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OIADA, P.O. Box 6905, Moore, OK 73153 PRSRT Standard U.S. Postage


DALLAS, TEXAS Permit No. 2079

Change Service Requested

• DAA Named Auction of the Year • Member News • Inventory Acquisition 101

Happy Holidays

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MAGAZINECONTENTS 04 Member News 12 Economic Outlook 20 DAA Named Auction of the Year

ADVERTISERSINDEX 71B Auto Auction..................... Inside Back Cover ADESA .............................................................15 Albright Insurance .............................................. 7 5 Dealer’s Auto Auction of OKC............ Back Cover Jordan Insurance................................................. 9 Loftis & Wetzel Insurance .................................17 . .................................................16 Manheim North Texas.............. Inside Front Cover Protective...........................................................11 SmartAuction.....................................................13 United Acceptance ...........................................19


EMAIL: 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




OIADA BOARD OF DIRECTORS PRESIDENT Chris Goad Regal Motors 3515 N. May Oklahoma City, OK 73112 405-917-5800

CHAIRMAN OF THE BOARD John Easttom Auto Mart of Elk City P.O. Box 981 Elk City, OK 73648 580-225-1100

NAAA Alert - Take Action! Support Legislation to Promote Charitable Donations of Vehicles NAAA asks you to send a letter supporting H.R. 860, Promoting Charitable Donations of Qualified Vehicles Act of 2011. Seven years ago, Congress changed the tax rules governing car donations. In the first year after the law changed, the IRS reported a 67 percent decline in the number of vehicles donated to charities. The current law does not allow for a tax deduction until a vehicle is auctioned and then only for the auction sale price. The proposed legislation, H.R. 860, would allow tax deductions based on fair market value up to $2,500 and require an appraisal over that threshold. This bill would maintain IRS reporting requirements for both taxpayers and charities without scaring away donors. NAAA urges you to take action by sending a letter to your Congressman asking them to support H.R. 860

SECRETARY/ TREASURER Bruce Beam Dealers Auto Auction of OKC 1028 S. Portland Oklahoma City, OK 73147 405-947-2886

VICE PRESIDENTS John T. Longacre, IV Taft Motors, Inc. 722 S. Linden St. Sapulpa, OK 918-224-7700 Julian Codding Reliable Motors, Inc. 9201 S. Shields Oklahoma City, OK 405-912-5000 Monte Shockley Shockley Auto Sales 2605 N. Broadway Poteau, OK 74953 918-647-3999 Glenn McDaniel I-35 Credit Auto 1113 SE 51st St. Oklahoma City, OK 73129 405-670-4100 David McQuerry McQuerry Motors, Inc. 1302 N. Harrison St. Shawnee, OK 74801 405-273-8171

OIADA CONTACT INFO Primary Number (OKC): 405-232-2947 Toll Free: 800-346-4232 BUSY SIGNAL? The 405-232-2947 number is designed to roll over to any of four other lines in our office, but has recently not been working correctly. If you encounter a busy signal at the 232 number, please call the 800 number or any of the following:

405-799-7116 405-799-1113 405-799-8115 405-799-3759 For your convenience, we have recently added a toll free fax number: 877-804-3449.


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OIADA MEMBER NEWS The OIADA is first and foremost our members – independent business people working hard and being successful in the used car industry. As the Thanksgiving season approaches, the staff at OIADA wants to express our sincere appreciation to each and every one of our individual members – not only for your contributions to the association, but also for the positive impact you have on your industry and in your communities. Following are updates on a few of our individual members. By ADR Staff

• Longtime OIADA members Carolyn and Floyd Orr of 81 Auto Auction in Chickasha announced their retirement following the regular sale on August 25, 2011. Carolyn, Floyd, and their daughter, Brandy Kalami, have successfully operated 81 Auto Auction since 1996. The auction has been a regular place for dealers to buy and sell on Thursday evenings.

Carolyn and Floyd hope to spend some of their time volunteering to help people dealing with national disasters while Brandy is realizing a lifelong dream of attending medical school in the near future. We send our sincere thanks to the Orr family for their many years of service to dealers and their support of the OIADA over the years. Best wishes for a wonderful future.

• Bob Bingham, owner of Sports and Imports in Tulsa, was recently honored with a plaque from OIADA recognizing his 30 years of continuous membership in the association. Bob has long been an asset to the industry and we salute him for his dedication and support.

• Morgan Elizabeth Skaggs is the 2011 recipient of the OIADA scholarship. She is the daughter of Jeffrey and Kenda Skaggs of Competition Auto Sales in Sand Springs, Okla. Morgan graduated from Metro Christian Academy with a 4.15 GPA. She is a member of multiple music and track and cross country clubs as well as the Oklahoma and National Honor Societies. Morgan has been recognized as Student of the Month. She is on the Principal’s Honor Roll and Dean’s Honor Roll, and is a National Young Leaders State Conference Alumna. She has received numerous band and music honors. Morgan’s community service projects include performing music at the Hall of Fame Drive, Shoe Drive for Cambodia, Just A Second African Well Building Fundraiser, and the National Honor Society Morrow Project. She has also participated in sending letters to soldiers, made gifts for Children’s Hospital, donated blood, baked cookies for janitors, participated in trash pickup, volunteered at the Tulsa Dog training club and served as a volunteer at band contests. Morgan said, “Pursuing a college education is extremely important to me. My passion is to help people. Majoring in pre-med will allow me to enter a field where I can help people. Music can also help people by soothing them. I am not wishing to pursue a college education to make ‘X’ amount of money; I am simply wishing to change the world. In the fall of 2011, I plan to begin a double major, consisting of music performance and pre-med, at the University of Tulsa.” Heads up world – here comes Morgan. We wish her the best.

OUR DEEPEST SYMPATHY • We regret to inform you that Pat Hays notified us that his father, Stroud used car dealer Hale Hays, passed away August 2, 2011. Hale, owner of Best Little Car Lot in OK, was a long time OIADA member and a pillar in his community. Hale was born in Van Buren, Ark., November 3, 1916, and grew up in southern Oklahoma. He graduated from Pauls Valley High School and received his degree in business from Oklahoma City University, where he played football. Hale was a true American and when the U. S. entered World War II, he enlisted in the Army Air Corps and trained to be a B-29 pilot. Before he was shipped overseas, he was assigned to Kansas to train others to fly. It was there that he met the love of his life, Kathryn, on a blind date. They married October 17, 1944. Hale served his country bravely in the battle against Japan. After the war, Hale and Kathryn settled in Oklahoma City, where he joined his father in the trucking business. In 1950 they moved to Stroud, and eventually Hale left the trucking business and found his true calling as a career car salesman. Hale and Kathryn enjoyed 59 years of marriage before her death. Hale cared for people in a way that sometimes overrode good business sense. Many have been touched by some secret kindness where Hale loaned money, made an encouraging phone call, sent a flower, loaned a car or helped the helpless. At 94 years and 9 months of age, Hale still loved the car business and preferred that to retirement.



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• G etting the most out of repos the second time around

We Meet Again






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No one wants to repossess a car or have one repossessed. Repossessions are an unfortunate part of the auto sales industry that is painful for both the consumer and the dealer. They are also an unfortunate business reality for the independent dealer who finances his cars. So when it does happen and a car comes back to a dealer, the question for the dealer then becomes, “How do I make the best of a bad situation by effectively remarketing this vehicle?”

Step One: Understand the individual

situation of each consumer, his contract with you and your local laws. Often when people come upon hard financial times, they make every effort to work through the situation with their creditors. This can be of benefit to both them – and their credit history – and the dealer. There are different ways dealers can handle these past-due situations. Laws on these vary from state to state, so check laws in your local area for a complete definition. A voluntary surrender is when the consumer takes some responsibility for the debt he owes. He voluntarily brings the car back to the dealer with the understanding he is still responsible for the balance due. This can still have a negative effect on credit history for the consumer, but not as much as a repossession. Repossession occurs when a consumer cannot or will not make payments in a timely manner or stops making payments at all. The dealer or creditor will, and often is legally obligated to, contact the consumer to try to arrange for payment. If this is not possible and the consumer does not want to voluntarily surrender the vehicle, the creditor has the right to take the vehicle from the consumer’s property and remarket it to obtain the balance owed. Any money made in the resale of the vehicle is applied to the debt owed and the consumer still owes any outstanding balance. Renunciation or abandonment is the relinquishing of any interest, claim, right or possession of the vehicle, with the intent of never again resuming the right of possession. Dealers or creditors will often offer renunciation to good customers who have taken care of the vehicle, but simply can no longer make the payments. Those vehicles must be written off by the finance companies as losses, but can often be resold at a higher value because of the good condition.




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For many dealers, the ultimate goal in most situations is to help these consumers stay in the vehicle and work with them on a payment plan. “It is always better for us and better for the customer to help them stay in their vehicle and stay current on their payments,” said Brandi Noegel, president of Noegel’s Auto Sales in Starke, Fla. “Sometimes there has been an illness or other matter and they just fall behind. If we talk to them and find out the situation, we try to work with them. “Often, however, there comes a point when you just have to take a vehicle back.”

Step Two: Inspect repossessed cars for

damage and other issues. Repossessed cars can be returned in a variety of conditions – from needing a lot of repairs and cleaning to requiring very little extra work. The cost of reconditioning must be factored into the potential selling price. “There is a general rule of thumb that reconditioning should not exceed a maximum 10 percent of the value of the car,” said Joe Lescota, chairman of the Automotive Marketing Division of Northwood University and the instructor of the NIADA’s Certified Master Dealer course. “That is at the high end. The exception to that rule might be if it is an unusual car and there are not many out there of that type. You might be willing to spend more on that car because the market will allow it. “You should look at any work done as a potential investment, not an expense, and determine if that is worth it on resale.”


