Ignorance is Not an Acceptable Excuse

Transcription

1 auto INDEPENDENT dealer Georgia Independent Automobile Dealers Association March April 2014 Ignorance is Not an Acceptable Excuse Make Compliance a Priority This Year PREVENT ODOMETER FRAUD with proactive solutions, p. 4 OFFER FULL DISCLOSURE to meet FTC regulations, p. 6 KNOW THE REGULATORY HOT SPOTS to eliminate legal action, p. 18 Achieve Technological Zen with apps to save you time and money, p. 10 How to Present Your Portfolio to get the most floor planning dollars, p. 36

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3 GEORGIA INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION INDEPENDENT auto dealer MARCH APRIL Are you a Good Steward for the Industry? President s Message 4 These Dealers are Sadly Mistaken Executive Director s Message 6 End of 2014 Legislative Session Report 8 Car Lawyer - Compliance Tip: Understanding Vehicle Finance 10 Technological Zen: Apps to Save Time & Money 12 5 Pointers to Improve Your Used Vehicle Reconditioning Processes 14 4 Tips to Improve the Trade-In Experience 18 Regulatory Hot Spots 22 Why Car Buyers Are Positively Influenced by Display Advertising 26 FTC s Privacy Rule & Auto Dealers 30 Dreams of a More Streamlined Car-Buying Process 32 6 Ways to Leverage Social Media to Benefit Your Dealership 34 Equifax Automotive Announces Expanded Suite of Online Solutions for Dealers 36 How to Present Your Portfolio to Get the Most Floor Planning Dollars 44 New and Renewed Members 48 Auction Directory 53 Service Provider Directory BOARD OF DIRECTORS The magazine of the GEORGIA INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION A Oak Ridge Commerce Way Austell, Georgia T or F EXECUTIVE DIRECTOR EDITOR Paul R. John MAGAZINE COORDINATOR & AD SALES Professional Mojo info@professionalmojo.com PRODUCTION EDITOR COPY WRITING Professional Mojo info@professionalmojo.com DEALER SERVICES AND VENDOR RELATIONS Amy Bennett OFFICE MANAGER Susan Strickland For more information about the GIADA, topics addressed in this issue, or for additional copies please contact GIADA, (800) Copyright 2014 Chairman of the Board Sean Lodhi City Auto Brokers Marietta, GA President Billy Graham Graham Auto Sales, Inc. Loganville, GA President Elect Larry Lewallen Rainwater Motor Company Douglasville, GA First Vice President Robert Culver AutoSmith of Georgia, Inc. Riverdale, GA Second Vice President Jennifer Knights M&M Motors Hinesville, GA Third Vice President Bart Barton Barton Used Cars Newnan, GA Sr. Vice President-at-Large Joe Addison Joe Addison Motors, Inc. Savannah, GA First Vice President-at-Large Dennis Pope Peoples Financial Mableton Austell, GA Second Vice President-at-Large Glen Reeves Reeves Insurance Associates Douglasville, GA Third Vice President-at-Large Sandra Gesham Auto Finance Forest Park, GA Fourth Vice President-at-Large Guy Padgett Sterling Credit Aiken, SC Treasurer Lee Cavender Cavender Auto Sales Gainesville, GA Secretary Dan Stryzinski Members Auto Choice Buford, GA Auxiliary President Sharon Padgett Vice President Venetia Lewallen Secretary Renae Barton Treasurer Jill Mosley GIADA Independent Auto Dealer Mar/Apr

4 ON THE MARK Are you a good steward for the industry? I hope this month s message finds everyone in the middle of an awesome tax season. I want to address a subject that affects every one of us large or small, buy here pay here or traditional dealers equally: the image of the used car dealer. I had the pleasure of working for a dealer principal many years ago who had a very strict policy about image. It was his position that whether you were at work or not, you represented his dealership 24/7! I could not agree more! Every one of us represents the used car industry in Georgia everyday. Are you a good steward for the industry? Do you represent us in a positive manner? Any time you have interaction with the public you are the face of the industry to them. I hope you are as proud to be an independent car dealer as I am! I was fortunate to go to Washington to attend a leadership conference last fall and the one statement I kept hearing over and over from both our congressmen and senators was that we are the heartbeat of America. We are small businesses that are at the heart of the American dream. I hope everyday you will strive to represent us in a positive manner. I do! Happy selling. Billy Graham GIADA PRESIDENT Billy Graham Graham Auto Sales, Inc. GEORGIA INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION GIADA is a not-for-profit industry trade association that has been the voice of Georgia s independent auto dealers since GIADA is committed to representing, educating, and informing Georgia s most successful independent motor vehicle dealers. Dealers turn to GIADA to provide them solutions and answers to business related questions and consumer related questions. At present, there are approximately 2,375 GIADA members, 2,150 licensed auto dealers and 225 companies who offer products and services to Georgia Auto Dealers. Our primary purpose is to identify and address the legal and legislative issues that confront the used car industry in Georgia. But we do much more. Through GIADA s impressive network of a wide variety of companies who support our industry, our members enjoy pre-negotiated discounts on products and services they need to be successful in the car business. We encourage you to check out the GIADA Dealer Service Provider Directory. These services include, but are not limited to auto auctions, insurance companies, legal advice, and advertising. All members receive two coupon books containing about $38,000 in real discounts. GIADA also maintains a large inventory of legal forms dealers need to conduct business. Members receive a 30% discount on all forms. Members also enjoy discounted rates on all GIADA training programs, or sometimes can attend for free. 2 GIADA Independent Auto Dealer Mar/Apr 2014

