february 2014 feature story on page 8 high-wire · pdf file6 sw centerpoint dr #100 lake...

INSIDE• OVERWHELMED WITH SOCIAL MEDIA?• KAMAN AUCTIONS RAISES FUNDS FOR BOYS & GIRLS CLUB• HOW TO BECOME INDEPENDENTLY HEALTHY

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079



V I S I T U S A T W W W . O I A D A . C O M





DEALER NEWSR E P R E S E N T I N G A L L A U T O , T R U C K , T R A I L E R , R V A N D P O W E R S P O R T D E A L E R S O F O R E G O N

FEBRUARY 2014 magazine

OIADA provides dealer education credits for reading

this magazine! Easy to follow, easy to learn, easy to

comply...

The High-Wire ActBuy Here-Pay Here Dealers Walk the Line, Balancing the Risks and Challenges of Lending to Deep Subprime Customers With the Rewards of Helping Those Who Need It Most

FEATURE STORY ON PAGE 8

OR_0214.indd 1 1/20/14 3:34 PM

OR_0214.indd 2 1/20/14 3:34 PM

OR_0214.indd 3 1/20/14 3:34 PM

O I A D A D E A L E R N E W S FEBRUARY 2014

4

w w w . o i a d a . c o m

OIADA President Appointed to Advisory Committee

PresidentDan Nicholson, CMDCentral Oregon Motors1123 N 6th StreetRedmond, OR [email protected]

Executive Vice PresidentBryan StewardAAA Oregon AutoSource6 SW Centerpoint Dr #100Lake Oswego, OR [email protected]

1st Vice PresidentEric Freeman, CMD7524 SW Macadam AvePortland, OR [email protected]

TreasurerTommy Wilson Jr., CMDTommy Wilson Motors9215 SW Canyon RdPortland, OR [email protected]

SecretaryTodd Staver, CMDWest Coast Auto Enthusiast3219 NW Guam StPortland, OR [email protected]

Chairman of the BoardGary SargentSargent’s Motorsports10207 SE Foster RdPortland, OR [email protected]

Inside06 Kaman Auctions Raises Funds08 I Am Independent12 Washington Update14 How to Become Independently Healthy18 Overwhelmed with Social Media?

What’s Newu Stay Strong as an IndependentNIADA CAN HELP

You work hard to make your business successful. Let NIADA help you stay strong as an independent automotive dealer. Take advantage of everything NIADA has to offer, such as dealer compliance training, Certified Master Dealer training, 20 Group and the many other dealer benefits, including auto, home and health insurance. Learn more at NIADA.com.

Advertisers Index Ally .................................................................................9Black Book..................................................................5Brasher’s Northwest AA......... Inside Back CoverBrasher’s Portland AA ........................ Back CoverDAA Northwest / Seattle ........Inside Front CoverLobel Financial ..........................................................3Manheim.com ...........................................................7Manheim Pennsylvania .......................................17NextGear Capital ....................................................11United Acceptance ................................................15VAuto .........................................................................13

Continuing EducationWatch for more information on the number of hours required to renew your dealer license. Along with the change in number of hours, each dealer will be required to take and submit a test, 10 questions for every hour of Continuing Education. This will be in effect after January 1.

NIADA HeadquartersNational Independent Automobile Dealers Associationwww.niada.com • www.niada.tv2521 Brown Blvd. • Arlington, TX 76006-5203 phone (817) 640-3838

For advertising information contact: Troy Graff (800) 682-3837 or [email protected].

OIADA Dealer News is published 8 times per year by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203; phone 817-640-3838. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 6006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of OIADA Insider or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of NIADA , does not constitute an endorsement of the products or services featured. Copyright © 2013 by NIADA Services, Inc.

State Magazine MGR./Sales Troy Graff • [email protected]

Editors Andy Friedlander • [email protected] Timmerman • [email protected]

Magazine Layout & Graphic ArtistChantae Arrington • [email protected]

Art Director Christy Haynes • [email protected]

Printing Nieman Printing

OIADA president Dan Nicholson of Central Oregon Motors was recently appointed to the Oregon Dealers Advisory Committee. Dan’s appointment is for a three-year commitment January 1, 2014, through December 31, 2016.

Dan will join 13 other committee members representing the areas of used auto, towing, auctions, insurance, dismantler, power sports, general

consumer, recreational and new car. Also at the ODAC’s quarterly meetings are representatives from DOJ and several area departments of DMV, such as business regulations, business license, investigations, program services and representatives from ODOT.

Congratulations, Dan, and thank you for your time and commitment in supporting all Oregon dealers.

u A S S O C I AT I O N C O N G R AT U L AT E S DA N N I C H O L S O N

A S S O C I A T I O N N E W S

Executive CommitteeOIADA OfficeOregon Independent Auto Dealers Association, 1475 Capitol St. NE Salem, OR 97301800-447-0302

The Car-PortDon Clark1062 Court St.Medford, OR 97501541-779-6232

Merlin Motor WerxRon Horban170 Ort Ln.Merlin, OR 97532541-476-1315

Auto Resource GroupJonathan Walk22728 S. Landon LaneEstacada, OR 97023503-747-9889

AJ Services Inc.Aaron Jarvis16630 SW Shaw St. Suite MBeaverton, OR 97007503-367-2872

D. C. MotorsDave Cooley1040 River Rd.Eugene, OR 97404541-912-6203

I Drive Autohaus, Ltd.Sami Barbar2810 NE BroadwayPortland, OR 97232503-287-4324

Curtis Miller Auto SalesCurtis MillerPO Box 858Scappoose, OR 97056503-680-7446

Affordable Auto Rental SalesCynde Morton608 S McLoughlin Blvd.Oregon City, OR 97045503-557-7778

