DEALER NEWS REPRESENTING ALL AUTO, TRUCK, TRAILER, RV AND POWER SPORT DEALERS OF OREGON
GET YOUR DEALER EDUCATION CREDITS FROM THIS MONTHLY MAGAZINE
J A N U A RY 2 0 1 4
F E AT U R E S T O RY O N PA G E 6
Preparing for a New Age in Dealer Compliance
How dealers can cope, even thrive, in a brave new world of indirect lending pressure from evolving compliance regulation, lender challenges and regulatory scrutiny.
• How to Hire Top Sales Reps • Leadership Conference • Building Compliance into Your Dealership
DALLAS, TEXAS Permit No. 2079
PRSRT Standard U.S. Postage
V I S I T
W W W . O I A D A . C O M
12/20/13 2:25 PM
12/20/13 1:02 PM
President’s Message from the Capital u
O IADA RE PRE SE NT S OREGON IN WA S H I N GTO N , D.C .
Inside 04 Tips to Improve Trade-In Experience 06 Preparing for a New Age in Dealer Compliance 10 Washington Update 12 Leadership Conference 14 How to Hire Top Sales Reps 18 Building Compliance into Your Dealership
What’s New u
Wanted: Dealerships that Make a Difference
Manheim & NIADA proudly announce the fourth annual National Community Service award. The winner, which will be recognized at the 2014 NIADA Convention and Expo, will receive $5,000 for the dealer’s local charity of choice. For more information or to nominate a dealer, contact Georgia Brown at firstname.lastname@example.org or (800) 682-3837.
Ally..................................................................................9 Brasher’s Northwest AA......... Inside Back Cover Brasher’s Portland AA......................... Back Cover DAA Northwest/Seattle ..........Inside Front Cover Manheim.com............................................................7 NextGear Capital.....................................................11 United Acceptance.................................................13 VAuto.............................................................................5
Continuing Education Watch for more information on the number of
hours required to renew your dealer license. Along with the change in number of hours, each dealer will be required to take and submit a test, 10 questions for every hour of Continuing Education. This will be in effect after January 1.
NIADA Headquarters National Independent Automobile Dealers Association
www.niada.com • www.niada.tv 2521 Brown Blvd. • Arlington, TX 76006-5203 phone (817) 640-3838
For advertising information contact:
Troy Graff (800) 682-3837 or email@example.com. OIADA Dealer News is published 8 times per year by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203; phone 817-640-3838. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 6006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of OIADA Insider or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of NIADA , does not constitute an endorsement of the products or services featured. Copyright © 2013 by NIADA Services, Inc.
State Magazine MGR./Sales
Troy Graff • firstname.lastname@example.org
Andy Friedlander • email@example.com Jacinda Timmerman • firstname.lastname@example.org
Magazine Layout & Graphic Artist Chantae Arrington • email@example.com
Christy Haynes • firstname.lastname@example.org
w w w. o i a d a . c o m OR_0114.indd 3
BY DAN NICHOLSON
PRESIDENT OREGON INDEPENDENT AUTO DEALERS ASSOCIATION
Executive Committee Sad Farewell President
Dan Nicholson, CMD Central Oregon Motors 1123 N 6th Street Redmond, OR 97756 541-923-3961 email@example.com
Executive Vice President Bryan Steward AAA Oregon AutoSource 6 SW Centerpoint Dr #100 Lake Oswego, OR 97035 503-973-6570 firstname.lastname@example.org
1st Vice President
Eric Freeman, CMD 7524 SW Macadam Ave Portland, OR 97219 503-310-5555 email@example.com
Tommy Wilson Jr., CMD Tommy Wilson Motors 9215 SW Canyon Rd Portland, OR 97225 503-629-6000 firstname.lastname@example.org
Todd Staver, CMD West Coast Auto Enthusiast 3219 NW Guam St Portland, OR 97210 503-799-1465 email@example.com
Chairman of the Board
Gary Sargent Sargent’s Motorsports 10207 SE Foster Rd Portland, OR 97266 503-775-9445 firstname.lastname@example.org
OIADA Office Oregon Independent Auto Dealers Association, 1475 Capitol St. NE Salem, OR 97301 800-447-0302
O I A D A B I D S F A R E W E L L T O J AY S T A G G S
We have lost OIADA family member Jay Staggs (July 20, 1964 - Nov. 17, 2013) of Happy Motors in Newport, Ore. It is with shock and sadness that we bid Jay Staggs a farewell. Jay attended the OIADA quality dealer of the year and annual convention in October. Whether it was getting together for conversation, networking with fellow dealers, working with associate vendors or absorbing the education provided, Jay always took full advantage to grow his business. Jay grew up in the Salem area and moved to Newport at the age of 18 to begin his career in automobile sales. In 2006 Jay was awarded the Regional Quality Dealer of the Year for the northwest region of Oregon and was runner up for Quality Dealer of the Year in 2012. He is survived by his son Ryan and mother Joan Staggs MacDonald. Jay always had a smile for everyone and was always willing to help others. It seems he named his dealership “Happy Motors” appropriately. Jay will be missed by all. JANUARY 2014
the front lines at our nation’s capital, battling for all the independent dealers around the country. Here in Oregon, the OIADA is committed to provide you the same service at the state level. We are currently working on forming a delegation to visit some of our state politicians. We welcome anyone to join us. Contact the office or watch our website for more information.