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6 THE PULSE OF GIADA These dealers are sadly mistaken. I realize that our president wrote about this same matter in our last magazine, but it is a very real problem in Georgia that deserves another look and immediate action. The GIADA is taking a close look at the growing problem of dealers illegally turning back odometers, as has been recently reported in the Atlanta media. As an association that represents quality automobile dealers, we do not want to be reactive with this issue but proactive. A new study from CARFAX shows Georgia has the fourth highest total of registered cars showing evidence of odometer fraud. Only California, Texas and New York were worse in the nation for odometer fraud. Forty-thousand cars now on the road in Georgia are affected, according to the study. The Department of Justice estimates the average victim loses $4,000 by paying too much and paying for added repairs. Dealers who are engaged in odometer fraud need to stop now. And if these crooked dealers think they are immune from prosecution by writing exempt where the miles go on a car they are selling that is ten years or older they are sadly mistaken. Clocking an odometer is a misdemeanor under Georgia law, with penalties including a fine of up to $1,000 and/or one year in jail. Tampering with or knowingly misrepresenting an odometer mileage reading is illegal under federal law, which classifies the crime as a felony, carrying penalties of up to three years in prison and/or a $50,000 fine per violation. Additionally, if you are the victim of odometer fraud, you have the right to file a civil suit for damages in either state or federal court for up to three times your actual damages or $1,500, whichever is greater (plus attorney s fees and court costs, under the federal statute). What the Law Prohibits Disconnecting, resetting or replacing the odometer with intent to change the mileage reading. Operating a vehicle with a nonfunctional odometer with intent to defraud. Advertising, selling, using or installing a device that causes an odometer to register incorrectly. Knowingly falsifying an odometer mileage disclosure statement. Failing to attach a written notice of odometer replacement to the left door frame of the vehicle, or removing or altering such a notice. Accepting or issuing a blank or incomplete odometer mileage disclosure statement. Conspiring with any other person to violate the odometer fraud statute or related disclosure regulations. Dealers, if you have evidence that another dealer is involved with odometer fraud, you need to do the right thing and file a complaint with the Governor s Office of Consumer Protection: Sometimes it takes an industry to step up and get things fixed themselves. Do not hesitate one bit about turning in dealers you know are involved in cutting miles. This problem is hurting every one of us in the car business. Paul John GIADA EXECUTIVE DIRECTOR Paul John...if these crooked dealers think that they are immune from prosecution because they are selling a vehicle that is ten years or older, and can write exempt where the miles go, they are sadly mistaken. 4 GIADA Independent Auto Dealer Mar/Apr 2014

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8 LEGISLATIVE ROUNDUP End of 2014 Legislative Session Report Drama and controversy abound by Paul John At midnight on Thursday, March 20, the 152nd Georgia General Assembly completed one of the fastest legislative sessions in over two decades. Although the second year of the biennial legislative term was an expedited affair due to the upcoming primary elections scheduled for May 20, drama and controversy were certainly abound in the final two weeks leading up to Sine Die. The last two days in particular were filled with late nights, political jockeying, and gamesmanship from members in both chambers, as legislators made a final push to secure favorable passage for their bills before the clock struck twelve. All car dealers in Georgia should be thankful and proud of what the GIADA is doing to protect their interests. Our lobbyists are vitally important and there is strength in numbers. GIADA, with 2500 members, is the largest state independent automobile dealer association in the entire country. As far as GIADA is concerned, HB 729, the bill making adjustments to the new Title and Ad Valorem Tax (TAVT) on vehicles, passed both chambers and awaits the Governor s signature. We communicated GIADA s position on HB 729 with all appropriate stakeholders and legislators. HB 729 addresses the Title and Ad Valorem Tax (title fee) that replaced the sales tax and ad valorem tax on vehicles. As we all know, the TAVT applies to all vehicle transactions (dealer and non-dealer transactions), which evens the playing field. Our government affairs team had to fight very hard in the House against the Georgia Automobile Dealers Association, the Tax Commissioners Association, the Association of County Commissioners of Georgia and some manufacturers that attempted to make the TAVT be based on the higher of book value or retail price when dealing with used cars. GIADA s position is that this is a tax increase to go to the higher of the two, and that we do not want a tax increase on our dealers, customers, finance companies and others. Book is typically 11%-12% lower than the retail price. This was a major fight last year, is again this year, and will be next year. The same coalition mentioned above has been attempting to do away with Buy Here Pay Here Dealers receiving a 2.5% fee reduction on the TAVT. HB 729, as passed, addresses many aspects of the TAVT. Makes it where the TAVT calculation on the trade in is based on the book value and not whatever the dealer says the trade in value is. This stops stakeholders from gaming the system on the tradein allowance. One of the reasons for using book value to calculate the TAVT for used cars is to avoid fraud and gaming the system. This last step of making the tradein TAVT calculation come from the book value is the last step in ensuring there will be no fraud or gaming the system. Plus, the Georgia Automobile Dealers Association, the Tax Commissioner Association, some manufacturers, and the Association of County Commissioners of Georgia have argued this year and last year, that the TAVT for used cars should be calculated by using the higher of book or retail. The reason being this would bring in more money 6 GIADA Independent Auto Dealer Mar/Apr 2014

