Impact Newsletter Q3 2007

A publication of the:
A newsletter for Alberta motor industry’s
licensed businesses and registered salespeople.
IMPACT!
AMVIC Board of Directors
Flooded cars go to market
with little to stop them
Unfortunately, with the passing of the
second anniversary of the massive
Katrina storm, there is still little to no
consumer protection from the estimated
thousands of flooded cars and trucks
that eluded scrappers. Let alone the
vehicles that will become flotsam in
hurricanes yet to come. Here is why:
1. A crazy quilt of state vehicle laws
allows unscrupulous sellers to
'wash' flood designations from
vehicle titles by registering them in
states that do not recognize water
damage as trouble.
On June 19, 2007, AMVIC held its Annual General Meeting (AGM) in
Edmonton. A key component of the meeting was the appointment of
new directors to the board. In December 2006, AMVIC stakeholders met
and passed a resolution that the board should increase from nine to
eleven members. Of the two new positions, one would be a registered
salesperson and the other from a business licensed as a recycler and
dismantler. Both of the positions were filled at the AGM. See page three
for a full listing of the 2007/2008 Board of Directors.
A state may not recognize a vehicle
from another state as flooded, even
if its title denotes it as flooded. States
even differ on the extent of damage
to a car that constitutes a total loss
from flooding. A 2006 American
Association of Motor Vehicle
Administrators (AAMVA) survey
discovered thirteen states did not
have a flooding explanation category
for vehicles classified as salvaged
or rebuilt. The states are: Alaska,
Arkansas, Colorado, Hawaii, Idaho,
Kansas, Massachusetts, Missouri,
Nebraska, New York, North Dakota
and Vermont. South Dakota did not
have its own flooding designation
either, but it carries the label over if it
comes from another state.
FALL 2007
.../see "Beware of Flood Damage" on page 2
PUBLISHED BY:
Alberta Motor Vehicle Industry Council
#303, 9945 - 50 Street, Edmonton, AB T6A 0L4
Tel: 780.466.1140 Fax: 780.462.0633
Email: [email protected]
Toll Free Numbers:
Licensing: 1.877.979.8100
Investigations: 1.877.279.8200
Return undeliverable mail to the above.
2007/2008 BOARD OF DIREC TORS:
Reg Pattemore, Motor Dealers’ Association, Calgary
Chairperson of the Board
Aileen Gibb, INDUSTRY-AT-LARGE, Hillspring
Ross Hodgins, Recreational vehicle Dealers, Morinville
Brent Hesje, Industry-at-Large, Edmonton
Mark Krassman, salesperson, mEDICINE hAT
Peter Lokstadt, Service & Repair Association, Edmonton
Randy Montgomery, Recyclers & Dismantlers, Grande Prairie
Wayne Orsten, Auctioneers Association, Calgary
Robert Pelz, Used Vehicle Sales, ROCKY MOUNTAIN HOUSE
Gary Walsh, Public Appointee, Calgary
Bart West, Public Appointee, Edmonton
EXECUTIVE:
Bob Hamilton, Executive Director
Shannon DeLorey, Manager of Licensing & Finance
Bob Knight, Manager of Investigations
Janet Tancsics, Secretary to the Board
EDITING & DESIGN:
LINK PR INCORPORATED
9249 - 48 Street, Edmonton, AB T6C 2R9
Tel: 780.448.0936 Fax: 780.465.6201 Email: [email protected]
Impact! is the official publication of AMVIC. Comments or
mailing address changes should be sent to the publisher.
Impact! welcomes articles about the motor vehicle industry
and its people. Letters to the Editor are welcome.
I m pac t ! A Publication of the ALBERTA Motor vehicle industry council
Regulation
Education
Question
Jenna had just
graduated from
high school. Her
grandfather gave her
$5,000 to celebrate her achievement
to use as she pleased. Jenna decided
to buy a used red Filly convertible. She
asked for an inspection document.
