High-Wire Act - Oregon Independent Automobile Dealers Association

DEALER NEWS
REPRESENTING ALL AUTO, TRUCK, TRAILER, RV AND POWER SPORT DEALERS OF OREGON
F E B R U A RY 2 0 1 4
The
magazine
F E AT U R E S T O RY O N PA G E 8
High-Wire Act
Buy Here-Pay Here Dealers Walk the Line, Balancing the Risks and
Challenges of Lending to Deep Subprime Customers With the Rewards of
Helping Those Who Need It Most
INSIDE
• OVERWHELMED WITH SOCIAL MEDIA?
• KAMAN AUCTIONS RAISES FUNDS FOR BOYS & GIRLS CLUB
• HOW TO BECOME INDEPENDENTLY HEALTHY
OIADA provides dealer
education credits for reading
this magazine! Easy to
follow, easy to learn, easy to
comply...
DALLAS, TEXAS
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V I S I T
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ASSOCIATION
NEWS
OIADA President Appointed
to Advisory Committee
u
OIADA president Dan Nicholson of Central
Oregon Motors was recently appointed to the
Oregon Dealers Advisory Committee. Dan’s
appointment is for a three-year commitment
January 1, 2014, through December 31,
2016.
Dan will join 13 other committee
members representing the areas of
used auto, towing, auctions, insurance,
dismantler, power sports, general
Inside
06
08
12
14
18
Kaman Auctions Raises Funds
I Am Independent
Washington Update
How to Become Independently Healthy
Overwhelmed with Social Media?
What’s New
u
consumer, recreational and new car. Also
at the ODAC’s quarterly meetings are
representatives from DOJ and several area
departments of DMV, such as business
regulations, business license, investigations,
program services and representatives from
ODOT.
Congratulations, Dan, and thank you for
your time and commitment in supporting all
Oregon dealers.
Stay Strong as an Independent
NIADA CAN HELP
You work hard to make your business
successful. Let NIADA help you stay strong
as an independent automotive dealer. Take
advantage of everything NIADA has to offer, such
as dealer compliance training, Certified Master
Dealer training, 20 Group and the many other
dealer benefits, including auto, home and health
insurance. Learn more at NIADA.com.
Advertisers Index
4
A
S S O C I AT I O N C O N G R AT U L AT E S DA N N I C H O L S O N
Ally..................................................................................9
Black Book..................................................................5
Brasher’s Northwest AA......... Inside Back Cover
Brasher’s Portland AA......................... Back Cover
DAA Northwest / Seattle.........Inside Front Cover
Lobel Financial...........................................................3
Manheim.com............................................................7
Manheim Pennsylvania........................................17
NextGear Capital.....................................................11
United Acceptance.................................................15
VAuto..........................................................................13
Continuing
Education
Watch for more information on the number of
hours required to renew your dealer license. Along
with the change in number of hours, each dealer
will be required to take and submit a test, 10
questions for every hour of Continuing Education.
This will be in effect after January 1.
Welcome New Members to OIADA
The Car-Port
I Drive Autohaus, Ltd.
JaniKing
Merlin Motor Werx
Curtis Miller Auto Sales
Northwest Auto Exchange/
JJs Auto
Don Clark
1062 Court St.
Medford, OR 97501
541-779-6232
Ron Horban
170 Ort Ln.
Merlin, OR 97532
541-476-1315
Auto Resource Group
Jonathan Walk
22728 S. Landon Lane
Estacada, OR 97023
503-747-9889
AJ Services Inc.
Aaron Jarvis
16630 SW Shaw St. Suite M
Beaverton, OR 97007
503-367-2872
D. C. Motors
Sami Barbar
2810 NE Broadway
Portland, OR 97232
503-287-4324
Morgan Thomas
1500 Valley River Dr., STE #205
Eugene, OR 97401
Curtis Miller
PO Box 858
Scappoose, OR 97056
503-680-7446
Jalal Naboulsi
5720 SE 82nd Ave.
Portland, OR 97266
503-481-4845
Affordable Auto Rental Sales
Cynde Morton
608 S McLoughlin Blvd.
Oregon City, OR 97045
503-557-7778
Rabdakk H. Ruzicka
925 Maxwell Rd.
Eugene, OR 97404
541-554-7756
CarMax
Sunrise Auto Sales, LLC
Chris Updike
12800 Tuckahoe Creek Pkwy.
Richmond, VA 23238
804-747-0422
Alin Navidi
16320 SE Division
Portland, OR 97323
503-358-2127
Outland Motors
Dave Cooley
1040 River Rd.
Eugene, OR 97404
541-912-6203
Christensen Auto Sales, Inc
William Mitchener
1177 SE 9th St., Suite 103
Bend, OR 97701
541-782-8291
Gary Christensen
3080 NE 99 W
McMinnville, OR 97128
541-992-4095
Show Room New
NIADA
Headquarters
National Independent Automobile
Mike Barthe
360-882-8162
Dealers Association
www.niada.com • www.niada.tv
2521 Brown Blvd. • Arlington, TX 76006-5203
phone (817) 640-3838
OIADA Dealer News is published 8 times per year by the
National Independent Automobile Dealers Association
Services Corporation, 2521 Brown Blvd., Arlington, TX
76006-5203; phone 817-640-3838. Periodicals postage
paid at Dallas, TX and at additional offices. POSTMASTER:
Send address changes to NIADA State Publications, 2521
Brown Blvd., Arlington, TX 6006-5203. The statements and
opinions expressed herein are those of the individual authors
and do not necessarily represent the views of OIADA Insider
or the National Independent Automobile Dealers Association.
Likewise, the appearance of advertisers, or their identification
as members of NIADA , does not constitute an endorsement
of the products or services featured. Copyright © 2013 by
NIADA Services, Inc.