9 LEGISLATIVE ROUNDUP to the counties and the state. The Georgia Independent Automobile Dealers Association s position is we do not support this, as it will be a tax increase on customers, dealers, finance companies, or anyone else that has to pay the increased TAVT due to this proposed change. The current numbers appear to be good for revenue coming into the state and counties from the TAVT. Addresses someone appealing the TAVT. This part is not in the bill, but the dealer can handle the appeal for the buyer if the buyer gives the dealer the power of attorney to do so. When leasing, a lessor receives a motor vehicle which was returned to the lessor (whoever is providing the lease) by a lessee and the lessor utilizes such vehicle as a trade-in in the purchase of another motor vehicle to be leased to the same or a different lessee, such lessor shall receive credit for such trade-in vehicle in determining the fair market value of the vehicle being purchased. Allows for the Department of Revenue to issue a standardized form for dealers to use with TAVT when turning in information to the local tag agent. Makes it easier for all to administer the TAVT process. Although Georgia law already says the dealer has to handle title paperwork for the customer under another code section, new language in HB 729 enforces it and says a used motor vehicle dealer must handle the TAVT process for the customer, and the used motor vehicle dealer cannot just let the customer handle the TAVT with the tag agent themselves. If the dealer breaks this law, they face a $500 fine and a potential loss of license from the Used Car Board under the Secretary of State. This is the way it has always been. Allows for the dealer to apply for a TAVT refund for a customer. Allows for the temporary dealer license plate to be valid for 45 days after the date of purchase instead of 30 days, but all penalties for submitting titles to the tag offices after 30 days remain. Allows for DOR to grant a 30 day extension to the county tag agent if there are problems in getting the title paperwork completed. Allows for the dealer to submit title paperwork to the property county s tag agent electronically in addition to doing it by mail or in person. This is great being that Georgia has 159 counties and is a huge state. This is setting ETR up for the near future. GIADA supports HB 729 s final language. One of the many areas we ve focused on is making sure the trade-in allowance is protected, that the TAVT on the trade-in is calculated by book, not to let the actual trade-in itself be calculated by book, that dealers can help customers with appeals, that dealers are protected if a uniform bill of sale or form is proposed, that the language was removed that took away buy here pay here dealers 2.5% TAVT fee reduction, which it was, and that dealers are handling the TAVT with local tag offices and not customers. There was an attempt by the group we re fighting to have a legislator and/or legislators introduce separate legislation changing how TAVT (the Title and Ad Valorem Tax) is calculated. It would say the TAVT is calculated by the retail price or invoice instead of by book, or it would say the higher of the two. As was mentioned, our research has shown that book is typically 11-12% below retail, so we are opposed to it for that reason. Additionally, retail presents many more opportunities for fraud and gamesmanship, where book takes this out of the picture. Additionally, GIADA and our team is looking into helping the Used Car Board under the Secretary of State better identify those who are selling or renting their dealer license to others for a fee. Dealers who allow others to use their dealer license credentials for a fee so others can gain access to the dealer-only auctions and buy and sell cars at will need to stop this practice. Not only is this against the law, this is undermining every legitimate car dealer trying to play by the rules. Dealers who do this are enabling inexperienced, unlicensed random people to operate as a dealer and consumers are getting the bad end of the deal. Currently, there is a $500 fine, but it is not being enforced. This is becoming a major problem. Due to a very tight budget with the licensing division of the Secretary of State, the thought from the Secretary of State s office is more active reporting and enforcement by dealers to the Used Car Board. The Used Car Board under the Secretary of State can then handle the accused violators appropriately. As is evidenced by the issues we ve discussed, there was legislation this past session affecting GIADA in many areas. We have the strongest Lobbying team money can buy in our camp. This is vitally important and every single car dealer in Georgia should make sure that they are GIADA members because there is strength in numbers, and GIADA is the largest state independent automobile dealer association in the entire country - and has been for years. Why? Because this association is doing what it is supposed to be doing. Educating our members, representing our dealers at the state Capital, negotiating with auctions and other companies for the lowest dealer fees saving dealers thousands and being a phone call away when the dealers need us. Members, please make sure your membership is current, and non-members need to support GIADA by joining now. You receive more in return from this progressive and strong organization than the cost of the $250 annual membership GIADA Independent Auto Dealer Mar/Apr