Step Three: Decide how to remarket the

vehicle. Legally, repossessed cars must be sold at true market value, which may depend on the market in which you are located. Dealers should use that figure and consider the cost of any potential work required to determine how and where to resell the vehicle. Depending on the condition of the car, you can sell it at a wholesale auction, recondition and sell it on your lot or, if the vehicle is in extremely bad condition, sell it for salvage. Although in past years dealers mostly sent repos to auction, with the challenges of finding good inventory today, many dealers are now taking a second look at some repossessions as good sales for their lots. “Before, dealers would recycle and sell only about a third of what they took back,” said Ken Shilson, president and founder of the National Alliance of Buy Here-Pay Here Dealers. “They could be more discriminating. Now that number

is almost double that. It is often better to sell their own repos to find cars they can work with.” “I look at the condition of the car, the mileage and the make and model,” said Fran Cavenaugh, chief financial officer for Don Cavenaugh Motors in Walnut Ridge, Ark. “If it is in pretty good condition and is a good inventory piece for us, we will put it back on the lot. If it needs a lot of reconditioning and I don’t want to invest in that, we will send it to auction.” Even if a car is sent to auction, certain repairs or enhancements made beforehand can bring increased profit to the dealer. “We do clean some of them up before selling them to auction sometimes,” Noegel said. “You will definitely get more money at auction that way.” Tom Kontos, executive vice president of ADESA Analytical Services, referred to certain repairs to a repossessed car prior to auction as increasing the car’s “curb appeal.” “You have to be shrewd and know what is going to be beneficial,” he said. “You want to do light reconditioning. If it means replacing a crankshaft, then maybe that might be too much of an investment. But if it means only replacing a battery or that type of thing so the car runs at auction, then that is worth it. The same goes for cosmetic issues. You may want to replace a damaged windshield so you can get the full price for that vehicle. A buyer will see the broken windshield and discount the value of the purchase by $300 and if you can replace it for only $200, then it is of benefit to you to replace it.” When considering repairs before auction, dealers should also take into consideration that work performed by major auction companies can often be done less expensively than by outside contractors because they work in volume. “Many Buy Here-Pay Here dealers do not have mechanic bays or body shops and have to contract this work out,” Kontos said. “You may have to pay full retail rates for the labor and the parts, and the auction has economies of scale. If you do see an opportunity to improve a vehicle’s condition before selling it wholesale at an auction, dealers should take advantage of the lower cost and economies of scale to put in some reconditioning work and get more money back when it sells at the auction.”

as other inventory that might be a more appropriate fit at another lot – either within their own dealership or within the network of independent auto dealers. “They need to do a better job of talking with each other to keep their inventories relevant,” Lescota said. “Say you are a dealer up north and winter is hitting. You may need more 4x4s, and a dealer in the south has some. You can work on a deal to trade inventory that meets everyone’s needs. Independent dealers are each others’ best resources. Not utilizing these relationships for business beyond meetings is not beneficial to their businesses.” Cavenaugh also looks within her own company for different places to retail these cars. Her company has six lots, three of which are Buy Here-Pay Here. This allows her to target lots with particular inventory needs with any appropriate returned vehicles.

Thinking Outside the Box for More Sales

reasonable manner.” The car does not have to sell for the highest price possible, but a price far below fair market value may indicate a sale was not commercially reasonable. This may depend on sales practices in your area.

As inventory continues to tighten and the economy remains uncertain, dealers are encouraged to look for other ways to remarket any repossessed cars, as well

Legal Issues

The most challenging part of dealing with repossessions is having a good knowledge of your state’s laws and regulations. Each state differs on how repossession sales are handled and every dealer should have a thorough understanding of the laws in his state before handling any repossessions. It is important to follow all laws and proper procedures to avoid costly legal disputes. In general, here are a few of the regulations from the Federal Trade Commission:

•to inform In some states, the creditor is required the consumer what will happen to the car (whether it’s sold at auction, on the lot, for salvage or to another dealer) in case the consumer wants a chance to purchase the vehicle back by paying the full amount still owed. This may also include paying the creditor’s fees related to the repossession such as storage, preparation for sale and attorney fees.

•lawsSome states have consumer protection that allow the consumer to reinstate the loan and reclaim the car by paying the past due amount plus the creditor’s repossession expenses.

•mustAnybe resale of a repossessed vehicle conducted in a “commercially



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•consumer If a repossessed car sells for less than the owes, it is called a deficiency. The

consumer is still liable for this amount, plus any other potential fees stipulated in the contract. A dealer may have to sue the consumer to receive this deficiency payment.

•amount If a repossessed vehicle sells for more than the still owed by the consumer, the dealer must pay the consumer the extra funds, once the outstanding debt and any other expenses are paid. Repossessed, voluntarily returned and renunciated cars may be an unfortunate reality in the car business for both the consumer and the dealer, but when they do occur, they may help dealers keep inventory moving in tough times. “The supply of good used cars is down and dealers have to look for other ways to supply the cars they need,” Shilson said. “I believe our industry is getting smarter, our dealers are shrewd. They are always looking for solutions to current situations. Now they are looking for ways to get the cars they need to sell and market them in an effective way. If we can take these cars that are holding people back financially, recondition them and get someone else into a better car than they may have otherwise been able to get into, we are helping business and our customers.”

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


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Kelley Blue Book Warns of Fake Website Scam Kelley Blue Book, a leading provider of new car and used car information is warning online car buyers of a scam using a fake Kelley Blue Book website. The scam attempts

to solicit funds from buyers through an escrowbased, guaranteed buyer-protection program something Kelley Blue Book does not offer. Kelley Blue Book warns that any escrow-based consumer-to-consumer service or buyer and seller protection program offered under its name is a scam. Car shoppers should be aware that imitation websites look similar to the actual kbb. com and they should be cognizant of the domain name (URL) and email address (view the actual address, not the display name) provided by the seller. Car shoppers that encounter this type of offer from online sellers are strongly urged to report the seller to the Internet Crime Complaint Center at . For tips on how to protect yourself from phony online car-buying scams or fraudulent buyer protection programs, visit the FBI website at car_081511/car_081511 . Unveils a New App for the iPad has announced a new app for iPad, designed to make new car shopping entertaining and engaging. The app,

available for free download from the App Store features, highresolution video and photo catalogues, giving users access to information on hundreds of new vehicle models. “We set out to create an experience that customizes new car information for the unique ways iPad users interact with – and not simply adapting our popular app for iPhone,” said Sharon Knitter, senior director of mobile technology. Knitter said shoppers tend to use their phones for on-thego shopping, gathering information on price, availability and inventory, while iPad users concentrate more on photos, videos and reviews and specs, “which is why our new app for iPad specifically focuses on those features,” she said.


• Unbiased car reviews from the team of expert editors • “My Showroom” feature, enabling users to save vehicles for later review and comparisons • Facebook and Twitter integration, allowing users to post vehicles to social networks • Side-by-side comparison of up to three vehicles • Ability to browse the site’s inventory of new and used vehicles through a link within the app for iPad or via a Web browser

Extended Service Contracts and Dealer Controlled Financing The sale of extended service contracts, or vehicle service plans as they are sometimes called, has been a staple of independent and franchise dealers for many years. But most dealer-controlled financing dealers (BHPH and LHPH) have been reluctant to sell them for one major reason – any money the customer spends on an extended service contract typically reduces the amount of money the customer has available for a down payment on the vehicle. That means the dealer will have more money at risk in the contract for a longer period. The only alternative available in the past was to include the extended service contract in the amount financed, extending the term of the retail finance contract, raising the customer’s payment and, again, putting the dealer at risk for a longer period of time. A good extended service contract, however, can provide a DCF dealer with a number of advantages. Various studies estimate that approximately one-third of all charge-offs are the result of mechanical issues with the vehicle. We also know that an equally high percentage of delinquent accounts are caused when the customer is unable or unwilling to make the car payment because of mechanical issues with the vehicle. A good vehicle service contract can eliminate

many of these problems, reducing collection expense, delinquency and charge-offs. Some DCF dealers typically end up adding repair expenses to accounts when the customer cannot afford to pay for repairs themselves. We have all heard the saying, “When the car stops running, the customer stops paying,” and in order to avoid this it is often in the dealer’s best interest to keep the vehicle running. But adding repairs to the account increases the amount of the dealer’s cash invested in the deal and lengthens the amount of time until repayment is complete. Again, a good extended service contract can eliminate some of these situations. Using extended service contracts paid for by the dealership like a warranty can be a valuable marketing tool. Offering a 12 month/12,000 mile or 24 month/24,000 mile service plan can set you apart from your competition. Customers believe cars sold with warranties are better than cars sold without warranties and will choose to do business with dealerships that warranty or protect their vehicles. Some DCF dealers maintain a fund for paying for policy repairs by setting aside a certain portion of the profits of each sale. Finding an extended service plan that meets your needs can actually reduce this expense and eliminate

the paperwork it takes to administer such a program. Some dealers will provide a basic or shorter-term plan, then upsell the customer on a more comprehensive or longer-term program and use that upgrade to produce additional profit in the deal. The secret to using extended service contracts in a dealer controlled financing dealership is finding the right contract. There are very few extended service contracts designed specifically to meet the needs of the DCF industry. Plans with decent coverage for vehicles with higher mileage at a reasonable cost can be difficult to find. Plans that can be paid for on a monthly basis so dealers do not have to either reduce the amount they collect as down payment or finance the cost of the contract are even more difficult to obtain. The search to find the right warranty for your DCF operation can be a difficult one, but they are out there. Extended service contracts can assist you in both improving sales and reducing delinquency and charge-offs. Do your research carefully and diligently and you can find plans that will boost your dealership’s performance and help your customers at the same time. The right extended service plan is truly a win for both parties. BY AL MOSHER



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EconomicOutlook Despite the high hopes for 2011, this year has proved to be a trying time for American consumers and investors alike.

A year that was supposed be a time of growth and recovery has turned out to be anything but, and current economic data shows signs that the U.S. economy may again be slowing down and is even threatening a second recession similar to the 1979-81 U.S. “stagflation,” only at a more severe level and on a global scale. KEY AUGUST/SEPTEMBER DATA

Positive Signs


U.S. productivity remains among the highest in the world, while U.S. non-financial corporations’ cash reserves remain at nearly $2 trillion. The August Conference Board Global Leading Economic Indicators Report shows the U.S. and China as positive at 0.3 percent and 0.5 percent, respectively, while Europe was down one percent. Automobile, SUV and light truck sales were up 1.2 percent in August relative to July 2011 and up 7.5 percent relative to August 2010. More than 6.5 million units were sold during March, April, May, June, July and August, the largest six-month cumulative level since the 2009 Cash for Clunkers program. Consumer confidence declined dramatically from July’s level of 59.5 to an August of 45.2, but showed a slight improvement in September 2011 at 45.4. Average disposable income was up slightly in August marking the tenth consecutive month that disposable income has increased. Mortgage interest rates were at near-record lows and the dollar index has been moving up consistently since August, increasing more than 6 percent.

Negative Signs

The Dow Jones Industrial Average fell 519 points – 4.3 percent – in August and was down 205 points in late September. The unemployment rate was at 9.1 percent again in August, with non-farm payroll unchanged and private sector employment up 91,000 for the month. The U.S. continues to have one of the highest corporate tax rates in the world, with an average rate of 39.27 percent, and U.S. companies hold more than $1.2 trillion overseas as a result. While gas and oil prices have eased slightly over the last couple of months, the threat of a global inflationary period is still very real with the potential for “stagflation” and recession stronger than ever.

