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AU G U S T 2 0 2 2 • M I D AT L A N T I C AU TO D E A L E R S U N I T E D. O R G

MIDATLANTIC

DEALER NEWS

H I G H L I G H T I N G P E N N S Y L V A N I A • M A R Y L A N D • D E L A W A R E

Time to Recession-Proof Your Dealership RECAP:

NIADA Hosts 76th Convention & Expo, Las Vegas

LEGISLATIVE HIGHLIGHT:

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Positive Outlook for 2022’s Buy-Sell Market

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House Passes Rep. Schmitt’s Abandoned Vehicle at Vehicle Auctions Bill

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MIDATLANTIC AUTO DEALERS UNITED 1501 North Front St., Harrisburg, PA 17102

Do you need a Business Disaster Plan?

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MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022 | 1

AUGUST 2022 | CONTENTS

The official magazine of the

MIDATLANTIC INDEPENDENT AUTO DEALERS ASSOCIATION

PENNSYLVANIA • MARYLAND • DELAWARE 1501 North Front St., Harrisburg, PA 17102 (717) 238-9002 midatlanticautodealersunited.org Copyright 2022 Chris Smiley - Advisor Mountville Motor Sales, Columbia, PA rcsmiley@comcast.net Noah Melamed- President Ticket to Ride Auto, Lancaster, PA nmelamed@yourttr.com Bert Straub, President - Elect 1st Choice Auto LLC, Fairview, PA bertcstraub@gmail.com John DeFilippo - Treasurer DeFilippo Bros. Motorcars, Prospect Park, PA john.m.defilippo@gmail.com Clint Weaver- Secretary America’s Auto Auction Harrisburg, Mechanicsburg, PA clint.weaver@americasautoauction.com Tom Hodges, Vice-President Tom Hodges Auto Sales, Hollywood, MD tom@tomhodgesauto.com Dan Limongelli, Vice-President Jo Dan Motors, Plains, PA jodanmotors@gmail.com Michael Mansour, Vice-President Car Connection, Inc., New Castle, PA mike@carconnection1.com Beth Melamed, Vice-President Ticket to Ride Auto, Lancaster, PA bmelamed@yourttr.com Tom Brandis • tombrandis@netscape.net Advantage Auto Sales & Credit, Quakertown, PA Lisa Cohowicz • lisac@nepautoauction.com North East Pennsylvania A/A, Scranton, PA Jeff Dreier • dreierauto@hotmail.com Dreier Auto Sales, Shavertown, PA April Hollobaugh • ajautosalestitusville@gmail.com A&J Auto Sales, Titusville, PA Kevin Luring • k.luring@yahoo.com ADESA PA, York, PA James Makia • james@exclusivemotorcarsmd.com Exclusive Motorcars, Randallstown, MD Dan McNamee • dtlcars@aol.com Daniel Thomas Auto Sales, Croydon, PA Gregg Pachik • gregg.pachik@manheim.com Manheim Philadelphia, Hatfield, PA

FEATURES 2 | NIADA Hosts 76th Convention & Expo, Las Vegas For the first time in three years, the used vehicle industry’s premier event was in Las Vegas, June 20 - 23. More than 1,600 independent vehicle dealers and exhibitors gathered for the four-day event. 4 | Time to Recession-Proof Your Dealership There is one thing you can always count on in the auto business and that is the effect of economic swings. Vehicle sales are a leading indicator of these swings. 6 | Do you need a Business Disaster Plan? By devising a disaster plan, you guarantee that you can keep moving forward to meet client expectation both during and after a disaster. Check out a few suggestions to add to your disaster plan. 8 | Positive Outlook for 2022’s Buy-Sell Market The auto dealership buy/sell market shattered records in 2021 with 383 transactions, representing 830 franchises, completed—a figure 32.5% higher than 2020’s prior record, according to the Blue Sky Report by Kerrigan Advisors. 13 | A Failure to Plan Is a Plan to Fail: Developing a Written Incident Response Plan Security breaches happen every day, and it’s only a matter of time before it happens to you. As we’ve all heard, a failure to plan is a plan to fail. Developing a plan for how your company will respond to a breach will help you quickly and efficiently react while also allowing you to avoid the reputational harm associated with failing to appropriately address a security breach. 19 | 2022 Dealer Discount Books are available! Get in touch with us to have your discount book on hand.

DEPARTMENTS 14 | 17 |

The CarLawyer© Legislative Update: House Passes Rep. Schmitt’s Abandoned Vehicle at Vehicle Auctions Bill (House Bill 2372)

18 | 20 |

Auction Directory MARIADA ON THE SPOT Dealer Services 22 | Membership Application 24 | Order Form for Dealership Supplies (PA & MD) q

MIDATLANTIC INDEPENDENT AUTO DEALERS ASSOCIATION SPONSORS

Kerri Rotunda • kerrir@corryade.com Corry Auto Dealers Exchange, Corry, PA George Smouse • gasmouse@zoominternet.net Smouse Trucks & Vans, Mt. Pleasant, PA Steve Worley • worleymotors@hotmail.com Worley Motors, Enola, PA Jay Zimmerman • jay@zimmermansauto.com Zimmerman’s Auto Sales, Mechanicsburg, PA WOULD YOU LIKE TO RECEIVE A DIGITAL EDITION OF THE MIDATLANTIC DEALER NEWS MAGAZINE? Email shannon@piada.org MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022 | 1

q PRESIDENT’S MESSAGE

NIADA Hosts 76th Convention and Expo, Las Vegas

NOAH MELAMED, PRESIDENT MIDATLANTIC REGIONAL IADA OWNER, TICKET TO RIDE AUTO SALES FINANCE, LANCASTER, PA For the first time in three years, the used vehicle industry’s premier event was in Las Vegas, June 20 - 23. More than 1,600 independent vehicle dealers and exhibitors gathered for the four-day event. Attendees gathered to honor the best in the business, meet and network, find the latest products and services, and learn from the most comprehensive dealer education in the independent space. The education program included more than 60 workshops, panel discussions, micro-sessions and general sessions led by some of the used vehicle industry’s top names. The keynote address was delivered by Jon Taffer, the creator, executive producer, and star of Paramount Network’s Bar Rescue. He kicked off the event on Tuesday with a hardhitting approach to those in attendance. Scott Allen, owner of Auto Land in Haltom City, Texas, began his term as president of the NIADA for 2022-23 by accepting the President’s Ring and summed up his goal for his term in one word: Execution.

“Execution of our strategic plan and the important initiatives we’ve started,” he said.

“With the help of three boards, 11 committees, a commission and two councils, I believe we can reach our goals this year. In addition, there will be input from 53 at-large dealers on those committees.” “We, as the NIADA board, are focused on members first and our state associations next – their growth and success – all while maintaining the viability and sustainability of your national association...while also maintaining the best member benefits, the best advocacy in D.C. and the states, and the best education, conventions and training we can give you.” Dare Saul, owner of D3 Auto Sales in Des Arc, Ark., and winner of Arkansas’ State Quality Dealer winner, won a sparkling white 2018 BMW 330i SPT with just 22,000 miles on the odometer in an auction held on Thursday, the final day of the Convention.

Manheim donated the vehicle and the bid was the highest in the benefit auction’s 10-year-history. Over the past 10 years, benefit auctions at the NIADA Convention have raised $252,000 for the NIADA Foundation. All sale proceeds go directly to the NIADA Foundation, which coordinates

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the association’s commitment to charitable giving and education. In addition to making numerous donations to charities nationwide and providing matching funds for local charitable projects, the Foundation has raised hundreds of thousands of dollars to assist members of the automotive community affected by hurricanes and other disasters. In addition, it has established endowments that fund university scholarships for students pursuing careers in the automotive industry. Tommy Gregory, owner of Abilene Used Car Sales in Abilene, Texas, was named the 2022 National Quality Dealer of the Year by the National Independent Automobile Dealers Association, the Association’s highest honor at the close of NIADA’s 76th annual Convention and Expo.

Gregory was chosen from 12 State Quality Dealer finalists for the highest honor awarded among NIADA’s dealer members. He is deeply involved with Texas IADA, serving as a leader in legislative advocacy and a top contributor to the association’s political action committee. n

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022 | 3

COVER STORY

Time to RecessionProof Your Dealership By Michael Renaud, General Manager, Alan Ram’s Proactive Training Solutions With new inventories at record low levels, used car market pricing moving dramatically, and profitability at an alltime high for many dealers, a declining SAAR could be a leading indicator that things may be about to change, maybe not today, or next month but we can all feel the earth shifting a bit under our feet. And we are not alone, analyst predictions are mixed as to what the rest of 2022 looks like, so let’s start preparing now!