10 THE CAR LAWYER Compliance Tip: Understanding Vehicle Finance More Winter Ahead! On February 2, Punxsutawney Phil predicted six more weeks of winter, and it looks like he got it right. In your breaks between shoveling the walkway and watching the kids make snow angels, look at what we ve come up with for our collection of selected legislative and regulatory highlights. We also recap of some of the many auto sale and financing lawsuits we follow. Remember, what we report here does not capture every recent development. We select those that may be particularly interesting to dealers. We include items from other states. Why? We want you to be able to see new legal developments and trends. Also, another state s laws might be a lot like your state s laws. If Attorneys General or plaintiffs lawyers are pursuing particular types of claims in other states, those claims might soon appear in your state. by Thomas B. Hudson and Nicole Frush Munro The National Automobile Dealers Association and the American Financial Services Association have just published an update of their consumer education booklet, Understanding Vehicle Finance. Although it is aimed at consumers, it makes an excellent training tool for dealers to use to introduce new employees to dealer financing, and to give experienced folks an opportunity to brush up on this important topic. We ve also recommended for years that dealers give a copy of the booklet to every customer, and send them in bulk to whoever teaches about financial matters at the local high school (with a business card attached, of course). The publication is free and available from the web sites of both organizations. It isn t copyrighted, so you can make copies to use for these purposes. dealership for a violation of the Kentucky Consumer Protection Act for representing that the car had a larger engine that it actually had. The trial court granted the dealership's motion to submit the claim to arbitration. The arbitrator ruled for the dealership, and the trial court confirmed the arbitrator's ruling. The Court of Appeals of Kentucky affirmed the trial court's ruling. The buyers argued that the arbitration agreement should not have been enforced because it was only contained in the buyer's order, which had not been signed by the dealership. The appellate court, however, determined that the buyer's order did not explicitly require the signature of the seller to be accepted by the seller. Because the buyers left the dealership with the car, the dealership took their This column does not offer legal advice. Always check with your own lawyer to learn how what we report might apply to you, or if you have any questions. Thomas B. Hudson Partner, Hudson Cook, LLC thudson@hudco.com Nicole Frush Munro Partner, Hudson Cook, LLC nmunro@hudco.com 8 GIADA Independent Auto Dealer Mar/Apr 2014 LITIGATION Arbitration Agreement in Buyer's Order Enforceable Despite Lack of Seller's Signature: When the dealer forgets to sign the arbitration agreement, you d think a court would side with the customer and refuse to enforce it, wouldn t you. Well, maybe not. When buyers bought a car, they signed a buyer's order containing an arbitration agreement, and they and the dealership signed a retail installment sales contract that did not contain an arbitration agreement. The buyers sued the

11 THE CAR LAWYER trade-in, the parties negotiated, and the dealership formalized the acceptance of the transaction with a signature on the RISC, the appellate court determined that the buyer's order and the arbitration agreement were enforceable. See Marrs v. Walters Automobiles, Inc., 2014 Ky. App. Unpub. LEXIS 76 (Ky. App. January 31, 2014). New York Dealership's Contacts with Florida Insufficient to Support Personal Jurisdiction: Can your car buyer sue you in another state? Sometimes yes, sometimes no. Here s a no. A buyer bought a car from a New York dealership. She later moved to Florida and was hurt in a car accident in Florida involving another Florida resident. She sued the dealership in Florida, claiming that her car was defective and was a cause of the accident. The dealership moved to dismiss the suit for lack of personal jurisdiction. The dealership was registered with a Florida auction company but did not buy vehicles from, nor sell vehicles to, that company. The dealership bought nine vehicles over the Internet from a Florida corporation over a 4-year period. The dealership also had five transactions over an 8-year period with customers that owned extended service warranties bought from Florida companies. In addition, the dealership assisted a company in obtaining financing for the company's vehicle buyers, and some of the financing involved vehicles sold in Florida, for which the dealership received $7,500. The trial court denied the dealership's motion to dismiss, but the Court of Appeal of Florida reversed, finding no specific jurisdiction, in which the alleged activities or actions of the defendant are directly connected to the forum state, and no general jurisdiction based on continuous and systematic business contacts with the state. See Marina Dodge, Inc. v. Quinn, 2014 Fla. App. LEXIS 1458 (Fla. App. February 5, 2014). Claims Against Dealership Arising from Sale of "Certified" Car Dismissed: Selling CPO vehicles? Read on. A used car buyer received a Certified Quality Inspection Certificate, a generic list of components that were inspected but not the results of the inspection. She experienced numerous problems with the car almost immediately after the purchase. She sued the dealership for wrongfully labeling her car as "certified" and for making false representations about the car s quality. The dealership moved to dismiss the complaint, and the U.S. District Court for the Southern District of California granted the motion. The buyer claimed that the dealership was required by state law to provide her with a completed inspection report indicating all the components inspected. The court found that the complaint failed to allege that the certificate the buyer received did not comply with the statute. The buyer also alleged that the dealership misrepresented its inspection of the car. The court found that the complaint failed to allege the misrepresentations with sufficient particularity. The court also found that the buyer failed to allege actual damages from any of the claimed violations of law. Finally, the court found that the buyer did not sufficiently allege breach of warranty under the Song-Beverly Consumer Warranty Act where the warranty she was provided was a 30-day/1,000-mile warranty, and the problems she alleged that related to usability of the vehicle did not arise until after the warranty period expired. See Zambrano v. CarMax Auto Superstores, LLC, 2014 U.S. Dist. LEXIS 7300 (S.D. Cal. January 21, 2014). Court Refused to Dismiss Buyer's Claims Stemming from Failure to Disclose Prior Short-Term Rental Use of Car: A buyer bought a car without being notified that the car previously had been used as a short-term rental. She filed a class action against the dealership and related companies. The defendants moved to dismiss, and the U.S. District Court for the District of Maryland granted the motion in part and denied it in part. After determining that the dealership, its parent, and its sister companies were not legally capable of conspiring with each other, the court addressed the claims against the dealership and its parent for breach of the implied warranty of merchantability, violations of the Maryland Consumer Protection Act, and violations of the Racketeer Influenced and Corrupt Organizations Act. The court refused to dismiss the breach of implied warranty of merchantability claims, even though it doubted that the buyer could ultimately prove that the car was not merchantable solely because it previously had been used as a rental vehicle. The court also refused to dismiss the CPA claim, finding that the buyer stated a valid claim that she suffered damage because she bought a car that was worth less than what she paid for it because of its prior use. However, the court dismissed the RICO claims without prejudice. See Bailey v. Atlantic Automotive Corp., 2014 U.S. Dist. LEXIS 6096 (D. Md. Jan. 17, 2014). So there s this month s roundup! Stay legal, and we ll see you next month. Tom (thudson@hudco.com) and Nikki (nmunro@hudco.com) are partners in the law firm of Hudson Cook, LLC. Tom has written several books, available at Tom is also the publisher of Spot Delivery, a monthly legal newsletter for auto dealers, and the Editor in Chief of CARLAW, a monthly report of legal developments for the auto finance and leasing industry. Nikki is a contributing author to the F&I Legal Desk Book and frequently writes for Spot Delivery. Spot Delivery, CARLAW and the books are produced by CounselorLibrary.com LLC. For more, visit Copyright CounselorLibrary. com 2014, all rights reserved. Single publication rights only, to the Association. (3/14) HC# GIADA Independent Auto Dealer Mar/Apr

