oklahoma dealers resource feb 13

DEALERS’ RESOURCEOklahoma Independent Automobile Dealers Association

In This Issue

Visit Us Online At www.e-oiada.com

America,Our Nation -

Long May It Live!

February 2013

• Proposed Buyers Guide Changes• Contact Your Legislators • CFPB Expanding Complaint Network

OIADA, P.O. Box 6905, Moore, OK 73153

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

Change Service Requested

OIADA, P.O. Box 6905, Moore, OK 73153

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FEBRUARY 2013 D E A L E R S ’ R E S O U R C E

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OIADA OFFICE813 NORTHWEST 34TH MOORE, OK 73160EMAIL: [email protected]

ROSE & ODELL MORGAN, Executive DirectorsJACKIE GARNER, Office Manager

AMBER SNOOK, Administrative AssistantJARED MORGAN, Electronics/Software Technician

LYNNA KAY, ProgrammerSTEVE MORGAN, ConsultantMIKE MORGAN,Technical Aide

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]’ Resource is a publication of Automotive Dealers Resource of Oklahoma (ADR) produced on behalf of the Oklahoma Independent Automobile Dealers Association (OIADA), P.O. Box 6905, Moore, OK 73153. The Dealers’ Resource is published monthly by the National Independent Automobile Dealers Association Services Corporation. Periodical postage paid at Arlington, TX, and at additional offices. POSTMASTER: Send address changes to OIADA, P.O. Box 6905, Moore, OK 73153. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of ADR of Oklahoma, the Oklahoma Independent Automobile Dealers Association or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of OIADA or NIADA does not constitute an endorsement of the products or services featured. Copyright © 2013 by O&R Morgan, Inc. dba OIADA. All rights reserved. Dealers’ Resource is a publication of Automotive Dealers Resource of Oklahoma on behalf of the Oklahoma Independent Automobile Dealers Association (OIADA), but is mailed to all dealers in the state in an effort to educate and encourage non-members to join the Association and support our efforts to improve the image and profit potential of the industry. For 55 years, we have worked to represent the independentmotor vehicle dealer in Oklahoma. We need your support.

FRONT COVER BY Mike MorganSTATE MAGAZINE MGR./SALES Troy Graff • [email protected] Andy Friedlander • [email protected] DIRECTOR Christy Haynes • [email protected] Nieman Printing

MAGAZINE CONTENTS

ADVERTISERS INDEX71B Auto Auction ........................................................5 ADESA ..............................................Inside Back CoverAlbright Insurance ..................................................... 7Ally .......................................................................... 21 Chickasha Auto Auction ........................................... 24Dealer’s Auto Auction of OKC .....................Back CoverJordan Insurance Group ............................................ 9Leake Auction Company .......................................... 11Loftis Wetzel Insurance ........................................... 27Manheim.com ..........................................................17Manheim Dallas .............................. Inside Front CoverNEXTGEAR Capital ............................................13, 23Oklahoma Auto Exchange ........................................ 26Protective ................................................................ 15United Acceptance .................................................. 25VAuto ....................................................................... 19

FOR INFORMATION ON HOW TO BECOME A MEMBER OF OIADA PLEASE CONTACT ROSE OR ODELL MORGAN AT 405-232-2947.

PRESIDENTChris GoadRegal Motors3515 N. MayOklahoma City, OK [email protected]

CHAIRMAN OF THE BOARDJohn EasttomAuto Mart of Elk CityP.O. Box 981Elk City, OK [email protected]

VICE PRESIDENTSJohn T. Longacre, IVTaft Motors, Inc.722 S. Linden St.Sapulpa, [email protected] Julian CoddingReliable Motors, Inc.9201 S. ShieldsOklahoma City, [email protected]

Monte ShockleyShockley Auto Sales2605 N. BroadwayPoteau, OK [email protected]

Glenn McDanielI-35 Credit Auto1113 SE 51st St.Oklahoma City, OK [email protected]

David McQuerryMcQuerry Motors, Inc.1302 N. Harrison St.Shawnee, OK [email protected]

OIADA BOARD OF DIRECTORS

OIADA CONTACT INFO

WHAT’S NEW

04 Commission Report06 Proposed Buyers Guide Changes09 CFPB Expanding Complaint Network10 The Environmentally Conscious Dealer14 Washington Update16 BHPH Perspectives18 Money Matters20 LHPH: The Next Big Thing?24 The Ins and Outs of Franchising30 Contact Your Legislators38 Compliance Overdrive

U . S . D E PA R T M E N T O F J U S T I C E P R E S S R E L E A S E

USED CAR DEALER SENTENCED FOR ODOMETER FRAUD

The Justice Department announced in late November 2012 that Beau Michael Guidry of Baton Rouge, La. had been sentenced in connection with an odometer tampering scheme that defrauded victims in and around Louisiana.

Guidry purchased high-mileage motor vehicles via eBay and wholesale automobile auctions in Louisiana, Mississippi, and Texas. The vehicles’ odometers were then rolled back as much as 147,000 miles and resold to unsuspecting purchasers on eBay via Guidry’s used vehicle company, Affordable Imports in Denham Springs, La.

Guidry rolled back the odometers exclusively on vehicles that were more than 10 years old at the time of sale. Because of the age of the cars, Guidry was not required to sign a disclosure certifying the mileage as accurate. However, each time he altered an odometer with intent to change the mileage on the odometer, he violated federal law.

“Odometer tampering preys mostly on those in society who can least afford to be defrauded,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division. “In these tough economic times, we will take strong action against anyone who defrauds consumers and jeopardizes the safety of our roads and highways.”

Special Agent Wendell Espeland of The National Highway Traffic Safety Administration Office of Odometer Fraud Investigation investigated the case. The case was prosecuted by Justice Department trial attorney David Sullivan of the Civil Division’s Consumer Protection Branch.

U.S. District Judge for the Middle District of Louisiana James J. Brady sentenced Guidry to a term of 20 months in prison, plus one year of supervised release, during which he cannot be involved in the sale of motor vehicles. In addition, the court ordered Guidry to pay more than $72,000 in restitution to the victims of his crimes.

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IRS UPDATE: 2013 MILEAGE RATESBeginning January 1, 2013, the standard mileage rates will be:• 56.5 cents per mile for business miles.• 24 cents per mile for medical or moving purposes.• 14 cents per mile driven in service of charitable organizations.

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Chairman John Longacre convened the Dec.11th, 2012 session of the Used Motor Vehicle and Parts Commission. Following roll call and approval of the November meeting minutes, Longacre called on Commission Director John Maile for the Director’s report.

Director Maile advised the Commissioners that the staff had been centering its efforts on renewals, and was current on renewal applications received through Nov. 27th. A significant number of renewal licenses were sent to dealers; however, a fair number of dealers had not yet submitted renewal applications as of the time of the session.

Maile reported that the Commissioners had previously been emailed financial statements through September, and that generally, the lowest point in Commission finances is at the end of September.

Maile noted that the Commission’s Legislative Liaison was present. He suggested to the Commissioners that there is a significant need to pursue legislation regarding the activities of car crushers, because car dealers are experiencing the untimely crushing of cars that are financed and have liens against them. There are no regulations governing either the responsibility of car crushers to verify the status of legal vehicle ownership, or the reporting requirements when vehicles are scheduled to be crushed.

In addition, Maile expressed a desire to initiate legislation to eliminate the requirement for used vehicle salesperson bonds. He explained that the current bonding requirements have been in effect since 1981, and there have been few instances of any of those bonds being called. He agreed with some bonding company claims that salesperson bond fees help subsidize fees/claims for dealer bonds.

In addition, Maile suggested the Commission consider multi-year licensing, so dealers could have the option of a two- or three-year license in lieu of a one-year license. Such a change could result in staff being more effective and efficient in processing license applications. Commissioner Holman suggested that the Commission would consider offering a two-year license for all dealers instead of a one-year license.

Following a vote affirming receipt and approval of the expenditures report, Chairman Longacre called on Deputy Director Kenneth Whitehead for his report.

Whitehead noted that staff had completed 15 used car dealer inspections during November; had 19 dealers attend the education program; and had held one informal hearing related to temporary tag violations by Auto Bargain. The hearing resulted in a fine of $300.00.

Whitehead’s written report reflected that twenty-six complaints had been handled, which included: title, eleven; contract, five;

REPORT OF CEASE AND DESIST LETTERS ISSUEDThese letters direct the individual or business to cease violations of laws or rules

ENTITY TYPE OF VIOLATION CITY DATE ISSUED Kyle Baber Insurance Blanchard 11/16/2012C.W. Collins Used Dealer Drumright 11/09/2012Kenny Harris Used Dealer Cement 11/06/2012R. John Hayden Used Dealer Weatherford 11/29/2012Edward Hill Used Dealer Altus 11/26/2012

CLOSED COMPLAINT REPORTThese are complaints that have been resolved one way or another. They do not necessarily reflect any wrongdoing on the part of dealers.

ENTITY CITY COMPLAINT RESOLVEDBlazer Motors I-35 Moore Title 11/05/2012Bob Howard Chevrolet, Inc. Oklahoma City Title 11/14/2012Budget Auto Sales Ponca City Title 11/14/2012Car Mart of Ardmore Ardmore Title 11/14/2012David Stanley Chevrolet, Inc. Oklahoma City Title 11/20/2012David Stanley Dodge, LLC Midwest City Contract 11/08/2012David Stanley Dodge, LLC Midwest City Miscellaneous 11/14/2012David Stanley Hyundai, LLC Oklahoma City Contract 11/19/2012Express Credit Auto, Inc. Oklahoma City Mechanical 11/19/2012First Tulsa Auto Outlet Tulsa Title 11/27/2012Fleet Solutions of Tulsa Motor Co. Oklahoma City Mechanical 11/14/2012Hi-Tech Motors, LLC Tulsa Title 11/05/2012Hudiburg Toyota Midwest City Spot Delivery 11/06/2012Iron Horse Motors Oklahoma City Title 11/05/2012Kars & Kars Sales & Leasing II/OKC, LLC Bethany Title 11/14/2012Moore Auto Sales Moore Mechanical 11/30/2012Nelson Mazda Tulsa Miscellaneous 11/27/2012Nick & Paul’s Quality Car Corner Tulsa Miscellaneous 11/08/2012Norris Auto Sales & Service, LLC #2 Oklahoma City Contract 11/26/2012Norris Auto Sales & Service, LLC #3 Edmond Contract 11/14/2012North Point Auto Sales Nowata Mechanical 11/05/2012RC’s Auto Sales Moore Title 11/30/2012Riverside Autoplex of Muskogee Muskogee Contract 11/27/2012Sureauto, Inc. Pryor Mechanical 11/27/2012Triple T Motors, LLC Oklahoma City Title 11/27/2012Vance Ford-Lincoln Miami Mechanical 11/27/2012

LICENSES SUSPENDED OR ABANDONEDThe following licenses were suspended or abandoned.

BUSINESS NAME LOT CITY REASONAuto Mex, LLC LP Tulsa Out of Business; per investigator’s reportDavid Stanley Hyundai, LLC Oklahoma City Out of Business; change of ownershipGTO Motors Oklahoma City Out of Business; applied for retail licenseRiverside Auto Salvage Oklahoma City Out of Business; change of ownershipSureauto, Inc. Pryor Out of Business; per investigator’s report

USED MOTOR VEHICLE AND PARTS COMMISSION REPORT

C O M M I S S I O N U P DAT E

mechanical, six; miscellaneous, three; and one spot delivery complaint.

Applicants for a new license and dealers involved in significant rule violations are required to attend the Commission’s education program as a part of acquiring or maintaining a state license. These education sessions are being held at the Commission conference room at 2401 NW 23, Oklahoma City. Classes are held on the second Monday of each month (the day prior to the Commission meeting). The sessions run from 9a.m. to about noon or 1p.m. You are asked to make reservations so staff can be prepared to accommodate you. Call the Commission at 405-521-3600 to make your reservations.

BY ADR STAFF

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PROPOSED CHANGES TO THE BUYER’S GUIDEF T C AC C E P T I N G C O M M E N T S O N U S E D CA R R U L E C H A N G E S

Just a reminder: When a used motor vehicle sale is conducted in Spanish, the Used Car Rule requires dealers to use Spanish-language versions of the Buyers Guide and to make related contract disclosures in Spanish.

The Used Car Rule, formally known as the Used Motor Vehicle Trade Regulation Rule, has been in effect since 1985 and requires car dealers to display a window sticker, known as a Buyers Guide, on the used cars they offer for sale. The Buyers Guide discloses whether the dealer offers a warranty and, if so, its terms and conditions, including the duration of the coverage; the percentage of total repair costs the dealer will pay; and which vehicle systems the warranty covers.

The Federal Trade Commission (FTC) is seeking public comment on proposed changes to the Used Car Rule. Their proposal includes minor changes to improve readability, adding catalytic converters and airbags to the list of systems on the back of the form, as well as the three material changes discussed below.

Currently, the FTC authorizes both English and Spanish-language versions of the Buyers Guide. When a used motor vehicle sale is conducted in Spanish, the Used Car Rule requires dealers to use Spanish-language versions of the Buyers Guide, and to make related contract disclosures in Spanish. The FTC staff recommends that dealers who conduct substantial numbers of sales in Spanish should display both English and Spanish Buyers Guide to ensure that Spanish-speaking customers receive the required Spanish disclosures. In lieu of creating a bilingual Guide, as some commenters have suggested, the FTC is proposing adding a statement in Spanish to the English Buyers Guide directing Spanish-speaking consumers to ask for a copy in Spanish, if they desire.

The Buyers Guide format in use today does not provide specific mention of third-party warranties, such as those offered by the manufacturer. To disclose the existence of such warranties, the used dealer currently enters appropriate language in the “Systems Covered/

Duration” section on the front of the form. The FTC is proposing adding check-boxes and preprinted language to the back of the form specifically for those warranty disclosures. It’s worth noting that the FTC is not proposing making mandatory the optional disclosure of unexpired manufacturers’ warranties.