The salesperson said no problem and
went into the office to get it. He filled
out the form, ticked off OK on all of the
categories and signed the form. This
was a standard procedure when any
car was purchased. The car was never
inspected. Two weeks after purchasing
the car, Jenna’s brakes failed causing a
major accident. Have the Salesperson
or business committed and unfair
practice?
Answer
The dealer and salesperson have
committed an unfair practice. A dealer
in used motor vehicles, before entering
into a contract to sell a used motor
vehicle, must give to the purchaser a
Certificate of Mechanical Fitness which
certifies at the time of sale the motor
vehicle complies with the Vehicle
Equipment Regulation. This means
that ALL vehicles sold by an AMVIC
licensed business must be inspected
prior to sale. It includes motor vehicles
traditionally sold with a disclosure of
non-inspection due to age and mileage
if these units are to be sold by the
business to consumers.
The provision negates the practice of
just referring to compliance with Part
2 of the Highway Traffic Act, which
was replaced by the Traffic Safety Act.
If a dealer in used motor vehicles sells
a used motor vehicle that cannot be
certified as required…the dealer must
give the purchaser a Certificate of
Mechanical Fitness describing the items
of equipment that are either missing
or do not comply with the Vehicle
Equipment Regulation.
Beware of Flood Damage
/continued from page 1
Louisiana and Mississippi officials estimate 410,000 to 460,000 cars were lost to
hurricanes Katrina and Rita in August and September 2005. The majority of these
were scrapped and approximately 200,000 vehicles’ permanent paperwork branded
them as receiving some damage in the storm. At least 15,000 of those were already
registered in another state and nearly 45% of those managed to lose their stormdamaged designation in the process. In effect, this washed their titles and reregistered in a way that erases any mention of them being flood-damaged.
2. The federal government has not fully implemented a 15-year-old law creating a
national database of vehicle histories and many states still aren't participating.
A federal database tracking every vehicle’s title history electronically by VIN would
provide significant consumer protection. State motor vehicle officials could tap
into a car's history within seconds to see if it declared flood damaged or a total
loss at any time, regardless of which state(s) it was previously registered. Yet, after
15 years and $13 million later, 21 states still are not participating, others are only
contributing batches of information and there is still no way to tap the system. Only
nine states (Washington, Nevada, Arizona, South Dakota, Indiana, Kentucky, New
Hampshire, Florida and Virginia) are full online participants.
In 2001, a cost-benefit analysis prepared for the Justice Department found that for
an initial investment of $33 million, National Motor Vehicle Title Information System
(NMVTIS) would yield benefits up to $11.3 billion a year by reducing vehicle theft
and fraud. At present, the system lists 60% of all U.S. vehicles. Officials hope to have
75% within the next six months and continue to strive to achieve 100%.
3. Legislation languishes in Congress aimed at forcing insurance companies
to share vehicle loss data, including flood damage, with online auto history
companies such as Carfax and Experian. The insurance industry has its own
computer system listing loss data, but it's not shared with outsiders.
These “washed” vehicles can and will cross the border. Beware and thoroughly check
a vehicle for flood damage before purchasing – especially those that are coming from
the United States.
Source: American Association of Motor
Vehicle Administrators (AAMVA)
Inves tigations Update
Investigation Statistics
April - October 2007
Complaint Statistics (number of calls)
New purchases
149
Used purchases
454
Repairs and service
186
Information and advice
3,.364
Investigation Statistics
Total Fair Trading Act charges laid
90
Total Criminal Code fraud charges
17
Open investigation files
852
Closed investigation files
858
Total arbitration by investigators $1,401,228
Fines and restitution by the courts
$4,872
FALL 2007
Up close with the new AMVIC board
The volunteer board members donate a significant amount of time and provide excellent direction to AMVIC. The industry
and AMVIC thanks them for their dedicated efforts to help provide a fair marketplace for consumers and businesses.
Aileen Gibb, Hillspring
Aileen Gibb From Hillspring was
appointed as an Industry at Large
member. Aileen is the owner of
Cross Border Trading Ltd. and
is expert in the importing and
exporting of vehicles.
