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Convention Review

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

ALSO You Are Invited to Join IIADA PLUS Want to Increase Your Sales? Sell to Women Buyers

THE CARLAWYER

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PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

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

STREET SMARTPRSRT Standard

U.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

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

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ADVERTISERSINDEXADESA................................................................................ 7AutoTrader.com .................................................. Back CoverCars.com ................................................ Inside Front CoverChase................................................................................14Manheim.com ...................................................................15Manheim Minneapolis ........................................................ 5Protective ........................................................................... 9ShipCarsNow ...................................................................13SmartAuction ....................................................................11TD Auto Finance ...................................... Inside Back Cover

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] SMART IS PUBLISHED 6 TIMES PER YEAR BY THE NATIONAL IN-DEPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPO-RATION, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203; PHONE 817-640-3838. PERIODICALS POSTAGE PAID AT DALLAS, TX AND AT ADDITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO NIADA STATE PUBLICATIONS, 2521 BROWN BLVD., ARLINGTON, TX 76006-5203. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECES-SARILY REPRESENT THE VIEWS OF STREET SMART OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEM-BERS OF NIADA, DOES NOT CONSTITUTE AN EDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT© 2011 BY NIADA SERVICES, INC. ALL RIGHTS RESERVED.

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

MAGAZINECONTENTS 6 You Are Invited to Join IIADA 12 The CARLAWYER 14 Want to Increase Your Sales? Sell to

Women Buyers

FOR INFORMATION ON HOW TO BECOME A MEMBER PLEASE CONTACT JUDY WILSON IIADA • 409 EAST MARKET • PANORA, IA 50216(641) 755-4177 • [email protected]

BOARD OF D IRECTORSPRESIDENTDouglas Livy, Jr.Quality Motors of Ames, Ltd.705 S. Duff AvenueAmes, Iowa 50010Ph: 515-232-1780

CHAIRMAN OF THE BOARDLouise Cordes Jim Cordes Motors, Inc.104 E. Main St., P.O. Box 68New London, Iowa 52645 1-319-367-2271

VICE PRESIDENTDavid A. FarmerDavid A. Farmer, Inc.1613 FranklinCenter Point, Iowa 522131-319-848-2432

TREASURERJudy Wilson409 E. Market StreetP.O.Box 337 Panora, Ia. 50216Ph: 641-755-4177

REGIONAL REPRESENTATIVESMerrill HitchcockMerrill’s Garage317 N. 8th StreetWinterset, Ia. 50273Ph: 515-462-1683

Roger PoulsenThe Car Guys1301 S.W. 7th StreetAtlantic, Ia. 50022Ph: 712-243-6915

Robert PippertPippert Cars & Trucks2047 Highway T-47P.O. Box BGladbrook, Iowa 50635641-473-3121

Clay WinterboerCarroll Car Credit Co.409 E. 6th St., Box 805Carroll, Ia. 51401Ph: 712-792-0140

Jim HarbachJ’s Auto945 E. MainManchester, Ia. 52057Ph: 563-927-2811

Doug WilsonLake Country Auto409 East Market St.P.O. Box 341Panora, Iowa 50216641-755-3048

Linda KilgoreKilgore’s Enterprises Inc.501 E. TownlineCreston, IA 50801641-782-5512

Jeff SchneiderPocahontas Sales & Service205 E. Elm Ave., P.O. Box 66Pocahontas, IA 50574712-335-4470

Kim NelsonNelson Automotive LLC300 Sandpiper Court P.O. Box 466Polk City, IA 50226515-984-9600

ADMINISTRATIVE OFFICES409 East Market StreetP.O. Box 337Panora, Iowa 50216Ph: 641-755-4177Fax: 641-755-3247Email: [email protected] Free: 866-962-9202

IIADAOFFICE

THIS TELEPHONE LINE RECEIVES NUMEROUS CALLS DURING THE DAY, SO AN EMAIL ADDRESS HAS BEEN ESTABLISHED WHERE QUESTIONS CAN BE SENT. THE EMAIL ADDRESS IS: [email protected].

The Motor Vehicle Investigations Information Line provides a way for the public to request information, ask questions, or file a complaint related to investigative duties and responsibilities.

This line is the primary point of contact to reach an investigator who is responsible for investigations in a specific area of the State of Iowa. To ensure accurate information is provided, the Motor Vehicle Investigations Information Line is answered by a Motor Vehicle Enforcement Investigator.

The hours of operation are Monday through Friday 8:30 a.m. to 3:30 p.m. As this line receives numerous calls during the day, please leave a message if the line is busy and your call will be returned promptly.

DON’T BE IN THE DARK: KNOW WHERE TO LOOK FOR RECALL INFORMATION ON VEHICLES

Vehicle dealers needing information on factory recalls can visit www.autore-calls.us or find the manufacturer toll free numbers by going to www.autopedia.com/html/HotLinks.html and making contact with the respective automaker.

Know what recalls are impending on vehicles before you purchase them and give your customers peace of mind by checking out possible recalls before you retail the vehicle.

NEW MEMBER BENEF I TS

• You don’t buy a newspaper, you buy the news• You don’t buy life insurance, you buy security for others• You don’t buy glasses, you buy vision• You don’t buy awnings, you buy shade

• You don’t buy membership in IIADA, you buy cooperation of the ablest men and women in your profession with whom you can join hands to accomplish things you could not do alone.

YES, IT COSTS TO JOIN IIADA – BUT IT PAYS TO BELONG – THINK ABOUT IT

Sales • Operations • F&I • Remarketing • Compliance • Legal/Regulatory

• Special Features • Industry Events

PLUS:Automotive Industry News & Special Monthly Programs

FREEDEALER EDUCATION ONLY ON NIADA.TV24/7

www.niada.tv

Dealer Education

INSIDE

Investigations Information Line TOLL FREE: 1-866-908-4636

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Summer is now officially here, it seems like it’s been here for a long time according to the prices at the auctions. Usually we have ups and downs, but it has been an upward trend for a long time. There doesn’t seem to be any down treading in the near future from what I have read in the trade publications. They seem to think supply will remain tight and that, of course, means high prices.

