Mich_1011_O

In This Issue

of MichiganManaged ByAutumn 2011

Visit Us Online At www.miada.org

Helping The Next Generation

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PAIDDALLAS, TEXASPermit No. 2079

• 2011 MIADA Scholarship Awards

• Servicemembers Civil Relief Act and the Used Dealer

• SEMA Dealer Day Offers Value, Benefits for Dealerships

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AUTUMN 2011 D R I V E L I N E

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INSIDE

MIADAEVENTS

MAGAZINECONTENTS

ADVERTISERSINDEX

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] DRIVELINE IS A PUBLICATION OF THE MICHIGAN INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION INC., BUT IS ALSO MAILED TO NON-MEMBER DEALERS IN MICHIGAN IN AN EFFORT TO ENCOURAGE THEM TO JOIN AND SUPPORT OUR EFFORTS TO IMPROVE THE PROFIT POTENTIAL FOR THE INDUSTRY. THE DRIVELINE IS PUBLISHED QUARTERLY BY AUTOMOTIVE DEALERS RESOURCE OF MICHIGAN, 55 E LONG LAKE RD. PMB 233, TROY, MI AND THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORATION, 2521 BROWN BLVD., ARLINGTON, TX 76006. PERIODICAL POSTAGE IS PAID AT ARLINGTON TX, AND AT ADDITIONAL OFFICES. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF THE MICHIGAN INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION INC., AUTOMOTIVE DEALERS RESOURCE OF MICHIGAN, OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEMBERS OF THE MICHIGAN OR NATIONAL ASSOCIATIONS DOES NOT CONSTITUTE AN ENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. FOR 30 YEARS, WE HAVE WORKED TO REPRESENT THE INDEPENDENT AUTOMOBILE DEALERS IN MICHIGAN. WE NEED YOUR SUPPORT. PUBLISHER/EDITOR AT LARGE: Nancy R. ChapmanFRONT COVER BY Mike MorganSTATE MAGAZINE MGR./SALES Troy Graff • [email protected] Mike Harbour • [email protected]/PRODUCTION MGR. Christy Haynes • [email protected] Nieman Printing

R�EASTERN CHAPTER MEETING: Tuesday, October 11, 7pm, American Polish Cultural Center, 2975 E. Maple Rd., Troy

RMIADA BOARD OF DIRECTORS AND ANNUAL MEETING: Saturday, October 15, 9am, Lexington Lansing Hotel, Lansing.

RMID MICHIGAN CHAPTER MEETING: Contact Leon Fransisco at 517-272-5000.

RNORTHERN MICHIGAN CHAPTER MEETING: Contact Dennis Craig at 231-938-2627.

R WEST MICHIGAN CHAPTER MEETING: October 17, 6:30 pm, Brann’s Steakhouse, Grand Rapids.

All events are listed online at: www.miada.org

• Quick Turnaround Service within Michigan • Easy One Page Application • No Financial Statements Required in Most Cases • Checks and Credit Cards Accepted • Lost Title Bond Service • High Risk Bonding Sources Available

FOR INFORMATION ON THESE AND OTHER BONDS: Apply over the phone at: 888-855-0100 * fax: 888-855-7111 or email: [email protected]

CHECK With Bond Source Insurance Agency For Your Bonds

Dealer Bond RatesMI MVD $10,000 Bond:MIADA Member: $100/1 yr; $250/3 yr (for qualifying dealers)R

PRESIDENTEd OphoffOphoff Motor Sales2921 S. DivisionWyoming, MI 49548ph: 616-452-7761 fax: [email protected]

CHAIRMAN OF THE BOARD Art DouglasJim Douglas Auto Sales1153 Baldwin Rd.Pontiac, MI 48340ph: 248-332-8326fax: [email protected]

VICE PRESIDENT Jerry DrouillardAutohaus 4411 Delemere,Royal Oak, MI 4807348-549-3636fax: 248-549-7805,[email protected]

SECRETARYFred WagnerCenterline Auto Financing25637 Van Dyke, CenterlineMI 48015ph: [email protected]

Board of Directors

4 MIADA Scholarship Awards 8 Servicemembers Civil Relief Act 18 SEMA Dealer Day

ADESA ..............................................................9AutoTrader.com .................................. Back CoverBlue Cross Blue Shield .......................................22Cars.com ................................... Inside Front CoverChase ..............................................................12Greater Kalamazoo Auto Auction ........................5iMetrik GPS .....................................................13Lakeside Insurance Agency ................................19Manheim.com ...................................................15Protective .................................. Inside Back CoverSmartAuction ......................................................7TD Auto Finance ...............................................11United Acceptance ............................................17

The Purpose for Which MIADA was OrganizedREPR I NTED FROM TH E M IA DA A RT I C L ES O F I N CO RPO R AT I O N, J U N E 22, 1981

To unite in common organization those engaged in the automobile business and others interested in said business and in the welfare of our State;

To protect and promote the mutual interest of its Members;To formulate and maintain ethical standards for the guidance of its members in their relations

with each other and with the public;To advocate necessary public improvements and oppose unnecessary or wasteful expenditure

of public funds;To promote and encourage the enactment of just and reasonable laws and ordinances affecting

the licensing, regulating and conducting of the automobile business, and to oppose the enactment of those that would be unjust and unreasonable;

To correlate the activities of the National Independent Automobile Dealers Association with the Michigan Independent Dealers Association and local dealer Associations in this State.

DIRECTORS:Ray CampiseCertified Motors23509 Little Mack Ave.St. Clair Shores, MI 48080ph: 586.775.7000fax: [email protected]

Nigel FoxSovereign Auto Purchasing730 N MainFlushing, MI 48433ph: 810-487-2020fax: [email protected] Tony LoBrettoAlamo Valley Auto Sales6100 West D AvenueKalamazoo, MI 49009;ph: 269-344-8250fax: [email protected]

Rick RynbergRynberg’s Car Company3880 Holton Rd.Muskegon, MI 49445ph: 231-744-1441fax: 231-744-6813

Debbie RichardsEllis Richards Motors24900 GratiotEastpointe, MI 48021ph: 586-778-0606fax: [email protected].

Ted CooperGenesys Systems360 E. Maple Rd.Troy, MI 48083ph: 248-597-1003fax: [email protected]

Jetre OrmsbeeOrmsbee ImplementCo. Inc.241 M-68 HwyEast, Afton, MI 49705,ph: 231-238-9928fax: 231-238-9938

Jeffrey Braatz Paradise Motors Inc.8212 W. Saginaw Hwy.Lansing, MI 48917ph: 517-627-3900fax:[email protected]

Dennis CraigInstant Car Credit P.O. Box 146Acme, MI 49610ph: 231-938-2627fax: [email protected]

Leon FransiscoFransisco Automotive Enterprises1835 E. Jolly RoadLansing, MI 48910ph: 517-272-5000fax: [email protected]

Jim VerWysSuperior Automotive1100 S. Washington Ave.Holland, MI 49423ph: [email protected]

Robert VanCoillieVan’s Motor Sales, Inc.1507 Garfield Rd.Traverse City MI 49686ph: 231-995-0614fax: [email protected]

Mike TokieJack’s Auto ServicePO Box 52Grawn, MI 49637ph: 231-218-1978fax: [email protected]

EXECUTIVE DIRECTOR:Nancy R. ChapmanADR of Michigan55 E. Long Lake Rd. PMB 233Troy, MI 48085ph: 248-828-7011fax: [email protected]

For information on how to become a member please contact Nancy Chapman at [email protected]

55 E. Long Lake RoadPMB 233Troy, Michigan 48085Phone: 248-828-7010Web Site: www.miada.org

INSIDE

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D R I V E L I N E AUTUMN 2011

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2011 Ray Ketelhut Memorial MIADA Scholarship Award

CRISTIELLEN ZARVAS

The Ray Ketelhut Memorial MIADA Scholarship of $500 is awarded to Cristiellen Zarvas. Cristiellen is

the step-daughter of MIADA member Jeffrey Brancheau from Lakewood Motors in East Lansing.

While attending East Lansing Public High School, Cristiellen worked at the Campus Corner. During the summers of 2007-2010, she was a counselor at the Metropolis of Detroit Greek Orthodox Summer Camp.

Cristiellen is attending Hope College as a junior. Her declared major is international relations with a

concentration in human rights and international law. She maintains a 3.3 GPA.

As an administrative assistant at Thomas M. Cooley Law School, Cristiellen was involved in alumni and

development data entry. She is working as a nanny in Holland while attending Hope.

The son of Pat Jaloszynski from Mt. Morris Auto Sales in Mt. Morris, Travis Jaloszynski is this year’s

recipient of the MIADA/Greater Kalamazoo Auto Auction Scholarship Award of $500.

Travis graduated from Davison High School this year. He works an average of 25 hours weekly at

the family dealership and is responsible for vehicle clean-up and general maintenance.

Medical imaging/radiology is Travis’ major. He begins his studies at Mott Community College this fall.

MIADA and the Greater Kalamazoo Auto Auction congratulate both of our 2011 Scholarship

recipients. We wish them continued success in all of their endeavors.

TRAVIS JALOSZYNSKI

2011 MIADA/Greater Kalamazoo Auto Auction Scholarship Award

Dealers can expect increased scrutiny of their dealings with members of the military in coming months. The Federal Trade Commission (FTC) and the new Consumer Financial Protection Bureau (CFPB), established by the Dodd-Frank Act, are two of the federal agencies tasked with oversight of various segments of the vehicle sales industry and consumer protection matters related to those sales. Pursuant to the Dodd-Frank Act, which became effective July 21, the FTC is authorized to prescribe rules with respect to unfair or deceptive acts or practices by motor vehicle dealers. Under that act, the FTC retains all of its enforcement authority over motor vehicle dealers. The FTC’s authority is exclusive as to dealers that routinely assign credit contracts to unaffiliated third parties, and concurrent with the new CFPB as to dealers that do not (Federal Register, Vol. 76, No. 50, March 15, 2011, 14014-14017).

Both agencies have made protection of the military consumers’ interests a headline issue.

The FTC held the second in a series of vehicle roundtables on Aug. 2 and 3 at St. Mary’s University School of Law in San Antonio, Texas. The overall objective of the FTC Roundtable discussions is to explore consumer protection issues pertaining to vehicle sales and leasing. The most recent roundtable covered topics regarding military consumers’ experiences in buying and financing vehicles. Agenda items included “The Auto Sales and Financing Process,” “The Online Auto Process,” “Sales Representations and Financing Process Issues,” “Complaints” and “Vehicle Title Problems and Repossessions.” All related specifically to the military consumer.

In early July, the CFPB and the Judge Advocates General (JAGs) of the U.S. armed forces announced an agreement on a joint statement of principles to provide stronger protections for service members and their families in connection with consumer financial products and services.

The partnership is intended to help better protect service members and their families from unlawful acts and practices. The JAGs and the CFPB – including its Office of Servicemember Affairs and Enforcement Division – will create a formal working group with the goal of achieving a coordinated response to unlawful conduct targeted at service members and their families.

