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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

NEW YEAR, SAME CHALLENGES FEATURE:

A Man and His Jaguars:

Lost Jaguars: The Tom Hendricks Collection MIDATLANTIC INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION 1501 North Front St., Harrisburg, PA 17102

Must-Attend Events for MidAtlantic Members in 2024 The Crucial Role of 20 Groups for Dealerships in Today’s Automotive Landscape FTC Passes Amendment to Safeguards Rule PLUS

Top 10 Reinsurance Mistakes Dealers Make (and How to Avoid Them) MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024 | 1

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FEBRUARY 2024 | CONTENTS

The official magazine of the

MIDATLANTIC INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION PENNSYLVANIA • MARYLAND • DELAWARE

FEATURES

April Hollobaugh ajautosalestitusville@gmail.com A&J Auto Sales, Titusville, PA

New Year, Same Challenges From an auto finance compliance perspective, I cannot remember a more threatening environment. 8 | The Crucial Role of 20 Groups for Dealerships in Today’s Automotive Landscape Amidst technological advancements, shifting consumer preferences, and market disruptions, the importance of collaboration and shared knowledge has become paramount. 9 | Acquiring More Used-Vehicle Inventory with Video Offers Dealers need to make their emails stand out from the crowd. One solution to grab your customers’ attention is video. Specifically, videos that make personalized cash offers to a specific customer for a specific vehicle. 10 | FTC Passes Amendment to Safeguards Rule An amendment approved in October will require auto dealers and other non-banking institutions to report security breaches involving the information of more than 500 consumers to notify the FTC within 30 days of the discovery. The amendment will go into effect May 13, 2024. 14 | A Man and His Jaguars: Lost Jaguars: The Tom Hendricks Collection Tom Hendricks’s love for the British ‘leaping cats’ that he had inherited from his father was shared by his wife and passed down to his daughters. The Jaguars that Tom and his family so treasured will now be enjoyed by many others. 18 | Top 10 Reinsurance Mistakes Dealers Make (and How to Avoid Them) Properly selected and leveraged, the right program can benefit every aspect of your dealership enterprise — from F&I and fixed ops to succession planning and key manager retention. 22 | FTC Finalizes CARS Rule The National Independent Automobile Dealers Association expressed concern about the impact on dealers from the rule. 23 | 5 Visual Marketing Tips for Car Dealers to Boost Online Leads This article gives dealerships 5 tips based on visual marketing strategies to boost their brand recognition and sales.

James Makia james@exclusivemotorcarsmd.com Exclusive Motorcars, Randallstown, MD

DEPARTMENTS

1501 North Front St., Harrisburg, PA 17102 (717) 238-9002 midatlanticiada.org Noah Melamed - Chairman Ticket to Ride Auto, Lancaster, PA nmelamed@yourttr.com Bert Straub, President 1st Choice Auto LLC, Fairview, PA bertcstraub@gmail.com Vacant, President - Elect Lisa Cohowicz, Interim Treasurer North East Pennsylvania A/A, Scranton, PA lisac@nepautoauction.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

Dan McNamee dtlcars@aol.com Daniel Thomas Auto Sales, Croydon, PA Gregg Pachik gregg.pachik@manheim.com Manheim Philadelphia, Hatfield, PA Kerri Rotunda kerrir@corryade.com America’s Auto Auction Erie, Corry, PA

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2 | 4 | 5 |

President’s Message Executive Director’s Message We’re Hiring - MidAtlantic Employment Ad

5 | 16 | 20 |

Advanced Issuing Agent Training Courses Carlawyer Auction Directory

MIDATLANTIC INDEPENDENT AUTO DEALERS ASSOCIATION SPONSORS

Danielle Royer royers322motors@gmail.com Royer’s 322 Motors, DuBois, PA _____________________________ Tom Brandis • Executive Director WOULD YOU LIKE TO RECEIVE A DIGITAL EDITION OF THE MIDATLANTIC DEALER NEWS MAGAZINE? Email steve@piada.org Copyright 2024 MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024 | 1

q PRESIDENT’S MESSAGE

DRIVING POSITIVE CHANGE Dear Members, After almost two decades of dedicated and exemplary service, John DeFilippo has decided to resign as Treasurer. John's loyalty to our association has been invaluable, particularly during challenging times like the COVID shutdown. His independent used car industry expertise has significantly contributed to our growth and success. We extend our heartfelt thanks to John for his exceptional service as Treasurer. His impact will be remembered and appreciated as we move forward.

IT’S TIME TO NOMINATE THE BEST OF THE BEST

Bert Straub President MidAtlantic IADA

Please take a moment to consider a nomination for the 2024 MidAtlantic IADA Dealer of the Year and send it in today!

As we embark on an another exciting chapter for our association, we seek fresh perspectives and innovative minds to join our board. If you're passionate about making a difference in the independent used car industry and bringing a dynamic, forwardthinking approach, we want to hear from you. Join us in shaping your association's future and contributing to your industry's success. Contact me or Tommy anytime to explore how you may play a vital role in our vibrant community. Let's drive positive change and propel our association to new heights.

Each year, MidAtlantic IADA recognizes and presents the Dealer of the Year Award to one carefully selected dealer. The award was created to recognize the remarkable accomplishments of MidAtlantic independent dealers. For many years, award recipients have exemplified their commitment to quality and excellence in the industry, outstanding customer service, and giving back to their community to make it a better place for everyone.

We are beginning the process of filling the Treasurer position. We will seek an individual who shares John's passion for our industry and possess the financial acumen required for this critical role. If you or someone you know is interested in contributing to our association in this capacity, don't hesitate to contact Tommy Brandis, MidAtlantic’s Executive Director.

Warm regards,

Bert

This prestigious award not only celebrates business success, but also honors dealers who embody ethical practices and community stewardship. Your nomination plays a crucial role in acknowledging and spotlighting those who go above and beyond in shaping the automotive industry with integrity and a positive impact.

EMAIL NOMINATION TO: STEVE@PIADA.ORG Steve Smith, Office Manager

2 | MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024

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MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024 | 3

q EXECUTIVE DIRECTOR’S MESSAGE

MUST ATTEND EVENTS FOR 2024 Hello, Dealers! February happens to be one of the most exciting months for me in “car biz.” As a BHPH dealer, February is when we all patiently wait for tax return checks to hit our customers’ bank accounts so they catch up on their delinquent payments or, even better, purchase their next vehicle. But February is also when the “save the dates” for 2024 Conventions come out. This year is no different and now is the time to break out your calendars, contact your travel agents, and start booking flights. In my opinion, here are the three “MUST ATTEND” events for 2024. BHPH UNITED SUMMIT APRIL 23-25, 2024 THE BELLAGIO HOTEL, LAS VEGAS To kick off the season is the 3rd annual BHPH United Summit being held April 23-25, 2024, at the Bellagio Hotel in Las Vegas. I have been invited to be a part of this year’s advisory council and have witnessed the agenda come together. All I can say is that it is hard to believe how much education is packed into this event. The vendors who have created BHPH United are on my Mount Rushmore of industry leaders, and the dealers who will be presenting this year’s topics are some of the best in the business.