As has been widely reported, California recently enacted legislation requiring used dealers to post vehicle history reports on vehicles offered for sale. Specifically, the California dealers must provide a National Motor Vehicle Title Information System (NMVTIS) report. Similarly, the FTC is proposing adding a statement to the Buyers Guide encouraging customers to seek vehicle history

information and directing consumers to an FTC website for more information about vehicle histories.

As proposed, dealers would not be required to obtain vehicle histories or to display specific vehicle history information. Thanks to comments offered in earlier years by industry groups, including NIADA, the FTC has decided against requiring dealers to include title branding and certain vehicle history data directly on the Buyers Guide. In earlier comments, the NIADA and others raised concerns about dealers’ potential liability for reporting information that they do not control. Vehicle history information is available from multiple sources, and that information could be inaccurate, untimely, or incomplete. Dealers would have faced potential legal risks for reporting third-party information that turned out to be deficient.

Besides declining to add title branding and certain vehicle history information to the Buyers Guide, the FTC has also declined a number of other suggestions. Thanks in large part to comments made over the years by industry groups such as NIADA and the NADA, the FTC is not proposing Buyers Guide disclosure requirements regarding prior vehicle damage, prior vehicle use, manufacturer buyback or lemon law status, or known defects. In addition, the FTC declined a suggestion to propose a dealer inspection requirement.

The FTC’s proposed rule will be open for comment until Feb. 11, 2013. As has been the practice during previous Used Car Rule changes, NIADA representatives have met with FTC personnel and will be submitting written comments on the current proposal.

In addition to these proposed changes to the rule, the FTC also recently announced a new final rule that makes minor corrections to the Spanish translation of the Buyers Guide. The revised Spanish-language versions will take effect on Feb. 11, 2013, but dealers may use up any remaining supplies of the current Buyers Guide.

BY ADR STAFF

“THE FTC’S PROPOSED RULE WILL BE OPEN FOR COMMENT UNTIL FEB. 11, 2013. AS HAS BEEN THE PRACTICE DURING PREVIOUS USED CAR RULE CHANGES, NIADA REPRESENTATIVES HAVE MET WITH FTC PERSONNEL AND WILL BE SUBMITTING WRITTEN COMMENTS ON THE CURRENT PROPOSAL.

“

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Fraudulent Oklahoma Title Certificates

The Motor Vehicle Division (MVD) of the Oklahoma Tax Commission has reported seeing a number of fraudulent Oklahoma title certificates being presented to Motor License Agents (MLAs). Most have been readily identifiable by obviously inaccurate title numbers – a combination of both letters and numbers, with too many characters. Since 1985, all Oklahoma title numbers have been comprised of twelve (12) numerals.

The MVD has also encountered instances of obviously fraudulent Oklahoma titles being offered in conjunction with online vehicle sales. They appear to be reproductions of existing title certificates – some from Oklahoma, and some from other states with “Oklahoma” inserted.

The MVD has provided the following guidance to MLAs:

“Please caution your staff to examine title documents to ensure they appear to be valid certificates. Should you encounter what you believe to be a counterfeit document, we encourage you to accept it as if you are going to complete the transaction, then immediately contact MVD Administration for assistance. This is to ensure you do not place you or your staff at risk of any sort of confrontation with the applicant.

“From an investigative perspective, it would be helpful if you could obtain information from the individual presenting the document – i.e. contact phone number, or even a photocopy of their driver license. But, again, we do not wish to place any MLA or employee at risk. So, use your best judgment.”

Please direct any questions or concerns to the MVD at 405-521-3221.

BY ADR STAFF

E X A M I N E T I T L E D O C U M E N T S T O E N S U R E T H E Y A P P E A R VA L I D

F T C AC C E P T I N G C O M M E N T S O N U S E D CA R R U L E C H A N G E S

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From: Ontario Motor Vehicle Industry CouncilThe Oklahoma Used Motor Vehicle and Parts Commission (UMVPC) is warning

Canadian online car buyers and dealers to be aware of a possible Oklahoma-based scam.

Oklahoma UMVPC alleges that Ambient Auto Center of Oklahoma City advertises high-end, late model vehicles on Canadian sites (Autotrader, Wheels, E-bay, Craigslist, Kijiji and Autocatch) with prices that may be “too good to be true.” UMVPC Investigator John Cobb states, “We have received numerous inquiries about this operation, including from Canadian dealers.”

According to Cobb, Ambient’s website became active in October; however, “they are not a licensed dealer. From what we have seen thus far, all their advertising is targeting Canadians.”

A review of Ambient Auto Center’s website finds claims of “hundreds of used exotic vehicles” for sale and “award-winning service,” as well as offers to “ship world wide” (sic). However, according to Cobb, “this dealer has no physical presence – the advertised address for this supposed extensive dealer operation is in fact an empty corn field next to a warehouse owned by the State of Oklahoma. We are making this information public to stop this scam from finding a victim.”

In one instance, Cobb heard from a Canadian dealer who was going to buy a vehicle from Ambient on behalf of one of the dealer’s customers. “Fortunately, the dealer thought the deal was too good and contacted us before sending money.”

OMVIC warns dealers (and consumers) not to get sucked in by an ‘amazing deal.’ If something is priced far below market value, it should usually be seen as a warning, not an opportunity.

OKLAHOMA-BASED ONLINE SCAM

I F I T LO O K S T O O G O O D T O B E T R U E , I T P RO B A B LY I S

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E D U C A T I O N

NOTE: At the end of 2012, the Bureau of Justice Assistance of the U.S. Department of Justice posted the following guidance concerning flood-damaged vehicles. The notice was issued particularly with respect to Hurricane Sandy, but the guidance applies equally to any flood-related disasters.

Millions of people in the eastern United States suffered property damage and loss, widespread power outages, and major flooding as a result of Hurricane Sandy. Though recovery and restoration efforts are still underway, it is extremely important for consumers to be aware of the safety impact of floods on vehicles.

Severe water damage can make vehicles’ electrical systems – including airbag sensors – prone to failure. When a car’s electrical systems have been compromised, it may no longer be safe or roadworthy. After Hurricane Katrina, for example, truckloads of flood vehicles were reportedly taken out of Louisiana to states as far away as the upper Midwest, where they were dried out, cleaned, and sold. Purchasers of those vehicles may not have known that the vehicles had

endured a saltwater flood that potentially damaged their electrical systems.

The National Motor Vehicle Title Information System (NMVTIS) is designed to protect prospective buyers of used cars and trucks from concealed vehicle histories. Created by federal law, NMVTIS is the only publicly available system in the country that requires all insurance carriers, auto recyclers, junk and salvage yards, and states to report vehicle history information. An NMVTIS vehicle history report provides information on the five key indicators associated with preventing vehicle-related fraud and theft:

a. Current state of title and last title dateb. Brand history, a descriptive label

assigned by states to indicate a vehicle’s current or prior state – for example: “junk,” “salvage,” “flood”

c. Odometer readingd. Total loss historye. Salvage historyIf a vehicle has a brand, total loss, or

salvage history, then the consumer is warned that the vehicle may be unsafe. A NMVTIS report does not include repair

histories, recall information, and other care and maintenance data available in alternative vehicle history reports.

NOTE: Mr. Russ Nordstrom, Director of the Motor Vehicle Division of the Oklahoma Tax Commission, provided the following guidance to motor license agents regarding NMVTIS:

“The NMVTIS Junk, Salvage and Insurance Total Loss (JSI) program is currently in place, and insurance companies are required by federal law to report to NMVTIS any vehicle that they deem to be a total loss. However, with the requirement to report to NMVTIS on a 30-day cycle, it is possible that flood damaged vehicles may appear for titling or registration, and a NMVTIS check may not show a report by an insurer if they had not yet reported it to NMVTIS.

To help protect consumers, [motor license] agents can encourage prospective purchasers of used vehicles to conduct a vehicle history check to determine the vehicle’s prior history, especially if it was from a flood affected state, and conduct an independent inspection of the vehicle.”

FLOOD DAMAGED VEHICLESWAT E R DA M AG E D V E H I C L E S ’ E L E C T R I CA L SYS T E M S P RO N E T O FA I LU R E

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The Consumer Financial Protection Bureau (CFPB) continues to expand its data gathering and sharing network. Previous issues of Dealers Resource magazine have reported on the CFPB’s alliances with various state and federal agencies, their oversight authority of the major consumer reporting agencies, and the establishment of their investigatory databases and consumer complaint portal. Most recently, the bureau announced plans to share data from its complaint database with state regulatory agencies.

Basically, this means consumer complaints against used car dealers filed at the federal level may be shared with state agencies, such as the Used Motor Vehicle & Parts Commission and the Oklahoma State Attorney General’s office.

The CFPB’s stated objective is to allow multiple government agencies to work on the consumer’s behalf without the consumer having to file complaints at different levels of government. By providing real-time access to their “growing database of consumer complaints,” the CFPB says

state government agencies will have a more complete picture of the markets for consumer financial products or services, and will be able to help more consumers in their state.

Initially, the sharing will be one-way, from the CFPB to the states, via a secure channel that protects the confidentiality of personally identifiable information. In the future, however, the CFPB plans to build ways to accept complaints and information from the state agencies as well, and to make the data available to other federal agencies, state attorneys general, local agencies, congressional offices as appropriate, and other governmental agencies.

Eventually, according to it’s announced plan, the CFPB will essentially be a clearinghouse for consumer complaints against the financial industry, with broad authority to access commercial databases at financial institutions and consumer reporting agencies, and with multi-directional data flow between state and federal agencies.

Although it is beyond the scope of this

publication, it’s worth noting here that the CFPB’s data collection efforts are not isolated events. As reported by the Wall Street Journal and the American Civil Liberties Union, federal intelligence agencies have recently quietly expanded their authority to collect and share data on U.S. citizens and persons within our borders. The new authority was accomplished through an update to “guidelines” for handling information on U.S. persons issued by the U.S. Attorney General, the Director of National Intelligence, and the Director of the National Counterterrorism Center (NCTC) on March 22, 2012. Prior to the guidelines update, the NCTC had to discard any information on innocent “non-terrorist” individuals within 180 days of collection. That is no longer the case. Through this rule change, the NCTC can now collect entire databases from other federal agencies and can hold and use the data in its entirety for up to five years. This includes consumer financial data such as that being collected by the CFPB. Just thought you would want to know.

CFPB EXPANDING COMPLAINT NETWORKC O N S U M E R C O M P L A I N T S AT T H E F E D E R A L L E V E L M AY B E S H A R E D W I T H S TAT E AG E N C I E S

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THE ENVIRONMENTALLY CONSCIOUS DEALERN O T O N LY I S I T C O S T- E F F E C T I V E , I T CA N B E F I N A N C I A L LY R E WA R D I N G T O E M B R AC E T H E G R E E N R E VO LU T I O N .

Each day, consumers and businesses grow more environmentally conscious. Yet we are a long way from where we need to be.

Make no mistake. This is a call for action.For all of us in the auto industry, each car

deal is part of a gigantic revenue machine. Our focus is on retail market value vs. wholesale cost. Subtract recon expenses, advertising expenses, commissions, etc., and we’re left with net profit.

The question many of us fail to ask: What is the impact on the environment?

Fact: The second-leading cause of global warming is carbon dioxide emissions from burning gasoline.

Our industry is married to the internal combustion engine. Our success is predicated on profits from selling large volumes of gas-guzzling, oil-burning hunks of metal to consumers.

Often we gauge our performance on volume. The more, the better.

Given the nature of our industry, it’s vital that we all embrace, with open arms, the need for a heightened level of environmental responsibility.

There are countless ideas each of us can implement today that will make a difference to the environment while feeding our bottom lines.

Green SolutionsRecycle: In my travels and visits to

dealerships, I’m constantly surprised – and disappointed – by the lack of recycling bins at dealerships. That is the easiest way imaginable to have a positive impact on the environment.

Electronic fax: There are several companies that provide the service. Using an e-fax service drastically cuts down on paper and ink, and is super easy to implement.

Forget traditional mailers: Typical response rate on mail advertising is a mere

2 percent. Save the paper, ink, fuel and money. Allocate those resources elsewhere.

Turn off the printer: We print so many things that just don’t need to be printed. Credit reports, for example. Instead try saving them on your computer along with the customer’s email address.

Turn off excess lighting.Use a green demo: Take the Prius

for a spin instead of the Yukon. Most of us drive without passengers a large majority of the time. Driving a smaller, more efficient vehicle will save you gas money while reducing toxic greenhouse emissions.

Walk or cycle: Go by foot or bike to work or to your favorite lunch or coffee spot.

Smartphone apps: Use the extremely broad selection of apps to replace paper whenever possible.

Do business with green businesses: Ask your body shop how it disposes of waste. Choose companies and vendors that act in an environmentally responsible manner.

Eliminate bottled water: Bottled water is extremely inefficient. Instead, install and use a water filtration system.

Hit the switch: Turn off and/or unplug unused appliances and computers when they’re not in use.

Lot lights: Be diligent about adjusting the timer that controls your lot lights.

Every one of these items can be easily implemented today with little or no negative impact on your business. In most cases, you will experience a significant cost savings, especially when that savings accumulates over the course of one or more years.

Simply put, we can no longer ignore the fact we are depleting the world’s natural resources. We are driving at a very fast pace toward a hotter and hotter future. Why ignore the facts when you can benefit

in numerous ways by making some positive changes?

In addition, the consumer climate has changed to the point that it is not only cost- effective, but it can be financially rewarding to embrace the green revolution. Be green and make sure the world knows! You will attract better talent along with more customers as a result.

