The official magazine of the MIDATLANTIC INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION PENNSYLVANIA • MARYLAND • DELAWARE 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
Dan Limongelli, President-Elect Jo Dan Motors, Plains, PA jodanmotors@gmail.com
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
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
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
Kerri Rotunda kerrir@corryade.com America’s Auto Auction Erie, Corry, PA
Danielle Royer royers322motors@gmail.com Royer’s 322 Motors, DuBois, PA
Tom Brandis • Executive Director tom@midatlanticiada.org
WOULD YOU LIKE TO RECEIVE A DIGITAL EDITION OF THE MIDATLANTIC DEALER NEWS MAGAZINE? Email steve@midatlanticiada.org Copyright 2024
6 | Pennsylvania Automotive Industry Trade Practices Regulation takes Effect on August 19, 2024
This final-form regulation is intended to improve, enhance, and update the unfair or deceptive acts or practices regulations governing the automotive industry.
8 | How Dealers Can Focus on Best Practices, Financial Stability
Achieving a high level of customer satisfaction requires that every department within the dealership understands and supports the F&I process.
8 | It's time to nominate the 2025 Dealer of the Year
Please take a moment to consider a nomination for the 2025 MidAtlantic IADA Dealer of the Year and send it in today!
10 | Pennsylvania AG Sues Out-of-State Dealer
Pennsylvania Attorney General Michelle Henry announced the filing of a lawsuit against New Jersey business for the alleged unlicensed sale of used automobiles in Pennsylvania.
16 | Fall Legislative Session Preview
The Pennsylvania General Assembly is in a race to complete its current two-year session before November 30, as any unpassed bills will expire and need to be reintroduced next year. The House's legislative schedule was delayed until late September/early October due to special elections needed to fill two vacant Democrat seats, which will impact the chamber's majority balance. With only nine voting days in the House and twelve in the Senate this fall, the Assembly must focus on key issues such as managing abandoned vehicles, preventing catalytic converter theft, and expediting junk vehicle titling.
22 | Dealers: Plan Now for a Cybersecurity Attack
Experts discuss recent incidents and how dealers can protect their businesses. “This is a huge wake-up call for everyone in our industry,” dealership consultant Todd Caputo says. “You have to have a playbook or manual to open up when something like this occurs.”
ONE YEAR IN: MILESTONES, NEW BENEFITS, AND WHAT'S NEXT FOR OUR DEALERS
Executive Director
MidAtlantic IADA Tommy Brandis
Hello Dealers,
It’s hard to believe that I just celebrated my one-year anniversary as your Executive Director. It has been a rewarding year for me, and I hope you are seeing the changes taking place in your association. Between the time I am writing this and you read it, the 2024 MidAtlantic Convention & Vendor Tailgate will have taken place in Atlantic City. Additionally, President Bert Straub, Kathy Sabaski and myself will have attended the NIADA Policy Conference in Washington DC and our third regional 20 Group will be meeting in Baltimore, MD. We have elected also a new board of directors for the 2024-25 session at the Annual Presidents Meeting, which was held on September 15. So, I look forward to following up on these events in my next message.
HEALTH INSURANCE COMING SOON!
One major announcement that you already know if you attended the Convention, after many years of trial and error, mostly error, we will be offering you the opportunity to purchase health insurance as a member benefit. Keep an eye out in your emails for more information on this exciting benefit.
If you have any questions, concerns or ideas, I may be reached at tom@midatlanticiada.org or my direct cell phone (215-805-2034).
Until next month, Tommy
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 Brandis Executive Director (215) 805-2034 tom@midatlanticiada.org
Kathy Sabaski Deputy Executive Director (717) 238-9002 kathy@midatlanticiada.org
Steve Smith Operations Manager (717) 238-9002 steve@midatlanticiada.org
On behalf of the MidAtlantic Independent Automobile Dealers Association, I want to express our heartfelt gratitude for attending and contributing to the success of this year’s annual Convention, which was held from Sunday, September 15th through Tuesday, September 17th.
