west coast dealer dec 2012

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

I N D E P E N D E N T A U T O M O B I L E D E A L E R S A S S O C I A T I O N O F C A L I F O R N I A

WEST COAST DEALER

V i s i t u s a t w w w . i a d a c . o r g

DECEMBER 2012

• NEGATIVE SEO• CONVENTION COVERAGE• COMPLIANCE OVERDRIVE

inside

6 California’s BHPH Issue:

A Blueprint for Legislative Success

CA_1212.indd 1 11/16/12 3:07 PM

CA_1212.indd 2 11/16/12 3:07 PM

DECEMBER 2012 T H E W E S T C O A S T D E A L E R

3

w w w . i a d a c . o r g

A new law will require Buy Here-Pay Here dealers to post the functional equivalent of an MSRP sticker on their used vehicles starting Jan. 1. The sticker is supposed to disclose the vehicle’s “reasonable market value” (RMV) as determined by reference to a “nationally recognized pricing guide.”

Defining a BHPH DealerFor a dealer to determine whether the new

law governs his business, the dealer must determine whether he meets the statutory definition of a BHPH dealer. AB 1534 defines a BHPH dealer as a dealer who enters into conditional sales contracts and assigns less than 90 percent of the conditional sales contracts, not including those that are paid in full within 30 days, to unaffiliated third-party lenders within 45 days.

The law excludes from the definition of BHPH dealer lessors who primarily lease vehicles that are two model years old or newer, and dealers who certify 100 percent of used vehicles and maintain an onsite service facility that is licensed by the BAR and employs a minimum of five certified master mechanics. Those exemptions exclude very few dealers from the BHPH definition.

The Reasonable Market Value StickerThe law requires BHPH dealers to affix a

label disclosing the vehicle’s RMV to any used vehicle sold at retail. The RMV sticker must:

• Have not less than a 16-point heading reading, “REASONABLE MARKET VALUE OF THIS VEHICLE,” with text of not less than 12-point type.

• Be located next to a window sticker identifying the equipment on the vehicle. If there is no such sticker, the label must be located in a position where it is easily readable, such as the side window.

• Disclose “the information used to determine” the RMV, including the use of a “recognized pricing guide.”

• Disclose the date the RMV was determined.

• State on the label, “The reasonable market value is being provided only for comparison shopping and is not the retail sale price or the advertised price of the vehicle.”

A BHPH dealer shall provide a prospective buyer of the used vehicle a copy of “any information obtained from a nationally recognized pricing guide” that the BHPH dealer used to determine the RMV. So if the BHPH dealer includes all such information on the RMV sticker, it should be sufficient simply

to give the consumer a copy of the sticker.“Nationally recognized pricing guides”

include but are not limited to Kelley Blue Book, Edmunds, Black Book and the NADA Guide.

The law will not impact used car dealers who assign the bulk of their contracts to unaffiliated lenders. Dealers who finance less than 10 percent of their vehicles in-house will be able to avoid the new statutory requirements.

Most new car dealers will not meet the definition of BHPH dealers because they assign most of their contracts to lenders. The few new car dealers who finance more than 10 percent of their used car deals in-house or with affiliated finance companies might still be exempt if they certify 100 percent of their used vehicles and meet the service facility requirement.

It is unlikely, however, that even new car dealers will certify every retail vehicle they sell, so technically they could fall into the BHPH definition if they do a lot of affiliated in-house financing.

Oddly, used car dealers could meet the definition for some 45-day periods, but not meet the definition during other 45-day periods, depending on how many vehicles are being financed in-house.

BY LARRY MILES

CA_1212.indd 3 11/16/12 3:07 PM

T H E W E S T C O A S T D E A L E R DECEMBER 2012

4


WHAT’S NEW

MAGAZINE CONTENTS

ADVERTISERS INDEX

03 Legal Minute06 44th Annual Convention Recap12 Government Report16 Blueprint for Legislative Success20 Some Thoughts on Advertising22 Money Matters26 Negative SEO?30 Compliance Overdrive

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM • WWW.NIADA.TVNIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR [email protected] West Coast Dealer is published bi-monthly by the National Indpendent 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 76006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of The West Coast Dealer, IADAC, or the National Independent Au-tomobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or ser-vices featured. Copyright 2012 by NIADA Services, Inc. All rights reserved. STATE MAGAZINE MGR./SALES Troy Graff • [email protected] Andy Friedlander • [email protected]/PRODUCTION MGR. Christy Haynes • [email protected] Nieman Printing

IIADAC OFFICE

ADESA ....................................... Inside Back CoverAllen L. Hawkins Insurance ................................21Ally ......................................................................5Auto Search Technologies .................................26AutoTrader.com ......................... Inside Front CoverBlack Book .......................................................20Brasher’s Sacramento Auto Auction ......Back CoverCARFAX .............................................................15Chase ................................................................24Computerized Vehicle Registration .....................22Dealer Center ...................................................19Dealer Services Corp ...........................................9Dodah.com .......................................................17Insurance Auto Auctions ....................................25Lobel Financial .....................................................7Manheim.com ...................................................13NIADA Certified ....................................................3Protective ..........................................................29United Acceptance .............................................23Voisys ................................................................30Westlake Financial ............................................11Your Car Dealer Bond ........................................14

inside

FOR INFORMATION ON HOW TO BECOME A MEMBER PLEASE CONTACT [email protected] • (916) 601-4976

Rod DavisPresidentBrasher’s Auto AuctionRio Linda, CA [email protected]

T H E W E S T C O A S T D E A L E R DECEMBER 2010 w w w . i a d a c . o r g

John McElroy is host of the long-running “Auto-line Detroit” television program, covering all as-pects of the automotive industry. In this presenta-tion, McElroy provides a thorough and insightful review of where we’ve been, where we now are, and where our industry is headed. Taped at the Automotive Fleet & Leasing Association’s Annual Conference.

Dealers who demonstrate commitment and support the principles and ethical business standards of the CMD® designation com-plete a four-day seminar that addresses Busi-ness Management, Merchandising, Financial Management, Human Resources, and Business Planning. Northwood University provides the in-structor and awards four Continuing Education units for this course. The next class will be March 10-12 at the SuperMedia Hotel and Conference Center at DFW.

MAGAZINECONTENTSINSIDE

ADVERTISERSINDEXAction Auto Recovery .............................................. 6Allen L. Hawkins Insurance Services ....................... 9AutoTrader.com ............................ Inside Front CoverBlack Book ............................................................. 13Brasher’s Sacramento Auto Auction ........ Back CoverCars.com ......................................Inside Back CoverDealerClick .............................................................. 5J. L. Von Arx & Associates ..................................... 12Manheim Advantage.......................................10, 11SmartAuction .......................................................... 7Western Funding ................................................... 16Western General / Protective .................................. 3

6 Named IADAC Quality Dealer of the Year 8 Auction Standards Help Customers 13 Credit Applications Do’s & Don’ts 14 Striking Gold: IADAC’s 42nd Annual Convention

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM • WWW.NIADA.TVNIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR [email protected].

The West Coast Dealer is published bi-monthly by the National Ind-pendent 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. POST-MASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of The West Coast Dealer, IADAC, or the National Independent Automobile Dealers As-sociation. Likewise, the appearance of advertisers, or their identifica-tion as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright 2010 by NIADA Services, Inc. All rights reserved.

STATE MAGAZINE MGR./SALES Troy Graff • [email protected] Mike Harbour • [email protected] MGR. Jacob Kerns • [email protected]/PRODUCTION MGR. Christy Haynes • [email protected] Nieman Printing

THE CURRENT STATE OF THE AUTO INDUSTRY

CMD CLASSES

4

Dear Editor:

Carfax is constantly looking for ways to further improve the exceptional service we provide our independent dealer customers. We have a dedicated team of professionals that handles any customer requests quickly. As a result of our tireless efforts, I am proud to say that we have streamlined our data re-search process.

The research process is easily started with just a few simple steps. Any Carfax-subscrib-ing dealer in California can access their Car-fax account at carfaxonline.com. Next, click the link which takes you directly to the online Data Correction Form. After submitting the form with the 17-digit vehicle identification number and requested research, a Carfax rep-resentative will work with you throughout the data verification process and confirm the issue has been resolved. In most cases, the entire process is completed in just a few hours.

Carfax is always here to help, especially on the rare occasions that data research is needed. Inconsistent odometer readings, for example, can raise a red flag but may be the results of simple human error. We’ve made it easier for dealers to initiate the process and get a faster resolution. We’re helping our cus-tomers manage a more efficient business and keeping their operations running smoothly.

Any dealer in California that has ques-tions about their Carfax account or the data research process can call Carfax Business Services at 888-695-1885. It is our pleasure to serve you.

Sincerely,

Kari SloanManager, Dealer Business UnitCarfax

Carfax Is Here To HelpSCHOLARSHIPS!

FOR INFORMATION ON HOW TO BECOME A MEMBER PLEASE CONTACT [email protected](888) 315-2869

Westlake Financial Services has named their top five auctions for Q3-2010. They are:

1. Manheim Nevada 2 Rawls Auto Auction 3. Norwalk Auto Auction 4. Brashers Salt Lake Auto Auction 5. ADESA Golden Gate

Westlake Remarketing saw strong performance in the recent quarter and is recognizing these top auctions for their superior efforts. Rankings are based on a combination of sale results and

service. All five topped the sale rankings. Man-heim Nevada ranked first overall for the second straight quarter, ranking first for sale results and third for service.

Bill Walters, VP of remarketing, says over-all auction performance has been improving: “Development of these grading measures has helped us recognize strengths and address short-comings in our current network. The continued support of these auction partners is integral to our remarketing success.”

