west coast dealer

WEST COASTDEALER

WEST COASTDEALER

V I S I T U S A T W W W . I A D A C . O R G

ALSO Auction SecurityPLUS 10 Questions for AutoCheck

LOCAL AUTO DEALERS USED BY CLUNKERS

PRSRTStandardU.S.Postage

PAIDDALLAS,TEXASPermitNo.2079

OCTO

BER/NOVEM

BER2010

10 10Questions 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 CMDF designation complete a four-day seminar that addresses BusinessManagement,Merchandising, Financial Management, HumanResources, and Business Planning. NorthwoodUniversity provides the instructor and awards 4Continuing Education units for this course.

NEXT CLASS OCTOBER 28-30, 2010VISITNIADA.COMFORMORE INFOMATION

CERTIFIED MASTERDEALERJ PROGRAM:

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

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NATIONAL INDEPENDENTAUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM•WWW.NIADA.TVNIADA HEADQUARTERS:2521 BROWNBLVD. • ARLINGTON, TX 76006-5203PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF(800) 682-3837 OR [email protected] 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 PAIDATDALLAS, TXANDATADDITIONALOFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLI-CATIONS, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203. THE STATE-MENTSANDOPINIONS EXPRESSEDHEREINARE THOSEOF THE INDIVIDUALAUTHORS ANDDONOTNECESSARILY REPRESENT THE VIEWSOF THEWESTCOAST DEALER, IADAC, OR THE NATIONAL INDEPENDENT AUTOMOBILEDEALERS ASSOCIATION. LIKEWISE, THE APPEARANCEOF ADVERTISERS, ORTHEIR IDENTIFICATIONASMEMBERSOFNIADA, DOESNOTCONSTITUTEANENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT2010 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED.STATE MAGAZINEMGR./SALES: TroyGraff • [email protected]: MikeHarbour •[email protected]/PRODUCTIONMGR.: ChristyHaynes • [email protected]:NiemanPrinting

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

EXECUTIVE COMMITTEEDavid AahlPRESIDENTNorth Bay Auto AuctionFairfield, CA(707) [email protected]

Terry DegmetichCHAIRMANOF THE BOARDI-Deal CarsRoseville, CA(916) [email protected]

Larry LaskowskiSR VICE PRESIDENTThe Auto OutletRoseville, CA(916) [email protected]

Jerry KhanTREASURERLegacy Auto SalesSanta Rosa, CA(707) [email protected]

Rod DavisSECRETARYBrasher’s Sacramento Auto AuctionRio Linda, CA(916) [email protected]

Mark GloverVICE PRESIDENTAzteca Auto SalesSacramento, CA(209) [email protected]

Kirk ShorterVICE PRESIDENTThe Car SourceSacramento, CA(916) [email protected]

Kevin KellermanVICE PRESIDENTKGKWholesaleIrvine, CA(949) [email protected]

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

When it comes tomotor vehicle bonds, alldealer principals are not alike. At BondSource Insurance Agency, we offer a com-mon sense approach to underwriting. Abusiness’ networth is thekeyalongwith 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 [email protected].

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

BREAKINGNEWS!BREAKINGNEWS!

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].

www . i a d a c . o r g

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In this economy, it’s no wonder we’re seeing a number of independentlots close down. What’s surprising is how many of them have been staples ofour communities for several years, even decades. It saddens me to see suchgood people have to close up shop. With increasing overhead, difficulty ob-taining profitable inventory and slow consumer spending, dealers have be-come creative to stay in business. I’ve seen lots open or expand servicedepartments, add smog services and accessory shops.Another way to stay afloat is to cut expenses. This is where your IADAC

membership comes in handy.Bond Program: We’ve been listening to your calls about the rising costs

of a dealer bond. IADAC will soon be unveiling a new Preferred Providerthat specializes in selling dealer bonds. We’ve been working closely withthem to offer a competitive rate system for IADAC members. Details are com-ing soon.Auction Card: I hope you all are taking advantage of the $4,600 in free

buy/sell fees available from 23 state-wide auctions offered by the card. Remem-ber, every time you renew your dues, you get new cards. This is the benefit thatkeeps on giving! See the map for participating auctions. Even if you use the card atonly four auctions, you save $800 (or more) in buy/sell fees! (For more information onthe V.I.P. Auction Card Program, visit http://www.iadac.org/doc.asp?id=398.Preferred Providers: IADAC is always looking to add new Preferred Providers to our growing

