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MARCH/APRIL 2012

inside• GOING GREEN: AUTO RECYCLING IS BOOMING• FORM 8300 QUIZ• COMPLIANCE OVERDRIVE

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

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M I S S I S S I P P I I N D E P E N D E N T A U T O D E A L E R S A S S O C I A T I O N

SPARK PLUG

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

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

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MARCH/APRIL 2012 T H E S P A R K P L U G

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

M I A DA & B r y s o n D e a l e r P r o g r a m s

A n n o u n c e P r e f e r r e d P r o v i d e r P r o g r a m

Cliff Little, CICVP - Transportation / Dealer Programs

301 Newpointe DriveRidgeland, MS 39157PH: 800-530-7055Cell: 601-896-8834FX: 601-707-2070

INTRODUCTION

Over the last 20 years, I have provided insurance counsel and financial planning to hundreds of companies, both large and small, throughout the Southeast US.

I earned my BS degree from Mississippi State University and am a designated Certified Insurance Counselor by the Society of Certified Insurance Counselors.

Throughout the years, I have gained the knowledge and experience needed to advise my clients on their asset protection needs.

ACHIEVEMENTS

• Received several industry awards for demonstrating excellent proficiency in all lines of insurance and for proven success in superior customer retention

• Active participant in multiple Insurance Industry Loss Control and Employee benefit management seminars

• Appointed and currently serve on several industry and boards and advisory councils

PRODUCTS AND SERVICES

Bryson Services • Work Comp Exp Mod Audits • Coverage Analysis • OSHA Compliance Inspections • Claim Consulting • HR Practices Consulting

Bryson Commercial Lines• Property / Casualty • Workers Compensation• General Liability• Professional Liability• Pollution Liability• Commercial Auto• Bonding • Directors & Officers / EPLI

Bryson Employee Benefits• Group Plans• Retirement Plans (401 K)• Dental Plans• Occ / Acc Plans• Disability Plans• Keyman Life Plans• Estate Plans• Business Life• Individual Plans

Left to right: Jimmy Boling, president; Fred Robinson, insurance chairman; Cliff Little, Bryson Insurance; Lester Howell, chairman of the board.

“CLIFF LITTLE FROM BRYSON INSURANCE SAVED ME 35 PERCENT ON MY TOTAL INSURANCE PREMIUMS.” – FRED ROBINSON

JANUARY CLASS GRADUATES Blackwell, Reggie Blackwell Truck & Auto Sales Mize MSBlake Jr, Chester B & S Auro Sales Greenville MSBoatner Jr., Charles L Samples Auto Sales Belden MSBouie, Jeremey CJC Auto Sales Jackson MSBrown, Charles Horn Lake MSByrd, Tommy Anthony Byrds Auto Sales Natchez MSCarter, Dusty Dusty’s Trade Lot Walnut MSDickerson, Crissy S & K Auto Tupelo MSEvans, Christopher Evans Auto Sales Southaven MSFales, Barbara Sue Simon Auto Biloxi MSHawthorne, Lonzo Hawthorne Motors Hattiesburg MSHayes, Ellen Aaron Williams Auto Sales Waynesboro MSHerrington, Glen Advantage Pre-Owned Auto Sales Jackson MSHoang, Phuong Import Kingz Used Auto Ocean Springs MSJackson, Percey Mobile Kare Auto Sales Gaucier MSJohnson, Jon-David Canton Automotive Recylcers, LLC Madison MSKuntz, Jeffrey A Emergency Equipment Professionals Olive Branch MSLongrear, Zach Southern Auto Imports Madison MSLudwig, John Marine & Equipment Salvage Ocean Springs MSMaddox, Michelle Cars Around the Corner Hattiesburg MSMathis, Donnie B&R Auto Sales Meridian MSMatthews, Dustin Moss Point MSMcAuliffe, Jason Gordon Clearvision Leasing LLC Charlotte NCMcQueen, Billy City Motor Company Jackson MSMiller, Cherise P Singleton’s Used Auto Ridgeland MSMonsivais, Juan Laurel MSNguyen, Tommy Import Kingz Used Auto Ocean Springs MSPeterson, Hugh D. D & D Auto Sales Florence MSPosey, Don Mendehall MSRoberts, Earnestine B&R Auto Sales Meridian MSSandifer, Joel H Hollandale Auto Sales Hollandale MSSheffield, Gene A. S & K Auto Tupelo MSSmith Jr, Maurice L Carriere MSSpain, Charles Greenwood MSSpencer, Barbara Freedom Autoplex Florence MSWhitney, Aaron Bay St Louis MSWilliams, Andy Douglas Inc. Jackson MSWilson, Charles Raymond MS