“Westlake Remarketing Releases Q3 Top Auctions List”

Rod DavisPresidentBrasher's Auto AuctionRio Linda, CA 95673916 - 991 - [email protected]

David Aah1Chairman of the BoardNorth Bay Auto AuctionFairfield, CA 94534707 - 864 - [email protected]

Mark GloverSr. Vice PresidentAzteca Auto SalesGalt, CA [email protected]

Larry LaskowskiTreasurerThe Auto OutletRoseville, CA [email protected]

Terry DegmetichSecretaryI - Deal CarsRoseville, CA 95678916-870- [email protected] Cardinale

Vice PresidentA to Z MotorsWinters, CA [email protected]

Rick GomezVice PresidentRJ Auto BrokersCarmichael, CA [email protected]

Mike CaseyVice PresidentCal West MotorsSan Leandro, CA [email protected]

10 10 Questions for AutoCheck14 Auction Security18 In the Spotlight

12 Local Auto Dealers Usedby Clunkers

MAGAZINECONTENTS

ADVERTISERSINDEX

INSIDE

Action Auto Recovery ..................................................8ADESA ......................................................................17AutoTrader.com ................................ Inside Front CoverAutoXplorer................................................................13Black Book..................................................................19Brasher’s Sacramento Auto Auction ..............Back CoverCars.com .......................................... Inside Back CoverDealerClick ..................................................................5J. L. Von Arx & Associates ..........................................9Lobel Financial ..........................................................15Manheim Advantage ..........................................10, 11SmartAuction ..............................................................7Western Funding ........................................................18Western General / Protective........................................3

Dealers who demonstrate commitment andsupport the principles and ethical business stan-dards of the CMD� designation complete a four-day seminar that addresses Business Management,Merchandising, Financial Management, HumanResources, and Business Planning. NorthwoodUniversity provides the instructor and awards 4Continuing Education units for this course.NEXT CLASS OCTOBER 28-30, 2010VISIT NIADA.COM FOR MORE INFOMATION

CERTIFIED MASTERDEALER� PROGRAM:

T H E W E S T C O A S T D E A L E R OCTOBER/NOVEMBER 2010 w w w . i a d a c . o r g

4

NATIONAL INDEPENDENTAUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM • WWW.NIADA.TV

2521 BROWN BLVD. • ARLINGTON, TX 76006-5203PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF(800) 682-3837 OR [email protected] WEST COAST DEALER IS PUBLISHED BI-MONTHLY BY THE NATIONAL IN-DPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORA-TION, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203; PHONE (817)640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT ADDITIONALOFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLI-CATIONS, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203. THE STATE-MENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUALAUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF THE WESTCOAST DEALER, IADAC, OR THE NATIONAL INDEPENDENT AUTOMOBILEDEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, ORTHEIR IDENTIFICATION AS MEMBERS OF NIADA, DOES NOT CONSTITUTE ANENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT2010 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED.STATE MAGAZINE MGR./SALES: Troy Graff • [email protected]: Mike Harbour • [email protected]/PRODUCTION MGR.: Christy Haynes • [email protected]: Nieman Printing

FOR INFORMATION ON HOW TOBECOME A MEMBER PLEASE [email protected](888) 315-2869

EXECUTIVE COMMITTEE

Mike Macaulay, Magazine Committee Chair • Car SystemsRoseville, CA • 916-784-7155 • [email protected]

When it comes to motor vehicle bonds, alldealer principals are not alike. At BondSource Insurance Agency, we offer a com-mon sense approach to underwriting. Abusiness’ net worth is the key along with thepersonal character of the business owner.

Since 1993, Bond Source InsuranceAgency is committed to fast and friendlybond service. IADAC members may contactNancy R. Chapman for a bond quote at888-855-0100 or [email protected].

D E A L E R B O N D H E L P

BREAKING NEWS!BREAKING NEWS!

Check out the newlyredesigned IADAC websiteat www.iadac.org.We want to know what youthink of the new site. Let usknow by e-mailing us [email protected].

CA_1010.qxd:Layout 1 11/19/10 12:04 PM

CA_1210_O.indd 4 11/19/10 12:11 PM











CMD CLASSES

4

Dear Editor:





Sincerely,




















MAGAZINECONTENTS

ADVERTISERSINDEX

INSIDE





4




EXECUTIVE COMMITTEE







CA_1010.qxd:Layout 1 11/19/10 12:04 PM Page 4

CA_1210_O.indd 4 11/19/10 12:11 PM

David AahlChairman of the BoardNorth Bay Auto AuctionFairfield, CA [email protected]

New Executive Committee

Executive Committee: Rod Davis, President (same picture) Mark Glover, Sr. Vice President (New Picture, see below) Mike Casey, Vice President (Same Picture) Vince Cardinale, Vice President (Same Picture) Greg Meier, Vice President (New Picture, see below) Terry Degmetich, Treasurer (same Picture) Mike Gough, Secretary (New Picture, see below) David Aahl, Chairman of the Board (same picture)

Mark Glover

Greg Meier(crop to head shot please)

Mark GloverSr. Vice PresidentCounty FinancialGalt, CA [email protected]

Vince CardinaleIADAC Vice-PresidentA to Z MotorsWinters, CA 95694











CMD CLASSES

4

Dear Editor:





Sincerely,




















MAGAZINECONTENTS

ADVERTISERSINDEX

INSIDE





4




EXECUTIVE COMMITTEE







CA_1010.qxd:Layout 1 11/19/10 12:04 PM Page 4

CA_1210_O.indd 4 11/19/10 12:11 PM

Terry DegmetichTreasurer I-Deal CarsRoseville, CA 95678916-870- [email protected]

New Executive Committee

Executive Committee: Rod Davis, President (same picture) Mark Glover, Sr. Vice President (New Picture, see below) Mike Casey, Vice President (Same Picture) Vince Cardinale, Vice President (Same Picture) Greg Meier, Vice President (New Picture, see below) Terry Degmetich, Treasurer (same Picture) Mike Gough, Secretary (New Picture, see below) David Aahl, Chairman of the Board (same picture)

Mark Glover

Greg Meier(crop to head shot please)

Greg Meier Vice PresidentDiablo Motors, San Ramon, CA 94583Phone 925-830-8747

Mike GoughSecretaryMG Auto Wholesale, Vacaville, CA 95687Phone 707-481-6646

Larry LaskowskiExecutive DirectorThe Auto OutletRoseville, CA [email protected]

Executive Committee

Michael CaseyCal West Motors1977 E 14th StSan Leandro, CA 94577-5022510-352-9230

At this year’s annual convention, the Quality Dealer Luncheon was the final session – the icing on the cake, so to speak – with State Sen. Doug LaMalfa as the keynote speaker.

The senator is a rice farmer in Northern California and he discussed the increasing government regulation faced by business owners. He connected with the audience through personal accounts of government entities that have come to his property inspecting equipment for permits and such, turning over rock after rock in an effort to substantiate their existence. He also noted the looming threat of expenses due to mandatory major equipment replacement as the Air Resources Board looks at regulating emissions from farm equipment in the state.

LaMalfa’s common-sense approach to business has carried over to the legislature, and one wonders why more legislators don’t have the same goals. Recognizing that small business is the backbone of the economy, shouldn’t it be important to have legislators who will support business owners rather than encumber them with “feel-good” legislation that hurts the bottom line and,

ultimately, the consumer?Don’t misunderstand, I’m not trying to drive a

wedge between Democrats and Republicans. We don’t need any further division there. I’m suggesting that you look at who the legislators are and what their background is to find out if they truly represent you and the best interests for righting this state.

After his speech, LaMalfa discussed his future, saying he would be leaving the state legislature to seek a seat in the U.S. Congress. He was speaking with one of the dealers in attendance who, very emotionally, asked, “Please promise me that when you get to Congress you’ll work to bring my America back.”

IADAC thanks Sen. LaMalfa for taking the time to talk to our group and wishes him success in his bid to represent us in Congress. BY LARRY LASKOWSKI

Executive Director’s Report

State Sen. Doug LaMalfa (left) and IADAC lobbyist Bill Dohring.

In November and December, more than 4 million American businesses, including 740,000 retailers, will receive 2012 Economic Census forms. Responses to the questionnaire are required by law to be returned by Feb. 12.

Every five years, the government conducts the Economic Census to develop a comprehensive portrait of American business, from the national to the local level, relying on timely and accurate data.

The U.S. Census Bureau has created a web page __ business.census.gov __ to provide information about the Economic Census as well as statistics businesses can use to assess and grow their business operations.

The site includes webinars and videos to educate businesses about the census and what it means to them, as well as a section geared toward small businesses. FOR MORE INFORMATION, VISIT BUSINESS.CENSUS.GOV.

Economic Census Coming Soon E C O N O M I C N E W S

WEAR WHAT YOU WANT. WE CAN’T SEE YOU.

www.niada.tv

SALES • OPERATIONS • F&I • REMARKETING • COMPLIANCE • LEGAL/REGULATORY

• SPECIAL FEATURES • INDUSTRY EVENTS

AUTOMOTIVE INDUSTRY NEWS & SPECIAL MONTHLY PROGRAMS

CA_1212.indd 4 11/16/12 3:07 PM

CA_1212.indd 5 11/16/12 3:07 PM


6


Attendance was up for this year’s annual convention, held Oct. 26-27 at the Gold Country Casino/Hotel in Oroville, Calif., which featured a program that offered something for everyone.

IADAC lobbyist Bill Dohring moderated a DMV panel that included Andrew Conway, Lisa McMillen and Barbara Rooney. Also on hand was new DMV director Jean Shiomoto, who will replace soon-to-be-retired George ValVerde. A brisk question and answer period followed.

NIADA legal counsel Shaun Petersen provided an overview of the legislative issues facing the nation. He pointed out that the Consumer Financial Protection Bureau will be looking closely at the finance habits of auto dealers, which means we can all expect increased scrutiny. Dealers who have not enacted a “Red Flags Rule” policy should get on it soon. Visit www.iadac.org for more information.

Each year, the convention includes a live auction fundraiser for the Vic Snyder Memorial Scholarship Fund. Through donations and the tireless efforts of committee chair Mary Glover, a record $18,000 was raised this year. Generous bidders and donors recognized the value of this event as 29 scholarships were awarded to children or grandchildren of IADAC members.

Tori Morandi of AutoTrader.com provided an upbeat session covering cutting-edge Internet marketing techniques, along with valuable information on protecting dealers’ online reputation.

“The History of IADAC,” presented by past presidents John Hiatt, Don Head and Terry Degmetich, condensed 50-plus years of IADAC history into a one-hour session. Clearly, legislative issues have been the most recognized problems the association has dealt with over the years. IADAC was founded as a need to combat harmful legislation and regulation.

Bill Ek of Credit Acceptance provided great suggestions in his session that can benefit all dealers and improve the industry by dealers taking greater interest in compliance and customer relationships.

The event closed with the Quality Dealer Luncheon, hosted by Sen. Doug LaMalfa. We are thankful to Sen. LaMalfa for taking the time to speak to our group. He is clearly pro-business and a great supporter of smaller government and less taxation. He is running for Congress this year, and we wish him success and look forward to him representing us at the national level.

Our Quality Dealer nominees were Gus Camacho of Camacho Auto Sales in Lancaster, Eric Fischer of Just Better Cars.com in Roseville, Jerry Khan of Legacy Auto Sales in Santa Rosa, and Guy Strohmeier of Guy Strohmeier’s Auto Center in Lakeport.

