive to provide an extremely friendly atmosphere and full service to our dealer family. • Come Experience where Dealers will be treated with more respect and service !! • We are a family owned and operated, experienced business with a respected reputation thru out the automobile industry. We take great pridein being the best we can possibly be.

OWNERS: DAVID BLALOCK, JIM BLALOCK

P. O . B O X 2 1 5 7 •

4 11 E . H W Y 1 9 C H I C K A S H A , O K 7 3 0 2 3

W E A R E A D E A L E R S A L E O N LY

P : 4 0 5 2 2 2 3 111 • F :

4 0 5 2 2 2 3 11 5

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I T ’ S T I M E T O R E A S S E S S YO U R I N V E N T O R Y P R A C T I C E S A N D P R O C E S S E S

Inventory: What Are We To Do? Okay, we all get that new car sales volume in the U.S. dramatically toppled from the 16-17 million-unit levels through 2007 to something like 9 million in 2008. And, even though the recovery of new car volume is happening now, this has dramatically affected used car availability. The so-called “Used Car Factory,” which we define as the lag time from when the car rolls off the showroom floor to when it returns to the marketplace as a used car looking for its next owner, has had an effective 45 percent output curtailment over the past three years. Historically, original ownership of new cars had been in the 39-month range. Therefore, when we look at the diminished volume of 2008, 2009 and 2010, throw in a little program known as Cash for Clunkers for extra measure, and then fast forward some 39 months … voila! We have a critically low supply of used vehicles. And that’s not good news for a used car dealer who needs inventory. Granted, it’s a good thing new car sales are on the increase. That equates to increased output in the used car factories. However, we mustn’t forget that for the past few years, car owners have hung on to their cars longer than customarily in the past. The average car on the road is more than a decade old with an odometer reading in its second 100,000 miles. So what are we to do? What options do we dealers have? Cut back the number of vehicles we buy? Stop buying altogether? Those aren’t viable. So how do we get through the next 39 or so months? Inventory acquisitions are more difficult given the scarcity, but it’s more than just the unit count. Frankly, it’s never been easier to make a buying mistake. We are talking older vehicles with higher miles that need more reconditioning, which increases the propensity to miss something. They are going to need more recon, which costs money and takes time, which costs more money. Let’s look at some key points that may prove wise to overlay onto your specific business model in hopes of maximizing your inventory dollar in this very trying time. Take the time to do a little due diligence and see if you like what you see. Does it look like you thought it did? Vehicle profile: Do the vehicles that your

model is based on exist? That is to say, if your model was based on a certain vehicle type(s) that you determined several years ago, has the market shift made them nonexistent? That basic economic principle of supply and demand is alive and well. Demand is up, supply is down. Does your target vehicle exist today? Average ACV: Supply and demand affect prices every bit as much as availability. In this environment, we’re going to have to pay more. The problem is that we can’t just summarily pass this increase on to the client, though it does work mathematically on paper. The drawback is, in the real world, our customer base is pretty close to being tapped out. In some categories we have seen vehicle prices rise as much as 30-40 percent. Let’s face it, our customers can’t pay 30-40 percent higher payments. Trying to force it becomes a formula for disaster. So if car prices are rising and it doesn’t make sense to raise the payments, what do we do? Increase the term to keep the payments lower? Increasing the term: When we take a close look at our customers’ ownership habits, we find they aren’t changing nearly as rapidly as the market. This means they aren’t going to keep the vehicle any longer than they ever have. Yes, they are likely to sign up for a longer term to keep the payments lower, but within three years (typically) they’re going to expect to trade no matter how much they have left to pay. If we try to hold their feet to the fire, don’t be surprised if a competitor calls and tells you that you can pick up your car. Did someone say “repo close?” Longer terms are not going to fix the problem. Maybe it’s time to consider Lease Here-Pay Here to keep the terms shorter. Longer terms are the enemy. Reconditioning: We can’t ignore this elephant in the room. Not only are the vehicles older, more expensive and less available, they need more reconditioning to get them on the lot. Tempting as it may be, we can’t skimp on this either. Failure to do reasonable reconditioning makes for unhappy customers. Not only that, but the collection department feels it – big time. We all know the old saying, “They won’t pay for it if it quits running.” Isn’t it curious we never