DECEMBER CLASS GRADUATES Alford, Johnny J & S Auto Meridian MSAustin, Frank L. The Car Lot McComb MSBlair, Charlie Bennett Grenada MSBracey, Jacob Bay Creek Enterprises Lumberton MSDahmen, Carolina Maus Auto Gulfport MSDean Jr., James Tunica Motors Tunica MSHarris, Lenard L. Green T Auto Hernando MSHawks, Stacy Hawks Automotive Vardaman MSHoeflich, Shelia Car City Lucedale MSJennings, Paul Diversified Auto Sales LLC Clinton MSJimenev, Fatima Maus Auto Gulfport MSLindley, Kurt Kurt’s Used Cars Charleston MSMascagni III, Henry J. Rol Rap Cleveland MSRichardson, Jerry Madison MSSimon, Duane E. Simon Auto Biloxi MSSmith, Benard Ben’s Auto Isola MSSwan, Judy Corinth MSSwan, Sean Corinth MSTacker, Chris Green T Auto Hernando MSTrotter, Walter The W.E. Trotter Co LLC Grenada MSWarner, Marlon Jackson MSGahagan, Clarissa Denae Catmando Auto Sales Pass Christian MSCash, James Richard Cash Auto Sales Dumas MSVincent, Todd Auto Finance Madison MSHawks, Melanie Hawks Automotive Vadaman MSGarrison, Bobby Gene Bob’s Auto Sales Baldwyn MS

CONGRATULATIONS TO THOSE THAT HAVE ATTENDED AND COMPLETED OUR PRE-LICENSING SEMINAR THAT IS REQUIRED BY THE DEPARTMENT OF REVENUE.

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T H E S P A R K P L U G MARCH/APRIL 2012

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INSIDE

BOARD OF DIRECTORS

MAGAZINECONTENTS

ADVERTISERSINDEX

06 Is Technology Costing You?08 Going Green: Auto Recycling14 Compliance Overdrive

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] SPARK PLUG IS PUBLISHED BI-MONTHLY BY THE NATIONAL INDPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORATION, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203; PHONE (817) 640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT ADDITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF THE SPARK PLUG, THE MISSISSIPPI INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION, OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEMBERS OF NIADA, DOES NOT CONSTITUTE AN ENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT 2011 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED.STATE MAGAZINE MGR./SALES Troy Graff • [email protected] Andy Friedlander • [email protected]/PRODUCTION MGR. Christy Haynes • [email protected] Nieman Printing

MIADAOFFICE1705 OLD WHITFIELD ROAD, SUITE APEARL, MS 39208PHONE: 601-939-9866 Email: [email protected] Site: www.mississippiiada.com

ADESA ....................................................................5AutoTrader.com ..................................... Back CoverBerkshire Risk ......................................................13LA’s 1st Choice Auto Auction ....... Inside Front CoverManheim.com .......................................................9Protective ...............................................................7Smart Auction ............................. Inside Back CoverUnited Acceptance ...............................................11West Insurance ....................................................10

Chairman of the BoardLester R. Howell301 Clinton BlvdClinton, MS 39056601-924-3718