At the conclusion of his speech, Sen. LaMalfa announced the winner, who, by popular vote of convention attendees, was Guy Strohmeier. Congratulations to Guy for his well-deserved award.

The second annual Pinewood Derby Contest was won by Mike Gough. Mike’s car bested the strong field of entries to win the first prize of a $50 gift card. Best of Show went to Terry Degmetich for his tow truck design.

We also want to recognize the associate members, vendors and sponsors who made the event a success. In alphabetical order, special thanks to all.

AS

SO

CIA

TIO

N N

EW

S

AUL CorpAuction GeniusAutomotive Finance Corporation AutoTrader.comAuto Data DirectAuto Search TechnologiesBrasher’s Sacramento Auto AuctionCalifornia Auto FinanceChase Auto FinanceCredit AcceptanceDealerTrack

Dealix/UsedCars.comInstaVinManheim San Francisco BayMcNutt Auto LogisticsMotor Vehicle Software Corp.Nationwide FinanceNorth Bay Auto AuctionSpartan Financial PartnersTarget Media PartnersWilshire Consumer Credit

44th Annual IADAC Convention Recap

CA_1212.indd 6 11/16/12 3:07 PM

CA_1212.indd 7 11/16/12 3:07 PM


8


California Senate Bill 956 Vetoed

NIADA congratulates California Gov. Jerry Brown for exercising his veto power to strike down Senate Bill 956, which would have capped interest rates and limited asset recovery for Buy Here-Pay Here dealers.

A day before his veto power was set to expire for this year’s legislative session, Gov. Brown vetoed SB 956, saying he was “not yet convinced the evidence merits the regulatory oversight of this bill.”

“This is a big victory for the independent automobile industry, California’s Buy Here-Pay Here dealers and their valued customers,” NIADA CEO Mike Linn said. “We are glad common sense carried the day in California during this legislative session regarding SB 956. Should the issues from this bill surface again next year, we’ll be prepared.”

NIADA chief operating officer Steve Jordan praised the efforts of the association and its members and allies in fighting the bill.

“Many of us worked hard lobbying against this bill and fighting for its veto,” he said. “We are proud of the efforts put forth by our dealers, our state association leaders in California and NIADA’s Coalition to Protect Our Freedom to Drive.

“This would not have happened without the combined efforts of the industry’s stakeholders working together, nationally and in California, marshaling our resources and making our collective voice heard on behalf of our dealers and their customers.”

Two other BHPH bills – AB 1447 and AB 1534 – were signed into law and will go into effect Jan. 1.

• AB 1447 will require BHPH dealers to provide consumer disclosures when using GPS and/or starter-interrupt devices, and a 30-day, 1,000-mile limited warranty on every vehicle sold.

• AB 1534 will require BHPH dealers to disclose the “fair-market” value for each vehicle advertised for sale.

President’s ReportI am truly sorry for those of you who missed the 44th Annual

IADAC Convention at the Gold Country Casino/Hotel in Oroville. It was a memorable gathering and though it was just a day and a half, it was packed with nonstop entertainment.

I do recognize the difficulty of leaving your business for any time, no matter how brief. However, this event proved every attendee can gain something of benefit to him and his business.

I believe the single lesson most ingrained was the sense of belonging as a contributor to an association that represents the best interests of its members and their chosen industry.

Through a variety of sessions, dealers received a wide range of information regarding DMV issues, Internet marketing tips, precautions about federal programs investigating auto finance and much more. The event provided a great forum for dealers and vendors to discuss the industry or swap ideas that could benefit their business models.

It wasn’t all business, though. Fun events were well represented in the agenda. There was music and dancing, a poker tournament and a Pinewood Derby contest. There were 29 scholarship recipients this year, and a record $18,000 was raised for the Vic Snyder Memorial Scholarship Trust, which funds those awards.

The event was significant in that there was renewed recognition of our association as a viable asset to California’s auto industry and the dealers and vendors in this state. IADAC’s board of directors includes new, enthusiastic members from all over the state, including some vendor members.

I want to personally thank those who have served on the board, those who have come onto the board and those who continue to serve the dealers of this state. We look forward to continued growth in the coming years and continue to make the commitment to serve our members.

BY ROD DAVIS

Auto dealer: The recent passage of AB1477 requires BHPH dealers to provide an limited 30-day warranty. How will that work?Editor: DMV has been saddled with

the job of handling this administratively, so we don’t yet know the full impact this legislation will have on our industry. I am told warranty and service contract companies will have products in place to sell before the January deadline. Since the law requires an extensive list of covered services (with no deductible or copay), the cost will probably be high. IADAC will be at the forefront of all information available.

Auto dealer: AB 1534 requires dealers to post “reasonable retail values” on every vehicle for sale. What does that mean?Editor: That law applies to Buy Here-

Pay Here dealers only. The definition of “reasonable retail values” is subject to interpretation. Again, DMV has been given the job of handling it administratively. Does it mean that Kelley Blue Book, Black Book or NADA retail values have to be posted on the vehicle? The answer is not available

yet. We are working closely with DMV to determine a fair and equitable solution to the implementation of this legislation. Stay tuned. We will have an answer soon.

Mayer Equipment: We have recently discovered the Vehicle Registration Fee Calculator on DMV’s website. Is it accurate?Editor: The calculator is at http://dmv.

ca.gov/feecalculatorweb/index.jsp. It can be accessed 24/7 and has been recently been upgraded. I have found it to be totally accurate and I rely on it. Once you find the fee, print out the page so there can be no question that you did your best to find the correct amount. Check your Bundle Reconciliation Report to confirm the result and refund or bill as needed.

Auto dealer: I am a recent new member of IADAC. My office manager has brought to my attention the “Master Dealer Program.” Is that something IADAC offers? Also, IADAC has an annual Quality Dealer Award. What does it take to qualify for the award?Editor: The Certified Master Dealer

Program is a highly touted educational

seminar offered by NIADA, our parent organization. Information is available at www.niada.com and www.niada.tv. The program defines and educates the best and brightest dealers nationwide. The IADAC Quality Dealer award is “for dedication to the ideals of free enterprise in the highest tradition and service to fellow dealers in all areas of association endeavors.” Please participate in your local IADAC meetings, attend our annual convention and help our association in any way you can. We welcome “quality dealers” every year!

Please submit your letters to the editor at any time to IADAC magazine chairman/editor Mike Macaulay at [email protected], or mail questions to CARSYSTEMS, 701 Riverside Ave., Roseville, CA 95678.

We will endeavor to answer any and all questions using our team of experts. We will answer your question personally if you do not want it published. IADAC stands for integrity and honesty in our industry.

Letters to the Editor

I N D U S T RY N E W S A S S O C I AT I O N N E W S

CA_1212.indd 8 11/16/12 3:07 PM

CA_1212.indd 9 11/16/12 3:07 PM


IADAC QUALITY DEALER OF THE YEAR AWARDIADAC’s Quality Dealer of The Year Luncheon proved to be one of the best events of the

convention. All IADAC members at the luncheon were issued a ballot to vote for one of the four nominees in attendance from the original list of eight – according to the rules, a nominee must attend the convention to win.

The nominees were Gus Camacho of Camacho’s Auto Sales in Lancaster, Eric Fischer of Just Better Cars.com in Roseville, Jerry Khan of Legacy Auto Sales in Santa Rosa and Guy Strohmeier of Guy Strohmeier’s Auto Center in Lakeport.

State Sen. Doug LaMalfa was the keynote speaker, and his pro-business attitude and common sense approach won over the audience immediately. After a brief question and answer session, the senator announced the nominees and then, asking for “the envelope please,” announced this year’s winner, Guy Strohmeier.

Guy made a brief and emotional acceptance speech, giving thanks to those who have helped him achieve success.

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

Brasher’s Sacramento Wins Westlake Award

Brasher’s Sacramento Auto Auction was among the winners as Westlake Financial Services named its top regional auction performers for the third quarter of 2012.

Brasher’s Sacramento was the Western regional winner, with Kansas City Independent Auction taking Central honors and Rawls Auto Auction of Leesville, S.C., winning in the Eastern region.

ADESA Lexington of Lexington, Ky., was named the Top Service Auction.

Consistency was the Brasher’s Sacramento Auction hallmark, Westlake Pacific regional auction representative Jeff Huang said.

“Brasher’s is all about providing a consistent level of service and being able to anticipate our needs,” he said. “They understand Westlake’s collateral and what is needed to optimize our recovery.”

Westlake Southern regional representative Dirk Grammel said Rawls stood out for its focus on old-fashioned customer service and effective marketing ideas, while Kansas City Independent “exceeded our expectations for sale preparation, operations and marketing and sales results.”

KCI “has a unique personal approach to handling buyers and sellers,” he said. “That sets them apart from other auctions and brings dealers back to their sales consistently.”

ADESA Lexington received the Top Service Auction award by scoring highest in Westlake Remarketing’s vehicle certification program.

“ADESA Lexington takes a great deal of pride in how they run their sales – from vehicle prep to marketing to understanding our program requirements,” Northeastern rep Ryan Twigg said. “Their efforts are reflected in the results. They utilize a team effort to get our products to the right buyers.”

AU C T I O N N E W S

QUALITY DEALER OF THE YEAR GUY STROHMEIER (LEFT) WITH SEN. DOUG LAMALFA.p

QUALITY DEALER NOMINEES (FROM LEFT) ERIC FISCHER, GUY STROHMEIER, JERRY KHAN AND GUS CAMACHO WITH SEN. DOUG LAMALFA (CENTER).

p

LAMENTS OF AN AUTO OWNER Sung to the melody of “America, My Country ’Tis of Thee”

My auto ’tis of thee,Short cut to povertyOf thee I chant.On you three years ago,Now you refuse to goOr won’t or can’t.Through town and countrysideI drove thee full of pride;No charm you lacked.I loved your gaudy hue,Your tires round and newNow I feel mighty blue,The way you act.To thee, old rattlebox,Came many bumps and knocks;For thee I grieve.Badly thy top is torn;Frayed are thy seats and worn;The croup affects thy horn,I do believe.Thy perfume swells the breeze,While good folks cough and sneeze,As we pass by.I paid for thee a price,’Twould buy a mansion twice;Now everyone yells “Ice”I wonder why.Thy motor has the grip;Thy spark plug has the pip,And woe is thine.I, too, have suffered chills,Fatigue and kindred ills,Trying to pay the billsSince thou were mine.Gone is my bankroll now;No more ’twould choke a cow,As once before.Yet if I had the yen,So help me John – Amen!I’d buy a car againAnd speed some more.

Author unknown – and should probably stay that way!