Scrutiny of vehicle sales to military personnel is only one example of the increased regulatory oversight our industry is experiencing. We believe it is the association’s responsibility to help keep you informed of regulatory matters and apprised of changes. Elsewhere in this publication, you will find articles dealing with clarification of the Risk-Based Pricing Notice Rule, an update on the Servicemembers Civil Relief Act (SCRA), and an overview of what now constitutes unfair and deceptive trade practices that should be of interest to you.

Vehicle Sales to Military PersonnelIndustryNews

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IndustryNews

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Risk-Based Pricing Notices in Three-Party Financing Transactions

If, as an automobile dealer, you engage third-party finance sources in the course of your credit sales, you are likely subject to the Risk-Based Pricing (RBP) Rule and are obliged to provide certain consumers with an appropriate notice.

Risk-Based Pricing is when a dealer or the financing entity a dealer selects to finance a vehicle, directly or indirectly uses information from a credit report, such as a customer’s payment history, to establish the price and other terms, specifically the Annual Percentage Rate (APR), of the credit being offered or extended.

Under the RBP Rule, a RBP notice must be provided when a creditor engaging in risk-based pricing extends credit to a consumer on material terms that are materially less favorable than the most favorable terms available to a substantial proportion of the creditor’s other consumers.

A typical three-party automobile financing transaction involves an automobile dealer, a consumer, and a third-party creditor or financing source. In these transactions, the dealer sells a vehicle to a consumer, the consumer signs a retail installment sales contract with the dealer, and the dealer assigns the contract to a third-party financing source that has notified the dealer it will purchase the consumer’s contract on specified terms. The third-party financing source then services the debt directly with the customer.

In three-party financing transactions, you are subject to RBP Rule if you:

a. Set the APR of credit offered based in whole or in part on information in a credit report; or

b. Set the APR of credit offered based on a wholesale buy rate proffered by a third-party finance source, and that buy rate is based in whole or in part upon information in a credit report.

This holds true whether you directly obtain the credit report yourself or whether the third-party finance source obtains

the credit report. The RBP Rule applies to the original creditor, i.e. the dealer, if that person “uses a consumer report in connection with” an application for credit.

In response to an industry inquiry, the Federal Trade Commission (FTC) recently provided the following example of a three-party financing transaction in which the dealer is obliged to provide a RBP notice:

“The specific financing situation … involves an automobile financing transaction where an automobile dealer is the original creditor. In this three-party financing transaction, a consumer visits the automobile dealer and applies for financing by completing a loan application with the dealer. The dealer submits the loan application to one or more unrelated finance sources, which finance source(s) then conducts underwriting on the consumer’s credit application. Based in whole or in part on the consumer report, the finance source(s) provides the dealer with an approval of the consumer’s application and the wholesale buy rate at which the finance source(s) will purchase the resulting credit contract from the dealer. The dealer then selects the finance source to which it intends to assign the contract and determines which credit terms, including a retail finance rate (‘APR’), it will offer the consumer. The [industry inquiry] commenter asserts that because the original creditor (the automobile dealer) does not directly obtain the consumer report and/or credit score from a consumer reporting agency, and instead relies upon the buy rates from the underlying financing sources, the original creditor does not ‘use’ the consumer report and is outside the scope of the risk-based pricing rules. The Commission disagrees. The automobile dealer must provide the consumer with a risk-based pricing notice.

“The original creditor has ‘used’ a consumer report in connection with an application for credit because the original creditor initiated the request that caused the financing source to obtain the

consumer report and used the resulting information from the financing source to set the rate offered to consumers. Applying a causal, transaction-based analysis to the term ‘use’ is consistent with the clear intent of Congress to provide consumers with information about the role that their credit history plays in setting the terms for credit. In the scenario set forth above, the consumer report was used in connection with the application for credit made by the consumer to the automobile dealer because the consumer report was obtained by the financing source in order to fulfill a request made to it by the automobile dealer. The finance source has not obtained and used the consumer report and/or credit score independently of the automobile dealer. The finance source, at the behest of the automobile dealer, has obtained the reports and performed underwriting and has told the automobile dealer the wholesale buy rate at which it will purchase the contract. The original creditor incorporated the wholesale buy rate in the rate offered to the consumer, establishing a causal connection between the consumer report and the ultimate rate offered to the consumer. The original creditor [i.e. the automobile dealer] has ‘used’ the consumer report.”

Accordingly, the ADR staff is available to assist dealers in preparation of your Risk-Based Pricing Notices. Feel free to contact us at 800-364-8833 or email [email protected].

NOTE: We are not attorneys. This article was prepared for informational purposes only. It has been made available with the understanding that neither ADR of Michigan nor MIADA is engaged in rendering legal advice. You are urged to contact legal counsel for its application to your operation. This article only addresses the applicability of the RBP Rule in three-party finance transactions. The RBP Rule applies to other finance transactions involving credit reports as well, including Buy Here-Pay Here transactions.

IndustryNews

Accordingly, the ADR staff is available to assist dealers in preparation of your Risk-Based Pricing Notices. Feel free to contact us at 800-364-8833 or email [email protected].

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Risk-Based Pricing Notices in Three-Party Financing Transactions

IndustryNews

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Servicemembers Civil Relief Act and the Used Dealer

As a used dealer, you may have occasion to conduct business with members of our U.S. armed forces and may serve as creditor or lessor to them in a used vehicle transaction. In recognition of the sacrifices our military members make, and the special circumstances in which they often serve, federal law affords them certain protections regarding consumer credit and leasing. The following is provided to acquaint you with particular provisions of the Servicemembers Civil Relief Act (SCRA) with the goal of enabling you to most effectively serve your military customers.

The SCRA generally applies to active duty service personnel serving in the U.S. Army, U.S. Navy, U.S. Marine Corps, U.S. Air Force, and the Coast Guard, as well as commissioned officers of the Public Health Service or the National Oceanic and Atmospheric Administration. It further applies to members of the National Guard under a call to active service authorized by the president or defense secretary for a period of more than 30 days, for purposes of responding to a national emergency declared by the president and supported by federal funds.

The SCRA protects service members from various civil lawsuits or collection activities while serving on federal active military duty. It is not designed to excuse service members from paying their just debts. However, under the act, service members on federal active duty may qualify for debt relief in the form of reduced interest rates on debt, release from certain contracts, and the stay of civil court actions involving foreclosures. Where applicable, a stay may delay the collection of debt or the enforcement of a judgment until the service member is finished with the active duty assignment. A number of the provisions are of particular interest to motor vehicle dealers.

MAXIMUM RATE OF INTEREST ON DEBTS. The SCRA sets a 6-percent interest rate cap on debt obligations of the service member (or the service member and spouse jointly) on debt incurred prior to the service member being ordered to active duty. The following specifics apply:

a. The interest rate reduction for non-mortgage debt obligations is restricted to the period of active service. The rate reduction shall be considered effective as of the date on which the service member is called to military service and extends to the last day of active service.

b. The interest in excess of 6-percent is forgiven; it is not deferred. In this case, interest includes service charges, renewal charges, fees, or any other charges except insurance.

c. The periodic payment must be reduced by the amount of interest forgiven that is allocable to the period for which such payment is made. The principal cannot be accelerated.

d. To attain the benefit, the service member must provide to the creditor written notice of the request and a copy of the military orders calling the service member to active military service. The request must be provided to the creditor not later than 180 days after the termination of active service.

e. Creditors are provided one avenue of relief from the rate cap. A court may grant a creditor relief from the limitation of this section if, in the opinion of the court, the ability of the service member to pay interest upon the obligation or liability at a rate in excess of 6 percent per year is not materially affected by reason of the service member’s military service. To obtain this relief, however, the creditor must petition the court. Otherwise, upon proper request by the service member, the interest must be limited to 6 percent.

PROTECTION UNDER INSTALLMENT CONTRACTS FOR BREACH OF CONTRACT.

During the period of active duty, a contract by the service member for the purchase or lease of a motor vehicle may not be rescinded or terminated for a breach of terms of the contract occurring before or during that person’s military service, nor may the property be repossessed for such breach without a court order. This applies only to a contract for which a deposit or installment has been paid by the service member before the service member enters military service.

SETTLEMENT OF STAYED CASES RELATING TO PERSONAL PROPERTY.

When a stay is granted pursuant to the SCRA in a proceeding to repossess personal property, or to rescind or terminate a contract for the purchase of personal property, the court may appoint three disinterested parties to appraise the property. Based on the appraisal, and if undue hardship to the service member’s dependents will not result, the court may order that the amount of the service member’s equity in the property be paid to the service member, or the service member’s dependents, as a condition of repossessing the property or rescinding or terminating the contract.

TERMINATION OF MOTOR VEHICLE LEASES.

Under the SCRA, service members may terminate existing leases of motor vehicles upon receipt of active duty or change of station orders. The following conditions apply.

a. The right to terminate applies to leases executed by or on behalf of a person who thereafter enters active military service for a period of at least 180 days; or to leases executed by a service member who then receives notice of a permanent change of station outside the continental United States or is deployed with an active unit for 180 days or longer.

b. To terminate the lease, the lessee must provide written notification, including a copy of the service member’s military orders, to the lessor, and must return the motor vehicle to the lessor not later than 15 days after the date of the delivery of written notice of termination.

c. Notice of termination may be delivered by hand, by private business carrier, or by U.S. Mail addressed to the lessor bearing sufficient postage with return receipt requested.

d. The lessee may terminate the lease at any time after entry into military service, or after the date of the lessee’s orders.

e. Termination of the lease is effective on the day on which the notification and vehicle delivery requirements are met.

f. You are not obliged to forgive lease amounts unpaid for the period preceding the effective date of the lease termination. Those amounts shall be paid on a prorated basis. In the case of the lease of a motor vehicle, you may not impose an early termination charge, but any taxes, summonses, and title and registration fees and any other obligation and liability of the lessee in accordance with the terms of the lease, including reasonable charges to the lessee for excess wear, use and mileage, that are due and unpaid at the time of termination of the lease shall be paid by the lessee.

g. Lease amounts paid in advance for a period after the effective date of the termination of the lease shall be refunded to the lessee by the lessor within 30 days of the effective date of the termination of the lease.

If you receive notice of a request for an interest rate adjustment or lease termination under the SCRA, or find yourself facing any other legal issue involving military service members, seek the advice of an attorney before proceeding. Both you and the service member have rights under the SCRA, as well as under other applicable Federal regulations, and you want to ensure your actions are in compliance.

NOTE: We are not attorneys. This article was prepared for informational purposes only. It has been made available with the understanding that neither ADR of Michigan or MIADA is engaged in rendering legal advice. You are urged to contact legal counsel for its application to your operation.B

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The hottest topic right now in the Buy Here-Pay Here world has to be inventory. Not only where, but what and how to find and purchase it.

Like most other areas of the BHPH business, the most successful dealers are focusing on the basics in this area, too. They are firm believers in the KISS (keep it simple, stupid) philosophy. No need to overthink and, thus, overcomplicate things.

The first basic they are focusing on regarding inventory acquisition is repeat business. For the more successful dealers, between 30 and 40 percent of their monthly sales are from repeat customers. These will be either low-balance customers traded into a new vehicle or previously paid-out customers that have returned to purchase again. So 30 to 40 percent of their monthly inventory need is satisfied with vehicles they have a history of and with; that’s pretty valuable information to have when it comes to the vehicles we deal with.