From the energetic kickoff with the “What to do NOW to WIN in 2025!” workshop to the insightful presentations and workshops that filled our agenda, your presence and active participation made this event exceptional.
Special thanks to Bill Neylan of Tax Max, Michael York, Tracy Myers, Steve Levine, and all our speakers for their invaluable insights and leadership. The workshops and sessions wouldn’t have been the same without your expertise and contributions.
We are also grateful for the support from our vendors, including Big Time Advertising, Buckeye Dealership Consulting, C & M Coaching, and so many others, who provided enriching experiences and shared essential resources with our attendees.
Auto Dealer/Garage Insurance Specialists
A special acknowledgment goes to everyone who joined us for the Sunday Night Football Welcome Party and the Industry-Only Monday Night Football Party. We enjoyed being with great company while supporting a meaningful cause—“Curing Kids Cancer.” The silent auction was a huge success, and your generosity will make a lasting impact. Your enthusiasm and support were the heart of these events, making them both fun and meaningful.
To the members of the MidAtlantic IADA and our Board of Directors, your ongoing dedication ensures the success of our community, and we couldn’t have done this without you. Thank you again for helping make this event a success. We look forward to seeing you next year! n
Bert Straub
Thank you to all of our
PENNSYLVANIA AUTOMOTIVE INDUSTRY TRADE PRACTICES REGULATION TAKES EFFECT ON AUGUST 19, 2024
This final-form regulation is intended to improve, enhance, and update the unfair or deceptive acts or practices regulations governing the automotive industry.
BY ERIK ROSS, SENIOR ASSOCIATE, MILLIRON & GOODMAN GOVERNMENT RELATIONS
In April of 2023, the Pennsylvania Office of Attorney General (OAG) proposed a regulation entitled: “Automotive Industry Trade Practices,” which sought to improve, enhance, and update the unfair or deceptive acts or practices regulations. After a public comment period, the OAG revised their proposed regulation and came back to the public with a “Final-form Regulation” on March 19, 2024. The automotive industry, members of the public and state legislative committees of authority provided comments to the OAG and the Independent Regulatory Review Commission (IRRC) during the proposed and final stages of the regulatory process.
On May 16, 2024, the IRRC approved the final-form regulation “Automotive Industry Trade Practices,” which became final when it was published1 in the Pennsylvania Bulletin on July 20, 2024. This finalform regulation took effect 30-days after publication or August 19, 2024.
Unfortunately, there has been a great deal of confusion surrounding this regulation due
to inaccurate or “click bait” advertisements on the internet and posts on social media claiming that Pennsylvania is ending annual vehicle inspections on January 1, 2025. FOX 43 News in the state Capital was asked to verify this claim and debunked it on August 13, 2024, on air and on its website: “No, Pennsylvania state vehicle inspections are not stopping in 2025 | VERIFY.”2 Specifically, FOX 43 found that: “There is currently no legislation in the Pennsylvania House or Senate which would end annual vehicle inspection requirements. There has also been no bill signed into law.”3
So, what does the OAG’s Automotive Industry Trade Practices Regulation do? The short summary is that it creates Section 301.2(5.1) (relating to advertising and sales presentation requirements), which directs that a motor vehicle dealer may not advertise or offer a motor vehicle for sale unless the selling motor vehicle dealer to designates a certified inspection mechanic to inspect a motor vehicle not more than 30 days after it enters the motor vehicle dealer’s inventory for all conditions
listed in Section 301.2(5). Thereafter, if the motor vehicle accumulates five hundred miles or more while in the inventory of the selling motor vehicle dealer, the dealer must inspect the motor vehicle for the conditions listed in Section 301.2(5) not more than 30 days prior to sale, excluding the ability of the vehicle to pass a State inspection.