MANHEIM NIADA NATIONAL COMMUNITY SERVICE AWARD
OIADA executive director Diane Sparks, chairman of the board Gary Sargent and I were invited by NIADA to join a delegation of dealers from around the country in Washington, D.C. We landed in our nation’s capital in the middle of November for two days of meetings with federal regulating agencies, congressmen and senators. It has been the goal of the NIADA not only to lobby on behalf of all independent dealers across the nation but also to be a resource to our government. NIADA has been called on in the past by government agencies and congressional committees as an expert in the automobile industry. NIADA sometimes needs to educate these officials on how our dealerships are run. As positions change, it is important that we stay in front of the powers that be in our government. NIADA is committed to be on
NEWS 12/20/13 2:32 PM
High Levels of Used Supply Pushing Auction Prices Down in Some Segments u
IN F L U X O F C E R T A I N V E H I C L E S H A S D E C R E A S E D A U C T I O N V A L U E
High levels of supply is a term that hasn’t been heard in the used car market for a while. But if Chrysler and Dodge minivans are hot items on your lot, you might want to take note. According to Kelley Blue Book, dealers have been enjoying “high supply” of Chrysler and Dodge minivans at auction. As noted in a recent Blue Book Market Report from KBB, this supply excess is due to year-end rental returns of both Chrysler Town & Country and Dodge Caravan minivans at auction during the past month. Not only are there more of them, the influx of units has led to a significant decrease in auction values for both brands. According to KBB, in October the minivan segment saw an
average price drop of 3.3 percent. Due to the spike in supply, the Chrysler Town & Country and Dodge Caravan saw the biggest declines of 4.3 percent and 3.8 percent, respectively. Other segments to keep an eye out for in the lanes are SUVs and crossover SUVs. KBB reported a price trend switch that may interest dealers within these segments. Specifically, the compact SUV/ crossover segment experienced decline during October after holding “consistently higher than in 2012” earlier in the year, said KBB. For this segment, October saw a drop of 3.6 percent in auction values month-over-month, which brought the average cost in the lanes from $15,688 down to $15,106 for 1- to 3-year-old
vehicles. This trend is directly tied to volume levels, as well. “The decline (in price) coincides with a significant increase in volume running through auction lanes,” said KBB senior analyst Alec Gutierrez. “In the third quarter of 2013, auction volume for the segment was up 22 percent from the third quarter of 2012 and is up by 10 percent year-to-date.” On top of an increase in volume, overall seasonality is taking hold as well. KBB explained that after “outperforming” the market for much of 2013, auction values of 1- to 3-year old vehicles are seeing the effects of the season, falling 2.1 percent in October as an influx of off-lease vehicles hit
the auctions. The biggest price drop seen in the lanes last month, according to KBB, was the luxury car segment, which saw several units fall by more than $1,000. The Audi A7 topped the list for declines, seeing prices fall by $1,800, or 3.7 percent. Gutierrez said, “Auction volume on used luxury vehicles also is finally seeing a turnaround after four straight years of being on the decline. “Luxury volume was up 11 percent in the third quarter this year and is 3.1 percent higher year-to-date. However, with the increase in used supply comes an expectation for softening prices, especially since luxury values are seasonally weak in the later months of the year.”
Tips to Improve Trade-In Experience for Consumers u
A UTOTRADER.COM OFFERS TIPS & AN ONLINE TOOL TO EASE TRADE-IN PROCESS
Hammering out an agreeable trade-in value often creates negative feelings for potential buyers. AutoTrader.com recently offered four tips to help dealers ease the pain of the trade-in and increase customer satisfaction. Site officials wanted to create a strategy for stores because they contend satisfaction with the vehicle-buying process decreases significantly once consumers make the transition from online shopping to in-store purchasing. AutoTrader said negotiating the value for the trade-in is the activity with which purchasers are least satisfied. In fact, according to their research, only 37 percent of consumers reported being satisfied with that step. However, a tool like AutoTrader. com’s Trade-In Marketplace can serve as a bridge between the online and offline aspects of the shopping experience, thereby significantly helping dealers increase customer satisfaction. OIADA OR_0114.indd 4
“Car shoppers have access to more online resources than ever before, and they are using them to choose their buying and trade-in opportunities carefully,” said Juan Flores, director of operations for AutoTrader.com’s Trade-In Marketplace. “By addressing the most painful part of the transaction — negotiating the trade-in — dealers can increase customer satisfaction significantly, and they can also stand out from their competition. It’s a win-win if they implement — and merchandise — the tool in the right way,” Flores continued. The Trade-In Marketplace, accessible via AutoTrader.com, KBB.com from Kelley Blue Book, participating dealer websites and in select physical dealerships, can enable consumers to get an instant offer on their used vehicles, sight unseen. The offers are based on an extensive set of parameters, JANUARY 2014
including VIN-specific information, details surrounding the condition of the unit and the impact of the specific vehicle’s history and after-market equipment. The result is that consumers receive an offer on their vehicles that represents an amount that a dealer would be willing to pay for their vehicle immediately. Flores offered the following tips for dealers using the TradeIn Marketplace: • Showcase your trade-in process online. Prominently signal on your website and other marketing platforms that you have an online appraisal tool that will enable shoppers to get an instant cash offer on their vehicle. • Reduce the pressure. Let the customer know that you are very interested in the vehicle, regardless of whether he/she wants to trade in the vehicle or simply sell it to the dealer.
• Let the customer take the lead. If they haven’t generated a Trade-In Marketplace offer by the time they walk in, take the customer to the TradeIn Marketplace kiosk or a workstation and allow them to answer the vehicle condition questions themselves. • Involve the customer in the walk around. Don’t leave the customer sitting alone while you validate the condition of their vehicle. Invite them to do the walk around with you and talk with them about the factors that affect the value of their vehicle — both the positive and the negative. “Enabling consumers to be more involved in the trade-in process has proven to be a winning strategy that helps dealers increase customer satisfaction and stand out from the crowd,” Flores said. w w w. o i a d a . c o m 12/20/13 1:02 PM
w w w. o i a d a . c o m OR_0114.indd 5
NEWS 12/20/13 1:02 PM
Preparing for a New Age in Dealer Compliance
H OW D E A L E R S C A N C O P E , E V E N T H R I V E , I N A B R AV E N E W WO R L D O F I N D I R E C T L E N D I N G P R E S S U R E F R O M E VO LV I N G C O M PLI A N C E R E G U L AT I O N , LE N D E R C H A LLE N G E S A N D R E G U L AT O RY S C R U T I N Y.