12 MARKETING YOUR DEALERSHIP Technological Zen: Apps to Save Time & Money by Lee Brogden Culberson, Professional Mojo enter, Tempo retrieves any related s and attachments like Word, Excel and PowerPoint files as well as who the meeting is with, some details about them, and where it s located. Sorry, Android peeps this is an ios app only for now. Business Calendar Pro (Android Store): This smooth calendar synchronizes all of your Google calendars, has very nice drag and drop functionality and offers a variety of views. It s color-coded, too, and has robust event features. I've never met a dealer who couldn't use more time: more time to sell, more time to plan, more time to educate, more time to market, more time to do what you do best. No dealer wants to waste valuable time, so making the most of every minute of every day is key. Believe it or not, that mobile device that's probably in your pocket or on your desk right now can save you time, save you money and even make life a little easier. With a little planning and setup time, you can reach a technological zen that helps you grow your business, not waste your time. Manage Your Mailbox (mailboxapp.com): This nifty app gives you the ability to quickly archive and trash your s or put a snooze on them, which removes them from your box until a later time of your choosing. 10 GIADA Independent Auto Dealer Mar/Apr 2014 Then, when you are ready, they appear in your box for disposition. Available for iphone/ipad only. AquaMail (Android Store): Aqua Mail may not give you the zero inbox you are hoping for, but it does have a very nice interface and easily integrates and organizes accounts from all of your sources, including Gmail, Yahoo, Hotmail, FastMail, Apple mail services (@me.com mac.com), GMX, AOL, and more. You can even save attachments to your memory card. Manage Your Calendar Tempo (Tempo.ai): I use Tempo personally and love that it supports a business networker gracefully and efficiently. It seamlessly combines online or telephone meeting info, so instead of displaying just what you Manage Your Tasks Wunderlist (Wunderlist.com): Looking for an elegant solution to your growing to-do lists? Wunderlist might be it. Available for both ios and Androids, Wunderlist allows you to add subtasks, delegate, collaborate and more. It s one of the best to-do apps out there. PocketLists (pocketlistsapp.com): If you have an ios device, and you are a hard-core list organizer, Pocket- List could be for you. It intuitively groups the lists for quick access and includes easy to identify colors and icons to save you time. It s a simpler approach than Wunderlist, but has all of the needed tools. Manage Your Business and Money Mint (Mint.com): If you have resolved to keep more money in your