In Good Times, Don’t Let the Basics Fly Out the Window When times are good, sales are booming and profits are high, it often prevents us from sticking to the fundamentals. Suddenly there’s no need to confirm that appointment and you aren’t rushing to make those follow-up calls anymore. You can become lackadaisical and like Alan always said, “Good times create bad habits and Bad times create good habits. Let’s not wait till times get bad before we start working on good habits. All those basics you learned as a rookie, and your car sales training, suddenly go out the window because you’re living the high life, baby. But then what happens when the market turns and you need to keep yourself recession-proof? Aside from knowing the steps to selling a car, successful salespeople will also look for ways to create opportunities, versus waiting for them. They learn how to generate and cultivate opportunities and practice those habits daily. Have you lost focus on the basics?

It’s Time to Recession-Proof Your Dealership There is one thing you can always count on in the auto business and that is the effect of economic swings. Vehicle sales are a leading indicator of these swings. When those highs begin to drop, suddenly you realize you are headed into a deep economic abyss where you are struggling just to get a lead to call you back. Despite your previous six-figure paycheck, you are back out on the front line waiting for someone, something to close, or struggling with what to say on the phone. Your team is giving away all the gross, getting about a quarter of the inbound sales calls you were getting before, and desperately discounting your merchandise even before you’ve set an appointment with the lead. Now is the time to avoid the abyss and prepare your dealership to make you and the dealership recession-proof.

The Hunter Versus the Farmer When it comes to sales performance and work habits you can generally classify all salespeople into two categories: The Hunter and the Farmer. Hunters typically make great closers. They know how to react off-the-cuff, and they know their targets when they see them. Just like a hunter, they’re quick and impatient to shoot. Hunters can seem aggressive, in control, and laser-focused on immediate results. They find their stoop, shotgun in hand, and wait to shoot. If nothing passes, they don’t shoot, and they don’t eat. Every dealership needs a set of hunters or closers that they can rely on to “strike while the iron

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is hot.” Hunters can close opportunities in the showroom at any given time.

The most successful salespeople in this industry understand the importance of cultivating and generating opportunities on their own. Unfortunately, these types of salespeople tend to have such a strong focus on those immediate results that they lose focus on how to create opportunities. This is exactly what leads to that vicious up and down income cycle - crazy record-breaking sales months and incredibly fat paychecks, followed by the proverbial plunge to smaller checks and angry spouses. Farmers on the other hand are generally much more patient and pay more attention to the small tedious steps necessary to create more opportunities. They are not as concerned with temporary satisfaction. They’re not looking for a one-and-done feast for the night or hanging on the point and waiting for that lucky buyer. Farmers will put in the work, sometimes behind the scenes. They’ll take those small steps to carefully cultivate not one- but several- opportunities. Farmers tend to get placed in the back of the business, like

as a salesperson you need to be a little bit of a hunter. But in today’s car business, many are losing opportunities long before they have a shot at closing something. You want to have a combination of both hunter & farmer mentalities. Increasingly, shoppers are online, which means that you need to get really good at farming and cultivating opportunities and creating them instead of waiting for them to land on your lap.

Internet departments where details are more important. But today, the farmers in this business are the ones who will see more success and be paid the most on the showroom floor. Hunters ride the waves created by the economic environment with no control over the ups and downs. Farmer’s control their own economic environment with a steady pipeline of customers they have been cultivating.

What Your Daily Habits Say About You – Are You a Cultivator Or a Waiter?

No matter the time of year, current book values, inventory levels, market adjustments, good months, or bad months in the business, you have the ability to create your own success without relying on your dealership’s leads. Every dealership wants a good hunter and I’ve met some pretty talented ones in my day. When you have someone in front of you, it is vital to know how to close them. So yes,

When you walk into work every single day, do you have a plan? Are you proactive and planting seeds of opportunity for sales down the line? Are you making time in your schedule for those outbound calls and filling your funnel with opportunities? Are you asking for referrals and staying top of mind with your current customers? Doing those small farm things today will get you results tomorrow. Your future depends on those things.

Farmer Fundamentals to Recession-Proof Your Paychecks Here are some farmer-fundamental habits that will get you on your way to long-term success and recession-proof paychecks: These are your ABCs. • • • • • • • • • • • • • • • •

Daily follow-up calls Confirm all appointments Video messages whenever possible Follow up with no shows Follow up no appointment leads Follow up with your recent buyers Ask for referrals daily Connect with your recent buyers on social media Send birthday cards Send video emails just to check-in Follow up calls every 90 days to stay top of mind Call your mid and end-of-term previous buyers – everyone has equity now Call all 2017, 18, and 19 owners, tons of equity Complimentary appraisals Update the drivers in your buyers’ households Send service reminders

The Importance of Cultivating and Generating Your OWN Opportunities Don’t let the good times prevent you from sticking to the fundamentals. Invest more time in this area and adopt a farmer’s mentality on the showroom floor so you create your own stream of leads and have shoppers reaching out to you regardless of the economic time, inventory levels, or blue book values. Taking the time for these small farmer techniques today will keep you profitable tomorrow and will prevent you from experiencing the effect of looming dealership downswings. The most successful salespeople in this industry understand the importance of cultivating and generating opportunities on their own. And they invest more time in this area before the shopper contacts the dealership. They don’t wait for opportunities to come to them - they create them. They know that spending more time here on those little things – the follow-up calls, the email check-ins, the video messages, the birthday cards, asking for referrals and good reviews, connecting on social media — all of these small things will eventually create opportunities that will pay them back greatly. These are the salespeople that have customers calling them daily. Imagine what you would save on advertising if your dealership were focused on these fundamentals. A wise person once said, “If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime.” That’s making your dealership, recessionproof. n Michael Renaud is the General Manager of Alan Ram’s Proactive Training Solutions. With expertise in BDC Structure/ Management, Sales Management, Fixed Operations, Marketing, buy/sells and Operations, Michael has worked for both franchised and independent dealers. He brings his breadth of experience across the dealerships to help clients improve their bottom line results.

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022 | 5

SHEPARD & SHEPARD FEATURE

Do you need a Business Disaster Plan?

By Todd Shepard Founder of Shepard & Shepard Insurance Solutions

ave you ever put any thought into what might happen to your dealership if a catastrophic event were to occur? Preparing for disaster can reduce fear, anxiety, and losses that accompany those disasters. By devising a disaster plan you guarantee that you can keep moving forward to meet client expectation both during and after. Below are some suggestions for items to add to your disaster plan and some actions to take before a disaster occurs. This is called Pre-Disaster planning. 1. Set a criteria for business shut down. A catastrophic event can occur at any time. You may be confronted with a huge storm, heavy snowfall, earthquake, fire, or even a volcano! It is best to establish ahead of time what parameters will cause the closing of your dealership and how to communicate to your employees not to come in. 2. Figure out how and when to contact clients: If your business is going to be interrupted and you are not going to be able to aid or service your customers, then you need to put together a notification plan for your customers. You can use a remote email, update your website with a note about the shutdown of your workplace and even request your employees to make some calls from home. Prepare for this ahead of time by maintaining an up to date an easy-to-access contact list. Priority should be made to contact customers that have left vehicles for service and those involved in pending sales. Make sure you have all your phone numbers and emails in one main location that you can easily take if you decide to leave. You should also keep a duplicate list in a remote location or in the cloud. 3. Outline the parameters for reopening your dealership, including specific details about when you anticipate work to begin again after the disaster. Be sure to make allowances for post-disaster clean-up efforts and resolving any safety issues. Also try to be respectful of the personal needs of your employees during this period. Kerri Rotunda

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4. Consider a buy-sell agreement. If something should occur to you during a disaster, your family could be put in a precarious financial situation, particularly if your dealership is adversely affected by the disaster or your passing. A buy-sell agreement is an agreement to sell the business assets to a business partner or another specified party for a designated amount, often funded by a life insurance policy. Your family will receive a fair value for your share of the dealership and the business partner will have the responsibility of running the business. Your attorney can assist in this process. 5. Review your insurance policy. A dealer’s garage policy does not include commercial property coverage unless you request and purchase it. Even if you do not own your building you may want to consider some coverage for your business property (contents). If your business property or building is damaged due to a disaster you will not be compensated unless you have a policy in force. Visit with your insurance agent to ensure you are properly covered for the proper limits. 6. Set up an automatic system for payroll. Aside from the convenience of outsourcing payroll responsibilities, you and your employees can continue to get paid during a disaster, assuming the dealership has the financial resources to do so. Make sure you look at setting up automatic bank transfers instead of relying on old-school bank visits. Disaster planning is something that should be taken seriously by every dealer-whether you have several employees or just yourself. Doing so will help keep you calm and collected during a disaster and will help ensure you have a dealership to go back to after its over. n Todd Shepard is the founder of Shepard & Shepard Insurance Solutions and regular contributor to IADA publications around the country.

