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IS TECHNOLOGY - OR THE LACK OF IT - COSTING YOU?

inside• DON’T BE SCAMMED • STATE FORM REVISED• THE CARLAWYER

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

V i s i t u s a t w w w . i i a d a . c o m

MARCH 2012

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CAR LINESINDIANA

25CELEBRATING

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YE

ARS OF SERVICE

1987-2012

OFFICIAL VOICE OF THE INDEPENDENT CAR DEALER IN INDIANA

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MARCH 2012 C A R L I N E S

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

DON’T BE SCAMMED BY CYBER CRIMINALS

The Internal Revenue Service receives thousands of reports each year from taxpayers who receive

suspicious emails, phone calls, faxes or notices claiming to be from the IRS. Many of these scams fraudulently use the IRS name or logo as a lure to make the com-munication appear more authentic and enticing.

The goal of the scams – known as phishing – is to trick you into revealing your personal and financial information. The scammers can then use your infor-mation, like your Social Security number, bank account or credit card numbers, to commit identity theft or steal your money.

Here are five things the IRS wants you to know about phishing scams:

1. The IRS never asks for detailed personal and financial information like PIN numbers, passwords or similar secret

access information for credit card, bank or other financial accounts.

2. The IRS does not initiate contact with taxpayers by email to request personal or financial information. If you receive an email from someone claiming to be the IRS or directing you to an IRS site, do not reply to the message. Do not open any attachments – attachments may contain malicious code that will infect your computer. And do not click on any links. If you have clicked on links in a suspicious email or phishing web site and entered confidential information, visit the IRS web site and enter the search term ‘identity theft’ for more information and resources to help.

3. The address of the official IRS web site is www.irs.gov. Do not be confused or misled by sites claiming to be the IRS but ending in .com, .net, .org or other desig-

nations instead of .gov. If you discover a web site that claims to be the IRS but you suspect it is bogus, do not provide any personal information on the suspicious site and report it to the IRS.

4. If you receive a phone call, fax or letter in the mail from an individual claim-ing to be from the IRS but you suspect he is not an IRS employee, contact the IRS at 1-800-829-1040 to determine if the IRS has a legitimate need to contact you. Report any bogus correspondence. You can forward a suspicious email to [email protected].

5. You can help shut down these schemes and prevent others from be-ing victimized. Details on how to report specific types of scams and what to do if you’ve been victimized are available at www.irs.gov. Click on “phishing” on the home page.

Here are five things the IRS wants you to know about phishing scams

THINK WHAT HAPPENS IN INDIANAPOLIS

There are many bills moving through the Legislature this session that will affect Indiana dealers. We have been meet-ing with legislators concerning these and many other issues. We are working to protect your business!

Join IIADA today and make your voice heard!Call 800.310.3112 for more information

DOES NOT AFFECT YOUR BUSINESS?

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C A R L I N E S MARCH 2012

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IIADA EXECUTIVE DIRECTORDebbie AndersenP.O. Box 1393Crown Point, IN 46308Phone: (800) 310-3112Fax: (219) [email protected]

CHAIRMAN OF THE BOARDDave Allen (Crockett)

VICE PRESIDENT Fritz KreutzingerFritz AssociatesP.O. Box 168Fishers, IN 46038 Phone: (317) 842-2228Fax: (317) [email protected]

SECRETARYTricia TrentTrent Auto Sales1327 N 6th Street Vincennes, IN 47591 Phone: (812) 882-3772Fax: (812) [email protected]

TREASURERBruce NortonDrive1USA1512 W 96th Avenue, Suite C Crown Point, IN 46307Phone: (219) 661-1000Fax: (219) [email protected]

Jennifer CottonDyer Auto AuctionP.O. Box 115 Dyer, IN 46113-0115 Phone: (219) 865-2361Fax: (219) [email protected]

Kim GrahamKim Graham, Inc.1648 A US 31 SGreenwood, IN 46143Phone: (317) 888-0100Fax: (317) [email protected]

Ed WhiteWhite’s Auto Sales1105 McKinley Avenue Rensselaer, IN 47978Phone: (219) 866-7553Fax: (219) [email protected]

Tony HoukKesler-Schaefer Auto Auction, Inc. 5333 W. 46h StreetIndianapolis, IN 46253Phone: (317) 297-2300(800) [email protected]

Tyler TrentTrent Auto Sales1327 N 6th Street Vincennes, IN 47591Phone: (812) 882-3772Fax: (812) [email protected]

Harold DreesH.T.D., Inc.200 E Main StreetThorntown, IN 46071Phone: (317) 402-2312Fax: (765) [email protected]

Tony Del RealDel Real Auto Sales3857 State Road 38 ELafayette, IN 47905Phone: (765) 446-9204Fax: (765) [email protected]

John StumpfElkhart Public Auto Auction1201 N. NappaneeElkhart, IN 46514Phone: (574)264-0148

Doug AlveyFirst Class Auto Sales, Inc695 W 900SHebron, IN 46341Phone: (219) 996-2600Fax: (219) [email protected] Sharon BrennanFritz in Fishers8599 E 116th StreetFishers, IN 46038Phone: (317) 842-2228Fax: (317) [email protected] Andrew J. InabnittApproval Auto Credit Inc.9825 Huggin Hollow Rd.Martinsville, IN 46151Phone: (317) 422-8001Fax: (317) 422-8020

David D. Baldwin IIBest Deal Auto Sales, Inc.1875 SR 8Auburn, IN 46706Phone: (260) [email protected]

Andy ZayZay Leasing & Rentals4957 N. BroadwayHuntington, IN 46750(260) [email protected]

Mark HockettIndianapolis Car Exchange5161 S. Indianapolis Rd.Whitestown, IN 46075(317) [email protected]

John StumpfElkhart Public Auto Auction1201 N. NappaneeElkhart, IN 46514Phone: (574)264-0148

Doug AlveyFirst Class Auto Sales, Inc695 W 900SHebron, IN 46341Phone: (219) 996-2600Fax: (219) [email protected]

Sharon BrennanFritz in Fishers8599 E 116th StreetFishers, IN 46038Phone: (317) 842-2228Fax: (317) [email protected] Andrew J. InabnittApproval Auto Credit Inc.9825 Huggin Hollow Rd.Martinsville, IN 46151Phone: (317) 422-8001Fax: (317) 422-8020

David D. Baldwin IIBest Deal Auto Sales, Inc.1875 SR 8Auburn, IN 46706Phone: (260) [email protected]

Andy ZayZay Leasing & Rentals4957 N. BroadwayHuntington, IN 46750(260) [email protected]

Mark HockettIndianapolis Car Exchange5161 S. Indianapolis Rd.Whitestown, IN 46075(317) [email protected]

Travis HuberThe Auto Store5474 US Hwy 6, Suite APortage, IN 46368Phone: [email protected]

MAGAZINECONTENTS

ADVERTISERSINDEX

INSIDE

ADVERTISERSINDEX

WHAT’SNEW

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM • WWW.NIADA.TVNIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR [email protected] LINES IS PUBLISHED 10 TIMES PER YEAR BY THE NATIONAL IN-DEPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPO-RATION, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203; PHONE 817-640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT ADDITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 BROWN BLVD., ARLINGTON, TX 6006-5203. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECES-SARILY REPRESENT THE VIEWS OF CAR LINES OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEM-BERS OF NIADA , DOES NOT CONSTITUTE AN ENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT © 2012 BY NIADA SERVICES, INC.