Executive Director MidAtlantic IADA Tommy Brandis

NIADA CONVENTION & EXPO JUNE 17-20, 2024 THE WYNN, LAS VEGAS Up next is the Grand Daddy of all conventions - The NIADA Convention & Expo being held June 17-20, 2024, at the Wynn in Las Vegas. Last year’s event had over 50+ hours of education and was the largest expo hall I have ever seen. From what I have heard, this year will be even bigger. It truly is a one stop shop for education and information. MIDATLANTIC IADA CONVENTION SEPTEMBER 15-17, 2024 CEASAR’S, ATLANTIC CITY Wrapping up the trifecta is the 2nd annual MidAtlantic IADA Convention being held September 15-17, 2024, at Ceasar’s in Atlantic City. Last year’s event is still being talked about by industry vendors and dealers alike. This year’s event will be two full days of training and education that will culminate with our now famous “Monday Night Football Vendor Tailgate.” Our board has been working hard on the agenda and we already have numerous vendors and presenters lined up. Stay tuned for more information on what is fast becoming the biggest event on the east coast. 2024 is lining up to be a great year for our industry. I am looking forward to seeing everyone at these “MUST ATTEND” events. Until next month,

Tommy

4 | MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024

t GET TO KNOW YOUR MID-ATLANTIC STAFF HOW MAY WE HELP YOU? Learn more about the Association staff members serving you! Our friendly and knowledgeable staff is always here to help members. CALL OR EMAIL US TODAY! Tommy Brandi Executive Director (717) 317-3098 tommy@piada.org Kathy Sabaski Deputy Executive Director (717) 238-9002 kathy@piada.org Steve Smith Office Manager (717) 238-9002 x118 steve@piada.org Cynthia Slemons, Membership Specialist (717) 238-9002 x16 cynthia@piada.org Nicole Autry Dealer Set-Up Unit (717) 317-1966 nicole@piada.org Christine Everett Lead Title Clerk (717) 238-9002 christine@piada.org India Thomas, Title Clerk (717) 238-9002 india@piada.org Amber Benson-Goolsby Title Clerk (717) 238-9002 amber@piada.org Tammy Farmer Receptionist (717) 238-9002 tammy@piada.org

ADVANCED ISSUING AGENT TRAINING COURSES

ONLINE COURSES

for your convenience The online training courses will be provided by Pennsylvania Association of Notaries, a PennDOT approved instructor. Members/Nonmembers: $169

MIDATLANTIC IADA is GROWING!

MidAtlantic IADA is currently seeking qualified candidates for these roles: •

•

MidAtlanticDealerNews-FEB2024-print.pdf

1/9/24

11:01 AM

MIDATLANTICIADA.ORG

Title Department Lead – Pennsylvania (starting at $23/ hour)Ideal candidate will have a minimum of 3 years PennDOT and/or CVR experience Title Clerk – Pennsylvania, Retail and/or Salvage (starting at $20/hour) Ideal candidate will have a minimum of 1 year PennDOT and/or CVR experience C Administrative Assistant M (starting at $18/hour) Administrative Assistants are Y given preference for future title CM clerk positions. MY

All pay plans are based on proven CY experience. We also offer medical, dental, vision and retirement plans. CMY There will be additional upcoming K advancement opportunities. Submit resume and cover letter to: kathy@piada.org or call Kathy at 717-238-9002 for more information.

MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024 | 5

NEW YEAR,

SAME CHALLENGES

By Steve Levine, Ignite Consulting Partners

’m writing this article in December, with holiday preparations underway, to then be followed by the annual ritual of reflecting upon the year soon coming to an end. This article won’t be published, though, until after the New Year, when everyone will have closed their books on this 2023 and will feverishly be focused on how to successfully fill in the blank canvas of the coming year. I’ll confess that I find both “year end summaries” and “how to win in the New Year” articles difficult to write, to me they are predictable and merely seek to fulfill our need to close one chapter and optimistically open the next. The only thing that really changes is the name of the month on the calendar. Does it really matter whether it's December or January? The challenges remain the same. Challenges? That word seems to be a bit of an understatement. Between the difficulty in finding reasonably priced inventory and hiring a motivated workforce to rising fuel, grocery and just about all other prices, to consumer discontent over higher energy and other bills, the struggles we all face are very real. From an auto finance compliance perspective, I cannot remember a more threatening environment, and I started doing this before the convenience of the internet, back when the fax machine ruled the industry. For starters, we’re dealing with two powerful federal regulators, the CFPB and FTC, each who seem locked in a battle to outdo the other when it comes to dictating the business practices of auto dealers and finance companies. From the FTC’s Safeguards Rule to the CARS Rule that comes into effect July 30th, to the CFPB’s attack on fees and the refund process for ancillary products, the hits just keep on coming. Then there’s the wave of consumer protection advocates that have seemingly multiplied and achieved influence throughout state Attorneys General and other regulatory agencies. Let’s not forget about the army of

6 | MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024

plaintiff lawyers that stand ready to use this favorable climate and the bevy of consumer protection laws at their disposal to run roughshod over the industry. Last but not least, today’s consumers have never been more empowered to take the fight to car dealers and creditors through the troves of available tools (much of them being used as weapons) found on social media and the internet. Forget about the name of the month on the calendar, does the year on the calendar matter to a significant degree? I’ve been writing these articles for a long time, and my “year end - new year” mantra hasn’t changed all that much. “Do an annual review of your deal paperwork, update policies and procedures, audit high risk areas, develop robust complaint management skills, and train your staff ”. Stop me if you’ve heard this before. The recipe hasn’t changed folks.

What has changed are the penalties for non-compliance. The regulatory fines have never been greater. The costs of defending lawsuits have only increased. The power of one consumer to negatively impact your business through social media terror tactics has led to a whole new degree of accountability. So what’s an auto dealer or other creditor to do? How about doing something different? How about taking a good hard look at yourself through the eyes of a regulator or consumer advocate and taking proactive steps to protect your business? In my travels, I have the opportunity to meet a lot of dealers and other industry participants, and the overwhelming sentiment I hear is “I know I need to get better at compliance, I just need to find the time”. I’ve run into lots of the same folks year after year, and when I ask them what changes they’ve made from one year to the

next to protect their business, I’m usually met with the same sheepish looks.

the first things to be moved down the list when things get busy?

I can’t do it for you! Are you content with the status quo and having a target on your back, or are you willing to up your game? I’ll say it again….. “do an annual review of your deal paperwork, update policies and procedures, audit high risk areas, develop robust complaint management skills, and train your staff.” You’ll get this same guidance whether you open an industry publication, do an internet search, or attend a conference. The solution isn’t a secret. In my experience, the difference between success and failure is whether ownership and management are willing to give these tasks some level of priority, or will they be

The choice is yours. That blank 2024 canvas is staring at you. How will you choose to complete it? n Steve Levine is an auto finance lawyer with 30 years of experience helping and protecting car dealers and finance companies. He is an Owner and Chief Legal and Compliance Officer of Ignite Consulting Partners, which offers compliance, operational and best practices guidance and training. Please contact info@IgniteCP.com to learn more. Please follow Steve on Twitter @ LawyerLevine for compliance and industry related content.