roster. These vendors offer exclusive discounts and special perks available only to IADAC members. Goodsand services include legal counsel, forms, branding/marketing consulting, insurance, book evaluations, service war-ranties and keys. Check out the complete list at http://www.iadac.org/doc.asp?id=32.In addition to helping you save money, IADAC’s mission is to keep you informed and in compliance. This is why

the IADAC website is undergoing a transformation. The new look is modern, clean and easy to navigate. We’ll keepyou up-to-date on the latest developments by continuing our “Breaking News” segment, legislative updates and ac-cess to the magazines. But newly added is the “Ask an Expert!” section. This will give you an opportunity to haveyour questions answered by top industry experts, and discuss issues with other dealers. We hope you will find thisto be a great resource for your dealership. The new site will debut in August.Further your education and knowledge by attending IADAC’s 42nd Annual Convention, on October 22 at the

Holiday Inn Capitol Plaza in Sacramento. Reduced to a one-day format to help save on costs for those attending, wewill feature a full day of education, the annual Quality Dealer Awards Luncheon, and the infamous Auxiliary Auc-tion andAwards Banquet. For the educational portion, we’ve been listening to our member needs. Therefore, we willfeature branding and marketing sessions, case law update and an industry expert panel. Details are still underway,but a brochure should hit the streets by early September. I hope to see you there!We’re always looking to improve our membership benefits. Let us know what products, goods and services you

would like to see by contacting me at [email protected].

Not an IADAC Member??? Let Us Help You Stay AfloatFor a limited time IADAC will provide all California auto dealers with e-mail updates on critical legislation and

news that impacts your business.The Department of Motor Vehicles demands all dealerships stay in compliance with current regulations and

statutes. Don’t wait for DMV to cite you for a violation you didn’t know about. Instead, turnto IADAC to get your FREE information. Every year, legislation is aimed at auto dealers thatnegatively impact your business. Get the most current information delivered to your desk-top by signing up for the IADAC email hotline.To join the hotline, send an e-mail to [email protected], with “HOTLINE” in the sub-

ject line. Request alerts today and avoid costly penalties tomorrow. This is a limited time, freeoffer and takes only a moment to get started. Your information will not be sold or shared.

By Kacy Wallis, IADAC Executive Vice President

STAYING AFLOAT

NOTE: IADAC MEMBERS ARE AUTOMATICALLY ENROLLED IN THIS SERVICE.

T H E W E S T C O A S T D E A L E R OCTOBER/NOVEMBER 2010

T H E W E S T C O A S T D E A L E R OCTOBER/NOVEMBER 2010 w ww . i a d a c . o r g8

Most states do not require a licensefor repossessors, but California does. InCalifornia, the repossession license shouldbe with an RA number such as RA-782. Askfor a copy for your file.

The Certificate of Insurance should be onan ACCORD Form and should be for noless than $1,000,000 and contain “DirectPrimary coverage.” Unlike “Garage Keep-ers’ Legal Liability,” which will only pay offin case of the policyholder’s neglect, “DirectPrimary” will pay under most any circum-stance. Make sure the form lists coveragefor “Wrongful Repossession.” It is a goodidea to call the repossession agent’s insur-ance broker listed on the form and verifythat the policy is in good standing.

You should be concerned with workers’compensation coverage, if applicable.Court cases have held you could be re-sponsible if no such coverage exists.

Most agencies have a standard “Assign-ment Form” that will provide all the infor-mation needed to work the assignment. Themore information the agent has, the quickerhe will be able to resolve the account.Copies of credit applications, referencesheets, etc. may provide clues to the loca-tion of the vehicle.

All good agencies will provide a detailedprice list so there will be no surprises whenthe bill arrives. You should authorize a set feeand have an agreement that any additionalcharges must be authorized in writing.

The dishonesty bond is a strong sugges-tion although no law requires a repoagency to have such a bond. If the repoagency is a member of a major trade asso-ciation (ARA, NFA TFA), then the agencylikely has a minimum $1,000,000 bond.Ask for a current copy for your file.

References are critical, as you will ableto document the comments of the agency’sother clients. It will also give you an indica-tion of the quality of the agency’s clients.

Coverage area is important to know. Itwill determine how frequently the agency isgoing to chase your account and be able toget the account resolved. It also serves asnotice when you might be charged for timeand/or mileage.

Getting the IRS W-9 form upfront willsave your accounting department the end-of-year hassle trying to track down theagency’s information.

Good professional repossession agencieswill not hesitate to give you all this informa-tion. All major clients require this informa-tion before any assignments are everissued.