PresidentJimmy BolingP.O. Box 1271Grenada, MS 38901662-227-5637

Vice President Aaron Williams1428 Mississippi Dr.Waynesboro, MS 39367601-735-3916

SecretarySteven Watkins 5660 I-55 South Byram, MS 39272601-923-8600

TreasurerMadalene Daniell1500 Broadway Dr.Hattiesburg, MS 39402601-264-2210

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

R Certified Master Dealer ProgramMarch 22-24, 2012Educates dealers on how to manage and grow a profitable business “Effective Management Practices”, “Business Planning”, “Human Resources”, “Merchandising”. “Financial Management” Call (800)756-4232 to sign up.

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

MIADA wants to give special thanks to John and Paula Tharp of Insurance Auto Auctions for sponsoring the December district meeting. The gift bags and meal were greatly appreciated!

THANK YOU!

Standing (left to right): Aaron Williams, MIADA vice president, Lester Howell, MIADA chairman of the board; Jimmy Boling, MIADA president; Jerry Daniels of Jerry Daniels Cars & Trucks; Bryan Morris of Long Beach Auto Auction; MC Morris of LBAA; Chuck Ryan of Chuck Ryan Cars; Ronnie Daniels of Daniels Used Cars; John Eaton of LBAA; Mario Feola of Corvettes LLC; Jeff Bryan of LBAA; and Jerry Cuevas of Mikes Automotive. Front: Ann Howell (left) and Diane Boling.

MIADA WANTS TO GIVE A SPECIAL THANKS TO LONG BEACH AUTO AUCTION FOR SPONSORING OUR JANUARY 2012 DISTRICT MEETING.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Which one are you?

BY BRENT CARMICHAELEXECUTIVE CONFERENCE MODERATORNCM ASSOCIATES [email protected]

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

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IndustryNews

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As we come into the second month of the 2012, how are your business New Year’s resolutions evolving? I’m sure on the

list there are goals to increase profitability and growth, and to improve customer service.

What about going green and saving you and your customers money at the same time?

The auto recycling business is booming and helping its customers do just that. There are about 8,400 auto recycling businesses in the United States generating about $23 billion each year.

Auto recycling is the practice of removing and reusing automotive parts from inoperable vehicles, then safely disposing of the portions of the car that cannot be salvaged. It is performed at auto salvage yards, also called auto recyclers. Auto recycling prevents the waste of usable parts and materials, and promotes environmental conservation by reusing vehicle components instead of disposing of them in a landfill.

There is no product recycled more than the automobile. More than 10 million vehicles reach the end of their lives each year, which equates to acres and acres of landfill space.

The auto recycling industry saves that space – 95 percent of vehicles retired from use are recycled. The process saves an estimated 85 million barrels of oil per year, which would have been used to make replacement parts. About 84 percent of each vehicle is recycled in one way or another. Some 40 percent of the ferrous metal for scrap processing comes from auto recycling. Oils and fluids recycled by the auto recycling industry are equivalent to eight Exxon Valdez oil disasters every year.

“One of the meanings of recycle is to reuse,” said Jason Hilsman, owner of Ace Auto Recyclers in Iowa City, Iowa. “Reusing auto parts helps the environment by saving on the energy and waste produced in making new parts. And, of course, the price is cheaper.”

On average, purchasing a green, recycled part from a recycling yard will save 50 to 75 percent of the original equipment

manufactured price. Because buying used parts from an auto recycler is cheaper than buying them new, repair shops can not only lower the cost of a repair for customers, but can also lower insurance rates if the repair is an insurance claim.

Auto salvage yards also commonly offer recycling of older vehicles for scrap. The yards recycle batteries, tires, fluids and thousands of tons of metal a year. And auto recyclers provide owners of rare, out-of-production vehicles a chance to obtain hard-to-find replacement parts.