CarMaxChris Updike12800 Tuckahoe Creek Pkwy.Richmond, VA 23238804-747-0422

Outland Motors William Mitchener1177 SE 9th St., Suite 103 Bend, OR 97701 541-782-8291

Show Room NewMike Barthe360-882-8162

JaniKingMorgan Thomas1500 Valley River Dr., STE #205Eugene, OR 97401

Northwest Auto Exchange/ JJs AutoJalal Naboulsi5720 SE 82nd Ave.Portland, OR 97266503-481-4845

Heartbeat City AutoRabdakk H. Ruzicka925 Maxwell Rd. Eugene, OR 97404541-554-7756

Sunrise Auto Sales, LLCAlin Navidi16320 SE Division Portland, OR 97323503-358-2127

Christensen Auto Sales, IncGary Christensen3080 NE 99 WMcMinnville, OR 97128541-992-4095

Welcome New Members to OIADA

OR_0214.indd 4 1/21/14 2:41 PM

FEBRUARY 2014 O I A D A D E A L E R N E W Sw w w . o i a d a . c o m

5

OIADA OfficeOregon Independent Auto Dealers Association, 1475 Capitol St. NE Salem, OR 97301800-447-0302

OR_0214.indd 5 1/20/14 3:34 PM


6


u C R A I G N I C H O L S S H E D S L I G H T A T R E C E N T S E M I N A R

If you have been in business for any length of time, you have likely had the unfortunate experience of talking to a customer’s attorney or being threatened with legal action if you don’t comply.

What do you do? That was one of the questions asked of Craig Nichols, who spoke at OIADA’s last “driven to learn” seminar in Portland. Nichols is one of the leading attorneys in the state of Oregon specializing in car law. The air may have been a little chilly at West Coast Auto Enthusiast’s warehouse, but Craig kept the 40 dealers in attendance on the edge of their seats with his case examples and changes in law.

One of the subjects Craig covered was federal law vs. state law. If any of you think that “AS IS” is your get out of jail free card, think again. The buyer’s guide is a federal regulation and form, but state laws trump federal law. Oregon’s statute on merchant trade states that a merchant (dealer) must disclose any known or should have known major defect.

Unfortunately, it is up to a jury or judge to decide what is a major defect and what you should have known as a professional. That’s right, folks, as soon as you get that dealer’s license you are considered an expert. It does not matter whether you have been in business 10 days or 10 years.

So, what do you do to protect yourself? Craig Nichols has written a book entitled “Car Law.” This book is a must and should be sitting on every dealer’s bookshelf. At the seminar, Craig handed out a condensed version of this book highlighting the major points and laws that affect us as dealers. If you would like to purchase his book or get a copy of the handout, contact Diane at the OIADA office.

Here at OIADA, we have been working hard to find unique education for our dealers. Up to this point we have only had these seminars in Portland. We have not forgotten about our valued members throughout the rest of the state.

Diane, our executive director, is currently working with a nonprofit that provides business planning to small businesses throughout the state. This company has agreed to put on seminars for our members statewide. Watch for emails or website updates for dates and times of these seminars that will be in a town near you.

BY DAN NICHOLSON OIADA PRESIDENT

F R O M T H E P R E S I D E N T

u W O M E N - O W N E D B U S I N E S S S U P P O R T S L O C A L Y O U T H O R G A N I Z A T I O N

KAMAN AUCTIONS RAISES FUNDS FOR EDMONDS BOYS & GIRLS CLUB

A U C T I O N N E W S

Kaman Auctions, a wholesale auto auction business owned and operated by two local sisters, helped raise $3,600 to benefit the Edmonds Boys & Girls Club. In celebration of Kaman Auctions’ one year anniversary, Lynn Kamacho and sister Marci Norman decided to give back to the community that has supported their business since its inception and has helped the two sisters build a growing business.

On November 14, the auction partnered with local businesses to host a live charity auction to raise awareness and money to benefit the children who participate in the Edmonds Boys & Girls Club programs.

Lynn and her husband, Greg, raised two boys now in college who both benefited from many years of participation with the Edmonds Boys & Girls Club. Lynn was pleased and honored to assist the organization with its mission “to enable all young people, especially those who need us most, to reach their full potential as productive, caring, responsible citizens.”

Auctioneer Tom Pasma built fantastic energy amongst the many car dealers, local businesspeople, family and friends

attending the auction. He maintained a fun, interactive and engaging environment that encouraged bidding on the many products and services generously donated for this special event.

“The charity auction was a huge success due to the generous support of our donors who provided all the fabulous items for this event,” said Lynn. Marci added, “We were blessed by the outpouring of generosity from our customers and the local business community that helped raise $3,600 for the Edmonds Boys & Girls Club scholarship programs.”

Over 20 local businesses, retailers and area car dealerships donated items for the auction. Items included an evening getaway to the Tulalip Resort Casino from Credit Concepts Inc., one night at Hood River Lodge with white water rafting in Oregon from Shepard & Shepard Insurance, a Mercedes-Benz child’s pedal car from Mercedes-Benz of Lynnwood, a Cadillac Callaway golf bag from Doug’s Northwest Cadillac, an autographed basketball from Seattle icon Nate McMillan and numerous gift certificates from other local businesses.

u Top Left: Auctioneer Tom Pasma builds energy for donated items.

u Over 20 local businesses, retailers and area car dealerships donated items.

u Top Right: Owners Lynn Kamacho and Marci Norman.

KAMAN AUCTIONS

Car Law: What Do You Know?