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Positive Outlook for 2022’s Buy-Sell Market By Ronnie Wendt The auto dealership buy/sell market shattered records in 2021 with 383 transactions, representing 830 franchises, completed—a figure 32.5% higher than 2020’s prior record, according to the Blue Sky Report by Kerrigan Advisors. Erin Kerrigan, founder and managing director of Kerrigan Advisors, reports the buy/sell market stands poised to do it again, even with record high vehicle prices, supply chain shortages, tightened inventories, and inflationary and geopolitical pressures pressing the market. The number of dealership acquisitions in the first quarter buoyed her expectations for 2022. An Automotive News report recently estimated that 52 transactions happened in the first quarter, involving around 78 dealerships.

Kerrigan notes she had a less positive outlook in December. In fact, she expected the buy/sell market to remain flat, and possibly even decrease, but today she predicts it may best 2021 levels.

horizon. This is a recipe for a lot of buy/ sell activity.” And, even if supply constraints ease, she expects demand for vehicles to remain higher than supply for some time, which “will enable more activity,” she adds.

The reason? Key market conditions that made the market rich for Mergers & Acquisition (M&A) activities in 2021 remain in place—at least for now—in 2022. These include unprecedented dealership earnings and elevated blue sky valuations.

Automotive News’ 2022 Dealership Outlook Survey supports her findings. Their research revealed that one out of every five of the 196 dealers and dealership managers who responded noted they plan to buy dealerships in 2022. Nearly 5% of respondents reported plans to both buy and sell stores in 2022.

“We saw another record quarter of earnings for the industry, so the same dynamics exist as in 2021,” she says. “There is more capital in the industry than there was at the end of 2021.Buyers are eager to put their capital to work by acquiring dealerships and more sellers are coming to market in 2022 because of the financial risks on the

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VALUATIONS: A MOVING TARGET Still, an uncertain market with volatile conditions threatening to make an impact affects valuations, making them a moving target.

“The hardest part in today’s buy/sell market is the valuation equation,” Kerrigan says. How do you value a dealership when its profits have tripled or quadrupled? We still need to figure out a fair price.”

With record earnings under their belts, sellers often hit the market with unrealistic expectations, expecting to get top dollar based on their best earnings ever. That’s because historically the market based dealership valuations on prior earnings. Today, buyers must do their homework, figure out what they believe normalized earnings for an acquisition might be, then value the business on that basis. Valuations have become more forward looking versus historical, she explains. “Interest rates are rising, and higher interest rates always have an inverse relationship with valuation,” she says. “I expect them to affect valuation because buyer’s cost to capital will increase. Because transaction sizes continue to rise, the average auto dealership transaction is more sensitive than in the past to financial markets.” These factors make Kerrigan less bullish about valuations. “We don’t expect valuations to rise considerably in 2022, though earnings will likely continue to increase,” she says. However, she maintains it is unlikely for valuations to decline. She uses the housing market as an analogy. Interest rates are rising but house prices are not declining because demand remains higher than housing supply. “In fact, you are seeing valuations rise because more product is coming to the market and is therefore being sold,” she says. “This is not dissimilar to what we are seeing in the auto retail industry buy/sell market. There is much demand but so little supply. So, when really attractive assets come to market, they get picked up immediately.”

However, she tempers her enthusiasm with concerns over OEM changes to dealership business models as part of their pivot toward electrification and digital retailing. Some OEMS now eye a shift to flat fees for vehicles removing the negotiation process, for example. “Uncertainty creates greater volatility in a business’ valuation and the more uncertain buyers are regarding a franchise’s future earnings, the lower the blue sky multiple they expect to pay,” she says. “With this in mind, we downgraded our outlooks on Chevrolet, Ford and Buick GMC franchises to ‘negative’ from ‘steady.’ The domestics are flirting with new business models for their vast dealer networks and the unknowns associated with these changes is adding a level of risk to their Performa earnings, which may reduce their multiples in the future.” This is already reflected in the buy/sell market. Domestic dealerships’ share of the buy/sell market fell to 46% as import franchises saw their buy/sell market share soar to 54%. The big winner here was Toyota, which hit a new high of 7.75%. Kerrigan Advisors attributes this to the Toyota OEM partnership business model with dealers, relative to the sometimes strained relationships between domestic OEMs and their dealers. “We are seeing more buyer skepticism about Ford’s and GM’s plans to go directto-consumer, which may lead to a decline in buyer demand for these franchises in the future,” she says. “The demand for Toyota franchises, in contrast, is the highest we’ve ever seen. Buyers believe an investing in a Toyota franchise will stand the test of time because Toyota partners with its dealer network.”

DRIVING TOWARD DIGITAL “Auto retail experienced a ‘black swan’ moment in 2020, the results of which continued to transform the industry throughout 2021,” Kerrigan states. “The pandemic was a catalyst as shrinking new vehicle inventories and rising consumer demand resulted in one of the most extreme

supply/demand imbalances in auto retail history. Dealers leveraged their new pricing power while also reducing expenses and enhancing employee’s productivity, which resulted in record dealership profits and increased operational efficiency. All of which led to the high velocity of dealership transaction activity in 2021.” Digitization began to transform auto retail and accelerated consolidation, as the “once impossible online vehicle sale became the possible because of the pandemic,” she says. In turn, auto retail accelerated its transition from local to a national marketplace, the consequences of which, she says, “will be long lasting, particularly for private, familyrun dealerships.” For this reason, Kerrigan Advisors expects digital retailing, along with OEM’s attempts to go direct-to-consumer, to stimulate industry consolidation throughout 2022. “Digital retailing will render the concept of primary market area or PMA somewhat moot. It removes the geographic boundaries of a dealer’s franchise and enables them to sell to a much larger market area,” she says. “With this change, dealers will need to reconsider the way they sell vehicles. They will have competition from others beyond the local area. They will have regional and even national competitors.”

WHAT DEALERS CAN DO The pandemic clarified that scale, and a national platform, will separate the wheat from the chaff. According to Kerrigan, the first step for dealers looking to buy or sell in 2022 is developing a strategic plan for their business. “Whether that’s a growth plan or an eventual exit plan, having a strategy as this industry evolves is vital,” she says. “The historic inertia strategy of staying the course and not focusing on reengineering the business for a digital and electric future will be more risky.” Dealers also must develop plans for growth. “I believe scale is going to be a key Continued on page 20

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022 | 9

2nd Annual Summer Slam Car Show Sunday, August 7 | 11 AM - 3 PM Hosted by Manheim Baltimore-Washington to benefit Howard County Police Retired Officers’ Association 7120 DORSEY RUN ROAD | ELKRIDGE, MD | 21075

FREE & OPEN TO THE PUBLIC • EVENT IS RAIN OR SHINE Ample parking available at no cost!

FOR VEHICLE ENTRIES ONLY:

$20 Registration To download the Registration Form go to www.hcproa.com A variety of Food Trucks will be on site. Pipe Band Presentation at 12:00 PM Trophy Ceremony at 2:30 PM

Rules of Show:

All Manheim and Maryland state traffic laws must be obeyed Speed limit on lot is 15 MPH • No animals allowed • No alcohol is allowed

10 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022

MANHEIM BALTIMORE-WASHINGTON PRESENTS

JOIN US ON TUESDAY, AUGUST 9! 2000 UNITS

Summer Slam is BACK! Please join us for our 6th Annual Summer Slam event sale and enjoy a day of home runs, hot dogs, and amazing inventory!

16 LANES

First 200 clients in the door will get a complimentary lunch ticket from Jimmy's Famous Seafood, a commemorative Summer Slam tee-shirt, and the chance to get an autographed baseball by our Super Secret Celebrity Guest!