Ten Steps toQualify Your RepoAgentAnd StayOut of Court

1. REPOSSESSION LICENSE (IF STATE REQUIRED) ISSUED BY THEBUREAU OF SECURITY AND INVESTIGATIVE SERVICES IN THEDEPARTMENT OF CONSUMER AFFAIRS, CALIFORNIA, OR ACOMPARABLE REGULATORY BODY IN OTHER STATES.

2. CERTIFICATE OF INSURANCE WITH YOUR COMPANY LISTEDAS AN “ADDITIONAL INSURED.”

3. PROOF OF WORKERS’ COMPENSATION INSURANCE.

4. ASSIGNMENT FORM.

5. PRICE LIST.

6. DISHONESTY BOND.

7. CITY BUSINESS LICENSE.

8. REFERENCE LIST.

9. MAP/COVERAGE AREA.

10. IRS W-9 FORM.

Just as a matter of good business, you should have a file on therepossession companywith which you do business. That file shouldcontain the following:

"SERVING LOSANGELES, ORANGE, RIVERSIDE,SANBERNARDINO, & SANDIEGOCOUNTIESDAILY."

Action Auto Recovery, Southern California Repossession & Skip Tracing Experts since 1967,licensed, insured & bonded. Members of American Recovery Association. Allied Finance

Adjusters, California Associations of Licensed Repossessors & the California Credit Union Col-lectors Council. Impounds and Lien Sales can be confusing.You've come to the right place!Time and again we save our clients money from paying excessive storage and other impoundfees. Our bi-lingual recovery agents and skip tracers are second to none. Our state-of-the-artBAJA Recovery Software, combined with old school style skip tracing techniques brings fast

results. Our unique computer software aids us in keeping you fully informed and fully secure! Ouronline Client & Agent login and live color video cameras of our secure facility can be viewed24/7. Check us out on the Internet at www.repobiz.com where you will find more informationregarding our services. A quick call will get you immediate personal attention.We are proud to

be running a fleet of Licenses Plate Recognition (LPR) Recovery Vehicles – MVTrac.Action Auto Recovery are proud users of Baja Recovery Software RDN and MVTrac.

PHONE: 800-421-5528 EX 226 / FAX: 310-436-6886CONTACT: CHUCKCOWHERD - QMMANAGER / VP

EMAIL: [email protected] WEB:WWW.REPOBIZ.COM

Submitted by A. Ray Radford and Bob Dreyer,California Recoveries Company

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

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2010 NOMINAT IONS NOW BE ING ACCEPTED !

FOR MORE INFORMATION, CONTACT IADAC AT 888-315-2869 OR VISIT WWW.IADAC.ORG.

Each year, the Independent Automobile Dealers Association ofCalifornia bestows upon one of its members the Victor J. SnyderMemorial Quality Dealer of theYearAward. This is the highest awardgiven by IADAC and recognizes a dealer’s contribution to his/hercommunity, his/her association and the public he/she serves.The 2009 Quality Dealer is Larry Laskowski of TheAuto Outlet in

Roseville, California (pictured with wife Kathy).Nominations are now being accepted for the IADAC 2010 Qual-

ity Dealer Award. The award honors outstanding independent auto-mobile dealers for their exceptional performance in their businessand community life. Each year, this prestigious award has becomemore and more coveted as the standards and what it takes to achievethis award reach new levels with each recipient selected.

Quality Dealer of the Year


In the last issue of West Coast Dealer,we featured a question and answer ses-sionwith Carfax.Dealers should know thereis another option for vehicle history reports:AutoCheck.AutoCheck is a subsidiary of Ex-perian Automotive and its reports includedata for title history and mileage reports,which is very similar to their main competi-tion, CARFAX. Pricing, however, is very dif-ferent as the AutoCheck reports cost abouthalf as much as the competition.AutoCheck reports offer a vehicle scoring

system that is a valuation of sorts, based in parton maintenance history. The answer provided

by AutoCheck to Question 3 states that thescoring system is accurate, but also that com-plete service history is rarely available. Is itpossible to have incomplete records and an ac-curate score?Nowadays, the consumer has so much in-

formation at their fingertips the retail autodealer must be prepared to answer a barrageof questions buyers will bring with them.Preparation and product knowledge are veryimportant to gain a buyer’s confidence and avehicle history report should be a top priorityfor every dealer.