This “poem” was passed out at a Sacramento IADAC local meeting more than 20 years ago. Transcribed by Mike Macaulay for your reading pleasure.

L.A. MAYOR STEPS UP FOR NEW CAR DEALERS

Recently, Mayor of Los Angeles Antonio Villaraigosa dropped the city’s business tax for new car dealers in an effort to turn around the exodus of new car dealerships that have left or might be leaving the city.

The city’s statistics show 95 dealerships have left during the past 25 years to conduct business in neighboring cities that have lower or no business taxes.

If this is a good idea that could encourage new car dealers to return to L.A., or to entice them to stay, wouldn’t it be good for the city to help independent dealers also?

I asked that question to Mayor Villaraigosa in an email sent to him July 12:

Hello Mayor Villaraigosa,I read an article recently that indicated you

had relaxed the business tax on Los Angeles new car dealers in order to stimulate commerce in your area. While I applaud the effort, I must ask why independent auto dealers were not also included in this reform. It appears there are about 275 total dealer licenses in Los Angeles, of which the vast majority are not new car franchises. Wouldn’t it be equally beneficial for the city to stimulate and retain the independent dealers also?

Best regards,Larry LaskowskiExecutive Director Independent Automobile Dealers Association of CaliforniaPO Box 343Roseville, CA 95661(916) [email protected] above letter received no response.

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

10

CA_1212.indd 10 11/16/12 3:07 PM

CA_1212.indd 11 11/16/12 3:07 PM


12


12

L AT E S T G OV E R N M E N TA L I S S U E S

NIADA Legislative Team UpdateHere’s a rundown of some of the

latest governmental issues and activity affecting the used car industry from Sante Esposito of Federal Advocates and NIADA legislative/regulatory/compliance counsel Shaun Petersen.

Auction SalesWhile Congress has not officially said

anything on the issue in months, there is, as previously reported, still interest from Sen. Pryor and the House Energy and Commerce Committee in exploring the impact of the current auction sale process on consumers and law enforcement.

To that end, Steve Lehrman, legislative assistant to Sen. Pryor, visited ADESA’s Washington-area auction facility on Aug. 15 to view he auction process firsthand. At the end of the visit, Lehrman said the senator and other interested legislators “don’t have a problem with what goes on at the auction” but could have issues with “what happens with the auctioned cars.”

Lehrman asked if NIADA could provide some thoughts regarding how to address that situation, especially as it relates to law enforcement, but we prefer not to respond until we receive more clarification as to exactly what issue/problem legislators are trying to solve.

Regardless, legislation is not likely to be introduced this year.

Rental Cars (S.1445, S.3502 and H.R. 6094)

There have been reports that consumer advocates are nearing a deal with rental car companies on the issue of banning rentals of motor vehicles under safety recall until the defect or noncompliance is remedied. So far, there is nothing definitive, and it’s not clear whether the rumored deal would require legislation.

A bill covering the rental/recall issue (S. 1445) was introduced in 2011 by Sen. Chuck Schumer (D-NY) and cosponsored by Sens. Dianne Feinstein and Barbara Boxer, both California Democrats. It was modified this summer by H.R. 6094, introduced by Rep. Lois Capps (D-Calif.), and an updated Senate bill (S. 3502) introduced by Boxer and co-sponsored by Feinstein.

Boxer has sparred with rental

car companies this year, calling for Enterprise, Avis, Hertz and Dollar Thrifty to sign a pledge promising not to rent or sell cars under safety recall until the cars are fixed. Only Hertz signed the pledge. The others said while they support legislation to ensure rental car safety, companies address safety recalls in a timely manner and insist any legislation should also cover other businesses that transport passengers, like limousine and taxi companies.

S.1449, MAP-21In September, Sen. Boxer announced

she is already working on legislation to succeed the Moving Ahead for Progress in the 21st Century Act (MAP-21), the $105 billion federal transportation bill that was signed into law July 6.

MAP-21 expires in about 750 days. Congress is likely to be in legislative session for less than half that time and is likely to be preoccupied with a number of higher priority issues.

Boxer said her goal is “to find a dependable funding source and to work in a bipartisan way to find that funding source. I really believe that the Highway Trust Fund should be funded through user fees.”

Those fees might include indexing the gas tax to inflation, but probably would not include a vehicle miles-traveled fee, which Boxer said raises privacy concerns. Even a gas tax increase won’t be enough, she said, if vehicles keep getting more fuel-efficient.

“We’ve got to figure out other ways,” Boxer said. “For example, I drive a hybrid car and I get about 50 miles to the gallon, I’m not paying my fair share at all. If I get an electric car, I won’t pay anything.”

H.R.860 and S.110, Promoting Charitable Donations of Qualified Vehicles Act of 2011

While the Senate bill, introduced by Sen. John Ensign (R-Nev.), has no cosponsors, the identical House bill, introduced by Rep. John Larson (D-Conn.), now has 319 cosponsors – almost 75 percent of the House membership.

The bill amends the Internal Revenue Code to make it easier to take a charitable tax deduction for

contributions of qualified vehicles (motor vehicles, boats or airplanes). According to the IRS, as a result of Congress tightening the deductibility rules in 2005, the volume of used car donations fell by about 67 percent.

With such a large number of bill sponsors and obvious bipartisan support, one would expect the bill to move quickly and without controversy through the legislative process. That has not happened for several reasons – the somewhat problematic tax deduction history of motor vehicle donations, the fact that no revenue bills are moving in the House, the uncertainty of the bill’s revenue impact, the lack of Senate interest and support, the fact that the issue is not a priority for House leadership, and the limited amount of time remaining in the Congress to consider legislation.

S. 3468, the Independent Agency Regulatory Analysis Act of 2012

On Aug. 1, Sen. Portman (R-Ohio) introduced S.3468, the Independent Agency Regulatory Analysis Act of 2012. The bill was referred to the Senate Homeland Security Committee. Under the bill, the White House would receive explicit authority to influence the rulemaking process of regulatory agencies, including the Federal Trade Commission the Consumer Financial Protection Bureau.

The President, through an executive order, would be allowed to mandate at the minimum a 13-point test for rulemaking, including finding “available alternatives to direct regulation,” evaluating the “costs and the benefits,” and periodically reviewing existing rules to make agencies “more effective or less burdensome.”

For rules with an annual effect of $100 million or more on the economy, agencies would submit their proposals to the White House’s Office of Information and Regulatory Affairs. A negative review from the office would delay a rule for up to three months and force the agency to explain its approach.

If enacted, the bill would clearly impact various aspects of the regulatory process, the most obvious being timing.

C O N T I N U E D O N PAG E 1 4

CA_1212.indd 12 11/16/12 3:07 PM

CA_1212.indd 13 11/16/12 3:07 PM


14


Department of LaborLast year, the Department of Labor

finalized a rule to eliminate the overtime exempt status for service writers and service advisors. But as part of the department’s 2012 appropriation legislation, Congress prohibited the department from using any funds to enforce that rule.

That appropriation legislation expires in March, and the prohibition will also expire unless it is extended by new legislation.

Internal Revenue ServiceThe Financial Crimes Enforcement

Network (FinCEN) announced that a variety of businesses, including auto dealers, are now able to electronically file Form 8300, Reports of Cash Payments Over $10,000 Received in a Trade or Business, using the Bank Secrecy Act electronic filing system at http://bsaefiling.fincen.treas.gov/main.html.

E-Filing is a free system that allows businesses to submit their FinCEN reports through a secure network. Paper filings of Form 8300 will continue to be accepted for now, but businesses are encouraged to begin E-Filing.

Federal Trade CommissionThe FTC has published a guide called

Marketing Your Mobile App: Get it Right from the Start, to help mobile app developers and users comply with truth-in-lending and privacy laws.

The guide highlights that all required disclosures must be made clearly and conspicuously and suggests apps only collect necessary information and providers be transparent about data collection and sharing practices. This information is important for dealers who advertise on mobile sites or who have their own smart phone app.

The FTC released a statement on Sept. 13, reaffirming its focus on enforcing the Fair Credit Reporting Act. That suggests more enforcement action on illegal sharing of personal information and illegal use of credit scores. Dealers should have their counsel review all contracts that allow vendors access to their DMS, and any vendor that provides list of customers based on their credit profile.

Buyers, sellers and consigners across the independent auto auction industry can now seamlessly use ShipCarsNow from Auction Edge Inc.’s auction management platform, allowing customers to ship multiple vehicles to multiple destinations and take advantage of built-in volume pricing.

ShipCarsNow is part of Union Pacific, which transports approximately one out of three new cars sold in the U.S. With more than 1,300 quality trucking companies under contract and strategic ties with major railroads, ShipCarsNow offers nationwide, door-to-door rail and direct truck service at competitive pricing. ShipCarsNow provides Auction Edge members with the capability to transport cars safely and securely, supported by 24/7 customer service.

“We want to make it as easy and as cost-efficient as possible for our Auction Edge customers to manage shipping and delivery of their sales and purchases,” Auction Edge senior vice president Scott Finkle said. “Dealers and consigners with AuctionACCESS IDs will be able to set up a ShipCarsNow account with a couple of clicks and start shipping vehicles immediately.”

For more information, visit www.shipcarsnow.com or call 866-207-3360.

Auction Edge, a national remarketing platform that powers more than 130 independent auto auctions in North America, also introduced a new function that allows key auction employees to view credit lines and available credit for dealers with Automotive Finance Corporation (AFC) floorplans, enabling auction personnel to help the dealer complete purchases and quickly floorplan their vehicles through AFC.

FOR MORE INFORMATION, VISIT WWW.AUCTIONEDGE.COM.

I N D U S T RY N E W S

Auction Edge Integrates with ShipCarsNow, AFC

C O N T I N U E D F RO M PAG E 1 2

NIADA LEGISLATIVE TEAM UPDATE

CA_1212.indd 14 11/16/12 3:43 PM

CA_1212.indd 15 11/16/12 3:07 PM


16


A BLUEPRINT FOR SUCCESS

Since the passage of the Wall Street Reform and Consumer Protection Act in 2010, also known as the Dodd-Frank Act, federal and state regulators have been clamoring with interest in the financial arm of the automotive industry – specifically, the Buy Here-Pay Here (BHPH) segment.

The interest in BHPH hasn’t been limited to only regulators, but has also been fueled by state legislators, the media and some consumer advocate groups.

It’s been a year since the Los Angeles Times published a three-part series profiling a largely one-sided portrayal of BHPH. Within weeks, three bills were introduced in the California legislature that sought to impose a wide, sweeping choke-hold on BHPH operators in the state.