seem to remember that in the auction ring? Memo to self: Pay attention and use post-sale inspections. PSIs might be the best investment we can make in avoiding a problem car – perhaps the best tool, short of the Internet, that auctions provide us dealers. “Do not buy” lists: Adhere to them, for heaven’s sake. Picture yourself or your buyer spending the entire day at the auction with little to show for it. All of a sudden, into the lane comes a really nice vehicle that is on the “do not buy” list. The bidding starts, and, wow! This car is too cheap to pass up. So what the heck, you buy it. You take it home, sell it within a week and repossess it months later, abused and worth half what you bought it for. Now how cheap was it? Analyzing repossessions will identify which vehicles attract a buyer who is quick to buy, common to overcommit and likely to repossess. That’s why we say, “Underwriting begins with the acquisition of the vehicle.” That means the best underwriting process in the world can be trumped by putting customers in cars that have a high propensity to repossess. Don’t get in the ring and forget it. Memorize your “do not buy” list. What starts bad, ends bad. We are not attacking your inventory practices and processes. We concede there are many that are quite successful. But if you haven’t reassessed in the last year or two how you intend to operate through the next 3-4 years, we hope this will stimulate your thinking to do just that. Inventory is our lifeblood. Like a pilot in turbulent weather, we believe you need to turn the autopilot off. You’re going to need to “hand fly” through this one. So to the question: Inventory – what are we going to do? Answer: Put it under the microscope and pay attention to each and every detail. Make changes if you need to. Don’t delay.

BY JIM HOLMAN (THE CAR STORE, OKC)

JIM HOLMAN IS OWNER-OPERATOR OF THE CAR STORE, LLC., AN EXCLUSIVE LEASE HERE-PAY HERE DEALERSHIP IN OKLAHOMA CITY. HIS BACKGROUND IN LEASING, SPANNING SEVERAL DECADES, BEGAN IN THE NEW CAR INDUSTRY AND EXPANDED INTO LHPH IN 2001. HE IS ALSO A COMMISSIONER ON THE OKLAHOMA USED MOTOR VEHICLE & PARTS COMMISSION. HE CAN BE REACHED AT JHHOLMAN@AOL.COM.

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A S S O C I AT I O N N E W S

Bond and License Renewal Schedule

D AT E

ACTION

C O N TA C T

NOTE

In Oklahoma, all used dealer bonds and licenses expire Dec. 31 of each year. That includes used dealer licenses, salesman licenses, dealership bonds and salesman bonds. Your dealer plates, issued by the Oklahoma Tax Commission, also expire Dec. 31. And, unlike public vehicle license plates, there is no grace period for dealer plates. You cannot do business without proper bonding and licensing, so it’s to your benefit to submit completed renewal applications in a timely manner and follow up on the status of each until you receive approval. Here’s a schedule of steps to help guide you through the bond and license renewal process:

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T H E P O P U L A R I Z AT I O N O F S M A R T P H O N E S A N D T H E W H I R LW I N D O F A P P S H AV E E M P O W E R E D T H E I N D U S T R Y

Growing Role of Technology in Post-Recession Market Heading into the fourth quarter of 2012, industry leaders continue to point to market trends that forecast the end of the recession. As a result of increased availability of rental, fleet and new car trades at auction and continued strong new car sales, the industry will see nearly one million more vehicles in the market in 2012. The current challenge for many independent car dealers is sourcing the right inventory as wholesale used car prices decline. The industry continues to stabilize since the peak of the recession. However, the lasting effects of the recession will continue to impact the market as we once knew it. The extreme market conditions brought on by the recession has produced a unique set of challenges for the independent used car dealer. With sharply climbing gas prices since 2007 and 2008, the market

had experienced a negative impact on large truck and SUV sales. Overall used car supplies dropped substantially with the removal of more than 750,000 units by the Cash for Clunkers program. Those market changers resulted in artificially high used car prices, which made sourcing vehicles even more difficult for the average used car dealer. While the difficult market forced out many dealers during the past five years, a new crop of dealers has recently emerged. Those dealers are turning to technology to drive their businesses and maintain a competitive edge. The reliance on technology has increased significantly in the automotive sector. This permanent change has helped dealers in all areas of their business. Sourcing inventory is one of the major avenues in which dealers are using technology to assist in their “new

business� flow. Many dealers are turning to consumer direct online portals and wholesale online platforms to supplement purchases at traditional auction facilities. In addition, the popularization of handheld smartphone devices and the whirlwind of available apps have empowered the industry to source, assess, value and purchase inventory from the tools in the palms of our hands. In fact, the market is rife with smartphone app solutions for every step in the life cycle of a used car. Choosing the right products and services can take some time, but trying to run a dealership operation without the right tools to stay ahead of the competition takes even more time. With sourcing issues easing in 2012 and used car prices continuing to stabilize, the rest of the year should produce new opportunities for dealers. But staying C O N T I N U E D O N N E X T PA G E