As a threshold matter, OAG notes that it intends that the rulemaking use the term “inspect” in its ordinary meaning (i.e., to take a careful look) and not, in itself, to refer to a PennDOT safety inspection.
In addition, this section does not apply to sales of motor vehicles between two motor vehicle dealers, the sales of motor vehicles pursuant to a duly authorized vehicle auction license, the sales of salvaged or nonrepairable motor vehicles bearing the applicable certificate, or the sales of motor vehicles which are located outside the Commonwealth of Pennsylvania during the entire time it is advertised or offered for sale.
Detailed Summary of the Automotive Trade Practices Regulation
First, Section 301.14 (definitions) includes electronic means in the definition of “advertisement.”
Second, Section 301.2(5)5 (relating to written disclosures) is amended to require that the disclosure of the enumerated conditions be provided in writing.
Third, Section 301.2(5.1) (relating to advertising and sales presentation requirements) is created, it directs that a motor vehicle dealer may not advertise or offer a motor vehicle for sale unless the selling motor vehicle dealer designates a certified inspection mechanic to inspect a motor vehicle not more than 30 days after it enters the motor vehicle dealer’s inventory for all conditions listed in 37 Pa. Code Section 301.2(5). NOTE: As a threshold matter, OAG notes that it intends that the rulemaking use the term “inspect” in its ordinary meaning (i.e., to take a careful look) and not, in itself, to refer to a PennDOT safety inspection.
§ 301.2. Advertising and sales presentation requirements
(5) The representation in an advertisement or sales presentation that a motor vehicle or motor vehicle goods or services are of a particular style, model, standard, quality or grade if they are of another or if the representation conflicts with a written notice or disclosure required under this chapter. For the purposes of this chapter, a motor vehicle which is offered for sale is represented to be roadworthy, and the advertiser or seller shall disclose prior to sale the following conditions if the advertiser or seller knows or should know that the conditions exist in the motor vehicle:
(i) Frame bent, cracked or twisted.
(ii) Engine block or head cracked.
(iii) Vehicle unable to pass State inspection.
(iv) Transmission damaged, defective or so deteriorated as to require replacement.
(v) Vehicle flood damaged.
(vi) Differential damaged, defective or so deteriorated as to require replacement.
Thereafter, if the motor vehicle accumulates five hundred miles while in the inventory of the selling motor vehicle dealer, the dealer must inspect the motor vehicle for the conditions listed in Section 301.2(5), excluding the ability of the vehicle to pass a State inspection. This section does not apply to sales of motor vehicles between two motor vehicle dealers, the sales of motor vehicles pursuant to a duly authorized vehicle auction license, the sales of salvaged or nonrepairable motor vehicles bearing the applicable certificate, or the sales of motor vehicles which are located outside the Commonwealth of PA during the entire time it is advertised or offered for sale.
Finally, Section 301.4(9.1)6 Relating to general provisions – motor vehicle dealer) clarifies that compliance with section 301.2(5) (relating to written disclosure) is still required notwithstanding any use of the term, AS IS, under section 301.4(9) (relating to disclaiming warranty). The selling motor vehicle dealer must describe the vehicle as being sold “AS-IS,” and list in writing any conditions listed in Section 301.2(5).
§ 301.4. General provisions—motor vehicle dealer
(9) Where no express warranty is given, attempting to exclude the implied warranties of merchantability and fitness for a particular purpose in the sale of a motor vehicle purchased primarily for personal, family or household purposes unless the following notice in at least 20-point bold type is prominently affixed to a window in the motor vehicle so as to be easily read from the outside and is brought to the attention of the prospective purchaser by the seller:
This vehicle is sold without any warranty. The purchaser will bear the entire expense of repairing or correcting any defects that presently exist and/or may occur in the motor vehicle unless the salesperson promises in writing to correct such defect or promises in writing that certain defects do not exist.