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022 | 11

Safeguards Compliance Course Keep Your Dealership Compliant with the FTC's Safeguards Requirements Ensure your staff knows how to protect consumer information to comply with the FTC requirements, avoid inadvertent exposure of your customer's information, government enforcement actions, lawsuits, and bad press. Brought to you by MidAtlantic Regional IADA. Powered by the Dealer Education Portal. Visit https://www.midatlanticautodealersunited.org/ Or scan the QR Code for info and registration

Only $75 for the Qualified Individual Only $49 Each for All Other Employees Sample policies and agreements are included at no additional charge

The course is flexible and on-demand to fit your busy schedule

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12 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022

FEATURE

A Failure to Plan is a Plan to Fail:

Developing a Written Incident Response Plan By K. Dailey Wilson On October 27, 2021, the Federal Trade Commission finalized its longawaited updates to the Safeguards Rule. The changes require financial institutions, including auto dealers and finance companies, to dust off their existing information security programs and likely make some significant changes. My March Spot Delivery article discussed one key change—encryption requirements for emails containing customer information. This article highlights another key change—the requirement to establish a written incident response plan. Security breaches happen every day, and it’s only a matter of time before it happens to you. As we’ve all heard, a failure to plan is a plan to fail. Developing a plan for how your company will respond to a breach will help you quickly and efficiently react while also allowing you to avoid the reputational harm associated with failing to appropriately address a security breach. What is a written incident response plan? On December 9, 2022, financial institutions will be required to have a written incident response plan. A written incident response plan explains how a financial institution will respond to a security event—an event resulting in unauthorized access to, or disruption or misuse of, an information system, information stored on such information system, or customer information held in physical form. What are the requirements for a written incident response plan?

A compliant written incident response plan must include specific elements. • The goals of the written incident response plan. The written incident response plan should describe the goals the financial institution seeks to achieve by implementing the written incident response plan. Examples of such goals include detecting and reacting to security events, determining the scope and risk of security events, responding appropriately to security events, communicating the results and risks to key stakeholders, and reducing the likelihood of the security event reoccurring. • The internal processes for responding to the security event. The written incident response plan should address what steps the financial institution will take when it discovers that a security event has occurred, such as conducting an investigation into which information systems have been affected, the type of information systems affected, the type of customer information accessed, the jurisdictions in which affected individuals reside, and the «how,» «what,» and «when» of the specific security event. The necessary response to a security event will vary based on several different factors, so nailing down the facts of each security event is paramount. • The definition of clear roles, responsibilities, and levels of decisionmaking authority. The written incident response plan must, at a minimum, specify the individual responsible for handling any security events that may occur. Creating clear lines of authority will help make the security event response process more efficient. • External and internal communications and information sharing. Several types of notifications may be required when a

security event has occurred. Of course, a financial institution must notify those internally who need to know of the event. The financial institution may also need to notify various third parties, including third-party vendors, law enforcement agencies, state government agencies, and the affected consumers. Many of these notification obligations will vary from state to state. Identifying relevant state data breach law requirements is key in determining who must be notified, when notifications must be made, what form(s) the notification must take (i.e., electronic, physical mail, posting), and what must be included in the notifications. • Identification of requirements for the remediation of any identified weaknesses in information systems and associated controls. The written incident response plan must require the financial institution to engage in a rootcause analysis. The financial institution must evaluate the security event and determine why it occurred. Once the “why” has been identified, the financial institution must take whatever steps are necessary to correct the problem (e.g., issuing a software patch, imposing new access controls, or requiring encryption of certain categories of information to the extent not already required). • Documentation and reporting regarding security events and related incident response activities. The written incident response plan should require the preparation of documentation summarizing the security event. This documentation should be provided to senior management and the board of directors. • Evaluation and revision of the incident response plan as necessary following a security event. After a security event has Continued on page 20

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022 | 13

The CARLAWYER

By Eric Johnson, Partner in the law firm of Hudson Cook, LLP, Editor in Chief of CounselorLibrary.com’s Spot Delivery® Here’s our monthly article on selected legal developments we think might interest the auto sales, finance, and leasing world. This month, the developments involve the Federal Trade Commission, Consumer Financial Protection Bureau and the Department of Justice. As usual, our article features the “Case(s) of the Month” and our “Compliance Tip.” Note that this column does not offer legal advice. Always check with your lawyer to learn how what we report might apply to you or if you have questions. FEDERAL DEVELOPMENTS On June 3, the Federal Trade Commission provided its annual report to the Consumer Financial Protection Bureau on its enforcement and related activities in 2021 regarding the Truth in Lending Act, Consumer Leasing Act, and Electronic Fund Transfer Act and their implementing regulations. On June 3, the Federal Trade Commission requested public comment on its business guidance document concerning digital advertising: “.com Disclosures - How to Make Effective Disclosures in Digital Advertising.” The guidance, published in March 2013, advises online advertisers that the same consumer protection laws that apply to commercial activities in other media apply online and that disclosures for online advertisements must be clear and conspicuous. The guidance sets forth the factors used to evaluate whether required disclosures are presented clearly and conspicuously. The FTC’s request for information seeks comment on a number of issues, including: the use of sponsored and promoted advertising on social media; advertising embedded in games and virtual reality; how guidance on the

use of hyperlinks can be strengthened; the adequacy of online disclosures when consumers must navigate multiple webpages in order to complete a purchase; whether the guidance adequately addresses advertising on mobile devices; whether the guidance should address issues unique to specific audiences or demographics in seeing, hearing, or comprehending disclosures; whether additional guidance is needed to reflect the multi-party selling arrangements involved in online commerce and affiliate marketing arrangements; and the use of dark pattern techniques in digital advertising. Comments are due by August 2, 2022. On June 13, the Consumer Financial Protection Bureau’s Office of Servicemember Affairs released its annual report examining complaints submitted to the Bureau by servicemembers, veterans, and military families in 2021. The report generally focuses on complaints about credit reporting and collection issues related to medical billing. On June 14, the Consumer Financial Protection Bureau requested information “related to relationship banking and how consumers can assert the right to obtain timely responses to requests for information about their accounts from banks and credit unions with more than $10 billion in assets, as well as from their affiliates.” The Bureau stated that the request for information is “part of a broader effort to restore relationship banking in an era of consolidation and digitization” and that “[t]he decline of relationship banking has deprived some consumers of customized advice, responsiveness, and care.” Specifically, the Bureau is interested in the following: (1) What types of information do consumers request from their depository institution? How are consumers using the information? (2) What types of information do consumers request from their depository institution but are often unable to obtain? (3) How does the channel (phone, inwriting, online, in-person) through which

14 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022

consumers request information impact their ability to obtain information? (4) How do consumers’ customer service experiences differ depending on the channel through which they interact with their depository institution? (5) How are customer service representatives evaluated and compensated, and how might compensation structure and incentives impact the service provided? (6) What customer service obstacles have consumers experienced that have adversely affected their ability to bank? (7) What unique customer service obstacles do immigrants, rural communities, or older consumers experience? (8) What are typical call wait times? (9) How often are calls dropped or disconnected? How often do companies use automated and digital communication channels such as interactive voice response systems and online chat functions? (10) Are there any fees associated with customer service or requests for information? (11) What are the most important customer service features or experiences that help produce satisfactory banking relationships between financial institutions and consumers? (12) What information would be helpful for consumers to obtain from depository institutions in order to improve their banking experience? (13) How have methods of customer engagement changed as a result of the COVID-19 pandemic? Comments are due by July 21, 2022. On June 21, the Department of Justice announced that it obtained a proposed settlement with Meta Platforms, Inc., f/k/a Facebook, Inc., resolving allegations that its housing advertising system discriminated against Facebook users in violation of the Fair Housing Act. The DOJ’s complaint alleged that Meta used certain aspects of its advertising system to target and deliver housingrelated ads to some Facebook users while excluding other users based on FHAprotected characteristics. Specifically, the complaint alleged that Meta: (1) enabled and encouraged advertisers to target their housing ads by relying on race, color, religion, sex, disability, familial status, and