OR_0214.indd 6 1/20/14 3:34 PM

OR_0214.indd 7 1/20/14 3:34 PM

O I A D A D E A L E R N E W S FEBRUARY 2014 w w w . o i a d a . c o m

8

In the world of the independent car dealer, Buy Here-Pay Here (BHPH) dealers are truly a unique breed.

Yes, they sell used cars, but they also provide financing to those who otherwise might not qualify. They help people establish credit, improve credit scores, get and keep a job and be productive members of society.

Sometimes the dealers even end up becoming financial counselors, life coaches and, often, lifelong friends of their customers.

A BHPH dealer primarily sells cars to subprime customers and handles the financing in-house. The terms require customers to return to the dealership at predetermined increments (often weekly or monthly) to make payments.

The dealers generally sell older, higher-mileage cars and often make repairs as needed to keep the car operational and help keep the customer current on payments.

“The Buy Here-Pay Here dealership is one of the most important types of transactions in this country for those who couldn’t otherwise get credit and be able to buy a car,” said Ken Shilson, founder of the National Alliance of Buy Here-Pay Here Dealers. “These dealers allow them to get a car to let them get to and from work. If it breaks down, it gets repaired to keep them moving and keep paying.

“We provide a solution for difficult financing situations and keep the car on the road during the life of the contract.”

BHPH dealerships are the most rapidly growing segment of

the independent car business – and they can be very profitable, Shilson said.

That profit potential is what attracted Ingram Walters to the business. Although his wife’s family were third-generation franchise dealers, “I got intrigued by the Buy Here-Pay Here dealerships,” he said. “I just fell in love with the margins. Instead of financing a car for five years, we could do it for 12 months or 18 months and then have them come back and sell them another one.”

BHPH Challenges Though the profit potential is

great, because of the in-house financing, the BHPH business is certainly not for everybody. And it certainly isn’t easy.

For starters, just getting into the BHPH business requires a lot of resources – particularly capital.

“It requires the dealer to have several million dollars of his own money or available lines of credit to compete in this business today,” Shilson said, “even on a small scale.”

“It is cash-intensive,” agreed Paul Claborn, owner of WholesaleCars.com in Albertville, Ala., and NIADA’s National Quality Dealer for 2010. “A lot of people think they can get in for $300,000 to $400,000, but to do it right you have to have at least $2 million.”

Not to mention the fact that Buy Here-Pay Here dealers aren’t only in the car sales business. They’re also – and many of them would tell you primarily – in the finance business, an entirely different realm that brings a whole

u B U Y H E R E - P A Y H E R E D E A L E R S W A L K T H E L I N E , B A L A N C I N G T H E R I S K S A N D C H A L L E N G E S O F L E N D I N G T O D E E P S U B P R I M E C U S T O M E R S W I T H T H E R E W A R D S O F H E L P I N G T H O S E W H O N E E D I T M O S T

The High-Wire

Act

additional set of issues and concerns into play.

“Underwriting and collections are and always will be big challenges in this business,” said Scott Allen, owner of Auto Land in Haltom City, Texas, the 2011 NQD winner. “With the economy always changing, it can be like a moving target. You have to really stay on top of it.”

Indeed, for strictly retail car dealers, the sale usually marks the end of a transaction. For BHPH dealers, that’s only the beginning.

“In retail car sales, you don’t have to worry about a collection system,” Shilson said. “In Buy Here-Pay Here, dealers have to think about selling and collecting. It is an added dimension to the business and requires added software and systems in place to do this correctly.”

Inventory also is a growing challenge for BHPH dealers, who over the past several years have found themselves getting less and less car for their money at auction. While they are often paying the same prices to fill their lots, the cars available to them now have more years and more miles on them than ever before.

Shilson said that can make for a difficult situation because dealers today must do more reconditioning work to get their cars ready for market and clearly must make adjustments to keep the vehicles running throughout the life of the contract.

Allen said he has had to pay closer attention to the cars he buys at auction to make sure he will not have to spend too much fixing them up for sale.

“We have had to raise our parameters when it comes to mileage,” he said. “It used to be we wouldn’t buy a car with more than 125,000 miles. Now we

regularly buy vehicles with more than 200,000 miles.

“With the increased miles on these cars, something is going to have to be fixed. I have definitely had to spend more on reconditioning and some of the cars I get now are not quite as edgy as they were in the past. But we can still get good quality cars.”

Even with quality reconditioning, the higher mileage cars still bring a risk of issues occurring after the sale. Breakdowns usually mean customers cannot get to work and cannot make their payments on time, which makes them the dealer’s problem, too.

“It’s a mixture of affordability and liability,” Claborn said. “Once we buy a vehicle at auction, the operations manager checks it out to determine if the cost of repairs is too great for resale. We have to keep repair costs down to keep it in the price range we know our customers can afford but make sure the vehicle is safe and usable. We also offer a drive-train warranty to make sure they can keep driving it and keep making their payments.”

Public perception is another issue BHPH dealers are constantly battling. That perception is often perpetuated by the media – for example, the inflammatory series on the Buy Here-Pay Here industry published in the Los Angeles Times in 2011 that spawned several bills seeking to impose rigid new regulations on BHPH dealers.

Even Claborn, who worked in the wholesale auto business before opening his BHPH dealership, had a bad initial impression.

“I had friends in the [BHPH] business and I thought about it,

C O N T I N U E D O N PAG E 10

SE

GM

EN

T S

PO

TL

IGH

T

OR_0214.indd 8 1/20/14 3:35 PM

C O N T I N U E D O N PAG E 10

OR_0214.indd 9 1/20/14 3:35 PM


10


According to Consumer Reports magazine, the popular hybrid Toyota Prius is considered the best overall value among all models out there. At the other end of the spectrum is the Nissan Armada, a giant SUV.