Most of the trade magazines seem to think new vehicle sales will climb steadily upwards and that will help the pre-owned market grow. This isn’t going to happen overnight. You just have to be a good buyer, maybe add another sale during the week to your routine. Sometimes just getting one more vehicle per week can make a big difference in your bottom line. Remember, it’s not what you pay for the vehicle, but what you sell it for that makes the difference in your bottom line.

Don’t forget to check your daily, weekly and monthly expenses. Double-check yearly contracts such as insurance. Get at least three bids. You may save a few dollars or you may save lots of dollars. You can dicker with some of your advertising services such as newspapers, radio stations, TV stations, even your Internet providers. Anything you can save helps your bottom line. It all adds up.

Good selling,Doug Livy, PresidentIIADA

The Iowa DOT would like to remind dealers who need to contact their investigative officer to do so by calling 866-908-4636 or by e-mail at [email protected].

The DOT wants to be notified if and when changes occur at the dealership. The law requires a dealer to “file a written statement with the office of vehicle services at least ten days before any change of name, location, hours, or method of plan of doing business.” A dealer who is proactive in notifying the DOT of these changes, in advance, can avoid difficulties and confusion later. Forms may be found at www.iowadot.gov/mvd/ovs/misc.htm; for assistance, call 515-237-3110.

The Iowa DOT would appreciate dealers who need a permit for a fair or show to apply at least 10 days before the event. This is applicable to new motor vehicle dealers and new travel trailer dealers only. Forms can be found at: www.iowadot.gov/mvd/ovs/misc.htm.

In mid-June, Gov. Terry Branstad issued a proclamation which would allow auto dealers, recyclers and travel trailer dealers to move their vehicles and inventory and business location for 30 days due to flooding along the Missouri River. The proclamation applied to dealers in Fremont, Harrison, Mills, Monona, Pottawattamie and Woodbury counties.

Details and forms for a temporary extension lot license, without cost, can be found at www.iowadot.gov/mvd/ovs/misc.htm. You also may call 515-237-3110 to obtain information specific to your type of dealership. As of this writing, we aren’t sure if this procedure will be extended beyond 30 days, and it could depend upon circumstances as they arise.

NEWS FROM THE IOWA DOT PRESIDENTS LETTERM

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ADESA DES MOINES1800 Gateway DriveGrimes, IA 50111(515) 986-1200Fax: (515) 986-1201www.adesa.comGeneral Manager: Jeff LisleFleet/Lease Manager: Kevin ParmenterConsignment Sale every Tuesday at 9:30 a.m.Fleet/Lease Sale Tuesday 10:30 a.m.

ADESA KANSAS CITY101 S.W. Oldham RoadLee’s Summit, MO 64081(816) 525-1100(800) 950-2350Fax: (816) 525-4714General Manager: Harold ChapmanDealer Sales Manager: Tamara Kunkel Tuesday 9:30 a.m. ADESA MINNEAPOLIS18270 Territorial RoadDayton, MN 55369763-428-8777763-428-8701Sale: Tuesday, 10 a.m.www.adesa.com ADESA SIOUX FALLS46893 271st StreetP.O. Box 218Tea, SD 57064(605) 368-5364 Fax: (605) 368-2808 General Manager: Kurt Zabel Wednesday Sale 10:00 a.m. IAAI SALVAGE SALE EVERY OTHER WEDNESDAY – 8:30 A.M. ADESA WISCONSINW 10415 State Road 33Portage, WI 53901608-742-8245608-742-4415 (f)Tony Manwarren, general managerSale: Thursday, 9:30 a.m.www.adesa.com

DEALERS CHOICE AUTO AUCTION, INC.503 South Wapello RoadMediapolis, IA 52637(319) 394-3510(888) 771-6810Fax: (319) 394-3511www.dcaa.comPresident: Monte DelzellNationwide Transportation:EZ Auto ShoppersSteve Miller – (866) 310-5936Fleet/Lease Manager: Kerri WilkersonConsignment Sale every Tuesday at 6 p.m.Fleet/Lease Sale Tuesday 6 p.m. Group SalesDealer Sales 6 p.m. as scheduled.

DES MOINES AUTO AUCTION1530 S.E. McKinley RoadDes Moines, Iowa 50320(515) 285-8911 Fax: (515)256-9161FRIDAY AT 9:30 A.M. Todd Givant, General Manager GREATER QUAD CITY AUTO AUCTION4015 78th AvenueMilan, Il 61264(309) 787-6300Fax: (309) 787-4541Tuesday 10 a.m. – Thursday – 6 p.m.General Manager: Larry Anderson GREATER ROCKFORD AUTO AUCTION5937 Sandy Hollow RoadRockford, Il 61109(815) 874-7800(800) 830-4722Fax: (815) 874-1325 General Manager: Mark Capriola Wednesday 10 a.m. KCI AUTO AUCTION11101 N. CongressKansas City, MO816-502-3318816-801-8565 (f)Doug DollConsignment Sale: Thursday, 9:30 a.m. www.kciaa.com

MANHEIM ARENA ILLINOISManheim200 West Old Chicago DriveBolingbrook, Il 60440(630) 759-3800(630) 759-9668General Manager: John OlejniczakDealer Sales Manager: Louis Palermo Tuesday 9 a.m. MANHEIM KANSAS CITY3901 North Skiles RoadKansas City, MO 64161(800) 247-7163Fax: (816) 452-2393 General Manager: Peggy SprengerDealer Sales Manager: Kevin Rhoads Wednesday 9:30 a.m. MANHEIM MINNEAPOLIS 8001 Jefferson HighwayMaple Grove, MN 55369-4924(763) 425-7653(800) 622-7653Fax: (763) 493-0310www.minneapolisautoauction.comGeneral Manager: Jerry AmanAssistant General Manager: WJon EisenmannFleet Manager: Tony ManwarrenConsignment Sale every Wednesday at 9:45 a.m. Fleet/Lease Sale Wednesday at 9 a.m. Daimler Chrysler Sale Tuesday 10 a.m. bi-weekly. Ford Sale Thursday 10 a.m. bi-weekly. Dealer Sale Tuesday Thunder 1 p.m. weekly (under $5K). RV Sale last Wednesday 2 p.m. Monthly.