STATE MAGAZINE MGR./SALES Troy Graff • [email protected] Andy Friedlander • [email protected]/PRODUCTION MGR. Christy Haynes • [email protected] Nieman Printing

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R A2Z EDUCATION SERIES - AutoZoneEducating the independent dealer to deliver the highest quality service levels to your customers, manage your shop efficiently, train your technicians and maximize profits.niada.tv

R TURBO TIPS – Cars.comProvides Independent Dealers with practicable and actionable tips to help you sell more cars now! niada.tv

R World Automobile Auctioneers Championship Live online coverage of the event begins at 11 am ET on Friday, March 3O, 2012 and is free for all online viewers. visit www.niada.com and click on the “EVENTS” tab or call (303) 807-1108.

03 Don’t Be Scammed08 The CARLAWYER10 Is Technology Costing You?14 Education-Luxury or Necessity?16 IIADA Member Benefits

ADESA .................................................. Inside Front CoverAutoTrader.com ................................................ Back CoverDyer Auto Auction ..........................................................12Indiana Auto Auction ........................................................8Kesler-Schaefer Auto Auction ..........................................7Manheim.com ...................................... Inside Back CoverManheim Indianapolis ....................................................13SmartAuction ...................................................................5United Acceptance ........................................................11

PHYSICAL INSPECTION OF A VEHICLE OR WATERCRAFT – STATE FORM 39530 REVISED

Physical Inspection of a Vehicle or Watercraft – State Form 39530 has been revised effective Jan. 1, 2012 to account for the law change allowing BMV partial service branches (PSB) to perform motor vehicle inspections (IC 9-17-2-12 version b).

The updated form will be available on MainStreet and myBMV. The new version has combined VIN and HIN inspections onto a one-page form and requires police officers completing the form to perform an IDACS/NCIC check.

The Motor Vehicle Title Manual posted on MainStreet has been revised to account for the law change.

The previous version of the form may be accepted until June 30, 2012.

Pete WoodDirector of Strategic PartnersIndiana Bureau of Motor VehiclesIndiana Government Center – North100 Senate Avenue, Room N440Indianapolis, IN 46204317-460-3382 Cell317-233-3517 [email protected]

BOARD OF DIRECTORS

THE WORLD AUTOMOBILE AUCTIONEERS CHAMPIONSHIP will be webcast live this year for the first time, courtesy of NIADA.TV. The live webcast of the 2012 WAAC can be viewed in its entirety on the home pages of www.niada.tv, www.niada.com and www.waacnet.net . Coverage begins at 11 a.m. Eastern time on Mar. 30 and is free for all online viewers. Cheer on your hometown favorite auctioneers and ringmen, and catch all the fun and excitement of the 2012 World Automobile Auctioneers Championship at your leisure, exclusively on all three websites. For more detailed information please visit www.niada.com and click on the “Events” tab, or call (303) 807-1108.

WORLD AUTOMOBILE AUCTIONEERS CHAMPIONSHIP

WORL

D AUTOMOBILE

CHAMPIONSHIP

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OR CONTACT SHAWN

FOSTER AT 765-479-0191 OR [email protected].

In May 2009, indepen-dent auto dealer Shawn Foster of Car Nation

felt like things were get-ting better. He had two dealerships in Lafayette,

Ind., and the bleeding had slowed – or so he thought.

But in the following month, he lost two family members in two weeks, and before the month was over, his comptroller told him he was missing $300,000. When the counting was done, it was closer to $500,000.

Reeling and desperate, Foster was forced to make some painful decisions. After closing one of his dealerships and letting half of his staff go, he talked to his wife and they decided they could make a run and try to save what they had spent the previous seven years build-ing. It wouldn’t be easy, but if they could figure out a way to work with what they had, they might have a chance.

When he told his bank what had happened, Foster lost his main floor plan source, severely reducing his ability to buy cars. He was forced to begin very methodically tracking his cars and how fast they could sell given his lending sources. For nearly two years, Foster and his father spent all of their time buying cars that only fit the lenders they used.

“If we couldn’t sell it, we didn’t buy it, pe-riod,” he said.

Or that was the theory. It was very daunt-ing task given the state of the auctions and inventory.

It was while on the way home from an auc-tion in March 2011 that Foster realized what he had been doing for the previous two years could be done a whole lot easier.

By mapping his “DNA,” or dealer’s known ability, he realized every car he bought could be qualified before he bought it. With today’s technology and the ability of smart phones, the idea for Bidzpin was born.

If the programs lenders used to structure deals were quantifiable after you own the car, why not find out before you buy it.

After three sleepless weeks trying to determine if his idea could really be done, he started calling appraisal tool companies to see if they had any interest in a new idea. Because he didn’t want to play his hand, “they basically told me to take a hike,” he said.

Foster was forced to make a decision. After meeting a small software developer through a customer at his dealership, Bidzpin went into production May 1, 2011. With a prototype in hand, Foster and his father were able to go to auctions and buy cars that exactly fit the dealership’s ability to sell them.

It was the first sale of the month at India-napolis Car Exchange and Foster was in the lane. The vehicle on the block was a 2003 Chevy Trailblazer and the bid had stalled. Foster bought the vehicle because the Bidzpin program said he should. Four days later, it made $5,500 at the dealership – from a ve-hicle everyone else was walking away from.

“That’s when I knew I was on to something,” Foster said.

After five months of programming and de-velopment, Bidzpin went on sale in the Apple Store on Sept. 1, 2011. It launched nationally in October and was named one of three top products at the 2011 SubPrime Conference in Las Vegas.

By mapping his “DNA” exactly to his cars before he buys them, Foster’s profitability has risen significantly. Gross profits per car sold are up $1,400 over last year. His dealership is averaging almost $4,000 per unit. He said he needs much less inventory because “when every car fits, you don’t need as many.” His store has taken 75 percent fewer cars to auc-tion because the cars he buys are a better fit for his store. Sales are down 40 percent, but because of an increase in gross profit, Foster will make more at year’s end.

“I invented this product for me, not to sell,” he said. “Once we began to understand what was possible, it was then that we decided to market to other dealers.

“If I hadn’t built this product, I don’t believe I could have survived this year’s drop in busi-ness. I hope I can help other dealers the same way I helped myself. This product does so much, it is really hard to comprehend.”

Bidzpin can match a dealership’s known abilities to the car on the auction block. By un-derstanding the dealership’s lenders, a dealer can significantly increase his performance. A dealer’s “DNA” is determined by his customers, his cars, his lenders and their books, not his.

The program runs on a series of “traffic lights” using green, yellow and red signals. By presetting the dealership’s lenders, profit target, average reconditioning and doc fee, Bidzpin can take all of the questions out of buying cars. If the light is green, the deal is clean. If the light is red, the deal is dead. It’s that simple.

The lender boxes calculate the exact deal structure a lender’s guidelines call for and subtract all discounts and fees as well.