national origin to decide which Facebook users will be eligible and ineligible to receive housing ads; (2) created an ad targeting tool known as “Special Ad Audience” that uses machine-learning algorithms to find Facebook users who share similarities with groups of individuals selected by an advertiser using several options provided by Facebook. Facebook allegedly allowed its algorithm to consider FHA-protected characteristics - including race, religion, and sex - in finding Facebook users who “look like” the advertiser’s source audience and thus are eligible to receive housing ads; and (3) used an ad delivery system that uses machine-learning algorithms that rely in part on FHA-protected characteristics to help determine which subset of an advertiser’s targeted audience will actually receive a housing ad. The complaint alleged both disparate treatment and disparate impact discrimination. The complaint alleged that Meta is liable for disparate treatment because it intentionally classifies users on the basis of FHA-protected characteristics and designs algorithms that rely on users’ FHA-protected characteristics. The complaint alleged that Meta is liable for disparate impact discrimination because the operation of its algorithms affects Facebook users differently on the basis of their membership in protected classes. Among other things, the settlement requires Meta to stop using its “Special Ad Audience” tool by December 31, 2022, and to develop a new system for housing ads to address discriminatory disparities caused by its use of personalization algorithms in its ad delivery system. On June 23, the Federal Trade Commission released a notice of proposed rulemaking to address unfair and deceptive conduct by motor vehicle dealers in connection with the advertising, sale, financing, and leasing of vehicles. Specifically, the proposed rule would: (1) prohibit dealers from making certain misrepresentations in the course of selling and leasing, or arranging financing for, vehicles; (2) require dealers to provide accurate disclosures regarding vehicle pricing, including optional add-on fees, and vehicle financing during sales negotiations and in their advertising; (3) require dealers to obtain consumers’ express, informed consent for any fees or charges and require dealers to inform consumers about the price of the vehicle without any optional add-on product or service; (4) prohibit

dealers from charging for any add-on product or service that provides no benefit to the consumer; and (5) impose certain recordkeeping requirements on dealers to help ensure compliance with the proposed rule’s disclosure requirements. Comments are due 60 days after the proposed rule’s publication in the Federal Register, which is expected shortly. On June 28, the Consumer Financial Protection Bureau issued an interpretive rule that clarifies the scope of the federal Fair Credit Reporting Act’s preemption provisions. The interpretive rule emphasizes that states retain broad authority and flexibility to regulate consumer reporting through their own credit reporting laws and that state laws are not preempted unless they conflict with the FCRA or fall within the FCRA’s “narrow and targeted” express preemption provisions. The summary of the interpretive rule states that, “[f]or example, if a State law were to forbid consumer reporting agencies from including information about medical debt, evictions, arrest records, or rental arrears in a consumer report (or from including such information for a certain period of time), such a law would generally not be preempted. Likewise, if a State law were to prohibit furnishers from furnishing such information to consumer reporting agencies, such a law would also not generally be preempted. Similarly, if a State law required that a consumer reporting agency provide information required by the FCRA at the consumer’s request in languages other than English, such a law would generally not be preempted.” The Bureau noted in its press release that it “will continue to consider other steps to promote state enforcement of fair credit reporting along with other parts of federal consumer financial protection law.” On June 29, the Consumer Financial Protection Bureau issued an advisory opinion concerning “pay-to-pay” fees - sometimes called convenience fees - imposed by debt collectors on consumers who want to make a payment in a certain way, such as online or by phone. The advisory opinion interprets the language of Section 808(1) of the Fair Debt Collection Practices Act, which prohibits debt collectors from collecting “any amount (including any interest, fee, charge, or expense incidental to the

principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.” The advisory opinion affirms that this provision prohibits debt collectors from collecting pay-to-pay fees when those fees are not expressly authorized by the agreement creating the debt or expressly authorized by law. The advisory opinion clarifies that where no law expressly authorizes a fee, it is not “permitted by law,” even if no law expressly prohibits it. The advisory opinion also clarifies that a debt collector may also violate Section 808(1) when the debt collector collects pay-to-pay fees through a third-party payment processor. CASE(S) OF THE MONTH Attorneys’ Fees Are Not Subject to Holder Rule’s Cap on Liability: An individual bought a used vehicle that the dealership advertised as being “Certified Pre-Owned” and as having cruise control and sixway power-adjustable seats. The retail installment contract that the buyer signed contained the Federal Trade Commission’s Holder Rule language providing that any holder of the contract is subject to all claims and defenses that the debtor could assert against the seller and that recovery by the debtor cannot exceed amounts paid by the debtor under the contract. The dealership assigned the RIC. Two months after buying the car, the buyer sued the dealership and the assignee, asserting six causes of action based on her claim that the car she bought did not meet the requirements of the Certified Pre-Owned program or have the advertised features that she needed due to a disability. The jury found in favor of the buyer on one cause of action - breach of the implied warranty of merchantability under California’s Song-Beverly Consumer Warranty Act - and awarded her $21,957 in damages. The trial court also awarded her $169,602 in attorneys’ fees as the prevailing party under the Song-Beverly Act. The defendants appealed the trial court’s award of attorneys’ fees, arguing, among other things, that the assignee was not liable for attorneys’ fees because the Holder Rule limits recovery to amounts paid by the debtor under the contract. The appellate court affirmed the trial court’s decision. The Supreme Court of California, which noted that federal courts of appeal are Continued on next page

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022 | 15

Continued from previous page divided on the issue, also affirmed. The California high court first concluded that the Holder Rule was ambiguous as to whether the phrase providing that “recovery hereunder by the debtor shall not exceed amounts paid by the debtor hereunder” limits the buyer’s recovery of both damages and attorneys’ fees to the amount she paid under the RIC. In light of the ambiguity, the high court turned to extrinsic evidence, including the history of the Holder Rule, and determined that “the FTC had damages in mind when limiting recovery under the Rule, and there is no indication that attorney’s fees were intended to be included within its scope.” Moreover, the high court recognized that “affirmative litigation against creditors for seller misconduct ... would be financially infeasible for many buyers if attorney’s fees were not recoverable.” The high court added that “[n]either the language of the Holder Rule nor its history suggest[s] that it was intended to displace or prevent state law from authorizing greater recovery than

what a plaintiff may recover based on the language of the Notice alone,” including state laws containing fee-shifting provisions. The high court noted that its holding is consistent with the FTC’s recent advisory opinion stating that “’if the applicable law requires or allows costs or attorneys’ fee awards against a holder, the Holder Rule does not impose a cap on such an award.’” See Pulliam v. HNL Automotive, Inc., 2022 Cal. LEXIS 2914 (Cal. May 26, 2022). THIS MONTH’S CARLAWYER© COMPLIANCE TIP Our Case of the Month highlights an issue that we reported on recently regarding the FTC’s advisory opinion stating that if the applicable law either requires or allows costs or attorneys’ fees awards against a holder of a contract, the FTC’s Holder Rule doesn’t impose a cap on such an award. This Case of the Month and the FTC’s advisory opinion could drive increased scrutiny of dealers by banks, finance companies and other financing sources. For instance, your financing sources may want to conduct some additional diligence on a dealer

and its’ capacity to pay or indemnify the financing source under the terms of your Dealer Agreement given the potential for increased litigation and the threat of having to pay awarded attorneys’ fees and costs to a consumer. These financing sources may also spend more time reviewing the contracts they purchase from dealers, as well as their Dealer Agreements, especially given the heightened increase of potential liability caused by the Case and the FTC’s advisory opinion. So, there’s this month’s roundup! Stay legal, and we’ll see you next month. n Eric (ejohnson@hudco.com) is a Partner in the law firm of Hudson Cook, LLP, Editor in Chief of CounselorLibrary.com’s Spot Delivery®, a monthly legal newsletter for auto dealers and a contributing author to the F&I Legal Desk Book. For information, visit www. counselorlibrary.com. ©CounselorLibrary. com 2022, all rights reserved. Single publication rights only to the Association. HC# 4894-9977-6294.

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16 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022

2/14/22 5:15 PM

q LEGISLATIVE UPDATE

House Passes Rep. Schmitt’s Abandoned Vehicle at Vehicle Auctions Bill (House Bill 2372) By Tyler Burke, Associate, Milliron & Goodman Government Relations On June 23, 2022, the Pennsylvania House of Representatives passed House Bill 2372 with a vote of 109 to 90. This legislation has now been referred to the Senate Tr a n s p o r t a t i o n Committee, where it awaits consideration. House Bill 2372 (Schmitt-R) amends Title 75 (Vehicles), and authorizes a wholesale vehicle auction, or salvor, to begin the process to remove vehicles that have been abandoned by dealers without the auction’s consent. It would also authorize the auction to charge and collect storage fees, as well as the releasing or recovering costs of the abandoned vehicle.