MANHEIM MILWAUKEE561–South Highway 41 - (27th Street)Caledonia, WI 53108(262) 835-4436(800) 662-2947Fax: (262) 835-2684 General Manager: Dennis Worthy Dealer Sales Manager: Kimberly Schure Wednesay 9 a.m. MANHEIM MISSOURI2944 W. Sunshine St.Springfield, MO 65807417-882-1666417-882-0811 (f) Lance Reid, general managerSale: Thursday, 9 a.m.www.manheim.com MANHEIM NORTHSTAR MINNESOTA4908 Valley Industrial Blvd. NorthShakopee, MN 55379(952) 445-5544(888) 445-2277Fax: (952) 445-6773General Manager: Jerry AmanThursday 9 a.m.

MANHEIM OMAHA9201 S. 144th StreetExit 440 off of I-80Omaha, NE 68138(402) 896-8000(800) 218-4192Fax: (402) 896-6758 General Manager: Todd Pfeifer Assist. Gen Manager: Korey Grell Thursday 9:30am. MID-STATE AUTO AUCTION100 Bach Ave.New York Mills, MN218-385-3777218-385-3232 (f)Rob Thompson, presidentSale: Friday, 10 a.m.www.msaanym.com MISSOURI AUTO DEALERS EXCHANGE5912 Mitchell Ave.St. Joseph, MO 64507816-232-7653816-232-3019 (f)Pam and Scott WallConsignment Sale: Wednesday, 5:45 p.m.www.moautoexchange.com NEBRASKA AUTO AUCTION7500 N. 56TH St.Lincoln, NE 68514402-466-8477402-466-7932 (f)www.nebraskaautoauction.comDave LaFleurConsignment Sale: Tuesday, 10:30 a.m.

PLAZA AUTO AUCTION, INC.320 Highway 30 West P.O. Box 147Mt. Vernon, IA 52314(319) 895-6232Fax: (319) 895-6727www.plazaaa.comOwner: Mark GrebOffice Manager: Debbie WelshBecky Thuerauf: Fleet/Lease AdministrationConnie Van Ginkel: Consignment ManagerConsignment Sale every Wednesday at 6:30pm. Fleet/Lease/Repo Sale Wednesday at 7pm. MANHEIM ST. LOUIS13813 St Charles Rock RoadBridgeton, MO 63044(314) 739-1300(800) 533-5414Fax: (314) 298-3347 General Manager: Mike Goodsell General Sales Manager: Chuck WickleyTuesday 9 a.m. TRI-STATE AUTO AUCTIONJct. Highway 11 & 80P.O. Box 735Cuba City, WI 53807(608) 744-2020 (608) 744-3418(800) 356-0625Fax: (608) 744-7425 Owners/Managers: Gerald and Helen BrogleyThursday 6:30 p.m.

TRI-STATE AUTO AUCTION OF CHICAGO14001 S. KarlovCrestwood, Il 60445(708) 389-4488Fax: (708) 389-4558COO: Gregg Kobel General Manage/Owner: Larry Hero Wednesday 10 a.m.

WEST CENTRAL AUTO AUCTIONP.O. Box 700I-80 Exit 1173277 Ute AvenueWaukee, IA 502 63(515) 987-1700(800) 987-7778Fax: (515) 987-3005www.wcaaonline.comOwner: Frank ScaglioneSales: Phyllis FasbenderConsignment Sale every Thursday at 9:30 a.m.

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YOU ARE INVITED TO JOIN IIADA

This magazine is sent to all used auto dealers in the state of Iowa with the intent of keeping you informed of compliance issues, dealer education classes, new laws at the state and federal level, as well as many other areas of interest within the automotive industry that could be crucial to your business.

Many people contribute to this magazine and IIADA is very appreciative of the support we receive from the Midwest auto auctions and our approved benefit providers.

Perhaps we don’t say often enough “we would enjoy you becoming a member of the association as the benefits are many and ever-changing.” A great effort is put forth by the association, its board and its staff to provide information to all dealers in our state. Our weekly routine involves helping the many dealers who call with problems affecting their dealerships. We always say, “If we don’t know the answers, we will diligently try to find the answer for you and respond in a timely fashion.”

IIADA was started in 1994 with a small group of people who were dedicated to forming an association for used auto dealers in Iowa. This group traveled Iowa inviting dealers to join and many did and are still members today. We believe our membership is the cream of the crop and are the most informed, dealer-savvy men and women in the country. Our members adhere to a code of ethics and work to enhance the image of the used auto dealer by doing what they say and honoring our code of ethics.

By many standards we are not a very old organization compared to others; however, our national organization was established in 1946 and is still going strong today with 20,000 members nationwide. We are a not-for-profit organization, supported primarily by our membership dues. We have by-laws, a board of directors and maintain a full-time office. We staff our office nearly full time – six days a week – so we are here for dealers when they need us.

We offer scholarships to our members’ children and grandchildren and scholarships to your employee’s children both at the state and national level. The dues to this organization do not increase every year – we have been pretty stable at $250 per year annual membership for a number of

years – and that provides you membership in both the Iowa association and NIADA.

Many of the Midwest auto auctions participate within the Auction Coupon Card program, which in itself is worth nearly $2,000 to our members in discounts on buyers and sellers fees at the wholesale dealer-only auto auctions. A lot of dealers think it is a no-brainer to join IIADA because you save so much money.