Recycling of repossessions is the next basic to focus on. With these, you have the ability and time to completely check the vehicle out to determine its reconditioning need. You also have some historical information for the vehicle. The dealers I have the privilege of working with are recycling on average 60 percent of their repossessions each month to put back out on the lot for sale. The only negative seems to be that the recycled vehicles tend to have a higher reconditioning cost. They seem to need a little more love to get them lot ready but overall are more cost effective than purchasing at auction.

Speaking of auctions, they are a basic that should not be overlooked. It is true that there are not as many vehicles going across the block these days, but it is still an effective source. The positive to vehicle volumes at auction being down is that they are becoming very competitive with one another for dealer business. Some auctions are even waiving buy or post sale inspection fees. There is no better time to expand your horizons and check out as many auctions as travel and expense will allow.

When shopping for a new or additional auction sources, do not limit yourself to just the large national auctions. Independent auctions are becoming very aggressive in going after dealer business as well. I may be a little old fashioned, but have always preferred the independent auction as they seem to provide better service and an overall buying and selling experience.

I also recommend utilizing the World Wide Web in aiding in the search for an auction honey hole. Most auctions, national and independent, are posting most, if not all, of their upcoming sale vehicles, but post-sale information as well. Most are utilizing Smart Auction, Open Lane, and or OVE for the posting. These are also great resources for the dealer to not only purchase vehicles from the comfort of their office but also to research what auctions have available to know where your next auction visit needs to be. You might just stumble on an auction you weren’t even aware existed.

A final basic in the kissing of inventory acquisition would be dealer trades. New car sales are down so this is not the source it once was, but still should not be overlooked. It won’t fill the overall need, but still could fill a partial need. I think the key here is personal contact with the dealer. I’m seeing too many buyers just calling the dealer asking what they have instead of taking the time to actually visit the dealers.

Not necessarily a basic, but a stone that should not go unturned would be the private seller. Craigslist, eBay, newspapers and auto magazines are all sources to find vehicles. I, too, used to turn my nose up at this stone feeling it wasn’t worth the time and effort, but with today’s economic challenges, there are sellers out there who simply need the money to get by and are far more reasonable in their expectations. Will it fill the lot? No, but it could fill part of it and that is what counts.

As for how to KISS the what and how to acquire inventory, I think it comes down to two very simple questions. How much do you have in the bank account? And how much of that are you willing to spend? There still is enough inventory available as long as you are willing to pay for it. Values are a little out of control right now but have seemed to have leveled off a little in the last month.

Finding the right inventory for the right price is still possible. The key will be not to overthink and, thus, overcomplicate it. If you focus on the basics and keep it simple, you will be working smarter and not harder.

Brent Carmichael Executive Conference Moderator NCM Associates [email protected]

Inventory Acquisition 101

BY BRENT CARMICHAEL

When shopping for a new or additional auction sources,

do not limit it to just the large national auctions. Independent

auctions are becoming very aggressive in going after

dealer business as well. I may be a little old fashioned, but

have always preferred the independent auction as they

seem to provide better service and an overall buying and

selling experience.

No need to overthink and thus overcomplicate things.

IndustryNews

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Federal Vehicle Safety Recalls and the Used Dealer

FACTS

willing to comply with safety recalls, used auto dealerships indicated they must go through ad-hoc channels to find out about a defect “often by purchasing vehicle history reports such as Carfax (which may not always have up-to-date and accurate information, according to the dealerships) to determine, vehicle by vehicle, whether cars on their lots are subject to outstanding recalls.” Consequently, recalled vehicles passing through the used auto dealerships industry may inadvertently be overlooked and never repaired.

The study goes on to report the sheer volume of vehicles involved – more than 35 million used autos sold by used and franchised dealerships in 2009 “could pose a significant risk to the safety of millions of vehicle drivers and may have a negative impact on recall completion rates.”

According to the study, used auto dealers face two primary obstacles regarding safety recall vehicles: 1) lack of notification of recalls, and 2) lack of a central repository of recall data, such as a VIN-searchable database.

NHTSA has authority to order a manufacturer to give notification of a defect or noncompliance with vehicle safety standards to the owners, purchasers, and franchised dealers. They do not, however, now have authority to require manufacturers to notify used auto dealers of recalls, nor do they have authority to require those dealers to notify potential buyers of the existing defect.

Beyond the required notifications sent directly to owners, purchasers, and franchised dealers, NHTSA uses a website as its primary means of communication with the public. At www.safercar.gov, NHTSA maintains a database so the public can search for safety recalls by entering year, make, and model of a vehicle. The database is not searchable, however, by VIN.

According to the GAO report, several used and franchised car dealerships noted that having a VIN-searchable database would allow those who did not receive a notification letter to determine whether the vehicles they possess have outstanding safety recalls. Today, before an individual can determine whether a vehicle is subject to an outstanding safety recall, he must contact the vehicle manufacturer directly.

In its report summary, the GAO study recommended the transportation secretary direct the NHTSA administrator to take a number of actions, including:

• Create a VIN search function on www.safercar.gov and publicize the site to vehicle owners and the public.

• Seek legislative authority to ensure potential buyers of used vehicles are notified of any outstanding recalls prior to sale.

Prior to release of the GAO study, efforts were already underway to enhance NHTSA’s recall authority with respect to used auto dealers. In May 2010, the Motor Vehicle Safety Act of 2010 was introduced in the Senate. That act included a provision that would have required used-car dealers not sell or lease a used passenger vehicle until (1) the dealer clearly and conspicuously notified the purchaser or lessee, in writing, of any notifications of a defect or noncompliance that have not been remedied; and (2) the purchaser or lessee acknowledged, in writing, the receipt of such notifications. That particular bill was not enacted.

NHTSA officials indicated in May 2011, however, the agency identified several policy proposals to Congress on vehicle safety issues. One of these proposals is to prohibit, with certain exceptions, used-car dealers and rental companies from selling or leasing a vehicle subject to a recall prior to the repair having been made.

It’s apparent from both the GAO study and NHTSA proposals the used auto industry may soon be made an integral part of the federal safety vehicle recall process. To familiarize yourself with the recall process in advance, you may wish to visit www.safercar.gov. To stay abreast of active recalls, you can sign up there for weekly email notification of vehicle recalls. You also may subscribe to their RSS newsfeed and have recall information continuously updated on your computer. Be aware the provided information may include recall notices for more than passenger vehicles, such as heavy commercial trucks and motor homes.

B Y A D R S T A F F

The National Highway Traffic Safety Administration (NHTSA) oversees the federal vehicle safety recall program. The agency has a stated goal of raising the program’s completion rate from 70 percent today to 100 percent. A recent study conducted by the Government Accountability Office (GAO) identified the recall process relative to the used auto industry as an area of concern possibly contributing to the less-than-perfect compliance rate and made recommendations for improvement.

The study reported that, though often

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In accordance with the Dodd-Frank Act, the Federal Reserve has proposed amendments to the regulations implementing the Truth-In-Lending Act (TILA) and the Consumer Leasing Act (CLA). In general, the proposals expand the coverage by raising the contract threshold exemption levels for both regulations from $25,000 to $50,000. This change will significantly broaden the coverage for car dealers. Changes will be effective July 21.

A principal purpose of the TILA is to promote the informed use of consumer credit by requiring disclosures about its terms and cost. The TILA also includes substantive consumer protections. The TILA is implemented by the Federal Reserve Board’s Regulation Z. The scope of Regulation Z is broad and covers a wide range of consumer credit actions, including mortgages and real property loans, credit cards, as well as general consumer credit actions such as automobile loans.

As written, consumer loans whose obligation exceeds $25,000 are generally exempt from compliance with TILA and Regulation Z. Effective July 21, that level is raised to $50,000 and will be adjusted for inflation annually thereafter on Jan. 1. Consequently, the typical automobile loan up to an amount of $50,000 consummated between July 21 and Dec. 31 will be subject to TILA and Regulation Z compliance. On Jan. 1, 2012, the $50,000 threshold will be raised by the annual percentage increase in the Consumer Price Index.

The CLA was enacted in 1976 as an amendment to the TILA. The purpose of the CLA is to ensure disclosure of the terms of personal property leases for personal, family, or household use. The CLA is implemented by the Reserve’s Regulation M. The CLA and Regulation M require lessors to provide consumers with uniform cost and other disclosures about consumer lease transactions. An automobile lease is the most common type of consumer lease covered.

As written, however, if the lessee’s total contractual obligation under the lease exceeds $25,000, the CLA and Regulation M do not apply. The proposed amendment raises that threshold from $25,000 to $50,000, and allows for inflation indexing annually thereafter. Consequently, beginning July 21, consumer leases with a total contractual obligation up to $50,000 are subject to the regulatory requirements of CLA. That level will be adjusted annually thereafter in accordance with inflation.

Note: This report is not legal advice. You are urged to contact legal counsel for its application to your operation.

Truth-In-Lending Act and Consumer Leasing Act Coverage Expanded

BY ADR STAFF

1

www.stopcurbstoning.com

A Used Car Field Guide for Detecting Collision Repair

It used to be fairly easy to spot the signs of a collision repair: overspray, bad color matching, and misaligned body panels. Now, with computers assisting with everything from frame straightening to color matching, it’s a lot harder to tell if a vehicle has been in a collision, especially if the repair was done well.

That’s great if you want your car �xed after an accident. But it makes things hard if you’re looking for a good used car.

NOTE: We’re not saying to avoid any car that’s had bodywork. A vehicle that’s been properly and professionally repaired after a minor fender-bender could be a terri�c bargain. We are saying to watch for disparities between what a seller says and what his or her vehicle shows.

Of course, no one can catch all the bad cars. That’s why an inspection by a trusted, experienced mechanic, along with a

vehicle history report form a service like AutoCheck, are absolutely vital steps to take before payingmoney for any used car from a private party.

However, here are some quick, simple things you can watch for when you’reout looking at cars. One element on your side is simple greed: curbstoners want to maximize their pro�ts. After all, they only need to fool a buyer long enough to collect the cash. So, curbstoned cars rarely get top-notch repair treatment.

At A GlanceA walk around the vehicle in good light will often disclose whether or not a body panel has been replaced or repainted. Look at thecar from several angles to make sure the color matches across all the body panels.

Look also at the re�ections in the paint – factory paintwork is mirror-smooth, even when dirty or dinged up. Signs of repair often reveal themselves in a slightly rippled re�ection, or a re�ection that doesn’t exactly line up across two body panels. Be sure to look at re�ections from several angles.

If the car is so dirty that you can’t see re�ections, you might need to ask for the car to be washed. While you’re sighting down the sides of the car, check to make sure the body panels all �t �ush, and that the gaps between the panels are even from top-to-bottom and side-to-side.

Good places to look for paint overspray or excess paint include:

Around electrical conduits in door jambs

Near door, hood, and trunk hinges

On window and door seals

Around seals and �ttings in the engine compartment �rewall

Along the trim pieces inside wheel wells

Sun damage typically affects large body surfaces like hoods and roofs. When you see small patches of peeling clear-coat, especially in corners and other hard-to-reach areas, they may indicate a poorly prepped paint job.