Electric Vehicles and HybridsA major industry shift is staring all of us

in the face like a hungry bear fresh out of hibernation, and the electric/hybrid market segment is growing rapidly. Nearly every major manufacturer is getting into the space, and new competitors are emerging with cutting-edge products that use state-of-the-art technology to meet consumer demand.

The products currently on the market are extremely compelling, and the future of the segment is exciting.

Here’s a lineup with some information about several of the products available now:

Tesla Model S: The first full electric vehicle to (mostly) overcome consumers’ No. 1 concern – range anxiety. There are different battery options designed to go up to 160, 230 or even 300 miles per charge at 55 mph.

Consumer interest in the product is phenomenal. The fast, sporty and beautiful sedan is expensive for the average consumer, but will be attractive to the masses on the remarketing side.

Tesla Roadster: Similar to the Model S, but not as practical. This is a pure sports car.

Fisker Karma: Electric/hybrid with extended range. It can go up to 50 miles on 100 percent electric power, then the internal combustion engine engages for another 250 miles. It averages about 58 mpg.

BMW ActiveE: BMW’s first full electric vehicle is only available in select markets on a two-year lease.

C O N T I N U E D O N PAG E 1 2

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D E A L E R S ’ R E S O U R C E FEBRUARY 2013 w w w . e - o i a d a . c o m

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REGION I: MAINE, VERMONT, NEW HAMPSHIRE, MASSACHUSETTS, CONNECTICUT, RHODE ISLAND, NEW YORK, PENNSYLVANIA, NEW JERSEY, DELAWARE, MARYLAND, VIRGINIA, WEST VIRGINIA, INDIANA, OHIO AND MICHIGAN.

REGION II: KENTUCKY, TENNESSEE, NORTH CAROLINA, SOUTH CAROLINA, GEORGIA, FLORIDA AND ALABAMA.

REGION III: NORTH DAKOTA, SOUTH DAKOTA, MINNESOTA, WISCONSIN, ILLINOIS, IOWA, MISSOURI, KANSAS, NEBRASKA, OKLAHOMA, ARKANSAS, LOUISIANA, MISSISSIPPI AND TEXAS.

REGION IV: WASHINGTON, OREGON, CALIFORNIA, NEVADA, IDAHO, MONTANA, WYOMING, UTAH, COLORADO, ARIZONA, NEW MEXICO, ALASKA AND HAWAII.

The foundation invites you as an eligible student to complete this application in pursuit of scholarship funds to be paid to the college of your choice in the fall of 2013. Applications must be POSTMARKED NO LATER THAN MARCH 1, 2013 AND RECEIVED NO LATER THAN MARCH 11, 2013.

The National Independent Automobile Dealers Association Foundation was founded in 2006 by the National Independent Automobile Dealers Association, a 66-year-old trade association, to “improve the independent motor vehicle industry by informing and educating consumers of the general public and training individuals associated with our industry.”

Historically, the association’s scholarship program was the responsibility of the NIADA’s auxiliary. Now, however, as an IRS-approved 501(c)(3) nonprofit organization, the foundation has assumed the oversight of that scholarship program’s functions.

Submit the completed application form with the required attachments in a 10 inch-by-13 inch envelope with adequate postage to:

SCHOLARSHIP SELECTION COMMITTEENIADA FOUNDATION2521 BROWN BLVDARLINGTON, TX 76006

All information MUST be included with the original application. No additional information will be accepted at a later date.

Staff will review the applications for completeness and will forward them to the Scholarship Selection Committee within NIADA and at Northwood University in Midland, Mich. They will be reviewed by region. One applicant will be selected from each of the four NIADA regions based on the merit of his or her scholarship application and will be notified by the foundation office no later than mid-May 2013.

FOUR REGIONAL SCHOLARSHIPS ARE AWARDED ANNUALLY AT THE ANNUAL NIADA CONVENTION IN JUNE.

Annual Scholarship Program

FIND THE SCHOLARSHIP APPLICATION AT WWW.NIADAFOUNDATION.ORG

Toyota Prius: Arguably the most cost-effective solution on the market. Though not a full electric vehicle, it deserves a spot in the lineup based on its massive success in the U.S., coupled with its extreme efficiency at 50 mpg.

Chevrolet Volt: The Volt can go up to 50 miles on full electric power before engaging the gasoline engine for up to another 350 miles. Range anxiety is a thing of the past with this electric/hybrid vehicle.

Ford Focus Electric: The Focus can go up to 100 miles on a charge and is more affordable than any of its luxury counterparts. Super-fast charging, and 100 percent electric.

Nissan Leaf: The Leaf was the first mainstream pure electric car offered for sale in the U.S. It is an excellent urban commuter vehicle but falls short when it comes to the range anxiety concern.

Consumers are more informed and environmentally conscious today than ever. They are actively seeking out and going out of their way to find green solutions that meet their needs.

Additionally, gasoline prices are still historically high, so the financial and environmental need for alternative fuel

solutions is growing by the minute. As more products emerge that meet the demands of the modern “eco-sumer,” those products will inevitably gain more traction.

When it comes to pricing, most of those vehicles are at the top end or just outside the reach of the average consumer. But as they flow into the remarketing space, a majority of them will fall right into the sweet spot.

Unfortunately, a large portion of our electric power comes from coal-burning sources. According to the Energy Information Administration, the most predominant sources of electricity in the U.S. come from coal (48.7 percent), natural gas (21.5 percent) and nuclear power (19.4 percent).

Because so much of our energy is created by coal-burning power plants, it is arguable that electric vehicles consume similar amounts of energy and as a result produce nearly as much greenhouse emissions as gas-powered vehicles. Until we create more clean and renewable energy sources, electric vehicles will remain an imperfect solution, But they represent a big step in the right direction.

In the end, innovation without

capitalization will die. But if enough of us buy in and support the movement, the sky is the limit.

The question remains: Where do you stand on the matter? Are you going to be one of the dealers with your hand raised when an electric vehicle crosses the block? Or are you going to stand on the sidelines and watch your competitors lead the charge?

Technology and the environment are two major items that influence and change how our industry looks and feels. DSC remains committed to providing you not only with the best financing options, but also cutting edge technological solutions to enhance and take your business to the next level.

We are also committed to shifting with your business as environmental needs and consumer demand dictates. We are confident we have the most flexible floorplan finance solutions in the industry, designed to empower you and your business to embrace change and grow green.

BY GARRETT JOREWICZ NORTHWEST REGIONAL DIRECTOR OF DEALER SERVICES CORPORATION.

C O N T I N U E D F RO M PAG E 10TH

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O&R Morgan, Inc.

CHECK WITH OIADA FOR YOUR BONDS

DEALER BOND RATES Used Dealer Bond $15,000.00 - $105.00 Wholesale Dealer Bond $25,000.00 - $175.00 Used Car Auction Bond $25,000.00 - $250.00 Used Car Auction Bond $50,000.00 - $500.00 Used Car Salesman $ 1,000.00 - $ 50.00 Mobile Home Dealer $30,000.00 - $300.00 • QUICK TURNAROUND SERVICE • EASY ONE PAGE APPLICATION • NO FINANCIAL STATEMENTS REQUIRED IN MOST

CASES FOR USED DEALER BOND • NO FINANCIAL STATEMENT REQUIRED FOR

SALESMAN’S BOND • CHECKS OR CREDIT CARDS ACCEPTED

FOR INFORMATION ON THESE AND OTHER BONDS: CALL OIADA at 1-800-346-4232 FAX: 405-799-3367

EMAIL:[email protected]

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Here’s a rundown of some of the latest governmental issues and activity affecting the used car industry from NIADA lobbyist Sante Esposito and NIADA regulatory counsel Shaun Petersen.

LEGISLATIVE REPORTCongress rang in the new year by

passing the American Taxpayer Relief Act of 2012, which was signed by the President on Jan. 2. The bill contains a series of tax rate cuts that restored marginal tax rates for certain income thresholds to their 2012 levels as set by Congress in 2001 and 2003 and extended in 2010 (the so-called Bush tax cuts).

The marginal tax rate for individuals with taxable income of $400,000 per year, or $450,000 if married filing a joint return, is 39.6 percent. The capital gains tax rate for taxpayers in that bracket rose from 15 percent to 20 percent.

Perhaps the most noticeable impact of the legislation is that the new law did not renew the Social Security payroll tax cut that has been in place for the past two years. During 2011 and 2012, the employee portion of the Social Security tax was reduced from 6.2 percent to 4.2 percent, and the self-employment tax was reduced from 12.4 percent to 10.4 percent. Because those rates expired on Jan. 1, workers’ Social Security withholding increased by 2 percent beginning with the first paycheck of 2013.

The new law contains several tax benefits for small businesses, such as a provision that allows small businesses to recover the costs of qualified new equipment faster than the ordinary schedule by permitting the depreciation of 50 percent of the cost in the first year.

It also extends through 2013 tax credits for employers who hire military veterans or individuals from underserved communities. Other extended tax credits include a credit for two- or three-wheeled plug-in electric vehicles.

2012 RECAPHere’s a reminder of a few of the issues

considered by Congress in the past year and some of the proposals made during the previous session.

It is worth noting that any bills proposed by the previous Congress “died” at the end of the session. Any subsequent action on them requires the new Congress to begin anew – that is, bills must be introduced again to start the legislative process.

H.R.527, THE REGULATORY FLEXIBILITY IMPROVEMENTS ACT OF 2011

The bill passed the House in December 2011 and was referred to the Senate Homeland Security and Governmental Affairs Committee.

H.R. 527 would ensure that federal agencies comply with the 1980 Regulatory Flexibility Act and close loopholes used by agencies to avoid compliance with the RFA.

It would also require a better assessment of the impact regulations have on small businesses, forcing agencies to perform better periodic review of rules, and granting the Chief Counsel for Advocacy at the Small Business Administration greater powers for enforcement of the RFA. And it would mandate stricter analysis of the economic impact any proposed rules would have on small entities, including businesses, organizations and governmental jurisdictions.

A similar bill, S.474, the Small Business Regulatory Freedom Act of 2011, was introduced in the Senate in March 2011.

It sets forth criteria for review of a rule, including the continued need for the rule, the complexity of the rule, and the impact of the rule on small entities. It terminates any rule if the issuing agency has failed to complete a required periodic review.

It would also allow small entities to seek judicial review of initial regulatory flexibility analyses and to obtain an injunction of a proposed rule that is noncompliant with RFA requirements.

S. 3468, THE INDEPENDENT AGENCY REGULATORY ANALYSIS ACT OF 2012

Under the bill, the White House would receive explicit authority to influence the rulemaking process of regulatory agencies, including the Federal Trade Commission and the Consumer Financial Protection Bureau.

The President, through an executive order, would be allowed to mandate at the minimum a 13-point test for rulemaking, including finding “available alternatives to direct regulation,” evaluating costs and benefits, and periodically reviewing existing rules to make agencies “more effective or less burdensome.”

For rules with an annual effect of $100 million or more on the economy, agencies would submit their proposals to the White House’s Office of Information and Regulatory Affairs. A negative review from the office would delay a rule for up to three months and force the agency to explain its approach.

H.R.1449, THE MOTOR VEHICLE OWNERS RIGHT TO REPAIR ACT OF 2011

The bill would require car manufacturers to provide to the vehicle owner and service provider all information necessary to diagnose, service, maintain or repair the vehicle; to offer for sale any related tool or equipment; and to provide the information that enables tool companies to manufacture tools with the same functional characteristics.

The legislation provides car companies with protection for trade secrets, only requiring them to make available the same nonproprietary diagnostic and repair information they provide their franchised dealers.

H.R.229, THE MICHAEL JON NEWKIRK TRANSPORTATION SAFETY ENHANCEMENT ACT OF 2011

The bill would withhold a percentage of federal-aid highway funds to states that do not enact or enforce a law that requires annual vehicle inspections, including seat belts and speedometers.

H.R.164, THE DAMAGED VEHICLE INFORMATION ACT

The bill would require greater disclosure of information relating to the market value and safety of damaged motor vehicles, requiring anyone who terminates a motor vehicle contract due to flood or water damage, collision, fire damage, theft and recovery, or any other circumstance that adversely affects the fair market value to disclose to the public the VIN, the date of contract termination, the odometer reading, whether the vehicle’s airbags deployed in the incident that led to the termination, and the cause of termination.

REGULATORY REPORTConsumer Financial Protection Bureau

The CFPB announced plans to share consumer complaint data with various state regulatory bodies.

The current plan will only allow states to access information from the CFPB, while the CFPB will not have access to state information. The long-term goal of the information sharing is to give the CFPB and state agencies access to each other’s consumer complaints, as well as access to local agencies, congressional offices and other appropriate agencies.

WA S H I N GT O N U P DAT E

NIADA GOVERNMENT REPORT

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NIADA GOVERNMENT REPORT

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B H P H P E R S P E C T I V E S

COMPLIANCE MOVES TO MAKE IN 2013With the close of another year, most Buy

Here-Pay Here operators will evaluate last year’s performance by comparing their financial results with the past. They will base their goals and strategy for the next year by looking at financial and operating metrics like unit sales, gross sales revenue, the growth of their installment portfolio and their net income.

Although these represent the standard benchmarks for planning, they omit a critical element: compliance.

The BHPH industry faces some important new legal and regulatory challenges from the newly formed Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC) and state attorney generals’ offices.

All of those regulatory authorities will be monitoring consumer complaints to identify regulatory violations and operators who are violating the rules. The regulators will investigate complaints and have the authority to levy substantial fines for noncompliance.

During 2012, regulatory activity and monitoring of subprime auto compliance violations increased significantly, and more scrutiny should be anticipated in the future. Overall BHPH industry compliance will be judged on how each individual operator complies with the rules and regulations.

To date, I have noticed operators taking different approaches to complying with the new challenges. Some are waiting to see what 2013 will bring. Others are more proactive in their approach to compliance. A few are ignoring the compliance threats altogether.