Current Issues

One thing you can say about people in the auto industry is, “They sure are a positive bunch. Those car guys never have problems, they only have opportunities.” But one of the opportunities we have a problem with might be the lack of floor traffic. It has been a

challenging year with the “opportunity” expected to remain about the same next year. What will your strategy be to build traffic that might not come or, quite frankly, might not even be there due to harsh economic realities? Will you advertise more? Will you tell your people to be more aggressive and make more phone calls? What if these efforts didn’t equate to more floor traffic? What would happen if instead of advertising more (to a market that won’t respond), your strategy was instead to be more effective with the floor traffic you receive each month? It’s not a surprise – only a sad fact – that in North America the number of potential customers, or ups, that are sold on the first visit to a dealership still hovers at an amazingly low 19 percent. That means 81 percent of potential customers that visit a particular dealership for the first time do not make a purchase. Closing only 19 percent of potential buyers that come into a dealership places a tremendous amount of pressure on daily operations. Here’s an example. Let’s say a dealership wants to sell 49 vehicles in a month. Assuming a 19 percent closing rate on fresh ups, the dealership would have to generate 257 fresh ups that month, which translates to no less than 10 fresh ups per day (assuming a six-day work week). What would happen if sales managers and salespeople truly focused their efforts on improving their counseling skills with customers, their product knowledge skills, rapport-building skills, communication skills, feature presentation and value-building skills, and by doing so increased the overall closing percentage from 19 percent to 26 percent? Here’s what would happen: If it wanted to sell that same 49 vehicles in a month, the dealership would only need to generate 188 fresh ups that month – seven per day. Just by doing a little better job and taking perhaps a little more time with each guest. The secret to a successful sales month is not in the ability to generate more floor traffic but rather to be more effective with the floor traffic you already have. While the reality of today’s economy is that a dealer can’t control the quantity of floor traffic that enters the dealership, he certainly can take control of the quality of the selling process when working with a limited quantity of floor traffic. BY TIMOTHY NA SH AN D JO E LESCOTA NORTHWOOD UNIVERSITY

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



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Drowning in paperwork

Expert Help Allows Dealers to Stay Afloat in Sea of Regulations Buying a car can be a lot of fun for both the seller and the buyer. The seller gets to make

money, meet the public and experience the thrill of the chase. The buyer gets a new car, transportation to make his lifestyle possible. But these days, car deals come with a lot of paperwork. All those forms are more than simply a buzz kill for buyers and sellers. They are an important part of the transaction, one that can end up costing a dealer hundreds of thousands of dollars – or his livelihood – if not filled out properly. Tom Hudson, senior partner for the law firm Hudson Cooke in Hanover, Md., and an expert in the legal issues auto dealers face, said dealers need to understand that the forms and regulations covering retail auto sales are specific. His advice:


“The biggest mistake I see is when dealers have their contracts written by lawyers who aren’t experts in retail auto sales,” Hudson said. “I just spent the morning reviewing 30 documents that are used by a car dealer who had just acquired my services. Because I am an expert in the field and know what to look for, I spent a couple of hours reviewing his paperwork. I will be able to advise him on what he’s doing right and what he’s doing wrong. As an attorney, I get paid. If that dealer didn’t want to pay my rate and just sent his contracts to another attorney who wasn’t an expert, but charged less, he’d be making a mistake.” While that other attorney might be a great guy and generally competent, Hudson said, he doesn’t know what to look for. So even if that lawyer is less expensive, he might spend 10 hours reviewing documents instead of just a couple. That costs more. Plus, the dealer would be getting legal advice from someone who isn’t an expert in retail auto sales. Al Mosher, senior consultant for Constellation Automotive Software in Sarasota, Fla., agrees with Hudson. His company sells the appropriate software to dealers to help them run their operations, and trains dealers how to better run their lots. “We offer various levels of consulting,” Mosher said, “but one of the things we talk about is the sales process, the collection process and if the dealership is in compliance with all the rules that regulate these processes. That means looking at the paperwork. One of the big regs is the privacy notice, and you’d be surprised at how many dealerships don’t have one in place.” Mosher said he begins his lessons on the importance of having the correct paperwork to comply with federal and state regulations with horror stories. He mentions one dealer who got hit with fines totaling $2.8 million for improper collection practices. He tells the story of a dealer who tried to get around reporting cash transactions of more


than $10,000 by unsuccessfully attempting to split a car sale into two transactions, each less than the $10,000 threshold for reporting. The dealer didn’t get away with it, winding up with $250,000 in fines while having to forfeit $169,000 in his bank account as well as losing the title to 10 cars. A lot of the regulations passed in the last 10 years aren’t only aimed at protecting consumers from dodgy dealers. Many of the regulations were security measures passed as a result of the terrorist attacks of Sept. 11, 2001. So not reporting cash transactions or doing the proper background checks as required by law could mean more than civil fines – they could result in criminal charges. It’s far better to be safe than sorry.

Hudson said he’s seen contracts and paperwork that contradict each other. He knows of a dealer who was using forms that defined what a spot delivery was in three places – and the three definitions didn’t match up. Try winning a lawsuit that has been filed by a buyer when your own paperwork is in conflict with itself. Mosher said there are generic privacy notice forms dealers can buy. Wwhile it’s good to have a privacy form, federal law requires that the privacy form to be about your dealership’s procedures. If a dealer has copied the forms used by Joe’s Auto Sales down the street, that could be trouble, because Joe might have different procedures and his form is no good for your dealership.


No, paperwork isn’t a lot of fun. Yes, paperwork is tedious. Yes, paperwork is intimidating, and no, you can’t ignore your paperwork responsibilities. A lot of dealers have left the business because of the paperwork grind, Hudson said. But for dealers who decide to stay in the game, all is not lost. There is help. First, dealers can belong to their state independent automobile dealers associations (IADAs). The IADAs are there to help members sell more cars. The National Independent Automobile Dealers Association makes use of legal experts in retail auto sales, such as Keith Whann. This expertise flows down to the state associations and through them to their members. Rose Morgan, co-executive director of the Oklahoma IADA, also sells compliance forms for Automotive Dealer Resources (ADR). She is acutely tuned to the needs of dealers. ADR forms are designed to be easy to use by dealers, who most often aren’t lawyers themselves. “Our goal is to make the forms simple and easy to use,” Morgan said. “We have videos on our website to walk people through the process.” Hudson said he advises Reynolds and Reynolds on its forms. Owens and Mosher, among others, are in business to help dealers meet their legal obligations when it comes to paperwork. “The days of the lone dealer operating by himself with one employee are pretty much gone,” Mosher said. “There are a lot of reasons for that, but one of them is because of paperwork requirements. If you’re smart, you won’t try to go it alone. There are experts out there who will help you. Seek out their advice and services.”

Vic Owens, owner of Wholesale Forms, said he’s been in the car business for 37 years and has been selling forms since 1987. His inventory includes warranty stickers. He said having stickers on vehicles explaining what an “as is” sale is and what the other warranty issues are is just smart. Buyers know up front what their rights are and it takes pressure off the sales staff. But having the wrong form can be just as bad as having no form. That’s why Owens follows what’s going on at the Federal Trade Commission. Things change, and form providers have to stay on top of those changes. Staying on top of regulations means staying on top of what the states are doing. There are 50 states out there, not to mention the District of Columbia. Different states have different rules. When buying forms, it’s critical that dealers buy from someone who knows what that dealer’s state regs are. Owens knows of dealers in California, which has a large Hispanic population, who use contracts that mix Spanish and English. He believes that’s a bad idea. Better to have a Spanish contract and an English contract, instead of one that mixes both languages. Being paperwork-compliant goes beyond having the right contracts, Mosher said. When he speaks with dealers, he tells them many of their business operation procedures need to be written down. “The biggest thing I would say about paperwork is that many dealers don’t understand how much of their compliance plan must be in writing,” Mosher said. It’s not enough that the dealership follow the rules. That procedure must be put down in writing. Graham-Leach-Bliley requires a written procedure to be kept on site.”


“Dealers buy these forms from various sources, but don’t bother to read them, “Mosher said. “They don’t know what their own contracts allow. Talk about a recipe for trouble.”



Mosher said that in the past five years alone, there have been numerous changes in regulations. Dealers can’t just buy forms or attend a training class and think they have things covered. Regulations change, often. CONTINUED ON PAGE 16



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“People talk about when Congress passes a law,” Mosher said. “That’s done with great fanfare and much publicity. But once the law is passed, it drops out of the news. It might take a couple of years before the first regulations resulting from the passage of a law are put on the books. There’s usually very little fanfare when a new regulation is put into place.” Never mind new regulations. Mosher has come across dealers who aren’t compliant with regulations that have been on the books for decades. He said he often sees dealers who don’t have the right FTC buyer’s guides. That’s been a requirement since the 1980s, and if an FTC inspector happens to make an inspection, that could end up costing a dealer $16,000 per vehicle with an improper FTC buyer’s guide. “I know what a lot of dealers say,” Mosher said. “There aren’t a lot of inspectors, what are the odds of me being caught? I say there are inspectors out there. They tend to go in waves, and dealers get caught. Would you like to be the dealer who sold a car to a terrorist or criminal and didn’t do his due diligence? I wouldn’t.” Morgan said it’s a bad idea to have the attitude of “If the government fines me $100,000, good luck trying to get it.” It’s much better to think, “I’ll be in compliance and avoid trouble.”


“I don’t see paperwork getting simpler,” Hudson said. “Ignoring the problem won’t make it go away.”

Dealers really do have to be careful. Hudson listed some of the federal regulations that require their own paperwork. They include: • The Patriot Act • The Truth in Lending Act, regulation Z • The Equal Credit Opportunity Act, regulation B • The Consumer Lending Act, regulation M • The Fair Credit Report Act • The Federal Trade Commission Used Car Rules • The Magnuson-Moss Warranty Act • Federal odometer regulations • Gramm Leach Bliley • The FTC privacy notices that go with Gramm Leach Bliley • RS 8300 Cash reporting rules • Do Not Call Regulations • Do Not Fax Regulations • Do Not Email Regulations • Federal Arbitration Regulations. “And that’s just federal rules,” Hudson said. “Your state might have its own set of rules and regulations you have to follow. “This is serious stuff that can cost a dealer his business. But there is help out there for dealers and they really should take advantage of what’s out there.” Paperwork is inevitable. Get used to that fact and a dealer’s life becomes much easier, especially since there are places dealers can go to get help. Paperwork will never be fu n, but it doesn’t have to be a burden a dealer takes on by himself.

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



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Pyle Takes Over as NAAA President After 22 years as a member of the National Auto Auction Association, Charlotte Pyle was excited to take on the role of president during the 2011 convention in Chicago in September.

Pyle, who owns Mountain State Auto Auction along with her husband, Joe, said Joe and his father were instrumental in getting her involved in the industry. “My background to the auction world began in the antique estate business. My husband Joe is an auctioneer and operated a business liquidating antiques and household furnishings for families that lost a loved one or just wanted to downsize,” she told Auto Remarketing. “His father owned a latemodel used-car dealership and attended auto auctions. He introduced Joe to a gentleman in Fairmont, W. Va., who operated a small twolane facility that had just lost their auctioneer. At the time, we were dating, so I rode along with him just to see what it was about, having never attended an auto auction. “The third week into this job, the clerk didn’t show up so they put me on the block with Joe. We continued working this auction

for a few years together, which opened more doors for Joe in the auto arena.” Eventually, that auction closed. Seeing the need for a facility in West Virginia, Pyle and her husband opened a two-lane auction. The couple joined NAAA to expand their auction business from dealer-only to also include fleet/lease. “As any good auction owner does, we cased the [NAAA convention] halls and receptions for a few targeted representatives,” she recalled. “Having found one from Tupperware, we approached him. … After giving the normal sales pitch, the gentleman said, ‘Put your card in my coat pocket, and I will send you some cars. My hands are greasy, and I don’t want to ruin your card from eating these finger foods.’ “As we walked away, we were thinking there is no way in the world that will ever come to fruition. The very next week we got our first pickups from Tupperware and had a wonderful working relationship with that company. Don’t we all wish it were that easy today!” Pyle quickly became involved in NAAA,

taking on a leadership role – with a little help from her friend, Barbara Wheatley. During Pyle’s second trip to the convention, Wheatley asked her to take notes for the Independent Committee since Wheatley was also scheduled to attend another meeting at the same time. “After the meeting, I met her in the hall and tried to give her the notes,” Pyle recalled with a grin. “She sweetly asked me to present them at the national board meeting. After my presentation, the meeting came to an end and Barbara said, ‘Charlotte, that was a wonderful job. You are now the independent secretary and will need to do this for every meeting. Congratulations!’ I still laugh at the way my sweet Southern belle connived me.” Pyle has served on a variety of NAAA committees over the years, but the assignment closest to her heart was co-chairing the Independent Auction Group for 10 years. In addition, she was on the founding committee of the scholarship foundation, convention committee, the mentor program and has served as president and board chair of the Southern Zone. BY JENNIFER REED