Brent Hesje, Edmonton
Brent Hesje returned for his fourth and
final year on the board as an Industry
at Large member. He was also
appointed as Board Secretary. Brent is
the Chief Executive Officer of Fountain
Tire Corporation based in Edmonton.
Wayne Orsten, Calgary
Wayne Orsten returned for a
second term as the appointee
from the Auctioneer
Association of Alberta. Wayne
works at Michener Allen
Auction in Calgary.
Ross Hodgins, Morinville
Ross Hodgins was appointed
to the board by the
Recreational Vehicle Dealer
Association of Alberta. Ross
is the owner of RV City and
Frontier Honda in Morinville.
Reg Pattemore, Calgary
Reg Pattemore returned for
his fourth and final year as the
appointee by the Motor Dealer
Association of Alberta. Reg
is the owner of Metro Ford in
Calgary. He was also nominated
as Chairperson of the Board.
New salespeople:
register ASAP
The growth in Alberta’s automotive
industry has brought many new
salespeople. It is imperative that each new
salesperson register for the Salesperson
Course for the Fair Trading Act immediately
upon registering. Otherwise, the
temporary registration may expire prior to
taking the course. Avoid jeopardizing one’s
livelihood and register today! October
classes are full, November is at 99%
capacity and December is filling up fast.
Mark Krassman, Medicine Hat Peter Lokstadt, Edmonton Randy Montgomery, Grande Prairie
Mark Krassman was appointed
as an Industry at Large member
representatiing Salespeople in
Alberta. Mark is a Silver Guild
GM salesperson and works at
Davis Pontiac in Medicine Hat.
Robert Pelz, Rocky Mountain House
Robert Pelz was nominated
as an Industry at Large
member representing the
Used Car Dealers in Alberta.
Robert manages the Glover
International Trucks location
in Rocky Mountain House.
Peter Lokstadt returns for
his second year on the board
representing the Automotive
Service and Repair Association.
Peter is the owner of Southern
Auto Body in Edmonton. He
was also appointed as Treasurer.
Gary Walsh, Calgary
Gary Walsh was appointed by the Minister
of Service Alberta representing the
Public. Gary has a rich background in the
motor vehicle industry, recently working
for the government in the North West
Territories. He is now working for AON
Reed Stenhouse Inc. in Calgary.
Randy Montgomery was
appointed as an Industry at
Large member representing
Recycler and Dismantlers
in the province. Randy is
the owner of Harry’s Auto
Wrecking in Grande Prairie.
Bart West, Edmonton
Bart West returns for a second
term representing the Public.
Bart retired from ATCO several
years ago and brings a solid
background of interacting
with government. He is
located in Edmonton.
AMVIC to increase online services
AMVIC is considering expanding its
interactive online communications.
Currently online, only class registration for
the salesperson course is available. New
online options under consideration are:



salesperson registration renewals
new salesperson license applications
online learning by taking the
salesperson course via the internet.
AMVIC needs feedback to determine the
viability of these options. Would it be
more convenient to register online and
if so, how many people would use the
service? If you had the option of taking
the salesperson course via online learning,
would you have chose that option? Are
there any other services that would be
beneficial? Please contact Janet Tancsics
at [email protected] or 466-1140
extension 2224 with comments.
Soon the website will have more
information regarding license status and if
a salesperson has taken the course.
I m pac t ! A Publication of the Alberta Motor vehicle industry council
Concerns about imported vehicles
There has been talk in the motor vehicle industry that vehicles imported into
Canada and sold privately are taking a big bite out of Canadian vehicle sales. Dennis
Desrosiers, president, Desrosiers Automotive Consultants , recently commented on
this issue. Reprinted below by permission is Dennis’s email and supporting statistics.
I've been trying to track down some
reliable statistics on vehicles imported
into Canada. A friend sent data (see
"Import Numbers" below) that documents
these trades very accurately using
Canadian Government numbers. Imports are
certainly up but most are either used
and/or other vehicle types like trailers
or motorcycles. We suspect that over 80%
of these imports are used or non-passenger
carrying units. The number of new vehicles
is actually quite small although growing
rapidly. Most are high-end expensive
vehicles where the price gap is the
largest (not surprising). The price gap on
small entry-level vehicles is small and
very few of these products are coming in.