For Prius, it’s a second straight win on the CR best-value list, having unseated the Honda Fit from the title it held for four straight years. The magazine lauds it as having the right combination of performance, reliability and low estimated five-year ownership costs at 47 cents per mile.

“Prius’ 44 (miles per gallon) overall is the best fuel economy of any non-plug-in car that Consumer Reports has tested,” said Consumer Reports automotive editor Rik Paul. “Though it’s not particularly cheap to buy, the Prius’ depreciation is so low that it

costs less to own over the first five years than its initial (price). We call that a bargain.”

The consumer magazine says there is not a lot to love about Armada. It only gets 13 mpg overall, scored poorly in Consumer Reports‘ annual reliability survey and forces its owners to shell out $1.20 per mile to operate, according to CR’s analysis.

As for brands, Toyota and its luxury brand Lexus emerged the big winners. They had the top models in three of the 10 categories. Toyota Avalon Hybrid Limited scored highest among large cars and Lexus ES 300h was top luxury car.

Vehicles from Subaru and Mazda also did well overall.

The NIADA Foundation promotes the academic growth of youth across the United States through annual scholarships. The scholarships are awarded in June at the National Independent Automobile Dealers Association Convention.

The mission of NIADA Foundation is to “improve the used motor vehicle industry by informing consumers, educating dealers and training individuals and companies associated with the industry.” Since its inception in 2006, the scholarship program and other aspects of education have grown significantly.

Northwood University narrows the field of scholarship applicants down to four candidates representing each of NIADA’s four regions and also selects the national scholarship recipient. The decision is based on student achievement as well as leadership and community endeavors.

Regional scholarships go to

students who have displayed outstanding abilities in education. These students receive a $3500 scholarship to the college or university of their choice.

The eligibility requirements are as follows:

u Be classified as a high school senior during the current 2013-2014 school year and legally reside in one of the four NIADA regions.

u Have maintained an outstanding academic achievement record as reflected by an official high school transcript.

u Demonstrate an aptitude for college work as measured by SAT or ACT score.

Applications must be postmarked no later than March 15, 2014, and received no later than March 28, 2014. For more information, or to download the application, visit www.niadafoundation.org and click on the scholarship link.

AS

SO

CIA

TIO

N N

EW

S

u A P P L I C A T I O N S M U S T B E P O S T M A R K E D B Y M A R C H 1 5

Toyota on Top in Consumer Reports u P R I U S R A T E D B E S T O V E R A L L V A L U E

MA

RK

ET

W

AT

CH

A SECOND STRAIGHT WIN ON THE CR BEST-VALUE LIST

CO

NTI

NU

ED

FR

OM

PA

GE

8 but I stayed out for years thinking every customer would just be trying to not make payments or damage the collateral,” he said. “But that is just not the case. We’ve got some of the best customers I could ever hope to know. We provide a service, especially in smaller communities with no public transportation.

“We know they have so many options and we want our customers to come back and tell their friends about us. Repeat and referrals are 70 percent of our business, so doing things right is just good business.”

But even with all of those potential obstacles in their way, BHPH dealers agree that the biggest challenge they face today is the constantly changing regulations created by federal, state and local governments.

Those regulations affect the entire used vehicle industry, but because of the additional aspect of financing, BHPH dealers face an even greater burden. Claborn said a simple car sale now requires “a stack of 25 documents to sign.”

Still, as frustrating as the extra paperwork is, most dealers share the belief that doing business honestly and fairly satisfies the regulations and keeps dishonest dealers out of the business.

“You just make sure you are doing it the right way,” Walters said. “You don’t want to do things wrong because you can put the whole business in jeopardy.”

The best way to stay current on regulations and be assured business is being done correctly, Allen said, is by being active and involved in local and national associations. He even got involved with his local planning commission when a push to drive dealerships out of his community began.

“It can be a constant battle to stay aware and informed,” he said. “We have a strong state association here and we have to pay attention all the time to possible new regulations at all levels to make sure we are serving our customers.”

BHPH RewardsDespite all the challenges, BHPH

dealers say there are many more benefits to their jobs than they imagined.

“I love the independence,” Walters explained. “With other types of dealerships, you always have someone trying to tell you what to do, whether it is the manufacturer or the bank or the finance company. With this, it is up to me.”

Allen also appreciates the

loyal group of employees he has brought together to work at his dealership.

“We have been here a long time and are like family,” he said. “We are all here for the customer and we all appreciate being able to help customers improve their lives.”

And while the profit margins might have been what brought them into this business, the dealers say what keeps them in it – and makes it all worth it – is being able to really help their customers.

“There are a lot of really good people out there who have just had a bit of bad luck in their past,” Claborn said. “These are our customers. They have to have someone to help them prove themselves again, and that is what we can do.”

Allen said he often ends up helping people even after they are approved, to make sure they can make their payments and keep their car.

“These are people living paycheck to paycheck,” he said. “Any major or minor thing, whether it is a family member getting sick or whatever, can make them get behind. Dealers like us understand that and can move the note and give them time to catch back up. They just need the transportation.”

Claborn said he often discusses

his customers’ complete financial situation with them before approving a loan to make sure they are making a wise decision.

“The reality is, we are helping provide financial literacy,” he said. “When they come pay the car off, obviously we want to sell them another car, but we want it to work for them. I tell them to personally save that money they would have been using for a car payment and then come in and get a better car. It is often something they haven’t thought about and it is very gratifying to teach it to them.”

Being successful in the BHPH sector requires constant attention to detail, but to the dealers who can make it work, it is worth every bit of the effort they put into it.