At the same time, beware of too-perfect paint. Even a garaged, well-cared-for used vehicle will have small paint chips and even minor dings. If the chin fascia beneath the front bumper is pristine, it may have been recently replaced or repainted.

Stop Curbstoning CURBSTO NING CURBSTO NIN G CURBSTO NIN G CURBSTO NIN G CURBSTO NIN G

We know that used auto buyers today must navigate a minefield of unscrupulous sellers and haphazardly repaired vehicles. Among the worst offenders are “curbstoners” – unlicensed individuals who buy and sell used cars to make a quick buck from unwary victims.

That is why we put together a handy guide to help used auto buyers detect collision repair. “A Used Car Field Guide for Detecting Collision Repair,” is an online booklet full of useful tips for spotting subpar repair work, ensuring there are no disparities between what a seller says and what the vehicle shows.

To access the booklet, visit stopcurbstoning.com.

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Independent dealers are always looking to improve the services they offer their customers and that often means looking for and getting new sources of indirect lending, yet getting new sources of credit isn’t always easy. Fortunately for dealers and their customers, local credit unions can serve as a nearby source that wants to work with responsible businesses.

Dealers who use credit unions as indirect lending sources have found lots of advantages to having them in their corner. One advantage is credit unions are often well-known in the community the dealer operates in and have their own customer base.

Chris Maynard, vice president of lending for Michigan First Credit Union of Lathrup Village, Mich., said his organization has about 85,000 members who bank at nine branches spread out through the state’s three most populous counties. Headquarters isn’t 2,000 miles away in another state.

“We’ve been doing indirect lending through car dealers associated with us for about five years,” Maynard said. “Our program gives us a chance to grow our membership, increase our loan volume and forge relationships with dealers. Our loan program is very important in creating valued relationships with successful businesses.”

Credit unions benefit from being associated with dealers through making loans, he said. If customers don’t belong to the credit union, they join as part of getting the loan. Now those people might not do anything else with the credit union except pay off the loan, but that gives the credit union an opportunity to offer them other services, such as checking, credit cards and home loans.

Dealers benefit from being associated with a credit union because they get to work with a local lender who has a consistent underwriting approach, Maynard said.

Another benefit: the credit union will steer customers to dealers who use their lending services. It’s the perfect time for members inquiring about taking out an auto loan to learn more about dealers who partner with the institution.

Credit unions also are about customer service, and now dealers are their customers.

“The credit unions work with us,” said Bill Perkins, president of the Bill Perkins Automotive Group in Eastpointe, Mich. “I’ve been working with Michigan First for about three-and-a-half years. What I like is that they work with us. We can call in a potential deal. If they turn down the deal, we can work with them, and maybe change some of the conditions of the deal – bigger down payment or a shorter term. We can work with them to a deal work to the advantage of everyone involved.”

Craig Underwood, president of New Haven Auto Sales in Shelby, Ohio, has been working with the Ohio-based Directions Credit Union

for about 14 years. He has a great appreciation of how their relationship has been nurtured over the years.

“We work with banks and other lending institutions, but I’ve got to say that Directions is the best in terms of ease of use,” Underwood said. “We really value the relationship we have with them and they make it very easy to work together to serve our customers’ needs.”

Jan Davis, sales manager for the Nice Car Co. dealership in Ottawa Lake, Mich., near the Ohio border and 30 minutes south of Ann Arbor, Mich., has also been working with Directions for the past several years.

“We have a face-to-face relationship with Directions,” Davis said. “That’s important.”

Having someone to call and speak with really helps maintain a strong relationship between dealer and credit union. Personal interaction is preferable to many dealers than dealing with a company via the Internet and lending computer programs.

While credit unions will work with dealers, they are still careful about lending practices.

Trina Larson, director of sales and marketing for CRIF Select (a division of Denver-based CRIF Lending Solutions), said her company specializes in facilitating indirect loan programs for credit unions and her specific business is the auto and motorcycle department. CRIF helps set up loan programs for credit unions that are aimed at vehicle buyers.

“We have been around for about 20 years,” Larson said. “We used to be known as Aimbridge. We’ve seen an increase over the past three years in credit unions seeking to get into the car loan business. They have money to lend and want to diversity their portfolios. “

Larson said credit unions are member owned, and therefore fairly conservative by nature. One thing they don’t want to do is lend money, sell the portfolio and leave delinquent customers hanging if they’re unable to repay the loan. That strategy, in part, led to the economic meltdown whose effects are still being felt.

“Credit unions don’t like defaults,” Larson said. “But they do like working with customers to make loans that benefit everyone. After the bank problems of 2008, many credit unions saw that there was a niche to fill, in terms of auto loans, and many wanted to fill that niche. If a credit union doesn’t have the resources for marketing, that’s where we come in.”

Larson said a smart credit union doesn’t do business with just anyone. They want to do business with dealerships that are stable, have been in business a while and maintain a certain volume of business. Credit unions are in it for the long run and want to work with dealerships that feel the same way.

Customers come back to dealerships that take care of them, so an accommodating lender is an important part of the process.

BY JIM STICKFORD

Taking the Local: Riding Your Credit Union to Profits

LocalLending

What I like is that they work with us. We can call in a potential deal. If they

turn down the deal, we can work with them, and maybe change some of

the conditions of the deal – bigger down payment

or a shorter term. We can work with them to a deal work to the advantage of

everyone involved.”

CONTINUED ON PAGE 16

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CONTINUED ON PAGE 16

FTC Finds Broad Compliance Among Auto Dealers

As we reported in an earlier edition of The Driveline, the Federal Trade Commission (FTC) had launched an investigation of dealer compliance with the “Holder in Due Course Rule” as one of its ongoing efforts to ensure that auto dealers’ financing practices comply with federal consumer protection laws. We are happy to report that the Federal Trade Commission has now completed investigations of nearly 50 automobile dealers across the country and has found broad compliance with the Rule among both franchised and independent auto dealers.

The Holder in Due Course Rule protects car buyers when dealers sell the buyers’ credit contracts to other lenders. Specifically, the Rule preserves consumers’ rights to raise claims and defenses against purchasers of consumer credit contracts – with automobile sales, it protects consumers who buy cars from dealers on credit. When dealers sell credit contracts to lenders, consumers are obligated to pay the lenders instead of the dealers. Under the Rule, if a dealer engaged in fraud or made misrepresentations in selling a car on credit, a consumer could raise the dealer’s conduct as a defense to the lender’s demand for payments.

Without the Rule, consumers would not have this protection in states that preclude them from asserting against lenders the claims and defenses they have against dealers if the lenders bought the credit contracts in good faith and without knowledge of these claims and defenses.

The Rule requires dealers to include in their credit contracts a notice that lenders who buy the contracts are subject to the claims and defenses consumers may assert against dealers. It effectively makes lenders liable for dealers’ conduct, and gives them an incentive to work with reputable dealers.

In November 2010, the FTC staff asked nearly 50 franchised and independent auto dealers in 45 states, and two large online automobile dealers, for copies of consumer credit contacts executed after October 1, 2009. FTC staff’s review of these contracts found broad compliance with the Holder in Due Course Rule. Because all of the responding dealers disclosed the required Holder Notice in their finance contracts, the FTC staff is closing its investigations of them.

The Commission also reminds auto dealers that their obligations under the Holder in Due Course Rule will expand in the near future. The Rule currently does not require dealers to include the notice in credit contracts exceeding $25,000 in the amount financed. However, as a result of the Dodd-Frank Act of 2010, as of July 21, 2011 and corresponding changes to the Truth In Lending Act, the Rule will require the notice in these contracts up to $50,000. The Commission encourages auto dealers to review their contracts to ensure that they are in compliance with the expanded scope of the Holder in Due Course Rule. (For more information regarding the referenced change to the Truth In Lending Act, see the June 2011 edition of this newsletter).

FTC Closes Investigation:

Under the Rule, if a dealer engaged in fraud or made misrepresentations in selling a car on credit, a consumer could raise the dealer’s conduct as a defense to the lender’s demand for payments.

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“Let’s face it, the paperwork involved in buying a car is intimidating,” said Underwood. “We all know that there is a lot of federal and state paperwork that a customer is supposed to read before a deal can be completed. Any help a dealer can get in guiding the customer through the paperwork maze is greatly appreciated. And credit unions help with that. There’s no sense of funny business from credit unions when it comes to paperwork and that lends credibility to us.”

That credibility, he said, pays off in terms of repeat business. Buyers feel well treated by the credit union and by the dealership. The sense of fair treatment makes it much easier to get that customer back when it’s time for customers to buy another vehicle. It also helps promote word of mouth, which always is valued by the smart dealer.

Credit unions understand the retail auto business, too.

Obviously, there is a difference between franchise dealerships that sell both new and used vehicles and independents. Dealers who are afraid a credit union doesn’t understand that difference may worry they’ll be judged by the same criteria as franchise dealers don’t need to do so.

Tim Crosby, vice president of loan development for Directions, said the lender has 18 branches spread across central Ohio and the Toledo area. Directions, which caters to franchise and independent dealers, likes working with dealers who meet its criteria.

“We have a program aimed at large franchise dealer operations,” Crosby said. “This program is technology based. Dealers submit information using a special app via the Internet. This app provides what I like to call instant decisioning. It’s all run by computers.”

Franchise operations tend to be more heavily invested in technology, have several other resources to call upon and often deal with larger volumes of money and vehicle sales.

Independent dealerships, on the other hand, can vary greatly in terms of size, sales, money and technology. Some independent dealerships are every bit as sophisticated as a franchise operation, but for others, a fax machine is the height of sophisticated technology, Crosby said.

Thankfully for those dealers, the program aimed at independents recognizes this fact, and Crosby understands there are mom-and-pop dealerships that still prefer to do things via fax. Directions’ special car loan department accepts apps via fax, and approval or denial is returned to the dealer the same way.

Speed counts when completing a sale, and credit unions can make a decision quickly.

Buying a vehicle is a very emotional business, said Underwood. Even if customers have done all their research on the Internet, compared

prices, compared options and evaluated dealer reputations, that decision is an expensive one they’ll have to live with for some time.

So when it comes time for customers to sign a contract, they can be very nervous. Every dealer has a story about a buyer who talked himself out of buying a sound vehicle that was sold at a reasonable price. Credit unions often are able to quickly answer whether or not a loan will be made, giving the customer less time to get nervous about the deal.

Underwood said he can get an answer in 30 minutes; if a customer has to come back in three days to work out the terms of the deal, that’s three days of worry and doubt that have to be overcome.

Credit unions also offer another benefit: competitive loan rates.

Perkins said he likes working with credit unions because they offer good rates. The best service in the world is nice, but if that service pushes the loan out of most customers’ price range, it really doesn’t help the dealer.

He noted the lending landscape has changed over the past decade. There are still a lot of banks out there, but the number of local banks that know the community and are willing to work with local businesses one-on-one has declined as local banks have been merged with large national outfits. It’s possible for a bank customer who belonged to an institution with one or two branches to now be part of a bank with 3,000 branches thanks to mergers.