Although we don't know exactly how many.
Almost 60 percent, of consumer new vehicle
purchases this year are entry-level
vehicles, so the remaining market and a
relatively narrow end of the market is
accounting for most new vehicle imports.
There are also some surprises for
consumers since most don't understand
that they still have to pay tax on these
imports and the Green levy. I had a
Following are statistics for vehicles imported
through the Registrar of Imported Vehicles
(RIV) program.
Year # of Imports
2007 YTD 64,096
2006
112,826
2005
72,639
2004
60,389
2003
48,753
2002
38,923
Year
2001
2000
1999
1998
1997
1996
# of Imports
31,303
28,019
25,857
23,129
25,371
21,111
The statistics exclude salvage vehicles,
parts and vehicles older than 15 years. The
numbers include buses, motorcycles, MPVs,
passenger cars, snowmobiles, snowmobile
cutters, trailers, trailer converter dollies, trucks,
restricted use motorcycles and vehicles that
do not fit neatly into any other class.
consumer e-mail me who found out at the
border that the Green Levy was $4,000 on
his US purchase which pretty much wiped
out the exchange rate advantage. Add-in
higher Canadian taxes and he actually
ended up paying more, not less, by
purchasing in the U.S. Consumers beware!
I don't want to underestimate the impact
of vehicle imports into Canada (primarily
due to the exchange rate) but like most
issues, this one is also being somewhat
over played by the industry and its
watchers. The imports of used vehicles are
definitely hurting resale values and thus
there is a fair amount of residual value
loss in the market currently and this may
be the largest negative for the industry.
We are going to buy over 1.6 million
new vehicles in Canada this year and on
the outside maybe 25 to 35,000 will be
imported. Not a small number but relative
to the total size of the market also not a
huge market. The biggest issue may be the
residual value downside threat. Even the
total number of over 100K new and used is
very small relative to the 19 million plus
vehicles on the road in Canada.
Import Numbers
Historically, most of the imports fit into the
MPV, passenger car or truck class. Basically,
vehicles intended for typical passenger use
(some of the trucks fall into heavy truck
classifications, but most are typical pickups). Of the remaining classes, there are
about 10,000 trailers imported into Canada
annually. Motorcycle imports are generally
around 2,000. Snowmobiles, restricted
use motorcycles, buses, etc. tend to be
insignificant (100's annually, not 1,000's).
For the RIV’s purposes, all of these classes are
lumped together because they follow the
same safety certification program. There is a
different program for importation of salvage
vehicles, parts and vehicles than 15 years
and older.
Contact Information
Required
AMVIC requires one main contact on
file for every business. A recommended
contact person is someone in human
resources or payroll, or alternatively the
sales manager. Having one consistent
contact on file provides the following:

Helps speed up business renewals.
If there are any missing documents,
AMVIC’s licensing advisor will know
whom to contact directly.

Direct contact to AMVIC questions
regarding salesperson applications
and renewals
Sign of the Times
It has been a busy year in licensing.
As of March 31, 2007 AMVIC had
5,458 businesses licensed and 7,903
salespeople registered. This is a healthy
increase from 2006 of 10% and 11%
respectively. Alberta’s buoyant economy
obviously has a positive effect on the
growth of the motor vehicle industry.
Canadian safety standards do not require a
compliance certificate for vehicles over 15years. Hence, RIV excludes these vehicles.
Over the past few years, the number of
vehicles 15 years old and older has increased
considerably. For example, right hand drive
vehicles from Japan, which have a bit of a
following with car enthusiasts. Transport
Canada figures indicate current annual
imports of 15-year-old plus vehicles annually
totals 15,000 to 20,000. An increase of
approximately 10,000 units annually from
2003-2004.
There were 64,096 vehicles imported into
Canada from the U.S. between Jan 1, 2007
and June 30, inclusive. For the same period
in 2006, 49,709 vehicles were imported.