Jennifer Reed is Auto Group Editor for Auto Remarketing


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USED MOTOR VEHICLE AND PARTS COMMISSION REPORT Following convening of the meeting and approval of the minutes of the previous meeting, chairman John Longacre called on director John Maile for the director’s report. Maile began by stating Jim Holman, with The Car Store in Oklahoma City, had been appointed to replace Dan Mullins on the commission on an interim basis so he can act prior to Senate confirmation. Mr. Holman is expected to attend the October meeting. Maile advised the commissioners that the expenditures report was included in the agenda packet, but the financial statement was not available. That statement will be emailed to the commissioners when it’s available from the Office of State Finance. The commissioners approved the expenditures report as presented. Deputy director Kenneth Whitehead’s report indicated commission staff had completed 20 inspections for the period. The staff handled 33 written complaints, 10 of which were title issues. Eleven had to do with contract violations, five were related to mechanical issues and there were seven complaints of a miscellaneous nature. The staff held seven informal hearings, one of which resulted in a fine of $400 against Heartland Motors for late titles. Final disposition of the other six is pending. The staff was successful in getting an injunction granted in district court against Phillip Savage, an automotive dismantler from Sequoyah County. The commissioners approved a consent agreement entered into by Judith Monks on behalf of The Back Forty, Inc., dba The Back Forty Mobile Homes, a licensed manufactured home dealer. The respondent failed to license Herbert Monks, who was working as a manufactured home salesperson. The failure to license occurred as far back as 2008 and resulted in a $2,000 fine. In addition to the fine, the respondent agreed to submit a salesperson’s application for Mr. Monks immediately. During discussion of a felony application, commissioners identified a need to perform follow-up reviews of felons who have been licensed, with the potential for putting some burden of responsibility on the employer to report inappropriate activities or terminations of employment in the case of a salesman. Commissioners indicated that for protection of the public, it would be appropriate for convicted felons to reappear before the commission if they change jobs or locations. Commissioners requested that the staff review the issue and provide recommendations to the commission. The commission education program had 23 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. Until further notice, these education sessions are being 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 your reservations.

REPORT OF CEASE & DESIST LETTERS ISSUED (These letters direct the individual or business to cease violations of laws or rules) ENTITY




Robert Brous Toss Claborn Delgadillio-Enrique Kahlil Delgadillio-Enrique Kahlil Robert & Karen Enriquez Shon Frazier J & R Equipment Glory Okunfulure John Perevra Abel Rodriguez Adrian Rojas RV Collection, LLC Jim Stadley Kim Thomas Kim Thomas Robby Winford

Used Dealer Used Dealer Rebuilder Used Dealer Used Dealer Used Dealer Used Dealer Insurance Pool Insurance Pool Used Dealer Used Dealer Used Dealer Used Dealer Rebuilder Used Dealer Insurance Pool

Hugo Lawton Stillwater Stillwater Del City Oklahoma City Oklahoma City Oklahoma City Edmond Oklahoma City Oklahoma City Claremore Oklahoma City Ada Ada Tulsa

8/02/2011 8/07/2011 8/10/2011 8/10/2011 8/15/2011 8/15/2011 8/08/2011 8/10/2011 8/10/2011 8/19/2011 8/15/2011 8/05/2011 8/10/2011 8/17/2011 8/17/2011 8/10/2011


These are complaints that have been resolved one way or another. They do not necessarily reflect any wrongdoing on the part of dealers. ENTITY


Ace Auto Salvage Oklahoma City Al’s American Auto Sales Tulsa Auto Select Oklahoma City Auto Showcase of Tulsa, LLC Tulsa Brad Fenton Motors of Poteau, Inc. Poteau Bryan’s Car Corner, Inc. Chickasha Budget Auto Sales Ponca City Crossroads Auto Mall, Inc. Oklahoma City David Stanley Chevrolet, Inc. Oklahoma City David Stanley Hyundai, LLC Oklahoma City Edmond Hyundai Edmond Eldorado Motors, LLC #2 Tulsa E-Z Pay Used Cars, Inc. McAlester Gaston Melon RV Collection, Inc. Claremore Hi-Tech Motors, LLC Tulsa I-35 Credit Auto Oklahoma City I-35 Sports & Imports Moore I-35 Sports & Imports Moore I-35 Sports & Imports Moore John Easttom Chev Dodge Chry Jeep Checotah Kar Spa Oklahoma City Lowest Price Auto Parts & Sales, Inc. Oklahoma City M & M Mobile Home Sales, Inc. Calera Mid-State Mfg Housing Corp. Purcell Momentum Chevrolet of Tulsa Tulsa Norris Auto Sales & Service LLC #2 Oklahoma City Oak Creek Home Center Tulsa Patriot Auto Sales Lawton Quality Autos of Ada, Inc. Ada Quality Autos of Ada, Inc. Ada Roberts Auto Center, LLC Pryor S & J Motors, Inc. Elgin West End Motors, Inc. Sallisaw



Miscellaneous Contract Contract Mechanical Contract Contract Title Miscellaneous Contract Contract Contract Contract Mechanical Title Contract Contract Title Title Miscellaneous Title Mechanical Miscellaneous Title Miscellaneous Contract Title Miscellaneous Mechanical Mechanical Title Miscellaneous Title Title

8/15/2011 8/01/2011 8/29/2011 8/01/2011 8/10/2011 8/30/2011 8/05/2011 8/05/2011 8/22/2011 8/18/2011 8/01/2011 8/09/2011 8/29/2011 8/08/2011 8/11/2011 8/23/2011 8/09/2011 8/24/2011 8/04/2011 8/04/2011 8/04/2011 8/22/2011 8/04/2011 8/23/2011 8/22/2011 8/29/2011 8/01/2011 8/01/2011 8/01/2011 8/10/2011 8/03/2011 8/23/2011 8/10/2011

LICENSES SUSPENDED OR ABANDONED The following licenses were suspended or abandoned: Auto Mart of Oklahoma, Sapulpa: Out of business, per investigator’s report Legends Auto Sales, Bethany: Out of business; change of ownership Nichols Auto Sales, LLC, Newcastle: Out of business; per investigator’s report T & M Auto Sales, LLC, Lawton: Out of business; per investigator’s report



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Justice Department Focusing on Lending Discrimination Financial institutions and lenders – including car dealers – can expect more scrutiny from the federal government. The

Obama Administration’s Justice Department has ramped up efforts to enforce fair lending laws, such as the Equal Credit Opportunity Act. In April 2011, it announced the formation of a new Fair Lending Unit within the Civil Rights Division. The unit is staffed with attorneys, economists and a mathematical statistician. In addition, it reported that the division’s Special Counsel for Fair Lending, a new senior career position in the Office of the Assistant Attorney General, has worked to ensure that fair lending issues receive immediate attention and high priority. The Justice Department works in partnership with other regulatory agencies, such as the Department of Housing and Urban Development, various bank regulatory agencies, and the Federal Trade Commission. In 2010, the division received 49 referrals from regulatory agencies of matters involving a possible pattern or practice of discrimination. That was more referrals than it received in at least the last 20 years. Twenty-six of those referrals involved

discrimination based on race or national origin. In contrast, from 2001 through 2008, the division received a combined total of 30 referrals involving discrimination based on race or national origin. The new Fair Lending Unit is focusing its

efforts on the entire range of activities in the market, from traditional access to credit issues – such as red-lining – to pricing, steering, reverse red-lining and other areas. Though much of its focus is on mortgage lending, the unit addresses discrimination in all areas

of lending, including unsecured consumer lending, auto lending and credit cards. In recent months, its efforts have yielded a record number of fair lending enforcement actions. Since the beginning of May, the department has resolved or filed seven fair lending actions dealing with alleged unfair or discriminatory lending practices. This is more than the department has ever filed in such a short time period. Several of the cases have involved allegations of discrimination based on race or national origin. One case alleged discrimination against women on maternity leave. The Division also announced two settlements and one resolution of alleged violations of the Servicemembers Civil Relief Act (SCRA). See the September 2011 issue of this publication for more on used dealers’ rights and responsibilities under the SCRA. Because of the housing crisis of recent years, banks and mortgage lenders are in the Justice Department’s direct line of fire at this time. As time goes on, however, and more of the mortgage lending issues are resolved, other lenders – such as auto dealers and third-party financers – may be targeted.


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Dealers’ Auto Auction Named NIADA Auction of the Year Bruce Beam, general manager of Dealers Auto Auction of Oklahoma City, is presented the NIADA Auction of the Year award from NIADA CEO Mike Linn (left) and NAAA president Jay Cadigan (right).

The OIADA Board of Directors is pleased to report that Dealers’ Auto Auction (DAA) of Oklahoma City has been named 2011 NIADA Auto Auction of the Year. NIADA chief executive officer Mike Linn presented the award to DAA owner Gary Smith and general manager Bruce Beam on September 22 at the National Auto Auction Association (NAAA) annual conference in Chicago. The NIADA began presenting its Auction of the Year award to an NAAA member auction and its general management team in 2008. The award is presented to an auction that demonstrates support of the used motor vehicle industry and the independent dealers who utilize the auction by providing the highest level of customer service, providing dealers with resources to enhance their business, displaying support to the state association and its dealer members through participation in dealer events, and promoting industry community involvement. The OIADA has been most appreciative of DAA for its significant support of the industry and the Association through the years. But as evidenced in the following nomination letter, in December 2010, Gary Smith and his staff handled an emergency situation in an exemplary manner, showcasing the extent of their dedication to serving not just the industry, but the people of the industry.

OIADA Board of Directors Nomination Letter A well-respected auction pays for association memberships and conducts membership drives. A well-respected auction even has smiling faces and capable employees. But once in awhile, an auction will do something that truly sets it apart. On the morning of December 23, 2010, Odell and Rose Morgan, longtime executive directors of the Oklahoma Independent Automobile Dealers Association, arrived at Dealers’ Auto Auction of Oklahoma City at 7 a.m. for the morning auction. Auction owner Gary Smith noticed something wrong with Odell and asked if he was all right. When the OIADA director didn’t respond, Gary asked Rose and he immediately checked for Odell’s pulse. There was none. Odell’s heart was in major trauma. Gary immediately began chest compressions and instructed staff to contact emergency personnel. Gary wasn’t the only one to jump into action at this critical moment: staff, auctioneers, dealers and ring men were there to assist on the spot while Gary continued chest compressions until the paramedics arrived. When they arrived at the scene, the staff and dealers made a row and held open the auction doors. Dealers’ Auto Auction of Oklahoma City can be described as nothing short of a well oiled machine. OIADA wishes to heartily nominate it for the NIADA Auction of the Year. Gary had the foresight to ask his physician many times how best to handle such a situation. Based on his knowledge, he was able to instruct staff on actions to take and they responded without question. They jumped into action, and they operated as if nothing else mattered. Dealers’ Auto Auction of Oklahoma City has always been adept at its game, but this time they saved a life. Odell went on to have quadruple bypass surgery on his heart followed by proton therapy on a tumor in his lung, and he is going stronger than ever now. Without the careful intervention of Gary and his staff, we cannot know what Odell’s fate would have been.