Until then, not many outside the industry had taken a real interest in following the operational complexities of BHPH. Suddenly, for the first time in a very public way, BHPH was under a microscope and the legislative die was cast.

Many were asking if it was really possible that those bills were written as a knee-jerk reaction to the series of overly sensational L.A. Times stories. The answer, unfortunately, is yes.

Welcome to the age of legislative recklessness, in which public policy can be conjured up by the media, hoping to unfairly influence business law in the name of consumer protection.

As automotive dealers, financiers and other industry stakeholders pulled up chairs to watch the drama unfold in California, many BHPH dealers began to wonder how they would tell the intensely customer-service BHPH story to state legislators, committee members and their

staffs. There was growing concern about how the BHPH industry would come together and fight the toxic provisions in California Senate Bill 956, Assembly Bill 1447 and Assembly Bill 1534 (see sidebar).

As the committee assignments in the California Senate and Assembly were being handed down, the Independent Automobile Dealers Association of California (IADAC), NIADA’s state affiliate, began to lay the groundwork for its approach to the legislative campaign. Generally, NIADA doesn’t engage in state legislative activities – that is normally directed by our state associations – but given the far-reaching and restrictive nature of the California bills, it was decided that NIADA would participate heavily.

With each passing committee hearing, it became more apparent the fate of the bills was being dictated by party-line votes, and our direct opposition to the premise of the bills was falling on deaf ears.

Much of the committee testimony we saw in support of the bills consisted of consumers telling customer service stories that would not have been solved by the bill’s provisions. One car buyer complained that a car she bought with four mismatched tires was unreliable. She took the vehicle back to the dealer and ultimately got her money back for the car. Problem solved.

Yet supporters of SB 956 claimed that capping interest rates and limiting asset recovery for BHPH dealers would have somehow given this customer additional recourse to solve her problem. A problem that was easily resolved by her dealer once he knew about it.

The bills raced through the Democratic-controlled Senate and

Assembly, and in April we realized the traditional lobbying efforts in which we were heavily engaged needed to be augmented by additional public relations support, and the fragmented BHPH voice needed to be unified.

During a meeting at the National Alliance of Buy Here-Pay Here Dealers (NABD) Conference that month, Ken Shilson asked that NIADA lead a discussion with the various BHPH industry stakeholders to determine ways we could all work together more collaboratively, since we were all interested in the same outcome.

During that meeting, representatives from NIADA, NABD, DriveTime, J.D. Byrider, CarHop, Hudson & Cook and a recently formed group of concerned independent BHPH dealers – most of whom are NIADA members – called the Community Auto Finance Association, all gathered and aired their feelings, concerns and desires to work together for a common cause. We realized we were stronger collectively than individually. And so a more unified voice was agreed on, and the final piece to winning the fight in California was in place. The coalition decided NIADA would take the lead position.

Not wasting any time, NIADA’s newly formed ad hoc BHPH “coalition” raised nearly $100,000 and enlisted the help of a public relations firm to tell the BHPH story and show that auto dealers were not the only business concerns in the state opposed to the bills.

IADAC’s lobbyist, Bill Dohring, and executive director, Larry Laskowski, continued to march the halls of the legislature and work with officials at the DMV and Department of Corporations.

YOUR VOICE HEARD: BY STEVE JORDAN

NIADA CHIEF OPERATING OFFICER

H OW CA L I FO R N I A’ S B U Y H E R E - PAY H E R E L E G I S L AT I O N G A LVA N I Z E D T H E I N D U S T RY

C O N T I N U E D O N PAG E 1 8

CA_1212.indd 16 11/16/12 3:07 PM

CA_1212.indd 17 11/16/12 3:07 PM


18


Dealers were expected to be against the bills, but many local and county government officials, Chambers of Commerce and concerned consumers began to voice their opposition as well. We formed the “Coalition to Protect Our Freedom to Drive,” complete with a website and Facebook profile.

As our opposition support grew, we began to ask legislators to look more closely at how the passage of the bills would impact state sales tax revenues. We called for a fiscal impact study. Based on our internal industry data and preliminary research, NIADA determined that losses in revenue for California could range anywhere from $220 million to $330 million dollars annually.

That was corroborated by California’s Board of Equalization, which agreed that such revenue losses would have a devastating downstream effect for county and local governments that rely heavily on state funding for basic constituent services like police and fire protection.

Additionally, we voiced our concern that the passage of the bills would in fact be a violation of the equal protection clauses of the constitutions of California and the United States – asking one segment of the auto industry to play by operational guidelines that do not apply to the entire industry. That was an argument we were preparing to make in the courts, if necessary, in opposition to SB 956.

Concerned mostly with blocking the inherently overreaching restrictions on BHPH dealers proposed in SB 956, we focused less on AB 1447 and AB 1534. Though we fundamentally opposed all three bills, our BHPH coalition felt there were provisions in AB 1447 and AB 1534 that would make sense to protect consumers and would not unduly impede BHPH operations.

Ultimately, all three bills passed the

legislature by the end of August and were sent to Gov. Jerry Brown for final passage or veto. Our focus then shifted to lobbying the governor, his chief legislative counsel and the state agencies charged with providing regulatory oversight to the industry on passage.

On Saturday, Sept. 29, 2012, a day before his veto power was set to expire for this year’s legislative session, Gov. Brown vetoed SB 956 saying he was “not yet convinced the evidence merits the regulatory oversight of this bill.”

NIADA couldn’t agree more! With one stroke of the pen, SB 956 was dead. For now, we all breathed a collective sigh of relief.

As for the media and consumer advocates, they claimed victory for passing AB 1447 and 1534. NIADA is fine with that – we did not see those new laws unduly impeding BHPH operators.

After the veto, the L.A. Times reporter who wrote the original series of articles wrote, “BHPH dealers congratulated one another on Sunday, and credited a lobbying effort that had little impact on lawmakers but apparently caught the governor’s ear.”

Again, we couldn’t agree more. Clearly, our lobbying efforts were never given credence by California’s legislators because they were either unwilling or incapable of seeing what the governor saw. To provide common-sense consumer protection, you don’t have to do it at the expense of devastating small business.

In the end, Gov. Brown’s veto gave everyone what they wanted. The consumer advocates received additional protection that NIADA in fact believes BHPH dealers should be offering their customers, and the industry was shielded from excessive, business-ending rulemaking that would have ironically led to less access to affordable transportation for the very consumers the legislators and media were trying to protect.

Should similar issues arise next year, NIADA will be prepared to enter the fray to protect our members again. Most importantly, let’s not forget this would not have happened without the combined efforts of the industry’s stakeholders working together nationally and in California, marshaling our resources and making our collective voice heard on behalf of our dealers and their customers.

BY STEVE JORDANNIADA CHIEF OPERATING OFFICER

C O N T I N U E D F RO M PAG E 16

A BLUEPRINT FOR SUCCESSYOUR VOICE HEARD:

Here’s a look at the requirements of Senate Bill 956, Assembly Bill 1447 and Assembly Bill 1534:

SB 956Would have required BHPH dealers to:• Cap interest rates at 17 percent plus the fed rate

(currently one-fourth of 1 percent).• Obtain a license under the California Finance

Lenders Law and be regulated by the Department of Corporations.

• Allow an account to become 16 days past due before initiating recovery or repossession of their asset.

• Use a licensed repossession agency to physically repossess a vehicle.

• Limit repossession and recovery fees to $500 on past due accounts. Those fees could not be collected within 45 days.

AB 1447Requires BHPH dealers to:• Provide customer disclosure of the use of GPS or

starter-interrupt devices on vehicles sold.• Provide a 30-day/1000-mile limited warranty on

every vehicle sold.

AB 1534Requires BHPH dealers to:• Affix a label on any used vehicle being offered for

retail sale that states the reasonable market value of that vehicle.

Definition of BHPH DealerA “Buy Here-Pay Here” dealer is a dealer, as defined in Section 285, who is not otherwise expressly excluded by Section 241.1, and who does all of the following:(a) Enters into conditional sale contracts, within the meaning of subdivision (a) of Section 2981 of the Civil Code, and subject to the provisions of Chapter 2b (commencing with Section 2981) of Title 14 of Part 4 of Division 3 of the Civil Code, or lease contracts, within the meaning of Section 2985.7 of the Civil Code, and subject to the provisions of Chapter 2d (commencing with Section 2985.7) of Title 14 of Part 4 of Division 3 of the Civil Code.(b) Assigns less than 90 percent of all unrescinded conditional sale contracts and lease contracts to unaffiliated third-party finance or leasing sources within 45 days of the consummation of those contracts.(c) For purposes of this section, a conditional sale contract does not include a contract for the sale of a motor vehicle if all amounts owed under the contract are paid in full within 30 days.(d) The department may promulgate regulations as necessary to implement this section.The term “buy-here-pay-here” dealer does not include any of the following:(a) A lessor who primarily leases vehicles that are two model years old or newer.(b) A dealer that does both of the following:(1) Certifies 100 percent of used vehicle inventory offered for sale at retail price pursuant to Section 11713.18.(2) Maintains an onsite service and repair facility that is licensed by the Bureau of Automotive Repair and employs a minimum of five master automobile technicians that are certified by the National Institute for Automotive Service Excellence.

DETAILS OF THE CALIFORNIA BILLS

CA_1212.indd 18 11/16/12 3:07 PM

CA_1212.indd 19 11/16/12 3:08 PM


20


SOME THOUGHTS ON ADVERTISING

Advertising is a critically important aspect of running virtually any business. Advertising can also seem at times to be painfully costly.

The founder of Macy’s once quipped, “I know 50 percent of my advertising dollars are completely wasted. I just don’t know which 50 percent.”

The advent of 800-number tracking systems has certainly helped us do a little better job of measuring our advertising results, but there remains a certain air of mystery around some advertising costs. Part of our task is to shed the mystery by measuring, measuring, measuring.

Gaining clarity about some simple concepts on advertising can help clear up some of the mystery involved and help us plan how, and where, to make our advertising investments with the best odds of being successful.

Advertising is pretty simple at its core. Advertising is an invitation to do business. Imagine planning a party and not sending out invitations. It probably wouldn’t be much of a party.

Part of the key is making sure we are inviting the right people to our party. Every human being in your marketplace falls into one of four categories:

• Qualified and interested.• Not qualified but interested.• Not interested but qualified.• Not qualified and not interested.Clearly, the more of your advertising

budget you can place in front of qualified and interested car shoppers, the more effective and efficient your advertising spend will be.

What that means, for your used vehicle advertising, at least, is you can forget about demographics.

If you are selling a brand of new vehicle aimed at a particular slice of the market, demographics can be important. Very upscale vehicles are more likely to be purchased by individuals with higher educational and income achievements. But demographics don’t tell the whole story.