This paragraph prohibits the use of the term ‘‘AS IS’’ unless the sales contract, receipt, agreement or memorandum contains the following information in a clear, concise and conspicuous manner on the face of the document; the notice shall be in addition to the window statement required by this paragraph and may not contradict an oral or written statement, claim or representation made directly or by implication with regard to the quality, performance, reliability or lack of mechanical defects of a motor vehicle which is offered for sale:
AS IS
THIS MOTOR VEHICLE IS SOLD AS IS WITHOUT ANY WARRANTY EITHER EXPRESSED OR IMPLIED. THE PURCHASER WILL BEAR THE ENTIRE EXPENSE OF REPAIRING OR CORRECTING ANY DEFECTS THAT PRESENTLY EXIST OR THAT MAY OCCUR IN THE VEHICLE.
We hope this article clears up any misperceptions about state inspections of motor vehicles in Pennsylvania and explains the new regulations adopted regarding “Automotive Industry Trade Practices.” n
6) 37 Pa. Code § 301.4. General provisions—motor vehicle dealer.
In today’s increasingly digital world, the automotive industry faces a growing array of operational challenges. The recent cyber event that affected thousands of dealerships across the country is just the latest example of how dealers, dealership senior leaders and principals must constantly think about the big picture and best practices.
Cybersecurity is certainly top of mind considering recent events, but there are three key areas dealers should pay closer attention to for operational success heading out of the summer months.
Ensuring Tighter F&I Process Integration With All Departments
F&I has proved to be a significant revenue stream for dealerships. F&I plays a crucial role in ensuring customers leave the dealership satisfied, informed and confident in their purchase. However, achieving this level of customer satisfaction requires that every department within the dealership understands and supports the F&I process.
While the F&I office is responsible for managing the financing and insurance aspects of a vehicle purchase, each department touches F&I, including sales and fixed ops. It’s important that all employees understand their F&I roles and responsibilities. This includes being knowledgeable about product offerings and gathering enough customer information to
How Dealers Can Focus on Best Practices, Financial Stability
Achieving a high level of customer satisfaction requires that every department within the dealership understands and supports the F&I process.
BY TIM BLOCHOWIAK, VICE PRESIDENT OF CLIENT WEALTH FOR PROTECTIVE ASSET PROTECTION
F&I Training and Communication Across Each Department
The sales team is often the first point of contact for customers, making their understanding of F&I processes and products critical. Dealerships, F&I program providers and/or agents must offer regular training sessions to educate sales staff about F&I products and their benefits. This enables salespeople to introduce these products early in the sales process, setting the stage for a seamless transition to the F&I office.
Dealers must always encourage open lines of communication between sales and F&I. Sales staff should provide F&I with all necessary customer information, helping to streamline the process and reduce wait times.
The service department also plays a vital role in supporting F&I, particularly when it comes to claims and warranty services. Service advisors should be wellversed in the details of various service contracts and protection plans offered by the dealership. This ensures they can accurately communicate coverage options to customers and address any questions or concerns.
Service teams must also understand how to efficiently handle protection plans,
working closely with F&I administrators to expedite the claims process, minimizing inconvenience for the customer.
Customer relations teams are instrumental in maintaining long-term relationships and ensuring customer satisfaction. To integrate effectively with F&I, these teams must collect and analyze customer feedback regarding their F&I experience. This information can help identify areas for improvement and ensure continuous process enhancement.
Focusing on Financial Stability
While addressing these key areas for operational success, dealerships must also look for ways to enhance their financial stability and growth as a form of financial insurance and independence to ensure long-term viability and security.
When considering wealth-building programs, dealership principals should thoroughly analyze their current F&I product offerings and market demand. This assessment will help determine the potential benefits and challenges they will face when transitioning into a new program, such as a reinsurance structure, dealer-owned warranty program or hybrid solution. Dealers should work with a trusted wealthbuilding program administrator to create a comprehensive plan that outlines the program’s structure, goals and operational processes. This plan should include strategies
ensure a smooth handoff to the F&I team.