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AutoCheckInterviewwith IADAC1)AUTOCHECK PROVIDES A SERVICE SIMILAR TO CARFAXIN THEIR VEHICLE HISTORY REPORTS AT A SIGNIFICANTLYLOWER COST. DOES THAT MEAN ONE SHOULD EXPECTLESS DETAILED HISTORY IN AN AUTOCHECK REPORT?AutoCheck vehicle history reports offerunique data sets and services that give con-sumers more peace of mind when buying aused car than any other vehicle history re-port provider. It is lower cost, but it is amuch better value.Recent analysis from Pipal Research hasshown AutoCheck vehicle history reportshave two times the number of reported ac-cidents as CARFAX. Additionally, Au-toCheck reports accident information up to200 days faster than traditional sources.Other important features include the Au-toCheck Score, exclusive auction an-nounced data, buyback protection and acustomer service team who resolves nearly100 percent of customer concerns within24 hours.The AutoCheck accident data comes fromnationwide information sources, includingstate agencies and independent sources. TheAutoCheck database also includes accident-related title brand information from the De-partment of Motor Vehicles(salvage/rebuilt/junk titles, etc.) and datafrom other sources such as salvage auctions,auto recycling facilities and exclusive in-formation from auctions such as announcedframe damage and salvage.

2) AUTOCHECK REPORTS UTILIZE A SCORING SYSTEM.HOW IS THE RANGE AND ACTUAL SCORE DETERMINED?TheAutoCheck Score is the industry’s onlyvehicle history score; an easy-to-understand number from one to 100. Like acredit score, the AutoCheck Score distillsall the information on a vehicle history re-port into an easy to understand score formaking better decisions faster.We also provide the AutoCheck ScoreRange which shows how a vehicle’s scorecompares to that of vehicles of similar ageand class.Each fullAutoCheck report includes detailson the specific factors that influenced thatvehicle’s Score.

3) NOT ALL VEHICLE SERVICE DATA IS ALWAYS INCLUDEDON AN AUTOCHECK REPORT. DOES THAT IMPACT THE AC-CURACY OF THE AUTOCHECK ACTUAL SCORE?There are many factors that impact theAutoCheck Score, including mileage, ge-

10 QUESTIONS FOR AUTOCHECK


TOCHECK TO LAUNCH A NATIONAL CAMPAIGN THATPROCLAIMS, “GET YOUR FREE AUTOCHECK REPORT”?We are always working to increase brandawareness, however for competitive rea-sons, it would be inappropriate to revealany specific advertising and marketingplans at this time.

10) WHAT IS THE MISSION STATEMENT OF AUTOCHECK?Experian's AutoCheck is a leading vehicle

history reporting service and an indispen-sable part of the used car shopping process.

AutoCheck reports in-clude the industry'sfirst and only vehiclehistory score, empow-ering dealers and con-sumers with theconfidence and informa-tion they need to more eas-ily and quickly understand what a vehiclehistory report really says about a specificused vehicle's history.

ography, accident history and frame dam-age, to name a few.Because 100-percent complete service in-formation is so rarely available, it is not afactor included in our scoring process.The AutoCheck score is an accuratemeasure for car shoppers to help themmake an informed, intelligent vehiclepurchase decision.

4) IF AN ERROR OR DISCREPANCY IS NOTED ON A RE-PORT, CAN IT BE RECTIFIED? IF SO, HOW LONGWOULD ITTAKE TO MAKE THAT CHANGE?Accuracy of our data is our top concern, sowe encourage customers to point out any dis-crepancies so they can be rectified quickly.Our customer service hotline usually re-solves customer concerns within 24 hours.

5) DOES AUTOCHECKMAKE ANY ATTEMPT TO IDENTIFYTHE SEVERITY OF AN ACCIDENT BEFORE IT IS DOCU-MENTED ON A REPORT?When details are available, accidents maybe identified as “severe” within our reports.Another way to evaluate a vehicle isthrough theAutoCheck Score. It helps deal-ers more easily explain detailed vehicle his-tory information to their customers.

6) IF A REPOSSESSION ARRIVES AT AN AUTO AUCTIONAND THE LENDERS SECONDARY INSURANCE POLICY HASA CLAIM MADE AS A RESULT OF DAMAGE NOTED ON THECONDITION REPORT, EVEN IF THE DAMAGE IS SCRATCHESAND DOORDINGS, DOES THAT DATA SHOWUP AS AN AC-CIDENT ON AN AUTOCHECK REPORT?Damage such as scratches and door dingsare not recorded in AutoCheck vehicle his-tory reports.