State Magazine MGR./Sales
Troy Graff • [email protected]
Editors
Andy Friedlander • [email protected]
Jacinda Timmerman • [email protected]
Magazine Layout & Graphic Artist
Art Director
Christy Haynes • [email protected]
Printing
Nieman Printing
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DEALER
NEWS
FEBRUARY 2014
Dealers Association,
1475 Capitol St. NE
Salem, OR 97301
800-447-0302
President
Treasurer
Executive Vice President
Secretary
1st Vice President
Chairman of the Board
Dan Nicholson, CMD
Central Oregon Motors
1123 N 6th Street
Redmond, OR 97756
541-923-3961
[email protected]
Bryan Steward
AAA Oregon AutoSource
6 SW Centerpoint Dr #100
Lake Oswego, OR 97035
503-973-6570
[email protected]
Eric Freeman, CMD
7524 SW Macadam Ave
Portland, OR 97219
503-310-5555
[email protected]
Chantae Arrington • [email protected]
OIADA
OIADA
Office
Oregon Independent Auto
Executive Committee
For advertising information contact:
Troy Graff (800) 682-3837 or [email protected].
Heartbeat City Auto
Tommy Wilson Jr., CMD
Tommy Wilson Motors
9215 SW Canyon Rd
Portland, OR 97225
503-629-6000
[email protected]
Todd Staver, CMD
West Coast Auto Enthusiast
3219 NW Guam St
Portland, OR 97210
503-799-1465
[email protected]
Gary Sargent
Sargent’s Motorsports
10207 SE Foster Rd
Portland, OR 97266
503-775-9445
[email protected]
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FEBRUARY 2014
OIADA
DEALER
NEWS
1/20/14 3:34 PM
AUCTION
FROM
NEWS
KAMAN AUCTIONS RAISES
FUNDS FOR EDMONDS
BOYS & GIRLS CLUB
u
W
OME N - OWNE D BU SINE S S SU PPOR T S LOCAL YOUTH ORGANI Z ATION
u Over 20 local
businesses, retailers
and area car dealerships
donated items.
6
KAMAN
AUCTIONS
u Top Left: Auctioneer Tom Pasma builds energy for donated items.
Kaman Auctions, a wholesale auto
auction business owned and operated
by two local sisters, helped raise $3,600
to benefit the Edmonds Boys & Girls
Club. In celebration of Kaman Auctions’
one year anniversary, Lynn Kamacho
and sister Marci Norman decided to
give back to the community that has
supported their business since its
inception and has helped the two sisters
build a growing business.
On November 14, the auction
partnered with local businesses to host
a live charity auction to raise awareness
and money to benefit the children who
participate in the Edmonds Boys & Girls
Club programs.
Lynn and her husband, Greg,
raised two boys now in college who
both benefited from many years of
participation with the Edmonds Boys
& Girls Club. Lynn was pleased and
honored to assist the organization with
its mission “to enable all young people,
especially those who need us most, to
reach their full potential as productive,
caring, responsible citizens.”
Auctioneer Tom Pasma built fantastic
energy amongst the many car dealers,
local businesspeople, family and friends
OIADA
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DEALER
NEWS
u Top Right: Owners Lynn Kamacho and Marci Norman.
attending the auction. He maintained
a fun, interactive and engaging
environment that encouraged bidding
on the many products and services
generously donated for this special
event.
“The charity auction was a huge
success due to the generous support
of our donors who provided all the
fabulous items for this event,” said
Lynn. Marci added, “We were blessed
by the outpouring of generosity from
our customers and the local business
community that helped raise $3,600
for the Edmonds Boys & Girls Club
scholarship programs.”
Over 20 local businesses, retailers and
area car dealerships donated items for
the auction. Items included an evening
getaway to the Tulalip Resort Casino
from Credit Concepts Inc., one night at
Hood River Lodge with white water rafting
in Oregon from Shepard & Shepard
Insurance, a Mercedes-Benz child’s pedal
car from Mercedes-Benz of Lynnwood, a
Cadillac Callaway golf bag from Doug’s
Northwest Cadillac, an autographed
basketball from Seattle icon Nate McMillan
and numerous gift certificates from other
local businesses.
FEBRUARY 2014
THE
PRESIDENT
Car Law: What
Do You Know?
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C
R AIG NIC HOL S SHE D S LIGHT AT
RECENT SEMINAR
If you have been in business for any
length of time, you have likely had the
unfortunate experience of talking to a
customer’s attorney or being threatened
with legal action if you don’t comply.
What do you do? That was one of the
questions asked of Craig Nichols, who
spoke at OIADA’s last “driven to learn”
seminar in Portland. Nichols is one of
the leading attorneys in the state of
Oregon specializing in car law. The air
may have been a little chilly at West
Coast Auto Enthusiast’s warehouse, but
Craig kept the 40 dealers in attendance
on the edge of their seats with his case
examples and changes in law.
One of the subjects Craig covered
was federal law vs. state law. If any
of you think that “AS IS” is your get
out of jail free card, think again. The
buyer’s guide is a federal regulation and
form, but state laws trump federal law.
Oregon’s statute on merchant trade
states that a merchant (dealer) must
disclose any known or should have
known major defect.
Unfortunately, it is up to a jury or
judge to decide what is a major defect
and what you should have known as
a professional. That’s right, folks, as
soon as you get that dealer’s license
you are considered an expert. It does
not matter whether you have been in
business 10 days or 10 years.
So, what do you do to protect
yourself? Craig Nichols has written a
book entitled “Car Law.” This book is
a must and should be sitting on every
dealer’s bookshelf. At the seminar, Craig
handed out a condensed version of this
book highlighting the major points and
laws that affect us as dealers. If you
would like to purchase his book or get
a copy of the handout, contact Diane at
the OIADA office.
Here at OIADA, we have been working
hard to find unique education for our
dealers. Up to this point we have only
had these seminars in Portland. We
have not forgotten about our valued
members throughout the rest of the
state.
Diane, our executive director, is
currently working with a nonprofit that
provides business planning to small
businesses throughout the state.
This company has agreed to put on
seminars for our members statewide.
Watch for emails or website updates for
dates and times of these seminars that
will be in a town near you.