“The calculations are ridiculous,” Foster said. “There is no way anyone could do them correctly, let alone fast enough in the auction lane. BIdzpin does all the math and shows the user the predicted gross profit at each lender as well. If you you don’t have a lender that will finance the vehicle, it doesn’t matter how cheap it is.

“There are all kinds of appraisal tools that give you book values, market reports, and other data from the internet. But if you don’t match the car to the lender, nothing else mat-ters. Where other products teach a dealer to buy cars and sell them cheaper than anyone else, Bidzpin does just the opposite. It will teach a dealer to buy cars and sell them for the most profit he can. What makes more sense?”

DEALER SAVES HIS DEALERSHIP WITH A BIG IDEA

FOR MORE INFORMATION, VISIT WWW.BIDZPIN.COM

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NIADA NAMES OHIO FIRM AS NEW LEGISLATIVE COUNSELOhio-based law firm Mac Murray, Petersen &

Shuster LLP has been named legislative/reg-ulatory/compliance counsel for the National

Independent Automobile Dealers Association, NIADA chief executive officer Michael Linn announced.

The firm, based in New Albany, Ohio and led by former Ohio attorney general and state senator Betty Montgomery, will add additional expertise to NIADA’s legislative and regulatory efforts in Washington D.C. to stay ahead of issues affecting the association and its approximately 18,000 members.

“Adding Mac Murray, Petersen & Shuster to the efforts of Federal Advocates, NIADA’s lobbing firm on Capitol Hill, will round out our strategy to work more closely with key federal regulatory agencies,” Linn said. “Staying ahead of rapidly expanding agencies like the CFPB (Consumer Finance Protection Bureau)

will be much easier as Betty and her team engage key relationships with their former colleagues at key federal agencies like the CFPB and the FTC.”

In addition to Montgomery, three former Ohio assis-tant attorneys general will be advising NIADA on com-pliance updates and changes in government regula-tions to the automotive industry. Shaun Petersen, Michele Shuster and Helen Mac Murray all served as chiefs of the Ohio AG’s Consumer Protection Section. Together they have more than thirty years of experi-ence managing consumer protection initiatives and helping businesses comply with those programs.

Petersen’s extensive work representing auto deal-ers in Ohio through the Ohio Independent Automobile Dealers Association gives him a deep understanding of dealer operations and concerns. He will act as NIADA’s lead counsel from the firm.

THREE FORMER OHIO ASSISTANT ATTORNEYS GENERAL WILL BE ADVISING NIADA ON COMPLIANCE UPDATES AND CHANGES IN

GOVERNMENT REGULATIONS TO THE AUTOMOTIVE INDUSTRY.

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The CARLAWYER ©All the federal news this month deals

with the Consumer Financial Protection Bureau.

On Dec. 8, Republicans in the U.S. Senate voted to block the nomination of Richard Cordray as the first director of the bureau. The vote was 53-45, with 60 votes required to move the nomination ahead. Republicans seek significant structural changes to the CFPB, including having the director position replaced by a five-member commission, and increased oversight.

President Obama nevertheless appointed Mr. Cordray by using his power to make recess appointments, a move that bypasses the Senate’s confirmation process altogether. The move provoked a hostile reaction from Senate Republicans, who claim Mr. Obama did not have the power to make the appointment. We expect that dispute to end up in court.

The bureau recently published for public comment interim final rules establishing a new Regulation M (Consumer Leasing), Regulation F (Fair Debt Collection), Regulation P (Privacy of Consumer Financial Information), Regulation V (Fair Credit Reporting), Regulation B (Equal Credit Opportunity) and Regulation Z (Truth

in Lending). The interim final rules do not impose any new substantive obligations. To minimize confusion, the CFPB is preserving the numbering of the regulations other than the new part number.

While the interim final rules generally incorporate the existing regulatory text, appendices (including model forms and clauses) and supplements, as amended, the rules have been edited as necessary to reflect nomenclature and other technical amendments required by the Dodd-Frank Act. The interim final rules were effective Dec. 30, 2011. Comments on the rules are due 60 days after publication in the Federal Register, which has already occurred.

On Nov. 29, the bureau announced it is requesting specific suggestions from the public for streamlining regulations it recently inherited from other federal agencies. The inherited regulations include those issued pursuant to the Consumer Leasing Act, the Electronic Fund Transfer Act (except with respect to Section 920 of that Act), the Equal Credit Opportunity Act, the Fair Credit Reporting Act (except with respect to Sections 615(e) and 628 of that Act), the Fair Debt Collection Practices Act,

Subsections (b) through (f) of Section 43 of the Federal Deposit Insurance Act, Sections 502 through 509 of the Gramm-Leach-Bliley Act (except for Section 505 as it applies to Section 501(b)) and the Truth in Lending Act.

The notice asked the public to identify provisions of the inherited regulations the CFPB should make the highest priority for updating, modifying or eliminating because they are outdated, unduly burdensome or unnecessary. The notice discussed several specific requirements that may warrant review and sought suggestions for practical measures to make complying with regulations easier. Comments are due by March 5, 2012. Commenters will have 30 additional days, until April 3, to respond to other comments.

Have you fired anyone lately? Are they mad at you? If you are doing bad stuff at your dealership, would they be interested in “blowing the whistle” on you?

Now they can. On Dec. 15, the bureau issued a blog post, news release and bulletin to solicit information from whistleblowers and other knowledgeable sources about potential violations of federal consumer financial laws. The CFPB is welcoming information from current or former employees, contractors, vendors and competing companies.

People can submit tips by email at [email protected] or on a toll-free number. Early next year, the CFPB plans to introduce an online tips portal accessible through its web site. Whistleblowers can request confidentiality or even remain anonymous to the extent permitted by law, though the bureau notes that providing contact information can assist it in investigating and remediating potential violations. Certain employees who provide information about potential violations of federal consumer financial laws are protected from retaliation from their employers under Section 1057 of the Dodd-Frank Act.

On Dec. 8, the bureau announced it has established an ombudsman’s office to assist in the resolution of issues that a depository entity, non-depository entity or consumer has with the CFPB in an “independent, impartial and confidential way.” The CFPB said people can use the ombudsman’s office when they have not had success with existing CFPB processes, to achieve an informal resolution, or to keep their concerns confidential.

STATE ENFORCEMENT ACTIONSOn Dec. 15, the Colorado Motor Vehicle

Dealer Board issued an advisory concerning advertising violations in TrueCar materials and on its web site. The advisory said any Colorado

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The CARLAWYER ©licensed dealer using TrueCar to promote and list its vehicles to consumers is ultimately responsible for any such violations.

Oregon Attorney General John Kroger and two Oregon-based used car dealerships recently settled allegations that their business practices misled consumers. Among the requirements of the settlement: The dealerships must post the advertised price on a vehicle, not misrepresent the market price in negotiations, disclose material defects, not misrepresent that a service contract is a warranty, provide required disclosures about financing offers, not use the name “broker” when they are not acting on behalf of the consumer, sell vehicles that are roadworthy, and not sell vehicles as “parts only” rather than disclose serious defects. The dealerships are required to pay $10,000 each for the alleged violations.