We are an organization you can depend on day in and day out. Why? It is very simple and it is described very well in the IIADA Code of Ethics.

This organization understands auto dealers of all sizes and our member dealerships come in all sizes and shapes. Some of our members sell hundreds and perhaps thousands of autos per year, but others might sell just a few vehicles, as they might have additional income sources. We understand a great dealer might not have the most beautiful dealership in the state, but might have more repeat customers than he or she knows what to do with; we know not every dealer can afford hundreds of thousands worth of inventory; we understand when a dealership is operated by a husband and wife or father and son or two brothers; we understand what a conventional dealership is and what a Buy Here-Pay Here dealer is.

We also understand retail dealership operations and wholesale operations, too. Those of our members who have been dealers for many years have worked with beginning dealers to help them as they establish their business operations and have unselfishly given much to the dealer community. We listen as our members share information with our counterparts at the auctions and watch the satisfaction they receive from fellow dealers for a little help along the way. We recognize we are all competitors of one another, but friendships will last forever.

We are sharing in this column a little about IIADA and NIADA with the sincere hope you will accept our invitation to be a part of this association and participate in the many things association membership offers. Take a few minutes to look at www.iowaiada.com and www.niada.com. You’ll be amazed at the opportunities your membership will bring. Come on aboard!

CODE OF ETHICS We will have a general duty of integrity, honor and fair dealing toward the general public.

We will comply with all city, county, state and federal laws and shall endeavor to keep ourselves informed of those laws governing our business.

We will not intentionally injure the business reputation of another member or competitor. We will employ truth and accuracy in advertising and selling.

We will stand behind any guarantee given with the sale of a motor vehicle.

We will not perform any act which would bring disrepute to the motor vehicle industry.

We will expose or halt, where found, any scheme designed to deceive or defraud the automobile buying public and aid in prosecuting those guilty of such acts.

We will constantly strive to improve business methods to the end that the public will be better served.

We will encourage the American system of free enterprise.

MISSION STATEMENT The mission of the National Independent Automobile Dealers Association, the only national not-for-profit organization representing the independent motor vehicle industry, is to promote, educate and advance the independent motor vehicle dealer by: • Accumulating, processing and

disseminating information relative to the motor vehicle industry;

• Developing, compiling and providing to the consumer, information which will promote a better understanding of the independent motor vehicle dealers’ place in the economy;

• Providing relevant information to regulatory and lawmaking bodies so that they may have a better understanding of the possible effects of proposed laws, rules and regulations on the consumer and the motor vehicle industry;

• Assisting in the promotion and organization of local, state or regional independent motor vehicle dealer associations; and

• Anticipating, recognizing and responding to current and future issues and needs of the independent motor vehicle industry and the consumer.

HISTORY OF NIADANIADA was founded in 1946 to lobby for the repeal of rationing of tires and automotive parts after World War II. The efforts put forward by the organization under the leadership of founding President Charlie Hillard resulted in the successful repealing of those wartime restrictions by the end of 1947. To learn more about NIADA’s history, visit http://www.niada.com/about.php.

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30 A U G U S T 2 O 1 1 W W W . N I A D A . C O M

Confirmation of success in business can take many forms. Somemight consider the number of years in operation as a goodsign, while others may put stock in steadily improving annual

sales figures. For Scott Allen, confirmation took another form afterhe was named 2011 National Quality Dealer (NQD) of the Yearduring NIADA’s 65th Annual Convention and Expo in June.

“I think it means I’m on the right track,” said the 49-year-oldTexan, who’s owned and operated Auto Land in Haltom City, Texas,since 1991. Allen, a member of Texas IADA and NIADA for 17years, is the sixth NQD from the Lone Star State, and also is a NIADACertified Master Dealer.

“I’m still a little in shockfrom winning the award,” he said.

“I’m absolutely going to takeadvantage of the opportunityand, yes, we are going tobe marketing it heavily.Joe (Lescota, CMD programinstructor) is going to laugh atthis because one of his jokes isgetting a big gorilla and puttingit on your building. Well, I’vegot a reason to put a gorilla onmy building now.”

While Allen isn’t planningto actually rent an inflatable

primate, he definitely wants topromote the honor, albeit in a

tasteful manner.“We’re getting a huge

archway that’s probably 36 feetwide and about 20 feet

high that isgoing to

come

across our entrance,” he said. “It’s going to say ‘Stophere and see why Auto Land is NIADA’s National Quality Dealer ofthe Year.’”

Allen and 19 fellow candidates from across the country werejudged by a Northwood University panel that looked at a variety offactors to make its selection, including contributions to the auto-motive industry and community involvement. The candidates com-pete for the national award after being named as quality dealers bytheir respective state associations.

Involvement may as well be Allen’s middle name. Besidesbeing active in TIADA (he’s the 2011 president elect) and theFort Worth dealer association chapter (where he served as presidentfrom 2006 to 2010), Allen even formed a business association inHaltom City to fight unfair ordinances that threatened his dealershipas well as others.

Working with others, Allen said, is what’s helped him succeed.“I would say there is power in numbers,” he said. “Part of the

thing that got me into forming the Haltom Urban Business Associa-tion and getting involved in the local planning and zoning processand the city council had to do with the fact that we wanted to builda new building.”

City codes prevented such construction, so Allen, other dealersand even a salvage yard owner got together, and then met with otherbusiness owners in the vicinity, too.

They began to join our association, we had weekly meetingsand then we wrote several letters, made appearances at the citycouncil meetings and before we knew it, they decided maybe theyneeded to revisit this when it went from one or two guys who hadto say something about it to over 100,” he said. “Alone, I know Icould’ve never gotten that done.”

Allen, whose dealership stocks more than 75 vehicles dailyand employs eight people, applied the same idea to how he soughtadvice on improving his business.

