IIADA Dealers Edge Sept/Oct 2012

Regulatory Landscape

Feeling Tougher? Y O U ’ R E N O T A L O N E

Regulatory Landscape

Feeling Tougher?

ADVERTISING OR MARKETING?LEASE HERE-PAY HERE VS. BUY HERE-PAY HERE

FULL-SERVICE AUCTIONS

inside

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

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

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

I L L I N O I S 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 NDEALER’S EDGE

SEPTEMBER/OCTOBER 2012

IL_0912.indd 1 8/13/12 2:18 PM

IL_0912.indd 2 8/13/12 2:04 PM

SEPTEMBER/OCTOBER 2012 T H E D E A L E R ’ S E D G E

3

w w w . i l - i a d a . o r g

ChairmanRandy CraseCrase Auto Connection25355 E. Ames St.Channahon, IL [email protected]

PresidentGordon TormohlenTormohlen’s Good People Automotive1800 S. Ihm Blvd.Freeport, IL [email protected]

1st Vice PresidentAnthony FerraroPayless Motorsport13449 S. Pulaski RoadRobbins, IL 60472708-388-2300 [email protected]

TreasurerLori Chignoli-CoraChignoli Auto Sales1850 Essington RoadJoliet, IL [email protected]

SecretaryEric NelsonNelson Automotive Inc.1801 S. BusseMt Prospect, IL [email protected]

Directors:Mark AlcornCarlyle Auto Sales1708 BroadwayRockford, IL [email protected]

Paul GluchowskiTurner Acceptance4454 N. Western Ave.Chicago, IL [email protected]

Melanie BrownChicago Car Auction2731 Belvidere RoadWaukegan, IL [email protected]

Amy Goodnight Lohman Companies 3901 15th St.Moline, IL [email protected]

Alex TovstanovskyPrestige Motor Works Inc.8959 Hanslik CourtNaperville, IL [email protected]

Janette PeakPJP Auto Enterprise3100 S. Douglas Spring!eld, IL [email protected]

For information on how to become a member of IIADA, please contact Bruce Eklund at 800-987-6627 or [email protected].

Board of Directors

SEPT. 12 at the Morton Auto Auction IS RENTAL FOR YOU?

OCT. 16 at the Manheim Arena Auto Auction DEALER MANAGEMENT SYSTEMS

NOV. 15 at the St. Louis Auto Auction COMPLIANCE ISSUES

DEC. 10 in Oak Park at the Training CenterREVIEW OF ALL TRAINING

You Have a Date 2012 Educational and Training Opportunities for IIADAThe educational training is hosted by the Illinois Independent Automobile Dealers Association (IIADA) and includes expert trainers in each !eld, with an opportunity to become a Certi!ed Master Dealer.

FOR INFORMATION, VISIT WWW.IL-IADA.ORG.We have created an education and training program with a mission to promote, educate and advance the independent dealer. We will make available a core of quality education and training opportunities that responds to current dealership needs.

WHAT’S NEW

MAGAZINE CONTENTS

ADVERTISERS INDEX

04 Advertising or Marketing?06 LHPH vs. BHPH10 Credit Reports: What You Need to Know12 Full-Service Auctions16 Online Reputation Affects Sales22 Compliance Overdrive

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION

NIADA HEADQUARTERS:

FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF

The Dealer’s Edge is published bi-monthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203; phone (817)640-3838. Periodicals postage paid at Dallas, TX and at additional of!ces. 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 Dealer’s Edge, the Illinois Independent Automobile Dealers Association, or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identi!cation as members of IIADA or NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2012 by NIADA Services, Inc. All rights reserved. Visit the NIADA Web site at www.niada.com. STATE MAGAZINE MGR./SALES EDITOR ART/PRODUCTION MGR. PRINTING Nieman Printing

OFFICEFOR INFORMATION ON HOW TO BECOME A MEMBER OF IIADA, PLEASE CONTACT BRUCE EKLUND

AFC .......................................................Inside Front CoverAlly ................................................................................ 11AutoTrader.com ...............................................Back CoverChase ........................................................................... 18Dodah.com .....................................................................9Dyer Auto Auction ......................................................... 21Insurance Auto Auctions ............................................. 19Lohman Companies ............................Inside Back CoverManheim.com ............................................................. 13Manheim Minneapolis ....................................................5NIADA Certi!ed ............................................................16Nowcom ...................................................................... 15Protective .......................................................................7United Acceptance ....................................................... 17Voisys ........................................................................... 22

inside

NIADA.TV Now available at www.niada.tv: Building an Effective Dealership Website with Michael D. Jackson

Tracking Devices with Jay Rose

Legislative/Regulatory Scene with Shaun Petersen and panel

Avoiding The Potholes with Ken Shilson

Feel Unstoppable in 60 Minutes with Ruben Gonzalez

NIADA Dealer 20 Groups NIADA’s new 20 Groups program is designed for NIADA’s independent dealers as they do business today in BHPH, retail or both. Take your pro!ts to the next level. Visit www.niada20groups.com

Dr. ColorChip Introduces Systems for DealersDr. ColorChip, a nationwide provider of automotive touch-up paint, has introduced a

new line of commercial automotive paint chip repair systems catered to dealership owners

looking to decrease the cost of cosmetic reconditioning of used car inventory.

Dr. ColorChip now offers an entry-level basic commercial system designed for dealers

with fewer than 40 used car sales per month. It is a customizable 30-color system that

enables small dealerships and dealers specializing in the resale of a particular make of

vehicle to effectively touch up their inventory.

Dr. ColorChip’s standard commercial system is a more comprehensive 80-color system

meant to accommodate a dealer serving from 40 to 100 cars per month. Large dealers,

FKDLQ�GHDOHUV�DQG�DXFWLRQ�KRXVHV�ZLOO�EHQH¿W�PRVW�IURP�WKH��FRORU�GHOX[H�V\VWHP��ZKLFK�covers the full spectrum of car colors.

�³7KH�RSWLRQ�RI�EULQJLQJ�WKLV�V\VWHP�LQ�KRXVH�LV�H[WUHPHO\�DWWUDFWLYH�DQG�PDNHV�JUHDW�¿QDQFLDO�VHQVH´�WR�GHDOHUVKLSV��'U��&RORU&KLS�FR�RZQHU�GHYHORSHU�'DQ�0F&RRO�VDLG��³,WV�LPSDFW�LV�LPPHGLDWH�±�GULYLQJ�FDVK�WR�WKH�ERWWRP�OLQH�DQG�JHQHUDWLQJ�KLJKHU�SUR¿WV�´)RU�PRUH�LQIRUPDWLRQ��FRQWDFW��RU�VDOHV#GUFRORUFKMS�FRP��RU�YLVLW�ZZZ�

drcolorchip.com.

V I S I T W W W. D RC O LO RC H I P. C O M .

IL_0912.indd 3 8/13/12 2:04 PM

T H E D E A L E R ’ S E D G E SEPTEMBER/OCTOBER 2012

4


:HEVWHU¶V�GH¿QHV�DGYHUWLVLQJ�DV�WKH�DFWLRQ�RI�FDOOLQJ�VRPHWKLQJ�WR�WKH�DWWHQWLRQ�RI�WKH�SXEOLF��HVSHFLDOO\�E\�SDLG�DQQRXQFHPHQW�:HEVWHU¶V�GH¿QHV�PDUNHWLQJ�DV�WKH�

SURFHVV�RU�WHFKQLTXH�RI�SURPRWLQJ��VHOOLQJ�DQG�GLVWULEXWLQJ�D�SURGXFW�RU�VHUYLFH�6LPLODU��EXW�GLIIHUHQW�-XVW�OLNH�WKH�OLIHORQJ�VWUXJJOH�EHWZHHQ�

JRRG�DQG�HYLO��ZKHWKHU�WR�SXW�UHVRXUFHV�LQWR�DGYHUWLVLQJ�WR�LQFUHDVH�WUDI¿F��DQG�WKXV�VDOHV��RU�DSSO\�HIIRUWV�WR�PDUNHWLQJ�WR�LQFUHDVH�WUDI¿F��DQG�WKXV�VDOHV��LV�D�FRQVWDQW�EDWWOH�IRU�WRGD\¶V�%X\�+HUH�3D\�+HUH�GHDOHU��$V�ZLWK�OLIH��ERWK�KDYH�WKHLU�SODFH�DQG��WR�VRPH�H[WHQW��DUH�QHFHVVDU\�'HFLGLQJ�ZKLFK�EDVNHW�\RX�VKRXOG�SXW�WKH�

PRVW�HJJV�LQ�GHSHQGV�RQ�D�IHZ�IDFWRUV�,I�WKH�JRDO�LV�WR�LQFUHDVH�RYHUDOO�PDUNHW�

VKDUH��DGYHUWLVLQJ�JHWV�PRVW�RI�WKH�HJJV��,I�EXLOGLQJ�WKURXJK�UHSHDW�DQG�UHIHUUDOV�LV�WKH�JRDO��PDUNHWLQJ�JHWV�WKH�HJJV��$QG�IRU�WKRVH�ZDQWLQJ�WKH�EHVW�RI�ERWK�ZRUOGV��WKH�HJJV�VKRXOG�EH�VSOLW�HTXDOO\�EHWZHHQ�WKH�WZR�EDVNHWV�:KHQ�LW�FRPHV�WR�WKH�DGYHUWLVLQJ�EDVNHW��DV�

ZLWK�WKH�PDUNHWLQJ�EDVNHW��KRZ�WKH�HJJV�DUH�GLVWULEXWHG�ZLWKLQ�SOD\V�DQ�LQWHJUDO�SDUW�LQ�WKH�RYHUDOO�HIIHFWLYHQHVV�7KHUH�DUH�IRXU�PDLQ�W\SHV�RI�DGYHUWLVLQJ�

PHGLD�WKDW�VHHP�WR�EH�WKH�PRVW�HIIHFWLYH�IRU� WKH�%+3+�LQGXVWU\��WHOHYLVLRQ��UDGLR��,QWHUQHW�DQG�SULQW�7HOHYLVLRQ�VHHPV�WR�EH�WKH�PRVW�SRSXODU�

DPRQJ�%+3+�GHDOHUV��7KH�NH\V�WR�HIIHFWLYH�WHOHYLVLRQ�DGYHUWLVLQJ�DUH�QRW�RQO\�EHLQJ�RQ�WKH�ULJKW�VWDWLRQV��EXW�DOVR�RQ�WKH�ULJKW�SURJUDPV�DW�WKH�ULJKW�WLPHV�7KDW¶V�HVSHFLDOO\�WUXH�ZKHQ�UXQQLQJ�

FRPPHUFLDOV�RQ�ORFDO�VWDWLRQV��+DYLQJ�D�ODUJH�QXPEHU�RI�FKHDS�VSRWV�DSSHDULQJ�EHWZHHQ�PLGQLJKW�DQG��D�P��ZLOO�OLNHO\�RQO\�EH�VHHQ�E\�D�VHOHFW�IHZ��ZKR�PLJKW�QRW�EH�\RXU�LGHD�RI�WKH�IHZ�\RX�ZDQW�WR�VHOHFW�,Q�PDUNHWV�ZKHUH�VDWHOOLWH�VHUYLFH�LV�

SURPLQHQW��ORFDO�VWDWLRQV�DUH�WKH�EHVW�EHW��$JDLQ��SLFN�WKH�VWDWLRQ�RU�VWDWLRQV�WKDW�RIIHU�SURJUDPPLQJ�\RXU�FXVWRPHUV�DUH�ZDWFKLQJ��$�VSRW�DLULQJ�GXULQJ�-XGJH�-XG\�ZLOO�SUREDEO\�SURGXFH�PRUH�EXVLQHVV�WKDQ�WKH�VDPH�VSRW�DLULQJ�GXULQJ��0LQXWHV.,Q�PDUNHWV�ZKHUH�FDEOH�VHUYLFH�LV�PRUH�

SURPLQHQW��WKHUH�LV�XVXDOO\�PRUH�EDQJ�IRU�WKH�EXFN��0RVW�FDEOH�SURYLGHUV�RIIHU�SDFNDJHV�RI�FKDQQHOV�LQ�ZKLFK�DQ\�FRPELQDWLRQ�RI�FKDQQHOV�

RIIHUHG�FDQ�EH�FKRVHQ�$V�ZLWK�ORFDO�VWDWLRQV��WLPLQJ�DQG�SURJUDP�

VHOHFWLRQ�DUH�NH\��$�VSRW�DLULQJ�GXULQJ�8OWLPDWH�8)&�)LJKW�1LJKW�LV�OLNHO\�WR�SURGXFH�PRUH�WKDQ�WKH�VDPH�VSRW�GXULQJ�6SRUWV&HQWHU��$V�ZLWK�DOO�WHOHYLVLRQ�DGYHUWLVLQJ��FKRRVH�SURJUDPPLQJ�DQG�WLPHV�WKDW�¿W�\RXU�FXVWRPHUV¶�YLHZLQJ�KDELWV�� QRW�\RXUV�5DGLR�LV�WKH�QH[W�DV�IDU�DV�SRSXODULW\��$V�ZLWK�

WHOHYLVLRQ��SLFN�WKH�WLPHV�DQG�VWDWLRQV�WKDW�¿W�\RXU�FXVWRPHUV¶�OLVWHQLQJ�KDELWV��$�VLPSOH�ZD\�WR�JDXJH�WKDW�LV�E\�PDNLQJ�QRWH�RI�ZKDW�VWDWLRQV�DUH�SURJUDPPHG�LQWR�WKH�UDGLR�ZKHQ�D�YHKLFOH�LV�WUDGHG�LQ��RU�QRWLQJ�ZKLFK�VWDWLRQ�WKH�FXVWRPHU�WXUQV�RQ�GXULQJ�D�WHVW�GULYH��'RLQJ�WKDW�FRVWV�QRWKLQJ�DQG�WHQGV�WR�EH�PRUH�UHOLDEOH�WKDQ�H[SHQVLYH�UDGLR�VXUYH\V�8VH�RI�WKH�,QWHUQHW�KDV�SLFNHG�XS�GUDVWLFDOO\�

LQ�WKH�SDVW�\HDU��*RQH�DUH�WKH�GD\V�ZKHQ�RQO\�ELJ�%+3+�GHDOHUV�KDG�ZHEVLWHV�±�ZHEVLWHV�KDYH�EHFRPH�WKH�UXOH��QRW�WKH�H[FHSWLRQ�7KH�,QWHUQHW�LV�SURYLQJ�WR�EH�WKH�EHVW�ZD\�

WR�UHDFK�WKH�QHZ�FUHGLW�FKDOOHQJHG�FXVWRPHU�±�WKH�FXVWRPHU�ZKR�SUHYLRXVO\�UHFHLYHG�EDQN�¿QDQFLQJ�EXW�QRZ��GXH�WR�HFRQRPLF�FKDOOHQJHV��PXVW�VHHN�DOWHUQDWH�¿QDQFLQJ�7KDW�FXVWRPHU�KDV�D�WHQGHQF\�WR�EH�D�ZHE�

VKRSSHU��VR�QRW�RQO\�KDYLQJ�D�ZHEVLWH��EXW�DQ�HIIHFWLYH�RQH�LV�SDUDPRXQW�WR�FDSWXULQJ�KLP��-XVW�WR�SXW�,QWHUQHW�XVDJH�LQ�SHUVSHFWLYH��D�UHFHQW�VWXG\�E\�$XWR7UDGHU�DQG�WKH�1DWLRQDO�$OOLDQFH�RI�%+3+�'HDOHUV�UHYHDOHG��SHUFHQW�RI�FXVWRPHUV�LQ�WKH�%+3+�PDUNHW�VXUYH\HG�KDG�GRQH�VLJQL¿FDQW�UHVHDUFK�RQOLQH�SULRU�WR�SXUFKDVLQJ��2XU�FXVWRPHUV�DUH�RQOLQH��$W�OHDVW��SHUFHQW�RI�WKHP��DQ\ZD\�/DVW�RQ�WKH�DGYHUWLVLQJ�OLVW�LV�SULQW��:KLOH�

SULQW�KDV�EHHQ�D�VWDSOH�IRU�WKH�QHZ�FDU�LQGXVWU\��LW�KDVQ¶W�SURGXFHG�WKH�VDPH�VXFFHVV�IRU�%+3+�GHDOHUV��%HVLGH�WKH�FRVW�IDFWRU��RYHUDOO�FLUFXODWLRQ�LV�VXEVWDQWLDOO\�GRZQ��DV�ZLWQHVVHG�E\�VRPH�YHU\�SURPLQHQW�QHZVSDSHU�FORVLQJV�UHFHQWO\�±�WKDQNV�LQ�SDUW�WR�WKH�HPHUJHQFH�RI�WKH�,QWHUQHW�)RU�%+3+��ZKDW�DUH�NQRZQ�DV�³WKURZDZD\V´�

±�IUHH�SXEOLFDWLRQV�IRXQG�DW�WKH�ORFDO�JURFHU\�VWRUH��VXFK�DV�7KH 7KULIW\�1LFNHO and Star 6KRSSHU�±�VHHP�WR�EH�PRVW�HIIHFWLYH��%LOOERDUGV�FDQ�DOVR�EH�FODVVL¿HG�LQ�WKLV�FDWHJRU\��EXW�DV�ZLWK�PRVW�WKLQJV�LQ�EXVLQHVV��ORFDWLRQ�LV�WKH�NH\�:KHQ�LW�FRPHV�WR�WKH�PDUNHWLQJ�EDVNHW��D�

IHZ�PHWKRGV�KDYH�SURYHQ�HIIHFWLYH�IRU�%+3+�

GHDOHUV��LQFOXGLQJ�UHSHDW�DQG�UHIHUUDO�SURJUDPV��SURPRWLRQV��JLYHDZD\V�DQG�WKH�,QWHUQHW�� $OO�%+3+�GHDOHUV�VKRXOG�KDYH�VRPH�HJJV�LQ�WKLV�EDVNHW�7KH�PRVW�SRSXODU�IRUP�RI�PDUNHWLQJ�LV�

UHSHDW�DQG�UHIHUUDO�SURJUDPV��6RPH�H[DPSOHV�RI�UHSHDW�SURJUDPV�DUH�ORZHU�LQWHUHVW�UDWHV��ORZHU�GRZQ�SD\PHQWV�DQG�D�IUHH�YHKLFOH�DIWHU�D�FHUWDLQ�QXPEHU�RI�YHKLFOHV�KDYH�EHHQ�SXUFKDVHG��5HIHUUDO�SURJUDPV�LQFOXGH�FDVK�IRU�HDFK�FXVWRPHU�UHIHUUHG��VFUDWFK�RII�FDUGV�ZLWK�YDU\LQJ�UHZDUGV�IRU�HDFK�FXVWRPHU�UHIHUUHG�DQG�D�IUHH�YHKLFOH�DIWHU�D�FHUWDLQ�QXPEHU�RI�UHIHUUDOV�:LWK�WKH�FXUUHQW�VWDWH�RI�WKH�DXWR�LQGXVWU\��

%+3+�GHDOHUV�DUH�H[WHQGLQJ�WKHLU�UHIHUUDO�SURJUDPV�WR�QHZ�FDU�GHDOHUV�WR�FDSLWDOL]H�RQ�WKH�ODFN�RI�IXQGLQJ�DYDLODEOH��7KRVH�WHQG�WR�EH�D�OLWWOH�PRUH�FRVWO\��EXW�DUH�ZRUWK�LW�DV�WKH�FXVWRPHUV�WXUQHG�GRZQ�DUH�GH¿QLWHO\�LQ�WKH�PDUNHW�WR�EX\�3URPRWLRQV�DQG�JLYHDZD\V�DUH�EHFRPLQJ�

PRUH�DQG�PRUH�SUHYDOHQW�DQG�DUH�SURYLQJ�WR�EH�HIIHFWLYH��7KH\�LQFOXGH�HYHU\WKLQJ�IURP�GUDZLQJV�IRU�FDVK�RU�JLIW�FHUWL¿FDWHV�WR�LQFHQWLYL]LQJ�RQ�WLPH�SD\PHQWV�WR�SURPRWLRQV�LQ�ZKLFK�SD\LQJ�RII�D�YHKLFOH�LV�WKH�JUDQG�SUL]H��)LYH�\HDUV�DJR��RQO\�D�KDQGIXO�RI�%+3+�GHDOHUV�ZHUH�GRLQJ�DQ\�RI�WKRVH��1RZ�YHU\�IHZ�GHDOHUV�DUHQ¶W�LQYROYHG�LQ�WKDW�W\SH�RI�PDUNHWLQJ�7KH�,QWHUQHW�KDV�EHFRPH�D�JRRG�PDUNHWLQJ�

VRXUFH�DV�XVDJH�KDV�LQFUHDVHG�LQ�WKH�ODVW�IHZ�\HDUV��:KHUH�RQFH�LW�VHHPHG�YHU\�IHZ�%+3+�FXVWRPHUV�KDG�DFFHVV�WR�WKH�ZRUOGZLGH�ZHE��LW�QRZ�VHHPV�MXVW�DERXW�DOO�GR�2QOLQH�SD\PHQWV�DQG�RQOLQH�DSSOLFDWLRQ�

RSWLRQV�DUH�WKH�WZR�PRVW�SUHYDOHQW�ZHE�RIIHULQJV��'HDOHUV�DUH�DOVR�WDNLQJ�DGYDQWDJH�RI�WKHLU�ZHEVLWHV�WR�WHOO�WKHLU�VWRU\�±�D�FKDQFH�WR�H[SODLQ�VRPH�EDVLF�SROLFLHV�DQG�SURFHGXUHV�DQG�VHW�FXVWRPHUV¶�PLQGV�DW�HDVH�WKDW�WKHLU�FUHGLW�KLVWRU\�LV�XQGHUVWRRG�$GYHUWLVLQJ�DQG�PDUNHWLQJ�SOD\�YDOXDEOH�UROHV�

LQ�EXLOGLQJ�DQG�PDLQWDLQLQJ�D�VXFFHVVIXO�%+3+�RSHUDWLRQ��DQG�ERWK�RI�WKRVH�EDVNHWV�QHHG�VRPH�HJJV��-XVW�UHPHPEHU��ERWK�VKRXOG�EH�JHDUHG�WR�\RXU�FXVWRPHU�EDVH��QRW�\RX��

BY BRENT CARMICHAELEXECUTIVE CONFERENCE MODERATORNCM ASSOCIATES [email protected]

T H E Y ’ R E N O T N E C E S SA R I LY O N E A N D T H E SA M E

Advertising or Marketing?

IL_0912.indd 4 8/13/12 2:04 PM

IL_0912.indd 5 8/13/12 2:04 PM


6


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

LHPH vs. BHPH: Should My Dealership Switch?In recent years, the Lease Here-Pay

+HUH��/+3+��PRGHO�KDV�JHQHUDWHG�some buzz in the world of subprime auto

sales – and for good reason.

LHPH is an offshoot of the Buy

+HUH�3D\�+HUH��%+3+��FRQFHSW��EXW�LW�involves a dealer retaining the title to

each vehicle and charging usage fees to

customers. While the difference might

VHHP�VXEWOH�DW�¿UVW��LW�FDQ�UDGLFDOO\�change how the vehicle transaction is

PDQDJHG��WD[HG�DQG�UHJXODWHG�Among the advantages of LHPH:

�'HIHUUHG�VDOHV�WD[��$�IHGHUDO�LQFRPH�WD[�GHGXFWLRQ�IRU�depreciation of your assets.

��,W�GRHVQ¶W�UHTXLUH�D�UHODWHG�¿QDQFH�FRPSDQ\��5)&��Less burdensome regulations.

�Faster repossession times.

� Vehicles can’t be claimed in a

bankruptcy.

Probably the most commonly cited

advantage of switching to a lease

SURJUDP�LV�WKH�DELOLW\�WR�GHIHU�VDOHV�WD[�payment on your vehicles. Instead of

SD\LQJ�VDOHV�WD[�XS�IURQW�±�ORQJ�EHIRUH�you’ve received all of the customer’s

money – you’re allowed to pay the sales

WD[�LQ�LQVWDOOPHQWV��HYHU\�WLPH�\RXU�customer pays you. That lessens your

risk of losing money when a customer

GHIDXOWV��DQG�LW�PDNHV�FDVK�ÀRZ�PRUH�even and manageable.

George Klinke, vice president of

business development for the San Diego-

based company LHPH, LLC, called that

the greatest advantage of the model.

³7KHUH�DUH��VWDWHV�ZKHUH�WKHUH¶V�D�UHDO�FDVK�ÀRZ�LQFHQWLYH�´�.OLQNH�VDLG��“When you buy a car in California,

\RX�SD\�DQ��SHUFHQW�VDOHV�WD[�RQ�WKDW�YHKLFOH��2Q�D��FDU��you’re paying $1,750. That’s money

that comes out of the dealer’s or the

FRQVXPHU¶V�SRFNHW�WRGD\�´But in California and 31 other states,

GHDOHUVKLSV�FDQ�SD\�WKH�VDOHV�WD[�RQ�each vehicle as payments are collected,

rather than at the lease’s inception.

Additionally, lessors can collect a

VHFXULW\�GHSRVLW��ZKLFK�LV�QRW�VXEMHFW� WR�WD[DWLRQ�

“This is a pool of money where if there

DUH�RWKHU�H[SHQVHV�WKDW�FRPH�XS�LQ�WKH�lease, the security deposit can be applied

DJDLQVW�WKRVH�´�.OLQNH�VDLG�Unless state law mandates otherwise,

WKH�RQO\�XS�IURQW�WD[�RQ�D�OHDVH�LV�SDLG�on the cap cost reduction.

For years, BHPH dealers have

DYRLGHG�LQFRPH�WD[HV�RQ�³SKDQWRP�LQFRPH´�WKURXJK�WKH�XVH�RI�D�UHODWHG�¿QDQFH�FRPSDQ\��$Q�5)&�LV�D�OHJDOO\�separate corporation an auto dealership

HVWDEOLVKHV�WR�KDQGOH�¿QDQFLQJ��RIWHQ�IRU�FXVWRPHUV�ZKR�KDYH�GLI¿FXOW\�REWDLQLQJ�credit from traditional lenders.

Usually, the dealership sells the note

from each vehicle transaction to its

RFC at a discount, eliminating most

RI�WKH�GHDOHUVKLS¶V�SUR¿W�RQ�WKH�VDOH��ZKLFK�ZRXOG�KDYH�EHHQ�WD[DEOH�LQFRPH�even though no payments had yet been

collected from the consumer.

The RFC’s income on the note

SXUFKDVH��KRZHYHU��LV�WD[HG�DV�WKH�payments are collected, avoiding a large

LQFRPH�WD[�RQ�SUR¿WV�WKDW�KDYHQ¶W�EHHQ�earned yet and creating a substantial

FDVK�ÀRZ�DGYDQWDJH��,I�H[HFXWHG�FRUUHFWO\��WKLV�VHWXS�LV�

entirely legal. The IRS has even written

D�JXLGH�IRU�LW��DYDLODEOH�DW�ZZZ�LUV�JRY�EXVLQHVVHV�DUWLFOH��LG ��KWPO��%XW�WKH�,56�DOVR�H[DPLQHV�5)&V�carefully for evidence that they’re

substantive businesses that remain at

³DUP¶V�OHQJWK´�IURP�GHDOHUVKLSV��UDWKHU�than thinly disguised shell corporations.

One small misstep could place you in

line for an audit.

For dealers wanting to avoid this

FRPSOLDQFH�KHDGDFKH�DQG�WKH�GLI¿FXOW\�

of establishing a legitimate RFC, LHPH

is an attractive option.

%HFDXVH�RI�WKH�LQKHUHQW�WD[�advantages of leasing, it is not necessary

WR�KDYH�D�UHODWHG�¿QDQFH�FRPSDQ\�WR�handle LHPH deals – though dealers

may still choose to keep their RFCs as

a buffer against bad publicity, lawsuits

DQG�¿QDQFLDO�ULVN�Because the dealer is the lessor

and therefore the owner of the asset

�YHKLFOH��KH�FDQ�FODLP�GHSUHFLDWLRQ�over the term of the lease based on IRS

JXLGHOLQHV�DQG�XVH�LW�DV�DQ�LQFRPH�WD[�GHGXFWLRQ��UHGXFLQJ�WKH�RYHUDOO�WD[�ELOO��

Jason Berger, managing partner of AK

Acceptance, an RFC in Pittsburgh, said

LHPH deals are not constrained by the

tougher regulatory requirements that

affect BHPH dealers.

At the federal level, LHPH deals fall

XQGHU�WKH�OHVV�UHVWULFWLYH�5HJXODWLRQ�0�rules that govern auto leasing, rather

than the notoriously tough Regulation Z

rules that govern auto sales. Under Reg

0��D�GHDOHU�LV�QRW�REOLJDWHG�WR�GLVFORVH�an annual percentage rate because there

LV�QR�LQWHUHVW�UDWH�LQ�D�OHDVH�±�MXVW�D�³UHQW´�RU�³OHDVH´�FKDUJH�

The lack of an interest rate also means

you are is not encumbered by state

usury limits. You can impose mileage

overage charges to protect the value of

the vehicle. And if the lessee declares

bankruptcy after starting an LHPH deal,

he won’t be able to avoid repossession

because he never had ownership of the

vehicle.

For the same reason, if a lessee

breaches the contract, there’s no

mandatory grace period to comply with

for repossessions.

³:H�SXOO�WKH�WULJJHU�IDVWHU�´�%HUJHU�said, noting dealerships can technically

repossess a vehicle if a payment is even

one day late – though that might not

be a great way to build goodwill in the

T H E B E N E F I T S FO R T H E D E A L E R , R F C A N D T H E C U S T O M E R A R E R E A L LY C O M P E L L I N G .

IL_0912.indd 6 8/13/12 2:04 PM

IL_0912.indd 7 8/13/12 2:04 PM


8


FRPPXQLW\��³0\�WDUJHW�WXUQDURXQG�WLPH�LV��GD\V�IURP�WKH�WLPH�RI�GHIDXOW�>WR�when the car is available to lease again].

With a loan, we’d usually let it go a little

ELW�ORQJHU�´�LHPH has some appeal for

consumers, too. Because they aren’t

paying for full, lifetime ownership of

the vehicle, drivers can normally afford

a better quality automobile than if they

insisted on purchasing. Like the dealer,

customers can usually pay less cash up

front. And when the customer is done

with the car, he can simply return it and

get another car, or become the owner

E\�SD\LQJ�RU�¿QDQFLQJ�WKH�DJUHHG�RQ�residual value.

Klinke said given the choice,

customers should prefer to pay the

security deposit on their lease rather

than a down payment on a loan.

“If the lessee does everything

FRUUHFWO\�´�.OLQNH�VDLG��³KH�FDQ�UROO�WKDW�>VXP@�RYHU�LQWR�D�QHZ�OHDVH�RU�JHW�KLV�PRQH\�EDFN�>DW�HQG�RI�WHUP@�´0DQ\�GHDOHUV�FLWH�WKRVH�UHDVRQV�ZKHQ�

DWWHPSWLQJ�WR�H[SODLQ�WKH�ULVLQJ�QDWLRQDO�interest in the LHPH model. Berger’s

dealership partner had operated on

WKH�%+3+�PRGHO�VLQFH��EXW�QHYHU�H[SHULHQFHG�WKH�JURZWK�LW�KDV�VLQFH�LW�switched to LHPH.