Washington Attorney General Rob McKenna entered into a settlement with a car dealership to resolve allegations of deceptive sales and advertising practices, including allegations that it “power booked” loans by misrepresenting the value of vehicles to banks. “Power booking” involves a dealer listing phantom options such as a sun roof, a luggage rack or a sport package in order to qualify customers for financing.

LITIGATIONFederal Arbitration Act did not preempt

state restrictions on arbitration of insurance contracts: When car buyers bought and financed their cars, they signed a credit application that included an arbitration agreement. In connection with the car purchases, they bought credit life insurance. After paying off the retail installment contract early, the buyers sued the insurer, seeking a refund of unearned credit life insurance premiums. The insurer moved to compel arbitration. The buyers argued that the claim was not subject to arbitration because the Arkansas Uniform Arbitration Act provides that an insurer cannot compel an insured to arbitrate claims arising under an insurance policy.

The trial court denied the motion to compel arbitration, and the Supreme Court of Arkansas affirmed. The high court noted that although the Federal Arbitration Act would ordinarily preempt conflicting state law, the McCarran-Ferguson Act operates to bar application of the FAA and leaves the regulation of the insurance industry to the states if the applicable federal statute does not specifically relate to insurance, the state statute was enacted to regulate insurance, and application of the federal statute would invalidate, impair, or supersede the state law. The high court determined that reverse preemption under the McCarran-Ferguson Act applied to the car buyers’ claims and found the FAA did not preempt the Arkansas prohibition on arbitration of insurance disputes. See Southern

Pioneer Life Insurance Co. v. Thomas, 2011 Ark. LEXIS 573 (Ark. November 17, 2011).

Florida statutes of limitations not applicable to arbitration claims unless expressly provided: Account holders at a financial services company filed arbitration claims with the National Association of Securities Dealers, Inc., and the company moved to dismiss the claims as barred by Florida’s statutes of limitations. The account holders then filed an action in state court seeking a declaratory judgment.

The trial court issued a final declaratory judgment stating that Florida’s statutes of limitations were not applicable to the arbitration claims because arbitrations are not “civil actions” or “proceedings” for purposes of Section 95.011, Florida Statutes. The Court of Appeal of Florida affirmed, concluding that Florida’s statutes of limitations are not applicable to arbitration claims when the parties have not expressly included a provision in their arbitration agreement stating they are applicable. The appellate court found the language in the account agreements at issue did not expressly state that Florida’s statutes of limitations applied to arbitration claims. However, the appellate court certified to the Florida Supreme Court the following question: “Does Section 95.011, Florida Statutes, apply to arbitration when the parties have not expressly included a provision in their arbitration agreement stating that it is applicable?” See Raymond James Financial Services, Inc. v. Phillips, 2011 Fla. App. LEXIS 18182 (Fla. App. November 16, 2011).

Rental car company not required to equip new vehicle purchased from reputable manufacturer with optional side airbags: An individual was ejected from a car he rented from a rental car company. The individual sued the rental car company and the car’s manufacturer, claiming the vehicle should have been equipped with side airbags. After the manufacturer settled with the individual, the rental car company moved for summary judgment, claiming, among other arguments, it could not be found liable for negligence because it owed no duty to equip the vehicle with optional side airbags.

The trial court granted summary judgment in favor of the rental car company and the U.S. Court of Appeals for the Second Circuit affirmed. The appellate court found the rental car company had no duty to equip its rental vehicles with optional safety features when it bought the car as new from a reputable manufacturer and was entitled to assume “the vehicles were not defectively designed, even absent the side curtain airbags.” See Noveck v. Avis Rent A Car System, LLC, 2011 U.S. App. LEXIS 23017 (2d Cir. (E.D.N.Y.) November 17, 2011).

Towing company converted car where it took car in violation of Servicemembers Civil Relief Act: An individual sued a company

for damages under the Servicemembers Civil Relief Act for towing his vehicle from the grounds of his apartment complex while he was deployed with the U.S. Navy. The trial court dismissed the lawsuit on its own motion because the SCRA does not provide a cause of action for damages.

While the individual’s appeal was pending, Congress amended the SCRA to allow servicemembers to recover money damages and attorneys’ fees. The U.S. Court of Appeals for the Fourth Circuit reversed, holding that the damages provision added to the SCRA after the individual filed his lawsuit could be enforced where the damages were consistent with existing state law for conversion. The towing company conceded liability with respect to the SCRA claim, but contested liability with respect to the conversion claim.

The U.S. District Court for the Eastern District of Virginia granted summary judgment on the conversion claim in favor of the individual. The court determined that the individual owned the vehicle at the time the towing company exercised dominion and control over it. The court found that the towing company failed to comply with the SCRA and, as a result, had no legal right to take the vehicle. See Gordon v. Pete’s Auto Service of Denbigh, Inc., 2011 U.S. Dist. LEXIS 139089 (E.D. Va. December 2, 2011).

Sale of car for more than its estimated wholesale value is prima facie evidence of a commercially reasonable sale: A finance company repossessed a vehicle from an individual after default and sued for the deficiency after the vehicle was sold at auction. The individual argued that the vehicle was not sold in a commercially reasonable manner. The trial court entered summary judgment in the finance company’s favor, and the Supreme Court of New York, Appellate Division, affirmed. It found that because the vehicle sold for $1,700 more than its estimated wholesale value, there was no genuine issue of fact as to whether the vehicle was sold in a commercially reasonable manner. See GMAC v. Jones, 2011 N.Y. App. Div. LEXIS 8387 (N.Y. App. Div. November 23, 2011).

So there you have it! Stay legal, and we’ll see you next month.

BY THOMAS B. HUDSON AND NICOLE FRUSH MUNROTOM ([email protected]) AND NIKKI ([email protected]) ARE PARTNERS IN THE LAW FIRM OF HUDSON COOK, LLC. TOM IS THE AUTHOR OF SEVERAL BOOKS, AVAILABLE AT WWW.COUNSELORLIBRARY.COM. TOM IS ALSO THE PUBLISHER OF SPOT DELIVERY®, A MONTHLY LEGAL NEWSLETTER FOR AUTO DEALERS, AND THE EDITOR IN CHIEF OF CARLAW®, A MONTHLY REPORT OF LEGAL DEVELOPMENTS IN ALL STATES FOR THE AUTO FINANCE AND LEASING INDUSTRY. NIKKI IS A CONTRIBUTING AUTHOR TO THE F&I LEGAL DESK BOOK AND FREQUENTLY WRITES FOR SPOT DELIVERY. SPOT DELIVERY, CARLAW AND THE BOOKS ARE PRODUCED BY COUNSELORLIBRARY.COM LLC. FOR INFORMATION, CALL 410-865-5411 OR VISIT WWW.COUNSELORLIBRARY.COM. COPYRIGHT COUNSELORLIBRARY.COM 2011, ALL RIGHTS RESERVED. SINGLE PUBLICATION RIGHTS ONLY, TO THE ASSOCIATION. (1/12) HC# 4829-1372-1870.

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Technology, or the lack thereof, could be costing you millions.

OK, millions might be a bit much, but thousands doesn’t sound much better. Either way, profit dollars could easily be leaving your pocket on a monthly basis at an alarming rate.