Failures in the mortgage lending industry played an important role in the recent economic crisis. In response, Congress passed legislation that created the Consumer Financial Protection Bureau and required a number of consumer real estate lending changes. Naturally, the new CFPB has focused an enormous amount of its attention on the mortgage finance industry. It has created numerous new regulations and modified existing ones. As a colleague says, the mortgage industry has experienced a decade’s worth of regulatory change in just a few years. Many of the regulatory changes become effective this month (Jan. 2014). So lend a sympathetic ear to your friends in the mortgage lending industry. They might return the favor in the near future. With a bulk of its mortgage-related efforts launched, the CFPB will now have more time to focus on other industries, such as consumer auto lending. The forecast for regulatory attention in the coming year has its roots in events from 2013. Last year, the CFPB published Bulletin 2013-02 in March on indirect auto lending and compliance with the Equal Credit Opportunity Act. The bulletin didn’t create a new regulation or modify an existing one. Instead, it notified the marketplace of its conclusion that common dealer discretionary rate markup and dealer compensation practices are resulting in credit discrimination violating the ECOA. The CFPB also interpreted common lender-dealer interaction as sufficient to classify lenders as “creditors” under ECOA requirements – which makes lenders responsible with dealers for rate markup ECOA violations. A final point in the bulletin was the CFPB’s suggestion that alternative dealer compensation methods would reduce or OIADA
eliminate the ECOA compliance risk, such as flat fees. The bulletin sparked concern and debate in the industry. How did the CFPB reach the conclusion that dealer discretionary rate markups plus dealer compensation methods were resulting in credit discrimination? In June and again in October, members of Congress asked the CFPB for an explanation of the data and methods used to conclude that discretionary rate markups and dealer participation are causing ECOA violations. Part of the concern is that dealers are generally not allowed to collect and record a buyer’s gender, age, race and other information about a buyer’s status in groups protected under the ECOA. So how can a dealer, lender or even the CFPB analyze auto loan portfolios to determine if violations are occurring? The CFPB provided information on how it analyzes data for gender and race/ethnicity using U.S. census data in a few presentations, including its November forum on preventing illegal discrimination in auto lending. (Visit www. consumerfinance.gov/blog/ category/auto-loans/ for more detail.) Some of the industry concern and debate has been about the accuracy of the methods described. It is still unclear where the CFPB got the data to analyze and whether the programs analyzed are representative of other rate markup and dealer participation programs. Numerous news sources have reported that the CFPB has requested records from a number of large auto finance sources. If the CFPB is receiving and analyzing their data, there will likely be more discussion about the methods used to analyze and the accuracy of results. Does (or should) the law make lenders responsible for dealer discrimination and how JANUARY 2014
can lenders even know that it is happening? Lenders argue that they are not sufficiently involved in dealer’s rate setting to fairly be considered “creditors” (and thus possibly responsible for discrimination) in the credit transaction between dealer and buyer. Staff commentary to Regulation B has been fairly clear on this point for a number of years, providing that a creditor “includes all persons participating in the credit decision. This may include an assignee or a potential purchaser of the obligation who influences the credit decision by indicating whether or not it will purchase the obligation if the transaction is consummated.” There are some legal arguments about the commentary, but the focus of recent discussions has been more on the practical side of how a lender can know if a dealer is intentionally discriminating in its rate markup practices. Even more difficult is the idea that a lender can be responsible for a dealer’s practices when the dealer’s discrimination was unintentional. A dealer may not intend to discriminate in its rate markup practices, but if a protected group statistically ends up paying more, the discriminatory impact on that group is an ECOA violation. The CFPB has made it clear that it intends to find and take action on ECOA violations based on intentional discrimination and disparate impact. The debate is whether, and the extent to which, the ECOA prohibits disparate impact. The U.S. Supreme Court seems interested in this issue and has agreed to hear two disparate impact cases in recent years. Most recently, the Mount Holly v. Mount Holly Garden Citizens case was scheduled to be argued before the U.S. Supreme Court in early December, but settled before arguments. It
was a housing disparate impact discrimination case, but the auto lending industry was interested to see how the Supreme Court analyzed the issues and if it might shed light on analysis for consumer credit. The legality and merits of disparate impact discrimination will continue to be debated well into this year and beyond. It is important to remember that regardless of whether discrimination is intentional or unintentional, in theory, a careful statistical analysis should identify whether gender or race/ethnicity (and possibly other categories) discrimination is occurring. Would flat fee dealer compensation reduce or eliminate the risk of discrimination? If yes, would it do so without negatively affecting the availability and cost of consumer credit? Some have criticized the suggestion of paying a flat fee compensation for dealers, saying it would have a negative impact on the cost of credit for low- and moderate-income borrowers in particular. The argument is that it would shift the dynamic between dealers and lenders and would encourage dealers to move away from seeking the lowest interest rates from lenders to seeking lenders offering the most attractive flat fee compensation structure. The result could lead to higher or less competitive consumer interest rates. Last October a bipartisan group of 22 U.S. senators jointly sent the CFPB a letter with their concerns about the CFPB’s guidance in this area and inquiring about the extent to which it had looked at the impacts of the proposed flat fee approach, such as on the cost of credit for consumers. In a response issued in November, Director Richard Cordray conceded that the CFPB has not undertaken a study of “how market-wide adoption of a single non-discretionary compensation C O N T I N U E D O N PA G E 8
w w w. o i a d a . c o m 12/20/13 1:02 PM
12/20/13 1:02 PM
C O N T I N U E D F R O M PA G E 6
program would affect the availability of credit.” During its Nov. 14, 2013, forum, the CFPB also conceded that establishing a flat fee program may not be a perfect solution. The CFPB noted that it is still interested in ideas and suggestions from the marketplace on how to allow reasonable dealer compensation for credit sales transactions without creating an environment for possible discrimination and without negatively affecting consumer credit or the marketplace. Some of the other options that have been discussed include setting a percentage of the amount financed on a car loan as the dealer payment, or even developing a combined approach that would take into account contract duration and amount financed to calculate dealer payment. Clearly, the discussion on flat fees and dealer compensation in general will continue. What can you do to prepare your dealership and adapt, even thrive, in this new reality for your business? The concerns and discussions about discretionary rate markup and dealer compensation from last year will continue in 2014. There is uncertainty on how some
of these issues will ultimately be resolved. But there is a lot we do know and a lot that dealers can do to prepare and adapt to the increased focus on dealer compliance. Now is the time to respond in a way that may just put your dealership in a position to not only survive but even thrive in this new reality. During the previously referenced November forum “Preventing Illegal Discrimination in Auto Lending,” Cordray told the audience, “Each lender bears the responsibility for policing its own lending program to avoid unlawful practices…” In spite of the attention to this issue, lenders may be hesitant to provide too much guidance or oversight to dealers on how to comply with ECOA for fear of creating liability for themselves. Part of the issue is that the more lenders get involved the more they look like “creditors” under Regulation B and the stronger the argument that they should be liable for dealers’ credit discrimination. So lenders might not tell you what to do or how to do it, but they will clearly require dealers to have up-to-date policies and procedures in place for ECOA compliance. Dealers should make sure that they have these things in place along with staff training,
Congressman Addresses NIADA at Leadership Conference u
JOHN CAR TE R SPE AKS TO NIADA LE ADE RS
OIADA OR_0114.indd 8
dealer compensation. Lenders may set limits on the amount by which you can mark up their buy offers. They may also change whether and how dealers are compensated for any rate markups. Even though we don’t know how those issues may ultimately be resolved, now is the time to evaluate how those pricing elements fit in your dealership’s overall pricing and profit models. Consider how change to those pricing elements will impact your business and how you can respond to various change scenarios. The concern, discussions and uncertainty will continue, but it is still possible to take action on things within your control. Following these three action items will immediately benefit you as a dealer and also your lenders. It will also give you a solid foundation from which to implement any future changes made regarding discretionary rate markups and dealer compensation.