“I have a Ph.D. in mistakes and know what works and doesn’t work,” Walters said. “It takes putting a good system in place and hard work. But it is worth it to help really quality people.”

BY LAURIE PONDER

Scholarship Deadline Approaching

OR_0214.indd 10 1/20/14 3:35 PM

MA

RK

ET

W

AT

CH

OR_0214.indd 11 1/20/14 3:35 PM


12


Here’s a rundown of some of the latest governmental issues and activity affecting the used car industry from NIADA regulatory counsel Shaun Petersen and Sante Esposito of Federal Advocates, NIADA’s lobbying firm.

LEGISLATIVE REPORTCommerce Committee

HearingOn Nov. 20, the Senate

Committee on Commerce, Science and Transportation held a hearing on “Soldiers as Consumers: Predatory and Unfair Business Practices Hurting the Military Community.”

Among the witnesses was Holly K. Petraeus, assistant director of the Consumer Financial Protection Bureau’s Office of Servicemember Affairs. In her statement and testimony, as well as the statements and testimonies of other witnesses, the automobile industry was cited as partakers of certain predatory practices regarding servicemembers.

Subsequent to the hearing, Federal Advocates was contacted by a committee staffer about submitting a “statement for the record” addressing the various good business practices of the association and its members pertaining to the military community.

The statement, which was submitted shortly after, noted NIADA’s Code of Ethics and detailed some of the association’s initiatives to assist military personnel with the car-buying process, such as a video titled “Car Buying Tips for Military Service Members” that is available for viewing on NIADA’s Automotive Consumer Television.

The statement also provided examples of NIADA dealers who have gone above and beyond, to use a military term, to aid servicemembers. Among them are a North Carolina dealer who offers a $500 discount to active military personnel, a California dealer who has stored and sold vehicles for servicemembers stationed overseas and a Texas dealer – and former 1st sergeant – who advises soldiers about

cars and the purchase process whether they buy from him or not.

S. 1584, Providing Replacement Automobiles for Certain Disabled Veterans and Members of the Armed Forces

A hearing on the bill, which was introduced Oct. 28 by Sen. Bernie Sanders (I-Vt.) with no cosponsors, was held by the Committee on Veterans Affairs on Oct. 30. The bill would increase the amount of government assistance from $18,900 to $30,000 for military members to acquire a replacement vehicle for vehicles destroyed in disasters, provided the eligible member does not receive property insurance compensation for the loss.

H.R. 2543, End Discriminatory State Taxes for Automobile Renters Act of 2013

The bill was introduced June 27 by Rep. Steve Cohen (D-Tenn.), with six cosponsors, and was referred to the Subcommittee on Regulatory Reform, Commercial and Antitrust Law of the Judiciary Committee. The bill would prohibit state and local governments from levying or collecting a discriminatory tax – one that does not apply to the majority of other rentals of tangible personal property – on the rental of motor vehicles, motor vehicle rental businesses, or motor vehicle rental property.

REGULATORY REPORTConsumer Financial

Protection BureauAlly settlement: The CFPB

and Department of Justice entered into an agreement with Ally Financial Inc. and Ally Bank to resolve allegations that 235,000 minority borrowers paid higher interest rates for their auto loans between April 2011 and December 2013 because of Ally’s discriminatory pricing system.

Ally purchased the installment contracts from dealers and allowed dealers to charge a higher interest rate than its established buy rate. Ally then compensated the dealer with all or some of the revenue from the dealer markup.

The CFPB and DOJ alleged Ally violated the Equal Credit Opportunity Act by charging African-American, Hispanic, Asian and Pacific Islander borrowers higher dealer markups for their auto loans than similarly situated white borrowers. The agencies believe discrimination resulted from the dealer markup and compensation policies and Ally’s failure to implement an effective compliance program to monitor its loan portfolio for discrimination.

Ally agreed to pay $80 million in damages to refund consumers and to hire a settlement administrator to distribute funds to victims. Ally also agreed to monitor dealer markups to prevent future discrimination or eliminate dealer markups altogether. Ally will implement a compliance program that will include dealer education, corrective action against dealers when there are dealer disparities, and portfolio-wide analysis of pricing data for disparities. Finally, Ally has agreed to pay a civil penalty of $18 million.

CFPB Arbitration Roundtable: The CFPB held a roundtable discussion related to pre-dispute arbitration clauses in consumer financial product contracts. In addition, the CFPB released some preliminary results from its study of arbitration agreements as required by passage of the Dodd-Frank Act.

The discussion focused on the CFPB’s findings that large banks

use arbitration agreements more often than community banks and credit unions, and the CFPB’s conclusion that few consumers actually filed arbitration agreements, particularly those with small claims. Also discussed was how fair arbitration clauses are to consumers, specifically those which contain class action waivers. The CFPB said future arbitration studies will include an attempt to examine the relative benefits of class action and arbitration.

The preliminary results of the study, which is subject to revision, is available at www.consumerfinance.gov/reports/.

Department of LaborOSHA proposes health care

adjustments: The proposed adjustments would provide employers and workers more options for their health care coverage while receiving the protections of the Affordable Care Act.

The proposal would count employee assistance programs such as short-term substance abuse counseling, financial counseling and legal services as excepted benefits if the benefits are free to employees and do not provide significant benefit in the nature of medical care. The proposal also exempts EAPs from the private insurance market reform. EAP coverage would not make individuals ineligible for a premium tax credit for qualified health plans through the Health Insurance Marketplace.