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on top of local price trends is a must to ensure profit margins stay strong and overall sales increase. Speculating on inventory levels and pricing heading into tax season can hurt some dealers if consumer demand and prices drop sharply. Market fluctuations, softer prices and macroeconomic factors are all challenges dealers could face in the next few months. Technology can help dealers stay on top of those trends. Partnering with technology-based companies that are positioned to forecast market trends and adapt according to industry needs should be an integral part of a dealer’s success in the post-recession marketplace. Dealers should look to align with companies that not only offer technology products that fit their business needs and scale of operations, but that also back their products with superior customer service. Tech solutions should allow dealers

to be more efficient and effective so they can focus on core dealership operations. Dealers should look for solutions that focus on turning inventory faster while increasing profit margins. Today’s technology can provide dealers the real-time data needed to do just that — appraisal tools, real-time reporting, market trends on specific vehicles and days’ supply. All are things a successful dealer will find important as a way to stay on top of market conditions. Additionally, a technology platform that requires dealers to make large-scale changes to their business operations might not be the right choice for all dealers. Technology solutions should enhance a dealer’s successful business practices and provide a consistent means to providing market data. As we enter a more technologicallydriven marketplace, the resilience, determination and entrepreneurial drive of used car dealers continues to inspire

companies like DSC to provide the right products and services backed with superior customer service. Since 2005, Dealer Services Corporation has worked to bring innovative technology solutions to our dealer and auction partners to make floorplan financing a seamless business solution. With state of the art and industry-first technology offerings like the myDSC virtual office and the DSC Unplugged™ mobile smartphone application, DSC provides the support today’s dealers look for in a business partner. DSC is proud to serve independent car dealers and looks forward to long partnerships with its customers in navigating the postrecession market.

BY BRIAN GEITNER

BRIAN GEITNER IS PRESIDENT AND CO-FOUNDER OF DEALER SERVICES CORPORATION, THE LARGEST INDEPENDENT INVENTORY FINANCE PROVIDER FOR USED AUTOMOBILES, AND HAS MORE THAN 20 YEARS OF EXPERIENCE IN THE AUTO FINANCE INDUSTRY. FOR MORE INFORMATION ABOUT DSC, VISIT WWW.DISCOVERDSC.COM.