13 How GIADA is Effectively Serving Members There are some very compelling reasons to belong to the GIADA. Check out a few of the benefits members find most valuable: Year after year, GIADA has successfully negotiated tens of thousands of dollars in discounts that only GIADA members can take advantage of. The most popular discounts are at the auctions. We have negotiated over $25,000 in buy/sell fees with over 40 auctions. And over $19,000 in discounts with dozens of other companies selling products and services to dealers. Members receive up to a 12% discount for their garage liability insurance through Auto Owners Insurance Company. Continuous and unlimited legal updates and critical bulletin services sent via so members stay informed and educated while avoiding expensive fines and penalties. GIADA offers members a 30% discount on business forms that dealers use regularly, such as buyers guides and finance contracts. Included in membership, dealers automatically become National Independent Automobile Dealers Association members. NIADA Certified Pre-Owned Program (CPO) is an exclusive, member only program. GIADA has developed solid relationships with key government entities that are involved with the car business in one way or another. Since July 1st, 2007, after the Anti-Curbstoning Laws went into effect, GIADA has been proactive and engaged in the training of the law enforcement community. MARKETING YOUR DEALERSHIP Yes, that mobile device or tablet really can do more than take photos, call your clients and weigh down paper... Go ahead, reach your technological zen! pocket, or at least figure out where it goes, Mint is a good choice. It shows how much you are spending in each category of your budget by monitoring all of your transactions. If you set up the notifications, you ll get alerted to low balances and other needed info. If you are a small business, Mint can function as a mini finance department. It s free and available for both Android and ios. Toshl (Toshl.com): It may have an unfortunate name (branding anyone?), but the Toshl Finance app is particularly good if you are a heavy traveler. This app makes it ridiculously easy to enter expenses on the go and even has some goofy visualizations to make you smile while you are on that cab ride. It s available for both ios and Android. Trello (Trello.com): With Trello, you can tell at a glance what's being worked on, who's working on what and what the progress is. It's available for all mobile devices and you can add people to tasks, track the progress of company tasks and attach files from Dropbox, Hightail or Google Drive. You can collaborate in real time and invite as many people as you want to a board. You can also attach business data, files and more in the business class version, which has a monthly fee. If you are out of the office a lot or truly manage your business on the go, this is a great resource. Silent Text (silentcircle.com): The name sounds a little ominous, but have you ever wished you could recall a text message you ve sent? With this subscription-based secure text messaging service, you can issue a burn notice and self-destruct any message, file, video, photo or voice recording. Nice! In essence, with data and business security concerns on everyone s minds, securely communicating with your team, securely transferring files and media, and keeping track of the communication should be paramount. The subscription costs for this interesting app could be worth the peace of mind. It s available for both ios and Android devices. Yes, that mobile device or tablet really can do more than take photos, call your clients and weigh down paper. With a few well-developed apps, you can manage time, money and more directly from those amazing devices. Go ahead, reach your technological zen! Lee Brogden Culberson is a partner at Professional Mojo LLC. Their team believes your automobile business deserves to get the most out of its inbound marketing, which could include nurture marketing, search engine marketing, search optimization, website enhancements, content marketing, social media marketing, print marketing, video marketing, pod casting and more. Professional Mojo specializes in a Mojo Methodology that minimizes your risk, maximizes your results and creates a positive, sustainable online presence. Contact Lee at Professional Mojo for more details to enhance your company s online and offline image. Lee@professionalmojo.com or ring her at (866) GIADA Independent Auto Dealer Mar/Apr

14 FEATURE RECONDITIONING ADVICE 5 Pointers to Improve Your Used Vehicle Reconditioning Processes by Dale Pollack, Best-Selling Author on Used Car Sales You ll get a range of responses when you ask dealers how much time it takes to recondition used vehicles. The best-performing dealers these days consistently get the job done in 24 hours or less. Meanwhile, other dealers report their reconditioning turnaround times run seven days or more. The disparity is owed to two chief factors the degree to which the dealer recognizes that time spent in reconditioning translates to front-end profit potential, and the extent to which a dealer implements and monitors processes that reflect the time is money reality of retailing used vehicles. The following are five best practices I ve gleaned from dealers who have transformed their reconditioning processes to minimize delays and maximize the profitability potential of every used vehicle: 1 Steer clear of problem cars at acquisition. This seems an obvious point, but some dealers and their buyers lose their acquisition discipline when they re desperate to fill gaps in their used vehicle inventories. The result: They look past (or don t check) AutoCheck, CARFAX and other condition reports, bringing home vehicles that require significant reconditioning work. The dynamic amounts to throwing good money after bad as they pony up for costly repairs that could have been avoided. 2 Determine each car s exit strategy right away. This best practice goes hand-in-hand with the one noted above that is, dealers should not be acquiring vehicles at auctions that lack the condition or market appeal (e.g., Market Days Supply) that indicate positive potential as retail units. Of course, trade-ins are a trickier prospect, especially if the dealership stepped up to acquire a unit and complete a retail deal. In these instances, dealers and their managers should collectively and quickly determine if a unit has retail potential. A best practice: Gather the appraisers and decision-makers once a day to review trade-ins and make the retail/wholesale determination. 12 GIADA Independent Auto Dealer Jan/Feb 2014