“Year-over-year, I’ve seen a 73 percent

MXPS�LQ�RULJLQDWLRQV�´�%HUJHU�VDLG��³7KH�SULPDU\�UHDVRQ�IRU�WKDW�LV�OHDVLQJ�´

But before you take the plunge, you

should also consider the challenges

of LHPH.

�$Q�H[SHQVLYH�UHWUDLQLQJ�SURFHVV��It requires more advanced dealer

management software.

��Vicarious liability issues that require

contingent liability insurance.

� Less liquidity than BHPH.

As advantageous as LHPH can be, it

is not a simple change for dealerships

to make. LHPH deals require more

advanced dealership management

V\VWHPV�WKDW�FDQ�SHUIRUP�FRPSOH[�OHDVH�calculations like depreciation schedules

and payments that include rental

FKDUJHV��GHSUHFLDWLRQ�DQG�VDOHV�WD[��Those programs often cost more than

basic deal software.

Allen Lentsch, CEO of Northland

'HDOHUV�DQG�H[HFXWLYH�GLUHFWRU�RI�WKH�Northland Independent Auto Dealers

Association, said there is also some

liability risk involved.

“When you do LHPH, you own the

title of the car, so you can be held

responsible for things your customers

GR�ZLWK�LW�´�/HQWVFK�VDLG��7KDW�LQFOXGHV�causing an accident. The concept is

called vicarious liability.

To be protected against vicarious

liability and the risk of lawsuits, dealers

must purchase contingent liability

insurance, which many turnkey LHPH

solutions provide for their dealers.

The Graves Amendment, passed

E\�&RQJUHVV�LQ��ZDV�ZULWWHQ�WR�prevent unlimited vicarious liability

lawsuits, but the law has been

challenged frequently. And despite

the Graves Amendment, there is still

potential vicarious liability for the

GHDOHU�OHVVRU�XS�WR�WKH�VWDWH�PLQLPXP�¿QDQFLDO�UHVSRQVLELOLW\�OLPLWV�

Because of that risk, it’s incumbent on

dealers to make certain each lessee has

proper insurance coverage.

“We always make sure a customer

KDV�LQVXUDQFH��MXVW�DV�PXFK�DV�ZH�PDNH�VXUH�WKH\¶UH�NHHSLQJ�XS�ZLWK�SD\PHQWV�´�%HUJHU�VDLG��³:H�GLVDEOH�YHKLFOHV�LI�>D�FXVWRPHU¶V@�LQVXUDQFH�ODSVHV�´�

If you’re a BHPH dealer who sells loan

portfolios to investors, you might have

a tougher time drumming up interest in

your LHPH leases, partially because the

product is less commonly understood.

³6RPH�OHQGHUV�DUH�RSHQLQJ�XS�WR�WKLV�´�Berger said. “From what we see, there

DUH�JRLQJ�WR�EH�PRUH�LQ�WKH�QHDU�IXWXUH�´To dodge potential complications,

many LHPH dealers use consulting

organizations, such as Northland Dealers,

LHPH, LLC and Lease It Own It, to advise

them on compliance issues and provide

training materials, forms and access to

specialized insurance. The services can

assume various levels of responsibility

for a dealer’s compliance with lease

regulations.

LHPH, LLC even goes so far as to adopt

the responsibilities of the lessor, shielding

the dealership from some legal risks.

Before switching, it’s a good idea to

contact some LHPH services to learn the

different approaches and costs associated

with outsourcing LHPH implementation.

:RUNLQJ�ZLWK�H[SHUWV�RI�VRPH�NLQG�FRXOG�be the smartest way to go.

Implementing a LHPH ProgramIf LHPH sounds like the right way

forward for your business, there are a

few things you should focus on right out

of the gate.

“I would recommend to any dealer

to try to set the most accurate residual

>YDOXH@�SRVVLEOH�´�%HUJHU�VDLG��³,I�\RX� do that, you’ll get that vehicle back and

SXW�WKDW�YHKLFOH�EDFN�RQ�WKH�URDG��><RX@�can get eight years out of it and lease it

WKUHH�WLPHV�´However, dealers should also

remember the IRS imposes limits on

how low residual values can be set and

still remain a true lease.

Because dealers should keep leased

YHKLFOHV�LQ�JRRG�FRQGLWLRQ�IRU�WKH�QH[W�lessee, high-maintenance autos are not

recommended for an LHPH program. In

addition to requiring lessees to purchase

comprehensive coverage for their

vehicles, many LHPH dealers package

in a warranty or service agreement so

they’re able to keep their vehicle in

JRRG�VKDSH�ZKLOH�SUR¿WLQJ�IURP�WKH�reconditioning.

Berger said the biggest challenge

for the dealership he works with is

persuading customers – and employees

– to go along with the LHPH plan.

“Your customers need to understand

that the vehicle isn’t really an asset, it’s

DQ�H[SHQVH�IRU�WKHP�´�%HUJHU�VDLG��³$W�WKH�HQG�RI�>D�WKUHH�\HDU�OHDVH@��KRZ�PXFK�ZLOO�WKLV�YHKLFOH�DFWXDOO\�EH�ZRUWK"´

Berger recalled employees at the

dealership he works with took about

two months to get fully used to the

terminology differences between BHPH

and LHPH.

“When you have people who have

EHHQ�VHOOLQJ�FDUV�IRU��RU��\HDUV�DQG�all of a sudden you hand them a new

PRGHO��RI�FRXUVH�WKHUH¶V�D�WUDQVLWLRQ�´�he said. “But when they see how much

this helps us sell cars, they really want to

OHDUQ�LW�´To many dealers, the challenges

involved in switching to the LHPH

model are far outweighed by its rewards.

“I’ve never seen anybody switch

EDFN�´�.OLQNH�VDLG��³7KH�EHQH¿WV�IRU�WKH�dealer, RFC and the customer are really

compelling, and to switch back would

MXVW�EH�D�UHDO�KHDGDFKH�IRU�HYHU\ERG\�´�

BY ALEX BRAUNALEX BRAUN IS MARKETING MANAGER OF AUTOMANAGER, A PROVIDER OF INTEGRATED DEALER MANAGEMENT SOFTWARE, DEALER WEBSITES AND ONLINE VEHICLE MARKETING FOR MORE THAN 25 YEARS. HE CAN BE REACHED AT [email protected].

I I A D A G O L F T O U R N A M E N T - A W A R D S D A Y - T R A D E S H O W C O N T I N U E D F RO M PAG E 6 | LHPH vs. BHPH: Should My Dealership Switch?

IL_0912.indd 8 8/13/12 2:04 PM

IL_0912.indd 9 8/13/12 2:04 PM


10


I N T H E I N D U S T RYF E D E R A L T R A D E C O M M I S S I O N G U I D E ( W W W. F T C . G OV )

Credit Reports: What Information Providers Need To Know7KH�)DLU�&UHGLW�5HSRUWLQJ�$FW��)&5$��

is designed to protect the privacy of credit

report information and to guarantee

that information supplied by consumer

UHSRUWLQJ�DJHQFLHV��&5$V��LV�DV�DFFXUDWH�as possible.

If you report information about

consumers to a CRA, you are considered

D�³IXUQLVKHU´�RI�LQIRUPDWLRQ�XQGHU�WKH�FCRA. The responsibilities of information

SURYLGHUV�DUH�H[SODLQHG�KHUH��,WHPV��DQG�5 apply only to furnishers who provide

information to CRAs “regularly and in

WKH�RUGLQDU\�FRXUVH�RI�WKHLU�EXVLQHVV�´�$OO�information providers must comply with

the other responsibilities.

1. General prohibition on reporting

inaccurate information: You may

not furnish information you know

– or consciously avoid knowing –

is inaccurate. If you “clearly and

FRQVSLFXRXVO\´�SURYLGH�FRQVXPHUV�with an address for dispute notices,

\RX�DUH�H[HPSW�IURP�WKLV�REOLJDWLRQ�EXW�VXEMHFW�WR�WKH�GXWLHV�GLVFXVVHG�LQ�item 3.

:KDW�GRHV�³FOHDU�DQG�FRQVSLFXRXV´�mean? Reasonably easy to read and

XQGHUVWDQG��)RU�H[DPSOH��D�QRWLFH�EXULHG�in a mailing is not clear or conspicuous.

2. Correcting and updating

information: If you discover

you’ve supplied one or more CRAs

with incomplete or inaccurate

information, you must correct it,

resubmit it to each CRA and report

only the correct information in

the future.

3. Responsibilities after notice of a

consumer dispute from a consumer:

If a consumer writes to the address

you specify for disputes to challenge

the accuracy of any information you

furnished and if the information is,

in fact, inaccurate, you must report

only the correct information to CRAs

in the future. If you are a regular

furnisher, you will also have to

VDWLVI\�WKH�GXWLHV�LQ�LWHP��Once a consumer has given notice that

he or she disputes information, you may

not give that information to any CRA

without also telling the CRA that the

information is in dispute.

4. Responsibilities after receiving

notice from a consumer reporting

DJHQF\��,I�D�&5$�QRWL¿HV�\RX�WKDW�a consumer disputes information

you provided:

��You must investigate the dispute

and review all relevant information

provided by the CRA about the

dispute.

��<RX�PXVW�UHSRUW�\RXU�¿QGLQJV�WR� the CRA.

��If your investigation shows the

information to be incomplete

or inaccurate, you must provide

corrected information to all national

CRAs that received the information.

��You should complete these steps

within the time period the FCRA sets

for the CRA to resolve the dispute –

normally 30 days after receipt of a

dispute notice from the consumer.

If the consumer provides additional

relevant information during the

30-day period, the CRA has 15 days

more. The CRA must give you all

relevant information it gets within

¿YH�EXVLQHVV�GD\V�RI�UHFHLSW��DQG�must promptly give you additional

relevant information provided

from the consumers. If you do not

investigate and respond with the

VSHFL¿HG�WLPH�SHULRGV��WKH�&5$�PXVW�delete the disputed information from

LWV�¿OHV�5. Reporting voluntary account

closings: You must notify CRAs

when consumers voluntarily close

credit accounts. That is important

because some information users

might interpret a closed account as

an indicator of bad credit unless it

is clearly disclosed that the

consumer – not the creditor –

closed the account.

6. Reporting delinquencies: If

you report information about a

delinquent account that’s placed

IRU�FROOHFWLRQ��FKDUJHG�WR�SUR¿W�RU�ORVV��RU�VXEMHFW�WR�DQ\�VLPLODU�DFWLRQ��\RX�PXVW��ZLWKLQ��GD\V�DIWHU�\RX�report the information, notify the

CRA of the month and year of the

commencement of the delinquency

that immediately preceded your

action. That will ensure CRAs use

the correct date when computing

how long derogatory information

FDQ�EH�NHSW�LQ�D�FRQVXPHU¶V�¿OH�How do you report accounts you have

charged off or placed for collection?

$�IHZ�H[DPSOHV��A consumer became delinquent on

0DUFK��7KH�FUHGLWRU�SODFHG�the account for collection on October

��In that case, the delinquency began

RQ�0DUFK��7KH�GDWH�WKH�FUHGLWRU�placed the account for collection has no

VLJQL¿FDQFH�IRU�FDOFXODWLQJ�KRZ�ORQJ�WKH�account can stay on the consumer’s credit

report. In that case, the date that must be

UHSRUWHG�WR�&5$V�ZLWKLQ��GD\V�DIWHU� \RX�¿UVW�UHSRUW�WKH�FROOHFWLRQ�DFWLRQ�LV�0DUFK��A consumer fell behind on monthly

SD\PHQWV�LQ�-DQXDU\��WKHQ�brought the account current in June

��SDLG�RQ�WLPH�DQG�LQ�IXOO�HYHU\�PRQWK�WKURXJK�2FWREHU��EXW�thereafter made no payments. The

creditor charged off the account in

'HFHPEHU��In that case, the most recent

delinquency began when the consumer

failed to make the payment due in

1RYHPEHU��7KH�HDUOLHU�GHOLQTXHQF\�is irrelevant. The creditor must report

WKH�1RYHPEHU��GDWH�ZLWKLQ��GD\V�RI�UHSRUWLQJ�WKH�FKDUJH�RII��)RU�H[DPSOH��if the creditor charged off the account

LQ�'HFHPEHU��DQG�UHSRUWHG�WKH�FKDUJH�RII�RQ�'HF��WKH�FUHGLWRU�must provide the month and year of the

GHOLQTXHQF\�±�1RYHPEHU��±�ZLWKLQ��GD\V�RI�'HF��A consumer’s account became

GHOLQTXHQW�RQ�'HF��7KH�DFFRXQW�ZDV�¿UVW�SODFHG�IRU�FROOHFWLRQ�RQ�$SULO��&ROOHFWLRQ�ZDV�QRW�successful. The merchant placed

the account with a second collection

DJHQF\�RQ�-XQH��The date of the delinquency for

UHSRUWLQJ�SXUSRVHV�LV�'HFHPEHU��Repeatedly placing an account for

collection does not change the date the

delinquency began.

��A consumer’s credit account became

GHOLQTXHQW�RQ�$SULO��7KH�consumer made partial payments

IRU�WKH�QH[W�¿YH�PRQWKV�EXW�QHYHU�brought the account current. The

merchant placed the account for

FROOHFWLRQ�LQ�0D\��Since the account was never brought

current during the period partial

payments were made, the delinquency

that immediately preceded the collection

FRPPHQFHG�LQ�$SULO��ZKHQ�WKH�FRQVXPHU�¿UVW�EHFDPH�GHOLQTXHQW�

IL_0912.indd 10 8/13/12 2:04 PM

IL_0912.indd 11 8/13/12 2:04 PM


12


T E C H N O LO GY A N D N E C E S S I T Y E X PA N D T H E S E RV I C E S O F F E R E D BY AU C T I O N S

Back to the Basics: On the BlockAuto auctions today are full-service

operations with a growing list of options to

keep inventory rolling.

The infusion of the Internet into the

traditional auction business model has been,

DUJXDEO\��WKH�PRVW�VLJQL¿FDQW�FKDQJH�LQ�recent years.

�³7KH�,QWHUQHW�NHHSV�H[SDQGLQJ�DQG�H[SDQGLQJ�´�VDLG�&KDUORWWH�3\OH��RZQHU�RI�Capital City Auto Auction in West Virginia

and president of the National Auto Auction

$VVRFLDWLRQ��1$$$��³,�DWWHQGHG�DQ�DXFWLRQ�recently and the entire lane was not there.

7KH\�VROG�HYHU\�FDU�IURP�D�79�VFUHHQ�´ An increasing number of websites are

emerging with features allowing dealers to

shop for cars across the country without ever

OHDYLQJ�WKH�RI¿FH�IndependentAuctions.com, for instance,

KDV�PRUH�WKDQ��VHDUFKDEOH�YHKLFOHV�IURP��PHPEHU�DXFWLRQV�DQG�ERDVWV�PRUH�than 41,000 registered dealers on the site.

2Q�DQ\�JLYHQ�ZHHN�VRPH��YHKLFOHV�DUH�sold. The site contains the inventory, post-

sale reporting and account management

tools to help automotive professionals

buy, sell and research vehicles from

independently owned locations.

$'(6$��ZKLFK�RSHUDWHV��DXFWLRQV�throughout North America, has been

one of the industry leaders in embracing

online auctions.