7) IF A DEALER BECAME ENGAGED IN A LEGAL ISSUE DUETO INACCURACYOF AN AUTOCHECK REPORT,WOULD AU-TOCHECK PROVIDE LEGAL DEFENSE FOR THAT DEALER?ARE YOU AWARE OF ANY PENDING LITIGATION INVOLV-ING AUTOCHECK AND AUTO DEALERS?It is our corporate policy not to comment onany ongoing litigation. However, we feelour buyback protection is in place to protectboth the dealer and consumer.

8) AUTOCHECK OFFERS BUYBACK PROTECTIONON SOMEVEHICLES.WHAT DOES THATMEAN ANDHOWDOES A VE-HICLE QUALIFY FOR THAT OPTION?AutoCheck Buyback Protection safeguardsdealers and consumers against major hid-den vehicle title brands for eachAutoCheckAssured vehicle. If a hidden title brand isfound, AutoCheck refunds* 110 percent ofthe NADA Used Car Guide’s retail vehicleprice at the time of purchase, including upto $500 in after-market accessories.9) ARE THERE PLANS IN THE WORKS FOR AU-

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Car salesman Mike Macaulaysays the federal Car AllowanceRebate System, a.k.a. CARS,was a real clunker.Macaulay has been in the au-

tomobile industry for 42 years.As a used-car dealer, he has aunique perspective on theeconomy, its volatility and itseffect on his customers.“I break people’s hearts

every day, unfortunately,” saidMacaulay, owner of Car Sys-tems in Roseville, specializingin trucks and sport utility vehi-cles. He’s referring, of course, tothe economy, and the fact so manywould-be car buyers have seen theircredit take a nose dive.That makes them ineligible for cars

that don’t involve sub-prime financing,which Macaulay doesn’t offer because ofthe risk.“The demand is higher than ever, with our

economy, and with people’s credit issues—foreclosures, credit-card defaults. Peopleneed these cars. It’s the only kind of car theyqualify for, but now those cars are not avail-able,” Macaulay told SN&R.Macaulay and other independent dealers

say matters are made worse by the dearth ofaffordable used cars in the market, and thewidely touted “cash for clunkers” program.The clunkers program was a piece of fed-

eral stimulus that allowed consumers to tradein their older-model vehicles for rebates to-ward more fuel-efficient new cars betweenJuly 1 and Nov. 1, 2009.Administered by the National Highway

Traffic SafetyAdministration through theDe-partment of Transportation, the clunker pro-gram, officially called the Car AllowanceRebate System, or CARS, worked like this:Trade-in vehicles must have been manu-

factured less than 25 years before the date ofthe trade-in and have a “new” combinedcity/highway fuel economy of 18 miles pergallon or less. Clunkers also must have beenin drivable condition and been continuouslyinsured by the same owner for 12 monthsprior to the trade-in. In return, dealers wouldgive customers up to $4,500 in rebates towardthe purchase of a new car.The program required dealers to destroy all

trade-ins and prohibited them from sellingeven usable parts from the vehicles. The ideawas to get “gas guzzlers” off the road, andthat’s what happened—nearly 700,000 vehi-cles were destroyed.“I think it helped the new car industry get

out the ’09 models they needed to get rid of,”said John Brasher, owner of Brasher’s Sacra-

mento Auto Auction. “But it took [700,000]cars off the street prematurely—and hurtfamilies who could not afford to buy new carsby taking the older cars off the market, whocan only afford a cheap car—and pushedprices higher by driving demand higher, be-cause supply was already short.”Brasher was born into the family busi-

ness—his family has owned and operated theauto auction since 1958. Two or three yearsago, prior to the CARS program, Brasherauctioned 1,200-1,300 cars per week. SinceCARS, it’s dropped to about 1,000 per week,he said.The lack of supply was made worse by

CARS, he said, but actually began a couple ofyears earlier, and continues today, along withthe continued decline in new-car sales.“Fewer new cars being sold means fewer

used cars on the market,” Brasher explained.“I buy a new car today, it becomes a used cartomorrow. There are 50 million cars on theroad in the [United States]. Every year, 10million get scrapped and taken off the road.In a normal year, you’ll sell 10 million—butthen you drop to 6 million new cars sold.You’re still scrapping 10million cars, but onlyselling 6 million new cars.“And you have that happen three, four

years in a row—and then add CARS on topof that—and you get the situation we’re innow,” he said, meaning lower inventory andhigher prices.Macaulay is a harsher critic of the CARS

program, calling it a “do-nothing, feel-good,window-dressing” government program thatfailed on many levels.“I’ve raised my prices twice in the last six