15 FEATURE RECONDITIONING ADVICE 3 Establish an auto approval for reconditioning work. This best practice helps minimize delays caused when a used vehicle manager cannot (or doesn t) approve reconditioning work in a timely manner. Dealers who use this approach set up a baseline cost for reconditioning ($600 to $800 per car is common) and allow the service department to complete the work when estimates fall below the threshold. Some dealers resist this best practice out of a fear that their service department will stitch up the repair order to the maximum amount on every car. That hasn t been a problem at our dealership, but we monitor whether estimates match up with the final cost, a Northeast dealer says. At dealerships where buyers consistently check vehicle condition reports before purchasing a vehicle, about 10 percent of the incoming cars will require a manager s OK because estimates exceed the baseline. In those cases, dealers use or text alerts to managers and expect a yea-or-nay decision in less than two hours. 4 Make reconditioning speed a priority. For some dealers, this means giving up on the tug-ofwar with service directors and managers, who often regard customer pay work as a higher priority. In these stores, dealers will create a separate team (often a manager/writer, with up to five technicians, depending on volume) who focus solely on fast, yet thorough, reconditioning work. The manager s compensation package typically emphasizes the need for efficiency and speed, with bonuses tied to meeting the store s 24- to 72-hour reconditioning benchmark. Other stores give the responsibility for managing reconditioning to the used vehicle manager. The manager then works collaboratively with his/ her counterparts in service to craft and execute the processes that enable the dealership to recondition vehicles in an efficient and timely manner. 5 Look for ways to lower costs. Beyond profit-minded decisions that guide the scope of reconditioning work on individual vehicles, a growing number of dealers are examining their internal labor and parts costs to ease pressure on their front-end profit margins. These efforts often result in decisions to charge less-than-retail rates for labor, use lower-cost, non-oem parts (e.g., brake pads, tires, wiper blades, etc.) and tighten their oversight of outside vendors who handle small dent/body, upholstery and window repairs. These five best practices are solid steps dealers can take to help speed up the time it takes to get their vehicles to the front line. However, dealers should also recognize that, in today s market, there are really two front lines the physical and the virtual. The speed required to get vehicles to the physical front line should be measured in hours, and the virtual front line in minutes. Some dealers wait until reconditioning is complete before they address the description, photos, pricing and other elements each unit requires to stand tall on the virtual front line. This is an operational no-no in today s time-is-money environment. In addition to being a best-selling author on Used Car Sales in his book Velocity, Dale Pollak is the chairman and founder of vauto, Inc., a company that provides retail automotive dealerships with a better way to appraise, manage and price their pre-owned vehicle inventory. In addition to serving as vauto s spokesperson, Dale is responsible for strategic planning and development. GIADA Independent Auto Dealer Mar/Apr

16 SALES MANAGEMENT 4 Tips to Improve the Trade-In Experience Courtesy of Auto Remarketing Because hammering out an agreeable trade-in value creates negative feelings for potential buyers, AutoTrader.com offered four tips to help dealers ease the pain of the trade-in and increase customer satisfaction. Site officials wanted to create a strategy for stores because they contend satisfaction with the vehicle-buying process decreases significantly once consumers make the transition from online shopping to in-store purchasing. AutoTrader said negotiating the value for the trade-in is the activity with which purchasers are least satisfied. In fact, only 37 percent of consumers reported being satisfied with that step, according to research from the site. However, a tool like AutoTrader.com s Trade-In Marketplace can serve as a bridge between the online and offline aspects of the shopping experience, thereby helping dealers increase customer satisfaction notably. Car shoppers have access to more online resources than ever before, and they are using them to choose their buying and trade-in opportunities carefully, said Juan Flores, director of operations for Auto- Trader.com s Trade- In Marketplace. By addressing the most painful part of the transaction negotiating the trade-in dealers can increase customer satisfaction significantly, and they can also stand out from their competition. It s a win-win if they implement and merchandise the tool in the right way, Flores continued. The Trade-In Marketplace, accessible via AutoTrader.com, KBB.com from Kelley Blue Book, participating dealer websites and in select physical dealerships, can enable consumers to get an instant offer on their used vehicles, sight unseen. The offers are based on an extensive set of parameters, including VIN-specific information, details surrounding the condition of the unit and the impact of the specific vehicle s history and after-market equipment. The result is that consumers receive an offer on their vehicles that represents an amount that a dealer would be willing to pay for their vehicle immediately. Because Flores pointed out that it s important to implement online and offline strategies when using a tool like the Trade-In Marketplace, he offered the following tips for dealers using the Trade- In Marketplace: 1. Showcase Your Trade-In Process Online Prominently signal on your website and other marketing platforms that you have an online appraisal tool that will enable shoppers to get an instant cash offer on their vehicle. You can leverage the brand equity of AutoTrader.com and capture the attention of shoppers online. 14 GIADA Independent Auto Dealer Mar/Apr 2014

17 SALES MANAGEMENT 2. Reduce the Pressure Let the customer know that you are very interested in the vehicle, regardless of whether he/she wants to trade in the vehicle or simply sell it to the dealer. 3. Let the Customer Take the Lead If they haven t generated a Trade- In Marketplace offer by the time they walk in, take the customer to the Trade- In Marketplace kiosk or a workstation and allow them to answer the vehicle condition questions themselves. 4. Involve the Customer in the Walk Around Don t leave the customer sitting alone while you validate the condition of their vehicle. Invite them to do the walk around with you, and talk with them about the factors that affect the value of their vehicle, both positive and negative. By addressing the most painful part of the transaction... dealers can increase customer satisfaction and they can also stand out from their competition... Enabling consumers to be more involved in the trade-in process has proven to be a winning strategy that helps dealers increase customer satisfaction and stand out from the crowd, Flores said. Enhancing in-store processes is not always easy, but best-in-class dealers take that challenge head on and use it to separate themselves from the competition, he went on to say. According to a survey of more than 12,000 Trade-In Marketplace users, two out of three of those who redeemed their offers thought the tool was valuable in helping them negotiate with dealers and improved their interactions at the dealership. As a result, 77 percent of those surveyed were willing to recommend Trade-In Marketplace to others and to use it again in the future. Auto Remarketing News Magazine, a news media of the pre-owned industry, is a leading publication for the usedcar and remarketing industry bringing readers recent and relevant news. Visit autoremarketing.com for more information or to subscribe. We want to be your Sub-Prime Retail Lender! Floorplan Company! Featuring: Easy Self Approval Strong Retail Advances Quick and Reliable Funding All Retail Advances are Non-Recourse floorplansales@autouse.com Featuring: 100% Auction Advance 120 Day Extendable Term Lien Payoff Programs Checkbook Program for Non-Auction Purchases On-line Auction Purchases GIADA Independent Auto Dealer Mar/Apr