“Our biggest news as of late was the

DFTXLVLWLRQ�RI�2SHQ/DQH�ODVW�IDOO�´�VDLG�Tom Caruso, ADESA president and CEO

and a recent inductee into the National

Independent Auto Dealers Association

Ring of Honor.

“This industry-leading technology will

KHOS�GHDOHUV�DV�WKH\�H[SDQG�WKHLU�UHDFK�outside of their local markets in the online

PDUNHW��:H�DUH�UHDOO\�H[FLWHG�DERXW�WKH�progress we are making bridging our

physical auctions and our online tool,

ADESA OpenLane, to create a better

EX\HU�H[SHULHQFH�´

Auction OptionsWhile the economic issues of the past few

years have meant fewer vehicles coming to

auction, it has forced auctions to increase

their level of service, Pyle said.

“Volumes are down for the leases and

repos, so auctions have opened up to do

PRUH�RXWVLGH�ZRUN�´�3\OH�VDLG�$XFWLRQV�KDYH�VWHSSHG�XS�ÀRRUSODQQLQJ�±�

providing the inventory loans that are

D�SULPDU\�VRXUFH�RI�¿QDQFLQJ�IRU�GHDOHUV�WR�purchase inventory to then resell, either from

the showroom or in a wholesale format.

Post-sale inspections have become an

H[SHFWHG�IHDWXUH�DW�DXFWLRQV�WR�JLYH�GHDOHUV�assurance and peace of mind for both their

in-lane and online wholesale purchases.

“A dealer purchasing a post-sale

inspection has assurance that the vehicle

purchased passed a rigorous test, was

properly represented by the seller and that

Perry’s Auto Auction guarantees that the

YHKLFOH�PHHWV�WKH�GHDOHU¶V�H[SHFWDWLRQV�´�noted an item on the website of Perry’s Auto

Auction in central Georgia.

0RVW�DXFWLRQV�ZLWK�SRVW�VDOH�LQVSHFWLRQV�follow a checklist of items that would cost

$500 or more each to repair or replace. That

includes checking the frame or unibody for

structural damage as well as checking the

paint, transmission, air conditioning system

and brakes. They also check for things like

RGRPHWHU�YHUL¿FDWLRQ��ÀRRG�LQVSHFWLRQ�DQG�emission control.

Often there’s nothing mechanically wrong

ZLWK�D�YHKLFOH�±�LW¶V�MXVW�GLUW\��%XW�WKDW¶V�OK, because many auctions are trumpeting

reconditioning packages for dealers.

At the Greater Erie Auto Auction, serving

Buffalo, N.Y., Cleveland and Pittsburgh,

D��³IXOO�GHWDLO´�FRPHV�ZLWK�DQ�H[WHULRU�ZDVK��HQJLQH�FOHDQ��H[WHULRU�EXII��LQWHULRU�clean and tire dressing. At a minimum,

they’ll wash it for $10.

Auctions also offer around-the-clock

security for safe vehicle drop-offs, car title

YHUL¿FDWLRQ�DQG�WUDQVSRUWDWLRQ�RI�YHKLFOHV�“Some of our dealers are heavily

dependent on these truckers delivering the

cars to the auctions, and over time the gas

ELOO�DGGV�XS�´�3\OH�VDLG�

Dealer Reaction5RJHU�0RQWEOHDX��RZQHU�RI�&KHOPVIRUG�

6WUHHW�$XWR�6DOHV�LQ�/RZHOO��0DVV��EX\V�cars at auction weekly. He’ll typically shell

out money for the post-sale check his local

DXFWLRQ�RIIHUV�DV�DQ�H[WUD�VHUYLFH�“Good cars are not as plentiful as they

XVHG�WR�EH�´�0RQWEOHDX�VDLG��³$�ORW�RI�SHRSOH�mask these vehicles that come through.

We need someone who can give us a

FHUWL¿FDWLRQ��3HRSOH�DUHQ¶W�DV�IRUWKULJKW�DV�ZH�ZDQW�WKHP�WR�EH�´

If the cars he brings to the auction do

QRW�VHOO��0RQWEOHDX�VDLG��KH�DSSUHFLDWHV�WKH�DXFWLRQHHUV�ZDVKLQJ�LW�EHIRUH�WKH�QH[W�scheduled date.

Stanley Thompson, owner of First Auto

Sales in Bradenton, Fla., visits the auction

DERXW�WKUHH�WLPHV�D�PRQWK�DQG�VHOOV��WR��cars per month.

“Auctions give you a greater selection at

competitive prices you can’t get anywhere

HOVH�´�7KRPSVRQ�VDLG�Still, the new lineup of auction services

KDV�QRW�H[DFWO\�ZRQ�KLP�RYHU�³:H�GR�HYHU\WKLQJ�LQ�KRXVH�´�VDLG�

7KRPSVRQ��ZKR�KDV�EHHQ�LQ�EXVLQHVV�IRU��\HDUV��³:H�NQRZ�ZKDW�ZH¶UH�GRLQJ�´

Indeed, as much as auctions keep

working to enhance their services, some

dealers would still rather do without.

In fact, some avoid auctions altogether,

choosing to get their inventory from

other sources.

Jay Iverson, manager of Carz Central

in Estherville, Iowa, is not a fan of

auctions, period.

“Other than the fact that the cars are

there, there’s not a whole lot I like about

DXFWLRQV�´�,YHUVRQ�VDLG��³7KHUH¶V�D�ORW�RI�politics involved. The rules keep changing.

7KHUH¶V�QR�FRQVLVWHQF\�´David Shoffner, owner of David Shoffner‘s

Auto Sales in Redding, Calif., visits the

auction twice a week. He likes the guarantee

that the title is always good.

“Whereas buying them off the street,

\RX�GRQ¶W�NQRZ�ZKDW�\RX¶UH�JHWWLQJ�´�Shoffner said.

0XFK�KDV�FKDQJHG�VLQFH�6KRIIQHU�VWDUWHG�VHOOLQJ�FDUV�ZLWK�KLV�GDG�LQ�WKH�HDUO\��V��He said he prefers an old-school method of

buying cars. He is not impressed with online

auctions – he’d rather go in person.

“I pretty much cherry-pick the auctions

WR�¿QG�ZKDW�,�OLNH��DQG�LW�DOORZV�PH�WR�PDNH�D�JRRG�OLYLQJ�´�6KRIIQHU�VDLG��³,�bought two or three cars from the Internet

DQG�LW�ZDV�D�KRUULEOH�H[SHULHQFH��7KH�FDUV�required mechanical work that was not

previously disclosed.

“As for me, I like to see them and touch

WKHP�¿UVW�´To be sure, online auto auctions come

with risks.

Similar to the other popular scams,

.ULVWLQ�-XGJH��H[HFXWLYH�GLUHFWRU�RI�WKH�Trusted Purchasing Alliance, a division of

WKH�QRQSUR¿W�&HQWHU�IRU�,QWHUQHW�6HFXULW\��said there are two central themes to keep

in mind when dealing with auto auction

fraud: First, if an offer seems too good to

be true it probably is, and second, never

send money to someone you have not met

in person, though that might not always be

a practical rule for dealers to follow with

online auctions.

,Q��WKH�IHGHUDO�JRYHUQPHQW¶V�,QWHUQHW�&ULPH�&RPSODLQW�&HQWHU��ZZZ�LF��JRY��UHFHLYHG��FRPSODLQWV�IURP�YLFWLPV�RI�DXWR�DXFWLRQ�IUDXG��7KH�WRWDO�¿QDQFLDO�

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

IL_0912.indd 12 8/13/12 2:04 PM

IL_0912.indd 13 8/13/12 2:04 PM


14


cost to those victims was more than $8

PLOOLRQ��ZLWK�WKH�DYHUDJH�ORVV�EHLQJ��per victim. The calls reporting the scams

averaged two per hour.

“Criminals misrepresent themselves as

either Kelley Blue Book agents, or possibly

a person moving out of town and needing to

VHOO�D�FDU�TXLFNO\�EHIRUH�WKH\�OHDYH�´�-XGJH�said. “Like other scams, the criminal sets up

a persona that helps him appear legitimate.

The price for the vehicle is usually at a great

discount, too good to pass up.

“When a buyer shows interest in the

vehicle, he is asked to send a deposit to a

third party to hold while the inspection

takes place. Unfortunately, there is no

legitimate third party. Once the scammer

collects the deposit, the victim is left

ZLWKRXW�KLV�PRQH\�RU�D�FDU�´

Auction ProjectionsThe future of auto auctions will place

a continued focus on manipulating

WHFKQRORJ\�WR�EHQH¿W�GHDOHUV�“We continue to make investments in

our auction infrastructure to facilitate

RXU�EX\HUV¶�GLYHUVH�EXVLQHVV�QHHGV�´�ADESA’s Caruso said. “That includes

more computer terminals for customers

to use, better Wi-Fi access and more

reconditioning options both presale and

post-sale. We will continue to evolve our

business to meet the demands of our

GHDOHUV�´2QH�H[DPSOH�LV�$'(6$¶V�QHZO\�UHOHDVHG�

dealer application for the iPhone.

“The app combines relevant industry

guide books, vehicle history reports and

other useful business data with the cars

UXQQLQJ�DW�RXU�DXFWLRQV�´�&DUXVR�VDLG��“The evolution of mobile technology will

FRQWLQXH�WR�VKDSH�KRZ�ZH�GR�EXVLQHVV�´The new auto auction services have put

the technology companies that develop those

services in the driver’s seat. In July, vAuto,

an Oakbrook, Ill., company specializing

in dealer support services and a wholly

owned subsidiary of AutoTrader Group Inc.,

announced the acquisition of Auction Genius,

a web-based software solution for auto

dealers buying vehicles at auction.

“This acquisition advances vAuto’s

mission to help dealers become more

HI¿FLHQW�DQG�HIIHFWLYH�XVHG�YHKLFOH�UHWDLOHUV�´�Y$XWR�IRXQGHU�'DOH�3ROODN�VDLG�

With Auction Genius, vAuto promises to

HOLPLQDWH�WKH�LQHI¿FLHQFLHV�DQG�GLI¿FXOWLHV�dealers encounter every day as they

evaluate and purchase used vehicles from

wholesale auctions.

“Today, every dealer relies on wholesale

DXFWLRQV�IRU�XVHG�YHKLFOHV�´�$XFWLRQ�

Genius president and co-founder Todd

Kinzle said. “This highly competitive

environment requires dealers to evaluate

far more vehicles than they used to, and

the time it takes to do the proper research

LV�RYHUZKHOPLQJ�´Enter Auction Genius. Kinzle says

dealers can now analyze as many as 10

times the number of vehicles and zero in

RQ�WKH�³ULJKW´�FDUV�ZLWK�VLJQL¿FDQWO\�PRUH�VSHHG�DQG�HI¿FLHQF\�

Typically dealers will use multiple

systems and tools to create used vehicle buy

lists, match the lists with cars scheduled to

be sold at wholesale online auctions and

JDWKHU�FRQGLWLRQ�PDUNHW�YDOXDWLRQ�UHSRUWV�to assess individual vehicles for potential

purchase. They also access live online

auctions through a separate system to buy

WKH�FDUV�WKDW�¿W�WKHLU�SXUFKDVH�SDUDPHWHUV��It’s a piecemeal process.

Auction Genius also integrates with a

growing list of industry partners, including

CARFAX, AutoCheck, NADA Guide Book,

Black Book, Kelley Blue Book and Galves.

Current auction integration includes

0DQKHLP�6LPXOFDVW��29(�FRP��0DQKHLP�PowerSearch, ADESA LiveBlock and

OpenLane.

BY JASON ROBERSON

I I A D A G O L F T O U R N A M E N T - A W A R D S D A Y - T R A D E S H O W C O N T I N U E D F RO M PAG E 1 2 | Back to the Basics: On the Block

M A R K E T I N G N E W S

Help Your Dealership Go for the Gold7KLQN�\RXU�VKRW�DW�OLYLQJ�OLNH�DQ�2O\PSLDQ�

HQGHG�DIWHU�\RXU�KLJK�VFKRRO�RU�FROOHJH�DWKOHWLF�FDUHHU"7KLQN�DJDLQ�6XFFHVVIXO�2O\PSLF�DWKOHWHV�HPSOR\�D�VHW�

RI�WUDLWV�DQG�WHFKQLTXHV�\RX�FDQ�VWLOO�XVH�WR�KHOS�PDUNHW�\RXU�FDU�GHDOHUVKLS��7KH�HOHPHQWV�WKDW�ZRUN�WRJHWKHU�WR�FUHDWH�SRSXODU�PHGDOLVWV��ZLWK�WKRXVDQGV�RU�PLOOLRQV�RI�SHRSOH�URRWLQJ�IRU�WKHP��FDQ�VLPLODUO\�HOHYDWH�\RXU�GHDOHUVKLS�LQ�WKH�H\HV�RI�\RXU�FXVWRPHUV�2Q�WKH�ZHEVLWH�PDUNHWLQJSURIV�FRP��9HURQLFD�

0DULD�-DUVNL�VKRZHG�KRZ�ZLQQLQJ�2O\PSLDQV¶�EHKDYLRU�UHODWHV�WR�PDUNHWLQJ��DQG�WKDW�DSSOLHV�SHUIHFWO\�WR�WKH�ZD\�\RXU�FDU�GHDOHUVKLS�FDQ�ZLQ�E\�DGRSWLQJ�WKH�VDPH�IRFXV�'RQ¶W�EHOLHYH�LW"�+HUH¶V�KRZ�\RX�FDQ�XVH�

ZKDW�ZRUNV�IRU�WKH�JROG�PHGDO�ZLQQHUV�Share your story: 7KH�SHUVRQDO�VWRU\�

EHKLQG�WKH�ZLQQHUV�RIWHQ�FUHDWHV�PDVVLYH�VXSSRUW�IRU�RQH�DWKOHWH�RU�DQRWKHU��RU�VRPHWLPHV�DQ�HQWLUH�WHDP��<RX�ZHUHQ¶W�GURSSHG�RQWR�WKLV�HDUWK�UXQQLQJ�D�VXFFHVVIXO�DXWR�GHDOHUVKLS��VR�JR�DKHDG�DQG�VKDUH�ZKDW�LW�WRRN�WR�JHW�WKHUH�(YHU\�GHDOHUVKLS�EHJDQ�ZLWK�D�OLIHORQJ�ORYH�

RI�FDUV��D�FDUHIXO�SODQ�RU�D�OHVV�WKDQ�GLUHFW�URXWH�WKDW�LQFOXGHG�IDU�ÀXQJ�DGYHQWXUHV��:KDWHYHU�WKH�VWRU\��NQRZLQJ�LW�KHOSV�SHRSOH�LGHQWLI\�ZLWK�\RX��8QGHUVWDQGLQJ�WKH�MRXUQH\�

EXLOGV�VXSSRUW�IRU�FXUUHQW�VXFFHVV��Deliver on your promises: $FWLRQV�FRXQW�

IDU�PRUH�WKDQ�ZRUGV��VR�SURYH�ZKDW�PDWWHUV�WR�\RX�ZLWK�HYHU\�HQJDJHPHQW��HYHU\�FXVWRPHU�DQG�HYHU\�VDOH��7KH�FODLPV�\RX�PDNH�DERXW�ZKDW�GLVWLQJXLVKHV�\RXU�GHDOHUVKLS�FDUU\�D�ORW�PRUH�ZHLJKW�ZKHQ�WKH\¶UH�EDFNHG�XS�LQ�WKH�LQWHUDFWLRQV�WKDW�KDSSHQ�PLQXWH�E\�PLQXWH�

Use the right tools��$�GLYHU�FDQ¶W�XVH�D�SRPPHO�KRUVH�DQG�D�J\PQDVW�GRHVQ¶W�JHW�DQ\�PLOHDJH�RXW�RI�D�SRRO��0DNH�VXUH�\RXU�PDUNHWLQJ�PHVVDJHV�JR�WR�WKH�DXGLHQFHV�WKDW�FDQ�XVH�WKHP�EHVW��<RXU�EUDQG�DQG�\RXU�PHVVDJH�VKRXOG�EH�FRQVLVWHQW��EXW�LW¶V�VPDUW�WR�FUDIW�DQG�GHOLYHU�WKH�UHOHYDQW�SRLQWV�ZLWK�ODVHU�targeting.