BY CHIP ZYVOLOSKI
CHIP ZYVOLOSKI IS A SENIOR ATTORNEY FOR INDIRECT LENDING AT WOLTERS KLUWER FINANCIAL SERVICES. FOR MORE INFORMATION, VISIT WWW. WOLTERSKLUWERFS.COM/ INDIRECT.
U.S. Delays Health Care Exchanges for Small Dealers The Obama administration is delaying until November 2014 the launch of the federal government’s online health exchange where smaller businesses can shop for coverage. Small businesses with fewer than 50 employees will still have the option to purchase health insurance coverage for workers through the new marketplace but will not be able to do so online. The exchanges are of great interest among auto dealers because the average U.S. car dealership had 55 employees in 2012. Until next fall, employers with fewer than 50 workers will need to use a broker or agent to buy health care plans for employees. According to the Centers for Medicare & Medicaid Services, “We’ve concluded that we can best serve small employers by continuing this offline process while we concentrate on both creating a smoothly functioning online experience in the SHOP Marketplace, and adding key new features, including an employee choice option and premium aggregation services, by November 2014.” The Small Business Health Options Program -- or SHOP Exchange -- has
For more information on ACA compatible insurance plans customized for small groups, visit www. NIADAHealthPlans.com or call 1-888-308-9340.
already experienced delays as the Obama administration focused largely on implementing an insurance marketplace for individual Americans to obtain subsidized health care insurance and coverage. While the health care law is meant to reduce the cost of health insurance, many small business groups have been skeptical, arguing that the law will backfire and lead to increases in insurance costs. For more information on ACA compatible insurance plans customized for small groups, visit www. NIADAHealthPlans.com or call 1-888-308-9340.
Texas Congressman John Carter addressed attendees of the NIADA National Leadership Conference in Washington, D.C. He discussed the CFPB, Affordable Care Act, free enterprise and the entrepreneurial spirit of small business owners, whom he called stalwarts of our economy and country. A video of his presentation is available online at NIADA.tv on the New and Industry Events channels. It can also be viewed via NIADA’s website and YouTube channel.
clear escalation requirements for rate exception decisions and rate exception documentation. Remember that there are compliance companies and consultants in the marketplace who can help you create or update your ECOA program (Do some research to make sure you find a qualified and experienced one.). Once prepared, you will be able to confidently respond to lender questions on your ECOA compliance. Remember, too, that dealers are required to comply with the ECOA even if they hold their own credit contracts – so your preparation will also allow you to confidently respond if your state or federal regulator asks about your ECOA compliance. A second action item is to participate in the industry discussion on discretionary rate markups and dealer compensation. Consider the issues and ideas for how current practices could be improved to help avoid the risk of credit discrimination and offer your ideas to the NIADA staff. There is still time to influence changes to the industry’s best practices and the CFPB’s views on them. A third action item is to be prepared for possible changes in your lenders’ program requirements on dealer discretionary markup and
w w w. o i a d a . c o m 12/20/13 1:02 PM
MANAGEMENT MATTERS OR_0114.indd 9
12/20/13 1:02 PM
NIADA Government Report u
K E E PI N G YO U I N FO RM E D WIT H T H E L AT E S T G OVE RN M E NTAL I S S U E S AN D AC T IVIT Y AF F E C T I N G T H E U S E D CAR I N D U S T RY
Here’s a rundown of some of the latest governmental issues and activity affecting the used car industry from NIADA regulatory counsel Shaun Petersen and NIADA lobbyist Sante Esposito. REGULATORY REPORT NIADA National Leadership Conference: The NIADA National Leadership Conference in Washington, D.C. included a day of seminars provided by key federal agencies that regulate the auto industry. Among them were the Consumer Financial Protection Bureau, the Federal Trade Commission, the National Highway Transportation Safety Administration and the Department of Justice’s National Motor Vehicle Title Information System. The purpose of the seminars was to educate NIADA leadership on the issues and actions taken by the agencies as it related to the automotive industry. Consumer Financial Protection Bureau Debt collection: The CFPB is reviewing debt collection practices to determine if additional rules are needed. The announcement came several months after the CFPB began accepting consumer complaints regarding debt collection practices. The Advance Notice of Proposed Rulemaking addresses and asks for comments regarding nine areas of concern: • Consumer protection issues in debt collections and the government’s authority to address concerns. • The information transfer process on the sale of debts. • The processes of investigating and verifying disputes. • Collector interaction with consumers, particularly interactions governed by the Fair Debt Collection Practices Act. • Any unfair, deceptive and abusive practices concerning sections 806, 807 and 808 of the FDCPA. • Collecting debts beyond the statute of limitations. • Debt collection litigation at OIADA
the state level. • Exemptions under federal law for state debt collection systems under section 817 of the FDCPA. • Recordkeeping and other general compliance concerns. For a copy of the notice, visit consumerfinance.gov. The CFPB is seeking formal comments at www.regulations. gov (regulatory identification number 3170-AA41). In addition, the CFPB is partnering with Cornell University to provide another way for small business and individuals to submit comments, via regulationroom. org. All comments are due by Feb. 10. Auto Finance Forum: The CFPB conducted an Auto Finance Forum to discuss the issue of discrimination by disparate impact through the indirect financing model. The specific question is whether dealer markup compensation policies increase the risk of discrimination through disparate impact. Several federal agencies, industry representatives and other stakeholders were invited to participate. NIADA’s Steve Jordan and Shaun Petersen were among the select group of about 150 invited to attend. Each interested party shared its position on the issue. No announcements were made or resolution reached. A video of the forum can be viewed at www. consumerfinance.gov/blog/livefrom-the-cfpb/. Department of Justice American Banker reported three auto lenders have been referred to DOJ by the CFPB for violations of fair lending laws. The lenders were not publicly identified. Internal Revenue Service Cost of living adjustment to retirement contributions: The IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2014. Some pension limitations, such as those governing 401(k) plans and IRAs, remain unchanged because the increase in the Consumer Price JANUARY 2014