Don’t forget about the MidAtlantic

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Your One-Stop Shop for Auto Dealer Insurance MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024 | 7

The Crucial Role of 20 Groups for Dealerships in Today’s Automotive Landscape By David Brotherton, Senior 20 Group Moderator & Consultant, NIADA

In an ever-evolving automotive industry, the need for dealerships to stay ahead of the curve has never been more critical. Amidst technological advancements, shifting consumer preferences, and market disruptions, the importance of collaboration and shared knowledge has become paramount. One powerful tool that stands out for dealerships seeking growth and adaptation is the 20 group. WHY DEALERS SHOULD JOIN A 20 GROUP NOW • Market Insights and Trends: In an era of rapid changes, staying updated with market trends, consumer behaviors, and industry innovations is crucial. 20 groups provide a platform for members to share real-time insights, enabling dealerships to adapt swiftly to market shifts. • Performance Benchmarking: Comparing key performance indicators (KPIs) against similar-sized dealerships allows for a comprehensive understanding of strengths, weaknesses, and areas for improvement. This data-driven approach empowers dealerships to set realistic goals and strategies for growth. • Problem-Solving and Best Practices: Collaboration within a 20 group fosters an environment where dealerships can openly discuss challenges and share successful strategies. This collective knowledge accelerates problem-solving and implementation of best practices across the board. • Networking and Relationship Building: Building connections with non-competing dealerships fosters a sense of community. These relationships often extend beyond meetings, facilitating ongoing support and advicesharing among peers. • Adaptation to Technological Advancements: Technology is reshaping the automotive landscape. 20 groups serve as a hub for discussions on adopting new tools, software, and digital strategies, ensuring that dealerships stay

•

competitive in a tech-driven market. Experienced, Professional Moderators: Your moderator does more than use a gavel. Bringing experience in operations, accounting, compliance and regulation and, most importantly, the perspective of working with some of the nation’s best dealers as they face the same problems you do provides each Member with a relationship that can pay huge dividends. Industry Relationships: Your 20 Group will be a gateway into the newest innovations, industry expert speakers and educators and a long-term look into what makes our industry continue to grow, adapt and thrive.

OVERCOMING CHALLENGES THROUGH COLLABORATION Dealerships face unique challenges—be it inventory shortages, changing customer expectations, or regulatory shifts. By joining a 20 group, these challenges become collective opportunities. Collaborative problem-solving mitigates risks and helps dealerships navigate uncertainties more effectively. The automotive industry is undergoing rapid transformations, demanding proactive adaptation from dealerships. In this context, the role of 20 groups as a catalyst for growth, learning, and adaptation has never been more pronounced. By harnessing the power of shared knowledge, benchmarking, and collaboration, dealerships can not only thrive but also shape the future of the automotive industry. The MidAtlantic 20 Group will be meeting again in May! Don’t wait, the time to secure your spot is NOW! Reach out to John Dismukes at NIADA for more information. John can be reached at john@niada.com! n

8 | MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024

Acquiring More Used-Vehicle Inventory with Video Offers

Dealers need to make their emails stand out from the crowd. One solution to grab your customers’ attention is video. Specifically, videos that make personalized cash offers to a specific customer for a specific vehicle. By Jason Ezell, Vice President of Partner Communications at FlickFusion A significant challenge for dealerships today is the acquisition of high-quality used vehicles for their inventory. The problem has been exacerbated by the rise of online retailers that offer cash for vehicles, sight unseen. Customers like these transactions because they’re convenient and because they feel like they can get the best deal if they shop their vehicle online. To adapt to changing market expectations, dealers need to be aggressive about identifying and making offers to customers who own desirable vehicles. Although most dealerships send out email offers to lists curated from equity mining software, open rates on these campaigns could be better. Considering the average professional receives 120 emails every day, dealers need to make their emails stand out from the crowd. One solution to grab your customers' attention is video. Specifically, videos that make personalized cash offers to a specific customer for a specific vehicle. Here’s how they work: • Equity mine. Use your dealership’s equity mining tool to identify potential trade-in opportunities within your existing customer database. These tools can pinpoint customers who are currently, or will soon be, in a position to consider trading in their vehicles. • Generate personalized video offers. Upload a list of customers to a video marketing platform built on an artificial intelligence (AI) engine. AI technology can instantly create dozens, if not hundreds, of personalized video offers within minutes. These videos are tailored to each specific customer and vehicle in question. The video is fashioned as a short presentation on the benefits of selling to your dealership. Each video mentions the customer by name, as well

as their vehicle make and model, and gives a specific monetary offer, right down to the penny. • Engage with personalized videos. Video emails have consistently shown higher open and click-through rates than their text-based counterparts. When a customer receives a personalized video offer, they’re far more likely to click, open, and engage with the content. The inclusion of their name and details about their vehicle piques their interest. • Call to action. Within the video, a clear call to action invites the customer to take the next step. They can click on a link if they’re interested in the offer or want to learn more. This seamless transition from video to action streamlines the process for the customer. WHY PERSONALIZED VIDEO OFFERS WORK The effectiveness of personalized video offers lies in their ability to create a meaningful connection with the customer. Here’s why they work: • Personalization. Customers appreciate it when businesses take the time to personalize their interactions. By mentioning the customer’s name and providing a specific offer tailored to

their vehicle, dealerships demonstrate a commitment to meeting individual needs. • Increased engagement. Video content is inherently more engaging than text-based communications. When customers watch a video that speaks directly to them, they’re more likely to watch the entire presentation, which typically lasts only one to two minutes. • Convenience. Personalized video offers align with the trend toward online convenience. Customers can explore the value of their trade-in or sale from the comfort of their own homes, on their own time. • Competitive edge. By offering customers a seamless way to explore their vehicle’s worth, dealerships can compete more effectively with online retailers such as Carvana. Personalized video offers give dealerships the edge they need to increase their used-vehicle acquisition. Personalized video offers for trade-in vehicles are a potent tool for auto dealerships seeking to enhance their used-car inventory. In an industry where adaptation is key, this innovative approach helps dealerships compete and meet the evolving expectations of their customers. n

MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024 | 9

DE ALER COMPLIAN CE

FTC Passes Amendment to Safeguards Rule

utomobile dealers are now facing an additional requirement under the Federal Trade Commission’s Safeguard Rule.

An amendment approved in October will require auto dealers and other non-banking institutions to report security breaches involving the information of more than 500 consumers to notify the FTC within 30 days of the discovery. The amendment will go into effect May 13, 2024. This amendment follows the update to the Safeguards Rule, implemented in June 2023. The Safeguards Rule approved in October 2021 requires financial institutions to designate an individual to oversee their security program, develop a written risk assessment, limit and monitor who can assess customer information, encrypt information, train security personnel, develop a response plan, assess security practices of service providers and implement multi-factor authentication for any individual accessing customer information. The FTC said the intent of the Safeguards Rule is for institutions to strengthen their security to protect customers’ financial information. “Companies that are trusted with sensitive financial information need to be transparent if that information has been compromised,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection in a press release. “The addition of this disclosure requirement to the Safeguards Rule should provide companies with additional incentive to safeguard consumers’ data.” The information to be reported includes the name and contact information of the finance institution, a description of the type of information involved, the date or range of the offense, the

number of customers affected and a general description of the event. The notification of the breach to the FTC is in addition to any state requirements to self-report issues, which can vary from state to state. Shannon Robertson, Executive Director of AFIP, points out that many of the state reporting requirements are more concerned about the harm to the customer, whereas the FTC’s notification also looks at whether the organization took steps to prevent the breach. Some objections to the amendment were filed, including suggesting only reports being made after a series of events. The commission responded, “not every notification event is necessarily the result of a failure to comply with the Safeguards Rule, it disagrees that a single breach cannot be ‘suggestive of compliance failures.’ Indeed, the fact that an institution has not experienced a breach does not necessarily mean that the institution complies with the Rule’s requirements. The Commission believes that taking action to correct a potential Safeguards Rule violation before additional security events can harm consumers is appropriate and desirable.” The commission acknowledges that not every breach report will result in an enforcement action or investigation. Robertson said that the dealer’s self-reporting and showing that they have worked to implement the Safeguards Rule could provide a level of defense or protection from a fine. The FTC estimates the amendment will impact 115 financial institutions per year. Reports of breaches will be made public in a database. n