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OIADA REPORT

Used Motor Vehicle and Parts Commission Report Commissioner Steve Ross convened the Aug. 14, 2012 session of the Used Motor Vehicle and Parts Commission. Following roll call and approval of the July 10 meeting minutes, Ross called on director John Maile for the director’s report. Maile called the commissioners’ attention to the expenditure report in the agenda packet. Maile reported that the 2013 budget has been approved and bills are being paid off the current budget. A copy of the budget will be emailed to the commissioners. The addition of another investigator is still being pursued, but staff has not been satisfied with the applications received. Maile reported current economic conditions appear to be the major factor in dealers finding themselves with their licenses cancelled due to lapsed insurance policies. Many dealers appear to be paying their insurance premiums on a monthly basis. When a payment is missed, the insurance company notifies the commission of the lapse, which results in automatic cancellation of a dealer’s license. The commission sends a notice to the dealer and follows up with a certified letter. That process takes a considerable amount of time and consumes a lot of staff time. A few years ago, the commission established a “reinstatement” fee of $100 rather than requiring the dealer to initiate a new application. That fee is not sufficient to cover the commission’s cost for reinstatement, so consideration is being given to developing a tiered system of fines that could be assessed dealers who don’t get their insurance in on time or allow their insurance to lapse. Maile reminded the commissioners that he has the authority to fine dealers up to $500 and asked for and received the commissioners’ approval to begin instituting a system of fines for insurance lapses and/or insurance that is submitted late. Following a vote affirming receipt and approval of the expenditures report, Ross called on deputy director Kenneth Whitehead for his report. Whitehead said there were four informal hearings that resulted in one dealer being fined for violations and two dealers with issues settled, while the outcome of one dealer’s hearing is still pending. Red River Auto Auction was fined $500 for using unauthorized sellers. In district court action, a permanent injunction was granted against William C. Doyle of Tulsa County. Whitehead’s written report indicated commission staff had issued 14 cease and desist letters and completed 13 inspections during the period. Staff handled 29 written complaints – 10 title issues, 11 dealing with contract violations, four related to mechanical issues, one regarding spot delivery and three complaints of a miscellaneous nature. The education program had 11 in attendance. Applicants for a new license and dealers involved in significant rule violations are required to attend the commission’s education program as a part of acquiring or maintaining a state license. The education sessions are held at the commission conference room at 2401 NW 23, Oklahoma City. Classes are held on Monday prior to the commission meeting on the second Tuesday of each month. The sessions run from 9 a.m. to about noon or 1 p.m. You are asked to make reservations so staff can be prepared to accommodate you. Call the commission at 405-521-3600 to make reservations. Director Maile announced that staff has adopted a policy change that will affect those dealers who are prone to having an inordinate number of complaints lodged against them each month. The new policy is designed to encourage such dealerships to reduce the number of customer complaints in order to avoid being required to appear before the commission to explain why the complaints continue.

BY ADR STAFF

REPORT OF CEASE AND DESIST LETTERS ISSUED

These letters direct the individual or business to cease violations of laws or rules ENTITY Brian Amachouch Paul Combs Elite Automotive Larry House Donald Miller Donald Miller Morales Tires N Wheels Lincoln Northeaton Rainey Enterprises, LLC Carlos Ray Luis H. Ruiz RV General Store – OKC Kyle Sherman Rafael Vasquez

TYPE OF VIOLATION Insurance Pool Insurance Pool Used Dealer Rebuilder Used Dealer Dismantler Insurance Pool Insurance Pool Used Dealer Insurance Pool Insurance Pool Used Dealer Insurance Pool Insurance Pool

CITY Tuttle Tulsa Tulsa Cartwright Oklahoma City Oklahoma City Oklahoma City Midwest City Oklahoma City Oklahoma City Oklahoma City Oklahoma City Oklahoma City Oklahoma City

DATE ISSUED 07/02/2012 07/10/2012 07/02/2012 07/19/2012 07/12/2012 07/12/2012 07/12/2012 07/02/2012 07/02/2012 07/02/2012 07/02/2012 07/25/2012 07/02/2012 07/10/2012

CLOSED COMPLAINT REPORT

These are complaints that have been resolved one way or another. They do not necessarily reflect any wrongdoing on the part of dealers. ENTITY Ada Auto World AOK Auto Sales Auto Brokers of Oklahoma, Inc. Best buy Here Pay Here Auto Bob Howard Automall Bob Howard Automall Buy Here Motors, Inc. Car Mart of Owasso Classic Chevrolet, Inc. Classic Recreations, LLC David Stanley Chevrolet, Inc. David Stanley Dodge, LLC David Stanley Hyundai, LLC Edmond Hyundai Hi-Tech Motors, LLC Joe Cooper Ford of Shawnee, LLC Metro Motor Company Mike Mowdy Autoplex Momentum Toyota of Tulsa Norris Auto Sales & Service, LLC #3 North Point Auto Sales Phil’s Deals on Wheels, LLC Reynolds Ford, Inc. Reynolds Lincoln-Mercury Smicklas Chevrolet Stanart Auto Triple M Motors Triple T Motors, LLC Universal Mobile Homes, Inc.