Index did not meet the statutory thresholds for an adjustment. Other pension plan limitations will increase for 2014. To read the announcement, visit www. irs.gov, type “2014 pension” into the search box and click the top link. Fast Track Settlement program for small businesses: The IRS announced the Fast Track Settlement program designed to allow small businesses and self-employed individuals who are under examination by the Small Business/Self Employed Division of the IRS to more quickly settle their differences with the IRS. Modeled on a similar program long available to large and midsized businesses with more than $10 million in assets, FTS uses alternative dispute resolution techniques to help taxpayers save time and avoid a formal administrative appeal or lengthy litigation. As a result, audit issues can usually be resolved within 60 days, rather than months or years. Plus, taxpayers choosing this option lose none of their rights because they still have the right to appeal even if the FTS process is unsuccessful. For more information, visit www.irs.gov and type “fast track small business” into the search box. National Highway Traffic Safety Administration Along with naming the 2014 model year vehicles selected for 5-star safety ratings, NHTSA announced updated advertising guidelines for the 5-star safety program. NHTSA said its ratings are always whole numbers and advertisers should not use decimal points. NHTSA also reminded advertisers that 5-star is the highest rating and any attempt to suggest a higher rating is misleading to the public, and clarified that advanced technologies are not part of the star ratings. NHTSA warned that advertisements that do not conform to the revised guidelines could result in “Buyer Alert” warnings, removal from the ratings
12/20/13 1:02 PM
Goes to Washington
NATIONAL LEADERSHIP CONFERENCE
A R OA D T R I P T O T H E C A P I T O L M A K E S A B I G I M PAC T O N L E G I S L AT O R S A N D L E AV E S D E A L E R S H U N G RY F O R M O R E
You can’t actually see the Capitol from the historic Capitol Room of the Fairfax at Embassy Row hotel in Washington D.C. But to the used car dealers, association executives and industry leaders who packed the place on a frigid November evening, it sure seemed like that famous dome was looming right there in the middle of the room. On the opening night of the NIADA National Leadership Conference and Legislative Summit, the Capitol – and the opportunity it represented – was on everyone’s mind. “I’m really looking forward to going to the Capitol,” NIADA president Keith Hagler said. “That’s where we need to be.” Two days later, that’s exactly where NIADA was, capping the most anticipated association event in recent memory with A Day on the Hill. Nine teams of NIADA members stormed the Capitol – figuratively, of course – meeting with the staff of 34 U.S. representatives and senators, including a number of the legislators themselves, to get acquainted, discuss the ins and outs of the used vehicle industry and share their concerns about government’s effect on their businesses. It was an all-out effort to reemphasize NIADA’s first and most vital purpose – to be the voice of the used vehicle dealer in D.C. “They need to hear our voice and they need to hear our story,” explained Hagler, who has made that the top priority of his term. “Especially the Buy Here-Pay Here OIADA
industry, just to use that segment as an example. They really don’t understand who Buy Here-Pay Here dealers are and what we do in the community, how we help our customers each and every day with all the different things we do, and how we fill a big need that’s out there. These people can’t get credit anywhere else and we supply transportation for them. “That’s what I mean by telling our story.” And that was the big story of the NLC. For all its other functions – the annual event brings together NIADA’s officers, committee members and state executives for association business and leadership training – this NLC was special because it marked the first time since 1999 that NIADA brought its leaders to Washington for a chance to interact with legislators and federal regulators. It was that interaction, culminated by A Day on the Hill, that generated the enormous buzz among the 113 attendees. “I think it helps us immensely,” said Ken McFarland, owner of City Auto Sales in Hueytown, Ala., and president of the Alabama IADA. “We were able to get in front of several legislators and we brought the NIADA to them, let them know who we are, what we’re all about, how many people we represent and what impact their legislation has on our industry. “The information we shared with them really opened their eyes to the fact that we really are a big industry and we have a lot of impact on what goes on in America.” JANUARY 2014
Not that all the action was on Capitol Hill. Back at the Fairfax, representatives of the federal agencies that oversee the used vehicle industry – including the Consumer Financial Protection Bureau and Federal Trade Commission – addressed the conference, letting dealers know what is on the regulators’ radar and how to stay in compliance with the ever-growing list of rules governing them. Even more crucial was the chance for dealers to ask questions of the regulators, particularly those from the CFPB, which had previously been unavailable for Q&As. NIADA actually wound up getting a bonus in that regard. The day after leading their teams of dealers at the Capitol, NIADA regulatory counsel Shaun Petersen and executive vice president Steve Jordan were among a select group of 150 of the industry’s most influential leaders invited to participate in the CFPB’s Auto Finance Forum, featuring CFPB director Richard Cordray. NIADA’s legislative committee made a splash, too, announcing its plan to form a task force to provide the association’s Buy Here-Pay Here dealers a perpetual forum in which to discuss and act on issues specific to their segment of the industry. And not only did NIADA go to Congress, Congress came to
NIADA – Rep. John Carter spoke to the conference at a Tuesday night dinner, and fellow Texas Republican Rep. Joe Barton spoke at Wednesday’s luncheon at the Capitol Hill Club. At the luncheon, Barton, whose district includes the NIADA national office in Arlington, Texas, received a donation from the NIADA PAC Fund, which Jordan called a crucial piece of the association’s ongoing efforts in Washington. In his remarks, Barton noted the importance of having NIADA members come to Washington to meet with legislators rather than the usual lobbyists. “If you get to see your congressman or senator, you’re unfiltered,” Barton said. “You’re not a focus group. Most of you represent small businesses. Some of them are second- and thirdgeneration family businesses. … That’s the real world.” Barton’s reaction was not rare. In fact, legislators and staffers were unanimously receptive to the visits from constituents, according to the dealers who met with them, especially since the NIADA contingent came offering assistance as a resource rather than seeking favors. “We weren’t going in asking for anything,” said Carolinas IADA president Michael Darrow, president of The Auto Finders in Durham, N.C. “It was just opening channels of communication,
Texas Congressmen John Carter (left) and Joe Barton were featured speakers at NIADA’s National Leadership Conference.
w w w. o i a d a . c o m 12/20/13 1:02 PM
letting them know who we are at the national and state level. Now in the future if we do have a need we’ll have the opportunity to come back and talk to the same people and get the assistance we need. “A lot of them were shocked that we weren’t there asking for something, that we just showed up to say, ‘Hi, we’re NIADA and we’re car dealers,’ and to kind of explain our industry to them, which was beneficial to everyone.” Those who attended the NLC had no doubt it was beneficial to NIADA and the used vehicle industry. They left Washington excited by their success and ready to use the experience to maintain the relationships they built – and to work on building new ones with officials in their state governments. The goal now is to increase that impact. And, Hagler said, the way to do that is obvious.
w w w. o i a d a . c o m OR_0114.indd 13
“This is what we need to be doing,” he said. “We need to come back again next year and hit it strong and hit it again. We need to come back every year and get in front of them, let them know who NIADA is, what we stand for and all the people we represent.”