Another reason to consider credit unions is marketing: they’ll literally drive customers into dealers’ arms.

Most credit unions hold some sort of vehicle sale promotion during the year. Many do it several times a year. These promotions allow dealers to bring good vehicles to the credit union locations. The credit unions and the dealers typically split the cost of the promotion. It’s a real benefit to all: the credit unions get to expand their loan portfolios and dealers get to make additional sales.

Oftentimes, good credit union customers are told they have been pre-approved for a loan and are invited to visit the credit union on a particular day when there will be vehicles for sale provided by participating dealerships.

Perkins said when he’s been involved in a promotion such as these, he’s never sold less than 20 vehicles. Do that four times a year and that’s 80 extra sales a year. Even if you sell 500 vehicles a year, that’s still an extra 15 percent a year, and what dealer doesn’t want to see a 15-percent sales boost with minimal marketing effort on his part?

“We’re happy to be on board with Directions Credit Union,” Underwood said. “We know that our customers are being taken care by the indirect lender, and the customers know that they’re getting a good loan at competitive rates. That’s a win-win in my book.”

CONTINUED FROM PAGE 14

LocalLending

ProconGPS Acquires Repo PatentsProconGPS, Inc., a global leader

in mobile resource management solutions, has announced the

acquisition of the patents governing the repossession of automobiles in the vehicle finance industry from CalAmp Corp. of Oxnard, Calif. The intellectual property relates to methods and systems that apply GPS technology, cellular networks and information systems to monitor loan status for a default condition on a vehicle and enable tracking to aid the confiscation and repossession process for dealers and finance companies.

“ProconGPS, Inc. is continuing to invest in its portfolio of intellectual properties and solutions for vehicle finance, fleet management, new auto dealers and overall asset tracking,” said Brian Boling, CEO of ProconGPS Inc. “As the world’s largest subprime vehicle finance asset tracking company, we recognized the need to add these patents to our existing intellectual property specific to financial services and the repossession process our customers use on a daily basis. The method patents involved are all about our core deliverable; risk mitigation. As we continue to witness the significant costs and efficiency advantages our customers gain using our services, ProconGPS, Inc. is committed to continuing the growth of this exciting Vehicle Finance GPS Tracking industry.”

Industryfacts

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J.D. Power and Associates 2011 U.S. Green Automotive StudyBased primarily on a study of

prospective vehicle purchasers fielded in February 2011, J.D. Power and Associates is predicting the outlook for green vehicles remains limited for the foreseeable future. The company expects the share of hybrid and electric vehicles to remain below 10 percent of the U.S. market through 2016. The 2011 U.S. Green Automotive Study considered the attitudes of 4,000 consumers toward hybrid electric vehicles, clean diesel engines, plug-in hybrid electric vehicles, and battery electric vehicles. Despite interest in the vehicles, consumers’ concerns about both vehicle cost and vehicle functionality will constrain sales, according to the study.

The study also found substantial consumer interest in green alternative powertrain vehicles, but more as a means of reducing fuel costs, not out of interest for the environment. Of those consumers actually considering an alternative powertrain vehicle for their next purchase, 75 percent cited lower fuel costs as the primary reason. Only 50 percent cited environmental concerns.

Consumers not considering purchase of an alternative powertrain vehicle also recognized

the potential fuel cost savings. However, in addition to purchase price, they cited concerns about functionality – such as driving range and performance – as a major impediment to ownership.

“It is the financial issues that most often resonate with consumers, whether it is the higher price of the vehicle itself, the cost to fuel or charge the vehicle, or the fear of higher maintenance costs. The bottom line is that most consumers want to be green, but not if there is a significant personal cost to them,” according to Mike VanNieuwkuyk, executive director of global vehicle research at J.D. Power and Associates.

The study concludes consumers have interest in alternative powertrain vehicles and the perception of green vehicles is largely positive. However, converting this interest into actual sales will require concerted efforts to improve the technology and infrastructure and reduce the cost to consumers.

For more information, including the news release issued by J.D. Power and Associates, visit www.JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

THE STUDY CONCLUDES CONSUMERS HAVE INTEREST IN ALTERNATIVE POWERTRAIN VEHICLES AND THE PERCEPTION OF GREEN VEHICLES IS LARGELY POSITIVE.

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A recent study on vehicle accessorization by the automotive marketing research and consultancy firm AutoPacific confirmed accessories influence more than one million vehicle sales each year. And while many new and used vehicle dealers understand the power of accessorization, others have questions about how to incorporate accessory sales effectively, providing not only an added impetus for vehicle shoppers to make purchases, but also adding to the dealership’s bottom line through a supporting profit channel. Dealer Day at this year’s SEMA Show will answer those questions.

Sponsored by NIADA and SEMA’s Professional

SEMA Dealer Day Offers Value, Benefits for DealershipsBY STEVE CAMPBELL, SPECIALTY EQUIPMENT MARKET ASSOCIATION Restylers Organization (PRO), the 2011 SEMA

Show Dealer Day will take place in the Las Vegas Convention Center, Nov. 2, from 8 a.m. to 1 p.m. The program is an exclusive event for dealership principals and top managers. Its sole purpose is to teach dealerships how to tap into the $28.6 billion automotive accessories market. It will provide attendees with proven strategies showing how to identify pitfalls and maximize opportunities, utilizing clearly defined approaches that integrate the dealership’s fixed operations with vehicle sales.

The program provides the latest trends, tools and resources to sell more cars and increase the dealership’s bottom line. Dealer principals who have attended previous Dealer Day programs were pleased and enthused about the information they received.

“Dealer Day was a great value and benefit for our dealership,” said representatives of the Martin Automotive Group, located in Los Angeles, Calif. “The discussions provided us great insight into the different approaches and strategies for accessory integration. The ability to interact with so many other dealers was invaluable, and the range of knowledge was impressive, to say the least.”

Phil Tucker, who attended on behalf of Cerritos Infiniti in Cerritos, Calif., was equally pleased. “Personally, I feel the foundation of SEMA is the exchange of ideas,” he said. “Dealer Day

was able to take most of the benefits SEMA has to offer dealers and concentrate it for a more effective use of time away from the store.”

The Dealer Day program for 2011 will kick off with an introductory address at 7:30 a.m., followed by a session at 8:10 a.m. on “How to Partner with the Right Accessories Installer.” Bill North of Classic Design Concepts will moderate the session, which will focus on concepts that go beyond sales alone, including fashion, trends and technology. The session will also discuss how to find qualified professionals who have the skills, training and resources to create fast-moving, high-value accessory packages, with panelists Joey Johnston of Tops & Trends and Ron Leslie of Katzkin.

A consumer focus-group session will take place at 9:20 a.m., centered on the concept of “Understanding Buying Decisions: Auto Enthusiasts Speak.” Enthusiasts are frequently looked upon as expert consultants by their peers and can become evangelists for a dealership. A diverse group of auto enthusiasts will discuss the factors that go into their car-buying decisions and what keeps them loyal.

The next session, scheduled for 10:45 a.m., will detail the “Seven Simple Steps to Running a Successful Accessory Business.” Dealer and industry professionals will offer tried-and-true practices that can boost any dealership’s bottom line, from picking the right partners to creating a

We have all heard the latest advertising strategy adopted by a growing number of auto dealers. Refrains of “I’m online only,” and “Print advertising

doesn’t work anymore” are fairly common. There are very

compelling reasons to adopt this posture as a part of an overall marketing plan for a dealership. Data suggests most buyers use the Internet to educate themselves about manufacturers, specific vehicles and pricing.

Many dealers report people come to their showrooms armed with printouts of vehicles available for sale at other dealers (even if those autos are from outside the market they’re in), with the latest on rebates, trade-in values and anything else they can find online to aid in their attempts to drive the selling price downward.

A dealer who uses a website, dealer feeds and e-mail leads as their sole tools for selling vehicles is missing a large portion of the buying public. Industry reports show niche publications remain a viable and effective tool for driving traffic to lots – both franchise and independent.

The 2009 NIADA Used Car Industry Report, the 2008 Northwood Dealer Walk-in Study and the NADA Data Report show the Internet is the number one media source driving walk-in traffic. According to these studies, the next best driver of walk in traffic is not newspapers, radio,

TV or direct mail. The report discovered the most effective choice of media other than the Internet is classified magazines.

An advertising plan that combines Internet advertising and a classified magazine provides nearly 70 percent of all walk-in traffic generated by advertising. It is critical this migration of buyers from daily newspapers to niche publications that feature the inventories of local dealers be recognized by all size dealerships. If there is an automotive classified magazine in your market, you can be sure dealers using this marketing tool are enjoying excellent response to their printed message.

How do we know this?Telephone call tracking reports, as well as

the significant number of copies of these print products that are picked up each and every week demonstrate the car-buying public rely on this form of advertising to help them in their decision-making process.

For example, in the Bay Area, there is a print product (Bay Classifieds) that moves more than 40,000 copies every week. This publication, available in thousands of locations, is gobbled up 52 weeks a year by people who make the conscious choice to look for the latest copy.

In the area around rural Oroville, Calif., Great Northern Wheels & Deals sees nearly 25,000 copies of its publication gobbled up each and every week. Throughout California, from

the Recycler in Los Angeles to The Nickel in Redding, auto buyers consistently grab their copy of these publications.

If print is really dead, how do we explain this consistent demand from buyers for a print product that provides them with information from which they can make an informed buying decision? Shouldn’t we have seen an erosion of demand for these products “because everyone shops on the Internet?”

The publishers of these and other niche publications report strong demand for the products, and are proud of the product’s ability to generate e-mail leads, telephone calls and walk-in traffic. These print products provide dealers, large or small, the opportunity to tell a story about what makes their stores unique. Many dealers report customers walking onto lots with the print product in hand asking to see a particular car featured in a print ad. This is likely the best quality up a dealer can hope for.

Contrasting that type of potential buyer to some of the Internet leads dealers receive from all over the country, we can see the local buyer carrying a local publication and talking to a local dealer is what every dealer would like to have more of.

Kevin Aylmer is vice president for Target Media Partners.

Is Automotive Print Advertising Dead (or Dying?)

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Learn Morewww.semashow.com

multi-level buy-in. The panel for this discussion will be moderated by SEMA Council Director Zane Clark and feature David Boutwell of CODA Automotive, Chris Ferren of Bewley Allen Cadillac and Jon Titman of Automotive Essentials.

Following lunch, which is provided as part of the program, Diana Braschler of Dealer Source Ltd. and Josh Elliott of Auto Trim of Denver Inc. will conduct a vehicle walk-and-talk session. The presentation will showcase the features and benefits of accessorization and strategies of industry-leading restylers as well as effective strategies to consider when showcasing accessory-equipped vehicles.

Dealer Day will conclude with a networking mixer, where attendees will have the opportunity to confer with fellow dealers as well as with SEMA-member restyling experts and the event organizers. Make plans to attend today, and let your dealership colleagues know that this is a can’t-miss event for SEMA Show attendees.

The 2011 SEMA Dealer Day program is available to both SEMA members and non-members for the same low prices. Through Oct. 17, tickets are $99. After that date, tickets are $149. Onsite pricing starting Oct. 27 in Las Vegas is $149.