CITY Ada Stillwater Oklahoma City Oklahoma City Oklahoma City Oklahoma City Oklahoma City Owasso Owasso Yukon Oklahoma City Midwest City Oklahoma City Edmond Tulsa Shawnee Oklahoma City Midwest City Tulsa Edmond Nowata Mustang Norman Norman Oklahoma City Oklahoma City Oklahoma City Oklahoma City Oklahoma City

COMPLAINT Contract Mechanical Mechanical Title Title Contract Title Title Title Contract Title Contract Miscellaneous Title Mechanical Contract Miscellaneous Spot Delivery Title Contract` Title Contract Mechanical Contract Title Contract Contract Contract Miscellaneous

RESOLVED 07/09/2012 07/24/2012 07/13/2012 07/20/2012 07/10/2012 07/10/2012 07/23/2012 07/17/2012 07/10/2012 07/09/2012 07/24/2012 07/23/2012 07/26/2012 07/17/2012 07/02/2012 07/13/2012 07/20/2012 07/10/2012 07/10/2012 07/16/2012 07/10/2012 07/10/2012 07/23/2012 07/10/2012 07/11/2012 07/23/2012 07/20/2012 07/26/2012 07/13/2012

LICENSES SUSPENDED OR ABANDONED

In other action, the following licenses were suspended or abandoned: BUSINESS NAME LOT CITY REASON Affordable Automotive Broken Arrow Out of business per owner Jimmie Edwards Bargain Center Auto Sales Oklahoma City Out of business; phone disconnected Bristow Wholesale Cars Bristow Out of business; applied for retail license Car Town Lawton Out of business per investigator’s report Erb’s Recreation Vehicles, Inc. Fort Gibson Out of business per Tiffany Erb-Hilton Peak Motor Company Tulsa Out of business; phone disconnected Timmerman’s T-N-T Auto Sales Inola Out of business; phone disconnected

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INDUSTRY NEWS

KEEPING CARS LONGER IS HERE TO STAY

The two- to three-year vehicle purchasing cycle is gone, according to a survey of nearly 4,000 car owners by AutoMD.com. Three of four respondents to the study, conducted from March to May, agreed that buying a vehicle every two to three years is a thing of the past. And half said a better economy would not change their habit of holding onto their vehicle longer than in the past. “There is nothing surprising about the economy driving car owners to hold onto their vehicles for longer – our data has been showing this trend for the past three years,” AutoMD.com vice president of marketing Brian Hafer said. “But what is most compelling is that longer ownership has become an embedded habit for car owners, regardless of what the economy does. This significant lengthening of the ownership cycle looks like it is here to stay.” The survey showed 78 percent of drivers now keep their cars 10 years or longer, and 60 percent said their primary vehicle has more than 100,000 miles on it. Two-thirds of those surveyed said they plan to keep their car until it surpasses 150,000 miles. The survey indicated the longer ownership trend is spurring consumers to seek out independent repair shops over dealership service centers. Among customers who usually go to a service center for repairs or maintenance, 69 percent said they were more likely to use independent repair shops over dealerships (20 percent) and chains (8 percent). For more information, visit www. automd.com.

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License Applicants Approved

The following applicants, as listed in the agenda for the Used Motor Vehicle and Parts Commission regular meeting of Aug. 14, 2012, were considered for issuance of used motor vehicle dealer licenses and wholesale vehicle dealer licenses. The applications were approved pending compliance with the state licensing laws and rules and subject to final approval by commission staff.

OIADA New and Renewal Members The following list includes members who joined or renewed their OIADA/NIADA membership during July. We express our sincere appreciation for all the members of OIADA and extend our invitation to dealers who are not members. A membership application can be found elsewhere in this newsletter. We urge you to be an active part of maintaining a strong and effective used car industry voice in the legislative and regulatory environment. With the current administration’s attitude toward the motor vehicle sales industry, we need that voice more than ever!

R R R R R R R R R R N R R R

COMPANY

West Brothers Auto Sales Danny’s Car Sales, Inc. Ron Miller Motor Co. A & G Auto, Inc. Edwards Auto Sales Cars & Tires, Inc. Crossroads Auto Mall Fishers Auto Mall, Inc. All Star Vehicle Sales, LLC A-Z Auto Parts & Auto Sales Lakeshore Boat & Auto, LLC Auto Mart of Elk City, Inc. OK Auto Remarketing Dallas Auto Auction

NAME

Garvin L. West Danny C. Nakvinda Ronald J. Miller Akbar Ghoreyan E. D. Edwards Sr. Stuart Harlin Larry D. Pennington Floyd Fisher II Jimmy Sweat Danny West David Baker John Easttom Bruce Atteberry David Robertson

JOINED CITY

1994 1995 2000 1994 2010 1992 1995 1995 2007 1997 2012 1998 1999 1991

Lawton Enid Arnett Del City Roland Durant Oklahoma City Oklahoma City Tishomingo Oklahoma City Eufaula Elk City Norman Dallas, TX