BY DAN NICHOLSON
OIADA PRESIDENT
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SEGMENT
SPOTLIGHT
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8
The
High-Wire
Act
B
U Y H E R E - PAY H E R E D E A L E R S WA L K T H E L I N E , B A L A N C I N G
THE RISKS AND CHALLENGES OF LENDING TO DEEP
SUBPRIME CUSTOME RS WITH THE REWARDS OF HE LPING
THOSE WHO NEED IT MOST
In the world of the
independent car dealer, Buy
Here-Pay Here (BHPH) dealers
are truly a unique breed.
Yes, they sell used cars, but
they also provide financing to
those who otherwise might
not qualify. They help people
establish credit, improve credit
scores, get and keep a job and
be productive members of
society.
Sometimes the dealers even
end up becoming financial
counselors, life coaches and,
often, lifelong friends of their
customers.
A BHPH dealer primarily sells
cars to subprime customers and
handles the financing in-house.
The terms require customers
to return to the dealership at
predetermined increments
(often weekly or monthly) to
make payments.
The dealers generally sell
older, higher-mileage cars and
often make repairs as needed
to keep the car operational and
help keep the customer current
on payments.
“The Buy Here-Pay Here
dealership is one of the most
important types of transactions
in this country for those who
couldn’t otherwise get credit and
be able to buy a car,” said Ken
Shilson, founder of the National
Alliance of Buy Here-Pay Here
Dealers. “These dealers allow
them to get a car to let them get
to and from work. If it breaks
down, it gets repaired to keep
them moving and keep paying.
“We provide a solution for
difficult financing situations and
keep the car on the road during
the life of the contract.”
BHPH dealerships are the
most rapidly growing segment of
OIADA
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DEALER
NEWS
the independent car business –
and they can be very profitable,
Shilson said.
That profit potential is what
attracted Ingram Walters to the
business. Although his wife’s
family were third-generation
franchise dealers, “I got
intrigued by the Buy Here-Pay
Here dealerships,” he said. “I
just fell in love with the margins.
Instead of financing a car for
five years, we could do it for 12
months or 18 months and then
have them come back and sell
them another one.”
BHPH Challenges
Though the profit potential is
great, because of the in-house
financing, the BHPH business is
certainly not for everybody. And
it certainly isn’t easy.
For starters, just getting into
the BHPH business requires a
lot of resources – particularly
capital.
“It requires the dealer to have
several million dollars of his own
money or available lines of credit
to compete in this business
today,” Shilson said, “even on a
small scale.”
“It is cash-intensive,”
agreed Paul Claborn, owner
of WholesaleCars.com in
Albertville, Ala., and NIADA’s
National Quality Dealer for
2010. “A lot of people think
they can get in for $300,000 to
$400,000, but to do it right you
have to have at least $2 million.”
Not to mention the fact that
Buy Here-Pay Here dealers
aren’t only in the car sales
business. They’re also – and
many of them would tell you
primarily – in the finance
business, an entirely different
realm that brings a whole
FEBRUARY 2014
additional set of issues and
concerns into play.
“Underwriting and collections
are and always will be big
challenges in this business,” said
Scott Allen, owner of Auto Land in
Haltom City, Texas, the 2011 NQD
winner. “With the economy always
changing, it can be like a moving
target. You have to really stay on
top of it.”
Indeed, for strictly retail car
dealers, the sale usually marks
the end of a transaction. For BHPH
dealers, that’s only the beginning.
“In retail car sales, you don’t
have to worry about a collection
system,” Shilson said. “In Buy
Here-Pay Here, dealers have to
think about selling and collecting.
It is an added dimension to the
business and requires added
software and systems in place to
do this correctly.”
Inventory also is a growing
challenge for BHPH dealers, who
over the past several years have
found themselves getting less and
less car for their money at auction.
While they are often paying the
same prices to fill their lots, the
cars available to them now have
more years and more miles on
them than ever before.
Shilson said that can make
for a difficult situation because
dealers today must do more
reconditioning work to get their
cars ready for market and clearly
must make adjustments to keep
the vehicles running throughout
the life of the contract.
Allen said he has had to pay
closer attention to the cars he
buys at auction to make sure he
will not have to spend too much
fixing them up for sale.
“We have had to raise our
parameters when it comes to
mileage,” he said. “It used to be
we wouldn’t buy a car with more
than 125,000 miles. Now we
regularly buy vehicles with more
than 200,000 miles.
“With the increased miles
on these cars, something is
going to have to be fixed. I have
definitely had to spend more on
reconditioning and some of the
cars I get now are not quite as
edgy as they were in the past. But
we can still get good quality cars.”
Even with quality
reconditioning, the higher
mileage cars still bring a risk
of issues occurring after the
sale. Breakdowns usually mean
customers cannot get to work
and cannot make their payments
on time, which makes them the
dealer’s problem, too.
“It’s a mixture of affordability
and liability,” Claborn said. “Once
we buy a vehicle at auction, the
operations manager checks it out
to determine if the cost of repairs
is too great for resale. We have to
keep repair costs down to keep
it in the price range we know
our customers can afford but
make sure the vehicle is safe and
usable. We also offer a drive-train
warranty to make sure they can
keep driving it and keep making
their payments.”
Public perception is
another issue BHPH dealers
are constantly battling. That
perception is often perpetuated
by the media – for example, the
inflammatory series on the Buy
Here-Pay Here industry published
in the Los Angeles Times in 2011
that spawned several bills seeking
to impose rigid new regulations on
BHPH dealers.
Even Claborn, who worked
in the wholesale auto business
before opening his BHPH
dealership, had a bad initial
impression.
“I had friends in the [BHPH]
business and I thought about it,
C O N T I N U E D O N PA G E 1 0
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BHPH Rewards
Despite all the challenges, BHPH
dealers say there are many more
benefits to their jobs than they
imagined.
“I love the independence,”
Walters explained. “With other
types of dealerships, you always
have someone trying to tell you
what to do, whether it is the
manufacturer or the bank or the
finance company. With this, it is up
to me.”