Details, details:�7U\�WR�WKLQN�DERXW�WKH�GHDOHUVKLS�H[SHULHQFH�IURP�D�FXVWRPHU¶V�SHUVSHFWLYH��7KH�OLWWOH�GHWDLOV�RI�HDFK�SKRQH�FDOO�RU�YLVLW�DUH�FULWLFDOO\�LPSRUWDQW�LQ�VKDSLQJ�WKH�LPSUHVVLRQ�YLVLWRUV�WDNH�DZD\�IURP�DQ\�FRQWDFW�

It’s all connected:�$XWKHQWLFLW\�PDWWHUV�HYHU\ZKHUH�\RXU�GHDOHUVKLS�KDV�D�SUHVHQFH��7KH�FXVWRPHUV�ZKR�VHHP�WR�GLVDSSHDU�DUH�VWLOO�PDNLQJ�ZDYHV�DQG�LQÀXHQFLQJ�\RXU�UHSXWDWLRQ�ORQJ�DIWHU�WKH\¶YH�OHIW�WKH�SUHPLVHV��:KDW�KDSSHQV�RQ�WKH�VKRZURRP�ÀRRU�DQG�LQ�WKH�¿QDQFH�GHSDUWPHQW�WRGD\�ZLOO�DVVXUHGO\�EH�UHÀHFWHG�VRPHGD\��VRPHKRZ��LQ�D�FRQYHUVDWLRQ�RQOLQH�RU�LQ�SHUVRQ�ZKHUH�\RX�GRQ¶W�KHDU�LW�

You can only run today’s race today: /HWWLQJ�JR�RI�WKH�SDVW��ZLQV�DQG�ORVVHV�DOLNH��LV�WKH�EHVW�ZD\�WR�IUHH�XS�HQHUJ\�WR�IRFXV�RQ�WRGD\¶V�FKDOOHQJHV��/HDUQ�IURP�ZKDW�ZRUNHG�DQG�ZKDW�GLGQ¶W��EXW�JUHHW�HDFK�QHZ�FXVWRPHU�ZLWK�IUHVK�DQG�IXOO�LQWHQW�WR�FUHDWH�D�ODVWLQJ�asset.

Remember the team: *RRG�VSRUWVPDQVKLS�LV�DSSHDOLQJ��$FNQRZOHGJLQJ�DOO�WKH�SHRSOH�ZKR�PDNH�\RXU�GHDOHUVKLS�VXFFHVVIXO�LV�DV�UHOHYDQW�DV�WKH�FDUV�DQG�GHDOV�WKHPVHOYHV��)URP�WKH�PDQXIDFWXUHUV�WR�WKH�VHUYLFH�SHUVRQQHO��\RXU�WHDP�PHULWV�UHVSHFW�DQG�DSSUHFLDWLRQ��7KH\�ZLOO�DSSUHFLDWH�WKH�UHFRJQLWLRQ��WRR��+DSS\�HPSOR\HHV�ZLOO�ZRUN�KDUGHU�DQG�DUH�PRUH�OR\DO��:KLOH�\RX�PLJKW�QHYHU�VWDQG�RQ�D�SRGLXP�

DQG�SURXGO\�OLVWHQ�WR�WKH�QDWLRQDO�DQWKHP�ZKLOH�\RXU�IDQV�FKHHU�ZLOGO\��\RX�FDQ�FHUWDLQO\�HQMR\�VWURQJ�SRSXODU�VXSSRUW�DQG�WKH�OR\DOW\�RI�FXVWRPHUV�ZKR�VHH�\RX�DV�D�ZLQQHU�)ROORZ�WKHVH�VWUDWHJLHV�DQG�JR�IRU�WKH�

JROG��

BY JIM FITZPATRICKJIM FITZPATRICK IS PRESIDENT/CEO OF FITZPATRICK ADVERTISING, A FULL-SERVICE AUTOMOTIVE ADVERTISING AGENCY, AND FOUNDER OF FORCE MARKETING, A DIGITAL AND DIRECT MARKETING COMPANY. FOR MORE INFORMATION, CALL 1-800-917-8637, EMAIL [email protected] OR VISIT FITZPATRICKADVERTISING.COM.

IL_0912.indd 14 8/13/12 2:05 PM

IL_0912.indd 15 8/13/12 2:05 PM


16


:H�DOO�NQRZ�WKH�VD\LQJ��³6WLFNV�DQG�VWRQHV�PD\�EUHDN�P\�ERQHV��EXW�ZRUGV�ZLOO�QHYHU�KXUW�PH�´

8QIRUWXQDWHO\��WKH�UHDOLW\�LV�IRU�DQ\�EXVLQHVV��ZRUGV�FDQ�EUHDN�\RX�

,W�LV�LPSHUDWLYH�WR�\RXU�GHDOHUVKLS�WKDW�\RX�SURDFWLYHO\�PDQDJH�DQG�EXLOG�\RXU�RQOLQH�UHSXWDWLRQ��<RX�QHHG�WR�KDYH�VWUDWHJLHV�LQ�SODFH�WR�PRQLWRU�ZKDW�LV�VDLG�DERXW�\RX�DQG�UHVSRQG�DSSURSULDWHO\�

7KDW�VWDUWV�ZLWK�NQRZLQJ�WKH�VLWHV�DYDLODEOH�IRU�GHDOHUVKLS�UHYLHZV��*RRJOH��/RFDO�RU�*RRJOH�3ODFHV��<HOS��&DUV�FRP��'HDOHU5DWHU�DQG�&DU+HOS�DUH�VRPH�RI�WKH�PRVW�SRSXODU�VLWHV�

0RQLWRULQJ�ZKDW�LV�SRVWHG�RQOLQH�DERXW�\RX�DOORZV�\RX�WR�FRQWDFW�FXVWRPHUV�ZKR�ZHUH�GLVVDWLV¿HG�DQG�DGGUHVV�WKHLU�FRPSODLQWV��$GGUHVVLQJ�WKHLU�FRQFHUQV�HIIHFWLYHO\�HOLPLQDWHV�WKH�FRPSODLQW�

2QFH�\RX�KDYH�VDWLV¿HG�WKH�DQJU\�FXVWRPHU��\RX�FDQ�DVN�KLP�WR�SOHDVH�UHYLVH�KLV�VWDWHPHQW�DQG�WR�DOZD\V�FRPPXQLFDWH�ZLWK�\RX�GLUHFWO\�VKRXOG�KH�KDYH�D�FRQFHUQ��7KDW�UHVSRQVLELOLW\�VKRXOG�EH�KDQGOHG�E\�VRPHRQH�ZKR�KDV�WKH�KLJKHVW�DXWKRULW\�WR�PDNH�FXVWRPHU�GHFLVLRQV��

VXFK�DV�JLYLQJ�DZD\�D�IUHH�VHUYLFH�RU�UHSODFLQJ�D�EDUH�WLUH�RQ�D�YHKLFOH�WKDW�ZDV�MXVW�SXUFKDVHG�IURP�\RXU�SUH�RZQHG�VHOHFWLRQ�

&UHGLELOLW\�LV�WKH�PRVW�LPSRUWDQW�SDUW�RI�DQ\�GHDOHUVKLS¶V�VDOHV�

,W¶V�D�JRRG�LGHD�WR�KDYH�RQH�SHUVRQ�PRQLWRU�UHYLHZ�VLWHV�DQG�UHSRUW�DQ\�LVVXHV�WR�WKH�JHQHUDO�PDQDJHU��ZKR�FDQ�WKHQ�GLUHFW�FXVWRPHUV�WR�WKH�PDQDJHUV�RI�WKH�GHSDUWPHQWV�DERXW�ZKLFK�WKH\�KDG�FRPSODLQWV��(YHU\�HPSOR\HH�ZKR�KDV�FRQWDFW�ZLWK�FXVWRPHUV�VKRXOG�EH�WUDLQHG�RQ�KRZ�WR�KDQGOH�DQG�PDQDJH�FXVWRPHU�FRPSODLQWV��RQO\�HVFDODWLQJ�WKH�VLWXDWLRQ�WR�WKH�JHQHUDO�PDQDJHU�ZKHQ�D�GHFLVLRQ�LV�QHHGHG�EH\RQG�WKH�HPSOR\HH¶V�DXWKRULW\�

1H[W��\RX�QHHG�WR�HIIHFWLYHO\�HQFRXUDJH�\RXU�FOLHQWV�WR�SRVW�SRVLWLYH�UHYLHZV�DERXW�\RX��7KDW¶V�DFWXDOO\�PXFK�VLPSOHU�WKDQ�\RX�WKLQN��-XVW�DVN�

,I�WKHUH�LV�D�FXVWRPHU�\RX�NQRZ�FRPHV�LQ�UHJXODUO\�IRU�VHUYLFH��RU�ZKR�LV�SXUFKDVLQJ�KLV�WKLUG�YHKLFOH�IURP�\RX��MXVW�VD\��³7KDQN�\RX�IRU�\RXU�FRQWLQXHG�EXVLQHVV��&DQ�,�DVN�ZKDW�PDNHV�\RX�FRQWLQXH�WR�FRPH�EDFN"´�+LV�UHVSRQVH�LV�\RXU�UHYLHZ�

$VN�LI�KH�ZRXOG�PLQG�SRVWLQJ�D�SRVLWLYH�UHYLHZ�DERXW�\RX��RU�LI�KH�ZRXOG�PLQG�EHLQJ�UHFRUGHG�ZLWK�D�WHVWLPRQLDO��7KDW�LV�D�JUHDW�WRRO�WR�SODFH�LQ�WKH�KHDGHU�RI�\RXU�ZHEVLWH��VR�WKDW�HYHU\�SURVSHFW�ZKR�YLVLWV�\RXU�VLWH�UHFHLYHV�D�SRVLWLYH�UHYLHZ�WR�HQFRXUDJH�KLP�WR�FRPH�LQ�DQG�EHFRPH�D�FXVWRPHU�

7KHUH�DUH�VHYHUDO�ZD\V�WR�HQFRXUDJH�D�UHYLHZ��EXW�\RX�PXVW�EH�FDUHIXO�QRW�WR�HQFRXUDJH�RU�EOLQGO\�DVN�\RXU�FXVWRPHUV�WR�SRVW�QHJDWLYH�UHYLHZV�DERXW�\RX��,W�WDNHV��SRVLWLYH�UHYLHZV�WR�RXWZHLJK�RQH�QHJDWLYH�UHYLHZ��$QG�RQFH�D�QHJDWLYH�UHYLHZ�LV�SRVWHG��LW�LV�DOPRVW�LPSRVVLEOH�WR�JHW�LW�UHPRYHG�

7KH�RQO\�ZD\�WR�UHFWLI\�D�QHJDWLYH�UHYLHZ�LV�WR�FRQWDFW�WKH�SHUVRQ�ZKR�SRVWHG�LW��DGGUHVV�KLV�FRPSODLQWV�DQG�WXUQ�WKH�FRPSODLQW�LQWR�D�FRPSOLPHQW��7KDW¶V�ZK\�PRQLWRULQJ�ZKDW�LV�VDLG�DERXW�\RX�LV�LPSHUDWLYH�

7KHUH�DUH�SURDFWLYH�PHDVXUHV�\RX�VKRXOG�WDNH�EHIRUH�D�QHJDWLYH�UHYLHZ�LV�SRVWHG�DERXW�\RX��1RW�RQO\�GR�\RX�QHHG�WR�FRQVWDQWO\�HQFRXUDJH�\RXU�FXVWRPHUV�WR�SRVW�SRVLWLYH�UHYLHZV��\RX�QHHG�WR�KDYH�VRPHRQH�UHVSRQVLEOH�

How Your Online Reputation Affects Sales C R E D I B I L I T Y I S T H E M O S T I M P O R TA N T PA R T O F A N Y D E A L E R S H I P ’ S SA L E S .

IL_0912.indd 16 8/13/12 2:05 PM


17


IRU�IROORZLQJ�XS�ZLWK�HDFK�DQG�HYHU\�FXVWRPHU�DIWHU�WKH�SXUFKDVH�RI�D�YHKLFOH�RU�D�VHUYLFH�YLVLW�WR�HQVXUH�HYHU\�FXVWRPHU�ZDV�FRPSOHWHO\�VDWLV¿HG�ZLWK�KLV�H[SHULHQFH��

+DYH�D�SROLWH�VFULSW�RI�QR�ORQJHU�WKDQ��VHFRQGV�LQ�SODFH��,W�LV�LPSRUWDQW�WKDW�WKH�SHUVRQ�UHVSRQVLEOH�IRU�FRQWDFWLQJ�\RXU�FXVWRPHUV�KDV�WKH�DXWKRULW\�DQG�XQGHUVWDQGLQJ�RI�ZKDW�JRHV�RQ�LQ�WKH�GHDOHUVKLS�WR�SURDFWLYHO\�DGGUHVV�DQ\�FRPSODLQWV�LPPHGLDWHO\��7KH�FXVWRPHU�VKRXOG�QRW�EH�SDVVHG�WR�WZR�RU�WKUHH�PDQDJHUV��ZLWK�QRQH�RI�WKHP�UHDOO\�VXUH�RI�WKH�HQWLUH�VLWXDWLRQ��0DNLQJ�WKH�FXVWRPHU�UHSHDW�KLPVHOI�UDLVHV�KLV�OHYHO�RI�IUXVWUDWLRQ��

7KH�SHUVRQ�FRQWDFWLQJ�WKH�FXVWRPHU�LQLWLDOO\�VKRXOG�EH�DEOH�WR�PDNH�D�GHFLVLRQ�

³,�XQGHUVWDQG��0U��6PLWK�´�5HSHDW�WKH�SUREOHP�EDFN�WR�WKH�FXVWRPHU�VR�KH�NQRZV�\RX�WUXO\�XQGHUVWDQG��³,�DSRORJL]H�WKDW�\RXU�YLVLW�ZDV�QRW�FRPSOHWHO\�VDWLVIDFWRU\��,�DP�KHUH�WR�KHOS�\RX��:H�QHHG�WR�KDYH�\RX�EULQJ�\RXU�YHKLFOH�EDFN�WR�RXU�VHUYLFH�GHSDUWPHQW�VR�ZH�FDQ�PDNH�VXUH�WR�FRUUHFW�WKLV�SUREOHP��,�ZLOO�KDYH�D�ORDQHU�FDU�DYDLODEOH�IRU�\RX��:KDW�WLPH�ZRXOG�EH�EHVW�IRU�\RX��PRUQLQJ�RU�DIWHUQRRQ"´

1R�SURPLVH�ZDV�JLYHQ��QR�GLDJQRVLV��QR�RQH�ZDV�WKURZQ�XQGHU�WKH�EXV��:H�OLVWHQHG��ZH�DFNQRZOHGJHG�DQG�ZH�DFWHG��1RZ�ZH�ZLOO�KDYH�D�PDQDJHU�KDQGOH�WKH�FXVWRPHU�IURP�KHUH��ZLWK�D�IXOO�XQGHUVWDQGLQJ�RI�WKH�VLWXDWLRQ�DQG�ZLWKRXW�

SDVVLQJ�WKH�FXVWRPHU�WR�WZR�DQG�WKUHH�YRLFHPDLOV�)ROORZ�XS�LV�RQH�RI�WKH�PRVW�LPSRUWDQW�SDUWV�RI�

\RXU�RQOLQH�UHSXWDWLRQ��6HH�WKH�SUREOHP�DQG�¿[�LW�EHIRUH�LW�FDXVHV�SHUPDQHQW�GDPDJH�

%HIRUH�FRQWDFWLQJ�D�FXVWRPHU�IRU�IROORZ�XS��\RX�VKRXOG�NQRZ�

��:KHQ�KH�FDPH�LQ��:KDW�KH�FDPH�LQ�IRU��,I�VHUYLFH��ZDV�WKH�VHUYLFH�LQWHUQDO��ZDUUDQW\��

RU�FXVWRPHU�SD\��,I�D�FXVWRPHU�SDLG�IRU�WKH�VHUYLFH��KH�LV�PRUH�OLNHO\�WR�EH�XSVHW�RU�UHTXHVW�VRPH�W\SH�RI�FRPSHQVDWLRQ�LI�GLVVDWLV¿HG��DQG�\RX�VKRXOG�EH�SUHSDUHG�IRU�WKDW�

��:KR�ZDV�WKH�VHUYLFH�DGYLVRU�RU�VDOHV�UHSUHVHQWDWLYH"�7KH�FXVWRPHU�ZLOO�H[SHFW�\RX�WR�NQRZ��DQG�LI�\RX�GRQ¶W��LW�LPPHGLDWHO\�PDNHV�KLP�IHHO�LPSHUVRQDOL]HG�DQG�OLNH�KH�LV�LQVLJQL¿FDQW�RU�XQLPSRUWDQW�

��:KR�LV�WKH�PDQDJHU�RI�WKH�GHSDUWPHQW"�,I�WKHUH�LV�D�FRPSODLQW��ZKR�ZLOO�WKH�FXVWRPHU�EH�ZRUNLQJ�ZLWK"

,W�LV�LPSRUWDQW�WR�WHOO�WKH�FXVWRPHU�ZKR�KH�VKRXOG�DVN�IRU�DQG�WR�OHW�KLP�NQRZ�WKDW�D�PDQDJHU�ZLOO�EH�ZRUNLQJ�ZLWK�KLP�SHUVRQDOO\�WR�DGGUHVV�KLV�FRQFHUQV��,I�KH�ZDV�XQKDSS\�ZLWK�KLV�VHUYLFH�DGYLVRU�RU�VDOHV�UHSUHVHQWDWLYH��KH�ZLOO�QRW�ZDQW�WR�ZRUN�ZLWK�KLP�KHU�WR�DGGUHVV�WKH�FRPSODLQW�KH�IHHOV�WKH�DGYLVRU�VDOHV�UHS�PLJKW�KDYH�FDXVHG�

2QFH�WKH�FRPSODLQW�KDV�EHHQ�DGGUHVVHG��WKH�PDQDJHU�VKRXOG�EXLOG�WKH�LQWHJULW\�RI�WKH�VHUYLFH�

DGYLVRU�RU�VDOHV�UHSUHVHQWDWLYH�EDFN�XS�ZLWK�WKH�FXVWRPHU�DQG�EULQJ�WKH�FXVWRPHU�DQG�VHUYLFH�DGYLVRU�RU�VDOHV�UHSUHVHQWDWLYH�WRJHWKHU�IRU�DQ�DSRORJ\�DQG�XQGHUVWDQGLQJ��,I�D�PDQDJHU�FDQQRW�VXSSRUW�KLV�HPSOR\HH��WKH�HPSOR\HH�VKRXOG�QRW�EH�WKHUH��)XUWKHUPRUH��WKDW�FXVWRPHU�PLJKW�QHHG�WR�ZRUN�ZLWK�WKDW�HPSOR\HH�DJDLQ��<RX�QHYHU�ZDQW�WR�JHW�LQWR�WKH�SUREOHP�RI�KDYLQJ�WR�EH�FDUHIXO�RI�ZKR�\RX�SODFH�FXVWRPHUV�ZLWK�

,I�WKH�IROORZ�XS�SURFHVV�LV�QRW�KDQGOHG�FRUUHFWO\��\RX�ZLOO�HQG�XS�ZLWK�PRUH�FRPSODLQWV�WKDQ�LI�D�IROORZ�XS�ZDV�QRW�PDGH��%H�VXUH�WR�KDYH�SROLFLHV�LQ�SODFH�IRU�KRZ�WR�KDQGOH�D�FRPSODLQW�DQG�EH�VXUH�HYHU\�PDQDJHU�XQGHUVWDQGV�WKH�LPSRUWDQFH�RI�KDQGOLQJ�D�FRPSODLQW�ZLWK�WKH�KLJKHVW�VHQVH�RI�SULRULW\�DQG�XUJHQF\�

7KH�ERWWRP�OLQH�LV��\RXU�GHDOHUVKLS�QHHGV�WR�KDYH�VWUDWHJLHV�LQ�SODFH�WR�HQVXUH�LWV�UHSXWDWLRQ�LV�VHFXUH��,I�\RXU�RQOLQH�UHSXWDWLRQ�LV�QRW�EHLQJ�PRQLWRUHG�DQG�SURDFWLYHO\�PDLQWDLQHG��LW�ZLOO�GHFOLQH�

:LWK��SHUFHQW�RI�\RXU�SURVSHFWV�FKHFNLQJ�\RXU�UHYLHZV�EHIRUH�PDNLQJ�D�SXUFKDVLQJ�GHFLVLRQ��LW�VKRXOG�EH�RQH�RI�\RXU�WRS�SULRULWLHV��

BY PETER MARTINPETER “WEB DOC” MARTIN IS PRESIDENT OF CACTUS SKY COMMUNICATIONS. HE CAN BE REACHED BY CALLING (941) 756-1932 OR E-MAILING [email protected]. FOR MORE INFORMATION, VISIT WWW.CACTUSSKY.COM AND CLICK ON “REPUTATION BUILDING”

IL_0912.indd 17 8/13/12 2:05 PM


18


M A R K E T N E W S

Report: Expect to See More Hybrids([SHFW�WR�VHH�PRUH�K\EULGV�FUXLVLQJ�

DURXQG�WKH�ZRUOG¶V�KLJKZD\V�LQ�WKH�QH[W�few years.

According to market research report

distributor ReportStack.com, the global

K\EULG�FDU�PDUNHW�LV�H[SHFWHG�WR�JURZ�DW�D�UDWH�RI��SHUFHQW�RYHU�WKH�QH[W� three years.

The cause for the potential double-digit

growth: increasing global oil consumption,

the report, titled “Global Hybrid Car

0DUNHW��´�H[SODLQHG��0RUHRYHU��DV�JRYHUQPHQWV�DURXQG�WKH�

world try to cut down on fuel emissions,

the hybrid car market has “been

witnessing an increase in initiatives by

governments to create awareness and

DFFHSWDQFH�RI�K\EULG�FDUV�´�WKH�UHSRUW�VDLG�The report also cites labor arbitrage,

such as the various advantages offered

by the hybrid car to the end user, such as

HQHUJ\�HI¿FLHQF\��OHVV�SROOXWLRQ��EHWWHU�performance, reduced dependency on

natural resources and more, as reasons for

WKH�K\EULG�PDUNHW�H[SDQVLRQ��That said, even with the push from

politicians, the high cost of hybrid cars is

acting as a barrier to the market growth,

the report said.

‘’With the time and research on the

development of the battery systems of

hybrid cars, the overall cost of batteries

DQG�WRWDO�FRVW�RI�RZQHUVKLS�ZLOO�GHFUHDVH�´�an analyst from the publishing automotive

WHDP�VDLG��³%\��WKH�WRWDO�FRVW�RI�ownership of plug-in hybrid electric

vehicles with a battery of 10 kilowatt-

hours will be below that of an internal

FRPEXVWLRQ�HQJLQH�YHKLFOH��DQG�E\��the total cost of ownership of plug-in

hybrid electric vehicles with a battery of

15 KWh will be lower than an internal

combustion engine vehicle.

“The total cost of ownership of battery

electric vehicles will be less than an

internal combustion engine vehicle by

��ZLWK�WKH�GHYHORSPHQW�RI�EDWWHULHV��This reduction in cost will fuel the growth

RI�WKH�JOREDO�K\EULG�FDU�PDUNHW�´:KR�ZLOO�EHQH¿W�PRVW�IURP�WKLV�

potential growth?

The vendors currently dominating the

hybrid market space include Toyota

0RWRU�&RUS��+RQGD�0RWRU�&R��)RUG�0RWRU�&R��DQG�1LVVDQ�0RWRU�&R��/WG�� the report noted.

*HQHUDO�0RWRUV�&R��%0:�$*�DQG�9RONVZDJHQ�*URXS�DUH�DOVR�H[SHFWHG�WR�SOD\�D�UROH�LQ�WKH�IXWXUH�IXHO�HI¿FLHQW�vehicle market.

IL_0912.indd 18 8/13/12 2:05 PM


19


3D\1HDU0H��WKH�FDVK�WUDQVDFWLRQ�QHWZRUN��KDV�ODXQFKHG�3D\1HDU0H�Lending, a cash payment system for

subprime lenders, and has teamed with

Westlake Financial Services to integrate

3D\1HDU0H¶V�WHFKQRORJ\�LQWR�H[LVWLQJ�systems, enabling customers to repay

UHWDLO�LQVWDOOPHQW�FRQWUDFWV�LQ�FDVK��DW�DQ\�RI��SDUWLFLSDWLQJ��(OHYHQ®

stores nationwide.

8VLQJ�3D\1HDU0H��FXVWRPHUV�RI�Westlake’s network of more than 15,000

new and used car dealers will be able to

make account payments in cash at their

local 7-Eleven store, where a unique loan

EDUFRGH�RU�3D\1HDU0H�&DUG�LV�VFDQQHG�DW�WKH�UHJLVWHU��:LWK�3D\1HDU0H��WKH�transactions are completed instantly,

and consumers’ accounts are credited

instantly.

³3D\1HDU0H�RIIHUV�D�UHPDUNDEO\�VLPSOH�way to make our collections process more

HI¿FLHQW�´�:HVWODNH�GLUHFWRU�RI�RSHUDWLRQV�-RKQ�0DVRQ�VDLG��³:H�DQWLFLSDWH�UHGXFHG�operational costs while adding payment

ORFDWLRQV�IRU�RXU�FXVWRPHUV�´“Subprime lenders need to make

cash payments as easy as possible for

WKHPVHOYHV�DQG�WKHLU�FRQVXPHUV�´�3D\1HDU0H�&(2�'DQQ\�6KDGHU�VDLG��“We’ve dramatically changed how

cash payments are made by opening

up thousands of additional payment

locations, accessible any time they are

QHHGHG�´3D\1HDU0H�/HQGLQJ��D�VHFXUH�

hosted web application, provides a

comprehensive turnkey service lenders

can use to accept cash payments

without integration. Lenders can set

XS�3D\1HDU0H�/HQGLQJ�LQ�OHVV�WKDQ��minutes and start collecting immediately,

and can add additional sites almost

LQVWDQWO\��%HFDXVH�3D\1HDU0H�/HQGLQJ�does not require any integration with

H[LVWLQJ�V\VWHPV��LW�FDQ�EH�XVHG�E\�OHQGHUV�of any size.

³:H�DSSUHFLDWH�WKDW�3D\1HDU0H�DOORZV�our customers to make payments at any

WLPH�´�7LGDOZDYH�)LQDQFH�&RUS��SUHVLGHQW�Ted Beresford said. “In fact, we’ve been

pleasantly surprised by how many

customers make their payments at

��S�P�´�

V I S I T W W W. PAY N E A R M E . C O M

Westlake Financial Adds PayNearMe’s Technology

Autobytel Launches Mobile WebsiteAutobytel Inc. has launched a dedicated mobile version of its website.

Studies show shoppers prefer using a browser to a downloadable mobile app, so

Autobytel’s mobile website was developed from the ground up with today’s mobile

consumer in mind. Autobytel mobile includes many of the popular features on the

IXOO�ZHEVLWH�EXLOW�VSHFL¿FDOO\�IRU�WKH�PRELOH�HQYLURQPHQW�7KH�VLWH�IHDWXUHV�D�FXVWRPL]HG�GHDOHU�GLUHFWRU\�WKDW�DOORZV�FRQVXPHUV�WR�¿QG�ORFDO�

dealers as well as new and used vehicle research and automotive industry news, and

FXVWRPL]HG�VKRSSLQJ�WRROV�VXFK�DV�D�XVHG�FDU�¿QGHU��FDU�FDOFXODWRUV�DQG�WKH�DELOLW\�WR�determine used car values and submit purchase requests directly to dealers.

For more information, visit www.autobytel.com.

M O B I L E N E W S

IL_0912.indd 19 8/13/12 2:05 PM


20


I R S S T E P P I N G U P FO R M 8 3 0 0 C O M P L I A N C E AU D I T S

IRS Form 8300 Reporting6KDXQ�3HWHUVRQ��OHJLVODWLYH�FRXQVHO�IRU�

1,$'$��UHFHQWO\�UHSRUWHG�WKDW�WKH�,56�LV�VWHSSLQJ�XS�FRPSOLDQFH�DXGLWV�UHJDUGLQJ�)RUP��³5HSRUW�RI�&DVK�3D\PHQWV�2YHU��5HFHLYHG�LQ�D�7UDGH�RU�%XVLQHVV�´

7KH�ODZ�UHTXLUHV�WUDGHV�DQG�EXVLQHVVHV�WR�UHSRUW�FDVK�SD\PHQWV�RI�PRUH�WKDQ��WR�WKH�IHGHUDO�JRYHUQPHQW�E\�¿OLQJ�)RUP��D�MRLQW�IRUP�LVVXHG�E\�WKH�,56�DQG�WKH�)LQDQFLDO�&ULPHV�(QIRUFHPHQW�1HWZRUN��)LQ&(1��7KH�LQIRUPDWLRQ�SURYLGHG�RQ�WKH�IRUP�DVVLVWV�ODZ�HQIRUFHPHQW�LQ�LWV�DQWL�PRQH\�ODXQGHULQJ�HIIRUWV�

7UDQVDFWLRQV�WKDW�UHTXLUH�)RUP��LQFOXGH��EXW�DUH�QRW�OLPLWHG�WR�

��3UH�H[LVWLQJ�GHEW�SD\PHQWV��0DNLQJ�RU�UHSD\LQJ�D�ORDQ��6DOH�RI�JRRGV�VHUYLFHV��6DOH�RI�UHDO�SURSHUW\��5HQWDO�RI�UHDO�RU�SHUVRQDO�SURSHUW\��([FKDQJH�RI�FDVK�IRU�RWKHU�FDVK�%XVLQHVVHV�PXVW�UHSRUW�FDVK�SD\PHQWV�

UHFHLYHG��LI�DOO�RI�WKH�IROORZLQJ�FULWHULD� DUH�PHW�

��7KH�DPRXQW�RI�FDVK�LV�PRUH�WKDQ��

��7KH�EXVLQHVV�UHFHLYHV�WKH�FDVK�DV�RQH�OXPS�VXP�RI�PRUH�WKDQ��LQVWDOOPHQW�SD\PHQWV�WKDW�FDXVH�WKH�WRWDO�FDVK�UHFHLYHG�ZLWKLQ�RQH�\HDU�RI�WKH�LQLWLDO�SD\PHQW�WR�WRWDO�PRUH�WKDQ��RU�SUHYLRXVO\�XQUHSRUWHG�SD\PHQWV�WKDW�FDXVH�WKH�WRWDO�FDVK�UHFHLYHG�ZLWKLQ�D��PRQWK�SHULRG�WR�WRWDO�PRUH�WKDQ��

��7KH�HVWDEOLVKPHQW�UHFHLYHV�WKH�FDVK�LQ�WKH�RUGLQDU\�FRXUVH�RI�D�WUDGH�RU�EXVLQHVV�

��7KH�VDPH�DJHQW�RU�EX\HU�SURYLGHV� WKH�FDVK�

��7KH�EXVLQHVV�UHFHLYHV�WKH�FDVK�LQ�D�VLQJOH�WUDQVDFWLRQ�RU�LQ�UHODWHG�WUDQVDFWLRQV�

Cash Includes&DVK�LQFOXGHV�WKH�FRLQV�DQG�FXUUHQF\�RI�WKH�

8QLWHG�6WDWHV�DQG�IRUHLJQ�FRXQWULHV��&DVK�PD\�DOVR�LQFOXGH�FDVKLHU¶V�FKHFNV��EDQN�GUDIWV��WUDYHOHU¶V�FKHFNV�DQG�PRQH\�RUGHUV�ZLWK�D�IDFH�YDOXH�RI��RU�OHVV��LI�WKH�EXVLQHVV�UHFHLYHV�WKH�LQVWUXPHQW�LQ�D�GHVLJQDWHG�UHSRUWLQJ�WUDQVDFWLRQ��DV�GH¿QHG�EHORZ��RU�LQ�DQ\�WUDQVDFWLRQ�LQ�ZKLFK�WKH�EXVLQHVV�NQRZV�WKH�FXVWRPHU�LV�WU\LQJ�WR�DYRLG�UHSRUWLQJ�RI�WKH�WUDQVDFWLRQ�RQ�)RUP��

([DPSOH��7RP�*UHHQZRRG�SXUFKDVHV�D�XVHG�FDU�IURP�;<=�$XWR�'HDOHUVKLS�IRU�D�WRWDO�RI��+H�SD\V�ZLWK�D�FDVKLHU¶V�FKHFN�KDYLQJ�D�IDFH�YDOXH�RI��7KH�FDVKLHU¶V�FKHFN�LV�QRW�WUHDWHG�DV�FDVK�EHFDXVH�LWV�IDFH�YDOXH�LV�PRUH�WKDQ��7KH�EXVLQHVV�GRHV�QRW�QHHG�WR�¿OH�)RUP��

$�GHVLJQDWHG�UHSRUWLQJ�WUDQVDFWLRQ�LV�WKH�UHWDLO�VDOH�RI�DQ\�RI�WKH�IROORZLQJ�

��$�FRQVXPHU�GXUDEOH��VXFK�DV�DQ�DXWRPRELOH��ERDW�RU�SURSHUW\�RWKHU�WKDQ�ODQG�RU�EXLOGLQJV�WKDW�LV�VXLWDEOH�IRU�SHUVRQDO�XVH��FDQ�UHDVRQDEO\�EH�

H[SHFWHG�WR�ODVW�DW�OHDVW�RQH�\HDU�XQGHU�RUGLQDU\�XVH��KDV�D�VDOHV�SULFH�RI�PRUH�WKDQ��DQG�FDQ�EH�VHHQ�RU�WRXFKHG��WDQJLEOH�SURSHUW\��$�FROOHFWLEOH�VXFK�DV�D�ZRUN�RI�DUW��UXJ��DQWLTXH��PHWDO��JHP��VWDPS�RU�FRLQ��7UDYHO�RU�HQWHUWDLQPHQW��LI�WKH�WRWDO�VDOHV�SULFH�RI�DOO�LWHPV�VROG�IRU�WKH�VDPH�WULS�RU�HQWHUWDLQPHQW�HYHQW�LQ�RQH�WUDQVDFWLRQ�RU�UHODWHG�WUDQVDFWLRQV�LV�PRUH�WKDQ��7KH�WRWDO�VDOHV�SULFH�RI�DOO�LWHPV�VROG�IRU�D�WULS�RU�HQWHUWDLQPHQW�HYHQW�LQFOXGHV�WKH�VDOHV�SULFH�RI�LWHPV�VXFK�DV�DLUIDUH��KRWHO�URRPV�DQG�DGPLVVLRQ�WLFNHWV�

([DPSOH��(G�-RKQVRQ�DVNV�D�WUDYHO�DJHQW�WR�FKDUWHU�D�SDVVHQJHU�DLUSODQH�WR�WDNH�D�JURXS�WR�D�VSRUWV�HYHQW�LQ�DQRWKHU�FLW\��+H�DOVR�DVNV�WKH�WUDYHO�DJHQW�WR�ERRN�KRWHO�URRPV�DQG�DGPLVVLRQ�WLFNHWV�IRU�WKH�JURXS��+H�SD\V�ZLWK�WZR�PRQH\�RUGHUV��HDFK�IRU��6LQFH�HDFK�PRQH\�RUGHU�ZDV�OHVV�WKDQ��WKH�WUDYHO�DJHQW�KDV�UHFHLYHG�PRUH�WKDQ��FDVK�LQ�WKH�GHVLJQDWHG�UHSRUWLQJ�WUDQVDFWLRQ�DQG�PXVW�¿OH�)RUP��

Cash Does Not Include&DVK�GRHV�QRW�LQFOXGH�SHUVRQDO�FKHFNV�

GUDZQ�RQ�WKH�DFFRXQW�RI�WKH�ZULWHU�([DPSOH��-LP�5REHUWV�SXUFKDVHV�DQ�

DXWRPRELOH�IURP�$%&�$XWR�'HDOHUV�IRU��+H�SD\V�ZLWK��LQ�FXUUHQF\�DQG�D�SHUVRQDO�FKHFN�LQ�WKH�DPRXQW�RI��6LQFH�D�SHUVRQDO�FKHFN�LV�QRW�FRQVLGHUHG�FDVK��$%&�$XWR�'HDOHUV�GRHV�QRW�QHHG�WR�¿OH�D�)RUP��

&DVK�GRHV�QRW�LQFOXGH�D�FDVKLHU¶V�FKHFN��EDQN�GUDIW��WUDYHOHU¶V�FKHFN�RU�PRQH\�RUGHU�ZLWK�D�IDFH�YDOXH�RI�PRUH�WKDQ��:KHQ�D�FXVWRPHU�XVHV�FXUUHQF\�RI�PRUH�WKDQ��WR�SXUFKDVH�D�PRQHWDU\�LQVWUXPHQW��WKH�¿QDQFLDO�LQVWLWXWLRQ�LVVXLQJ�WKH�FDVKLHU¶V�FKHFN��EDQN�GUDIW��WUDYHOHU¶V�FKHFN�RU�PRQH\�RUGHU�LV�UHTXLUHG�WR�UHSRUW�WKH�WUDQVDFWLRQ�E\�¿OLQJ�)LQ&(1�)RUP��³&XUUHQF\�7UDQVDFWLRQ�5HSRUW�´

&DVK�GRHV�QRW�LQFOXGH�D�FDVKLHU¶V�FKHFN��EDQN�GUDIW��WUDYHOHU¶V�FKHFN�RU�PRQH\�RUGHU�UHFHLYHG�LQ�SD\PHQW�IRU�D�FRQVXPHU�GXUDEOH�RU�FROOHFWLEOH�LI�DOO�WKUHH�RI�WKH�IROORZLQJ�VWDWHPHQWV�DUH�WUXH�

��7KH�EXVLQHVV�UHFHLYHV�LW�XQGHU�D�SD\PHQW�SODQ�UHTXLULQJ�RQH�RU�PRUH�GRZQ�SD\PHQWV�DQG�SD\PHQW�RI�WKH�UHVW�RI�WKH�SXUFKDVH�SULFH�E\�WKH�GDWH�RI�WKH�VDOH�

��7KH�EXVLQHVV�UHFHLYHV�LW�PRUH�WKDQ��GD\V�EHIRUH�WKH�GDWH�RI�WKH�VDOH�

��7KH�EXVLQHVV�XVHV�SD\PHQW�SODQV�ZLWK�WKH�VDPH�RU�VXEVWDQWLDOO\�VLPLODU�WHUPV�ZKHQ�VHOOLQJ�WR�XOWLPDWH�FXVWRPHUV�LQ�WKH�RUGLQDU\�FRXUVH�RI�LWV�WUDGH�RU�EXVLQHVV�

'H¿QLWLRQ�RI�D�5HODWHG�7UDQVDFWLRQ7KH�ODZ�UHTXLUHV�WUDGHV�DQG�EXVLQHVVHV�WR�

UHSRUW�WUDQVDFWLRQV�ZKHQ�FXVWRPHUV�XVH�FDVK�LQ�D�VLQJOH�WUDQVDFWLRQ�RU�UHODWHG�WUDQVDFWLRQV��5HODWHG�WUDQVDFWLRQV�DUH�WUDQVDFWLRQV�EHWZHHQ�D�SD\HU��RU�DQ�DJHQW�RI�WKH�SD\HU��DQG�D�UHFLSLHQW�RI�FDVK�WKDW�RFFXU�ZLWKLQ�D�

��KRXU�SHULRG��,I�WKH�VDPH�SD\HU�PDNHV�WZR�RU�PRUH�WUDQVDFWLRQV�WRWDOLQJ�PRUH�WKDQ��LQ�D��KRXU�SHULRG��WKH�EXVLQHVV�PXVW�WUHDW�WKH�WUDQVDFWLRQV�DV�RQH�WUDQVDFWLRQ�DQG�UHSRUW�WKH�SD\PHQWV��$��KRXU�SHULRG�LV��KRXUV��QRW�QHFHVVDULO\�D�FDOHQGDU�GD\�RU�EDQNLQJ�GD\�

([DPSOH��$�UHWDLO�PRWRUF\FOH�GHDOHU�VHOOV�D�PRWRUF\FOH�IRU��LQ�FDVK�WR�*DU\�-RQHV�DW��D�P��'XULQJ�WKH�DIWHUQRRQ�RI�WKH�VDPH�GD\��0U��-RQHV�UHWXUQV�WR�EX\�DQRWKHU�PRWRUF\FOH�IRU�KLV�VRQ�DQG�SD\V��LQ�FDVK��6LQFH�ERWK�WUDQVDFWLRQV�RFFXUUHG�ZLWKLQ�D��KRXU�SHULRG��WKH\�DUH�UHODWHG�WUDQVDFWLRQV��DQG�WKH�PRWRUF\FOH�GHDOHU�PXVW�¿OH�)RUP��

7UDQVDFWLRQV�DUH�DOVR�UHODWHG�HYHQ�LI�WKH\�DUH�PRUH�WKDQ��KRXUV�DSDUW�ZKHQ�D�EXVLQHVV�NQRZV��RU�KDV�UHDVRQ�WR�NQRZ��WKDW�HDFK�LV�D�VHULHV�RI�FRQQHFWHG�WUDQVDFWLRQV�

([DPSOH��$�FOLHQW�SD\V�D�WUDYHO�DJHQW��LQ�FDVK�IRU�D�WULS��7ZR�GD\V�ODWHU��WKH�VDPH�FOLHQW�SD\V�WKH�WUDYHO�DJHQW��PRUH�LQ�FDVK�WR�LQFOXGH�DQRWKHU�SHUVRQ�RQ�WKH�WULS��7KHVH�DUH�UHODWHG�WUDQVDFWLRQV��DQG�WKH�WUDYHO�DJHQW�PXVW�¿OH�)RUP��

([DPSOH��$�FXVWRPHU�SXUFKDVHV�D�YHKLFOH�IRU��DQG�WKHQ�ZLWKLQ�WKH�QH[W��PRQWKV�SD\V�WKH�GHDOHUVKLS�DGGLWLRQDO�FDVK�RI��IRU�LWHPV�VXFK�DV�D�QHZ�WUDQVPLVVLRQ��DFFHVVRULHV��FXVWRPL]HG�SDLQW�MRE��HWF��7KH�GHDOHUVKLS�LV�QRW�UHTXLUHG�WR�¿OH�D�)RUP��LI�WKH�DGGLWLRQDO�WUDQVDFWLRQV�DUH�QRW�SDUW�RI�WKH�RULJLQDO�VDOHV�FRQWUDFW�DQG�WKH�FXVWRPHU�KDV�QR�DGGLWLRQDO�OHJDO�REOLJDWLRQ�WR�PDNH�VXFK�DGGLWLRQDO�WUDQVDFWLRQV�

5HSRUWLQJ�6XVSLFLRXV�7UDQVDFWLRQV7KHUH�PLJKW�EH�VLWXDWLRQV�ZKHUH�WKH�

EXVLQHVV�LV�VXVSLFLRXV�DERXW�D�WUDQVDFWLRQ��$�WUDQVDFWLRQ�LV�VXVSLFLRXV�LI�LW�DSSHDUV�D�SHUVRQ�LV�WU\LQJ�WR�SUHYHQW�D�EXVLQHVV�IURP�¿OLQJ�)RUP��LI�LW�DSSHDUV�D�SHUVRQ�LV�WU\LQJ�WR�FDXVH�D�EXVLQHVV�WR�¿OH�D�IDOVH�RU�LQFRPSOHWH�)RUP��RU�LI�WKHUH�LV�D�VLJQ�RI�SRVVLEOH�LOOHJDO�DFWLYLW\�

7KH�EXVLQHVV�VKRXOG�UHSRUW�VXVSLFLRXV�DFWLYLW\�E\�FKHFNLQJ�WKH�³VXVSLFLRXV�WUDQVDFWLRQ´�ER[�RQ�WKH�WRS�OLQH�RI�)RUP��%XVLQHVVHV�DUH�DOVR�HQFRXUDJHG�WR�FDOO�WKH�,56�&ULPLQDO�,QYHVWLJDWLRQ�'LYLVLRQ�+RWOLQH�DW��RU�WKH�ORFDO�,56�FULPLQDO�LQYHVWLJDWLRQ�XQLW��,I�D�EXVLQHVV�VXVSHFWV�D�WUDQVDFWLRQ�LV�UHODWHG�WR�WHUURULVW�DFWLYLW\��WKH�EXVLQHVV�VKRXOG�FDOO�WKH�)LQDQFLDO�,QVWLWXWLRQV�+RWOLQH�DW��

7KH�EXVLQHVV�FDQ�YROXQWDULO\�¿OH�D�)RUP��LQ�VLWXDWLRQV�LQ�ZKLFK�D�WUDQVDFWLRQ�LV�IRU��RU�OHVV�DQG�VXVSLFLRXV�

When to Report Payments*HQHUDOO\��D�EXVLQHVV�PXVW�¿OH�)RUP��

ZLWKLQ��GD\V�DIWHU�WKH�FDVK�LV�UHFHLYHG��,I�WKH��WK�GD\�IDOOV�RQ�D�6DWXUGD\��6XQGD\�RU�KROLGD\��WKH�EXVLQHVV�PXVW�¿OH�WKH�UHSRUW�RQ�WKH�QH[W�EXVLQHVV�GD\�

IL_0912.indd 20 8/13/12 2:05 PM


21


Multiple Payments,Q�VRPH�VLWXDWLRQV��WKH�SD\HU�FDQ�DUUDQJH�

WR�SD\�LQ�FDVK�LQVWDOOPHQW�SD\PHQWV��,I�WKH�¿UVW�SD\PHQW�LV�PRUH�WKDQ��D�EXVLQHVV�PXVW�¿OH�)RUP��ZLWKLQ��GD\V��,I�WKH�¿UVW�SD\PHQW�LV�QRW�PRUH�WKDQ��WKH�EXVLQHVV�DGGV�WKH�¿UVW�SD\PHQW�DQG�DQ\�ODWHU�SD\PHQWV�PDGH�ZLWKLQ�RQH�\HDU�RI�WKH�¿UVW�SD\PHQW��:KHQ�WKH�WRWDO�FDVK�SD\PHQWV�H[FHHG��WKH�EXVLQHVV�PXVW�¿OH�)RUP��ZLWKLQ��GD\V�

$IWHU�D�EXVLQHVV�¿OHV�)RUP��LW�PXVW�VWDUW�D�QHZ�FRXQW�RI�FDVK�SD\PHQWV�UHFHLYHG�IURP�WKDW�EX\HU��,I�D�EXVLQHVV�UHFHLYHV�PRUH�WKDQ��LQ�DGGLWLRQDO�FDVK�SD\PHQWV�IURP�WKDW�EX\HU�ZLWKLQ�D��PRQWK�SHULRG��LW�PXVW�¿OH�DQRWKHU�)RUP��ZLWKLQ��GD\V�RI�WKH�SD\PHQW�WKDW�FDXVHV�WKH�DGGLWLRQDO�SD\PHQWV�WR�WRWDO�PRUH�WKDQ��

,I�D�EXVLQHVV�PXVW�¿OH�)RUP��DQG�WKH�VDPH�FXVWRPHU�PDNHV�DGGLWLRQDO�SD\PHQWV�ZLWKLQ�WKH��GD\V�EHIRUH�WKH�EXVLQHVV�PXVW�¿OH�)RUP��WKH�EXVLQHVV�FDQ�UHSRUW�DOO�WKH�SD\PHQWV�RQ�RQH�IRUP�

([DPSOH��2Q�-DQXDU\��D�FXVWRPHU�PDNHV�D�FDVK�SD\PHQW�RI��WR�D�EXVLQHVV��7KH�VDPH�FXVWRPHU�PDNHV�DGGLWLRQDO�SD\PHQWV�RQ�WKH�VDPH�WUDQVDFWLRQ�RI��RQ�)HEUXDU\��RQ�0DUFK��DQG��RQ�0D\��%\�-DQXDU\��WKH�EXVLQHVV�PXVW�¿OH�)RUP��IRU�WKH��SD\PHQW��%\�0D\��WKH�EXVLQHVV�PXVW�¿OH�DQRWKHU�)RUP��IRU�WKH�DGGLWLRQDO�SD\PHQWV�WKDW�WRWDO��

5HTXLUHG�:ULWWHQ�6WDWHPHQW�IRU�&XVWRPHUV:KHQ�D�EXVLQHVV�¿OHV�D�)RUP��WKH�

ODZ�UHTXLUHV�WKH�EXVLQHVV�WR�SURYLGH�D�ZULWWHQ�VWDWHPHQW�WR�HDFK�SHUVRQ�QDPHG�RQ�)RUP��WR�QRWLI\�WKHP�WKDW�WKH�EXVLQHVV�KDV�¿OHG�WKH�IRUP�

7KH�VWDWHPHQW�PXVW�LQFOXGH�WKH�QDPH�DQG�DGGUHVV�RI�WKH�FDVK�UHFLSLHQW¶V�EXVLQHVV��WKH�QDPH�DQG�WHOHSKRQH�QXPEHU�RI�D�FRQWDFW�SHUVRQ�IRU�WKH�EXVLQHVV��WKH�WRWDO�DPRXQW�RI�UHSRUWDEOH�FDVK�UHFHLYHG�LQ�D��PRQWK�SHULRG�DQG�D�VWDWHPHQW�WKDW�WKH�FDVK�UHFLSLHQW�LV�UHSRUWLQJ�WKH�LQIRUPDWLRQ�WR�WKH�,56�

7KH�RQO\�H[FHSWLRQ�WR�WKH�FXVWRPHU¶V�QRWLFH�UHTXLUHPHQW�LV�ZKHQ�WKH�)RUP��ZDV�¿OHG�IRU�VXVSLFLRXV�DFWLYLW\��,Q�WKDW�HYHQW��LW�LV�DFWXDOO\�LOOHJDO�IRU�WKH�EXVLQHVV�WR�QRWLI\�WKH�FXVWRPHU�WKH�)RUP��ZDV�¿OHG�

When to Provide a Statement to the Customer

7KH�EXVLQHVV�PXVW�SURYLGH�WKH�ZULWWHQ�VWDWHPHQW�WR�LWV�LGHQWL¿HG�FXVWRPHUV�RQ�RU�EHIRUH�-DQXDU\��RI�WKH�\HDU�DIWHU�WKH�\HDU�LQ�ZKLFK�WKH�FXVWRPHU�PDGH�WKH�FDVK�SD\PHQW�WKDW�FDXVHG�WKH�EXVLQHVV�WR�¿OH�)RUP��$�EXVLQHVV�WKDW�FKRRVHV�WR�PDLO�WKH�VWDWHPHQW�PXVW�PDLO�WKH�VWDWHPHQW�LQ�D�WLPHO\�PDQQHU�WR�HQVXUH�WKH�FXVWRPHU�UHFHLYHV�WKH�VWDWHPHQW�E\�-DQXDU\��

,56�)RUP��DQG�DGGLWLRQDO�LQVWUXFWLRQV�FDQ�EH�IRXQG�DW�ZZZ�LUV�JRY��

BY ADR STAFF

DealerRater Adds Chat Software

S O F T WA R E N E W S

Auction Update: Manheim7KH�0DQKHLP��4��XSGDWH�LV�D�TXLFN�ORRN�DW�ZHE�WUDI¿F��RQOLQH�YLVLWV�DQG�WUDQVDFWLRQV�DW

0DQKHLP�FRP�IRU�WKH�VHFRQG�TXDUWHU�RI��Mobile:�0RELOH�YLVLWV�WR�0DQKHLP�FRP�DUH�XS�DQ�DVWRXQGLQJ��SHUFHQW�RYHU�ODVW�\HDU�±��

PLOOLRQ�YV��PLOOLRQ�IRU�WKH�VHFRQG�TXDUWHU�RI��2QH�LQ�WKUHH�FXVWRPHUV�DFFHVVHG�0DQKHLP�FRP�RQ�D�PRELOH�GHYLFH��DQ�LQGLFDWLRQ�PRELOH�LV�EHFRPLQJ�LQFUHDVLQJO\�SRSXODU�LQ�WKH�DXWR�UHPDUNHWLQJ�LQGXVWU\�DV�GHDOHUV�XVH�VPDUWSKRQHV�WR�FRQGXFW�EXVLQHVV�DW�WKHLU�FRQYHQLHQFH�0RUH�FXVWRPHUV�DUH�FKRRVLQJ�WR�GR�EXVLQHVV�RQOLQH�±��SHUFHQW�RI�DOO�WUDQVDFWLRQV�IRU�WKH�TXDUWHU�

ZHUH�PDGH�E\�DQ�RQOLQH�EX\HU��Digital visits: 'LJLWDO�YLVLWV�WR�0DQKHLP�DUH�XS��SHUFHQW�RYHU�ODVW�\HDU�Simulcast turns 10: 0RUH�WKDQ��PLOOLRQ�YHKLFOHV�KDYH�EHHQ�SXUFKDVHG�YLD�6LPXOFDVW�VLQFH�LWV�

ODXQFK�LQ��UHSUHVHQWLQJ�DOPRVW��ELOOLRQ�ZRUWK�RI�LQYHQWRU\�Buying: 0RUH�WKDQ��FXVWRPHUV�ERXJKW�YHKLFOHV�RQOLQH�LQ��Selling:�0RUH�WKDQ��FXVWRPHUV�VROG�D�YHKLFOH�RQOLQH�LQ��

AU C T I O N N E W S

7KH�FDU�GHDOHU�UHYLHZ�ZHEVLWH�'HDOHU5DWHU�KDV�SDUWQHUHG�ZLWK�&RQWDFW�$W�2QFH��WR�DGG�D�OLYH�FKDW�IHDWXUH�IRU�LWV�FHUWL¿HG�GHDOHU�SDUWQHUV��HQDEOLQJ�UHDO�WLPH�FKDW�EHWZHHQ�DXWRPRWLYH�GHDOHUVKLSV�DQG�RQOLQH�VKRSSHUV�³2XU�WKLUG�SDUW\�JHQHUDWHG�GHDOHU�UHYLHZV�DQG�UDWLQJV�KDYH�KHOSHG�FDU�VKRSSHUV�WR�GHWHUPLQH�DQG�

YDOLGDWH�ZKLFK�GHDOHUVKLSV�WKH\�ZRXOG�OLNH�WR�GR�EXVLQHVV�ZLWK�´�'HDOHU5DWHU�SUHVLGHQW�&KLS�*UXHWHU�VDLG��³:H�EHOLHYH�WKH�LQWHJUDWLRQ�RI�&RQWDFW�$W�2QFH��FKDW�ZLOO�HQDEOH�RXU�FHUWL¿HG�GHDOHUV�WR�FRQQHFW�ZLWK�LQ�PDUNHW�FRQVXPHUV�LQ�D�ZD\�WKDW�LV�IDVWHU�DQG�PRUH�FRQYHQLHQW�WKDQ�DQ�HPDLO�RU�D�SKRQH�FDOO�´7KH�&RQWDFW�$W�2QFH��GHDOHU�FKDW�QHWZRUN�LQFOXGHV�WKLUG�SDUW\�OLVWLQJ�VLWHV�VXFK�DV�$XWR7UDGHU�FRP��

&DUV�FRP�DQG�8VHG&DUV�FRP��DV�ZHOO�DV�VWDQGDORQH�GHDOHUVKLS�DQG�GHDOHU�JURXS�ZHE�SDJHV�2QFH�HQDEOHG��GHDOHUV�FDQ�UHVSRQG�WR�FRQVXPHU�FKDWV�RULJLQDWLQJ�IURP�DQ\ZKHUH�LQ�WKH�GHDOHU�

FKDW�QHWZRUN��'HDOHUV�WKDW�XVH�GHDOHU�OLYH�FKDW�W\SLFDOO\�H[SHULHQFH�D��SHUFHQW�LQFUHDVH�LQ�RQOLQH�VKRSSHUV�FRQWDFWLQJ�WKH�GHDOHUVKLS��

IL_0912.indd 21 8/13/12 2:05 PM


22


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

There is no denying that dealers and

lenders have grown accustomed to a

regulatory environment that is constantly

changing, with new laws and regulations.

But today’s regulatory landscape is

different than it was years ago – and not

MXVW�EHFDXVH�WKH�UHTXLUHPHQWV�FRQWLQXDOO\�change.

If you feel like it’s becoming increasingly

FRPSOH[��\RX¶UH�QRW�DORQH��+HUH�DUH�WKH�likely culprits:

Shorter notice: Some states have

started publishing regulatory changes

RQ�UDWKHU�VKRUW�QRWLFH��)RU�H[DPSOH��LQ�1HZ�0H[LFR�WKH�DWWRUQH\�JHQHUDO�UHFHQWO\�gave 30 days’ notice to add a new spot

delivery disclosure to the sales transaction

document or purchase order.

The short notice was made worse

because a proposed regulation had not

been published – at least not recently – so

WKH�¿QDO�UHJXODWLRQ�FDPH�DV�D�VXUSULVH�WR�the industry. While one month might feel

Regulatory Landscape Feeling Tougher? You’re Not Alone

like a long time to add one

disclosure, the required

notice is quite large and

requires substantial

formatting changes to the

documents affected.

The attorney general

eventually delayed the

effective date of the regulation

E\��GD\V��DSSDUHQWO\�DIWHU�VLJQL¿FDQW�LQGXVWU\�IHHGEDFN��

More frequent changes and updates: Across the country, there seem

to be more frequent changes being made.

That has clearly been the case with state

motor vehicle title forms. Previously, those

forms were rarely revised. But over the

past few years, some states have changed

their title forms as many as two or three

times per year.

One potential driver for that might

be that technology now allows states to

redesign and reissue their forms and revise

�LQFUHDVH��WKH�UHODWHG�IHHV�PRUH�HDVLO\��%XW�often the changes come with little or no

notice, which underscores how important it

LV�IRU�GHDOHUV�DQG�OHQGHUV�WR�EH�FRQ¿GHQW�LQ�their ability to monitor the changes that are

constantly taking place.

Volume of information: While it

FDQ�EH�GLI¿FXOW�WR�NHHS�XS�ZLWK�WKH�SDFH�RI�change and various deadlines and effective

dates, it’s also quite a task to consume

the volume of information and content

surrounding new laws and regulations.

)RU�H[DPSOH��WKH�&RQVXPHU�)LQDQFLDO�3URWHFWLRQ�%XUHDX��&)3%��SXEOLVKHG�D�SURSRVHG�UXOH�-XO\��UHJDUGLQJ�LQWHJUDWHG�mortgage disclosures under RESPA and the

7UXWK�LQ�/HQGLQJ�$FW��,W�ZDV�RQH�RI�WKH�¿UVW�VLJQL¿FDQW�SURSRVHG�UXOHV�IURP�WKH�&)3%��DQG�WKH�SODQQLQJ�SURFHVV�LQYROYHG�H[WHQVLYH�research and solicitation of industry and

consumer feedback.

As a result, the proposed rule and

H[SODQDWRU\�PDWHULDOV�WRWDO�PRUH�WKDQ�1,000 pages. The good news is the

SURSRVHG�UXOH�SURYLGHV�VLJQL¿FDQW�GHWDLOV�DQG�H[SODQDWLRQV�RI�WKH�FKDQJHV��7KH�EDG�news is that many pages of material can be

overwhelming (aren’t you glad you’re not in

WKH�PRUWJDJH�OHQGLQJ�EXVLQHVV"��Operating in a highly regulated industry,

one can’t help but wonder if that is an

indication of the volume of change yet to

come and how dealers and lenders will

absorb all of the changes and their nuances.

Disparate technology systems: Though computer technology allows us

to do many things faster than before,

GLVSDUDWH�¿OH�IRUPDWV��¿HOG�QDPLQJ�conventions, calculation engines,

software and hardware, and reliance on

PXOWLSOH�YHQGRUV�FDQ�PDNH�LW�GLI¿FXOW�to quickly change or revise transaction

documentation and its completion tools.

That often means all the component parts

need to be updated in sequence rather than

in parallel – adding more time to make the

required changes.

Today’s environment is characterized

not only by constant change, but by

tougher enforcement as well. There is

more visibility and greater scrutiny of

compliance and risk management in all

RUJDQL]DWLRQV��'HDOHUVKLSV�DQG�¿QDQFLDO�institutions should regularly question

ZKHWKHU�WKH\�IHHO�FRQ¿GHQW�WKDW�QHZ�ODZV�and regulations are being embedded in

their business operations.

The challenges underscore a need for

JUHDWHU�RSHUDWLRQDO�HI¿FLHQF\��'LVSDUDWH�systems and procedures can make even

relatively simple changes more time-

FRQVXPLQJ�DQG�FRPSOH[�As you prepare for additional changes,

consider reviewing your process maps,

technology, vendor coordination and

steps necessary to respond to compliance

changes. Creating greater operational

HI¿FLHQF\�QRZ�ZLOO�PDNH�LW�WKDW�PXFK�HDVLHU�for you to respond to the

LQHYLWDEOH�QH[W�FRPSOLDQFH�crunch-time event.

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

IL_0912.indd 22 8/13/12 2:05 PM


23


IL_0912.indd 23 8/13/12 2:05 PM

IL_0912.indd 24 8/13/12 2:05 PM

Documents

IIADA Dealers Edge Sept/Oct 2012