Given the current circumstances, I recommend all BHPH operators:

• Carefully scrutinize advertising and websites for statements that could be construed as false or misleading.

• Determine if their documentation matches their internal policies and practices.

•Make written disclosures of all important contractual terms to every consumer.

• Update and document internal collection, underwriting and compliance policies and procedures in writing and ask employees to sign a written acknowledgment that they have read and understand them.

• Establish written consumer complaint resolution procedures and protocols.

In 2012, many operators addressed the first four points and appointed a chief compliance officer, as required. Written consumer complaint resolution procedures and protocols have not been a priority in the past but need to be in the future.

Dealers should have a competent attorney review their disclosures and contract documentation and help them develop a compliance management system. It will be money well spent.

I also recommend establishing a welcome calling program shortly after each sale to ascertain whether the consumer had a positive buying experience. During that call, all consumer complaints should be taken seriously and addressed by the operator at that time. Consumer complaints are best resolved before they become a compliance issue with regulators.

In cases in which the consumer is being unreasonable, an operator’s written policies and procedures can be used

as evidence to show how that operator deals with consumer complaints. On investigation by a regulatory authority, the documented policies and practices will be considered in those circumstances.

Complaint resolution is important in building a positive bond between operators and their customers. The old saying, “Treat others as you would like to be treated,” applies here. Both the consumer and the operator must work together over the life of the deal to be successful.

In 2013, the regulatory authorities will carefully scrutinize collection procedures. Collectors must be particularly careful to avoid violations of the Fair Debt Collection Practices Act. That will require more individual knowledge and training.

Although the year ahead is full of legal and regulatory uncertainty, prudent operators should start the year with a proactive approach to compliance. You can’t control what others do but each operator must be responsible and accountable for his or her own actions.

Best wishes for a prosperous New Year!

Note: The National Alliance of Buy Here-Pay Here Dealers (NABD) will host its 15th annual National Conference for Buy Here-Pay Here and Dealer Academy at the Wynn in Las Vegas on May 19-23. For registration and for more information, visit www.bhphinfo.com or call 832-767-4759.

BY KENNETH B. SHILSONKENNETH B. SHILSON, CPA, IS FOUNDER AND PRESIDENT OF NABD, THE ONLY GROUP EXCLUSIVELY FOR THE SELF-FINANCE INDUSTRY. MEMBERSHIP IS OPEN TO ANYONE IN THE BHPH INDUSTRY AND TO SERVICE PROVIDERS. MEMBERS PAY NO DUES.

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T H E T H I R D O F A T H R E E - PA R T S E R I E S O N T H E B A S I C S O F B A N K R U P T C Y P RO C E D U R E S A N D W H AT I T M E A N S T O D E A L E R S / L I E N H O L D E R S .

WHAT DO I DO WHEN MY CUSTOMER FILES BANKRUPTCY?

Shortly after a bankruptcy filing, the court sends a “notice of commencement of a bankruptcy filing,” which includes information regarding the first meeting of creditors, the deadline for filing proof of claim (in a Chapter 13 case) and the deadline for filing objections to the debtor’s discharge.

Receipt of the letter means you have been listed as a creditor. The back of that notice contains important information about your filings.

The meeting of creditors is called the 341 meeting. The dealer is not required to attend, though the debtor is. If you have specific questions regarding the filing you should seek legal counsel. The court-appointed trustee presides over the meeting.

For a Chapter 7 filing notice, we recommend you immediately contact the customer’s attorney and ask the customer’s intentions with regards to the vehicle. A Chapter 7 customer has only three options: reaffirm the debt, redemption or surrender the vehicle.

Reaffirmation is an agreement by which a bankruptcy debtor is legally obligated to pay all or part of the debt he or she could discharge. It is completely voluntary. The agreement must be made before the discharge is entered.

Redemption allows customers to keep the vehicle for a reduced amount. Typically, the redemption amount is paid in one lump sum equal to the current wholesale value as determined by the court.

Both of those options must be approved by the court.

Or the customer can surrender the vehicle and discharge the debt.

The decision will be indicated to the bankruptcy court and to creditors on a Statement of Intention.

If the car is to be surrendered, the dealer can file a motion asking the judge to lift the automatic stay. If the court orders the stay lifted, the dealer

can repossess the vehicle or make arrangements with the customer’s attorney to voluntarily return it. Or he can simply wait until the discharge is entered and the case is closed and repossess the vehicle, since the automatic stay is no longer in effect.

We recommend dealers secure professional legal assistance to complete any of those processes.

In a Chapter 13 filing, your notification automatically stays (stops) most collection actions. The dealer cannot initiate or continue lawsuits or wage garnishments, or even make telephone calls demanding payment. The automatic stay also protects any co-debtors.

No later than 45 days after the 341 meeting, the bankruptcy judge holds a hearing to confirm the trustee’s plan. The trustee will then distribute funds “as soon as practicable.” The confirmed plan binds the debtor and creditor.

Next comes notification of the amount of money to be disbursed and the “cram down” of the original interest rate on the installment loan contract to a national average of 5.5 percent. The 12-, 18- or 24-month loan will likely be extended to a 60-month payback, according to the bankruptcy plan.

Keep in mind that the money to be received from the trustee is not a guaranteed payment. In most cases, the customer’s attorney gets his/her fees, to be taken out before the dealer ever receives a payment.

Also, the dealer only receives disbursement from the trustee as long as the customer sends the plan payment to the trustee. If the customer does not honor the payment agreement, the trustee will usually wait at least 90 days before filing for dismissal.

A dismissal is different from a bankruptcy case that has been paid and ends with the discharge of the debt – the automatic stay ends and creditors can resume collection proceedings. But

be aware that the customer can refile Chapter 13 two more times after the initial filing.

Given all that, should a dealer simply give up and forget about ever getting paid?

Court requirements for making claims against a bankrupt customer are complicated and require strict adherence to all sorts of rules. Failing to meet the exact filing deadlines or missing a mandatory meeting of creditors can result in loss of your claim and keep you from recovering any of the money owed to you.

Even if you follow every rule, it can take 16 months or longer before you see any cash. If you are owed a significant amount of money, the last thing you should do is spend an enormous amount in legal fees if the chance of getting your money back is slim or nonexistent.

There could, however, be an opportunity to recover some of the funds you are owed by offering open bankruptcy notes for sale. Third-party companies will purchase those notes from you – the amount you receive is based on the quality of the collateral, the amount owed on the note and other “risk factors.”

Through third-party buyers, dealers can get paid on the day they receive a bankruptcy notice and never have to deal with legal fees, court proceedings, the vehicle, any additional paperwork or compliance with bankruptcy laws.

Note: The information presented should not be cited or relied upon as legal authority and should not be used as a substitute for reference to the U.S. Bankruptcy Code and the Federal Rules of Bankruptcy Procedure.

BY ROD HEASLEY ROD HEASLEY IS EXECUTIVE VICE PRESIDENT OF PERITUS PORTFOLIO SERVICES , A SOUTHLAKE, TEXAS-BASED SPECIALTY FINANCE COMPANY THAT SPECIALIZES IN THE PURCHASING OF OPEN BANKRUPTCY ACCOUNTS. 866.831.5954 OR [email protected]

MONEY MATTERS

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THE NEXT BIG THING?In recent years, the Lease Here-Pay

Here (LHPH) business model has generated some buzz in the world of subprime auto sales – and for good reason.

LHPH is an offshoot of the Buy Here-Pay Here (BHPH) concept, but the dealer retains the title to each vehicle and charges usage fees to each customer. While the difference might seem subtle at first, it can radically change how the vehicle transaction is managed, taxed and regulated.

THE ADVANTAGES OF LHPHThe LHPH model offers some distinct

advantages over BHPH, including:• Deferred sales tax.• A federal income tax deduction for

depreciation of your assets.• Doesn’t require a related finance

company (RFC).• Less burdensome regulations.• Faster repossession times.• Vehicles can’t be claimed in a

bankruptcy.Probably the most commonly cited

advantage of switching to a lease program is the ability to defer sales tax payment on your vehicles.

Instead of paying sales tax up front – long before you’ve received all of the customer’s money – you’re allowed to pay the sales tax in installments, every time your customer pays you. That lessens the risk of losing money when a customer defaults early, and it makes cash flow more even and manageable.

George Klinke, vice president of business development for the aptly-named San Diego-based company LHPH, LLC, said the deferred tax is LHPH’s greatest advantage.

“There are 32 states where there’s a real cash flow incentive,” Klinke said. “When you buy a car in California, you pay an 8.75 percent sales tax on that vehicle. On a $20,000 car, you’re paying $1,750. That’s money that comes out of the dealer’s or the consumer’s pocket today.”

But in California and 31 other states, dealerships can pay the sales tax on each leased vehicle as payments are collected, rather than at the lease inception. Additionally, lessors can collect a security deposit, which is not subject to taxation.

“This is a pool of money where if there are other expenses that come up in the lease, the security deposit can be applied against those,” Klinke said.

Unless state law mandates otherwise, the only up-front tax on a lease is paid on the cap cost reduction.

For years, BHPH dealers have avoided income taxes on “phantom income,” through the use of a related finance company. An RFC is a legally separate corporation an auto dealership establishes to handle financing, often for customers who would have difficulty obtaining credit from traditional lenders.

Usually, the dealership sells the note from each vehicle transaction to its related finance company at a discount, thereby eliminating most of the profit on the sale for the dealership, which otherwise would have been taxable income even though no payments have been collected from the consumer. The RFC’s income on the note purchase, however, is taxed as the payments are collected, avoiding a large income tax on profits that haven’t been earned yet and creating a substantial cash flow advantage.

If executed correctly, that setup is entirely legal. The IRS has even written

a guide for it, available at www.irs.gov/businesses. But the IRS also examines RFCs carefully for evidence that they’re substantive businesses that remain at “arm’s length” from dealerships, rather than thinly disguised shell corporations. One small misstep could place you in line for an audit.

For dealers wanting to avoid that compliance headache and the difficulty of establishing a legitimate RFC, LHPH is an attractive option. Because of the inherent tax advantages of leasing, it’s not necessary to have a related finance company to handle LHPH deals – though dealers can still choose to keep their RFC as a buffer against bad publicity, lawsuits and financial risk.

Because the dealer is the lessor and therefore the owner of the asset (vehicle), he can claim depreciation over the term of the lease based on IRS guidelines and use it as an income tax deduction, reducing the overall tax bill.

According to Jason Berger, managing partner of AK Acceptance, an RFC in Pittsburgh, LHPH deals aren’t constrained by the tougher regulatory requirements that affect BHPH dealers. At the federal level, LHPH deals fall under the less restrictive Regulation M rules that govern auto leasing, rather than the notoriously tough Regulation Z rules that govern auto sales.

Under Reg M, the dealer is not obligated to disclose an annual percentage rate (APR), because there is no interest rate in a lease – just a “rent” or “lease” charge. The lack of an interest rate means you’re not encumbered by state usury limits.

You can impose mileage overage charges to protect the value of the vehicle.


LHPHL E A S E H E R E - PAY H E R E P U T S A N E W T W I S T O N T H E B H P H M O D E L

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LHPH

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And if the lessee declares bankruptcy after starting an LHPH deal, he won’t be able to avoid repossession because he never had ownership of the vehicle.

For the same reason, if a lessee breaches the contract, there’s no mandatory grace period to comply with for repossessions.

“We pull the trigger faster,” Berger said, noting that dealerships can technically repossess a vehicle if a payment is even one day late – though that might not be a great way to build goodwill in the community. “My target turnaround time is 21 days from the time of default [to when the car is available to lease again]. With a loan, we’d usually let it go a little bit longer.”

LHPH has some definite appeal for consumers, too. Because they aren’t paying for full, lifetime ownership of the vehicle, drivers can normally afford a better quality automobile than if they insisted on purchasing. Like the dealer, they can usually pay less cash up front. And when a customer is done with the car, he can simply return it and get another car, or become the owner by paying or financing an agreed-on residual value.

Klinke said given the choice, customers should prefer to pay the security deposit on their lease rather than a down payment on a loan.

“If the lessees do everything correctly,” Klinke said, “they can roll that [sum] over into a new lease or get their money back [at end of term].”

Many dealers cite reasons like these when attempting to explain a rising national interest in the LHPH model. Berger’s dealership partner had operated on the BHPH model since 1999, but never saw the growth it has since it switched to LHPH.

“Year-over-year, I’ve seen a 73 percent jump in originations,” Berger said. “The primary reason for that is leasing.”

THE CHALLENGES OF LHPHBut before taking the plunge, you should

also consider the challenges:• Expensive retraining process.• Requires more advanced dealer

management software.• Vicarious liability issues – requires

contingent liability insurance.• Less liquidity than BHPH.As advantageous as LHPH can be, it’s

not a simple change for dealerships to make. LHPH deals require more advanced dealership management systems that can perform complex lease calculations like depreciation schedules and payments that include rental charge, depreciation and sales tax. Often, those programs cost a bit

more than the basic deal software. Allen Lentsch, executive director of

the Northland Independent Automobile Dealers Association – the NIADA affiliate for Minnesota and North Dakota – stressed that there is also some liability risk involved.

“When you do LHPH, you own the title of the car, so you can be held responsible for things your customers do with it,” Lentsch said.

Most notably, that includes causing an accident, a concept called vicarious liability. To protect themselves against vicarious liability and the risk of lawsuits, dealers must purchase contingent liability insurance, which many turnkey LHPH solutions provide for their dealers.

The Graves Amendment, passed by Congress in 2005, was written to prevent unlimited vicarious liability lawsuits, but the law has been challenged frequently. And despite the Graves Amendment, there is still potential vicarious liability for dealers/lessors up to the state minimum financial responsibility limits.

Because of that risk, it is incumbent on each dealer to make certain each lessee has proper insurance coverage.