Federal Trade CommissionEnforcement of Risk-Based

Pricing Rule: The FTC and Time Warner Cable, Inc. agreed to settle allegations that Time Warner violated the Risk-Based Pricing Rule – the FTC’s first settlement against an entity alleging violations of the rule. The FTC alleged that Time Warner required consumers to pay a deposit or pre-pay the first month’s bill if there were negative annotations on the credit report, and Time Warner did not provide them with a risk-based pricing notice. Time Warner agreed to pay a $1.9 million civil penalty.

u K E E P I N G Y O U I N F O R M E D W I T H T H E L AT E S T G O V E R N M E N T A L I S S U E S A N D A C T I V I T Y A F F E C T I N G T H E U S E D C A R I N D U S T R Y

W A S H I N G T O N U P D A T E

NIADA Government Report

The CFPB held a roundtable discussion related to pre-dispute arbitration clauses in consumer financial product contracts.

OR_0214.indd 12 1/20/14 3:35 PM

OR_0214.indd 13 1/20/14 3:35 PM


14


There’s a story I like to tell about a young man of 20 who was lean and strong and had the heart of a lion, with dreams of becoming a lumberjack.

One day he applied for a career position with a very prestigious lumber company. The manager looked closely at the young man and questioned whether he had what it took to be successful. He wondered whether the young man could keep up with the much larger and more experienced lumberjacks.

Seeing the burning desire in the young man’s eyes the manager decided to trust his instincts and give him a chance to prove his worth. In offering the young man a trial run, he handed him a brand-new, shiny, ultra-sharp axe. With pride, the young man promised to be the best lumberjack in the camp.

True to his word, the young man day in and day out cut more timber in almost half the time of the other lumberjacks, even the most experienced lumberjack in the woods. This went on for weeks – one tree being felled after the other.

One day the manager began to notice the number of trees being felled by the young man was declining. He kept his eyes on the young man and saw he was working harder and harder and putting in longer and longer hours, yet the results became less and less.

Frustrated and a bit disappointed in the young man’s continued decline, he called the young man to his office to discuss his performance. Embarrassed and frustrated, the young man could not explain his decline in productivity. After all, he was working harder and harder and putting in more and more hours, frequently finding himself working alone in the woods long after the other lumberjacks had called it a day.

The manager listened sympathetically to the young man who desperately

tried to understand why his performance was dropping while his efforts were neverending. Finally, the manager said, “Do you remember the first day when you applied for the job, I handed you a brand-new, shiny and ultra-sharp axe? That was many weeks ago. Since that day, you worked tirelessly and

gave it all you had but the fact remains, not once in all that time did you take time to sharpen your axe.”

Does that story sound familiar?

Many independent auto dealers are just like the young man, working long hours and spending more and more time at the dealership without seeing much improvement in the bottom line (net profit).

As an independent auto dealer in an ever-changing and highly efficient marketplace, it is more important than ever to be independently healthy – that is, keeping up with or improving your financial and business skills. Today’s successful

and financially healthy dealer understands the importance of continuing his learning and education away from the dealership. In other words, taking the time required to sharpen his “knowledge axe.”

It’s not easy being an independent dealer, and often it’s easy to overlook the need to attend seminars and

conventions because there just aren’t enough hours in a day, or you can’t be away from your dealership for one or two days, or you feel the training and education is just cost-prohibitive at this time.

The fact is, it’s never a good time to leave your dealership, and great training and education is often not cheap. But what is the real cost to your bottom line when you don’t take the time to sharpen your axe?

If you could learn ways to improve your dealership’s bottom line by learning how to maximize your capital investment, getting the greatest return on your assets, turning your inventory faster,

increasing your effectiveness

in the marketplace, and truly making more overall net profit by learning how to earn more “super gross,” would you still be reluctant to take time out of your nearly impossible schedule to become a more effective entrepreneur?

Being an independent doesn’t mean you have to go it alone. Make the time (notice I didn’t say “take the time”) to sharpen your management as well as your financial skills.

You schedule a haircut, you schedule your pet’s vet appointment, you schedule your lawn service. So why not schedule time to learn how to become more independently and financially healthy?

Contact NIADA today – visit www.niada.com, call 1-800-682-3837 or email [email protected] – to see if an NIADA 20 group or Certified Master Dealer course is right for you.

BY JOE LESCOTAJOE LESCOTA IS DIRECTOR OF DEALER DEVELOPMENT FOR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION AND INSTRUCTOR FOR NIADA’S CERTIFIED MASTER DEALER PROGRAM. HE CAN BE REACHED AT [email protected].

u T A K E T I M E T O S H A R P E N Y O U R A X E

M A N A G E M E N T M A T T E R S

How to Become Independently Healthy

The fact is, it’s never a good time to leave your dealership, and great training and education is often not cheap. But what is the real cost to your bottom line when you don’t take the time to sharpen your axe?

OR_0214.indd 14 1/20/14 3:35 PM

FEBRUARY 2014 O I A D A D E A L E R N E W Sw w w . o i a d a . c o m

15

Read & Respond or Certify BelowHow to Become Independently HealthyWhat lesson is to be learned from the lumberjack story?______________________________________________

______________________________________________

______________________________________________

______________________________________________

______________________________________________

What does the article mean by “independently healthy”?a) Prosperous independent of outside help.b) Self-governing success.c) Keeping up with or improving your financial and business

skills.

What is a way you can sharpen your skills?

____________________________________________________

____________________________________________________

____________________________________________________

Overwhelmed with Social Media? What three tips does the article list to stay grounded regarding social media?

____________________________________________________

____________________________________________________

____________________________________________________

I certify to OIADA that I have personally read these articles in The Oregon Dealer News Magazine for February 2014.