IT’S TIME TO NOMINATE THE BEST OF THE BEST
Please take a moment to consider a nomination for the 2025 MidAtlantic IADA Dealer of the Year and send it in today!
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.
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
for marketing products, managing claims and ensuring compliance with applicable regulations. These experts can provide valuable insights and support throughout the process.
Once a program type is decided upon, dealers, their administrative partners and agents can ensure that employees are well-trained on the F&I program offerings and processes.
Dealers should also regularly consult with their administrator and agent to review the program’s performance and make necessary adjustments to optimize its effectiveness and profitability. Ongoing evaluation will help ensure the program continues to meet
the needs of both the dealership and its customers.
The automotive industry is clearly navigating a complex landscape of challenges – both cyber-related and operational. For retailers, proactively addressing these challenges is crucial to maintain customer trust and operational integrity. Simultaneously, dealers must explore wealth-building opportunities to enhance their financial stability and growth. By adopting a comprehensive approach to operational success, leveraging innovative business strategies and a strong wealth-building partner, dealers can safeguard their future and thrive in today’s changing industry. n
TEAM
Pennsylvania AG Sues Out-of-State Dealer
BY USED CAR NEWS
Pennsylvania Attorney General Michelle Henry announced the filing of a lawsuit against New Jersey business, Segtaf Automobile, LLC, and its owner, Taofeek Oyekangun, for the alleged unlicensed sale of used automobiles in Pennsylvania.
In addition to the allegedly unlicensed sales, the lawsuit alleges that Oyekangun sold unroadworthy vehicles to Pennsylvania consumers while making conflicting statements regarding the “as is” status of some of the vehicles — in violation of the Pennsylvania Auto Regulations and the Unfair Trade Practices and Consumer Protection Law.
“This is every used car buyer’s worst fear –paying hard-earned money and realizing soon after that the vehicle is in poor condition,” Attorney General Henry said. “My office has a duty to uphold state law and regulations that prohibit deceptive car dealers from swindling consumers in this fashion, and we will do everything in our power to uphold that duty. Consumers deserve nothing less.”
The lawsuit also alleges that Oyekangun has used a multitude of aliases and unregistered fictitious names when selling used vehicles in Pennsylvania. For instance, Segtaf Automobile, through Oyekangun, has also conducted business under the unregistered fictitious names: “Mimi’s Used Cars & Foreign Cars,” “Segtaf Auto Sales,” and “Segtaf Segtaf.” Additionally, when selling used motor vehicles, Oyekangun has further used multiple aliases including: “Seun Wosho,” “Ayomilekan Ogike,” “Scott Weber,” and “Ayinke Ogunsola.” n
FALL LEGISLATIVE SESSION PREVIEW
BY ERIK ROSS, SENIOR ASSOCIATE, MILLIRON & GOODMAN GOVERNMENT RELATIONS
The Pennsylvania General Assembly returns to voting session in mid- to late September in a quick sprint to complete this two-year session prior to the election. As you may know, the two-year session of the General Assembly ends on November 30, 2024. All bills that are not sent to the Governor by the deadline die and will need to be reintroduced next year when the General Assembly reconvenes for a new two-year session.