10 | MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024

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A Man and His Jaguars Lost Jaguars: The Tom Hendricks Collection By Jeff Dreier, Dreier Auto Sales, Shavertown, PA

t all began when, as a young boy, Tom Hendricks accompanied his father, Carl, to the Indy 500 each year to help in the pits – and fell in love with cars! When he was old enough for a paper route, he saved all his money to buy his first car – a hot rod Chevy. Around that time, Tom’s father bought a new 1954 Jaguar XK120 with which Tom was head over heels. Much to Tom’s disappointment, his father sold that Jaguar a few years later.

Tom purchased but did not restore this car, instead keeping it in original condition.

In 1961, when Tom and the love of his life, Sue, got married, their parents encouraged them to use their wedding gift money as a down payment on a home. Instead, they used that money to purchase that 1954 Jaguar XK120, which had been originally owned by his father.

A 1959 Lister-Costin Jaguar sports racing two-seater, one of 17 originally built, which had begun its life on the British racing scene, was to become Tom’s next acquisition. At a

Tom soon acquired another interesting Jag, a 1962 E-Type convertible that had been owned by a prominent Washington D.C businessman and one-time ambassador. Rumor has it that this businessman bought the car for a female friend who had a penchant for “Tiffany” blue - thus the car was repainted to her preference.

Throughout the 1960s and 1970s, Tom, Sue and daughters, Jennifer and Julie, were regulars at concours events up and down the east coast with their perfectly original example of an XK120. In 1968, at Jaguar’s 20th anniversary event at the New York Auto Show, it was the Carl/Tom Hendricks XK120 that Jaguar Cars, Inc. chose to display as a benchmark for that model. By the mid 1970s, Tom was the chairman of the Nation’s Capital Jaguar Owners Club and was instrumental in compiling the judging rule book, which has since evolved into Jaguar Club North America governance. Around this time, a chance comment at a Jaguar meet led him to LT3, one of three factory-prepared lightweight XK120s that had been scheduled for Le Mans in case the C-types were not ready. LT3 was then purchased by the Jaguar West Coast Distributor, Charles Hornberg, who used the car for promotional purposes by campaigning it, with Sherwood Johnson and Phil Hill behind the wheel. The car had a winning race history during the early 1950s.

1973 race to celebrate the 50th anniversary of Le Mans, this Lister was piloted on the track by racer Chris Drake. In 1976, Tom and his family traveled to Britain to purchase the Lister, to visit with many Jaguar contacts that he had corresponded with over the years, and to tour the famed Brown Lane Works in Coventry. This trip is still fondly remembered by Tom’s wife and daughters. Over the next years, among other cars, Tom acquired a 1951 Jaguar XK120 Roadster, a

14 | MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024

1951 Jaguar XK120 Fixed Head Coupe, and a 1949 MG TC Midget, right hand drive, two-seater sports. In time, a barn size garage was added to the family home to house Tom’s every growing collection of Jaguars, trophies, memorabilia, parts and automotive equipment. Soon cars, mechanical parts and body parts filled the residential garage, the new garage and the home’s cellar. So much so, that a set of alloy body panels for an XK120 resided under the cellar stairs.

help of family members, to researching and documenting the history of the Lost Jaguars. The collection was featured at the 2023 Bonham Auction at Amelia Island Concours de Elegance. There was lively bidding by a significant number of bidders in these Jaguars from throughout the country, as well as from overseas. All the cars in this collection were sold at or above estimated valuations. Even the so-dubbed “Mortal Remains”, consisting of alloy hood, front fenders, rear trunk lid, and original chassis plate of that car, elicited some smiles but fetched a handsome price.

Tom’s love for the British ‘leaping cats’ that he had inherited from his father was shared by his wife and passed down to his daughters. The Jaguars that Tom and his family so treasured will now be enjoyed by many others.

Tom, who died in 2022, and his family have been dear friends of our family for many years. After Tom’s passing, I had the privilege of assisting the family with this unique and valuable Jaguar collection. The family asked me to help secure a professional appraisal of the cars.

I had attended the Amelia Island Concours de Elegance, a multi-award winning motoring event like no other, for almost two decades. I knew that the auctions of rare and exceptional cars to well-heeled buyers would be a good fit for the Tom Hendricks Collection. Having often attended the Bonham Auction at Amelia, I was always impressed by the quality and professionalism of their auction. I was fortunate to contact Rupert Banner, a Vice resident of the Motorcar Division, who expressed great interest in the Jaguars. Together, we visited the family, rolled up our sleeves, and discovered one significant find after another. Rupert devoted an extraordinary amount of time and expertise, along with the

The new owners are eager to restore and bring these cars back to original condition. Car aficionados will have the opportunity to view these unique cars at events and concours around the country. And it could just be that, after a long time lost to the public, these ‘leaping cats’ will once again enjoy being in the spotlight. P.S. For those who have not been there, I would recommend the Amelia Island Concours for anyone interested in rare and beautiful cars. You will see examples of cars that you have never heard of before. The event is held early in March and is a chance to escape to beautiful weather, palm trees and the ocean. There are lovely condos and houses on the omni plantation that can be rented during the event. The nearby town of Fernandino Beach is very historic – with lots of wonderful restaurants and shops. The crowd is laced with many automobile afficionado celebrities. But most of all, it’s an opportunity to relax and enjoy some of the most outstanding automobiles in the world on the auction block or at the Sunday Concours. n

MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024 | 15

THE CARLAWYER©

The CARLAWYER

By Eric Johnson, Partner in the law firm of Hudson Cook, LLP, Editor in Chief of CounselorLibrary.com’s Spot Delivery® questions, and guidance for consumers to help them understand their rights when they buy a vehicle once the rule goes into effect. The CARS Rule is effective July 30, 2024.