months. My $5,000 car is now a$7,000 car. I just had to.And the$3,000, $4,000, $5,000 car I’dlike to stock is no longerthere—so theCARSprogramhas affected me, too.”Sacramento News &Re-

view asked officials at theDepartment of Transporta-tion about the CARS pro-gram and its effect on theused-car industry and oncredit-poor consumers. Butthe agency sent a boilerplatefrom Secretary Ray LaHood.“Cash for Clunkers was

wildly successful,” according toLaHood. “In a matter of weeks,

Americans traded in nearly 700,000gas-guzzlers for more fuel-efficient

cars, improving the environment and pro-viding a lifeline to the auto industry. Our pro-gram was a win for everyone, and mostimportantly it gave the economy a shot inthe arm at a time when we desperatelyneeded it.”While it’s true the program gave new car

dealers some $2.8 billion in trade-in money,Macaulay said even that wasn’t the boon tothe economy it was made out to be.“New car dealers were greedy,” he ex-

plained. “They were taking cars in trade-inthat still had six, 10 years of life left in them.So instead of consumers waiting for, say, an-other three years to buy a new car, theybought early, before they needed to. The sig-nificance of that is that new car dealers gotthe money now—but they still have the sameoverhead, the same number of employees tomaintain … so they really did themselves adisservice by cutting out future car buyersdown the road by getting them now. Essen-tially, they prostituted their market by takingthe quick buck.“I’ve seen plenty of new car dealers who

gave consumers the $4,500 for a car that wasactually worth $7,500. So it hurt the con-sumer in two ways, giving them less thanwhat it was actually worth, and [encourag-ing] them to buy a new car when they didn’tneed one yet. And it hurt the new-car indus-try in the long term, because it took a poten-tial buyer out of the market two, three yearsdown the road.”And the damage to consumers continued,

Macaulay said, asmanywent into debt to buynew cars, evenwith the rebate, at a timewhenthey really didn’t need a new car.“Before the CARS program, there were

cars for them. This program hurt the new carindustry for the next three years, hurt the in-dependents, hurt consumers.”

LOCAL AUTO DEALERS FEELING USED BY ‘CASH FOR CLUNKERS’ PROGRAM

By Amy Yannello, Sacramento News & Review

Photo by Lilly Fuentes-Joy


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There has been an alarming rise invandalism and theft at wholesaleauto auctions nationwide. The occa-sional pulled wire or stolen part has be-come a constant problem for auctionsecurity. Many auctions are adding uni-formed security to their staff. Video sur-veillance is helping other auctions keeptheir inventory secure.Many see this rise in crime as a sign of

the times. The slow economy seems tobring out the worst in some people.David Aahl, IADAC president and

North Bay Auto Auction general man-ager, notes his auction’s new video sys-tem has caught several crimes in action.He has removed the perpetrators fromthe auction, both now and in the future.David is, for now, hesitant to press crim-inal charges. Like all auction managers,he’s trying to run a profitable honestbusiness. It’s hard to be a policeman andrun an auction. The time and effort toprosecute these wrongdoers is adding tothe cost of doing business.The following are letters from the se-

curity chiefs of two California auctions.There are many ways to approach theseproblems. Please contact your localauction general manager with any ideasto help. You may also contact me di-rectly with input. This problem costs usall money. Let’s work together to cleanthis up!

ADESA Sacramento Auto AuctionFraud has always been a potential

issue, so we take preventing it very seri-ously. ADESA Sacramento GeneralManager Chris McGinness said, “AtADESA Sacramento, we pride ourselveswith the highest levels of customer serviceand try to balance that service with theneed for controlled access so our cus-tomers know we are doing everything wecan to ensure their property is secure.”Controlled access is how we keep our

dealers and employees safe at the auc-tion. We have 24 hour security guardsand cameras set up on the lot and in thebuildings to help ensure the wrong peo-ple don’t get in. Using surveillance cam-eras is a huge advantage; it allows us togo back and review tapes and establishfault if anything should happen. Wemake sure to have them located allaround our lot to protect our inventoryand to see who is coming in with trans-port companies on our back lot. Insideour facility the cameras allow us totrack movement coming and going atevery door. We can control who is al-

lowed to enter versus who wants toenter our auction.Auction day is always a test of our

abilities on how we secure our locationfrom people trying to sneak in, peoplestealing items from cars, damaging cars,etc. Our security guards are at both en-trances and you must have authorizedaccess to even cross our lobby floor. Se-curity patrols our lots through the entireauction making sure dealers aren’t try-ing to take something from a car or dam-age it in any way. Our security teamchecks each unit before it leaves the gatemaking sure there is nothing in the carthat shouldn’t be.Fraudulent transport companies can

be a problem for any auction, makingsure the right cars are being picked upand taken out. We make sure to verifyeach transport company with the dealerprior to any units being allowed to leavethe premises.We mark who the dealer isand the transport company on our gatepasses so our guards knowwho is author-ized to pick up units. We want to protectour dealers any way we can and makingsure we do everything possible is our toppriority here at ADESA Sacramento.