Allen also appreciates the
C O N T I N U E D F R O M PA G E 8
loyal group of employees he has
brought together to work at his
dealership.
“We have been here a long time
and are like family,” he said. “We
are all here for the customer and
we all appreciate being able to help
customers improve their lives.”
And while the profit margins
might have been what brought
them into this business, the
dealers say what keeps them in it –
and makes it all worth it – is being
able to really help their customers.
“There are a lot of really good
people out there who have just
had a bit of bad luck in their
past,” Claborn said. “These are
our customers. They have to have
someone to help them prove
themselves again, and that is what
we can do.”
Allen said he often ends up
helping people even after they are
approved, to make sure they can
make their payments and keep
their car.
“These are people living
paycheck to paycheck,” he said.
“Any major or minor thing, whether
it is a family member getting sick
or whatever, can make them get
behind. Dealers like us understand
that and can move the note and
give them time to catch back up.
They just need the transportation.”
Claborn said he often discusses
Scholarship Deadline
Approaching
u
APPLI CATIO N S M U S T B E PO S TMARKE D BY MARC H 1 5
The NIADA Foundation
promotes the academic growth
of youth across the United States
through annual scholarships.
The scholarships are awarded in
June at the National Independent
Automobile Dealers Association
Convention.
The mission of NIADA
Foundation is to “improve the
used motor vehicle industry by
informing consumers, educating
dealers and training individuals
and companies associated with
the industry.” Since its inception
in 2006, the scholarship program
and other aspects of education
have grown significantly.
Northwood University narrows
the field of scholarship applicants
down to four candidates
representing each of NIADA’s
four regions and also selects the
national scholarship recipient.
The decision is based on student
achievement as well as leadership
and community endeavors.
Regional scholarships go to
OIADA
OR_0214.indd 10
DEALER
NEWS
students who have displayed
outstanding abilities in education.
These students receive a $3500
scholarship to the college or
university of their choice.
The eligibility requirements
are as follows:
u Be classified as a high
school senior during the current
2013-2014 school year and legally
reside in one of the four NIADA
regions.
u Have maintained an
outstanding academic
achievement record as reflected
by an official high school
transcript.
u Demonstrate an aptitude for
college work as measured by SAT
or ACT score.
Applications must be
postmarked no later than March
15, 2014, and received no later
than March 28, 2014. For more
information, or to download
the application, visit www.
niadafoundation.org and click on
the scholarship link.
FEBRUARY 2014
his customers’ complete financial
situation with them before
approving a loan to make sure they
are making a wise decision.
“The reality is, we are helping
provide financial literacy,” he said.
“When they come pay the car off,
obviously we want to sell them
another car, but we want it to work
for them. I tell them to personally
save that money they would have
been using for a car payment and
then come in and get a better
car. It is often something they
haven’t thought about and it is very
gratifying to teach it to them.”
Being successful in the BHPH
sector requires constant attention
to detail, but to the dealers who
can make it work, it is worth every
bit of the effort they put into it.
“I have a Ph.D. in mistakes and
know what works and doesn’t
work,” Walters said. “It takes
putting a good system in place
and hard work. But it is worth it
to help really quality people.”
BY LAURIE PONDER
Toyota on Top in
Consumer Reports
P
RI U S R ATE D BE S T OVE R ALL
According to Consumer
Reports magazine, the
popular hybrid Toyota
Prius is considered the
best overall value among
all models out there. At the
other end of the spectrum is
the Nissan Armada, a giant
SUV.
For Prius, it’s a second
straight win on the CR bestvalue list, having unseated
the Honda Fit from the title it
held for four straight years.
The magazine lauds it as
having the right combination
of performance, reliability
and low estimated five-year
ownership costs at 47 cents
per mile.
“Prius’ 44 (miles per
gallon) overall is the best fuel
economy of any non-plug-in
car that Consumer Reports has
tested,” said Consumer Reports
automotive editor Rik Paul.
“Though it’s not particularly
cheap to buy, the Prius’
depreciation is so low that it
u
WATCH
ASSOCIATION
“You just make sure you are
doing it the right way,” Walters
said. “You don’t want to do things
wrong because you can put the
whole business in jeopardy.”
The best way to stay current
on regulations and be assured
business is being done correctly,
Allen said, is by being active and
involved in local and national
associations. He even got involved
with his local planning commission
when a push to drive dealerships
out of his community began.
“It can be a constant battle
to stay aware and informed,” he
said. “We have a strong state
association here and we have
to pay attention all the time to
possible new regulations at all
levels to make sure we are serving
our customers.”
MARKET
NEWS
10
but I stayed out for years thinking
every customer would just be
trying to not make payments or
damage the collateral,” he said.
“But that is just not the case. We’ve
got some of the best customers
I could ever hope to know. We
provide a service, especially in
smaller communities with no
public transportation.
“We know they have so
many options and we want our
customers to come back and tell
their friends about us. Repeat and
referrals are 70 percent of our
business, so doing things right is
just good business.”
But even with all of those
potential obstacles in their way,
BHPH dealers agree that the
biggest challenge they face
today is the constantly changing
regulations created by federal,
state and local governments.
Those regulations affect the
entire used vehicle industry, but
because of the additional aspect
of financing, BHPH dealers face an
even greater burden. Claborn said
a simple car sale now requires “a
stack of 25 documents to sign.”
Still, as frustrating as the extra
paperwork is, most dealers share
the belief that doing business
honestly and fairly satisfies the
regulations and keeps dishonest
dealers out of the business.
VALU E
A SECOND STRAIGHT WIN
ON THE CR BEST-VALUE LIST
costs less to own over the
first five years than its initial
(price). We call that a bargain.”
The consumer magazine
says there is not a lot to love
about Armada. It only gets 13
mpg overall, scored poorly
in Consumer Reports‘ annual
reliability survey and forces its
owners to shell out $1.20 per
mile to operate, according to
CR’s analysis.
As for brands, Toyota
and its luxury brand Lexus
emerged the big winners. They
had the top models in three
of the 10 categories. Toyota
Avalon Hybrid Limited scored
highest among large cars and
Lexus ES 300h was top luxury
car.