Recycled vehicles go through a thorough tear-down and inspection process on delivery to the recycler to ensure the highest quality parts for resale. When a vehicle comes into the recycler, it receives a stock number for tracking, and the VIN is checked to make sure it matches the title. Pictures are taken of all angles of the vehicle and the VIN number, allowing the auto recycler’s customers to see a part before it is delivered and be knowledgeable on the part’s condition prior to a sale.

The vehicle is then inventoried. All parts are checked, including checking whether the car starts, runs and drives, and a check of allpart of the transmission. If the auto recycler decides no parts have any value, fluids are drained and tires, battery and catalytic converter are removed to prepare the car for scrap and crushing.

If the auto recycler will keep the car for its inventory, the catalytic converter and battery are removed and the vehicle is placed in the yard. The fluids are not drained until the car is dismantled. Then the fluids are drained and the usable parts are ready to sell.

In 2008, a group of auto recycling businesses from across Iowa banded together to improve the purchase process and quality of recycled parts.

“When we started the group, the idea was to get 20 of the most progressive auto recyclers in the state to sell a better product by improving the quality of the part, description of the part, the delivery time for less down time for the

repair shop, and to open communication to all repair shops,” said Mike Swift, president of QRP Central and owner of Trails End Auto & Truck in Des Moines.

QRP Central is a group of 18 family-owned professional automotive recyclers that function as trading partners to provide customers with quality recycled used auto parts. The group is committed to the highest quality of recycled and new aftermarket auto parts, delivered on time as described, usually within 24-48 hours.

The combined inventory of the 18 independent auto recyclers is massive: more than 11,000 vehicles purchased annually, more than 1 million parts in computerized inventories and nearly 26,000 parts vehicles stored on site. In addition, yard management technology has advanced to give auto recyclers access to more parts from around the nation.

QRP holds its parts inspection process to a higher standard. One of the first things it decided as a group was to make sure there are no surprises. Every step is taken to make sure a part is good. If it is not a good part but is still usable with repair, the recycler makes sure the customer knows and can make an informed decision.

All parts that leave QRP auto recyclers go through a three-point inspection process. They are inspected first by the salesperson, then the parts puller, then the delivery driver. If a part is shipped, the last person to check the part is the shipping department.

Another important aspect for QRP customers is that the businesses are locally owned.

“When a repair facility purchases a green recycled part from QRP Central, it is not only saving the environment but helping keep jobs and revenue in the city, county and state,” Swift said.

For more information on using recycled auto parts for your business, visit www.qrpcentral.net.

GOING GREEN

AUTO RECYCLING IS BOOMING

BY QRP CENTRAL

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AUTO RECYCLING IS BOOMING

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DealerTrack announced it has introduced SmartFind, an online inventory search and comparison tool tied to actual dealer inventory.

The new web service allows dealers to dynamically limit online vehicle selections on their web sites to inventoried vehicles using proprietary “best match” search algo-rithms to return a ranked list of available vehicles in inventory based on a consumer’s specific search parameters. The service then allows consumers to perform comparisons of actual vehicles in inventory.

“In today’s market, consumers expect to perform more of the vehicle transaction pro-cess online than ever before,” DealerTrack Data Services general manager Amit Mahesh-wari said. “However, traditional inventory searches have been a stumbling point because they don’t link directly to current inventory at a particular dealership. The SmartFind solution will integrate fully with the dealer’s existing online vehicle and inventory work-flows to deliver timely and more accurate vehicle availability information and the ability to compare inventoried vehicles.”

NEW SMARTFIND TOOL TIES SEARCHES TO DEALER’S INVENTORY

MIADA’s next district meeting will be held in March. All dealers who attend will enjoy a great evening meal, and MIADA will discuss updates on legislation and regulatory changes and illegal activities in the state affecting local dealers. Please call our home office at (601) 939-9866 for the location and time of the next meeting.