Finding the qualified and interested active car shopper is really an exercise in psychographics, or the analysis of behavior. In this case, psychographics refers to the specific behavior of car shopping.

That might lead one to ask, “How am I supposed to know who in my market will be waking up tomorrow thinking, ‘I’m going to go shop for a car?’ ”

While that would be very difficult – perhaps impossible – to predict, there is a way to improve your odds of finding such a person. Place your advertising message, and your inventory, where active car shoppers are going.

Fortunately, NIADA has pointed to some solutions. An important report gives us some very enlightening views – the 2008 Dealer Walk-In Traffic Study by Northwood University and AutoTrader.com, which was published in NIADA’s 2009 Used Car

P U T YO U R A DV E R T I S I N G I N F RO N T O F P E O P L E W H O A R E I N T E R E S T E D A N D Q UA L I F I E D CA R S H O P P E R S

Something for Nothing?

How many times per day, per week or per month do you get calls from insurance companies asking about your inventory?

Those calls are not to buy a vehicle but to plumb information to settle a claim.

I have been an independent auto dealer for close to 40 years and have constantly received these calls from Day 1. The insurance company wants to compare the price, miles, equipment and condition of your vehicle with one that is subject to a claim. They will promise to “send a customer your way” or “put your company name out there.” I have never, in my 40 years, sold a vehicle to a customer referred by an insurance company.

For many years, I gladly shared my hard-earned knowledge with insurance and appraisal companies. Those companies use the knowledge gained from us to settle a claim for the least amount possible.

The insurance salesman is your friend. The adjustor is not. His job is to settle the claim for the lowest possible amount, and we are unwittingly helping with the unfair treatment of his customers.

Several years ago, I stopped helping insurance companies for nothing. Every call I get starts with a request for them to pay for the information they expect for free. I have yet to get paid. They usually call another dealer and get what they want. I give advice freely to customers and fellow dealers, but no more to insurance companies.

Here is what I suggest:Demand payment for your professional advice. Your

attorney does!Think about the advice you give. Remember they

are using the information to settle a claim for the lowest possible amount, and most of the time the customer is treated unfairly.

That’s is my humble opinion and meant as an editorial comment.

BY MIKE MACAULAY

CA_1212.indd 20 11/16/12 3:08 PM


21


Industry Report.One question the study sought to answer

was: What do dealers think is working for them, and what is really working for them?

Some key points from the report.Dealers believed:• 32 percent of their traffic came from the

Internet.• 27 percent was from newspaper

advertising.• 11 percent was from classified

publications.• The remaining 30 percent came from TV,

radio, direct mail, outdoor advertising and phone books.

The reality was:• 54 percent of their traffic came from the

Internet.• 15 percent was from classified

magazines.• 13 percent was from newspapers.• 8 percent was from TV.• 4 percent was from radio.• The remaining 6 percent came from

direct mail, outdoor advertising and phone books.

That means a combination buy of Internet and a classified print product can be responsible for nearly 70 percent of the walk-in traffic generated by an advertising investment.

Why? Because when folks go to a website that has cars for sale or pick up a niche publication that has cars for sale, they are

demonstrating they are active car shoppers. Nearly all will be interested, and most will be qualified.

The Northwood/AutoTrader study also showed 27 out of every 100 walk-ins were a direct result of the advertising investment made by dealers.

Prior experience with the dealership, referral, and “drive-bys” are great, but dealers have little control over the amount of walk-in traffic that comes to them via those routes.

Advertising drives more than one-fourth of dealer walk-in traffic, and the dealer can have a lot of control over that method of driving traffic to their store.

Dealers who advertise sporadically or not at all are at risk of losing more than 25 percent of their potential buyers.

The twin pillars of advertising success are frequency and consistency. Placing an ad for two weeks, followed by two weeks of not advertising, is about the same as having your vehicles on the front line for two weeks and in a warehouse for the next two weeks.

Once you identify an advertising venue or two that specifically targets car shopping behavior, resist the impulse to jump hither and yon.

Make sure you get an 800-number tracking plan in place for all of your advertising, and watch it carefully for at least eight weeks before making a big change. Sometimes consumers will need to see you are stable in their preferred venue before they’ll trust you

with their business. One final concept: Think of how most of

the advertising you see personally gets in front of your eyes. You are enjoying a nice TV show and all of a sudden, what you want to watch is gone, and in its place is a commercial.

It is intrusive. You don’t really want to see that. You didn’t ask for it. You wouldn’t watch it if you had a choice. But there it is. Think of popup ads on the Internet, ads on the car radio or hundreds if not thousands of other examples. Intrusive advertising clearly works – at a cost.

What is the alternative?“Invitation” advertising is more powerful,

and therefore less expensive. Your audience wants to see what you are offering. They, by their behavior of clicking on a website or picking up a niche publication, are asking to see your message.

So as you plan your advertising, look for ways to be invited into the consumer’s world. Put your advertising in front of people who are interested and qualified car shoppers. Commit to your plan with frequency and consistency. And measure, measure, measure.

BY ED SUMNER ED SUMNER IS GROUP GENERAL MANAGER OF BAY CLASSIFIEDS/THE CLASSIFIED FLEA MARKET/AUTO WEEKLY.

CA_1212.indd 21 11/19/12 11:45 AM


22


Congress enacted the federal Bankruptcy Code in 1978, and it has been amended several times since. The procedural aspects are governed by bankruptcy rules and the local rules of each bankruptcy (BK) court. There are 90 BK courts – one in every federal judicial district in the country.

The court official with the decision-making power in each district is a United States bankruptcy judge. Much of BK process is administrative and conducted away from the courthouse. In Chapter 7 and 13 cases, the ones that affect dealers and lien holders, the process is carried out by a trustee.

What’s the Difference?The consumer bankruptcies that affect you

most will be filed as Chapter 7 or Chapter 13.Chapter 7 – liquidation: A chapter

7 case does not involve the filing of a plan

of repayment, as in chapter 13. Instead, the trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code.

Chapter 13 – wage earner plan: Chapter 13 offers individuals a number of advantages over Chapter 7 liquidation, including an opportunity to save their homes from foreclosure.

By filing under Chapter 13, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time, though they must still make all mortgage payments that come due during the Chapter 13 plan on time.

Chapter 13 allows individuals to reschedule secured debts, other than a mortgage for their primary residence, and

extend them over the life of the plan. That could lower the payments. Chapter 13 also has a special provision that protects third parties who are liable with the debtor on “consumer debts,” a provision than can protect co-signers.

Chapter 13 acts like a consolidation loan under which the individual makes payments to a trustee, who then distributes payments to creditors.

Any individual, even if self-employed or operating an unincorporated business, is eligible for Chapter 13 relief as long as the individual’s unsecured debts are less than $360,475 and secured debts are less than $1,081. A corporation or partnership cannot be a Chapter 13 debtor.

How Chapter 13 Works A Chapter 13 case begins by filing

a petition with the bankruptcy court

Understanding Your Customer’s Chapter 13 BankruptcyT H E F I R S T O F A T H R E E - PA R T S E R I E S O N T H E B A S I C S O F B A N K R U P T C Y P RO C E D U R E S A N D W H AT I T M E A N S T O D E A L E R S / L I E N H O L D E R S . “MONEY

MATTERS

NHTSA Warns of Counterfeit Airbags

Chinese-made counterfeit airbags have been used as replacement parts for as many as 230,000 used vehicles that have been involved in a crash over the past three years, the National Highway Traffic Safety Administration warned.

The NHTSA’s tests showed the black-market fake airbags, which look like certified original equipment parts right down to the manufacturer’s logo, either don’t deploy at all on impact or explode, sending fiery shrapnel toward the driver’s face.

The airbags are being sold to independent repair shops as original equipment, the NHTSA said. The agency has compiled a list of makes and models for which the counterfeit airbags are known to exist, but admitted it does not yet know the “full scope and scale of the problem” and said the list is likely to “evolve over time.” The list is available at www.safercar.gov.

Cars that have had their airbags replaced by independent shops or by airbags purchased online during the past three years are at risk, the NHTSA said. Owners of such vehicles are asked to contact the call center established by their car’s manufacturer to have the vehicle inspected and the airbag replaced if necessary. The list of call centers and other information is also available at www.safercar.gov.

In August, federal agents arrested a North Carolina auto mechanic and discovered more than 1,500 counterfeit airbags, according to various media reports. The case was reportedly linked to a case last year in Tennessee, in which a Chinese citizen pleaded guilty to trafficking in counterfeit airbags and was sentenced to 37 months in prison.

The NHTSA said no deaths or injuries have been tied to the counterfeit bags but said it is unclear whether police accident investigators would be able to identify a fake airbag from a real one after a wreck.

CA_1212.indd 22 11/16/12 4:02 PM


23


serving the area where the debtor has a residence. Unless the court orders otherwise, the debtor must also file schedules of assets and liabilities, a schedule of current income and expenditures, a schedule of contracts and unexpired leases, and a statement of financial affairs.

When an individual files a Chapter 13 petition, an impartial trustee is appointed to evaluate the case and serve as a disbursing agent, collecting payments from the debtor and making distributions to creditors. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.

Between 21 and 50 days after the debtor files the petition, the trustee will hold a meeting of creditors. The debtor, the trustee and those creditors who wish to attend will then come to court for a hearing on the repayment plan.

The debtor must file a repayment plan

with the petition or within 14 days after the petition is filed. The plan must be submitted for court approval and must provide for payments of fixed amounts to the trustee on a regular basis, typically biweekly or monthly. The trustee then distributes the funds to creditors according to the terms of the plan, which can offer creditors less than full payment on their claims.

If the debtor wants to keep the collateral securing a particular claim, the plan must provide that the holder of the secured claim receive at least the value of the collateral. If the obligation underlying the secured claim was used to buy the collateral – such as a car loan – and the debt was incurred within certain time frames before the bankruptcy filing, the plan must provide for full payment of the debt, not just the value of the collateral.

If the court confirms the plan, the trustee will distribute funds received under the plan “as soon as is practicable.”

Making the Plan WorkOnce the court confirms the plan,

the debtor must make the plan succeed by making regular payments to the trustee either directly or through payroll deduction, which requires living on a fixed budget for a prolonged period. While confirmation of the plan entitles the debtor to retain property as long as payments are made, the debtor cannot incur new debt without consulting the trustee.

Next: The basics of Chapter 7 filings.

Note: The information presented should not be cited or relied upon as “legal authority” and should not be used as a substitute for reference to the U.S. Bankruptcy Code and the Federal Rules of Bankruptcy Procedure.