Technology, or the lack thereof, is costing dealers in every market and in every state in the country. The dealers in question are either technological junkies or technologically challenged. Neither scenario is conducive to success.

In the current economic climate, having and using what is necessary for the foreseeable future makes the best and only economic sense. Not too much, not too little.

Technology touches many facets of the Buy Here-Pay Here industry. Video surveillance, starter interrupt/GPS and software are the most popular areas for technological discussion in BHPH, and those areas seem to be the most under- and over-utilized as well.

Of the three, DMS software is the only one that is necessary for current and future success. The others? Well, that’s up to the dealer.

Video surveillance is probably more overused than the other two – too many dealers have thousands of dollars tied up in high-tech systems that are really not necessary. Those dealers have convinced themselves they are preventing not only outside theft, but internal theft as well. Surveillance systems have proven to aid in deterring both kinds of theft.

The decision whether to use video surveillance should be based on specific market conditions in regard to preventing

outside theft and providing additional security. A lot in a small rural market that displays 20 or so vehicles and employs a total of four people doesn’t necessarily need a 16 exterior color camera system with real-time web access. That example may seem extreme, but that dealer exists.

For preventing internal theft, the money might be better spent on developing the organization’s culture. Studies have shown office supplies are the most commonly pilfered items at a business, not money. This is a direct result of lack of pride and ownership in the business by the employee.

A background investigation and personality profile prior to hiring a new employee, and ongoing training and open lines of communication after hiring are ways to instill and improve an organization’s culture. There is a good possibility those steps will also reduce turnover and, in most cases, prevent if not halt employee theft – and will likely cost less than a surveillance system over time.

Payment devices – starter interrupt, GPS, and combo devices – are still a topic of great debate and ongoing discussion. This is an area that seems to be either black or white in most dealers’ eyes. Dealers seem to be 100 percent for them or 100 percent against them, with little in between.

Data shows such devices can increase collections dollars and, in some cases, reduce the amount of personnel needed to manage a portfolio. Data also shows they do not have a significant impact on loss rates. That data is what causes the “all-in” or “all-out” mentality. There are just as many highly successful dealers not using the devices as there are using them.

As with any technological advance, they are only effective if used as directed or intended. Too many dealers don’t. And by not doing so, they are wasting money.

The decision to use payment devices, and specifically which kind, is a significant one. It is a decision that should be based solely on the dealer’s personal business philosophy. As with any business decision, it shouldn’t be made until all the homework is done. Also not to be overlooked in the decision-making process is preparing internally. Policies and procedures will have to be created and implemented.

Last, but definitely not least, is DMS software. This is an area where dealers have a tendency to cut corners and cost themselves in the long run. Bigger is not necessarily better.

Software packages have undergone significant technological advances in recent years, and there are an increasing number of provider options. For better or worse, nowadays there seem to be more providers than actual dealers. That’s better in that more options provide a more diversified product offering and pricing structure. It’s worse in that when it comes time to choose a system, a dealer can be buried by information overload and the process can become overly time-consuming when he’s trying to comparison-shop.

Technology can take any business to the next level. Technology can also set any business back. The key lies somewhere between being a junkie and being challenged.

Which one are you?

BY BRENT CARMICHAELEXECUTIVE CONFERENCE MODERATORNCM ASSOCIATES [email protected]

IS TECHNOLOGY - OR THE LACK OF IT- COSTING YOU?

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Manheim has agreed to purchase Dealer Services Corporation (DSC), a used vehicle floor plan company for independent dealers based in Carmel, Ind. The acquisition complements Manheim’s current lending products provided through

Manheim Financial Services (MAFS).Manheim said the move reinforces its commitment to provide inventory financing to

independent dealers. “Manheim is always looking for ways to enhance its service offering to customers,”

Manheim president Sandy Schwartz said. “The purchase of DSC presents a great op-portunity for us to broaden our lending scope and customer base. In addition, we gain access to state-of-the-art technology and digital tools that will enhance our customers’ experience and improve the company’s efficiencies and opportunities for lending.”

Adding the DSC line to MAFS’s existing products will give dealers access to broader offerings and additional staff to serve their needs both in-lane and online, as well as technology designed to make it easier for customers to get information about Manheim lines of credit through their smart phones and desktops.

CEO Brian Geitner will remain in charge of DSC, which had been the largest inde-pendently owned inventory finance provider for used vehicles.

“Like Manheim, DSC is a company that focuses on the success of its customers,” Geitner said. “Our mission of empowering our customers with strategic products and services is only more enhanced by joining the Manheim group of companies. It’s easy to see how MAFS’ and DSC’s service platforms will complement each other and broaden Manheim’s service reach across the country.”

MANHEIM PURCHASES FLOOR-PLAN PROVIDER DSC

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Automotive inventory management company RedBumper unveiled its SmartApp at the NADA Convention and Expo in February. SmartApp is the first mobile app on the market to include built-in VIN and QR scanners for use by consumers.

RedBumper’s apps allow auto dealers to choose from several template designs while seamlessly incorporating the dealer’s branding. The QR scanners allow the dealer to encourage consumers to download his app in an endless variety of promotions, while the VIN scanner allows the dealer to be connected in real time to the consumer.

The mobile SmartApp enables a customer to get an immediate cash offer for his vehicle from the dealer with a VIN scan and a click, and allows the dealer to interact and bid for the customer’s vehicle in a matter of minutes. The app’s “Price Shopper” tool lets a customer scan a vehicle he’s interested in and displays all similar local listings, so the customer can see the best price in the market. The app issues a price challenge from the sponsoring dealer challenging the best price found by the consumer.

“SmartApp allows the dealer to monitor his customer’s scan activity in real-time,” RedBumper founder Bruce Thompson said. “For the first time a dealer can see where the customer has been shopping and what pricing he has seen prior to negotiations. … SmartApp gives our dealers a fantastic and unique ability to proactively beat their competition by providing the consumer with a powerful tool and becoming part of the customer’s shopping process.”

For more information call 1-888-339-1116 or visit www.redbumper.com.

NEW APP MAKES DEALERS PART OF SHOPPING PROCESS

NOWCOM RENEWS GOLD PARTNERSHIP WITH NIADANowcom, a leading provider of dealer

management solutions, announced it has renewed its partnership with

the National Independent Automobile Dealers Association for a second year as a Gold National Corporate Partner.

Nowcom has worked with NIADA since 2005. It became a Preferred Partner in 2009, a Bronze Corporate Partner in 2010 and began as Gold National Corporate Partner in 2011. NIADA Member Services partners with industry leaders that offer excellent services to help their members grow their business, protect their assets and enhance profitability.

The NIADA Member Services National Corporate Partner Program was formed in 2010 to provide NIADA members with an extensive, highly vetted roster of partners they can rely on to provide a broad portfolio of services they use on a daily basis. Through discounted affinity agreements, NIADA Member Services offers numerous member benefit services. For dealers with neither the time nor staff to conduct thorough supplier evaluations, NIADA members look to NIADA Member Services for outstanding partner recommendations and discounts.