My Name _________________________________________________

Dealership Name _________________________________________

Dealership # _______________________________________________

Dealer License Expiration Date:

(Month)__________________________ (Year)______________

Signed: ____________

Date_______________

OI

AD

A

CO

NT

IN

UI

NG

E

DU

CA

TI

ON

P

RO

GR

AM Complete this test and certify below that you have read the articles for February 2014

FAX TO: 503-364-7331 or mail to OIADA, 1475 Capitol St NE, Salem, Oregon 97301

OR_0214.indd 15 1/21/14 2:41 PM


16


OIADA Education Schedule

February

uTitle and Registration Classes • February 7, 2014, 9 a.m. • Host: Salem OIADA offices • February 21, 2014, 9 a.m. • Host: Portland/ Manheim

Auto Auction uPre-License Class • February 12, 2014, 8:30 a.m. • Host: Portland/ Manheim

Auto Auction

March

u Title and Registration Classes • March 7, 2014, 9 a.m. • Host: Salem OIADA offices • March 21, 2014, 9 a.m. • Host: Portland/ Manheim

Auto Auction u Pre-License Class • March 12, 2014, 8:30 a.m. • Host: Portland/ Manheim

Auto Auction

Regional Meetings

Salem, Eugene, Medford, Klamath Falls, Bend and Pendletonu Regional meetings TBA (February/March)

INSURANCE & BONDINGHecht & Hecht Insurance AgencyEvelyn Hecht503-288-6371

Shepard & Shepard Business SolutionsTodd Shepard509-396-0488 The Summit Group of OregonJohn Petrie503-581-2825 LEASINGOregon Roads, Inc.Joseph McKinney541-683-2277 SERVICE CONTRACTSA.U.L./D.P.C.Jim Bangert 360-834-3333

Automotive Business DevelopersShannon Meany541-944-9186

Auto Services CompanySusan Williams800-442-7116 Protective Life InsuranceDylan Doran818-836-1455 TRAININGOIADA/NIADA CertifiedPauline Sill503-362-6839

ADVERTISINGAffiliated Media LLCAaron Jarvis503-683-2574

Carsforsale.comAaron Oestretch605-306-3302 AutoTrader.comEd Merrick 503-747-9162

Carjohnny.comThomas Garza888-455-3000 Cars.comJames Lynch312-601-5052 The OregonianRich Fryback503-221-8486 UsedCars.com by DealixTamara Garris847-397-1700 AUTO SERVICES & ACCESSORIESAuto Marketing SpecialistGary Palaniuk503-519-7725

AUTO DETAILERShow Room NewMike BartheP O Box 822073Vancouver, WA 98682360-882-8162

Associate MembersNorthwest Auto AccessoriesCraig Lessard503-288-5700

SHOWROOM/BUSINESS JANITORIALJANIKINGMorgan Thomas1500 Valley River Dr., STE # 205Eugene, OR 97401503-535-9758

Show Room NewMike Barthe 360-882-8162

COMMERCIAL CLEANINGJaniKingMorgan Thomas541-868-8080

PRIVATE AUCTIONSBrasher’s Northwest Auto AuctionMark Melton541-689-3901

Brasher’s Portland Auto AuctionJerry Hinton503-492-9200 Crosspoint NW Dealer AuctionBrian Hardy503-594-2800 Manheim Portland Auto AuctionRay Priest503-286-3000 OUT-OF-STATE AUCTIONSAdesa Seattle Auto AuctionJason Arcaro

253-735-1600 x 213DAA NorthwestMitzi Vanvoorhis509-244-4500 Manheim Seattle Auto AuctionRay Priest206-762-1600 PUBLIC AUCTIONS & AUCTIONEERSCommercial Industrial AuctioneersRay Beal503-760-0499

Insurance Auto Auctions, Inc.Ryan Hall503-253-1500 Petersen Auction Group of OregonCurt Davis541-689-6824

Rick Leathers AuctioneersRick Leathers503-668-5326

Woodburn Auto AuctionSteve Morin503-981-8185 DEALER SOFTWAREFrazer ComputingMichael Frazer888-963-5369 FINANCINGCredit AcceptanceJohn Bragg360-980-2214 Credit ConceptsJason Moon541-342-8545

JP Morgan Chase Auto FinanceJeff DeGarmo503-201-4370

Lobel FinancialDavid Lobel714-816-1301 Nationwide InsuranceMark Tischer503-339-4165

Oregon Auto FinanceGary Veum541-868-0472 Oregon Community Credit UnionRich Black541-681-6311 Reliable Credit AssociationDavid Marx503-462-3022

Smartway Auto AdvisorsSheldon Harris503-795-7700

The Equitable Finance Co.Brandon Fox 503-808-7939 United FinanceTodd May503-238-6488 FLOORPLAN FINANCINGFloorplan XpressJosh Chandler503-621-9260 NextGearRobert Torbet503-358-3911

There is not another association that works harder than we do to provide its vendors with exposure, leads and other lucrative opportunities. Please review some of the following programs and areas that we help promote those businesses that support OIADA.

Marketing: Opportunity to give coupons to dealer members, included in all dealer packets. Ad space on inside pages all presentation folders sent throughout the year. Meal sponsorships available for Pre-License classes, Title & Registration classes.

Databases: Access to all OIADA membership databases for mailings. We require a review of the info that you will be sending to our members. Associates may have a list quarterly or 4 times a year. Each time you get a list you may use it only once for a mailing. Just send us an e-mail request for current database and we’ll be glad to send to you once we review your

marketing page. OIADA Magazine & Service Provider Listing: Your company and contact information will be listed in OIADA’s Dealer Service Provider Directory in our magazine that is distributed to around 2000 dealers every month of the year. We also have great rates for those companies interested in additional exposure in OIADA’s popular and well read “Oregon Dealer News”

Website Listing and Link: If your company has a website, we will add your company link to our company website as well as listed in Oregon Dealer News.