BY ROD HEASLEY ROD HEASLEY IS EXECUTIVE VICE PRESIDENT OF PERITUS PORTFOLIO SERVICES , A SOUTHLAKE, TEXAS-BASED SPECIALTY FINANCE COMPANY THAT SPECIALIZES IN THE PURCHASING OF OPEN BANKRUPTCY ACCOUNTS.

“When an individual files a Chapter 13 petition, an impartial trustee is appointed to evaluate the case and serve as a disbursing agent, collecting payments from the debtor and making distributions to creditors.

CA_1212.indd 23 11/16/12 3:08 PM


24


A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code.

To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor can be an individual, a partnership, or a corporation or other business entity. Subject to the means test for individual debtors, relief is available under chapter 7 regardless of the amount of the debtor’s debts or whether the debtor is solvent.

The debtor has no liability for discharged debts. In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or

corporations. While an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged.

How Chapter 7 WorksA chapter 7 case begins with the debtor

filing a petition with the bankruptcy court serving the area where the individual lives. The debtor must also file schedules of assets and liabilities, a schedule of current income and expenditures, a statement of financial affairs, and a schedule of contracts and unexpired leases.

The debtor must also provide:• A list of all creditors and the amount

and nature of their claims. • The source, amount and frequency of

the debtor’s income.• A list of all of the debtor’s property.

• A detailed list of the debtor’s monthly living expenses – food, clothing, shelter, utilities, taxes, transportation, medicine, etc.

Filing a petition under chapter 7 automatically “stays” (stops) most collection actions against the debtor or the debtor’s property. In some situations, the stay is effective only for a short time. The stay requires no judicial action. As long as the stay is in effect, creditors generally cannot initiate or continue lawsuits, wage garnishments or even telephone calls demanding payments.

Between 21 and 40 days after the petition is filed, the case trustee will hold a meeting of creditors. The debtor must attend the meeting and answer questions regarding the debtor’s financial affairs and property.

The Ins and Outs of Chapter 7THE SECOND OF A THREE-PART SERIES ON THE BASICS OF BANKRUPTCY PROCEDURES AND WHAT IT MEANS TO DEALERS/LIEN HOLDERS.

CONTINUED ON NEXT PAGE

CA_1212.indd 24 11/16/12 3:08 PM


25


Role of Trustee in Chapter 7 When a chapter 7 petition is filed, the U.S.

trustee (or the bankruptcy court in Alabama and North Carolina) appoints an impartial case trustee to administer the case and liquidate the debtor’s nonexempt assets.

In the typical no-asset chapter 7 case, there is no need for creditors to file proofs of claim because there will be no distribution. If the trustee later recovers assets for distribution to unsecured creditors, the bankruptcy court will provide notice to creditors and will allow additional time to file proofs of claim.

The primary role of a chapter 7 trustee in an asset case is to liquidate the debtor’s nonexempt assets in a manner that maximizes the return to the debtor’s unsecured creditors. The trustee accomplishes this by selling the debtor’s property if it is free and clear of liens.

Chapter 7 DischargeA discharge releases individual debtors

from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor. Because a chapter 7 discharge is subject to many exceptions, debtors should consult competent legal counsel before filing to discuss the scope of the discharge.

Generally, excluding cases that are dismissed or converted, individual debtors receive a discharge in more than 99 percent of chapter 7 cases.

If a debtor wishes to keep certain secured property, such as an automobile, he or she may decide to “reaffirm” the debt. That’s an agreement that the debtor will remain liable and will pay all or a portion of the money owed, even though the debt would otherwise be discharged in the bankruptcy. In return, the creditor promises not to repossess the automobile or other property so long as the debtor continues to pay the debt.

The debtor must reaffirm a debt before the discharge is entered, and must sign a written reaffirmation agreement and file it with the court.

An individual receives a discharge for most of his or her debts in a chapter 7 bankruptcy case. A creditor may not initiate or continue any legal or other action against the debtor to collect a discharged debt.

Your customer has three options in a chapter 7 filing: surrender the vehicle, redemption or reaffirm the note.

We recommend that when you as the lien holder receive a chapter 7 notice of filing, you

THE SECOND OF A THREE-PART SERIES ON THE BASICS OF BANKRUPTCY PROCEDURES AND WHAT IT MEANS TO DEALERS/LIEN HOLDERS.

CONTINUED ON NEXT PAGE

call the customer’s attorney and ask the customer’s intention. That conversation will dictate your next move prior to discharge.

Next: Your options when a customer files bankruptcy. Note: The information presented should not be cited or relied upon as “legal authority”

and should not be used as a substitute for reference to the U.S. Bankruptcy Code and the Federal Rules of Bankruptcy Procedure.

BY ROD HEASLEY ROD HEASLEY IS EXECUTIVE VICE PRESIDENT OF PERITUS PORTFOLIO SERVICES , A SOUTHLAKE, TEXAS-BASED SPECIALTY FINANCE COMPANY THAT SPECIALIZES IN THE PURCHASING OF OPEN BANKRUPTCY ACCOUNTS.

CA_1212.indd 25 11/16/12 3:08 PM


26


Negative SEO?

When you first hear the words “Negative SEO” you probably think it sounds like an oxymoron. You know, like living dead, original copy, dark light or accidentally on purpose.

But two items that don’t seem to mesh are finally doing so.

During this election year, we have all seen the dirty tricks politicians have played on each other – negative smear campaigns and truth spinning. But don’t think those tactics are isolated to politics.

In the automotive industry, there are growing numbers of companies that like to play dirty as well, and if you are not aware of it yet, you need to continue reading.

With the constant uphill battle of your competition “flagging” your ads on Craigslist or leaving negative reviews on listing services such as Dealerrater .com, Google Places or even Merchant Circle, the war has just become a bit more complicated.

“Negative SEO” can mean any type of malicious harm intentionally caused to hurt the placement of a website’s search engine rankings. The thought process is, if you can’t become No. 1, then sabotage all of those ahead of you until you are No. 1.

Forcing one website to appear lower in the SERP (search engine rank placement) means other websites will climb higher in the SERP. That’s why negative SEO is considered a viable model by unethical website providers and online marketing companies.

The most common form of negative SEO is accomplished by linking a website to low-quality, unrelated businesses. Those are called “black-hat” links – they’re the bad guys.

Links are among the most important items when it comes to SEO (search engine optimization), but you want to make sure related industry businesses are linking into your website. Links can pass value to your website when done the right way. Links can harm your website when done the wrong way.

There are two types of linking that can be done with any website: internal linking and external linking. Internal linking is linking to resources inside your website/domain, while external linking links to web pages or other resources outside your website/domain.

A link on another website that points to your site can either have value to it and help your site or it can have a negative effect on

W E B C H AT

stay connected and stay social

L I K E U S A T N I A D A . C O M

L I K E U S A T N I A D A . C O M

CA_1212.indd 26 11/16/12 3:08 PM


27


your website and hurt you. External links that point to your site are a common way negative SEO is applied, and it is very hard to see because it all happens away from your site and is nearly invisible.

Related incoming business links: You might have heard the term “link swapping.” That’s when a business asks you to place a link to it on your website in exchange for a link from its website.

That can be beneficial if the business is in the same industry as you are. For example, if a used car dealership swaps links with an auto repair/service facility, a towing company or a tire sales business.

There is a reason for you to swap links because you are helping your customers navigate to a product or service that you might not offer that could be considered helpful. Value can be associated to both websites in that process.

Each of the links from the other website that points to your website counts as an “incoming/inbound link” to your site. Other related links that can qualify are from third-party paid listing services, social media outlets, online video channels and business directory listings.

If you are link swapping with other

businesses, you always want to make sure the links you are pointing to are valid websites that are still in business. If you are linking to an off-line website, or “dead link,” as it is called, it can easily wipe out the value of hundreds of positive links.

Disassociated business links and unnatural links: Disassociated links are considered an attempt to try to boost the ranking of your site for the sole purpose of increasing your position.

Some businesses think all links are good links. Right? Wrong! Make sure links pointing to your website are within your general industry – stay away from disassociated links, such as linking a used car dealership with, say, a flower shop, a hardware store or a movie theater.

In addition to disassociated links, there are companies referred to as “link farms” that advertise they’ll sell you hundreds or thousands of incoming/inbound links, which are referred to as “backlinks.” The companies will point those links to your website for a monthly fee.

Most of the time, the companies will claim the links they provide will be within the same industry as your business, but there is no real way to guarantee that. Google

recently released an update called the Penguin that in part identifies websites in the link farm business that offer unnatural links. If you are found on the receiving end of those links, you could have some serious issues with your online placement.

Because there is nothing to keep a competitor from signing up your website’s URL with those kinds of companies, and the links do not appear on your website, that style of attack can easily go unnoticed.

Be aware of who is linking to you. Periodically looking into what links are being directed to your website can help detect negative SEO campaigns that have been launched against your business, as well as identify any links that are unrelated to your industry.

There are many free websites you can use to check for backlinks. A good free site to check is www.ranksignals.com, which allows you to identify the total number of backlinks as well as get a page rank of the links that are pointing to your website.

BY MICHAEL D. JACKSON CEO OF AUTO SEARCH TECHNOLOGIES, INC. HE CAN BE REACHED AT (949) 608-0809 OR [email protected].

AU T O S H OW

NORTHWOOD UNIVERSITY’S 2012 AUTO SHOW DRIVES THE DREAMNorthwood University held its 2012 International Auto Show on October 5-7, drawing more than

45,000 people to the Northwood campus in Midland, Mich.The three-day event, in its 49th year, provided a learning experience for students as well as

the opportunity for over visitors to interact, view and become educated about the more than 500 product offerings presented by 600 students of all majors at Northwood University. As always, students planned, organized, executed and worked the show.

“Despite the on-and-off rainy weather throughout the weekend, attendance to the auto show was steady as people bundled up and enjoyed the show regardless,” auto show general chair Patrick Faber said.

Dr. Timothy Nash, Northwood’s vice president for strategic and corporate alliances, estimated the show’s economic impact to the Midland area at $2 million-3 million.

FOR MORE INFORMATION, CALL (989) 837-4823 OR EMAIL [email protected].

CA_1212.indd 27 11/16/12 3:08 PM


28


A DV E R T O R I A L

INDEPENDENT DEALERS NEED NEW ‘F&I MANAGER’

Having had the pleasure of serving automobile dealers for more than 50 years, we at Protective Asset Protection are committed to meeting the finance and insurance needs of our dealer customers.

Like many readers of this magazine, we place great importance on industry studies to ensure we are on top of the latest market trends – and in particular, your needs. However, we recognize selling cars is more than numbers and charts. It’s a people business.