Nowcom is the provider of DealerCenter.net, an all-in-one web-based dealer management software system that allows the dealer full control over sales, inventory, credit reports, insurance offering and financing.

For more information, visit www.nowcom.com.

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NORTHWOOD HONORS DEALERS WITH DEALER EDUCATION AWARDS

Seven car dealers from the United States, Germany and the Netherlands were named winners of Northwood University’s annual Dealer Education Awards, which recognized the dealers for their contributions and efforts to improve

education at all levels.The winners were: Byron T. Brisby of Flemington Car & Truck Country in Flemington,

N.J.; Daniel G. DeVos of DP Fox Ventures LLC in Grand Rapids, Mich.; Charles T. (Chip) Lindsay III of Lindsay Cadillac in Alexandria, Va.; J. Douglas North of North Brothers Ford in Westland, Mich.; Collin M. Sewell of Sewell Family of Companies in Odessa, Texas; Susanne Bautz of Germany’s Autohaus Bautz & Klinkhammer GmbH & Co. ; and Eric Tak of Bovag Autodealers in the Netherlands.

The awards were presented at the NADA convention in Las Vegas. Northwood has been giving the awards since 1972.

“We have been recognizing outstanding dealers for 41 years and there has never been a time when their contributions have meant more to their communities than they do today,” Northwood president Keith A. Pretty said. “These leaders have made outstanding sacrifices of time and resources. We are proud of all the Dealer Education Award winners and commend them for their leadership.”

Internet searches for full-size trucks are up and those for compact cars are down, and that could be good news for the economy,

according to Autoshopper.com.Searches on Autoshopper.com for pickup

trucks, led by the Ford F-150, have risen significantly in January 2012, said Dani Lunsford, the web site’s national marketing executive. Meanwhile, searches for compacts, which had soared during the toughest economic times, declined slightly.

Lunsford said part of the reason for the change is that the construction industry is picking up, prompting more consumers to look for heavy duty work-related vehicles. Business Insider magazine recently reported that the construction industry is adding jobs after five years of shedding workers, and construction spending rose sharply in December. Construction jobs have historically been a key component of economic recovery.

“The renewed interest in full-size trucks and the decline in searches for compact cars show an uphill trend in workload related jobs, a positive economic indicator for all of us,” Lunsford said. “This continued economic recovery has the middle-class American looking for a larger, less fuel-efficient vehicle to carry out the workload requirements of newly created jobs in the construction field.”

A SIGN OF RECOVERY: MORE TRUCK SEARCHES

THE AWARDS WERE PRESENTED AT THE NADA CONVENTION IN LAS VEGAS. NORTHWOOD HAS BEEN GIVING THE AWARDS SINCE 1972.

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It was recently suggested to me that dealers might be viewing the education of their employees as a “luxury.” We all understand

that when a company’s belt is tightened, advertising and education are among the first expenses to be cut.

But can education actually be viewed as a luxury item?

For years, most of us on every level have been doing more with less. How is that possible? The answer is we used the education and technology we have invested in. We have made some difficult choices regarding employees in addition to changing our processes.

Using technology for education has once more been brought into the spotlight. While e-learning has been around for many years, it has not been widely used. Many who sit on the sidelines continue to wonder why – after all, it saves on travel expenses.

Many dealers have expressed the opinion that e-learning should be free. All I can say to that is: Do you sell units and expect to earn zero gross profit? Of course, you go to work to gain a profit. We all do that. So why would you expect educators to give away what they know for free?

Of course, e-learning saves on travel. If you want to know how much, go to your favorite discount travel web site and check. With proper planning, you can secure a ticket to travel across the country for less than $500. Dealerships that use e-learning also save the expense of a room and meals.

But while they are saving on these expenses, what are they giving up?

Set the stage for success: When a participant is in a learning environment, whether in his office or away in a seminar setting, it is critical that the student have dedicated time to focus on the lessons.

When participants are expected to respond to text messages from senior management or answer cellphones, they are not focused on what is happening in their environment. And when they are listening to a web seminar and are interrupted by sales consultants, sales managers, service personnel or customers, they are not focused on the message being delivered. No focus equates to no learning and no value realized from the investment.

Do you save time using e-learning? As an educator, I can attest that it takes two weeks of two hours a day online to cover most of the topics I can cover in a three-day seminar. I can verify reception and understanding of concepts in a face-to-face environment more effectively than I can using the Internet. Most participants are very quiet during a web seminar, even when questions are being solicited from them.

Web seminars do have a great use in the learning circle. Web-based education is best used as a follow-up to a traditional seminar setting due to the limited amount of time and focus we have with online participants. After 25 minutes, we lose the attention of part of the audience. Fifteen to 25 minutes is more effective in a web seminar environment.

When a dealership chooses to use web seminars in lieu of traditional seminars, what do they sacrifice? They sacrifice time, and they lose the value of group studies after the session. In every group environment, everyone has selective hearing. We retain what is important to us. The value in a group setting is gaining as many perspectives as we can after the meeting is over. What was important to whom, and why?

Learning does not cease when the educator gives the evening assignments. It only takes on a different coat.

Some dealers do not want to expose their personnel to another dealership’s processes. They also fear that when a group gets together, they chat about pay plans and duties. Well, in all the years I have been teaching, I have yet to walk up on such a conversation.

How does a dealership get the most out of the limited dollars it has allocated to education? The answer lies in planning. Advance planning for air fare and for e-learning events, because all events have limited space available.

If you have multiple participants, or cannot send your personnel out of the dealership, an alternative is to bring the educator to your location, split the team and run double education shifts. Your team will have the opportunity to implement new ideas right away and provide an immediate report to the senior management.

When managing a sales team, it is essential that the entire team is using the same processes with customers. Consistency is

easy to manage. It is also easy to see when someone goes off track.

The most important thing a dealer can do is choose an education venue. Make the plans, implement the plans and make inquiries to the participant in addition to the educator. What ideas were shared during the educational event that the participant thinks should be integrated and implemented into your current process?

The second most important thing is choosing quality vendors and quality products and services for the finance department to present to the customers. If the finance and sales teams do not believe in the products’ value or have had difficulty with the company in the past, they will not present the policy to the customers.

I advocate that the dealership do proper vetting of companies and vendors prior to signing up. Verify references and insurance policies. Ask the vendor for a certificate of insurance and make it a practice to do so every year. That is the only way to verify the policies being sold are actually backed by an insurance company.

Begin to collect testimonials from customers. Create a brag book to be shared with your customers. A brag book is a binder that includes positive feedback from your previous customers about the products and the dealership. How was their buying experience? How did the policies serve them in a time of need? Would they purchase the policies again?

Happy customers are a result of happy, well-educated and well-compensated employees with a strong commitment to customer satisfaction. Happy customers bring their friends and family to purchase from you. Happy customers are essential in building customer retention and referrals.

Education should be a critical part of every business plan. Investing in your human capital brings the highest rate of return. When successful dealers are quizzed about why they are successful, the answer is they surround themselves with quality people who have both the customer’s needs and the bottom line in focus.

Education is the foundation for a strong business model and essential for success!