OnStar FMV (For My Vehicle), the first out-of-the-box application of OnStar’s “blue button” automotive safety and security services that can work on 90 million older vehicles, went on sale July 24 and can be preordered at Best Buy stores nationwide.

Packing OnStar’s industry leading technology into a rearview mirror, OnStar FMV sells for $299.99, plus $75 for installation. Service plans for OnStar FMV start at $18.95 a month, or $199 a year.

“Since we announced OnStar FMV at the Consumer Electronics Show in January, thousands of people have signed up to be notified when this innovative product is ready to buy,” said OnStar President Linda Marshall. “Now, through Best Buy, they can enhance their Fords, Toyotas, Chryslers and other brands with the power of OnStar.”

As OnStar’s strategic retail partner for OnStar FMV, Best Buy offers on-site installation through its network of more than 1,000 auto bays nationwide staffed by more than 1,400 Mobile Electronics Certified Professionals at Best Buy, including nearly half of the 194 MECP Master installers in the world. More than 90 percent of surveyed Best Buy customers said their auto installation was “done right the first time.”

OnStar FMV provides the same core features as the OnStar service built into new Chevrolet, Buick, GMC and Cadillac vehicles from General Motors: Automatic Crash Response, Turn-by-Turn Navigation, Hands-Free Calling, Stolen Vehicle Location Assistance, Emergency Services, and Roadside Assistance.

Other retailers now offering or soon to offer OnStar FMV include Car Toys, Crutchfield, Fry’s Electronics, Al & Ed’s Autosound and P.C. Richard & Son. Customers can find out if OnStar FMV is compatible with their vehicle through an online Vehicle Selector. More information is available through Best Buy or OnStar.com.

OnStar Now Available for Non-GM AutosHotTopics

NIADA Mobile now provides instant auto transport quotes as part of its innovative mobile app. With the addition of ShipCarsNow to the NIADA mobile app, NIADA members will have shipping costs at their fingertips, giving dealers the ability make quick, informed purchase decisions whenever and wherever they buy wholesale inventory.

NIADA Mobile currently provides vehicle values from Black Book, Kelley Blue Book and NADA; CARFAX and AutoCheck reports; as well as pre-auction run lists, continuously updated vehicle data, and VIN bar code scanners. “ShipCarsNow is one of our NIADA National Member Benefit Partners and we are excited to include nationwide auto transport as another service within of our mobile app platform,” said Scott Lilja, NIADA vice president of member services.

ShipCarsNow recently introduced ShipCarsNow Mobile, a mobile app that gives auto dealers and remarketers a fast and easy way to get multimodal auto transport quotes from any smartphone. One of the few auto transport companies to offer flexible options of truck and rail service, ShipCarsNow’s mobile app complements their online auto transport service and offers auto dealers mobile access to instant auto shipping quotes while they’re bidding on cars at auction. In addition to instant price quotes, the ShipCarsNow mobile app provides users a link to register with ShipCarsNow.com for lower, preferred customer prices. NIADA members can use the app to login to ShipCarsNow.com to get quotes, track shipments, and quickly access ShipCarsNow sales representatives.

To learn more about the NIADA Mobile app with ShipCarsNow auto transport quotes, visit http://niada.gigglepop.com

NIADA Mobile Adds ShipCarsNow Auto Transport Quotes to App

Is Automotive Print Advertising Dead (or Dying?)

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Key Messages to Communicate Focus on Approval: Since approval is a BHPH shoppers’ top concern, messages about financing approval should take precedence in BHPH dealer advertising – both online and offline. Talk about Speed of Process: When making a dealership selection, many BHPH shoppers are interested finding a dealer who can handle the vehicle purchase process quickly, according to the study. The good news is 83 percent of BHPH dealers complete the buying process in two hours or less. As a result, this message is an important one to include in your advertising. For example, “Get Your Car in Less Than 2 Hours!” Consider Reporting Customer Payments to Credit Bureaus: Only 37 percent of BHPH customers’ payments appear on their credit report; however, 63 percent of BHPH customers would like their payments reported. As a result, BHPH dealers should consider using messages such as, “We Can Help You Rebuild Your Credit.” Just be sure, if you advertise this message, you can follow through on it. Also, don’t forget to vet this message with your legal counsel.

Understanding Buy Here-Pay Here Customers: 2011 BHPH Buyer Study from AutoTrader.com Word count: 619 In October 2010 and January 2011, the National Alliance of Buy Here-Pay Here Dealers (NABD) and AutoTrader.com teamed up for a groundbreaking study to define the consumer profile of the average BHPH customer and to understand the unique shopping needs of this customer segment. The two-part study included qualitative focus groups conducted in Los Angeles and Dallas and a national quantitative online survey among 606 BHPH buyers who purchased within the previous 18 months. The results of this study affirm for the first time many common perceptions among the BHPH community about the priorities and behaviors of BHPH customers. There are also some new findings about their Internet usage as well as the amount of research BHPH shoppers are conducting prior to visiting a dealership. Finally, we identify key messages BHPH dealers can focus on to more effectively target their advertising and influence BHPH shoppers during the shopping process. Consumer Profile of the Average Customer BHPH Buyers vs. Traditional Buyers

58% Female

50% Female

39 Years Old

47 Years Old

<$50k Annual Income

>$50k Annual Income

44% Married

60% Married

Poor Credit Rating

Excellent/Very Good Credit Rating

The Findings Four out of five BHPH customers conduct research before visiting the dealership. According to the study, 81 percent of BHPH vehicle buyers said they performed either some or a great deal of research as part of the car shopping process before going to a dealership compared to the 19 percent who stated they conducted very little research.

Key Messages to Communicate Focus on Approval: Since approval is a BHPH shoppers’ top concern, messages about financing approval should take precedence in BHPH dealer advertising – both online and offline. Talk about Speed of Process: When making a dealership selection, many BHPH shoppers are interested finding a dealer who can handle the vehicle purchase process quickly, according to the study. The good news is 83 percent of BHPH dealers complete the buying process in two hours or less. As a result, this message is an important one to include in your advertising. For example, “Get Your Car in Less Than 2 Hours!” Consider Reporting Customer Payments to Credit Bureaus: Only 37 percent of BHPH customers’ payments appear on their credit report; however, 63 percent of BHPH customers would like their payments reported. As a result, BHPH dealers should consider using messages such as, “We Can Help You Rebuild Your Credit.” Just be sure, if you advertise this message, you can follow through on it. Also, don’t forget to vet this message with your legal counsel.

Understanding Buy Here-Pay Here Customers2 011 B H P H B U Y E R S T U D Y F R O M A U T O T R A D E R . C O M

In October 2010 and January 2011, the National Alliance of Buy Here-Pay Here Dealers (NABD) and AutoTrader.

com teamed up for a groundbreaking study to define the consumer profile of the average BHPH customer and to understand the unique shopping needs of this customer segment. The two-part study included qualitative focus groups conducted in Los Angeles and Dallas and a national quantitative online survey among 606 BHPH buyers who purchased within the previous 18 months.

The results of this study affirm for the first time many common perceptions among the BHPH community about the priorities and behaviors of BHPH customers. There are also some new findings about their Internet usage as well as the amount of research BHPH shoppers are conducting prior to visiting a dealership. Finally, we identify key messages BHPH dealers can focus on to more effectively target their advertising and influence BHPH shoppers during the shopping process.

CONSUMER PROFILE OF THE AVERAGE CUSTOMERBHPH Buyers vs. Traditional Buyers

The FindingsFour out of five BHPH customers

conduct research before visiting the dealership. According to the study, 81 percent of BHPH vehicle buyers said they performed either some or a great deal of research as part of the car shopping process before going to a dealership compared to the 19 percent who stated they conducted very little research.

Seventy percent of BHPH shoppers regularly use the Internet; that’s as much as traditional shoppers for general purposes. However, BHPH car buyers do not use the Internet for vehicle shopping as much as traditional auto buyers.

With four out of five shoppers conducting research prior to visiting a dealership coupled with the high percentage of BHPH customers already online, the implication is there’s an opportunity for BHPH dealers to reach and influence their shoppers by tapping into the online automotive space with advertising messages and information that resonate with the targeted consumer.

It’s important for BHPH dealers to align their advertising with the unique needs of BHPH shoppers. The need for financing approval drives the shopping process for BHPH shoppers. Nearly two out of three BHPH customers enter the process with securing financing or identifying a dealer as their first priority. While this information is in line with what the BHPH industry has long suspected, the key is to align your advertising messages with the shopping priorities of your customer base. Effectively communicating the right messages in your advertising may dramatically improve the chances of turning a shopper into an actual customer.

First Step in the Shopping Process

KEY MESSAGES TO COMMUNICATEFocus on Approval: Since approval is a BHPH shoppers’ top concern, messages about financing approval should take precedence in BHPH dealer advertising – both online and offline.

Talk about Speed of Process: When making a dealership selection, many BHPH shoppers are interested finding a dealer who can handle the vehicle purchase process quickly, according to the study. The good news is 83 percent of BHPH dealers complete the buying process in two hours or less. As a result, this message is an important one to include in your advertising. For example, “Get Your Car in Less Than 2 Hours!”

Consider Reporting Customer Payments to Credit Bureaus: Only 37 percent of BHPH customers’ payments appear on their credit report; however, 63 percent of BHPH customers would like their payments reported. As a result, BHPH dealers should consider using messages such as, “We Can Help You Rebuild Your Credit.” Just be sure, if you advertise this message, you can follow through on it. Also, don’t forget to vet this message with your legal counsel.


With four out of five shoppers conducting research prior to visiting a dealership coupled with the high percentage of BHPH customers already online, the implication is there’s an opportunity for BHPH dealers to reach and influence their shoppers by tapping into the online automotive space with advertising messages and information that resonate with the targeted consumer. It’s important for BHPH dealers to align their advertising with the unique needs of BHPH shoppers. The need for financing approval drives the shopping process for BHPH shoppers. Nearly two out of three BHPH customers enter the process with securing financing or identifying a dealer as their first priority. While this information is in line with what the BHPH industry has long suspected, the key is to align your advertising messages with the shopping priorities of your customer base. Effectively communicating the right messages in your advertising may dramatically improve the chances of turning a shopper into an actual customer. First Step in the Shopping Process



BHPH

S E V E N T Y P E R C E N T O F B H P H S H O P P E RS R EG U L A R LY US E T H E I N T E R N E T



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What can a used dealer to do add revenue in these challenging economic times? Surveying dealers

at the recent NIADA convention in Las Vegas, we found many different approaches to this challenge of growing profits in a challenging economy.

Many of the dealers we spoke with were selling service contracts, warranties, gap insurance, and credit insurance, all reputable products sold to the customer who is already purchasing a vehicle.

Vehicle rental is an often overlooked program that can actually bring customers in who would otherwise not have a reason to set foot on your sales lot. Many of the dealers we spoke with at the convention that did offer rentals said it had been the difference between them surviving the tough economy of the last several years and often made the difference between the dealer principals drawing a paycheck or not.