Regional Meetings (7) and Membership Drives: Many of OIADA’s Associate Members like to get involved in helping with OIADA’s regional meetings. Also our auction hosted membership drives. Those vendors who agree to participate get the benefit of meeting larger groups of dealers in one location while being able to

establish a relaxed relationship with future potential prospects. Special Speaking and Sponsorship Opportunities: OIADA is always having events going on where the environment is ideal for sponsors to participate. Some examples of this are regional meetings, golf tournaments, auction membership drives and of course our annual convention and trade show.

Developing Strategic Relationships: Network with other companies who associate themselves with our association. Either during our regional meetings, membership drives or board meetings.

Annual Convention and Trade Show: Participate in our once a year convention and trade show for maximum exposure and opportunities. Call for information on Reception, Tradeshow, Meal and Golf Tournament sponsor levels.

Associate Member Benefits

OR_0214.indd 16 1/21/14 2:41 PM

OR_0214.indd 17 1/20/14 3:35 PM


18


Social media isn’t new anymore, but there are plenty of dealerships that are not delivering a consistent message to their fans/followers. Chances are you’ve heard that social media marketing can enhance your business, but it’s hard to know which way to turn when you don’t know the destination.

I get it. I’ve sat in your chair. It’s that conspicuous sense of overwhelm that creeps into your head on a regular basis. Having nearly 30 years in automotive retail, I know that you can’t afford to be stuck. After leaving auto retail, I created my social media coaching/marketing business out of a mere thought. We’re in a time where we’re creating and defining our own success stories and there’s no instruction manual.There are a host of things that contribute to feeling overwhelmed with social marketing:u Lack of knowledge.

When we’re uninformed or misinformed, there’s a reluctance to move forward.

u Uncertainty about what to post.

u Confusion around how to interact with users.

u Skepticism (you or the boss) that social marketing is worth doing.

u Anxiety about spending time, effort and budget and having it fail.

The good news is that feeling overwhelmed by social media is temporary.

When you’re able to get out of your head for a bit, everything changes. Suddenly you see a way out. Shine a light on the fear and reduce the

apprehension and feelings of doom.

Whenever I have a client who’s stuck (usually because they’re overwhelmed), I guide them back with one or more of these three exercises. All of these can work for you too.1. Re-examine your content strategy.

Why you post on social media is as important as what you post. When you’re overwhelmed, it’s best to break the cycle by re-examining your “why.” Once

you’ve had a few minutes to delve into these questions, things will open up:u What are your core

values and beliefs?u What do you want

consumers to leave thinking about the company and its products?

u How much are you focused on building brand awareness in your marketing vs. product marketing?

u Why do customers choose your products over a competitor’s?

u What kinds of information do customers typically need to make their decisions about buying?

u What factors do they compare and weigh when deciding between yours and a competitor’s product?

2. Don’t try to be all things to all people.

The best brands know their customers inside and out. In the new Web, with Google’s Hummingbird update, it’s even more critical to know everything about your customer. When you can define in detail who your customer is – what their challenges are, what

passions they have and what stage of the buying process they’re in – you’ll be able to reach them more effectively.

If you’ve run out and grabbed a profile on every social network you can think of, you’re doing it wrong. It’s okay to test the different platforms, but focus on one first (usually Facebook). Get your content strategy in place and master that network. Then you can decide whether you want to move onto the others. Be where your customers are. If you know them inside and out, you’ll succeed at engaging them on the platforms where they spend their time.

3. Re-define your goals.To establish ROI (Return on

Investment) you must come to the table with objectives. Without goals you’ll have nothing to tie your results back to. I can’t tell you how many people have come up to me at conferences with questions about how not to fail at social media. I want to help you!

What do you plan on achieving with social media? Many people just focus on the number of likes and think that’s going to get them leads and sales. To the contrary, likes will not generate leads and sales. Posting engaging sharable content while simultaneously running micro-targeted Facebook ads is what gets you leads and sales.

Very often, I have a hard time locating dealership Facebook pages with solid results. Many dealers, GMs and salespeople don’t really know what social media success looks like. They only know they need to be there. Whenever we come to an endeavor with no plan, no real idea about what we expect from our efforts, feelings of overwhelm are bound to materialize. If you find yourself overwhelmed by social media, practice these three exercises I’ve shown you. Don’t let your head talk you out of something that’s valuable to your business.

BY KATHI KRUSEKATHI KRUSE IS AN AUTOMOTIVE SOCIAL MEDIA MARKETING EXPERT, BLOGGER, AUTHOR, SPEAKER AND FOUNDER OF KRUSE CONTROL INC. SHE IS ALSO THE AUTHOR OF “AUTOMOTIVE SOCIAL BUSINESS – HOW TO CAPTIVATE YOUR CUSTOMERS, SELL MORE CARS & BE GENERALLY REMARKABLE ON SOCIAL MEDIA.”

u S T A Y G R O U N D E D W I T H T H E S E T H R E E T I P S

OVERWHELMED with Social Media?

O N L I N E M A R K E T I N G

The good news is that feeling overwhelmed by social media is

temporary. When you’re able to get out of your head for a bit, everything changes.

Suddenly you see a way out. Shine a light on the fear and reduce the apprehension and feelings of doom.

OR_0214.indd 18 1/20/14 3:35 PM

OR_0214.indd 19 1/20/14 3:35 PM

OR_0214.indd 20 1/20/14 3:35 PM

february 2014 feature story on page 8 high-wire · pdf file6 sw centerpoint dr #100 lake...

Documents