Federal Legislation

Federal Legislation of Interest to Dealers The following bills are a few of the pieces of legislation being considered by the U. S. House of Representatives and Senate that have a direct impact on the motor vehicle industry. For further information or text of these bills, Google the U.S. House or U.S. Senate bill numbers.

S.330, the Consumer Recall Protection Act of 2011 Prohibits a person from selling to consumers any covered product that is subject to a recall. Exempts from such prohibition the sale of a covered product that was subject to a recall because of a defect in such product if: (1) such defect was remedied prior to such sale; and (2) the seller of such product notifies such consumer of such recall, defect, and remedy. Defines a “covered product” to include a motor vehicle or replacement equipment, food, drugs, devices, cosmetics, a biological product, a consumer product, a meat or meat food product, a poultry or poultry product, and an egg or egg product. Defines “recall” for each type of covered product. Treats a violation of such prohibition as a violation of a rule defining an unfair or deceptive act or practice described under the Federal Trade Commission Act. Requires the Consumer Product Safety Commission to establish, maintain, and make available to the public a searchable list of covered products that are subject to a recall. H.R.860 and S.110, Amends the Internal Revenue Code – Charitable Tax Deduction Amends the Internal Revenue Code with respect to the charitable tax deduction for contributions of qualified vehicles (i.e., highway motor vehicles, boats, or airplanes) to: (1) set forth revised acknowledgment requirements for vehicles valued at $2,500 or less and vehicles valued at more than $2,500; and (2) revise the penalty for submitting a fraudulent acknowledgment. H.R.1449, the Motor Vehicle Owners Right to Repair Act of 2011 Requires the manufacturer of a motor vehicle sold, leased, or otherwise introduced into U.S. commerce to: (1) provide to the vehicle owner and service providers all information necessary to diagnose, service, maintain, or repair the vehicle; (2) offer for sale to the vehicle owner and service providers any related tool or equipment; and (3) provide the information that enables aftermarket tool companies to manufacture tools with the same functional characteristics. Exempts trade secrets, so long as the information is not disclosed to authorized dealers or service providers. Authorizes enforcement of this Act by the Federal Trade Commission and civil actions by state attorneys general. H.R.229, the Michael Jon Newkirk Transportation Safety Enhancement Act of 2011 Directs the Secretary of Transportation to withhold a graduated percentage of federal aid highway funds of states for FY2014 and thereafter that do not enact or enforce a law that requires the annual inspection of registered motor vehicles so that they meet or exceed state motor vehicle standards (including the operability of vehicle seatbelts and speedometers). H.R.164, the Damaged Vehicle Information Act Directs the Secretary of Transportation, through the National Highway Traffic Safety Administration, to issue a regulation to require persons who terminate a motor vehicle contract due to flood or water damage, collision, fire damage, theft and recovery, or any circumstance that adversely affects the fair market value of the vehicle to disclose information of such vehicle damage to the public. BY FEDERAL ADVOCATES, THE NIADA LEGISLATIVE LIAISON



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Cease and Desist Order Issued for Oklahoma City Car Note Investment Company In January 2011, the Oklahoma Department of Securities began an investigation into the activities of Buy Car, Inc., Invest In Car Notes. com, Inc., and associated individuals to determine whether provisions of the Oklahoma Uniform Securities Act of 2004 had been violated. The investigation focused on the possible offer and/or sale of securities by the two corporations. In August 2011, the department issued an Order to Cease and Desist in relation to the investigation. According to the Order, Buy Car Notes.Com, Inc. and Invest In Car are Oklahoma corporations controlled by Bill R. Thompson and David Harris. The Order finds that, beginning in March 2010, Mr. Thompson and Mr. Harris (respondents) solicited money from investors for the purchase of note purchase investments. The solicitations originated primarily from the Buy Car Notes and Invest in Car Notes websites and through a YouTube video presentation on the Internet. Neither Mr. Thompson nor Mr. Harris were registered in any capacity under the Oklahoma Uniform Securities Act of 2004. The securities allegedly offered by the companies were based on used car retail

installment sales contracts. The Order states the respondents offered investors 8.5 percent to 21 percent yearly returns, paid monthly, for the note purchase investments. The respondents represented that no work was required on the part of investors and that the note purchase investments were 100 percent guaranteed by the respondents. The respondents also represented that they would replace any note that defaulted with good, paying car notes, and there would be no effect on investors’ monthly income. A visit to the Invest In Car Notes website reveals much of the website now “Under Construction.” The “Risk Statement” page does, however, present a lengthy statement that includes the following: “You are purchasing secured quality used automobile notes, that is, a loan extended to an automobile buyer. These notes are secured by the car that is sold.” The page goes on to say, “You will own the notes secured by quality used motor vehicles, in the unlikely event that the company’s business fails, you would be able to collect your payments directly from the purchaser of the vehicle as you own his or her car note.” The “Contact Us” page of the website lists the names and phone numbers of Mr. David Harris and Mr. Bill Thompson, along with an


Oklahoma City mailing address. In a separate court filing in August 2011, an investor with Invest In Car Notes charged Mr. Thompson and Mr. Harris with breach of contract. According to the filing, David Hamer of Houston, Texas, invested $25,000 in January 2011 with Invest In Car Notes for the purchase of three car loans. Mr. Hamer was to receive monthly checks in the amount of $244.79 for eleven months. On the twelfth month, Mr. Hamer was to receive payment of $25,244.82. The court documents state that he received payment of $244.79 February through May of 2011. The June payment was late and the July payment was not received. Accordingly, Mr. Hamer is suing for breach of the agreement and requesting relief of $25,244.79 plus interest and other relief. The Oklahoma Securities Department Order directing the respondents to cease and desist from offering and selling unregistered securities, and transacting business in and/or from this state as unregistered agents was issued August 31, 2011. The respondents were also given notice of their right to request a hearing in the matter within 30 days. If the respondents do not request a hearing within 30 days, the Order may become final by operation of law.


Get Started with NIADA’s Mobile App Today! For Details & Instructions Visit: or Call 1-855-MY-NIADA (855.696.4232)


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NHTSA Recalls Hyundai Santa Fe, MY 2007-2008 Hyundai Veracruz, MY 2007-2008

NHTSA ID number: 11V472000 Air bags: Frontal Units affected: 205,233 Hyundai is recalling certain model year 2007-2008 Hyundai Veracruz vehicles manufactured from December 26, 2006, through March 21, 2008, and model year 2007-2008 Hyundai Santa Fe vehicles manufactured from April 19, 2006 through March 20, 2008. The clock spring contact assembly for the driver’s air bag supplemental restraint system may become damaged through usage over time. The driver’s air bag electrical circuit will experience a high resistance condition, potentially causing the driver’s air bag to not deploy. If the clock spring develops high resistance, in the event of a crash, the driver’s air bag will not deploy and will not be able to properly protect the driver, increasing the risk of injuries. Hyundai dealers will replace the vehicle’s driver’s air bag clock spring contact assembly as necessary free of charge. The safety recall is expected to begin during September 2011. Owners may contact Hyundai’s customer connect center at 1-800-633-5151. Hyundai’s safety recall campaign number is 103.

Kia Sorento, MY 2007-2008

NHTSA ID number: 11V473000 Air bags: Frontal; Sensor/control module Units affected: 10,631 Kia is recalling certain model year 2007-2008 Sorento passenger cars manufactured from June 15, 2006 through November 27, 2007. The front passenger air bag may be turned off when an adult is in the passenger seat. The front passenger air bag is designed to be turned off in limited circumstances, including when children

and small adults are seated in the front passenger seat, there is a child restraint in that seat, or the seat is not occupied. The vehicle’s occupant classification system (OCS), which classifies the occupant in the front passenger seat, may misclassify an adult passenger as a child or child seat and improperly turn off the passenger-side air bag. When the air bag is deactivated, the “passenger air bag off” light will illuminate on the center instrument panel. The passenger-side air bag is turned off when the OCS misclassifies an adult passenger. With the front passenger airbag off, the front passenger will not have the protection of the passenger air bags in some frontal collisions, thus increasing the risk of occupant injury. Kia will update the programming in the Sorento OCS control module at no charge. The recall remedy is currently available under service campaign SC076. Owners may contact Kia customer service at 1-800-333-4542. Kia’s recall campaign number is SC076A.

Subaru Legacy, MY 2011 Subaru Outback, MY 2011

NHTSA ID number: 11V467000 Visibility: Sun roof assembly Units affected: 69,590 Subaru is recalling certain model year 2011 Outback and Legacy vehicles manufactured from August 3, 2010, through July 1, 2011. The moonroof glass may come loose or detach. The amount and position of the adhesive between the glass and retainer was inadequately applied. The moonroof glass can loosen and detach from the vehicle during driving, resulting in a potential road hazard for other vehicles, increasing the risk of a crash. Subaru will notify owners, and dealers will inspect the glass adhesion condition and either apply additional adhesive or replace the

moonroof glass, free of charge. The safety recall is expected to begin during October 2011. Owners may contact Subaru at 1-800-782-2783. Subaru’s safety recall number is WVW-33.

Subaru Legacy, MY 2010-2011 Subaru Outback, MY 2010-2011

NHTSA ID number: 11V469000 Visibility: Windshield wiper/washer motor Units affected: 195,080 Subaru is recalling certain model year 2010-2011 Outback and Legacy vehicles manufactured from January 7, 2010, through May 20, 2011. Components inside the wiper motor bottom cover may overheat. If the components overheat, the wiper motor bottom cover may melt and potentially catch fire. Subaru will notify owners, and dealers will replace the front wiper motor bottom cover assembly free of charge. The safety recall is expected to begin during November 2011. Owners may contact Subaru at 1-800-782-2783. Subaru’s safety recall number is WVW-32.

Volkswagen Jetta, MY 2011

NHTSA ID number: 11V466000 Engine and engine cooling: Exhaust system Units affected: 30,294 Volkswagen is recalling certain model year 20112012 Jetta sedan vehicles manufactured from March 18, 2010, through August 22, 2011. Some vehicles had a stainless steel exhaust tip installed at the port during importation. These exhaust tips may extend beyond the original length of the factory-installed exhaust pipes. It is possible for inadvertent contact to occur with a person’s leg. If the tailpipe extension is hot during inadvertent contact, a burn could occur. Dealers will inspect and replace the stainless steel exhaust tips as necessary free of charge. The safety recall is



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Fo r m o re i n f o r m a t i o n , v i s i t w w w. N HTSA . g o v. expected to begin during November 2011. Owners may contact Volkswagen at 1-800-822-8987. Volkswagen’s safety recall number is 26G8/U3.