“We always make sure customers have insurance, just as much as we make sure they’re keeping up with payments,” Berger said. “We disable vehicles if [a customer’s] insurance lapses.”

If you’re a BHPH dealer who sells loan portfolios to investors, you might have a tougher time drumming up interest in your LHPH leases, partly because the product is less commonly understood.

“Some lenders are opening up to this,” Berger said. “From what we see, there are going to be more in the near future.”

To dodge potential complications, many LHPH dealers use consulting organizations such as Northland Auto Enterprises (affiliated with the Northland IADA), LHPH, LLC and Lease It Own It to advise them on compliance issues and provide training materials, forms and access to specialized insurance.

Those services can assume various levels of responsibility for a dealer’s compliance with lease regulations. LHPH, LLC even goes as far as to adopt the responsibilities of the lessor, shielding the dealership from some legal risks.

Before switching, it’s a good idea to contact some LHPH services to learn the different approaches and costs associated with outsourcing LHPH implementation. Often, working with experts of some kind is the smartest way to go.

IMPLEMENTING LHPHIf LHPH sounds like the right way

forward for your business, there are a few things you should focus on right out of the gate.

“I would recommend to any dealer to try to set the most accurate residual [value] possible,” Berger said. “If you do that, you’ll get that vehicle back and put that vehicle back on the road. [You] can get eight years out of it and lease it three times.”

However, dealers should also remember that the IRS imposes limits on how low residual values can be set and still remain a “true lease.”

Because dealers want to keep leased vehicles in good condition for the next lessee, high-maintenance autos are not recommended for an LHPH program. In addition to requiring lessees to purchase comprehensive coverage for their vehicles, many LHPH dealers try to package in a warranty or service agreement so they’re able to keep their vehicle in good shape while profiting from the reconditioning.

Berger said the biggest challenge for the dealership he works with was persuading customers – and employees – to go along with the LHPH plan.

“Your customers need to understand that the vehicle isn’t really an asset, it’s an expense for them,” Berger said. “At the end of [a three-year lease], how much will this vehicle actually be worth? “

Berger recalled employees at the dealership he works with taking about two months to get fully used to the terminology differences between BHPH and LHPH.

“When you have people who have been selling cars for 16-17 years and all of a sudden you hand them a new model, of course there’s a transition,” he said. “But when they see how much this helps us sell cars, they really want to learn it.”

In the end, for many dealers, the challenges involved in switching to the LHPH model are far outweighed by its rewards.

“I’ve never seen anybody switch back,” Klinke said. “The benefits for the dealer, RFC and the customer are really compelling, and to switch back would just be a real headache for everybody.”

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

C O N T I N U E D F RO M PAG E 2 0 THE NEXT BIG THING?

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Dealer registration forms, additional sale information and directions are available on our web site: chickashaautoauction.com

AUCTION SALE EVERY THURSDAY NIGHT!“ C H I C K A S H A A U T O A U C T I O N . . . W H E R E S E R V I C E S E L L S ! ”

P. O . B O X 2 1 5 7 • 4 1 1 E . H W Y 1 9 C H I C K A S H A , O K 7 3 0 2 3 • P : 4 0 5 2 2 2 3 1 1 1 • F : 4 0 5 2 2 2 3 1 1 5

Dinner is served from 5:30 till 6:30pm. • We have a host of New Car Stores, Loan

companies, Banks, and credit unions.

• We strive to provide an extremely friendly atmosphere and full service to our dealer family.

• Come Experience where Dealers will be treated with more respect and service !!

• We are a family owned and operated, experienced business with a respected reputation thru out the automobile industry. We take great pridein being the best we can possibly be.

W E A R E A D E A L E R S A L E O N LYOWNERS: DAVID BLALOCK, JIM BLALOCK

Auction starts at 6:30pm

When it comes to small business, used car dealers are the last cowboys – proud, independent business people who like being their own bosses, running a business the way they want to.

Which is why it seems strange to many that there are companies that operate nationwide and offer franchise opportunities to people who want to sell used cars. But for the right person, franchise used car dealerships can be the way to go.

KNOW WHAT IS EXPECTEDBrion Bethel owns Thrifty Car Sales of

Mountain Home in Mountain Home, Idaho. He has been in the car business for 15 years. He started in the finance department right out of college.

“I got a degree in finance,” Bethel said. “So when I saw that ad for a finance graduate, I thought it meant one thing, when it meant something else.”

But Bethel found he liked working in

auto finance, and in 2001, he and his wife Melanie decided to open their own used car dealership. They decided to go the franchise route because they liked what the franchisor brought to the table.

“We wanted to have the benefits of a national brand without owning an OEM franchise,” Bethel said. “I have to say that owning a franchise has met many of our expectations, but not met expectations in other ways.”

Bethel said he would recommend owning a franchise, as long as the dealer truly understands what he or she is getting into and what the rules are.

“We were under the impression that we would have access to more vehicles at a better price through Thrifty,” Bethel said. “I want to emphasize that no one promised us that.”

So, Bethel said, when investigating a franchise opportunity, make sure you know exactly what your rights – and your

responsibilities – are. It’s important to have a thorough understanding of the franchise’s entry requirements, and don’t forget to research the exit requirements as well.

“To fully understand any business opportunity, you need to consider what it takes to get in, but you also need to understand how you can get out of the business as well,” said NIADA chief operating officer Steve Jordan, a former managing partner with a J.D. Byrider franchise group.

“Before you enter into any agreement, you need to fully understand what the exit strategy is. You may not ever need to execute it, but things can change unexpectedly and knowing how to exit the business is just as important as knowing how to enter.”

Overall, Bethel said, the advantages of having the Thrifty name have paid off.

“When people hear Thrifty, they think rental cars, so we get people coming in all the time looking for rental cars,” said Bethel,

THE FRANCHISEA L I G N I N G W I T H A N AT I O N A L O P E R AT I O N O F F E R S S E C U R I T Y B U T L I M I T S C O N T RO L

BY JIM STICKFORD

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whose operation also rents cars. “People who need rental cars often need one because their car is in the shop or has been damaged in an accident. So the franchise constantly brings people to us. If you’ve wrecked your car, we get a chance to sell you a new one.”

FRANCHISE RESOURCESMike Pearce, vice president of franchise

development for J.D. Byrider, said owning a franchise means being part of a larger system and all the extras that come with that.

“In our system, that includes legal protection,” Pearce said. “We are able to hire multiple lawyers to advise people on changes in the law. We help franchisees avoid mistakes, and in our business mistakes can be very costly.”

Additionally, Pearce said, J.D. Byrider – the only Buy Here-Pay Here used car franchise operation – has spent a lot of time developing standards to help guide dealers in their operations.

“We can help up front with training and help people live in the standards of the system,” Pearce said. “If you’re an independent dealer moving into the franchise side of things, it can be a very big surprise learning about the standards and controls you must maintain to protect the brand.”

In addition to legal assistance and training, big companies can provide all sorts of resources, from marketing assistance, warranties and help with acquiring inventory to discounts on items ranging from tires to oil filters.

That kind of support can be very enticing to an independent dealer struggling for survival.

“It’s a structure,” said Lee Goldey, general manager and director of operations for Thrifty Car Sales. “There’s a website that’s structured. There are partner relationships with AutoTrader, Cars.com, CARFAX, things of that sort, to give them discounted deals. We spent almost a billion dollars just on tires last year, and that allows our franchisees to get tires really inexpensively.

“As an independent, they don’t get those types of deals because they don’t have the mass and volume behind them.’’

There are financial advantages, as well. Goldey said Thrifty’s relationships with Santander and TD Bank give its franchisees a leg up in securing financing, and they also have access to the top programs from floorplan providers AFC and DSC.

“Santander doesn’t sign up independent stores,” he said. “That gives our dealers a finance source they couldn’t normally get. Our relationship with TD Bank has opened

that up to our franchisees, and a majority of them have been picked up because TD Bank knows we’re good people who sell good cars.”

BRAND PROTECTIONJoe Lescota, NIADA’s director of dealer

development, said the No. 1 benefit and the main reason dealers join a used car franchise operation is name recognition.

With a franchise, Lescota said, a dealer doesn’t have to spend all his money building his “brand.”

For an independent dealer, creating a reputation and recognition in the community through marketing can take time and money – a lot of money. Items such as ads in various media and agencies to develop campaigns and logos don’t come cheap.

By buying a franchise, the dealer is, in effect, buying the good name of, say, Payless Car Sales. A lot of the hard work has already been done, and there are people at the corporate level who can help the dealer with marketing and advertising.

“Used car dealers don’t always have the best reputation,” Lescota said. “That’s the cross they have to bear. Having a franchise is a way to make headway against that.”

There can, however, be a flip side to that.While having a solid brand identity is

BY JIM STICKFORD


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good, Lescota said, it also puts a dealer at the mercy of all of his fellow franchisees. If someone who has the same franchise in the next town over does something bad, it can spill over to your franchise.

That, Pearce said, is why protecting the brand must be among a franchisee’s top priorities.

“It’s really protecting your own business,” he said. “That’s just a fact of life. Anyone who wants to operate a franchise has to realize that.

“When you really come down to it, all a franchise is is a set of standards and operations systems and brand awareness. Hence the need to protect the brand. It’s important to realize that when you decide to buy a franchise, you need to be a team player. You have to trust the franchisor is maintaining the brand.”

That’s why J.D. Byrider has what Pearce calls a compliance team – which, he was quick to add, is not something that should be considered punitive.

“The compliance team is there to make sure franchisees are compliant with all the federal and state rules and regulations,” Pearce said. “Following the law is important. We also provide a franchise consultant to ensure our dealers operate at full profitability. We can provide dealers with

a business coach, which is something an independent dealer doesn’t have.”

That said, Pearce acknowledged owning a franchise used car operation is not for everyone.

“When you consider being part of a franchise system, you absolutely have to consider the input you will receive from the corporate headquarters,” he said. “But input works both ways. A good franchisor listens to the franchisees.”

Control from headquarters can be a tricky thing, Pearce said. Too much control can be as bad too little control.

He noted that McDonald’s, perhaps the king of franchise operations, was known in the past for keeping tight control over the company’s franchisees. But in the end, they revolted.

Pearce said J.D. Byrider was created because company founder Jim DeVoe, a General Motors dealer in the 1970s, was frustrated by some of the directives forced on GM’s franchise dealers by the manufacturer. So when he began his company, DeVoe made it a point to listen to his dealers.

“If you are considering joining a franchise operation, ask what kind of say you as a franchisee will have in the business,” Pearce said. “[DeVoe] set up our structure to take input from dealers.

“Our advertising is a separate entity from the company. It’s managed and run by a board of dealers. So even with a franchise, you can still have a say in how the business is run.”

TAKE ONE FOR THE TEAMBut having a say in how a franchise

is run doesn’t mean being able to do whatever you want.

“Sometimes there are things that are done for the greater good of the system,” Pearce said. “These things can be limiting to franchisees.

“We tried things like GAP insurance and found it was too hard to run for a larger system. There are times things are done for the benefit of the system that prevent people from making money. You have to be a team player and sometimes you have to take one for the team.”

J.D. Byrider, Pearce said, has a specific niche in which it operates. That means franchisees must stock a certain type of car.

“There are three tiers in the Buy Here-Pay Here business,” Pearce said. “We play in the middle tier and don’t allow franchisees to deviate from that tier. We control franchisees in that way because our business model has worked best that

C O N T I N U E D F RO M PAG E 2 5 THE FRANCHISE

OSHA requirements, workplace diversity, Gramm-Leach-Bliley, Red Flags Rules…Keeping up with all of the compliance demands can be overwhelming for any dealer. And now, with the FTC and the CFPB starting to more closely scrutinize the auto industry, it’s even more vital than ever for your entire staff to help keep your dealership compliant.

NIADA wants to help ease the burden. Starting in February 2013, dealers

can jump-start their compliance training with NIADA’s online suite of dealer compliance training materials. Subscribers will have access to videos, checklists, key forms, documents, and more…all at their fingertips, on demand. Don’t worry – for dealers who prefer, content is also available on disc. You’ll even be notified when new training is added, so you can stay ahead of the curve.

FOR ADDITIONAL INFORMATION VISIT WWW.NIADA .COM OR CONTACT GEORGIA@NIADA .COM.

Jump-Start Your Compliance Training

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way and that, honestly, has frustrated some franchisees.”

But the system, Pearce contends, ultimately gives franchisees almost a two-to-one advantage over independent dealers. And the company has statistical data across the dealer system that can help dealers.

As a Thrifty franchisee, Bethel has access to the company’s Business Development Center (BDC), and he said that kind of help from the home office is extremely useful.

“Their marketing people help us with ads, whether it’s print, TV or the Internet,” Bethel said. “As an example, just recently we wanted to send out a mailer. We called up and asked for help. In a matter of days they emailed back to us three ads for things like oil changes and other service department services. These were ads that worked for other dealers in the past.

“Their BDC is something their franchisees can sign up to use. For a dealer like me – I only have the one dealership – it is very useful.”

The BDC can help control costs and follow up on every email sent to the dealership, Bethel said.

“That way no customers fall through the cracks,” he said.

But, Lescota said, it’s a simple fact that large corporations aren’t as nimble

as a small businesses. It might take a large company more time to react to new situation, and a franchise dealer can be frustrated by that pace.

The bottom line, Lescota said, is that anyone interested in buying a franchise used car operation has to weigh the pros and cons carefully.

Franchisors can help with finance, legal advice, business development and bookkeeping software as well as advertising, parts, websites and warranties. Brand recognition goes a long way toward establishing a dealer with the public.

But the very nature of a franchise means the dealer will give up some independence. Being a franchisee doesn’t mean having no power over one’s business, but it does mean there are limits and guidelines that must be followed.

Dealers who remember that, Lescota said, can do very well for themselves.