Specifically, the proposed legislation would allow the auction to sell the vehicle after certifying to PennDOT that the vehicle was abandoned and obtaining an abandoned vehicle title. The wholesale vehicle auction shall be reimbursed for the cost of storing, providing notice, obtaining title, and processing the vehicle, while the remaining proceeds of the sale shall be paid to PennDOT and transmitted to the State Treasurer for deposit in the Motor License Fund. This legislation will help to avoid economic waste and encourages the dealers not to abandon their vehicles at auction. In addition, licensed auction entities are entrusted with these vehicles to auction between licensed dealer buyers and dealer sellers. This sale can reduce the loss of funds that come from unpaid storage fees

M A R I A’ S TA G & T I T L E

For full details, please visit mariada.org/mtag. Or contact the Association at (717) 238-9002 for any of your PA titling needs.

and can potentially combat the cash for clunkers type of waste from older vehicles, which are most abandoned vehicles. As this bill continues through the legislative process, we will keep you apprised of further activity on this or any other piece of legislation that may affect your industry. n Tyler is currently responsible for providing research, bill analyses, and legislative updates to ensure clients have the most current and accurate information available. Tyler also helps to create and implement grassroots initiatives and draft legislation and amendments with a focus on transportation, healthcare, and education policy. Tyler formerly worked as a paralegal at the law firm of Kepner, Kepner & Corba. He earned a degree in Political Science and Philosophy from Susquehanna University.

YOUR OUT OF STATE RETAIL WORK MARIADA is excited to share a recent partnership with Maria’s Tag & Title. We know how vital it is for your dealership to operate efficiently to maximize profits, which is why we now offer members a great solution for out of state retail work. Maria’s Tag & Title is a direct resource for processing out of state deals for vehicles sold to customers residing in Maryland, Delaware, DC, West Virginia, Virginia, North Carolina, and now New York! Dealers may outsource as much or as little as they prefer.

MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022 | 17

AUCTION DIRECTORY PENNSYLVANIA ADESA MERCER 758 Franklin Road, Mercer, PA 16137 724.662.4500 / Fax: 724.662.8716 Friday 9:00 AM Office M-W: 9-4:00; TH: 9-5:00; F: 8-5:00 adesa.com

CORRY AUTO DEALERS EXCHANGE P.O. Box 317, 12141 Route 6 West Corry, PA 16407 814.664.7721 / Fax: 814.664.7724 Thursday 10:00 AM 3 Lanes Dealer Consign, Fleet/Lease corryade.com

ADESA PA I-83 Ex. 28 (Old Ex. 12), 30 Industrial Rd. York, PA 17406 717.266.6611 / Fax: 717.266.7650 Wednesdays 9:00 AM; INOPS 8:30 AM Specialty Sale every 4th Wed 8:30 AM adesa.com

GARDEN SPOT AUTO AUCTION Robert Rd. & Apple St., Ephrata, PA 17522 717.738.7900 / Fax: 717.738.7930 Tuesday 10:00 AM gardenspotautoauction.com

ADESA PITTSBURGH 378 Hunker Waltz Mill Rd. New Stanton, PA 15672 724.925.4700 / Fax: 724.925.4701 Tuesday 9:00 AM pittautoauction.com AMERICA'S AA - HARRISBURG 1100 S. York St., Mechanicsburg, PA 17055 717.697.2222 / Fax: 717.697.2234 Thursday 8:45 AM harrisburgautoauction.com AMERICA’S AA - LANCASTER 1040 Commercial Ave., P.O. Box 406 East Petersburg, PA 17520 717.569.5220 / Fax: 717.569.3109 Weekly Sales Wed. 9:00 AM INOPS 8:30 AM americasautoauction.com AMERICA’S AA - PITTSBURGH 55 E. Buffalo Church Rd. Washington, PA 15301 724.225.1777 / Fax: 724.225.7223 Thursday 12:30 PM americasautoauction.com BLOOMSBURG AUTO AUCTION 25 Ridge Road, Bloomsburg, PA 17815 570.784.2306 Wednesday 10:00 AM bloomaa.com CENTRAL PENNSYLVANIA AA Exit 178 of I-80, Lock Haven, PA 17745 800.248.8026 / Fax: 570.726.7841 Thursday 9:45 AM Office: MTF 8-5:30 W-Th 8-6:00 cpaautoauction.com

GREATER ERIE AUTO AUCTION 7700 Avonia Road, (Exit 16 of I-90 & PA Route 98) Fairview, PA 16415-0916 814.474.3900 / 877.474.GEAA Fax: 814.474.4969 Tuesday 1:45 PM greater-erie.com LEHIGH VALLEY AUTO AUCTION 3880 Lehigh St., Whitehall, PA 18052 610.435.5554 / Fax: 610.435.5557 Wednesday 5:00 PM lehighvalleyautoauction.com MANHEIM KEYSTONE 488 Firehouse Road, Grantville PA 17028 717.469.7900 / Fax: 717.469.2842 Every Monday 11:00 AM manheim.com MANHEIM PENNSYLVANIA 1190 Lancaster Rd., Manheim, PA 17545 717.665.3571 / Fax: 717.665.9265 Exotic Highline Sales every other Thursday - 9:00 AM Every Friday Sale 8:30 AM manheim.com MANHEIM PHILADELPHIA 2280 Bethlehem Pike, Hatfield, PA 19440 215.822.1935 / Fax: 215.822.8140 Tuesday 9:30 AM TRA Sale - Tuesday 12:30 PM Office: M-Th 8:30-5:00; F 8:30-1:00 manheim.com MANHEIM PITTSBURGH AA 21095 Route 19, Cranberry Twp., PA 16066 724.452.5555 / Fax: 724.452.1310 Wednesday 9:00 AM manheim.com

18 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022

NORTH EAST PENNSYLVANIA AA 860 N. Keyser Ave., Scranton, PA 18504 570.207.CARS / Fax: 570.207.1860 Tuesday 10:00 AM nepautoauction.com PERRYOPOLIS AUTO AUCTION Route 51 S. Perryopolis, PA 15473 724.736.4445/ Fax: 724.736.0466 Friday 9:45 AM perryautoauction.com MARYLAND BSC AMERICA/BEL AIR AUTO AUCTION P.O. Box 200, 4805 Philadelphia Rd. Belcamp, MD 21017 410.879.7950 / Fax: 410.893.1515 Thursday 8:30 AM at Clayton Station Thursday 8:00 AM at Bel Air in Belcamp bscamerica.com MANHEIM BALTIMORE-WASHINGTON 7120 Dorsey Run Rd., Elkridge, MD 21075 410.796.8899 / Fax: 410.799.0512 Tuesday Sale, 9:30 AM Tuesday Frontline Sale, 9:00 AM TRA/Salvage, 1:00 PM manheim.com NEW JERSEY ADESA AUCTION OF NEW JERSEY 200 N. Main, Manville, NJ 08835 908.725.2200 / Fax: 908.725.3446 Consignment Sale Thursdays 8:45 AM Topline Sale 9:00 AM monthly Thursdays GM Factory Sale Bi-weekly Tuesdays 10:00 AM adesa.com MANHEIM NEW JERSEY AA 730 Rte. 68, P.O. Box 188 Bordentown, NJ 08505 609.298.3400 / Fax: 609.298.4489 Wednesday 9:00 AM manheim.com NEW YORK ADESA BUFFALO 12200 Main St., Akron, NY 14001 716.542.3300 / Fax: 716.542.3547 Sale Tuesday 9:00 AM Boat & RV Sale 2nd Tuesday Monthly 11:00 AM Ford Factory Tuesday Monthly 9:00 AM Office: M-Tu: 8-5, W: 8-4, Th: 9-4, F: 9-3 ADESA.com/Buffalo