BY JAN KELLY JAN KELLY, PRESIDENT OF KELLY ENTERPRISES, IS AN EDUCATOR, CONSULTANT AND CONVENTION SPEAKER, AND WRITES FREQUENTLY FOR INDUSTRY PUBLICATIONS. FOR INFORMATION ABOUT EDUCATIONAL VENUES OR JOINING AN F&I 20 GROUP, CALL 1-800-336-4275 OR VISIT WWW.JLKELLY.COM.

EDUCATION: LUXURY OR CRITICAL PART OF YOUR SUCCESS?

BACK TO BASICS

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Affordable Computer SystemsIvan [email protected]

AFCRyan [email protected]

Auction AccessRobinson Adams InsuranceDealer BondsTom AdamsDebbie Thompson800-239-1327

Automotive Credit Corp.Tony Stallworth26261 Evergreen Road, Ste. 300Southfield, MI [email protected]

Auto Services Co., Inc.Susan WilliamsClayton Morgan800-442-7116

Auto ZoneKevin Kravig317.681.4273

Briggs Insurance AgencyTim Briggs4000 W. Lincoln Hwy.Merrillville, IN [email protected]

Cars.com175 W. Jackson Blvd., 8th FloorChicago, IL 60604dealers.cars.com800-298-1460

CAR Financial Services, Inc.Thomas Lloydwww.carfinancial.comthomas.lloyd@carfinancial.com859-630-2606

Chase Custom FinanceDon Williams and Mike Smith317-523-4273

Clear Choice Merchant ServicesReno, NVLaurie Gruen, Corporate Analyst, ext. [email protected]

Lorraine Onesian, VP Business Development, ext. 6880lorraine.o@myclearchoice.comwww.myclearchoice.com866-779-4787

Consolidated Automotive Services of IndianaChris Walsh59 East Main Street, Suite NNashville, IN 47448(812) [email protected]

Consumers InsuranceMike Hogan7830 Edge Manor Ct.Indianapolis, IN [email protected]

Diamond Warranty Corp.Jim Limongelli9 N Main StreetPittston, PA 18640800.384.5023

Diversified Marketing Strategies, Inc.Andrea Pearman1330 Arrowhead Ct.Crown Point, IN 46307(219) [email protected]

Donn Wray Attorney at LawStewart & Irwin, P.C.251 E. Ohio St., Suite 100Indianapolis, IN [email protected]

Drive1USABruce Norton1512 W. 96th Ave., Suite CCrown Point, IN [email protected]

Envirotest SystemsJennifer Kharchaf1171 Breuckman Drive, Suite BCrown Point, IN [email protected]

Frazer Computing, Inc.Michael Frazerwww.frazercomputing.com888-963-5369

GoldStar GPSMark Behne2035 Lakeside CentreKnoxville, [email protected]

Guardian Warranty Co.Carmie Fruits, Indiana Representativecfruits@gu ardian-warranty.com317-374-6271

Sales SupportP. O. Box 68Avoca, PA 18641-0068800-482-7357, ext. 767

Heritage-Crystal CleanJim Skelton2250 Point Blvd. Ste. 250Elgin, IL 60123(847) [email protected]

Heritage Financial Acceptance Corp.Curt Holmes121 S. Main StreetElkhart, IN [email protected]

Insurance ProfessionalsMike [email protected]

Keystone Insurers GroupFor All Your Insurance NeedsLori [email protected]

Kincaid InsuranceDan Kincaid321 Main StreetRockport, IN [email protected]

Lincolnway Insurance ServicesDealer Bonds & Garage KeepersGregg St. Germain336 E. Lincoln Hwy.Schererville, IN [email protected]

Nationwide AcceptanceSub-Prime Financingwww.nac-loans.comBonnie Herden773-777-7600, ext. 1295

Penn Warranty Corp.Jude TumaMichael Roe1081 Hanover St.Wilkes Barre, PA 18706www.pennwarranty.commichael.roe@pennwarrantycorp.com800-356-9441

Preferred Warranties, Inc.Gregg Reidenbach260-341-6675Guy [email protected]

Reliable Auto FinanceBrian Chisholm954 28th St. SWGrand Rapids, MI [email protected]

Russel Kobel Insurance100 Tower Drive Suite 120Burr Ridge, IL 60527 [email protected]

SEAL FINANCEJudy Terrell3830 E. Southport Road # 200Indianapolis, IN [email protected]

Security Auto LoansJoe Ruhland4900 Hwy 169 N., Suite 205New Hope, MN(763) 559-5892Joe Ruhland

Sentry InsuranceRandy [email protected] [email protected]

Shirer Insurance ServicesAuto Owners-Dealer Bonds400 N. Main St.Crown Point, IN 46307Troy and Mari [email protected]

Smart AuctionJeff Kubickiwww.smartauction.bizjeffrey.kubicki@smartauction.biz812-455-7967

Surety Bonds.comMike Patzius1200 Rogers St., Suite CColumbia, MO [email protected]

Triumph ConsultingJack Haworth1606 N. Delaware St.Indianapolis, IN 46202800-875-3137www.triumphconsulting.net

Tri Vin Inc.Mike Audette115 Pohesanut Drive Suite 201Groton, CT [email protected]

Vehicle Acceptance Corp.Joyce Butler12800 N. Meridan St., Ste. 400Carmel, IN [email protected]

VideoTirekicker.comJohn Commorato2413 N. MeridanIndianapolis, IN 46208(317) [email protected]

Wingham & AssociatesGary WinghamP.O. Box 1723Richmond, IN 47375(765) [email protected]

WORKS24Mark Hersch3508 French Park Drive, Suite 1Edmond, OK [email protected]

Zurich Insurance Co.800-728-6049

ASSOCIATE MEMBERS IIADA Associate Membership is available to automotive related businesses. Please call 800-310-3112 for more information on Associate Memberships or see our Associate Membership Application in this issue.

Asay Motor SalesCarlos AsayLafayette

Auto Import SpecialistsKasia and Andrew PrbyslawskiSouth Bend

Auto ZoneCindy SenopoleMemphis

Bailey Brothers Used CarsMarvin BaileyShoals

Big Daddy’s Auto SalesDavid BohallIndianapolis

Chase Auto FinanceDon WilliamsIndianapolis

Clear Choice Merchant ServicesLorraine OnesianReno

Concord CarsDavid JamesenElkhart

Frankies Auto SalesAlan StockDyer

Great Deals on WheelsRich NewenhouseMichigan City

Indianapolis Car ExchangeDanny HockettWhitestown

Insurance ProfessionalsMike LeeIndianapolis

Jamerson Auto SalesPaddy JamersonAnderson

Jim Butner Auto & RV Clarksville

M.R.S. MotorsMichael StanfieldBrookston

Ski’s Body Shop and Truck SalesDave ZatorskiRockville

Superior AutoNick SchenkelFort Wayne

Welch MotorsWilliam Welch Jr.Rolling Prairie

AMS CarsAlex ShapiroIndianapolis

Auto Services Co.Susan WilliamsMountain Home

Del Real Auto SalesTony Del RealLafayette

Drive 1 USABruce NortonCrown Point

Flick’s Motor CarsMichael GarrettMartinsville

Gray Auto BrokersBrad GrayGreenfield

Greg’s Auto SalesGreg MorrisEvansville

Hill Auto SalesScott HillHope

Hillside MotorsDushan GalicSchererville

Patriot SalesHoward CurryLiberty

Pletcher Motor Co.Rodney PletcherGoshen

Prestige Auto SalesJames HornerIndianapolis

Roadside AutoDaniel EarlLebanon

SweetCarsChuck SurackFort Wayne

Westfield Motor SalesAl JohnsonNoblesville

White’s Auto SalesEd WhiteRensselaer

NEW & RENEWING MEMBERS

Thank you for your membership in Indiana’s trade association forINDEPENDENT DEALERS

IIADA RECOGNIZES THE FOLLOWING MEMBERSThe following members have joined* or renewed their membership since our last issue of Car Lines.