USED DEALER LICENSES COMPANY NAME

*Advance Auto Sales, Inc. Arash Ostovar Anderson Family Auto, LLC David E. Anderson Battison Honda Larry C. Battison James C. Norton Boxcer Truck & Auto Sales Newton Box, II Ralph Cercy II Empire Motorsports, LLC Richard Shane Swearingen Chad Corey Fisher Motors, Inc. Codie Fisher I-35 Credit Auto Tyson Heltzen Jim Norton Chevrolet James C. Norton Jim Norton Toyota of Oklahoma James C. Norton Larry C. Battison Mark Towner Motors, LLC Mark Towner Pointer & Fountain’s Used A/S, LLC Charles Allen Fountain II Jesse Andrew Pointer R V General Store, Inc. – OKC Barry G. Bender Schofield Auto Sales, LLC Kelly Schofield Jeremy Schofield Danny Schofield Southwest Auto Pawn & Sales, Inc. Dondi Cobb Sullivan’s Auto City Ronnie Sullivan Thunder Auto Sales Abdel Aljazzazi Thunder Custom Cycles, LLC Dean Carpenter Greg Carpenter Todd Auto Sales Homer “Todd” Farrill *Tulsa Wholesale Cars Joseph Van Wiggins Uncle Sam’s Cars Etc., LLC Donald Pendergraph Linda Pendergraph

CITY

Oklahoma City Yukon Oklahoma City Tulsa Yukon

Oklahoma City Oklahoma City Broken Arrow Oklahoma City Alva Spiro Oklahoma City Oklahoma City Weatherford Idabel Oklahoma City Elk City Ada Tulsa Lawton

* Subject to approval of financials

WHOLESALE DEALER LICENSES

COMPANY

CH Auto Sales

NAME

Carolyn Hampton Kai Hampton

CITY

Pryor

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OIADA Can Help Make

Your Path

Certain.

Oklahoma Independent Automobile Dealers Association For $295 You Get Membership In Both OIADA and NIADA Plus All Of The Following Benefits And Even More That Are Not Listed!

Programs for Extra Profit

• Access to Insured Warranty & Service Agreements • How to Structure a Related Finance Company • Networking Opportunities With Other Dealers

Programs to Help Keep Profit

• NADA Guide Books – single copy or subscription • Black Book Guide Books – single copy or subscription • Dealer Bonds - Salesmen’s Bonds • Discount on complete line of State approved Business Forms • Discount on Dealer supplies National Dealer Network Skip Tracing Contacts

Publications Public

• OIADA Magazine/Newsletter • Federally Required Safeguards Policy Document • Federally Required Red Flags Rules Policy Documents • IRS Audit Technique Guide For the Independent Used Car Dealer • Current Industry Information • Legislative Alerts • NIADA Monthly Magazine • NIADA Annual Buyer’s Guide

Professional Development

• Dealer Educational Seminars • Certified Master Dealer Program • Regional Professional Development Compliance Seminars • Free Access to NIADA.tv Training at Your Business • Access to IndependentDealer.com where dealers go for answers • NIADA Membership and Window Decal • OIADA “Symbol of Integrity” Logo, Window Decal and Membership Plaque • NIADA Annual Convention and Trade Show • Individual Assistance by phone • Code of Ethics

Representation

• State Lobby and Consultant Services • State Legislative and Regulatory Tracking and Reporting • Federal Lobby and Consulting Services • Federal Legal, Legislative and Regulatory Tracking and Reporting • Used Motor Vehicle and Parts Commission Liaison • Oklahoma Tax Commission Liaison • Oklahoma Department of Consumer Credit Liaison • Full Time Professional Staff to assist you when problems arise

Members Can Also Sign Up For Automotive Dealers Rewards From

Automotive Dealers Resource Of Oklahoma and Earn Money Saving Coupons For Their Future Purchases. Visit http://rewards.buyadr.com/

Automotive Dealers Rewards is open to Members and Non-Members Who Purchase From ADR of Oklahoma

Join OIADA online at http://www.e-oiada.com/join 31

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AV E R A G E C R E D I T S C O R E S O F N E W A N D U S E D C A R B U Y E R S H AV E FA L L E N T O N E A R LY T H E S A M E L E V E L A S 2 0 0 8