SAAB 9-2X, MY 2005-2006 Subaru Forester, MY 2003-2008 Subaru Impreza, MY 2002-2007

NHTSA ID number: 11V464000 Suspension: Front control arm, lower arm Units affected: 295,123 Subaru is recalling certain model year 20022007 Impreza, model year 2003-2008 Forester, and model year 2005-2006 SAAB 9-2X vehicles manufactured from September 5, 2000 through November 26, 2007 originally sold, or currently registered in, Massachusetts, Maryland, Michigan, New Hampshire, New York, Pennsylvania, Vermont, Wisconsin, Connecticut, Delaware, Iowa, Illinois, Indiana, Maine, Minnesota, Missouri, New Jersey, Ohio, Rhode Island, West Virginia, and the District of Columbia. The front lower control arms may break at the hanger brackets due to corrosion if the hanger bracket is exposed to salty and humid environments such as roads containing snow-melting agents. A broken control arm can result in the loss of control of the vehicle, increasing the risk of a crash. Subaru dealers will inspect the degree of corrosion of the front lower control arms, and will either rustproof or replace them. This service will be performed free of charge. The safety recall is expected to begin during November 2011. Owners may contact Subaru at 1-800-782-2783. This is Subaru’s safety recall number WVX-34.

Honda Pilot, MY 2009-2011

NHTSA ID number: 11V468000 Seat belts: Front, webbing Units affected: 310,773 Honda is recalling certain model year 2009-2011 Pilot vehicles manufactured from March 13, 2008, through August 30, 2011. There is a possibility that the stitching that secures the end of the driver and front passenger lap section of the seat belt may be incomplete or missing. If the stitching is incomplete or missing, the seat belt may detach from the anchor webbing, increasing the risk of personal injury in a crash. Honda dealers will conduct a specialized inspection of the driver and front passenger seat belts, and if necessary, replace the seat belts, free of charge. The safety recall is expected to begin on or about October 3, 2011. Owners may contact Honda Automobile customer service at 1-800-999-1009. Honda’s recall campaign number is R95.

Honda CR-Z, MY 2011

NHTSA ID number: 11V458000 Power train Units Affected: 5,626 Honda is recalling certain model year 2011 CR-Z passenger cars with manual transmissions, manufactured from January 8, 2010, through June 27, 2011. Should the engine stall while the brake pedal is not pressed, there is a possibility the engine control unit (ECU) software may cause the electric motor of the hybrid system to move the vehicle unexpectedly in the opposite direction of the selected gear. Unexpected vehicle movement could increase the risk of a crash or personal injury to the persons in the path of the moving vehicle. Honda will notify owners, and dealers

will update the ECU software, free of charge. The safety recall is expected to begin on or about September 30, 2011. Owners may contact Honda Automobile customer service at 1-800-999-1009. Honda’s recall campaign number is R94.

Honda CR-V, MY 2006

NHTSA ID number: 11V456000 Electrical system Units affected: 80,111 Honda is recalling certain model year 2006 CR-V passenger cars manufactured from October 3, 2005, through July 21, 2006. The driver-side power window switch may fail or melt. If the switch fails, the power windows may become inoperative, preventing them from being rolled up or down. If the switch melts, it will produce smoke and a fire could occur. Honda will notify owners, and dealers will replace the driver-side power window switch assembly free of charge. The safety recall is expected to begin on or about September 27, 2011. Owners may contact Honda Automobile customer service at 1-800-999-1009. Honda’s recall campaign number is R93. For more information, go to or www.



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The following applicants, as listed in the agenda for the Used Motor Vehicle and Parts Commission regular meeting of September 13, 2011, 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.




804 Bike

Tom Jalbert


A & A Motor Company #2 Amigo Auto Sales Backwoods Auto Sales Brinkley Auctions & Trucks Chris Nikel Fiat Comb In the Chrome Auto & RV D & V Auto Sales, LLC Gardner Motors, Inc. * Icon Motors (Two on a lot with Joey Auto Sales) J & R Environmental Truck Sales Killer Deal Auto Sales Leslie Auto Sales, LLC Liberty Auto Finance, LLC Michael Jackson Auto Sales Midway Auto Sales R.V. Collection, LLC R-Mac Auto, LLC T & T Equipment, Truck & Trailer Sales TNT Motors, LLC Tom’s Auto Sales, LLC Tycoon Motorsports, LLC *Special Circumstances

Abdul Almusawi Carlos G. Baca Brian Casey Amy Lynn Duran Larry Brinkley Laura Nell Brinkley Milena Nikel Chris Nikel Karl Schmind David Chase McAlvain Jack Dickey, Jr. Michael Gardner Michael Betts

Tulsa Tulsa Wellston

Rodney Womack Tim Barr Stoney Elam Medain Tobar Eilin Tobar Gary Denton Benjamin Denton Michael Cleve Jackson Jimmy Dick Erik Charles De Shane Ronald Gene McVey Shauna Timms Rodney Timms Marsha Renee Turner Thomas Johnson Jennifer Smalley-Johnson James Loney Hobart Arnold Dailey

Oklahoma City


COMPANY Concord Motors, Inc. Tom Ausdenmoore Motors Value Motors

Idabel Broken Arrow

Tahlequah Weatherford Coweta Oklahoma City

Muskogee Sapulpa Tulsa Vinita Oologah Verdigris Norman Oklahoma City Sallisaw Miami Tulsa Kingston


Ali Anvar Thomas Ausdenmoore Mohsen Alizadeh

Edmond Norman Oklahoma City


The following list includes members who joined or renewed their OIADA/NIADA membership during August. We express our sincere appreciation for all the members of OIADA and we extend our invitation to dealers who are not members. A membership application can be found 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 Congress, we need that voice more than ever.-- John Easttom, Chairman


Wholesale Enterprises Auto Sales West Brothers Auto sales Mangum Auto Sales McQuerry Motors, Inc. Henryetta Ford Ranch Kayser’s Cars & Classics I-40 Auto Auction, Inc. Discount Auto Sales Shreve Truck & Equipment Sales Crossroads Auto Mall Integrity Auto Sales Pinnacle Auto Center, LLC Shockley’s Auto Sales, Inc. Eastern Motors Taft Motors, Inc. Enterprise Car Sales Alliance Auto Sales, LLC G/T Auto Sales Kent’s Custom Cars & Trucks, Inc. Car Nation Credit Connection Auto Sales, Inc. Baustert Motor Co., Inc. Smart Auction


Elite Auto Wholesale of Edmond Superior Finance Company



Wholesale Enterprises Garvin L. West Jacky D. Mangum, Jr. David McQuerry Henryetta Ford, Inc. Marshall Kayser Jeff Haley John Sharp Terry Shreve Larry D. Pennington William Goslawski Steven Wilson Monte Shockley Doug Speer John Longacre ENA Holding, LLC Tommy Gober Destra Enterprises, Inc. Kent Smalygo Massoud Goli Charles West John P. Baustert Gordon Smith

1993 1994 2000 2000 2007 1999 1991 1992 2005 1995 1999 2008 1995 1993 1996 1993 2010 2005 2000 2006 2002 2005 2008

Midwest City Lawton Duncan Shawnee Henryetta Dewey Del City Broken Arrow Barnsdall Oklahoma City Edmond Guymon Poteau Altus Bristow Midwest City Oklahoma City Woodward Collinsville Oklahoma City Midwest City Okarche Tulsa

Michelle Jacobs Superior Finance

2011 2011

Edmond Oklahoma City



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Join OIADA And See

More Profit In Your Pocket! Join OIADA and Receive Your 2011 VIP Discount Cards!

Your Dealer Discount VIP Cards are just one of the many benefits of OIADA membership. Their value alone is over four times greater than the $295 annual membership fee. Join OIADA today to get started saving with your own Member-Exclusive Dealer Discount VIP Cards. I-40 Auto Auction, Muldrow Thursday @ 7:00pm: One Buy Fee.

I-35 Auto Auction, Pauls Valley Tuesday @ 7:00 pm: One Buy or Sell Fee up to $75.

165 Auto Auction, Muskogee Wednesday @ 7:00pm: One Buy Fee.

I-40 Auto Auction, Inc., Del City Tuesday @ 6:30pm: One Buy Fee up to $50. One Sell Fee up to $50.

Dealers Auto Auction of OKC Thursday @ 8:30am: One Sell Fee up to $50. One Buy Fee up to $50.

Central Auto Auction - Hwy 37, Tuttle Saturd of each month 10 am: One Free Sell Fee 1st Saturday

ADESA Tulsa Friday @ 9:00 am: One Sell Fee up to $50. One Buy Fee up to $50.

Manheim Missouri - Springfield Thursday @ 9:00am One Sell Fee up to $100. One Buy Fee up to $70.

CarMax Auctions, Oklahoma City location. One Buy Fee up to $50.

Manheim Dallas/Ft. Worth Thursday @ 9:30 am: (Trinity Blvd location) Free Buy Fee. Only available at Thursday sale.

America America’s Auto Auction, Inc. of Tulsa Wednesday @ 2:00pm: Dealers only or Saturday @ 11:00 am: Dealers & Public. One Buy Fee up to $50.

Manheim Metro Dallas Tuesday @ 9:00 pm: Free Buy Fee. Manheim Dallas Wednesday @ 9:00 am or Friday @ 10:00 am Free Buy Fee

Join OIADA and trade with these vendors, and they will more than cover the cost of your membership. That leaves

More Profit In Your Pocket!

When you join or renew your membership in OIADA, you receive a full set of Dealer Discount VIP Cards. These cards are available ONLY to OIADA MEMBERS and are DEALER EXCLUSIVE.

Call (405) 232-2947 or visit to Join OIADA Today! 25

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IRS Form 8300 Reminder Report of Cash Payments Over $10,000 Received in a Trade or Business Reminder: Companies must furnish a written notice to any individual named on a Form 8300 by January 31. Trades and businesses that receive more than $10,000 cash for a business transaction must report these payments to the Internal Revenue Service within 15 days of the transaction using Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. The reporting requirement may be the result of a single transaction or the result of two or more related transactions. In addition to filing Form 8300 with the IRS, companies must also furnish to each person whose name is required to be included in the Form 8300 a written statement by January 31 of the year following the transaction. This statement must include: • the name, address, contact person, and telephone number of the business filing Form 8300, • the aggregate amount of cash the business reported to the IRS, and •a  statement that the business provided this information to the IRS. Cash reporting is a requirement of both the Internal Revenue Code and the Bank Secrecy Act. It is important that businesses comply with these laws to assist the IRS and the Financial Crimes Enforcement Network in their efforts to combat money laundering and to avoid potential civil and criminal penalties. Penalties for violation of the Form 8300 filing and furnishing requirements have been increased by the Small Business Jobs and Credit Act of 2010. Increased penalties apply with respect to Forms 8300 required to be filed and related notices required to be furnished on or after Jan 1, 2011. Penalty for failure to file a timely and correct Form 8300 has been raised from $50 to $100. However, an intentional disregard for failure to file a timely and correct Form 8300 can result in a penalty of greater of $25,000 or the amount of cash received in such transaction not to exceed $100,000. The failure to furnish a statement to the persons whose names were required to be included in the Form 8300 has been raised from $50 to $100 per violation. A copy of Form 8300 can be found in this publication. The PDF-fillable version of the form is available at www., along with complete instructions. IRS Form 8300 Motor Vehicle Dealership Q & A The Motor Vehicle Technical Advisor Program, in conjunction with IRS specialists on money laundering, has compiled a list of motor vehicle dealership-specific questions and answers relative to Form 8300. Some of the questions are the basics and some are dealershipspecific. The Basics What does “cash” mean for the purposes of Form 8300? •C  ash is money: currency and coins of the United States and any other country. • Cash is also certain monetary instruments – a cashier’s check, bank draft, traveler’s check or money order – if it has a face amount of $10,000 or less and the business receives it in: •A  designated reporting transaction (generally, a retail sale of a consumer durable, a collectable, or a travel or entertainment activity) or •A  ny transaction in which the recipient knows the payer is trying to avoid the reporting of the transaction on Form 8300. What is a related transaction? • T ransactions between a buyer and a seller that occur within a 24-hour period are related transactions. • T ransactions more than 24 hours apart are related if the recipient of the cash knows, or has reason