“Some of it had to do with losing my father in 2003. He wasa real rock for me. We bounced ideas and thoughts off each otheron a regular basis and I really had a void and was missing somethingthere. At that point, I decided I needed to build a better networkof dealer friends to do those same kinds of things I used to dowith my father and it just snowballed,” Allen said. “I thinkvisibility and strength in numbers would be one of the greatestassets that an association like NIADA, TIADA or any automobileassociation can provide.”

Perhaps Allen’s greatest business epiphaniy occurred when hecompleted the CMD program in 2009.

“It had an immediate impact. I went from a guessing game toknowing where I stand,” he said. “The financial part of it was justamazing, such as being able to drill down to the cost of holding avehicle on your lot per day. I never knew how to get formulas or howto put those numbers together to get those.”

Another aspect of the course Allen appreciated was itstimeliness and flexibility.

“I went into this CMD class was when the economy began totank and Joe Lescota, who had an exact regimen for his classes eachtime, right on the very first day, said, ‘OK guys, you’re hurting and Iknow it and I’m going to throw this book out. There are two or threethings that we’re going to have to cover, but we need to drill downand start talking about your businesses and find out what’s goingon,’” Allen said.

As for the NQD award, Allen said his staff was just as thrilledas he was about being chosen for it. “Immediately, they’re using itin their spiels and they think it builds value,” he said, “and it does,in the company and what we do.”

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FEDERAL LAWOn May 16, the Federal Trade

Commission announced that it had completed investigations of nearly 50 automobile dealers across the country to assess their compliance with the FTC’s Rule Concerning Preservation of Consumers’ Claims and Defenses, more commonly known as the “Holder in Due Course” Rule, or, “the Holder Rule”. The FTC’s investigations found compliance with the Holder Rule among auto dealers. The Holder Rule requires dealers to include in their finance contracts a notice that finance companies, banks and others who buy the contracts are subject to the claims and defenses consumers may assert against dealers. Because all of the responding dealers included the required Holder Notice in their finance contracts, the FTC staff is closing its investigations of them. The FTC also reminds dealers that, as a result of the Dodd-Frank Act, as of July 21, 2011, the Holder Rule will require the Holder Notice in finance contracts up to $50,000 in the amount financed.

How good are your privacy safeguarding procedures? On May 3, the FTC announced that it settled charges against two companies – Ceridian Corporation and Lookout Services, Inc. – for claiming they would take reasonable measures to secure the personal information of employees of their business customers, but failed to do so. The alleged misrepresentations about the companies’ data security measures became known to the FTC after security breaches occurred at both companies. The settlements bar misrepresentations by the companies, including misleading claims about the privacy, confidentiality, or integrity of any personal information collected from or about consumers, and require the companies to implement a comprehensive information security program and obtain independent, third-party security audits every other year for 20 years. Ouch!

On May 11, the Treasury Department announced the hiring of senior leadership for the Consumer Financial Protection Bureau - Sendhil Mullainathan will serve as Assistant Director for Research, and Patrice Ficklin will serve as Assistant Director for Fair Lending. The new

Bureau continues to add staff as it gears up to assume its duties as prescribed in the Dodd-Frank Act.

On May 5, the U.S. Justice Department announced a settlement with Citizens Republic Bancorp Inc. and Citizens Bank of Flint, Michigan, resolving allegations of lending discrimination against African-American consumers. The Justice Department charged that CRBC, as the successor to Republic Bank, violated the Fair Housing Act and the Equal Credit Opportunity Act by serving the needs of Detroit’s predominantly white neighborhoods to a significantly greater extent than it served the credit needs of majority African-American neighborhoods. The settlement, which awaits court approval, requires CRBC and Citizens Bank to invest $1,625,000 in matching grants to homeowners to aid in neighborhood stabilization, invest $1,500,000 in a special financing program to increase the amount of credit available to majority African-American areas around Detroit, and spend $500,000 in outreach to potential customers. Citizens Bank also agreed to open a loan production office in a majority African-American area of Detroit. In another federal proceeding involving discrimination in mortgage lending, on April 25, 2011, the Federal Trade Commission announced that its administrator was sending 3,162 refund checks totaling $1,500,000 to Hispanic borrowers allegedly harmed by the discriminatory lending practices of Golden Empire Mortgage, Inc. and Howard Kootstra. The FTC had previously alleged that Golden Empire and Kootstra illegally charged Hispanic consumers higher prices than non-Hispanic white consumers and that these price disparities could not be explained by credit characteristics or underwriting risk. Dealers need to be concerned about discrimination lawsuits based on some of these same theories.

LITIGATIONPotential Financing Sources

Had Permissible Purpose to Access Car Buyer’s Credit Report Where Dealership Applied for Credit on Buyer’s Behalf Without Buyer’s Consent: An individual went to a car

dealership and signed a purchase order for a car. Even though the individual told the dealership she would seek financing on her own, the dealership allegedly applied for credit electronically on her behalf with two finance sources. Both finance sources made inquiries into the individual’s credit and declined to extend her credit. The individual sued the two finance sources for violating, among other statutes, the Fair Credit Reporting Act for accessing her credit report without a permissible purpose. The U.S. District Court for the Western District of Kentucky granted the defendants’ motions to dismiss the complaint. The court noted that both finance sources believed they were acquiring the individual’s credit information in connection with an extension of credit - a permissible purpose - even though the credit application they received was not signed by the individual. See Wells v. Craig & Landreth Cars, Inc., 2011 U.S. Dist. LEXIS 43931 (W.D. Ky. April 21, 2011). [Click Here]