This Fall, the House’s legislative session calendar was pushed to the end of September/beginning of October due to two special elections slated for September 17, 2024, to fill the vacant state House Legislative Districts in Philadelphia due to resignations in July. The vacancies in the House put the Democrats at 100 seats to the Republicans 101 seats in the 203-seat chamber. The vacant seats are considered safe Democrat districts, but the election results will need to be certified, and the winners sworn into office prior to the return to voting session so the House Democrats maintain their majority status. The following are the revised House and Senate’s Fall session days as currently scheduled:
HOUSE FALL VOTING SCHEDULE
• September 30
• October 1, 2, 7, 8, 9, 21, 22, 23
• November 11, 12, 13 (Reserved for internal cause leadership elections)
SENATE FALL VOTING SCHEDULE
• September 16, 17, 18, 30
• October 1, 2, 7, 8, 9, 21, 22, 23
• November 13, 14 (Reserved for internal cause leadership elections)
With only nine voting days scheduled in the House and twelve in the Senate, assuming days additional days are not canceled, the General Assembly will need to focus on what must get done. The following is a summary of some of the issues that we have outstanding:
MODIFYING MANAGEMENT OF ABANDONED VEHICLES AT AUCTION
Senate Bill 11291 (Flynn-D) amends Title 75 (Vehicles), authorizing a wholesale vehicle auction, or salvor, to begin the process to remove vehicles that have been abandoned at the wholesale auction without the wholesale auction’s consent. It would also authorize the wholesale auction to charge and collect storage fees as well as the releasing or recovering costs of the abandoned vehicle.
• Status: Passed Senate, 50-0, 7/2/2024 –In House Judiciary, 7/3/2024
Licensed wholesale vehicle auctions are a special class of private property owner. They oversee thousands of dealershipowned vehicles every week that are bought and sold by licensed vehicle dealers to other vehicle dealers at the wholesale auction.
Vehicles are often abandoned by auto dealers; even vehicles valued at $20,000 or more. In some cases, it is because they
simply go out of business. In other cases, they place a vehicle at auction for sale with no success. More often, they purchase them at auction and then do not transport them to their dealerships by the deadline. While current law has a process to address abandoned vehicles that are usually then salvaged, it does not provide a way to address vehicles abandoned at wholesale auctions.
Specifically, the proposed legislation requires the wholesale vehicle auction to file a report, outlined in existing law at § 7311.1 (a), with the local police department declaring that an unauthorized vehicle has been left unattended on private property for a period exceeding three business days. If the wholesale vehicle auction elects to file such a report, it may remove, sell, or legally obtain the ownership and title of a vehicle that is declared an abandoned vehicle by PennDOT. The following shall apply:
• A wholesale vehicle auction that intends to sell or legally obtain ownership of an abandoned vehicle shall indicate that intention on the report filed.
• If the abandoned vehicle is unclaimed, the wholesale vehicle auction may apply
for a certificate of title to PennDOT.
• If PennDOT determines that a new certificate of title should be issued, an abandoned branded title shall be issued to the wholesale vehicle auction.
• After the abandoned vehicle branded title is issued, the vehicle shall be offered for sale at auction by the wholesale vehicle auction. Notice shall be provided to prospective buyers that the title has been branded as a formerly abandoned vehicle.
The wholesale vehicle auction shall be reimbursed for all applicable costs related to the storage and processing of the vehicle from the proceeds of the sale of the vehicle. The remaining proceeds of the sale shall be paid to PennDOT and transmitted to the State Treasurer for deposit in the Motor License Fund.
In addition, if the wholesale vehicle auction does not intend to sell or legally obtain ownership of an abandoned vehicle, existing law at § 7311.1 (c) (Salvors) provides that an abandoned vehicle can be towed to a salvor’s property and the salvor may elect to file a report with the local police department.
Again, when the abandoned vehicle has been transferred to a salvor and the vehicle is subsequently sold at auction, the legislation provides that:
• The salvor shall recover the appropriate costs of towing and storage.
• The wholesale vehicle auction shall be reimbursed for the cost of storing, providing notice, obtaining title, and processing related to the vehicle when the additional funds are available because of the salvor’s auction.
• The remaining proceeds of the sale shall be paid to PennDOT and transmitted to the state Treasurer for deposit in the Motor License Fund.
In this way, economic waste is avoided, and it encourages the dealers not to abandon their vehicles at the wholesale vehicle auction. In addition, licensed auctions 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 and can potentially combat the cash for clunkers type of waste from older vehicles in which are most abandoned vehicles.