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, Federal Communications Commission, Consumer Financial Protection Bureau, and 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 December 12, the Federal Trade Commission announced that it finalized the Combating Auto Retail Scams Trade Regulation Rule ("CARS Rule") related to the sale, financing, and leasing of covered motor vehicles by covered motor vehicle dealers. The CARS Rule, among other things: (1) prohibits dealers from making certain misrepresentations in the course of selling, leasing, or arranging financing for motor vehicles; (2) requires accurate pricing disclosures in dealers' advertising and sales communications; (3) requires dealers to obtain consumers' express, informed consent for charges that they pay as part of the vehicle purchase; (4) prohibits the sale of any add-on product or service that confers no benefit to the consumer; and (5) requires dealers to keep records of certain advertisements and customer transactions. The FTC has also created guidance on the CARS Rule for dealers, including a website with frequently asked

On December 13, in response to a rise in text messaging scams, the Federal Communications Commission adopted rules that allow the agency to "red flag" certain numbers and require mobile carriers to block texts from those numbers. The rules also provide that the National Do Not Call Registry's protections apply to text messaging. In addition, the rules encourage providers to make emailto-text messages a service that consumers proactively opt into. Finally, the new rules prohibit comparison shopping websites and lead generators from using a single consumer consent to send texts or make calls to consumers; consent must be obtained one seller at a time. On December 15, the Consumer Financial Protection Bureau announced a settlement with a medical debt collector, Commonwealth Financial Systems, to resolve allegations that it violated the Fair Credit Reporting Act, the FCRA's implementing Regulation V, the Fair Debt Collection Practices Act, and the Consumer Financial Protection Act. The CFPB alleged that the company: (1) violated the FCRA by failing to implement reasonable written policies and procedures regarding the accuracy of furnished information and failing to conduct reasonable investigations of disputed debts; (2) violated the FCRA and the FDCPA by failing to report to credit reporting agencies that the debts were disputed; and (3) violated the FDCPA by continuing collection activities before obtaining verification of the debts despite receipt of consumers' debt validation notices and by misleading consumers through its continued collection activities after the consumers disputed the debts but before it obtained substantiation of the debts. Finally, the CFPB alleged that, by violating

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the FCRA, Reg. V, and the FDCPA, the company violated the CFPA. The consent order permanently bans the company from debt collection and consumer reporting activities, requires the company to request that each credit reporting agency to which it furnished data delete all consumer collection account tradelines it previously furnished, and requires the company to pay a $95,000 civil money penalty, which takes into account the company's sworn and documented inability to pay an additional civil money penalty of $1,905,000. On December 19, the Federal Trade Commission announced a settlement with Rite Aid to resolve charges that it failed to implement reasonable measures to prevent harm to consumers in connection with its use of facial recognition technology at its retail locations. The technology was used to identify customers that Rite Aid had previously deemed likely to engage in shoplifting or other criminal behavior. The technology generated alerts that were sent by email and through a mobile phone application to Rite Aid's employees ("match alerts"), indicating that individuals who had entered Rite Aid stores were matches for individuals on Rite Aid's watchlist database. The FTC alleged that, after receiving these facial recognition match alerts, Rite Aid employees took action against the individuals who had triggered the supposed matches, including subjecting them to increased surveillance, banning them from entering or making purchases at the Rite Aid stores, publicly accusing them of past criminal activity in front of friends, family, acquaintances, and strangers, detaining them or subjecting them to searches, and calling the police to report that they had engaged in criminal activity. According to the FTC's complaint, many of the match alerts that led to these actions were false positives. Among other things, the FTC alleged that Rite Aid failed to consider or address foreseeable harms to consumers flowing from its use of facial recognition technology, failed to test or assess the technology's accuracy before or

after deployment, failed to enforce image quality standards that were necessary for the technology to function accurately, and failed to take reasonable steps to train and oversee the employees charged with operating the technology in Rite Aid stores. Rite Aid's failures allegedly caused or were likely to cause substantial injury to consumers, and especially to Black, Asian, Latino, and women consumers. The FTC also alleged that Rite Aid violated a 2010 order by failing to adequately oversee its third-party service providers. Among other requirements, the current proposed order prohibits Rite Aid from using facial recognition technology for surveillance purposes for five years. On December 20, the Federal Trade Commission announced that it extended the public comment period on the Trade Regulation Rule on Unfair or Deceptive Fees, proposed on October 11. The comment period, which was set to expire on January 8, has been extended for 30 days to February 7. The proposed rule would prohibit unfair or deceptive practices relating to fees for goods or services, including fees charged in connection with consumer financial products and services. Specifically, the proposed rule would prohibit businesses from misrepresenting the total costs of goods and services by omitting or hiding mandatory fees in advertising prices and misrepresenting the nature and purpose of fees. According to the FTC's rulemaking docket, over 44,000 comments on the proposed rule had been received as of the date the FTC announced its extension. On December 26, the Department of Justice obtained a consent order with the owner of a vehicle towing and repossession company, resolving allegations that he violated the Servicemembers Civil Relief Act by failing to file or filing inaccurate military affidavits in default judgment proceedings against SCRA-protected servicemembers. This is the first lawsuit brought by the United States against a towing company under the provision of the SCRA requiring the filing of military affidavits. That provision requires a towing company to file an accurate affidavit stating whether the vehicle's owner is in military service before it can get a court judgment authorizing it to sell a stored vehicle. If it

appears that a vehicle's owner is in military service, the court may not authorize the sale of the vehicle until it appoints an attorney to represent the servicemember. If that attorney then requests a postponement of the matter, the court must grant that request and postpone the case for at least 90 days. The DOJ also alleged that the defendant filed military affidavits stating that he was unable to tell whether a vehicle owner was in the military even in instances where the vehicle at issue was towed from a military installation or had military decals and instances when the vehicle owner or owner's spouse had informed the defendant of the owner's active military service. The consent order requires the defendant to pay $66,805 in relief for impacted servicemembers, forgive storage fees assessed to certain servicemembers, attend SCRA training, and institute new policies and procedures that comply with the SCRA. CASE(S) OF THE MONTH Repossession Agent's Taking of Possession of Car over Objection of Car's Owner Does Not Constitute Breach of Peace Absent Agent's Actions Likely to Cause Violence, Public Distress, or Consternation: After a car owner became delinquent on her car payments, the creditor hired a repossession company to repossess her car. When a repossession agent arrived at the owner's home, she ran outside, verbally objected to the repossession, called the police, and stood in front of the tow truck to prevent it from driving away. When the police arrived, they told the owner that the agent was allowed to take the car. The owner sued the repossession company for conversion, violation of the Fair Debt Collection Practices Act, and violation of the Pennsylvania Uniform Commercial Code, alleging that the company caused a breach of the peace and, therefore, improperly repossessed her car. The repossession company moved to dismiss the complaint, and the U.S. District Court for the Western District of Pennsylvania granted the motion. The court noted that "pleading a breach of the peace is a critical and necessary component of each of the three counts in the complaint." However, the court found that the owner's allegations centered on her actions, not the actions of

the agent, but it is the agent's actions that are critical. The court found that other courts look at factors such as "'the use of law enforcement; violence or threats of violence; trespass; verbal confrontation; and disturbance to third parties.'" The court found that the "taking of a vehicle over the 'oral objection of the owner, however strenuous, is not a breach of the peace unless accompanied by factors indicating that the activities of the repossession agent are of a kind likely to cause violence, or public distress and/or consternation.'" The court found that the agent's actions were limited to showing up and repossessing the car after the police granted authorization, which the court concluded were insufficient actions to constitute breach of the peace. See McCarthy v. First Credit Resources, Inc., 2023 U.S. Dist. LEXIS 205204 (W.D. Pa. November 16, 2023). COMPLIANCE TIP What was your New Year’s Resolution(s)? Hopefully, it/they included getting your dealership in compliance shape for the New Year. With the new CARS Rule effective date looming in July and the aggressive stance and activities of both federal and state regulators, you made the decision that this is the year you’re going to get your operations, F&I office, policies and procedures, and trainings into tip top shape for the potential state and federal (and potential consumer plaintiff) attacks that are surely around the corner. The FTC offers a lot of free resources for dealers to get you started and I can point you to other valuable resources if so inclined. Put a compliance budget together, appoint a compliance person to lead the charge, get them some compliance training, and get into compliance shape! 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 2024, all rights reserved. Single publication rights only to the Association. HC# 4889-4609-9866.

MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024 | 17

Top 10 Reinsurance Mistakes Dealers Make (and How to Avoid Them) By Graye Wolfe Reinsurance company ownership helps dealers build personal wealth with taxadvantaged income. But performance can’t be measured in profits and losses alone. Properly selected and leveraged, the right program can benefit every aspect of your dealership enterprise — from F&I and fixed ops to succession planning and key manager retention. Here are 10 mistakes dealers commonly make in their pursuit of maximum production and profitability.

Settling for the Factory Program This was my biggest mistake when I was a dealer. The factories want dealers to stay loyal to their program — they want the profits. Contrary to what the OEM says, their program is not necessarily what’s best for the dealer. Once you are signed up on a factory program, the factory then has control of and visibility into your service and parts operations. You could be subject to additional audits. You’ll also be subject to using factory time standards for repairs and the factory warranty labor rate instead of retail customer pay rates. And if there’s an OEM warranty audit, the factory will have visibility — which can also bleed over into your reinsurance program. And there could be exposure for chargebacks. You shouldn’t be settling for an OEM program. I strongly recommend that if you are considering this, you do your due diligence and compare other programs first.

Choosing the Wrong Program for Your Enterprise and Your Personal Finances It’s very important for you to consider your future plan for the dealership. Do you have adult children who are going to be entering the business? Not understanding the tax ramifications of your decisions can cost you a lot of money in the long run. It’s very important to have a long-term goal and planning session with your trusted advisors, including your CPA and attorney. Determine what you’re trying to accomplish — building long-term wealth or raising capital now. Also take a look at who is working in the dealership. Do you have partners? Do you have key managers? Then consider your short- and long-term goals, and make sure you have a thorough understanding of the available programs. A thorough comparison of all the available programs and an understanding of how each can help you meet your short- and longterm goals is imperative.

Prioritizing Fees Over Total Profitability and Structure Benefits When you form a reinsurance company, depending on the structure, you may have to come up with a set capitalization amount and pay fees to establish and annually renew your charter and file your reinsurance company's tax returns. While it’s important to pay a reasonable fee, you need to take a look at the total net return or benefit after fees. "Low-fee" providers may not give you many of the critical benefits or the right structure, and you may end up finding you don’t have access to your money. Once again, this is why it’s important to compare the programs side by side.

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A thorough review will cover about 30 questions and stack all the providers up against each other. In my experience, the programs with the lowest fees are the least likely to provide the structure, service, support and reporting you need. Be fee aware. But don’t make the fees the focus of your program selection.

Not Managing Rates, Claims and Trends Rates are very important — these are the costs that the F&I managers are selling from inside the F&I office. And there are many things that affect rates — certain cars that have a higher breakdown rate and increasing parts prices, for example — so you need to adjust what F&I is charging. You must choose a provider that fully comprehends this. If you’re not staying on top of those rates, comparing those to actual repair trends, comparing them to your loss ratios and loss severity, and making sure to make at least annual rate increases and doing some reserve and rate analysis, you will very quickly see repair costs go up, and then find that you’re not collecting enough. This will negatively affect profitability in your reinsurance company. Follow the trends. Make sure your rates are not necessarily just competitive with the factory rates, but that you’re also collecting enough money to maintain a healthy loss ratio inside the company.

Not Understanding How or When to Take Loans or Dividends Too many dealers fail to involve their key advisors and their CPAs as they set up their reinsurance companies. Understanding

the ability to take dividends and loans is a very important aspect of building wealth.

of your business. They are incredibly hard to replace.

Some providers allow loans only from earned premium. A few providers also allow loans from unearned premium. You want a provider that is very sensitive to your changing needs.

The innovative dealers I work with involve their GMs, GSMs, F&I directors and other key managers in reinsurance company ownership. This gives these key players an opportunity to share a small percentage of the reinsurance premium and profits and become part of something that’s going to build long-term wealth for them.

When a dealer decides to take distributions from their reinsurance company, they often take dividends when they should actually take out a loan. There are no taxes on loans as long as they’re repaid, but there are taxes on dividends. You and your provider have to know what the money is going to be designated for to determine the best option. It’s a good time to involve your CPA. They need to know what you're trying to accomplish, because once the dividend is taken, it can’t be paid back — nor can you recover the taxes you paid.

Not Leveraging Reinsurance in Your Succession Planning I often speak at 20 Groups and ask dealers about their succession plans — is their adult child or a partner prepared to buy them out of their business? With valuations of dealerships so high, it’s often difficult to raise the working capital to buy one. The greater a dealership’s net worth becomes, the larger the estate tax issue a dealer is going to have. Reinsurance companies accumulate a tremendous amount of cash and deferred profits. If your children want to buy the dealership in the future, consider forming one or more reinsurance companies in their names now. The profit and cash flow from these companies will go to them, with an agreement and restrictions that they’re to use the money to buy stock in the dealership. This way, they get a stake in the success of the business — but not the business itself — and help raising the working capital they’ll need to buy you out when the time comes.

Not Leveraging Reinsurance as a Key Manager Retention Tool If you run a good operation, your competition is going try to steal your key employees. These people are the lifeblood

The dealer then has control over how much is deposited in the key manager’s company, which acts like a deferred compensation plan. Best of all, forming reinsurance companies for key managers makes it much harder for other dealers to poach them.

Not Understanding Tax Benefits and Strategies and Not Involving Your CPA Many dealers don’t know that the tax structure that makes reinsurance possible has been around for nearly 40 years. It was part of the Reagan administration’s Tax Reform Act of 1986. Like all taxpayers, dealers must report and pay taxes on their earnings. But reinsurance company ownership creates a significant advantage that can help reduce your total liability. The deferral of taxes until the money is drawn out is one of the great benefits of reinsurance. A strong provider with a proven success track record will recommend involving the dealer’s CPA and attorney throughout the entire process as well.

Not Comparing Providers on an Equal, Side-by-Side Basis We find there are about 30 comparative questions that need to be asked of each potential provider, so you can have a thorough understanding of what they do and don’t do. Consider, for example, who’s going to do the best job delivering F&I and compliance training, which providers offer the most sensible and liberal loan policy (if you need a working capital), and how much involvement you will have in claims. When you lay these questions out on a sideby-side basis, it becomes fair to everybody. You end up knowing exactly what you’re

paying for. That will help you make a good, articulate, analytical decision.

Choosing a Provider that Restricts Your Rights of Ownership Too many dealers choose a provider that restricts your rights of ownership. If your provider doesn’t let you have involvement with high-dollar claims, doesn’t meet with you on a quarterly basis to look at trends and losses, doesn’t have innovative products, doesn’t allow you to choose the investment manager or manage the funds, or doesn’t allow you to borrow earned and unearned premium, you may have chosen the wrong provider. Dealers should demand all of the above as well as transparency on fees, claims and reserves and useful, understandable reporting, counseling and consulting. In short, you need to know how the reinsurance works and how it’s going to work for you — now and well into the future. BONUS Mistake No. 11: Not Realizing the Substantial Amount of Net Profit, Cash and Working Capital a Reinsurance Platform Will Provide You and Your Family When I was a dealer, I made this mistake because I did not understand how reinsurance worked. Only after I sold my dealerships did I realize the massive amount of money I left on the table. Reinsurance company ownership will help you and your family build personal wealth outside the dealership. It’s your own financial asset, separate from your retail enterprise but fueled by its success. If you have yet to take advantage, you are giving your underwriting profits away. Make reinsurance an urgent matter. Get into the right structure with the right provider right now, and avoid the mistakes that leave tax-advantaged income on the table. Properly selected and leveraged, the right program can benefit every aspect of your dealership enterprise. n Graye Wolfe is a former 10-store, 14-franchise dealer from Boise, Idaho, and senior managing director for Portfolio, a national provider of reinsurance and F&I programs and products.

MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024 | 19

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 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 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 Wednesday 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 AMERICA’S AA – ERIE 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 americaserie.com BLAISE ALEXANDER AUCTION 350 Fairfield Rd., Montoursville, PA 570.435.8391 Mondays: 10:45am blaisealexanderauction.com BLOOMSBURG AUTO AUCTION 25 Ridge Road, Bloomsburg, PA 17815 570.784.2306 Wednesday 10:00 AM bloomaa.com

CAPITAL AUTO AUCTION 5135 Bleigh Ave., Philadelphia, PA 19136 215.332.2515 Monday thru Friday 9:00 AM - 4:30 PM capitalautoauction.com

NORTH EAST PENNSYLVANIA AA 860 N. Keyser Ave., Scranton, PA 18504 570.207.CARS / Fax: 570.207.1860 Tuesday 10:00 AM nepautoauction.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

PERRYOPOLIS AUTO AUCTION Route 51 S. Perryopolis, PA 15473 724.736.4445 / Fax: 724.736.0466 Friday 9:45 AM perryautoauction.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

MARYLAND BSC AMERICA/BEL AIR AUTO AUCTION 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

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

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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 YORK STATE LINE AUTO AUCTION 830 Talmadge Hill Rd. S., Waverly, NY 14892 607.565.8151 / Fax: 607.565.3915 Ally Financial Open Sale –EVERY FRIDAY, 9:20 AM GM Financial Open Bi-weekly. Simulcast in all lanes. 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 PUBLIC AUCTIONS Capital Auto Auction 5135 Bleigh Ave., Philadelphia, PA 19136 215.332.2515 / Fax: 215.332.2534 capitalautoauction.com Capital Auto Auction 5001 Beech Rd, Temple Hills, MD 20748 301.316.4980 / Fax: 301.316.4982 capitalautoauction.com Carriage Trade Public Auto Auction 1200 W Ridge Pike, Conshohocken, PA 19428 800.441.6717 / Fax: 610.834.8274 Monday Sale Day 3:00 PM carriagetrade.com

How to Turn 100-plus Cars a Month Dealer who bills himself “world’s most successful car salesman” says it’s all about business structure. BY JIM HENRY, WARDS AUTO

Even Ali Reda, who bills himself as the world’s most successful car salesman, can’t be in five places at once — it only seems that way, as he routinely sells 100-plus cars a month for Les Stanford Chevrolet in Dearborn, MI. That’s more than triple the usual dealership benchmark of 30 cars per month per salesperson, Reda says in a recent Fixed Ops Roundtable webinar hosted by Ted Ings.

“The industry lied to us when it told us 30 is elite, that 30 is the ceiling,” Reda says, adding he has twice achieved 209 car sales in a month, his all-time monthly record. Reda says his record for a full year is 1,582 vehicles sold, in 2017, which he says is a world record. The total includes 1,530 new and 52 used, Reda says. “It’s controlled chaos a lot of the time,” he says. Reda credits trainer Damian Boudreaux, founder of Auto Training

Academy, with changing his mindset to believe much higher volume is possible while retaining the personal touch.

at a different stage” of the transaction, Reda says. “It’s fast, it’s efficient, it’s not rushed.”

At the most basic level, Reda says he sees himself as a problem-solver for car shoppers. Despite the high volume, Reda says all those customers feel like they’re getting Reda’s personal touch. “We want to make sure every customer knows we’re focused on them, and only them,” he says in the webinar.

Reda says that in years of refining his process, he has decided what he can delegate, such as managing the deal jackets, and what demands his personal attention.

Reda tells Wards he sometimes works on four or five transactions at the same time, shuttling from one to another. He also credits teamwork, specifically with his assistant Merna Beydoun. She takes on a lot of administrative tasks including filling out forms and documents, making sure required notices are provided and signatures are collected. “We have exactly mocked a doctor’s office. I have five offices. Each office is

Notably, Reda acts as his own F&I manager. Someone else may collect customers’ information, ship documents and collect signatures, but Reda says he submits the credit applications to lenders. “I don’t need to do certain things, going over the cars,” he says. “I need somebody to fill out a deal jacket. Things that were important to be done weren’t that important for me to do them anymore” as his client list has grown, Reda says. “Our F&I process is a little unique,” he says. “That part of it I settle, I handle it, myself.” n

MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024 | 21

FTC Finalizes CARS Rule By UsedCarNews Staff

The Federal Trade Commission finalized its automobile purchasing rule, which the agency says will combat “junk fees” and “bait-andswitch” issues. The Combating Auto Retail Scams (CARS) rule, which will take effect July 30, 2024, will require automobile dealers to provide consumers with an offering price, disclose all optional add-ons, and give information about total payment when discussing the monthly payment. Dealers must also get consumers’ “expressed, informed” consent for any charges as part of the vehicle purchase. The FTC rule scrutinizes add-ons, which are part of the vehicle purchase. The National Independent Automobile Dealers Association expressed concern about the impact on dealers from the rule. The Center for Automotive Research (CAR) found that the 10-year cost of the proposed rule to consumers would exceed $38 billion and would add 2 hours per transaction. NIADA members discussed the proposed vehicle shopping rule with lawmakers during the National Policy Conference in September. “It’s frustrating to see the FTC rush this rule out given the extensive questions, concerns and comments the FTC received about the proposal,” said NIADA CEO Jeff Martin. “When we met with the FTC at our Policy Conference in September, it was clear there were more questions than answers from the agency. Our members are not opposed to well-thought-out, reasonable and responsible regulation. But taking a small sample size and punishing the entire industry for the actions of a few rogue actors does more harm than good for consumers and dealers. We will review the over 370-page rule, help our dealers navigate the new compliance regulations, and explore other options to address some of the overregulation in this rule.” The proposed rule was presented in June 2022. The agency received thousands of comments. The final FTC rule: • prohibits motor vehicle dealers from making certain misrepresentations in the course of selling, leasing, or arranging 22 | MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024

financing for motor vehicles • requires accurate pricing disclosures in dealers’ advertising and sales communications • requires dealers to obtain consumers’ express, informed consent for charges • prohibits the sale of any add-on product or service that confers no benefit to the consumer • requires dealers to keep records of certain advertisements and customer transactions. “When Americans set out to buy a car, they’re routinely hit with unexpected and unnecessary fees that dealers extract just because they can,” said FTC Chair Lina M. Khan. “The CARS Rule will prohibit exploitative junk fees in the car-buying process, saving people time and money and protecting honest dealers.” The rule also includes language to make sure members of the armed services receive accurate information about the cost and financing of the vehicle, moving the vehicle out-of-state and repossession. “The Department of Defense appreciates the FTC’s CARS Rule,” said Ashish Vazirani, Acting DoD Under Secretary of Defense for Personnel and Readiness. “For our service members and their families, a car is an essential purchase, and this CARS Rule will help fight predatory practices that target our men and women in uniform. The Department is pleased to see the FTC issue the CARS Rule and believes it will contribute to service members’ overall economic security and readiness.” The FTC has developed a website guiding dealers on the new rule, including the definition of disclosing important facts about the deal, including offering price, clearly and conspicuously. “Under FTC law – and as defined in the CARS Rule – ‘clearly and conspicuously’ refers to a disclosure made in a way that’s easy for consumers to understand and difficult for them to miss,” the FTC website stated. n

5 Visual Marketing Tips for Car Dealers to Boost Online Leads By Sean Toussi, Glo3D.com As the name suggests, visual marketing emphasizes using visual elements and nonverbal cues over text, like images, videos, logos, and even physical appearance, to promote a brand's identity, values, and what it offers. Regarding dealerships, while many may associate this concept primarily with the physical aspects – such as appealing showroom design and other factors, what's often overlooked is the crucial role of visual marketing strategies in the online realm. This article gives dealerships 5 tips based on visual marketing strategies to boost their brand recognition and sales.