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For an annual membership investment of only $275, which includes an NIADA membership, you get a $2,300 Auto Auction Coupon Book and a whole lot more!

Payment by: Check Visa MasterCard Credit Card Number: ______________________________Expiration Date: __________________________________ Signature: ______________________________________________________________________________________________

Dealership Name ____________________________________ Dealer Lic# _______________________________________

Mail Address ___________________________________________________________________________________________

County ____________________________________________City/State/Zip ______________________________________

Phone _____________________________________________Fax _________________________________________________

E-mail ___________________________________________________________________________________________________

Website _________________________________________________________________________________________________

Owners (Please Print) __________________________________________________________________________________

Recommended By ______________________________________________________________________________________

IIADA • PO Box 1393 • Crown Point, IN 46308Phone: (800)310-3112 • Fax: (219)663-5294 [email protected]

It is important to me to be recognized as a professional! Enclosed are my annual dues of $275 to make sure that my business has all the advantages IIADA/NIADA Inc., provides to put me at the forefront of my profession. By completing this form, I agree to abide by the Code of Ethics. Also, I am consenting to and giving IIADA/NIADA Inc., its affiliates and subsidiaries, my permission to (until I give written notice to discontinue) contact me and provide information to me at the mailing and email addresses, telephone and fax number(s) I have provided.

This is our personal invitation to you to join the State and NationalIndependent Automobile Dealers Professional Associations

Note: 25% of dues are non-deductible

Please include your email address, phone and fax numbers so that we can easily communicate with you. Membership dues are $275.00 for 12 months from the date you join, and your NationallADA dues are included. Please send application and check or credit card information to: IIADA, PO Box 1393,Crown Point, IN 46308

Indiana Independent Automobile Dealers Associations

The IIADA Has the Independent Auto Dealer Covered!

The IIADA Has the Independent Auto Dealer Covered!

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2012 IIADA MEMBER auction couponsFor A Total Savings Of $2,300!

SAVE $100 at each of the above auctions!– 4 Buy or Sell Fee Coupons @ $25 each –

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MANY SHERIFFS CREATE REGULATORY UNCERTAINTY

Remember when the Dodd-Frank bill was being debated in Congress and we all hoped motor vehicle dealers would be exempt from the oversight of the new sheriff – the Consumer Financial Protection Bureau (CFPB)?

Be careful what you wish for. You just might get it. As you know, a “dealer exclusion” was included in the Dodd-Frank Wall Street

Reform and Consumer Protection Act (Dodd-Frank Act). Ironically, the dealer exclusion might only increase industry regulatory oversight and add compliance uncertainty.

Under Section 1029 of the Dodd-Frank Act, the CFPB may not exercise regulatory supervision or enforcement authority over “a motor vehicle dealer that is predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both.”

An exception to the exclusion is that the CFPB does have authority over businesses that provide “the extension of retail credit or leases involving motor vehicles,” retail credit or retail leases “directly to consumers” and a contract covering the retail sale or lease that is “not routinely assigned to an unaffiliated third-party finance or leasing source.”

The exclusion and exceptions can be a bit confusing, but the net result is that the CFPB has regulatory authority over Buy Here-Pay Here dealers. And even dealers who do not consider themselves to be Buy Here-Pay Here might be regulated by the CFPB if they are assigning contracts to an affiliated third-party finance or leasing source, or if they are not “routinely” assigning contracts to an unaffiliated third party. If you assign some contracts and hold others, there might be some uncertainty about whether you are regulated by the CFPB.

The CFPB authority leaves us with a framework in which some auto dealers are regulated by the CFPB and the rest are regulated by the Federal Trade Commission (FTC). That means that in spite of the “dealer exclusion,” we have two sheriffs in town.

The two federal regulators have promised to work together, but the regulatory framework itself could create obstacles. For example, the CFPB now has rulemaking authority for a number of consumer financial protection laws formerly granted to several federal agencies, including the Truth in Lending Regulation Z and Consumer Leasing Regulation M. In republishing these regulations, the CFPB made it clear that they applied “except with respect to persons excluded from the bureau’s rulemaking authority by section 1029 of the Dodd-Frank Act.“ That is a clear reminder that CFPB enforcement authority of Regulations Z and M are technically separate from the enforcement authority of the FTC.

Dodd-Frank also authorized states to enforce certain federal consumer protection laws. The concern is that might result in local differences in interpretation and enforcement of federal requirements. So essentially, there are now three sheriffs in town.

Over time, rules, regulations and interpretations will be published providing clarification on the scope and limits of authority assigned to those three. But for now, we need to deal with the regulatory uncertainty as best we can.

It is helpful to keep in mind that the various regulating authorities are trying to protect consumers from unfair and unscrupulous consumer credit transactions. The best practices for these times apply in all situations – be clear, be transparent and be honest in your sales and financing transactions. That should help you satisfy the spirit and intentions of all but the most technical standards of any regulator.

BY CHIP ZYVOLOSKIChip Zyvoloski is a senior attorney for indirect lending at Wolters Kluwer Financial Services.

For more information, visit www.wolterskluwerfs.com/indirect.

ComplianceOverdrive

The NIADA announced its 66th Annual Convention & Expo will be held June 11-14, 2012 – a

week earlier than previously scheduled – at Caesars Palace Hotel and Casino in Las Vegas.

NIADA’s showcase event will offer an expanded dealer education program for 2012, including more sessions covering more topics than ever before, as well as an enhanced Expo featuring more companies representing all facets of the automotive industry. Expo exhibit dates are June 12, 13 and 14. The Convention, to be held for the third consecutive year at spectacular Caesars Palace, will kick off with activities beginning on Monday afternoon, June 11.

Online registration is now open at www.niada.com. Rooms at Caesars Palace will be available at the discounted rate of $154 per night.

NIADA’s Annual Convention & Expo provides its members with an opportunity to network with their peers, participate in quality education sessions and gather valuable information they can take back and apply toward their dealerships’ success. Educational offerings will cover topics for both retail and Buy Here-Pay Here dealers. The event is also a gateway for vendors to build and foster relationships with dealers through the Expo, an industry marketplace of top-notch vendors showcasing their products and services and the benefits they can provide to dealers.

NIADA has held its Annual Convention & Expo since 1947 and has continued to flourish as the most sought-after and reputable used motor vehicle industry event for automobile dealers.

NIADA ANNUAL CONVENTION & EXPO SET FOR JUNE 11-14, 2012

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