Next District Meeting

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As the instructor of the Mississippi Dealer Education offered monthly through MIADA, my goal is to help you continue to be a successful pre-owned dealer. I will be giving you the opportunity to test your dealer skills with a quiz in each Spark Plug Magazine. This month the quiz is on the 8300 Form. Answer the questions below and then score yourself by referring to the answers below.1.) The 8300 is an IRS report that I must complete if a customer pays over $10,000 for a car in any combination of cash or a cash equivalent including cashiers check, bank draft, travelers checks, money orders or bank checks. _____ YES _____ NO 2.) My dealership is required to have a policy in place to trace these transactions._____ YES _____ NO3.) If a customer purchases one car for $5000 in cash and comes back within 24 hours and buys a second unit for $5800 with a bank check, the dealership must complete Form 8300. _____ YES _____ NO4.) The form can be found and completed on line. _____ YES _____ NO5.) If a customer is traveling from out of state to buy a $15,000 car and you request a bank check instead of his personal check, you must do an 8300 Form. _____ YES _____ NO6.) A personal check and a bank check to cover loan proceeds are not considered cash, therefore no 8300 Form is required. _____ YES _____ NO7.) The IRS has auditors to verify your compliance to this regulation. _____ YES _____ NO8.) Form 8300 will require the customer’s social security number and occupation._____ YES _____ NO9.) The customer must be notified that Form 8300 was filed by letter year end._____ YES _____ NO10.) Publication 1544 from IRS will give me more information about Form 8300._____ YES _____ NO11.) I am aware that the criminal and civil penalties are $25,000 or the amount you received and were required to report up to $100,000. _____ YES _____ NO

Answers All 11 questions should have been answered “Yes”. If you got 100% correct, you are probably compliant. If you or your office manager answered “No” or have additional questions, I look forward to seeing you at the next Dealer Education seminar available. The registration form for the class is located on page 12.Aimee Pruitt

AIMEE’S DEALER QUIZ

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Full Name_______________________________________________________________

Address________________________________________________________________

City___________________________State__________________Zip________________

Phone______________________________Fax_________________________________

Email __________________________________________________________________

Business Name__________________________________________________________

Address________________________________________________________________

City___________________________State__________________Zip________________

Phone______________________________Fax_________________________________

Email __________________________________________________________________

Payment Method

___Check Enclosed ___Money Order ___VISA ___MC ___DISC ___AMEX

Account #________________________________________________________ Exp________________

Account Name____________________________________________________ Zip_______________

Registration Fee $_________________ + C/C Proc. Fee $ 3.50 = Transaction Total $___________________

Signature of Authorization______________________________________________________________________

Mississippi’s Used Auto Dealer Pre-licensing SeminarRequired by theDepartment of Revenue

Seminar Location:MIADA Home Office1705-A Old Whitfield RoadPearl, MS 39208Office: (601) 939-9866 Fax: (601) 939-9882

Seminar dates are as follows:q March 24, 2012/ 8a.m.-5p.m. q April 21, 2012/ 8a.m.-5p.m.q May 19, 2012/ 8a.m.-5p.m. q June 16, 2012/ 8a.m.-5p.m.

Registration Fee - $175.00 Please submit registration with payment to MIADA at least seven days prior to the date of the seminar you plan to attend. Your seat will be reserved and certificates will be presented at the end of the seminar.Dealer Resource Manual - $75.00Late Registration Fee - $25.00 Late registrations are accepted the week before class and walk-ins are accepted on the morning of class. However, the late fee is applied to the original registration fee and certificates for walk-ins will be mailed out the following week. *On the day of the seminar, No checks will be accepted.*Transfer Fee - $50.00 If you wish to transfer your registration to another scheduled seminar date, a 72 hour notice is required and a transfer fee is applied.Cancellations - $50.00 All cancelations are to be made 72 hours in advance in order to receive a refund, minus the cancellation fee.*Please Note* Due to limited and reserved seating, we can not allow sit-ins. Also, if you have any disabilities that require you to bring an assistant, please let MIADA know at the time of registration so we can reserve adequate seating.