“Franchises can work for dealers,” Lescota said. “You do not have to reinvent the wheel. For someone with no experience, that is great. For someone with fears about going off on your own, that is very comforting.

“But there is a tradeoff. You give up some of the profits to do so. If you understand that, franchises can work for you.”

While new car sales were strong throughout November, a shortage of trade-ins caused by Hurricane Sandy is expected to result in a tighter supply of used vehicles and higher prices for the near future, Black Book managing editor Ricky Beggs said.

New car sales reached 1.14 million in November, an increase of 15 percent, and a handful of carmakers had record months. Beggs said the pace of new car sales combined with the continued replacement of inventory from Hurricane Sandy vehicles impact used cars in a several ways.

The jump in new sales to a seasonally adjusted annual rate of as much as 15.6 million, according to some industry estimates, should mean additional trades entering the lots, increased inventory that would ease the supply of used cars and offset prices from the Northeast demand. But the percentage of trade-ins for those vehicles has been unusually low, Beggs said.

While usually about 60 percent of all new car sales involve a trade-in, Black Book estimates project the trade-in percentage in the Northeast since Sandy could fall as low as 30 percent, which could cause prices on used cars in the region to continue to rise in the near-term as dealers get fewer used cars from trades and look elsewhere to find inventory.

Northeast Used Car Supply Tightens

I N D U S T RY N E W S

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NHTSA RECALLSChevrolet / Colorado, MY 2010-2012GMC / Canyon, MY 2010-2012NHTSA ID Number: 12V594000Latches/Locks/Linkages: Hood: LatchUnits Affected: 118,800General Motors is recalling certain model year 2010-2012 Chevrolet Colorado and GMC Canyon vehicles manufactured from November 9, 2009, through August 28, 2012, for failing to comply with the requirements of Federal Motor Vehicle Safety Standard No. 113, “Hood Latch System.” The hood may be missing the secondary hood latch. If the primary hood latch is not engaged, the hood could open unexpectedly. During vehicle operation, this could obstruct the view of the driver and increase the risk of a crash. General Motors will notify owners and instruct them to inspect their vehicle for the presence of a secondary hood latch. Dealers will replace the hood on any affected vehicles, free of charge. Owners may contact Chevrolet at 1-800-630-2438 or GMC at 1-86-996-9463. GM’s number for this campaign is 12319.

Hyundai / Veloster, MY 2012NHTSA ID Number: 12V568000Visibility: Sun Roof AssemblyUnits Affected: 13,500Hyundai is recalling certain model year 2012 Veloster vehicles manufactured from November 1, 2011, through April 17, 2012 and equipped with panoramic sunroofs. The panoramic sunroof assembly may have been weakened during installation at the factory. If the assembly was weakened at the factory the panoramic glass panel may break while the vehicle is in motion leading to personal injury or a vehicle crash. Hyundai will notify owners, and dealers will inspect the sunroof’s integrity and replace the sunroof glass assembly, as necessary, free of charge. Owners may contact Hyundai at 1-800-633-5151. Hyundai’s recall campaign number is 108.

Hyundai / Veloster, MY 2012NHTSA ID Number: 12V567000Parking Brake: Conventional: Mechanical: Linkage and CableUnits Affected: 4,490Hyundai is recalling certain model year 2012 Veloster vehicles manufactured from July 2, 2011, through February 27, 2012 and equipped with manual transmissions. Moisture and road grime may cause the parking brake components to bind. If the parking brake components bind, the parking brake may not operate properly, and the parking brake may drag while driving or may not fully engage when the vehicle is parked. If the parking brake is not fully engaged when parked, a manual transmission may move unintentionally, increasing the risk of a crash. Hyundai will notify owners, and dealers will replace the rear brake caliper assemblies

free of charge. Owners may contact Hyundai at 1-800-633-5151. Hyundai’s recall campaign number is 107.

Acura / MDX, MY 2003-2006Honda / Odyssey, MY 2003-2004Honda / Pilot, MY 2003-2004NHTSA ID Number: 12V573000Electrical System: Ignition: SwitchUnits Affected: 807,161Honda is recalling certain model year 2003 and 2004 Pilot and Odyssey and 2003 through 2006 Acura MDX passenger vehicles manufactured from November 26, 2001, through August 30, 2006. The interlock lever of the ignition switch may deform, which can allow the interlock function of a vehicle with an automatic transmission to be defeated. Removal of the ignition key when the gear selector of a vehicle with an automatic transmission has not been shifted to the park position can allow the vehicle to roll away, increasing the risk of a crash. Honda will notify owners and instruct them to take their vehicle to a Honda or Acura dealer. The dealer will install an updated shift interlock lever and, if necessary, replace the ignition switch, free of charge. The recall is expected to begin on, or about, February 7, 2013. Owners may contact Honda at 1-800-999-1009. Honda’s recall campaign numbers are S73 and S74.

Porsche / 911 GT3, MY 2010NHTSA ID Number: 12V558000Wheels: Cap/Cover/HubUnits Affected: 455Porsche is recalling certain model year 2010 911 GT3 vehicles manufactured May 15, 2009, through February 11, 2010. The rear wheel hubs may be prone to failure under certain driving conditions. Also, the original, suggested maintenance intervals may be insufficient to prevent wheel hub failure. If the rear hub fails, there may be a loss of vehicle control, increasing the risk of a crash. Porsche will notify owners, and dealers will replace the wheel hubs on the rear axle free of charge. The service interval specifications will also be revised and provided to owners as part of Porsche’s owner notification letter. The recall is expected to begin in December 2012. Owners may contact Porsche at 1-800-767-7243. Porsche’s safety recall number is AC05.

Mercedes / GLK350, MY 2011-2012Mercedes Benz / C300, CL550, CL63, MY 2011-2012Mercedes Benz / E350, S400, S550, S63, MY 2011-2012NHTSA ID Number: 12V557000Fuel System, GasolineUnits Affected: 5,800Mercedes-Benz is recalling certain model year 2011-2012 S400, S550, S550 4Matic, S63 AMG, C300, C300 4Matic, E350,

GLK350, GLK350 4Matic, CL550 4Matic, and CL63 AMG vehicles manufactured from April 18, 2011, through July 12, 2011. Due to an irregularity stemming from the molding process of the fuel filter flange, the fuel filter flange may crack when operated in high temperatures. If the fuel filter flange cracks, it will leak fuel which may lead to a fire if an external ignition source is present. Mercedes-Benz will notify owners, and dealers will replace the fuel filter, free of charge. Owners may contact Mercedes-Benz at 1-800-367-6372.

BMW / X5 SAV, MY 2009-2012NHTSA ID Number: 12V550000Steering: Hydraulic Power Assist SystemUnits Affected: 29,800BMW is recalling certain model year 2009-2012 X5 xDrive 35d SAV diesel vehicles manufactured September 1, 2008, through November 15, 2012. The engine belt idler pulley bolt could loosen and break over time. If the engine belt idler pulley bolt breaks, the vehicle may unexpectedly lose power-assisted steering, increasing the risk of a crash. BMW will notify owners, and dealers will replace and tighten the idler pulley bolt. Owners may call BMW at 1-800-525-7417 or email BMW at [email protected].

Ford / Escape, MY 2013Ford / Fusion, MY 2013NHTSA ID Number: 12V551000Engine and Engine CoolingUnits Affected: 80,057This is an update to a recently announced recall. Ford is recalling certain model year 2013 Escape vehicles manufactured from October 5, 2011, through November 26, 2012, equipped with 1.6L engines, as well as certain model year 2013 Fusion vehicles manufactured from February 3, 2012, through November 29, 2012, equipped with 1.6L engines. Coolant system leaks may cause the engines to overheat and leak flammable engine fluids. If flammable engine fluids come in contact with the vehicle’s hot exhaust system, a vehicle fire could occur. Ford will notify owners, and dealers will inspect the engine for coolant system leaks and reprogram the vehicle’s powertrain control module and instrument cluster with an updated calibration and overheat strategy software. There will be no charge to owners for this service. Owners were recently notified to contact dealers to arrange for alternative transportation as Ford developed a remedy. Owners will be receiving additional notifications to contact Ford dealers to schedule the free remedy repair. Owners may contact Ford Motor Company Customer Relationship Center at 1-866-436-7332. Ford’s recall campaign number is 12S41.

For more information or to subscribe to weekly email recall notifications, go online to www.NHTSA.gov or www.SaferCar.gov.

S O U RC E : W W W. N H T SA . G OV

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Framework to Achieve a Provisioning Mindset

About a year ago, I introduced the idea of “provisioning” inventory as a replacement for the long-held practice of dealers “stocking cars” to feed their used vehicle operations.

The basic concept is that stocking cars doesn’t sufficiently capture the more holistic nature and needs of retailing used vehicles to achieve maximum return on investment and profitability in today’s more competitive and Internet-driven marketplace.

If you’re still out there stocking cars, you’ll get crushed. You’re competing against dealers who use market-specific supply and demand data to know the right cars, the right price to pay and the right retail asking price to sell cars quickly and achieve their profit goals, again and again.

Beyond the laser-like focus on each used vehicle’s ROI and profitability potential, those dealers have also adopted what I call a provisioning mindset for their entire dealerships.

It’s a mindset that starts in used vehicles and, given early successes and roadblocks there, extends to each dealership department. I address this intra-dealership dynamic in greater detail in my soon-to-be-published book, Velocity Overdrive: The Road To Reinvention.

At each provisioning-minded dealership, there are at least one or two people who effectively become the provisioning managers for the dealerships.

They are often general managers, general sales managers or used vehicle managers who lead the reinvention of people and processes to achieve a significant change in the dealership’s culture. Over time, everyone becomes focused on ROI and profitability, department “silos” disappear and the dealership’s bottom line looks better than ever.

All of that got me thinking: I haven’t yet seen a provisioning manager job description for a car dealership.

I wondered what one might look like from a different industry. How do other businesses define a role that is, for the moment, largely a nascent collaboration between select, like-minded souls within dealerships?

A quick Google search for “provisioning manager job description” yielded some extremely relevant results. For example, the responsibilities for the provisioning manager position at Cisco Systems struck me as an effective framework for the leadership required to develop a provisioning mindset at dealerships for three reasons:

The scope: The job starts with a broad vision and empowers the individual to reinvent people and processes to achieve it. It also empowers the individual to change people and processes to realize the strategic vision.

That is exactly the scope of the role GMs, GSMs and used-vehicle managers play as they initiate provisioning efforts at their dealerships. They often ask, “Where can we go from here?” and, “How do we get there?” to craft a broad strategy and guide the implementation of day-to-day details.

The degree of collaboration: It’s pretty fair to envision the provisioning manager as someone who knows how to get buy-in and motivate other people. The job requires the person to actively engage multiple departments and get everyone on the same page.

The same is true in dealerships where provisioning is standard operating procedure. When a used car hits the lot, the managers in used vehicles, service, parts, detailing and sales know the next steps.

The backstops: Cisco requires the provisioning manager to provide “second-level incident management support, and ensure incidents are minimized through design, tools and processes.” This strikes me as a fancy way of saying “anticipate problems and have a process in place to prevent them, and use technology whenever possible.”

For dealers, the potential problems in used vehicles are legion – auction purchases, appraisals, online merchandising, reconditioning, pricing and sales processes can all be profitability trouble spots. That’s why provisioning-minded dealers change people and processes, and adopt technology and tools, to ensure every decision drives the maximum profitability of each used vehicle at each stage of its life cycle.

I’m not necessarily advocating that dealers need to create a bona fide provisioning manager position at their dealerships. But I do believe dealers who pursue and perfect a provisioning mindset will outpace other dealers who are still stocking cars.

BY DALE POLLAK

I N D U S T RY N E W S

Stars GPSWe are pleased to include Stars GPS as an OIADA Branded Provider of vehicle tracking and recovery solutions for our industry. Stars GPS specializes in providing the best technology with personal service, training and support for the independent and franchise dealership. For more information, go to www.stars-gps.com, email [email protected] or call 877-828-4770.

David L. Nunn, Esq.David L. Nunn heads the Edmond, Okla., law office of David L. Nunn, P.C., which serves the greater metro Oklahoma City area. We are pleased to include Mr. Nunn as an OIADA Select Provider of legal services to the industry. David L. Nunn, P.C. is located at 17 East First Street, Edmond, OK 73034. He can be reached at 405-330-4053 or by fax at 405-330-8470. Mr. Nunn is included as a Select Provider not because he asked to be, but because we know the quality of service that he provides to dealers.

B & C Auto Transport, Inc.B & C Auto Transport takes pride in providing fast, dependable transport service to auto dealers nationwide. We are pleased to include B & C Auto Transport, Inc. as an OIADA Select Provider of transport services for auto dealers nationwide because of its record of providing outstanding service at reasonable rates. Call 405-381-0114 or 405-641-6057 (cell), or email [email protected].

Have you kept up to date with the rules and laws that could affect your dealership?

The start of the New Year is the perfect time for a quick compliance refresher, and the Bureau of Consumer Protection’s Automobiles site is a quick and comprehensive reference source.

Designed with dealers in mind, the site has compiled a variety of resources discussing things like the Used Car Rule, labeling guidelines for alternative fueled vehicles, and how the Privacy Rule applies to auto dealers.

Examples of dealer resources available on the site include:

• A Dealer’s Guide to the Used Car Rule, which provides valuable compliance tips

• Copies of the required Buyers Guide, in English and Spanish

• Fillable versions of the English and Spanish Buyers Guides.

VISIT HTTP://BUSINESS.FTC.GOV/SELECTED-INDUSTRIES/AUTOMOBILES FOR MORE INFORMATION.