NEWS 12/20/13 1:28 PM
HOW TO HIRE TOP S
With all the advances in every area of life, you’d think hiring the right salespeople would be an exact science at this point. It isn’t. Hiring the right people is a combination of science and philosophy and you have to utilize both effectively to hire someone who ultimately “makes it.” Here are the aspects to “employ” in order to employ the right salespeople. KEYS TO HIRING TOP SALES REPS Only hire employed winners. An unemployed salesperson out looking for a job is a major red flag. Unless someone’s company just blew up, or there is some other crazy extenuating circumstance, a salesperson looking for a job should, at the very least, still be employed.
That said, an employed salesperson out looking for a job is a yellow flag. People do switch jobs for a variety of perfectly legitimate reasons related to family or other solid personal reasons. Just make sure the reason is a good one and they can back up the stellar sales skills they claim to have. In reality, most salespeople are looking for a job because they can’t sell and they either got let go or are about to be. Don’t hire someone else’s problem without a lot of due diligence. Only hire within your industry if you recruited the person. If you find a stellar salesperson you want working for you instead of the competition, great. Otherwise
Also, truly great salespeople can make the transition from products to services and from phone sales to in-person sales and vice versa. Hire self-esteem, selfconfidence and the right attitude. Lacking any of these three is the number one reason salespeople fail. A lack of activity, blaming the economy and other outside circumstances, and ultimately not doing what needs to be done every day whether you feel like it or not, all come down to an issue with one or all of these three. Also, you want someone with a strong work ethic who is seeking a career instead of a job.
Complete this test or certify below that you have read the articles for January 2014
“Tips to Improve Trade-In Experience for Consumers” What are the four tips offered in the article? ______________________________________________ ______________________________________________ ______________________________________________ ______________________________________________ ______________________________________________ ______________________________________________
“Building compliance into your dealership”
What type of files discussed in the article present great compliance risk? a) Personnel files. b) Electronic files. c) Loan files. What are some of the questions dealers need to ask in regards to forms? ____________________________________________________ ____________________________________________________ ____________________________________________________
I certify to OIADA that I have personally read these articles in The Oregon Dealer News Magazine for January 2014. My Name _________________________________________________ Dealership Name ___________________________________________ Dealership # _______________________________________________ Dealer License Expiration Date: (Month)__________________________ (Year)______________
O I A D A OIADA OR_0114.indd 14
avoid your industry like the plague. Someone within the same industry looking for a job elsewhere does so because they can’t sell. Again, unless there is an extenuating circumstance with the company or product, the problem is the salesperson. Always be on the lookout for good salespeople. Even if you are not hiring right now, build your list of candidates for when you are. That great salesperson who just sold you your car, boat or home alarm system is a good prospect to come work for you now or at some point in the future. It’s simple, winners win. A winning salesperson in another industry can learn to sell just as effectively in your industry.
Read & Respond or Certify Below
C O N T I N U I N G
E D U C A T I O N
P R O G R A M
K EYS TO HIRING RIGHT SALESPEOPLE
Signed: ____________ Date_______________
FAX TO: 503-364-7331 or mail to OIADA, 1475 Capitol St NE, Salem, Oregon 97301
w w w. o i a d a . c o m 12/20/13 1:02 PM
P SALES REPS Have a hiring process. Have several people put their eyes on a potential hire. Meet all their decision makers such as spouses. Do all your testing, check all paperwork, cross all your T’s and dot all your I’s. Don’t take shortcuts, have a process and stick to it like a pilot doing preflight. Shake up the testing process. Telling an applicant you are about to hire that they did not get the job, bringing them to an event with an open bar, playing golf or visiting them at home are some great ways to find out what people are really like. While you should absolutely use personality tests, in-office interviews and other standard, accepted hiring practices as your foundation, realize that
most tests can be beaten and most people can put their best mask on temporarily. To find out what people are really like, move them out of the typical hiring environment. Be skeptical of references, especially personal references. Anyone can find a brother-inlaw, friend they went to college with or a third cousin twice removed to say the candidate is the best thing since the wheel. If they are that good, the wheel never would have been invented. Start not with what your company can do for them… Be wary of people who lead by asking what the base or draw is and what benefits they will get. Candidates should be transparent and forthcoming. Yes, applicants should be
willing to give you access to all their social media information, and all their other information for that matter. That said, you should be able to find enough information on applicants without having to get social media passwords. It’s just another good test to see if the applicant may have something to hide. Also, someone with a very small or no online footprint is an orange flag. Investigate further. Have standards and stick to them as if your life depends upon it… Because the life of your business does depend upon it. In addition to hiring standards, you need performance standards and time lines that are agreed upon. Accountability is extremely important.
Hire slowly and fire quickly. Do the work and don’t cut corners. A lot of work on the front end will avoid a lot of pain once you hire the person and they don’t work out. Also, once you realize you have a duck instead of a swan and they are not living up to the standards agreed upon above, cut the cord fast. Provide the right environment. It doesn’t help to hire the right people if you bring them into an environment where chronic underperformers, negative people, a lack of support and other similar cancers exist.
BY JOHN CHAPIN COMPLETE SELLING, INC.
CMD Travels to Sunny Florida
NIADA’s Certified Master Dealer course will travel to sunny Florida January 1820. The class will be held at Hilton Tampa Airport in Westshore. Also look for a CMD class near you! The CMD program helps dealers manage and grow their businesses. It has become one of the industry’s most respected training programs. Be proactive in growing your business! Dealers who attend this training bring a wide range of experience to each class and leave with new strategies for analyzing their business practices and increasing their bottom line. Topics include general management and increasing your effectiveness as a business professional and your company’s leader;
w w w. o i a d a . c o m OR_0114.indd 15
financial management and how an extensive analysis of your financials will guide your decisionmaking and marketing and merchandising strategies and the basis for each.