ADESA LONG ISLAND 425 Patchogue Yaphank Rd. Yaphank, NY 11980 631.205.5000 adesa.com/longIsland ADESA SYRACUSE 5930 State Rte. 31, Cicero, NY 13039 315.699.2792 adesa.com/syracuse BUFFALO AUTO AUCTION 5300 Lockport Road Lockport, NY 14094 716.549.4800 deeregunner@hotmail.com MANHEIM ALBANY 459 Route 146, Clifton Park, NY 12065-0440 518.371.7500 jay.waterman@manheim.com manheim.com MANHEIM NEW YORK AA 2000 Dealer Drive, Newburgh, NY 12550 845.567.8400 / Fax: 845.567.8410 Every Thursday 9:00 AM Ford Factory Closed Sale Bi-Weekly 10:00 AM Heavy Truck & Equipment Sale First Thursday of the Month 11:00 AM manheim.com MANHEIM ROCHESTER 20 Cairn Street, Rochester, NY 14611 585.328.2277 sara.fico@coxautoinc.com manheim.com ROCHESTER- SYRACUSE AUTO AUCTION 1826 State Route 414, P.O. Box 129 Waterloo, NY 13165 315.539.5006 sprankie@rsautoauction.com rsautoauction.com STATE LINE AUTO AUCTION 830 Talmadge Hill Rd. S. Waverly, NY 14892 607.565.8151 / Fax: 607.565.8659 GM Financial Open Sale –EVERY Friday, 9:20 AM GM Financial Closed Sales as Scheduled Dealer Consignment Sale –EVERY Friday, 9:20 AM statelineauto.com WEST VIRGINIA MOUNTAIN STATE AUTO AUCTION Route 2, Box 835, Shinnston, WV 26431 304.592.5300 / Fax: 304.592.3510 Monday 10:30 AM Office: 9:00-5:00 mtstateaa.com

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A Failure to Plan is a Plan to Fail: Continued from page 13

for improved handling of future security events.

occurred, the financial institution should evaluate the security event to determine What should you do now? what lessons it can glean. For example, the financial institution should consider The first step in satisfying the Safeguards what happened to allow this particular Rule’s requirement to establish a written security event to occur, whether the incident response plan is to identify financial institution responded well to the steps you have in place to address a the security event, and what the financial security event. Your business may have institution should do differently in the already experienced a security event, so future to better respond to a security think through what you did to address event. Based on this information, any previous security events, and write the financial institution should make that information down. Next, compare the Safeguards MidAtlanticDealerNews-AUG2022-PRINT.pdf 1 steps 6/30/22 2:17 PM any necessary changes to the written what you did to what Rule requires you to take, determine what incident response plan that would allow necessary information is missing, and then

figure out how you will address any holes in your incident response plan—or work with your compliance counsel to complete this step. It is also important to inventory any applicable state data breach laws to ensure that your incident response plan incorporates requirements arising under those laws as well. Putting in a little bit of work on the front end will allow you to efficiently and effectively respond to security events when they occur—and they will occur. n K. Dailey Wilson is an associate in the Tennessee office of Hudson Cook, LLP. She can be reached at 423.490.7567 or dwilson@hudco.com. Copyright © 2022 CounselorLibrary.com LLC. All rights reserved. This article appeared in Spot Delivery®. Reprinted with express permission from CounselorLibrary.com.

Positive Outlook for 2022’s Buy-Sell Market Continued from page 9 determiner of success in the next decade,” she says. “They need to think through their plans. What acquisitions are accretive to their business? How do they want to grow? Do they want to grow into new markets or in franchise numbers? Do they have the staff to grow? These things are crucial to consider.”

If a dealer considers these things and finds they are not interested in growth and investment, Kerrigan stresses, “the best plan may be an eventual exit.”

CMY

FOCUS ON THE FUTURE

When asked to get out her crystal ball and predict the buy/sell environment for 2023, Kerrigan states her ball is “very cloudy.” “I expect 2023 will still have a strong supplydemand imbalance with new vehicles and earnings remaining strong. I say that with the caveat that any unforeseen geopolitical event could change this. But if earnings remain strong, I expect 2023 to be another busy year for buy/sells sales, but perhaps not as strong as 2021 and 2022.” n 20 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022

e l a S y r a s r e v i n n A r a e 2 2 23rd Y 0 2 , 0 2 r e b m e Sept ! D L O S % 0 9 S R A rriers C a C E r V a C WE MO acks • Tow Trucks • S! ! E e llb K o R m A i s T t r e T v y I i r R Dr e E v V e E s T n A o ti a WH t c e p x e ek

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2022 ADVANCED ISSUING AGENT TRAINING COURSES 2022 ADVANCED ISSUING IN PERSON AT THE AGENT TRAINING COURSES FOLLOWING LOCATIONS IN PERSON AT THE Monday, March 14, 2022

AMERICA’S AA LOCATIONS – HARRISBURG FOLLOWING

1100 S. York St., Mechanicsburg, PA 17055 Monday, March 14, 2022 AMERICA’S – HARRISBURG Monday,AA April 25, 2022 1100 S. York St., Mechanicsburg, 17055 • Clint AA Weaver • 717.697.2222 ADESA -PAPITTSBURGH Monday, April 25, Stanton, 2022 PA 15672 378 Hunker Waltz Mill Rd., New SIGN UP FOR ADVANCED ADESA - PITTSBURGH AA Monday, May 16, 2022 378 Hunker WaltzAGENT Mill Rd., New Stanton, PA 15672 ISSUING TRAINING NORTHEAST PENNSYLVANIA Carly Bishop• 724.925.4700 AA Arcaro & Genell Restaurant, South Main St., Old Forge, PA 18518 Monday, May 16, 2022 COURSES IN443 PERSON AT THE NORTHEAST AA Monday,PENNSYLVANIA June 13, 2022 LOCATIONS Arcaro &FOLLOWING Genell Restaurant, 443PHILADELPHIA South Main St., Old MANHEIM AA Forge, PA 18518 Lisa Cohowicz • 570.650.2781 2280 Bethlehem Pike, Hatfield, PA 19440 Monday, June 13, 2022 Monday, September MANHEIM PHILADELPHIA19, AA 2022 GARDEN AAPA 19440 2280 Bethlehem Pike, SPOT Hatfield, Robert Rd. & Polina Apple St., Ephrata, PA 17522 Charles 215.822.1935 Monday, September 19, 2022 PIADA Members: $99 • Non-Members: $129 GARDEN SPOT AA Contact PIADA chapter today: Robert Rd. & Apple St., Ephrata, PA 17522 • Kristi Kohl • 717.738.7900

Email Cynthia@piada.org or call 717.238.9002. PIADA Members: $99 • Non-Members: $129 Contact PIADA chapter today: COURSE REGISTRATION Email Cynthia@piada.org or call 717.238.9002.

Company ____________________________________________________ COURSE REGISTRATION Contact _____________________________________________________ Company ____________________________________________________ PIADA Member?  Yes  No DIN # _____________________________ Contact _____________________________________________________ E-mailMember? Address  _______________________________________________ PIADA Yes  No DIN # _____________________________ Business Address ______________________________________________ E-mail Address _______________________________________________ City ______________________________ State_______Zip Code________ Business Address ______________________________________________ Phone (____) ___________________FaxState_______Zip (____) _____________________ City ______________________________ Code________ Phone (____) ___________________Fax (____) _____________________ Number Attending ______ Number Attending ______

NAMES OF ATTENDEES: NAMES OF ATTENDEES: ___________________________________________________________

___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ Card Type:  VISA  MasterCard  Discover  American Express Card Type:  VISA  MasterCard  Discover  American Express Name on Card:_________________________________________________ Name on Card:_________________________________________________ Card # ________________________ Security Code ______ Exp. Date_____ Card # ________________________ Security Code ______ Exp. Date_____ Signature _____________________________________________________ Signature _____________________________________________________ Fax (We’d prefer fax) to 717.238.3870 Or Mail to: PIADA, 1501 North Front Street, Harrisburg, PA 17102 Fax (We’d prefer fax) to 717.238.3870 Or Mail to: PIADA, 1501 North Front Street, Harrisburg, PA 17102

SPECIAL THANKS TO OUR ANNUAL SPONSORS: SPECIAL THANKS TO OUR ANNUAL SPONSORS:

MidAtlantic IADA Membership Application

DO IT QUICK! Call 717.238.9002 and Say “I Want to Join!” & we’ll take the info over the phone (M-F 8:30-4:30) Dealership _________________________________________________ Owner/President(s)__________________________________________ DIN #_________________________________ or  Special Member  Corp.