Vehicles from Subaru and
Mazda also did well overall.
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MARKET
WATCH
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WASHINGTON
UPDATE
NIADA Government Report
u
K E E PI N G YO U I N FO RM E D WIT H T H E L AT E S T G OVE RN M E NTAL I S S U E S AN D AC T IVIT Y AF F E C T I N G T H E U S E D CAR I N D U S T RY
Here’s a rundown of some
of the latest governmental
issues and activity affecting
the used car industry from
NIADA regulatory counsel Shaun
Petersen and Sante Esposito
of Federal Advocates, NIADA’s
lobbying firm.
12
LEGISLATIVE REPORT
Commerce Committee
Hearing
On Nov. 20, the Senate
Committee on Commerce,
Science and Transportation
held a hearing on “Soldiers
as Consumers: Predatory and
Unfair Business Practices
Hurting the Military Community.”
Among the witnesses was
Holly K. Petraeus, assistant
director of the Consumer
Financial Protection Bureau’s
Office of Servicemember Affairs.
In her statement and testimony,
as well as the statements and
testimonies of other witnesses,
the automobile industry was
cited as partakers of certain
predatory practices regarding
servicemembers.
Subsequent to the hearing,
Federal Advocates was contacted
by a committee staffer about
submitting a “statement for the
record” addressing the various
good business practices of the
association and its members
pertaining to the military
community.
The statement, which
was submitted shortly after,
noted NIADA’s Code of Ethics
and detailed some of the
association’s initiatives to assist
military personnel with the
car-buying process, such as a
video titled “Car Buying Tips
for Military Service Members”
that is available for viewing on
NIADA’s Automotive Consumer
Television.
The statement also provided
examples of NIADA dealers who
have gone above and beyond,
to use a military term, to aid
servicemembers. Among them
are a North Carolina dealer who
offers a $500 discount to active
military personnel, a California
dealer who has stored and sold
vehicles for servicemembers
stationed overseas and a Texas
dealer – and former 1st sergeant
– who advises soldiers about
OIADA
OR_0214.indd 12
DEALER
NEWS
cars and the purchase process
whether they buy from him or
not.
S. 1584, Providing
Replacement Automobiles for
Certain Disabled Veterans and
Members of the Armed Forces
A hearing on the bill, which
was introduced Oct. 28 by
Sen. Bernie Sanders (I-Vt.)
with no cosponsors, was held
by the Committee on Veterans
Affairs on Oct. 30. The bill
would increase the amount
of government assistance
from $18,900 to $30,000 for
military members to acquire a
replacement vehicle for vehicles
destroyed in disasters, provided
the eligible member does not
receive property insurance
compensation for the loss.
H.R. 2543, End
Discriminatory State Taxes for
Automobile Renters Act of 2013
The bill was introduced
June 27 by Rep. Steve Cohen
(D-Tenn.), with six cosponsors,
and was referred to the
Subcommittee on Regulatory
Reform, Commercial and
Antitrust Law of the Judiciary
Committee. The bill would
prohibit state and local
governments from levying or
collecting a discriminatory tax
– one that does not apply to
the majority of other rentals of
tangible personal property – on
the rental of motor vehicles,
motor vehicle rental businesses,
or motor vehicle rental property.
REGULATORY REPORT
Consumer Financial
Protection Bureau
Ally settlement: The CFPB
and Department of Justice
entered into an agreement
with Ally Financial Inc. and Ally
Bank to resolve allegations that
235,000 minority borrowers
paid higher interest rates for
their auto loans between April
2011 and December 2013
because of Ally’s discriminatory
pricing system.
Ally purchased the installment
contracts from dealers and
allowed dealers to charge a
higher interest rate than its
established buy rate. Ally then
compensated the dealer with all
or some of the revenue from the
dealer markup.
FEBRUARY 2014
The CFPB and DOJ alleged
Ally violated the Equal Credit
Opportunity Act by charging
African-American, Hispanic,
Asian and Pacific Islander
borrowers higher dealer markups
for their auto loans than similarly
situated white borrowers. The
agencies believe discrimination
resulted from the dealer markup
and compensation policies and
Ally’s failure to implement an
effective compliance program
to monitor its loan portfolio for
discrimination.
Ally agreed to pay $80
million in damages to refund
consumers and to hire a
settlement administrator to
distribute funds to victims. Ally
also agreed to monitor dealer
markups to prevent future
discrimination or eliminate
dealer markups altogether. Ally
will implement a compliance
program that will include dealer
education, corrective action
against dealers when there are
dealer disparities, and portfoliowide analysis of pricing data
for disparities. Finally, Ally has
agreed to pay a civil penalty of
$18 million.
The CFPB held
a roundtable
discussion related
to pre-dispute
arbitration clauses
in consumer
financial product
contracts.
CFPB Arbitration Roundtable:
The CFPB held a roundtable
discussion related to pre-dispute
arbitration clauses in consumer
financial product contracts. In
addition, the CFPB released
some preliminary results
from its study of arbitration
agreements as required by
passage of the Dodd-Frank Act.
The discussion focused on the
CFPB’s findings that large banks
use arbitration agreements
more often than community
banks and credit unions,
and the CFPB’s conclusion
that few consumers actually
filed arbitration agreements,
particularly those with small
claims. Also discussed was how
fair arbitration clauses are to
consumers, specifically those
which contain class action
waivers. The CFPB said future
arbitration studies will include an
attempt to examine the relative
benefits of class action and
arbitration.
The preliminary results of
the study, which is subject to
revision, is available at www.
consumerfinance.gov/reports/.
Department of Labor
OSHA proposes health care
adjustments: The proposed
adjustments would provide
employers and workers more
options for their health care
coverage while receiving the
protections of the Affordable
Care Act.
The proposal would count
employee assistance programs
such as short-term substance
abuse counseling, financial
counseling and legal services as
excepted benefits if the benefits
are free to employees and do
not provide significant benefit
in the nature of medical care.