KEEPING UP WITH COMPLIANCE

R U L E S A N D L AW S

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1 Wyrick, Charles [email protected] D 405 521-5561 5212 Burrage, Sean [email protected] D 405 521-5555 5223 Shaw, Wayne [email protected] R 405 521-5574 513A4 Allen, Mark [email protected] R 405 521-5576 4155 Ellis, Jerry [email protected] D 405 521-5614 5356 Brecheen, Josh [email protected] R 405 521-5586 513A7 Boggs, Larry [email protected] R 405 521-5604 513B8 Ballenger, Roger [email protected] D 405 521-5588 527B9 Garrison, Earl [email protected] D 405 521-5533 528A10 Fields, Eddie [email protected] R 405 521-5581 41611 Shumate, Jabar [email protected] D 405 521-5598 52112 Bingman, Brian [email protected] R 405 521-5528 42213 Paddack, Susan [email protected] D 405 521-5541 533A14 Simpson, Frank [email protected] R 405 521-5607 513B15 Standridge, Rob [email protected] R 405 521-5535 42916 Sparks, John [email protected] D 405 521-5553 529B17 Sharp, Ron [email protected] R 405 521-5539 53318 David, Kim [email protected] R 405 521-5590 428B19 Anderson, Patrick [email protected] R 405 521-5630 417A20 Griffin, A J [email protected] R 405 521-5628 52021 Halligan, Jim [email protected] R 405 521-5572 42522 Johnson, Rob [email protected] R 405 521-5592 41323 Justice, Ron [email protected] R 405 521-5537 42324 Sykes, Anthony [email protected] R 405 521-5569 42625 Mazzei, Mike [email protected] R 405 521-5675 42426 Ivester, Tom [email protected] D 405 521-5545 529A27 Marlatt, Bryce [email protected] R 405 521-5626 42728 Coates, Harry [email protected] R 405 521-5547 53129 Ford, John [email protected] R 405 521-5634 424A30 Holt, David [email protected] R 405 521-5636 411A31 Barrington, Don [email protected] R 405 521-5563 515A32 Bass, Randy [email protected] D 405 521-5567 528B33 Dahm, Nathan [email protected] R 405 521-5551 533A34 Brinkley, Rick [email protected] R 405 521-5566 51235 Stanislawski, Gary [email protected] R 405 521-5624 427A36 Brown, Bill [email protected] R 405 521-5602 413A37 Newberry, Dan [email protected] R 405 521-5600 41438 Schulz, Mike [email protected] R 405 521-5612 41839 Crain, Brian [email protected] R 405 521-5620 417B40 Branan, Cliff [email protected] R 405 521-5543 417C41 Jolley, Clark [email protected] R 405 521-5622 51942 Aldridge, Cliff [email protected] R 405 521-5584 41243 Brooks, Corey [email protected] R 405 521-5522 52044 Shortey, Ralph [email protected] R 405 521-5557 514A45 Loveless, Kyle [email protected] R 405 521-5618 533C46 McAffrey, Al [email protected] D 405 521-5610 53347 Treat, Greg [email protected] R 405 521-5531 534B

CONTACT YOURLEGISLATORS

OKLAHOMA SENATE

DISTRICTS 2011

OIADA works on behalf of all Oklahoma used dealers at the state legislature.

The current session convened Jan. 8, 2013. Besides monitoring bills and actions submitted by others, OIADA is promoting legislation to secure relief for dealers from fraudulent Title 42 Possessory Liens. We encourage you to contact your state legislators and let them know you support this effort to end fraud and abuse.

OKLAHOMA STATE SENATE & STATE REPRESENTATIVES2300 N Lincoln Blvd Room Number Oklahoma City OK 73105

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STATE OF OKLAHOMA 2012-2020 HOUSE DISTRICTS

1 Wyrick, Charles [email protected] D 405 521-5561 5212 Burrage, Sean [email protected] D 405 521-5555 5223 Shaw, Wayne [email protected] R 405 521-5574 513A4 Allen, Mark [email protected] R 405 521-5576 4155 Ellis, Jerry [email protected] D 405 521-5614 5356 Brecheen, Josh [email protected] R 405 521-5586 513A7 Boggs, Larry [email protected] R 405 521-5604 513B8 Ballenger, Roger [email protected] D 405 521-5588 527B9 Garrison, Earl [email protected] D 405 521-5533 528A10 Fields, Eddie [email protected] R 405 521-5581 41611 Shumate, Jabar [email protected] D 405 521-5598 52112 Bingman, Brian [email protected] R 405 521-5528 42213 Paddack, Susan [email protected] D 405 521-5541 533A14 Simpson, Frank [email protected] R 405 521-5607 513B15 Standridge, Rob [email protected] R 405 521-5535 42916 Sparks, John [email protected] D 405 521-5553 529B17 Sharp, Ron [email protected] R 405 521-5539 53318 David, Kim [email protected] R 405 521-5590 428B19 Anderson, Patrick [email protected] R 405 521-5630 417A20 Griffin, A J [email protected] R 405 521-5628 52021 Halligan, Jim [email protected] R 405 521-5572 42522 Johnson, Rob [email protected] R 405 521-5592 41323 Justice, Ron [email protected] R 405 521-5537 42324 Sykes, Anthony [email protected] R 405 521-5569 42625 Mazzei, Mike [email protected] R 405 521-5675 42426 Ivester, Tom [email protected] D 405 521-5545 529A27 Marlatt, Bryce [email protected] R 405 521-5626 42728 Coates, Harry [email protected] R 405 521-5547 53129 Ford, John [email protected] R 405 521-5634 424A30 Holt, David [email protected] R 405 521-5636 411A31 Barrington, Don [email protected] R 405 521-5563 515A32 Bass, Randy [email protected] D 405 521-5567 528B33 Dahm, Nathan [email protected] R 405 521-5551 533A34 Brinkley, Rick [email protected] R 405 521-5566 51235 Stanislawski, Gary [email protected] R 405 521-5624 427A36 Brown, Bill [email protected] R 405 521-5602 413A37 Newberry, Dan [email protected] R 405 521-5600 41438 Schulz, Mike [email protected] R 405 521-5612 41839 Crain, Brian [email protected] R 405 521-5620 417B40 Branan, Cliff [email protected] R 405 521-5543 417C41 Jolley, Clark [email protected] R 405 521-5622 51942 Aldridge, Cliff [email protected] R 405 521-5584 41243 Brooks, Corey [email protected] R 405 521-5522 52044 Shortey, Ralph [email protected] R 405 521-5557 514A45 Loveless, Kyle [email protected] R 405 521-5618 533C46 McAffrey, Al [email protected] D 405 521-5610 53347 Treat, Greg [email protected] R 405 521-5531 534B

1 McDaniel, Curtis [email protected] D (405) 557-7363 539A2 Bennett, John [email protected] R (405) 557-7315 3263 Lockhart, James [email protected] D (405) 557-7413 5054 Brown, Mike [email protected] D (405) 557-7408 5455 Cox, Doug [email protected] R (405) 557-7415 4106 Hoskin, Chuck [email protected] D (405) 557-7319 5097 Glenn, Larry [email protected] D (405) 557-7399 5028 Sherrer, Ben [email protected] D (405) 557-7364 5009 Quinn, Marty [email protected] R (405) 557-7380 300-C10 Martin, Steve [email protected] R (405) 557-7402 33011 Sears, Earl [email protected] R (405) 557-7358 432-D12 Rousselot, Wade [email protected] D (405) 557-7388 50713 McPeak, Jerry [email protected] D (405) 557-7302 50314 Hulbert, Arthur [email protected] R (405) 557-7310 15 Cannaday, Ed [email protected] D (405) 557-7375 54616 Shoemake, Jerry [email protected] D (405) 557-7373 50617 Renegar, Brian [email protected] D (405) 557-7381 50418 Condit, Donnie [email protected] D (405) 557-7376 500A19 Pruett, R. C. [email protected] D (405) 557-7382 50120 Cleveland, Bobby [email protected] R (405) 557-7308 21 Roberts, Dustin [email protected] R (405) 557-7366 31922 McCall, Charles A. [email protected] R (405) 557-7412 23 O’Donnell, Terry [email protected] R (405) 557-7379 24 Kouplen, Steve [email protected] D (405) 557-7306 54125 Thomsen, Todd [email protected] R (405) 557-7336 40826 Wood, Justin F. [email protected] R (405) 557-7345 27 Cockroft, Josh [email protected] R (405) 557-7349 31528 Newell, Tom [email protected] R (405) 557-7372 328-B29 McNiel, Skye [email protected] R (405) 557-7353 433-B30 McCullough, Mark [email protected] R (405) 557-7414 435-A31 Murphey, Jason [email protected] R (405) 557-7350 43732 Smalley, Jason [email protected] R (405) 557-7368 33 Denney, Lee [email protected] R (405) 557-7304 43634 Williams, Cory T. [email protected] D (405) 557-7411 54435 Casey, Dennis [email protected] R (405) 557-7344 300B36 Roberts, Sean [email protected] R (405) 557-7322 32237 Vaughan, Steve [email protected] R (405) 557-7355 30538 DeWitt, Dale [email protected] R (405) 557-7332 43339 Cooksey, Marian [email protected] R (405) 557-7342 40940 Jackson, Mike [email protected] R (405) 557-7317 44141 Enns, John [email protected] R (405) 557-7321 43442 Billy, Lisa J. [email protected] R (405) 557-7365 302-A43 Schwartz, Colby [email protected] R (405) 557-7352 32944 Virgin, Emily [email protected] D (405) 557-7323 50045 Stiles, Aaron [email protected] R (405) 557-7386 33846 Martin, Scott [email protected] R (405) 557-7329 33547 Osborn, Leslie [email protected] R (405) 557-7333 303-B48 Ownbey, Pat [email protected] R (405) 557-7326 30149 Hardin, Tommy [email protected] R (405) 557-7383 32350 Johnson, Dennis [email protected] R (405) 557-7327 43551 Biggs, Scott R. [email protected] R (405) 557-7405

52 Ortega, Charles [email protected] R (405) 557-7369 53753 McBride, Mark [email protected] R (405) 557-7346 54 Wesselhoft, Paul [email protected] R (405) 557-7343 33255 Russ, Todd [email protected] R (405) 557-7312 30056 Perryman, David L. [email protected] D (405) 557-7401 539A57 Wright, Harold [email protected] R (405) 557-7325 400-B58 Hickman, Jeffrey W. [email protected] R (405) 557-7339 41159 Sanders, Mike [email protected] R (405) 557-7407 53660 Fisher, Dan [email protected] R (405) 557-7311 61 Blackwell, Gus [email protected] R (405) 557-7384 305-A62 Shannon, T. W. [email protected] R (405) 557-7374 40163 Armes, Don [email protected] R (405) 557-7307 44064 Coody, Ann [email protected] R (405) 557-7398 43965 Dorman, Joe [email protected] D (405) 557-7305 54066 Nollan, Jadine [email protected] R (405) 557-7390 32067 Peterson, Pam [email protected] R (405) 557-7341 30368 Mulready, Glen [email protected] R (405) 557-7340 33869 Jordan, Fred [email protected] R (405) 557-7331 33370 Walker, Ken [email protected] R (405) 557-7359 71 Henke, Katie [email protected] R (405) 557-7361 72 Scott, Seneca [email protected] D (405) 557-7391 53973 Matthews, Kevin [email protected] D (405) 557-7406 510B74 Derby, David [email protected] R (405) 557-7377 33775 Kirby, Dan [email protected] R (405) 557-7356 33476 Brumbaugh, David [email protected] R (405) 557-7347 329B77 Proctor, Eric [email protected] D (405) 557-7410 540A78 McDaniel, Jeannie [email protected] D (405) 557-7334 50879 Watson, Weldon [email protected] R (405) 557-7330 30280 Ritze, Mike [email protected] R (405) 557-7338 300-A81 Grau, Randy [email protected] R (405) 557-7360 32482 Turner, Mike [email protected] R (405) 557-7357 83 McDaniel, Randy [email protected] R (405) 557-7409 302-B84 Kern, Sally [email protected] R (405) 557-7348 30485 Dank, David [email protected] R (405) 557-7392 43386 Fourkiller, William [email protected] D (405) 557-7394 54287 Nelson, Jason [email protected] R (405) 557-7335 30188 Floyd, Kay [email protected] D (405) 557-7396 510B89 Hamilton, Rebecca [email protected] D (405) 557-7397 51090 Echols, Jon [email protected] R (405) 557-7354 91 Reynolds, Mike [email protected] R (405) 557-7337 301-B92 Morrissette, Richard [email protected] D (405) 557-7404 54393 Christian, Mike [email protected] R (405) 557-7371 537-C94 Inman, Scott [email protected] D (405) 557-7370 54895 Joyner, Charlie [email protected] R (405) 557-7314 33696 Moore, Lewis H. [email protected] R (405) 557-7400 329-A97 Shelton, Mike [email protected] D (405) 557-7367 53998 Trebilcock, John [email protected] R (405) 557-7362 40499 Pittman, Anastasia [email protected] D (405) 557-7393 510100 Hall, Elise [email protected] R (405) 557-7403 321101 Banz, Gary W. [email protected] R (405) 557-7395 406