 Partnership

 Sole Proprietorship

 LLC

Number of Employees _______________________________________ Street Address______________________________________________ City __________________________________ State_____ Zip _______ County__________________ Dealership Anniversary (mm/yy)______ E-mail _____________________________________________________ Website____________________________________________________ Ph. (____) ___________________ Fax (____) _____________________ To assist our lobbying effort, your party affiliation is requested.  Democrat  Republican  Independent  Decline to answer PIADA yearly dues are $399.00 and MDIADA & DIADA are $299.00 (which include $60 NIADA dues). You will receive all NIADA benefits including a discount prescription drug card, Used Car Dealer magazine, and dealer advocacy to officials in Washington, D.C. (Contributions or gifts to PIADA PAC are not deductible as charitable donations for Federal tax purposes; however, the $399 dues payments are deductible by members as an ordinary and necessary business expense.) By my signature below, I affirm that: I support the PIADA Code of Ethics and want to strengthen the business and public image of the Independent Automobile Dealer; I request membership in the MARIADA, 1501 North Front Street, Harrisburg, PA 17102, 717.238.9002, Fax (717) 238-3870, www.piada.org, and I authorize PIADA to fax or e-mail important information to me. Signature __________________________________________________ My check(s) in the amount of: (Membership Fees are  PA Dealer $399.00 non-refundable.)  MD/DE Dealer $299.00  Plus a voluntary PAC fund contribution to PIADA PAC of $25 or more. (Must be individual check, not a corporate check. Corporate checks for PAC fund contributions are not permitted by PA law.)  Plus a $20 donation to the MidAtlantic Regional IADA Scholarship Fund. Or please charge this amount to my credit card: Card type:  Visa  MasterCard  American Express  Discover Name on Card ______________________________________________ Card Number ______________________________________________ Security Code ___________ Expiration Date ____________________ Signature __________________________________________________ Printed Name _______________________________________________ Date ______________________________________________________ Received by MARIADA Rep. _____________________________ Date ________________________________________________ OR Mail to: MARIADA, 1501 North Front St., Harrisburg, PA 17102. If using a credit card, you may fax this application to PIADA at 717.238.3870.

22 | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022 20| MIDATLANTIC | JANUARYDEALER 2022 NEWS MIDATLANTIC DEALER NEWS

ONLINE AUTO DEALER SUPPLIES AND SELLING AIDS!

e h t e We hav

t s e l Coo ! s l Dea

MARYLAND FORMS DEALERS CAN ORDER SECURE FORMS QUANTITY PRICE TOTAL $ DUE Secure Power of Attorney (3 part-50 per package) Secure Dealer Reassignment (1 part-100 per package)

$ 00* _____ 20. $ 00 _____ 20. Total Secure forms order 6% Maryland Sales Tax Shipping TOTAL enclosed for Secure forms

Shipping Cost: 1 – 4 packs = $10.00 5 – 10 packs = $15.00 Over 10 packs – Please call ahead for pricing.

NON-SECURE FORMS

________ $ ________ $ ________ ________ ________ $ ________ $

QUANTITY $MEMBER NON-$MEMBER TOTAL $ DUE

Cash Sales Contracts (100 per pack) Odometer Mileage Statement (100 per pack) FTC Buyers Guide (100 per pack) Check one:  AS IS  IMPLIED Restricted Power of Attorney (100 per pack) Deal Jackets (100 per pack) Test Drive Agreements (100 per pack)

_____ _____ _____

47.00 18.00 $ 00 28. $

94.00 36.00 $ 00 56.

________ ________ $ ________

$ 00 $ _____ $10.00 20. ________ $ 00 $ 00 $ _____ 24. 48. ________ $ 00 $ _____ $28.00 56. ________ Total Non-Secure forms order $ ________ 6% Maryland Sales Tax ________ TOTAL enclosed for Non-Secure forms $ _________ TOTAL AMOUNT DUE $ _________

Dealership ________________________________________________________________________ Dealer # (required) _________________________________________________________________ Member  Yes  No Contact Name ___________________________________________ Email _____________________________________________________________________________ Address __________________________________________________________________________ (FEDEX & UPS WILL NOT DELIVER TO P.O. BOX)

City_______________________________________________State ______Zip _________ Phone ______________________________Fax ______________________________________ Card Type:

 VISA

 MasterCard

 AMEX

Name on Card ___________________________________________________ Exp. Date________ Card Number _____________________________________ Security Code________ Make checks payable to: PIADA or fill out payment information below: Card Type:

 VISA

 MasterCard

 AMEX

 Discover

Name on Card ___________________________________________________ Exp. Date________ Card Number _____________________________________ Security Code________ We cannot process orders until payment is received. Signature ____________________________________________ Date ___________________ For questions you may contact Cynthia Slemons at 717.238.9002 ext. 16 or Cynthia@piada.org.

PENNSYLVANIA FORMS DEALERS CAN ORDER DESCRIPTION QUANTITY MEMBER NON-MEMBER MEMBER EXT NON-M EXT $

“As is” Supplemental Statement Buyers Guide Plastic Holders (50) Buyers Guide Window Form Buyers Guide Window Form (Spanish) Consignment & Sales Agreement Form Deal Jackets Fees Chart (wall mount) Fraud Hotline Poster Installment Sales Contract (100) Interpreter Confirmation of Translation Key Tags (250) Lease Agreements Limited Warranty No Purchase Required Disclosure Notary Receipt Pad Odometer Mileage Statement Power of Attorney Disclosure Forms Rental Agreements Retail Buyer Order Form Secure Power of Attorney Secure Power of Attorney Log Book Temp Tag Log Book Title Release Authorization Used Vehicle Record

_____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____

24.00 $ 00 40. $ 00 20. $ 00 18. $ 00 25. $ 00 30. $ 00 14. $ 00 14. $ 150.00 $ 00 25. $ 00 32. $ 00 78. $ 00 26. $ 00 24. $ 00 15. $ 00 18. $ 00 18. $ 00 32. $ 00 32. $ 00 50. $ 00 15. $ 00 15. $ 00 15. $ 00 15.

_____ _____ _____ _____ _____ _____ _____ _____ _____

48.00 80.00 $ 00 40. $ 00 36. $ 00 50. $ 00 60. $ 00 28. $ 00 28. $ 300.00 $ 00 50. $ 00 64. $ 156.00 $ 00 52. $ 00 48. $ 00 30. $ 00 36. $ 00 36. $ 00 64. $ 00 64. $ 00 50. $ 00 30. $ 00 30. $ 00 30. $ 00 30.

_______ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______ $ _______

ADP FORMS Customer Delivery Check List Customer Proposal Damage Disclosure Delivery Confirmation Goodwill Repair Acknowledgement Insurance Coverage Acknowledgement Lease Spot Delivery Agreement Notice to Co-Signer Trade-In Appraisal

28.00 28.00 $ 00 28. $ 00 28. $ 00 28. $ 00 28. $ 00 28. $ 00 28. $ 00 28.

$ 56.00 _______ $ _______ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ 00 $ 56. _______ $ _______ $ Subtotal _______ $ _______ 6% Pennsylvania Sales Tax $ _______ $ _______ Shipping $ per pound + Special Shipping $ at cost. Total w/o shipping $_________ Please make checks payable to PIADA, 1501 North Front St., Harrisburg, PA 17102 (call in to receive shipping cost to include in payment) or you may fax orders to 717.238.3870 with credit card information. *All orders MUST be accompanied by a method of payment. *Must provide DIN if applicable.

Dealership ________________________________________________________________________ Contact_______________________________________________Date ________________

FOR INFORMATION ON MEMBERSHIP...

Address __________________________________________________________________________

MIDATLANTIC IADA = PIADA + MDIADA + DEIADA Contact Shannon at 717.238.9002 x 18 Shannon@piada.org www.piada.org • www.mdiada.org • www.deiada.org

City_______________________________________________State ______Zip _________

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Penn sy

Mid lv A

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a re aw el l

I nd

JOIN

Maryland | ia | an antic Reg D

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lers ia Assoc

TODAY!

Phone _____________________Fax ____________________*DIN ___________________ Card Type:

 VISA

 MasterCard

 AMEX

Name on Card ___________________________________________________ Exp. Date________ Card Number _____________________________________ Security Code________ All forms come in packs of 100 unless otherwise noted.

24 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022

America’s Auto Auction Lancaster invites you to our

1000 + UNITS

Anniversary Sale September 21st Prizes & Giveaways

Contact Inside Sales To Reserve Numbers 717.569.5220 x406

America’s Auto Auction Lancaster

1040 Commercial Ave, East Petersburg, PA 17520 717.569.5220 | www.americasautoauction.com | www.edgepipeline.com

26 | MIDATLANTIC DEALER NEWS | MIDATLANTICAUTODEALERSUNITED.ORG • AUGUST 2022