Dealer Engaged in Unauthorized Practice of Law by Charging Fee for Preparing RISCs: Car buyers filed a class action against a car dealership, claiming that the dealership engaged in the unauthorized practice of law and violated the Arkansas Deceptive Trade Practices Act by charging a document preparation fee for preparing retail installment contracts. The trial court ruled in favor of the plaintiffs, and the Arkansas Supreme Court affirmed The high court found that the dealership would have engaged in the unauthorized practice of law by completing legal forms, unless it acted within the following parameters: (1) the buyer declined to employ a lawyer to prepare the documents and authorized the dealership to do so; (2) the forms were approved by a lawyer either before or after the blanks were filled in; (3) the forms were used only for simple retail transactions that arose in the usual course of the dealership’s business; (4) the forms were used only in connection with transactions actually handled by the dealership; (5) the dealership did not charge for filling in the blanks; and (6) the dealership did not give advice or opinions as to the legal rights of the

BY T H O M A S B . H U D S O N A N D N I C O L E F R U S H M U N R O

The CARLAWYER©

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parties. Because the dealership charged a documentary fee for filling in the forms, the high court found that the dealership engaged in the unauthorized practice of law. See Campbell v. Asbury Automotive, Inc., 2011 Ark. LEXIS 149 (Ark. April 14, 2011). [Click Here]

Delay in Repairs Did Not Breach Express Warranties Where Repairs Were Ultimately Successful: An individual bought a travel trailer from a dealership and brought the trailer back to the dealership eight months later, complaining about bubbling paint and other issues. The dealership fixed the other issues, but notified the individual that the trailer would need to be returned to the manufacturer to have the bubbling paint repaired. The manufacturer repaired the bubbling paint and returned the trailer to the dealer. Two months later, the individual picked up the trailer and sued the dealership for violating the Song-Beverly Consumer Warranty Act by failing to repair the defects within 30 days. The trial court granted summary judgment in favor of the dealership, and the California Court

of Appeals affirmed. The appellate court found that the Warranty Act requires repairs within 30 days, unless conditions beyond the control of the manufacturer or its representative cause delay, in which case the goods must be returned as soon as possible. The appellate court concluded that there was no breach of express warranty because the repair was ultimately completed. See Kreizenbeck v. Dan Gamel’s Rocklin RV Center, 2011 Cal. App. Unpub. LEXIS 2773 (Cal. App. April 15, 2011). [Click Here]

Demand to Return Spot Delivered Vehicle Violates Automatic Stay: An individual filed a Chapter 13 bankruptcy petition while he was in possession of a car under a conditional delivery agreement. After learning of the bankruptcy filing, the potential assignee of the individual’s retail installment contract rejected the financing, and the dealership demanded return of the car. After the individual returned the car, he filed a Motion for Turnover, and the dealership countered that the car was not property of the estate because a contract was never formed and

ownership was never transferred. The U.S. Bankruptcy Court for the District of Montana disagreed with the dealership and ordered that it turn over the car to the individual. The court found that the individual had an interest in the car as of the petition filing date and that the dealership violated the automatic stay by demanding that the individual return the car post-petition. See In re Henry, 2011 Bankr. LEXIS 1463 (Bankr. D. Mont. April 13, 2011). [Click Here]

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

Tom ([email protected]) and Nikki ([email protected]) are partners in the law firm of Hudson Cook, LLC. Tom is the author of several books, are available at www.counselorlibrary.com. Tom is also the publisher of Spot Delivery®, a monthly legal newsletter for auto dealers, and the Editor in Chief of CARLAW®, a monthly report of legal developments in all states for the auto finance and leasing industry (not to be confused with the book). Nikki is a contributing author to the F&I Legal Desk Book and frequently writes for Spot Delivery. Spot Delivery, CARLAW and the books are produced by CounselorLibrary.com LLC. For information, call 410-865-5411 or visit www.counselorlibrary.com. Copyright CounselorLibrary.com 2011, all rights reserved. Single publication rights only, to the Association. (6/11). HC# 4834-5395-5337.

The CARLAWYER© BY THOMAS B. HUDSON AND NICOLE FRUSH MUNRO

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Want to increase your sales? Sell to women buyers.

1. SELL SAFETY! Quality and performance are givens. But safety is still a priority and concern for women. Women are often thinking about their family members or their growing family when purchasing a vehicle. For a used vehicle, they will definitely ask questions about previous owners and will review Carfax history report. Be sure you are ready to answer.

2. SELL SPACE! Women don’t have to have big cars, but like closets and nooks in a home, women want spaces or places to put and tuck stuff…sunglasses, coffee cups, luggage, shopping bags, snacks for the family and more. So, seat pockets, compartments, and cup cubbies are a must.

3. SELL MAINTENANCE! Women want the convenience of service and maintenance options. Used vehicles do come with a certain amount of risk. Including service and maintenance plans in the purchase of a used auto enhances the one stop shopping deal that women look for.

4. SELL GREEN! Not necessarily the color, but the environmental friendliness. Women do look for unique colors in vehicles and

these are getting easier to find. But for the most part, women are going green. Naturally nurturing, women are conscious of the changes in the environment and want to do their parts in keeping it clean and safe. Share knowledge about the used vehicle’s emission, miles per gallon, and more.

5. BE PATIENT! When a woman enters your site or lot, she is expecting to begin a mutual relationship with you, one of trust and loyalty. She wants your name, your attention and her questions answered. She may need two or more visits before a decision is made. So get ready to treat her well. Hopefully she will buy and love her newly purchased vehicle. For added value, she’s going to remember the treatment and tell all of her friends.

These selling tips are by no means in any order of importance. They are all equally important when marketing your vehicles to women.

BY S Y E D A Z A MSyed Azam is the president of AutoJini.com, a leading provider of website solutions for auto dealers. Contact him at [email protected] or 515-232-2024.

The issue isn’t about whether or not women are buying vehicles. They are. According to all the latest industry research, women even play a lead role in vehicles purchased by most men. And women are buying used vehicles as much as new ones. But don’t presume a woman’s expectations or process will change.

When it comes to a new or used vehicle, women’s expectations are pretty much the same. Just like men, women expect a newly purchased auto to perform well. And like men, women search for the best quality their money can buy when purchasing a used vehicle. So where’s the difference?