Adding a rental operation several years ago has become one of the smartest moves Joe Baldwin ever made. The owner of Baldwin Motor cars in Lafayette, Ind., bought a Rent-A-

Wreck franchise in 2000 while his retail market was still strong. At times as the market has weakened, he said, his rental operation, which he operates from the same facility as his Buy Here-Pay Here store, has kept the business a success.

“Without the rental business, I would be out of business by now,” Baldwin said. “I guarantee it.”

Wayne Webb, a consultant with Peer Group Resources Inc., which organizes 20 Groups for rental car operations, said by adding rental franchises to their operations, dealers have increased traffic by as many as 150 potential customers per month with only 25 rental units.

Baldwin’s rental fleet represents the bulk of his inventory. He typically keeps 60 rental units and as few as 15 retail units.

“When I first bought the rental franchise people laughed,” Baldwin said. “They told me I was never going to make any money with it.”

His goal was an extra $5,000 a month. The rental operation earned Baldwin $100,000 in the first year. Baldwin said his key to success was buying the right inventory.

Rent-A-Wreck franchisees stock their own inventory, and more than 100 of their nearly 200 franchisees also are dealers.

Mel Morris started a sales and service operation in Canton, Mich., prior to buying a Rent-A-Wreck franchise in 1992. He runs Canton Auto Sales, Mel’s Auto Clinic and Rent-A-Wreck from of the same building.

“When business is good you’re selling a car every day, repairs are up and most of the rental fleet is out,” he said. “All aspects of the business feed into each other.”

The increased traffic from the rental operation brings more opportunity to sell autos. He also rents a lot of vehicles to people awaiting repairs, which allows him to bid on any of their future repair jobs.

“It all works together. Customers come in to rent a car, see the cars I have for sale and end up buying one from me at a later date,” Morris said.

For more information about Rent-A-Wreck, or to find out about adding a rental franchise to your dealership, contact Andrew Iatridis at 469-939-6132 or [email protected].

Used Dealers Add Rental Franchise to Supplement Business

Get Started with NIADA’s Mobile App Today! For Details & Instructions Visit: http://niada.gigglepop.com or Call 1-855-MY-NIADA (855.696.4232)

ACCESS GUIDEBOOK VEHICLE APPRAISAL SERVICES • GET INSTANT VEHICLE HISTORY REPORTS • ACCESS AUCTION PRE SALE RUN LISTS NATIONWIDE • STAY INFORMED WITH NIADA EVENTS & PROGRAMS

the NEXT generation of NIADA

try NIADA’S new MOBILE APP

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Lescota has conducted workshops and educational seminars for General Motors, Ford, Chrysler, Honda and many other automakers.

Joe Lescota, Northwood University’s automotive marketing department chair, was named the winner of the 2011 Ring of Honor award at the National Independent Automobile Dealers Association (NIADA) 65th Annual Convention & Expo at Caesars Palace . Inductees to NIADA’s Ring of Honor are a prestigious and honorable circle of men and women who have dedicated their careers to the automobile industry, according to Michael R. Linn, NIADA’s CEO.

Lescota, who has more than a quarter-century of retail automotive experience, is the instructor for NIADA’s Certified Master Dealer Program and sits on the board of trustees of the NIADA Foundation.

“He has filled every management position within all departments of various dealerships, including dealer operation. He quickly gained a reputation for developing

innovative management techniques leading to reduced employee turnover and increased customer retention and satisfaction,” Linn said. “Joe is a person for whom I have great admiration and respect.”

Lescota has conducted workshops and educational seminars for General Motors, Ford, Chrysler, Honda and many other automakers. He served as the program director for the Automotive Satellite Television Network and helped to introduce college credit courses into dealerships nationwide via distance learning.

In addition, Lescota, was named Man of the Year by the Association of Finance and Insurance Professionals in 2006 and has received Northwood’s Faculty Excellence Award five times in the last decade. He is the twenty-first inductee to the NIADA Ring of Honor.

2011 Ring of Honor Award

NIADA Honors

t

Plans to cover groups and individuals.

A promise to cover everyone.

We have a broad range of group plan options, including PPO,

Flexible Blue (HSA), HMO, Dental and Vision. We also offer

affordable individual health care for you and your family, at any

stage of your life.

Blues group and individual members have unparalleled statewide

and nationwide access to the doctors and hospitals they need.

We accept everyone, regardless of medical condition and will never

drop your employees for health reasons. Our nonprofit mission

means you can trust us to put your needs first instead of paying

dividends to stockholders. We reinvest in health care for Michigan.

Because Michigan is our home.

For more information, contact:

bcbsm.com MiBCN.com

BCBSM-Half-GroupORiIndColor.indd 1 1/10/08 9:53:34 AM

Michigan Independent Automobile Dealers Association

248-828-7010

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NEWAUTO EXCHANGE INC.CHASE AUTO FINANCEPLATINUM AUTO SALESROMBAUGH’S AUTO SALESSKYLINE AUTO SALES INC.TODD LANDMAN CAR CO.AUTOMOTIVE BROKERS LLCSUSKI USED CARS LLC

WELCOME NEW/RENEW MEMBERS Autumn 2011 Driveline

DYER AUTO BODY LLCEASTPOINTE CAR & GOLD EXCHANGEQUALITY WHOLESALE CARS INC.UNION CITY AUTO SALES

RENEWA & B MOTORS INC.AUTO PRO INC.AUTOMAX FINANCE CENTERAUTOZONEBRIAN’S AUTO SALESBRIGHTS USED CARSCAR SPA, INC.DALTON AUTO SALESDEALS UNLIMITED INC.GERRY CARSINSURANCE AUTO AUCTIONJERRY KASH INC.KCS AUTO LANDLAKESHORE RESCUE MISSIONMOTORCARS OF LANSINGNATIONWIDE ACCEPTANCE CORPPEOPLE’S CHOICE AUTO SALES LLCRAINBOW MOTOR SALESRICHARDSON CHEVROLET BUICK INC.SML INDUSTRIES LLCSOUTH LYON MOTORS INC.SPRAGUE AUTOSUMMIT AUTO SALES INC.

TWO O’S MOTOR SALES INC.VAN DAM AUTO SALES INC.VANDER HAAG CAR SALESVOLUNTEERS OF AMERICA MICHIGANWEST MICHIGAN AUTO AUCTIONWEST POINT AUTO SALESA & C AUTO EXPO INC.A K AUTO PLACE LLCALL SEASONS AUTO LLCBLAKE HOLLENBECK AUTO SALES INC.BOB’S AUTO SALESBOULEVARD USED CARSCAR COUNTRYCHARLEVOIX MOTORS INC.GREATER KALAMAZOO AUTO AUCTIONHAYLETT AUTO CO.I DEAL AUTO INC.KELLY’S CARSLINDEROTH SALES & SERVICELOPRESTO’S AUTO SALESONAWAY AUTO & FINANCE CO.P.T. AUTO SALES INC.PENN WARRANTY CORPORATIONPERFORMANCE UNLIMITED SALES INC.RHO-MAR AGENCY INC.RIVERSIDE AUTO LLCSHARP CAR CO.STRANE ENTERPRISESSUPERIOR AUTOMOTIVE

AUTO CITY AUTO GROUP LEASING LLCB & B USED CARSBOWEN-FISCHER MOTORS, INC.C B R AUTO SALESCAR FINANCIAL SERVICES INC.CERTIFIED MOTORSCHEBOYGAN AUTO BROKERS INC.CRANDALL AUTO SALESDON’S ADOPT-A-CARKALS AUTO SALESKALS AUTO SALES IILARRY’S USED CARSLUCKY AUTO SALES INC.MAJESTIC CAR CO.MARK’S AUTOS LLCMD AUTO SALES LLCPRESTIGE IMPORTS WEST MICHIGANQUALITY MOTORSR & R VEHICLE SALESSUPERIOR MOTORSUNITY MOTORS LLCVAN’S MOTOR SALES INC.WALT SICARD CAR CO.

At NIADA, we’re always looking for ways to help you get more out of your membership. That’s why we’ve teamed up with OfficeMax to introduce the OfficeMax Partner Advantage program.

OfficeMax is a leader in both business-to-business office product solutions and retail office products. OfficeMax provides office supplies and paper, in-store print and document services through OfficeMax ImPress technology products and solutions, and furniture to consumers and to large, medium and small businesses. OfficeMax customers are served by 35,000 associates through direct sales, catalogs, e-commerce and retail stores.

OfficeMax has more than 40 years of experience in the business-to-business marketplace and is recognized as one of the most experienced national business products supplier. Corporate United, the nation’s largest group purchasing organization, selected OfficeMax as the 2010 recipient of the Corporate United Supplier of the Year Award.

Through the OfficeMax Partner Advantage Program, NIADA members receive:

- Exclusive member-only pricing- Superior personalized service- Innovative programs that deliver value to companies and individuals- Highly skilled technology team- More than 25,000 office essential products- Award-winning house brands- Large recycled product offering- Multiple ordering channels

Online ordering is easy; just visit www.officemaxsolutions.com and type in the following:User name: 0722739wPassword: omaxadvantage1

To order via phone, call 877-969-6629. Members with 20 or more employees may call 800-248-6343 to request more information on setting up your business account.

Partners

OfficeMax Offers New Partnership

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FORMS AMOUNTS UNIT PRICE QUANTITY TOTAL

RD-108, 4-Part NCR 50 250 500

12.75 60.00 115.00

Imprinted RD-108, black ink 250 500

145.00 205.00

Privacy Forms (Complete FTC Worksheet online at: www.buyadr.com)

100 500

30.00 50.00

FTC Buyers Guide, 2-Part NCR, with adhesive

100 500

15.50 72.50

FTC Spanish Buyers Guide, 2-Pt NCR, with adhesive

100 500

14.00 65.00

Deal Jacket Envelopes 9” x 12”