The proposal also exempts
EAPs from the private insurance
market reform. EAP coverage
would not make individuals
ineligible for a premium tax
credit for qualified health plans
through the Health Insurance
Marketplace.
Federal Trade Commission
Enforcement of Risk-Based
Pricing Rule: The FTC and Time
Warner Cable, Inc. agreed to
settle allegations that Time
Warner violated the Risk-Based
Pricing Rule – the FTC’s first
settlement against an entity
alleging violations of the rule.
The FTC alleged that Time
Warner required consumers to
pay a deposit or pre-pay the
first month’s bill if there were
negative annotations on the
credit report, and Time Warner
did not provide them with a
risk-based pricing notice. Time
Warner agreed to pay a $1.9
million civil penalty.
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MANAGEMENT
MATTERS
How to Become
Independently Healthy
u
14
TAKE TIME TO SHARPEN YOUR A XE
There’s a story I like to tell
about a young man of 20 who
was lean and strong and had
the heart of a lion, with dreams
of becoming a lumberjack.
One day he applied for a
career position with a very
prestigious lumber company.
The manager looked closely at
the young man and questioned
whether he had what it took to
be successful. He wondered
whether the young man
could keep up with the much
larger and more experienced
lumberjacks.
Seeing the burning desire
in the young man’s eyes the
manager decided to trust his
instincts and give him a chance
to prove his worth. In offering
the young man a trial run, he
handed him a brand-new, shiny,
ultra-sharp axe. With pride, the
young man promised to be the
best lumberjack in the camp.
True to his word, the young
man day in and day out cut
more timber in almost half the
time of the other lumberjacks,
even the most experienced
lumberjack in the woods. This
went on for weeks – one tree
being felled after the other.
One day the manager began
to notice the number of trees
being felled by the young man
was declining. He kept his eyes
on the young man and saw he
was working harder and harder
and putting in longer and longer
hours, yet the results became
less and less.
Frustrated and a bit
disappointed in the young
man’s continued decline,
he called the young man
to his office to discuss his
performance. Embarrassed
and frustrated, the young man
could not explain his decline in
productivity. After all, he was
working harder and harder
and putting in more and more
hours, frequently finding himself
working alone in the woods long
after the other lumberjacks had
called it a day.
The manager listened
sympathetically to the
young man who desperately
OIADA
OR_0214.indd 14
DEALER
NEWS
tried to understand why
his performance was
dropping while his efforts
were neverending. Finally,
the manager said, “Do you
remember the first day when
you applied for the job, I
handed you a brand-new, shiny
and ultra-sharp axe? That was
many weeks ago. Since that
day, you worked tirelessly and
gave it all you had but the
fact remains, not once in all
that time did you take time to
sharpen your axe.”
Does that story sound
familiar?
Many independent auto
dealers are just like the young
man, working long hours and
spending more and more time
at the dealership without seeing
much improvement in the
bottom line (net profit).
As an independent auto
dealer in an ever-changing and
highly efficient marketplace, it
is more important than ever to
be independently healthy – that
is, keeping up with or improving
your financial and business
skills. Today’s successful
FEBRUARY 2014
and financially healthy dealer
understands the importance
of continuing his learning
and education away from the
dealership. In other words, taking
the time required to sharpen his
“knowledge axe.”
It’s not easy being an
independent dealer, and
often it’s easy to overlook the
need to attend seminars and
conventions because there just
aren’t enough hours in a day,
or you can’t be away from your
dealership for one or two days,
or you feel the training and
education is just cost-prohibitive
at this time.
The fact is, it’s never a good
time to leave your dealership,
and great training and education
is often not cheap. But what is
the real cost to your bottom line
when you don’t take the time to
sharpen your axe?
If you could learn ways to
improve your dealership’s
bottom line by learning how
to maximize your capital
investment, getting the
greatest return on your assets,
turning your inventory faster,
increasing your effectiveness
The fact is, it’s
never a good
time to leave your
dealership, and
great training
and education is
often not cheap.
But what is
the real cost
to your bottom
line when you
don’t take the
time to sharpen
your axe?
in the marketplace, and truly
making more overall net profit
by learning how to earn more
“super gross,” would you still
be reluctant to take time out of
your nearly impossible schedule
to become a more effective
entrepreneur?
Being an independent doesn’t
mean you have to go it alone.
Make the time (notice I didn’t say
“take the time”) to sharpen your
management as well as your
financial skills.
You schedule a haircut,
you schedule your pet’s vet
appointment, you schedule
your lawn service. So why not
schedule time to learn how to
become more independently and
financially healthy?
Contact NIADA today – visit
www.niada.com, call 1-800-6823837 or email georgia@niada.
com – to see if an NIADA 20
group or Certified Master Dealer
course is right for you.
BY JOE LESCOTA
JOE LESCOTA IS DIRECTOR
OF DEALER DEVELOPMENT
FOR THE NATIONAL
INDEPENDENT AUTOMOBILE
DEALERS ASSOCIATION AND
INSTRUCTOR FOR NIADA’S
CERTIFIED MASTER DEALER
PROGRAM. HE CAN BE
REACHED AT JOE@NIADA.
COM.
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P R O G R A M
E D U C A T I O N
Complete this test and certify below that you have read the articles for February 2014
How to Become Independently Healthy
____________________________________________________
______________________________________________
____________________________________________________
______________________________________________
____________________________________________________
______________________________________________
Overwhelmed with Social Media?
______________________________________________
What does the article mean by “independently healthy”?
a) Prosperous independent of outside help.
b) Self-governing success.
c)Keeping up with or improving your financial and business
skills.
w w w. o i a d a . c o m
OR_0214.indd 15
What is a way you can sharpen your skills?
What lesson is to be learned from the lumberjack story?
______________________________________________
O I A D A
C O N T I N U I N G
Read & Respond or Certify Below
hat three tips does the article list to stay grounded regarding
W
social media?