High-Quality Vehicle Imagery First impressions matter, especially in the automotive industry. When potential buyers visit a dealership's website, they want to see clear, consistent, and high-resolution images of the vehicles. Investing in professional photography to capture each vehicle's details, angles, and features can significantly impact decisionmaking. 360-degree car photography apps are also useful to enhance the visual experience further. These innovative tools enable customers to explore vehicles virtually, allowing them to rotate and inspect every angle of the cars from the comfort of their screens.

Leverage the Power of Video Marketing Statistics reveal that a whopping 74 percent of online content is videobased. Video content proves to be the most

engaging form of visual marketing for your car dealership's promotional efforts. Consider creating quality-production video content that includes interior and exterior shots and technical info that car buyers look for. These types of videos captivate your audience and provide invaluable insights into your vehicles and dealership experience without stepping into your car dealership. It nurtures potential car buyers, fosters trust, and drives them to take action.

User-Generated Content (UGC) In the context of car dealerships and visual marketing, UGC involves customers sharing their experiences, photos, videos, and opinions related to the dealership and the vehicles they've purchased. For example, dealerships can run contests and challenge strategies, including inviting customers to submit their best photos or videos of their vehicles. This strengthens the dealership's online community and provides authentic testimonials and valuable visual material, increasing the likelihood of achievement for potential buyers.

Infographics Infographics can significantly benefit a dealership in an online landscape. They serve as practical tools to simplify complex information and engage the audience. Research shows that on social media platforms, infographics are liked and shared three times more than plain text content, which means

they have a higher potential to reach a broader audience and generate more engagement. Infographics can be used to illustrate various aspects of the dealership's offerings, such as vehicle features, financing options, and customer reviews, making them a valuable asset for online marketing strategies.

Visual Testimonials In today's digital landscape, satisfied customers' voices are a powerful tool for boosting trust and driving sales. One effective strategy is to record customer testimonials, where happy buyers share their experiences with the dealership and vehicles. These authentic testimonials offer a personal touch that resonates with potential buyers and increases the likelihood of achievement for other potential car buyers still in doubt about the reliability of a car dealership’s services. In conclusion, harnessing the power of visual marketing in the online landscape is crucial for car dealerships looking to drive more leads and boost their brand recognition and sales. Dealerships can create a compelling online presence that resonates with potential buyers by focusing on high-quality imagery, engaging video content, user-generated content, infographics, and visual testimonials. These visual marketing strategies enhance customer engagement and build trust and credibility, ultimately contributing to the dealership's success in the competitive automotive market. n

MIDATLANTIC DEALER NEWS | MIDATLANTICIADA.ORG • FEBRUARY 2024 | 23

LEGAL BRIEFS

Prohibited Practices

By Gil Van Over, Executive Director of Automotive Compliance Education, Founder and President of gvo3 & Associates u BLANK, SIGNED DOCUMENTS No documents are to be signed in blank with the understanding that the t e r ms will be filled in later. u CASH BACK TO CUSTOMER Cash back to a customer from the dealer is generally considered to be a violation of the dealer-lender agreement and potentially bank fraud. u COMPLETING DOCUMENTS AFTER THE FACT All documents presented to the customer for signature must be fully completed before obtaining the customer’s signature. u CREDIT CARD DOWN PAYMENTS Most dealer-lender agreements prohibit borrowed down payments, and a down payment on a credit card is considered borrowed. Some exceptions apply. u FALSIFYING INFORMATION TO FINANCE SOURCES Providing false or misleading information to finance sources to obtain a credit approval is a violation of the agreement executed between the dealer and the finance source. u FORGING CUSTOMERS’ SIGNATURES Forgery is a crime. u FRONT-END IMPROVEMENT Front-end improvement is the practice of increasing an already agreed upon vehicle sale price. u INCLUDING UNDISCLOSED VOLUNTARY PROTECTION PRODUCT PRICE The salespeople are to sell the vehicle only. The F&I manager is to sell ancillary Voluntary Protection Products. Salespeople are not to include ancillary Voluntary Protection Products in any price quote.

uINCONSISTENT PRODUCT PRICING The pricing of VPP products must be consistent on all forms. These documents comprise the paper trail and include the menu, buyer’s or lease order, the Retail Installment Sales Contract or lease agreement, and the product enrollment forms. u KICKING THE TRADE This deceptive practice occurs when a customer owes more on the trade vehicle than the vehicle is worth. The salesperson does not believe they can obtain a credit approval with the amount of the prior loan balance and remove the potential trade from the deal. The customer is then encouraged to return the potential trade vehicle to the lien holder after the deal on the dealer’s vehicle is funded. u MENU MANIPULATION Any manipulation of the other fees, trade allowance, cash down payment, days to first payment, or purchase price, to artificially inflate the base monthly payment is forbidden. u MISSING ENROLLMENT FORMS Customers must sign enrollment forms for every product purchased. u PAYMENT PACKING This practice occurs when a payment quoted is more than the actual payment required to purchase the vehicle for the price agreed upon at that point in the negotiation. u PHOTOCOPY MILITARY ID It is a violation of a federal statute to make a photocopy of a military identification card. u POWER BOOKING This is the practice of showing nonexistent options to finance sources to artificially inflate the value of the vehicle.

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u PRODUCT STUFFING Product stuffing occurs when a product is included in the amount financed/ capitalized cost without the customer’s knowledge or consent. u SCOOPING REBATES This practice occurs when the dealership does not disclose or include an available consumer rebate as a reduction to the amount financed/capitalized cost, and absorbs the rebate into profit. u SHOTGUNNING MULTIPLE VEHICLE PURCHASES Shotgunning occurs when one person signs or cosigns for multiple vehicles within a short period of time without the finance sources’ knowledge. u SIGNATURE ON FILE The customer’s signature is to be obtained on all applicable documents. “Signature on file” or any other such designations are not permitted. u STRAW PURCHASES This is a specific form of falsifying information to finance sources. It occurs when the person who is purchasing and driving the vehicle is not a party on the retail or lease agreement. u TRADING RATE FOR PRODUCT Once the APR has been agreed upon, it cannot be lowered to facilitate the sale of ancillary after-market or Voluntary Protection Products. u YO-YO TRANSACTIONS This type of transaction is one where the customer is spot-delivered on a deal structure that the dealership does not reasonably expect any financial institution to purchase, then brought back to recontract on a new transaction that they may not have accepted when first negotiating the deal. n

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