to know, that each transaction is one of a series of connected transactions. Does the 24-hour period mean one day such as all day Tuesday or does it mean literally 24 hours such as from 11 a.m. on Tuesday to 11 a.m. on Wednesday? •A  24-hour period is 24 hours, not necessarily a calendar day or banking day. When is the Form 8300 due? • F orm 8300 is due within 15 days after the date the cash was received. • If there are subsequent payments that are made with respect to a single transaction (or two or more related transactions), the Form 8300 is due when the total exceeds $10,000. •E  ach time the payments aggregate in excess of $10,000 the business must file another Form 8300 within 15 days of the payment that causes the additional, previously unreportable payments to total more than $10,000. Must a business notify its customer that it has filed a Form 8300 regarding the cash transaction with the customer? •Y  es, a business must notify its customer, in writing, by January 31 of the subsequent calendar year. If a business filed a Form 8300 on an individual and checked the suspicious transaction box, and a Form 8300 was not otherwise required, does the business have to inform the individual that a Form 8300 was filed? • Reporting of the suspicious transaction in this instance is voluntary. A business is only required to provide a statement to individuals if the filing of the Form 8300 is required. A business is prohibited from informing the buyer that the suspicious transaction box was checked. Instead of sending the customer a separate notification letter, can the dealership use the sales invoice as the notification requirement, if the sales invoice has language printed on it that the IRS will be furnished with information for cash sales over $10,000? • T here is nothing in the Code or regulations mandating a specific format for the customer statement. The regulations, however, establish certain minimum requirements. As long as these minimum requirements are met, there would be no problem if the seller chose to print the required language on an invoice. • T he statement must contain the following information: • T he name and address of the person completing Form 8300; • T he aggregate amount of reportable cash in all related cash transactions; •A  legend stating that the information contained in the statement is being reported to the Internal Revenue Service. • If during the calendar year, the dealer has more than one transaction with the customer, furnishing multiple copies of the sales invoice would not meet the notice requirements because it is not a “single” statement. In this situation, the dealer should provide a single written notice for all of the transactions. Is a personal check considered cash for reporting on Form 8300? •N  o, personal checks are not considered cash. If the business is unable to obtain the Taxpayer Identification Number of a customer making a cash payment of over $10,000, should the business file Form 8300 anyway? •Y  es, the business should file Form 8300 with a statement explaining why the Taxpayer Identification Number is not included.

Does a wholesaler (no retail) report transactions paid in US (or foreign) coins and currency only? •Y  es, if the wholesaler receives payment in the form of coins or currency. A wholesaler, however, need not report transactions paid with cashier’s checks, bank drafts, traveler’s checks or money orders unless the recipient knows, or has reason to know, the payer is trying to avoid the reporting of the transaction on Form 8300. What if a retailer also does some wholesale transactions, must the business report all transactions, or just the retail ones? • If the trade or business of the seller principally consists of sales to ultimate consumers, then all sales, including wholesale transactions, are considered “retail sales” and are subject to the Form 8300 reporting requirements. Does a dealer need to accumulate individual sales to a customer, or sales to a wholesaler, throughout a 12-month period and report whenever they exceed a cumulative $10,000? •E  ach transaction stands on its own. But if the dealership knows that any of the individual purchases are related, a Form 8300 should be filed. If a customer purchased an item, then eight weeks later the same customer purchased a different item, are these amounts aggregated and reported on the Form 8300? •N  o, if the two payments are for separate unrelated transactions. Dealership-Specific Questions A customer purchased a vehicle for $9,000 cash. Within the next 12 months, the customer paid the dealership additional cash of $1,500 for a repair to the vehicle’s transmission, accessories and a customized paint job, etc. Should a Form 8300 be filed? •N  o, unless the dealer knew or had reason to know the sale of the vehicle and the subsequent transactions were a series of connected transactions (for example, if the dealer and the customer agreed, as a condition of the sale of the vehicle, that the customer would be obligated to buy an additional $1,500 of goods or services). • T ransactions are related if they occur within a 24-hour period. Transactions are related even if they are more than 24 hours apart if you know, or have reason to know, that each is one of a series of connected transactions. For example, items or services negotiated during the original purchase are related to the original purchase. A customer wired $7,000 from his bank account to the dealership’s bank account and also presented a $4,000 cashier’s check. Does the dealership complete Form 8300? •A  wire transfer does not constitute cash for Form 8300 reporting. Since the remaining cash remitted was less than $10,000, the dealer has no 8300 filing requirement. A customer makes weekly payments in cash to a dealership as a lease payment or loan payment on a vehicle. During a 12-month period, these payments total more than $10,000. Are these payments considered related transactions and is the dealership required to file a Form 8300? •Y  es, the weekly lease or loan payments constitute payments on the same transaction (the leasing or purchase of the vehicle). •A  ccordingly, the dealership is required to file Form 8300 when the total amount exceeds $10,000. •E  ach time the payments aggregate in excess of $10,000 the dealership must file another Form 8300 within 15 days of the payment that causes



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the previously unreportable payments to total more than $10,000 A husband and wife purchase two cars at one time from the same dealer and the total cash received is $10,200. How many Form 8300s should the car dealer file? • T he transaction(s) can be viewed as either a single transaction or two related transactions. Either way, it warrants only one Form 8300. If a customer purchased a cashier’s check at the bank for over $10,000, would the bank report the transaction? Does the seller of a vehicle need to report the transaction if the same cashier’s check is subsequently used to purchase a vehicle? • If the cashier’s check was purchased with cash exceeding $10,000, the bank would file a Currency Transaction Report (not a Form 8300). • T he purchase of a vehicle with a cashier’s check, bank draft, traveler’s check or money order with a face amount of more than $10,000 is not treated as cash and a business does not have to file Form 8300 when it receives them. How should a dealership handle a nonresident alien with no SSN? •U  se the IRS Individual Taxpayer Identification Number (ITIN) if the nonresident has one. If there is no ITIN enter (NONE) on Item 6 of Form 8300. Pub 1544 provides a list of exceptions in which a filer is not required to provide a Taxpayer Identification Number of a person who is a nonresident alien individual or a foreign organization. •Y  ou must verify the individual’s name and address and insert this information on Item 14 of Form 8300. For nonresident aliens, acceptable documentation would include a passport, alien registration card or other official document. Do payments in excess of $10,000 in cash paid to a body shop need to be reported? Do the 8300 filing requirements apply to services as well as goods? •Y  es. Cash, in the form of currency, received in excess of $10,000 must be reported. However, a service is not a consumer durable so the expanded definition of cash does not apply to payments for services. The body shop would file an 8300. A dealership sold cars on Jan. 31 and Feb. 6 to one customer and received $20,000 cash in two payments of $10,000 each on the same date for the two cars. Is a Form 8300 required? •Y  es. The dealership received over $10,000 in cash within 24 hours. Customer purchased five cars, each separately, through the year totaling $15,000 and none of which individually exceeded $10,000. Is Form 8300 required? • If the dealer knows, or has reason to know, that each transaction is one of a series of connected transactions a Form 8300 would be required. If there is no reason to believe that they are connected, the five transactions would be viewed as separate transactions none of which exceed $10,000 in cash and a Form 8300 would not be required. Are wire transfers considered cash? •W  ire transfers are not considered to be cash and no Form 8300 is required to be filed. • T he money services business (MSB) or bank that handles the wire transfer must document these types of transactions by filing a CTR on amounts over $10,000. A dealership receives greater than $10,000 in cash on day one for the sale of a vehicle. On day three, the deal is canceled due to an inability to finance the deal. The dealership returns the cash. Is a Form 8300 required? •Y  es. Once the dealership receives cash exceeding $10,000, a Form 8300 must be filed.

• T he deal not going through may in fact be an attempt to launder illegal funds. • If $10,000 or less was received by the dealer and the deal was canceled, the dealer may voluntarily file a Form 8300 if the transaction appears suspicious. If a dealership receives a bank check drawn on the funds of the bank (not a personal checking account check or a check drawn on a personal account of the customer) with the customer’s personal account number and customer name on it, is this considered cash or a cash equivalent? •B  ank checks (drawn on the bank’s account, not the account of the customer) of $10,000 or less are cash under the expanded definition of cash, unless they are loan proceeds. • T he fact that there are notations on the check or even that the check is made payable to the dealership does not negate this. A customer purchases a vehicle for $15,000 and pays for it with $9,000 in cash and puts the remaining $6,000 on a personal credit card. Should a Form 8300 be filed? Instead of a personal credit card, the customer pays the remaining $6,000 with his ATM card. Is the ATM amount considered cash or a cash equivalent that makes the total amount received over $10,000 and thus reportable on Form 8300? •N  o Form 8300 is required. • L ess than $10,000 in cash was received. A credit card is not cash. • T he ATM card works the same as a credit card in this instance. The only difference is that the account will be charged with a debit against existing funds instead of charged for a debit to nonexisting funds, but a promise to repay later. •A  n ATM transaction is not given the consideration of cash; therefore, since the amount received in cash or cash equivalents is less than $10,000, the transaction is not reportable. For wholesalers, where a purchasing retailer buys more than one vehicle in a single day, is that one transaction, a series of related transactions or a series of unrelated transactions given that there are multiple vehicles? What happens on separate purchases over the course of a week? What about a month? • T wo or more transactions within a 24-hour period are related transactions. A trade or business that receives more than $10,000 in related transactions must file Form 8300. • If purchases are more than 24 hours apart and not connected in any way that the seller knows, or has reason to know, then the purchases are not related and a Form 8300 is not required. For sales to individual retail customers, payment of cash for one car at multiple time periods is a series of related transactions. However, what about when the same purchaser buys a second car one week later and provides enough cash to trigger the reporting requirement? Since they are two separate vehicles, are those related transactions? What is the time period break for considering them unrelated transactions? • T he car purchases are separate transactions unless the purchase of the second car was negotiated at the same time of the first car or the seller otherwise knows or has reason to know that the transactions are connected. •W  hen an installment arrangement is established on a single transaction, the dealer must file a Form 8300 when cash payments received exceed $10,000 within a 12-month period. After filing the 8300, a new count of cash payments from the buyer would begin. • T he time period break for considering transactions unrelated is 24 hours. What exactly can be said to a customer who inquires about IRS Form 8300 reporting? Some