____________________________________________________
____________________________________________________
____________________________________________________
I certify to OIADA that I have personally read these articles in
The Oregon Dealer News Magazine for February 2014.
My Name _________________________________________________
Dealership Name _________________________________________
Dealership # _______________________________________________
Dealer License Expiration Date:
(Month)__________________________ (Year)______________
Signed: ____________
Date_______________
FEBRUARY 2014
FAX TO: 503-364-7331 or
mail to OIADA, 1475 Capitol
St NE, Salem, Oregon 97301
OIADA
DEALER
15
NEWS
1/21/14 2:41 PM
Associate Members
ADVERTISING
Affiliated Media LLC
Aaron Jarvis
503-683-2574
Northwest Auto Accessories
Craig Lessard
503-288-5700
AutoTrader.com
Ed Merrick
503-747-9162
SHOWROOM/BUSINESS
JANITORIAL
JANIKING
Morgan Thomas
1500 Valley River Dr., STE #
205
Eugene, OR 97401
503-535-9758
Carjohnny.com
Thomas Garza
888-455-3000
Show Room New
Mike Barthe
360-882-8162
Cars.com
James Lynch
312-601-5052
COMMERCIAL CLEANING
JaniKing
Morgan Thomas
541-868-8080
Carsforsale.com
Aaron Oestretch
605-306-3302
The Oregonian
Rich Fryback
503-221-8486
PRIVATE AUCTIONS
Brasher’s Northwest
Auto Auction
Mark Melton
541-689-3901
UsedCars.com by Dealix
Tamara Garris
847-397-1700
Brasher’s Portland Auto Auction
Jerry Hinton
503-492-9200
AUTO SERVICES &
ACCESSORIES
Auto Marketing Specialist
Gary Palaniuk
503-519-7725
Crosspoint NW Dealer Auction
Brian Hardy
503-594-2800
AUTO DETAILER
Show Room New
Mike Barthe
P O Box 822073
Vancouver, WA 98682
360-882-8162
Manheim Portland Auto Auction
Ray Priest
503-286-3000
OUT-OF-STATE AUCTIONS
Adesa Seattle Auto Auction
Jason Arcaro
16
253-735-1600 x 213
DAA Northwest
Mitzi Vanvoorhis
509-244-4500
Manheim Seattle Auto Auction
Ray Priest
206-762-1600
PUBLIC AUCTIONS &
AUCTIONEERS
Commercial Industrial
Auctioneers
Ray Beal
503-760-0499
Insurance Auto Auctions, Inc.
Ryan Hall
503-253-1500
Petersen Auction
Group of Oregon
Curt Davis
541-689-6824
JP Morgan Chase Auto Finance
Jeff DeGarmo
503-201-4370
Lobel Financial
David Lobel
714-816-1301
Nationwide Insurance
Mark Tischer
503-339-4165
Oregon Auto Finance
Gary Veum
541-868-0472
Oregon Community
Credit Union
Rich Black
541-681-6311
Reliable Credit Association
David Marx
503-462-3022
Rick Leathers Auctioneers
Rick Leathers
503-668-5326
Smartway Auto Advisors
Sheldon Harris
503-795-7700
Woodburn Auto Auction
Steve Morin
503-981-8185
The Equitable Finance Co.
Brandon Fox
503-808-7939
DEALER SOFTWARE
Frazer Computing
Michael Frazer
888-963-5369
United Finance
Todd May
503-238-6488
FINANCING
Credit Acceptance
John Bragg
360-980-2214
Credit Concepts
Jason Moon
541-342-8545
FLOORPLAN FINANCING
Floorplan Xpress
Josh Chandler
503-621-9260
NextGear
Robert Torbet
503-358-3911
Associate Member Benefits
There is not another association that works harder than
we do to provide its vendors with exposure, leads and
other lucrative opportunities. Please review some of
the following programs and areas that we help promote
those businesses that support OIADA.
Marketing: Opportunity to give coupons to dealer
members, included in all dealer packets. Ad space on
inside pages all presentation folders sent throughout
the year. Meal sponsorships available for Pre-License
classes, Title & Registration classes.
Databases: Access to all OIADA membership
databases for mailings. We require a review of the info
that you will be sending to our members. Associates
may have a list quarterly or 4 times a year. Each time
you get a list you may use it only once for a mailing.
Just send us an e-mail request for current database
and we’ll be glad to send to you once we review your
INSURANCE & BONDING
Hecht & Hecht
Insurance Agency
Evelyn Hecht
503-288-6371
Shepard & Shepard
Business Solutions
Todd Shepard
509-396-0488
The Summit Group of Oregon
John Petrie
503-581-2825
LEASING
Oregon Roads, Inc.
Joseph McKinney
541-683-2277
SERVICE CONTRACTS
A.U.L./D.P.C.
Jim Bangert
360-834-3333
Automotive Business
Developers
Shannon Meany
541-944-9186
Auto Services Company
Susan Williams
800-442-7116
Protective Life Insurance
Dylan Doran
818-836-1455
TRAINING
OIADA/NIADA Certified
Pauline Sill
503-362-6839
marketing page.
OIADA Magazine & Service Provider Listing: Your
company and contact information will be listed in
OIADA’s Dealer Service Provider Directory in our
magazine that is distributed to around 2000 dealers
every month of the year. We also have great rates for
those companies interested in additional exposure in
OIADA’s popular and well read “Oregon Dealer News”
establish a relaxed relationship with future potential
prospects.
Special Speaking and Sponsorship Opportunities:
OIADA is always having events going on where the
environment is ideal for sponsors to participate.
Some examples of this are regional meetings, golf
tournaments, auction membership drives and of course
our annual convention and trade show.
Website Listing and Link: If your company has a
website, we will add your company link to our company
website as well as listed in Oregon Dealer News.
Developing Strategic Relationships: Network with
other companies who associate themselves with
our association. Either during our regional meetings,
membership drives or board meetings.