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COMPANY NAME CITY

3-N-1 Auto Group, Inc. Quanah Newman Nicoma Park Theresa L. Ingmire Miranda MoodyBattison Chev Buick GMC Used Cars Michael Terry Duncan HGH Auto Group, LLC Four Horsemen Auto Group, LLCBattison Chry Dodge Jeep Ram Used HGH Auto Group, LLC Duncan Four Horsemen Auto Group, LLC Michael Terry*Bowen Auto Sales Randal E. Bowen Oklahoma City(Owner, Randal E. Bowen, is a resident of Kingston, OK)**C & K Auto Sales Yvonne Kliner Locust Grove(Felony conviction is over 20 years old)Car Sales, LLC Glenn George Oklahoma City Roy Michael ManleyCentral Auto Group, LLC Gholamreza Hosseinzadeh Oklahoma City Mehdi MohammadzadehColeman Auto Sales Cody Coleman ArdmoreCowboys Used Cars Lonnie Nichols Oklahoma CityCredit World Auto Sales/Grove Gregory S. Houck GroveDavid Stanley Chevrolet of Norman David Stanley NormanDollar Rent-A-Car Vicki Vaniman Tulsa Darren Arrington**Duncan Auto Group Carl Duncan AntlersFleetwood Motors John Vance Guthrie Megan Vance Ochs Travis HawkFreedom Motors Tabitha Leonhart Duncan Todd Mikel Crystal MikelFrontier Chevrolet co. Gerald Scott El Reno Susan ScottFrontier Motor Co. Susan Scott Gerald ScottHi-Tech Motors, LLC II Maher Asfour TulsaHudiburg Nissan, LLC David Hudiburg Oklahoma City Donna H. Dodson Paula H. Tate Steve HudiburgJ & S Auto Sales, LLC Steven Killman Bixby Justin ReichlJackie Pemberton Motors, LLC John ‘Jackie’ Pemberton Oklahoma City Karen PembertonJames Hodge Ford, Inc. Jeff Williams Idabel Lynn WrightJames Hodge Ford-Lincoln-Merc Jack Hodge Muskogee Tamara HodgeJames Hodge Hyundai, Inc. Jack Hodge Tamara HodgeJG Autosales & Bodyshop, LLC Sara Garcia TulsaJim Wheeler’s Auto Sales Jim Wheeler Tulsa Tony SteelmanJohn Vance Motors, Inc. Megan Vance Ochs Guthrie Travis Hawk John T. VanceKiamichi Chevrolet-Oldsmobile Jack Hodge Broken Bow Sheila RichbourgLowest Price Auto Parts & Sales Mohammad Momennia Oklahoma CityLumpy’s Auto Sales James Leonard Oklahoma City Lawrence Kevin HallLuxury Motors Rita Mouchantaf TulsaMid Town Preowned Cars & Trucks Ben Armstrong Tulsa Jesse WebbMotorwerx, LLC Eric Paysnoe Moore Stephen Soroosh

COMPANY NAME CITY

Nissan of Muskogee, LLC Keith Haney Muskogee Willard Reynolds Wayne ClineOld 33 Auto Sales & Salvage, Inc. Alan Degiacomo Chouteau Barry Chupp Marion NicholsOwl Creek Motors Alton Nowlin PaoliPace Pickup Parts & Sales, LLC Kenneth Alan Hilburn Meeker James W. ‘Jay’ Larimore Amanda Jilian LarimorePrecision Motors, LLC Maxwell Asare TulsaPremier 1 Auto Sales Mohamad Fejley TulsaRandall Reed Ford Randall L. Reed Oklahoma City PFPPGP, Inc. World Class AutomotiveSelectrucks of Oklahoma City John Camile Miciotto, Jr. Oklahoma City Chinta Hari Darcie Bowen Miciotto Jeffrey W. BowenSelectrucks of Tulsa Chinta Hari Tulsa John C. Miciotto, Jr. Charles K. Bowen John PruittSpradling Motors Don Frey Wagoner David A. SpradlingThunder City Motors, LLC Myra Kaufman Edmond Wood Maxwell Kaufman Dale Ray SchwartzToyota of Muskogee Rick Hamm Muskogee Jack HodgeUncle Kenny’s Pre-Owned Autos Kenneth Deitrick Pryor Clinton MarshallUsed Car City, LLC Mark Croucher Tulsa Dennis Larson Judge Morris Brian WaddellVance Chev, Buick, GMC, Inc. Megan Ochs Perry Travis Hawk John T. VanceVance Country Ford Megan Vance Ochs Guthrie Travis Hawk John VanceVIP Auto, Inc. David F. Johnson, III Carnegie Wyatt Leland JonesVIP Auto, Inc. II David F. Johnson, II Oklahoma City Wyatt JonesWashburn Ford Lincoln Drue Washburn Alva Kirk Washburn Cory WashburnWheelz Motor Company, LLC Michelle Simon Drumright Dale SimonYesterday’s Classic Cars, LLC Robert Theser Colcord Rebecca Lanell Theser

*Special circumstances ** Motion to approve application where applicant has a felony conviction

Wholesale Dealer LicensesCOMPANY NAME CITY

A & N Motors Nazem Alachkar TulsaThe Hudson Company Auto Brokers Toni Leonard Oklahoma City James Leonard

As listed in the Agenda for the Used Motor Vehicle and Parts Commission Regular Meeting of December 11, 2012, the following applicants were considered for issuance of used motor vehicle dealer licenses and wholesale vehicle dealer licenses. The applications were approved pending compliance with state licensing laws and rules, and subject to final approval by Commission staff.

LICENSE APPLICANTS APPROVED

Used Dealer Licenses

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November 2012 COMPANY NAME JOINED CITY

R Howerton Auto Sales Brett Howerton 1993 StillwaterR Reynolds Ford, Inc. Dale Daniels 2010 NormanR James Hodge Ford, Inc. James E. Hodge 2010 IdabelR Danny Beck Chevrolet, Inc. Danny Beck Chevrolet, Inc. 2009 TulsaR H.O.W. Foundation of Ok, Inc. Ollie Treat 1993 TulsaR Bolen Used Cars, Inc. Don Bolen 1994 Oklahoma CityR Burrel Matlock’s Auto Mart Matlock Enterprises, Inc. 1993 Warr AcresR T & D Motor Company, Inc. Tony D. Engel 1993 BethanyR Lee Auto Sales Chan Lee 2010 McAlesterR John Thomas Auto Sales, Inc. John Thomas 2009 CordellR Boyd Performance Classic Cars, LLC Danny E Boyd 1997 PorterR R & E Exotic Autos, LLC Eric Gove 2010 NewkirkR Greenwood Motors Rick Gore 2010 Oklahoma CityN Tulsa Motorworks, LLC Scott martin 2012 TulsaR Bryan’s Car Corner, Inc. Bryan B. Bingham 2004 ChickashaR Family Cars & Trucks, Inc. Todd Mikel 2004 DuncanR Morris Motorsports Mark Morris 2009 Chickasha

OIADA NEW AND RENEWAL MEMBERSThe following list includes members who joined or renewed their OIADA/NIADA membership during November 2012. We express our sincere

appreciation for all the members of OIADA, and we extend an invitation to dealers who are not members. A membership application can be found elsewhere in this publication.

We urge you to be an active part of maintaining a strong and effective used car industry voice in the legislative and regulatory environment. With the current Administration’s attitude toward the motor vehicle sales industry, we need that voice more than ever!

Chris Goad, President

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Join OIADA online at http://www.e-oiada.com/join

OIADA Can Help MakeYour Path

Certain.Oklahoma Independent Automobile

Dealers Association

For $295 You Get Membership In Both OIADA and NIADAPlus All Of The Following Benefits And Even More That Are Not Listed!

Programs for Extra Profit• Access to Insured Warranty & Service Agreements• How to Structure a Related Finance Company• Networking Opportunities With Other Dealers

Programs to Help Keep Profit• NADA Guide Books – single copy or subscription•• Black Book Guide Books – single copy or subscription• Dealer Bonds - Salesmen’s Bonds• Discount on complete line of State approved Business Forms• Discount on Dealer supplies National Dealer Network Skip Tracing Contacts

PublicPublications• OIADA Magazine/Newsletter• Federally Required Safeguards Policy Document• Federally Required Red Flags Rules Policy Documents• IRS Audit Technique Guide For the Independent Used Car Dealer• Current Industry Information•• Legislative Alerts• NIADA Monthly Magazine• NIADA Annual Buyer’s Guide

Professional Development• Dealer Educational Seminars• Certified Master Dealer Program• Regional Professional Development Compliance Seminars• Free Access to NIADA.tv Training at Your Business • Access to IndependentDealer.com where dealers go for answers answers• NIADA Membership and Window Decal• OIADA “Symbol of Integrity” Logo, Window Decal and Membership Plaque• NIADA Annual Convention and Trade Show• Individual Assistance by phone• Code of Ethics

RRepresentation• State Lobby and Consultant Services• State Legislative and Regulatory Tracking and Reporting• Federal Lobby and Consulting Services• Federal Legal, Legislative and Regulatory Tracking and Reporting• Used Motor Vehicle and Parts Commission Liaison•• Oklahoma Tax Commission Liaison• Oklahoma Department of Consumer Credit Liaison• Full Time Professional Staff to assist you when problems arise

Members Can Also Sign Up For Automotive Dealers Rewards From

Automotive Dealers Resource Of Oklahoma and Earn Money Saving Coupons For

Their Future Purchases.Visit http://rewards.buyadr.com/

Automotive Dealers Rewards is open to Members and Non-Members Who Purchase Automotive Dealers Rewards is open to Members and Non-Members Who Purchase From ADR of Oklahoma

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U S E D CA R D E A L E R S , C O N S U M E R G RO U P S , I N D U S T RY A S S O C I AT I O N S A N D G OV E R N M E N T AG E N C I E S F I L E D C O M M E N T S A B O U T H OW T H E U S E D CA R R U L E I S WO R K I N G .

USED CAR RULE CHANGES: HAVE YOU WEIGHED IN?Dealers are familiar with what it takes

to comply with the FTC’s Used Car Rule, but are you aware of the key role you play in drafting the regulations that apply to your industry?

Officially known as the Used Motor Vehicle Trade Regulation Rule (though only its mother calls it that), the rule requires dealers to display a Buyers Guide on used cars offered for sale.

But FTC regulations aren’t written in stone. To ensure that rules keep up with the times, every 10 years or so the FTC revisits what’s on the books. Is there a continuing need for the rule? Have there been changes to the technological or regulatory landscape that need to be addressed?

As part of that ongoing review, the FTC asked for feedback about the future of the Used Car Rule – and boy, did we get an earful. Used car dealers, consumer groups, industry associations and government agencies filed comments about how the Used Car Rule is working.

From what we heard, a lot has changed in how people shop for used cars and how you do business. Based on what we heard, the FTC has proposed modifications to the Buyers Guide and is again asking you to weigh in on suggested revisions.

What’s under consideration? You’ll want to read the complete document on the Automobiles page of www.business.ftc.gov, but as the FTC explained in a Dec. 4 announcement, it’s proposing four primary changes to the Buyers Guide.

Adding a reference to how consumers can get information about a vehicle’s history: There’s more information available these days about a vehicle’s history and the FTC wants to help empower consumers without burdening businesses. Therefore, the agency is proposing to add a statement

to the Buyers Guide encouraging consumers to seek vehicle history information and directing them to a new FTC website for more information.

As the FTC notice makes clear, “Dealers would not be required to obtain vehicle histories or to display specific vehicle history information on the proposed revised Buyers Guide. The Buyers Guide would continue to recommend to consumers that they protect themselves by obtaining an independent inspection before making a purchase.”

Revising the list of systems on the back of the Buyers Guide: Dealers are familiar with the list of systems included on the Buyers Guide, and the FTC thinks it’s a good idea to keep it. It helps consumers compare warranties on different cars or from different dealers – and it’s a handy checklist for the mechanical and safety systems prospective buyers might want to have inspected. But the FTC wants to revise the list to include catalytic converters and airbags.

Adding a reference to the Spanish-language Buyers Guide: The Used Car Rule already requires dealers to display Spanish-language Buyers Guides when they conduct sales in Spanish. But to ensure the Spanish guide reaches its intended audience, the FTC is proposing to add a sentence in Spanish on the face of the English-language Buyers Guide, alerting Spanish-speaking consumers that they can ask for a copy in Spanish.

Adding more information about warranties: The FTC is proposing to place boxes on the back of the Buyers Guide where dealers will have the option to say whether the manufacturer’s warranty still applies, the manufacturer’s used vehicle warranty – such as a certified

pre-owned warranty – applies, or some other used vehicle warranty applies.

The FTC would like your feedback on those suggested revisions, including your thoughts about the kind of information that should be available on any new FTC site dealing with vehicle histories.

But that’s not all the agency is asking for this time around. The FTC also would like to hear what you have to say about Internet sales of used vehicles. Have you spotted deceptive practices? If deceptive practices are prevalent, are there regulatory steps the FTC should consider taking?

The deadline for comments is Feb. 11. By the way, the days of submitting documents in triplicate are over. It’s easy to file a comment online.

In addition, the FTC announced a final rule that makes some technical corrections to the Spanish translation of the Buyers Guide. That portion of the rule takes effect Feb. 11, so you’ll want to make sure your dealership is using the new version of the Spanish-language Buyers Guide, available on the Automobiles page of www.business.ftc.gov.

Editor’s note: NIADA met with the FTC attorneys responsible for oversight of the Used Car Rule in December to discuss the proposed changes, and after soliciting input from its members, the association is preparing comments to submit to the FTC. If you have any additional comments or ideas about the rule, please contact NIADA’s Georgia Brown at 1-800-682-3837 or [email protected].

BY LESLEY FAIR LESLEY FAIR IS A SENIOR ATTORNEY WITH THE FEDERAL TRADE COMMISSION’S BUREAU OF CONSUMER PROTECTION AND HAS REPRESENTED THE FTC IN DECEPTIVE ADVERTISING INVESTIGATIONS. SHE NOW SPECIALIZES IN BUSINESS EDUCATION AND COMPLIANCE.

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U S E D CA R D E A L E R S , C O N S U M E R G RO U P S , I N D U S T RY A S S O C I AT I O N S A N D G OV E R N M E N T AG E N C I E S F I L E D C O M M E N T S A B O U T H OW T H E U S E D CA R R U L E I S WO R K I N G .

USED CAR RULE CHANGES: HAVE YOU WEIGHED IN?

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oklahoma dealers resource feb 13

Documents

dealers auto auction

consultantmike morgan

programmersteve morgan

odell morgan

members of oiada

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