Instruction is provided by Joe Lescota, NIADA Director of Dealer Development and former retail automotive executive with more than 25 years of frontline dealership, selling management and training experience. “I wasn’t sure what to
expect from the class because after being in this business for over 10 years, I began to fool myself into thinking that as president and CEO I already knew everything about the car business,” said Michelle Groover of Members Auto Choice (Lawrenceville, Ga.). “Boy, was I wrong!” Eric Freeman, President of Freeman Motor Company (Portland, Ore.), asks, “Can you afford to keep doing things the way you’ve always done them?” Registration for the Florida class is now open. CMD classes are also scheduled in Alabama, Virginia and Iowa. For more details and to register, contact Georgia Brown at Georgia@niada. com or visit www.niada. com/certified_master_ dealer.php.
NEWS 12/20/13 1:02 PM
Associate Members ADVERTISING Affiliated Media LLC Aaron Jarvis 503-683-2574
COMMERCIAL CLEANING JaniKing Morgan Thomas 541-868-8080
Carsforsale.com Aaron Oestretch 605-306-3302
PRIVATE AUCTIONS Brasher’s Northwest Auto Auction Mark Melton 541-689-3901
AutoTrader.com Ed Merrick 503-747-9162
Brasher’s Portland Auto Auction Jerry Hinton 503-492-9200
Carjohnny.com Thomas Garza 888-435-3000
Crosspoint NW Dealer Auction Brian Hardy 503-594-2800
Cars.com James Lynch 312-601-5052
Manheim Portland Auto Auction Ray Priest 503-286-3000
The Oregonian Rich Fryback 503-221-8486
OUT-OF-STATE AUCTIONS Adesa Seattle Auto Auction Jason Arcaro 253-735-1600 x 213
UsedCars.com by Dealix Tamara Garris 847-397-1700
DAA Northwest Mitzi Vanvoorhis 509-244-4500
AUTO SERVICES & ACCESSORIES Auto Marketing Specialist Gary Palaniuk 503-519-7725
Manheim Seattle Auto Auction Ray Priest 206-762-1600
Northwest Auto Accessories Craig Lessard 503-288-5700
PUBLIC AUCTIONS & AUCTIONEERS Commercial Industrial Auctioneers Ray Beal 503-760-0499
Show Room New Mike Barthe 360-882-8162
Insurance Auto Auctions, Inc. Ryan Hall 503-253-1500 Petersen Auction Group of Oregon Curt Davis 541-689-6824
There is not another association that works harder than we do to provide its vendors with exposure, leads and other lucrative opportunities. Please review some of the following programs and areas that we help promote those businesses that support OIADA. Marketing: Opportunity to give coupons to dealer members, included in all dealer packets. Ad space on inside pages all presentation folders sent throughout the year. Meal sponsorships available for Pre-License classes, Title & Registration classes. Databases: Access to all OIADA membership databases for mailings. We require a review of the info that you will be sending to our members. Associates may have a list quarterly or 4 times a year. Each time you get a list you may use it only once for a mailing. Just send us an e-mail request for current database and we’ll be glad to send to you once we review your marketing page.
LEASING Oregon Roads, Inc. Joseph McKinney 541-683-2277
Reliable Credit Association David Marx 503-462-3022
SERVICE CONTRACTS A.U.L./D.P.C. Jim Bangert 360-834-3333
Rick Leathers Auctioneers Rick Leathers 503-668-5326
Smartway Auto Advisors Sheldon Harris 503-795-7700
Woodburn Auto Auction Steve Morin 503-981-8185
The Equitable Finance Co. Brandon Fox 503-808-7939
DEALER SOFTWARE Frazer Computing Michael Frazer 888-963-5369
United Finance Todd May 503-238-6488
FINANCING Credit Acceptance John Bragg 360-980-2214 Credit Concepts Jason Moon 541-342-8545 JP Morgan Chase Auto Finance Jeff DeGarmo 503-201-4370 Lobel Financial David Lobel 714-816-1301 Nationwide Insurance Mark Tischer 503-339-4165 Oregon Auto Finance Gary Veum 541-868-0472
Oregon Community Credit Union Rich Black 541-681-6311
Automotive Business Developers Shannon Meany 541-944-9186 Auto Services Company Susan Williams 800-442-7116 Protective Life Insurance Dylan Doran 818-836-1455
FLOORPLAN FINANCING Floorplan Xpress Josh Chandler 503-621-9260
TRAINING OIADA/NIADA Certified Pauline Sill 503-362-6839
NextGear Robert Torbet 503-358-3911 INSURANCE & BONDING Hecht & Hecht Insurance Agency Evelyn Hecht 503-288-6371 Shepard & Shepard Business Solutions Todd Shepard 509-396-0488 The Summit Group of Oregon John Petrie 503-581-2825
OIADA Magazine & Service Provider Listing: Your company and contact information will be listed in OIADA’s Dealer Service Provider Directory in our magazine that is distributed to around 2000 dealers every month of the year. We also have great rates for those companies interested in additional exposure in OIADA’s popular and well read “Oregon Dealer News” Website Listing and Link: If your company has a website, we will add your company link to our company website as well as listed in Oregon Dealer News. Regional Meetings (7) and Membership Drives: Many of OIADA’s Associate Members like to get involved in helping with OIADA’s regional meetings. Also our auction hosted membership drives. Those vendors who agree to participate get the benefit of meeting larger groups of dealers in one location while being able to establish a relaxed relationship with future potential prospects.
Special Speaking and Sponsorship Opportunities: OIADA is always having events going on where the environment is ideal for sponsors to participate. Some examples of this are regional meetings, golf tournaments, auction membership drives and of course our annual convention and trade show. Developing Strategic Relationships: Network with other companies who associate themselves with our association. Either during our regional meetings, membership drives or board meetings. Annual Convention and Trade Show: Participate in our once a year convention and trade show for maximum exposure and opportunities. Call for information on Reception, Tradeshow, Meal and Golf Tournament sponsor levels.