Regional Meetings (7) and Membership Drives: Many
of OIADA’s Associate Members like to get involved
in helping with OIADA’s regional meetings. Also our
auction hosted membership drives. Those vendors who
agree to participate get the benefit of meeting larger
groups of dealers in one location while being able to
Annual Convention and Trade Show: Participate in our
once a year convention and trade show for maximum
exposure and opportunities. Call for information on
Reception, Tradeshow, Meal and Golf Tournament
sponsor levels.
OIADA Education Schedule
February
u
Title and Registration Classes
• February 7, 2014, 9 a.m.
• Host: Salem OIADA offices
• February 21, 2014, 9 a.m.
• Host: Portland/ Manheim
Auto Auction
Pre-License Class
u
• February 12, 2014, 8:30 a.m.
• Host: Portland/ Manheim
Auto Auction
OIADA
OR_0214.indd 16
DEALER
NEWS
March
Regional Meetings
Title and Registration Classes
• March 7, 2014, 9 a.m.
• Host: Salem OIADA offices
• March 21, 2014, 9 a.m.
• H
ost: Portland/ Manheim
Salem, Eugene, Medford, Klamath
u
Falls, Bend and Pendleton
u
Regional meetings TBA (February/
March)
Auto Auction
Pre-License Class
u
• March 12, 2014, 8:30 a.m.
• H
ost: Portland/ Manheim
FEBRUARY 2014
Auto Auction
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OVERWHELMED
ONLINE
u
18
MARKETING
with Social Media?
S
TAY G R O U N D E D W I T H T H E S E T H R E E T I P S
Social media isn’t new
anymore, but there are
plenty of dealerships
that are not delivering a
consistent message to their
fans/followers. Chances
are you’ve heard that social
media marketing can
enhance your business,
but it’s hard to know which
way to turn when you don’t
know the destination.
I get it. I’ve sat in your
chair. It’s that conspicuous
sense of overwhelm that
creeps into your head on a
regular basis. Having nearly
30 years in automotive
retail, I know that you can’t
afford to be stuck. After
leaving auto retail, I created
my social media coaching/
marketing business out of
a mere thought. We’re in a
time where we’re creating
and defining our own
success stories and there’s
no instruction manual.
There are a host of things
that contribute to feeling
overwhelmed with social
marketing:
u Lack of knowledge.
When we’re uninformed
or misinformed, there’s
a reluctance to move
forward.
u Uncertainty about what
to post.
u Confusion around how
to interact with users.
u Skepticism (you or
the boss) that social
marketing is worth
doing.
u Anxiety about spending
time, effort and budget
and having it fail.
The good news is that
feeling overwhelmed by
social media is temporary.
When you’re able to
get out of your head for a
bit, everything changes.
Suddenly you see a way
out. Shine a light on
the fear and reduce the
OIADA
OR_0214.indd 18
DEALER
NEWS
apprehension and feelings
of doom.
Whenever I have
a client who’s stuck
(usually because they’re
overwhelmed), I guide them
back with one or more of
these three exercises. All of
these can work for you too.
1. Re-examine your
content strategy.
Why you post on social
media is as important as
what you post. When you’re
overwhelmed, it’s best to
break the cycle by reexamining your “why.” Once
What factors do
they compare and
weigh when deciding
between yours and a
competitor’s product?
2. Don’t try to be all things
to all people.
The best brands know
their customers inside and
out. In the new Web, with
Google’s Hummingbird
update, it’s even more
critical to know everything
about your customer. When
you can define in detail who
your customer is – what
their challenges are, what
u
The good news is that feeling
overwhelmed by social media is
temporary. When you’re able
to get out of your head for
a bit, everything changes.
Suddenly you see a way out. Shine
a light on the fear and
reduce the apprehension
and feelings of doom.
you’ve had a few minutes to
delve into these questions,
things will open up:
u What are your core
values and beliefs?
u What do you want
consumers to leave
thinking about the
company and its
products?
u How much are you
focused on building
brand awareness in your
marketing vs. product
marketing?
u W hy do customers
choose your products
over a competitor’s?
u What kinds of
information do
customers typically
need to make their
decisions about buying?
FEBRUARY 2014
passions they have and
what stage of the buying
process they’re in – you’ll
be able to reach them more
effectively.
If you’ve run out and
grabbed a profile on every
social network you can think
of, you’re doing it wrong.
It’s okay to test the different
platforms, but focus on one
first (usually Facebook).
Get your content strategy
in place and master that
network. Then you can
decide whether you want to
move onto the others. Be
where your customers are.
If you know them inside
and out, you’ll succeed
at engaging them on the
platforms where they spend
their time.
3. Re-define your goals.
To establish ROI (Return on
Investment) you must come
to the table with objectives.
Without goals you’ll have
nothing to tie your results
back to. I can’t tell you how
many people have come up
to me at conferences with
questions about how not to
fail at social media. I want to
help you!
What do you plan on
achieving with social media?
Many people just focus
on the number of likes
and think that’s going to
get them leads and sales.
To the contrary, likes will
not generate leads and
sales. Posting engaging
sharable content while
simultaneously running
micro-targeted Facebook
ads is what gets you leads
and sales.
Very often, I have a hard
time locating dealership
Facebook pages with solid
results. Many dealers,
GMs and salespeople don’t
really know what social
media success looks like.
They only know they need
to be there. Whenever
we come to an endeavor
with no plan, no real idea
about what we expect
from our efforts, feelings
of overwhelm are bound
to materialize. If you find
yourself overwhelmed by
social media, practice
these three exercises
I’ve shown you. Don’t let
your head talk you out of
something that’s valuable
to your business.
BY KATHI KRUSE
KATHI KRUSE IS AN AUTOMOTIVE SOCIAL MEDIA
MARKETING EXPERT, BLOGGER, AUTHOR, SPEAKER
AND FOUNDER OF KRUSE CONTROL INC. SHE IS ALSO
THE AUTHOR OF “AUTOMOTIVE
SOCIAL BUSINESS – HOW
TO CAPTIVATE YOUR
CUSTOMERS, SELL MORE
CARS & BE GENERALLY
REMARKABLE ON SOCIAL
MEDIA.”
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