We spend countless hours working to support dealers of all sizes and types. We’re in the car business and a lot of what we do still takes place with a meeting, a handshake, leadership and good in-store training.

More than five decades of experience and doing business the old-fashioned way has positioned Protective to exceed the expectations of our dealer customers.

In our goal to share proven dealer solutions, we turned to the largest audience – the growing group of independent auto dealers. We wanted to better understand what you really need to help further drive your F&I sales and profits.

We asked many of you from across the county questions about your operations, current selling processes and the importance of F&I to your businesses. Your feedback was informative and insightful, and aligned with many of the current successful approaches we use today.

Here is a snapshot of what we learned: When we inquired about the types of vehicles and service contracts being sold

today, we learned the average vehicle sold is 3-7 years old with 50,000-100,000 miles on it. We discovered more than 65 percent of you sell vehicle service contracts in your dealership.

When we inquired how Protective could better support you, we learned that ease of doing business is very important, followed by working with a company you can trust. On the technology front, 55 percent of you use or plan to use an electronic device such as an iPad® or a tablet device to educate your current and future consumers about F&I products.

We found that in general, consumers still rely on good, quality education from you to learn about the value of a service contract and most consumers don’t have preconceived ideas about what that value really offers them.

The study reinforces what Protective Asset Protection already does well: helping dealers make money selling F&I products.

So what is the best way to help you be more productive, drive more revenue and increase customer retention within the F&I process?

We think the answer is obvious – hire an F&I manager. No one said it was a simple solution. But an experienced F&I manager brings the knowledge and skills to provide customers with the best options and the true value of making an F&I purchase decision.

Obviously, adding to your headcount is no small task, and we asked ourselves what we could do. So we decided to “fill” your F&I position for you.

Okay, we didn’t hire an F&I manager for each independent dealer. Instead, we created “the manager.” By combining your critical F&I needs with our 50 years of experience, we built Protective’s Protection Plus Solution, designed exclusively for you.

You might have guessed your new F&I manager is not actually a person but instead is an electronic sales presentation using an iPad, or a desktop/laptop-based solution.

While our new strategy might not replace an experienced F&I manager’s know-how and sales ability, it does provide you a tool to increase service contract sales. With our new F&I solution, you have the ability to offer a vehicle service contract customized to the specific needs of your customer, all with easy-to-use technology designed to overcome objections and help close the sale.

We want you to have the closest thing we could provide to an actual F&I manager. Protective’s Protection Plus vehicle service contract and supporting web/iPad app will provide you and your dealership with the next best thing.

Protective Asset Protection looks forward to expanding our nationwide reach and working with independent dealers to introduce them to their new F&I manager. You can learn more about the technology and our goal to bring you innovative new ideas and profit-growth strategies by visiting www.newfandimanager.com.

BY RICK KURTZSENIOR VICE PRESIDENT-DEALER SERVICES FOR PROTECTIVE ASSET PROTECTION HAS MORE THAN 23 YEARS OF INDUSTRY EXPERIENCE. PROTECTIVE ASSET PROTECTION PROVIDES F&I PRODUCTS FOCUSED ON ENHANCING PROFITABILITY AND CUSTOMER SATISFACTION. FOR MORE INFORMATION, CALL 800-950-6060, EXT. 5755, EMAIL [email protected] OR VISIT PROTECTIVEASSETPROTECTION.COM.

A willingness to help – in the big picture and the small one – led to Brasher’s Northwest Auto Auction of Eugene, Ore., being selected as NIADA Auto Auction of the Year.

In addition to supporting the American Cancer Society, the National Multiple Sclerosis Society, St. Jude Children’s Hospital and several local food banks, Brasher’s Northwest and general manager Lisa Larkin went the extra mile to rally around the family of one of their employees, whose 12-year-old daughter is battling spina bifida.

Since 2007, the auction has hosted an annual golf event to help pay medical expenses for Natasha Melton, daughter of general sales manager Mark Melton, raising more than $110,000 in all – this year’s tournament raised $30,500 to help purchase a customized wheelchair and bicycle.

Larkin and fellow employee Anne Osterman gave a boost to a fundraising campaign for St. Jude Children’s Research Hospital by offering to shave their heads if the goal of $5,000 was reached. The campaign raised more than $12,000 and Larkin and Osterman submitted to the clippers.

The award was presented to Mark Melton at the National Auto Auction Association Conference last month in Orlando, Fla.

I N D U S T RY N E W S

BRASHER’S NORTHWEST GENERAL SALES MANAGER MARK MELTON (CENTER) ACCEPTS THE AUCTION OF THE YEAR AWARD FROM NAAA CHAIRMAN CHARLOTTE PYLE AND NIADA CHIEF OPERATING OFFICER STEVE JORDAN.

PICTURED ABOVE

Brasher’s Northwest Named NIADA Auction of the Year

CA_1212.indd 28 11/16/12 3:08 PM

CA_1212.indd 29 11/16/12 3:08 PM


30


BY CHIP ZYVOLOSKICHIP ZYVOLOSKI IS A SENIOR ATTORNEY FOR INDIRECT LENDING AT WOLTERS KLUWER FINANCIAL SERVICES. FOR MORE INFORMATION, VISIT WWW.WOLTERSKLUWERFS.COM/INDIRECT.

The year’s end is a time of reflection.When it comes to auto finance and

compliance challenges, the story can sound similar from year to year. There are usually a handful of new regulations facing dealers and lenders that have made a big impact on the industry over the previous 12 months.

But this year doesn’t really fit the mold. That’s because 2012 arguably hasn’t been as much about new regulation as about the additional scrutiny of regulators enforcing laws that have been in place for some time.

That has been particularly evident in the areas of state-specific forms, model language and loan documentation.

Some recent examples suggest a trend that state regulators are taking a closer look at existing motor vehicle retail sales financing authority and transaction documentation:

New Mexico: Since 2009, a New Mexico attorney general’s regulation has required creditors to provide a summary or a translation of English-language transaction documents in consumer sales negotiated in a language other than English. Its coverage is very broad and somewhat difficult to understand.

This year, the New Mexico attorney general proposed additional changes to the regulation. After receiving comments, the

AG acknowledged issues with the proposed changes and with the existing regulation itself. As a result, it pulled back the changes and repealed the existing regulation to allow for further study.

Michigan: Years ago, the Michigan Department of Licensing and Regulatory Affairs, Office of Financial and Insurance Regulation (OFIR) said bad check charges are not allowed in motor vehicle retail contracts in spite of statutory authority that seems to allow it.

This year, the OFIR published a letter saying bad check charges cannot be collected on retail motor vehicle sales contracts unless the contract contains a bad check charge provision, indirectly reversing its prior position. The OFIR now holds that bad check charges are allowed as long as they are specifically authorized in the retail contract.

Montana: The Montana late charge authority is a bit ambiguous and has been that way for many years. Because of the ambiguity, there were vastly different interpretations in the marketplace. In response to a request, the Montana Division of Banking and Financial Institutions recently published a letter clarifying its interpretation of the state statute.

The apparently heightened state scrutiny might be just a coincidence. It could also be that states are demonstrating their diligence and control to the public and to the new federal Consumer Financial Protection Bureau (CFPB).

The CFPB regulates dealers who don’t routinely assign their financing contracts to unaffiliated third parties. For the most part, that means the CFPB regulates Buy Here-Pay Here dealers. The Federal Trade Commission (FTC) continues to regulate the rest of the auto sales and finance industry.

The net result is there are two federal regulators in the auto finance marketplace. It’s possible states are more actively clarifying and enforcing their existing laws and regulations in an effort to maintain a level of control over the auto finance industry – hoping to minimize federal oversight.

In addition to reflecting on the year that has been, it’s also time to think about what might lie ahead. What will the new regulatory environment look like in 2013?

Many thought the CFPB would have done a lot of regulatory change in auto financing by now, but that hasn’t been the case. One reason is it has been focused on real estate financing practices and disclosures. The CFPB also seems to be carefully studying the consumer finance marketplace – and even consumers – to lay a solid foundation for its regulatory oversight.

The CFPB’s strategic plan for 2013-18 notes one of its strategies is to “develop and maintain an efficient fact-based approach to developing, evaluating, revising and finalizing regulations.”

“Fact-based” is a key term. We have seen the CFPB asking good questions and conducting extensive research on areas it is

tasked with overseeing. For example, the CFPB tested draft real estate disclosure documents with consumers in shopping malls.

The Dodd Frank Act requires the CFPB to research and provide policy guidance on whether arbitration provisions should be allowed in consumer credit (non-real estate) transactions. To start that process, the CFPB published a request for suggestions, data sources and strategies to study the issue.

It’s also clear the CFPB is not afraid to take a fresh approach to presenting transaction information to consumers. For example, the CFPB published a proposed rule in July regarding integrated mortgage disclosures under RESPA and the Truth in Lending Act. Leading up to the proposed rule, it published a number of drafts trying various new disclosure formats and designs.

That was one of the first significant proposed rules from the CFPB, and the planning process involved extensive research and solicitation of industry and consumer feedback. As a result, the proposed rule and explanatory materials are more than 1,000 pages.

The upside is the CFPB is trying practical, consumer-tested ways to present information so average consumers can understand key transaction terms. The downside is the volume of information in the proposal is overwhelming.

It’s hard to know when the CFPB will complete its foundation-building and begin proposing new regulations or revising existing ones that affect the consumer auto finance industry. It’s likely big changes will come to the market. It’s just unclear when.

While we’re in this waiting period, dealers might feel there are a lot of variables out of their control, but the focus needs to be on the areas you can control.

Since a number of states seem to be focused on clarifying and enforcing existing requirements, dealers should review and button down compliance documentation and processes to make sure they are satisfying those requirements.

Additionally, reviewing and tightening transaction standards and communication within the dealership is key. Make sure your sales and finance teams are describing financing terms and options, vehicle features, and add-on products and services in a correct and consistent manner. Educate your buyers and be direct and honest about each element of a transaction and the risks each party is assuming.

Investing in those areas can go a long way toward maintaining compliance now and preparing for what lies ahead.

C O M P L I A N C E OV E R D R I V E

OUT WITH THE OLD AND IN WITH THE NEW?

CA_1212.indd 30 11/16/12 3:08 PM

CA_1212.indd 31 11/16/12 3:08 PM

CA_1212.indd 32 11/16/12 3:08 PM

west coast dealer dec 2012

Documents

s t d e

definition of bhph dealers

bhph definition

t h e w e s t c o

s s o c

t i o n o f c

s i t u s

rmv sticker