Loosening Loans Are Driving Sales For car buyers seeking auto loans, happy days are here again. U.S. banks and auto finance companies are once again welcoming all kinds of customers, even those with less-thanstellar credit. The average credit scores of new and used car buyers, which spiked during the economic downturn, have fallen to nearly the same level as 2008 – before the recession. Better yet, experts don’t think the credit pipeline will dry up anytime soon. Low interest rates are making it cheaper for banks to get money, which makes them more willing to lend. The federal funds rate – the rate at which banks lend money to each other – is near zero percent, down from 2 percent in the summer of 2008. Loans to subprime buyers – those with credit scores of 679 or lower – are particularly attractive, since banks can charge higher interest rates. The average

interest rate for a deep subprime loan (credit score less than 550) on a new car is 12.9 percent, compared with 3.2 percent for buyers with the highest scores, according to Experian Automotive, which tracks automotive credit data. At the same time, both banks and consumers have lowered their debts, meaning even subprime loans are less risky because borrowers are less likely to be in debt and unable to pay. For example, 0.57 percent of auto loans were 60 days delinquent in the first quarter of this year, compared with 0.78 percent in the first quarter of 2009. Experian hadn’t released second quarter data at press time, but analysts said the trend will hold as long as interest rates stay low. “Consumer spending is still very conservative. People aren’t going hog wild like they did before the recession,’’ said Lacey Plache, chief economist for the auto information site Edmunds.com. Here is what buyers with various credit scores can expect if they’re shopping for a new or used car, and the estimated monthly payment, excluding sales tax, on a five-year loan if they trade in a car worth $5,000 for a new, fully loaded $24,775 Toyota Camry sedan. Super prime (740 and up): Loan rates average 3.2 percent for a new car and 4.4 percent for a used car, according to Experian. A super prime buyer can expect to pay $357 per month for the Camry. Prime (680-739): Loan rates average 4.5 percent for a new car and 6.4 percent for a used car. A prime buyer can expect to pay $368 per month. Nonprime (620-679): Loan rates average 6.5 percent for a new car and 9.5 percent for a used car. A nonprime buyer can expect to pay $386 per month. Subprime (550-619): Loan rates average 9.9 percent for a new car and 14.4 percent for a used car. A subprime buyer can expect to pay $419 per month. Deep subprime (549 or less): Loan rates average 12.8 percent for a new car and 17.9 percent for a used car. A deep subprime buyer can expect to pay $447 per month. Auto loans suffered a similar fate to home mortgages during the financial crisis. When banks sustained losses and

tightened lending requirements, the average credit score for new car buyers rose nearly 20 points to a high of 776 in the first quarter of 2010. Standards have been loosening ever since, but only now are they approaching pre-recession levels. The average credit score for a new car buyer in the first quarter of this year was 760, while the average score for a used car buyer was 659. The loosening standards are good news for the auto industry, which has seen a steady recovery despite bumpy economic news. U.S. car and truck sales are expected to climb as high as 14.5 million units this year, up from a 30-year low of 10.4 million in 2009. That’s still well below the heady days of the mid-2000s, when easy credit drove annual sales to 17 million, but analysts say the growth rate this time is healthy and sustainable, with consumers making better financial decisions. Buyers also have more options. In 2010, General Motors Co. bought AmeriCredit Inc., a Texas-based company that specializes in subprime lending, because GM’s main finance company was unable to risk taking on subprime buyers. As a result, 8.2 percent of loans for GM vehicles went to subprime customers this spring, nearly double the number before the AmeriCredit purchase. The average for the auto industry is 6 percent. GM says subprime loans, if managed properly, are good for business. “The recession created an awful lot of new subprime buyers, but it doesn’t mean they’re a bad credit risk,” spokesman Jim Cain said. Some are sounding the alarm about the easing of credit standards. In a note to investors Tuesday, Moody’s warned that the subprime auto lending market is seeing the same kind of heated competition and poor underwriting that drove unexpectedly high losses in the mid-1990s. Moody’s said loan performance has been strong over the past few years, but lenders should beware of weakening standards in order to increase profits and market share.

BY DEE-ANN DURBIN THE ASSOCIATED PRESS

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Oklahoma Dealers Resource Oct/Nov 2012