The bill, as originally drafted, will establish a streamlined process for transferring vehicles between automobile insurers and vehicle recycling companies. Further, this legislation would be limited only to vehicles for which an insurer has made a total loss payment to the vehicle’s titleholder and only for vehicles destined for recycling. These vehicles will not be returned to the road.
REQUIREMENTS FOR SALE OF SCRAP MATERIALS/STOPPING CATALYTIC CONVERTER ROBBERIES
House Bill 7912 (Isaacson-D) amends the Scrap Material Theft Prevention Act (Act 113 of 2008) to place additional requirements on scrap processors and recycling facility operators who purchase catalytic converters or scrap material that bears a name or mark under Title 54 Chapter 15 (reusable marked articles and receptacles).
• Status: Passed House, 119-84, 6/28/2023
– In Senate Consumer Protection & Professional Licensure, 7/17/2023
Section 3(a) is amended to add the requirement that scrap processors and recycling facility operators collect identification information if the scrap material bears a name or mark. The legislation imposes a new penalty for a scrap processor or recycling facility that fails to collect the required information in Section 3 (e).
An individual who violates this section would be guilty of a misdemeanor of the third degree. The amendment sets the minimum fine for a conviction at $5,000. A misdemeanor of the third degree is punishable by imprisonment not to exceed 1 year.
The legislation adds sections 3 (a.1) and 3 (c.1) which require that recycling facilities
collect additional information and comply with a holding period for transactions that include a catalytic converter.
The legislation further adds section 7 (c) which makes it an offense for a person that is not affiliated with a commercial account to, without proper justification, intentionally possess a detached catalytic converter. This offense is a misdemeanor of the third degree and is punishable by up to one year in jail or a fine of up to $2,500.
This legislation would take effect in 60 days upon enactment.
EXPEDITING JUNK TITLING FOR ABANDONED VEHICLES
House Bill 22513 (Neilson-D) amends Title 75 (Vehicles), in abandoned vehicles and cargos, further providing for notice to owner and lienholders of abandoned vehicles, for authorization for disposal of unclaimed vehicles and for processing of nonrepairable or salvage vehicles.
Adds language throughout the act to give the department 10 days to review the process around the issuance of junk titles and require the approval or denial of an application within 10 days. Effective in 60 days.
Please be assured that we will keep you apprised of these issues as they move through the legislative process. With a little luck, let us hope these issues get addressed before the end of the session. n
“Auto Master Systems knows Buy-Here, Pay-Here. If you want success, run your business with AMS!”
- Lawrence Meade, Easton Motors
Auto Master Systems, Inc. has been providing DMS solutions for the Buy-Here, Pay-Here auto finance market for over three decades. The flexible design and comprehensive features of AMS supports all business models including stand-alone dealerships, direct & indirect lenders, and related finance companies.
Dealer Services
Blending innovation and technology, DriveSmart offers F&I Products with a broad range of eligibility and competitive pricing. Allowing our dealers the best opportunity to drive sales and success. We are growing at an accelerated speed, and want you to be a part of our growth.
Turn Missed Sales into Revenue with DriveSmarts Lost Opportunity Program
The definitive solution to recapture the missed Vehicle Service Contract sales at Dealerships, turning overlooked opportunities into significant revenue and fostering lasting customer loyalty. We ensure no potential sale slips through the cracks.
u Pen and paper can be a dealer’s friend when hit with cyberattacks.
Dealers: Plan Now for a Cybersecurity Attack Experts
discuss recent incidents and how dealers can protect their businesses.
BY ALYSHA WEBB
As the CDK outage continues to roil the dealership world, dealers should look ahead and plan for the next cybersecurity attack. And that planning should be actually written down, as in a book with paper pages
“This is a huge wake-up call for everyone in our industry,” dealership consultant Todd Caputo says during a recent live stream panel hosted by ASOTU (Automotive State of the Union community). “You have to have a playbook or manual to open up when something like this occurs.”
That means more than having a file with the plan. Experts recommend an actual book.