PRODUCTS & SERVICES
The NIADA Brings Exclusive UPS Savings to its Membership u
N E W SAVI N G S PROG R AM O F F E R S E XC LU S IVE D I S C O U NT S
NIADA is pleased to announce that we have selected UPS as our preferred member shipping carrier. This decision was based on the needs of NIADA members, as well as the opportunity to offer an enhanced member savings program. The UPS Savings Program offers NIADA members some of the most competitive rates OIADA OR_0114.indd 16
available on shipping services along with more service options, superior ground-delivery coverage and overnight delivery by 10:30 a.m. to more zip codes than any other carrier. Plus, with the convenience of more drop-off locations and innovative UPS technology to help streamline shipment processing, members can receive value JANUARY 2014
that goes beyond cost and ontime delivery. Through the program, NIADA members can now save up to 36 percent on a broad portfolio of UPS shipping services, such as up to 36 percent on UPS Air letters; up to 32 percent on UPS Air packages over one pound; up to 34 percent on UPS International imports and
exports and up to 24 percent on UPS Ground shipments. Savings begin at 70 percent on UPS Freight® shipments over 150 lbs. (Discounts exclude UPS Express Critical and UPS Next Day Air Early A.M.) Members interested in enrolling in our new UPS Savings Program can visit savewithups.com/niada to start saving. w w w. o i a d a . c o m 12/20/13 2:25 PM
REPRESENTING ALL AUTO, TRUCK TRAILER, RV AND POWER SPORT DEALERS OF OREGON
Business Name__________________________________________________________ Dealer# ____________________________________________Expiration___________ Name_________________________________Spouse__________________________ Business Address_________________________________________________________ City________________________________State/ZIP___________________________ Mailing Address (if Different) ______________________________________________ Business Phone #________________________________________________________ E-mail________________________________________________________________ Cell____________________________________Fax___________________________ Signature______________________________________Date_____________________
Upon acceptance as a member, I pledge to uphold the OIADA Code of Ethics and all laws pertaining to the automobile business.
PAYMENT MUST ACCOMPANY THIS APPLICATION Annual dues - $325 PAC – Political Action Committee – Keeps us strong at the Legislature! Your voluntary $50 contribution is an Oregon Tax Credit taken directly off your state tax liability.
PAC $50 $375 Your contribution will actually cost you nothing.
Check # _________________
Exp. ________/________ CVC __________
Renew Date ___/1/___
Trans _____ QB _____ PAC _____ Access _____ ODN _____ MBR_____
By completing this form, I am consenting and giving OIADA/NIADA, its affiliates and subsidiaries, my permission to contact me and provide information to me at the mailing and email address, telephone and fax numbers I have provided.
•A uction Discounts up to $900 • Dealer Forms savings over $100 • Education Free or Discounted savings of more than $100 • Oregon Dealer Magazine value $75 • Oregon State Convention, savings of $100 •Quality Dealer of the Year •Website Links •Regional Meetings savings $50 • Mentorships • Leadership Opportunities • Governmental Issues / Lobbyist • Leadership Opportunities • Membership and Access to NAIDA value $100 • Discounts with NIADA Partners • Benefits • Education • 20/20 Club • National Convention/ Tradeshow
Total Value of OIADA Membership not including NIADA discounts more than $1425
OIADA 1475 Capitol St. NE, Salem, OR 97301 | Phone 503-362-6839 | Fax 503-364-7331 w w w. o i a d a . c o m OR_0114.indd 17
NEWS 12/20/13 2:25 PM
Building Compliance Into Your Dealership… It’s Good Business. u
PROVIDE UP-TO - DATE DOCUME NT S FOR CU STOME RS AND LE NDE RS
This time of year many dealerships are thinking of the busy tax return season when customers are flush with cash for down payments. It’s also a time to reflect back on 2013 for a moment and contemplate what we’ve learned over the past year that will influence the way we do business in the future. Regulatory change and government focus on our business is increasing. We now know that others are looking at the industry with deep scrutiny. The public forums and participation by lenders, customer advocates, multiple regulatory agencies and national associations have now given insight into how others view the auto industry and the concerns they have about many common business practices. Before any new regulations, rules or guidance are issued, dealers can take steps to minimize the risk to their dealerships as well as to their customers and vendors. In the past year many regulatory changes have been enacted across the country – some at the federal or state level while others by local governments or agencies. These new regulations and rules affect many parts of the business, but none more directly than in the finance office. Whether the customer is paying cash or acquiring a loan to finance the vehicle purchase, the forms used to close the sale are the same. With loan files containing an average of 25 pages, the risk of noncompliance is always great. One common misconception is that if a lender accepts a contract package and funds a loan, the dealership is now off the hook, but that’s far from true. Many lenders also fall short of adequately managing their accepted forms lists. This list
OIADA OR_0114.indd 18
may be provided to dealers or to their internal staff, so dealers could actually be using the wrong forms or maximum fees allowed by law. This may go Wunchecked until an audit is performed and a large portfolio of loans has been originated. Since the loans were originated within the dealership, the dealership may share in the responsibility for correcting the loan documentation or financial liability for uncollectible loans. In spite of this risk, many dealers are still pulling forms from a pre-existing stack of forms and completing them in the same manner until they’re all gone. If you think this is an acceptable practice, here are some questions that you may ask yourself: • Are they the most current versions? • Do they provide the customer with the proper disclosures, rights and privileges under the current law? • Are the fees, payment calculations and interest rate calculations being used in the finance office accurate? There are a few more questions that need to be answered of your compliance management process: • Who is tasked with ensuring that the forms used in your dealership are the most current and compliant? • Do you depend on information about proposed and enacted legislation from your forms provider, DMS, legal counsel, finance manager or back office? • How often do you review the forms versions, calculations method, and allowable fees? • Do you understand your liability in providing outdated forms, incorrect fees and incorrect calculations to your customers and lenders? These are just a few questions to consider when setting up a
forms compliance management program within your dealership. The extent of your forms management program may well depend on the types of business you are engaged in. For instance, if you are engaged in primarily cash sales, you may have little exposure. But if you are engaged in in-house financing or financing through multiple indirect lending sources, your risk may be much greater. There are few immediate steps you can take to minimize your risk: • Establish a point person who is responsible for managing forms, fees and calculation methods. • Sign up for compliance notifications from a trusted source. There are many companies who will provide email notifications when regulations change that affect your business. • Audit your dealership. Many dealerships have their own legal counsel. Have your legal counsel or trusted advisor review your completed loan packages for compliance. • Stick to a schedule. A quarterly review of your compliance concerns could drastically reduce the risk to your dealership. If nothing else, the current regulatory environment provides ample motivation for creating a compliance regimen within your dealership. But the fact is it’s just good business to provide up-to-date documents that give your customers and lenders the correct disclosures, rights and privileges under the laws.
BY CHET HEUGHAN
CHET HEUGHAN IS DIRECTOR OF APP ONE RISK MITIGATION SERVICES, INDIRECT LENDING FOR WOLTERS KLUWER FINANCIAL SERVICES. FOR MORE INFORMATION, VISIT WWW.WOLTERSKLUWERFS.COM.
w w w. o i a d a . c o m 12/20/13 1:02 PM
12/20/13 1:02 PM
12/20/13 1:02 PM