18 ON THE GEORGIA FRONT GIADA Breaks Record with Over 800 Members in Attendance at Marietta CE Class (Back row: left to right) Dennis Pope, Julie Colgate, (Front row: left to right) Billy and Kim New. Another huge class in March included over 800 members with 57 new dealers signing up. Thanks for all you do loyal GIADA volunteers! ADVERTISER INDEX 41 A.R.A. GPS Systems 35 Adesa Atlanta 17 Auction AutoStar Solutions 15 AutoUse 22 Charleston Auto Auction 25 Dealer Funding BC Frazer Computing, Inc. 24 Georgia Insurance Associates 56 Spireon s GoldStar 23 Hamilton State Bank 48 Insurance Auto Auction IBC Manheim 47 NABD 54 NABD 40 NIADA (Certified Program) 59 Oakwood s Arrow Auto Auction 39 Peoples Financial 5 Preferred Warranties, Inc. 33 Rawls Auto Auction 21 Reeves Insurance Agency 38 Ron Widener & Associates 25 Select Automotive Management 29 Simmons Nameplate 28 Spot Delivery 20 Sterling Credit Corporation 43 TitleTec 37 United Acceptance 58 Used Cars.com by Dealix IFC Wayne Reaves From all over the state of Georgia, independent automobile dealers gathered in Marietta for the February continuing education course. Over 720 dealers were present for this informative event. TO ADVERTISE WITH US IN PRINT SEE PAGE 37 AND VISIT US ONLINE 16 GIADA Independent Auto Dealer Mar/Apr 2014

19 Dealers are also getting more aggressive with mobile strategies, pushing ads and incentives on mobile devices to target in-market shoppers. Consumers Still Browsing Dealer Sites Despite Sales Dips by Dave Winslow, Chief Digital Strategist at Dealer.com After a record-breaking 2013, auto sales started weaker this year, with many analysts attributing the slow start to the unusually cold and snowy winter, keeping customers from frequenting dealer showrooms. While it may have had some impact on sales, the good news is that traffic to dealer websites remains strong. It was just the mid-1990s when weather could monumentally alter sales figures. Today, however, habits have dramatically changed, and shoppers get to the point-of-purchase by researching online. The industry s aggressive focus to drive website traffic through increased digital advertising is certainly keeping the page views flowing we saw a 25% increase in dealership traffic on President s Day and a 65% increase in dealer ad spend during this holiday period across the Dealer.com network. Dealers are also getting more aggressive with mobile strategies, pushing advertisements and incentives on mobile devices to target in-market shoppers. As warmer weather approaches, mobile advertising spend will remain a strong trigger point for dealers as it has the potential to compel consumers to action and change buying behavior quickly. INDUSTRY EVENTS CALENDAR April 14 Automobile Dealer Pre-License Seminar Lithia Springs, GA April BHPH World Convention Las Vegas, Nevada April 26 Automobile Dealer Pre-License Seminar Marietta, GA May 5 Automobile Dealer Pre-License Seminar Lithia Springs, GA May 6-8 Digital Dealer Conference & Exposition Atlantic City Convention Center Atlantic City, New Jersey May 12 Automobile Dealer Pre-License Seminar Lithia Springs, GA May NABD Conference The Wynn, Las Vegas, NV May 24 Automobile Dealer Pre-License Seminar Marietta, GA June NIADA National Convention & Expo Caesar s Palace, Las Vegas, NV July GIADA State Convention Savannah, Georgia Hyatt Regency GIADA Independent Auto Dealer Mar/Apr

20 FEATURE REGULATORY COMPLIANCE 10 Regulatory Hot Spots by George Angus, F&I and Showroom There s no doubt compliance will once again be a big topic in 2014, especially with the Federal Trade Commission, attorneys general, motor vehicle departments and state insurance commissioners targeting dealers at an unprecedented level. There s also the indirect effect of the Consumer Financial Protection Bureau (CFPB). It doesn t have authority over most dealers, but its regulatory activities can still impact how dealers operate. Keep in mind that the Dodd-Frank Wall Street Reform and Consumer Protection Act did more than create the CFPB. It also gave the FTC enforcement authority over the auto dealer business, as well as new rule making powers. So what s a dealer to do? Well, one thing my firm does to assist our clients is monitor media outlets to see which areas regulators are focused on. It s something your store should do as well. Well, from what we ve seen and read, many of the legal actions taken against dealers in 2013 could have been prevented by the F&I department. So, to help steer your compliance efforts in the right direction, we ve identified 10 regulatory hot spots your operation needs to be keyed in on this year. This list certainly doesn t cover every state and federal regulation governing your business, but it will point out areas targeted by regulators. This list, by the way, should not be taken as legal advice, so please address all legal questions to your attorney. 18 GIADA Independent Auto Dealer Mar/Apr 2014