“You have to have it printed out,” Cliff Steinhauer, director of information security and engagement at the National Cybersecurity Alliance, tells WardsAuto.
The nonprofit Alliance advocates for the safe use of technology and educates on protection from cybercrime.
BACK TO BASICS
The immediate response to an outage was, and will usually be, a return to pen and paper. That can be beneficial, Caputo says. Many younger dealership employees have never had to learn the details of how parts get ordered, how technicians get paid or
how the information on a sale is submitted, he says. Doing it by hand, “you learn how a deal actually works,” he says.
But the pen and paper method has limitations.
Leaders at Nissan of Bowie in Maryland started using pen and paper when the Dealer Management System (DMS) went down, says dealership owner and ASOTU panelist Damon Lester. “We have gone old school,” he says.
But trying to capture all the necessary data by hand, especially in the parts and service department, is difficult, Lester says. Figuring out the hours for the technicians and service advisors will be a challenge, he says.
And, he adds, all the data will need to be keyed into the computer when the system is back up.
DEALER ORGANIZATIONS AND VENDORS TO THE RESCUE
The National Assn. of Minority Automobile Dealers (NAMAD) has suggestions for dealing with this outage and preparing for the next, says Lester, a past president and current board member of the organization.
It sent members an email with steps to take, including updating a dealership’s website to include asking customers to call or chat instead of submitting online leads and to submit forms by sending them to the internet manager’s email address.
NAMAD also suggests getting legal advice about responsibilities if personal information is compromised and consulting with insurance companies about coverage. Consider if the insurance covers a third-party vendor event, coverage for customer claims against a dealership due to the event, and whether your general business interruption policy covers it, NAMAD recommends.
“Dealerships also need to figure out ramifications from lost business,” Lester adds.
When a dealership’s DMS is functional again, accounting firm Withum recommends dealers employ an overall reconnaissance before returning to business as usual. All departments should help the accounting office gather information collected during downtime and ensure it is accurately entered, Withum says.
Dealerships also need to ensure all templates are correct, that sales tax calculations are correct, and closing balances on May 31 and June 1 are free of discrepancies.
“Do not assume that this breach only impacted data collected when CDK was down,” Withum says.
‘CHANGE HEALTHCARE’ MOMENT
Steinhauer calls the CDK attack the ‘Change Healthcare’ moment for the auto industry.”
In February 2024, Change Healthcare’s nationwide health care billing and information systems were frozen, and cybercriminals demanded a ransom to unlock them. Change processes account for about half of all U.S. health care claims.
The DMS world is similarly concentrated. CDK, Reynolds & Reynolds and Dealertrack together provide services to around 80% of all dealerships. CDK is used by some 15,000 dealers.
So, like the health care system, when a dealer management system has a problem, “a lot of people have a problem,” Steinhauer says.
Dealerships and the health care profession collect a wealth of personal information, so data privacy concerns are magnified by the consolidation of services under just a few providers, he says.
Steinhauer recommends a dealership prepare for future outages by first doing an inventory of all the software it uses and who can access what data at what time. Focus on “the right users accessing the right data at the right time,” he says.
Strong passwords, multifactor
authentication
and training staff on cybersecurity, especially phishing, is key, as is keeping good backups of data.
All dealerships should have a business continuity plan detailing how to continue to operate when cybersecurity or other threats occur. That can start with writing information down, he says.
“The businesses (with) older staff are probably faring better because they remember the pen and paper days,” Steinhauer says.
Other aspects of the plan can include having an emergency laptop and free accounting software, using Google spreadsheets or submitting forms through an alternative website.
“You have to brainstorm,” Steinhauer says. “(Think), how would this work if we didn’t have this system?” n
Based in Los Angeles, Alysha Webb has written about myriad aspects of the automotive industry for more than two decades, including automotive retail, manufacturing, suppliers, and electric vehicles. She began her automotive journalism career in China and wrote reports for Wards Intelligence on China's electric vehicle future and China's autonomous vehicle future.