Well, one fact you might first consider is women do lots more homework and planning than men prior to a vehicle purchase. They may not be ready to purchase on the first visit. Consequently, you might want to practice patience when marketing to women.

H E R E A R E FIVE QUICK SELLING TIPS T O H E L P Y O U M A R K E T Y O U R V E H I C L E S T O W O M E N :

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S O , W H A T I S T H E B O T T O M L I N E ? L I K E A N Y S A V V Y C O N S U M E R , A U T O D E A L E R S W A N T O P T I O N S .

Dealers Want Better Auto Transport Options from Auto Auctions

Results from ShipCarsNow’s 2011 survey of independent and franchise auto dealers show dealers want more auto transport options when buying vehicles online from wholesale auto auctions.

Preliminary results show the number of dealers who buy pre-owned vehicles via online auction is steadily increasing year over year, and those auctions are increasingly located farther away from the dealership. More dealers report they are expanding their search for wholesale

autos nationwide. In 2009, 75 percent of dealers reported they usually sourced inventory within 50 miles of their dealership and only 14 percent were shopping as far away as 500 miles or more. In ShipCarsNow’s 2011 dealer survey, 35 percent of dealers reported they shop nationally and more than half of the survey respondents said they planned to buy more inventory online in 2011 compared to 2010.

So, what does this mean for online and simulcast auto auctions? ShipCarsNow reports 63 percent of dealers surveyed

said they think online auto auctions should improve transportation options. Almost half said they would purchase more vehicles online if auctions improved auto transport services and increased reliability of condition reports. Suggestions that ranked highest included providing the transportation cost before or during the bidding process and the ability to see discounts for multiple vehicle shipments, as well as the ability to combine vehicles with other dealers’ for economies of scale. Dealers also reported they’d like to see multiple auto transport bids, and that price and reliability are key requirements for any auction offering auto shipping services.

So, what is the bottom line? Like any savvy consumer, auto dealers want options. They want to shop where they want, and when they want. They want vehicles delivered safely, timely and economically. And they want the transaction process to be intuitive and hassle-free. Innovative auto transport companies and online auto auctions need to collaborate to develop the tools and services that dealers need.

For more information about ShipCarsNow’s 2011 Dealer Survey, visit www.ShipCarsNow.com; the complete survey report will be available soon.

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ADVANCED BUSINESS PRODUCTS, INC. Printing, Promotional Products, & WearablesContact: Scott Jayne PO Box 71547 Des Moines IA 50325Phone: 515-225-6343Toll Free: 888-464-2274Fax: 515-225-6510Toll Free Fax: 877-987-3514Website: www.go4abpi.com

ASHTON BONDING AGENCY7505 NE Ambassador Place, Suite APortland, OR 97220800-452-2663503-253-1353 (fax)[email protected]

ASSOCIATIONS MARKETING GROUP INCHealth Insurance Jesse Patton1112 Maple StreetWest Des Moines, Iowa 50265Toll Free: 800-798-6772Phone: 515-270-8178 Fax: 515-270-0398E-mail: [email protected]

AUTO OWNERS INSURANCE 10% DISCOUNT TO ALL IIADA MEMBERSCorcoran & Associates, Inc.Mick and Teresa Corcoran2525 E. Euclid, Suite 102Des Moines, Iowa 50317Phone: 515-262-3141Fax: 515-262-3086Toll Free: 877-518-4051E-mail: [email protected]

AUTO OWNERS INSURANCEEASTERN BORDER OF IOWAAmy GoodnightLOHMAN COMPANIES3901 15TH STREET DMOLINE, IL 61265800-747-8431309-764-5967 (fax)[email protected]

AUTOJINI.COMWebsites for Dealers Contact: Syed Azam310 Main Street Ste 201Ames IA 50010Phone: 515-232-2024E-mail: [email protected]

AUTOMOTIVE DEVELOPMENT GROUP, LLCDealer Compliance Education,F & I Compliance and Training, ServiceContracts, GAP and Protective CoatingsContact: Scott Erikson100 Prairie Center Drive, Suite 200Eden Prairie, Minnesota 55344Scott: (402) [email protected]

CHASE AUTO FINANCE6601 Westown Parkway, Suite 120West Des Moines, Iowa 50266Kate Houston - [email protected]

CITZENS COMMUNITY CREDIT UNION2012-1ST AVENUE SOUTHFORT DODGE, IOWA 50501Phone: 515-955-5524, Ext. 202Fax: 515-955-8241

CORCORAN & ASSOCIATES INC.Various Types of InsuranceContact: Mick Corcoran, Janet Solberg or Donna Torkelson18 – 2nd Street, N.E.Mason City, Iowa 50401Phone: 866-494-1814Fax: 641-494-1819E-mail: [email protected]

CYCLONE AUTOMOTIVE TRAINING INC.F&I Training, Sales Training, Service Contracts, Rob Miller and Chris Hochstein515 N Jefferson Way Ste HIndianola IA 50125Phone: 515-962-0099 or 515-962-0100Fax: 515-961-8400Rob: 515-205-5900 cellChris: 515-205-5800 cellE-mail: [email protected]

FOLLOW-UP PLUS“Customers for Life”Repeat Sales, Referrals & Customer LoyaltyContact: Terry & Sue NewellP.O. Box 294Carthage IL 62321Ph: 888-353-2668Fax: 217-357-9076E-mail: [email protected]

FRAZER COMPUTING, INC.2564 W. Main St., P.O. Box 569Canton, New York 13617Phone: 888-963-5369Fax: 888-963-3366E-mail: [email protected] Rep: Mike Frazer -Dealer Management Software for Used Car Dealers

FRAZER COMPUTING, INC.Contact: Scott Erikson, Iowa Rep100 Prairie Center Drive, Suite 200Eden Prairie, Minnesota 55344Scott Erikson: [email protected]