Brasher’s Sacramento Auto AuctionPrior to September 2006, Brasher’s

was focusing mostly on gate security andunauthorized access to the facility. Lotdamage was also a major concern as itwasn’t uncommon to have 5-10 dam-aged vehicles during a sale. Sale daysalso presented another concern and thatwas trying to control people sneaking orbeing snuck into the auction. Many ofthese people were drivers, mechanicsand new dealer employees the dealer didnot want to register for a number of rea-sons. There were many dealers who alsobrought in retail customers thus drivingup the prices at the block.As time went on, security concerns

changed. Fewer stereos were beingstolen but in their place, DVD playerswould be missing. Faceplates had be-come harder to match up but keys be-came more expensive and replacementsharder to find. Security had to be con-stantly alert to changes in the industry,especially with newer vehicles. Someheadrests were nearly impossible to findand, as such, became targets of thieves.High-end vehicle shift knobs could onlybe replaced at outrageous prices, andeven engine parts and computers becametargets. Airbags and catalytic converterswere also targeted. Security began to

shift its focus on stopping the loss of somany expensive parts.In the meantime, some people contin-

ued to sneak in, exacerbating the prob-lem. Making it even more difficult todetect unauthorized people was the factfaces of the customers were changing.Many old customers went out of busi-ness and a lot of dealers new to the in-dustry flowed in. Many of these newcustomers were not familiar with therules and would bring in retail customerson a regular basis. Many knew the rulesbut times were getting tough. Why takea chance buying a vehicle no one wantedwhen you could have a buyer choose oneon the spot?With business still tough and so many

inexperienced people entering the auc-tion, theft started running rampant. Inaddition, an old trick was making acomeback. Some dealers were tamper-ing with vehicles to make them runpoorly. No longer were they putting cig-arette filters in spark plug leads; instead,they were cutting injector wires or usingother high-tech means to disable one ortwo cylinders on a car. On rare occa-sions, security would stumble upon per-sons actually engaged in these illegalacts, but more often the acts were donequickly and out of sight of anyone.Reaching a critical stage, Brasher’s

decided to take a different tact by clamp-ing down on unauthorized access andcontact as many people as possible onthe lot. During the last six weeks, secu-rity has allocated additional personnel towalk the lot and ask for ID from every-one. One guard has been posted at thetest track to ID the occupants and vehi-cles using the track. As a result of theseand other security measures, dozens ofpeople have been identified as unautho-rized and removed from the property.Numerous dealers also were caught inthe act of bringing retail customers andhave lost their privileges to come to theauction for a minimum of 90 days. In afew instances, dealers were permanentlybanned from Brasher’s.The most important aspect to the new

plan is developing cooperation betweensecurity personnel and our customers.By explaining to dealers the security of-ficer’s efforts may, at times, be incon-venient, they are geared to protectingtheir assets and business. Dealers arenow communicating their concerns andobservations to security officers which,in effect, increase the effectiveness ofour efforts tenfold.

AUCTIONSECURITY…..PROBLEM OR SIGN OF THE TIMES?

ByMike Macaulay, Carsystems -

IADACMagazine andWebsite Chair

www . i a d a c . o r g

The Better Business Bureau(BBB) is warning car shoppersto beware of websites offeringtoo-good-to-be-true deals onrepossessed cars. BBB hasheard from people across the coun-try who thought they were buyingfrom a reputable dealer online butwere actually sending money toscammers posing as legitimate, al-ready-established community deal-erships.“Because scammers essentially

steal the identity and good name ofreal auto dealers, car shoppers willthink that they’re buying a carfrom a reputable business,” saidStephen A. Cox, president andCEO of the Council of Better Busi-ness Bureaus. “The truth is, they’rebeing sold a bill of goods by a co-ordinated, agile and in all likeli-hood overseas outfit of scammers.”Most recently, one Memphis