dealers are advised not to refer to IRS Form 8300 reporting in the presence of the customer. In particular, dealers are concerned that advising customers that they need information for an IRS 8300 report could degenerate into a structuring conversation. What if the customer asks what the information is for? Can the dealer volunteer that it is for IRS Form 8300 reporting? •A  customer can be, but is not required to be, told at the time of the transaction about the law requiring the reporting of cash payments over $10,000 to the IRS and FinCEN. •W  hat a dealer cannot do is aid a customer in structuring a transaction to prevent a Form 8300 from being filed. •A  dealer who is filing Form 8300 voluntarily because of suspicious activity cannot inform the customer of the filing. What are the penalties if a dealership does not file a Form 8300? • T here are civil penalties for failure to file a correct Form 8300 by its due date and for failure to provide a statement as required. •A  dditional penalties apply for intentional disregard of the filing requirements. •C  riminal penalties may apply in the case of willful filing of false or fraudulent Forms 8300. A dealership receives monthly ACH payments [automatic payments from a customer bank account]. If the payments total in excess of $10,000, should the payments be treated as cash? •A  CH payments are not considered cash for the purpose of reporting on Form 8300. A related finance company provides financing to customers of multiple related used vehicle dealerships. The finance company purchases contracts from the used car lot and a bank check is issued to the car lot for the amount of the car deal. Would the definition of cash to include cashier’s checks and money orders apply to the finance company? •A  s to the sale to the customer, the dealership’s sale of the vehicle constitutes a retail sale of a consumer durable requiring reporting of certain monetary instruments if the face amount was $10,000 or less and the total transaction exceeds $10,000. •W  hen the finance company purchases the “finance contract,” they do not have a designated reporting transaction. The finance contract is not a consumer durable, collectible, or travel or entertainment activity. Thus monetary instruments with a face amount of $10,000 or less received from the finance company to pay off the finance contract would under normal situations not be reportable. What type of records might an examiner request during an 8300 examination? •R  ecords requested may vary by examiner but typically the following records are requested: •C  hecking, savings, and/or other financial account statements and deposit slips. •A  n electronic bank deposit reconciliation in Excel format extracted from the dealer’s Dealers Management System (DMS). The report generally requires all receipts of the business from any source including: • the amount, date received, method of payment (cash, check, credit card number, etc.), • p ayer name, and • receipt number. •R  eceipt sources should include new and used vehicle sales, leases, service, parts, body shops and any non-customer receipts. •D  eal jackets for leases and sales during the examination period. •S  ales journals, cash receipts journals, accounts/ notes receivable, sales invoices. 29

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Rev 04/26/11


Order on line at Phone 800-346-4232 Fax 405-799-3367

Prices subject to change without notice Date of Order:___________________ Residential Delivery? yes_____ no_____ Requested By: ____________________________________________________ Visa Master Card Discover Amex 3 or 4 digit code # ________________

Credit Card Billing Address:_______________________________________________________________ Expiration Date:________/_________ Signature:______________________________________________ Ship To: ___________________________________________________________________________________ _____Ph.__________________________ Name ________________________________________________________________________ _______________ Fax:_________________________ Physical Address (no P.O. Boxes) _____________________________________________________________________________________________________________________ City, State, Zip Code

Item #

Item Description

Price $


Total $

F01 F02 F03 F04 F04 A F 04 B F04.1 F05 A 127 F05.0 F05.1

All Items in packs of 100 unless otherwise noted Dealer Warranty Disclaimer Odometer Disclosure Statements (3 part) 30 Day Notice (Title Receipt – (1 part perforated)) Buyers Guides – FTC AS IS (2part) Buyers Guides – FTC AS IS 4 seal (2 part) Buyers Guides – FTC AS IS Spanish (2 part) Vehicle Inventory Record (bound book per each) Retail Purchase Agreement (3 part) Wholesale Buyers Order (50) Vehicle Inspection Form (2 part) Privacy Notice – Special Order Required – email

F05.3 F05.4 F06 F06.1 F06.2 F07.1 F08 F08.3 F09 F09.0 F10.3 F11 F11.1 F13 F13.2 F13.1 F14.6 F14.4 F14.5

Repo Notice of Sale (2 part) Repo Calculation of Return (2 part) Multiform (Retail Buyers Order – Bill of Sale – 3 part) (short form) Multiform (Retail Buyers Order – Bill of Sale – 2 part) (short form) Retail Purchase Agreement – Multiform – 3 part (long form) Poly Stock Window Stickers (per 250) Retail Installment Contract (4 part) Simple Interest Contract – Legal size (5 part) Lien Entry Form MVD-21-A (pad of 100) Agreement to Provide Insurance We Owe Forms (2 part) Used Car Sales Envelope – Deal Jacket (9”X12” Tan – Printed on both sides) Used Car Sales Envelope – Deal Jacket (9”X12” Green) Credit Application Personal Loan Applications Spot Delivery Form Consignment Forms Certificate of Ownership Dismantler’s Forms

17.00 17.00 25.00 18.00 60.00 30.00 50.00 65.00 10.00 40.00 17.00 25.00 25.00 23.00 23.00 18.00 15.00 25.00 25.00

F07 B F10 F10.0 F10.1 F10.2 F10.3B

Stock Window Stickers – Blue___; Blue Blank___; Green___; Red___; Red Blank___ Rigidene Key Tags – (Bag 125) White or Yellow Rigidene Key Tags – (Box 500) White or Yellow Top Stripe Key Tags – (Box 250) Black, Green, Orange, Red Blue, or Pink Protek Key Tags (Box 250) Blue, Red, White, or Yellow EIT (Service Department) Key Tags (Pack of 1,000)

11.00 11.00 40.00 20.00 23.00 23.00

F14 F14.1

Plastic Folders for FTC AS IS (Pack of 25) Plastic Folder Kits for FTC AS IS (Box of 100)

21.00 58.00

S15 S15.1 S15.2

Dealer Tag Magnets (per each) Pan Head Tag Screws (Box of 100) Hex Head Tag Screws ( Box of 100)

7.00 10.00 10.00

10.00 11.00 7.00 15.00 50.00 18.00 14.00 25.00 13.00 17.00

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Item # S15.3 S15.4 S15.5 S15.7 S16

Item Description Hex Head Tag Screws (Metric – Box of 100) Nylon Tag Screw Inserts (Box of 100) Tag Thumb Screws (Box of 50) Rubber Tag Holder with Magnet (per each) Rubber Dealer Tag Holder (per each)

S17 S17.1 S17.2 S17.6 S17.3 S17.4 S18 S18.1 S18.2 S18.3 S18.4

Uni Posca Marker (Small – each) White__, Pink__, Yellow__, Red__, Blue__, or Green__ Uni Posca Marker (Medium – each) Green__, Orange__, Red__, Pink__, or Yellow___ Uni Posca Marker (Jumbo - each) Pink___, Red___, White___, or Yellow___ Uni Posca Marker ( Wide – each) Wht.___; Yel.___; Red___; Or.___; Gr.___; Pink___ Lettering Paint Pot w/brush (each) Green__,Blue__, White__, Yel__, Pink__, Red__, Or__ Solid Marker Paint Stick – Solidified Paint (each) Red___, Yellow___, White___, Blue___ Key Board – 32 peg (per each) Key Board – 55 peg (per each) Key Board – 105 peg (per each) Key Board – 38 peg (per each) Key Board – 75 peg (per each)

S20 S21 S21.1 S21.2 S21.4 S21.5 S21.6 S21.7

Floor Mats – Plastic/paper (Box of 500) Rear View Mirror Signs – Various imprints (Packs of 50) Windshield Signs – Various model years (Packs of 12) Windshield Message Signs – Various 3 ½ X14” (Packs of 12) Windshield Number Signs – 7 ½” (Packs of 12) Windshield Number Signs – 9 ½” (Packs of 12) Windshield “Bubble” Number Signs – 3”X4” (Packs of 12) Arched Slogan Signs (Mates with year signs) (Packs of 12) (list desired imprints here) TM

A 100 A 101 A 102 A 116 A 119 A 120 A 121 A 123 A 123 S A 123 F A 124 A 125 A 126 A 130 A 140 A 141 A 144 A 145 A 214 B 50.1 B 50.2 B 52 B 54 B 55 B 53

$ Price 10.00 7.00 10.00 16.00 12.00



4.00 5.00 7.00 9.50 9.95 4.00 45.00 65.00 105.00 50.00 88.00 69.00 14.00 6.95 3.50 3.50 3.50 2.00 4.50


FEX (formely DOX – DealerCap ) Forms (Dealership protection): Customer Proposal Trade-in Vehicle Appraisal Test Drive Agreement Used Vehicle Limited Warranty Authorization to Release Payoff Information Notice to Co-Signer Insurance Coverage Acknowledgement Delivery Confirmation and Acknowledgement (also covers “We Owe” Items) Delivery Confirmation (Spanish) Delivery Confirmation (for sales in language other than English or Spanish) Customer Delivery Checklist Acknowledgement of AS IS Sale Good Will Repair Acknowledgement Retail Purchase Agreement Interpreter’s Acknowledgement of Confirmation Service Loaner Agreement Agreement to Arbitrate Retail Lease Agreement Carbonless Receipt Books (meets federal requirements) (200 numbered receipts)

23.00 23.00 23.00 23.00 23.00 23.00 23.00 23.00 23.00 23.00 23.00 23.00 23.00 32.00 23.00 23.00 23.00 32.00 24.00

NADA Used Car Guide (Annual Subscription $90.00) (per each) NADA Older Car Guide (Annual Subscription $72.00) (per each) Black Book Weekly Guide (Annual Sub. $121.00) (per each) Black Book Truck & Van (Annual Sub. $101.00) (per each) Black Book Old Car Monthly Guide (Annual Sub. $86.00) (per each) Black Book CPI Collectible Vehicle Value Guide (per each) Weatherproof Temporary Tags – To help you to comply with the new law on Temporary Tags, OIADA now supplies weatherproof tags that comply with the UMV&PC Rules. See temporary tag order form elsewhere in this document

8.00 27.00 8.00 10.00 10.00 10.00

OTHER Notes: Member Discount is 10% Order on line at Shipping is by UPS Ground - Place your order by 2:00 pm and it will be shipped that day to arrive at your door the next business day. Make checks payable to OIADA. Payment due upon receipt - Net 10 days - 2% per month late payment OIADA managed by ADR of Oklahoma CASH


Check #_________

Visit our Web Page:

Shipping & Handling Chart Order Value Amount $ 1.00 $ 30.00 $ 9.50 $ 30.01 $ 50.00 $ 10.50 $ 50.01 $100.00 $ 12.50 $100.01 $130.00 $14.50 $130.01 $150.00 $15.50 $150.01 $200.00 $16.50



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Looking for Those Common Threads



COMPETING IN A CHAOTIC ECONOMY Never before have businesses felt such excruciating pressure to compete. Watch this session for tips on what’s next for the economy and what your business can do to survive and thrive. Presented by Todd Buchholz, a former director of economic policy at the White House, a managing director of the $15 billion Tiger hedge fund, and an award-winning economics teacher at Harvard. Buchholz targets his entertaining remarks to the cutting edge of economics, finance, and business strategy. He has advised President Bush, and is a frequent commentator on ABC News, PBS, and CBS, and recently hosted his own special on CNBC.


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

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

Chip Zyvoloski is senior attorney for indirect lending at Wolters Kluwer Financial Services. For more information, visit



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PAID Change Service Requested OIADA, P.O. Box 6905, Moore, OK 73153 OIADA, P.O. Box 6905, Moore, OK 73153 PRSRT Standard U.S. Postage DALLAS...