GLOBE ACCEPTANCE INCSub-prime LenderContact: Sarah GrishamP.O. Box 65400West Des Moines, Iowa 50265Phone: [email protected] Website: www.GlobeAcceptance.com

GOLDSTAR GPS2093 20th Ave. S.E.DYERSVILLE, IOWA 52040PHONE: 866-655-8825 Ext. 120Fax: 866-655-8285Contact: Mark VanDykee-mail: [email protected]: www.goldstargps.com

GREATER IOWA CREDIT UNION1630 – 22nd StreetWest Des Moines, Iowa 50266-1407Gene Holtorf, Dealer Direct ManagerPh: 515-954-1666 F: [email protected]

INNOVATIVE DEALER SERVICES, INC.Dealer Software Management SystemsP.O. Box 23189Shawnee, Kansas 66283913-312-7344 – Ext. 11Fax: 810-821-1718Website: innovativedealer.comContact: Deems Peterson, Sales [email protected]

JR 5 TRANSPORTATIONTransport ServicesJohn Robinson, President1109 S.W. 63rd StreetDes Moines, Iowa 50312515-822-3447

MONSTERLOT.NETAutomotive Development Group, LLCDealer to Dealer Inventory /Trading and sharingFree Unlimited Web Accesswww.MonsterLot.net E-mail: [email protected]: Scott Erikson402-639-0664

NADA BOOKS Official Used Car Guides, Subscription Discounts, Annual Subscription through IIADA, Save $$ Contact IIADA at Phone: 641-755-4177E-mail: [email protected]

RELIABLE AUTO FINANCE INC. 954 28th St. SWP.O. Box 9700Grand Rapids, MI 49509800-814-9294Brian [email protected]

REYNOLDS & REYNOLDS INC.Dealer BondsLong Term Care InsuranceVarious types of insuranceContact: Dean M Clark300 Walnut Street Ste 200Des Moines IA 50309Phone: 515-243-1724Toll Free: 800-767-1724Fax: 515-243-6664E-mail: [email protected]

S & C AUTOMOTIVE, INC.Service Contracts, GAP, Aftermarket ProductsSales & F & I Training thru Star Training Group3828-70th StreetUrbandale, Iowa 50322515-276-9622800-776-9622515-276-8472 (fax)e-mail: [email protected]: www.sandcsales.com Contact: Doug Eckhart

SECURITY AUTO LOANS (SAL)Sub-prime LenderContact: Scott Erikson/Joe Ruhland4900 Highway 169 N., Suite 205New Hope, Minnesota 55428P: 763-559-5892F: 763-559-7549website: www.securityal.com Scott: 402-639-0664e-mail:[email protected]: 612-804-0720e-mail: [email protected]

SMARTAUCTIONMatthew Mohler4300 SW Cambridge AvenueTopeka, Kansas [email protected]

WILSON DISTRIBUTOR SERVICE IIADA DEALER CAP FORMSCar Brite Products Forms, Detail Supplies, Equipment & More Jason & Lisa Goody 105 N McCoy Mt. Pleasant IA 52641Phone: 800-634-0974Fax: 319-385-2927 E-mail: [email protected]: www.wds-usa.com

ZURICH Garage Keepers, Property, Garage Liability Dealer Bonds7045 College Blvd.Overland Park, Kansas 66211Chris Westberg – Western Iowa [email protected], Ext. 3909Scot Smith – Eastern Iowa [email protected] Free: 800-840-8842, Ext. 3944

APPROVED MEMBER BENEFIT PROVIDERS

The used motor vehicle industry is alive and well, and news of independent dealer sales eclipsing franchise dealer sales of used autos over the last few months is even more encouraging. The 13th edition of NIADA’s Used Car Industry Report brings you a snapshot of all of this activity and provides valuable insight in all aspects of dealer operations. The complete 2011 edition, unveiled at NIADA’s 65th Annual Convention & Expo last month, is available for viewing and download at www.niada.com/publications.

Business is Getting Better

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A recent U.S. Supreme Court decision marks a turning point for auto dealers in the use of arbitration agreements to avoid class action lawsuits and class arbitration. On April 27, the court ruled under the Federal Arbitration Act such agreements are enforceable, helping dealers avoid lengthy legal battles with hundreds or thousands of disgruntled consumers.

In position papers, press releases and letters to Congress, numerous state and metro dealer asso-ciations had pointed to arbitration agreements with waivers of class arbitration as a means to quickly, ef-ficiently and cost-effectively resolve consumer dis-putes in the place of class-action lawsuits. Arbitra-tion agreements that include waivers of class-action arbitration can help dealers avoid a tarnished reputa-tion, a decreased customer base and millions of dol-lars in damages and legal fees resulting from a class-action suit. The associations have also contended that the agreements benefit consumers by helping them get complaints taken care of more rapidly and saving them the cost of attorneys’ fees.

Recent cases highlight the favorable impact the Su-preme Court decision could have on the industry. For example, a California dealer made headlines in Feb-ruary when a Court of Appeals judge ruled against it in a class-action lawsuit dating back to 2007. The suit was tied to the dealer’s practice of backdating a sales contract and including insurance in the purchase price of the vehicle. The Court of Appeals’ decision will allow 1,500 auto buyers to have their purchase contracts rescinded, which is estimated to cost the dealer up to $30 million. And in March 2010, a Mis-souri dealer group settled a class-action lawsuit tied to document preparation fees for $8.8 million. That suit was filed in 2008.

A well-crafted arbitration agreement that avoids resolving disputes in court and prohibits class ar-bitration can help dealers avoid legal landmines like these. Because the Supreme Court’s decision removes a significant obstacle to the enforceability of these agreements, independent auto dealers who have been uncertain about using them in retail in-stallment sales contracts or leases may be inclined to give them a second look. Those dealers already using them have a reason to feel more confident that they will be enforced if challenged in court.

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

Supreme Court Ruling Provides Clarity On Arbitration Agreements

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