100 500

22.25 101.25

Odometer Forms 3-Part NCR

100 500

11.75 53.75

“Police” Record Book per book 28.50

MI Retail Purchase Agreements 3-Part NCR

100 500

23.00 100.00

Imprinted MI Retail Purchase Agreement, 3-Part NCR, black ink

500 1000

241.75 341.75

HARDWARE AMOUNTS UNIT PRICE QUANTITY TOTAL

Thumb Screws 50 12.50

Pan Head Screws 100 8.00

Hex Head Screws 100 9.00

Metric Screws 100 8.00

License Plate Magnet, Vinyl Coated each 8.75

BOOKS AMOUNTS UNIT PRICE QUANTITY TOTAL

NADA Used Car Guide 1 book 8.00

NADA Older Car Guide 1 book 30.00

NADA Recreation Vehicle Guide 1 book 45.00

NADA Marine Appraisal Guide (7-100’) 1 book 45.00

NADA Motorcycle-Snowmobile Guide 1 book 30.00

NADA Classic Car Guide Book 1 book 30.00

ADVERTISING SUPPLIES AMOUNTS UNIT PRICE QUANTITY TOTAL

Grease Pencils - Yellow or White each 1.00

“Jumbo Line” Waterbase Markers Fluorescent Colors - Red, White, Pink, Yellow or Blue

each 9.00

“Broad Line” Waterbase Markers Fluorescent Colors - Pink, Green, Yellow or Orange

each 5.00

“Medium Line” Waterbase Markers Fluorescent Colors - White, Red, Yellow, Black or Blue

each 4.00

ADVERTISING SUPPLIES AMOUNTS UNIT PRICE QUANTITY TOTAL

Windshield Numbers Peel & Stick 7-1/2” - Neon Green or Pink: “$”, “0” thru ”9”

per dozen 3.25

Slogan Signs: 15” Neon Green: 0 Down, 4-Cylinder, 4x4, 6-Cylinder, Air Conditioning, All Wheel Drive, Automatic, Certified, Diesel, Down, Extra Clean, Financing Available, Gas Saver, Great Gas Mileage, Lease, Leather, Like New, Loaded, Low Mileage, One Owner, Per Month, Reduced, Sharp, Special, V-8, War-ranty

per dozen 3.50

Year Model Slogan Oval

“2002” Red/Yellow or Green/Black per dozen 7.50










Mirror Tags: Fluorescent Colors: As Advertised, Lease - Pink or Yellow Blank - Green, Red, Pink, Yellow Red Tag Special, Was/Now - Red Sale - Green, Red, Pink, Yellow Special - Green, Red, Pink, Yellow

pack of 50 18.50

Antenna Flags: Fluorescent Colors Yellow, Multi, Red-White-Blue or Red

per dozen 21.00

Antenna Flags: Black & White Checkered per dozen 21.00

American Clip on Flags per dozen 21.00

Pennants: 120 ft. String Multi-Color each 21.00

SUPPLIES AMOUNTS UNIT PRICE QUANTITY TOTAL

Key Tags - Blue Cardboard Yellow Hard Plastic “Versatags” - Red, White, Blue, Green or Yellow

500 250 250

35.00 21.00 27.00

Red/Blue Stock Stickers 100 8.00

Single Edged Razor Blades box of 100 7.75

Metal Scraper each 2.50

Rubber Plate Holders each 12.00

Snow Rakes each 17.00

REV. 8/4/2011 PAGE 1 SUBTOTAL

PAGE 1

□ MasterCard □ VISA □ Discover □ American Express

ADDRESS

Date of Order ADR of Michigan 55 E. Long Lake Rd., PMB 233, Troy, MI 48085

www.buyadr.com 888-855-0100 · Fax: 888-855-7111

NOTE: Payment must accompany your order. MI sales tax will be added to all orders. Prices are subject to change without notice. Please allow 2-3 weeks for customized orders. Make check payable to: ADR of Michigan

SHIP TO NAME

CITY, STATE, ZIP CODE

(AREA CODE) PHONE (AREA CODE) FAX

Credit Card Charge to:

Credit Card Account Number:

Signature (required for credit cards only)

ORDER ONLINE, BY PHONE, FAX, OR MAIL

IS THIS A RESIDENTIAL ADDRESS? YES___ NO___

Available Online at: www.buyadr.com

Billing Address:____________________________________________________________

Name on Card:_____________________________________________________________

Exp. Date:_________________________ Customer Security Code (CSC):_____________

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PAGE 2

ADDITIONAL FORMS AMOUNTS UNIT PRICE QUANTITY TOTAL Customer Proposal - 2 Part: Provides info the dealer-ship needs to complete a transaction.

100 $23.00

Trade-In Vehicle Appraisal - 2 Part: Ensures informa-tion is available to represent vehicle for sale.

100 $23.00

Test Drive Agreement - 2 Part: Obtains important cus-tomer information, including insurance coverage.

100 $23.00

Good Will Repair Acknowledgement - 2 Part: Protects the dealer’s ability with regard to implied warranties.

100 $23.00

Wholesales Purchase Agreement - 2 Part 100 $23.00 Acknowledgement of AS-IS Sale - 2 Part: Verifies that the consumer is satisfied with vehicle & understands the transaction.

100 $23.00

Delivery Confirmation - 2 Part: Verifies that the con-sumer is satisfied with the vehicle and understands the transaction.

100 $23.00

Delivery Confirmation-S: Spanish version of the above form.

100 $23.00

Delivery Confirmation-F: Other foreign language ver-sions of the Delivery Confirmation.

100 $23.00

Interpreter’s Acknowledgement - 2 Part: For use when sale is conducted in language other than English

100 $23.00

Customer Delivery Checklist - 2 Part: Records existing rights and/or responsibilities of the parties.

100 $23.00

Notice to Co-Signer - 2 Part: Discloses the obligations they are undertaking by agreeing to act as a co-signer.

100 $23.00

Insurance Coverage Acknowledgement - 2 Part: Con-firms customer’s obligation to maintain insurance cov-erage.

100 $23.00

F & I Product Confirmation - 2 Part: Confirms which products the consumer purchased.

100 $23.00

Authorization to Release Payoff Info - 2 Part: Dealer-ship can get protected information concerning a lien release.

100 $23.00

Used Vehicle Limited Warranty - 2 Part: Enables the dealership to sell a vehicle with a “Limited” warranty.

100 $23.00

Deposit Receipt - Documents transaction information required to comply with UDAP statutes

200 $21.00

Arbitration Agreement 100 $23.00

Service Loaner Agreement 100 $23.00

Acknowledgement of Voluntary Resign 100 $23.00

SUBTOTAL: PAGE 2

SUBTOTAL: PAGE 1

TOTAL

MIADA MEMBER DISCOUNT (10%)

*FREIGHT

**GRAND TOTAL

*MINIMUM PURCHASE FOR FREE FREIGHT $125 (call for freight quote if purchase is under $125)

**Complete Payment Information on the Top of Page 1

Now View Products & Place Orders Online! Visit Us at: www.buyadr.com

www.buyadr.com www.buyadr.com

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MI DEALER ORDER FORM

Wolters Kluwer Financial Services/Bankers Systems Inc. Retail Installment Contracts & Security Agreements

MI Dealers Receive WKFS/BSI Retail Pricing

(when placed through ADR of Michigan only)

15% Off

Simple Interest without Late Fee (RS-SI-MV-MI)

Quantity* WKFS/BSI Retail

Pricing Pricing

Through ADR of MI † Quantity 6% MI

Sales Tax Simple Interest without

Late Fees

Total

Subtotal 50 $89.75 $77.00

100 $167.92 $143.00

200 $310.98 $265.00

Simple Interest with Late Fee (RS-SI-MVLF-MI)


Pricing Pricing


Sales Tax Simple Interest

with Late Fee

Total

Subtotal 50 $177.42 $151.00

100 $336.53 $287.00

200 $643.47 $547.00

* Larger quantity quotes available upon request.


Shipping Information

ADDRESS

SHIP TO NAME




MAIL TO: ADR of Michigan, 55 E. LONG LAKE RD PMB 233, TROY, MI 48085 FAX TO: 888-855-7111

PHONE ORDERS: 888-855-0100 ORDER ONLINE: www.buyadr.com

† BSI shipping and handling will be charged separately.

Prices are subject to change without notice

EMAIL ADDRESS

Payment Information




Signature X______________________________________________

Billing Address:___________________________________________________________

Exp. Date:________________________ Customer Security Code (CSC):_____________

MI DEALER ORDER FORM

Wolters Kluwer Financial Services/Bankers Systems Inc. Retail Installment Contracts & Security Agreements

MI Dealers Receive WKFS/BSI Retail Pricing

(when placed through ADR of Michigan only)

15% Off

Simple Interest without Late Fee (RS-SI-MV-MI)


Pricing Pricing


Sales Tax Simple Interest without

Late Fees

Total

Subtotal 50 $89.75 $77.00

100 $167.92 $143.00

200 $310.98 $265.00

Simple Interest with Late Fee (RS-SI-MVLF-MI)


Pricing Pricing


Sales Tax Simple Interest

with Late Fee

Total

Subtotal 50 $177.42 $151.00

100 $336.53 $287.00

200 $643.47 $547.00



Shipping Information

ADDRESS

SHIP TO NAME




MAIL TO: ADR of Michigan, 55 E. LONG LAKE RD PMB 233, TROY, MI 48085 FAX TO: 888-855-7111

PHONE ORDERS: 888-855-0100 ORDER ONLINE: www.buyadr.com

† BSI shipping and handling will be charged separately.

Prices are subject to change without notice

EMAIL ADDRESS

Payment Information




Signature X______________________________________________

Billing Address:___________________________________________________________

Exp. Date:________________________ Customer Security Code (CSC):_____________

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FREEDEALER EDUCATION ONLY ON NIADA.TV24/7

Watch where you

want......when you want

Sales • Operations • F&I • Remarketing •

Compliance • Legal/Regulatory

• Special Features • Industry Events

PLUS: Automotive Industry News &

Special Monthly Programs

www.niada.tv

As an attorney, I find that many people are surprised to learn I am also a magician. It’s a fun and challenging hobby that can offer good lessons. For example, you quickly learn that things are not

always what they seem. To master most techniques, you need to clearly understand what’s happening beyond the visual component.

This lesson also applies to regulatory compliance. For dealerships, it particularly rings true when it comes to relationships with third-party service providers and their products. A company might appear to be reputable on the outside, but it could be just an illusion.

There are risks involved with all third-party relationships, whether they involve backend products dealers sell to buyers, such as credit life insur-ance, GAP insurance, extended warranties or service contracts, or opera-tional products dealers buy or license from third-parties, including con-sumer credit information, loan documents or software.

One risk with third-party relationships is whether the vendor under-stands and satisfies its unique regulatory compliance requirements. As a dealer, do you understand where your responsibilities end and the ven-dor’s begin in terms of service, performance and providing any required disclosures? A vendor’s compliance failure may ultimately cause your deal-ership to be out of compliance too. So how do you protect your dealership’s reputation and ensure your vendors understand and are focused on com-pliance? Here are some questions to consider in the due diligence process:

• Does the vendor stand behind its products and services with a war-ranty or other written representations?

• Does it have stable management and finances to support its obligations to you and your customers?

• Does its business history suggest that it will be around several years from now to fulfill its promises?

• Does it have a customer service area that is responsive to customer questions and problems?

• Does it understand the laws and regulations that apply to its products and services? For example, does it know whether its product is consid-ered insurance in your state? If it is an insurance product, is the vendor licensed to sell that particular type of insurance in your state?

• Is the vendor current on law or regulatory changes that affect its prod-ucts and services (are its marketing materials and customer contracts in compliance and up-to-date)?

• Is the vendor the subject of any complaints to regulators, investiga-tions, and/or is it involved in any serious litigation?

Dealers want to make sure their customers are getting the best service possible, and regulatory compliance issues can greatly impact that goal. Third-party providers may have relationships with hundreds or thousands of dealerships. Their offerings may include a number of products in mul-tiple states, which can increase the chances for error or oversight.

In a regulatory environment that’s constantly changing, the dealer needs to confirm that its vendors are keeping up with state and federal laws. A third-party provider might say the magic words you want to hear, but it’s up to you to make sure it’s not hocus-pocus.

BY CHIP ZYVOLOSKI Chip Zyvoloski is senior attorney for indirect lending at Wolters Kluwer Financial Services. For more information, visit www.wolterskluwerfs.com/indirect.

What You See Isn’t Always What You Get

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