Aimee Smith Pruitt is MIADA’s Pre-licensing education specialist. With more than five years experience in pre-owned dealership management and more than four years in education development and instruction for MIADA, she is our greatest asset. She has made major contributions to the curriculum that was first offered in July 2007. Education class participants continually rate this class as superior.

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As our inventory profit margins get smaller (and we all can tell you why), our expenses must also decrease. After all, we cannot spend

more than we make or we will be out of business, despite what is said in Washington D.C.

So where do we cut expenses?Before you consider dropping your MIADA

membership, consider what non-compliance in an ever-growing government regulatory environment will cost you.

On Monday I received a call from an auto auction. That had been contacted by the IRS for an 8300 audit within the next 30 days. The auction knows it is compliant, but while the effort to prepare has begun, the business must still be run.

Are you compliant? Are policies and procedures in place for a quick response? Bypassing federal regulatory compliance or poor recordkeeping could cost you thousands in fines by the IRS.

On Tuesday, a new dealer’s office manager called with many questions about online auctions, purchasing or selling in state vs. out of state, sales tax percentages and title transfers.

We know the Mississippi Bureau of Revenue tax regulations, but are we sure we are compliant? Are policies and procedures in place for submissions and retention of completed paperwork? Who do you call with these questions?

You call MIADA.Today, I opened an email from Equifax for another

compliance review. The request began with the following: “We are committed to providing the highest level of quality and integrity in the industry. Accordingly, we perform compliance reviews on our customers as part of our procedures to comply with credit reporting laws, including the Fair Credit Reporting Act, 15 U.S.C. §1681, et seq. Our records indicate that on the dates listed you accessed credit file information on the consumers appearing below…”

So I will now pull my web site manager away from marketing our business and we will find the signed credit applications of five customers from December. Again, we are compliant, but our business of marketing inventory must stop while we meet the regulations on our industry.

Are the “risk-based pricing” additions of the Dodd-Frank bill complete as well? Are policies and procedures in place for a quick response?

Finally, I opened an email from our National Independent Auto Dealers Association with the headline, “Mac Murray, Petersen & Shuster named NIADA’s New Legislative Counsel.” This firm will serve as our legislative/regulatory/compliance counsel. NIADA chief executive officer Mike Linn explained this firm “will round out our strategy to work more closely with key federal regulatory agencies, staying ahead of rapidly expanding agencies like the CFPB (Consumer Finance Protection Bureau).”

One member of the firm, former Ohio Attorney General Betty Montgomery, said, “Dealers and

business leaders are still watching how the CFPB, attorneys general and the FTC will work together under new guidelines and how they will affect their businesses in an age of expanding government. Our team is well versed in working with regulators across agency lines to protect the interests of small businesses and we are honored to work with the NIADA more closely to bridge the gap between auto dealers and federal regulators.”

NIADA knows what its 18,000 member dealers nationwide will need to stay compliant and focused on their ability to make money rather than spend it on compliance and new government regulations. What we need is help and that is what both associations offer.

As Mississippi dealers, we need to focus on what we do best – buy and sell cars. We need to hire someone to specialize in teaching us compliance with current regulations and fight to protect us from more regulation.

With your membership in MIADA, which includes NIADA membership as well, you are hiring the best to do the part we like least – teaching us to stay compliant and protecting us from more regulation in the future.

Madalene Daniell Daniell Motors VPMIADA board treasurer

WHY SHOULD I CONTINUE MY MIADA MEMBERSHIP IN 2012?

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MANY SHERIFFS CREATE REGULATORY UNCERTAINTY

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

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

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

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

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

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

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

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

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

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

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

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

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

ComplianceOverdrive

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

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

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

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

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

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

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

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