auto dealer, America Auto Sales(www.memphisautoworld.com),received more than 1,000 callsfrom consumers across the countrywho had shopped for a new car onwww.americautosales.com think-ing that it was the website of theMemphis dealership. The phonywebsite used the name, addressand contact information of the realdealer.The fraudulent site claimed to

sell repossessed cars at prices wellbelow market. Buyers were in-structed to wire a deposit — asmuch as $5,000 — to an individualrather than the company, which,according to the phony website,“helps us avoid taxes legally.” Thebalance was to be paid upon deliv-ery at the consumer’s addresswithin five days.After paying the deposit, vic-

tims called the real dealership toarrange delivery of their car. Somecustomers even showed up at thelot to pick up the cars they had“bought” on the bogus site.Similar websites have posed as

many different dealers in Col-orado, Florida, Georgia, Michigan,New Mexico and Texas. The web-sites are often taken down after afew days only to crop up shortlythereafter under a different URLaddress and under the auspices ofanother legitimate dealer.

SCAMMERS TAKINGVEHICLE DEPOSITSWITH FRAUDULENTDEALER WEBSITES


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TO BE THE BEST AT WHAT WE DO! That is themessage Manheim San Diego sends to our employees toensure we are giving 110 percent to our customers.Whether you are parking a car, working titles, detailingcars or driving the airport van, you need to do it betterthen anyone else and our customers will keep on comingback. The BIGGEST LITTLE AUCTION in SouthernCalifornia is what our customers like to call us becauseof the attention we give to detail and how we make youfeel like part of the family.Established in 1984, and relocated to its present loca-

tion in Oceanside in 1991, Manheim San Diego is lo-cated between San Diego and Orange counties inbeautiful Southern California. With an eight-lane facil-ity located on 78 acres, it is almost impossible to mis-place a car. We also have one of the finest reconditioningfacilities on theWest Coast, turning out the highest qual-ity of service in the auction industry. With weekly saleson Wednesday, we feature numerous accounts such asToyota and Lexus Financial Services, Hyundai CapitolAmerica, Hertz Corp., GSA Public Auctions, Enterpriseand National Remarketing Services, just to name a few.With sales percentages running around 70 percent eachweek, it’s no wonder the 800-plus buyers (over 250 viasimulcast each week) keep making the trip to Oceansideto purchase their cars.We also offer TRA (damaged and salvage) for those

challenged units that cannot make it across the block.With weekly sales starting at 9 a.m., there is no reasonto let those cars sit as we have established a market forthem, too. Included in our line up is a Truck and Spe-cialty sale which we offer live monthly, and weekly viaOVE.com, for those RVs, boats and motorcycles that al-ways draw a crowd.If you have not tried Manheim San Diego, I personally

invite you to take a look at the BIGGEST LITTLEAUC-TION in Southern California.

MANHEIMSAN DIEGO

IN THE

SPOTLIGHT


On July 22, President Obama signed into law the so-called “Wall Street Reform Bill.” Asreported previously, the new law exempts auto dealers from increased oversight with respectto dealer-assisted financing. To get to that result, advocacy activities over the past month in-cluded numerous meetings, strategy phone conference calls, letters, talking points, legisla-tive alerts, etc. The law does grant increased powers to the FTC regarding dealer oversight.Also, it requires coordination with the Department of Defense to ensure that Service Mem-bers and their families are treated fairly by automobile dealers. NIADA is taking an activerole in addressing this issue. Accordingly, we will continue to monitor implementation of thenew law.

“Wall Street/Consumer” Financial Services Reform Bill

IADACWELCOMESBRASHER’S SAN JOSE TOV.I.P. CARDPROGRAM!

Brasher’s San Jose held its grand opening on August 26 and IADACwas there!Located at 344B Tully Road, San Jose, CA 95111(lot location: enter at Santa ClaraFairgrounds Gate D on Monterey Road), Brasher’s San Jose is the newest in theBrasher Auction group and the newest member to the V.I.P. Auction Card Program!IADAC wishes to thank Brasher’s for its continued support and encourages dealersto visit this new auction.

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Don’t forget to checkout the latest issue ofthe CALIFORNIAFASTLANE, IADAC’selectronic publication.

Just log ontowww.iadac.org,

scroll down, and click“magazine” on theright hand side.

You’ll find even moreinformation on DMVupdates, legislation,association events

and more!

READ THECURRENT

CALIFORNIAFASTLANETODAY!

GETMORE!

FEDERALADVOCATESLOBBYINGREPORT

Federal Advocates is NIADA’s governmental advocacy partner.To read past lobbying reports, visit www.niada.com/Information/legislative.html.


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